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Ambuja Cements

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Directors Report Year End : Dec '15    « Dec 14
Dear Members,
 
 We are pleased to present the Annual Report of the\ Company for the
 year 2015.
 
 1.  FINANCIAL RESULTS 2015 AT A GLANCE (STAND-ALONE RESULTS):
 
 - Cement production increased by 0.5% to reach 21.5 million tonnes,
 from 21.4 million tones while clinker production decreased by 3% to
 14.4 million tonnes, from 14.9 million tonnes in 2014.
 
 - Domestic cement sales volume in 2015 increased marginally to 21.5
 million tones. Clinker sales (including exports) decreased from 0.61
 million tonnes in 2014 to 0.27 million tonnes in 2015.
 
 - Net sales at - 9,368 crores were down by 5.5% than that of the
 previous year''s - 9,911 crores.  Average sales realization decreased by
 around 3.9% at - 4,297 per tonne against approx - 4,474 per tonne in
 2014.
 
 - Total (operating) expenses for the year 2015 were marginally lower
 than the previous year.
 
 - The Company achieved an absolute EBITDA of - 1,531 crores which was
 lower by 20.6% over the corresponding EBITDA of - 1,928 crores of the
 year 2014. This was mainly on account of lower cement sales
 realization.
 
 - Profit before Tax at - 1,172 crores was down by 34.3% over
 corresponding Profit before Tax of
 
 - 1,783 crores for the year 2014. Fall in Profit before Tax was due to
 lower EBITDA and additional depreciation charge on account of
 implementation of the provisions of new Companies Act, 2013.  - Net
 Profit at - 808 crores was down by 46% over corresponding Net Profit of
 - 1,496 crores for the year 2014. This was mainly due to lower Profit
 before Tax coupled with write back of tax provision in previous year of
 - 176 crores as against additional tax pertaining to previous years of
 - 56 crores during current year.
 
                                                  Amount in Rs, crores
 
                     Stand alone                          Consolidated
 
                   Current     previous       current       previous
                   Year        year           Year          year
                   31.12.      31.12.2014     31.12         31.12
                   2015        2014           2015          2014             
 
 
 Sales (Net 
 of excise 
 duty)             9,368.30    9,910.70       9,388.00      9,930.54
 
 Profit 
 before 
 interest, 
 depre-
 ciation 
 and
 excep-
 tional 
 item              1,889.66    2,357.42       1,895.48      2,352.60
 
 Less: 
 Finance 
 costs                91.79       64.48          92.47         65.55
 
 Gross 
 profit            1,797.87    2,292.94       1,803.01      2,287.05
 
 Less: 
 Depre-
 ciation 
 and
 Amor-
 tization 
 Expense             625.66      509.53         629.76        513.03
 
 Profit 
 before 
 Tax               1,172.21    1,783.41       1,173.25      1,774.02
 
 Less: 
 Tax 
 Expense             364.65      287.05         365.37        287.51
 
 Profit 
 after 
 Tax but 
 before
 Minority 
 Interest            807.56    1,496.36         807.88      1,486.51
 
 Less : 
 Minority 
 Interest                 -           -              -         (0.01)
 
 Profit for
 the Year            807.56    1,496.36         807.88      1,486.50
 
 Add : 
 Balance 
 as per 
 the last
 Financial 
 Statements        1,655.93    1,230.69       1,941.15      1,525.77
 
 Profit 
 available 
 for 
 appro-
 priation          2,463.49    2,727.05        2,749.03     3,012.27
 
 Appro-
 priations:
 
 General 
 Reserve                  -      150.00               -       150.00
 
 Adjustment 
 for 
 Depre-
 ciation 
 and
 Amorti-
 zation as 
 per 
 Schedule II 
 of the
 Companies 
 Act, 2013           106.63            -         108.91            -
 
 Dividend 
 on Equity 
 Shares
 (including 
 interim)            434.53       774.61         434.53       774.61
 
 Corporate 
 Dividend 
 Tax                  88.46       146.51          88.46       146.51
 
 Total               629.62     1,071.12         631.90     1,071.12
 
 Balance 
 carried 
 forward 
 to Balance 
 Sheet             1,833.87     1,655.93       2,117.13     1,941.15
 
 
 2.  DIVIDEND
 
 The Company paid an interim dividend of 80% (Rs, 1.60 per share) during
 the year. In view of the substantial decline in the Profit after Tax
 for the full year and with a view to conserve resources for the future
 requirements, the Directors have recommend a final dividend of 60% (
 Rs,1.20 per share). Thus, the aggregate dividend for the year 2015 is
 140% (Rs, 2.80 per share) and the total payout will be Rs, 522.99
 crores, including dividend distribution tax of Rs, 88.46 crores.  This
 represents a payout ratio of 65%.
 
 3. CORPORATE SOCIAL RESPONSIBILITY (CSR)
 
 The Company has made conscious efforts to involve communities in its
 development journey through Ambuja Cement Foundation (ACF), the CSR arm
 of the company. ACF realized its responsibility to co-exist peacefully
 with the host communities, and over the past two decades has
 kick-started multiple programmers at 21 locations across 11 states.
 
 ACF''s programs are focused on: Water Management, Skill and
 Entrepreneurship Development, Healthcare, Education, Women Empowerment
 and Agro-based Livelihoods. Detailed report on CSR activities including
 amount spent is given in Annexure I.
 
 WATER MANAGEMENT
 
 With the motive of ''giving more than we take'', ACF has been working in
 Gujarat, dry arid territories of Rajasthan, hilly regions of Darlaghat
 and the water scarce state of Andhra Pradesh. To date, ACF has reached
 out to more than 400,000 people across locations. Initiatives like
 renovation of traditional water reservoirs, pond deepening, roof rain
 water harvesting structures (RRWHS) and reverse osmosis plants, among
 others have improved accessibility to healthy drinking water. In
 addition, these initiatives have improved the quality of land and
 environment.
 
 THE ONLY WATER POSITIVE CEMENT COMPANY IN INDIA.
 
 As a result of these efforts, the Company was certified as 4.03 times
 water positive. ACL''s Rabriyawas plant, located in middle of a desert
 in Rajasthan, has been certified 13 times water positive. For
 Rabriyawas, water has changed the landscape in the region, with
 improvement in not just biodiversity and land quality, but also the
 livelihoods and lifestyle of people.
 
 Ambuja Cement is the only water positive cement Company in India with
 total water credits of 31 million cubic metres.
 
 AGRO-BASED LIVELIHOODS
 
 Strengthening community through sustainable livelihoods programmers has
 changed the lives of youth, women and farmers in nearby communities.
 
 The agro-based livelihood generation programmed to make agriculture and
 allied activities a sustainable source of livelihood has introduced the
 farmers to new technologies and created market linkages reaching out to
 over 85,000 farmers. Crop specific programmers - Better Cotton
 Initiative (BCI) reached out to more than 26,000 farmers covering
 40,000 hectares of land and System for Rice Intensification (SRI)
 project has covered 800 farmers, and is in an expansion mode. The
 initiative to promote animal care has changed lives of many women in
 Darla hat. The local women are trained as para-veterinarians or Pashu
 Swasthya Sevikas (PSS), thus providing the much needed access to cattle
 care, improving the status of agriculture allied activities. To promote
 allied farming livelihoods, the farmers were introduced to Alternative
 Fuel Resource (AFR), where they get paid by Ambuja to provide
 bio-wastes like sugarcane trash, leaves, cotton stalk, wheat straw and
 other crop residues as biomass.
 
 To enhance alternative means of livelihood and develop the skills of
 community youth, ACF has established 16 Skill and Entrepreneurship
 Development Institutes (SEDI) across 10 states that provides vocational
 training in 12 sectors. Till date, SEDI has trained almost 26,400
 youth, of which 70% have been successfully placed in various
 industries.
 
 SEDI, Nagaur (Rajasthan) has trained 60 physically challenged youth, of
 which 90% have started their independent enterprises.
 
 HEALTH AND SANITATION
 
 ACF has been actively working on clinical, preventive and promotive
 healthcare through mobile medicare units, community health clinics,
 diagnostic centres and specialised health camps. The health projects
 are implemented in close coordination with Public Health Departments,
 panchayats, Village Development Committees and led by a cadre of
 voluntary health workers or sakhis, who work as the interface between
 the public health system and the community. Today, sakhis are active
 participants in the village health and sanitation committees, vocal at
 gram sabhas about healthcare issues and are resource persons promoting
 awareness on rural health and hygiene.
 
 KEEPING IT CLEAN
 
 ACF along with Women''s Federations in Chandrapur (Maharashtra) and
 Kodinar (Gujarat) encouraged people to construct toilets in their
 households to improve health and sanitation. The two Federations, with
 435 self help groups (SHG) and over 4800 members are driving
 communities to adopt hygienic practices. In Darlaghat (Himachal
 Pradesh), children from the community ensured an open defecation free
 (ODF) village. Known as Swachata Doot (Messengers of Cleanliness),
 these children spread the message by demonstrating hygiene and
 cleanliness in their allocated area.
 
 As part of the sanitation project, more than 22,000 toilets have been
 constructed in 130 villages in different locations of the Company. ACF
 aims to make all the villages that they are working in 100% ODF by
 2020. Under the school sanitation programme, ACF has resolved issues in
 172 schools. Each of these schools have a vigilance committee with
 school children as committee members, ensuring cleanliness and
 sanitation in their school premises.
 
 AMBUJA MANOVIKAS KENDRA (AMK)
 
 pAt this special facility for intellectually challenged children in
 Ropar, Punjab, two students brought glory to their school at the Summer
 Special Olympics 2015 organized in Los Angeles, USA. Meera Kumari and
 Pawandeep Singh won the gold and bronze medals in the cycling and
 basketball categories respectively.  This has added yet another credit
 to AMK with seven of its students to date, having won 11 medals at the
 Summer Special Olympics under different categories.
 
 STAKEHOLDER ENGAGEMENT
 
 ACL''s communities and stakeholders participate in identifying issues
 and evolving solutions in a systematic and continuous manner.
 
 - Community Advisory Panels (CAP) consisting of community members and
 members from Ambuja Cement, meet regularly to discuss the community
 concerns.
 
 - Community Engagement Plans (CEP) are prepared annually by ACF in
 close consultation with the community and ACL units, based on concerns
 raised at CAPs and other stakeholder meetings.
 
 - Social Engagement Scorecard (SES) is conducted annually at all
 locations, to provide a review of programs in the form of group
 discussions and opinion leader interviews.
 
 - Site Specific Impact Assessments (SSIA) are conducted cyclically to
 apprehend the insights and needs of all stakeholders of the Company.
 
 4. HEALTH & SAFETY (H&S)
 
 Health & Safety is an overarching value for all of us at Ambuja. The
 Company is committed to ensure safety of all its employees, contractors
 and everyone associated with it. It firmly believes in the policy of
 Zero Harm.  Our onsite performance has gradually improved since 2013.
 From ten fatalities in 2013, it was three in 2014 and one in 2015. The
 ''We Care'' - our Health & Safety Excellence Journey initiative launched
 across the Company the previous year has remarkably helped in changing
 the mindset of our people and strengthening the safety culture in the
 Company.
 
 It was observed that everyone across the plants was speaking the
 language of safety. Under ''We Care'', Health & Safety was made a line
 responsibility and not the functional obligation. This led to
 standardization of processes, increased participation, involvement and
 engagement of people on the ground.
 
 For capability building, a mass training program was rolled out for
 6500 employees and contractors involved in high risk activities; also
 conducted certification programs with the help of external experts.
 With the objective of emotional engagement and changing mind-set
 towards safety, 12000 people were connected through sensitization
 workshops and behaviour-based training (BBS) for over 900 front-line
 staff and workers. A Reward & Recognition program was introduced where
 374 individuals and 31 teams were rewarded for proactive interventions.
 
 Even as our efforts in 2015 have been good, we need to continue the
 momentum in the coming year especially in improving H&S engagement and
 accountability. In 2016, our focus will be on implementation which
 would include enforcing on-ground learning''s and demonstrating it too.
 Besides rewards, there is a need to introduce consequence management
 for any non-compliance on safety. A matter of concern has been
 Vehicular & Traffic Safety, which will be incorporated this year as
 part of our larger strategy.
 
 So far, we have been on the right track on our H&S journey and our
 teams are committed to achieve the goal of Zero Harm.
 
 5.  MERGER OF HOLCIM LTD. SWITZERLAND AND LAFARGE SA FRANCE
 
 On 10th July, 2015 Holcim Ltd. Switzerland and Lafarge SA, France
 announced the completion of their global merger to create LafargeHolcim
 Ltd. (LH), a world leader in cement and building material industry.  LH
 is present in 90 countries with around 1,15,000 employees. LH is the
 ultimate holding Company and Ambuja continues to receive all-round
 support from them in various facets of the Company''s business and
 support functions.
 
 6.  ORDER OF COMPETITION APPELLATE TRIBUNAL (COMPAT)
 
 In June 2012, the Competition Commission of India (CCI) passed an Order
 levying a penalty of -1163 crores on the Company in connection with a
 complaint filed by the Builders Association of India against leading
 cement companies (including Ambuja) for alleged violation of certain
 provisions of the Competition Act, 2002. The Company filed an appeal
 before the COMPAT for setting aside the said Order of CCI. The COMPAT
 granted stay on levying the penalty imposed on the Company by CCI
 against deposit of 10% of the penalty amount.
 
 In December 2015, the COMPAT finally set aside the said Order of CCI
 and remanded back to CCI for fresh adjudication of the issues and
 passing of fresh Order. It also allowed the Company to withdraw the
 amount of 10% deposit kept with the CCI.
 
 7.  TREASURY OPERATIONS
 
 During the year, the Company''s treasury operations continued to focus
 on cash forecasting and deployment of excess funds on the back of
 effective portfolio management of funds within a well-defined risk
 management framework.
 
 All investment decisions in deployment of temporary surplus liquidity
 continued to be guided primarily by the tenets of safety of Principal
 and liquidity. Proactive management of portfolio helped improve
 treasury yield performance.  During the year, the investment portfolio
 mix was continuously rebalanced in line with the evolving interest rate
 environment.
 
 8.  DEPOSITS
 
 The Company has not accepted any deposits from the public/members under
 Section 73 of the Companies Act, 2013 read with Companies (Acceptance
 of Deposits) Rules, 2014 during the year.
 
 9.  PURCHASE OF SHARES IN HOLCIM INDIA PVT. LTD. (HIPL) AND
 AMALGAMATION OF HIPL WITH THE COMPANY
 
 The members may be aware that the Company had proposed to acquire 24%
 equity shares of HIPL from Holderind Investment Limited, Mauritius and
 subsequently amalgamating HIPL with the Company under the Scheme of
 Amalgamation. The Scheme has been approved by the requisite majority of
 the Members and has also received assent from the Hon''ble High Courts
 at Gujarat and Delhi. However, the Scheme will be effective upon
 receipt of approval from the Foreign Investment Promotion Board (FIPB),
 Government of India which is yet to be received.
 
 On the scheme being effective, the Company will hold 50.01% equity
 shares in ACC Limited and consequently ACC Limited and all its
 subsidiaries will become the subsidiary of the Company.
 
 10.  EMPLOYEE STOCK OPTION SCHEME (ESOP)
 
 During the year, the last ongoing ESOP scheme got closed and the
 Company did not grant any fresh stock option to its employees.
 Henceforth, information on stock options will be given only when fresh
 options are granted by the Company.
 
 11.  DISCLOSURES UNDER THE COMPANIES ACT, 2013 AND LISTING REGULATIONS
 
 (I) EXTRACT OF ANNUAL RETURN:
 
 The details forming part of the extract of the annual return is given
 in Annexure II.
 
 (II) NUMBER OF BOARD MEETINGS:
 
 The Board of Directors met 7 (seven) times in the year 2015. The
 details of the board meetings and the attendance of the Directors are
 provided in the Corporate Governance Report.
 
 (III) CHANGES IN SHARE CAPITAL:
 
 During the year under review, the Company allotted 21,51,635 equity
 shares of the face value of - 2 each upon exercise of stock options
 under various Employee Stock Option Schemes. Consequently the equity
 share capital has increased from - 309,94,91572 divided into
 154,97,45,786 equity shares of - 2 each to - 310,37,94,842 divided into
 155,18,97,421 equity shares of - 2 each. All the equity shares forming
 part of the share capital rank pari-passu in all respect.
 
 (IV) CONTINUANCE OF THE EXISTING FINANCIAL YEAR: Pursuant to the
 requirement of consolidation of the Company''s accounts with the
 ultimate Holding Company, Lafarge Holmic Ltd., the Company will
 continue to follow the Calendar Year (1st January – 31st December) as
 its Financial Year. Necessary approval from the Company Law Board has
 been obtained in this regard.
 
 (V) COMPOSITION OF AUDIT COMMITTEE:
 
 The Board has constituted the Audit Committee which comprises of Mr
 Rajendra Chitale as the Chairman and Dr Omkar Goswami, Mr Nasser Munjee
 and Mr Bernard Terver (since resigned) as members. More details on the
 committee are given in the Corporate Governance Report.
 
 (VI) RELATED PARTY TRANSACTIONS:
 
 All the related party transactions are entered on arm''s length basis,
 in the ordinary course of business and are in compliance with the
 applicable provisions of the Companies Act, 2013 and the Listing
 Regulations. There are no materially significant related party
 transactions made by the Company with Promoters, Directors or Key
 Managerial Personnel etc. which may have potential conflict with the
 interest of the Company at large or which warrants the approval of the
 shareholders. Accordingly, no transactions are being reported in Form
 AOC-2 in terms of Section 134 of the Act read with Rule 8 of the
 Companies (Accounts) Rules, 2014. However, the details of the
 transactions with Related Party are provided in the Company''s financial
 statements in accordance with the Accounting Standards.
 
 All Related Party Transactions are presented to the Audit Committee and
 the Board. Omnibus approval is obtained for the transactions which are
 foreseen and repetitive in nature. A statement of all related party
 transactions is presented before the Audit Committee on a quarterly
 basis, specifying the nature, value and terms and conditions of the
 transactions. The statement is supported by the certificate from the MD
 & CEO and the CFO.
 
 The Related Party Transactions Policy as approved by the Board is
 uploaded on the Company''s website at http://www.ambujacement.com/
 wpcontent/uploads/2015/12/policy_on_determ ining _materiality
 _of_rpt_28_oct_2015_revised.pdf
 
 (VII) POLICY ON SEXUAL HARASSMENT OF WOMEN AT WORKPLACE:
 
 The Company has zero tolerance towards sexual harassment at the
 workplace and towards this end, has adopted a policy in line with the
 provisions of Sexual Harassment of Women at Workplace (Prevention,
 Prohibition and Redressal) Act, 2013 and the Rules thereunder. All
 employees (permanent, contractual, temporary, trainees) are covered
 under the said policy. An Internal Complaints Committee has also been
 set up to redress complaints received on sexual harassment.
 
 During the financial year under review, the Company has not received
 any complaints of sexual harassment from any of the women employees of
 the Company.
 
 12. CORPORATE GOVERNANCE
 
 The Company has complied with the corporate governance requirements
 under the Companies Act, 2013, and as stipulated under the listing
 regulations.  A separate section on corporate governance under the
 listing regulations, along with a certificate from the auditors
 confirming the compliance, is annexed and forms part of this Annual
 Report.
 
 13.  BUSINESS RESPONSIBILITY REPORT
 
 The Business Responsibility Report for the year ended 31st December
 2015, as stipulated under regulation 34 of the Listing Regulations is
 annexed and forms part of the Annual Report.
 
 14.  INTERNAL CONTROL SYSTEM
 
 INTERNAL AUDITS AND CONTROLS
 
 The Company''s internal controls system has been established on values
 of integrity and operational excellence and it supports the vision of
 the Company To be the most sustainable and competitive Company in our
 industry. Over the years, formal and independent evaluation of
 internal controls and initiatives for remediation of deficiencies by in
 house Internal Audit department have resulted in a robust framework for
 Internal Controls, commensurate with the size and complexity of the
 business.
 
 The internal control framework essentially has two elements: (1)
 structures, policies and guidelines designed to achieve efficiency and
 effectiveness in operations and compliance with laws and regulations;
 (2) an assurance function provided by Internal Audit.
 
 The Company also has well-documented Standard Operating Procedures
 (SOPs) for various processes which are periodically reviewed for
 changes warranted due to business needs. The Internal Audit department
 continuously monitors the efficiency of the internal
 controls/compliance with SOPs with the objective of providing to Audit
 Committee and the Board of Directors, an independent, objective and
 reasonable assurance of the adequacy and effectiveness of the
 organization''s risk management, control and governance processes. This
 formalized system of internal control facilitates effective compliance
 of Section 138 of Companies Act, 2013, the Listing Regulations and also
 the relevant statutes applicable to the parent organization.
 
 KEEPING AN EYE ON OURSELVES
 
 The scope and authority of Internal Audit activity are well-defined in
 the Internal Audit Charter, approved by the Audit Committee. The
 Internal Audit department develops the risk based annual audit plan
 with inputs from business risk management, prominent stakeholders and
 previous audit reports. The annual internal audit plan is approved by
 the Audit committee.
 
 The Audit Committee meets regularly to review reports, including
 significant audit observations and follow-up actions thereon. The Audit
 Committee also meets the Company''s Statutory Auditors to ascertain
 their views on financial statements, including the financial reporting
 system, compliance to accounting policies and procedures, the adequacy
 and effectiveness of internal control system.
 
 The Internal Audit department also assesses opportunities for
 improvement in the business processes, designed to add value to the
 organization and follows up on the implementation of corrective actions
 and improvements in the business processes after review by the Audit
 Committee.
 
 15. MANAGING THE RISKS OF FRAUD, CORRUPTION AND UNETHICAL BUSINESS
 PRACTICES
 
 I.  VIGIL MECHANISM/ WHISTLE BLOWER POLICY
 
 Fraud and corruption-free work culture has been the core of the
 Company. In view of the potential risk of fraud, corruption and
 unethical behaviour consequent to rapid growth and geographical spread
 of operations, which could adversely impact the Company''s business
 operations, performance and reputation, the Company has put an even
 greater emphasis to address these risks. To meet this objective, a
 comprehensive Ethical View Reporting Policy akin to vigil mechanism or
 the whistleblower policy has been laid down. More details about this
 Policy are given in the Corporate Governance Report, which forms part
 of this Annual Report. The Ethical View Reporting Policy is available
 on the Company website: www.ambujacement.com
 
 II.  ANTI BRIBERY AND CORRUPTION DIRECTIVES (ABCD)
 
 In furtherance to the Company''s philosophy of conducting business in an
 honest, transparent and ethical manner, the Board has laid down ABCD as
 part of the Company''s Code of Business Conduct and Ethics. As a
 Company, we take a zero- tolerance approach to bribery and corruption
 and are committed to act professionally and fairly in all our business
 dealings.
 
 To spread awareness about the Company''s commitment to conduct business
 professionally, fairly and free from bribery and corruption, employee
 training and awareness workshops were conducted across the organization
 during 2015. As part of continuous education on ABCD to the employees,
 a mandatory on-line training through a web-based application tool was
 also undertaken by approximately 4,000 employees.
 
 The above policies and its implementation are closely monitored by the
 Audit and Compliance Committees of Directors and periodically reviewed
 by the Board.
 
 16. DIRECTORS AND KEY MANAGERIAL PERSONNEL
 
 I.  DEMISE OF CHAIRMAN EMERITUS
 
 Mr. Suresh Neotia, one of the founder promoters of the Company left for
 heavenly abode on 7th May, 2015. As Chairman of the Company (1988 -
 2009) and thereafter as Chairman Emeritus, Mr. Neotia played a pivotal
 role in the setting-up of Ambuja and raising it to be among the most
 successful cement companies of India.  His contribution in the growth
 and development of the Company will always be remembered.  The Board
 placed on record their rich tributes for the unparalleled and precious
 contribution made by Mr. Neotia to the Company in particular and
 society at large.
 
 II.  CESSATION
 
 Mr. Bernard Fontana (DIN 00009181), Director (representing erstwhile
 Holcim Ltd.) resigned from the Board w.e.f. 17.07.2015 upon his
 stepping down as the CEO of Holcim Ltd.
 
 Mr. Bernard Terver (DIN 06771125), Vice Chairman (representing
 LafargeHolcim Ltd.) resigned from the Board w.e.f. 11.02.2016 in view
 of his proposed retirement from Lafarge Holmic Ltd., the ultimate
 Holding company.
 
 The Board placed on record its appreciation for the valuable services
 rendered by Mr. Fontana and Mr. Terver.
 
 III.  RETIREMENT BY ROTATION
 
 In accordance with the provisions of Section 152 and Article 147 of the
 Articles of Association of the Company, Ms. Usha Sangwan (DIN 02609263)
 will retire by rotation at the ensuing Annual General Meeting of the
 Company and being eligible, has offered herself for re-appointment.
 The Board recommends her re-appointment.
 
 IV.  APPOINTMENT
 
 Mr. Eric Olsen (DIN 07238383)
 
 Mr. Eric Olsen has been appointed as an Additional Director (Non
 Independent) under Section 161 of the Companies Act, 2013 w.e.f.  27th
 July, 2015. Consequent to the stepping down of Mr. Bernard Tever, Mr.
 Olsen has been appointed as the Vice Chairman of the Board w.e.f. 11th
 February, 2016.
 
 Mr. Olsen, aged 51 is the CEO of Lafarge Holmic Ltd. He is a business
 graduate from the University of Colorado, Certified Public Accountant
 (Chicago, USA) and holds a Master of Business Administration from HEC
 International Business School in Paris. He possesses more than 25 years
 of experience in the fields of Finance, M&A, Business Development and
 Human Resource.
 
 Mr. Christof Hassig (DIN 01680305)
 
 Mr Christof Hassig has been appointed as an Additional Director (Non
 Independent) under Section 161 of the Companies Act, 2013 w.e.f.  9th
 December, 2015.
 
 Mr. Hassig, aged 56 is currently the Head of\ Corporate Strategy and
 Mergers & Acquisitions at LafargeHolcim Ltd. He is a professional
 banker and did his Masters in Banking and Advanced Management Program
 at Harvard Business School.  He possesses more than 30 years of
 experience in the fields of Banking, Finance and M&A.
 
 Mr. Martin Kriegner (DIN 00077715)
 
 Mr. Martin Kriegner has been appointed as an Additional Director (Non
 Independent) under Section 161 of the Companies Act, 2013 w.e.f.  11th
 February, 2016.
 
 Mr. Kriegner, aged 54 who is currently the Area Manager of Central
 Europe region of LafargeHolcim has been now appointed as the Head of
 India. He is a Doctorate of Law and MBA from Austrian Universities. He
 joined the erstwhile Lafarge group in 1990. Prior to his current role,
 he was the CEO of Lafarge India Pvt. Ltd. from 2012 to 2015.
 
 As Additional Directors, Mr. Olsen, Mr. Hassig and Mr. Kriegner shall
 hold office up to the date of the ensuing Annual General Meeting. The
 Company has received a Notice as per the provisions of Section 160 (1)
 of the Companies Act, 2013 from the Members along with the requisite
 deposit for proposing their appointment as Directors.  The Board of
 Directors recommends their appointment.
 
 Further details about the directors are given in the Corporate
 Governance Report as well as in the Notice of the ensuing Annual
 General Meeting being sent to the shareholders along with the Annual
 Report.
 
 V.  ATTRIBUTES, QUALIFICATIONS & INDEPENDENCE OF DIRECTORS AND THEIR
 APPOINTMENT
 
 The Nomination & Remuneration Committee of Directors have approved a
 Policy for Selection, Appointment and Remuneration of Directors which
 inter-alia requires that the Directors shall be of high integrity with
 relevant expertise and experience so as to have diverse Board.
 
 The Policy also lays down the positive attributes/ criteria while
 recommending the candidature for the appointment as Director.
 
 Our Leadership Blueprint
 
 The Board Diversity Policy of the Company requires the Board to
 comprise of set of accomplished individuals, ideally representing a
 wide cross-section of industries, professions, backgrounds, occupations
 and functions and possessing a blend of skills, domain and functional
 knowledge, experience, educational qualifications, both individually
 and collectively.
 
 Directors are appointed/re-appointed with the approval of the Members
 for a term in accordance with the provisions of the law and the
 Articles of Association. The initial appointment of Managing Director &
 CEO is generally for a period of five years. All Directors other than
 Independent Directors are liable to retire by rotation unless otherwise
 specifically provided under the Articles of Association or under any
 statute. One-third of the Directors who are liable to retire by
 rotation, retire at every Annual General Meeting and are eligible for
 re-appointment.
 
 The relevant abstract of the Policy for Selection, Appointment &
 Remuneration of Directors is given in Annexure III.
 
 VI.  INDEPENDENT DIRECTORS DECLARATION
 
 The Independent Directors have submitted the Declaration of
 Independence, as required pursuant to Section 149 of the Companies Act,
 2013 and provisions of the Listing Regulations, stating that they meet
 the criteria of independence as provided therein. The profile of the
 Independent Directors forms part of the Corporate Governance Report.
 
 VII.  EVALUATION OF THE BOARD''S PERFORMANCE
 
 In compliance with the Companies Act, 2013, and Regulation 17 of the
 Listing Regulations, the performance evaluation of the Board and its
 Committees were carried out during the year under review. More details
 on the same are given in the Corporate Governance Report.
 
 VIII.  REMUNERATION POLICY
 
 The Company follows a Policy on Remuneration of Directors and Senior
 Management Employees.  The policy is approved by the Nomination &
 Remuneration Committee and the Board. The main objective of the said
 policy is to ensure that the level and composition of remuneration is
 reasonable and sufficient to attract, retain and motivate the
 Directors, KMP and senior management employees. The remuneration
 involves a balance between fixed and incentive pay reflecting short and
 long-term performance objectives appropriate to the working of the
 Company and its goals. The Remuneration Policy for the Directors and
 senior management employees is given in the Corporate Governance
 Report.
 
 IX.  FAMILIARISATION PROGRAMME FOR INDEPENDENT DIRECTORS
 
 The familiarization programmed aims to provide Independent Directors
 with the cement industry scenario, the socio-economic environment in
 which the Company operates, the business model, the operational and
 financial performance of the Company, significant developments so as to
 enable them to take well informed decisions in a timely manner. The
 familiarization programmed also seeks to update the Directors on the
 roles, responsibilities, rights and duties under the Act and other
 statutes.
 
 The policy on Company''s familiarization programmed for Independent
 Directors is posted on the Company''s website at:
 
 www.ambujacement.com
 
 X.  KEY MANAGERIAL PERSONNEL
 
 During the year under review, Mr. Sanjeev Churiwala resigned from the
 post of the CFO of the Company w.e.f. 15.11.2015. The Board placed on
 record its appreciation for the valuable services rendered by Mr.
 Churiwala.
 
 The Board of Directors, based on the recommendation of the Nomination &
 Remuneration Committee and the Audit Committee, appointed Mr. Suresh
 Joshi as the new CFO of the Company w.e.f. 1st February, 2016. Mr.
 Joshi, aged 54, is a Commerce Graduate and a qualified Chartered
 Accountant and has more than 30 years of experience (including 19 years
 with Ambuja) in the areas of finance & controlling, taxation,
 commercial & business strategy and M&A. He also possesses global
 exposure to LafargeHolcim group''s finance and controlling function for
 around four years.
 
 17. DIRECTORS'' RESPONSIBILITY
 
 Pursuant to Section 134(5) of the Companies Act, 2013, the Board of
 Directors to the best of their knowledge and ability confirm that:
 
 i) In the preparation of the annual accounts, the applicable accounting
 standards have been followed along with proper explanations relating to
 material departures;
 
 ii) the Directors have selected such accounting policies and applied
 them consistently, except for the change in accounting policies stated
 in notes to the accounts and judgments and estimates that are
 reasonable and prudent, so as to give a true and fair view of the state
 of affairs of the Company as on 31st December, 2015, and of the
 statement of profit and loss and cash flow of the Company for the
 period ended 31st December, 2015;
 
 iii) proper and sufficient care has been taken for the maintenance of
 adequate accounting records in accordance with the provisions of the
 Companies Act, 2013, for safeguarding the assets of the Company and for
 preventing and detecting fraud and other irregularities;
 
 iv) the annual accounts have been prepared on an ongoing concern basis;
 
 v) proper internal financial controls to be followed by the Company has
 been laid down and that such internal financial controls are adequate
 and were operating effectively and;
 
 vi) proper systems to ensure compliance with the provisions of all
 applicable laws has been devised and that such systems were adequate
 and operating effectively.
 
 18. AUDITORS
 
 I. AUDITORS AND THEIR REPORT
 
 M/s. SRBC & Co. LLP (ICAI Firm Registration No.324982E), the Statutory
 Auditors of the Company, will hold office until the conclusion of the
 ensuing Annual General Meeting and are eligible for re-appointment as
 per Section 139 of the Companies Act, 2013.
 
 M/s. SRBC & Co. LLP have expressed their willingness to get
 re-appointed as the Statutory Auditors of the Company and has furnished
 a certificate of their eligibility and consent under Section 141 of the
 Companies Act, 2013, and the rules framed there under. In terms of the
 Listing Agreement/Regulations, the Auditors have confirmed vide their
 letter dated 11th January, 2016 that they hold a valid certificate
 issued by the Peer Review Board of the ICAI.  The Board, based on the
 recommendation of the Audit Committee, recommends the appointment of
 M/s. SRBC & Co. LLP as the Statutory Auditors of the Company.
 
 The members are requested to appoint M/s. SRBC & Co.  LLP, Chartered
 Accountants as Auditors from the conclusion of the ensuing Annual
 General Meeting till the conclusion of the next Annual General Meeting
 in 2017 and to authorise the Board to fix their remuneration for the
 year 2016.
 
 The Auditors'' Report to the Shareholders for the year under review does
 not contain any qualification.
 
 II. COST AUDITOR AND COST AUDIT REPORT
 
 Pursuant to section 148 of the Companies Act 2013, the Board of
 Directors on the recommendation of the Audit Committee appointed M/s.
 P.M. Nanabhoy & Co. Cost Accountants, as the Cost Auditors of the
 Company for the Financial Year 2016 and has recommended their
 remuneration to the Shareholders for their ratification at the ensuing
 Annual General Meeting.
 
 The Audit Committee has also received a certificate from the Cost
 Auditor certifying their independence and arm''s length relationship
 with the Company.  Pursuant to the Companies (Cost Audit Report) Rules,
 2011, the Cost Audit Report for the financial year 2014, was filed with
 the Ministry of Corporate Affairs on 12.05.2015 vide SRN No. S37794351.
 
 III. SECRETARIAL AUDITOR AND SECRETARIAL AUDIT REPORT
 
 The Board had appointed M/s. Rathi & Associates, Company Secretaries in
 Whole-time Practice, to carry out Secretarial Audit under the
 provisions of Section 204 of the Companies Act, 2013 for the financial
 year 2015. The report of the Secretarial Auditor is annexed to this report
 as Annexure IV. The report does not contain any qualification.
 
 19.  SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE COURTS OR REGULATORS
 
 Except as stated elsewhere about passing of Order by the Competition
 Appellate Tribunal, there have been no significant and material orders
 passed by the courts or regulators or tribunals impacting the going
 concern status and Company''s operations. However, members'' attention is
 drawn to the statement on contingent liabilities and commitments in the
 notes forming part of the Financial Statements.
 
 18.  PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS
 
 Particulars of loans, guarantees given and investments made during the
 year as required under Section 186 of the Companies Act, 2013 and
 Schedule V of the Securities and Exchange Board of India (Listing
 Obligation and Disclosure Requirement) Regulations, 2015 are provided
 in Notes 11, 28 (I)(vi) and 47 of the Standalone Financial Statements.
 
 19.  TRANSFER OF UNCLAIMED DIVIDEND AND UNCLAIMED SHARES
 
 UNCLAIMED DIVIDEND
 
 The Company has transferred a sum of - 132 lakh during the financial
 year 2015 to the Investor Education and Protection Fund established by
 the Central Government, in compliance with Section 205C of the
 Companies Act, 1956. The said amount represents unclaimed dividends
 which were lying with the Company for a period of seven years from
 their respective due dates of payment. Prior to transferring the
 aforesaid sum, the Company has sent reminders to the shareholders for
 submitting their claims for unclaimed dividend.
 
 UNCLAIMED SHARES
 
 During the year the Company transferred 24,96,378 undelivered unclaimed
 equity shares of - 2 each belonging to 17,365 shareholders to the
 Unclaimed Suspense Account out of the two issues made by the Company
 viz - shares issued to the shareholders of Ambuja Cement Rajasthan Ltd.
 on merger and simultaneous issue of Bonus shares and subdivision of the
 face value of shares from - 10 to - 2. These shares were transferred to
 the Unclaimed Suspense Account on 14th December, 2015 after sending
 three reminders in compliance with Clause 5A of the Listing Agreement &
 Regulation 39(4) of the Listing Regulations, 2015.
 
 Company is holding these shares in a Demat – ''Unclaimed Suspense
 Account'' with HDFC Bank on behalf of the allottees of these shares. The
 voting rights in respect of these shares would remain frozen till the
 rightful owner claims it as per the procedure laid down under the
 Listing Regulations.
 
 20.  ENERGY, TECHNOLOGY AND FOREIGN EXCHANGE
 
 Information on conservation of energy, technology absorption, foreign
 exchange earnings and out go, is required to be given pursuant to
 provision of Section 134 of the Companies Act, 2013, read with the
 Companies (Accounts) Rules, 2014 is annexed hereto marked Annexure V
 and forms part of this report.
 
 21.  PARTICULARS OF EMPLOYEES
 
 The disclosure pertaining to remuneration and other details as required
 under Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of
 the Companies (Appointment and Remuneration of Managerial Personnel)
 Rules, 2014 are annexed to this report at Annexure VI.
 
 Further, a statement showing the names and other particulars of
 employees drawing remuneration in excess of the limits as set out in
 the Rules 5(2) and 5(3) of the aforesaid Rules, forms part of this
 report.  However, in terms of first proviso to Section 136(1) of the
 Act, the Annual Report and Accounts are being sent to the members and
 others entitled thereto, excluding the aforesaid information. The said
 information is available for inspection by the members at the
 Registered Office of the Company during business hours on working days
 up to the date of the ensuing Annual General Meeting. If any member is
 interested in obtaining a copy thereof, such member may write to the
 Company Secretary, whereupon a copy would be sent. Further, the details
 are also available on the Company''s website: www.ambujacement.com
 
 22.  SUBSIDIARIES AND JOINT VENTURES
 
 At present, the Company does not have any material subsidiary. During
 the year, one subsidiary company, viz. Kakinada Cements Ltd., which was
 not engaged into any business activities, has applied to the Registrar
 of Companies, Gujarat, under the Easy Exit Scheme of erstwhile
 Companies Act 1956, for striking off its name. During the year, One
 India BSC Pvt. Ltd.  became the joint venture Company. The Policy for
 determining Material Subsidiaries, adopted by the Board, pursuant to
 Regulation 16 of the Listing Regulations can be accessed on the
 Company''s website at www.ambujacement.com
 
 23.  CONSOLIDATED FINANCIAL STATEMENTS
 
 As stipulated by Regulation 33 of the Listing Regulations, the
 consolidated financial statements have been prepared by the Company in
 accordance with the applicable Accounting Standards. The audited
 consolidated financial statements together with Auditors'' Report form
 part of the Annual Report.
 
 Pursuant to Section 129(3) of the Companies Act, 2013, a statement
 containing the salient features of the financial statements of each of
 the subsidiary and joint venture in the prescribed Form AOC-1 is
 annexed to this report at Annexure VII.
 
 Pursuant to Section 136 of the Companies Act, 2013, the financial
 statements of the subsidiary and joint venture companies are kept for
 inspection by the shareholders at the Registered Office of the Company.
 The Company shall provide free of cost, the copy of the financial
 statements of its subsidiary and joint venture companies to the
 shareholders upon their request. The statements are also available on
 the website of the Company www.ambujacement.com under the Investor
 Relations section.
 
 The consolidated net profit of the Company and its subsidiaries
 amounted to - 807.88 crores for the corporate financial year ended on
 31st December, 2015 as compared to - 1,486.50 crores for the previous
 year.
 
 24.  EQUAL OPPORTUNITY EMPLOYER
 
 The Company has always provided a congenial atmosphere for work to all
 employees that is free from discrimination and harassment including
 sexual harassment. It has provided equal opportunities of employment to
 all without regard to their caste, religion, color, marital status and
 sex.
 
 25.  AWARDS AND ACCOLADES
 
 CORPORATE AWARDS
 
 - Ambuja Cement was awarded the ''Best Sustainability Risk Management
 Company'' of the year be CNBC TV18. The India Risk Management Awards
 recognizes those organizations and teams that have significantly added
 to the understanding and practice of risk management in the country.
 
 - Ambuja Cements bagged ''Eco Corporate of the Year 2014'' by Yes Bank''s
 Natural Capital Awards: Yes Bank honored corporate and photographers
 who have exemplified ''action for the environment'' in their own
 capacities.
 
 - CM Sustainability Award 2015 for ''Corporate Excellence-Commendation''
 for Significant Achievement in category ''A''. Ambuja has bagged this
 award for the 5th consecutive year.
 
 REGIONAL AWARDS
 
 - Maratha Cement Works (MCW) and Rabriyawas jointly bagged the 2nd
 prize for Excellence in Water Management & Conservation at the 3rd
 edition of FICCI Water Awards held in the national capital. This award
 is yet another recognition of ACL''s commitment towards water
 conservation efforts in keeping with its vision to achieve
 sustainability.
 
 - Ambujanagar won the Best Environment Excellence Award for 2013-14 and
 2014-15 at the 14th International Council for Cement & Building
 Material International Seminar at New Delhi.
 
 - Maratha Cement Works (MCW) bagged the Electrical Safety Best
 Performer Certification
 
 organized by Industry, Energy and Labor department of Government of
 Maharashtra. The MCW unit was identified for incorporating best
 practices in Electrical Safety that has led to Zero Harm
 
 - Rabriyawas recognized and rewarded by Rajasthan Renewable Energy
 Corporation Limited (an undertaking of Rajasthan Govt.) for Remarkable
 Performance in Energy Conservation in the Cement Sector.
 
 - Ropar been declared winner of the ''Genentech Environment Award -
 2015'' in the Silver Category in Cement Sector for outstanding
 achievement in Environment Management.
 
 - Ambuja Cement Foundation (Ropar) was awarded the Best HIV Project for
 Intravenous Drug Users by the State Institute of Health and Family
 Welfare, Punjab.
 
 - Ambuja Cement Foundation – Darlaghat bags NABARD''s ''Best Partnership
 Award'' for its Watershed Development Projects in Himachal Pradesh.
 
 - Bhatapara was conferred ''Domain Excellence in Corporate Social
 Responsibility'' and ''Commendation for Significant Achievement in
 Environment Management'' at the CII Sustainability Award 2015.
 
 26.  CAUTIONARY STATEMENT
 
 Statements in the Directors'' Report and the Management Discussion and
 Analysis describing the Company''s objectives, expectations or
 predictions, may be forward looking within the meaning of applicable
 securities laws and regulations. Actual results may differ materially
 from those expressed in the statement. Important factors that could
 influence the Company''s operations include: global and domestic demand
 and supply conditions affecting selling prices, new capacity additions,
 availability of critical materials and their cost, changes in
 government policies and tax laws, economic development of the country,
 and other factors which are material to the business operations of the
 Company.
 
 27.  ACKNOWLEDGEMENTS
 
 The Directors take this opportunity to express their deep sense of
 gratitude to the banks, Central and State governments and their
 departments and the local authorities for their continued guidance and
 support.
 
 We would also like to place on record our sincere appreciation for the
 commitment, dedication and hard work put in by every member of the
 Ambuja family.
 
 To them goes the credit for all of the Company''s achievements. And to
 you, our Shareholders, we are deeply grateful for the confidence and
 faith that you have always reposed in us.
 
 For and on behalf of the board of 
 
 Ambuja Cements Limited
 
 
 N. S. Sekhsaria 
 
 Chairman
 
 
 Mumbai, 25th February, 2016
Source : Dion Global Solutions Limited
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