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UltraTech Cement

BSE: 532538|NSE: ULTRACEMCO|ISIN: INE481G01011|SECTOR: Cement - Major
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Directors Report Year End : Mar '16    « Mar 15
Dear Shareholder,
 
 The Directors present the Sixteenth Annual Report together with the
 Audited Accounts of your Company for the year ended 31st March, 2016.
 
 FINANCIAL RESULTS                        (Rs,in crores)
 
                                       2015-16    2014-15
 
 Net Turnover                           23,841     22,648
 
 Profit before Interest, 
 Depreciation and Tax (PBIDT)            4,851      4,567
 
 Less: Depreciation                      1,289      1,133
 
 Profit before Interest 
 and Tax (PBIT)                          3,562      3,434
 
 Interest 505 547
 
 Profit before Tax Expenses              3,057      2,887
 
 Tax Expenses                              882        872
 
 Profit after Tax                        2,175      2,015 
 
 Less: Appropriation:
 
 Adjustment related to 
 Fixed Assets                              -          76
 
 Transfer to General Reserve             1,500      1,250
 
 Transfer to Debenture 
 Redemption Reserve                         44        216
 
 Proposed Dividend on 
 Equity Shares                             261        247
 
 Tax on Dividend                            49         50
 
 Net Balance for the year                  321        175
 
 OVERVIEW AND THE STATE OF THE COMPANY''S AFFAIRS
 
 During the year under review, cement demand remained subdued on account
 of weak demand from the housing segment. However, in the last quarter
 of the financial year, some signs of recovery emerged. Demand
 registered double- digit growth due to higher infrastructure spending
 on roads, ports and metro rail projects. The cement industry is
 expected to perform well in the foreseeable future following economic
 growth and increased government focus on infrastructure and housing on
 the back of initiatives such as Housing for all by 2020, Make in India,
 Smart Cities, as well as declining interest rates.
 
 Your Company produced 47.56 MMT of cement against 43.88 MMT in the
 previous year. The effective capacity utilisation was 76% as against
 75% in the previous year. Aggregate sales volume increased 7% from
 44.85 MMT to 47.97 MMT, while white cement and related product volumes
 were 13.12 LMT (12.24 LMT). Your Company''s net turnover was Rs.23,841
 crores vis-ΰ-vis Rs.22,648 crores in the previous year. Profit before
 interest, depreciation and tax was at Rs.4,851 crores against Rs.4,567
 crores in the previous year.
 
 DIVIDEND
 
 Your Directors have recommended a dividend of Rs.9.50 per equity share
 (Rs.9 per equity share in the previous year) of Rs.10 each for the year
 ended 31st March, 2016. The dividend distribution would result in a
 cash outgo of Rs.314 crores (including tax on dividend of Rs.53 crores)
 compared to Rs.297 crores (including tax on dividend of Rs.50 crores)
 paid for 2014-15.
 
 CAPITAL EXPENDITURE
 
 Your Company strengthened its capacity expansion plans in response to
 growing demand for building material. During the year, your Company
 commissioned the following assets and capacities:
 
 - 26 MW Waste Heat Recovery Systems at different locations;
 
 - 4.5 MTPA cement grinding capacity; this includes greenfield cement
 grinding capacity at Jhajjar in Haryana and Dankuni in West Bengal and
 a 1.6 MTPA cement grinding unit at Pataliputra in Bihar in April, 2016;
 
 - 2.0 MTPA cement packaging terminal at Pune in Maharashtra.
 
 These projects were funded through a judicious mix of internal accruals
 and borrowings. The capital expenditure plan is about Rs.1,500 crores
 for FY17, for projects and regulatory requirements, plant
 infrastructure and routine maintenance.
 
 CORPORATE DEVELOPMENT
 
 - Competition Commission of India
 
 The Competition Appellate Tribunal (COMPAT) by its order dated 11th
 December, 2015 set aside the Competition Commission of India (CCI)
 order dated 20th June, 2012 and remitted the matter to CCI for fresh
 adjudication of the issues and passing of fresh order. Further, COMPAT
 allowed withdrawal of the amount deposited by your Company in
 compliance with the COMPAT interim order, which was subsequently
 refunded.
 
 - Acquisition of cement units of Jaiprakash Associates Limited in
 Madhya Pradesh
 
 The Board of Directors of your Company had approved acquisition of the
 cement units of Jaiprakash Associates Limited (JAL) in Bela and Sidhi
 in Madhya Pradesh, having an aggregate capacity of 4.9 MTPA. The
 effectiveness of the Scheme was inter-alia subject to the sanction of
 the Hon''ble Bombay High Court (High Court). Accordingly, a petition
 seeking sanction of the Scheme was filed by your Company in the High
 Court. During the course of the hearing, the High Court indicated that
 based on existing provisions of the Mines and Minerals (Development and
 Regulation) Amendment Act, 2015 (MMDR Act, 2015), only mining leases
 granted under an auction could be transferred. Since the mining leases,
 which form a part of the business to be acquired by your Company from
 JAL, were allotted to JAL and not granted under an auction, the same
 could not, in terms of the MMDR Act, 2015, be transferred to your
 Company. Under the circumstances, your Company applied for the
 withdrawal of the Scheme filed before the High Court, which was
 permitted.
 
 The Central Government has since amended the MMDR Act, 2015, which now
 provides an exception by permitting the transfer of mining leases used
 for captive purposes, which were granted otherwise than through an
 auction.
 
 In a separate development, the Board of Directors of your Company at
 its meeting on 31st March, 2016 approved the signing of definitive
 agreements for the acquisition of identified cement plants of JAL in
 Madhya Pradesh, Uttar Pradesh, Himachal Pradesh, Uttarakhand and Andhra
 Pradesh, representing an aggregate capacity of 21.20 MTPA at an
 Enterprise Value of Rs.15,900 crores. The transaction will be
 consummated by way of a court-sanctioned scheme to be formulated at a
 later date. The acquisition is expected to take around 12-14 months to
 fructify as it is subject to applicable statutory/regulatory approvals.
 
 CORPORATE GOVERNANCE
 
 Your Directors reaffirm their commitment to good corporate governance
 practices. During the year under review, your Company was in compliance
 with the provisions relating to corporate governance as provided under
 the Securities and Exchange Board of India (Listing Obligations and
 Disclosure Requirements) Regulations, 2015 (the Listing Regulations).
 The compliance report is provided in the Corporate Governance section
 of this Annual Report. The auditor''s certificate on compliance with the
 conditions of corporate governance of the Listing Regulations is given
 in Annexure I to this Report.
 
 EMPLOYEE STOCK OPTION SCHEMES
 
 ESOS – 2006
 
 During the year, 1,972 Stock Options were vested in eligible employees.
 The Nomination, Remuneration and Compensation Committee (the NRC)
 allotted 20,653 equity shares of Rs.10 each of your Company upon
 exercise of Stock Options by the employees.
 
 ESOS – 2013
 
 During the year, the NRC granted 24,329 Stock Options and 8,594
 Restricted Stock Units to eligible employees of your Company subject to
 the provisions of the Company''s Employee Stock Option Scheme (Scheme –
 2013). Additionally, 67,002 Stock Options were vested in eligible
 employees. No Restricted Stock Units have vested in the option grantees
 in terms of the provisions of the Scheme 2013. The NRC allotted 6,097
 equity shares of Rs.10 each of your Company upon exercise of Stock
 Options by the employees.
 
 In terms of the provisions of the SEBI (Share Based Employee Benefits)
 Regulations, 2014, the details of the Stock Options and Restricted
 Stock Units granted under the above mentioned Schemes are available on
 your Company''s website viz. www.ultratechcement.com.
 
 A certificate from the Statutory Auditor on the implementation of your
 Company''s Employee Stock Option Schemes will be placed at the ensuing
 Annual General Meeting for inspection by the Members.
 
 AWARDS
 
 Some of the prestigious awards conferred on your Company during the
 year included:
 
 - Golden Peacock HR Excellence Award – 2015 : Rajashree Cement Works,
 Karnataka (RC);
 
 - Greentech Environmental Award – 2015 : RC;
 
 - IMC Ramkrishna Bajaj National Quality Award for Performance
 Excellence : Rawan Cement Works, Chhattisgarh;
 
 - Greentech CSR Award 2015 – Gold Category : Hirmi Cement Works,
 Chhattisgarh;
 
 - India Sustainability Leadership Award in the category of community
 project of the year (Water) conferred by World CSR Day for integrated
 watershed management project : Vikram Cement Works, Madhya Pradesh.
 
 Your Company was awarded a ranking on the Indian Climate Disclosure
 Leadership Index (CDLI) of CDP for 2015. Your Company earned its
 distinction by disclosing high quality carbon emissions and energy data
 through CDP''s climate change program. CDP is a not-for-profit
 organisation that drives sustainable economies.
 
 RESEARCH AND DEVELOPMENT
 
 Your Company''s Research and Development (R&D) centre continues to
 expand and concentrate on the development of new products and processes
 to significantly moderate its environmental footprint. Your Company is
 devoted to sustainable development and explores new ways of environment
 preservation and the responsible use of non-renewable resources.
 Towards this end, your Company developed several products including
 Portland Limestone Cement, IRST, etc., to enhance raw material and fuel
 conservation, and reduce energy intensiveness and greenhouse gas
 emissions.
 
 Your Company continued to prioritise environment concerns and
 industrial by-product recycling (including fly ash, slag, etc.).  Your
 Company''s research activities provide customers with quality products
 required for improved construction practices and experiences. These
 include high-tech specialty concretes with wide-ranging attributes and
 properties, innovative building products and value-added services that
 relate to the use of concrete and construction materials. Your Company
 continues to develop new technologies and processes directed at
 enhancing productivity.
 
 Your Company is closely engaged with the Aditya Birla Science and
 Technology Company Private Limited (ABSTCPL), the corporate research
 and development centre for the Aditya Birla Group. It caters to the
 corporate research needs of the Group''s businesses through
 multi-disciplinary experts working on applied research projects. Your
 Company''s active collaboration with ABSTCPL is closely linked to its
 corporate objectives of mineral securitisation, process debottlenecking
 and predictive studies, based on natural and non-renewable resource
 preservation, energy conservation and improved product durability.
 
 HUMAN RESOURCES
 
 Your Company believes that its knowledge capital will drive growth and
 profitability. Your Company enjoys a strong brand image as a preferred
 and caring employer. The ongoing focus is on attracting, retaining and
 engaging talent with the objective of creating a robust talent pipeline
 at all levels. We also worked to strengthen the ''World of
 Opportunities'' employee positioning initiatives. Initiatives like a
 hiring freeze at some levels, robust talent reviews, career development
 conversations and best-in-class development opportunities will help
 enhance the employee experience at your Company.
 
 SAFETY
 
 The safety of employees, customers, vendors and those residing in
 proximity to your Company''s operations is a continuing priority at your
 Company. Your Company''s Safety Board is chaired by the Managing
 Director, supported by eight sub- committees, each of which is chaired
 by a Unit Head. Your Company conducted Visible Felt Leadership
 workshops and other initiatives through the year, covering line
 managers and workers. During the year, more than 200,000 safety
 observations were carried out, resulting in the identification and
 correction of unsafe acts or conditions. Structural stability was
 another focus area. All your Company''s plants are audited by third
 party experts and this is followed up with the identification of action
 areas for further correction.
 
 CORPORATE SOCIAL RESPONSIBILITY
 
 In terms of the provisions of Section 135 of the Companies Act, 2013
 (the Act) read with Companies (Corporate Social Responsibility
 Policy) Rules, 2014, the Board of Directors of your Company has
 constituted a Corporate Social Responsibility (CSR) Committee which
 is chaired by Mrs. Rajashree Birla.  The other Members of the Committee
 are Mr. G. M. Dave, Independent Director, Mr. O. P. Puranmalka,
 Non-Executive Director and Mr. K. K. Maheshwari, Managing Director.
 Dr. Pragnya Ram, Group Executive President, Corporate Communication &
 CSR is a permanent invitee to the Committee.  Your Company also has in
 place a CSR Policy which is available on your Company''s website viz.
 www.ultratechcement.com.
 
 Your Company''s CSR activities are focused on Social Empowerment &
 Welfare, Infrastructure Development, Sustainable Livelihood, Health
 Care and Education. Various activities were initiated during the year
 in villages neighboring plant locations, resulting in a spend of H
 50.89 crores (1.8% of the average net profits of the last three years
 for the purposes of CSR). Your Company also identified projects under
 the Swachha Bharat Abhiyaan, work on which was started and will be
 intensified in the current year.
 
 A report on CSR activities is attached as Annexure II forming a part of
 this report.
 
 SUBSIDIARY, JOINT VENTURE OR ASSOCIATE COMPANIES
 
 Your Company''s wholly-owned subsidiary Gotan Lime Stone Khanij Udyog
 Private Limited (GKUPL) received an order from the Mines Department,
 Government of Rajasthan, canceling the transfer of mining leases in
 Nagaur district of Rajasthan. The Rajasthan High Court set aside the
 order passed by the Mines Department and directed the handing over of
 the mining lease to GKUPL. Allowing an appeal filed by the Mines
 Department against the order of the Rajasthan High Court, the Supreme
 Court of India directed the State of Rajasthan to frame and notify its
 policy relating to the transfer of mining lease and pass an appropriate
 order with respect to the mining lease of GKUPL.  Until such a decision
 is taken, status quo is to be maintained in the matter. The supply of
 limestone from these mines was in addition to alternative supply
 sources. Your Company''s day-to- day operations are not impacted by
 these developments.
 
 The audited financial statements of your Company''s subsidiaries and
 joint venture viz. Dakshin Cements Limited, Harish Cement Limited,
 GKUPL, Bhagwati Lime Stone Company
 
 Private Limited, UltraTech Cement Middle East Investments Limited,
 UltraTech Cement Lanka (Pvt.) Limited, PT UltraTech Mining Indonesia
 and PT UltraTech Investments Indonesia as well as related information
 are available on the website of your Company viz.
 www.ultratechcement.com and also available for inspection during
 business hours at the Registered Office of your Company. Any Member
 interested in obtaining a copy of the audited financial statements of
 your Company''s subsidiaries may write to the Company Secretary at the
 Registered Office of your Company.
 
 In accordance with the provisions of Section 129(3) of the Act, read
 with the Companies (Accounts) Rules, 2014, a report on the performance
 and financial position of each of the subsidiaries, associates and
 joint ventures is attached as Annexure III to this Report.
 
 CONSOLIDATED FINANCIAL STATEMENTS The Consolidated Financial Statements
 have been prepared in accordance with the provisions of the Act, read
 with the Companies (Accounts) Rules, 2014, applicable Accounting
 Standards and the provisions of the Listing Regulations and forms part
 of the Annual Report.
 
 FINANCE
 
 Your Company has adequate liquidity and a strong balance sheet. CRISIL
 has re-affirmed our credit rating as CRISIL AAA for Long Term and
 CRISIL A1  for Short Term.
 
 Your Company has net repaid long term borrowings (primarily external
 commercial borrowings and term loans) amounting to Rs.194 crores during
 the year. It has also raised short term debt (net of repayments) of Rs.
 441 crores. These have been utilised for meeting working capital
 mismatches. During the year, your Company refinanced / repriced foreign
 currency borrowings of Rs.1,224 crores to take advantage of low interest
 rates. All outstanding foreign currency borrowings are fully hedged.
 
 During the financial year 2015-16, your Company has not accepted any
 fixed deposits from the public falling under Section 73 of the Act and
 the Companies (Acceptance of Deposits) Rules, 2014.
 
 PARTICULARS OF LOAN, GUARANTEE AND
 
 INVESTMENT
 
 Details of Loan, Guarantee and Investment covered under the provisions
 of Section 186 of the Act read with the Companies (Meetings of Board
 and its Powers) Rules, 2014 are given in Notes to the financial
 statements.
 
 ENERGY, TECHNOLOGY AND FOREIGN EXCHANGE
 
 Information on conservation of energy, technology absorption and
 foreign exchange earnings and outgo, required to be disclosed pursuant
 to Section 134(3)(m) of the Act read with the Companies (Accounts)
 Rules, 2014 is given in Annexure IV to this Report.
 
 PARTICULARS OF EMPLOYEES
 
 Disclosures pertaining to remuneration and other details as required
 under Section 197(12) read with the Companies (Appointment and
 Remuneration of Managerial Personnel) Rules, 2014 are attached as
 Annexure V. In accordance with the provisions of Section 197(12) of the
 Act read with the Companies (Appointment and Remuneration of Managerial
 Personnel) Rules, 2014, the names and other particulars of employees
 drawing remuneration in excess of the limits set out in the aforesaid
 Rules, forms part of this Report. However, in line with the provisions
 of Section 136(1) of the Act, the Report and Accounts as set out
 therein, are being sent to all Members of your Company excluding the
 aforesaid information about the employees. Any Member, who is
 interested in obtaining these particulars about employees, may write to
 the Company Secretary at the Registered Office of your Company.
 
 BUSINESS RESPONSIBILITY REPORT
 
 In terms of Regulation 34(2)(f) of the Listing Regulations, a Business
 Responsibility Report forms a part of the Annual Report.
 
 CONTRACT AND ARRANGEMENT WITH RELATED PARTIES
 
 During the financial year, your Company entered into related party
 transactions, which were on an arm''s length basis and in the ordinary
 course of business. There were no material transactions with any
 related party as defined under Section 188 of the Act read with the
 Companies (Meetings of Board and its Powers) Rules, 2014. All related
 party transactions were approved by the Audit Committee of your
 Company.
 
 The policy on Related Party Transactions as approved by the Audit
 Committee and the Board is available on your Company''s website viz.
 www.ultratechcement.com.
 
 The details of contracts and arrangement with related parties of your
 Company for the financial year ended 31st March, 2016 is given in Note
 41 to the financial statements of your Company.
 
 RISK MANAGEMENT
 
 Your Company constituted a Risk Management Committee mandated to review
 the risk management plan / process of your Company. The Risk Management
 Committee identified potential risks and assessed their potential
 impact with the objective of taking timely mitigation action. More
 details on risk management are covered in the Management Discussion and
 Analysis, forming a part of the Annual Report.
 
 INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY Your Company has in place
 adequate internal control systems commensurate with the size of its
 operations. Internal control systems comprising of policies and
 procedures are designed to ensure sound management of your Company''s
 operations, safekeeping of its assets, optimal utilisation of
 resources, reliability of its financial information and compliance.
 Clearly defined roles and responsibilities have been institutionalised.
 Systems and procedures are periodically reviewed to keep pace with the
 growing size and complexity of your Company''s operations.
 
 DIRECTOR''S RESPONSIBILITY STATEMENT 
 
 The audited accounts for the year under review are in conformity with
 the requirements of the Act and the Accounting Standards.  The
 financial statements reflect fairly the form and the substance of
 transactions carried out during the year under review and reasonably
 present your Company''s financial condition and results of operations.
 
 Your Directors confirm that:
 
 i. in the preparation of the Annual Accounts, applicable accounting
 standards have been followed along with proper explanations relating to
 material departures, if any;
 
 ii. the accounting policies selected have been applied consistently and
 judgments and estimates are made that are reasonable and prudent so as
 to give a true and fair view of the state of affairs of your Company as
 at 31st March, 2016 and of the profit of your Company for the year
 ended on that date;
 
 iii. proper and sufficient care has been taken for the maintenance of
 adequate accounting records in accordance with the provisions of the
 Act for safeguarding the assets of your Company and for preventing and
 detecting frauds and other irregularities;
 
 iv. the Annual Accounts of your Company have been prepared on a going
 concern basis;
 
 v. your Company has laid down internal financial controls and that such
 internal financial controls are adequate and were operating
 effectively;
 
 vi. your Company has devised proper systems to ensure compliance with
 the provisions of all applicable laws and that such systems were
 adequate and operating effectively.
 
 DIRECTORS
 
 Changes in the constitution of the Board - Mr. O. P. Puranmalka (DIN:
 00062212) retired as Managing Director of your Company from the close
 of business hours on 31st March, 2016. He will however continue as a
 Non-executive Director with effect from 1st April, 2016.
 
 Mr. K. K. Maheshwari (DIN: 00017572) was appointed as Managing Director
 of your Company for a period of four years with effect from 1st April,
 2016.
 
 Mrs. Alka Bharucha (DIN: 00114067) has been appointed Additional
 Director (Independent) for a period of five years with effect from 9th
 June, 2016.
 
 Mr. Atul Daga (DIN: 06416619) was appointed as Whole-time Director of
 your Company for a period of five years with effect from 9th June,
 2016. He is the Chief Financial Officer of your Company since 1st
 December, 2014 and is now designated Whole-time Director and Chief
 Financial Officer.
 
 Notices pursuant to Section 160 of the Act have been received from
 Members proposing Mr. Maheshwari, Mrs. Bharucha and Mr. Daga as
 Directors of your Company.
 
 Mr. Dilip Gaur (DIN: 02071393) resigned as Deputy Managing Director
 from the Board of your Company with effect from 31st March, 2016.
 
 These changes are based on the recommendation of the Nomination,
 Remuneration and Compensation Committee.  The Board places on record
 its deep appreciation for the services rendered by Mr. Puranmalka as
 Managing Director and Mr. Gaur as Deputy Managing Director of your
 Company.
 
 Mrs. Rajashree Birla (DIN: 00022995) retires from office by rotation
 and being eligible, offers herself for re-appointment.
 
 The Board recommends the appointment of Mr. Maheshwari, Mrs. Bharucha
 and Mr. Daga and the re-appointment of Mrs. Rajashree Birla. Items
 seeking your approval on the above are included in the Notice convening
 the Annual General Meeting (AGM).
 
 Brief resumes of the directors being appointed / re-appointed form part
 of the Notice of the ensuing AGM.
 
 During the financial year 2015-16, Mr. O. P. Puranmalka, Managing
 Director and Mr. Dilip Gaur, Deputy Managing Director have not received
 any commission / remuneration from your Company''s holding as well as
 subsidiary companies.
 
 Meetings of the Board -
 
 The Board of Directors of your Company met seven times during the year
 to deliberate on various matters. The meetings were held on 25th April,
 2015; 20th July, 2015; 19th October, 2015; 18th December, 2015; 20th
 January, 2016; 15th February, 2016 and 31st March, 2016. Further
 details on the Board of Directors are provided in the Corporate
 Governance Report forming part of this Annual Report.
 
 Independent Director''s Statement - Independent Directors on your
 Company''s Board have submitted declarations of independence to the
 effect that they meet the criteria of independence as provided in
 Section 149(6) of the Act and Regulation 16(1)(b) of the Listing
 Regulations.
 
 Formal Annual Evaluation -
 
 The evaluation framework for assessing the performance of Directors of
 your Company comprises of contributions at the meetings, strategic
 perspective or inputs regarding the growth and performance of your
 Company, among others.
 
 Pursuant to the provisions of the Act and the Listing Regulations, the
 Directors have carried out the annual performance evaluation of the
 Board, Independent Directors, Non-executive Directors, Executive
 Directors, Committees and the Chairman of the Board. The manner of
 evaluation is provided in the Corporate Governance Report.
 
 The details of programme for familiarisation of Independent Directors
 of your Company are available on your Company''s website viz.
 www.ultratechcement.com.
 
 Policy on Appointment and Remuneration of Directors and Key Managerial
 Personnel and Remuneration Policy -
 
 The NRC has formulated the remuneration policy of your Company which is
 attached as Annexure VI to this report.
 
 KEY MANAGERIAL PERSONNEL
 
 Mr. O. P. Puranmalka ceased to be Managing Director with effect from
 the close of business hours on 31st March, 2016.  Mr. K. K. Maheshwari
 was appointed as Additional Director and Managing Director of your
 Company with effect from 1st April 2016, subject to consent by the
 Members of your Company at the ensuing AGM.
 
 In terms of the provisions of Section 203 of the Act, Mr. K. K.
 Maheshwari, Managing Director (with effect from 1st April, 2016); Mr.
 Atul Daga, Whole-time Director and Chief Financial Officer and Mr. S.
 K. Chatterjee, Company Secretary, are the Key Managerial Personnel of
 your Company.
 
 AUDIT COMMITTEE
 
 The Audit Committee comprises of Mr. R. C. Bhargava, Mr. G. M. Dave and
 Mrs. Renuka Ramnath, all independent directors. Mr. D. D. Rathi,
 director of your Company and Mr. Atul Daga, Whole-time Director and
 Chief Financial Officer are permanent invitees. Further, details
 relating to the Audit Committee are provided in the Corporate
 Governance Report forming part of this Annual Report.
 
 VIGIL MECHANISM
 
 Your Company has in place a vigil mechanism for Directors and employees
 to report instances and concerns about unethical behaviour, actual or
 suspected fraud or violation of your Company''s Code of Conduct.
 Adequate safeguards are provided against victimisation to those who
 avail of the mechanism and direct access to the Chairman of the Audit
 Committee is provided in exceptional cases.
 
 The vigil mechanism is available on your Company''s website viz.
 www.ultratechcement.com.
 
 AUDITORS
 
 Statutory Auditors
 
 In terms of the provisions of Section 139 of the Act read with the
 Companies (Audit and Auditors) Rules, 2014, an audit firm can hold
 office as statutory auditor for two terms of five consecutive years
 i.e. for a maximum period of ten years. They can be re-appointed after
 a cooling period of five years. In computing the period of ten years,
 the period for which the auditor held office before the commencement of
 the Act i.e.  before 1st April, 2014 is also to be taken into account.
 
 At the 15th AGM of your Company, the Members approved the appointment
 of BSR & Co. LLP, Chartered Accountants, Mumbai as one of the joint
 statutory auditors of your Company in place of Deloitte Haskins & Sells
 LLP, to hold office from the conclusion of the 15th AGM until the
 conclusion of the 20th AGM of your Company, subject to ratification by
 the Members at every AGM till the 19th AGM.
 
 M/s. G. P. Kapadia & Co., Chartered Accountants, Mumbai was appointed
 as one of the joint statutory auditors of your Company in October, 2004
 and re-appointed at every AGM thereafter. M/s. G. P. Kapadia & Co. has
 been in office for more than ten years and in compliance with the
 provisions of the Act, your Company will have to appoint a new auditor
 in their place by 31st March, 2017. The Board of Directors has, at its
 meeting held on 25th April, 2016, recommended the appointment of M/s.
 Khimji Kunverji & Co., Chartered Accountants, Mumbai, as one of the
 joint statutory auditor of your Company in place of M/s. G. P. Kapadia
 & Co., to hold office from the conclusion of this AGM until the
 conclusion of the 21st AGM of your Company, subject to ratification by
 the Members at every AGM till the 20th AGM.
 
 Resolutions seeking your approval on these items are included in the
 Notice convening the AGM.
 
 The observation made in the Auditor''s Report are self- explanatory and
 therefore, do not call for any further comments under Section 134(3)(f)
 of the Act.
 
 Cost Auditors
 
 In terms of the provisions of Section 148 of the Act read with the
 Companies (Cost Records and Audit) Amendment Rules, 2014, the Board of
 Directors of your Company have on the recommendation of the Audit
 Committee, appointed M/s. N.I. Mehta & Co., Cost Accountants, Mumbai
 and M/s. N. D. Birla & Co., Cost Accountants, Ahmedabad, as Cost
 Auditors, to conduct the cost audit of your Company for the financial
 year ending 31st March, 2017, at a remuneration as mentioned in the
 Notice convening the AGM.
 
 As required under the Act, the remuneration payable to the cost auditor
 is required to be placed before the Members in a general meeting for
 their ratification. Accordingly, a resolution seeking Member''s
 ratification for the remuneration payable to Cost Auditors forms a part
 of the Notice of the AGM.
 
 Secretarial Auditors
 
 In terms of the provisions of Section 204 of the Act read with the
 Companies (Appointment and Remuneration of Managerial Personnel) Rules,
 2014, the Board had appointed M/s. BNP & Associates, Company
 Secretaries, Mumbai as Secretarial Auditor for conducting Secretarial
 Audit of your Company for the financial year ended 31st March, 2016.
 The report of the Secretarial Auditors is attached as Annexure VII.
 
 The Secretarial Audit Report does not contain any qualification,
 reservation or adverse remark.
 
 EXTRACT OF ANNUAL RETURN
 
 In terms of the provisions of Section 92(3) of the Act read with the
 Companies (Management and Administration) Rules, 2014, an extract of
 the Annual Return of your Company for the financial year ended 31st
 March, 2016 is given in Annexure VIII to this report.
 
 OTHER DISCLOSURES
 
 – There were no material changes and commitments affecting the
 financial position of your Company between end of the financial year
 and the date of this report.
 
 – Your Company has not issued any shares with differential voting.
 
 – There was no revision in the financial statements.
 
 – Your Company did not issue any sweat equity shares.
 
 – During the year, your Company did not receive any complaints under
 the Sexual Harassment of Women at Workplace (Prevention, Prohibition
 and Redressal) Act, 2013.
 
 ACKNOWLEDGEMENT
 
 Your Directors express their deep sense of gratitude to the banks,
 financial institutions, stakeholders, business associates, Central and
 State Governments for their co-operation and support and look forward
 to their continued support in future.
 
 We thank our employees for their contribution to your Company''s
 performance. We applaud them for their superior competence, dedication
 and commitment.
 
                                         For and on behalf of the Board
 
                                                   Kumar Mangalam Birla
 
                                                               Chairman
 
 Mumbai, 9th June, 2016                                 (DIN: 00012813)
Source : Dion Global Solutions Limited
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