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Directors Report of Saurashtra Cements Ltd.

Mar 31, 2018

The Directors present the 60th Annual Report, Audited Accounts and Auditors Report for the Financial Year ended on the 31st of March, 2018.

FINANCIAL HIGHLIGHTS

The highlights of the financial results for the Financial year ended 31st of March 2018 are given below.

(Rs. in Million)

Particulars	Standalone		Consolidated
	Current Financial Year 2017-2018	Previous Financial Year 2016-17	Current Financial Year 2017-2018	Previous Financial Year 2016-17
Revenue from Operation (Net of Excise) and Other Income	5,913.26	4,809.68	5,913.63	4,809.82
Profit / (Loss) before Interest, Depreciation, Exceptional items and Tax	676.80	402.59	676.17	401.73
Finance Cost	34.19	36.54	34.19	36.54
Profit/(Loss) before Depreciation, Exceptional Items and Tax	642.61	36605	641.98	365.18
Depreciation & Impairment	177.43	153.55	177.43	153.84
Exceptional Items	-	-	-	-
Profit/(Loss) before Tax	465.18	212.50	464.55	211.35
Current Tax Expense	102.19	34.44	102.19	34.54
Deferred Tax Adjustment	(262.27)	37.73	(262.27)	37.73
Profit/(Loss) for the year	625.26	140.33	624.63	139.08
Total Other Comprehensive Income (net of tax)	(0.11)	(1.12)	(0.56)	4.59
Total Comprehensive Income	625.15	139.21	624.07	143.67
Retained Earnings - Opening Balance	1,002.57	929.19	989.84	917.71
Add/(Less) Profit/(Loss) for the Year Remeasurement of Defined	625.26	140.33	624.63	139.08
Benefit Plans (Net of Tax)	(0.10)	(1.12)	(0.10)	(1.12)
Less : Equity Dividend & Dividend Distribution Tax thereon	83.28	65.83	83.28	65.83
Retained Earnings - Closing Balance	1,544.45	1,002.57	1,531.09	989.84

THE YEAR UNDER REVIEW

The Indian cement industry witnessed a growth of 6.3% in the financial year 2017-18, bouncing back from negative growth of 1.2% in previous fiscal year 2016-17. The revival in growth was on account of Government''s thrust and increase in spending on infrastructure projects under Bharatmala, Sagarmala, dedicated freight corridors for railways, development of Smart Cities and push towards affordable housing and materialisation of pent up demand. The real estate sector witnessed disruption in the construction activities on account of after effects of demonetization, introduction of Real Estate (Regulation and Development) Act, 2016 (RERA) and implementation of Goods and Service Tax (GST). Cement production during the year was about 297 Million Tons as against the installed capacity of 455 Million Tons with capacity utilization of about 65.3%. The cumulative index of cement production increased by 5.7% in comparison to decline of 1.3% in previous year. The supply overhang continued in the Indian Cement industry during 2017-18 with capacity utilization of around 65%.

The demand for cement during the first half of the financial year 2017-18 was sluggish on account of after effects of demonetization and implementation of GST from 1st July 2017. The adverse effect was more pronounced in housing and infrastructure segments. The cement sector''s growth in the second half of 2017-18 was mainly attributable towards the initiatives being undertaken by the government to boost the infrastructure sector by additional spending on the infrastructure facilities. Consequently, the cement prices remained depressed in first half of the year but bounced back in second half.

Consumption of cement in your home market Gujarat increased by about 3%. The cement prices in Gujarat increased by about 17% over the previous year''s prices and regained the price levels prevalent in FY 2014-15.

PERFORMANCE REVIEW

Production and Despatches

Your Company continued to operate at over 100% capacity utilization. The production of clinker for the year ended March 2018 was 1.23 million tonnes, around 5 percent lower than the clinker production of 1.30 million tonnes for the year ended March 2017. The cement production for the year ended March 2018 was 1.40 million tonnes, around 2 percent lower than the cement production of 1.44 million tonnes in the previous year ended March 2017.

The overall despatches of cement and clinker during the year ended March 2018 were 1.44 million tonnes similar to the overall despatches of 1.43 million tonnes in the previous year ended March 2017.

Marketing and Exports

Your Company''s major sales volumes is from the Gujarat region. However, due to the large surplus in the region, Company continues to maintain a presence in coastal regions of Maharashtra and Kerala. The profitability of these markets remains low on account of high cost of transport and infrastructure.

Exports of cement and clinker have been low on account of adverse market conditions. Your Company exported about 0.037 Million Tons of clinker as against 0.081 Million Tons of Cement Export in the Previous Year.

MANAGEMENT DISCUSSION AND ANALYSIS

The Management Discussion and Analysis Report is provided in a separate section and forms a part of this Report as Annexure A.

DIVIDEND

Your Directors are pleased to recommend a final dividend of Rs.1 per share on 6,91,91,065 fully paid-up Equity Shares of Rs.10/- each for the Financial Year ended 31st of March 2018.

SHARE CAPITAL

Equity Share Capital

The paid up Equity Share Capital of the Company as on 31st of March 2018 including the forfeited shares was Rs.691.94 million.

FINANCIAL STATEMENTS

The Audited Standalone and Consolidated Financial Statements of the Company which forms part of this Annual Report has been prepared pursuant to Regulation 33 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations 2015, in accordance with the provisions of the Companies Act, 2013 and Companies (Indian Accounting Standards) Rules 2015 on Consolidated Financial Statements.

The Consolidated Net Profits of the Company amounted to Rs.624.63 million for the Financial year ended 31st of March 2018.

SUBSIDIARY AND ASSOCIATE COMPANIES

The Company has five subsidiaries.

Section 136 of the Companies Act, 2013 has exempted the listed companies from attaching the financial statements of the Subsidiary companies to the Annual Report of the Company.

In accordance with Section 129(3) of the Companies Act, 2013 read with the rules made there under; the statement containing the salient features of the Financial Statements of the Company''s Subsidiaries are disclosed separately in this Annual Report under Form AOC 1.

Your Company will make available the Annual Accounts of the subsidiary companies to any Member on their request and shall also be kept open for inspection by any Member at the Registered office of the Company. The statement is also available at the website of the Company at http://scl.mehtagroup.com/investors/financials.

DIRECTORS'' RESPONSIBILITY STATEMENT

To the best of their knowledge and belief and according to the information and explanation obtained by them, your Directors make the following statements in terms of Section 134 (3) (c) of the Companies Act, 2013.

(a) that in the preparation of the annual financial statements for the year ended 31st March 2018, the applicable accounting standards have been followed along with proper explanation relating to material departures; if any;

(b) that the accounting policies as mentioned in Note No.1 to the Financial statements have been selected and applied consistently and judgments and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit and loss of the Company for that period;

(c) that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(d) that the annual financial statements have been prepared on a going concern basis;

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

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

CORPORATE GOVERNANCE

Good Governance practices stem from the value system and philosophy of the organisation and your Company is committed to meet the aspirations of all stakeholders. The report on Corporate Governance as stipulated under Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 and a certificate of Compliance from the Auditors of the Company confirming compliance with the conditions of Corporate Governance as stipulated in Regulation 15(2) of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 for the year ended March 31, 2018 forms part of this Report. A declaration by CEO and CFO that Board and Senior Executives have confirmed compliance with the Code of Conduct of the Company also forms a part of this Report as Annexure B.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

All related party transactions are in accordance with the approvals being granted by the Audit Committee, Board and the Members at the General Meeting (as applicable). The other details as required under Securities & Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations 2015 and Section 134 (3) of the Companies Act, 2013 are provided in the Corporate Governance Report.

The particulars of every contract or arrangements entered into by the Company with related parties referred to in sub-section (1) of Section 188 of the Companies Act, 2013 including certain arms length transactions under third proviso thereto is Annexed herewith at Annexure C in Form No. AOC -2.

CORPORATE SOCIAL RESPONSIBILITY

Inclusive growth is a focal point of our Corporate Social Responsibility strategy. Your Company endeavours to create long term benefits for the society through continuous efforts of social upliftment. In constant pursuit of making life better for communities, your Company is committed to:

1. Rural Development.

2. Improving living conditions.

3. Promoting Swachh Bharat.

4. Addressing social inequalities.

5. Improving environmental balance.

6. Promoting Education

7. Healthcare

The Board of Directors have, based on the recommendation of the Corporate Social Responsibility Committee, formulated a Corporate Social Responsibility Policy for welfare of the society.

The CSR policy outlining various areas of development viz. Health Care, Education, Sanitation, Ensuring environmental sustainability and Rural Development projects was adopted by the Board and the same is available at the following link: http://scl.mehtagroup.com/policy/ csr-policy.

During the year under review, your Company has undertaken projects relating to promoting education for better life, extra coaching classes and yoga activities and has supported Clean India Movement and Promoting Health Care for rural area.

The constitution and functions of the Corporate Social Responsibility Committee is provided under the Corporate Governance Report.

The details of various CSR activities undertaken during Financial Year 2017-18 are discussed in detail in The Management Discussion and Analysis report.

The annual report on CSR activities and expenditure required under Section 134 & 135 of the Companies Act, 2013 read with Rule 8 of the Companies (Corporate Social Responsibility Policy) Rules 2014 and Rule 9 of the Companies (Account) Rules 2014 are given in Annexure D of the Report.

LOANS, GUARANTEES AND INVESTMENTS

The particulars of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 and under Schedule V of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 are provided in Notes to the Standalone Financial Statements.

RISK MANAGEMENT

A formal Risk Management System has been implemented on an Enterprise Risk Management (ERM) as a part of strengthening and institutionalizing the decision making process and monitoring the exposures that are faced by the Company.

Your Company has a robust risk assessment and management system wherein the risks are identified, minimized, deliberated and mitigated in lively manner. The risks are periodically reviewed and the major risks are reported to the Audit Committee and Board on quarterly basis.

INTERNAL FINANCIAL CONTROLS

In accordance with Section 134(5)(e) of the Companies Act, 2013, the Directors have an overall responsibility for ensuring that the Company has implemented a robust system and framework of Internal Financial Controls. Accordingly, your Company has devised appropriate systems and framework including proper delegation of authority, policies and procedures, effective IT systems aligned to business requirements, risk based internal audits, risk management framework and whistle blower mechanism.

Your Company has already developed and implemented a framework for ensuring internal controls over financial reporting. This framework includes entity level policies, process and operating level standard operating procedures.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

Reappointment of Directors

In accordance with the provisions of Section 152 of the Companies Act, 2013, Mr. Hemang D. Mehta (DIN: 0146580), will retire by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment. Brief resume of Director seeking re-appointment along with other details as stipulated under Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, is enclosed herewith as Annexure E.

The Board recommends the re appointment.

Appointment / Change in Key Managerial Personnel:

During the year under review, there is no appointment / change in Key Managerial personnel.

Board Evaluation

In accordance with the provisions of the Companies Act, 2013 and Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board of Directors evaluated the performance of the Board as a whole, having regard to various criteria such as Board composition, Board processes, Board dynamics etc. The Independent Directors, at their separate meetings, also evaluated the performance of the Board as a whole based on various criteria.

The questionnaire for Board evaluation was prepared taking into consideration various aspects of the Board functioning such as understanding of Board members of their roles & responsibilities, time devoted by the Board to Company''s long term strategic issues, quality & timeliness of Board information flow between Board members and management, Board''s effectiveness in disseminating of the information to the shareholders and in representing shareholder''s interest, Board information on industry trends & regulatory development and discharge of fiduciary duties of the Board.

Committee performance was evaluated on the basis of their effectiveness in carrying out the respective mandates.

The Board evaluated the effectiveness of its function and that of the committees and individual director by seeking their valuable inputs on various aspects of Board/Committee governance. Based upon various evaluation criteria, the Board and Independent Directors were of the view that the Board and Committee performance is in consonance of the standards / criteria being identified by Nomination & Remuneration Committee and the Independent Directors.

Declaration by Independent directors

All the Independent Directors have furnished declarations stating that they meet the criteria of independence as laid down under Section 149

(6) of the Companies Act, 2013 and Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Appointment of Independent Directors

In accordance with the provisions of Section 149 sub-section 10 read along with sub-section 11 of the Companies Act, 2013; an independent director can be appointed for two consecutive term of 5 years each wherein a Special Resolution is required to be passed at the Members meeting for the second consecutive term.

The Board at its meeting held on 24th May 201 8, on the recommendation of Nomination & Remuneration Committee approved and recommended to the Members re-appointment of following Independent Directors for second consecutive term of five years at the ensuing Annual General Meeting. The details of the existing tenure and proposed tenure are provided hereunder:

Sr. No.	Name of the Director	Tenure ends on	Reappointment proposed
Sr. No.	Name of the Director	Tenure ends on	From	To
1.	Mr. S.V.S. Raghavan	31.3.2019	1.4.2019	31.3.2024
2.	Mr. M. N. Rao	31.3.2019	1.4.2019	31.3.2024
3.	Mr. K. N. Bhandari	31.3.2019	1.4.2019	31.3.2024
4.	Mr. B. P. Deshmukh	31.3.2019	1.4.2019	31.3.2024
5.	Mr. Jayant N. Godbole	31.3.2019	1.4.2019	31.3.2024
6.	Mr. Bimal Thakkar	31.3.2019	1.4.2019	31.3.2024
7.	Mr. P. K. Behl	29.5.2019	30.5.2019	29.5.2024
8.	Mrs. Bhagyam Ramani	3.8.2019	4.8.2019	3.8.2024

Brief resume of Directors seeking re-appointment along with other details as stipulated under Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, is enclosed herewith as Annexure E.

AUDITORS

Statutory Auditors

M/s. Manubhai & Shah LLP, Chartered Accountants, the Statutory Auditors of the Company, who were appointed to audit the accounts of the Company for the Financial Year 2017-18, holds office upto the conclusion of the ensuing Annual General Meeting.

In accordance with the provisions of Section 139 (1) of the Companies Act, 2013 as amended by Companies (Amendment) Act, 2017; it is proposed to reappoint M/s. Manubhai & Shah LLP, Chartered Accountants (Firm Registration no. 106041W/W100136) as Statutory Auditors of the Company to audit the accounts of the Company upto the Financial Year 2021-22 who shall hold office from the conclusion of the ensuing Annual General Meeting till the conclusion of 64 th Annual General Meeting at such remuneration as may be decided by the Board in consultation with the auditors from time to time. As required under the provisions of the Companies Act, 2013, the Company has received written confirmation from M/s. Manubhai & Shah LLP, Chartered Accountants that their appointment, if made, will be in conformity with the limits specified in the Section 143(1)(g) of the Companies Act, 2013.

Secretarial Auditors

M/s Ragini Chokshi & Co, Practicing Company Secretaries were appointed by the Board of Directors as the Secretarial Auditor of the Company to carry out Secretarial Audit under the provisions of Section 204 of the Companies Act, 2013 for the Financial Year 2017-18. The report of the Secretarial Auditor is annexed as Annexure F to this report.

The Board of Directors of the Company on the recommendation of the Audit Committee appointed M/s. Ragini Chokshi & Co, Practicing Company Secretaries as Secretarial Auditor of the Company for the Financial Year 2018-19.

Tax Auditors

The Board of Directors on the recommendation of the Audit Committee appointed M/s. Manubhai & Shah LLP, Chartered Accountants to carry out the Tax Audit for the Assessment Year 2018-19.

Internal Auditors

The Board of Directors on the recommendation of the Audit Committee appointed M/s. Haribhakti & Co LLP, Chartered Accountants, to carry out the Internal Audit of the Company for the Financial Year 2018-19.

Cost Auditors

In accordance with the provisions of Section 148 of the Companies Act, 2013 and on the recommendation of Audit Committee, M/s. V. J. Talati & Co, Cost Accountants, have been appointed by the Board as Cost Auditor of the Company for the Financial Year 2018-19. Certificate of eligibility under Section 148 of the Companies Act, 2013 has also being received from him. 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 for seeking Members ratification for the remuneration payable to M/s. V. J. Talati & Co., Cost Auditor, is included at item no. 5 of the Notice convening the Annual General Meeting.

OTHER DISCLOSURES UNDER COMPANIES ACT, 2013 AND SEBI(LISTING OBLIGATIONS AND DISCLOSURE REQUIREMENTS) REGULA TIONS 2015

Audit Committee

The Company has an Audit Committee and details of its constitution, terms of reference are set out in the Corporate Governance Report. Nomination & Remuneration Committee and Policy

The Company has a Nomination & Remuneration Committee and has also adopted Nomination & Remuneration Charter and Remuneration/ Compensation Policy. The constitution of the Committee along with the terms of reference to the Committee is set out in the Corporate Governance Report. The Nomination and Remuneration Charter and Compensation Policy is available at http://scl.mehtagroup.com/policy/ nomination-and-remuneration-charter and http://scl.mehtagroup.com/policy/compensation-policy

Vigil Mechanism

The Company has established a Vigil Mechanism / Whistle Blower Policy and the directors and employees of the Company can approach the Audit Committee when they suspect or observe unethical practices, malpractices, non-compliances of company policies, etc.

Number of Board Meetings

During the financial year under review, four Board Meetings were held. The meetings were held on the 23rd day of May 2017, 13th day of September 2017, 9th day of November 2017 and 8th day of February 2018.

Energy Conservation, Technology Absorption & Foreign Exchange Earnings and Outgo

The particulars relating to conservation of energy, technology absorption, foreign exchange earnings and outgo, as required to be disclosed under Section 134 (3) of the Companies Act, 2013 are provided in Annexure G forming a part of this Report.

Annual Return

Pursuant to Section 92(3) and Section 134(3) of the Companies Act, 2013 read with Rule 12(1) of the Companies (Management and Administration) Rules, 2014, as amended, the Annual Return in Form MGT-7 is available at the website of the Company at http://scl.mehtagroup.com/investors/annualreturn.

Particulars of Employees

There were 443 permanent employees in the Company as on 31st March 2018. The disclosure pertaining to remuneration and other details as required under Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are annexed to this report at Annexure H.

Further, a statement showing the names and other particulars of employees drawing remuneration in excess of the limits as set out in the Rule 5(2) and other details as required under Rule 5(3) of the aforesaid Rules forms part of this report. However, in terms of first proviso to Section 136(1) of the Act, the Annual Report and Accounts are being sent to the Members and others entitled thereto, excluding the aforesaid information. The said information is available for inspection by the Members at the Registered Office of the Company during business hours on working days upto the date of the ensuing Annual General Meeting. If any Member is interested in obtaining a copy thereof, such Member may write to the Company Secretary, whereupon a copy would be sent. Further, the details are also available on the company''s website: www.saurashtracementlimited.com/investors.

Employee Stock Option Scheme

Nomination & Remuneration Committee and the Board of Directors at its meetings held on 23rd May 2017 and the Members at the Annual General Meeting held on 26th July 2017 approved the introduction and implementation of Saurashtra Employee Stock Option Scheme 2017 (hereinafter referred to as the "ESOS 2017â) to create and grant from time to time, in one or more tranches, not exceeding 69,19,106 (Sixty Nine Lakh Nineteen Thousand One Hundred and Six) Employee Stock Options to or for the benefit of such person(s) who are in permanent employment of the Company, including any Director, whether whole time or otherwise, (other than Promoters of the Company, Independent Directors and Directors holding directly or indirectly more than 10% of the outstanding Equity Shares of the Company), as may be decided under ESOS 2017, exercisable into not more than 69,19,106 (Sixty Nine Lakh Nineteen Thousand One Hundred and Six) equity shares of face value of '' 10 (Rupees Ten) each fully paid-up, on such terms and in such manner as the Board may decide in accordance with the provisions of the applicable laws and the provisions of ESOS 2017.

Based upon the above authority, the Nomination and Remuneration Committee at its meeting held on 8th February 2018, approved grant of 16,33,253 (Sixteen Lakh Thirty Three Thousand Two Hundred Fifty Three) options at an exercise price of ''10/- per option to eligible employees of the Company as per the terms and conditions mentioned in ESOS 2017 to the permanent employees of the Company (including Managing Director) approved by the Members at the Annual General Meeting held on 26th July 2017.

The disclosures as required as per Rule 12(9) of Companies (Share Capital and Debentures) Rules, 2014 and as per SEBI Requirements are given below:

Options granted during the year	16,33,253
Options vested during the year	Nil
Options Exercised	Nil
Total number of shares arising as a result of exercise of option	Nil
Options Lapsed	Nil
Exercise Price	Rs. 10/- per option
Option cancelled	Nil
Variation of terms of Option	Subject to such approvals as may be required, the Nomination and Remuneration Committee may at any time amend, alter, or vary the terms of the ESOS 2017 and/ or terms of the Options already granted under the ESOS 2017 subject to the condition that such amendment, alteration, or variation, as the case may be is not detrimental to the interest of Employees.
Money realized by exercise of options	Options yet to be exercised.
Total no. of options in force	None of the options granted have vested. The number of options in force (Options granted) is 16,33,253.

Employee wise details granted to Key Managerial Personnel

Name	Designation	Number of Options granted
M. S. Gilotra	Managing Director	3,45,955
Rakesh Mehta	Chief Financial Officer	1,38,455
Sonali Sanas	Vice President-Legal & Company Secretary	79,536

Employees to whom more than 5% options granted during the year:

Name	Designation	Number of Options granted
M. S. Gilotra	Managing Director	3,45,955
Rakesh Mehta	Chief Financial Officer	1,38,455
Prakash Kunte	Director - HR	1,32,261
Narendra Singh	Director - Works	1,79,917

Employees to whom options more than 1% of issued capital granted during the year - Nil

Sexual Harassment of Women at Work Place (Prevention, Prohibition & Redressal) Act, 2013

The Company has in place, a formal policy on Prohibition, Prevention and Redressal of Sexual Harassment of Women at Workplace. Detailed note is set out in the Corporate Governance report.

During the year under review, the Company has not received any complaints of sexual harassment from any of the women at work place of the Company.

Other Disclosures:

No disclosure or reporting is made in respect of the following items as required under the Companies Act, 2013 and Securities & Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations 2015, as there were no transactions during the year under review:

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

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

- The company does not have any scheme or provision of money for the purchase of its own shares by employees or by trustees for the benefit of employees.

- The Managing Directors of the Company do not receive any remuneration or commission from any of its subsidiaries.

- No material fraud has been reported by the Auditors to the Audit Committee or the Board.

- There was no revision in the financial statements.

- There was no change in the nature of business.

GENERAL

Listing of Equity Shares

The Company''s equity shares are listed on the Bombay Stock Exchange Ltd (BSE). Listing fees have been paid up to 31st March 2019. Staff Relations

Industrial relations at our Factory and Offices have remained cordial.

Secretarial Standards

In accordance with SS-1, the Company has complied with all applicable secretarial standards.

Awards and accolades

During the year under review, the Company has been conferred with the following awards & accolades.

In the area of Mines;

- Five Star award from Indian Bureau of Mines, Gandhinagar Region, Ministry of Mines for exemplary performance in implementation of Sustainable Development Framework during 2016-17 assessed under Star Rating System.

- First prize from Commissionerate, Geology & Mines of Gujarat, Government of Gujarat for promoting Swachhata Pakhwada program under District Level.

- First, Second and Third prize under various categories from Directorate General of Mines Safety, Ahmedabad at 8th Metalliferous Mines Safety & Swachhata Week 2017, Ahmedabad Region under State Level.

- 1st Prize and 2nd Prize for Reclamation & Rehabilitation and Environment Monitoring under State Level from Indian Bureau of Mines, Gandhinagar Region at 25th Mines Environment & Mineral Conservation Week 2017-18.

Acknowledgement

The Directors thank the Central Government, Government of Gujarat, Financial Institutions, Bankers, Shareholders, Employees, Stockists, Dealers and all other stakeholders associated with its operations for the co-operation and encouragement extended to the Company. The Board also takes this opportunity to express its sincere appreciation of the contribution and dedicated work of all the employees of the Company.

On behalf of the Board of Directors

Place : Mumbai M.S.Gilotra Jay Mehta

Dated_: 24.05.2018 Managing Director Executive Vice Chairman

Mar 31, 2017

Dear Members,

The Directors present the 59th Annual Report, Audited Accounts and Auditors Report for the Financial Year ended on the 31st of March, 2017.

FINANCIAL HIGHLIGHTS

The highlights of the financial results for the Financial year ended 31st of March 2017 are given below.

(Rs. in Millions)

Particulars	Standalone		Consolidated
Particulars	Current Financial Year 2016-2017	Previous Financial Year 2015-16	Current Financial Year 2016-2017	Previous Financial Year 2015-16
Revenue from Operation (Net of Excise) and Other Income	4855.14	5425.07	4856.56	5426.27
Profit / (Loss) before Interest, Depreciation, Exceptional items and Tax	333.69	758.37	334.11	758.70
Finance Cost	36.54	48.07	36.54	48.07
Profit/(Loss) before Depreciation, Exceptional Items and Tax	297.15	710.30	297.57	710.63
Depreciation & Impairment	141.70	126.86	141.99	126.92
Profit/(Loss) before Exceptional items and Tax	155.45	583.44	155.58	583.71
Exceptional Items	-	103.70	-	103.70
Tax Expense	34.44	186.87	34.55	186.93
Deferred Tax Adjustment	24.65	62.48	24.65	62.48
Profit/(Loss) after Tax	96.36	437.79	96.38	438.00
Brought forward Profit/(Loss) from earlier years	58.12	(191.03)	38.40	(210.96)
Interim Preference Dividend & Dividend Distribution Tax thereon	-	122.82	-	122.82
Proposed Equity Dividend & Dividend Distribution Tax thereon	-	65.82	-	65.82
Balance of Profit / (Loss) carried to Balance Sheet (Reserves)	154.48	58.12	134.78	38.40

THE YEAR UNDER REVIEW

The year 2016-17 was marked by excess cement capacity in the country, falling demand post demonetization and drop in cement prices during second half of the year. In these challenging conditions, the Company''s profitability was also impacted.

The Indian cement industry registered a negative growth rate during the fiscal year 2016-17. The cumulative index of cement production (with a weightage of 2.41 percent in the Index of Industrial Production) during 2016-17 declined by 1.3 percent first time in decade, as compared to 5 percent growth during the previous year.

Consumption growth of cement in our home market Gujarat remained almost stagnant with a marginal increase of around one percent. In spite of a comparatively better monsoon, the cement consumption was adversely affected due to inadequate investments in infrastructural projects and also due to the economic situation on account of demonetization in the second half of the year.

The energy costs were showing an escalation trend on account of increase in the coal and pet coke prices. The taxes by way of royalty on minerals, excise duty, octroi, service tax etc. continued to be high. The lower cement prices in the domestic market and unviable prices in the export markets resulted in lower profitability.

PERFORMANCE REVIEW Production and Sales

The production of clinker for the year ended March 2017 was 1.298 million tonnes, which is around 1 percent higher than the clinker production of 1.287 million tonnes for the year ended in March 2016. The cement production for the year ended March 2017 was 1.434 million tonnes, which is around 2 percent lower than the cement production of 1.465 million tonnes in the previous year ended in March 2016.

The overall sales (cement and clinker) is 1.433 million tonnes during the year ended March 2017, which is around 4 percent lower than the overall sale of 1.489 million tonnes in the previous year ended March 2016.

Export

The export of cement for the year ended March 2017 was 0.081 million tonnes as compared to 0.237 million tonnes in the previous year. The export market remained less viable with unremunerative prices and specific quality requirements of the customer.

MANAGEMENT DISCUSSION AND ANALYSIS

The Management Discussion and Analysis Report is provided in a separate section and forms a part of this Report as Annexure A.

DIVIDEND

Your Directors are pleased to recommend a final dividend ofRs.1 per share on 6,91,91,065 fully paid-up Equity Shares ofRs.10/- each for the Financial Year ended 31st March 2017.

SHARE CAPITAL

Equity Share Capital

The paid up Equity Share Capital of the Company as on 31st March 2017 including the forfeited shares wasRs.6919.42 lacs.

INDIAN ACCOUNTING STANDARD (IND AS)

The Ministry of Corporate Affairs vide its notification dated February 16, 2015 has notified the Companies (Indian Accounting Standard) Rules, 2015.

In pursuance of this notification, the Company will adopt the same with effect from April 01, 2017. The Company has adequate systems in place to migrate to IND AS and to ensure proper reporting and accounting under IND AS.

CONSOLIDATED FINANCIAL STATEMENTS

As required under Section 136 of the Companies Act 2013 and Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations 2015, the Consolidated Financial Statements have been prepared by the Company in accordance with the requirements of Accounting Standard 21 âConsolidated Financial Statements'' issued by âThe Institute of Chartered Accountants of India''. The Audited Consolidated Financial Statements together with Auditors'' Report thereon forms a part of the Annual Report.

The Consolidated Net Profits of the Company amounted toRs.963.78 lacs for the Financial year ended 31st of March 2017.

SUBSIDIARY AND ASSOCIATE COMPANIES

The Company has five subsidiaries.

Section 136 of the Companies Act 2013 has exempted the listed companies from attaching the financial statements of the Subsidiary companies to the Annual Report of the Company.

In accordance with Section 129(3) of the Companies Act 2013 read with the rules made there under; statement containing the salient features of the Financial Statement of the Company''s Subsidiary and associate Companies is disclosed separately in this Annual Report under Form AOC 1.

The Company will make available the Annual Accounts of the subsidiary companies to any member on their request and shall also be kept open for inspection by any member at the Registered office of the Company. The statement is also available at the website of the Company at http://scl.mehtagroup.com/investors/financials.

DIRECTORSâ RESPONSIBILITY STATEMENT

To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statements in terms of Section 134 (3) (c) of the Companies Act, 2013.

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

(d) that the annual financial statements have been prepared on a going concern basis;

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

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

CORPORATE GOVERNANCE

The Company is committed to maintain the highest standards of Corporate Governance and adhere to Corporate Governance requirements set out by SEBI. The report on Corporate Governance as stipulated under Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 and a certificate of Compliance from the Auditors of the Company confirming compliance with the conditions of Corporate Governance as stipulated in Regulation 15(2) of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 for the year ended March 31, 2017 forms a part of this Report. A declaration by CEO and CFO that Board and senior members have complied with the Code of Conduct of the Company also forms a part of this Report as Annexure B.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

CORPORATE SOCIAL RESPONSIBILITY

The Company has been at the forefront in extending benefits to the local communities in and around the Company''s operations at Ranavav. The Company has always believed in the sustainable development of the Society.

The Board of Directors have based on the recommendation of the Corporate Social Responsibility committee, formulated a Corporate Social Responsibility Policy for welfare of the society.

The CSR policy outlining various areas of development viz. Health Care, Education, Sanitation, Ensuring environmental sustainability and Rural development projects was adopted by the Board and the same is available at the following link: http://scl.mehtagroup.com/policy/ csr-policy.

During the year under review, your Company has undertaken projects relating to Health care & sanitation, providing good quality education and upliftment of the locals through rural development projects.

The constitution and functions of the Corporate Social Responsibility Committee is provided under the Corporate Governance Report.

The details of various CSR activities undertaken during Financial Year 2016-17 is discussed in detail in Management Discussion and Analysis report.

The annual report on CSR activities and expenditure required under Section 134 & 135 of the Companies Act,2013 read with Rule 8 of the Companies (Corporate Social Responsibility Policy) Rules 2014 and Rule 9 of the Companies (Account) Rules 2014 is given in Annexure D of the Report.

LOANS, GUARANTEES AND INVESTMENTS

RISK MANAGEMENT

Company has a robust risk assessment and management system wherein the risk is identified, minimized, deliberated and mitigated in lively manner. The risks are periodically reviewed and reported to the Audit Committee and Board on quarterly basis.

INTERNAL FINANCIAL CONTROLS

The Company has an internal control system commensurate with the size, scale and complexity of its operations. In order to enhance controls and governance standards, the Company has adopted Standard Operating Procedures, which ensure that robust internal financial controls exist in relation to operations, financial reporting and compliance. In addition the Internal Audit function monitors and evaluates the efficiency and adequacy of the internal control system in the Company, its compliance and operating systems, accounting procedures and policies at all locations. Periodical reports on the same are also presented to the Audit Committee.

DIRECTORS AND KEY MANAGERIAL PERSONNEL Reappointment of Directors

In accordance with the provisions of Section 152 of the Companies Act, 2013, Mr. Hemnabh R. Khatau (DIN: 02390064), will retire by rotation at the ensuing Annual General Meeting and being eligible, offers himself for reappointment. Brief resume of Director seeking re-appointment along with other details as stipulated under Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, is enclosed herewith as Annexure E.

The Board recommends the re appointment.

Board Evaluation

Declaration by Independent directors

All the Independent Directors have furnished declarations stating that they meet the criteria of independence as laid down under Section 149 (6) of the Companies Act, 2013 and Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.

AUDITORS Statutory Auditors

M/s. Bansi S. Mehta & Co, Chartered Accountants, the Statutory Auditors of the Company, who was reappointed to audit the accounts of the Company for the Financial Year 2016-17, hold office upto the conclusion of the ensuing Annual General Meeting and has completed their term of office in accordance with the provisions of Section 139(2) of the Companies Act, 2013.

It is proposed to appoint M/s. Manubhai & Shah LLP, Chartered Accountants as Statutory Auditors of the Company to audit the accounts of the Company for the Financial Year 2017-18 who shall hold office from the conclusion of the ensuing Annual General Meeting till the conclusion of next Annual General Meeting. As required under the provisions of the Companies Act, 2013, the Company has received written confirmation from M/s. Manubhai & Shah LLP Chartered Accountants that their appointment, if made, will be in conformity with the limits specified in the Section 143(1)(g) of the Companies Act, 2013.

Secretarial Auditors

M/s Ragini Chokshi & Company, Practicing Company Secretaries were appointed by the Board of Directors as the Secretarial Auditor of the Company to carry out Secretarial Audit under the provisions of Section 204 of the Companies Act, 2013 for the Financial Year 2016-17. The report of the Secretarial Auditor is annexed as Annexure F to this report.

The Board of Directors of the Company on the recommendation of the Audit Committee appointed M/s. Ragini Chokshi & Company, Practicing Company Secretaries as Secretarial Auditor of the Company for the Financial Year 2017-18.

Tax Auditors

The Board of Directors on the recommendation of the Audit Committee appointed M/s. Bansi S. Mehta & Co., Chartered Accountants to carry out the Tax Audit for the Assessment Year 2017-18.

Internal Auditors

The Board of Directors on the recommendation of the Audit Committee appointed M/s. Haribhakti & Co LLP Chartered Accountants, to carry out the Internal Audit of the Company for the Financial Year 2017-18.

Cost Auditors

In accordance with the provisions of Section 148 of the Companies Act 2013, on the recommendation of Audit Committee, M/s. V J. Talati & Co, Cost Accountants, have been appointed by the Board as Cost Auditor of the Company for the Financial Year 2017-18 and a certificate of eligibility under Section 148 of the Companies Act, 2013 has been received. 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 for seeking Members ratification for the remuneration payable to M/s. V J. Talati & Co., Cost Auditor, is included at item no.5 of the Notice convening the Annual General Meeting.

OTHER DISCLOSURES UNDER COMPANIES ACT, 2013 AND SEBI (LISTING OBLIGATIONS AND DISCLOSURE REQUIREMENTS) REGULATIONS 2015 Audit Committee

The Company has an Audit Committee and details of its constitution, terms of reference are set out in the Corporate Governance Report.

Nomination & Remuneration Committee and Policy

Vigil Mechanism

Number of Board Meetings

During the year under review, five meetings of the Board of Directors were held. The meetings were held on 23rd day of May 2016, 11th day of August 2016, 14th day of September 2016, 24th day of October 2016 and 24th day of January 2017.

Energy Conservation, Technology Absorption & Foreign Exchange Earnings and Outgo

The particulars relating to conservation of energy, technology absorption, foreign exchange earnings and outgo, as required to be disclosed under section 134 (3) of the Companies Act, 2013 are provided in Annexure G forming a part of this Report.

Extract of the Annual Return

The extract of the Annual Return in Form No. MGT - 9 forms a part of this report as Annexure H.

Particulars of Employees

There were 472 permanent employees of the Company as on 31st March 2017. The disclosure pertaining to remuneration and other details as required under Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are annexed to this report at Annexure I.

Further, a statement showing the names and other particulars of employees drawing remuneration in excess of the limits as set out in the Rule 5(2) and other details as required under Rule 5(3) of the aforesaid Rules forms part of this report. However, in terms of first proviso to Section 136(1) of the Act, the Annual Report and Accounts are being sent to the members and others entitled thereto, excluding the aforesaid information. The said information is available for inspection by the members at the Registered Office of the Company during business hours on working days upto the date of the ensuing Annual General Meeting. If any member is interested in obtaining a copy thereof, such member may write to the Company Secretary, whereupon a copy would be sent. Further, the details are also available on the Company''s website: http://scl.mehtagroup.com/investors.

Sexual Harassment of Women at Work Place (Prevention, Prohibition & Redressal) Act, 2013

The Company has in place, a formal policy on Prohibition, Prevention and Redressal of Sexual Harassment of Women at Workplace. Detailed note is set out in the Corporate Governance report.

During the year under review, the Company has not received any complaints of sexual harassment from any of the women at work place of the Company.

Related Party Transactions

All related party transactions are in accordance with the approvals being granted by the Audit Committee, Board and the Members at the General Meeting. The other details as required under Securities & Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations 2015 and Section 134 (3) of the Companies Act, 2013 are mentioned in the Corporate Governance Report.

Other Disclosures:

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

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

- Issue of shares to the employees of the Company under any scheme (sweat equity or stock options).

- The Company does not have any scheme or provision of money for the purchase of its own shares by employees or by trustees for the benefit of employees.

- The Managing Directors of the Company do not receive any remuneration or commission from any of its subsidiaries.

- No material fraud has been reported by the Auditors to the Audit Committee or the Board.

- There was no revision in the financial statements.

- There was no change in the nature of business.

GENERAL Listing of Equity Shares

The Company''s equity shares are listed on the Bombay Stock Exchange Ltd (BSE). Listing fees have been paid up to 31st March 2018.

Staff Relations

Industrial relations at our Factory and Offices remained cordial.

Awards and accolades

During the year under review, the Company has been conferred with the following awards & accolades.

In the areas of Environment;

In recognition of our outstanding contribution in the field of environment protection, environmental management system, pollution prevention, recycling and consumption of AFR, biodiversity conservation, rain water harvesting and water conservation, energy conservation and corporate social responsibility the following awards have been conferred on the Company.

1. FAME Excellence Award_2016- Platinum Award for Environment Protection

2. Greentech Environment Award_2016-17- Gold Award for Environment Protection

3. Rashtra Vibhusan Award_2016-17- Platinum Award for Environment Protection

In the area of Mines;

Metalliferous Mines Safety Week-2016 organised by Directorate General of Mines & Safety :- The Company bagged First, Second and Third ranks in Health, Safety & occupational health check up, Mine Machinery, improvement, innovation and Mine working & Implementation respectively. The Company also bagged Second and Third rank in Overall performance relating to Vocational Training & Statutory records and Trade Test, First aid drill.

Mines Environment and Mineral Conservation ( MEMC) Week-2016 by Directorate General of Mines & Safety: This week long celebration includes various trade tests, competitions, and inspections of mine working, machineries, lighting, publicity propaganda and various other events followed by a Final Day Function.

In this grant event, around 90 mechanized and semi-mechanized mines participated from Gujarat Region. The Company, being an active participating member like every year, also took part in this event and bagged Second rank in Waste Dump Management and Mineral Beneficiation.

Acknowledgement

On behalf of the Board of Directors

Place : Mumbai M.S. Gilotra Jay Mehta

Dated: 23.05.2017 Managing Director Executive Vice Chairman

Mar 31, 2015

Dear Members,

The Directors present the 57th Annual Report, Audited Accounts and Auditors Report for the Financial Year ended on the 31st of March, 2015.

Financial results

The highlights of the financial results for the Financial year ended 31st of March 2015 are given below.

(Rs,in Millions)

Particulars standalone Consolidated

Current Previous Current Previous Financial Financial Financial Financial Year Year Year Year 2014-2015 2013-14 2014-2015 2013-14

Revenue from Operation and Other Income (Net of Excise) 5699.14 5359.69 5700.37 5364.57

Profit before interest, depreciation and exceptional items. 965.76 628.82 966.06 631.58

Finance Cost 133.76 163.70 133.76 163.70

Profit/(Loss) before depreciation 832.00 465.12 832.30 467.88

Depreciation & Impairment 348.62 258.62 348.79 258.84

Profit/(Loss) before exceptional items and Deferred Tax Assets 483.38 206.50 483.51 209.04

Exceptional Item 308.96 Nil 308.96 Nil

Tax Expense (208.52) Nil (208.57) 0.06

Deferred Tax Adjustment 92.18 Nil 92.18 Nil

Profit/(Loss) after tax 676.00 206.50 676.08 208.98

Brought forward Profit/(Loss) from earlier years (867.03) (1073.53) (887.04) (1096.02)

Balance of Profit / (Loss) carried to Balance Sheet (191.03) (867.03) (210.96) (887.04)

The Year Under review

The economy and cement production showed signs of improvement. The cement production during 2014-15 grew by about 5.6 percent as against less than 4 percent during the previous year.

Similarly, consumption of cement in our home market of Gujarat increased by about 6 percent resulting in improved sales and prices, profitability as compared to the previous year. The international prices of coal were lower than previous year. However the taxes by way of Royalties on minerals, excise duties and sales tax continued to be high and further increased in the budget of 2014-15. Additional Customs duty and CVD was also imposed on coal imports.

Performance review

Production and sales

The production of clinker for the year ended March 2015 was 1.32 million tonnes, which is 107 percent of the rated capacity of the production unit and is also more than clinker production of 1.31 million tonnes for the year ended in March, 2014. The cement production for the year ended March, 2015 was 1.47 million tonnes, which is higher by 11 percent than the cement production of 1.33 million tonnes in the previous year ended in March 2014.

The overall sale (cement and clinker) during the year ended March 2015 was 1.48 million tonnes, which is higher than the overall sale of 1.46 million tonnes in the previous year ended in March 2014.

exports

The export of cement for the year ended March 2015 was 0.207 million tonnes, which is almost similar to 0.213 million tonnes during the previous year ended in March 2014. However, the export of clinker was nil as compared to the previous year of 0.193 million tonnes.

Dividend

In view of the carry forward losses, your Directors do not recommend any Dividend for the year.

Management Discussion and analysis

The Management Discussion and Analysis Report on the Operations of the Company is provided in a separate section and forms a part of this Report as annexure a.

Consolidated Financial statements

As required under Clause 32 of the Listing Agreement with the Stock Exchange and Section 136 of the Companies Act, 2013, the Consolidated Financial Statement has been prepared by the Company in accordance with the requirements of Accounting Standard 21 'Consolidated Financial Statements' issued by 'The Institute of Chartered Accountants of India'. The Audited Consolidated Financial Statements together with Auditors' Report thereon forms a part of the Annual Report.

The Consolidated Net Profits of the Company and its subsidiaries amounted to Rs. 6760.82 lacs for the Financial year ending 31st March, 2015.

subsidiary Companies

The Company has five subsidiaries.

Section 136 of the Companies Act 2013 has exempted the listed companies from attaching the financial statements of the Subsidiary companies to the Annual Report of the company.

In accordance with Section 129(3) of the Companies Act, 2013 read with the rules made there under; statement containing the salient features of the Financial Statement of the Company's Subsidiary Companies is disclosed separately in this Annual Report under Form AOC 1.

The Company will make available the Annual Accounts of the subsidiary companies to any member on their request and shall also be kept open for inspection by any member at the Registered office of the Company. The statements are also available at the website of the company at http://scl-mehtagroup.com/investors/fnancials.

Directors' responsibility statement

To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statements in terms of Section 134 (3) (c) of the Companies Act, 2013.

(a) that in the preparation of the annual financial statements for the year ended 31st March, 2015, the applicable accounting standards had been followed along with proper explanation relating to material departures; if any;

(b) that the accounting policies as mentioned in Note No.1 to the Financial statements have been selected and applied consistently and judgments and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit and loss of the Company for that period;

(c) that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(d) that the annual financial statements have been prepared a going concern basis;

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

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

Corporate Governance

A separate report on the Compliance with Clause 49 of the Listing Agreement with the Stock Exchanges on Corporate Governance along with a Certificate of Compliance from the Statutory Auditors forms a part of this Report as annexure b.

The Company is committed to maintain the highest standards of Corporate Governance and adhere to Corporate Governance requirements set out by SEBI. The report on Corporate Governance as stipulated under clause 49 of the Listing Agreement forms an integral part of this Report. Also a certificate of Compliance from the Auditors of the Company confirming compliance with the conditions of Corporate Governance forms a part of this Report. A declaration by CEO and CFO that Board and senior members have complied with the Code of Conduct of the Company also forms a part of this Report.

related Party Transactions

All related party transactions are on arms length basis at prevailing market prices. The other details as required under Clause 49 of the Listing Agreement and Section 134 (3) of the Companies Act, 2013 as detailed in the Corporate Governance report.

Particulars of Contracts or arrangements with related Parties:

The particulars of every contract or arrangements entered into by the Company with related parties referred to in sub-section (1) of Section 188 of the Companies Act, 2013 including certain arms length transactions under third proviso thereto is Annexed herewith at annexure C in Form No. AOC-2.

Corporate social responsibility

The Company has been committed towards various social measures and has taken initiatives to cater to the needs of the society. Pursuant to introduction of Section 135 of the Companies Act, 2013 and the rules made there under the Company has constituted a CSR committee.

The Board of Directors have based on the recommendation of the committee, formulated a Corporate Social Responsibility Policy for welfare of the society. The policy is available at the following link: http://scl.mehtagroup.com/policy/csr-policy.

In view of the carry forward losses, the Company was not required to spend on the Corporate Social Responsibility activities under Section 135 of the Companies Act, 2013.

The constitution and functions of the Corporate Social Responsibility Committee are provided under the Corporate Governance Report.

Company has taken certain initiatives under Corporate Social responsibility (though not required under Section 135 of the Companies Act, 2013) and the same have been detailed under the Management Discussion and Analysis Report.

risk Management

A formal Risk Management System is being implemented on an Enterprise Risk Management (ERM) as a part of strengthening and institutionalizing the decision making process and monitoring the exposures that are faced by the Company.

Managing Risk is a skill that is sought to be strengthened through this process and an effort at making decision making more consistent in a way that the business objectives are met most of the times. The ERM process seeks to provide greater confidence to the decision maker and thus enhance achievement of Objectives.

Pursuant to the requirements of Clause 49 of the Listing Agreement the Company has constituted a Risk Management Committee and has also adopted a Risk Management Policy, the constitution of the committee along with principles pertaining to the management of risk are set out in the Corporate Governance Report of the Company.

Directors and Key Management Personnel

appointment

During the year, India Debt Management Private Limited nominated Mr. Navin Sambtani (DIN: 01811472) as their Nominee on the Board of the Company who was appointed as a Nominee Director with effect from 6.11.2014.

Cessation of Directors

Mr. Denys Firth (DIN: 00031942) and Mr. Susheel Kak (DIN:03612592) Nominee Directors of India Debt Management Private Limited (IDM) resigned from the Board of the Company as IDM had withdrawn their nomination during the year and ceases to be the Directors.

Mr. Alexander Shaik (DIN: 00031975) and Mr. Navin Sambtani (DIN:01811472) Nominee Directors of India Debt Management Private Limited (IDM) resigned from the Board of the Company as IDM had withdrawn their nomination with effect from 12th May, 2015 and ceases to be the Directors as the Company has repaid all outstanding dues to IDM under various loans and other debt instruments.

The Board has placed on record its appreciation for the contribution made by the above Directors.

reappointment of Directors

In accordance with the provisions of Section 152 of the Companies Act, 2013, Mr. Hemnabh Khatau (DIN: 02390064), will retire by rotation at the ensuing Annual General Meeting and being eligible, offer himself for reappointment. Brief resume of Director seeking re- appointment along with other details as stipulated under Clause 49 of the Listing Agreement, are provided in the Notice for convening the Annual General Meeting.

The Board of Directors at its meeting held on 14th May, 2015, has reappointed Mr. Jay Mehta as Executive Vice Chairman and Mr. M. S. Gilotra as Managing Director for a further period of five years from 1st January, 2016 to 31st December, 2020 and remuneration payable over a period of 3 years from 1st January, 2016 to 31st December, 2018, subject to the approval of the Members and the Central Government.

The resolutions seeking approval of the Members for the appointment and remuneration of Mr. Jay Mehta and Mr. M. S. Gilotra have been incorporated in the Notice of the forthcoming Annual General Meeting of the Company along with brief details about them.

The Board recommends their re appointments.

board evaluation :

In accordance with the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board of Directors evaluated the performance of the Board, having regard to various criteria such as Board composition, Board processes, Board dynamics etc. The Independent Directors, at their separate meetings, also evaluated the performance of the Board as a whole based on various criteria. The Board and the Independent Directors were of the unanimous view that performance of the Board of Directors as a whole was satisfactory.

Declaration by Independent directors

All the Independent Directors have furnished declarations stating that they meet the criteria of independence as laid down under Section 149 (6) of the Companies Act, 2013 and Clause 49 of the Listing Agreement.

appointment / Change in Key Management Personnel :

Mr. M. S. Gilotra, Managing Director of the Company was also designated as Key Managerial Personnel with effect from 1st October, 2014.

Mr. Rakesh Mehta was appointed as Chief Financial Officer of the Company with effect from 1st October, 2014.

Ms. Anupama Pai was appointed as Vice President (Legal) and Company Secretary of the Company with effect from 1st October, 2014 and resigned with effect from 30th November, 2014.

Ms. Sonali Sanas was appointed as Vice President (Legal) and Company Secretary of the Company with effect from 2nd March, 2015.

auditors and auditors report

statutory auditors:

M/s. Bansi S. Mehta & Co, Chartered Accountants, the Statutory Auditors of the Company, who hold office up to the conclusion of the ensuing Annual General Meeting in accordance with the provisions of the Companies Act, 2013 who are eligible for re-appointment are recommended for re-appointment to audit the Accounts of the Company for the Financial Year 2015-16. As required under the provisions of the Companies Act, 2013, the Company has received written confirmation from M/s. Bansi S. Mehta & Co, Chartered Accountants that their appointment, if made, will be in conformity with the limits specified in the Section 143(1)(g) of the Companies Act, 2013.

secretarial auditors

M/s Ragini Chokshi & Company, Practicing Company Secretaries were appointed by the Board of Directors as the Secretarial Auditor of the Company to carry out Secretarial Audit under the provisions of Section 204 of the Companies Act, 2013 for the Financial Year 2014-15. The report of the Secretarial Auditor is annexed as annexure D to this report.

The Board of Directors of the Company on the recommendation of the Audit Committee appointed M/s. Ragini Chokshi & Company, Practicing Company Secretaries as Secretarial Auditor of the Company for the Financial Year 2015-16.

Tax auditors

The Board of Directors on the recommendation of the Audit Committee appointed M/s. Bansi S. Mehta & Co, Chartered Accountants to carry out the Tax Audit for the Assessment Year 2015-16.

Internal auditors:

The Board of Directors on the recommendation of the Audit Committee appointed M/s. Haribhakti & Co. LLP, Chartered Accountants, to carry out the Internal Audit of the Company for the Financial Year 2015-16.

Cost auditors

In accordance with the provisions of Section 148 of the Companies Act, 2013, M/s. V. J. Talati & Co, Cost Accountants, have been appointed by the Board as Cost Auditor of the Company for the Financial Year 2015-16 and a certificate of eligibility under Section 148 of the Companies Act, 2013 has been received.

Disclosures:

audit Committee

The Company has an Audit Committee and details of its constitution, terms of reference are set out in the Corporate Governance Report.

Nomination & remuneration Committee and Policy

The Company has a Nomination & Remuneration Committee and has also adopted Nomination & Remuneration Charter and Remuneration/Compensation Policy. The constitution of the Committee along with the terms of reference to the Committee and are set out in the Corporate Governance Report.

Vigil Mechanism

The Company has established a Vigil Mechanism / Whistle Blower Policy and the directors and employees of the Company can approach the Audit Committee when they suspect or observe unethical practices, malpractices, non-compliances of company policies.

Number of board Meetings

During the year under review, four meetings of the Board of Directors were held on 30th May, 2014, 4th August, 2014, 6th November, 2014 and 9th February, 2015.

energy Conservation, Technology absorption & Foreign exchange earnings and Outgo

The particulars relating to conservation of energy, technology absorption, foreign exchange earnings and outgo, as required to be disclosed under Section 134 (3) of the Companies Act, 2013 are provided in annexure e forming a part of this Report.

extract of the annual return

The extract of the Annual Return in Form No. MGT - 9 forms a part of this report as annexure F.

Particulars of employees

The disclosures in terms of the provisions of Section 197 read with rule 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 forms a part of this report as annexure G.

sexual Harassment of Women at Work Place (Prevention, Prohibition & redressal) act, 2013

The Company has in place, a formal policy on Prohibition, Prevention and Redressal of Sexual Harassment of Women at Workplace. Detailed note is set out in the Corporate Governance report.

There were no cases filed under this act during this financial year.

General

Listing of equity shares

The Company's equity shares are listed on the Bombay Stock Exchange Ltd (BSE). Listing fees have been paid up to 31st March, 2016.

staff relations

Industrial relations at our Factory and Offices remained cordial.

Deposits

The Company has not invited and/or accepted any deposits, during the year.

There are no deposits unpaid or unclaimed as at the end of the year.

There has been no default in repayment of deposits or payment of interest thereon during the year.

Acknowledgement

The Directors wish to thank the Honorable Board of Industrial & Financial Reconstruction (BIFR), the Honorable Appellate Authority for Industrial & Financial Reconstruction (AAIFR), Central Government, Government of Gujarat, Financial Institutions, particularly India Debt Management Pvt. Ltd., Bankers, Shareholders, Employees, Stockiest, Dealers and all other stakeholders associated with its operations for the co-operation and encouragement extended to the company.

On behalf of the Board of Directors

Place : Mumbai M. s. Gilotra Jay Mehta

Dated : 14th May, 2015 Managing Director Executive Vice Chairman

Mar 31, 2014

Dear Members,

The Directors present the 56th Annual Report, Audited Accounts and Auditors Report for the Financial Year ended on the 31st of March, 2014.

FINANCIAL RESULTS

The highlights of the financial results for the Financial year ended 31st of March 2014 are given below.

(In Million Rupees)

Particulars Standalone

Current Previous Financial Year Financial Year 2013-2014 2012-13

Revenue from Operation and Other Income 5359.69 5481.69 (Net of Excise)

Profit before interest, depreciation 628.82 1227.11 and exceptional items.

Finance Cost 163.70 333.83

Profit/(Loss) before depreciation 465.12 893.28

Depreciation & Impairment 258.62 343.96

Profit/(Loss) before exceptional items and 206.50 549.33 Deferred Tax Assets

Exceptional Item Nil 1611.53

Deferred Tax Assets / Tax Expense Nil 320.47

Profit/(Loss) after tax 206.50 1840.39

Brought forward Profit/(Loss) from earlier years (1073.53) (2913.92)

Balance of Profit / (Loss) carried to Balance Sheet (867.03) (1073.53)

(In Million Rupees)

Particulars Consolidated Current Previous Financial Year Financial Year 2013-2014 2012-13

Revenue from Operation and Other Income 5364.57 5506.08 (Net of Excise)

Profit before interest, depreciation 631.58 1224.20 and exceptional items.

Finance Cost 163.70 333.83

Profit/(Loss) before depreciation 467.88 891.37

Depreciation & Impairment 258.84 344.26

Profit/(Loss) before exceptional items and 209.04 546.11 Deferred Tax Assets

Exceptional Item Nil 1611.53

Deferred Tax Assets / Tax Expense 0.06 320.47

Profit/(Loss) after tax 208.98 1837.17

Brought forward Profit/(Loss) from earlier years (1096.02) (2933.19)

Balance of Profit / (Loss) carried to Balance Sheet (887.04) (1096.02)

THE YEAR UNDER REVIEW

The slowdown in the economy resulted in static growth rate for the eight core industries (including cement, steel, fertilizer, oil, gas etc.), which remained at around 3 percent during April, 2013 to March, 2014 similar to the previous year. The cumulative growth rate in cement production is also on lower side at around 3 percent compared to around 6 percent in the previous year.

Cement consumption in Gujarat, our main market declined by 6 percent over the previous year, which is all time low in the last six years. The regular increase in diesel price, amounting to around 16 percent during the year, resulted in higher cost of manufacturing as well as cost of delivery for cement.

The decline in the consumption in our markets and the higher capacities of cement in our region resulted in surplus availability of cement. This factor, coupled with the highly fragmented markets, resulted in lower cement prices during the year. Due to increase in cost of inputs and transportation as well as lower realization from our local markets resulted in substantial drop in profit from ordinary activities. The availability of raw materials and the good industrial environment in the State of Gujarat is likely to result in continued over supply in the State. Energy cost escalations, increased cost of transportation and high incidence of taxes continue to challenge the Industry.

PERFORMANCE REVIEW

Production and Sales

The production of clinker for the year ended March, 2014 was 1.31 million tonnes, which was 106 percent of the rated capacity of the production unit and was also more than clinker production of 1.28 million tonnes for the year ended March, 2013.

The cement production for the year ended March, 2014 was 1.33 million tonnes, which was marginally lower than the cement production of 1.34 million tonnes in the year ended March, 2013. The lower cement production was commensurate with cement sales and in order to compensate the lower cement sales, clinker was sold in the local and export markets and the overall (clinker cement) sales of 1.46 million tonnes which was more than the overall sales of the previous year ended March, 2013.

The lower cement consumption in Gujarat, higher manufacturing cost due to escalations in raw material cost and the higher freight cost resulted in lower profitability.

Exports

The export of cement and clinker for the year ended March, 2014 was 0.35 million tonnes as compared to 0.31 million tonnes in the previous year. Due to large surplus in our domestic markets, the exports continued to be a significant part of our revenues.

DIVIDEND

In view of the carried forward loss, the Directors have not recommended any dividend for the year.

BIFR

Hon''ble BIFR vide order dated 14.3.2013 sanctioned the rehabilitation scheme of the Company and the scheme is under implementation.

PUBLIC DEPOSITS

The Company has not invited and/or accepted any deposits, during the year.

SUBSIDIARY COMPANIES

Section 212 of the Companies Act, 1956, requires the Company to attach the directors'' report, balance sheet, and profit and loss accounts of the subsidiary companies. The Ministry of Corporate Affairs, Government of India vide its circular no.2/2011 dated 8.2.2011 has granted a general exemption from complying with Section 212 (1) of the said Act.

Accordingly, the Annual Report does not contain the financial statements of the subsidiary companies. The financial information of the subsidiary companies as required by the said circular, is disclosed separately in this Annual Report. The statements of Company''s interest in the subsidiaries as at March 31, 2014, prepared in accordance with the provisions of Section 212 of the said Act, are also attached with this Annual Report.

The Company will make available the Annual Accounts of the subsidiary companies to any member on their request and shall also be kept open for inspection by any member at the Registered office of the Company.

CONSOLIDATED FINANCIAL STATEMENT

As required under Clause 32 of the Listing Agreement with the Stock Exchange, the Consolidated Financial Statement has been prepared by the Company in accordance with the requirements of Accounting Standard 21 ''Consolidated Financial Statements'' issued by ''The Institute of Chartered Accountants of India''. The Audited Consolidated Financial Statements together with Auditors'' Report thereon form part of the Annual Report.

DIRECTORS

Reappointment of Directors

In accordance with the provisions of Section 152 of the Companies Act, 2013, Mr. Denys Firth, Mr. Hemang D. Mehta, Mr. Susheel Kak and Mr. Alexander Shaik retire by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for reappointment.

Appointment of Additional Director

In furtherance to the objective of induction of professional and Independent Directors on the Board and also mandated by Companies Act, 2013 and Corporate Governance requirements, Mr. P K. Behl and Mrs. Bhagyam Ramani were appointed as Additional Directors as Independent Directors on the Board of Directors of the Company, who hold office upto the date of the ensuing Annual General Meeting and are eligible for appointment as such.

The Company has received requisite notice(s) from the Member(s) proposing the candidatures of above mentioned Directors for appointment as Directors of the Company.

Appointment of Independent Directors

Pursuant to the provisions of Section 149, 152 read with Schedule IV and all other applicable provisions of the Companies Act, 2013 and the Companies (Appointment and Qualification of Directors) Rules, 2014 (including any statutory modifications or re-enactment thereof for the time being in force) and Clause 49 of the Listing Agreement, the Independent Directors proposed to be appointed are eligible to hold office for 5 (five) consecutive years. Accordingly, Mr. M. N. Rao, Mr. S. V. S. Raghavan, Mr. B. P Deshmukh, Mr. K. N. Bhandari, Mr. Jayant Godbole, Mr. Bimal Thakkar, Mr. P K. Behl and Mrs. Bhagyam Ramani are being appointed as Independent Directors at the ensuing Annual General Meeting.

The Company has received declarations from all the Independent Directors of the Company confirming that they meet with the criteria of independence as prescribed both under Section 149 (6) of the Companies Act, 2013 and under Clause 49 of the Listing Agreement with the Stock Exchanges.

Brief resume of Directors seeking appointment / re-appointment along with other details as stipulated under Clause 49 of the Listing Agreement, are provided in the Notice for convening the Annual General Meeting.

The Directors recommend their re-appointment / appointment.

LISTING OF EQUITY SHARES

The Company''s equity shares are listed on the Bombay Stock Exchange Ltd (BSE). Listing fees have been paid upto 31st March 2015.

AUDITORS

M/s. Bansi S. Mehta & Co., Chartered Accountants, the Statutory Auditors of the Company, who hold office upto the conclusion of the ensuing Annual General Meeting in accordance with the provisions of the Companies Act, 1956 who are eligible for re-appointment are recommended for re-appointment to audit the Accounts of the Company for the Financial Year 2014-15. As required under the provisions of the Companies Act, 2013, the Company has received written confirmation from M/s. Bansi S. Mehta & Co., that their appointment, if made, will be in conformity with the limits specified in the Section 143(1)(g) of the Companies Act, 2013.

TAX AUDIT

The Board of Directors on the recommendation of the Audit Committee appointed M/s. Bansi S. Mehta & Co., Chartered Accountants to carry out the Tax Audit for the Assessment Year 2014-15.

INTERNAL AUDIT

The Board of Directors on the recommendation of the Audit Committee appointed M/s. Haribhakti & Co., Chartered Accountants, to carry out the Internal Audit of the Company for the Financial Year 2014-15.

COST AUDITORS

In pursuance to Order No.52/56/CAB-2010 dated 30th June 2011 issued under Section 233-B of the Companies Act, 1956, M/s. V. J. Talati & Co., Cost Accountants, have been appointed by the Board as Cost Auditor of the Company for the Financial Year 2014-15. Certificate of eligibility under Section 148 of the Companies Act, 2013 has been received.

PARTICULARS OF EMPLOYEES

In terms of the provisions of Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules 1975 as amended, the names and other particulars of the employees are required to be set out in the Annexure to the Directors Report. However, as per the provisions of Section 219(1)(b)(iv) of the said Act, the Annual Report excluding the aforesaid information is being sent to all the Members of the Company. Any Member interested in obtaining such particulars may write to the Company Secretary at the Registered Office of the Company.

STAFF RELATIONS

Industrial relations at our Factory and Offices remained cordial.

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION & FOREIGN EXCHANGE EARNINGS AND OUTGO

As required under Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors'') Rules 1988 the relevant particulars are enclosed in Annexure 1, forming part of the Report.

CORPORATE GOVERNANCE

A separate report on the Compliance with Clause 49 of the Listing Agreement with the Stock Exchanges on Corporate Governance along with a Certificate of Compliance from the Statutory Auditors forms part of this Report.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

The Management Discussion and Analysis on the Operations of the Company is provided in a separate section and forms part of this Report.

DIRECTORS'' RESPONSIBILITY STATEMENT

To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statement in terms of Section 217(2AA) of the Companies Act, 1956:

* The financial statements have been prepared in conformity with generally accepted accounting principles and appropriate accounting standards, judgments and estimates that are reasonable and prudent.

* The accounting policies selected and applied consistently to give a true and fair view of the financial statements.

* The Company has implemented internal controls to provide reasonable assurances of the reliability of its financial records, proper safeguarding and use of its assets and detection of frauds and irregularities. Such controls are based on established policies and procedures and are implemented by trained, skilled and qualified personnel with an appropriate segregation of duties. The Company''s internal auditors conduct regular internal audits, which complement the internal controls.

* The annual accounts have been prepared on a going concern basis.

ACKNOWLEDGEMENT

The Directors wish to thank the Honourable Board of Industrial & Financial Reconstruction (BIFR), the Honourable Appellate Authority for Industrial & Financial Reconstruction (AAIFR), Central Government, Government of Gujarat, Financial Institutions, particularly India Debt Management Pvt. Ltd., Bankers, Shareholders, Employees, Stockists, Dealers and all other stakeholders associated with its operations for the co-operation and encouragement extended to the company.

On behalf of the Board of Directors

Place : Mumbai, M.S.Gilotra Jay Mehta Dated : May 30, 2014 Managing Director Executive Vice Chairman

Mar 31, 2013

Dear Members,

The Directors present the 55th Annual Report, Audited Accounts and Auditors Report for the financial year ended 31st of March, 2013.

FINANCIAL RESULTS

The highlights of the financial results for the Financial year ended 31st of March 2013 are given below.

(In Million Rupees)

Particulars Standalone Consolidated

Current Previous Current Previous Financial Year Financial Year Financial Year Financial Year 2012-2013 2011-12 2012-2013 2011-12

Revenue from Operation and Other Income 5481.69 4438.78 5506.08 4452.53

(Net of Excise)

Profit before interest, depreciation and 1227.11 475.76 1224.20 462.40 exceptional items.

Finance Cost 333.83 446.99 333.83 446.99

Profit/(Loss) before depreciation 893.28 28.77 890.37 15.41

Depreciation & Impairment 343.96 219.64 344.26 220.27

Profit/(Loss) before exceptional items and 549.33 (190.87) 546.11 (204.86)

Deferred Tax Assets Exceptional Item 1611.53 1611.53

Deferred Tax Assets 320.47 320.47

Profit/(Loss) after tax 1840.39 (190.87) 1837.17 (204.86)

Brought forward Profit/( Loss) from earlier years (2913.92)(2723.05) (2933.19) (2728.33)

Balance of Profit / (Loss) carried to Balance (1073.53)(2913.92) (1096.02) (2933.19) Sheet

THE YEAR UNDER REVIEW

The slowdown in the economy resulted in an overall average growth rate of the eight core industries (including cement, steel, fertilizer, oil, gas etc.) during April, 2012 to March, 2013 to 2.6 percent from 5 percent for the same period of previous year. The cement production still grew at 5.6 percent, even though it was lower than the average growth in the previous years.

Cement consumption in Gujarat registered a 5 percent growth over the previous year, which although lower than the average annual growth rate of around 9 percent during the previous five-year period, is better than many other regions of the country. The consumption growth could have been better, but for delayed & deficient monsoons. The State received only 73 percent of the normal average rainfall and the Saurashtra region was the worst affected with rainfall of 57 percent of the normal.

The abnormal increase in the price of diesel, by around 15 percent, had a cascading effect on the manufacturing cost as well as cost of delivery for cement. The increase in rail freights (varying between 11 to 25 percent) also adversely affected the cost of delivering cement to customers. The increase in excise duty by 2 percent was an additional burden on the industry.

The slow economic growth did result in better availability of power and power sale through energy exchange, became less attractive due to the prevailing lower rates, most of the time. Softer coal prices and improved price levels in local markets helped improve profitability.

PERFORMANCE REVIEW

Production and Sales

The production of clinker and cement for the year ended March, 2013 was 1.28 million tonnes and 1.34 million tonnes, as against 1.14 million tonnes and 1.26 million tonnes respectively in the previous year.

The total sale of cement & clinker was 1.48 million tonnes as against 1.34 million tonnes in the previous year. Our higher volume of sale and better realizations contributed to higher profits. Along with the higher volumes, better distribution of cement helped in reduced freight cost, contributing to higher realizations. Improved fuel cost, power consumption, as well as better realizations from exports due to exchange rate variation also positively contributed to profitability.

Exports

The export of cement & clinker for the year ended March, 2013 was 0.31 million tonnes as compared to 0.33 million tonnes in the previous year. However, there was improvement in realizations, due to weakening of Indian Rupee.

DIVIDEND

In view of the carried forward loss, the Directors have not recommended any dividend for the year.

BIFR

The Company is a Sick Industrial Company, pursuant to section 3(1 )(o) of the Sick Industrial Companies (Special Provisions) Act, 1985 (SICA) and is registered with Board for Industrial and Financial Reconstruction (BIFR).

Hon''ble BIFR vide its order dated 14.3.2013 circulated write up on the sanctioned scheme to all concerned. As per the scheme, the company is required to repay all the secured debts of CDR lenders and India Debt Management Pvt Ltd before March 2016. The Company is regular in payment of debts on quarterly basis to all secured lenders.

GOVERNMENT OF GUJARAT

Government of Gujarat granted certain reliefs & concessions applicable to all sick industrial companies located in Gujarat as per the Resolution dated 15.7.2010 which has resulted in remission of entire amount of interest, penal interest and penalty. Principal outstanding as on 31.3.2010 is to be repaid over period of 18 months with simple interest @ 9 percent per annum on outstanding balance. The entire amount of dues has been deposited with a finance corporation of Government of Gujarat as mutually agreed.

NET WORTH

After considering aforesaid reliefs and concessions as well as profit earned during the year, the Company''s net worth has turned positive as on 31.3.2013.

PUBLIC DEPOSITS

The Company has not invited and/or accepted any public deposits, during the year.

SUBSIDIARY COMPANIES

As per Section 212 of the Companies Act, 1956, the Company is required to attach the directors'' report, balance sheet, and statement of profit and loss of the subsidiary companies. The Ministry of Corporate Affairs, Government of India vide its circular no.2/2011 dated 8.2.2011 has granted a general exemption from complying with Section 212 (1) of the said Act.

Accordingly, the Annual Report does not contain the financial statements of the subsidiary companies. The financial information of the subsidiary companies as required by the said circular, is disclosed on page no. 88 of this Annual Report. The statements of Company''s interest in the subsidiaries as at March 31, 2013, prepared in accordance with the provisions of Section 212 of the said Act, are also attached on page no. 89 of this Annual Report.

The Company will make available the Annual Accounts of the subsidiary companies to any member on their request and shall also be kept open for inspection by any member at the Registered office of the Company.

CONSOLIDATED FINANCIAL STATEMENT

As required under Clause 32 of the Listing Agreement with the Stock Exchange, the Consolidated Financial Statements have been prepared by the Company in accordance with the requirements of Accounting Standard 21 ''Consolidated

Financial Statements'' issued by The Institute of Chartered Accountants of India''. The Audited Consolidated Financial Statements together with Auditors'' Report thereon form part of the Annual Report.

DIRECTORS

Mr. K. N. Bhandari, Mr. Susheel Kak, Mr. Hemnabh Khatau and Mr. Alexander Shaik retire by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for reappointment.

Brief resume of the directors proposed to be reappointed, nature of their expertise and names of directorships / membership held in committees of other companies, shareholding and trusteeship is provided in Corporate Governance Report attached to this report.

The directors recommend their re-appointment.

LISTING OF EQUITY SHARES

The Company''s equity shares are listed on the Bombay Stock Exchange Ltd (BSE). Listing fees have been paid upto 31st March 2014.

AUDITORS

M/s. Bansi S. Mehta & Co., Chartered Accountants, the Statutory Auditors of the Company, hold office until the conclusion of the ensuing Annual General Meeting and are eligible for reappointment. The Company has received letter from them that the reappointment, if made, would be within the prescribed limits under Section 224(1) (B) of the Companies Act, 1956.

AUDITORS'' OBSERVATIONS

As regards observations in the annexure to the report, the report is self explanatory and gives factual position which does not require further clarifications.

TAX AUDIT

M/s. Bansi S. Mehta & Co., Chartered Accountants have been appointed to carry out the Tax Audit for the Assessment Year 2013-14.

INTERNAL AUDIT

M/s. BDO Consulting Private Limited, have been appointed to carry out the Internal Audit of the Company for the Financial Year 2013-14.

COST AUDITORS

In pursuance to Order No. 52/26/CAB-2010 dated 30th June 2011 issued under Section 233-B of the Companies Act, 1956, M/s.V.J.Talati & Co., Cost Accountant, have been appointed as Cost Auditors of the Company for the Financial Year 2013- 14. Certificate of eligibility under Section 224 (1B) has been received.

PARTICULARS OF EMPLOYEES

In terms of the provisions of Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules 1975 as amended, the names and other particulars of the employees are required to be set out in the Annexure to the Directors report. However, as per the provisions of Section 219(1 )(b)(iv) of the said Act, the Annual Report excluding the aforesaid information is being sent to all the members of the Company. Members interested in obtaining such particulars may write to the Company Secretary at the Registered Office of the Company.

STAFF RELATIONS

The Company continued to maintain harmonious relations with the staff at all levels.

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION & FOREIGN EXCHANGE EARNINGS AND OUTGO

As required under Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors'') Rules 1988 the relevant particulars are enclosed in Annexure 1, forming part of the Report.

CORPORATE GOVERNANCE

A separate report on the Compliance with Clause 49 of the Listing Agreement with the Stock Exchanges on Corporate Governance and the Auditors'' Certificate on its compliance forms part of this Report.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

The Management Discussion and Analysis Report on the Operations of the Company is provided in a separate section and forms part of this Report.

DIRECTORS'' RESPONSIBILITY STATEMENT

To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statement in terms of Section 217(2AA) of the Companies Act, 1956:

- The financial statements have been prepared in conformity with generally accepted accounting principles and appropriate accounting standards, judgments and estimates that are reasonable and prudent.

- The accounting policies selected and applied consistently to give a true and fair view of the financial statements.

- The Company has implemented internal controls to provide reasonable assurances of the reliability of its financial records, proper safeguarding and use of its assets and detection of frauds and irregularities. Such controls are based on established policies and procedures and are implemented by trained, skilled and qualified personnel with an appropriate segregation of duties. The Company''s internal auditors conduct regular internal audits, which complement the internal controls.

- The annual accounts have been prepared on a going concern basis.

ACKNOWLEDGEMENT

The Directors express their thanks to all the lenders and creditors of the company, particularly India Debt Management Pvt Ltd for co-operation with the Operating Agency, the company and the Hon''ble BIFR to get the rehabilitation scheme sanctioned.

The Directors wish to thank the Honourable Board of Industrial & Financial Reconstruction (BIFR), the Honourable Appellate Authority for Industrial & Financial Reconstruction (AAIFR), Central Government, Government of Gujarat, Financial Institutions, Bankers, Shareholders, Employees, Stockists, Dealers and all other stakeholders associated with its operations for the co-operation and encouragement extended to the company. On behalf of the Board of Directors

Place : Mumbai M. N. Mehta

Dated: May 28, 2013 Chairman

Mar 31, 2012

The Directors present the 54th Annual Report, Audited Accounts and Auditors Report for the financial year ended on the 31st of March, 2012.

FINANCIAL RESULTS

The highlights of the financial results for the Financial year ended 31st of March 2012 are given below.

(In Million Rupees)

Current Previous Financial Year Financial Year 2011-2012 2010-2011 (12 months) (12 months)

Revenue from Operation and Other Income (Net of Excise) 4438.78 3976.14

Profit before interest, depreciation and exceptional items. 475.76 313.96

Finance Cost (446.99) (427.82)

Profit/(Loss) before depreciation 28.77 (113.86)

Depreciation & Impairment 219.64 303.96

Profit/(Loss) before exceptional items and Deferred Tax Assets (190.87) (417.82)

Exceptional Item - (3.12)

Deferred Tax Assets /Provision for Fringe Benefit Tax - (149.62)

Profit/(Loss) after tax (190.87) (570.56)

Brought forward Profit/(Loss) from earlier years (2723.05) (2152.49)

Balance of Profit / (Loss) carried to Balance Sheet (2913.92) (2723.05)

OVERVIEW

The all India cement consumption growth was 7.4 percent from around 208 million tonnes to around 223 million tonnes during the year under review. The total installed capacity at the end of the year under review was around 300 million tonnes; an increase of about 5 percent from the previous year.

During the year under review, the cement consumption in Gujarat was 18.1 million tonnes for the year ended March 2012 compared to 16 million tonnes in the previous year, an increase of 13.4 percent.

In Gujarat, capacity has increased by 2.4 million tonnes in the last two years and in the same period by around 5 million tonnes in Maharashtra and Rajasthan. The total installed capacity in Gujarat at the end of the year under review was around 24.8 million tonnes.

PERFORMANCE REVIEW

Production and Despatches

The production of Clinker and Cement for the year ended March 2012 was 1.14 million tonnes and 1.26 million tonnes as against 1.28 million and 1.16 million tonnes respectively in the previous year. The total sale of Cement and Clinker was 1.26 million tonnes for the year ended March 2012 as compared to 1.37 million tonnes in the previous year.

Exports and Marketing

The Company exported 0.27 million tonnes of Cement and Clinker for the year ended March 2012 as compared to 0.18 million tonnes in the previous year.

DIVIDEND

In view of the loss, the Directors have not recommended any dividend for the year.

BIFR

The Company is a Sick Industrial Company, pursuant to section 3(1)(o) of the Sick Industrial Companies (Special Provisions) Act, 1985 (SICA) and is registered with Board for Industrial and Financial Reconstruction (BIFR).

Based on revival scheme submitted by OA and on further information submitted by the Company, BIFR has formulated a Draft Rehabilitation Scheme (DRS) for the revival of the company and circulated to all concerned.

GOVERNMENT OF GUJARAT

We understand that Company's application pursuant to Government Resolutions dated 15.7.2010 for Reliefs and Concessions and one time settlement has been approved by the High Power Committee of the Government of Gujarat, however, formal sanction is awaited.

PUBLIC DEPOSITS

The Company has not invited and/or accepted any deposits, during the year.

CASH FLOW STATEMENT

Cash flow statement pursuant to Clause 32 of the listing agreement is attached herewith.

SUBSIDIARY COMPANIES

As per Section 212 of the Companies Act, 1956, the Company is required to attach the directors' report, balance sheet, and profit and loss accounts of the subsidiary companies. The Ministry of Corporate Affairs, Government of India vide its circular no.2/2011 dated 8.2.2011 has granted a general exemption from complying with Section 212 (1) of the said Act.

Accordingly, the Annual Report does not contain the financial statements of the subsidiary companies. The financial information of the subsidiary companies as required by the said circular, is disclosed on page no. 85 of this Annual Report. The statements of Company's interest in the subsidiaries as at March 31, 2012, prepared in accordance with the provisions of Section 212 of the said Act, are also attached on page no. 86 of this Annual Report.

The Company will make available the Annual Accounts of the subsidiary companies to any member on their request and shall also be kept open for inspection by any member at the Registered office of the Company.

CONSOLIDATED FINANCIAL STATEMENT

As required under Clause 32 of the Listing Agreement with the Stock Exchange, the Consolidated Financial Statement has been prepared by the Company in accordance with the requirements of Accounting Standard 21 'Consolidated Financial Statements' issued by 'The Institute of Chartered Accountants of India'. The Audited Consolidated Financial Statements together with Auditors' Report thereon form part of the Annual Report.

DIRECTORS

During the year under review, Mr. Susheel Kak was appointed as Nominee Director of India Debt Management Private Limited, w.e.f. 8.11.2011 in place of Mr. Anish Modi who ceased to be Nominee Director w.e.f. 15.9.2011.

Mr. Bimal Thakkar, Mr. Jayant N. Godbole, Mr. B. P Deshmukh and Mr. Hemang D. Mehta retire by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for reappointment.

Brief resume of the directors proposed to be reappointed, nature of their expertise in function of areas and names of directorships / membership held in other companies, shareholding and trusteeship is provided in Corporate Governance Report attached to this report.

The directors recommend their re-appointment.

LISTING OF EQUITY SHARES

The Company's equity shares are listed on the Bombay Stock Exchange Ltd (BSE). Listing fees have been paid upto 31st March 2013.

AUDITORS

M/s. Bansi S. Mehta & Co., Chartered Accountants, the Statutory Auditors of the Company, hold office until the conclusion of the ensuing Annual General Meeting and are eligible for reappointment. The Company has received letter from them that the reappointment, if made, would be within the prescribed limits under Section 224(1)(B) of the Companies Act, 1956.

AUDITORS' OBSERVATIONS

As regards observations in the annexure to the report, the report is self explanatory and gives factual position which does not require further clarifications.

TAX AUDIT

M/s. Bansi S. Mehta & Co., Chartered Accountants have been appointed to carry out the Tax Audit for the Assessment Year 2012-13.

INTERNAL AUDIT

M/s. BDO Consulting Private Limited, have been appointed to carry out the Internal Audit of the Company for the Financial Year 2012-13.

COST AUDITORS

In pursuance to Order No. 52/26/CAB-2010 dated 30th June 2011 issued under Section 233-B of the Companies Act, 1956, your Directors have appointed M/s.VJ.Talati & Co., as Cost Auditors of the Company for the financial year 2012-13. Certificate of eligibility under Section 224 (1B) has been received.

PARTICULARS OF EMPLOYEES

In terms of the provisions of Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules 1975 as amended, the names and other particulars of the employees are required to be set out in the Annexure to the Directors report. However, as per the provisions of Section 219(1)(b)(iv) of the said Act, the Annual Report excluding the aforesaid information is being sent to all the members of the Company. Any member interested in obtaining such particulars may write to the Company Secretary at the Registered Office of the Company.

STAFF RELATIONS

The Company continued to maintain harmonious relations with the staff at all levels.

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION & FOREIGN EXCHANGE EARNINGS AND OUTGO

As required under Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors') Rules 1988 the relevant particulars are enclosed in Annexure 1, forming part of the Report.

CORPORATE GOVERNANCE

A separate report on the Compliance with Clause 49 of the Listing Agreement with the Stock Exchanges on Corporate Governance and the Auditors' Certificate on its compliance forms part of this Report.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

The Management Discussion and Analysis on the Operations of the Company is provided in a separate section and forms part of this Report.

DIRECTORS' RESPONSIBILITY STATEMENT

Your Directors confirm:

- The financial statements have been prepared in conformity with generally accepted accounting principles and appropriate accounting standards judgments and estimates that are reasonable and prudent.

- The accounting policies selected and applied consistently to give a true and fair view of the financial statements.

- The Company has implemented internal controls to provide reasonable assurances of the reliability of its financial records, proper safeguarding and use of its assets and detection of frauds and irregularities. Such controls are based on established policies and procedures and are implemented by trained, skilled and qualified personnel with an appropriate segregation of duties. The Company's internal auditors conduct regular internal audits, which complement the internal controls.

- The Directors have prepared the annual accounts on a going concern basis.

ACKNOWLEDGEMENT

The Directors wish to thank the Honourable Board of Industrial & Financial Reconstruction (BIFR), the Honourable Appellate Authority for Industrial & Financial Reconstruction (AAIFR), Central Government, Government of Gujarat, Financial Institutions, Bankers, Shareholders, Employees, Stockists, Dealers and all other stakeholders associated with its operations for the co- operation and encouragement extended to the company.

On behalf of the Board of Directors.

Place : Mumbai Jay M. Mehta M. S. Gilotra

Dated : May 11, 2012 Executive Vice Chairman Managing Director

Mar 31, 2011

Dear Members,

The Directors present the 53rd Annual Report, Audited Accounts and Auditors Report for the financial year ended on the 31st March, 2011.

FINANCIAL RESULTS

The highlights of the financial results for the Financial year (12 months) ended 31st March 2011, are given below. However, they are not comparable with the previous Financial year ended 31st March 2010, which was for 15 months.

(In Million Rupees)

Particulars Current Previous Financial Year Financial Year

2010-2011 2009-2010

(12 Months) (15 Months)

Sales & Other Receipts 3969.04 5940.45

Profit before interest, depreciation and exceptional items. 304.18 1074.76

Interest 418.04 557.89

Profit/(Loss) before depreciation (113.86) 516.87

Depreciation 303.96 296.58

Profit/(Loss) before exceptional items and deferred tax assets (417.82) 220.29

Exceptional Item (3.12) 68.91

Deferred Tax Assets /Provision for Fringe Benefit Tax (149.62) (88.39)

Profit/(Loss) after tax (570.56) 200.81

Liquidated damages for delayed completion of project - 32.00

Brought forward Profit/(Loss) from earlier years (2152.49) (2440.86)

Amount withdrawn from Revaluation Reserve - 87.56

Transfer to Capital Reserve - (32.00)

Balance of Profit/(Loss) carried forward. (2723.05) (2152.49)

The performance of the company was adversely affected due to the following reasons :

a. Significant drop in exports due to low demand in the Middle-East region.

b. Steep increase in the energy cost (coal and pet-coke).

c. Increase in transportation cost.

d. Increase in excise duty.

e. Significant drop in cement price realization due to low growth in the first nine months and excess capacity.

DIVIDEND

In view of the carried forward losses, the Directors have not recommended any dividend for the year.

INDUSTRY OVERVIEW

The all India cement consumption growth was a modest 4.8 percent from around 198 million tonnes to around 208 million tonnes during the year under review. The total installed capacity at the end of the year under review was around 285 million tonnes; an increase of about 10 percent from the previous year.

During the year under review, the cement consumption in Gujarat was 16 million tonnes for the 12 months ended 31.3.2011, compared to 14.3 million tonnes in the previous year, an increase of 12 percent. The current members of CMA exported 2.53 million tonnes of cement and clinker for the 12 months ended 31.3.2011, compared to 3.23 million tonnes in the earlier year.

In Gujarat, capacity has increased by 2.4 million tonnes in the last two years and in the same period by 8.64 million tonnes in Maharashtra and Rajasthan.The total installed capacity in Gujarat at the end of the year under review was around 22.4 million tonnes.

PERFORMANCE REVIEW

Production and Despatches

The production of Clinker and cement in the twelve months ended 31.3.2011 was 1.28 million tonnes and 1.16 million tonnes as against 1.61 million tonnes and 1.61 million tonnes respectively in the earlier period of 15 months ended 31st March 2010. The total sale of cement and clinker was 1.37 million tonnes as compared to 1.87 million tonnes in the earlier period of 15 months ended 31st March 2010.

Exports and Marketing

The Company exported 0.18 million tonnes of cement and clinker in the twelve months ended 31.3.2011 as compared to 0.44 million tonnes in the earlier period of 15 months ended 31s March 2010. The lower consumption coupled with higher local production resulted in reduced exports to the Middle East. The competition from other neighbouring countries also affected the prices and volumes for export. The situation is likely to continue in the short term. The reduction in the volumes exported resulted in increased availability of cement in Gujarat, resulting in lower prices.

BIFR

The Company is a Sick Industrial Company, pursuant to section 3(1 )(o) of the Sick Industrial Companies (Special Provisions) Act, 1985 (SICA) and is registered with Board for Industrial and Financial Reconstruction (BIFR).

At the last hearing, BIFR had directed the company to submit revised Draft Rehabilitation Proposal and also directed the Government of Gujarat to expedite its decision on the proposal of One Time Settlement filed by the company. IFCI, the lead financial institution and Operating Agency was asked to submit a duly tied up scheme to BIFR, after conducting a joint meeting of persons from whom the company has sought reliefs.

PUBLIC DEPOSITS

The Company has not invited and/or accepted any deposits, during the year.

CASH FLOW STATEMENT

Cash flow statement pursuant to Clause 32 of the listing agreement is attached herewith. Due to lower sales and steep fall in prices, the cash flow of the company was affected adversely resulting in tight liquidity conditions.

SUBSIDIARY COMPANIES

As per Section 212 of the Companies Act, 1956, the Company is required to attach the directors report, balance sheet, and profit and loss accounts of the subsidiary companies. The Ministry of Corporate Affairs, Government of India vide its circular no.2/2011 dated 8.2.2011 has granted a general exemption from complying with Section 212 (1) of the said Act.

Accordingly, the Annual Report does not contain the financial statements of the subsidiary companies. The financial information of the subsidiary companies as required by the said circular, is disclosed on page no. 80 of this Annual Report. The statements of Companys interest in the subsidiaries as at March 31, 2011, prepared in accordance with the provisions of Section 212 of the said Act, are also attached on page no. 81 of this Annual Report.

The Company will make available the Annual Accounts of the subsidiary companies to any member on their request and shall also be kept open for inspection by any member at the Registered office of the Company.

CONSOLIDATED FINANCIAL STATEMENT

As required under Clause 32 of the Listing Agreement with the Stock Exchange, the Consolidated Financial Statement has been prepared by the Company in accordance with the requirements of Accounting Standard 21 Consolidated Financial Statements issued by The Institute of Chartered Accountants of India. The Audited Consolidated Financial Statements together with Auditors Report thereon form part of the Annual Report.

DIRECTORS

During the year under review, Mr. Anil Kaul, was appointed as Special Director by Honble Board for Industrial & Financial Reconstruction (BIFR) w.e.f. 4.2.2011.

Mr. Alexander Shaik, Mr. Denys Firth, Mr. M. N. Mehta, Mr. S.V.S.Raghavan and Mr. M. N. Rao retire by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for reappointment.

Brief resume of the directors proposed to be reappointed, nature of their expertise in function of areas and names of directorships / membership held in other companies, shareholding and trusteeship is provided in Corporate Governance Report attached to this report.

The directors recommend their re-appointment.

LISTING OF EQUITY SHARES

The Companys equity shares are listed on the Bombay Stock Exchange Ltd (BSE). Listing fees have been paid upto 31st March 2012.

AUDITORS

M/s. Bansi S. Mehta & Co., Chartered Accountants, the Statutory Auditors of the Company, hold office until the conclusion of the ensuing Annual General Meeting and are eligible for reappointment. The Company has received letter from them that the reappointment, if made, would be within the prescribed limits under Section 224(1 )(B) of the Companies Act, 1956.

AUDITORS OBSERVATIONS

As regards observations in the annexure to the report, the report is self explanatory and gives factual position which does not require further clarifications.

TAX AUDIT

M/s. Bansi S. Mehta & Co., Chartered Accountants have been appointed to carry out the Tax Audit for the Assessment Year 2011-12.

INTERNAL AUDIT

BDO Consulting Private Limited, have been appointed to carry out the Internal Audit of the Company for the Financial Year 2011-12.

COST AUDITORS

In pursuance to Order No. 52/58/CAB-98 dated 30th October, 1998 issued under Section 233-B of the Companies Act, 1956, your Directors have appointed M/s.V.J.Talati & Co., as Cost Auditors of the Company for the financial year 2011-12. Certificate of eligibility under Section 224 (1B) has been received.

PARTICULARS OF EMPLOYEES

In terms of the provisions of Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules 1975 as amended, the names and other particulars of the employees are required to be set out in the Annexure to the Directors report. However, as per the provisions of Section 219(1)(b)(iv) of the said Act, the Annual Report excluding the aforesaid information is being sent to all the members of the Company. Any member interested in obtaining such particulars may write to the Company Secretary at the Registered Office of the Company.

STAFF RELATIONS

The Company continued to maintain harmonious relations with the staff at all levels.

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION & FOREIGN EXCHANGE EARNINGS AND OUTGO

As required under Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules 1988 the relevant particulars are enclosed in Annexure 1, forming part of the Report.

CORPORATE GOVERNANCE

A separate report on the Compliance with Clause 49 of the Listing Agreement with the Stock Exchanges on Corporate Governance and the Auditors Certificate on its compliance forms part of this Report.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

The Management Discussion and Analysis on the Operations of the Company is provided in a separate section and forms part of this Report.

DIRECTORS RESPONSIBILITY STATEMENT

Your Directors confirm:

- The financial statements have been prepared in conformity with generally accepted accounting principles and appropriate accounting standards, judgments and estimates that are reasonable and prudent.

- The accounting policies selected and applied consistently to give a true and fair view of the financial statements.

- The Company has implemented internal controls to provide reasonable assurances of the reliability of its financial records, proper safeguarding and use of its assets and detection of frauds and irregularities. Such controls are based on established policies and procedures and are implemented by trained, skilled and qualified personnel with an appropriate segregation of duties. The Companys internal auditors conduct regular internal audits, which complement the internal controls.

- The Directors have prepared the annual accounts on a going concern basis.

ACKNOWLEDGEMENT

The Directors wish to thank the Honourable Board of Industrial & Financial Reconstruction (BIFR), the Honourable Appellate Authority for Industrial & Financial Reconstruction (AAIFR), Central Government, Government of Gujarat, Financial Institutions, Bankers, Shareholders, Employees, Stockists, Dealers and all other stakeholders associated with its operations for the co-operation and encouragement extended to the company.

On behalf of the Board of Directors

Jay M. Mehta M. S. Gilotra

Executive Vice Chairman Managing Director

Place : Mumbai

Dated : April 21, 2011

Mar 31, 2010

The Directors present the 52nd Annual Report, Audited Accounts and Auditors Report for the 15 months period ended on the 31st March, 2010.

CHANGE OF FINANCIAL YEAR

The Companys financial year was extended to end on the 31st of March each year instead of the 31st December each year. As a result, the current financial year is for a period of 15 months i.e. 01.01.2009 to 31.03.2010. The Ministry of Corporate Affairs vide its letter dated 10.5.2010 has approved extension of time for holding the Annual General Meetins.

FINANCIAL RESULTS

The highlights of the financial results for the Financial year ended 31 st March, 2010 (15 months) are given below. However, they are not comparable with the previous Financial year ended 31st December, 2008, which was for 18 months.

(In Million Rupees)

Particulars Current Previous

Financial year Financial year

2009-2010 2007-2008

(15 Months) (18 Months)

Sales & Other Receipts 5940.45 7282.06

Profit before interest, depreciation and exceptional items. 1074.76 551.04

Interest 557.89 559.78

Profit/(Loss) before depreciation 516.87 (8.74)

Depreciation 296.58 267.82

Profit/(Loss) before exceptional items and deferred tax assets 220.29 (276.56)

Exceptional Item 68.91 (267.73)

Deferred Tax Assets /Provision for Fringe Benefit Tax (88.39) (62.76)

Profit/(Loss) after tax 200.81 (481.53)

Liquidated damages for delayed completion of project 32.00 -

Brought forward Profit/(Loss) from earlier years (2440.86) (1959.33)

Amount withdrawn from Revaluation Reserve 87.56 -

Transfer to Capital Reserve (32.00) -

Balance of Profit/(Loss) carried forward. (2152.49) (2440.86)

DIVIDEND

In view of the carried forward losses, the Directors have not recommended any dividend for the year.

INDUSTRY OVERVIEW

During the year under review (15 months ended 31st of March, 2010), cement consumption on All India basis is around 247 million tons compared to 251.97 million tons during the earlier year (18 months ended 31 st December, 2008). The installed capacity of the Industry for the current members of CMA has increased by around 31 per cent from 165 million tons in December 2008 to around 216 million tons in March 2010. The total installed capacity in Gujarat has increased by around 17 percent from 19.07 million tons in December 2008 to 22.32 million tons in March 2010.

Cement consumption in Gujarat is 17.8 million tons during the year under review (15 months ended 31st March, 2010) compared to 17.24 million tons during the earlier year (18 months ended of 31st December, 2008). Exports of cement and clinker from Gujarat for the current members of CMA were at 4.47 million tons during the year under review, as against 5.78 million tons during the earlier year (18 months ended 31st December, 2008).

PERFORMANCE REVIEW

Production and Despatches

The production of Clinker for the year under review was 1.61 million tons as against 1.98 million tons in the earlier year of 18 months ended 31st December, 2008. Production of Cement during the year under review was 1.62 million tons as compared to 1.96 million tons in the earlier year of 18 months ended 31 st December, 2008. The total sale of cement and clinker during the year under review was 1.87 million tons as compared to 2.13 million tons in the earlier year of 18 months ended 31st December, 2008.

Exports and Marketing

The Company exported 0.43 million tons of cement and clinker during the year under review as compared to 0.52 million tons in the earlier year of 18 months ended 31st December, 2008. The prevailing recessionary trends in the middle east, restricted the export volumes to Middle East.

CORPORATE DEBT RESTRUCTURING

The Companys debt were restructured under the aegis of Corporate Debt Restructuring Scheme of Reserve Bank of India, which was confirmed by Gujarat High Court u/s 391, 394 of the Companies Act, 1956.

BIFR

The Company is Sick Industrial Company, pursuant to Section 3(1 Xo) of The Sick Industrial Companies (Special Provisions) Act, 1985 (SICA) and is registered with Board for Industrial and Financial Reconstruction (BIFR).

The Company has submitted draft Rehabilitation Scheme envisaging reliefs and concessions from the secured lenders (in line with sanctioned CDR Scheme) and Govt, of Gujarat, which has been circulated by IFCI (Operating Agency) to the secured lenders and BIFR.

The matter is awaiting consideration by BIFR.

PUBLIC DEPOSITS

The Company has not invited and/or accepted any deposits, during the year.

CASH FLOW STATEMENT

Cash flow statement pursuant to Clause 32 of the listing agreement is attached herewith.

SUBSIDIARY COMPANIES

Subsidiary companies have closed its financial year to end on 31st March in line with the holding company. Accordingly, the Balance Sheet, Profit & Loss Account and the Report of the Board of Directors and Auditors as required under Section 212 of the Companies Act, 1956 in respect of subsidiary companies are attached to this Balance Sheet.

CONSOLIDATED FINANCIAL STATEMENT

As required under Clause 32 of the Listing Agreement with the Stock Exchange, the Consolidated Financial Statement has been prepared by the Company in accordance with the requirements of Accounting Standard 21 Consolidated Financial Statements issued by The Institute of Chartered Accountants of India. The Audited Consolidated Financial Statements together with Auditors Report thereon form part of the Annual Report.

DIRECTORS

Mr. Bimal Thakkar was appointed as Additional Director on the Board w.e.f. 29th April, 2009 and holds office upto the date of ensuing Annual General Meeting and is eligible for re-appointment.

Mr. B. P. Deshmukh, Mr. Hemang D. Mehta, Mr. K. N. Bhandari, Mr. Anish Modi and Mr. Hemnabh Khatau retire by rotation at the ensuing Annual General Meeting and being eligible, offers themselves for re-appointment.

Brief resume of the directors proposed to be re-appointed, nature of their expertise and names of directorships/membership held in other companies, shareholding and trusteeship is provided in Corporate Governance Report attached to this report.

The Directors recommend their re-appointment.

LISTING OF EQUITY SHARES

The Companys equity shares are listed on the Bombay Stock Exchange Ltd (BSE). Listing fees have been paid upto 31 st March, 2011. AUDITORS

M/s. Bansi S. Mehta & Co., Chartered Accountants, the Statutory Auditors of the Company, hold office until the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment. The Company has received letter from them that the re- appointment, if made, would be within the prescribed limits under Section 224(1 XB) of the Companies Act, 1956.

AUDITORS OBSERVATIONS

As regards observations in the annexure to the report, the report is self explanatory and gives factual position which does not require further clarifications.

TAX AUDIT

M/s. Bansi S. Mehta & Co., Chartered Accountants have been appointed to carry out the Tax Audit for the Assessment Year 2010-11.

INTERNAL AUDIT

M/s. Pipalia Singhal & Associates, Chartered Accountants, have been appointed to carry out the Internal Audit of the Company for the Financial Year 2010-11.

COST AUDITORS

In pursuance to Order No. 52/58/CAB-98 dated 30th October, 1998 issued under Section 233-B of the Companies Act, 1956, your Directors have appointed M/s.V. J. Talati & Co., as Cost Auditors of the Company for the financial year 2010-11. Certificate of eligibility under Section 224 (1B) has been received.

PARTICULARS OF EMPLOYEES

In terms of the provisions of Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 as amended, the names and other particulars of the employees are required to be set out in the Annexure to the Directors report. However, as per the provisions of Section 219(1 XbXiv) of the said Act, the Annual Report excludins the aforesaid information is beins sent to all the members of the Company. Any member interested in obtaihins such particulars may write to the Company Secretary at the Registered Office of the Company.

STAFF RELATIONS

The Company continued to maintain harmonious relations with the staff at all levels.

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION & FOREIGN EXCHANGE EARNINGS AND OUTGO

As required under Section 217(1Xe) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules 1988 the relevant particulars are enclosed in Annexure 1, forming part of the Report.

CORPORATE GOVERNANCE

A separate report on the Compliance with Clause 49 of the Listing Agreement with the Stock Exchanges on Corporate Governance and the Auditors Certificate on its compliance forms part of this Report.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

The Management Discussion and Analysis on the Operations of the Company is provided in a separate section and forms part of this Report.

DIRECTORS RESPONSIBILITY STATEMENT

Your Directors confirm:

- The financial statements have been prepared in conformity with generally accepted accounting principles and appropriate accounting standards, judgements and estimates that are reasonable and prudent.

- The accounting policies selected and applied consistently to give a true and fair view of the financial statements.

- The Company has implemented internal controls to provide reasonable assurances of the reliability of its financial records, proper safeguarding and use of its assets and detection of frauds and irregularities. Such controls are based on established policies and procedures and are implemented by trained, skilled and qualified personnel with an appropriate segregation of duties. The Companys internal auditors conduct regular internal audits, which complement the internal controls.

- The Directors have prepared the annual accounts on a going concern basis. ACKNOWLEDGEMENT

The Directors wish to thank the Honourable Board of Industrial & Financial Reconstruction (BIFR), the Honourable Appellate Authority for Industrial & Financial Reconstruction (AAIFR), Central Government, Government of Gujarat, Financial Institutions, Bankers, Shareholders, Employees, Stockists, Dealers and all other stakeholders associated with its operations for the co-operation and encouragement extended to the Company.

On behalf of the Board of Directors

Place: Mumbai M. N. MEHTA

Dated: July 30,2010 Chairman

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