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Andhra Cements Ltd.

BSE: 532141 Sector: Industrials
NSE: ANDHRACEMT ISIN Code: INE666E01012
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OPEN 7.55
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VOLUME 8717
52-Week high 11.00
52-Week low 5.62
P/E
Mkt Cap.(Rs cr) 221.61
Buy Price 7.55
Buy Qty 310.00
Sell Price 7.60
Sell Qty 1.00
OPEN 7.55
CLOSE 7.55
VOLUME 8717
52-Week high 11.00
52-Week low 5.62
P/E
Mkt Cap.(Rs cr) 221.61
Buy Price 7.55
Buy Qty 310.00
Sell Price 7.60
Sell Qty 1.00

Andhra Cements Ltd. (ANDHRACEMT) - Director Report

Company director report

To

The Members

The Directors of your Company are pleased to present the Seventy Sixth Annual Reporttogether with the Audited Accounts of the Company for the 15 months period ended 30thJune 2015.

FINANCIAL HIGHLIGHTS

The working results of the Company for the period under report are as under:

(Rs in lakhs)

Current period Previous Year
2014-15 2013-14
(15 months) (12 months)
Net Sales 27802 -
Other Income 906 308.92
PBIDT 3327 (1175.83)
Finance Cost 6246 788.48
Depreciation 2519 249.43
Profit/(Loss) before exceptional Items (5438) (2213.74)
Profit/(Loss) before Tax (9891) (2213.74)
Deferred Tax - 5607.63
Net Profit / (Loss) (9889) (7821.37)

1. PLANTS AND OPERATIONS

During the period under review Company’s both the plants viz Durga Cement Works(DCW) and Visakha Cement Works (VCW) commenced commercial operations with effect from 1stDecember 2014. However due to some pending minor balance works the plants could notoperate in full swing during the period. CPP (30MW) project works were under progress andnearing completion.

2. SHARE CAPITAL

The paid up equity share capital as at 30th June 2015 is Rs. 29352 lacs. During theperiod under review your Company has not issued any shares with differential rightssweat equity shares and equity shares under employees stock option scheme. Your Companyhas not bought back its own shares during the period under review.

3. DIVIDEND

In view of the absence of sufficient net profit during the period under review theDirectors regret their inability to recommend any dividend.

4. DIRECTORATE AND KEY MANAGERIAL PERSONNEL

During the period under report the following changes took place in the Board of theCompany:

1. As already reported in the 75th Annual Report for the Financial Year 2013-14 ShriSujit Kumar Mandal appointed as Managing Director of the Company with effect from 11thAugust 2014 and his appointment was approved by the members in the 75th Annual GeneralMeeting held on 30th September 2014.

During the period under review in view of the restrictions on the maximum number ofDirectorships under the Companies Act 2013 Shri Manoj Gaur resigned as Director /Chairman of the Company w.e.f 9th August 2014. The Board places on record itsappreciation for the valuable contribution and leadership provided by Shri Manoj Gaur inrevival and rehabilitation of the plants of the Company. Shri K.N. Bhandari IndependentDirector has been elected as Chairman of the Company w.e.f 11th August 2014.

2. Shri Harish K. Vaid and Shri V.K Jain Directors would retire by rotation at theensuing Annual General Meeting and being eligible they offer themselves forre-appointment.

3. During the period under report the Board Meet 6 times the details whereofare given in Report on Corporate Governance. The meetings of Board of Directors were heldon 26th May 2014 11th August 2014 30th September 2014 12th November 2014 11thFebruary 2015 and 13th May 2015.

4. All Independent Directors have given declaration that they meet the criteria ofindependence as laid down under Section 149(6) of the Companies Act 2013 and Clause 49 ofthe Listing Agreement.

5. Pursuant to the provisions of the Companies Act 2013 and Clause 49 of the ListingAgreement the Board has carried out an annual performance evaluation of its ownperformance the Directors individually as well as the evaluation of the Committeesconstituted by it. The manner in which the formal annual evaluation has been carried outhas been explained in the Report on Corporate Governance.

6. Pursuant to the provisions of Section 203 of the Companies Act 2013 read with Rule8 & Rule 8A of the Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014 the Board of Directors has confirmed and noted Shri Sujit Kumar MandalManaging Director & CEO Shri A.K. Agrawal CFO and Shri G. Tirupati Rao GeneralManager (Legal) & Company Secretary as Key Managerial Personnel of the Company.

7. The Board has on the recommendation of the Nomination & Remuneration Committeeadopted a policy for selection and appointment of Directors Senior Management and theirremuneration. Brief features of the said Policy are:

a) Nomination and Remuneration Committee shall formulate the criteria for determiningqualifications positive attributes and independence of Director;

b) Nomination and Remuneration Committee shall identity persons who are qualified tobecome Director and persons who may be appointed in Key Managerial and Senior ManagementPosition;

c) While selecting Independent Directors the Nomination and Remuneration Committeeshall identity persons of integrity who possess relevant expertise and experience requiredfor the position;

d) Non-executive/Independent Director may receive remuneration by way of sitting feesfor attending meetings of Board or Committee thereof as amount as may be approved by theBoard of Directors within the limits prescribed under the Companies Act 2013 and therules made thereunder provided that the amount of such fees shall not exceed Rs. One lacper meeting of the Board or Committee or such amount as may be prescribed by the CentralGovernment from time to time. The sitting fee for Independent Directors and WomenDirectors shall not be less than the sitting fee payable to other Directors;

e) An Independent Director shall not be entitled to any stock option of the Company;

f) Other employees of the Company shall be paid remuneration as per the Company’sHR policies. The breakup of the pay scale and quantum of perquisites includingemployer’s contribution to PF pension scheme medical expenses etc. shall be as perthe Company’s HR Policy.

The Company shall reimburse actual expenditure incurred by the Directors in theperformance of their duties as per the rules and policies of the Company.

Remuneration of other employees shall be reviewed/decided on an annual basis or earlierif deemed necessary based on performance appraisal of individual employees taking intoaccount several factors such as job profile qualifications seniority experiencecommitment including time commitment performance and their roles and duties in theorganization.

g) The age term of appointment and retirement of Managing Director/Whole-time Directorshall be determined in accordance with the provisions of Companies Act 2013 read withRules made thereunder;

h) Managing Director/Whole-time Director and Key Managerial Personnel shall be paid theremuneration within the overall limit prescribed under the Companies Act 2013 and theRules made thereunder as recommended by the Nomination and Remuneration Committee subjectto the approval of the Board;

i) The Company shall provide suitable training to Independent Directors to familiarizethem with the Company their roles rights responsibilities in the Company nature of theIndustry in which the company operates business model of the Company etc;

5. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

All Related Party Transactions that were entered into during the financial year were onan arm’s length basis and were in the ordinary course of business. During the periodthe Company had not entered into any contract/ arrangement/transaction with relatedparties which could be considered material in accordance with the policy of the Company onmateriality of related party transaction.

The policy on materiality of Related Party Transactions and dealing with Related PartyTransactions as approved by the Board may be accessed on the Company’s website atwww.andhracements.com

The details of Related Party Transactions as required under Accounting Standard –18 are provided in the accompanying financial statements forming part of this AnnualReport. Form AOC- 2 pursuant to Section 134 (3)(h) of the Companies Act 2013 read withRule 8(2) of the Companies (Accounts) Rules 2014 is set out as "Annexure-A"to this Report.

6. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

There are no significant and material orders passed by the Regulators / Courts whichwould impact the going concern status of the Company and its future operations.

7. AUDITORS

7.1 Statutory Auditors

As the members are aware in accordance with the provisions of Section 139 of theCompanies Act 2013 and the Rules made thereunder M/s. Chaturvedi & ParternsChartered Accountants (Firm Registration No. 307068E) were appointed as StatutoryAuditors of the Company in the last Annual General Meeting (AGM) for a period of Fiveconsecutive years till the conclusion of Eightieth AGM of the Company to be held in theyear 2019. The appointment of Statutory Auditors has to be ratified at every AGM. TheStatutory Auditors being eligible offer themselves for re-appointment. The Company hasobtained a written consent and a certificate from the Statutory Auditors to the effectthat their reappointment if made would be in accordance with the conditions as may beprescribed and they fulfill the criteria laid down in Section 141 of the Companies Act2013.

Based on the recommendations of the Audit Committee the Board has recommended theratification of appointment of M/s. Chaturvedi & Parterns Chartered Accountants asStatutory Auditors of the Company to hold office till the conclusion of the EightiethAnnual General Meeting to be held in the year 2019 subject to ratification of theirappointment in every AGM.

7.2 Cost Auditors

Since the production at both the plants of the Company had commenced with effect from1st December 2014 Cost Auditor was not required to be appointed to conduct the CostAudit for the 15 months period ended 30th June 2015. However for the financial year2015-16 the Company is required to appoint Cost Auditors as per the provisions of theCompanies Act 2013 and Companies (Cost Records and Audit) Rules 2014.

FortheFinancialYear2015-16theBoardofDirectors of the Company have on therecommendation of Audit Committee appointed M/s. J.K. Kabra & Associates CostAuditors of the Company for auditing the Cost Records relating to the product‘Cement’ and the Resolution for ratification of their remuneration has beenincluded in the Notice for ensuing Annual General Meeting.

7.3 Secretarial Audit

Secretarial Audit Report for the financial period ended 30th June 2015 issued by M/S.Savita Jyoti Associates Company Secretaries in form MR-3 forms part of this report andmarked as "Annexure-B".

The said report does not contain any qualification or observation requiring explanationor comments from Board under section 134(3)(f)(ii) of the Companies Act 2013.

Pursuant to the provisions of Section 204 of the Companies Act 2013 read with Rule 9of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 theBoard on the recommendations of the Audit Committee has appointed M/s. Savita JyotiAssociates a firm of Company Secretaries in Practice to undertake the Secretarial Auditof the Company for the financial year ended 31st March 2016.

7.4 Internal Auditor

The Board on the recommendations of the Audit Committee has appointed M/s. Lodha& Co. Chartedred Accountants as internal Auditors of the Company for the financialyear 2015-16.

8. EXTRACT OF ANNUAL RETURN

Pursuant to the provisions of section 134(3)(a) of the Companies Act 2013 Extract ofthe Annual Return for the 15 months period ended 30th June 2015 made under provisions ofSection 92(3) of the Act is attached as "Annexure-C" which forms part ofthis Report.

9. PARTICULARS OF LOANS GUARANTEES AND INVESTMENTS

During the period under review there were no Loans Guarantees and Investmentsmade/given as per the provisions of Section 186 of the Companies Act 2013.

10. RISK MANAGEMENT

Pursuant to the requirement of Clause 49 of the Listing Agreement the Company hasformulated a Risk Management Policy. The Risk Management Policy inter-alia: a)define framework for identification assessment monitoring mitigation and reporting ofrisks. b) ensures that all the current and future material risk exposures of the Companyare identified assessed quantified appropriately mitigated minimized and managed i.eto ensure adequate systems for risk management.

11. CORPORATE SOCIAL RESPONSIBILITY

The provisions realting to Corporate Social Responsibility (CSR) not applicable tothe Company due to absence of required net profit/turnover.

12. MATERIAL CHANGES AND COMMITMENTS

In terms of Section 134(3) (i) of the Companies Act 2013 except as disclosedelsewhere in this report no material changes and commitments which could affect theCompany’s financial position have occurred between the end of the 15 months periodand date of this report.

13. CORPORATE GOVERNANCE

Report on Corporate Governance and Management Discussion & Analysis Report interms of Clause 49 of the Listing Agreement are annexed and form part of this AnnualReport. A certificate from the Practicing Company Secretary confirming compliance with theconditions of Corporate Governance is also annexed.

14. DIRECTORS’ RESPONSIBILITY STATEMENT

Pursuant to the provisions of Section 134(5) of the Companies Act 2013 the Directorsbased on the representation received from the operating management certification by CEOand CFO to the Board of Directors and after due enquiry confirm that in respect of theAudited Annual Accounts for the 15 months period ended 30th June 2015:

a) that in the preparation of the annual accounts the applicable accounting standardshad been followed and that there were no material departures;

b) that the Directors had in consultation with the Statutory Auditors selected suchaccounting policies and applied them consistently and made judgments and estimates thatare reasonable and prudent so as to give a true and fair view of the state of affairs ofthe Company for the 15 months period ended 30th June 2015 and the loss of the Company forthat period;

c) that the Directors had taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act 2013for safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities;

d) that the Directors had prepared the annual accounts on a going concern basis;

e) that the Directors had laid proper internal financial controls to be followed andthat such internal financial controls were adequate and were operating effectively; and

f) that Directors had devised proper systems to ensure compliance with the provisionsof all applicable laws that such systems were adequate and operating effectively.

15. WHISTLE BLOWER POLICY AND VIGIL MECHANISM

The Company has in terms of the provisions of Section 177(9) of the Companies Act 2013read with Rule 7 of the Companies (Meeting of Board and its Powers) Rules 2014 and Clause49 of the Listing Agreement formulated Whistle Blower Policy and Vigil Mechanism forDirectors and employees under which protected disclosures can be made by a whistle blower.

16. INTERNAL FINANCIAL CONTROL

The Internal Financial Controls with reference to financial statements as designed andimplemented by the Company are adequate. During the year under review no material orserious observation has been received from the Internal Auditors of the Company forinsufficiency or inadequacy of such controls.

The information about internal financial controls is set out in the ManagementDiscussion & Analysis Report which forms part of this Report.

17. DEPOSITS

The Company has not accepted or renewed any amount falling within the purview ofprovisions of Section 73 of the Companies Act 2013 ("the Act") read with theCompanies (Acceptance of Deposit) Rules 2014 during the year under review. Hence thedetails relating to deposits as also requirement for furnishing of details of depositswhich are not in compliance with Chapter V of the Act is not applicable.

However in accordance with the Modified Rehabilitation Scheme (MS-08) the Company issettling the claims lodged by fixed deposit holders. During the period No Fixed Depositclaims were settled.

18. REDEMPTION OF PREFERENCE SHARES

A sum of Rs.1.92 lacs towards redemption of Preference Shares remains unclaimed. It hasnot been possible to locate the addresses of the shareholders despite notices beingpublished in daily newspapers. These are being paid as and when claimed. There is noliability for dividend on these shares.

19. PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES

In terms of the provisions of Section 197(12) of the Act read with Rules 5(2) and 5(3)of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 astatement showing the names and other particulars of the employees drawing remuneration inexcess of the limits set out in the said Rules forms part of this Annual Report and isprovided as "Annexure- D (I)" in this report.

Disclosures pertaining to remuneration and other details as required under Section197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 are provided as "Annexure- D (II)" tothis Report.

20. PARTICULARS OF ENERGY CONSERVATION TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGEEARNINGS AND OUTGO

The information on conservation of energy technology absorption and foreign exchangeearnings and outgo stipulated under Section 134 of the Companies Act 2013 read with Rule8 of The Companies (Accounts) Rules 2014 is annexed herewith as "Annexure-E".

21. ACKNOWLEDGEMENT

The Board places on record its sincere appreciation and gratitude to variousDepartments and Undertakings of the Central Government and State Governments FinancialInstitutions Banks and other authorities for their continued co-operation and support tothe Company. The Board sincerely acknowledges the faith and confidence reposed by theShareholders in the Company.

For and on behalf of the Board
K.N. BHANDARI
Place : Noida Chairman
Date : 28th August 2015 [DIN: 00191219]

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