ACC shareholders came down heavily on the company’s decision to pay a royalty for the ‘technical know-how’ to the Switzerland-based parent Holcim.

Speaking at the company’s 77th Annual General Meeting, N.V. Jhaveri, a shareholder of ACC for last five years, drew an analogy and said no parent in the world would demand royalty for imparting knowledge to their kids. Holcim, he argued was already a major beneficiary of the liberal dividend policy being followed by ACC and this additional Rs 100 odd-crore by way of one per cent royalty on turnover will be the icing on the cake.

Justifying the royalty, Kuldip Kaura, Managing Director, ACC, said that Holcim being a 100-year-old global company had already experienced infrastructure developments in other countries which were only just beginning in India.

“We have a ready-made knowledge to look up to – not only in cement production but also on the ways it should be used. Be it in construction of a 100-storey building, hydro electric project or laying a highway, Holcim is there to help us. It also guides us on the use of alternate fuel,” he said.

He also clarified that the technical know-how will be exclusive to the Holcim group companies in India.

The royalty will come into effect from this year.

For instance, ACC will shell out Rs 111 crore as royalty on a turnover of Rs 11,130 crore in 2012, while Ambuja Cement another Holcim company will pay Rs 97 crore on its sales of Rs 9,675 crore.


On the cartelisation case being heard by the Competition Appellate Tribunal, Kaura said the company has already argued on its behalf and the final judgment is expected this month.

Holcim group companies — ACC and Ambuja Cement — face a penalty of Rs 1,148 crore and Rs 1,164 crore, respectively.

(This article was published on April 5, 2013)
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