DIRECTORS' REPORT For The Year Ended March 31, 2015 The Directors have pleasure in submitting the Sixty Fifth Annual Report and Audited Statements of Account of the Company for the year ended March 31, 2015. OPERATIONS AND BUSINESS PERFORMANCE Management's Discussion and Analysis for the year under review on the operations and business performance, as stipulated under clause 49 of the Listing Agreement with Stock Exchanges, is presented in a separate section forming part of the Annual Report. DIVIDEND The Directors have recommended a dividend of Rs.4/- per paid up equity share of Rs.2/- each for the current Financial Year ended on March 31, 2015. CAPTIVE COAL BLOCK Hon'ble Supreme Court of India by its order dated September 24, 2014 on a public interest litigation has declared all allocations of the Coal Blocks made through Screening Committee and through Government Dispension route since 1993 as illegal and has quashed the allocation of Coal Blocks including Radhikapur (West) Coal Block. CORPORATE GOVERNANCE REPORT The Company's corporate governance practices have been detailed in the Corporate Governance Report which is attached separately and forms part of this Report. SUBSIDIARIES, ASSOCIATES AND JOINT VENTURE COMPANIES The Subsidiaries of the Company are OCL Global Limited, OCL China Limited and Odisha Cement Limited. Radhikapur (West) Coal Mining Private Limited is the Joint Venture Company of Rungta Mines Limited, Ocean Ispat Limited and OCL India Limited. There is no Associate Company. There has been no change in subsidiaries, joint ventures and associate companies during the Financial Year 2014-15. The Company has formulated a Policy on Material Subsidiary Companies on the recommendation of Audit Committee and with the approval by the Board of Directors. The same is disclosed on the Company's website at <http://www.oclindialtd>. in/postal_doc/MaterialSubPolicy.pdf. In terms of the said policy, the Company does not have any Material Subsidiary. The report on the performance and financial position of each of Company's Subsidiaries, Associates and Joint Venture Companies for the Financial Year ended March 31, 2015 in Form AOC 1 is attached as Annexure - 1 and forms parts of this Report. The detailed Annual Reports of Subsidiaries, Associates and Joint Venture Companies are posted on the Company's website www.oclindialtd.in EXTRACT OF ANNUAL RETURN In compliance with Section 134(3) read with Section 92(3) of the Companies Act, 2013 ("Act") and Rule 12 of Companies (Management and Administration) Rules, 2014, the Extract of Annual Return in Form MGT-9 is attached as Annexure - 2 and forms part of this Report. DIRECTORS AND KEY MANAGERIAL PERSONNEL The Board of Directors has made following appointments to the Board, subject to the approval of Shareholders in terms of the Companies Act, 2013,in its meeting held on March 31, 2015 - a) Shri Puneet Yadu Dalmia as Managing Director, Key Managerial Personnel for a term of five years with effect from April 01, 2015 to March 31, 2020 as not liable to retire by rotation. b) Smt. Sudha Pillai as an Additional Director in the category of Independent Director for a term of five years with effect from March 31, 2015 to March 30, 2020 as not liable to retire by rotation. c) Shri Mahendra Singhi as an Additional Director and as Chief Executive Officer and Whole Time Director, in the category of Key Managerial Personnel, for a term of four years with effect from April 01, 2015 to March 31, 2019 as not liable to retire by rotation. d) Shri Amandeep as an Additional Director and as Whole Time Director and Chief Executive Officer - Cement Division of the Company for a term of five years with effect from April 01, 2015 to March 31, 2020 as liable to retire by rotation. e) The Board of Directors has also appointed Shri Gautam Dalmia and Shri Jayesh Doshi as Additional Directorswith effect from April 01, 2015 to hold office as such till the forthcoming Annual General Meeting. The term of Shri Gaurav Dalmia as Managing Director and Shri D. D. Atal as Whole Time Director has expired on March 31, 2015. Also, Shri D. D. Atal and Dr. S. R. Jain have resigned from the Board of Directors with effect from March 31, 2015 and Dr. R. C. Vaish has resigned with effect from May 10, 2015. The Board places on record its appreciation for the valuable services rendered by each of them during their tenure with the Company and with the Board. Shri Gaurav Dalmia, Director of the Company, would retire by rotation at the forthcoming Annual General Meeting and being eligible offer himself for re-appointment. In addition to Shri Puneet Yadu Dalmia, Managing Director and Shri Mahendra Singhi, Chief Executive Officer and Whole Time Director, Shri D. N. Singh, Chief Financial Officer and Executive Director (Finance) and Smt. Rachna Goria, General Manager (Legal) & Company Secretary are the Key Managerial Personnel of the Company. Declaration by Independent Directors and their meeting Independent Directors have given declaration in terms of Section 149(7) of the Act that they meet the criteria of independence as provided in Section 149(6) of the Act. The Independent Directors held a separate meeting in terms of Schedule V to the Companies Act, 2013 and inter-alia reviewed the performance of Non-Independent Directors, Chairman and Board as a whole and found the same to be satisfactory. Also, it was recognized that valuable, significant and timely information was provided by the management to the Board for its decision making. Familiarization Programme for Independent Directors The Board members are provided with necessary documents, reports and policies to enable them familiarize with the Company's procedures and practices. Periodic presentations on business segments are made at the Board meetings of the Company. One such presentation on cement business of the Company made at the Board of Directors meeting was posted on the Company's website at <http://www.oclindialtd.in/board_of_directors.php> Nomination and Remuneration Policy The Nomination and Remuneration Policy of the Company on Director's appointment and remuneration including criteria for determining qualifications, positive attributes, independence of the Directors and other matters provided in section 178(3) of the Act has been approved by the Board of Directors on the recommendation of the Nomination and Remuneration Committee. The said Policy is attached as Annexure - 3 and forms part of this Report. Formal Annual Evaluation of Performance of Board/ Committees and Directors The Formal Annual Evaluation of performance of Board, its Committees and individual Directors was made at the Board meeting in accordance with Criteria for performance evaluation of Board, its Committees and Directors (including Independent Directors) as was approved by the Board of Directors on recommendation of the Nomination and Remuneration Committee. It was noted that the Directors were meeting highest standards professing and ensuring best practices in the overall relation of Corporate Governance of the Company's affairs. The Criteria for performance evaluation of Board, its Committees and Directors including Independent Directors is attached as Annexure - 4 and forms part of this Report. BOARD OF DIRECTORS, ITS COMMITTEES AND THEIR MEETINGS Reference is invited to the attached Corporate Governance Report, which forms part of this Report, for the details thereof. The Board has accepted all recommendations made by the Audit Committee. CORPORATE SOCIAL RESPONSIBILITY A Corporate Social Responsibility Committee has been formed by the Board of Directors. The said Committee comprised of the following members - a) Dr. R. C. Vaish - Chairman b) Shri Gaurav Dalmia - Member c) Shri V. P. Sood - Member d) Shri D. D. Atal - Member However, pursuant to the expiry of term of Shri Gaurav Dalmia as Managing Director and of Shri D. D. Atal as Whole Time Director and resignation of Shri D. D. Atal from the Board of Directors with effect from March 31, 2015 and resignation of Dr. R. C. Vaish with effect from May 10, 2015, the CSR Committee has been reconstituted as under: i) Shri V. P. Sood -Independent Director- Chairman ii) Shri Mahendra Singhi - CEO and Whole Time Director iii) Shri Amandeep - Whole Time Director A Corporate Social Responsibility Policy, as recommended by the Corporate Social Responsibility Committee, has been approved by the Board of Directors. The said Policy may be accessed on the Company's website www.oclindialtd.in Annual Report on Corporate Social Responsibility activities in terms of Rule 9 of Companies (Corporate Social Responsibility Policy) Rules, 2014 is attached as Annexure -5 and forms part of this Report. Pursuant to the said policy, the Company has made expenses aggregating to Rs.2.79 Crore towards Corporate Social Responsibility during the Financial Year 2014-15, which is more than 2% of average net profits of the Company made during three immediately preceding Financial Years. RISK MANAGEMENT A Risk Management Committee has been formed by the Board of Directors. The said Committee comprised of the following members - a) Shri D. N. Davar - Chairman b) Shri Gaurav Dalmia - Member c) Dr. R. C. Vaish - Member d) Dr. S. R. Jain - Member e) Shri D. D. Atal However, in view of resignation of Dr. S. R. Jain and Shri D. D. Atal from the Board of Directors with effect from March 31, 2015 and of Dr. R. C. Vaish with effect from May 10, 2015, Shri Mahendra Singhi and Shri Amandeep have been inducted as members of the said Committee with effect from April 01, 2015. The terms of the reference of the Risk Management Committee in brief are as under: a) To identify the elements of risk, if any, from time to time, that in the opinion of the Board may threaten the existence of the Company. b) To monitor and review the existing risk management plan and such other functions as it may deem fit. c) To lay down the procedures to inform the Board members about the risk assessment and minimization procedures. The Risk Management Committee has approved appointment of professional firm having exposure in the study of various business risks relating to the industry to assist in developing a Risk Management Policy document identifying various risks and their mitigation plans. RELATED PARTY POLICY AND TRANSACTIONS The Company has formulated a Related Party Transactions Policy on the recommendation of Audit Committee and approval by the Board of Directors. The same is posted on the Company's website at <http://www.oclindialtd.in/postal_doc/> RelPartyPolicy.pdf. There are no contracts or arrangements or transactions with Related Parties which are not on arms length basis and there are no material contracts or arrangements or transactions which are at arms length basis. LOANS, GUARANTEES, SECURITY AND INVESTMENTS Particulars of Loans and Guarantees given, securities provided and Investments made under Section 186 of the Act are provided in the Standalone Financial Statements at note nos. 13 and 29. ADEQUACY OF INTERNAL FINANCIAL CONTROLS Your Company has in place adequate internal financial controls commensurate with the size and volume of business of the Company and same are operating effectively. No material weakness in the internal control system has been observed. Further, a professional firm is being appointed to assist in documenting existing process for internal financial control (IFC). WHISTLE BLOWER POLICY The Company has made a Whistle Blower Policy for Directors & Employees on the recommendation of Audit Committee and approval by the Board of Directors. The same is disclosed on the Company's website www.oclindialtd.in DIRECTORS RESPONSIBILITY STATEMENT In terms of provisions of Section 134 (3)(c) read with Section 134 (5)of the Act, 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 Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give true and fair view of the state of affairs of the Company as on March 31, 2015 and of the Profit of the Company for the year ended on that date; c) The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; d) The Directors have prepared the annual accounts of the Company on a going concern basis; e) The Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively. f) The Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively. PARTICULARS OF REMUNERATION OF DIRECTORS, KEY MANAGERIAL PERSONNEL AND EMPLOYEES The particulars of remuneration of Directors/Key Managerial Personnel/ Employees in terms of the provisions of Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014, are attached as Annexure - 6 and forms part of this Report. Further, in terms of the provisions of Section 197(12) of the Act read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing the names and other particulars of the employees drawing remuneration in excess of the limits set out in the said Rules are attached as Annexure - 7 and forms part of this Report. Having regard to the provisions of first proviso to Section 136(1) of the Act, the Annual Report excluding the aforesaid information in Annexure - 7 is being sent to the members of the Company and others entitled thereto. Any member interested in obtaining such particulars may write to the Company Secretary and same will be furnished on request. AUDITORS Statutory Auditors M/s V. Sankar Aiyar & Co., Chartered Accountants, Statutory Auditors of the Company, holds office until the conclusion of the Sixty Seventh Annual General Meeting of the Company to be held in the year 2017 and is not eligible for re-appointment thereafter. However, their appointment need to be ratified by the shareholders at the forthcoming Annual General Meeting in terms of Section 139 of the Act. Cost Auditor The Company has received from M/s R. J. Goal & Co., Cost Accountants, having office at 31, Community Center, Ashok Vihar, Phase - I, New Delhi - 110 052 and having firm registration no. 00026, consent to act as Cost Auditors and certificate to the effect that their re-appointment would be within the prescribed limits under Section 141(3)(g) of the Act and that they are not subject to disqualifications specified in Section 141(3) the Act. The Cost Auditors have further certified that they are independent firm of Cost Accountants and are at arms length relationship with the Company. SECRETARIAL AUDITOR AND THEIR REPORT The Board of Directors has appointed Vikas Gera & Associates as Secretarial Auditor of the Company for the Financial Year 2014-15. The Secretarial Audit Report given by the Secretarial Auditor in Form MR-3 is annexed as Annexure - 8 and forms part of this Report. COMMENTS ON QUALIFICATION, RESERVATION OR ADVERSE REMARK OR DISCLAIMER MADE BY AUDITOR/ SECRETARIAL AUDITOR IN THEIR RESPECTIVE REPORT There is no qualification, reservation or adverse remark or disclaimer made by Auditor/Secretarial Auditor in their respective reports. UNCLAIMED SUSPENSE ACCOUNT In terms of clause 5A of the Listing Agreement, the Company has opened the demat account. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO SIGNIFICANT ORDERS There are no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and Company's operations in future. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013 The Company has in place Charter against sexual harassment of women at workplace in compliance with Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013. During the year, no complaint has been received by the Internal Complaints Committee/s. HEALTH, SAFETY AND ENVIRONMENT Health and safety of employees and clean environment receives utmost priority at all locations of your Company. It has already implemented EHS System and provided safe working environment at its plants and mines. Use of personal protective equipment by employees have become compulsory and training programs on health, safety and occupational health are being conducted on a continuous basis. Your Company has launched the new safety and housekeeping programme during the current year which has substantially improved the plants housekeeping. The endeavor of your Company is to make all its plants completely safe and keep all its employees healthy. Your Company has taken up a new initiative to make its plants and colony tobacco free area. Its' Lanjiberna Limestone and Dolomite Mines has bagged six awards in the 52nd Annual Mines Safety Week organized by Director General of Mines Safety, Chaibasa Region. Refractory Unit of your Company has bagged 15th Annual Greentech Environment Award-2015 in Silver category under Chemical Sector. Your Company has planted many additional trees during the year and has created green belt over 35% of its land. Your Company has philosophy that 'clean and green' is more profitable. INDUSTRIAL RELATIONS Industrial Relations during the year under review were quite peaceful and cordial. Your Company entered in to long term wage settlement granting substantial increase in wages and other benefits of workmen of Cement, Refractory and Lanjiberna Mines. ACKNOWLEDGEMENTS Your Directors wish to place on record their appreciation of the support provided by your Company's Bankers and Financial Institutions. Your Directors acknowledge the dedication and commitments of the employees at all levels and also take this opportunity to thank all the valued customers who have appreciated the Company's products and have patronized them. Your Directors convey their grateful thanks to the Government Authorities (Central & States), shareholders, distributors and dealers for their continued assistance, co-operation and patronage. For & on Behalf of the Board Puneet Yadu Dalmia Managing Director Mahendra Singhi Chief Executive Officer and Whole Time Director Date: May 11, 2015 Place: New Delhi |