Dear Shareholders,
Your Directors have pleasure in presenting Twenty-Third Annual Report of the Company together with the Audited Standalone & Consolidated Balance Sheet as at March 31, 2024 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 March 31, 2024 as compared to the previous financial year are as under:
(H in Lakhs)
OPERATIONAL REVIEW
The Indian cement market is poised for significant growth in the years to come. As of 2023, the India cement market stood at 396.7 Million Tons. It is anticipated that growth in the market, estimating to reach 599.7 Million Tons by 2032. This indicates a Compound Annual Growth Rate (CAGR) of 4.7% during the period of 2024-2032.
Various Government initiatives like "Housing for All" and the Smart Cities Mission provide a structured framework for development, creating sustained demand for cement. Increasing Government initiatives and investments in infrastructure projects play a crucial role in boosting the demand for cement. Large-scale infrastructure projects
such as the National Infrastructure Pipeline (NIP), Bharatmala Pariyojana and development of roads, bridges, railways, airports, and housing schemes will not only improve connectivity but also stimulate demand for cement across different regions of the country. Ongoing innovations in cement production techniques contribute to the efficiency and sustainability of cement industries. Adoption of advanced technologies enhances productivity and reduces environmental impact. Growing awareness of environmental concerns, particularly related to carbon emissions and sustainability, is driving the adoption of greener cement production methods. Regulatory measures aimed at reducing carbon footprint and promoting sustainable practices also influence market dynamics.
The announcement of cement corridors under the Indian Railways represents a strategic initiative aimed at improving logistics efficiencies, reducing transportation costs, and promoting sustainable multimodal connectivity in the cement industry.
Overall, the positive outlook for the Indian cement industry is underpinned by a combination of demographic trends, urbanization, and government-led initiatives aimed at fostering growth and development.
Despite the growth prospects, challenges such as fluctuating raw material prices, regulatory hurdles, and intense competition within the industry could impact market dynamics.
During the year under review, your Company has manufactured 7,60,300 MT. of Cement Clinker as against 7,59,263 MT. recorded during the FY 2022-23. Company's subsidiary M/s. Star Cement Meghalaya Limited has produced 20,44,837 MT of Clinker as against 19,62,393 MT. during the FY 2022-23. On consolidated basis total clinker production during the year was at 28,05,137 MT. as against 27,21,656 MT. during FY 2022-23. Your Company recorded overall growth in its performance during the year.
In terms of capacity utilization, clinkerization unit of your Company was able to utilize 76% of its installed capacity as against 75.93% during the FY 2022-23. M/s. Star Cement Meghalaya Limited has fully utilized its capacity during the FY 2023-24 like FY 2022-23 On consolidated basis clinkerization units was fully utilized its capacity during the FY 2023-24 and 97.20% utilisation in FY 2022-23.
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 44,44,538 MT. as against 40,56,452 MT. during the FY 2022-23.
Similarly, your Company has been able to achieve sales volume of 44,04,208 MT of Cement as against 40,13,643 MT. during the previous financial year.
UPCOMING/NEW PROJECTS
The Company has successfully commenced commercial production on April 21, 2024, from its' New Clinker Line of 3.3 MTPA Capacity situated at Lumshnong, Meghalaya. Company's 12.5 MW WHRB projects in Lumshnong is underway. The 2 MTPA Cement Grinding unit of the Company's subsidiary M/s Star Cement North East Limited at Sonapur, Assam has started its commercial operation on the 12th Day of March, 2024. Star Cement North East Limited, a subsidiary Company's project for 2 MTPA cement plant in Silchar with Railway sliding is 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 Company's and its subsidiary's upcoming projects at Lumshnong and Silchar and the relevant circumstances has decided that it would be prudent, not to recommend any Final Dividend for the Financial Year 2023-24 (Previous year NIL).
INDIAN ECONOMY AND OUTLOOK - AT A GLANCE
India's economic journey is indeed remarkable. Despite facing significant challenges such as the COVID-19 pandemic and existing macroeconomic imbalances, the country has maintained a strong growth trajectory. With a current GDP estimate of $3.7 trillion for FY24, India has emerged as the fifth-largest economy in the world.
Moody's, a global rating agency, has revised its GDP growth projection for India in the calendar year 2024 to 6.8 percent, an increase from the earlier projection of 6.1 percent. This adjustment is primarily attributed to India's strong economic performance in 2023 and the reduction in global economic challenges due to certain geopolitical issues.
India's economy outperformed expectations during the October-December quarter, with growth reaching 8.4 percent, surpassing analysts' forecasts of 6.6 percent. This growth was fueled by increased government capital spending and robust manufacturing activity.
Looking ahead, India's ambition to achieve a $5 trillion GDP by 2027 is driven by continued economic reforms, infrastructure development, and leveraging its demographic dividend. If successful, this growth trajectory will position India as the third-largest economy in the world, further solidifying its status as a major global economic player.
Strong domestic demand remains the main strenght for the growth. Higher reliance on domestic demand
cushioned India from m?ltiple external headwinds. With strong domestic demand, India remains the fastest growing major economy in the world.
It is anticipated that India will maintain its position as the fastest-growing economy amongst G-20 nations.
India's interim budget for financial year 2024- 2025 targets a capital expenditure allocation of H11.1 lakh crore, representing 3.4 percent of GDP, which is 16.9 percent higher than the estimates for financial year 2023- 2024.
India's successful hosting of the G20 Summit in 2023 has bolstered its position on the global market, enhancing stability and fostering optimism for its future growth prospects. The country continues to be an attractive investment destination, supported by its vast market size, diverse operational opportunities, abundant skilled workforce and advancements in technology and innovation.
In parallel, India has undertaken substantial reforms to improve its ease of doing business environment. These reforms have focused on simplifying and digitizing regulatory compliance processes across the entire business lifecycle from incorporation to the cessation of operations.
The sector mix within the industry comprises the housing sector (57%-59%), infrastructure sector (27%-29%), and industrial/commercial (13%-15%) sector. The housing segment demand is expected to be moderate over the next five years and will remain a key contributor for the development of the cement sector. Even as housing will continue to be the key volume contributor, infrastructure will expand its share in the next five years. The production-linked incentive (PLI) schemes implemented by the Government of India have played a significant role in revitalizing the manufacturing sector. These schemes have facilitated the development of critical value chains and industrial clusters. The Government is considering extending the PLI scheme to additional sectors, likely labor-intensive industries to foster growth and development in the segments.
The Interim Budget for 2024-25 increased the target under PMAY-(G) by 20 million houses for next five years under the Government's initiative for rural low-cost housing. This would contribute for incremental cement demand of at least 15 MTPA.
The Government has allocated substantial funds for the construction of highways, railways, airports and advancement of other critical infrastructure development projects. This investment is expected to create new business opportunities, employment generation, enhance connectivity and stimulate economic growth of the Country. More cities will get Namo Bharat and Metro Rail infrastructure projects, to promote the e-vehicle ecosystem, charging infrastructure will be supported by the Government.
The aforesaid initiatives will have positive impact on cement demand of the country in the period to come.
CEMENT INDUSTRY OVERVIEW
India holds a significant position as the second-largest producer of cement globally with more than 8% of the world's installed capacity. This indicates the country's substantial contribution towards meeting global demand for cement.
India's infrastructure and construction sectors are poised for substantial development, which is expected to drive demand for cement. Initiatives of the Government like development of smart cities contribute to this growth trajectory, creating opportunities for increased cement consumption. Cement consumption in India has been consistently growing, partly fueled by increasing demand for rural housing. Strong expansion in industrial sector acts as a key driver for cement demand, reflecting the broader economic recovery of the country.
The ready availability of essential raw materials such as limestone and coal further supports the growth of the cement industry. This ensures a stable supply chain and reduces production costs, enhancing the industry's competitiveness.
Significant capacity additions and moderation in cement volume growth are expected to constrain Pan India average capacity utilization levels below 70% over the medium term.
In recent years, the cement industry has benefitted from high volume growth, majorly driven by good demand from the housing sector, numerous infrastructure projects such as construction of roads, expressways, airports, metro rail, and generous rural demand.
Cement volume growth is expected to moderate to 5% to 6.5% compounded annual growth rate over FY25 and FY26 on the high base of earlier three fiscals. The slowdown in demand growth is also from rural housing with a high base of growth observed over the recent past on account of the PMAY-(G) scheme.
Cement demand from housing construction is expected to be moderate at around 4-5% over the next three fiscal years while demand from infrastructure is expected to grow
In the latest Budget 2024 announcement, a substantial increase in the allocation of H11.11 lakh crore for infrastructure development would boost the cement demand. The Pradhan Mantri Awas Yojana has the second-highest allocation in 2024-25 at H80,671 crore, an increase of 49.1% over the revised estimate of 2023-24.
The launch of PM Gati Shakti aims to enhance multimodal connectivity and develop a world-class transport network in India. This initiative is anticipated to boost demand for cement, particularly in infrastructure projects related to transportation and logistics.
The allocation of funds for Urban Rejuvenation Mission (AMRUT), Smart Cities Mission, and Swachh Bharat Mission underscores the Government's focus on urban development.
Overall, aforesaid Government initiatives signal a favorable environment for private sector cement companies, providing them with opportunities for growth and investment in line with the country's infrastructure development goals. The combination of factors such as infrastructure development, rising demand, industrial recovery, foreign investment, and raw material availability etc., posed India's cement sector for sustained growth in the long term. Continued Government budgetary support and conducive policies can further catalyze this growth trajectory, making the industry a promising investment opportunity.
EAST & NORTHEAST SCENARIO - GATEWAY OF OPPORTUNITIES
The Government of India prioritizes North-east development due to its strategic location. Various initiatives have been launched, leading to improved health, education, infrastructure, and industrialization. These efforts are aiming to uplift these regions and enhance their infrastructure and socio-economic prospects.
The Ministry of Road Transport and Highways has played a pivotal role in enhancing the road network across the North Eastern Region. Over the past nine years (20142023), a total of 4,950 km of the National Highway Network has been developed for H41,459 crores. In addition, the Ministry of Development of the North Eastern Region has sanctioned 77 road projects under schemes like NESIDS and NERSDS, amounting to H3,372.58 crore.
The North East Special Infrastructure Development Scheme (NESIDS) has received a total approved outlay of H8,139.50 crore for the period spanning from 2023 to 2026. In 2023-24, allocation of H2491.00 crore has been designated for both the NESIDS-Road and NESIDS-Other Than Road Infrastructure components.
Infra projects with a length of 1,772 km of H45,090 crores are planned for 2024-25. A four-lane connectivity to Itanagar with a length of 166 km has been awarded for H5,481 crore with 162 km completed so far. Further, a four-laning Numaligarh - Dibrugarh highway of 183 km has been approved with a budget of H5,653 crores with 129 km completed so far. Additionally a 4-lane bridge is under construction over the Brahmaputra River between Dhubri and Phulbari on NH 127B with a total length of 19 km for H4,997 crore.
With the objective of improving railway connectivity, in 2023-24, a budget of H10,269 crores have been allocated, highlighting the government's dedication to advancing rail infrastructure in the region. 60 stations in the Northeast are being redeveloped with world-class amenities and facilities.
The Union Cabinet has approved the Uttar Poorva Transformative Industrialization Scheme (UNNATI), 2024 to foster industrial growth and employment generation in the northeast. The scheme's total cost is H10,037 crores, covering 10 years with an additional 8 years for committed liabilities. All eligible Industrial Units are to commence their production or operation within 4 years from the grant of registration.
As per the Union Budget (2024-25) of West Bengal, a total of H6,859 crores have been allocated for PMAY - Rural, H5,108 crore has been allocated for capital outlay on roads and bridges and H2,846 crore has been allocated for assistance to local bodies corporations, urban development authorities. The government had also announced a major investment of H2,550 crores for the Kolkata Metro Rail. Under PMAY 1,164,782 houses are still under construction.
As per the union Budget of Bihar, H5,092 crore has been allocated towards MGNREGS, H2,071 crore has been allocated towards Pradhan Mantri Gram Sadak Yojana. H2,103 crore has been allocated towards PM Awas Yojana- Urban, H640 crore has been allocated towards the Smart City Mission and H3,819 crore has been allocated for capital outlay on roads and bridges. Under PMAY 88,483 houses are still under construction.
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 9% by 2024-2026 estimated. West Bengal and Bihar is the strongest cement consuming state in the eastern-region accounts with more than one-fourth of the region's total demand at ~23 million tonnes and 22 million tonnes estimated respectively. Cement demand in West Bengal and Bihar has grown by 1% YOY, however with ongoing thrust on infrastructure these States are likely to witness strong demand in the years to come.
North East Market continued to be the focus market for your company. Cement demand was good throughout the year. Demand increased by 7.5% in NER against an all India average of ~7% estimated.
During the year under review your company was able to sell overall 4.40 Million Tonnes. of cement as against 4.02 Million Tonnes during the FY 23-24.
Overall Cement demand in North East accounted for 14 Mn Tonnes in FY 23-24 as against 13 Mn Tonnes in FY 22-23.
As a market leader in NER your Company has further consolidated dealers and sub dealer's network. Currently your Company is associated with 2,000 dealers and 11,000 sub dealers.
Company is running mobile application for dealers, influencers, sales, branding and technical team as follows:
i) Star Saathi App for Dealers
ii) Star Saathi App for Rising Sub Dealers
iii) Customer Web Portal for Dealers
iv) Loyalty program for Dealers
v) Star Link App for Mason and Contractors
vi) Star Steller App for Engineers
vii) Sales Force Automation App for Sales, Branding and Technical department.
Major achievements of your Company during the year are follows:
O At NER Star Cement has grown by 13% and overall industry has grown by 7.5 % in FY 23-24
O At NER Star Cement Non Trade sales has grown by 34% in FY'23-24 over FY'22-23
O Focused on Premium product sale and resulted grown by 53%
O Added 1900 plus cement counters during FY'23-24
O Launch of Weather Shield Super premium Cement
O First ever International Annual Dealer Conference
This year your Company launched the Maverick Product Star Weather Shield -the super-premium product developed with water resistant properties for the tough weather conditions of North East & Eastern region. This product likely to set a new standard in cement industry.
As a part of the digital initiative, an Artificial Intelligence based greeting card was launched for our network to send out personalized e-greeting card to their friends & families which is again one of its kind used by any Cement Brand in the industry.
This year we also initiated a digital marketing campaign called "Best Ethnic Dress Contest & continued with "Happy Pic Lucky Pic Contest" for our Facebook and Instagram users. The total engagement we had generated was for more than 6 million users in Facebook & Instagram from these campaigns.
PRODUCTION AND COST DEVELOPMENTS Fly Ash
Increased Flyash procurement was done as the sales target of FY'24 were higher as compared to the previous years. In the process we have procured 13.1 Lakh MT of Fly Ash which is 3% higher as compared to FY'23.
Various cost saving initiatives were implemented through out the year to negate the impact of Rail freight subsidy reduction in North Eastern Region. Sourcing from other sources with lower landed cost as well as cost reduction of existing sources enabled the Company to maintain optimum cost.
Logistics & Freight
Your company steered through these challenges to ensure that supplies to market are ensured while keeping the cost in control.
Logistics Cost Efficiency was further improved through sustained efforts of key initiatives such as monthly and daily e-bidding, PTPK Outlier corrections, Wheeler Wise & Segment Wise freight. Weighted average lead distance continued to remain at 220 KM range.
Your Company has always focused on giving best Logistics services to our customers for timely delivery at the most economical costs & for the same many new initiatives were implemented such as Stock on Wheels (SoW) at all locations, Enhanced Bidding Portal, GPS enabled fleet monitoring as well as Juggler rake for wagon wise delivery at various sidings. To further enhance the serviceability and efficiency for customer demand, 20 no. new small fleet were ordered whereas as 100 no. new 16 Wheelers were ordered to ensure continued clinker availability at optimized market freight at our Grinding units.
Power cost
During the year under review, your Company continued to source its power requirement for its Lumshnong unit from its wholly owned subsidiary M/s. Meghalaya Power Limited (merged with Star Cement Meghalaya 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 optimize 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.
Sourcing of Coal through FSA for 10 years period was successfully allotted to your company The Company also procured good quantity of Coal on spot auctions from CIL during the year, keeping the overall cost in control.
KEY PERFORMANCE HIGHLIGHTS
O Consolidated cement production was at 44.45 Lakhs MT during the year as against 40.56 Lakhs MT during the previous financial year.
O Consolidated net sales at H2888.17 Crores during the year under review as compared to H2,575.55 Crores during the financial year 2022-23.
O Consolidated EBIDTA was at H582.77 Crores during the year under review as compared to H520.47 Crores during the immediate previous financial year before exceptional items.
O Consolidated profit before tax during the year 202324 was at H423.57 Crores as against a profit of H379.67 Crores in the year 2022-23.
O 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. Company's aggressive marketing strategies and strong branding network also contributed to establish its position as the market leader in the region. Company's new projects alongwith expansion plan would contribute to strengthen its position in the market. Locational advantages helped to procure raw materials at affordable prices.
Company's dependence on domestic market and business concentration on regional market for a longer period of time may adversely affect the growth of the Company. Increased input cost and logistical costs impacts profitability of the Company. Environmental impact and other force majure events may affect the operations of the Company. To overcome from the problem accumulated due to regional concentration, the Company is also planning to reach in other region of the country.
Government's 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. Government's 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. The industry currently is very dependent on uninterrupted supply of coal which might create problem in the procurement process. 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 regionalized, 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 Government's 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. Company's vast dealer's network across the States also helping to mitigate the risk. Rising concern of carbon emissions due to cement sectors, is pushing the industry to come up with cleaner/greener processes. As the Government is looking for regulations to reduce carbon emissions it will further make things difficult for small players to compete with the larger Companies. Therefore, companies are focusing on green cement which will be produced by various techniques to reduce carbon emissions.
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 March 31, 2024 was H40,41,80,417 divided into 40,41,80,417 equity shares of H1 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 Company's 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:
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 Company's Registered Office/ Corporate Office, well in advance of 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 28, 2023 (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.
The Interim Dividend declared for the Financial year 201516 and the underlying equity shares of the Company were transferred to the IEPF Authroity. The details are available on the web site of the Company at www.starcement.co.in
Further, the fractional shares entitlement account on which the amount has not been paid or claimed for seven (7) consecutive years or more shall be transferred to the IEFP Authority as notified by the Ministry of Corporate Affairs. Accordingly, the fractional share entitlement account for the FY 2017-18 which was unpaid for seven consecutive years aggregating to H50,460.50 will be transferred by the Company to the IEPF Authority after following the required provisions of the Rules on or after 06th September, 2024.
The shareholders whose dividend/Fractional share amount/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 Company's website and can be accessed at the web link: https://www.
starcement.co.in/upload/images/files/Annual-Return-
FY-23-24.pdf
MEETINGS OF THE BOARD
During the year four (4) Board Meetings and four (4) Audit Committee Meetings were convened and held on 19th May, 2023, 08th August, 2023, 9th November, 2023 and 07th February, 2024 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 27th March, 2024 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 victimization 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 Company's 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 Company's 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 utilization 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 Company's 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 Company's 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:
O In the preparation of Annual Accounts, the applicable Accounting Standards have been followed along with the proper explanation relating to material departures, if any;
O 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, 2024 and of the profit of the Company for the year under review;
O 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;
O The Directors have prepared the annual accounts on going concern basis;
O 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.
O 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
M/s 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, 2024, 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, 2024 in the Board Meeting held on 19th May, 2023. The remuneration proposed to be paid to them for the Financial year 2023-24, as recommended by audit committee, was ratified in the meeting of shareholders held on 28th September, 2023.
M/s 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 2024-25 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 2024-25 is included in the Notice convening the Annual General Meeting.
The Cost Audit report for the Financial Year 2022-23 was filed with the Ministry of Corporate Affairs on 7th September, 2023.
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 Number: 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 March 31, 2024 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 arm's 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 Company's 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 Company's 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:
O Replacement of overrated Tertiary Crusher motor from 400 kW to 325 kW, resulted in annual savings of 1,22,640 kWh (units).
O Installation of 45 kW VFD in Material Handling bag filter fans, resulted in annual savings of 69,120 kWh (units).
O Installation of 132 kW VFD in the bulker unloading compressor, resulted in annual savings of 150,356 kWh (units).
O Installation of 110 kW VFD in the Mill compressor, resulted in annual savings of 73,669 kWh (units).
O Replacement of 110 kWh compressor by 55 kW VFD-operated compressor for packer operation, resulted in annual savings of 28,600 kWh (units).
(B) Steps taken toward Technical Absorption:
a. Steps taken towards technical innovation: -
O Installation of 5.5 kW VFD for the SCL kiln thruster pump to regulate kiln thruster pressure effectively.
O Installation of the standby VFDs at the coal mill vent fan and Cement Mill-2 dynamic
O Separator.
O Installation of 4 kW Variable Frequency Drives (VFDs) in the travel drive of 10 Truck Loaders, helped in reducing breakdowns, and enhanced machine performance.
O Implemented hardware interlocks in 38 bag filter and air slide fan enclosures, saving 38,304 kWh of power in FY-23-24.
b. Steps taken towards technical absorption: -
O Installation of Solid-State Relays (SSRs) in place of power contactors for the hydraulic motor drive of Truck Tipplers No-1 & 2, resulting in smoother operation and reduced downtime.
O Replacement of 3 kW drum motors with 2.2 kW Geared Motors, resulting in fewer breakdowns of Truck Loaders.
O Frequent tripping of Intelligent Motor Control Centre (IMCC) drives due to communication failures mitigated by replacing 100mbps switches with 1Gbps switches, leading to improved communication speed and eliminating further stoppages.
c. Steps taken towards technical adoption: -
O Upgradation of the coal mill static separator with a dynamic separator to enhance performance.
O Installed a 500 KVAR / 200/100 KVAR APFC capacitor bank panel in LT loads and distribution transformers, improving the power factor from 0.989 to 0.994. This resulted in an additional rebate of H8.97 lakhs in the financial year 23-24.
O The modification of the 220-volt AC power line communication system in the packer, using the Devolo Kit, has effectively reduced the occurrence of frequent communication faults within the power circuit
O Installation of on-line cleaning of lubrication oil unit in Mill main gear box and Roller lubrication system resulted in increased life of oil by 2 years.
O 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 H9.35 Lakhs (PY. H6.70 Lakhs) and Revenue Expenditure of H0.37 Lakhs (PY H22.74 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 H808.43
Lakhs (Previous Year H2,597.86 Lakhs).
CORPORATE SOCIAL RESPONSIBILITY INITIATIVES (CSR)
Star Cement Ltd has continually been the precursor of CSR performance in North-Eastern and Eastern region of the country. The Company's CSR policy mainly focuses on the need based sustainable holistic development of the neighbouring society since the day of its commencement. The Company's social responsibility approach is offering several community welfare services in the ground of Health, Education, Livelihood, Environment and Biodiversity, Rural infrastructure development and emergency response for the local inhabitants of plant operational areas throughout the year 2023-24 to progress the excellence and standard of living.
Your Company is always pioneer in various social welfre 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 marginalized. Your Company's 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 Company's social responsibility policy is offering number of community welfare services in the field of Health, Education, Livelihood, Environment and Biodiversity, Rural infrastructure development and emergency response etc., for the local inhabitants of plant operational areas during the year 2023-24 to improve the quality and standard of living. Your Company undertook various activities during the year 2023-24 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 Company's Policy on Corporate Social Responsibility can be accessed on the Company's 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 BOARD'S 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 Board's 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
The tenure of Mr. Sajjan Bhajanka, Mr. Rajendra Chamaria, Mr. Sanjay Agarwal Mr. Prem Kumar Bhajanka, Managing Directors of the Company and Mr. Pankaj Kejriwal, Executive Director of the Company were due to expire on 31st March, 2024. On the recommendation of Nominaton & Remuneration Committee, the Board at its meeting held on 08th August, 2023, re-appointed Mr. Sajjan Bhajanka, Mr. Rajendra Chamaria, Mr. Sanjay Agarwal Mr. Prem Kumar Bhajanka as the Managing Directors of your Company and Mr. Pankaj Kejriwal, as Executive Director of the Company for further period of three years with effect from 1st April, 2024 till 31st March, 2027. The Company in its Annual General Meeting held on 28th September, 2023 has taken approval of the shareholders for the above re-appointments.
On the recommendation of the Nomination & Remuneration Committee, the Board of Directors in its meeting held on 8th August, 2023, appointed Mr. Tushar Bhajanka (DIN: 09179632) as an Additional Director in Executive category and designated as the Deputy Managing Director of the Company with effect from 8th August, 2023 for a period of 3 years till 7th August, 2026. 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 Company in its Annual General Meeting held on 28th September, 2023 has taken approval of the shareholders for the above appointment.
On the recommendation of the Nomination & Remuneration Committee, the Board of Directors in its meeting held on 9th November, 2023, appointed Mr. Keshav Bhajanka (DIN: 03109701) as an Additional Director in Non-Executive category of the Company with effect from 9th November, 2023. 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 Company by way of special resolution through Postal Ballot dated 19th January, 2024 has taken approval of the shareholders for the above appointment.
In accordance with the provisions of Companies Act, 2013 and in terms of the Memorandum and Articles of Association of the Company, Mr. Brij Bhushan Agarwal (DIN: 01125056) and Mr. Prem Kumar Bhajanka (DIN: 00591512) will retire by rotation and being eligible, offer themselves for re-appointment. In view of their considerable experience, your Directors recommend the re-appointment of Mr. Brij Bhushan Agarwal and Mr. Prem Kumar Bhajanka 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, Mr. Vivek Chawla, Mr. Jagdish Chandra Toshniwal and Mr. Ramit Budhraja 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 H10 crores and more. Mr. Nirmalya Bhattacharyya had appeared in 'online proficiency test' within the period of 2 (two) years from
the date of inclusion of his names in the data bank and have successfully qualified the test.
FAMILIARIZATION PROGRAMME FOR INDEPENDENT DIRECTORS
In order to enable the Independent Directors to perform their duties optimally, the Board has devised a familiarization programme for the Independent Directors to familiarize 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 familiarization program is available on the Company's 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. 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 Clinkerization plant with an installed capacity of 1.8 MTPA. During the year under review, the Company manufactured of 20,44 837 MT clinker as against 19,62,393 MT in FY 2022-23.
Star Cement North East Limited, a subsidiary Company having 2 MTPA Cement Grinding plant has started its commercial operation on the 12th Day of March, 2024, the Company manufactured 88,328 MT of cement during the year.
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) subsidiary is yet to start commercial operations.
In terms of the Scheme of Amalgamation filed before the Hon'ble National Company Law Tribunal, Guwahati bench by M/s. Meghalaya Power Limited, Megha Technical & Engineers Private Limited and NE Hills Hydro Limited (Transferor Companies) and Star Cement Meghalaya Limited (Transferee Company) and as per order passed by the Hon'ble National Company Law Tribunal dated
10th May, 2024, the respective Transferor Companies have been merged with the Star Cement Meghalaya Limited. The Scheme of Amalgamation has been effective on 20th May, 2024 with effect from the Appointed date i.e. 01st April, 2023.
CHANGES IN NATURE OF BUSINESS, IF ANY
There has not been any change in the nature of business.
AUDITED FINANCIAL STATEMENTS OF THE COMPANY'S 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, 2024 for each of the Company's subsidiaries viz. Star Cement Meghalaya Limited (SCML), 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 Company (along with present and former Directors, Key Managerial Personnel and former Statutory Auditors) had submitted applications with the Registrar of Companies, North Eastern Region, under Section 441 of the Companies Act, 2013 (the "Act") for compounding of certain alleged offences u/s 134, 129 read with AS-4, 92 and 143(3) of the Companies Act, 2013. Accordingly, The Regional Director (North Eastern Region), vide its orders dated February 6, 2024, has compounded the alleged
offences. The total compounding fees of H14,50,000 (Rupees Fourteen Lakhs Fifty Thousands), which comprises of H2,00,000 (Rupees Two Lakh) in respect of the Company and H50,000 (Rupees Fifty Thousand) each of the present and former Directors, Key Managerial Personnel and former Statutory Auditors has been paid.
(ii) In respect of demand notice dated 19th February, 2020 received by the Company from Director of Mineral Resources, Meghalaya, for payment of royalty, MEPRF, VAT/GST for H4,184.06 Lakhs in pursuance to the National Green Tribunal (NGT) order dated 1701-2020 passed in O.A. No. 110(TCH)/2012 for alleged illegal coal procurement. By passing the said order NGT has accepted the Recommendation of the 5th Interim Report of the Independent Committee set up by NGT, which has suggested imposition of penalty on Cement Companies and Thermal Power Plants in Meghalaya.
The Company did not purchase any illegal coal and had complied with all disclosure requirements of the various Government Departments. The Report of NGT Committee has been founded on the basis of assumptions and views of the Committee and not on hard facts. Further to note, that neither the Company has been issued a show-cause nor any opportunity of being heard was given to the Company before submitting the Interim reports by the Independent Committee to NGT. Even NGT has not served any notice on the Company before passing the impugned order dated 17-01-2020 which is clear violation of principles of natural justice.
Accordingly, the Company had preferred an appeal, being C.A. No.3280 of 2020, before the Apex Court. The Apex court vide it's order dated 02.05.2023 restored the proceeding in relation to the Company back to the file of the NGT, at the stage, at which they stood prior to the passing of the judgement dated 17.01.2020.
Subsequently the matter was transferred to the NGT, Eastern Zone Bench and re-numbered as OA No. 154/2023/EZ. The Company has appeared in the case through it's counsel and filed Affidavit in the case and the said case is now listed for hearing before the NGT, Kolkata on 02.08.2024 . (Refer Note No 46(a) of Notes to Accounts).
(iii) During the previous year the Company had 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 H2650.31 Lakhs (including H1552.61 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. On 27th February 2024, the Office of DMO has issued the no dues certificates for payment of Royalty and Cess on Shale purchased from Local suppliers during the period from Dec, 2019 to Jan, 2024, and as such, the Department has admitted that there is no liability of the Company towards payment of Royalty and Cess on Shale. Accordingly the company has written back Cess liability on Shale lying in the books of accounts amounting to H47.96 lakhs during the year and reduced contingent liability pertaining to Royalty and cess on Shale amounting to H601.12 lakhs (including penal interest amounting to H260.07 lakhs). However, as an abundant precaution, the Company has kept liability towards Royalty & Cess on others mineral products amounting to H439.92 Lakhs. Since the liability to pay royalty & Cess itself is not applicable to the Company, hence provision for differential amount of demand amounting to H268.77 Lakhs and penal interest amounting to H1292.54 Lakhs has not been provided 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(b) 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. On the request of the Company ICRA Limited, has withdrawn its working capital ratings assigned to the Company's short term and the long term fund based limits. The CRISIL ratings for the Long term and Short Term fund based limits are in force. CRISIL has affirmed the short term fund based limits rating as CRISIL A1+ (pronounced as CRISIL A One Plus). CRISIL Ratings for the long term fund based limits has been upgraded from 'CRISIL AA-/Positive' (pronounced CRISIL double A minus) to 'CRISIL AA/Stable' (pronounced CRISIL double A).
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
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 certif?cate from the auditors confirming the compliance, is annexed and forms part of the Annual Report. This certif?cate 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
As the custodian of Star Cement's val?es and aspirations, Human Resource department remains steadfast in its commitment to fostering a positive and engaging work environment that propels us towards our collective goals.
Throughout the past year, we have dedicated ourselves to initiatives aimed at nurturing our most valuable asset -people. Our efforts have revolved around Talent Management, Training & Development, Reward & Recognition, HR Automation, and Employee Wellbeing, all in alignment with the overarching vision of our company.
With an objective of nurturing talent and building talent pipeline, a leadership development program PACE (People Advancement - Curating Excellence) was launched where a cohort of high potential employees were identified, assessed and taken through a leadership development journey by way of coaching, mentoring and assigning action learning projects.
To foster a learning culture and leverage expertise & knowledge, we rolled out Star Gurukul program in which internal talents who are subject matter experts were identified, groomed and certified as "Trainers" to share their knowledge and skills to the larger team.
Recognizing the vital role of employee engagement in our success, we introduced initiatives like the "Employee of the Quarter" program and integrated gratitude and appreciation into our workplace culture through 'Thank You' cards.
In line with our theme of "Better & Faster," we streamlined HR operational processes through automation, ensuring efficiency and data-driven decision-making across the employee lifecycle.
Our commitment to employee wellbeing remains unwavering. This year, we prioritized health with the introduction of Pre-Employment and Annual Health Check-ups, alongside various wellness activities like zumba classes and yoga sessions.
In our pursuit of hiring the best talent, we introduced graded psychometric assessments to ensure cultural fit and alignment with Star Cement's ethos.
With proactive measures taken to address welfare-related concerns across all plant locations our employee relations have remained robust.
As we look ahead, we wish to continue to uphold the values that define us and strive for excellence in all our endeavours.
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 awarded the prestigious "Entrepreneur Influencer Award 2023 in Best Use of Video Content" for the Brand Journey video of Star Cement Ltd which was showcased during "Star Sitaron ka Milan 2023 Annual Dealers Conference Meet" held at Pattaya, Thailand. This year Star Cement has been awarded Brand of the Decade 2024 by BARC Asia in cement category nationwide.
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, 2024. 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 Company's 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 Company's 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 Company's 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.
#MDEnd#