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EQUITY - MARKET SCREENER

Andhra Cements Ltd
Industry :  Cement - South India
BSE Code
ISIN Demat
Book Value()
532141
INE666E01020
36.5394728
NSE Symbol
P/E(TTM)
Mar.Cap( Cr.)
ACL
9.34
828.63
EPS(TTM)
Face Value()
Div & Yield %
9.63
10
0
 

As on: Apr 14, 2024 04:18 PM

The Members

The Directors of your Company are pleased to present the Eighty Fourth (84th)Annual Report together with the Audited Financial Statements of the Company for the Financial Year ended 31st March, 2023.

FINANCIAL HIGHLIGHTS

Summary of the financial results of the Company for the year under report are as under:

(Rs. in lakhs, unless otherwise stated)

2022-23 2021-22
Revenue from Operations - -
Other Income 48 61
PBIDT (2547) (3002)
Finance Cost 1567 15836
Depreciation 4679 4658
Profit/(Loss) before exceptional Items (8793) (23496)
Exceptional Item 97163 (134)
Profit/(Loss) before Tax 88370 (23630)
Tax - -
Profit/(Loss) after Tax 88370 (23630)
Deferred Tax (6592) -
Net Profit / (Loss) 94962 (23630)
Other Comprehensive Income - -
Total Comprehensive Income 94962 (23630)
Basic & Diluted Earnings per share of Rs. 10/- each 34.82 (8.05)

THE DETAILS OF THE APPLICATION MADE OR ANY PROCEEDING PENDING UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016 (31 OF 2016) DURING THE YEAR ALONG WITH THEIR STATUS AS AT THE END OF THE FINANCIAL YEAR

CORPORATE INSOLVENCY RESOLUTION PROCESS

The Hon'ble NCLT, Amaravati Bench, vide its Order dated 16th February, 2023 approved the Resolution Plan submitted by the Resolution Applicant, Sagar Cements Limited.

The Resolution Applicant, Sagar Cements Limited upon successful implementation of the Resolution Plan took over the control of the management and ownership of the Company and by virtue of which your company has become subsidiary of Sagar

Cements Limited. The reconstituted Board reflects the control of the Company's Management by Sagar Cements Limited by appointing their Nominees as Directors.

A new Board was constituted on 7th March, 2023 (Re-constituted Board) (and the Independent Directors were appointed on 23.03.2023) and new Management was put in place, in accordance with provisions of the IBC and NCLT Order. The approved Resolution Plan is binding on the Company and its employees, creditors, guarantors and other stakeholders involved.

Members may kindly note that, for the financial year under review, the Directors of the Re-constituted Board (Directors) were in office from 7th March, 2023, to which this report primarily pertains. During the CIRP which commenced from 26th April, 2022 to 16thFebruary, 2023, the Resolution Professional (RP) was entrusted with the management of the affairs of the Company.

This report was prepared by the reconstituted board in compliance with the provisions of the Companies Act, 2013, the rules and regulations framed thereunder, and the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (‘LODR').

The erstwhile Board consisted of Mr. K.V Rajendran, Mr. Pankaj Gaur, Mr. Naveen Kumar Singh, Mr. Suresh Chand Rathi, Mr. S.D. Nailwal and Mrs. Manju Sharma ceased to be Directors of the Company w.e.f. 7th March, 2023 without any further action.

The Board of Directors of the Company was re-constituted and as on the date of this Report, the Company consists of the following Directors.

S.No. Name of the Director Designation
1 Dr. S. Anand Reddy Managing Director
2 Mr. S. Sreekanth Reddy Non-Executive Director
3 Mrs. S. Rachana Non-Executive Director
4 Mr. K.V. Vishnu Raju Non-Executive -Independent Director
5 Mrs. O. Rekha Non-Executive-Independent Director
6 Mr. Ravichandran Rajagopal Non-Executive-Independent Director

 

subject to the approval of the members in the 84th Annual General Meeting Silent features of the approved Resolution Plan and implemented during the financial year under review are as follows:

The CIRP under the Insolvency and Bankruptcy Code, 2016 initiated on 26th April, 2022. The National Company Law Tribunal (NCLT), Amaravati Bench, vide its order dated 16th February, 2023 approved the Resolution Plan submitted by SAGAR CEMENTS LIMITED, which inter alia resulted in the following:

a) Extinguishment of 20,17,41,371 equity shares of Rs. 10/- each held by the erstwhile promoters.

b) Reduction of Capital of 9,17,79,121 equity shares of Rs. 10/- each held by the public (Non-Promoter) to the extent of 95% of their holdings and issued 46,08,607 new equity shares of Rs. 10/- each fully paid-up, in terms of the Resolution Plan. The Company issued 8,75,63,533 equity shares of Rs. 10/- at a premium of Rs. 26.80/- per share to the Resolution Applicant viz., Sagar Cements Limited, which constitute 95% of the post issue share capital of the company.

c) Fractional entitlement of equity shares 0.5 or more, rounding off to next higher integer. Further, every shareholder holding 19 or less equity shares of the company on Record Date (03-03-2023) has allotted one equity share.

d) Settlement of debts of financial creditors amounting to Rs. 725,89,33,418/-

e) Settlement of Employees and workmen amounting to Rs. 8,27,18,455/-

f) Settlement of Operational Creditors (other than Employees and workmen) for a sum of Rs. 9,34,76,068/- payable by the Company and extinguishment of other current and non-current liabilities standing as on the commencement of CIRP

g) Extinguishment of all contingent liabilities, commitments and other claims and obligations including all taxes and other government dues standing as on the commencement of CIRP

MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL POSITION OF THE COMPANY WHICH HAVE OCCURED BETWEEN THE END OF THE FINANCIAL YEAR OF THE COMPANY TO WHICH THE FINANCIAL STATEMENTS RELATES AND THE DATE OF THE REPORT

There were no material changes and commitments, affecting the financial position of the Company, which have occurred between the end of the financial year of the company to which the financial statements relates and the date of the report.

AUTHORISED SHARE CAPITAL

The Authorised Share Capital of the Company is Rs.500 crores comprising of 40.00. 00.000 Equity Shares of Rs. 10/- each amounting to Rs.400 crores and 10.00. 00.000 Preference Shares of Rs. 10/- each amounting to Rs.100 crores.

PAID-UP SHARE CAPITAL

In terms of the Resolution Plan as approved by the Hon'ble NCLT Amaravati Bench, vide its Order dated 16-02-2023, the existing Promoter Shareholding was extinguished and their shareholding stands cancelled and the existing Public Shareholding was reduced to the extent of 95% and allotted 46,08,607 new equity shares of Rs. 10/- each, on 07-03-2023. Further, the Company has issued and allotted 8,75,63,533 equity shares of Rs. 10/- each at a premium of Rs. 26.80/- per share on 23-03-2023 to the Resolution Applicant viz, Sagar Cements Limited, as per the approved Resolution Plan on a preferential basis. Consequent to the above the paid-up equity share capital of the Company as at 31st March, 2023 is Rs. 92,17,21,400/-.

During the period under review, your Company has not issued any shares with differential rights, sweat equity shares and equity shares under employee's stock option scheme expect the above allotments. Your Company has also not bought back its own shares during the period under review.

DIVIDEND

No Dividend is recommended in view of the losses during the year and non-availability of any carry forward surplus.

TRANSFER TO RESERVES

No transfer to any reserve is proposed in view of the losses during the year.

PLANT OPERATIONS

During the year under review, Company's plants viz, Durga Cement Works (DCW) and Visaka Cement Works (VCW) were not operated due to operational constraints. Further, the plant operations of the Company are at halt due to shortage of working capital and consequential attachment of stocks and bank accounts of the Company by the GST authorities and Power disconnection by the concerned Electricity Board. The Company was under the process of Corporate Insolvency Resolution Process as per the NCLT Order dated 26th April, 2022.

After successful implementation of Resolution Plan, the Company re-commenced its Plant Operations/Grinding Operations from 12th April, 2023 at its Durga Cement Works,

FINANCIAL STATEMENTS

As per the provisions of the Companies Act, 2013 and Regulation 34 of LODR, Companies are required to prepare financial statements to be laid before the Annual General Meeting of the Company. Accordingly, the financial statements along with the Auditors' Report thereon, forms part of this Annual Report.

As per section 136(1) of the Companies Act, 2013 the Financial Statements are available at the Company's website i.e www.andhracements.com.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

During the year under report the following changes took place in the Board of the Company:

1. In term of the Resolution Plan as approved by the NCLT Order dt. 16-02-2023, the exiting Board was suspended and all the Directors were ceased to be a Directors of the Company, without any action from their end. The Board was re-constituted on 7th March, 2023 by induction of Dr. S. Anand Reddy, Shri. S. Sreekanth Reddy and Smt. S. Rachana as Additional Directors and Shri.K.Prasad as CFO of the Company. Subsequently the newly constituted Board appointed Shri. K.V. Vishnu Raju and Smt. O. Rekha as Additional Directors (under Independent category) on 23rd March, 2023, and Shri. Ravichandran Rajagopal was inducted as an Additional Director (under Independent category)on 14th April, 2023. Subject to members approval Dr. S. Anand Reddy is appointed as Managing Director. Required resolutions for the appointment of Directors have been included in the notice of the Annual General Meeting seeking approval of the members.

2. During the year under report, the Board Meet 6 times, the details whereof are given in Report on Corporate Governance. The meetings of Board of Directors were held on 30.05.2022, 22.07.2022, 03.11.2022, 09-02-2023, 07.03.2023 and 23.03.2023.

3. All Independent Directors have given declaration that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and Regulation 16(1)(b) of the LODR.

4. Pursuant to the provisions of the Companies Act, 2013 and LODR, the Board has carried out an annual performance evaluation of its own performance, the Directors individually as well as the evaluation of the Committees constituted by it. The manner in which the formal annual evaluation has been carried out has been explained in the Report on Corporate Governance.

5. The Board has on the recommendation of the Nomination & Remuneration Committee adopted a policy for selection and appointment of Directors, Senior Management and their remuneration. A gist of the policy is available in the Corporate Governance Report.

6. Independent Directors have complied with the Code for Independent Directors prescribed in Schedule IV of the Companies Act, 2013. As required under Regulation 25(7) of LODR, the Company has programmes for familiarization for the Independent Directors. The Board of Directors is of the opinion that all the Independent Directors possess requisite qualifications, experience and expertise in industry knowledge and corporate governance and they hold highest standards of integrity.

BOARD EVALUATION

Pursuant to Section 134(3)(p) of the Companies Act, 2013 and Regulation 25(4) of LODR, Independent Directors have evaluated the quality, quantity and timeliness of the flow of information between the management and the board, performance of the Board as a whole and its Members and other required matters. Pursuant to Regulation 17(10) of LODR Board of Directors have evaluated the performance of the Independent Directors and observed the same to be satisfactory and their deliberations beneficial in Board/Committee Meetings.

The Company had formulated a code of conduct for the Directors and Senior Management personnel and the same has been complied.

RELATED PARTY TRANSACTIONS

All Related Party Transactions that were entered into during the financial year were on an arm's length basis and were in the ordinary course of business. During the year, the Company had not entered into any contract/ arrangement/transaction with related parties which could be considered material in accordance with the policy of the Company on materiality of related party transaction.

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

The details of Related Party Transactions as required under IND AS-24 are provided in the accompanying financial statements forming part of this Annual Report. Form AOC- 2 pursuant to Section 134 (3)(h) of the Companies Act, 2013 read with Rule 8(2) of the Companies (Accounts) Rules, 2014 is set out as "Annexure-A" to this Report.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

There are no significant and material orders passed by the Regulators / Courts which would impact the going concern status of the Company and its future operations, except the Order passed by the Hon'ble NCLT Amaravati Bench, Hyderabad dated 26.04.2022 for the Commencement of Corporate Insolvency Resolution Process (CIRP) and appointment of RP and later the Hon'ble NCLT Amaravati Bench, approved the Resolution Plan submitted the Resolution Applicant viz, Sagar Cements Limited, vide Order dated 16th February, 2023. These two orders are available on the Company's website at www.andhracements.com.

MAINTENANCE OF COST RECORDS

Cost records are required to be maintained by the Company under Section 148 (1) of the Companies Act, 2013. Accordingly, such accounts and records made and maintained.

AUDITORS

1. Statutory Auditors

As the members are aware in accordance with the provisions of Section 139 of the Companies Act, 2013 and the Rules made thereunder, M/s. Dass Gupta & Associates, Chartered Accountants (Firm Registration No. 000112N), were appointed as Statutory Auditors of the Company, however they have tendered their resignation on 06.05.2023, thus resulted into casual vacancy, the Board of Directors of the Company recommended appointment of M/s. Deloitte Haskins & Sells, Chartered Accountants (Firm Registration No. 008072S) as Statutory Auditors of the Company to fill the casual vacancy caused by M/s. Dass Gupta & Associates, to hold the office from 06.05.2023 until the conclusion of this AGM. Accordingly, based on the recommendations of the Audit Committee, the Board has recommended for approval of the shareholder at the ensuing AGM, the appointment of M/s. Deloitte Haskins & Sells, Chartered Accountants as Statutory Auditors of the Company the year 2028. The resolution along with explanatory statement for statutory auditors appointment has been included in the Notice of ensuing Annual General Meeting.

The Company has obtained a written consent and a certificate from the Statutory Auditors to the effect that their appointment, if appointed, would be in accordance with the conditions as prescribed and they fulfill the criteria laid down in Section 141 of the Companies Act, 2013.

2. Cost Auditors

The Board of Directors of the Company on the recommendation of Audit Committee, appointed M/s. Narasimha Murthy & Co, Cost Accountants (Firm Regn No. 000042) for the Financial Year 2023-24 for auditing the Cost Records relating to the product ‘Cement'. In this regard, they have submitted a certificate certifying their independence and their arm's length relationship with the Company. The Resolution for ratification of their remuneration has been included in the Notice of ensuing Annual General Meeting.

3. Secretarial Auditor

Secretarial Audit Report for the financial year ended on 31st March, 2023, issued by M/s. Savita Jyoti Associates, Company Secretaries, in form MR-3 forms part of this report and marked as "Annexure-B".

The said report does not contain any qualification or observation requiring explanation or 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 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, on recommendations of the Audit Committee, the Board has appointed M/s. BSS & Associates, a firm of Company Secretaries in Practice to undertake the Secretarial Audit of the Company for the financial year ended 31st March, 2024.

AUDITORS REPORT

The auditors' report does not contain any qualifications, reservations or adverse remarks and it is an unmodified one.

WEB ADDRESS, WHERE ANNUAL RETURN HAS BEEN PLACED

Annual Return in Form MGT-7 for the year ended 31st March, 2023 is available on the company's website and link for the same is https://www.andhracements.com/ Investors.html.

PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS

During the year under review, there were no Loans, Guarantees and Investments made/given as per the provisions of Section 186 of the Companies Act, 2013.

SECURITIES OF THE COMPANY SUSPENDED FROM TRADING DURING THE FINANCIAL YEAR, IF ANY

During the year under review, Securities of the Company not suspended from Trading, except at the stage of Capital Reduction in terms of the NCLT Order dated 16.02.2023.

RISK MANAGEMENT

The Company has formulated a Risk Management Policy. The Risk Management Policy, which inter-alia:

a) define framework for identification, assessment, monitoring, mitigation and reporting of risks.

b) ensures that all the current and future material risk exposures of the Company are identified, assessed, quantified, appropriately mitigated, minimized and managed i.e to ensure adequate systems for risk management.

The Risk Management policy of the Company is available at the Company's website.

CORPORATE SOCIAL RESPONSIBILITY

In view of absence of required profit/net worth/turnover, the provisions of the Companies Act, 2013 relating to Corporate Social Responsibility are not applicable to the Company.

CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSION AND ANALYSIS REPORT

A Report on Corporate Governance as stipulated by Regulation 34(3) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, forms part of this Annual Report along with the required Certificate from the Practicing Company Secretary confirming compliance with conditions of Corporate Governance.

As required under Regulation 34(2)(c) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Management Discussion & Analysis Report on operations and financial position of the Company has been provided in a separate section which forms part of this Annual Report.

DIRECTORS’ RESPONSIBILITY STATEMENT

Pursuant to the provisions of Section 134(5) of the Companies Act, 2013, the Directors, based on the representation received from the operating management, certification by MD and CFO to the Board of Directors and after due enquiry, confirm that in respect of the Audited Annual Accounts for the year ended 31st March, 2023 that:

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

b) the Directors had, in consultation with the Statutory Auditors, selected such accounting policies and applied them consistently and made 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 for the year ended 31st March, 2023 and the profit of the Company for that period;

c) the Directors had taken proper and sufficient care 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;

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

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

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

WHISTLE BLOWER POLICY AND VIGIL MECHANISM

The Company has in terms of the provisions of Section 177(9) of the Companies Act, 2013 read with Rule 7 of the Companies (Meeting of Board and its Powers) Rules, 2014 and Regulation 22 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, formulated Whistle Blower Policy and Vigil Mechanism for Directors and employees under which protected disclosures can be made by a whistle blower. (www.andhracements.com)

INTERNAL FINANCIAL CONTROL

The Internal Financial Controls with reference to financial statements as designed and implemented by the Company are adequate. During the year under review, no material or serious observation has been received from the Internal Auditors of the Company for insufficiency or inadequacy of such controls.

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

DETAILS IN RESPECT OF FRAUDS REPORTED BY AUDITORS UNDER SEB- SECTION (12) OF SECTION 143 OTHER THAN THOSE WHICH ARE REPORTABLE TO THE CENTRAL GOVERNMENT

No frauds were reported by the Auditors under Sub-Section 12 of Section 143 of the Companies Act, 2013 read with the Rules made there under.

CHANGE IN THE NATURE OF BUSINESS, IF ANY

There is no change in the nature of business and activities during the year.

THE NAMES OF COMPANIES WHICH HAVE BECOME OR CEASED TO BE ITS SUBSIDIARIES, JOINT VENTURES OR ASSOCIATE COMPANIES DURING THE YEAR

The Company doesn't have any subsidiaries or joint ventures or associate Companies during the year.

THE DETAILS OF DIFFERENCE BETWEEN AMOUNT OF THE VALUATION DONE AT THE TIME OF ONE TIME SETTLEMENT AND THE VALUATION DONE WHILE TAKING LOAN FROM THE BANKS OR FINANCIAL INSTITUTIONS ALONG WITH THE REASONS THEREOF

The requirement to disclose the details of difference between amount of the valuation done at the time of onetime settlement and the valuation done while taking loan from the Banks or Financial Institutions along with the reasons thereof is not applicable.

DEPOSITS

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

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, a statement showing the names and other particulars of the employees drawing remuneration in excess of the limits set out in the said Rules forms part of this Annual Report and is provided as "Annexure- C" in this report.

Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are provided as "Annexure- C" to this Report.

PARTICULARS OF ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of The Companies (Accounts) Second Amendment Rules, 2015 (as per the notification dated 4th September, 2015), is annexed herewith as "Annexure-D".

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMAN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

The Company has in place an Anti-Sexual Harassment Policy in line with the requirements of the Sexual Harassment of Woman at Workplace (Prevention, Prohibition and Redressal) Act, 2013. During the year under review, no complaints were received by the Company.

FUTURE OUTLOOK

GDP growth isexpected to increase in the year 2023-24. However, there are several uncertainties which can have an impact in the projected GDP The outlook of oil prices continue to be hazy both on upside and downside. It is expected that the demand for cement would increase and will grow to a higherfor the financial year 2023-24. Our plants are fully equipped and supported with grinding units at strategic locations. Our company will be able to make suitable measures to take advantage of the present economic momentum in the coming years.

THREATS

The Sanctions imposed on countries from where India is imposing maximum crude would adversely affect the fuel price, which would have negative impact on our manufacturing and transportation cost. The Mines and Minerals (Development & Regulation) Amendment Act, 2015, (MMDR) has made the Limestone as a notified mineral. Pursuant to the amendment act, grant of mining lease for all notified minerals shall be through public auction process by the respective State Governments. Since, several State Governments do not have the required geological data of availability of the reserves and they are not able to proceed with the auction. This is delaying the process of getting fresh mining leases allotted.

OPPORTUNITIES

The Company's products have always been perceived to possess superior quality standards in the market and the company has been enjoying a high-level customer satisfaction index. Hence, products will be sold at higher profitability and revenue.

INSURANCE

All the properties of the Company have been adequately insured.

POLLUTION CONTROL

Your Company is committed to keep the pollution at its plant within the acceptable norms and as part of this commitment, it has, interalia, an adequate number of bag filters in the plant.

SUB COMMITTEES OF THE BOARD

The Board has an Audit Committee, Nomination and Remuneration Committee, Stakeholders' Relationship Committee and Risk Management Committee. The composition and other details of these committees have been given in the Report on the Corporate Governance, which forms part of the Annual Report.

COMPLIANCE CERTIFICATE

A certificate as stipulated under Schedule V (E) of the SEBI Listing Regulations from a Practicing Company Secretary regarding compliance with the conditions of Corporate Governance is attached to this Report along with our report on Corporate Governance.

CAUTIONARY STATEMENT

Statements in this report and its annexures describing the company's projections, expectations and hopes are forward looking. Though these are based on reasonable assumptions, their actual results may differ.

ACKNOWLEDGEMENT

The Board places on record its sincere appreciation and gratitude to various Departments and Undertakings of the Central Government, and State Governments, Financial Institutions, Banks and other authorities for their continued co-operation and support to the Company. The Board sincerely acknowledges the faith and confidence reposed by the Shareholders in the Company.