orient cement ltd Directors report

Dear Members,

Your directors are pleased to present the 12^th Annual Report on the business and operations of the Company along with the audited financial statements for the financial year ended March 31, 2023.

SUMMARY OF FINANCIAL PERFORMANCE

The financial performance of the Company for the financial year ended March 31, 2023, is summarised below:

		( Rs. in Crore)
Particulars	2022-23	2021-22
Revenue from operations	2937.55	2725.42
Earnings before interest, depreciation, amortisation and taxation	376.56	600.64
Interest / finance costs	37.78	51.43
Profit before depreciation and taxation	338.78	549.21
Depreciation and amortisation expenses	146.82	145.21
Profit before taxation	191.96	404.00
Taxation	69.14	140.75
Net profit	122.82	263.25
Transferred from Employee stock Options	4.67	-
Outstanding
Profit brought forward from last year	782.69	563.17
Profit available for appropriations	910.18	826.42
Appropriations
Other comprehensive income	1.32	2.37
Dividend on equity shares	46.10	46.10
Balance carried to balance sheet	865.40	782.69
EPS (J)	5.99	12.85

BUSINESS AND FINANCIAL PERFORMANCE

The financial year 2022-23 has been considerably impacted by sustained cost inflation, particularly in energy sources, driven by global supply chain dislocations, disruption in global trade in the wake of continuing geopolitical conflict in Europe, rupee depreciation against USD/EURO and prolonged excessive rains, especially in the markets your Company serves. Inflationary pressures in the economy have prompted central banks worldwide, including India, to tighten monetary policy, which has dampened the economys money supply, consumer sentiment and demand, notably in the retail consumer segment.

The year commenced with very soft demand across markets, with a revival in demand seen only from November 2022 onwards, largely in the B2B segment consuming Ordinary Portland Cement (OPC), putting further pressure on profitability. Despite unrelenting inflation in input costs, market dynamics did not allow your Company to pass on the increased costs to consumers. Thus, with soft demand, inflated energy costs and flat prices, the financial results for FY23 have been subdued and are significantly below the preceding year.

Your Company is widely acknowledged for its commitment towards energy and resource efficiency, social responsibility and environmental consciousness and has progressively adopted green, clean and sustainable materials and processes. As part of its commitment to sustainability and circularity, your Company has pushed its efforts further and enhanced its capabilities to use agro, industrial and municipal waste products, with the required care and precautions.

In terms of cost parameters, the Company remains one of the best in the industry, with its quest for efficiency, cost management, and innovation intensifying further during FY23. Significant savings have been achieved through the use of alternative fuels and raw materials (AFR), renewable power and improvements in various operating parameters. This has helped the Company partially mitigate the unprecedented inflation in energy costs and has also promoted green, clean, and sustainable development. Your Company has further enhanced the use of artificial intelligence, machine learning and other digital tools to optimise the fuel and raw mix and related costs. Also, even while optimising costs, future-proofing investments in information technology, analytics, artificial intelligence (AI), machine learning (ML), Waste Heat Recovery System (WHRS), fly-ash rake handling systems and others have been increased further.

Taking a further leap towards digitalisation, your Company has migrated to ‘SAP S/4 HANA Rise and moved to Google Cloud to further strengthen our analytics and decision-making capabilities and making us ready for future growth.

Your Company has entered the exclusive club of ‘Best Managed Companies for the year 2022 under a global programme run by Deloitte using rigorous evaluation. This is an affirmation of the Companys policies, processes, and overall management.

In pursuance of the Companys strategy towards improving its premium brand portfolio and product mix, after achieving encouraging success with its super-premium brand ‘Birla.A1 StrongCrete, your Company has launched a new premium ‘Responsible Cement brand, ‘Birla.A1 OrientGreen, leveraging its commendable track record of lower carbon footprint. The launch of this premium brand has created a brand portfolio for us which is unique in the industry, and which will be further embellished soon with the launch of a new water-repellent cement brand "Birla.A1 Dolphin".

The key business and financial highlights of your Company are as follows:

• Total sales volume for the year stood at 58 lakh tonnes against 55 lakh tonnes in FY22, a growth of ~5%.

• While trade (B2C) sales had a de-growth of 9% during the year, non-trade (B2B) volumes registered a growth of 29%

• As a result of the shift in the market mix, the blended cement sale was 57% for the year vs. 63% in FY 2021-22.

• Despite the muted overall B2C demand, the super-premium brand of your Company grew by 17% and of both the premium brands combined by 22% in FY23 vs. last year.

• The overall capacity utilisation stood at 68%.

• EBITDA for the year was H376.56 crore, representing a 37% decline over H600.64 crore for last year.

• The finance costs for the year are lower by 27% over FY 2021-22.

• Net profit for the year has come down by 53% vs. last year; it was H122.82 crore as compared to H263.25 crore in FY 2021-22.

A key priority for your Company throughout the FY23 remained the safety and well-being of its employees, the communities within which it operates and its channel partners, vendors and customers. Your Company also extended all assistance and support to the communities around its area of operations to mitigate their hardship, in consultation and collaboration with the local administration.

DIVIDEND

During the financial year, your Company has paid an interim dividend of H0.50/- per equity share (50%) of face value of H1/- each to the shareholders whose names appeared on the register of members as on February 10, 2023, the record date fixed for this purpose. Additionally, your directors are pleased to recommend a final dividend amounting to H1/- (100%) per equity share of face value of H1/- each for the financial year ended March 31, 2023, as against an interim and final dividend of H 0.75/- (75%) and H1.75/- (175%), respectively, per equity share totalling H2.50/- (250%) paid in the immediately preceding year. The payment of the final dividend for the financial year 2022-23 is subject to the approval of shareholders at the forthcoming Annual General Meeting.

The Register of Members and Share Transfer Books of the Company will remain closed from Wednesday, July 26, 2023 to Tuesday, August 1, 2023, both days inclusive, for determining the entitlement of the shareholders to the final dividend for financial year 2022-23.

Your Company has been consistently declaring dividends since its inception. Pursuant to Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements)

Regulations, 2015, as amended (the ‘SEBI Listing Regulations), the Board has adopted a Dividend Distribution policy. Dividends declared or recommended by the Company are in accordance with the Companys Dividend Distribution policy.

The Dividend Distribution policy is available on the website of the Company and can be accessed through the web link: https://www.orientcement.com/wp-content/uploads/2017/02/ Dividend-distribution-Policy.pdf

BOARD OF DIRECTORS, ITS COMMITTEES AND MEETINGS THEREOF

The Company has a professional Board with an optimal composition of executive, non-executive and independent directors, including two female directors, one of whom is independent. The Board members bring to the fore the right mix of knowledge, skills and expertise and provide strategic guidance and direction to the Company to achieve its business objectives and protect the interests of its stakeholders. The Board is also supported by five committees of directors, viz., the Audit Committee, the Nomination & Remuneration cum Compensation Committee, the Corporate Social Responsibility Committee, the Stakeholders Relationship Committee and the Risk Management Committee.

One meeting of the Board of directors is held each quarter. Additional meetings of the Board or Committees are convened as may be necessary for the proper management of the business operations of the Company. A separate meeting of independent directors is also held at least once in a calendar year, inter-alia, to review the performance of non-independent directors, the Board as a whole and the Chairman.

During the financial year ended March 31, 2023, the Board of Directors met 5 times, viz., on May 11, 2022, July 28, 2022, November 9, 2022, January 31, 2023 and March 31, 2023. The intervening gap between the meetings was within the period prescribed under the Companies Act, 2013 and SEBI Listing Regulations.

A detailed update on the Board and its Committees composition, the number of meetings held during the financial year 2022-23 and the attendance of the directors at these meetings is provided in the Report on Corporate Governance.

CHANGES IN DIRECTORS

In terms of the provisions of Section 152 of the Companies Act, 2013 and in terms of the Articles of Association of the Company, Mr. Chandrakant Birla (DIN 00118473), a Non-Executive Director of the Company, is liable to retire by rotation at the ensuing Annual General Meeting of the Company and being eligible, offers himself for re-appointment. The Board of Directors recommends the resolution for re-appointment of Mr. Chandrakant Birla, liable to retire by rotation, for the approval of the members of the Company at the ensuing Annual General Meeting.

Brief profiles and other details relating to the directors are furnished in the Annual Report.

DECLARATION BY INDEPENDENT DIRECTORS

The Company has received the requisite declarations from each independent director under Section 149 of the Act and Regulation 25 of the SEBI Listing Regulations, confirming that he or she meets the criteria of independence laid down in Section 149 of the Act and Regulation 16(1)(b) of the SEBI Listing Regulations.

The independent directors of the Company had their names included in the data bank of independent directors being maintained by the Indian Institute of Corporate Affairs and had also complied with the requirements of the proficiency test under the Companies (Appointment and Qualification of Directors) Rules, 2014.

PERFORMANCE EVALUATION

Pursuant to the provisions of the Companies Act, 2013 and SEBI Listing Regulations, the Board has carried out an annual evaluation of (i) its own performance; (ii) individual directors performance; (iii) the performance of the Chairman of the Board; and (iv) the performance of all committees of the Board for the financial year 2022-23.

The performance evaluation was conducted using individual questionnaires, covering various aspects, including, inter-alia, the structure of the Board, participation and contribution at the meetings of the Board, receipt of regular inputs and information and the skill set, knowledge and expertise of the directors. The committees of the Board were assessed on, inter-alia, the degree of fulfilment of key responsibilities, the adequacy of committee composition and the efficacy of meetings.

The performance of non-independent directors, the Board as a whole and the Chairman was assessed in a separate meeting of independent directors. A similar evaluation was also carried out by the Board. The performance evaluation of independent directors was done by the entire Board, excluding the independent director being evaluated. The evaluation was carried out in terms of the Nomination and Remuneration policy of the Company. The Nomination and Remuneration cum Compensation Committee of the Company annually reviews the performance evaluation process.

The evaluation process confirms that the Board and its committees continue to operate effectively and that the performance of the directors meets expectations.

FAMILIARISATION PROGRAMME FOR INDEPENDENT DIRECTORS

A note on the familiarisation programme adopted by the Company for orientation and training of the directors in compliance with the Listing Regulations is provided in the report on Corporate Governance, which forms part of this Report.

KEY MANAGERIAL PERSONNEL

During the year under review, Mr. Soumitra Bhattacharyya, Chief Financial Officer (FCA- A059004), resigned from the services of the Company with effect from September 3, 2022. The Board of

Directors approved the appointment of Mr. Prakash Chand Jain (FCA- 079601), Finance Controller of the Company, as the Chief Financial Officer (CFO) of the Company with effect from January 31, 2023, to continue as CFO for the intermittent period till the appointment of the new incumbent to ensure seamless transition and adherence to the regulatory compliances.

In addition, in terms of the provisions of Section 203 of the Companies Act, 2013, Mr. Desh Deepak Khetrapal – Managing Director and CEO (DIN 02362633) and Mrs. Nidhi Bisaria – Company Secretary (FCS-5634) continued to hold their respective offices during the financial year 2022-23 as key managerial personnels.

POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION

The Company endeavours to have an appropriate mix of executive, non-executive and independent directors to maintain independence from management and continuously provide appropriate governance and guidance. The selection and appointment of Board members are done on the recommendations of the Nomination & Remuneration cum Compensation Committee. The appointments are based on merit and have due regard for diversity. While evaluating the candidature of an independent director, the Committee abides by the criteria for determining independence as stipulated under the Companies Act, 2013 and the SEBI Listing Regulations. In the instance of the re-appointment of directors, the Board takes into consideration the results of the performance evaluation of the directors.

The Nomination & Remuneration policy for directors, key managerial personnel and the senior management is placed on the website of the Company and can be accessed through the web link: https://www.orientcement.com/wp-content/uploads/2019/05/ NRC_Policy-22_3_2019.pdf.

DETAILS OF ESTABLISHMENT OF VIGIL MECHANISM / WHISTLE BLOWER POLICY

Your Company has in place a robust vigil mechanism through a Whistle Blower policy to deal with instances of illegal practices, unethical behaviour, actual or suspected fraud or violation of the Companys Code of Conduct and Ethics policy.

Adequate safeguards are provided against victimisation for those who take recourse to the mechanism. The details of the Whistle Blower policy are explained in the Corporate Governance Report. The Whistle Blower policy is available on the Companys website and can be accessed through the web link: https://www.orientcement. com/wp-content/uploads/2016/05/Whistle-Blower-Policy.pdf.

AUDIT COMMITTEE

The Company has a duly constituted Audit Committee in line with the provisions of the Companies Act, 2013 and SEBI Listing Regulations. The primary objective of the Committee is to monitor and provide effective supervision of the Managements financial reporting process to ensure accurate and timely disclosures with the highest level of transparency, integrity and quality of financial reporting. The

Committee met four (4) times during the year. Detailed information pertaining to the Audit Committee has been provided in the Report on Corporate Governance.

AWARDS AND RECOGNITIONS

Your Company has been certified as a ‘Great Place to Work for the fourth year in a row through the assessment conducted by the Great Place to Work Institute. This certification demonstrates the organisations ‘High-Trust, High-Performance Culture. Also, the Company was chosen as a ‘Best Managed Company for the year 2022 as part of a global programme run by Deloitte, a leading global consulting firm.

In recognition of its constant pursuit of excellence in energy efficiency, environmental protection, safety, growth and innovation, your Company has been honoured and recognised at various forums. The prominent awards earned during FY23 are listed below:

Devapur plant:

1) 27^th Mines Environment and Minerals Conservation Awards 2022 for Devapur Limestone Mines

• 1^st Prize: Waste Dump Management

• 2^nd Prize: Sustainability, Reclamation and Rehabilitation, Mineral Beneficiation

• 3^rd prize: Overall

2) Platinum award under the Apex India Green Leaf Award 2021 for ‘Energy Efficiency and ‘Environment Excellence in the Cement sector.

3) Winner of the ‘Environment Award 2022 from the Greentech Foundation for outstanding achievements in environment protection during the 22^nd Annual Greentech Environment Summit.

4) ‘Excellence in Energy Management 2022 national award for Energy Efficiency Unit from CII (Confederation of Indian Industry) during the 23rd National Award Event.

5) Won the Platinum Award 2022 received from the Apex India Foundation for Occupational Health and Safety in the Cement sector.

6) Received the National Energy Management Seem Platinum Award 2021 from the Society of Energy Engineers and Managers (SEEM).

7) Was honoured with the Platinum Award in the 13^th EXCEED Occupational Health and Safety Award 2022 received from the Sustainable Development Foundation (a unit of EK KAAM DESH KE NAAM).

8) 37^th Mines Safety Week 2022 Awards received by Devapur Limestone Mines:

• 1^st Prize: Overall Performance, Safe Mine Working, Heavy Earth Moving Equipments

• 2^nd Prize: Environment, Health and Skill Management, Loading and Transportation, Safety for Sustainability

9) 28^th MEMC Awards 2023, Devapur Limestone Mines:

• First Prize: Overall Performance, Mineral Conservation, Waste Dump Management, Mineral Beneficiation

• Second Prize: Reclamation and Rehabilitation

• Third Prize: Sustainable Development

10) Devapur Limestone Mines was awarded a 5-star* rating by the Indian Bureau of Mines (IBM) for exemplary performance in the implementation of the Sustainable Development Framework during 2021-22.

11) Platinum award under the Apex India Green Leaf Award 2022 for ‘Environment Excellence in the Cement sector by the APEX India Foundation.

Chittapur plant:

1) Platinum award under the Apex India Green Leaf Award 2021 for ‘Environment Excellence in the Cement sector by the Apex India Foundation.

2) The National Energy Management Seem ‘Gold Award 2021 was received from the Society of Energy Engineers and Managers (SEEM).

3) Winner of the ‘Environment Protection 2022 Award from the Greentech Foundation for outstanding achievements in Environment protection awarded during the 22^nd Annual Greentech Environment Summit.

4) Platinum award received from the Apex India Foundation for Occupational Health and Safety and Environment Excellence in the Cement sector.

5) National awards for ‘Excellence in Energy Management 2022 and ‘Energy Leader 2022 for the Energy Efficiency Unit were received from the CII during the 23^rd National Award Event.

6) 2^nd best industry award in the ‘Mega industry- more than 1000 workforce category in the state-level annual (2022-23) safety award competition conducted under the aegis of the Department of Factories and Boilers, Government of Karnataka.

7) ‘Best Safety Officer Award from the Director of Factories, Boilers, Industrial Safety and Health, Government of Karnataka, in the 52^nd National Safety Day-2023 competition.

8) Won the 2^nd prize from the Director of Factories and Boilers, Government of Karnataka, in the Annual State Level Safety Awards Function under ‘Power Boilers Category.

9) Chittapur Power Plant has been awarded ‘Best Energy Efficient Plant - COAL (CPP) in the Southern Region, under the winner category for Reducing Net Heat Rate (RNHR) at the National Efficiency Awards 2023.

10) Winner of efficient management of Fly Ash in the CPP Southern region.

11) Excellence in Water Management under the Zero Liquid Discharge plant CPP- Coal Category.

12) Mines Safety Week Observation 2022-23: Under the aegis of the Director General of Mines Safety

• First Prize - Contractual Work vis-a-vis Safety and Safety is My Responsibility Card, Swachh Bharat Abhiyan (Group B1)

• Second Prize - Occupational Health Welfare Amenities, Preparation of SOPs and Implementation, Maintenance of Mining Machinery and Crusher (Group B1)

• Third Prize - Overall Performance, Drilling and Blasting, Mine Workings, Publicity, Propaganda and Innovation (Group B1)

13) Mine Environment and Mineral Conservation Week 2022 - 23: Under the aegis of the Indian Bureau of Mines

• First Prize - Waste dump management, Reclamation and Rehabilitation, Mineral Conservation, Energy Conservation, Best Practice Adopted in Mines (Group- 2)

• Second Prize - Overall Performance, Sustainable Mining, Sustainable Development, Publicity and Propaganda (Group- 2)

Jalgaon plant:

1) ‘Excellence in Energy Management 2022 Award as an Energy Efficient Unit by CII (Confederation of Indian Industry) at the 22^nd National Award Event.

2) ‘Gold Award 2022 for outstanding achievement under ‘Occupational Health and Safety by Grow Care India, New Delhi.

3) ‘Greentech Corporate Governance Award 2022 for Excellence in Corporate Governance by the Greentech Foundation.

4) Gold award under the Apex India Green Leaf Award 2022 for ‘Environment Excellence and ‘Energy Efficiency in the Cement sector by Apex India Foundation.

STATUTORY AUDITORS

M/s B S R & Associates LLP, Chartered Accountants (ICAI Firm Registration Number 116231W/W-100024), were appointed as Statutory Auditors of the Company by the shareholders at the Annual General Meeting held on August 5, 2021, to hold office as Statutory Auditors for the term of five years from the conclusion of the 10^th Annual General Meeting of the Company held in the year 2021 till the conclusion of the 15^th Annual General Meeting of the Company to be held in the calendar year 2026.

The Auditors Report for the financial year 2022-23 does not contain any reservation, qualification or adverse remark on the financial statements of the Company. The Auditors Report is self-explanatory and therefore, does not require further comments or explanation. The Auditors Report for the financial year ended March 31, 2023 on the financial statements of the Company forms part of this Annual Report.

Additionally, in terms of Section 143 of the Companies Act, 2013, read with the Companies (Audit and Auditors) Rules, 2014, as amended, along with notifications and circulars issued by the Ministry of Corporate Affairs from time to time, no fraud has been reported by the Auditors of the Company where they have reason to believe that an offence involving fraud is being or has been committed against the Company by officers or employees of the Company.

COST AUDITORS

In accordance with Section 148 of the Companies Act, 2013, read with the Companies (Cost Records and Audit) Rules, 2014, the Company has maintained cost accounting records. Mr. Somnath Mukherjee, Cost Accountant in practice (M.No.-F5343) has carried out the cost audit for the financial year 2022-23.

Mr. Somnath Mukherjee has consented to act as the Cost Auditor of the Company for the financial year 2023-24 and has confirmed that he is not disqualified for such re-appointment in terms of Section 141 of the Companies Act, 2013. The Board of Directors on the recommendation of the Audit Committee, has appointed Mr. Somnath Mukherjee, Cost Accountant (M.No.-F5343), as Cost Auditor of the Company for the financial year 2023-24. The remuneration proposed to be paid to the Cost Auditor for the financial year 2023-24 is set out in the Notice of ensuing 12^th Annual General Meeting for ratification by the shareholders of the Company.

SECRETARIAL AUDITORS

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, M/s Ranjeet Pandey and Associates, Company Secretaries (Registration No. FCS-5922/CP No. 6087), were appointed to conduct the Secretarial Audit of the Company for the financial year 2022-23 and have, accordingly, carried out an audit of the secretarial records of the Company for the financial year.

The Secretarial Audit Report, annexed to this report as Annexure ‘1, does not contain any reservation, qualification or adverse remark and is self-explanatory. Therefore, it does not require further comments or explanation.

Pursuant to the provisions of Regulation 24A of the SEBI Listing Regulations, read with SEBI Circulars issued in this regard, the Company has undertaken an audit for the financial year 2022-23 for all applicable Securities and Exchange Board of India ("SEBI") compliances. The Annual Secretarial Compliance Report issued by M/s Ranjeet Pandey and Associates, Company Secretaries (CP No. 6087), for the financial year ended March 31, 2023 has been submitted to the Stock Exchanges within the prescribed time limit.

Pursuant to the provisions of section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board, on the recommendation of the Audit Committee, has appointed M/s Ranjeet Pandey and Associates, as the Secretarial Auditor for the financial year 2023-24.

PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS

The Company has not given any loan or guarantee and/or provided security that are covered under the provisions of Section 186 of the Companies Act, 2013.

Please refer to note no. 11 of the notes to the financial statements of the Company for the financial year 2022-23 for details regarding inter-corporate investments of the Company as of March 31, 2023.

RELATED PARTY TRANSACTIONS

The Company has adequate procedures for the identification and monitoring of related-party transactions. All transactions entered into with related parties during the financial year were on an arms length basis and in the ordinary course of business. All related-party transactions were placed before the Audit Committee and the Board for approval, wherever required. Omnibus approval of the Audit Committee and the Board was obtained for the transactions that were of a foreseen and repetitive nature. These transactions were reviewed by the Audit Committee on a quarterly basis.

There were no materially significant related-party transactions made by the Company with promoters, directors, key managerial personnel or other designated persons that may have a potential conflict with the interests of the Company at large.

For details on related-party transactions, members may refer to the notes to the financial statements. The policy on related party transactions as approved by the Board is available on the Companys website and can be accessed through the web link: https://www. orientcement.com/wp-content/uploads/2022/04/Related-Party-Transaction-Policy.pdf.

Particulars of contracts or arrangements with related parties referred to in Section 188(1) of the Companies Act, 2013, in the prescribed Form AOC-2, are annexed as Annexure ‘2 to this Report.

CHANGE IN THE NATURE OF BUSINESS

There was no change in the nature of the business of the Company during the year under review.

MATERIAL CHANGES AND COMMITMENTS

No material changes or commitments affecting the financial position of the Company have occurred between March 31, 2023, and the date of the report.

RISK MANAGEMENT

The Company has constituted a Risk Management Committee of the Board to review the Companys risk management plan and processes. The Risk Management Committee identifies potential risks, assesses their potential impact and takes timely action to mitigate them.

The Company has a comprehensive Risk Management policy that has been approved by the Board. The Risk Management policy acts as an overarching statement of intent and establishes the guiding principles by which key risks are managed across the organisation. The Board monitors and reviews periodically the implementation of various aspects of the Risk Management policy through a duly constituted Risk Management Committee (RMC). The RMC assists the Board in its oversight of the Companys management of key risks, including strategic and operational risks, as well as the guidelines, policies and processes for monitoring and mitigating such risks under the aegis of the overall Business Risk Management Framework.

There are no risks identified by the Board that may threaten the existence of the Company. Please refer to the detailed section on risk management covered in the Management Discussion and Analysis Report, which forms an integral part of this Report.

The details about the Risk Management Committee are provided in the Corporate Governance Report, which forms part of this Report.

INTERNAL FINANCIAL CONTROLS AND ITS ADEQUACY

As per the provisions of Section 134(5)(e) of the Companies Act, 2013, the directors have an overall responsibility for ensuring that the Company has implemented robust systems and frameworks of internal financial controls to provide them with reasonable assurance regarding the adequacy and operating effectiveness of controls with regard to reporting, operational and compliance risks. To enable the directors to meet these responsibilities, the management has devised systems and frameworks that are operating effectively within the Company. In line with best practices, the Audit Committee and the Board regularly review the internal control system to ensure that it remains effective and fit for purpose. Where weaknesses are identified as a result of the reviews, new procedures are put in place to strengthen controls and these are in turn reviewed at regular intervals. The systems and frameworks include proper delegation of authority, policies and procedures, effective IT systems aligned to business requirements, an internal audit framework, an ethics framework, a risk management framework, adequate access controls and segregation of duties.

Your Companys management has established and maintained internal financial controls based on the internal control over financial reporting criteria established in the integrated framework issued by the Committee of Sponsoring Organisations of the Treadway Commission (2013 Framework) (the COSO criteria), which considers the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India. Based on the information provided, nothing has come to the attention of the directors to indicate that any material breakdown in the function of these controls, procedures or systems occurred during the year under review.

The Internal Auditor of the Company reports functionally to the Audit Committee of the Board, which reviews and approves the risk-based annual internal audit plan. The Audit Committee periodically reviews the performance of the internal audit function.

CORPORATE SOCIAL RESPONSIBILITY

The basic concept of a companys Corporate Social Responsibility (‘CSR) is to serve the interests of society in a just and equitable manner while also taking responsibility for the impact of business activities on various stakeholders in all aspects of the companys operations. Your Company has been taking several initiatives under CSR for the society at large, much before it was prescribed through the Companies Act, 2013.

The Board has constituted a CSR Committee and has a well-defined policy on CSR as per the requirement of Section 135 of the Companies Act, 2013, which covers the activities as prescribed under Schedule VII of the Companies Act, 2013. The details about the CSR Committee are provided in the Corporate Governance Report, which forms part of this Report.

The Board of Directors, based on the recommendation of the Corporate Social Responsibility Committee, in its meeting held on March 31, 2023, approved classifying the Devapur School project as an ongoing project in terms of the provisions of Section 135 of the Companies Act, 2013 read with the Companies (Corporate Social Responsibility Policy) Rules, 2014, with an objective to pursue the improvement plans targeted at enhancing the quality and scope of education, learning experience, students holistic growth and providing increased mobility to its students.During the financial year under consideration, a separate bank account, OCL Unspent CSR Account FY2022-23, has been opened and has been credited with an amount of H284.39 lakh to be utilised towards the Devapur School project in the ensuing 3 financial years, i.e., up to financial year 2025-26.

The Annual Report on CSR Activities, pursuant to Section 134(3)(o) of the Companies Act, 2013 and Rule 9 of the Companies (Corporate Social Responsibility Policy) Rules, 2014, forms part of this Report as Annexure ‘3.

The CSR policy of the Company is placed on the Companys website and can be accessed through the web link: https://www. orientcement.com/wp-content/uploads/2021/05/corporate-social-responsibilty-policy.pdf.

PARTICULARS OF EMPLOYEES, DIRECTORS AND KEY MANAGERIAL PERSONNEL

The disclosures relating to remuneration and other details as required in terms of the provisions of Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of 60 Managerial Personnel) Rules, 2014 are given in Annexure ‘4, which forms an integral part of this Report.

Further, in terms of the first proviso to Section 136 of the Act, the Reports and Accounts are being sent to the shareholders excluding the information required under Rules 5(2) and (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. The said information will be made available for inspection through electronic mode by writing to the Company at investors@ orientcement.com from the date of circulation of the AGM Notice until the date of the AGM.

SHARE CAPITAL

As on March 31, 2023, the issued, subscribed and paid-up share capital of the Company was 20,48,68,760 shares of H1/- each. There was no change in the capital structure of the Company during the financial year ended March 31, 2023.

ANNUAL RETURN

Pursuant to Section 134(3)(a) and Section 92(3) of the Companies Act, 2013 read with Rule 12 of the Companies (Management and Administration) Rules, 2014, the annual return of the Company as on March 31, 2023, can be accessed through the web link https:// orientcement.com/wp-content/uploads/2019/05/2022-23.pdf

EMPLOYEES STOCK OPTION SCHEME

The Company has in place the Orient Cement Employees Stock Option Scheme 2015 (‘ESOP Scheme 2015), which provides for the grant of stock options to eligible employees of the Company selected by the Nomination & Remuneration cum Compensation Committee from time to time, subject to satisfaction of the prescribed vesting conditions.

During the financial year 2022-23, the Board of Directors granted 3,10,099 stock options under ESOP Scheme 2015 out of which award letters for 2,41,137 stock options have been issued to the eligible employees. The applicable disclosure under SEBI (Share Based Employee Benefits) Regulations, 2014 ("SEBI Regulations") as of March 31, 2023, has been uploaded on the website of the Company and can be accessed through the web link https:// orientcement.com/wp-content/uploads/2019/05/2023.pdf There was no change in the ESOP Scheme 2015 of the Company during the financial year. Further, the Board of Directors in its meeting held on April 28, 2023, based on the recommendation of the Nomination & Remuneration cum Compensation Committee, has recommended change in the definition of Exercise Period defined under ESOP Scheme 2015, subject to the approval of shareholders. The proposed change in the said Scheme is set out in the Notice of ensuing 12^th Annual General Meeting for the approval of shareholders.

A certificate from M/s Ranjeet Pandey and Associates, Company Secretaries (Registration No. FCS-5922/CP No. 6087) and Secretarial Auditors of the Company confirming that the scheme has been implemented in accordance with the SEBI Regulations would be placed at the ensuing Annual General Meeting of the Company for inspection by the shareholders.

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

The Company has zero tolerance towards sexual harassment at the workplace and has adopted a policy on prevention, prohibition and redressal of sexual harassment at the workplace in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules thereunder. The Company has constituted an Internal Complaints Committee, which is responsible for redressing complaints related to sexual harassment.

During the financial year ended March 31, 2023, the Company has not received any complaint under the aforesaid regulations, nor was any complaint pending resolution from the previous year.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

As required by Regulation 34(2) of the SEBI Listing Regulations, a detailed Management Discussion and Analysis Report is presented in a separate section, forming an integral part of the Annual Report.

CORPORATE GOVERNANCE

Corporate Governance ensures the fairness, transparency and integrity of the management. As a part of its strategy, the Company believes in adopting the ‘best practices that are followed in the area of Corporate Governance. The Company emphasises the need for full transparency and accountability in all its transactions to protect the interests of its stakeholders. The Board considers itself a trustee of the Companys shareholders and acknowledges its responsibilities towards them in creating and safeguarding their wealth. The Company is committed to high levels of ethics and integrity in all its business dealings to avoid conflicts of interest. To conduct business while upholding these principles, the Company has created a corporate structure based on business needs and maintains a high degree of transparency through regular disclosures with a focus on adequate control systems.

As per Regulation 34(3) read with Schedule V of the SEBI Listing Regulations, a detailed report on Corporate Governance forms an integral part of this Annual Report and is set out as a separate section.

The certificate of M/s B S R & Associates LLP (ICAI Firm Registration Number 116231W/W-100024), Chartered Accountants, the Statutory Auditors of the Company, certifying compliance with the conditions of corporate governance as stipulated in the SEBI Listing Regulations is annexed with the Report on Corporate Governance. The Auditors certificate for the financial year 2022-23 does not contain any qualification, reservation or adverse remark.

LISTING WITH STOCK EXCHANGES

The equity shares of the Company continue to be listed on the National Stock Exchange of India Limited and the BSE Limited. The annual listing fees for the financial year 2023-24 have been paid to these exchanges.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to Section 134(3)(c) of the Companies Act, 2013, the Board of Directors hereby states that:

1. In the preparation of the annual accounts for the financial year ended March 31, 2023, the applicable accounting standards have been followed along with a proper explanation relating to material departures, if any;

2. They have selected such accounting policies, applied them consistently and made informed judgements 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 of March 31, 2023, and of the profit and loss of the Company for the year ended on that date;

3. They have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and preventing and detecting fraud and other irregularities;

4. They have prepared the annual financial statements on a going concern basis;

5. They have laid down internal financial controls to be followed by the Company and such internal financial controls are adequate and operating effectively;

6. They have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

CONSERVATIONOFENERGYANDTECHNOLOGY ABSORPTION

The Company consistently strives to conserve energy through enhancing energy efficiency, upgrading technology, process optimisation, resource substitution, digital transformation with data integration and automating information. It continues to prioritise the circular economy and the reduction of carbon footprint. As a part of its endeavour towards a circular economy, the Company is consistently using sub-grade limestone and fly ash in the manufacturing process and has explored new alternative raw materials such as wastes of other industries, to conserve non-renewable natural resources. Several industrial wastes, agro wastes and other wastes such as liquid hazardous waste, refuse-derived fuel, plastic waste, paper cups, cow dung, cloth waste and others are collected from nearby areas and co-processed at the Companys integrated plants. During the financial year 2022-23, the Company developed infrastructure and feeding facilities to enhance the utilisation of alternative fuels across its integrated plants.

During the financial year 2022-23, the Company continued its journey towards digitisation and various applications were implemented across its plants. Some of these initiatives include:

a. A mobile app solution was implemented for mine engineers and plant real-time data monitoring. b. Plant optimisation through an artificial intelligence tool was used to analyse the disturbance affecting the systems performance. c. Artificial intelligence based feed mix optimisation. d. Installation of PID control logic initiatives to minimise human intervention and ensure seamless operations at the plant, and so on.

As a result of these initiatives, Orient Cement, especially its integrated cement plant at Chittapur, has one of the lowest specific energy and fuel consumption rates in the cement industry.

To further build on the several measures implemented by the Company during the financial year 2022-23 towards conservation of energy and as part of green energy initiatives, the Company has targeted meeting 50% of its electrical energy requirement through renewable sources by 2030. The Jalgaon plant of the Company consumes 59% of renewable energy in its overall energy mix from the solar power capacity set up in association with AMP Solar Technology Private Limited and AMP Solar Systems Private Limited under the Captive Scheme in Maharashtra with a capacity of 13.5 MWdc. In addition to this, the Company is in the process of commissioning the Waste Heat Recovery System at Chittapur with a capacity of 10.1 MW in the first quarter of FY24.

The Company focuses on the effective management of water within its operations. Further, it implemented several initiatives to reduce freshwater withdrawal, increase rainwater harvesting, build groundwater recharge structures and reduce the dependency on groundwater by increasing the usage of mined-out reservoir water. All our plants are water-positive.

The particulars required under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 regarding conservation of energy and technology absorption are enclosed as Annexure ‘5, which forms part of this Report.

FOREIGN EXCHANGE EARNINGS AND OUTGO

During the financial year, the Company did not earn any foreign exchange.

The total foreign exchange outgo during the year was H 209.94 crore.

SUBSIDIARIES, ASSOCIATES AND JOINT VENTURE COMPANIES

During the financial year 2022-23, the Company had no subsidiary, associate or joint venture company.

DEPOSITS

During the financial year under review, the Company did not accept deposits covered under Chapter V of the Companies Act, 2013.

SIGNIFICANT AND MATERIAL ORDERS

There are no significant and material orders passed by the regulators, courts or tribunal that would impact the going concern status of the Company and its future operations.

BUSINESSRESPONSIBILITYANDSUSTAINABILITY REPORT

In accordance with the requirements of the Listing Regulations, the Business Responsibility and Sustainability Report (BRSR) has been prepared for the financial year 2022-23 and is included as part of this Annual Report.

COMPLIANCE WITH SECRETARIAL STANDARDS

The Company has complied with the applicable Secretarial Standards issued by the Institute of Company Secretaries of India.

OTHER DISCLOSURES

Your Directors state that no disclosure or reporting is required with respect to the following items, as there were no transactions related to these items during the year under review:

1. Transfer or proposed transfer of an amount to reserves.

2. Issue of equity shares with differential voting rights or sweat equity.

3. Applications made or any proceeding pending under the Insolvency and Bankruptcy Code, 2016, during the year, along with their status as at the end of the financial year.

4. Difference between the amount of the valuation done at the time of one-time settlement and the valuation done while taking a loan from the banks or financial institutions, along with the reasons thereof.

ACKNOWLEDGEMENT

Your Directors take this opportunity to extend their gratitude to all shareholders, clients, vendors, banks, ministries and departments of the Government of India, as well as regulatory authorities, for their continued support. The Directors also place on record their deep appreciation to all the employees for their hard work, dedication and commitment, which enabled the delivery of improved performance by your Company during a year full of extreme volatility and challenges.

By order of the Board of Directors

For Orient Cement Limited

CK. Birla

Place:New Delhi

Chairman Date: April 28, 2023 (DIN 00118473)