cement manufacturing company ltd Management discussions

DEAR SHAREHOLDERS,

Your Directors have pleasure in presenting Twenty-First Annual Report of the Company together with the Audited Standalone & Consolidated Balance Sheet as at 31st March, 2022 and the Statement of Profit & Loss for the year ended on that date.

FINANCIAL PERFORMANCE

The highlights of the financial performance of the Company for the financial year ended 31st March, 2022 as compared to the previous financial year are as under:

(Rs in Lakhs)

Particulars	Consolidated		Standalone
	FY 21-22	FY 20-21	FY 21-22	FY 20-21
Total Income	2,25,519.07	1,74,815.28	2,20,102.21	1,68,516.16
Profit before Interest, Depreciation and Tax and exceptional items	37,862.33	36, 082.08	25,488.56	26,214.64
Interest & Finance Charges	1,334.03	698.86	1,236.19	1,255.87
Depreciation	12,162.95	8,999.41	7,214.85	4,773.29
Profit before exceptional items and tax	24,365.35	26,383.81	17,037.52	20,185.48
Exceptional Items	-	6,457.42	-	2,931.36
Profit/(Loss) before Tax	24,365.35	19,926.39	17,037.52	17,254.12
Provision for taxation:
- Current Tax	252.42	1,725.98	-	1,725.98
- Income tax for earlier years	(2.46)	9.56	(4.92)	-
- Deferred Tax	(562.09)	(522.14)	(589.73)	(199.07)
Net Profit after Tax	24,677.48	18,712.99	17,632.17	15,727.21
Other comprehensive income for the year, net of tax	(14.17)	14.45	2.33	5.42
Total comprehensive income for the year	24,663.31	18,727.44	17,634.50	15,732.63
Net profit attributable to:
Owners of the Company	24,677.48	18,712.99	-	-
Non-controlling interest	-	-	-	-
Total	24,677.48	18,712.99	-	-
Other Comprehensive Income attributable to:
Owners of the Company	(14.17)	14.45	-	-
Non-controlling interest	-	-	-	-
Total	(14.17)	14.45	-	-
Total Comprehensive Income attributable to:
Owners of the Company	24,663.31	18,727.44	-	-
Non-controlling interest	-	-	-	-
Total	24,663.31	18,727.44	-	-

OPERATIONAL REVIEW

During the year, the Government undertaken certain crucial steps and initiations which helped the entire nation to overcome from the pandemic situation. Vaccination played a curicial role in reducing number of deaths and restoring normalisation in daily life which contributed towards reestablishing confidence in the economy. We have also organised vaccination camp across all our locations and spontaneous response received from the employees and their families.

Lockdown led cement demand disruption in first quarter of the year. The lock down period thrown huge challenge before the manufacturing sectors. However, during the period cement industry withnesseth huge growth in terms of volume and prices. Better availability of labour, increase in construction of infrastructure alongwith low cost housing pushed the cement demand of the country.

During the year under review, your Company has manufactured 5,20,517 MT. of Cement Clinker as against 4,35,053 MT. recorded during the FY 20-21. Companys subsidiary M/s. Star Cement Meghalaya Limited has produced 16,54,582 MT. of Clinker as against 14,75,660 MT. during the FY 20-21. On consolidated basis total clinker production during the year was at 21,75,099 MT. as against 19,10,713 MT. during FY 2021. Your Company recorded overall growth in its performance during the year.

In terms of capacity utilisation, clinkerisation unit of your Company was able to utilise 55% of its installed capacity as against 54.93% during the FY 20-21. Similarly, the capacity utilisation of clinkerisation unit of its subsidiary M/s. Star Cement Meghalaya Limited was at 88.01% during FY 2122 as against 84.37% during the FY 20-21. On consolidated basis, the capacity utilisation of clinkerisation units was at 85.60% during the FY 21-22 as against 75.20% during FY 2021.

Your Company has been able to maintain the performance on grinding front too. During the year under review, total cement production on consolidated basis was at 34,05,671 MT. as against 26,36,338 MT. during the FY 20-21.

Similarly, your Company has been able to achieve sales volume of 33,92,185 MT. of Cement as against 26,44,048 MT. during the previous financial year.

During the year, your Company has taken various initiatives towards the cost cutting. In order to curb escalation of costs, the Company appointed Boston Consulting Group. Actions are being taken as per their advice. Their recommendations and impact will be seen in years to come.

BUY -BACK OF SHARES

During the year under review your Company has bought back 82,48,580 Equity Shares of Rs 1 each from all the existing

shareholders/ beneficial owners of the Company as on record date i.e., 26th August, 2021 on a proportionate basis through tender offer route at a price of Rs 150 each for an aggregate amount of Rs 1,23,72,87,000 (Rupees One Hundred Twenty Three Crore Seventy Two Lakhs and Eighty Seven Thousand only). The payments have been made to all the eligible shareholders on 13th October, 2021, subsequently the bought back shares have been extinguished resulting in reduction of paid up share capital to Rs 40,41,80,417 divided into 40,41,80,417 equity shares of Rs 1 each.

In accordance with Section 69 of the Companies Act, 2013, during the year ended 31st March, 2022, the Company has created a Capital Redemption Reserve of Rs 82,48,580 equal to the nominal value of Shares bought back as an appropriation from General Reserves.

DIVIDEND

The Board of Directors of your Company, after considering holistically the requirement of funds for Companys upcoming project at Lumshnong and Sonapur Plant and the relevant circumstances has decided that it would be prudent, not to recommend any Final Dividend for the Financial Year 21-22 (Previous year NIL).

INDIAN ECONOMY AND OUTLOOK - AT A GLANCE

After struggling with Covid for consecutive two years, when the world economy was poised for recovery Russia-Ukraine conflict has rattled the world and clouds for uncertainilty again covered the global economy. Due to outbreak of war crude oil prices rising day to day and the war has pushed up prices of gas, edible oil, metals and food crops etc. The share of Russia in Indias total trade is 1%, however indirect impact of war through market is huge. Inflation has reached a record high and the manufacturerers have started increasing prices and passing on higher input cost to the consumers. The cost of coal reached to a new height which has a direct bearing on fuel cost. The higher oil prices will lead to current account deficiency. The impact of war on Indian economy will be seen in this fiscal and it will be very challenging to overcome from the current scenario.

After contraction of economy in FY 20-21, Indian GDP recorded a growth @ 8.7%. Private sector investment is likely to increase to support recovery of economy.

The Governments revenue receipt has been increased considerably. GST collection has been reached at record high. Gross tax revenue has also been increased. Overall impact of economic development reflects in controlling budget deficit. There has been increase of Govt. debt due to support system provided to the poor class people for covid -19, but with the sign of recovery of the economy the same is expected to decline.

The Government of India has taken certain initiatives to improve economic stability of the country.

The Union Budget FY 22-23 prioritised four wings like PM Gati Shakti, Inclusive development, Productivity enhancement and financing of investment by which capital expenditure is expected to rise by 27%. The increased Government expenditures will attract private investment. Under Atma Nirbhar Bharat production linked incentive scheme will extend to 14 sectors. The Governement to invest in PLI scheme for domestic solar cells of Rs 24,000 Crore. The Government announced allocation of Rs 44,720 Crore to BSNL as capital investment for 4G spectrum. The Government initiative under PLI scheme for manufacturing advanced chemistry cell batteries which would attract domestic and foreign investments worth Rs 45,000 Crore. There will be investment of Rs 2.38 lakh Crore in Indian Railways. To boost competitiveness the Governement decided to revamp SEZ. The macro economic stability of the country indicates that country is prepared to meet the challenges for FY 22-23. Countrys large foreign exchange reserve, on going foreign investment and expanding exports revenue will progress the country towards development.

CEMENT INDUSTRY OVERVIEW

India is the second largest producer of cement in the world. Country has a lot of potential for development in cement sector. The infrastructure and construction sector are the major contributors for development of the sector. In view of deregulation, the sector had attracted huge investment from within the country and abroad.

Countrys cement industry promises huge potential for growth. Countrys cement production capacity stood at 545 MT. p.a. and currently producing 294 Mn tonnes (MT.) in F.Y. 2021. The Indian cement industry is likely to add ~80 Mn tonnes (MT) capacity by FY24, the highest since the last 10 years. Cement demand to register a CAGR of 8% between FY21-24 through infrastructure investments and healthy housing demand. Per-capita income and per capita cement consumption of the eastern and central regions are well below Pan-India numbers and thus provides huge scope for potential growth.

East India demand is expected to grow by 28% with a CAGR of 9% by FY 25-26. West Bengal and Bihar is the strongest cement consuming state in the eastern-region accounts with more than one-fourth of the regions total demand at ~22 Mn tonnes and 18 Mn tonnes respectively. Cement demand in West Bengal and Bihar has also grown in the last five years with the help of central governments housing for all as well as rapid infrastructure development in rural and urban sectors. In order to help the industry, the Government of India has taken various initiatives which will likely to boost cement demand in the country. The Union Budget allocated Rs 13,750 Crore for Urban Rejuvenation Mission like AMRUT and Smart Cities Mission and Swachh Bharat Mission. Under then housing for all segment, 8 Mn households will be identified according to the Budget FY 22-23 with Rs 48,000 Crore set aside for PM Awas Yojana.

NHAI plans to construct 25,000 kilometres of national highways in FY 22-23 at a pace of 50 km per day. As per the Union Budget FY 22-23, the government approved an outlay of Rs 1,99,107 Crore for the Ministry of Road Transport and Highways. The Government of India has allocated 111 lakh Crore under the National Infrastructure Pipeline for FY 19-25. The roads sector is likely to account for 18% capital expenditure over FY 19-25.

Under Phase-I of Bharatmala Pariyojana, the Ministry has approved implementation of 34,800 km of national highways in 5 years with an outlay of Rs 5,35,000 Crore. Under this scheme, 22 Greenfield projects (8,000 kms length) are being constructed; this is worth Rs 3.26 lakh Crore.

Prime Minister also launched the PM Gati Shakti - National Master Plan (NMP) for multimodal connectivity. Gati Shakti will bring synergy to create a world-class, seamless multimodal transport network in India. This will boost the demand for cement in the future.

In order to boost up demand of cement industry Government plans to spend Rs 1.97 lakh Crore in next 5 years for PLI schemes in 13 Sectors.

In view of increasing demand in various sectors such as housing, commercial construction and industrial construction, Countrys cement industry is expected to reach 420 Mn tonnes per annum (MTPA) by FY 2027. Eastern states are likely to contribute for the development of the region as their untapped markets are likely to be explored.

EAST & NORTHEAST SCENARIO - GATEWAY OF OPPORTUNITIES

The Government of India has initiated in various fonts for overall development of North Eastern Region of the country. On a range of indicators, the rate of development now a days is on the rise, with notable improvements in health, education, infrastructure development and industrialisation which contributed in development of socio economic standard of the Region.

As per Budget FY 22-23, Centre will fund infrastructure improvement and social development projects in North East Region which will create job opportunities and help improvement in employment sector in the Region. A new scheme PM-DIVINE will be implemented which will fund infrastructure and social development.

On the initiatives of the Prime Minister, Ministry of Road Transport and Highways has taken up an ambitious Special Accelerated Road Development Programme (SARDP-NE) for development of road network in the north eastern States of the Country. The Total Length identified under SARDP-

NE is 892.822 Km. There are 4(four) Numbers of projects with a total length of 263.364 km amounting to Rs 1994.90 cr to be Implemented by National Highways Infrastructure Development Corporation Limited (N.H.I.D.C.L.).

As per the Union Budget 2022, a new scheme, Prime Ministers Development Initiative for NorthEast, PM-DevINE, will be implemented through the North-Eastern Council. It will fund infrastructure, in the spirit of PM GatiShakti, and social development projects based on felt needs of the North-East. This will enable livelihood activities for youth and women, filling the gaps in various sectors. An initial allocation of Rs 1,500 Crore will be made.

Under PM-DEVINE construction of Aizal By- pass will be made at a cost of Rs 500 Crore, a pilot projects have been undertaken for construction of bamboo linked road at different locations in Mozoram at a cost of Rs 100 Crore.

During Covid, Oxygen plant was set up in Arunachal Pradesh and Rs 250 Crore was sanctioned for health care facilities in North East Region.

Gross Budget Allocation for Northeast Frontier Railway (NFR) is Rs 11,428.86 Crore. Budget Allotment for the FY 22-23 for the North-eastern States is 44% more than previous years allotment (Rs 6,913 Crore) and 370% more than the average of FY 09-14 allotment. As per policy of the Indian Railways work for 100% electrification of NFR routes are also going on which will boost the economy of North Eastern states and it will bring N.F. Railway at par with other Electrified Railway. Electrification work is already complete in 766 RKM in NFR and work is going on in 210 RKM section in NFR which is likely to be completed by FY22. Work in remaining 3216 RKM is planned to be completed by March, 2024. This will impart efficient, pollution free transportation needs of N. E. States. Under the North East Special Infrastructure Development Scheme (NESIDS), since 1st January, 2021, 30 projects worth Rs 413.63 Crore have been sanctioned in various North Eastern States under North East Special Infrastructure Development Scheme (NESIDS), which include 17 health projects worth Rs 231.19 Crore sanctioned for strengthening health infrastructure of NE States and combating outbreak of COVID-19.

Development of new Greenfield Airports at Holongi and Tezu in Arunachal Pradesh; Dibrugarh, Guwahati and Silchar Airports in Assam; Imphal Airport in Manipur; Barapani Airport in Meghalaya and Agartala Airport in Tripura, etc are ongoing projects in the NER.

As per Union Budget, West Bengal awarded high way project for Rs 25,000 Crore. The Government of West Bengal facilitating road connectivity across the State. In the State budget, the Government allocated Rs 4,546 Crore for development of roads and bridges. As per report of IBEF, in November 2020, the World Bank approved a USD 105 Mn project to improve inland water transport infrastructure in Kolkata. In December 2020, the State government approved construction of a deep sea port in Tajpur, which will be built for Rs 15,000 Crore (USD 2,028 Mn)

Implementation of aforesaid projects and initiatives of the Government will contribute in all round development in NER which will pool cement demand and lead to increase in per capita consumption of cement and would help the Company to increase its market share in the Region.

MARKET DEVELOPMENT

As a strategy, the North East Market continued to be the focus market for your Company. Cement demand was good throughout the year. Demand increased by 17% in NER against an all India average of 8%.

During the year under review your Company was able to sell 25,45,545 MT. of cement in NER market as against 21,07,800 MT. during the FY 20-21. During the year under review, around 20% of the total Cement demand in NER was catered to by the industry through imports from other regions including Bangladesh and Bhutan.

Overall Cement Sales accounted for 3.4 Mn Tonnes in FY 2122 as against 2.64 Mn Tonnes in FY 20-21.

In order to meet the clinker demand for the Siliguri Plant, during the year your Company has not made any export of clinker. (Previous year 46,526 MT.).

As a market leader in NER your Company has further consolidated dealers and sub dealers network. Currently your Company is associated with 2,100 dealers and 12,000 sub dealers. The Company has introduced a mobile application for dealers for payments, order booking, printouts of invoices and ledgers. This initiative is helping dealers in timely submission of GST returns.

During the year Star Cement Limited continued with the Brand Television Commercial with Akshay Kumar as brand Ambassador, one of the biggest Stars of Bollywood. Association of Akshay Kumar being the brand ambassador caused an uplift on the brand perceptions and has had a positive impact on the saliency of Star Cement as a brand. The Brand Campaign has the key message of highest one day strength which makes Star Cement ready for all challenges depicted with the tagline "Hain Tayyar Hum". The TV commercial is being seen across all major regional news channels in North East, West Bengal, Sikkim & Bihar. The commercial also have presence in the Digital medium and a heavy BTL presence through Surrogate boards, Hoardings, Wall Painting & Dealer/Retailer branding across North East, West Bengal, Sikkim & Bihar. The campaign hence has visible across 360 degrees in multiple mediums.

PRODUCTION AND COST DEVELOPMENTS Fly Ash

Your Company focused upon increase in production of Portland Pozzolana Cement (PPC). As a result we could consume higher quantity of Fly Ash which is otherwise an environment hazard. In the process we could consume 9,30,501 MT of Fly Ash which is 30% higher as compared to FY21.

In order to bring down the cost of Fly Ash, various cost saving initiatives were taken throughout the year. All Fly Ash transportation through rakes were done through BOXN resulting in lower freight cost. We also established new partnerships with new sources Hindalco at Krishnashila & Odisha Power at Jharsuguda leading to sustained material availability and cost efficiency.

Logistics & Freight

The first quarter of the year marred by COVID disruptions which impacted the complete supply chain. Diesel prices reached to historical highs during the month of Nov21 which resulted in increased pressure on freight cost. The freight cost in NE was also majorly impacted due to Overload restriction in Assam and recurrence of bridge damage in Meghalaya. Your Company steered through these challenges to ensure that supplies to Market are ensured while keeping the cost in control. FY22 saw our Siliguri plant operated in full-fledged throughout the year which ensured the market are served with reduced Order to Delivery Time and increase market penetration. The year also saw cement dispatches through rake at 2.8 Lakh MT which was 48% higher as compared to FY21 to mitigate the impact of high road logistics cost. Logistics Cost efficiency was further improved through sustained efforts of key initiatives such as month e auction, PTPK outlier, Wheeler & Segment wise freight implementation. Construction of rake siding through PPP mode at SGU is towards completion and expected to commission by May22. With Siliguri Plant & Other key Initiatives implemented, Wtd. Avg. Freight cost reduced to Rs 979 Per MT. (YTD Feb22) from Rs 1,140 per MT. recorded in previous year. Wtd. Avg. Lead distance reduced to 221 KM from 258 KM recorded in the year before.

Your Company has always focused on giving best Logistics service to the consumers at the most economical costs. Various efforts were taken up to improve on Service Levels towards which additional 14 SOWs were opened across NE, West Bengal & Bihar. 190 no. of 16 Wheelers trucks were also inducted in our organisation for continuous movement of Raw material and to reduce impact of market fleet fluctuations. Warehouse optimisation continued across the year for better servicing the customers resulting in increased customer satisfaction.

Your Company received Prestigious "CM SCALE Award" for Excellence in Supply Chain Management 3rd time in Row.

Power cost

Meghalaya Power Limited continues to be a wholly owned subsidiary of the Company. During the year under review too, your Company continued to source its power requirement for its Lumshnong unit from its wholly owned subsidiary M/s. Meghalaya Power Limited under long term arrangement for supply of quality power at competitive rates and thus, has been able to reduce dependency on State utility/grid power. Cost of coal has a direct bearing on fuel cost. In view of increasing fuel cost due to increase in price of coal and to optimise the power cost and to reduce dependency on State utility /grid power, your Company has been able to source its power requirement of its Grinding Unit at Guwahati and integrated cement plant at Lumshnong from Indian Energy Exchange (IEX). The blend of sourcing has not only reduced power cost for your Company but also its quality and dependability.

Coal availability from local sources remained constrained. Sourcing of Coal was done majorly from Coal India Limited (CIL) and Imported Coal from South Africa. We successfully participated in auction of CIL & procured FSA of 1.26 lakh MT/ annum. The Company also procured good quantity of Coal supplies on spot auctions from CIL during the year, keeping the overall cost in control.

KEY PERFORMANCE HIGHLIGHTS

• Consolidated cement production was at Rs 34.06 Lakhs MT during the year as against 26.36 Lac MT during the previous financial year.

• Consolidated net sales at Rs 2218.74 Crore during the year under review as compared to Rs 1,748.15 Crore during the financial year 20-21.

• Consolidated EBIDTA was at Rs 378.62 Crore during the year under review as compared to Rs 296.25 Crore during the immediate previous financial year after exceptional items.

• Consolidated profit before tax during the year FY 21-22 was at Rs 243.65 Crore as against a profit of Rs 199.26 Crore in the year FY 20-21.

• Consolidated Exceptional items during the year was NIL as against Rs 64.57 Crore recorded in previous year

OPPORTUNITIES & THREATS, RISKS AND CONCERNS

Marketing strength of Star Cement lies on strong dealers network. Locational advantages helped to procure raw materials at affordable prices. Companys aggressive marketing strategies and strong branding network also contributed to establish its position as the market leader in the region. Companys new Siliguri plant will also contribute to expand the market in eastern region of the county. Companys dependence on domestic market and business concentration on regional market for a longer period of time may adversely affect the growth of the Company. Environmental impact and other force majure events may affect the operations of the Company. A less than optimal demand growth in the region may lower revenues of the Company.

Governments various initiatives like Make in India, Housing for all, development of Ports, Roads and Highways, dam & irrigation project, National Highway Development programme, Bharat Nirman Yojana, dedicated Freight Corridors, Gauge conversion Projects undertaken by Railways, development in the area of alternative source of energy viz. Hydro and Solar Power and other infrastructure projects is expected to boost Cement and Power Demand of the country. Governments special drive for development of the North Eastern Region will also help the sustained development of the industry. Various positive moves on the policy front, in areas related to ease of doing business, promoting start-ups, rationalising the tax structure, administration, and opening up more areas for foreign investment through the automatic route will also increase the demand of cement and power.

Competition in the cement industry is very high apart from the large players there are also small players in the market. Competition from the foreign players may lead to tougher competition to the domestic players. This allows limited market share in the industry. Constant increase in fuel costs leads to high transportation cost. Availability of coal at a affordable cost became a constraint factor. In order to tackle the situation your Company optimally utilising its reserved coal and entering Fuel Supply Agreement with various suppliers. Cement Industry is highly fragmented and it is also highly regionalised, transportation of low volume of cement over long distances become uneconomical.

Cement and power industry being majorly dependent upon availability of raw materials at affordable cost. Policies of the Government as well as Central and State Laws may adversely affect the availability of lime stone, coal etc. Any major changes in Governments Environmental and Forest regulations may affect limestone and coal availability to cement plants. However, your Company is sourcing raw materials from alternate sources so that raw materials availability risks is mitigated. Companys vast dealers network across the States also help to mitigate the risk.

Your Company has evolved a risk management framework to identify, assess and mitigate the key risk factors of the business. The Board of Directors of the Company is kept informed about the risk management of the Company. The Board of Directors have formed a Risk Management Committee inter alia, to oversee the risk assessing and mitigation process of the Company and advice the management in this regard.

SHARE CAPITAL

The paid up Equity Share Capital of the Company as on 31st March, 2022 was Rs 40,41,80,417 divided into 40,41,80,417 equity shares of Rs 1 each. Consequent upon bought back of 82,48,580 Equity Shares of Rs 1 each the paid up Equity Share Capital of the Company has been reduced during the Financial year ended 31st March, 2022 to that extent. During the year under review, the Company has neither issued any shares with differential voting rights nor granted stock options or sweat equity shares.

In accordance with Section 69 of the Companies Act, 2013, during the year ended 31st March, 2022, the Company has created a Capital Redemption Reserve of Rs 82,48,580 equal to the nominal value of Shares bought back as an appropriation from General Reserves.

SHARES IN SUSPENSE ACCOUNT

Disclosures of the shares lying in Companys Unclaimed Shares Suspense Account are given in the Report of Corporate Governance.

INVESTOR EDUCATION AND PROTECTION FUND

As per Companies Act, dividends that are unclaimed/unpaid for a period of seven (7) years from the date of their transfer are required to be transferred to the Investor Education and Protection Fund (IEPF) administered by the Central Government.

The tentative date for transfer of unclaimed and unpaid dividends to the IEPF, declared by the Company are as under:

Financial Year	Date of Declaration	Tentative Date for transfer to IEPF
2015-16 (Interim)	9th June, 2015	18th July, 2022
2017-18 (Final)	31st July, 2018	6th September, 2025
2019-20 (Interim)	6th February, 2020	14th March, 2027

Members who have not encashed their dividend so far in respect of the aforesaid periods are requested to make their claims to Maheshwari Datamatics Private Limited, Registrar and Share Transfer Agent of the Company (RTA) or to the Company Secretary of the Company, at the Companys Registered Office/ Corporate Office, well in advance of the above due dates. Pursuant to the provisions of IEPF Authority (IEPF) (Accounting, Audit, Transfer and Refund) Rules, 2016 (IEPF Rules), the Company has uploaded the details of unpaid and unclaimed amounts lying with the Company as on 30th September, 2021 (date of the last AGM) on the website of the Company at www.starcement.co.in and also on the website of the Ministry of Corporate Affairs at www.mca.gov.in.

Further, pursuant to the provisions of Section 124 of the Act, read with the relevant Rules made thereunder, shares on which dividend has not been paid or claimed for seven (7) consecutive years or more shall be transferred to the IEPF Authority as notified by the Ministry of Corporate Affairs. Accordingly, Interim Dividend declared for the Financial year 15-16 which was unpaid for Seven (7) consecutive years aggregating to Rs 2,96,158 and the 40,158 equity shares in respect of which dividend entitlements has not been paid or claimed for seven (7) consecutive years or more will be transferred by the Company to the IEPF Authority after following the required provisions of Rules as on 18th July, 2022. The Company has sent intimation letters to the members and published advertisement in the newspapers. The details are available on the web site of the Company at www.starcement.co.in

The shareholders whose dividend/shares have been/ will be transferred to the IEPF Authority may claim the shares or apply for refund by making an application to the IEPF Authority by following the procedure as detailed in the IEPF Rules and as enumerated on the website of IEPF Authority at http://www.iepf.gov.in/IEPF/refund.html.

ANNUAL RETURN

In terms of requirement of section 134 (3) (a) read with Section 92(3) of the Companies Act, 2013, the Annual return of the Company has been placed on the Companys website and can be accessed at the web link: https://www.starcement. co.in/upload/images/files/Annual-Return-2021-22.pdf.

MEETINGS OF THE BOARD

During the year four (4) Board Meetings and four (4) Audit Committee Meetings were convened and held on 9th June, 2021, 13th August, 2021, 01st November, 2021 and 25th January, 2022. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013. The details of the Board meeting and the Committee meeting are provided in the Corporate Governance Report.

MEETINGS OF INDEPENDENT DIRECTORS

During the year under review, a meeting of Independent Directors was held on 25th March, 2022 wherein the performance of the Non-Independent Directors and the Board as a whole was reviewed. The Independent Directors at their meeting also inter alia assessed the quality, quantity and timeliness of flow of information between the Company management and the Board of Directors of the Company.

COMMITTEES OF THE BOARD

The composition and terms of reference of the Audit Committee, Nomination and Remuneration Committee,

Corporate Social Responsibility Committee, Stakeholders Relationship Committee, Risk Management Committee and Finance Committee have been furnished in the Corporate Governance Report forming part of this Annual Report. There has been no instance where the Board has not accepted the recommendations of the Audit Committee and Nomination and Remuneration Committee.

WHISTLE BLOWER POLICY/ VIGIL MECHANISM

The Company has a Whistle Blower Policy/ Vigil Mechanism as required under Section 177 of the Companies Act, 2013 and as per Listing Obligations and Disclosures Requirements Regulations, 2015 formulated by Securities and Exchange Board of India (SEBI). The Vigil (Whistle Blower) mechanism provides a channel to the employees and Directors to report to the management, concerns about unethical behavior, actual or suspected fraud or violation of the Code of Conduct or policy. The mechanism provides for adequate safeguards against victimisation of employees and Directors to avail the mechanism and also provide for direct access to the Chairman of the Audit Committee in exceptional cases. The said policy may be referred to at the Companys website at the web link: https://www.starcement.co.in/upload/images/ files/Whistle-Blower-Policy-4.pdf

POLICY ON APPOINTMENT AND REMUNERATION OF DIRECTORS, KEY MANAGERIAL PERSONNEL AND SENIOR MANAGEMENT EMPLOYEES

The Board has framed a Remuneration Policy for selection, appointment and remuneration of Directors, Key Managerial Personnel and Senior Management Employees. The remuneration policy aims to enable the Company to attract, retain and motivate highly qualified members for the Board and at other executive levels. The remuneration policy seeks to enable the Company to provide a well-balanced and performance-related compensation package, taking into account shareholder interests, industry standards and relevant Indian corporate regulations. The details on the same are given in the Corporate Governance Report. The said policy may be referred to at the Companys website at the web link: https://www.starcement.co.in/upload/images/ files/Remuneration-Policy.pdf

DIVIDEND DISTRIBUTION POLICY

In terms of Regulation 43A of the Listing Regulations, your Board has framed and adopted a Dividend Distribution Policy. The object of the policy is to sharing profit of the Company with the shareholders appropriately and also to ensure funds are available for the growth of the Company. The policy inter alia describes the circumstances under which the shareholders may or may not expect dividend, the financial parameters that shall be considered while declaring dividend, internal and external factors that shall be considered for declaration of dividend, policy for utilisation of retained earnings and the parameters with respect to different classes of shares for the purpose of declaration of dividend. The said policy may be referred to at the Companys website at the web link: https:// www.starcement.co.in/upload/images/files/Dividend-policy. pdf.

CODE OF CONDUCT

With intent to enhance integrity, ethics & transparency in governance of the Company your Company had adopted a Code of Conduct for Directors and Senior Management Personnel. The Code has been displayed on the Companys website www.starcement.co.in

COMPLIANCE WITH THE SECRETARIAL STANDARDS AND INDIAN ACCOUNTING STANDARDS

The Company has complied with the applicable Secretarial Standards as recommended by the Institute of Company Secretaries of India. The Company has also complied with all relevant Indian Accounting Standards (Ind AS) referred to in section 133 of the Companies Act, 2013 read with Companies (Indian Accounting Standards) Rules, 2015 while preparing the financial statements.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to requirement of Section 134 (3) (c) read with Section 134 (5) of the Companies Act, 2013, the Directors hereby confirm and state that:

• In the preparation of Annual Accounts, the applicable Accounting Standards have been followed along with the proper explanation relating to material departures, if any;

• The Directors have selected such accounting policies and have 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 31st March, 2022 and of the profit of the Company for the year under review;

• The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

• The Directors have prepared the annual accounts on going concern basis;

• The Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

• The Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively.

AUDITORS & AUDITORS REPORT

M/s. D. K. Chhajer & Co., Chartered Accountants (Firm Registration no. 304138E) were appointed as the Statutory Auditors of the Company to hold office for five consecutive years starting from the conclusion of the 16th Annual General Meeting (AGM) held on 11th September, 2017 until the conclusion of the 21st Annual General Meeting of the Company to be held during the Financial year 21-22. The term of office of M/s. D. K. Chhajer & Co., as Statutory Auditors of the Company will conclude from the close of the forthcoming AGM of the Company.

Subject to the approval of the members of the Company, the Audit Committee and the Board of Directors during their respective meetings held on 17th May, 2022 have considered and recommended the appointment of M/s. Singhi & Co., Chartered Accountants (Firm Registration Number: 302049E) as the Statutory Auditors of the Company, to hold office from the conclusion of the 21st Annual General Meeting until the conclusion of the 26th Annual General Meeting of the Company to be held in the year 2027.

M/s. Singhi & Co., Chartered Accountants (Firm Registration Number: 302049E) have given their consent for the proposed appointment as Statutory Auditors of the Company from the conclusion of the ensuing Annual General Meeting of the members of the Company. They have further confirmed that the said appointment, if made, would be within the prescribed limits under the Companies act, 2013 and that they are not disqualified for appointment.

The notes to the accounts referred to in the Auditors Report are self-explanatory and, therefore, do not call for any further comments.

COST AUDITORS

Pursuant to Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Amendment Rules, 2014, the cost audit records maintained by the Company in respect of its manufacturing activity is required to be audited. Your Directors have, on the recommendation of the Audit Committee, appointed Messrs B. G. Chowdhury & Co., Cost Accountants, (Firm Registration number 000064) as Cost Auditors of the Company for the financial year ended 31st March, 2022 in the Board Meeting held on 9th June, 2021. The remuneration proposed to be paid to them for the Financial year 21-22, as recommended by audit committee, was ratified in the meeting of shareholders held on 30th September, 2021.

Messrs B. G. Chowdhury & Co., Cost Accountants, (Firm Registration number 000064) have expressed their willingness to be re-appointed as Cost Auditors of the Company for ensuing financial year. The Board, on recommendation of the audit committee has re-appointed Messrs M/s. B. G. Chowdhury & Co., Cost Accountants, (Firm Registration number 000064) as Cost Auditors of the Company for the Financial year 22-23 subject to ratification of their remuneration by shareholders in the General Meeting of the Company.

As per the provisions of the Companies Act, 2013, the remuneration payable to the Cost Auditor is placed before the Members in a General Meeting for their ratification. Accordingly, a Resolution seeking Members ratification for the remuneration payable to M/s. B. G. Chowdhury & Co., Cost Auditors for the Financial year 22-23 is included in the Notice convening the Annual General Meeting.

The cost audit report for the Financial Year 20-21 was filed with the Ministry of Corporate Affairs on 22nd October, 2021.

SECRETARIAL AUDIT

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s. MKB & Associates, a firm of Company Secretaries in Practice, (Firm Registration no. P2010WB042700) to undertake the Secretarial Audit of the Company. The Secretarial Audit Report is annexed herewith and marked Annexure-1. The report is self-explanatory and do not call for any further comments.

In terms of Regulation 24A of LODR, Star Cement Meghalaya Limited, a material subsidiary is under secretarial audit and report submitted by the Secretarial Auditors is annexed herewith and marked Annexure - 1A. The report is selfexplanatory and do not call for any further comments.

REPORTING OF FRAUD

The Auditors of the Company have not reported any fraud as specified under section 143(12) of the Companies Act, 2013.

BUSINESS RESPONSIBILITY REPORT

As required under Regulation 34 of SEBI Listing Regulations 2015, the Business Responsibility Report of the Company for the financial year ended 31st March, 2022 is attached as part of the Annual Report.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

During the year under review, your Company has not made any investment or provided guarantee or security in connection with a loan to any person exceeding the limit specified in Section 186 of the Companies Act, 2013.

Details of Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in notes to the financial statements.

RELATED PARTY TRANSACTIONS

All related party transactions are entered on arms length basis, in the ordinary course of business and are in compliance with the applicable provisions of the Companies Act, 2013. There are no materially significant related party transactions made by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of the Company at large. In terms of Section 134 of the Act read with Rule 8 of the Companies (Accounts) Rules, 2014, the particulars of the material contract or arrangement entered into by the Company with related parties as referred to in section 188 in form AOC-2 is attached as Annexure- 2 of this report. However, the details of the transactions with the Related Party are provided in the Companys financial statements in accordance with the Accounting Standards.

All Related Party Transactions are presented to the Audit Committee and the Board. Omnibus approval is obtained for the transactions which are foreseen and repetitive in nature. A statement of all related party transactions is presented before the Audit Committee on a quarterly basis, specifying the nature, value and terms and conditions of the transactions.

A policy on Related Party Transactions has been devised by the Company which may be referred to at the Companys website at the weblink:

https://www.starcement.co.in/upload/images/files/Revised-Related-Party-Policy.pdf

RESERVES

During the year under review no amount was transferred to reserves. However, in accordance with Section 69 of the Companies Act, 2013, the Company has created a Capital Redemption Reserve of Rs 82,48,580 equal to the nominal value of Shares bought back as an appropriation from General Reserves.

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo as stipulated in section 134 (3) (m) of the Act and rules framed there under is mentioned below:

(A) Steps taken toward Conservation of energy:

• PPC Cement production rate increased by 3-5 Tph due to addition of Fly ash at Mill outlet, so that leads to annual power saving @ 2 Kwh/Mt Cement.

• Primary Air blower Pulley diameter increased, so that RPM reduced by 293, due to that power saving 0. 48 Kwh per year.

• Due to replacement of existing street lights by LED fittings a total 1.995 Lakhs Kwh power was saved during the year.

• HAG Dilution Air Fan Installation of VFD in place of DOL starter resulted in reduction in power and Savings of 14,400 KW per month and approx. Rs 95,000 per Month.

• 22 Watt LED Lights replaced with 36 watt CFL at CCR Building offices resulting in reduction in consumption by 39% will save approximately Rs 3,000 per month.

• Use of Bio Mass helped in reducing over reliance on conventional fuel.

• Installation of waste heat recovery boiler enabled to reduce waste and energy consumption and increase the efficiency.

(B) Steps taken toward Technical Absorption:

a. Steps taken towards Technical Innovation:-

1. Packing plant Packer 1, 2 & 3 Bag Printing Machine Bag sensing Proximity Switch, replaced with Visible Infrared Type Sensor. This increased the availability of machine and also frequent cleaning and adjustment/ replacement of Sensor.

ii. ABB & Mitsubishi VFD Drives communication with Plant PLC is done by using Modbus communication instead of Hardwiring.

b. Steps taken towards technical absorption:-

i. For smooth operation of Truck loaders installed VFD in Trolley drive, this helped us in reducing down time of truck loader.

ii. 531-BC3 Motor and VFD of 7.5 KW replaced with 15 KW. Frequent tripping of Belt due to Overload is eliminated.

c. Steps taken towards technical adoption :-

i. Replacement of Old 3 star AC with New Inverter AC 5 star. This helped in energy savings and better cooling and operation.

ii. Replacement of Guide roller with Pipe pieces in Truck loader Rope for Hassle free operation, as guide roller was getting stucked during operation.

iii. 2 No. Drum motor is replaced with Geared motor, as drum motor mounting bracket was getting damaged frequently in Truck Loader Long belt.

• The Company has developed a Research & Development cell for carrying out R&D Projects in the plant with specific objective of development of advanced systems for quality improvement. During the year under review, your Company incurred Capital expenditure of Rs 8.12 Lakhs (P.Y. Rs 96.47 Lakhs) and Revenue Expenditure of Rs 44.50 Lakhs (P.Y. Rs 31.35 Lakhs) in Research & Development.

(C) Foreign Exchange Earnings And Outgo

During the period under review, Foreign Exchange Earning was NIL (Previous Year - NIL) and the Foreign Exchange Outgo was Rs 5.24 Lakhs (Previous Year Rs 43.22 Lakhs).

CORPORATE SOCIAL RESPONSIBILITY INITIATIVES (CSR)

Star Cement Limited has constantly been the pioneer of CSR activities in north-eastern and eastern region of the country. The Companys CSR policy primarily focuses on the need based sustainable holistic development of the neighbouring society since the day of its inception. Towards achieving long term stakeholder value creation, the Company continues to respect the interests of and be responsive towards our key stakeholders - the communities, especially those from socially and economically backward Groups, the underprivileged and marginalised and the society at large. Your Company is known for its philantrophic activities and actively taking several activities under its Corporate Social Responsibility Initiatives. Your Company feels that meeting obligations of CSR is not a statutory requirements but it goes beyond any parameters. Pursuant to Section 135 of the Companies Act, 2013 read with Schedule VII thereof and Rules made thereunder, your Companys social responsibility policy is offering number of community welfare projects in the field of Health & Sanitation, Education, Eradication of hunger & proverty, Environment sustainability, Sustainable Livelihood & Skills building, Rural & infrastructure development for the local inhabitants of plant operational areas during the year FY 21-22 to improve the quality and standard of living. Your Company undertook various activities during the year FY 2122 under review in line with its CSR Policy.

The composition of CSR Committee of your Company, attendance at the said Meeting, terms of reference of the CSR Committee and other relevant details have been provided in the Corporate Governance Report forming part of the Annual Report. The CSR Committee has confirmed that the implementation and monitoring of CSR Policy is in conformity with CSR objectives and policy of the Company and in compliance with Section 135 of the Companies Act, 2013.

Your Companys Policy on Corporate Social Responsibility can be accessed on the Companys website at https://www. starcement.co.in/upload/images/files/CSR-Policy-2021-1. pdf

Annual Report on CSR as required to be annexed in terms of requirement of Section 135 of Companies Act, 2013 and rules framed thereunder is annexed herewith and marked Annexure- 3.

EVALUATION OF THE BOARDS PERFORMANCE

In accordance with the requirements of the Companies Act 2013, the performance evaluation of the Board was carried out during the year under review. The Board follows a formal mechanism for the evaluation of the performance of the Board as well as Committee. The evaluation reflected the overall engagement of the Board and the Committee.

A structured questionnaire was prepared after taking into consideration inputs received from the Directors, covering various aspects of the Boards functioning such as adequacy of the composition of the Board and its Committees, Board culture, execution and performance of specific duties, obligations and governance.

The Nomination and Remuneration Committee at its meeting established the criteria based on which the Board evaluate the performance of the Directors.

A separate exercise was carried out to evaluate the performance of individual Directors including the Chairman of the Board, on parameters such as level of engagement and contribution, independence of judgment, safeguarding the interest of the Company and its minority shareholders, etc. The performance evaluation of the Non-Independent Directors and Board as a whole was also carried out by the Independent Directors.

The Directors expressed their satisfaction over the evaluation process and results thereof.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

On the recommendation of the Nomination and Remuneration Committee, the Board of Directors at its meeting held on 13th August, 2021 appointed Mr. Prem Kumar Bhajanka, Non - Executive Director as the Managing Director of the Company with effect from 13th August, 2021 upto 31st March, 2024, which was duly approved by the shareholders of the Company by way of special resolution passed in the Annual General Meeting held on 30th September, 2021.

Mr. Santanu Ray, Independent Director retired from the Board with effect from close of the business hours of 31st March, 2022 due to completion of his second and final terms of appointment as Independent Director. Your Board of Directors record their appreciation for the valuable services and guidances rendered/given by Mr. Santanu Ray during his association with the Company as a member of the Board and various Committees.

Mr. Sanjay Kumar Gupta, Chief Executive Officer and Key Managerial Personnel of the Company has resigned from the services of the Company with effect from close of the business hours of 31st January, 2022. The Board places on record its appreciation for the services rendered by Mr. Sanjay Kumar Gupta during his association with the Company. On the recommendation of the Nomination and Remuneration Committee, the Board of Directors at its meeting held on 25th January, 2022 has appointed Mr. Sajjan Bhajanka, Chairman & Managing Director of the Company as the Chairman, Managing Director & Chief Executive Officer and Key Managerial Personnel of the Company with effect from 01st February, 2022.

Mrs. Ibaridor Katherine War (DIN: 03107920) and Mrs. Plistina Dkhar (DIN: 01375361) were appointed as the Independent Directors of the Company for a period of 5 (five) years by the shareholders of the Company upto 31st March, 2022. On the recommendation of the Nomination & Remuneration Committee and based on the performance evaluation, the Board of Directors at its meeting held on 25th January, 2022 re-appointed Mrs. Ibaridor Katherine War and Mrs. Plistina Dkhar as the Independent Directors for a second and final term of 5 (five) consecutive years effective from 1st April, 2022 upto 31st March, 2027, which were duly approved by the shareholders of the Company by way of special resolutions passed through postal ballot by way of voting through electronic means concluded on 15th April, 2022.

On the recommendation of the Nomination & Remuneration Committee, the Board of Directors at its meeting held on 25th January, 2022 appointed Mr. Nirmalya Bhattacharyya (DIN: 09037566) as an Additional Director in Independent category for a period of 5 (five) years effective from 1st February, 2022 upto 31st January, 2027. In terms of Regulation 17(1C) of the Listing Regulations, the listed entity is required to obtain approval of the shareholders for the appointment of new Director at the next General Meeting or within a time period of three months from the date of appointment, whichever is earlier. Accordingly, the shareholders of the Company approved the appointment of Mr. Nirmalya Bhattacharyya as an Independent Director of the Company for an intital term of 5 (five) consecutive years effective from 1st February, 2022 upto 31st January, 2027, by way of special resolution passed through postal ballot by way of voting through electronic means concluded on 15th April, 2022.

Mr. Nirmalya Bhattacharyya, aged 72 years, is a First Class Master Degree holder in Statistics having more than 51 years of rich experience in Banking, Finance, Accounts, Administration and Social services. He is an Executive Director of Friends of Tribal Society and also an Administrator of MBIT sets of instruments. His association as Director would be beneficial to the Company.

Mr. Nirmalya Bhattacharyya has given his consent for appointment and has confirmed that he retains his status as Independent Director and does not suffer from any disqualifications for appointment.

On the recommendation of the Nomination & Remuneration Committee, the Board of Directors at its meeting held on 25th January, 2022, appointed Mr. Brij Bhushan Agarwal (DIN: 01 125056) as an additional director in Non-Executive category of the Company. In terms of Regulation 17(1C) of the Listing Regulations, the listed entity is required to obtain approval of the shareholders for the appointment of new Director at the next General Meeting or within a time period of three months from the date of appointment, whichever is earlier. Accordingly, the shareholders of the Company approved the appointment of Mr. Brij Bhushan Agarwal as a Non-Executve Director of the Company, by way of special resolution passed through postal ballot by way of voting through electronic means concluded on 15th April, 2022.

Mr. Brij Bhushan Agarwal, aged about 50 years, is a commerce graduate from University of Calcutta and having more than 3 decades of experience in managing business, strategic planning, future expansion, business development, marketing, human resources and corporate affairs etc.,

Mr. Brij Bhushan Agarwal has given his consent for appointment and has confirmed that he does not suffer from any disqualifications for appointment.

On the recommendation of the Nomination & Remuneration Committee, the Board of Directors at its meeting held on 25th January, 2022, appointed Mr. Pankaj Kejriwal (DIN: 00383635), Non-Executive Director of the Company, as a Wholetime Director and Chief Operating Officer (COO) of the Company with effect from 1st February, 2022 upto 31st March, 2024, which was duly approved by the shareholders of the Company by way of special resolution passed through postal ballot by way of voting through electronic means concluded on 15th April, 2022.

In accordance with the provisions of Companies Act, 2013 and in terms of the Memorandum and Articles of Association of the Company, Mr. Prem Kumar Bhajanka and Mr. Pankaj Kejriwal will retire by rotation and being eligible, offer himself for re-appointment. In view of his considerable experience, your Directors recommend his re-appointment as Director of the Company.

DECLARATION BY INDEPENDENT DIRECTORS

All Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and they have complied with the Code for Independent Directors prescribed in Schedule IV to the Act and the Listing Regulations. Mr. Pramod Kumar Shah, Mr. Nirmalya Bhattacharyya (w.e.f. 1st February, 2022), Mrs. Ibaridor Katherine War, Mrs. Plistina Dkhar and Mr. Amit Kiran Deb are Independent Directors on the Board of your Company. In the opinion of the Board and as confirmed by these Directors, they fulfill the conditions specified in section 149 of the Act and the Rules made thereunder and the Listing Regulations about their status as Independent Director of the Company.

Your Board of Directors formed opinion that the Independent Directors of the Company are maintaining highest standard of integrity and possessing expertise, requisite qualifications and relevant experience in the fields of Administration, General management, Accounts & Finance, Audit , Internal Audit, Taxation, Risk, Board procedures, Governance etc., for performing their role as Independent Directors of the Company. Regarding proficiency, all Independent Directors have registered themselves in the Data Bank maintained with the Indian Institute of Corporate Affairs (IICA), Manesar. In terms of Section 150 of the Act read with Rule 6(4) of the Companies (Appointment & Qualification of Directors) Rules, 2014, the Independent Directors are required to undertake online proficiency self- assessment test conducted by the IICA within a period of 2 (two) years from the date of inclusion of their names in the data bank. Mr. Santanu Ray, Mr. Amit Kiran Deb, Mrs. Ibaridor Katherine War, Mrs. Plistina Dkhar, Independent Directors are exempted from qualifying online proficiency test due to their relevant experience in listed companies and the Companies with Paid up equity Capital is Rs 10 Crore and more. Mr. Pramod Kumar Shah was appeared in online proficiency test within the period of 1 (one) year from the date of inclusion of his name in the data bank and has successfully qualified the test. Mr. Nirmalya Bhattacharyya (appointed w.e.f. 01st February, 2022) will appear in online proficiency test within the period of 2 (two) years from the date of inclusion of his name in the data bank.

FAMILIARIZATION PROGRAMME FOR INDEPENDENT DIRECTORS

In order to enable the Independent Directors to perform their duties optimally, the Board has devised a familiarisation programme for the Independent Directors to familiarise them with the Company, their roles, rights, responsibilities in the Company, nature of the industry in which the Company operates, business model of the Company, etc. They are periodically updated about the development which takes place in the Company. At the time of appointment of an Independent Director, the Company issues a formal letter of appointment setting out in detail, the terms of appointment, duties, responsibilities and commitments etc. The familiarisation program is available on the Companys website under the web link:

https://www.starcement.co.in/upload/images/files/ Familiarization-Programme.pdf

SUBSIDIARIES AND ASSOCIATE COMPANY

M/s. Star Cement Meghalaya Limited, M/s. Megha Technical & Engineers Private Limited, M/s. Meghalaya Power Limited, M/s. NE Hills Hydro Limited and M/s. Star Century Global Cement Private Limited, M/s. Star Cement (I) Limited (formerly, Star Cement Lumshnong Limited) and M/s. Star Cement North East Limited continue to remain subsidiaries of the Company.

Star Cement Meghalaya Limited is engaged in manufacturing of Cement Clinker and has a Clinkerisation plant with an installed capacity of 1.75 MTPA. During the year under review, the Company manufactured 16,54,582 MT of clinker as against 14,75,660 MT in FY 20-21.

Megha Technical & Engineers Private Limited is engaged in the manufacture of cement. During the year under review, the Company produced 3450 MT of Cement.

Meghalaya Power Limited, a wholly-owned subsidiary, is engaged in generation of Power. During the year under review the Company generated 123 Mn units of power.

NE Hills Hydro Limited, wholly owned subsidiary of your Company is currently not operational.

Star Century Global Cement Private Limited a wholly-owned subsidiary in Myanmar is yet to commence its operations. M/s. Star Cement (I) Limited (formerly, Star Cement Lumshnong Limited) and M/s. Star Cement North East Limited are yet to start operations

CHANGES IN NATURE OF BUSINESS, IF ANY

There has not been any change in the nature of business.

AUDITED FINANCIAL STATEMENTS OF THE COMPANYS SUBSIDIARIES

Pursuant to sub-section (3) of section 129 of the Act, the statement containing the salient features of the financial statement for the year ended 31st March, 2022 for each of the Companys subsidiaries viz. Star Cement Meghalaya Limited (SCML), Megha Technical & Engineers Private Limited (MTEPL), Meghalaya Power Limited (MPL), NE Hills Hydro Limited (NHHL), Star Century Global Cement Private Limited (SCGCPL), Star Cement (I) Limited (formerly, Star Cement Lumshnong Limited) and Star Cement North East Limited are annexed in the Form AOC - 1 and marked as Annexure-4.

CONSOLIDATED FINANCIAL STATEMENTS

The Consolidated Financial Statements of the Company have been prepared in accordance to requirements of the Companies Act, 2013 and Ind AS as prescribed by the Institute of Chartered Accountants of India and has been included as a part of this Annual Report.

The detailed financial statements and audit reports of each of the subsidiaries of the Company are available for inspection at the Registered Office of the Company during office hours between 11 A.M. and 1 PM. The Company will arrange to send the financial statements of the subsidiaries upon written request from a shareholder to the registered address of the said shareholder.

DEPOSITS

During the year under report, the Company has not accepted any deposits from public or from any of the Directors of the Company or their relatives falling under ambit of Section 73 of the Companies Act, 2013.

SIGNIFICANT MATERIAL ORDERS PASSED BY THE COURTS OR REGULATORS

(i) The Director of Mineral resources, Meghalaya, Shillong vide its Demand notice dated 19th February, 2020 raised a demand against the Company for payment of royalty, MEPRF, VAT/GST for an amount of Rs 4184.06 Lakhs in pursuance to the National Green Tribunal (NGT) order dated 17th January, 2020 passed in O.A. No. 110 (THC)/2012 against the Company and other Cement and Power Companies in Meghalaya for alleged illegal coal procurement.

The Company has not purchased any illegal coal and has complied with all disclosure requirements of the various Government departments. The report of NGT Committee has been founded on the basis of assumptions and not on hard facts. The Company backed by the legal opinions, believed that it has a good case in the matter as the said order was issued on the basis of certain hypothetical assumptions and without giving any opportunity of being heard to the Company.

Accordingly, the Company has preferred an appeal before the Appex Court which is pending and accordingly no provisions has been made in the accounts. (Refer Note no. 48(a)b of Notes to Accounts).

(ii) In respect of demand letter received from Central Excise authority for refund of Education Cess and Secondary & Higher Education Cess amounting to Rs 566.05 Lakhs, the Company has filed a writ petition before the Honble Meghalaya High Court for quashing of demand notice, the Meghalaya High Court has stayed the said demand notice matter is sub-judice and final hearing of the case is yet to be conducted, therefore, no provision have been taken in the books of account. (Refer Note no. 48(a)a of Notes to Accounts).

Other than the aforesaid, there have been no significant and material orders passed by the Courts/ Regulators impacting the going concern status and future operations of the Company.

MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY

No material changes or commitments have occurred between the end of the financial year and the date of this Report which affect the financial statements of the Company in respect of the reporting year.

CREDIT RATINGS

Your Company enjoys a sound reputation for its prudent financial management and its ability to meet financial obligations. ICRA Limited, has reaffirmed the Companys short term rating to [ICRA]A1+ (pronounced ICRA A one plus) and the long term rating to [ICRA]AA- (pronounced as ICRA double A minus) The outlook on the long term rating is Stable.

ADEQUACY OF INTERNAL FINANCIAL CONTROL

The Company has an Internal Control System, commensurate with the size, scale and complexity of its operations. To maintain its objectivity and independence, the Internal Audit function reports to the Chairman of the Audit Committee of the Board.

The Board ofDirectors of the Company on the recommendation of the Audit Committee, re-appointed M/s. Anita Sahal & Associates, Chartered Accountants, as the Internal Auditors of the Company for the Financial Year 22-23 under section 138 of the Companies Act, 2013. M/s. Anita Sahal & Associates, have confirmed about their re-appointment. The Internal Auditors monitors and evaluates the efficacy and adequacy of internal control system in the Company, its compliance with operating systems, accounting procedures and policies at all locations of the Company. Based on the report of internal audit function, process owners undertake corrective action in their respective areas and thereby strengthen the controls. Significant audit observations and recommendations, if any, along with corrective actions thereon are presented to the Audit Committee of the Board.

INTERNAL CONTROL OVER FINANCIAL REPORTING

The Company has in place adequate internal financial controls commensurate with the size, scale and complexity of its operations. During the year, such controls were tested and no reportable material weakness in the design or operations were observed. The Company has policies and procedures in place for ensuring proper and efficient conduct of its business, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records and the timely preparation of reliable financial information.

DETAILS OF SIGNIFICANT CHANGES (I.E., CHANGES OF 25% OR MORE) IN KEY FINANCIAL RATIO AND CHANGE IN RETURN ON NETWORTH ALONGWITH DETAILED EXPLANATIONS

Key Financial ratios	FY 21-22	FY 20-21	% change	Explanation for Significant Changes
Debtors Turnover ratio	16.74	13.96	19.91	NA
Inventory Turnover ratio	16.00	12.79	25.11	Due to increase in demand in comparison with last year
Interest Coverage ratio	20.62	18.54	11.22	NA
Current ratio	1.96	2.27	(13.59)	NA
Debt Equity ratio	0.06	0.10	(38.77)	Due to repayment of unseucred loan
Operating Profit Margin (%)	7.33	11.61	(36.86)	Due to increase in raw materials & power fuel cost.
Net Profit Margin (%)	8.11	9.47	(14.36)	NA
Return on Net Worth (%)	13.57	12.33	10.05	NA

MANAGERIAL REMUNERATION AND PARTICULARS OF EMPLOYEES

The disclosures with respect to the remuneration of Directors and employees as required under Section 197 of Companies Act, 2013 read with Rule 5 (1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 along with a statement containing particulars of employees as required under Section 197 of Companies Act, 2013 read with Rule 5 (2) and (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed herewith and marked Annexure- 5 and forms part of this report.

DETAILS OF APPLICATION MADE OR ANY PROCEEDING PENDING UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016

There was no application made or proceeding pending against the Company under the Insolvency and Bankruptcy Code, 2016, during the year under review.

DETAILS OF DIFFERENCE IN VALUATION

The requirement to disclose the details of difference between amount of the valuation done at the time of onetime settlement and the valuation done while taking loan from the Banks or Financial Institutions along with the reasons thereof, is not applicable.

POLICY ON PREVENTION OF SEXUAL HARASSMENT

The Company values the integrity and dignity of its employees. The Company has put in place a Policy on Prevention of Sexual Harassment as per the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 ("Sexual Harassment Act") and has constituted the Committee with internal and external members. We affirm that adequate access has been provided to any complainants who wish to register a complaint under the policy. No complaint was received during the year.

CORPORATE GOVERNANCE

The Company has complied with the corporate governance requirements as stipulated under the Listing Obligations and Disclosures Requirements Regulations, 2015 formulated by Securities and Exchange Board of India (SEBI). A separate section on corporate governance, along with a certificate from the auditors confirming the compliance, is annexed and forms part of the Annual Report. This certificate will be forwarded to the Stock Exchanges along with the Annual Report of the Company.

CHIEF EXECUTIVE OFFICER (CEO) /CHIEF FINANCIAL OFFICER (CFO) CERTIFICATION

As required under Regulation 17(8) of the Listing Obligations and Disclosures Requirements Regulations, 2015 formulated by Securities and Exchange Board of India (SEBI), the CEO/ CFO certification has been submitted to the Board and a copy thereof is contained in this Annual Report.

RISK MANAGEMENT

Risk management refers to the practice of identifying potential risks in advance, analysing them and taking precautionary steps to reduce the risk. The Company has evolved a risk management framework to identify, assess and mitigate the key risk factors of the business. The Board of the Company is kept informed about the risk management of the Company.

HUMAN RESOURCE DEVELOPMENT & INDUSTRIAL RELATIONS

Human Resource (HR) supports and upholds Star Cements overall goals, vision & mission by fostering a positive and engaging work environment. HR ensures that employees are engaged and motivated to help the Company succeed. Human resources at Star Cement is responsible for a productive and thriving workforce that is engaged and motivated. HR ensures that employees feel safe, valued and properly supported to unleash their full potential and contribute towards achievement of Companys overall goals and vision.

The year 20-21 saw the outbreak of COVID 19 Pandemic and organiations were affected globally and were forced to change their strategies to survive through the Pandemic. At Star Cement, HR was extremely proactive in managing the crisis and ensuring the safety and wellbeing of its employees. With the beginning of the new Financial Year 21-22, the COVID-19 pandemic was far from over, but there was the light at the end of the tunnel as more and more people got vaccinated and HR helped in organising free vaccinations camps for employees across locations.

With the objective of creating new benchmarks in adherence to Safety standards and have Quick Response Team in case of fire exigencies and accidents, a series of Fire Safety and First Aid Certification Training Programs were conducted at Lumshnong, Sonapur and Siliguri Plants.

Talent acquisition strategy and processes were re-looked at. In order to attract best talent, employer branding was focused on, wherein innovative ways of using social media were explored. In these challenging times, HR was successful in getting on board the required Manpower at the newly commissioned Siliguri Grinding Unit.

Towards making the organisation more progressive and future looking, HR proactively and systematically reviewed existing policies and accordingly revised them in accordance with the industry standards and employee needs.

Group Mediclaim Policy gives financial security for self and family members against any medical emergency. HR worked in evaluating and designing most appropriate GMC policy for the employees of Star Cement which has been implemented from May, 2022.

With the focus on performance and productivity, the Performance Management System (PMS) has been revamped. People Development goals have been introduced to create a culture of employee development and feedback. The Performance Linked Incentive (PLI) is made sharper and simpler.

Over the last few months, HR has taken some significant steps towards making the HR function futuristic by way of structural, systemic improvements and changes. A major milestone has been the tax friendly salary re-structuring, followed by the standardisation of salary structures across locations leading to equity, simplicity and greater visibility.

Industrial Relations have been effective with several interventions & good practices. During the year gone by, there has not been any material changes in human resources and industrial relations as proactively employee welfare related aspects were addressed and taken care of.

AWARDS AND ACCOLADES

During the year under review, your Company was felicitated with the prestigious SCALE 2020 (Supply Chain and Logistics Excellence) award by the Confederation of Indian Industry (CII) for outstanding achievement in the cement categorydriving innovation and transformation consistently for the second consecutive year.

Additionally, Star Cement was also awarded with Rotary RMB Connect 2021 Award in association with The Economic Times for the most trusted invaluable service and excellence in the category of Cement Industry in 2021.

GREEN INITIATIVES IN CORPORATE GOVERNANCE

Ministry of Corporate Affairs has permitted Companies to send copies of Annual report, Notices, etc., electronically to the email IDs of shareholders. Your Company has arranged to send the soft copies of these documents to the registered email IDs of the shareholders, wherever applicable. In case, any shareholder would like to receive physical copies of these documents, the same shall be forwarded upon receipt of written request in this respect.

Pursuant to the MCA and SEBI circulars, in view of the prevailing situation of the Pandemic, owing to the difficulties involved in dispatching of the physical copies of the Notice of the 21st AGM and the Annual report of the Company for the financial year ended 31st March, 2022 are being sent only by email to the Members. A newspaper advertisement in this regard is being published.

CAUTIONARY STATEMENT

Statements in this report describing the Companys objectives, expectations or predictions, may be forward looking within the meaning of applicable securities laws and regulations. Actual results may differ materially from those expressed in the statement. Important factors that could influence the Companys operations include: global and domestic demand and supply conditions affecting selling prices, new capacity additions, availability of critical materials and their cost, changes in Government policies and tax laws, economic development of the country, potential impact of the ongoing COVID-19 pandemic and related public health issues on economy of country, our business, the businesses of our customers, vendors and partners and other factors which are material to the business operations of the Company.

ACKNOWLEDGEMENT

Your Directors take this opportunity to express their deep sense of gratitude to Banks, Central and State Governments and their departments and the local authorities, customers, vendors, business partners/associates for their continued guidance and support.

The Directors regret the loss of life due to Covid-19 pandemic and are deeply grateful and have immense respect for every person who risked their life and safety to fight this pandemic.

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 Company and dedicates the credit for the Companys achievements to them. Last but not least, your Directors express their gratitude to the shareholders of the Company for reposing their confidence and faith in the Management of the Company and look forward for their support in future.

For and on behalf of the Board of Directors
	SAJJAN BHAJANKA
Place: Kolkata	CHAIRMAN
Date: 17th May, 2022	(DIN: 00246043)