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27 September 2023 | 11:19

Industry >> Cement

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ISIN No INE481G01011 BSE Code / NSE Code 532538 / ULTRACEMCO Book Value (Rs.) 1,747.06 Face Value 10.00
Bookclosure 11/08/2023 52Week High 8751 EPS 175.41 P/E 47.02
Market Cap. 238105.61 Cr. 52Week Low 6005 P/BV / Div Yield (%) 4.72 / 0.46 Market Lot 1.00
Security Type Other


You can view full text of the latest Director's Report for the company.
Year End :2023-03 


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

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

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

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

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

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

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

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

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

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


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

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

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

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

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

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

Energy Optimisation and Enhanced Productivity:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Human Resources

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

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

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


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

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

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

Setting Objectives and Reviewing Them Through Leaders Connect

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

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

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

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

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

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

Building Competence

Around 750,000 man-hours of safety training were

organised across units during the year.

A brief description of the various safety training elements

are as follows:

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

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

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

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

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

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

Facilitating Adherence to Safety

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

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

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

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

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

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

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

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

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

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

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

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

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

Verifying Compliance

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

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

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

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

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

Corporate Social Responsibility

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

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

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

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

Subsidiaries, Joint Ventures, and Associate Companies

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

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

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

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

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

Particulars of Loan, Guarantee, and Investment

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

Energy, Technology, and Foreign Exchange

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

Particulars of Employees

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

Business Responsibility and Sustainability Report

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

The BRSR forms part of this Report.

Contract and Arrangement with Related Parties

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

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

Risk Management

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

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

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

Key Business Risks identified by your Company:

Economic Environment and Market Demand

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

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



Inflation and Cost of Production

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

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

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


Legal and Compliance

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


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

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

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

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


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

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

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

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


Climate and Sustainability

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

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

Physical Risks

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

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

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

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

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

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

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

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

Information Technology

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

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


Talent Management

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


Geopolitical Tension

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

Internal Control Systems and their Adequacy

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


Retiring by rotation and continuing as Director

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

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

Meetings of the Board

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

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

• Audit Committee

• Nomination, Remuneration, and Compensation Committee

• Stakeholders’ Relationship Committee

• Corporate Social Responsibility Committee

• Risk Management and Sustainability Committee

• Finance Committee

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

Independent Directors

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

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

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

Formal Annual Evaluation

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

Board and Committee Evaluation

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

Independent/Non-Executive Directors Evaluation

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

A brief summary of the evaluation exercise

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

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

The details of the familiarisation programme for Independent Directors are available at https://www.

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

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

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

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

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

Key Managerial Personnel

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

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

Audit Committee

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

Vigil Mechanism / Whistle Blower Policy

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

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

The vigil mechanism / whistle blower policy is available at

Significant and Material Orders passed by the Regulators

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


Statutory Auditors

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

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

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

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

Cost Auditors

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

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

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

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

Secretarial Auditors

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

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

Compliance with Secretarial Standards

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

Annual Return

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

Other Disclosures

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

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

• There was no revision in the financial statements.

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

• Your Company has not issued any sweat equity shares.

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

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

Cautionary Statement

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

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


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

For and on behalf of the Board

Kumar Mangalam Birla

Chairman (DIN: 00012813)


28th April, 2023