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Directors Report of Birla Corporation Ltd.

Mar 31, 2017

To the Shareholders,

The Directors have the pleasure in presenting the Annual Report on the business and operations of your Company together with the audited financial statements of the Company and its Subsidiaries for the year ended 31st March, 2017.

| FINANCIAL PERFORMANCE

The summarized standalone and consolidated results of your Company and its Subsidiaries are given in the table below :

(Rs, in Crores)

Particulars

STANDALONE

CONSOLIDATED*

31.03.2017

31.03.2016

31.03.2017

31.03.2016

Revenue from Operations (Gross)

3,841.02

3,761.59

4,981.22

3,761.59

Total Revenue

3,985.55

3,938.81

5,127.76

3,938.98

Profit before Finance Costs, Tax,

Depreciation, Amortization and

515.76

463.09

769.41

463.46

Exceptional items

Finance Costs

139.23

82.26

276.79

82.26

Profit before Tax, Depreciation,

492.62

381.20

Amortization, Minority Interest

376.53

380.83

and Exceptional items

Depreciation and Amortization Expense

147.19

148.47

255.50

148.76

Exceptional items

6.82

31.49

6.82

31.49

Tax Expense (Net)

8.52

162.53

33.19

213.15

10.83

273.15

33.22

214.47

Profit for the year

214.00

167.68

219.47

167.73

Surplus as per Financial Statements

373.72

342.65

371.17

340.05

(Including Retained Earnings)

Appropriations :

Debenture Redemption Reserve

15.83

10.00

15.83

10.00

Dividend paid on Ordinary Shares

46.20

46.20

46.20

46.20

Corporate Div. Tax on Dividend

9.41

9.41

9.41

9.41

General Reserve

150.00

71.00

150.00

71.00

Net Surplus

366.28

373.72

369.20

371.17

*The figures of the subsidiary, Reliance Cement Company Private Limited, have been consolidated from the date of its acquisition, i.e. 22.08.2016.

| DIVIDEND_

Your Directors are pleased to recommend a dividend of Rs, 6.50 per share (i.e. 65%) on 7,70,05,347 ordinary shares for the year ended 31st March, 2017 aggregating to Rs, 60.24 crores (including Corporate Dividend Tax of Rs, 10.19 crores) as compared to Rs, 55.61 crores (including Corporate Dividend Tax of Rs, 9.41 crores) in the previous year.

Dividend Distribution Policy

Pursuant to Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has formulated a Dividend Distribution Policy. The Policy is annexed hereto and marked as "Annexure - A" forming part of the Directors'' Report and is also uploaded on the Company''s website at http://www.birlacorporation.com/investors/policy/dividend-distribution-policy.pdf.

| TRANSFER TO RESERVES_

The Company proposes to transfer an amount of Rs, 150.00 crores to the General Reserves.

| SHARE CAPITAL_

The paid up Equity Share Capital as at 31st March, 2017 stood at Rs, 77.01 crore. During the year under review, the Company has not issued shares with differential voting rights nor has granted any stock options or sweat equity. As on 31st March, 2017, none of the Directors of the Company hold instruments convertible into equity shares of the Company.

| FINANCIAL STATEMENTS_

ADOPTION OF IND AS :

As mandated by the Ministry of Corporate Affairs, the Company has adopted the IND AS for the Financial Year commencing from 1st April, 2016. The estimates and judgments relating to the Financial Statements are made on a prudent basis, so as to reflect in a true and fair manner, the form and substance of transactions and reasonably present the Company''s state of affairs, profits and cash flows for the year ended 31st March, 2017.

CONSOLIDATED FINANCIAL STATEMENTS :

The Consolidated Financial Statements of the Company are prepared in accordance with relevant IND AS issued by the Institute of Chartered Accountants of India and forms an integral part of this Report.

| MATERIAL CHANGES AND COMMITMENTS_

There are no material changes and commitments affecting the financial position of the Company which have occurred between the end of the financial year and the date of this Report.

ACQUISITION OF CEMENT BUSINESS OF RELIANCE INFRASTRUCTURE LIMITED_

Pursuant to signing of definitive share purchase agreement with Reliance Infrastructure Limited for acquisition of its entire cement business, the Company completed the process of acquisition by acquiring 100% equity shares of Reliance Cement Company Private Limited (RCCPL) on 22nd August, 2016. After this acquisition, RCCPL became a wholly owned subsidiary of Birla Corporation Limited. The acquisition was funded through existing cash reserves and incremental debt.

This acquisition has provided the Company with the ownership of high-quality assets, taking its total capacity to 15.5 MTPA from 10 MTPA, strengthening its presence in the high-growth Central region. The Company''s expansion potential will also be enhanced significantly by valuable mineral concessions access to in several States, in addition to Madhya Pradesh.

RCCPL has three cement Units, an integrated cement plant at Maihar (Madhya Pradesh) and grinding units at Kundanganj (Uttar Pradesh) and Butibori (Maharashtra), with an aggregate capacity of 5.58 MTPA of cement and 3.3 MTPA of clinker. With the state of the art technology, strategically located raw material sources, captive coal mine and efficient operating parameters, it has already established the technical capability for producing top-end quality product. The mining lease at Mukutban will enable the Company to set up clinkerization unit in foreseeable future.

Since the take-over of RCCPL, considerable efforts has been made by the management for improving its operational efficiencies which has led to significant improvement in all parameters across the board. The plants of RCCPL have started performing at strong operating parameters which are comparable with the benchmarks in the industry. This has helped the Company achieve EBIDTA in excess of '' 1,100 per ton during the fourth quarter, which is among the highest in the industry, despite softness in some of its markets both in terms of volume and realization.

Measures being undertaken by us such as installation of Waste Heat Recovery System and despatches by rail in its grinding unit in Uttar Pradesh are expected to aid in further reduction in cost and increasing volumes.

| 1.1 CEMENT DIVISION_

(a) Industry Structure and Developments :

India is the second largest producer of cement in the world. India''s cement industry is a vital part of its economy, providing employment to more than a million people, directly or indirectly. Ever since it was deregulated in 1982, the Indian cement industry has attracted huge investments, both from Indian as well as foreign investors.

The country has a lot of potential for development in the infrastructure and construction sector and the cement sector is expected to largely benefit from it. India''s cement demand is expected to reach 550-600 Million Tonnes Per Annum (MTPA) by 2025. The housing sector is the biggest demand driver of cement, accounting for about 67 per cent of the total consumption in India. The other major consumers of cement include infrastructure at 13 per cent, commercial construction at 11 per cent and industrial construction at 9 per cent. India has the largest homeless population in the world and the rural housing offers a huge opportunity.

The cement sector is slowly heading for a major consolidation as Greenfield projects are becoming difficult to set up due to increased impediments in areas like availability of limestone mineral concessions, land acquisition and environmental and operational issues. This has led to consolidation in the cement industry. Going forward, the acquisition space in the industry is expected to gather steam, with organic growth becoming difficult and opportunities arising due to various companies opting to liquidate assets to deleverage.

New capacity addition continue to dip for sixth straight year as players postpone capacity addition in view of the subdued demand and low capacity utilization. The Industry continues to suffer due to over capacity with pan India industry capacity utilization hovering around 70%.

(b) Review of Performance :

Production of the Company :

The details of production of clinker and cement at various locations of the Company are as follows :-

2016-17 (Lac Ts.)

2015-16 (Lac Ts.)

Change

%

Clinker production

Satna

25.54

28.61

(10.73)

Chanderia

26.41

22.52

17.27

Total

51.95

51.13

1.60

2016-17 (Lac Ts.)

2015-16 (Lac Ts.)

Change

%

Cement production

Satna

21.47

24.27

(11.54)

Raebareli & Raebareli Hitech

7.03

6.50

8.15

Chanderia

35.45

35.92

(1.31)

Durgapur

14.84

14.70

0.95

Total

78.79

81.39

(3.19)

Blended Cement

64.20

67.43

(4.79)

% of total cement production

81.48

82.85

(1.37)

Production of Reliance Cement Company Private Limited (wholly owned subsidiary) :

The details of production of clinker and cement of various Units of Reliance Cement Company Private Limited from 22nd August, 2016 to 31st March, 2017 are as follows :-

(Lac Ts.)

Clinker production

Maihar

17.05

Total

17.05

Cement production

Maihar

12.90

Kundanganj

8.25

Butibori

1.38

Total

22.53

Sales :

During the year under review, your Company has registered a Reduction of about 3% in cement sales on standalone basis. In absolute terms, the sale of cement has decreased to 78.29 Lac tons compared to 80.36 Lac tons in the previous year.

Reliance Cement Company Private Limited has sold 22.50 Lac tons of cement during the period from 22nd August, 2016 to 31st March, 2017.

Power Plant :

The details of power generated at various plants of the Company are as under :

2016-17 (Lac Units)

2015-16 (Lac Units)

Change

%

Thermal Power Plant :

Satna

1708.73

1845.26

(7.40)

Chanderia

1981.31

1544.98

28.24

WHRS :

Satna

635.43

860.83

(26.18)

Chanderia

447.07

333.06

33.03

Solar Power:

27.18

29.00

(6.27)

Cost and Profitability :

The profitability of the Company continued to be affected on account of suspension of normal mining operations (with blasting) at Chanderia, the unit had to outsource limestone at significantly higher prices. Though the unit raised substantial quantity of limestone by mechanical means, the same was still short of requirement.

The Company was able to maintain the profit during the year despite substantial increase in borrowing cost and reduction in treasury income due to borrowings and deployment of cash reserves for acquisition of Reliance Cement Company Private Limited.

This was a result of several initiatives taken by the Company for improving operational efficiencies in various areas.

Use of pet coke in the thermal plant at Chanderia and higher usage at the kiln at Satna resulted in substantial savings. Alternate fuels were used at both Satna and Chanderia resulting in reduction of fuel cost. The use of high purity imported gypsum and higher use of additives, such as fly ash and slag, reduced the cost of production and improved the quality of cement. Other operational parameters at the plants also improved. All these contributed to better performance by the Cement Division.

Pet coke prices have almost doubled to $85-90 a tonne from $48 a tonne in March 2016. The Company benefited on account of the lower cost of pet coke during the first half of the financial year. The operating costs could be brought down as a result of operational efficiencies, a judicious fuel mix and lower fuel prices.

Freight costs, another key cost for the industry also increased as railway imposed railway surcharge and also raised tariffs. However, the Company could economise the cost of transportation by way of proactive intervention by the Management by optimization of lead distance of despatches and bringing in change in the rail-road mix.

Cement demand and prices :

After a spurt in the first quarter, the Cement demand contracted in the second quarter. The core markets that the Company operates in were extensively affected by heavy monsoons, with many areas in Rajasthan and Madhya Pradesh hit by floods. Despite the adverse scenario, the Company maintained its market share in relevant geographies while improving net realization through a slew of initiatives such as geo-mix optimization, focus on premiums and distribution efficiencies, through measures such as increasing direct dispatches from plants with dedicated GPS-controlled vehicles.

The demand for cement suffered a setback during the third quarter on account of demonetization as a large portion of the cement trade in the secondary and tertiary market particularly in North and Central India where the operations of the Company are concentrated, were traditionally transacted in cash. The cement prices in February 2017 were quoting below the average prices that prevailed in regional markets in October 2016, before demonetization. Towards the end of the fourth quarter, the impact of demonetization was seen tapering off with the demand as well as the prices showing a rising trend.

The State elections in Uttar Pradesh in March 2017 saw new projects being postponed or put on hold. Construction activities in large projects were impaired by an embargo on sand and aggregates mining in large parts of the State.

Owing to low demand, prices remained depressed in all markets, with competition intensifying and large volume players undercutting on prices. In response to the adverse market conditions, the Company, on one hand, focused on protecting market shares while working on measures to arrest slide in price realization with a series of marketing and commercial initiatives.

The overall demand for cement improved though marginally, during the year on the back of the seventh Pay Commission pay hike, and various other policy initiatives announced by the government.

During April'' 2017, Average Pan-India cement prices continued to increase for third consecutive month by 7.5% m-o-m, at the fastest pace in last three years. The East, North and Central regions witnessed healthy price increase in the range of 5-7%.

(c) Premium Brand Cement :

(i) Birla Samrat Unique Cement :

Since the introduction of the premium quality Portland Slag Cement (PSC) brand, Birla Samrat UNIQUE, in Eastern India in 2011, its market share has been witnessing steady improvement. Presented in pilfer and weather-proof packing, the finer grains of UNIQUE give higher compressive strength and larger surface area coverage. It has lower water absorption and silica-rich slag, ensuring dense and durable concrete.

(ii) Birla Samrat Ultimate Cement :

The fly ash-based, premium Portland Pozzolana Cement (PPC) brand, Birla Samrat ULTIMATE Cement, introduced in 2014, has received market acceptance in both eastern and central regions. Based on the Complete Particle Size Distribution (CPSD) technology, the "double refined" cement is being marketed in tamper-proof packaging. The product is corrosion-resistant, cohesive and has low alkali properties. Trade associates have welcomed the premium product since it has been catering to the demands of discerning consumers.

Both UNIQUE and ULTIMATE cements, being premium brands, have been fetching higher prices than the Company''s normal brands, contributing to profitability.

(iii) M P Birla Cement CONCRECEM and Multicem PPC:

Keeping in view the rapid growth in infrastructure and projects, the Company launched new-age cement brands, M P Birla Cement CONCRECEM (OPC 43 & 53 grades) and MULTICEM (fly ash-based PPC) in March 2017. These products are particularly suitable for large commercial, industrial, infrastructural and real estate projects. CONCRECEM has been engineered to offer strength, durability and faster construction time. MULTICEM is a BIS-certified PPC cement, specially engineered for infrastructural development. It is manufactured using the latest cement manufacturing technology and ultra-modern techniques.

(iv) MP Birla Perfect Cement :

Reliance Cement Company Private Limited, a wholly owned subsidiary of Birla Corporation Limited started the exercise of rebranding of the ''Reliance Perfect Cement'' brand as ''MP Birla Perfect Cement'' during the fourth quarter. The MP Birla Perfect Cement launch was supported by an extensive marketing communication on mass media and at the point of sale. A key differentiator was the technical services offered to customers through a large fleet of mobile laboratories, equipped with latest construction testing equipments. The campaign has been well received in the markets and the transition of brand has been seamless. The initiative is expected to provide impetus to increase volumes and maintain the premium pricing of the brand in the trade segment.

COMPOSITION, NUMBER AND DATES OF MEETINGS OF THE BOARD AND COMMITTEES_

The details of the composition, number and dates of meetings of the Board and Committees held during the financial year 201617 forms part of the Corporate Governance Report. The number of meetings attended by each Director during the financial year 2016-17 also forms part of the Corporate Governance Report.

| DIRECTORS'' RESPONSIBILITY STATEMENT_

As required by Section 134(3)(c) of the Companies Act, 2013 your Directors state that:

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

(b) the accounting policies adopted in the preparation of the annual accounts have been applied consistently except as otherwise stated in the Notes to Financial Statements and reasonable and prudent judgments and estimates have been made so as to give a true and fair view of the state of affairs of the Company at the end of the Financial Year 2016-17 and of the profit for the year ended 31st March, 2017;

(c) 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) the annual accounts for the year ended 31st March, 2017, have been prepared on a going concern basis;

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

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

| PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements.

| CREDIT RATING_

CRISIL has rated short term debt including Commercial Paper (CP) to the extent of Rs, 300 crores as "A1 " Long Term Non-Convertible Debentures of the Company of Rs, 280 crores has been rated as "AA" (Outlook: Negative) by CRISIL.

ICRA has assigned rating of "AA" (Outlook: Stable) for Long Term Non-Convertible Debentures of the Company of Rs, 400 crores.

Further, Credit Analysis and Research Limited (CARE) has also rated "CARE AA" (Outlook : Stable) rating for the Company''s Long Term Bank facilities and "CARE A1 " (Outlook: Stable) for the Company''s Short Term Bank facilities aggregating to Rs, 1898 crores. The rating Committee of CARE has assigned "CARE AA" (Outlook : Stable) for the outstanding Non-Convertible Debentures of Rs, 680 crores.

| FINANCE_

During the year the Company has repaid Secured Redeemable Non-Convertible Debentures aggregating to Rs, 120 crores and has further raised Secured Redeemable Non-Convertible Debentures ofRs, 400 crores on private placement basis for the purpose of acquisition of Reliance Cement Company Private Limited.

Further, the Company efficiently manages its surplus funds by investing in highly rated debt securities, fixed deposits and debt schemes of mutual funds considering safety, liquidity and return. The Company continuously undertakes review of liability management so as to reduce cost.

| CORPORATE GOVERNANCE_

The Company has complied with the Corporate Governance Code as stipulated under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. A separate section on Corporate Governance, along with certificate from the auditors confirming the compliance of conditions of Corporate Goverance, is annexed and forms part of the Annual Report.

| RELATED PARTY TRANSACTIONS_

All transactions entered with Related Parties during the financial year were on an arm''s length basis and were in the ordinary course of business and the provisions of Section 188 of the Companies Act, 2013 are not attracted. Further, there are no materially significant related party transactions during the year under review made by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of the Company at large. Accordingly, the disclosure required under Section 134(3)(h) of the Act read with Rule 8(2) of the Companies (Accounts) Rules,

2014 in Form AOC-2 is not applicable to your Company.

All Related Party Transactions are placed before the Audit Committee for approval. Prior omnibus approval of the Audit Committee is obtained for the transactions which are of a foreseen and repetitive nature. The transactions entered into pursuant to the omnibus approval so granted along with a statement giving details of all related party transactions are placed before the Audit Committee.

The policy on Related Party Transactions as approved by the Board is uploaded on the Company''s website and may be accessed at the link http:// www.birlacorporation.com/ investors/related-party-transactions-policy.pdf.

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

As required under provisions of the Companies Act, 2013 and Rule 8(3) of Companies (Accounts) Rules, 2014 details relating to Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo are given in the "Annexure - C", which is annexed hereto and forms part of the Directors'' Report.

| OCCUPATIONAL HEALTH & SAFETY_

Employees of the Company play an important role in the industrial operation and company''s growth, and are considered as the most valuable assets and their personal and professional development along with their robust health and safety is one of the top priorities of the organization.

The Company is complying with all the Statutory Provisions as required under the Factories Act. Competent persons carry out compulsory testing / examination of lifting tools, pressure vessels, cranes, safety belts etc. as per statutory requirement. To get good results in the accident prevention we have included safety programmes like investigation & analysis of all serious and fatal accidents, recommendations / remedial measures to prevent similar accidents. Near- miss situation / incident with no injury is accorded serious consideration for planning of preventive measures.

As a part of safety measures, we are ensuring almost cent percent use of Personal Protective Equipment by developing voluntary safety culture. Various periodical health check up programmes are conducted from time to time so as to monitor health hazards if any.

Safety posters, slogans are widely displayed in the conspicuous places at the factory including work places, canteen and plant gates to continuously remind everyone about safe working practices and environment so as to inculcate a culture of safety amongst the workers. Safety day / week celebration is being organized every year with a view to arouse and motivate safety consciousness amongst the employees.

| CORPORATE SOCIAL RESPONSIBILITY_

In line with the provisions of the Companies Act, 2013, the Company has framed its Corporate Social Responsibility (CSR) policy for the development of programmes and projects for the benefit of weaker sections of the society and the same has been approved by the CSR Committee and the Board of Directors of the Company.

The Corporate Social Responsibility (CSR) policy of the Company provides a road map for its CSR activities. The purpose of CSR Policy is to devise an appropriate strategy and focus its CSR initiatives and lay down the broad principles on the basis of which the Company will fulfill its CSR objectives. As per the said policy, the Company continues the strategy of discharging part of its CSR responsibilities related to social service through various trusts/ societies, in addition to its own initiatives and donations made to other non-government organizations.

The CSR Policy has been uploaded on the Company''s website and may be accessed at the link http://www.birlacorporation.com/ investors/csr-policy.pdf.

Pursuant to the requirement under Section 135 of the Companies Act, 2013 and Rules made there under a Report on CSR activities and initiatives taken during the year in the prescribed format is given in "Annexure - D", which is annexed hereto and forms part of the Directors'' Report.

The Company is actively associated with various social and philanthropic activities undertaken on its own as well as by different Trusts and Societies. As a constructive partner in the communities in which it operates, the Company has been taking concrete action to realize its social responsibility objective. The Company has been playing a pro-active role in the socioeconomic growth and has contributed to all spheres ranging from health, education, empowerment of women, rural infrastructure development, environment conservation etc. In the past nine decades, the Company has supported innumerable social initiatives in India, touching the lives of thousands of people positively by supporting environmental and health-care projects and social, cultural and educational programs.

Health, Educational and Social Initiatives :

The Company provides active assistance, financial as well as managerial, to various hospitals and educational and philanthropic institutions set up by trusts and societies.

The Company is financially and otherwise contributing to M/s Madhav Prasad Priyamvada Birla Apex Charitable Trust for construction of a 200 beds multi specialty Hospital namely "M. P. BIRLA HOSPITAL & RESEARCH CENTRE" which is situated near the cement plant of the Company at Chittorgarh, Rajasthan. The total built up area of the hospital and housing building is approximately 2.00 lacs Sq. ft. and has basement, ground and 4 floors. The hospital has a separate 4 floors residential building for the residence of doctors and nurses who will be engaged in hospital duty.

The agencies engaged for Civil, Electricals, Plumbing & Fire Fighting, HVAC (Air Conditioners), Elevators, DG Sets, UPS, Medical Gas Pipe Line Systems, Central Sterile Services Department, Modular Operation Theatre, Solar Water Heater and other such agencies required for the construction of the Hospital are working simultaneously and satisfactorily. The Interior & Furniture Contractors are also doing their job along with other agencies engaged for the project. Almost 75% of the construction and finishing work have been completed.

Initiatives are being taken to invite quotations for Equipment for the Hospital. Measures are being taken for appointment of Doctors, Technicians and paramedical Staff. It is expected that the hospital shall start operation in the latter half of 2017.

With a capacity of up to 200 beds, the hospital will initially commence operations with 100 beds and would have, in phases, diagnostic and treatment facilities for departments like Emergency, Imaging, Pathology, Pharmacy, Blood Bank, OPD, Operation Theatre, ICCU, Burn Unit, Orthopaedics, Gynaecology & Obstetrics, NICU & Child Care, Urology, Nephrology, Cardiology, Neurology, Dental, ENT, Dermatology, Ophthalmology amongst others.

This apart, the CSR activities undertaken include:

01] Health care activities :

The Company supports various social development activities in the area of healthcare by way of providing free medical checkup and administer free treatment and medicines for the needy people, organized free eye camps in rural areas including eye surgery in rural areas, organized health awareness camps, wellness clinic, stress management camp, carried out free treatment of Asthma and Cancer, provided 1000 nos. baby kits for newly born babies to improve health, hygiene and reducing death rate. Doctors team from Company''s dispensary regularly visit nearby villages at our plant every month for medical checkup, free treatment and medicines.

02] Education :

The Company provides financial and infrastructural support to the schools located close to the Company''s plants, by way of repairing and renovating the buildings, providing furniture wherever required. School dresses, winter clothes, books and stationery, school bags and other materials are also provided free of cost to the needy students. The Company also provides scholarships and conducts other educational programme including vocational and summer training to management, engineering and other students on regular basis. Computer training is also being provided to the students. Students from various institutions are allowed to visit the plant and study the system as a part of their education.

03] Empowerment of women :

With a view to bring advancement, development and empowerment of women and also to elevate their economic condition, the Company has taken various initiatives to promote skill building and income generating schemes for women in surrounding villages of factory and mining area. The initiatives include income generating activities such as ''Sewing Training Programmes'' and educating them about the stitching and distribution of sewing machines free of cost. Necessary training and support is provided to women self-help groups under the projects to make them self reliant. The Company also organizes Rural Women Sports Meet in which women of various villages surrounding Company''s mining area participate.

04] Animal welfare and livestock development :

The Company launched Livestock development and improved agricultural programme with the support of M/s. BAIF Development Research Foundation, Pune, in the villages nearby the mining areas of the Company. The programme aims to provide livelihood support and improve socioeconomic condition of the local people and initiate various rural development projects e.g. to help in developing high yielding breeds of cattle and small ruminants such as goats and sheep, improve agricultural practices by providing good quality of seeds and training on best practices to the farmers by agriculture specialists. Promotion of organic vegetable and seasonal crops in our mining areas was initiated. Use of agricultural waste in terms of energy conservation and renewable energy development were undertaken. Several sanitation and hygiene programme are organized in schools and villages nearby our factory and mining areas.

05] Promotion of rural sports :

The Company provides financial support in organizing various State level sports meet including State level Kabaddi. The Company also provides sports material to the prisoners of Central Jail.

06] Other Social Initiatives :

The Company undertakes other social welfare activities and rural development projects including providing drinking water facility, water cooler in villages near its plant, contribution to mass marriages, repairing of hand pumps and submersible pumps, renovation of temple and public parks, deepening and cleaning of ponds, white washing in hospital, providing ambulance, construction of Stop Dam. The Company has made contribution towards various art and cultural activities including that of Meera Mahotsav and Dashera Mela. Also contributed installing solar lights and arranged proper lightening facilities on the roads of villages. The Company also financially supported construction activities including those for community hall, boundary wall and rooms for villagers.

07] Environmental sustainability :

The Company believes in sustainable development by promoting clean and pollution free environment and making the environment eco friendly. Accordingly, various initiatives have been taken for Clean Development Mechanism (CDM) and pollution prevention. Sustainable development and environmental dimension forms an integral part of the Company''s business decisions.

The Company has started using Alternative Fuel and Raw Material Feeding System (AFRS) for higher use of alternative fuel on continuous basis at its clinker manufacturing units. This pioneering move had ensured the availability of alternative fuel throughout the year and has resulted in reduction of fuel cost and also helped in reducing the carbon footprint.

Extensive eco friendly plantations and beautifications of plant and residential colonies have been undertaken. Regular inspection and maintenance of pollution equipment are done and emission levels are maintained within the statutory limits.

Measures have been taken during the year for further improving the environmental performance such as installation of Bag Dust Collectors and new water spray system for controlling dust emission. SO2 & NOX gas analyzer in kiln stack has been installed for close monitoring. Sheds are constructed for maintaining good housekeeping inside the plant premises. Measures have also been taken for conservation of limestone reserves. Water tankers, pumps, rain guns and water spray system have been provided for pressurized spray in order to control dust pollution around mining area and roads.

The Waste Heat Recovery System at Satna and Chanderia plants of the Company uses the waste hot gases coming out of the preheater and clinker cooler to generate substantial power thereby reducing Green House Gas (GHG) emissions into the atmosphere. Grinding aid is introduced in all the units to improve consumption of Fly Ash and Slag. Further, to protect the environment, the Company has consumed 10.15 lac tonnes of Fly ash during the year 2016-17 at various cement plants of the Company. This has resulted in reduction of clinker usage, which in turn reduced GHG emissions at our plants, without compromising on the quality and strength of cement.

| BUSINESS RESPONSIBILITY REPORT_

The Business Responsibility Report as required under Regulation 34(2) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 forms an integral part of this Annual Report.

| DIRECTORS AND KEY MANAGERIAL PERSONNEL_

Retirement by Rotation

Shri Harsh V. Lodha (DIN: 00394094), Chairman retires from the Board by rotation and being eligible, offers himself for reappointment.

The above is subject to the approval of the shareholders in the ensuing Annual General Meeting of the Company.

Key Managerial Personnel (KMP)

The following are the Key Managerial Personnel of the Company:

1. Shri B.R. Nahar: Managing Director

2. Shri P. Majumdar: Wholetime Director designated as Chief Management Advisor

3. Shri A. Saraogi: Chief Financial Officer

4. Shri G. Sharma: Company Secretary

| DECLARATION BY INDEPENDENT DIRECTORS_

Shri Vikram Swarup, Shri Anand Bordia, Shri Brij Behari Tandon, Shri Dhruba Narayan Ghosh, Dr. Deepak Nayyar and Smt. Shailaja Chandra are Independent Directors on the Board of the Company. The Independent Directors hold office for a fixed term of five years and are not liable to retire by rotation.

The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed both under the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

COMPANY''S POLICY ON DIRECTORS'' APPOINTMENT AND REMUNERATION_

The Board of Directors of the Company, based on the recommendation of the Nomination and Remuneration Committee, has formulated a Remuneration Policy.

The remuneration policy of the Company, inter alia, includes the aims and objectives, principles of remuneration, guidelines for remuneration to Executive Directors and Non-Executive Directors, fixed and variable components in the remuneration package, criteria for identification of the Board members and appointment of senior management.

The criteria for identification of the Board Members including those for determining qualification, positive attributes, independence etc. are summarily given hereunder:

- The Board member shall possess appropriate skills, qualification, characteristics and experience. The objective is to have a Board with diverse background and experience in business, government, academics, technology, human resources, social responsibilities, finance, law etc. and in such other areas as may be considered relevant or desirable to conduct the Company''s business in a holistic manner.

- Independent director shall be person of integrity and possess expertise and experience and/or someone who the Committee/Board believes could contribute to the growth/ philosophy/strategy of the Company.

- In evaluating the suitability of individual Board members,

- the Committee takes into account many factors, including general understanding of the Company''s business dynamics, global business, social perspective, educational and professional background and personal achievements.

- Director should possess high level of personal and professional ethics, integrity and values. He should be able to balance the legitimate interest and concerns of all the Company''s stakeholders in arriving at decisions, rather than advancing the interests of a particular constituency.

- Director must be willing to devote sufficient time and energy in carrying out their duties and responsibilities effectively. He must have the aptitude to critically evaluate management''s working as part of a team in an environment of collegiality and trust.

- The Committee evaluates each individual with the objective of having a group that best enables the success of the Company''s business and achieve its objectives.

| BOARD EVALUATION_

The Board has carried out an annual evaluation of its own performance, the Directors individually as well as the evaluation of the functioning of various Committees. The Independent Directors also carried out the evaluation of the Chairman and the Non-Independent Directors.

| CRITERIA FOR EVALUATION OF DIRECTORS_

For the purpose of proper evaluation, the Directors of the company have been divided into 3 (three) categories i.e. Independent, Non Independent & Non-Executive and Executive.

The criteria for evaluation includes factors such as engagement, strategic planning and vision, team spirit and consensus building, effective leadership, domain knowledge, management qualities, team work abilities, result/ achievements, understanding and awareness, motivation/ commitment/ diligence, integrity/ethics/ values and openness/receptivity.

SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES_

During the year under review, Reliance Cement Company Private Limited (RCCPL) has become a wholly owned material subsidiary of the Company w.e.f. 22nd August, 2016. As on 31st March, 2017, the Company is having 7 (seven) subsidiary companies along with 2 (two) associate companies.

Since the acquisition of RCCPL on 22nd August, 2016, considerable efforts have been made for improving the operational efficiencies of RCCPL. The plants of RCCPL have started performing at strong operating parameters which are comparable with the benchmarks in the industry. Measures are being taken to further improve operational efficiencies which include installation of Waste Heat Recovery System (WHRS) and removal of infrastructural bottlenecks. This will enable the Company obtain greater synergy benefits.

The three subsidiary companies namely, Thiruvaiyaru Industries Limited, Birla North East Cement Limited and Birla Corporation Cement Manufacturing PLC, Ethiopia are under the process of voluntary winding up. In view of the aforesaid, these subsidiaries have not been considered in preparing the consolidated Balance Sheet.

No company has become a joint venture during the financial year 2016-17.

Pursuant to Section 129(3) of the Companies Act, 2013 read with Rule 5 of the Companies (Accounts) Rules, 2014, a statement containing salient features of the financial statements of Subsidiaries/Associate Companies/Joint Ventures is given in Form AOC-1 forming part of the consolidated financial statement and hence not repeated here for the sake of brevity.

| DEPOSITS_

During the year under review, the Company has not accepted deposits from the public falling within the ambit of Section 73 of the Companies Act, 2013 and the Rules framed there under.

DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS, COURTS AND TRIBUNALS

No significant and material order has been passed by the regulators, courts, tribunals impacting the going concern status and company''s operations in future.

| INTERNAL CONTROL AND SYSTEMS_

The Company has adequate internal control procedures commensurate with its size and nature of business. The objective of these procedures is to ensure efficient use and protection of the Company''s resources, accuracy in financial reporting and due compliance of statutes and corporate policies and procedures.

Internal Audit is conducted periodically across all locations by firms of Chartered Accountants who verify and report on the efficiency and effectiveness of internal controls. The adequacy of internal control systems are reviewed by the Audit Committee of the Board in its periodical meetings.

| INTERNAL FINANCIAL CONTROL SYSTEM_

The Company has a robust and comprehensive Internal Financial Control system commensurate with the size, scale and complexity of its operations. The system encompasses the major processes to ensure reliability of financial reporting, compliance with policies, procedures, laws, and regulations, safeguarding of assets and economical and efficient use of resources.

The policies and procedures adopted by the company ensures the orderly and efficient conduct of its business and adherence to the company''s policies, prevention and detection of frauds and errors, accuracy and completeness of the records and the timely preparation of reliable financial information.

The Internal auditors and the Management Audit Department continuously monitors the efficacy of Internal Financial Control system with the objective of providing to the Audit Committee and the Board of Directors, an independent, objective and reasonable assurance on the adequacy and effectiveness of the organization’s risk management with regard to the Internal Financial Control system.

| VIGIL MECHANISM / WHISTLE BLOWER POLICY

The Company has framed a Vigil Mechanism/Whistle Blower Policy to deal with unethical behavior, actual or suspected fraud or violation of the company''s code of conduct or ethics policy, if any. The Vigil Mechanism/Whistle Blower Policy has also been uploaded on the website of the Company.

DETAILS RELATING TO REMUNERATION OF DIRECTORS, KEY MANAGERIAL PERSONNEL AND EMPLOYEES

Disclosure pertaining to remuneration and other details as required under Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is marked as "Annexure - E" which is annexed hereto and forms part of the Directors'' Report.

| PARTICULARS OF EMPLOYEES_

In terms of the provisions of the Companies Act, 2013 and Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 a statement comprising the names of top 10 (ten) employees in terms of remuneration drawn and every persons employed throughout the year, who were in receipt of remuneration exceeding the prescribed limit, forms an integral part of Directors'' Report.

The above Annexure is not being sent along with this Annual Report to the Members of the Company in line with the provision of Section 136 of the Companies Act, 2013. Members who are interested in obtaining these particulars may write to the Company Secretary at the Registered Office of the Company. The aforesaid Annexure is also available for inspection by Members at the Registered Office of the Company, 21 days before and up to the date of the ensuing Annual General Meeting during the business hours on working days.

PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT THE WORKPLACE_

As required by the Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013, the Company has formulated and implemented a policy on prevention of sexual harassment at the workplace with a mechanism of lodging complaints. During the year no complaints were reported to the Board.

| AUDITORS & AUDITORS'' REPORT_

Statutory Auditor :

Pursuant to the provisions of Section 139 of the Companies Act, 2013 and Rules made there under, the term of office of Messrs H.P Khandelwal & Co., Chartered Accountants, the Statutory Auditors of the Company will conclude from the conclusion of the ensuing Annual General Meeting (AGM) of the Company. The Board of Directors places on record its appreciation to the services rendered by Messrs H.P Khandelwal & Co., as Statutory Auditors of the Company.

Subject to the approval of the Members, the Board of Directors of the Company has recommended the appointment of Messrs. V. Sankar Aiyar & Co., Chartered Accountants (Firm Registration No.109208W), as Statutory Auditors of the Company for a term of 5 consecutive years from the conclusion of the ensuing AGM till the conclusion of the 102nd AGM to be held in 2022, subject to ratification of their appointment by Members at every subsequent AGM till the conclusion of their tenure.

The Company has received written consent and certificate of eligibility in accordance with Sections 139, 141 and other applicable provisions of the Companies Act, 2013 and Rules made there under (including any statutory modification(s) or re-enactment(s) thereof for the time being in force) from Messrs.

V. Sankar Aiyar & Co. Further, Messrs. V. Sankar Aiyar & Co., Chartered Accountants, have confirmed that they hold a valid certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India as required under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Accordingly, the Board recommends the resolution in relation to appointment of Statutory Auditors, for the approval by the shareholders of the Company.

There is no audit qualification for the year under review.

Cost Auditors :

The Board of Directors on the recommendation of the Audit Committee appointed M/s. Shome & Banerjee, (Firm Registration No. 000001), Cost Accountant, as the Cost Auditors of the Company for the financial year 2017-18 for auditing the cost records relating to Cement, Jute Goods and Steel products manufactured by the Company. The remuneration proposed to be paid to the Cost Auditor is subject to ratification by the shareholders of the Company at the ensuing AGM.

M/s. Shome & Banerjee has confirmed that they are free from any disqualifications specified under Section 141(3) and proviso to Section 148(3) read with Section 141(4) and all other applicable provisions of the Companies Act, 2013 and their appointment meets the requirements of Section 141 (3)(g) of the Companies Act, 2013. They have further confirmed their independent status and arm''s length relationship with the Company.

The Board of Directors places on record its appreciation to the services rendered by Shri Somnath Mukherjee, Cost Accountant, who were Cost Auditor of the Company for the financial year 2016-17.

The Company submits its Cost Audit Report with the Ministry of Corporate Affairs within the stipulated time period.

Secretarial Auditor :

The Board had appointed Ms. Mamta Binani, Practising Company Secretary to conduct Secretarial Audit of the Company for the Financial Year 2016-17. The Secretarial Audit Report for the Financial Year ended 31st March, 2017 is annexed herewith and marked as "Annexure - F". The Report is self-explanatory and do not call for any comments.

None of the Auditors of the Company have reported any fraud as specified under the second proviso of Section 143(12) of the Companies Act, 2013 (including any statutory modification(s) or re-enactment(s) thereof for the time being in force).

| APPRECIATION_

We wish to place on record our appreciation for the continued assistance and co-operation extended to the Company by the Government of India, State Governments, Financial Institutions and Banks, Dealers and Customers, Shareholders and to all others who are continuing their assistance to the Company.

For and on behalf of the Board of Directors

Harsh V. Lodha Bachh Raj Nahar

Chairman Managing Director

Kolkata (DIN : 00394094) (DIN : 00049895)

Dated, the 26th day of May, 2017


Mar 31, 2015

To the Shareholders

The Directors have pleasure in presenting their annual report on the business and operations of your Company together with the audited accounts of the Company and its subsidiaries for the year ended 31st March, 2015.

FINANCIAL PERFORMANCE

The summarized standalone and consolidated results of your Company are given in the table below :

(Rs. in Crores)

STANDALONE CONSOLIDATED PARTICULARS 31.03.2015 31.03.2014 31.03.2015 31.03.2014

Revenue from Operations (Gross) 3692.17 3477.92 3692.17 3477.92

Total Revenue 3365.83 3141.26 3365.97 3141.57

Profit before F inance Costs, Tax, Deprec -iation, Amorti -zation and Exceptional items 457.55 381.38 457.61 382.03

Finance Costs 78.37 85.59 78.37 85.60

Profit before Tax, Deprec iation, Amortization and Exceptional items 379.18 295.79 379.24 296.43

Depreciation and Amortization Expense 153.46 132.58 153.75 133.06

Exceptional items 12.84 10.93 12.84 10.93

Tax Expense (Net) 37.44 203.74 22.52 166.03 37.41 204.00 22.61 166.60

Minority Interest - 0.01

Profit for the year 175.44 129.76 175.24 129.82

Other adj ustment 0.13

Surplus as per last Fin ancial State -ments 196.11 149.91 196.55 150.29

371.55 279.67 371.92 280.11

Appropr -iations :

Debenture Redemption Reserve 11.50 16.50 11.50 16.50

Proposed Dividend 46.21 46.21 46.21 46.21

Corporate Div. Tax on proposed Div. 9.40 7.85 9.40 7.85

General Reserve 100.00 167.11 13.00 83.56 100.00 167.11 13.00 83.56

Net Surplus 204.44 196.11 204.81 196.55

DIVIDEND

Your Directors are pleased to recommend a dividend of Rs. 6 per share (i.e.60%) on 7,70,05,347 ordinary shares for the year ended 31st March, 2015 aggregating to Rs. 55.61 crores including Corporate Dividend Tax of Rs. 9.40 crores as compared to Rs. 54.06 crores (including Corporate Dividend Tax of Rs. 7.85 crores) in the previous year.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements.

CREDIT RATING

CRISIL has re-affirmed '' Al " rating to the Company for Rs. 50 crores Short Term Debt Programme and "AA /Stable" rating in respect of outstanding Non-Convertible Debentures of Rs. 400 crores issued by the Company. This rating indicates high degree of safety with regard to timely payment of interest and principal of the instrument. Further, CRISIL has assigned "Al " rating for Rs. 150 crores Short Term Debt Programme.

Further, Credit Analysis and Research Limited (CARE) has also re-affirmed "CARE AA " rating for the Company''s Long Term Bank facilities and "CARE Al " for the Company''s Short Term Bank facilities aggregating to Rs. 1298 crores. The rating Committee of CARE has also re-affirmed "CARE AA " for the outstanding Non-Convertible Debentures of Rs. 400 crores and "CARE Al " rating for the Short Term Debt programme of Rs. 50 crores.

FINANCE

The high financial discipline and prudence and the strong credit rating has enabled the Company to reduce its cost of working capital borrowings. The Company continuously undertakes review of liability management so as to reduce cost.

During the year, the Company has repaid the Secured Redeemable Non- Convertible Debentures aggregating to Rs. 100 crores.

Further, the Company efficiently manages its surplus funds by investing in highly rated debt securities and debt schemes of mutual funds considering safety, liquidity and return.

CORPORATE GOVERNANCE

The Company has complied with the Corporate Governance Code as stipulated under the Listing Agreement with the Stock Exchanges. A separate section on Corporate Governance, along with certificate from the auditors confirming the compliance, is annexed and forms part of the Annual Report.

RELATED PARTY TRANSACTIONS

All transactions entered with Related Parties during the financial year were on an arm''s length basis and were in the ordinary course of business and the provisions of Section 188 of the Companies Act, 2013 are not attracted. Thus, disclosure in Form AOC-2 is not required. Further, there are no materially significant related party transactions during the year under review made by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of the Company at large.

All Related Party Transactions are placed before the Audit Committee for approval. Prior omnibus approval of the Audit Committee is obtained for the transactions which are of a foreseen and repetitive nature. The transactions entered into pursuant to the omnibus approval so granted along with a statement giving details of all related party transactions is placed before the Audit Committee.

The policy on Related Party Transactions as approved by the Board is uploaded on the Company''s website and may be accessed at the link http://www.birlacorporation.com/investors/related-party-transactions- policy.pdf.

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

As required under provisions of the Companies Act, 2013 and Rule 8(3) of Companies (Accounts) Rules, 2014 details relating to Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo are given in the Annexure - B, which is annexed hereto and forms part of the Directors''Report.

RISK MANAGEMENT

Risk management is the process of identification, assessment, and prioritisation of risks followed by coordinated efforts to minimise, monitor and mitigate/control the probability and / or impact of unfortunate events or to maximise the realisation of opportunities. The Company has laid a comprehensive Risk Assessment and Minimization Procedure which is reviewed by the Audit Committee and approved by the Board from time to time. These procedures are reviewed to ensure that executive management controls risk through means of a properly defined framework. The major risks have been identified by the Company and its mitigation process/measures have been formulated in the areas such as business, project execution, event, financial, human, environment and statutory compliance.

AWARDS & RECOGNITIONS

During the year, Company''s Cement Unit: Satna Cement Works has been conferred the Greentech Gold Award 2014 for Outstanding Achievement in the areas of Environment Management and Corporate Social Responsibility. The Unit has received 5S certificate on 5th August 2014 from Quality Circle Forum of India, Hyderabad.

Further, Birla Cement Works has received the Greentech Safety Gold Award-2014 from Greentech Foundation, New Delhi for outstanding achievement in safety management and has also bagged Greentech Silver Award for Outstanding Achievement in Environment Management.

OCCUPATIONAL HEALTH & SAFETY

Employees of the Company play an important role in the industrial operation and company''s growth, and are considered as the most valuable assets and their personal and professional development along with their robust health and safety is one of the top priorities of the organization.

To get good results in the accident prevention we have included safety programmes like investigation & analysis of all serious and fatal accidents, recommendations / remedial measures to prevent similar accidents. Near- miss situation / incident with no injury is accorded serious consideration for planning of preventive measures. As a part of safety measures, we are ensuring almost cent percent use of Personal Protective Equipment by developing voluntary safety culture. Various periodical health check up programmes are conducted from time to time so as to monitor health hazards, if any.

The Company is complying with all the Statutory Provisions as required under the Factories Act. Competent persons carry out compulsory testing / examination of lifting tools, pressure vessels, cranes, safety belts etc. as per statutory requirement. Safety posters, slogans are widely displayed in the conspicuous places at the factory including work places, canteen and plant gates to continuously remind everyone about safe working practices and environment so as to inculcate a culture of safety amongst the workers. Safety day / week celebration is being organized every year with a view to arouse and motivate safety consciousness amongst the employees.

CORPORATE SOCIAL RESPONSIBILITY

In line with the provisions of the Companies Act, 2013, the Company has framed its Corporate Social Responsibility (CSR) policy for the development of programmes and projects for the benefit of weaker sections of the society and the same has been approved by the CSR Committee and the Board of Directors of the Company. The Corporate Social Responsibility (CSR) policy of the Company provides a road map for its CSR activities. The purpose of CSR Policy is to devise an appropriate strategy and focus its CSR initiatives and lay down the broad principles on the basis of which the Company will fulfill its CSR objectives. As per the said policy, the Company continues the strategy of discharging part of its CSR responsibilities related to social service through various trusts/societies in addition to its own initiatives and donations made to other non-government organizations.

The CSR Policy has been uploaded on the Company''s website and may be accessed at the link http://www.birlacorporation.com/investors/csr- policy.pdf.

Pursuant to the requirement under Section 135 of the Companies Act, 2013 and Rules made thereunder a report on CSR activities and initiatives taken during the year in the prescribed format is given in Annexure - C, which is annexed hereto and forms part of the Directors'' Report.

The Company is actively associated with various social and philanthropic activities undertaken on its own as well as by different Trusts and Societies. As a constructive partner in the communities in which it operates, the Company has been taking concrete action to realize its social responsibility objective. The Company has been playing a pro-active role in the socio- economic growth and has contributed to all spheres ranging from health, education, empowerment of women, rural infrastructure development, environment conservation etc. In the past nine decades, the Company has supported innumerable social initiatives in India, touching the lives of thousands of people positively by supporting environmental and health- care projects and social, cultural and educational programs.

Health, Educational and Social Initiatives

The Company provides active assistance, financial as well as managerial, to various hospitals and educational and philanthropic institutions set up by trusts and societies.

The Company is financially and otherwise contributing to the M/s Madhav Prasad Priyamvada Birla Apex Charitable Trust for construction of a 200 beds multi speciality Hospital namely "M. P. BIRLA HOSPITAL & RESEARCH CENTRE" which is situated near cement plant of the Company at Chittorgarh, Rajasthan. The total built up area of the hospital building and housing building will be approximately 1.90 lacs Sq. ft. and will have basement, ground and 1st to 4th floors. The hospital shall have a separate residential building for resident doctors and nurses. Slab casting up to the 4th floor of the Hospital Block and Housing Block is under the various stages of completion. Work Order in respect of Civil, Electricals, Plumbing & Fire Fighting, HVAC (Air Conditioners), Elevators and DG Sets has already been awarded. Awarding of tender in respect of UPS is under process. Slab casting up to the 4th floor of the Hospital Block and Housing Block is under the various stages of completion. Brick work, Flooring, Dados work as well as Electrical, Plumbing, HVAC and Elevator work is progressing simultaneously. Initiatives are being taken to invite quotations in respect of Equipments for the Hospital. Order in respect of Medical Gas Pipeline System, Central Sterile Services Department Equipments, Scrub Station and Kitchen Equipments has already been awarded. It is expected that the hospital shall start operation in the year 2016.

This apart, the CSR activities undertaken include :

01. Health care activities :

The Company supports various social development activities in the area of healthcare by way of providing free medical check up and administer free treatment and medicines for the needy people, "State- of-Art" treatment facility for various critical diseases in remote areas, running voluntary centres and dispensaries providing much-needed medical services to the local population at a highly subsidized rate, organising free eye Camps including eye screening, cataract operation and surgery Camps, Organizing health awareness camps and programs, AIDS awareness, Wellness Clinics and Mobile Medical Vans, contribution for cleaning work at Mahila and Bal Chikitsalaya etc.

Free health camps are organised in rural areas to provide quality healthcare services to the local population as well as to the population of the area surrounding the Company''s cement plants at Satna by M.P Birla Hospital and Priyamvada Birla Cancer Research Institute.

02. Education:

The Company provides financial support for free education to children in the schools. The Company has also been providing infrastructural support to the schools located close to the Company''s plants, by way of repairing and renovating the buildings from time to time. The Company contributed towards ''Sarv Shiksha Abhiyan''. School dresses, winter clothes, books, stationery and other materials are provided free of cost to needy students on regular basis. Computer training is provided to the students in the villages in nearby area. Students from various educational institutions are allowed to visit the plant and study the system as a part of the education course. The Company also provides vocational training to management and engineering students and workers on regular basis.

03. Empowerment of women:

With a view to improve economic condition and help in development and empowerment of women, the Company has taken various initiatives to promote skill building and income generating schemes for women in surrounding villages of factory and mining area. The initiatives include income generating activities such as Agarbatti making and spices manufacturing projects. Necessary training and support is provided to women self-help groups under the projects to make them self reliant. The Company also organises rural women sports meet in which women of various villages surrounding company''s mining area participate.

04. Animal welfare and livestock development :

With the support of M/s. BAIF Development Research Foundation, Pune, Livestock development and improved agricultural programme were undertaken in the villages nearby the mining areas of the Company. The programme aims to provide livelihood support and improve socio-economic condition of the local people and initiate various rural development projects e.g. to help in developing high yielding breeds of cattle, goats and sheep, improve agricultural practices by providing good quality of seeds and training on best practices to the farmers by agriculture specialists. Promotion of organic vegetable and seasonal crops in our mining areas was initiated. Use of agricultural waste in terms of energy conservation and renewable energy development were undertaken. Several sanitation and hygiene programme are organised in schools and villages nearby our factory and mining areas.

05. Promotion of rural sports:

The Company organises sports and games activities for villagers in nearby mining and factory areas. Financial support is provided for organizing State level Kabaddi rural sports meet at villages. The Company organises All India Independence Day Football Tournament at Satna which is registered as Class 1 Tournament by All India Football Association, New Delhi.

06. Other Social Initiatives:

The Company undertakes other social welfare activities and rural development projects including providing drinking water facility in villages near its Plants, repairing of hand pumps & submersible pumps, maintenance and renovation of heritage buildings and public parks. The Company has also contributed for development of historical and religious places Ramvan, Muktidham, Uttarakhand disaster, etc. The Company has made contribution towards various art and cultural activities including that of Meera Mahotsav and Hast ShilpMela.

07. Environmental sustainability :

The Company has undertaken consistent efforts in promoting clean and pollution free environment and making the environment eco friendly. Accordingly, various initiatives have been taken for Clean DevelopmentMechanism (CDM) and pollution prevention. Sustainable development and environmental dimension forms an integral part of the Company''s business decisions.

Alternative Fuel and Raw Material System (AFRS) - During the year, the Company has taken major initiative for setting up of AFRS at its cement plants at Satna and Chanderia, orders for which has already been placed. The Company proposes to use alternative fuel in the form of agricultural waste which is available in the vicinity of our cement plants. The alternative fuel can be used in the Kiln to the extent of 10-15% which would reduce the consumption of coal and lead to cost saving.

Extensive plantation and gardening have been undertaken at all the Units of the Company both in and around mining, plant and residential areas. Regular inspection and maintenance of pollution equipment are done and emission levels are maintained within the statutory limits.

Measures have been taken during the year for further improving the environmental performance such as installation of Bag Dust Collectors and new water spray system for controlling dust emission. Sheds are constructed for maintaining good house keeping inside the plant premises. S02 & NOx gas analyzer in kiln stack has been installed for close monitoring.

Water tankers, pumps, rain guns and water spray system have been provided for pressurized spray in order to control dust pollution around mining area and roads. Measures have also been taken for conservation of limestone reserves.

The Waste Heat Recovery System at Satna and Chanderia plants of the Company has been implemented which uses the waste hot gases coming out of the pre-heater and clinker cooler to generate substantial power thereby reducing GHG emissions into the atmosphere. Grinding aid is introduced in all the units to improve consumption of Fly Ash and Slag. Further, to protect the environment, the Company has consumed 15.53 lac tonnes of Fly ash during the year 2014-15 at various cement plants of the Company. This has resulted in reduction of clinker usage, which in turn reduced Green House Gas (GHG) emissions at our plants, without compromising on the quality and strength of cement.

BOARD EVALUATION

Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board has carried out an annual evaluation of its own performance, the Directors individually as well as the evaluation of the working of various Committees. The Independent Directors also carried out the evaluation of the Chairman and the Non-Independent Directors, the details of which are covered in the Corporate Governance Report.

CRITERIA FOR EVALUATION OF DIRECTORS

For the purpose of proper evaluation, the Directors of the Company have been divided into 3 (three) categories i.e. Independent, Non-Independent & Non-Executive and Executive.

The criteria for evaluation includes factors such as engagement, strategic planning and vision, team spirit and consensus building, effective leadership, domain knowledge, management qualities, team work abilities, resulV achievements, understanding and awareness, motivation/ commitment diligence, integrity/ethics/values and openness/receptivity.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

i) On the recommendation of the Nomination and Remuneration Committee, the Board of Directors of the Company during its Meeting held on 5th February, 2015 appointed Ms. Shailaja Chandra as an Additional Independent Woman Director on the Board of the Company. The requirement under Section 149 of the Companies Act, 2013 and Clause 49 of the Listing Agreement also stands complied with this appointment.

ii) Shri Pracheta Majumdar, Whole-time Director designated as Chief Management Advisor retires from the Board by rotation and being eligible, offers himself for re-appointment.

The above are subject to the approval of the shareholders in the ensuing Annual General Meeting of the Company.

In view of the provisions of Section 203 of the Companies Act, 2013 Shri Bachh Raj Nahar, Managing Director, Shri Pracheta Majumdar, Whole- time Director designated as Chief Management Advisor, Shri Aditya Saraogi, Chief Financial Officer and Shri Girish Sharma, Company Secretary were identified and appointed as Key Managerial Personnel of the Company.

SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES

The Board of Directors of the Company has decided to wind-up the subsidiary company namely "Birla Corporation Cement Manufacturing PLC, Ethiopia. The above decision was taken as the project was not commercially viable in view of the surplus cement capacities created which are far in excess of the demand. The two subsidiary companies namely, Thiruvaiyaru Industries Limited and Birla North East Cement Limited are under the process of voluntary winding up. In view of the aforesaid, these subsidiaries have not been considered in preparing the consolidated Balance Sheet.

During the previous financial year, the Board of Directors approved the Scheme of Amalgamation of Talavadi Cements Limited a 98% Subsidiary

Company with Birla Corporation Limited with an appointed date of 1st April, 2013. A Court Convened Meeting of the Equity Shareholders of the Company was held during the year for approving the Scheme of Amalgamation of Talavadi Cements Limited, a subsidiary with Birla Corporation Limited. The matter is pending before Hon''ble High Court at Calcutta for its approval.

No company has become a joint venture during the financial year 2014-15.

A report on the performance and the financial position of 6 (six) subsidiary companies along with 2 (two) associate companies as per Companies Act, 2013 forms part of the consolidated financial statement and hence not repeated here for the sake of brevity.

DEPOSITS

The Company has discontinued the Deposit scheme in the financial year 2014-15 and no fresh Deposits have been accepted during the year. The amount of Deposit lying with the Company at the beginning of the year has been fully repaid and there is no outstanding balance as on 31st March, 2015.

DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS, COURTS AND TRIBUNALS

No significant and material order has been passed by the regulators, courts, tribunals impacting the going concern status and company''s operations in future.

INTERNAL CONTROL AND SYSTEMS

The Company has adequate internal control procedures commensurate with its size and nature of business. The objective of these procedures is to ensure efficient use and protection of the Company''s resources, accuracy in financial reporting and due compliance of statutes and corporate policies and procedures.

Internal Audit is conducted periodically across all locations by firms of Chartered Accountants who verify and report on the efficiency and effectiveness of internal controls. The adequacy of internal control systems are reviewed by the Audit Committee of the Board in its periodical meetings.

INTERNAL FINANCIAL CONTROL SYSTEM

The Company has a robust and comprehensive Internal Financial Control system commensurate with the size, scale and complexity of its operations. The system encompasses the major processes to ensure reliability of financial reporting, compliance with policies, procedures, laws, and regulations, safeguarding of assets and economical and efficient use of resources.

The policies and procedures adopted by the company ensures the orderly and efficient conduct of its business and adherence to the company''s policies, prevention and detection of frauds and errors, accuracy and completeness of the records and the timely preparation of reliable financial information.

The Internal auditors and the Management Audit Department continuously monitors the efficacy of Internal Financial Control system with the objective of providing to the Audit Committee and the Board of Directors, an independent, objective and reasonable assurance on the adequacy and effectiveness of the organisation''s risk management with regard to the Internal Financial Control system.

Audit Committee meets regularly to review reports submitted by the Internal auditors. The Audit Committee also meet the Company''s Statutory Auditors to ascertain their views on the financial statements, including the financial reporting system and compliance to accounting policies and procedures followed by the Company.

VIGIL MECHANISM / WHISTLE BLOWER POLICY

In compliance with provisions of Section 177(9) of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Company has framed a Vigil Mechanism/Whistle Blower Policy to deal with unethical behaviour, actual or suspected fraud or violation of the company''s code of conduct or ethics policy, if any. The Vigil Mechanism/Whistle Blower Policy has also been uploaded on the website of the Company.

PARTICULARS OF EMPLOYEES

As required under provisions of the Companies Act, 2013 and Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, particulars of the employees concerned forms a part of the Directors'' Report. Having regard to the provisions of Section 136 of the Companies Act, 2013, the Annual Report excluding the aforesaid information is being sent to the members of the Company. Any member interested in obtaining such particulars may write to the Company Secretary of the Company.

DETAILS RELATING TO REMUNERATION OF DIRECTORS, KEY MANAGERIAL PERSONNEL AND EMPLOYEES

Disclosure pertaining to remuneration and other details as required under Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is marked as Annexure - D which is annexed hereto and forms part of the Directors''Report.

HUMAN RESOURCE DEVELOPMENT/INDUSTRIAL RELATIONS

There is a continuous effort for better Human Resource (HR) service delivery in order to better serve the customers with simpler well executed processes with proper use of technology. HR service delivery has become all the more critical in the organization due to rise in customer expectation.

The organization has a mechanism to provide employees with feedback on a continuous basis. Based on the organization''s strategic plan, HR planning processes map the capacity of the organization. The knowledge, skills and abilities of the employees are identified.

The strategic thrust of HR has been improvement of the performance of the employees through training & development and also to identify high performers who are having potential for taking higher responsibilities.

The Company had 6325 permanent employees on its rolls at the close of business hours on 31st March 2015. Industrial relations continued to remain cordial throughout the year at all the units. Suspension of Operation continues at Soorah Jute Mills, Auto Trim Division, Birlapur and at Birla Vinoleum, Birlapur. Workers of Auto Trim Division at Birlapur, Chakan, Gurgaon and Birla Vinoleum at Birlapur have availed separation.

AUDITORS & AUDITORS'' REPORT

Statutory Auditor:

The Company''s Auditors, Messrs H.P Khandelwal & Co., Chartered Accountants, retire at the ensuing Annual General Meeting of the Company and are eligible for reappointment. The members are requested to appoint the auditors and to fix their remuneration.

The notes on accounts referred to in the Auditors'' Report are self-explanatory and, therefore, do not call for any further comments.

Secretarial Auditor:

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board had appointed Ms. Mamta Binani, Practising Company Secretary to conduct Secretarial Audit of the Company for the Financial Year 2014-15. The Secretarial Audit Report for the Financial Year ended 31st March, 2015 is annexed herewith and marked as "Annexure - E". The Report is self-explanatory and do not call for any further comments.

Cost Auditors:

Pursuant to Section 148 of the Companies Act, 2013, in terms of the Central Government''s approval, the Board of Directors on the recommendation of the Audit Committee appointed Shri Somnath Mukherjee, Cost Accountant, as the Cost Auditor of the Company for the year under review relating to Cement and Jute Goods manufactured by the Company. The remuneration proposed to be paid to the Cost Auditor requires ratification of the shareholders of the Company. In view of this, your ratification for payment of remuneration to the Cost Auditor is being sought at the ensuing Annual General Meeting.

Shri Somnath Mukherjee has confirmed that his appointment is within the limits of the Section 139 of the Companies Act, 2013 and has certified that he is free from any disqualifications specified under Section 148(5) and all other applicable provisions of the Companies Act, 2013.

The Audit Committee has also received a Certificate from the Cost Auditor certifying his independence and arm''s length relationship with the Company.

The Company submits its Cost Audit Report with the Ministry of Corporate Affairs within the stipulated time period.

APPRECIATION

We wish to place on record our appreciation for the continued assistance and co-operation extended to the Company by the Government of India, State Governments, Financial Institutions and Banks, Dealers and Customers, Shareholders and to all others who are continuing their assistance to the Company.

For and on behalf of the Board of Directors Harsh V. Lodha Chairman

Bachh Raj Nahar Managing Director

Kolkata Dated, the 7th day of May, 2015


Mar 31, 2014

To the Shareholders

The Directors have pleasure in presenting their annual report on the business and operations of your Company together with the audited accounts of the Company for the year ended 31st March, 2014.

(Rs. in Crores)

31st March, 2014 31st March, 2013

I FINANCIAL RESULTS

Revenue from Operations (Gross) 3477.92 2994.34

Total Revenue 3141.26 2730.08

Profit before Finance Costs, Tax, Depreciation, Amortization and Exceptional items 381.38 519.95

Finance Costs 85.59 64.86

Profit before Tax, Depreciation, Amortization and Exceptional items 295.79 455.09

Depreciation and Amortization Expense 132.58 104.39

Exceptional items 10.93 -

Tax Expense 22.52 166.03 80.88 185.27

Profit for the year 129.76 269.82

Surplus as per last Financial Statements 149.91 109.51

279.67 379.33

Appropriations:

Debenture Redemption Reserve 16.50 16.50

Interim Dividend - 19.25

Corporate Div. Tax on Interim Dividend - 3.12

Proposed Final Dividend 46.21 34.66

Corporate Div. Tax on proposed Final Div. 7.85 5.89

General Reserve 13.00 83.56 150.00 229.42

Net Surplus 196.11 149.91

DIVIDEND

Your Directors are pleased to recommend a dividend of Rs. 6 per share (i.e.60%) on 7,70,05,347 ordinary shares for the year ended 31st March, 2014 aggregating to Rs. 54.06 crores including Corporate Dividend Tax of Rs. 7.85 crores as compared to Rs. 62.92 crores (including Corporate Dividend Tax of Rs. 9.01 crores) in the previous year.

DIRECTORS'' RESPONSIBILITY STATEMENT

As required by Section 217(2AA) of the Companies Act, 1956, your Directors state that-

(a) in the preparation of the annual accounts for the year ended 31st March, 2014, the applicable accounting standards have been followed with proper explanation relating to material departures, if any;

(b) the accounting policies adopted in the preparation of the annual accounts have been applied consistently except as otherwise stated in the Notes to Financial Statements and reasonable and prudent judgments and estimates have been made so as to give a true and fair view of the state of affairs of the Company at the end of the Financial Year 2013-14 and of the profit for the year ended 31st March, 2014;

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

(d) the annual accounts for the year ended 31st March, 2014, have been prepared on a going concern basis.

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

As required under Section 217(l)(e) of the Companies Act, 1956, details relating to Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo are given in the Annexure, which is annexed hereto and forms part of the Directors'' Report.

PARTICULARS OF EMPLOYEES

As required under Section 217(2A) of the Companies Act, 1956, and the Rules made thereunder, particulars of the employees concerned are set out in the Annexure to the Directors'' Report. Having regard to the provisions of Section 219 (l)(b)(iv) of the said Act, the Annual Report excluding the aforesaid information is being sent to the members of the Company. Any member interested in obtaining such particulars may write to the Company Secretary of the Company.

INTERNAL CONTROL AND SYSTEMS

The Company has adequate internal control procedures commensurate with its size and nature of business. The objective of these procedures is to ensure efficient use and protection of the Company''s resources, accuracy in financial reporting and due compliance of statutes and corporate policies and procedures.

Internal Audit is conducted periodically across all locations by firms of Chartered Accountants who verify and report on the efficiency and effectiveness of internal controls. The adequacy of internal control systems are reviewed by the Audit Committee of the Board in its periodical meetings.

HUMAN RESOURCE DEVELOPMENT/INDUSTRIAL RELATIONS

There is a continuous effort for better Human Resource (HR) service delivery in order to better serve the customers with simpler well executed processes with proper use of technology. HR service delivery has become all the more critical in the organization due to rise in customer expectation.

The organization has a mechanism to provide employees with feedback on a continuous basis. Based on the organization''s strategic plan, HR planning processes map the capacity of the organization. The knowledge, skills and abilities of the employees are identified.

The strategic thrust of HR has been improvement of the performance of the employees through training & development and also to identify high performers who are having potential for taking higher responsibilities.

The Company had 9899 employees on its rolls at the close of business hours on 31st March, 2014. Industrial relations continued to remain cordial throughout the year at all the units. Suspension of Operation continues since 29th March, 2004 at Soorah Jute Mills. There is Suspension of Work at Auto Trim Division, Birlapur and at Birla Vinoleum, Birlapur since 18th February, 2014 as there has been no improvement in the order position and the manufacturing activities have been closed in these units since long. Workers of Auto Trim Division at Birlapur, Chakan, Gurgaon and Birla Vinoleum at Birlapur have availed separation.

DIRECTORS

i) Shri Harsh V. Lodha retires from the Board by rotation and being eligible, offers himself for re-appointment.

ii) In view of provisions of the Companies Act, 2013, read with the provisions of the Listing Agreement, Shri Vikram Swamp, Shri Anand Bordia, Shri B.B. Tandon, Shri D.N. Ghosh and Dr. Deepak Nayyar have been appointed as Independent Directors of the Company for a term upto 31st March, 2019.

iii) Shri B.R. Nahar has been re-appointed as Managing Director of the Company for a period of 5 years with effect from 3rd August, 2014, liable to retire by rotation.

iv) The terms of appointment of Shri Pracheta Majumdar has been changed so as to make him liable to retire by rotation w.e.f. 1st April, 2014.

The above are subject to the approval of the shareholders in the ensuing Annual General Meeting of the Company.

AUDITORS & AUDITORS'' REPORT

The members are requested to appoint the auditors and to fix their remuneration.

The notes on accounts referred to in the Auditors'' Report are self-explanatory and therefore, do not call for any further comments.

COST AUDITORS AND COST AUDIT REPORT

Pursuant to Section 233B(2) of the Companies Act, 1956, in terms of the Central Government''s approval, the Board of Directors on the recommendation of the Audit Committee appointed Shri Somnath Mukherjee, Cost Accountant, as the Cost Auditor of the Company for the year under review relating to Cement and Jute Goods manufactured by the Company. Shri Somnath Mukherjee has confirmed that his appointment is within the limits of the Section 224(1B) of the Companies Act, 1956 and has certified that he is free from any disqualifications specified under Section 233B(5) read with Section 224 sub section (3) or sub section (4) of Section 226 of the Companies Act, 1956.

The Audit Committee has also received a Certificate from the Cost Auditor certifying his independence and arm''s length relationship with the Company. Pursuant to The Companies (Cost Audit Report) Rules, 2011 the Cost Audit Reports and the Compliance Report for the financial year 2012- 2013 were filed by the Cost Auditor for Cement and Jute Goods on 23rd September, 2013, with the Ministry of Corporate Affairs.

APPRECIATION

We wish to place on record our appreciation for the continued assistance and co-operation extended to the Company by the Government of India, State Governments, Financial Institutions and Banks, Dealers and Customers, Shareholders and to all others who are continuing their assistance to the Company.

HARSH VLODHA Chairman

RMAJUMDAR Wholetime Director

designated as Chief VIKRAMSWARUP Management Advisor

ANANDBORDIA

B.B.TANDON Directors

D. N. GHOSH

D.NAYYAR

B.RNAHAR Managing Director

Kolkata,

Dated, the 8th day of May, 2014


Mar 31, 2013

To the Shareholders

The Directors have pleasure in presenting their annual report on the business and operations of your Company together with the audited accounts of the Company for the year ended 31st March, 2013.

(Rs. in Crores)

31st March, 2013 31st March, 2012

FINANCIAL RESULTS

Revenue from Operations (Gross) 2994.34 2596.82

Total Revenue 2730.08 2413.06

Profit before Finance Costs, Tax, Depreciation and Amortization 519.95 478.56

Finance Costs 64.86 52.51

Profit before Tax, Depreciation and Amortization 455.09 426.05

Depreciation and Amortization Expense 104.39 80.00

Tax Expense 80.88 185.27 106.84 186.84

Profit for the year 269.82 239.21

Surplus as per last Financial Statements 109.51 190.50

379.33 429.71

Appropriations :

Debenture Redemption Reserve 16.50 16.50

Interim Dividend 19.25 19.25

Corporate Div. Tax on Interim Dividend 3.12 3.12

Proposed Final Dividend 34.66 26.95

Corporate Div. Tax on proposed Final Div. 5.89 4.37

General Reserve 150.00 229.42 250.00 320.19

Net Surplus 149.91 109.52

DIVIDEND

The Company has paid an interim dividend of Rs. 2.50 per share (25%) on ordinary shares during the year. Your Directors are pleased to propose an increase in the final dividend of Rs. 4.50 per share (45%) on ordinary shares for the year ended 31st March, 2013. Thus the aggregate dividend for the year ended 31st March, 2013 works out to Rs. 7.00 per share (70%) aggregating to Rs. 62.92 crores including Corporate Dividend Tax of Rs. 9.01 crores as compared to Rs. 53.69 crores (including Corporate Dividend Tax of Rs. 7.49 crores) in the previous year.

HIGHLIGHTS OF PERFORMANCE/EVENTS

- Achieved its highest ever cement production and despatches at 6.44 million tonnes and 6.47 million tonnes respectively.

- Achieved its highest ever revenue from operations of Rs. 2994 crores.

- Highest ever rate of Dividend of 70% declared by the Company including Interim Dividend of 25% involving aggregate Dividend Payout of Rs. 62.92 crores (including Corporate Dividend Tax).

- The Grinding Capacity Expansion Project of 0.7 Million Tonnes at Durgapur has been commissioned, during the year, taking the annual capacity of cement division of the Company to 9.3 million tonnes.

- Environmental Clearance received for expansion of cement capacity by 1.5 million tonnes along with 50 MW Captive Power Plant at Chanderia.

- The production of blended Cement vis-a-vis total Cement production was highest ever at 92.69% (5.97 million tons).

- The Company has successfully implemented the ERP system in all its cement units.

- A premium Portland Slag Cement brand, Birla Samrat Unique, introduced last year, with improved quality and fineness, has been well received in the market. After the introduction of Brand in West Bengal, it is being launched in other parts of the Eastern Region.

EXPANSION AND MODERNISATION

During the year under review, the Company maintained its focus on building organizational capabilities. It took several initiatives to enhance costs competitiveness and improve productivity with a view to combat competition in the market place. As part of strategic growth initiative and to maintain the growth momentum, the Company has embarked upon several projects to maintain its market position in the industry.

At Chanderia, the first phase of the brownfield expansion of the production capacity by 1.2 million tons was commissioned in March, 2012. However, this new capacity could not be gainfully utilised because of the shortage of limestone at Chanderia. The Company has received the environmental clearance to expand capacity by another 1.5 million tons along with the setting up of a 50 MW captive power plant. Once the Hon''ble Supreme Court permits mining operations steps will be taken to expand the capacity.

During the year, the grinding capacity at the Company''s plants at Durgapur has been increased by 0.7 million tons per annum, taking its annual capacity to 2.3 million tons with the addition of a new roller press. With this, the annual capacity of the Cement Division has gone up to 9.3 million tons which will get enhanced to 10.8 million tons on completion of the second phase of expansion at Chanderia from 1.2 MTPA to2.7 MTPA.

Installation of Coal Washery at Satna, for enhancing the supply of sustained quality of processed coal was completed in December, 2012 and installation of New Coal Mill VRM at Satna Cement Works, Satna was also completed during the year. The Company is planning to install 35 MW Thermal Power Plant at Satna for which necessary steps are being taken for obtaining approval for pollution and other clearances from the concerned authorities. With a view to increasing cement grinding capacity, improving cement quality and reducing power consumption, the Company has installed Roller Presses at Satna, Chanderia and Durgapur, all of which have got commissioned during the year.

The installation of a 1.5 MW Solar Power project at Satna is under progress, which will enable the Company to fulfill the Renewable Power Obligation (RPO).

The Company was allotted the Bikram Coal Block in Shahdol district, Madhya Pradesh, for captive use. The mining plan has been approved and administrative approval of mining lease has been granted by the Union Ministry of Coal. Forest and environment clearance is at various stages of approval.

The M. P Government had recommended to the Union Ministry of Mines allotment of mining lease of about 2,130 hectares in Satna district to Talavadi Cements Limited (TCL), a subsidiary of Birla Corporation Limited (BCL). The recommendation was challenged by various parties in the Mines Tribunal and in Jabalpur High Court. All the petitions have since been dismissed except one before the Tribunal and one before the High Court. In January, 2013 the State Government has communicated its decision regarding the precise area to be granted under Mining Lease and has also directed the Company to submit Mining Plan within a period of six months duly approved by the Central Government for taking further necessary action for grant of Mining Lease. Draft mining plan has already been submitted and necessary action is being taken for submission of final mining plan with the State Government.

The Company had signed an MoU with the Assam Minerals Development Corporation, a Government of Assam Undertaking, to set up one-million ton greenfield cement plant at Umrangsu, North Cachar, through a Joint Venture (JV) with an investment of Rs. 450 crores. The activities to set up the plant will be initiated after the JV agreement is signed with the AMDC for which necessary follow-up measures are being taken.

The Company has successfully implemented the ERP system in all its cement units. This will introduce best practices and improve the overall efficiency of the Company by augmenting its information technology capabilities, and providing integrated platform across units, Regional Offices, Depots and other locations.

CREDIT RATING

CR1SIL has re-affirmed "A1 " rating to the Company for Rs. 1250 million (Rs. 125 crores) Short Term Debt Programme (including Commercial Paper) and "AA /Stable" rating in respect of Non-Convertible Debentures of Rs. 500 crores issued by the Company. This rating indicates high degree of safety with regard to timely payment of interest and principal on the instrument.

Further, Credit Analysis and Research Limited (CARE) has also re-affirmed "CARE AA " rating for the Company''s Long Term Bank facilities of Rs. 499.35 crores and A1 rating for Short Term Bank facilities of Rs. 775 crores. Further, the rating Committee of CARE has re-affirmed "CARE AA " for the Long Term Borrowing (including Non-Convertible Debentures) Programme of Rs. 500 crores and has re-affirmed A1 rating for the Short Term Debt for Rs. 125 crores.

FINANCE

During the year, the Company has raised long term foreign currency loans of USD 35 mn (equivalent to Rs. 193.75 crores) to part finance the current capital expenditure plan of the Company.

CORPORATE GOVERNANCE

The Company has complied with the Corporate Governance Code as stipulated under the Listing Agreement with the Stock Exchanges. A separate section on Corporate Governance, along with certificate from the auditors confirming the compliance, is annexed and forms part of the Annual Report.

AWARDS & RECOGNITION

The Company''s unit at Satna had received the following awards during the year :

- "Greentech Environment Excellence Award 2012"

- "Greentech - CSR Silver Award-2012"

- "Greentech - HR Gold Award - 2012".

Further, Quality Circle team, "Anusandhan", of our Satna Unit has been selected for participation in International Convention Quality Circle to be organized at Taiwan in September, 2013. Amongst others, the Quality Circle team, "Anusandhan", participated in the National Convention Quality Circle (NCQC) held at Kanpur and Regional Convention Quality Circle held at Varanasi and had won "Par Excellance" and "Gold" Awards, respectively.

Chanderia unit of the Company had received certificate of Excellence by the Employer''s Association of Rajasthan, Jaipur.

At Durgapur, the Quality Control Group, "Nakshatra" & "Saptarshi" were awarded "Distinguished Trophy" at NCQC-2012, held at Kanpur.

OCCUPATIONAL HEALTH & SAFETY

Employees of the Company play an important role in the industrial operation and company''s growth, and are considered as the most valuable assets and their personal and professional development along with their robust health and safety is one of the top priorities of the organization.

To get good results in the accident prevention we have included safety programmes like investigation & analysis of all serious and fatal accidents, recommendations / remedial measures to prevent similar accidents. Near- miss situation / incident with no injury is accorded serious consideration as preventive measures. As a part of safety measures, we are ensuring almost cent percent use of Personal Protective Equipment by developing voluntary safety culture. Various periodical health check up programmes are conducted from time to time so as to monitor health hazards if any.

The Company is complying with all the Statutory Provisions as required under the Factories Act. Competent persons carry out compulsory testing / examination of lifting tools, pressure vessels, cranes, safety belts etc. as per statutory requirement. Safety posters, slogans are widely displayed in the conspicuous places at the factory including work places, canteen and plant gates to continuously remind everyone about safe working practices and environment so as to inculcate a culture of safety amongst the workers. Safety day / week celebration is being organized every year with a view to arouse and motivate safety consciousness amongst the employees.

CORPORATE SOCIAL RESPONSIBILITY

The Company is actively associated with various social and philanthropic activities undertaken on its own as well as by different Trusts and Societies. As a constructive partner in the communities in which it operates, the Company has been taking concrete action to realize its social responsibility objective. The Company has been playing a pro-active role in the socio- economic growth and has contributed to all spheres ranging from health, education, rural infrastructure development, environment conservation etc. In the past nine decades, the Company has supported innumerable social initiatives in India, touching the lives of thousands of people positively by supporting environmental and health-care projects and social, cultural and educational programs.

The Corporate Social Responsibility (CSR) policy of the Company provides a road map for its CSR activities. The purpose of CSR Policy is to devise an appropriate strategy and focus its CSR initiatives and lay down the broad principles on the basis of which the Company will fulfill its CSR objectives. As per the said policy, the Company continues the strategy of discharging part of its CSR responsibilities related to social service through various trusts/societies in addition to its own initiatives and donations made to other non-government organizations.

The CSR activities are being undertaken by the Company on its own or through various associated charitable institutions which currently run several healthcare and educational institutions of repute. These include M.P Birla Hospital and Priyamvada Birla Cancer Research Institute at Satna, Bombay Hospital, Mumbai and Indore, Belle Vue Clinic and Priyamvada Birla Aravind Eye Hospital, Kolkata, and South Point School, M.P. Birla Planetarium and M.P Birla Foundation Higher Secondary School, also in Kolkata, to name a few. Each of these institutions are independent ''not for profit'' organizations with social service being their basic objective. The philosophy of the M.P Birla Group is to set up institutions which will be self sustaining in the long term and it is proposed to continue this philosophy in future also. The aggregate capacity of hospital beds in the Group currently stands at around 1700. Out of these, more than 300 beds are free. In addition to the free beds, several of these health care institutions offer highly subsidized all-inclusive treatment for the needy. The educational institutions provide education to more than 22,000 students.

HEALTH, EDUCATIONAL AND SOCIAL INITIATIVES

The Company provides active assistance, financial as well as managerial, to various hospitals and educational and philanthropic institutions set up by such trusts and societies.

Amongst the recent major initiatives being supported by the Company is the establishment of a Hospital at Chittorgarh near the cement plants of the Company. The Company is financially and otherwise contributing to the establishment of the Hospital by Madhav Prasad Priyamvada Birla Apex Charitable Trust. The foundation of the Hospital had been laid by Syt. Ashok Gehlot, the Chief Minister of Rajasthan, on 31st May, 2011. The approval from the Rajasthan Pollution Control Board has been received and construction of the Hospital has already been commenced from 24th October, 2012 and the estimated time for completion of the same is about 2 years.

This apart, social/charitable/philanthropic activities undertaken include:

i) Health:

Some of the social development undertaken with the support of the Company in the areas of healthcare are free medical treatment for the needy people, "State-of-Art" treatment facility for various critical diseases in remote areas, running voluntary centres and dispensaries providing much-needed medical services to the local population at a highly subsidized rate, providing tele medicine facilities in small towns free eye Camps including eye screening and surgery Camps, free Orthopedics camps, Organizing health awareness camps and programs, AIDS awareness and Pulse Polio Camps, Blood donation Camps, Wellness Clinics and Mobile Medical Vans, National Family welfare and Family Planning programmes etc.

The Company has assisted financially and otherwise in the setting up of M.P Birla Hospital and Priyamvada Birla Cancer Research Institute near the Satna Plants. These facilities provide quality healthcare services to the local population as well as to the population of the area surrounding the Company''s cement plants.

(ii) Education :

The Company has been supporting schools in nearby villages both financially and by providing free education to girls, distribution of books, stationery, sports material, etc. free computer training for villages, free bus facility for going to school, vocational training to management and engineering students and dependents of workers, tailoring training to women, training to Women self help groups on income generating activities such as Agarbatti manufacturing and stitching to make them self-reliant.

(iii) Other Social Initiatives :

The Company undertakes rural development projects including distributing water in villages near its Plants, repairing hand pumps & submersible pumps, construction of toilets, school buildings, infrastructure, etc., making contributions for ''sarve shikhsha abhiyaan'' assistance to schools, organizing sports and other games activities, construction of canal for water supply, providing mid-day meal to the poor, development, maintenance and renovation of temples and funding of mass marriages etc.

CONSERVATION OF ENVIRONMENT

The Company believes in sustainable development by promoting clean and pollution free environment and making the environment eco-friendly. Accordingly, various initiatives have been taken for Clean Development Mechanism (CDM) and pollution prevention. The environmental dimension forms an integral part of the business decisions.

At Satna, various measures have been taken during the year for further improving the environmental performance, such as installation of Bag Dust collector for controlling fugitive dust emission, Kiln and cooler ESP for efficiency improvement. Clinker Silos are being constructed for improvement in clinker storage in order to retain clinker quality and reduction in pollution.

The Chanderia unit has taken various steps for harvesting and conservation of water. Plantation of species has been undertaken in and around the mining areas. To restrict evaporation of water, Ceto Sterile Emulsion Chemical spray was done on water holding pits, thereby resulted in reducing evaporation.

The Waste Heat Recovery System at Satna and Chanderia plants of the Company has been implemented which uses the waste hot gases coming out of the pre-heater and clinker cooler to generate substantial power thereby reducing Green House Gas (GHG) emissions into the atmosphere. Further, to protect the environment, the Company has consumed 1.24 million tons of Fly ash during the year 2012-13 at various cement plants of the Company. This has resulted in reduction of clinker usage, which in turn reduced GHG emissions at our plants, without compromising on the quality and strength of cement.

Further, with a view to reduce the consumption of fossil fuels, the cement division of the Company have taken initiative to burn Municipal Solid Waste as a co-fuel in it kilns. The co-processing of Municipal Solid Waste is one of the best alternatives for its disposal and leads to saving of energy resource, ecological balance and friendly environment.

SUBSIDIARY COMPANIES

The two subsidiary companies namely, Thiruvaiyaru Industries Limited and Birla North East Cement Limited were under the process of voluntary winding up. In view of the aforesaid, these two subsidiaries have not been considered in preparing the consolidated Balance Sheet.

Birla Cement Manufacturing Limited PLC (BCML), a wholly owned subsidiary at Ethiopia, incorporated last year, has got licenses for exploration of limestone and coal to set up a cement plant there and is in the process of conducting geological exploration and topographical survey of the licensed areas. Final decision on setting up the plant will be taken based on the techno-commercial feasibility of the project.

In view of the general exemption from the applicability of Section 212(8) of the Companies Act, 1956 granted by the Ministry of Corporate Affairs vide its General Circular No.2/2011 dated 8th February, 2011, the Audited Statement of Accounts, the Reports of the Board of Directors and Auditors of the Subsidiary Companies are not annexed. Shareholders who wish to have a copy of the full report and accounts of the subsidiaries will be provided the same on receipt of a written request from them. These documents will also be available for inspection by any shareholder at the Registered Office of the Company on any working day during business hours. The consolidated Financial Statements presented by the Company include financial results of its subsidiary companies.

DIRECTORS'' RESPONSIBILITY STATEMENT

As required by Section 217(2AA) of the Companies Act, 1956, your Directors state that -

(a) in the preparation of the annual accounts for the year ended 31st March, 2013, the applicable accounting standards have been followed with proper explanation relating to material departures, if any;

(b) the accounting policies adopted in the preparation of the annual accounts have been applied consistently except as otherwise stated in the Notes to Financial Statements and reasonable and prudent judgments and estimates have been made so as to give a true and fair view of the state of affairs of the Company at the end of the Financial Year 2012-13 and of the profit for the year ended 31st March, 2013;

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

(d) the annual accounts for the year ended 31st March, 2013, have been prepared on a going concern basis.

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

As required under Section 217(1)(e) of the Companies Act, 1956, details relating to Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo are given in the Annexure, which is annexed hereto and forms part of the Directors'' Report.

PARTICULARS OF EMPLOYEES

As required under Section 217(2A) of the Companies Act, 1956, and the Rules made thereunder, particulars of the employees concerned are given in the Annexure, which is attached hereto and forms part of the Directors'' Report.

INTERNAL CONTROL AND SYSTEMS

The Company has adequate internal control procedures commensurate with its size and nature of business. The objective of these procedures are to ensure efficient use and protection of the Company''s resources, accuracy in financial reporting and due compliance of statutes and corporate policies and procedures.

Internal Audit is conducted periodically across all locations and of all functions by firms of Chartered Accountants who verify and report on the efficiency and effectiveness of internal controls. The Internal Audit reports the progress in implementation of recommendations contained in such reports and the adequacy of internal control systems are reviewed by the Audit Committee of the Board in its periodical meetings.

HUMAN RESOURCE DEVELOPMENT/INDUSTRIAL RELATIONS

As always the company has attached maximum importance in development of human resource, the vital asset responsible for continued success of the Company. The Company is continuously renewing and updating the knowledge and skill of its employees at all levels through training and development.

Our relentless effort to improve the performance of our employees by sharpening and honing their knowledge, skill and most importantly attitude continues to receive high priority.

The Company had 9763 employees on its rolls at the close of business hours on 31st March 2013. Industrial relations continued to remain cordial throughout the year at all the units barring Suspension of Operation since 29th March 2004 at Soorah Jute Mills, and Suspension of Work at Birla Jute Mill, Birlapur which commenced on 31st March, 2012 continued till 17th October, 2012. The Mill restarted operation on 18th October, 2012 following a tripartite settlement signed on 16th October, 2012.

DIRECTORS

Shri D.N. Ghosh and Shri Deepak Nayyar retire from the Board by rotation and being eligible, offer themselves for re-appointment.

The Board of Directors at its meeting held on 20th May, 2013 has appointed Shri Pracheta Majumdar, a Non-Executive Director, as Whole-time Director designated as Chief Management Advisor of the Company.

AUDITORS & AUDITORS'' REPORT

The members are requested to appoint the auditors and to fix their remuneration.

The notes on accounts referred to in the Auditors'' Report are self-explanatory and, therefore, do not call for any further comments.

COST AUDITORS AND COST AUDIT REPORT

Pursuant to Section 233B(2) of the Companies Act, 1956, in terms of the Central Government''s approval the Board of Directors on the recommendation of the Audit Committee appointed Shri Somnath Mukherjee, Cost Accountant, as the Cost Auditor of the Company for the year under review relating to Cement and Jute Goods manufactured by the Company. Shri Mukherjee has also been appointed as the Cost Auditor for generation of electricity. Shri Somnath Mukherjee has confirmed that his appointment is within the limits of the Section 224(1B) of the Companies Act, 1956 and has certified that he is free from any disqualifications specified under Section 233B(5) read with Section 224 sub section (3) or sub section (4) of Section 226 of the Companies Act, 1956.

The Audit Committee has also received a Certificate from the Cost Auditor certifying his independence and arm''s length relationship with the Company. Pursuant to The Companies (Cost Audit Report) Rules, 2011 the Cost Audit Reports and the Compliance Report for the financial year 2011-2012 were filed by the Cost Auditor for Cement and Jute Goods on 28th December, 2012 on the Ministry of Corporate Affairs website. The due date for filing the Cost Audit Reports for the financial year 2012-2013 is 30th September, 2013.

CAUTIONARY STATEMENT

Statementsin this Report, particularly those which relate to Management Discussion & Analysis, describing the Company''s objectives, projections, estimates, expectations or predictions may be''forward looking statements'' within the meaning of applicable laws or regulations. Actual results could however differ materially from those expressed or implied. Important factors that could make a difference to the Company''s operations include global and domestic demand-supply conditions, finished goods prices, raw materials andfuels cost & availability, transportation costs, changesin Government regulations and tax structure, economic developments within India and the countries with which the Company has business contacts and other factors such as litigation andindustrial relations.

APPRECIATION

We wish to place on record our appreciation for the continued assistance and co-operation extended to the Company by the Government of India, State Governments, Financial Institutions and Banks, Dealers and Customers, Shareholders and to all others who are continuing their assistance to the Company.

HARSH V. LODHA Chairman

VIKRAM SWARUP

ANAND BORDIA

B. B. TANDON Directors

D. N. GHOSH D.NAYYAR

B. R. NAHAR Managing Director

Kolkata,

Dated, the 20th day of May, 2013


Mar 31, 2012

The Directors have pleasure in presenting their annual report on the business and operations of your Company together with the audited accounts of the Company for the year ended 31st March, 2012.

(Rs in Crores)

31st March, 2012 31stMarch,2011

FINANCIAL RESULTS

Revenue from Operations (Gross) 2596.82 2436.81

Total Revenue 2413.06 2260.91

Profit before Finance Costs, Tax, Depreciation and Amortization 478.56 555.02

Finance Costs 52.51 52.63

Profit before Tax, Depreciation and Amortization 426.05 502.39

Depreciation and Amortization Expense 80.00 64.84

Tax Expense 106.84 186.84 117.68 182.52

Profit for the year 239.21 319.87

Surplus as per last Financial Statements 190.50 190.90

429.71 510.77

Appropriation:

Debenture Redemption Reserve 16.50 16.50

Interim Dividend 19.25 19.25

Corporate Dividend Tax on interim Dividend 3.12 3.20

Proposed Final Dividend 26.95 26.95

Corporate Dividend Tax on proposed Final Dividend 4.37 4.37

General Reserve 250.00 320.19 250.00 320.27

Net Surplus 109.52 190.50

DIVIDEND

The Company has paid an interim dividend of Rs 2.50 per share (25%) on ordinary shares during the year. Your Directors are pleased to recommend a final dividend of Rs 3.50 per share (35%) on ordinary shares for the year ended 31st March, 2012. Thus the aggregate dividend for the year ended 31st March, 2012 works out to Rs 6.00 per share (60%) aggregating to Rs 53.69 crores including Corporate Dividend Tax of Rs 7.49 crores as compared to Rs 53.77 crores (including Corporate Dividend Tax of Rs 7.57 crores) in the previous year.

HIGHLIGHTS OF PERFORMANCE/EVENTS

- The production of clinker from the 1.2 million tons brownfield cement capacity expansion at Chanderia commenced during the year.

- The Company has introduced a premium Portland Slag Cement brand, Birla Samrat Unique.

- The production of blended Cement vis-a-vis total Cement production was highest ever at 89.08% (5.26 million tons).

- The Company is actively and financially supporting the establishment of the M.P Birla Hospital & Research Centre at Chittorgarh, the foundation stone of which was laid by Syt. Ashok Gehlot, Chief Minister of Rajasthan, on 31st May, 2011.

- Implementation of the ERP system in all the cement units of the Company is progressing well and the same is likely to be implemented in the second quarter of the financial year 2012-13.

1.3 OTHER DIVISIONS :

The Vindhyachal Steel Foundry produces Iron and Steel Castings primarily for internal consumption. The total production of casting during the year was 1393 tons as against 1367 tons in the previous year.

The performance of Auto Trim Division has been adversely affected on account of lack of orders from the original equipment manufacturers. The division produced 8952 pcs. of door trims as compared to 21511 pcs. of door trims in the previous year.

Birla Vinoleum Unit of the Company continues to be under Lay-off on account of lack of demand of the product.

EXPANSION AND MODERNISATION

During the year under review, the Company has taken up several projects and capacity enhancement programmes to maintain its market position in the industry besides focusing on various other efficiency improvements and pro-environment efforts.

CEMENT DIVISION

At Chanderia, the first phase of the expansion to enhance the production capacity by 1.2 Million Tons Per Annum (MTPA) brownfield Project has been commissioned. The new kiln was lit up on 14th March, 2012 and the first tranche of clinker was manufactured on 17th March, 2012. During the second phase the production capacity will be enhanced to2.7 MTPA. The Cement Mill modification programme at Satna and Chanderia is also progressing satisfactorily and is expected to be completed in the first quarter of financial year 2012-13. Work for expansion of grinding unit capacity at Raebareli by 0.12 MTPA is going on satisfactorily and the same is expected to be commissioned by November, 2012. To take advantage of substantial Portland Pozzolana Cement (PPC) market in northern India,

0.5 MTPA capacity Split Grinding unit at Kota is being installed, for manufacturing of PPC based on Fly ash, for which steps have been undertaken to obtain the environmental clearance. At Durgapur, the 0.7 million tons grinding capacity addition is progressing satisfactorily and the project is likely to be commissioned by June, 2012. The work relating to setting up of a packing plant with cement silo at Durgapur is also progressing well and is likely to be completed by December, 2012. After completion of all the expansion programmes, the effective annual capacity of cement will be 9.3 million tons which will get enhanced to 10.8 million tons on completion of the second phase of expansion at Chanderia from 1.2 to 2.7 MTPA.

At Satna, installation of Coal Washery is in an advanced stage and is likely to be completed by the end of October, 2012. The Washery once installed would help in maintaining the quality of coal required for cement production on a sustained basis.

The Company is planning to install 35 MW Thermal Power Plant at Satna and 50 MW Thermal Power Plant at Chanderia for which necessary steps are being taken for obtaining approval for pollution and other clearances from the concerned authorities.

From a longer term perspective, it is imperative that the Company develops alternative fuel sources. In pursuance of the above objective, the Company has implemented Waste Heat Recovery System (WHRS) at Satna and Chanderia wherein the waste hot gases coming out of the pre-heater and clinker cooler are used to generate substantial power.

In view of the ever-increasing cost of the traditional energy sources, plans are afoot to develop other renewable energy sources for power including solar energy. The Company is also exploring the possibility of producing power through industrial and agricultural waste materials. This would also enable the Company to fulfill the Renewable Power Obligation (RPO), recently introduced by many states across the country. With a view to fulfill the Renewable Power Obligation (RPO), it is proposed to install a 2.5 MW Solar Power project at Satna and a 1.5 MW Biomass Gasifier project each at Satna, Chanderia and Durgapur.

The Company was allotted the Bikram Coal Block in Madhya Pradesh and administrative approval for mining lease has been granted by the Union Ministry of Coal. The forest and environmental clearances are being followed up.

The M. P Government had recommended to the Union Ministry of Mines allotment of mining lease of about 2,130 hectares in Satna district to Talavadi Cements Limited, a subsidiary of Birla Corporation Limited. The recommendation was challenged by various parties in the Mines Tribunal and in Jabalpur High Court. All the petitions have since been dismissed except one before the Tribunal and one before the High Court. The Hon'ble High Court, in an interim order passed recently, has held that appropriate Government can execute the mining lease in favour of the Company, subject to the final order. The Union Ministry of Mines has conveyed relaxation of Section 6(1)(b) of the MMDR Act for the grant of the mining lease (as required in case of holding of mining lease in excess of 1000 hectares).

The Company had signed an MoU with the Assam Minerals Development Corporation, a Government of Assam Undertaking, to set up one-million ton greenfield cement plant at Umrangsu, North Cachar, through a Joint Venture (JV) involving an investment of Rs 450 crores. The activities to set up the plant will be initiated after the JV agreement is signed with the AMDC.

Implementation of the ERP system in all the cement units of the Company is progressing well and the same is likely to be implemented in the second quarter of the financial year 2012-13. The ERP system will introduce best practices and improve the overall efficiency of the Company by augmenting its information technology capabilities.

JUTE DIVISION

Investments have been planned in the Division to acquire latest machineries for improving productivity and efficiency in the operations.

CREDI TRATING

Credit Analysis and Research Limited (CARE) has re-affirmed "CARE AA " rating for the Company's Long Term Bank facilities of Rs 909 crores and PR 1 rating for Short Term Bank facilities of Rs 650 crores. Further, the rating Committee of CARE has re-affirmed "CARE AA " for the Long Term Borrowing (including Non-Convertible Debentures) Programme of Rs 500 crores and has re-affirmed PR 1 rating for the Short Term Debt for Rs 125 crores.

Further, CR1SIL has also re-affirmed "P1 " rating to the Company for Rs 1250 million (Rs 125 crores) Short Term Debt Programme (including Commercial Paper) and "AA /Stable" rating in respect of Non-Convertible Debentures of Rs 500 crores issued by the Company. This rating indicates high degree of safety with regard to timely payment of interest and principal on the instrument.

FINANCE

During the year, the Company has raised long term foreign currency loans of USD 28.24 mn (equivalent to Rs 139.63 crores) and rupee term loan of Rs 8.55 crores aggregating Rs 148.18 crores to part finance the ongoing capital expenditure plan of the Company.

CONTRIBUTION TO NATIONAL EXCHEQUER

During the year under review, a sum of Rs 826.15 crores (Rs 761.55 crores in 2010-11) was paid to the various government authorities on account of taxes, duties and other levies.

CORPORATE GOVERNANCE

The Company has complied with the Corporate Governance Code as stipulated under the Listing Agreement with the Stock Exchanges. A separate section on Corporate Governance, along with certificate from the auditors confirming the compliance, is annexed and forms part of the Annual Report.

AWARDS & RECOGNITION

Quality Circle team, namely "Pratigya", from our Satna Unit participated in International Convention Quality Circle held at Yakohama, Japan and won the "Distinguished" Award. Two other Quality Circle teams, namely "Kiran" and "Lakshya", participated in the Regional Convention, Quality Circle, held at Kanpur and both the teams won "Gold" Awards.

The Company's unit at Chanderia received recognitions for 'Best Improvement in Thermal Energy Performance' from NCB for Chanderia Cement Works and the 'Second Best Environmental Excellence in Plant Operation' from NCB for Birla Cement Works for the year 2009-10. The Unit has also received 'Rajasthan Energy Conservation Award' for the year 2011 for being the Second Best in Cement Industries from Rajasthan Renewable Energy Conservation Ltd, Govt. of Rajasthan and 'Best Employer - 2010' award for Large Scale Industry by Employers' Association of Rajasthan, Jaipur.

At Durgapur, the Quality Control Group, "Pragati" had participated in NCQC - 2011, held at Hyderabad, from 9th - 11th December 2011 and had been awarded with "Meritorious Trophy".

CORPORATE SOCIAL RESPONSIBILITY

The Company as a part of the M.P Birla Group is actively associated with various social and philanthropic activities undertaken by the Group. The Company has been playing a pro-active role in the socio-economic growth and has contributed to all spheres ranging from health, education, rural infrastructure development, environment conservation etc.

The CSR policy of the Company provides a road map for its CSR activities. The purpose of CSR Policy is to devise an appropriate strategy and focus its CSR initiatives and lay down the broad principles on the basis of which the Company will fulfill its CSR objectives. The CSR activities are being undertaken by the Company on its own or through various charitable institutions, including those managed by the M.P Birla Group, which currently runs various healthcare and educational institutions of repute. These include M.P Birla Hospital and Priyamvada Birla Cancer Research Institute at Satna, Bombay Hospital, Mumbai and Indore, Belle Vue Clinic and Priyamvada Birla Aravind Eye Hospital, Kolkata, and South Point School, M. P Birla Planetarium and M.P Birla Foundation Higher Secondary School, also in Kolkata, to name a few. Each of these institutions are 'not for profit' organizations with social service being their basic objective. The aggregate capacity of hospital beds in the Group currently stands at around 1700. Out of these, more than 300 beds are free. In addition to the free beds, several of our health care institutions offer highly subsidized all- inclusive treatment for the needy. Our educational institutions provide education to more than 22,000 students.

HEALTH, EDUCATIONAL AND SOCIAL INITIATIVES

The Company provides active assistance, financial as well as managerial, to various hospitals and educational and philanthropic institutions set up by the Group.

One of the recent major initiatives taken by the Company is establishment of a hospital at Chittorgarh. The Company is actively contributing to the establishment of the hospital. The foundation stone of the hospital was laid by the Hon'ble Chief Minister of Rajasthan, Syt. Ashok Gehlot on 31st May, 2011. It is proposed to set up a multi-speciality 200 bed hospital, at an estimated cost of around Rs 40 crores. The architectural and structural design for the proposed hospital has been completed and the plan submitted to Nagarpalika, Chittorgarh has been duly approved. The work for boundary wall has already started and the construction of hospital shall start very soon and will be completed in about two years' time.

Other large initiatives being planned include a 600 bed hospital at Jaipur, Education and Medical hub at Kolkata, management institute at Mysore, a vocational training institute apart from expansions and upgradation of the existing institutions.

This apart, social/charitable/philanthropic activities undertaken include :

- Running voluntary centres and dispensaries providing much-needed medical services to the local population at a highly subsidized rate, free education to girl students coming from economically weaker sections of society, providing Tele medicine facilities in small towns, maintaining Ayurvedic dispensary at mines Colony, run by Cess & Welfare Dept., Govt. of India, organizing medical camps (Orthopaedic, Ophthalmo- logical, Gynaecological, Dental & Pediatric), Polio and blood donation camps, maintaining Mobile dispensaries and ambulances to support villagers residing in areas close to the plants and running reading rooms.

- Supporting schools in nearby villages both financially and by distribution of books etc. free computer training for villages, free tailoring training for women, vocational training to management and engineering students and dependents of workers, training to Women Self Help Groups on Income Generating activities such as Agarbatti manufacturing and stitching to make them self-reliant.

- Distributing water in villages, making contributions for canal construction for water supply, providing mid-day meal to the poor, development, maintenance and renovation of temples and funding of mass marriages.

CONSERVATION OF ENVIRONMENT

The Company has undertaken consistent efforts in promoting clean and pollution free environment and making the environment eco-friendly throughout the year. Accordingly, various initiatives have been taken for Clean Development Mechanism (CDM) and pollution prevention. The environmental dimension forms an integral part of the business decisions.

At Satna, for further improving the environmental performance, various measures have been taken during the year such as installation of Bag Dust collector for controlling fugitive dust emission, Kiln and cooler ESP for efficiency improvement. As a part of other environment control measures good housekeeping practices were followed, constructed additional raw material and finished product facilities, regular maintenance of existing controlling devices like ESP's and Bag filters were done. Clinker Silos are being constructed for improvement in clinker storage in order to retain clinker quality and reduction in pollution.

At Chanderia, dust pollution around the mining area and roads have been controlled significantly with the usage of water tankers, pumps and rain guns for pressurized spray. Measures have been taken for conservation of Limestone reserves. Laboratory Test for beneficiation of Crusher Rejects, for optimizing the extraction of limestone has been completed and procurement of 1 No. Vibratory Screen is in process which is likely to be completed and installed during the financial year 2012-13. The Unit has also taken various actions for harvesting and conservation of water.

The Waste Heat Recovery System at Satna and Chanderia plants of the Company has been implemented which uses the waste hot gases coming out of the pre-heater and clinker cooler to generate substantial power thereby reducing Green House Gases (GHG) emissions into the atmosphere. Further, to protect the environment, the Company has consumed 1.18 million tons of Fly ash during the year 2011-12 at various cement plants of the Company. This has resulted in reduction of clinker usage, which in turn reduced GHG emissions at our plants, without compromising on the quality and strength of cement.

Extensive plantations and gardening have been undertaken at Satna, Raebareli and Chanderia Units both in and around mining, plant and residential area. Water harvesting schemes in the residential colonies and office areas have also been implemented.

SUBSIDIARY COMPANIES

During the year, the Company has formed a wholly owned subsidiary at Ethiopia namely Birla Corporation Cement Manufacturing PLC (BCCMPLC) for the purpose of exploration/exploitation of limestone and other minerals and setting up Cement and captive power plant. Exploration license for limestone has been allotted to BCCMPLC while the application for exploration of coal is currently under processing and expected to be received shortly.

The three subsidiary companies namely, New-Age Cement Limited, Thiruvaiyaru Industries Limited and Birla North East Cement Limited were under the process of voluntary winding up, out of which New-Age Cement Limited stands dissolved during the year pursuant to the order of the Hon'ble High Court at Calcutta. In view of the aforesaid, these three subsidiaries have not been considered in preparing the consolidated balance sheet.

The statement pursuant to Section 212 of the Companies Act, 1956 containing details of subsidiaries of the Company, relating to seven subsidiaries, forms part of the Annual Report.

In view of the general exemption from the applicability of Section 212(8) of the Companies Act, 1956 granted by the Ministry of Corporate Affairs vide its General Circular No.2/2011 dated 8th February, 2011, the Audited Statement of Accounts, the Reports of the Board of Directors and Auditors of the Subsidiary Companies are not annexed. Shareholders who wish to have a copy of the full report and accounts of the subsidiaries will be provided the same on receipt of a written request from them. These documents will also be available for inspection by any shareholder at the Registered Office of the Company on any working day during business hours. The consolidated Financial Statements presented by the Company include financial results of its subsidiary companies.

DIRECTORS' RESPONSIBILITY STATEMENT

As required by Section 217(2AA) of the Companies Act, 1956, your Directors state that -

(a) in the preparation of the annual accounts for the year ended 31st March, 2012, the applicable accounting standards have been followed with proper explanation relating to material departures, if any;

(b) the accounting policies adopted in the preparation of the annual accounts have been applied consistently except as otherwise stated in the Notes to Financial Statements and reasonable and prudent judgments and estimates have been made so as to give a true and fair view of the state of affairs of the Company at the end of the Financial Year 2011-12 and of the profit for the year ended 31st March, 2012;

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

(d) the annual accounts for the year ended 31st March, 2012, have been prepared on a going concern basis.

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

As required under Section 217(1)(e) of the Companies Act, 1956, details relating to Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo are given in the Annexure, which is annexed hereto and forms part of the Directors' Report.

PARTICULARS OF EMPLOYEES

As required under Section 217(2A) of the Companies Act, 1956, and the Rules made thereunder, particulars of the employees concerned are given in the Annexure, which is attached hereto and forms part of the Directors' Report.

INTERNAL CONTROL AND SYSTEMS

The Company has adequate internal control procedures commensurate with its size and nature of business. The objective of these procedures are to ensure efficient use and protection of the Company's resources, accuracy in financial reporting and due compliance of statutes and corporate policies and procedures.

Internal Audit is conducted periodically across all locations and of all functions by firms of Chartered Accountants who verify and report on the functioning and effectiveness of internal controls. The Internal Audit reports the progress in implementation of recommendations contained in such reports and the adequacy of internal control systems are reviewed by the Audit Committee of the Board in its periodical meetings.

HUMAN RESOURCE DEVELOPMENT/INDUSTRIAL RELATIONS

The Company has always attached maximum importance for development of human resource, the vital asset responsible for continued success of the Company. The Company is continuously renewing and updating the knowledge and skill of its employees at all levels through training and development.

Our relentless effort to improve the performance of our employees by sharpening and honing their knowledge, skill and most importantly attitude continues to receive high priority.

The Company had 10138 employees on its rolls as at the close of business hours on 31st March, 2012. Industrial relations have been cordial throughout the year at all the Units barring suspension of operations since 29th March, 2004 at Soorah Jute Mills and suspension of work at Birla Jute Mills, Birlapur declared w.e.f. 31st March, 2012.

DIRECTORS

Shri Vikram Swarup, Shri B.B. Tandon and Shri Harsh V. Lodha retire from the Board by rotation and being eligible, offer themselves for re- appointment.

AUDITORS & AUDITORS' REPORT

The members are requested to appoint the auditors and to fix their remuneration.

The notes on accounts referred to in the Auditors' Report are self-explanatory and, therefore, do not call for any further comments.

COST AUDITORS AND COST AUDIT REPORT

Pursuant to Section 233B(2) of the Companies Act, 1956, in terms of the Central Government's approval the Board of Directors on the recommendation of the Audit Committee appointed Shri Somnath Mukherjee, Cost Accountant, as the Cost Auditor of the Company for the year under review relating to Cement and Jute Goods manufactured by the Company. Shri Mukherjee has also been appointed as the Cost Auditor for generation of electricity. Shri Somnath Mukherjee has confirmed that his appointment is within the limits of the Section 224(1B) of the Companies Act, 1956 and has certified that he is free from any disqualifications specified under Section 233B(5) read with Section 224 sub section (3) or sub section (4) of Section 226 of the Companies Act, 1956.

The Audit Committee has also received a Certificate from the Cost Auditor certifying his independence and arm's length relationship with the Company. Pursuant to Cost Audit (Report) Rules, 2001 the due date for filing the Cost Audit Reports for the financial year 2010-2011 was 30th September, 2011 and the same were filed by the Cost Auditor for Cement and Jute Goods on 20th September, 2011. The due date for filing the Cost Audit Reports for the financial year 2011-2012 is 30th September, 2012.

CAUTIONARY STATEMENT

Statements in this Report, particularly those which relate to Management Discussion & Analysis, describing the Company's objectives, projections, estimates, expectations or predictions may be 'forward looking statements' within the meaning of applicable laws or regulations. Actual results could however differ materially from those expressed or implied. Important factors that could make a difference to the Company's operations include global and domestic demand-supply conditions, finished goods prices, raw materials and fuels cost& availability, transportation costs, changes in Government regulations and tax structure, economic developments within India and the countries with which the Company has business contacts and other factors such as litigation and industrial relations.

APPRECIATION

We wish to place on record our appreciation for the continued assistance and co-operation extended to the Company by the Government of India, State Governments, Financial Institutions and Banks, Dealers and Customers, Shareholders and to all others who are continuing their assistance to the Company.



HARSH V. LODHA Chairman

PRACHETA MAJUMDAR

VIKRAM SWARUP

ANAND BORDIA Directors

B. B. TANDON

D. N. GHOSH

M. K. SHARMA

B. R. NAHAR Executive Director &

Chief Executive Officer

Kolkata,

Dated, the 2nd day of May, 2012


Mar 31, 2011

The Directors have pleasure in presenting their annual report on the business and operations of your Company together with the audited accounts of the Company for the year ended 31st March, 2011.

(Rs. in Crores)

31st March, 2011 31st March, 2010

FINANCIAL RESULTS

Gross Turnover 2415.38 2387.07

Income for the year 2264.20 2295.24

Gross Profit before interest 555.12 843.42

Interest Charge 52.63 26.97

Profit before Depreciation & Tax 502.49 816.45

Provision for

i) Depreciation 64.84 55.64

ii) Taxation 117.78 182.62 203.63 259.27

Profit after Tax 319.87 557.18

Additions :

Balance Brought Forward from last year 190.90 100.92

Surplus available for Appropriation 510.77 658.10

Appropriation:

i) Debenture Redemption Reserve 16.50 13.25

ii) Interim Dividend 19.25 19.25

iii) Corporate Dividend Tax on Interim Dividend 3.20 3.27

iv) Proposed Final Dividend 26.95 26.95

v) Corporate Dividend Tax on proposed Final Dividend 4.37 4.48

vi) General Reserve 250.00 320.27 400.00 467.20

Balance transferred to Balance Sheet 190.50 190.90

DIVIDEND

The Company has paid an interim dividend of Rs. 2.50 per share (i.e. 25%) on ordinary shares during the year. Your Directors are pleased to recommend a final dividend of Rs. 3.50 per share (i.e.35%) on ordinary shares for the year ended 31st March, 2011. Thus the aggregate dividend for the year ended 31st March, 2011 works out to Rs. 6.00 per share (60%) aggregating to Rs. 53.77 crores including Corporate Dividend Tax of Rs. 7.57 crores as compared to Rs. 53.95 crores (including Corporate Dividend Tax of Rs. 7.75 crores) in the previous year.

HIGHLIGHTS OF PERFORMANCE/EVENTS

During the year, the Company achieved its highest cement production of

5.93 million tonnes including blended cement at 5.12 million tonnes. The Waste Heat Recovery System (WHRS) projects of 15 MW (two systems of 7.5 MW each) at Satna and 7.5 MW at Chanderia were commissioned during the year. Jute Division registered its highest turnover and export of Rs. 205.52 crores and Rs. 70.43 crores respectively. The debotrlenecking project undertaken at the clinker manufacturing units at Satna has been completed during the year. A Memorandum of Understanding with Assam Mineral Development Corporation (AMDC), a Government of Assam undertaking, has been signed to set up one-million ton greenfield cement plant at Umrangsu in the North Cachar Hills district, Assam through a Joint Venture Company.

CONTRIBUTION TO NATIONAL EXCHEQUER

During the year under review, a sum of Rs. 761.55 crores (Rs. 785.54 crores in 2009-10) was paid to the various government authorities on account of taxes, duties and other levies.

CORPORATE GOVERNANCE

The Company has complied with the Corporate Governance Code as stipulated under the Listing Agreement with the Stock Exchanges. A separate section on Corporate Governance, along with certificate from the auditors confirming the compliance, is annexed and forms part of the Annual Report.

AWARDS & RECOGNITION

Shri B.R. Nahar, Executive Director & Chief Executive Officer of the Company, has been identified by the prestigious "Businessworld" magazine as Indias "Most Valuable CEO" amongst the countrys mid-sized cement companies. The Research Team of the magazine has decided the ranking based on factors such as sales, profit and stock price performances as well as the market capitalization of the Company.

Two teams from our Satna Unit namely "Pratigya" and "Ash" participated in the Regional Convention - Quality Circle held at Kanpur and both the teams won "Gold" Awards. After wining the Gold Award in the Regional Convention, team "Pratigya" participated in the National Convention of the Quality Circle Forum held at Vishakapatnam in which total 874 teams had participated and won the "Par Excellence" Award. This team has been recommended for participation in International Convention.

CORPORATE SOCIAL RESPONSIBILITY

The Company as a part of the M.R Birla Group is actively associated with various social and philanthropic activities undertaken by the Group. The Company has been playing a pro-active role in the socio-economic growth and has contributed to all spheres ranging from health, education, rural infrastructure development, environment conservation etc.

In keeping with the M.R Birla Groups vision to serve the society, the Board of Directors of the Company has decided to allocate a minimum of 10% of the distributed profit towards Corporate Social Responsibility (CSR) activities. The CSR activities will be undertaken by the Company on its own or through various charitable institutions, including those managed by the M.R Birla Group, which currently runs various healthcare and educational institutions of repute. These include M. P. Birla Hospital and Priyamvada Birla Cancer Research Institute at Satna, Bombay Hospital, Mumbai and Indore, Belle Vue Clinic and Priyamvada Birla Aravind Eye Hospital, Kolkata, and South Point School, M. R Birla Planetarium and

M. R Birla Foundation Higher Secondary School, also in Kolkata, to name a few.

With a view to provide a road map for its CSR initiatives, the Company has formulated the CSR Policy. The purpose of CSR Policy is to devise an appropriate strategy and focus its CSR initiatives and lay down the broad principles on the basis of which the Company will fulfill its CSR objectives.

Amongst the new projects being undertaken by M. R Birla Group in this regard are Mumbai Hospital at Jaipur and M.R Birla Hospital at Chittorgarh. The Company is actively associated financially and otherwise in the implementation of the philanthropic projects.

That apart, some of the other initiatives of the Company undertaken in the field of conservation of environment, health-care, education and social welfare are as follows:

A) Conservation of Environment

Consistent efforts in promoting clean environment and making the environment eco-friendly have continued throughout the year. Accordingly, various initiatives have been taken for Clean Development Mechanism (CDM) and pollution prevention. The environmental dimension forms an integral part of the business decisions.

At Satna, for further improving the environmental performance, various steps have been taken during the year such as installation of Bag House with Kiln, upgradation of cooler ESP for efficiency improvement by providing one more field, installation of new Bag House in Ball Coal Mill and Vertical Coal Mill for emission control. All the emitting electrodes in the Kiln ESP were replaced to arrest its snapping and to ensure 100% field availability.

At Chanderia, water tankers, pumps and rain guns have been provided for pressurized spray in order to control dust pollution around mining area and roads. Measures have been taken for conservation of Limestone reserves. It is proposed to install beneficiation plant in the Financial Year 2011-12 for optimizing the extraction of limestone. It is taking various measures for harvesting and conservation of water.

On implementation of the Waste Heat Recovery System at Satna and Chanderia plants the Company uses the waste hot gases coming out of the pre-heater and clinker cooler to generate substantial power thereby reducing Green House Gases (GHG) emissions into the atmosphere. Further, to protect the environment, the Company has consumed 1.15 million tonnes of Fly ash during the year 2010-11 at various cement plants of the Company. This has resulted in reduction of clinker usage, which in turn reduced GHG emissions at our plants, without compromising on the quality and strength of cement

Extensive plantations and gardening have been undertaken at Satna. Raebareli and Chanderia Units both in and around mining, plant and residential area.

B) Health Initiatives

Medical camps were organized for free medical treatment and free eye check-up for the benefit of villagers of surrounding areas in Satna unit. The medical officer and para-medical staffs also visited various villages every week for free medical check up, treatment and providing medicines. The Company sponsored/supported various programmes in the field of Pulse Polio vaccination and other related programmes organised by local authorities and other agencies. At Chanderia, Family Planning Camp at Rawatbhata and medical camps were organized at nearby places. At Durgapur, 10 nos. eye screening camps were organised through MP. Birla Eye Clinic and 1530 eye surgeries were undertaken during the year free of charge.

C) Education Initiatives

Our Plant at Satna supported a number of schools in the nearby areas by undertaking various initiatives such as carrying out the required construction work in the schools, providing bus facility for attending the school in city area to the children living in the surrounding villages of Satna, providing free stationery and sports materials, and organizing sports and other social activities in the villages surrounding our mining areas and nearby schools. Vocational Training was provided to a number of students pursuing Management and Engineering courses at our plants as well as at Corporate Office.

D) Social Welfare

Drinking water is being provided by the Satna Unit in nearby villages. The Unit also contributed to development and maintenance of infrastructure for water supply in the nearby villages. The Unit organised sports and various other social activities and functions. Contributions were made towards development of historical & religious place. At Chanderia Unit, regular maintenance and development of various gardens at Chittor was undertaken. The Unit made contributions to various social programmes such as Governments Total Sanitation Campaign for Nirmal Gram Scheme for 238 families and Neera Smriti Sansthans Meera Mahotsav. Supply of water as a draught relief measures in five Panchayat Samities covering 32 villages by deployment of 92 tankers per day was undertaken at Chanderia.

SUBSIDIARY COMPANIES

The Company has nine subsidiaries out of which the three subsidiaries namely, Thiruvaiyaru Industries Limited, Birla North East Cement Limited and New-Age Cement Limited are under the process of voluntary winding up. Therefore, the aforesaid three subsidiaries have not been considered in preparing the consolidated balance sheet.

The statement pursuant to Section 212 of the Companies Act, 1956 containing details of subsidiaries of the Company, relating to six subsidiaries. forms part of the Annual Report.

In view of the general exemption from the applicability of Section 212(8) of the Companies Act, 1956 granted by the Ministry of Corporate Affairs vide its General Circular No.2/2011 dated 8th February, 2011, the Audited Statement of Accounts, the Reports of the Board of Directors and Auditors of the Subsidiary Companies are not annexed. Shareholders who wish to have a copy of the full report and accounts of the subsidiaries will be provided the same on receipt of a written request from them. These documents will also be available for inspection by any shareholder at the Registered Office of the Company on any working day during business hours. The consolidated Financial Statements presented by the Company include financial results of its subsidiary companies.

DIRECTORS RESPONSIBILITY STATEMENT

As required by Section 217(2AA) of the Companies Act, 1956, your Directors state that -

(a) in the preparation of the annual accounts for the year ended 31st March, 2011, the applicable accounting standards have been followed with proper explanation relating to material departures, if any;

(b) the accounting policies adopted in the preparation of the annual accounts have been applied consistently (read with notes as appearing in Schedule 23 on Accounting Policies and Notes on Accounts) and reasonable and prudent judgments and estimates have been made so as to give a true and fair view of the state of affairs of the Company at the end of the Financial Year 2010-11 and of the profit for the year ended 31st March, 2011;

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

(d) the annual accounts for the year ended 31st March, 2011, have been prepared on a going concern basis.

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

As required under Section 217(l)(e) of the Companies Act, 1956, details relating to Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo are given in the Annexure, which is annexed hereto and forms part of the Directors Report.

PARTICULARS OF EMPLOYEES

As required under Section 217(2A) of the Companies Act, 1956, and the Rules made thereunder, particulars of the employees concerned are given in the Annexure, which is attached hereto and forms part of the Directors Report.

DIRECTORS

Shri Anand Bordia and Shri Pracheta Majumdar retire from the Board by rotation and being eligible, offer themselves for re-appointment.

Shri N.K. Kejriwal, who is also retiring by rotation has not offered himself for re-appointment on account of ill health and accordingly shall cease to be a Director upon conclusion of the ensuing Annual General Meeting. Shri Kejriwal has served as a Director on the Board of the Company for more than 44 years and the Board places on record its deep appreciation for the services rendered by him during his tenure.

AUDITORS & AUDITORS REPORT

The members are requested to appoint the auditors and to fix their remuneration.

The notes on accounts referred to in the Auditors Report are self-explanatory and, therefore, do not call for any further comments.

Shri Somnath Mukherjee, Cost Accountant, had been appointed as Cost Auditor relating to Cement and Jute Goods manufactured by the Company for the year under review in terms of the Central Governments approval.

APPRECIATION

We wish to place on record our appreciation for the continued assistance and co-operation extended to the Company by the Government of India, State Governments, Financial Institutions and Banks, Dealers and Customers. Shareholders and to all others who are continuing their assistance to the Company.

HARSH V.LODHA Chairman

PRACHETA MAJUMDAR VIKRAMSWARUP

DEEPAK NAYYAR

M. K. SHARMA

B.RNAHAR Executive Director & Chief Executive Officer Kolkata,

Dated, the 28th day of April, 2011


Mar 31, 2010

The Directors have pleasure in presenting their annual report on the business and operations of your Company together with the audited accounts of the Company for the year ended 31st March, 2010,

(Rs.in Crores)

31st March, 2010 31st March, 2009

Gross Turnover 2387.07 2038.84

Income for the year 2295.34 1866.78

Gross Profit before interest 843.42 501.93

Interest Charge 26.97 22.05

Profit before Depredation & Tax 816.46 479.88 Provision tor

i) Depreciation 45.64 43.42

ii) Taxation 203.63 259.27 112.95 156.37

Profit after Tax 557.18 323.51

Additions.

Balance Brought Forward from last year 100.92 167.95



Surplus available for Appropriation 658.10 491.46

Appropriation:

i) Debenture Redemption Reserve 13.25 -

ii) Interim Dividend 19.25 -

iii) Corporate Dividend Tax on interim Dividend 3.27 -

iv) Proposed Final Dividend 26.95 34.65

v) Corporate Dividend Tax on proposed Final Dividend 4.48 5,89

vi) General Reserve 400.00 467.20 350.00 390.54

Balance transferred to Balance Sheet 190.90 100.92



DIVIDEND

The Company has paid an interim dividend of Rs.2.50 per share (i.e. 25%) on ordinary shares during the year. Your Directors are pleased to recommend a final dividend of Rs.3.50 per share (i.e. 35%) on ordinary shares for the year ended 31st March, 2010. Thus the aggregate dividend for the year ended 31st March, 2010 works out to Rs.6.00 per share (60%) aggregating to Rs.53.95 crores including Corporate Dividend Tax of Rs.7.75 crores as compared to Rs.40.54 crores (including Corporate Dividend Tax of Rs.5.89 crores) in the previous year.

HIGHLIGHTS OFPERFORMANCE/EVENTS

1. Achieved its highest ever cement production at 5.70 million tonnes.

2. Achieved its highest ever turnover of Rs.2387.07 crores.

3. Highest ever rate of Dividend of 60% declared by the Company including Interim Dividend of 25% and Dividend Payout of Rs.53.95 crores (including Corporate Dividend Tax).

4. Highest ever share (86.86%) of blended cement in the overall cement production of the Company.

5. The Company has been included in the prestigious "Best Under A Billion" list by Forbes based on its excellent performance.

6. Decision to allocate a minimum of 10% of the distributed profit of the Company for Corporate Social Responsibility activities.

REVIEW OF OPERATIONS

All the seven cement manufacturing Units, spread over West Bengal, Madhya Pradesh, Uttar Pradesh and Rajasthan have performed satisfactorily in spite of stoppages related to expansion and modernisation activities. The level of production was maintained by procuring clinker from domestic and foreign sources.

During the year 2009-10, the Company achieved its highest ever production of cement at 5.70 million tonnes.

During the year under review, in general the demand supply scenario in the regions the Company operates in, was favourable. The market rates were firm in the first half of the year. With additional capacities coming on stream coupled with slackness in demand, the prices came down in the beginning of the second half. From January 2010, the prices started picking up again owing to resurgence in demand and remained stable till the year end.

The performance of Durgapur plant has improved distinctly during the year following "Suspension of Operations" and subsequent implementation of Voluntary Retirement Scheme (VRS) at the Unit in the previous year. Production of the Cement Division at Satna was marginally higher than the previous years level. Production at Cement Division, Chanderia was slightly lower due to the planned stoppage of plant taken during the year for implementing the expansion.

The Jute Division, which has been suffering for more than 15 years, has finally turned around during the year due to various management initiatives such as modernization of machinery, reduction in wastage and use of jute caddies as fuel in the boilers. Such measures have resulted in improved working of the Division despite an industry-wide strike of about 2 months during the year.

Management Discussion and Analysis Report, covering the performance details of each division separately, is annexed hereto.

EXPANSION AND MODERNISATION

During the year under review, the Company maintained its focus on building organizational capabilities. It took several initiatives to enhance costs competitiveness and improve productivity with a view to combat competition in the market place. As part of strategic growth initiative and to maintain the growth momentum, the Company has embarked on a series of expansion and other infrastructure projects.

At Satna, the first phase of the programme to enhance the clinker capacity to 7400 Tonnes Per Day (TPD) has already been completed and the second & final phase is expected to be completed by July, 2010. After the completion .of second phase the total clinker production capacity at Satna would stand increased to 9600 TPD.

Further, the Company is replacing the age-old cement ball mill with a 330 Tonnes Per Hour (TPH) roller press at Satna. At Chanderia (Rajasthan),

a 12 million ton brownfield plant, along with Waste Heat Power Plant is being set up. At Durgapur, work is on to increase the grinding capacity by 0.6 million tons per annum, which will enhance the total capacity there to 2.3 million tonnes, the largest in West Bengal. Further, with a view to opdmize on the logistic cost, it is proposed to install a mixing and packing plant with a capacity of 3 Lacs Ton Per Annum (LTPA) at Kota, Rajasthan. These projects are expected to be completed in phases in two years time. After completion of the above expansion projects, the effective annual capacity of the Cement Division will stand at about 9 million tonnes.

The project work for installation of the Waste Heat Recovery System (WHRS) both at Satna and Chanderia is progressing satisfactorily and the same is likely to be completed in phases from the Second Quarter of the Financial Year 2010-11. Under the system, the hot waste gases coming out of the pre-heater and clinker cooler will be used to generate power and the Green House Gases (GHG) emissions into the atmosphere will be reduced substantially.

The Company has been allotted Bikram Coal Block in Madhya Pradesh and the mine plan has been approved by the Standing Committee of the Ministry of Coal. Applications for mining lease, forest clearance and environmental clearance have been submitted to the concerned Ministries and the same are being pursued.

The Madhya Pradesh Government has recommended to the Union Ministry of Mines for allotment of mining lease of about 2,130 hectares in Satna district to Talavadi Cements Limited, a subsidiary of Birla Corporation Limited. The recommendation has been challenged by some parties in the High Court and Tribunal. Once the issue is favourably resolved, the Company has plans to set up a cement plant with an annual capacity of up to 3 million tons with an investment of approx. Rs. 1,200 crores.

CREDIT RATING

Credit Analysis and Research Limited (CARE) has assigned "CARE AA+" (Double A Plus) rating for the Companys Long and Medium Term facilities of more than one year tenure and PR 1 + (PR One Plus) rating for Short Term Bank facilities aggregating to Rs.550 crores. Further, the rating Committee of CARE has assigned "CARE AA+" (Double A Plus) for the Long Term Borrowing (including Non-Convertible Debentures) Programme and has re-affirmed PR 1 + (PR One Plus) rating for the Short Term Debt.

Further, CRIS1L has assigned AA+/ stable (Double A Plus with stable outlook) rating for the Non-Convertible Debenture Programme and Pl+(pronounced P one Plus) rating for Short Term Debt Programme, respectively.

FINANCE

The Company has raised funds through issue of Secured Redeemable Non-Convertible Debentures aggregating to Rs.370 crores on private placement basis. The funds have been utilised for general corporate purposes.

CONTRIBUTION TO NATIONALEXCHEQUER

During the year under review, a sum of Rs.785.54 crores (Rs. 616.28 crores in 2008-09) was paid to the vanous government authorities on account of taxes, duties and other levies.

CORPORATE GOVERNANCE

The Company has complied with the Corporate Governance Code as stipulated under the Listing Agreement with the Stock Exchanges. A separate section on Corporate Governance, along with certificate from the auditors confirming the compliance, is annexed and forms part of the Annual Report.

AWARDS & RECOGNITION

The Company has been included in the prestigious "Best Under A Billion" list by Forbes and is one of the 20 Indian companies featured this year. Birla Corporation Limited has been selected by the editors of Forbes as one of the best companies with revenues of less than $ 1 billion based on its track record of consistent profitability, growth and best corporate practices over a three-year period. The fifth annual "Best under a Billion" list comprises the top 200 companies, picked up from more than 25,326 publicly-listed firms with sales of less than $ 1 billion in the Asia-Pacific region. The recognition came at a very opportune time for Birla Corporation Limited since it is one of the oldest cement manufacturing companies in India and is currently celebrating 50 years in the cement business.

Further, the Company has received the following Awards/Recognitions during the year:

i) Greentech Safety Award from Greentech Foundation, New Delhi received by our Satna Unit for its outstanding safety measures taken for the employees.

ii) Birla Jute Mills, Birlapur has been recognised with Quality Management System, installed and effectively implemented as per IS/ISO 9001:2008.

CORPORATE SOCIAL RESPONSIBlLITY

The Company as a part of the M.P. Birla Group is actively associated with various social and philanthropic activities undertaken by the Group. The- Company has been playing a pro-active role in the socio-economic growth and has contributed to all spheres ranging from health, education, rural infrastructure development, environment conservation etc.

In keeping with the M.R Birla Groups vision to serve the society, the Board of Directors of the Company has decided to allocate a minimum of 10% of the distributed profit towards Corporate Social Responsibility (CSR) activities. The CSR activities will be undertaken by the Company on its own or through various charitable institutions, including those managed by the M.P. Birla Group which currently runs various healthcare and educational institutions of repute. These include M P Birla Hospital and

Priyamvada Birla Cancer Research Institute at Satna, Bombay Hospital, Mumbai and Indore, Belle Vue Clinic and Priyamvada Birla Aravind Eye Hospital, Kolkata, and South Point School and M.P. Birla Foundation Higher Secondary School, also in Kolkata, to name a few.

That apart, some of the other initiatives of the Company in the field of conservation of environment, health-care, education and social welfare are as follow :

A) Conservation of Environment

The Company believes in sustainable development by promoting clean environment and making the environment eco-friendly. Accordingly, various initiatives have been taken for Clean Development Mechanism (CDM) and pollution prevention. The environmental dimension forms an integral part of the business decisions. All our units hold IS/ISO : 14001 certification of "Implementation of Environmental Management System" and the operations at all of our Units are conducted in a manner in which the ecological balance is given due regard. Massive plantations and gardening have been undertaken at Satna, Raebareli and Chanderia Units both in and around mining, plant and residential area. At Satna, pollution control operation of Bag Dust Collector (BDC) was optimised and additional BDC were installed wherever required. At Chanderia, Recycling and Water management system have been incorporated, in addition to Water Table Monitoring System. At Chanderia unit pneumatic Fly Ash transportation system and concreted roads and open space for reduction in fugitive dust has been installed. Power and fuel consumption has also been reduced by adoption of the latest technology in upgradation of our plant and implementation of Waste Heat Recovery System (WHRS) at Satna and Chanderia plants, which will also reduce Green House Gases (GHG) emissions. Further, to protect the environment, the Company has consumed 10.50 lac tonnes of Fly ash during the year 2009-10 at various cement plants of the Company. This has resulted in reduction of clinker usage, which in turn reduced GHG emissions.

B) Health Initiatives

Medical camps were organized for free medical aid for the benefit of villagers of surrounding areas in Satna unit. A fully equipped dispensary under the supervision of qualified medical practitioners and para- medical staff is maintained round the clock at Sagmania Mines and Factories for the benefit of the villagers in the vicinity of Satna. The medical officer and para-medical staffs also visited various villages like Bathia, Baraj, Nimi, Kotar, Barikalan and Bharjuna, every week for free medical check up, treatment and providing medicines. The Company provided the required infrastructure for establishing an Ayurvedic Dispensary at Sagmania Mines Colony run by Cess and Welfare Department, Government of India. The Company sponsored/supported various programmes in the field of Pulse Polio vaccination and other related programmes organized by local authorities and other agencies. At Chanderia, two Family Planning Camps were organized wherein 203 operations were carried out. At Durgapur, 9 nos. eye screening camps were organized through M.P. Biria Eye Clinic and total 1836 eye surgeries were undertaken during the year.

C) Education Initiatives

Scholarship, dress, water filters etc. were provided by Satna Unit for about 50 girls of SC/ST for the Girls Ashram School, Kothi. The Unit also provided free stationery and sports materials and contributed for other social activities in the villages surrounding our mining areas and nearby schools. Bus facility for attending the school in city area was provided to the children living in the surrounding villages of Satna. A school boundary wall was constructed at Nagri and Achora village near Chanderia. Vocational Training was provided to a number of students pursuing Management and Engineering courses at our plants as well as at Corporate Office.

D) Social Welfare

Drinking water is being provided regularly in RCC water tanks • constructed by the Satna Unit in nearby villages. In nearby villages, drinking water supply line is being provided and distribution of drinking water through tankers during summer and marriage season has been carried out. The Unit also contributed in repairing of Hand Pumps and Submersible Pumps in nearby villages and cleaning and deepening of ponds of surrounding areas. The Unit organized various social activities and social functions. The All India Independence Day Football Tournament at Gandhi Stadium organized by the Company was registered as First Class Tournament by All India Football Association, New Delhi. At Sanwaria Government Hospital, Madhav Circle (Bhilwara Road), regular maintenance and development of garden was undertaken by Chanderia Unit. Bore hole-drilling work in Jai village and repairing of cow shelter (Goshala) at Gangrar was also done at Chanderia.

SUBSIDIARY COMPANIES

The statement pursuant to Section 212 of the Companies Act, 1956 containing details of subsidiaries of the Company, forms part of the Annual Report.

In view of the exemption received from Central Government vide letter No.47/269/2010-CL-III dated 8th April, 2010, the Audited Statement of Accounts, the Reports of the Board of Directors and Auditors of the Subsidiary Companies are not annexed as required under Section 212(8) of the Companies Act, 1956. Shareholders who wish to have a copy of the full report and accounts of the subsidiaries will be provided the same on receipt of a written request from them. These documents will also be available for inspection by any shareholder at the Registered Office of the Company on any working day during business hours. The consolidated Financial Statements presented by the Company include financial results of its subsidiary companies.

DIRECTORS RESPONSIBILITY STATEMENT

As required by Section 217(2AA) of the Companies Act, 1956, your Directors state that -

(a) in the preparation of the annual accounts for the year ended 31st March, 2010, the applicable accounting standards have been followed with proper explanation relating to material departures, if any;

(b) the accounting policies adopted in the preparation of the annual accounts have been applied consistently (read with notes as appearing in Schedule 23 on Accounting Policies and Notes on Accounts) and reasonable and prudent judgments and estimates have been made so as to give a true and fair view of the state of affairs of the Company at the end of the Financial Year 2009-10 and of the profit for the year ended 31st March, 2010;

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

(d) the annual accounts for the year ended 31st March, 2010, have been prepared on a going concern basis.

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

As required under Section 217(l)(e) of the Companies Act, 1956, details relating to Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo are given in the Annexure, which is annexed hereto and forms part of the Directors Report.

PARTICULARS OFEMPLOYEES

As required under Section 217(2A) of the Companies Act, 1956, and the Rules made thereunder, particulars of the employees concerned are given in the Annexure, which is attached hereto and forms part of the Directors Report.

DIRECTORS

Shri DeepakNayyar, an eminent economist and author and Shri Mahendra Kumar Sharma, a corporate consultant and former Vice-Chairman of Hindustan Unilever Limited were appointed as Additional Directors of the Company w.e.f. 22nd April, 2010.

Shri Harsh V. Lodha, Smt. Nandini Nopany and Shri D.N. Ghosh retire from the Board by rotation and, being eligible, offer themselves for re- appointment.

The Company did not receive the annual declarations under Section 274(1 )(g) and Section 299 of the Companies Act, 1956 from ShriN.K. Kejriwal due to his ill health.

AUDITORS & AUDITORS REPORT

The members are requested to appoint the auditors and to fix their remuneration.

The notes on accounts referred to in the Auditors Report are self-explanatory and, therefore, do not call for any further comments.

Shri Somnath Mukherjee, Cost Accountant, had been appointed as Cost Auditor relating to Cement and Jute Goods manufactured by the Company for the year under review in terms of the Central Governments approval.

APPRECIATION

We wish to place on record our appreciation for the continued assistance and co-operation extended to the Company by the Government of India,

State Governments, Financial Institutions and Banks, Dealers and Customers, Shareholders and to all others who are continuing their assistance to the Company.

HARSH V.LODHA Chairman

NANDINI NOPANY

PRACHETA MAJUMDAR

VIKRAMSWARUP Directors

B. B . TANDON

D. N. GHOSH

B. R. NAHAR Executive Director & Chief Executive Officer

Kolkata,

Dated, the 22nd day of April, 2010

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