The Directors are pleased to present the 22^nd Annual Report together with the Audited Financial Statements of the Company for the Financial Year ended 31^st March 2018.

FINANCIAL RESULTS

(Rs. in Lakh)

PERFORMANCE

After commissioning of its integrated cement plant in March 2017, your Company has successfully run the plant operation and launched its "PLATINUM HEAVY DUTY CEMENT" brand which gained well acceptance in the nearby market. During the Financial Year 2017-18, the production scaled a new high at 10.72 Lakh tonnes with sales at 10.74 Lakh tonnes. The Company's EBIDTA stood higher at Rs.2180.75 Lakhs during the Year compared to Rs.385.23 Lakhs in the previous Year. However, due to higher depreciation and finance cost, the Company suffered a net Loss of Rs.4370.85 Lakhs against a net profit of Rs.274.00 Lakh in the previous Financial Year.

OUTLOOK FOR INDIAN ECONOMY

Indian economic growth, after hitting a three-year low of 5.7% in the first Quarter of the Financial Year 2017-18, made an impressive comeback in the second Quarter to 6.3%, which further increased to 7.2% in the third Quarter and continued its upward climb to 7.7% in the fourth Quarter on the back of strong performance in manufacturing sector. With this, Indian Economy has regained its momentum and reclaimed 'world's fastest growing economy' tag from China. It is heartening to note that during the Year, there has been notable reduction in the fiscal deficit as a percentage of GDP.

Lower inflation coupled with healthy growth in direct as well as in indirect tax collection is a good sign for the industry as well for the economy. With emphasis on infrastructure and housing, we expect that cement demand will bounce back to respectable levels, signs of which are already visible during last a few months.

Yet there are some signs of worry as well. Weakening of Rupee against Dollar and rising crude oil prices will impact the industry and economy in terms of rising costs and reducing operating margins. To offset these cost pressure, it is important that there is healthy growth in demand which would lead to better capacity utilization and consequent reduction in the fixed cost. A good monsoon combined with robust growth in rural income and rural demand could well be the key to sustain the growth momentum.

Your Company has adequate systems and processes to continuously monitor the economic environment at macro and micro level, analyze the impact on the industry in general and the Company in particular such that proactive actions can be taken either to mitigate the risks or to make use of the arising opportunities.

INDUSTRY OVERVIEW - THREAT & OPPORTUNITIES

Government spending on large infrastructure development projects such as Highways, Freight Corridors, Industrial Corridors, Inland Water Ways, Ports, etc. has always been the key driver of growth in cement demand and boosting of industry sentiments. In addition to these, private spending on housing and real estate is also significant contributor to overall demand for cement in the country. Though the tough economic reforms such as demonetization in November 2016 and GST implementation in July 2017 did turn out to be dampener in demand growth but it now appears that the worst is over and the tide is gradually turning back.

Since last six months or so there has been a healthy growth in Cement Demand and we expect that this momentum shall now continue for a considerable long duration. This to some extent may provide some respite to the industry which at an aggregate level has nearly 40% surplus capacity, however, as witnessed in past, industry capacity utilization levels reaching in the vicinity of 80% provide a fresh trigger for new capacity additions. Hence, surplus capacity of ~20% seems to be a new industry norm. A reasonable surplus capacity is a good sign as it provides industry with a cushion to absorb unexpected surge in demand; especially when last a few years have seen a small percentage cement demand being substituted with other alternative construction materials. It is also an opportunity for the Industry to strive hard and expand the markets to those who till now have been non users.

The 'Housing for All' initiative of the government of India and especially the rural is one such opportunity for the industry to reach out to those who would perhaps be the first time user of cement. This indeed is a very challenging task; as to reach out to this new emerging segment of the market. The distribution and logistics will have to penetrate deep inside into the pockets where they have never been before. It is satisfying to note that your Company is putting its best foot forward to tap these emerging segments of the demand. We are working to strengthen our distribution network in our core markets and in fact in a short span of one year, more than 70% of our sales are achieved through distribution network which in industry parlance is better known as trade channel.

However, rising fuel cost is one of the worry that the industry will have to grapple with for quite some time in this environment of global uncertainties. At the same time, it is also an opportunity for the industry to be more efficient and explore new alternatives. The potential of using municipal solid waste and other industrial waste materials as fuel is a bit under-explored in India and hence is an opportunity. Industry has taken a pledge to increase the usage of alternative fuels including the plastic waste and the recently notified Plastic Waste Management Rules 2016 provide industry an opportunity to work with local municipal bodies and turn the waste into wealth.

Your company is continuously striving to maximize the leveraging of emerging opportunities and also minimizing the impact of these threats. As the manufacturing operations are gradually stabilizing and are expected to improve the operational efficiencies, our efforts of consolidating our presence in the market would certainly lead to better operating performance in the times to come.

HUMAN CAPITAL MANAGEMENT

The Company is known for its people centric approach ever since its inception. The Company has adopted best HR practices for retaining talents in the Organisation. To name a few, we have been able to initiate HR initiatives afresh for developing learning culture and starting programmes on Emerging Leadership, Strengthening PMS system through SMART based KRAs, 360 degree feedback, Launching of various employee engagement activities viz. Quality circles, SGAs, CFTs, 5S activities etc. Besides suggestion scheme and structured communication process, various training programmes for employee skill development both on functional and behavioral aspects are being organised in a structured way befitting benchmark practices.

With a view to develop belongingness amongst the employees and considering need of social, cultural and spiritual developments, planned welfare activities are being conducted in the plant. In order to retain talent in the Organisation, we have focussed on various key parameters like recruitment, career development, performance management, award & recognition, executive coaching & mentoring, motivating employees, employee survey, exit interviews etc.

CSR activities are being carried out mainly in eight nearby villages of Plant and Mines areas. Your Company focuses on five basic community needs such as Education, Health, Sustainable Livelihood, Rural Development and Social Causes at large.

Way forward, the Company has reviewed its earlier twelve Core Competencies for talent assessment and adopted seven Core Competencies for its executive development plan. The Company is constantly improving on People Management Practices and taking every step to enrich our major HR thrust areas which in turn has helped the Company in getting excellence in development on Human Capital. This has also paved way for CII and Green Tech Foundation Awards for environment, health and safety.

Fair and consistent HR Policies followed by the Management ensure that Industrial Relations continue to be peaceful and cordial. Workers are given adequate opportunities/encouragement to share new ideas. Company also gives due weightage to job enrichment of workers and compensation.

ENVIRONMENT, HEALTH AND SAFETY

Occupational environment, health and safety has always been on the priority agenda of the Management. It is gratifying to note that your Company has received the 'Greentech Safety Gold Award-2017', Certificate of appreciation from National Safety Council of India for appreciable achievement in Occupational Safety & Health for three years period: 2013-15, First Runner up for CII Northern Region Inter Industry Competition on Environment, Health and Safety Management and also received the First Prize for Publicity & Propaganda in Mechanized Opencast Mines (Group-A1) during Mine Safety Cleanliness and Silicosis Awareness Week 2017.

SHARE CAPITAL

During the Year, the Authorized Share Capital of the Company increased from Rs.200 Crore to Rs.250 Crore. As approved by the Members at the Annual General Meeting held on 10^th August 2017, the Company issued 50,00,000, 6% Optionally Convertible Cumulative Redeemable Preference Shares of Rs.100 each (OCCRPS), aggregating upto Rs.50 Crore to JK Lakshmi Cement Limited, the Holding Company (JKLC), on preferential basis on 10^th August 2017.

As per the Terms of Issue of OCCRPS, JKLC has exercised its right to convert 45,00,000 OCCRPS (part conversion out of 50,00,000 OCCRPS held) into Equity Shares of the Company. Consequently, 1,62,04,537 Equity Shares of Rs.4 each, fully paid-up, of the Company were allotted to JKLC on 10^th May 2018 @ Rs.27.77 per Share pursuant to SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009 and the paid-up Equity Share Capital of the Company has increased from Rs.118.08 Crore to Rs.124.56 Crore.

INTERNAL CONTROL SYSTEM

The Company has in place adequate Internal Control System commensurate with the size and level of operations of the Company and the same were operating effectively throughout the year. The Internal Audit Team apart from submitting its Reports on the Audit Observations also submits its Report on the efficacy and adequacy of Internal Control Systems to the Chairman of Audit Committee of the Board. There are adequate checks & balances in place, wherein deviation from the systems laid-out are clearly identified and corrective actions are taken in the respective areas, wherever required.

INTERNAL FINANCIAL CONTROLS

The Company has in place adequate Internal Financial Control Policies and Procedures in relation to the size and nature of operations of the Company. This ensures accuracy and comprehensiveness of the Financial & Accounting Records. These are adequate for safeguarding of its assets and effective towards prevention and detection of frauds and errors. The Policies and Procedures are also adequate for orderly and efficient conduct of business of the Company. During the year, no reportable material weaknesses were observed in the system.

EXTRACT OF ANNUAL RETURN

An extract of the Annual Return as on 31^st March 2018 in the prescribed Form MGT-9 is attached as Annexure 'A' to this Report and forms a part of it.

RELATED PARTY TRANSACTIONS

All the Related Party Transactions entered into by the Company with JK Lakshmi Cement Ltd. (JKLC), the Holding Company and Hansdeep Industries & Trading Company Ltd. (HITCL), the Fellow Subsidiary during the Financial Year 2017-18, were within the limits of ' 750 Crore each, as authorized by the Members at the Annual General Meeting of the Company held on 17^th September 2016 (AGM) and were in due compliance with the applicable provisions of the Companies Act, 2013 (Act) and the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015. A Statement showing particulars of such contracts or arrangements entered into with JKLC & HITCL in the prescribed Form AOC-2, pursuant to Section 134(3)(h) of the Act, is attached as Annexure 'B' to this Report.

JKLC and HITCL continue to provide all requisite assistance and support including technical, financial and operational support to the Company in the normal course of business. The Board has recommended Resolutions seeking fresh omnibus approval of the Members by way of renewal for the Financial Year 2018-19 and onwards, within the limits already approved by the Members at the above AGM, in respect of Related Party Transactions that may be entered into with JKLC & HITCL, on an annual basis, as approved by the Audit Committee of Directors from time to time, in the ordinary course of business and on arm's length basis. The Related Party Transaction Policy approved by the Board is available on the website of the Company.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENT

The particulars of loans given, guarantees or securities provided and investments made as required under the provisions of Section 186 of the Companies Act, 2013 are given in the Financial Statements.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

The Board of Directors of the Company has re-appointed Shri Rohni Kumar Gupta as a Whole-time Director of the Company, for a period of six months w.e.f. 1^st April 2018, subject to requisite approval of the Members at the forthcoming Annual General Meeting (AGM). Pursuant to Section 152 of the Companies Act, 2013 (Act), Shri Rohni Kumar Gupta also retires by rotation at the forthcoming AGM and being eligible offers himself for re-appointment. The Board recommends re-appointment of Shri Rohni Kumar Gupta.

Shri Ganpat Singh, Non-executive Director, resigned from the Directorship of the Company w.e.f. 20^th June 2018 owing to personal reasons. The Board places on record its appreciation of the valuable services rendered by him during the course of his tenure with the Company.

Shri Vinit Marwaha, a Director liable to retire by rotation, was appointed as an Independent Director of the Company by the Board w.e.f. 10^th May 2018 to hold office for a term of 5 consecutive years subject to requisite approval of the Members at the forthcoming AGM. The Company has received requisite Notice pursuant to Section 160 of the Act from Member and declaration from Shri Vinit Marwaha regarding his independence pursuant to Section 149 of the Act and Regulation 16 of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 (Listing Regulations). The Board recommends appointment of Shri Vinit Marwaha as an Independent Director of the Company, not liable to retire by rotation.

Further, with a view to strengthen the Board, the Board appointed Smt. Vinita Singhania, Shri Shrivats Singhania, Shri Surendra Malhotra and Shri Naveen Kumar Sharma as Additional Directors of the Company w.e.f. 30^th June 2018. They shall hold such office of Directors upto the date of forthcoming AGM of the Company. Requisite Notices pursuant to Section 160 of the Act have been received from Members of the Company proposing their candidatures as Directors of the Company. The Board recommends appointment of Smt. Vinita Singhania, Shri Shrivats Singhania and Shri Naveen Kumar Sharma as Directors liable to retire by rotation. Approval of the Members is also sought for appointment of Shri Naveen Kumar Sharma as Whole-time Director of the Company for period of 3 years w.e.f. 1^st October 2018. The Board also recommends appointment of Shri Surendra Malhotra as an Independent Director of the Company for a term of 5 consecutive years w.e.f. 30^th June 2018. The Company has received requisite declaration from him regarding his independence pursuant to Section 149 of the Act and Listing Regulations. As an Independent Director, Shri Malhotra shall not be liable to retire by rotation.

All the Independent Directors of the Company have given requisite declarations confirming that they meet the criteria of independence as provided in Act and Listing Regulations.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION & FOREIGN EXCHANGE EARNINGS AND OUTGO

The details as required under Section 134(3)(m) of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014 are annexed to this Report as Annexure 'C' and forms part of it.

DEPOSITS

The Company has neither invited nor accepted any deposits from the public.

AUDITORS

(a) Statutory Auditors and their Report

M/s Bansilal Shah & Co., Chartered Accountants, were appointed as Statutory Auditors of the Company to hold office from the conclusion of the 21^st Annual General Meeting (AGM) held on 10^th August 2017 until the conclusion of the 23^rd AGM to be held in the Year 2019, subject to ratification by the Members at subsequent AGM to be held in the year 2018 in accordance with the provisions of the Companies Act, 2013. However, pursuant to the Companies (Amendment) Act, 2017, the requirement of ratification of appointment of the Auditors on yearly basis has been dispensed with. The observations of the Auditors in their Report on Accounts and the Financial Statements, read with the relevant notes are self-explanatory.

(b) Secretarial Auditor and Secretarial Audit Report

Pursuant to the provisions of Section 204 of the Companies Act, 2013, the Board of Directors appointed Shri Namo Narain Agarwal, Company Secretary in Practice, as Secretarial Auditor to carry out Secretarial Audit of the Company for the Financial Year 2017-18. The Report given by him for the said Financial Year in the prescribed format is annexed to this Report as Annexure 'D'. The Secretarial Audit Report does not contain any qualifications, reservations or adverse remarks.

(c) Cost Auditor and Cost Audit Report

M/s HMVN & Associates, Cost Accountants, conducted the Audit of cost records of the Company for the Financial Year ended 31^st March 2017 and as required, Cost Audit Report was duly filed with the Ministry of Corporate Affairs, Government of India.

The Audit of the Cost Records of the Company for the Financial Year ended 31^st March 2018 is being conducted by the said Firm and their Report will be duly filed.

PARTICULARS OF REMUNERATION

Disclosure of the ratio of the remuneration of each Director to the median employee's remuneration and other requisite details pursuant to Section 197(12) of the Companies Act, 2013 (Act) read with Rule 5 (1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended, is annexed to this Report as Annexure 'E'. Further, Particulars of Employees pursuant to Rule 5(2) & (3) of the above Rules, form part of this Report. However, in terms of provisions of Section 136 of the said Act, the Report and Accounts are being sent to all the Members of the Company and others entitled thereto, excluding the said particulars of employees. The said information is available for inspection at the Registered Office of the Company during business hours on working days of the Company up to the forthcoming Annual General Meeting. Any Member interested in obtaining such particulars may write to the Company Secretary.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS

During the Financial Year under review, there were no significant and material orders passed by the Regulators or Courts or Tribunals which would impact the going concern status of the Company and its future operations.

CHANGE IN THE NATURE OF BUSINESS

During the Year under review, there was no change in the nature of business.

CORPORATE GOVERNANCE

Your Company reaffirms its commitment to the highest standards of corporate governance practices. Pursuant to Regulation 34 of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, Corporate Governance Report and Auditors' Certificate regarding compliance of conditions of Corporate Governance are made a part of this Report. The Corporate Governance Report also covers the following:

(a) Particulars of the four Board Meetings held during the Financial Year under review.

(b) Policy on Nomination and Remuneration of Directors, Key Managerial Personnel and Senior Management including, inter alia, criteria for determining qualifications, positive attributes, independence of a Director, etc.

(c) The manner in which formal annual evaluation has been made by the Board of its own performance and that of its Committees and individual Directors.

(d) The details with respect to composition of Audit Committee and establishment of Vigil Mechanism.

(e) Details regarding Risk Management.

COMPLIANCE OF SECRETARIAL STANDARDS

Based on the Secretarial Audit Report of the Secretarial Auditor, the Company has duly complied with the applicable Secretarial Standards on Meetings of the Board of Directors and General Meetings.

DIRECTORS’ RESPONSIBILITY STATEMENT

As required under Section 134(3)(c) of the Companies Act, 2013, your Directors state that:-

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

(b) the accounting policies have been selected and applied consistently and judgments and estimates made 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 and of the profit and loss of the Company for that period;

(c) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the said 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) the internal financial controls to be followed by the Company have been laid down and that such internal financial controls are adequate and were operating effectively; and

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

ACKNOWLEDGEMENTS

Your Directors wish to place on record their sincere gratitude and appreciation to the Government of Rajasthan, other Government Authorities, Lending Institutions/ Banks for their continued support and cooperation. Your Directors also wish to place on record their sincere thanks to Dealers, Suppliers, Vendors, Customers and esteemed Shareholders of the Company for the faith and confidence reposed by them in the Company and its Management.

We also express deep sense of gratitude to JK Lakshmi Cement Limited, our Holding company and Hansdeep Industries & Trading Company Limited, a Fellow subsidiary, for all the timely financial, technical and operational support extended and for making turnaround and revival of the Company possible.

Your Directors also wish to acknowledge and sincerely appreciate Employees at all level of the Organization who have contributed for the growth of the Company and whose unstinted efforts has enabled the Company to move ahead in tough times.

CAUTIONARY STATEMENT

The Directors' Report & Management Discussion and Analysis contains forward-looking statements, which may be identified by the use of words in that direction, or connoting the same. All statements that address expectations or projections about the future including but not limited to statements about your Company's strategy for growth, product development, market positions, expenditures and financial results are forward looking statements.

Your Company's actual results, performance & achievements could thus differ materially from those projected in such forward looking statements. The Company assumes no responsibility to publicly amend, modify or revise any forward-looking statements on the basis of any subsequent development, information or events.

On behalf of the Board of Directors

Vinit Marwaha R.K. Gupta

Place: New Delhi Director Whole-time Director

Date: 30^th June 2018 CFO & Company Secretary