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International portfolio diversification

What is a Portfolio ? A portfolio refers to a collection of investment tools such as stocks, shares, mutual funds, bonds, cash and so on depending on the investors income, budget and convenient time frame.

Definition of 'International Portfolio'

A grouping of investment assets that focuses on securities from foreign markets rather than domestic ones. An international portfolio is designed to give the investor e posure to gro!th in emerging and international markets and provide diversification. "ollo!ing are the t!o t#pes of $ortfolio% 1. &arket $ortfolio 2. 'ero (nvestment $ortfolio What is diversification Diversification is a techni)ue that reduces risk b# allocating investments among various financial instruments, industries and other categories. (t aims to ma imi*e return b# investing in different areas that !ould each react differentl# to the same event. &ost investment professionals agree that, although it does not guarantee against loss, diversification is the most important component of reaching long+range financial goals !hile minimi*ing risk. ,ere, !e look at !h# this is true, and ho! to accomplish diversification in #our portfolio.

Definition of 'Diversification'
A risk management techni)ue that mi es a !ide variet# of investments !ithin a portfolio. -he rationale behind this techni)ue contends that a portfolio of different kinds of investments !ill, on average, #ield higher returns and pose a lo!er risk than an# individual investment found !ithin the portfolio. What is Portfolio Management ? The art of selecting the right investment policy for the individuals in terms of minimum risk and maximum return is called as portfolio management. $ortfolio management refers to managing an individuals investments in the form of bonds, shares, cash, mutual funds etc so that he earns the ma imum profits !ithin the stipulated time frame.

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$ortfolio management refers to managing mone# of an individual under the e pert guidance of portfolio managers. (n a la#mans language, the art of managing an individuals investment is called as portfolio management. Need for Portfolio Management $ortfolio management presents the est investment plan to the individuals as per their income, budget, age and abilit# to undertake risks. $ortfolio management minimi!es the risks involved in investing and also increases the chance of making profits. $ortfolio managers understand the clients financial needs and suggest the best and uni)ue investment polic# for them !ith minimum risks involved. $ortfolio management enables the portfolio managers to provide customi!ed investment solutions to clients as per their needs and re)uirements.

Who is a Portfolio Manager ? An individual !ho understands the clients financial needs and designs a suitable investment plan as per his income and risk taking abilities is called a portfolio manager. A portfolio manager is one !ho invests on behalf of the client. Importance of International "# $pread the Wealth .)uities are !onderful, but don/t put all of #our investment in one stock or one sector. 0reate #our o!n virtual mutual fund b# investing in a handful of companies #ou kno!, trust, and perhaps even use in #our da#+to+da# life. $eople !ill argue that investing in !hat #ou kno! !ill leave the average investor too heavil# retail+oriented, but kno!ing a compan# or using its goods and services can be a health# and !holesome approach to this sector. %# &onsider Index or 'ond (unds 0onsider adding inde funds or fi ed+income funds to the mi . (nvesting in securities that track various inde es make a !onderful long+term diversification investment for #our portfolio. 1# adding some fi ed+income solutions, #ou are further hedging #our portfolio against market volatilit# and uncertaint#. )# *eep 'uilding Add to #our investments on a regular basis. 2ump+sum investing ma# be a sucker/s bet. (f #ou have 310,000 to invest, use dollar+cost averaging. -his approach is used to smooth out the peaks and valle#s created b# market volatilit#% #ou invest mone# on a regular basis into a specified portfolio of stocks or funds.

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+# *no, When to -et .ut 1u#ing and holding and dollar+cost averaging are sound strategies, but 4ust because #ou have #our investments on autopilot does not mean #ou should ignore the forces at !ork. 5ta# current !ith #our investment and remain in tune !ith overall market conditions. 6no! !hat is happening to the companies #ou invest in. /# *eep a Watchful 0ye on &ommissions (f #ou are not the trading t#pe, understand !hat #ou are getting for the fees #ou are pa#ing. 5ome firms charge a monthl# fee, !hile others charge transactional fees. 1e cogni*ant of !hat #ou are pa#ing and !hat #ou are getting for it. 7emember, the cheapest choice is not al!a#s the best.

Depika verma Case study

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Investor Diversification and International Equity Markets -he benefits of international diversification have been recogni*ed for decades. (n spite of this, most investors hold nearl# all of their !ealth in domestic assets. (n this paper, !e construct ne! estimates of the international e)uit# portfolio holdings of investors in the 8.5., 9apan, and 1ritain. &ore than :;< of the e)uit# portfolio of 9apanese investors is held domesticall#= the analogous percentages are :>< for the 8.5., and ;2< for 1ritain. ?e use a simple model of investor preferences and behavior to sho! that current portfolio patterns impl# that investors in each nation e pect returns in their domestic e)uit# market to be several hundred basis points higher than returns in other markets. -his lack of diversification appears to be the result of investor choices, rather than institutional constraints.

Kenneth R. French, James M. Poterba N'01 Working Paper No# )234 Issued in 5anuary "44" N'01 Program6s78 M0

'# T0&9N.:.-; <'$.1PTI.N= <D<PTI.N > INN.?<TI.N "7 0fforts= in rief= made to,ards Technology < sorption= <daption and Innovation8 a# &odification and automation in bulk loading s#stem. @5urat, 7auri, 5uli, 5ankrail, 1athindaA # &odification in 7a! &ill s#stems like Dorol initiatives and DA2BC. @1hatapara, 5uli, Ambu4anagarA c. (nstallation of 2aborator# (nformation &anagement 5#stem. @7abri#a!as, &aratha, Ambu4anagarA d. (nstallation of De! A"7 lab for testing of various A"7 and .n+&ass conve#or for A"7 feeding to (20 and 520 $reheater. @7abri#a!asA e. 8sage of -hermal (maging 0amera for determining hot spots. @7auri, 5uliA f# 5imulator based training centre for Automation. @7auriA g. ?ireless communication s#stem for operation of !ater suppl# pumps. @5uliA h. ?ater heating s#stem from 6iln shell radiations. @5uliA

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i# 7eplacement of helium gas based E7" machine b# E7" 5$.0-7B (F (( @multi 0hannelA. @5ankrailA @# (nstallations of 8$5 20 6GA, suspended t#pe !eigh feeders, Automated Crinding aid feeding s#stem, Do*co. @5ankrailA k. (mplementation of technical (nformation s#stem, 0ement &ill . pert s#stem, H 100 6? 5G$ 5olar .nerg# $lant. @1hataparaA l# Adoption of patented I6"$J technolog# for rain!ater harvesting K recharging at site. @1athindaA m. (nstallation of ne! technolog# bag filter + -orit po!er core filter pack. @1athindaA %7 'enefits derived as a result of the a ove efforts in the year %3"% a. (mproved operational efficiencies, e)uipment reliabilit#, productivit# and )ualit#. b. 7eduction in manufacturing cost, increase safet# and protection of environment. HA (nformation regarding -echnolog# (mported during last 5 #ears a# &odification in packing plants like bag printing machine, increase in spouts etc. @5urat, 7abri#a!as, &aratha, "arakkaA . (nstallation of 5ilo+level sensor. @5uratA c. (nstallation of 0oriolis fine coal feeding s#stem. @7abri#a!as, Ambu4anagarA d. 7eplacement of reverse air bag house to 4et pulse filters, &" ,71 +12 for clinker crushing to hammer crusher De! Duo fle 1urner. @7abri#a!asA e. (nstallation of 500 -$D 5#nthetic C#psum &anufacturing plant, GGG" drives on various e)uipments. @7abri#a!asA f. (nstallation of 0ontinuous emission monitoring s#stem @&aratha, 1hatapara line 1 and 2, Ambu4anagarA and $article si*e anal#*er. @&aratha, "arakka, 1athindaA g. 7ota scale for $0 firing. @&arathaA h# (nstallation of ,ot Air Cenerator and ,igh mast to!er lighting. @"arakkaA i# $20 is upgraded b# "25 automation to get all t#pe of trends of e)uipments, re)uired for proper anal#sis. @5ankrailA @# . isting .5$ of 0ement &ill+( L (( converted into ,#brid .5$. @1hataparaA k. (nstallation of $CDAA. @7abri#a!as, 1hatapara line 1 and 2 A l. 0ommissioned &echanical kiln monitoring s#stem, sound level sensor. @1hatapara 2ine 1 and 2, Ambu4anagarA m. (nstallation of $fister s#stem for 6iln "eed s#stem and 0oal firing s#stem. @1hataparaA n. (nstallation of G7$& and -echnical (nformation s#stem. @1hataparaA o. 7eplacement of e isting conventional burner pipe !ith third generation &ulti 0hannel 1urner @Dovaflam from "ives $illardA. @1hataparaA p# "u**# 2ogic ,igh level control. @1hatapara line+1, 7oorkeeA A. (nstallation of 1ag house ($B 7a! &ill .5$, 0onversion of 2 "an to H "an s#stems. @1hataparaA r# (nstallation of 6iln shell scanner, 6iln feed actuator, +ra# anal#ser. @Ambu4anagarA s. (nstallation of DA2BC 5#stem. @Ambu4anagar, 1hatapara line + 1 and 2A t# Gariable speed travel cage and o # acet#lene cutting machine. @Ambu4anagarA u# &icroscope for clinker )ualit# improvement. Ambu4anagarA v. $rocurement of thermal imager+0ondition monitoring tool, vibration anal#*er, laser alignment tool. @1athindaA ,# Crid 7otor 7esistance for bag ,ouse "an (nstead of

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2i)uid 7esistance 5tarter. @DalagarhA x. Bnline "iltration machine installed in G7& gear 1o and ,#draulic -ipplers. @DalagarhA y# -$5 &achine for 0leaning the $acking plant. @DalagarhA .ther Directorships etc#8 -he details of the Directorships, 0hairmanships and the 0ommittee memberships in other 0ompanies @e cluding $rivate 2imited 0ompanies, "oreign 0ompanies and section 25 0ompaniesA held b# the Directors as on H1st December, 2012, are given belo!%+ 5r. Do. 1 2 H > 5 M 7 ; : 10 11 12 Dame of the Directors &r. D. 5. 5ekhsaria &r. $aul ,ugentobler &r. 1ernard "ontana &r. &. 2. 1hakta &r. Dasser &un4ee &r. 7a4endra $. 0hitale &r. 5hailesh G. ,aribhakti Dr. Bmkar Cos!ami &r. Daresh 0handra &r. 1.2. -aparia &r. ,aigreve 6haitan &r. Bnne van der ?ei4de Do. of other Directorships 2 H 1 5 1> 7 12 10 11 1 1> 1 0hairman of the 1oard 1 + + + H + 2 + + + + + 0ommittee &ember @&andator#A + 2 + 5 : > : 10 : + 10 + Don+ &andator# 1 2 + 2 2H H + 1H + + 7 + 0hairman of the 0ommittee @&andator#A + 1 + + 5 2 > > 1 + + +

-he number of Directorships, 0hairmanships and 0ommittee memberships of each Director is in compliance !ith the relevant provisions of the 0ompanies Act, 1:5M and the 2isting Agreement. %#+ &ompensation and 1emuneration8 1emuneration to Directors% 6a7 -he remuneration of the &anaging Director is decided based on the 0ompan#s si*e, industr# practice,

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current trend and the overall performance of the 0ompan#. -he Domination and 7emuneration 0ommittee of Directors submits its recommendation to the 1oard, !hich after consideration approves the remuneration pa#able to the &anaging Director @!hich also includes the annual increments and performance bonusA !ithin the overall limits prescribed under the 0ompanies Act, 1:5M. Approval of the shareholders is obtained !herever re)uired. 6 7 -he Don+. ecutive Directors are paid sitting fees of N 20,000K+ per meeting for attending the 1oard and Audit 0ommittee meetings and N 10,000K+ per meeting for attending other committee meetings, e cept 5hare -ransfer 0ommittee, for !hich no sitting fees is paid. (n addition to the sitting fees, the 0ompan# also pa#s commission to the Don+e ecutive Directors for their overall engagement and contribution for the 0ompan#s business. -he 0ommission is paid on a uniform basis to reinforce the principle of collective responsibilit#. Accordingl#, the 0ompan# has provided for pa#ment of commission of N 1H lacs to each of the Don+. ecutive Directors !ho !ere in office for the !hole of the financial #ear 2012 and on pro+rata basis to those !ho !ere in office for part of the #ear. 0onsidering the accountabilit# and the comple ities of issues handled b# the Audit and 0ompliance 0ommittees respectivel#, the 0ompan# has provided additional commission of N : lacs for each of the Don+. ecutive &ember Directors of the Audit 0ommittee and 0ompliance 0ommittee !ho !ere in office for the !hole of the financial #ear 2012 and on pro+rata basis to those !ho !ere in office for part of the #ear. -he ma imum commission pa#able to each Don+. ecutive Director has ho!ever been capped at N 22 lacs per Director. Apart from sitting fees and commission, &r. 1.2. -aparia, shall also be paid a remuneration of N 1; lacs for the advisor# services rendered b# him to the 0ompan# for the period Dovember O December, 2012. -he remuneration shall be paid upon receipt of the 0entral Covernments approval, for !hich necessar# application has been filed as re)uired under the 0ompanies Act, 1:5M. Done of the Directors hold an# convertible instruments. -he details of remuneration, sitting fees, performance bonus, and commission paid to each of the Directors during the #ear ended on H1st December, 2012 are given belo!%+ 5r. Do. Dame of the Directors 7emuneration @NA 5itting "ees @NA 0ommission @NA Do. of shares held

Depika verma
1 2 H > 5 M 7 ; : 10 11 12 1H &r. D. 5. 5ekhsaria &r. &arkus Akermann . &r. 1ernard "ontana &r. $aul ,ugentobler . &r. &. 2. 1hakta &r. Dasser &un4ee . &r. 7a4endra $. 0hitale . &r. 5hailesh ,aribhakti . Dr. Bmkar Cos!ami &r. Daresh 0handra &r. ,aigreve 6haitan . &r. 1.2. -aparia &anaging Director -B-A2 Dil Dil Dil Dil Dil Dil Dil Dil Dil Dil Dil

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1,>0,000 20,000 >0,000 H,20,000 >,>0,000 1>0,000 2,:0,000 >,00,000 1,50,000 1,20,000 >0,000 70,000 + 21,70,000 1H,00,000 H,0:,01M 11,57,:2H 22,00,000 22,00,000 1H,00,000 22,00,000 22,00,000 22,00,000 22,00,000 5,M1,202 7,H>,251 + 1,;5,M2,H:2

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1,000 Dil Dil Dil 2,25,000 Dil Dil Dil Dil Dil

1;,00,000 H,M:,75,;:; H,;7,75,;:;

H,>2,250 D(22 5,M;,250

PAppointment of &anaging Director is governed b# a service contract for a period of 5 #ears and the notice period of H months. Note8 7emuneration of &anaging Director includes basic salar#, performance bonus, allo!ances, contribution to provident, superannuation and gratuit# funds and per)uisites @including monetar# value of ta able per)uisitesA etc. and e cludes shares !orth N 0.1; 0rore @H1.12.2011 O N 0.1H 0roreA allotted as a non+monetar# per)uisite b# ,olcim 2td., 5!it*erland, the ultimate ,olding 0ompan#. %#/ &ode of &onduct8 -he 1oard Directors has laid do!n a 0ode of 0onduct for 1usiness and .thics @the 0odeA for all the 1oard members and all the emplo#ees in the management grade of the 0ompan#. -he 0ode covers amongst other things the 0ompan#s commitment to honest L ethical personal conduct, fair competition, corporate social responsibilit#, sustainable environment, health L safet#, transparenc# and compliance of la!s L re

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regulations etc. -he 0ompan# believes in I'ero -oleranceJ to briber# and corruption in an# form and in line !ith our governance philosoph# of doing business in most ethical and transparent manner, the 1oard has laid do!n an Anti 1riber# and 0orruption Directives, !hich is embedded to the 0ode. -he 0ode of 0onduct is possted on the !ebsite of the 0ompan#. All the 1oard members and senior management personnel have confirmed compliance !ith the code. A declaration to that effect signed b# the &anaging Director is attached and forms part of the Annual 7eport of the 0ompan#. %#2 Prevention of Insider Trading &ode8 As per 5.1( @$revention of (nsider -radingA 7egulation, 1::2, the 0ompan# has adopted a 0ode of 0onduct for $revention of (nsider -rading. All the Directors, emplo#ees at senior management level and other emplo#ees !ho could have access to the unpublished price sensitive information of the 0ompan# are governed b# this code. -he 0ompan# has appointed &r. 7a4iv Candhi, 0ompan# 5ecretar# as 0ompliance Bfficer !ho is responsible for setting forth procedures and implementation of the code for trading in 0ompan#s securities. During the #ear under revie! there has been due compliance !ith the said code. )# <udit &ommittee )#" &omposition8B -he Audit 0ommittee comprises of the follo!ing members 1 . &r. 5hailesh ,aribhakt 0hairman 2 H > . &r. &. 2. 1hakta &r. $aul ,ugentobler . &r. 7a4endra $. 0hitale &ember &ember &ember

&r. 7a4iv Candhi, 0ompan# 5ecretar# acts as secretar# to the committee. All the members of the Audit 0ommittee are Don+. ecutive Directors and e cept &r. $aul ,ugentobler, all are (ndependent Directors. -he# possess sound kno!ledge on accounts, audit, finance, ta ation, internal controls etc. )#% Invitees C Participants8B 1. -he &anaging Director and &r. 1.2. -aparia are the permanent invitees to all Audit 0ommittee meetings. 2. ,ead of (nternal Audit department attends all the Audit 0ommittee &eetings as far as possible and briefs the 0ommittee on all the points covered in the (nternal Audit 7eport as !ell as the other issues that come up during discussions.

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H. -he representatives of the 5tatutor# Auditors have attended all the Audit 0ommittee meetings held during the #ear. >. -he representatives of the 0ost Auditors have attended 1 Audit 0ommittee &eeting !hen the 0ost Audit 7eport !as discussed. 5. -he 0.B, the 1usiness ,eads and the 0"B also attend 0ommittee meetings to provide inputs on issues relating to internal audit findings, internal controls, accounts, ta ation, risk management etc. M. -he 0ommittee also invites the representatives of ,olcim groups internal audit department to attend the Audit 0ommittee meetings for getting their valuable support and guidance on the international best practices in internal audit and strengthening of internal controls. )#) Meetings8B -he Audit 0ommittee during the #ear ended on H1st December, 2012 had 7 meetings. -he attendance of each 0ommittee member !as as under%+ 5r. Do. 1 2 H > Dame of the Directors &r. 5hailesh ,aribhakti &r. &. 2. 1hakta &r. 7a4endra $. 0hitale &r. $aul ,ugentobler Do. of &eetings attended 7 7 M M

&r. 5hailesh ,aribhakti, the 0hairman of the Audit 0ommittee !as present at the last Annual Ceneral &eeting to ans!er the shareholders )ueries. )#+ Private Meetings8B (n order to get the inputs and opinions of the 5tatutor# Auditors and the (nternal Auditors, the 0ommittee also held one separate one+to+one meeting during the #ear !ith the 5tatutor# Auditor and ,ead of (nternal Audit department !ithout the presence of the &anaging Director and management representatives. )#/ Terms of 1eference8B -he terms of reference of the Audit 0ommittee are as per the guidelines set out in the listing agreement !ith the stock e changes read !ith section 2:2A of the 0ompanies Act. -hese broadl# include @iA approval of annual internal audit plan, @iiA revie! of financial reporting s#stems, @iiiA revie! of internal control s#stems, @ivA discussions on )uarterl#, half #earl# and annual financial results, @vA interaction !ith statutor#, internal L cost auditors, @viA recommendation for appointment of statutor# L cost

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auditors and their remuneration and @viiA the risk management frame!ork concerning the critical operations of the 0ompan#. (n addition to the above, the Audit 0ommittee also revie!s the follo!ing% @aA &anagements Discussions and Anal#sis of 0ompan#s operations, @bA $eriodical (nternal Audit 7eports, @cA "raud 7isk &anagement 0ommittees 7eports, @dA "indings of an# special investigations carried out either b# the (nternal Auditors or b# the e ternal investigating agencies, @eA 2etters of 5tatutor# Auditors to management on internal control !eakness, if an#, @fA Appointment, removal and terms of remuneration of 0hief (nternal Auditor, 5tatutor# Auditor and the 0ost Auditor, @gA 5ignificant related part# transactions, @hA Fuarterl# and annual financial statements including investments made b# the subsidiar# companies. @iA &a4or non routine transactions recorded in the financial statements involving e ercise of 4udgment b# the management. )#2 .ther Matters8B 1. -he Audit 0ommittee has framed its 0harter for the purpose of effective compliance of clause >: of the listing agreement. -he 0harter is revie!ed b# the 0ommittee annuall# and necessar# amendments as ma# be re)uired are made in it from time to time. 2. (n vie! of large number of la!s L regulations applicable to the 0ompan#s business, their comple ities and the time re)uired for monitoring the compliances, the task of monitoring and revie! of legal L regulator# compliances has been assigned to a separate committee of directors called as the I0ompliance 0ommitteeJ under the chairmanship of &r. 5hailesh ,aribhakti, (ndependent Director. -he composition and the scope K function of 0ompliance 0ommittee are given under point no. > of this report. +# &ompliance &ommittee ?ith the rapid gro!th of business and its comple ities coupled !ith increasing regulator# compliances, the 1oard felt it necessar# to have *ero non compliance regime for sustainable business operations. ?ith this ob4ect, a structured mec hanism for ensuring full compliance of various statutes, rules L regulations has been put in place and a separate committee of Directors b# the name I0ompliance 0ommitteeJ has been constituted b# the 1oard. -he 0ommittee conssists of the members as stated belo!. During the #ear 2012 the 0ommittee held 7 meetings !hich !ere attended b# the members as under%+