Enter the first few characters of Company and click 'Go'

Directors Report of Shree Cements Ltd.

Mar 31, 2023

The Directors take pleasure in presenting their 44^th Report and Audited Financial Statements of the Company for the financial year 2022-23. Management Discussion and Analysis has also been incorporated into this report.

1. FINANCIAL PERFORMANCE

A brief of financial performance for the year gone by and its comparison with previous year is given below: -

(? in Crore)
	Standalone		Consolidated
	2022-23	2021-22	2022-23	2021-22
Revenue from Operations	16,837.49	14,305.88	17,852.33	15,009.56
Other Income	431.51	537.34	459.08	545.89
Total Income	17,269.00	14,843.22	18,311.41	15,555.45
Total Expenditure	13,895.23	10,658.04	14,892.83	11,301.63
Profit Before Interest, Depreciation and Taxes (PBIDT)	3,373.77	4,185.18	3,418.58	4,253.82
Finance Costs	268.93	217.78	262.87	216.12
Depreciation and Amortization expenses	1,546.20	1,036.48	1,660.67	1,145.88
Profit Before Tax	1,558.64	2,930.92	1,495.04	2,891.82
Tax Expense	230.51	554.30	225.90	555.21
Profit After Tax	1,328.13	2,376.62	1,269.14	2,336.61
Profit attributable to Owners of the Company	-	-	1,270.70	2,331.94
Profit attributable to Non-Controlling Interest	-	-	(1.56)	4.67

Key highlights of the year (Standalone

performance):

â¢ Sale volume (cement and clinker) witnessed a healthy increase of 15% from 27.74 million tons in FY 2021 -22 to 31.82 million tons in FY 2022-23. Company''s Eastern and Southern India operations led the increase with significant growth in

YoY sales volumes.

â¢ Net revenue from operations grew by 18% from '' 14,306 Crore in FY 2021-22 to '' 16,837 Crore in FY 2022-23.

â¢ Key cost components: Overall input costs remained high during FY 2022-23 significantly led by fuel cost inflation. Key cost details for FY 202223 were as below:

(a) Raw material cost: There was steep rise observed in Fly Ash and Slag prices during the year which led to overall increase in raw material cost. Resultantly, overall raw material cost increased by 30% from '' 1,002 Crore in FY 2021-22 to '' 1,300 Crore in FY 2022-23.

(b) Power & Fuel: Elevated prices of pet coke and imported coal as a result of geo-political events adversely impacted the entire cement industry. As a result, the power and fuel cost shot up significantly during 2022-23 compared to the previous year.

The impact was mitigated to some extent by enhanced sourcing of domestic linkage coal, higher consumption of alternate fuels and augmentation of fuel supply sources. Company''s focus on energy management practices helped reduce power consumption per ton of cement from 67.15 kWh in FY 2021-22 to 64.93 kWh in FY 2022-23. It also increased its share of green power in total power consumption from 48.3% in FY 202122 to 51.1% in FY 2022-23.

(c) Logistics cost: Company has been able to contain increase in its transportation costs during 2022-23 through route rationalization efforts, digitalization measures and other efficiency improvement initiatives. The Company also stepped up its efforts towards

developing rail connectivity for its cement plants which will augment its bulk transport capacity and help contain transportation cost.

â¢ Overall during FY 2022-23, owing to higher fuel costs, Earnings Before Interest Depreciation and Tax

(EBIDTA) for the FY 2022-23 came down 19% to '' 3,374 Crore from '' 4,185 Crore of previous year 2021-22.

Key Financial Ratios

Key financial ratios showing the financial performance of the Company are as under: -

Particulars	2022-23	2021-22	% Change	Remarks
Operating Profit Margin (without other income) (%)	17.47	25.50	(31.47)%	Increase in Power & Fuel Cost
Net Profit Margin (%)	7.89	16.61	(52.52)%	Increase in Power & Fuel Cost and
Return on Net Worth (%)	7.26	13.76	(47.23)%	Depreciation
Interest Coverage Ratio (Times)	12.55	19.22	(34.72)%	Decrease in EBIDTA & increase in Finance Cost
Debtors Turnover (Times)	28.45	33.58	(15.29)%	Increase in Trade Receivables
Inventory Turnover (Times)	7.35	7.86	(6.58)%	Increase in Inventory
Current Ratio (Times)	1.23	1.69	(26.90)%	Increase in Current Borrowings
Debt-Equity Ratio (Times)	0.09	0.10	(12.56)%	Repayment of Long-Term Debts

2. DIVIDEND AND RESERVES

During the FY 2022-23, the Board of Directors declared Interim Dividends of '' 45/- and '' 55/-per share. The total dividend for FY 2022-23 aggregates to '' 100/- per equity share amounting to '' 360.81 Crore. During the year 2021 -22, the Company had paid dividend of '' 90/- per share (Interim & Final) amounting to '' 324.73 Crore. The Board has not recommended any final dividend for the FY 2022-23.

The Board of Directors do not propose to transfer any amount to the Reserves for the year 2022-23.

The Board of Directors of the Company in line with provisions of Regulation 43A of Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (as amended) had approved Dividend Distribution Policy on 12^th August, 2016. The policy is uploaded on Company''s website and can be accessed at https://www.shreecement.com/investors/policies.

3. MANAGEMENT OUTLOOK OF MACRO ECONOMY AND INDUSTRY

I. Indian Economy-Developments and Outlook

In the face of global headwinds, there is one bright spot - India. By most standards, India sailed through 2022-23 relatively unscathed and has really come out as a clear outperformer. Measured in dollars at current prices, India is now the world''s fifth biggest economy surpassing United Kingdom.

Gross Domestic Product (GDP) as per the Second Advance Estimates for the year 2022-23 is estimated to have grown at 7.0 percent on top of 9.1 percent achieved in 2021-22. Apparently, it may look muted.

Keeping, however, the global uncertainties and high commodity prices in perspective, this is considered commendable. Growth was underpinned by strong investment activity bolstered by the government''s capex push and buoyant private consumption. High GST and direct tax collections have provided the government with necessary ammunition to step up its capital expenditure, cushion the impact of the impending global slowdown and keep the economy buoyant. The credit growth also saw revival as a result of improvements in asset quality of the banks and other financial intermediaries. RBI played a key role in tackling the risks arising because of capital flight and mounting inflation. It took measured increase in the key interest rates to continue growth momentum simultaneous to tackling the inflation.

Going forward, with geopolitical uncertainties continuing unabated, there''s wide consensus among economists that the global economy is on the verge of entering a phase of slowdown. Amid this uncertain environment, with rate hiking cycle almost coming to an end, softening commodity prices, high tax collections and overall buoyancy in domestic demand, India''s GDP growth is expected to remain resilient. It is expected to post a growth of around 6.5 percent in the FY 2023-24. The general election next year and State elections in some of the major States are expected to provide necessary impetus to the economic activities in the current challenging environment.

II. Cement Industry - Development and Outlook

Cement industry continued with its growth momentum this year as well and cement demand estimated to have reached 393-398 Mn Tons level showing a healthy growth of ~11 -12% in FY 2022-23. The solid growth is attributed mainly to the tailwinds observed in demand from infrastructure and rural housing segments.

Demand from infrastructure segment maintained its strong undertone as a result o'' higher government spending across different infra segments. Within infrastructure, demand from roads segment was the highest contributor followed by railways, irrigation and urban infrastructure. In fact, over the years, there has been a steady rise in share of infrastructure in total cement demand. Its share, which was around 11-13% in FY 13 has risen to 26-28% in FY23.

Rural housing segment witnessed improved demand owing to higher rural incomes resulting from better yields and rise in crop prices. Also, there was strong demand observed from "Pradhan Mantri Awas Yojana - Gramin" as well as "Pradhan Mantri Awas Yojana - Urban" which are part of GOI''s "Housing for All by 2022" mission.

In FY 2022-23, housing construction from PMAY-G witnessed construction of around 40 lakh dwelling units while that in PMAY-U witnessed the same at around 16 lakh units.

On the supply side, industry is estimated to have added ~30 MTPA of new cement capacity during FY 2022-23. The overall capacity utilization levels are estimated to be around 68-69% for year 2022-23. As regards, industry margins, the same saw contraction on account of elevated power & fuel costs.

Going forward, in FY 2023-24 the cement demand is expected to maintain its healthy momentum. The demand growth is expected to be majorly led by Government''s thrust on Infra spending and its flagship housing schemes under PM Awas Yojana. Demand is also likely to witness enhanced government spending before the Lok Sabha election in 2024. Infrastructure segment, as a result of ~24% enhanced outlay in budgeted spending of central government on key infra sectors, shall be main demand driver. New projects and capacity expansion plans announced by players in capital intensive sectors such as steel and start of work in PLI led projects & Data Centers, are likely to spur demand from the industrial and commercial segments. Expectation of normal monsoon and muted impact of El Nino along with continuation of healthy prices for farm produce suggests that overall demand in general and rural cement demand in particular should be healthy. Industry margins are also expected to improve because of softening of international coal prices and declining crude oil prices.

All in all, FY 2023-24 is expected to witness continuation of healthy cement demand.

4. NEW/EXPANSION PROJECTS

As part of its aim of enhancing its market share across markets, Company has been continually expanding its capacity. During the year, while it continued its work on setting-up its ongoing projects at Nawalgarh in Rajasthan and at Purulia in West Bengal (through its Wholly-owned subsidiary), it also started work of setting up integrated unit in Guntur district of Andhra Pradesh. Continuing with its proven track record of completing its project ahead of schedule and within budgeted cost, Company has expedited project work and preponed scheduled commissioning of its projects. Status of projects under implementation is as below:

Upcoming unit	Type of Unit	Scheduled Timeline	Revised Timeline
Nawalgarh, Rajasthan	Integrate Cement Unit	Q4 - FY 2023-24	Q3 - FY 2023-24
Purulia, West Bengal (through WOS)	Clinker Grinding Unit	Q4 - FY 2022-23*	Q1 - FY 2023-24
Guntur, Andhra Pradesh	Integrate Cement Unit	Q3 - FY 2024-25	Q2 - FY 2024-25
*Plant commissioning got delayed due to certain clearances.

Also, the Company undertook capacity upgradation work of cement grinding unit in Saraikela Kharsawan district of Jharkhand to enhance its capacity from 2.50 MTPA to 3.00 MTPA and completed the same in April 2023 through process optimization, de-bottlenecking and productivity enhancement initiatives. With

this initiative along with new projects, the capacity of the Company (including Subsidiary) within India shall increase to ~56 MTPA by end of calendar 2024.

5. RISK MANAGEMENT

The actual identification, assessment and mitigation of risks are however done by respective management teams of the company in a systematic manner. The risks are prioritised according to significance and likelihood. Risks having high likelihood and high significance are classified as ''key risk''.

The key risks identified by the Company and their mitigation measures are as under:

Risk title	Risk Description	Impact	Mitigation Strategy
Climate Change	The rising temperature as a result of high GHG emissions is the biggest threat humanity is currently facing. Many countries across the globe are working on reducing these emissions. India has committed to be carbon neutral by 2070. Cement production being regarded as carbon intensive process faces risks of restrictions and penal consequences from regulatory bodies.	While we have taken carbon reduction targets and initiatives, not meeting the targets imposed by regulatory bodies may be a risk for us. This also includes the shifts in climate change related regulations impacting business continuity and the focus of investor community, proxy firms including shareholders over climate change action impacting market capitalization.	â¢ Identifying and implementing energy efficiency projects and initiatives, enhanced usage of renewable energy and waste heat recovery power generation. â¢ Targeting increased usage of AFR. â¢ Collaborating with industries and academic institutions to work on carbon capture, usage and storage (CCUS) and low carbon products. â¢ Defining roles and responsibilities including monitoring framework for achievement of ESG related targets.
Consolidation and Intense Competition	The Indian cement industry has presence of several large players medium and small players. Over the years, supply has outpaced demand in the cement sector. Further, the industry is on a regular expansion mode. This has led to intense competition and affected capacity utilization across the industry.	The continuous expansion and consolidation in the industry might impact our market share. Additionally, lower capacity utilization and margins because of intense competition also poses risk to our profitability.	â¢ Expanding capacity regularly at strategic locations to increase market share. â¢ Reviewing and aligning the market strategy to maintain and improve our market share.
Succession Planning	Succession planning helps organizations identify required talent necessary for sustaining operations and achieving future growth	To maintain business continuity, we need to ensure continued availability of right talent to address the risk of disruption in operational activities due to loss of talent.	â¢ Fostering and creating a culture of assigning responsibility to younger talent to groom as future leaders. â¢ Regular trainings for succession planning. â¢ Cross functional and techno-commercial working experience for employees to develop & enhance business acumen for taking leadership roles. â¢ Strengthening existing practices and building roadmap for identification of critical positions, possible successors, their development plans.

Risk title

Risk Description

Impact

Mitigation Strategy

IT Data Privacy and Cyber Security

The IT systems play an important role in providing support to business processes including sales, logistics and production. Therefore, cyber security forms an integral part of the group wide IT security strategy.

To gain competitive edge, robust and advanced IT systems are essential part of the business. Further, in order to maintain business continuity, it is important to have robust IT systems and prevent data breaches as well as the risk of cyberattacks.

â¢ Periodic review of ERP and key software to meet current and future needs.

â¢ Strengthening the established practices and procedures for IT security and governance across the organisation.

â¢ Regular monitoring and tracking of licensed products, unauthorized software usage, tracking of data leakage, etc. across

the organisation through best-in-class technology and process.

â¢ Assessment of IT infrastructure (e.g. Vulnerability Assessment and Penetration Testing - VAPT) followed by cyber security awareness sessions for employees.

Fuel

Procurement

The cement operations are predominantly dependent upon coal/ petcoke to meet fuel requirement.

Being dependent on conventional source, can hinder the growth and create business continuity risks as well.

Abrupt movements in fuel prices and abrupt changes in its availability due to geopolitical reasons affect our business. Continued usage of conventional fuels pose regulatory risks.

â¢ Designing plants and processes allows us to operate on multi-fuels and give flexibility to choose type of fuel basis the availability and at competitive cost.

â¢ Enhancing share of alternative fuels to replace the usage of coal and petcoke.

â¢ Procuring coal from domestic sources (linkage and captive coal block) to reduce dependency on imported coal.

6. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The internal control systems includes the policies, processes, tasks, behaviors and other aspects of the Company, which when combined, facilitate effective and efficient operation, quality of internal and external reporting, compliance with applicable laws and regulations.

The Company''s objectives, its internal organisation and the environment in which it operates are constantly evolving and as a result, the risks it faces are continuously changing as well. To make its internal controls effective and sound, the Company thoroughly and regularly evaluates the nature and extent of such risks to which the Company is exposed.

The Company has put in place adequate internal control systems commensurate with its size of operations. Company''s internal control systems include policies and procedures, IT systems, delegation of authority, segregation of duties, internal audit and review framework, etc. Company has laid down internal financial controls and systems with regard to adherence to Company''s policies, safeguarding of its assets, prevention and detection of frauds and errors, accuracy and completeness of the accounting records and timely preparation of reliable financial information. The framework is in compliance with the requirements of the Companies Act, 2013. The Company periodically assesses design as-well-as

operational effectiveness of its internal controls across multiple functions and locations through extensive internal audit exercises.

For carrying out internal audit, Company has an experienced in-house team manned by professionals who collectively possess the necessary skills, technical knowledge, objectivity, and understanding of the Company, industries and markets in which it operates, Further, to improve and strengthen processes, finding opportunities for automation and optimizing costs, the Company has appointed different external agencies for conducting internal audit of different geographical locations of the Company. For this purpose, three renowned independent audit firms have been engaged. These audit firms bring in their domain expertise for optimization and improvement of various business processes which can then be replicated throughout the organization.

Based on the assessment and observations of internal audit, process owners undertake corrective action in their respective areas of operations, and thereby strengthen the processes and controls. Significant audit observations and corrective actions thereon are presented to the Audit Committee of the Board on the periodical basis. The Audit Committee evaluates the adequacy and effectiveness of internal financial control systems periodically.

7. HUMAN RESOURCES / INDUSTRIAL RELATIONS

The Business environment is constantly evolving. In order to build a resilient organization that continues to succeed in the new world order, businesses need to build a management system that is flexible and responsive, built around four interrelated trends - more connection, high automation, lower transaction costs and demographic shifts. This requires revisiting the basic tenets of an organization to build models that are creative and adaptable. Models that enable business moves defined by corporate purpose, network of teams instead of hierarchies and where talent is the only differentiator.

To usher in this new evolving world order, Company has undertaken an organization wide transformation powered by smart technology and the three words that defined all its processes including the people processes this year are -Performance, Effectiveness and Optimization.

Key initiatives and achievements for the year are as under:-

Project ARISE: HR Transformation is enabled by smart technology. With the help of a renowned consulting partner and unicorn HR technology platform darwinbox, Company has undertaken HR transformation with objective of reviewing its existing HR processes and policies, benchmarking them with the best in industry and implementing policies most suited to our context. This project is aimed at building an organization that is Agile, Revolutionary, Innovative, Simple and Empowered (ARISE).

India''s Best Workplaces for Building a Culture of Innovation for All: Great Place to Work India released a new category of awards to recognize organizations that have built a culture of innovation, and the Company has been awarded and recognized as the only one in cement and building materials sector in this category.

Among India''s Top 50 Best Places to Work:

During the year, the Company was certified as a Great Place to Work, consequently for the 4^thyear. Apart from this, the Company also featured among India''s Top 50 Best Places to Work for, an upgrade from previous Top 100 league, across all sectors by the "Great Place to Work India". Additionally, it featured among India''s Top 25 employers in the Manufacturing Sector for the 4^thconsecutive year and among the best companies in Cement and Building Materials under Great Place to Work India survey.

Significant Achievement in HR Excellence: The

Confederation of Indian Industries (CII) recognized the Company under category ''Significant

Achievement in HR Excellence'', for the second consecutive year. This recognition is based on a detailed examination of the Company''s policies and practices as per the framework designed by CII followed by an onsite audit by senior members of the industry.

Industrial Relations: Company considers its employees as its biggest asset. We, therefore, always strive to build a healthy relationship with them and resolve issues through dialogue and discussions. As a result, employee relations remained cordial during the year.

Total number of employees as on 31^st March,

2023 were 6,451.

8. OCCUPATIONAL HEALTH AND SAFETY

Following a ''Safety First'' approach, health and safety is a top priority area of the Company. Company has built a robust safety management system based on the globally recognized and practiced OHSAS 18001 standard to institutionalize the organisation-wide focus on Occupational Health and Safety.

Safety Committees'' have been formed at all manufacturing units with equal representation from both management and non-management categories. These committees play a pivotal role in achieving the objective of ''Safety First'' by undertaking assessment of safety issues on an ongoing basis and implementing suitable initiatives and programs for the same. To transform the way workers'' look at safety and make them aware and adopt best practices related to safety, these Committees periodically organise online and offline trainings, mentoring and coaching with the help of internal and external safety experts. This has helped bringing about a consistent positive change to the workers'' safety performance. Such interactions are also helping the plant level safety committees get feedback from workers and thereby identifying hazards and minimise the recurrence of the same. The Company has established a structured hazard identification and risk assessment process which helps it to identify potential risks which could have resulted in production disruptions and liabilities.

To provide its employees and contractual workers access to quality and instant healthcare services, Company has established ''Wellness Management Centres'' (WMC) at all its major plant locations. WMCs are equipped with qualified doctors and facilities which help carry out day to day healthcare services and also conduct annual health check-ups for employees & contract workers. Health talks by experts and specialists are also organised to propagate awareness on chronic and lifestyle diseases.

All safety initiatives and employee engagement programs have been designed to ensure their continuous review and monitoring. Through a regular internal audit protocol, the Company assesses the overall safety performance and examines the existing procedures, systems and control measures for fire & safety hazards. Observations and recommendations are implemented by concerned departments within set timelines. As part of the process, monthly safety performance of all grinding units are reviewed and discussed with all safety professionals for implementation of common safety system and practices.

9. SUSTAINABILITY

The Company has imbibed Sustainability as a core element in its business model. It primarily focuses on conservation of environment, natural resources and energy efficiency. For this purpose, it promotes experimentation and implementation of new ideas for improving efficiencies, optimizing the use of input resources and promote circular economy in the process. Over the past year the role of the cement industry in carbon emissions has received a lot of attention in public discourses. The Government of India is also considering the introduction of setting carbon standards and carbon trading. Our company has taken this into account from an early stage and the details of its work on this issue are given in the key initiatives / developments as mentioned below: -

a) Increasing use of power from green resources: Company continued with its leadership position with regard to use of green power (WHR, wind and solar) in its total power consumption. It substantially enhanced its green power capacity to 385.6 MW in FY 2022-23 from 263.1 MW during FY 2021-22. As a result, Company has been able to increase share of green energy in total energy consumption to 51.1% from 48.3% during the previous year. It is in process to set up additional green power capacity of 83 MW at different locations to further enhance its share of green power for meeting its captive requirement. The Company continues its recognition of having the largest WHR capacity in World Cement Industry excluding China. This apart, in terms of operational efficiency of WHRP, Company is regarded as one of the best in the industry.

b) Energy Conservation: Energy conservation is at the extreme focus of the Company and has seen numerous innovations and initiatives over the years ranging from shop-

floor experiments to large capex. This has yielded multiple benefits including reduction in carbon intensity and rationalization of production costs. More details on initiatives taken in the area of energy conservation are given in Annexure - 3 to this report. Company''s performance in energy conservation is getting exemplified at public forums like "Perform, Achieve & Trade" (PAT) scheme of the Govt. of India wherein the Company overachieved its targets in PAT Cycle I, II and III continuously. The Company was awarded the ''Best Performer'' award for obtaining maximum number of energy saving certificates under PAT Cycle I as well as PAT cycle II by Bureau of Energy Efficiency.

c) Alternative Fuels and Raw Materials:

Company is constantly working on to increase usage of alternative raw materials and fuels in its operations. Company uses wastes of various industries such as Pharma, Chemical, Sponge Iron, fertilizer, thermal power plant and others as alternative raw materials and alternative fuels. Company is also utilizing MSW (Municipal Solid Waste), RDF (Refused Derived Fuel) and Agriculture Crop Residue as alternate fuel to conserve fossil fuel.

These measures have helped the Company to improve its Thermal Substitution Rate to 3.50% in FY 2022-23 from 2.41% in FY 2021-22. Company''s share of alternate raw material consumption in total raw material consumption stood at 27.96% in FY 2022-23.

d) Green products: The Company has been producing blended cement in the category of Portland Pozzolana Cement (PPC), Portland Slag Cement (PSC) and Composite Cement (CC) conforming strictly to the specified

BIS norms. Blended cement contributes to sustainable design by making concrete stronger and durable, reducing consumption of natural resources such as limestone, lowering greenhouse gas emissions, and contributes to a circular economy by utilizing wastes from power, iron and steel plants. Use of blended cement also has cost benefits for Company''s customers. The share of blended cement in total cement production is 76.97% in FY 2022-23. During the year, Company''s blended cement products manufactured at all its locations have been certified under renowned Greenpro certification by Confederation of Indian Industry (CII).

We are also exploring feasibility of another sustainable alternative to OPC i.e., Limestone Calcined Clay Cement (LC3).

e) Carbon reduction: Company has been constantly working upon ways to reduce its carbon emissions. Over the years, measures such as installation of waste heat recovery plants, increased production of blended cement, increased usage of renewable energy, etc. have been taken by the Company in this direction. Its Specific Net Scope 1 emissions (kg CO₂/ton of cementitious material) has come down from 530 during FY 2021-22 to 521 during FY 2022-23. As part of Science based targets (SBTi), the Company has committed to reduce Scope 1 GHG emissions by 12.7% per ton of cementitious materials by 2030 from a 2019 base year and scope 2 GHG emissions by 27.1% per ton of cementitious materials within the same timeframe. The company is progressing well on the path to achieve its GHG emission reduction targets.

f) Water Conservation: Water is a precious natural resource. The Company has been working on two-pronged approach of optimising its water consumption as well as increasing availability of water through water harvesting and recharging. Company''s initiatives in this regard such as installation of Air Cooled Condensers in all its thermal power plants and setting-up Waste Heat Recovery based power plants have been

a great success. Other initiatives include construction of rain water harvesting structures around operating sites and mining area, installation of Sewage Treatment Plants for treating domestic waste water, use of recycled water in operations, online monitoring of ground water level, installation of water sensors & fixtures, etc. which help in reducing water consumption, increase water availability and reduce dependence on ground water. To augment the water supply from natural sources, the company also obtained treated sewage water from municipalities at few of its locations which was then further treated and used for manufacturing and other purposes.

As a result, Company is more than six times water positive.

g) Environment, Social and Governance Reporting: Company released its first Integrated Annual Report in FY 2021-22 including ESG disclosures based on GRI and other relevant guidelines. The Company also published its 18^th annual Corporate Sustainability Report for the reporting period 2021-22, prepared in accordance with the "GRI Standards - Comprehensive Option" assured by an independent certifying agency.

The Company has also issued its Business Responsibility Report as part of Annual Report since year 2012-13 disclosing its performance with respect to various Business Responsibility principles. This apart, it has been consistently participating in various benchmarking and rating exercises such as Dow Jones Sustainability Index, CDP Climate Change and CDP Water Security, etc. to gauge and improve its ESG performance.

10. CORPORATE GOVERNANCE

Your Directors reaffirm their continued commitment to good corporate governance practices. During the year under review, Company was in compliance with the provisions relating to corporate governance as provided under the Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (as amended). The compliance report is provided in the Corporate Governance section of this Annual Report. The Auditor''s Certificate on Corporate Governance is enclosed at Annexure - 1.

11. BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT

In terms of Regulation 34 of Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (as amended) read with relevant SEBI Circulars, Company is also releasing Business Responsibility and Sustainability Report (''BRSR'') as part of this Annual Report covering new reporting requirements on ESG parameters. The BRSR seeks disclosure on the performance of the Company against nine principles of the "National Guidelines on Responsible Business Conduct'' (''NGRBCs'').

As per the SEBI Circulars, effective from the financial year 2022-23, filing of BRSR is mandatory for the top 1000 listed companies by market capitalisation. Accordingly, for the financial year ended 31^st March, 2023, Company is publishing BRSR instead of Business Responsibility Report.

12. CORPORATE SOCIAL RESPONSIBILITY

women empowerment, infrastructure support, integrated rural development, etc. which are aligned to the areas specified under Schedule VII to the Companies Act, 2013. The Annual Report on CSR activities of FY 2022-23 with requisite details in the specified format as required under Companies (Corporate Social Responsibility Policy) Rules, 2014 (as amended) is enclosed at Annexure - 2 and forms part of this report. The CSR Policy of the Company may be accessed on website of the Company at https://www.shreecement.com/ investors/policies.

13. SUBSIDIARY COMPANIES

The Company has following subsidiaries:

S.No.	Name of Subsidiaries	Nature of Interest
1	Shree Global FZE
2	Raipur Handling and Infrastructure Private Limited
3	Shree Cement East Private Limited	Wholly Owned Subsidiaries
4	Shree Cement North Private Limited
5	Shree Cement South Private Limited
6	Shree Enterprises Management Ltd
7	Shree International Holding Ltd	Step-down Subsidiaries
8	Union Cement Company PrJSC	Step-down Subsidiaries
9	U C N Co. Ltd LLC (earlier Union Cement Norcem Co. Ltd. LLC)
10	Shree Cement East Bengal Foundation	Subsidiary Company (Incorporated under section 8 of the Companies Act, 2013)

Audited financial statements of the subsidiaries of the Company are available on the website of the Company. The shareholders, who wish to receive a copy of Annual Accounts of the Subsidiary Companies, may request the Company Secretary for the same. The policy for determining material subsidiaries as approved by the Board can be accessed on the website of the Company at https://www.shreecement.com/investors/policies.

Pursuant to section 129(3) of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014, a statement containing salient features of the financial statements of the subsidiary companies in prescribed Form AOC-1 is given

in the Consolidated Financial Statements of Company and forms part of this Annual Report.

14. CONSOLIDATED FINANCIAL STATEMENTS

The Consolidated Financial Statements of the Company have been prepared as required in terms of provisions of Companies Act, 2013 and Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (as amended) by following the applicable Accounting Standards notified by the Ministry of Corporate Affairs and forms part of this Annual Report.

15. DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to section 134(5) of the Companies Act, 2013, the Board of Directors of the Company, to the best of their knowledge and belief and according to the information and explanations obtained by them, state that:

â¢ In the preparation of the annual accounts for the year ended 31^st March, 2023 the applicable accounting standards have been followed and there are no material departures from the same;

â¢ They have selected such accounting policies, judgments and estimates that are reasonable and prudent and have applied them consistently so as to give a true and fair view of the state of affairs of the Company as at 31^st March, 2023 and of the statement of Profit and Loss as well as Cash Flow of the company for the year ended on that date;

â¢ 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;

â¢ The annual accounts have been prepared on a going concern basis;

â¢ Necessary internal financial controls have been laid down by the Company and the same are commensurate with its size of operations and that they are adequate and were operating effectively; and

â¢ Proper systems have been devised to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

16. PERFORMANCE EVALUATION OF BOARD,ITS COMMITTEES & INDIVIDUAL DIRECTORS

Based on the same, the Board carries out annual evaluation of its own performance, performance of its Committees, Individual Directors including Independent Directors. Company adopted the evaluation parameters as suggested by the Institute of Company Secretaries of India and Securities and Exchange Board of India with suitable changes from Company''s perspective. The performance of the Board is evaluated by the Board on the basis of criteria such as Board composition and structure, effectiveness of Board processes, information flow to Board, functioning of the Board, etc. The performance of Committees is evaluated by the Board on the basis of criteria such as composition of Committees, effectiveness of Committee working, independence, etc. The Board evaluates the performance of individual Director on the basis of criteria such as attendance and contribution of Director at Board/Committee Meetings, adherence to ethical standards and code of conduct of the Company, inter-personal relations with other Directors, meaningful and constructive contribution and inputs in the Board/ Committee meetings, etc.

Company appoints an External Facilitator for the purpose of carrying out the performance evaluation in a fair and transparent manner.

Structured questionnaires are circulated to Board Members for providing feedback on various parameters (as stated above) including on performance of Board / Committees / Directors, engagement levels, independence of judgment and other criteria. This is followed with review and discussions at the level of Board.

In a separate meeting of the Independent Directors, performance evaluation of NonIndependent Directors, the Board as a whole and performance evaluation of Chairman is carried out, taking into account the views of Executive and Non-Executive Directors. The quality, quantity and timeliness of flow of information between the Company Management and the Board which is necessary for the Board to effectively and reasonably perform their duties are also evaluated in the said meeting.

17. DIRECTORS AND KEY MANAGERIAL

PERSONNEL

During the year:-

(i) The Board of Directors of the Company in its meeting held on 21^st May, 2022, on the recommendation of Nomination cum Remuneration Committee appointed Mr. Zubair Ahmed (DIN: 00182990) as an Independent Director of the Company w.e.f. 21^st May, 2022 for a term of 5 (five) years, subject to approval of the members. Approval of Members was obtained at the 43^rd Annual General Meeting held on 28^th July, 2022.

(ii) Mr. Benugopal Bangur (DIN: 00244196) resigned as Chairman and Director of the Company from the close of Business Hours on 14^th October, 2022.

(iii) The Board of Directors of the Company in its meeting held on 14^th October, 2022, on the recommendation of Nomination cum Remuneration Committee, subject to the approval of members:-

(a) appointed Mr. Neeraj Akhoury (DIN: 07419090) as Managing Director of the Company w.e.f. 14^th October, 2022, for a period of 5 (five) years;

(b) changed the designation of Mr. Hari Mohan Bangur (DIN: 00244329) from "Managing Director" to "Chairman" effective from 15^th October, 2022;

(c) changed the designation of Mr. Prashant Bangur (DIN: 00403621) from "Joint Managing Director" to "Vice Chairman" effective from 14^th October, 2022;

Approval of Members for the above was obtained by passing of Resolution(s) through Postal Ballot on 7^th December, 2022.

(iv) Dr. Yoginder K. Alagh (DIN: 00244686) and Mr. Ratan Lal Gaggar (DIN: 00066068) resigned from the position of the Independent Directors of the Company effective from the close of Business Hours on 10^th August, 2022 & 15^th December, 2022 respectively, due to their personal reasons. Further, at the time of resignation, they had confirmed that there were no material reasons for their decision to resign.

(v) Mr. Prakash Narayan Chhangani (DIN: 08189579), Whole Time Director of the Company resigned as Director of the Company from the close of Business Hours on 13^th February, 2023.

In accordance with section 149(7) of the

Companies Act, 2013 and Regulation 25(8) of the

Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (as amended), each Independent Director has given a declaration to the Company confirming that he/she meets the criteria of independence as specified under section 149(6) of the Companies Act, 2013 and Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (as amended). They have also confirmed the compliance of Rule 6 of the Companies (Appointment and Qualification of Directors) Rule, 2014 regarding inclusion of their names in the data bank of Indian Institute of Corporate Affairs (IICA).

The Board is of the opinion that the Independent Directors of the Company including those appointed during the year, possess requisite qualifications, expertise and experience and they hold highest standards of integrity.

In accordance with the provisions of the Companies Act, 2013 and Articles of Association of the Company, Mr. Hari Mohan Bangur (DIN: 00244329), Director [''Chairman'' of the Company (in whole time capacity)] of the Company will retire by rotation in the ensuing Annual General Meeting (AGM) and being eligible, offers himself for re-appointment. The Board recommends the re-appointment of Mr. Hari Mohan Bangur. His re-appointment at the 44^th AGM as a director retiring by rotation would not constitute break in his tenure of appointment.

18. FAMILIARIZATION PROGRAMME FOR INDEPENDENT DIRECTORS

In order to acquaint the new directors with the Company, a detailed presentation is given to them at the time of their appointment which covers their role, duties and responsibilities, Company''s strategy, business model, operations, markets, organizational structure, products, etc. A detailed presentation along similar lines is sent to existing Independent Directors every year to keep them apprised of the above details.

As part of Board discussions, presentation on performance of the Company is shared with the Board during its meeting(s). Plant visits are also arranged for Independent Directors from time-to time for better understanding of the Company''s operations. The details of such familiarisation programmes for Independent Directors are posted on the website of the Company and can be accessed at link https://www.shreecement.com/ investors/disclosure-regulation.

19. PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES

Disclosures 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 provided at Annexure - 4.

In terms of the provisions of section 197(12) of the Companies Act, 2013 read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel)

Rules, 2014, a statement showing the names of employees and other particulars of the top ten employees and employees drawing remuneration in excess of the limits as provided in the said rules are set out in the Board''s Report as an addendum thereto. However, in terms of provisions of the first proviso to section 136(1) of the Companies Act, 2013, the Annual Report is being sent to the members of the Company excluding the aforesaid information. The said information is available for inspection at the Registered Office of the Company during such working hours as are provided under the Articles of Association of the Company and any member interested in obtaining such information may write to the Company Secretary and the same will be furnished on request.

20. AUDITORS

I. Statutory Auditors

M/s. B R Maheswari & Co LLP, Chartered Accountants (Firm''s Registration No.

001035N/N500050) were appointed as Statutory Auditors of the Company, in the Annual General Meeting held on 28^th July, 2022, for a consecutive term of five years from the conclusion of 43^rd Annual General Meeting till the Conclusion of 48^th Annual General Meeting. They have given their report on the Annual Financial Statements for Financial Year 2022-23.

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

II. Secretarial Auditors

The Board had appointed M/s. Pinchaa & Co., Company Secretaries as Secretarial Auditor of the Company to conduct Secretarial Audit for the Financial Year 2022-23. They have submitted their report in prescribed format and the same is enclosed at Annexure -5. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.

III. Cost Auditors

The Cost Auditors are in process of conducting the audit of cost records for year 2022-23 and shall submit their report in due course.

In terms of the provisions of section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Amendment Rules, 2014, the Board of Directors of the Company have appointed M/s. K. G. Goyal & Associates, Cost Accountants, Jaipur (Firm Registration No. 000024) to conduct the cost audit for the financial year ending 31^st March, 2024 at a remuneration as stated in the Notice convening the 44^th Annual General Meeting of the members. As required under the Companies Act, 2013, the remuneration payable to cost auditors has to be placed before the Members at the general meeting for ratification. Hence, a resolution seeking ratification of remuneration by the Members, payable to the Cost Auditors, forms part of the Notice of the ensuing 44^th AGM.

21. OTHER DISCLOSURES

(a) Composition of Audit Committee: The

Audit Committee comprises of Mr. Shreekant Somany as Chairman, Mr. Nitin Desai,

Mr. Sanjiv Krishnaji Shelgikar and Mr. Zubair Ahmed as other Members. More details are given in the Corporate Governance Report.

All the recommendations made by the Audit Committee were accepted by the Board.

(b) Details of Meetings of Board and its Committees: The Board of Directors of your Company met 4 times during the year to deliberate on various matters. The meetings were held on 21^st May, 2022,

28^th July, 2022, 14^th October, 2022 and 8^thFebruary, 2023. Further details are available in the Corporate Governance Report forming part of this Annual Report. The intervening gap between the meetings was within the period prescribed under the Companies Act, 2013 and the Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations,

2015 (as amended).

12 of the Companies (Management and Administration) Rules, 2014, the Annual Return of the Company is available on the website of the Company at link https:// www.shreecement.com/investors/ shareholder-information.

(d) Particulars of Loans, Guarantees or Investments: Details of Loans, Guarantees and Investments covered under the provisions of section 186 of the Act read with the Companies (Meetings of Board and its Powers) Rules, 2014 are given in Notes to the standalone financial statements.

(e) Related Party Transactions: All Related Party Transactions during the financial year 2022-23 were on arm''s length basis and in ordinary course of business. They were all in compliance with the applicable provisions of the Companies Act, 2013 and the Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (as amended). All such transactions are placed before the Audit Committee for review/approval. The necessary omnibus approvals have been obtained from Audit Committee wherever required. There

were no material Related Party Contracts/ Arrangements/Transactions made by the Company during the year 2022-23 that would have required Shareholders'' approval under provisions of section 188 of the Companies Act, 2013 or of the Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (as amended). The Company has adopted a Related Party Transactions Policy duly approved by the Board, which is uploaded on the Company''s website & may be accessed at https://www.shreecement.com/ investors/policies.

Further, in terms of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) (Amendment) Regulations, 2018, the transactions with person/entity belonging to the promoter/ promoter group holding 10% or more shareholding in the Company are as under:

Name of the	% Holding in the Company	Amount	Nature of
Entity	% Holding in the Company	('' in Crore)	Transaction
Shree Capital Services Ltd.	24.90%	0.50	Payment of Office Rent

(f) Deposits from Public: The Company has not accepted any deposits from public covered under Chapter V of the Companies Act, 2013 during the year and as such, no amount on account of principal or interest on deposits from public was outstanding.

(g) Managing the Risk of Fraud, Corruption and Unethical Business Practices

Vigil Mechanism/Whistle Blower Policy:

The Company has adopted a whistle blower policy and established the necessary vigil mechanism for employees and Directors to report concerns about unethical behaviour. The policy provides for adequate safeguards against victimization of employees who avail of the mechanism and also provides for direct access to the Chairman of the Audit Committee. The whistle blower policy may be accessed on the website of the Company at https://www.shreecement.com/ investors/policies.

Code of Conduct: Company believes in the principle of trust which can be derived through ethical practices, transparency and accountability to stakeholders. Keeping the same into account, Company has in place a "Code of Conduct". Every director and employee is required to adhere to the same. The details of the code of conduct can be accessed on the website of the Company at https://www.shreecement.com/ investors/policies.

Anti-Bribery and Anti-Corruption Policy:

To conduct the business in an ethical, honest and transparent manner, the Board of Directors of the Company has adopted Anti- bribery and Anti-Corruption Policy. Company has zero tolerance approach toward bribery and corruption. The Policy applies to all the directors and employees of the Company and its subsidiaries including third parties who are working on behalf of Company/its subsidiaries. The details of the policy can be accessed on the website of the Company at https://www.shreecement.com/ investors/policies.

(h) Remuneration Policy: Company firmly believes in nurturing a people friendly environment which is geared to drive the organisation towards high and sustainable growth. Each and every personnel working with Company strives to achieve the Company''s vision of being the best in

the industry. Its remuneration policy is therefore designed to achieve this vision.

Remuneration Committee shall consider the level and composition of remuneration which is reasonable and sufficient to attract, retain and motivate the Directors for delivering high performance. The Remuneration Policy can be accessed on the website of the Company at https://www.shreecement.com/ investors/policies.

(i) Policy on Prevention, Prohibition and Redressal of Sexual Harassment at Workplace: The Company has complied with the provisions of the constitution of the ''Internal Committee'' as per the requirement of The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 ("POSH Act"), Company is having "Prohibition of Sexual Harassment Policy" which provides the mechanism to redress complaints reported under the said Act. As provided by the POSH Act, Company has formed Internal Complaints Committees (ICC) at all work places to cover all Units,

Sales offices, Regional office and Corporate offices. The Internal Committee (IC) comprises of internal members and external member who has an extensive experience

in the field. Company has not received any complaint of sexual harassment during the financial year 2022-23.

(j) Material Changes after the Close of Financial Year: There have been no material changes and commitments which have occurred after the close of the year till the date of this report, affecting the financial position of the Company.

(k) Significant and Material Orders passed by the Regulators or Courts: No significant material orders have been passed by the Regulators or Courts or Tribunals which would impact the going concern status of the Company and its future operations.

(l) Maintenance of Cost Records: Company is required to maintain cost records as specified by the Central Government under section 148(1) of the Companies Act, 2013. Accordingly, such accounts and records are made and maintained by the Company.

(m) Compliance with Secretarial Standards:

Company has complied with the Secretarial Standards issued by Institute of Companies Secretaries of India (ICSI) on Board Meetings (SS- 1) and General Meetings (SS-2).

(n) Adoption of new set of Articles of Association : During the year 2022-23 company has adopted new set of Articles of

Association of the Company in substitution, and to the entire exclusion of the Articles contained in the existing Articles of Association of the Company, to make it consistent and align it with the provisions of the Companies Act, 2013 and the Rules made thereunder.

(o) Alteration in the Object Clause of the Company : The Board of Directors of the Company through circular resolution passed on 4^th March, 2023, approved alteration of Clause Ill. (A) of the Objects Clause of the Memorandum of Association of the Company by inserting clause 2 & 3 for covering the mining of coal and other minerals/ materials and commercial activities related thereto that are not specifically covered under the Main Objects. Approval of Members was obtained by passing of Resolution through postal ballot on 9^th April, 2023.

(p) Cyberattacks and Cybercrime : On 28^thMarch, 2023, Company had detected an incident of breach of its IT security on its IT assets. Company''s IT team with the help of team of external consultants immediately took all the necessary measures to prevent damage to the IT systems of the Company.

The Company''s production facilities were not affected by the incident. However, the dispatches faced some difficulty, which were normalized in a day''s time. All the critical data have since been recovered and restored. Company has taken all necessary initiative to further strengthen its measures to deal with risks arising out of cyber security related incidents.

22. ACKNOWLEDGEMENT

The Directors take this opportunity to express their deep sense of gratitude to its Central and State Governments and local authorities for their continued co-operation and support. They also would like to place on record their sincere appreciation for the commitment, hard work and high engagement level of every member of the Shree family without which the exemplary performance of the Company year after year, would not have been possible. The Directors would also like to thank various stakeholders of the Company including customers, dealers, suppliers, lenders, transporters, advisors, local community, etc. for their continued committed engagement with the Company. The Directors would also like to thank the Members of the Company for confidence and trust reposed in them.

Mar 31, 2022

The Directors take pleasure in presenting their 43^rd Report and Audited Financial Statements of the Company for the financial year 2021 -22. Management Discussion and Analysis has also been incorporated into this report.

1. FINANCIAL PERFORMANCE

A brief of financial performance for the year gone by and its comparison with previous year is given below:-

(? in Crore)
	Standalone		Consolidated
	2021-22	2020-21	2021-22	2020-21
Revenue from Operations	14,305.88	12,668.87	15,009.56	13,559.77
Other Income	537.34	432.89	545.89	438.26
Total Income	14,843.22	13,101.76	15,555.45	13,998.03
Total Expenditure	10,658.04	8,689.04	11,301.63	9,480.32
Profit Before Interest, Depreciation and Taxes (PBIDT)	4,185.18	4,412.72	4,253.82	4,517.71
Finance Costs	217.78	247.10	216.12	251.29
Depreciation and Amortization expenses	1,036.48	1,139.90	1,145.88	1,262.34
Profit Before Tax	2,930.92	3,025.72	2,891.82	3,004.08
Tax Expense	554.30	713.79	555.21	714.49
Profit After Tax	2,376.62	2,311.93	2,336.61	2,289.59
Profit attributable to Owners of the Company	-	-	2,331.94	2,285.87
Profit attributable to Non-Controlling Interest	-	-	4.67	3.72

Key highlights of the year (Standalone

performance)-

â¢ Sale volume (cement and clinker) witnessed an increase of 3% in 2021-22 from 26.84 million tons of previous year to 27.74 million tons during 2021-22. A notable improvement was seen in sales volume from Kodla unit in Southern India which went up significantly from 2.26 million tons to 2.69 million tons.

â¢ Net revenue from operations grew by 13% from '' 12,669 Crore to '' 14,306 Crore mainly due to increase in sales volumes.

â¢ Key Cost components- Company faced input cost pressure due to spiraling inflation as a result of rising coal, diesel and other input costs. Key details for 2021-22 were as below:

(a) Raw material- Rising diesel prices led to increased mining cost despite continued optimization drive in our limestone mining operations. All major inputs including fly-ash witnessed increase compared to previous year. Resultantly, overall raw material cost increased by 20% from '' 834 Crore in FY 2020-21 to '' 1,002 Crore in FY 2021-22.

(b) R ower & Fuel- Global commodity crisis and supply disruption resulted in high cost of fuel and power for the Company. Company''s cost optimization measures continued to help Company contain the impact. Its focus on energy management practices helped reduce power consumption per ton of cement from 68.65 kWh/ ton of year 2020-21 to 67.15 kWh/ ton of in year 2021-22. Company also increased share of green power in total energy consumption. Overall power and fuel cost shot up by 52% compared from '' 2,082 Crore in previous year to '' 3,161 Crore in

FY 2021-22.

(c) R ogistics Cost- Logistics and transportation costs witnessed increase of 7% from '' 3,037 Crore in FY 2020-21 to '' 3,241 Crore in

FY 2021 -22. Company continues to work on efficiency improvement initiatives, routes rationalization and raising use of technological tools in supply management, etc. to keep the logistics cost under check. One notable development was the work on building rail connectivity for some of its cement plants which will help enhance movement of materials through Railways and help contain the transportation cost.

â¢ Overall the year witnessed continued input price rise leading to higher cost of production and freight. Resultantly, Profit Before Interest Depreciation and Tax (PBIDT) for the year 2021-22 came down by 5% to '' 4,185 Crore compared to '' 4,413 Crore of previous year 2020-21.

Key Financial Ratios

Key financial ratios showing the financial performance of the Company are as under: -

Particulars	2021-22	2020-21*	% Change	Remarks
Operating Profit Margin (without other income) (%)	25.50	31.41	-18.83%	Decreased mainly due to increase in power and fuel cost
Net Profit Margin (%)	16.61	18.25	-8.97%
Return on Net Worth (%)	13.76	15.16	-9.23%
Interest Coverage Ratio (Times)	19.22	17.86	7.61%	Improved due to reduction in finance cost
Debtors Turnover (Times)	33.58	24.66	36.14%	Improved due to increase in revenue from operations & decrease in trade receivables
Inventory Turnover (Times)	7.86	8.72	-9.84%	Reduced due to increase in inventory
Current Ratio (Times)	1.69	1.69	-	No change
Debt-Equity Ratio (Times)	0.10	0.11	-9.20%	No significant change

* Ratios updated wherever necessary due to re-grouping/ re-classification of underlying financial numbers

2. DIVIDEND AND RESERVES

T he Board of Directors have recommended a final dividend of '' 45/- per equity share amounting to '' 162.36 Crore for the year 2021 -22 for approval of the members at the 43^rd Annual General Meeting of the Company. The total dividend for 202122 aggregates to '' 90/- per equity share which includes interim dividend of '' 45/- per equity share paid for the year 2021-22. During the year 2020-21, Company had paid dividend of '' 60/- per share amounting to '' 216.48 Crore for the year 2020-21.

T he Board of Directors of the Company in line with provisions of Regulation 43A of Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (as amended) had approved Dividend Distribution Policy on 12^th August, 2016. The policy is uploaded on Company''s website and can be accessed at the link https://www.shreecement.com/uploads/ cleanupload/dividend-distribution-policy.pdf.

3. MANAGEMENT OUTLOOK OF MACRO ECONOMY AND INDUSTRY

I. I ndian Economy-Developments and Outlook

The biggest question as regards economic growth in 2021-22 is concerned was whether India''s GDP would regain pre-pandemic levels. Based on advance estimates, GDP data for 2021 -22 suggests that it has. With an expected growth rate of 8.9% in 2021-22, India''s GDP is likely to be 1.8% more than what it was in 2019-20. The swift recovery, after the pandemic induced contraction, is mainly due to the rapid vaccination coverage as well as accommodative monetary and fiscal policy support. Government''s policy

thrust on quickening virtuous cycle of growth via capex and infrastructure spending has increased capital formation in the economy lifting the investment to GDP ratio (GFCF) at around 28.3 percent in 2021-22 (based on Second Advance Estimates) from 26.6 percent in 2020-21 (based on Final Revised Estimates). The private investment is also on the path of recovery.

T urrently, because of government''s thrust on capital expenditure and improved corporate sector''s financial health, economy stands on strong growth momentum. Strong GST collection is a testimony to the strong macro-economic fundamentals of the Indian economy. Continued support by RBI by way of accommodative policy stance is also helping the economy. Rising number of private investment projects under implementation in manufacturing sector and increasing mobilization of risk capital bode well for acceleration in private investment. A sturdy and cleaned-up banking sector stands ready to support private investment adequately. Expected increase in private consumption levels will propel capacity utilization, thereby fueling private investment activity. There are thus signals indicating that India is poised for stronger investment.

I f regaining pre-pandemic levels was the biggest challenge for 2021-22, the major challenge in 2022-23 is going to be to return to a high growth trajectory. There is greater uncertainty on this question led by elevated international commodity prices, increasing inflation, tight monetary policies, ongoing geopolitical crisis between Russia and

Ukraine and continuing global supply-side disruptions.

Over the past few years, Government has undertaken several structural reforms aimed at fulfilling the vision of Atmanirbhar Bharat and speeding up infrastructure development. The Production Linked Incentive (PLI) scheme launched in 2020 with an intent to give boost to the domestic manufacturing is attracting large investment. PLI Scheme covering 14 sectors is likely to result in manufacturing of $500 billion worth goods in the next five years. During 2021 -22, Government has initiated Gatishakti - a National Master Plan for Multi-modal Connectivity that will accelerate development of seamless multimodal transport network and reduce the infrastructure gap. The Government is taking many more such steps to continue the growth momentum going. The initial estimates of real economy growth of year 2022-23 are projected at around 7.5 percent to 8 percent. There are challenges however in terms of heightened fears of inflation, emergence of another COVID wave and rising geo-political tensions. RBI''s stand on macro trends after Ukraine crisis has been instructive with focus being on gradual withdrawal of accommodation to control the inflation while supporting growth. All in all, while the Indian economy''s fundamentals appear capable of weathering the above challenges, Government and RBI will need to do continuous monitoring of external developments and take actions accordingly. Considering this, the overall outlook remains cautiously positive.

II. Cement Industry - Development and Outlook

On the back of a lower base, the cement production is estimated to have clocked a solid growth of around 20% during FY22 over FY21. With production volumes of around 345-350 million tons, the industry is expected to have surpassed pre-COVID levels by around 6%.

The solid growth during FY22 is largely because of rising government spending on infrastructure, continuation of strong demand from real estate sector and rural and affordable housing segment. Higher fiscal deficit of 6.9% during FY22 provided the

Government with extra cushion for spending on infrastructure and development thereby creating demand for other sectors such as cement. The continuation of accommodative monetary policy by RBI ensured easy credit terms for housing finance, which in turn generated continued strong demand from housing segment. On the back of good monsoon and remunerative MSP/ market prices, the rural incomes have seen upward movement resulting in higher spending on housing. With continued focus of the Government on affordable housing, both urban and rural affordable housing schemes have witnessed higher allocation and spending. All in all, FY 2022 has been a good year as far as demand is concerned. Industry has however faced the challenge of high input costs because of inflationary pressures. The coal prices have jumped significantly due to pandemic induced supply side disruptions as well as Ukrain-Russia conflict which has increased the cost of power and fuel significantly. High crude oil prices and general inflation has increased the cost of transportation and other input costs. Overall, the inflationary pressures have significantly increased costs and impacted the margins.

Going forward, the demand conditions are expected to be strong. The factors such as higher fiscal space with Government for capital and infrastructure spending, rising rural incomes and continuation of Government''s flagship scheme of affordable housing will drive cement demand. RBI is considering to gradually withdraw its accommodative stance which is likely to make housing finance dearer. This, however, is unlikely to hit housing demand in the near term. The outlook for cement demand is considered positive.

4. NEW/EXPANSION PROJECTS

â¢ Projects completed during the year- During the year 2021-22, commercial operation of Clinker Grinding Unit having capacity of 3.0 Million Ton Per Annum (MTPA) at Patas in Pune District of Maharashtra and Clinkerisation Unit (Kiln-3) having capacity of 12,000 Tons Per Day (4.0 MTPA) at Baloda Bazar, near Raipur in Chhattisgarh, has been started.

â¢ New Projects undertaken during the year- During the year, the Company has started work on the following projects: -
Integrated Cement Plant(s)	At Gothra in Nawalgarh Tehsil of Rajasthan having Clinker Capacity of 3.80 MTPA and Cement Capacity of upto 3.50 MTPA. The project is scheduled to be completed by Quarter ending March, 2024.
Solar Power Plants	At different locations aggregating to 106 MWp to meet captive power requirement of cement plants of the Company. The same are expected to be completed by Quarter ending September, 2022.

â¢ New Projects undertaken by wholly owned subsidiary during the year- Company''s wholly owned subsidiary, Shree Cement East Pvt. Ltd. has started work on setting up of clinker grinding unit at Village Digha & Parbatpur, in Purulia District of West Bengal having capacity of 3.0 MTPA. The project is likely to be completed by Quarter ending June, 2023.

5. RISK MANAGEMENT

Company''s risk management process is designed to identify and mitigate risks that have the potential to materially impact its business objectives and maintains a balance between managing risk and making most of the opportunities. The Board is responsible for overseeing the overall risk management framework of the Company. The Risk Management Committee of Board, keeps an eye on execution of the risk management plan of the Company and advises the management on strengthening mitigating measures wherever required. The actual identification, assessment and mitigation of risks are however done by key executives of the Company in consultation with professional firm in a systematic manner. The risks are prioritised according to significance and likelihood. Risks having high likelihood and high significance are classified as ''key risk''.

C he details of the Key Risks identified by the Company and its mitigation measures are given in ''Risks and the Mitigation Strategies'' section of this Annual Report at page no. 20.

6. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

Company has put in place adequate internal control systems commensurate with its size of operations. Company''s internal control systems include policies and procedures, IT systems, delegation of authority, segregation of duties, internal audit and review framework, etc. Company has laid down internal financial controls and systems with regard to adherence to Company''s policies, safeguarding of its assets, prevention and detection of frauds and errors, accuracy and completeness of the accounting

records and timely preparation of reliable financial information. The framework is in compliance with the requirements of the Companies Act, 2013. The Company periodically assesses design as-well-as operational effectiveness of its internal controls across multiple functions and locations through extensive internal audit exercises. For carrying out internal audit, Company has an experienced in-house team manned by professionals. Based on the assessment and observations of internal audit, process owners undertake corrective action in their respective areas of operations, and thereby strengthen the processes and controls. Significant audit observations and corrective actions thereon are presented to the Audit Committee of the Board on periodical basis. The Audit Committee evaluates the adequacy and effectiveness of internal financial control systems periodically.

F urther, during the year, to improve and strengthen processes, finding opportunities for automation and optimizing costs, the Company has appointed different external agencies for conducting internal audit of different geographical locations of the Company. For this purpose, three renowned audit firms have been engaged viz. a viz. one audit firm earlier.

7. HUMAN RESOURCES / INDUSTRIAL RELATIONS

Over last two years, we have seen the world order getting reinvented in a zillion ways. And along with it, changes have happened the way we work. As new practices figured out, it''s proven that people are the only competitive advantage that differentiate a company and its culture, the one that is most difficult to replicate, the advantage that walks out of the door every single day.

Ot SCL, people have been at the core of our business since our founding years. One of the few organizations that has Care and Happiness for all stakeholders as its guiding philosophy. The values that have become especially significant in these past years, the years that witnessed high turnover all over. Creating Happiness for all our stakeholders is the ''WHY'' that our organization

has been founded on, this drives the ''WHAT''

- what needs to be done to create happiness, followed by the ''HOW'' - how do we do this. Purpose that drives the practice which defines the process. Few highlights for the last year were viz. a viz. one audit firm earlier.

a) A step ahead toward a Learning Organisation- As an extension of School of Training Education and Personal Success (''STEPS''), the Company launched a unified portal https://www.shreesteps.com/ of its own, that aggregates all its initiatives towards building a learning organization. This was combined with native apps such as edcast for Android and iOS platforms to enable Anytime-Anywhere learning. The Company also introduced byte sized learning content to enable learning in the pace of work.

b) Simplified joining experience- Recruitz, an app and online portal was launched to introduce a seamless joining experience for new hires from Selection to On-Boarding. It not only enhanced the joining experience, but also reduced process redundancies and increased efficiencies.

c) I mproved process time in HR enabled by automation- Multiple processes that were partially offline were automated 100%, thereby reducing response and solution time. This also adds to the data and predictive analytics for HR, which would help us build processes for the future.

d) Aeing there for people- The Health & Wellness teams organized regular vaccination camps across locations to ensure that all employees and their families were vaccinated. This was supported by a portal developed by Company''s in-house team, which tracked vaccination status and sent regular follow ups to ensure 100% compliance. Along with it the Health, Wellness and Administration team supported people who tested positive, helping them with medicines, food, periodic check-ups, oxygen support, tie up with hospitals, etc.

e) A ignificant Achievement in HR Excellence-

The Confederation of Indian Industries (CII) recognized the Company under category ''Significant Achievement in HR Excellence'', which was a 100-point improvement from the last year, a milestone in our journey towards excellence. This recognition is based on a

detailed examination of Company''s policies and practices as per the framework designed by CII followed by an onsite audit by senior members of the industry.

f) A ommitment to being a Great Place to Work- The Company was certified as a Great Place to Work for the 3^rd consecutive year and also earned a badge for ''Commitment to Being a Great Place to Work''. This was in addition to recognition of (a) being among India''s 100 Best Places to Work for, (b) among India''s Top 30 in the Manufacturing Sector for 3^rd consecutive year and (c) among the best companies in Cement and Building Materials.

g) I ndustrial Relations- Company considers its employees as its biggest asset. It therefore, always strives to build healthy relationship with them and resolve issues through dialogue and discussions. As a result, employee relations remained cordial during the year. Total number of employees as on 31^st March, 2022 were 6,445.

8. OCCUPATIONAL HEALTH AND SAFETY

Following a ''Safety First'' approach, health and safety is a top priority area of the Company. Company has built a robust safety management system based on the globally recognized and practised OHSAS 18001 standard to institutionalize the organisation-wide focus on Occupational Health and Safety.

F afety Committees'' have been formed at all manufacturing units with equal representation from both management and non-management categories. These committees play a pivotal role in achieving the objective of ''Safety First'' by undertaking assessment of safety issues on an ongoing basis and implementing suitable initiatives and programs for the same. To transform the way workers'' look at safety and make them aware and adopt best practices related to safety, these Committees periodically organise online and offline trainings, mentoring and coaching with the help of internal and external safety experts. This has helped bringing about a consistent positive change to the workers'' safety performance. Such interactions are also helping the plant level safety committees get feedback from workers and thereby identifying hazards and minimise the recurrence of the same. The Company has established a structured hazard identification and risk assessment process which helps it identify potential risks which could have resulted in production disruptions and liabilities.

To provide its employees and contractual workers access to quality and instant healthcare services, Company has established ''Wellness Management Centres'' (WMC) at all the locations. WMCs are equipped with qualified doctors and modern facilities which help carry out day to day healthcare services and also conduct annual health check-ups for employees & contract workers. Health talks by experts and specialists are also organised to propagate awareness on chronic and lifestyle diseases.

9. SUSTAINABILITY

Sustainability is at the forefront of the Company since inception and imbibed in its business model as a way of life. Company''s operational strategy is built on a long-term commitment to experiment and implement new ideas for improving efficiencies, minimising the use of input resources and promote circular economy in the process. Following were key initiatives / developments:-

a) Generation of power from renewable

resources- Company continued to lay strong focus on increasing use of renewable energy (RE) as part of its sustainability agenda. While Company maintains its leadership position with regard to use of RE in its total energy consumption, it is steadily ramping up its RE power generation capacity spanning across Waste Heat Recovery (WHR), Solar and Wind power plants. During the Company has increased share of renewable energy in total energy consumption from 47.9% in FY 2020-21 to 48.2% in FY 2021 -22. It has already undertaken work on setting up solar power plant capacity of 106 MWp at different locations for meeting its captive requirement. The Company continues its recognition of having the largest WHR capacity in World Cement Industry excluding China. This apart, in terms of operational efficiency of WHRP, Company is regarded as one of the best in

the industry. During the year, the Company installed 10.5 MW wind power plant in Maharashtra and 8.4 MW in Karnataka. Its total renewable power generation capacity (including WHR) stood at 263 MW at the end of financial year 2021 -22.

b) Energy Conservation- Energy conservation derives extreme focus of the Company and has seen numerous innovations and initiatives over the years ranging from shop-floor experiments to large capex. This has helped Company to reduce its carbon intensity and rationalize production costs. More details

on initiatives taken in the area of energy conservation are given in Annexure - 3 to this report. Company''s performance in energy conservation field is getting exemplified at platforms like "Perform, Achieve & Trade"

(PAT) scheme of the Govt. of India wherein the Company overachieved its targets in PAT Cycle I, II and III continuously. The Company was awarded with the ''Best Performer'' award for energy saving under PAT Cycle I by Bureau of Energy Efficiency.

c) Alternative Fuels and Raw Materials-

Company is constantly working on to increase usage of alternative raw materials and fuels in its operations. Company uses of wastes of various industries such as Pharma, Chemical, Sponge Iron as alternate fuel. Company has also started utilizing MSW (Municipal Solid Waste), RDF (Refused Derived Fuel) and Agriculture Crop Residue as alternate fuel to conserve the natural resources.

These measures have helped the Company to improve its Thermal Substitution Rate to 2.41% in FY 2021-22.As alternative raw materials, the Company has been using marginal grade limestone and quarry rejects with high grade material in a cost effective manner. Company''s share of alternate fuel and raw material in total fuel and raw material consumption stood at 9.84% and 27.23% in FY 2021-22.

d) Green products- The Company has been producing blended cement under following categories: Portland Pozzolana Cement (PPC), Portland Slag Cement (PSC) and Composite Cement (CC) conforming strictly to the specified BIS norms. Blended cement contributes to sustainable design by making concrete stronger and durable, reducing consumption of natural resources such as limestone, lowering greenhouse gas emissions and contributes to a circular

economy by utilizing wastes from power, iron and steel plants. Use of blended cement also has cost benefits for Company''s customers. The share of blended cement in total cement production stood at 75.13% in FY 2021-22.

e) Emission Reduction- Company has been constantly working on ways to reduce its carbon emissions. Over the years, measures such as installation of waste heat recovery plants, increased production of blended cement, increased usage of renewable energy, etc. have been taken by the Company in this direction. The Company has targeted to reduce Scope-1 GHG emissions by 12.7% per ton of cementitious materials by 2030 from a 2019 base year and Scope-2 GHG emissions by 27.1% per ton of cementitious materials within the same timeframe. These have been validated by Science Based Targets initiative (SBTi). Further as part of its membership of Global Cement and Concrete Association (GCCA), it is committed to achieve the carbon goals as are decided by GCCA from time to time.

f) Water Conservation- Water is increasingly becoming a scarce and precious natural resource. The Company has been working on two-pronged approach of optimising water consumption as well as increasing availability of water through water harvesting and recharging. Company''s macro level initiatives in this regard such as installation of Air Cooled Condensers in all its thermal power plants and setting-up Waste Heat Recovery based power plants have been a great success. Micro initiatives include construction of rain water harvesting structures around operating sites and mining area, installation of Sewage Treatment Plants for treating domestic waste water, use of recycled water in operations, online monitoring of ground water level, installation of water sensors & fixtures, etc. which help in reducing water consumption, increase water availability and reduce dependence on ground water.

g) Sustainability Reporting- Company released its 17^th annual Corporate Sustainability Report for the reporting period 2020-21 titled "Progressing Responsibly with hard work and innovation". The said report was prepared in accordance with the "GRI Standards - Comprehensive Option" and assured by an independent certifying agency.

The Company has also consistently issued its Business Responsibility Report as part of Annual Report since year 2012-13 disclosing its performance with respect to various Business Responsibility principles. This apart, it has been consistently participating in various benchmarking and rating exercises such as CDP, Dow Jones Sustainability Index, MSCI sustainability index, etc. to gauge its performance with peers and improve upon the same. Company is part of various global industry membership such as Global Cement and Concrete Association wherein also it shares its performance details on various aspects.

h) Engaging as knowledge partner - In

a unique initiative, during the year, the Company, held discussions with World Bank to act as a knowledge partner with them, on projects / programs relating to sustainability and climate change. The Company has offered to participate in initiatives, workshops, training programs, etc. relating to sustainability issues and fund research in the areas of Carbon Capture Usage & Storage (CCUS), use of waste materials, resource conservation, power storage technology and pollution control measures. It also offered its facilities for setting-up pilot projects in these areas.

The Company, as part of its membership with Global Cement and Concrete Association, has participated in INNOVANDI project, which is designed to accelerate deployment of enabling technologies for CCUS. Under this initiative, the Company is collaborating with other member companies to identify solutions and technologies to address cement and concrete''s carbon footprint.

10. CORPORATE GOVERNANCE

11. BUSINESS RESPONSIBILITY REPORTING

Company is also releasing Business Responsibility Report (BRR) as part of this Annual Report covering its compliances towards the Business Responsibility Principles enunciated by the Securities and Exchange Board of India as required under Regulation 34(2) (f) of Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (as amended).

12. CORPORATE SOCIAL RESPONSIBILITY

Cs part of its triple bottom-line approach to its business, Company has always considered the community as its key stakeholder. It believes that the community around its operations should also grow and prosper in the same manner as does its own business. Accordingly, Corporate Social Responsibility forms an integral part of the Company''s business philosophy. To oversee all its CSR initiatives and activities, the Company has constituted a Board-level Committee - Corporate Social and Business Responsibility Committee.

The major thrust areas of the Company include healthcare, education, women empowerment, infrastructure support, integrated rural development, etc. which are aligned to the areas specified under Schedule VII of the Companies Act, 2013. The Annual Report on CSR activities of FY 2021-22 with requisite details in the specified format as required under Companies (Corporate Social Responsibility Policy) Rules, 2014 (as amended) is enclosed at Annexure - 2 and forms part of this report. The CSR Policy of the Company may be accessed on website of the Company at link https://www.shreecement.com/investors/policies.

13. SUBSIDIARY COMPANIES

The Company has following subsidiaries:

S. No.	Name of Subsidiaries	Nature of Interest
1	Shree Global FZE
2	Raipur Handling and Infrastructure Private Limited
3	Shree Cement East	Wholly Owned
	Private Limited	Subsidiaries
4	Shree Cement North Private Limited
5	Shree Cement South Private Limited
6	Shree Enterprises Management Ltd
7	Shree International Holding Ltd
8	Union Cement Company PrJSC	Step-down Subsidiaries
9	U C N Co. Ltd LLC (earlier Union Cement Norcem Co. Ltd. LLC)

S. No. Name of Subsidiaries	Nature of Interest
10 Shree Cement East Bengal Foundation	Subsidiary Company (Incorporated under Section 8 of the Companies Act, 2013)

Cudited financial statements of the subsidiaries of the Company are available on the website of the Company. The shareholders, who wish to receive a copy of Annual Accounts of the Subsidiary Companies, may request the Company Secretary for the same. The policy for determining material subsidiaries as approved by the Board can be accessed on the website of the Company at link https://www.shreecement.com/investors/policies.

P ursuant to Section 129(3) of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014, a statement containing salient features of the financial statements of the subsidiary companies in prescribed Form AOC-1 is given in the Consolidated Financial Statements of Company and forms part of this Annual Report.

14. CONSOLIDATED FINANCIAL STATEMENTS

The Consolidated Financial Statements of the Company have been prepared in terms of provisions of Companies Act, 2013 and Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (as amended) by following the applicable Accounting Standards notified by the Ministry of Corporate Affairs and forms part of this Annual Report.

15. DIRECTORS'' RESPONSIBILITY STATEMENT

P ursuant to Section 134(5) of the Companies Act, 2013, the Board of Directors of the Company, to the best of their knowledge and belief and according to the information and explanations obtained by them, state that:

â¢ In the preparation of the annual accounts for the year ended 31⁵¹ March, 2022 the applicable accounting standards have been followed and there are no material departures from the same;

â¢ They have selected such accounting policies, judgments and estimates that are reasonable and prudent and have applied them consistently so as to give a true and fair view of the state of affairs of the Company as at 31^st March, 2022 and of the statement of Profit and Loss as well as Cash Flow of the company for the year ended on that date;

â¢ 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;

â¢ The annual accounts have been prepared on a going concern basis;

â¢ Necessary internal financial controls have been laid down by the Company and the same are commensurate with its size of operations and that they are adequate and were operating effectively; and

â¢ Proper systems have been devised to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

16. PERFORMANCE EVALUATION OF BOARD,

ITS COMMITTEES & INDIVIDUAL DIRECTORS

Based on the same, the Board carried out annual evaluation of its own performance, performance of its Committees, Individual Directors including Independent Directors during the year. Company had adopted the evaluation parameters as suggested by the Institute of Company Secretaries of India and Securities and Exchange Board of India with suitable changes from Company''s perspective. The performance of the Board was evaluated by the Board on the basis of criteria such as Board composition and structure, effectiveness of Board processes, information flow to Board, functioning of the Board, etc. The performance of Committees was evaluated by the Board on the basis of criteria such as composition of Committees, effectiveness of Committee working, independence, etc. The Board evaluated the performance of individual Director on the basis of criteria such as attendance and contribution of Director at Board/Committee Meetings, adherence to ethical standards and code of conduct of the Company, inter-personal relations with other Directors, meaningful and constructive contribution and inputs in the Board/ Committee meetings, etc.

For the above evaluation, the Board members completed questionnaires providing feedback on different parameters as already stated above including on performance of Board / Committees

/ Directors, engagement levels, independence of judgment and other criteria. This is followed with review and discussions at the level of Board. The results of evaluation showed high level of commitment and engagement of Board, its various committees and working directors.

In a separate meeting of the Independent Directors, performance evaluation of NonIndependent Directors, the Board as a whole and performance evaluation of Chairman was carried out, taking into account the views of Executive and Non-Executive Directors. The quality, quantity and timeliness of flow of information between the Company Management and the Board which is necessary for the Board to effectively and reasonably perform their duties were also evaluated in the said meeting.

The Independent Directors well appreciated the functioning of the Board of Directors, Working Directors as well as Committee of the Board. They were also highly satisfied with leadership role played by the Chairman.

Company had appointed an External Facilitator for the purpose of carrying out the performance evaluation in a fair and transparent manner.

17. DIRECTORS AND KEY MANAGERIAL PERSONNEL

Director retiring by rotation - In accordance with the provisions of the Companies Act, 2013 and Articles of Association of the Company, Shri Prakash Narayan Chhangani (DIN: 08189579), Director of the Company (designated as Whole Time Director) will retire by rotation in the ensuing Annual General Meeting (AGM) and being eligible, offers himself for re-appointment. Item seeking approval of members for the same is included in the Notice convening the 43^rd AGM. The Board recommends the reappointment of Shri Prakash Narayan Chhangani. His reappointment at the 43^rdAGM as a director retiring by rotation would not constitute break in his appointment as a Whole Time Director.

Key Managerial Personnel - Shri Prashant Bangur (DIN: 00403621) was last appointed as Joint Managing Director of the Company for a period of 5 years from 1^st April, 2017. His tenure as Joint Managing Director completed on 31^stMarch, 2022. The Board of Directors of the Company in its meeting held on 4^th February,

2022, on the recommendation of Nomination cum Remuneration Committee and after evaluating

his performance and considering the Company''s growth under his stewardship, approved his reappointment as Jt. Managing Director of the Company for a period of 5 (five) years w.e.f. 1^stApril, 2022 subject to approval of the members. Approval of Members was obtained by passing of Special Resolution through Postal Ballot on 1^stApril, 2022.

Independent Directors - The Board of Directors of the Company in its meeting held on 21^st May, 2022, on the recommendation of Nomination cum Remuneration Committee), appointed Mr. Zubair Ahmed (DIN: 00182990) as Additional Director of the Company w.e.f. 21^st May, 2022. He holds office as Additional Director up to the date of the ensuing Annual General Meeting. Further, the Board appointed him as Independent Director of the Company for a period of 5 (five) years w.e.f. 21^stMay, 2022 subject to approval of the members.

P rofile and other information of the aforesaid Directors, as required under Regulation 36 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and Secretarial Standard - 2 forms part of the Notice convening the 43^rdAnnual General Meeting.

P uring the year, Shri Om Prakash Setia (DIN: 00244443) resigned from the position of the Independent Director of the Company effective from close of Business Hours on 29^th October,

2021 due to his personal reasons. Further, at the time of resignation, he confirmed that there were no material reasons for his decision to resign.

I n accordance with Section 149(7) of the Companies Act, 2013 and Regulation 25(8) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (as amended), each Independent Director has given a declaration to the Company confirming that he/she meets the criteria of independence as specified under Section 149(6) of the Companies Act, 2013 and Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (as amended). They have also confirmed the compliance of Rule 6 of the Companies (Appointment and Qualification of Directors) Rule, 2014 regarding inclusion of their name in the data bank of Indian Institute of Corporate Affairs (IICA).

18. FAMILIARIZATION PROGRAMME FOR INDEPENDENT DIRECTORS

I n order to acquaint the new directors with the Company, a detailed presentation is given to them

at the time of their appointment which covers their role, duties and responsibilities, Company''s strategy, business model, operations, markets, organizational structure, products, etc. A detailed presentation along similar lines is sent to existing Independent Directors every year to keep them apprised of the above details.

Ps part of Board discussions, presentation on performance of the Company is made to the Board during its meeting(s). Plant visits are also arranged for Independent Directors from time-to time for better understanding of the Company''s operations. The details of such familiarisation programmes for Independent Directors are posted on the website of the Company and can be accessed at link https://www.shreecement.com/ investors/shareholder-information.

19. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS/ OUTGO

Phe particulars relating to conservation of energy, technology absorption, foreign exchange earnings and outgo, as required to be disclosed under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is set out at Annexure - 3 which forms part of this report.

20. PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES

Disclosures 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 provided at Annexure - 4.

I n terms of the provisions of Section 197(12) of the Companies Act, 2013 read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing the names and other particulars of the top ten employees and employees drawing remuneration in excess of the limits as provided in the said rules are set out in the Board''s Report as an addendum thereto. However, in terms of provisions of the first proviso to Section 136(1) of the Companies Act, 2013, the Annual Report is being sent to the members of the Company excluding the aforesaid information. The said information is available for inspection at the Registered Office of the Company during such working hours as are provided under the Articles of Association of the Company and any member interested in obtaining such information may write

to the Company Secretary and the same will be

furnished on request.

21. AUDITORS

I. Statutory Auditors

M /s. Gupta & Dua, Chartered Accountants (Firm Registration No. 003849N), who are the Statutory Auditors of the Company, shall hold office till the conclusion of the ensuing Annual General Meeting. They have given their report on the Annual Financial Statements for Financial Year 2021 -22. The Audit Report does not contain any qualification, reservation or adverse remark. As per the provisions of Section 139 of the Companies Act 2013, the term of office of M/s. Gupta & Dua, as Statutory Auditors of the company will conclude with effect from the conclusion of the ensuing AGM of members of the Company.

Mhe Board of Directors of the Company in its meeting held on 21^st May, 2022, on the recommendation of Audit Committee, appointed M/s. B R Maheswari & Co LLP, Chartered Accountants (Firm Registration No. 001035N/N500050) as the Statutory Auditors of the Company for a period of 5 (Five) consecutive years commencing from the conclusion of ensuing 43^rd Annual General Meeting till the conclusion of 48^th AGM, subject however to approval of the members at the ensuing AGM. The Statutory Auditors have confirmed their independence status and eligibility for their appointment.

Mhe members'' attention is drawn to a Resolution proposing the appointment of M/s. B.R. Maheswari & Co LLP, Chartered Accountants, as Statutory Auditors of the Company which is included in the Notice convening the 43^rd AGM.

II. Secretarial Auditors

Mhe Board had appointed M/s. Pinchaa & Co., Company Secretaries as Secretarial Auditor of the Company to conduct Secretarial Audit for the Financial Year 2021 -22. They have submitted their report in prescribed format and the same is enclosed at Annexure - 5. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.

III. Cost Auditors

I n terms of the provisions of Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Amendment Rules, 2014, the Board of

Directors of the Company have appointed M/s. K. G. Goyal & Associates, Cost Accountants, Jaipur (Firm Registration No. 00024) to conduct the cost audit for the financial year ending 31^st March, 2023 at a remuneration as stated in the Notice convening the 43^rd Annual General Meeting of the members. As required under the Companies Act, 2013, the remuneration payable to cost auditors has to be placed before the Members at the general meeting for ratification. Hence, a resolution seeking ratification of remuneration by the Members, payable to the Cost Auditors, forms part of the Notice of the ensuing 43^rd AGM.

The Cost Auditors are in process of conducting the audit of cost records for year 2021 -22 and shall submit their report in due course.

22. OTHER DISCLOSURES

(a) Composition of Audit Committee- The

Audit Committee comprises of Shri Shreekant Somany as Chairman, Shri R. L. Gaggar,

Dr. Y. K. Alagh, Shri Nitin Desai and Shri Sanjiv Krishnaji Shelgikar as other Members. More details are given in the Corporate Governance Report. All the recommendations made by the Audit Committee were accepted by the Board.

(b) C etails of Meetings of Board and its Committees- The Board of Directors of your Company met 4 times during the year to deliberate on various matters. The meetings were held on 21^st May, 2021, 9^th August, 2021, 29^th October, 2021 and 4^th February, 2022. Further details are available in the Corporate Governance Report forming part of this Annual Report. The intervening gap between the meetings was within the period prescribed under the Companies Act, 2013 and the Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (as amended).

(c) C nnual Return- In terms of Section 92(3) of the Companies Act, 2013 and Rule 12 of the Companies (Management and Administration) Rules, 2014, the Annual Return of the Company is available on the website of the Company at link https://www.shreecement. com/investors/shareholder-information.

(d) P articulars of Loans, Guarantees or Investments- Details of Loans, Guarantees and Investments covered under the

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

(e) Related Party Transactions- All Related Party Transactions during the financial year 2021-22 were on arm''s length basis and in ordinary course of business. They were all in compliance with the applicable provisions of the Companies Act, 2013 and the Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (as amended). All such transactions are placed before the Audit Committee for review/approval. The necessary omnibus approvals have been obtained from Audit Committee wherever required. There were no material Related Party Contracts/ Arrangements/Transactions made by the Company during the year 2021-22 that would have required Shareholders'' approval under provisions of Section 188 of the Companies Act, 2013 or of the Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (as amended). The Company has adopted a Related Party Transactions Policy duly approved by the Board, which is uploaded on the Company''s website & may be accessed at link https://www.shreecement.com/ investors/policies.

Name of the	% Holding	Amount	Nature of
Entity	in the Company	('' Crore)	Transaction
Shree Capital Services Ltd.	24.90%	0.48	Payment of Office Rent

(f) R eposits from Public- The Company has not accepted any deposits from public covered under Chapter V of the Companies Act, 2013 during the year and as such, no amount on account of principal or interest on deposits from public was outstanding.

(g) M anaging the Risk of Fraud, Corruption and Unethical Business Practices

Vigil Mechanism/Whistle Blower Policy-

The Company has adopted a Whistle Blower Policy and established the necessary vigil mechanism for employees and Directors to report concerns about unethical behaviour. The policy provides for adequate safeguards against victimization of employees who avail of the mechanism and also provides for direct access to the Chairman of the Audit Committee. The Whistle Blower Policy may be accessed on the website of the Company at link https://www.shreecement.com/ investors/policies.

Ethics, Transparency and Accountability Policy & Code of Conduct- Company believes in the principle of trust, which can be derived through ethical practices, transparency and accountability to stakeholders. Keeping the same into account, Company has in place policy of Ethics, Transparency and Accountability Policy & Code of Conduct.

Every director and employee is required to adhere to the said policy. The details of the policy can be accessed on the website of the Company at link https://www.shreecement. com/investors/policies.

Anti-Bribery and Anti-Corruption Policy-

To conduct the business in an ethical, honest and transparent manner, the Board of Directors of the Company has adopted AntiBribery and Anti-Corruption Policy. Company has zero tolerance approach toward bribery and corruption. Every individual or group of individuals, associated with the Company in any form, be it director or employee or worker or contractor or dealer or supplier is required to follow the said policy. The details of the policy can be accessed on the website of the Company at link https://www. shreecement.com/investors/policies.

(h) Remuneration Policy- Company firmly believes in nurturing a people friendly environment, which is geared to drive the organisation towards high and sustainable growth. Each and every personnel working with Company strives to achieve the

Company''s vision of being the best in the industry. Its Remuneration Policy is therefore designed to achieve this vision.

The policy has been approved by the Board on the recommendation of Nomination cum Remuneration Committee. The policy is applicable to Directors, Key Managerial Personnel (KMP) and other employees.

The directors and KMPs are appointed on the recommendation of Nomination cum Remuneration Committee in terms of Companies Act, 2013. The factors for deciding the Remuneration of working directors, KMPs and senior executives includes, responsibility and profile of Individual, remuneration packages of peer group, accolades and recognition conferred on the individual, performance of the sector in which company operates, overall performance of the Company including its ESG/sustainability performance.

The Remuneration Policy can be accessed on the website of the Company at link https:// www.shreecement.com/investors/policies.

(i) Policy on Prevention, Prohibition and Redressal of Sexual Harassment at Workplace- The Company has complied with the provisions of the constitution of the Internal Committee under the Sexual Harassment of Women at the Workplace (Prevention, Prohibition and Redressal) Act, 2013 and has adopted a Policy on Prevention, Prohibition and Redressal of Sexual Harassment at the Workplace, in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules made thereunder. Company has formed an ''Internal Complaints Committee'' for prevention & redressal of sexual harassment at workplace. The Committee has 6 members and is chaired by a senior woman member of the organisation. The Company has not received any complaint of sexual harassment during the financial year 2021-22.

(j) M aterial Changes after the Close of Financial Year: There have been no material changes and commitments which have occurred after the close of the year till the date of this report, affecting the financial position of the Company.

(k) P ignificant and Material Orders passed by the Regulators or Courts- No significant material orders have been passed by the Regulators or Courts or Tribunals which would impact the going concern status of the Company and its future operations.

(l) M aintenance of Cost Records- Company is required to maintain cost records as specified by the Central Government under subsection (1) of section 148 of the Companies Act, 2013, accordingly such accounts and records are made and maintained by the Company.

(m) Compliance with Secretarial Standards-

Company has complied with the Secretarial Standards issued by Institute of Companies Secretaries of India (ICSI) on Board Meetings (SS- 1) and General Meetings (SS-2).

23. ACKNOWLEDGEMENT

Mar 31, 2021

Dear Members,

The Directors take pleasure in presenting their 42^nd Report and the Audited Financial Statements of the Company for the financial year 2020-21. Management Discussion and Analysis has also been incorporated into this report.

1. FINANCIAL PERFORMANCE

A brief of financial performance for the year gone by and its comparison with previous year is given below: -

(? in Crore)
Particulars	Standalone		Consolidated
Particulars	2020-21	2019-20	2020-21	2019-20
Revenue from Operations	12,588.39	11,904.00	13,476.33	12,868.39
Other Income	458.00	271.62	466.33	274.40
Total Income	13,046.39	12,175.62	13,942.66	13,142.79
Total Expenditure	8,633.67	8,229.47	9,424.95	9,109.29
Profit Before Interest, Depreciation and Taxes (PBIDT)	4,412.72	3,946.15	4,517.71	4,033.50
Finance Costs	247.10	286.52	251.29	291.43
Depreciation and Amortisation expenses	1,139.90	1,699.42	1,262.34	1,807.81
Profit Before Tax	3,025.72	1,960.21	3,004.08	1,934.26
Tax Expense	713.79	390.03	714.49	390.20
Profit After Tax	2,311.93	1,570.18	2,289.59	1,544.06
Profit attributable to Owners of the Company	-	-	2,285.87	1,535.85
Profit attributable to Non-Controlling Interest	-	-	3.72	8.21

(d) Finance Cost: Finance cost came down by 13.9% from '' 287 crore to '' 247 crore on account of repayment of long-term borrowings and efficient working capital management.

â¢ Earnings Before Interest Depreciation and Tax (EBIDTA) rose to '' 4,413 crore by 11.8% compared to '' 3,946 crore of previous year on account of growth in volumes, higher share of premium products and cost optimisation measures.

Key Financial Ratios

Key financial ratios of the Company in terms of showing the financial performance are as under: -

Particulars	2020-21	2019-20	% Change	Remarks
Operating Profit Margin (without other income) (%)	31.42%	30.87%	1.77%	No significant change
Net Profit Margin (%)	18.37%	13.19%	39.23%	Improved due to lower depreciation charge
Return on Net Worth (%)	15.71%	11.77%	33.43%	Improved due to lower depreciation charge
Interest Coverage Ratio	17.86	13.77	29.66%	Improved due to higher operating profit & reduction in interest cost
Debtors Turnover (Days)	14.09	25.40	-44.54%	Reduced due to efficiency in collection process
Inventory Turnover (Days)	42.83	43.78	-2. 17%	Reduced due to increase in turnover
Current Ratio (Times)	2.05	1.79	14.28%	Improved due to reduction in current maturity of long-term debts
Debt-Equity Ratio (Times)	0.11	0.20	-43.75%	Repayment of Long Term Debts

Key highlights of the year (Standalone basis):

â¢ Sale volume (cement and clinker) witnessed an increase of 7.7% to 26.84 million tons in 2020-21 from 24.92 million tons of previous year. This is despite COVID-19 impacting the sale volumes

in the early part of the year. Increase in volume was observed across all regions where Company operates. However, increase in cement sales from Kodla unit in Southern India went up significantly from 1.47 million tons to 2.19 million tons.

â¢ Increase in sales volumes led to Revenue from operations growing by 5.7% from '' 11,904 crore to '' 12,588 crore. Company''s continued focus on raising share of its premium products along with continuous efforts to position its brands led to maintaining price realisation.

â¢ Key Cost components: Company has a sustained program to drive efficiency and mitigate cost headwinds across various cost items which has made it one of the lowest cost cement producers in the country.

(a) Raw material: On account of continued optimisation in our limestone mining operations and higher in-house production of

gypsum helped mitigate the increase in cost of fly ash and other materials. As a result, raw material cost remained at the same level of previous year.

(b) Power & Fuel: Increase in share of low cost renewable energy and efficient energy management practices helped the Company reduce its power cost during the year. Company''s pro-active procurement strategy and use of multiple fuels coupled with increased usage of alternative fuels helped Company keep fuel cost static despite increasing prices of coal / petcoke in international markets.

(c) Logistic Cost: Logistics and transportation cost increased mainly on account of increase in diesel prices. Company continues to work on efficiency improvement initiatives, rationalising routes and lead distances, enhancing direct dispatches and raising use of technological tools in supply management etc. to keep the cost under check.

2. DIVIDEND AND RESERVES

The Board of directors of the Company has recommended final dividend of '' 60/- per equity share of '' 10/- each for the Financial Year 2020-21. For previous year 2019-20, the Company had paid total dividend of '' 110/- per share (which included '' 70/- per equity share as normal dividend and '' 40/- per equity share as additional dividend).

In terms of the provisions of the Finance Act,

2020, dividend shall be taxed in the hands of the shareholders and the Company shall withhold tax at source at the applicable rates.

Total dividend relating to the year 2020-21 amounts to '' 216.48 crore as against '' 478.47 crore (including dividend distribution tax of '' 81.58 crore) for the year 2019-20.

During the year 2020-21, an amount of '' 500 crore was transferred to General Reserves.

The Board of Directors of the Company in line with provisions of Regulation 43A of Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (as amended) had approved Dividend Distribution Policy on August 12, 2016. The policy is uploaded on Company''s website and can be accessed at the link https://www.shreecement.com/uploads/ cleanupload/dividend-distribution-policy.pdf.

3. MANAGEMENT OUTLOOK OF MACROECONOMY AND INDUSTRYI. Indian Economy-Developments and Outlook

Indian economy faced one of its most challenging years during 2020-21. Lockdown imposed by Central Government to contain spread of coronavirus brought the economic activities to a standstill. Following its six-year low performance of 4.2% in 2019-20, GDP growth expectedly nosedived with sharp contraction of 24.4% (on constant prices) in first quarter which further continued by 7.3% in second quarter of 2020-21. Government of India announced various stimulus measures to generate job opportunities and provide liquidity support to various sectors including construction, infrastructure development and housing. This was subsequently followed by slew of announcements made in the Union Budget of 2021-22 to boost economic growth. The fiscal deficit expansion and thereby creating extra room for investing in infrastructure development with 34.5% increase in the capital expenditure helped improve sentiments. The support provided by RBI in terms of easy liquidity, moratorium of loan recovery and a benign interest rate environment helped push up the consumption. All these measures and

pent up demand helped sharp recovery in the economic activities in second half of year 2020-21. Economic Survey 202021 also showed a sharp recovery due to resurgence in high frequency indicators such as power demand, rail freight, e-way bills,

GST collection, steel consumption, etc. The second advance estimates for year 2020-21 released by National Statistical Office projects a contraction of 8.0% in real GDP growth which came lower than initial assessments. Sector-wise, manufacturing, services and construction were hit while agriculture, government consumption and net exports helped contain the deceleration of growth.

Just as the economy appeared to be inching back to normalcy, India has been hit by a second wave of Covid-19 infections in early April. This time, the Covid-19 has been more infectious. Spiraling cases of infections have overwhelmed the health system in the country. The Government, both at central and state level, are working relentlessly to counter the situation and mitigate its impact. While there is no complete lockdown, the restrictive measures adopted by States have started denting the economic activities. RBI, IMF and various Rating agencies had, in April, projected GDP growth of upwards of 11% for FY 2021 -22 have started revising their projection downward to below 10%.

Overall, despite the challenging environment, the growth-story of India remains intact.

India remains a preferred investment destination for FDI amidst global asset shifts towards emerging economies. Faster containment of second wave and successful implementation of vaccine program can help faster mitigation of the impact of Covid-19. Proactive and decisive measures taken by governments and policy makers will certainly help kick-off growth bandwagon again and put the economic recovery back on rails. The "Atma-Nirbhar Bharat Abhiyan" (Self-reliant India Mission) which entails greater focus on local manufacturers and service providers will help country reduce its dependence on imports and boost exports thereby giving impetus to economic growth. Further, both the India Meteorological Department (IMD) and Skymet, have predicted a normal monsoon for 2021. Normal rains will offset the demand contraction induced by the

pandemic. In view of the above, while there are several favourable factors for positive outlook for the Indian economy for FY 2021-22, the biggest challenge in terms of uncertainty around duration and impact of Covid-19 led restrictions may make such assessment erratic.

II. Cement Industry - Development and Outlook

Cement industry started the year 2020-21 with cement demand witnessing disruption due to suspension of production, stalled construction activities and non-availability of labour due to lockdown. The outlook seemed uncertain with continued extension of lockdown restrictions. With gradual unlocking of economic activities, sentiment started picking up due to pent-up demand specially from rural areas. With enhanced government spending and normalisation of labour availability, the demand from infrastructure segment also witnessed steady pick-up. In later part of the year, Real estate sector also emerged as a major contributor to the demand revival due to increased housing requirement, decline in housing loan rates and stamp duty reduction announced by some States. All in all, year 2020-21 ended on a positive note led by a solid increase in the construction activities across rural and urban areas as well as elevated spending from Governments towards infrastructure projects. While the final data for the cement industry for 2020-21 are yet to come out, considering the momentum witnessed towards the later part of the year, all India cement production is likely to have exceeded the level of approx. 333 million tons recorded in 2019-20.

Cement demand is closely linked to the overall economic growth, particularly of the housing and infrastructure sector. With the GDP growth for FY 2021-22 is projected to be in higher single digit, the cement industry is also expected to achieve healthy growth. The accommodative stance of RBI to push economic growth is incentivising businesses with higher credit offtake and business activities. A benign interest rate policy coupled with "work from home" practice adopted by businesses has led to increased housing construction activities. Also, focus on infrastructure sector and housing

for all scheme, shall be the drivers of the demand. In light of the above, while there are continued uncertainties in terms of impact and duration of Covid-19 related restrictions, considering that present Covid-19 infections are likely to peak out soon and economic activities will start returning to normalcy, the outlook for the cement industry is considered cautiously optimistic.

4. NEW / EXPANSION PROJECTS

During the year 2020-21, Company commissioned commercial operations of Clinker Grinding Unit having capacity of 3.0 Million Ton Per Annum (MTPA) at Athagarh Tehsil in Cuttack District of Odisha.

The completion of Clinker Grinding Unit of 3.0 MTPA at village Patas in Pune District of Maharashtra has however, got delayed because of Covid-19 and Right of Way issues. The same is now expected to commence commercial production by September, 2021.

Further, Company is setting-up upto 12000 Ton Per Day (TPD) brownfield clinkerisation unit at village Khapradih in Baloda Bazar district of Chhattisgarh. The project activities are running on track and the project is likely to be completed in first half of FY 2022-23.

5. RISK MANAGEMENT

Company''s risk management process is designed to identify and mitigate risks that have the potential to materially impact its business objectives and maintains a balance between managing risk and making most of the opportunities. The Board is responsible for overseeing the overall risk management framework of the Company. The Audit and Risk Management Committee of Board, keeps an eye on execution of the risk management plan of the Company and advises the management on strengthening mitigating measures wherever required. The actual identification, assessment and mitigation of risks are however done by key executives of the Company in a systematic manner through regular meetings and dialogue and engagement / consultation with relevant stakeholders. The risks are prioritised according to significance and likelihood. Risks having high likelihood and high significance are classified as ''key risk''.

The key risks identified by the Company and their mitigation measures are as under:
S. No. Risks identified	Risk component and mitigation measures
1. Over- capacity in the industry	Continued over capacity in the industry poses risk of under- utilisation of production capacities, loss of market share and output prices falling to non-remunerative levels. As mitigation strategy for this risk, Company has invested in building customer loyalty through consistent high quality products, faster delivery to consumers, focus on premium segment and continued customer engagement. It has also been continuously adding capacity in markets where demand-supply conditions are considered to be relatively favourable so as to increase overall market share.
2. Availability of limestone and other natural resources	Limestone is the principal raw material for cement production and its consistent availability at optimum cost is essential for existing and future plant requirements. With depleting reserves at existing mines and acquisition of new limestone mines getting uncertain due to regulatory and competition issues, conservation of limestone has become paramount. Company has been making all efforts to optimise its usage, thereby, conserving the deposits and enhancing their life. These include use of additives in clinker production without compromising the quality, enhanced production of blended cement, deployment of latest mining techniques to reduce overburden and wastage, etc.
	Water is an essential component of environment, human life and economy. Company''s plants in Rajasthan are located in water deficient areas with continuously depleting water tables and as such, conserving water becomes very important. In power generation, Company installed Air Cooled Condensers (ACC) in all its thermal power plants which though involve additional capital expenditure, have helped Company reduce water consumption significantly. Additionally, Company has installed Waste Heat Recovery Systems in all its clinker units thereby, eliminating the need for cooling of waste hot gases and thus, saving water. Water harvesting reservoirs have also been constructed within plant and mines area.

S. No.	Risks identified	Risk component and mitigation measures
3.	Fuel cost	Company meets its fuel requirement by sourcing from open market and hence is exposed to volatility of market prices of the fuel. As mitigation measures, Company has deployed multi-fuel usage strategy as well as state-of-the-art technology in its operations, which allows it to use different fuels and most economical fuel among a basket of different fuels as per prevailing trends in the market. Company also participates in auction for securing coal linkage as and when organised by relevant authorities. Company has secured coal linkages for its Baloda Bazar cement plant(s). Additionally, to reduce reliance on conventional fuel for power generation, Company has extensively invested in Waste Heat Recovery Power Plants which do not entail usage of any fuel and thereby, cushioning itself from fuel price volatility to that extent. It has also been continuously investing in expanding its renewable portfolio (wind, solar) for meeting its energy requirements.
4.	Economic slowdown	COVID-19 pandemic has impacted the business and economy across the world. Restrictions and lockdown imposed in India to contain spread of virus have brought the business activities to a standstill and inducing economic slowdown all across. Company has taken the risks of such external factors into its business strategy and have taken necessary steps in terms of devising plans for mitigating such risk. It has prepared contingency plans such as work from home, enhanced safety measures, strategies for continuity of business and rapid restoration of operations.
5.	Cyber security	Owing to increasing importance of digitisation, majority of business activities of the Company have been witnessing digital transformation including logistics, marketing and manufacturing. Significant advantages of digitisation reflect in the form of faster customer servicing, enhanced process efficiency, better controls and speedy decision making. Digitisation is however fraught with risk of misuse of hardware and software, cyber-attacks, unauthorised access, data loss, etc. which can impact business operations. Company has been taking necessary measures like systematic back-up procedures, firewall systems, better monitoring & control mechanism to mitigate any risks arising due to digitisation.
6.	Climate change	Global warming and consequent impact in the form of erratic and frequent climate change has emerged as a major risk across globe. This impacts Company''s operations also as cement manufacturing is an energy and resource intensive process and releases CO2 due to calcination process and combustion of fuels. Efforts to address climate change by reducing emissions of Greenhouse Gases (GHG) through National, State and regional laws and regulations as well as international agreements will bring about various regulatory requirements impacting the way Company carry out its operations. New legislative or regulatory controls may pose risks which could include costs to purchase allowances or credits to meet GHG emission caps, costs required to procure advanced equipment to reduce emissions to comply with GHG limits or required technological standards or higher production costs. In addition, physical risks arising from extreme weather or high temperatures may impact any manufacturing sector in terms of property damage and disruption to operations. While combating climate change require collaborative and coordinate efforts from all, the Company has been continuously making efforts in this field. Efforts towards conservation of natural resources, enlarging renewable energy portfolio at various plant locations, use of efficient and state-of-art technologies in operations, etc. are testimony to the same. We have integrated sustainability as core to our operations and are thus prepared to meet new regulatory and legislative requirements resulting from climate change risks.
7.	Health and safety of employees	Health and safety of our employees and workers remains our utmost priority specially during the pandemic time. To mitigate the risk, the Company continues to work on institutionalising operational discipline particularly observing the safety procedures and protocols, both for employees and workers. Safety Committees have been formed to oversee safety related issues and implementing best safety practices. Wellness Management Centres have been established at plant level to meet any medical emergency requirement and oversee health related issues of the employees. To mitigate COVID-19 related challenge, required protocols and practices have been stringently implemented and compliance is ensured.
8.	Impact of regulatory changes	In developing and dynamic economy such as India, regulatory environment keeps on progressing to keep pace the global dynamics in the fields of environment, taxation, competition, governance, etc. Non-compliance of applicable regulations may lead to imposition of penalties, suspension of operations, among others apart from reputational damage. This may also hinder the pace of innovation, upgradation, transformation within the organisation. To mitigate the same, the Company keeps a strict vigil and regularly tracks on the regulatory environment and take necessary actions. Wherever required, it amends/ upgrade its operational practices and incur capex to ensure the compliance.

6. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company periodically assesses design as well as operational effectiveness of its internal controls across multiple functions and locations through extensive internal audit exercises. Based on the assessment of internal audit function, process owners undertake corrective action in their respective areas, and thereby strengthen the controls. Significant audit observations and corrective actions thereon are presented to the Audit and Risk Management Committee of the Board on periodical basis. The Audit and Risk Management Committee evaluates the adequacy and effectiveness of internal financial control systems periodically.

7. HUMAN RESOURCES / INDUSTRIAL RELATIONS

In today''s fiercely competitive business environment, attracting, retaining and nurturing the best talent is key to attaining the strategic objective of the Company. In this respect, the Company continues to take necessary measures and create a conducive atmosphere for the same. Major initiatives taken during the year were: -

(a) Offline to Online: The process of talent acquisition and learning was made online within 10 days of the COVID-19 induced lockdown in April, 2020. The Company launched AI based learning platform STEPS and used Webex and Zoom platforms to deliver live training programmes. Learning was a focus in this year and average man hours increased by 53%. The interview and selection process which used to be conducted in person have shifted to online platforms and was successfully managed even when volumes increased.

(b) Focus on automation: There has been an increased focus on automation. Multiple HR processes have been automated, thereby bringing in a significant reduction in cycle time and incidence of errors. The focus was SPARQ an app internally developed by the IT team with inputs from HR. It is a one stop solution for all employee queries, leave balance, attendance management, policy related solutions and a lot more. These solutions have been extremely well received within the organisation, and the team is working towards improving it further based on the feedback received.

(c) Health & Wellness: As important as it is in all times, the year gone by showed how important health and wellness of employees are. Company conducted programmes on holistic health and wellness, staying fit at home, mental health, yoga by industry experts etc. The in-house coach also conducted virtual exercise classes encouraging people to stay fit. The efforts were well appreciated when the Company was recognised as a winner in the Health and Wellness category by Society of Human Resource Management, India.

(d) Among India''s Best Companies to Work for: The Company''s team has been making consistent efforts to make the Company

a more receptive, inclusive and employee friendly organisation. Company conducts formal and informal surveys throughout the year to get the pulse of employees. The most important of these is through participation in "Great Place to Work" Survey. Company''s scores in the "Great Place to Work" Survey has consistently been at par with the top 100 companies in India. During the year, the Company was again certified as a Great Place to Work continuously for the third time. It was adjudged Best in Cement and Building Materials category, stood among the Top 30 in the Manufacturing and Production sector category and was among the Top 100 Organisations to Work for across sectors.

(e) Occupational Health and Safety- Following a ''Safety First'' approach, health and safety

is a top priority area of the Company. To institutionalise the organisation-wide focus on Occupational Health and Safety, Company has built a robust safety management system based on the globally recognised and practised OHSAS 18001 standard.

''Safety Committees'' have been formed at all manufacturing units with equal representation from both management and non-management categories. These committees play a pivotal role in achieving the objective of ''Safety First'' by undertaking assessment of safety issues on an ongoing basis and implementing suitable initiatives and programs for the same. To transform the way workers'' look at safety and make them aware and adopt best practices related to safety, these Committees periodically organise online and offline trainings, mentoring and coaching with the help of internal and external safety experts. This has helped bring about a positive change to the workers'' safety performance. Such interactions also help the plant level safety committees get feedback from workers and thereby identify hazards and minimise the recurrence of the same. Company has established a structured hazard identification and risk assessment process which helps us identify potential risks which could have resulted in production disruptions and liabilities.

To provide its employees and contractual workers access to quality healthcare services, Company has established ''Wellness Management Centres'' (WMC) at all the locations. WMCs are equipped with qualified doctors and modern facilities which help carry out day to day health-care services and also conduct annual health check-ups for employees & contract workers. Health talks by experts and specialists are also organised to propagate awareness on chronic and lifestyle diseases.

(f) Industrial Relations - Employee relations

remained cordial during the year. This has enabled Company to build healthy relationship and resolve issues through dialogue and discussions.

Total number of employees as on March 31, 2021 were 6,259.

8. RESPONSE TO COVID-19 OUTBREAK AND MEASURES TAKEN

COVID-19 has posed an unprecedented health challenge across the globe. Health and safety of Company''s employees and of local communities has gained more importance than ever before. On resumption of operations post relaxation of the nation-wise lockdown imposed by Government, several measures were taken by the Company. All prescribed COVID-19 related protocols advised by Government, industry bodies, etc. were immediately implemented and put in place to ensure safe working conditions for employees and workers. Depending upon nature of work, facility of ''work from home'' was extended. The Company focused on enhancing use of digital and online mode of working to cater to the changed working environment. For nearby communities, the Company extended its support in form of regular sanitisation, disinfectant sprays, distribution of masks & other hygiene products, creating awareness through boards, banners, etc. Company provided its support for strengthening and upgrading medical facilities in nearby areas and improving working conditions for health workers which included arrangement of oxygen cylinders, ventilators, testing machines and other critical life-savings equipment. Company made financial contributions to Chief Minister Relief Funds of the State of Rajasthan, Chhattisgarh and Karnataka besides contributing to PM CARES fund to augment government resources.

9. SUSTAINABILITY

Sustainability is at the forefront of the Company since inception. It has been Company''s constant endeavour to formulate, adopt and continuously improve its business model embracing both sustainability and growth agenda. As part of its sustainability agenda, Company focuses on conservation of environment, natural resources and energy efficiency. Company''s operational strategy is built on a long- term commitment to experiment and implement new ideas for improving efficiencies and minimising the use of input resources. During the year, the Company continued pursuing its sustainability agenda with same intensity and rigour. Key notable initiatives in this area were as follows: -

(a) Generation of power from renewable resources - Focus on renewable energy (RE) continues to remain a thrust area in our sustainability agenda. This has helped Company in conserving precious natural resources and mitigating GHG emissions. Over the years, the Company has been steadily ramping up its RE power generation capacity spanning across Waste Heat Recovery (WHR), Solar and Wind power plants. The Company continues to have largest WHR capacity in World Cement Industry excluding China. This apart, in terms of operational efficiency of WHRP, Company is regarded as one of the best in the industry. Its total RE power capacity (including WHR) stood at 255 MW at the end of financial year 2020-21.

(b) Energy Conservation - Energy conservation has been another focus area of the Company. As part of "Perform, Achieve & Trade" (PAT) scheme of the Govt. of India, the Monitoring & Verification Audit for PAT cycle -III (201718 - 2019-20) has been completed and the Company has overachieved its targets and thereby entitled to claim 12,623 (Nos) of ESCerts. In PAT Cycle I & II also, the Company had overachieved its targets. The Company was awarded with the ''Best Performer'' award for energy saving under PAT Cycle I

by Bureau of Energy Efficiency. More details on initiatives taken in the area of energy conservation are given in Annexure - 3 to this report.

Company is constantly working on to increase usage of alternative raw materials and fuels in its operations. Company uses of wastes of various industries such as Pharma, Chemical, Sponge Iron as alternate fuel. As alternative raw materials, the Company has been using marginal grade limestone and quarry rejects with high grade material in a cost effective manner.

(d) Water Conservation - Water is increasingly becoming a scarce and precious natural resource. The Company has been working on two-pronged approach of optimising water consumption as well as increasing availability of water through water harvesting and recharging. Company''s macro level initiatives in this regard such as installation of Air Cooled Condensers in all its thermal power plants and setting-up Waste Heat Recovery based power plants have been

a great success. Micro initiatives include construction of rain water harvesting structures around operating sites and mining area, installation of Sewage Treatment Plants for treating domestic waste water, use of recycled water in operations which help in increasing the availability of water and reduce dependence on ground water. Company is also undertaking a detailed assessment of water flows around its plants to identify potential areas which are most suited for water harvesting and recharge.

(e) Sustainability Reporting - Company released its 16^th annual Corporate Sustainability Report for the reporting period 2019-20 titled "Innovative to Survive and Collaborative to Thrive". Company has been advocating its policies and procedures and is proactive in showcasing its unique practices at the global platform. Company has built a strong collaborative approach with its partners such as suppliers, customers, vendors, and many other participating bodies. The said report was prepared in accordance with the "GRI Standards -Comprehensive Option" and assured by an independent certifying agency. The Company has also consistently issued its Business Responsibility Report as part of Annual Report since year 2012-13 disclosing its performance with respect to various Business Responsibility principles.

Company''s continued endeavours towards improving productivity and efficiency of all processes, equipment and systems as well optimisation measures have made it one of the most efficient players in terms of energy consumption and resource utilisation. With sustained efforts towards greening its operations, the Company has been able to keep its direct CO2 emission intensity at one of the lowest levels in the cement industry.

10. CORPORATE GOVERNANCE

11. BUSINESS RESPONSIBILITY REPORTING

12. CORPORATE SOCIAL RESPONSIBILITY

As part of its triple bottom-line approach to its business, Company has always considered the community as its key stakeholder. It believes that the community around its operations should also grow and prosper in the same manner as does its own business. Accordingly, Corporate Social Responsibility is an integral part of the Company''s business philosophy. In order to oversee all its CSR initiatives and activities, the Company has constituted a Board level Committee - "Corporate Social and Business Responsibility Committee" (CSBR Committee). The major thrust areas of the Company include healthcare, education, women empowerment, infrastructure support, integrated rural development, etc. which are aligned to the areas specified under Schedule VII to the Companies Act, 2013. The Annual Report on CSR activities of FY 2020-21 with requisite details in the specified format as required under Companies (Corporate Social Responsibility Policy) Rules, 2014 (as amended) is enclosed at Annexure-2 and forms part of this report. The CSR Policy of the Company may be accessed on website of the Company at link https://www.shreecement.com/uploads/cleanupload/ csr-policy.pdf.

13. SUBSIDIARY COMPANIES

The Company has following subsidiaries:

SN	Name of Subsidiaries	Nature of Interest
1.	Shree Global FZE, Jebel Ali Free Zone, Emirate of Dubai, U.A.E.
2.	Raipur Handling and Infrastructure Private Limited, Baloda Bazar, Chhattisgarh
3.	Shree Enterprises Management Ltd, Dubai International Financial Centre, Emirate of Dubai, U.A.E.
4.	Shree International Holding Ltd, Dubai International Financial Centre, Emirate of Dubai, U.A.E.	Step-down Subsidiaries
5.	Union Cement Company, PrJSC, Emirate of Ras- Al-Khaimah, U.A.E.
6.	Union Cement Norcem Co. Ltd. LLC, Emirate of Ras-Al-Khaimah, U.A.E.
7	Shree Cement East Bengal Foundation	Subsidiary Company (Incorporated under Section 8 of the Companies Act, 2013)

As required under Section 129(3) of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014, Statement showing the salient features of the financial statements of the Subsidiary Companies in Form AOC-1, forms part of the Consolidated Financial Statements of Company.

14. CONSOLIDATED FINANCIAL STATEMENTS

The Consolidated Financial Statements of the Company are prepared as required in terms of provisions of Companies Act, 2013 and Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (as amended) by following the applicable Accounting Standards notified by the Ministry of Corporate Affairs and forms part of the Annual Report.

15. DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to Section 134(5) of the Companies Act, 2013, the Board of Directors, to the best of their knowledge and belief and according to the information and explanations obtained by them, state that:

â¢ In the preparation of the annual accounts for the year ended March 31, 2021 the applicable accounting standards have been followed and there are no material departures from the same;

â¢ They have selected such accounting policies, judgments and estimates that are reasonable and prudent and have applied them consistently so as to give a true and fair view of the state of affairs of the company as at March 31,2021 and of the statement of Profit and Loss as well as Cash Flow of the company for the year ended on that date;

â¢ The annual accounts have been prepared on a going concern basis;

â¢ Necessary internal financial controls have been laid down by the Company and the same are commensurate with its size of operations and that they are adequate and were operating effectively; and

â¢ Proper systems have been devised to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

16. PERFORMANCE EVALUATION OF BOARD,ITS COMMITTEES & INDIVIDUAL DIRECTORS

In terms of requirements of Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (as amended) and provisions of Companies Act, 2013, Nomination cum Remuneration Committee of the Board of Directors of the Company specified the manner for effective evaluation of performance of Board, its Committees and Individual Directors. Based on the same, the Board carried out annual evaluation of its own performance, performance of its Committees, Individual Directors including Independent Directors during the year. Company had adopted the evaluation parameters as suggested by the Institute of Company Secretaries of India and Securities and Exchange Board of India with suitable changes from Company''s perspective. The performance of the Board was evaluated by the Board on the basis of criteria such as Board composition and structure, effectiveness of Board processes, information flow to Board, functioning of the Board, etc. The performance of Committees was evaluated by the Board on the basis of criteria such as composition of Committees, effectiveness of Committee working, independence, etc. The Board evaluated the performance of individual Director on the basis of criteria such as attendance and

contribution of Director at Board/Committee Meetings, adherence to ethical standards and code of conduct of the Company, inter-personal relations with other Directors, meaningful and constructive contribution and inputs in the Board/ Committee meetings, etc.

For the above evaluation, the Board members completed questionnaires providing feedback on different parameters as already stated above including on performance of Board / Committees / Directors, engagement levels, independence of judgment and other criteria. This is followed with review and discussions at the level of Board. The results of evaluation showed high level of commitment and engagement of Board, its various committees and working directors.

Company had appointed an External Facilitator for the purpose of carrying out the performance evaluation in a fair and transparent manner.

17. DIRECTORS AND KEY MANAGERIAL PERSONNEL

Director retiring by rotation - In accordance with the provisions of the Companies Act, 2013 and Article 112 of the Articles of Association of the Company, Shri B. G. Bangur (DIN: 00244196), Director of the Company will retire by rotation in the ensuing Annual General Meeting and being eligible, offers himself for re-appointment. Item seeking approval of members for the same is included in the Notice convening the 42^nd Annual General Meeting (AGM). The Board recommends the re-appointment of Shri B. G. Bangur.

Key Managerial Personnel - Shri H. M. Bangur (DIN: 00244329) was re-appointed as Managing Director of the Company for a period of 5 years

from April 1, 2016. His tenure as Managing Directors completed on March 31, 2021. The Board of Directors of the Company in its meeting held on January 30, 2021, on the recommendation of Nomination cum Remuneration Committee and after evaluating his performance and considering the Company''s growth under his stewardship, approved his reappointment as Managing Director of the Company for five years w.e.f. April 1, 2021 subject to approval of the members.

Profile and other information of the aforesaid Directors, as required under Regulation 36 of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (as amended) and Secretarial Standard - 2 forms part of the Notice convening the 42^nd Annual General Meeting.

Independent Directors - During the year under review, Shri Sanjiv Krishnaji Shelgikar (DIN: 00094311) was re-appointed as Independent Director for second term of 5 years w.e.f. August 5, 2020.

18. FAMILIARISATION PROGRAMME FOR INDEPENDENT DIRECTORS

In order to acquaint the new directors with the Company, a detailed presentation is given to them at the time of their appointment which covers their role, duties and responsibilities, Company''s strategy, business model, operations, markets, organisation structure, products, etc. A detailed presentation along similar lines is sent to existing Independent Directors every year to keep them apprised of the above details.

operations. The details of such familiarisation programmes for Independent Directors are posted on the website of the Company and can be accessed at link https://www.shreecement.com/ investors/shareholder-information.

19. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS / OUTGO

The particulars relating to conservation of energy, technology absorption, foreign exchange earnings and outgo, as required to be disclosed under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is set out at Annexure - 3 which forms part of this report.

20. PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES

In terms of the provisions of Section 197(12) of the Companies Act, 2013 read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel)

Rules, 2014, a statement showing the names of employees and other particulars of the top ten employees and employees drawing remuneration in excess of the limits as provided in the said rules are set out in the Board''s Report as an addendum thereto. However, in terms of provisions of the first proviso to Section 136(1) of the Companies Act, 2013, the Annual Report is being sent to the members of the Company excluding the aforesaid information. The said information is available for inspection at the Registered Office of the Company during working hours and any member interested in obtaining such information may write to the Company Secretary and the same will be furnished on request.

21. AUDITORSI. Statutory Auditors

M/s. Gupta & Dua, Chartered Accountants (Firm Registration No. 003849N) were appointed as Statutory Auditors of the Company, in the Annual General Meeting held on July 31, 2017, for a consecutive term of five years from the conclusion of 38^thAnnual General Meeting till the Conclusion

of 43^rd Annual General Meeting. They have given their report on the Annual Financial Statements for Financial Year 2020-21.

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

II. Secretarial Auditors

The Board had appointed M/s. P. Pincha & Associates, Company Secretaries as Secretarial Auditor of the Company to conduct Secretarial Audit for the Financial Year 2020-21. They have submitted their report in prescribed format and the same is enclosed at Annexure - 5. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.

III. Cost Auditors

In terms of the provisions of Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Amendment Rules, 2014, the Board of Directors of the Company appointed M/s. K.

G. Goyal & Associates, Cost Accountants, Jaipur (Firm Registration No. 00024) to conduct the cost audit for the financial year ending March 31, 2022 at a remuneration as stated in the Notice convening the 42^ndAnnual General Meeting of the members. As required under the Companies Act, 2013, the remuneration payable to cost auditors has to be placed before the Members at a general meeting for ratification. Hence, a resolution seeking ratification of remuneration by the Members, payable to the Cost Auditors forms part of the Notice of the ensuing 42^nd Annual General Meeting.

The Cost Auditors are in process of conducting the audit of cost records for year 2020-21 and shall submit their report in due course.

22. OTHER DISCLOSURES(a) Composition of Audit and Risk

Management Committee: The Committee comprises of Shri O. P. Setia as Chairman,

Shri R. L. Gaggar, Dr. Y. K. Alagh, Shri Nitin Desai, Shri Shreekant Somany and Shri Sanjiv Krishnaji Shelgikar as other Members. More details are given in the Corporate Governance Report. All the recommendations made by the Audit and Risk Management Committee were accepted by the Board.

(b) Details of Meetings of Board and its Committees: The Board of Directors of your Company met 4 times during the year to deliberate on various matters. The meetings were held on May 8, 2020, August 10, 2020, November 11, 2020 and January 30, 2021. Further, details are provided in the Corporate Governance Report forming part of this Annual Report. The intervening gap between the meetings was within the period prescribed under the Companies Act, 2013 and the Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (as amended).

12 of the Companies (Management and Administration) Rules, 2014, the Annual Return of the Company is available on the website of the Company at link https://www. shreecement.com/investors/shareholder-information.

(d) Particulars of Loans, Guarantees or Investments: Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Act read with the Companies (Meetings of Board and its Powers) Rules, 2014 are given in Notes to the standalone financial statements.

(e) Particulars of Contracts or Arrangements with Related Parties: All Related Party Transactions during the financial year 2020-21 were on arm''s length basis and in ordinary course of business. They were all in compliance with the applicable provisions of the Companies Act, 2013 and the Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (as amended). All such transactions are placed before the Audit and Risk Management Committee for review/ approval. The necessary omnibus approvals have been obtained from Audit and Risk Management Committee wherever required. There were no material Related Party Contract/Arrangement/Transactions made by the Company during the year that would have required Shareholders'' approval under provisions of Section 188 of the Companies Act, 2013 or of the Securities Exchange

(l) Maintenance of Cost Records: Company is required to maintain cost records as specified by the Central Government under subsection (1) of section 148 of the Companies Act, 2013, accordingly such accounts and records are made and maintained by the Company.

(m) Compliance with Secretarial Standards:

Company has complied with the Secretarial Standards issued by Institute of Companies Secretaries of India (ICSI) on Board Meetings (SS- 1) and General Meetings (SS-2).

23. ACKNOWLEDGEMENT

The Directors take this opportunity to express their deep sense of gratitude to its lenders,

Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (as amended). The Company has adopted a Related Party Transactions Policy duly approved by the Board, which is uploaded on the Company''s website & may be accessed at link https://www.shreecement.com/uploads/ cleanupload/related-party-transaction-policy. pdf.

Name of the Entity	% Holding in the Company	Amount (? Cr.)	Nature of Transaction
Shree Capital	24.90%	0.27	Payment of
Services Ltd.			Office Rent

(g) Vigil Mechanism/ Whistle Blower Policy:

The Company has adopted a whistle blower policy and has established the necessary vigil mechanism for employees and Directors to report concerns about unethical behaviour. The policy provides for adequate safeguards against victimisation of employees who avail of the mechanism and also provides for direct access to the Chairman of the Audit and Risk Management Committee. The whistle blower policy may be accessed on the website of the Company at link https://www.shreecement. com/uploads/cleanupload/whistleblower-policy.pdf.

the industry. Its remuneration policy is

therefore designed to achieve this vision.

The policy has been approved by the Board on the recommendation of Nomination cum Remuneration Committee. The policy is applicable to Directors, Key Managerial Personnel and other employees. The policy provides that while nominating appointment of a Director, the Nomination cum Remuneration Committee shall consider the level and composition of remuneration which is reasonable and sufficient to attract, retain and motivate the Directors for delivering high performance. The Remuneration Policy can be accessed on the website of the Company at link https://www.shreecement.com/ uploads/cleanupload/remuneration-policy. pdf.

(i) Policy on Prevention, Prohibition and Redressal of Sexual Harassment at Workplace: The Company has complied with the provisions of the constitution of the Internal Committee under the Sexual Harassment of Women at the Workplace (Prevention, Prohibition and Redressal) Act, 2013 and has adopted a Policy on Prevention, Prohibition and Redressal of Sexual Harassment at the Workplace, in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules made thereunder. Company has formed an ''Internal Complaints Committee'' for prevention & redressal of sexual harassment at workplace. The Committee has four members and is chaired by a senior woman member of the organisation. The Company has not received any complaint of sexual harassment during the financial year 2020-21.

Central and State Governments and the local authorities for their continued co-operation and support. They also would like to place on record their sincere appreciation for the commitment, hard work and high engagement level of every member of the Shree family without which the exemplary performance of the Company year after year, would not have been possible. The Directors would also like to thank various stakeholders of the Company including customers, dealers, supplies, transporters, advisors, local community, etc. for their continued committed engagement with the Company. The Directors would also like to thank the Members of the Company for confidence and trust reposed in them.

Mar 31, 2019

Dear Members,

The Directors take pleasure in presenting the 40^th Annual Report together with the Audited Financial Statements for the year ended 31^st March, 2019. The Management Discussion and Analysis has also been incorporated into this report.

1. FINANCIAL PERFORMANCE

A brief of financial performance for the year gone by and its comparison with previous year is given below: -

(Rs. in Crore)

Particulars	Standalone		Consolidated
	2018-19	2017-18	2018-19	2017-18
Revenue from Operations	11,722.00	10,159.53	12,554.65	10,159.53
Less :- Excise Duty	-	326.43	-	326.43
Net Revenue from Operations	11,722.00	9,833.10	12,554.65	9,833.10
Other Income	245.40	389.05	249.76	389.05
Total Income	11,967.40	10,222.15	12,804.41	10,222.15
Profit Before Interest, Depreciation and Taxes	2,898.22	2,861.83	3,043.44	2,861.80
Finance Costs	246.98	135.27	247.86	135.27
Depreciation and amortization expenses	1,391.68	899.40	1,471.81	899.40
Exceptional items	178.13	-	178.13	-
Profit Before Tax	1,081.43	1,827.16	1,145.64	1,827.13
Tax Expense	130.38	442.98	130.59	442.98
Profit After Tax	951.05	1,384.18	1,015.05	1,384.15

2. DIVIDEND AND RESERVE

- During the year 2018-19, Company has paid Interim Dividend of Rs. 25/- per share.

- Apart from above, a Final Dividend of Rs. 35/- per share for 2018-19 has been recommended by the Board, which will be paid after approval of Members in ensuing Annual General Meeting (AGM).

- Total dividend payment thus works out to Rs. 60/per share for year 2018-19 as against Rs. 50/- per share for the year 2017-18.

- Total dividend relating to the year 2018-19 amounts to Rs. 251.98 crore (including dividend distribution tax of Rs. 42.96 crore) as against Rs. 209.84 crore (including dividend distribution tax of Rs. 35.66 crore) for the year 2017-18.

- During the year an amount of Rs. 200 crores was transferred to General Reserves.

The Board of Directors of the Company in line with SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 had approved Dividend Distribution Policy on 12^th August, 2016. The Policy is uploaded on Company''s website and can be accessed at the link https://www.shreecement.com/pdf/dividend-policy.pdf.

3. MANAGEMENT OUTLOOK OF MACRO ECONOMY AND INDUSTRY

I. Indian Economy-Developments and Outlook

The Indian economy is likely to record growth rate of 7% during 2018-19 as per advance estimates of the Central Statistics Office (CSO). This is the lowest during last 5 years. The drop in GDP growth is mainly due to sharp decline from 5% to around 2.7% in the agriculture sector (especially during second half of 2018-19). The Agricultural and Rural sectors are going through a difficult period. While service sector is also expected to show mild moderation from 8.1% to 7.4% levels, industry and manufacturing sector is likely to show good improvement in growth to 7.7% from 5.9% in last year.

CPI headline inflation at around 3.5% during the year has also remained stagnant at the similar levels observed last year. Importantly it stayed within the 4% target set by RBI. The benign inflation has given room to RBI which cut its policy rates twice recently to give much needed impetus to the economy. As a result of easing rates and overall pick up in industrial, retail and commercial segments, credit off-take from the banking system is growing at a buoyant pace. This has helped push industrial growth which, as measured by Index of Industrial Production (IIP) is expected to clock around 4.5% level continuing on 4.4% growth witnessed in the previous year.

India continues to be one of the fast growing economies of the world. In recent years, growth has largely been consumption driven as investment has fallen on the back of high leverage in the corporate sector and high non-performing assets (NPA) in the banking sector. It appears however that, declining investment has bottomed out with fixed investment in 2018-19 increasing in proportion to GDP. Considering slackening global economic growth and consequently FDI/FPI inflows in India are expected to be better. As such, easy monetary policy is expected to continue. Accordingly, Indian economy is expected to witness rebound in growth in its industrial and service sectors. Agriculture sector economy is also expected to perform better on account of expectation of normal monsoon with well- distributed rainfall as well as Rs. 6,000/- p.a. income support for marginal farmers announced by Government of India. It is widely expected that there shall be a surge of reforms after the new Government come into place in June which shall boost the economy. The outlook for Indian economy for 2019-20, therefore, looks positive.

In 2018-19, Indian rupee suffered because of crude price shock, and conditions exacerbated as recovery in some advanced economies caused faster investment outflows. Crude oil price has again started showing rising trend. This may also lead to fast depreciation in Indian rupee. These are the major risks to India''s current account and overall economic growth.

II. Cement Industry - Development and Outlook

Indian cement industry witnessed a remarkable growth of approx. 13% during 2018-19 on the back of 6.3% recorded in 2017-18. The demand growth has taken Cement production during 201819 to around 337 million tons. The strong cement demand is driven by higher infrastructure spend, affordable housing and pick-up in rural demand. The construction of houses under government''s flagship scheme, Pradhan Mantri Awaas Yojana (Housing for all) showed impressive progress resulting in good demand for cement. The Infrastructure activities especially in roads and metro projects have also been a big cement demand driver. In fact, with Government''s infrastructure push and launch of several mega infrastructure projects, cement demand is seeing a gradual shift from housing towards infra. This is leading to increase in shares of cement demand from infra sector in overall demand. Upward trend observed in urban residential and commercial realty led by accelerated urbanization, rapid migration and the rise in population of aspiring youth in major cities of the country is also helping growth in cement demand.

Government schemes such as PM-KISAN and overall high minimum support prices for major crops coupled with prospects of normal monsoon are expected to drive demand in rural areas. Government''s continued thrust on affordable housing and infrastructure developments projects are likely to aid cement demand growth. Outlook for cement sector thus looks positive.

III. Power Sector - Development and Outlook Country has large power generation capacity which is far excess of the capacity required to meet the demand. Though Government of India''s focus on attaining ''Power for all'' has helped increase in demand for power in the country, excess capacity is leading to many power plants running on low capacity utilization levels. This has caused stress in the sector and debt repayment issues. While new capacity addition in conventional power space has slowed now, the renewable energy space, because of drop in capital costs and government''s push, is witnessing good traction.

During 2018-19, because of surplus capacity in the country, prices for power continued to remain depressed although in some months prices did witness upward trend mainly because of coal availability issues, poor rains, elections etc. The market for electricity trading in India is dependent on health of State distribution Companies. As most of these Companies have poor financials, they don''t go for power procurement if prices are high. The Sector is therefore, expected to continue to reel with uncertainty in terms of both power procurement and prices.

4. STATE OF THE COMPANY AFFAIRS

Brief summary of the Company''s standalone performance is as under:

Particulars		Unit	2018-19	2017-18	/-%
Cement Production		Million Tons	25.06	22.20	12.88%
Cement & Clinker Sale		Million Tons	25.86	22.53	14.78%
Power Generation (Net)		Million Units	3,253.62	2,562.16	26.99%
Power Sale		Million Units	1,678.20	1,196.53	40.26%
Revenues
Cement (Net of Excise/GST)		Rs. Crore	10,920.12	9,400.09	16.17%
Power		Rs. Crore	801.88	433.01	85.19%
Total Revenue		Rs. Crore	11,722.00	9,833.10	19.21%
Operating	- Cement	Rs. Crore	2,471.26	2,458.35	0.53%
Profit	- Power	Rs. Crore	181.56	14.43	1,158.21%
(EBIDTA)	- Other Income	Rs. Crore	245.40	389.05	(36.92)%
	- Total	Rs. Crore	2,898.22	2,861.83	1.27%
EBIDTA Margin		%	24.72%	29.10%	-
Finance Costs		Rs. Crore	246.98	135.27	82.58%
Depreciation and amortization expenses		Rs. Crore	1,391.68	899.40	54.73%
Exceptional items		Rs. Crore	178.13	-	-
Profit Before Tax		Rs. Crore	1,081.43	1,827.16	(40.81)%
Tax Expense		Rs. Crore	130.38	442.98	(70.57)%
Net Profit		Rs. Crore	951.05	1,384.18	(31.29)%

I. Cement Business

- Cement and Clinker Sale volume were up at 25.86 Million Tons recording a growth of 14.78% over previous year. This was mainly because of significant strides made by the Company in Eastern India market and new capacity addition in southern market.

- Net cement price realizations marginally improved during the year. The increase in cost however, outpaced the increased realizations this year as well.

- Net Cement revenue jumped 16.17% to Rs. 10,920.12 Crore on the back of increased sale volumes as well as better price realizations.

- Increase in prices of Petcoke and Imported Coal resulted in increase in power & fuel cost. Led by its consistent efforts towards route optimization and other improvement measures, Logistics cost was contained marginally despite increase in diesel and other input costs.

II. Power Business

Performance of Power business improved during the year as a result of improved sales volumes as well as better price realization. Overall power sale volumes increased to 1,678.20 Million Units in 2018-19 as against 1,196.53 Million Units in 2017-18. This together with better price realization, resulted in revenue from Power Sale (including income from power trading) going up to Rs. 801.88 Crore in 2018-19 as against Rs. 433.01 Crore in 2017-18. EBITDA of Power Business jumped to Rs. 181.56 Crore in 2018-19 as against Rs. 14.43 Crore in 2017-18.

III. Net Profit

During the year, net profit was impacted due to (a) fair value loss of Rs. 178.13 crore booked in respect of investment in preference shares of IL&FS group upon same being downgraded by rating agencies to junk status and (b) Mark-to-Market loss of Rs. 134.23 crore on External Commercial Borrowing (ECB) taken by the Company.

IV. Key Financial Ratios

Key financial ratios of the Company showing financial performance are as under:

Particulars	2018-19	2017-18	% Change	Remarks
Operating Profit Margin (%)	24.72%	29.10%	(15.05)%	No significant change
Net Profit Margin (%)	8.11%	14.08%	(42.40)%	Higher depreciation due to new projects completed during the year
Return on Net Worth (%)	9.61%	16.47%	(41.65)%
Interest Coverage Ratio	11.73	21.16	(44.57)%	Due to increase in Finance Cost in view of interest expenses on External Commercial Borrowings
Debtors Turnover (Days)	22.81	17.05	33.78%	Higher due to increase in debtors related to power sales
Inventory Turnover (Days)	49.48	58.24	(15.04)%	No significant change
Current Ratio (Times)	2.01	1.92	4.69%	No significant change
Debt-Equity Ratio (Times)	0.26	0.26	-	No change

V. New / Expansion Projects

Company completed following projects during the year 2018-19:-

- Integrated Cement Plant having capacity of 3.0 MTPA at Kodla in Kalaburagi (erstwhile Gulbarga) District of Karnataka.

- Commissioned balance 6.3 MW (3 Wind Towers) out of 21 MW Wind Power Plant at Village Kustagi, District Koppal in Karnataka.

Further, Company has following on-going projects:-

- Clinker grinding unit of 2.5 MTPA at Seraikela-Kharsawan District in Jharkhand which is expected to be operationalized by June, 2019.

- Clinker grinding unit of 3.0 MTPA at Athagarh Tehsil in Cuttack District of Odisha which is planned to be completed in first half of FY 19-20.

- Setting up of 3.0 MTPA Clinker Grinding Unit in Patas District of Maharashtra which is expected to be completed in first half of FY 2021.

VI. Acquisitions and Mergers

(i) Union Cement Company

As reported last year, Company has completed acquisition of Union Cement Company (UCC), Ras-Al-Khaimah, United Arab Emirates on 11^th July, 2018 for an Enterprise Value of USD 305.24 Million. Company now holds a majority stake of 97.61%. The acquisition was made through Wholly Owned Step-down Subsidiary Company viz. Shree International Holding Ltd., incorporated in U.A.E. Salient features of UCC''s consolidated financial performance since the date of acquisition by the Company till 31^st March 2019 is as under: -

Particulars	Amount in AED Million	Amount in Rs. Crore
Net Turnover	420.93	813.80
EBIDTA	72.76	140.56
Net Profit*	35.95	69.50
Net Worth (As at 31.3.2019)*	980.86	1,847.46

* Excluding non-controlling interest

UCC has undertaken several process improvement measures to increase the productivity of its Kiln, Cement Mills, Waste Heat Recovery Power Plant and other equipment as well as improve its power and fuel consumption levels. UCC has also undertaken steps to enhance the capacity of existing Waste Heat Recovery Plant. All these measures will help in enhancing revenues and rationalizing costs thereby contributing to increased profitability.

(ii) Raipur Handling and Infrastructure Private Limited

Company also acquired Raipur Handling and Infrastructure Private Limited (RHIPL) for an aggregate consideration of Rs. 59 crore. RHIPL is engaged in operating a Railway Siding as a Private Freight Terminal near Company''s cement plant at Baloda Bazar in Chhattisgarh. This terminal will provide dedicated railway connectivity to the Company for transporting its cement, clinker and input materials through railways. RHIPL operates the terminal for other customers also.

5. RISK MANAGEMENT

At SCL, risk management is considered as a strategic activity as our plans and measures to manage risks generates opportunities as well. Identification and management of risk is systematically achieved using an Enterprise Risk Management (ERM) system under which the Board is responsible for overseeing the overall risk management framework of the Company. The Audit and Risk Management Committee of Board, keeps an eye on execution of the risk management plan of the Company and advises the management on strengthening mitigating measures wherever required. The actual identification, assessment and mitigation of risks are however done by key executives of the Company in a systematic manner through regular meetings and dialogue and engagement / consultation with relevant stakeholders. The key risks identified by the Company and their mitigation measures are as under:

a) Over-Capacity in the Industry - Continued over capacity in the industry pose risk of underutilization of production capacities and prices falling to levels which are non-remunerative levels causing losses. For this purpose, Company has invested in building customer loyalty through consistent high quality of its products, faster delivery to consumers and continued customer engagement through its dedicated marketing teams. It also keeps adding capacity in markets where demand-supply conditions are considered to be relatively favourable.

b) Availability of Limestone and other resources- Limestone is the key raw material for cement production and its availability for existing and future plant requirements is essential. With limited reserves at existing mines and acquisition of new limestone mines being uncertain due to regulatory and competition issues, conservation of limestone is quite important. Company has been making all efforts to optimize its usage, thereby, conserving the deposits and enhancing their life. To conserve the high grade limestone, Company is mixing the same with marginal grade limestone and using it for clinker production. Company''s emphasis on enhanced production of blended cement has also helped conserve limestone significantly. Additionally, Company continuously undertakes exploratory activities at its existing deposits areas to find more reserves.

Company''s plants in Rajasthan are located in water deficient areas and as such conserving water becomes very important. Realizing this, Company installed Air Cooled Condensers (ACC) in all its power plants which though involve additional capital expenditure, have helped Company reduce water consumption significantly. Company has installed Waste Heat Recovery Systems in its cement plants thereby, eliminating the need for cooling of waste hot gases and thus, saving water. Water harvesting reservoirs have also been constructed within plant and mines area.

c) Fuel Cost - Company sources fuel from open market and hence, is exposed to volatility of market prices of the fuel. Company has deployed multi-fuel usage strategy as well as state of the art technology, which allows it to use different fuels and use the most economical fuel among a basket of different fuels as per prevailing trends in the market. Company participated in e-auction and secured coal linkage for partly meeting the fuel requirements of its Raipur, Chhattisgarh plant. Additionally, to reduce reliance on conventional fuel for its captive thermal power plant, Company has extensively invested in Waste Heat Recovery Power Plants thereby, cushioned itself from fuel price volatility to that extent. Additionally, to reduce reliability on conventional fuel, company has commissioned 21 MW Captive Wind Power Plant in Karnataka.

d) Power Prices - Company sells its surplus power under short term contracts. This is because; it does not have any long term arrangement for coal. This exposes it to price volatility in this segment. The Company is managing this risk by ensuring advance sale contracts for part of the capacity and keeping the balance for running the same with market volatility.

e) Cyber Security and Disaster Recovery -Considering the increasing importance of digitisation to business, majority of businesses activities of the Company have been seeing digital transformations, whether related to logistics, marketing or manufacturing. Significant advantages of digitisation reflect in faster customer servicing, enhanced process efficiency, better controls and speedy decision making. Digitisation is however fraught with risk of cyber security and disaster recovery. This could be misuse of hardware and software, interference, loss, unauthorised access, modification and disclosure. Company has taken necessary measures for better monitoring & control and more effective regulatory compliance to mitigate any risks arising due to digitisation.

f) Climate Change - Global warming and consequent impact in the form of erratic and frequent climate changes has emerged as a major risk across globe. This impacts our operations also as cement manufacturing releases CO₂ due to calcination process and combustion of fuels. Efforts to address climate change by reducing emissions of greenhouse gases (GHG) through national, state and regional laws and regulations as well as international agreements will bring about various regulatory requirements affecting our operations and creates uncertainties for our business. New legislative or regulatory controls may pose risks which could include costs to purchase allowances or credits to meet GHG emission caps, costs required to procure advanced equipment to reduce emissions to comply with GHG limits or required technological standards or higher production costs. In addition, physical risks arising from extreme weather or high temperatures may impact any manufacturing sector in terms of property damage and disruption to operations. We have integrated sustainability as core to our operations and are thus prepared to meet new regulatory and legislative requirements resulting from climate change risks.

6. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

In order to ensure orderly and efficient conduct of business, Company''s management has put in place necessary internal control systems commensurate with its business requirements, scale of operations, geographical spread and applicable statutes. The Company has an in-house Internal Audit department manned by qualified professionals and an external firm acting as independent internal auditors that reviews internal controls and operating systems and procedures on a regular basis. Company''s internal control systems include policies and procedures, IT systems, delegation of authority, segregation of duties, internal audit and review framework etc. Company has designed the necessary internal financial controls and systems with regard to adherence to company''s policies, safeguarding of its assets, prevention and detection of frauds and errors, accuracy and completeness of the accounting records and timely preparation of reliable financial information. Company keeps documented Standard Operating Procedures (SOPs) for all its major operations. Company has been expanding into different geographies which needed to be appropriately covered in the SOPs to capture their specific features and, therefore, a complete overhaul of the SOP''s was carried out during FY 2018-19. The compliance to these controls and systems including SOPs are periodically reviewed by the Internal Audit function and exceptions are reported. All material audit observations and follow up actions thereon are reported to the Audit and Risk Management Committee. The Committee holds regular discussions with the auditors to ensure adequacy and effectiveness of the internal control systems and monitors implementation of audit recommendations.

7. HUMAN RESOURCES/INDUSTRIAL RELATIONS

a) Employee Engagement and Talent Management - Building a motivated and performance oriented team or institution starts with a founder. A founder also acts as a culture-creator of his team. But being a founder doesn''t mean starting a new company or enterprise. He could be one who is joining a company that has existed for decades. At Shree, we nurture young talent through empowerment and trust in their capabilities to undertake challenging roles and tasks. This in turn builds a team of young entrepreneurs or founders who can take leadership position within the Company. As Company has been expanding fast, they take the position of being a founder for the new unit or new plant or new geography to undertake the task of building a committed and motivated team. The unique Shree culture and style of working is put on ground from day one. It is no surprise that because of this unique measure, Company has been able to deliver almost all its project before their targeted timelines.

Building on the practices of all these years, this year was focused on Communication, Inclusion and Leadership development. Research says that true assimilation of an employee happens within the first 90 days of joining and, therefore, focus of HR team is to create a delightful joining and on-boarding experience. For this purpose, Company initiated a feedback for New Joiners which is done within their first 90 days. In this, new joiners get an opportunity to interact with the senior leadership team and share their experiences and areas which they find the Company needs to work on. This has also led to building a communication channel that reinforces our culture of transparency and approachable management.

Company''s focus is to make sure that every employee has access to great opportunities, and that they feel that they are making a meaningful impact and are contributing to the good of all stakeholders. This requires regular training and development opportunities for all the employees to upgrade their skills and capabilities. Skill Development is therefore, a constant endeavour across the Company and has been a focus area for the Human Resource team too. Through the years we have also realised that home grown leaders have been more successful, therefore we have been working internally and with external partners to develop a leadership pipeline for the Company. Unique Shree family culture acts as a bond amongst employees where they feel homely while working within the organization. Provision of required recreation and other facilities at all our sites and regular get-togethers with family members together with sports and cultural events ensures work life balance for the employees. Shree also believes in giving equal opportunities to all. As part of this ethos, Women''s Day celebration that was initiated last year on March 8^th was institutionalised this year as a practice. The highlight of Women''s Day celebration is the opportunity to interact with the company''s leadership team.

b) Occupational Health and Safety - Health and safety is at the top of Company''s priority areas. Company has built a robust safety management system based on the globally recognised and practiced OHSAS 18001 standard. We have established a structured hazard identification and risk assessment process based on the globally practiced ''Plan, Do, Check and Act'' cycle. The process helps us identify potential risks which could have resulted in production disruptions, litigation and liabilities.

In order to provide our employees with access to quality and essential healthcare services, we have established ''Wellness Management Centers (WMC)'' at all the locations. WMCs are equipped with qualified doctors and modern facilities.

Employee health check-ups are conducted annually with various health care services provided to the employees and their families. All contract workmen are also covered under WMC services where they are provided health care services customized to their nature of work.

We also organized blood donation camps across our locations. Health talks and lectures by experts and specialists were also organized to propagate awareness on chronic and lifestyle diseases for the benefit of employees and their families.

Safety committees have been formed at all manufacturing units with equal representation from both management and non-management categories. These committees play a pivotal role in achieving the objective of "safety first" by undertaking assessment of safety issues on an ongoing basis and implementing suitable initiatives and programs for the same. Since most of the workers deployed are from the communities around the factory, it was quintessential for the committee to devise an approach which could transform the way workers looked at safety. The committee periodically organized trainings, mentoring and coaching with the help of local supervisors who brought about a positive change to the workers'' safety performance. Through such interactions, it became easier for the committees to identify hazards and minimize the recurrence of the same.

All our safety initiatives and employee engagement programs have been designed to reach this goal no fatalities. Through a regular internal audit protocol, we assess the overall safety performance and examine the existing procedures, systems and control measures for fire & safety hazards. Observations and recommendations were implemented by concerned departments within set timelines. As part of the process, monthly safety performance of all grinding units were reviewed and discussed with all safety professionals for implementation of common safety system and practices.

During the year Auditors from National Safety Council, Mumbai conducted detailed audit of the Safety Management System at Company''s Thermal Power Plants at Beawar and Ras and expressed its satisfaction on the same. Additionally, Surveillance Audit of Social Accountability Management System (SA 8000: 2014) of certified units was conducted by a team of auditors from M/s. BSI, New Delhi.

c) Industrial Relations - Employee Relations remained cordial during the year. This has enabled Company to build healthy relationship and resolve issues through dialogue and discussions.

Total number of employees as on 31^st March, 2019 were 6,299.

8. SUSTAINABILITY

Company perceives sustainability and growth as symphonic musical sounds which should always be in harmony with each other for the benefit of present as well as future generations. Thus, all our operations and project activities are carried out keeping a balance between unbounded economic growth and sustainability. Our operational strategy is built on a long term commitment to experiment and implement new ideas for improving efficiencies and minimizing the use of input resources. Our continued endeavours towards improving productivity and efficiency of all processes, equipment and systems as well optimization measures have made the Company as one of the most efficient player in terms of energy consumption and resource utilization. As a result of sustained efforts towards greening our operations, our direct CO emission intensity is one of the lowest in the cement industry. During the year, the initiatives on sustainability continued with improved performance on several parameters of operations. Some of the initiatives taken on the environment front during the year were as under:-

a) Power Generation from Renewable Resources -

Company continues to be the leading cement Company in India in terms of capacity of Waste Heat Recovery Power Plants (WHRPP) in the country. Its WHRPP capacity is the largest in World Cement Industry excluding China. In the month of April 2019, Company has further installed WHRPP at its Karnataka plant. Also, in terms of operational efficiency of WHRPP, Company is regarded as one of the best in the industry. This has helped Company in conserving fossil fuels and water, mitigating GHG emissions and controlling fugitive emission. With a view to further curtail its carbon footprint, Company has commissioned 21 MW Wind Power Plant in Karnataka. The power generated from the said plant is utilized for meeting power requirement of Company''s Cement plant in Karnataka.

b) Alternative Fuels and Raw Materials - In line with our goal to increase usage of alternative raw materials and fuels, we have stepped-up reuse of low grade limestone and quarry rejects in a cost effective manner. We have also been consciously undertaking ''co-processing'' activities so as to ''close the loop'' by reusing waste of other industries as raw materials for our cement production. This has helped us significantly reduce our environmental impacts and economic costs without compromising on our product''s quality and output.

c) Energy Conservation - Energy conservation and environment management is a focus area for the Company and is driven at every level of operations. As part of Perform, Achieve & Trade (PAT) Scheme of the Govt. of India, Company has overachieved its target (set under PAT Cycle I, 2012-15) of reducing its energy consumption and as a result Ministry has issued 86,117 (Nos) Energy saving certificates for Beawar and 72,140 (Nos) of Energy saving certificates (ESCerts) for Ras site. Company was also awarded the ''Best Performer'' award for energy saving under PAT Cycle I by Bureau of Energy Efficiency (BEE) for the Beawar and Ras units. Currently assessment of our performance under PAT Cycle II (2016-19) that covers our Beawar plant, Ras plant and 300 MW Shree Mega Power is going on and results are yet to be finalised. Shree Raipur Plant also covered under PAT Cycle III (2017-2020) for which assessment will be done in next year.

d) Conservation of Water - Water being a scarce and precious resource, finds utmost priority in the Company''s sustainability initiatives. Company''s investment in Air Cooled Condensers in all its Power Plants, though relatively most expensive, has been a major contributor towards conserving water. Its large capacity of Waste Heat Recovery power plants also helps it save water required in cooling hot gases in gas conditioning towers. It has been constructing rain water harvesting structures to reduce its water dependence. Adding to its continuous drive towards water conservation, during the year, it created rain water harvesting system at Karnataka plant with few more under development. This apart, Sewage Treatment Plants (STP) were installed for treatment of domestic waste water at different plant sites of the Company.

e) CDP disclosure - Shree Cement has been participating consistently in the Carbon Disclosure Project. It has been ranked ''B'' in CDP Climate Change Disclosure 2018. This is higher than Global Cement average of Ranks B(-), and higher than the Asia regional average Rank C.

f) Sustainability Reporting - During the year, Company released its 14^th annual corporate sustainability report titled "Embedding Harmonious Growth" focusing on balancing economic development with sustainability and exhibiting organizational performance on economic, environmental and social parameters -for the reporting period 2017-18. Report was prepared in accordance with the GRI Standards - Comprehensive Option.

During the year Company was awarded and recognised for its various initiatives towards sustainable development, a few which are as under:-

- Golden Peacock Award for Sustainability -2018:- The Award instituted by the Institute of Directors, New Delhi was delivered in recognition of Company''s efforts towards Environment Management, Natural Resource conservation, emission control, energy conservation etc.

- Corporate Governance & Sustainability Vision Award, 2019:- The Award was instituted by the Indian Chamber of Commerce and given in recognition of its overall governance, environmental, economic & social performance.

- 5 Star rating for Limestone Mines of the Company:- Limestone Mines of the Company at Ras (Nimbeti Limestone Mines) and Beawar (Sheopura - Kesarpura Limestone Mines) awarded with 5 Star Rating under Star Rating System for Sustainable Development formulated by Indian Bureau of Mines, Ministry of Mines, Govt. of India. These ratings were started three years back and Company has been awarded with Five Star Rating for both the mines consecutively for second year.

- Recognized as Second Fastest Growing Cement Company - Large Category under 3^rd Indian Cement Review Awards 2018: -

Company has been declared as the "Second Fastest Growing Cement Company - Large Category" under 3^rd Indian Cement Review Awards 2018 in recognition of its significant initiatives for enhancing its capacity, governance level, stakeholder engagement, environment improvement, alternative fuels & raw material utilization and sustainability practices.

- Supply Chain and Logistic Excellence (SCALE) Award 2018 by CII:- Company has been conferred on "Supply Chain & Logistics Excellence Award-2018" for logistic excellence among all cement companies. The award was instituted by Confederation of Indian Industry (CII), Chennai.

9. CORPORATE GOVERNANCE

Your Directors reaffirm their continued commitment to good corporate governance practices. During the year under review, Company was in compliance with the provisions relating to corporate governance as provided under the Listing Regulations. The compliance report is provided in the Corporate Governance section of this Annual Report. The Auditor''s Certificate on Corporate Governance is enclosed at Annexure - 1.

10. BUSINESS RESPONSIBILITY REPORTING

Company is also releasing Business Responsibility Report (BRR) as part of this Annual Report covering its compliances towards the Business Responsibility Principles enunciated by the Securities and Exchange Board of India as required under Regulation 34(2) (f) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

11. CORPORATE SOCIAL RESPONSIBILITY

As part of its triple bottom-line approach to its business, Company has always considered the community as its key stakeholder. It believes that the community around its operations should also grow and prosper in the same manner as does its own business. Accordingly, Corporate Social Responsibility is an integral part of the Company''s business. In order to oversee all its CSR initiatives and activities, the Company has constituted a Board level Committee -"Corporate Social and Business Responsibility Committee" (CSBR Committee). The major thrust areas of the Company include healthcare, education, women empowerment, infrastructure support, integrated rural development and conservation of natural resources. The Annual Report on CSR activities of FY 2018-19 with requisite details in the specified format as required under Companies (Corporate Social Responsibility Policy) Rules, 2014 is enclosed at Annexure - 2 and forms part of this report. The CSR Policy of the Company may be accessed on website of the Company at link https://www.shreecement.com/pdf/shree_csr_policy _final.pdf.

12. SUBSIDIARY COMPANIES

Company has following direct subsidiaries: -

Sl. No.	Direct Subsidiaries	Equity Stake
1.	Shree Global FZE, Jebel Ali Free Zone, Emirate of Dubai, United Arab Emirates	100% Wholly Owned Subsidiary (w.e.f. 7^th May, 2018)
2.	Raipur Handling and Infrastructure Private Limited, Baloda Bazar, Chhattisgarh	100% Wholly Owned Subsidiary (w.e.f. 14^th May, 2018)
3.	Shree Global Pte. Ltd., Singapore	100% Wholly Owned Subsidiary (Liquidated w.e.f. 11^th March, 2019)

Apart from above, during the year, following companies have become step-down subsidiaries of your company:-

- Shree Enterprises Management Ltd, Dubai International Financial Centre, Emirate of Dubai, United Arab Emirates

- Shree International Holding Ltd, Dubai International Financial Centre, Emirate of Dubai, United Arab Emirates

- Union Cement Company, PrJSC, Emirates of Ras-Al-Khaimah, United Arab Emirates

- Union Cement Norcem Co. Ltd. LLC, Emirates of Ras-Al-Khaimah, United Arab Emirates

The shareholders, who wish to receive a copy of Annual Accounts of the Subsidiary Companies, may request the Company Secretary for the same. As required under Section 129(3) of the Companies Act, 2013, Statement showing the salient features of the financial statements of the Subsidiary Companies in Form AOC-1, forms part of the Consolidated Financial Statements of Company. The policy for determining material subsidiaries as approved by the Board can be accessed on the website of the Company at link https://www.shreecement.com/pdf/Shree-material-subsidiary-policy.pdf.

13. CONSOLIDATED FINANCIAL STATEMENTS

The Consolidated Financial Statements of the Company are prepared as required in terms of provisions of Companies Act, 2013 and Listing Regulations by following the applicable Accounting Standards notified by the Ministry of Corporate Affairs and forms part of the Annual Report.

14. DIRECTORS'' RESPONSIBILITY STATEMENT

a) In the preparation of the annual accounts for the year ended 31^st March, 2019 the applicable accounting standards have been followed and there are no material departures from the same;

b) Such accounting policies as are mentioned in the Notes to the Accounts have been selected applied consistently and judgments and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company as at 31^st March, 2019 and of the profit of the company for the year ended on that date;

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

d) The annual accounts have been prepared on a going concern basis;

e) Necessary internal financial controls have been laid down by the Company and the same are commensurate with its size of operations and that they are adequate and were operating effectively; and

f) Proper systems have been devised to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

15. PERFORMANCE EVALUATION OF BOARD, ITS COMMITTEES & INDIVIDUAL DIRECTORS

In terms of requirements of Listing Regulations and provisions of Companies Act, 2013, Nomination cum Remuneration Committee of the Board of Directors of the Company specified the manner for effective evaluation of performance of Board, its Committees and Individual Directors. Based on the same, the Board carried out annual evaluation of its own performance, performance of its Committees, Individual Directors including Independent Directors during the year. Company had adopted the evaluation parameters as suggested by ICSI and SEBI with suitable changes from Company''s perspective. The performance of the Board was evaluated by the Board on the basis of criteria such as Board composition and structure, effectiveness of Board processes, information flow to Board, functioning of the Board etc. The performance of Committees was evaluated by the Board on the basis of criteria such as composition of Committees, effectiveness of Committee working, independence etc. The Board evaluated the performance of individual Director on the basis of criteria such as attendance and contribution of Director at Board/Committee Meetings, adherence to ethical standards and code of conduct of the Company, interpersonal relations with other Directors, meaningful and constructive contribution and inputs in the Board/Committee meetings etc.

In a Separate meeting of the Independent Directors, performance evaluation of Non-Independent Directors, the Board as a whole and performance evaluation of Chairman was carried out, taking into account the views of Executive and Non-Executive Directors. The quality, quantity and timeliness of flow of information between the Company Management and the Board which is necessary for the Board to effectively and reasonably perform their duties was also evaluated in the said meeting.

Company appointed an External Facilitator for the purpose of carrying out the performance evaluation in a fair and transparent manner.

16. DIRECTORS AND KEY MANAGERIAL PERSONNEL

During the year, the Board of Directors of the Company at their meeting held on 30^th July, 2018 appointed Shri Prakash Narayan Chhangani (DIN: 08189579) as Whole Time Director of the Company w.e.f. 30^th July, 2018 for a period of 5 (Five) years. Approval of Members was obtained by passing of Special Resolution through postal ballot on 8^th March, 2019. Shri Prakash Narayan Chhangani is a Chemical Graduate having over 34 years of rich experience in cement and related industries.

Shri Ramakant Sharma (DIN: 01556371), NonExecutive Non-Independent Director ceased to be Director of the Company w.e.f. 4^th August, 2018.

In accordance with the provisions of the Companies Act, 2013 and Article 112 of the Articles of Association of the Company, Shri Hari Mohan Bangur (DIN: 00244329), Director of the Company will retire by rotation in the ensuing Annual General Meeting and being eligible, offers himself for re-appointment. The Board recommends the re-appointment of Shri Hari Mohan Bangur. Item seeking approval of members is included in the Notice convening the 40^th Annual General Meeting (AGM).

In terms of the Regulation 17(1A) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (hereinafter referred to as ''Listing Regulations'') as amended vide SEBI (Listing Obligations and Disclosure Requirements) (Amendment) Regulations, 2018, with effect from 1^st April, 2019, no listed Company shall appoint or continue the Directorship of a Non-Executive Director who has attained the age of 75 years, unless a Special Resolution is passed to that effect. As per Company''s records, Shri Benu Gopal Bangur (DIN: 00244196), Non-Executive - Non-Independent Director (Designated as Chairman), Shri Ratanlal Gaggar (DIN: 00066068), Shri Om Prakash Setia (DIN: 00244443), Dr. Yoginder Kumar Alagh (DIN: 00244686) and Shri Nitin Dayalji Desai (DIN: 02895410) all Independent Directors were the ones who had attained the age of 75 years before 1^st April 2019. In view of the above, approval of members by way of special resolutions was obtained through postal ballot on 8^th March, 2019 for the continuation of their directorship beyond 1^st April, 2019.

Further, your Board of Directors recommends that pursuant to the provisions of Sections 149, 152 and Schedule IV of the Companies Act, 2013 read with applicable Rules made thereunder, Regulations 17 & 17(1A) of the Listing Regulations, Independent Directors Shri Ratanlal Gaggar (DIN: 00066068), Shri Om Prakash Setia (DIN: 00244443), Dr. Yoginder Kumar Alagh (DIN: 00244686), Shri Nitin Dayalji Desai (DIN: 02895410), Shri Shreekant Somany (DIN: 00021423) be re-appointed as an Independent Director of the Company, not liable to retire by rotation, for second term of five consecutive years commencing from 1^st September, 2019, as well as to continue to hold the position of Non-Executive Independent Director beyond 75 years of age. Items seeking approval of members are included in the Notice convening the 40^th Annual General Meeting.

In accordance with Section 149(7) of the Companies Act, 2013 and Regulation 25(8) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, each Independent Director has given a declaration to the Company confirming that he meets the criteria of independence as specified under Section 149(6) of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Profile and other information of the aforesaid Directors, as required under Regulation 36 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and Secretarial Standard - 2 forms part of the Notice convening the 40^th Annual General Meeting.

17. FAMILIARIZATION PROGRAMME FOR INDEPENDENT DIRECTORS

In order to acquaint the new directors with the Company, a detailed presentation is given to them at the time of their appointment which covers their role, duties and responsibilities, Company''s strategy, business model, operations, markets, organisation structure, products, etc. A detailed presentation along similar lines is sent to existing Independent Directors also every year to keep them apprised of the above details.

As part of Board discussions, presentation on performance of the Company is made to the Board during its meeting(s). Plant visits are also arranged for Independent Directors from time-to-time for better understanding of the Company''s operations. The details of such familiarization programmes for Independent Directors are posted on the website of the Company and can be accessed at link https://www.shreecement.com/pdf/familiarization-programme-for-independent-directors.pdf.

18. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS / OUTGO

The particulars relating to conservation of energy, technology absorption, foreign exchange earnings / outgo, as required to be disclosed under the Companies Act, 2013 is set out at Annexure - 3 which forms part of this report.

19. PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES

In terms of the provisions of Section 197(12) of the Companies Act, 2013 read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing the names of employees and other particulars of the top ten employees and employees drawing remuneration in excess of the limits as provided in the said rules are set out in the Board''s Report as an addendum thereto. However, in terms of provisions of the first proviso to Section 136(1) of the Companies Act, 2013, the Annual Report is being sent to the members of the Company excluding the aforesaid information. The said information is available for inspection at the Registered Office of the Company during working hours and any member interested in obtaining such information may write to the Company Secretary and the same will be furnished on request.

20. AUDITORS

I. Statutory Auditors

M/s. Gupta & Dua, Chartered Accountants (Firm Registration No. 003849N) were appointed as Statutory Auditor of the Company, in the Annual General Meeting held on 31^st July, 2017, for a consecutive term of five years from the conclusion of 38^th Annual General Meeting till the Conclusion of 43^rd Annual General Meeting. They have given their report on the Annual Financial Statements for Financial Year 2018-19. The Audit Report does not contain any qualification, reservation or adverse remark.

II. Secretarial Auditors

The Board had appointed M/s. P. Pincha & Associates, Company Secretaries, Jaipur as Secretarial Auditor of the Company to conduct Secretarial Audit for the Financial Year 2018-19. They have submitted their report in prescribed format and the same is enclosed at Annexure - 5. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.

III. Cost Auditors

In terms of the provisions of Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Amendment Rules, 2014, the Board of Directors of the Company appointed M/s. K. G. Goyal & Associates, Cost Accountants, Jaipur (Firm Registration No. 00024) to conduct the cost audit for the financial year ending 31^st March, 2020, at a remuneration as mentioned in the Notice convening the 40^th Annual General Meeting.

As required under the Act, the remuneration payable to cost auditors has to be placed before the Members at a general meeting for ratification. Hence, a resolution seeking ratification of remuneration by the Members, payable to the Cost Auditors forms part of the Notice of the 40^th Annual General Meeting.

21. OTHER DISCLOSURES

a) Composition of Audit and Risk Management Committee: The Committee comprises of Shri O. P. Setia as Chairman, Shri Prashant Bangur, Shri R. L. Gaggar, Dr. Y K. Alagh, Shri Nitin Desai, Shri Shreekant Somany and Shri Sanjiv Krishnaji Shelgikar as other Members. All the recommendations made by the Audit and Risk Management Committee were accepted by the Board.

b) Details of Meetings of Board and its Committees: The Board of Directors of your Company met 4 times during the year to deliberate on various matters. The meetings were held on 28^th April, 2018, 30^th July, 2018, 12^th November, 2018 and 22^nd January, 2019. Further, details are provided in the Corporate Governance Report forming part of this Annual Report. The intervening gap between the meetings was within the period prescribed under the Companies Act, 2013 and the Listing Regulations.

c) Extract of the Annual Return: Extract of Annual Return of the Company is enclosed at Annexure - 6 which forms part of this report.

d) Particulars of Loan, Guarantees or Investments: During the year 2018-19, there were no loans or guarantees given by the Company which attract the provisions of Section 186 of the Companies Act, 2013. The details of investments made by the Company in terms of Section 186 of the Companies Act, 2013 are given in the Notes forming part of Standalone Financial Statements.

e) Particulars of Contracts or Arrangements with Related Parties: All Related Party Transactions during the financial year 2018-19 were on arm''s length basis and were in compliance with the applicable provisions of the Companies Act, 2013 and the Listing Regulations. All such transactions are placed before the Audit and Risk Management Committee for review/approval. The necessary omnibus approval has been obtained from Audit and Risk Management Committee wherever required. There were no material Related Party Contract/Arrangement/ Transactions made by the Company during the year that would have required Shareholders'' approval under provisions of Section 188 of the Companies Act, 2013 or of the Listing Regulations. The Company has adopted a Related Party Transactions Policy duly approved by the Board, which is uploaded on the Company''s websi te & m a y be a ccessed a t li n k https://www.shreecement.com/pdf/rpt_policy_as _amended.pdf.

Further, in terms of SEBI (Listing Obligations and Disclosure Requirements) (Amendment) Regulations, 2018 dated 9^th May, 2018, the transaction with person / entity belonging to the promoter/promoter group holding 10% or more shareholding in the Company are as under:

Name of the Entity	% Holding in the Company	Amount (Rs. Cr.)	Nature of Transaction
Shree Capital Services Ltd.	25.79%	0.24	Payment of Office Rent
		8.03	Reimbursement towards purchase of equity shares of Subsidiary
		0.02	Reimbursement of Expenses
Digvijay Finlease Ltd	12.16%	14.43	Reimbursement towards purchase of equity shares of Subsidiary
Digvijay Finlease Ltd	12.16%	0.04	Reimbursement of Expenses

f) Deposits from Public: The Company has not accepted any deposits from public covered under Chapter V of the Companies Act, 2013 during the year and as such, no amount on account of principal or interest on deposits from public was outstanding.

g) Vigil Mechanism/ Whistle Blower Policy: The Company has adopted a whistle blower policy and has established the necessary vigil mechanism for employees and Directors to report concerns about unethical behaviour. The policy provides for adequate safeguards against victimization of employees who avail of the mechanism and also provides for direct access to the Chairman of the Audit and Risk Management Committee. The whistle blower policy may be accessed on the website of the Company at link https://www.shreecement.com/pdf/ whistleblower_policy.pdf.

h) Remuneration Policy: Company firmly believes that it needs to structure remuneration of its people in a manner that is both competitive and satisfies the needs of its people who are its real assets. Its remuneration policy is, therefore, designed to achieve this vision. The policy has been approved by the Board on the recommendation of Nomination cum Remuneration Committee. The policy is applicable to Directors, Key Managerial Personnel and other employees. The policy provides that while nominating appointment of a Director, the Nomination cum Remuneration Committee shall consider the level and composition of remuneration which is reasonable and sufficient to attract, retain and motivate the Directors for delivering high performance. The Remuneration Policy is enclosed at Annexure-7 and can be accessed on the website of the Company at link https://www.shreecement.com/pdf/remuneratio n_policy_new.pdf.

i) Policy on Prevention, Prohibition and Redressal of Sexual Harassment at Workplace: The Company has complied with the provisions of the constitution of the Internal Committee under the Sexual Harassment of Women at the Workplace (Prevention, Prohibition and Redressal) Act, 2013 and has adopted a Policy on Prevention, Prohibition and Redressal of Sexual Harassment at the Workplace, in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules made thereunder. Company has formed an ''Internal Complaints Committee'' for prevention and redressal of sexual harassment at workplace. The Committee has four members and is chaired by a senior woman member of the organization. The Company has not received any complaint of sexual harassment during the financial year 2018-19.

j) Material Changes after the Close of Financial Year: There have been no material changes and commitments which have occurred after the close of the year till the date of this Report, affecting the financial position of the Company.

k) Significant and Material Orders passed by the Regulators or Courts: No significant material orders have been passed by the Regulators or Courts or Tribunals which would impact the going concern status of the Company and its future operations.

l) Maintenance of Cost Records: Company is required to maintain cost records as specified by the Central Government under sub-section (1) of section 148 of the Companies Act, 2013, accordingly such accounts and records are made and maintained by the Company.

m) Compliance with Secretarial Standards: Company has complied with the Secretarial Standards issued by Institute of Companies Secretaries of India (ICSI) on Board Meetings (SS-1) and General Meetings (SS-2).

Acknowledgement

The Directors take this opportunity to express their deep sense of gratitude to its lenders, Central and State Governments and the local authorities for their continued co-operation and support. They also would like to place on record their sincere appreciation for the commitment, hard work and high engagement level of every member of the Shree family without which the exemplary performance of the Company year after year, would not have been possible. The Directors would also like to thank its various stakeholders of the Company customers, dealers, supplies, transporters, advisors, local community, etc. for their continued committed engagement with the Company. Lastly, the Directors would also like to thank you, the Members of the Company for the confidence and trust reposed in them.

For and on behalf of the Board

B. G. Bangur

place: Kolkata Chairman

Date: 18th May, 2019 DIN: 00244196

Mar 31, 2018

BOARD''S REPORT AND MANAGEMENT DISCUSSION AND ANALYSIS

Dear Members,

The Directors take pleasure in presenting the Annual Report together with the Audited Financial Statements, fur the year ended 31st March, 2013, The Management Discussion and Analysis has also been incorporated into this report.

I. FINANCIAL PERFORMANCE

A brief of financial performance for the year gone by and its comparison with previous year Is given below: -

in Crore)

Particulars	Standalone		Consolidated
	2017-18	2016-17	2017-18	2016-17
Revenue from Operations	10,159.53	9,661.66	10,139,53	9,661.66
Less Excise Duty	326.43	1.067.36	325.43	1.067.36
Net Revenue from Operation-	9,633.10	8,544,30	9,833.10	8,594.30
Profit Before Interest Depreciation and Taxes	2,861.83	2.874.94	2.351.90	2,974.91
Finance Casts	135.37	129.42	135.27	12942
Depreciation and amortization expenses	999 40	1.514.71	399.40	1,214.71
Profit Before Tax	1,027,16	1,530.01	1,527.13	1.530,70
Tax Expense	447.98	191.70	442.98	191.70
Profit After Tax	1,384.18	1,339.11	1,384.15	1.339.08

2. DIVIDEND AND RESERVE

- During the year 2017-18, Company has paid interim Dividend of Rs 20/- per share,

- Apart from above, a Final Dividend of Rs, 30 per share for 2017- 18 has been recommended by the Board, which will be paid after approval of Members in ensuing Annual General Meeting (AGM).

- The total dividend payment thus works out to Rs, 50/-per share for year 2017-13 as against Rs, 140/- per share for the year 2016-17 (which included Rs,100/-per share One-Ti me Special Dividend).

- The total dividend relating to the year 2017-18 amounts to Rs,209.84 crore including dividend distribution lax of Rs,35.66 crore as against Rs,587.01 crone including dividend distribution taw of Rs, 99.29 crore for the yea r 2016-17.

- During the year an amount of Rs 500 crores was transferred to the General Reserves.

The Board of Directors of the Company in line with the SEBl (Listing Obligations & Disclosure Requirements] Regulations, 2015 had approved the Dividend Distribution Policy on 12^th August 2016. The Policy is uploaded at the Company''s website and can be accessed at the link https://shreecemeM.in/pdf/dividend-policy.pdf.

9. CORPORATE GOVERNANCE

Your Directors reaffirm their continued commitment to good corporate governance practices. During the year under review. Company was In compliance with the provisions relating to corporate governance as provided under the Listing Regulations. The compliance report is provided in the Corporate Governance section of this Annual Report, The Auditor''s Certificate on Corporate Governance is enclosed atAnnexure-1.

ID. BUSINESS RESPONSIBILITY REPORTING

A separate section on Business Responsibility Reporting forms part of this Annual Report as required under Regulation 34(2)(f)of SEBI (Listing Obligations and Disclosure Requirements)Regulations, 2018.

11. CORPORATE SOCIAL RESPONSIBILITY

Company has always considered the community as its key stakeholder. It believes that the community around Its operations should also grow and prosper In the same manner as does its own business. Accordingly, Corporate Social Responsibility is an integral part the Companyâs business.

In order to oversee all its CSR initiatives and activities, the Company has constituted a Board level Committee - "Corporate Social and Business Responsibility Committee'' (CSBR Committee). The major thrust areas of the Company include healthcare, education, women empowerment, infrastructure support, integrated rural development and conservation of natural resources.

The Annual Report on CSR activities of FY 2017-18 with requisite details in the specified format as required under Companies (Corporate Social Responsibility Policy) Rules, 2014 is enclosed at Annexure - 2 and forms part of this report.

The CSR Policy of the Company is enclosed at Annexure- 3 and forms part of this Report. The same may also be accessed on the website of the Company at link https://www.shreecement.rn/pdf/Shiree-C 5r-policy.pdf,

12. SUBSIDIARY COMPANIES

The Company has a 100% subsidiary i.e. Shree Global Pte. Ltd. In Singapore. There have been no operations in the subsidiary during the year. The Company is not having any Associate Company or Joint Venture. The shareholders, who wish to receive a copy of Annual

Accounts of the Subsidiary Company, may request the Company Secretary for the same. As required by section 129 (3) of the companies Act. 2013. Statement showing the salient features of the financial statements of the Subsidiary Company in Form AOC-1, forms part of the Consolidated Financial Statements of Company, The policy for determining material subsidiaries as approved the Board can be accessed on the website of the Company at link https://www. shreecement. in/pdf/Shree- material -sijbsidiary-prjlicy.pdf,

13. CONSOLIDATED FINANCIAL STATEMENTS

The Consolidated Financial Statements of the Company are prepared as required fn terms of provisions of Companies Act. 2018 and Listing Regulations by following the applicable Accounting Standards notified by the Ministry of Corporate Affairs and form part of the Annual Report,

14. DIRECTORSâ RESPONSIBILITY STATEMENT

Pursuant to Section 134 (5) of the Companies Act, 2013. the Board of Directors, to the best of their knowledge and belief and according to the information end explanations obtained by them, state that:

A) In the preparation of The annual ACCOUNT for the year ended 31^ST March, 2018 the applicable accounting standards have been followed and there are no material departures from the same;

b) Such accounting policies as ate mentioned in the Motes to the Accounts have been selected applied consistently and judgments and estimates have been made that are reasonable and prudent so as to give e true and fair view of the state of affairs of the company as at 31stMarch. 201S and of the profit of the company for the year ended on that dale:

d Proper and sufficient cane 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 tile company and for preventing and detecting fraud and other Irregularities;

d) The annual accounts have been prepared on Â« going concern basis:

e) Necessary Internal financial controls have been laid down by the Company and the same are commensurate with its siie of operations and that they are adequate and were operating effectively; and

f) Proper systems have been devised to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

15. PERFORMANCE EVALUATION OF BOARD, ITS COMMITTEE Sc INDIVIDUAL D [RECTORS

In terms of requirements of Listing Regulations and provisions of Companies Act, 2013, the Board carried out annual evaluation of its own performance, performance of its Committees,

Individual Directors including Independent Directors during the year.

Company had adopted the evaluation parameters as suggested by ICSI and SEBI with suitable changes Famine Company''s perspective.

The performance of the Board was evaluated by the Board on the basis of criteria such as Board composition and structure, effectiveness of Board processes, information flow to Board, functioning of the Board etc. The performance of Committees was evaluated by the Board on the basis of criteria such as composition of Committees, effectiveness of Committee wording, independence etc. The Board end Nomination cum Remuneration Committee evaluated the performance of individual Director on the basis of criteria such as attendance and contribution of Director at Board/Committee Meetings, adherence to ethical standards and code of conduct of the Company, inter-personal relations with other Directors, meaningful and constructive Contribution and inputs in the Board/committee meetings etc.

Far the above evaluation, the Board members completed questionnaires providing feedback on different parameters as already sated above including on performance of Board Committees / Directors, engagement levels. Independence of Judgments and other criteria. This Is followed with review and discussions at the level of Nomination cum Remuneration Committee and Board.

In a Separate meeting or the Independent Directors, performance evaluation of Non- Independent Directors, the Board as ft whole and performance evaluation of Chairman was carried out. taking into account the views of Executive and Non-Executive Directors, The quality, quantity and timeliness of flow of Information between the Company Management and the Board which is necessary for the Board to effectively and reasonably perform their duties was also evaluated in the said meeting.

Company appointed an External Facilitator for the purpose of carrying out the performance evaluation in a fair and transparent manner.

16, DIRECTORS AMD KEY MANAGERIAL PERSONNEL

In accordance with the provisions of the Companies Act, 2013 and Article 112 of the Articles of Association of the Company, Shri Benu Gopal Bangur (DlN:Q0244196), Director will retire by rotation in the ensuing Annual General Meeting and being eligible, offers himself for re-app ointment.

The Board recommends the re-appointment of Shri Benu Gopal Bangur (DIN: 00244196). Item seeking approval of members are included in the Notice convening the Annual General Meeting (AGM).

The Independent Directors hold office for a fixed term of 5 years and are not liable to retire by rotation. In accordance with Section 149(7) of the Companies Act, 2013, each Independent Director has given a declaration if the company confirming that he/she meets the criteria of independence as specified under Section 1.49(G) of the Companyâs Act. 2013 and SEDI (Listing Obligations and Disclosure Requirements) Regulations, 2015,

17, familiarization programme for INDEPENDENT DIRECTORS

In order to acquaint the new directors with the Company. A detailed presentation is given at the lime of Their appointment which cavers their role, duties and responsibilities. Company''s strategy, business model, operations, markets, organization structure, products, etc, A detailed presentation a Icing similar lines Is sent to existing independent Directors also every year to keep them apprised of the above details.

As part of Board discussions, presentation on performance of the Company is made to the Board during its meetings). Plant visits are also arranged for Independent Directors from time-to-time for better understanding of the Company''s operations. The details of such familiarization programmes for Independent Directors are posted or the website of the Company and can be accessed at, link ht[p5://wwlw.$hreecemenl-ifi/pdf/Shree-familiaf''ilat ion-programme-for-independent-dinettof$,pdf,

18. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS/OUTGO

The particulars relating to conservation of energy, technology absorption, foreign exchange earnings / outgo, as required to be disclosed under the Companies Act, 2018 is set out at Annexure-4 which forms part of this report

13. PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES

Disclosures pertaining to remuneration and other details as required under Section 197(121 of the Companies Act 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are provided at Annexure-4

In terms of the provisions of Section 197(12) of the Companies Act, 2013 read with Rules 5(2) and 5(3)of the Companies (Appointment and Remuneration of Managerial Personnel) Rules. 2014, a statement showing the names Of employees and other particulars of the top ten employees and employees drawing remuneration in excess of the limits as provided m the said rules are sec out in the Board''s Report as an addendum thereto. 1 low ever, in terms of provisions of the first proviso to Section 136) of the Companies Act, 2018, the Annual Report is being sent to the members of the Company excluding the aforesaid information. The said information is available for inspection at the Registered office of the Company Curing working hours and any member interested in obtaining such information may write to the Company Secretary and the same will be furnished on request

20. AUDITORS

Statutory Auditors

M/s Gupta & Dua, Chartered Accountants (Firm Registration No. 003849N) were appointed as Statutory Auditor of the Company, in the Annual General Meeting held on 31st July, 2017, for a term of consecutive five years from the conclusion of 38^th Annual General Meeting till the Conclusion of 43rd Annual General Meeting [subject to ratification of their appointment at every AGM, if so required under the Act).

They have given their report on the Annual financial Statements for Financial Year 2017-IB. The Audit Report does not contain any qualification, reservation or adverse remark

Secretrial Auditors

The Board had appointed M/s. P. Pincha & Associates, Company Secretaries. Jaipur as Secretarial Auditor of the Company to conduct Secretarial Audit for the financial Year 2017-18. They have submitted their report in prescribed format, and the same his enclosed at Annexure - 6. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.

Cost Auditors

The Board has appointed M/s, K.G Goyal & Associates, Cost Accountants, Jaipur (Firm Registration No, 00024) as Cost Auditors of the Company to conduct Cost Audit Tor the Financial Year 20l7-18

21. OTHER DISCLOSURES

1. Composition of Audit and Risk Management Committee: The Committee comprises of Shri O, R Setra as Chairman. Shri Prashant Bangur, Shri R, L Gaqgar, Dr Y. K. ALagh, Shri Nitirt Desai, Shri Shreekant Somany and Shri Sanjiv Hrishnaji Shelgikar as other Members. All the recommendations made by the Audit and Risk Management Committee were accepted by the Board.

II. Details of Meetings of Board and Its Committee: The Board of Directors of your Company met 4 times during the year to deliberate on various matters. The meetings were held on 16^th May, 2017,31^st July, 20l7, 31^st November, 2017 and 11^th January, 2018. Further, details are provided in the Corporate Governance Report forming part of this Annual Report. The intervening gap between the

meetings was within the period prescribed under the Companies Act, 2013 and the Listing Regulations.

iii. Extract of the Annual Return: Extract of Annual Return of the Company is enclosed at Annexure - 7 which forms part of this report.

Iv. Particulars of Loan, Guarantees or Investments: During the year 2017-18, there were no loans or guarantees given by the Company which attract the provisions Of Section 186 of the Companies Act 2013. The details of investments made by the Company In termsâ of provisions of Section 136 of the Companies Act, 2013 are given in the Notes to Accounts of the accompanying Financial Statements.

v. Particulars of Contracts or Arrangements with Related Parties; All Related Party Transactions that were entered into during the financial year were on arm''s length basis and in ordinary course of business and were in compliance with the applicable provisions of the Companies Act, 2013 and the Listing Regulations. All such transactions are placed before the Audit and Rush Management Committee for approval. For transactions that hip foreseen or are repetitive in nature, omnibus approval is obtained film Audit and Risk Management Committee. There were no material Related Party Contract/Arrangement/ Transactions made by the Company during the year that would have required Shareholders'' approval under provisions of Section IBS of the Companies Act, 2013 or of the Listing Regulations. The Company has adopted a Related Party Transactions Policy duly approved by the Board, which is uploaded on the Company''s website and may be accessed at link https V/www.shreecement.iiVpdf/Shree-retated-party-transcuon-policypdf.

Details of Related Parties disclosures (transactions) are powered in the Notes in Accounts of the accompanying Financial Statements.

vi. Deposits from Public: The Company has not accepted any deposits from public covered under Chapter V of the Companies Act 2013 during the year and as Such, no amount on account of principal or interest on deposits from public was outstanding,

vii. Vigil Mechanism/Whistle Blower Policy:

The Company has adopted a whistle blower policy and has established the necessary vigil mechanism for employees and Directors to report concerns about unethical behavior. The policy provides for adequate safeguards again victimization of employees who avail of the mechanism and also provides for direct access to the Chairman of the Audit and Risk Management Committee. The whistle blower policy may be accessed on the website of the Company at link https;//www,sbreecemenlin/ pdf/Shncc-whistLc-blowcr-policy.pdf,

viii, Remuneration Policy; company firmly believes that it needs to structure remuneration of its people in a manner that is both competitive and satisfies the needs of its people who are Its real assets. Its remuneration policy is therefore, designed to achieve this vision. The policy has been approved by the Board on the recommendation of Nomination cum Remuneration Committee. The policy is applicable to Directors, Key Managerial Personnel and other employees. The policy provides that while nominating appointment of a director, the Nomination cum Remuneration Committee shall consider the level and composition of remuneration which is reasonable and sufficient to attract, retain and motivate the Directors for delivering high performance. The Remuneration Policy is enclosed at Annexure-s and can be accessed on the website of the Company at link https://www,sh reeccmenUn/pdf/r emuneration.policy_new.pdf.

ix, Policy on Prevention, Prohibition and Redressal of Sexual Harassment at Workplace: The Company h as adopted a Policy on Prevention, Prohibition and Redressal of Sexual Harassment 31 the workplace, in line with the provisions of the Sensual Harassment of Women at Workplace (Prevention, Prohibition and Redressal Act 2013 and the Rules made there under. Company has formed an ''Internal complaints committee¹ tor prevention and redressal of sexual harassment at workplace. The Committee has four members and'' is Chaired by a senior woman member of the organization. The Company has not received any complaint of sexual harassment during the financial year 2017-18.

x. Material Changes after the Close of Financial Year; Then have been no material changes and commitments which have occurred after the close of line year till the date Of this Report affecting the financial position of the Company,

xi. Significant and Material Orders passed by the Regulator''s or Courts: No significant material orders have been passed by the Regulators or Courts or Tribunals which would impact the going concern status of the Company and its future operations,

xli. Compliant- with Secretarial Standards;

Company has complied with the Secretarial Standards issued by institute of Companies Secretaries of India (ICSI) on Board Meetings CSS-1) and General Meetings CSS-2),

22. ACKNOWLEDGEMENT

The Directors take this opportunity to express their deep sense of gratitude to its lenders, Central and Slate Governments and the local authorities for their continued co-operation and support. They also would like to place on record their sincere appreciation for the commitment, hard work and high engagement level of every member of the Shree family without which the exemplary performance of the Company year after year, would not have been possible. The Directors would also like to thank its various stakeholders of the Company customers, dealers, supplies, transporters, advisors, local community, etc, for their continued committed engagement with the Company. Lastly, the Directors would also like to thank you, the Members of the Company for the Confidence and trust reposed in them.

For and on behalf of the Board

B.G. Bangur

Place: New Delhi Chairmen

Date: 28^th April, 2018 DIN: 00244196

Mar 31, 2017

Dear Members,

The Directors take pleasure in presenting the 38^th Annual Report together with the Audited Financial Statements, for the year ended 31^st March, 2017. The Management Discussion and Analysis has also been incorporated into this report.

1. FINANCIAL PERFORMANCE

A brief of financial performance for the year gone by and its comparison with previous year is given below: -

(Rs. in Crore)

Particulars	Standalone		Consolidated
	2016-17	2015-16 (9 months)	2016-17	2015-16 (9 months)
Revenue from Operations	9,496.52	6,189.96	9,496.52	6,189.96
Profit Before Interest, Depreciation and Taxes	2,874.94	2,079.59	2,874.91	2,079.56
Finance Costs	129.42	75.77	129.42	75.77
Depreciation and amortization expenses	1,214.71	827.57	1,214.71	827.57
Profit Before Tax	1,530.81	1,176.25	1,530.78	1,176.22
Tax Expense	191.70	33.12	191.70	33.12
Profit After Tax	1,339.11	1,143.13	1,339.08	1,143.10

2. DIVIDEND AND RESERVE

- During the year 2016-17, Company has paid following dividends as Interim Dividend : -

- First Interim Dividend of Rs.16/- per share,

- One-Time Special Dividend of Rs.100/- per share

- Apart from above, a Final Dividend of Rs.24/- per share for 2016-17 has been recommended by the Board, which will be paid after approval of Members in ensuing Annual General Meeting (AGM).

- The total dividend payment thus works out to Rs.140/- per share for year 2016-17 (12 months) as against Rs.24/- per share for the year 2015-16 (9 months).

- The total dividend relating to the year 2016-17 amounts to Rs.587.01 crore including dividend distribution tax of Rs.99.29 crore as against Rs.100.63 crore including dividend distribution tax of Rs.17.02 crore for the year 2015-16.

During the year, Rs.1000.00 crore was transferred to General Reserve. Opening Balance of Rs.500.00 crore in Special Reserve was also transferred to General Reserve.

The Board of Directors of the Company in line with the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 had approved the Dividend Distribution Policy on 12^th August, 2016. The Policy is uploaded on the Companyâs website and can be accessed at the link http://shreecement.in/pdf/dividend-policy.pdf.

3. SUSTAINABILITY

Companyâs commitment to sustainable development goes beyond its operating boundaries, as it continuously aims to add value to stakeholders by advancing knowledge and improving lives. Sustainability is an intrinsic part of the Companyâs business model and is vital to its long term growth strategy. Company works with key stakeholders and focuses its efforts towards sustainable development through various initiatives for energy management, environment and social institution building. Companyâs sustainability initiatives are focused on low carbon emission, use of alternate fuels, water & resource conservation and environment management. Sustainability matters are regularly discussed at Board level.

During 2016, Company attained a unique distinction of being the first cement Company in the World, accorded with the highest â5-Starâ rating by Whitehopleman, UK an international benchmarking firm that reviews cement plants across the globe and assigns them star ratings based on various parameters like safety, manpower productivity, energy efficiency, product quality, equipment productivity, equipment reliability and environmental impact. It is worth mentioning that no other cement company has ever attained the perfect 5-Star rating during last 18 years of benchmarking done by Whitehopelman. The rating was assigned to the Company for its cement plants at Ras in Rajasthan, India. Prior to the above upgrade, the Company has been getting 4 Star rating for last 15 years.

During the year company was awarded and recognised for its various initiatives towards sustainable development a few which are as under:-

- Sustainability disclosure Leadership Award 2016 under the umbrella of India Sustainability Leadership Summit & Award for transparency in disclosures towards Climate Change.

- Environment Excellence Award 2016 instituted by âMission Energy foundationâ under the category âExcellence in Implementation of New Environmental Norms-Existing TPPs Categoryâ, Company was awarded this recognition for its innovative approach for installation of FGD unit and Synthetic Gypsum unit to cut down SOx emissions.

- Indian Bureau of Mines, Ministry of Mines, Govt. of India has awarded Limestone Mines of the Company at Bangur City Ras and Bangur Nagar Beawar with 5 Star Rating under Star Rating System for Sustainable Development. A âStar Ratingâ is awarded to the mining lease holders for their efforts and initiatives toward implementation of the Sustainable Development Framework. The best performing leases are given 5 Stars.

- Golden Peacock Environment Management Award, 2016 by Institute of Directors, New Delhi in recognition of Companyâs efforts made in Environment Management, Natural Resource conservation, Utilization of alternative fuel & resources, emission control, energy conservation etc.

- Company has won Green-Co Best Practices Award 2016 for its best practices in Renewable Energy and GHG Emission Reduction. The award was instituted by Confederation of Indian Industries (CII).

Sustainability Initiatives - During the year, the initiatives on sustainability continued with improved performance on several parameters of operations. Some of the initiatives taken on the environment front during the year are as under:-

a) Power Generation from Waste Heat Recovery Plants - Company considers waste heat recovery power plants as a potent source of renewable energy due to the various benefits of these plants which include conservation of fossil fuels and water, elimination of GHG emissions, controlling fugitive emission, etc. Company has invested in this renewable energy source as a long term environment management plan. Company continues to maintain its distinction of having the largest Waste Heat Recovery capacity in World Cement Industry excluding China. These plants help in reducing Companyâs dependence on fossil fuel for power generation and consequently cut down the carbon emissions.

b) Solar Power - Company has identified Solar energy is one of the focus areas to improve upon its carbon footprint. During the year, Company has made a small beginning by setting up a 62 KW Solar PV Power plant near its cement plant facility in Beawar. The plant has employed three different type of variants including tracking system and help understand the functioning of Solar power generation. Company is evaluating options of setting up MW scale solar power plants near its cement plants in different states.

c) Alternative Fuels and Raw Materials - Our dedicated team continued its experiments during the year for working out solutions to use alternative fuels and raw materials in the operations to reduce the consumption and usage of natural resources. Usage of other alternative fuels like paint sludge and industrial wastes was increased during the year. Companyâs synthetic gypsum plant and FGD plant further continue to reduce its dependence on natural mineral gypsum.

d) Energy Conservation - Energy conservation and environment management is a focus area for the Company and is driven at every level of operations. Companyâs dedicated âEnergy Cellâ continued to find out innovative solutions of energy saving and improvement. Several measures like installation energy efficient equipments, optimization of processes, modifying/ improvising design & engineering of the equipments, etc. were carried out to improve the energy efficiency in the operations. The results of all these initiatives are visible in continually reducing power and fuel consumption levels of the Company which are one of the lowest in the cement industry.

e) Environment Management â On environment management front, measures were undertaken to control/reduce the emissions. In our plants, Continuous Emission Monitoring System have been installed for monitoring and reporting of emission levels on a real time basis on websites of regulatory authorities.

f) Conservation of Water - Water being a scarce and precious resource, finds utmost priority in the Companyâs sustainability initiatives. During the year, Company has created rain water harvesting systems at Raipur plant with few more under development. This apart, Sewage Treatment Plants (STP) were installed for treatment of domestic waste water. In addition, newly installed Waste Heat Recovery plant at Raipur plant is further adding to the Companyâs continuous drive towards water consumption. At Ras plant also rain water harvesting systems within and outside plant premises have been created for rain water harvesting.

g) Sustainability Reporting - During the year, Company released its 12^th Corporate Sustainability Report for year 2015-16 detailing its efforts towards sustainability following GRI G4 guidelines and an independent third party verifying agency has certified the report as âIn-accordanceâ with comprehensive options under GRI G4 Guidelines. Company is also releasing Business Responsibility Report (BRR) as part of its Annual Report covering its compliances towards the Business Responsibility Principles enunciated by the Ministry of Corporate Affairs/ Securities and Exchange Board of India.

h) Carbon Disclosure Project (CDP) - CDP is an international, not-for-profit organization providing the global system for companies to measure, disclose, manage and share vital environmental information. Company is ranked 2^nd best cement company in carbon related metrics.

4. CORPORATE SOCIAL RESPONSIBILITY

Company has always considered the community as its key stakeholder. It believes that the community around its operations should also grow and prosper in the same manner as does its own business. Accordingly, Corporate Social Responsibility is an integral part of the Companyâs business. During the year company has been awarded âExcellence in Community Impactâ Award instituted by Society of Human Resource Management, India (SHRM), SHRM is the worldâs largest not-for-profit Human Resource association.

In order to oversee all its CSR initiatives and activities, the Company has constituted a Board level Committee - âCorporate Social and Business Responsibility Committeeâ (CSBR Committee). The major thrust areas of the Company include healthcare, education, women empowerment, infrastructure support, integrated rural development and conservation of natural resources.

The Annual Report on CSR activities of FY 2016-17 with requisite details in the specified format as required under Companies (Corporate Social Responsibility Policy) Rules, 2014 is attached at Annexure - 1 and forms part of this report.

The CSR Policy of the Company is attached at Annexure - 2 to the Directorsâ Report and forms part of the Annual Report. The same may also be accessed on the website of the Company at link http://www.shreecement.in/pdf/Shree-csr-policy.pdf.

5. SUBSIDIARY COMPANIES

The Company has a 100% subsidiary i.e. Shree Global Pte. Ltd., Singapore. There have been no operations in the subsidiary during the year. The Company is not having any Associate Company or Joint Venture. The shareholders, who wish to receive a copy of Annual Accounts of the Subsidiary Company, may request the Company Secretary for the same. As required by Section 129(3) of the Companies Act, 2013 statement showing the salient features of the financial statements of the Subsidiary Company in Form AOC-1, forms part of the Consolidated Financial Statements of Company.

The policy for determining material subsidiaries as approved by the Board can be accessed on the website of the Company a t li nk http://www.shreecement.in/pdf/Shree-material-subsidiary-policy.pdf.

6. CONSOLIDATED FINANCIAL STATEMENTS

7. DIRECTORSâ RESPONSIBILITY STATEMENT

a) In the preparation of the annual accounts for the year ended 31^st March, 2017 the applicable accounting standards have been followed and there are no material departures from the same;

b) Such accounting policies as are mentioned in the Notes to the Accounts have been selected applied consistently and judgments and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company as at 31^st March, 2017 and of the profit of the company for the year ended on that date;

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

d) The annual accounts have been prepared on a going concern basis;

e) Necessary internal financial controls have been laid down by the Company and the same are commensurate with its size of operations and that they are adequate and were operating effectively; and

f) Proper systems have been devised to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

8. DIRECTORS AND KEY MANAGERIAL PERSONNEL

- Board of Directors of the Company in their meeting held on 30^th January, 2017 have foreclosed the existing term of Shri Prashant Bangur w.e.f. Close of the Business hour of 31^st March, 2017 and re-appointed him as Joint Managing Director of the Company for a period of 5 years w.e.f. 1^st April, 2017 subject to approval of the Members in the ensuing Annual General Meeting.

- In accordance with the provisions of the Companies Act, 2013 and Article 112 of the Articles of Association of the Company, Shri Ramakant Sharma, Director will retire by rotation in the ensuing Annual General Meeting and being eligible, offers himself for re-appointment.

The Board recommends the re-appointment of Shri Prashant Bangur and Shri Ramakant Sharma. Items seeking approval of members are included in the Notice convening the Annual General Meeting (AGM).

The Independent Directors hold office for a fixed term of 5 years and are not liable to retire by rotation. In accordance with Section 149(7) of the Companies Act, 2013, each Independent Director has given a declaration to the Company confirming that he/she meets the criteria of independence as specified under Section 149(6) of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

9. PERFORMANCE EVALUATION OF BOARD, ITS COMMITTEE AND INDIVIDUAL DIRECTORS

In terms of requirements of Listing Regulations and provisions of Companies Act, 2013, the Board carried out annual evaluation of its own performance, performance of its Committees, Individual Directors including the evaluation of Independent Directors during the year.

The Institute of Company Secretaries of India (ICSI) had issued Guidance Note namely âA Guide to Board Evaluationâ and suggested various performance evaluation parameters with evaluation forms for carrying out performance evaluation of all the Directors, Chairman, Board as a Whole and Committees of the Board. The Securities and Exchange Board of India has also issued Guidance Note on the Performance Evaluation on 5^th January, 2017. Company had adopted the evaluation parameters as suggested by ICSI and SEBI.

The Board and Nomination cum Remuneration Committee evaluated the performance of individual Director on the basis of criteria such as attendance and contribution of Director at Board/Committee Meetings, adherence to ethical standards and code of conduct of the Company, inter-personal relations with other Directors, meaningful and constructive contribution and inputs in the Board/Committee meetings etc.

For the above evaluation, the Board members completed questionnaires providing feedback on different parameters as already sated above including on performance of Board / Committees / Directors, engagement levels, independence of judgment and other criteria. This is followed with review and discussions at the level of Nomination cum Remuneration Committee and Board.

In a Separate meeting of the Independent Directors, performance evaluation of Non- Independent Directors, the Board as a whole and performance evaluation of Chairman was carried out, taking into account the views of Executive and Non-Executive Directors. The quality, quantity and timeliness of flow of information between the Company Management and the Board which is necessary for the Board to effectively and reasonably perform their duties was also evaluated in the said meeting.

Company appointed an External Facilitator for the purpose of carrying out the performance evaluation in a fair and transparent manner.

10. FAMILIARIZATION PROGRAMME FOR INDEPENDENT DIRECTORS

In order to acquaint the new directors with the Company, a detailed presentation is given to them at the time of their appointment which covers their role, duties and responsibilities, Companyâs strategy, business model, operations, markets, organization structure, products, etc. A detailed presentation along similar lines is sent to existing Independent Directors also every year to keep them apprised of the above details.

The details of such familiarization programmes for Independent Directors are posted on the website of the Company and can be accessed at link http://www.shreecement.in/pdf/Shree-familiarization-programme-for-independent-directors.pdf.

11. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS / OUTGO

12. PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES

In terms of the provisions of Section 197(12) of the Companies Act, 2013 read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing the names of employees and other particulars of the top ten employees and employees drawing remuneration in excess of the limits as provided in the said rules are set out in the Boardâs Report as an addendum thereto. However, in terms of provisions of the first proviso to Section 136(1) of the Companies Act, 2013, the Annual Report is being sent to the members of the Company excluding the aforesaid information. The said information is available for inspection at the Registered Office of the Company during working hours and any member interested in obtaining such information may write to the Company Secretary and the same will be furnished on request.

13. AUDITORS

Statutory Auditors

M/s. B R Maheswari & Co LLP, Chartered Accountants, who are the Statutory Auditors of the Company, hold office till the conclusion of the ensuing Annual General Meeting. They have given their report on the Annual Financial Statements for Financial Year 2016-17. The Audit Report does not contain any qualification, reservation or adverse remark.

As per the provisions of Section 139 of the Companies Act 2013, the term of office of M/s. B R Maheswari & Co LLP, as Statutory Auditors of the company will conclude from the close of the ensuing Annual General Meeting of the Company.

The Board of Directors places on record its appreciation for the services rendered by M/s. B R Maheswari & Co LLP as the Statutory Auditors of the Company.

Subject to the approval of the Members, the Board of Directors of the Company has recommended the appointment of M/s. Gupta & Dua, Chartered Accountants (ICAI Firm Registration Number 003849N) as the Statutory Auditors of the Company pursuant to Section 139 of the Companies Act, 2013 for a period of 5 years commencing from the conclusion of ensuing 38^th Annual General Meeting till the conclusion of 43^rd Annual General Meeting. Membersâ attention is drawn to a Resolution proposing the appointment of M/s. Gupta & Dua, Chartered Accountants, as Statutory Auditors of the Company which is included at Item No. 5 of the Notice convening the Annual General Meeting.

Secretarial Auditors

The Board had appointed M/s. P. Pincha & Associates, Company Secretaries, Jaipur as Secretarial Auditor of the Company to conduct Secretarial Audit for the Financial Year 2016-17. They have submitted their report in prescribed format and the same is attached at Annexure - 5. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.

Cost Auditors

The Board has appointed M/s. K. G. Goyal & Associates, Cost Accountants, Jaipur (Firm Registration No. 00024) as Cost Auditors of the Company to conduct Cost Audit for the Financial Year 2016 -17.

14. OTHER DISCLOSURES

i. Composition of Audit and Risk Management Committee: The Committee comprises of Shri O. P. Setia as Chairman, Shri Prashant Bangur, Shri R. L. Gaggar, Dr. Y. K. Alagh, Shri Nitin Desai, Shri Shreekant Somany and Shri Sanjiv Krishnaji Shelgikar as other Members. All the recommendations made by the Audit and Risk Management Committee were accepted by the Board.

ii. Details of Meetings of Board and its Committee: Details of the composition of the Board and its Committees, Meetings held and attendance of the Directors at such Meetings are provided in the Corporate Governance Report. The intervening gap between the meetings was within the period prescribed under the Companies Act, 2013 and the Listing Regulations.

iii. Extract of the Annual Return: Extract of Annual Return of the Company is annexed at Annexure - 6 which forms part of this report.

iv. Particulars of Loan, Guarantees or Investments: During the year 2016-17, there were no loans or guarantees given by the Company which attracted the provisions of Section 186 of the Companies Act, 2013. The details of investments made covered under provisions of Section 186 of the Companies Act, 2013 are given in the Notes to the financial statements.

v. Particulars of Contracts or Arrangements with Related Parties: All Related Party Transactions that were entered into during the financial year were on an armâs length basis and in the ordinary course of business and were in compliance with the applicable provisions of the Companies Act, 2013 and the Listing Regulations. All such transactions are placed before the Audit Committee for approval. For transactions that are foreseen or are repetitive in nature, prior omnibus approval is obtained from Audit Committee.

There were no material Related Party Contract/ Arrangement/ Transactions made by the Company during the year that would have required Shareholdersâ approval under provisions of Section 188 of the Companies Act, 2013 or of the Listing Regulations.

The Company has adopted a Related Party Transactions Policy duly approved by the Board, which is uploaded on the Companyâs website and may be accessed on the link http://www.shreecement.in/pdf/Shree-related-party-transction-policy.pdf.

Details of Related Parties disclosures (transactions) are provided in the Notes to Accounts of the accompanying financial statements.

vi. Deposits from Public: The Company has not accepted any deposits from public covered under Chapter V of the Companies Act, 2013 and as such, no amount on account of principal or interest on deposits from public was outstanding as on the date of the balance sheet.

vii. Vigil Mechanism / Whistle Blower Policy: The Company has adopted a whistle blower policy and has established the necessary vigil mechanism for employees and Directors to report concerns about unethical behaviour. The policy provides for adequate safeguards against victimization of employees who avail of the mechanism and also provides for direct access to the Chairman of the Audit and Risk Management Committee.

The whistle blower policy may be accessed on the website of the Company at link http://www.shreecement.in/pdf/Shree-whistle-blower-policy.pdf.

viii. Remuneration Policy: Company firmly believes that it needs to structure remuneration of its people in a manner that is both competitive and satisfies the needs of its people who are its real assets. Its remuneration policy is therefore designed to achieve this vision. The policy has been approved by the Board on the recommendation of Nomination cum Remuneration Committee. The policy is applicable to Directors, Key Managerial Personnel and other employees. The policy provides that while nominating appointment of a Director, the Nomination cum Remuneration Committee shall consider the level and composition of remuneration which is reasonable and sufficient to attract, retain and motivate the Directors for delivering high performance.

ix. Policy on Prevention, Prohibition and Redressal of Sexual Harassment at Workplace: The Company has adopted a Policy on Prevention, Prohibition and Redressal of Sexual Harassment at the Workplace, in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules made there under. Company has formed an âInternal Complaints Committeeâ for prevention and redressal of sexual harassment at workplace. The Committee has four members and is chaired by a senior women member of the organization. The Company has not received any complaint of sexual harassment during the financial year 2016-17.

x. Material Changes after the Close of Financial Year: There have been no material changes and commitments which have occurred after the close of the year till the date of this Report, affecting the financial position of the Company.

xi. Significant and Material Orders passed by the Regulators or Courts: No significant material orders have been passed by the Regulators or Courts or Tribunals which would impact the going concern status of the Company and its future operations.

15. ACKNOWLEDGEMENT

For and on behalf of the Board

B. G. Bangur

Place: Kolkata Chairman

Date: 16^th May, 2017 DIN: 00244196

Jun 30, 2015

Dear Members

It is with pleasure that we present our report together with Management Discussion and Analysis for the year ended on 30th June, 2015.

1. FINANCIAL PERFORMANCE

A brief of financial performance for the year gone by and its comparison with previous year is given below: -

(Rs. in crore)

Particulars Standalone

2014-15 2013-14

Revenue from Operations 6,453.57 5,887.31

Profit Before Interest, Depreciation and Taxes 1,481.70 1,574.76

Profit Before Tax 400.83 815.15

Tax Expense (25.50) 27.91

Profit After Tax 426.33 787.24

Balance brought forward from previous year 867.04 1,114.28

Profit available for appropriation 1,293.37 1,901.52

Appropriations

Interim Dividend 34.84 76.65

Tax on Interim Dividend 5.92 13.03

Proposed Final Dividend 48.77 -

Tax on Final Dividend 9.93 -

Transferred to General Reserve 500.00 550.00

Transferred to Special Reserve - 394.80

Net Surplus 693.91 867.04

Consolidated

Particulars 2014-15 2013-14

6,453.57 5,887.31

Revenue from Operations 1,481.67 1,574.73 Profit Before Interest, Depreciation and Taxes 400.80 815.12

Profit Before Tax (25.50) 27.91

Tax Expense 426.30 787.21

Profit After Tax 866.98 1,114.25

Balance brought forward from previous year 1,293.28 1,901.46

Profit available for appropriation

Appropriations 34.84 76.65

Interim Dividend 5.92 13.03

Tax on Interim Dividend 48.77 -

Proposed Final Dividend 9.93 -

Tax on Final Dividend 500.00 550.00

Transferred to General Reserve - 394.80

Transferred to Special Reserve 693.82 866.98

Net Surplus

2. DIVIDEND

The Directors are pleased to recommend a final dividend @ Rs. 14/- per share for the financial year 2014-15. Taking the Interim Dividend of Rs. 10 per share, the total dividend payment for the year 2014-15 works out to C 24 per share as against C 22 per share for the year 2013-14. The total outgo on dividend payment for the year 2014-15 amounts to C 99.46 crore including dividend distribution tax of C 15.85 crore as against C 89.68 crore including dividend distribution tax of C 13.03 crore for year 2013-14.

4. STATE OF THE COMPANY AFFAIRS

Brief summary of the Company's performance is as under:

Particulars Unit 2014-15 2013-14 /-%

Cement Production Lac Tons 159.22 142.22 12.0

Cement & Clinker Sale Lac Tons 161.62 142.52 13.4

Power Generation Million Units 2,987 2,910 2.6

Power Sale Million Units 1,885 1,860 1.3

Revenues

* Cement Rs. Crore 5,747.24 5,244.39 9.6

* Power Rs. Crore 706.33 642.92 9.9

* Total D Crore 6,453.57 5,887.31 9.6

Operating profit

* Cement C Crore 1,368.55 1,509.01 (9.3)

* Power C Crore 1 13.15 65.75 72.1

* Total D Crore 1,481.70 1,574.76 (5.9)

EBIDTA Margin to Revenue % 22.96 26.75 (14.0)

Net Profit Rs. Crore 426.33 787.24 (45.8)

Cement Business

Company registered growth of 13.4% in its sales volume mainly because of entry into new market of Bihar as well as additional volume garnered in the North India market. The overall cement demand growth however remained subdued resulting in a drop in cement realisation by 3%. Consequently, EBITDA from the cement business fell by 9% during the year to Rs. 1,368.55 crore against Rs. 1,509.01 crore during the previous year.

On the cost front, Company has been able to contain its costs through rationalisation and optimisation efforts across its operations and thereby achieving better efficiency to continuously maintain its competitiveness.

* Raw Materials costs have gone up 12% during the year. One of the reasons for the rise was increase in royalty on limestone from Rs. 63 to Rs. 80 per ton. Company was able to however control the cost of Fly ash, another key raw material, through optimal procurement. The cost of Gypsum was up driven by an increase in the prices of the Mineral Gypsum. Further, Company procured part of the clinker requirement for its Bihar unit from market, considering overall cost optimisation, cost whereof was added in Raw Materials. Also, it has started procuring Granulated Blast Furnace Slag (GBFS) for producing Slag Cement in Bihar, which though adds up to Raw material cost, brings in overall savings in clinker requirement.

* Power & Fuel costs were up marginally by 2% mainly because of higher fuel prices during the year. Sustained efforts on energy conservation helped bring down Power consumption from 75.2 units to 73.8 units. Similarly, there was improvement in the ratio of fuel consumption to clinker production.

* Logistics costs went up by 5% during the year. This was mainly because of long distance involved in clinker transfer to its Bihar unit. The situation will correct with commissioning of its clinker unit in Chhattisgarh.

Power Business

The aggregate net power generation from all the power plants during the year was 2,987 million units as against 2,910 million units during the previous year. Dwindling power purchases by utilities owing to poor financials and increased availability due to addition of new power generation capacities in the market has led to fall in prices in the short term bilateral market as well as on the Exchange platform thereby making selling power difficult. Despite the tough market conditions, Company marginally improved its power sales which stood at 1,885 million units as against 1,860 million units in the previous year. The power sale revenues were, however, up by 9% during the year from C640 crore to C700 crore.

Company also has its power trading division which carries out trading activities for other parties as well. Total income from power trading activities was Rs. 6.65 crore during the year as against Rs. 3.18 crore in previous year.

New Projects

The Company has been rapidly expanding its capacity and stepping up its market share in the highly competitive cement business. It has added 6.10 million ton capacity during the year and its total cement capacity stands at 23.60 MTPA as of 30th June, 2015. Following capacity additions were made during 2014-15: -

(a) Integrated unit of 2.6 million ton at Balodabazar, near Raipur, Chhattisgarh.

(b) Cement Grinding Unit "Ras New Cement Unit- phase II" of 2.0 million ton at Ras in Rajasthan.

(c) Acquisition of a 1.5 million ton cement grinding unit at Panipat from Jaiprakash Associates Ltd. which was the first inorganic expansion of cement capacity for the Company. After taking over the possession of this unit, the Company has started setting up new solid waste management facility at this unit. This facility is expected to be commissioned by February, 2016. Necessary approvals have been taken from authorities.

Company is in advanced stage of completing the 2.0 million ton cement unit at Bulandshahr in UP. Company has also decided to undertake expansion of its Bihar Grinding Unit by increasing its capacity from current 2.0 MTPA to 3.6 MTPA.

5. RISK MANAGEMENT

Company has implemented a risk management framework aimed at timely identification and assessment of risks and implementing mitigation measures. These risks are continuously reviewed to ensure their relevance and to also identify existence of any new risks.

The Board of Directors of the Company has formed a Risk Management Committee to monitor the risk management plan for the Company and ensuring its effectiveness. The key risks identified by the Company and their mitigation measures are as under:

a) Demand slowdown and Supply Overhang in the

Industry - The slackness in demand growth and supply overhand due to continual capacity addition pose risk of under-utilisation of cement capacities and fall in prices to un-remunerative levels. Company has adopted measures like multi-brand strategy, expanding market base, faster delivery to consumers and consistent quality to contain the risk. As also it keeps adding capacity in markets where demand-supply conditions are considered to be relatively favourable. Its new cement plant in Bihar has already helped it garner market share in Eastern India. The recently commissioned new cement plant in Chhattisgarh will further help it to quickly gain extra market share. The acquisition of Panipat unit in Haryana and upcoming new plant in Bulandshahr, UP will enable the Company to stepup its market share in North India market. All these measures will continue to help the Company in increasing its market share and better capacity utilisation rates.

b) Fuel cost - Company sources fuel from open market and hence is exposed to volatility in international prices of coal. Company has deployed multi-fuel usage strategy as well as best technology which allows it to use different fuels and use the most economical fuel among a basket of different fuels as per prevailing trends in the market. Also the Company has been continually working on optimising its transportation cost of fuel. Additionally, Company has invested in Waste Heat Recovery Power Plants which have reduced its fuel requirement and thereby cushioned it from fuel price volatility to that extent.

c) Limestone resource - Limestone is a key input in cement production and any risk to its availability can severely affect the operations. Company has adequate limestone deposits at its existing operational sites as well as new project sites to support existing as well as future expansion. Company is also acquiring additional areas in the vicinity of these sites to augment its limestone reserves. Company is also continuously looking out for newer limestone reserves and undertaking exploratory activities at various places.

d) Power prices - Company's power business model which entails selling of power on short term basis exposes it to price volatility in this segment which has been showing downward trend. Company manages this challenge through active monitoring of demand and supply movements of various states, tracking power procurement plans of buyers and other developments in power business.

6. INTERNAL CONTROLS SYSTEM AND THEIR ADEQUACY

In order to ensure orderly and efficient conduct of business, Company has put in place necessary internal control systems considering its business requirements, scale of operations, geographical spread and applicable statues. The systems include policies and procedures, IT systems, delegation of authority, segregation of duties, internal audit and review framework etc.

Company has designed the necessary internal financial controls and systems with regard to adherence to Company's policies, the safeguarding of its assets, the prevention and detection of frauds and errors, accuracy and completeness of the accounting records and the timely preparation of reliable financial information. Company has documented Standard Operating Procedures (SOPs) for procurement, human resources, sales and marketing, logistics, finance and treasury, financial reporting, compliances and other areas of operations.

The compliance to these controls and systems including SOPs is periodically reviewed by the Internal Audit function and exceptions are reported. Company has engaged services of a professional Chartered Accountancy firm to carry out internal audit of the Company. It also has in-house Internal Audit department manned by qualified professionals to carry out audit activities. All material audit observations and follow- up actions thereon are reported to the Audit Committee for its review. The Committee holds regular discussions with the auditors to ensure adequacy and effectiveness of the internal control systems and monitors implementation of audit recommendations.

7. HUMAN RESOURCES / INDUSTRIAL RELATIONS

Developing and retaining talented leaders is integral to achievement of business objectives. Company has nurtured dedicated and talented people which it considers as its foremost stakeholders. Company continuously focus on people related programmes aimed at attracting, developing and retaining talent within organisation.

a) Employee Engagement - Company enjoys high engagement levels from its employees which is reflected in its consistently improving performance. Company continuously aims to enhance the engagement levels of its people by ensuring that its business practices are in alignment with the holistic growth and development of its people which drives them to be actively engaged with the Company.

b) Talent Management - Company is continuously working on strengthening and building talent in its Human Resources management team for supporting its growth. Company made recruitments from prestigious institutes to strengthen its capabilities in talent acquisition and management, performance management, employee wellness to further support its leadership pipeline development programme aimed at meeting future business growth of the Company.

c) Work Environment - Company provides a congenial work atmosphere where every employee enjoys his work. It works on creating people practices which makes it the best place to work for everyone.

d) Occupational Health and Safety - Safety and health of employees at the workplace has always been the focus area for the Company. The Company continuously undertakes initiatives aimed at providing a healthy and safe workplace to its people. Company has undertaken 'Safety Excellence Journey' under which training and guidance are imparted to workers about safety of men and machines. Company has prepared standards for Electrical, Excavation, Incident Investigation and First Party Safety Audit to provide a systematic, in-depth approach to reduce or eliminate occupational hazards. Company has also developed an in- house Safety Observation Portal which is a structured six steps, two-way safety conversation process with people at their workplace to recognise and reinforce positive safety behaviour, identify and rectify behaviour at risk and engage in conversation regarding safety concerns or issues.

Company has evolved a unique practice of Toolbox talks to strengthen its safety practices wherein prior to commencement of any maintenance activity, the engineers hold an informal talk with the group to discuss and highlight the safety hazards and emphasise on safe working practices. The discussion is done at the most opportune time when such group are about to embark on maintenance activity. This has helped the Company to reinforce its safety practices across its sites and promoting a safety culture across the organisation. Company regularly conducts Safety Audit to identify and eliminate potential safety risks through an objective assessment of various equipment. Further, Mock drills on emergency preparedness in night hours are conducted to meet any contingency. All these initiatives have resulted in strengthening safety systems and improving people welfare.

Total no. of employees as on 30th June, 2015 were 5139.

8. SUSTAINABILITY

Sustainability is an intrinsic part of the Company's business and is vital to its long term growth strategy. Sustainability is manifested in its operating practices and systems which is geared towards conservation of resources, environment management, innovation, people motivation to create value for all stakeholders. Company puts emphasis on using efficient state-of-the-art technologies which help reduce emissions of harmful gases, support use of alternative raw materials and fuels and ensure conservation of resources while meeting the expectations of all its stakeholders.

Company's sustainability initiatives are focussed on low carbon emission, use of alternate fuels, water & resource conservation and environment management. Sustainability is regularly discussed at Board level. Company has a Chief Sustainability Officer to put emphasis on the sustainability efforts of the Company. Focus on sustainability is manifested in the Company being recognised as one of the most efficient cement manufacturing organisation with low energy consumption levels, use of alternative fuel and raw materials, low GHG emissions, etc.

Sustainability Initiatives - Some of the initiatives taken on the environment front during the year are as under:-

a) Power Generation from Waste Heat Recovery Plants

* Company considers waste heat recovery power plants as a potent source of renewable energy due to the various benefits of these plants which include conservation of fossil fuels and water, elimination of GHG emissions, controlling fugitive emission etc. Company has invested in such renewable energy sources as a long term environment management plan. During the year, Company expanded its waste heat recovery power plants capacity to 96 MW. Company has also completed the work of setting up waste heat recovery power plant in its new project at Raipur in Chhattisgarh in July 2015. Company continues to have the distinction of having the largest such capacity in world cement industry outside China.

b) Alternative Fuels and Raw Materials - Company has always put focus on use of alternate fuels to promote resource conservation. Company has a dedicated team which continuously scouts for opportunities in alternate fuel and material usage. Company has used a variety of alternate fuels such as paint sludge and other industrial wastes.

c) Energy Conservation and Management - Energy conservation and management is a focus area for the Company and is driven at the lowest operational level. Several efforts were undertaken to bring down energy consumption levels and making the plant more energy efficient and energy conscious. Company has a dedicated "Energy Cell" for overseeing energy consumption and management and creating awareness about energy efficiency.

d) Sustainability Report - Company released its 10th Corporate Sustainability Report for 2013-14 detailing Company's efforts towards sustainability. As in previous years the report was certified the highest level of certification by an independent third party verifying agency.

Recognition for Sustainability - Company was appreciated for its sustainability practices with various reputed organisations giving recognition to its efforts towards sustainable business practices. Company was awarded the "Corporate Governance and Sustainability Vision Award for the year 2015" instituted by the Indian Chamber of Commerce for its practices on Environmental Sustainability, Economic & Social performance, Sustainability Reporting, Corporate Governance etc. Company was also conferred on the "Best Sustainability Performance Award 2015" by World CSR Congress in recognition of its overall sustainability performance based on Sustainability Indicators like Environment, Economic and Social parameters.

9. CORPORATE SOCIAL RESPONSIBILITY

Company has always considered Corporate Social Responsibility (CSR) as a voluntary activity and part of its extended business activity. Company believes that giving back to society is not a mandate but something which is integral to its beliefs. Accordingly, Corporate Social Responsibility is an integral part of the Company's business.

In order to oversee all its CSR initiatives and activities, the Company has constituted a Board level Committee - "Corporate Social and Business Responsibility" Committee (CSBR) which comprises of Shri O. P. Setia - Chairman, Shri Prashant Bangur, Shri Ramakant Sharma, Shri Nitin Desai and Dr. Leena Srivastava as other members.

The Annual Report on CSR activities of FY 2014-15 with requisite details in the specified format is attached at Annex-1.

The CSR Policy of the Company is attached at Annex-2 and forms part of the Annual Report. The same may also be accessed on the website of the Company at link:- http:// www.shreecement.in/pdf/Shree-csr-policy.pdf.

10. SUBSIDIARY COMPANIES

The Company has a 100% subsidiary i.e. Shree Global Pte. Ltd., Singapore. There have been no operations in the Company. During the year, Katni Industries Pvt. Ltd ceased to be a subsidiary of the Company. The Company is not having any Associate Company or Joint Venture. Those Shareholders, who wish to receive a copy of Annual Accounts of the Subsidiary Company, may request the Company Secretary for the same. As required by Section 129 (3) of the Companies Act, 2013 statement showing the salient features of the financial statements of the Subsidiary Company in form AOC-1, forms part of the Consolidated Financial Statements of Company. The policy for determining material subsidiaries as approved by the board, can be accessed on the website of the Company at link:- http://www.shreecement.in/pdf/Shree- material-subsidiary-policy.pdf.

11. CONSOLIDATED FINANCIAL STATEMENTS

The Consolidated Financial Statements of the Company are prepared as required in terms of Accounting Standards (AS-21) issued by Institute of Chartered Accountants of India and forms part of the Annual Report.

12. DIRECTORS' RESPONSIBILITY STATEMENT

Your Directors state that:

a) in the preparation of the annual accounts for the year ended 30th June, 2015 the applicable accounting standards have been followed and there are no material departures from the same;

b) they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 30th June, 2015 and of the profit and loss of the Company for the year ended on that date;

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

d) they have prepared the annual accounts on a going concern basis; and

e) they have laid down necessary internal financial controls to be followed by the Company commensurate with its size of operations and that such internal financial controls are adequate and were operating effectively; and

f) they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

13. DIRECTORS AND KEY MANAGERIAL PERSONNEL

At the Annual General Meeting of the Company held on 10th November, 2014, the members had approved:-

a. the appointment of Shri R. L. Gaggar, Shri O. P. Setia, Shri Shreekant Somany, Dr. Y. K. Alagh, Shri Nitin Desai and Dr. Leena Srivastava as Independent Directors to hold office for 5 (five) consecutive years w.e.f. 1st September, 2014, being a director not liable to retire by rotation.

b. the appointment of Shri Ramakant Sharma, as a non- executive Director of the Company liable to retire by rotation.

Shri Ashok Bhandari, CFO of the Company retired from the services of the Company at the close of Business hours on 31st August, 2014 and Shri Subhash Jajoo was appointed as CFO of the Company w.e.f. 1st September, 2014.

In accordance with the provisions of the Companies Act, 2013 and Article 112 of the Articles of Association of the Company, Shri H. M. Bangur, Managing Director will retire by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment.

The Board of Directors of the Company appointed Shri Sanjiv Krishnaji Shelgikar as an Additional Director on the Board of the Company w.e.f. 5th August, 2015, to hold office up to the date of ensuing Annual General Meeting. Notice pursuant to Section 160 of the Companies Act, 2013 has been received from a Member proposing his candidature for appointment as Independent Director of the Company.

The Company has received declarations from all the Independent Directors of the Company including Shri Shelgikar confirming that they meet the criteria of independence as prescribed both under the Companies Act, 2013 as well as Clause 49 of the Listing Agreement with the Stock Exchanges.

14. PERFORMANCE EVALUATION OF BOARD, ITS COMMITTEES AND INDIVIDUAL DIRECTORS

During the year, the Board has carried out an annual evaluation of its own performance, performance of its committees including the evaluation of individual directors.

The performance of the Board was evaluated by the Board on the basis of criteria such as Board composition and structure, effectiveness of Board processes, information flow to Board, functioning of the Board etc.

The performance of committees was evaluated by the Board on the basis of criteria such as composition of committees, effectiveness of Committee working, independence etc.

The Board and Nomination cum Remuneration Committee evaluated the performance of individual directors on the basis of criteria such as attendance and contribution of director at Board/Committee Meetings, adherence to ethical standards and code of conduct of the Company, interpersonal relations with other directors, meaningful and constructive contribution and inputs in the Board/Committee meetings etc.

In a Separate meeting of the Independent Directors, performance evaluation of non-independent directors and the Board as a whole and performance evaluation of Chairman was carried out, taking into account the views of executive and non-executive directors. The quality, quantity and timeliness of flow of information between the Company management and the Board that is necessary for the Board to effectively and reasonably perform their duties was also evaluated in the said meeting.

Company appointed an External Facilitator for the purpose of carrying out the performance evaluation in fair and transparent manner.

15. FAMILIARIZATION PROGRAMME FOR INDEPENDENT DIRECTORS

A detailed presentation is given to the Independent Directors of the Company at the time of their appointment, which covers their Role, Duties and Responsibilities, Company's strategy, business model, operations, markets, organisation structure, products etc. The said presentation is also given to existing independent Directors every year.

As part of board discussions, presentation on performance of the Company is given to the Board of Directors during the Board Meeting(s). Plant visits are also arranged for independent directors from time-to-time for better understanding of the Company's operations.

The details of such familiarisation programmes for Independent Directors are posted on the website of the Company and can be accessed on the website of the Company at link:- http://www.shreecement.in/pdf/Shree- familiarisation-programme-for-independent-directors.pdf.

16. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS / OUTGO

The particulars relating to conservation of energy, technology absorption, foreign exchange earnings / outgo, as required to be disclosed under the Companies Act, 2013 is set out at Annex-3 which forms part of this report.

17. PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES

Disclosures 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 provided at Annex-4.

In terms of the provisions of Section 197(12) of the Act read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing the names and other particulars of the employees drawing remuneration in excess of the limits as provided in the said rules are set out in the Directors' Report as an addendum thereto. However, in line with the provisions of the first proviso to Section 136(1) of the Act, the Annual Report excluding the aforesaid information is being sent to the members of the Company. The said information is available

for inspection at the registered office of the Company during working hours and any member interested in obtaining such information may write to the Company Secretary and the same will be furnished on request.

18. AUDITORS

Statutory Auditors

M/s. B. R. Maheswari & Company, Chartered Accountants, who are the Statutory Auditors of the Company, hold office till the conclusion of the forthcoming Annual General Meeting and are eligible for re-appointment. They have confirmed their eligibility to the effect that their re-appointment, if made, would be within the prescribed limits under the Act and that they are not disqualified for re-appointment. The Board, on the recommendation of Audit Committee proposes to re-appoint them as Statutory Auditors of the Company from the conclusion of the forthcoming Annual General Meeting till the conclusion of the Annual General Meeting to be held thereafter. The Auditor's Report does not contain any qualification, reservation or adverse remark.

Secretarial Auditors

The Board has appointed M/s. P. Pincha & Associates, Company Secretaries, Jaipur as Secretarial Auditors of the Company to conduct Secretarial Audit for the Financial Year 2014-15. They have submitted their report in prescribed format and the same has been attached at Annex-5.

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

Cost Auditors

The Board has appointed M/s. K. G. Goyal & Associates, Cost Accountants, Jaipur (Registration No. 000024) as Cost Auditors of the Company to conduct Cost Audit for the Financial Year 2014-15.

19. OTHER DISCLOSURES

(i) Audit committee: The Audit Committee comprises of Independent Directors viz. Shri O. P. Setia as Chairman and Shri R. L. Gaggar, Dr. Y. K. Alagh, Shri Nitin Desai as other Members. All the recommendations made by the Audit Committee were accepted by the Board.

(ii) Details of board and its committees: Details of the composition of the Board and its Committees and of the Meetings held and attendance of the Directors at such Meetings are provided in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Act and the Listing Agreement.

(iii) Extract of the Annual Return: Extract of Annual Return of the Company is annexed as Annex-6 which forms part of this report.

(iv) Particulars of Loan, Guarantees or Investments:

Particulars of loans given, investments made, guarantees given and securities provided under Section 186 of the Companies Act, 2013 along with the purpose for which the loan or guarantee or security is proposed to be utilised by the recipient are provided in the accompanying financial statements.

(v) Particulars of Contracts or Arrangements with Related Parties: All Related Party Transactions that were entered into during the financial year were on an arm's length basis and in the ordinary course of business and were in compliance with the applicable provisions of the Companies Act, 2013 and the Listing Agreement. There were no material Related Party contract/arrangement/ transactions made by the Company during the year that would have required Shareholders' approval under Section 188 or Clause 49 of the Listing Agreement.

The Company has adopted a Related Party Transactions Policy duly approved by the Board, which is uploaded on the Company's website and may be accessed at link: http://www.shreecement.in/pdf/Shree-related-party- transction-policy.pdf.

Details of the Related Parties disclosures (transactions) are provided in the accompanying financial statements.

(vi) Deposits from public: The Company has not accepted any deposits from public covered under Chapter V of the Companies Act, 2013 and as such, no amount on account of principal or interest on deposits from public was outstanding as on the date of the balance sheet.

(vii) Vigil Mechanism / Whistle Blower Policy: The Company has adopted a whistle blower policy and has established the necessary vigil mechanism for employees and directors to report concerns about unethical behaviour. The Policy provides for adequate safeguards against victimisation of employees who avail of the mechanism and also provides for direct access to the Chairman of the Audit Committee.

The whistle blower policy may be accessed on the website of the Company at link:- http://www.shreecement.in/pdf/ Shree-whistle-blower-policy.pdf.

(viii) Remuneration Policy: Company believes in nurturing a people friendly environment which is geared to drive the organisation towards high and sustainable growth. Its Remuneration Policy is therefore designed to achieve this vision. The Policy has been approved by the Board on the recommendation of Nomination cum Remuneration Committee. The Policy is applicable to Directors, Key Managerial Personnel and other employees.

The Policy provides that while nominating appointment of a Director, the Nomination cum Remuneration Committee considers that the level and composition of remuneration is reasonable and sufficient to attract, retain and motivate directors of the quality required to run the Company.

(ix) Policy on Prevention, Prohibition and Redressal of Sexual Harassment at Workplace: The Company has adopted a Policy on Prevention, Prohibition and Redressal of Sexual Harassment at the Workplace, in line with the provisions of the "Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013" and the Rules there under. Company has formed an "Internal Complaints Committee" for prevention and redressal of sexual harassment at workplace. The committee is having 4 members and is Chaired by a senior woman member of the organisation.

The Company has not received any complaint of sexual harassment during the financial year 2014-15.

(x) Material Changes after the Close of Financial Year:

There have been no material changes and commitments which have occurred after the close of the year till the date of this Report, affecting the financial position of the Company.

(xi) Significant and Material Orders passed by the Regulators or Courts: No significant material orders have been passed by the Regulators or Courts or Tribunals which would impact the going concern status of the Company and its future operations.

20. ACKNOWLEDGEMENT

Directors take this opportunity to express their deep sense of gratitude to the Banks, Central and State Governments and their departments and the local authorities for their continued co-operation and support. Directors would also like to place on record their sincere appreciation for the commitment, dedication and hard work put in by every member of the Shree family for the Company's success and achievements and to its various stakeholders i.e. customers, dealers, supplies, transporters, advisors, local community etc. for their continued committed engagement with the Company.

For and on behalf of the Board

Place: Kolkata B. G. Bangur Date: 5th August, 2015 Chairman

Jun 30, 2014

Dear shareholders,

We are pleased to present our report together with management discussion and Analysis for the year ended on 30th June, 2014.

FINANCIAL RESULTS

Brief summary of the Company''s standalone and consolidated fnancial performance is as under:

(Rs. in Crore)

Standalone performance Consolidated performance

Particulars 2013-14 2012-13 2013-14 2012-13

Revenue from operations 5887.31 5590.25 5887.31 5590.25

Profit Before Interest, Depreciation and Taxes 1574.76 1749.25 1574.73 1749.22

Profit Before Tax 815.15 1119.42 815.12 1119.39

Tax expense 27.91 115.45 27.91 115.45

Profit After Tax 787.24 1003.97 787.21 1003.94

Balance brought forward from previous year 1114.28 1091.61 1114.25 1091.61

Profit available for appropriation 1901.52 2095.58 1901.46 2095.55

Appropriations:

Interim dividends 76.65 27.87 76.65 27.87

Tax on Interim dividends 13.03 4.52 13.03 4.52

Proposed Final dividend - 41.81 - 41.81

Tax on Final dividend - 7.10 - 7.10

Transferred to general Reserve 550.00 900.00 550.00 900.00

Transferred to Special Reserve 394.80 - 394.80 -

Net surplus 867.04 1114.28 866.98 1114.25

Dividend

The directors declared two interim dividends during the year viz. Rs. 10/- per share and Rs. 12/- per share. Thus, total dividend paid for 2013-14 is Rs. 22/-per share as against Rs. 20/- per share for the year 2012-13. The total outgo on dividend payment for the year 2013-14 amounts to Rs. 89.68 crore including dividend distribution tax of Rs. 13.03 crore as against Rs. 81.30 crore including dividend distribution tax of Rs. 11.62 crore for year 2012-13.

inDiAn eConomY Â 2013-14 AnD futuRe outlooK

Indian economy grew at 4.7% during 2013-14 (April to march) compared to 4.5% growth achieved in 2012-13. economic growth continued to face challenges in terms of depreciating rupee, persistent infation and overall uncertain political and economic environment. This adversely impacted the investment climate and overall growth. of late, however, a positive environment has started emerging in the country with rising capacity infows and a feeling of optimism after the formation of new government with adequate mandate at the Centre. The new government has indeed shown its resolve and has started taking steps towards economic revival by speeding up project approvals and announcing new investment proposals. The changed economic atmosphere indicates a sense of confdence and a positive turnaround in the economic situation towards high growth albeit in a gradual manner.

The path to economic recovery though is not without challenges, stubbornly high infation being among the prime concerns. High infation limits room to ease monetary policy, which is necessary to boost economic revival. overall weak monsoon in the country till now also adds to the worries even as prospects of kharif crop are not good. Any drop in agriculture growth may hamper overall growth. The good news is that the Central government and Reserve Bank of India have shown their resolve to tackle these challenges. one therefore, hopes, with cautious optimism, that year 2014-15 will be the beginning of another period of sustained economic growth for the country.

CEMENT INDUSTRY - DEVELOPMENTS AND OUTLOOK

Cement industry continued to witness surplus capacity as well as lack of demand momentum during year 2013-14. The cement demand is estimated to have grown at about 3% during April 2013 to March 2014 as against 6% clocked in the same period last year. High interest rates, declining investment in industrial and infrastructure projects and poor real estate demand resulted in slackening growth in cement consumption. On the other hand, new capacity addition still continued thereby increasing the pressure of over-supply situation. The pricing situation which remained subdued in first half of the year improved in the second half. For the year as a whole, price realizations remained almost same as they were in the previous year. The industry also had to deal with increasing transportation cost due to consistent increase in diesel prices. As a result, operating margins were down during the year.

Going forward, the cement demand situation is expected to improve. A stable government at the Centre is expected to bring about a structural change in the economy which is likely to speed up the economic growth. The new Government has displayed its intention of focus on providing affordable housing and rapid development of infrastructure. It has announced development of 100 new smart cities with better facilities, connectivity and environment. There are indications that the Government is considering greater use of cement in highways development. Major capacity additions are behind us and new capacity addition has now slowed down. Further, the per capita consumption of cement in India at 194 Kg is still quite low and provides good scope for improvement. All these factors point towards better prospects for the cement industry, going forward.

POWER SECTOR - CURRENT SCENARIO AND OUTLOOK

Indian power sector is in a peculiar situation where on one end, many of the power generators face problem of poor offtake while on the other end consumers in many areas face regular power cuts. This is mainly because of two reasons. One, there are severe transmission constraints which restrict flow of power from surplus areas to deficit regions. Second, the poor financial health of the distribution utilities because of which they have a tendency of resorting to power cuts than meeting their supply commitment. There is, therefore, an urgent need to step up investment in the transmission sector to enable congestion free flow of power. Also, Distribution Companies need to be allowed to charge remunerative tariff from the consumers. Although, over last one or two years, many of the state utilities have indeed increased their tariffs, there is more action needed on their part to bridge the gap. Timely release of subsidies from State Government to utilities can enable them to make timely investment on their distribution system thereby reducing their losses as well as enabling them to procure power to meet their supply commitment.

The Company is into power market which is characterized by short term power sale of upto 12 months or less as well as day to day trading on Energy Exchange platform. In view of transmission bottlenecks and lack of buying by power utilities, power prices continued to remain subdued.

The new Central Government has promised to ensure 24 hours supply to all the consumers and has shown its commitmentto take necessary actions in this respect. This bodes well for the future of power sector.

PERFORMANCE HIGHLIGHTS

The Company''s operating and financial performance during 2013-14 vis-a-vis 2012-13 was as hereunder:-

Particulars Unit 2013-14 2012-13 /-%

Cement Lac Tonnes 142.22 123.32 15.3% Production

Cement Sale Lac Tonnes 140.66 122.77 14.6%

Clinker Sale Lac Tonnes 1.86 1.84 1.1%

Cement & Lac Tonnes 142.52 124.61 14.4% Clinker Sale

Power Million Units 2910 3569 -18.5% Generation

Power Sale Million Units 1860 2610 -28.8% Revenue

- Cement Rs. Crore 5244.39 4544.31 15.4%

- Power Rs. Crore 642.92 1045.94 -38.5%

-Total Rs. Crore 5887.31 5590.25 5.3%

Operating profit

- Cement Rs. Crore 1509.01 1496.32 0.8%

- Power Rs. Crore 65.75 252.93 -74.0%

-Total Rs. Crore 1574.76 1749.25 -10.0%

EBIDTA Margin % 26.7% 31.3% - to Revenue

Net Profit Rs. Crore 787.24 1003.97 -21.6%

Cement Business

The Company achieved a respectable growth of 15% in its cement volumes during year 2013-14 as against close to 3% clocked by the industry. Total cement revenue thus grew by 15% during the year. On the cost front, the freight costs per tonne were up by 13% due to increase in diesel prices and railway freight. Raw materials cost per tonne increased marginally by 1%. The power and fuel costs per tonne were however down by 1% during the year. The price realizations were up marginally by around

1% mainly because of competitive market conditions and slack growth in cement demand. The operating profit of the Company remained almost same at Rs. 1,509 crores as against Rs. 1,496 crores in the previous year.

The Company''s consistent efforts to step up its supplies helped it to increase its all India market share which rose to 5.35% as against 4.95% in the previous year. In order to further enhance its market share, the Company has stepped up its marketing activities in the Eastern India markets. The production from the company''s unit in Chhattisgarh is going to hit the market soon. As such, the higher marketing effort will help the Company shore up its presence in this market.

Power Business

The total installed power generation capacity of the Company has increased to 597 MW. The Company uses part of the power generated for captive consumption and sells the balance in the market.

Total power generation from all the power plants during the year stood at 2910 Million Units (MUs) as against 3569 MUs during the previous year. The year was a challenging period for power sale. On one hand, there was intense competition from other suppliers in the short term power market and on the other, power distribution utilities reduced power purchases on account of their poor financials. This led to fall in prices in the short term power market, making power sale a difficult proposition. As a result, total power sale came down by 29% from 2610 MUs to 1860 MUs during the year.

Apart from selling power generated from Company''s power plants, the power trading division carries out trading activities for other parties as well. The power trading activities generated an income of Rs. 3.18 crore during the year against Rs. 3.12 crore in the previous year. Total revenues from power sale and power trading activities came down by 38% from Rs. 1,046 crores in 2012-13 to Rs. 643 crores in 2013-14.

NEW PROJECTS

During the year, the following new projects were completed: -

Location Type of plant Capacity (Million Tonnes Per Annum)

Ras, Rajasthan Clinker 2.00

Manufacturing

Ras, Rajasthan Cement Grinding 2.00

Aurangabad, Bihar Cement Grinding 2.00

As a result, total cement capacity of the Company now stands increased from 13.50 Million Tonnes Per Annum (MTPA) to 17.50 MTPA.

The work on setting up an integrated unit (clinkerization cum grinding) of 2.0 MTPA at Baloda Bazar, near Raipur in Chhattisgarh is going on in full swing and is scheduled for completion by March 2015. A Cement Grinding unit of 2.0 MTPA in Bulandshahr of Uttar Pradesh is also being set up which is scheduled to be completed by December 2015. The Company has also planned to manufacture Aerated Autoclave Concrete (AAC) blocks at this site which is a high quality and lightweight building material. This project is a forward integration of its cement plant and will replace the use of red clay bricks used in construction.

The Company intends to add more grinding capacity in Northern and Eastern India and has initiated steps for identifying suitable locations in this regard.

RISK MANAGEMENT AND OPPORTUNITY

The Company has in place, a Risk management framework aimed at timely identification and assessment of risks and implementing mitigation measures. Key risks identified by the Company and the steps taken to mitigate them are:

a) Over Supply in the Industry: Supply overhang due to large capacity additions over lastfewyears is continuing. This has resulted in lower capacity utilization across the cement industry. The Company perceived this risk well in advance and adopted measures like multi- brand strategy, expanding market base, faster delivery to consumers and consistent quality, etc. It also concentrated on its capacity additions in markets where demand-supply conditions are relatively favorable. All these measures have helped the Company in increasing its market share and better capacity utilization rates. With new cement plants in Chhattisgarh and Bihar, the Company is now entering into Eastern India which is a new market and will enable it to enhance its all India market share.

b) Input price rise - Logistics and Fuel: As part of its reform measures, the Government started increasing diesel prices from the year 2012-13. This has resulted in consistent rise in diesel prices. This has not only put pressure on the cost of all input prices of the Company but has also resulted in increase in logistic cost of cement and clinker. The Company has set up split grinding units in proximity of its markets as well as fly ash sources which helps it reduce its transportation cost.

The Company is completely dependent on the open market for meeting its fuel requirement. International prices of coal have volatile movements; which exposes the Company to high volatility risk in its energy costs as it uses large amount of fuel for its cement and power plants. The Company has deployed multi-fuel usage strategy and has opted for best technology in its cement and power operations which allows it to use different fuels and not remain straddled with any particular type of fuel. This strategic measure enables it to rationalize its fuel cost.

c) Exchange rates volatility: The Company makes payments in foreign currency for import of fuel and project equipments. Exchange rates of Indian Rupee vis-a-vis other foreign currencies especially US dollar has been exhibiting high volatility. In order to mitigate the risk, the Company, as a policy, hedges all its foreign currency transactions through appropriate forward covers and swap instruments.

d) Power prices: Company''s power business model which entails selling of power in short term market exposes it to price volatility in this segment which has been showing downward trend. The Company manages this challenge through active monitoring of demand and supply indicators of various states, tracking power procurement plans of buyers and other developments in power business. Company''s power trading division helps it market the power at competitive prices.

e) Entry into new geography: With Bihar and Chhattisgarh cement plants, the Company is entering into new geographical areas. Hitherto, Company''s operations were mainly concentrated in North India. Entry into a new geographical area, poses risks of developing new markets, operations in different culture, etc. To ensure seamless operations in these new areas, the Company has undertaken detailed market assessment study, brand awareness exercise and has developed dealer-base which will help in developing the market in this new geography. To address culture challenge, the Company has adapted its recruitment plans in such a way that most of the senior management positions are manned by employees from existing operations to ensure that its current culture is extended to the new geographical locations.

SUSTAINABILITY

The Company treats sustainability as a key business lever, similar to way as it treats production, finance, marketing and other functions. This way, sustainability is well integrated into the fabric of the Company''s business and is viewed as a source of advantage which is very well manifested in its continual growth and high performance.

The Company adopts practices and systems that help conserve resources, improve environment, foster innovation, motivate people and create trust amongst all the stakeholders. The Company''s mainstay is on low carbon growth. The continued emphasis is, therefore, to promote application of efficient and state-of-the-art technologies which help reduce emissions of harmful gases, support use of alternative raw materials & fuels and ensure conservation of resources while meeting the expectations of all its stakeholders.

In view of its exemplary performance in terms of low energy consumption levels, resource conservation through use of alternative fuel and raw materials, low GHG emissions, etc., the Company is recognized as one of the leaders of the world cement industry which have been proactively working on sustainability agenda.

Some of the initiatives taken on the environment front during the year are as under:-

Power Generation from Waste Heat Recovery Plants

The Company has been evaluating various options for utilizing renewable energy in its operations and has realized that the bestform of renewable energy available is from Waste Heat Recovery Plants (WHRP). This conclusion is arrived at based on the several benefits like conservation of Fossil Fuels & water, avoidance of Green House Gases (GHG) emissions, controlled Fugitive Emissions, reduced land requirement and reliable power supply source.

In pursuance of its policyto increase investments in WHRP, Company has installed Waste Heat Recovery Power Plant (WHRP) of 25 MW in its cement plants at Ras (Unit 9). With the implementation of the plant, capacity of WHRPs has increased to 81 MW which is the highest such capacity in the world cement industry excluding China. Further, the Company is also installing WHRPs in its integrated cement unit being set up at Raipur in Chhattisgarh.

Alternative Fuels and Raw Materials

The Company regularly scouts for utilizing alternate fuels in its operations. The Company has a dedicated unit under its Research and Development wing which constantly looks for opportunities to utilize alternate fuels and raw materials to reduce use of fossil fuels and other natural resources. During the year, the Company experimented and utilized various industrial wastes. The Company has also identified other waste materials from different sources for augmenting its usage of alternative resources.

Sharing Information on Sustainability Issues

The Company is a member of Cement Sustainability Initiative (CSI) of the World Business Council of Sustainable Development (WBCSD), Switzerland. It is also associated with World Economic Forum (WEF), TERI - BCSD, Global Reporting Initiative (GRI) for various sustainability related matters.

During the year, the Company was rated "GreenCO- Gold" under the Green Company Rating System by the Confederation of Indian Industry (CII) - Green Business Center (GBC), Hyderabad based on the Company''s exemplary work in the areas of Energy Efficiency, Water Conservation, GHG Management, Waste Management, Resource Conservation, Recycling, Green Supply Chain, etc.

The Company stood 1st in the "Material" sector and overall 3rd among all companies in the "India Climate Disclosure Leadership Index (CDLI)" issued by Carbon Disclosure Project (CDP) for 2013, a Global Disclosure project for companies to report their environment strategies and impacts. The report analyzed top 200 Indian companies by market capitalization for their carbon disclosure. After initial screening, 55 companies participated in it.

Energy Conservation and Management

The Company has a Central Energy Cell for overseeing energy management and carrying out energy audit for identifying areas for energy efficiency improvement as well as suggesting better ways of energy management. The Energy Cell monitors energy consumption on daily basis and deputes energy audit checks in the areas where deviations are significant. This has helped in creating a system of continual awareness about the energy conservation and an effective energy management system across the Company.

Water Conservation

The Company has always considered conservation of water as a focused area. In line with this commitment, the Company developed a 42000 KL capacity of water storage pit near mining lease area in Ras for harvesting rain water. A water pit for rain water harvesting has also been constructed atjobner plant in Jaipur. Further, the Company has installed Sewage Treatment Plant (STP) of various capacities at all its location in Rajasthan for treatment of domestic waste water. The treated water is used for plantation activities.

Green Building

In recognition of the Company''s green initiatives, the administrative building of Company''s Shree Mega Power Plant of 300 MW was certified as "LEED INDIA GOLD" green building by the "Indian Green Building Council" for being an environment friendly building. Also, the Central Control Room (CCR) building of Jaipur Cement Plant of the Company has achieved "LEED India Silver" rating.

Sustainability Report

The Company has released its 9th Sustainability Report during the year. The report is prepared as per the GRI 3.1 guidelines issued by Global Reporting Initiative (GRI). The report was independently vetted by assurance agency LRQA and GRI have concluded that the report fulfills the requirement of application level A .

''SAMAJ SEWA'' - CORPORATE SOCIAL RESPONSIBILITY

Corporate Social Responsibility (CSR) is a focus area for the Company as it considers social development as a part of business activity. Adhering to the firm belief that sustainable growth is only possible when it builds a truly synergistic relationship with members of the society in and around the area of its plant operations, especially those belonging to the bottom of the pyramid, the Company has embraced the policy of giving back to the society. Details of various social projects and initiatives undertaken as part of Samaj Sewa are given in Company''s Business Responsibility Report which forms part of this Report. A brief of the major initiatives is given below: -

The Company arranged a mass blood donation camp in August, 2013 at all its locations wherein Company''s people voluntarily donated blood. A total of 3678 units of blood was collected from this mega camp which is a unique record in the Indian Corporate sector.

Similarly, the Company in collaboration with State Government supported a mega surgical camp in December, 2013 wherein doctors across medical spectrum like eye, ear, oral, gynecology, general medicines, etc. participated and helped the villagers in treating various ailments.

The Company distributes smokeless chulha to BPL households of nearby villages, which uses less fuel, cooks faster and reduces smoke & harmful gases to prevent many health hazards and reduce carbon foot print.

"Shree Ki Pathshala" project covering 12 villages, is running twelve schools for imparting basic education to children who never attended any school.

For improving physical infrastructure of nearby government schools. Company provides water & sanitation facilities, furniture, etc. and collaborates to supplement the efforts of the State Government. This helps promote education amongst students in villages.

To promote girl child, the Company conducted a "Save the Girl Child Campaign" by providing help in the form of a fixed deposit of Rs. 5,000 at the time of birth of girl child which is available to her after attaining 18 years of age. Further, the Company provided basic required items for marriage of girl child after attaining the age of 18 years and above.

The Company in association with Municipal Body of Beawar City in Rajasthan, has undertaken a beautification project to construct a high quality four lane road within the City. The road has smoothened traffic, relieved congestion and improved surrounding environment by making it dust-free with adequate drainage facilities.

For improving road connectivity for the nearby villages, the Company undertook reconstruction and dressing work of various roads near its plants. Also, the Company undertook civil works in nearby villages for construction and repair of temples, boundary walls, renovation of old Panchayat Bhawans, community centers and melaground, etc.

Under the Company''s employee volunteerism programme, the Company people regularly contribute voluntarily in Samaj Sewa activities in a structured way.

OCCUPATIONAL HEALTH AND SAFETY

The Company places utmost importance to the need for ensuring safe and healthy work place across its manufacturing locations and offices. The Company has prepared a Safety Manual, which is a guidebook for all the people working at the Company''s facilities with regard to matters related to safety. It helps them to be aware of the safety norms/practices that must be followed. A ''Safety Department'' has been set up that focuses on building the desired safety culture and practices across all the plants.

In-house Safety Observation Portal:- The Portal launched last year, has been operating quite successfully and has brought all employees on one platform for strengthening the behavioral and other safety aspects. Under the portal, all safety related information such as Safety Policy, Safety Manual of the Company, safety related observations, safety check lists, incidents reports, on-sight emergency plans, etc. have been provided and can be viewed online. Anyone, who finds any incidence of safety norms being not followed, may post the same on the portal. A time bound remedial action is taken on all such incidents and details thereof are placed on the portal for on-line viewing. The Safety Department regularly conducts safety awareness programmes (training) for employees, workers, contract labours, truck drivers, etc. which helps in building the overall ''Safety First'' culture across the Company.

Toolbox Talks, a unique safety initiative, has been undertaken by the Company executives at all its plants to reinforce safety practices. The toolbox talk involves plant engineers getting together with all workers at the site before any maintenance activity is initiated. An informal discussion is done in the group highlighting the possible safety hazards in the task being initiated and safeguards that one needs to follow to ensure safety for all. As this discussion takes place just at the time entire team is ready with their tools to start the job, it is called Toolbox Talk. Toolbox Talks help in safety communications amongst all concerned at plant site, re-enforcement of safe work practices among them, timely identification of safety concerns/risks, better planning for their addressal and promoting safety culture in general at the plant level.

Safety Audit, used by the Company as a management tool, comprises of a systematic, periodic and objective evaluation of how well the safety organization, management and equipment are performing. These Safety Audits helps to safeguard Company''s assets by facilitating management control of safety, health and environmental practices and assessing compliance with established standards. Safety Audit teams undertake periodic inspection of different sections of the plant site and observe any safety related lapses. A detailed report with photographs of the unsafe place and corrective measures required, is sent to concerned department. Upon implementation, the report is updated with the photograph post-improvement alongside pre- improvement photograph for ready understanding of the improvement. The audit observations, action plan prepared and implemented by respective sections are presented to all concerned including the plant head.

HUMAN RESOURCES

The Company has integrated the belief of Human Resource Development in all its policies and strategies. The Company''s human resource management function is aimed at the sole objective of achieving high engagement level of its people which in turn ensures both higher productivity and happy people and thereby improves the bottom line. The Company continuously works towards building and retaining talent for the Company through appropriate policies and practices for talent acquisition, performance management, learning and development, career management, employee wellness, communication mechanism, etc.

The Company''s HR practices help its people realize individual potential and aspirations in line with the growth of the Company. These people centric strengths have helped the Company become a Dream Companyto work for with unique value proposition for its employees. In recognition of the unique processes and practices adopted by the Company in evolving a people centric approach, a case study has been written by Prof. Abhoy Ojha of IIM, Bangalore which is titled "Shree Cement Limited: Cementing the People First Agenda". The study has been published by the prestigious Harvard Business Press. The case study describes accomplishment of people first agenda of the Company and explains the results of employee perception and very high levels of engagement at the Company.

In yet another recognition of the Company''s HR practices, "Shree''s Happiness Management model" was referred and highlighted in the prestigious and reputed book on "Organizational Behaviour" by well known management experts Stephen P. Robbins, Timothy A. Judge and Niharika Vohra. This book is a course book in reputed management schools like IIMs, ISB, XLRI, etc.

Number of employees as on 30th June, 2014 were 4698.

INTERNAL CONTROLS

The Company remains committed towards ensuring an effective and comprehensive internal control system. The Company has an Internal Audit department as well as has engaged the services of a professional firm to carry out internal audit spanning all production units and functions.

The internal audit covers all processes and departments in their audit process. Internal control Systems are continually reviewed and strengthened. Business as well as process risks are dealt with immediately and adequately addressed. The control systems are regularly reviewed by the functional heads, which are required to confirm the effectiveness and adequacy of the systems.

All material audit observations and follow-up actions thereon are reported to the Audit Committee which reviews the adequacy and effectiveness of the internal control systems and monitors implementation of audit recommendations.

AWARDS & ACCOLADES

Major awards and accolades received by the Company during the year are as under:-

1. BEST OVERALL SUSTAINABILITY AWARD 2013-14 -

The Company was honoured with the Best Overall Sustainable Performance Award 2013-14, in recognition of overall sustainability performance of the Company. The award was hosted by World CSR Congress. The award was presented by Dr. Bhaskar Chatterjee, Director General of Indian Institute of Corporate Affairs.

2. "DREAM COMPANY TO WORK FOR" AWARD - The

Company has been honoured with this prestigious award in the Infrastructure Section by World HRD Congress. The Award is in recognition of the Company''s inclusive business practices across social, environmental, product responsibility, innovation and sustainability dimension.

3. NATIONAL AWARD FOR QUALITY EXCELLENCE FROM NCCBM - The Company has been awarded the Second Best Quality Excellence award for the year 2011-12 & 2012-13 by National Council for Cement and Building Material (NCCBM), New Delhi for adopting cost effective, efficient and cleaner methods for producing cement such as maximizing the use of alternative fuels, establishing energy efficiency, achieving customer satisfaction, adopting modernized techniques and maintaining transparency in its business approach. The award was presented by Shri Taleen Kumar, Jt. Secretary, Department of Industrial Policy & Promotion, Government of India.

DIRECTORS

Shri Mahendra Singhi resigned during the year as Executive Director of the Company w.e.f. close of business hours of 6th December, 2013. Shri Singhi was with the Company for more than 19 years and played a key role in all facets of the business of the Company. The Board of Directors placed on record its appreciation for the valuable contribution made by Shri Singhi in the growth of the Company.

Shri Ramakant Sharma was appointed as Additional Director on the Board of the Company w.e.f. 27th December, 2013. Shri Ramakant Sharma is a science graduate and has rich experience of 45 years of dealing with various industries related matters. He has been associated with the Company for last 19 years and is therefore a Non-independent Director. He holds office uptothe date of the ensuing Annual

General Meeting (AGM). Notice pursuant to Section 160 of the Companies Act, 2013 has been received from a Member proposing the candidature of Shri Ramakant Sharma for appointment as Director of the Company.

In accordance with the provisions of Article 112 of the Articles of Association of the Company, Shri B.G. Bangur will retire by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment.

In line with the requirement of Clause 49 of the Listing Agreement entered into with the Stock Exchanges, the Company had appointed Shri R.L Gaggar, Shri O.P. Setia, Dr. Y.K. Alagh, Shri Nitin Desai, Shri Shreekant Somany and Dr. Leena Srivastava as Independent Directors of the Company. These Directors were hitherto liable to retire by rotation and did not have anyfixed term of their appointment. As per section 149(4) of the Companies Act, 2013, every listed public Company is required to have at least one-third of the total number of Directors as Independent Directors. Such Directors will be appointed for a fixed term of upto 5 years and will not be liable to retire by rotation. In order to meet the new requirements, these Directors are being appointed as Independent Directors for a fixed tenure as mentioned in the Notice of the forthcoming Annual General Meeting (AGM) of the Company.

The Company has received declarations from all the Independent Directors of the Company confirming that they meet with the criteria of independence as prescribed under sub-section (6) of Section 149 of the Companies Act, 2013.

The Board recommends the above appointments / re-appointments.

DIRECTORS'' RESPONSIBILITY STATEMENT

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

The applicable accounting standards have been followed in the preparation of the annual accounts (financial statements) for the year ended 30th June, 2014 and in case of material departures, proper explanation has been given in the accounts and notes thereon;

Such accounting policies (as mentioned in the Notes forming part of financial statements) have been selected and applied consistently, and that the judgments and estimates made are reasonable and prudent so as to give a true and fair view of the state of affairs of Company as at 30thJune, 2014 and of the profit & loss and cash flow of Company for the year ended on that date;

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

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

AUDITORS

M/s. B. R. Maheswari & Company, Chartered Accountants, who are the Statutory Auditors of the Company, hold office till the conclusion of the forthcoming Annual General Meeting and are eligible for re-appointment. The Board, on the recommendation of Audit Committee proposes to re-appoint them as Statutory Auditors of the Company from the conclusion of the forthcoming Annual General Meeting till the conclusion of the Annual General Meeting to be held thereafter.

The Notes on Financial Statements referred to in the Auditors'' Report are self-explanatory and do not call for any further explanation/comment from the Board.

COST AUDIT

Pursuant to the directives of Central Government, the Company had appointed M/s. K. G. Goyal & Associates, Cost Accountantsjaipur (Registration No. 000024) as Cost Auditors of the Company under section 233B of the Companies Act, 1956 for the year 2013-14. In accordance with Cost Audit (Report) Rules, 2011 (as amended), the due date for filing the Cost Audit Report in XBRL for the financial year ended 30th June, 2013 was 26th December, 2013. The Company filed the same on 29th November, 2013 vide SRN No. S28216612 with the Ministry of Corporate Affairs.

TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND

The Company has transferred a sum ofRs. 13.22 Lacs during the year 2013-14 to the Investor Education and Protection Fund established by the Central Government, in compliance with Section 205C of the Companies Act, 1956. The said amount represents unclaimed dividend pertaining to year 2005-06 (final) and year 2006-07 (Interim), which was lying with the Company for a period of 7 years from its due date of payment. Prior to transferring the aforesaid sum, the Company sent reminders to the shareholders for submitting their claims for unclaimed dividend. The amount of unclaimed dividend for subsequent years is given in the Notice convening the AGM.

CORPORATE GOVERNANCE

A separate section on Corporate Governance together with a certificate from the Auditors of the Company regarding full compliance of conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement with the Stock Exchange(s) forms part of Annual Report.

BUSINESS RESPONSIBILITY REPORT

In terms of Clause 55 of the Listing Agreement, a separate section on Business Responsibility Report is given, which forms part of the Annual Report.

PARTICULARS OF EMPLOYEES

As required under 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 employees are to be set out in the Directors'' Report as an addendum or annexure thereto. However, in line with the provisions of Section 219(1)(b)(iv) of the Act, the report and the Accounts as required therein, are being sent to all members of the Company excluding the above information regarding the particulars of the employees. The Company shall provide these particulars to any member who is interested in obtaining the same and writes to Company Secretary at the registered office of the Company.

PARTICULARS OF CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNING / OUTGO

The information required under Section 217(1)(e) of the Companies Act, 1956 read with Companies (Disclosure of particulars in the report of the Board of Directors) Rules, 1988 is set out in Annexure I which forms part of this report.

SUBSIDIARY COMPANIES

The Ministry of Corporate Affairs, Government of India, vide its circular no. 2 and 3 dated 8th February, 2011 and 21st February, 2011 respectively, has exempted companies from attaching the annual accounts and other particulars of its subsidiary companies along with the Annual Report of the Company as required under section 212 of the Companies Act, 1956. Therefore, the Annual Accounts of Subsidiary Companies viz. (1) Katni Industries Pvt. Ltd. & (2) Shree Global Pte. Ltd. are not attached with this Annual Report. However, a statement giving certain information as required vide aforesaid circulars is placed along with the Consolidated Accounts.

The Annual Accounts of the above subsidiary companies and the related information shall be made available to the shareholders of the Company upon receipt of a request from them. The same is also kept open for inspection at the Registered Office of the Company as well as its subsidiaries.

CONSOLIDATED FINANCIAL STATEMENT

The Consolidated Financial Statements have been prepared in order to comply, in all material respects, with the Accounting Standards notified under the Companies (Accounting Standard) Rules, 2006, (as amended) and the relevant provisions of the Companies Act, 1956 along with the provisions of the Listing Agreement with the Stock Exchanges. The Audited Consolidated Financial Statements together with Auditors'' Report form part of the Annual Report.

ACKNOWLEDGEMENT

Your Directors would like to take this opportunity to express their deep sense of gratitude to the Banks, Central and State Governments and their departments and the local authorities for their continued co-operation and support. Your Directors would also like to place on record their sincere appreciation for the commitment, dedication and hard work put in by every member of the Shree family for the Company''s success and achievements and to its various stakeholders i.e. customers, dealers, suppliers, transporters, advisors, local community, etc. for their continued committed engagement with the Company.

For and on behalf of the Board

Place: New Delhi B. G. Bangur

Date : 25thAugust, 2014 Chairman

Jun 30, 2012

We have pleasure in presenting this Directors' Report of the company for the 15 months period ended 30th June, 2012. The Management Discussion and Analysis also forms part of this report.

Financial Results

During the year, the Board decided to change the Accounting year of the company from "period ending March" to "period ending June". Consequently, the accounting year for 2011-12 is of 15 months (from April 11 to June 12). Brief summary of the Company's financial performance is as under:

Rs. in Crore

Particulars 2011-12 (15 Months) 2010-11

Revenue from operation 5898.12 3453.53

Profit Before Depreciation, Interest and Taxes 1808.54 1009.93

Profit before Tax 687.75 110.35

Tax Expense 69.25 (99.35)

Profit after Tax 618.50 209.70

Balance of Profit & Loss brought forward from previous year 1139.09 1136.15

Profit available for appropriation 1757.59 1345.85

Appropriations:

Interim Dividend 41.81 20.90

Proposed Final Dividend 27.87 27.87

Dividend Distribution Tax

- Interim Dividend 6.78 3.47

- Proposed Final Dividend 4.52 4.52

Transferred to Debenture Redemption Reserve 300.00 125.00

Transferred to General Reserve 285.00 25.00

Surplus carried to Balance Sheet 1091.61 1139.09

Dividend

The Directors are pleased to recommend a final dividend @ Rs. 8 per share. Together with two interim dividends of Rs. 6/-per share each, total dividend for 2011-12 (15 months period ended 30th June, 12) would be Rs. 20 per share as against Rs.14 per share paid for the year 2010-11 (12 months). The total outgo on dividend payment for the 2011-12 amounts to Rs. 80.98 Crore including dividend distribution tax of Rs. 11.30 Crore as against Rs. 56.76 Crore including dividend distribution tax of Rs. 7.99 Crore of 2010-11.

Directors

Company deeply regrets the sad demise of Dr. Abid Hussain on 21st June, 2012. Dr. Hussain was a veteran economist and diplomat. He was known for his simplicity, depth, forthrightness and eloquence. During his association as an independent director on the Board of Shree Cement, since 2004, he made laudable contribution through his grander vision, proficient advice and able guidance. The Board of Directors would like to place on record its sincere gratitude to Dr. Hussain and appreciates the contribution made by him during his association with the Company.

During 2011-12, Shri B.G. Bangur who is one of the founder Directors and promoters of the Company expressed his desire to act as a Non- Executive Chairman and as such resigned from the position of Executive Chairman of the Company w.e.f. 23rd January 2012. Board while accepting the resignation of Shri Bangur from the Executive Chairmanship of the Company, re-appointed him as the Non-Executive

Chairman of the Company thereafter. The Board placed on record its appreciation for the valuable contribution made by him during his tenure as Executive Chairman.

In accordance with the provisions of the Articles of Association of the Company, (i) Shri O.P. Setia and (ii) Shri R.L. Gaggar, Directors of the Company, will retire by rotation at the ensuing Annual General Meeting of the Company and being eligible, offer them for re-appointment. The Board recommends their re-appointment.

Shri Mahendra Singhi was appointed as Executive Director for a period of five years which term will expire on 31st March, 2013. He is proposed to be re-appointed for another term of three years from 1st April, 2013. The Board recommends for his re-appointment.

Shri Prashant Bangur has been co-opted as Additional Director on the Board on 23rd August, 2012 and appointed as Whole-time Director for a period of five years from the same date. The term of appointment of Shri Prashant Bangur as additional Director shall expire at the ensuing annual general meeting in accordance with the provisions of the Companies Act, 1956 and Articles of Association of the Company. He being eligible, offers himself for re-appointment. The Board recommends for his re-appointment.

Further details about these Directors are given in the Notice of the ensuing Annual General Meeting being sent to the shareholders along with the Annual Report.

Directors' Responsibility Statement

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

- The applicable accounting standards have been followed in the preparation of the annual accounts for the year ended 30th June, 2012 and in case of material departures, proper explanation has been given in the Accounts and notes thereon

- Such accounting policies (as mentioned in the Notes forming part of financial statements) have been selected and applied consistently, and that the judgments and estimates made are reasonable and prudent so as to give a true and fair view of the state of affairs of your Company as at 30th June, 2012 and of the profit and cash flow of your Company for the year ended on that date

- Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of your Company and for preventing and detecting fraud and other irregularities

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

Auditors

The Statutory Auditors' of your Company M/s. B.R. Maheswari & Company, Chartered Accountants would retire at the ensuing Annual General Meeting. They have confirmed their eligibility under section 224 of the Companies Act, 1956 and willingness for re-appointment as Statutory Auditors of the Company.

The Board of Directors recommends the re-appointment of M/s. B.R. Maheswari & Company as Statutory Auditors from conclusion of ensuing Annual General Meeting till the conclusion of next Annual General Meeting.

The observations of the Auditors' in their report are self explanatory and, therefore, do not call for any further comments of the management on the observations of auditors.

Cost Audit

Pursuant to the directives of Central Government, your Company has appointed M/s. K. G. Goyal & Associates, Cost Accountants as Cost Auditors of the Company under section 233B of the Companies Act, 1956 for the year 2011-2012.

Transfer to Investor Education and Protection Fund

The Company has transferred a sum of Rs. 6.02 lacs during the year 2011-12 to the Investor Education and Protection Fund established by the Central Government, in compliance with Section 205C of the Companies Act, 1956. The said amount represents unclaimed dividend pertaining to year 2003-04 which was lying with the Company for a period of 7 years from its due date of payment. Prior to transferring the aforesaid sum, the Company sent reminders to the shareholders for submitting their claims for unclaimed dividend. The amount of unclaimed dividend for subsequent years is given in the Notice of ensuing AGM.

Information of Unpaid Dividend on Shree Cement and Ministry of Corporate Affairs Website

Ministry of Corporate Affairs vide notification dated 10th May, 2012 has notified 'Investor Education and Protection Fund (Uploading of information regarding unpaid and unclaimed amounts lying with companies) Rules, 2012', which mandates every company to submit information of unclaimed and unpaid dividend amounts as referred to in subsection (2) of Section 205C of the Companies Act, 1956 and also upload investor-wise details of unclaimed and unpaid dividend on website of the MCA as well of the Company.

For the year ended 31st March, 2011, the said information was required to be uploaded latest by 31st July, 2012 (further extended till 31st August, 2012). Company is duly complying with the above requirement and is uploading the investor-wise details of unclaimed dividend on IEPF portal of Ministry of Corporate Affairs (MCA) and website of the Company.

Shareholders are advised to visit the website of the Company viz. www.shreecement.in and check their unpaid / unclaimed dividend status and contact the Company for encashment if the same is depicting unpaid.

Corporate Governance

A separate section on Corporate Governance together with a certificate from the Auditors of the Company regarding full compliance of conditions of Corporate Governance as stipulated under clause 49 of the Listing Agreement with the Stock Exchange(s) forms part of Annual Report.

Particulars of Employees'

As required under 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 employees are set out in the Annexure I forming part of this report.

Particulars of Conservation of Energy, Technology Absorption and Foreign Exchange Earning / Outgo.

The information required under Section 217 (1)(e) of the Companies Act, 1956 read with Companies (Disclosure of particulars in the report of the Board of Directors) Rules, 1988 is set out in Annexure II forming part of this report.

Acknowledgement

Your Directors take this opportunity to place on record the co-operation and support received from various agencies of the Central Government and State Government(s), various Government departments and agencies, financial institutions and banks. Your Directors thank and express their gratitude to various stakeholders i.e. customers, dealers, suppliers, transporters, advisors, local community etc. for their committed engagement with the Company. Your Directors further appreciate the support and co-operation received from the employees for their contribution to the growth and success of the Company. Your Directors further express their deep sense of gratitude to the Shareholders for their confidence, faith and trust in the Company.

Your Company's consistent growth has been made possible only through the dedication and support of all the above stakeholders and we expect this support and confidence to keep growing.

For and on behalf of the Board

Place: Kolkata B. G. Bangur

Date: 23rd August, 2012 Chairman

Mar 31, 2011

We have pleasure in presenting this Annual Report of the company for the year 2010-11.

Financial Results

Brief summary of the Companys financial performance is as under:

Rs. in crore except per share data

Particulars 2010-11 2009-10 +/ - %

Net Sales 3511.87 3,632.12 -3.3%

Other Income 46.77 75.84 -38.3%

Total Revenue 3558.64 3,707.96 -4.0%

Operating Expenditure 2626.23 2,129.61 23.3%

Earning before Interest, Depreciation and Taxes (EBIDTA) (before exceptional items) 932.41 1,578.35 -40.9%

Interest 97.83 76.58 27.7%

Earning before Depreciation and Taxes (before exceptional items) 834.58 1,501.77 -44.4%

Depreciation 675.76 570.43 18.5%

Earning before Taxes and Exceptional Items 158.82 931.34 -82.9%

Exceptional Items 48.47 63.43 -23.6%

Earning before Taxes 110.35 867.91 -87.3%

Taxes:

Current Tax 21.71 208.85

Deferred Tax -59.85 -2.01

MAT Credit Entitlement -2.13 -

Prior Period Tax (Net) -58.74 -14.76

Fringe Benefit Tax of Earlier Years Written Back -0.34 -0.27

Earning after Taxes 209.70 676.10 -69.0%

Earning Per Share (EPS)

Basic and Diluted 60.19 194.07 -69.0%

Cash 236.99 369.77 -35.9%

Appropriations:

Interim Dividend @ Rs. 6/- per share & Final Dividend @ Rs. 8 per share on Equity share (Previous year Interim Dividend @ Rs. 5/- per share & Final Dividend @ Rs. 8/- per share on Equity share) 48.77 45.29

Tax on dividend distribution 7.99 7.59

Transferred to Debenture Redemption Reserve 125.00 75.00

Transferred to General Reserve 25.00 220.00

Dividend

The Directors are pleased to recommend a final dividend @ Rs. 8/- per share. Together with interim dividend of Rs. 6/-per share, total dividend for the year 2010-11 would be Rs. 14/- per share. (Previous year total dividend amounted to Rs. 13/- per share). The total outgo on dividend payment for the current financial year amounts to Rs. 56.76 crore including Dividend Distribution tax of Rs. 7.99 Crore as against Rs. 52.88 crore including Dividend Distribution tax of Rs. 7.59 Crore in the previous year.

Research and Development

Company has strong R&D focus with a dedicated team of professionals who regularly undertakes new initiatives aimed at improving quality and energy efficiency, utilizing alternative fuel and raw materials, new product development and resource optimization.

Sustainability - Triple Bottom-line approach

Companys approach to sustainability encompasses the triple bottomline approach of measuring business performance against the three aspects of people, planet and profit all of which carry equal importance to achieve overall growth. Company has undertaken several measures towards conservation of natural resources, climate change and environment management and to run its operations in a way which enhances the overall prosperity of its stakeholders. Environment Management - Company has adopted a structured approach to environment management which encapsulates measurement of impact, identification of remedial measures and implementing the same as well as continual improvements thereon. This structural approach has ensured that environment management is recognized as one of its key parameter in all business decisions. Some of the accomplishments of the company in Environment management included saving of petcoke fuel equivalent to approx. 1.05 Lac ton through successful operation of Waste Heat Recovery Power plants, saving of water to the tune of approx 0.68 million kilo liters at its Beawar power plant through replacement of Water Cooled Condensers by Air Cooled Condensers (ACC) and plantation of more than 50000 tree saplings for increasing the green cover. Realizing the need for water conservation in the water deficient status of its area of operations, Company decided to implement ACC in its 300 MW power project also. Several rain water harvesting structures have been constructed to recharge the ground water in the surrounding areas of Companys operations.

The Waste Heat Recovery power generation plants have enabled saving of 350064 Ton CO2 emission. Company is in advanced stage of registering these projects with United Nation Framework Convention on Climate Change (UNFCCC) under the Clean Development Mechanism (CDM). Company actively participated at various global forums which are working on various initiatives on matters relating to energy conservation, optimal use of resources and environment protection etc. Company also celebrated World Environment Day on 5th June 2010 and organized workshops to create awareness about environmental safety & management, conservation of natural resources and reduction in pollution.

Social Aspect - Corporate Social Responsibility

The Corporate Social Responsibility activities at Shree are aimed at creating sustainable livelihood capabilities and increasing the level of prosperity of the local community. For this, Company has undertaken several measures for providing health and education facilities, infrastructure support to the local community and other welfare activities. Notable measures taken by the company in its endeavor towards social upliftment are:

Health - Company provides 24x7 free medical services at its premises as well as free ambulance and fire fighting services to the people in its local community. It also provides medical services through fully equipped mobile medical team which visits the nearby villages on a regular basis and distributes free medicines. Shree also conducts health camps, eye camps and AIDS awareness campaign from time to time. Education - Company contributed Rs. 2 crore to an Education Society which is engaged in upliftment of the literacy level and standards of education. The Companys contribution shall help the Society in furthering its objectives. Shree has also undertaken an education project "SHREE KI PATHSHALAÃ for drop out or non-school going girls in nearby areas of its operations. It has established rural library at nearby villages to help villagers develop reading habits. It organized workshop for school children to advise them about career choices. Company supported an NGO for providing notebooks on subsidized rates to under privileged children. It also contributed financially for sports equipment and celebrating Children Day, Republic Day, Independence Day etc.

Infrastructure - Company constructed cement concrete road, ward and prayer hall at Government Hospital Beawar at approx. cost of around Rs. 31 lacs. It also provided around 250 water tanks to local bodies and Panchyat for arranging drinking water. It constructed hygiene and sanitation facilities at schools in the nearby villages and created passenger facilities at local bus stand.

Women Empowerment - National Girl Child Day and International Women Day was observed on 14th January and 8th March 2011 respectively in nearby villages in which theme based folk media programmes were organized on the subjects of girl child education, right age of marriage, gender discrimination. Around 300 people participated in the programs.

Cultural participation - To promote cultural harmony among people, company regularly supports various religious and social programmes. One such program where Shree makes its contribution is "Teja MelaÃ a local fair which is celebrated with a wide participation from local community. The celebration of annual Sankatmochan Hanuman Temple function is also another cultural promotion activity which Shree carries out every year. Artistes from different countries are invited to give their unique art performances and exhibit their culture. Large numbers of people from local community come and enjoy these performances and also get acquainted with different cultures. j-

Occupational Health and Safety

Company has well defined health and safety policies which are widely circulated internally to ensure appropriate attention to health and safety hazards and to build a safe working environment. All the plants have medical facilities with qualified doctors. Annual medical checkup is mandatory for all employees. Training related to safety aspects is provided to all employees prior to engaging them. During the year, 328 safety training programs were conducted. Company motivated its contractors also to adopt similar Occupational Health and Safety practices while engaging them for Company work.

There is a system of monthly review of the activities done in the area of health, hygiene and safety and to address challenges in these areas. Regular personal development sessions like "Art of livingÃ etc. are also conducted with a view to maintain work life balance.

Human Resources

Company strives to provide a fair, meritorious and competitive work environment to attract and nurture best talents and provides them with a work environment which is conducive to both professional and personal growth. 63041 man hours of training was imparted during the year which works out to 19 manhours per employee. Around 150 people were provided with multiskills training programmes to help them acquire cross functional expertise and use it through job enlargement and increased responsibilities. Around 800 employees were recruited during the year across various skill categories. Various schemes were introduced to enhance overall employee working environment. Company introduced "Mentoring the MentorsÃ scheme wherein specific employees were identified to act as mentors for new comers and assist them in their initial period in the company. Company follows a policy of encouraging youth by giving them higher and challenging responsibilities and open work environment. With average age of employees at 35.61 years, the Company is reckoned as a young organization. The year 2010-11 was celebrated as "Youth YearÃ. Its employee base has a blend of professionals which constitutes nearly 30% of total strength.

Company has developed a unique "Shree family cultureÃ which binds its people together and keeps them happy. As a result, their engagement level in the company is also very high.

In recognition of its excellent human resource management which rests on work-life balance, the company was awarded the "Greentech HR Excellence Silver award in best Strategy-2010.Ã Companys HR policy is targeted towards total prosperity management. Its innovative HR practices and family culture, promotion of youth, better compensation and avenues for merit based growth are some measures which has helped it attract and retain best talent in the industry. Total number of employees as on 31.3.2011 was 3645.

Corporate Sustainability Report

Company issued Corporate Sustainability Report, independently assured by Ernst and Young, for the year 2010 highlighting the work it has done across the three dimensions of the triple bottom line. Your Company has followed the highest level A+ for reporting the triple bottom line performance.

Risks and Concerns

Company has incorporated a Risk Management Framework to facilitate identification and effective addressal of all its business risks. As part of this framework, board members are regularly apprised of the risk assessment and mitigation procedures. Key Risks identified by company are as below:

Over capacity in cement - Already the cement industry is feeling the pressure of over capacity which has impacted realizations and operating margins during the year. With more capacities coming up, these concerns persist in future as well. However, company believes that consistently increasing cement demand will be able to match the increased supplies in the medium to long term.

Volatility in Power Sale prices - Company is expanding its power capacity for merchant sale purpose. As merchant power market has high price volatility, company is exposed to volatile power price movements. Company actively manages this risk by keeping a close eye on market movements. Company has its own trading division which helps it track market movements and sell power with different parties. Input cost rise - Cost of fuel for cement production as well as for power generation has increased significantly during the year. Cost of raw materials such as Gypsum and Fly Ash has also increased during the year. Transportation cost has also risen as a result of rising diesel prices. Your Company is adequately geared to meet these challenges through utilization of alternate raw material and fuel sources, increased energy efficiency and better logistics management. Currency risk - The exchange rates of Indian currency vis a vis foreign currencies are volatile which exposes the Company to forex risk on its foreign currency borrowings and Letter of Credits (L / Cs) for imports. Company, as a policy, hedges all its foreign currency borrowings through appropriate forward covers and swap instruments. All imports under letter of credit (barring some short duration or small amount L / Cs) are also hedged through appropriate forward cover. Govt. Policies - Macro policies including interest rate policies of the Government will impact investment demand.

Awards & Recognitions

Company continued to be recognized and appreciated at various forums of repute for its efforts to consistently implement and follow best practices in the field of Corporate Governance, Environment Management, Energy Efficiency, Human Resources, Information

Technology, Safety etc. Notable among them are National Award for Excellence in Energy Management 2010 from the Ministry of Power, CII-ITC Sustainability award, Golden Peacock Award for Climate Security 2010 and Greentech HR Excellence Silver award in best Strategy-2010.

Directors

Dr. Y.K. Alagh and Shri Shreekant Somany, Directors of the Company, would retire by rotation at the forthcoming Annual General Meeting in accordance with the provisions of the Companies Act, 1956 and Companys Articles of Association.

Shri Amitabha Ghosh has ceased to be a Director of the Company w.e.f. 27th May, 2011. Shri Nitin Desai has been appointed as Additional Director of the Company w.e.f. 27th May, 2011.

Directors Responsibility Statement

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

+ The applicable accounting standards have been followed in the preparation of the annual accounts for the year ended 31st March, 2011 and in case of material departures, proper explanation has been given in the Accounts and notes thereon. + Such accounting policies (as mentioned in the Notes to the Accounts) have been selected and applied consistently, and that the 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 your Company as at 31st March, 2011 and of the profit of your Company for the year ended on that date. + Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of your Company and for preventing and detecting fraud and other irregularities. + The annual accounts are prepared on a going concern basis. Auditors

The Statutory Auditors of your Company M/s. B.R. Maheswari & Company, Chartered Accountants would retire at the ensuing Annual General Meeting. They have confirmed their eligibility under section 224 of the Companies Act, 1956 and willingness for re-appointment as Statutory Auditors of the Company.

The Board of Directors recommends the re-appointment of M/s. B.R. Maheswari & Company as Statutory Auditors from conclusion of ensuing Annual General Meeting till the conclusion of next Annual General Meeting.

The observations of the Auditors in their report are self explanatory and, therefore, do not call for any further comments of the management on the observations of auditors.

Cost Audit

Pursuant to the directives of Central Government, your Company has appointed M/s. K.G. Goyal & Associates, Cost Accountants as Cost Auditors of the Company under section 233B of the Companies Act, 1956 for the year 2010-11.

Corporate Governance

A separate section on Corporate Governance together with a certificate from the Auditors of the Company regarding full compliance of conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement with the Stock Exchange(s) forms part of Annual Report.

Particulars of Employees

As required under 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 employees are set out in the Annexure I to this report which forms part of this report.

Particulars of Conservation of Energy, Technology Absorption and Foreign Exchange Earning / Outgo The information required under Section 217 (1)(e) of the Companies Act, 1956 read with Companies (Disclosure of particulars in the report of the Board of Directors) Rules, 1988 is set out in Annexure II annexed hereto and forms part of this Report.

Acknowledgement

Your Directors take this opportunity to place on record the co- operation and support received from various agencies of the Central Government and State Government(s), financial institutions and banks. Your Directors thank and express their gratitude to various stakeholders i.e. customers, dealers, suppliers, transporters, advisors, local community etc. for their committed engagement with the Company. Your Directors further appreciate the support and co- operation received from the employees for their contribution to the growth and success of the Company. Your Directors further express their deep sense of gratitude to the Shareholders for your confidence, faith and trust in the Company.

Your Companys consistent growth has been made possible only through the dedication and support of all the above stakeholders and we expect this support and confidence to keep growing.

For and on behalf of the Board

Place: Kolkata B. G. Bangur

Date: 27th May, 2011 Executive Chairman

Mar 31, 2010

The Directors are pleased to present their report on your Company for the year ended 31st March, 2010.

Financial Results

The Company achieved a turnover of Rs-3632 crores recording a growth of 34%-Profit before Tax and Net Profit were at Rs-868 crores and Rs. 676 crores, up 20% and 17% respectively-The summary of your Companys financial performance is as under:

Particulars 2009-10 2008-09 +/ - in %

Net Sales 3,632.12 2,710.63 34%

Other Income 75.84 39.15

Total Revenue 3,707.96 2,749.78 35%

Operating Expenditure 2,129.61 1,757.14

Earning before Interest, Depreci ation and

Taxes (EBIDTA) (before exceptional items) 1,578.35 992.64 59%

Interest & Financial Expenses (Net) 76.58 33.41

Earning before Depreciation and Taxes

(before exceptional items) 1,501.77 959.23 57%

Depreciation 570.43 205.39

Earning before Taxes and Exceptional Items 931.34 753.84

Exceptional Items 63.43 30.93

Earning before Taxes 867.91 722.91 20%

Taxes:

Current Tax (including Fringe Benefit Tax) 208.58 136.87 -

Deferred Tax (2.01) 8.07 -

Prior Period Tax (Net) (14.76) - -

Earning after Taxes 676.10 577.97 17%

Earning Per Share (EPS)

Basic and Diluted 194.07 165.91 17%

Cash 369.77 227.18 63%

Appropriations:

Interim Dividend @ Rs- 5/- per share & Final Dividend

@ Rs-8 per share on Equity shares (Previous year Interim 45.29 34.84 -

Dividend @ Rs-5/- per share & Final Dividend @ Rs-5/- per share on Equity shares)

Tax on dividend distribution 7.59 5.92 -

Transferred to Debenture Redemption Reserve 75.00 - -

Transferred to General Reserve 220.00 80.00 -

Dividend

Your Directors have declared an interim dividend of Rs-5 per share and have recommended a final dividend of Rs-8/- per share for the year 2009-10 totaling to Rs.13/- per share-(Previous year Interim Dividend of Rs-5/- per share and final dividend of Rs-5/- per share, total Rs.10/- per share).

Management Discussion & Analysis Economic Scenario

The year 2009-10 began with a subdued global scenario-However, persistent efforts by governments across the globe to revive their financial system led to gradual improvement in the global economy during 2009-10-These efforts enabled resurgence of economic activities and reviving overall consumer demand-Majority of economies have started to come on track with their economic indicators turning positive.

Indian economy displayed good resilience in navigating the above global turmoil-Inherent strengths of the Indian economy like its domestic consumption led growth and healthy banking system acted as a cushion to absorb the external shocks-Supported by the government stimulus package, easy monetary policy and changed global financial environment, the Indian economy witnessed a positive turnaround during the year from lows of previous year.

The economy is expected to grow at 7.4% in 2009-10 against 6.7% in 2008-09 with the industrial and service sector expected to grow at 9.4% and 8.3% respectively-Manufacturing sector is expected to clock a double digit growth of 10.2%.

Cement Industry Outlook

The Year 2009-10 was a good year for the cement industry-The year witnessed pleasant turnaround in the demand which picked up on account of revival in the economy-The industry proved wrong all the initial apprehensions about a weak demand growth prevailing during the beginning of the year-Strong demand from the infrastructure and housing especially rural and low cost affordable housing segment helped the industry turn out excellent performance-Cement consumption increased to 198 million ton against 178 million tons in previous year registering a double digit growth of 11%-Cement demand in North India also increased in line with the all India growth.

Going forward, increased investment on infrastructure development, government impetus to housing especially rural/mass housing and developments in the real estate market will continue to drive cement demand positive growth-The government target of building 20 km of roads each day is a big push to infrastructure development-We expect that cemented roads will also form part of this target-The ambitious Industrial Freight Corridor, Delhi Mumbai industrial corridor project etc-will increase the demand for cement- We believe that cement demand will continue to grow at a healthy pace.

However, almost all manufacturers are pursuing capacity augmentation to meet the growing demand-The year gone by witnessed capacity addition of around 50 million tons-The industry is expected to further add around 45 million tons capacity in the next two years-This is going to result in capacity overhang-Further, the cost of almost all inputs like Power & Fuel, Raw materials, Freight etc- has increased significantly-Therefore, going forward, the over capacity coupled with hardening input costs, is likely to exert pressure on margins of cement companies.

Company Performance

The year gone by witnessed company recording high growth across all its operations-Salient features of the year were as follows:

- Turnover increased 34% to Rs-3632 crore

- Cement Production up 21% to 93.7 lac tons

- Operating profit rose 59% to Rs-1578 crore

-Power consumption per ton of cement was reduced from 76.72 kwh per ton to 75.25 kwh per ton while Fuel consumption as a % to clinker was also reduced from 10.75% to 10.64%

-Contribution of power business to the topline more than doubled

-Company continued its leadership position across North India cement region

In year 2005, Company had set a vision of being a 10 Million Ton Per Annum (MTPA) Cement Company by 2010-Company has not only realized its vision but has surpassed it by achieving 12 MTPA mark-It commissioned two grinding units, one of 1.2 MTPA at Suratgarh in Rajasthan and another of 1.8 MTPA at Laksar in Uttarakhand. Company continues to tread ahead on the path of growing further. Towards this, it is setting up 1.0 MTPA capacity Clinkerisation unit (U-VIII) at Ras and 1.0 MTPA grinding unit near Jaipur-Both these capacities are expected to be completed during 2010-11.

Power Business

The company further strengthened its power business in 2009-10-It increased its power sale volumes from 117 MUs to 264 MUs-Power business contributed Rs-176.95 crore in the turnover as against Rs.80.63 crore recorded in the previous year-Sale of Power ensured continuous maximum generation from the power plants-This has also led to improvement in the efficiency of power plants.

It commissioned the 46 MW Waste Heat Recovery Projects [Green power plants, (GPPs)]-This is the largest GPP capacity in the world cement industry excluding China.

It also commissioned the first unit of 50 MW of its 100 MW (2 x 50 MW) thermal power plants-This has taken the total power generation capacity to 210 MW-All the above capacity expansions were implemented within budget and time estimates.

Company has embarked on further capacity expansion and has begun work on setting up 300 MW (2 x 150 MW) power plant with biggest Air Cooled Condenser in India at Beawar-The power plants are expected to come up by Dec-2011 and shall be used for the purpose of merchant sale of power.

Buoyed by its success in power business, the company has ventured into Power trading activity and obtained Category-1 Inter State Power Trading License from the Central Electricity Regulatory Commission (CERC) in March 2010-It has established a separate power trading division consisting of experienced professionals to further expand its footprint in this area-Company has already become full member of Indian Energy Exchange (IEX) for trading power.

Company is exploring the possibilities to further enhance its power business.

Information Technology

The company is one of the few companies to have rolled out Oracle E business suite in its entirety with all modules at one go-It successfully demonstrated its capability to align its performance to changed technological environment by running the E business suite across all its units-Company also implemented Performance Management System (PMS) software to optimize its power generation and consumption.

In order to further strengthen the security and safety of its business information, your company plans to implement Disaster Recovery Plan. Towards this it has already created a new state of art Data Centre.

Internal Control

Company believes that an effective internal control system is essential for ensuring asset security and operational efficiency- Company has a full fledged internal audit department headed by an Assistant Vice President (AVP) which undertakes internal audit at regular intervals across all locations to test the efficacy of internal controls and compliance of internal and statutory requirements-It has also engaged services of a professional firm to carry out internal audit spanning all business processes-Specific assignments like depot audits etc-are also given from time to time to external agencies to carry out internal control checks-All transaction controls are continually reviewed and risks of inaccurate financial reporting are dealt with immediately and addressed.

All significant audit observations and follow-up actions thereon are reported to the Audit Committee-Audit Committee reviews the adequacy and effectiveness of the Companys internal control environment and monitors the implementation of audit recommendations including those relating to strengthening the Companys risk management policies and systems.

Research and Development

Company has a dedicated R&D cell comprising of experienced professionals-The Research cell has undertaken various initiatives resulting in utilization of cleaner technology, alternate raw materials and fuels etc-R&D cell made a breakthrough by undertaking a unique initiative of producing synthetic gypsum which will help reduce usage of natural gypsum which is a limited natural resource-Company is the first in India to accomplish such a project-A patent has been applied for this unique achievement-The project conveys companys commitment to sustainable business operations through conservation of limited natural resources-Other R&D activities during the year included:

- Reduction of energy consumption through energy audit

- Application of computational fluid dynamics to reduce pressure drop

-Identification of various wastes to use as alternative raw materials and fuels.

Sustainability - Triple Bottom line approach

The concept of Sustainability is at the core of all our business activities-Your Company believes that the long-term growth and success of the business goes hand in hand with ensuring a sustainable future for the planet and helping society to prosper.

Concern for environment has been systematically synchronized with companys operational policies and decisions in a value accretive manner rather than as a mandatory legal compliance- Towards this, some of the initiatives undertaken by the company are as under:

- Implemented the Waste Heat Recovery Project-The project serves the dual purpose of reducing the emission of waste gases into the atmosphere as well as conserves the natural resources for utilization in power generation.

- Installed air cooled condensers at its Beawar Power plants to conserve water consumption.

- Developed Synthetic Gypsum to conserve natural gypsum which is a limited natural resource.

- Contributed Rs-22 crores for proposed laying of a railway track from Beawar station to Ras which will reduce road traffic thereby reducing pollution caused by burning of diesel in vehicles.

It has continuously been issuing its Corporate Sustainability Report highlighting the work it has done across the three dimensions of the triple bottom line-This report, independently assured by Ernst and Young, has been presented in accordance with the ÃG3 revision of Global Reporting Initiative (GRI) Guidelines-Your Company has followed the highest level ÃA+ for reporting the Ãtriple bottom line performance.

Company achieved the unique distinction of being the first Process & Cement manufacturing company in the world to be awarded BS- EN 16001-2009 certification, an Energy Management System instituted by British Standard Institute - UK-Companys holistic approach of imbibing energy efficiency concepts in all its activities enabled it to receive this certification.

Conducting business with responsibility towards the society is imbibed in the culture of the company-Company strongly believes that a corporate is an integration of various elements of the society who have come together to reap the benefits of collective wisdom- Hence corporate activities are as much directed by the societal needs as it ais by economic concerns-This approach has helped the company in providing adequate consideration to the interests of all stakeholders. Companys economic progress creates several opportunities for local community in terms of employment, social engagement and overall prosperity-Thus, a majority of companys workforce is from the local area-Total contribution to the exchequer during the year stood at Rs. 938 crore-This revenue in the hands of Governments, will boost developmental activities.

Company undertook various activities towards fulfilling its social responsibility-Notable among them were:

-Education - Company provides financial support to poor children for Education-It distributes educational materials for children every year-To develop IT education in rural youth, Company organizes computer awareness programmes in the nearby villages.

-Support to Villagers - In a unique initiative, company persuades the nearby villagers to own Trucks and use them for transportation of Companys material-Company assists such villagers in getting finance for purchasing of trucks and then engages them for companys business-This provides a sustainable source of income generation to the local community

-Infrastructure and Community Development - Company has constructed several roads in the area of its operations that serves the dual purpose of facilitating quicker movement of goods for the company as well as providing the local community with safe and faster way of communication-Company undertakes many community development facilities with the support of local panchayats such as construction of Community halls, boundaries of schools, water tanks and renovation of Dharmashala etc-Company has taken up Maternal and Child Health Project in nine villages-It has opened centres to impart vocational training like sewing etc-to women to enable them to generate sustainable livelihood thereby promoting women empowerment.

-Cultural Programmes - As part of its cultural responsibility towards society, Company celebrated its annual Hanuman Temple function in February, 2010-A unique cultural event was organized where the best known international artists of UK, Sweden, Germany and China delivered their performance-The event was again congregated in Jaipur to showcase a string of magical performances-These programmes were attended by a large section of people ranging from business associates to Government employees and other stakeholders.

-Support to Indian Hockey - Company offered to provide financial support to Indian Hockey players so as to lift the morale of the players who had stopped their training for upcoming Hockey World Cup to be held in India-Company sponsored the hockey team and contributed Rs-30 lacs to the team.

Human Resources

People are at the forefront of all activities undertaken by the company-Company believes in providing a fair and competitive working environment with meritocracy and integrity as its core values-Company encourages cross functional expertise-Career path of employees is structured accordingly at early stage to ensure their holistic development.

The average age of the employees in the Company as at 31st March 2010 was 35.80 years as against 37.05 years at the same time last year-In order to promote youth involvement, the company has decided to mark the calendar year 2010 as ÃShree Youth YearÃ-It empowers young employees by providing them with challenging assignments, encouraging development of managerial capabilities, providing them necessary training and facilitating for their active participation in decision making process. As a measure of this philosophy, a ÃShree Youth ClubÃ has been formed having ÃSHREE SHAKTI Ã YUVA SHAKTIÃ as its motto.

Companys employees relish accepting challenging job assignments and completing them within set targets- Accomplishment of such assignment with great vitality spurs them to keep aiming and achieving higher-The enabling environment of the Company always keeps them vibrant & active and developed a passionate feeling for achieving something extra-ordinary-All these measures have enabled the company to reduce attrition rate to 5.3% against 5.9% last year.

Total number of employees as on 31.3.2010 is 3244.

Organizational Health & Safety

Company is committed to provide a safe and healthy work place for its people-It has comprehensively laid out Health and Safety policies which are placed in all departments and work sites-In order to create awareness about safe working practices, company has displayed slogans, warning signs and pictorial depiction of accident prone practices at all conspicuous places to ensure appropriate attention from all-A dedicated safety department is in place to monitor safety practices in the company, equip all workers with adequate safety equipments and knowledge-Company conducts safety meeting on 1st to 4th day of each month at different locations in the presence of large audience of workers and employees to review measures related to health, hygiene, safety and improvement of the environment.

Risks and Concerns

Risk management is essential for sustainable stakeholder value creation-Company has a well defined risk management framework wherein it has documented process-wise/department-wise risk inventory and its mitigation-On the one hand this framework acts as a response tool to mitigate risks which may have an impact on the business operations and on the other hand it facilitates converting risk into potential opportunity.

Key Risks identified by the company are as below:

-Over capacity in cement - With large cement capacities coming up, there are concerns of over capacity in the cement sector which may have pressure on operating margins- However demand growth is also expected to be strong-While new supplies may exert pressure on margins in near term, it will rather help in satisfying increased demand in long run-It is constantly endeavoring to increase its market share through innovative marketing and efficient customer service.

-Input cost rise - Input costs hardening is another area of concern-Rising cost of raw materials, fuel and freight costs may further pressurize the operating margins-Again this requires operational flexibility to face these challenges-Company has been and will continually try to navigate the situation through utilization of alternate raw material and fuel sources, increased energy efficiency and better logistics management.

-Project Execution - Delay in project execution may lead to increased costs as well as lost opportunity-There is a risk that the company may not be able to build up capacities to capitalize on market opportunities-Company has dedicated project management team which is regularly assisted by outside consultants and guided by the senior management.

-Volatility in Power Sale prices - Company is expanding its power capacity for merchant sale purpose and has also commenced power trading activity-As merchant power market has high price volatility, at times, because of low rates in the merchant market, the power may have to be sold at non- remunerative prices-Company seeks to actively manage this risk by keeping a close eye on market movements and entering into monthly / yearly contracts with buyers.

-Interest rate and Currency risk - Company maintains all its long term borrowing on fixed interest rate and hedges all its foreign currency borrowings through adequate forward covers and swap instruments-All imports under letter of credit are also hedged through appropriate forward cover.

Corporate Governance

A separate section on Corporate Governance together with a certificate from the Auditors of the Company regarding full compliance of conditions of Corporate Governance as stipulated under clause 49 of the Listing Agreement with the Stock Exchange(s) forms part of Annual Report.

Awards & Recognitions

Your Companys practices and efforts in the field of Corporate Governance, Environment Management, Energy Efficiency, Human

Resources, Information Technology etc-continued to be recognized and appreciated by various agencies and forums this year also- Some of the awards and recognitions received during the year were first prize in energy conservation by Govt of India, Best Quality Excellence Award by NCCBM, Sustainability award by CII, Golden Peacock Award for Climate Security and Certificate of Excellence by Employers Associations of Rajasthan.

Directors

Shri O-P-Setia and Shri R-L Gaggar, Directors of the Company, would retire by rotation at the forthcoming Annual General Meeting in accordance with the provisions of the Companies Act, 1956 and Companys Articles of Association and being eligible, offer themselves, for re-appointment.

Directors Responsibility Statement

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

-The applicable accounting standards have been followed in the preparation of the annual accounts for the year ended 31st March, 2010 and in case of material departures, proper explanation has been given in the Accounts and notes thereon.

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

-They have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of your Company and for preventing and detecting fraud and other irregularities.

- The annual accounts are prepared on a going concern basis- Auditors

The Statutory Auditors of your Company M/s-B-R-Maheswari & Company, Chartered Accountants would retire at the ensuing Annual General Meeting and have confirmed their eligibility and willingness to accept office of Statutory Auditors, if re-appointed.

The Board of Directors recommends the re-appointment of M/s-B-R Maheswari & Company as Statutory Auditors from conclusion of ensuing Annual General Meeting till the conclusion of next Annual General Meeting.

The observations of the Auditors in their report are self explanatory and, therefore, do not call for any further comments of the management on the observations of auditors.

Cost Audit

Pursuant to directives of Central Government, your Company has appointed M/s-K-G-Goyal & Associates, Cost Accountants as Cost Auditors of the Company under section 233B of the Companies Act, 1956 for the year 2009-2010-The audit of Cost Accounts of the Company is being done by them.

Particulars of Employees

As required under 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 employees are set out in the Annexure I to this report which forms part of this report.

Particulars of Conservation of Energy, Technology Absorption and Foreign Exchange Earning / Outgo

The information required under Section 217 (1)(e) of the Companies Act, 1956 read with Companies (Disclosure of particulars in the report of the Board of Directors) Rules, 1988 is set out in Annexure II annexed hereto and forms part of this Report.

Acknowledgement

Your Directors take the opportunity to place on record the co- operation and support received from various agencies of the Central

Government and State Government(s), financial institutions and banks. Your Directors also express their deep sense of gratitude to various stakeholders i.e-customers, dealers, suppliers, transporters, advisors etc-for their continuous committed engagement with the Company-Your Directors also thank the communities and villages that border Companys plants for their support in Companys continued growth.

Your Directors further appreciate the support and co-operation received from the employees for their contribution to the growth and success of the Company-Your Companys consistent growth has been made possible by only through their dedication, innovation, excellence and support.

And to you, our Shareholders, your Directors are deeply grateful for your confidence, faith and trust in the Company.

For and on behalf of the Board Place: Kolkata B.G.Bangur Date:20TH mAY, 2010 Executive chairman

Disclaimer: This is 3rd Party content/feed, viewers are requested to use their discretion and conduct proper diligence before investing, GoodReturns does not take any liability on the genuineness and correctness of the information in this article