orient cement Management discussions

road logistics. This also reduces Scope 3 CO2

road logistics and helps to overcome vehicular emissions and traffic challenges.

During the year, the Company initiated the shipment of bulk cement through railway rakes. Rail is a greener mode of transport and therefore this initiative will help in protecting the environment and by also reducing the use of plastic for cement packaging bags.

Procurement

Orient Cement has made significant strides in digital transformation and procurement optimisation by implementing a range of technologies and initiatives that have streamlined operations and improved efficiencies. The Company adopted ‘Procure Engine, an IT-based platform, during the year 2021-22, to streamline its procurement process. The Company put enormous efforts into capacity-building programmes for the successful induction of various stakeholders in its supply chain. This helped the Company track orders, invoices and payments in real time and made the operations more transparent and efficient by reducing time and cost. Also, it led to better decision-making, eliminated paperwork and built strong relations with all stakeholders.

Sustainability

The Company recognises its responsibility towards our planet and people. It aspires to achieve the following targets by the year 2030:

• 25% Thermal Substitution Rate (TSR) (substitution of fossil fuels by alternative ones)

• 50% of the total energy to come from renewable energy and Waste Heat Recovery Systems (WHRS)

• emissions, ^{Achieved 40% reduction in Scope 1 and 2 CO}2 with the base year 2020-21. For this, the Company strives to enhance its sustainability performance in various areas, which are discussed in detail in the following section:

Environment

Orient Cement is a member of the Global Cement and Concrete Association (GCCA), which helps in monitoring the global ^CO2 reduction/abatement progress. The Company aggressively pursues ^{various CO}2 ^{reduction measures, as indicated below:}

logistics CO2 ^{footprint by migrating towards bulk transportation} and improving fleet efficiency.

These efforts have helped the Company to achieve specified net ^CO2 ^{emissions of 601 kg CO}2^{/T of cementitious material (as per the} protocol sheet) and 14.3% of its energy needs through ^{GCCA CO}2

renewable energy.

Water: Orient Cement is mindful of the water scarcity in the country and is tirelessly working towards achieving ‘water security. Some of the notable initiatives in this area are as follows:

• Reducing specific water consumption through process efficiency

• Adherence to ‘zero liquid discharge

• Enhanced utilisation of recycled water from sewage treatment plant and waste treatment plant

• Water harvesting in mined-out pits

• Water harvesting initiatives in the nearby communities.

All these initiatives helped the Company achieve a specific water consumption of 264 litres/tonne of cementitious material and harvest 34.6 lakh m3 of water in the mined-out pits.

Biodiversity: The Company is conscious of its impact on biodiversity due to its mining operations. Therefore, in coordination with the local forest officials, Orient Cement takes up mass plantation activity across its locations by planting native and multi culture species. The Company achieved a >90% survival rate in its plantation drive. These initiatives have resulted in the planting of approximately 11,000 species during FY23.

Certifications: All the plants of the Company are certified by the ‘Integrated Management System, covering the following areas:

• ISO 9001- Quality Management System

• ISO 14001 – Environment Management System

• ISO 450001 - Occupational Health and Safety Management System

• ISO 50001 – Energy Management System

• ISO 27001 – Information Security Management System (ISMS)

Waste Heat Recovery System project at Chittapur

Your Company is carrying out the commissioning of a 10.1 MW Waste Heat Recovery System (WHRS) at its Chittapur Integrated Cement Plant to utilise the waste heat available in the pyro section. The project is expected to be commissioned by the end of May 2023 and is expected to generate 55.6 million units of electrical energy and contributing to 35% of the total energy requirement of the plant. This will also help in meeting 53% of plant energy requirements through renewable energy.

Circular economy

The Company is committed to the concept of circularity and is cognisant of its role in reducing its environmental footprint, as well as its contribution to achieving ‘Energy Security. To this end, the Company is enhancing its co-processing and pre-processing facilities at the Devapur and Chittapur plants to co-process various waste materials, such as plastic waste, Refuse-derived fuel (RDF) / Municipal Solid Waste (MSW), paper cups, cow dung, cloth waste and so on. During FY23, the Company co-processed various waste materials, which helped achieve the following benefits:

• Consumed 72,591 tonnes of waste material - Alternative Fuels (AF)

• Achieved 13.2% of AF Substitution Rate (AFR) replacing conserving 55,900 tonnes of fossil fuel, i.e., coal

• The Company became 1.14 times plastic-positive by co-processing plastic waste from other industries and Municipal Solid Waste (MSW)

At the Companys integrated plant at Devapur, subgrade limestone is being utilised in the raw material mix, which has resulted in significant resource conservation. The Companys dedication to sustainable practices and resource conservation is an integral part of its overall business strategy.

Health and safety

In recent months, the Company has conducted mandatory safety training for all employees, covering topics such as electrical safety, road safety, railway safety and behaviour-based safety. It has introduced monthly safety themes to raise awareness and reinforce safe work practices among its workforce. The team also successfully refurbished, tested and commissioned the high-velocity water spray system for transformer fire protection in Power Distribution Transformers (PDTs) 4, 5 and 6.

In collaboration with ITC Ltd., the Company has conducted an awareness session on the ‘zero waste aspiration at the GP Birla Centre for its Hyderabad office team, housekeeping staff and GP Birla Centre employees. This initiative was supported under ITCs ‘Well-being Out of Waste (WOW) programme. Further, the Company also installed a plastic shredding machine to shred plastic waste on premises.

As the Company continues to grow, it remains focused on enhancing its safety culture, minimising its environmental impact and promoting responsible practices across its operations. It seeks to retain its position as a leader in health and safety by collaborating with all stakeholders, while also shaping a sustainable future for all.

Zero fatality

The Companys continued efforts resulted in achieving a remarkable record of ‘zero fatality for the last five years across its operations (employees, workmen and contract workmen). Its a testimony to the organisations commitment to ensuring the safety of its stakeholders.

Human resource 73

Great Manager Institute-certified managers

Talent management

85% of mid to senior leadership positions filled leveraging internally developed talent pool.

The Company prioritises internal talent development and promotions for building a committed and productive workforce. The Companys approach to achieving its talent management goals involves implementing a structured programme for managing talent, utilising internal recruitment for leadership positions and fostering transparent communication about career aspirations. In FY23, the Company made significant talent management transitions up to the level of President–Manufacturing, Plant Heads, HODs, Head – Key Accounts, and zonal managers, among others, from its internal talent pool.

Over 85% of positions from zonal managers to President level are filled with internal talent, minimising lateral recruitment at mid to senior leadership positions.

Learning and development (L&D)

Nearly 31,000 man-hours invested in training and development.

The Company invests in the development and growth of its talent pool, retaining its reputation as a ‘learning organisation. It implements training programmes aligned with its key performance indicators (KPIs) and also with the growth of its people. It strengthens the second line of each functional area, developing potential successors to ensure business continuity and creating a capable and future-ready talent pool. The Company has targeted learning initiatives to enhance technical, functional and managerial capabilities for all team members.

Mastering social intelligence

154 customer facing team members trained for Social Intelligence.

Recognising that social intelligence is a crucial skill for customer-facing roles in competitive markets, the Company has organised two-day workshops on ‘Mastering Social Intelligence for its sales team. The workshop was designed with inputs from the sales leadership team and other team members and covered 154 sales team members in six batches.

Technical Utkrishthata

It is a special initiative for building technical capabilities for shop floor team members from all major technical areas, viz., electrical, mechanical, instrumentation and process. The core objective of this initiative is to enrich the technical skills of team members by upskilling, reskilling and multiskilling them, thus enriching a well-trained technical pool across plants. This was conducted in collaboration with OEMs and covered 115 members of the technical team in 2 specific programmes.

Skill Soft e-learning platform

To upskill personnel in areas such as business, digital dexterity and project management among others, the Company has adopted a soft skill e-learning platform. Through a nomination procedure, 400 selected members were granted access, and participation is at 86%, with an average access rate of 77% per learner.

Theatre-based technique — Communication skills

The Company has conducted a 2-day theatre-based workshop for customer-facing roles in Technical Services to improve communication skills. The workshop significantly enhanced their verbal and non-verbal communication skills.

Prayas 2.0 – Cross-functional knowledge sharing

Prayas is a platform that encourages cross-functional learning within SCM and other cross-functional teams. Sessions are held fortnightly, with topics chosen by the presenter. These seminars cover both technical and non-technical topics. 130 members from SCM and other cross-functional teams participated in these sessions during the year.

Prevention of Sexual Harassment (POSH)

Since 2014, your Company has had a POSH committee at the corporate office and at all plant locations to address any concerns voiced by team members. To ensure compliance with the POSH policy, all team members are required to attend e-learning sessions annually. This session is accessible through the Companys internal portal, called ‘Sahayog. Additionally, special awareness-building sessions are conducted yearly for the internal committee members to keep them informed about the latest developments.

Employee engagement

Certified Great Place to Work once again; oined top 50 Manufacturing Organisations.

In 2022-23, life gradually returned to normalcy after the pandemic-induced lockdown. However, as the health and wellness of team members and their families continued to be the Companys priority, it continued the weekly health posts. Health talks were conducted on a monthly basis. Medical and blood donation camps were conducted at all major locations.

Regular connections with the MD and CEO along with leaders in Townhalls (virtual and in person), is a great opportunity for all team members to interact with the top leadership of the company. During FY23, 4 Townhalls were conducted. Besides, on the Companys internal communication platform, Workplace@Facebook, its MD and CEO had live sessions, shared various business updates, aligned everyone with the direction and goals and encouraged team members towards risk-taking, innovation, sustainability and adoption of digital tools and methods.

‘People Connect, is a listening platform to understand team perspectives and seek feedback to develop ideas that make the workplace more progressive. Over 54 ‘People Connect sessions were conducted this year.

‘Coffee with Leaders is a freewheeling and candid discussion in which the leaders get to know the team members personally, learn about their professional aspirations and resolve their challenges. In FY23, 10 ‘Coffee with Leaders sessions were organised, in which 98 team members participated.

In the New Hands Meet, the Leadership team along with the HR representatives met the new hires one month after their joining. Through this interaction, new members got an opportunity to learn about the organisation, its values and inspiring stories from the leaders.

Team members and their families were experiencing fatigue from prolonged virtual interactions and were eagerly expecting to resume physical interactions and social gatherings. Their spirits were high and they enthusiastically participated in celebrations held at the Companys plant locations to mark various events, such as Holi, Independence Day, Ganesh Chaturthi, Navratri, Diwali and New Years Eve.

Deserving Company employees are recognised as ‘Stars of the Month for their outstanding performance every month. They receive certificates, badges and gift vouchers. Applause is another programme to applaud the team members for their achievements. Such appreciation motivates the members to excel, which enhances overall productivity.

As a result of these initiatives, the Company was certified as a ‘Great Place To Work once again and it also featured in the Top 50 Manufacturing organisations.

Human rights

Orient Cement is committed to respecting human rights of its workforce, communities and those affected by its operations. The Company has implemented policies and practices to identify, assess and minimise potential violations and resolve grievances effectively. It aligns with internationally recognised frameworks and creates awareness for contractors and suppliers to ensure their compliance.

Risk management

Orient Cement Limited operates in a dynamic business environment. The Companys ability to create sustainable value for its stakeholders depends on identifying, tracking and effectively addressing key risks within its operating environment.

The Company has a resilient risk management policy that has been approved by the Board. The policy outlines the aims and principles of risk management, as well as an overview of the risk management process, procedures and associated responsibilities of committee members. The Risk Management Committee and the Audit Committee supervise the implementation of the Risk Management Framework. An illustration of the Risk Management Framework is depicted below.

The Governance Risk and Compliance Committee (GRCC) comprises the executive management that oversees the effective roll-out of the risk management programme. The Internal Audit (IA) team is responsible for reviewing and providing independent assurance on the effectiveness of defined risk mitigation strategies. On a half-yearly basis, a formal report on ‘Risks that Matter is reviewed by the GRCC, submitted to the Risk Management and Audit Committees of the Board for their review and guidance and subsequently presented to the Board.

CSR initiatives

The Company is endeavouring to build stronger communities through its CSR initiatives. In FY23, it undertook various projects for the well-being of its communities. The projects involved promoting education and healthcare, including preventive healthcare, sanitation, the eradication of hunger, poverty and malnutrition among other projects for driving rural development.

Providing holistic learning experiences

The change of school management at our Devapur School, effective September 14, 2022, is a significant move towards enhancing the schools educational quality. Also, it is working to shift the affiliation from the State Board to the CBSE Board, which would enhance the quality of education and increase mobility for its students. This is a strategic decision that reflects the Companys commitment to providing students with a holistic learning experience that equips them with the necessary skills and knowledge to succeed in their future endeavours.

The transition is expected to take place within the next 2-3 years, providing ample time for the school management to prepare and ensure a smooth transition to the new curriculum and upgradation of the infrastructure. This move is expected to have far-reaching benefits for students, including increased exposure to a wider range of academic opportunities, higher standards of teaching and the potential to compete globally.

At Nashirabad, near our Jalgaon plant, we have constructed 5 toilet blocks for female students at the ZP Girls School, Nashirabad, to promote girl child education, health and hygiene.

Promoting health and wellness

To promote health and wellness in the local community, the Company has organised various health camps and webinars. These events are conducted every month and offer an opportunity for people to consult and get diagnosed with any health-related concerns they may have. This includes providing support to not only individuals but also to their families.

The monthly webinars provide a valuable platform for individuals to learn various health-related topics, including nutrition, exercise, mental health and disease prevention. These webinars are accessible to everyone and offer a great opportunity to interact with presenters, making the experience both informative and immersive. Additionally, the Company has also organised health camps for diabetic and BP patients. These camps offer much-needed support for individuals with chronic health conditions, helping them access consultations and diagnoses and manage their health effectively.

At the plants, the Company has conducted camps on pulmonary and dental health, along with seasonal health and awareness sessions. From the Companys plant dispensary, over 100 patients from the nearby villages are served daily.

Internal control systems and their adequacy

The Company has necessary internal control systems commensurate with the business requirements, scale of operations and applicable statutes. The Board of Directors and the Audit Committee are independent from the Management and oversee the Companys internal controls adequacy and effectiveness. The Company has implemented control mechanisms to mitigate identified risks. Such controls are deployed through policies, SOPs and Internal Financial Control (IFC) risk and control matrices.

Digitisation initiatives, including sales force automation for interactions between the sales team and customers, transaction flow through electronic proof of delivery (EPOD), invoice upload to the customer portal and automating invoice matching, approval workflow automation as per the approved DOA with SharePoint 2.0 and its integration with SAP transactions, have further bolstered the control environment. Cybersecurity assessments are conducted with the increasing use of digital applications and exposure to an external network.

Ernst & Young (E&Y) has been appointed as the Internal Audit (IA) partner. With standard risk coverage, all critical business processes were thoroughly examined to understand the operations relevant to the Companys business. Continuous Control Monitoring (CCM) remains an important component of gaining value from data analytics. Also, the Company has an internal audit department staffed by qualified professionals who plan, conduct, coordinate and monitor audit activities and follow up on compliance and specific actions identified.

Additionally, the Companys whistle-blower policy provides a platform for various stakeholders to report and help the organisation in averting and preventing any suspicious activity or behaviour. The whistle-blower mechanism then investigates allegations of violations in a comprehensive manner. Appropriate recommendations are followed for rigorous implementation. The whistle-blower policy offers complete confidentiality and protection to the whistle-blower against any attempted harassment.

The Company has an advanced internal financial controls (IFC) framework where process owners self-assess critical controls on a quarterly basis using the controls self-assessment tool, along with external evaluations by audit partners. Revised practices are updated in the control documents and timely updates to responsibilities in the execution of controls are undertaken.

Looking ahead, the Company will leverage data analytics and automation in audit procedures to appropriately scope and deep dive into identified focus areas. To bring in a unified audit approach to processes, systems, controls, analytics and MIS reports for a combined process maturity assessment. The Company will continue to increase stakeholder awareness of governance, risk and compliance through training, workshops and culture-building.

Cautionary statement

Certain statements in the MDA section concerning future prospects may be forward-looking statements that involve a number of underlying identified/non-identified risks and uncertainties that could cause actual results to differ materially. In addition to the foregoing changes in the macro-environment, such ongoing geopolitical developments present unprecedented, unascertainable and constantly evolving risk(s), inter-alia, to the Company and its operating environment.

The results of these assumptions, relying on available internal and external information, are the basis for determining certain facts and figures in the report. Since the factors underlying these assumptions are subject to change over time, so are the estimates on which they are based. These forward-looking statements represent only the Companys current intentions, beliefs or expectations and any forward-looking statement speaks only as of the date it was made. The Company assumes no obligation to revise or update any forward-looking statements, as a result of new information, future events, or otherwise.

By order of the Board of Directors

For Orient Cement Limited

CK. Birla

Place: New Delhi Chairman Date: April 28, 2023 (DIN 00118473)