Ambuja Cements Ltd
Directors Reports
Dear Members,
It is our pleasure to present the Annual Report of Ambuja Cements Limited for the year
ended December 31, 2021. The PDF version of the Report is also available on the Company's
website (www.ambuiacement.com/investors/annual-reports).
FINANCIAL PERFORMANCE - 2021
(Rs.in crore)
|
Standalone |
Consolidated |
| Particulars |
Current Year 2021 |
Previous Year 2020 |
Current Year 2021 |
Previous Year 2020 |
| SUMMARISED PROFIT AND LOSS |
|
|
|
|
| Net Sales |
13,793.56 |
11,174.97 |
28,548.08 |
24,093.86 |
| Profit before depreciation & amortisation, finance cost and exceptional items |
3,493.12 |
3,018.60 |
6,562.84 |
5,455.16 |
| Depreciation and amortisation expense |
551.24 |
521.17 |
1,152.49 |
1,161.78 |
| Finance costs |
90.94 |
83.05 |
145.66 |
140.22 |
| Share of profit of associates and joint ventures |
- |
- |
20.23 |
14.44 |
| Exceptional items |
65.69 |
- |
120.45 |
176.01 |
| Profit before tax and non controlling interest |
2,785.25 |
2,414.38 |
5,164.47 |
3,991.59 |
| Tax expense |
704.71 |
624.28 |
1,453.43 |
884.75 |
| Net Profit before non controlling interest |
2,080.54 |
1,790.10 |
3,711.04 |
3,106.84 |
| Non controlling interest |
- |
- |
930.66 |
741.40 |
| Profit attributable to the owners of the Company |
2,080.54 |
1,790.10 |
2,780.38 |
2,365.44 |
| movement in retained earnings |
|
|
|
|
| Opening Balance |
1,644.64 |
3,534.96 |
3,925.98 |
5,248.70 |
| Net profit for the year |
2,080.54 |
1,790.10 |
2,780.38 |
2,365.44 |
| Add : other comprehensive income |
5.59 |
-6.97 |
8.40 |
-14.34 |
| Less : Dividend on equity shares |
198.56 |
3,673.45 |
198.56 |
3,673.45 |
| Less : Corporate dividend tax on above |
- |
- |
- |
0.37 |
| Closing balance |
3,532.21 |
1,644.64 |
6,516.20 |
3,925.98 |
There are no significant changes in the key financial ratios during the year under
review.
DIVIDEND
The Company has a robust track record of rewarding its shareholders with a generous
dividend pay-out. In view of the strong operational and financial performance during the
year under review, the Board of Directors is pleased to recommend a dividend of Rs.6.30
per share (315%)for the year ended December 31, 2021. This represents a pay-out ratio of
60%.
The dividend pay-out is in accordance with the Company's Dividend Distribution Policy.
The Policy is available on the Company's website https://www.ambujacement.com/Upload/
PDF/dividend-distribution-policv.pdf
As per the prevailing provisions of the Income Tax Act, 1961, the dividend, if
declared, will be taxable in the hands of the shareholders at the applicable rates. For
details, shareholders are requested to refer to the Notice of annual general meeting.
Credit Rating
The Company's sound financial management and its ability to service financial
obligations in a timely manner, has been affirmed by the credit rating agency CRISIL with
long-term instrument rated as AAA/STABLE and short-term instrument rated as A1+.
MANAGEMENT'S DISCUSSION AND ANALYSIS REPORT
Management's Discussion and Analysis Report for the year under review, as stipulated
under the Securities and Exchange Board of India (Listing Obligations and Disclosure
Requirements) Regulations, 2015, is presented in a separate section, forming part of the
Annual Report.
CAPACITY EXPANSION AND NEW PROJECTS
The Company's current installed capacity is 31.45 MTPA. Detailed information on
capacity expansion and new projects is covered in the report on Management Discussion and
Analysis.
COMPANY'S RESPONSE TO COVID
The COVID-19 crisis continued to impact during the year 2021 as well. As the pandemic
prolonged another year, Ambuja Cement Foundation (ACF), our CSR arm decided to turn more
resilient and approached with utmost optimism.
The nationwide vaccination drive steered ACF into running awareness campaigns, plying
beneficiaries to vaccination centres and offering assistance at vaccination camps. Till
date, 27 lakh people are fully vaccinated due to ACF's mobilisation. A community
volunteering program called ‘Ambuja CoviSAINIK' was also launched offering a cadre of
community members to the health administration as volunteering support.
During the year, we launched several health and wellness programs for our employees and
stakeholders covering various aspects of physical and emotional wellbeing, counselling
support and awareness. In particular, together with health professionals and hospitals
across our various locations, we offered COVID-19 related care for our employees and their
families. Necessary safety and hygiene protocols like wearing of face masks, social
distancing norms, workplace sanitation and employee awareness programmes were followed in
compliance with the regulations of the local authorities.
CORPORATE SOCIAL RESPONSIBILITY (CSR) AND SUSTAINABILITY
CSR, where we envision prosperous communities around our manufacturing sites has always
been part of our DNA and integral to sustainable business practices. Through Ambuja Cement
Foundation (ACF), we have reached to 2.81 million people across 3,547 villages in 50
districts spanning 11 states of India.
Through need based assessments and active community engagement and participation, ACF
works on thrust areas across sites addressing the social and economic issues of the
communities. The core areas include Water Resource Management, Agro-based as well as skill
based livelihood development, Healthcare, Women Empowerment and Education.
During the year under review, your Company has spent Rs.64.41 crore on CSR activities,
which is 3.52% against the mandated 2% of the average net profit of last three years as
required under section 135 of the Companies Act, 2013.
The Annual Report on CSR activities and expenditure, as required under sections 134 and
135 of the Companies Act, 2013 read with Rule 8 of the Companies (Corporate social
Responsibility Policy) Rules, 2014 and Rule 9 of the Companies (Accounts) Rules, 2014, is
provided as Annexure I to this Report and the CSR Policy along with the action plan
of CSR activities for the Financial Year 2022 is available on the website of the Company.
Our Sustainable Development Plan 2030, ‘Building for Tomorrow' is on track and
progressing well in four thrust areas for our business; Climate & Energy, Circular
Economy, Nature & Environment and Community. Our operational-site level objectives
help the respective heads align with and accomplish overall sustainability objectives.
With the strides made in 2021 on validated Science Based Targets initiative (SBTi), and
Net Zero ambition by 2050, we are aligned towards our parent Holcim's sustainability
targets as well as global efforts.
We are also progressing well on our targets in areas such as Waste Heat Recovery System
(WHRS), Renewable Energy, Clinker Factor reduction, Energy Efficiency (thermal and
electrical), and use of Waste-derived resources/ alternative fuels. These efforts of the
Company were highly recognised in various ESG benchmarking and ratings.
It is a matter of pride for all of us to note that Ambuja became 1st ever Cement
Company in the World to achieve "A" rating (Leadership) in Water Security CDP
2021. Ambuja was rated A-(Leadership) in CDP Climate Change 2021 also. During the year
2021, Ambuja ranked 5th in the World in Construction Material (COM) Category at the
prestigious Dow Jones Sustainability Index (DJSI) 2021, thus, only cement company from
India to appear in top 5 in DJSI. In the ‘S&P Global Sustainability Awards 2021
', Ambuja got "Bronze Class Award" in COM sector.
DISCLOSURES UNDER THE COMPANIES ACT, 2013 AND LISTING REGULATIONS
Annual Return
The Annual Return as required under section 92 and section 134 of the Companies Act,
2013 read with Rule 12 of the Companies (Management and Administration) Rules, 2014 is
available on the Company's website (www.ambujacement. com/investors/annual-reports).
Number of Board Meetings
Six Board meetings were held during 2021. The particulars of the meetings held and
attended by each Director during the financial year 2021 are given in the Corporate
Governance Report which forms part of this Annual Report.
Composition of the Audit Committee
The Board has constituted the Audit Committee, which has Mr. Rajendra Chitale as the
Chairman and Mr. Nasser Munjee, Ms. Shikha Sharma, Mr. Martin Kriegner, Mr. Mahendra Kumar
Sharma and Dr. Omkar Goswami as members. More details on the committee are given in the
Corporate Governance Report forming part of this Report.
During the year under review, all recommendations made by the Audit Committee were
accepted by the Board.
Related Party Transactions
In line with the requirements of the Companies Act, 2013 and Listing Regulations, the
Company has formulated a Policy on Related Party Transactions, which is also available on
the Company's website (https://www.ambuiacement.com/
Upload/PDF/Policv-on-materialitv-of-RPT-221020.pdf).
All the related party transactions entered into by the Company during the financial
year were on an arm's length basis and in the ordinary course of business and adheres to
the applicable provisions of the Act and the Listing Regulations. There were no materially
significant related party transactions made by the Company with Promoters, Directors, Key
Managerial Personnel or others, which may have a potential conflict with the interest of
the Company at large or which warrants the approval of the shareholders. No material
contracts or arrangements with related parties were entered during the year. All related
party transactions are presented to the Audit Committee and the Board. Omnibus approval is
obtained before the commencement of the financial year, for the transactions which are
repetitive in nature and also for the transactions which are not foreseen (subject to
financial limit).
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 certification from the Managing Director
& Chief Executive Officer and the Chief Financial Officer. All related party
transactions are subject to half-yearly independent review by a reputed accounting firm to
establish compliance with the requirements of Arms' Length Pricing.
In accordance with section 134 of the Companies Act, 2013 and Rule 8 of the Companies
(Accounts) Rules, 2014, the particulars of the contract or arrangement entered into by the
Company with related parties referred to in section 188(1) in Form AOC-2 is attached as Annexure
II of this report.
Policy on Sexual Harassment of Women at Workplace
The Company has zero tolerance towards sexual harassment at the workplace and to this
end, has adopted a policy in line with the provisions of Sexual Harassment of Women at
Workplace (Prevention, Prohibition and Redressal) Act, 2013 (POSH Policy) and the Rules
thereunder. All employees (permanent, contractual, temporary, trainees) are covered under
the said Policy. An Internal Complaints Committee (ICC) has also been set up to redress
complaints received on sexual harassment.
During the financial year under review, the ICC received one complaint, which was dealt
in line with the POSH Policy of the Company and disposed off. No cases of child labour,
forced labour, involuntary labour and discriminatory employment were reported during the
period.
The Company is committed to providing a safe and conducive work environment to all its
employees and associates.
CORPORATE GOVERNANCE
The Company has complied with the corporate governance requirements under the Companies
Act, 2013 and the Listing Regulations. A separate section on corporate governance, along
with a certificate from the statutory auditors confirming compliance is annexed and forms
part of the Annual Report.
RISK MANAGEMENT
The Company has formulated an Enterprise Risk Management (ERM) policy to identify,
assess and mitigation of various risks to our business, which is covered in detail in the
Management Discussion and Analysis Report attached to this Report.
The Risk management committee at Ambuja is constituted under the chairmanship of Mr.
Rajendra Chitale, Independent Director. The objective of the Committee is to define the
framework for the identification, assessment, monitoring and mitigation of risks, oversee
the risk management performance of the Management and to review the ERM policy framework
in line with the regulatory requirements.
INTERNAL AUDITS AND CONTROLS
The establishment of an effective corporate governance and internal control system is
essential for sustainable growth and long-term improvements in corporate value, and
accordingly the Company works to strengthen such structures. The Company believes that a
strong internal control framework is an important pillar of Corporate Governance.
The current system of Internal Financial Controls is aligned with the requirement of
the Companies Act, 2013 and is in line with globally accepted risk-based framework as
issued by the Committee of sponsoring Organisations (COsO) of the Treadway Commission.
This framework includes entity- level policies, processes and standard Operating
Procedures (SOP). Compliance with these policies and procedures is ingrained into the
management review process. Moreover, the Company regularly reviews them to ensure both
relevance and comprehensiveness of the Internal Financial Controls. The Company uses
IT-supported platforms to keep the IFC framework robust.
The Company periodically assesses design as well as operational effectiveness of its
internal controls across multiple functions and locations through extensive internal audit
exercises. Based on the assessment of internal audit function, process owners undertake
corrective action in their respective areas, and thereby strengthen the controls.
Significant audit observations and corrective actions thereon are presented to the Audit
Committee of the Board.
MANAGING THE RISKS OF FRAUD, CORRUPTION AND UNETHICAL BUSINESS PRACTICES
Vigil Mechanism/Whistle-Blower Policy
Ambuja's core value has been to create a fraud and corruption- free culture. We believe
that the potential risk of fraud, corruption and unethical behaviour could adversely
impact the Company's business operations, performance and reputation. With a view to
create ethical environment and to mitigate the risk of fraud, a comprehensive Ethical View
Reporting Policy akin to Vigil Mechanism or the Whistle-Blower Policy has been laid down.
This policy encourages Directors, employees and third parties to bring to your
Company's attention, any instances of illegal or unethical conduct, actual or suspected
incidents of fraud, actions that affects the operational & financial integrity and
actual or suspected instances of leak of unpublished price sensitive information that
could adversely impact operations, business performance and/or reputation.
In terms of the said Policy, all the reported incidents are reviewed by the Ethical
View Committee. Based on an in-depth review, all such incidents are investigated in an
impartial manner and appropriate actions are taken to uphold the highest professional,
ethical and governance standards. The Policy also provides for the requisite checks,
balances and safeguards to ensure that no employee is victimised or harassed for reporting
and bringing up such incidents in the interest of the Company.
No personnel have been denied access to the Audit Committee for any matter pertaining
to the Ethical View Policy. The implementation of the Policy and the functioning of the
Ethical View Committee is overseen by the Audit Committee.
More details on this Policy are given in the Corporate Governance Report, which forms
part of this Report. The Policy is available on the Company's website (www.am bu
iacement.com/investors).
Code of Conduct
The Company has laid down a robust Code of Business Conduct and Ethics, which is based
on the principles of ethics, integrity and transparency. More details about the Code is
given in the Corporate Governance Report.
Anti-bribery and Corruption Directives (ABC Directives)
In furtherance to the Company's philosophy of conducting business in an honest,
transparent and ethical manner, the Board has laid down ‘ABC Directives' as part of
the Company's Code of Business Conduct and Ethics. As a Company, Ambuja Cement has
zero-tolerance to bribery and corruption and is committed to act professionally and fairly
in all its business dealings. To spread awareness about the Company's commitment to
conduct business professionally, fairly and free from bribery and corruption and as part
of continuous education to the employees on ‘ABC Directives', regular awareness
emails were circulated, face-to-face and online trainings were conducted, and close to
1200 relevant employees were trained.
The above policies and its implementation are closely monitored by the Audit and
Compliance Committees of Directors and periodically reviewed by the Board.
BOARD OF DIRECTORS AND KEY MANAGERIAL PERSONNEL
Retirement by Rotation
In accordance with the provisions of the Companies Act, 2013 and the Articles of
Association of the Company, Mr. Christof Hassig (DIN 01680305), and Mr. Ranjit Shahani
(DIN 00103845) Non-Executive Directors of the Company are liable to retire by rotation at
the ensuing Annual General Meeting of the Company and being eligible, have offered
themselves for re-appointment. The Board recommends their re-appointment.
More details about the Directors are either given in the Corporate Governance Report or
in the Notice of the ensuing Annual General Meeting being sent to the shareholders along
with the Annual Report.
Key Managerial Personnel
Mr. Neeraj Akhoury, Managing Director & CEO, Ms. Rajani Kesari, Chief Financial
Officer and Mr. Rajiv Gandhi, Company Secretary are the Key Managerial Personnel of the
Company.
During the year under review, there were no changes in the Key Managerial Personnel of
the Company.
Attributes, Qualifications and Independence of Directors and their Appointment
The Nomination & Remuneration Committee of Directors have approved a policy for the
selection, Appointment and Remuneration of Directors, which inter-alia, requires that the
Directors shall be of high integrity with relevant expertise and experience to have a
diverse Board. The Policy also lays down the positive attributes/criteria while
recommending the candidature for the appointment of a new Director.
The Board Diversity Policy of the Company requires the Board to have a set of
accomplished individuals, ideally representing a wide cross-section of industries,
professions, occupations and functions and possessing a blend of skills, domain and
functional knowledge, experience and educational qualifications, both individually, as
well as collectively.
Directors are appointed/re-appointed with the approval of the Members for a term in
accordance with the provisions of the law and the Articles of Association. The initial
appointment of Managing Director & Chief Executive Officer is generally for a period
of five years. All Directors other than Independent Directors are liable to retire by
rotation unless otherwise specifically provided under the Articles of Association or under
any statute. One-third of the Directors who are liable to retire by rotation, retire at
every Annual General Meeting and are eligible for re-appointment.
The relevant abstract of the Policy for selection, Appointment and Remuneration of
Directors is given as Annexure III to this report.
Independent Directors
The Independent Directors have submitted the Declaration of Independence, stating that
they continue to fulfil the criteria of independence as required pursuant to section 149
of the Companies Act, 2013 and Regulations 16 of the Listing Regulations. This section
require companies to have at least one-third of the total number of Directors as
Independent Director and the Company complies with this requirement. There has been no
change in the circumstances affecting their status as Independent Directors of the
Company. The profile of the Independent Directors forms part of the Corporate Governance
Report
In the Board's opinion, the Independent Directors are persons of high repute, integrity
and possess the relevant expertise and experience in their respective fields.
Board Evaluation
The annual evaluation process of the Board, its committees and individual Directors for
the year 2021 was conducted as per provisions of the Companies Act, 2013 and the Listing
Regulations with a view to maintain high level of confidentiality and ease of doing
evaluation, the exercise was carried out online using secured web-based application. Each
Board member filled up the online evaluation template on the functioning and overall level
of engagement of the Board and its committees, on parameters such as composition,
execution of specific duties, quality, quantity and timeliness of flow of information,
deliberations at the meeting, independence of judgement, decision-making, management
actions etc. The evaluation templates were designed considering the guidelines issued
under the Listing Regulations and secretarial standards and taking into consideration the
suggestions given by the Directors.
Feedback Mechanism
A one-on-one meeting of the individual Directors with the Chairman of the Board was
also conducted as a part of selfappraisal and peer-group evaluation and the engagement and
impact of individual Director was reviewed on parameters such as attendance, knowledge and
expertise, inter-personal relationship, engagement in discussion and decision-making
process, actions oriented and others. The Directors were also asked to provide their
valuable feedback and suggestions on the overall functioning of the Board and its
committees and the areas of improvement for a higher degree of engagement with the
management.
Evaluation Results
The Independent Directors met on December 15, 2021 to review the performance evaluation
of Non-Independent Directors and the entire Board of Directors, including the Chairman,
while considering the views of the Executive and Non-Executive Directors.
The Independent Directors were highly satisfied with the overall functioning of the
Board and its various committees, which displayed a high level of commitment and
engagement. They also appreciated the exemplary leadership of the Chairman of the Board
and its committees in upholding and following the highest values and standards of
corporate governance.
Post the review by the Independent Directors, the results were shared with the entire
Board and its respective committees. The Board expressed its satisfaction with the
evaluation results, which reflects very high degree of engagement of the Board and its
committees with the Management.
Based on the outcome of the evaluation and assessment cum feedback of the Directors,
the Board and the Management have agreed on various action points, which will be
implemented during the year 2022. The Board also suggested various areas such as
sustainability, strategy, risk management etc. requiring more focused attention from the
Management.
Remuneration Policy
The Company follows a policy on the 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, Key Managerial Personnel (KMP) and senior Management employees. The
remuneration involves a balance between fixed and incentive pay, reflecting short- and
long-term performance objectives appropriate to the working of the Company and its goals.
The Remuneration Policy for the Directors and senior Management employees is given in the
Corporate Governance Report.
Induction and Familiarisation Programme for Directors
The details of the induction and Familiarisation programme of the Directors are given
in the Corporate Governance Report.
DIRECTORS' RESPONSIBILITY
Pursuant to section 134 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 and that no material departures have been made from the same;
ii) they have selected such accounting policies, judgements and estimates that are
reasonable and prudent and have applied them consistently to give a true and fair view of
the state of affairs of the Company as on December 31, 2021, and of the statement of
Profit and Loss and Cash Flow of the Company for the period ended December 31, 2021
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 going concern basis
v) proper internal financial controls to be followed by the Company have been laid down
and that such internal financial controls are adequate and were operating effectively
vi) proper systems to ensure compliance with the provisions of all applicable laws have
been devised and that such systems are adequate and are operating effectively
AUDITORS & AUDITORS' REPORT
Statutory Auditor
M/s. Deloitte Haskins & Sells, LLP, Chartered Accountants (ICAI Firm Registration
No. 117366 W/W-100018) were appointed as the Statutory Auditors for a period of five years
commencing from the conclusion of the 34th Annual General Meeting until the conclusion of
the 39th Annual General Meeting. Accordingly, M/s. Deloitte Haskins & Sells LLP will
be completing their term of five years at the conclusion of the forthcoming Annual General
Meeting.
The company is proposing to appoint M/s. SRBC & Co LLP (Firm Registration No.
324982E/E300003), Chartered Accountants, as Statutory Auditors for a period of 5 years
commencing from the conclusion of the 39th Annual General Meeting till the conclusion of
the 44th Annual General Meeting.
M/s. SRBC & Co LLP is a leading professional services firm engaged in the field of
audit, taxation, risk and transaction advisory services.
M/s. SRBC & Co LLP have consented to the said appointment, and confirmed that their
appointment, if made, would be within the limits mentioned under Section 141(3)(g) of the
Companies Act, 2013 and the Companies (Audit and Auditors) Rules, 2014. Further, they have
confirmed that they hold a valid certificate issued by the Peer Review Board of the
Institute of Chartered Accountants of India (ICAI).
The Audit Committee and the Board of Directors recommend the appointment of M/s. SRBC
& Co LLP, Chartered Accountants as Statutory Auditors of the company from the
conclusion of the 39th Annual General Meeting till the conclusion of the 44th Annual
General Meeting.
The Board places on record its appreciation for the services of M/s. Deloitte Haskins
& Sells LLP, Chartered Accountants, during their tenure as the Statutory Auditors of
your company.
The Auditors' Report for financial year 2021 on the financial statements forms part of
this Annual Report. The Auditors have also furnished a declaration confirming their
independence as well as their arm's length relationship with the Company as well as
declaring that they have not taken up any prohibited non-audit assignments for the
Company. The Audit Committee reviews the independence of the Auditors and the
effectiveness of the Audit process. The Auditors attend the Annual General meeting of the
Company.
The observations made by the Statutory Auditors on the Financial Statements of the
company, in their Report for the financial year ended December 31, 2021, read with the
explanatory notes therein, are self-explanatory and, therefore, do not call for any
further explanation or comments from the Board under Section 134(3)(f) of the Act. The
Auditors' Report does not contain any qualification, reservation or adverse remark or
disclaimer. Explanations or comments by the Board on emphasis of matters made by the
statutory auditors in their report includes Order passed by the Competition Commission of
India in two matters, which has been dealt in more detail in this Report.
Cost Auditor
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 (ICWAI Firm Registration No. 000012) as the Cost Auditors of the Company for
2022 and has recommended their remuneration to the shareholders for their ratification at
the ensuing Annual General Meeting. M/s P.M. Nanabhoy & Co. have given their consent
to act as Cost Auditors and confirmed that their appointment is within the limits of the
section 139 of the Companies Act, 2013. They have also certified that they are free from
any disqualifications specified under Section 141 of the Companies Act, 2013. 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 Companies (Cost
Records and Audit) Rules, 2014, the Cost Audit Report for the financial year 2020 was
filed with the Ministry of Corporate Affairs on May 25, 2021 vide SRN: T20097267.
As per the requirements of section 148 of the Act read with the Companies (Cost Records
and Audit) Rules, 2014, the Company has maintained cost accounts and records in respect of
the applicable products for the year ended December 31, 2021.
Secretarial Auditor
The Board had appointed Mr. Jayesh Shah, (CP No.2535), Partner of 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 2021 and his report is
annexed as Annexure IV to this Report. The report does not contain any
qualification, reservation and adverse remarks.
Reporting of Fraud
The Auditors of the Company have not reported any fraud as specified under section
143(12) of the Companies Act, 2013.
COMPLIANCE WITH SECRETARIAL STANDARDS ON BOARD AND ANNUAL GENERAL MEETINGS
The Company has complied with the Secretarial Standards issued by the Institute of
Company secretaries of India on Board Meetings and Annual General Meetings.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE COURTS OR REGULATORS
Order passed by the National Company Law Appellate Tribunal (NCLAT) in the Matter of
Penalty Levied by the Competition Commission of India (CCI)
i) Appeal filed by the Company against the Order of the CCI levying penalty of
Rs.1,163.91 crore on the Company was heard and dismissed by the NCLAT in July 2018 and
CCI's Order was upheld. Further, the Company has challenged the judgement passed by NCLAT
before the Hon'ble Supreme Court in September 2018. The Hon'ble Supreme Court has admitted
the Company's Appeal and ordered for the continuation of interim order passed by the
Tribunal.
ii) Pursuant to a reference filed by the Director, supplies and Disposals, Government
of Haryana, the CCI vide its Order dated January 19, 2017 has imposed a penalty of
Rs.29.84 crore on the Company. The Company filed an Appeal before the Competition
Appellate Tribunal (COMPAT) and obtained an interim stay on the operation of the said
Order. Further, by virtue of Government of India notification, all cases pending before
the COMPAT were transferred to the NCLAT and as such, the hearing on the Appeal is
underway at the NCLAT.
Other than the aforesaid, there have been no significant and material orders passed by
the courts or regulators or tribunals impacting the ongoing concern status and the
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.
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 26 and 34 of the standalone financial statements.
Treasury Operations
During the year, the Company's treasury operations continued to focus on cash
forecasting and the deployment of excess funds on the back of effective portfolio
management of funds within a well-defined risk management framework. All investment
decisions in deployment of temporary surplus liquidity continued to be guided primarily by
the tenets of safety of Principal and liquidity. Surplus funds are parked only within the
approved investment categories with well defined limits. Investment category is
periodically reviewed by the Company's Board of Directors.
During the year, the investment portfolio mix was continuously rebalanced in line with
the evolving interest rate environment.
TRANSFER OF UNCLAIMED DIVIDEND AND UNCLAIMED SHARES
The details relating to unclaimed dividend and unclaimed shares forms part of the
Corporate Governance Report forming part of this Report.
ENERGY, TECHNOLOGY AND FOREIGN EXCHANGE
Information on the conservation of energy, technology absorption, foreign exchange
earnings and out go is required to be given pursuant to the provisions of section 134 of
the Companies Act, 2013, read with the Companies (Accounts) Rules 2014, which is marked as
Annexure V to this Report.
PARTICULARS OF EMPLOYEES
There were 4,418 permanent employees of the Company (excluding the employees on
probation and shipping sailing staff) as of December 31, 2021. 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 is annexed as Annexure VI to this Report.
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 provision of 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.
SUBSIDIARIES, JOINT VENTURES AND JOINT OPERATIONS
As of December 31, 2021, the Company has six subsidiaries, one joint venture and one
joint operation.
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
(www.ambujacement. com/investors).
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 subsidiary, joint venture and joint
operations in the prescribed Form AOC-1 is annexed as Annexure VII to this Report.
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 Company's website
(www.ambuiacement.com/investors).
The consolidated net profit attributable to the Company is Rs.2,780.38 crore for 2021
as compared to Rs.2,365.44 crore for 2020.
BUSINESS RESPONSIBILITY REPORTING
The Company follows the <IR> framework of the International Integrated Reporting
Council to report on all the six capitals that are used to create long-term stakeholder
value. We also provide the requisite mapping of principles between the Integrated Report,
the Global Reporting Initiative (‘GRI') and the BRR as prescribed by SEBI. The report
is independently assured by TUV India Private Limited.
As stipulated under the Listing Regulations, the Business Responsibility Report (BRR)
describing the initiatives undertaken by the Company from an environment, social and
governance perspective is available on Company's website
https://www.ambujacement.com/Upload/Content Files/
annual-reports/Business-Responsibilitv-Report-2021.pdf
A copy of the BRR will be made available by email to any shareholder on request.
OTHER DISCLOSURES
No disclosure or reporting is made with respect to the following items, as there were
no transactions during the year under review:
• Details relating to deposits that are covered under Chapter V of the Act
• The issue of equity shares with differential rights as to dividend, voting or
otherwise
• The issue of shares to the employees of the Company under any scheme (sweat
equity or stock options)
• There is no change in the Share Capital structure during the year under review
• The Company does not have any scheme or provision of money for the purchase of
its own shares by employees or by trustees for the benefits of employees
• Managing Director & CEO has not received any remuneration or commission from
any of its subsidiaries
• There was no revision in the financial statements
• There was no change in the nature of business
• There were no material changes and commitments affecting financial position of
the Company between the end of the financial year and the date of this report
• The Company has not transferred any amount to reserves during the year under
review.
EQUAL OPPORTUNITY EMPLOYER
The Company has always provided a congenial atmosphere for work 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, colour,
marital status and sex.
CAUTION 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. Crucial 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 that are material to the business operations
of the Company.
APPRECIATIONS AND ACKNOWLEDGEMENTS
Your Directors place on record their deep appreciation to every member of Ambuja family
for their hard work, dedication and commitment, to whom the credit for the Company's
achievements goes, particularly during this unprecedented year. Your Directors would also
like to acknowledge the valuable contribution by the Company's Promoter, M/s Holcim Ltd.
in continuous improvement in our Business Practices.
Your Company looks upon its suppliers, distributors, retailers, business partners and
others associated with it in its progress and the Board places on record its appreciation
for the support and co-operation from all of them. The Directors take this opportunity to
express their deep sense of gratitude to the Banks, Government and Regulatory authorities,
both at Central and State level for their continued guidance and support.
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 |
|
| Mumbai |
N. S. Sekhsaria |
| Date February 17, 2022 |
Chairman & Principal Founder |
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