Directors Report of UltraTech Cement Ltd.

Mar 31, 2023

Sustainability

Your Company’s approach to sustainability is aligned with global goals, such as the Paris Agreement, the United Nations’ Sustainable Development Goals (“SDGs”), Science Based Targets initiative (SBTi), Net Zero Commitment, and the GCCA roadmap. Your Company has shifted from following traditional sustainability models to a more innovative and technologically experimental approach that is consistent with its vision of building a sustainable business while also balancing stakeholder expectations.

Your Company adheres to international standards such as the International Finance Corporation (“IFC”), the Organisation for Economic Cooperation and Development (“OECD”), and the Global Reporting Initiative (“GRI”), and its Sustainable Business Framework is currently certified to 14 international standards.

Your Company’s commitment to the World Business Council for Sustainable Development’s (“WBCSD”) Water, Sanitation, and Hygiene (“WASH”) Pledge has resulted in better hygiene standards and inclusivity in terms of the construction of female and disability-friendly washroom facilities across units and stakeholder engagement initiatives to help gain insights into potential opportunities and business risks, to be leveraged for enhancing business models and strategies.

Your Company has integrated the findings of the Task Force for Climate-Related Financial Disclosures (“TCFD”) into its risk management, business planning, and strategy, and has considered the impact of its carbon emissions on the environment as part of its evaluation and decisionmaking process. Your Company’s performance in the S&P’s Dow Jones Sustainability Index has improved significantly. It is ranked sixth in the Global Sectoral ranking of the S&P Global Dow Jones Sustainability World Index (“DJSI”).

Your Company is the only Indian company in the Top 10 in the Construction Material sector for the second year in a row, aiding in benchmarking its performance against the world’s best companies. Your Company is also featured in the S&P Global Sustainability Yearbook 2023. Only companies with a score within the Top 15% of their industry and having achieved an S&P Global Sustainability score within 30% of their industry’s top-performing companies are listed in the Global Sustainability Yearbook.

The adoption of new, cleaner, and greener technology together with a constant effort across all units and processes to become more energy efficient has bolstered your Company’s commitment to delivering Net Zero Concrete by 2050, working with its value chain partners to accelerate decarbonisation. Your Company aims to achieve a 27% reduction in Scope 1 carbon intensity by

31^st March, 2032, against the carbon emissions from March 2017, with assistance from SBTi. Your Company has also over-achieved on the target set by the Government of India for the first Perform, Achieve, and Trade (“PAT”) cycle.

Your Company’s total electricity requirement is to be met using renewable sources by 2050 as part of its RE100 commitment. With this aim, your Company continues to increase the use of renewable energy in its energy mix. Your Company has been striving to reduce consumption of fossil fuels by escalating their substitution with wastes from other industries. These efforts have resulted in 5.2% of its fuel requirements being met using alternative fuels and wastes. Your Company aims to be five times water positive by 2024, which means that it will replenish five times the amount of water it consumes.

As part of its continuing initiatives to ensure sustainable growth, your Company has completed Life Cycle Assessment (“LCA”) studies for four of its products and has used these as input to identify hotspots over the value chain where the reduction of environmental impact is possible. More than 70 products in your Company’s portfolio have GreenPro certification. Environment Product Declaration (“EPD”) studies have also been conducted to uphold its product stewardship agenda.

Your Company’s embarkment on digital transformation has the potential to decouple emissions and resource use from economic growth as well as to make its operations safer and more reliable.

Digitalisation

Your Company’s digital solutions keep customers at the core of innovation to achieve a connected and smart ecosystem. With a deep understanding of its customers, the business teams learn fast and pivot rapidly, leveraging the best possible technologies to design state-of-the-art digital solutions.

These solutions provide an enhanced customer experience by empowering internal stakeholders and partners, improving efficiencies, and driving collaboration amongst teams.

Your Company has further enhanced existing solutions and launched new digital solutions for customers, partners, and employees.

Smart Manufacturing: Your Company continues to accelerate the adoption of digitalisation in its operations, encouraged by incremental value delivered through

various initiatives. Your Company is investing in the setting up of cloud infrastructure as a key foundation for smart and connected factories.

Reliable Operations and Process Stability: Industry 4.0 technologies have empowered reliability teams by complementing existing preventive procedures and generating predictive and early alerts. Along with mechanisms to monitor and sustain process stability using combinations of software and AI solutions, your Company continues to beat reliability records across plant operations. Efforts on validating advanced algorithms to further improve process and equipment reliability are underway at your Company.

Energy Optimisation and Enhanced Productivity:

Building on past efforts, your Company continued to scale the adoption of algorithmic advisory solutions to improve process stability and efficiency across all energy metrics, mainly focusing on increasing alternative fuel

consumption and improving WHRS power generation, among others. Investments in expert control systems over the last few years have complemented these results.

Other initiatives around digital mining management and optimisation are also underway to realise gains through better operational efficiencies.

Safer Operations: Each employee in your Company is a safety officer. The use of digital tools allows for improved effectiveness and collaboration of efforts on safety. Computer vision, augmented reality (“AR”), virtual reality (“VR”), and other sensors are being adopted or scaled to support safety objectives at the units.

Empowering Teams: The use of digital solutions for dynamic planning and the sourcing of packaging materials is improving central synergies and efficiency. An end-to-end fuel sourcing planning platform is helping take optimal decisions, which positively impacts the energy cost. Your Company’s procurement team has adopted a ‘procure to pay’ digital platform for engineering and packaging materials to drive efficiency, over and above current capabilities.

Speed, scale, customer convenience, and operational efficiency have been the focus areas of the digital transformation journey. In the last year, your Company has accelerated efforts to provide superior value to internal and external stakeholders by leveraging the best technologies with the successful roll-out and seamless adoption of the digital solutions by your Company’s employees, customers, and service partners.

Customer First: Over the last two years, your Company has successfully completed the roll out of mobile app-based digital solutions to its channel partners and institutional customers. Through these apps, it has replaced several paper-based processes, helping to save time and improve the speed of operations for customers, partners, and internal teams.

Continuous enhancements carried out through the deep understanding of customers has enabled a high-level of adoption and use of these solutions.

UltraTech Trade Connect, a mobile app-based solution, provides unparalleled convenience to dealers and retailer network across the country. By providing a single interface it empowers channel partners to manage their day-today operations with ease. More than 90% of dealers across India, regularly use the app for engaging with your Company.

UltraTech Customer Connect, a mobile app-based solution, helps institutional customers to plan their site operations better through visibility of supplies and test certificates. The sites can provide electronic proof of delivery (ePOD) and access the finance documents, which help in streamlining the payment processes. More than half of your Company’s institutional customers have adopted this solution.

Empowering Partners: Your Company counts on its drivers and transport partners as a crucial link for delivering superior experience to customers. Eye-to-track, a multilingual app launched for driver partners, has been well received among 50,000-plus drivers who have downloaded the app which conveniently connects them with customers.

Empowering Internal Stakeholders: Your Company’s integrated information hub, Logistics Control Tower (“LCT”), provides a single version of the truth and end-to-end visibility to logistics. It has also been extended on mobile phones (“LCT Lite”) to your Company’s front-end sales teams for driving collaboration to improve logistics efficiencies.

These solutions, with unified flow of information between them, and functioning together as an integrated digital platform for the network of dealers, retailers, transporters, and drivers, is enabling your Company to be a customer-centric partner for its customers as well as the end consumers.

Your Company’s Shared Services viz. UltraTech Knowledge Service Centre (“UKSC”), now in operations for around 4 years, has grown to a strength of 717 members processing ~1.9 million vendor invoices annually, maintaining 1.3 million customer/vendor master records, ensuring GST compliances for 26 states, and closing books of accounts for each of the 80 units/zones every quarter to enable company-level consolidation for all of your Company’s operations.

UKSC is built as a scalable and digitally enabled ‘Centre of Excellence’ (“CoE”), which not only helps your Company to seamlessly absorb accounting work for any new cement capacity expansion, but also serve as a best-inclass knowledge hub to create future finance leaders. Representing at various Shared Service forums, UKSC has recently been recognised with an award for the “Best Shared Service Team”. The digital adoption has been recognised by the Aditya Birla Group IT and UKSC has won the “IT Digital Showcase 2.0 Award” for the Project -.SAP-AFC Implementation.

Continuing the collaboration with the CIO’s and business finance team, UKSC is currently adopting further digital initiatives for people, process, and compliance which will not only make it more efficient but also create business value by providing actionable insights to business leaders on cost, working capital and other levers to optimise the ROCE. Creating an Analytics CoE for the future is in line with this. This digital journey is expected to further accelerate in the coming quarters, yielding significant benefits for your Company and its stakeholders.

Human Resources

Your Company continued to focus on employee core connect, engagement, learning, and development to build a workplace that is safe, engaging, and productive. Your Company undertook digitalisation of all talent management processes for regular communication. All the employees of your Company were presented with various learning opportunities to enhance career growth. Learning and development teams ensured the training of employees and leveraged virtual mediums to organise learning sessions for them. Wellness sessions that dealt with topics related to safety and health helped create awareness among employees and their families about key areas related to their well-being.

Throughout the year, employees remained connected through planned events such as seminars, learning programs, and self-learning modules.

Your Company’s employee strength stood at 22,916 on 31^st March, 2023 (compared to 21,921 in 2022).

Safety

Your Company accords the utmost importance to precious human life. Hence, the safety of people associated with the business remains the fulcrum of your Company’s operations. To further boost the effectiveness of the already well-established safety management system, your Company took a call to bring an emotional element into it. Consequently, numerous interventions

were launched and driven under an organisation-wide campaign coined ‘Suraksha, dil se...’ (“Safety by heart”), encompassing almost all vital elements that constitute organisational safety culture. Positive outcomes are reflected in the lagging indicators - the best-ever Lost Time Injury Frequency Rate (“LTIFR”) of -0.10 was achieved, a reduction of 28% compared to the previous best.

Under the aegis of ‘Suraksha, dil se.’, various interventions were driven with an aim to make safety a way of life. These were related to four major components of the safety management system: setting objectives and reviewing them through leaders connect, building competence, facilitating implementation, and verifying compliance.

Setting Objectives and Reviewing Them Through Leaders Connect

• Fatal risk prevention elements (working at height, conveyor safety, hot material safety, and electrical safety) were included in the annual safety key performance indicators (“KPIs”). There has been a positive shift in identifying and reporting unsafe conditions, acts, and near misses related to these four fatal risk prevention elements.

• Fortnightly safety reviews were carried out by the Head of Manufacturing. Senior managers were randomly selected from three units, who connected every week and had interactions on various safety KPIs of their respective unit.

• ‘Pratibimb’ - weekly reviews were carried out by Cluster Heads through walk-through inspections done by

employees across units. 576 employees connected through 144 sessions during the year.

• The Unit Apex committee, headed by the Unit Head, reviews monthly the effectiveness of six subcommittees’ functioning on: i) standards and procedures, ii) safety observations, iii) training and capability building, iv) incident investigation,

v) contractor safety management, and vi) logistics safety. Representatives of unit-level subcommittees apprise status at the respective cluster-level subcommittee meetings, which are chaired by the Cluster Heads. These meetings are held once every four months, where decisions are made to act based on inputs/review outcomes. Finally, the Occupational Health and Safety (“OHS”) Board, chaired by the Managing Director and Head of Manufacturing, reviews organisational safety performance once every two months, and a further course of action is communicated across units.

Building Competence

Around 750,000 man-hours of safety training were

organised across units during the year.

A brief description of the various safety training elements

are as follows:

• Standard Champions training: to build a pool of competent in-house resource as trainers, 500 employees across all units were trained on 18 safety standards through the ‘Standard Champions training’ programme.

• VR-enabled safety training on 30 modules was organised for contract workmen and employees at units to ensure that job-specific immersive training is provided to each contract workman before deploying them to the job. VR puts learners in places and situations they are likely to encounter on the job and allows them to experience how their actions affect outcomes, all in a safe environment. Around 12,000 persons were trained during the year.

• E-learning modules on critical processes (such as use of a coal mill or boiler, operations involving the likelihood of hot material exposure, and the management of change) were developed and uploaded to the learning management system (“LMS”) platform. The system was institutionalised so that all employees involved in these operations needed to mandatorily get themselves qualified through tests after going through these courses. Around 5,000 employees completed these courses during the year.

• Virtual training sessions in Hindi as well as regional languages were organised for the contractual workforce on four fatal risk prevention elements: working at height, conveyor safety, electrical safety, and hot material safety. Around 14,000 contractual workers covered so far.

• 544 persons (employees and contract workers) engaged in rail yard related activities across units have been trained on rail safety by an external expert.

• Classroom safety training has been imparted to 1,800 contractor’s supervisors across all units.

Facilitating Adherence to Safety

• Monthly safety campaign, driven by identified themes (based on analysis of past incidents): Multiple activities/events are organised and supported by

a variety of mediums (3D animation video, creative posters, training through virtual platform etc.) to reach out to all.

• Safety toll-free number (available 24/7): As a deterrent against safety violations, an exclusive safety toll-free number has been made available with communication to every person (employee/contract worker) so that they can act as whistleblowers to save lives. The concerns voiced are addressed, keeping the caller’s identity anonymous.

• 60 seconds to think: This involves seven questions that have to be asked by each individual before initiating any work. They must sign this and submit it along

with Permit-to-Work (“PTW”) to the custodian. It also facilitates the ability of any contract worker to say ‘no’ if they feel they are not safe to execute the work or are not convinced that the conditions to execute the work may cause an accident.

• Safety behaviour observation: Safety observation—a structured, pro-active six-step process—is in place to achieve positive change in people’s behaviour towards safety in the workplace. It aims to i) recognise and reinforce positive safety behaviour, ii) identify and correct behaviour at risk, and iii) engage in conversation regarding safety concerns or issues. During the year, over 4,00,000 observations were reported through this across units.

• Digitisation of walk-through inspection (WTI): A latitude-longitude-based unique QR code was generated for each of around 50 locations of a unit.

By scanning the specified section’s QR code, the user can view the WTI checklist of the section and report findings by using the ‘speech-to-text’ feature. Around 300,000 findings were reported through WTI and closed during the year across all units.

• 20 Pictorial Standard Operating Procedures (“SOPs”) in Hindi - with less text and more visuals displayed at relevant locations for contractual workers to easily understand and follow.

• 30 3D-animated videos in English and Hindi on past serious incidents are shown at units for easy understanding by employees and contractual workers about how and why those happened, to prevent recurrence.

• A Behavioural Science-Based Safety (“BSBS”) program was launched to address the psychological issue of contractual workforce towards safety.

• With the on-going capacity expansions, safety at project sites pose their own challenges on account of timelines for execution and contract workmen attrition. To give more thrust towards safe execution of projects, multilayer monitoring was introduced which is over and above the existing safety management practices at your Company. Apart from respective project HRC and Apex committees, safety experts were deployed

at the sites. Additionally, expert rigger and scaffolding experts were placed at each project site to support safe execution.

Verifying Compliance

• Assurance: An independent safety assessment was carried out by a third-party expert agency to evaluate the degree of compliance to 17 safety standards (as applicable) across of your Company. The result of this

assessment has been shared with units to enable them take corrective actions. The minimum score improved from 53% in FY22 to 72% in FY23.

• Safety audit: Around 4,000 observations reported through first party safety audit (FPSA) across units were closed. In addition, 8,000 contractor field safety audits were carried out across units during the year. Safety audits at 62 RMC plants by safety professionals of nearby manufacturing units identified 1,825 findings, all of which were subsequently closed.

• ‘g''rf ^ - Contractor Connect Initiative’:

Unit Heads/Function Heads engage through weekly sessions with contractors and workers to verify adherence to safety norms while at work. This has been continued for 84 weeks so far since launch.

Corporate Social Responsibility

In terms of the provisions of Section 135 of the Act read with the Companies (Corporate Social Responsibility Policy) Rules, 2014, the Board of Directors of your Company has constituted a Corporate Social Responsibility (“CSR”) Committee, chaired by Mrs. Rajashree Birla. Other Members of the Committee are Mrs. Sukanya Kripalu, Independent Director, and Mr. K. C. Jhanwar, Managing Director. Dr. (Mrs.) Pragnya Ram, Group Executive President, CSR, Legacy, Documentation and Archives, is a permanent invitee to the Committee. Your Company has in place a CSR Policy, which is available at https://www.ultratechcement.com/investors/corporate-governance#policies.

Your Company’s CSR activities are focused on social empowerment and welfare, infrastructure development, sustainable livelihood, healthcare, and education.

Various activities across these segments have been initiated during the year around its plant locations and adjacent villages.

During the year, your Company spent ''115.99 crores on CSR activities and set off ''18.60 crores from the excess spent during FY21, aggregating to ''134.59 crores, resulting in 2% of the average net profits of your Company during the last three financial years. A report on CSR activities is provided in Annexure III, which forms part of this Report.

Subsidiaries, Joint Ventures, and Associate Companies

The audited financial statements of your Company’s subsidiaries and joint ventures viz. Harish Cement Limited, Gotan Lime Stone Khanij Udyog Private Limited, Bhagwati Lime Stone Company Private Limited, UltraTech Nathdwara Cement Limited (“UNCL”), UltraTech Cement Middle East Investments Limited (“UCMEIL”), UltraTech Cement Lanka (Private) Limited, and their related information are available for inspection on your Company’s website. PT UltraTech Mining Indonesia and PT UltraTech Investments Indonesia were struck off as subsidiaries with effect from 14^th June, 2022. UCMEIL entered into a Share Sale and Purchase Agreement with Seven Seas Company LLC., Oman for acquisition of 70% equity shares in Duqm Cement Project International, LLC. Oman (“Duqm”). Duqm has allotment of limestone mines and other infrastructure that would help your Company secure limestone supplies for its coastal-based plants.

The Board of Directors approved a Scheme of Amalgamation of UNCL (a wholly-owned subsidiary of your Company) and its wholly-owned subsidiaries viz. Swiss Merchandise Infrastructure Limited and Merit Plaza Limited with your Company. The Appointed Date of the

Scheme is 1^st April, 2023. The transaction is subject to the approval of National Company Law Tribunal, Mumbai and Kolkata and other regulatory authorities as may be required.

Any Member who is interested in obtaining a copy of the audited financial statements of your Company’s subsidiaries may write to the Company Secretary.

In accordance with the provisions of Section 129(3) of the Act read with the Companies (Accounts) Rules, 2014, a report on the performance and financial position of each of the subsidiaries, joint venture, and associate companies is provided in Annexure IV of this Report.

Particulars of Loan, Guarantee, and Investment

Details of Loan, Guarantee, and Investment covered under the provisions of Section 186 of the Act read with the Companies (Meetings of Board and its Powers) Rules, 2014, are given in the Notes forming part of the standalone financial statements.

Energy, Technology, and Foreign Exchange

Information on the conservation of energy, technology absorption, and foreign exchange earnings and outgo, required to be disclosed pursuant to Section 134(3)(m) of the Act read with the Companies (Accounts) Rules, 2014, is given in Annexure V of this Report.

Particulars of Employees

Disclosures relating to remuneration and other details as required under Section 197(12), read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are given in Annexure VI. In accordance with the provisions of the aforementioned section, the names and other particulars of employees drawing remuneration in excess of the limits set out in the aforesaid rules form part of this Report. However, in line with the provisions of Section 136(1) of the Act, the Report and Accounts as set out therein, are being sent to all Members of your Company, excluding the aforesaid information. Any Member who is interested in obtaining these particulars may write to the Company Secretary.

Business Responsibility and Sustainability Report

The Securities and Exchange Board of India (“SEBI”), by its circular dated 10^th May, 2021, introduced new sustainability-related reporting requirements to be reported in the specific format of the Business Responsibility and Sustainability Report (“BRSR”).

The BRSR forms part of this Report.

Contract and Arrangement with Related Parties

Related party transactions entered into by your Company during the financial year were completely on an arm’s length basis and in the ordinary course of business. There were no material transactions with any related party, as defined under Section 188 of the Act read with the Companies (Meetings of Board and its Powers) Rules, 2014. All related party transactions have been approved by the Audit Committee of your Company and reviewed by it on a periodic basis. The policy on Related Party Transactions, as approved by the Audit Committee and the Board, is available at https://www.ultratechcement.com/investors/ corporate-governance#policies.

The details of contracts and arrangements with related parties of your Company for the financial year ended 31^st March, 2023, is provided in Note No. 38 to the standalone financial statements of your Company.

Risk Management

Your Company recognises that every business encompasses risks that need timely intervention and management. To achieve the ambitious business goals in a challenging and dynamic environment, your Company is committed to proactively managing risks. While risks can never be eliminated, effective risk management can help in avoiding, mitigating, transferring, or accepting the associated impacts of risks.

At your Company, the Risk Management and Sustainability Committee (“RMS Committee”) is responsible for overseeing your Company’s risks. It reviews the Enterprise Risk Management Framework, analyses risks in depth, and defines mitigation actions where necessary. Your Company aims to assess and prioritise risks based on their significance in terms of impact and likelihood, considering the business environment, operational controls, and compliance procedures.

Your Company has identified several key risks, including economic environment and market demand; inflation and costs of production; legal and compliance; financial; environment; climate and sustainability; information technology; and talent management. Your Company considers the risk horizons, which includes longterm strategic risks, short to medium-term risks, and single events. The risks are analysed based on their likelihood and impact to determine the appropriate risk management strategy.

Key Business Risks identified by your Company:

Economic Environment and Market Demand

The demand for construction material is driven by the economic growth in the country. Economic slowdown and subdued infrastructural development might lead to a slowdown in construction projects, thus leading to a reduction in cement consumption in the country. In a scenario where incremental capacity addition exceeds incremental cement demand, the government’s push for infrastructure and housing will aid the growth in cement consumption.

Given that the cement industry in India is an aggregation of small and large companies, the risk of protecting market share in such environment is optimal for your Company. With the expanding capacities of existing players and the emergence of new entrants, competition is a sustained risk. To mitigate this, continuous endeavours to enhance brand equity through innovative marketing activities, enhancement in the product portfolio, and value-add services have been the thrust areas for your Company. The engineering expertise of your Company and its emphasis on quality also act as a significant counter measure to the risk of market fluctuations.

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Inflation and Cost of Production

Your Company faces the risk of inflation and price fluctuations in the cost of coal, pet coke, power, and other fuels, since these are market-driven. The cement industry is extremely energy intensive, and changes in fuel prices can significantly impact production cost. To de-risk, your Company has established specific policies of long-term contracts, and it continuously optimises its fuel mix and energy efficiency, while exploring the use of alternative fuels.

The procurement of raw materials at an economical cost or of suitable quality faces a high degree of inflationary certainty. Your Company mitigates this risk through the establishment of exhaustive policies for procurement of specific raw materials and stores those which are amenable to just-in-time inventories.

Limestone is the primary raw material required to produce cement, so its continuous and long-term availability is critical, particularly under the dynamic regulatory environment. Your Company currently possesses sufficient limestone reserves. However, securing additional reserves is critical to address your Company’s expansion plans. Apart from the preservation and extension of existing reserves, a range of measures, including strategic sourcing and changing input-mix, are adopted by your Company to mitigate the risk of unavailability of limestone.

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Legal and Compliance

This risk relates to any inadvertently violated laws covering business conduct. The country’s regulatory framework is ever-evolving, and the risk of noncompliance and penalties may increase for your Company, leading to reputational risks. A comprehensive risk-based compliance programme, involving inclusive training and adherence to the Code of Conduct, is thus institutionalised by your Company. As a step to mitigate the legal and compliance risk, your Company’s management encourages its employees to place their reliance on professional guidance and opinions to discuss the impact of any changes in laws and regulations to ensure total compliance. Periodic and ad hoc reporting to various internal committees for oversight ensures the effectiveness of such a programme.

Financial

This comprises the risk of exposure to fluctuations in interest rates, foreign exchange rates and commodity prices. The risk management strategy is to identify the risk exposure, measure and evaluate the financial impact, and decide on steps to mitigate the risks together with ensuring regular monitoring and reporting.

With the objective of minimising risks arising from the uncertainty and volatility of foreign exchange rate fluctuations, an elaborate financial risk management policy is followed for every transaction undertaken in foreign currency. Your Company’s policies to counter such risks are reviewed periodically and constantly aligned with the financial market practices and regulations.

Changing laws, rules, regulations, and standards relating to accounting, corporate governance, public disclosure, and listing regulations are generating newer and unforeseen

risks for companies. The new or changed laws, regulations, and standards may lack precedence and are subject to varying interpretations. Their application in practice may evolve as new guidance is provided by regulatory and governing bodies. Thus, your Company maintains a high standard of corporate governance and public disclosure to de-risk itself from such dynamic regulatory changes.

Environment

Environmental risk pertains to the harm caused to the environment by pollution resulting from waste discharge and greenhouse gas emissions. To prevent this, your Company’s operating units are equipped with Continuous Emission Monitoring Systems (“CEMS”) in the major stacks and monitored in real-time by the Central Pollution Control Board (“CPCB”) and State Pollution Control Boards (“SPCBs”). The units have been in compliance with the regulations of the Ministry of Environment, Forest and Climate Change (“MoEF&CC”), and no major deviation has been observed.

In addition to CEMS, third-party environment monitoring is regularly carried out by laboratories which are approved by the National Accreditation Board for Testing and Calibration Laboratories (“NABL”), and the results are further substantiated by monitoring carried out by SPCBs.

Regular measures are being taken to maintain the performance efficiency of Pollution Control Equipment at all the units. This year, the performance efficiency study of Air Pollution Control Devices (“APCDs”) in the units was carried out by NCCBM. Internal environmental audits are also conducted to ensure that the emissions are kept within or lower than the limits for the APCDs on a regular basis.

For better control of fugitive emissions, your Company has initiated an emission inventory dispersion modelling study for one of its units by the Indian Institute of Technology, Mumbai. Your Company has also constructed covered sheds for various raw materials and fuels at some units and concreted new roads at others.

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Climate and Sustainability

Your Company has analysed climate change-related risks in its operations, including the physical and transition risks it entails, which are aligned with the Task Force on

Climate-related Financial Disclosures (“TCFD”) framework. The following climate-related risks have been identified:

Physical Risks

• Acute physical risks arising from longer-term changes in climate patterns causing damage to assets or supply chain disruption, such as floods, heat waves, cyclones, and droughts.

• Chronic physical risks such as variations in temperature, precipitation patterns, and water stress.

• Transitional risks emerging from the transition to low-carbon business pathways that involve regulatory changes, technology, and market changes to address mitigation and adaptation requirements related to climate change.

Your Company has developed a risk mitigation strategy against each climate risk, summarised as follows;

Acute physical risks: Your Company diligently implements disaster management plans, health and safety protocols, and adequate communication protocols during extreme weather events to ensure site safety and minimise the impact on the workforce. Annual weather forecasts are being considered in global supply chain decisions to mitigate the risk of delays in sourcing fuels and machinery due to natural calamities. Insurance coverage is in place to protect against damages to business assets or loss of materials in warehouses or transit due to extreme weather events.

Chronic physical risks: Your Company has proactively installed rainwater harvesting systems across sites. In addition, at several of the manufacturing sites, Zero Liquid Discharge (“ZLD”) plants have been installed to enable the reuse of 100% treated water within the sites. As a result, your Company is 4.1 times water positive currently.

Measures to mitigate the risks of heat waves have been introduced across sites, making your Company resilient to such risks. Some such measures include minimal work in mid-day hours in warehouses or outdoor areas during peak summer days, flexible work hours with early morning and late evening shifts to avoid exposure to heat waves, and compliance to the WASH Pledge (ensuring the availability of drinking water).

Transitional risks: Emerging climate policies and the world carbon market economy could significantly impact companies in the future due to their effects on the supply chain, physical risk, shifting customer preferences, and the transition to a low-carbon economy. Your Company has analysed physical and transitional risks using a scenario-based approach and is aligned with the Representative Concentration Pathway (“RCP”), ETP B2DS, and IPCC 1.5-degree scenarios. Your Company’s resilience has been evaluated under scenarios, and potential pathways for decarbonisation have been considered to ensure compliance with policy mechanisms. Some key risks that may have financial implications for the Company are the introduction of carbon pricing in India; the financing community is expected to strengthen its climate-related financing mechanism; non-compliance to meet 1.5 C pathway requirements; maturity and viable low carbon technology adoption, among other developments. Your Company has committed to achieving net zero by 2050 and is capable of adapting to new risks arising from climate policy changes by focusing on the green energy transition, enhancing the circular economy, diversifying its low-carbon product portfolio, and participating in new technology development and piloting with global companies in association with the GCCA.

Information Technology

This comprises risks related to Information Technology (“IT”) systems, such as data integrity and physical assets. Your Company deploys IT systems, including ERP, SCM, Data Historian, and Mobile Solutions, to support its business processes, communications, sales, logistics, and production. Risks could primarily arise from the unavailability of systems and/or loss or manipulation of information. To mitigate these risks, your Company uses backup procedures and stores information at two different locations. Systems are upgraded regularly with the latest security standards. For critical applications, security policies and procedures are updated periodically, and users are educated on adherence to the policies

to eliminate data leakages. Your Company is also in the process of beefing up information security around Plant Production Equipment.

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Talent Management

Your Company’s growth has been driven by its ability to attract and retain top-quality talent while effectively engaging them in the right jobs. The risks in talent management are mitigated by following a policy of being an employer of choice and instilling a sense of belonging. Specialised training courses are adopted to enhance and reskill employees to prepare them for future roles and create a talent pipeline.

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Geopolitical Tension

The rising fuel prices in the wake of geopolitical tensions have had an adverse impact on the cost of manufacturing cement owing to increased raw material, fuel, and energy costs. For your Company’s business, raw material, fuel, and logistics account for a major share of the manufacturing cost. The anticipated rise in the procurement of raw materials and high consumption of energy is likely to lead to the need to prioritise local dependence for raw material and energy fulfilment in order to mitigate the disruption caused due to such global geopolitical tension.

Internal Control Systems and their Adequacy

Your Company has put in place adequate internal control systems that are commensurate with the size of its operations. Policies and procedures related to internal control systems are designed to ensure sound management of your Company’s operations, safekeeping of its assets, optimal utilisation of resources, reliability of its financial information, and compliance. Clearly defined roles and responsibilities have been institutionalised, and systems and procedures are periodically reviewed to keep pace with the growing size and complexity of your Company’s operations.

Directors

Retiring by rotation and continuing as Director

In accordance with the provisions of the Act and Articles of Association of your Company, Mrs. Rajashree Birla (DIN: 00022995) retires by rotation, and being eligible, offers herself for re-appointment.

Further, in terms of Regulation 17(1A) of the Listing Regulations, no listed Company shall appoint or continue the appointment of a Non-executive Director, who has attained the age of 75 years, unless a special resolution is passed to that effect. Mrs. Birla having attained the age of 75 years, resolution seeking her re-appointment and continuation as Director forms part of the Notice convening the AGM.

Meetings of the Board

Your Company’s Board of Directors met six times during the year to deliberate on various matters. The meetings were held on 6^th April, 2022; 29^th April, 2022; 2^nd June, 2022; 22^nd July, 2022; 19^th October, 2022; and 21^st January, 2023. Additional details relating to the meetings of the Board of Directors are provided in the Report on Corporate Governance, which forms part of this Report.

Your Company has the following Board-level Committees, established in compliance with the requirements of the business and relevant provisions of applicable laws and statutes:

• Audit Committee

• Nomination, Remuneration, and Compensation Committee

• Stakeholders’ Relationship Committee

• Corporate Social Responsibility Committee

• Risk Management and Sustainability Committee

• Finance Committee

Details with respect to the composition, terms of reference, number of meetings held, etc. of the above Committees are included in the Report on Corporate Governance, which forms part of this Report.

Independent Directors

Your Company’s Independent Directors have submitted requisite declarations confirming that they continue to meet the criteria of independence as prescribed under Section 149(6) of the Act and Regulation 16(1)(b) of the Listing Regulations. The Independent Directors have also confirmed that they have complied with the provisions of Schedule IV of the Act and your Company’s Code of Conduct.

Your Company’s Board is of the opinion that the Independent Directors possess requisite qualifications, experience, and expertise in industry knowledge; innovation; financial expertise; information technology; corporate governance; strategic expertise; marketing; legal and compliance; sustainability; risk management;

human resource development and general management, and they hold the highest standards of integrity. All Independent Directors of your Company have registered their name in the data bank maintained with the Indian Institute of Corporate Affairs, Manesar, in terms of the provisions of the Companies (Appointment and Qualification of Directors) Rules, 2014.

Formal Annual Evaluation

The evaluation framework for assessing the performance of your Company’s Directors comprises of contributions at meetings and strategic perspective or inputs regarding the growth and performance of your Company, among others. The NRC Committee and the Board have laid down the manner in which formal annual evaluation of the performance of the Board, its Committees, and individual Directors are to be made. Separate evaluation forms are circulated to individual Directors for evaluation of the Board; its Committees; Independent Directors; NonExecutive Directors; Executive Directors; and the Chairman of your Company. The process broadly comprises:

Board and Committee Evaluation

Evaluation of the Board as a whole and the Committees is done by individual Directors. These are collated for submission to the NRC Committee and feedback to the Board.

Independent/Non-Executive Directors Evaluation

Evaluation done by Board members, excluding the Director who is being evaluated, is submitted to the Chairman of your Company, and individual feedback is provided to each Director. The evaluation of the Chairman/Executive Director, as done by the individual Directors, is submitted to the Chairman of the NRC Committee and subsequently to the Board. The evaluation framework focuses on various aspects of the Board and Committees such as review, timely information from management, and others. Performance of individual Directors are categorised into Executive, Non-Executive, and Independent Directors and is based on parameters such as contribution, attendance, decision-making, action-orientation, external knowledge, etc.

A brief summary of the evaluation exercise

The Board as a whole functions cohesively. The Committees function well in their respective areas, and the recommendations of the Committees are considered and have been accepted by the Board. The Directors bring to the table their knowledge and experience. Independent Directors are rated high in understanding your Company’s business and expressing their views freely during

deliberations. The Non-Executive Directors score well in all aspects. Executive Directors are action-oriented and good in implementing Board decisions. The Chairman leads the Board effectively and encourages active participation and contribution from all the Board members.

The details of the familiarisation programme for Independent Directors are available at https://www. ultratechcement.com/about-us/board-of-directors.

Policy on Appointment and Remuneration of Directors and Key Managerial Personnel and Remuneration Policy

Your Company’s Directors are appointed/re-appointed by the Board on the recommendations of the NRC Committee and approval of the shareholders.

In accordance with the Articles of Association of your Company, provisions of the Act, and the Listing Regulations, all Directors, except the Executive Directors and Independent Directors, are liable to retire by rotation and, if eligible, offer themselves for re-appointment.

The Executive Directors are appointed for a fixed tenure and are not liable to retire by rotation. The Independent Directors can serve a maximum of two terms of five years each, and their appointment and tenure are governed by provisions of the Act and the Listing Regulations.

The NRC Committee has formulated the remuneration policy of your Company, which is provided in Annexure VII of this Report.

Key Managerial Personnel

In terms of the provisions of Section 203 of the Act,

Mr. K. C. Jhanwar, Managing Director; Mr. Atul Daga, Whole-time Director and Chief Financial Officer; and Mr. Sanjeeb Kumar Chatterjee, Company Secretary, are the Key Managerial Personnel of your Company.

Audit Committee

The Audit Committee comprises Mr. S. B. Mathur, Mr. Arun Adhikari, Mrs. Alka Bharucha, and Mr. K. K. Maheshwari, majority of whom are Independent Directors, with Mr. S. B. Mathur being the Chairman. Mr. K. C. Jhanwar, Managing Director, and Mr. Atul Daga, Whole-time Director and Chief Financial Officer, are permanent invitees. Further details relating to the Audit Committee are provided in the Report on Corporate Governance, which forms part of this Report. During the year under review, all recommendations made by the Audit Committee were accepted by the Board.

Vigil Mechanism / Whistle Blower Policy

Your Company has in place a vigil mechanism for Directors and employees to report instances and concerns about

unethical behaviour, actual or suspected fraud, or violation of your Company’s Code of Conduct. Adequate safeguards are provided against victimisation of those who avail of the mechanism, and direct access to the Chairman of the Audit Committee, in exceptional cases, is provided to them.

The vigil mechanism / whistle blower policy is available at https://www.ultratechcement.com/investors/corporate-governance#policies.

Significant and Material Orders passed by the Regulators

Your Company had filed appeals against the orders of the Competition Commission of India (“CCI”) dated 31^st August, 2016 (penalty of ''1,449.51 crores) and 19^th January, 2017 (penalty of ''68.30 crores). Upon the National Company Law Appellate Tribunal (“NCLAT”) disallowing its appeal against the CCI order dated 31^st August, 2016, your Company filed an appeal before the Hon’ble Supreme Court, which has, by its order dated 5^th October, 2018, granted a stay against the NCLAT order. Consequently, your Company has deposited an amount of ''144.95 crores, equivalent to 10% of the penalty of ''1,449.51 crores. Your Company, backed by legal opinions, believes that it has a good case in both the matters, and accordingly, no provision has been made in the accounts.

Auditors

Statutory Auditors

Pursuant to the provisions of Section 139 of the Act and the Companies (Audit and Auditors) Rules, 2014, M/s. BSR & Co. LLP, Chartered Accountants, Mumbai (Registration No: 101248W/W-100022) and M/s. KKC & Associates LLP, Chartered Accountants (formerly Khimji Kunverji &

Co. LLP), Mumbai (Registration No: 105146W/W100621) have been appointed as Joint Statutory Auditors of your Company for a second term of five years until the conclusion of the 25^th and 26^th AGM respectively.

In accordance with the provisions of the Act, the appointment of Statutory Auditors is not required to be ratified at every AGM.

The observations made in the Auditor’s Report are selfexplanatory and therefore, do not call for any further comments under Section 134(3)(f) of the Act.

Cost Auditors

The Cost Accounts and records as required to be maintained under Section 148(1) of the Act are duly made and maintained by your Company.

In terms of the provisions of Section 148 of the Act read with the Companies (Cost Records and Audit) Rules,

2014, the Board of Directors of your Company have, on the recommendation of the Audit Committee, appointed M/s. D. C. Dave & Co., Cost Accountants, Mumbai and M/s. N. D. Birla & Co., Cost Accountants, Ahmedabad, to conduct the Cost Audit of your Company for the financial year ending 31^st March, 2024, at a remuneration as mentioned in the Notice convening the AGM.

As required under the Act, the remuneration payable to the Cost Auditors must be placed before the Members at a general meeting for ratification. Hence, a resolution relating to the same forms part of the Notice convening the AGM.

Secretarial Auditors

In terms of the provisions of Section 204 of the Act read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board had appointed M/s. Makarand M Joshi & Co., Company Secretaries, as Secretarial Auditors for conducting a Secretarial Audit of your Company for the financial year ended 31^st March, 2023.

The report of the Secretarial Auditor is provided in Annexure VIII, which does not contain any qualification, reservation, or adverse remark.

Compliance with Secretarial Standards

Your Company is compliant with the Secretarial Standards specified by the Institute of Company Secretaries of India (“ICSI”). Your Company has complied with all applicable provisions of Secretarial Standard-1 and Secretarial Standard-2 relating to ‘Meetings of the Board of Directors’ and ‘General Meetings’ respectively, issued by the ICSI.

Annual Return

In terms of the provisions of Section 92 and Section 134 of the Act read with Rule 12 of the Companies (Management and Administration) Rules, 2014, the Annual Return is available at https://www.ultratechcement.com/investors/ financials.

Other Disclosures

• No material changes and commitments affected the financial position of your Company between the end of the financial year and the date of this Report.

• Your Company has not issued any shares with differential voting rights.

• There was no revision in the financial statements.

• There has been no change in the nature of the business of your Company.

• Your Company has not issued any sweat equity shares.

Disclosures as per the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 (“POSH Act”):

Your Company has adopted zero tolerance for sexual harassment in the workplace and has formulated a policy on the prevention, prohibition, and redressal of sexual harassment in the workplace in line with the provisions of the POSH Act and the rules framed thereunder, for prevention and redressal of complaints of sexual harassment in the workplace. Your Company has complied with provisions relating to the constitution of the Internal Committee under the POSH Act. During the year under review, your Company received six complaints of sexual harassment, of which for two complaints, there was no evidence of harassment, and two complaints have been resolved. Investigations are continuing for the remaining two complaints.

Cautionary Statement

Statements in the Directors’ Report and the Management Discussion and Analysis describing your Company’s objectives, projections, estimates, expectations, or predictions may be ‘forward-looking statements’ within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could make a difference to your Company’s operations include global and Indian demand-supply conditions, finished goods prices, feed stock availability and prices, cyclical demand

and pricing in your Company’s principal markets, changes in government regulations, tax regimes, economic developments within India and the countries within which your Company conducts business, geopolitical tensions, risks related to an economic downturn or recession in India, and other factors such as litigation and labour negotiations. Your Company is not obliged to publicly amend, modify, or revise any forward-looking statements on the basis of any subsequent development, information, or events, or otherwise.

Acknowledgement

Your Directors express their deep sense of gratitude to the banks, financial institutions, stakeholders, business associates, and central and state governments for their support, and look forward to their continued assistance in the future. Your Directors thank employees for their contribution and applaud them for their superior levels of competence, dedication, and commitment to your Company.

For and on behalf of the Board

Kumar Mangalam Birla

Chairman (DIN: 00012813)

Mumbai,

28^th April, 2023

---

Mar 31, 2022

Your Directors present the 22^nd Annual Report together with the audited accounts of your Company for the year ended 31^st March, 2022.

OVERVIEW AND THE STATE OF YOUR COMPANY’S AFFAIRS

The International Monetary Fund (“IMF”) lowered its global growth forecast by 0.8 percentage points to 3.6%, as inflation rises and supply chains continue to be in disarray. With ongoing supply chain disruptions and high energy prices continuing in 2022, inflation is expected to remain elevated for an extended period of time, and is likely to come down only gradually as supply - demand imbalances wane and the effects of monetary policy responses in major economies kick in.

Towards the end of FY22, the war in Ukraine and subsequent sanctions that disrupted global commodity markets and supply chains further aggravated the situation. Further more, the frequent and wide-ranging lockdowns in China - including in key manufacturing hubs - have also had a far reaching impact on global supply chains. Other global risks may crystallise as geopolitical tensions remain high.

India is expected to remain the fastest growing major economy over 2021-24, according to the World Bank, the IMF and the Asian Development Bank. The country recorded GDP of 8.7% for FY22, with the industrial sector staging a sharp rebound from a contraction of 7% in FY21. The services sector expanded by 8.2%, owing to the rapid

growth in software and IT-enabled services exports while agriculture and allied sectors grew by 3.9%, with food grain production for the kharif season at a record level of 150.5 million tonnes.

The recent times have put to test the resilience of health systems, economies, governments across the globe in face of the pandemic. With the pandemic continuing to evolve, the need for an effective global health strategy has never been so pronounced. Worldwide access to vaccines, tests, and treatments is essential to reduce the risk from other COVID-19 variants.

Since the onset of the COVID-19 pandemic in March 2020, monetary policies have been geared towards mitigating the adverse impact of the unprecedented demand and supply-side shocks inflicted on the economy. This, in turn, led to an overall stable economic environment. Several high frequency indicators, such as electricity consumption, PMI manufacturing, exports, and e-way bill creation,

GST collections reflect this. This bodes well for the Indian economy in 2022-23, barring any geopolitical and economic surprises.

Cement Industry FY22

The first half of FY22 witnessed a sharp recovery in demand, supported by the low base of the pandemic-hit H1FY21. However, H2FY22 was impacted as the demand for cement declined due to unexpected rains in different parts of the country, ban on construction activities in the National Capital Region (“NCR”) and shortages of labour and sand in the eastern region.

Although the macroeconomic factors around India’s cement industry remain positive and will be driven by a revival in demand, the sector is facing headwinds from a surge in costs. The key cost constituents - coal, pet coke and diesel, have seen a significant escalation in prices.

The increase in diesel prices resulted in an increase in transport and logistics costs, putting further pressure on businesses. These commodity prices are not under the control of any constituent and there is little that the efficiency improvement programs can do to cushion the impact of rising costs.

As per a recent report by a credit rating agency, the Indian cement industry will add 80-100 million tonnes capacity by FY25, driven by increased spending on housing and infrastructure. With the Union Budget 2022-23 providing higher allocation for infrastructure, affordable housing and road projects, the cement industry is poised for a volume surge. Further, the Union Government’s thrust on developing and improving public infrastructure (roads, highways, metros and railways, airports, ports, logistics) through projects like PM GatiShakti, National Infrastructure Pipeline (“NIP”), Urban Rejuvenation Mission: AMRUT and Smart Cities Mission is likely to boost cement demand. Demand for affordable houses, with ticket size <'' 4050 lakhs, is expected to rise in Tier 2 and 3 cities. The affordable rental housing scheme, which is a sub-scheme under the Pradhan Mantri Awas Yojana (“PMAY”), is also likely to drive demand for cement in low-cost housing.

Given its PAN India presence, your Company has the advantage to cater to demand across the country. This coupled with its focus on controlling costs, conserving cash, advancing employee well-being and sustainability, makes your Company well placed to tide over the

uncertainties arising out of the pandemic and deliver a robust performance.

BUSINESS PERFORMANCE

Production and capacity utilisation (grey cement)

Particulars	FY22	FY21	% change
Installed capacity in India (MTPA)	114.55	111.35	2.87
Production (MMT)	86.98	79.70	9.13
Capacity Utilisation	77%	71%	6

MTPA - Million Metric Tonnes Per Annum;

MMT- Million Metric Tonnes

Cement production in FY22 was higher by 9% at 86.98 million tonnes as compared to FY21 while capacity utilisation was at 77% as against 71%.

Sales volume

(Figures in MMT)
Particulars	FY22	FY21	% change
Grey Cement - India	87.25	80.18	8.8
Grey Cement - Overseas	4.93	4.90	4.8
White Cement	1.46	1.32	11.2
Others	0.35	-	-
Total Sales Volume	93.99	86.42	8.8

Domestic sales volume registered a growth of 9% in FY22. Cement consumption started improving on the back of consistent rural demand and pick-up in infrastructure activities.

('' in crores)
	Standalone		Consolidated
¦	FY22	FY21	FY22	FY21
Net Turnover	49,729	42,677	51,708	44,239
Domestic	49,479	42,363	49,528	42,264
Exports	250	314	2,180	1,975
Other Income	1,546	1,300	1,399	1,221
Total Expenditure	39,727	32,224	41,084	33,158
Profit before Interest, Depreciation and Tax (PBIDT)	11,548	11,754	12,022	12,302
Depreciation	2,457	2,434	2,715	2,700
Profit before Interest and Tax (PBIT)	9,091	9,319	9,307	9,602
Interest	798	1,259	945	1,486
Profit before Impairment and Tax Expenses / share in profit of Associates	8,293	8,060	8,363	8,116
Rates and Taxes	-	(164)	-	(164)
Impairment on Advances Given	-	-	-	(97)
Share in Profit / (Loss) of Associates and Joint Venture (net of tax)	-	-	2	2
Profit before Tax Expenses	8,293	7,896	8,364	7,858
Normalised Tax Expenses	2,744	2,554	2,708	2,539
Reversal of Tax Provision of Earlier Years	(1,518)	-	(1,518)	-
Profit after Tax	7,067	5,342	7,174	5,319
Profit Attributable to Non-controlling Interest	-	-	(10)	(1)
Profit Attributable to Owner of the Parent	-	-	7,184	5,320

Note: In this Report, the figures for the previous year have been regrouped/rearranged wherever necessary to confirm to the current period’s classification to comply with the requirements of the amended Schedule Ill to the Companies Act, 2013.

FINANCIAL PERFORMANCE

Net Turnover

Your Company’s Net Turnover at '' 49,729 crores was 17% higher than the previous year.

Other Income

Other income rose marginally, mainly on account of greater government grants as compared to the previous year.

Operating Profit (PBIDT) and Margin

PBIDT at '' 11,548 crores was 1.7% lower than the previous year. Lower operating margin was attributable to higher input costs, partly offset by volume growth and better sales realisations.

Cost Highlights

(i) Energy Cost

Overall energy cost increased by 31% from '' 950/t to '' 1,240/t mainly due to higher fuel prices.

(ii) Input Material Cost

Raw material cost rose from '' 504/t to '' 531/t as a result of increase in additive and fly ash prices. Increase in diesel prices impacted inbound transportation, resulting in higher raw material cost. Your Company is continuously working on improving the share of blended and premium products in its product mix, which is expected to result in an improvement in overall profitability.

(iii) Freight and Forwarding Expenses

Logistics cost increased marginally from '' 1,158/t to '' 1,214/t, due to increase in diesel cost. Reduction in lead distance mainly on account of a change in the market mix and synergies arising out of the integration of acquired assets aided in lowering the impact of rising diesel costs.

Employee Costs

Employee cost increased to '' 2,359 crores as compared to '' 2,182 crores in the previous year, primarily due to the annual increments.

Depreciation

At '' 2,457 crores, depreciation was higher by '' 23 crores, on account of fewer assets being capitalised during the year.

Finance Cost

Repayment of borrowings led a decrease in finance cost from '' 1,259 crores to '' 798 crores.

Credit Rating

Your Company has adequate liquidity and a strong balance sheet. CRISIL and India Ratings and Research reaffirmed their credit rating as CRISIL AAA / Stable and IND AAA / Stable for Long Term and CRISIL A1 and IND A1 for Short Term, respectively. This is a testament of your Company’s sound financial management as well as its ability to service financial obligations in a timely manner.

Your Company has also obtained its credit rating for its foreign currency bond issuances from Fitch and Moody’s and has been rated by them as BBB- and Baa3, respectively.

Income Tax

Normalised income tax expenses increased in line with increase in taxable income.

Net Profit

Normalised Profit after Tax increased by 3.9% from '' 5,342 crores to '' 5,549 crores.

Significant changes in key financial ratios, along with detailed explanations:

Particulars	FY22	FY21	% Change
Debtors Turnover (Days)	18	18	-
Inventory Turnover (Days)	33	32	(1)
Interest Coverage Ratio	12.72	7.20	77
Current Ratio	1.30	1.77	27
Debt Equity Ratio (Gross)	0.20	0.40	50
Debt Equity Ratio (Net)	0.07	0.08	12
Operating Profit Margin (%)	22	26	(14)
Net Profit Margin (%)	11.2	12.5	(11)
Return on Net Worth (%)	11.3	12.3	(9)
Return on Capital Employed (ROCE) (%)	14.4	14.4	-
Earnings per Share (EPS)	192	185	4

Detailed explanation of ratios

(i) Debtors Turnover (Days) is used to quantify a company’s effectiveness in collecting its receivables or money owed by customers. The ratio shows how well a company uses and manages the credit

it extends to customers. The ratio is calculated by dividing average trade receivables by average per day turnover.

(ii) Inventory Turnover (Days) represents the average number of days a company holds its inventory before selling it. It is calculated by dividing average inventory by average per day turnover.

(iii) Interest Coverage Ratio measures how many times a company can cover its current interest payment with its available earnings. It is calculated by dividing PBIT by finance cost. Your Company’s Interest Coverage Ratio improved by 77% over the previous year mainly on account of lower interest outgo as loans were repaid during the years.

(iv) Current Ratio is a liquidity ratio that measures a company’s ability to pay short-term obligations or those due within one year. It is calculated by dividing the current assets by current liabilities (excluding current borrowings).

(v) Debt Equity Ratio is used to evaluate a company’s financial leverage. It is a measure of the degree to which a company is financing its operations through debt versus wholly-owned funds. It is calculated

by dividing a company’s total liabilities by its shareholder’s equity. Your Company’s Debt Equity Ratio (Net) has improved by 50% mainly on account of reduction in Net Debt during the year.

(vi) Operating Profit Margin (%) is a profitability or performance ratio used to calculate the percentage of profit a company generates from its operations. It is calculated by dividing the PBIDT (excluding Other Income) by turnover. Your Company’s Operating Profit Margin decreased by 3.7% mainly on account of higher costs and partly set-off by higher volume and higher realisations during the year.

(vii) Net Profit Margin (%) is equal to how much net income or profit is generated as a percentage of revenue. It is calculated by dividing the profit for the year by turnover. Your Company’s Net Profit Margin decreased by 1.4% mainly on account of higher costs, and partly set-off by higher volume, lower interest outgo and higher realisations during the year.

(viii) Return on Net Worth (“RONW”) is a measure of profitability of a company expressed in percentage.

It is calculated by dividing Net Profit from continuing operations for the year by average Net Worth during the year.

(ix) Return on Capital Employed (“ROCE”) is a financial ratio that measures a company’s profitability and

the efficiency with which its capital is used. In other words, the ratio measures how well a company is generating profits from its capital. It is calculated by

dividing profit before interest, exceptional items and tax by average capital employed during the year.

(x) Earnings Per Share (“EPS”) is the portion of a company’s profit allocated to each share. It serves as an indicator of a company’s profitability. It is calculated by dividing profit for the year by weighted average number of shares outstanding during the year. For your Company, the EPS improved on account of increase in Net Profit by 3.9% over that of the previous year.

Cash Flow Statement

('' in crores)
	FY22	FY21
SOURCES OF CASH
Cash from Operations	9,237	9,569
Non-operating Cash Flow	286	172
Proceeds from Issue of Share Capital	4	7
(Increase) / Decrease in Working Capital	(567)	1,979
Total	8,960	11,728
USES OF CASH
Net Capital Expenditure	5,422	1,724
(Redemption) / Increase in Investments	(5,925)	7,433
Repayment of Borrowings (net)	7,360	891
Repayment of Lease Liability including Interest thereof	160	121
(Issue) / Sale of Treasury Shares (net)	83	(7)
Interest	838	1,213
Dividend	1,065	375
Total	9,002	11,749
Increase / (Decrease) in Cash & Cash Equivalents	(42)	(21)

Sources of Cash

Cash from Operations

Cash from operations was lower compared to the previous year due to rise in costs, which was partly set-off by higher volume and sales realisation.

Non-Operating Cash Flow

Cash from other activities was higher due to increased interest income on bank deposits and intercorporate deposits.

Increase in Working Capital

Increase in working capital is attributed to increase in inventories and trade receivables on account of inflationary impact on fuel inventory and higher sales respectively.

Uses of Cash

Net Capital Expenditure

Your Company spent '' 5,422 crores on various capex during the year, primarily towards growth and maintenance capex as well as Waste Heat Recovery Systems.

Decrease in Investments

Your Company’s liquid investment was used for the repayment of borrowings.

Repayment of Borrowing

In line with its endeavour to maintain optimal capital structure, your Company repaid high-cost, long-term debt amounting to '' 7,531 crores.

The loan repayments have been done out of free cash flows that your Company has generated during the year. The aforesaid steps have resulted in improved Net Debt / Equity ratio and Net Debt / EBITDA ratio.

Transfer to General Reserves

Your Company proposes to transfer an amount of '' 5,000 crores to the General Reserves.

DIVIDEND

Your Directors recommended a dividend of '' 38 per equity share (as compared to '' 37 per equity share in the previous year) of '' 10 each for the year ended 31^st March, 2022. The recommended dividend is in line with your Company’s dividend policy, which is given in Annexure I of this Report and is also available on your Company’s website.

In terms of the provisions of the Finance Act, 2020, dividend shall be taxed in the hands of shareholders at applicable rates of tax and your Company shall withhold tax at source appropriately.

Unclaimed dividend for the year ended 31^st March, 2014, aggregating to '' 1.40 crores has been transferred to the Investor Education and Protection Fund (“IEPF”). Your Company has also credited to the IEPF set up by the Government of India, equity shares in respect of which dividend had remained unpaid / unclaimed for a period of seven consecutive years within the timelines laid down by the Ministry of Corporate Affairs, Government of India. Unpaid/unclaimed dividend for seven years or more has also been transferred to the IEPF, pursuant to the requirements under the Companies Act, 2013 (the “Act”).

DIRECTORS’ RESPONSIBILITY STATEMENT

The audited accounts for the year under review are in conformity with the requirements of the Act and the Indian Accounting Standards. The financial statements reflect fairly the form and substance of transactions carried out during the year under review and reasonably present your Company’s financial condition and results of operations.

Your Directors confirm that:

• In the preparation of the Annual Accounts, applicable accounting standards have been followed along with proper explanations relating to material departures,

if any.

• The accounting policies selected have been applied consistently, and judgments and estimates are made that are reasonable and prudent to give a true and fair view of the state of affairs of your Company as on 31^st March, 2022, and of the profit of your Company for the year ended on that date.

• Proper and sufficient care has been taken for the maintenance of adequate accounting records

in accordance with the provisions of the Act for safeguarding the assets of your Company and for preventing and detecting frauds and other irregularities.

• The Annual Accounts of your Company have been prepared on a going concern basis.

• Your Company had laid down internal financial controls and that such internal financial controls are adequate and were operating effectively.

• Your Company has devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

relating to corporate governance. The compliance report is provided in the Corporate Governance section of this Integrated Annual Report. The Auditor’s Certificate on compliance with the conditions of corporate governance forming part of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“Listing Regulations”) is provided in Annexure II of this Report.

EMPLOYEE STOCK OPTION SCHEMES

ESOS-2013

The Nomination, Remuneration and Compensation Committee (“the NRC Committee”) allotted 17,449 equity shares of '' 10 each of your Company upon exercise of stock options and Restricted Stock Units (“RSUs”) by the grantees.

ESOS-2018

During the year, the NRC Committee:

• Granted 63,684 stock options at an exercise price of '' 7,424.70 per stock option, exercisable into the same number of equity shares of '' 10 each, and 18,869 RSUs at an exercise price of '' 10 each on 22^nd July, 2021.

• Granted 33,525 stock options at an exercise price of '' 7,269.10 per stock option, exercisable into the same number of equity shares of '' 10 each, and 8,538 RSUs at an exercise price of '' 10 each on 27^th October, 2021.

• Vested 38,855 stock options and 37,537 RSUs to eligible employees, subject to the provisions of ESOS - 2018, statutory provisions as may be applicable from time to time and the rules and procedures set out by your Company in this regard.

Your Company transferred 35,988 equity shares during the year upon receipt of applications from some option grantees for the transfer of equity shares of your Company in their account, from the Trust account, which also include 1,043 equity shares pending for transfer for the year ended 31^st March, 2022.

Your Company’s current expansion programme is on track and estimated to reach completion by the end of FY23.

CAPITAL EXPENDITURE PLAN

Your Company’s current expansion programme is on track and estimated to reach completion by the end of FY23.

During the year, your Company commissioned cement capacity of 3.2 MTPA at the following locations, which is the first phase of the 19.5 MTPA capacity expansion announced in December 2020:

• Patliputra Cement Works, Bihar - Additional cement capacity of 0.6 MTPA commissioned, taking the Unit’s capacity to 2.5 MTPA.

• Dankuni Cement Works, West Bengal - Additional cement capacity of 0.6 MTPA commissioned, taking the Unit’s capacity to 2.2 MTPA.

• Line II of the Bara Grinding Unit, Uttar Pradesh — it’s cement capacity stands at 4 MTPA. Line I was earlier commissioned in January 2020.

This additional capacity will help your Company service the increasing demand for cement in the Eastern and Central regions of India.

Your Company commenced operations from its 7^th bulk terminal at Kalamboli, Navi Mumbai. The other 6 are located at Cochin in Kerala; Mangalore and Doddaballapur in Karnataka; Uran and Pune in Maharashtra and Shankarpalli in Telangana. With a capacity to handle ~1.2 MTPA cement and considering the large infrastructure development projects in and around Mumbai, the bulk terminal will strengthen your Company to further increase its sales and distribution of cement in bulk. This will effectively help in reducing freight cost, with increase in the usage of rail transportation. For your Company, this is one more step towards reducing carbon emissions and driving sustainable growth.

The Board, further approved capex of '' 12,886 crores towards increasing capacity by 22.6 MTPA with a mix of brownfield and greenfield expansion. This would be achieved by setting-up integrated and grinding units as well as bulk terminals. The additional capacity will be created across the country. Commercial production from these new capacities is expected to go on stream in a phased manner by FY25.

With these expansions, your Company’s total grey cement manufacturing capacity will stand augmented to 159.25 MTPA, globally.

CORPORATE GOVERNANCE

Your Directors reaffirm their commitment to good corporate governance practices. During the year under review, your Company was compliant with the provisions

In terms of the provisions of the Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 (“SEBI SBEB & SE Regulations”) the details of the stock options and RSUs granted under the aforementioned schemes are available on your Company’s website https://www.ultratechcement.com/ investors/financials.

A certificate from the Secretarial Auditors on the implementation of your Company’s Employee Stock Option Schemes will be available at the ensuing Annual General Meeting (“AGM”) for inspection by the Members.

ESOS-2022

The Board of your Company, based on the recommendation of the NRC Committee, approved formulation of a new Scheme viz. ‘UltraTech Cement Limited Employee Stock Option and Restricted Stock Unit Scheme 2022’ (“ESOS-2022”) in terms of the SEBI SBEB & SE Regulations. ESOS-2022 will be adminstered by the NRC Committee through a Trust, viz. the ‘UltraTech Employees Welfare Trust’.

Resolutions seeking your approval for approving ESOS-2022 and related matters form part of the Notice of the AGM.

SHARE CAPITAL

During the year, your Company allotted 17,449 equity shares of '' 10 each to option grantees upon exercise of stock options and RSUs in terms of ESOS-2013. As a result, the paid-up equity share capital of your Company stood at '' 2,88,67,08,470, comprising of 28,86,70,847 equity shares of '' 10 each.

Transfer of unclaimed dividend and shares: The details relating to unclaimed dividend and shares are given in the Corporate Governance section that forms part of this Integrated Annual Report.

AWARDS

Your Company’s constant endeavour to optimise

operational procedures and build greater efficiencies

continue to win recognition and prestigious awards.

Here is a glimpse of some awards received during

the year.

• International Safety Awards 2022 by British Safety Council - Balaji Cement Works;

• Indian Chamber of Commerce Social Impact Award 2022 - Birla White;

• National Award for Excellence in Energy Management 2021, Excellent Energy Efficient Unit -Power Sector - Kotputli Cement Works;

• National Awards for Excellence in Corporate Social Responsibility - Siddhi Cement Works;

• 15 of your Company’s limestone mines have been awarded a five-star rating for sustainable mine management, by the Ministry of Mines and Indian Bureau of Mines. This was awarded for last three years (2017-18, 2018-19 and 2019-20). With a total of 30 such 5-star rating awards, this is the highest number awarded to any company in India for

all major minerals such as bauxite, copper, iron ore, manganese, lead & zinc and limestone. The ratings are based on the adoption of best practices for exhaustive and universal implementation of Sustainable Development Framework in mining.

• Leaders Award - Mega Large Business, Process Sector - This is the highest award in that category by Frost & Sullivan and the Energy and Resources Institute (“TERI”) for the year 2021. The award is

in recognition of your Company’s efforts to build a sustainable business. This award recognises the Sustainability Excellence on People, Purpose, Partnership, and Planet pillars, along with Sustainability Analytics and the Renewable Energy Consumption initiatives of organisations in India.

• One Gold and two Silver trophies for the ‘Chance Na Lo’ campaign at Exchange4Media’s Prime Time Awards. The Gold trophy was conferred under the ‘Best use of influencers’ category. The two Silver trophies were conferred in ‘Best Integrated TV Campaign’ and ‘Best use of TV’ to create brand awareness categories.

RESEARCH AND DEVELOPMENT

Your Company’s Research and Development (R&D) efforts focus on creating advance application value for customers by continuously exploring and incorporating innovative features and functionalities in newer cement and concrete variants. Enhancing customer satisfaction while increasing sustainability is the guiding principle for your Company’s R&D activities.

Devising solutions around themes of reducing water consumption for cement, improved durability of concrete, enhanced environmental performance in terms of reduced green-house emissions and natural resource intensiveness, increasing use of alternative raw materials in cement making have resulted in significant progress in development of new types of cement.

Your Company’s R&D centre is engaged in closely monitoring and incorporating latest developments, digital interventions, and advance techniques in the field of cement-concrete technology in your Company’s product offerings. With this objective, your Company’s R&D is committed to provide comprehensive technological support to your Company’s policy of promoting sustainable construction and development.

Customers, Quality and Cost are the governing attributes of all R&D projects for achieving process optimisation and debottlenecking, raw material conservation and use of alternative fuels and raw material. Towards this objective, your Company is actively developing alternatives for minimising usage of mineral gypsum and development of cost economic grinding additives and new generation chemicals while maintaining targeted product attributes and functionality.

Your Company’s R&D efforts in the ready mix concrete and building products division have resulted in development of new products, viz.

(i) Ultrahigh performance concrete (“UHPC”): For ductile, thin precast concrete panels and repair overlays;

(ii) Concrete for 3D Printing: For emerging use of 3D printers in building construction;

(iii) Antiwashout concrete: For enabling high quality construction during rainy season and in waterlogged situations;

(iv) Corrosion resistant concrete: For longer life of structure by resisting reinforcement corrosion;

(v) High strength Grout: For precision filling of Sonic Pipe;

(vi) Low and high Gun Grade Grout: For easier filling of tie rod holes;

(vii) Machine applied Spray Ready-mix Plaster: For faster completion of plastering work that enables cost and time saving.

As a member of the Global Cement and Concrete Association (“GCCA”), your Company is also part of the Global Cement and Concrete Research Network, formed by the GCCA to accelerate global collaboration on cement and concrete innovation, an important step in taking climate action. The efforts are directed at adopting key trends driving the low-carbon emission initiatives for the Indian cement sector by actively participating in the mission with other partners to keep abreast on innovation trends, latest scientific developments in carbon footprint reduction and identifying potential routes for adopting newer ideas in its sustainability objective with following key areas of interest:

• carbon capture and usage technologies

• alternative calcination technologies in cement manufacturing process

• carbon use in the construction supply chain

• improved recycling of concrete utilisation

• developing alternative SCMs

Your Company is also closely engaged with the Aditya Birla Science and Technology Company Private Limited, the corporate research and development centre for the Aditya Birla Group, for developing technological solutions to model cement process equipment, devising predictive cement quality modelling, CFD Modelling enhancing equipment productivity, using engineering simulations and devising special concrete products.

SUSTAINABILITY

Your Company is steering from the traditional sustainability models to an innovative approach that is consistent with its vision to build a sustainable business. It is also aligned to global goals such as the Paris agreement, and UN’s Sustainable Development Goals (“SDGs”). Your Company is committed to contributing to the protection of the environmental and upliftment of society while also balancing various stakeholder expectations and maintaining its lead ahead of the curve.

Responsible Stewardship: This key pillar facilitates the transition from current legal standards to international standards like International Finance Corporation (“IFC”), the Organisation for Economic Cooperation and Development (“OECD”), the International Standards Organisation (“ISO”), Occupational Health and Safety Advisory Services (“OHSAS”), the Global Reporting

Initiative (“GRI”), the Forestry Stewardship Council and others. The Aditya Birla Group’s Sustainable Business Framework of Policies, Technical Standards, and Guidance Notes help us reach higher standards of performance.

The Group Sustainable Business Framework is currently certified to 14 international standards. The framework has given success with respect to reduction in carbon footprint, energy use, water use, and implementing nature-based solution projects.

Your Company’s commitment to the pledge of ‘World Business Council for Sustainable Development’s Water and Sanitation and Hygiene’ (“WASH”) to provide safe drinking water, sanitation and hygiene across all its operations has resulted in the construction of over 600 new bathrooms, many of these for women and the differently abled. This is a significant initiative towards the wellbeing of people and communities.

Through stakeholder engagement, your Company gains further insights into the potential opportunities and business risks. These are leveraged for enhancing business models, strategies and risk profiles in order to future-proof them and the value chains in the medium to long term, which is beneficial to the stakeholders.

Disclosures and ESG: Your Company has adopted the recommendation of Task Force for Climate related Financial Disclosure (“TCFD”) and has integrated its findings into risk management, business planning and strategy. This year your Company continued consideration of carbon US$ 10 per tCO₂ which has enabled it to consider the impact on environment of project / capex in its evaluation and decision making.

Your Company’s performance in S&P’s Dow Jones Sustainability Index (“DJSI”) improved by 11 points to 79 as per DJSI results released this year. This is a 16% increase from the previous year, and your Company now is ranked 7^th globally in the Construction Material category. This disclosure has helped your Company to benchmark itself against world best companies in sustainability performance and will be using this to identify opportunities to excel in sustainability performance.

Green Initiatives: Your Company has been consistently adopting new technologies that are cleaner and greener. There is constant effort across all plants and processes to become more energy efficient, given your Company’s goal to become better stewards of natural resources.

Climate Change: Your Company has committed to deliver Net Zero Concrete by 2050 or earlier and will work together with value chain partners to accelerate decarbonisation. Further, your Company has joined the Science-Based Targets Initiative and got its targets successfully validated.

Under the SBTi target, your Company aims to achieve 27% reduction in its Scope 1 carbon intensity by 31^st March, 2032 against the carbon emission from March 2017. Your Company has achieved 9.1% of Scope 1 carbon intensity reduction till FY22 from the base year of 2017. In energy efficiency, your Company has overachieved the target set by the Government of India for the first Perform, Achieve and Trade (“PAT”) cycle.

Green Energy: As part of RE100 commitment led by the Climate Group in partnership with CDP, your Company aims to meet 100% of its electricity requirement through renewable sources by 2050. Your Company also continues to increase the use of renewable energy as part of its energy mix and has increased the consumption of RE by more than 30% as compared to previous year.

Circularity: With its thrust on the use of alternative fuels, your Company has been relentlessly striving to reduce consumption of fossil fuels by substituting these with wastes from other industries. These efforts have resulted in around 4.6% of your Company’s fuel requirements being met using alternative fuels. Your Company continues to scale its contribution to the circular economy by utilising 23.6 million tonnes of Alternative Raw Material (“ARM”) as part of its operations. Your Company has reinforced its commitments and has taken further strides towards being a more sustainable business.

Water Positive: Your Company aims to be 5x water positive by 2024, which means that it will replenish five times the amount of water it consumes. The volume of water replenished is ~168% over five-years (from 27.4 million m³ in FY17 to 73.6 million m³ in FY22) as compared to the total volume of water consumed.

Sustainable Products: As part of its continuing initiatives in sustainable growth, your Company has completed Life Cycle Assessment (“LCA”) studies for four products. Your Company is amongst few companies to conduct the LCA study and has used this as input to identify hotspots over the value chain to reduce environmental impact. Your Company has 73 products with GreenPro Certification. This is one of the largest green product portfolios in the building material industry in India. Your Company has also conducted Environment Product Declaration (“EPD”) studies as part of its product stewardship pillar and published its EPD documents for the four major categories of cement.

Other Initiatives: Your Company has embarked on digital transformation during the year that has the potential to decouple emissions and resource use from economic growth as well as making its operations safer and more reliable. Your Company launched its Sustainability

the drivers and transporters, which helps them to further improve delivery experience.

Empowering Internal Stakeholders: Our integrated information hub, Logistics Control Tower (“LCT”), which provides a single version of the truth and end-to-end visibility to logistics, is also extended on mobile phones (“LCT Lite”) to our front-end sales teams, for driving collaboration to improve logistics efficiencies.

Smart Manufacturing: Your Company has accelerated adoption of digital and industry 4.0 technologies in its operations, encouraged by incremental value delivered through various initiatives. Your Company is investing in setting up of cloud infrastructure as a key foundation for smart and connected factories.

Energy Optimisation and Enhanced Productivity:

During the year, your Company focused on scaling up and adopting algorithmic advisory solutions to improve process stability and efficiency across all energy metrics, mainly focusing on increasing alternative fuel consumption and improving WHRS power generation among others. These initiatives were helped and complemented by investments in expert control systems over the last few years.

Other initiatives around digital mining management and optimisation are also underway to realise gains through better operational efficiencies.

Reliable Operations and Process stability: Reliability teams are being empowered by complementing existing preventive procedures with predictive and early alerts generated, using AI platforms.

Your Company has instituted mechanisms to monitor and sustain process stability using combination of software and AI solutions. Through combination of domain knowledge and digital tools, it continues to improve long term process reliability.

Safer Operations: Each employee in your Company is a safety officer. Use of digital tools allow improving effectiveness and collaboration of efforts on safety. Computer vision, AR, VR and other sensors are being adopted or scaled to support safety objectives at the Units.

Empowering Teams: Use of digital solutions for dynamic planning and sourcing of packaging materials is improving central synergies and efficiency. In addition, your Company is working on end-to-end fuel sourcing planning and control platform. The procurement team has adopted ‘procure to pay’ digital platform and is exploring spend analytics solutions to drive efficiency over and above current capabilities.

Culture building program - Project Jagruti and under the program on sustainability awareness sessions, an extensive e-module was launched, reaching more than 5,000 employees.

DIGITALISATION

Your Company’s digital solutions keep customers at the core of innovation to achieve a connected and smart ecosystem. With deep understanding of customers, the teams learn fast, pivot rapidly, leveraging the best possible technologies to design state-of-the-art digital solutions. These solutions provide enhanced customer experience by empowering internal stakeholders and partners, improving efficiencies and driving collaborations amongst teams.

Your Company further enhanced existing solutions and launched new digital solutions for customers, partners and employees.

Customer First: We put customers at the centre of our conversations and continuously innovate to meet their current and evolving needs. Last year, your Company launched UltraTech Trade Connect, an app that provides unparalleled convenience to its channel partners. The app has been well received with a high-level adoption and has become an integral part of daily business operations.

During the year, UltraTech Trade Connect was extended to its Construction Chemicals and Ready-Mix Concrete division, making it a single interface for channel partners. By introducing the app, your Company replaced several paper-based processes, helping save time and improving the speed of operations for customers, partners and internal teams in a sustainable manner

Our Institutional Customers are engines of India’s infrastructure growth. Keeping them in mind, your Company launched an industry-first digital solution - UltraTech Customer Connect. This solution helps customers plan their site operations better, through visibility of supplies and test certificates. The sites can provide electronic proof of delivery (ePOD), and access to finance documents enabling a seamless payment process.

Empowering Partners: Our driver and transport partners are a crucial link for superior delivery experience to customers. The digital solution empower transporters for bidding, bill submission, and faster payments.

To bring driver partners on to the digital ecosystem, your Company launched a future-ready mobile application, Eye-to-track. This multilingual app is convenient for drivers and connects them with customers and transporters. The delivery ratings received from our customers are visible to

Your Company’s Shared Services Centre viz. UltraTech Knowledge Service Centre (“UKSC”), has a strength of 675 people processing payments, performing accounting transactions, ensuring controls and managing tax compliance for all of your Company’s operations. UKSC is a digitally-enabled “Centre of Excellence” which will also serve as a platform to create future finance leaders and a best-in-class knowledge hub.

UKSC currently processes ~1.7 million vendor invoices annually, and maintains 1.25 million customer/vendor master records. This model helps your Company seamlessly absorb accounting work for any new cement capacity expansion.

Collaborating with the information technology and other related functions and leveraging state of the art technology applications, UKSC is currently executing various digital initiatives for people, process, and compliance which will not only make it more efficient but also create business value by creating an Analytics CoE for the future. This digital journey is expected to further accelerate in the coming months, yielding significant benefits for your Company and its stakeholders.

HUMAN RESOURCES

In FY22, your Company continued to witness pandemic-led challenges which included mobility restrictions and consequent attendance at work. Units had controlled entry, regulated movement and assembly to minimise contact and ensure employee safety without adversely impacting operations. Offices allowed minimal entry with most of the employees operating from home.

Your Company continued to focus on employee core connect, engagement, learning and development to build a workplace that is safe engaging and productive. It undertook digitalisation of the entire talent management processes for regular communication. All employees were presented with various learning opportunities to enhance career growth. Learning and Development teams ensured learning of employees and leveraged virtual medium to organise learning sessions for the employees. Wellness sessions dealing with topics related to safety, and health helped create awareness among employees and their families about key areas related to their well-being. Throughout the year, employees remained connected through planned events such as seminars, learning programs and self-learning modules.

Your Company’s employee strength stood at 21,921 as on 31^st March, 2022 (compared to 21,909 in 2021).

SAFETY

To ensure that the organisational objective of “zero harm” gains momentum, your Company undertook the following initiatives under six major elements: Assurance; Contractor safety; Safety inspection; Capability building; Digital intervention and Project safety. This resulted in more than 90% of the manufacturing sites remaining Lost Time Injury (“LTI”) free during the year.

Assurance:

Safety Assurance by using gadget - Virtual third-party safety assessment:

Assurance is one of the key elements of safety management system that helps in identifying discrepancies within the system and addressing them. While on-site safety audits were not possible on account of the pandemic, independent virtual safety assessments were conducted by third-party expert agencies across the manufacturing locations to assess the degree of implementation vis-a-vis requirements of the various safety standards. Prior to assessment, a calibration workshop was organised for the auditors to ensure uniformity and consistency in their approach and to express the expectation out of the exercise. Post assessment, reports were shared with the Units to enable them take corrective measures. Unit-wise compliance of audit findings was reviewed by the OHS Board.

Contractor Safety:

Contractor Connect Initiative (f4‘ ^^t ^mi f):

To correct “at risk” behaviour of a huge size of continuously changing contract workforce, the Unit Head and Functional Head (Technical) of one of the integrated Units established fortnightly virtual connect with contract workmen from other Units, as per rosters prepared and shared in advance. The agenda was to discover any gaps in safety processes through regular conversations with contract workers. Weekly observations were circulated across Units through mailers to encourage safe behaviour at work.

Safety Inspection:

Walk Through Inspection (“WTI”):

To make your Company’s workplaces free from unsafe conditions, WTI has been institutionalised through development of standard inspection checklists for 41 sections (including RMC) and integrating those with the organisational safety management system portal for ease of reporting and analysis.

Pratibimb (“Leaders Connect with employees”) to review Walk Through Inspection:

To review and improve effectiveness of Walk-Through Inspections, each Cluster Head virtually connected with any four employees on a weekly basis. Through this, 16 employees of 4 Units learned about the focus areas and methods for improvement towards workplace safety.

Capability building:

Safety Standard Champions Training:

To build a pool of competent in-house resource, employees across Units were trained on 18 safety standards through virtual “Standard Champions training” programme. This enabled them to further impart training to employees and ensure compliance. 515 employees qualified as standard champions through this program.

Digital intervention:

a. Addressing high-risk operations through augmented process knowledge:

To enhance technical knowledge of employees associated with specific high-risk operations, e-learning modules have been developed and uploaded in the learning management platform. Employees were mandatorily required to complete the

e-learning course which helped them to become fully aware of the processes to prevent any incident.

b. Data analytics:

By integrating mySetu (your Company’s safety portal) with Tableau, your Company’s online reporting platform, in-depth analysis of various leading indicators was carried out and focused action was taken for improvement of identified areas. This resulted in reducing high-risk unsafe conditions related to machine guarding and acts related to procedure violation across Units.

c. “Speech to text” for Walk Through Inspection:

To facilitate line team members in making walk through inspection reports, speech to text feature was added in the process, thereby bringing more ease and comfort. This resulted in substantial reduction of time required for doing the exercise. While the manual method took around one hour, with this intervention, WTI takes only 25 minutes.

d. Virtual inspection using gadget (“Realwear”):

Cluster Heads conducted virtual safety inspection of respective Units by using gadgets (Realwear), identified discrepancies and monitored compliance. This led to reduction in high-risk unsafe conditions relating to housekeeping, electrical safety, work at height.

Project Safety:

To give greater thrust to safe execution of multiple projects going on simultaneously, multilayer monitoring was introduced over and above existing safety management systems. Virtual training on Vishwakarma (project safety guidelines) was imparted to all employees deployed at various project sites. Safety Experts were deployed at Pali, Dhar and Hirmi and rigging and scaffolding experts were deployed at project sites to support safe execution.

CORPORATE SOCIAL RESPONSIBILITY

In terms of the provisions of Section 135 of the Act read with the Companies (Corporate Social Responsibility Policy) Rules, 2014, the Board of Directors of your Company has constituted a Corporate Social Responsibility (“CSR”) Committee chaired by Mrs. Rajashree Birla. Other Members of the Committee are Mrs. Sukanya Kripalu, Independent Director and Mr. K. C. Jhanwar, Managing Director. Dr. (Mrs.) Pragnya Ram, Group Executive President, CSR, Legacy, Documentation & Archives is a permanent invitee to the Committee. Your Company has in place a CSR Policy

which is available at - https://www.ultratechcement.com/ investors/corporate-governance#policies.

Your Company’s CSR activities are focused on Social Empowerment and Welfare, Infrastructure Development, Sustainable Livelihood, Healthcare and Education. Various activities across these segments have been initiated during the year around its plant locations and adjacent villages. During the year, your Company spent '' 96.40 crores on CSR activities and set-off '' 6.60 crores from the excess spent during FY21, aggregating to '' 103 crores, resulting in 2% of the average net profits of your Company during the last three financial years. A report on CSR activities is provided in Annexure III which forms part of this Report.

SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES

The audited financial statements of your Company’s subsidiaries and joint ventures viz. Harish Cement Limited, Gotan Lime Stone Khanij Udyog Private Limited, Bhagwati Lime Stone Company Private Limited, UltraTech Nathdwara Cement Limited (“UNCL”), UltraTech Cement Middle East Investments Limited (“UCMEIL”), UltraTech Cement Lanka (Private) Limited, PT UltraTech Mining Indonesia and PT UltraTech Investments Indonesia and their related information are available for inspection on your Company’s website. Any Member who is interested in obtaining a copy of the audited financial statements of your Company’s subsidiaries may write to the Company Secretary.

During the year ended 31^st March, 2022, UNCL entered into an agreement with Galata Chemicals Holding Gmbh, Germany (“Galata”) for restructuring of 3B Binani Glassfibre SARL (“3B”) as per which Galata along with its affiliates has made necessary payments to UNCL for the purposes of refinancing the loans given to 3B and acquisition of entire shareholding of UNCL in 3B.

UNCL has, inter alia, transferred its entire shareholding in 3B to Galata as on 31^st March, 2022. Consequent to the transaction, 3B has ceased to be a wholly owned subsidiary of UNCL.

UCMEIL acquired 29.79% equity share capital of ‘RAK Cement Co. for White Cement and Construction Materials PSC’, (“RAKWCT’) a company listed on the Abu Dhabi and Kuwait stock exchanges for a consideration of US$ 101.10 million. RAKWCT is engaged in the manufacture and sale of white cement clinker, white cement and construction materials.

This strategic acquisition strengthens your Company’s position in the white cement business in India while also providing access into the GCC and African markets. The

white cement market in India is witnessing robust growth, propelled by demand in white cement-based putty as well as other emerging new applications in coatings and construction secters. The acquisition provides opportunity to tap operational synergies between your Company and RAKWCT, to improve shareholder value apart from exploring cost efficiencies and expansion of markets.

In accordance with the provisions of Section 129(3) of the Act read with the Companies (Accounts) Rules, 2014, a report on the performance and financial position of each of the subsidiaries, joint venture and associate companies is provided in Annexure IV to this Report.

PARTICULARS OF LOAN, GUARANTEE AND INVESTMENT

Details of Loan, Guarantee and Investment covered under the provisions of Section 186 of the Act read with the Companies (Meetings of Board and its Powers) Rules,

2014 are given in Notes forming part of the standalone financial statements.

ENERGY, TECHNOLOGY AND FOREIGN EXCHANGE

Information on conservation of energy, technology absorption and foreign exchange earnings and outgo, required to be disclosed pursuant to Section 134(3)(m) of the Act read with the Companies (Accounts) Rules, 2014, is given in Annexure V to this Report.

PARTICULARS OF EMPLOYEES

Disclosures relating to remuneration and other details as required under Section 197(12), read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are given in Annexure VI. In accordance with the provisions of the aforementioned section, the names and other particulars of employees drawing remuneration in excess of the limits set out in the aforesaid rules form part of this Report. However, in line with the provisions of Section 136(1) of the Act, the Report and Accounts as set out therein, are being sent to all Members of your Company, excluding the aforesaid information. Any Member, who is interested in obtaining these particulars, may write to the Company Secretary.

BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT

The Securities and Exchange Board of India (“SEBI”), in its circular dated 10^th May, 2021, introduced new sustainability related reporting requirements to be reported in the specific format of Business Responsibility and

Sustainability Report (“BRSR”). SEBI, vide the aforesaid circular, has made BRSR mandatory for the top 1,000 listed companies (by market capitalisation) from fiscal 2023, while disclosure is voluntary for fiscal 2022. Your Company has adopted the BRSR voluntarily for FY22 and also publishes a comprehensive Sustainability Report annually, based on GRI standards. The Sustainability Report is available at https://www.ultratechcement.com/ about-us/sustainabilitv/sustainabilitv.

The BRSR forms part of this Integrated Annual Report.

CONTRACT AND ARRANGEMENT WITH RELATED PARTIES

Related party transactions entered into by your Company during the financial year were completely on an arm’s length basis and in the ordinary course of business. There were no material transactions with any related party, as defined under Section 188 of the Act read with the Companies (Meetings of Board and its Powers) Rules,

2014. All related party transactions have been approved by the Audit Committee of your Company and reviewed by it on a periodic basis. The policy on Related Party Transactions, as approved by the Audit Committee and the Board, is available at https://www.ultratechcement.com/ investors/corporate-governance#policies.

The details of contracts and arrangements with related parties of your Company for the financial year ended 31^st March, 2022 is provided in Note No. 38 to the standalone financial statements of your Company.

RISK MANAGEMENT

Risk is an integral and unavoidable component of business. Given the challenging and dynamic environment of your Company’s operations, it is committed to proactively managing risk in accomplishing its ambitious goals. Though risks cannot be eliminated, an effective risk management program ensures that risks are reduced, avoided, mitigated, or shared.

To maintain oversight of your Company’s risks, the Risk Management and Sustainability Committee (“RMS Committee”) of your Company is mandated to review its Enterprise Risk Management Framework (including plan / process), analyse the risks more deeply and define risk mitigation actions, where necessary. Through the Annual Risk Report processes, which are based upon the business environment, operational controls and compliance procedures, your Company aims to assess and prioritise risks, according to their significance and likelihood.

The key risks identified by your Company include economic environment and market demand; inflation and cost of production; legal and compliance with local laws; financial and accounting; environment, climate and sustainability; information technology and talent management. Needless to mention, with the challenges presented by the COVID-19 outbreak, pandemic and epidemic-related business risks have been identified by your Company. Further, the Ukraine war has resulted in geopolitical tension, thereby impacting fuel prices, which would have an adverse impact on the operations of your Company.

The risk horizon considered includes long-term strategic risks, short to medium-term risks as well as single events. The risks are analysed considering likelihood and impact as a basis to determine their management.

Key Business Risks identified by your Company:

Economic Environment and Market Demand

The demand for construction material is fundamentally driven by the economic growth in the country. Economic slowdown and subdued infrastructural development might lead to a slowdown in construction projects, thus leading to a reduction in cement consumption in the country. The growth in construction activity in the country has been slow over the last few years, impacting the cement consumption. In a scenario where incremental capacity addition exceeds incremental cement demand, the government’s push for infrastructure and housing will aid the growth in cement consumption and reduce the overcapacity gap.

The cement industry in India is an aggregation of small and large companies. In such an environment, the risk of protecting market share is optimal. With the expanding capacities of existing players and the emergence of new entrants, competition is a sustained risk. To mitigate this, continuous endeavours to enhance brand equity through innovative marketing activities, enhancement in the product portfolio and value-add services have been the thrust areas for your Company. The engineering expertise of your Company and its emphasis on quality also minimise its risk against market fluctuations considerably.

Inflation and Cost of Production

Your Company faces the risk of inflation and price fluctuations in the cost of coal, pet coke, power, and other fuels since these are market driven. The cement industry is extremely energy intensive, changes in fuel prices can significantly impact production cost. To derisk, your Company has established specific policies

of long deliveries and it continuously optimises its fuel mix and energy efficiency, while exploring the use of alternative fuels.

The procurement of raw materials at an economical cost or of suitable quality faces a high degree of inflationary certainty. Your Company mitigates this risk through the establishment of exhaustive policies for procurement of specific raw materials and stores and those amenable to just in time inventories.

Limestone being the primary raw material required to produce cement, its continuous and long-term availability is critical, particularly under the dynamic regulatory environment. Your Company currently possesses sufficient limestone reserves. Securing additional reserves is critical to address your Company’s expansion plans. Apart from the preservation and extension of existing reserves, a range of measures including strategic sourcing and changing input mix are adopted by your Company to mitigate the risk of unavailability of limestone.

Legal and Compliance

This risk relates to any inadvertently violated laws covering business conduct.

The country’s regulatory framework is ever-evolving and the risk of non-compliance and penalties may increase for your Company, leading to reputational risks.

A comprehensive risk-based compliance programme, involving inclusive training and adherence to the Code of Conduct, is thus institutionalised by your Company.

As a step to mitigate the legal and compliance risk, your Company’s management encourages its employees to place their reliance on professional guidance and opinion to discuss the impact of any changes in laws and regulations to ensure total compliance. Periodic and ad-hoc reporting to various internal committees for oversight ensures the effectiveness of such a programme.

Financial

This comprises the risk of exposure to interest rates, foreign exchange rates and commodity price fluctuations. The risk management strategy is to identify the risk exposure, measure and evaluate the financial impact, and decide on steps to mitigate the risks together with ensuring regular monitoring and reporting.

With the objective of minimising risks arising from uncertainty and volatility of foreign exchange fluctuations, an elaborate financial risk management policy is followed for every transaction undertaken in foreign currency. Your Company’s policies to counter such risks are reviewed

periodically and constantly aligned with the financial market practices and regulations.

Changing laws, rules, regulations and standards relating to accounting, corporate governance, public disclosure and listing regulations are generating newer and unforeseen risks for companies. The new or changed laws, regulations and standards may lack precedence and are subject to varying interpretations. Their application in practice may evolve as new guidance is provided by regulatory and governing bodies. Thus, your Company maintains a high standard of corporate governance and public disclosure to de-risk itself from such dynamic regulatory changes.

Environment

This comprises risks associated with environmental pollution through the discharge of waste and GHG emissions, which may cause damage to the local ecology and environment.

Various initiatives such as sewage treatment plants, recycling of industrial wastewater, bag-house, WHRS and extensive plantation and creation of green belts have been undertaken by your Company to de-risk and protect the environment.

Apart from a targeted reduction of CO₂ emissions (Scope 1 by 27% and Scope 2 by 69% by 2032), your Company’s risk mitigation strategy includes a change in product mix, energy efficiency, use of alternative fuels and raw materials, WHRS and the increased use of renewable energy. Your Company has also adopted measures such as rainwater harvesting and water recharge that help it overcome challenges related to water availability.

Climate and Sustainability

Sustainability-related climate change risks and opportunities are assessed in line with your Company’s risk management policy and have been integrated in its multi-disciplinary Risk Management Framework. Classified as ESG risks, these relate to energy, emissions and water, among other issues. Sectoral review and relevant stakeholder interactions are conducted regularly to develop a list of climate-related risks specific to business and location. Identified risks are then mapped to your Company’s risk matrix, which classifies the risk according to its impact and likelihood.

Prioritised climate risks are managed through Unit-level committees. Unit and Functional Heads are responsible for identifying risks, developing mitigation plans, updating and reviewing their respective risk registers as per the defined process. The consolidated risk report is submitted to the Board-level committee.

Scenario based analysis has been conducted for physical as well as transition risks. For physical risks, four scenarios have been considered that are linked to Representative Concentration Pathway (“RCP”), which is a GHG concentration trajectory adopted by the Intergovernmental Panel on Climate Change (“IPCC”). These include RCP 8.5, RCP 6, RCP 4.5 and RCP 2.6 scenarios. The pathways describe four possible climate futures on the basis of the volume of GHG emitted in the coming years. All four scenarios have been considered to assess the impact of temperature and precipitation changes in areas where your Company operates. Maximum possible impact has been considered based on projections up to the year 2100.

Your Company has conducted risk assessment exercise to identify climate-related physical and transition risks. Risks are assessed based on the defined time horizons over short term (0-3 years), medium term (3-10 years) and long term (10-30 years). The categorisation of risks into physical and transition risks has been done in alignment with TCFD guidelines.

In case of assessing the impact of transition risks on your Company, scenario analysis has been conducted in alignment with ETP B2DS and IPCC 1.5-degree scenarios. The potential impact of the evolution of climate policies has been considered under both scenarios to assess the resilience of your Company, as well as the potential pathways for decarbonisation so that it can comply with policy mechanisms such as emission trading schemes.

Product mix is an important variable in managing climate-related risks. Your Company is not only focused on developing sustainable products but also aims to embed sustainability in the entire construction value chain. As many as 73 UltraTech products are certified by GreenPro, the largest Ecolabel in India, which enables end users in the built environment sector to choose sustainable materials for reducing the environmental impact during construction, operation as well as use phase of buildings.

Your Company’s approach is highlighted below:

• Enhancing resilience of the building sector: Extreme weather events due to climate change, such as floods, cyclones and heat waves, may impact the building sector considerably. To mitigate the impact of physical risks on the building sector and society at large, your Company is working with the built environment sector to make buildings more resilient to climate change effects.

• Your Company is committed to developing products and solutions that reduce carbon emissions throughout the lifecycle of the built environment sector. It offers building products and solutions that lead to optimisation

of concrete mixing, improving overall quality and strength of construction, and thus alleviating the impact of physical risks.

• Your Company has introduced many new products that are designed to make buildings more resilient to dampness.

This also leads to reduced wear and tear of buildings, increasing longevity, thereby reducing the use of input materials and natural resources during their entire lifetime.

Physical risks

Acute physical risks: Such risks can potentially impact sales volumes because of disruption of business operations due to interruption in supply chain, rise in logistics costs, power outage, infrastructure damages and manpower shortage among other aspects.

Few sites of your Company have been exposed to extreme weather events during the last few years, such as floods and cyclones. In the last three years, sites located in Bhubaneswar, Chennai and Gujarat have been impacted due to extreme weather events. Some of your Company’s sites are in geographies that are susceptible to periodic heat waves.

However, your Company has implemented several measures to mitigate the impact of physical risks.

Given its pan-India presence, your Company’s sites are highly diversified geographically. If a manufacturing plant faces business disruption or shutdown due to extreme weather events, alternative plants in other locations can serve the market need. Also, its wide logistics network, with warehouses across different parts of the country, enable flexibility in your Company’s operations.

Annual weather forecasts are considered in supply chain decisions in order to mitigate the risk of delays in sourcing of fuels. Your Company has developed strategic partnerships with geographically diverse global vendors for fuels. Regular monitoring of environmental, political and regulatory developments, coupled with flexible contracts mitigate risks of supply chain disruptions. Inventory norms for fuels are periodically reviewed considering probability and expected impact of likely supply chain disruptions due to above developments. Insurance coverage is in place to protect against damages to business assets or loss of material in warehouses due to extreme weather events.

Your Company has not witnessed any impact of heat waves on its facilities. Nevertheless, it ensures that its employees are protected during peak summer days. It is committed to the WASH Pledge, ensuring adequate availability of safe drinking water to workers. Warehouses

are also secured with early morning and late evening operational hours.

Disaster management plans, health and safety protocols and adequate communication protocols during extreme weather events ensure safety at sites and minimise the impact on the workforce.

The financial impact of physical risks is estimated to be less than 1% of EBITDA. Risk mitigation measures have largely insulated your Company from the impact of extreme weather events.

Chronic physical risks

Your Company’s vast geographical presence makes it vulnerable to long-term chronic physical risks, such as variation in temperature, precipitation and water scarcity. Potential impact of variation in temperature and precipitation patterns has been assessed through scenario analysis across all four scenarios. Less than a quarter of your Company’s cement plants are in sites with extremely high water-stress, combined with a projected long-term decrease in precipitation patterns.

Your Company has implemented several measures which protect the business from the identified chronic risks. Rainwater harvesting systems have also been installed across sites. Harvested rainwater is either used within the sites or recharged into the ground for raising groundwater levels. In addition, your Company’s manufacturing sites are Zero Liquid Discharge (“ZLD”) and they reuse 100% of treated water within the sites. As a result, nearly 43 out of 58 sites are water positive. The endeavour is to make all sites water positive, enabling your Company to be future-ready for mitigating risks of water stress.

Transitional risks

Emerging climate-related regulations and carbon pricing mechanisms may financially impact business in the long run. For example, Emission Trading Scheme (“ETS”) and Carbon Tax have been adopted in several geographies around the world. India has committed to reducing its emission intensity by 33-35% by 2030 and is on track to achieve this target five years in advance (2025). National level commitments may, in the future, cascade down to various industry sectors through the introduction of new climate change policies. The estimated impact of a policy such as ETS on your Company is estimated to be less than 1% of EBITDA, considering commitments already made to decarbonise the business.

Your Company is prepared to mitigate emerging risks pertaining to climate change policy changes through its existing voluntary GHG reduction targets which are SBTi validated, sustainability-linked bonds, its commitment to the GCCA announced ‘2050 Climate Ambition’ and so on.

Delay in adopting low-carbon technologies may lead to increased indirect operating costs. This could be through early retirement of existing assets. Your Company has strategically reduced its dependence on coal-based power generation and is focused on increasing the share of WHRS and renewable energy. Further, initiatives to utilise waste or by-products from other industries, and reducing clinker ratio are driving down emissions intensity. There are also efforts to track the technology and cost trends in emerging areas such as carbon capture, utilisation and storage (“CCUS”), and hydrogen and kiln electrification. Also, your Company is committed to aligning with the Paris Agreement Goals and is judiciously monitoring climate change performance at the Board-level, Unit-level and across all relevant functions.

Information Technology Risks

This comprises risks related to Information Technology (“IT”) systems; data integrity and physical assets. Your Company deploys IT systems, including ERP, SCM, Data Historian, and Mobile Solutions to support its business processes, communications, sales, logistics, and production. Risks could primarily arise from the unavailability of systems and/or loss or manipulation of information. To mitigate these risks, your Company uses backup procedures and stores information at two different locations. Systems are upgraded regularly with the latest security standards. For critical applications, security policies and procedures are updated periodically, and users are educated on adherence to the policies to eliminate data leakages.

Talent Management

Your Company’s growth has been driven by its ability to attract and retain top-quality talent while effectively engaging them in the right jobs. The risks in talent management are mitigated by following a policy of being an employer of choice and inculcating a sense of belonging. Specialised training courses are adopted to enhance and reskill employees to prepare them for future roles and create a talent pipeline.

Pandemic-linked Disruptions in Global Markets

The COVID-19 outbreak caused a huge impact on people’s lives, families and communities. Your Company continues to update and expand its crisis management and business continuity plans with an emphasis on employees, customers, supply chain, contacts, other stakeholders and business assets.

Geopolitical tension

The rising fuel prices in the wake of geopolitical tensions have had an adverse impact on the cost of manufacturing cement owing to increased raw material, fuel and energy costs. For your Company’s business, raw material, fuel and logistics account for a major share of the manufacturing cost. The anticipated rise in the procurement of raw materials and high consumption of energy is likely to lead to the need for prioritising local dependence for raw material and energy fulfilment in order to mitigate the disruption caused due to such global geopolitical tension.

INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY

Your Company has put in place adequate internal control systems that are commensurate with the size of its operations. Internal control systems comprising policies and procedures are designed to ensure sound management

of your Company’s operations, safekeeping of its assets, optimal utilisation of resources, reliability of its financial information, and compliance. Clearly defined roles and responsibilities have been institutionalised, and systems and procedures are periodically reviewed to keep pace with the growing size and complexity of your Company’s operations.

DIRECTORS

Retiring by rotation and continuing as Director

In accordance with the provisions of the Act and Articles of Association of your Company, Mr. Krishna Kishore Maheshwari (DIN: 00017572) retires by rotation, and being eligible, offers himself for re-appointment.

Re-appointment of Managing Director

The existing term of Mr. Kailash Chandra Jhanwar (DIN:01743559), Managing Director is upto 31^st December, 2022. The Board at its meeting held on 22^nd July, 2022, based on the recommendation of the NRC Committee and considering the contributions made by Mr. Jhanwar during his term of appointment, re-appointed Mr. Jhanwar for a further period of two years with effect from 1^st January, 2023.

Resolutions seeking their re-appointment along with a brief profile forms part of the Notice convening the AGM.

Meetings of the Board

Your Company’s Board of Directors met five times during the year to deliberate on various matters. The meetings were held on 7^th May, 2021; 22^nd July, 2021; 18^th October, 2021; 27^th October, 2021 and 17^th January, 2022. Additional details relating to the meetings of the Board of Directors are provided in the Report on Corporate Governance, which forms part of this Integrated Annual Report.

Your Company has the following six Board-level Committees, established in compliance with the requirements of the business and relevant provisions of applicable laws and statutes:

• Audit Committee

• Nomination, Remuneration and Compensation Committee

• Stakeholders Relationship Committee

• Corporate Social Responsibility Committee

• Risk Management and Sustainability Committee

• Finance Committee

Details with respect to the composition, terms of reference, number of meetings held, etc. of the above Committees

are included in the Report on Corporate Governance, which forms part of this Integrated Annual Report.

Independent Directors

Your Company’s Independent Directors have submitted requisite declarations confirming that they continue to meet the criteria of independence as prescribed under Section 149(6) of the Act and Regulation 16(1)(b) of the Listing Regulations. The Independent Directors have also confirmed that they have complied with the provisions of Schedule IV of the Act and your Company’s Code of Conduct.

Your Company’s Board is of the opinion that the Independent Directors possess requisite qualifications, experience, and expertise in industry knowledge; innovation; financial expertise; information technology; corporate governance; strategic expertise; marketing; legal and compliance; sustainability; risk management; human resource development and general management, and they hold highest standards of integrity. All Independent Directors of your Company have registered their name in the data bank maintained with the Indian Institute of Corporate Affairs, Manesar in terms of the provisions of the Companies (Appointment and Qualification of Directors) Rules, 2014.

Formal Annual Evaluation

The evaluation framework for assessing the performance of your Company’s Directors comprises of contributions at meetings and strategic perspective or inputs regarding the growth and performance of your Company, among others. The NRC Committee and the Board have laid down the manner in which formal annual evaluation of the performance of the Board, its Committees and individual Directors are to be made. Separate evaluation forms are circulated to individual directors for evaluation of the Board; its Committees, Independent Directors/Non-Executive Directors/Executive Directors and the Chairman of your Company. The process broadly comprises:

Board and Committee Evaluation

Evaluation of the Board as a whole and the Committees is done by individual Directors. These are collated for submission to the NRC Committee and feedback to the Board.

Independent/Non-Executive Directors Evaluation

Evaluation done by Board members, excluding the Director who is being evaluated, is submitted to the Chairman of your Company and individual feedback provided to

each Director. The evaluation of the Chairman/Executive Director as done by the individual Directors is submitted to the Chairman of the NRC Committee and subsequently to the Board. The evaluation framework focuses on various aspects of the Board and Committees such as review, timely information from management and others. Performance of individual Directors are categorised into Executive, Non-Executive and Independent Directors and based on parameters such as contribution, attendance, decision-making, action-oriented, external knowledge etc.

A brief summary of the evaluation exercise is as follows

The Board as a whole functions cohesively. The Committees function well in their respective areas and the recommendations of the Committees are considered and have been accepted by the Board. The Directors bring to the table their knowledge and experience. Independent Directors are rated high in understanding your Company’s business and expressing their views freely during deliberations. The Non-Executive Directors score well in all aspects. Executive Directors are action oriented and good in implementing Board decisions. The Chairman leads the Board effectively and encourages active participation and contribution by all Board members.

The details of the familiarisation programme for Independent Directors are available at https://www. ultratechcement.com/about-us/board-of-directors.

Policy on Appointment and Remuneration of Directors and Key Managerial Personnel and Remuneration Policy

Your Company’s Directors are appointed / re-appointed by the Board on the recommendations of the NRC Committee and approval of the shareholders.

In accordance with the Articles of Association of your Company, provisions of the Act and the Listing Regulations, all Directors, except the Executive Directors and Independent Directors, are liable to retire by rotation and, if eligible, offer themselves for re-appointment.

The Executive Directors are appointed for a fixed tenure and are not liable to retire by rotation. The Independent Directors can serve a maximum of two terms of five years each and their appointment and tenure are governed by provisions of the Act and the Listing Regulations.

The NRC Committee has formulated the remuneration policy of your Company, which is provided in Annexure VII to this Report.

AUDITORS

Statutory Auditors

Pursuant to the provisions of Section 139 of the Act and the Companies (Audit and Auditors) Rules, 2014, M/s. BSR & Co. LLP, Chartered Accountants, Mumbai (Registration No: 101248W/W-100022) and M/s. KKC & Associates LLP, Chartered Accountants (formerly Khimji Kunverji & Co.), Mumbai (Registration No: 105146W/W100621) have been appointed as Joint Statutory Auditors of your Company for a second term of five years until the conclusion of the 25^th and 26^th AGMs, respectively. In accordance with the provisions of the Act, the appointment of Statutory Auditors is not required to be ratified at every AGM.

The Joint Statutory Auditors have however confirmed that they are not disqualified to continue as Auditors and are eligible to hold office as Auditors of your Company.

The observations made in the Auditor’s Report are selfexplanatory and therefore, do not call for any further comments under Section 134(3)(f) of the Act.

Cost Auditors

The Cost Accounts and records as required to be maintained under Section 148(1) of the Act are duly made and maintained by your Company.

In terms of the provisions of Section 148 of the Act read with the Companies (Cost Records and Audit) Rules,

2014, the Board of Directors of your Company have, on the recommendation of the Audit Committee, appointed M/s. D. C. Dave & Co., Cost Accountants, Mumbai and M/s. N. D. Birla & Co., Cost Accountants, Ahmedabad, to conduct the Cost Audit of your Company for the financial year ending 31^st March, 2023, at a remuneration as mentioned in the Notice convening the AGM.

As required under the Act, the remuneration payable to the Cost Auditors has to be placed before the Members at a general meeting for ratification. Hence, a resolution relating to the same forms part of the Notice convening the AGM.

Secretarial Auditors

In terms of the provisions of Section 204 of the Act read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board had appointed M/s. Makarand M Joshi & Co. LLP, Company Secretaries as Secretarial Auditors for conducting Secretarial Audit of your Company for the financial year ended 31^st March, 2022.

The report of the Secretarial Auditor is provided in Annexure VIII, which does not contain any qualification, reservation or adverse remark.

customers and other stakeholders may be ‘forwardlooking statements’ within the meaning of applicable securities laws and regulations.

Actual results could differ materially from those expressed or implied. Important factors that could make a difference to your Company’s operations include global and Indian demand- supply conditions, finished goods prices, feed stock availability and prices, cyclical demand and pricing in your Company’s principal markets, changes in government regulations, tax regimes, economic developments within India and the countries within which your Company conducts business, geopolitical tensions, risks related to an economic downturn or recession in India, the efforts of the government and other measures seeking to contain the spread of COVID-19 and other factors such as litigation and labour negotiations. Your Company is not obliged to publicly amend, modify or revise any forward-looking statements on the basis of any subsequent development, information or events, or otherwise.

ACKNOWLEDGEMENT

Your Directors express their deep sense of gratitude to the banks, financial institutions, stakeholders, business associates, central and state governments for their support, and look forward to their continued assistance in the future. We thank our employees for their contribution to your Company’s performance. We applaud them for their superior levels of competence, dedication, and commitment to your Company.

For and on behalf of the Board

Kumar Mangalam Birla

Chairman (DIN: 00012813)

Mumbai,

22^nd July, 2022

KEY MANAGERIAL PERSONNEL

In terms of the provisions of Section 203 of the Act,

Mr. K. C. Jhanwar, Managing Director; Mr. Atul Daga, Whole- time Director and Chief Financial Officer and Mr. Sanjeeb Kumar Chatterjee, Company Secretary are the Key Managerial Personnel of your Company.

AUDIT COMMITTEE

The Audit Committee comprises Mr. S. B. Mathur,

Mr. Arun Adhikari, Mrs. Alka Bharucha and Mr. K. K. Maheshwari, majority of whom are Independent Directors, with Mr. Mathur being the Chairman. Mr. K. C. Jhanwar, Managing Director and Mr. Atul Daga, Whole-time Director and CFO, are permanent invitees. Further details relating to the Audit Committee are provided in the Report on Corporate Governance, which forms part of this Integrated Annual Report. During the year under review, all recommendations made by the Audit Committee were accepted by the Board.

VIGIL MECHANISM / WHISTLE BLOWER POLICY

Your Company has in place a vigil mechanism for Directors and employees to report instances and concerns about unethical behaviour, actual or suspected fraud, or violation of your Company’s Code of Conduct. Adequate safeguards are provided against victimisation of those who avail of the mechanism and direct access to the Chairman of the Audit Committee, in exceptional cases, is provided to them.

The vigil mechanism / whistle blower policy is available at

https://www.ultratechcement.com/investors/corporate-

governance#policies.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS

Your Company had filed appeals against the orders of the Competition Commission of India (“CCI”) dated 31^st August, 2016 (Penalty of '' 1,449.51 crores) and 19^th January, 2017 (Penalty of '' 68.30 crores). Upon the National Company Law Appellate Tribunal (“NCLAT”) disallowing its appeal against the CCI order dated 31^st August, 2016, your Company filed an appeal before Hon’ble Supreme Court which has, by its order dated 5^th October, 2018, granted a stay against the NCLAT order. Consequently, your Company has deposited an amount of '' 144.95 crores equivalent to 10% of the penalty of '' 1,449.51 crores. Your Company, backed by legal opinions, believes that it has a good case in both the matters and accordingly no provision has been made in the accounts.

Compliance with Secretarial Standards

Your Company is compliant with the Secretarial Standards specified by the Institute of Company Secretaries of India. Your Company has complied with all applicable provisions of Secretarial Standard - 1 and Secretarial Standard -2 relating to ‘Meetings of the Board of Directors’ and ‘General Meetings’ respectively, issued by the Institute of Company Secretaries of India.

ANNUAL RETURN

In terms of the provisions of Section 92 and Section 134 of the Act read with Rule 12 of the Companies (Management and Administration) Rules, 2014, the Annual Return is available at - https://www.ultratechcement.com/investors/ financials.

OTHER DISCLOSURES

• No material changes and commitments affected the financial position of your Company between the end of the financial year and the date of this Report.

• Your Company has not issued any shares with differential voting rights.

• There was no revision in the financial statements.

• There has been no change in the nature of business of your Company.

• Your Company has not issued any sweat equity shares.

Disclosures as per the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 (“POSH Act”):

Your Company has adopted zero tolerance for sexual harassment at workplace and has formulated a policy on prevention, prohibition and redressal of sexual harassment at workplace, in line with the provisions of the POSH Act and the rules framed thereunder, for prevention and redressal of complaints of sexual harassment at workplace. Your Company has complied with provisions relating to the constitution of the Internal Committee under the POSH Act. During the year under review, your Company received three complaints of sexual harassment, of which for one complaint, there was no evidence of harassment, and two complaints have been resolved.

CAUTIONARY STATEMENT

Statements in the Directors’ Report and the Management Discussion and Analysis describing your Company’s objectives, projections, estimates, expectations or predictions and plans for navigating the COVID-19 impact on your Company’s performance, its employees,

---

Mar 31, 2021

Your Directors present the 21^st Annual Report together with the audited accounts of your Company for the year ended 31^st March, 2021.

OVERVIEW AND THE STATE OF YOUR COMPANY’S AFFAIRS

The year 2020 saw mayhem around the world as COVID-19 threatened all that humanity had come to take for granted -mobility, safety and a normal life itself. This, in turn, posed the most formidable economic challenge to India and to the world. Bereft of a cure or a vaccine, the public health system in every country faced enormous pressure trying to tackle this allpervasive crisis. The imperative of flattening the disease curve was entwined with the threat of an imminent recession and job losses, given the restrictions on economic activities enforced by the lockdown to contain the spread of the virus. In other words, all containment measures had to consider a trade-off between lives and livelihood.

Despite the severe economic contraction of ~3.3% in 2020, the International Monetary Fund now projects global growth at 6% in 2021, which would moderate to 4.4% in 2022. This is the result of the additional fiscal support provided by governments in a few large economies, the anticipated vaccine-powered recovery in the second half of 2021, and the continued adaption

of economic activity to restricted mobility. However, there is uncertainty around this outlook, and much will depend on the path of the pandemic, the effectiveness of policy support in shoring up the vaccine-powered normalisation, and how the financial conditions of countries eventually shape up.

The Indian economy witnessed a contraction in H1FY21, followed by a subdued but positive growth in the second half. Higher capital expenditure of the government budgeted for FY22, expectation of a third consecutive normal monsoon and continued normalisation of economic activities following the progress of vaccination augur well for the Indian economy. However, recovery will not be easy, given that the scars of the pandemic run deep and there are uncertainties around the massive second wave of COVID-19 infections, which has registered a sharper spike than the first wave.

The Reserve Bank of India (“RBI”) has taken several steps to maintain easy liquidity conditions and low interest rates, despite higher government borrowings. Such support is expected to continue until the growth recovery becomes more durable. The Government of India has announced measures such as Production-linked Incentive (“PLI”) Scheme and monetisation of assets to fund infrastructure development. These, along with the improving cyclical impulses, are helping improve business confidence and may stoke a revival of project investment activity in due course.

The cement industry witnessed de-growth of 10-12% due to the COVID-19 pandemic. However, in H2FY21 the industry began to show signs of early recovery. Lockdown-led demand disruption was the highest in Q1FY21 on account of suspension of production, stalled construction activities and mass exodus of labour. The total lockdown period from late March to end-April 2020, was a huge challenge for all manufacturing industries. But with the central and state governments taking measured steps towards the opening up of the economy, some encouraging trends were seen from the latter part of May 2020, driven largely by a better-than-expected pick-up in cement consumption in the rural markets. Amidst the pandemic, cement consumption witnessed strong growth in the rural, semi-urban and retail markets. In rural India, better labour availability, increase in construction of rural infrastructure and low-cost housing drove cement demand. Demand is also getting influenced by the resumption of construction work related to institutional infrastructure projects such as road and metro rail networks.

Cement demand is closely linked to the housing and infrastructure sector. The industry has been on a volume growth path, motivated by the government’s ‘Housing for All by 2022’ mission and large infrastructure projects in the pipeline. Government spending on infrastructure projects and affordable housing schemes such as the Pradhan Mantri Awas Yojana (“PMAY”) with enhanced budgetary allocations will be the primary drivers of growth for the cement industry. Going forward, prospects for the industry in FY22 look bright.

Your Company managed the crisis with a sharp focus on operational efficiencies. In the face of the pandemic, your Company’s operations across locations were stopped in line with the government directives. It was in continuous engagement with all stakeholders through various digital platforms. Critical Response Teams were set up across the organisation to plan scenarios and respond to the rapidly changing situation. With the easing of the lockdown, operations gradually stabilised. Your Company recovered the carrying amount of all its inventories, receivables and loans in the ordinary course of business. It was able to service all its debt obligations as per schedule, with its capital and financial resources remaining entirely protected and its liquidity position adequately covered. As part of its commitment to society, your Company undertook various initiatives during the year to support the country in its fight against the pandemic.

Production and capacity utilisation (grey cement):
Particulars	FY21	FY20 % change
Installed capacity in India (MTPA)	111.35	111.35	-
Production (MMT)	79.70	76.57	4
Capacity Utilisation	71%	69%	2

Domestic sales volume registered a growth of 5%, after registering a 32% de-growth in Q1FY21. Cement consumption started improving from Q2FY21 on the back of consistent rural demand and pick-up in infrastructure activities during H2FY21.

FINANCIAL PERFORMANCE			('' in crores)
	Standalone		Consolidated
	FY21	FY20	FY21	FY20
Net Turnover	42,677	40,033	44,239	41,781
Domestic	42,363	39,706	42,264	39,597
Exports	314	327	1,975	2,183
Other Income	1,300	1,343	1,221	1,300
Total Expenditure	32,224	31,997	33,158	33,183
Profit before Interest, Depreciation and Tax (PBIDT)	11,754	9,379	12,302	9,898
Depreciation	2,434	2,455	2,700	2,723
Profit before Interest and Tax (PBIT)	9,319	6,924	9,602	7,176
Interest	1,259	1,704	1,486	1,992
Profit before Impairment and Tax Expenses / share in profit of	8,060	5,220	8,116	5,184
Associates
Rates and Taxes	(164)	-	(164)	-
Impairment on Advances Given	-	-	(97)	-
Share in Profit / (Loss) of Associates and Joint Venture (net of tax)	-	-	2	(1)
Profit before Tax Expenses	7,896	5,220	7,858	5,183
Normalised Tax Expenses	2,554	1,570	2,539	1,543
Reversal of Deferred Tax Liability	-	(1,805)	-	(2,112)
Profit after Tax	5,342	5,456	5,319	5,751
Profit Attributable to Non-controlling Interest	-	-	(1)	(4)
Profit Attributable to Owner of the Parent	-	-	5,320	5,755

Your Company has the unique advantage of being able to cater to demand in different parts of the country and its focus on conserving cash continues unabated. All this has resulted in your Company emerging stronger and well prepared in the wake of the ongoing pandemic.

Your Company is closely monitoring the impact of the second wave of the pandemic on its operations while giving primacy to the safety and well-being of its employees and business partners. It has also undertaken a vaccination programme for all its employees and their dependents. With its focus on operational efficiencies and cost control and its continuing concern for its employees and all other stakeholders, your Company is better prepared for any resulting slowdown in the economy.

MMT- Million Metric Tonnes

Cement production at 79.70 million tonnes in FY21 was higher by 4% as compared to the previous year. This is despite the lower cement consumption during Q1FY21 due to the outbreak of the pandemic across the country. Capacity utilisation was higher at 71% as compared to 69% last year.

Sales Volume:

(Figures in MMT)
Particulars	FY21	FY20	% change
Domestic Sales	80.18	76.40	5
Exports & Others	2.38	2.36	1
Total Sales Volume	82.56	78.76	5

Net Turnover

Your Company’s Net Turnover at '' 42,677 crores is 7% higher than the previous year.

Other Income

Other income is marginally lower mainly on account of lower government grants compared to the previous year.

Operating Profit (PBIDT) and Margin

PBIDT for the year at '' 11,754 crores is 25% higher than the previous year. Operating margin improved on account of volume growth and better sales realisation.

Cost Highlights

(i) Energy Cost

Overall energy cost declined 3.5% from '' 985/t in the previous year to '' 950/t, mainly on account of saving in power consumption and increase in green power mix. Furthermore, your Company continuously works towards efficiency improvement. Key initiatives in this regard are:

- Commissioning of 7 MW Waste Heat Recovery System (“WHRS”) capacity. Your Company will commission another 72 MW of WHRS capacity during FY22, taking the total WHRS capacity to 197 MW. There is plan to further increase this to 302 MW by FY24, which will cater to 26% of the total power requirement.

- Increase solar and wind power capacity from

125 MW to >350 MW by the end of FY22 and cater to ~7% of the total power requirement.

- Use low-cost fuel viz. industrial waste.

- Continuous improvement in thermal power plant efficiency by reducing auxiliary consumption power.

(ii) Input Material Cost

Raw material cost rose marginally from '' 493/t to '' 504/t due to an increase in additive and fly ash prices. Increase in diesel prices impacted inbound transportation, resulting in higher raw material cost.

Your Company is continuously working on improving share of blended and premium products in its product mix, leading to an improvement in overall profitability.

(iii) Freight and Forwarding Expenses

Logistics cost saw marginal increase from '' 1,144/t to '' 1,158/t, due to increase in diesel cost and lead distance on account of change in market mix. Synergies arising out of the integration of acquired assets aided in lowering the impact.

Employee Costs

Employee cost stood at '' 2,182 crores as compared to '' 2,336 crores in the previous year. This is a one-time gain on account of lower expenses towards retirement benefits and staff welfare expenses, during the year.

Depreciation

At '' 2,434 crores, depreciation for the year is lower by '' 21 crores over the previous year, mainly on account of few assets being fully depreciated.

Finance Cost

Reduction in finance cost from '' 1,704 crores to '' 1,259 crores was mainly on account of lower borrowings and interest rates during the financial year.

Particulars	FY21	FY20	% Change
Debtors Turnover (Days)	18	19	8
Inventory Turnover (Days)	32	35	7
Interest Coverage Ratio	7.66	4.31	78
Current Ratio	0.81	1.01	20
Debt Equity Ratio (Gross)	0.40	0.48	16
Debt Equity Ratio (Net)	0.09	0.32	73
Operating Profit Margin (%)	26	22	4
Net Profit Margin (%)	12.5	9.1	3.4
Return on Net Worth (%)	13.1	10.2	2.9
Return on Capital Employed (ROCE) (%)	15	11.4	3.5
Earnings per Share (EPS)	185	127	46

Detailed explanation of ratios

(i) Debtors Turnover (Days) is used to quantify a company’s effectiveness in collecting its receivables or money owed by customers. The ratio shows how well a company uses ! and manages the credit it extends to customers. The ratio

is calculated by dividing average trade receivables by average per day turnover. i

¦ (ii) Inventory Turnover (Days) represents the average number of days a company holds its inventory before selling it. It is calculated by dividing average inventory by average per day turnover.

(x) Earnings Per Share (“EPS”) is the portion of a company’s profit allocated to each share. It serves as an indicator of a company’s profitability. It is calculated by dividing profit for the year by weighted average number of shares outstanding during the year. For your Company, the EPS improved on account of increase in Net Profit by 46% over that of the previous year.

Cash Flow Statement

('' in crores)
	FY21	FY20
SOURCES OF CASH
Cash from Operations	9,569	7,826
Non-operating Cash Flow	172	259
Proceeds from Issue of Share Capital	7	3
Decrease in Working Capital	1,982	433
Total	11,730	8,521
USES OF CASH
Net Capital Expenditure	1,726	1,577
Increase in Investments	7,433	2,633
Repayment of Borrowings (net)	891	2,468
Repayment of Lease Liability including Interest thereof	121	112
(Issue) / Sale of Treasury Shares (net)	(7)	3
Interest	1,213	1,631
Dividend	375	380
Total	11,752	8,804
Increase / (Decrease) in Cash & Cash Equivalents	(21)	(283)

Credit Rating

Your Company has adequate liquidity and a strong balance sheet. CRISIL and India Ratings and Research have reaffirmed their credit rating as CRISIL AAA / Stable and IND AAA / Stable for Long Term and CRISIL A1 and IND A1 for Short Term, respectively. This is an acknowledgement of your Company’s ability to service its financial obligations in time and its sound financial management abilities.

Your Company has also obtained its credit rating for its foreign currency issuances from Fitch and Moody’s and has been rated by them as BBB- and Baa3 respectively.

Income Tax

Normalised income tax expenses increased in line with an increase in taxable income.

Net Profit

Normalised Profit after Tax increased by 46% from '' 3,650 crores to '' 5,342 crores.

Significant changes in key financial ratios, along with detailed explanations:

(iii) Interest Coverage Ratio measures how many times a company can cover its current interest payment with its available earnings. It is calculated by dividing PBIT by finance cost. Your Company’s Interest Coverage Ratio improved by 78% over the previous year mainly on account of increase in PBIT and lower interest outgo.

(iv) Current Ratio is a liquidity ratio that measures a company’s ability to pay short-term obligations or those due within one year. It is calculated by dividing the current assets by current liabilities.

(v) Debt Equity Ratio is used to evaluate a company’s financial leverage. It is a measure of the degree to which a company is financing its operations through debt versus wholly-owned funds. It is calculated by dividing a company’s total liabilities by its shareholder’s equity. Your Company’s Debt Equity Ratio (Net) has improved by 45% mainly on account of reduction in Net Debt during the year.

(vi) Operating Profit Margin (%) is a profitability or performance ratio used to calculate the percentage of profit a company generates from its operations. It is calculated by dividing the PBIDT (excluding Other Income) by turnover. Your Company’s Operating Profit Margin improved by 4% mainly on account of lower costs and higher realisations during the year.

(vii) Net Profit Margin (%) is equal to how much net income or profit is generated as a percentage of revenue. It is calculated by dividing the profit for the year by turnover. Your Company’s Net Profit Margin improved by 3% mainly on account of lower costs, lower interest outgo and higher realisations during the year.

(viii) Return on Net Worth (“RONW”) is a measure of profitability of a company expressed in percentage.

It is calculated by dividing Net Profit from continuing operations for the year by average Net Worth during the year. The ratio for your Company improved by 2.8% mainly on account of increase in its profitability.

(ix) Return on Capital Employed (“ROCE”) is a financial ratio that measures a company’s profitability and the efficiency with which its capital is used. In other words, the ratio measures how well a company is generating profits from its capital. It is calculated by dividing profit before interest, exceptional items and tax by average capital employed during the year. This ratio improved by 2.8% for your Company mainly on account of increase in its profitability.

Sources of Cash

Cash from Operations

Cash from operations was higher compared to the previous year on account of higher volume, and sales realisation.

Non-Operating Cash Flow

Cash from other activities was lower due to reduced interest income on bank deposits as a result of lower bank deposits.

Decrease in Working Capital

Working capital decreased on account of increase in trade payables mainly on account of better credit terms and payme through letter of credit.

Uses of Cash

Net Capital Expenditure

Your Company spent '' 1,726 crores on various capex during the year, primarily towards:

• WHRS at various locations

• Cuttack Grinding Unit

• Patliputra Grinding Unit

• Dankuni Grinding Unit

• Pali Integrated Unit

• Bicharpur Coal Block

• Other normal capex schemes for efficiency improvement and compliance with the changing regulatory framework

• Plant modernisation and maintenance Increase in Investments

Your Company’s higher operating cash flows, resulted in an increase in liquid investment during the year.

Repayment of Borrowing

In line with its endeavour to maintain optimal capital structure, your Company repaid high-cost, long-term debt amounting to '' 5,227 crores and also repaid short-term loans as per due dates.

The loan repayments have been done through free cash flows that your Company has generated over the last few quarters, despite the challenging circumstances and severe business interruptions during the first quarter of the current fiscal year. The aforesaid steps have resulted in improved Net Debt Equity ratio and Net Debt/EBITDA ratio.

Transfer to General Reserves

Your Company proposes to transfer an amount of '' 4,500 crores to the General Reserves.

DIVIDEND

Prudent working capital management and control on cash flows, resulted in your Company’s strong performance, even during trying times. Aided by deft financial management, your Company was able to successfully reduce Consolidated Net Debt/EBITDA ratio to 0.55x from 1.72x as on 31^st March, 2020.

With adequate cash flows and the confidence of sustaining its performance going forward, your Directors have recommended a dividend of '' 37 per equity share (as compared to '' 13 per equity share in the previous year) of '' 10 each for the year ended 31^st March, 2021. Except for unforeseen circumstances or the need to retain cash for its operations, your Company will endeavour to maintain this trend in future years as well.

The recommended dividend is in line with your Company’s dividend policy, which is given in Annexure I of this Report and is also available on your Company’s website.

In terms of the provisions of the Finance Act, 2020, dividend shall be taxed in the hands of shareholders at applicable rates of tax and your Company shall withhold tax at source appropriately.

Unclaimed dividend for the year ended 31^st March, 2013, aggregating to '' 1.30 crores has been transferred to the Investor Education and Protection Fund (“IEPF”). Your Company has also credited to the IEPF set up by the Government of India, equity shares in respect of which dividend had remained unpaid/unclaimed for a period of seven consecutive years within the timelines laid down by the Ministry

of Corporate Affairs, Government of India. Unpaid/unclaimed dividend for seven years or more has also been transferred to the IEPF, pursuant to the requirements under the Companies Act, 2013 (the “Act”).

DIRECTORS’ RESPONSIBILITY STATEMENT

The audited accounts for the year under review are in conformity with the requirements of the Act and the Indian Accounting Standards. The financial statements reflect fairly the form and substance of transactions carried out during the year under review and reasonably present your Company’s financial condition and results of operations.

Your Directors confirm that

• In the preparation of the Annual Accounts, applicable accounting standards have been followed along with proper explanations relating to material departures, if any.

• The accounting policies selected have been applied consistently, and judgments and estimates are made that are reasonable and prudent to give a true and fair view of the state of affairs of your Company as on 31^st March, 2021, and of the profit of your Company for the year ended on that date.

• Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of your Company and for preventing and detecting frauds and other irregularities.

• The Annual Accounts of your Company have been prepared on a going concern basis.

• Your Company had laid down internal financial controls and that such internal financial controls are adequate and were operating effectively.

• Your Company has devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

CAPITAL EXPENDITURE PLAN

The Board of Directors of your Company approved capex of '' 5,477 crores towards increasing capacity by 12.8 MTPA with a mix of brown field and green field expansion. The additional capacity will be created in the fast-growing markets of the east, central and north regions of the country. This expansion is in addition to your Company’s 6.7 MTPA capacity expansion currently underway in Uttar Pradesh, Odisha, Bihar and West Bengal. The expansion programme are on track, except

Nonetheless, given your Company’s history of setting up capacities in record time, commercial production from the new capacities is expected to go on stream in a phased manner by Q4FY23.

This capacity addition will not impact the ongoing deleveraging programme, which is on track to make your Company debt free by the time the expansion programme is completed.

Upon completion of the latest round of expansion, your Company’s capacity will grow to 136.25 MTPA, reinforcing its position as the third largest cement company in the world, outside of China.

SUSTAINABILITY LINKED BONDS

Your Company successfully raised US$ 400 million, corresponding to approximately '' 2,900 crores by way of issuance of senior unsecured US$ denominated notes (in the form of Sustainability Linked Bonds), due on 16^th February, 2031. The bonds bear coupon of 2.80% per annum, payable semi-annually on 16^th August and 16^th February each year, commencing 16^th August, 2021 as per applicable laws. The bonds are listed on the Singapore Stock Exchange.

Your Company is the first company in India and the second in Asia to issue Sustainability Linked Bonds.

Subject to compliance with applicable laws and regulations and as permitted by the RBI under the External Commercial Borrowings Guidelines, your Company intends to use the proceeds from this offering to refinance existing rupee-denominated debt, ongoing capital expenditure requirements and general corporate purposes.

Apart from the above, your Company has also raised funds amounting to '' 1,000 crores by the issuance of NonConvertible Debentures, which have been fully subscribed.

CORPORATE GOVERNANCE

Your Directors reaffirm their commitment to good corporate governance practices. During the year under review, your Company was compliant with the provisions relating to corporate governance. The compliance report is provided in the Corporate Governance section of the Annual Report. The Auditor’s Certificate on compliance with the conditions of corporate governance forming part of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“Listing Regulations”) is provided in Annexure II of this Report.

EMPLOYEE STOCK OPTION SCHEMES

ESOS-2013

During the year, 9,533 stock options vested in eligible employees. The Nomination, Remuneration and Compensatio Committee (“the NRC Committee”) allotted 28,293 equity shares of '' 10 each of your Company upon exercise of stock options and Restricted Stock Units (“RSUs”) by the grantees.

ESOS-2018

During the year, the NRC Committee:

• Granted 2,152 stock options at an exercise price of

'' 4,544.35 per stock option, exercisable into the same number of equity shares of '' 10 each, and 594 RSUs at an exercise price of '' 10 each on 21^st October, 2020.

• Granted 2,040 stock options at an exercise price of

'' 6,735.25 per stock option, exercisable into the same number of equity shares of '' 10 each, and 564 RSUs at an exercise price of '' 10 each on 27^th March, 2021.

• Vested 40,352 stock options to eligible employees, subject to the provisions of ESOS - 2018, statutory provisions as may be applicable from time to time and the rules and procedures set out by your Company in this regard.

Your Company transferred 17,014 equity shares during the year upon receipt of applications from some option grantees for the transfer of equity shares of your Company in their account, from the Trust account, which also include 123 shares pending for transfer for the year ended 31^st March, 2020.

In terms of the provisions of the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014, the details of the stock options and RSUs granted under the aforementioned schemes are available on your Company’s website https://www.ultratechcement.com/investors/financials.

A certificate from the Statutory Auditors on the implementation of your Company’s Employee Stock Option Schemes will be available at the ensuing Annual General Meeting (“AGM”) for inspection by the Members.

SHARE CAPITAL

During the year, your Company allotted 28,293 equity shares of '' 10 each to option grantees upon exercise of stock options and RSUs in terms of ESOS-2013. As a result, the paid-up equity share capital of your Company stood at '' 2,88,65,33,980, comprising of 28,86,53,398 equity shares of '' 10 each.

Transfer of unclaimed dividend and shares: The details relating to unclaimed dividend and shares are given in the Corporate Governance section that forms part of this Report.

RESEARCH AND DEVELOPMENT

Your Company’s Research and Development (“R&D”) efforts stand on the five pillars of - Customers, Sustainability,

Innovation, Quality, and Profitability. These pillars have contributed to the upgradation and optimisation of processes and helped your Company unlock bottlenecks. These have also been instrumental in your Company’s efforts towards preservation of mineral resources and use of alternative fuels and raw materials. Your Company has developed premium products that reduce limestone consumption, thus conserving fossil fuels and use of water in cement and concrete applications, while ensuring top-notch functionality.

Your Company’s continuing endeavour to address current and future customer needs and provide unmatched scientific and technical support to its manufacturing units and customers have led to greater focus on the development of new products, processes, and technologies, while adopting sustainable means of operations to further reduce emissions.

The R&D unit was granted a patent this year for the invention of ‘A Mineral-Based Composition for Use as a Binder in the Manufacture of Cement’ as an alternative to the available supplementary cementitious material (“SCM”).

Your Company has been granted a patent on safety sieve for its ability to control flow in raw material hopper. The safety sieve offers the following benefits - safety of labour; maintaining quality of raw material; ensuring smooth operations among others.

Your Company is also the first Company to conceptualise and implement a zero discharge Ready-Mix Concrete (“RMC”) plant, the first of its kind RMC in the world.

To remain competitive and make desirable scientific and technical progress, all global developments in the field of cement, concrete, and construction materials are tracked in a continuing manner.

Your Company’s R&D is accredited by the National Accreditation Board for Testing and Calibration Laboratories (“NABL”), making the organisation future-ready and enhancing its capabilities in

pollution abatement and carbon capture, nanotechnology of cement and concrete, concrete durability, concrete rheology,

3D printable concrete, Geopolymer concrete, modelling cement and concrete hydration and chemical admixtures for cement and concrete, including process innovation for improving manufacturing efficiency. Your Company’s R&D has also collaborated with the Aditya Birla Science and Technology Company Private Limited and the academia, and the organisation is represented by its R&D unit in the national and international scientific and technical forums.

SUSTAINABILITY

Sustainable growth is an integral part of your Company’s business ethos and it continuously strives to enhance environmental conservation measures while ensuring that business growth and profitability are concomitant with its contribution to societal well-being. Your Company’s sustainability initiatives include efforts to reduce carbon emissions, increase the use of alternative materials and fuels, increase green power capacity, adopt best practices to remain water positive, conservation of the ecosystem through the implementation of its Biodiversity Management Plan (“BMP”). Apart from strengthening the brand reputation, these measures have enabled your Company to push the industry towards greater sustainable practices.

A Board-level Risk and Sustainability Committee oversees your Company’s Environmental, Social, Governance (“ESG”) strategy, with the senior management closely involved in driving sustainability across the organisation. The structure ensures adherence, implementation, and monitoring of the sustainability initiatives. Moreover, performance assessment, including that of the senior management, is closely linked to ESG and sustainability outcomes.

Your Company has aligned its sustainability strategy to the UN Sustainable Development Goals (“SDGs”), which address critical issues such as climate change, poverty, gender equality, health and well-being, consumption and biodiversity.

As a founding member of the Global Cement and Concrete Association, your Company is committed to decarbonising its footprint and its aim to deliver carbon-neutral concrete by 2050 by working across the build environment value chain. It also aims to be 5x water positive by 2023, which means that it will replenish five times the amount of water it consumes. The total volume of water consumed has been replenished ~160% over four-years (from 27.4 million m³ in FY17 to 72.3 million m³ in FY21). For these efforts and others, your Company has scored 71% higher than the industry average on the Dow Jones Sustainability Index (“DJSI”). In FY20, it ranked among the top 10 companies on the DJSI Index under the ‘Construction Material’ category globally.

In FY20, only the second year of its participation, your Company’s score on the S&P’s DJSI Index was 68, reflecting a 15% increase over the previous year. This has helped your Company in benchmarking itself against the world’s best companies in sustainability performance, thereby establishing its sustainability commitment and helping it identify opportunities to further excel in its sustainability journey.

Your Company has consistently disclosed its climate performance to the Carbon Disclosure Project (“CDP”) and has been rated ‘B’, the highest score in the Indian cement sector. This year your Company also disclosed its water performance to CDP. Your Company has committed to reducing its Scope 1 Greenhouse Gas (“GHG”) emission intensity by 27% by 2032 from the base year of 2017. It is also focused on reducing Scope 2 GHG intensity by 69% within the same time frame.

Your Company has been consistently disclosing its climate performance to the Carbon Disclosure Project (“CDP”) and has been rated ‘B’, the highest score in the Indian cement sector. This year your Company also disclosed its water performance to CDP.

Its carbon dioxide (“CO₂”) emissions reduction targets, which were committed in July 2020, have been validated by the Science Based Targets Initiative (“SBTi”). Your Company has reduced 6% of Scope 1 CO₂ intensity from the base year of 2017 as against the target of 27% reduction by 2032. In energy efficiency, your Company has overachieved the target set by the Government of India for the first Perform, Achieve and Trade (“PAT”) cycle.

Your Company continues to consider emissions at US$ 10 per tCO₂, which has enabled it to evaluate the impact of any project/capex on the environment and take decisions to drive down carbon emissions. It is also committed to doubling its energy productivity under the #EP100 program run by The Climate Group (“TCG”) by 2035 against the base year of 2010.

Being a signatory to the Task Force on Climate-Related Financial Disclosures (“TCFD”’), your Company has undertaken a climate change risk and opportunities assessment study by TCFD recommendations. These findings have been integrated

with the long-term business strategy, risk management and business planning.

For further details on your Company’s Sustainability efforts, please refer to the Sustainability Report which is available at - https://www.ultratechcement.com/about-us/sustainability/ sustainability-at-ultratech.

DIGITALISATION

Decarbonisation and Digitalisation are megatrends driving companies to take a relook at structural changes and fundamentally alter traditional business models.

Your Company leverages technology to provide superior value to internal and external stakeholders. Speed, scale, customer convenience and operational efficiency have been the focus areas of its digital transformation journey over the years.

During the year, your Company launched a slew of new initiatives as part of its continuous efforts to accelerate the digital transformation journey. Mobile solutions have been launched for the sales network, dealers and retailers. These facilitate booking and tracking of orders. Digital platforms, through which customers can transact using multiple modes of payments viz. credit/debit cards, UPI and avail convenient EMIs on credit cards, have been launched. It has provided access to up-to-date individual performance information for employees, eliminating efforts in manual and reporting tasks through a single source. The alignment of actions and effective real-time decisions enabled by data integrity is helping teams in achieving organisational goals and improve customer interaction and service at all levels.

The setting up of a single integrated platform, amalgamating data from multiple systems, lies at the heart of your Company’s logistics transformation. With the ability to manage real time exceptions for its entire logistics operations, the integrated information hub has made your Company future ready and brought agility in decision making.

Developing a digital ecosystem for its service partners, i.e., transporters and drivers, and using digital solutions to improve their safety and efficiency have been a crucial element of your Company’s digitalisation strategy. It is also leading from the front in applying digital solutions in its manufacturing activities to gain advantage and drive sustainability. It has done successful pilots leveraging digital and Artificial Intelligence (“AI”) across the manufacturing value chain of cement plant, thermal power plant, safety, mines etc.

The digital transformation has the potential to decouple emissions and resource use from economic growth while making operations sustainable, safer and more reliable.

As a part of your Company’s continued focus towards making it future-ready, the Shared Services Centre viz. UltraTech Knowledge Service Centre (“UKSC”) has been set-up at Pune to centralise the accounting processes, thereby enabling it to standardise and make the accounting processes agile.

During the year, your Company completed migrating all transactional accounting processes from the manufacturing and marketing office locations to UKSC. UKSC’s main objectives will be to continue creating stronger financial discipline, uniform practices in finance and accounting processes and building up a digitally enabled ‘Centre of Excellence’ for the accounting processes.

UKSC is currently responsible for processing ~1.3 million invoices annually, amounting to a payment of '' 35,000 crores, managing GST compliance of '' 9,000 crores, maintaining 1 million customer / vendor master records and accounting closure for 55 manufacturing units and marketing zones every quarter.

The digital transformation projects undertaken in the last 12-18 months have resulted in immense benefits in the areas of operational efficiency / productivity, improved customer convenience and employee collaboration.

With the successful roll-out and seamless adoption of digital solutions by employees, customers, and service partners, the digital journey is expected to further accelerate in the coming months, yielding significant benefits to your Company and its stakeholders.

HUMAN RESOURCES

Amid the raging pandemic, it is your Company’s human resource that has been the backbone for not only carrying on business through the period of disruption but also in ensuring the safety of the workforce and that of the community around your Company’s locations. Given the situation, the organisation was in a state of readiness to operate remotely from home and all operations were carried out from stop to restart rapidly and safely. The use of the virtual medium was maximised through close online networking of teams and, connect with trade partners, customers and suppliers. Emphasis continued to be laid on the development of talent within and strengthening the core areas of expertise by enabling continuous learning, leveraging the digital platform. Formal digital platforms were

launched to enable sharing of ideas and best practices across work levels which helped to drive continuous improvement and innovation.

Your Company’s employee strength stood at 21,909 as on 31^st March, 2021 (2020: 21,592).

SAFETY

Health and safety of all people working for your Company and on its behalf remained the most important focus area. We are guided by our safety belief: ‘Life is precious, and we care for it’. Therefore, your Company ensured greater outreach despite limited mobility during the pandemic. It acted with agility to combat the spread of COVID-19 by:

• Preparing SOPs with timely amendment based on government guidelines and communicating across locations for their strict adherence.

• Ensuring online PTW (permit to work) to avoid requirement of touching paper.

• Facilitating ‘Doctors on Call’ service across all locations.

• Organising meetings and trainings in the virtual mode.

Your Company’s manufacturing units are certified as per International Safety Standard (OHSAS 18001/ ISO 45001) and it maintains a thorough safety management system right from hazard identification and risk assessment, compliance with applicable legal requirements, effective implementation of risk control measures following hierarchy of control, to periodic checks through inspection and audit and appropriate corrective and preventive action. Consequently, it could achieve the lowest ever lost time injury frequency rate (“LTIFR”) of 0.14 with reduction by 37% compared to FY20. Number of lost time injury

incidents reduced by 39%, from 32 in FY20 to 20 this year. The organisational goal of ‘zero harm’ gained momentum with 80%

of your Company’s sites having no lost time iniury

Initiatives for the improvement in safety performance and culture were centered around the following five major elements, viz. System and Processes; Capability Building; Behavioural Safety; Assurance and Logistics Safety.

CORPORATE SOCIAL RESPONSIBILITY

In terms of the provisions of Section 135 of the Act read with the Companies (Corporate Social Responsibility Policy) Rules, 2014, the Board of Directors of your Company has constituted a Corporate Social Responsibility (“CSR”) Committee chaired by Mrs. Rajashree Birla. Other Members of the Committee are Mrs. Sukanya Kripalu, Independent Director; Mr. K. K. Maheshwari, Vice Chairman and Non-Executive Director.

Dr. (Mrs.) Pragnya Ram, Group Executive President, CSR, Legacy, Documentation & Archives is a permanent invitee to the Committee. Your Company also has in place a CSR Policy which is available at - https://www.ultratechcement.com/ investors/corporate-governance.

Your Company’s CSR activities are focused on Social Empowerment and Welfare, Infrastructure Development, Sustainable Livelihood, Healthcare and Education. Various activities across these segments have been initiated during the year around its plant locations and the neighbouring villages. During the year, '' 120.68 crores was spent on CSR activities, which constitutes over 3.3% of the average net profits of the last three financial years.

A report on CSR activities is provided in Annexure III which forms part of this Report.

SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES

The audited financial statements of your Company’s subsidiaries and joint ventures viz. Dakshin Cements Limited (“Dakshin”), Harish Cement Limited, Gotan Lime Stone Khanij Udyog Private Limited, Bhagwati Lime Stone Company Private Limited, UltraTech Nathdwara Cement Limited (“UNCL”), UltraTech Cement Middle East Investments Limited (“UCMEIL”), UltraTech Cement Lanka (Private) Limited, PT UltraTech Mining Indonesia and PT UltraTech Investments Indonesia and their related information are available on your Company’s website and also available for inspection. Any Member who is interested in obtaining a copy of the audited financial statements of your Company’s subsidiaries may write to the Company Secretary.

The name of Dakshin was struck off from the register of companies maintained by the Registrar of Companies,

Hyderabad with effect from 9^th April, 2021. This was on an application made by Dakshin in terms of the provisions of the Act. Consequently, Dakshin stood dissolved and ceased to be a subsidiary of your Company.

During the year, UNCL through its subsidiary, Krishna Holdings Pte. Ltd, (“Krishna”), a company incorporated in Singapore has completed the divestment of its entire equity shareholding of

92.5% in its cement subsidiary and has recorded net gain on divestment of '' 437.68 crores.

UNCL’s subsidiary, Star Super Cement Industries LLC, UAE (“SSCI”) was previously classified as ‘held for sale’. During the year, it was decided to make it a part of the continuing operations considering the synergies available with the existing capacity. Consequently, UNCL has divested SSCI to UCMEIL.

In terms of the order of the National Company Law Appellate Tribunal (“NCLAT”) dated 14^th November, 2018, approving the Resolution Plan submitted by your Company under the Insolvency and Bankruptcy Code, 2016 for acquisition of Binani Cement Limited, subsequently renamed UNCL, a loan of US$ 230.4 million in 3B Binani Glassfibre SARL, (“3B”) a company registered in Luxembourg, was assigned to UNCL from IDBI Bank Limited. Assignment of the loan was along with securities, which included pledge over all assets and shares of 3B in various forms in favour of UNCL. Since 3B was in continuous default in servicing the loan, UNCL enforced its pledge of 3B shares, consequent to which UNCL became owner of 100% equity of 3B w.e.f 12^th March, 2021. 3B’s Board has also been re-constituted. UNCL has taken this step to safeguard and expedite the recovery of its loan from 3B. Till the time UNCL is able to recover its loan, the investment in 3B will be treated as investment held for sale.

In accordance with the provisions of Section 129(3) of the Act read with the Companies (Accounts) Rules, 2014, a report on the performance and financial position of each of the subsidiaries, joint venture and associate companies is provided in Annexure IV to this Report.

Consequently, Dakshin stood dissolved and ceased to be a subsidiary of the Company.

PARTICULARS OF LOAN, GUARANTEE AND INVESTMENT

Details of Loan, Guarantee and Investment covered under the provisions of Section 186 of the Act read with the Companies (Meetings of Board and its Powers) Rules, 2014 are given in Notes to the standalone financial statements.

ENERGY, TECHNOLOGY AND FOREIGN EXCHANGE

Information on conservation of energy, technology absorption and foreign exchange earnings and outgo, required to be disclosed pursuant to Section 134(3)(m) of the Act read with the Companies (Accounts) Rules, 2014, is given in Annexure V to this Report.

PARTICULARS OF EMPLOYEES

Disclosures pertaining to remuneration and other details as required under Section 197(12), read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are given in Annexure VI. In accordance with the provisions of the aforementioned section, the names and other particulars of employees drawing remuneration in excess of

the limits set out in the aforesaid rules form part of this Report. However, in line with the provisions of Section 136(1) of the Act, the Report and Accounts as set out therein, are being sent to all Members of your Company, excluding the aforesaid information. Any Member, who is interested in obtaining these particulars, may write to the Company Secretary.

BUSINESS RESPONSIBILITY REPORT

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

CONTRACT AND ARRANGEMENT WITH RELATED PARTIES

During the financial year, your Company entered into related party transactions completely on an arm’s length basis and in the ordinary course of business. There are no material transactions with any related party, as defined under Section 188 of the Act read with the Companies (Meetings of Board and its Powers) Rules, 2014. All related party transactions have been approved by the Audit Committee of your Company and are reviewed by it on a periodic basis. The policy on Related Party Transactions, as approved by the Audit Committee and the Board, is available at https://www.ultratechcement.com/ investors/corporate-governance.

The details of contracts and arrangements with related parties of your Company for the financial year ended 31^st March, 2021 is given in Note No. 39 to the standalone financial statements of your Company.

RISK MANAGEMENT

Risk is an integral and unavoidable component of business. Given the challenging and dynamic environment of your Company’s operations, it is committed to proactively managing risk in accomplishing its ambitious goals. Though risks cannot be eliminated, an effective risk management program ensures that risks are reduced, avoided, mitigated or shared. To maintain oversight of your Company’s risks, the Risk Management and Sustainability Committee (“RMS Committee”) of your Company is mandated to review its Enterprise Risk Management Framework (including plan / process), analyse the risks more deeply and define risk mitigation actions, where necessary.

Through the Annual Risk Report processes, which are based upon the business environment, operational controls and compliance procedures, your Company aims to assess and prioritise risks, according to their significance and likelihood. The key risks identified by your Company include economic environment and market demand; inflation and cost of production; legal and compliance with local laws; financial and accounting; environment, climate and sustainability; information technology and talent management. Needless to mention, with the challenges presented by the COVID-19 outbreak, pandemic and epidemic-related business risks have also been identified by your Company.

Company’s expansion plans. Apart from the preservation and extension of existing reserves, a range of measures including strategic sourcing and changing input mix are adopted by your Company to mitigate the risk of unavailability of limestone.

Legal and Compliance

This comprises the risk if your Company is found to have inadvertently violated laws covering business conduct.

The country’s regulatory framework is ever-evolving and the risk of non-compliance and penalties may increase for your Company, leading to reputational risks. A comprehensive risk-based compliance programme, involving inclusive training and adherence to the Code of Conduct, is thus institutionalised by your Company.

As a step to mitigate the legal and compliance risk, your Company’s management encourages its employees to place their reliance on professional guidance and opinion to discuss the impact of any changes in laws and regulations to ensure total compliance. Periodic and ad-hoc reporting to various internal committees for oversight ensures the effectiveness of such a programme.

Financial

This comprises the risk of exposure to interest rates, foreign exchange rates and commodity price fluctuations. The risk management strategy is to identify the risk exposure, measure and evaluate the financial impact, and decide on steps to mitigate the risks together with ensuring regular monitoring and reporting.

With the objective of minimising risks arising from uncertainty and volatility of foreign exchange fluctuations, an elaborate financial risk management policy is followed for every transaction undertaken in foreign currency. Your Company’s policies to counter such risks are reviewed periodically and constantly aligned with the financial market practices and regulations.

Changing laws, rules, regulations and standards relating to accounting, corporate governance, public disclosure and listing regulations are generating newer and unforeseen risks for companies. The new or changed laws, regulations and standards may lack precedence and are subject to varying interpretations. Their application in practice may evolve as new guidance is provided by regulatory and governing bodies. Thus your Company maintains a high standard of corporate governance and public disclosure to de-risk itself from such dynamic regulatory changes.

The risk horizon considered includes long-term strategic risks, short to medium-term risks as well as single events. The risks are analysed considering likelihood and impact as a basis to determine their management.

Key Business Risks identified by your Company:

Economic Environment and Market Demand

The demand for construction material is fundamentally driven by the economic growth in the country. Economic slowdown and subdued infrastructural development might lead to a slowdown in construction projects, thus leading to a reduction in cement consumption in the country. The growth in construction activity in the country has been slow over the last few years, impacting the cement consumption. In a scenario where incremental capacity addition exceeds incremental cement demand, the government’s push for infrastructure and housing will aid the growth in cement consumption and reduce the overcapacity gap.

The cement industry in India is an aggregation of small and large companies. In such an environment, the risk of protecting market share is optimal. With the expanding capacities of existing players and the emergence of new entrants, competition is a sustained risk. To mitigate this, continuous endeavours to enhance brand equity through innovative marketing activities, enhancement in the product portfolio and value-add services have been the thrust areas for your Company. The engineering expertise of your Company and its emphasis on quality also minimise its risk against market fluctuations considerably.

Inflation and Cost of Production

Your Company faces the risk of inflation and fluctuations in the market-driven cost of coal, pet coke, power, and other fuels. Since the cement industry is extremely energy intensive, changes in fuel prices can significantly impact production cost. To de-risk, your Company has established specific policies of long deliveries and it continuously optimises its fuel mix and energy efficiency, while exploring the use of alternative fuels. The procurement of raw materials at an economical cost or of suitable quality faces a high degree of inflationary certainty. Your Company mitigates this risk through the establishment of exhaustive policies for procurement of specific raw materials and stores and those amenable to just in time inventories. Limestone being the primary raw material required to produce cement, its continuous and long-term availability is critical, particularly under the dynamic regulatory environment. Your Company currently possesses sufficient limestone reserves. Securing additional reserves is critical to address your

Environment

This comprises risks associated with environmental pollution through the discharge of waste and GHG emissions, which may cause damage to the local ecology and environment. Various initiatives such as sewage treatment plants, recycling of industrial wastewater, bag-house, WHRS and extensive plantation and creation of green belts have been undertaken by your Company to de-risk and protect the environment.

Apart from a targeted reduction of CO₂ emissions (Scope 1 by 27% and Scope 2 by 69% by 2032), your Company’s risk mitigation strategy includes a change in product mix, energy efficiency, use of alternative fuels and raw materials, WHRS and the increased use of renewable energy. Your Company has also adopted measures such as rainwater harvesting and water recharge that help it overcome challenges related to water availability.

Climate and Sustainability

Sustainability-related climate change risks and opportunities are assessed in line with your Company’s risk management policy and have been integrated in its multi-disciplinary Risk Management Framework. Classified as ESG risks, these relate to energy, emissions and water, among other issues. Sectoral review and relevant stakeholder interactions are conducted regularly to develop a list of climate-related risks specific to business and location. Identified risks are then mapped to your Company’s risk matrix, which classifies the risk according to its impact and likelihood.

Prioritised climate risks are managed through Unit-level committees. Unit and Functional Heads are responsible for identifying risks, developing mitigation plans, updating and reviewing their respective risk registers as per the defined process. The consolidated risk report is submitted to the Board-level committee.

Scenario based analysis has been conducted for physical as well as transition risks. For physical risks, four scenarios

have been considered that are linked to Representative Concentration Pathway (“RCP”), which is a GHG concentration trajectory adopted by the Intergovernmental Panel on Climate Change (“IPCC”). These include RCP 8.5, RCP 6, RCP 4.5 and RCP 2.6 scenarios. The pathways describe four possible climate futures on the basis of the volume of GHG emitted in the coming years. All four scenarios have been considered to assess the impact of temperature and precipitation changes in areas where your Company operates. Maximum possible impact has been considered based on projections up to the year 2100.

Your Company has conducted risk assessment exercise to identify climate-related physical and transition risks. Risks are assessed based on the defined time horizons over short term (0-3 years), medium term (3-10 years) and long term (10-30 years). The categorisation of risks into physical and transition risks has been done in alignment with TCFD guidelines.

In case of assessing the impact of transition risks on your Company, scenario analysis has been conducted in alignment with ETP B2DS and IPCC 1.5-degree scenarios. The potential impact of the evolution of climate policies has been considered under both scenarios to assess the resilience of your Company, as well as the potential pathways for decarbonisation so that it can comply with policy mechanisms such as emission trading schemes.

Product mix is an important variable in managing climate-related risks. Your Company’s products are not only sustainable but also aim to embed sustainability in the entire construction value chain. As many as 73 UltraTech products are certified by GreenPro, the largest Ecolabel in India, which enables end users in the built environment sector to choose sustainable materials for reducing the environmental impact during construction, operation as well as use phase of buildings.

This also leads to reduced wear and tear of buildings, increasing longevity, thereby reducing the use of input materials and natural resources during their entire lifetime.

Physical risks

Acute physical risks: Such risks can potentially impact sales volumes because of disruption of business operations due to interruption in supply chain, rise in logistics costs, power outage, infrastructure damages, manpower shortage, among other aspects.

Few sites of your Company have been exposed to extreme weather events during the last few years, such as floods and cyclones. In the last three years, sites located in Bhubaneswar, Chennai and Gujarat have been impacted due to extreme weather events. Some of your Company’s sites are in geographies that are susceptible to periodic heat waves. However, your Company has implemented several measures to mitigate the impact of physical risks.

Your Company’s approach is highlighted below:

• Enhancing resilience of the building sector: Extreme weather events due to climate change, such as floods, cyclones and heat waves, may impact the building sector considerably. To mitigate the impact of physical risks on the building sector and society at large, your Company is working with the built environment sector to make buildings more resilient to climate change effects.

• Your Company is committed to developing products and solutions that reduce carbon emissions throughout the lifecycle of the built environment sector. It offers building products and solutions that lead to optimisation of concrete mixing, improving overall quality and strength of construction, and thus alleviating the impact of physical risks.

• Your Company has introduced many new products that are designed to make buildings more resilient to dampness.

Given its pan-India presence, your Company’s sites are highly diversified geographically. If a manufacturing plant faces business disruption or shutdown due to extreme weather events, alternative plants in other locations can serve the market need. Also, its wide logistics network, with warehouses across different parts of the country, enable flexibility in your Company’s operations.

Annual weather forecasts are considered in supply chain decisions in order to mitigate the risk of delays in sourcing of fuels. Your company has developed strategic partnerships with geographically diverse global vendors for fuels. Regular monitoring of environmental, political and regulatory developments, coupled with flexible contracts mitigate risks of supply chain disruptions. Inventory norms for fuels are periodically reviewed considering probability and expected impact of likely supply chain disruptions due to above developments. Insurance coverage is in place to protect against damages to business assets or loss of material in warehouses due to extreme weather events.

Your Company has not witnessed any impact of heat waves on its facilities. Nevertheless, it ensures that its employees are protected during peak summer days. It is committed to the WASH Pledge, ensuring adequate availability of safe drinking water to workers. Warehouses are also secured with early morning and late evening operational hours.

Disaster management plans, health and safety protocols and adequate communication protocols during extreme weather events ensure safety at sites and minimise the impact on the workforce.

The financial impact of physical risks is estimated to be less than 1% of EBITDA. Risk mitigation measures have largely insulated your Company from the impact of extreme weather events.

Chronic physical risks: Your Company’s vast geographical presence makes it vulnerable to long-term chronic physical risks, such as variation in temperature, precipitation and water scarcity. Potential impact of variation in temperature and precipitation patterns has been assessed through scenario analysis across all four scenarios. Less than a quarter of your Company’s cement plants are in sites with extremely high water-stress, combined with a projected long-term decrease in precipitation patterns.

Your Company has implemented several measures which protect the business from the identified chronic risks. Rainwater harvesting systems have also been installed across sites. Harvested rainwater is either used within the sites or recharged into the ground for raising groundwater levels. In addition, your Company’s manufacturing sites are Zero Liquid Discharge (“ZLD”) and they reuse 100% of treated water within the sites. As a result, nearly 41 out of 58 sites are water positive. The endeavour is to make all sites water positive, enabling your Company to be future-ready for mitigating risks of water stress.

Transitional risks

Emerging climate-related regulations and carbon pricing mechanisms may financially impact business in the long run. For example, Emission Trading Scheme (“ETS”) and Carbon Tax have been adopted in several geographies around the world. India has committed to reducing its emission intensity by 33-35% by 2030 and is on track to achieve this target five years in advance (2025). National level commitments may, in the future, cascade down to various industry sectors through the introduction of new climate change policies. The estimated impact of a policy such as ETS on your Company is estimated to be less than 1% of EBITDA, considering commitments already made to decarbonise the business.

Your Company is prepared to mitigate emerging risks pertaining to climate change policy changes through its existin'' voluntary GHG reduction targets which are SBTi validated, sustainability-linked bonds, its commitment to the GCCA announced ‘2050 Climate Ambition’ and so on.

Delay in adopting low-carbon technologies may lead to increased indirect operating costs. This could be through early retirement of existing assets. Your Company has strategically reduced its dependence on coal-based power generation and is focused on increasing the share of WHRS and renewable energy. Further, initiatives to utilise waste or by-products from other industries, and reducing clinker ratio are driving down emissions intensity. There are also efforts to track the technology and cost trends in emerging areas such as carbon capture, utilisation and storage (“CCUS”), and hydrogen and kiln electrification. Also, your Company is committed to aligning with the Paris Agreement Goals and is judiciously monitoring climate change performance at the Board-level, Unit-level and across all relevant functions.

Information Technology Risks

This comprises risks related to Information Technology (“IT”) systems; data integrity and physical assets. Your Company deploys IT systems, including ERP, SCM, Data Historian, and Mobile Solutions to support its business processes, communications, sales, logistics, and production. Risks could primarily arise from the unavailability of systems and/or loss or manipulation of information. To mitigate these risks, your Company uses backup procedures and stores information at two different locations. Systems are upgraded regularly with the latest security standards. For critical applications, security policies and procedures are updated periodically, and users are educated on adherence to the policies to eliminate data leakages.

Talent Management

Your Company’s growth has been driven by its ability to attract and retain top-quality talent and effectively engage them in the right jobs. The risks in talent management are mitigated by following a policy of being an employer of choice and inculcating a sense of belonging. Specialised training courses

are adopted to enhance and reskill the employees to prepare them for future roles and create a talent pipeline.

Pandemic-linked Disruptions in Global Markets

The COVID-19 outbreak has been declared a pandemic by the World Health Organization, and has caused a huge impact on people’s lives, families and communities. The pandemic presents a serious threat, impacting organisations in numerous concurrent ways, and potentially limiting their options around recovery if other companies are also affected or challenged by logistical constraints. There are several associated risks viz. cyber and fraud risks, operations risks, supply chain risks, health and safety, among others. Your Company has assessed these risks as part of the risk identification and mitigation process and is considering the impact thereof while making business decisions.

Amid the COVID-19 crisis, your Company is updating and expanding its crisis management and business continuity plans with an emphasis on employees, customers, supply chain, contacts, other stakeholders and business assets. Your Company currently operates in 53 locations in India and five overseas locations. Managing the risk of a multicultural and diverse workforce is extremely critical to the sustained growth of your Company. Continuous dissemination of your Company’s Values and strict adherence to the Code of Conduct for the employees are reiterated through various forums to contain this risk.

INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY

Your Company has put in place adequate internal control systems that are commensurate with the size of its operations. Internal control systems comprising policies and procedures are designed to ensure sound management of your Company’s operations, safekeeping of its assets, optimal utilisation of resources, reliability of its financial information, and compliance. Clearly defined roles and responsibilities have been institutionalised, and systems and procedures are periodically reviewed to keep pace with the growing size and complexity of your Company’s operations.

DIRECTORS

Retiring by rotation and continuing as Director

In accordance with the provisions of the Act and Articles of Association of your Company, Mr. Kumar Mangalam Birla (DIN: 00012813) retires by rotation, and being eligible, offers himself for re-appointment.

Resolution seeking his re-appointment along with a brief profile forms part of the Notice convening the AGM.

Appointment of Director

Based on the recommendation of the NRC Committee, the Board on 14^th August, 2020 appointed Mr. Sunil Duggal (DIN:00041825) as an Additional Director (Independent).

Resolution seeking the appointment of Mr. Duggal as an Independent Director of your Company for a term of five years commencing 14^th August, 2020 along with his brief profile forms part of the Notice convening the AGM.

Appointment of Whole-time Director

The existing term of Mr. Atul Daga (DIN: 06416619), Wholetime Director and Chief Financial Officer is upto 8^th June, 2021. The Board at its meeting held on 7^th May, 2021, based on the recommendation of the NRC Committee and considering the contributions made by Mr. Daga during his term of appointment, re-appointed Mr. Daga for a further period of three years from 9^th June, 2021.

Resolutions seeking his re-appointment along with a brief profile forms part of the Notice convening the AGM.

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Meetings of the Board

The Board of Directors of your Company met five times during the year to deliberate on various matters. The meetings were held on 20^th May, 2020; 28^th July, 2020; 21^st October, 2020;

3^rd December, 2020, and 23^rd January, 2021. Additional details relating to the meetings of the Board of Directors are provided in the Report on Corporate Governance, which forms part of the Annual Report.

Your Company has the following six Board-level Committees, which have been established in compliance with the requirements of the business and relevant provisions of applicable laws and statutes:

• Audit Committee

• Nomination, Remuneration and Compensation Committee

• Stakeholders Relationship Committee

• Corporate Social Responsibility Committee

• Risk Management and Sustainability Committee

• Finance Committee

The details with respect to the composition, terms of reference, number of meetings held, etc. of the above Committees are included in the Report on Corporate Governance, which forms part of the Annual Report.

Independent Directors

Your Company’s Independent Directors have submitted requisite declarations confirming that they continue to meet the criteria of independence as prescribed under Section 149(6) of the Act and Regulation 16(1)(b) of the Listing Regulations. The Independent Directors have also confirmed that they have complied with Schedule IV of the Act and the Company’s Code of Conduct.

Your Company’s Board is of the opinion that the Independent Directors possess requisite qualifications, experience, and expertise in industry knowledge; innovation; financial expertise; information technology; corporate governance; strategic expertise; marketing; legal and compliance; sustainability; risk management; human resource development and general management, and they hold highest standards of integrity. All Independent Directors of your Company have registered their name in the data bank maintained with the Indian Institute of Corporate Affairs, Manesar in terms of the provisions of the Companies (Appointment and Qualification of Directors) Rules, 2014.

Formal Annual Evaluation

The evaluation framework for assessing the performance of the Directors of your Company comprises contributions at meetings and strategic perspective or inputs regarding the growth and performance of your Company, among others.

The NRC Committee and the Board have laid down the way in which formal annual evaluation of the performance of the Board, its Committees and individual Directors has to be made. It includes circulation of evaluation forms separately for evaluation of the Board and its Committees, Independent Directors / Non-Executive Directors / Executive Directors and the Chairman of your Company. The process of the annual performance evaluation broadly comprises:

Board and Committee Evaluation

Evaluation of the Board as a whole and the Committees is done by individual Directors, which is collated for submission to the NRC Committee and feedback to the Board.

Independent / Non-Executive Directors Evaluation

Evaluation done by Board members, excluding the Director, is submitted to the Chairman of your Company and individual feedback is provided to each Director. The evaluation of the Chairman / Executive Director as done by the individual Directors is submitted to the Chairman of the NRC Committee and subsequently to the Board. The evaluation framework focused on various aspects of the Board and Committees such as review, timely information from management etc. Also, performance of individual Directors was divided into Executive, Non-Executive and Independent Directors and based on parameters such as contribution, attendance, decision-making, action-oriented, external knowledge etc.

A brief summary of the evaluation exercise is as follows:

The Board as a whole functions as a cohesive body. The

recommendations of the Committees have been accepted by the Board. The Directors bring to the table their knowledge and experience. Independent Directors are rated high in understanding your Company’s business and expressing their views freely during deliberations. The Non-Executive Directors score well in all aspects. Executives Directors are action oriented and good in implementing Board decisions. Thi Chairman leads the Board effectively and encourages active participation and contribution by all Board members.

The details of the programme for familiarisation of Independent Directors of your Company are available at https://www. ultratechcement.com/about-us/leadership-team.

Policy on Appointment and Remuneration of Directors and Key Managerial Personnel and Remuneration Policy

Your Company’s Directors are appointed / re-appointed by the Board on the recommendations of the NRC Committee and approval of the shareholders.

In accordance with the Articles of Association of your Company, provisions of the Act and the Listing Regulations, all Directors, except the Executive Directors and Independent Directors, are liable to retire by rotation and, if eligible, offer themselves for re-appointment. The Executive Directors are appointed for a fixed tenure and are not liable to retire by rotation. The Independent Directors can serve a maximum of two terms of five years each and their appointment and tenure are governed by provisions of the Act and the Listing Regulations.

The NRC Committee has formulated the remuneration policy of your Company, which is provided in Annexure VII to this Report.

KEY MANAGERIAL PERSONNEL

In terms of the provisions of Section 203 of the Act,

Mr. K. C. Jhanwar, Managing Director; Mr. Atul Daga, Wholetime Director and Chief Financial Officer and Mr. Sanjeeb Kumar Chatterjee, Company Secretary are the Key Managerial Personnel of your Company.

AUDIT COMMITTEE

The Audit Committee comprises of Mr. S. B. Mathur, Mr. Arun Adhikari, Mrs. Alka Bharucha and Mr. K. K. Maheshwari. The Committee comprises majority of Independent Directors with Mr. Mathur being the Chairman. Mr. K. C. Jhanwar, Managing Director and Mr. Atul Daga, Whole-time Director and CFO, are permanent invitees. Further details relating to the Audit Committee are provided in the Report on Corporate Governance, which forms part of the Annual Report. During the year under review, all recommendations made by the Audit Committee were accepted by the Board.

VIGIL MECHANISM / WHISTLE BLOWER POLICY

Your Company has in place a vigil mechanism for the Directors and employees to report instances and concerns about unethical behaviour, actual or suspected fraud, or violation of your Company’s Code of Conduct. Adequate safeguards are provided against victimisation of those who avail of the mechanism and direct access to the Chairman of the Audit Committee, in exceptional cases, is provided to them.

The vigil mechanism/whistle blower policy is available at

https://www.ultratechcement.com/investors/corporate-

governance.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS

Your Company had filed appeals against the orders of the Competition Commission of India (“CCI”) dated 31^st August, 2016. The NCLAT disallowed the appeal against the CCI order filed by your Company. The Hon’ble Supreme Court has, by its order dated 5^th October, 2018 granted a stay against the NCLAT order. Consequently, your Company has deposited an amount of '' 144.95 crores equivalent to 10% of the penalty amount (including the acquired Cement Division of Century Textiles and Industries Limited). Your Company, backed by legal opinions, believes that it has a good case in the said matters and accordingly no provision has been made in the accounts.

AUDITORS

Statutory Auditors

In terms of the provisions of Section 139 of the Act and the Companies (Audit and Auditors) Rules, 2014, M/s. BSR &

Co. LLP, Chartered Accountants, Mumbai (Registration No: 101248W/W-100022) (“BSR”) were re-appointed as Joint Statutory Auditors for a second term of five years from the conclusion of the 20^th AGM held on 12^th August, 2020 up to the conclusion of the 25^th AGM to be held in 2025.

The first term of M/s. Khimji Kunverji & Co. LLP, Chartered Accountants, Mumbai (Registration No: 105146W/W-100621) (“KKC”), the other Joint Statutory Auditor is up to the conclusion of the 21^st AGM. They are eligible for reappointment for a second term of five years as provided under Section 139 of the Act read with the Companies (Audit and Auditors) Rules, 2014.

KKC has confirmed that they are eligible to be re-appointed in accordance with the provisions of the Act and Rules made thereunder. KKC, registered with the Institute of Chartered

Accountants of India (“ICAI”), was established in 1936 and is led by 10 partners. The firm provides a range of services, including audit and assurance, taxation, advisory and accounting. The firm has significant experience in providing auditing, taxation and advisory services to leading banks and corporates in the manufacturing, services and financial services sectors. The signing partner heads the Assurance vertical of the firm. He also holds a Diploma in Information System Audit and IFRS Certification of ICAI. In the past, he was a member of various committees of ICAI related to auditing and accounting. Your Company’s Board of Directors, upon the recommendation of the Audit Committee, proposes their re-appointment for a second term, subject to the approval of Members. Resolution seeking their re-appointment forms part of the Notice convening the AGM.

The observations made in the Auditor’s Report are selfexplanatory and, therefore, do not call for any further comments under Section 134(3)(f) of the Act.

Cost Auditors

The Cost Accounts and records as required to be maintained under Section 148 (1) of the Act are duly made and maintained by your Company.

In terms of the provisions of Section 148 of the Act read with the Companies (Cost Records and Audit) Rules, 2014, the Board of Directors of your Company have, on the recommendation of the Audit Committee, appointed M/s. D. C. Dave & Co., Cost Accountants, Mumbai and M/s. N. D. Birla & Co., Cost Accountants, Ahmedabad, to conduct the Cost Audit of your Company for the financial year ending 31^st March, 2022, at a remuneration as mentioned in the Notice convening the AGM.

As required under the Act, the remuneration payable to the Cost Auditors has to be placed before the Members at a general meeting for ratification. Hence, a resolution for the same forms part of the Notice convening the AGM.

Secretarial Auditors

In terms of the provisions of Section 204 of the Act read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board had appointed M/s. Makarand M Joshi & Co. LLP, Company Secretaries as Secretarial Auditors for conducting Secretarial Audit of your Company for the financial year ended 31^st March, 2021.

The report of the Secretarial Auditor is provided in Annexure VIII. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.

Compliance with Secretarial Standards

Your Company is compliant with the Secretarial Standards specified by the Institute of Company Secretaries of India.

Your Company has complied with all applicable provisions of Secretarial Standard - 1 and Secretarial Standard - 2 relating to ‘Meetings of the Board of Directors’ and ‘General Meetings’ respectively, issued by the Institute of Company Secretaries of India.

ANNUAL RETURN

In terms of the provisions of Section 92 and Section 134 of the Act read with Rule 12 of the Companies (Management and Administration) Rules, 2014, the Annual Return is available at -https://www.ultratechcement.com/investors/financials.

OTHER DISCLOSURES

• No material changes and commitments affected the financial position of your Company between the end of the financial year and the date of this Report.

• Your Company has not issued any shares with differential voting rights.

• There was no revision in the financial statements.

• There has been no change in the nature of business of your Company.

• Your Company has not issued any sweat equity shares.

Disclosures as per the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 (“POSH Act”):

Your Company has adopted zero tolerance for sexual harassment at workplace and has formulated a policy on prevention, prohibition and redressal of sexual harassment at workplace, in line with the provisions of the POSH Act and the rules framed thereunder, for prevention and redressal of complaints of sexual harassment at workplace. Your Company has complied with provisions relating to the constitution of the Internal Committee under the POSH Act. During the year under review, your Company received four complaints of sexual harassment, of which for two complaints, there were no evidence of harassment, one complaint has been resolved and one complaint is under investigation.

CAUTIONARY STATEMENT

Statements in the Directors’ Report and the Management Discussion and Analysis describing your Company’s objectives, projections, estimates, expectations or predictions and plans for navigating the COVID-19 impact on your Company’s performance, its employees, customers and other stakeholders may be ‘forward-looking statements’ within the meaning of applicable securities laws and regulations.

Actual results could differ materially from those expressed or implied. Important factors that could make a difference to your Company’s operations include global and Indian demand-supply conditions, finished goods prices, feed stock availability and prices, cyclical demand and pricing in your Company’s principal markets, changes in government regulations, tax regimes, economic developments within India and the countries within which your Company conducts business, risks related to an economic downturn or recession in India, the efforts of the government and other measures seeking to contain the spread of COVID-19 and other factors such as litigation and labour negotiations. Your Company is not obliged to publicly amend, modify or revise any forward-looking statements on the basis of any subsequent development, information or events, or otherwise.

ACKNOWLEDGEMENT

Your Directors express their deep sense of gratitude to the banks, financial institutions, stakeholders, business associates, central and state governments for their support, and look forward to their continued assistance in the future. We thank our employees for their contribution to your Company’s performance. We applaud them for their superior levels of competence, dedication, and commitment to your Company.

For and on behalf of the Board

Kumar Mangalam Birla Chairman (DIN: 00012813)

Mumbai,

7^th May, 2021

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Mar 31, 2018

Dear Shareholders,

The Directors present the Eighteenth Annual Report together with the Audited Accounts of your Company for the year ended 31^st March, 2018.

OVERVIEW AND THE STATE OF THE COMPANY''S AFFAIRS

The global cyclical upswing since mid - 2016 strengthened during the year. Among the advanced economies, notably Germany, Japan, Korea and the United States, growth in the third quarter of 2017 was higher than projected. Key emerging markets and developing economies like Brazil, China and South Africa also posted impressive growth. Global trade was significantly higher, supported by a good flow of investment, particularly among advanced economies and increased Asian manufacturing output. The stronger momentum experienced in 2017 is expected to carry into 2018 and 2019, with global growth rising to 3.9% for both years.

The International Monetary Fund (IMF) remained optimistic of India''s potential and retained GDP growth forecast for the country at 6.7% in 2017 and 7.4% in 2018. In its World Economic Outlook Update, it also estimated that the Indian economy could grow 7.8% in 2019, making it the world''s fastest-growing economy in 2018 and 2019, a ranking that it briefly lost to China in 2017. The economy''s growth trajectory was sustained on the back of a series of reforms undertaken over the past year.

India is the world''s second largest cement producer In anticipation of demand, ~ 90 million tonnes of capacity was added during the past five years. During the year, the industry reported a rise in cement demand and after seven years'' the industry is likely to report historical demand growth multiple against GDP. The Government''s thrust on infrastructure development remained the key growth driver Besides, revival in rural housing demand and accelerated execution under the low cost housing program, bolstered volume off-take. However demand from urban housing remained sluggish owing to the implementation of Real Estate (Regulation and Development) Act, 2016 (RERA) and the lingering impact of demonetization. FY 2017-18 was also a year of challenges as major States imposed a ban on sand mining, arising out of environmental concerns and entry of the unorganized sector. Sand is used as raw material by the construction industry and the ban impacted construction activity in Uttar Pradesh, Madhya Pradesh, Bihar, Tamil Nadu, Maharashtra and Rajasthan. The Hon''ble Supreme Court of India introduced a ban on the use of petcoke in Haryana, Rajasthan and Uttar Pradesh to curb pollution and even though the restriction was subsequently relaxed, there was a hike in import duty on petcoke from 2.5% to 10%. An increase in diesel prices pushed freight cost northwards. All of this resulted in increased operating costs.

India''s cement sector growth is projected at around 8% in FY 2018-19, which is good as compared to the trends of the last few years. This is likely to be driven by a slew of infrastructure projects which have been announced by the government, among which are the construction of around 84,000 kilometers of roads by 2022 including the Bharatmala Project, construction of rural roads under the Pradhan Mantri Gram Sadak Yozana by 2019, Housing for All by 2022, the metro rail networks in several cities, bullet train and various irrigation projects. Regardless, the sector could face some headwinds in the form of higher fuel prices that could have a negative impact on margins.

It is against this background, that we share your Company''s performance during 2017-18. The major highlight was the successful acquisition of the cement plants of Jaiprakash Associates Limited (JAL) and Jaypee Cement Corporation Limited (JCCL). This enabled your Company to further consolidate its position in the domestic cement industry. More information on the acquisition is detailed in the Corporate Development section of this report.

FINANCIAL PERFORMANCE

(Rs, in crores)

	Standalone		Consolidated
	2017-18	2016-17	2017-18	2016-17
Net Turnover	29,363	23,616	30,973	25,092
Domestic	27,866	23,191	27,866	23,191
Exports	475	425	3,108	1,901
Other Income	1,022	936	1,021	931
Total Expenditure	23,907	18,922	25,266	20,163
Profit before Interest, Depreciation and Tax (PBIDT)	6,478	5,629	6,729	5,861
Less: Depreciation	1,764	1,268	1,848	1,349
Profit before Interest and Tax (PBIT)	4,714	4,361	4,881	4,512
Interest	1,186	571	1,233	640
Profit before Impairment and Tax Expenses / share in profit of Associates	3,528	3,790	3,648	3,872
Stamp duty on acquisition of assets	(226)	-	(226)	-
Provision for diminution in value of Investment	-	(14)	-	-
Impairment of assets	-	-	(75)	-
Impairment on deconsolidation of subsidiary	-	-	(46)	-
Profit before Tax Expenses	3,302	3,776	3,301	3,872
Tax Expenses	1,071	1,148	1,077	1,158
Profit after Tax	2,231	2,628	2,224	2,714
Profit attributable to Non-controlling Interest	-	-	2	(1)
Profit attributable to Owner of the parent	2,231	2,628	2,222	2,715

INote: the figures for 2017-18 include those of the acquired cement units of JAL and JCCL and are therefore not strictly comparable with the previous years'' figures.)

Net Turnover:

Your Company''s net turnover at Rs, 29,363 crores is higher over the previous year, driven by higher sales volume and improvement in cement prices.

Other Income:

Other income is 9% higher compared to the previous year Your Company received higher fiscal incentives under the Industrial Promotion Schemes of various States.

Operating Profit (PBIDT) and Margin:

PBIDT for the year at Rs, 6,478 crores is higher by 15% over the previous year The operating margin declined marginally due to increase in operating costs.

Cost Highlights:

(i) Energy Cost:

Overall energy cost rose by 23% from Rs, 763/t to Rs, 938/t, attributable to substantial increase in petcoke and coal prices. Imported petcoke prices went up by 45% from $66/t to $96/t. Energy costs were also impacted due to the ban on petcoke usage in thermal power plants in Rajasthan, Uttar Pradesh and Haryana.

Controlling costs is an on-going exercise at your Company. To mitigate the impact of rising fuel prices, your Company was engaged in a cost control program leading to the following efficiencies:

- Reduction in power consumption at cement plants by 3%;

- Improved thermal power plant efficiency by reducing auxiliary consumption power by 10%;

- Enhanced usage of waste heat recovery power to 8%;

- Increased power wheeling from integrated plants to grinding units to reduce dependency on grid;

- Entering into solar power purchase agreements to cut power costs at grinding units and to meet renewable energy obligations;

- Improved petcoke usage in acquired units in line with your Company''s standards;

- Use of low cost fuels viz. industrial waste and lignite increased from 2% in the previous year to 5%. Around 2.52 lmt industrial waste has been used in the kilns.

(ii) Input material cost:

Raw materials cost saw a marginal uptick from Rs, 467/t to Rs, 473/t inspite of increase in slag and fly-ash prices and additional limestone royalty for the acquired assets.

This was achieved by shifting to alternative additives and identifying new sources of material.

(iii) Freight and Forwarding expenses:

Logistics cost increased from Rs, 1,074/t to Rs, 1,124/t, due to 7% higher diesel prices. Its impact was partially restricted with the reduction in average lead distance by 3% as a result of improved utilisation of new cement grinding capacities and integration of acquired capacities.

(iv) Employee costs:

Employee costs extended by 21% from Rs, 1,413 crores in the previous year to Rs, 1,706 crores, on account of normal annual increments, commissioning of new plants and acquired plants.

Depreciation:

Depreciation for the year at Rs, 1,764 crores is higher by Rs, 496 crores over the previous year, mainly on account of the acquired assets and capitalisation of new assets commissioned.

Finance Cost:

Finance cost at Rs, 1,186 crores is up by Rs, 615 crores vis-a-vis Rs, 571 crores mainly due to the debt taken for acquiring the JAL and JCCL assets.

Your Company does not accept any fixed deposits from the public falling under Section 73 of the Companies Act, 2013 (the Act) and the Companies (Acceptance of Deposits) Rules, 2014.

Your Company has adequate liquidity and a strong Balance Sheet. CRISIL and India Ratings and Research has re-affirmed their credit rating as CRISIL AAA and IND AAA for Long Term and CRISIL A1 IND A1 for Short Term.

Income Tax:

Income tax expenses decreased in line with the decrease in taxable income.

Net Profit:

Profit after tax declined by 15% from Rs, 2,628 crores to Rs, 2,231 crores. The normalised PAT for the year is Rs, 2,420 crores, after adjusting the impact of stamp duty charged on acquired assets and a one-time charge for deferred tax due to the change in income-tax rates. Net profit is also impacted on account of an additional interest charge of Rs, 725 crores and depreciation of Rs, 500 crores related to acquired assets.

Cash Flow Statement

(Rs, in crores)

	FY18	FY17
Sources of Cash
Cash from operations	4,885	4,222
Non-operating cash flow	187	138
Proceeds from issue of share capital	16	7
Proceeds from sale of Investment	3,540	-
Decrease in working capital	-	501
Total	8,628	4,868
uses of Cash
Net capital expenditure	1,836	1,233
Increase in investment	-	1,270
Increase in working capital	1,267	-
Repayment of borrowings (net)	4,027	1,535
Interest	1,154	547
Dividend	331	308
Total	8,615	4,893
Increase / (Decrease) in cash & cash equivalents	13	(25)

Sources of Cash Cash from operations:

Cash from operations was higher compared to the previous year as a result of higher revenues.

Non-Operating Cash Flow:

Cash from non-operations was higher due to higher interest income coupled with higher income from the sale of investment in Mutual Funds.

uses of Cash Borrowings:

During the year, your Company raised Rs, 10,189 crores for repayment of transferred loans relating to the acquisition of JAL and JCCL''s cement capacity. Your Company also redeemed Rs, 3,125 crores of debentures and Rs, 500 crores of preference shares issued in terms of the Scheme of Arrangement between JAL, JCCL, your Company and their respective shareholders and creditors (Scheme of Arrangement). Besides this, your Company raised Rs, 322 crores of long term debt in the form of external commercial borrowings for meeting its capex requirement.

Your Company has repaid the existing long-term borrowings of Rs, 884 crores in keeping with repayment schedule.

Net Capital Expenditure:

Your Company spent over Rs, 1,900 crores on various capital expenditure during the year. These include the green field project at Manavar, District Dhar in Madhya Pradesh; Bara grinding unit in Uttar Pradesh; Waste Heat Recovery System (WHRS) in Chhattisgarh and capex related to modernisation.

Increase in Working Capital:

Working capital increased on account of initial working capital infusion for the acquired assets including the upfront royalty payment for transfer of mines.

Transfer to general Reserve:

Your Company proposes to transfer an amount of Rs, 1,600 crores to the General Reserve.

DIVIDEND

Despite completing a major acquisition during the year, your Directors have recommended a dividend of Rs, 10.50 per equity share (Rs, 10 per equity share in the previous year) of Rs, 10/- each for the year ended 31^st March, 2018. The dividend distribution would result in a cash outgo of Rs, 347.61 crores (including tax on dividend of Rs, 59.27 crores) compared to Rs, 330.41 crores (including tax on dividend of Rs, 55.89 crores) paid for 2016-17.

In terms of the provisions of Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations) your Company has formulated a dividend distribution policy. The policy is given in Annexure I to this Report. It is also accessible from your Company''s website www.ultratechcement.com.

capital expenditure plan

Your Company commissioned a Greenfield clinker capacity of 2.5 MTPA at Manawar, District Dhar Madhya Pradesh. Your Company also commissioned a cement grinding facility of

1.75 MTPA capacity and an auto loading facility. This state-of-the-art manufacturing facility has been built with best in class safety standards. Another cement grinding facility of

1.75 MTPA capacity as well as a WHRS of 13 MW capacity is under erection and both are expected to be completed before September, 2018. The plant has been commissioned in record time of less than 365 days, setting a global benchmark for size of such capacity. Yet another benchmark is setting up the Greenfield plant at a capital cost of less than $90/mt.

During the year, your Company''s Board of Directors approved the setting up of a 3.5 MTPA integrated cement plant at Pali, Rajasthan, at an investment of around Rs, 1,850 crores. Commercial production from the plant is expected to commence by June, 2020.

Capital expenditure during the next financial year is estimated at approximately Rs, 2,500 crores. This is for capacity expansion projects, waste heat recovery systems, regulatory requirements, plant infrastructure and routine maintenance.

RESEARCH AND Development

Your Company''s Research and Development (R&D) activities are aimed at facilitating sustained growth of the business by developing new cement and concrete products, providing environment friendly and innovative solutions to cement manufacturing Units and to the ever increasing customer demands in concrete applications. Continuous product quality improvement, customization and enhancing cement plant productivity are its main forte as it leads to greater profitability customer value and delight.

Your Company''s R&D Centre has a clear mission of integrating the latest scientific and technological developments in the field of cement and concrete. With this objective, your Company''s R&D Centre provides comprehensive technical and analytical support to the business.

Your Company''s R&D activities include basic as well as applied research for:

- Fostering a better understanding of advanced building materials based on cement;

- Providing a forum for closer customer-manufacturer interaction;

- Increased customer delight;

- Demonstrating and encouraging development of low cost energy-saving materials; and

- Bridging the gap between theory and practice.

Customers, Quality and Cost are core to all R&D product and process projects. This results in process optimization and debottlenecking, natural raw materials conservation and promotion of alternative fuels while complying with the increasingly stringent quality and environmental norms. It not only explores newer ways of preserving the environment and non-renewable resources but also encourages all the stakeholders to utilize resources responsibly. Towards this end, your Company has developed premium products that aid in limestone deposits and clinker conservation, energy savings, ensuring enhanced concrete durability and maintaining top product attributes and functionality.

Your Company''s R&D Centre has:

- Developed and patented a new variant of green and low-temperature clinker;

- new type of high early and long-term strength cement;

- 3 types of high-early strength water saving cement.

Your Company has implemented in-house grinding aids technology in the Eastern Cluster to further reduce the clinker factor (clinker content in cement), extend the life of its limestone deposits and significantly reduce its carbon footprint.

Your Company''s R&D has become future ready. It has created totally new capabilities in the area of Pollution Abatement and Carbon Capture, Nanotechnology of Cement and Concrete, Concrete Durability, Concrete Rheology 3D printable Concrete, Geopolymer Concrete, Modelling Cement & Concrete hydration and Chemical Admixtures for Cement and Concrete.

Your Company has successfully completed the application process for the NABL (National Accreditation Board for Testing and Calibration Laboratories) accreditation i.e. the test results of your Company''s Central R&D Laboratories will automatically be recognized by the Bureau of Indian Standards, the Government of India and all its regulatory bodies, as well as by your Company''s customers and competitors. Your Company''s R&D test results will be issuable with NABL accreditation stamp.

Your Company''s R&D actively collaborates with Aditya Birla Science and Technology Company Private Limited (ABSTCPL) and Academia. It represents your Company in national and international cement and concrete conferences and seminars.

human resources

Your Company''s human resources is the strong foundation for creating many possibilities for its business. During the year, your Company added greater employee talent through seamless integration of acquired assets. The rapid ramp-up of manufacturing units and markets was the highlight of our people effort.

Continuous people development through the Sales & Service Academy and Cement Manufacturing Excellence Academy, for developing knowledge and skills coupled with the Talent Management practices will deliver the talent needs of the organization. Your Company''s employee engagement score reflects high engagement and pride in being part of the organization. The first batch of participants of StepAhead, your Company''s flagship program for developing Sales leaders created in association with Xavier School of Management, (earlier Xavier Labour Relations Institute), graduated during the year.

As on 31^st March 2018, your Company''s employee strength stood at 19,681 employees.

SAFETY

The Safety excellence journey is a continuing process at your Company. Safety of the people working for and on behalf of your Company is an integral part of business. Your Company''s Managing Director chairs the Safety Board, they review the safety performance of your Company on a regular basis. In addition, there are eight safety sub-committees headed by senior leaders to closely monitor various key performance indicators related to safety. During the year, more than 6,00,000 safety observations have been carried out. Corporate safety audit by cross functional teams and structural stability assessment by third parties is carried out across your Company''s locations and around 95% of identified high-priority points have been completed to ensure that the structures across our units are safe.

CORPORATE SOCIAL RESPONSIBILITY

In terms of the provisions of Section 135 of the Act read with Companies (Corporate Social Responsibility Policy) Rules,

2014, the Board of Directors of your Company has constituted a Corporate Social Responsibility (CSR) Committee which is chaired by Mrs. Rajashree Birla. The other Members of the Committee are Mr. G. M. Dave, Independent Director; Mr. O. P. Puranmalka, Non-Executive Director and Mr. K. K. Maheshwari, Managing Director. Dr. Pragnya Ram, Group Executive President, Corporate Communication & CSR is a permanent invitee to the Committee. Your Company also has in place a CSR Policy which is available on your Company''s website viz. www.ultratechcement.com.

Your Company''s CSR activities are focused on Social Empowerment & Welfare, Infrastructure Development, Sustainable Livelihood, Health Care and Education. Various activities have been initiated during the year in neighboring villages around its plant locations. It infused over Rs, 60.71 crores, over 2% of the average net profits of the last three years for the purposes of CSR.

A report on CSR activities is attached as Annexure III forming part of this report.

subsidiary, joint venture or associate companies

In the matter of your Company''s wholly-owned subsidiary, Gotan Lime Stone Khanij Udyog Private Limited (GKUPL), the Supreme Court of India has directed the State of Rajasthan to frame and notify its policy relating to transfer of mining lease and thereafter pass appropriate order in respect of the mining lease of GKUPL. The State Government has notified the new policy related to transfer of new mining lease, based on which your Company has requested the Government to consider reinstatement of the mines in its favour.

The audited financial statements of your Company''s subsidiaries and joint ventures viz. Dakshin Cements Limited, Harish Cement Limited, GKUPL, Bhagwati Lime Stone Company Private Limited, UltraTech Cement Middle East Investments Limited, UltraTech Cement Lanka (Pvt.) Limited, PT UltraTech Mining Indonesia and PT UltraTech Investments Indonesia as well as related information are available on the website of your Company viz. www.ultratechcement.com and also available for inspection during business hours at the registered office of your Company. During the year UltraTech Cement SA (PTY) and UltraTech Cement Mozambique Limitada, subsidiaries of your Company were closed.

Any Member, who is interested in obtaining a copy of the audited financial statements of your Company''s subsidiaries may write to the Company Secretary at the Registered Office of your Company.

In accordance with the provisions of Section 129(3) of the Act, read with the Companies (Accounts) Rules, 2014, a report on the performance and financial position of each of the subsidiaries, joint venture or associate companies is attached as Annexure IV to this Report.

PARTICULARS OF LOAN, GUARANTEE AND INVESTMENT

Details of Loan, Guarantee and Investment covered under the provisions of Section 186 of the Act read with the Companies (Meetings of Board and its Powers) Rules, 2014 are given in the Notes to the standalone financial statements.

ENERGY, TECHNOLOGY AND FOREIGN EXCHANGE

Information on conservation of energy, technology absorption and foreign exchange earnings and outgo, required to be disclosed pursuant to Section 134(3)(m) of the Act read with the Companies (Accounts) Rules, 2014 is given in Annexure V to this Report.

PARTICULARS OF EMPLOYEES

Disclosures pertaining to remuneration and other details as required under Section 197(12) read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are attached as Annexure VI. In accordance with the provisions of Section 197(12) of the Act read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the names and other particulars of employees drawing remuneration in excess of the limits set out in the aforesaid Rules, forms part of this Report. However, in line with the provisions of Section 136(1) of the Act, the Report and Accounts as set out therein, are being sent to all Members of your Company excluding the aforesaid information. Any Member, who is interested in obtaining these particulars, may write to the Company Secretary at the Registered Office of your Company.

BUSINESS RESPONSIBILITY REPORT

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

CONTRACT AND ARRANGEMENT WITH RELATED PARTIES

During the financial year, your Company entered into related party transactions which were on arm''s length basis and in the ordinary course of business. There are no material transactions with any related party as defined under Section 188 of the Act read with the Companies (Meetings of Board and its Powers) Rules, 2014. All related party transactions have been approved by the Audit Committee of your Company and are reviewed by it on periodic basis.

The policy on Related Party Transactions as approved by the Audit Committee and the Board is available on your Company''s website viz. www.ultratechcement.com.

The details of contracts and arrangement with related parties of your Company for the financial year ended 31^stMarch, 2018 is given in Note 38 to the standalone financial statements of your Company.

DIRECTOR''S RESPONSIBILITY STATEMENT

The audited accounts for the year under review are in conformity with the requirements of the Act and the Accounting Standards. The financial statements reflect fairly the form and substance of transactions carried out during the year under review and reasonably present your Company''s financial condition and results of operations.

Your Directors confirm that:

i. in the preparation of the Annual Accounts, applicable accounting standards have been followed along with proper explanations relating to material departures, if any;

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

iii. proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of your Company and for preventing and detecting frauds and other irregularities;

iv. the Annual Accounts of your Company have been prepared on a going concern basis;

v. your Company had laid down internal financial controls and that such internal financial controls are adequate and were operating effectively;

vi. your Company has devised proper system to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

DIRECTORS

Re-appointment of Director

Mr. Kumar Mangalam Birla (DIN: 00012813) retires from office by rotation and being eligible, offers himself for re-appointment. A brief resume of Mr Birla forms part of the Notice of the ensuing AGM.

Meetings of the Board

The Board of Directors of your Company met 6 times during the year to deliberate on various matters. The meetings were held on 24^th April, 2017, 18^th July, 2017, 18^th October, 2017, 9^th December, 2017, 18^th January, 2018 and 19^th March, 2018. Further details on the Board of Directors are provided in the Corporate Governance Report forming part of this Annual Report.

Independent Directors'' Statement

Independent Directors on your Company''s Board have submitted declarations of independence to the effect that they meet the criteria of independence as provided in Section 149(6) of the Act and Regulation 16(1) (b) of the Listing Regulations.

Formal Annual Evaluation

The evaluation framework for assessing the performance of Directors of your Company comprises of contributions at the meetings, strategic perspective or inputs regarding the growth and performance of your Company, among others.

Pursuant to the provisions of the Act and the Listing Regulations, the Directors have carried out the annual performance evaluation of the Board, Independent Directors, Non-Executive Directors, Executive Directors, Committees and the Chairman of the Board.

The NRC and the Board have laid down the manner in which formal annual evaluation of the performance of the Board, its Committees and individual Directors has to be made. It includes circulation of evaluation forms separately for evaluation of the Board and its Committees, Independent Directors/Non-Executive Directors/Executive Directors and the Chairman of your Company.

The process of the annual performance evaluation broadly comprises:

Board and Committee Evaluation:

Evaluation of Board as a whole and the Committees is done by the individual Directors, followed by submission of collation to the NRC and feedback to the Board.

Independent / Non-Executive Directors Evaluation:

Evaluation done by Board members excluding the Director being evaluated is submitted to the Chairman of your Company and individual feedback provided to each Director.

Chairman/Executive Director Evaluation:

Evaluation as done by the individual Directors is submitted to the Chairperson of the NRC and subsequently to the Board.

The details of program for familiarization of Independent Directors of your Company are available on your Company''s website viz. www.ultratechcement.com.

Policy on Appointment and Remuneration of Directors and Key Managerial Personnel and Remuneration Policy

The NRC has formulated the Remuneration policy of your Company which is attached as Annexure VII to this report.

audit committee

The Audit Committee comprises of Mr. S. B. Mathur, Mr. G. M. Dave, Mrs. Renuka Ramnath, Mr. D. D. Rathi and Mrs. Alka Bharucha. The Committee comprises of majority of independent directors with Mr Mathur being the Chairman. Mr. K. K. Maheshwari, Managing Director and Mr Atul Daga, Whole-time Director & CFO are the permanent invitees.

Further details relating to the Audit Committee are provided in the Corporate Governance Report, forming part of this Annual Report.

During the year under review, all recommendations made by the Audit Committee were accepted by the Board.

VIGIL MECHANISM

Your Company has in place a vigil mechanism for directors and employees to report instances and concerns about unethical behavior, actual or suspected fraud or violation of your Company''s Code of Conduct. Adequate safeguards are provided against victimization of those who avail of the mechanism and direct access to the Chairman of the Audit Committee in exceptional cases is provided to them.

The vigil mechanism is available on your Company''s website viz. www.ultratechcement.com.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

The CCI by its order dated 31^st August, 2016, imposed a penalty on eleven companies, including your Company. The CCI order is pursuant to the directions issued by the Competition Appellate Tribunal (COMPAT) by its Order dated 11^th December, 2015 setting aside the original CCI order dated 20^th June, 2012 and remitting the matter to CCI for fresh adjudication of the issue and passing a fresh order. Your Company filed an appeal against the CCI Order before COMPAT. COMPAT has granted stay on the CCI order on condition that your Company deposit 10% of the penalty, amounting to Rs, 117.56 crores, which has since been deposited.

In a separate matter, the CCI by its order dated 19^th January, 2017 has imposed a penalty of Rs, 68.30 crores on your Company pursuant to a reference filed by the Government of Haryana. Your Company has filed an appeal against the said CCI order before COMPAT. COMPAT has granted stay on the said CCI order.

The Government has made changes in the constitution and operations of Tribunals, under which all matters with COMPAT have been transferred to the National Company Law Appellate Tribunal (NCLAT). Hearing of order dated 31^st August, 2016 is completed at NCLAT and the order is awaited.

Your Company backed by a legal opinion, believes that it has a good case in both the matters and accordingly no provision

AUDITORS Statutory Auditors

Pursuant to the provisions of Section 139 of the Act and the Companies (Audit and Auditors) Rules, 2014, M/s. BSR & Co. LLP, Chartered Accountants, Mumbai (Registration No: 101248W/W-100022) and M/s. Khimji Kunverji & Co., Chartered Accountants, Mumbai (Registration No: 105146W) had been appointed as Joint Statutory Auditors of your Company for a term of five years until the conclusion of the 20^th and 21^st AGM respectively. In terms of the provisions of the Act, your ratification to their appointment as Joint Statutory Auditors of your Company is being sought at the ensuing AGM and forms part of the Notice convening the AGM. The Joint Statutory Auditors have confirmed that they are not disqualified to act as Auditors and are eligible to hold office as Auditors of your Company.

The observations made in the Auditor''s Report are self-explanatory and therefore, do not call for any further comments under Section 134(3)(f) of the Act.

Cost Auditors

In terms of the provisions of Section 148 of the Act read with the Companies (Cost Records and Audit) Amendment Rules, 2014, the Board of Directors of your Company have on the recommendation of the Audit Committee appointed M/s. D. C. Dave & Co., Cost Accountants, Mumbai and M/s. N. D. Birla & Co., Cost Accountants, Ahmadabad, to conduct the cost audit of your Company for the financial year ending 31^st March, 2019, at a remuneration as mentioned in the Notice convening the AGM.

As required under the Act, the remuneration payable to cost auditors has to be placed before the Members at a general meeting for ratification. Hence, a resolution seeking your ratification for the remuneration payable to the Cost Auditors forms part of the Notice of the ensuing AGM.

Secretarial Auditor

In terms of the provisions of Section 204 of the Act read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board has appointed M/s. BNP & Associates, Company Secretaries, Mumbai as Secretarial Auditors for conducting Secretarial Audit of your Company for the financial year ended 31^st March, 2018. The report of the Secretarial Auditor is attached as Annexure VIII. The

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

Your Company is in compliance with the Secretarial Standards specified by the Institute of Company Secretaries of India.

EXTRACT OF Annual Return

In terms of the provisions of Section 92 (3) of the Act read with the Companies (Management and Administration) Rules, 2014, an extract of the Annual Return of your Company for the financial year ended 31^st March, 2018 is given in Annexure IX to this Report.

OTHER Disclosures

- There were no material changes and commitments affecting the financial position of your Company between the end of the financial year and the date of this report.

- Your Company has not issued any shares with differential voting rights.

- There was no revision in the financial statements.

- There has been no change in the nature of business of your Company.

- Your Company has not issued any sweat equity shares.

- During the year your Company has not received any complaints under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

cautionary statement

Statements in the Directors Report and the Management Discussion and Analysis describing the Company''s objectives, projections, estimates, expectations or predictions may be “forward looking statements" within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could make a difference to your Company''s operations include global and Indian demand supply conditions, finished goods prices, feed stock availability and prices, cyclical demand and pricing in your Company''s principal markets, changes in Government regulations, tax regimes, economic developments within India and the countries within which your Company conducts business and other factors such as litigation and labour negotiations. Your Company is not obliged to publicly amend, modify or revise any forward looking statements, on the basis of any subsequent development, information or events or otherwise.

ACKNOWLEDGEMENT

Your Directors express their deep sense of gratitude to the banks, financial institutions, stakeholders, business associates, Central and State Governments for their support and look forward to their continued assistance in future. We thank our employees for their contribution to your Company''s performance. We applaud them for their superior levels of competence, dedication and commitment to your Company.

For and on behalf of the Board

Kumar Mangalam Birla

Chairman

(DIN: 00012813)

Mumbai, 25^th April, 2018

---

Mar 31, 2017

Dear Shareholders,

The Directors present the Seventeenth Annual Report together with the Audited Accounts of your Company for the year ended 31^st March, 2017.

Net Turnover:

FINANCIAL PERFORMANCE

(Rs, in crores)

	standalone		consolidated
	2016-17	2015-16	2016-17	2015-16
Net Turnover	23,616	23,440	25,092	24,880
Domestic	23,191	23,137	23,191	23,137
Exports	425	303	1,901	1,743
Other Income	936	749	931	737
Total Expenditure	18,922	19,082	20,163	20,252
Profit before Interest, Depreciation and Tax (PBIDT)	5,629	5,107	5,861	5,365
Less: Depreciation	1,268	1,297	1,349	1,377
Profit before Interest and Tax (PBIT)	4,361	3,810	4,512	3,988
Interest	571	512	640	566
Profit before Impairment and Tax Expenses / share in profit of Associates	3,790	3,299	3,872	3,422
Provision for diminution in value of Investment	(14)	-	-	-
Profit before Tax Expenses	3,776	3,299	3,872	3,422
Tax Expenses	1,148	928	1,158	942
Profit after tax	2,628	2,370	2,714	2,480
Profit attributable to Non-controlling Interest	-	-	(1)	2
Profit attributable to Owner of the parent	2,628	2,370	2,715	2,478
Balance brought forward from previous year	4,396	3,866	4,613	3,975
Less: Appropriations:
Re-measurement gain/loss on defined benefit plan	(13)	(3)	(13)	(3)
Transfer to General Reserve	(2,000)	(1,500)	(2,000)	(1,500)
Transfer to Debenture Redemption Reserve	96	(44)	96	(44)
Dividend on Equity Shares	(261)	(247)	(261)	(247)
Tax on Dividend	(50)	(46)	(50)	(46)
Net Balance for the year	4,796	4,396	5,100	4,613

The financial statements have been prepared in accordance with Ind AS notified under the Companies (Indian Accounting Standards) Rules, 2015 as amended by the Companies (Indian Accounting Standards) (Amendment) Rules, 2016 and the relevant provisions of the Companies Act, 2013 ("the Act”) and guidelines issued by the Securities and Exchange Board of India ("SEBI"). The date of transition to Ind AS is from 1^st April, 2015. The Consolidated Financial Statements have been prepared in accordance with the provisions of the Act, read with the Companies (Accounts) Rules, 2014, applicable Indian Accounting Standards and the provisions of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("the Listing Regulations"). These form part of the Annual Report.

Your Company''s net turnover at Rs, 23,616 crores is marginally higher over the previous year mainly on account of higher sales volume. Cement prices were down from Rs, 4,757/t to Rs, 4,706/t due to surplus capacity in the sector.

Other Income:

Other income is up by 25% compared to the previous year. Your Company has reversed a provision of Rs, 138 crores related to the earlier years. Besides this, other income was augmented, given higher income on increase in surplus funds, deployed in secured debt instruments.

Operating Profit (PBIDT) and Margin:

PBIDT for the year at Rs, 5,629 crores is up by 10%. PBIDT margin rose from 22% to 24%.

Cost Highlights:

(i) Energy Cost:

The overall energy cost declined by 7% from Rs, 824/t during the previous year to Rs, 763/t, driven by increase in the usage of pet coke, industrial waste, and efficiency improvements, coupled with the benefit of lower pet coke prices during part of the year.

The use of pet coke in the kilns extended to 74% from 70% in the previous year. Your Company has also improved the efficiencies of its plant and machinery, resulting in 3% lower power consumption. Besides pet coke, your Company is also increasing the usage of industrial waste. Your Company has disposed of around 1.5 LMT of waste in the kilns, resulting in the saving of the total fuel requirement by about 2%. The increase in the share of waste heat recovery to 7% of the total power requirement of the Company led to reduced consumption of coal and pet coke.

(ii) Input material cost:

Raw materials cost remained stable at Rs, 467/t.

(iii) Freight and Forwarding expenses:

Logistics cost reduced from Rs, 1,099/t to Rs, 1,074/t, although diesel prices were up about 13% for the year, consequent to the reduction in the average lead distance with improved utilization of new cement grinding capacities, rationalization of road freight rates and increased coastal movement.

(iv) Employee costs:

Employee costs registered an increase of 5% from Rs, 1,343 crores in the previous year to Rs, 1,413 crores, on account of normal annual increments and commissioning of new plants.

Depreciation:

Depreciation for the year at Rs, 1,268 crores is lower by Rs, 29 crores. During the previous year, your Company had componentized its property, plant and equipment. This had resulted in higher depreciation.

Finance Cost:

The finance cost at Rs, 571 crores is higher by Rs, 59 crores as compared to Rs, 512 crores mainly on account of provision for interest on entry tax pertaining to earlier years and lower benefit of interest subsidy due to the completion of the government grant period.

Your Company does not accept any fixed deposits from the public falling under Section 73 of the Act and the Companies (Acceptance of Deposits) Rules, 2014.

Your Company has adequate liquidity and a strong Balance Sheet. CRISIL has re-affirmed its credit rating as CRISIL AAA for Long Term and CRISIL A1 for Short Term.

Income Tax:

The income tax expenses increased in line with increase in taxable income.

Net Profit:

Profit after tax for the year increased by 11% from Rs, 2,370 crores in the previous year to Rs, 2,628 crores.

Cash Flow Statement

(Rs, in crores)

	FY17	FY16
Sources of Cash
Cash from operations	4,233	3,833
Non-operating cash flow	138	143
Proceeds from issue of share capital	7	3
Increase in borrowings	-	246
Decrease in working capital	488	521
Total	4,866	4,746
Uses of Cash
Net capital expenditure	1,232	2,059
Increase in investment	1,270	1,840
Repayment of borrowings (net)	1,534	-
Interest	547	539
Dividend	308	293
Total	4,891	4,731
Increase / (Decrease) in cash & cash equivalents	(25)	15

Sources of Cash Cash from operations:

Cash from operations was higher compared to the previous year due to higher sales volume and lower cost of production.

Decrease in Working Capital:

To improve liquidity, your Company has tightened the working capital norms by reducing the inventory of stores and spares, improving debtors realization and implementing appropriate payment norms for suppliers.

Uses of Cash Decrease in Borrowings:

During the year, your Company raised Rs, 2,878 crores of long-term debt in the form of non-convertible debentures and external commercial borrowings. Your Company has repaid long-term loan of around Rs, 3,089 crores in line with the repayment schedule and short-term borrowings decreased by Rs, 1,323 crores.

Net capital expenditure

Your Company spent over Rs, 1,200 crores on its capital expenditure plans, a significant part of which was towards the balance work of the new grinding capacity commissioned during the year. Besides this, your Company also spent on capex for meeting regulatory requirements, plant upkeep and improving efficiencies.

Transfer to General Reserve

Your Company proposes to transfer an amount of Rs, 2,000 crores to the General Reserves.

dividend

Your Directors have recommended a dividend of Rs, 10 /- per equity share (Rs, 9.50/- per equity share in the previous year) of Rs, 10/- each for the year ended 31^st March, 2017. The dividend distribution would result in a cash outgo of Rs, 330 crores (including tax on dividend of Rs, 56 crores) compared to Rs, 314 crores (including tax on dividend of Rs, 53 crores) paid for 2015-16.

In terms of the provisions of Regulation 43A of the Listing Regulations, your Company has formulated a dividend distribution policy. The policy is given in Annexure I to this Report and is also accessible from your Company''s website www.ultratechcement.com.

capital expenditure plan

During the year, your Company commissioned cement grinding units at Nagpur, Maharashtra and at Patliputra, Bihar.

To cater to the markets of south-west Madhya Pradesh, the Board of Directors have approved the setting up of an integrated cement plant at Dhar, Madhya Pradesh with a capacity of 3.5 MTPA and at a total cost of Rs, 2,600 crores. The commercial production from the plant is expected to commence by Q4FY19.

The capital expenditure during the next financial year is expected to be approximately Rs, 2,200 crores, mainly for capacity expansion projects, regulatory requirements, plant infrastructure and routine maintenance.

corporate development

The Board of Directors of your Company at its meeting on 4^th July, 2016 approved a Scheme of Arrangement ("the Scheme") between Jaiprakash Associates Limited ("JAL"), Jaypee Cement Corporation Limited ("JCCL") wholly-owned subsidiary of JAL and your Company for the acquisition of identified cement plants of JAL and JCCL in the States of Madhya Pradesh, Uttar Pradesh, Himachal Pradesh, Uttarakhand and Andhra Pradesh, having a capacity of 21.20 MTPA at an enterprise value of Rs,16,189 crores. The Scheme has been approved by the shareholders and creditors of your Company. It has also received the sanction of the Competition Commission of India, the Hon''ble National Company Law Tribunal and the SEBI. The Scheme will be made effective by the Board of Directors of your Company and those of JAL and JCCL after receiving the remaining approvals.

corporate governance

Your Directors reaffirm their continued commitment to good corporate governance practices. During the year under review, your Company was in compliance with the provisions relating to corporate governance as provided under the Listing Regulations. The compliance report is provided in the Corporate Governance section of this Annual Report. The auditor''s certificate on compliance with the conditions of corporate governance of the Listing Regulations is given in Annexure II to this Report.

employee stock option schemes Esos - 2006

The Nomination, Remuneration and Compensation Committee ("the NRC") allotted 13,439 equity shares of Rs, 10/- each of your Company upon exercise of Stock Options by the employees. During the year, 1,633 Stock Options have vested in eligible employees.

esos - 2013

The NRC granted 44,411 Stock Options and 15,687 Restricted Stock Units ("RSUs") to eligible employees of your Company. During the year, 56,154 Stock Options and 57,799 RSUs have vested in eligible employees. The NRC allotted 63,090 equity shares of Rs,10/- each of your Company upon exercise of Stock Options and RSUs by the employees.

In terms of the provisions of the SEBI (Share Based Employee Benefits) Regulations, 2014, the details of the Stock Options and RSUs granted under the above mentioned Schemes are available on your Company''s website viz. www.ultratechcement.com.

A certificate from the Statutory Auditor on the implementation of your Company''s Employees Stock Option Schemes will be placed at the ensuing Annual General Meeting for inspection by the Members.

awards

Your Company''s efforts in various areas of its operations continue to receive accolades. Some of the prestigious awards conferred on your Company during the year are:

- "Gold Award" under CSR Category in the cement sector for excellent contribution under CSR : Vikram Cement Works;

- National Awards for Manufacturing Competitiveness (NAMC) 2015-16 in Building Material & Cement Sector: Aditya Cement Works;

- Golden Peacock Award for CSR: Birla White;

- Appreciation plaque by FICCI for commendable work in the field CSR: Hirmi Cement Works;

- Certificate of Merit for achieving zero accident frequency rate by National Safety Council: Ratnagiri Cement Works;

- GreenCo Gold Rating by CII: Reddipalayam Cement Works;

- Frost & Sullivan Sustainability 4.0 awards: Reddipalayam Cement Works.

RESEARCH AND DEVELOPMENT

Your Company''s Research and Development ("R&D”) function has been restructured and integrated into ''One R&D Cell'' to consistently and more efficiently contribute to sustained growth of the business by providing top innovative and environmental friendly solutions in cement and concrete manufacturing. Continuous product development and enhancing process productivity are its forte, aimed at creating greater customer value and delight while at the same time reducing the cost of products. The One R&D Cell provides comprehensive scientific and technological support to the business while promoting sustainability initiatives and developmental goals.

The R&D activities of your Company include basic as well as applied research. The aim is fostering a better understanding and development of futuristic, low-cost, high-quality and energy-saving cement and concrete types, bridging the gap between theory and practice of the Indian construction industry. Customer satisfaction, innovation and quality improvement, cost and energy reduction are the governing attributes of all R&D projects. Achieving cement process optimization and debottlenecking, limestone deposit conservation and significant use of alternative fuels and raw materials complying with increasingly stricter environmental norms form the mandate. Towards this end, your Company has developed several new products and additives that aid in limestone conservation, energy savings. It also enhances the durability of concrete and concrete structures. Your Company continues to maximize the use of industrial by-products (slag, fly ash, waste gypsum) and alternative fuels (petcoke, solid and liquid chemical wastes) while maintaining high quality product attributes and functionality.

Your Company collaborates with the Aditya Birla Science and Technology Company Private Limited ("ABSTCPL”), which is the corporate research and development centre for the Aditya Birla Group. Current projects undertaken by ABSTCPL scientists include the use of computational or modeling methods for enhancing cement process productivity.

human resources

Your Company believes that its human capital will be the key to drive future progress and bring in differentiated growth. To facilitate this future-readiness, your Company has been focusing on effective skill building and development programs that equip its work-force take on larger and higher roles. As part of the development initiative, a number of employees were rotated from their existing roles to new roles.

Your Company is committed to strengthening its Employee Value Proposition while creating a World of Opportunities. Several initiatives to engage its employees were taken. Their effectiveness is reflected as improvement in Employee Engagement scores in 2016. Initiatives driven by your Company''s Sales & Service Academy run flagship programs like Front Step and Next Step covering the frontline sales employees and developing them for effectiveness and growth. The Technical Training Centre drove technical effectiveness and business simulation programs for various levels of managers. A career building program called Step Ahead was launched in collaboration with Xavier Institute of Management (XLRI) for developing managers for higher roles. As on 31^st March, 2017, your Company''s employee strength stood at 14,240 employees (14,410 employees).

SAFETY

The safety excellence journey is a continuing process at your Company. The safety of the people working for and on behalf of your Company is an integral part of business. Your Company''s Managing Director chairs the Safety Board, which reviews the safety performance of your Company on a regular basis. In addition, there are eight safety sub-committees headed by senior leaders to closely monitor various key performance indicators related to safety. During the year, more than 600,000 safety observations have been carried out to identify unsafe acts and conditions, out of which more than 90% of actions have been addressed to make our workplace safer. Corporate safety audit by cross functional teams and structural stability assessment by third parties is carried out across your Company''s locations and around 95% of identified high-priority points have been completed to ensure that the structures across our Units are safe.

corporate social responsibility

In terms of the provisions of Section 135 of the Act read with Companies (Corporate Social Responsibility Policy) Rules, 2014, the Board of Directors of your Company has constituted a Corporate Social Responsibility ("CSR”) Committee which is chaired by Mrs. Rajashree Birla. The other Members of the Committee are Mr. G. M. Dave, Independent Director, Mr. O. P. Puranmalka, Non-Executive Director and Mr. K. K. Maheshwari, Managing Director. Dr. Pragnya Ram, Group Executive President, Corporate Communication & CSR is a permanent invitee to the Committee. Your Company also has in place a CSR Policy which is accessible on your Company''s website viz. www.ultratechcement.com.

Your Company''s CSR activities are focused on Social Empowerment & Welfare, Infrastructure Development, Sustainable Livelihood, Health Care and Education. Various activities have been initiated during the year in neighboring villages around its Units resulting in a spend of '' 54.15 crores, being more than 2% of the average net profits of the last three financial years for the purposes of CSR. Your Company has also identified projects under the Swachha Bharat Abhiyaan, work on which is being carried out in all earnest.

A report on CSR activities is attached as Annexure III forming part of this Report.

SUBSIDIARY, JOINT VENTURE OR ASSOCIATE COMPANIES

In the matter of your Company''s wholly-owned subsidiary, Gotan Lime Stone Khanij Udyog Private Limited ("GKUPL”), the Supreme Court of India has directed the State of Rajasthan to frame and notify its policy relating to transfer of mining lease and thereafter pass appropriate order in respect of the mining lease of GKUPL. Your Company is in the process of making an application for the transfer of mines under the State Government''s new policy related to transfer of mining lease.

The audited financial statements of your Company''s subsidiaries and joint venture viz. Dakshin Cements Limited, Harish Cement Limited, GKUPL, Bhagwati Lime Stone Company Private Limited, UltraTech Cement Middle East Investments Limited, UltraTech Cement Lanka (Pvt.) Limited, PT UltraTech Mining Indonesia and PT UltraTech Investments Indonesia as well as related information are accessible on the website of your Company viz. www.ultratechcement.com and also available for inspection during business hours at the Registered Office of your Company. Any Member, who is interested in obtaining a copy of the audited financial statements of your Company''s subsidiaries may write to the Company Secretary at the Registered Office of your Company.

In accordance with the provisions of Section 129(3) of the Act, read with the Companies (Accounts) Rules, 2014, a report on the performance and financial position of each of the subsidiaries, associates and joint ventures is attached as Annexure IV to this Report.

particulars of loan, guarantee and investment

Details of loan, guarantee and investment covered under the provisions of Section 186 of the Act read with the Companies (Meetings of Board and its Powers) Rules, 2014 are given in the Notes to the financial statements.

energy; technology and foreign exchange

Information on conservation of energy, technology absorption and foreign exchange earnings and outgo, required to be disclosed pursuant to Section 134(3)(m) of the Act read with the Companies (Accounts) Rules, 2014 is given in Annexure V to this Report.

particulars of employees

Disclosures pertaining to remuneration and other details as required under Section 197(12) read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are attached as Annexure VI. In accordance with the provisions of Section 197(12) of the Act read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the names and other particulars of employees drawing remuneration in excess of the limits set out in the aforesaid Rules, forms part of this Report. However, in line with the provisions of Section 136(1) of the Act, the Report and Accounts as set out therein, are being sent to all Members of your Company excluding the aforesaid information. Any Member, who is interested in obtaining these particulars, may write to the Company Secretary at the Registered Office of your Company.

directors'' responsibility statement

The audited accounts for the year under review are in conformity with the requirements of the Act and the Accounting Standards. The financial statements reflect fairly the form and substance of transactions carried out during the year under review and reasonably present your Company''s financial condition and results of operations.

Your Directors confirm that:

i. in the preparation of the Annual Accounts, applicable accounting standards have been followed along with proper explanations relating to material departures, if any;

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

iii. proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of your Company and for preventing and detecting frauds and other irregularities;

iv. the Annual Accounts of your Company have been prepared on a going concern basis;

v. your Company had laid down internal financial controls and that such internal financial controls are adequate and were operating effectively;

vi. your Company has devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

directors

Changes in the constitution of the Board

Mr. R. C. Bhargava and Mr. Rajiv Dube resigned as directors from the Board of your Company with effect from 20^th July, 2016. The Board places on record its deep appreciation for the services rendered by Mr. Bhargava and Mr. Dube during their tenure as Members of the Board.

Mr. D. D. Rathi (DIN: 00012575) retires from office by rotation and being eligible, offers himself for re-appointment. A brief resumes of Mr. Rathi forms part of the Notice of the ensuing Annual General Meeting.

During the financial year 2016-17, Mr. K. K. Maheshwari, Managing Director and Mr. Atul Daga, Whole-time Director & Chief Financial Officer have not received any commission / remuneration from your Company''s holding as well as subsidiary companies.

Meetings of the Board

The Board of Directors of your Company met 7 times during the year to deliberate on various matters. The meetings were held on 25^th April, 2016, 9^th June, 2016, 4^th July, 2016, 19^th July, 2016, 17^th October, 2016, 21^st January, 2017 and 14^th February, 2017. Further details on the Board of Directors are provided in the Corporate Governance Report forming part of this Annual Report.

Independent Directors'' Statement

Independent Directors on your Company''s Board have submitted declarations of independence to the effect that they meet the criteria of independence as provided in Section 149(6) of the Act and Regulation 16(1)(b) of the Listing Regulations.

Formal Annual Evaluation

The evaluation framework for assessing the performance of Directors of your Company comprises of contributions at the meetings, strategic perspective or inputs regarding the growth and performance of your Company, among others.

Pursuant to the provisions of the Act and the Listing Regulations, the Directors have carried out the annual performance evaluation of the Board, Independent Directors, Non-executive Directors, Executive Directors, Committees and the Chairman of the Board. The manner of evaluation is provided in the Corporate Governance Report.

The details of program for familiarization of Independent Directors of your Company are accessible on your Company''s website viz. www.ultratechcement.com

Policy on Appointment and Remuneration of Directors and Key Managerial Personnel and Remuneration Policy

The NRC has formulated the Remuneration policy of your Company which is attached as Annexure VII to this Report.

KEY MANAGERIAL PERSONNEL

In terms of the provisions of Section 203 of the Act, Mr. K. K. Maheshwari, Managing Director; Mr. Atul Daga, Whole-time Director & CFO and Mr. S. K. Chatterjee, Company Secretary are the Key Managerial Personnel of your Company.

AUDIT COMMITTEE

With Mr. R.C. Bhargava stepping down from your Company''s Board, the Audit Committee has been re-constituted with the induction of Mr. S. B. Mathur, Mr. D. D. Rathi and Mrs. Alka

Bharucha. The Committee now comprises of Mr. S. B. Mathur, Mr. G. M. Dave, Mrs. Renuka Ramnath, Mr. D. D. Rathi and Mrs. Alka Bharucha. The Committee comprises of majority of independent directors with Mr. Mathur being the Chairman. Mr. K. K. Maheshwari, Managing Director and Mr. Atul Daga, Whole-time Director & CFO are the permanent invitees. Further details relating to the Audit Committee are provided in the Corporate Governance Report forming part of this Annual Report.

VIGIL MECHANISM

Your Company has in place a vigil mechanism for Directors and employees to report instances and concerns about unethical behavior, actual or suspected fraud or violation of your Company''s Code of Conduct. Adequate safeguards are provided against victimization to those who avail the mechanism and direct access to the Chairman of the Audit Committee in exceptional cases is provided to them.

The vigil mechanism is accessible on your Company''s website viz. www.ultratechcement.com.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

The Competition Commission of India ("CCI”) vide its order dated 31^st August, 2016, imposed a penalty on eleven companies, including your Company. The CCI order is pursuant to the directions issued by the Competition Appellate Tribunal ("COMPAT”) vide its order dated 11^th December, 2015 setting aside the original CCI order dated 20^th June, 2012 and remitting the matter to CCI for fresh adjudication of the issue and passing a fresh order. Your Company filed an appeal against the CCI Order before COMPAT. COMPAT has granted stay on the CCI order on condition that your Company deposit 10% of the penalty, amounting to Rs, 117.56 crores, which has since been deposited.

In a separate matter, the CCI vide its order dated 19^th January, 2017 has imposed a penalty of Rs, 68.30 crores on your Company pursuant to a reference filed by the Government of Haryana. Your Company has filed an appeal against the said CCI order before COMPAT. COMPAT has granted stay on the said CCI order. Your Company, backed by a legal opinion, continues to believe that it has a good case and accordingly no provision has been made in the accounts on account of these two matters.

AUDITORS Statutory Auditors

Pursuant to the provisions of Section 139 of the Act and the Companies (Audit and Auditors) Rules, 2014, M/s. BSR & Co. LLP, Chartered Accountants, Mumbai (Registration No: 101248W/W-100022) and M/s. Khimji Kunverji & Co., Chartered Accountants, Mumbai (Registration No: 105146W) had been appointed as Joint Statutory Auditors of your Company for a term of five years until the conclusion of the 20^th Annual General Meeting ("AGM”) and 21^st AGM respectively. In terms of the provisions of the Act, your ratification to their appointment as Joint Statutory Auditors of your Company is being sought at the ensuing AGM and forms part of the Notice convening the said meeting. The Joint Statutory Auditors have confirmed that they are not disqualified to act as Auditors and are eligible to hold office as Auditors of your Company.

The observation made in the Auditor''s Report are self-explanatory and therefore, do not call for any further comments under Section 134(3)(f) of the Act.

Cost Auditors

In terms of the provisions of Section 148 of the Act read with the Companies (Cost Records and Audit) Amendment Rules, 2014, the Board of Directors of your Company have on the recommendation of the Audit Committee, appointed M/s. D. C. Dave & Co., Cost Accountants, Mumbai and M/s. N. D. Birla & Co., Cost Accountants, Ahmadabad, as Cost Auditors, to conduct the cost audit of your Company for the financial year ending 31^st March, 2018 at a remuneration as mentioned in the Notice convening the AGM.

As required under the Act, the remuneration payable to cost auditors has to be placed before the Members at a general meeting for ratification. Accordingly, a resolution seeking your ratification for the remuneration payable to the Cost Auditors forms part of the Notice of the ensuing AGM.

Secretarial Auditor

In terms of the provisions of Section 204 of the Act read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board has appointed M/s. BNP & Associates, Company Secretaries, Mumbai as Secretarial Auditor for conducting the Secretarial Audit of your Company for the financial year ended 31^st March, 2017. The report of the Secretarial Auditor is attached as Annexure VIII. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.

EXTRACT OF ANNUAL RETURN

In terms of the provisions of Section 92 (3) of the Act read with the Companies (Management and Administration) Rules, 2014, an extract of the Annual Return of your Company for the financial year ended 31^st March, 2017 is given in Annexure IX to this Report.

policy on prevention of sexual harassment at workplace

Your Company is committed to providing a safe and conducive work environment to all of its employees and associates.

Your Company has in place a Policy on Prevention of Sexual Harassment at Workplace, which is applicable to all employees of your Company, as per the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 ("Prevention of Sexual Harassment of Women at Workplace Act”).

Your Company ensures organization wide dissemination of the Policy by conducting regular sessions throughout the year.

During the financial year 2016-17, your Company did not receive any complaints under Prevention of Sexual Harassment of Women at Workplace Act.

OTHER DISCLOSURES

- There were no material changes and commitments affecting the financial position of your Company between end of the financial year and the date of this Report.

- Your Company has not issued any shares with differential voting.

- There was no revision in the financial statements.

- Your Company has not issued any sweat equity shares. CAUTIONARY STATEMENT

Statements in the Directors'' Report and the Management Discussion and Analysis describing the Company''s objectives, projections, estimates, expectations or predictions may be "forward looking statements” within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could make a difference to your Company''s operations include global and Indian demand supply conditions, finished goods prices, feed stock availability and prices, cyclical demand and pricing in your Company''s principal markets, changes in Government regulations, tax regimes, economic developments within India and the countries within which your Company conducts business and other factors such as litigation and labour negotiations. Your Company is not obliged to publicly amend, modify or revise any forward looking statements, on the basis of any subsequent development, information or events or otherwise.

ACKNOWLEDGEMENT

Your Directors express their deep sense of gratitude to the banks, financial institutions, stakeholders, business associates, Central and State Governments for their co-operation and support and look forward to their continued support in future. We thank our employees for their contribution to your Company''s performance. We applaud them for their superior levels of competence, dedication and commitment to your Company.

For and on behalf of the Board

Kumar Mangalam Birla Chairman

(DIN: 00012813)

Mumbai, 24^th April, 2017

---

Mar 31, 2015

Dear Members,

The Directors present the Fifteenth Annual Report together with the Audited Accounts of your Company for the year ended 31st March, 2015.

FINANCIAL RESULTS

(Rs. in crores)

2014-15 2013-14

Net Turnover 22,656 20,078

Profit before Interest, Depreciation and Tax (PBIDT) 4,567 4,147

Less: Depreciation 1,133 1,052

Profit before Interest and Tax (PBIT) 3,434 3,095

Interest 547 319

Profit before Tax Expenses 2,887 2,776

Tax Expenses 872 631

Profitaftertax 2,015 2,144

Less: Appropriation:

Adjustment related to Fixed Assets 76 -

Transfer to General Reserve 1,250 1,800

Transfer to / (utilisation from) Debenture Redemption Reserve 216 (57)

Proposed Dividend on Equity Shares 247 247

Tax on Dividend 50 42

Net Balance for the year 175 112

(The figures for 2014-15 include those of the acquired Gujarat Units of Jaypee Cement Corporation Limited and are therefore not strictly comparable with the previous year's figures)

OVERVIEW AND THE STATE OF THE COMPANY'S AFFAIRS

The year under review witnessed sluggish demand overall, with prices under pressure. The year also saw continuing rise in the price of input material and logistics costs. As the economy picks up and given the government's increased focus on the infrastructure and housing sector, the cement industry is expected to put behind another year of low demand. However, the increase in freight and raw material costs is likely to continue, thus, impacting margins in the short term. Your Company's on-going costs optimisation measures helped in containing costs to some extent.

Against this background, your Company produced 43.88 MMT of cement as against 40.79 MMT in the previous year. The effective capacity utilisation was 75% as against 79%.

The aggregate sales volume increased by 8% from 41.46 MMT to 44.85 MMT, while for white cement and related products it was 12.25 LMT (11.41 LMT).

Your Company's net turnover stood at Rs. 22,656 crores vis-a-vis Rs. 20,078 crores in the previous year. Profit before interest, depreciation and tax was at Rs. 4,567 crores as against Rs. 4,147 crores.

DIVIDEND

Your Directors have recommended a dividend of Rs. 9/- per equity share (Rs. 9/- per equity share in the previous year) of Rs. 10/- each for the year ended 31st March, 2015. The dividend distribution would result in a cash outgo of Rs. 297 crores (including tax on dividend of Rs. 50 crores) compared to Rs. 289 crores (including tax on dividend of Rs. 42 crores) paid for the year 2013-14.

CAPITAL EXPENDITURE

Your Company's expansion plans are on track. During the year, your Company has commissioned:

* a 25 MW thermal power plant at Rajashree Cement Works, Karnataka

* a 25 MW thermal power plant at Andhra Pradesh Cement Works

* a 10 MW Waste Heat Recovery System at Aditya Cement Works, Rajasthan

* a 6.5 MW Waste Heat Recovery System at Awarpur Cement Works, Maharashtra

* a 6 MW Waste Heat Recovery System at Rajashree Cement Works, Karnataka

* a 1.4 MTPA cement mill at Rajashree Cement Works, Karnataka

* a 2.0 MTPA clinkerisation plant at Aditya Cement Works, Rajasthan

A judicial mix of internal accruals and borrowings have been used for funding of the projects.

CORPORATE DEVELOPMENT Scheme of Arrangement

* Acquisition of cement units of Jaypee Cement Corporation Limited in Gujarat

Your Company completed the acquisition of the Gujarat units of Jaypee Cement Corporation Limited ("JCCL") comprising of an integrated unit at Sewagram and a grinding unit at Wanakbori, with a combined capacity of 4.8 MTPA, at an enterprise value of Rs. 3,800 crores besides the actual net working capital at closing, with effect from 12th June, 2014. Upon effectiveness, your Company has taken over all the assets and liabilities of the acquired units and the net amount of enterprise value less liabilities taken over, being the consideration, has been discharged by allotment of 141,643 equity shares of Rs. 10/- each, fully paid-up to the shareholders of JCCL.

* Acquisition of cement units of Jaiprakash Associates Limited in Madhya Pradesh

During the year, the Board of Directors of your Company approved the acquisition of the cement units of Jaiprakash Associates Limited ("JAL") situated at Bela and Sidhi in Madhya Pradesh, having a capacity of 4.9 MTPA together with a thermal power generation capacity of 180 MW.

The transaction, being carried out by way of a Scheme of Arrangement in terms of the provisions of the Companies Act, 1956, is subject to the approval of the shareholders and creditors of both the companies, the High Courts, the Competition Commission of India and other statutory approvals. The shareholders and creditors of both the companies have since approved the Scheme. The Competition Commission of India has also approved the transaction.

Your Company shall issue Non-Convertible Debentures worth Rs. 4,538 crores and Non-Convertible Cumulative Redeemable Preference Shares worth Rs. 10 lacs to JAL and shall take over Rs. 626.50 crores of debt and negative working capital of Rs. 160.50 crores, subject to closing adjustments.

This acquisition will raise your Company's cement capacity in India from 60.2 MTPA to 65.1 MTPA. With your Company's current projects underway, the capacity in India will grow to 71.2 MTPA at the end of the financial year 2015-16.

Coal Blocks

The Supreme Court of India by its judgment dated 25th August, 2014 read with its Order dated 24th September, 2014 cancelled 204 coal blocks which had been allocated earlier for the purposes of mining coal for captive consumption. These include two coal blocks allotted to your Company jointly with others, viz. Bhaskarpara and Madanpur (North) in Chhattisgarh. No mining activity had commenced on these blocks and the cancellation will not have any material adverse impact on your Company.

Subsequent to the Supreme Court judgment, the Central Government promulgated Ordinances dated 21st October, 2014 and 26th December, 2014 for allotment and auction of 204 coal blocks. The Ministry of Coal has also framed Rules u/s 29 of The Coal Mines (Special Provision) Ordinance, 2014 and notified on 11th December, 2014 the auction and allotment of all the above mentioned coal blocks.

Your Company participated in the e-auction conducted by the Central Government for allocation of the coal blocks and has been awarded the Bicharpur coal block situated in Madhya Pradesh, which has a 29.12 MMT reserve. Commercial production from the mine is expected to commence from FY18. The primary consideration for obtaining the mines is to ensure your Company's coal security.

As regards its investment in the cancelled coal blocks, your Company is likely to recover most of the expenditure from the new allottees in terms of the ordinances promulgated by the Central Government.

Competition Commission of India

The Competition Commission of India ("CCI") upheld the complaint of alleged cartelisation against certain cement manufacturing companies including your Company by its order dated 20th June, 2012. The CCI has imposed a penalty of Rs. 1,175.49 crores on your Company. Your Company filed an appeal against the Order before the Competition Appellate Tribunal ("COMPAT"). COMPAT has granted stay on the CCI order on condition that your Company deposit 10% of the penalty, amounting to Rs. 117.55 crores. The same has been deposited by your Company. Your Company backed by a legal opinion, continues to believe that it has a good case and accordingly no provision has been made in the accounts.

CORPORATE GOVERNANCE

Your Directors reaffirm their continued commitment to good corporate governance practices. During the year under review, your Company was in compliance with the provisions of Clause 49 of the Listing Agreement with the stock exchanges relating to corporate governance.

The compliance report is provided in the Corporate Governance section of the Annual Report. The auditor's certificate on compliance with the provisions of Clause 49 of the Listing Agreement is given in Annexure I to this Report.

EMPLOYEE STOCK OPTION SCHEMES

ESOS - 2006

During the year, 13,403 Stock Options were vested in eligible employees. The Nomination, Remuneration and Compensation Committee ("the NRC") allotted 21,597 equity shares of Rs. 10/- each of your Company upon exercise of Stock Options by the employees.

ESOS - 2013

During the year, the NRC granted 41,139 Stock Options and 14,531 Restricted Stock Units to eligible employees of your Company subject to the provisions of the Company's Employee Stock Option Scheme ("Scheme - 2013"). No Stock Options and Restricted Stock Units have vested in the option grantees in terms of the provisions of the Scheme 2013. In terms of the provisions of the SEBI (Share Based Employee Benefits) Regulations, 2014, the details of the Stock Options and Restricted Stock Units granted under the above mentioned Schemes are available on your Company's website viz. www.ultratechcement.com.

A certificate from the Statutory Auditor on the implementation of your Company's Employees Stock Option Schemes will be placed at the ensuing Annual General Meeting for inspection by the Members.

AWARDS

Some of the prestigious awards received by your Company during the year are:

* National Energy Conservation Award - Certificate of Merit by the Energy Secretary, Government of India to Aditya Cement Works, Rajasthan;

* Golden Peacock award for Corporate Social Responsibility - 2014 to Rajashree Cement Works, Karnataka;

* Federation of Indian Mineral Industries (FIMI) National Award in Environment Category for the year 2013-14 to Redipallayam Cement Works, Tamil Nadu;

* Outstanding Achievement Award 2014 from the Federation of Madhya Pradesh Chambers of Commerce & Industry, Bhopal in recognition of excellence in the category of Large Enterprise for Vikram Cement Works, Madhya Pradesh;

* Global CSR Excellence & Leadership Award in the category - Best Corporate Social Responsibility Practices from the World CSR Congress for Vikram Cement Works, Madhya Pradesh;

* Cll - National Award for Energy Efficient Unit 2014 to Birla White, Rajasthan.

RESEARCH AND DEVELOPMENT

Your Company's Research & Development (R&D) activities are focused on providing innovative and environment friendly solutions to support the sustainable growth of business.

The R&D activities of your Company include basic as well as applied research for fostering a better understanding of advanced construction materials, providing a forum for closer customer-manufacturer interaction, encouraging the development of low cost energy saving materials, among others. Customer requirements, Quality and Cost are governing attributes of all R&D projects for achieving process optimisation, raw material conservation and adoption of alternative fuels /raw materials apart from compliance with stricter environmental norms.

These efforts have further strengthened your Company's commitment towards sustainability in terms of responsible utilisation of non-renewable resources, continuous productivity improvement and energy conservation while ensuring highest customer satisfaction.

Your Company engages with Aditya Birla Science and Technology Company Private Limited ("ABSTCPL"), the corporate research and development centre for the Aditya Birla Group in projects aimed at integration of domain expertise and computational expertise. ABSTCPL's forte of having multi-disciplinary teams of experts, scientists and engineers capable of undertaking fundamental and applied research projects has contributed significantly in your Company's problem solving efforts.

HUMAN RESOURCES

Your Company believes that Human Resources will play a significant role in its future growth. With an unswerving focus on nurturing and retaining talent, your Company provides avenues for learning and development through functional, behavioral and leadership training programs, knowledge exchange conferences, communication channels for information sharing, to name a few.

The Group's Corporate Human Resources plays a critical role in your Company's talent management process.

SAFETY

For your Company, safety of its employees, customers, vendors and those residing in close proximity to its operations is of utmost concern. Your Company's Safety Board is chaired by your Company's Managing Director and helped by eight sub-committees, each of which is chaired by a Unit Head. Visible Safety Training was carried out for the line managers, front line engineers by leadership teams and over 2,800 employees underwent this training. Over 7,000 workers attended the training "Employee Actions to Improve Safety (EAIS)" which was conducted by front line engineers / workers to raise risk perception as well as promote self and peer corrections. During the year, over 210,000 Safety Observations were carried out by your Company's employees. Safety focus was also maintained at the project sites by the project leadership team. Through FY15, the Lost Time Injury Frequency Rate (LTIFR) reduced from 0.67 to 0.50, 26% over the previous year. Going forward, we wish to work on off-the-job safety so as to further build on the safety culture.

CORPORATE SOCIAL RESPONSIBILITY

In terms of the provisions of Section 135 of the Companies Act, 2013 ("the Act") read with Companies (Corporate Social Responsibility Policy) Rules, 2014, the Board of Directors of your Company has constituted a Corporate Social Responsibility ("CSR") Committee which is chaired by Mrs. Rajashree Birla. The other Members of the Committee are Mr. G. M. Dave, Independent Director and Mr. O. P. Puranmalka, the Managing Director. Dr. Pragnya Ram, Group Executive President, Corporate Communication & CSR is a permanent invitee to the Committee. Your Company also has in place a CSR Policy and the same is available on your Company's website viz. www.ultratechcement.com. The Committee recommends to the Board activities to be undertaken during the year.

Your Company is a caring corporate citizen and lays significant emphasis on development of the communities around which it operates. Your Company has identified several projects relating to Social Empowerment & Welfare, Infrastructure Development, Sustainable Livelihood, Health Care and Education during the year and initiated various activities in neighboring villages around plant locations. The work on several initiatives has picked up momentum during the year resulting in a spend of Rs. 44.46 crores (1.45% of the average net profits of the last 3 years as defined for the purposes of CSR). Further, your Company has identified few villages in Gujarat and Maharashtra for projects under the Swacch Bharat Abhiyaan. It is also working on rehabilitation of villages in Uttarakhand and Jammu & Kashmir devastated by floods, expenditure on which will be completed during FY16.

The Annual Report on CSR activities is attached as Annexure II forming part of this report.

SUBSIDIARY, JOINT VENTURE OR ASSOCIATE COMPANIES

The audited financial statements of your Company's subsidiaries, joint venture viz. Dakshin Cements Limited, Harish Cement Limited, Gotan Lime Stone Khanij Udyog Private Limited, Bhagwati Lime Stone Company Private Limited, UltraTech Cement Middle East Investments Limited, UltraTech Cement Lanka (Pvt.) Limited, PT UltraTech Mining Indonesia and PT UltraTech Investments Indonesia and related information have been placed on the website of your Company viz. www.ultratechcement.com and also available for inspection during business hours at the registered office of your Company. Any Member, who is interested in obtaining a copy of audited financial statements of your Company's subsidiaries may write to the Company Secretary at the Registered Office of your Company.

In accordance with the provisions of Section 129(3) of the Act, read with the Companies (Accounts) Rules, 2014, a report on the performance and financial position of each of the subsidiaries, associates and Joint Venture is attached as Annexure III to this Report

CONSOLIDATED FINANCIAL STATEMENTS

The Consolidated Financial Statements have been prepared in accordance with the provisions of the Act, read with the Companies (Accounts) Rules, 2014, applicable Accounting Standards and the provisions of the Listing Agreement with the stock exchanges and forms part of the Annual Report.

FINANCE

Your Company has adequate liquidity and a strong balance sheet. CRISIL has re-affirmed the "CRISIL AAA/ Stable and CRISIL A1 " rating for your Company's long term borrowings and bank loan facilities respectively.

Your Company has raised long term borrowing of Rs. 1,008 crores primarily by way of issuing Non-Convertible Debentures and short term debt (net of repayments) of Rs. 1,519 crores. These have been utilised for financing the various projects of your Company and discharging the borrowings of Rs. 3,647 crores transferred from the Gujarat Units of JCCL. During the year, your Company refinanced / repriced foreign currency borrowings for Rs. 1,233 crores to take advantage of low interest rates. All outstanding foreign currency borrowings are fully hedged.

Your Company has repaid Long Term borrowings (Primarily Non-Convertible Debentures and External Commercial Borrowings) amounting to Rs. 311 crores during the year.

During the financial year 2014 -15, your Company has not accepted any fixed deposits from the public falling under Section 73 of the Act and the Companies (Acceptance of Deposits) Rules, 2014.

PARTICULARS OF LOAN, GUARANTEE AND INVESTMENT

Details of Loan, Guarantee and Investment covered under the provisions of Section 186 of the Act read with the Companies (Meetings of Board and its Powers) Rules, 2014 are given in the notes to the financial statements.

ENERGY, TECHNOLOGY AND FOREIGN EXCHANGE

Information on conservation of energy, technology absorption and foreign exchange earnings and outgo, required to be disclosed pursuant to Section 134(3)(m) of the Act read with the Companies (Accounts) Rules, 2014 is given in Annexure IV to this Report.

PARTICULARS OF EMPLOYEES

In accordance with the provisions of Section 197(12) of the Act read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the names and other particulars of employees are to be set out in the Directors' Report, as an addendum thereto. However, in line with the provisions of Section 136(1) of the Act, the Report and Accounts as set out therein, are being sent to all Members of your Company excluding the aforesaid information about the employees. Any Member, who is interested in obtaining these particulars about employees, may write to the Company Secretary at the Registered Office of your Company.

Disclosures pertaining to remuneration and other details as required under Section 197(12) read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are attached as Annexure V.

BUSINESS RESPONSIBILITY REPORT

In terms of Clause 55 of the Listing Agreement executed with stock exchanges, a Business Responsibility Report forms part of the Annual Report.

CONTRACT AND ARRANGEMENT WITH RELATED PARTIES

During the financial year, your Company entered into related party transactions which were on arm's length basis and in the ordinary course of business. There are no material transactions with any related party as defined under Section 188 of the Act read with the Companies (Meetings of Board and its Powers) Rules, 2014. All related party transactions have been approved by the Audit Committee of your Company.

The policy on Related Party Transactions as approved by the Audit Committee and the Board is available on your Company's website viz. www.ultratechcement.com.

The details of contracts and arrangement with related parties of your Company for the financial year ended 31st March, 2015 is given in Note 41 to the financial statements of your Company.

RISK MANAGEMENT

Your Company has constituted a Risk Management Committee which is mandated to review the risk management plan / process of your Company. The Risk Management Committee identifies potential risks, assesses their potential impact and takes timely action to mitigate the same. Your Company has identified key risks as excess cement capacity; securing critical resources; market share; compliance and financial risk. More details on risk management are covered in the Management Discussion and Analysis forming part of the Annual Report.

INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY

Your Company has in place adequate internal control systems commensurate with the size of its operations. Internal control systems comprising of policies and procedures are designed to ensure sound management of your Company's operations, safekeeping of its assets, optimal utilisation of resources, reliability of its financial information and compliance. Clearly defined roles and responsibilities have been institutionalised. Systems and procedures are periodically reviewed to keep pace with the growing size and complexity of your Company's operations.

DIRECTOR'S RESPONSIBILITY STATEMENT

The audited accounts for the year under review are in conformity with the requirements of the Act and the Accounting Standards. The financial statements reflect fairly the form and substance of transactions carried out during the year under review and reasonably present your Company's financial condition and results of operations.

Your Directors confirm that:

i. in the preparation of the Annual Accounts, applicable accounting standards have been followed along with proper explanations relating to material departures, if any;

ii. the accounting policies selected have been applied consistently and judgments and estimates are made that are reasonable and prudent so as to give a true and fair view of the state of affairs of your Company as at 31st March, 2015 and of the profit of your Company for the year ended on that date;

iii. proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of your Company and for preventing and detecting frauds and other irregularities;

iv. the Annual Accounts of your Company have been prepared on a going concern basis;

v. your Company had laid down internal financial controls and that such internal financial control are adequate and were operating effectively;

vi. your Company has devised proper system to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

DIRECTORS

Changes in Board constitution -

Mr. M. Damodaran and Mr. Adesh Gupta resigned as director from the Board of your Company with effect from 20th June, 2014 and 30th June, 2015 respectively. The Board places on record its deep appreciation for the services rendered by Mr. Damodaran and Mr. Gupta during their tenure as Members of the Board.

Mrs. Sukanya Kripalu and Mrs. Renuka Ramnath have been appointed Additional Directors (Independent) for a period of 5 consecutive years with effect from 11th October, 2014, subject to consent by the Members of the Company at the ensuing Annual General Meeting.

Mr. Dilip Gaur was inducted into the Board as Additional Director and appointed Whole time Director (designated as Deputy Managing Director) with effect from 15th October, 2014.

Notices pursuant to Section 160 of the Act have been received from the Members proposing Mrs. Kripalu, Mrs. Ramnath and Mr. Gaur as directors of your Company.

Mr. O. P. Puranmalka, Whole-time Director of your Company has been re-designated as Managing Director with effect from 1st September, 2014. Mr. Puranmalka's existing term ends on 31st March, 2015. The Board has extended the term of appointment upto 31st March, 2016, subject to your approval.

Mr. Kumar Mangalam Birla retires from office by rotation and being eligible, offers himself for re-appointment.

The Board recommends these appointment / re-appointment. Items seeking your approval on the above are included in the Notice convening the Annual General Meeting.

Brief resumes of the directors being appointed / re-appointed form part of the Notice of the ensuing Annual General Meeting.

During the financial year 2014-15, Mr. O. P. Puranmalka, Managing Director and Mr. Dilip Gaur, Deputy Managing Director have not received any commission / remuneration from your Company's holding as well as subsidiary companies.

Meetings of the Board -

The Board of Directors of your Company met 7 times during the year to deliberate on various matters. The meetings were held on 8th April, 2014; 23rd April, 2014; 19th July, 2014; 2nd September, 2014; 18th October, 2014; 23rd December, 2014 and 23rd January, 2015. Further details on the Board of Directors are provided in the Corporate Governance Report forming part of this Annual Report.

Independent Director's Statement -

Independent Directors on your Company's Board have given declarations that they meet the criteria of independence as provided in Section 149(6) of the Act and Clause 49 of the Listing Agreement.

Formal Annual Evaluation -

The evaluation framework for assessing the performance of Directors of your Company comprises of contributions at the meetings, strategic perspective or inputs regarding the growth and performance of your Company, among others.

Pursuant to the provisions of the Act and Clause 49 of the Listing Agreement, the Directors have carried annual performance evaluation of Board, Independent Directors, Non-executive Directors, Executive Directors, Committee and Chairman of the Board. The manner of evaluation is provided in the Corporate Governance Report.

The details of programme for familiarisation of Independent Directors of your Company is available on your Company's website viz. www.ultratechcement.com

Policy on Appointment and Remuneration of Directors and Key Managerial Personnel and Remuneration Policy -

The NRC has formulated the Remuneration policy of your Company which is attached as Annexure VI to this report.

KEY MANAGERIAL PERSONNEL

Mr. K. C. Birla, Chief Financial Officer and Key Managerial Personnel of your Company moved on to a different role with effect from 1st December, 2014. Mr. Atul Daga was appointed as Chief Financial Officer and Key Managerial Personnel of your Company with effect from 1st December, 2014. The Board places on record its appreciation for the services rendered by Mr. K. C. Birla during his tenure as Chief Financial Officer of your Company.

In terms of the provisions of Section 203 of the Act, Mr. O. P. Puranmalka, Manging Director; Mr. Dilip Gaur, Deputy Managing Director; Mr. Atul Daga, Chief Financial Officer and Mr. S. K. Chatterjee, Company Secretary are the Key Managerial Personnel of your Company.

AUDIT COMMITTEE

The Audit Committee comprises of Mr. R. C. Bhargava, Mr. G. M. Dave and Mr. S. Rajgopal. Mr. D. D. Rathi, director of your Company and Mr. Atul Daga, Chief Financial Officer are the permanent invitees. Further, details relating to the Audit Committee are provided in the Corporate Governance Report forming part of this Annual Report.

VIGIL MECHANISM

Your Company has in place a vigil mechanism for directors and employees to report concerns about unethical behaviour, actual or suspected fraud or violation of your Company's Code of Conduct. Adequate safeguards are provided against victimisation to those who avail of the mechanism and direct access to the Chairman of the Audit Committee in exceptional cases is provided to them.

The vigil mechanism is available on your Company's website viz. www.ultratechcement.com.

AUDITORS

Statutory Auditors

In terms of the provisions of Section 139 of the Act read with the Companies (Audit and Auditors) Rules, 2014, an audit firm can hold office as statutory auditor for 2 terms of 5 consecutive years i.e for a maximum period of 10 years.

They can be re-appointed after a cooling period of 5 years. In computing the period of 10 years, the period for which the auditor held office before the commencement of the Act i.e before 1st April, 2014 is also to be taken into account.

Your Company has Joint Statutory Auditors who have been in office for more than 10 years and in compliance with the provisions of the Act, the Company will have to appoint new auditors in their place by 31st March, 2017.

The Board of Directors has, at its meeting held on 25th April, 2015, recommended the appointment of BSR & Co. LLP, Chartered Accountants, Mumbai as one of the Joint Statutory Auditor of the Company in place of Deloitte Haskins & Sells LLP, to hold office from the conclusion of this Annual General Meeting until the conclusion of the 20th Annual General Meeting of the Company, subject to ratification by the Members at every Annual General Meeting till the 19th Annual General Meeting. M/s G. P. Kapadia & Co. will continue to hold office from the conclusion of this Annual General Meeting until the conclusion of the next Annual General Meeting. Consequent to the aforesaid changes, re-appointment of M/s. Haribhakti & Co., Chartered Accountants, Mumbai as Branch Auditor is not recommended.

Resolutions seeking your approval on these items are included in the Notice convening the Annual General Meeting.

The observation made in the Auditor's Report are self- explanatory and thereofore, do not call for any further comments under Section 134(3)(f) of the Act.

Cost Auditors

In terms of the provisions of Section 148 of the Act read with the Companies (Cost Records and Audit) Amendment Rules, 2014, the Board of Directors of your Company have on the recommendation of the Audit Committee, appointed M/s. N.I. Mehta & Co., Cost Accountants, Mumbai and M/s. N. D. Birla & Co., Cost Accountants, Ahmedabad, as Cost Auditors, to conduct the cost audit of your Company for the financial year ending 31st March, 2016, at a remuneration as mentioned in the Notice convening the Annual General Meeting.

As required under the Act, the remuneration payable to the cost auditor is required to be placed before the Members in a general meeting for their ratification. Accordingly, a resolution seeking Member's ratification for the remuneration payable to Cost Auditors forms part of the Notice of the ensuing Annual General Meeting.

Secretarial Auditors

In terms of the provision of Section 204 of the Act read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board has appointed M/s. BNP & Associates, Company Secretaries, Mumbai as Secretarial Auditor for conducting Secretarial Audit of your Company for the financial year ended 31stMarch, 2015. The report of the Secretarial Auditors is attached as Annexure VII.

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

EXTRACT OF ANNUAL RETURN

In terms of the provisions of Section 92 (3) of the Act read with the Companies (Management and Administration) Rules, 2014, an extract of the Annual Return of your Company for the financial year ended 31st March, 2015 is given in Annexure VIII to this report.

OTHER DISCLOSURES

* There were no material changes and commitments affecting the financial position of your Company between end of the financial year and the date of this report.

* Your Company has not issued any shares with differential voting.

* There was no revision in the financial statements.

* Your Company has not issued any sweat equity shares.

* During the year your Company has not received any complaints under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

ACKNOWLEDGEMENT

Your Directors express their deep sense of gratitude to the banks, financial institutions, stakeholders, business associates, Central and State Governments for their co-operation and support and look forward to their continued support in future.

We very warmly thank all of our employees for their contribution to your Company's performance. We applaud them for their superior levels of competence, dedication and commitment to your Company.

For and on behalf of the Board

Kumar Mangalam Birla Chairman Mumbai, 20th July, 2015 (DIN: 00012813)

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Mar 31, 2013

Dear Shareholders,

The Directors present the Thirteenth Annual Report together with the Audited Accounts of your Company for the year ended 31st March, 2013.

FINANCIAL RESULTS

(Rs. in Crores)

2012-13 2011-12

Net Turnover 20,018 18,158

Profit before Depreciation, Interest and Tax (PBDIT) 4,980 4,519

Less: Depreciation 945 903

Profit before Interest and Tax (PBIT) 4,035 3,617

Interest 210 224

Profit before Tax (PBT) 3,825 3,393

Tax Expenses 1,170 947

Profit after tax 2,655 2,446

OVERVIEW AND REVIEW OF OPERATIONS

The Indian cement industry witnessed challenging times as a result of low growth led by issues such as high fiscal deficit, high inflation and worsening current account balance. The slowdown in the global growth aggravated the sluggishness in the economy. The industry recorded a growth of approximately 5.6% in FY13 as against 7% in FY12.

Apart from the unfavorable demand-supply scenario, the industry has been also reeling under the pressure of rising input costs. The prices of key raw materials have soared. The rise in domestic coal prices and non-availability of low cost linkage coal has hiked the power and fuel cost for cement manufacturers. Though imported coal has seen some easing in cost pressures due to the decline in the price of imported coal, the benefit of declining prices has been offset to some extent by rupee depreciation. Nonetheless, the government''s focus on infrastructure development, the robust growth potential in rural housing and softening interest rates augur well for the cement industry.

Against this background, your Company has produced 40.13 MMT of cement as against 39.43 MMT in the previous year. The effective capacity utilisation was 84% as against 83%.

The aggregate sales volume remained flat at 40.7 MMT, while for white cement it was 5.66 LMT (5.55 LMT).

Your Company''s net turnover stood at Rs. 20,018 crores vis a vis Rs. 18,158 crores achieved in the previous year. Profit before interest and tax was at Rs. 4,035 crores as against Rs. 3,617 crores.

DIVIDEND

Your Directors have recommended a dividend of Rs. 9/- per equity share (Rs. 8/- per equity share) of Rs. 10/- each for the year ended 31st March, 2013. The dividend distribution would result in a cash outgo of Rs. 289 crores (including tax on dividend of Rs. 42 crores) compared to Rs. 255 crores (including tax on dividend of Rs. 36 crores) paid for the year 2011-12.

CAPITAL EXPENDITURE

Your Company has commissioned its clinkerisation unit of 3.30 MMTPA at Rawan in the State of Chhattisgarh and a grinding unit of 1.55 MMTPA at Hotgi in the State of Maharashtra. Further, your Company has increased the capacity of its unit in Gujarat by 0.60 MMTPA. Consequently, your Company''s cement capacity stands augumented to 50.90 MMTPA from 48.75 MMTPA. The Clinkerisation unit at Malkhed, Karnataka is likely to be commissioned in Q1FY14.

The Cement grinding facility of 4.45 MMTPA is at an advanced stage of commissioning and expected to go on stream by first half of FY14. Your Company''s capex includes expansion of capacity of Aditya Cement in the state of Rajasthan by 2.9 MMTPA and setting up of two grindings units, excepted to be completed by March, 2015.

Your Company has commissioned its Wall Care Putty manufacturing unit at Katni in the state of Madhya Pradesh and a Bulk Terminal at Kochi in the State of Kerala.

The total expenditure for these capex is around Rs. 11,400 crores.

CORPORATE DEVELOPMENT

The Competition Commission of India (CCI) passed an order dated 20th June, 2012 imposing penalties on some cement companies including your Company. The CCI order is in relation to a complaint filed by the Builders Association of India for alleged contravention of the provisions of the Competition Act. The penalty imposed on your Company amounts to Rs. 1,175.49 crores.

Your Company filed an appeal alongwith a stay application against the order before the Competition Appellate Tribunal (COMPAT). COMPAT by its order dated 17th May, 2013 granted stay against the CCI order on condition that your Company deposit 10% of the penalty amount within one month of the passing of the order and posted the matter for further hearing. Your Company filed an appeal in the Supreme Court against the COMPAT order. The Supreme Court declined to interfere with the COMPAT order at this stage and directed that 10% of the penalty amount be deposited.

Your Company, backed by legal opinion, continuous to believe that it has a good case and accordingly no provision has been made in the accounts.

The Ministry of Coal (MoC), Government of India had allotted a coal block in the State of Chhattisgarh to Grasim Industries Limited ("Grasim") and Electrotherm (India) Limited ("Electrotherm") for the purpose of mining coal for captive consumption. In terms of the allocation letter, a joint venture company viz. Bhaskarpara Coal Company Limited was incorporated with Grasim holding 47.37% of the equity and the remaining being held by Electrotherm. Consequent to the demerger of Grasim''s cement business into Samruddhi Cement Limited ("Samruddhi") and the amalgamation of Samruddhi with your Company, your Company was substituted as the joint venture partner in place of Grasim.

The JV Company was in the process of achieving various milestones in line with the terms of allocation letter. However, during the year, the MoC, based on the recommendation of Inter- Ministerial Group (IMG), issued an order for de- allocation of Bhaskarpara Coal Block alleging delay in achieving the milestones. Your Company has filed a writ petition against the order before the Hon''ble High Court of Chhattisgarh at Bilaspur and obtained an interim stay. The appeal is pending before the Hon''ble High Court. Your Company is committed to implementation of this project and has been taking necessary steps towards the same. The delay, if any, in achieving the milestones, is for reasons beyond the control of your Company as well as the joint venture company.

CORPORATE GOVERNANCE

Your Directors reaffirm their continued commitment to good corporate governance practices. During the year under review, your Company was in compliance with the provisions of Clause 49 of the Listing Agreement with the stock exchanges relating to corporate governance.

The compliance report is provided in the Corporate Governance section of the Annual Report. The auditor''s certificate on compliance with the provisions of Clause 49 of the Listing Agreement is given in Annexure I to this Report.

EMPLOYEE STOCK OPTION SCHEME ESOS - 2006

During the year 7,890 stock options were granted and 15,101 were vested in eligible employees. The ESOS Compensation Committee allotted 114,601 equity shares of Rs. 10/- each of your Company upon exercise of stock options by the employees.

The disclosure, under Clause 12 of Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 is set out in Annexure II to this Report.

A certificate from the Statutory Auditor on the implementation of your Company''s Employees Stock Option Scheme will be placed at the ensuing Annual General Meeting for inspection by the Members.

ESOS - 2013

At a meeting held on 13th June, 2013, the Board of Directors approved the formulation of a new Employee Stock Option Scheme viz. "UltraTech Employee Stock Option Scheme - 2013" (ESOS - 2013) in terms of the SEBI Guidelines. The Board mandated the existing ESOS Compensation Committee to implement and administer the ESOS - 2013.

Items seeking your approval for introduction and implementation of ESOS - 2013 and granting such number of Stock Options exercisable into not more than 4,69,000 equity shares of Rs. 10/- each to permanent employees, including any Managing or Whole-time Director(s), of your Company and its holding and/or subsidiary companies are included in the Notice convening the Annual General Meeting together with the Explanatory Statement.

AWARDS

Your Company was the recipient of the following awards during the year:

- "Dun and Bradstreet Award" for the best cement Company in India 2012.

- Top Exporter Award from CAPEXIL for the 16th consecutive year.

- IMC Ramkrishna Bajaj National Quality Award - " Performance Excellence Trophy 2012" for Birla White.

- Greentech Environment Excellence Award 2012 from Greentech for Gujarat Cement Works.

- ''Subh Karan Sarawagi Environment Award'' from the Federation of Indian Mineral Industries for Rajashree Cement Works.

- National Award for excellence in Energy Management 2012 "Energy Efficient Unit" from CII for Reddipalayam Cement Works.

- "National Energy Conservation Award 2012" from Ministry of Power, New Delhi for Vikram Cement Works.

RESEARCH AND DEVELOPMENT

Your Company''s Research and Development (R&D) activities are expanding and are focused on development of new products and processes that create value for customers. Your Company is committed to sustainable development and looks at new ways to preserve the environment and non-renewable resources, as well as managing resources responsibily. Towards this end, your Company has developed several products that aid in resource conservation, result in energy savings, and ensure durability. Your Company continues to maximise use of industrial waste, alternative sources of fuel and chemical and mineral evaluation of captive limestone reserves.

Your Company is closely engaged with Aditya Birla Science and Technology Company Limited (ABSTCL), which is the corporate research and development centre for the Aditya Birla Group.

ABSTCL supports the broad diversity of the Group''s businesses through multi-disciplinary teams of expert scientists and engineers who lead fundamental and applied research projects.

HUMAN RESOURCES

Your Company believes that Human Resources play a very critical role in its growth. Your management has infused a lot of rigor and intensity in its people development processes and in honing skill sets. Various initiatives have been launched to provide growth opportunities to employees and stem attrition. For the development of the employees, your Company has created a structured training framework to ensure their ongoing education.

The Group''s Corporate Human Resources function has played and continues to play an integral role in your Company''s Talent Management Process.

Several innovative people - focused initiatives have been instituted at the Group level, and these are translated into action at all the Group Companies. Your Company''s basic objective is to ensure that a robust talent pipeline and a high-performance culture, centred around accountability is in place. Your Company feels this is critical to enable it retain its competitive edge.

SAFETY

In line with your Company''s commitment to achieve best in class safety practices and performance, it continued its association with M/s DuPont Safety Resources. The Apex Safety Council called "Safety Board" headed by the Whole- time Director has taken various measures to strengthen your Company''s Safety Management System. These include development and implementation of critical safety standards across the Units and Project sites, establishing processes for training need identification at each level of employee, introduction of "Life Saving Rule" and "Progressive Consequence Management" system among them. Corporate Safety Audits are also conducted to validate the measures taken towards ensuring safety.

All these initiatives have resulted in achieving the lowest ever Lost Time Injury Frequency Rate (LTIFR) of 0.99 as compared to 1.57 in the previous year, which is lower by 37%.

SUBSIDIARY COMPANIES

The annual accounts of your Company''s subsidiaries viz. Dakshin Cements Limited, Harish Cement Limited, Gotan Lime Stone Khanij Udyog Private Limited, UltraTech Cement Middle East Investments Limited, UltraTech Cement Lanka (Pvt) Limited and PT UltraTech Mining Indonesia and the related detailed information shall be made available to shareholders of your Company and its subsidiaries, upon receipt of a request from them. They will also be kept open for inspection at the Registered Office of your Company and its subsidiaries during business hours.

CONSOLIDATED FINANCIAL STATEMENTS

The Consolidated Financial Statements have been prepared in accordance with the applicable Accounting Standards and the provisions of the Listing Agreement with the stock exchanges and forms part of the Annual Report.

FINANCE

Your Company has raised long term borrowing of Rs. 1,050 crores by way of issuing Non-Convertible Debentures and External Commercial Borrowings. All foreign currency borrowings outstanding are fully hedged. These are being utilised for financing the various capex initiatives of your Company.

Your Company has repaid Long Term borrowings (Non-Convertible Debentures and External Commercial Borrowings) amounting to Rs. 157 crores during the year.

CRISIL has re-affirmed the "CRISIL AAA/Stable and CRISIL A1 " rating for your Company''s long term borrowings and bank loan facilities respectively. Your Company has adequate liquidity and a strong balance sheet. CARE has also re-affirmed the "CAREAAA" rating of the Non- Convertible Debentures of Rs. 500 crores transferred from erstwhile Samruddhi upon its amalgamation with your Company.

Your Company has not accepted any fixed deposits and, as such, no amount of principal or interest on fixed deposit was outstanding as of the balance sheet date.

ENERGY, TECHNOLOGY AND FOREIGN EXCHANGE

Information on conservation of energy, technology absorption and foreign exchange earnings and outgo, required to be disclosed pursuant to section 217(1)(e) of the Act read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 is given in Annexure III to this Report.

PARTICULARS OF EMPLOYEES

In accordance with the provisions of Section 217(2A) of the Act read with the Companies (Particulars of Employees) Rules, 1975, the names and other particulars of employees are to be set out in the Directors'' Report, as an addendum thereto. However, in line with the provisions of Section 219(1 )(b)(iv) of the Act, the Report and Accounts as set out therein, are being sent to all Members of your Company excluding the aforesaid information about the employees. Any Member, who is interested in obtaining these particulars, may write to the Company Secretary at the Registered Office of your Company.

BUSINESS RESPONSIBILITY REPORT

In terms of Clause 55 of the Listing Agreement executed with stock exchanges, a Business Responsibility Report forms part of the Annual Report.

DIRECTOR''S RESPONSIBILITY STATEMENT

The Audited Accounts for the year under review are in conformity with the requirements of the Act and the Accounting Standards. The financial statements reflect fairly the form and substance of transactions carried out during the year under review and reasonably present your Company''s financial condition and results of operations.

Your Directors confirm that:

i. in the preparation of the Annual Accounts, applicable accounting standards have been followed along with proper explanations relating to material departures, if any;

ii. the accounting policies selected have been applied consistently and judgments and estimates are made that are reasonable and prudent so as to give a true and fair view of the state of affairs of your Company as at 31st March, 2013 and of the profit of your Company for the year ended on that date;

iii. proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of your Company and for preventing and detecting frauds and other irregularities;

iv. the Annual Accounts of your Company have been prepared on a going concern basis.

DIRECTORS

Mr. V. T. Moorthy resigned from the Board of your Company with effect from 26th April, 2013. The Board places on record its deep appreciation for the services rendered by Mr. Moorthy during his tenure as Member of the Board.

Mr. Rajiv Dube was appointed Additional Director on the Board of your Company with effect from 29th April, 2013. Mr. Dube holds office upto the date of the ensuing Annual General Meeting. Notice pursuant to Section 257 of the Act has been received from a Member proposing Mr. Dube for appointment as Director of your Company.

Mrs. Rajashree Birla, Mr. R. C. Bhargava and Mr. S. Rajgopal retire from office by rotation and being eligible, offer themselves for re-appointment.

The Board recommends these appointment/ re-appointments.

Items seeking your approval on the above are included in the Notice convening the Annual General Meeting together with a brief resume of the Directors being appointed / re-appointed.

AUDITORS

M/s. Deloitte Haskins & Sells, Chartered Accountants, Mumbai and M/s. G.P. Kapadia & Co., Chartered Accountants, Mumbai were appointed Joint Statutory Auditors of your Company from the conclusion of the previous Annual General Meeting until the conclusion of the ensuing Annual General Meeting. Being eligible, they offer themselves for re-appointment as auditors of your Company.

The Board proposes the re-appointment of M/s. Deloitte Haskins & Sells, Chartered Accountants, Mumbai and M/s. G.P. Kapadia & Co., Chartered Accountants, Mumbai, as Joint Statutory Auditors of your Company based on the recommendation of the Audit Committee, to hold office from the conclusion of the ensuing Annual General Meeting until the conclusion of the next Annual General Meeting.

The Board also proposes the re-appointment of M/s. Haribhakti & Co., Chartered Accountants, Mumbai as the Branch Auditor of your Company''s Unit''s at Jafrabad and Magdalla in Gujarat and Ratnagiri in Maharashtra, based on the recommendation of the Audit Committee, to hold office from the conclusion of the ensuing Annual General Meeting until the conclusion of the next Annual General Meeting. In terms of the provisions of the Act, the Board also seeks your approval for the appointment of Branch Auditors in consultation with your Company''s Statutory Auditor''s for any other Branch/Unit/Division of your Company, which may be opened/acquired/installed in future in India or abroad.

Resolutions seeking your approval on these items are included in the Notice convening the Annual General Meeting.

The observation made in the Auditor''s Report are self-explanatory and therefore, do not call for any further comments under Section 217(3) of the Act.

COST AUDITORS

In terms of the provisions of Section 233B of the Act, the Board of Directors of your Company have on the recommendation of the Audit Committee, appointed M/s. N.I. Mehta & Co., Cost Accountants, Mumbai and M/s. N. D. Birla & Co., Cost Accountants, Ahmedabad, as Cost Auditors, to conduct the cost audit of your Company for the financial year ending 31st March, 2014, subject to the approval of the Central Government.

The Audit Committee has received a certificate from the Cost Auditors certifying their independence and arm''s length relationship with your Company. In accordance with Cost Audit (Report) Rules, 2001, the due date for filing the Cost Audit Report in XBRL for the financial year ended 31st March, 2012 was 31st December, 2012 and the same was filed on 27th December, 2012 vide SRN No. S19591148 with the Ministry of Corporate Affairs, New Delhi.

ACKNOWLEDGEMENT

Your Directors express their deep sense of gratitude to the banks, financial institutions, stakeholders, business associates, Central and State Governments for their co-operation and support and look forward to their continued support in future.

We very warmly thank all of our employees for their contribution to your Company''s performance. We applaud them for their superior levels of competence, dedication and commitment to your Company.

For and on behalf of the Board

Kumar Mangalam Birla

Mumbai, 13th June, 2013 Chairman

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Mar 31, 2012

The Directors present the Twelfth Annual Report together with the Audited Accounts of your Company for the year ended 31st March, 2012.

FINANCIAL RESULTS (Rs in Crores)

2011-12 2010-11* 2010-11 (Reported) (Recasted) (Reported)

Net Turnover 18,166 15,406 13,206

Profit before Depreciation, Interest and Tax (PBDIT) 4,519 3,453 2,822

Depreciation 902 877 766

Profit before Interest and Tax (PBIT) 3,617 2,576 2,056

Interest 224 324 273

Profit before Tax (PBT) 3,393 2,252 1,783

Tax Expenses 947 533 379

Profit after Tax 2,446 1,719 1,404

*On account of the amalgamation of erstwhile Samruddhi Cement Limited ("Samruddhi") with your Company w.e.f. 1st July, 2010, the figures for FY11 have been recasted so as to include Samrudhi's figures for the period 1st April, 2010 to 30th June, 2010 for a better understanding. For the purpose of comparison, the recasted figures have been used in this Directors' Report to the Shareholders

OVERVIEW AND REVIEW OF OPERATIONS

The cement industry recorded a growth of 7% during FY12 as against 5.7% in FY11. Overall, the year was challenging with lower growth in industrial production, slow-down in government spending, continuing high rate of inflation and depreciation of the rupee. These factors had an adverse impact on the economy with lower GDP growth of 6.5% as against GDP of 8.4% in the previous year.

Rising input costs, slow pace of housing, infrastructure development and the impact of global slowdown constrained the performance of the cement industry. Nonetheless, the Government's focus on inclusive growth and infrastructure together with enhanced capital allocation towards infrastructure in the 12th Five year plan augurs well for the industry.

Against this background, your Company has produced 39.43 MMT of cement as against 38.22

MMT in the previous year. Effective capacity utilisation was 83% as against 82%. While the aggregate sales volume was 40.73 MMT as against 39.74 MMT in the earlier year.

Your Company's net turnover stood at Rs. 18,166 crores vis-à-vis Rs. 15,406 crores achieved in the previous year. Profit before interest and tax was at Rs. 3,617 crores as against Rs. 2,576 crores is the previous year.

DIVIDEND

Your Directors have recommended a dividend of Rs. 8/- per equity share (Rs. 6/- per equity share) of Rs. 10/- each for the year ended 31st March, 2012. The dividend distribution would result in a cash outgo of Rs. 255 crores (including tax on dividend of Rs. 36 crores) compared to Rs. 191 crores (including tax on dividend of Rs. 27 crores) paid for the year 2010-11.

CAPITAL EXPENDITURE

Your Company has a capital outlay of Rs. 10,400 crores. The capex pertains to a number of projects. These include - clinkerisation plants through brownfield expansion at Chhattisgarh and Karnataka, together with additional grinding units, waste heat recovery systems, bulk packaging terminals and ready mix concrete plants. These projects are expected to be operational from early FY14.

On completion of this round of capex, your Company's cement capacity will be augmented by 10 mtpa to 62 mtpa; captive power capacity from 529 MW to 674 MW and green power through Waste Heat Recovery from 4 MW to 69 MW.

These projects are being funded through a judicious mix of internal accruals and borrowings.

CORPORATE GOVERNANCE

Your Directors reaffirm their continued commitment to good corporate governance practices. During the year under review, your Company was in compliance with the provisions of Clause 49 of the Listing Agreement with the stock exchanges relating to corporate governance.

The compliance report is provided in the Corporate Governance section of the Annual Report. The auditor's certificate on compliance with the provisions of Clause 49 of the Listing Agreement is given in Annexure I to this Report.

EMPLOYEE STOCK OPTION SCHEME

During the year 50,445 stock options were vested in eligible employees. The ESOS Compensation Committee allotted 23,636 equity shares of Rs. 10/- each of your Company upon exercise of stock options by the employees.

The disclosure, under Clause 12 of Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 is set out in Annexure II to this Report.

A certificate from the Statutory Auditor on the implementation of your Company's Employees Stock Option Scheme will be placed at the ensuing Annual General Meeting for inspection by the Members.

AWARDS

In recognition of the extraordinary contribution made towards setting corporate governance standards in India, for authoring the first ever Securities and Exchange Board of India (SEBI) initiated Corporate Governance Report in India and for benchmarkable Governance standards in Aditya Birla Group companies, the Asian Centre for Corporate Governance and Sustainability has conferred the "Transformational Leader Award" on your Company's Chairman, Mr. Kumar Mangalam Birla.

A selective list of awards conferred upon your Company includes:

- "Rolta Corporate Award 2011" from Dun and Bradstreet conferred on your Company for being a distinguished performer and leader in India's cement sector.

- "Top Exporter Award" from CAPEXIL for the 15th consecutive year.

- "Businessworld FICCI-SEDF CSR Award – 2010" from FICCI for Vikram Cement Works (VCW).

- "Rajiv Gandhi National Award – Clean Technology" from Ministry of Environment and Forest for VCW.

- "CII Environmental Best Practices Award 2012" for innovative alternative fuel usages from CII for VCW.

- "ASSOCHAM CSR Excellence Award" from Ministry of Corporate Affairs, Government of India for Birla White (BW).

RESEARCH AND DEVELOPMENT

Your Company's Research and Development (R&D) activities are expanding in line with its growing operations. These are focused on development of new products and processes that create value for its customers. Your Company is closely engaged with Aditya Birla Science and Technology Company Limited (ABSTCL) which is the corporate research and development centre for the Aditya Birla Group. ABSTCL supports the broad diversity of the Group's businesses through multi-disciplinary teams of expert scientists and engineers who lead fundamental and applied research projects.

Your Company is committed to sustainable development and looks at new ways to preserve the environment and manage resources responsibly. Your Company continues to maximise use of industrial waste, alternative sources of fuel and chemicals and mineral evaluation of captive limestone reserves. Your Company also has an R&D centre located at its Unit in Neemuch, Madhya Pradesh.

HUMAN RESOURCES

The human resource philosophy and strategy of your Company is structured to attract and retain the best talent, creating a workplace environment that keeps employees engaged, motivated and encourages innovation. This talent has, through strong alignment with your Company's vision, successfully built and sustained your Company's standing as one of India's most admired and valuable corporations.

SAFETY

Your Company is committed to the safety of its employees, service providers, host communities and society at large. During the year, your Company has initiated the "Safety Excellence Journey" in association with DuPont Sustainable Solution Group, a global leader in safety, to achieve excellence in safety practice and performance. As a part of this initiative, your Company has set up an Apex Safety Council called "Safety Board" headed by the Whole-time Director. It provides strategic direction, sets the priority and deals with behavior issues. The internal Safety structure has also been restructured to facilitate the involvement of line functions in formulating and reinforcing safety standard, rules and procedures.

SUBSIDIARY COMPANIES

In accordance with the general exemption granted by the Ministry of Corporate Affairs, Government of India, the Balance Sheet, Statement of Profit and Loss, Directors' Report, Auditors' Report etc. of the subsidiary companies are not attached with this Annual Report of your Company.

The annual accounts of your Company's subsidiaries viz. Dakshin Cements Limited, Harish Cement Limited, UltraTech Cement Middle East Investments Limited (UCMEIL), UltraTech Cement Lanka (Pvt) Limited and PT UltraTech Mining Indonesia and the related information shall be made available to shareholders of your Company and its subsidiaries upon receipt of a request from them. They will also be kept open for inspection at the Registered Office of your Company and its subsidiaries during business hours.

CONSOLIDATED FINANCIAL STATEMENTS

The Consolidated Financial Statements have been prepared in accordance with the applicable Accounting Standards and the provisions of the Listing Agreement with the stock exchanges and forms part of this Annual Report.

FINANCE

Your Company has raised Rs. 1,116 crores by way of External Commercial Borrowings (ECBs). ECBs amounting to Rs. 525 crores have been extended for a period of 3 to 5 years. All foreign currency borrowings outstanding are fully hedged. These are being utilised for financing the various capex initiatives of your Company.

Your Company has repaid long term borrowings (Non-Convertible Debentures and Foreign Currency Borrowings) amounting to Rs. 981 crores.

CRISIL has reaffirmed the "CRISIL AAA/Stable" and "CRISIL A1 " rating for your Company's long term borrowings and bank loan facilities respectively. Your Company has adequate liquidity and a strong balance sheet. CARE has also reaffirmed the "CARE AAA" rating of the Non- Convertible Debentures of Rs. 500 crores transferred from Samruddhi upon its amalgamation with your Company.

Your Company has not accepted any fixed deposits and, as such, no amount of principal or interest on fixed deposit was outstanding as of the balance sheet date.

ENERGY, TECHNOLOGY AND FOREIGN EXCHANGE

Information on conservation of energy, technology absorption and foreign exchange earnings and outgo, required to be disclosed pursuant to section 217(1)(e) of the Companies Act, 1956 ("the Act") read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 is given in Annexure III to this Report.

PARTICULARS OF EMPLOYEES

In accordance with the provisions of Section 217(2A) of the Act read with the Companies (Particulars of Employees) Rules, 1975, the names and other particulars of employees are to be set out in the Directors' Report, as an addendum thereto. However, in line with the provisions of Section 219(1)(b)(iv) of the Act, the Report and Accounts as set out therein, are being sent to all Members of your Company excluding the aforesaid information about the employees. Any Member, who is interested in obtaining these particulars about employees, may write to the Company Secretary at the Registered Office of your Company.

DIRECTOR'S RESPONSIBILITY STATEMENT

The Audited Accounts for the year under review are in conformity with the requirements of the Act and the Accounting Standards. The financial statements reflect fairly the form and substances of transactions carried out during the year under review and reasonably present your Company's financial condition and results of operations.

Your Directors confirm that:

I. in the preparation of the Annual Accounts, applicable accounting standards have been followed along with proper explanations relating to material departures, if any;

II. the accounting policies selected have been applied consistently and judgments and estimates are made that are reasonable and prudent so as to give a true and fair view of the state of affairs of your Company as at 31st March, 2012 and of the profit of your Company for the year ended on that date;

III. proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of your Company and for preventing and detecting frauds and other irregularities;

IV. the Annual Accounts of your Company have been prepared on a going concern basis.

DIRECTORS

Mr. N. J. Jhaveri resigned from the Board of your Company with effect from 4th April, 2012. The Board places on record its deep appreciation for the services rendered by Mr. Jhaveri during his tenure as Member of the Board.

Mr. M. Damodaran was appointed Additional Director on the Board of your Company with effect from 16th April, 2012. Mr. Damodaran holds office upto the date of the ensuing Annual General Meeting. Notice pursuant to Section 257 of the Act has been received from a member proposing Mr. Damodaran for appointment as Director of your Company.

Mr. G. M. Dave, Mr. Kumar Mangalam Birla and Mr. S. B. Mathur retire from office by rotation and being eligible, offer themselves for re-appointment.

The Board recommends these appointment / re- appointments.

Resolutions seeking your approval on these items are included in the Notice convening the Annual General Meeting together with a brief resume of the Directors being appointed / re-appointed.

AUDITORS

M/s. Deloitte Haskins & Sells, Chartered Accountants, Mumbai and M/s. G.P. Kapadia & Co., Chartered Accountants, Mumbai were appointed Joint Statutory Auditors of your Company from the conclusion of the previous Annual General Meeting until the conclusion of the ensuing Annual General Meeting. Being eligible, they offer themselves for re-appointment as auditors of your Company.

The Board proposes the re-appointment of M/s. Deloitte Haskins & Sells, Chartered Accountants, Mumbai and M/s. G.P. Kapadia & Co., Chartered Accountants, Mumbai, as Joint Statutory Auditors of your Company based on the recommendation of the Audit Committee, to hold office from the conclusion of the ensuing Annual General Meeting until the conclusion of the next Annual General Meeting.

The Board also proposes the re-appointment of M/s. Haribhakti & Co., Chartered Accountants, Mumbai as the Branch Auditor of your Company's Unit's at Jafrabad and Magdalla in Gujarat and Ratnagiri in Maharashtra, based on the recommendation of the Audit Committee, to hold office from the conclusion of the ensuing Annual General Meeting until the conclusion of the next Annual General Meeting. In terms of the provisions of the Act, the Board also seeks your approval for the appointment of Branch Auditors in consultation with your Company's Statutory Auditor's for any other Branch/Unit/Division of your Company, which may be opened/acquired/installed in future in India or abroad.

Resolutions seeking your approval on these items are included in the Notice convening the Annual General Meeting.

The observation made in the Auditor's Report are self-explanatory and therefore, do not call for any further comments under Section 217(3) of the Act.

COST AUDITORS

In terms of the provisions of Section 233B of the Act, the Board of Directors of your Company have on the recommendation of the Audit Committee, appointed M/s. N. I. Mehta & Co., Cost Accountants, Mumbai and M/s. N. D. Birla & Co., Cost Accountants, Ahmedabad, as Cost Auditors, to conduct the cost audit of your Company for the financial year ending 31st March, 2013, subject to the approval of the Central Government.

The Audit Committee has received a certificate from the Cost Auditors certifying their independence and arm's length relationship with your Company. In accordance with Cost Audit (Report) Rules, 2001, the due date for filing the Cost Audit Report for the financial year ended 31st March, 2011 was 30th September, 2011 and the same was filed on 21st September, 2011 vide SRN No. B20929535 with the Ministry of Corporate Affairs, New Delhi.

APPRECIATION

Your Directors express their deep sense of gratitude to the banks, financial institutions, stakeholders, business associates, Central and State Governments for their co-operation and support and look forward to their continued support in future.

We very warmly thank all of our employees for their contribution to your Company's performance. We applaud them for their superior levels of competence, dedication and commitment to your Company.

For and on behalf of the Board

Kumar Mangalam Birla Mumbai, 23rd April, 2012 Chairman

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Mar 31, 2011

Dear Shareholders,

The Directors present the Eleventh Annual Report together with the Audited Accounts of your Company for the year ended 31st March, 2011.

CORPORATE DEVELOPMENTS

There were two significant developments during the year. Firstly, the Scheme of Amalgamation of Samruddhi Cement Limited ("Samruddhi") with your Company ("the Scheme") became effective from 1st August, 2010 and operative from the Appointed Date i.e. 1st July, 2010. In terms of the Scheme, 149,533,469 equity shares of Rs. 10/- each have been allotted to shareholders of Samruddhi including the Custodian(s) of the Global Depository Receipts (GDRs).

Secondly, your Company's wholly owned subsidiary, UltraTech Cement Middle East Investments Limited ("UCMEIL") completed the acquisition of ETA Star Cement together with its operations in UAE, Bahrain and Bangladesh and acquired management control.

Consequent to the above developments, your Company's capacity stands augmented to 52 MMTPA placing it among the top 10 cement companies in the world.

FINANCIAL RESULTS

(Rs. in Crores)

2010-11* 2009-10

Net Turnover 13,210 7,050

Profit before Depreciation, Interest and Tax (PBDIT) 2,829 2,094

Less: Depreciation 766 388

Profit before Interest and Tax (PBIT) 2,063 1,706

Interest 277 118

Profit before Tax (PBT) 1,786 1,588

Tax Expenses 382 495

Profit after Tax 1,404 1,093

Add: Balance brought forward from Previous Year 2,729 2,438

Surplus available for appropriation 4,134 3,532 Appropriation

Debenture Redemption Reserve 59 (35)

General Reserve 1,100 750

Dividend 164 75

Corporate tax on Dividend 27 12

Balance transferred to Balance Sheet 2,784 2,729

Total 4,134 3,532

* On account of the amalgamation of Samruddhi with your Company w.e.f. 1s' July, 2010, the figures for FY11 are strictly not comparable with the corresponding period of the previous year. However comparable net turnover and PBIT for the previous year are Rs. 13,442 crores and f 3,373 crores recasted so as to include Samruddhi's figures for the period 1st July, 2009 to 31s' March, 2010.

OVERVIEW AND REVIEW OF OPERATIONS

The financial year under review began on a positive note backed by the inherent strength of the Indian economy. Despite the stimulus measures announced earlier being gradually withdrawn, rise in domestic savings, growth in investments, revival of agriculture, manufacturing and service sectors resulted in the economy recording pre-financial crises growth rates and an acceleration in GDP. However, the economy started witnessing a rise in inflationary trend during the second half together with a tightening of the monetary policy, widening trade deficit, slowdown in corporate spending and escalation in global energy prices.

In the short to middle term, the economy will be faced with a number of challenges - most importantly, the high level of inflation which is not indicating any signs of reduction and the hardening global energy prices. A number of measures in the form of monetary, fiscal and policy will be required to overcome these challenges. Despite this, the economy is poised for good growth and has the ability to sustain the same, linked to domestic consumption.

The year 2010-11 was indeed challenging for the cement industry. Demand off-take was weaker than expected due to lower realty and infrastructure spending, extended monsoon, non- availability of railway wagons. Industry also witnessed capacity additions of around 28 MMT over and above the capacity addition of around 60 MMT in FY10. On the cost front, fuel and energy prices showed no signs of dropping. Prices of imported coal shot up by 37% while that of domestic coal rose by 30%-150% in March, 2011. Further, the cost of key inputs like fly ash, slag and other raw materials also rose significantly. Rising interest rates is a matter of concern. The prevailing situation in the Middle East and surrounding regions adversely affected exports. The combination of slower demand growth coupled with increased supply put pressure on cement pricing and margins.

Against this background, your Company has produced 32.92 MMT of cement as against 32.11 MMT in previous year. Effective capacity utilisation was 81 % as against 86% in previous year on an expanded capacity. The aggregate sales volume of 34.67 MMT was at par with the previous year sales volume of 34.68 MMT.(Previous year figures have been recasted so as to include Samruddhi's figures for the period 1st July, 2009 to 31st March, 2010).

Your Company's net turnover stood at Rs. 13,210 crores as against Rs. 13,442 crores (recasted) achieved in the previous year. Profit before interest and tax stood at Rs. 2,063 crores as against Rs. 3,319 crores (recasted).

Going forward, the Government's increased focus on urban as well as rural infrastructure development, housing and an enhanced capital allocation towards infrastructure in the 12th - Five Year Plan, will be the major growth drivers.

DIVIDEND

Your Directors recommended a dividend of X 6/- per equity share (Rs. 6/- per equity share) of Rs. 10/- each for the year ended 31st March, 2011. The dividend distribution would result in a cash outgo of Rs. 191 crores (including tax on dividend of Rs. 27 crores) compared to Rs. 87 crores (including tax on dividend of X 12 crores) paid for the year 2009-10. The higher outgo is on account of new shares allotted to Samruddhi's shareholders upon the amalgamation of Samruddhi with your Company.

EMPLOYEE STOCK OPTION SCHEME

During the year 157,509 stock options have been granted by your Company. Of these, 97,106 options have been granted to eligible employees of Samruddhi in terms of the Scheme.

109,372 stock options vested in eligible employees. The ESOS Compensation Committee allotted 21,117 equity shares of Rs. 10/- each of your Company to some option grantees, pursuant to the exercise of stock options.

The disclosure, as required under Clause 12 of Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 is set out in Annexure I to this Report.

AWARDS

As many of you must be aware, the Government of India has bestowed the prestigious "Padma Bhushan Award" on Mrs. Rajashree Birla, Director of your Company. This is in recognition of her exemplary contribution in the area of social work. It is indeed a matter of pride for all of us.

Your Company was the recipient of the Most Respected Company Award 2011 in the Cement Sector from the Business World.

A selective list of awards conferred upon your Company include:

- Top Exporter Award from CAPEXIL for the 14th consecutive year.

- The 9th Annual "Greentech Global Safety Award" 2010 from Greentech Foundation for Reddipalayam Cement Works (RDCW);

- The Confederation of Indian Industry's National Award for excellence in energy management 2010 "Excellent Energy Efficient Unit" upon RDCW;

- Asian CSR Award, Kuala Lumpur, Malaysia, from Asian Institute of Management Center on Vikram Cement Works (VC) for its contribution to society;

- Greentech Environmental Excellence Award for excellent contribution to environmental activities on VC.

RESEARCH AND DEVELOPMENT

Your Company's Research and Development (R&D) efforts continue to be focused on the development of new products and processes that create value for its customers. While meeting customer needs is at the centre of all R&D activities, your Company is committed to sustainable development and looks at new ways to preserve the environment and manage resources responsibly. Towards this, your Company continues to maximise use of industrial waste, alternative sources of fuel and chemicals and mineral evaluation of captive limestone reserves.

Your Company is closely engaged with the Aditya Birla Science and Technology Company Limited (ABSTCL). ABSTCL is the corporate research and development centre for the Aditya Birla Group. ABSTCL supports the broad diversity of the Group's businesses through multi-disciplinary teams of expert scientists and engineers who lead fundamental and applied research projects. It is supported by state-of-the-art equipment set in a one-of-a-kind brand new technology-led environment and seeks advances in products, processes and applications in your Company's products (mineralogy, clinkerisation and concrete).

HUMAN RESOURCES

Your Company believes that Human Resources play a very criticle role in its growth. Your Directors' are pleased to inform you that the Aditya Birla Group of which your Company is a part, has been declared as one of the Best Employers in India by the Aon - Hewitt survey conducted recently. The Group ranked second among two hundred other Indian organisations which took part. The process entailed a rigorous six months exercise involving HR Systems and processes audit, online survey with several employees, face to face meetings with Leadership teams, HR and a cross section of employees.

Going forward, attracting and retaining talent will be a key challenge. Various initiatives have been launched to provide growth opportunities to employees and stem attrition. Notable initiatives for the current year include the rollout of the Employee Value Proposition and the Career Portal Platform to provide visibility of career opportunity to the employees.

SAFETY

Your Company lays significant importance on the safety of its employees, service providers, host communities and society at large. During the year, your Company has embarked upon a journey to achieve excellence in its Safety practices and performances. Your Company has enlisted M/s DuPont Sustainability Group, a consultancy wing of DuPont India to help in its aspiration to achieve safety excellence. DuPont is recognised worldwide for its strong safety culture.

CORPORATE GOVERNANCE

Your Directors reaffirm their continued commitment to good corporate governance practices. During the year under review, your Company was in compliance with the provisions of Clause 49 of the Listing Agreement with the stock exchange relating to corporate governance.

The compliance report is provided in the Corporate Governance section of the Annual Report. The auditor's certificate on compliance with the provisions of Clause 49 of the Listing Agreement is annexed to this Report.

SUBSIDIARY COMPANIES

The annual accounts of your Company's subsidiaries viz. Dakshin Cements Limited, Harish Cement Limited, UltraTech Cement Lanka (Pvt) Limited and UCMEIL and the related detailed information shall be made available to shareholders of your Company and its subsidiaries upon receipt of a request from them. They will also be kept open for inspection at the Registered Office of your Company and its subsidiaries during business hours.

CONSOLIDATED FINANCIAL STATEMENTS

The Consolidated Financial Statements have been prepared in accordance with the applicable Accounting Standards and the provisions of the Listing Agreement with the stock exchanges and forms part of the Annual Report.

FINANCE

Your Company has raised long term loans amounting to Rs. 90 crores to meet the requirement of capital expenditure and other approved purposes. Further, your Company's wholly owned subsidiary viz. UCMEIL has raised/arranged US$ 290 million (equivalent to Rs. 1,293 crores) for its operations in UAE, Bahrain and Bangladesh.

CRISIL has re-affirmed the "AAA/Stable/P1 " rating for your Company's long term borrowings and bank loan facilities. Your Company has adequate liquidity and a strong balance sheet. CARE has also re-affirmed the "AAA" rating of the Non-Convertible Debentures of Rs. 500 crores transferred from Samruddhi upon its amalgamation with your Company.

Your Company has not accepted any fixed deposits and as such, no amount of principal or interest on fixed deposit was outstanding as of the balance sheet date.

ENERGY, TECHNOLOGY AND FOREIGN EXCHANGE

Information on conservation of energy, technology absorption and foreign exchange earnings and outgo, required to be disclosed pursuant to section 217(1 )(e) of the Act read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 is given in Annexure II and forms part of this Report.

PARTICULARS OF EMPLOYEES

In accordance with the provisions of Section 217(2A) of the Act read with the Companies (Particulars of Employees) Rules, 1975, the names and other particulars of employees are to be set out in the Directors' Report, as an addendum thereto. However, in line with the provisions of Section 219(1 )(b)(iv) of the Act, the Report and Accounts as set out therein, are being sent to all Members of your Company excluding the aforesaid information about the employees. Any Member, who is interested in obtaining these particulars about employees, may write to the Company Secretary at the Registered Office of your Company.

DIRECTOR'S RESPONSIBILITY STATEMENT

The Audited Accounts for the year under review are in conformity with the requirements of the Act and the Accounting Standards. The financial statements reflect fairly the form and substance of transactions carried out during the year under review and reasonably present your Company's financial condition and results of operations.

Your Directors confirm that:

I. in the preparation of the Annual Accounts, applicable accounting standards have been followed along with proper explanations relating to material departures, if any;

II. the accounting policies selected have been applied consistently and judgments and estimates are made that are reasonable and prudent so as to give a true and fair view of the state of affairs of your Company as at 31st March, 2011 and of the profit of your Company for the year ended on that date;

III. proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of your Company and for preventing and detecting frauds and other irregularities;

IV. the Annual Accounts of your Company have been prepared on a going concern basis.

DIRECTORS

Mr. Adesh Gupta and Prof. Nirmalya Kumar were appointed Additional Directors on the Board of your Company with effect from 26th October, 2010 and 16th February, 2011 respectively. They hold office till the conclusion of the ensuing Annual General Meeting. Notices pursuant to Section 257 of the Act have been received from Members proposing Mr. Gupta and Prof. Kumar for appointment as Directors of your Company.

Mr. R. C. Bhargava, Mr. S. Rajgopal and Mr. D. D. Rathi retire from office by rotation and being eligible, offer themselves for re-appointment.

The Board recommends these appointments / re-appointments.

Resolutions seeking your approval on these items are included in the Notice convening the Annual General Meeting together with a brief resume of the Directors being appointed/re-appointed.

AUDITORS

M/s. Deloitte Haskins & Sells, Chartered Accountants, Mumbai and M/s. G.P. Kapadia & Co., Chartered Accountants, Mumbai were appointed Joint Statutory Auditors of your Company from the conclusion of the previous Annual General Meeting until the conclusion of the ensuing Annual General Meeting. Being eligible, they offer themselves for re-appointment as auditors of your Company.

The Board proposes the re-appointment of M/s. Deloitte Haskins & Sells, Chartered Accountants, Mumbai and M/s. G.P. Kapadia & Co., Chartered Accountants, Mumbai, as Joint Statutory Auditors of your Company based on the recommendation of the Audit Committee, to hold office from the conclusion of the ensuing Annual General Meeting until the conclusion of the next Annual General Meeting.

The Board also proposes the re-appointment of M/s. Haribhakti & Co., Chartered Accountants, Mumbai as the Branch Auditor of your Company's Unit's at Jafrabad and Magdalla in Gujarat and Ratnagiri in Maharashtra, based on the recommendation of the Audit Committee, to hold office from the conclusion of the ensuing Annual General Meeting until the conclusion of the next Annual General Meeting. In terms of the provisions of the Act, the Board also seeks your approval for the appointment of Branch Auditors in consultation with your Company's Statutory Auditor's for any other Branch/Unit/Division of your Company, which may be opened/acquired/installed in future in India or abroad.

Resolutions seeking your approval on these items are included in the Notice convening the Annual General Meeting.

The observation made in the Auditor's Report are self-explanatory and therefore, do not call for any further comments under Section 217(3) of the Act.

COST AUDITORS

Pursuant to the provision of Section 233B of the Act, your Directors have appointed

M/s. N.I. Mehta & Co., Cost Accountants, Mumbai and M/s. N. D. Birla & Co., Cost Accountants, Ahmedabad, jointly, as the Cost Auditors to conduct the Cost Audit of your Company for the financial year ending 31st March, 2012, subject to the approval of the Central Government. M/s. N. D. Birla & Co., Cost Accountants, Ahmedabad was one of the Cost Auditors of the erstwhile Samruddhi and also Grasim Industries Limited.

APPRECIATION

Your Directors wish to take this opportunity to express their deep sense of gratitude to the banks, financial institutions, stakeholders, business associates, Central and State Governments for their co-operation and support and look forward to their continued support in future.

We very warmly thank all of our employees for their contribution to your Company's performance. We applaud them for their superior levels of competence, dedication and commitment to your Company.

For and on behalf of the Board

Kumar Mangalam Birla

Mumbai, Chairman

26th April, 2011

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Mar 31, 2010

The Directors present the Tenth Annual Report together with the Audited Accounts of your Company for the year ended 31st March, 2010.

FINANCIAL RESULTS

(Rs. in crores)

2009-10 2008-09

Gross Turnover 7,729.13 7,160.42

Gross Profit 1,976.24 1,684.46

Less: Depreciation 388.08 323.00

Profit Before Tax 1,588.16 1,361.46

Tax Expenses 494.92 384.44

Profit after tax 1,093.24 977.02

Add: Balance brought forward from Previous Year 2,438.40 1,598.12

Surplus available for appropriation 3,531.64 2,575.14 Appropriation

Debenture Redemption Reserve (34.83) (36.08)

General Reserve 750.00 100.00

Dividend 74.69 62.24

Corporate tax on Dividend 12.41 10.58

Balance transferred to Balance Sheet 2,729.37 2,438.40

Total 3,531.64 2,575.14

OVERVIEW AND REVIEW OF OPERATIONS

The impact of the global financial crises continued to be felt in the financial year under review. The Indian economy witnessed challenging times as a result of high cost of credit and fall in capital markets that stoked the sluggishness in the economy. However, the stimulus packages announced by the Government together with the initiatives for boosting rural development, infrastructure and housing aided in the revival of the economy. The cement industry also benefitted on account of the measures adopted by the Government. This, together with some delay in materialisation of new capacities resulted in the industry posting healthy growth.

Against this background, your Company has produced 17.64 MMT of cement (15.87 MMT). Effective capacity utilisation was 88% (96%) on an expanded capacity. The aggregate sales volume at 20.21MMT (18.16 MMT) was higher by 11%.

Your Company’s gross turnover at Rs. 7,729.13 crores was up by 8% compared to Rs. 7,160.42 crores achieved in the previous year. Profit after

tax stood at Rs. 1,093.24 crores (Rs. 977.02 crores) after providing for depreciation – Rs. 388.08 crores (Rs. 323 crores) and tax – Rs. 494.92 crores (Rs. 384.44 crores). Cash profit was higher at Rs. 1,589.12 crores (Rs. 1,480.60 crores).

DIVIDEND

Your Directors recommended a dividend of Rs. 6/- per equity share (Rs.5/- per equity share) of Rs.10/- each for the year ended 31st March, 2010. The dividend distribution would result in a cash outgo of Rs. 87.10 crores (including tax on dividend of Rs. 12.41 crores) compared to Rs. 72.82 crores (including tax on dividend of Rs. 10.58 crores) paid for the year 2008-09.

SCHEME OF AMALGAMATION

During the year under review, the Board of Directors of your Company s holding Company i.e. Grasim Industries Limited ( Grasim ) approved the demerger of its cement business comprising of cement, ready mix concrete, white cement and other cement related products and activities into Samruddhi Cement Limited ( Samruddhi ), its wholly owned subsidiary. The demerger is proposed to be undertaken pursuant to a Scheme of Arrangement under Section 391-394 and other relevant provisions of the Companies Act, 1956 (the Act ).

Subsequently, Samruddhi s Board of Directors submitted a proposal to the Board of your Company for considering consolidation of the cement business.

With a view to enhance shareholder value and create a focused entity engaged in the cement business, the Board of Directors of your Company have at its meeting held on 15 November, 2009 approved a Scheme of Amalgamation ( the Scheme ) of Samruddhi with your Company pursuant to the provisions of Sections 391 to 394 of the the Act.

Further, at separate meetings held on 19 March, 2010 under the direction of the Hon ble Bombay High Court, the equity shareholders, secured creditors (including debentureholders) and unsecured creditors of your Company have also approved the Scheme with requisite majority. Petitions have been filed by your Company and Samruddhi respectively, in the Hon’ble Bombay High Court and the Hon’ble High Court of Gujarat for the sanction of the Scheme. The Appointed Date of the Scheme is 1st July, 2010 or such other date as may be determined by the Board of Directors of your Company and Samruddhi.

Upon the effectiveness of the Scheme, shareholders of Samruddhi will receive 4 (four) equity shares of your Company of face value Rs.10/- each fully paid-up for every 7 (seven) equity shares of Samruddhi of face value Rs. 5/- each fully paid-up.

The amalgamation of Samruddhi with your Company will be effective upon receipt of the approval from the respective High Courts and the effectiveness of the Scheme of Arrangement between Samruddhi and Grasim as mentioned above.

Upon amalgamation, your Company will be able to derive economies of scale and create a platform for future substantial growth with the continuing parentage of Grasim. Your Company will have a pan India presence and will also add to its portfolio the speciality products of white cement and wallcare putty. The balance sheet of your Company will swell in size as well.

CORPORATE DEVELOPMENT

With the intention of growing in the Indian Ocean rim, your Company’s Board has approved acquisition of management control of ETA Star Cement Company LLC, Dubai together with its operations in United Arab Emirates (UAE), Bahrain and Bangladesh. This acquisition will be financed by capitalisation of ‘UltraTech Cement Middle East Investments Limited’ (“UCMEIL”), your Company’s wholly-owned subsidiary in UAE.

ETA Star Cement’s manufacturing facilities include a 2.3 mtpa clinkerisation plant and 2.1 mtpa of

cement grinding capacity in the UAE, 0.4 mtpa and 0.5 mtpa of cement grinding capacity in Bahrain and Bangladesh respectively.

UCMEIL alongwith its local associates will acquire equity stake in the above entities and consequently gain management control.

Your Company currently exports cement and clinker to the Middle-East. With this acquisition, it will gain direct access to the markets in the Middle-East and adjoining regions.

The acquisition is likely to be completed by the end of Q1FY11.

EMPLOYEE STOCK OPTION SCHEME

During the year 42,019 options vested in eligible employees of your Company. Further, the ESOS Compensation Committee has allotted 1,200 equity shares of Rs.10/- each of your Company to an Option Grantee pursuant to the exercise of stock options under your Company s Employee Stock Option Scheme.

The disclosure, as required under Clause 12 of Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 is set out in Annexure I to this Report.

AWARDS

Your Company was the recipient of the following awards during the year:

- Top Exporter Award from CAPEXIL for the thirteenth consecutive year;

- Best Thermal Energy Performance for the year 2008-09 in energy conservation and performance for Andhra Pradesh Cement Works (APCW) from National Council for Cement and Building Materials;

- Energy efficient unit in energy conservation for APCW from Confederation of Indian Industry;

- First prize for Energy Conservation 2008- 09 for APCW from Non-conventional

Energy Development Corporation of Andhra Pradesh;

- First prize for mines operations and maintenance of machinery and overall performance in the Mines Safety Week – 2009 for APCW from Directorate General of Mines Safety;

RESEARCH AND DEVELOPMENT

Your Company s Research and Development efforts continue to be focused on development of new products and processes, that create value for its customers.

While meeting customer needs is at the centre of all R&D activities, your Company is committed to sustainable development and looks for new ways to preserve the environment and manage resources responsibly. Towards this, your Company continues to maximise use of industrial waste, alternative sources of fuel and chemicals and mineral evaluation of captive limestone reserves.

HUMAN RESOURCES

Your Company continuously strives to foster a culture of high performance. Your Management has infused a lot of rigor and intensity in its people development processes and in honing skill sets. Its HR processes are absolutely aligned to organisational goals.

The implementation of People Soft HRMS (Human Resource Management System), the variable pay plan and job bands have been institutionalised.

Ongoing learning, refreshing HR systems in line with global benchmarks, aligning rewards and recognition with performance, have enabled your Company sustain its reputation of a meritocratic organisation.

The Groups Corporate Human Resources function has played and continues to play an integral role in your Company s Talent Management Processes.

CORPORATE GOVERNANCE

Your Directors reaffirm their continued commitment to good corporate governance practices. During the year under review, your Company was in compliance with the provisions of Clause 49 of the Listing Agreement with the stock exchanges relating to corporate governance.

A separate section on Corporate Governance together with a certificate from your Company s Statutory Auditors forms a part of this Annual Report.

SUBSIDIARY COMPANIES

During the year under review, your Company incorporated a wholly-owned subsidiary Company in UAE in the name of UltraTech Cement Middle East Investments Limited ( UCMEIL ).

In terms of Section 212 of the Act, the Accounts together with the Report of Directors and the Auditor s Report of your Company s subsidiaries viz. Dakshin Cements Limited, UltraTech Cement Lanka (Pvt) Limited and UCMEIL are appended to this Annual Report.

CONSOLIDATED FINANCIAL STATEMENTS

The Consolidated Financial Statements have been prepared in accordance with the provisions of Accounting Standards 21, 27 and other applicable Accounting Standards issued by the Institute of Chartered Accountants of India and the provisions of the Listing Agreement with the stock exchanges and forms part of the Annual Report.

FINANCE

Your Company has repaid debentures amounting to Rs. 300 crores.

CRISIL has re-affirmed the AAA/Stable/P1+ rating for your Company s long term borrowings and bank loan facilities. Your Company has adequate liquidity and a strong balance sheet.

Your Company has not accepted any fixed deposits and, as such, no amount of principal or interest on fixed deposit was outstanding as of the balance sheet date.

ENERGY, TECHNOLOGY AND FOREIGN EXCHANGE

Information on conservation of energy, technology absorption and foreign exchange earnings and outgo, required to be disclosed pursuant to section 217(1)(e) of the Act read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 is given in Annexure II and forms part of this Annual Report.

PARTICULARS OF EMPLOYEES

In accordance with the provisions of Section 217(2A) of the Act read with the Companies (Particulars of Employees) Rules, 1975, the names and other particulars of employees are to be set out in the Directors’ Report, as an addendum thereto. However, as per the provisions of Section 219(1)(b)(iv) of the Act, the Report and Accounts as set out therein, are being sent to all Members of your Company excluding the aforesaid information about the employees. Any Member, who is interested in obtaining such particulars about employees, may write to the Company Secretary at the Registered Office of your Company.

DIRECTOR’S RESPONSIBILITY STATEMENT

The Audited Accounts for the year under review are in conformity with the requirements of the Act and the Accounting Standards. The financial statements reflect fairly the form and substances of transactions carried out during the year under review and reasonably present your Company’s financial condition and results of operations.

Your Directors confirm that:

I. in the preparation of the Annual Accounts, applicable accounting standards have been followed along with proper explanations relating to material departures, if any;

II. the accounting policies selected have been applied consistently and judgments and estimates are made that are reasonable and prudent so as to give a true and fair view of the state of affairs of your Company as at 31st March, 2010 and of the profit of your Company for the year ended on that date;

III. proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the act for safeguarding the assets of your Company and for preventing and detecting frauds and other irregularities;

IV. the Annual Accounts of your Company have been prepared on a going concern basis.

DIRECTORS

Mr. S. Misra was re-appointed as Managing Director of your Company for a period from 16 October, 2009 to 31st March, 2010. Mr. Misra retired as Managing Director on 31s March, 2010. Consequently, he also stepped off from your Company s Board with effect from the close of business hours on that date. The Board places on record its deep appreciation for the services rendered by Mr. Misra during his tenure as Managing Director of your Company.

Mr. O. P. Puranmalka was appointed as an Additional Director with effect from 16 January, 2010 to hold office till the conclusion of the ensuing Annual General Meeting. Notice pursuant to Section 257 of the Act has been received from a Member proposing Mr. Puranmalka for appointment as Director of your Company.

Mr. Puranmalka has also been appointed as Whole-time Director of your Company with effect from 1st April, 2010 on retirement of Mr. Misra.

Mr. N. J. Jhaveri, Mrs. Rajashree Birla and Mr. V. T Moorthy retire from office by rotation and being eligible, offer themselves for re-appointment.

The Board recommends the above appointments.

Resolutions seeking your approval on these items are included in the Notice convening the Annual General Meeting together with a brief resume of the Directors being appointed/re-appointed.

AUDITORS

M/s. Deloitte Haskins & Sells, Chartered Accountants, Mumbai and M/s. G.P. Kapadia & Co., Chartered Accountants, Mumbai were appointed Joint Statutory Auditors of your Company from the conclusion of the previous Annual General Meeting until the conclusion of the ensuing Annual General Meeting. Being eligible, they offer themselves for re-appointment as auditors of your Company.

The Board proposes the re-appointment of M/s. Deloitte Haskins & Sells, Chartered Accountants, Mumbai and M/s. G.P Kapadia & Co., Chartered Accountants, Mumbai as Joint Statutory Auditors of your Company based on the recommendation of the Audit Committee, to hold office from the conclusion of the ensuing Annual General Meeting until the conclusion of the next Annual General Meeting.

The Board also proposes the re-appointment of M/s. Haribhakti & Co., Chartered Accountants, Mumbai as the Branch Auditor of your Company s Unit s at Jafrabad and Magdalla in Gujarat and Ratnagiri in Maharashtra, based on recommendation of the Audit Committee, to hold office from the conclusion of the ensuing Annual General Meeting until the conclusion of the next Annual General Meeting. In terms of the provisions of the Act, the Board also seeks your approval for the appointment of Branch Auditors in consultation with your Company s Statutory Auditors for any other Branch/Unit/Division of your Company, which may be opened/acquired/ installed in future in India or abroad.

Resolutions seeking your approval on these items are included in the Notice convening the Annual General Meeting.

The observation made in the Auditor s Report are self-explanatory and therefore, do not call for any further comments under Section 217(3) of the Act.

COST AUDITORS

Pursuant to the provision of Section 233B of the Act, your Directors have appointed M/s. N. I. Mehta & Co., Cost Accountants, Mumbai as the Cost Auditors to conduct the Cost Audit of your Company for the financial year ending 31st March, 2011, subject to the approval of the Central Government.

APPRECIATION

Your Directors wish to take this opportunity to express their deep sense of gratitude to the banks, financial institutions, stakeholders, business associates, Central and State Governments for their co-operation and support and look forward to their continued support in future.

We very warmly thank all of our employees for their contribution to your Company s performance. We applaud them for their superior levels of competence, dedication and commitment to your Company.

For and on behalf of the Board

Kumar Mangalam Birla Chairman Mumbai 29 April, 2010