Andhra Cements Ltd Directors Report

Dear Members

Your Directors are pleased to present the Eighty Seventh (87th) Annual Report together with the Audited Financial Statements of the Company for the Financial Year ended 31st March, 2026.

FINANCIAL HIGHLIGHTS

This discussion on the financial performance and results of operations of your Company for the year ended March 31, 2026, which are summarized below

(Rs. in lakhs, unless otherwise stated)

Particulars	2025-26	2024-25
Revenue from Operations	44,249	27,405
Other Income	990	749
Profit before Interest, Depreciation and Tax	2,596	(2,176)
Finance Cost	9,799	7,486
Depreciation	8,445	7,163
Profit/(Loss) before exceptional Items	(15,648)	(16,825)
Exceptional Item	-	626
Profit/(Loss) before Tax	(15,648)	(17,451)
Current Tax	-	-
Profit/(Loss) after Tax	(15,648)	(17,451)
Deferred Tax	(8,932)	(2,240)
Net Profit / (Loss)	(6,716)	(15,211)
Other Comprehensive Income	8	(15)
Total Comprehensive Income	(6,708)	(15,226)
Basic & Diluted Earnings per share of	(7.29)	(16.50)
Rs. 10/- each

SHARE CAPITAL

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

As on March 31, 2026, the paid-up equity share capital of the Company is at 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 employee s stock option scheme expect the above allotments. Your Company has also not bought back its own shares during the period under review.

DIVIDEND

Dividend has been considered by your Board taking into consideration the factors like overall profitability, cash flow, capital requirements and other business consideration as well as the applicable regulatory requirements read with the dividend distribution policy adopted by your company, which is available on your company s website and can be accessed at: https://www.andhracements.com/ACL-Dividend-Distribution-Policy.pdf

Considering the losses incurred, no dividend is proposed for the year.

TRANSFER TO RESERVES

No transfer to any reserve is proposed and accordingly, the entire balance available in the Statement of Profit and Loss is retained in it.

PLANT OPERATIONS

During the year under review, the Company re-commenced its Plant Operations/Grinding Operations from 12th April, 2023 at its Sri Durga Cement Works and since, then the plant has been operating successfully. The company s other Plant Visaka Cement Works (VCW) stopped the production operations, as the plant falls under city limits, making it difficult to run the plant.

STATUS OF MODERNISATION & EXPANSION PROJECT

Your board of directors at its meeting held on 24th January, 2024 has approved a proposal for the modernization/expansion project to enhance the clinker manufacturing capacity from 1.65 MTPA to 2.30 MTPA and the cement grinding capacity from 1.82 MTPA to 3 MTPA and also to install a new 6 stage preheater system along with necessary modifications / replacement of the existing equipment s to be in line with the enhanced facilities and to optimize the fuel cost at its plant situated at Dachepalli, Andhra Pradesh. 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 borrowing from banks/institutions.

The new 6 stage preheater construction has been completed and commissioned on 23rd October, 2025. With regard to the Cement Mill, civil works were under progress and complete building will be ready by May 2026. Fabrication works for ducting & bag filter were under progress. Main equipment s for the project were ordered and Indigenous equipment s & imported equipment s will be received in phased manner before end of June, 2026. The modernization/expansion project expected to be completed by the end of September 2026.

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 Rs.180 crores to part finance the above expansion and for upgradation as detailed above and also to achieve the Minimum Public shareholding of 25%, 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 company has received the necessary approvals from the concerned authorities for the Rights Issue and was valid till December 16, 2025. Due to the prevailing capital market conditions, the company has not moved forward with the proposed fund raising through Rights Issue. Your company has taken the necessary steps during the year to fulfill the minimum public shareholding in accordance with the said regulations.

OFFER FOR SALE (OFS) BY THE HOLDING COMPANY

During FY 2025-26, Sagar Cements Limited, promoter of the company, made an Offer for Sale (OFS) of equity shares through the stock exchange mechanism in compliance with SEBI guidelines and Rule 19A of the Securities Contracts (Regulation) Rules, 1957. SCL has divested part of its holdings, thereby reducing its stake from 90% to 75%. Consequently, the public shareholding in ACL increased to 25%, enabling our company to achieve the mandated Minimum Public Shareholding (MPS) requirement within the stipulated time period.

The Board of Directors of the Company, at its meeting held on March 30, 2026, has accorded its in-principle approval for the merger of our Company with its Holding Company viz., Sagar Cements Limited, which will be subject to necessary approvals as may be required from the regulatories and other concerned authorities.

SHIFTING OF REGISTERED OFFICE

In terms of Sections 12(4), 12(5), 12(6) & 13(4) of the Companies Act, 2013 and other applicable provisions, if any, the shareholders of the company, by passing a Special Resolution at the 86th Annual General Meeting held on 30th June, 2025, approved for shifting of the registered office of the Company from Sri Durga Cements Works, Sri Durgapuram, Srinagar Post, Dachepalli Mandal, Guntur District, PIN-522414, Andhra Pradesh to Plot No. 111, Road No. 10, Jubilee Hills, Hyderabad 500033, Telangana for the purpose of administrative and operational convenience.

Accordingly, necessary application was made to the Regional Director, Ministry of Corporate Affairs, Hyderabad, along with required documents for their approval for the shifting of Registered Office of the Company from the State of Andhra Pradesh to State of Telangana .

The Company has received an Order from the Regional Director, Hyderabad, Ministry of Corporate Affairs vide Order No: 24/RD (SER)/SEC-13(4)/AP to TG/2026/459, dated. May 4, 2026, approving the shifting of the Registered Office of the Company from the State of Andhra Pradesh to the State of Telangana .

The Board of Directors of the Company at its meeting held on 13th May, 2026 noted the above said Order and accorded its approval for shifting of the registered office of the Company to Plot No. 111, Road No. 10, Jubilee Hills, Hyderabad 500 033, Telangana, and filed the necessary e-forms with the Ministry of Corporate Affairs.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

In accordance with the provisions of Section 152 of the Companies Act, 2013, Mr. S.Sreekanth Reddy will be retiring by rotation at the ensuing Annual General Meeting and being eligible, offer himselves for re-appointment. Necessary resolutions seeking the approval of the member for the re-appointment have been incorporated in the notice of the annual general meeting of the company.

Except Mrs. S. Rachana, who is a director and major shareholder in R V Consulting Services Private Limited, whose transactions with the company have been reported under the related parties disclosure in the notes to the accounts, none of the other non-executive directors has had any pecuniary relationship or transactions with the company, other than the receipt of sitting fee for the meetings of the Board and Committees thereof attended by them.

INDEPENDENT DIRECTORS DECLARATION

The company has received necessary declarations from all the Independent Directors of the Company in accordance with Section 149 (7) of the Companies Act 2013, that they meet the criteria of independence as laid down in Section 149(6) of the said Act and Regulation 16 (1) (b) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ( SEBI Listing Regulations ). There has been no change in the circumstances affecting their status as an Independent Director during the year.

The Independent Directors have also confirmed that they have complied with Schedule IV of the Companies Act, 2013 and the Company s Code of Conduct.

The Board of Directors is of the opinion that all the Independent Directors possess requisite qualifications, experience and expertise in industry knowledge and corporate governance and they hold highest standards of integrity.

NUMBER OF MEETINGS OF THE BOARD

During the year 2025-26, six meetings of the board were held and the details of these meetings of the Board as well as its committees have been given in the corporate governance report, which forms part of the Annual Report.

BOARD EVALUATION

The Board of Directors have carried out an annual evaluation of its own performance and of its committees as well as its individual directors, on the basis of criteria such as composition of the board/committee structure, effectiveness, process, information flow, functioning etc.

RELATED PARTY TRANSACTIONS

All Related Party Transactions entered into during the financial year were on an arm s length basis and 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 Company s website at https://www.andhracements.com/ACL-Policy%20on%20Related%20Party%20 Transactions.pdf.

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.

AUDITORS

1. Statutory Auditors

M/s. B S R and Co, Chartered Accountants (Firm Registration No. 128510W), who were appointed as statutory Auditors of the company by the Shareholders at their 86th Annual General Meeting held on June 30, 2025 for a term of five years will be holding their said office from the conclusion of the said Annual General Meeting till the conclusion of the 91st Annual General Meeting to be held in the year 2030, at such remuneration as may be mutually agreed between the Board of Directors of the Company and the said Auditors.

Auditors Report

The Auditors Report does not contain any qualifications, reservations or adverse remarks and it is an unmodified one.

2. Cost Auditors

M/s. Narasimha Murthy & Co., Cost Accountants (FR No.000042), have been appointed as Cost Auditors of the company for the year ending 31st March 2027. A resolution seeking shareholders approval for ratification of the remuneration payable to the said Cost Auditors has been included in the notice of the AGM.

The reports submitted by the Cost Auditors are duly filed with the appropriate authorities under Section 148 of the Companies Act, 2013.

3. Secretarial Auditors

M/s. B S S & Associates, practicing Company Secretaries (Firm Registration No. 3744) who were appointed as Secretarial Auditors of the Company by the Shareholders at their 86th Annual General Meeting held on June 30, 2025 for a term of five years will be holding their said office from the conclusion of the said Annual General Meeting till the conclusion of the 91st Annual General Meeting to be held in the year 2030, at such remuneration as may be mutually agreed between the Board of Directors of the Company and the said Auditors.

Secretarial Auditors Report

In accordance with Section 204 (1) of the Companies Act, 2013, the report furnished by the Secretarial Auditors, who carried out the secretarial audit of the company under the said Section is given in the Annexure-B, which forms part of this report.

The said report does not contain any qualification reservation, or adverse remarks.

ANNUAL RETURN

The draft Annual Return in Form MGT-7 for the year ended 31st March, 2026 is available on the Company s website and link for the same is https://www.andhracements.com/ Investors.html.

PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS

The particulars of loans, guarantees and investments have been disclosed in the financial statements at appropriate places.

DISCLOSURE OF ACCOUNTING TREATMENT

The applicable Accounting Standards as notified from time to time under Section 133 of the Companies Act, 2013 read with Companies (Indian Accounting Standards) Rules, 2016 issued by the Ministry of Corporate Affairs, have been followed in preparation of the financial statements of the company.

RISK MANAGEMENT

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

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

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

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

CORPORATE SOCIAL RESPONSIBILITY

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

CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSION AND ANALYSIS REPORT

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

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

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the provisions of Section 134(5) of the Companies Act, 2013, your board of directors, to the best of their knowledge and ability confirm 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 have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company for the year ended 31st March, 2026 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 by the company and such internal financial controls were adequate and were operating effectively; and

f) the 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. Said policy is available on the Company s website www.andhracements.in

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.

STATE OF THE COMPANYS AFFAIRS

The Company is actively engaged in the business of manufacturing of cement and clinker.

CHANGE IN THE NATURE OF BUSINESS, IF ANY

There were no change in the nature of business of the company.

DETAILS OF REVISION OF FINANCIAL STATEMENT OR THE REPORT

There is no revision of financial statement or the Report.

SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES

The Company doesnt have any subsidiaries or joint ventures or associate Companies during the year.

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.

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

There were no Companies which have become or ceased to be its subsidiaries, 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 did not accept any deposits from public during the year.

DISCLOSURE ON DONATIONS TO POLITICAL PARTY

The company did not donate any amount to political parties during the FY 2026.

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.

CONVERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars required under Section 134 (3) (m) of the Companies Act, 2013 have been provided in the Annexure-D, which forms part of this Report".

POLICY ON PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE

Regarding the Sexual Harassment of Women at the workplace (Prevention, Prohibition & Redressal) Act, 2013, your company has an Internal Complaints Committee. No complaints were received or disposed of during the year under the above Act and no complaints were pending either at the beginning or at the end of the year. Your 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. ICC has its presence at corporate offices as well as at manufacturing units.

COMPLIANCE WITH THE DIGITAL PERSONAL DATA PROTECTION ACT, 2023

The Digital Personal Data Protection Act, 2023, enacted by Parliament and operationalised through the Digital Personal Data Protection Rules, 2025, establishes a comprehensive legal framework governing the collection, processing, storage and protection of personal data in India. As an organisation that processes personal data of its employees, contractual workers, vendors, dealers, logistics partners and other stakeholders in the ordinary course of business, the Company is a Data Fiduciary under the Act and bears direct accountability for the lawful, purposeful and secure handling of such data.

During the financial year under review, the Company has initiated a structured DPDPA compliance programme. Key steps undertaken include the mapping of personal data across operating departments, the designation of departmental Data Points of Contact, a review of vendor contracts to incorporate data protection clauses, and the establishment of internal incident reporting protocols. Awareness sessions have been conducted for management personnel across operating locations to embed data protection responsibilities at the operational level.

The Board of Directors regards compliance with the Act as an integral dimension of the Companys governance framework and its commitment to responsible stewardship of stakeholder trust. The compliance programme will be reviewed and strengthened on a continuing basis, and the Company remains committed to building a culture of data responsibility across all levels of its organisation.

UTILIZATIONS OF FUNDS RAISED THROUGH ISSUE OF EQUITY SHARES

During the financial year 2025-26, no funds were raised through Rights Issue, Preferential Issue etc. and hence there is no requirement to provide any explanation as required under Regulation 32(4) of the SEBI (LODR) Regulations, 2015.

CREDIT RATING

Details of Credit Rating obtained by the company have been given in the Report on the Corporate Governance, which forms part of the Annual Report.

POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION AND OTHER DETAILS

The company s policy on directors appointment and remuneration and other matters provided in Section 178 (3) of the Companies Act, 2013 have been disclosed in the corporate governance report.

Under Section 178 (3) of the Companies Act, 2013, the Nomination and Remuneration Committee of the board has adopted a policy for nomination, remuneration and other related matters for directors and senior management personnel. A gist of the policy is available in the Corporate Governance Report.

FUTURE OUTLOOK, TREATS AND OPPORTUNITIES

Details relating to future outlook, treats and opportunities have been given in detail in the Management Discussion and Analysis Report, which is part of the Directors Report.

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, Stakeholder s Relationship Committee and Risk Management Committee. The composition and other details of these committees have been given in the Report on the Corporate Governance pursuant to Schedule V read with Regulation 34 of the SEBI Listing Regulations, which forms part of the Annual 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 company s projections, expectations and hopes are forward looking. Though these are based on reasonable assumptions, their actual results may differ.

ACKNOWLEDGEMENT

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

	For and on behalf of the Board
	K.V. Vishnu Raju
Place: Hyderabad	Chairman
Date: May 13, 2026	(DIN: 00480361)