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Directors Report of UltraTech Cement Ltd.

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)


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


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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