HeidelbergCement India Ltd

To the Members,

The Directors are pleased to present the 65 Annual Report together with the audited financial statements of HeidelbergCement India Ltd. (the Company) for the financial year ended 31 March 2024 (FY24).

THE YEAR IN RETROSPECT

During FY24, the global economic activity witnessed signs of slowdown in both the manufacturing and services sectors. Tight financial conditions weighed on consumer and business sentiments prompting the fiscal and monetary policy-makers to consider policy calibrations. The data published by International Monetary Fund (IMF) indicates slight decline in global growth to 2.9% in 2024, down from 3% in 2023. The relative resilience in global figures is due to the growth performance of emerging economies, while the momentum in advanced economies is fading. The ongoing geopolitical rifts are a cause of concern and the same are also leading to global economic volatility. While the interest rates continue at an elevated level but signs of easing global inflation have raised expectations of reduction in interest rates in near future which will provide much needed impetus to the economic activity.

India has decisively withstood global headwinds and remained the world's fastest-growing major economy on the back of growing demand, moderate inflation, stable interest rate regime and robust foreign exchange reserves. Despite widespread pessimism witnessed among the developed nations and the worsening geopolitical situation, Indian economy recorded GDP of 8.2% during FY24. Index of Industrial Production has registered growth of 5.8% during FY24.

India's economy is relatively insulated from global spillovers compared to other emerging markets because India has a large domestic market and is relatively less exposed to international trade flows. The Indian economy has several positive factors, such as policy reforms aimed at ease of doing business, stable macro-economics, prudent regulatory measures, optimism and increasing domestic demand. Additionally, the healthy balance sheets of banks and corporates, supply chain normalization, business confidence and robust government capital expenditure are indicating towards a renewal of the capex cycle.

Infrastructure and real estate sector is thriving as is evident from the growth numbers of Index of Industrial Production (IIP) for Infra, cement and steel consumption, as well as the government's emphasis on prioritizing spending for infrastructure development in the country.

During FY24, the Company has sold 4.81 million tonnes of cement & clinker compared to 4.39 million tonnes of cement & clinker in FY23, an increase of 9.4%.

A snapshot of the Company's financial performance for FY24 vis-a-vis FY23 is as under:

On the operations front, your Company constantly endeavours to benefit from cost economics, innovative procurement strategies, process digitalization, Group's global expertise in sourcing etc,. Your company has always strived to optimise costs despite all odds. During the year under review, the price of domestic coal dropped in line with the international trend and the supply situation also improved due to opening up of new coal mines but the quality of coal supplies were not consistent. The softening of global crude price by ~17% led to a correction of ~ 25% in petcoke price. The Company took advantage of the situation by altering its fuel mix. Even though the diesel prices remained stable, inbound logistic costs increased due to higher maintenance cost, limited availability of trucks etc,. We identified new suppliers & contractors, participated in online biddings, developed alternatives for OEMs and carried out various works inhouse to reduce costs. Your company also implemented SAP Ariba buying which has transformed traditional procurement into digital sourcing.

Digitalization has become an integral part to our civilization and therefore business cannot remain an exception. At HeidelbergCement, we have continued to implement digitalization programs at our manufacturing processes, sales and marketing, Finance, Procurement, Human Relations department, Compliance tools etc., with a view to augment efficiency and reduce human errors.

In view of aligning with the Group's goal of Carbon Net Zero, the Company endeavours to reduce dependency on conventional fuels by increasing usage of Alternative Fuels to replace fossil fuels. With continuous investment in technology and modifications, your company achieved TSR (Thermal Substitution Rate) of 8% against 6% in 2023 with an ambitious target of 45% by 2030. Towards sustainability, we are ensuring uninterrupted supply of Flyash with 100% flyash based PPC cement reducing clinker incorporation to that extent. We are also using other byproducts such as Redmud and slag both of which are engineering waste and byproducts of other industries possessing cementitious qualities.

The cement industry is highly competitive, with companies constantly devising strategies to differentiate their products and grab the attention of customers. Although our 'mycem' brand holds a valued reputation, we felt it necessary to amplify its distinct selling points more effectively. Against this backdrop, we strived for establishing a sharper identity and effectively communicating our values and strengths to customers. Accordingly, we embarked on a brand refresh programme which was driven by rigorous market research and expert insights. As a result of all these efforts we have developed a new brand identity which harnesses on the perception of strong German quality and rich legacy of 150 years of Heidelberg Materials Group. The new brand identity has enabled us to differentiate our value proposition in the eyes of consumers and ensure that our brand achieves prominent top-of-mind recall among customers.

Alongside the brand refresh, we also launched a new sales and marketing excellence project called 'Project Rise' which is a progressive initiative aimed at increasing sales volume and improving price positioning through sales excellence. The project targets to improve the market reach, counter loss of market share, enhance service excellence, generate demand, and increase effectiveness of sales force. The benefits derived so far from the brand refresh programme and the'Project Rise' are encouraging.

The Board has recommended dividend of INR 8 per share (80%) for FY24, subject to the approval of the shareholders at the ensuing AGM (Dividend paid during FY23 was INR 7 per share). The proposed dividend for FY24 will absorb INR 1812.9 million. Therefore, in accordance with the provisions of Companies (Declaration and Payment of Dividend) Rules, 2014, the Board has proposed to withdraw an amount of INR 135.4 million from the accumulated profits of the past financial years.

In accordance with the provisions of the Income Tax Act, 1961 the aforesaid dividend will be taxable in the hands of shareholders but liable for Tax Deduction at Source (TDS) by the Company at the applicable rates.

Regulation 43A of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, requires top 1000 listed companies based on market capitalization to formulate a Dividend Distribution Policy. In compliance with the said requirement, the Board of Directors had formulated a Dividend Distribution Policy and the same is posted on the Company's website. The web-link to access the said policy is as follows:

https://www.mycemco.com/sites/default/files/PDF/Policies/HCIL_Dividend_Distribution_Policy.pdf

The respective due dates on which unclaimed amounts of dividends pertaining to the prior years will be transferred to 'Investor Education and Protection Fund' (IEPF), constituted by the Ministry of Corporate Affairs, are given below:

* The Shareholders whose dividend for FY2016-17 has remained unclaimed and have also not claimed the same for seven consecutive years, the unclaimed dividend along with its underlying shares will be transferred to Investor Education and Protection fund (IEPF) Authority.

Your Company believes that cement is the building block of the future and is therefore, transitioning it from grey to green. Our goals and objectives of operating sustainably are aligned with Heidelberg Materials. The dual objective is to not only mitigate the climate change impact but also create opportunities towards achieving future carbon neutrality goals through interventions in energy, raw materials, waste management etc. Through climate protection and greener operations, we ensure long-term environmental, social, and economic sustainability for the company, delivering sustainable value to our stakeholders and ensuring the availability of resources for generations to come.

In our commitment to create greener cement, we have

extended our initiatives beyond conservation and restoration of ecology to include options for rejuvenation. We have assumed responsibility towards reducing our carbon footprint, water positivity, increasing the green cover and maximising usage of alternative fuels. We also promote circular economy by using waste materials and byproducts from other industries as alternative raw materials and fuels. We continuously integrate sustainability principles throughout the entire cement manufacturing process. To accelerate our environmental stewardship efforts, we have defined specific operational goals outlined below with a target to attain them by 2030.

The Company consumed ~34.94% of fly ash in producing PPC cement and ~53.48 % of slag in producing PSC cement. As an alternative raw material, we have used 5.52 % of Red mud, thus reducing limestone consumption, preserving limestone reserves for posterity. During FY24 the Company was plastic negative by 5.24 times.

The Company has made significant progress on the energy transition journey by increasing the use of green energy. During FY24 we have generated 71585 Mega Watt (MW) of power from Waste Heat Recovery Power Plant and 9007 MW of solar power at Damoh, Madhya Pradesh. The Company has initiated AFR feeding system to improve TSR. In our mining operations we lay special emphasis on soil management, pollution control, biodiversity conservation, maintaining water balance, and promoting safe mining practices. Post mining, the land is reclaimed through backfilling and afforestation by planting trees like Rain Tree, Banyan, Arjun, Golden Bamboo, Pilkhan, Neem, Indian Rosewood etc. Some of the mined areas have been developed into large water reservoirs that have become a boon for the villagers since the harvested rainwater not only recharges the ground water leading to significant improvement in water table of the area but also serves their irrigation needs. As a result of these actions, Patharia limestone mines is consistently getting five Star Rating from Indian Bureau of Mines (IBM) ever since the concept of five Star Rating was introduced by IBM.

The Company is committed to make a sustainable impact on the lives of the local communities in the areas where we operate through our commitment to improve education, enhancing rural infrastructure, and providing better healthcare services. By promoting local participation, the company strengthens its bond with local communities for economic and social development. Our approach is to align our initiatives and efforts with other stakeholders like village institutions, gram panchayats and local bodies of government During FY24 the Company has spent INR 62.4 million on various CSR activities / projects exceeding the obligations pursuant to Section 135 of the Companies Act, 2013. The transformation of rural schools in Damoh, Jhansi and Ammasandra in association with the Education Department has always been a top priority. Through this initiative, the basic infrastructure of 12 government schools was upgraded, benefiting over 4,200 students and 75 teachers. Extensive repair and renovation work was carried out in some schools while in few others existing classrooms were upgraded into digital classrooms. Scholarships were given to meritorious students to facilitate their higher education. Educational kits and uniforms were also distributed to students. We are working in close coordination with the District Women and Child Development Departments of Damoh and Ammasandra to transform Anganwadi centers into model Anganwadi centers. The Company endeavors to bring a sustainable change in the quality of life of neighborhood community. As part of this effort, we have encouraged farmers to adopt natural farming practices. In Jhansi, we successfully motivated 50 farmers to transform to natural farming methods. We believe in entrepreneurial ability of rural youth and endeavor to make them self-reliant by developing their skills. Quality training that covers various areas of trade is tremendously beneficial. To guarantee this, we have partnered with the 'Centre for Entrepreneurship Development (CEDMAP)' supported by the Madhya Pradesh Government. These courses develop skills in many fields, like beautician, sewing and stitching, computer operations, motor driving etc. These courses are run on a regular basis, and participants are enrolled for three-months certificate course. These courses are being conducted at our skill development centers known as "Sakshamta Vikas Kendras" in Jhansi and Damoh. During FY24, training was imparted to 260 rural youth.

We organize health check-up camps at regular intervals to meet communities' general and specific needs. Under our healthcare program, our mobile medical van team has regularly organized rural healthcare camps. The Company persistently helps in advancement of infrastructure surrounding its plants and mines. This includes construction of durable concrete roads, efficient drainage systems, access to clean drinking water, installation of solar lights and high mast lights, establishment of cremation grounds, community centers, and the development of a versatile playground, among other initiatives.

The Report on CSR activities in the format prescribed by the Ministry of Corporate Affairs is annexed herewith as 'Annexure A'.

Occupational health and safety is a core value for our Company and safety is at the center of everything that we do. The day at the plants begins with safety gate meetings wherein important safety aspects are discussed along with safety prayer and pledge. We believe that it's the “Smiles that will take us Miles”.

Safety conversations and safety zones are used for employee engagement and nurturing safety culture in all aspects of operations. Safety zones have been created at all plants with cross functional teams.

The Heidelberg Materials Group's cardinal norms, guidelines, standards, and legal requirements along with stipulations under ISO 45001 - Occupational Health and Safety Management System are being adhered to at the plants. Employees were imparted with safety induction trainings, refresher courses and job specific trainings like scaffolding safety, working at height and in confined space etc.

National Safety week was celebrated from 4th -11th March 2024 in a grand manner across all plants to improve the safety awareness. A schedule of twenty-four most critical safety hazards relevant to the cement industry were compiled. Each month, a safety theme is taken up and its key aspects are deliberated so as to ingrain the importance of the activity and build a conscious driven safety culture in the organization. Truck Drivers were also imparted training on defensive driving techniques. Monitoring of the workplace for noise, particulate matter, free silica and illumination level is being done as per the regulatory norms. All plants are ISO 45001 certified.

The Company continues to pursue excellence in all areas of its operations as evident from the recognition in the form of awards and honours.

1 Imlai plant was conferred with fly ash utilisation award from Mission Energy Foundation.

2 The Ammasandra Plant received “Certificate of Appreciation” for maintaining zero failures for Portland Slag Cement from Bureau of Indian Standards, Bengaluru.

3. Damoh unit got the Prestigious Golden Peacock Occupational Health & Safety Award during the 'Institute of Directors' 25th International Conference on Environment Management & Climate Change.

4. Jhansi unit won the CII's National Award for Excellence in Energy Management for 2023. The unit has won this award for 8th consecutive year.

5. Diamond Patharia Limestone Mines has been conferred 5 star rating consecutively for 8 years since the inception of the award in 2015-16. The prestigious award was presented Shri G. Kishan Reddy, Hon'ble Minister for Coal and Mines, GOI and Shri Satish Chandra Dubey, Hon'ble Minister of State for Coal and Mines, GOI.

6. Jhansi Unit received the Bhamashah Award from the State Tax Department & Cultural Department of Uttar Pradesh for being the highest tax-paying industry in Jhansi division.

CORPORATE GOVERNANCE

The essence of Corporate Governance lies in promoting and maintaining integrity, transparency, and accountability. The Company believes in creating and nurturing relationships based on trust and transparency with all its stakeholders. The governance framework enjoins the highest standards of ethical and responsible conduct. All Directors and employees consider governance as their personal responsibility and conduct themselves in accordance with the Code of Conduct set out by the organization.

The Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 have reinforced the governance regime in India. The Company is compliant with the corporate governance requirements as prescribed under the said Regulations. The Company has also ensured compliance with applicable Secretarial Standards issued by the Institute of Company Secretaries of India pursuant to Section 118(10) of the Companies Act, 2013.

In terms of Regulation 34(3) read with Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a Corporate Governance Report pertaining to FY24 forms part of this Annual Report. Pursuant to the provisions of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a certificate from M/s. Nityanand Singh & Co., a firm of Company Secretaries in Practice, confirming compliance with the conditions of Corporate Governance is also annexed to the Corporate Governance Report. A certificate furnished by Mr. Joydeep Mukherjee, Managing Director and Mr. Anil Kumar Sharma, Chief Financial Officer in respect of the financial statements of the Company for the financial year ended 31 March 2024 is annexed as ‘Annexure-B' to this Report.

Management Discussion and Analysis Report is also given as an addition to this Report.

Business Responsibility and Sustainability Report (BRSR), as stipulated under Regulation 34(2)(f) of SEBI Listing Regulations, describing the initiatives taken by the Company from Environment, Social and Governance (ESG) perspective forms part of this Annual Report.

DIRECTORS

Mr. Joydeep Mukherjee (holding DIN-06648469) was appointed as Managing Director of the Company for a term of three years from 01 April 2023 to 31 March 2026. His appointment was also approved by Shareholders by passing resolution on 27 April 2023 through postal ballot.

The Board of Directors of the Company appointed Mr. Atul Khosla (holding DIN-06476856) as an Additional Director in the category of Non-Executive Independent Director, with effect from 06 November 2023. His appointment was also approved by Shareholders for a term of five years from 06 November 2023 to 05 November 2028 by way of passing a special resolution on 12 January 2024 through postal ballot.

Mr. Ramakrishnan Ramamurthy ceased to be Chairman & Non-Executive Independent Director of the Company with effect from close of business hours on 11 February 2024 consequent to end of his five-years term. The Board places on record its appreciation for the valuable guidance and contributions made by Mr. Ramakrishnan Ramamurthy.

The Board of Directors has appointed Ms. Jyoti Narang, Non-Executive Independent Woman Director as Chairperson of the Board with effect from 12 February 2024 in place of Mr. Ramakrishnan Ramamurthy.

Mr. Kevin Gerard Gluskie (holding DIN: 07413549) resigned from the position of Non-Executive Director of the Company with effect from close of business hours on 13 March 2024 on account of end of his employment contract with Heidelberg Materials Group. The Board places on record its appreciation for the valuable guidance and contributions made by Mr. Gluskie.

The Board of Directors of the Company appointed Mr. Roberto Callieri (DIN-05139888) as an Additional Director in the category of Non-Executive Director, with effect from

14 March 2024. His appointment was also approved by Shareholders by way of passing an ordinary resolution on 26 April 2024 through postal ballot.

Mr. Vimal Kumar Jain, Whole-time Director retires by rotation at the ensuing AGM and being eligible has offered himself for reappointment. His brief profile is given in the Notice of AGM. The Board hereby recommends his reappointment.

Declaration of Independent Directors

Ms. Jyoti Narang and Mr. Atul Khosla, Independent Directors on the Board have submitted declarations to the Company that they fulfill the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and Regulation 16 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The Board of Directors, based on the declarations received from the Independent Directors after duly verifying the veracity of such declarations, hereby confirms that the Independent Directors fulfill the conditions of independence specified in the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and are independent of the management of the Company.

Number of Board Meetings: During FY24, five Board Meetings were held. The details of the same are given in the Corporate Governance Report.

Composition of Audit Committee: The Audit Committee of the Company as on 31 March 2024 comprised of three members namely, Mr. Atul Khosla (Chairman of the Committee), Ms. Jyoti Narang and Ms. Soek Peng Sim. Board Evaluation: In accordance with the provisions of the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board has carried out an annual evaluation of its own performance, that of the directors individually and that of all the Committees constituted by it, namely, the Audit Committee, Nomination and Remuneration Committee, Corporate Social Responsibility Committee, Stakeholders Relationship Committee and Risk Management Committee. The manner in which the performance evaluation has been carried out has been explained in the

Corporate Governance Report.

Policy for appointment and remuneration of directors: The Board has on the recommendation of the Nomination and Remuneration Committee, formulated a Nomination and Remuneration Policy. The policy inter alia lays down the criteria for determining qualifications, attributes and independence of potential candidates for appointment as directors and determining their remuneration. The salient features of the Policy have been provided in Corporate Governance Report. The said Policy has been posted on website of the Company and the weblink to access the said

policy is as follows:

https://www.mycemco.com/sites/default/files/PDF/Policies/Nomination_and_Remuneration_Policy.pdf

The Board has also adopted a ‘Board Diversity Policy‘ which requires the Board to ensure appropriate balance of skills, experience and diversity of perspectives in its own composition.

Annual Return: The Annual Return of the Company for FY23 already filed with the Ministry of Corporate Affairs (MCA) as well as the draft Annual Return for FY24 (which will be filed with MCA after the ensuing AGM) are available on the website of the Company and the weblink to access

the same is as follows:

https://www.mycemco.com/financial-results

After the filing of Annual Return for FY24 with MCA, the aforesaid draft version of the Return will be replaced with the final version.

Key Managerial Personnel: Details of Key Managerial

Personnel of the Company are given below:

Mr. Joydeep Mukherjee, Managing Director (with effect from 01 April 2023);

Mr. Vimal Kumar Jain, Whole-time Director;

Mr. Anil Kumar Sharma, Chief Financial Officer;

Mr. Rajesh Relan, Sr. Vice President- Corporate Affairs & Company Secretary*; and

Mr. Ravi Arora, Vice President- Corporate Affairs & Company Secretary**.

*Mr. Rajesh Relan vide letter dated 12 April 2024 has resigned from the position of Company Secretary & Compliance Officer. The Board at its meeting held on 29 May 2024 has accepted his resignation and decided to relieve Mr. Relan from the position of Company Secretary and Compliance Officer of the Company with effect from the close of business hours on 17 June 2024.

**The Board of Directors at its meeting held on 29 May 2024 has appointed Mr. Ravi Arora as Company Secretary & Compliance Officer of the Company with effect from 18 June 2024.

During FY24, the Company has acquired 92,76,800 equity shares of Continuum MP Windfarm Development Private Limited (CMWDPL) constituting 4.57% of the paid-up equity share capital of CMWDPL for the purpose of procuring around 08 Megawatt hours per annum of hybrid power (solar+wind) for Damoh plants on group captive basis. The Company has not given any loan, guarantee or security pursuant to the provisions of section 186 of the Companies Act, 2013.

The details of Outstanding Loans and Investments made by the Company as on 31 March 2024 are given in Notes to the financial statements.

General: The Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions with respect to these items during FY24:

Details relating to deposits covered under Chapter V of the Companies Act, 2013.

Issue of equity shares with differential rights as to dividend, voting or otherwise.

Issue of stock options or sweat equity shares.

No significant or material orders were passed by the Regulators or Courts or Tribunals impacting the going concern status and the Company's operations in future.

The Company has in place relevant internal controls, policies, and procedures to ensure orderly and efficient conduct of its business. Standard Operating Procedures (SOPs) and Risk Control Matrix (RCM) have been designed for critical processes across all operations. The internal financial controls are tested for operating effectiveness through management's ongoing monitoring and review processes, and independently by the internal auditors. In our view the internal financial controls are adequate and are operating effectively.

To the best of their knowledge and belief and according to the information and explanations obtained by them and based on the assessment of the management, the Board of Directors makes the following statements in terms of Section 134 of the Companies Act, 2013: (a) that in the preparation of the annual accounts for the financial year ended 31 March 2024 the applicable accounting standards have been followed along with proper explanation relating to material departures, if any; (b) that such accounting policies have been selected and applied consistently and judgments and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31 March 2024 and of the profit of the Company for the financial year ended on that date; (c) that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; (d) that the financial statements for the financial year ended

31 March 2024 have been prepared on a ‘going concern' basis; (e) that proper internal financial controls were in place and that such internal financial controls were adequate and were operating effectively; and (f) that systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.

RELATED PARTY TRANSACTIONS

All transactions entered between the Company and its

related parties during the financial year ended 31 March

2024 were in the ordinary course of business and on an arm's length basis. The particulars of such transactions have been disclosed in notes to the financial statements for FY24. During the year under review, the Company has not entered in any related party transaction exceeding the threshold limit provided under the Companies Act, 2013 / Rules made thereunder and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. Omnibus approvals are obtained for the transactions which are foreseeable and are repetitive in nature. A statement of all the related party transactions is placed before the Audit Committee on a quarterly basis, specifying the nature and value of the transactions. The Company has in place a Policy on Related Party Transactions and a framework for the purpose of assessing the basis of determining the arm's length price of relevant transactions. The said policy and the framework are reviewed by the Audit Committee and the Board of Directors from time to time. The same have been posted on the Company's website. The web-link to access the said policy and framework is as follows:

https://www.mycemco.com/sites/default/files/PDF/Policies/Related_Party_Transaction_Policy.pdf

The Board of Directors of the Company has constituted a Risk Management Committee for reviewing and monitoring the risk management plan of the Company and ensuring its effectiveness. The business risks have been classified under the broad heads - strategic, operational, financial, and legal & compliance risks. The Company's Risk Management Policy lays down a bottom-up process comprising risk identification, analysis and evaluation, treatment and controlling. The Chief Risk Officer and the Risk owners identify and analyse risks in their area of operations. The risks faced by the Company, their impact and the mitigation measures are categorised as high, medium and low risks which are then reviewed by the Senior Management and the critical ones are placed before the Risk Management Committee/Board of Directors for review.

The Board provides oversight and reviews the Risk Management Policy. The Board along with Risk Management Committee is responsible for framing, implementing and monitoring the risk management plan of the Company. During the year under review, Internal auditors, had also tested the Risk & Control Matrices for various processes as a part of Internal financial control framework.

The details of the functioning of the Risk Management Committee and frequency of its meetings are provided in Report on Corporate Governance forming part of this Annual Report.

The Company has established a vigil mechanism / whistle blower policy to deal with the instances of unethical behaviour, fraud, conflict of interest, mismanagement, and violation of the Code of Conduct. During FY24 no complaint was received under the Vigil Mechanism. The details of the vigil mechanism are given in the Corporate Governance Report and a copy of the same has been posted on the Company's website. The weblink to access the same is as

follows:

https://www.mycemco.com/sites/default/files/PDF/Policies/W.e.f.19.10.2021_HCIL_Whistle_Blower_Policy_English.pdf

The Company is compliant with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, which aims to protect women at workplace against any form of sexual harassment and prompt redressal of any complaint. During FY24, no complaint was received by the Company in this regard.

AUDITORS

In accordance with the provisions of Section 139(1) of the

Companies Act, 2013 the members at the 63 Annual General Meeting (AGM) of the Company held on 08 September 2022 had reappointed M/s. S.N. Dhawan & Co. LLP., Chartered Accountants, as statutory auditors of the Company for second term to hold office up to the conclusion of the 68 AGM i.e., for conducting statutory audits commencing from FY23 until FY27.

The observations of the Auditors in their report on Financial Statements read with the relevant notes are self-explanatory. The Independent Auditors' Report does not contain any qualification, reservation or adverse remarks.

The Company is maintaining cost records in accordance with the provisions of Section 148 of the Companies Act, 2013 and the Rules made thereunder. The Cost Audit for FY23 was conducted by M/s. R.J. Goel & Co., Cost Accountants, Delhi. The Cost Audit Report was duly filed with the Ministry of Corporate Affairs, Government of India. The Audit of the cost accounts of the Company for FY24 is also being conducted by the said firm and the Report will be filed within the stipulated time.

In accordance with Section 148 of the Companies Act, 2013 and the Companies (Cost Records and Audit) Rules, 2014, the Board of Directors has on the recommendation of the Audit Committee, appointed M/s. R.J. Goel & Co., Cost Accountants as Cost Auditor of the Company for FY24 on a remuneration of INR 2,75,000. Pursuant to Section 148(3) of the Companies Act, 2013, a resolution seeking member's ratification for the remuneration payable to M/s. R.J. Goel & Co., Cost Accountants for FY25 is included in the Notice convening the AGM. The Board recommends the aforesaid resolution for approval of the members.

SECRETARIAL AUDIT

The Board had appointed M/s. Nityanand Singh & Co., a firm of Company Secretaries in Practice as Secretarial Auditor for carrying out secretarial audit of the Company for the financial year ended 31 March 2024 in accordance with the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. The Report of the Secretarial Auditor is annexed herewith as ‘Annexure-C'.

The Secretarial Audit Report does not contain any qualification, reservation, or adverse remarks.

Secretarial Compliance Report: Under Regulation 24A of SEBI Listing Regulations it is mandatory for listed companies to annually submit a Secretarial Compliance Report to stock exchanges. M/s. Nityanand Singh & Co. has furnished Secretarial Compliance Report for FY24. The said Report does not contain any qualification, reservation, or adverse remarks. The said Report has been filed with Stock Exchanges and has also been placed on website of the Company. The web link to access the same is as under:

https://www.mycemco.com/sites/default/files/PDF/Secretarial_Compliance_Report/HCILAnnualSecretarialComplianceReport_2023-2024.pdf

The particulars of employees required pursuant to Section 197 of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 form part of this Report and are annexed as ‘Annexure-D'. In accordance with the provisions of Section 136 of the Act, the Board's Report and the financial statements for the financial year ended 31 March 2024 are being sent to the members and others entitled thereto, excluding the details to be furnished under Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. However, the information required under aforesaid Rule 5(2) is available for inspection by the members at the Registered Office of the Company during business hours on all working days up to the date of the ensuing Annual General Meeting. If any member desires to have a copy of the same, he may write to the Company Secretary in this regard.

The particulars relating to conservation of energy, technology absorption and foreign exchange earnings and outgo, as required under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules 2014, form part of this Report and are annexed as ‘Annexure-E'.

Your Directors are thankful to all stakeholders including Customers, Bankers, Suppliers, Dealers, and Contractors for their continued assistance, co-operation, and support. The Directors wish to place on record their sincere appreciation to all employees for their commitment and continued contribution to the Company. The Directors are grateful for the confidence, faith and trust reposed by the shareholders in the Company. We are thankful to various agencies of the Central and State Government(s) for their continued support and co-operation.

For and on behalf of the Board