Andhra Cements Ltd Directors Report

DIRECTORS REPORT

To,

The Members

The Directors of your Company are pleased to present the Eighty Fifth (85^th)Annual Report together with the Audited Financial Statements of the Company for the Financial Year ended 31^st March, 2024.

FINANCIAL HIGHLIGHTS

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

(Rs. in lakhs, unless otherwise stated)

Particulars	2023-24	2022-23
Revenue from Operations	26,811	-
Other Income	851	48
Profit before Interest, Depreciation and Tax	527	(2,547)
Finance Cost	7,054	1,567
Depreciation	5,641	4,679
(Loss)/Profit before exceptional Items and Tax	(12,168)	(8,793)
Exceptional Item	(1,479)	(97,163)
(Loss)/Profit before Tax	(10,689)	88,370
Tax	-	-
(Loss)/Profit after Tax	(10,689)	88,370
Deferred Tax	(4,128)	(6,592)
Net (Loss) / Profit	(6,561)	94,962
Other Comprehensive Income	(1)	-
Total Comprehensive Income	(6,562)	94,962
Basic & Diluted Earnings per share of	(7.12)	34.82
Rs. 10/- each

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

1.00. 00.000 preference shares of Rs. 100/- each amounting to Rs. 100 crores.

PAID-UP SHARE CAPITAL

The paid-up equity share capital of the Company as at 31^st March, 2024 is Rs. 92,17,21,400/- divided into 9,21,72,140 equity shares of Rs. 10/- each.

During the period under review, your Company has not issued any shares with differential rights, sweat equity shares and equity shares under employees 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

After successful implementation of Resolution Plan, the Company re-commenced its Plant Operations/Grinding Operations from 12^th April, 2023 at its Sri Durga Cement Works and the plant was operated successfully during the year and the companys other Plant Visaka Cement Works (VCW) unable to operate during the year, as the plant falls under city limits making it difficult to run the operations and logistic issues.

PROPOSED MODERNISATION & EXPANSION PROJECT

Your Board of Directors at its meeting held on January 24, 2024 had approved a proposal for expansion for manufacturing capacity of clinker from 1.85 MTPA to 2.3 MTPA and the grinding capacity from 2.25 MTPA to 3.00 MTPA along with installation of a new 6 stage preheater system with necessary modifications/preplacement of the existing equipment to align with the proposed enhanced facilities and to optimize the fuel cost at its Dachepalli unit.

The estimated cost of the project to implement the above said facilities will be around Rs.47,069 lakhs and the same will be met through equity/internal accruals and borrowings from banks/institutions.

Further, your Board of Directors at its meeting held on March 28, 2024 had also approved a proposal for raising funds for an amount not exceeding t 180 crores to part finance the above expansion and for upgradation as detailed above and also to achieve the Minimum Public shareholding of 25%, which has to be in compliance with Rule 19A (5) of Securities Contracts (Regulation) Rules, 1957, through Issue of Equity Shares of the Company on a Rights basis to the existing shareholders of the company in accordance with the provisions of the Companies Act, 2013 and SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018. The Proposed Rights Issue is under process.

FINANCIAL STATEMENTS

As per the provisions of the Companies Act, 2013 and Regulation 34 of the SEBI LODR Regulations, 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 Companys 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. Mr. Ravichandran Rajagopal was inducted as Independent Director (under Independent category) and Dr. S. Anand Reddy is appointed as Managing Director by the Board of Directors in their meeting held on 14^th April, 2023. Required resolutions for the appointment of Directors have been approved by the members at the 84^th Annual General Meeting held on 5^th June, 2023. Shri V.H.Ramakrishnan was appointed as an Independent Director by the members in the 84^th Annual General Meeting held on 5^th June, 2023. Dr. S.Anand Reddy, executive director is retiring by rotation at this AGM and eligible for re-appointment.

2. During the year under report, the Board Met 6 times, the details whereof are given in Report on Corporate Governance. The meetings of Board of Directors were held on 14.04.2023, 06.05.2023, 27.07.2023, 19.10.2023, 24.01.2024 and 28.03.2024.

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 SEBI LODR Regulations.

4. Pursuant to the provisions of the Companies Act, 2013 and the SEBI LODR Regulations, 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 the SEBI (LODR) Regulations, 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, integrity, 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 the SEBI (LODR) Regulations, 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 the SEBI (LODR) Regulations, Board of Directors have evaluated the performance of 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 arms length basis and were in the ordinary course of business. During the year, the Company had entered into a 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 Companys website at ^^.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.

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, based on the recommendations of the Audit Committee, the Board had recommended and the shareholders approved the appointment of M/s. Deloitte Haskins & Sells, Chartered Accountants as Statutory Auditors of the Company for a term of 5 years from the conclusion of 84^th AGM till the conclusion of the 89^th AGM to be held in the year 2028.

2. Cost Auditors

The Board of Directors of the Company have on the recommendation of Audit Committee, appointed M/s. Narasimha Murthy & Co, Cost Accountants (Firm Regn No. 000042) Cost Auditors of the Company for the Financial Year 2024-25

for auditing the Cost Records relating to the product ‘Cement. In this regard, they have submitted a certificate certifying their independence and their arms length relationship with the Company. The Resolution for ratification of their remuneration has been included in the Notice for ensuing Annual General Meeting.

3. Secretarial Auditor

Secretarial Audit Report for the financial year ended on 31^st March, 2024, issued by M/s. BSS & 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.

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 31^st March, 2024 is available on the companys 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 but no trading from 3^rd March, 2023 due to announcement of record date for the capital reduction as per the Honble NCLT Order dt. 16.02.2023 and re-commenced w.e.f. 10^th May, 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 Companys 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 31^st March, 2024 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 31^st March, 2024 and the loss 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 systems were 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 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 were 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 doesnt 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 underSection 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 4^th 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. The Company has complied with the provisions relating to the constitution of Internal Complaints Committee (ICC). ICC is responsible for redressal of complaints related to sexual harassment and follows the guidelines provided in the policy. During the year under review, no complaints were received by the Company.

UTILIZATION OF FUNDS RAISED THROUGH ISSUE OF EQUITY SHARES

During the financial year 2023-24, no funds were raised through Rights Issue, Preferential issue etc.

FUTURE OUTLOOK

GDP growth is expected to increase in the year 2024-25. 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 higher level for the financial year 2024-25. Our plant is fully equipped and supported with grinding unit at strategic location. Our company will be able to make suitable measures to take advantage of the present economic momentum in the coming years.

THREATS

The Sanctions importunes 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 Companys 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 with in the acceptable norms and as part of this commitment, it has, inter-alia, 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, Risk Management Committee and Rights Issue 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.

CREDIT RATING

Details of Credit Ratings obtained by the Company have been given in the corporate governance report.

TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND

There was no such instance arose to transfer any amount to the Investor Education and Protection Fund.

SECRETARIAL STANDARDS

Your company has devised proper systems to ensure compliance with the provisions of all applicable Secretarial Standards issued by the Institute of Company Secretaries of India from time to time and that such systems are found to be adequate and operating effectively.

THE DETAILS OF 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

No application has been admitted or any proceeding pending against the Company under the Insolvency and Bankruptcy Code, 2016.

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

Statement in this report and its annexures describing the companys 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.

	For and on behalf of the Board
	K.V. VISHNU RAJU
Place: Hyderabad	Chairman
Date: May 14, 2024	(DIN: 00480361)