Directors Report of Heidelberg Cement India Ltd.

Mar 31, 2025

The Directors are pleased to present the 66^th Annual
Report together with the audited financial statements of
HeidelbergCement India Ltd. (the Company) for the financial
year ended 31 March 2025 (FY25).

THEYEAR IN RETROSPECT

The recent conflicts in West Asia and the 3-year hostilities
between Russia and Ukraine where other countries were
either involved directly or indirectly have negatively impacted
the expected recovery. World bank reported a global
slowdown of economic growth to 2.79% against the expected
>3% for 2024. Another hanging uncertainty is over the US
Tariffs where negotiations are ongoing. The US being the
largest consumer and having a debt level above ~120% of its
GDP is facing problems in servicing, hence is resorting to
higher tariffs increasing defense budget of NATO to tide over
the crisis. Since west Asia is the largest source of crude oil and
gas, it has come under threat of disruptions and the warring
nations forcing the energy prices to rise.

In the home front, the Gross Domestic Product (GDP) of India
grew by 6.5%. The growth was supported by robust private
consumption which was evident even in rural areas, stable
investment activity and increased net exports. On the supply
side, the growth has been driven by the construction sector
and services sector. Year on year consumer price inflation was
? in FY nnmnarprl tn 3 1 in FY

The macro indicators of India are quite strong given the low
retail inflation, low interest rates, prospects of good monsoon,
high focus on defense and general exports, low impact of
crude oil prices, and forays into high-value, high-demand
products such as electronics.

There are ominous signs in FY 26, with the year starting off
with conflict in the western borders followed by fracas in the
eastern sector as well. The pitch for high tariffs from the US
has impacted the FDI and domestic investor confidence.
Against all this noise the prospects for cement industry are
positive with mega dam and irrigation projects announced in
Jammu & Kashmir, Punjab, Rajasthan and Himachal Pradesh.
Expressways such as Delhi-Mumbai, Bharatmala Pariyojana,
gati shakti, high speed railways, dedicated freight corridors,
ports, airports etc. The most ambitious project is the
development of industrial corridor and smart cities mission
under the aegis of National Industrial Corridor Development
Corporation (NICDC). These are positive signs for the future.

FINANCIAL HIGHLIGHTS / REVIEW OF OPERATIONS

During FY25, the Company sold 4.52 million tonnes of cement
& clinker compared to 4.81 million tonnes of cement & clinker
in FY24, a decrease of 6.1%.

A snapshot of the Company’s financial performance for FY25
vis-a-vis FY24 is as under: -

3articulars	FY25	FY24
Revenue from Operations	21,488.8	23,657.8
ther Income	454.7	545.2
otal Revenue	21,943.5	24,203.0
Earnings before Interest, Tax, Depreciation and Amortization (EBITDA)- ncluding other income	2,848.9	3,712.4
Depreciation and Amortization	1,097.9	1,096.7
inance Cost	292.9	347.6
3rofit before Tax	1,458.1	2,268.1
otal Tax expense	390.6	590.6
Met Profit for the year	1,067.5	1,677.5

On the operations front, your Company constantly
endeavours to benefit from cost economics, innovative
procurement strategies, process digitalization, Group’:
global expertise in sourcing etc. Your Company has always
strived to optimise costs despite all odds. During the yea
under review, the price of domestic coal dropped mainly due
to consuming washery coal. The domestic coal supply
situation also improved due to opening up of new coal mines
but the quality of coal supplies were not consistent. The
softening of global crude price led to further correction o
petcoke price. We identified new suppliers & contractors

participated in online biddings, developed alternatives for
OEMs and carried out various works inhouse to reduce costs.
Your Company also implemented SAP Ariba buying which
has transformed traditional procurement into digital sourcing.

Digitalization has become an integral part to our civilization
and therefore, business cannot remain an exception. At
HeidelbergCement, we have continued to implement
digitalization programs at our manufacturing processes,
sales and marketing, Finance, Procurement etc., with a view
to augment efficiency and reduce human errors.

In view of aligning with the Group’s goal of Carbon Net Zero, the
Company endeavours to reduce dependency on conventional
fuels by increasing usage of Alternative Fuels to replace fossil
fuels. With continuous investment in technology and
modifications, your Company achieved TSR (Thermal
Substitution Rate) of 8% with an ambitious target of >35% by
2030. Towards sustainability, we are ensuring uninterrupted
supply of Flyash with almost 100% Flyash based PPC cement
reducing clinker incorporation to that extent. We are also using
other byproducts such as Redmud and slag both of which are
engineering waste and byproducts of other industries
possessing cementitious qualities. In addition to 12 MW Waste
Heat Recovery Power Plant and 5.5 MW Solar Power in Damoh,
Company also entered into long term Power Purchase
Agreement for 15MW Solar power for Jhansi Plant and 13.5 MW
Hybrid Power at Damoh resulting into 36% green power during
the FY2024-25 (increased from 31 % during FY2023-24).

The cement industry is highly competitive, with companies
constantly devising strategies to differentiate their products
and grab the attention of customers. Although our ''mycem''
brand holds a valued reputation, we felt it necessary to amplify
its distinct selling points more effectively. Against this
backdrop, we strived for establishing a sharper identity and
effectively communicating our values and strengths to
customers. Accordingly, we embarked on a brand refresh
programme which was driven by rigorous market research
and expert insights. As a result of all these efforts we have
developed a new brand identity which harnesses on the
perception of strong German quality and rich legacy of 150
years of Heidelberg Materials Group. The new brand identity
has enabled us to differentiate our value proposition in the
eyes of consumers and ensure that our brand achieves
prominent top-of-mind recall among customers. The
Company year has also launched Water Repellent cement
named Power Shield in starting of year 2024 which
commands 15% premium over normal PPC. The initial
feedback and off-take of Power Shield from customers are
very promising.

Alongside the brand refresh, we also launched a new sales
and marketing excellence project called ''Project Rise'' during
the year 2023-24 which is a progressive initiative aimed at
increasing sales volume and improving price positioning
through sales excellence. The project targets to improve the
market reach, counter loss of market share, enhance service

excellence, generate demand, and increase effectiveness of
sales force. The benefits derived so far from the brand refresh
programme and the ''Project Rise'' are encouraging.

RESERVES AND APPROPRIATIONS

The amount available for appropriation including surplus for the
year stood at INR 8,952.3 million (31 March 2024: INR 9,472.2
million). The Directors propose this to be appropriated as
under:-

Particulars	2024-25	2023-24
Dividend	1,812.9	1,586.3
Surplus Carried to Balance sheet	7,139.4	7,885.9
Total	8,952.3	9,472.2

DIVIDEND

The Board has recommended dividend of INR 7 per share
(70%) for FY25, subject to the approval of the shareholders at
the ensuing AGM (Dividend paid during FY24 was INR 8 per
share). The proposed dividend for FY25 will absorb INR
1586.3 million. Therefore, in accordance with the provisions of
the Companies (Declaration and Payment of Dividend) Rules,
2014, the Board has proposed to withdraw an amount of INR
518.8 million from the accumulated profits of the past financial
years.

In accordance with the provisions of the Income Tax Act, 1961
the aforesaid dividend will be taxable in the hands of
shareholders but liable for Tax Deduction at Source (TDS) by
the Company at the applicable rates.

Dividend Distribution Policy

Regulation 43A of SEBI Listing Regulations, requires top 1000
listed companies based on market capitalization to formulate
a Dividend Distribution Policy. In compliance with the said
requirement, the Board of Directors has formulated a
Dividend Distribution Policy and the same is posted on the
Company’s website. The web-link to access the said policy is
as follows:

https://www.mycemco.com/sites/default/files/PDF/Policies/HCIL_Dividend_Distribution_Policy.pdf

Unclaimed Dividends

The respective due dates on which unclaimed amounts of
dividends pertaining to the prior years will be transferred to
‘Investor Education and Protection Fund’ (IEPF), constituted
by the Ministry of Corporate Affairs, are given below:

Sr. No.	Financial Year	Dividend Per Share (INR)	Date of declaration	Date of transfer to IEPF
1	FY2017-18*	2.50	21 September 2018	27 October 2025
2	FY2018-19	1.00 (Interim)	25 October 2018	30 November 2025
3	FY2018-19	3.00 (Final)	19 September 2019	24 October 2026
4	FY2019-20	1.50 (Interim)	23 November 2019	28 December 2026
5	FY 2019-20	6.00 (Final)	18 September 2020	21 October 2027
6	FY 2020-21	8.00	27 September 2021	01 November 2028
7	FY2021-22	9.00	08 September 2022	12 October 2029
8	FY2022-23	7.00	27 September 2023	30 October 2030
9	FY2023-24	8.00	25 September 2024	31 October 2031

* The Shareholders whose dividend for FY2017-18 has remained unclaimed and have also not claimed the same for seven consecutive years, the unclaimed
dividend along with its underlying shares will be transferred to Investor Education and Protection fund (IEPF) Authority.

ENVIRONMENTAL SUSTAINABILITY

Your Company’s goals and objectives of operating
sustainably are aligned with Heidelberg Materials. The dual
objective is to not only mitigate the climate change impact but
also create opportunities towards achieving future carbon
neutrality goals through interventions in energy, raw
materials, waste management etc.

The Company has been awarded with "SANRAKSHAN"
Award in Cement sector for its exemplary contributions to
Plastic Waste Management and Sustainability initiatives
beyond the compliances. The Company focuses to use
Flyash as well as slag in producing PPC and PSC cement
respectively. As an alternative raw material, we have used Red
mud, thus, reducing limestone consumption, preserving
limestone reserves for posterity.

The Company has made significant progress on the energy
transition journey by increasing the use of green energy and
significantly invested in AFR feeding system to improve TSR
by using more than 200 MT MSW per day and big support to
ULBs by disposing off legacy waste.

In the mining operations, the Company lays special emphasis
on soil management, pollution control, biodiversity
conservation, maintaining water balance, and promoting safe
mining practices. Post mining, the land is reclaimed through
back-filling and afforestation by planting trees like Banyan,
Arjun, Golden Bamboo, Pilkhan, Neem, Sheesham, Kadamb,
Indian Rosewood etc. Some of the mined areas have been
developed into large water reservoirs that have become a
boon for the villagers since the harvested rainwater not only
recharges the ground water leading to significant
improvement in water table of the area but also serves their
irrigation needs. As a result of these actions, Patharia
limestone mines is consistently getting Five Star Rating from
Indian Bureau of Mines (IBM) ever since the concept of Five
Star Rating was introduced by IBM.

CSRAPPROACH

The Company is committed to make a sustainable impact on
the lives of the local communities in the areas where it
operates through its commitment to improve education,
enhancing rural infrastructure, and providing better healthcare
services. By promoting local participation, the Company
strengthens its bond with local communities for economic and
social development. Our approach is to align our initiatives
and efforts with key stakeholders like village institutions, gram
panchayats and local bodies of government. During FY25, the
Company has spent INR 49.86 million on various CSR
activities / projects exceeding the obligations pursuant to
Section 135 of the Companies Act, 2013.

The transformation of rural schools in Damoh, Jhansi and
Ammasandra in association with the Education Department
has always been a top priority. Through this initiative, the
basic infrastructure of 11 government schools was upgraded,

benefiting over 6,500 students and 45 teachers. Four new
classrooms were built, and extensive repair and renovation
work was carried out in some schools while in few others
existing classrooms were upgraded into digital classrooms.
Scholarships were given to meritorious students to facilitate
their higher education. Educational kits and uniforms were
also distributed to students.

The Company endeavours to bring a sustainable change in
the quality of life of neighbourhood community. As part of this
effort, we have encouraged farmers to adopt natural farming
practices. In Jhansi, we successfully motivated 100 farmers to
transform to natural farming methods.

The Company has partnered with BAIF Institute to support
animal husbandry project as a supplementary income source
for rural communities, through this initiative facilities i.e., cattle
rearing, vaccination, and artificial insemination etc. are being
providing for farmers. Through this initiative, 500 families
across 10 villages in Damoh have benefited.

We believe in entrepreneurial ability of rural youth and
endeavour to make them self-reliant by developing their skills.
Quality training that covers various areas of trade is
tremendously beneficial. To guarantee this, we have
partnered with the expert NGO, which offered various courses
to develop skills in many fields i.e., sewing and stitching,
computer operations, production of bags and garments, etc.
These courses are run on a regular basis, and participants are
enrolled for three-months certificate course. These courses
are being conducted at our skill development centres known
as "Sakshamta Vikas Kendra" in Jhansi and Damoh. During
FY25, training was imparted to 300 rural youth.

We organize health check-up camps at regular intervals to
meet communities'' general and specific needs. Under our
healthcare program, our mobile medical van team has
regularly organized rural healthcare camps.

The Company persistently helps in advancement of
infrastructure surrounding its plants and mines. This includes
construction of durable concrete roads, efficient drainage
systems, access to clean drinking water, installation of solar
lights and high mast lights, establishment of cremation
grounds, community centres, health centres, and the
development of an herbal park in Damoh, among other
initiatives.

The Report on CSR activities in the format prescribed by the
Ministry of Corporate Affairs is annexed herewith as
‘Annexure - A’.

OCCUPATIONAL HEALTH & SAFETY

Occupational health and safety is a core value of our
Company, and safety is at the heart of everything we do. The
day at the plants begins with safety gate meetings, where
important safety topics are discussed, along with a safety
prayer and pledge. We believe that it''s the ''smiles that will take
us miles’.

Safety conversations and safety zones are used to engage
employees and nurture a safety culture in all aspects of
operations. Safety zones have been established at all plants,
with cross-functional teams in place.

The Heidelberg Materials Group’s cardinal norms, guidelines,
standards, and legal requirements, along with the stipulations
under ISO 45001 - Occupational Health and Safety
Management System, are being adhered to at the plants.
Employees have received safety induction training, refresher
courses, and job-specific training, such as scaffolding safety,
working at heights, and working in confined spaces, etc.

All plants ensured the highest safety standards by
implementing the following Health and Safety Action Plans in
2024-25:

• Safety interlocked guards

• Process equipment audit

• Safety conversations / Dynamic risk assessments

• Consequence management procedure

• H&S competency Training

• Clean site, safe site

• Digital logistics management

National Safety Week was celebrated from March 4^th to 11^th,
2025, in a grand manner across all plants to enhance safety
awareness. A schedule of twenty-four critical safety hazards
relevant to the cement industry was compiled. Each month, a
safety theme is chosen, and its key aspects are discussed to
emphasize the importance of the activity and foster a safety¬
conscious culture within the organization. Truck drivers were
also trained in defensive driving techniques. Monitoring of the
workplace for noise, particulate matter, free silica, and
illumination levels is carried out in accordance with regulatory
norms. All plants are ISO 45001 certified.

STATUS OF AMMASANDRA PLANT

The Company is in the process of dismantling and disposal of
Ropeway and clinker plants, the mine closure process has
been initiated, and we are looking for buyers for the surplus
land of ~150 acres outside the plant. Initiated land survey by
govt authorized surveyor.

AWARDS AND ACCOLADES

The Company continues to pursue excellence in all areas of
its operations as evident from the recognition in the form of
awards and honours.

• Golden Peacock Occupational Health & Safety Award -
2024, awarded to the Damoh Plant.

• Narsingarh Plant received 5 Star rating for sustainable
development, consecutively for 8 years since the
inception of the award in 2015-2016, by Indian Bureau of
Mines - Ministry of Mines.

• The Company received the CSR Impact National Award
2024 for the Best CSR Project of the Year during the CSR

Connect Summit on 23rd November, 2024 held at New
Delhi, organised by EU Media and powered by Force
Motors.

• The Company has been awarded with "SANRAKSHAN"
Award in Cement sector for our exemplary contributions to
Waste Management and sustainability initiatives beyond
the compliances.

• Jhansi plant has been awarded by the Bureau of Indian
Standards with ‘Top Performer in the Industry’ during
‘Manak Mahotsav-2024’ for maintaining best cement
quality with zero rejection.

• Received ‘Bhamashah Award & Certificate’ by the State
Tax & Cultural Department for depositing highest tax in
Jhansi Division.

• Narsingarh Plant received 5 Star rating award under the
category of ‘Amrit Kalash Pushkar’ category during Mines
Environment & Conservation Week organised by Indian
Bureau of Mines - Ministry of Mines.

• Bureau of Indian Standards issued ‘Licensee with Zero
Non-Conformities in last 3 years’ to Ammasandra Plant for
being one in the industry whose product has not failed the
regular BIS testing in the last 3 years.

• ‘Excellence in CSR & Sustainability’ award was given
under the integrated village development category during
the 11^th Edition of ‘National Awards for Excellence in CSR
and sustainability’ organised by the World Sustainability
Congress.

• ‘Prithvi Awards 2024’ was given for exemplary ESG
initiatives by the ESG Research Foundation.

CORPORATE GOVERNANCE

The essence of Corporate Governance lies in promoting and
maintaining integrity, transparency, and accountability. The
Company believes in creating and nurturing relationships
based on trust and transparency with all its stakeholders. The
governance framework enjoins the highest standards of
ethical and responsible conduct. All Directors and employees
consider governance as their personal responsibility and
conduct themselves in accordance with the Code of Conduct
set out by the organization.

The Companies Act, 2013 and SEBI (Listing Obligations and
Disclosure Requirements) Regulations, 2015 (‘‘SEBI Listing
Regulations’’) have reinforced the governance regime in
India. The Company is compliant with the corporate
governance requirements as prescribed under the said
Regulations. The Company has also ensured compliance
with applicable Secretarial Standards issued by the Institute
of Company Secretaries of India pursuant to Section 118(10)
of the Companies Act, 2013.

In terms of Regulation 34(3) read with Schedule V of the SEBI
Listing Regulations, a Corporate Governance Report
pertaining to FY25 forms part of this Annual Report. Pursuant
to the provisions of the SEBI (Listing Obligations and

Disclosure Requirements) Regulations, 2015, a certificate
from M/s. Nityanand Singh & Co., a firm of Company
Secretaries in Practice, confirming compliance with the
conditions of Corporate Governance is also annexed to the
Corporate Governance Report.

A certificate furnished by Mr. Joydeep Mukherjee, Managing
Director and Mr. Anil Kumar Sharma, Chief Financial Officer in
respect of the financial statements of the Company for the
financial year ended 31 March 2025 is annexed as ‘Annexure-
B’ to this Report.

Management Discussion and Analysis Report is also given as
an addition to this Report.

BUSINESS RESPONSIBILITY AND SUSTAINABILITY
REPORT

Business Responsibility and Sustainability Report (BRSR), as
stipulated under Regulation 34(2)(f) of SEBI Listing
Regulations, describing the initiatives taken by the Company
from Environment, Social and Governance (ESG) perspective
forms part of this Annual Report.

DIRECTORS

Resignation of Non-Executive Director

Ms. Soek Peng Sim (holding DIN: 06958955) resigned from
the position of Non-Executive Director of the Company with
effect from close of business hours on 28 May 2025. The
Board placed on record its appreciation for the valuable
guidance and contributions made by Ms. Soek Peng Sim.

Appointment of Non-Executive Director

The Board of Directors in its meeting held on 28 May 2025,
upon recommendation by the Nomination and Remuneration
Committee (NRC), re-appointed Mr. Vimal Kumar Jain (DIN:
09561918) as Whole-Time Director of the Company, liable to
retire by rotation, for a term of three years from 10 June 2025
till 09 June 2028 and appointed Mr. Vimal Kumar Choudhary
(DIN:02370072) as an Additional Director in the category of
Non-Executive & Non-Independent Director of the Company.
The Notice of the postal ballot for taking the shareholders’
approval in this regard was approved in the same meeting.

Retirement by rotation

Mr. Roberto Callieri, Non-Executive Director retires by rotation
at the ensuing AGM and being eligible has offered himself for
reappointment. His brief profile is given in the Notice of AGM.
The Board hereby recommends his reappointment.

Declaration of Independent Directors

Ms. Jyoti Narang and Mr. Atul Khosla, Independent Directors
on the Board have submitted declarations to the Company
that they fulfill the criteria of independence as laid down under
Section 149(6) of the Companies Act, 2013 and Regulation 16
of the SEBI Listing Regulations.

The Board of Directors, based on the declarations received

from the Independent Directors after duly verifying the
veracity of such declarations, hereby confirms that the
Independent Directors fulfill the conditions of independence
specified in the SEBI Listing Regulations and are independent
of the management of the Company.

DISCLOSURES UNDER THE COMPANIES ACT, 2013

Number of Board Meetings: During FY25, five Board
Meetings were held. The details of the same are given in the
Corporate Governance Report.

Composition of Audit Committee: The Audit Committee of
the Company as on 31 March 2025 comprised three
members namely, Mr. Atul Khosla (Chairman of the
Committee), Ms. Jyoti Narang and Ms. Soek Peng Sim. Due to
the resignation of Ms. Soek Peng Sim, the Board of Directors
in its meeting held on 28 May 2025 re-constituted the
composition of the Audit Committee and appointed Mr. Vimal
Kumar Choudhary as a member of the Audit Committee w.e.f.
28 May 2025.

Board Evaluation: In accordance with the provisions of the
Companies Act, 2013 and the SEBI Listing Regulations, the
Board has carried out an annual evaluation of its own
performance, that of the directors individually and that of all
the Committees constituted by it, namely, the Audit
Committee, Nomination and Remuneration Committee,
Corporate Social Responsibility Committee, Stakeholders
Relationship Committee and Risk Management Committee.
The manner in which the performance evaluation has been
carried out has been explained in the Corporate Governance
Report.

Policy for appointment and remuneration of directors: The
Board has on the recommendation of the Nomination and
Remuneration Committee, formulated a Nomination and
Remuneration Policy. The policy inter alia lays down the
criteria for determining qualifications, attributes and
independence of potential candidates for appointment as
directors and determining their remuneration. The salient
features of the Policy have been provided in Corporate
Governance Report. The said Policy has been posted on
website of the Company and the weblink to access the said
policy is as follows:

https://www.mycemco.com/sites/default/files/PDF/Policies/Nomination_and_Remuneration_Policy.pdf

The Board has also adopted a ‘Board Diversity Policy‘ which
requires the Board to ensure appropriate balance of skills,
experience and diversity of perspectives in its own
composition.

Annual Return: The Annual Return of the Company for FY24
already filed with the Ministry of Corporate Affairs (MCA) as
well as the draft Annual Return for FY25 (which will be filed
with MCA after the ensuing AGM) are available on the website
of the Company and the weblink to access the same is as
follows:

https://www.mycemco.com/financial-results

After the filing of Annual Return for FY25 with MCA, the
aforesaid draft version of the Return will be replaced with the
final version.

Key Managerial Personnel: Details of Key Managerial
Personnel of the Company are given below:

• Mr. Joydeep Mukherjee, Managing Director;

• Mr. Vimal Kumar Jain, Whole-time Director;

• Mr. Anil Kumar Sharma, Chief Financial Officer; and

• Mr. Ravi Arora, Vice President- Corporate Affairs &
Company Secretary.

LOANS, GUARANTEES, SECURITY, AND INVESTMENTS

During FY25, the Company has acquired 63,77,800 equity
shares of Continuum MP Windfarm Development Private
Limited (CMWDPL) constituting 3.51% of the fully diluted
paid-up equity share capital of CMWDPL for the purpose of
procuring overall 13.5 Megawatt hours per annum of hybrid
(solar wind) for Damoh plants on group captive basis.

The Company has not given any loan, guarantee or security
pursuant to the provisions of Section 186 of the Companies
Act, 2013.

The details of Outstanding Loans and Investments made by
the Company as on 31 March 2025 are given in Notes to the
financial statements.

General: The Directors state that no disclosure or reporting is
required in respect of the following items as there were no
transactions with respect to these items during FY25:

• Details relating to deposits covered under Chapter V of
the Companies Act, 2013.

• Issue of equity shares with differential rights as to
dividend, voting or otherwise.

• Issue of stock options or sweat equity shares.

• No significant or material orders were passed by the
Regulators or Courts or Tribunals impacting the going
concern status & the Company’s operations in future.

• Neither any application was made, nor any
proceeding is pending against the Company under
the Insolvency and Bankruptcy Code, 2016.

• Details of difference between amount of the Valuation
done at the time of One Time Settlement and the
Valuation done while taking loans from the Banks or
Financial Institution along with the reasons thereof: -
The Company has not defaulted in the repayment of
loans to the Banks or Financial Institutions.
Accordingly, disclosure relating to one-time
settlement with the Banks or Financial Institutions is
not applicable

INTERNAL FINANCIAL CONTROLS

The Company has in place relevant internal controls, policies,
and procedures to ensure orderly and efficient conduct of its
business. Standard Operating Procedures (SOPs) and Risk
Control Matrix (RCM) have been designed for critical
processes across all operations. The internal financial
controls are tested for operating effectiveness through
management’s ongoing monitoring and review processes,
and independently by the internal auditors. In our view the
internal financial controls are adequate and are operating
effectively.

DIRECTORS’ RESPONSIBILITY STATEMENT

To the best of their knowledge and belief and according to the
information and explanations obtained by them and based on
the assessment of the management, the Board of Directors
makes the following statements in terms of Section 134 of the
Companies Act, 2013:

(a) that in the preparation of the annual accounts for the
financial year ended 31 March 2025 the applicable
accounting standards have been followed along with
proper explanation relating to material departures, if any;

(b) that such accounting policies have been selected and
applied consistently and judgments and estimates
have been made that are reasonable and prudent so
as to give a true and fair view of the state of affairs of the
Company as at 31 March 2025 and of the profit of the
Company for the financial year ended on that date;

(c) that 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;

(d) that the financial statements for the financial year
ended 31 March 2025 have been prepared on a ‘going
concern’ basis;

(e) that proper internal financial controls were in place and
that such internal financial controls were adequate
and were operating effectively; and

(f) that systems to ensure compliance with the provisions
of all applicable laws were in place and were adequate
and operating effectively.

RELATED PARTY TRANSACTIONS

All transactions entered between the Company and its related
parties during the financial year ended 31 March 2025 were in
the ordinary course of business and on an arm’s length basis.
The particulars of such transactions have been disclosed in
notes to the financial statements for FY25. During the year
under review, the Company has not entered in any related
party transaction exceeding the threshold limit provided
under the Companies Act, 2013 / Rules made thereunder and
SEBI Listing Regulations. Omnibus approvals are obtained
for the transactions which are foreseeable and are repetitive in
nature. A statement of all the related party transactions is
placed before the Audit Committee on a quarterly basis,
specifying the nature and value of the transactions.

The Company has in place a Policy on Related Party
Transactions and a framework for the purpose of assessing
the basis of determining the arm’s length price of relevant
transactions. The said policy and the framework are reviewed
by the Audit Committee and the Board of Directors from time
to time. The same has been posted on the Company’s
website. The web-link to access the said policy & framework is
as follows:

https://www.mycemco.com/sites/default/files/PDF/Policies/Related_Party_Transaction_Policy.pdf

The Company does not have any material related party
transaction during the year therefore the disclosure of Related
Party Transactions as required under Section 134(3)(h) of the
Act in Form AOC-2 is not applicable for FY25 and does not
form part of this report.

RISK MANAGEMENT

The Board of Directors of the Company has constituted a Risk
Management Committee for reviewing and monitoring the
risk management plan of the Company and ensuring its
effectiveness. The business risks have been classified under
the broad heads - strategic, operational, financial, and legal &
compliance risks. The Company’s Risk Management Policy
lays down a bottom-up process comprising risk identification,
analysis and evaluation, treatment and controlling. The Chiel
Risk Officer and the Risk owners identify and analyse risks in
their area of operations. The risks faced by the Company, their
impact and the mitigation measures are categorised as high,

medium and low risks which are then reviewed by the Senior
Management and the critical ones are placed before the Risk
Management Committee/Board of Directors for review.

The Board provides oversight and reviews the Risk
Management Policy. The Board along with Risk Management
Committee is responsible for framing, implementing and
monitoring the risk management plan of the Company. During
the year under review, Internal auditors had also tested the
Risk & Control Matrices for various processes as a part ol
Internal financial control framework.

The details of the functioning of the Risk Management
Committee and frequency of its meetings are provided in
Report on Corporate Governance forming part of this Annual
Report.

VIGIL MECHANISM / WHISTLE BLOWER POLICY

The Company has established a vigil mechanism / whistle
blower policy to deal with the instances of unethical
behaviour, fraud, conflict of interest, mismanagement, and
violation of the Code of Conduct. During FY25, no complaint
was received under the Vigil Mechanism. The details of the
vigil mechanism are given in the Corporate Governance
Report and a copy of the same has been posted on the
Company’s website. The weblink to access the same is as
follows:

PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT
THE WORKPLACE

The Company is compliant with the provisions of the Sexual
Harassment of Women at Workplace (Prevention, Prohibition
and Redressal) Act, 2013, which aims to protect women at
workplace against any form of sexual harassment and prompt
redressal of any complaint. During Disclosures in relation to
the Sexual Harassment of Women at Workplace (Prevention,
Prohibition and Redressal) Act, 2013 have been provided in
the Report on Corporate Governance as well.

Status of complaints as on 31 March 2025:

S.no	Particulars	No. of Complaints
1.	Number of complaints of sexual harassment received in the year	0
2.	Number of complaints disposed off during the year	0
3.	Number of cases pending for more than ninety days	0

STATEMENT ON COMPLIANCE WITH THE MATERNITY
BENEFIT ACT, 1961

The Company is committed to upholding the rights and
welfare of all employees in accordance with applicable labour
laws and statutory regulations. The Company fully complies
with the provisions of the Maternity Benefit Act, 1961, as
amended, across all its locations in India. All eligible women
employees are entitled to maternity benefits, as prescribed
under the Act. In addition, Company has taken proactive
steps to promote a supportive and inclusive work
environment for expecting and new mothers by ensuring
timely disbursal of maternity benefits and providing safe and
hygienic workplaces.

AUDITORS

In accordance with the provisions of Section 139(1) of the
Companies Act, 2013 the members at the 63rd Annual
General Meeting (AGM) of the Company held on 08
September 2022 had reappointed M/s. S.N. Dhawan & Co.
LLP, Chartered Accountants, as statutory auditors of the
Company for second term to hold office up to the conclusion
of the 68th AGM i.e., for conducting statutory audits
commencing from FY23 until FY27.

The observations of the Auditors in their report on Financial
Statements read with the relevant notes are self-explanatory.
The Independent Auditors'' Report does not contain any
qualification, reservation or adverse remarks. Further, there
were no frauds reported by the Statutory Auditors to the Audit
Committee or the Board under Section 143(12) of the
Companies Act, 2013.

COST AUDIT

The Company is maintaining cost records in accordance with
the provisions of Section 148 of the Companies Act, 2013 and
the Rules made thereunder. The Cost Audit for FY24 was
conducted by M/s. R.J. Goel & Co., Cost Accountants, Delhi.
The Cost Audit Report was duly filed with the Ministry of
Corporate Affairs, Government of India. The Audit of the cost
accounts of the Company for FY25 is also being conducted
by the said firm and the Report will be filed within the
stipulated time.

In accordance with Section 148 of the Companies Act, 2013
and the Companies (Cost Records and Audit) Rules, 2014,
the Board of Directors has on the recommendation of the
Audit Committee, appointed M/s. R. J. Goel & Co., Cost
Accountants as Cost Auditor of the Company for FY25 on a
remuneration of INR 2,75,000. Pursuant to Section 148(3) of
the Companies Act, 2013, a resolution seeking Members’
ratification for the remuneration payable to M/s. R.J. Goel &
Co., Cost Accountants for FY26 is included in the Notice
convening the AGM. The Board recommends the aforesaid
resolution for approval of the members.

SECRETARIAL AUDIT

The Board had appointed M/s. Nityanand Singh & Co., a firm
of Company Secretaries in Practice as Secretarial Auditor for
carrying out secretarial audit of the Company for the financial
year ended 31 March 2025 in accordance with the provisions
of Section 204 of the Companies Act, 2013 and the
Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014. The Report of the Secretarial Auditor
is annexed herewith as ‘Annexure-C’. The Secretarial Audit
Report does not contain any qualification, reservation, or
adverse remarks.

Secretarial Compliance Report: Under Regulation 24A of
SEBI Listing Regulations it is mandatory for listed companies
to annually submit a Secretarial Compliance Report to stock
exchanges. M/s. Nityanand Singh & Co. has furnished
Secretarial Compliance Report for FY25. The said Report
does not contain any qualification, reservation, or adverse
remarks. The said Report has been filed with Stock
Exchanges and has also been placed on website of the
Company. The web link to access the same is as under:

https://www.mycemco.com/sites/default/files/PDF/Secretarial_Compliance_Report/Annual%20Secretarial%20Compliance%20Report_2024_2025.pdf

PARTICULARS OF EMPLOYEES

The particulars of employees required pursuant to Section
197 of the Companies Act, 2013 read with Rule 5(1) of the
Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014 form part of this Report and are
annexed as ‘Annexure-D’. In accordance with the provisions
of Section 136 of the Act, the Board’s Report and the financial
statements for the financial year ended 31 March 2025 are
being sent to the members and others entitled thereto,
excluding the details to be furnished under Rule 5(2) of the
Companies (Appointment and Remuneration of Managerial

Personnel) Rules, 2014. However, the information required
under aforesaid Rule 5(2) is available for inspection by the
members at the Registered Office of the Company during
business hours on all working days up to the date of the
ensuing Annual General Meeting. If any member desires to
have a copy of the same, he may write to the Company
Secretary in this regard.

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION
AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars relating to conservation of energy, technology
absorption and foreign exchange earnings and outgo, as
required under Section 134(3)(m) of the Companies Act, 2013
read with Rule 8 of the Companies (Accounts) Rules 2014,
form part of this Report and are annexed as ‘Annexure-E’.

CHANGE IN THE NATURE OF BUSINESS

There was no change in the nature of business of your
Company during the year.

DISCLOSURE UNDER SECRETARIAL STANDARDS

The Directors state that the Company has complied with all
the applicable Secretarial Standards issued by the Institute of
Company Secretaries of India. The details with respect to the
composition, terms of reference, number of meetings held,
etc. of the statutory committees of the Board of Directors are
included in the Report on Corporate Governance, which is
forming part of this Annual Report.

DISCLOSURE OF LOAN TAKEN FROM DIRECTORS

The Company has not taken any loan from the Directors of the
Company.

HOLDING, SUBSIDIARIES, JOINT VENTURES OR
ASSOCIATE COMPANIES

During the year under review, none of the Company become
the Subsidiaries / Associates and Joint Venture of the
Company. Therefore AOC-1 does not form part of this report.

ACKNOWLEDGEMENTS

Your Directors are thankful to all stakeholders including
Customers, Bankers, Suppliers, Dealers, and Contractors for
their continued assistance, co-operation, and support. The
Directors wish to place on record their sincere appreciation to
all employees for their commitment and continued
contribution to the Company. The Directors are grateful for the
confidence, faith and trust reposed by the shareholders in the
Company. We are thankful to various agencies of the Central
and State Government(s) for their continued support and
co-operation.

For and on behalf of the Board

Place: Gurugram Jyoti Narang

Date: 28 May 2025 Chairperson

---

Mar 31, 2024

(INR in Millions)
Particulars	FY24	FY23
Revenue from Operations	23,657.8	22,381.0
Other Income	545.2	452.9
Total Revenue	24,203.0	22,833.9
Earnings before Interest, Tax, Depreciation and Amortization (EBITDA) -
Including other income	3,712.4	2,941.4
Depreciation and Amortization	1,096.7	1,123.1
Finance Cost	347.6	460.6
Profit before Tax	2,268.1	1,357.7
Total Tax expense	590.6	366.0
Net Profit for the year	1,677.5	991.7

The Directors are pleased to present the 65^th Annual Report together with the audited financial statements of HeidelbergCement India Ltd. (the Company) for the financial year ended 31 March 2024 (FY24).

THEYEAR IN RETROSPECT

During FY24, the global economic activity witnessed signs of slowdown in both the manufacturing and services sectors. Tight financial conditions weighed on consumer and business sentiments prompting the fiscal and monetary policy-makers to consider policy calibrations. The data published by International Monetary Fund (IMF) indicates slight decline in global growth to 2.9% in 2024, down from 3% in 2023. The relative resilience in global figures is due to the growth performance of emerging economies, while the momentum in advanced economies is fading. The ongoing geopolitical rifts are a cause of concern and the same are also leading to global economic volatility. While the interest rates continue at an elevated level but signs of easing global inflation have raised expectations of reduction in interest rates in near future which will provide much needed impetus to the economic activity.

India has decisively withstood global headwinds and remained the world''s fastest-growing major economy on the back of growing demand, moderate inflation, stable interest rate regime and robust foreign exchange reserves. Despite widespread pessimism witnessed among the

On the operations front, your Company constantly endeavours to benefit from cost economics, innovative procurement strategies, process digitalization, Group''s global expertise in sourcing etc,. Your company has always strived to optimise costs despite all odds. During the year under review, the price of domestic coal dropped in line with the international trend and the supply situation also improved due to opening up of new coal mines but the quality of coal supplies were not consistent. The softening of global crude price by ~17% led to a correction of ~ 25%

developed nations and the worsening geopolitical situation, Indian economy recorded GDP of 8.2% during FY24. Index of Industrial Production has registered growth of 5.8% during FY24.

India''s economy is relatively insulated from global spillovers compared to other emerging markets because India has a large domestic market and is relatively less exposed to international trade flows. The Indian economy has several positive factors, such as policy reforms aimed at ease of doing business, stable macro-economics, prudent regulatory measures, optimism and increasing domestic demand. Additionally, the healthy balance sheets of banks and corporates, supply chain normalization, business confidence and robust government capital expenditure are indicating towards a renewal of the capex cycle.

Infrastructure and real estate sector is thriving as is evident from the growth numbers of Index of Industrial Production (IIP) for Infra, cement and steel consumption, as well as the government''s emphasis on prioritizing spending for infrastructure development in the country.

FINANCIAL HIGHLIGHTS / REVIEW OF OPERATIONS

During FY24, the Company has sold 4.81 million tonnes of cement & clinker compared to 4.39 million tonnes of cement & clinker in FY23, an increase of 9.4%.

A snapshot of the Company''s financial performance for FY24 vis-a-vis FY23 is as under:

in petcoke price. The Company took advantage of the situation by altering its fuel mix. Even though the diesel prices remained stable, inbound logistic costs increased due to higher maintenance cost, limited availability of trucks etc,. We identified new suppliers & contractors, participated in online biddings, developed alternatives for OEMs and carried out various works inhouse to reduce costs. Your company also implemented SAP Ariba buying which has transformed traditional procurement into digital sourcing.

Digitalization has become an integral part to our civilization and therefore business cannot remain an exception. At HeidelbergCement, we have continued to implement digitalization programs at our manufacturing processes, sales and marketing, Finance, Procurement, Human Relations department, Compliance tools etc., with a view to augment efficiency and reduce human errors.

In view of aligning with the Group''s goal of Carbon Net Zero, the Company endeavours to reduce dependency on conventional fuels by increasing usage of Alternative Fuels to replace fossil fuels. With continuous investment in technology and modifications, your company achieved TSR (Thermal Substitution Rate) of 8% against 6% in 2023 with an ambitious target of 45% by 2030. Towards sustainability, we are ensuring uninterrupted supply of Flyash with 100% flyash based PPC cement reducing clinker incorporation to that extent. We are also using other byproducts such as Redmud and slag both of which are engineering waste and byproducts of other industries possessing cementitious qualities.

The cement industry is highly competitive, with companies constantly devising strategies to differentiate their products and grab the attention of customers. Although our ''mycem'' brand holds a valued reputation, we felt it necessary to amplify its distinct selling points more effectively. Against this backdrop, we strived for establishing a sharper identity and effectively communicating our values and strengths to customers. Accordingly, we embarked on a brand refresh programme which was driven by rigorous market research and expert insights. As a result of all these efforts we have developed a new brand identity which harnesses on the perception of strong German quality and rich legacy of 150 years of Heidelberg Materials Group. The new brand identity has enabled us to differentiate our value proposition in the eyes of consumers and ensure that our brand achieves prominent top-of-mind recall among customers.

Alongside the brand refresh, we also launched a new sales and marketing excellence project called ''Project Rise'' which is a progressive initiative aimed at increasing sales volume and improving price positioning through sales excellence. The project targets to improve the market reach, counter loss of market share, enhance service excellence, generate demand, and increase effectiveness of sales force. The benefits derived so far from the brand refresh programme and the ''Project Rise'' are encouraging. DIVIDEND

The Board has recommended dividend of INR 8 per share (80%) for FY24, subject to the approval of the shareholders at the ensuing AGM (Dividend paid during FY23 was INR 7 per share). The proposed dividend for FY24 will absorb INR 1812.9 million. Therefore, in accordance with the provisions of Companies (Declaration and Payment of Dividend) Rules, 2014, the Board has proposed to withdraw an amount of INR 135.4 million from the accumulated profits of the past financial years.

In accordance with the provisions of the Income Tax Act, 1961 the aforesaid dividend will be taxable in the hands of shareholders but liable for Tax Deduction at Source (TDS) by the Company at the applicable rates.

Dividend Distribution Policy

Regulation 43A of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, requires top 1000 listed companies based on market capitalization to formulate a Dividend Distribution Policy. In compliance with the said requirement, the Board of Directors had formulated a Dividend Distribution Policy and the same is posted on the Company''s website. The web-link to access the said policy is as follows:

https://www.mycemco.com/sites/default/files/PDF/Policies/HCIL_Dividend_Distribution_Policy.pdf

Unclaimed Dividends

The respective due dates on which unclaimed amounts of dividends pertaining to the prior years will be transferred to ''Investor Education and Protection Fund'' (IEPF), constituted by the Ministry of Corporate Affairs, are given below:

Sr. No.	Financial Year	Dividend Per Share (INR)	Date of declaration	Date of transfer to IEPF
1	FY2016-17*	2.00	22 September 2017	28 October 2024
2	FY2017-18	2.50	21 September 2018	27 October 2025
3	FY2018-19	1.00 (Interim)	25 October 2018	30 November 2025
4	FY2018-19	3.00 (Final)	19 September 2019	24 October 2026
5	FY2019-20	1.50 (Interim)	23 November 2019	28 December 2026
6	FY 2019-20	6.00 (Final)	18 September 2020	21 October 2027
7	FY 2020-21	8.00	27 September 2021	01 November 2028
8	FY2021-22	9.00	08 September 2022	12 October 2029
9	FY2022-23	7.00	27 September 2023	30 October 2030
* The Shareholders whose dividend for FY2016-17 has remained unclaimed and have also not claimed the same for seven consecutive years, the unclaimed dividend along with its underlying shares will be transferred to Investor Education and Protection fund (IEPF) Authority.

ENVIRONMENTAL SUSTAINABILITY

Your Company believes that cement is the building block of the future and is therefore, transitioning it from grey to green. Our goals and objectives of operating sustainably are aligned with Heidelberg Materials. The dual objective is to not only mitigate the climate change impact but also create opportunities towards achieving future carbon neutrality goals through interventions in energy, raw

materials, waste management etc. Through climate protection and greener operations, we ensure long-term environmental, social, and economic sustainability for the company, delivering sustainable value to our stakeholders and ensuring the availability of resources for generations to come.

In our commitment to create greener cement, we have extended our initiatives beyond conservation and

restoration of ecology to include options for rejuvenation. We have assumed responsibility towards reducing our carbon footprint, water positivity, increasing the green cover and maximising usage of alternative fuels. We also promote circular economy by using waste materials and byproducts from other industries as alternative raw materials and fuels. We continuously integrate sustainability principles throughout the entire cement manufacturing process. To accelerate our environmental stewardship efforts, we have defined specific operational goals outlined below with a target to attain them by 2030.

The Company consumed ~34.94% of fly ash in producing PPC cement and ~53.48 % of slag in producing PSC cement. As an alternative raw material, we have used 5.52 % of Red mud, thus reducing limestone consumption, preserving limestone reserves for posterity. During FY24 the Company was plastic negative by 5.24 times.

The Company has made significant progress on the energy transition journey by increasing the use of green energy. During FY24 we have generated 71585 Mega Watt (MW) of power from Waste Heat Recovery Power Plant and 9007 MW of solar power at Damoh, Madhya Pradesh. The Company has initiated AFR feeding system to improve TSR. In our mining operations we lay special emphasis on soil management, pollution control, biodiversity conservation, maintaining water balance, and promoting safe mining practices. Post mining, the land is reclaimed through backfilling and afforestation by planting trees like Rain Tree, Banyan, Arjun, Golden Bamboo, Pilkhan, Neem, Indian Rosewood etc. Some of the mined areas have been developed into large water reservoirs that have become a boon for the villagers since the harvested rainwater not only recharges the ground water leading to significant improvement in water table of the area but also serves their irrigation needs. As a result of these actions, Patharia limestone mines is consistently getting five Star Rating from Indian Bureau of Mines (IBM) ever since the concept of five Star Rating was introduced by IBM.

CSRAPPROACH

The Company is committed to make a sustainable impact on the lives of the local communities in the areas where we operate through our commitment to improve education, enhancing rural infrastructure, and providing better healthcare services. By promoting local participation, the company strengthens its bond with local communities for economic and social development. Our approach is to align our initiatives and efforts with other stakeholders like village institutions, gram panchayats and local bodies of government During FY24 the Company has spent INR 62.4 million on various CSR activities / projects exceeding the obligations pursuant to Section 135 of the Companies Act, 2013.

The transformation of rural schools in Damoh, Jhansi and Ammasandra in association with the Education Department has always been a top priority. Through this initiative, the basic infrastructure of 12 government schools was upgraded, benefiting over 4,200 students and 75

teachers. Extensive repair and renovation work was carried out in some schools while in few others existing classrooms were upgraded into digital classrooms. Scholarships were given to meritorious students to facilitate their higher education. Educational kits and uniforms were also distributed to students. We are working in close coordination with the District Women and Child Development Departments of Damoh and Ammasandra to transform Anganwadi centers into model Anganwadi centers.

The Company endeavors to bring a sustainable change in the quality of life of neighborhood community. As part of this effort, we have encouraged farmers to adopt natural farming practices. In Jhansi, we successfully motivated 50 farmers to transform to natural farming methods.

We believe in entrepreneurial ability of rural youth and endeavor to make them self-reliant by developing their skills. Quality training that covers various areas of trade is tremendously beneficial. To guarantee this, we have partnered with the ''Centre for Entrepreneurship Development (CEDMAP)'' supported by the Madhya Pradesh Government. These courses develop skills in many fields, like beautician, sewing and stitching, computer operations, motor driving etc. These courses are run on a regular basis, and participants are enrolled for three-months certificate course. These courses are being conducted at our skill development centers known as "Sakshamta Vikas Kendras" in Jhansi and Damoh. During FY24, training was imparted to 260 rural youth.

We organize health check-up camps at regular intervals to meet communities'' general and specific needs. Under our healthcare program, our mobile medical van team has regularly organized rural healthcare camps.

The Company persistently helps in advancement of infrastructure surrounding its plants and mines. This includes construction of durable concrete roads, efficient drainage systems, access to clean drinking water, installation of solar lights and high mast lights, establishment of cremation grounds, community centers, and the development of a versatile playground, among other initiatives.

The Report on CSR activities in the format prescribed by the Ministry of Corporate Affairs is annexed herewith as ''Annexure - A''.

OCCUPATIONAL HEALTH & SAFETY

Occupational health and safety is a core value for our Company and safety is at the center of everything that we do. The day at the plants begins with safety gate meetings wherein important safety aspects are discussed along with safety prayer and pledge. We believe that it''s the “Smiles that will take us Miles”.

Safety conversations and safety zones are used for employee engagement and nurturing safety culture in all aspects of operations. Safety zones have been created at all plants with cross functional teams.

The Heidelberg Materials Group''s cardinal norms, guidelines, standards, and legal requirements along with stipulations under ISO 45001 - Occupational Health and Safety Management System are being adhered to at the plants. Employees were imparted with safety induction trainings, refresher courses and job specific trainings like scaffolding safety, working at height and in confined space etc.

National Safety week was celebrated from 4th -11th March 2024 in a grand manner across all plants to improve the safety awareness. A schedule of twenty-four most critical safety hazards relevant to the cement industry were compiled. Each month, a safety theme is taken up and its key aspects are deliberated so as to ingrain the importance of the activity and build a conscious driven safety culture in the organization. Truck Drivers were also imparted training on defensive driving techniques. Monitoring of the workplace for noise, particulate matter, free silica and illumination level is being done as per the regulatory norms. All plants are ISO 45001 certified.

AWARDS AND ACCOLADES

The Company continues to pursue excellence in all areas of its operations as evident from the recognition in the form of awards and honours.

1 Imlai plant was conferred with fly ash utilisation award from Mission Energy Foundation.

2 The Ammasandra Plant received “Certificate of Appreciation” for maintaining zero failures for Portland Slag Cement from Bureau of Indian Standards, Bengaluru.

3. Damoh unit got the Prestigious Golden Peacock Occupational Health & Safety Award during the ''Institute of Directors'' 25th International Conference on Environment Management & Climate Change.

4. Jhansi unit won the CII''s National Award for Excellence in Energy Management for 2023. The unit has won this award for 8th consecutive year.

5. Diamond Patharia Limestone Mines has been conferred 5 star rating consecutively for 8 years since the inception of the award in 2015-16. The prestigious award was presented Shri G. Kishan Reddy, Hon''ble Minister for Coal and Mines, GOI and Shri Satish Chandra Dubey, Hon''ble Minister of State for Coal and Mines, GOI.

6. Jhansi Unit received the Bhamashah Award from the State Tax Department & Cultural Department of Uttar Pradesh for being the highest tax-paying industry in Jhansi division.

CORPORATE GOVERNANCE

The essence of Corporate Governance lies in promoting and maintaining integrity, transparency, and accountability. The Company believes in creating and nurturing relationships based on trust and transparency with all its stakeholders. The governance framework enjoins the highest standards of ethical and responsible conduct. All Directors and employees consider governance as their personal responsibility and conduct themselves in accordance with the Code of Conduct set out by the organization.

The Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 have reinforced the governance regime in India. The Company is compliant with the corporate governance requirements as prescribed under the said Regulations. The Company has also ensured compliance with applicable Secretarial Standards issued by the Institute of Company Secretaries of India pursuant to Section 118(10) of the Companies Act, 2013.

In terms of Regulation 34(3) read with Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a Corporate Governance Report pertaining to FY24 forms part of this Annual Report. Pursuant to the provisions of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a certificate from M/s. Nityanand Singh & Co., a firm of Company Secretaries in Practice, confirming compliance with the conditions of Corporate Governance is also annexed to the Corporate Governance Report.

A certificate furnished by Mr. Joydeep Mukherjee, Managing Director and Mr. Anil Kumar Sharma, Chief Financial Officer in respect of the financial statements of the Company for the financial year ended 31 March 2024 is annexed as ‘Annexure-B’ to this Report.

Management Discussion and Analysis Report is also given as an addition to this Report.

BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT

Business Responsibility and Sustainability Report (BRSR), as stipulated under Regulation 34(2)(f) of SEBI Listing Regulations, describing the initiatives taken by the Company from Environment, Social and Governance (ESG) perspective forms part of this Annual Report. DIRECTORS

Appointment of Managing Director

Mr. Joydeep Mukherjee (holding DIN-06648469) was appointed as Managing Director of the Company for a term of three years from 01 April 2023 to 31 March 2026. His appointment was also approved by Shareholders by passing resolution on 27 April 2023 through postal ballot. Appointment of Independent Director The Board of Directors of the Company appointed Mr. Atul Khosla (holding DIN-06476856) as an Additional Director in the category of Non-Executive Independent Director, with effect from 06 November 2023. His appointment was also approved by Shareholders for a term of five years from 06 November 2023 to 05 November 2028 by way of passing a special resolution on 12 January 2024 through postal ballot.

Change of Chairperson

Mr. Ramakrishnan Ramamurthy ceased to be Chairman & Non-Executive Independent Director of the Company with effect from close of business hours on 11 February 2024 consequent to end of his five-years term. The Board places on record its appreciation for the valuable guidance and contributions made by Mr. Ramakrishnan Ramamurthy.

The Board of Directors has appointed Ms. Jyoti Narang, Non-Executive Independent Woman Director as Chairperson of the Board with effect from 12 February 2024 in place of Mr. Ramakrishnan Ramamurthy.

Resignation of Non-Executive Director Mr. Kevin Gerard Gluskie (holding DIN: 07413549) resigned from the position of Non-Executive Director of the Company with effect from close of business hours on 13 March 2024 on account of end of his employment contract with Heidelberg Materials Group. The Board places on record its appreciation for the valuable guidance and contributions made by Mr. Gluskie.

Appointment of Non-Executive Director The Board of Directors of the Company appointed Mr. Roberto Callieri (DIN-05139888) as an Additional Director in the category of Non-Executive Director, with effect from 14 March 2024. His appointment was also approved by Shareholders by way of passing an ordinary resolution on 26 April 2024 through postal ballot.

Retirement by rotation

Mr. Vimal Kumar Jain, Whole-time Director retires by rotation at the ensuing AGM and being eligible has offered himself for reappointment. His brief profile is given in the Notice of AGM. The Board hereby recommends his reappointment.

Declaration of Independent Directors

Ms. Jyoti Narang and Mr. Atul Khosla, Independent Directors on the Board have submitted declarations to the Company that they fulfill the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and Regulation 16 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

The Board of Directors, based on the declarations received from the Independent Directors after duly verifying the veracity of such declarations, hereby confirms that the Independent Directors fulfill the conditions of independence specified in the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and are independent of the management of the Company. DISCLOSURES UNDER COMPANIES ACT, 2013 Number of Board Meetings: During FY24, five Board Meetings were held. The details of the same are given in the Corporate Governance Report.

Composition of Audit Committee: The Audit Committee of the Company as on 31 March 2024 comprised of three members namely, Mr. Atul Khosla (Chairman of the Committee), Ms. Jyoti Narang and Ms. Soek Peng Sim. Board Evaluation: In accordance with the provisions of the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board has carried out an annual evaluation of its own performance, that of the directors individually and that of all the Committees constituted by it, namely, the Audit Committee, Nomination and Remuneration Committee, Corporate Social Responsibility Committee, Stakeholders Relationship Committee and Risk Management Committee. The manner in which the performance

evaluation has been carried out has been explained in the Corporate Governance Report.

Policy for appointment and remuneration of directors:

The Board has on the recommendation of the Nomination and Remuneration Committee, formulated a Nomination and Remuneration Policy. The policy inter alia lays down the criteria for determining qualifications, attributes and independence of potential candidates for appointment as directors and determining their remuneration. The salient features of the Policy have been provided in Corporate Governance Report. The said Policy has been posted on website of the Company and the weblink to access the said policy is as follows:

https://www.mycemco.com/sites/default/files/PDF/Policies/Nomination_and_Remuneration_Policy.pdf

The Board has also adopted a ‘Board Diversity Policy‘ which requires the Board to ensure appropriate balance of skills, experience and diversity of perspectives in its own composition.

Annual Return: The Annual Return of the Company for FY23 already filed with the Ministry of Corporate Affairs (MCA) as well as the draft Annual Return for FY24 (which will be filed with MCA after the ensuing AGM) are available on the website of the Company and the weblink to access the same is as follows:

https://www.mycemco.com/financial-results

After the filing of Annual Return for FY24 with MCA, the aforesaid draft version of the Return will be replaced with the final version.

Key Managerial Personnel: Details of Key Managerial Personnel of the Company are given below:

• Mr. Joydeep Mukherjee, Managing Director (with effect from 01 April 2023);

• Mr. Vimal Kumar Jain, Whole-time Director;

• Mr. Anil Kumar Sharma, Chief Financial Officer;

• Mr. Rajesh Relan, Sr. Vice President- Corporate Affairs & Company Secretary*; and

• Mr. Ravi Arora, Vice President- Corporate Affairs & Company Secretary**.

*Mr. Rajesh Relan vide letter dated 12 April 2024 has resigned from the position of Company Secretary & Compliance Officer. The Board at its meeting held on 29 May 2024 has accepted his resignation and decided to relieve Mr. Relan from the position of Company Secretary and Compliance Officer of the Company with effect from the close of business hours on 17 June 2024.

**The Board of Directors at its meeting held on 29 May 2024 has appointed Mr. Ravi Arora as Company Secretary & Compliance Officer of the Company with effect from 18 June 2024.

LOANS, GUARANTEES, SECURITY, AND INVESTMENTS

During FY24, the Company has acquired 92,76,800 equity shares of Continuum MP Windfarm Development Private Limited (CMWDPL) constituting 4.57% of the paid-up equity share capital of CMWDPL for the purpose of procuring around 08 Megawatt hours per annum of hybrid power (solar wind) for Damoh plants on group captive basis.

The Company has not given any loan, guarantee or security pursuant to the provisions of section 186 of the Companies Act, 2013.

The details of Outstanding Loans and Investments made by the Company as on 31 March 2024 are given in Notes to the financial statements.

General: The Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions with respect to these items during FY24:

• Details relating to deposits covered under Chapter V of the Companies Act, 2013.

• Issue of equity shares with differential rights as to dividend, voting or otherwise.

• Issue of stock options or sweat equity shares.

• No significant or material orders were passed by the Regulators or Courts or Tribunals impacting the going concern status and the Company’s operations in future.

INTERNAL FINANCIAL CONTROLS The Company has in place relevant internal controls, policies, and procedures to ensure orderly and efficient conduct of its business. Standard Operating Procedures (SOPs) and Risk Control Matrix (RCM) have been designed for critical processes across all operations. The internal financial controls are tested for operating effectiveness through management’s ongoing monitoring and review processes, and independently by the internal auditors. In our view the internal financial controls are adequate and are operating effectively.

DIRECTORS’ RESPONSIBILITY STATEMENT

To the best of their knowledge and belief and according to the information and explanations obtained by them and based on the assessment of the management, the Board of Directors makes the following statements in terms of Section 134 of the Companies Act, 2013:

(a) that in the preparation of the annual accounts for the financial year ended 31 March 2024 the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

(b) that such accounting policies have been selected and applied consistently and judgments and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31 March 2024 and of the profit of the Company for the financial year ended on that date;

(c) that 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;

(d) that the financial statements for the financial year ended 31 March 2024 have been prepared on a ‘going concern’ basis;

(e) that proper internal financial controls were in place and that such internal financial controls were adequate and were operating effectively; and

(f) that systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.

RELATED PARTY TRANSACTIONS

All transactions entered between the Company and its

related parties during the financial year ended 31 March

2024 were in the ordinary course of business and on an arm’s length basis. The particulars of such transactions have been disclosed in notes to the financial statements for FY24. During the year under review, the Company has not entered in any related party transaction exceeding the threshold limit provided under the Companies Act, 2013 / Rules made thereunder and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. Omnibus approvals are obtained for the transactions which are foreseeable and are repetitive in nature. A statement of all the related party transactions is placed before the Audit Committee on a quarterly basis, specifying the nature and value of the transactions.

The Company has in place a Policy on Related Party Transactions and a framework for the purpose of assessing the basis of determining the arm’s length price of relevant transactions. The said policy and the framework are reviewed by the Audit Committee and the Board of Directors from time to time. The same have been posted on the Company’s website. The web-link to access the said policy and framework is as follows:

https://www.mycemco.com/sites/default/files/PDF/Policies/Related_Party_Transaction_Policy.pdf

RISK MANAGEMENT

The Board of Directors of the Company has constituted a Risk Management Committee for reviewing and monitoring the risk management plan of the Company and ensuring its effectiveness. The business risks have been classified under the broad heads - strategic, operational, financial, and legal & compliance risks. The Company’s Risk Management Policy lays down a bottom-up process comprising risk identification, analysis and evaluation, treatment and controlling. The Chief Risk Officer and the Risk owners identify and analyse risks in their area of operations. The risks faced by the Company, their impact and the mitigation measures are categorised as high, medium and low risks which are then reviewed by the Senior Management and the critical ones are placed before the Risk Management Committee/Board of Directors for review.

The Board provides oversight and reviews the Risk Management Policy. The Board along with Risk Management Committee is responsible for framing, implementing and monitoring the risk management plan of the Company. During the year under review, Internal auditors, had also tested the Risk & Control Matrices for various processes as a part of Internal financial control framework.

The details of the functioning of the Risk Management Committee and frequency of its meetings are provided in Report on Corporate Governance forming part of this Annual Report.

VIGIL MECHANISM / WHISTLE BLOWER POLICY

The Company has established a vigil mechanism / whistle blower policy to deal with the instances of unethical behaviour, fraud, conflict of interest, mismanagement, and violation of the Code of Conduct. During FY24 no complaint was received under the Vigil Mechanism. The details of the

vigil mechanism are given in the Corporate Governance Report and a copy of the same has been posted on the Company’s website. The weblink to access the same is as follows:

https://www.mycemco.com/si1es/de1aul1/files/PDF/Policies/W.e.f.19.10.2021_HCIL_Whis1le_Blower_Policy_English.pdf

PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT THE WORKPLACE

The Company is compliant with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, which aims to protect women at workplace against any form of sexual harassment and prompt redressal of any complaint. During FY24, no complaint was received by the Company in this regard.

AUDITORS

In accordance with the provisions of Section 139(1) of the Companies Act, 2013 the members at the 63^rd Annual General Meeting (AGM) of the Company held on 08 September 2022 had reappointed M/s. S.N. Dhawan & Co. LLP., Chartered Accountants, as statutory auditors of the Company for second term to hold office up to the conclusion of the 68^th AGM i.e., for conducting statutory audits commencing from FY23 until FY27.

The observations of the Auditors in their report on Financial Statements read with the relevant notes are selfexplanatory. The Independent Auditors'' Report does not contain any qualification, reservation or adverse remarks. COST AUDIT

The Company is maintaining cost records in accordance with the provisions of Section 148 of the Companies Act, 2013 and the Rules made thereunder. The Cost Audit for FY23 was conducted by M/s. R.J. Goel & Co., Cost Accountants, Delhi. The Cost Audit Report was duly filed with the Ministry of Corporate Affairs, Government of India. The Audit of the cost accounts of the Company for FY24 is also being conducted by the said firm and the Report will be filed within the stipulated time.

In accordance with Section 148 of the Companies Act, 2013 and the Companies (Cost Records and Audit) Rules, 2014, the Board of Directors has on the recommendation of the Audit Committee, appointed M/s. R.J. Goel & Co., Cost Accountants as Cost Auditor of the Company for FY24 on a remuneration of INR 2,75,000. Pursuant to Section 148(3) of the Companies Act, 2013, a resolution seeking member’s ratification for the remuneration payable to M/s. R.J. Goel & Co., Cost Accountants for FY25 is included in the Notice convening the AGM. The Board recommends the aforesaid resolution for approval of the members. SECRETARIAL AUDIT

The Board had appointed M/s. Nityanand Singh & Co., a firm of Company Secretaries in Practice as Secretarial Auditor for carrying out secretarial audit of the Company for the financial year ended 31 March 2024 in accordance with the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. The Report of the Secretarial Auditor is annexed herewith as ‘Annexure-C’.

The Secretarial Audit Report does not contain any qualification, reservation, or adverse remarks.

Secretarial Compliance Report: Under Regulation 24A of SEBI Listing Regulations it is mandatory for listed companies to annually submit a Secretarial Compliance Report to stock exchanges. M/s. Nityanand Singh & Co. has furnished Secretarial Compliance Report for FY24. The said Report does not contain any qualification, reservation, or adverse remarks. The said Report has been filed with Stock Exchanges and has also been placed on website of the Company. The web link to access the same is as under:

https://www.mycemco .comsites/default/files/PDF/Secretarial_Ccmpliance_Rep

PARTICULARS OF EMPLOYEES

The particulars of employees required pursuant to Section 197 of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 form part of this Report and are annexed as ‘Annexure-D’. In accordance with the provisions of Section 136 of the Act, the Board’s Report and the financial statements for the financial year ended 31 March 2024 are being sent to the members and others entitled thereto, excluding the details to be furnished under Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. However, the information required under aforesaid Rule 5(2) is available for inspection by the members at the Registered Office of the Company during business hours on all working days up to the date of the ensuing Annual General Meeting. If any member desires to have a copy of the same, he may write to the Company Secretary in this regard.

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS ANDOUTGO

The particulars relating to conservation of energy, technology absorption and foreign exchange earnings and outgo, as required under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules 2014, form part of this Report and are annexed as ‘Annexure-E’.

ACKNOWLEDGEMENTS

Your Directors are thankful to all stakeholders including Customers, Bankers, Suppliers, Dealers, and Contractors for their continued assistance, co-operation, and support. The Directors wish to place on record their sincere appreciation to all employees for their commitment and continued contribution to the Company. The Directors are grateful for the confidence, faith and trust reposed by the shareholders in the Company. We are thankful to various agencies of the Central and State Government(s) for their continued support and co-operation.

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Mar 31, 2023

The Directors are pleased to present the 64^th Annual Report together with the audited financial statements of HeidelbergCement India Ltd. (the Company) for the financial year ended 31 March 2023 (FY23).

THEYEAR IN RETROSPECT

The year started when global uncertainties were rife. Barely had the pandemic receded, and the war between Russia and Ukraine broke out in February 2022 leading to a worldwide surge in inflation. Consequently, the central banks across economies led by the US Federal Reserve responded with synchronized interest rate hikes to curb inflation. The rate hike by the US Fed drove capital into the US markets causing the US Dollar to appreciate against most of the currencies. This led to the widening of the Current Account Deficits and increased inflationary pressures in net importing economies. Prices of food products, fuels and fertilizers rose sharply. Many developing countries are under severe economic stress on account of combination of multiple factors such as weaker currencies, higher import prices, rising cost of living and a stronger dollar making debt service obligations more expensive.

For India, 2022 marked the 75^th year of India''s Independence. Despite facing formidable challenges, India stands tall and steadfast, emerging as a beacon of resilience in the global economy. The Indian economy after its encounter with the pandemic not only staged a full recovery but also marched ahead and became the world''s fifth-largest economy. India''s GDP grew by 7% in FY23

compared to revised estimate of 9.1% for the previous financial year. India''s economic growth in FY23 was led by private consumption and capital formation which has led to employment generation as can be witnessed from declining urban unemployment rate and faster net registrations with Employees'' Provident Fund Organization. Foreign exchange reserve levels are comfortable and external debt is low. Yet in FY23, India also faced the challenge of reining in inflation. Measures taken by the Central Government and RBI, along with declining trend in global commodity prices, have finally brought the retail inflation within RBI''s tolerance limit. Further support to economic growth will come from the expansion of public digital platforms and path-breaking measures such as PM GatiShakti, the National Logistics Policy, and the Production-Linked Incentive schemes to boost manufacturing output. The fundamentals of the Indian economy are sound as it enters its ''AmritKaal'', the 25-year journey towards its centenary as a modern, independent nation.

FINANCIAL HIGHLIGHTS / REVIEW OF OPERATIONS

During FY23, the Company produced 4.32 million tonnes of cement compared to 4.75 million tonnes during the financial year ended 31 March 2022 (FY22), a decrease of 9.0%. Cement sales during the year were 4.39 million tonnes compared to 4.78 million tonnes in FY22, a decrease of 8.1%.

A snapshot of the Company''s financial performance for FY23 vis-a-vis FY22 is as under:

(INR in Millions)

Particulars	FY23	FY22
Revenue from Operations	22,381.0	22,969.6
Other Income	452.9	490.7
Total Revenue	22,833.9	23,460.3
Earnings before Interest, Tax, Depreciation and Amortization (EBITDA)-Including other income	2,941.4	4,836.2
Depreciation and Amortization	1,123.1	1,120.5
Finance Cost	460.6	364.4
Profit before Tax	1,357.7	3,351.3
Total Tax expense	366.0	828.7
Net Profit for the year	991.7	2,522.6

After brief slowdown in economy there has been unprecedented revival of growth across all sectors. Demand and consumption have gone up increasing the inflation that has impacted raw materials, fuels and packaging costs. In line with the global indexes and owing to demand and production mismatch, domestic prices of various commodities have also shot up. For cement industry, Coal is a major fuel. The supply constraints in coal

led to its significantly reduced availability, decline in quality and sudden surge in prices. Your Company has mitigated quality risk by constantly changing its fuel mix and the supply risks by entering into long term contracts with local companies exploring new mines, continuous participation in e-auctions etc. Despite intermittent stoppages of power plants due to lack of demand, your Company was able to source adequate quantity of flyash to ensure continuity of operations.

Following the increasing trend in commodity prices, crude oil was no exception. Consequently, diesel prices soared to new heights which had cascading effect on logistics and packaging costs. Outbound and Inbound movement of cement and raw materials also posed a challenge on account of shortage of trucks. Your Company managed the situation by inducting new transporters and managing its Rail-road mix.

Your Company has put in place a robust Supplier''s Code of Conduct that is being strictly adhered to while scouting and registering new suppliers. We have in place strong annual supplier evaluation and feedback process for major suppliers to ensure continuous improvement. The Company continues to focus on improving its operating efficiencies and minimising costs to improve overall operational and financial performance.

Your Company relentlessly strives to transit from grey to green by reducing the carbon footprint. As a proponent of sustainability, we ensured uninterrupted supply of Flyash, Red mud and various other by-products of other industries to reduce usage of natural resources. A state-of-the-art Alternate Fuels project, which was commissioned in the last quarter of FY22, stabilised during the year and made its contribution towards sustainable operations. The Company has also commissioned 5.5 MW Solar Power Plant in its mining area at Damoh, Madhya Pradesh during FY23.

DIVIDEND

The Board has recommended dividend of INR 7 per share (70%) for FY23, subject to the approval of the shareholders in the ensuing AGM (Dividend paid during FY22 was INR 9 per share). The proposed dividend for FY23 will absorb INR 1586.3 million. Therefore, in accordance with the provisions of Companies (Declaration and Payment of Dividend) Rules, 2014, the Board has proposed to withdraw an amount of INR 594.6 million from the accumulated profits of the past financial years.

In accordance with the provisions of the Income Tax Act,

1961 the aforesaid dividend will be taxable in the hands of shareholders but liable for Tax Deduction at Source (TDS) by the Company at the applicable rates.

Dividend Distribution Policy

Regulation 43A of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, requires top 1000 listed companies based on market capitalization to formulate a Dividend Distribution Policy. In compliance with the said requirement, the Board of Directors had formulated a Dividend Distribution Policy and the same is posted on the Company''s website. The web-link to access the said policy is as follows:

https://www.mycemco.com/sites/default/files/PDF/Policies/HCIL_Dividend_Distribution_Policy.pdf

Unclaimed Dividends

The respective due dates on which unclaimed amounts of dividends pertaining to the prior years will be transferred to ''Investor Education and Protection Fund'' (IEPF), constituted by the Ministry of Corporate Affairs, are given below:

Sr. No.	Financial Year	Dividend Per Share (INR)	Date of declaration	Date of transfer to IEPF
1	FY2016-17	2.00	22 September 2017	28 October 2024
2	FY2017-18	2.50	21 September 2018	27 October 2025
3	FY2018-19	1.00 (Interim)	25 October 2018	30 November 2025
4	FY2018-19	3.00 (Final)	19 September 2019	24 October 2026
5	FY2019-20	1.50 (Interim)	23 November 2019	28 December 2026
6	FY 2019-20	6.00 (Final)	18 September 2020	21 October 2027
7	FY 2020-21	8.00	27 September 2021	01 November 2028
8	FY2021-22	9.00	08 September 2022	12 October 2029

ENVIRONMENTAL SUSTAINABILITY

Natural resources have been the foundation of every modern-day progress and are critical for our manufacturing processes as well. We are conscious that containing the environmental impact of manufacturing processes needs significant and systemic measures. We, therefore, follow a three-pronged approach to fulfil our commitment towards sustainability: Prevention, Mitigation and Compensation. Committed to deliver on our Sustainability Goals 2030, we strive to excel in environment protection by reducing our footprints on water, air and land, and simultaneously drive a circular economy by reducing waste, recycling and reusing the materials. We remain committed to engage and deliver in the following key domain areas:

• Driving Economic Strength & Innovation

• Achieving excellence in Occupational Health and Safety

• Reducing our Environment Footprint

• Enabling Circular Economy

• Being a Good Neighbour

• Ensuring Compliance and Transparency

All plants of the Company are ISO 14001 (Environment Management System) certified. The Company consumed ~34.95% of fly ash in producing PPC cement and ~53.33% of slag in producing PSC cement thus reducing limestone consumption, preserving limestone reserves for posterity. During FY23 the Company generated 59064 Mega Watt

(MW) of power from Waste Heat Recovery Power Plant at Narsingarh. During FY23, the Company commissioned 5.5 MW Solar Power Plant in its mining area at Damoh, Madhya Pradesh and generated 9419 Mega Watt (MW) of power. We have also invested in alternative fuels feeding system, another green initiative which has increased the usage of alternative fuels in kiln.

We have embraced a culture of conservation, and integrated environmental parameters into our growth aspirations by adopting state-of-the-art technological interventions, innovative production techniques, resource optimization measures and sustainable mining practices. Through a series of well-calibrated pre and post mining measures, the Company strives to reverse the operational impact and at the same time add value to the economy and community. In our mining operations we lay special emphasis on soil management, pollution control, biodiversity conservation, maintaining water balance, and promoting safe mining practices. Post mining, the land is reclaimed through back-filling and afforestation by planting trees like Rain Tree, Baniyan, Arjun, Golden Bamboo, Pilkhan (timber), Neem, Indian Rosewood etc. Some of the mined areas have been developed into large water reservoirs that have become a boon for the villagers since the harvested rainwater not only recharges the ground water leading to significant improvement in water table of the area but also serves their irrigation needs. As a result of these actions, Patharia limestone mines is consistently getting five Star Rating from Indian Bureau of Mines (IBM) ever since the concept of five Star Rating was introduced by IBM.

ENRICHING BIODIVERSITY

Development of green belt in the plants and mines provides several benefits to the environment and the society at large in terms of release of oxygen, absorption of carbon dioxide and prevention of soil erosion. The green cover extends to over 38% of the factory area. Water bodies too have been developed to support plantation. These water bodies and trees are home to a variety of flora and fauna. The enriched biodiversity provides shelter to numerous species of animals and birds indirectly helping in improving the happiness quotient of our employees.

To increase the green cover, we are continuously motivating our business associates to plant trees in their region under our “friends of Earth” programme. It is a step towards our commitment to make the world a better place to live for our generations to come.

MAKING A DIFFERENCE THROUGH CSR

The Company continued to contribute to the economic and social development of the local communities, in the regions where it has presence by focusing on education, rural infrastructure development and healthcare facilities. By promoting local participation, the company strengthens its bond with local communities. During FY23 the Company has spent INR 78.50 million on various CSR activities / projects exceeding the obligations pursuant to Section 135 of the Companies Act, 2013.

The transformation of rural schools in Damoh, Jhansi and Ammasandra in association with the Education Department has always been a top priority. Through this initiative, the basic infrastructure of 10 government schools was upgraded, benefiting over 3,000 students and 95 teachers. Extensive repair and renovation work was carried out in some schools while in few others existing classrooms were upgraded into digital classrooms. Scholarships were given to meritorious students to facilitate their higher education. Educational kits and uniforms were also distributed to students. We are working in close coordination with the District Women and Child Development Departments of Damoh and Ammasandra to transform Anganwadi centers into model Anganwadi centers.

We believe in entrepreneurial ability of rural youth and endeavor to make them self-reliant by developing their skills. Quality training that covers various areas of trade is tremendously beneficial. To guarantee this, we have partnered with the "Centre for Entrepreneurship Development (CEDMAP)," supported by the Madhya Pradesh Government. These courses build skills in many trades, like beautician, sewing and stitching, computer operations, motor driving etc. These courses are run on a regular basis, and participants are enrolled for three-months course. A certificate of completion is also provided to all the students. These courses are being conducted at our skill development centers known as "Sakshamta Vikas Kendras" in Jhansi and Damoh. During FY23, training was imparted to 240 rural youth.

We organize health check-up camps at regular intervals to meet communities'' general and specific needs. Under our healthcare program, our mobile medical van team has regularly organized rural healthcare camps.

To promote cattle farming as an additional source of rural livelihood, the Company has engaged BAIF Institute to provide facilities such as cattle rearing, vaccination, artificial insemination etc., to the villagers in Damoh. The Company has also taken steps for upgradation of rural veterinary hospitals.

The Company continued to extend its support towards development of infrastructure in the vicinity of its plants and mines viz., construction of concrete roads, drainage facilities, availability of potable water, solar lights, cremation grounds, public toilets, bus stand shelters etc.

The Report on CSR activities in the format prescribed by the Ministry of Corporate Affairs is annexed herewith as ''Annexure - A''.

OCCUPATIONAL HEALTH & SAFETY

Occupational health and safety is a core value for our Company and safety is at the center of everything that we do. We strive to create a healthy and safe working environment for our employees, contractors and other stakeholders.

The day at the plants begins with safety gate meetings wherein important safety aspects are discussed along with safety prayer and pledge. To improve the Happiness

Quotient among the workmen, people are encouraged to share jokes during their daily gate meeting and enter plant after having taken the safety pledge. We believe that it''s the “Smiles that will take us Miles”.

Safety conversations and safety zones are effectively used for employee engagement and nurturing safety culture in all aspects of operations. Safety zones have been created at all plants with cross functional teams.

The Heidelberg Materials Group''s cardinal norms, guidelines, standards, and legal requirements along with stipulations under ISO 45001 - Occupational Health and Safety Management System are being strictly adhered to at all the plants. Employees were imparted safety induction trainings, refresher courses and job specific trainings like scaffolding safety, working at height and in confined space etc.

National Safety week was celebrated from 4^th -11^th March 2023 in a grand manner across all plants to improve the safety awareness. A schedule of twenty-four most critical safety hazards relevant to the cement industry has been compiled. Each month, a safety theme is taken up and its key aspects are deliberated so as to firmly ingrain the importance of the activity and build a conscious driven safety culture in the organization. Truck Drivers were also imparted training on defensive driving techniques. Monitoring of the workplace for noise, particulate matter, free silica and illumination level is being done as per the regulatory norms. All plants are ISO 45001 certified.

AWARDS AN D ACCOLADES

The Company continues to pursue excellence in all areas of its operations as evident from the recognition in the form of awards and honours.

• Jhansi Plant received “Safe Workplace Gold Award 2022" from Apex India Foundation.

• Jhansi Plant received ''Energy Efficient Unit'' award by Confederation of Indian Industry.

• Diamond Patharia Limestone Mines received “Amrit Kalash Puraskar” from Indian Bureau of Mines, Jabalpur.

• Diamond Patharia Limestone Mines received 1^st prize in Safety Management Plan and 2^nd prize in Awareness of Swachhata and Supervision from Directorate General Of Mines Safety, Jabalpur.

CORPORATE GOVERNANCE

The essence of Corporate Governance lies in promoting and maintaining integrity, transparency, and accountability. The Company believes in creating and nurturing relationships based on trust and transparency with all its stakeholders. The governance framework enjoins the highest standards of ethical and responsible conduct. All Directors and employees consider governance as their personal responsibility and conduct themselves in accordance with the Code of Conduct set out by the organization.

The Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 have reinforced the governance regime in India. The Company is

compliant with the corporate governance requirements as prescribed under the said Regulations. The Company has also ensured compliance with applicable Secretarial Standards issued by the Institute of Company Secretaries of India pursuant to Section 118(10) of the Companies Act, 2013.

In terms of Regulation 34(3) read with Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a Corporate Governance Report pertaining to FY23 forms part of this Annual Report. Pursuant to the provisions of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a certificate from M/s. Nityanand Singh & Co., a firm of Company Secretaries in Practice, confirming compliance with the conditions of Corporate Governance is also annexed to the Corporate Governance Report.

A certificate furnished by Mr. Joydeep Mukherjee, Managing Director and Mr. Anil Kumar Sharma, Chief Financial Officer in respect of the financial statements and the cash flow statement for the financial year ended 31 March 2023 is annexed as ''Annexure-B'' to this Report.

Management Discussion and Analysis Report is also given as an addition to this Report.

BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT

The maiden Business Responsibility and Sustainability Report (BRSR), as stipulated under Regulation 34(2) (f) of SEBI Listing Regulations, describing the initiatives taken by the Company from Environment, Social and Governance (ESG) perspective forms part of this Annual Report.

DIRECTORS

Change of Whole-time Director

Mr. Sushil Kumar Tiwari retired from the position of Wholetime Director of the Company with effect from close of business hours on 09 June 2022. The Board places on record its appreciation for the valuable services rendered by Mr. Tiwari during his tenure as Whole-time Director of the Company.

Based on the recommendation of Nomination and Remuneration Committee, the Board of the Directors had approved the appointment of Mr. Vimal Kumar Jain (DIN: 09561918) as Whole-time Director of the Company for a term of three years from 10 June 2022 to 09 June 2025 in place of Mr. Sushil Kumar Tiwari. The shareholders of the Company at the last AGM held on 08 September 2022 had also approved the appointment Mr. Vimal Kumar Jain as Whole-time Director of the Company.

Change of Managing Director

The Board of Directors of the Company at its meeting held on 13 February 2023 deliberated on the request of Mr. Jamshed Naval Cooper (DIN-01527371) with respect to his retirement from the position of Managing Director and relieving him prior to the end of his third term. The Board after considering the request of Mr. Cooper, accepted his resignation and decided to relieve him from the position of

Managing Director with effect from close of business hours on 31 March 2023. The Board has placed on record its appreciation for the valuable services and support provided by Mr. Cooper as Managing Director of the Company.

Based on the recommendation of Nomination and Remuneration Committee, the Board of Directors had approved the appointment of Mr. Joydeep Mukherjee (DIN-06648469) as new Managing Director for a term of three years from 01 April 2023 to 31 March 2026 in place of Mr. Jamshed Naval Cooper.

The Board also recommended the resolutions to be passed by the shareholders for appointment of Mr. Joydeep Mukherjee as Managing Director of the Company, which were duly passed by the shareholders through postal ballot on 27 April 2023.

Retirement by rotation

Ms. Soek Peng Sim, Director retires by rotation at the ensuing AGM and being eligible has offered herself for reappointment. Her brief profile is given in the Notice of AGM. The Board hereby recommends her reappointment. Declaration of Independent Directors Mr. Ramakrishnan Ramamurthy and Ms. Jyoti Narang, Independent Directors on the Board have submitted declarations to the Company that they fulfill the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and Regulation 16 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

The Board of Directors, based on the declarations received from the Independent Directors after duly verifying the veracity of such declarations, hereby confirms that the Independent Directors fulfill the conditions of independence specified in the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and are independent of the management of the Company.

DISCLOSURES UNDER COMPANIES ACT, 2013 Number of Board Meetings: During FY23, four Board Meetings were held. The details of the same are given in the Corporate Governance Report.

Composition of Audit Committee: The Audit Committee of the Company as on 31 March 2023 comprised three members namely, Ms. Jyoti Narang (Chairperson of the Committee), Mr. Ramakrishnan Ramamurthy and Ms. Soek Peng Sim.

Board Evaluation: In accordance with the provisions of the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board has carried out an annual evaluation of its own performance, that of the directors individually and that of all the Committees constituted by it, namely, the Audit Committee, Nomination and Remuneration Committee, Corporate Social Responsibility Committee, Stakeholders Relationship Committee and Risk Management Committee. The manner in which the performance evaluation has been carried out has been explained in the Corporate Governance Report.

Policy for appointment and remuneration of directors:

The Board has on the recommendation of the Nomination and Remuneration Committee, formulated a Nomination and Remuneration Policy. The policy inter alia lays down the criteria for determining qualifications, attributes and independence of potential candidates for appointment as directors and determining their remuneration. The salient features of the Policy have been provided in Corporate Governance Report. The said Policy has been posted on website of the Company and the weblink to access the said policy is as follows:

https://www.mycemco.com/sites/default/files/PDF/Policies/Nomination_and_Remuneration_Policy.pdf

The Board has also adopted a ‘Board Diversity Policy‘ which requires the Board to ensure appropriate balance of skills, experience and diversity of perspectives in its own composition.

Annual Return: The Annual Return of the Company for FY22 already filed with the Ministry of Corporate Affairs (MCA) and the draft Annual Return for FY23 are available on the website of the Company and the weblink to access the same is as follows:

https://www.mycemco.com/financial-results

After the filing of Annual Return for FY23 with MCA, the aforesaid draft version of the Return will be replaced with the final version.

Key Managerial Personnel: Details of Key Managerial Personnel of the Company are given below:

• Mr. Joydeep Mukherjee, Managing Director (with effect from 01 April 2023);

• Mr. Jamshed Naval Cooper, Managing Director (up to 31 March 2023);

• Mr. Vimal Kumar Jain, Whole-time Director (with effect from 10 June 2022);

• Mr. Sushil Kumar Tiwari, Whole-time Director (up to 09 June 2022);

• Mr. Anil Kumar Sharma, Chief Financial Officer; and

• Mr. Rajesh Relan, Sr. Vice President- Corporate Affairs & Company Secretary.

LOANS, GUARANTEES, SECURITY, AND INVESTMENTS

During FY23, the Company has not given any loan, guarantee or security pursuant to the provisions of section 186 of the Companies Act, 2013.

The Loan of INR 1500 million which was given to Zuari Cement Limited (a fellow subsidiary) in FY21 was fully repaid by Zuari Cement Limited on the respective due dates in FY23. As on 31 March 2023, there is no outstanding loan appearing in the Financial Statements of the Company.

During FY23, the Company has not made any investment or issued any guarantee or provided any security.

General: The Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions with respect to these items during FY23:

• Details relating to deposits covered under Chapter V of the Companies Act, 2013.

• Issue of equity shares with differential rights as to dividend, voting or otherwise.

• Issue of stock options or sweat equity shares.

• No significant or material orders were passed by the Regulators or Courts or Tribunals impacting the going concern status and the Company''s operations in future.

INTERNAL FINANCIAL CONTROLS

The Company has in place relevant internal controls, policies, and procedures to ensure orderly and efficient conduct of its business. Standard Operating Procedures (SOPs) and Risk Control Matrix (RCM) have been designed for critical processes across all operations. The internal financial controls are tested for operating effectiveness through management''s ongoing monitoring and review processes, and independently by the internal auditors. In our view the internal financial controls are adequate and are operating effectively.

DIRECTORS’ RESPONSIBILITY STATEMENT

To the best of their knowledge and belief and according to the information and explanations obtained by them and based on the assessment of the management, the Board of Directors makes the following statements in terms of Section 134 of the Companies Act, 2013:

a) that in the preparation of the annual accounts for the financial year ended 31 March 2023 the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

b) that such accounting policies have been selected and applied consistently and judgments and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31 March 2023 and of the profit of the Company for the financial year ended on that date;

c) that 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;

d) that the financial statements for the financial year ended 31 March 2023 have been prepared on a ''going concern'' basis;

e) that proper internal financial controls were in place and that such internal financial controls were adequate and were operating effectively; and

f) that systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.

RELATED PARTY TRANSACTIONS

All transactions entered between the Company and its related parties during the financial year ended 31 March 2023 were in the ordinary course of business and on an

arm''s length basis. The particulars of such transactions have been disclosed in notes to the financial statements for FY23. During the year under review, the Company has not entered in any related party transaction exceeding the threshold limit provided under the Companies Act, 2013 / Rules made thereunder and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. Omnibus approvals are obtained for the transactions which are foreseeable and are repetitive in nature. A statement of all the related party transactions is placed before the Audit Committee on a quarterly basis, specifying the nature and value of the transactions.

The Company has in place a Policy on Related Party Transactions and a framework for the purpose of assessing the basis of determining the arm''s length price of relevant transactions. The said policy and the framework are reviewed by the Audit Committee and the Board of Directors from time to time. The same have been posted on the Company''s website. The web-link to access the said policy and framework is as follows:

https://www.mycemco.com/sites/default/files/PDF/Policies/Related_Party_Transaction_Policy.pdf

RISK MANAGEMENT

The Board of Directors of the Company has constituted a Risk Management Committee for reviewing and monitoring the risk management plan of the Company and ensuring its effectiveness. The business risks have been classified under the broad heads - strategic, operational, financial, and legal & compliance risks. The Company''s Risk Management Policy lays down a bottom-up process comprising risk identification, analysis and evaluation, treatment and controlling. The Chief Risk Officer and the Risk owners identify and analyse risks in their area of operations. The risks faced by the Company, their impact and the mitigation measures are categorised as high, medium and low risks which are then reviewed by the Senior Management and the critical ones are placed before the Risk Management Committee / Board of Directors for review.

The Board provides oversight and reviews the Risk Management Policy. The Board along with Risk Management Committee is responsible for framing, implementing and monitoring the risk management plan of the Company. During the year under review, Internal auditors, had also tested the Risk & Control Matrices for various processes as a part of Internal financial control framework.

The details of the functioning of the Risk Management Committee and frequency of its meetings are provided in Report on Corporate Governance forming part of this Annual Report.

VIGIL MECHANISM / WHISTLE BLOWER POLICY

The Company has established a vigil mechanism / whistle blower policy to deal with the instances of unethical behaviour, fraud, conflict of interest, mismanagement, and violation of the Code of Conduct. During FY23 no complaint was received under the Vigil Mechanism. The details of the

vigil mechanism are given in the Corporate Governance Report and a copy of the same has been posted on the Company''s website. The weblink to access the same is as follows:

https://www.mycemco.com/sites/default/files/PDF/Policies/We.f.19.10.2021_HCIL_Whistle_Blower_Policy_English.pdf

PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT THE WORKPLACE

The Company is compliant with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, which aims to protect women at workplace against any form of sexual harassment and prompt redressal of any complaint. During FY23, no complaint was received by the Company in this regard.

AUDITORS

In accordance with the provisions of Section 139(1) of the Companies Act, 2013 the members at the 63^rd Annual General Meeting (AGM) of the Company held on 08 September 2022 had reappointed M/s. S.N. Dhawan & Co. LLP, Chartered Accountants, as statutory auditors of the Company for second term to hold office up to the conclusion of the 68^th AGM i.e., for conducting statutory audits commencing from FY 2022-23 until FY 2026-27.

The observations of the Auditors in their report on Financial Statements read with the relevant notes are selfexplanatory. The Independent Auditors'' Report does not contain any qualification, reservation or adverse remarks.

COST AUDIT

The Company is maintaining cost records in accordance with the provisions of Section 148 of the Companies Act, 2013 and the Rules made thereunder. The Cost Audit for FY22 was conducted by M/s. R.J. Goel & Co., Cost Accountants, Delhi. The Cost Audit Report was duly filed with the Ministry of Corporate Affairs, Government of India. The Audit of the cost accounts of the Company for FY23 is also being conducted by the said firm and the Report will be filed within the stipulated time.

In accordance with Section 148 of the Companies Act, 2013 and the Companies (Cost Records and Audit) Rules, 2014, the Board of Directors has on the recommendation of the Audit Committee, appointed M/s. R.J. Goel & Co., Cost Accountants as Cost Auditor of the Company for FY24 on a remuneration of INR 2,75,000. Pursuant to Section 148(3) of the Companies Act, 2013, a resolution seeking member''s ratification for the remuneration payable to M/s. R.J. Goel & Co., Cost Accountants for FY24 is included in the Notice convening the AGM. The Board recommends the aforesaid resolution for approval of the members.

SECRETARIAL AUDIT

The Board had appointed M/s. Nityanand Singh & Co., a firm of Company Secretaries in Practice as Secretarial Auditor for carrying out secretarial audit of the Company for the financial year ended 31 March 2023 in accordance with the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. The Report of the

Secretarial Auditor is annexed herewith as ''Annexure-C''. The Secretarial Audit Report does not contain any qualification, reservation, or adverse remarks.

Secretarial Compliance Report: Under Regulation 24A of SEBI Listing Regulations it is mandatory for listed companies to annually submit a Secretarial Compliance Report to Stock Exchanges. M/s. Nityanand Singh & Co. has furnished Secretarial Compliance Report for FY23. The said Report does not contain any qualification, reservation, or adverse remarks. The said Report has been filed with Stock Exchanges and has also been placed on website of the Company. The web link to access the same is as under:

https://www.mycemco.com/sites/default/files/PDF/Secretarial_Compliance_Report/Financial_Year_2022-2023.pdf

PARTICULARS OF EMPLOYEES

The particulars of employees required pursuant to Section 197 of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 form part of this Report and are annexed as ''Annexure-D''. In accordance with the provisions of Section 136 of the Act, the Board''s Report and the financial statements for the financial year ended 31 March 2023 are being sent to the members and others entitled thereto, excluding the details to be furnished under Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. However, the information required under aforesaid rule 5(2) is available for inspection by the members at the Registered Office of the Company during business hours on all working days up to the date of the ensuing Annual General Meeting. If any member desires to have a copy of the same, he may write to the Company Secretary in this regard.

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars relating to conservation of energy, technology absorption and foreign exchange earnings and outgo, as required under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules 2014, form part of this Report and are annexed as ''Annexure-E''.

ACKNOWLEDGEMENTS

Your Directors are thankful to all stakeholders including Customers, Bankers, Suppliers, Dealers, and Contractors for their continued assistance, co-operation, and support. The Directors wish to place on record their sincere appreciation to all employees for their commitment and continued contribution to the Company. The Directors are grateful for the confidence, faith and trust reposed by the shareholders in the Company. We are thankful to various agencies of the Central and State Government(s) for their continued support and co-operation.

For and on behalf of the Board

Place: Bengaluru Ramakrishnan Ramamurthy

Date: 29 May 2023 Chairman

---

Mar 31, 2018

To the Members,

The Directors are pleased to present the 59th Annual Report together with the audited accounts of the Company for the financial year ended 31st March 2018 (FY18).

THE YEAR IN RETROSPECT

The year 2017-18 was marked by a number of key structural initiatives for strengthening economy for sustainable growth in the future. While the first quarter of the year saw the impact of demonetisation tapering off, in the next quarter, introduction of the landmark Goods and Services Tax (GST) brought in some uncertainties as businesses adjusted to the new regime. From the third quarter onwards, we have been witnessing signs of growth.

After a gap of 14 years, Moody’s upgraded India’s sovereign rating to Baa2 with a stable economic outlook. India has also improved its ranking in the World Bank’s Doing Business Report (2018 edition) from 130 in 2017 to 100 among 190 countries.

The GDP fell from 7.1% in FY17 to 6.7% in FY18 as the economy had to cope with the lingering effects of demonetisation and businesses grappled with the nitty-gritty of GST. Rising global crude oil prices cast negative spell on the Indian economy and posed a risk to growth.

During FY18,the Cement industry in India witnessed revival backed by Government spending on infrastructure. The good monsoon ensured steady cement demand from the rural segment. However the demand from urban residential real estate segment remained subdued in comparison to FY17 due to elevated inventory levels and introduction of RERA in May 2017, which disrupted construction activity as the real estate developers went slow on launching new projects. Cement production grew at about 6 percent for the full year against a decline of about 1 percent last year. Over-capacity in the cement industry continues to impact the price and margins. At the end of March 2018, the overall installed cement manufacturing capacity stood close to about 465 million tonnes. Cement production during FY2017-18 was about 298* million tonnes compared to 280 million tonnes in the corresponding period indicating growth of about 6%.

* Source: Website of Office of Economic Adviser, Ministry of Commerce and Industry.

FINANCIAL HIGHLIGHTS / REVIEW OF OPERATIONS

The Company adopted Indian Accounting Standards (Ind-AS) from 1st April 2016. The financial statements of the Company for the financial year ended 31st March 2018 as well as for 31 st March 2017 presented in this Annual Report are Ind-AS compliant.

During FY18, the Company reported its highest ever production and sales volume, sales revenue and EBITDA. During the year ended 31st March 2018, the Company produced 4.61 million tonnes of cement compared to 4.44 million tonnes in the year ended March 2017, an increase of 3.7%. Cement sales for the year were 4.65 million tonnes compared to 4.47 million tonnes in FY17, an increase of 4.0%. Net sales in FY18 were INR 18,894.7 million compared to INR 17,174.6 million in FY17, an increase of 10.0%. The net profit for FY18 was INR 1,331.8 million compared to INR 762.1 million in FY17.

A snapshot of the Company’s financial performance for the financial year ended 31st March 2018 vis-a-vis performance for the financial year ended 31 st March 2017 is as under: -

(Rs. in million)

Particulars	Financial Year ended 31 March 20181	Financial Year ended 31 March 2017
Income
Revenue from Operations (Net of Excise duty/GST)	18,894.7	17,174.6
Other Income	199.3	236.9
Total Revenue	19,094.0	17,411.5
Earnings before Interest, Tax, Depreciation and Amortization (EBITDA)- Including other income	3,832.9	3,025.5
Depreciation and Amortization	1,011.7	991.5
Finance Cost	744.5	897.7
Profit before Tax	2,076.7	1,136.3
Total Tax expense	744.9	374.2
Net Profit for the year	1,331.8	762.1

During FY18, international coal prices were up by about 15% y-o-y. In order to curtail the impact of rising fuel prices the Company maximized usage of petcoke which led to savings of around 9% compared to coal, despite about 30% price increase in international petcoke. The Company altered its fuel mix carefully balancing the use of local fuels to optimise the overall cost.

Prices of other raw materials viz., laterite, iron-ore, sweetener etc., also increased due to mining and environmental issues.

The Company had to rigorously work upon development of reliable supplier base and churning, whenever necessary, for cost optimization. The Company procured natural gypsum through e-auction route and achieved cost reduction of 18% despite the uptrend witnessed in international price of gypsum.

The Company was also able to reduce fly ash cost by 21 % through optimization of logistics at Damoh and Jhansi Plants. Increase in global crude prices impacted cost of packaging bags. However the Company was able to mitigate the impact to a large extent through reverse e-auctioning mechanism. The best practices and processes of the Heidelberg Cement Group, coupled with Continuous Improvement Program, ensured resource and energy optimization. Modifications and improvisations across pyro processes and milling operations resulted in reduced thermal and electrical energy consumption. Owing to various modifications, debottlenecking, process optimisation and equipment upgradation, we secured an increased kiln and mill throughput.

The Waste Heat Recovery-based Power Generation Plant during FY18 generated 69,448 Mega Watt of power which was about 40% of the total power requirement of Narsingarh plant, resulting in equivalent reduction in grid power leading to substantial savings in power cost. The clinker manufacturing plants of the Company viz., Narsingarh and Ammasandra Plants were enrolled by the Bureau of Energy Efficiency(BEE) under ‘Perform, Achieve and Trade Scheme’(PAT) which aims at enhancing energy efficiency of the industrial units. Both the plants were able to achieve the targets set by BEE for reducing specific energy consumption under PAT Cycle 1(target year 2014-15 against energy consumption in baseline year 2009-10). These units have been granted 20,586 Energy Saving Certificates, which can either be used for meeting obligations of the PAT Cycle 2 in case of any shortfall in achieving the target or available for monetization in the market.

The Company proactively changed its systems and processes as well as provided training to its Customers and Vendors assisting them to smoothly transit into the GST regime. The benefit of reduction in indirect taxes on account of implementation of GST was passed on to the customers. Consistent good quality of the product has enabled the Company to meet expectations of its discerning customers thereby sustaining the image of its flagship brand “mycem”. Brand visibility enabled the Company to increase sales volume by 4% despite the challenging demand supply situation owing to shortage of sand in Uttar Pradesh. To strengthen its bond with channel partners, the Company conducted a number of events, training programs and conferences. Effective coordination among production, quality control, marketing, logistics and customer support teams ensured supply of quality products and unmatched service to the customers.

TRANSFER TO DEBENTURE REDEMPTION RESERVE

The Company had issued Non-Convertible Debentures aggregating to I NR 3700 million carrying interest of 10.4% per annum on 16th December 2013. It is proposed to transfer, an amount of INR 134.1 million (previous year INR134.2 million) out of the profits for the financial year ended 31st March 2018 to the Debenture Redemption Reserve (DRR) to meet the obligations towards the redemption of debentures commencing from 16th December 2019.

During the year the credit rating in respect of the aforesaid debentures has been reaffirmed as “IND AA ” (with stable outlook) by India Ratings and Research Pvt. Ltd.

REPAYMENT OF EXTERNAL COMMERCIAL BORROWINGS

The Company had borrowed USD 125 million in nine tranches from January 2011 to October 2012 by way of External Commercial Borrowings (ECB) for the purpose of financing its Damoh-Jhansi expansion project. Each tranche of ECB was repayable after a period of five years from the date of its draw down. During FY2017-18, the eighth and ninth tranche aggregating to USD 20 million were repaid. Thus entire ECB of USD 125 million stands repaid.

DIVIDEND

The Board of Directors is pleased to recommend a dividend of INR 2.50 per equity share of INR 10 each (25%) for FY 201718 for approval of the members at the ensuing AGM. The dividend outgo will be INR 683.0 million (inclusive of a dividend tax of INR 116.5 million).

Dividend Distribution Policy

Regulation 43A of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, requires the top 500 listed companies based on the market capitalization to formulate a Dividend Distribution Policy. In compliance with the said requirement, the Board of Directors had formulated a Dividend Distribution Policy in FY17 and the same is posted on the Company’s website. The web-link to access the said policy is as follows: http://mycemco.com/sites/default/files/HCIL%20Dividend%20Distribution%20Policy.pdf

Unclaimed dividend for FY2016-17: Total unclaimed dividend for FY2016-17 as on 31 March 2018 stood at INR 2.3 million. The shareholders whose dividend will remain unclaimed at the expiry of seven years from the date of transfer to ‘Unpaid Dividend Account’ i.e., until 28th October 2024 will be transferred to ‘Investor Education and Protection Fund’.

ENVIRONMENTAL SUSTAINABILITY

The Company is committed and aligned with Heidelberg Cement Group’s Sustainability Commitments 2030 covering water, air, land, occupational health and safety, circular economy, people and communities. In line with these commitments, the Company is taking initiatives for environment protection and conservation.

Sustained commitment over the years towards conserving the water resources has led to the Company being certified as 6.37 times Net Water Positive by an independent certifying agency, TUV SUD. During FY17 all the cement plants of the Company withdrew 1,093,332 kilo litres of water from various sources and harvested 6,965,000 kilo litres of water. This implies that the Company has given back 6.37 times water than it consumed. This distinction was achieved through the commitment of all employees and a multidimensional approach including diversion of rain water to reservoirs, installation of water harvesting systems, revival of bore-wells, controlling seepages and educating everyone on water conservation measures.

The Company has also achieved significant reduction of carbon footprint to 517 kg of CO₂/ton of cement produced. Clinker incorporation factor of 62% has been achieved through utilisation of fly ash and other additives, thus preserving natural limestone reserves for the future generations. The company’s waste heat recovery power plant at Narsingarh unit generated power from the waste heat of clinker lines and helped in preserving the fossil fuel. The emphasis is also on taking new initiatives for recycling and reusing waste materials as alternate fuels in kilns thus promoting green and clean environment.

All the plants of the Company are ISO 14001 (Environment Management System) certified.

ENRICHING BIODIVERSITY

The Company preserves and enhances biodiversity across all its plants and mines. The Company has developed green belt covering about 38% of the factory area and created water bodies covering large areas. These water bodies and trees are home to a variety of flora and fauna. The enriched bio diversity provides shelter to thousands of parrots and numerous other bird species.

MAKING A DIFFERENCE THROUGH CSR

The Company continued to contribute to the economic and social development of the local communities in the regions where it has presence by focusing on healthcare, education, community development, and other related activities. By promoting local participation, the company strengthens its bond with local communities. The feeling of ownership that is being generated among the beneficiaries of the CSR assets is ensuring their judicious use and upkeep. During FY18 the Company has spent INR 14.75 million on various CSR activities / projects exceeding the obligations pursuant to Section 135 of the Companies Act, 2013.

Industry requires skilled manpower and the best source for this is large pool of unskilled, unemployed rural youth. The Company conducted diverse training programmes to enhance the skills of the unemployed youth at its well-equipped training and development centre at Jhansi having classrooms and conference rooms. The open area of the training centre is being developed for imparting training on agricultural techniques, horticulture and growing herbal plants.

The company facilitates education of children of nearby villages through the schools being supported by it. In order to improve the infrastructure of nearby schools, the Company provided classroom furniture to them. In order to promote education, meritorious students were rewarded with scholarships. Free books and utility kits were also distributed in many schools. The Company also sponsored sports’ meets in nearby villages wherein students from many schools participated. The Company installed solar panels for lighting in the girls’ hostel at Narsingarh.

The Company’s Central India plants are situated in water scarce Bundelkhand region. While free water is provided to villages near the Narsingarh plant throughout the year, during extreme summer when water resources ran dry, the Company deployed water tankers to provide water to other villages also. Construction of a check-dam was initiated near Satpara mines to ensure water storage during monsoons which will thereafter be available for nearly 6 to 7 months to nearby villagers for cultivation and domestic needs. The Company also dug bore wells and built water tanks in certain localities to meet the water demand during summers. The Company also organised free health check-up camps, provided mobile medical services and distributed medicines in the nearby villages.

The Company continued to extend its support towards development of infrastructure in the vicinity of its plants and mines. It also constructed concrete roads and culverts for safe, speedier and smoother connectivity and thus facilitated villagers to overcome the commuting problems faced by them.

The Report on CSR activities together with brief outline of CSR Policy of the Company is annexed herewith as ‘Annexure - A’.

OCCUPATIONAL HEALTH & SAFETY

Way above its business priorities, occupational health and Safety (OH&S) remained Company’s foremost priority. “Every employee must return home smiling to his family”. Driven by this philosophy, we endeavour to provide a safe and healthy work environment. The day begins with safety gate meetings wherein important safety aspects are discussed along with safety prayer and pledge. To build and grow the Happiness Quotient among the workmen, people are encouraged to share a joke post the safety pledge. We believe that it’s the “Smiles that will take you Miles”.

Various measures taken at the plants and mines to embed strong safety culture led to reduction in Lost Time Incidents Frequency Rate (LTIFR) from 0.21 in FY17 to 0.2 in FY18. However we regret to inform that we lost a young man deployed by our contractors while performing a task at our Imlai plant for which he had no prior authorization.

Top Management’s commitment to safety is pivotal and crucial for harmonizing employees’ safe behavior at the workplace. Safety Leadership training programmes were organized for top management, plant heads and HODs at all plants for implementing best safety practices. Employees including contract workmen were imparted safety induction trainings, refresher courses and job specific trainings like scaffolding safety, working at height, confined space etc. A schedule of twelve most critical safety hazards relevant to our industry has been compiled. Safety themes were announced every month and all the aspects were dwelt upon throughout the month so as to instill the same firmly in the minds of the workmen. Drivers and helpers were also imparted training on defensive driving techniques. All plants are OHSAS 18001 certified. OH&S monitoring of the workplace for noise, particulate matter, free silica and illumination level is being done as per the regulatory norms.

AWARDS AND ACCOLADES

The Company continues to pursue excellence in all areas of its operations, and the same being recognized in the form of awards and honours.

- ’Ammasandra Plant was awarded a certificate and trophy titled ‘Utthama Suraksha Puraskara’ in recognition of its high standards of safety performance and management System from Karnataka Chapter of National Safety Council.

- Yerekatte Limestone Mines in Karnataka was awarded First Prize in the categories of ‘Mineral Benefication’ and ‘Environmental Monitoring’ and Second Prize for ‘Overall Performance’ during the Mines Environment & Mineral Conservation Week Awards 2017-18 from the Indian Bureau of Mines.

- Jhansi Plant received the ‘Energy Efficient Unit’ award in the cement sector from Confederation of Indian Industry at the 18th National Awards for Excellence in Energy Management.

- Diamond Patharia Limestone Mines received a certificate in recognition for the initiatives taken under ‘Swachh Bharat Mission 2018’ from the Indian Bureau of Mines.

- Diamond Patharia Limestone Mines continues to be accredited with Five Star Rating* by the Ministry of Mines, Government of India. The accreditation certificate was given by Shri Haribhai Parthibhai Chaudhary, Hon’ble Minister of State for Mines.

* “Star Rating of Mines” is a scheme of the Ministry of Mines, Government of India, to recognise the performance of mines by giving them rating ranging from one to five stars. Under the scheme, mines bearing major minerals are evaluated on the parameters relating to sustainable development in accordance with sustainable development framework designed by Ministry of Mines and validated by Indian Bureau of Mines.

CORPORATE GOVERNANCE

The Company has always strived to build sustainable relationship with its stakeholders based on trust and transparency. As a result, its governance framework has earned a reputation of being ethical and responsible. All the Directors and employees consider it their personal responsibility to conduct themselves in accordance with the Code of Conduct set out by the organization.

The Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 have further reinforced the governance regime in India. The Company remains fully compliant with the corporate governance requirements as prescribed under the said regulations. Pursuant to the provisions of the listing regulations, a certificate from M/s. Nityanand Singh & Co., a firm of Company Secretaries in Practice, confirms compliance with conditions of Corporate Governance and forms an integral part of this Report. The Company has also ensured compliance with applicable Secretarial Standards issued by the Institute of Company Secretaries of India pursuant to Section 118(10) of the Companies Act, 2013.

A certificate furnished by Mr. Jamshed Naval Cooper,

Managing Director and Mr. Anil Kumar Sharma, Chief Financial Officer in respect of the financial statements and the cash flow statement for the financial year ended 31st March 2018 is annexed as Annexure ‘B’ to this Report.

Management Discussion and Analysis Report is also given as an addition to this Report.

BUSINESS RESPONSIBILITY REPORT

In terms of Regulation 34(2)(f) of the SEBI Listing Regulations, a Business Responsibility Report forms part of this Annual Report.

DIRECTORS

There was no change in the Board of Directors during the financial year ended 31st March 2018. Mr. Juan-Francisco Defalque (DIN: 07318811) retires by rotation at the ensuing Annual General Meeting (AGM) and being eligible has offered himself for re-appointment. His brief profile is given in the Notice of AGM. The Board recommends his re-appointment by the members at the ensuing AGM.

Independent Directors: Mr. P.G. Mankad (DIN: 00005001), Mr. S. Krishna Kumar (DIN: 01785323) and Mr. Pradeep V. Bhide (DIN: 03304262) were appointed as Independent Directors by the members for a term of five years from 1 stApril 2014 up to 31st March 2019 in the 55th Annual General Meeting held on 19th June 2014 and they continue to be on the Board of Directors. All the independent directors have submitted declarations to the Company that they fulfil the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

DISCLOSURES UNDER COMPANIES ACT, 2013

Number of Board Meetings: During the financial year ended 31st March 2018, four board meetings were held. The details of the same are given in the Corporate Governance Report.

Composition of Audit Committee: The Company has an Audit Committee comprising four members namely, Mr. S. Krishna Kumar (Chairman of the Committee), Mr. P.G. Mankad, Mr. P.V. Bhide and Ms. Soek Peng Sim. Other details about the said Committee are given in the Corporate Governance Report. All the recommendations made by the Audit Committee were accepted by the Board.

Board Evaluation: In accordance with the provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board has carried out an annual evaluation of its own performance, that of the directors individually and that of all the Committees constituted by it, namely, the Audit Committee, Nomination and Remuneration Committee, CSR Committee and the Stakeholders’ Relationship Committee. The manner in which the performance evaluation has been carried out has been explained in the Corporate Governance Report.

Policy for appointment and remuneration of directors: The Board has, on the recommendation of the Nomination and Remuneration Committee, framed a ‘Nomination and Remuneration Policy’. The policy inter alia lays down the criteria for determining qualifications, attributes and independence of potential candidates for appointment as directors and determining their remuneration. The said policy is annexed as Annexure ‘C’ to this Report. The Board has also adopted a ‘Board Diversity Policy’ which requires the Board to ensure appropriate balance of skills, experience and d iversity of perspectives in its own com position.

Extract of Annual Return: The extract of the Annual Returnin the prescribed form, MGT - 9 is annexed herewith as Annexure ‘D’.

Key Managerial Personnel: No changes took place in the Key Managerial Personnel (KMP) during the financial year ended 31st March 2018. The following persons continue to be the KMP of the Company:-

- Mr. Jamshed Naval Cooper, Managing Director;

- Mr. Sushil Kumar Tiwari, Whole-time Director;

- Mr. Anil KumarSharma, Chief Financial Officer; and

- Mr. Rajesh Relan, Legal Head & Company Secretary.

General: The Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions with respect to these items during the financial year ended 31st March 2018:

- Details relating to deposits covered under Chapter V of the Companies Act, 2013.

- Issue of equity shares with differential rights as to dividend, voting or otherwise.

- Issue of stock options or sweat equity shares.

- No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and the Company’s operations in future.

- Loans, investments, guarantees and securities in terms of Section 186 of the Companies Act, 2013.

INTERNAL FINANCIAL CONTROLS

The Company has in place various internal controls, policies and procedures to ensure orderly and efficient conduct of its business. Standard Operating Procedures (SOPs) and Risk Control Matrix (RCM) have been designed for all critical processes across its operations. The internal financial controls are tested for operating effectiveness through management’s ongoing monitoring and review processes, and independently by the internal auditors. In our view the internal financial controls are adequate and are operating effectively.

DIRECTORS’ RESPONSIBILITY STATEMENT

To the best of their knowledge and belief and according to the information and explanations obtained by them and based on the assessment of the management, the Board of Directors makes the following statements in terms of Section 134 of the Companies Act, 2013:

(a) that in the preparation of the accounts for the financial year ended 31 st March 201 8 the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

(b) that such accounting policies have been selected and applied consistently and judgments and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March 2018 and of the profit of the Company for the financial year ended on that date;

(c) that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(d) that the financial statements for the financial year ended 31st March 2018 have been prepared on a ‘going concern’ basis;

(e) that proper internal financial controls were in place and that such internal financial controls were adequate and were operating effectively; and

(f) that systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.

RELATED PARTY TRANSACTIONS

All the transactions entered into between the Company and its related parties during the financial year ended 31 st March 2018 were in the ordinary course of business and on an arm’s length basis. The particulars of such transactions have been disclosed in the notes to accounts of the Balance Sheet presented in the Annual Report. During the year under review, the Company has not entered into any related party transaction exceeding the threshold limit provided under the Companies Act, 2013/Rules made thereunder and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. A statement of all the related party transactions is placed before the Audit Committee on a quarterly basis, specifying the nature and value of the transactions.

The Company has in place a Policy on Related Party Transactions and a framework for the purpose of assessing the basis of determining the arm’s length price of relevant transactions. The said policy and the framework are annually reviewed by the Audit Committee and the Board of Directors. The same have been posted on the Company’s website. The web-link to access the said policy and framework is as follows: http://mycemco.com/sites/default/files/Related%20Party%20Transaction%20Policy.pdf

RISK MANAGEMENT

One of the factors that distinguish a company’s journey to create sustainable value for its shareholders is its ability to manage the business risks. Many risks exist in the operating environment and may emerge from time to time. The Risk Management processes of the Company ensure that the risks are identified well in time and addressed pro-actively.

The business risks have been classified under the broad heads - strategic, operational, financial and legal & compliance risks. The Company’s Risk Management Policy lays down a bottom-upprocess comprising risk identification, analysis and evaluation, treatment and controlling. Risk owners identify and analyse all risks in their area of operations. The business risks are reviewed by the Senior Management and thereafter evaluated by the Audit Committee and the Board of Directors on a quarterly basis.

VIGIL MECHANISM/WHISTLE BLOWER POLICY The Company has established a vigil mechanism / whistle blower policy to deal with the instances of unethical behaviour, fraud, conflict of interest, mismanagement and violation of the Code of Conduct. The details of the vigil mechanism are given in the Corporate Governance Report and the same has been posted on the Company’s website. The web link to access the said policy is as follows: http://mycemco.com/sites/default/files/HCIL%20Whistle%20Blower%20Policy.pdf

PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT THE WORKPLACE

The Company continues to remain compliant with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, which aims to protect women at workplace against any form of sexual harassment and prompt redressal of any complaint. During FY18, the Company received a complaint of sexual harassment against an employee of the Company, which was dealt with in accordance with the provisions of the said Act.

AUDITORS

In accordance with the provisions of Section 139(1) of the Companies Act, 2013 the members had at the 58th Annual General Meeting (AGM) held on 22nd September 2017appointed S.N. Dhawan & Co. LLP., Chartered Accountants, as statutory auditors of the Company up to the conclusion of the 63rd AGM (FY2017-18 to FY2021 -22). It is proposed to pay remuneration of INR 4.5 million to S.N. Dhawan & Co. LLP., for carrying-out audit for FY2018-19. A resolution for obtaining approval of the members for payment of the abovementioned remuneration to the statutory auditors is included in the Notice convening the AGM. The Board recommends the aforesaid resolution for approval of the members.

The observations of the Auditors in their report on Accounts read with the relevant notes are self-explanatory. The Auditors’ Report does not contain any qualification, reservation or adverse remark.

COST AUDIT

The Company is maintaining cost records in accordance with provisions of Section 148 of the Companies Act, 2013 and the Rules made thereunder.

The Cost Audit for the financial year ended 31st March 2017 was conducted by M/s R.J. Goel & Co., Cost Accountants, Delhi and as required Cost Audit Report was duly filed with the Ministry of Corporate Affairs, Government of India. The Audit of the cost accounts of the Company for the financial year ended 31st March 2018 is also being conducted by the said firm and the Report will be filed within the stipulated time.

In accordance with Section 148 of the Companies Act, 2013 and the Companies (Cost Records and Audit) Rules, 2014 the Board of Directors has on the recommendation of the Audit Committee, appointed M/s. R.J. Goel & Co., Cost Accountants as Cost Auditor of the Company for the financial year 2018-19 on a remuneration of INR 250,000. Pursuant to Section 148(3) of the Companies Act, 2013, a resolution seeking member’s ratification for the remuneration payable to M/s. R.J. Goel & Co., Cost Accountants is included in the Notice convening the AGM. The Board recommends the aforesaid resolution for approval of the members.

SECRETARIAL AUDIT

The Board had appointed M/s. Nityanand Singh & Co., a firm of Company Secretaries in Practice as Secretarial Auditor for carrying out secretarial audit of the Company for the financial year ended 31st March 2018 in accordance with the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. The Report of the Secretarial Auditor is annexed herewith as Annexure ‘E’. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.

PARTICULARS OF EMPLOYEES

The particulars of employees required pursuant to Section 197 of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 shall be provided on request. In accordance with the provisions of Section 136 of the Act, the Board’s Report and the financial statements for the financial year ended 31st March 2018 are being sent to the members and others entitled thereto, excluding the information on employees’ particulars which is available for inspection by the members at the Registered Office of the Company during business hours on all working days up to the date of the ensuing Annual General Meeting. If any member desires to have a copy of the same, he may write to the Company Secretary in this regard.

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars relating to conservation of energy, technology absorption and foreign exchange earnings and outgo, as required under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules 2014, forming part of this Report are annexed as Annexure ‘ F’.

ACKNOWLEDGEMENTS

We are thankful to various agencies of the Central and State Government(s) for their continued support and co-operation.Your Directors are thankful to all stakeholders including Customers, Bankers, Suppliers, Distributors, Dealers, and Contractors for their continued assistance, cooperation and support. The Directors wish to place on record their sincere appreciation to all employees for their commitment and continued contribution to the Company. The Directors are grateful for the confidence, faith and trust reposed by the shareholders in the Company.

For and on behalf of the Board

Place: Gurugram P.G. Mankad

Date: 24th May 2018 Chairman

---

Mar 31, 2017

To the Members,

The Directors are pleased to present the 58^th Annual Report together with the audited accounts of the Company for the financial year ended 31^st March 2017 (FY 2017).

THE YEAR IN RETROSPECT

The year 2016-17 began on a positive note on the back of encouraging fundamentals like subdued inflation, lower commodity prices, declining interest rates, softer crude oil prices and lower current account deficit. Good rainfall after two successive years of scarce rainfall came as major respite for the rural economy. Rise in rural income coupled with mild income boost from the Seventh Pay Commission and One Rank One Pension pay-outs paved the way for much awaited consumption-led recovery. This growth momentum received a setback in the third quarter on account of the demonetization drive. However the GDP is estimated to grow by around 7.1% during the FY 2017. Clearing all hurdles, GST would soon become a reality for India.

The macroeconomic indicators during the year remained encouraging; however its resultant effect was not visible in the cement demand. Low infrastructure spends and tepid demand from the housing segment remained the key reasons for the softening in cement demand. Over-capacity in the cement industry and low capacity utilizations impacted prices and margins. At the end of March 2017, the overall installed cement manufacturing capacity stood close to 440 million tonnes. Cement production during FY2016-17 was about 274* million tonnes compared to 282.5 million tonnes in the corresponding period indicating de-growth of 3%.

* Source: Website of Office of Economic Adviser, Ministry of Commerce and Industry.

FINANCIAL HIGHLIGHTS / REVIEW OF OPERATIONS

The Company has adopted Indian Accounting Standards (Ind-AS) from 1^st April 2016. The financial statements of the Company for the financial year ended 31^st March 2017 are Ind-AS compliant and the corresponding figures for the financial year ended 31^st March 2016 have been restated.

During the year ended 31^st March 2017, the Company produced 4.44 million tonnes of cement compared to 4.43 million tonnes in the year ended March 2016, an increase of 0.3%. Cement sales for the year were 4.47 million tonnes compared to 4.44 million tonnes in the year ended March 2016, an increase of 0.8% by volume. Gross sales in 2016-17 were INR 20,018.5 million compared to INR 19,159.2 million in 2015-16. The net profit in the year 2016-17 was INR 762.1 million compared to INR 353.9 million in 2015-16.

A snapshot of the Company’s financial performance for the financial year ended 31^st March 2017 vis-a-vis performance for the financial year ended 31^st March 2016 is as under: -

(Rs. in Millions)

Particulars	Financial Year ended 31st March 2017	Financial Year ended 31st March 2016
Income
Revenue from Operations (Gross)	20,018.5	19,159.2
Other Income	236.9	224.4
Total Revenue	20,255.4	19,383.6
Earnings before Interest, Tax, Depreciation and Amortization (EBITDA) - including other income	3,025.5	2,536.1
Net Depreciation and Amortization	991.5	997.8
Finance Costs	897.7	1,084.5
Profit before Tax	1,136.3	453.8
Total Tax expense	374.2	99.9
Net Profit for the year	762.1	353.9

On the operations front, during FY 2016-17 the fuel cost increased significantly. Petcoke prices touched a peak of USD 96 per Metric tonne (CIF) compared to the low of USD 40 per Metric tonne (CIF) witnessed at the beginning of the year. International Coal prices too increased in the range of 50% to 60%; however domestic coal prices increased only by about 10% to 15% for various grades. Government increased Clean Environment Cess on coal from INR 200 per tonne to INR 400 per tonne.

The Company had to scout for alternative sources of fly ash as the power plants with which the Company has long term agreements reduced power generation leading to shortage of fly ash. The company managed to reduce logistics cost by 10% on fly ash transportation by optimising the size of vehicles and faster turnaround of vehicles. The Company continued its efforts to reduce logistics cost by rationalising its Rail-Road mix for inward and outward movement of materials.

Reverse auctioning for procurement of bags helped the company contain its packing costs. Besides this, various other cost elements and consumption parameters remain in focus in pursuit to achieve cost leadership.

Sensitivity to ecology and environment has direct bearing on cement and aggregate industry. The ban on sand mining in Uttar Pradesh has impacted the construction industry and therefore the demand of cement too. Notwithstanding the sluggish progress in infrastructure and real estate sector, the Company increased its sales volume marginally.

Through the persistent efforts of sales team and the channel partners, Company’s brand ‘mycem’ has made a mark in the minds of the consumers, enabling the Company to secure premium compared to some of the competing brands. In the year 2015, the Company pioneered the concept of CADS (Channel Authorization Digital Signage), an electronic digital display at the dealers’ shops that aims at building customers’ confidence in channel partners. The Company is also encouraging its dealers to install Point-of-Sale machines (PoS) for collection of sale proceeds through electronic means from their customers/retailers.

TRANSFER TO DEBENTURE REDEMPTION RESERVE

The Company had issued Non-Convertible Debentures aggregating to INR 3700 million carrying interest of 10.4% per annum on 16^th December 2013. It is proposed to transfer, an amount of INR 134.2 million (previous year INR 134.1 million) out of the profits for the financial year ended 31^st March 2017 to the Debenture Redemption Reserve (DRR) to meet the obligations towards the redemption of debentures commencing from 16^th December 2019.

During the year the credit rating in respect of the aforesaid debentures has been upgraded to “IND AA ” (with stable outlook) from “IND AA” by India Ratings and Research Pvt. Ltd., a credit rating agency.

REPAYMENT OF EXTERNAL COMMERCIAL BORROWINGS

The Company had borrowed USD 125 million in nine tranches from January 2011 to October 2012 by way of External Commercial Borrowings (ECB) for the purpose of financing its Damoh-Jhansi expansion project. Each tranche of ECB is repayable after a period of five years from the date of its draw down. The entire amount of ECB is hedged against exchange rate and interest rate fluctuations through cross currency swap agreements. During FY2016-17 fourth, fifth, sixth and seventh tranche of said ECB aggregating to USD 45 million have been repaid. The last two tranches of said ECB of USD 10 million each will become due for payment during the FY2017-18.

DIVIDEND

Pursuant to the provisions of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, the Board of Directors of the Company has formulated a Dividend Distribution Policy. The same has been posted on the Company’s website. The web-link to access the said policy is as follows: http://mycemco.com/sites/default/files/HCIL%20Dividend%20Distribution%20Policy.pdf

After considering the various factors enumerated in the said Policy, including financial performance of the Company during FY 2016-17 and debt repayment schedule, the Board of Directors is pleased to recommend a dividend of INR 2/-(20%) per equity share of INR 10 each for FY 2016-17 for approval of the members at the ensuing AGM. The dividend outgo will be INR 545.5 million (inclusive of a dividend tax of INR 92.3 million).

A STEP TOWARDS CLEAN ENERGY

The Company had commissioned the Waste Heat Recovery-based Power Generation Plant (WHR Plant) at its Narsingarh Plant in Damoh, Madhya Pradesh on 15^th February 2016. The WHR Plant utilises the waste heat generated from the clinker lines at Narsingarh Plant for generating power. During FY 2016-17, WHR Plant stabilised and generated 56.0 million units of power resulting in equivalent reduction in grid power leading to savings in power cost.

ENVIRONMENTAL SUSTAINABILITY

The Company firmly believes in sustainable development and deploys best practices to ensure environment protection and conservation of natural resources. Under the programme “Sustainable Development Goals 2030”, focus is on energy efficiency, water conservation, emission reduction, sanitation and hygiene.

Continuous efforts are made to optimise usage of natural resources following the principles of “Reduction, Recycle and Re-use”. During FY 2016-17, all of the waste water was recycled by all the plants and there was zero municipal solid waste discharge.

Partnership with associations and forums such as Cement Sustainability Initiative of the World Business Council for Sustainable Development, National Safety Council and Confederation of Indian Industry has enabled the Company to stay focussed on matters of sustainability by benchmarking against the best practices.

ENRICHING BIODIVERSITY

Recognizing the importance of biodiversity for sustainable development, the Company has taken several measures for improving air quality, prevention of soil erosion and conservation of flora and fauna. These include development of water bodies and green belt in and around the plants and mines. A master plan is under preparation for developing green areas at all the plant locations. The Company is also encouraging residents in its colonies to develop and nurture small home gardens.

TOUCHING LIVES THROUGH MEANINGFUL CSR INITIATIVES

The Company is committed to the wellbeing of local communities and continues to make its contribution through variety of community development programmes and projects. The Corporate Social Responsibility (CSR) activities of the Company cover healthcare, primary education, rural infrastructure development, vocational training & entrepreneurship. The Company believes that involving local communities in identification and execution of CSR projects strengthens the Company’s bond with relevant stakeholders. During FY17 the Company has spent INR 9.49 million on various CSR activities / projects exceeding the obligations pursuant to Section 135 of the Companies Act, 2013 by a liberal margin.

Industry requires skilled manpower which can be sourced from a large pool of unskilled, unemployed rural youth after imparting them requisite training. The Company consistently conducts training programmes for rural youth for which it has also commenced construction of a training centre which is scheduled to be completed in FY 2017-18. The training centre will include four classrooms and two conference rooms. This will help in enlarging the scope and reach of the training programmes.

To promote education, the company constructed a library hall in a Girls’ hostel and also distributed books to the students residing in the vicinity of its plants. To promote sports, the Company sponsored sports meets in schools in the nearby areas.

The Company continued to extend its support towards development of infrastructure around its plants and mines. Ghats were constructed in District Damoh to facilitate easy access of the villagers to the river. The Company also constructed concrete roads and culverts in Damoh for safe, speedier and smoother connectivity to overcome the commuting problems faced by local people in areas surrounding its plants.

The Company organised free health check-up camps, provided mobile medical services and distributed medicines in the nearby villages. The Company’s Central India plants are situated in water scarce Bundelkhand region, free water was supplied through water tankers to the villages near the Narsingarh plant. In order to improve water storage, the Company helped the district administration by deepening the Singpur pond in Damoh District.

The Report on CSR activities together with the brief outline of CSR Policy of the Company is annexed herewith as ‘Annexure - A’.

OCCUPATIONAL HEALTH & SAFETY

“Nothing is more important to us than the safety of our workers, our subcontractors, and the communities in and near which we operate” says Dr. Bernd Scheifele, Chairman of Heidelberg Cement Group.

Occupational health & safety remains our foremost priority. The Company achieved zero fatality in its operations during the year under review. Top management is fully committed to implementing the high safety standards of the Heidelberg Cement Group. Implementation of cardinal norms on safety and ensuring compliance with the legal obligations and benchmarking against the industry’s best safety practices is a way of life within the Company. All plants are OHSAS 18001:2007 certified.

The Company has continued to focus on embedding strong safety culture top-down and bottom-up. Maiden safety inter-plant audit was carried out by the safety professionals and best practices were implemented across locations. Robust safety observation tours by the functional managers and HODs is practiced across all plant locations. Some notable safety equipment installed in all the plants during FY17 include elevated pull cord on the conveyor belts to protect people working near them and putting guard around all rotating parts of equipment and providing interlocking of motor coupling guards for all electrical drives above 160 kW.

AWARDS AND ACCOLADES

The Company continues to pursue excellence in all areas of its operations, and we are happy to report that it received the following awards and honours:

- Rs.1^st Prize for Overall Performance’ by Mines Safety Association, Karnataka, Zone III for Yerekatte Mines.

- Narsingarh Plant and Jhansi Plant were recognised as Excellent Energy Efficient Units in cement sector by Confederation of Indian Industry at the 15^th Energy Efficiency Summit organised at Hyderabad.

- Jhansi Plant was given ‘Energy Best Practices Award’ and ‘Environment Best Practices Award’ at the National Conclave on recent advances in cement industry organised by Quality Circle Forum of India organised at Hyderabad.

- Diamond Patharia Limestone Mines has been accredited with Five Star Rating* by the Ministry of Mines, Government of India. The accreditation certificate was received from Mr. Piyush Goyal, Hon’ble Minister of Mines on 15^th February 2017 at New Delhi.

- ”Star Rating of Mines” is a new scheme initiated by the Ministry of Mines, Government of India, to recognise the performance of mines by giving them rating ranging from one to five stars. Under the scheme, mines bearing major minerals are evaluated on the parameters relating to sustainable development.

CORPORATE GOVERNANCE

The Company believes in creating and sustaining relationship based on trust and transparency with all its stakeholders. The governance framework enjoins the highest standards of ethical and responsible conduct. All the Directors and employees are bound by the Codes of Conduct setting out the fundamental standards to be followed by them while discharging their duties.

The Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 have further reinforced the governance regime in India. The Company is in compliance with the corporate governance requirements under the Companies Act, 2013 and the SEBI Listing Regulations. Pursuant to the provisions of the listing regulations, a separate section on Corporate Governance, together with a certificate from M/s. Nityanand Singh & Co., a firm of Company Secretaries in Practice, confirming compliance with conditions of Corporate Governance, forms an integral part of this Report. A Management Discussion and Analysis Report is also given as an addition to this Report.

A certificate furnished by Mr. Jamshed Naval Cooper, Managing Director and Mr. Anil Kumar Sharma, Chief Financial Officer in respect of the financial statements and the cash flow statement for the financial year ended 31^st March 2017 is annexed as Annexure ‘B’ to this Report.

BUSINESS RESPONSIBILITY REPORT

In terms of Regulation 34(2)(f) of the SEBI Listing Regulations, a Business Responsibility Report forms part of this Annual Report.

DIRECTORS

There was no change in the Board of Directors during the financial year ended 31^st March 2017. Dr. Albert Scheuer (DIN: 02170574) retires by rotation at the ensuing Annual General Meeting (AGM) and being eligible has offered himself for reappointment. His brief profile is given in the Notice of AGM. The Board recommends his re-appointment by the members at the ensuing AGM.

Independent Directors: Mr. P.G. Mankad (DIN: 00005001), Mr. S. Krishna Kumar (DIN: 01785323) and Mr. Pradeep V. Bhide (DIN: 03304262) were appointed as Independent Directors by the members for a term of five years from 1^st April 2014 up to 31^st March 2019 in the 55^th Annual General Meeting held on 19^th June 2014 and they continue to be on the Board of Directors. All the independent directors have submitted declarations to the Company that they fulfil the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

DISCLOSURES UNDER COMPANIES ACT, 2013

Number of Board Meetings: During the financial year ended 31^st March 2017, four board meetings were held. The details of the same are given in the Corporate Governance Report.

Composition of Audit Committee: The Company has an Audit Committee comprising four members namely, Mr. S. Krishna Kumar (Chairman of the Committee), Mr. P.G. Mankad, Mr. P.V. Bhide and Ms. Soek Peng Sim. Other details about the said Committee are given in the Corporate Governance Report. All the recommendations made by the Audit Committee were accepted by the Board.

Board Evaluation: In accordance with the provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board has carried out an annual evaluation of its own performance, that of the directors individually and that of all the Committees constituted by it, namely, the Audit Committee, Nomination and Remuneration Committee, CSR Committee and the Stakeholders’ Relationship Committee. The manner in which the performance evaluation has been carried out has been explained in the Corporate Governance Report.

Policies for appointment and remuneration of directors:

The Board has, on the recommendation of the Nomination and Remuneration Committee, framed a ‘Nomination and Remuneration Policy’. The policy inter alia lays down the criteria for determining qualifications, positive attributes and independence of potential candidates for appointment as directors and determining their remuneration. The said policy is annexed as Annexure ‘C’ to this Report. The Board has also adopted a ‘Board Diversity Policy’ which requires the Board to ensure appropriate balance of skills, experience and diversity of perspectives in its composition.

Extract of Annual Return: The extract of the Annual Return in the prescribed form, MGT - 9 is annexed herewith as Annexure ‘D’.

Key Managerial Personnel: No changes took place in the Key Managerial Personnel (KMP) during the financial year ended 31^st March 2017. The following persons continue to be the KMP of the Company:-

- Mr. Jamshed Naval Cooper, Managing Director;

- Mr. Sushil Kumar Tiwari, Whole-time Director;

- Mr. Anil Kumar Sharma, Chief Financial Officer; and

- Mr. Rajesh Relan, Legal Head & Company Secretary.

General: The Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions with respect to these items during the financial year ended 31^st March 2017:

- Details relating to deposits covered under Chapter V of the Companies Act, 2013.

- Issue of equity shares with differential rights as to dividend, voting or otherwise.

- Issue of stock options or sweat equity shares.

- No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and the Company’s operations in future.

- Loans, investments, guarantees and securities in terms of Section 186 of the Companies Act, 2013.

INTERNAL FINANCIAL CONTROLS

The Company has in place various internal controls, policies and procedures to ensure orderly and efficient conduct of its business. Standard Operating Procedures (SOPs) and Risk Control Matrix (RCM) have been designed for all critical processes across all plants, warehouses and offices. The internal financial controls are tested for operating effectiveness through management’s ongoing monitoring and review processes, and independently by the internal auditors. In our view the internal financial controls are adequate and are operating effectively.

DIRECTORS’ RESPONSIBILITY STATEMENT

To the best of their knowledge and belief and according to the information and explanations obtained by them and based on the assessment of the management, the Board of Directors makes the following statements in terms of Section 134 of the Companies Act, 2013:

(a) that in the preparation of the accounts for the financial year ended 31^st March 2017 the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

(b) that such accounting policies have been selected and applied consistently and judgments and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31^st March 2017 and of the profit of the Company for the financial year ended on that date;

(c) that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(d) that the financial statements for the financial year ended 31^st March 2017 have been prepared on a ‘going concern’ basis;

(e) that proper internal financial controls were in place and that such internal financial controls were adequate and were operating effectively; and

(f) that systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.

RELATED PARTY TRANSACTIONS

All the transactions entered into between the Company and its related parties during the financial year ended 31^st March 2017 were in the ordinary course of business and on an arm’s length basis. The particulars of such transactions have been disclosed in the notes to accounts of the Balance Sheet presented in the Annual Report. During the year under review, the Company has not entered into any related party transaction exceeding the threshold limit provided under the Companies Act, 2013 / Rules made thereunder and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. A statement of all the related party transactions is placed before the Audit Committee on a quarterly basis, specifying the nature and value of the transactions.

The Company has in place a Policy on Related Party Transactions and a framework for the purpose of assessing the basis of determining the arm’s length price of relevant transactions. The said policy and the framework are annually reviewed by the Audit Committee and the Board of Directors. The same have been posted on the Company’s website. The web-link to access the said policy and framework is as follows: http://mycemco.com/sites/default/files/Related%20Party%20Transaction%20Policy.pdf

RISK MANAGEMENT

One of the factors that distinguish a company’s journey to create sustainable value for its shareholders is its ability to manage the business risks. Many risks exist in the operating environment and emerge on a regular basis. The Risk Management processes of our Company focus on ensuring that these risks are identified and evaluated in a timely manner and addressed proactively.

The business risks have been classified under the broad heads - strategic, operational, financial and legal & compliance risks. The Company’s Risk Management Policy lays down a bottom-up process comprising risk identification, analysis and evaluation, treatment and controlling. Risk owners identify and analyse all risks in their area of operations. The business risks are reviewed by the Senior Management and thereafter evaluated by the Audit Committee and the Board of Directors on a quarterly basis.

VIGIL MECHANISM/WHISTLE BLOWER POLICY

The Company has established a vigil mechanism / whistle blower policy to deal with the instances of unethical behaviour, fraud, conflict of interest, mismanagement and violation of the Code of Conduct. The details of the vigil mechanism are given in the Corporate Governance Report and the same has been posted on the Company’s website. The web link to access the said policy is as follows: http://mycemco.com/sites/default/files/HCIL%20Whistle%20Blower%20Policy.pdf

AUDITORS

The observations of S.R. Batliboi & Co. LLP., Statutory Auditors in their report on Accounts for the financial year ended 31^st March 2017 read with the relevant notes are self-explanatory. The Auditors’ Report does not contain any qualification, reservation or adverse remark.

Section 139 of the Companies Act, 2013 read with the Companies (Audit and Auditors) Rules, 2014 provides for mandatory rotation of statutory auditors after completion of tenure as stated therein. The term of office of the present statutory auditors of the Company, S.R. Batliboi & Co. LLP., will end after the closure of the ensuing AGM. The Board places on record its appreciation for the valuable services rendered by S.R. Batliboi & Co. LLP, during their tenure.

The Board of Directors at its meeting held on 9th February 2017 had considered and recommended for approval of the members, the appointment of S.N. Dhawan & Co. LLP., as statutory auditors of the Company to hold office from the conclusion of 58th Annual General Meeting until the conclusion of 63rd Annual General Meeting (FY 2017-18 to FY 2021-22) Accordingly, a Resolution seeking member’s approval for the appointment of S.N. Dhawan & Co. LLP., Chartered Accountants, as statutory auditors of the Company is included at Item No. 3 of the Notice convening the AGM. S.N. Dhawan & Co. LLP., have given their consent and confirmed their eligibility under Section 141 of the Companies Act, 2013 and the Rules made thereunder for their appointment as statutory auditors of the Company. The Board recommends the aforesaid resolution for approval of the members.

COST AUDIT

The Cost Audit for the financial year ended 31^st March 2016 was conducted by M/s R.J. Goel & Co., Cost Accountants, Delhi and as required Cost Audit Report was duly filed with the Ministry of Corporate Affairs, Government of India. The Audit of the cost accounts of the Company for the financial year ended 31^st March 2017 is also being conducted by the said firm and the Report will be filed within the stipulated time.

In accordance with Section 148 of the Companies Act, 2013 and the Companies (Cost Records and Audit) Amendment Rules, 2014 the Board of Directors has on the recommendation of the Audit Committee, appointed M/s. R.J. Goel & Co., Cost Accountants as Cost Auditor of the Company for the financial year 2017-18 on a remuneration of INR 2,50,000. Pursuant to Section 148(3) of the Companies Act, 2013, a resolution seeking member’s ratification for the remuneration payable to M/s. R.J. Goel & Co., Cost Accountants is included at Item No. 7 of the Notice convening the AGM. The Board recommends the aforesaid resolution for approval of the members.

SECRETARIAL AUDIT

The Board had appointed M/s. Nityanand Singh & Co., a firm of Company Secretaries in Practice as Secretarial Auditor for carrying out secretarial audit of the Company for the financial year ended 31^st March 2017 in accordance with the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. The Report of the Secretarial Auditor is annexed herewith as Annexure ‘E’. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.

PARTICULARS OF EMPLOYEES

The particulars of employees required pursuant to Section 197 of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 shall be provided on request. In accordance with the provisions of Section 136 of the Act, the Board’s Report and the Accounts for the financial year ended 31^st March 2017 are being sent to the members and others entitled thereto, excluding the information on employees’ particulars which is available for inspection by the members at the Registered Office of the Company during business hours on all working days up to the date of the ensuing Annual General Meeting. If any member desires to have a copy of the same, he may write to the Company Secretary in this regard.

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars relating to conservation of energy, technology absorption and foreign exchange earnings and outgo, as required under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules 2014, forming part of this Report are annexed as Annexure ‘F’.

ACKNOWLEDGEMENTS

Your Directors are thankful to all stakeholders including Customers, Bankers, Suppliers, Distributors, Dealers, and Contractors for their continued assistance, co-operation and support. The Directors wish to place on record their sincere appreciation to all employees for their commitment and continued contribution to the Company. The Directors are grateful for the confidence, faith and trust reposed by the shareholders in the Company. We are thankful to various agencies of the Central and State Government(s) for their continued support and co-operation.

For and on behalf of the Board

Place: Gurugram P.G. Mankad

Date: 25^th May 2017 Chairman

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Dec 31, 2012

TO THE MEMBERS,

The Directors of your Company are pleased to present the 54th Annual Report together with the audited accounts of the Company for the year ended 31st December 2012.

THE YEAR IN RETROSPECT

The year under review was a challenging year; the Indian economy continued to face serious domestic as well as external challenges. The decline in the growth rate of the Gross Domestic Product (GDP), as also in industrial activity and investments, continued. Apart from overall growth slippage, inflation remained a major concern leading to higher input costs, putting pressure on margins.

Economic slowdown and a declining GDP trend, especially deceleration in infrastructure investments and projects adversely impacted the cement industry. In this backdrop, the Indian Cement sector grew by 6.9%.

By the time the year 2012 drew to a close, the country''s overall installed cement manufacturing capacity had risen to about 330 million tonnes in terms of industry estimates. Effective capacity utilization is estimated to have remained in the range of about 75% to 80%.

The Indian Cement Industry, during the year, witnessed once again a continuation of last two years'' trends, where the first half of the year was buoyant and the latter half sluggish, both in terms of demand and prices. Demand was weak in the second half primarily on account of lower infrastructure spending and slowdown in the realty sector due to high interest rates.

A GLANCE AT THE FINANCIAL PERFORMANCE

Despite the challenges, your Company registered an upswing in its turnover during the year. Gross revenues from operations for the year ended 31st December, 2012 were up by 12.8%, at MINR 12766.3, compared to gross revenues for the previous year, at MINR 11319.4.

Despite an unabated rise in costs, EBITDA (Earnings before interest, tax, depreciation and amortisation) grew by 13% (MINR 876.8 against MINR 776.1 for the previous year) on account of better realizations and operational efficiencies. Net profit stood at MINR 308.4 against net profit of the previous year (MINR 291.7) registering a growth of 5.7%.

A snapshot of your Company''s financial performance for the year ended 31st December 2012 vis-à-vis performance for the previous year ended 31st December, 2011 is as under:-

(Rs. in Millions)

Particulars Year ended Year ended 31st December 2012 31st December 2011

Revenue from Operations (Gross) 12766.3 11319.4

Revenue from Operations (Net of Excise Duty) 11039.5 9879.6

Other Income 104.7 118.4

Total Revenue 11144.2 9998.0

Earnings before Interest, Tax, Depreciation and Amortization (EBITDA) 876.8 776.1

Finance Costs (105.3) (38.5)

Net Depreciation and Amortization (314.9) (314.0)

Profit before tax 456.6 423.6

Total Tax Expense 148.2 131.9

Net Profit for the year 308.4 291.7

EBITDA margins were close to 8% of total revenue. A graphic presentation of EBITDA and Costs as a percentage to the total revenues during the year under review is given below:

REVIEW OF OPERATIONS

On the operations front, cost challenges continued to be a cause of concern, particularly power, freight and raw material. Due to depreciation of the Rupee, imported gypsum became dearer. Through stringent quality checks, your Company has been able to meet its requirement of gypsum through indigenous sources with higher purity levels. However, availability of Gypsum continued to be a challenge in certain parts of the country.

The year also saw an increase in diesel prices which impacted the Company both directly and indirectly. PP granule prices saw a spurt by about 14% leading to an increase in the price of PP bags. Coal India introduced a new system of coal pricing based on gross calorific value with effect from the start of the year, which was subsequently rolled-back partially. This resulted in an increase in coal prices for cement industry in the range of 10-15%. Overall there was increase of 14.51% in the total cost of production.

Pet coke prices remained relatively stable due to availability from certain new sources. Pet coke being a more economical fuel than coal, your Company has successfully altered its fuel mix by increasing pet coke consumption levels year on year. In operations also, the consumption parameters have shown definite improvement and we have bettered our incorporation ratios. Our strategy to increase road dispatches, in view of the steep hike in railway freight towards the end of the first quarter of 2012, has yielded results and during the year your Company crossed the initial target of one million tonne road dispatches in Central India.

Consistent good quality of the product has enabled the Company to meet the expectations of its discerning customers and create and sustain the image of its brand "mycem". Brand visibility helped your Company expand its channel network. During 2012 over 600 dealers and about 2,000 retailers were added to the network. To strengthen its bond with channel partners, the Company conducted number of training programs for its dealers.

BROWNFIELD EXPANSION IN CENTRAL INDIA

Your Company is now poised for growth, strengthening its presence in Central India through implementation of the brownfield expansion project in U.P. and M.P. The expansion project at Jhansi Unit in U.P. has been successfully completed and commercial production from the new plant at Jhansi commenced on 16th January 2013. Trial runs at the new plants at Narsingarh and Imlai in Damoh (M.P.) have started and commercial production is expected to commence shortly.

The expanded capacities of the plants will be as under:-

a. Cement grinding capacity of the plant at Jhansi (U.P.) has increased from 0.8 to 2.7 million tonnes per annum.

b. Clinker manufacturing capacity of the plant at Narsingarh, District Damoh (M.P) will increase from 1.2 to 3.1 million tonnes per annum.

c. Cement grinding capacity of the plant at Imlai, District Damoh (M.P) will increase from 1.0 to 2.0 million tonnes per annum.

One of the key highlights of the project is the construction of around 20 kilometers long Overland Belt Conveyor (OLBC), one of the longest in the Country, for transportation of limestone from the mines at Patharia to the Clinkerisation unit at Narsingarh.

Capital expenditure on the entire expansion project is about MINR 15700 (including interest during the construction period that has been capitalized), which has been funded through a mix of internal accruals, External Commercial Borrowings (ECB) from the promoter group and term loans from Indian Banks. Post expansion, the cement manufacturing capacity of the Company in Central India will increase by 2.9 million tonnes per annum and the total cement manufacturing capacity of the Company will increase to 6 million tonnes per annum.

DIVIDEND

With the objective of long term value creation for the shareholders, your Directors have recommended conservation of internal resources in place of dividend distribution.

FUTURE OUTLOOK

The current year is a year of transformation as well as challenges for the Company; anticipation of growth and earnings on the one hand and challenges posed by intensifying competition and a trying environment on the other.

As you are aware, a declining trend in the GDP and a slowdown in economic activity, especially in the infrastructure investments and projects, have a direct impact on industries like cement. While we may hope that the recent economic reforms initiated so far by the government will bring about a resurgence in the economy, from which the Company will also benefit, we can not overlook the impact of the slowdown and related factors on the performance of the cement industry as a whole and on that of your company specifically.

Going forward, during 2013, based upon an anticipation of significant government spending on infrastructure in the next five years and an improved focus by the Government on the housing and infrastructure sectors, cement demand is expected to achieve a growth rate of about 8% during the current year.

The new manufacturing capacities, will enable the Company to increase its market share in Central India and also increase deliveries in other markets including Bihar, Punjab, Haryana and Uttarakhand. In the current year, our endeavour is to maximize volumes at optimal logistics cost and improve realizations. This would require nurturing existing markets as well as developing new ones. Your Directors are confident that with the help of a committed sales team and strong product quality, the Company will successfully carve a niche for its brand "mycem" in new markets and will continue to improve its brand positioning in the existing ones.

Apart from economies of scale due to enhanced volumes, post expansion, the profitability drivers will include savings in transportation costs and power and fuel consumption and also tax benefits pursuant to MP Industrial Promotion policy.

BUILDING ON SUSTAINABILITY

Sustainability is a part of our Group''s vision statement. "Heidelberg Cement has activities in 50 countries and its goal of sustainable development is shared by all group areas and business lines.

Environmental Sustainability

We seek to contribute to environmental sustainability by incorporating environmental considerations at every stage in business decision making. Towards this goal, during the year under review, the following initiatives were taken:

- Continuous Stack Monitoring System and Continuous Ambient Air Quality Monitoring Stations were installed at all the plants so that the emission data is monitored and directly updated at the websites of the Pollution Control Boards.

- The Company procured Auto Road Sweeper to prevent generation of fugitive emission at Narsingarh and Imlai plants. An Auto Road sweeper is being procured for Jhansi Unit also.

- A number of varieties of saplings were planted by developing Green Belt to improve the environment.

- Trainings on environmental legislations were conducted at all the plants.

- Rehabilitation of the existing Kiln ESP hybrid filters of Line 1 & 2 were done for air pollution control at Narsingarh plant, Damoh (M.P.).

- Clinker wagon loading facility at Imlai grinding unit was upgraded to control fugitive emissions.

- Plastic waste incineration in the kiln at Narsingarh is done on a regular basis.

- Garland drain, retaining wall, settling tank, check dams and De-composition pit constructed at Yerakatte Limestone Mines, Ammasandra (Karnataka).

- Bag filter installed at mill feeding clinker belt conveyor transfer point at Raigad plant (Maharashtra) to control fugitive emissions.

A Step Towards Green Energy

Confirming HeidelbergCement Group''s commitment to sustainability, the Board of Directors has approved the setting up of an eco-efficient Waste Heat Recovery based Power Generation Plant at its Clikerisation unit at Narsingarh, District Damoh (M.P.). The proposed plant envisages production of approximately 12.15 MW of power from available waste heat of pyro-processing system of all three clinkerisation lines at Narsingarh. It will substitute equivalent grid power and thus reduce power cost per ton of clinker, meeting the twin goals of ecological conservation and economic added value.

The project cost is estimated to be in the range of MINR 1450 to MINR 1500 and it is likely to be operational in January 2015.

Making a Difference Through CSR

Social responsibility is the third pillar of our sustainability vision. The Company continued to engage with the local communities by encouraging their participation in various welfare and development activities, which has served to strengthen our relationships. The Company contributed to the economic and social development of the local communities, in the regions where it has presence, by focusing on healthcare, education and improvement of the surroundings.

Every Plant has a medical centre along with an Ambulance to provide timely medical help and treatment. The Company organized free health check-up camps for the residents of the surrounding villages, which included orthopedic and eye examination for old people. The awareness was also spread about hygiene and health care issues. Family welfare programs were also organized.

In order to tackle the problem of water shortage a check dam was constructed on the river Tillu Jhiriya, which fulfils the daily requirements of the people of Narsingarh village. In the vicinity of some of the Company''s plants, villagers were provided treated water from the plants, wherever applicable. The Company also got old wells and ponds in the surrounding areas cleaned, deepened and renovated. Bore wells were also installed at certain places.

Development activities such as construction of rest sheds, community halls, cremation sheds, concreting the floor of a school, passenger facilities at local bus stands in nearby villages were also completed during the year under review. A driving school has been established to impart training to local youth and they are being engaged by transporters and travel agencies. With the help of social clubs, the Company organized training programs for women to enable them to learn stitching and tailoring etc., so that they can fruitfully engage themselves and improve their standard of living.

The schools assisted by your Company continue to provide education of high standard not only to the children of the Company''s employees but also to the children from the surrounding villages. Various sports and cultural events were organized at the schools to ensure a holistic development of the students, where children from other schools also participated. Education Centres have been opened with the objective of providing basic education to the wives of labourers.

On the occasion of World Environment Day, to spread environmental consciousness amongst people, saplings were planted and cloth bags were distributed to curb the use of plastic bags.

Awareness was spread amongst the villagers regarding the need to protect the environment and ecology.

OCCUPATIONAL HEALTH & SAFETY

"There''s one figure we want to keep at zero : the accident rate" is the motto of the HeidelbergCement Group. In line with this objective, the Company is committed to achieving zero accident and injury frequency rate1 across all its plants, mines and at projects / construction sites. Appropriate systems have been put in place for the purpose, including guidelines on energy isolation, machine guarding, working at height and project safety in construction. Relentless efforts are made for continual improvement on the basis of past experience and best safety practices, including continuous surveillance by plant safety team to monitor industrial activities in plants and vigil of the HoDs to ensure safe working environment.

Safety trainings on different aspects are conducted which help in developing safe working culture by focusing on behavior and attitude of individuals. Various contests and competitions were organized to motivate employees for creating safe working environment. A system of rewards and penalties has also been put in place and the same is being applied judiciously in the interest of safety. During implementation of the expansion project, substantial time, money and effort was invested to ensure that health & safety remained a focal point and no compromises were allowed. However, despite our best efforts, there were two fatalities during the year 2012. The chart given below shows the number of lost time injuries during the last few years :-

- "Lost Time Injury" means work related injury which causes the absence of an employee for one or more workdays.

- Lost Time Injury incident figures are combined for Operations (1 LTI) and Projects (4 LTI).

The Company stands committed to achieve "Zero Harm" Safety performance. We forego operational benefits and adherence to time schedules if there is any cause of concern relating to safety. Towards this goal, during the year under review the following steps were ensured :-

- Standard Operating Procedures containing step by step procedures and permit system for safe working are in place for all the critical activities and the same were revisited, wherever necessary.

- Risk Assessment for all activities and communication about the risks involved, control measures and safe plan of action is communicated to all involved for safe working.

- Safety is our foremost priority. In order to give utmost importance to Safety, organizational structure has been changed with no reporting lines to Plants.

- Training on different safety aspects is regularly imparted at all locations based on theme of the month.

- Group Safety week was observed at all the plants and project sites during 14th to 20th October 2012. During the week practical safety demonstrations and safety trainings were conducted. Safety Quiz, Poster, Extempore Speech, Slogan competitions were organized to instill a strong safety culture.

- All Heads of Departments take safety rounds to ensure proper implementation of all safety control measures.

- Frequency of the "Safety Committee meeting" has been increased from monthly to weekly.

- Corporate Safety Head conducts reviews of all the plants, mines and other offices at regular intervals and observations / findings are discussed with all concerned for ensuring effective compliance.

- Material handling procedure was revisited. Forklift at Ammasandra plant and new generation hydra crane with in-built safety features was introduced at Imlai plant to ensure safety of human beings.

- As a part of "Access Control", changed the design of workstation of ropeway attendant, motorized gate has been provided at Narsingarh plant.

- Implementation of Lock out Tag Out (Electrical Isolation system) at Ammasandra unit.

- Policy on restriction on "Night Time Highway Driving" introduced to ensure off-the-job safety of employees.

- On Going activities include implementation of Group Safety guidelines, Safety Inspections and ensuring corrective actions, Daily Safety Gate Meetings, Knowledge/ experience sharing by Line Managers, HODs, Plant Head, Unit Head, Safety Head, Safety Person of the month and Screening of a film on Safety.

AWARDS AND ACCOLADES

During the year, we earned a number of awards and honours from various Ministries and Industry bodies.

The "National Safety Award" was received from the Hon''ble President of India, Mr. Pranab Mukherjee at Vigyan Bhawan, New Delhi on 21st November, 2012. Narsingarh Limestone Mine was declared a winner for "Lowest Injury Frequency Rate" in Metal Mines - Mechanized opencast with manshift < 0.5 lacs at country level for the year 2009.

- During the Mines Environment & Mineral Conservation Week held in Jabalpur Region, the Indian Bureau of Mines awarded our Patharia Limestone Mines in the category of "Fully Mechanized Mines", First Prize in Reclamation & Rehabilitation and Management of Sub-Grade Minerals, Second Prize in Top Soil Management and Publicity and Third Prize in overall Performance for the year 2011-12 .

- Clinkerisation Unit at Narsingarh was awarded ''National Energy Conservation Award - 2012'' by the Ministry of Power, Govt. of India.

- Narsingarh Limestone Mine was awarded First prize for "Overall Safety Performance" during Metalliferrous Mines Safety Week celebrations in Jabalpur Region, in Mechanized ''A'' Category Mines.

- The Expansion Project at Damoh received the prestigious RoSPA (The Royal Society for the Prevention of Accidents, UK) Award 2012 with the Highest Award GOLD category for the Organization''s commitment to improve workplace health and safety.

CORPORATE GOVERNANCE

''Securing Success through Ethics, Transparency and Accountability'' is our Company''s Corporate Governance Philosophy. Your Company fully stands by the standards set out by the Securities and Exchange Board of India for Corporate Governance practices.

Pursuant to Clause 49 of the Listing Agreement with the Stock Exchanges, a separate section on Corporate Governance, together with a certificate from a Practicing Company Secretary confirming compliance with conditions of Corporate Governance, forms part of this Annual Report.

Pursuant to clause 49 of the Listing Agreement, Management Discussion and Analysis Report is given as an addition to this Report.

A certificate furnished by Mr. Ashish Guha, CEO & Managing Director and Mr. Anil Sharma, Chief Financial Officer in respect of the financial statements and the cash flow statement for the year ended 31st December 2012 is annexed as Annexure ''C''.

DIRECTORS

Dr. Bernd Scheifele, Dr. Lorenz Naeger and Mr. S. Krishna Kumar, Directors of the Company retire by rotation at the ensuing Annual General Meeting (AGM). The retiring Directors being eligible have offered themselves for re- election by the members at the said AGM.

The Board recommends the re-appointment of the aforesaid Directors.

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to the requirements of Section 217(2AA) of the Companies Act, 1956, the Directors, to the best of their knowledge and belief and according to the information and explanations obtained by them, confirm & declare that they have taken all reasonable steps, as are required, to ensure that:

(a) The applicable accounting standards have been followed in the preparation of the annual accounts for the year ended 31st December 2012 and no departures have been made there from;

(b) They have selected such accounting policies and applied them consistently and they have made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of your Company as at 31st December, 2012 and of the profit of your Company for the year ended on that date;

(c) They have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of your Company and for preventing and detecting frauds and other irregularities; and

(d) The annual accounts for the year ended 31st December, 2012 are prepared on a going concern basis.

AUDITORS

The Auditors'' observations in their Report and the relevant notes to the accounts are self-explanatory. The Statutory Auditors, M/s. S.R. Batliboi & Co., Chartered Accountants, who were appointed at the last Annual General Meeting held on 25th April 2012, have expressed their unwillingness for re- appointment as Statutory Auditors at the ensuing AGM.

Your Directors'' recommend the appointment of M/s. S.R. Batliboi & Associates, Chartered Accountants as Statutory Auditors for the ensuing term. The said Auditors have confirmed that their re-appointment, if made, shall be within the limit laid down under Section 224(1B) of the Companies Act, 1956.

COST AUDIT

Pursuant to the directives of the Ministry of Corporate Affairs, your Company appointed Mr. A. Nagaraja, Cost Accountant as Cost Auditor of the Company under Section 233B of the Companies Act, 1956 for the year 2012. The Cost Audit Report for the year ended 31st December 2012 will be submitted to the Ministry within the stipulated time.

PARTICULARS OF EMPLOYEES

Particulars of employees as required under Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 as amended are given in the enclosed statement forming part of this Report as Annexure ''A''.

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars relating to conservation of energy, technology absorption and foreign exchange earnings and outgo, as required under section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules 1988, forming part of this Report are annexed as Annexure ''B''.

ACKNOWLEDGEMENTS

We are thankful to various agencies of the Central and State Government(s) for their continued support and co-operation. Your Directors are thankful to all stakeholders including Customers, Bankers, Suppliers, Distributors, Dealers, and Contractors for their continued assistance, co-operation and support. The Directors wish to place on record their sincere appreciation to all employees for their commitment and continued contribution to the Company. The Directors are grateful for the confidence, faith and trust reposed by the shareholders in the Company.

For and on behalf of the Board

Sd/-

Place: Gurgaon P.G. Mankad

Date : 11th February 2013 Chairman

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Dec 31, 2011

The Directors of your Company are pleased to present the 53rd Annual Report together with the audited accounts of the Company for the fi nancial year ended 31st December 2011.

ECONOMIC SCENARIO

India's GDP growth has been slowing down over the period due to various external and internal factors, including the adverse impact of crude oil prices, continuing inflationary pressures, high interest rates and a perception of slow down in economic decision making among investors leading to a decline in investment flows. An uncertain external environment, the sharp depreciation of the Rupee against the US Dollar in the last quarter and the decline in various indices of economic performance have also been cause of concern for policy makers and industry. The estimates for GDP growth have consequently been lowered to around 7% for the fiscal 2011-12.

REVIEW OF OPERATIONS

Production and Sales figures of the Company in quantitative terms are as under:

Financial year ended Financial year ended 31st December 2011 31st December 2010

Production (in tonnes)

-Clinker 1,450,303 13,36,805

-Cement 2,853,682 26,45,725

-GGBS 21,550 15,993

Sales (in tonnes)

-Clinker 68,964 81,449

-Cement 2,812,017 26,09,254

-GGBS 20,679 17,151

Your Company sold 2.81 million tonnes of cement in 2011 which is the highest ever cement sales in the history of the Company.

The brand of your Company "Mycem" continued its journey northward garnering higher premiums and better market positioning. Sustained good quality of cement assisted the brand in improving customer acceptance. Technical services to consumers facilitated in improving the overall product satisfaction. A recent study by Nielsen to gauge customer satisfaction for "Mycem" confi rms the above. Brand visibility helped us to attract new channel partners and retain the existing ones. With the focus on the upcoming expansion, our team successfully added over 250 dealers and about 1500 retailers. The Company also conducted number of training programs for dealers and a mega event for C&F Agents and Platinum Dealers.

During the year sharp rise in input costs without any significant increase in realizations impacted margins. During February 2011, linkage coal prices increased in the range of 30% to 150% for various grades. Besides the price of coal, its shortage also troubled the industry. Strike at Singareni Collieries Company Limited, excessive monsoon in Eastern and Central India and the labour strike at Coal India and its subsidiaries severely impacted the coal production. During the year power tariff was also increased as a result of increase in coal prices.

Shortage of coal affected power generation adversely, thereby reducing the fl y ash availability. Some power plants were forced to use low ash imported coal which further decreased the availability of fl y ash. Shortage of fl y ash necessitated incorporation of more clinker for manufacturing Portland Pozzolana Cement (PPC) at Imlai unit thereby eroding margins. Bottlenecks at port near Raigad lead to shortage of clinker at Raigad unit.

Poor quality and unavailability of gypsum locally, forced your Company to import gypsum. The weakening of Rupee increased the cost of imported Gypsum by about 10%. Significant cost increases were also witnessed in petcoke, slag and bags. Freight cost for transportation by road increased due to increase in diesel price. Railway freight for Cement and Coal was also increased during the year. Imposition of excise duty on fl y ash & coal, enhancement of excise duty on cement and HSD price hike further aggravated the position. In the wake of all round cost pressures the Company continued its relentless drive to improve the consumption parameters, wherever possible.

FINANCIAL HIGHLIGHTS

The Company achieved gross sales of Rs.112662.56 lacs during the fi nancial year ended 31st December 2011, against Rs. 98537.07 lacs during the financial year ended 31st December 2010. The net profit of the Company during the financial year ended 31st December 2011 was Rs.2917.25 lacs as compared to the net profit of Rs. 6,329.95 lacs during the financial year ended 31st December 2010.

The snapshot of your Company's performance for the financial year ended 31st December 2011 vis-à-vis its performance in the previous year ended 31st December, 2010 is as under:-

(Rs. in lacs) Financial year ended Financial year ended 31st December 2011 31st December 2010 Earnings before Interest, Depreciation and Taxes (EBIDTA) 7,759.97 12,900.82

Less :

- Finance Charges (383.75) (421.31)

- Depreciation / Amortization (3,139.88) (2,884.88)

(3523.63) (3,306.19)

Earnings before taxes (EBT) 4,236.34 9,594.63

Less:

- Deferred Tax Credit (296.81) (1,365.12)

- Provision for Income Tax (1,022.28) (1,899.56)

1,319.09 (3264.68)

Net Profit 2,917.25 6,329.95

Less: Dividend on 9% Cumulative Redeemable Preference Shares - (50.83)

(including Corporate Dividend Tax of Rs. 7.24 lacs).

Add: Balance b/f from the previous year 9707.53 4,777.75

Less: Amount Transferred to Capital Redemption Reserve - (1,349.34)

Profit / (Loss) carried to Balance Sheet 12,624.78 9,707.53

CAPACITY EXPANSION

The work on the expansion projects at Damoh & Jhansi units to enhance the aggregate installed capacity of the Company from 3.07 MTPA to 6 MTPA is at an advanced stage and it expected that the commercial production will commence in the first half of the year 2012. In view of the same the Company has already started seeding the markets of Bihar and has plans to commence deliveries in Uttrakhand, Delhi and Haryana also. Your Company will further increase its dealers and retailers network and open new sales offices in 2012.

DIVIDEND

In view of the requirement of funds for the expansion projects at Damoh and Jhansi units, your Directors have decided not to recommend any Dividend on the equity shares for the financial year ended 31st December 2011.

RE-APPOINTMENT OF DIRECTORS

Mr. P.G. Mankad, Mr. Amitabha Ghosh and Dr. Albert Scheuer, Directors of the Company retire by rotation at the ensuing Annual General Meeting (AGM) of the Company. While Mr. Mankad and Dr. Scheuer are eligible and have offered themselves for re-election at the forthcoming AGM, Mr. Ghosh due to personal reasons has not offered himself for re-election.

The Company has been privileged in having on its Board of Directors a person of Mr. Ghosh's eminence, and he has also contributed signifi cantly as the Chairman of the Audit Committee. The Board places on record its appreciation of his contributions during his tenure.

The Board proposes that the vacancy caused by the retirement of Mr. Amitabha Ghosh shall not be fi lled up at the ensuing Annual General Meeting in terms of Section 256 of the Companies Act, 1956.

The Board recommends the re-appointment of Mr. P.G. Mankad and Dr. Albert Scheuer at the ensuing AGM.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to the requirements of Section 217(2AA) of the Companies Act, 1956, the Directors, to the best of their knowledge and belief and according to the information and explanations obtained by them, confi rm & declare that they have taken all reasonable steps, as are required, to ensure that :

(a) The applicable accounting standards have been followed in the preparation of the annual accounts for the financial year ended 31st December 2011 and no departures have been made there from;

(b) They have selected such accounting policies and applied them consistently and they have made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of your Company as at 31st December, 2011 and of the profit of your Company for the year ended on that date;

(c) They have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of your Company and for preventing and detecting frauds and other irregularities; and

(d) The annual accounts for the financial year ended 31st December, 2011 are prepared on a going concern basis.

AUDITORS

The Statutory Auditors, M/s. S.R. Batliboi & Co., Chartered Accountants, who were appointed at the last Annual General Meeting held on 10th June 2011, hold office up to the conclusion of the ensuing AGM and are eligible for re-appointment. The said Auditors have confirmed that their re-appointment, if made, shall be within the limit laid down under Section 224(1B) of the Companies Act, 1956. The Auditors' observations in their Report and the relevant notes to the accounts are self-explanatory.

COST AUDIT

Pursuant to the directives of the Ministry of Corporate Affairs, your Company has appointed Mr. A. Nagaraja, Cost Accountant as Cost Auditors of the Company under Section 233B of the Companies Act, 1956 for the year 2011. Cost Audit Report for the year 2010 was filed with Ministry of Corporate Affairs on 28th June 2011.

The Cost Audit Report for the year 2011 will be submitted to the Ministry within six months of the close of the financial year i.e., on or before 30th June 2012.

CORPORATE GOVERNANCE REPORT

In terms of Clause 49 of the Listing Agreement with the Stock Exchanges a report on Corporate Governance is included in the Annual Report. A Certificate from a Practising Company Secretary on compliance of conditions of Corporate Governance is also annexed to the Corporate Governance Report.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Pursuant to clause 49 of the Listing Agreement, Management Discussion and Analysis Report is given as addition to this Report.

HUMAN RESOURCES

During the year, Industrial Relations remained harmonious and employees at all levels demonstrated a high degree of commitment towards achieving the Company's goals. Long term wage settlement has been signed for all plants for a period of four years.

The Company has focused on various measures to attract and retain talent, including the creation of a satisfying working environment, encouraging worker participation in productivity and quality initiatives, providing opportunities for skill up gradation and career advancement, and recognizing and rewarding good performance.

Training, communication, structured induction process, discussion and feedback sessions and soft skill development remained some of the key areas of human resource development.

OCCUPATIONAL HEALTH & SAFETY

Health and safety remains an area of very high priority for the Company.

The Company's objective, in line with that of the Heidelberg Cement Group, is to achieve the lowest possible injury frequency rate across all its units, at construction as well as at operational stages. It has put in place appropriate systems for this, including guidelines on project safety in construction, regular monitoring, and eff orts at improvement on the basis of experience and detailed analysis of the root causes of unsafe conditions or practices. Continuing training and constant attention to safety are integral parts of the strategy.

No fatalities happened during the year 2011.

Narsingarh Limestone Mine of the company received award for 3rd best for "Overall Safety Performance" during Metalliferrous Mines Safety Week celebrations in Jabalpur Region.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

Corporate Social Responsibility is an integral part of the Company's ethos and policy, and it has been pursuing this on a sustained basis. The focus of the Company's CSR activities has been on three areas viz., healthcare, education and improvement of the surrounding areas where it has presence. During the year under review the Company organized various medical camps for the residents of the surrounding villages. Medical assistance was also provided through mobile dispensaries. Medicines are provided free of cost to the beneficiaries. Family welfare programs were also undertaken. Every Plant has a medical centre along with Ambulance to provide timely medical help and treatment.

The schools assisted by your Company provide education of high standard not only to the children of the Company's employees but also to the children from the surrounding villages. Various sports and cultural events were organized at the schools to ensure holistic development of the students.

In order to tackle the problem of shortage of water in the vicinity of some of the Company's plants the villagers were provided treated water from the plants, wherever applicable. The Company also made necessary arrangements for cleaning, deepening and renovating old wells and ponds in the surrounding areas. Some other development activities like construction of a road at Imlai village, a cremation centre at Narsingarh village and passenger facilities at local bus stand were also completed.

Emphasis was laid on creation of awareness amongst the villagers about the need to protect the environment. With this objective in mind cloth bags were distributed to the villagers so as to reduce the usage of plastic bags. Emphasis is also laid on plantation of trees. With the help of social clubs, the Company organized training programs for women and unemployed youth so that they can fruitfully engage themselves in some activity and improve their standard of living.

Camps were organized at the Company's plants to facilitate local people to obtain "Aadhar Cards" under the UID Project of Government. On the occasion of Akshya Trutiya a Samuhik Vivah Ceremony was organized at Damoh. Donations were given by Ammasandra unit for renovation of Kariyamma Temple and for organising Tumkur Zilla Uthsava and Kannada Sahiyatha Sammelana. CSR activities carried out by the Company have further strengthened the Company's relationship with the local people.

PARTICULARS OF EMPLOYEES

Particulars of employees as required under Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 as amended are given in the enclosed statement forming part of this Report as Annexure 'A'.

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:

The particulars relating to conservation of energy, technology absorption and foreign exchange earnings and outgo, as required under section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules 1988, forming part of this Report are annexed as Annexure 'B'.

MD / CHIEF FINANCIAL OFFICER'S CERTIFICATION

Pursuant to Clause 49 of the Listing Agreement, a certificate furnished by Mr. Ashish Guha, CEO & Managing Director and Mr. Anil Sharma, Chief Financial Officer in respect of the financial statements and the cash flow statement for the financial year ended 31st December 2011 is annexed as Annexure 'C'.

ACKNOWLEDGEMENTS

Your Directors take this opportunity to express their sincere gratitude for the cooperation and support received by the Company from various agencies of the Central and State Government(s). The Board also acknowledges the continued assistance and support of all stakeholders including Customers, Bankers, Distributors, Dealers, Suppliers and Contractors. The Directors are grateful for the confidence, faith and trust reposed by the shareholders.

For and on behalf of the Board Sd/-

Place : Gurgaon P.G. Mankad

Date : 13th February 2012 Chairman

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Dec 31, 2010

The Directors of your Company are pleased to present the 52nd Annual Report together with the audited accounts of the Company for the financial year ended 31st December 2010.

REVIEW OF OPERATIONS

Production and Sales figures of the Company in quantitative terms are as under:

Financial year ended Financial year ended 31st December 2010 31st December 2009

Production (in tonnes)

-Clinker 13,36,805 13,53,951

-Cement 26,45,725 26,60,674

-GGBS 15,993 5,026

Sales (in tonnes)

-Clinker 81,449 55,479

-Cement 26,09,254 26,54,767

-GGBS 17,151 5,376

India is the worlds second largest producer of cement. The main characteristics of this industry is that it is highly fragmented, regional, cyclical and capital intensive.

In the first half of the year 2010 the demand for cement was buoyant which resulted in higher volume and price realisation. However during the second half of the year additional capacities became operational which resulted in oversupply situation. Further, during the second half of the year the demand for cement also declined due to heavy rains in most parts of the Country resulting in subdued construction activity. The oversupply coupled with the poor off take of cement created demand supply mismatch putting pressure on prices. This lead to decline in the capacity utilization throughout the industry. Significant rise in costs, especially the price of coal, petroleum products, power and freight cost further eroded the profitability.

Financial year 2011-12 is the terminal year of the 11th Five year plan of the Government of India. Therefore we expect that the Government spending will be relatively higher during the aforesaid period. This will also help in increasing the demand of cement during the current year.

Mycem is now a well established brand with high degree of customer acceptance, which is the result of the Companys constant endeavour to give its customers the best possible product. The Company has also started marketing its cement in Bihar to expand its market reach. In order to foster better channel - Company Partnership, a dealer training program was initiated, a first for the Company.

FINANCIAL HIGHLIGHTS

The Company achieved gross sales of Rs. 98,537.07 lacs during the financial year ended 31st December, 2010, against Rs. 1,04,023.92 lacs during the financial year ended 31st December 2009. The net profit of the Company during the financial year ended 31st December 2010 was Rs. 6,329.95 lacs as compared to the net profit of Rs. 13,403.91 lacs during the financial year ended 31st December 2009.

The snapshot of your Companys performance for the financial year ended 31st December, 2010 vis-a-vis its performance in the previous year ended 31st December, 2009 is as under:-

(Rs. in lacs)

Financial year ended Financial year ended 31st December 2010 31st December 2009

Earnings before Interest, Depreciation and Taxes (EBIDTA) 12,900.82 20,495.46

Less :

- Finance Charges (421.31) (439.90)

- Depreciation / Amortization (2884.88) (2,580.69)

(3,306.19) (3,020.59)

Earnings before taxes (EBT) 9,594.63 17474.87

Less:

- Deferred Tax Credit (1365.12) (1,646.90)

- Provision for Income Tax (1899.56) (2,408.60)

- Fringe Benefit Tax - (3264.68) (15.46) (4,070.96)

Net Profit 6,329.95 13,403.91

Less: Dividend on 9% Cumulative Redeemable Preference Shares (50.83) (434.03) (including Corporate Dividend Tax of Rs. 7.24 lacs).

Add: Balance b/f from the previous year 4,777.75 (8,192.13)

Less: Amount Transferred to Capital Redemption Reserve (1,349.34) -

Profit / (Loss) carried to Balance Sheet 9,707.53 4,777.75

CAPACITY EXPANSION

The Companys present installed capacity is 3.07 MTPA. The Company has embarked upon expansion projects at Damoh & Jhansi units, which will double its cement production capacity.

On 4th August 2010, the Honble Chief Minister of Madhya Pradesh, Mr. Shivraj Singh Chauhan, performed a Bhoomi Poojan and unveiled a plaque at the Narsingarh Unit for the said expansion project.

The work on the aforesaid expansion projects is in full swing and it is expected that the commercial production will commence in the first quarter of the year 2012. The total cost of the expansion project will be funded through a mix of internal accruals, External Commercial Borrowings (ECB) from the promoter group and borrowings from Indian Banks and Financial Institutions.

DIVIDEND

The Directors of the Company had passed a Resolution by Circulation on 11th May 2010 to exercise the Call Option for redemption of 13,49,336 9% Cumulative Redeemable Preference Shares of Rs. 100 each aggregating to Rs. 13,49,33,600. Since these Preference Shares were Cumulative in nature, it was obligatory for the Company to pay the accumulated dividend i.e, dividend @ 9% per annum on 13,49,336 Preference Shares for the period from 1st January 2010 till 11th May 2010 (being the date of redemption of preference shares).

The Company has already paid the dividend amounting to Rs. 43.59 lacs as interim dividend along with the redemption proceeds for which the Board seeks the confirmation of the shareholders at Item No. 2 of the Notice of Annual General Meeting.

Further, in view of the requirement of funds for the aforesaid expansion projects, your Directors have decided not to recommend any Dividend on the equity shares for the financial year ended 31st December, 2010.

APPOINTMENT / RE-APPOINTMENT OF DIRECTORS

Dr. Bernd Scheifele and Dr. Lorenz Naeger, Directors of the Company retire by rotation at the ensuing Annual General Meeting (AGM) of the Company. The retiring Directors being eligible have offered themselves for re-election at the said AGM.

Mr. Pradeep V. Bhide, Mr. Daniel R. Fritz and Mr. Sushil Kumar Tiwari were appointed as Additional Directors on the Board w.e.f. 29th April 2011. Pursuant to section 260 of the Companies Act, 1956 the aforesaid Additional Directors shall hold office up to the date of the ensuing AGM. The Company has received notices under section 257 of the Companies Act, 1956 from some members proposing the names of the aforesaid persons for appointment as Directors.

The Board has appointed Mr. Sushil Kumar Tiwari as Wholetime Director for tenure of 3 years w.e.f. 29th April 2011, subject to the approval of the shareholders at the ensuing AGM.

The Board at its meeting held on 29th April 2011 has re-appointed Mr. Ashish Guha as Managing Director of the Company, without any remuneration, for a further term of five years w.e.f. 23rd August 2011, subject to the approval of the shareholders at the ensuing AGM.

The Board recommends the appointment / re-appointment of the aforesaid Directors.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the requirements of Section 217(2AA) of the Companies Act, 1956, the Directors, to the best of their knowledge and belief and according to the information and explanations obtained by them, confirm & declare that they have taken all reasonable steps, as are required, to ensure that:

(a) The applicable accounting standards have been followed in the preparation of the annual accounts for the financial year ended 31st December 2010 and no departures have been made there from;

(b) They have selected such accounting policies and applied them consistently and they have made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of your Company as at 31st December, 2010 and of the profit of your Company for the year ended on that date;

(c) They have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of your Company and for preventing and detecting frauds and other irregularities; and

(d) The annual accounts for the financial year ended 31st December, 2010 are prepared on a going concern basis.

AUDITORS

The Statutory Auditors, M/s. S.R. Batliboi & Co., Chartered Accountants, who were appointed at the last Annual General Meeting held on 11th May 2010, hold office up to the conclusion of the ensuing AGM and are eligible for re-appointment. The said Auditors have confirmed that their re-appointment, if made, shall be within the limit laid down under Section 224(1B) of the Companies Act, 1956. The Auditors observations in their Report and the relevant notes to the accounts are self-explanatory.

COST AUDIT

Pursuant to the directives of the Central Government, your Company has appointed M/s. A. Nagaraja, Cost Accountants as Cost Auditors of the Company under Section 233B of the Companies Act, 1956 for the year 2011.

CORPORATE GOVERNANCE REPORT

In terms of Clause 49 of the Listing Agreement with the Stock Exchanges a report on Corporate Governance is included in the Annual Report. A Certificate from a Practising Company Secretary on compliance of conditions of Corporate Governance is also annexed to the Corporate Governance Report.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Pursuant to clause 49 of the Listing Agreement, Management Discussion and Analysis Report is given as addition to this Report.

REGISTERED OFFICE

The Registered Office of the Company has been shifted from the plant at Ammasandra (Karnataka) to Gurgaon (Haryana) w.e.f. 8th March 2011.

HUMAN RESOURCES

During the year under review the Industrial Relations remained cordial and there was all round cooperation. Employees at all levels demonstrated high degree of commitment for achieving the Companys goals.

The Company focused on Employee Development, Retention, Recognition, Performance Management & Communication. Initiatives like Hi-Potential scheme and Star Employee of the month/quarter have been implemented with the objective of retention & recognition and also to encourage innovative ideas.

Various training programs focusing on the soft skills like Communication & Leadership skills were conducted. The key programs focusing on soft skills and managerial skills conducted were Business Communication, Breakthrough in Effectiveness, Performance Management Process, Team Bonding & Jagriti (Workmen Training).

Quarterly communication meetings. Directors Feedback Sessions and open house sessions were also introduced to share the business performance vis-a-vis market scenario, new market place challenges and also to address the concerns of employees.

Employees at all levels continue to put in their best in the service of the Company and your Directors place on record sincere appreciation of their dedication and loyalty.

OCCUPATIONAL HEALTH & SAFETY

The Company has continued to focus on embedding strong safety culture top-down and bottom-up. "Nothing is more important to us at Heidelberg than the safety of our workers, our subcontractors, and the communities in and near which we operate," says Dr. Scheifele, Chairman of HeidelbergCement Group.

Safety Topic of the Month program is designed to educate the employees about why safety is so important, and to remind our employees and subcontractors about ways to maximize their own safety, on the job, in and around the plant, and in their own homes and communities. During the month, each site is organizing events, open house sessions to increase awareness and communication campaigns on the theme of occupational health and safety for employees and subcontractors.

Every Operational Unit and Project Site conducts Daily Safety Meeting to communicate the previous day safety observations & incident information of all the sites for taking immediate corrective & preventive actions at their respective sites. This has improved the Safety performance drastically at Shop floor. This meeting is headed by Plant Head and the presence of all Officers & Contractor Employees has been made mandatory.

The Lost Time Injury frequency Rate drastically decreased from the year 2007 to 2010 as a result of the companys comprehensive safety program. Damoh Limestone Mine has been selected for the National Safety Award under the category of "Lowest Injury Frequency Rate" by the Ministry of Labour & Employment.

The Company has set up Corporate Health & Safety function to lead these efforts to facilitate design and implementation of H&S Management System. The Company has also implemented the Contractor Safety Management System, which helps to ensure that proper processes are in place for the safety of Contract Employees. We have embarked on the journey of changing behaviors across all functions. We continue to lead our efforts for enforcement of H&S norms at all our brown field projects.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

The Company is actively contributing to the economic and social development of the surrounding communities as part of its corporate social responsibility by focusing on Healthcare, Education and improvement of the surroundings. During the year under review, your Company continued to co-ordinate with local communities, in the regions where it has presence, to facilitate development and welfare activities. These included medical assistance and organising medical camps for the residents of the surrounding villages. Every Plant has a medical centre along with Ambulance to provide timely medical help and treatment.

In the area of Education, your Companys schools provide high standard of education not only to the children of its employees but also to the children from the surrounding rural areas. Sports meets with various events were conducted at schools

which also attracted participation of other schools from the surrounding areas. With the help of social clubs, the Company has initiated various training programs for women and unemployed youth.

There is scarcity of water in the vicinity of some of the Companys plants. Therefore the Company has made necessary arrangements to provide treated water from its plants to the villagers. In addition, the Company also engaged manpower for cleaning and renovation of old wells and ponds in surrounding areas to ensure that water is easily available to the villagers.

PARTICULARS OF EMPLOYEES

Particulars of employees as required under Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 as amended upto date are given in the enclosed statement forming part of this Report as Annexure A.

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:

The particulars relating to conservation of energy, technology absorption and foreign exchange earnings and outgo, as required under section 217(l)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules 1988, forming part of this Report are annexed as Annexure B.

MD / CHIEF FINANCIAL OFFICERS CERTIFICATION

Pursuant to Clause 49 of the Listing Agreement, a certificate furnished by Mr. Ashish Guha, Managing Director and Mr. Anil Sharma, Chief Financial Officer in respect of the financial statements and the cash flow statement for the financial year ended 31st December 2010 is annexed as Annexure C.

ACKNOWLEDGEMENTS

We deeply acknowledge the continued support and co-operation received from the State and Central Government Authorities and other regulatory agencies. We also take this opportunity to thank all the valued customers who have appreciated and patronised the companys brand "mycem".

Your directors are thankful to all stakeholders including Shareholders, Bankers, Suppliers, Distributors, Dealers and Contractors for their continued assistance, co-operation and support.

For and on behalf of the Board Sd/-

P.G. Mankad Chairman

Place : Gurgaon Date : 29th April 2011

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Dec 31, 2009

The Directors of your Company are pleased to present the 51st Annual Report together with the audited accounts of the Company for the fi nancial year ended 31st December 2009.

REVIEW OF OPERATIONS

The cement sales of the Company were 2.66 million tonnes during the fi nancial year ended 31st December 2009 against 2.42 million tonnes of the previous fi nancial year ended 31st December 2008.

Production and Sales figures of the Company are as under:

Financial year ended Financial year ended 31st December 2009 31st December 2008

Production (in tonnes)

-Clinker 13,53,951 13,80,470

-Cement 26,59,472 24,17,622

-GGBS 7,198 20,353

Sales (in tonnes)

-Clinker 55,414 1,14,057

-Cement 26,54,767 24,19,441

-GGBS 5,376 21,694

Cement Industry is largely dependent on domestic demand and has a cluster market structure. The industry is cyclical in nature and to a great extent depends on the infrastructure spending by the Government. During the fi rst half of the fi nancial year 2009, the demand for cement was buoyant which resulted in strong growth in volume as well as improved price realisation. The demand was fuelled by increased government spending on roads and infrastructure projects and also partial recovery in the housing sector which was under severe pressure during the year 2008 due to the general economic slowdown. Further, there was spurt in the demand in the clusters in which we operate, resulting in higher turnover and better profi t margin. However, the scenario changed during the second half of the year since not only did the demand recede to some extent but the supply also increased as the additional capacities came on stream. This led to a temporary demand supply mismatch leading to fall in cement prices almost throughout India. Moreover the cement was also brought in from the distant markets into the markets in which we operate. Consequently, it was diffi cult to protect the margins during the second half. There were many pockets where the prices fell steeply, especially in southern India where the drop in prices was the maximum.

However, during the start of the fi rst quarter of the year 2010, the demand for cement has again improved due to increase in spending on infrastructure and housing projects, especially in northern, western and central India on account of signs of recovery shown in overall economic activity. In this backdrop your Directors hope that the demand for cement would continue to be stable throughout the year.

Mycem brand is now well established in the market and has gained high degree of customer acceptance. Mycem now commands a premium which is result of elevated customer’s perception about the brand. Focus on quality and service, have been key drivers for enhancing customer satisfaction for Mycem.

The Company has improved its quality at every plant and it will be the constant endeavour of the Company to give its customers the best possible product.

FINANCIAL HIGHLIGHTS

The Company achieved gross sales of Rs. 1,04,023.92 lacs during the fi nancial year ended 31st December, 2009, against Rs. 88,697.67 lacs during the fi nancial year ended 31st December 2008 , thereby, registering annualized growth of 17 %. The net profi t of the Company during the fi nancial year ended 31st December 2009 was Rs. 13403.91 lacs as compared to the net profi t of Rs. 12,552.64 lacs during the fi nancial year ended 31st December 2008.

Your Directors are pleased to inform that during the 2nd quarter ended 30th June 2009, the Company fully absorbed all its unabsorbed depreciation and brought forward business losses of the past fi nancial years, which stood at Rs. 37,098.37 lacs as on 31st December 2006.

The snapshot of your Company’s performance for the fi nancial year ended 31st December, 2009 vis-à-vis its performance in the previous year ended 31st December, 2008 is as under:-

(Rs. in lacs)

Financial year ended Financial year ended Particulars 31st December 2009 31st December 2008

Working for the year resulted in an operational surplus of 20,495.46 13,310.34

From which are subtracted :

- Finance Charges (439.90) (410.24)

- Depreciation / Amortization (2,580.69) (2,137.23)

(3,020.59) (2,547.47)

Resulting in a profi t/(loss) for the year of 17474.87 10,762.87

To/From which are added / subtracted :

- Deferred Tax Credit (1,646.90) 1,848.24

- Provision for Income Tax (2,408.60) -

- Fringe Benefi t Tax (15.46) (4,070.96) (58.47) 1,789.77

Net Profi t / (Loss) 13,403.91 12,552.64

Add: Amount transferred from Securities Premium Account -- 6,238.32

Less: Proposed Dividend on 9% Cumulative Redeemable Preference Shares (including Corporate Dividend Tax of Rs. 63.05 lacs). (434.03)

To which is added loss b/f from the previous year (8,192.13) (26,983.09)

Profi t / (Loss) carried to Balance Sheet 4,777.75 (8,192.13)

Note : The figures for the year ended 31st December 2009 are not strictly comparable with the fi gures for the year ended 31st December 2008 since the fi gures of the year ended 31st December 2008 include the fi nancial performance of erstwhile Indorama Cement Ltd. and erstwhile HeidelbergCement India Pvt. Ltd. for the nine months period i.e, from 1st April 2008 to 31st December 2008 as the appointed date for the Scheme of Amalgamation through which these companies got amalgamated with your Company was w.e.f. 1st April 2008.

CAPACITY EXPANSION

The Company’s present installed capacity is 3.07 MTPA. In order to increase the cement production capacity, the Company has embarked upon the following expansion projects at the Damoh & Jhansi units:-

(i) Expansion of clinker manufacturing capacity from 1.2 MTPA to 3.1 MTPA at Narsingarh, District Damoh, Madhya Pradesh.

(ii) Expansion of cement grinding capacity from 1 MTPA to 2 MTPA at Imlai, District Damoh, Madhya Pradesh.

(iii) Expansion of cement grinding capacity from 0.8 MTPA to 2.7 MTPA at Jhansi, Uttar Pradesh.

The Company has already received requisite approvals, subject to fulfi llment of certain conditions, from the Government Authorities for the aforesaid expansion projects. The work on the aforesaid expansion projects has already begun and it is expected that the commercial production would commence in the fi rst quarter of the year 2012. After completion of the aforesaid expansion, the total cement production capacity of the Company would double to 6 MTPA.

DIVIDEND

The Board of Directors hereby recommend dividend at the agreed rate of 9% per annum on the 13,49,336 9% Cumulative Redeemable Preference Shares of Rs. 100 each from the date of allotment of the said preference shares i.e, 12th December 2006 till the fi nancial year ended 31st December 2009. It may be noted that the Company could not pay any dividend on the said preference shares till the fi nancial year ended 31st December 2008 due to the unabsorbed depreciation and brought forward business losses of the earlier fi nancial years. The aforesaid preference shares are cumulative in nature and carry dividend at the fi xed rate of 9% p.a. Therefore as per the terms of issue of the aforesaid preference shares it is obligatory for the Company to pay dividend @ 9% p.a. from 12th December 2006 till 31st December 2009, aggregating to Rs. 370.98 lacs.

Further, in view of the requirement of funds for the aforesaid capacity expansion projects, your Directors have decided not to recommend any Dividend on the equity shares for the fi nancial year ended 31st December, 2009.

RE-APPOINTMENT OF DIRECTORS

Dr. Albert Scheuer and Mr. S. Krishna Kumar, Directors of the Company retire by rotation at the ensuing Annual General Meeting (AGM) of the Company. The retiring Directors being eligible have off ered themselves for re-election at the said AGM. The Board recommends the re-appointment of the aforesaid Directors.

DIRECTORS’ RESPONSIBILITY STATEMENT

Pursuant to the requirements of Section 217(2AA) of the Companies Act, 1956, the Directors, to the best of their knowledge and belief and according to the information and explanations obtained by them, confi rm & declare that they have taken all reasonable steps, as are required, to ensure that :

(a) The applicable accounting standards have been followed in the preparation of the annual accounts for the fi nancial year ended 31st December 2009 and no departures have been made there from;

(b) They have selected such accounting policies and applied them consistently and they have made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of aff airs of your Company as at 31st December, 2009 and of the profi t of your Company for the year ended on that date;

(c) They have taken proper and suffi cient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of your Company and for preventing and detecting frauds and other irregularities; and

(d) The annual accounts for the fi nancial year ended 31st December, 2009 are prepared on a going concern basis.

AUDITORS

The Statutory Auditors M/s. S.R. Batliboi & Co., Chartered Accountants who were appointed at the last Annual General Meeting held on 29th May, 2009 hold offi ce up to the conclusion of the ensuing AGM and are eligible for re-appointment. The said Auditors have confi rmed that their re-appointment, if made, shall be within the limit laid down under Section 224(1B) of the Companies Act, 1956. The Auditors’ observations in their Report and the relevant notes to the accounts are self-explanatory.

COST AUDIT

Pursuant to the directives of the Central Government, your Company has subject to the approval of the Central Government, appointed M/s. A. Nagaraja, Cost Accountants as Cost Auditors of the Company under Section 233B of the Companies Act, 1956 for the year 2010.

CORPORATE GOVERNANCE REPORT

In terms of Clause 49 of the Listing Agreement with the Stock Exchanges a report on Corporate Governance is included in the Annual Report. A Certifi cate from a Practising Company Secretary on compliance of conditions of Corporate Governance is also annexed to the Corporate Governance Report.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Pursuant to clause 49 of the Listing Agreement, Management Discussion and Analysis Report is given as addition to this report.

HUMAN RESOURCES

During the year, 146 employees opted for Voluntary Retirement under the approved Voluntary Retirement Scheme (VRS) of the Company.

As always, the commitment of the team was instrumental in achievement of the results. Employees at all levels demonstrated a huge degree of commitment towards the general cost consciousness as a result of which despite infl ation, we were able to reduce our costs wherever possible.

It will be our constant endeavor to work as a team and deliver better quality products consistently and at the same time keep a vigilant eye on costs.

The Board would like to thank the contribution and commitment of all employees towards the success and growth of the Company.

HEALTH & SAFETY

Your Company places the highest value on ensuring the health and safety of its employees, contractors, third parties and visitors. In line with the Health & Safety Policy of the Company a detailed Safety Manual was prepared and circulated during the year under review. The manual provides detailed processes and practices to be followed in the day-to-day operations at the Company’s plants. In line with the Health & Safety Policy detailed procedures and work instructions have been drawn-up to assist in the smooth working of our Plants. The Company has also conducted various safety related training programmes and seminars to develop a safe working culture, by focusing on behaviours and attitudes, using a systematic approach.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

The Company actively pursued the corporate social responsibility by focusing on key areas being Education, Healthcare and improvement of the surroundings.

We have specifically earmarked funds towards improvement in our surroundings and for provid- ing subsidised education in our schools. Water is scarce in some of the areas that we operate in and we have ensured that villagers are given treated water from our plants. In addition, the Company has also cleaned, deepened and renovated the old wells as well as ponds at Imlai and Narsingarh to ensure that adequate quantity of water is available to the villagers. Medical assistance is provided at our clinics and also through medical vans. With the help of our social clubs, we have initiated vari- ous training centres for women and unemployed youth.

We are also in constant touch with the respective district administration to provide adequate services as and when required to the people at large.

PARTICULARS OF EMPLOYEES

Particulars of employees as required under Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 as amended are given in the enclosed statement forming part of this Report as Annexure ‘A’.

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:

The particulars relating to conservation of energy, technology absorption and foreign exchange earnings and outgo, as required under section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules 1988, forming part of this Report are annexed as Annexure ‘B’.

MD / CHIEF FINANCIAL OFFICER’S CERTIFICATION

Pursuant to Clause 49 of the Listing Agreement, a certifi cate furnished by Mr. Ashish Guha, Managing Director and Mr. Anil Kumar Sharma, Chief Financial Offi cer in respect of the fi nancial statements and the cash fl ow statement for the fi nancial year ended 31st December 2009 is annexed as Annexure ‘C’.

ACKNOWLEDGEMENTS

Your Directors take this opportunity to acknowledge the continued support and cooperation received from the State & Central Government Authorities and other regulatory agencies. Your Directors also express their sincere gratitude to the Shareholders, Bankers, Suppliers, Distributors, Dealers and valued customers for their continuous committed support and cooperation.

For and on behalf of the Board

Sd/- Place : Gurgaon P.G. Mankad

Date : 24th February 2010 Chairman