THE DIRECTORS HAVE PLEASURE IN SUBMITTING THE SIXTY SIXTH ANNUAL REPORTAND AUDITEDSTATEMENTSOF ACCOUNTOF THE COMPANYFOR THE YEARENDED MARCH 31 2016.
| || ||(In Rs. Crore) |
| || |
2015 - 16
|2014 -15 |
|Net Revenue ||2635.65 ||2199.24 |
|Profit before interest depreciation and tax (EBITDA) ||594.07 ||370.95 |
|Less: Interest and Financial Charges ||132.91 ||71.01 |
|Profit before depreciation and tax (PBDT) ||461.16 ||299.94 |
|Less: Depreciation ||171.55 ||138.92 |
|Profit before taxation (PBT) ||289.60 ||161.02 |
|Provision for Current tax ||91.19 ||32.91 |
|Provision for Deferred tax ||- 37.87 ||16.25 |
|MAT credit charge/(entitlement) ||0.00 ||-1.83 |
|Profit after taxation (PAT) ||236.29 ||113.69 |
|Add: Surplus brought forward ||118.76 ||155.59 |
|Profit available for appropriation ||355.05 ||269.28 |
|Appropriations: || || |
|General Reserve ||0.00 ||120.00 |
|Debenture Redemption Reserve ||37.24 ||3.13 |
|Proposed Dividend ||0.00 ||22.76 |
|Interim Dividend ||22.76 || |
|Dividend Distribution tax thereon ||4.63 ||4.63 |
|Balance carried forward ||290.42 ||118.76 |
| ||355.05 ||269.28 |
Operations and Business Performance
Please refer to the chapter on Management Discussion and Analysis for a detailedanalysis of the performance of the Company during the Financial Year 2015-16.
The Directors had declared an interim dividend of Rs.4/- per equity share of Rs.2/-each (i.e. 200%). The said interim dividend shall be deemed as the final dividend for thecurrent Financial Year ended on March 31 2016.
Transfer to General Reserve
The Company proposes not to transfer any funds to the General Reserve.
Changes in Business
There has been no change during the Financial Year 2015-16 in the business carried onby the Company.
Corporate Governance Report
The Companys corporate governance practices have been detailed in the CorporateGovernance Report in terms of Schedule V of the SEBI (LODR) Regulations 2015 and same isattached separately together with the Auditors Certificate thereon and forms part ofthis Report.
Scheme of Arrangement and Amalgamation
The Board of Directors has at its meeting held on March 28 2016 approved the Scheme ofArrangement and Amalgamation amongst the Company Dalmia Cement East Limited Shri RangamSecurities & Holdings Limited Dalmia Bharat Cements Holdings Limited and OdishaCement Limited and their respective shareholders and creditors involving the following:
(a) Slump Sale of Rail Power & Solid Waste Management System Undertakings of theCompany to Odisha Cement Limited a wholly owned subsidiary of the Company as a goingconcern together with all its properties assets liabilities rights benefits andinterest therein without assigning value to individual assets and liabilities.
(b) Amalgamation of residual of the Company with Odisha Cement Limited.
(c) Slump Sale of Rail & Solid Waste Management System Undertakings of DalmiaCement East Limited to Odisha Cement Limited as a going concern together with all itsproperties assets liabilities rights benefits and interest therein without assigningvalue to individual assets and liabilities;
(d) Amalgamation of (i) residual Dalmia Cement East Limited (ii) Dalmia Bharat CementsHoldings Limited and (iii) Shri Rangam Securities & Holdings Limited with OdishaCement Limited; and
(e) Change in name of Odisha Cement Limited to "OCL IndiaLimited".
The scheme has been filed with the Stock Exchange(s) for obtaining their approvalbefore seeking the approval of the High Court under the provisions of the Companies Act1956.
Shifting of the Registered Ofice
The Board of Directors has at its meeting held on March 28 2016 approved theShifting of the Registered Office from the State of Odisha to the State of Tamil Naduunder the Jurisdiction of the Registrar of Companies Chennai subject to the approval ofthe Shareholders and the Central Government through the Regional Director Kolkata.
ICRA has certified long term rating at AA and the short term facilities at A1+ for yourCompany.
Subsidiaries Associates and Joint Venture Companies
The Subsidiaries of the Company are OCL Global Limited OCL China Limited and OdishaCement Limited. Radhikapur (West) Coal Mining Private Limited is the Joint Venture Companyof Rungta Mines Limited Ocean Ispat Limited and OCL India Limited. There is no AssociateCompany. There has been no change in subsidiaries joint ventures and associate companiesduring the Financial Year 2015-16.
The Companys Policy on Material Subsidiary Companies may be accessed on theCompanys website at http://www.oclindialtd.in/ postalfidoc/MaterialSubPolicy.pdf. Interms of the said policy the Company does not have any Material Subsidiary.
The report on the performance and financial position of each of CompanysSubsidiaries Associates and Joint Venture Companies for the Financial Year ended March31 2016 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 arenot being published in this report and any member desirous of obtaining a copy of the samemay write to the registered office of the Company or download the same from theCompanys website www.oclindialtd.in. Any member desirous to inspect the same mayconduct inspection at the Registered Office of the Company during business hours.
Consolidated Financial Statements
In compliance with Section 129(3) of the Companies Act 2013 ("Act") and theAccounting Standard 21 on Consolidated Financial Statements and Regulation 34(2)(b) of theSEBI (LODR) Regulations 2015 this Annual Report also includes Consolidated FinancialStatements for the Financial Year 2015-16.
Extract of Annual Return
In compliance with Section 134(3) read with Section 92(3) of the Act and Rule 12 ofCompanies (Management and Administration) Rules 2014 the Extract of Annual Return inForm MGT-9 is attached as Annexure 2 and forms part of this Report.
Directors and Key Managerial Personnel
Shri Jayesh Doshi Director of the Company would retire by rotation at the forthcomingAnnual General Meeting and being eligible offers himself for re-appointment.
In addition to Shri Puneet Yadu Dalmia Managing Director and Shri Mahendra SinghiChief Executive Officer and Whole Time Director Shri H. L. Agarwal Senior ExecutiveDirector (Finance) and Chief Financial Officer and Smt. Rachna Goria General Manager(Legal) & Company Secretary are the Key Managerial Personnel of the Company.
The Independent Directors have given their respective declaration of independence interms of Section 149(7) of the Act and have also held a separate meeting in terms ofSchedule IV to the Act and inter-alia reviewed the performance of Non-IndependentDirectors Chairman and Board as a whole and found the same to be satisfactory. Also itwas recognised that valuable significant and timely information was provided by themanagement to the Board for its decision making.
The Board members are provided with necessary documents reports and policies to enablethem familiarise with the Companys procedures and practices.
Periodic presentations on business segments are made at the Board meetings of theCompany. The details of familiarisation programs for Independent Directors of the Companycan be accessed at the website of the Company at http://www.oclindialtd.in/boardfioffidirectors.php
The Nomination and Remuneration Policy of the Company on Directors appointmentand remuneration including criteria for determining qualifications positive attributesindependence of the Directors and other matters provided in section 178(3) of the Act isattached as Annexure 3 and forms part of this Report.
The Formal Annual Evaluation of performance of Board its Committees and individualDirectors was made in accordance with Criteria for performance evaluation of Board itsCommittees and Directors (including Independent Directors). It was noted that theDirectors were meeting highest standards professing and ensuring best practices in theoverall relation of Corporate Governance of the Companys affairs.
Board Of Directors its Committees and their Meetings
Reference is invited to the attached Corporate Governance Report which forms part ofthis Report for the details of meetings of the Board and its committees.
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 Corporate Social Responsibility Policy developed and implemented by the Company may beaccessed on the Companys website www.oclindialtd.in.
Annual Report on Corporate Social Responsibility activities in terms of Rule 9 ofCompanies (Corporate Social Responsibility Policy) Rules 2014 is attached as Annexure 4 and forms part of this Report.
Pursuant to the said policy the Company has made expenses aggregating to Rs.3.97 Croretowards Corporate Social Responsibility during the Financial Year 2015-16 coveringeducation health & sanitation skill development rural infrastructure developmentrural sports environment conservation etc. which is more than 2% of average net profitsof the Company made during three immediately preceding Financial Years.
The Board of Directors of the Company has formed a Risk Management Committee to frameand monitor the Risk Management Plan of the Company. The Committee is responsible foridentifying critical risks framing Risk Management Plan and reviewing effectiveness ofimplementation of Risk Management Plan on ongoing basis. The purpose of Risk ManagementPlan is not to eliminate the risks inherent to the business but to proactively addresssuch risks. Major risks have been identified and actions to address them are underway.
Related Party Policy and Transactions
The Company has formulated a Related Party Transactions Policy and the same is postedon the Companys website at http://www.oclindialtd.in/postalfidoc/RelPartyPolicy.pdf.
The particulars of contracts or arrangements with the related parties referred to insection 188(1) of the Companies Act 2013 in the prescribed Form AOC 2 are attached asAnnexure 5 and forms part of this Report.
Loans Guarantees Security and Investments
Particulars of Loans and Guarantees given securities provided and Investments madeunder Section 186 of the Act are provided in the Standalone Financial Statements at notenos. 13 and 28.
Adequacy of Internal Financial Controls
Based on the framework of internal financial controls and compliance systemsestablished and maintained by the Company work performed by the internal statutory andsecretarial auditors and external consultants specially appointed for this purpose -including audit of internal financial controls over financial reporting by the statutoryauditors - and the reviews performed by management and the relevant Board committees -including the audit committee the Board is of the opinion that the Companysinternal financial controls were adequate and effective during the Financial Year ended on31st March 2016.
Whistle Blower Policy and Vigil Mechanism
The Company has in place the Whistle Blower Mechanism for Directors Employees andother Stakeholders with a view to provide for adequate safeguards against victimisation ofstakeholders and provide for direct access to the Chairperson of the Audit Committee inappropriate cases and the same is posted on the Companys website www.oclindialtd.in.
Directors Responsibility Statement
In terms of provisions of Section 134 (3)(c) read with Section 134 (5) of the Act yourDirectors state that:
a) In the preparation of the Annual Accounts the applicable accounting standards havebeen followed along with proper explanation relating to material departures;
b) The Directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give true andfair view of the state of affairs of the Company as on March 31 2016 and of the Profit ofthe Company for the year ended on that date;
c) The Directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding theassets 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 concernbasis;
e) The Directors have laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and are operatingeffectively.
f) The Directors have devised proper systems to ensure compliance with the provisionsof 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 interms 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 asAnnexure 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) Rules2014 a statement showing the names and other particulars of the employees drawingremuneration 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 theAnnual Report excluding the aforesaid information in Annexure 7 is being sent tothe members of the Company and others entitled thereto. Any member interested in obtainingsuch particulars may conduct the inspection of the same at the registered office duringworking hours twenty one days before the date of Annual General Meeting and he may alsowrite to the Company Secretary and same will be furnished on request.
M/s V. Sankar Aiyar & Co. Chartered Accountants Statutory Auditors of theCompany holds office until the conclusion of the Sixty Seventh Annual General Meeting ofthe Company to be held in the year 2017 and is not eligible for re-appointment thereafter.However their appointment needs to be ratified by the shareholders at the forthcomingAnnual General Meeting in terms of Section 139 of the Act.
The Notes on Financial Statements referred to in the Auditors Report areself-explanatory and do not call for any comments and explanation.
During the year under review the Auditors have not reported any matter under Section143 (12) of the Act.
M/s R. J. Goel & Co. Cost Accountants having consented to act as Cost Auditorsand having given certificate that their re-appointment would be within the prescribedlimits and that they are not subject to disqualifications and are an independent firm ofCost Accountants and are at arms length relationship with the Company beenappointed by the Board of Directors as Cost Auditors of the Company for the Financial Year2016-17 for conducting cost audit in respect of Cement business of the Company.
Secretarial Auditor and their Report
The Board of Directors has appointed Vikas Gera & Associates as Secretarial Auditorof the Company for the Financial Year 2016-17. The Secretarial Audit Report given by theSecretarial Auditor in Form MR-3 is annexed as Annexure - 8 and forms part of this Report.
Comments on Auditors Observations
There is no qualification reservation or adverse remark or disclaimer made byAuditor/Secretarial Auditor in their respective reports.
Conservation of Energy Technology Absorption and Foreign Exchange Earnings and Outgo
Information required under Section 134(3) of the Act read with Rule 8(3) of theCompanies (Accounts) Rules 2014 with regard to conservation of energy technologyabsorption and foreign exchange earnings and outgo is given in Annexure 9 and thesame forms part of this Report.
The Company has repaid all the public deposits on March 31 2015 and no public depositsare accepted thereafter.
Orders Passed by Regulators
There are no significant and material orders passed by the regulators or courts ortribunals impacting the going concern status and Companys operations in future.
Disclosure under The Sexual Harassment of Women at Workplace (Prevention Prohibition& Redressal) Act 2013
The Company has in place Charter against sexual harassment of women at workplace incompliance with Sexual Harassment of Women at Workplace (Prevention Prohibition &Redressal) Act 2013. During the year no complaint has been received by the InternalComplaints Committee/s.
Health Safety and Environment
Health and safety of employees and clean environment is the core value of your Company.The world class EHS Management System has already been implemented at all the operations.The endeavour of your Company is to continue safe and healthy environment at all itsplants. Towards this end regular training programmes are being conducted for all levelsof employees.
Towards greener environment your Company and employees have made it a habit to plantmore and more trees. Your Company has Bagged Pollution Control Appreciation Award fromOSPCB for Lanjiberna Mines Greentech Environment Award and ICC EnvironmentAward2015 for Cement Plant.
Industrial Relations during the year under review were quite peaceful and cordial.
Your Directors wish to place on record their appreciation of the support provided byyour Companys Bankers and Financial Institutions.
Your Directors acknowledge the dedication and commitments of the employees at alllevels and also take this opportunity to thank all the valued customers who haveappreciated the Companys products and have patronised them. Your Directors conveytheir grateful thanks to the Government Authorities (Central & States) shareholdersdistributors and dealers for their continued assistance co-operation and patronage.
| ||For & on Behalf of the Board |
|Puneet Yadu Dalmia ||Mahendra Singhi |
|Managing Director ||Chief Executive Officer and |
| ||Whole Time Director |
|Place: New Delhi || |
|Date: May 17 2016 || |