We are pleased to present the Annual Report of the\ Company for the
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
- 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
- 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
duty) 9,368.30 9,910.70 9,388.00 9,930.54
item 1,889.66 2,357.42 1,895.48 2,352.60
costs 91.79 64.48 92.47 65.55
profit 1,797.87 2,292.94 1,803.01 2,287.05
Expense 625.66 509.53 629.76 513.03
Tax 1,172.21 1,783.41 1,173.25 1,774.02
Expense 364.65 287.05 365.37 287.51
Interest 807.56 1,496.36 807.88 1,486.51
Interest - - - (0.01)
the Year 807.56 1,496.36 807.88 1,486.50
Statements 1,655.93 1,230.69 1,941.15 1,525.77
priation 2,463.49 2,727.05 2,749.03 3,012.27
Reserve - 150.00 - 150.00
Act, 2013 106.63 - 108.91 -
interim) 434.53 774.61 434.53 774.61
Tax 88.46 146.51 88.46 146.51
Total 629.62 1,071.12 631.90 1,071.12
Sheet 1,833.87 1,655.93 2,117.13 1,941.15
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.
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
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.
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
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.
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
- 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
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
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
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
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
(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
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
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
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
15. MANAGING THE RISKS OF FRAUD, CORRUPTION AND UNETHICAL BUSINESS
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
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.
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
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.
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
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
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
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
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
V. ATTRIBUTES, QUALIFICATIONS & INDEPENDENCE OF DIRECTORS AND THEIR
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
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
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
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
The policy on Company's familiarization programmed for Independent
Directors is posted on the Company's website at:
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.
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
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.
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
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
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.
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
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
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
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
25. AWARDS AND ACCOLADES
- 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
- CM Sustainability Award 2015 for 'Corporate Excellence-Commendation'
for Significant Achievement in category 'A'. Ambuja has bagged this
award for the 5th consecutive year.
- 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
- 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
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
- 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
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
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
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
Mumbai, 25th February, 2016