star cement ltd Directors report

Dear Shareholders,

Your Directors have pleasure in presenting Twenty-Second Annual Report of the Company together with the Audited Standalone & Consolidated Balance Sheet as at 31st March, 2023 and the Statement of Profit & Loss for the year ended on that date.

FINANCIAL PERFORMANCE

The highlights of the financial performance of the Company for the financial year ended 31st March, 2023 as compared to the previous financial year are as under:

( in Lakhs)

Particulars	Consolidated		Standalone
	FY 22-23	FY 21-22	FY 22-23	FY 21-22
Total Income	2,75,692.95	2,25,519.07	2,73,120.85	2,21,913.06
Profit before Interest, Depreciation and Tax and exceptional items	52,047.47	37,862.33	33,886.92	25,488.56
Less: Finance Cost	969.50	1,334.03	1,251.13	1,236.19
Less: Depreciation and Amortization Expense	13,111.22	12,162.95	7,751.63	7,214.85
Profit before exceptional items and tax	37,966.75	24,365.35	24,884.16	17,037.52
Exceptional Items	-	-	-	-
Profit before Tax	37,966.75	24,365.35	24,884.16	17,037.52
Tax expense:
- Current Tax	6,721.57	3,951.72	4,397.01	2,907.27
- Tax for earlier years	(759.74)	(2.46)	(772.82)	(4.92)
- Deferred Tax	7,244.51	(4,261.39)	4,857.92	(3,497.00)
Net Profit after Tax	24,760.41	24,677.48	16,402.05	17,632.17
Other comprehensive income for the year	33.76	(14.17)	30.94	2.33
Total comprehensive income for the year	24,794.17	24,663.31	16,432.99	17,634.50
Net profit attributable to:
Owners of the Company	24,760.41	24,677.48	-	-
Non-controlling interest	-	-	-	-
Total	24,760.41	24,677.48	-	-
Other Comprehensive Income attributable to:
Owners of the Company	33.76	(14.17)	-	-
Non-controlling interest	-	-	-	-
Total	33.76	(14.17)	-	-
Total Comprehensive Income attributable to:
Owners of the Company	24,794.17	24,663.31	-	-
Non-controlling interest	-	-	-	-
Total	24,794.17	24,663.31	-	-

OPERATIONAL REVIEW

India accounted for 7% of global cement installed capacity and ranked second in the world. India has a high quantity and quality of limestone deposits and having a large untapped cement market therefore, cement industry promises huge potential for growth in the country.

Currently, Installed capacity of cement in India is 622 MTPA with production of 362 MTPA. The Government have been supporting cement industry in various ways.

As per Union Budget for FY 23-24, the Government of India has allocated USD 26.74 Bn in developing road infrastructure and USD 18.84 Bn in railways which is expected to enhance cement demand of the country.

During the year under review, your Company has manufactured 7,59,263 MT. of Cement Clinker as against 5,20,517 MT. recorded during the FY 21-22. Companys subsidiary M/s. Star Cement Meghalaya Limited has produced 19,62,393 MT. of Clinker as against 16,54,582 MT. during the FY 21-22. On consolidated basis total clinker production during the year was at 27,21,656 MT. as against 21,75,099 MT. during FY 21-22. Your Company recorded overall growth in its performance during the year.

In terms of capacity utilisation, clinkerisation unit of your Company was able to utilise 95.87% of its installed capacity as against 65.72% during the FY 21-22. M/s. Star Cement Meghalaya Limited has fully utilised its capacity during the FY 22-23 as against 88.01% during the FY 21-22. On consolidated basis, clinkerisation units fully utlilized its capacity during the FY 22-23 as against 85.60% during FY 21-22.

Your Company has been able to maintain the performance on grinding front too. During the year under review, total cement production on consolidated basis was at 40,56,452 MT. as against 34,05,671 MT. during the FY 21-22.

Similarly, your Company has been able to achieve sales volume of 40,13,643 MT. of Cement as against 33,92,185 MT. during the previous financial year.

During the year your Company has obtained the Envirtonment clearance for 42 hectres limestone mines Your Company has implemented SAP in its business system which facilitates seamless and speedy data processing and flow of information with accountability.

During the year, your Company has taken various initiatives towards the cost cutting. In order to curb escalation of costs, the Company appointed Boston Consulting Group. Actions are being taken as per their advice. This year its efficacy has also been seen.

UPCOMING PROJECTS

Your Companys new projects for establishing a 3 MTPA clinkerisation plant and 10.8 MW WHRB at Lumshnong is underway. Star Cement North East Limited, a subsidiary Company initiated for establishing 2 MTPA cement plant in Sonapur, Assam and Star Cement (I) Limited, a subsidiary Companys project for 2 MTPA cement plant in Silchar with Railway sliding are in progress. Commissioned and Trial run for Star Cement Meghalaya Limited, a subsidiary Companys WHRB project for 12.5 MW are in progress. Upon completion of the projects overall strength and position of your Company in cement market will be improved.

DIVIDEND

The Board of Directors of your Company, after considering holistically the requirement of funds for Companys and its subsidiarys upcoming projects at Lumshnong, Sonapur and Silchar and the relevant circumstances has decided that it would be prudent, not to recommend any Final Dividend for the Financial Year 2022-23 (Previous year NIL).

INDIAN ECONOMY AND OUTLOOK – AT A GLANCE

Inspite of significant economic and geopolitical challenges remain in global environment, Indian economy remains one of the fastest growing economy of the world.

Indian economy posed to recover from contraction due to pandemic, Russian-Ukraine conflict and high rate of inflation.

The economy is placing to overall growth across the sectors and expected to position itself to the pre-pandemic growth in Financial year 2023-24. Capital expenditures undertaken by the Government and the private sectors are leading factors for the growth of Indian economy. Private consumption was high and it has led to increase in production and consumption. GDP growth rate is expected to be within the range of 6-6.8% in coming Financial year 2023-24. The World Bank revised its GDP forecast for India to 6.3 percent which is mainly due to slower consumption and present geopolitical scenario. However, control of inflation within the range be a challenging task. The Reserve Bank of India has implemented certain measures to restraint inflation. Government of India is likely to meet its fiscal deficit target of 5.9 percent of GDP in Financial year 2023-24 in other hand, the current account deficitis projected to narrow to 2.1 percent of GDP from an estimated 3 percent.

As per report of IMF during the Financial year 2022-23, the world economy had suffered setbacks, due to Russia Ukraine war volatile climate changes and its impact, which has increased the cost of food and energy thus escalating prices and increasing rates of interest.

Budget FY 22-23 focused on growth oriented policies and consistency. For which overall countrys future prospects are looking positive. The Union Budget has allocated 3% and more of GDP to capital expenditures, support for the manufacturing and agricultural sectors, focus on regional connectivity through airports and railways and easing of various compliances, promoting the ‘green budget for climate action. These factors will be the key governing factors for inclusive growth of the country in the period to come. Indias strive towards being ‘Aatmanirbhar presents a positive outlook for its future economic prospects focusing on supporting domestic industries and promoting local production. It is anticipated that with these efforts, India will emerge as the worlds fasted growing economy. The Government of India has taken certain initiatives to improve economic stability of the country.

With the aim to ‘ease of doing business the Government has reduced over 39,000 compliances and decriminalised over 3,400 legal provisions, this will help the Corporates to fous on its core areas and will reduce cost and effectively manage time thus will increase efficiency of business. Governments initiatives e.g., ‘Shree Anna Global Hub for Millets programme will help export potential of the agriculatural sector. The Union Budget has made provisions to modernise agriculture through investment in agri-tech, this will help the farmers. In the Budget the Government has announced various measures to promote the manufacturing sector this is expected to increase employment opportunities for the youth.

The Budget made provisions for infrastructure development which will increase the efficiency of goods and services delivery, helping businesses to reach a larger customer base.

Futher, the Government has allocated a capital outlay of 2.40 Lakhs Crore for railways, which will help to improve the countrys transportation infrastructure. The development of transportation infrastructure will provide employment opportunities in the country.

CEMENT INDUSTRY OVERVIEW

Indian cement industry is the second largest in the world. Country has a lot of potential for development in cement sector. Cement demand of the Country has been created through construction boom, pick-up in housing construction (60-63% share of total cement demand) and unprecedented infrastructure spending (~25-30% demand share). Countrys cement industry promises huge potential for growth. Countrys cement production capacity stood at 622 MT. p.a. and currently producing 362 Mn tonnes (MT.) in FY 22- 23 estimated. The Indian cement industry is likely to add ~80 Mn tonnes (MT) capacity by FY 23-24. Cement demand to register a CAGR of 9% between FY23-27 through infrastructure investments and healthy housing demand. During the Financial year 2022-23, due to geo political disturbances, Indian cement industry witnessed rise in energy prices which leads to high input costs and also impacted freight cost.

During last quarter 2022-23, domestic and international pet coke and coal prices have been moderated. In other hand imported coal from South Africa and Australia also witnessed a sharp decline of 35% and 44% q-o-q, respectively.

The Indian government is continuously focusing on infrastructure development for economic growth and is striving for full infrastructure coverage to establish 100 smart cities. The government plans to increase the capacity of railways and the facilities for handling and storage to enable the transfer of cement and cut out on transportation costs. These measures are expected to result in an increased construction activity in the country, thereby boosting demand for cement. The National Infrastructure Protection Plan, Bharatmala projects, mission "Home for All," rapid urbanisation, rising rural incomes and historically low interest rates on housing loans are one of the major factors driving long-term cement demand. Government has introduced schemes such as MGNREGA, PM Garib Kalyan Rozgar Abhiyan, PM Awas Yojana etc. which have aided cement demand of the Country.

In the Budget FY 23-24, Government highlighted its intention for the development of infrastructure sector and effective capital expenditure has been increased by 30%. Allocated Capex for Ministry of Road Transport and Highways increased by 25%. Allocation for PM Awas Yogana has been increased which will directly help the cement industry of the country. Budget for Metro cities has also been been increased by 25%. 50 new air ports will be made and 100 critical transport infrastructure will be developed. The government has allocated a capital outlay of 2.40 Lakh Crore for railways, which will help to improve the countrys transportation infrastructure. This investment in the railway sector will improve regional connectivity and increase the efficiency of goods and services. The Indian Railways aims to rapidly redevelop the infrastructure of more than 1,000 stations under the AMRUT Bharat Station scheme. The governments ‘Aatmanirbhar or self-reliant strategy has been a central theme of the budget, with a focus on supporting domestic industries and promoting local production In view of increasing demand in various sectors such as housing, commercial construction and industrial construction, Countrys cement industry is expected to reach 420 Mn tonnes per annum (MTPA) by FY 26-27. Eastern states are likely to contribute for the development of the region as their untapped markets are likely to be explored.

EAST & NORTHEAST SCENARIO – GATEWAY OF OPPORTUNITIES

The development of North East remains a major priority of the Government due to its locational and geo political features. For the purpose the Government of India has initiated in various fonts for overall development of North Eastern Region of the country. On a range of indicators, the rate of development now a days is on the rise, with notable improvements in health, education, infrastructure development and industrialisation which contributed in development of socio economic standard of the Region. The Union budget has approved continuation of Schemes of Ministry of Development of North Eastern Region , with an outlay of 12,882.2 Crore, for the balance period of the 15th Finance Commission (FY 22-23 to FY 25-26). Government has announced a package of 550 Crore to illuminate border villages of Arunachal Pradesh. North East Gas Grid (NEGG) project of 9,265 Crore is underway and will improve economy in NER.

The Prime Ministers Development Initiative for North East Region (PM-DevINE) Scheme was announced in the Union Budget FY 22-23. The Scheme with 100% Central funding, will have a total outlay of 6,600 Crore for the 4 year period from FY 22-23 to FY 25-26. The projects are in implementation stage.

Numerous efforts have been made for infrastructure development in the region and improving the connectivity of railways, air, telecom, and waterways is the main focus. The outlay for the North East Special Infrastructure Scheme (NESIDS) will be 8,139.5 Crore including committed liabilities of ongoing projects. Government also approved 1,540 Crore for special packages for Bodo Territorial Council (BTC), Dima Hasao Autonomous Territorial Council (DHATC) and Karbi Anglong Autonomous Territorial Council (KAATC) in Assam. The Five pillars of the Atmanirbhar Bharat Abhiyan for self-reliant India, namely, Economy, Infrastructutre, System, Vibrant Demography and Demand will get a push through the scheme.

Towrads the objective of improving railway connectivity, 51,019 Crore have been spent since 2014 additionally 19 new projects worth 77,930 Crore have been sanctioned. For improving road connectivity, 375 projects worth 1.05 Lakh Crore are under way. Under Assam Secondary Road Network Improvement Project, 247 KM have been taken up with an outlay of Rs 3,519 Crore. The road includes Dhodor Ali. 312.5 km road construction have been taken up with an outlay of Rs 3,994 Crore. 135 km road development work in Golaghat District with an outlay of Rs 1,252.14 Crore. Dhubri Fulbari bridge connecting Palashbari with Sualkuchi has been sanctioned for Rs 3,197.20 Crore. Construction of bridge over river Brahmaputra connecting Jorhat with Majuli with a cost of 925 Crore has been allocated. There are important flyovers proposed for construction in Guwahati, Jorhat, Amolapatty, Mancotta, Dibrugarh, Silchar (Kalain). Rabindra Bhawan at Guwahati will be reconstructed with 5,000 capacity Auditorium. New medical college will be constructed at Karimganj and Sivasagar.

For improving telecom connectivity in the North East Region from the year 2014 3,466 Crore have been spent. Air connectivity has also improved massively. In 68 years north east had only 9 airports, it jumped to 17 in a short span of eight years, to further give a boost to air connectivity, 2,000 Crore will be invested in civil aviation in North East region.

Waterways are integral to life and culture of North East. Recently 6,000 Crore have been sanctioned for the development of national waterway 2 and national waterway 16.

The State government of West Bengal has launched a project ‘Rastashree for the construction of new roads revamping existing roads. A total of 11,500 km of rural roads has been taken up under the project and the total allocation for the scheme is close to 3000 Crore.Indian Government has announced a major investment of Rs 2,550 Crore for the Kolkata Metro Rail in the union budget FY 23-24.

As per Union Budget of Bihar, 157 new nursing college to be established in the state. Centre will spend 44,950 Crore in FY 23-24 in Bihar under Bharatmala, a centrally funded project which aims to build a network of roads, highways and expressways across India.

The aforesaid projects will help to increase cement demand in the Region which is likely to have positive impact on the Companies operating in the Region.

Market Development

East India cement demand is expected to grow with a CAGR of 8% to 9% by FY 23-25 estimated. West Bengal and Bihar is the strongest cement consuming state in the eastern-region accounts with more than one-fourth of the regions total demand at ~19 Mn tonnes and 20 Mn tonnes estimated respectively. Cement demand in West Bengal and Bihar has also grown in the last five years with the help of central governments ‘housing for all as well as rapid infrastructure development in rural and urban sectors.

As a strategy, the North East Market continued to be the focus market for your Company. Cement demand was good throughout the year. Demand increased by 9% in NER against an all India average of ~8% estimated.

During the year under review your Company was able to sell overall 4.01 Mn Tonnes. of cement as against 3.4 Mn Tonnes during the FY 21-22.

Overall Cement demand in North East accounted for 13 Mn Tonnes in FY 22-23 as against 12 Mn Tonnes in FY 21-22. As a market leader in NER your Company has further consolidated dealers and sub dealers network. Currently your Company is associated with 1,600 dealers and 12,000 sub dealers.

Company is running mobile application for dealers, influencers, sales, branding and technical team as follows:

i) Star Saathi App for Dealers

ii) Customer Web Portal for Dealers

iii) Digital Displays in Dealer counters

iv) Star Lotus App for Contractors

v) Star Steller App for Engineers

vi) Sales Force Automation App for Sales, Branding and Technical department.

During the year Star Cement Limited continued with the Brand Television Commercial with Akshay Kumar as brand Ambassador, one of the biggest Stars of Bollywood. Association of Akshay Kumar being the brand ambassador caused an uplift on the brand perceptions and has had a positive impact on the saliency of Star Cement as a brand. The Brand Campaign with the key message that Star Cement ready for accepting all challenges depicted with the tagline

"Hain Tayyar Hum". The TV commercial is being seen across all major regional news channels in North East, West Bengal, Sikkim & Bihar. The commercial also have presence in the Digital medium and a heavy BTL presence through Surrogate boards, Hoardings, Wall Painting & Dealer/Retailer branding across North East, West Bengal, Sikkim & Bihar. The campaign hence has visible across 360 degrees in multiple mediums. This year we also initiated a digital marketing campaign called "Happy Pic Lucky Pic Contest" for our Facebook and Instagram users. The total engagement we had was for more than 2 Lakhs users and the campaign helped us to increase our Facebook likes by 17% and Instagram followers by 2700%.

PRODUCTION AND COST DEVELOPMENTS Fly Ash

FY23 Target of above 40 Lakh MT resulted in increased production of Portland Pozzolana Cement (PPC) as well. As a result we could consume higher quantity of Fly Ash which is otherwise an environment hazard. In the process we could procure 12.7 Lakh MT of Fly Ash which is 44% higher as compared to FY22.

In order to bring down the cost of Fly Ash, various cost saving initiatives were taken throughout the year. Almost all Fly Ash transportation through rakes were done through BOXN after complying with all environmental norms, resulting in lower freight cost. We sourced Bagged FlyAsh at our Siliguri Plant resulted in cost saving & continuous availability of FlyAsh.

Logistics & Freight

The freight cost in NE continued to be impacted in Guwahati Shillong Silchar route due to damage on Dwarksuid bridge along Shillong Bypass.

Your Company steered through these challenges to ensure that supplies to Market are ensured while keeping the cost in control. FY23 saw Rail Siding getting operational at our Siliguri plant which ensured the market are served with reduced Order to Delivery Time and increase market penetration. Availability of Rake dispatches from Siliguri Plant enabled to dispatch approx. 22,500 MT through rake in the peak month of Mar23 which is mainly impacted by Potato Harvesting Season.

Logistics Cost Efficiency was further improved through sustained efforts of key initiatives such as month e bidding, PTPK Outlier corrections & levers. Weighted average lead distance continued to remain at 220 KM range.

Integrated Vehicle Access Control cum Logistics Management System (IVL) was soft launched on Dec22 and which is in process of implementation. Once fully commissioned IVL would completed automate & digitise the End to End Logistics Operation and Bill Processing activities. Your Company has always focused on giving best Logistics services to our customers for timely delivery at the most economical costs & for the same 150+ GPS enabled dedicated fleets were inducted for enhanced customer serviceability. These fleet ensured every highest dispatch from Siliguri Plant during the Potato season wherein availability of fleet is a major concern.

Power cost

Meghalaya Power Limited continues to be a wholly owned subsidiary of the Company. During the year under review too, your Company continued to source its power requirement for its Lumshnong unit from its wholly owned subsidiary M/s. Meghalaya Power Limited under long term arrangement for supply of quality power at competitive rates and thus, has been able to reduce dependency on State utility/grid power. Cost of coal has a direct bearing on fuel cost. In view of increasing fuel cost due to increase in price of coal and to optimise the power cost and to reduce dependency on State utility /grid power, your Company has been able to source its power requirement of its Grinding Unit at Guwahati and integrated cement plant at Lumshnong from Indian Energy Exchange (IEX). The blend of sourcing has not only reduced power cost for your Company but also its quality and dependability. By inclining towards procurement of Renewable Power like Solar & Wind from Indian Energy Exchange, your Company has shown its commitment towards promotion of renewable resources and reduction of consumption of electricity generated from fossil based fuel. Use of bio mass and bamboo also helped to reduce dependence on traditional sources.

Coal availability from local sources remained constrained. Sourcing of Coal was done majorly from Coal India Limited (CIL) through FSA and Domestic/ International Traders. The Company also procured good quantity of Coal supplies on spot auctions from CIL during the year, keeping the overall cost in control.

KEY PERFORMANCE HIGHLIGHTS

Consolidated cement production was at 40.56 Lakhs MT during the year as against 34.06 Lakhs MT during the previous financial year.

Consolidated net sales at 2,575.55 Crore during the year under review as compared to 2,090.19 Crore during the financial year 2021-22.

Consolidated EBIDTA was at 520.47 Crore during the year under review as compared to 378.62 Crore during the immediate previous financial year after exceptional items.

Consolidated profit before tax during the year 2022-23 was at 379.67 Crore as against a profit of 243.65 Crore in the year 2021-22.

Consolidated Exceptional items during the year was Nil as against Nil recorded in previous year.

OPPORTUNITIES & THREATS, RISKS AND CONCERNS

Marketing strength of Star Cement lies on strong dealers network. Companys aggressive marketing strategies and strong branding network also contributed to establish its position as the market leader in the region. Locational advantages helped to procure raw materials at affordable prices.

Companys dependence on domestic market and business concentration on regional market for a longer period of time may adversely affect the growth of the Company. Environmental impact and other force majure events may affect the operations of the Company.

Governments budgetary allocation and various initiatives like Make in India, Housing for all, development of Ports, Roads and Highways, dam & irrigation project, National Highway Development programme, Bharat Nirman Yojana, dedicated Freight Corridors, Gauge conversion Projects undertaken by Railways, development in the area of alternative source of energy viz. Hydro and Solar Power and other infrastructure projects is expected to boost Cement and Power Demand of the country. Governments special drive for development of the North Eastern Region has been helping the sustained development of the region.

Competition in the cement industry is very high apart from the large players there are also small players in the market.

Competition from the foreign players may lead to tougher competition to the domestic players. This allows limited market share in the industry. Constant increase in diesel costs leads to high transportation cost. Availability of coal at a affordable cost became a constraint factor. In order to tackle the situation your Company optimally utilising its reserved coal and entering Fuel Supply Agreement with various suppliers. Cement Industry is highly fragmented and it is also highly regionalised, transportation of low volume of cement over long distances become uneconomical. Cement and power industry being majorly dependent upon availability of raw materials at affordable cost. Policies of the Government as well as Central and State Laws may adversely affect the availability of lime stone, coal etc. Any major changes in Governments Environmental and Forest regulations may affect limestone and coal availability to cement plants. However, your Company is sourcing raw materials from alternate sources so that raw materials availability risks is mitigated. Companys vast dealers network across the States also helping to mitigate the risk. Your Company has evolved a risk management framework to identify, assess and mitigate the key risk factors of the business. The Board of Directors of the Company is kept informed about the risk management of the Company. The Board of Directors have formed a Risk Management Committee inter alia, to oversee the risk assessing and mitigation process of the Company and advice the management in this regard.

SHARE CAPITAL

The paid up Equity Share Capital of the Company as on 31st March, 2023 was 40,41,80,417 divided into 40,41,80,417 equity shares of 1 each. During the year under review, the Company has neither issued any shares with differential voting rights nor granted stock options or sweat equity shares.

SHARES IN SUSPENSE ACCOUNT

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

INVESTOR EDUCATION AND PROTECTION FUND

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

Financial Year	Date of Declaration	Tentative Date for transfer to IEPF
FY 17-18 (Final)	31st July, 2018	6th September, 2025
FY 19-20 (Interim)	6th February, 2020	14th March, 2027

Members who have not encashed their dividend so far in respect of the aforesaid periods are requested to make their claims to Maheshwari Datamatics Private Limited, Registrar and Share Transfer Agent of the Company (‘RTA) or to the Company Secretary of the Company, at the Companys Registered Office/ Corporate Office, well in advance the above due dates. Pursuant to the provisions of IEPF Authority (IEPF) (Accounting, Audit, Transfer and Refund) Rules, 2016 (‘IEPF Rules), the Company has uploaded the details of unpaid and unclaimed amounts lying with the Company as on September 27, 2022 (date of the last AGM) on the website of the Company at www.starcement.co.in and also on the website of the Ministry of Corporate Affairs at www.mca.gov.in.

Further, pursuant to the provisions of Section 124 of the Act, read with the relevant Rules made thereunder, shares on which dividend has not been paid or claimed for seven (7) consecutive years or more shall be transferred to the IEPF Authority as notified by the Ministry of Corporate Affairs. Accordingly, Interim Dividend declared for the Financial year 2015-16 which was unpaid for Seven (7) consecutive years aggregating to 2,96,158 in respect of which dividend entitlements were not paid or claimed for seven (7) consecutive years or more have been transferred by the Company to the IEPF Authority on 20th July, 2022, after following the required provisions of Rules. 40,158 equity shares of the Company were transferred to the IEPF Authroity on 3rd August, 2022, 6th August, 2022, 12th August, 2022 and 13th August, 2022 respectively. The details are available on the web site of the Company at www.starcement.co.in The shareholders whose dividend/shares have been/ will be transferred to the IEPF Authority may claim the shares or apply for refund by making an application to the IEPF Authority by following the procedure as detailed in the IEPF Rules and as enumerated on the website of IEPF Authority at http://www.iepf.gov.in/IEPF/refund.html.

ANNUAL RETURN

In terms of requirement of section 134 (3) (a) read with Section 92(3) of the Companies Act, 2013, the Annual return of the Company has been placed on the Companys website and can be accessed at the web link: https://www.starcement. co.in/upload/images/files/Annual-Return-2022-23.pdf

MEETINGS OF THE BOARD

During the year four (4) Board Meetings and four (4) Audit Committee Meetings were convened and held on 17th May, 2022, 2nd August, 2022, 14th November, 2022 and 3rd February, 2023 respectively. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013 and SEBI (LODR) Regulations, 2015.

The details of the Board meeting and the Committee meeting are provided in the Corporate Governance Report.

MEETINGS OF INDEPENDENT DIRECTORS

During the year under review, a meeting of Independent Directors was held on 17th March, 2023 wherein the performance of the Non-Independent Directors and the Board as a whole, its committees were reviewed. The Independent Directors at their meeting also inter alia assessed the quality, quantity and timeliness of flow of information between the Company management and the Board of Directors of the Company.

COMMITTEES OF THE BOARD

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

WHISTLE BLOWER POLICY/ VIGIL MECHANISM

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

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

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

DIVIDEND DISTRIBUTION POLICY

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

CODE OF CONDUCT

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

COMPLIANCE WITH THE SECRETARIAL STANDARDS AND INDIAN ACCOUNTING STANDARDS (IND AS)

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

DIRECTORS RESPONSIBILITY STATEMENT

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

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

The Directors have selected such accounting policies and have applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2023 and of the profit of the Company for the year under review;

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

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

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

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

AUDITORS & AUDITORS REPORT

Messrs Singhi & Co., Chartered Accountants (Firm Registration Number: 302049E), Statutory Auditors of the Company have been appointed by the members at the Twenty-First Annual General Meeting of the members of the Company and shall hold office for a period of 5 years from the date of such meeting held on 27th September, 2022. The Statutory Auditors Report "with an unmodified opinion", given by M/s. Singhi & Co., on the Standalone and Consolidated Financial Statements of the Company for the Financial Year ended 31st March, 2023, is appended in the Financial Statements forming part of this Annual Report. The notes to the accounts referred to in the Auditors Report are self-explanatory and, therefore, do not call for any further comments.

COST AUDITORS

Pursuant to Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Amendment Rules, 2014, the cost audit records maintained by the Company in respect of its manufacturing activity is required to be audited. Your Directors have, on the recommendation of the Audit Committee, appointed Messrs B. G. Chowdhury & Co., Cost Accountants, (Firm Registration number 000064) as Cost Auditors of the Company for the financial year ended 31st March, 2023 in the Board Meeting held on 17th May, 2022. The remuneration proposed to be paid to them for the Financial year 2022-23, as recommended by audit committee, was ratified in the meeting of shareholders held on 27th September, 2022.

Messrs B. G. Chowdhury & Co., Cost Accountants, (Firm Registration number 000064) have expressed their willingness to be re-appointed as Cost Auditors of the Company for ensuing financial year. The Board, on recommendation of the audit committee has re-appointed M/s. B. G. Chowdhury & Co., Cost Accountants, (Firm Registration number 000064) as Cost Auditors of the Company for the Financial year 2023-24 subject to ratification of their remuneration by shareholders in the General Meeting of the Company.

As per the provisions of the Companies Act, 2013, the remuneration payable to the Cost Auditors is placed before the Members in a General Meeting for their ratification. Accordingly, a Resolution seeking Members ratification for the remuneration payable to M/s. B. G. Chowdhury & Co., Cost Auditors for the Financial year 2023-24 is included in the Notice convening the Annual General Meeting. The Cost Audit report for the Financial Year 2021-22 was filed with the Ministry of Corporate Affairs on 31st August, 2022.

SECRETARIAL AUDIT

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

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

REPORTING OF FRAUD

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

BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT

As required under Regulation 34 of SEBI Listing Regulations 2015, the Business Responsibility and Sustainability Report of the Company for the financial year ended 31st March, 2023 is attached as part of the Annual Report.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

During the year under review, your Company has not made any investment or provided guarantee or security in connection with a loan to any person exceeding the limit specified in Section 186 of the Companies Act, 2013. Details of Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in notes to the financial statements.

RELATED PARTY TRANSACTIONS

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

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

A policy on ‘Related Party Transactions has been devised by the Company which may be referred to at the Companys website at the weblink: https://www.starcement.co.in/ upload/images/files/Revised-Related-Party-Policy.pdf

RESERVES

During the year under review no amount was transferred to reserves.

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

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

(A) Steps taken toward Conservation of energy:

Cement Mill 1 production, mix & circuit optimised, by which annual power saving achieved.

Primary Air blower installed VFD by which control the rpm of blower as per process requirement and saved the energy 86,000 kWh per year.

Due to replacement of existing HPSV lights by LED fittings a total 54,000 kwh power was saved during the year.

Optimisation of RABH purging operation done which leads to Total power saving of 2,80,000 kwh per year.

Modification of lighting system of packing plant, Mill Building, Hopper Building from "Always on" in Night hours to need based lighting system. This Lights are controlled from CCR as per requirement.

Packing plant Packer 1, 2 & 3 Bag Filter Fan 30 KW Installation of VFD in place of DOL starter resulted in reduction in power.

02 nos of 37 kW VFD installation in feeding group bag filter fans has reduced power consumption of 94960 KWH per year.

Mixing of Grinding Aid in cement production started to Increase mill output and decrease Mill SPC (Specfic power consumption). For PPC SPC decrease up to 0.5 Kwh/MT & Mill output increase up to 10 TPH.

Installed 2 Nos 100 KVAR Capacitor bank at fly ash IMCC and water pump IMCC panels. Improved power factor up to .995.

Installation of 90 KW VFD in Clinker tippler bag filter fan. Saving of 8.0 KW per hour.

Installation of VFD in ---

110 KW in Air compressor. Saving 17 kw per hour. 132 KW VFD in Fly ash Air compressor. Saving of 41 Kw per hour.

Maintained MD below 8000KVA by tripping of noncritical drives of plants.

(B) Steps taken toward Technical Absorption:

a. Steps taken towards Technical innovation:-

i. Installation of 5.5KW VFD for kiln thruster pump to control the pressure of kiln thruster pump.

ii. New Yaskawa GA700 VFD Drives communication with Plant PLC is done by using Modbus communication. Communication was done by changing data type from Hexadecimal to Integer which required data conversion module set up .

iii. Modified the lighting circuits of packing plant truck loader and packer area. When there is no loading Stopping 330 lights. Installed 12 Nos 150 watts emergency lights for illumination during stopping of said lights. Saved 19008 kwh power in last six months.

iv. Optimisation of HAG operation hence reducing the fuel cons by 30%. Annual Saving 7437 ltrs fuel. b. Steps taken towards technical absorption:-

i. For smooth operation of Truck loaders installed Solid state Relay (SSR) in place of power contactors for Long belt, Loading belt, Luffing drive, this helped in reducing down time of truck loader. Failure rate of Power Contactors are 10 times more than SSR and also cost wise SSR is 30% cheaper

ii. Installation of 3.7 KW VFD in grinding Aid dosing pump. This helped in savings of grinding aid by adjusting dosing from CCR as per process requirement.

iii. Mixing of Grinding Aid in cement started up to 1 Kwh/MT for increase mill output and decrease Mill SPC.

iv. Optimised bag house air purging system. Saved 32400 KWH power in last six months.

v. Providing hardware interlock in 38 Nos bag filter & air slide fans enclosures exhaust fans.

Saved 38300 KWH in last six months.

vi. Operation of belt conveyor (K21BC4) with modified control circuit of divertor ( K21DG1).

c. Steps taken towards technical adoption :-

i. Development of Test bench PLC set up with spare CPU and modules. This will help in two ways. Firstly, new purchased Module in terms of functionality can be checked. Secondly different communication protocol like Modbus, Profibus and others which caters training to all engineers can be tested.

ii. Use of alternative fuel Pyro oil in place of High-speed diesel.

The Company has developed a Research & Development cell for carrying out R&D Projects in the plant with specific objective of development of advanced systems for quality improvement. During the year under review, your Company incurred Capital expenditure of 6.70 Lakhs (P.Y. 8.12 Lakhs) and Revenue Expenditure of 22.74 Lakhs (P.Y. 52.31 Lakhs) in Research & Development.

(C) Foreign Exchange Earnings And Outgo:

During the period under review, Foreign Exchange Earning was NIL (Previous Year NIL) and the Foreign Exchange Outgo was 2,597.86 Lakhs (Previous Year 5.24 Lakhs).

CORPORATE SOCIAL RESPONSIBILITY INITIATIVES (CSR)

Star Cement Limited has constantly been the forerunner of CSR activities in north-eastern and eastern region of the country. The Companys CSR policy primarily focuses on the need based sustainable holistic development of the neighbouring society since the day of its inception. Towards achieving long term stakeholder value creation, the Company continues to respect the interests of and be responsive towards our key stakeholders - the communities, especially those from socially and economically backward Groups, the underprivileged and marginalised and the society at large.

Your Company is always pioneer in various social welfare activities and has been undertaking several welfare activities for the benefit of the community at large. Towards achieving long term stakeholder value creation, the Company continues to respect the interests of and be responsive towards our key stakeholders - the communities, especially those from socially and economically backward Groups, the underprivileged and marginalised. Your Companys CSR activities always goes beyond the statutory requirements for the reasons excess contributions made every year are never set off against the CSR liability.

Pursuant to Section 135 of the Companies Act, 2013 read with Schedule VII thereof and Rules made thereunder, your Companys social responsibility policy is offering number of community welfare services in the field of Health & Sanitation, Education, Disaster relief, Environment sustainability & Biodiversity, Animal welfare, Sustainable Livelihood & Skills building, Sports upliftment, Rural & infrastructure development for the local inhabitants of plant operational areas during the year 2022-23 to improve the quality and standard of living. Your Company undertook various activities during the year 2022-23 under review in line with its CSR Policy.

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

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

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

EVALUATION OF THE BOARDS PERFORMANCE

In accordance with the requirements of the Companies Act 2013, the performance evaluation of the Board was carried out during the year under review. The Board follows a formal mechanism for the evaluation of the performance of the Board as well as Committee. The evaluation reflected the overall engagement of the Board and the Committee. A structured questionnaire was prepared after taking into consideration inputs received from the Directors, covering various aspects of the Boards functioning such as adequacy of the composition of the Board and its Committees, Board culture, execution and performance of specific duties, obligations and governance etc.,.

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

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

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

DIRECTORS AND KEY MANAGERIAL PERSONNEL

On the recommendation of the Nomination & Remuneration Committee, the Board of Directors through circular resolution dated 29th June, 2022, had appointed Mr. Deepak Singhal (DIN: 00957347) as an Additional Director of the Company in the Independent category with effect from 29th June, 2022, for a period of 3 years till 28th June, 2025 which was duly approved by the shareholders at the Annual General Meeting held on 27th September, 2022.

Mr. Deepak Singhal aged about 63 years is an IAS (Retired). He is Graduate in Engineering from IIT, Roorkee (Gold Medalist) and Post Graduate from IIT, Delhi. He is the winner of World Water Award from Sotckholm. He is having 40 years of rich and varied experiences in diverse fields. He was Chief Secretary of Govt. of Uttar Pradesh and was District Magistrate of Nainital, Bareilly and Meerut and was also Vice Chancellor of Meerut University, Chairman & Managing Director of Uttar Pradesh, Power Corporation, Principal Secretary-Home, Principal Secretary- Irrigation, Joint Secretary-Fertilisers, Govt of India, Sales Tax Commissioner and Vice Chairman of Meerut & Kanpur Development Authority etc. At present he is in the Board of Instrumentation Automation Surveillance & Communication Sector Skill Council.

Mr. Pramod Kumar Shah, Independent Director retired from the Board with effect from close of the business hours of 31st March, 2023 due to completion of his second and final terms of appointment as an Independent Director. Your Board of Directors record their appreciation for the valuable services and guidances rendered/given by Mr. Pramod Kumar Shah during his association with the Company as a member of the Board and various Committees.

On the recommendation of the Nomination & Remuneration Committee, the Board of Directors at its meeting held on 3rd February, 2023, appointed Mr. Vivek Chawla (DIN: 02696336) as an Additional Director in the Independent category with effect from 1st April, 2023 for a period of 3 years till 31st March, 2026 subject to approval of the shareholders. Mr. Vivek Chawla aged about 62 years is BE (Hons.) in Mining Engineering from National Institute of Technology, Raipur, MP and Diploma in Business Management from IGNOU having rich and varied experience over 41 years in the industry across functions such as management, operations, manufacturing, strategy sales & marketing, projects, logistics, commercial and Mining.

Mr. Chawla has led and nurtured large businesses and managed some of the plants of ACC/ Hindalco etc. He is pioneered in large scale transformation programs in sales, logistics and manufacturing, led strategic initiative into captive coal blocks, obtained additional limestone mining leases for future growth of the Company, conceptualised and executed large-scale capital investments including acquisitions and has managed large work forces, trade unions and external stakeholders. Presently, he is heading the Paper business of Emami Group as Whole-time Director & CEO of Emami Paper Mills Limited. He is also associated as Director with NU Vista Limited, Sanjeeva Town Welfare Association and Prakruti Prerana Foundation. His association as Director would be beneficial to the Company.

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

On the recommendation of the Nomination & Remuneration Committee, the Board of Directors through circular resolution dated 20th March 2023, appointed Mr. Jagdish Chandra Toshniwal (DIN: 01539889) as an Additional Director of the Company in Independent category with effect from 1st April, 2023 for a period of 3 years till 31st March, 2026 subject to approval of the shareholders.

Mr. Jagdish Chandra Toshniwal holds a B.E. Degree in Mechanical Engineering from Birla Institute of Technology & Science, Pilani (Rajasthan). He has nearly 45 years of experience in Cement Industry with visionary leadership, high achievement orientation, innovative capabilities, strong business acumen, a thorough cement professional having exposure in Plant operations, Green Field /Brown Field Project, Marketing, Procurement and Business Development. He has worked with Ambuja Cement Limited, Heidelberg Cement India Private Limited and different other Cement Companies. Currently, He is associated as Director with Shiva Cement Limited and Jindal Panther Cement Private Limited. Mr. Toshniwal has also worked as a Managing Director in Wonder Cement Limited. He was responsible for managing entire business of the Company including plant operations, project planning and execution, sales and marketing across nine states, setting up processess, developing the organisation for rapid growth of the Company, developing business strategies. His association as Director would be beneficial to the Company.

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

On the recommendation of the Nomination & Remuneration Committee, the Board of Directors through circular resolution dated 27th April, 2023, appointed Mr. Ramit Budhraja (DIN: 00053723) as an Additional Director of the Company in Independent category with effect from 1st May, 2023 for a period of 3 years till 30th April, 2026 subject to approval of the shareholders.

Mr. Ramit Budhraja, about 63 years old, has a Business Administration (MBA) Degree from Indian Institute of Management (IIM), Bangalore and B-Tech in Chemical Engineering from Indian Institute of Technology (IIT), New Delhi. He is an expert practitioner in Strategy, Marketing, Transformation, Innovation and Mergers. Mr. Budhraja has attended numerous developmental programs in India, Switzerland, and USA.

A veteran with over 30 years of experience in the Cement industry, he has motivated and led teams across the globe based out of India, Switzerland, Germany, France and Bangladesh. He has served as a Director on the Boards of ACC Concrete Limited, Alcon Cement Private Limited, Shiva Cement Limited, Bulk Cement Corporation (India) Limited and Holcim Bangladesh Limited He commissioned and took to market over 5 Mn tons of cement capacity, achieving over 34% growth in sales per year. He is credited with achieving peak performance and implementing growth strategies through mergers and acquisitions.

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

In terms of Regulation 17(1C) of the Listing Regulations, the listed entity is required to obtain approval of the shareholders for the appointment of new Director at the next General Meeting or within a time period of three months from the date of appointment, whichever is earlier. Accordingly, the shareholders of the Company were need to approve the appointment of Mr. Vivek Chawla, Mr. Jagdish Chandra Toshniwal and Mr. Ramit Budhraja as Independent Directors of the Company, by way of special resolution through postal ballot by way of voting through electronic means or by the ensuing General Meeting whichever is earlier.

The approval of the shareholders for the appointment of Mr. Vivek Chawla, Mr. Jagdish Chandra Toshniwal and Mr. Ramit Budhraja as Independent Directors of the Company for above mentioned tenures respectively have been sought by way of special resolution through postal ballot by way of voting through electronic means.

Mr. Sajjan Bhajanka resigned as Chief Executive Officer and Key Managerial Personnel of the Company with effect from close of the business hours of 19th May, 2023, however he will continue as Chairman & Managing Director of the Company.

The Board places on record its appreciation for the services rendered and guidance given by Mr. Sajjan Bhajanka during his tenure as Chief Executive Officer of the Company. On the recommendation of the Nomination and Remuneration Committee, the Board of Directors at its meeting held on 19th May, 2023 has appointed Mr. Vinit Kumar Tiwari, as Chief Executive Officer and Key Managerial Personnel of the Company with effect from 20th May, 2023.

In accordance with the provisions of Companies Act, 2013 and in terms of the Memorandum and Articles of Association of the Company, Mr. Sanjay Agarwal (DIN: 00246132) and Mr. Rajendra Chamaria (DIN: 00246171) will retire by rotation and being eligible, offer themselves for re-appointment. In view of their considerable experience, your Directors recommend the re-appointment as Directors of the Company.

DECLARATION BY INDEPENDENT DIRECTORS

All Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and they have complied with the Code for Independent Directors prescribed in Schedule IV to the Act and the Listing Regulations. Mr. Nirmalya Bhattacharyya, Mrs. Ibaridor Katherine War, Mrs. Plistina Dkhar, Mr. Amit Kiran Deb, Mr. Deepak Singhal (w.e.f. 29.06.2022), Mr. Vivek Chawla (w.e.f. 01.04.2023), Mr. Jagdish Chandra Toshniwal (w.e.f. 01.04.2023) and Mr. Ramit Budhraja (w.e.f. 01.05.2023) are Independent Directors on the Board of your Company. In the opinion of the Board and as confirmed by these Directors, they fulfill the conditions specified in section 149 of the Act and the Rules made thereunder and the Listing Regulations about their status as Independent Director of the Company.

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

FAMILIARISATION PROGRAMME FOR INDEPENDENT DIRECTORS

In order to enable the Independent Directors to perform their duties optimally, the Board has devised a familiarisation programme for the Independent Directors to familiarise them with the Company, their roles, rights, responsibilities in the Company, nature of the industry in which the Company operates, business model of the Company, etc. They are periodically updated about the development which takes place in the Company. Periodic presentations are made at the Board and Committee Meetings, updates of the Company, business strategy and risks involved. Site visits are arranged, whenever required. At the time of appointment of an Independent Director, the Company issues a formal letter of appointment setting out in detail, the terms of appointment, duties, responsibilities and commitments etc. The familiarisation program is available on the Companys website under the web link: https://www.starcement.co.in/upload/images/files/ Familiarization-Programme.pdf

SUBSIDIARIES AND ASSOCIATE COMPANY

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

Star Cement Meghalaya Limited, a material subsidiary, is engaged in manufacturing of Cement Clinker and has a Clinkerisation plant with an installed capacity of 1.8 MTPA.

During the year under review, the Company manufactured 19,62,393 MT of clinker as against 16,54,582 MT in FY 21-22. Megha Technical & Engineers Private Limited, a wholly-owned subsidiary, is engaged in the manufacture of cement.

During the year under review, the Company produced 40,526 MT of Cement.

Meghalaya Power Limited, a wholly-owned subsidiary, is engaged in generation of Power. During the year under review the Company generated 181 Mn units of power. NE Hills Hydro Limited, wholly owned subsidiary of your Company is currently not operational.

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

The Board of Directors of Star Cement Meghalaya Limited, Meghalaya Power Limited, Megha Technical & Engineers Private Limited and NE Hills Hydro Limited at their respective meetings held on 2nd February, 2023 and 18th May, 2023 have approved a Scheme of Amalgamation under Sections 230 to 232 read with other applicable provisions of the Companies Act 2013, involving amalgamation of Star Cement Meghalaya Limited, Transferee Company and Meghalaya Power Limited, Megha Technical & Engineers Private Limited & NE Hills Hydro Limited, Transferor Companies and their respective shareholders and creditors, with effect from Appointed date, 1st April, 2023. The Scheme is subject to necessary approvals, including sanction of the Scheme by the Honble National Company Law Tribunal, Guwahati Bench.

CHANGES IN NATURE OF BUSINESS, IF ANY

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

AUDITED FINANCIAL STATEMENTS OF THE COMPANYS SUBSIDIARIES

Pursuant to sub-section (3) of section 129 of the Act, the statement containing the salient features of the financial statement for the year ended 31st March, 2023 for each of the Companys subsidiaries viz. Star Cement Meghalaya Limited (SCML), Megha Technical & Engineers Private Limited (MTEPL), Meghalaya Power Limited (MPL), NE Hills Hydro Limited (NHHL), Star Century Global Cement Private Limited (SCGCPL), Star Cement (I) Limited (formerly, Star Cement Lumshnong Limited) and Star Cement North East Limited are annexed in the Form AOC 1 and marked as Annexure-4.

CONSOLIDATED FINANCIAL STATEMENTS

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

The detailed financial statements and audit reports of each of the subsidiaries of the Company are available for inspection at the Registered Office of the Company during office hours between 11:00 A.M. and 01:00 P.M. The Company will arrange to send the financial statements of the subsidiaries upon written request from a shareholder to the registered address of the said shareholder.

DEPOSITS

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

SIGNIFICANT MATERIAL ORDERS PASSED BY THE COURTS OR REGULATORS

(i) The Director of Mineral resources, Meghalaya, Shillong vide its Demand notice dated 19th February, 2020 raised a demand against the Company for payment of royalty, MEPRF, VAT/GST for an amount of 4184.06 Lakhs in pursuance to the National Green Tribunal (NGT) order dated 17.01.2020 passed in O.A. No. 110 (THC)/2012 against the Company and other Cement and Power Companies in Meghalaya for alleged illegal coal procurement.

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

Accordingly, the Company had preferred an appeal before the Apex Court. The Apex court vide its order dated 02.05.2023 remand back the file to the NGT, at the stage, at which they stood prior to the passing of the judgement dated 17.01.2020 and set aside the judgement dated 17.01.2020. As the matter is pending no provision has been made in the accounts.(Refer Note no. 46(b) of Notes to Accounts).

(ii) In respect of demand letter received from Central Excise authority for refund of Education Cess and Secondary & Higher Education Cess amounting to 566.05 Lakhs, the Company has filed a writ petition before the Honble Meghalaya High Court for quashing of demand notice, the Meghalaya High Court has stayed the said demand notice matter is sub judice and final hearing of the case is yet to be conducted, therefore, no provision have been taken in the books of account. No further development took place during the year. (Refer Note no. 46(a) of Notes to Accounts).

(iii) During the year the Company has received a demand notice dated 20th March, 2023 from the Divisional Mining Officer (DMO), Directorate of Mineral Resources, Meghalaya, Jowai towards outstanding dues of royalty & Cess on Coal, Sandstone, Clay and Shale procured/ consumed by the Company in certain specific periods between F.Y. 2009-10 to F.Y. 2022-23 amounting to 2,650.31 Lakhs (including 1,552.61 Lakhs towards Penal Interest). As per the provisions of the Mines and Minerals (Development and Regulation) Act, 1957, the liability for payment of royalty in respect of any mineral removed/ consumed from the mining lease arises on the holder of the mining lease and not on the purchaser of such mined minerals. Hence, there is no obligation of the Company to pay royalty/cess in case the minerals are procured from third party vendors. However, as an abundant precaution, the Company has kept liability towards Royalty & Cess on above mineral products amounting to 487.88 Lakhs (including net additional provision of 89.79 lakhs during the year). Since the liability to pay royalty & Cess itself is not applicable to the Company, hence provision for differential amount of demand amounting to 609.82 Lakhs and penal interest amounting to 1,552.61 Lakhs has not been provided as a matter of prudence and shown as contingent liability. The Company shall contest the above demand and based on the legal opinion obtained in this regard, it believes the said demand raised by the DMO is not tenable and the matter shall be disposed off in the favour of the Company (Refer Note no. 46(c) of Notes to Accounts).

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

MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY

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

CREDIT RATINGS

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

ADEQUACY OF INTERNAL FINANCIAL CONTROL

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

The Board of Directors of the Company on the recommendation of the Audit Committee, appointed an in-house team of employees headed by Mr. Anik Chakrabarty, Chartered Accountant as the Internal Auditors of the Company to conduct Internal Audit for the Financial Year 2023-24. The Internal Auditors monitors and evaluates the efficacy and adequacy of internal control system in the Company, its compliance with operating systems, accounting procedures and policies at all locations of the Company. Based on the report of internal audit function, process owners undertake corrective action in their respective areas and thereby strengthen the controls. Significant audit observations and recommendations, if any, along with corrective actions thereon are presented to the Audit Committee of the Board.

INTERNAL CONTROL OVER FINANCIAL REPORTING

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

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

Key Financial ratios	FY 22-23	FY 21-22	% change	Explanation for Significant Changes
Debtors Turnover ratio	23.13	16.19	42.84	Change on account of increase in sales by 23% and reduction in trade receivables
Inventory Turnover ratio	19.79	22.01	(10.10)	NA
Interest Coverage ratio	20.89	14.78	41.34	Increase on account of higher net profit achieved during the year and reduction of substantial borrowings.
Current ratio	1.31	1.63	(19.60)	NA
Debt Equity ratio	0.03	0.06	(56.21)	Change is due to major repayment of Long term borrowings during the year.
Operating Profit Margin (%)	12.53	11.61	7.96	Change on account of higher profit before interest and tax
Net Profit Margin (%)	6.27	8.38	(25.23)	Change on account of higher taxes
Return on Net Worth (%)	11.87	13.70	(13.32)	NA

MANAGERIAL REMUNERATION AND PARTICULARS OF EMPLOYEES

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

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

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

DETAILS OF DIFFERENCE IN VALUATION

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

POLICY ON PREVENTION OF SEXUAL HARASSMENT

The Company values the integrity and dignity of its employees.

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

CORPORATE GOVERNANCE

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

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

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

RISK MANAGEMENT

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

HUMAN RESOURCE DEVELOPMENT & INDUSTRIAL RELATIONS

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

The year 2022-23 started off with the new mission of providing HR support to all stakeholders underlying the theme "Better & Faster"- delivering HR services "Better" than it was done and "Faster" than earlier. Transformative journey of HR commenced through heightened employee engagement, standardised processes, and increased service effectiveness and efficiency across locations New and competitive salary structure was also introduced to give employees the flexibility to choose the best fit which is both market competitive and employee friendly. Major aim was also bring in uniformity, standardisation and fairness in CTC structure across all the locations.

It was critical to homogenise key talent acquisition processes across the organisation as a part of the Talent Acquisition strategy and tactics to meet the future challenges of the competitive Talent landscape. In our endeavor to ensure that we have the right people, at the right time in the right positions, we standardised the Talent Acquisition process through thoughtfully designed recruitment tools / formats which are now being used across locations to develop candidate pools and proactively court high-quality talent.

One of the major breakthrough was working towards introduction of "better and faster" HR Automation tool with the objective of providing quality employee experience offering seamless transactions across all HR workflows/ employee self service through an intuitive, easy to use interface available both on web and mobile.

We were able to sustain our Reward & Recognition initiatives by way of recognising employees instantly for their contributions and also recognising valuable suggestions from them having a positive impact towards the growth/ benefit of organisation.

Towards the journey of Business Excellence, HR contributed through partnering with business at various touch points and one major achievement was introduction 5S (a workplace organisation method) at our Lumshnong and Siliguri plant through anchoring the initiative and driving awareness on the same through all relevant stakeholders.

Training and Development initiatives were more robust and business oriented catering to both organisation and individual needs. Proper tracking of capability development initiatives helped to identify the impact of training across department in terms of mandays and coverage which in turn was an input towards Talent Development Strategy.

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

AWARDS AND ACCOLADES

During the year Star Cement was also awarded with Rotary RMB Connect 2022 Award in association with The Telegraph T2 for the most trusted invaluable service and excellence in the category of Cement Industry in 2022.

GREEN INITIATIVES IN CORPORATE GOVERNANCE

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

The Ministry of Corporate Affairs has taken ‘Green Initiative in the Corporate Governance by allowing paperless compliances by the Companies and has issued circulars stating that service of notice/documents including Annual Report can be sent by e-mail to its members for the financial year 31st March, 2023. A newspaper advertisement in this regard is being published.

Your Company prefers e demand module for transportation of material through Indian Railways which helps for carbon saving. It is the amount of saving of carbon emission in Tonnes of CO2 on account of transportation of goods by railways instead of road.

CAUTIONARY STATEMENT

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

ACKNOWLEDGEMENT

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

Your Directors would also like to place on record their sincere appreciation for the commitment, dedication and hard work put in by every member of the Company and dedicates the credit for the Companys achievements to them. Last but not least, your Directors express their gratitude to the shareholders of the Company for reposing their confidence and faith in the Management of the Company and look forward for their support in future.

For and on behalf of the Board of Directors

	SAJJAN BHAJANKA
Place: Kolkata	CHAIRMAN
Date: 19th May, 2023	(DIN: 00246043)