Equity Analysis

FOR THE YEAR ENDED 31^st MARCH, 2024

The Board presents the Company's One Hundred and Fifth Annual Report together with the Audited Statement of Accounts for the year ended 31^st March, 2024.

FINANCIAL RESULTS (STANDALONE)

Rs Crore

GENERAL REVIEW OF COMPANY'S OPERATIONAL AND FINANCIAL PERFORMANCE

• Standalone Income, comprising Revenue from Operations and Other Income, for the year was R 3783.54 Crore, 4.98% higher compared to R 3,603.93 Crore in the year 2023.

• Standalone Loss before Tax for the year was R 221.81 Crore, 27.56% lower compared to R 306.20 Crore in the year 2023.

• Standalone Loss after Tax for the year was R 331.67 Crore, 186.74% higher compared to R 115.67 Crore in the year 2023.

• Cement production increased by 6.97% from 7.03 million tonnes in the year 2023 to 7.52 million tonnes in the year 2024.

• Cement Sales Volume increased by 6.97% from 7.03 million tonnes in the year 2023 to 7.52 million tonnes in the year 2024.

• 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 with respect to the reporting year.

DIVIDEND

No dividend is proposed in view of the loss during the year and the non-availability of any carry forward surplus.

The web-link for accessing the Company's Dividend Distribution Policy is as follows: https://www.kesocorp.com/DOCS/pdf/ mgc/dividend-distribution-policy-final.pdf

SHARE CAPITAL

The Company's paid-up Equity Share Capital as at the end of the year stood at R 310.66 Crore comprising 31,06,63,663 Equity Shares of R 10/- each and Preference Share Capital stood at R 109.19 Crore comprising 1,09,19,000 Preference Shares of R 100/- each.

PRE PAYMENT OF NON-CONVERTIBLE DEBENTURES

Arising out of the re-financing of its entire quantum of high cost debt, the Company pre-paid its entire balance of NonConvertible Debentures during the year.

PUBLIC DEPOSITS

The Company suspended acceptance of fresh public deposits effective 15^th June, 2023.

No public deposit matured for re-payment during the year.

As required under the provisions of Rule 8(5)(v) of the Companies (Accounts) Rules, 2014, further relevant particulars pertaining to deposits covered under Chapter V of the Companies Act 2013 are as follows:

- Fresh deposits accepted during the year till end of day 14^th June, 2023 - H 3.19 Crore

- Remained Unclaimed or Unpaid as at the end of the year H 82.96 Crore

- Whether there has been any default in repayment of deposits or payment of interest thereon during the year and if so,

number of such cases and total amount involved - Nil

- Premature requests received and paid - H 15.64 Crore

The Company has not accepted any deposits which are not in compliance with the requirements of Chapter V of the Companies Act, 2013.

DISPOSAL OF THE HINDUSTAN HEAVY CHEMICALS UNIT

Pursuant to the receipt of the requisite general body approval, the Company's Hindustan Heavy Chemicals Unit in the State of West Bengal was disposed of during the year.

SCHEME OF ARRANGEMENT FOR TRANSFER OF THE COMPANY'S CEMENT BUSINESS TO ULTRATECH CEMENT LIMITED

Pursuant to a proposed Scheme of Arrangement under Section 230-232 of the Companies Act, 2013 ("the proposed Scheme") framed by and between the Company and UltraTech Cement Limited ("UltraTech"), the Company proposed to transfer its Cement Business to UltraTech effective the Appointed Date of 1^st April, 2024.

The Scheme will be activated once all required regulatory procedures and approvals are in place.

The Company has withdrawn its proposed Scheme of Arrangement formulated under Section 230- 232 of the Act envisaging de-subsidiarisation of its wholly owned subsidiary, Cygnet Industries Limited ("Cygnet").

MANAGEMENT DISCUSSION & ANALYSIS, BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT AND CORPORATE GOVERNANCE

The Management Discussion & Analysis, Business Responsibility & Sustainability Report and the Report on Corporate Governance are attached as Annexures I, II & III respectively to this Report.

CREDIT RATING

Credit Rating related details are disclosed in the attached Report on Corporate Governance.

RISK MANAGEMENT FRAMEWORK

The Company continues to implement a robust risk management framework under the guidance of the Board's Risk Management Committee.

Cygnet Industries Limited, the Company's wholly owned subsidiary is also part of this risk management framework. SIGNIFICANT AND MATERIAL REGULATORY ORDERS

There were no significant or material regulatory orders during the year that could possibly impact or influence the Company's going concern status and/ or its future operations.

INTERNAL FINANCIAL CONTROL AND ITS ADEQUACY

The Company's Internal Financial Control Systems continues to be commensurate with its size, nature and complexity of business operations.

Internal Audit, a key feature of the Company's internal control system, is conducted by a dedicated team of professionals. The Board's Audit Committee monitors the internal audit process to ensure its smooth functioning and the consistent maintenance of oversight over the control systems instituted by the Company.

CORPORATE GOVERNANCE Number of Meetings of the Board

During the year, seven Board Meetings were held. Meeting particulars are appended in the attached Report on Corporate Governance.

Policy on Director Appointment and Remuneration

The present Company Policy on Director appointment and remuneration, including criteria for determining qualifications, positive attributes, independence and other related matters as contemplated in Section 178(1) of the Companies Act, 2013

("the Act") is available on the web-link https://www.kesocorp.com/DOCS/pdf/mgc/nomination-and-remuneration-policy.pdf

It is affirmed that the remuneration paid to Company Directors during the year have been as per the terms set out in the Company's Nomination & Remuneration Policy.

Declaration by Independent Directors

The Company has received the requisite declarations from each Independent Director under Section 149(7) of the Act, affirming that each of them duly met the criteria of independence as prescribed in Section 149(6) of the Act and Regulation 25 of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 ("LODR").

Board Evaluation

This year too Board Members underwent an elaborate process of evaluation of the Board's own effectiveness, that of its Committees and also individual Board Members. The process included an appraisal of the functioning of the Chairman of the Board as well as the Whole-time Director at a Meeting of Independent Directors.

Familiarisation programme for Independent Directors

There were no Directorial appointments during the year.

The procedure followed for familiarising Independent Directors with corporate operations appears in the Report on Corporate Governance.

DIRECTORATE

Jikyeong Kang (DIN: 08045661), Non-Executive Non Independent Director of the Board, retires by rotation at the forthcoming Annual General Meeting("AGM") and being eligible, offers herself for re-appointment. Her brief profile is annexed to the Notice of AGM.

Based upon approvals obtained from the Company's general body of Shareholders, Lee Seow Chuan (DIN: 02696217), an Independent Director, to continue as such even though he attained 75 years of age during the year.

Rashmi Bihani (DIN: 07062288), a distinguished Practicing Chartered Accountant, was appointed as an Additional Director of the Company effective 22^nd April, 2024. She will hold office as such till the conclusion of the ensuing Annual General Meeting. Her appointment as an Independent Director is being proposed for approval at the ensuing "AGM".

KEY MANAGERIAL PERSONNEL

The following persons functioned as Key Managerial Personnel during the year:

BOARD COMMITTEES

As at 31^st March, 2024, the Board had six Committees comprising of the Audit Committee, the Nomination and Remuneration Committee, the Stakeholder Relationship Committee, the Risk Management Committee, the Corporate Social Responsibility Committee and Fund Raising Committee.

All recommendations made by such Committees were noted by the Board. There was no instance of disagreement between the Board and the recommendations of the concerned Committees.

A detailed note on the composition of the Board and its Committees appears in the Report on Corporate Governance. CORPORATE SOCIAL RESPONSIBILITY ("CSR")

No mandatory expenditure during the year on corporate social responsibility was envisaged as per Section 135 of the Act.

Nonetheless, the Company has never been found wanting in making dedicated spends that seek to desirably benefit those living in the vicinity of its two cement plants. No exceptions were made in this year either.

The Board's CSR Committee consisted of Manjushree Khaitan, K P Khandelwal and P. Radhakrishnan.

The Company's CSR Policy is available on the web link www.kesocorp.com/DOCS/pdf/mgc/kesoram-CSR-Policy-27042015. pdf.

A Report on CSR activities during the year is annexed to this Report and marked Annexure IV

CONTRACTS/ ARRANGEMENTS/ TRANSACTIONS MADE WITH RELATED PARTIES

The Board affirms that all related party transactions/ arrangements/ contracts entered into by the Company during the year were approved by the Audit Committee and were at arm's length basis and in the ordinary course of business.

No contract/ arrangement with any related party that could be considered material in accordance with the Company Policy on "Materiality of Related Party Transactions" or which required reporting in Form No. AOC-2 as per Section 134(3) (h) read with Section 188(1) of the Act was entered into during the year.

There were no materially significant related party transactions entered into by the Company that could have potential conflict with the interest of the Company at large.

The Company's Related Party Transaction Policy appears on the web- link www.kesocorp.com/DOCS/pdf/mgc/related-party- transactions-policy.pdf.

Related party transactions during the year as per the provisions of Indian Accounting Standard ("Ind AS") 24 have been disclosed in the Notes to the attached Financial Statements.

SUBSIDIARY, ASSOCIATE AND JOINT VENTURE COMPANY

Cygnet Industries Limited ("Cygnet") and Gondkhari Coal Mining Limited ("Gondkhari"), continued as a Wholly Owned Subsidiary and Joint Venture Company respectively.

The Financial Statements of Cygnet and Gondkhari (as applicable) as at 31^st March, 2024 have been consolidated with the Financial Statements of the Company form part of this Annual Report.

The turnover and Loss of Cygnet for the year stood at H 246.40 Crore and H 67.61 Crore as against H 244.30 Crore and H 78.61 Crore in the previous year.

Gondkhari, the Special Purpose Vehicle ("SPV"), was incorporated in 2009 as a Joint Venture between the Company and two other corporate entities for developing and working a coal block in the State of Maharashtra. Gondhkhari forfeited its sub-structure once the Supreme Court in 2014 de-allocated the coal block that was originally allocated. Full provision exists in the Company's books against its portion of investment in Gondkhari.

A Statement containing salient features of the Financial Statements of Cygnet and Gondkhari in the statutory Form AOC-1 appears in Annexure V of this Annual Report.

The Financial Statements of Cygnet, a material subsidiary, is available on the website of the Company www.kesorcorp.com. The Company's Policy on Material Subsidiaries is also available on the Company's website www.kesocorp.com PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

Inter corporate financial exposures as at the end of the year appears under Note No. 8 to the Financial Statements.

The Company has not given any loan and /or guarantee or made any investment within the meaning of Section 186 of the Act during the year.

VIGIL MECHANISM/ WHISTLE BLOWER POLICY

The Company has in place a Vigil Mechanism/ Whistle Blower Policy as detailed in the Report on Corporate Governance. The Policy is available on the web-link www.kesocorp.com/DOCS/pdf/mgc/whistle-blower.pdf

REPORTING OF FRAUD BY THE AUDITORS

No fraud has been reported by the Auditors under Section 143(12) of the Act. Therefore, no disclosures are required under Section 134(3) (ca) of the Act.

STATUTORY AUDITORS

The Report of the Statutory Auditors for the year ended 31^st March, 2024 forms part of this Annual Report. The Report is free from any qualifications, reservations or disclaimers. Observations therein are self-explanatory.

COST AUDITORS

Mani & Co., Cost Accountants, was appointed to conduct the audit of the Company's cost accounting records pertaining to its Cement Business for the year at a remuneration of H 5.47 Lakh, excluding tax and reimbursement of out of pockets.

A Resolution for ratification of the above remuneration is being proposed at the forthcoming AGM.

SECRETARIAL AUDITORS & SECRETARIAL STANDARDS

Ritu Bajaj, Practicing Company Secretary was appointed as Secretarial Auditor to conduct audit of the Company's secretarial records for the year. Her Report is annexed and marked as Annexure VI. The Report is free from any qualification, reservation or adverse remark. Observations therein are self-explanatory.

The Company has complied with all applicable Secretarial Standards.

The Secretarial Audit Report of the wholly owned subsidiary is also annexed with Annexure VI.

PARTICULARS OF EMPLOYEES

Disclosures pertaining to remuneration and other particulars as prescribed under the provisions of Section 197(12) of the Act read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are set out in Annexure VII of this Report. No employee listed in the Annexure is related to any Director.

However, in line with the provisions of the second proviso to Section 136(1) of the Act and as per extant Ministry of Corporate Affairs Circulars, this Annual Report is being sent to Members excluding the above information. Any Member interested in obtaining this information, is welcome to request the Company through email at corporate@kesoram.com.

POLICY ON SEXUAL HARASSMENT OF WOMEN AT THE WORKPLACE

The Company has an extant Policy on prevention, prohibition and redressal of sexual harassment of women at the workplace in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. The Policy is available on the weblink www.kesocorp.com/DOCS/pdf/mgc/policy-on-prevention-of-sexual-harassment- at-workplace.pdf.

The requisite Internal Committee(s) in accordance with Company Policy are also in place. No complaint on any issue covered by the above law was received during the year.

DIRECTORS' RESPONSIBILITY STATEMENT:

Pursuant to Section 134(5) the Act and, based upon representations from the Management, the Board of Directors, to the best of its knowledge and belief, states that:

(a) in the preparation of the Annual Accounts, applicable accounting standards have been followed along with proper explanation relating to material departures;

(b) such accounting policies have been selected and applied consistently and such judgments and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the Financial Year ended 31^st March, 2024 and of the profit and loss of the Company for that period;

(c) proper and sufficient care was taken 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;

(d) the Annual Accounts have been prepared on a going concern basis;

(e) internal financial controls have been laid down to be followed by the Company and that such internal financial controls are adequate and operating effectively; and

(f) proper systems have been devised to ensure compliance by the Company with the provisions of all applicable laws and that such systems were adequate and working effectively.

CODE OF CONDUCT

The Company has a laid down Code of Business Conduct and Ethics, based on ethics, integrity and transparency. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNING AND OUTGO Particulars relating to conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134(3)(m) of the Act read with the relevant Rule appears in Annexure VIII to this Report.

MATERIAL CHANGES BETWEEN THE END OF THE FINANCIAL YEAR AND DATE OF REPORT

There has been no material change between the end of the Financial Year and the date of this Report.

ANNUAL RETURN

The Company's Annual Return in Form MGT-7 can be viewed on the Company website www.kesocorp.com CHANGE IN THE NATURE OF BUSINESS

There has been no change in the nature of business of the Company during the year.

DISCLOSURE OF ACCOUNTING TREATMENT

Applicable Accounting Standards as prescribed from time to time under Section 133 of the Companies Act, 2013 read with Companies (Accounting Standards) Rules, 2016 have been followed in the preparation of the Financial Statements of the Company as at 31^st March, 2024.

INVESTOR EDUCATION & PROTECTION FUND (IEPF)

The details of unclaimed dividend & shares transferred to IEPF Authority is provided in the Investor Relations section on the Company's website www.kesocorp.com

PROCEEDINGS UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016

There are no pending proceedings under the Insolvency and Bankruptcy Code, 2016.

ONE-TIME SETTLEMENT WITH THE BANKS OR FINANCIAL INSTITUTIONS

No one-time settlement with Banks or Financial Institutions were entered into during the year.

ANNEXURES FORMING PART OF THIS REPORT

APPRECIATION

The Board takes this opportunity to express its deep sense of gratitude to Investors, Lenders, Central and State Governments, local authorities and other Stakeholders for their continued co-operation and support during the year.

We on behalf of the Board would like to place on record our sincere appreciation for the commitment, hard work and high engagement level of every employee and worker of the Company. We thank the various stakeholders of the Company including customers, dealers, suppliers, transporters, advisors, local community for their continued committed engagement with the Company.

For and on behalf of the Board