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MANAGEMENT DISCUSSION AND ANALYSIS

Dear Members,

The Directors take pleasure in presenting their 45th Report and Audited Financial Statements of the Company for the financial year 2023-24. Management Discussion and Analysis has also been incorporated into this report.

1. FINANCIAL PERFORMANCE

A brief of financial performance for the year gone by and its comparison with previous year is given below: -

Net revenue from operations grew by 16% from 16,837 Crore in FY 2022-23 to 19,586 Crore in FY 2023-24. This is mainly due to 11.7% increase in sale volume (cement and clinker) from 31.82 million tonnes in FY 2022-23 to 35.54 million tonnes in FY 2023-24.

Key Cost components:

The Company places utmost priority and continuous focus on cost reduction and optimization measures. As a result, the Company is regarded as one of the lowest cost cement producers in the industry.

(a) Raw material cost: Despite inflationary pressures, the procurement cost of various raw materials of the Company was kept within control on account of pro-active procurement strategy and well diversified sourcing. Because of increased volumes, however, the cost of raw material consumed went up to 1,465 crore as against 1,300 crore during the previous year. The Company continued its focus on usage of alternative raw materials and enhanced capacity of using synthetic gypsum.

(b) Power & Fuel: International coal and petcoke prices which saw sharp rise in FY 2022-23 witnessed softening during FY 2023-24. This helped lowering of power & fuel cost of the Company. Accordingly, despite increase in production volume, the power and fuel cost, during the year stood at 5,657 crore against 5,545 crore in previous year. Further, owing to Company's continuous drive of increasing renewable power generation capacity, Company's share of green power in total power consumption increased to 55.9% during 2023-24 compared to 51.1% in the previous year thereby helping reduce power cost of the Company and improve its green footprints. For increasing its share of alternative fuels and reducing reliance of fossil fuels, the Company is in the process of installing state of art Shredder Machines at its facilities which will help increase consumption of alternative fuels.

(c) Logistics Cost: Relatively lower prices of diesel during the year 2023-24 and root optimization measures helped the Company contain the logistics cost.

Despite an increase of 11.7% in sales volumes, the logistics cost went up by 8% only from 3,733 Crore to 4,032 Crore.

The Company is actively working on the development of new railway sidings by investing significantly near its various plants for rationalizing freight cost & building alternate transportation capabilities. Also, the Company is implementing various digitization tools to augment efficiency in supply chain and reducing logistics cost by rationalizing routes and lead distances.

Overall, owing to lower power & fuel costs and logistics costs coupled with volume growth, the Earnings Before Interest, Depreciation and

Tax (EBITDA) for FY 2023-24 increased to 4,925 Crore compared to 3,374 Crore in 2022-23 which is the highest ever delivered by the Company.

Key Financial Ratios

Key financial ratios showing the financial performance of the Company are as under:

2. DIVIDEND AND RESERVES

The Board of Directors, during the FY 2023-

24, declared an Interim Dividend of 50/- per share and has recommended a Final Dividend of 55/- per share for year 2023-24. The total dividend for FY 2023-24 aggregates to 105 per equity share. During the year 2022-23, the Company had paid aggregate dividend of

100/- per share.

The Board of Directors do not propose to transfer any amount to the Reserves for the year 2023-24.

The Board of Directors of the Company in line with provisions of Regulation 43A of Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (as amended) had approved Dividend Distribution Policy on 12th August, 2016. The policy is available on Company's website and can be accessed at the link https:// www.shreecement.com/investors/disclosure-regulation.

3. SIGNIFICANT DEVELOPMENTS DURING THE YEAR

During the year, the Company embarked upon a comprehensive re-branding program to help it build a differentiated positioning and win consumers delight. The Company initiated a major initiative of revamping its brand identity with ‘Bangur Cement' as the master-brand.

The new Bangur brand has been implemented with a new brand identity through a new logo and pack graphics along with a new premium product launch – Bangur Magna.

The new Bangur brand reflects the

Company's commitment to innovation, quality and customer satisfaction. The unveiling of the Company's new brand identity is an articulation of the Company's intent to market and sell all variants of cement, viz. OPC, PPC and PSC, across all its geographical territories under the revamped ‘Bangur' brand.

During the year, the Company ventured into Ready Mix Concrete business, marking its entry into a promising new line of business. Driven by India's growth momentum and the concerted efforts of Government to create advance infrastructure projects as well as burgeoning urban housing sector, RMC business holds vast potential.

The Company aggressively plans to expand its presence in this market by building new units as well as acquiring existing plants. As part of this strategy, in March 2024, the Company entered into a binding agreement for acquiring five operational plants of StarCrete

LLP in Mumbai Metropolitan Region for a consideration of 33.5 Crore. The transaction is expected to be completed by September 2024.

The Company also commissioned its first greenfield Ready Mix Concrete plant of 90 cubic meter per hour capacity in Hyderabad in March 2024. Together with the capacity acquired, the Company's combined RMC capacity currently stands at 512 cubic meters per hour. The Company has plans to set up ~100 Ready Mix Concrete plants in the next 3 years, operating in ~50 cities.

III. Survey by Income Tax authorities

In June 2023; Income Tax authorities conducted survey u/s 133A of the Income Tax Act, 1961 at premises of the Company. During the survey, the Company and its officials extended full cooperation to the authorities and provided the requisite clarification and details. Post completion of the survey proceedings, the Company has received notice(s) from the Income Tax Department for re-opening of the assessment of previous years. The Company is taking all necessary actions by providing necessary responses to the notices to protect its interest.

4. MANAGEMENT OUTLOOK OF MACRO ECONOMY AND INDUSTRY

I. Indian Economy-Developments and Outlook

The fiscal year 2023-24 economy has been another year of stellar performance. Indian economy is estimated to achieve a robust growth of 7.6% during FY 2023-24 over and above 7.0% and 9.1% growth rate realized in FY 2022-23 and FY 2021-22 respectively. Considering geopolitical headwinds, high interest rates and volatile commodity prices, the economic performance is considered commendable. Today, India is reckoned as one of the best performing economies reflecting its bright economic stature in the global economic landscape.

The continued buoyancy in the economy is driven by high domestic demand, rising government capital expenditure, supportive policy environment and healthy investment flows. The strong economic performance and macroeconomic stability has also led to buoyancy in tax collections resulting in more room for Government to spend money on development activities (India's net direct tax collections for FY 2023-24 saw a 17.7% rise). Overall, the economy is witnessing high levels of business and consumer confidence.

The manufacturing sector registered double-digit growth in FY24 driven by a surge in investment, improved investor confidence and strong domestic demand conditions. The strength of the manufacturing sector is also underscored by the India manufacturing PMI (Purchasing Managers' Index), which in March 2024 rose to 59.1, the highest level since February 2008. Due to conducive economic policies, larger macroeconomic stability, continued push for reforms and stable government, there has been immense improvement in credibility of India's economy, driving foreign investment in the country. Further, a notable development regarding the expected addition of the country's sovereign bonds to global bond indexes in 2024-25 shall help boost liquidity, contain interest rates and drive economic activities. The Indian economy seems to be in a sweet spot with healthy growth, moderating inflation, strong FII inflows and healthy corporate and banks' balance sheets and thus the outlook going forward looks promising. The year 2024-25 has started with a positive development as IMD has forecast bountiful rains with good geographical spread during the year. As a result, India will likely reap a bumper harvest propelling overall economic growth and easing inflation. The pace of growth may be slow in the year 2024-25 due to the extended general election period. The new government assuming office in June 2024 is however expected to gain traction once again and carry the growth momentum forward. Overall, India looks poised to deliver strong growth in FY 2024-25.

II. Cement Industry – Development and Outlook

During the year 2023-24, cement demand is estimated to have grown at a robust

10-12% to 442-447 Mn tonnes. This is after registering a healthy ~12% growth in the year 2022-23. Favorable demand conditions helped utilization levels inch up to 71-73%, after having touched to ~69% in FY23.

The solid growth witnessed over the last two years is directly attributable to the government's thrust to boost infrastructure development, rapid urbanization and overall buoyant housing demand. General Elections ensured that the thrust to achieve set targets under Government Housing Schemes are achieved, especially in rural housing segment, which witnessed strong demand from "Pradhan Mantri Awas Yojana – Gramin". Consistent favorable demand conditions and push to gain market share have triggered a wave of capacity addition announcements by the cement manufactures. In FY24, industry is estimated to have added ~45 MTPA of new cement capacity taking the overall installed capacity to ~641 MT.

Cement industry has benefited during FY24 with easing input costs. International coal / imported prices, which had witnessed quarter of a sharp rise during FY23 dropped during the year. As a result, the power & fuel cost, which forms a sizable cost of the cement industry also witnessed declining trend. Coupled with this, the positive operating leverage helped industry improve operating margins during the year.

Going into FY 2024-25, the demand outlook for cement industry continues to be strong as structurally all demand drivers viz. infra, housing, and private capex show positive direction. Growth in Infrastructure development spending is expected to continue with government focusing on its flagship schemes, such as PM Gati Shakti,

National Infrastructure Pipeline and rising investments in roads, railways, metros, airports, and irrigation projects. This will continue to drive healthy infrastructure-led demand growth. Government Impetus to PLI scheme and Atmanirbhar Bharat, focus on multimodal logistics, warehousing, etc. are expected to support demand from the industrial segment. On the housing demand, the entire real estate sector is witnessing a demand revival. This apart, Government focus on housing for all and increasing outlays for PMAY scheme indicates strong demand growth for cement from housing segment. All in all, the outlook for cement demand looks promising.

Data source: CRISIL research and Company estimates

5. NEW/EXPANSION PROJECTS

The Company has an unwavering commitment and focus to contribute to India's growth by continuously expanding capacity faster than the industry with an emphasis on organic growth. The Company has increased its cement production capacity by 9.50 million tonnes by commissioning 3 new green field plants with an investment of over 7,000 Crore as below:

During the year, the Company also undertook capacity up-gradation work of clinker unit in Kodla Karnataka to enhance its capacity from 2.40 MTPA to 3.50 MTPA in February 2024 through process optimization, de-bottlenecking and productivity enhancement initiatives. Further the Company also commenced work of setting up new project sites as below:

6. RISK MANAGEMENT

Recognizing the fact that every business is subject to risks that needs timely intervention and management, the Company's risk management process is designed to identify and mitigate risks that have the potential to materially impact its business objectives. It also maintains a balance between managing risks and making the most of the opportunities. The Board is responsible for overseeing the overall risk management framework of the Company. The Risk Management Committee of the Board keeps an eye on execution of the risk management plan of the Company and advises the management on strengthening mitigating measures wherever required. The actual identification, assessment and mitigation of risks are however done by respective management teams of the Company in a systematic manner. The risks are prioritized according to their significance and likelihood of occurrence. Risks having high likelihood and high significance are classified as ‘key risk'. The key risks identified by the Company and their mitigation measures are as under:

7. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The internal control system includes the policies, processes, tasks, behaviors and other aspects of the Company, which when combined, facilitate effective and efficient operation, quality of internal and external reporting, compliance with applicable laws and regulations. The Company has put in place adequate internal control systems commensurate with its size of operations. Company's internal control systems include policies and procedures, IT systems, delegation of authority, segregation of duties, internal audit and review framework, etc. The Company has laid down internal financial controls and systems with regard to adherence to Company's policies, safeguarding of its assets, prevention and detection of frauds and errors, accuracy and completeness of the accounting records and timely preparation of reliable financial information. The framework is in compliance with the requirements of the Companies Act, 2013 and best industry practices. The Company periodically assesses design as well as operational effectiveness of its internal controls across multiple functions and locations through extensive internal audit exercises.

For carrying out internal audit, Company has an experienced in-house team manned by professionals who collectively possess the necessary skills, technical knowledge, objectivity and understanding of the Company, industries and markets in which it operates. Further, to improve and strengthen processes, the Company has appointed professional external agency for conducting internal audit/ review of all the operational locations of the Company. Such external agencies bring in their domain expertise for optimization and improvement of various business processes which can then be replicated throughout the organization.

Based on the assessment and observations of internal audit, process owners undertake corrective action in their respective areas of operations, and thereby strengthen the processes and controls. Significant audit observations and corrective actions thereon are presented to the Audit Committee of the Board on a periodical basis. The Audit Committee evaluates the adequacy and effectiveness of internal financial control systems periodically.

8. HUMAN RESOURCES / INDUSTRIAL RELATIONS

In the last year, the Company added new capacity, marked its presence in new geographies with commissioning of integrated and grinding units, started new business lines, and undertook a major brand revamp with the philosophy ‘Build Smart'.

A change of this magnitude with such a momentum could be achieved with collective efforts of the Company's team members guided in one direction. To enable this, the Company has been working towards building its people processes and policies on five principles:

Lean and agile: An organisation design that enables absolute accountability and fast decision making.

Cost effective: Reduce redundancies to minimise fixed and

Meritocratic and transparent: Build frameworks that gives opportunities to all and enable open communication.

Empowered and accountable: Enable information flow and responsibility till the last mile.

Continuous learning and innovating: A culture that promotes questioning existing practices and building new ones.

All of this sums up in an organisation wide project ‘WeLead' – a movement to build an organisation that creates value for all its stakeholders. Notable highlights and achievements of this year are:

Efficient organisation design: Revised organisation design with addition of new departments to enable increased focus in certain areas and alignment of pre-existing departments.

Performance Management System: A new performance management process to enable clear accountability, objective measurement and rewards.

A young leader program launched:

A leadership programme with fresh recruits from campus launched to fuel the manpower required for the Company's rapidly expanding business and to build a leadership pipeline for the organisation. All of these steps are directed towards building a Future Ready organisation that is prepared to

‘Build Smart'.

During the year, the Company was also recognised among India's Top 25 Best Workplaces in the Manufacturing and among the Best Work places in the Cement and Building Materials sector for the 5th consecutive year, by Great Place to Work, India. Company's Chairman, Mr. Hari Mohan Bangur was also recognised among India's Most Trusted Leaders by Great Place to Work India. Industrial Relations: Company considers its employees as its biggest asset. The Company, therefore, has always strived to build healthy relationship with them and resolve issues through dialogue and discussions. As a result, employee relations remained cordial during the year. Total number of employees as on 31st March, 2024 were 7,073.

9. OCCUPATIONAL HEALTH AND SAFETY

Following a ‘Safety First' approach, health and safety is a top priority area of the Company. Company has built a robust safety operatingcosts. management system based on the globally recognized and practiced OHSAS 18001 standard to institutionalize the organisation-wide focus on Occupational Health and Safety.

Safety Committees have been formed at all manufacturing units with equal representation from both management and non-management categories. These committees play a pivotal role in achieving the objective of ‘Safety First' by undertaking assessment of safety issues on an ongoing basis and implementing suitable initiatives and programs for the same. To transform the way workers' look at safety and make them aware and adopt best practices related to safety, these Committees periodically organise online and offline trainings, mentoring and coaching with the help of internal and external safety experts. This has helped bringing about a consistent positive change to the workers' safety performance. Such interactions are also helping the plant level safety committees get feedback from workers and thereby identifying hazards and minimise the recurrence of the same. The Company has established a structured hazard identification and risk assessment process which helps it to identify potential risks which could have resulted in production disruptions and liabilities.

To provide its employees and contractual workers access to quality and instant healthcare services, Company has established ‘Wellness Management Centres' (WMC) at all its major plant locations. WMCs are equipped with qualified doctors and facilities which help carry out day to day healthcare services and also conduct annual health check-ups for employees & contract workers. Health talks by experts and specialists are also organised to propagate awareness on chronic and lifestyle diseases.

All safety initiatives and employee engagement programs have been designed to ensure their continuous review and monitoring. Through a regular internal audit protocol, the Company assesses the overall safety performance and examines the existing procedures, systems and control measures for fire & safety hazards.

Observations and recommendations are implemented by concerned departments within set timelines. As part of the process, monthly safety performance of all grinding units are reviewed and discussed with all safety professionals for implementation of common safety system and practices.

10. SUSTAINABILITY

The Company has integrated sustainability as a fundamental component of its business model. With prime focus on environmental conservation, preservation of natural resources and enhancing resource use efficiency, the company actively promotes the sustainability as a core strategy. Initiatives and developments undertaken by the Company in this regard are as under:

a) Increasing use of power from green sources:

The Company maintained its leadership position in utilizing green electricity (Waste Heat Recovery, Wind and Solar) within total electricity consumption.

It significantly increased its green power capacity to 480.3 MW in FY 2023-24 from 385.6 MW in FY 2022-23, raising the share of green energy in total energy consumption to 55.9% from 51.1% the previous year. Additionally, the Company has identified new renewable energy projects at various locations which are under installation / pre-project implementation activities to further boost its share of green energy for meeting its captive requirement. The Company also continues to have the best operational efficiency of waste heat recovery systems within the industry.

b) Partnering with RE100 initiative: In March 2024, the Company became member of the RE100 initiative, a global initiative led by Climate Group, advocating for businesses to convert to 100 percent renewable electricity for all their operations. As part of this initiative, the Company has committed to using 100 percent renewable electricity by 2050. The Company has already increased its renewable power generation capacity over last few years and have further lined up investments to augment the same.

c) Energy Conservation: Energy conservation is a top priority for the Company, driving numerous innovations and initiatives over the years, ranging from shop-floor experiments to large capital expenditures. These efforts have resulted in multiple benefits, including avoiding carbon emissions and rationalization of production costs. Details on energy conservation initiatives are enclosed at Annexure – 3 and forms part of this report. The Company has consistently overachieved its targets in PAT Cycles and has been honoured with the ‘Best Performer' award for achieving the highest number of energy-saving certificates in both PAT Cycle I and PAT Cycle II by the Bureau of Energy Efficiency.

d) Alternative Fuels: The Company has made significant investments to enhance the utilization of alternative fuels in its operations. Alternative fuels comprise of hazardous waste from various industries, Municipal Solid Waste (MSW) as Refuse Derived Fuel (RDF) and biomass waste such as crop residue. This helps reduce reliance on fossil fuels. With a focus on enhancing the consumption of biomass, the Company replaced of more than 352.15 billion kCal heat from fossil fuel using agro waste (crop residue) during the FY 2023-24 against 308.75 billion kCal in the FY 2022-23.

Company achieved a TSR of 2.37% within its kilns during FY 2023-24 and has stepped up its efforts to substantially enhance the TSR in upcoming years.

e) Alternative Raw Material: The Company is utilizing synthetic gypsum being produced captively to replace the consumption of mineral gypsum. The Company has been making constant efforts to enhance proportion of blended cement in its overall production so as to increase usage of fly ash and GBF Slag and thereby, reduce use of clinker to save natural resources such as limestone and fossil fuels. The Company's alternative raw material consumption stood at 11.39 MMT making up to 24.41 % within total raw material consumption during FY 2023-24.

f) Green products: The Company produces blended cement, including Portland Pozzolana Cement (PPC), Portland Slag Cement (PSC), and Composite Cement (CC), adhering strictly to specified BIS norms.

Blended cement reduce the consumption of natural resources like limestone, lowering greenhouse gas emissions, and contributing to a circular economy by utilizing waste materials from power, iron and steel plants. In FY 2023-24, blended cement accounted for 73.52% of the total cement production. The Company's blended cement products and Autoclaved Aerated Concrete (AAC) blocks have been certified by Greenpro Ecolabel, confirming to lower environmental footprint of these products, compared to other such products available in the market.

g) Carbon Emissions: The Company has set Science Based Targets to reduce its carbon emissions. To achieve the same, the Company's efforts are directed towards reduction in energy consumption, increasing green electricity consumption (including WHR, solar and wind), use of alternate fuels to substitute fossil fuels and higher production of blended cement.

h) Water Conservation: Water is a precious natural resource and therefore Company gives it utmost importance. Company's approach to water management includes optimization of its water consumption, treatment and recycling of wastewater and increase in availability of usable water through rainwater harvesting and recharging. The Company's initiatives to minimize its water consumption including installation of Air-Cooled Condensers in its thermal power plants and the establishment of Waste Heat Recovery based power plants have been highly successful. Rainwater harvesting structures constructed by the Company around all its operating facilities and within the community helps capture rainwater and recharge ground water aquifers. Further, the company uses its non-operational mine pits for collecting rainwater. 100% wastewater is recycled within plant operations for use within horticulture activities, mill spray, synthetic gypsum plant, dust suppression etc. after appropriate treatment as required. Sewage Treatment Plants are installed at all locations for treating domestic wastewater. Other optimization measures include water conservation through regular water audits, usage of water sensors & fixtures, drip irrigation for horticulture activities, water sprinklers for dust suppression etc.

These initiatives help increase water availability and reduce dependence on natural fresh water sources including ground water. The Company has utilized treated sewage water from municipalities at several water stress locations, which is used for manufacturing operations and other purposes. As a result of these efforts, the Company is now more than 7 times water positive.

i) Environment, Social and Governance Reporting: The Company is publishing its Environmental, Social and Governance performance annually through its sustainability reports since FY 2004-05. It also disclosed its performance with respect to various Business Responsibility principles as part of Business Responsibility Report (BRR) via annual report as part of its Annual Report, since FY 2012-13. In FY 2021-22, the Company released its

Integrated Annual Report, which included ESG disclosures based on GRI and other relevant guidelines. The Company has also published detailed disclosure on Business Responsibility principles through Business Responsibility and Sustainability Report (BRSR), as part of the Integrated Report since FY 2022-23.

j) ESG Rating: The Company actively participates in various external rating activities including those conducted by Dow Jones Sustainability Index (DJSI), CDP Climate Change and CDP Water Security. In FY 2022-23, the Company demonstrated significant improvement in its DJSI score, increasing from 53 to 62 compared to the previous year. This improvement underscores the Company's dedication to sustainability and its ongoing efforts to enhance environmental, social, and governance practices. During FY 2023-24, the Company has retained its leadership position in the CDP Climate Change, reaffirming its strong performance in mitigating climate risks and reducing carbon emissions. These ratings provide a platform to share best practices, driving collective progress towards sustainability goals within and across industries.

11. CORPORATE GOVERNANCE

Your Directors reaffirm their continued commitment to good corporate governance practices. During the year under review, Company was in compliance with the provisions relating to corporate governance as provided under the Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (as amended).

The compliance report is provided in the Corporate Governance section of this Annual Report. The Auditor's Certificate on Corporate Governance is enclosed at Annexure - 1.

12. BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT

In terms of Regulation 34 of Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (as amended) read with relevant SEBI Circulars, Company is releasing Business Responsibility and Sustainability Report (‘BRSR') as part of this Annual Report covering new reporting requirements on ESG parameters. The BRSR seeks disclosure on the performance of the Company against nine principles of the ‘National Guidelines on Responsible Business Conduct' (‘NGRBCs').

13.CORPORATE SOCIAL RESPONSIBILITY

In terms of the provisions of Section 135 of the Companies Act, 2013 read with the Companies (Corporate Social Responsibility Policy) Rules, 2014, the Board of Directors of the Company has constituted a Corporate Social Responsibility Committee viz. CSR and Sustainability Committee, chaired by an Independent Director. The major CSR thrust areas of the Company include healthcare, education, women empowerment, infrastructure support, integrated rural development, etc. which are aligned to the areas specified under Schedule VII to the

Companies Act, 2013 and integrated with national priorities. During the year 2023-24, the Company has incurred an amount of

51.34 crore on CSR activities in compliance with Section 135 of the Act. The Annual Report on CSR activities of FY 2023-24 with requisite details in the specified format as required under Companies (Corporate Social Responsibility Policy) Rules, 2014 (as amended) is enclosed at Annexure – 2 and forms part of this report. The CSR Policy of the Company may be accessed on website of the Company at https://www.shreecement.com/investors/ policies

14. SUBSIDIARY COMPANIES

The Company has following subsidiaries:

Audited financial statements of the subsidiaries of the Company are available on the website of the Company. The shareholders who wish to receive a copy of the Annual Accounts of the Subsidiary Companies may request the Company Secretary for the same. The policy for determining material subsidiaries as approved by the Board can be accessed on the website of the Company at https://www.shreecement. com/investors/disclosure-regulation Pursuant to section 129(3) of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014, a statement containing salient features of the financial statements of the subsidiary companies in prescribed Form AOC-1 is given in the Consolidated Financial Statements of Company and forms part of this Annual Report.

15. CONSOLIDATED FINANCIAL STATEMENTS

The Consolidated Financial Statements of the Company have been prepared as required in terms of provisions of Companies Act, 2013 and Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (as amended) by following the applicable Accounting Standards notified by the Ministry of Corporate Affairs and forms part of this Annual Report.

16. DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to section 134(5) of the Companies Act, 2013, the Board of Directors of the Company, to the best of their knowledge and belief and according to the information and explanations obtained by them, state that:

In the preparation of the annual accounts for the year ended 31st March, 2024 the applicable accounting standards have been followed and there are no material departures from the same;

They have selected such accounting policies, judgments and estimates that are reasonable and prudent and have applied them consistently so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2024 and of the statement of Profit and Loss as well as Cash

Flow of the company for the year ended on that date;

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;

The annual accounts have been prepared on a going concern basis;

Necessary internal financial controls have been laid down by the Company and the same are commensurate with its size of operations and that they are adequate and were operating effectively; and

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

17. PERFORMANCE EVALUATION OF BOARD, ITS COMMITTEES & INDIVIDUAL DIRECTORS

In terms of requirements of Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (as amended) and provisions of Companies Act, 2013, Nomination cum Remuneration Committee of the Board of Directors of the Company specified the manner for effective evaluation of performance of Board, its Committees and Individual Directors.

Based on the same, the Board carries out an annual evaluation of its own performance, performance of its Committees, Individual Directors including Independent Directors. Company adopted the evaluation parameters as suggested by the Institute of Company Secretaries of India and Securities and Exchange Board of India with suitable changes from Company's perspective. The performance of the Board is evaluated by the Board on the basis of criteria such as Board composition and structure, effectiveness of Board processes, information flow to Board, functioning of the Board, etc. The performance of Committees is evaluated by the Board on the basis of criteria such as composition of Committees, effectiveness of Committee working, independence, etc. The Board evaluates the performance of individual Director on the basis of criteria such as attendance and contribution of Director at Board/Committee Meetings, adherence to ethical standards and code of conduct of the Company, inter-personal relations with other Directors, meaningful and constructive contribution and inputs in the Board/ Committee meetings, etc.

Company appoints an External Facilitator for the purpose of carrying out the performance evaluation in a fair and transparent manner. Structured questionnaires are circulated to Board Members for providing feedback on various parameters (as stated above) including on performance of Board / Committees / Directors, engagement levels, independence of judgment and other criteria. This is followed with review and discussions at the level of the Board.

In a separate meeting of the Independent Directors, performance evaluation of Non-Independent Directors, the Board as a whole and performance evaluation of Chairman is carried out, taking into account the views of Executive and Non-Executive Directors. The quality, quantity and timeliness of the flow of information between the Company Management and the Board, which is necessary for the Board to effectively and reasonably perform their duties are also evaluated in the said meeting.

18. DIRECTORS AND KEY MANAGERIAL PERSONNEL

Mr. Nitin Dayalji Desai (DIN: 02895410) resigned from the position of the Independent Directors of the Company effective from the close of Business Hours on 21st March, 2024, due to his personal reasons. Further, at the time of resignation, he had confirmed that there were no other material reasons for his decision to resign.

The Board of Directors of the Company in its meeting held on 14th May, 2024, on the recommendation of Nomination cum Remuneration Committee appointed Mr. Sushil Kumar Roongta (DIN: 00309302) as an

Independent Director of the Company w.e.f. 14th May, 2024 for a term of 5 (five) consecutive years, subject to approval of the members. In accordance with section 149(7) of the Companies Act, 2013 and Regulation 25(8) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (as amended), each Independent Director has given a declaration to the Company confirming that he/she meets the criteria of independence as specified under section 149(6) of the Companies Act, 2013 and Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (as amended).

They have also confirmed the compliance of Rule 6 of the Companies (Appointment and

Qualification of Directors) Rule, 2014 regarding inclusion of their names in the databank of Indian Institute of Corporate Affairs (IICA).

The Board is of the opinion that the Independent Directors of the Company, including those appointed during the year, possess requisite qualifications, expertise and experience and they hold the highest standards of integrity.

In terms of the provisions of Section 203 of the Companies Act, 2013, Mr. Hari Mohan Bangur (DIN: 00244329), Chairman; Mr. Prashant Bangur (DIN: 00403621), Vice Chairman; Mr. Neeraj Akhoury (DIN: 07419090), Managing Director; Mr. S. S. Khandelwal, Company Secretary and Mr. Subhash Jajoo, Chief Finance Officer, are the Key Managerial Personnel of the Company.

In accordance with the provisions of the Companies Act, 2013 and Articles of Association of the Company, Mr. Prashant Bangur, Director [Vice Chairman (in whole time capacity)] of the Company will retire by rotation in the ensuing Annual General Meeting (AGM) and being eligible, offers himself for re-appointment. The Board recommends the re-appointment of Mr. Prashant Bangur. His re-appointment at the 45th AGM as a director retiring by rotation would not constitute a break in his tenure of appointment.

19. PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES

Disclosures pertaining to remuneration and other details as required under section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are provided at Annexure - 4.

In terms of the provisions of section 197(12) of the Companies Act, 2013 read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration ial year ending 31 financ of Managerial Personnel)

Rules, 2014, a statement showing the names of employees and other particulars of the top ten employees and employees drawing remuneration in excess of the limits as provided in the said rules are set out in the Board's Report as an addendum thereto. However, in terms of provisions of the first proviso to section 136(1) of the Companies Act, 2013, the Annual Report is being sent to the members of the Company excluding the aforesaid information. The said information is available for inspection at the Registered Office of the Company during such working hours as are provided under the Articles of Association of the Company and any member interested in obtaining such information may write to the Company Secretary and the same will be furnished on request.

I. Statutory Auditors

M/s. B R Maheswari & Co LLP, Chartered Accountants (Firm's Registration No. 001035N/N500050) were appointed as Statutory Auditors of the Company, in the Annual General Meeting held on 28th July, 2022, for a consecutive term of five years from the conclusion of 43rd Annual General Meeting till the Conclusion of 48th Annual General Meeting. They have given their report on the Annual Financial Statements for the Financial Year 2023-24. The Audit Report does not contain any qualification, reservation or adverse remark.

II. Secretarial Auditors

The Board had appointed M/s. Pinchaa & Co., Company Secretaries (Firm's Registration No. P2016RJ051800) as Secretarial Auditor of the Company to conduct Secretarial Audit for the Financial Year 2023-24. They have submitted their report in prescribed format and the same is enclosed at Annexure - 5. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.

III. Cost Auditors

The Cost Auditors are in the process of conducting the audit of cost records for year 2023-24 and shall submit their report in due course.

In terms of the provisions of section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Amendment Rules, 2014, the Board of Directors of the Company have appointed M/s. K. G. Goyal & Associates, Cost Accountants (Firm Registration No. 000024) to conduct the cost audit for the st March, 2025 at a remuneration as stated in the Notice convening the 45th Annual General Meeting of the members. As required under the Companies Act, 2013, the remuneration payable to cost auditors has to be placed before the Members at the general meeting for ratification. Hence, a resolution emuneration seekingratification by the of Members, payable to the Cost Auditors, forms part of the Notice of the ensuing 45th AGM.

Reporting of frauds by Auditors

During the year under review, Auditors of the Company have not identified and reported any fraud as specified under the second proviso of Section 143(12) of the Companies Act, 2013.

(a) Composition of Audit Committee: The Audit Committee comprises of Mr. Shreekant Somany as Chairman, Mr. Sanjiv Krishnaji Shelgikar and Mr. Zubair Ahmed as other Members. More details are given in the Corporate Governance Report. All the recommendations made by the Audit Committee were accepted by the Board.

(b) Details of Meetings of Board and its Committees: The Board of Directors of the Company met 6 times during the year to deliberate on various matters. The meetings were held on 22nd May, 2023, 26th July, 2023, 7th November, 2023, 31st January, 2024, 21st March, 2024 and 22nd March, 2024. Further details are available in the Corporate Governance Report forming part of this Annual Report. The intervening gap between the meetings was within the period prescribed under the Companies Act, 2013 and the Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (as amended).

(c) Annual Return: In terms of section 92(3) of the Companies Act, 2013 and Rule 12 of the Companies (Management and Administration) Rules, 2014, the Annual Return of the Company is available on the website of the Company at link https://www. shreecement.com/investors/shareholder-information

(d) Particulars of Loans, Guarantees or Investments: Details of Loans, Guarantees and Investments covered under the provisions of section 186 of the Act read with the Companies (Meetings of Board and its Powers) Rules, 2014 are given in Notes to the standalone financial statements.

(e) Related Party Transactions:

All Related Party Transactions during the financial year 2023-24 were on arm's length basis and in ordinary course of business. They were all in compliance with the applicable provisions of the Companies Act, 2013 and the Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (as amended). All such transactions are placed before the Audit Committee for review/approval. The necessary omnibus approvals have been obtained from the Audit Committee wherever required. There were no material Related Party Contracts/ Arrangements/ Transactions made by the Company during the year 2023-24 that would have required Shareholders' approval under provisions of section 188 of the Companies Act, 2013 or of the Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (as amended). The Company has adopted a Related Party Transactions Policy duly approved by the Board, which is uploaded on the Company's website & may be accessed at https://www.shreecement.com/ investors/disclosure-regulation Further, in terms of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) (Amendment) Regulations, 2018, the transactions with person/entity belonging to the promoter/ promoter group holding

10% or more shareholding in the Company are as under:

(f) Deposits from Public: The Company has not accepted any deposits from the public covered under Chapter V of the Companies Act, 2013 during the year 2023-24 and as such, no amount on account of principal or interest on deposits from public was outstanding.

(g) Issue of Non-Convertible Debenture (NCD): During the year 2023-24, the

Company raised proceeds of 700 crore from issuance of non-convertible debentures for 7 years on private placement basis at a coupon rate of 7.8% P.A. Axis Trustee Services Limited has been appointed as Debenture Trustee for the said issuance.

(h) Managing the Risk of Fraud, Corruption and Unethical Business Practices Vigil Mechanism/Whistle Blower Policy: The Company has adopted a whistle blower policy and established the necessary vigil mechanism for employees and Directors to report concerns about unethical behaviour. The policy provides for adequate safeguards against victimization of employees who avail the mechanism and also provides for direct access to the Chairman of the Audit Committee. The whistle blower policy may be accessed on the website of the Company at https://www.shreecement.com/investors/ disclosure-regulation Code of Conduct: Company believes in the principle of trust which can be derived through ethical practices, transparency and accountability to stakeholders. Keeping the same into account, the Company has in place a "Code of Conduct". Every director and employee is required to adhere to the same. The details of the code of conduct can be accessed on the website of the Company at https://www.shreecement. com/investors/disclosure-regulation

Anti-Bribery and Anti-Corruption Policy: To conduct the business in an ethical, honest and transparent manner, the Board of Directors of the Company has adopted the Anti- bribery and Anti-Corruption Policy. Company has zero tolerance approach toward bribery and corruption. The Policy applies to all the directors and employees of the Company and its subsidiaries including third parties who are working on behalf of Company/its subsidiaries. The details of the policy can be accessed on the website of the Company at https://www.shreecement. com/investors/policies

(i) Remuneration Policy: Company firmly believes in nurturing a people-friendly environment which is geared to drive the organisation towards high and sustainable growth. Each and every personnel working with the Company strives to achieve the Company's vision of being the best in the industry. Its remuneration policy is therefore designed to achieve this vision. The policy has been approved by the Board on the recommendation of Nomination cum Remuneration Committee. The policy is applicable to Directors, Key Managerial Personnel and other employees. The policy provides that while nominating appointment of a Director, the Nomination cum Remuneration Committee shall consider the level and composition of remuneration which is reasonable and sufficient to attract, retain and motivate the

Directors / KMP / Employees for delivering high performance. The Remuneration Policy can be accessed on the website of the Company at https://www.shreecement. com/investors/disclosure-regulation

(j) Policy on Prevention, Prohibition and Redressal of Sexual Harassment at Workplace: The Company has complied with the provisions of the constitution of the ‘Internal Committee' as per the requirement of The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 ("POSH Act"), Company is having "Prohibition of Sexual Harassment Policy" which provides the mechanism to redress complaints reported under the said Act. As provided by the POSH Act, the Company has formed Internal Complaints Committees (ICC) at all workplaces to cover all Units, Sales offices, Regional office and corporate offices. The

Internal Committee (IC) is comprised of internal members and external members who have extensive experience in the field. The Company complaint of sexual harassment during the financial year 2023-24.

(k) Material Changes after the Close of the Financial Year: There have been no material changes and commitments which have occurred after the close of the year till the date of this report, affecting the financial position of the Company.

(l) Significant and Material Orders passed by the Regulators or Courts: No significant material orders have been passed by the Regulators or Courts or Tribunals which would impact the going concern status of the Company and its future operations.

(m) Maintenance of Cost Records: Company is required to maintain cost records as specified by the Central Government under section 148(1) of the Companies Act, 2013. Accordingly, such accounts and records are made and maintained by the Company.

(n) Compliance with Secretarial Standards:

Company has complied with the Secretarial Standards issued by Institute of Company Secretaries of India (ICSI) on Board Meetings (SS- 1) and General Meetings (SS-2).

(o) Amalgamation and Merger:

(i) The Board of Directors in its meeting held on 7th November, 2023 had approved the Scheme of Amalgamation for merger of Shree Cement North Private Limited and Shree Cement East Private Limited (Wholly Owned Subsidiaries) with Shree Cement Limited (Holding Company). (ii) Considering the revised investment strategy of the group and other considerations, the Board of Directors of the Company in its meeting held on 21st March, 2024 had decided to withdraw the aforesaid amalgamation scheme. The Hon'ble NCLTs, Kolkata and Jaipur Bench vide its order dated 5th April, 2024 and 10th April, 2024 respectively have approved the withdrawal of the said Scheme of Amalgamation.

22. ACKNOWLEDGEMENT

The Directors take this opportunity to express their deep sense of gratitude to its Central and State Governments and local authorities for their continued co-operation and support. They would also like to place on record their sincere appreciation for the commitment, hard work and high engagement level of every member of the Shree family without which the exemplary performance of the Company year after year, would not have been possible. The Directors would also like to thank various stakeholders of the Company including customers, dealers, suppliers, lenders, transporters, advisors, local community, etc. for their continued committed engagement with the Company. The Directors would also like to thank the Members of the Company for their confidence and trust reposed in them.

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