Oriental Carbon & Chemicals Ltd.
|BSE: 506579||Sector: Industrials|
|NSE: OCCL||ISIN Code: INE321D01016|
|BSE 00:00 | 14 Aug||791.05||
|NSE 00:00 | 14 Aug||791.20||
|Mkt Cap.(Rs cr)||815|
|Mkt Cap.(Rs cr)||814.78|
Oriental Carbon & Chemicals Ltd. (OCCL) - Director Report
Company director report
TO THE MEMBERS
Your Directors are pleased to present the 40th Annual Report along withthe Audited Annual Financial Statements (including Audited Consolidated FinancialStatements) of the Company for the Financial Year ended March 312020.
SUMMARY OF FINANCIAL RESULTS
* Including Rs 611.10 Lakhs Deferred Tax (Previous year Rs (807.53)Lakhs).
Your Directors are pleased to recommend Final Dividend of 60% on9990092 Equity Shares (Rs 6/- per share of Rs 10 each) which is subject to the approval ofShareholders in the ensuing Annual General Meeting. With this the total dividend for theyear including interim dividend of 40% comes to 100%. There was no transfer to GeneralReserves during the year under review.
Sales during the year were impacted by sluggish demand in domestic aswell as global market. The auto sector was in the grip of slow down during the year andlast month sales were also muted on account of COVID-19. On account of this InsolubleSulphur sales was 9% less as compared to previous year. Margins were stable during theyear.
The work on Phase-1 of expansion project of IS along with acid isprogressing on at Dharuhera Haryana. The civil work
was stalled in whole of NCR due to NGT order because of severepollution in the month of November 2019 and due to COVID-19 from March 20 2020.
Sulphuric Acid & Oleum
FY 18-19 was exceptional for Acid business in term of realisation andmargin. However the performance was normalized during the year FY19-20. Though the salesprices were down by about 28% the margins were down by only about 17%.
FUTURE PROSPECTS Impact of COVID-19
After the nationwide lockdown declared by the Government the plants ofthe Company at Dharuhera and Mundra were in shutdown consequent to Government Directivesin this regard on March 23 2020.
After having been permitted to do so the Mundra Plant was restarted onApril 21 2020 and Dharuhera plant on May 21 2020 at about 50% Capacity. The Corporateand Registered offices were also closed and reopened in the month of May as per Govt.guidelines. During the period of Lockdown and thereafter all the employees who wererequired to do so were working from home to ensure that the affairs of the Company areconducted smoothly.
During the first quarter of FY20-21 the middle and senior managementof the Company had volunteered to forgo their salaries between 20 to 30% Joint ManagingDirector 35% cut and the Managing Director has decided not to draw salary. Thesesacrifices will be reviewed on quarterly basis.
Also the Company has decided that there would be no increment inFY20-21 and our workers have also decided to forgo the agreed wage increase for FY-20-21as per the three yearly wage settlement agreement.
We are seeing some delays in receivables which are temporary innature. The Company is adequately capitalized and have sufficient reserves to maintainrequisite liquidity and to service its debt and financial obligations.
The pandemic COVID-19 has caused an unprecedented collapse in economicactivities worldwide and outlook for FY20-21 is very unpredictable in terms ofnormalization of business activities in India as well as globally. The demand in autosector is still muted with consequent reduction in tyre demand. The recovery to normalcyof demand is expected to be slow.
On account of above the Company is also expecting a degrowth in salesand profitability as well. We expect the hit on turnover to be in the range of 25 to 30%and on profitability about 50% at PBT level over last year. However the spread ofpandemic has reduced in some region of the globe and lockdown are being lifted by manygovernments. If the situation improves there is fair chance of revival of the economicactivities in the later part of the year.
The Project (Phase 1 of expansion at Dharuhera) is also facing delaysdue to suspension of civil work during the shutdown period of COVID-19 and shortage oflabour thereafter. Therefore the project is now expected to be commissioned in Q1 of2021-22 instead of Q3 of current year as envisaged earlier. However no significant impacton the cost is anticipated as of now.
Sulphuric Acid & Oleum
As the Pandemic COVID-19 has an impact on all the business segments andacid is likely to be muted. Contributions are expected to be under pressure going forwardas two more plants of Sulphuric Acid (with combined capacity of about 250 MTPD) have beencommissioned during the year in North India.
Along with the Capacity Expansion of Insoluble Sulphur the Company isalso expanding Sulphuric Acid capacity mainly with the view of providing steam for the newInsoluble Sulphur lines.
The Company's Credit Rating has been done by ICRA for Long Term andShort term borrowing including Public Deposit. The current upgraded Credit ratingreceived from ICRA on July 22 2019 for fund based limits (Rs 210 Crore) is (ICRA) AA-(pronounced ICRA double A minus) (Outlook revised to Stable from Positive) and fornon-fund based limits (Rs 14 Crore) is reaffirmed at (ICRA) A1+ (pronounced ICRA A oneplus). The Credit Rating for Public Deposits (Rs 5 Crore) is MAA (pronounced M Double A)(Outlook revised to Stable from Positive).
The Company has only one subsidiary namely Duncan Engineering Ltd(formerly known as Schrader Duncan Limited).
Pursuant to Section 129(3) of the Companies Act 2013 read with Rule 5of the Companies (Accounts) Rules 2014 statement containing salient features ofstandalone financial statements of subsidiaries in Form AOC-I is attached to the FinancialStatements in a separate section and forms part of this Report. The separate auditedaccounts of the Subsidiary Company is available on the website of the Company.
The Company's subsidiary registered a gross turnover of Rs 4438.97lakhs during the current Financial Year against Rs 4512.24 lakhs during FY 2018-19. TheSubsidiary reported a profit of Rs 326.30 lakhs (Previous Year Profit Rs 277.93 lakhs).
As required under Rule 8(1) of the Companies (Accounts) Rules 2014the Board's Report has been prepared based on Standalone Financial Statements. Thestandalone turnover PBT and PAT of the subsidiary are given in Form AOC-I.
In accordance with the third proviso of Section 136(1) of the CompaniesAct 2013 the Annual Report of the Company containing therein its Standalone and theConsolidated Financial Statements would be placed on the website of the Company atwww.occlindia.com. Further as per provisions of the said Section audited Annual Accountsof subsidiary company would also be placed on the website of the Company atwww.occlindia.com. Shareholders interested in obtaining a copy of the Annual Accounts ofthe subsidiary company may write to the Company Secretary at the Company's registeredoffice or may drop a mail at email@example.com. The Company does not have anymaterial subsidiary in the immediately preceding accounting year. However as per SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 SEBI has made itmandatory for all listed
companies to formulate a policy for determining 'material'subsidiaries. Accordingly a policy on 'material' subsidiaries was formulated by the AuditCommittee of the Board of Directors and same is also posted on the website of the Companyand may be accessed at www.occlindia.com
CONSOLIDATED FINANCIAL STATEMENTS
Pursuant to Section 129(3) of the Companies Act 2013 the ConsolidatedFinancial Statements of the Company prepared in accordance with the Section 133 of theCompanies Act
2013 read with Rule 7 of the Companies (Accounts) Rules
2014 and Indian Accounting Standard 110 on Consolidated FinancialStatements is provided in the Annual Report.
In accordance with the provisions of Section 152 of the Companies Act2013 and the Article of Association of the Company Mr. J P Goenka is due to retire byrotation at the forthcoming Annual General Meeting and being eligible offer himself forappointment.
The current tenure of Mrs. Runa Mukherjee Independent Director of theCompany is expiring on July 30 2020. The Nomination and Remuneration Committee and theBoard of your Company recommended the re-appointment of Mrs. Runa Mukherjee as IndependentDirector of the Company for her 2nd term of 5 (five) consecutive years with effect fromJuly 31 2020. The brief profile and other information of the Directors seekingre-appointment as required under Regulation 36 of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 has been given in the Notice convening the ensuing AnnualGeneral Meeting of the Company. None of Directors of the Company are disqualified as perapplicable provision of the Act.
During the financial year 2019-20 Mr. H S Shashikumar NomineeDirector (LIC of India) has resigned from the Board of Directors of the Company w.e.f.December 02 2019. The resignation was is in line with guidelines of LIC of India as hecompleted 2 terms of 3 years each on Board of Directors of the Company. As per therepresentation received from LIC of India the Company has appointed Mrs. Kiran Sahdev asNominee Director w.e.f. January 30 2020.
None of the Directors of your Company is disqualified under theprovisions of Section 164(2)(a)&(b) of the Companies Act 2013 and a certificate datedJune 18 2020 received from Company Secretary in Practice certifying that none of thedirectors on the Board of the company have been debarred or disqualified from beingappointed or continuing as directors of the Companies by SEBI/Ministry of CorporateAffairs or any such statutory authority is annexed to the Corporate Governance Report.
Declaration by Independent Directors
The Company has received declarations from all the IndependentDirectors of the Company confirming that they meet the criteria of independence prescribedboth under the Act and Regulation 16 of the Listing Regulations.
The Board of Directors further confirms that the Independent Directorsalso meet the creteria to expertise experience integrity and proficiency in terms ofRules of the Companies (Accounts) Rule 2014 (as amended).
Separate Meeting of Independent Directors
Details of the separate meeting of Independent Directors held in termsof Schedule IV of the Act and Regulation 25(3) of the Listing Regulations are given in theCorporate Governance Report.
During the year under review there was no change in the Share Capitalof the Company.
KEY MANAGERIAL PERSONNEL (KMP)
The details of Key Managerial Personnel of the Company as per theprovisions of Sec 203 of the Companies Act 2013 are as follows:
a) Mr. Arvind Goenka Managing Director
b) Mr. Akshat Goenka Jt. Managing Director
c) Mr. Anurag Jain Chief Financial Officer
d) Mr. Pranab Kumar Maity Company Secretary
During the financial year 2019-20 there was no change in the KeyManagerial Personnel of the Company.
Mr. Akshat Goenka Joint Managing Director of the Company who is alsoserving as Managing Director of the Duncan Engineering Limited the Subsidiary of theCompany received a remuneration of Rs 12000/- and Rs 16.70 lakhs as commission from theSubsidiary Company during the year 2019-20.
MEETINGS OF THE BOARD
During the year four Board Meetings were convened and held. Theintervening gap between the Meetings was within the period prescribed under the CompaniesAct 2013. The details of Board Meetings with regard to dates and attendance of eachDirectors have been provided in the Corporate Governance Report.
Pursuant to the provisions of the Companies Act 2013 and Regulation25(3) & (4) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 the Independent
Directors in their meeting held on January 30 2020 have evaluated thePerformance of Non-Independent Directors Chairperson of the Company after considering theviews of the Executive and Non-Executive Directors Board as a whole and assessed thequality quantity and timeliness of flow of information between the Company's Managementand the Board. The Nomination and Remuneration Committee has also carried out evaluationof performance of every Director of the Company. On the basis of evaluation made by theIndependent Directors and the Nomination and Remuneration Committee and by way ofindividual and collective feedback from the Non-Independent Directors the Board hascarried out the Annual Performance Evaluation of the Directors individually as well asevaluation of the working of the Board as a whole and Committees of the Board. The mannerin which the evaluation has been carried out is explained in the Corporate GovernanceReport.
The Independent Directors are regularly updated on industry &market trends plant process and operational performance of the Company etc. throughpresentations in this regard and periodic plant visits. They are also periodically keptaware of the latest developments in the Corporate Governance their duties as directorsand relevant laws.
As on March 31 2020 the Audit Committee of the Board of Directors ofthe Company consists of three Independent Directors with Mr. O. P Dubey as Chairman andMr. B. B. Tandon Mr. S. J. Khaitan as members and one promoter Director Mr. AkshatGoenka Joint Managing Director as Member. The Company Secretary is the Secretary of theCommittee. The Managing Director Chief Financial Officer and Auditors are permanentinvitees to the committee meetings.
The Committee inter alia reviews the Internal Control System andReports of Internal Auditors and Compliance of various Regulations. The brief terms ofreference of the Committee and the details of the Committee meetings are provided in theCorporate Governance Report. The Committee also reviews the Financial Statements beforethey are placed before the Board. Your Company has a well-structured Internal Audit Systemcommensurate with its size and operations. During the year there were no instances wherethe Board had not accepted the recommendations of the Audit Committee.
NOMINATION AND REMUNERATION COMMITTEE
As on March 31 2020 the Nomination and Remuneration Committeeconsists of three Independent Directors with Mr. O. P. Dubey as Chairman Mr. B. B. Tandonand Mr. K. Raghuraman as members. The Committee inter alia identifies persons who arequalified to become directors and who may be appointed in senior management. The briefterms of reference of the Committee and the details of the Committee meetings are providedin the Corporate Governance Report.
STAKE HOLDER'S RELATIONSHIP COMMITTEE
As on March 31 2020 the Stakeholders' Relationship Committeecomprises of one Non-Executive Director Mr. J P Goenka as Chairman one IndependentDirector Mr. S J Khaitan as member and one Executive Director Mr. Arvind Goenka as member.The Committee inter alia reviews the grievance of the security holders of the Companyand redressal thereof. The brief terms of reference of the Committee and the details ofthe Committee meetings are provided in the Corporate Governance Report.
CORPORATE SOCIAL RESPONSIBILITY COMMITTEE
As on March 31 2020 the Corporate Social Responsibility Committee hasconsists two Independent Directors with Mr. S. J. Khaitan as Chairman and Mr. K.Raghuraman Members and one Executive Director Mr. Arvind Goenka as member. The detail ofterms of reference number and dates of meetings held attendance of the Directors andremunerations paid to them are given separately in the Corporate Governance Report.
The Company recognizes that an effective practice of CSR is requiredgiving due consideration to the welfare of the community environment and social structurethat it operates in and that of the country including focus welfare areas identified bythe State and Central Governments. The CSR Committee of the Company has laid down thepolicy to meet the Corporate Social Responsibility objectives of the Company.
The Corporate Social Responsibility Committee (CSR Committee) hasformulated and recommended to the Board a Corporate Social Responsibility Policy (CSRPolicy) indicating the activities to be undertaken by the Company which has been approvedby the Board. The CSR Policy may be accessed on the Company's website atwww.occlindia.com. The CSR Policy includes activities prescribed as CSR activity as perthe Rules of Companies Act 2013.The main Focus areas taken in the policy are EducationHealth care and family welfare Environmental Safety contribution to any relief fundsetup by the Government of India and any State Government.
The Average Net Profits of the Company for the last three financialyears is Rs 8563.96 lakhs and accordingly the prescribed CSR expenditure during the yearunder review shall not be less than Rs 171.28 lakhs (i.e. 2% of the Average Net Profits ofthe Company for the last three financial years). Rs 171.29 lakhs were spent on CSRactivities and projects undertaken during the year. The Annual Report on CSR activities isannexed as "Annexure A" to this Report.
Pursuant to the provisions of Section 177(9) & (10) of theCompanies Act 2013 and the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 a 'Whistle Blower Policy' to establish Vigil Mechanism for directorsand employees to report genuine concerns has been framed. The policy is revised from timeto time to realign it with applicable regulations or organisations suitability. The latestpolicy is available on the website of the Company and the web link of the same is providedin the Corporate Governance Report. This policy provides a process to discloseinformation confidentially and without fear of reprisal or victimization where there isreason to believe that there has been serious malpractice fraud impropriety abuse orwrong doing within the Company. The Company ensures that no personnel have been deniedaccess to the Audit Committee.
As a policy the Company has identified key risk concern/areas. Theassessment of each risk area is done on quarterly basis. Following are the mainconcern/risk related to the Company:
Market Related Risk: mainly demand realisation and redundancy of theproduct.
Production related Risk: mainly availability of inputs accident orbreak down in the plant and rejection of material by the customers.
Human Resources Risk includes the risk of labour unrest high employeeturnover ratio and lower productivity due to dissatisfaction of employees.
Revenue Risk: adverse exchange rate movement. Govt. Policies and dutyrates
Data and records: data loss fire and Virus attack etc.
A Risk Management committee has been formed for the purpose ofevaluation of Risks.
The Board and the Audit Committee also takes note of Risk management ofthe Company in every quarter.
INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
The Company has in place an established internal control systemincluding internal financial Controls designed to ensure proper recording of financial andoperational information compliance of various internal controls and other regulatory andstatutory compliances. Self-certification exercise is also conducted by which seniormanagement certifies effectiveness of the internal control system of the Company.
Internal Audit is conducted throughout the organization by qualifiedoutside Internal Auditors. Findings of the internal Audit Report are reviewed by the topManagement and by the Audit Committee of the Board and proper follow up action are ensuredwherever required. The Statutory Auditors have evaluated the system of internal controlsincluding internal financial control of the Company and have reported that the same areadequate and commensurate with the size of the Company and nature of its business.TheAudit Committee of the Board from time to time evaluated the adequacy and effectivenessof internal financial control of the Company with respect to:-
1. Systems have been laid to ensure that all transactions are executedin accordance withmanagement's general and specific authorization. There are well-laidmanuals for such general or specific authorization.
2. Systems and procedures exist to ensure that all transactions arerecorded as necessary to permit preparation of Financial Statements in conformity withGenerally Accepted Accounting Principles or any other criteria applicable to suchstatements and to maintain accountability for aspects and the timely preparation ofreliable financial information.
3. Access to assets is permitted only in accordance with management'sgeneral and specific authorization. No assets of the Company are allowed to be used forpersonal purposes except in accordance with terms of employment or except as specificallypermitted.
4. The existing assets of the Company are verified/ checked atreasonable intervals and appropriate action is taken with respect to differences if any.
5. Proper systems are in place for prevention and detection of fraudsand errors and for ensuring adherence to the Company's policies.
POLICY ON NOMINATION AND REMUNERATION
The summary of Remuneration Policy of the Company prepared inaccordance with the provisions of Section 178 of the Companies Act 2013 read with Part Dof Schedule II of the SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 are provided in the Corporate Governance Report. The approved Remuneration Policy ofthe Company is also available on the website of the Company which is www.occlindia.com.
POLICY ON DIRECTORS' APPOINTMENT
The Nomination and Remuneration Committee works with the Board todetermine the appropriate characteristics skill and experience that are required of themembers of the Board.
The members of the Board should possess the expertise skills andexperience needed to manage and guide the Company in the right direction and to createvalue for all stakeholders. The members of the Board will need to consist of eminentpersons of proven competency and integrity with an established track record. Besideshaving financial literacy experience leadership qualities and the ability to thinkstrategically the members are required to have a significant degree of commitment to theCompany and should devote adequate time in preparing for the Board meeting and attendingthe same. The members of the Board of Directors are required to possess the educationexpertise skills and experience in various sectors and industries needed to manage andguide the Company. The members are also required to look at strategic planning and policyformulations.
The members of the Board should not be related to any executive orindependent director of the Company or any of its subsidiaries. They are not expected tohold any executive or independent positions in any entity that is in direct competitionwith the Company. Board members are expected to attend and participate in the meetings ofthe Board and its Committees as relevant. They are also expected to ensure that theirother commitments do not interfere with the responsibilities they have by virtue of beinga member of the Board of the Company. While reappointing Directors on the Board andCommittees of the Board the contribution and attendance record of the Director concernedshall be considered in respect of such reappointment. The Independent Directors shall holdoffice as a member of the Board for a maximum term as per the provisions of the CompaniesAct 2013 and the rules made thereunder in this regard from time to time and inaccordance with the provisions of the Listing Regulations. The appointment of Directorsshall be formalised through a letter of appointment.
The Executive Directors with the prior approval of the Board mayserve on the Board of any other entity if there is no conflict of interest with thebusiness of the Company.
RELATED PARTY TRANSACTIONS
All related party transactions that were entered into during thefinancial year were on arms' length basis and were in the ordinary course of business.There are no materially significant related party transactions made by the Company withPromoters Directors Key Managerial Personnel or other designated persons which may havea potential conflict with the interest of Company at large. All related party transactionsare placed before the Audit Committee and given in the notes annexed to and forming partof this Financial Statement. The approved policy on Related Party Transactions as requiredunder the SEBI (Listing Obligations and Disclosure
Requirements) Regulations 2015 is also available on the website of theCompany www.occlindia.com.
DIRECTORS' RESPONSIBILITY STATEMENT
In terms of the provisions of Section 134(3)(c) read with Section134(5) of the Companies Act 2013 the Directors state that:
a) In preparation of the annual accounts for the financial year endedMarch 31 2020 the applicable Accounting Standards have been followed along with properexplanation relating to material departures if any;
b) The Directors have selected such Accounting Policies as listed inthe Financial Statements and applied them consistently and made judgments and estimatesthat are reasonable and prudent so as to give true and fair view of the state of affairsof the Company at the end of the financial year as on March 31 2020 and of the profits ofthe Company for that period;
c) The Directors have taken proper and sufficient care for maintenanceof adequate accounting records in accordance with the provisions of the Companies Act2013 for safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities;
d) The Directors have prepared the annual accounts on a going concernbasis;
e) The Directors have laid down internal financial controls to befollowed by the Company and that such internal financial controls are adequate and areoperating effectively;
f) The Directors have devised proper systems to ensure compliance withthe provisions of all applicable laws and that such systems were adequate and operatingeffectively.
CHANGE IN THE NATURE OF BUSINESS
There was no change in the nature of the business of the Company duringthe year. The Company has only one subsidiary namely Duncan Engineering Ltd (formerlyknown as Schrader Duncan Limited).
Our Company's properties including building plant machineries andstocks among others are adequately insured against risks.
Fixed Deposits from public outstanding with your Company at the end ofthe financial year stood at Rs 14330000/-. Out of this deposits aggregating to Rs488000/- due for repayment on or before March 31 2020 were not claimed by thedepositors by the said date.The Company has stopped accepting new deposits and no depositswere accepted during the year.
LISTING OF SHARES
The Equity Shares of the Company are listed on the BSE Limited (BSE)with scrip code No. 506579 and on National Stock Exchange of India Limited (NSE) withscrip symbol OCCL. The Company confirms that the annual listing fees to both the stockexchanges for the financial year 2020-21 have been duly paid.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
Details of Loans Guarantees and Investments covered under theprovisions of Section 186 of the Companies Act 2013 are given in the notes to thefinancial Statements.
AUDITORS AND THEIR REPORT
a. Statutory Auditors:
Messrs S S Kothari Mehta & Co. Chartered Accountants wereappointed as Auditors of the Company for tenure of five years i.e. from the conclusion of37th Annual General Meeting till the conclusion of the 42nd Annual General Meeting of theCompany. The Auditors have confirmed their eligibility and qualification under Section 141of Companies Act 2013. The Statutory Auditors' Report on the Standalone and ConsolidatedFinancial Statements of the Company for the financial year ended March 31 2020 form partof this Annual Report.
b. Secretarial Auditors:
The Board of Directors of the Company at their meeting held on January30 2020 appointed Mr. Pawan Kumar Sarawagi Practicing Company Secretary of M/s. PSarawagi & Associates having office at Narayani Building Room No.107 First FloorBrabourne Road Kolkata -700001 for conducting the Secretarial Audit of the Company forthe financial year 2019-20. The Secretarial Audit Report in Form MR-3 for the financialyear ended March 31 2020 is annexed herewith as "Annexure B".
c. Cost Auditors:
Pursuant to Section 148 of the Companies Act 2013 read with theCompanies (Cost Records and Audit) Amendment Rules 2014 the cost audit recordsmaintained by the Company relating to insoluble Sulphur plants located at DharuheraHaryana is required to be audited. Your Board had on recommendation of the AuditCommittee appointed Messrs J K Kabra & Co. Cost Accountants to audit the costaccounts of the Company for the financial year 2019-20. The Cost Audit Report for the yearended
March 31 2019 has been submitted to the Ministry of Corporate Affairswithin stipulated time period.
Messrs J K Kabra & Co. Cost Accountants has been appointed as CostAuditor of the Company by the Board on recommendation of the Audit Committee to carry outthe requisite cost audit for the financial year 2020-21 on a remuneration of Rs 1.4 lakhs.As required under the Companies Act 2013 the remuneration payable to Cost Auditors isrequired to be placed before the members in a General Meeting for their ratification.Accordingly a Resolution seeking member's ratification for remuneration payable to MessrsJ K Kabra & Co. Cost Auditors is included at item no. 4 of the Notice convening theAnnual General Meeting.
Response to Auditors' Remarks
There is no qualification reservation adverse remark or disclaimer bythe Statutory Auditors.
Regarding comments of the Secretarial Auditor in the Secretarial AuditReport the Company has since initiated the process and shall transfer the requisiteequity shares to IEPF Authority shortly.
EXTRACT OF ANNUAL RETURN
In accordance with Section 134(3)(a) of the Companies Act 2013 readwith Section 92(3) an extract of Annual Return in the prescribed format i.e. Form MGT-9is annexed as "Annexure C" which forms an integral part of this Reportand is also available on the website of the Company viz. www.occlindia.com.
A detailed Report on Corporate Governance for the financial year2019-20 pursuant to the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 along with an Auditors' Certificate on compliance with the conditions ofCorporate Governance is annexed to this report.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
The Management Discussion and Analysis Report for the financial year2019-20 pursuant to the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 is given as a separate statement in the Annual Report.
BUSINESS RESPONSIBILITY REPORT
As stipulated under the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 the Business Responsibility Report describing theinitiatives taken by the Company from an environmental social and governance perspectiveis attached and forms part of the Annual Report.
CEO AND CFO CERTIFICATION
Pursuant to Regulation 17(8) of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 the CEO and CFO certification as specified inPart B of Schedule II thereof is annexed to the Corporate Governance Report. The ManagingDirector and the Chief Financial Officer also provide quarterly certification on FinancialResults while placing the Financial Results before the Board in terms of Regulation 33 ofthe SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.
CODE OF CONDUCT FOR DIRECTORS AND SENIORMANAGEMENT PERSONNEL
The Code of Conduct for Directors and Senior Management Personnel isposted on the Company's website. The Managing Director of the Company has given adeclaration that all Directors and Senior Management Personnel concerned affirmedcompliance with the code of conduct with reference to the financial year ended on March312020. The declaration is annexed to the Corporate Governance Report.
COMPLIANCE OF SECRETARIAL STANDARDS
The company has complied with all the mandatorily applicablesecretarial standards issued by The Institute of Company Secretaries of India and approvedby the Central Government under Section 118(10) of the Companies Act 2013.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION ANDFOREIGN EXCHANGE EARNINGS & OUTGO
As required under Section 134(3) (m) of the Companies Act 2013 readwith Rule 8 (3) of the Companies (Accounts) Rules 2014 the information relating toconservation of energy technology absorption and foreign exchange earnings and outgo isannexed to this Report as "Annexure D".
RESEARCH & DEVELOPMENT
Research & Development is fundamental to the Company's efforts tomaintain the technical and quality edge for the product. A full in-house Research &Development team works on continuous basis to improve the quality of product and itsproperties. New Grades are also being developed to meet customers varied requirements.Research in the areas of reducing utility cost and process parameters improvement is alsobeing done. Help of accredited independent laboratories is also taken as and when requiredfor studying and evolving critical parameters.
The Company's Research and Development Facility is approved byDepartment of Scientific and Industrial Research Ministry of Science and TechnologyGovernment of India.
The R&D lab is regularly augmented by acquiring state of the
art analytical and process equipment to help in faster and detailedanalysis. Further pilot plants as required are being set up to validate the researchfindings. The details of some specific R&D activities carried out and benefits derivedout of them have been annexed to this report.
Your Company's Plants have all the requisite Pollution ControlEquipment and meets all the desired and statutory norms in this regard. The InsolubleSulphur Units of the Company enjoys ISO-TS 16949:2009 EMS14001-2004 and OHSAS18001:2007Certification. The Company has started using Natural Gas in place of Furnace Oil and otherliquid fuels at its Dharuhera Plant thus helping in reduction of pollution.
PARTICULARS OF EMPLOYEES
As required under the provisions of Section 197 of the Act and Rule5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014 particulars of the employees concerned forms a part of the Boards' Report.Having regard to the provisions of Section 136 of the Act the Annual Report and Accountsexcluding the aforesaid information are being sent to the Members of the Company bye-mail. Any Member interested in obtaining such particulars may write to the CompanySecretary of the Company.
DETAILS RELATING TO REMUNERATION OF DIRECTORS KEYMANAGERIAL PERSONNEL AND EMPLOYEES
Disclosure pertaining to remuneration and other details as requiredunder Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 is marked as 'Annexure E' whichis annexed hereto and forms a part of the Boards' Report.
There was no fraud reported by the Auditors of the Company underSection 143(12) of the Companies Act 2013 to the Audit Committee or the Board ofDirectors during the year under review.
INSIDER TRADING REGULATIONS
Based on the requirements under the SEBI (Prohibition of InsiderTrading) Regulations 2015 as amended from time to time the Code of Conduct forprevention of insider trading is in force in your Company. The Company has adopted theCode of Practices and Procedures for Fair Disclosure of Unpublished Price SensitiveInformation in compliance with Chapter IV of the said Regulations and the same is alsoavailable on the Company's website www.occlindia.com.
TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND
The Company sends reminder letters to all members whose dividends areunclaimed so as to ensure that they receive their rightful dues. Your Company has alsouploaded on its website www.occlindia.com information regarding unpaid/unclaimeddividend amounts lying with your Company.
During 2019-20 the unclaimed dividend amount of Rs 676281/- and Rs500892/- towards the unpaid dividend account of the Company for the financial year 2011-12(Final Dividend) and 2012-13 (Interim Dividend) was transferred to Investor Education andProtection Fund. The said amount had remained unclaimed for seven years despite reminderletters having been sent to each of the members concerned.
Pursuant to Section 124(6) of the Companies Act 2013 and the InvestorEducation and Protection Fund Authority (Accounting Audit Transfer and Refund) Rules2016 and its amendments all shares in respect of which dividend has not been paid orclaimed for seven consecutive years or more shall be transferred by the Company in thedemat account of Investor Education and Protection Fund ("IEPF") Authority (the"Authority") as per the procedure mentioned in the said Rules. Accordingly yourCompany is in process of transfer of the required equity shares to the demat account ofthe Authority and in terms of the said Rules. All benefits accruing on such shares viz.bonus shares split consolidation fraction shares etc. except the right issue shall alsobe credited to such demat account.
Members may note that unclaimed dividend and shares transferred to thedemat account of the Authority can be claimed back by them from IEPF Authority byfollowing the procedure mentioned in the said Rules.
CONSTITUTION OF INTERNAL COMPLAINTS COMMITTEE
Pursuant to the requirement under Sexual Harassment of Women atWorkplace (Prevention Prohibition and Redressal) Act 2013 an Internal ComplaintsCommittee has been duly constituted by the Company and the composition of the same isdisclosed in the Anti-Sexual Harassment Policy which is posted on the website of theCompany www.occlindia.com.
DISCLOSURES UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTIONPROHIBITION & REDRESSAL) ACT 2013
No case was filed under the Sexual Harassment of Women at Workplace(Prevention Prohibition & Redressal) Act 2013 during the year under review.
DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS /COURTS / TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND THE COMPANY'S OPERATIONS INFUTURE
During the period under review there were no significant and materialorders passed by any regulator / court / tribunal impacting the going concern status andthe Company's operations in future.
The Board places on record its appreciation of the support andassistance of various Banks Government Agencies Suppliers valued Customers and theshareholders in particular and looks forward to their continued support. Relations betweenyour Company and its employees remain cordial and the Directors wish to express theirappreciation for the co-operation and dedication of all employees of the Company.