birla corporation ltd share price Directors report

To the Members

The Directors have the pleasure in presenting the 103rd Annual Report on the business and operations of Birla Corporation Limited (‘Company) together with the Audited Financial Statements of the Company and its Subsidiaries for the financial year ended 31st March, 2023. The Management Discussion and Analysis also forms a part of this Report.

FINANCIAL PERFORMANCE

The financial performance of the Company (Standalone and Consolidated) for the financial year ended 31st March, 2023 and its comparison with the previous year is summarised below:

				(Rs in Crore)
	STANDALONE		CONSOLIDATED
PARTICULARS	31.03.2023	31.03.2022	31.03.2023	31.03.2022
Revenue from Operations (Gross)	5441.19	4790.93	8682.27	7461.22
Total Income	5543.61	4885.32	8795.32	7560.00
Profit before Finance Costs, Tax,	368.12	581.27	885.06	1208.79
Depreciation, Amortization, Minority
Interest and Exceptional items
Finance Costs	107.00	100.53	338.72	242.66
Profit before Tax, Depreciation, Amortization,	261.12	480.74	546.34	966.13
Minority Interest and Exceptional items
Depreciation and Amortization Expense	187.31	176.86	509.88	396.94
Exceptional items	25.46	31.44	(6.65)	31.44
Tax Expense (Net)	2.95	69.52	2.61	139.16
	215.72	277.82	505.84	567.54
Profit for the year	45.40	202.92	40.50	398.59
Profit for the year attributable to non controlling interest	-	-	-	-
Profit for the year attributable to owner of the Parent	45.40	202.92	40.50	398.59
Re-measurement of the defined benefit plans (net of tax expenses)	(0.29)	5.66	(2.84)	6.25
Total Surplus during the year	45.11	208.58	37.66	404.84
Surplus as per the last Financial Statements*	1079.38	947.81	1825.51	1497.68
Appropriations:
Dividend paid on Ordinary Shares	77.01	77.01	77.01	77.01
Net Surplus	1047.48	1079.38	1786.16	1825.51

* After adjustment of re-measurement of the defined benefit plans (net of tax expenses)

FINANCIAL HIGHLIGHTS AND STATE OF COMPANYS AFFAIRS

Financial year 2022-2023 was extremely challenging as input costs particularly fuel increased substantially which continued to impact operations. The Companys full year consolidated revenue for the financial year 2022-2023 grew 16.34% over the previous year to Rs 8795.32 crores, despite sluggish demand in most key markets, thanks largely to a significant spurt in sales in the March quarter which wiped out cumulative losses till end of December.

However, profitability was seriously impaired by rising input costs and the cement industrys inability to raise prices. EBIDTA for the financial year 2022-2023 at Rs 885.06 crores was down 26.78% from the previous year and cash profit was down 43.45% at Rs 546.34 crores. Consolidated Net Profit for the year declined 89.84% year-on-year to Rs 40.50 crores, compared with Rs 398.59 crores in the previous year.

DIVIDEND

The Directors are pleased to recommend a dividend of Rs 2.50 per share (i.e. 25%) on 7,70,05,347 Ordinary Shares of the Company for the year ended 31st March, 2023 aggregating to Rs 19.25 crores. The dividend recommended is in accordance with the Companys Dividend Distribution Policy. The Dividend Distribution Policy of the Company is uploaded on the Companys website at https://www.birlacorporation.com/investors/policies/dividend-distribution-policy.pdf.

Dividend is subject to approval of the Members at the ensuing Annual General Meeting. In view of the changes made under the Income Tax Act, 1961, by the Finance Act, 2020, dividends paid or distributed by the Company shall be taxable in the hands of the Shareholders. Accordingly, the Company shall make the payment of Dividend after deduction of tax at prescribed rates as per the Income Tax Act, 1961 and rules framed thereunder.

TRANSFER TO RESERVES

The Board of Directors have decided to retain the entire amount of profit for the financial year 2022-2023 in the Statement of Profit & Loss for the financial year ended 31st March, 2023.

SHARE CAPITAL

The paid up Equity Share Capital of the Company as on 31st March, 2023 stood at Rs 77.01 crores comprising of 7,70,05,347 Ordinary Shares of Rs 10 each. During the year the Company has neither issued shares with differential voting rights nor has granted any stock options or sweat equity. As on 31st March, 2023, none of the Directors of the Company hold instruments convertible into equity shares of the Company.

DEBENTURES

During the year the Company has partially redeemed Rs 30 Crores out of the principal amount of Rs 150 Crores of 1500 unlisted, Secured, Redeemable, Non-Convertible Debentures Series-VIII of Rs 10,00,000/- each on 8th December, 2022 and accordingly, the face value of the said Non-Convertible Debentures has been reduced from Rs 10,00,000/- to Rs 8,00,000/- per Debenture.

FINANCIAL STATEMENTS

The Company has prepared its financial statements as per IND AS requirements for the financial year 2022-2023. The estimates and judgments relating to the financial statements are made on a prudent basis, so as to reflect, in a true and fair manner, the form and substance of transactions and reasonably present the Companys state of affairs, profits and cash flows for the year ended 31st March, 2023.

CONSOLIDATED FINANCIAL STATEMENTS

The Consolidated Financial Statements of the Company are prepared in accordance with the provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 by following applicable IND AS issued by the Institute of Chartered Accountants of India and forms an integral part of this Report.

MATERIAL CHANGES AND COMMITMENTS

No material changes and commitments which could affect the financial position of the Company have occurred between the end of the financial year 2022-2023 and date of this Report.

KEY FINANCIAL RATIOS

The key financial ratios of the Company showing financial performance for the financial year ended 31st March, 2023, are given herein below:

Sl. Financial Ratios	2022-2023	2021-2022
No.
1. Debtors Turnover	23.92	22.64
2. Inventory Turnover	7.91	7.93
3. Interest Coverage Ratio *	3.20	5.47
4. Current Ratio	1.34	1.59
5. Debt Equity Ratio	0.23	0.25
6. Operating Profit Margin (%) ** #	4.95 %	10.28 %
7. Net Profit Margin (%) ##	0.85%	4.28%
8. Return on Net Worth (%)	1.08%	4.77%

* Interest Coverage Ratio was lower for the year ended 31st March, 2023 due to lower EBIDTA as compared to last year.

** Operating Profit Margin was lower for the year ended 31st March, 2023 due to lower profitability.

# Net Profit Margin was lower for the year ended 31st March, 2023 due to lower profitability.

## Return on Net Worth was lower for the year ended 31st March, 2023 due to lower profitability.

CHANGE IN NATURE OF BUSINESS

There has been no change in the nature of business of the Company during the financial year 2022-2023.

CEMENT DIVISION

(a) CEMENT INDUSTRY OVERVIEW:

India is the second largest cement producer in the world with installed capacity of over 600 Million Tons (MT) accounting for around 7% of the global capacity. Demand for cement is mainly driven by housing sector which is estimated to account for nearly 65% of the total demand. Infrastructure, Industrial and Commercial Construction are estimated to account for the remaining share of demand at 20% and 15%, respectively.

During the year 2022-2023, cement demand is estimated to have grown by 9% driven by demand from housing sector, infrastructure projects as well as rural demand. The year witnessed unprecedented increase in fuel prices driven by geo political events.

While the Industry took price hikes, it was not able to fully offset the sharp rise in input costs drivers. After peaking in the first quarter of 2022-2023, the international fuel prices have been correcting, providing relief to the industry players in the latter half of financial year 2022-2023.

(b) REVIEW OF OPERATIONS AND PERFORMANCE:

After sluggish performance till the end of December 2022, the Company staged a turnaround in the March quarter with the highest ever quarterly consolidated sales of 4.44 million tons, up 4.5% over the previous year. This represents a jump of 19% sequentially, which accompanied by gains in realisation and profitability, points at improving market conditions.

To optimise cost, the Company is increasingly ramping up consumption of renewable power and extraction of coal from the Sial Ghogri captive coal mine (Coal mine of RCCPL Private Limited, material subsidiary of the Company).

For the quarter ended March 2023, renewable power accounted for 25% of the Companys total power consumption, which is among the best in the industry. For the full year, renewables accounted for 21% of total power consumption.

In FY 2022-2023, production of coal at Sial Ghogri rose 71% over the previous year to 3,51,565 tons, which is close to the maximum the Company can extract from the mine in a year with its current mining plan.

Alongside, the Company is scaling up use of Alternative Fuel and Resources (AFR), for which investments are being made to equip kilns to use industrial and municipal waste as fuel.

Production of the Company (Standalone):

The details of production of clinker and cement of the Company are as follows:-

Particulars	2022-2023 (Lakh Tons)	2021-2022 (Lakh Tons)	Change %
Clinker production	56.80	53.40	6.36
Cement production	91.52	83.22	9.97

Production of RCCPL Private Limited (RCCPL), wholly

owned material subsidiary of the Company:

The details of production of clinker and cement of RCCPL are as follows:-

Particulars	2022-2023 (Lakh Tons)	2021-2022 (Lakh Tons)	Change %
Clinker production	44.00	35.03	25.61
Cement production	68.60	60.02	14.30

Sales:

During the year the Company has registered an increase of 8.64% in cement sales on standalone basis and 10.62% on consolidated basis. In absolute terms, the sale of cement on standalone basis has increased to 90.43 lakh tons from 83.24 lakh tons in the previous year.

RCCPL has sold 67.97 lakh tons of cement during financial year 2022-2023 compared with 59.88 lakh tons in the previous year.

Power Plant:

The details of power generated at various plants of the Company are as under:

Particulars	2022-2023	2021-2022	Change %
	(Lakh Units)	(Lakh Units)
Thermal Power Plant	711.40	2747.66	-74.11
WHRS	1183.73	1121.69	5.53
Solar Power	113.68	100.18	13.47

Owing to shortage of domestic coal and its significant prices, the cost of captive power generation had become uneconomical during the year. Accordingly, the Company decided to source most of its power requirements from the grid and reduce its own generation.

Cost and Profitability:

The Companys cost of production in FY 2022-2023, excluding finance cost, went up by almost 15%, largely on account of the jump in fuel costs. The cost of power and fuel, which accounts for around 30% of total production cost, went up by 46% over the previous year, impacting the Companys profitability. Things had started to turn around in the March quarter. Sequentially, fuel and power costs came down by 9% in the March quarter, and going forward, fuel prices is expected to soften further.

The Companys profitability on consolidated basis was also impacted by the start of commercial operations at Mukutban, unit of RCCPL, which is being scaled up. Most importantly, despite unfavourable market conditions in Maharashtra, the unit has turned cash-flow positive at the end of March.

For FY 2022-2023, the Company registered a consolidated EBIDTA of Rs 885.06 crores and a net profit of Rs 40.50 crores, down sharply from the previous year for reasons cited above.

Marketing Initiatives:

In FY 2022-2023, the Company achieved a sales growth by volume of 10.60% over the previous year. Dispatches from the new production unit of its material subsidiary at Mukutban started in the first quarter and expanded the Companys reach into untapped markets of Maharashtra and adjoining areas.

While scaling up sales in all key markets, the Company managed to maintain the share of premium cement in trade sales by volume at 51% for the full year, thanks largely to a spurt in sales of premium cement in the fourth quarter. For the full year, sales of blended cement grew around 10% over the previous year to 14.12 million tons. Share of high yielding blended cement within total sales was maintained at 90% for the full year.

Sales of premium cement for the full year stood at 6.15 million tons, which was the highest ever, up 8% over the previous year. The Company has established a strong foothold in the super premium category in core markets of Uttar Pradesh through the super-premium brand Rakshak. The Company commands around 15% share of the super-premium market.

The Company has been selected to supply construction material to the prestigious Bullet Train project between Mumbai and Ahmedabad.

The Company has started to sell ready-mix concrete in core markets of Lucknow to position itself as a complete building materials solution-provider. This, going forward, is expected to create new business opportunities as well as help retain existing customers.

The Company regularly engages with its channel partners and influencers. In FY 2022-2023, the MP Birla Group sponsored ‘Asian Scenario in Infrastructure Development under Indian Concrete Institute, Nagpur Chapter, which was attended by more than 400 engineers and government officials. Additionally, the Company regularly conducts meetings and training programs for masons, engineers as well as other engagement activities for independent home builders. In FY 2022-2023, the Company conducted plant visits for engineers across states to demonstrate its production capabilities and quality control protocols. These programs help in developing trust and loyalty towards MP Birla Cement brands and create long term bonding with stakeholders.

The Company started MP Birla Akanksha, a loyalty program for engineers and architects as well as a dealer app (Humsafar) for ease of channel partners.

In logistics, the Company has taken decisive measures for efficient and cost-effective movement. Track & Trace through implementation of Integrated Logistics Management System (ILMS) with help of Control Tower, GPS tracking and Electronic Proof of Delivery (E-PoD) provides end-to-end visibility and contribute in improvement of truck turnaround time.

The Company has implemented e-auction at all its plants for transportation to create a competitive environment among vendors. The enhanced support of ERP system provides real time data for maximization of efficiency.

In line with increasing focus on the non-trade segment, the Company has shored up its share of non-trade sales and continues to explore further opportunities in rural areas, infrastructure and government projects. Projects such as Bharatmala, Pradhan Mantri Awas Yojana and Urban Infra remain the key drivers in this segment.

Digital Initiatives:

Over the year, the Company has made significant strides in its journey to drive Digital Transformation. It has successfully leveraged leading-edge technologies to drive change across various key business functions and workflows. Going forward, empowered by the vision of 4Vs, put forward by the Management, the Company looks forward to:

1. Pivoting and Realigning the VISION with which these initiatives were designed;

2. Bringing renewed focus on ensuring that the envisaged Business VALUE is achieved;

3. Providing the necessary push required to ramp up the VELOCITY of organization-wide adoption;

4. Ensuring necessary on-ground VISIBILITY across key processes, parameters and result areas, for fostering speed and agility in decision-making.

Some of the key digitalisation initiatives and their business

impacts are summarized below:

l Enterprise-Wide:

Implementation of Project Milan - Merger of two disparate SAP instances of Birla Corporation Limited and RCCPL Private Limited, material subsidiary has now stabilized and helps centralise, manage overall Operations and get real-time visibility across all its plants and organisational units in one single location.

l Sales & Marketing:

Completion of Rollout of Customer Relationship Management helps to provide 360 degree view of the customers at fingertips. Dealer Management App provides the team and dealers, real-time access to details related to the Product, Orders, Sales, Invoices, Payments, Credit etc. Loyalty Management App has increased engagement and business by providing hassle-free management of loyalty incentives. Customer Onboarding Portal now enables digital on-boarding of Dealers while

Chatbot and WhatsApp Customer Services ensure timely and personalized support thereby improving customer engagement.

Logistics & Transportation:

E-bidding platform at key units now provide with a dependable mechanism for efficient price discovery across outbound dispatches resulting in significant savings.

Successful Rollout of In-Plant automation as part of

Integrated Logistics Management System (ILMS) at selected Integrated Unit has strengthened belief in the power of convergence. The Companys ILMS platform is one of the first such implementation in the industry, where disparate leading-edge technologies like the Internet, Mobile, RFID, IOT, GIS, ERP (SAP), Control tower, integrate, communicate and empower the business workflows. Base Models generated and validated in the

Network Optimisation Platform helps the Company in its efforts to monitor and optimize its distribution network.

l Operations & Maintenance:

Performance KPI Dashboards, Top Management MIS, Maintenance Process & Quality Control Process improvisations have all helped strengthen Companys visibility across organisation-wide O&M processes by providing a single, reliable, centralised view of key operational and financial parameters.

l Mines:

GPS based tracking of Mining Equipment now provides accurate and auditable trip and actual lead distance measurements for billing and payments. Regular Drone Surveys at all Mines now provides the Company with the ability to easily plan and acquire periodic, real-time & accurate geospatial data for creating a verifiable and reliable Digital Block model of the mines. Centralised Mines Management System has been recently deployed at one of the mines for digitalizing mining operations management.

l Finance & Accounts:

Implementation of 194R regulation, Automated Vendor Payment, Automatic Bank Reconciliation Payment and Collection Bank, Treasury Module-Letter of Credit and Bank Guarantee, Stock Transfer, Order Invoice clearing and Business Planning and Consolidation (BPC) modules now help the Company in optimizing and ensuring efficient financial controls, including Planning, Budgeting and Forecasting. They provide the Company with the ability to easily adjust plans and forecasts, speed up budget and closing cycles and ensure compliance with financial reporting standards.

Procurement :

Ariba E-Auction Platform Roll-out now helps the Company streamline its centralized procurement workflow enabling better price discovery in procurements. Material Master Management and Vendor Invoice Management (VIM) modules help efficiently digitalise invoice processing and payments.

Legal & Compliance:

Implementation of a comprehensive Legal Compliance Management solution across key business locations now helps to provide efficient monitoring and management of legal and regulatory compliances and enables Centralised visibility and tracking of compliances.

Digital transformation is an organisational change management initiative and not just a technology implementation project, one that requires tremendous amount of commitment and patience, as well as time and energy. The Company remains fully committed and invested in these digitalisation initiatives going forward, and aspires to empower and enable the organisation to be future-ready and adequately equipped to handle the changing contours of business and the socio-environmental landscape.

Mining Operations at Chanderia:

The Mining Operations (through blasting) at the Chanderia plant had been suspended since August, 2011 owing to the Order of Jodhpur High Court (Rajasthan), which was challenged by the Company before the Honble Supreme Court. As a partial relief, the Supreme Court had allowed mining operations beyond two kms from the Chittorgarh Fort by using heavy earth moving machinery. The Honble Supreme Court had further directed the Central Building Research Institute (CBRI) to submit a report after comprehensive study of all relevant aspects and facets relating to full-scale mining operations and its impact, if any, on the Chittorgarh Fort. The report of CBRI has concluded that vibrations and air pressures induced by the mine of Birla Cement Works and adjoining mines are well within safe limits as per national and international standards and there is no damage to the Fort due to the mining operations. The Company has filed an Interim Application seeking Interim Relief for blasting at the existing working pit. The matter is in the final stage of hearing.

(c) OUTLOOK:

Indians economy is widely expected to grow between 6% to 7% during the financial year 2023-2024.

Budget 2023 has focused on infrastructure capex to drive the economy. While the overall capital expenditure outlay has increased by 33% to Rs 10 lakh crores, road sector allocation has been increased by 25% to Rs 2.6 lakh crores and railways by 51% to Rs 2.4 lakh crores. Further, Pradhan Mantri Awas Yojana (PMAY)-Gramin saw the highest cost allocation of Rs 54.5 thousand crores since the launch of the scheme. These together with revival of demand in the real estate sector are expected to aid healthy demand growth in financial year 2023-2024 which is estimated to grow by 7% to 9% as per a leading research agency. Fuel prices have continued to correct. By the end of March, 2023 the international pet coke prices had corrected more than 40% from their peak prices in US Dollar terms. This together with higher volume is expected to improve the profitability margin for the industry in financial year 2023-2024.

JUTE DIVISION

(a) JUTE INDUSTRY OVERVIEW:

Jute Industry is mostly concentrated in the eastern part of India, particularly West Bengal. It plays a vital role in the economy of the state. Jute Industry supports over 3,00,000 workers and over 4 million farmer families. Jute Industry is principally dependent on the orders from the government food grains procuring agencies and over the previous few years, dependence on government orders is increasing and now accounts for about 70% of installed capacity.

In the long run demand for jute product is expected to increase due to increased awareness and acceptability of environmentally sustainable products.

With increasing concern and awareness about the adverse effect of synthetic packaging material to the environment, the demand of jute goods is expected to revive in the near future. Jute products being environment friendly and biodegradable have an edge over other packing material. Increase in use of jute shopping bag, floor covering, jute geotextile products provide opportunity to boost demand of jute goods.

Jute Industry faces daunting task of competing with subsidized duty-free imports from Bangladesh. Industry is not only losing market share in overseas markets to Bangladesh, but Bangladesh is also extensively pushing jute goods into India.

Jute manufacturing is a labour-intensive process and requires huge labour force. Jute industry has traditionally been dependent on migrant labours from nearby states. Now, migration from other states has virtually dried due to availability of local jobs. Further, local people are getting alternative employment in physically less demanding jobs such as embroidery, masonry etc. Difficulty in getting worker for running the mills is resulting in lower capacity utilization, and causing further increase in cost of production per unit.

To overcome all these problems of a) loss of traditional market, b) lower availability of workers, c) subsidized import from Bangladesh, d) ever increasing raw jute prices, the Company has taken up large scale modernization of mills resulting in lower requirement of manpower thereby reducing dependence on manpower availability, reducing cost and diversifying into non-traditional product categories.

(b) PERFORMANCE:

The Companys Jute Division has reported EBIDTA for the year at Rs 3716.98 lakh against corresponding previous year at Rs 4600.74 lakh. Export for the year has increased by 8.30% from Rs 7436.23 lakh in the previous year to Rs 8053.64 lakh.

Pursuing a new line of business of manufacturing and exporting of jute shopping bags, the division has reported sale of Rs 2677 lakh in its full year of operation. It is expected that this new line of business will grow substantially.

Production & Dispatch

PARTICULARS	2022-2023	2021-2022	CHANGE %
Production of
Jute Goods (MT)	34908	30792	13.37
Dispatches of
Jute Goods (MT)
a) Domestic	30138	26206	15.00
b) Export	3916	3620	8.18

Sales

PARTICULARS	2022-2023	2021-2022
	(Rs in Lakh)	(Rs in Lakh)
Net Sales
a) Domestic	35189.84	32849.40
b) Export	8053.64	7436.23
FOB Value	7793.47	7012.52

(c) COST AND PROFITABILITY:

Input cost is increasing day by day which is affecting competitiveness. Out of total cost of jute products, raw jute accounts for around 60% and its price fluctuates from year to year. Further, jute industry is labour intensive with high wages cost per MT of production.

(d) OUTLOOK:

Due to scant monsoon till now in jute growing area, sowing of jute is poor till now and if the situation persists the jute crop yield may be affected. This may result in skyrocketing of raw jute prices.

The increase in cost of manufacturing jute bags has widened the gap between the prices of jute and synthetic bags. If this trend continues, there is strong concern that packing of many more commodities will shift to synthetic material. Loss of traditional market of jute to synthetic fabric is likely to cause a major problem of insufficient demand for the industry.

Looking to improving its performance, the Jute Division is taking various measures such as reducing dependence on Government orders, increasing presence in food-grade jute bags in various countries, developing new value-added products and designs, including new fabric for shopping bags, curtains, upholstery etc.

The Division is confident that the above efforts coupled with investments being made currently and in the past will help it to mitigate the structural risks facing the industry.

VINDHYACHAL STEEL FOUNDRY

Vindhyachal Steel Foundry produces iron & steel castings primarily for internal consumption. The total production of castings during the year has been 388 tons as against 408 tons in the previous year. The total sale of castings during the year was 484 tons (including 321 tons inter departmental transfer) as against 510 tons (including 480 tons inter departmental transfer) in the previous year.

ALLOCATION OF COAL MINE

During the year, the Government of India, Ministry of Coal had approved allocation of 1 (one) Coal Mine to the Company as under:

Name of Coal Mine	State	Geological Reserves (MT)	Grade	PRC (MTPA)	Final Price
Marki Barka	Madhya Pradesh	72.05	G8	1.00	6% of the revenue share

Once operational, the above Coal Mine is expected to provide fuel security and cost optimization to the Company.

CAPITAL EXPENDITURE

The details of various Capital Expenditure and Projects of the Company and its Material Subsidiary during the financial year 2022-2023 are as follows:

Birla Corporation Limited Project Completed: l Installation of new 1 MW Solar Power Plant at Chanderia unit. l Installation of additional 5 MW Solar Power Plant at Satna unit.

RCCPL Private Limited (Wholly Owned Material Subsidiary Company)

Projects Completed:

Mukutban Greenfield Cement Plant, Maharashtra:

Commissioning of a 3.90 million ton Greenfield Integrated Cement Plant at Mukutban (Maharashtra) with 40 MW Captive Power Plant and 10.60 MW Waste Heat Recovery System (WHRS). The unit commenced its cement production on 30th April, 2022. WHRS got commissioned in March, 2023.

Mukutban integrated unit is now fully functional and ramping up its production.

Maihar Cement Works, Madhya Pradesh:

Installation of 1000 MT Steel Silo for Water Repellent cement (Rakshak).

Installation of new packing machine and truck loading machine for more efficient cement dispatch.

Installation of AFR feeding system.

Commissioning of construction chemical plant.

Kundanganj Cement Works, Uttar Pradesh:

Installation of 2.0 MW captive Solar Power Plant.

ANNUAL RETURN

Pursuant to Section 92(3) read with Section 134(3)(a) of the Companies Act, 2013 and Rules framed thereunder, the draft Annual Return as on 31st March, 2023 is available on the Companys website at https://www.birlacorporation.com/annual-return.html.

COMPOSITION, NUMBER AND DATES OF MEETINGS OF THE BOARD AND COMMITTEES

The details of the composition, number and dates of meetings of the Board and Committees held during the financial year 2022-2023 are provided in the Report on Corporate Governance forming part of this Annual Report. The number of meetings attended by each Director during the financial year 2022-2023 are also provided in the Report on Corporate Governance. The Independent Directors of the Company held a separate meeting during the financial year 2022-2023 details of which are also provided in the Report on Corporate Governance.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to Section 134(5) of the Companies Act, 2013, the Board of Directors, to the best of their knowledge and ability, confirm that:

(a) in the preparation of the annual accounts for the year ended 31st March, 2023, the applicable accounting standards have been followed with proper explanation relating to material departures, if any;

(b) the accounting policies adopted in the preparation of the annual accounts have been applied consistently except as otherwise stated in the Notes to Financial Statements and reasonable and prudent judgments and estimates have been made so as to give a true and fair view of the state of affairs of the Company at the end of the financial year 2022-2023 and of the profit for the year ended 31st March, 2023;

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

(d) the annual accounts for the year ended 31st March, 2023, have been prepared on a going concern basis;

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

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

PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS

Details of loans, guarantees, investments and acquisition covered under the provisions of Section 186 of the Companies Act, 2013, are given in the Notes forming part of the Standalone Financial Statements.

CREDIT RATING

CRISIL has reaffirmed its ratings for Commercial Paper (CP) to the extent of Rs 300 crores as "A1+".

ICRA has also re-affirmed its rating of "AA" with stable outlook for Long Term Non-Convertible Debentures of the Company of Rs 250 crores.

Further, CARE has reaffirmed its rating on Long Term Facilities as "CARE AA" (Outlook Stable) and "CARE A1+" (Outlook Stable) for the Companys Short Term/Long Term Bank facilities aggregating to Rs 1507.48 crores. The rating Committee of CARE has reaffirmed as "CARE AA" (Outlook Stable) for the outstanding Non-Convertible Debentures of Rs 250 crores.

India Ratings and Research has reaffirmed IND AA/Stable ratings for Non-Convertible Debentures (unlisted) amounting to Rs 150 crores. During the financial year 2022-2023, Rs 30 crores was repaid towards 20% of Non-Convertible Debentures as per the repayment schedule.

India Ratings and Research has also reaffirmed IND AA/Stable ratings for Non-Convertible Debentures issued at floating rate coupon (listed) amounting to Rs 150 crores.

FINANCE

The Company efficiently manages its surplus funds by investing in debt securities, fixed deposits with banks and companies with high creditworthiness. Funds are also invested in the debt schemes of mutual funds considering safety, liquidity and returns. It monitors the borrowings on a continuous basis for opportunities to refinance or prepay its loans in order to reduce borrowing costs and foreign exchange exposure.

CORPORATE GOVERNANCE

The Board of Directors reaffirm their continued commitment to good Corporate Governance Practices as set out by the Securities and Exchange Board of India (‘SEBI). The Company has complied with the Corporate Governance Code as stipulated under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. A separate section on Report on Corporate Governance, along with certificate from the auditors confirming the compliance of conditions of Corporate Governance, is annexed and forms part of the Annual Report.

RELATED PARTY TRANSACTIONS

All transactions entered with Related Parties during the financial year 2022-2023 were on an arms length basis and in the ordinary course of business and the provisions of Section 188 of the Companies Act, 2013 are not attracted. The transactions are in compliance with the applicable provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. Further, during the year under review, there were no materially significant related party transactions which may have a potential conflict with the interest of the Company at large. Accordingly, the disclosure required under Section 134(3)(h) of the Companies Act, 2013 read with Rule 8(2) of the Companies (Accounts) Rules, 2014 in Form AOC-2 is not applicable to the Company.

All Related Party Transactions are placed before the Audit Committee for review and approval. Prior omnibus approval of the Audit Committee is obtained for the transactions which are of a foreseen and repetitive nature. The transactions entered into pursuant to the omnibus approval so granted, along with a statement giving details of all related party transactions, are placed before the Audit Committee for its review on quarterly basis.

The Company has adopted Policy on Related Party Transactions as per the requirements of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015, and the same is uploaded on the Companys website and may be accessed at the link https://www.birlacorporation.com/investors/policies/policy-on-related-party-transactions-BCL.pdf.

The details of the transactions with related parties pursuant to IND AS during financial year 2022-2023 are provided in the accompanying financial statements.

Transactions with person or entity belonging to the promoter/ promoter group which hold(s) 10% or more shareholding in the Company have been disclosed in the accompanying financial statements.p>

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

Pursuant to the provisions of the Companies Act, 2013 and Rule 8(3) of Companies (Accounts) Rules, 2014, details relating to Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo are given in "Annexure - A", which is annexed hereto and forms part of the Directors Report.

RISK MANAGEMENT

The Companys board and management are fully committed to maintain sound risk management systems to safeguard Company and shareholders interests. The board and senior management of the Company set the tone at the top for proactive and transparent identification and management of risks.

The Board of Directors has formulated a Risk Management Committee (‘RMC) to frame, implement and monitor the Risk Management Plan and Policy (‘Policy) of the Company and to ensure the adequacy of the risk management systems. The said Policy is also reviewed by the Audit Committee and approved by the Board from time to time. Robust mechanisms and systems have been put in place to identify and manage the inherent risks in business and strategy, and to monitor the Companys exposure to key risks that could impact the overall strategy and sustainability of the business. The purpose is to identify risks in time which have the potential effect on the Companys business or corporate standing or growth and manage them by calibrated action.

The major risks have been identified by the Company and its mitigation process/measures have been formulated in the areas such as raw materials and fuel, quality, market, safety, litigation, logistics, community relations, intellectual property, project execution, business continuity plan, financial, human resources, fraud, environment, information technology and statutory compliance.

AWARDS & RECOGNITIONS

The details of various awards and recognitions received by the Company during the financial year 2022-2023 are as follows:

Satna Unit received the following award/recognition:

"5S-Par Excellence award" for 5S a Continual Journey for Business Excellence.

Sagmania Limestone Mine of Satna Cement Works has received the prestigious "5 Star Rating Award in the Cement Sector", for Scientific, Efficient and Sustainable Mining practices.

CII has awarded "SR EHS Excellence Silver Award 2023" for best practices in Environment, Health & Safety.

v Chanderia Unit received the following award/recognition:

"Platinum Award" at "Apex India Green Leaf Award 2022 for Overall Sustainable Excellence" in Cement Business by Apex India Foundation.

CII-ITC Sustainability Awards 2022 "Commendation for Significant Achievement in Corporate Excellence" (Manufacturing Sector) by the Confederation of Indian Industry.

Greentech International Environment, Health & Safety Award 2023 by the Greentech Foundation, New Delhi. "Gold Award" under "Apex India CSR Excellence Award 2021" in Cement Sector by Apex India Foundation.

OCCUPATIONAL HEALTH & SAFETY

The Company recognizes that excellence in Health, Safety and Environment is an ongoing journey and remains committed to implementing best practices, complying with the national and international standards.

The Health, Safety & Well-being of the employees, subcontractors and all related personnel is paramount. The Company believes that it is critical to protect the health and safety of everyone involved in its operations and to carry out operations in environmentally sustainable manner.

To strengthen the safety culture, the Company ensures that all hazards and risks are identified, and control measures implemented to reduce risks to as low as reasonably practicable, investigate all incidents and implement corrective & preventive actions. As a part of the continuous effort to build a safe workplace, the Company has engaged a reputed safety consultancy organization to roll out all comprehensive Safety Management System with an aim of involving each and every employee of the Company whether on permanent roll or contract manpower. Structural integrity, design safety and process safety are well established in the organization.

The Company is giving importance to technological advancement, hence AI enabled cameras are placed to monitor PPEs & Housekeeping compliances at high rise structures and QR code based safety inspection of equipment is done. Reporting of observations, incidents and action tracking are being done through online platform.

Separate capex is earmarked for safety and health related assets every year and all necessary safety related equipment and disaster management infrastructure is being put in place.

To get good results in the accident prevention, the Company has included safety programs like HAZOP study, structured approach and implementation of Risk assessment & control measures, horizontal deployment of learnings from accidents of other industry/plant, Emergency planning & preparedness, incident investigation and analysis of all major and fatal accidents, recommendations/ remedial measures to prevent similar accidents. Near-miss situation/incident with no injury is accorded serious consideration for planning of preventive measures.

To inspire and energize the employees to change their behavior for better performance and safety attitude, the Company provides various training programmes related to Behavior based safety, Job specific trainings and general awareness safety trainings. Safety leadership / visible felt leadership workshops are being conducted for Corporate Heads & Unit Heads.

The Company complies with all statutory provisions as required under the Factories Act. Competent persons carry out compulsory testing/examination of lifting tools, pressure vessels, cranes etc. as per statutory requirement. Safety poster, slogans, Work SOP, Dos & Donts are widely displayed inside the Companys factories-at shop floors, canteen and plant gates to continuously remind everyone about safe working practices and environment so as to inculcate a culture of safety amongst the workers. National Safety week, Road Safety Week and Fire Service Day celebrations are organized every year with a view to create and motivate safety consciousness amongst the employees and workmen.

CORPORATE SOCIAL RESPONSIBILITY

In compliance with the provisions of the Companies Act, 2013, the Company has framed its Corporate Social Responsibility (CSR) Policy for the development of programmes and projects for the benefits of the society and the same has been approved by the CSR Committee and the Board of Directors of the Company. The CSR Policy of the Company provides a road map for its CSR activities. The purpose of CSR policy is to devise an appropriate strategy and focus its CSR initiatives and lay down the broad principles on the basis of which the Company will fulfil its CSR objectives. As per the said Policy, the

Company continues the strategy of discharging parts of its CSR responsibilities related to social services through various trusts/societies, in addition to its own initiatives and donations made to other non-government organisations. The CSR Policy has been uploaded on the Companys website and may be accessed at the link http://www.birlacorporation.com/investors/policies/csr-policy.pdf.

CSR activities, projects and programs undertaken by the Company are in accordance with Section 135 of the Companies Act, 2013 and the rules made thereunder. The Report on CSR activities and initiatives taken during the year as prescribed under Companies (Corporate Social Responsibility Policy) Rules, 2014 is given in "Annexure-B" which is annexed hereto and forms part of the Directors Report.

The Company is actively associated with various social and philanthropic activities undertaken on its own as well as by different Trusts and Societies. As a constructive partner in the communities in which it operates, the Company has been taking concrete action to realize its social responsibility objective. The Company has been playing a pro-active role in the socio economic growth and has contributed to all spheres ranging from health, education, women empowerment, rural infrastructure development, vocational training etc. In the past several decades, the Company has supported innumerable social initiatives in India, touching the lives of lakhs of people positively by supporting environmental and health care projects and social, cultural and educational programs.

The CSR activities undertaken include:

Health Care activities:

The Company provides active assistance, finance as well as managerial support, to various hospitals set up by trusts and societies.

The Company has provided financial as well as administrative support in setting up a hospital in Chittorgarh namely MP Birla Hospital and Research Centre, where the Company has two cement plants. This is a State-of-the-Art multi-specialty hospital, which has numerous diagnostic and treatment facilities.

The hospital is also the first hospital of the district with accreditation from NABH which is a seal of approval for quality care and service for any hospital. Currently, in the "In-Patient Department" approximately 135 beds are operational and best medical services are provided to patients at a nominal cost. It is the only private hospital in Chittorgarh district having 128 slice CT Scan which is well-recognized diagnostic tool to measure the level of infection.

The healthcare programme aims to contribute in SDGs (Sustainable Development Goals) to reduce the IMR (Infant Mortality Rate) & MMR (Maternal Mortality Rate) in community. The Company focuses on strengthening the villages Anganwadi centers and develop it as a Model. Different extension activities like capacity building of mothers, staffs, family counselling are organized in centers. The Company also promotes adolescent health by educating the girls in villages. Kitchen garden and nutritional food are promoted in villages. Regular health check-up, weight check-up, immunization programmes are organized in villages. Formation and mobilization of community based organization, strengthening the village health committee are carried out in these programmes.

The Company has also provided various health care facilities like free medical check-up, free medicines and treatments for needy people. It has organized medical check up camps, free eye camps, specialty health camps and done cataract surgeries of patients in rural areas.

Educational Initiatives:

The educational programme aims to enhance the quality of education by strengthening the school infrastructure, organizing capacity building of teachers & co-curricular activities for students etc. Class room refurbishment, furniture support, setting up lab & libraries are some of the infrastructure activities which are undertaken. For the safety and better hygiene of the students, toilets are renovated/constructed for students. Drinking water facilities are set up in schools. The Company also promotes technology in pedagogy for better learning among students by installing smart board in schools. Teachers training programme, parent teachers meeting and support Teachers Learning Materials (TLM) are organised in schools. Different co-curricular activities like exhibition, celebration of days, sports & yoga activities are organised for students in schools. Scholarships are provided to the meritorious underprivileged children for their higher education. Supplementary learning centers are running in villages to enhance the quality of education. The Companys Durgapur unit is running a free primary school for the under privileged students. Under employee volunteering programme, safety awareness sessions are organized in schools.

Livelihood & Women Empowerment:

The Company aims to enhance and ensure the income of villagers by organizing different livelihood interventions in villages. Livelihood mainly focused on farm & non-farm based livelihood activities. In the farm based intervention, the major initiative is to reduce the input cost of farmers and increase the margin of income. It promotes different improved agriculture practices like, soil health, selection and treatment of seeds, application of fertilizers and pesticides, usage of mechanized farming, promoting organic practices and formation of farmers group in villages. Crop diversification are organised to enhance the income of the farmers. Horticulture plantation are promoted in the uncultivated land for additional income of farmers. Improved Animal husbandry practices, like breed development, vaccination, deworming, green fodder, construction of mangers are promoted in villages. In Satna, farmers benefitted from breed development programme. Watershed activities are organised in villages. It helps in conserve the top soil, ground water recharge and irrigation of more land.

In the non-farm based livelihood programme, Self Help Group (SHG)

development, group based enterprise activities are promoted in villages. The Company supports the distress families to start their own micro enterprise by providing start up support, family counselling and market exposure. Regular follow up are done with these enterprise activities.

Vocational Training Programme:

Skill based training programmes are organised to upgrade the skill of the unemployed youth and make them employable in villages. Mobilization, training, counselling and placement are the major activities of vocational training programme. For girls, bed side patients attendance, beautician, sewing & stitching training are organized in villages. For boys, mobile repairing, assistant electrician, civil supervisor courses are provided in villages. The Company is also running coaching classes for the students to join different government services. Both class room and physical training are organized for students. Start up support and after training placement are conducted for students.

Rural Infrastructure development initiatives:

In this initiative, the Company focuses on strengthening the drinking water facilities, connectivity of villages, drainage system and community infrastructure in communities. Digging of new bore well, de silting the water bodies, laying water pipe line, repairing of drain, building of all-weather road and refurbishment of community infrastructure are organized in the plants neighborhood villages under this programme.

The Company promotes non-conventional energy in communities. Solar panel are installed in villages to light up the street light in villages. Bio gas units are set up in villages for clean energy. Plantation activities in the barren land field bund are organised. In Watershed activities, the Company conserve the top soil and maintain the moisture on it. It also helps in ground water recharge and support the farmers in more irrigation.

ENVIRONMENTAL SUSTAINABILITY

The Company is well aware of its responsibility towards sustainable development and environment. Various initiatives are taken for addressing climate change challenges particularly CO₂ reduction and pollution prevention. Extensive plantation has been done in the factories and mining areas. The Company is focused towards conservation of water by putting special efforts for rain water harvesting, conservation of water resources (like using Air Cooled Condenser instead of water cooled in Captive Power Plants and reusing treated waste water for dust suppression and plantation in sustainable way.

Emissions from the Stacks are well within regulatory limits, monitored through online continuous emission monitoring systems. Concerns for environment and sustainable development are integral to the Companys business decisions. SO & NO gas

2 X

analyzer in kiln stack has been installed for close monitoring. To control NOx, SNCR system has been installed in both Satna and Chanderia Plants. Measures are also taken for conservation of limestone reserves by optimizing (like blending high grade with low grade limestone) limestone consumption. Water tankers, pumps, rain guns and water spray system have been provided for pressurized spraying to control dust pollution around mining areas and connecting roads. Proper utilization of waste water is being done by using treated water from Water Treatment Plant (WTP) for dust suppression and plantation. The Company continuously strives for reduction of carbon footprint and Green House Gases emission by using best energy efficient & environment friendly technologies to improve power & thermal efficiency of the plants.

For conservation of water, water harvesting is done in mined out areas. Same water is used for plant and domestic usage. Also roof water harvesting and water recharge system is installed within the plant to reach the goal of Water Positive.

The Company has Alternative Fuel and Raw Material Feeding System (AFRS) for higher use of alternative fuel on continuous basis at its clinker manufacturing units, thus reducing consumption of natural resource like Coal. This move ensures availability of alternative fuel throughout the year and has resulted in reduction of fuel costs and also helped in reducing the carbon footprint. Company is extending its AFR facility to consume any of the available hazardous waste from other industry. Municipal waste whenever made available is also being co-processed in the Kiln. Company has invested to install set up for handling and feeding of alternative fuel in various units.

The Waste Heat Recovery System at Satna and Chanderia plants of the Company uses the hot gases coming out of the pre-heater and clinker cooler to generate substantial power, thereby reducing Green House Gases (GHG) emissions. Grinding aid is introduced in all the units to improve consumption of fly ash and slag. Further, to protect the environment, the Company has consumed substantial quantity of fly ash during the financial year 2022-2023 at various cement plants. The Company has own slag granulation unit at Durgapur to consume optimum quantity of slag in ecofriendly manner. This has resulted in reduction of clinker usage, which in turn reduced GHG emissions at plants, without compromising on the quality and the strength of cement. Company is exploring use of Phospho Gypsum/Chemical Gypsum which leads to conservation of mineral Gypsum and environment.

With a view to promote renewable energy and also to produce energy through cleaner and greener sources, the Company has installed Solar Power Plants at its Integrated Cement Plants. Also, it is sourcing solar power for Raebareli Plant in group captive mode in long term PPA.

Green energy initiative has also been taken in RCCPL Private Limited, wholly owned material subsidiary of the Company. Waste Heat Recovery System and Solar Power Plant has been installed in Maihar, Mukutban and Kundanganj Unit in own captive mode. Additional Solar Power Plant has been installed in group captive mode for Kundanganj Unit in long term PPA. Maihar Plant is sourcing Fly Ash through BTAP rail wagon which is most sustainable mode of transportation.

BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT

In accordance with Regulation 34(2)(f) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, Business Responsibility and Sustainability Report ("BRSR") covering disclosures on Companys performance on ESG (Environment, Social and Governance) parameters for FY 2022-2023 forms an integral part of this Annual Report.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

Retirement by Rotation:

Shri Dilip Ganesh Karnik (DIN: 06419513), Director of the Company, retires by rotation at the ensuing Annual General Meeting and being eligible offers himself for reappointment.

Appointment/Change in designation/Cessation:

Shri Brij Behari Tandon (DIN: 00740511) has resigned from the position of Non-Executive Independent Director of the Company with effect from 11th May, 2022.

Shri Arvind Pathak (DIN: 00585588) ceased to be the Managing Director & Chief Executive Officer (Key Managerial Personnel) of the Company with effect from the close of business hours on 31st December, 2022 due to resignation.

Shri Sandip Ghose (DIN: 08526143) was appointed as Additional Director and simultaneously the Wholetime Director of the Company for the period from 1st December, 2022 to 31st December, 2022. Further, he was elevated as Managing Director & Chief Executive Officer (Key Managerial Personnel) of the Company for a period of 3 (three) years with effect from 1st January, 2023.

Approval of the members by way of Ordinary Resolutions had been obtained on 14th January, 2023 (vide Postal Ballot Notice dated 5th December, 2022) for appointment of Shri Sandip Ghose (DIN: 08526143) as Wholetime Director of the Company for the period from 1st December, 2022 to 31st December, 2022 and Managing Director & Chief Executive Officer (Key Managerial Personnel) of the Company for a period of 3 years (three) with effect from 1st January, 2023.

In terms of Section 203 of the Companies Act, 2013, the following are the Key Managerial Personnel (KMP) of the Company as on 31st March, 2023:

1. Shri Sandip Ghose: Managing Director & Chief Executive Officer.

2. Shri Aditya Saraogi: Chief Financial Officer.

3. Shri Manoj Kumar Mehta: Company Secretary & Legal Head.

DECLARATION BY INDEPENDENT DIRECTORS

The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed both under the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended.

Further, declaration has been received from all the Independent Directors confirming compliance with Rule 6(3) of the Companies (Appointment and Qualification of Directors) Rules, 2014, as amended, regarding the requirement relating to enrollment in the Data Bank maintained with the Indian Institute of Corporate Affairs (‘IICA). In terms of the amended Section 150 of the Companies Act, 2013 read with Rule 6(4) of the Companies (Appointment & Qualification of Directors) Rules, 2014, the Independent Director(s) of the Company are exempt from the requirement to undertake the online proficiency self-assessment test conducted by IICA.

COMPANYS POLICY ON DIRECTORS APPOINTMENT AND

REMUNERATION

In terms of Section 178(3) of the Companies Act, 2013 and Regulation 19 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board of Directors of the Company, based on the recommendation of the Nomination and Remuneration Committee, had formulated a Nomination and Remuneration Policy.

The Nomination and Remuneration Policy of the Company, inter alia, includes the aims and objectives, principles of remuneration, fixed and variable components in the remuneration package, guidelines for remuneration to Executive Directors and Non-Executive Directors, criteria for identification of the Board Members and appointment of Senior Management.

The criteria for identification of the Board Members, including those for determining qualification, positive attributes, independence etc. is summarily given hereunder:

• A Director should possess high level of personal and professional ethics, integrity and values. He/she should be able to balance the legitimate interest and concerns of all the Companys stakeholders in arriving at decisions, rather than advancing the interests of a particular constituency.

• A Director must be willing to devote sufficient time and energy in carrying out his/her duties and responsibilities effectively.

He/she must have the aptitude to critically evaluate managements working as part of a team in an environment of collegiality and trust.

• For every appointment of an Independent Director, the Committee shall evaluate the skills, knowledge, expertise and experience on the Board and on the basis of such evaluation, prepare a description of the role and capabilities required of an Independent Director. The person recommended for such role shall meet the description.

• In evaluating the suitability of individual Board members, the Committee takes into account many factors, including general understanding of the Companys business dynamics, global business, social perspective, educational and professional background and personal achievements. Factors like eligibility criteria, independence, term and tenure of a Director should be in accordance with the provisions of the Act and the Listing Regulations for the time being in force.

• The Committee evaluates each individual with the objective of having a group that best enables the success of the Companys business and achieve its objectives in a sustainable manner.

The Nomination and Remuneration policy as approved by the Board is uploaded on the Companys website and may be accessed at the link https://www.birlacorporation.com/investors/nomination-and-remuneration-policy.pdf

Neither the Managing Director nor the Wholetime Director of the Company received any remuneration or commission from any of its subsidiaries.

ANNUAL EVALUATION OF THE BOARD, ITS COMMITTEES AND INDIVIDUAL DIRECTORS

The Nomination and Remuneration Committee pursuant to the powers delegated to it by the Board, has carried out an annual evaluation of the performance of the Board, the Directors individually as well as the evaluation of the functioning of various Committees based on the criteria for performance evaluation forming part of the Performance Evaluation Policy of the Company.

For the purpose of proper evaluation, the Directors of the Company have been divided into 3 (three) categories i.e. Independent Directors; Non-Independent Chairman and Non-Independent Non-Executive Directors; and Executive Directors.

The criteria for evaluation include factors such as engagement, strategic planning, vision and direction for growth and development, team spirit and consensus building, effective leadership, domain knowledge, ensuring best practices in governance, financial management and operations, contributions towards achieving short term and long term goals of the Company and roadmap for achieving them, management qualities, team work abilities, result/achievements, understanding and awareness, leadership qualities, motivation/commitment/diligence, integrity/ethics/values and openness/ receptivity.

The Independent Directors of the Company in its separate meeting held during the year reviewed the performance of Non-Independent Directors and Board as a Whole and Chairman of the Company taking into account the views of Executive Directors and Non-Executive Directors.

Further, the performance evaluation of Independent Directors of the Company was done by the entire Board, excluding the Independent Director being evaluated.

SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES

As on 31st March, 2023, the Company has 7 (Seven) subsidiary companies namely, RCCPL Private Limited, Lok Cement Limited, Talavadi Cements Limited, Birla Jute Supply Company Limited, Budge Budge Floorcoverings Limited, Birla Cement (Assam) Limited and M.P.

Birla Group Services Private Limited and 2 (Two) step down wholly owned subsidiary companies namely, AAA Resources Private Limited and Utility Infrastructure & Works Private Limited.

2 (Two) subsidiary companies, namely Thiruvaiyaru Industries Limited and Birla Corporation Cement Manufacturing PLC, Ethiopia, are under the process of voluntary winding up. In view of the aforesaid, these subsidiaries have not been considered in preparing the Consolidated Financial Statements.

During the year the performance of RCCPL Private Limited, wholly owned material subsidiary of the Company has also impacted due to higher fuel cost and stabilization of its new plant at Mukutban.

During the year, no Company has become or ceased to be the

Companys Subsidiaries, Joint Venture or Associate Company.

The "Policy on ‘Material Subsidiary" is available on the Companys website and may be accessed at the link https://www. birlacorporation.com/investors/policies/policy-on-material-subsidiary.pdf.

Pursuant to Section 129(3) of the Companies Act, 2013 read with Rule 5 of the Companies (Accounts) Rules, 2014, a statement containing salient features of the financial statements of Subsidiaries/ Associate Companies/Joint Ventures in Form AOC-1 forms part of the consolidated financial statement and hence not repeated here for the sake of brevity. Further, pursuant to the provisions of Section 136 of the Companies Act, 2013, the Annual Financial Statements of each of the Subsidiaries are available on the Companys website at www.birlacorporation.com.

DEPOSITS

During the year the Company has not accepted any deposits from the public falling within the ambit of Section 73 of the Companies Act, 2013 and the Rules framed thereunder.

DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS, COURTS AND TRIBUNALS

No significant and material order has been passed by the regulators, courts, tribunals impacting the going concern status and Companys operations in future.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has in place adequate internal control systems and procedures which are commensurate with its size and nature of business. The objective of these procedures are to ensure efficient use and protection of the Companys resources, accuracy in financial reporting and due compliance with statutes, corporate policies and procedures.

Internal Audit is conducted periodically across all locations by Chartered Accountant/ Audit firms who verify and report on the efficiency and effectiveness of internal controls. The adequacy of internal control systems are reviewed by the Audit Committee of

the Board periodically.

INTERNAL FINANCIAL CONTROL SYSTEM

The Company has a robust and comprehensive Internal Financial Control system commensurate with the size, scale and complexity of its operations. The system encompasses the major processes to ensure reliability of financial reporting, compliance with policies, procedures, laws and regulations, safeguarding of assets and economical and efficient use of resources.

The controls were tested during the year and no reportable material

weaknesses either in their design or operations were observed.

The policies and procedures adopted by the Company ensures orderly and efficient conduct of its business and adherence to the Companys policies, prevention and detection of frauds and errors, accuracy in the record-keeping and timely preparation of reliable financial information.

The Internal Auditors continuously monitor the efficacy of Internal Financial Control System with the objective of providing to the Audit Committee and the Board of Directors an independent, objective and reasonable assurance on the adequacy and effectiveness of the organizations risk management measures with regard to the Internal Financial Control System.

The Audit Committee has satisfied itself on the adequacy and effectiveness of the Internal Financial Control System laid down by the management. The Statutory Auditors in its report have expressed an unmodified opinion on the adequacy and operating effectiveness of the Internal Financial Control System over financial reporting.

VIGIL MECHANISM/WHISTLE BLOWER POLICY

The Company has adopted a Vigil Mechanism/Whistle Blower Policy for Directors and employees to report concerns about unethical behaviour, actual or suspected fraud or violation of the Companys Code of Conduct or ethics policy, if any. The Policy also provides for the requisite checks, balances and safeguards to ensure no employee is victimized who avail of the mechanism and also provides for direct access to the Chairman of the Audit Committee. The Policy also provides mechanism for reporting of instances of leak or suspected leak of Unpublished Price Sensitive Information in terms of Regulation 9A of the SEBI (Prohibition of Insider Trading) Regulations, 2015. The Vigil Mechanism/Whistle Blower Policy has also been uploaded on the website of the Company.

DETAILS RELATING TO REMUNERATION OF DIRECTORS, KEY MANAGERIAL PERSONNEL AND EMPLOYEES

Disclosure pertaining to remuneration and other details as required under Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of

Managerial Personnel) Rules, 2014 is given in "Annexure C" which is annexed hereto and forms part of the Directors Report.

In terms of the provisions of Section 197(12) of the Companies Act, 2013 and Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement comprising the names of top 10 (ten) employees in terms of remuneration drawn and every person employed throughout the year, who were in receipt of remuneration exceeding the prescribed limit, forms part of the Directors Report.

The above Annexure is not being sent along with this Annual Report to the Members of the Company. Members who are interested in obtaining these particulars may write to the Company Secretary at the Registered Office/Corporate Office of the Company. In terms of the provision of Section 136 of the Companies Act, 2013, the aforesaid Annexure is also available for inspection by Members at the Registered Office/ Corporate Office of the Company 21 days before and up to the date of the ensuing Annual General Meeting during the business hours on working days.

COMMISSION TO NON-EXECUTIVE DIRECTORS

The Board of Directors of the Company approved payment of a sum of Rs 10 Lakhs each as commission to all the Non-Executive Directors of the Company for the financial year 2022-2023. However, Shri Harsh V. Lodha, Non-Executive Chairman of the Company has decided not to accept any commission and has foregone his right for the financial year 2022-2023 also, in view of uncertain economic scenario and unprecedented increase in fuel prices & impact of the same on the profitability of the Company.

HUMAN RESOURCES AND INDUSTRIAL RELATIONS

Employees are the core strength of the Company. The Company continues to focus on creating the right workplace environment that provides opportunities for employees to improve their performance. Robust and up to date Human Resource (HR) Policies are in place for proper evaluation of performances, which is the key to building future leaders.

HR functions in the organization have witnessed a paradigm shift and evolved to bring together modern day practices with proper use of technology and automation. This had a profound impact on the morale and motivation of the employees who are the prime-movers. The Company has succeeded in fostering a relationship with its employees which will help transform the organization.

There is a well-calibrated mechanism to reward meritocracy. Learning and development initiatives for employees are geared to enable all-round performance, both as individuals and as teams.

There is a continuous effort to improve HR service delivery in order to better serve the customers with simple well executed processes with proper use of technology.

Encouraging cordial working relation and maintaining good industrial relations have been the philosophy and endeavour of the HR Department. Industrial relations remained harmonious at all the offices and establishments of the Company throughout the year. Statutory compliances related to labour laws have been followed with due emphasis.

Suspension of Operation continues at Soorah Jute Mills, Birlapur and Birla Vinoleum, Birlapur.

PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT THE WORKPLACE

In order to provide women employees with a safe working environment at workplace and also in compliance with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and Rules framed thereunder, the Company has formulated a Policy on Prevention of Sexual Harassment of Women at the Workplace. The said Policy has been uploaded on the internal portal of the Company for information of all employees.

The Company has complied with the provisions relating to constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. The Internal Complaints Committee comprises of three employees and one outside member. One of the Senior female employee of the Company is the Presiding Officer of the said Committee.

No complaint pertaining to sexual harassment of women employees from any of the Companys locations was received during the financial year ended 31st March, 2023 and no cases are pending to be disposed during the financial year ended 31st March, 2023.

AUDITORS & AUDITORS REPORT

Statutory Auditors:

M/s. V. Sankar Aiyar & Co., Chartered Accountants were reappointed by the members of the Company at the 102nd Annual General Meeting held on 27th September, 2022, as the Statutory Auditors of the Company for the second term of 5 (Five) consecutive years to hold office from the conclusion of the 102nd Annual General Meeting till the conclusion of the 107th Annual General Meeting of the Company to be held in the year 2027.

The Auditors Report and notes to the financial statements are self-explanatory and therefore do not call for any further comments/explanation.

Cost Records and Cost Auditors:

The Company is required to maintain cost records as specified by the Central Government under Section 148(1) of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Rules, 2014 and accordingly, such accounts and records are made and maintained by the Company.

The Board of Directors based on the recommendation of the Audit Committee has appointed M/s. Shome & Banerjee, (Firm Registration No. 000001), Cost Accountants, as the Cost Auditors of the Company for the financial year 2023-2024 for auditing the cost records relating to cement, jute goods and steel products manufactured by the Company.

As required under Section 148(3) of the Companies Act, 2013, the remuneration payable to the Cost Auditors, as approved by the Board, is required to be placed before the Members in a general meeting for their ratification and the same forms part of the Notice of the ensuing Annual General Meeting.

M/s. Shome & Banerjee has confirmed that they are free from any disqualifications specified under Section 141(3) and proviso to Section 148(3) read with Section 141(4) and all other applicable provisions of the Companies Act, 2013 and their appointment meets the requirements of Section 141(3)(g) of the Companies Act, 2013. They have further confirmed their independent status and arms length relationship with the Company.

The Company submits its Cost Audit Report with the Ministry of

Corporate Affairs within the stipulated time period.

Secretarial Auditors:

The Board of Directors on the recommendation of the Audit Committee had appointed M/s. Mamta Binani & Associates, Company Secretaries, to conduct secretarial audit of the Company for the financial year 2022-2023. The Secretarial Audit Report for the financial year ended 31st March, 2023 is given in "Annexure - D" which is annexed hereto and forms part of Directors Report. The Report is self-explanatory and do not call for any comments.

Further, the Board on the recommendation of the Audit Committee has appointed M/s. Mamta Binani & Associates, Company Secretaries, to conduct secretarial audit of the Company for the financial year 2023-2024.

Pursuant to the provisions of Regulation 24A of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Secretarial Audit Report submitted by the Secretarial Auditor of RCCPL Private Limited, a material subsidiary of the Company in terms of Regulation 16(1)(c) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 has been given in "Annexure - E" which is annexed hereto and forms part of Directors Report.

There are no audit qualifications, adverse remarks or disclaimer in the respective reports of the Statutory Auditors and Secretarial Auditors for the year under review.

None of the Auditors of the Company has reported any fraud as specified under Section 143(12) of the Companies Act, 2013.

APPLICATION UNDER THE INSOLVENCY AND BANKRUPTCY CODE

No application has been made under the Insolvency and Bankruptcy Code, hence the requirement to disclose the details of application 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 is not applicable.

DIFFERENCE IN VALUATION

There was no instance of one-time settlement with banks or financial institutions and hence the differences in valuation as enumerated under Rule 8 (5) (xii) of Companies (Accounts) Rules, 2014, as amended, do not arise.

COMPLIANCE WITH SECRETARIAL STANDARDS

During the financial year, the Company has complied with applicable Secretarial Standards issued by the Institute of Company Secretaries of India, i.e. SS-1 and SS-2 relating to Meetings of the Board of Directors and General Meetings, respectively.

CAUTIONARY STATEMENT

Statements in this Report, particularly those which relate to Management Discussion & Analysis, describing the Companys objectives, projections, estimates, expectations or predictions may be ‘forward looking statements within the meaning of applicable laws or regulations. Actual results could however differ materially from those expressed or implied. Important factors that could make a difference to the Companys operations include global and domestic demand-supply conditions, finished goods prices, raw materials and fuels cost & availability, transportation costs, changes in Government regulations and tax structure, economic developments within India and in the countries with which the Company has business contacts and other factors such as litigation and industrial relations.

APPRECIATION

The Directors would like to express their sincere appreciation for the assistance and co-operation received by the Company from the Government of India, State Governments, Financial Institutions, Banks, Dealers, Customers, Vendors and Stakeholders.

Inspired by a vision, driven by values and powered by internal vitality, the Directors look forward to the future with confidence and stand committed to creating an even brighter future for all stakeholders.

	For and on behalf of the Board of Directors
	Harsh V. Lodha	Sandip Ghose
	Chairman	Managing Director &
	(DIN: 00394094)	Chief Executive Officer
		(DIN: 08526143)
Place: Kolkata
Dated, the 9th May, 2023