Mar 31, 2022
Your directors are pleased to present the 11th Annual Report on the business and operations of the Company along with the audited financial statements for the financial year ended March 31,2022.
SUMMARY OF FINANCIAL PERFORMANCE
The financial performance of the Company for the financial year ended March 31,2022 is summarised below:
(H in Crore) |
||
Particulars |
2021-22 |
2020-21 |
Revenue from Operations |
2725.42 |
2,324.09 |
Earnings before interest, depreciation, amortisation & taxation |
600.64 |
569.03 |
Interest / finance costs |
51.43 |
93.57 |
Profit before depreciation and taxation |
549.21 |
475.46 |
Depreciation and amortization expenses |
145.21 |
141.85 |
Profit before taxation |
404.00 |
333.61 |
Taxation |
140.75 |
119.42 |
Net profit |
263.25 |
214.19 |
Profit brought forward from last year |
563.17 |
375.63 |
Profit available for appropriations |
826.42 |
589.82 |
Appropriations |
||
Other Comprehensive Income |
2.37 |
(1.04) |
Dividend on equity shares |
46.10 |
25.61 |
Balance carried to balance sheet |
782.69 |
563.17 |
EPS (?) |
12.85 |
10.45 |
BUSINESS AND FINANCIAL PERFORMANCE
The financial year 2021-22 may be summed up as a year of two halves. H1 witnessed a relatively high growth over a low base driven by pent-up demand and a progressive improvement in Covid 19 infection rates. The hopes of a sustained rapid return to normalcy quickly petered out in the second half due to excessive and extended rainfall impacting our key markets and unprecedented cost push inflation fuelled by global supply chain dislocations, further exacerbated by the conflict in Ukraine. Due to the inflationary pressure in the economy, consumer sentiment remains muted as consumers defer discretionary spend which is impacting demand. Cement prices are expected to stay firm
and possibly increase to mitigate the increase in cost of fuel and raw material. However, it remains to be seen whether demand growth will lend support towards higher realizations to pass on the increasing input costs.
The industry in the year under review has continued to see capacity addition ( 26.4m MT) despite low-capacity utilisation. As per CRISIL data during FY 2021-22, the core sector reported growth of ~11% while the Indian cement sector grew at 7% driven by higher growth in H1 that significantly moderated in H2. Demand in the southern region was supported by infra execution on a low base and urban housing in Tier-2 and Tier-3 cities. The overhang of low capacity utilisation in the South is expected to continue in the medium term.
To address the evolving reality and market specific opportunities and risks, your Company developed a dynamic decision framework to respond to competitive pressures with the required agility and speed. Your Company''s relentless focus on fuel flexibility and in particular the increased use of alternate fuels helped cushion the significant increase in fuel costs. The strategy of judiciously improving market and product-mix, in particular growing of premium product "Birla.A1 StrongCrete", to support higher realisations, led to improved overall profitability despite cost and demand pressures.
Your Company has emerged stronger, delivering improvement in both profits and cash generation. During FY 2021-22, net debt was reduced by 61%, strengthening our Balance Sheet and creating comfortable headroom for planned future growth.
The key business and financial highlights of your Company are as under:
⢠Total sales volume for the year stood at 55 lac tons against 51 lac tons in FY21, a growth of ~8%.
⢠The focus on promotion of blended cement continues in line with your Company''s commitment to environmental sustainability. Total blended cement sale was 63% for the year vs 61% in FY 2020-21.
⢠The overall capacity utilization stood at 66%.
⢠EBITDA for the year was H600.64 crore representing 6% improvement over H569.03 crore during last year.
⢠Net profit for the year improved by 23% vs last year; H263.25 crore as compared with H214.19 crore in FY 2020-21.
A key priority for your Company throughout FY22 remained the safety and well-being of its employees, the communities within which it operates and its channel partners, vendors and customers. Your Company also extended all assistance and support to the communities around its area of operations to mitigate their hardship, in consultation and in collaboration with the local administration.
During the financial year, your Company has paid an interim dividend of H0.75/- per equity share (75%) of face value of H1/- each, to the shareholders whose names appeared on the register of members as on February 10, 2022, the record date fixed for this purpose. Additionally, your Directors are pleased to recommend a final dividend amounting to H1.75/- (175%) per equity share of face value of H1/- each for the financial year ended March 31,2022, as against interim and final dividend of H0.50/- (50%) and H1.50/- (150%), respectively, per equity share totaling to H2.00/- (200%) paid in the immediately preceding year. The payment of final dividend for the financial year 2021-22 is subject to the approval of shareholders at the forthcoming Annual General Meeting.
The Register of Members and Share Transfer Books of the Company will remain closed from Friday, July 22, 2022 to Thursday, July 28, 2022, both days inclusive, for determining the entitlement of the shareholders to the final dividend for financial year 2021-22.
Your Company has been consistently declaring dividends since its inception. Pursuant to Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended ("SEBI Listing Regulations"), the Board has adopted a Dividend Distribution Policy. Dividends declared/recommended by the Company are in accordance with the Dividend Distribution Policy of the Company.
The Dividend Distribution Policy is available on the website of the Company and can be accessed through the web link: https:// www.orientcement.com/wp-content/uploads/2017/02/ Dividend-distribution-Policy.pdf
BOARD OF DIRECTORS, ITS COMMITTEES AND MEETINGS THEREOF
The Company has a professional Board with an optimal composition of executive, non-executive and independent directors including two women directors one of whom is independent. The Board members bring to the fore the right mix of knowledge, skills and expertise and provide strategic guidance and direction to the Company to achieve its business objectives and protect the interest of its stakeholders. The Board is also supported by five Committees of Directors viz. Audit Committee, Nomination & Remuneration cum Compensation Committee,
Corporate Social Responsibility Committee, Stakeholders'' Relationship Committee and Risk Management Committee.
One meeting of the Board of Directors is held in each quarter. Additional meetings of the Board/Committees are convened as may be necessary for the proper management of the business operations of the Company. A separate meeting of independent directors is also held at least once in a calendar year, inter-alia, to review the performance of non-independent directors, the Board as a whole and the Chairman.
During the financial year ended March 31, 2022, the Board of Directors met 6 (six) times viz. on May 17, 2021, August 2, 2021, October 25, 2021, December 22, 2021, January 31, 2022 and March 25, 2022. The intervening gap between the meetings was within the period prescribed under the Companies Act, 2013 and SEBI Listing Regulations.
A detailed update on the Board and its Committees'' composition, number of meetings held during the financial year 2021-22 and attendance of the directors at these meetings is provided in the Report on Corporate Governance.
In terms of the provisions of section 152 of the Companies Act, 2013 and in terms of the Articles of Association of the Company, Mrs. Amita Birla (DIN 00837718), a Non-Executive Director of the Company, is liable to retire by rotation at the ensuing Annual General Meeting of the Company and being eligible, offers herself for re-appointment. The Board of Directors recommends the resolution for re-appointment of Mrs. Amita Birla, liable to retire by rotation, for the approval of the members of the Company at the ensuing Annual General Meeting.
Based on the recommendation of the Nomination & Remuneration cum Compensation Committee, the Board of Directors in their meeting held on January 31,2022, approved the re-appointment of Mr. Desh Deepak Khetrapal (DIN 02362633) as the Managing Director of the Company w.e.f. April 1, 2022 for a period of 2 (two) years subject to approval of shareholders at the forthcoming Annual General Meeting. Mr. Khetrapal continues to be the Chief Executive Officer of the Company. The resolution seeking consideration of Mr. Khetrapal''s re-appointment for 2 (two) years w.e.f. April 1,2022 and payment of remuneration for the financial year 2022-23 has been recommended by the Board to be passed by way of Postal Ballot.
Brief profiles and other details relating to the Directors are furnished in the Annual Report.
DECLARATION BY INDEPENDENT DIRECTORS
The Company has received necessary declarations from each Independent Director under Section 149 of the Act and Regulation 25 of the SEBI Listing Regulations, confirming
that he / she meets the criteria of independence laid down in Section 149 of the Act and Regulation 16(1)(b) of the SEBI Listing Regulations.
The Independent Directors of the Company have got their name included in the data bank of Independent Directors being maintained by the Indian Institute of Corporate Affairs and have also complied with the requirements of proficiency test under Companies (Appointment and Qualification of Directors) Rules, 2014.
Pursuant to the provisions of the Companies Act, 2013 and SEBI Listing Regulations, the Board has carried out annual evaluation of (i) its own performance; (ii) individual Directors'' performance; (iii) performance of Chairman of the Board; and (iv) performance of all Committees of Board for the financial year 2021-22.
The performance evaluation was done using individual questionnaires, covering various aspects, including inter-alia the structure of the Board, participation and contribution at the meetings of the Board, receipt of regular inputs and information, skill set, knowledge and expertise of Directors. The Committees of the Board were assessed on, inter-alia, the degree of fulfilment of key responsibilities, adequacy of Committee composition and effectiveness of meetings.
The performance of Non-Independent Directors, Board as a whole and the Chairman was evaluated in a separate meeting of Independent Directors. Similar evaluation was also carried out by the Board. Performance evaluation of Independent Directors was done by the entire Board, excluding the Independent Director being evaluated. The evaluation was carried out in terms of the Nomination and Remuneration Policy of the Company. The Nomination and Remuneration cum Compensation Committee of the Company annually reviews the performance evaluation process.
The evaluation process confirms that the Board and its Committees continue to operate effectively and the performance of the Directors meets expectations.
FAMILIARISATION PROGRAMME FOR INDEPENDENT DIRECTORS
A note on the familiarisation programme adopted by the Company for orientation and training of the Directors in compliance with the Listing Regulations is provided in the report on Corporate Governance, which forms part of this Report.
In terms of the provisions of section 203 of the Companies Act, 2013, Mr. Desh Deepak Khetrapal - Managing Director & CEO (DIN 02362633), Mr. Soumitra Bhattacharyya, Chief Financial
Officer (FCA- A059004) and Mrs. Nidhi Bisaria - Company Secretary (FCS-5634) continue to hold their respective offices during the financial year 2021-22 as Key Managerial Personnel.
POLICY ON DIRECTORS'' APPOINTMENT AND REMUNERATION
The Company endeavours to have an appropriate mix of executive, non-executive and independent directors to maintain independence from management and who continuously provide appropriate governance. The selection and appointment of Board members are done on the recommendations of the Nomination & Remuneration cum Compensation Committee. The appointments are based on meritocracy and having due regard for diversity. While evaluating the candidature of an independent director, the Committee abides by the criteria for determining independence as stipulated under the Companies Act, 2013 and the SEBI Listing Regulations. In case of re-appointment of directors, the Board takes into consideration the results of the performance evaluation of the directors.
The Nomination & Remuneration Policy for Directors, Key Managerial Personnel and Senior Management is placed on the website of the Company and can be accessed through the web link: https://www.orientcement.com/wp-content/ uploads/2019/05/NRC_Policy-22_3_2019.pdf .
DETAILS OF ESTABLISHMENT OF VIGILMECHANISM / WHISTLE BLOWER POLICY
Your Company has in place a robust vigil mechanism through a Whistle Blower Policy to deal with instances of illegal practices, unethical behaviour, actual or suspected fraud or violation of the Company''s Code of Conduct and Ethics Policy.
Adequate safeguards are provided against victimization to those who take recourse to the mechanism. The details of the Whistle Blower Policy are explained in the Corporate Governance Report. The Whistle Blower Policy is available on Company''s website and can be accessed through the web link: https:// www.orientcement.com/wp-content/uploads/2016/05/ Whistle-Blower-Policy.pdf.
The Company has a duly constituted Audit Committee in line with the provisions of the Companies Act, 2013 and SEBI Listing Regulations. The primary objective of the Committee is to monitor and provide effective supervision of the Management''s financial reporting process, to ensure accurate and timely disclosures, with the highest level of transparency, integrity and quality of financial reporting. The Committee met four (4) times during the year. Detailed information pertaining to the Audit Committee has been provided in the Report on Corporate Governance.
Your Company has been certified as "Great Place to Work" for the third consecutive year in the assessment conducted by Great Place to Work Institute. This certification denotes the "High-Trust, High-Performance Culture" in the organisation.
In recognition of its constant quest for excellence in energy efficiency, environmental protection, safety, growth and innovation, your Company has been honoured and recognised at various forums. The prominent awards earned during FY22 are listed below for your reference:
Devapur Plant:
1. "Excellence in Energy Management 2021" Award as Energy Efficient Unit by CII (Confederation of Indian Industry) at the 22nd National Award Event.
2. Winner of "Greentech Energy Conservation Award 2021" and "Greentech Effective Safety Culture Award 2021" by Greentech Foundation for outstanding achievements in energy conservation and effective safety culture.
3. Platinum awards under "Apex India Green Leaf Award 2021" for Energy Efficiency and Environment Excellence, in the Cement Sector.
4. Gold award by "Telangana State Energy Conservation Awards (TSECA) - 2021", Government of Telangana, Department of Energy; in appreciation of the efforts for energy conservation for the year 2020-21.
5. "11th Exceed Occupational Health Safety and Security Gold Award 2021" by Sustainable Development Foundation for outstanding achievement in Occupational Health & Safety.
6. Devapur Limestone Mine won State Level 2nd prize (in Zone II Group A1) in "36th Mines Safety Week Observance 2021".
Chittapur Plant:
1. Winner position in "Greentech Energy Conservation Award 2021".
2. "Unnatha Suraksha Puraskara" from Director of Factories and Boiler, Govt. of Karnataka.
3. Best "Zero Liquid Discharge Plant Award 2021" from Mission Energy Foundation.
4. Winner for SOx-NOx Control for 2021 from Mission Energy Foundation.
5. 22nd National Award for "Excellence in Energy Management 2021" from CII.
6. First prize in reclamation and rehabilitation category during "Mine Environment and Mineral Conservation" function of Govt. of Karnataka.
7. Platinum award for "Environment Excellence" from Apex India.
8. Winner for "21st Annual Greentech Environment & Sustainability Award 2021" in the environment protection category.
9. Winner for "20th Annual Greentech Safety Award 2021". Jalgaon Plant:
1. "Apex India Safe Workplace Award 2021" by Apex India Foundation.
2. "Greentech Environment Award 2021" under the green belt development category by Greentech Foundation.
3. "Occupational Health Safety & Security Award 2021" for outstanding achievement under Occupational Health and Safety by Sustainable Development Foundation.
M/s B S R & Associates LLP, Chartered Accountants (ICAI Firm Registration Number 116231W/W-100024) were appointed as Statutory Auditors of the Company by the shareholders at the Annual General Meeting held on August 5, 2021 to hold office as Statutory Auditors for the term of five years from the conclusion of 10th Annual General Meeting of the Company held in the year 2021 till the conclusion of 15th Annual General Meeting of the Company to be held in the calendar year 2026.
The Auditors'' Report for the financial year 2021-22 does not contain any reservation, qualification or adverse remark, on the financial statements of the Company. Auditors'' Report is selfexplanatory and therefore, does not require further comments and explanation.
Further, in terms of section 143 of the Companies Act, 2013 read with the Companies (Audit and Auditors) Rules, 2014, as amended, notifications / circulars issued by the Ministry of Corporate Affairs from time to time, no fraud has been reported by the Auditors of the Company where they have reason to believe that an offence involving fraud is being or has been committed against the Company by officers or employees of the Company.
In terms of the section 148 of the Companies Act, 2013 read with Companies (Cost Records and Audit) Rules, 2014, the Company is required to maintain cost accounting records and get them audited every year. The Board has appointed Mr. Somnath Mukherjee, Cost Accountant (M.No.-F5343), as Cost Auditor of the Company for the financial year 2022-23 at a fee of H90,000/- (Rupees Ninety thousand only) plus applicable taxes and out of pocket expenses subject to the ratification of the said fees by the shareholders at the ensuing Annual General Meeting.
The Company has received a letter from Mr. Somnath Mukherjee to the effect that the re-appointment would be within the limits prescribed under section 141(3)(g) of the Companies Act, 2013 and that he is not disqualified for such re-appointment in terms of section 141 of the Companies Act, 2013.
Pursuant to the provisions of section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, M/s Ranjeet Pandey and Associates, Company Secretaries (Registration No. FCS-5922/ CP No. 6087), were appointed to conduct the Secretarial Audit of the Company for the financial year 2021-22.
The Secretarial Audit Report, annexed to this report as Annexure ''1'', does not contain any reservation, qualification or adverse remark and is self-explanatory. Therefore, it does not require further comments and explanation.
Pursuant to the provisions of Regulation 24A of the SEBI Listing Regulations read with SEBI Circulars issued in this regard, the Company has undertaken an audit for the financial year 2021-22 for all applicable Securities and Exchange Board of India ("SEBI") compliances. The Annual Secretarial Compliance Report issued by M/s Ranjeet Pandey and Associates, Company Secretaries, (CP No. 6087), for the financial year 2021-22 has been submitted to the Stock Exchanges within the prescribed time limit.
PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS
During the financial year under review, your Company has invested in 41,624 equity shares of H10/- each and 41,233 compulsorily convertible debentures of H1,000/- each of AMPSolar Systems Pvt. Ltd. in terms of the Share Purchase, Subscription and Shareholder''s Agreement and amendments thereto with AMPSolar Technology Private Limited and AMPSolar Systems Private Limited for acquisition of 26% stake. Please refer note no. 11 of notes to the financial statements of the Company for the financial year 2021-22 for details.
The Company has not given any loan or guarantee and/or provided security which are covered under the provisions of section 186 of the Companies Act, 2013.
The Company has adequate procedures for identification and monitoring of related party transactions. All transactions entered into with related parties during the financial year were on arm''s length basis and in ordinary course of business. All related party transactions were placed before the Audit Committee and to the Board for approval, wherever required. Omnibus approval of the Audit Committee and Board was obtained for the transactions that were of a foreseen and repetitive nature.
These transactions were reviewed by the Audit Committee on a quarterly basis.
There were no materially significant related party transactions made by the Company with promoters, directors, key managerial personnel or other designated persons which may have a potential conflict with the interest of the Company at large.
For details on related party transactions, members may refer to the notes to the financial statements. The Policy on related party transactions as approved by the Board is available on the Company''s website and can be accessed through the web link: https://www.orientcement.com/wp-content/uploads/2022 /04/Related-Party-Transaction-Policy.pdf.
Particulars of contract or arrangements with related parties referred to in section 188(1) of the Companies Act, 2013, in the prescribed Form AOC-2, is annexed as Annexure ''2'' to this Report.
CHANGE IN THE NATURE OF BUSINESS
There is no change in the nature of business of the Company during the year under review.
MATERIAL CHANGES AND COMMITMENTS
No material changes and commitments, affecting the financial position of the Company have occurred between March 31, 2022 and the date of the report.
The Company has constituted a Risk Management Committee of the Board to review the risk management plan / process of the Company. The Risk Management Committee identifies potential risks, assesses their potential impact and takes timely action to mitigate the same.
The Company has a Risk Management Policy which has been approved by the Board. The Risk Management Policy acts as an overarching statement of intent and establishes the guiding principles by which key risks are managed across the organization. The Board monitors and reviews periodically the implementation of various aspects of the Risk Management Policy through a duly constituted Risk Management Committee (RMC). The RMC assists the Board in its oversight of the Company''s management of key risks, including strategic and operational risks, as well as the guidelines, policies and processes for monitoring and mitigating such risks under the aegis of the overall Business Risk Management Framework.
There are no risks identified by the Board which may threaten the existence of the Company. Please refer detailed section on risk management covered in the Management Discussion and Analysis Report which forms an integral part of this report.
The details about the Risk Management Committee are provided in Corporate Governance Report which forms part of this Report.
INTERNAL FINANCIAL CONTROLS AND ITS ADEQUACY
As per the provisions of section 134(5)(e) of the Companies Act, 2013, the Directors have an overall responsibility for ensuring that the Company has implemented robust systems/frameworks of internal financial controls to provide them with reasonable assurance regarding the adequacy and operating effectiveness of controls with regard to reporting, operational and compliance risks. To enable the Directors to meet these responsibilities, the management has devised systems/frameworks which are operating within the Company. In line with best practices, the Audit Committee and Board regularly review the internal control system to ensure that it remains effective and fit for the purpose. Where weaknesses are identified as a result of the reviews, new procedures are put in place to strengthen controls and these are in turn reviewed at regular intervals. The systems/frameworks include proper delegation of authority, policies and procedures, effective IT systems aligned to business requirements, internal audit framework, ethics framework, risk management framework and adequate segregation of duties.
Your Company''s management has established and maintained internal financial controls based on the internal control over financial reporting criteria established in the integrated framework issued by the Committee of Sponsoring Organisations of the Treadway Commission (2013 Framework) (the COSO criteria), which considers the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India. Based on information provided, nothing has come to the attention of Directors to indicate that any material breakdown in the function of these controls, procedures or systems occurred during the year under review.
The Internal Auditor of the Company reports functionally to the Audit Committee of the Board, which reviews and approves risk based annual internal audit plan. The Audit Committee periodically reviews the performance of internal audit function.
CORPORATE SOCIAL RESPONSIBILITY
The basic concept of Company''s Corporate Social Responsibility (''CSR '') is to serve the interest of the society in a just and equitable manner along with taking responsibility for the impact of business activities on various stakeholders in all aspects of Company''s operations. Your Company has been taking several initiatives under CSR for the society at large, much before it was prescribed through the Companies Act, 2013.
The Board has constituted a CSR Committee and has a well-defined Policy on CSR as per the requirement of section 135 of the Companies Act, 2013, which covers the activities as prescribed under Schedule VII of the Companies Act, 2013. The details about the CSR Committee are provided in Corporate Governance Report which forms a part of this Report.
The Annual Report on CSR activities, pursuant to section 134(3) (o) of the Companies Act, 2013 and Rule 9 of the Companies (Corporate Social Responsibility Policy) Rules, 2014, forms part of this Report as Annexure ''3''.
The CSR Policy of the Company is placed on the website of the Company and can be accessed through the web link: https:// www.orientcement.com/wp-content/uploads/2021/05/ corporate-social-responsibilty-policy.pdf.
PARTICULARS OF EMPLOYEES, DIRECTORS AND KEY MANAGERIAL PERSONNEL
The disclosures relating to remuneration and other details as required in terms of the provisions of Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are given in Annexure ''4'', which forms an integral part of this Report.
Further, in terms of the first proviso to Section 136 of the Act, the Reports and Accounts are being sent to the shareholders excluding the information required under Rule 5(2) and (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. The said information will be made available for inspection through electronic mode by writing to the Company at [email protected] from the date of circulation of the AGM Notice till the date of the AGM.
As on March 31,2022, the issued, subscribed and paid-up Share Capital of the Company was 20,48,68,760 shares of H 1/- each. There was no change in the capital structure of the Company during the financial year ended March 31,2022.
Pursuant to section 134(3)(a) and section 92(3) of the Companies Act, 2013 read with Rule 12 of the Companies (Management and Administration) Rules, 2014, the annual return of the Company as at March 31, 2022 can be accessed through the web link https://orientcement.com/wp-content/uploads/2022/06/ Annual-Return-2021-22.pdf.
The Company has in place the Employees Stock Option Scheme 2015 (''ESOS-2015'') which provides for grant of stock options to eligible employees of the Company.
During the financial year 2021-22, no options were granted under ESOS-2015. The applicable disclosure under SEBI (Share Based Employee Benefits) Regulations, 2014 ("SEBI Regulations") as at March 31, 2022 has been uploaded on the website of the Company and can be accessed through the web link https:// orientcement.com/wp-content/uploads/2022/06/ESOP-disclosure-2022.pdf. There is no change in the ESOS scheme of the Company during the financial year.
Certificate from M/s Ranjeet Pandey and Associates, Company Secretaries (Registration No. FCS-5922/CP No. 6087), Secretarial Auditors of the Company confirming that the scheme has been implemented in accordance with the SEBI Regulations, would be placed at the ensuing Annual General Meeting of the Company for inspection by the members.
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013
The Company has zero tolerance towards sexual harassment at the workplace and has adopted a policy on prevention, prohibition and redressal of sexual harassment at workplace in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules thereunder. The Company has constituted Internal Complaints Committee which is responsible for redressal of complaints related to sexual harassment.
During the financial year ended March 31, 2022, the Company has not received any complaint under the aforesaid regulations, nor was any complaint pending resolution from the previous year.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
As required by Regulation 34(2) of the SEBI Listing Regulations, a detailed Management Discussion and Analysis Report is presented in a separate section forming an integral part of the Annual report.
Corporate Governance ensures fairness, transparency and integrity of the management. As a part of its strategy, the Company believes in adopting the ''best practices'' that are followed in the area of Corporate Governance. The Company emphasizes the need for full transparency and accountability in all its transactions, in order to protect the interests of its stakeholders. The Board considers itself a trustee of the Company''s shareholders and acknowledges its responsibilities towards them for creating and safeguarding their wealth. The Company is committed to high levels of ethics and integrity in all its business dealings that avoids conflicts of interest. In order to conduct business with these principles, the Company has created a corporate structure based on business needs and maintains a high degree of transparency through regular disclosures with a focus on adequate control systems.
As per Regulation 34(3) read with Schedule V of the SEBI Listing Regulations, a detailed report on Corporate Governance forms an integral part of this Annual Report and is set out as a separate section.
The certificate of M/s B S R & Associates LLP (ICAI Firm Registration Number 116231W/W-100024), Chartered Accountants, the Statutory Auditors of the Company certifying
compliance with the conditions of corporate governance as stipulated in the SEBI Listing Regulations is annexed with the Report on Corporate Governance. The Auditors'' certificate for financial year 2021-22 does not contain any qualification, reservation or adverse remark.
The equity shares of the Company continue to be listed on the National Stock Exchange of India Limited and BSE Limited. The annual listing fees for the financial year 2022-23 have been paid to these exchanges.
DIRECTORS'' RESPONSIBILITY STATEMENT
Pursuant to section 134(3)(c) of the Companies Act, 2013, the Board of Directors hereby state that:
1. In the preparation of the annual accounts for the financial year ended March 31, 2022, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;
2. They have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as on March 31, 2022 and of the profit and loss of the Company for the year ended on that date;
3. They 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;
4. They have prepared the annual financial statements on a going concern basis;
5. They have laid down internal financial controls to be followed by the Company and that such internal financial controls were adequate and operating effectively.
6. They have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION
The Company values the significance of conservation of energy and technology absorption and remains conscious about the environmental impact of its business operations. During the financial year, the Company implemented various energy conservation measures, technology absorption and process optimisation measures across all its plants. Judicious use of energy was adopted at all levels of operations by utilizing energy efficient systems and processes and continuous monitoring thereof. As a result of these initiatives, Orient Cement, especially
its integrated cement plant at Chittapur, has one of the lowest specific energy consumption in the Indian cement industry.
Apart from several measures implemented by the Company during the financial year 2021-22 towards conservation of energy and as part of Green Energy initiatives, the Company is setting up Waste Heat Recovery System at Chittapur @10.1 MW and further, the Company has entered into various agreements with AMPSolar Technology Private Limited and AMPSolar Systems Private Limited and has set up a solar power plant with a capacity of 13.5 MW, under the Captive Scheme in Maharashtra. With this arrangement the power requirement of Jalgaon plant will be significantly substituted by solar power thereby reducing carbon footprint by consuming around 50% of the requirement using solar power.
The cement industry is water intensive, and the Company realises its responsibility to reduce water usage within its facilities. The Company strives to save water through advanced monitoring, management, awareness and engineering solutions for water conservation. All our plants are water positive.
The particulars required under section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 regarding conservation of energy, technology absorption is enclosed as Annexure ''5'' forming part of this Report.
FOREIGN EXCHANGE EARNINGS AND OUTGO
During the financial year, the Company has not earned any foreign exchange.
The total foreign exchange outgo during the year was H55.22 crore.
SUBSIDIARIES, ASSOCIATES AND JOINT VENTURE COMPANIES
During the financial year 2021-22, the Company had no Subsidiary, Associate or Joint Venture company.
During the financial year under review, the Company did not accept deposits covered under Chapter V of the Companies Act, 2013.
SIGNIFICANT AND MATERIAL ORDERS
There are no significant and material orders passed by the Regulators/Courts/Tribunal which would impact the going concern status of the Company and its operations in the future.
BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT
In terms of amendment to regulation 34(2)(f) of the Listing Regulations vide Gazette notification no. SEBI/LAD-NRO/ GN/2021/22 dated May 05, 2021, SEBI has introduced new
reporting requirements on ESG parameters called the Business Responsibility and Sustainability Report (BRSR). In terms of the aforesaid amendment, with effect from the financial year 2022-2023, filing of BRSR shall be mandatory for the top 1000 listed companies (by market capitalization) and shall replace the existing Business Responsibility Report. However, filing of BRSR is voluntary for the financial year 2021-22.
Your Company, being one of such top 1000 listed entities, has voluntarily decided to report as per the new reporting requirements of BRSR. The BRSR has been prepared for financial year 2021-22 and is included as part of this Annual Report.
COMPLIANCE WITH SECRETARIAL STANDARDS
The Company has complied with the applicable Secretarial Standards issued by the Institute of Company Secretaries of India.
OTHER DISCLOSURES
Your Directors state that no disclosure or reporting is required with respect to the following items as there were no transactions related to these items during the year under review:
1. Transfer/ proposed transfer of amount to reserves.
2. Issue of equity shares with differential voting rights or sweat equity or stock options.
3. Application made or any proceeding pending under the Insolvency and Bankruptcy Code, 2016 during the year along with their status as at the end of the financial year.
4. Difference between amount of the valuation done at the time of one-time settlement and the valuation done while taking loan from the Banks or Financial Institutions along with the reasons thereof.
ACKNOWLEDGEMENT
Your Directors take this opportunity to thank all Shareholders, Clients, Vendors, Banks, Ministries and Departments of Government of India and Regulatory Authorities for their continued support. The Directors also place on record their deep appreciation to all the employees for their hard work, dedication and commitment, which enabled the delivery of the improved performance by your Company during a year full of extreme volatility and challenges.
By order of the Board of Directors For Orient Cement Limited
CK. Birla
Place: New Delhi Chairman
Date: May 11,2022 (DIN 00118473)
Mar 31, 2018
The directors are pleased to present the 7th Annual Report on the business and operations of the Company along with the audited financial statements for the financial year ended 31st March, 2018.
SUMMARY OF FINANCIAL PERFORMANCE
The financial performance of the Company for the financial year ended 31st March, 2018 is summarised below:
(Rs. in Lacs)
Particulars |
2017-18 |
2016-17 |
Gross Sales |
2,31,084.51 |
2,17,089.12 |
Total Revenue (Net of excise) |
2,24,256.96 |
1,88,703.06 |
Earnings before interest, depreciation, amortisation & taxation |
32,540.70 |
19,039.04 |
Interest / finance costs |
12,920.96 |
13,533.51 |
Profit before depreciation and taxation |
19,619.74 |
5,505.53 |
Depreciation and amortization expenses |
12,616.62 |
12,153.59 |
Net Profit before taxation |
7,003.12 |
(6,648.06) |
Taxation |
2,580.98 |
(3,438.21) |
Net profit |
4,422.14 |
(3,209.85) |
Profit brought forward from last year |
24,794.09 |
30,576.30 |
Profit available for appropriations |
29,216.23 |
27,366.45 |
Appropriations |
||
Other Comprehensive Income |
(49.01) |
(106.61) |
Dividend on equity shares |
1,024.34 |
2,048.69 |
Corporate dividend tax |
208.53 |
417.06 |
Balance carried to balance sheet |
27,934.35 |
24,794.09 |
EPS |
2.16 |
(1.57) |
BUSINESS AND FINANCIAL PERFORMANCE
Post demonetisation, the cement demand from the housing sector continued to remain subdued and was further aggravated by introduction of policies like RERA and GST. The ban on the sand mining in several states also impacted cement demand. However, the Governmentâs push on execution of large infrastructure projects revived the demand in the second half of the year and coupled with the low base from demonetisation last year, contributed to an overall demand growth of over 6% for the full year.
On the cost front, fuel prices continued to rise during the year as a consequence of the increase in the global energy prices, adversely impacting the profit margins of the industry as a whole.
In this backdrop, the key business and financial highlights of your Company for FY18 are as under:
- Total sales volume for the year stood at 57.46 Lac tons against 55.52 Lac tons in FY17, a growth of around 3.5%.
- We continue to focus on PPC cement production in line with your Companyâs commitment to environmental sustainability. 75% of cement volume was sold as PPC from the old operations and while PPC sales from relatively new operations are also scaling up steadily to reacRs.47% for the year.
- Net sales realisation for the year was RS.3858 per ton, higher as compared to RS.3369 per ton last year.
- Variable production cost was higher largely on account of higher fuel prices.
- Despite an extremely challenging year in terms of demand, the overall capacity utilisation of the Company stood at 72% for the year as compared to 69% during last year.
- EBITDA for the year was RS.32541 Lac as compared to RS.19039 Lac during the previous year largely driven by better sales realisation.
- Net profit for the year was RS.4422 Lac compared to net loss of RS.3210 Lac during the last year.
The construction work for the Chittapur railway siding and the township for employees started during the year and is expected to complete in the second half of FY19. We are also evaluating the setting up of waste heat recovery plants at both Devapur and Chittapur to optimise power cost and reduce our dependence on the fossil fuel.
DIVIDEND
Your Directors are pleased to recommend a final dividend amounting to RS.0.75/- (75%) per equity share of face value of Re. 1/- each for the year ended 31st March, 2018, subject to approval of shareholders at the forthcoming annual general meeting of the Company as against dividend of RS.0.50/- (50%) per equity share paid in the immediately preceding year.
The Register of Members and Share Transfer Books of the Company will remain closed from Monday, 13th day of August, 2018 to Friday, 17th day of August, 2018, both days inclusive, for determining the entitlement of the shareholders to the final dividend for financial year 2017-18.
BOARD OF DIRECTORS, ITS COMMITTEES AND MEETINGS THEREOF
The Company has a professional Board with an optimum combination of executive, non-executive and independent directors (including one woman director) who bring to the table the right mix of knowledge, skills and expertise. The Board provides strategic guidance and direction to the Company in achieving its business objectives and protecting the interest of the stakeholders. The Board is also supported by four Committees of directorsâ viz. the Audit Committee, the Nomination & Remuneration cum Compensation Committee, the Corporate Social Responsibility Committee and the Stakeholdersâ Relationship Committee.
One meeting of the Board of Directors is held in each quarter. Additional meetings of the Board/Committees are convened as may be necessary for the proper management of the business operations of the Company. A separate meeting of independent directors is also held at least once in a calendar year to review the performance of non-independent directors, the Board as a whole and the Chairman.
During the financial year ended 31st March, 2018, the Board of Directors met 6 (six) times viz. on 5th May 2017, 26th July 2017, 8th August 2017, 2nd November 2017, 29th January 2018 and 27th March, 2018. The intervening gap between the meetings was within the period prescribed under the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
A detailed update on the Board and its Committeesâ composition, number of meetings held during the financial year 2017-18 and attendance of the directors at these meetings is provided in the Report on Corporate Governance.
CHANGES IN DIRECTORS
In terms of the provisions of section 152 of the Companies Act, 2013 and in terms of the Articles of Association of the Company, Mrs. Amita Birla (DIN 00837718), a non-executive director of the Company, is liable to retire by rotation at the ensuing Annual General Meeting of the Company and being eligible, offers herself for re-appointment. The Board of Directors recommends her re-appointment for the consideration of the members of the Company at the ensuing Annual General Meeting.
Mr. Desh Deepak Khetrapal (DIN 02362633) was re-appointed as Managing Director & CEO of the Company w.e.f 1st April, 2015 for a period of 5 (five) years. However, his remuneration was subject to revision every year. On the recommendation of the Nomination & Remuneration cum Compensation Committee, the Board of Directors in their meeting held on 3rd May, 2018, recommended revision in Mr. Khetrapalâs remuneration for shareholdersâ approval. The resolution seeking consideration of Mr. Khetrapalâs remuneration has been included in the Notice of the Annual General Meeting. The Board of Directors recommends the resolution for your approval.
During the financial year, there was no change in the constitution of the Board of Directors of the Company except Mr. I.Y.R. Krishna Rao (DIN 00481367) was appointed as an Additional Director w.e.f. 5th May, 2017. The appointment of Mr. I.Y.R. Krishna Rao as an Independent Director not liable to retire by rotation was confirmed by the shareholders in the Annual general Meeting held on 23rd September 2017.
A brief profile and other details relating to the Directors are furnished in the Annual Report.
None of the directors are disqualified under section 164(2) of the Companies Act, 2013.
DECLARATION BY INDEPENDENT DIRECTORS
All independent directors of the Company have declared and confirmed that they meet with the criteria of independence as prescribed under section 149(6) of the Companies Act, 2013 and Regulation 16(b) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
KEY MANAGERIAL PERSONNEL
During the year under review, Mrs. Deepanjali Gulati -Company Secretary (FCS-5304) resigned from the services of the Company with effect from the close of business hours of 31st October, 2017 and Mrs. Nidhi Bisaria (FCS-5634) was appointed as the Company Secretary of the Company with effect from 23rd November, 2017.
In addition, in terms of the provisions of section 203 of the Companies Act, 2013, Mr. Desh Deepak Khetrapal - Managing Director & CEO (DIN 02362633) and Mr. Sushil Gupta -Chief Financial Officer (FCA-044924) continue to hold their respective offices during the current financial year as Key Managerial Personnel.
DETAILS OF ESTABLISHMENT OF VIGIL MECHANISM / WHISTLE BLOWER POLICY
Your Company has formulated a vigil mechanism through a Whistle Blower Policy to deal with instances of illegal practices, unethical behaviour, actual or suspected fraud or violation of the Companyâs Code of Conduct or Ethics Policy.
Adequate safeguards are provided against victimization to those who avail of the mechanism. The details of the Whistle Blower Policy are explained in the Corporate Governance Report. The Whistle Blower Policy is available on Companyâs website and can be accessed through the web link: http:// orientcement.com/investors/.
AUDIT COMMITTEE
The Company has a duly constituted Audit Committee in line with the provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The primary objective of the Committee is to monitor and provide effective supervision of the Managementâs financial reporting process, to ensure accurate and timely disclosures, with the highest level of transparency, integrity and quality of financial reporting. The Committee met four (4) times during the year. Detailed information pertaining to the Audit Committee has been provided in the Report on Corporate Governance.
POLICY ON DIRECTORSâ APPOINTMENT AND REMUNERATION
The Company endeavours to have an appropriate mix of executive, non-executive and independent directors, so as to have independence on the Board and separate its function of governance from that of management. The selections and appointments on the Board of the Company are done on the recommendation of the Nomination & Remuneration cum Compensation Committee. The appointments are based on meritocracy and the candidates are considered against objective criteria, having due regard to the benefits of diversity on the Board. While evaluating the candidature of an independent director, the Committee abides by the criteria for determining independence as stipulated under the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. In case of re-appointment of directors, the Board takes into consideration the results of the performance evaluation of the directors.
The copy of the Nomination & Remuneration Policy for Directors, KMPs and Senior Management is attached as Annexure âIâ to the Corporate Governance Report.
AWARDS AND RECOGNITIONS
In recognition of its constant quest for growth and achievement, your Company has been honoured and recognised at various forums. The prominent awards are listed below for your reference:
Devapur Plant:
1. Best Management Award, issued by Labour Department, Govt. of Telangana on May Day 2017
2. National Energy Management Gold Award from Society of Energy Engineers & Energy Managers (SEEM) -2016
3. National Award for Excellence in Energy Management 2017 from CII
4. Mines Safety Week 2017 Awards by Director General of Mines Safety
Overall performance 2nd Prize
Electrical Installation 1st Prize
- Best Practices in Mines- 1st Prize
Crusher and Belt Conveyor 1st Prize
Swatch Bharat 2nd Prize
Safe Mine Workings 2nd Prize
Chittapur Plant:
1. Safety awards from the Mines Safety Association Karnataka (MSAK) 2017-18 Contractual Work and Safety is my responsibility cards 1st Prize
Publicity & Propaganda and Innovation 1st Prize Safety Management System 2nd Prize
Maintenance of Mining Machinery and Crusher 2nd Prize
Swachh Bharat Abhiyan 3rd Prize
2. Mines Environment & Mineral Conservation Week Awards 2017-18 by Indian Bureau of Mines
Waste Dump Management 3rd Prize
Reclamation and Rehabilitation 3rd Prize
3. Best Safe Performance of Plant, Best Training and Resources Award by KRISC (Kalburgi Regional Industrial Safety Committee) under the aegis of Department of Factories, Boilers, Industrial Safety and Health.
STATUTORY AUDITORS
At the Annual General Meeting held in the year 2014, M/s S.R. Batliboi & Co. LLP, Chartered Accountants (ICAI Firm Registration Number 301003E/ E300005) was appointed as Statutory Auditors of the Company by the shareholders to hold office as Statutory Auditors from the conclusion of Annual General Meeting held in the year 2014 till the conclusion of eighth Annual General Meeting of the Company to be held in the year 2019, subject to ratification of their appointment at every Annual General Meeting.
The Company has received a letter from the auditors confirming that they are eligible for appointment as auditors of the Company under section 139 of the Companies Act, 2013 and meet the criteria for appointment specified in section 141 of the Companies Act, 2013.
Based on the recommendation of the Audit Committee and as per the provisions of section 139(1) of the Companies Act, 2013, the Board of Directors of your Company proposes to ratify the appointment of M/s S.R. Batliboi & Co. LLP, Chartered Accountants (ICAI Firm Registration Number 301003E/ E300005) as the Statutory Auditors of the Company for the financial year 2017-18.
Auditorsâ Report is self-explanatory and therefore, does not require further comments and explanation.
Further, in terms of section 143 of the Companies Act, 2013 read with the Companies (Audit and Auditors) Rules, 2014, as amended, notifications / circulars issued by the Ministry of Corporate Affairs from time to time, no fraud has been reported by the auditors of the Company where they have reason to believe that an offence involving fraud is being or has been committed against the Company by officers or employees of the Company.
COST AUDITORS
In terms of the section 148 of the Companies Act, 2013 read with Companies (Cost Records and Audit) Rules, 2014, the Company is required to maintain Cost Accounting records and get them audited every year. The Board appointed Mr. Somnath Mukherjee, Cost Accountant (M.No.-F5343), as Cost Auditors of the Company for the financial year 2018-19 at a fee of RS.85,000/- (Eighty five thousand only) plus out of pocket expenses subject to the ratification of the said fees by the shareholders at the ensuing Annual General Meeting.
The Company has received a letter from him to the effect that his re-appointment would be within the limits prescribed under section 141(3)(g) of the Companies Act, 2013 and that he is not disqualified for such re-appointment within the meaning of section 141 of the Companies Act, 2013.
SECRETARIAL AUDITORS
Pursuant to the provisions of section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, M/s Ranjeet Pandey and Associates, Company Secretaries (Registration No. F-5922), were appointed to conduct the Secretarial Audit of the Company for the financial year 2017-18.
The Secretarial Audit Report is annexed to this report as Annexure â1â. The Secretarial Auditorâs report is self-explanatory and therefore, does not require further comments and explanation.
The Board has re-appointed M/s Ranjeet Pandey and Associates, Company Secretaries, (Registration No. F-5922), as Secretarial Auditor of the Company for the financial year 2018-19.
PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS
During the financial year under review, your Company has not given any loan or guarantee, made investments and provided securities which are covered under the provisions of section 186 of the Companies Act, 2013.
RELATED PARTY TRANSACTIONS
The Company has adequate procedures for identification and monitoring of related party transactions. All transactions entered into with related parties during the financial year were on an armâs length basis. All related party transactions were placed before the Audit Committee and also the Board for approval, wherever required. Prior omnibus approval of the Audit Committee and Board was obtained for the transactions that were of a foreseen and repetitive nature. These transactions were reviewed by the Audit Committee on a quarterly basis.
There were no materially significant related party transactions made by the Company with promoters, directors, key managerial personnel or other designated persons which may have a potential conflict with the interest of the Company at large.
For details on related party transactions, members may refer to the notes to the financial statement. The Policy on related party transactions as approved by the Board is available on the Companyâs website and can be accessed through the web link: http://orientcement.com/investors/.
Particulars of contract or arrangements with related parties referred to in section 188(1) of the Companies Act, 2013, in the prescribed Form AOC-2, is annexed as Annexure â2â to the Report.
CHANGE IN THE NATURE OF BUSINESS
There is no change in the nature of business of the Company during the year under review.
RISK MANAGEMENT
The Company has constituted a Risk Management Committee to review the risk management plan / process of the Company. The Risk Management Committee identifies potential risks, assesses their potential impact and takes timely action to mitigate the same.
The Company has a Risk Management Policy which has been approved by the Board. The Risk Management Policy acts as an overarching statement of intent and establishes the guiding principles by which key risks are managed across the organization. The Board monitors and reviews periodically the implementation of various aspects of the Risk Management Policy through a duly constituted Risk Management Committee (RMC). The RMC assists the Board in its oversight of the Companyâs management of key risks, including strategic and operational risks, as well as the guidelines, policies and processes for monitoring and mitigating such risks under the aegis of the overall Business Risk Management Framework.
There are no risks identified by the Board which may threaten the existence of the Company.
INTERNAL FINANCIAL CONTROLS AND ITS ADEQUACY
As per the provisions of section 134(5)(e) of the Companies Act, 2013, the directors have an overall responsibility for ensuring that the Company has implemented robust systems/ framework of internal financial controls to provide them with reasonable assurance regarding the adequacy and operating effectiveness of controls with regard to reporting, operational and compliance risks. To enable the directors to meet these responsibilities, the management has devised systems/ frameworks which are operating within the Company. In line with best practice, the Audit Committee and Board regularly review the internal control system to ensure that it remains effective and fit for the purpose. Where weaknesses are identified as a result of the reviews, new procedures are put in place to strengthen controls and these are in turn reviewed at regular intervals. The systems/ frameworks include proper delegation of authority, policies and procedures, effective IT systems aligned to business requirements, internal audit framework, ethics framework, risk management framework and adequate segregation of duties.
Your Companyâs management has established and maintained internal financial controls based on the internal control over financial reporting criteria established in the integrated framework issued by the Committee of Sponsoring Organisations of the Treadway Commission (2013 Framework) (the COSO criteria), which considers the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India. Based on information provided, nothing has come to the attention of directors to indicate that any material breakdown in the function of these controls, procedures or systems occurred during the year under review.
The Internal Auditor of the Company reports functionally to Audit Committee of Board, which reviews and approves risk based annual internal audit plan. Audit Committee periodically reviews the performance of internal audit function.
CORPORATE SOCIAL RESPONSIBILITY
The basic concept of Companyâs CSR is to serve the interest of society in a just and equitable manner along with taking the responsibility for the impact of business activities on various stakeholders in all aspects of Companyâs operations. Your Company has been taking several initiatives under Corporate Social Responsibility (âCSRâ) for society at large, well before it has been prescribed through the Companies Act, 2013.
The Company has constituted a CSR Committee and has a well-defined Policy on CSR as per the requirement of section 135 of the Companies Act, 2013 which covers the activities as prescribed under Schedule VII of the Companies Act, 2013. Detailed information pertaining to the CSR Committee has been provided in the Report on Corporate Governance.
The CSR Policy laid down by the Company ensures that:
1. The CSR agenda is integrated with the business;
2. Focused efforts are made in the identified community development areas to achieve the expected outcome;
3. The Company contributes towards nation-building through its CSR activities.
As part of its initiatives under CSR, the Company has contributed for healthcare, infrastructure development and education for the year under review.
Corporate Social Responsibility Report, pursuant to section 134(3)(o) of the Companies Act, 2013 and Rule 9 of the Companies (Corporate Social Responsibility) Rules, 2014, forms part of this Report as Annexure â3â
The CSR Policy of the Company is placed on the website of the Company and can be accessed through the web link: http://orientcement.com/investors/.
PARTICULARS OF EMPLOYEES, DIRECTORS AND KEY MANAGERIAL PERSONNEL
The information required pursuant to section 197 of the Companies Act, 2013, read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is attached as Annexure â4â forming an integral part of this Report.
SHARE CAPITAL
During the year under review, the Issued, Subscribed and Paid up Share Capital of the Company was 20,48,68,760 shares of RS.1 each. There was no change in the capital structure of the Company.
EXTRACT OF THE ANNUAL RETURN
Pursuant to section 134(3)(a) and section 92(3) of the Companies Act, 2013 read with Rule 12 of the Companies (Management and Administration) Rules, 2014, relevant extract of annual return for the financial year 2017-18 is given as Annexure â5â to this Report.
EMPLOYEES STOCK OPTION SCHEME
The Company has in place the Employees Stock Option Scheme 2015 (âESOS-2015â) which provides for grant of Stock Options to eligible employees of the Company.
During the financial year 2017-18, no options were granted under ESOS-2015. The applicable disclosures under SEBI (Share Based Employee Benefits) Regulations, 2014 (âSEBI Regulationsâ) as at 31st March, 2018 has been uploaded on the website of the Company and can be accessed through the web link http://orientcement.com/investors/. There is no change in the ESOS scheme of the Company during the financial year.
Certificate from M/s S.R. Batliboi & Co. LLP, Chartered Accountants (ICAI Firm Registration Number 301003E/ E300005), Statutory Auditors of the Company confirming that the scheme has been implemented in accordance with the SEBI Regulations, would be placed at the ensuing Annual General Meeting of the Company for inspection by the members.
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013
The Company has zero tolerance towards sexual harassment at the workplace and has adopted a policy on prevention, prohibition and redressal of sexual harassment at workplace in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules thereunder. The Company has constituted Internal Complaints Committee which is responsible for redressal of complaints related to sexual harassment.
As per the provisions of section 21 and 22 of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, the report on the details of the number of cases filed under Sexual Harassment and their disposal, during the calendar year 2017 is as under:
Number of cases pending as on the beginning Nil of the financial year
Number of complaints filed during the Nil financial year
Number of cases pending as on the end of the Nil financial year
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
As required by Regulation 34(2) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a detailed Management Discussion and Analysis Report is presented in a separate section forming part of the Annual report.
CORPORATE GOVERNANCE
Corporate Governance ensures fairness, transparency a nd integrity of the manag ement. As a part of its strateg y, the Company believes in adopting the âbest practicesâ that are followed in the area of Corporate Governance. The Company emphasizes the need for full transparency and accountability in all its transactions, in order to protect the interests of its stakeholders. The Board considers itself a Trustee of the Companyâs shareholders and acknowledges its responsibilities towards them for creating and safeguarding their wealth. The Company is committed to high levels of ethics and integrity in all its business dealings that avoids conflicts of interest. In order to conduct business with these principles, the Company has created a corporate structure based on business needs and maintains a high degree of transparency through regular disclosures with a focus on adequate control systems.
A detailed report on Corporate Governance forms an integral part of Annual Report and is set out as separate section therein.
The certificate of M/s S.R. Batliboi & Co. LLP (ICAI Firm Registration Number 301003E/ E300005), Chartered Accountants, the Statutory Auditors of the Company certifying compliance with the conditions of corporate governance as stipulated in the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is annexed with the Report on Corporate Governance. The Auditorsâ certificate for financial year 2017-18 does not contain any qualification, reservation or adverse remark.
PERFORMANCE EVALUATION OF BOARD, COMMITTEES AND INDIVIDUAL DIRECTORS
A formal evaluation of the performance of the Board, its Committees, the Chairman and the individual directors was carried out for the financial year 2017-18. The performance evaluation was done using individual questionnaires, covering amongst others, composition of Board, receipt of regular inputs and information, functioning, performance and structure of Board Committees, skill set, knowledge and expertise of directors, preparation and contribution at Board meetings, leadership etc.. The performance evaluation of the respective Committees and that of independent and nonindependent directors was done by the Board excluding the director being evaluated.
The performance evaluation of non-independent directors, the Chairman and the Board was done by the independent directors.
LISTING WITH STOCK EXCHANGES
The Equity Shares of the Company are listed on National Stock Exchange of India Limited and BSE Limited. The annual listing fees for the financial year 2018-19 have been paid to these exchanges.
DIRECTORSâ RESPONSIBILITY STATEMENT
Pursuant to section 134(3)(c) of the Companies Act, 2013, the Board of Directors hereby state that:
1. In the preparation of the annual accounts for the financial year ended 31st March, 2018, the applicable accounting standards have been followed along with proper explanation relating to material departures;
2. They have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as on 31st March, 2018 and of the profit and loss of the Company for the year ended on that date;
3. They 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;
4. They have prepared the annual financial statements on a going concern basis;
5. They have laid down internal financial controls to be followed by the Company and that such internal financial controls were adequate and were operating effectively.
6. They have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
MATERIAL CHANGES AND COMMITMENTS
No material changes and commitments affecting the financial position of the Company have occurred between the end of the financial year of the Company to which the financial statements relate and till the date of this Report.
CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION
The Company values the significance of conservation of energy and technology absorption and remains conscious about the environment impact of its business operations. During the financial year, the Company undertook a variety of energy conservation measures across all its plants, making continuous efforts for judicious use of energy at all levels of operations by utilizing energy efficient system and processes. Some steps taken towards energy conservation are the result of technology absorption. Our new integrated cement manufacturing unit at Chittapur has been installed with new state of the art technology and latest energy efficient equipment.
The particulars required under section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 regarding conservation of energy, technology absorption are enclosed as Annexure â6â forming part of this Report.
FOREIGN EXCHANGE EARNINGS AND OUTGO
During the financial year, the Company has not earned any foreign exchange.
The total foreign exchange outgo during the year was RS.1863.47 lacs.
SUBSIDIARIES, ASSOCIATES AND JOINT VENTURE COMPANIES
During the financial year 2017-18, the Company had no Subsidiary, Associate or Joint Venture company.
DEPOSITS
During the financial year under review, the Company did not accept deposits covered under Chapter V of the Companies Act, 2013.
SIGNIFICANT AND MATERIAL ORDERS
No significant and material orders have been passed by any regulators or courts or tribunals against the Company impacting the going concern status and Companyâs operations in future.
BUSINESS RESPONSIBILITY REPORT
The SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 mandates inclusion of Business Responsibility Report as part of Annual Report for top 500 listed entities based on market capitalization. The Company falls under the top 500 listed companies by market capitalization. Accordingly, in compliance with the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Business Responsibility Report is presented in a separate section forming part of the Annual report..
DIVIDEND DISTRIBUTION POLICY
Regulation 43A of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, requires top 500 listed Companies based on the market capitalization to formulate Dividend Distribution Policy. In compliance of the said requirement, the Company has formulated the Dividend Distribution Policy. The Dividend Distribution Policy of the Company is enclosed as Annexure -â7â to this Report and is also placed on the website of the Company. This can be accessed through the web link: http://orientcement.com/ investors/.
COMPLIANCE WITH SECRETARIAL STANDARDS ON BOARD AND GENERAL MEETINGS
The Company has complied with Secretarial Standards issued by the Institute of Company Secretaries of India on Board Meetings and General Meetings.
OTHER STATUTORY DISCLOSURES
Your directors state that no disclosure or reporting is required with respect to the following items as there were no transactions related to these items during the year under review:
1. Issue of equity shares with differential rights as to dividend, voting or otherwise.
2. Issues of sweat equity shares
3. Provision of money for purchase of its own shares by employees or by trustees for the benefit of employees
ACKNOWLEDGEMENT
Your Directors place on record their appreciation for assistance and co-operation received from various Ministries and Departments of Government of India and other State Governments, banks, shareholders of the Company etc. Your Directors wish to place on record their sincere appreciation for the dedicated efforts and consistent contribution made by the employees at all levels, to ensure that the Company continues to grow and excel.
By order of the Board of Directors
For Orient Cement Limited
CK. Birla
Place: New Delhi Chairman
Date: 3rd May, 2018 (DIN 00118473)
Mar 31, 2017
The directors are pleased to present the 6th Annual Report on the business and operations of the Company along with the audited financial statements for the financial year ended 31st March, 2017.
SUMMARY OF FINANCIAL PERFORMANCE
The financial performance of the Company for the financial year ended 31st March, 2017 is summarized below:
(Rs, in crores)
Particulars |
2016-17 |
2015-16 |
Gross Sales |
2,171.28 |
1,691.63 |
Total Revenue (Net of excise) |
1,875.14 |
1,469.43 |
Earnings before interest, depreciation, amortization & taxation |
190.39 |
193.11 |
Interest / finance costs |
135.33 |
54.44 |
Profit before depreciation and taxation |
55.06 |
138.67 |
Depreciation and amortization expenses |
121.54 |
77.82 |
Net Profit before taxation |
(66.48) |
60.85 |
Taxation |
(34.38) |
(1.51) |
Net profit |
(32.10) |
62.36 |
Profit brought forward from last year |
306.15 |
268.45 |
Profit available for appropriations |
274.05 |
330.81 |
Appropriations |
||
Transfer to Debenture Redemption Reserve |
- |
- |
Transfer to general reserve |
- |
- |
Dividend on equity shares |
20.49 |
20.49 |
Corporate dividend tax |
4.17 |
4.17 |
Balance carried to balance sheet |
249.39 |
306.15 |
EPS |
(1.57) |
3.04 |
BUSINESS AND FINANCIAL PERFORMANCE
After a promising start, the financial year 2016-17 proved to be an extremely challenging year for the cement sector with the industry as a whole registering a de-growth after several consecutive years of growth in the last decade. Demonetization had a particularly adverse effect on cement volumes, with the contraction in the months following this event touching double digits. All this occurred even while the overall GDP grew by an estimated 6.8%, thus interrupting the correlation that the cement sector has historically shown with national growth. Low consumption was accompanied by a rise in fuel prices on the back of global trends, further impacting the profitability of industry.
In this backdrop, the key business and financial highlights of your Company for FY17 are as under:
- Successfully ramped up sales and dispatches from the 3 million ton Greenfield cement plant at Chittapur (Gulbarga, Karnataka) following its commissioning in the previous year.
- Total cement sales volume for the year stood at 55.52 lac tons against 44.19 lac tons in FY16, a growth of over 26%
though the industry as a whole de-grew in the year.
- We continued to focus on PPC cement production in line with your Company''s commitment to environmental sustainability; 76% of cement volume was sold as PPC from old operations, while PPC sales from new operations are also scaling up steadily to reach 42% for the year.
- Net sales realization during the year remained uneven and volatile due to poor demand and low capacity utilization in the industry, leading to low prevailing market prices in many of our large markets.
- Variable production costs were slightly higher on account of higher raw material and fuel prices as well as the stabilization challenges at the new plant in Chittapur.
- Despite an extremely challenging environment, capacity utilization at your Company''s older plants was at 76% during FY17 and 69% overall.
- EBITDA for the year was Rs,190.4 crores as against Rs,193.1 crores in FY 16.
- A Net Loss of Rs,32.10 crores was registered for the year versus a Net Profit of Rs,62.4 crores in the previous year, primarily due to higher finance costs and depreciation charges for FY17 as compared with FY16, as a result of the large investments at Chittapur plant.
The plant operations at Chittapur are now largely stabilized, with performance guarantee tests on much of the equipment already carried out successfully. Some optimization work is still in progress by the vendors, notably of the kiln, cement grinding mills and the turbine. We expect to get these optimization jobs completed soon and achieve all the planned efficiencies for the plant. The construction work for the railway siding and the township for the employees is beginning very soon now. We are also in the advanced stages of firming up the size and specifications for the waste heat recovery power plant, after which the order for the same will be finalized.
We have also taken necessary steps and made investments to comply with the latest emission norms notified for SPM and SO,, while we are working with the rest of the industry to find a workable solution for the new NO, norms which are proving to be a challenge for the industry when we use pet-coke as a fuel.
DIVIDEND
Your directors are pleased to recommend a final dividend amounting to Rs,0.50 per equity share of face value of Rs,1 each for the year ended 31st March, 2017, subject to approval of shareholders at the forthcoming Annual General Meeting of the Company. The Register of Members and Share Transfer Books of the Company will remain closed from Monday, 18th day of September, 2017 to Saturday,23":l day of September, 2017, both days inclusive , for determining the entitlement of the shareholders to the final dividend for financial year 2016-17.
CHANGES IN DIRECTORS
Pursuant to section 161 of the Companies Act, 2013, Mr. I.Y.R. Krishna Rao (DIN 00481367) was appointed as an Additional Director w.e.f. 5th May, 2017 to hold office till the date of the ensuing Annual General Meeting. The Company has received requisite notice together with deposit of Rs,1,00,000 (Rupees one lac only), as provided under section 160 of the Companies Act, 2013, from the member, proposing the appointment of Mr. I.Y.R. Krishna Rao (DIN 00481367) as an Independent Director not liable to retire by rotation.
In terms of the provisions of section 152 of the Companies Act, 2013 and in terms of the Articles of Association of the Company, Mr. Chandrakant Birla (DIN 00118473), a Non-Executive Director of the Company, is liable to retire by rotation at the ensuing Annual General Meeting of the Company and being eligible, offers himself for re-appointment. The Board of Directors recommends his re-appointment for the consideration of the members of the Company at the ensuing Annual General Meeting.
Mr. Desh Deepak Khetrapal (DIN 02362633) was re-appointed as Managing Director & CEO of the Company w.e.f 1st April, 2015 for a period of 5 (five) years. However, his remuneration was subject to revision every year. On the recommendation of the Nomination & Remuneration cum Compensation Committee, the Board of Directors in their meeting held on 5th May, 2017, recommended revision in Mr. Khetrapal''s remuneration for shareholders'' approval. The resolution seeking consideration of Mr. Khetrapal''s remuneration has been included in the Notice of the Annual General Meeting. The Board of Directors recommends the resolution for your approval.
During the financial year, there was no change in the constitution of the Board of Directors of the Company.
A brief profile and other details relating to the directors are furnished in the Annual Report.
None of the directors are disqualified under section 164(2) of the Companies Act, 2013.
DECLARATION BY INDEPENDENT DIRECTORS
All Independent Directors of the Company have declared and confirmed that they meet with the criteria of independence as prescribed under section 149(6) of the Companies Act, 2013 and Regulation 16(b) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
KEY MANAGERIAL PERSONNEL
In terms of the provisions of section 203 of the Companies Act, 2013, Mr. Desh Deepak Khetrapal - Managing Director & CEO (DIN 02362633), Mr. Sushil Gupta - Chief Financial Officer (FCA-044924) and Mrs. Deepanjali Gulati
- Company Secretary (FCS-5304) are the Key Managerial Personnel (''KMP'') of the Company.
During the year under review, there was no change in the position of KMPs of the Company.
DETAILS OF ESTABLISHMENT OF VIGIL MECHANISM / WHISTLE BLOWER POLICY
Your Company has formulated a vigil mechanism through a Whistle Blower Policy to deal with instances of illegal practices, unethical behaviour, actual or suspected fraud or violation of the Company''s Code of Conduct or Ethics Policy.
Adequate safeguards are provided against victimization to those who avail of the mechanism. The details of the Whistle Blower Policy are explained in the Corporate Governance Report. The Whistle Blower Policy is available on Company''s website and can be accessed through the web link: http://orientcement.com/investors/.
BOARD OF DIRECTORS, ITS COMMITTEES AND MEETINGS THEREOF
The Company has a professional Board with an optimum combination of Executive, Non-Executive and Independent Directors (including one Woman Director) who bring to the table the right mix of knowledge, skills and expertise. The Board provides strategic guidance and direction to the Company in achieving its business objectives and protecting the interest of the stakeholders. The Board is also supported by four Committees of directors viz. the Audit Committee, the Nomination & Remuneration cum Compensation Committee, the CSR Committee and the Stakeholders'' Relationship Committee.
One meeting of the Board of Directors is held in each quarter. Additional meetings of the Board/Committees are convened as may be necessary for the proper management of the business operations of the Company. A separate meeting of Independent Directors is also held at least once in a calendar year to review the performance of Non-Independent Directors, the Board as a whole and the Chairman.
During the financial year ended 31st March, 2017, the Board of Directors met 5 (five) times viz. on 4th May 2016, 3rd August 2016, 6th October 2016, 9th November 2016 and 4th February 2017. The intervening gap between the meetings was within the period prescribed under the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
A detailed update on the Board & its Committees'' composition, number of meetings held during the financial year 2016-17 and attendance of the directors at these meetings is provided in the Report on Corporate Governance.
AUDIT COMMITTEE
The Company has a duly constituted Audit Committee in line with the provisions of the Companies Act, 2013 and SEBI (Listing Obligationsand Disclosure Requirements) Regulations, 2015. The primary objective of the Committee is to monitor and provide effective supervision of the Management''s financial reporting process, to ensure accurate and timely disclosures, with the highest level of transparency, integrity and quality of financial reporting. The Committee met 4 (four) times during the year, the details of which are given in the Corporate Governance Report. As on 31st March, 2017, the Committee comprised of five independent directors viz. Mr. Vinod Kumar Dhall (DIN 02591373), Mr. Rajeev Jhawar (DIN 00086164), Mr. Rabindranath Jhunjhunwala (DIN 00050729), Mr. Swapan Dasgupta (DIN 07113693) and Mr. Janat Shah (DIN 01625535) as well as Mr. Desh Deepak Khetrapal-Executive Director (DIN 02362633). Detailed information pertaining to the Audit Committee has been provided in the Report on Corporate Governance.
POLICY ON DIRECTORS'' APPOINTMENT & REMUNERATION
The Company endeavors to have an appropriate mix of Executive, Non-Executive and Independent Directors, so as to have independence on the Board and separate its function of governance from that of management. The selections and appointments on the Board of the Company are done on the recommendation of the Nomination & Remuneration cum Compensation Committee. The appointments are based on meritocracy and the candidates are considered against objective criteria, having due regard to the benefits of diversity on the Board. While evaluating the candidature of an Independent Director, the Committee abides by the criteria for determining independence as stipulated under the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. In case of re-appointment of directors, the Board takes into consideration the results of the performance evaluation of the directors.
The copy of the Nomination & Remuneration Policy for Directors, KMPs and Senior Management is attached as Annexure T to this Report.
AWARDS AND RECOGNITIONS
In recognition of its constant quest for growth and achievement, your Company has been honoured and recognized at various forums. The prominent awards are listed below for your reference:
Devapur Plant:
1. National Energy Management Gold Award from SEEM
2. National Award for Excellence in Energy Management 2016 from CM
3. Mines Safety Week 2016 Awards by Director General of Mines Safety
- Overall performance 1st Prize
- Loading and Transportation 1st Prize
- Drilling and Blasting 1st Prize
- Publicity, Propaganda & House Keeping 2nd Prize
- Lighting and Installations 2nd Prize
4. Mines Environment & Mineral Conservation Week Awards by Indian Bureau of Mines
- Reclamation and Rehabilitation 1st Prize
- Waste Dump Management 2nd Prize
- Sustainable Development 3rd Prize
- Overall performance 3rd Prize
Chittapur Plant:
1. Safety Awards from the Mines Safety Association Karnataka (MSAK)
- Safety Management System 1st Prize
- Publicity & Propaganda and Safety is my responsibility Cards 1st Prize
- Mine Workings 2nd Prize
- Maintenance of Mining Machinery 2nd Prize
- Drilling and Blasting 3rd Prize
- State Level Overall Performance in mines 2nd Prize
STATUTORY AUDITORS
At the Annual General Meeting held in the year 2014, M/s S.R. Batliboi & Co. LLP, Chartered Accountants (ICAI Firm Registration Number 301003E/ E300005) was appointed as Statutory Audi tors of the Company by the shareholders to hold office as Statutory Auditors from the conclusion of Annual General Meeting held in the year 2014 till the conclusion of eighth Annual General Meeting of the Company to be held in the year 2019, subject to ratification of their appointment at every Annual General Meeting.
The Company has received a letter from the auditors confirming that they are eligible for appointment as auditors of the Company under section 139 of the Companies Act, 2013 and meet the criteria for appointment specified in section 141 of the Companies Act, 2013.
Based on the recommendation of the Audit Committee and as per the provisions of section 139(1) of the Companies Act, 2013, the Board of Directors of your Company proposes to ratify the appointment of M/s S. R. Batliboi & Co. LLP, Chartered Accountants (ICAI Firm Registration Number 301003E/E300005) as the Statutory Auditors of the Company for the financial year 2017-18.
Auditors'' Report is self-explanatory and therefore, does not require further comments and explanation.
Further, in terms of section 143 of the Companies Act, 2013 read with the Companies (Audit and Auditors) Rules, 2014, as amended, notifications / circulars issued by the Ministry of Corporate Affairs from time to time, no fraud has been reported by the auditors of the Company where they have reason to believe that an offence involving fraud is being or has been committed against the Company by officers or employees of the Company.
COST AUDITORS
In terms of section 148 of the Companies Act, 2013 read with Companies (Cost Records and Audit) Rules, 2014, the Company is required to maintain Cost Accounting records and get them audited every year. The Board appointed Mr. Somnath Mukherjee, Cost Accountant (M.No.-F5343), as Cost Auditors of the Company for the financial year 2017-18 at a fee of Rs,80,000/- (Rupees eighty thousand only) plus out of pocket expenses subject to the ratification of the said fees by the shareholders at the ensuing Annual General Meeting.
The Company has received a letter from him to the effect that his re-appointment would be within the limits prescribed under section 141(3)(g) of the Companies Act, 2013 and that he is not disqualified for such re-appointment within the meaning of section 141 of the Companies Act, 2013.
SECRETARIAL AUDITORS
Pursuant to the provisions of section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, M/s Ranjeet Pandey and Associates, Company Secretaries (Registration No. F-5922), were appointed to conduct the Secretarial Audit of the Company for the financial year 2016-17.
The Secretarial Audit Report is annexed to this report as Annexure T. The Secretarial Auditors'' report is self-explanatory and therefore, does not require further comments and explanation.
The Board has appointed M/s Ranjeet Pandey and Associates, Company Secretaries, (Registration No. F-5922) as Secretarial Auditor of the Company for the financial year 2017-18.
PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS
During the financial year under review, your Company has not given any loan or guarantee, made investments and provided securities which are covered under the provisions of section 186 of the Companies Act, 2013.
RELATED PARTY TRANSACTIONS
The Company has adequate procedures for identification and monitoring of related party transactions. All transactions entered into with related parties during the financial year were on an arm''s length basis. All related party transactions were placed before the Audit Committee and also the Board for approval, wherever required. Prior omnibus approval of the Audit Committee and Board was obtained for the transactions that were of a foreseen and repetitive nature. These transactions were reviewed by the Audit Committee on a quarterly basis.
There were no materially significant related party transactions made by the Company with promoters, directors, key managerial personnel or other designated persons which may have a potential conflict with the interest of the Company at large.
For details on related party transactions, members may refer to the notes to the financial statement. The Policy on related party transactions as approved by the Board is available on the Company''s website and can be accessed through the web link: http://orientcement.com/investors/.
Particulars of contract or arrangements with related parties referred to in section 188(1) of the Companies Act, 2013, in the prescribed Form AOC-2, is annexed as Annexure ''2'' to the Report.
CHANGE IN THE NATURE OF BUSINESS
There is no change in the nature of business of the Company during the year under review.
RISK MANAGEMENT
The Company has constituted a Risk Management Committee to review the risk management plan / process of the Company. The Risk Management Committee identifies potential risks, assesses their potential impact and takes timely action to mitigate the same.
The Company has a Risk Management Policy which has been approved by the Board. The Risk Management Policy acts as an overarching statement of intent and establishes the guiding principles by which key risks are managed across the organization. The Board monitors and reviews periodically the implementation of various aspects of the Risk Management Policy through a duly constituted Risk Management Committee (RMC). The RMC assists the Board in its oversight of the Company''s management of key risks, including strategic and operational risks, as well as the guidelines, policies and processes for monitoring and mitigating such risks under the aegis of the overall Business Risk Management Framework.
There are no risks identified by the Board which may threaten the existence of the Company.
INTERNAL FINANCIAL CONTROLS AND ITS ADEQUACY
As per the provisions of section 134(5)(e) of the Companies Act, 2013, the directors have an overall responsibility for ensuring that the Company has implemented robust systems/ framework of internal financial controls to provide them with reasonable assurance regarding the adequacy and operating effectiveness of controls with regard to reporting, operational and compliance risks. To enable the directors to meet these responsibilities, the management has devised systems/ frameworks which are operating within the Company. In line with best practice, the Audit Committee and Board regularly review the internal control system to ensure that it remains effective and fit for the purpose. Where weaknesses are identified as a result of the reviews, new procedures are put in place to strengthen controls and these are in turn reviewed at regular intervals. The systems/ frameworks include proper delegation of authority, policies and procedures, effective IT systems aligned to business requirements, internal audit framework, ethics framework, risk management framework and adequate segregation of duties.
Your Company''s management has established and maintained internal financial controls based on the internal control over financial reporting criteria established in the integrated framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 Framework) (the COSO criteria), which considers the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India. Based on information provided, nothing has come to the attention of directors to indicate that any material breakdown in the function of these controls, procedures or systems occurred during the year under review.
The Internal Auditor of the Company reports functionally to Audit Committee of Board, which reviews and approves risk based annual internal audit plan. Audit Committee periodically reviews the performance of internal audit function.
CORPORATE SOCIAL RESPONSIBILITY
The basic concept of Company''s CSR is to serve the interest of society in a just and equitable manner along with taking the responsibility for the impact of business activities on various stakeholders in all aspects of Company''s operations. Your Company has been taking several initiatives under Corporate Social Responsibility (''CSR'') for society at large, well before it has been prescribed through the Companies Act, 2013.
The Company has constituted a CSR Committee and has a well-defined Policy on CSR as per the requirement of section 135 of the Companies Act, 2013 which covers the activities as prescribed under Schedule VII of the Companies Act, 2013.
Detailed information pertaining to the CSR Committee has been provided in the Report on Corporate Governance.
The CSR Policy laid down by the Company ensures that:
1. The CSR agenda is integrated with the business;
2. Focused efforts are made in the identified community development areas to achieve the expected outcome;
3. The Company contributes towards nation-building through its CSR activities.
As part of its initiatives under CSR, the Company has contributed for healthcare, infrastructure development and education for the year under review.
Corporate Social Responsibility Report, pursuant to section 134(3)(o) of the Companies Act, 2013 and Rule 9 of the Companies (Corporate Social Responsibility) Rules, 2014, forms part of this Report as Annexure ''3''
The CSR Policy of the Company is enclosed as Annexure -''II'' to this Report and is also placed on the website of the Company. This can be accessed through the web link: http://orientcement.com/investors/.
PARTICULARS OF EMPLOYEES, DIRECTORS b KEY MANAGERIAL PERSONNEL
The information required pursuant to section 197 of the Companies Act, 2013, read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is attached as Annexure ''4'' forming an integral part of this Report.
SHARE CAPITAL
During the year under review, the Issued, Subscribed and Paid up Share Capital of the Company was 20,48,68,760 shares of Rs,1 each. There was no change in the capital structure of the Company.
EXTRACT OF THE ANNUAL RETURN
Pursuant to section 134(3)(a) and section 92(3) of the Companies Act, 2013 read with Rule 12 of the Companies (Management and Administration) Rules, 2014, relevant extract of annual return for the financial year 2016-17 is given as Annexure ''5'' to this Report.
EMPLOYEES STOCK OPTION SCHEME
The Company has in place the Employees Stock Option Scheme 2015 (''ESOS-2015'') which provides for grant of Stock Options to eligible employees of the Company.
During the financial year 2016-17, no options were granted under ESOS-2015. The applicable disclosures under SEBI (Share Based Employee Benefits) Regulations, 2014 ("SEBI Regulations") as at 31st March, 2017 has been uploaded on the website of the Company and can be accessed through the web link http://orientcement.com/investors/. There is no change in the ESOS scheme of the Company during the financial year.
Certificate from M/s S.R. Batliboi & Co. LLP, Chartered Accountants (ICAI Firm Registration Number 301003E/ E300005), Statutory Auditors of the Company confirming that the scheme has been implemented in accordance with the SEBI Regulations, would be placed at the ensuing Annual General Meeting of the Company for inspection by the members.
DISCLOSURE UNDERTHESEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013
The Company has zero tolerance towards sexual harassment at the workplace and has adopted a policy on prevention, prohibition and redressal of sexual harassment at workplace in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules there under. The Company has constituted Internal Complaints Committee which is responsible for redressal of complaints related to sexual harassment.
As per the provisions of section 21 and 22 of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, the report on the details of the number of cases filed under sexual harassment and their disposal, during the calendar year 2016 is as under:
Number of cases pending as on the beginning |
Nil |
of the financial year |
|
Number of complaints filed during the |
Nil |
financial year |
|
Number of cases pending as on the end of the |
Nil |
financial year |
MANAGEMENT DISCUSSION & ANALYSIS REPORT
As required by Regulation 34(2) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a detailed Management Discussion and Analysis Report is presented in a separate section forming part of the Annual Report.
CORPORATE GOVERNANCE
Corporate Governance ensures fairness, transparency and integrity of the management. As a part of its strategy, the Company believes in adopting the ''best practices'' that are followed in the area of Corporate Governance. The Company emphasizes the need for full transparency and accountability in all its transactions, in order to protect the interests of its stakeholders. The Board considers itself a Trustee of the Company''s shareholders and acknowledges its responsibilities towards them for creating and safeguarding their wealth. The Company is committed to high levels of ethics and integrity in all its business dealings that avoids conflicts of interest. In order to conduct business with these principles, the Company has created a corporate structure based on business needs and maintains a high degree of transparency through regular disclosures with a focus on adequate control systems.
A detailed report on corporate governance forms an integral part of Annual Report and is set out as separate section therein.
The certificate of M/s S.R. Batliboi & Co. LLP (ICAI Firm Registration Number 301003E/ E300005), Chartered Accountants, the Statutory Auditors of the Company certifying compliance with the conditions of Corporate Governance as stipulated in the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is annexed with the Report on Corporate Governance as Annexure ''6''. The Auditors'' certificate for financial year 2016-17 does not contain any qualification, reservation or adverse remark.
PERFORMANCE EVALUATION OF BOARD, COMMITTEES & INDIVIDUAL DIRECTORS
A formal evaluation of the performance of the Board, its Committees, the Chairman and the individual directors was carried out for the financial year 2016-17. The performance evaluation was done using individual questionnaires, covering amongst others, composition of Board, receipt of regular inputs and information, functioning, performance & structure of Board Committees, skill set, knowledge & expertise of directors, preparation & contribution at Board Meetings, leadership etc. The performance evaluation of the respective Committees and that of Independent and Non-Independent Directors was done by the Board excluding the director being evaluated.
The performance evaluation of Non-Independent Directors, the Chairman and the Board was done by the Independent Directors.
LISTING WITH STOCK EXCHANGES
The equity shares of the Company are listed on National Stock Exchange of India Limited and BSE Limited. The annual listing fees for the financial year 2017-18 have been paid to these exchanges.
DIRECTORS'' RESPONSIBILITY STATEMENT
Pursuant to section 134(3)(c) of the Companies Act, 2013, the Board of Directors hereby state that:
1. In the preparation of the annual accounts for the financial year ended 31st March, 2017, the applicable accounting standards have been followed along with proper explanation relating to material departures;
2. They have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as on 31!tMarch, 2017 and of the profit and loss of the Company for the year ended on that date;
3. They 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;
4. They have prepared the annual financial statements on a going concern basis;
5. They have laid down internal financial controls to be followed by the Company and that such internal financial controls were adequate and were operating effectively.
6. They have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
MATERIAL CHANGES AND COMMITMENTS
No material changes and commitments affecting the financial position of the Company have occurred between the end of the financial year of the Company to which the financial statements relate and on the date of this Report.
CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION
The Company values the significance of conservation of energy and technology absorption and remains conscious about the environment impact of its business operations. During the financial year, the Company undertook a variety of energy conservation measures across all its plants, making continuous efforts for judicious use of energy at all levels of operations by utilizing energy efficient system and processes. Some steps taken towards energy conservation are the result of technology absorption. Our new integrated cement manufacturing unit at Chittapur has been installed with new state of the art technology and latest energy efficient equipment.
The particulars required under section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 regarding conservation of energy, technology absorption are enclosed as Annexure ''7'' forming part of this Report.
FOREIGN EXCHANGE EARNINGS AND OUTGO
During the financial year, the Company has not earned any foreign exchange.
The total foreign exchange outgo during the year was U,773.48 lacs.
SUBSIDIARIES, ASSOCIATES AND JOINT VENTURE COMPANIES
During the financial year 2016-17, the Company had no Subsidiary, Associate or Joint Venture company
DEPOSITS
During the financial year under review, the Company did not accept deposits covered under Chapter V of the Companies Act, 2013.
SIGNIFICANT AND MATERIAL ORDERS
No significant and material orders have been passed by any regulators or courts or tribunals against the Company impacting the going concern status and Company''s operations in future.
BUSINESS RESPONSIBILITY REPORT
The SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 mandates inclusion of Business Responsibility Report as part of Annual Report for top 500 listed entities based on market capitalization. The Company falls under the top 500 listed companies by market capitalization. Accordingly, in compliance with the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 the Business Responsibility Report is presented in a separate section forming part of the Annual report.
DIVIDEND DISTRIBUTION POLICY
Regulation 43A of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, requires top 500 listed Companies based on the market capitalization to formulate Dividend Distribution Policy. In compliance of the said requirement, the Company has formulated the Dividend Distribution Policy. The Dividend Distribution Policy of the Company is enclosed as Annexure -''III'' to this Report and is also placed on the website of the Company. This can be accessed through the web link: http://orientcement.com/ investors/.
COMPLIANCE WITH SECRETARIAL STANDARDS ON BOARD AND GENERAL MEETINGS
The Company has complied with Secretarial Standards issued by the Institute of Company Secretaries of India on Board Meetings and General Meetings.
OTHER STATUTORY DISCLOSURES
Your directors state that no disclosure or reporting is required with respect to the following items as there were no transactions related to these items during the year under review:
1. Issue of equity shares with differential rights as to dividend, voting or otherwise
2. Issue of sweat equity shares
3. Provision of money for purchase of its own shares by employees or by trustees for the benefit of employees
ACKNOWLEDGEMENT
Your Directors place on record their appreciation for assistance and co-operation received from various Ministries and Departments of Government of India and other State Governments, banks, shareholders of the Company, etc. Your Directors wish to place on record their sincere appreciation for the dedicated efforts and consistent contribution made by the employees at all levels, to ensure that the Company continues to grow and excel.
By order of the Board of Directors
For Orient Cement Limited
CK. Birla
Place: New Delhi Chairman
Date: 5th May, 2017 (DIN 00118473)
Mar 31, 2015
Dear Members,
The Directors are pleased to present their report and statement of
accounts for the financial year ended March 31,2015.
FINANCIAL RESULTS
The Board of Directors hereby presents the Annual Report on the
business and operations of your Company along with the summary of
financial statements for the year ended March 31,2015.
Financial Results
(Rs. in Crores)
Particulars 2014-15 2013-14
Gross Sales 1,768.83 1,646.72
Total Income (Net of Excise) 1,552.95 1,447.73
Earnings before Interest, Depreciation,
Amortisation & Taxation 312.64 224.01
Interest / Finance costs 14.13 14.39
Profit before Depreciation and Taxation 298.51 209.62
Depreciation and Amortisation expenses 47.33 56.38
Net Profit before Taxation 251.18 153.24
Taxation 56.40 52.22
Net profit 194.78 101.02
Profit brought forward from last year 92.72 52.66
Profit available for Appropriations 287.50 153.68
Appropriations
Transfer to Debenture Redemption Reserve - -
Transfer to General Reserve - 25.00
Dividend on Equity Shares 35.85 30.73
Corporate Dividend Tax 7.17 5.23
Balance carried to Balance Sheet 244.48 92.72
EPS 9.51 4.93
STATE OF COMPANY''S AFFAIR
Your Directors are pleased to inform you that during the year, in spite
of the slower than expected growth rate of the GDP, delayed take-off of
investments and construction projects and disappointing cement demand,
your Company has performed creditably with cement sales volumes of 41
lac tons, registering a good performance with capacity utilisation of
82%, which is significantly better than the industry average of ~70%.
Against the general trend of incrementally higher demand for OPC
cement, your Company was successful in increasing the PPC sales from
75% to 80%. There was positive growth in sales volumes in the first
three quarters of the financial year, but in the 4th quarter, poor
demand hurt our volumes. The low volumes in 4th quarter pulled down our
annual volume growth into the negative territory.
Though the cement prices remained volatile throughout the year, the
overall net realisation for the Company registered an improvement over
the previous year. This improved realisation, better product mix and
various cost optimisation initiatives have resulted in the Company
achieving a significantly improved performance over the previous year
with revenue at Rs. 1,535 crores (previous year Rs. 1,430 crores), an
increase of 7% over the previous year and EBITDA at Rs. 313 crores
(previous year Rs. 224 crores) a 40% increase over last year. The
profit before tax (PBT) of the Company for financial year 2015 is at
Rs. 251 crores against the financial year 2014 PBT of Rs. 153 crores.
The EPS in financial year 2015 comes to Rs. 9.51, an improvement of 93%
over the previous year.
The expansion plan of your Company, through addition of a 3 million
tons per annum greenfield, integrated plant near Chittapur, Gulbarga
District in Karnataka has made significant progress during the year
with the cement plant and the captive power plant getting very close
to commissioning. The railway siding and employees''colony will be
delayed due to late receipt of Karnataka Government''s approval for land
for the purpose. However, alternate arrangements have been made to
mitigate the effect of these delays. The waste heat recovery system
will also be installed only once the kiln has stabilised and the waste
heat becomes consistent in availability. The Company is complying with
additional conditions imposed by MoEF in the Environmental Clearance,
which is adding some new costs to the project. All efforts are now in
hand to commission the Plant within a few weeks of the Mining Lease
being granted to the Company, which we are hopeful of getting shortly.
DIVIDEND
For the financial year 2014-15, the Board of Directors have recommended
a final dividend of Rs. 1 per Equity Share (face value of Rs. 1 each),
amounting to a total payout of Rs. 2,048.69 lacs. This is in addition
to the Interim Dividend for the year, Rs. 0.75 per Equity Share paid in
January 2015 (amounting to Rs. 1,536.53 lacs). The total dividend per
share for financial year 2014-2015 aggregates to Rs. 1.75 per equity
share and the total dividend payout for financial year 2014-2015 is Rs.
3,585.22 lacs.
The Register of Members and Share Transfer Books will remain closed
from Tuesday, July 21, 2015 to Saturday, July 25, 2015 (both days
inclusive) for purposes of payment of the final dividend for the
financial year ended March 31,2015 and the Annual General Meeting
(AGM).
CORPORATE GOVERNANCE
Your Company always places major thrust on managing its affairs with
diligence, transparency, responsibility and accountability, thereby
upholding the important dictum that an organisation''s corporate
governance philosophy is directly linked to high performance.
The Company understands and respects its fiduciary role and
responsibility towards its stakeholders and society at large, and
strives to serve their interests, resulting in creation of value and
wealth for all stakeholders.
The compliance report on corporate governance from M/s S.R.Batliboi &
Co. LLP, Chartered Accountants (ICAI Firm Registration No. 301003E),
Statutory Auditors of the Company, regarding compliance of the
conditions of corporate governance, as stipulated under clause 49 of
the Listing Agreement with the stock exchanges, is attached herewith as
Annexure A to this report.
CHANGES IN DIRECTORS
On March 27, 2015, the Board of Directors had, on the recommendation of
the Nomination & Remuneration Committee, re-appointed Mr. Desh Deepak
Khetrapal (DIN 02362633) as Managing Director & Chief Executive Officer
of the Company for a period of three years starting from April 1, 2015.
Thereafter, on May 8, 2015, the Board of Directors had, again on the
recommendation of the Nomination & Remuneration Committee, amended the
period of his contract from 3 years to 5 years with effect from April
1, 2015. The Board recommends your approval for Mr. Khetrapal''s
re-appointment for 5 years effective from April 1,2015.
Pursuant to Section 161 of the Companies Act, 2013 read with Articles
of Association of the Company, Ms. Amita Birla (DIN 00837718) was
appointed as an Additional Director by the Board in the category of
Non-Executive Director w.e.f. March 27, 2015. Ms. Amita Birla will
hold office up to the date of ensuing Annual General Meeting of the
Company and is eligible for appointment as Director.
Pursuant to the provisions of Section 152 of the Companies Act, 2013
and in accordance with provisions of Articles of Association of the
Company, Mr. CK Birla (DIN 00118473), Director of the Company, is
liable to retire by rotation and being eligible, offers himself for
re-appointment.
The brief resume and other details relating to the Directors, who are
to be appointed/ re-appointed as stipulated under Clause 49 of the
Listing Agreement, are furnished in the Annual Report.
Further, all Independent Directors have given declarations that they
meet the criteria of independence as laid down under Section 149(6) of
the Companies Act, 2013 and Clause 49 of the Listing Agreement.
None of the Directors are disqualified under Section 164(2) of the
Companies Act, 2013.
KEY MANAGERIAL PERSONNEL
Mr. Sushil Gupta was appointed as Chief Financial Officer of the
Company w.e.f. August 7, 2014.
The following employees were designated as whole-time Key Managerial
Personnel by the Board of Directors during the year under review:
* Mr. Desh Deepak Khetrapal
* Mr. Sushil Gupta
* Ms. Deepanjali Gulati
STATUTORY AUDITORS
At the Annual General Meeting held in the year 2014, M/s S.R.Batliboi &
Co. LLP, Chartered Accountants, (ICAI Firm Registration No. 301003E)
Statutory Auditors of the Company were re-appointed by the shareholders
to hold office as Statutory Auditors from the conclusion of Annual
General Meeting held in the year 2014 till the conclusion of Eighth
Annual General Meeting of the Company to be held in the year 2019,
subject to ratification of their appointment at every Annual General
Meeting.
Under Section 139 of the Companies Act, 2013, the Company is required
to place the matter relating to Statutory Auditor''s appointment for
ratification by members at every Annual General Meeting.
The Company has received a letter from the Statutory Auditors
confirming that they are eligible for appointment as Auditors of the
Company under Section 139 of the Companies Act, 2013 and meet the
criteria for appointment specified in Section 141 of the Companies Act,
2013.
Based on the recommendations by the Audit Committee, the Board of
Directors of the Company recommend the ratification of appointment of
M/s S.R.Batliboi & Co. LLP, Chartered Accountants, (ICAI Firm
Registration Number 301003E) as Statutory Auditors of the Company by
the shareholders at the ensuing Annual General Meeting.
The observations of the Auditors in their report, read together with
the notes on Accounts, are self-explanatory and therefore, in the
opinion of the Directors, do not call for any further explanation.
COST AUDIT
Pursuant to Section 148 of the Companies Act, 2013, read with The
Companies (Cost Records and Audit) Amendment Rules, 2014, the cost
audit records maintained by the Company in respect of its ''Cement''
activity is required to be audited. Your Directors had, on the
recommendation of the Audit Committee, appointed Mr. Somnath Mukherjee,
Cost Accountant, (M. No. F5343) as Cost Auditor for auditing the cost
accounts of the Company for the financial year 2015-16 on a
remuneration of Rs. 60,000/-. As required under the Companies Act,
2013, the remuneration payable to the Cost Auditor is required to be
placed before the Members in the general meeting for ratification.
Accordingly, a Resolution seeking Member''s ratification for the
remuneration payable to Mr. Somnath Mukherjee, Cost Auditors (M.No.
5343) is included in the notice convening the Annual General Meeting.
The Company has received a letter from him to the effect that his
re-appointment would be within the limits prescribed under Section
141(3)(g) of the Companies Act, 2013 and that he is not disqualified
for such re-appointment within the meaning of Section 141 of the
Companies Act, 2013.
SECRETARIAL AUDIT
The Board of Directors of the Company have appointed M/s. Ranjeet
Pandey and Associates, Company Secretaries, (Registration No. F-5922)
as the Secretarial Auditor of the Company in relation to the financial
year 2014-2015, in terms of Section 204 of the Companies Act, 2013 and
The Companies (Appointment and Remuneration of Managerial Personnel)
Rules, 2014.
The Report of the Secretarial Audit is attached as Annexure B and forms
an integral part of this Report.
The comments mentioned in Secretarial Audit Report are self
explanatory.
CORPORATE SOCIAL RESPONSIBILITY INITIATIVES
The Company has constituted a Corporate Social Responsibility (CSR)
Committee and has framed a Corporate Social Responsibility Policy. The
Company has undertaken activities as per the CSR Policy (available on
Company''s website: www.orientcement.com) and the details are contained
in the Annual Report on CSR activities given in Annexure C forming a
part of this Report. The Company will continue to support social
projects that are consistent with the policy.
The main core areas for Orient Cement Limited''s CSR programs are
education and healthcare support. The Company continues to support
social causes and has, like in the previous years, made contributions
for promotion of education and promoting social good by providing
primary healthcare support, during the year. At Orient Cement Limited,
we take our social responsibilities as seriously as we do our core
business. We seek to maximise the social, environmental and economic
impact of our activities.
Our most important responsibility is to fulfil the expectations of our
stakeholders and to continuously improve our social, environmental and
economical performance while ensuring the sustainability and
operational success of our Company.
SHARE CAPITAL
The paid up Equity Share Capital as on March 31, 2015 was
Rs.20,48,68,760. During the year under review, the Company has not
issued shares with differential voting rights nor granted stock options
or sweat equity.
EXTRACT OF THE ANNUAL RETURN
The details forming part of the extract of the Annual Return in Form
MGT 9 are attached as Annexure D herewith and form an integral part of
this Report.
SUBSIDIARY AND ASSOCIATE COMPANIES
The Company does not have any Subsidiary / Associate.
PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS
Details of Loans, Guarantees and Investments covered under the
provisions of Section 186 of the Companies Act, 2013 are given in the
notes to the Financial Statements.
RELATED PARTY TRANSACTIONS
All related party transactions that were entered into during the
financial year were on an arm''s length basis and were in the ordinary
course of business. There were no materially significant related party
transactions made by the Company which may have a potential conflict
with the interest of the Company at large. All related party
transactions were placed before the Audit Committee and also for the
Board approval, wherever required. Prior omnibus approval of the Audit
Committee is generally obtained for the transactions which are of a
foreseen and repetitive nature and these transactions are reviewed by
the Audit Committee on quarterly basis. The policy on related party
transactions as approved by the Board is uploaded on the Company''s
website: www.orientcement.com.The details of transactions entered into
with related parties are attached as Annexure E in form AOC-2 that form
an integral part of this Report.
DEPOSITS
We have not accepted any fixed deposits and, as such, no amount of
principal or interest was outstanding as on the Balance Sheet date.
PARTICULARS OF EMPLOYEES
The information required pursuant to Section 197 read with Rule 5 of
The Companies (Appointment and Remuneration of Managerial Personnel)
Rules, 2014 is attached as Annexure F and form an integral part of this
Report.
DETAILS OF ESTABLISHMENT OF VIGIL MECHANISM / WHISTLE BLOWER POLICY
The Company has formulated a Whistle Blower Policy to establish a vigil
mechanism for Directors, Employees and other Stakeholders of the
Company to report concerns about illegal or unethical practices,
unethical behaviour, actual or suspected fraud or violation of the
Company''s Code of Conduct or Ethics Policy. The Whistle Blower Policy
is available on the website of the Company: www.orientcement.com.
REMUNERATION POLICY
The Board has, on the recommendation of the Nomination & Remuneration
Committee, framed a policy for selection and appointment of Directors,
Key Managerial Personnel, Senior Management and their remuneration. The
Remuneration Policy is stated in the Corporate Governance Report.
SEXUAL HARASSMENT POLICY
The Company has a Policy on Prohibition, Prevention and Redressal of
Sexual Harassment of Women at Workplace and matters connected therewith
or incidental thereto covering all the aspects as contained under the
"The Sexual Harassment of Women at Workplace (Prohibition, Prevention
and Redressal) Act, 2013".
Up till date, the Company has not received any complaint under the
Policy.
RISK MANAGEMENT
Pursuant to the requirement of Clause 49 of the Listing Agreement, the
Company has developed and implemented the Risk Management Policy. The
details of policy are set out in the Corporate Governance Report
forming part of the Directors''Report.
BOARD EVALUATION
Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of
the Listing Agreement, the Board has carried out an annual performance
evaluation of its own performance and the performance of the individual
Directors as well as the evaluation of the working of its Committees.
The manner in which the evaluation was carried out has been explained
in the Corporate Governance Report.
AWARDS AND RECOGNITIONS
During the year under review, your Company has received many awards for
achievements in different areas such as:
Devapur Factory :
* Greentech Safety Award - 2014 Silver Category in Cement Sector
* Mines Safety Awards - 2014;
* Mine Lighting & Electrical installations - 1st Prize
* Afforestation in Mines - 1st Prize
* Publicity & Propaganda - 1st Prize
* Drilling & Blasting - 2nd Prize
* Over all Performance - 3rd Prize
* Reclamation & Rehabilitation - 2nd Prize
* Corporate Social Responsibility - 3rd Prize
* Over all performance - 3rd Prize
* Overall performance 3rd prize in Mines Environment & Mineral
Conservation Week - 2014
* Greentech Environment Award - 2014 in GOLD category
* Top Assessee of Central Excise Duty Payer
Jalgaon Factory:
* Highest tax paid award in Jalgaon Chittapur, Project
* Best Safe Poject Site Award from Directorate of Factories & Boilors,
Gulbarga Region.
NUMBER OF MEETINGS HELD
The details of Board Meetings and Committee of Board Meetings are given
in the Corporate Governance Report.
LISTING WITH STOCK EXCHANGES
The Equity Shares of the Company are listed on National Stock Exchange
of India Limited and BSE Limited. The annual listing fees for the
financial year 2015-16 have been paid to these exchanges.
DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR
COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY''S
OPERATIONS IN FUTURE
There is no significant and material order passed by the Regulators or
Courts or Tribunals impacting the going concern status and Company''s
operations.
CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION
Particulars with respect to conservation of energy and technology
absorption, pursuant to Section 134(3)(m) of the Companies Act, 2013,
read with the Companies (Accounts) Rules, 2014, for the year ended
March 31,2015 are attached as Annexure G and form an integral part of
this Report.
FOREIGN EXCHANGE EARNINGS AND OUTGO
The Foreign Exchange earned during the year is Nil and the Foreign
Exchange outgo during the year is Rs. 10,342.19 lacs.
GREEN INITIATIVES
With the aim of going green and minimising our impact on the
environment, we are sending electronic copies of the Annual Report 2015
and Notice of the 4th AGM to all members whose email addresses are
registered with the Company / Depository Participant(s). For members
who have not registered their email addresses, physical copies of the
Annual Report 2015 and Notice of the 4th AGM are being sent in the
permitted mode. Members requiring physical copies can send a request
to the Company Secretary.
The Company is providing e-voting facility to all members to enable
them to cast their votes electronically on all the resolutions set
forth in the notice. This is pursuant to section 108 of the Companies
Act, 2013 and Rule 20 of the Companies (Management and Administration)
Rules, 2014. The instructions for e-voting are provided in the Notice.
DIRECTORS'' RESPONSIBILITY STATEMENT
To the best of our knowledge and belief and according to the
information and explanations obtained by us, your Directors make the
following statements in terms of Section 134(3)(c) of the Companies
Act, 2013:
a. that in the preparation of the annual accounts for the financial
year ended March 31, 2015, the applicable accounting standards have
been followed along with proper explanation relating to material
departures, if any;
b. that such accounting policies have been selected and applied
consistently and judgments and estimates have been made that are
reasonable and prudent so as to give a true and fair view of the state
of affairs of the Company at the end of the financial year ended March
31, 2015 and of the profit and loss of the Company for that period;
c. that proper and sufficient care has been taken 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. that the annual financial statements have been prepared on a going
concern basis;
e. that proper internal financial controls were in place and that the
financial controls were adequate and were operating effectively.
h. that systems to ensure compliance with the provisions of all
applicable laws were in place and were adequate and operating
effectively.
APPRECIATIONS AND ACKNOWLEDGEMENT
Your Company has been able to operate efficiently because of the
culture of professionalism, creativity, integrity and continuous
improvement in all functions and areas as well as the efficient
utilisation of the Company''s resources for sustainable and profitable
growth.
The Directors wish to place on record their appreciation of the
efficient and loyal services rendered by each and every employee,
without whose whole-hearted efforts, the overall satisfactory
performance would not have been possible.
We thank our customers, vendors, investors and bankers for their
continued support during the year. We also thank the various Central
and State Government Departments, Organisations and Agencies for their
continued help and all the co-operation extended by them.
Your Directors look forward to a long term future with confidence.
By order of the Board of Directors
For Orient Cement Limited
CK Birla
Place: New Delhi Chairman
Date: May 8, 2015 (DIN 00118473)
Mar 31, 2013
The are pleased to present the annual report along with audited accounts
of your Company for the year ended 31st March 2013.
Financial results
The financial performance of the Company for the year ended 31st March
2013 is summarised below:
(Rs.in crores)
2012-13 2011-12
Gross sales 1716.70
Total income (net of excise) 1506.28
Earnings before interest,
depreciation, amortisation &
taxation 323.40 (1.59)
Interest/Finance costs 18.71
Profit before depreciation
and taxation 304.69 (1.59)
Depreciation 56.05
Net profit before taxation 248.64 (1.59)
Taxation 86.97 (0.52)
Net profit 161.67 (1.07)
Profit brought forward
from last year (1.07)
Profit available for appropriations 160.60 (1.07)
Appropriations
Transfer to Debenture
Redemption Reserve 25.00
Transfer to General Reserve 35.00
Dividend on equity shares 40.97
Corporate dividend tax 6.97
Balance carried to Balance Sheet 52.66
Total 160.60 (1.07)
EPS 7.89 (21.47)
The results for the year under review are not comparable with that of
the previous year on account of implementation of the Scheme of
Arrangement detailed herein below.
Scheme of Arrangement
The Scheme of Arrangement between Orient Cement Limited and Orient
Paper & Industries Ltd., was approved by the Orissa High Court vide its
orders dated 27th July, 2012 and 23rd February, 2013. In accordance
with the said Scheme of Arrangement, the Cement undertaking of Orient
Paper & Industries Ltd., stood transferred and vested in the Company
with effect from the appointed
date i.e. 1st April, 2012. The results for the year ended March 31,
2013 are, therefore, not strictly comparable with that of the
immediately preceding year.
Share Capital & Listing of Shares
In terms of the aforesaid Scheme of Arrangement, the Company issued and
allotted 20,48,68,760 equity shares of Re. 1/- each in the capital of
the Company to those
shareholders of Orient Paper & Industries Ltd., holding shares on the
record date i.e. 9th March, 2013.
Consequent upon the issue of shares, the Company ceases to be a wholly
owned subsidiary of Orient Paper & Industries Ltd.
The Company has made listing applications to the BSE Ltd. and National
Stock Exchange of India Ltd. for listing of 20,48,68,760 equity shares
of Re. 1/- each. Pending receipt of the listing and trading approval
from the Stock Exchanges, the equity shares are suspended for trading.
Dividend
Subject to the shareholders'' and other requisite approvals, your
Directors recommend payment of dividend of Rs. 2 per equity share of Re.
1 each (200%) for the year ended 31 March 2013. The cash outflow on
account of dividend on equity capital and dividend tax works out to Rs.
4794 lacs, which constitutes 29.65% of our net profit for the year.
Economic climate and our performance
The economic climate in the country has continued to remain challenging
and almost all sectors have encountered a slow-down in demand and
increase in administered prices. The economy''s growth rate this year is
the lowest for a long time. In the infra-structure and project related
areas, the delays in getting regulatory approvals, the difficulties in
land acquisition and depressed demand conditions have combined to slow
down actual investments and growth.
The national demand for cement has remained subdued with growth
estimated at just about 5.5%, with sharp differences in different parts
of the country. This slower than expected demand has led to an
over-supply and lower capacity utilisation which have impacted the
price
realisation for all the manufacturers. While prices have remained low
compared to the previous year, coal, power and diesel costs have been
rising sharply due to the crises in the coal and power sector and due
to Government''s decision to do away with diesel subsidies in a phased
manner. The lower realisations and the impact of higher costs has had
an impact on this year''s profitability of all cement manufacturers.
Within this over-all scenario of the cement industry, the performance
of your company can be considered more than satisfactory. While the
growth in sales is certainly healthy, given the fact that we
essentially operate in Andhra Pradesh and parts of Maharashtra, our
realisations too have suffered in line with the market forces. The
demand in our markets has been impacted by many factors including the
shortage of sand due to suspension of sand mining under judicial orders
in both the states in which we operate, and due to severe water
shortage and drought conditions affecting large parts of Maharashtra.
Despite challenging markets, your company managed to achieve capacity
utilisation of over 80% against the industry average of under 70% in
our cluster. Further, with our intense focus on our operations and
customer- service, we have managed to make progress in gaining market
share in our core markets and also in gaining higher efficiencies at
our plants including in power and coal consumption. We could not, for
obvious reasons, remain immune to the increased procurement prices of
coal, power and diesel. As a result, despite growth in market share and
better capacity utilisation compared to peers, the PBIT of your company
remained depressed, especially in the latter part of the year.
The Captive Power Plant at Devapur stabilised in the second half of
2012-13 and during some months, when the demand from the operations was
lower, we successfully managed to sell excess power to the power
exchange.
Our Jalgaon cement grinding unit successfully challenged the TPM audit
and earned the distinction of being TPM certified.
While the slow demand and market conditions are still continuing, we
have focused our efforts on building further on our strong market
position in our core markets, expanded our reach by enlarging our
distribution network and improving the quality and availability of
cement. On the operations side, the plants have been maintained in very
good condition with focus on improving efficiencies, house-keeping and
safety & environment protection activities.
We are keeping up our efforts towards improving our market position in
these times and on being prepared to fully take advantage of the
turnaround in the market as and when it comes about.
Meantime, the new green-field 3 million tons per annum integrated
cement plant proposed at Chittapur in Gulbarga district in Karnataka
has received the environmental clearance (industry) from Ministry of
Environment and Forests, Government of India, while the same clearance
for mines is still awaited. The equipment selection and ordering is now
in progress and the actual construction activity is likely to start
very shortly. This plant is proposed to go on stream in the FY 2014-15.
Corporate Governance
Though the company has applied for listing with BSE Limited and
National Stock Exchange of India Limited, it is in compliance with
Corporate Governance requirement in terms of Clause 49 of the Listing
Agreement(s). A report on Corporate Governance is attached and form
part of this report.
Sustainable development and environment
We consider sustainable development and environment protection as
integral parts of our management culture and philosophy. Significant
work continues to be done in these areas on a consistent and
sustainable basis.
Cash flow analysis
The cash flow statement for the year ended 31st March 2013 is included
in the annual accounts.
Statutory matters
Debentures
The funds raised against debentures in the books of the Company were
utilised for the purposes as sanctioned.
Directors
Sarvashri Haigreve Khaitan, P. K. Sonthalia, P. C. Agarwala and M. L.
Pachisia ceased to be Directors of the Company during the year. The
Board places on record its appreciation of the valuable contribution
made by the Directors during their tenure as members of our Board.
Shri Rajeev Jhawar was appointed as a Director of the Company w.e.f.
13th August, 2012.
Sarvashri Vinod Kumar Dhall and Rabindranath Jhunjhunwala were co-opted
as Additional Directors on the Board of the Company w.e.f. 1st
November, 2012 and 25th March, 2013 respectively and hold office till
the conclusion of the ensuing Annual General Meeting of the Company.
Notices pursuant to Sec 257 of the Companies Act, 1956, have been
received from the shareholders proposing Mr. Dhall and Mr. Jhunjhunwala
for appointment as Directors of your Company.
Shri C. K. Birla, a Director of the company, retires by rotation at the
Annual General Meeting and is eligible for re-election.
Auditors
M/s. S. R. Batliboi & Co. LLP, Chartered Accountants and Auditors of
the Company, retire and offer themselves for re-appointment.
Cost auditors
As required under the provisions of Section 233B of the Companies Act,
1956, qualified cost auditors are being appointed to conduct cost
audits.
Conservation of energy, technology absorption, foreign exchange
earnings and outgo
Details regarding conservation of energy, research & development,
technology absorption and foreign exchange earnings and outgo are
furnished in Annexure "A" to this report, pursuant to the provisions of
the Companies Act, 1956 read with the Companies (Disclosure of
Particulars in the Report of Board of Directors) Rules, 1988.
Directors responsibility statement
Directors'' responsibility statement pursuant to section 217(2AA) of the
Companies Act, 1956 are given in Annexure "B" to the annual report.
Note No. 27 appearing in accounts referred to in the Auditors'' Report
is self-explanatory.
Particulars of employees
Particulars of employees pursuant to section 217(2A) of the Companies
Act, 1956 are given in Annexure "C" to the annual report.
Acknowledgements
Your Directors place on record their sincere gratitude to the
shareholders, customers, bankers, financial institutions, government
agencies, supply chain partners and the employees for their valuable
contribution, cooperation and support in the Company''s endeavours to
achieve continuous growth and progress.
By Order of the Board
C.K. BirlA
New Delhi, 2nd May, 2013 Chairman