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Directors Report of Orient Abrasives Ltd.

Mar 31, 2015

Dear Members

The directors have pleasure in presenting the FORTY FORTH annual report of the Company along with the audited financial statements for the financial year ended March 31, 2015.

FINANCIAL RESULTS (Rs. In Lacs PARTICULARS 2014-2015 2013-2014

Revenue from Operations (Gross) 20,427.24 19,367.16

Less: Excise Duty 2,136.48 1,938.61

Revenue from Operations (Net) 18,290.76 17,428.55

Add:- Other Income 90.27 77.65

Total Revenue 18,381.03 17,506.20

Profit before depreciation, interest and tax 3,048.68 2,594.62

Less: Depreciation 1,059.07 1,270.06

Interest 275.71 266.71

Profit before Income Tax 1,713.90 1,057.85

Less : Income Tax 482.98 351.75

Net Profit for the year 1,230.92 706.10

Add: Balance brought forward from the previous year 5,300.79 4,974.64

Amount available for appropriation 6,531.71 5,680.74

Appropriation:

General Reserve 400.00 100.00

Dividend on Equity Shares 299.10 239.28

Corporate dividend tax 60.89 40.67

CSR Expenses 14.96 -

Balance carried forward to balance sheet 5,756.76 5,300.79

OPERATIONS REVIEW AND FUTURE OUTLOOK

The gross turnover of the company increased to Rs. 20,427.24 Lacs during the year under review from Rs. 19,367.16 Lacs in the previous year. Accordingly Profit Before Tax (PBT) and Net Profit were Rs. 1,713.90 Lacs and Rs. 1,230.92 Lacs respectively as compared to Rs. 1,057.85 Lacs and Rs. 706.10 Lacs respectively in the previous year.

During the year under review the company could sell non-plant grade bauxite amounting to Rs. 69.27 Lacs, as compared to Rs. 840.18 Lacs, in the previous year, due to non receipt of permission from the Gujarat Government. Recently the company has received the permission from the state Government for sale of non plant grade bauxite.

The Market for abrasive grains is showing improvement in the current year.

Your Company has also installed an additional tilting furnace which will increase the productivity and reduce the cost of production of white fused grains.

Your Company has installed wind power plants of 11.1 M.W. in Rajasthan & Karnataka. The plants in Karnataka are operating satisfactorily but the plants in Rajasthan faced several local problem like theft of cables etc. Therefore the generation of power was lower compared to pervious year. During the year the gross revenue from sale of power to respective state power distribution companies was Rs. 626.96 Lacs as compared to Rs. 698.77 Lacs in the previous year. Your Company has a total thermal power plant capacity of 18 Mega Watt (MW) out of which 9 MW is based on coal and 9 MW on furnace oil. Due to unaffordable price of furnace oil, the furnace oil based power plant is used as and when required and found viable.

Your directors are hopeful that the company's performance will improve significantly in the current year.

DIVIDEND

Based on the Company's performance, your directors are pleased to recommend a final dividend of Rs. 0.25 per share (i.e. 25%) for the financial year 2014-15 on the capital of 11,96,39,200 equity shares of Rs.1.00 each, in previous year it was Rs. 0.20 per share (i.e. 20%).

The final dividend and dividend distributed tax involve the cash out flow of Rs. 359.99 Lacs (Previous Year Rs. 279.95 Lacs), the dividend is subject to approval of members of the Company in the Annual General Meeting.

SHARE CAPITAL

The paid up Share Capital of the Company as on 31st March, 2015 was Rs. 11.96 Crores. During the year under review the Company has not issued shares with differential voting rights nor granted stock options nor sweat equity. As on 31st March, 2015, none of the Directors of the Company hold convertible instruments.

RESERVES

The Company proposes to transfer Rs. 4 Crores to Reserves.

PROMOTER CHANGE

During the current year, the existing promoters have entered into a share purchase agreement with Bombay Minerals Ltd. and Cura Global Holdings Ltd. on 08 June 2015, for sale of their share 25.52% shareholding in the Company. The said agreement was acted upon on 15 July 2015 and Bombay Minerals Ltd. has acquired the 20.36% shareholding as per the said Share Purchase Agreement. Accordingly, total shareholding of the Bombay Minerals Ltd. stood at 38.36%, therefore Bombay Minerals Ltd. triggered the takeover code and made the public offer for acquisition of 26% shareholding from the public shareholders. The takeover process is going on and expected to complete by September 2015.

Accordingly Bombay Minerals Limited has became the promoter of the company w.e.f. 15 July 2015.

HOLDING SUBSIDIARY AND ASSOCIATE COMPANY

During the current year, w.e.f. 15 July 2015 Bombay Minerals Limited, became the holding company of the Company.

FIXED DEPOSIT

Accepted during the year: NIL.

Remained unpaid or unclaimed as at the end of the year: NIL.

Whether there has been any default in repayment of deposits or payment of interest thereon during the year and if so, number of such cases and the total amount involved: (i) at the beginning of the year: NIL (ii) maximum during the year: NIL (iii) at the end of the year: NIL.

Non Complied Deposits: NIL.

GOING CONCERN

During the year there is no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and company's operations in future.

INTERNAL FINANCIAL CONTROLS

The Company has adequate system of internal controls to ensure that all the assets are safeguarded and are productive. Necessary checks and balances are in place to ensure that transactions are adequately authorized and reported correctly. The Internal Auditors of the Company conduct Audits of various departments to ensure that the necessary controls are in place. The Audit Committee of the Board reviews these and the Company, when needed, takes corrective actions.

STATUTORY AUDITORS

The Company's Statutory Auditors, M/s. S.R. Batliboi & Co. LLP, Chartered Accountants, (ICAI Firm Registration No. 301003E) retire at the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment, but have expressed their unwillingness to be re-appointed.

Therefore the Board of Directors have recommended M/s SRBC & Co LLP. (ICAI Firm Registration No. 324982E) as Statutory Auditors of the company. Your company has also received a certificate from the proposed auditors to the effect that they are eligible for appointment under the applicable provisions of the Companies Act, 2013 and the Companies (Audit and Auditors) Rules, 2014, as amended, time to time.

Members are requested to appoint the proposed auditors in ensuing AGM from conclusion of this 44th AGM to the 45th AGM for a period of one year.

AUDITORS' REPORT

The Auditors' Report read with notes to the financial statements is self-explanatory and does not call for any further explanation. There is no adverse remark in the audit report for the year.

SECRETARIAL AUDITOR

The Board has appointed Mr. Jain Gupta, Company Secretary in Whole time Practice, to conduct Secretarial Audit for the financial year 2014-15. The Secretarial Audit Report for the financial year ended 31st March, 2015 is annexed herewith marked as Annexure A.

COST AUDITORS

M/s K G Goyal & Associates was appointed as Cost Auditors u/s 233(1B) of Companies Act 1956 for the year 2013-14. The Cost Audit Report had been filed in XBRL format in requisite form on 25 September 2014 for the FY 2013-14. The cost audit report for the F Y 2014-15 will be filed in due course of time.

M/s. K G Goyal & Associates, Cost Accountants have been appointed as Cost Auditor u/s 148 of Companies Act 2013 and rule 3 & 4 of Companies (Cost Records and Audit) Rules, 2014 of the Company for the financial year 2015-16 for the products manufactured by the Company at a fee of Rs. 50,000/- plus Service Tax and reimbursement of out of pocket expenses. The Fees is subject to confirmation of the members in ensuing AGM.

DIRECTORS

Mr. S G Rajgarhia, Director having been longer in the office, retires by rotation at the ensuing annual general meeting and being eligible offers himself for re-appointment. Mr. S G Rajgarhia is a director of the Company. A brief resume of the appointee is given in the notice to the Annual General Meeting. Your directors recommend his re-appointment at the ensuing annual general meeting in the overall interest of the Company.

During the year Mrs. Anisha Mittal was appointed as additional director w.e.f. 30 March 2015. In the current year, w.e.f. 15 July 2015, Mr. Hemul Shah and Mr. Pundarik Sanyal and w.e.f. 06 August 2015 Mr. Mihir H Devani were appointed as additional directors of the company. Mr. Mihir H Devani was also appointed as Whole Time Director of the Company subject to confirmation of members in ensuing AGM.

In the current year w.e.f. 15 July 2015 Mr. Umesh Kumar Khaitan, Independent Director, Mr. Prem Prakash Khanna, Executive Director and Mr. Rajesh Kumar Khanna, Whole Time Director, and w.e.f. 06 August 2015 Mr. Manoj C Ganatra, Independent Director were resigned from the company.

During the current year, w.e.f 15 July 2015 Mr. S G Rajgarhia has ceased as Key Managerial Personnel of the company and w.e.f. 06 August 2015 Mr. Mihir H Devani, Whole Time Director has been appointed as Key managerial Personnel of the company.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 134 (3)(c) of the Companies Act, 2013, your Directors hereby confirmed that:

(i) in the preparation of the annul accounts for the year ended 31st March, 2015, the applicable accounting standards read with requirements set out under Schedule III to the Companies Act, 2013, have been followed and there are no material departures from the same;

(ii) the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2015 and of the Profit of the Company for the year ended as on that date;

(iii) the Directors have taken proper and sufficient care for maintenance of adequate accounting records in accordance with provisions of the Companies Act, 2013, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(iv) the Directors have prepared the annual accounts of the Company on a "going concern" basis;

(v) the Directors have laid down internal financial controls to be followed by the Company and the such internal financial controls are considered adequate and are operating effectively; and

(vi) the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that systems are considered adequate and operating effectively.

CREDIT RATING OF BANK BORROWINGS

For Long Term Bank Facilities A (Single A) rating has been assigned by Credit Analysis & Research Ltd. (CARE). This rating indicates adequate safety and carries low credit risk.

For short term borrowings A1 (A One Plus) has been assigned by CARE. This rating indicates very strong degree of safety and carries lowest credit risk.

CRISIL has also given assigned us "CRISIL A/Stable" rating for cash Credit, term loan and proposed term loan. "CRISIL A1" rating for letter of credit and bank guarantee.

CODE OF CONDUCT

The Company has laid down a code of conduct for the directors and senior management personnel. It is available on the website of the Company www.orientabrasives.com. A declaration by the Managing Director regarding annual affirmation of compliance of the code by all concerned is annexed to the report on Corporate Governance. With a view to regulate trading in securities by Directors, KMP, & Designated Employees, the company adopted a code of conduct to Regulate, Monitor and Report Trading by Insiders.

CORPORATE SOCIAL RESPONSIBILITY

The Corporate Social Responsibility Committee has formulated and recommended to the Board, a Corporate Social Responsibility Policy (CSR Policy) indicating the activities to be undertaken by the Company, which is approved by the Board. During the year, the Company has spent Rs. 14.96 Lakhs out of Rs. 29.02 Lakhs (2%) of the average net profits of last three years) on CSR activities. The Annual Report on CSR activities is annexed herewith as Annexure B. CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES:

All contracts /arrangements / transactions entered by the Company during the financial year with related parties were in ordinary course of business and on an arm's length basis.

During the year, the Company had entered into a contract with Orient Refractories Ltd. related party that is considered material contract in accordance with the policy of the Company on materiality of related party transactions. The Policy on materiality of related party transactions and dealing with related party transactions are approved by the Board may be accessed on the Company's website at the link http://www.orientabrasives.com/OAL%20policies/ Related%20Partv%20Transactions%20Policv.pdf. Members can refer Note no. 26 to the financial statement which sets out related party disclosures.

The Annual Report on related party contract is annexed herewith as Annexure C.

EXTRACT OF ANNUAL RETURN

Extract of annual return of the Company is annexed herewith as Annexure D to this report.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

Information relating to Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo, required to be made pursuant to section 134 of the Companies Act 2013 read with the Companies (Accounts) Rules, 2014 is given in Annexure-E and forms part of this report.

MANAGEMENT DISCUSSION AND ANALYSIS

Notes on Management Discussion and Analysis of the company have been given in Annexure-F and forms part of this report.

RISK MANAGEMENT

The Company has framed a Risk Management Policy to identify to study and mitigate the various risks and access the key business risk areas and a risk mitigation process. A detailed exercise is being carried out to study and mitigate the various risks that the organization faces such as strategic, financial, credit, market, liquidity, security, property, IT, legal, regulatory, reputational and other risks. The Board periodically reviews the risks and suggests steps to be taken to control and mitigate the same through a properly defined framework.

CRITERIA FOR APPOINTMENT OF INDEPENDENT DIRECTORS

The Independent Directors shall be of high integrity with relevant expertise and experience so as to have as diverse Board with Directors having expertise in the fields of manufacturing, marketing, finance, taxation, Law, governance and general management.

CRITERIA FOR APPOINTMENT OF MANAGING DIRECTOR / WHOLE TIME DIRECTORS

The Nomination and Remuneration Committee shall identify persons of integrity who possess relevant expertise, leadership qualities required for the position and shall take into consideration recommendation, if any, received from any member of the Board.

REMUNERATION POLICY

The Company follows a policy on remuneration of Directors and Senior Management employees. The policy can be accessed from the company website at www.orientabrasives.com

PERFORMANCE EVALUATION

In accordance with the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement the Nomination and Remuneration Committee has laid down the criteria for evaluation of individual Directors, the Board as a whole. Based on the criteria the exercise of evaluation was carried out as structured process covering various aspects of the Board functioning such as composition of Board and Committees, experience and expertise, performance of specific duties and obligation, governance and compliance issues attendance, contribution at meeting etc.

The performance evaluation of the Chairman and the Non Independent Directors was carried out by the Independent Directors at a separately convened meeting in which the performance of the Board as a whole was evaluated and reviewed. The performance of the Independent Directors was carried out by the entire Board (Excluding the Director being evaluated).

The Directors expressed their satisfaction with the evaluation.

FAMILIARISATION PROGRAMME FOR BOARD MEMBERS

On appointment, the concerned Director is issued a Letter of Appointment setting out in detail, the terms of appointment, duties, responsibilities and expected time commitments. Each newly appointed Independent Director is taken through a formal induction program including the presentation from the Director on the Company's manufacturing, marketing, finance and other important aspects.

The Company Secretary briefs the Director about their legal and regulatory responsibilities as a Director. The induction for Independent Director include interactive sessions with Executive Directors, Business and Functional Heads, visit to the manufacturing site etc.

The details of such familirisation programme have been displayed on the company's website link: http://www.orientabrasives.com/investor_relations.htm

INDUSTRIAL RELATIONS

The industrial relations with staff and workers during the year under review continue to be cordial.

HUMAN RESOURCES

The Company's human resources continue to be its most valuable asset. The team has remained as committed as ever and produced results that are considered significant. Quality, quick delivery and focus on resolving customer issues are the hallmark of the team performance.

There is a strong focus on team spirit, during the year, many events/training programs were conducted to develop personality and outlook of its employees. Employee relations continue to be cordial.

CORPORATE GOVERNANCE AND BUSINESS RESPONSIBILITY REPORT A separate section on Corporate Governance is attached to this report as Annexure-G.

A certificate from the Practicing Company Secretary regarding compliance of the conditions of Corporate Governance as stipulated under clause 49 of the listing agreements with stock exchanges is enclosed as Annexure-H.

A certificate from the Managing Director that all board members and senior management personnel have affirmed compliance with the code of conduct for the year ended March 31, 2015 is attached as Annexure-I. CEO/CFO certificate is enclosed as Annexure-J.

DISCLOSURES:

1. Vigil Mechanism

The Vigil Mechanism of the Company, which also incorporate a whistle blower policy in the terms of Listing Agreements deals with instances of fraud and mismanagement, if any. The Policy on vigil mechanism and whistle blower policy may be accessed on the Company's website at www.orientabrasives.com

2. Audit Committee

The Audit Committee was reconstituted w.e.f. 06 August 2015 comprised of Mr. Pundarik Sanyal (Chairman), Independent Director, Mr. R S Bajoria, Independent Director and Mr. Hemul Shah, Non Independent Director. All the recommendations made by the Audit Committee were accepted by the Board.

3. Number of Board Meeting

The Board of Directors of the Company met six times in the year, the details of which are provided in the Corporate Governance Report.

4. Particulars of loans given, investment made, guarantees given and securities provided Particulars of loans given, investments made, guarantees given and securities provided along with the purpose for which the loan or guarantee or security is proposed to be utilized by the recipient are provided in the standalone financial statement. Please refer the Standalone Financial Statement.

5. Particulars of Employees and related disclosures

Pursuant to the provisions of Section 197(12) of the Companies Act, 2013 read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, and in terms of provisions of the Section 136 (1) of the Act, the Annual Report excluding the aforesaid information is being sent to the members of the Company. The said information is available for inspection at Corporate Office of the Company during the working hours and any member interested in obtaining such information may write to the Company Secretary.

6. Your Directors further state that during the year under review, there were no cases filed, pursuant to the sexual harassment of women at workplace (Prevention, Prohibition and Redressal) Act, 2013.

No disclosure or reporting is required in respect of the following items as there were no transaction on these items during the year under review:

1. Details of relating to deposit and unclaimed deposits or interest thereon.

2. Issue of equity shares with differential rights as to dividend or voting.

3. Issue of shares (including sweat equity shares) and Employee Stock Option Scheme of the Company under any scheme.

4. No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern and Company's operation in future.

ACKNOWLEDGEMENTS

Your directors sincerely appreciate the dedication and efforts of the employees at all levels of the organisation in contributing to the success of the Company. The directors are also thankful to the Investors of the Company for their confidence in the Company. They also gratefully acknowledge the continued support and guidance received from the Auditors, Customers, Business Associates, various Government Authorities, Financial Institutions and the Banks.

For and on behalf of the Board

Sd/- Mumbai Pundarik Sanyal 06 August 2015 Chairman (DIN-01773295)




Mar 31, 2014

Dear Members

The directors have pleasure in presenting the FORTY THIRD annual report of the Company along with the audited financial statements for the financial year ended March 31, 2014.

FINANCIAL RESULTS (Rs. In Lacs)

PARTICULARS 2013-2014 2012-2013

Revenue from Operations (Gross) 19,316.79 20,025.39

Less: Excise Duty 1,938.61 1,828.90

Revenue from Operations (Net) 17,378.18 18,196.49

Add:- Other Income 128.02 260.20

Total Revenue 17,506.20 18,456.69

Profit before depreciation, interest and tax 2,551.47 3,825.81

Less: Depreciation 1,270.06 1,273.98

Interest 223.56 489.81

Profit before Income Tax 1,057.85 2,062.02

Less : Income Tax 351.75 467.18

Net Profit for the year 706.10 1,594.84

Add: Balance brought forward from the previous year 4,974.64 4,469.70

Amount available for appropriation 5,680.74 6,064.54 Appropriation:

General Reserve 100.00 600.00

Dividend on Equity Shares 239.28 418.74

Corporate dividend tax 40.67 71.16

Balance carried forward to balance sheet 5,300.79 4,974.64

DIVIDEND

Based on the Company''s performance, your directors are pleased to recommend a final dividend of Rs. 0.20 per share (i.e. 20%) for the financial year 2013-14 on the capital of 11,96,39,200 equity shares of Rs.1.00 each, in previous year it was Rs. 0.35 per share (i.e. 35%). The final dividend on the equity shares, if approved by the members would involve a cash outflow including dividend distribution tax of Rs. 279.95 Lacs (Previous Year Rs. 489.90 Lacs).

OPERATIONS REVIEW AND FUTURE OUTLOOK

The gross turnover of the company decreased to Rs. 19,316.79 Lacs during the year under review from Rs. 20,025.39 Lacs in the previous year. Accordingly Profit Before Tax (PBT) and net profit were Rs. 1057.85 Lacs and Rs. 706.10 Lacs respectively as compared to Rs. 2,062.02 Lacs and Rs. 1,594.84 Lacs respectively in the previous year.

During the year under review the company could sell non-plant grade bauxite amounting to Rs. 840.18 Lacs, as compared to Rs. 2488.39 Lacs, in the previous year, due to non receipt of permission from the Gujarat Government. The company expects to sell a larger quantity in the current year after the receipt of permission from the Government.

The Market for abrasive grains is showing improvement in the current year. In order to meet the increased demand the company has got the connected load from Paschim Gujarat Vij Company Ltd. (PGVCL) increased to 4 M.W. from 2.4 M.W. This will enable the company to operate one additional furnace.

The Company is also installing an additional tilting furnace which will increase the productivity and reduce the cost of production of white fused grains.

The Company has installed wind power plants of 11.1 M.W. in Rajasthan & Karnataka. The plants in Karnataka are operating satisfactorily but the plants in Rajasthan faced several local problem like theft of cables etc. Therefore the generation of power was lower compared to pervious year. During the year the gross revenue from sale of power to respective state power distribution companies was Rs. 698.77 lacs as compared to Rs. 895.57 Lacs in the previous year.

Your Company has a total thermal power plant capacity of 18 Mega Watt (MW) out of which 9 MW is based on coal and 9 MW on furnace oil. Due to unaffordable price of furnace oil, the furnace oil based power plant is used as and when required and found viable.

Your directors are hopeful that the company''s performance will improve significantly in the current year.

FIXED DEPOSIT

The Company has repaid all the fixed deposit with interest thereon. As on date the company has no fixed deposits.

AUDITORS

The Existing Auditors M/s. S.R. Batliboi & Co. LLP, Chartered Accountants, retire at the ensuing annual general meeting and being eligible, offer themselves for re appointment. Your company has received a certificate from the auditors to the effect that they are eligible for re-appointment under the applicable provisions of the Companies Act, 2013.

Members are requested to appoint auditors in ensuing AGM from conclusion of this 43rd AGM to the 44th AGM for a period of one year.

AUDITORS'' REPORT

The Auditors'' Report read with notes to the financial statements is self-explanatory and does not call for any further explanation by the board. There is no adverse remark in the audit report for the year.

COST AUDITORS

M/s K G Goyal & Associates were appointed as Cost Auditors u/s 233(1B) of Companies Act 1956 for the financial year 2012-13. The Cost Audit Report had been filed in XBRL format in requisite form on 26 September 2013 for the FY 2012-13. The Cost audit report for the Financial Year ended March 31, 2014 will be filed on or before due date.

Cost Auditors have confirmed that their re-appointment, if made, shall be within the limits laid down in Section 139 and 141 of the Companies Act, 2013.

M/s. K G Goyal & Associates, Cost Accountants have been appointed as Cost Auditor u/s 148 of Companies Act 2013 and rule 3 & 4 of Companies (Cost Records and Audit) Rules, 2014 of the Company for the financial year 2014-15 for the products manufactured by the Company at a fee of Rs. 50,000/- plus Service Tax and reimbursement of out of pocket expenses. The Fees is subject to confirmation of the members in AGM.

DIRECTORS

Mr. R K Khanna having been longer in the office, retires by rotation at the ensuing annual general meeting and being eligible offer himself for re-appointment. Mr. R. K. Khanna is an executive director of the Company. A brief resume of the appointee is given in the notice to the annual general meeting. Your directors recommend his re-appointment at the ensuing annual general meeting in the overall interest of the Company.

During the period Mr. R K Rajgarhia and Mr. S K S Narayan were resigned from the Board of the Company. During the year Mr. Dilip Gandhi was appointed as director and subsequently he resigned from the Board.

The Board places on record its gratitude for the services rendered by all the directors during their tenure as member of the Board.

During the current year Mr. Manoj C Ganatra was appointed as additional director w.e.f. 2 May 2014.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the requirement of Section 217(2AA) of the Companies Act, 1956 ("Act"), the Directors hereby confirm that:

(i) in the preparation of the annual accounts for the year 2013-14, the applicable accounting standards have been followed and there are no material departures;

(ii) 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 at the end of the financial year and of the profit of the Company for the financial year;

(iii) they have taken proper and sufficient care to the best of their knowledge and ability for the maintenance of adequate accounting records in accordance with the provisions of the Act. They confirm that there are adequate systems and controls for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(iv) they have prepared the annual accounts on a going concern basis.

CREDIT RATING OF BANK BORROWINGS

For Long Term Bank Facilities A (Single A) rating has been assigned by Credit Analysis & Research Ltd. (CARE). This rating indicates adequate safety and carries low credit risk.

For short term borrowings A1 (A One Plus) has been assigned by CARE. This rating indicates very strong degree of safety and carries lowest credit risk.

CODE OF CONDUCT

The Company has laid down a code of conduct for the directors and senior management personnel as specified for Insider Trading. The amended code was adopted in the board meeting held on 6 August 2014. It is available on the website of the Company www.orientabrasives.com. A declaration by the managing director regarding annual affirmation of compliance of the code by all concerned is annexed to the report on corporate governance.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

Information relating to Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo, required to be made pursuant to Section 217 (1) (e) of the Companies Act, 1956 ( now section 134 of the Companies Act 2013) read with the Companies (Disclosure of Particulars in the report of Board of Directors) Rules, 1988, (now Companies (Accounts) Rules, 2014) is given in Annexure-A and forms part of this report.

PARTICULARS OF EMPLOYEES

None of the Directors/Employees have drawn remuneration more than Rs. 60 Lacs P.A. Accordingly it does not attracts disclosure requirements as per Section 217 (2A) of the Companies Act,1956, read with the Companies (Particulars of employees) rules, 1975 as amended in 2011.

MANAGEMENT DISCUSSION AND ANALYSIS

Notes on Management Discussion and Analysis of the company have been given in Annexure-B and forms part of this report.

CORPORATE SOCIAL RESPONSIBILITY

During the year, your directors have constituted the Corporate Social Responsibility Committee (CSR Committee) comprising Mr. R S Bajoria, Chairman and Mr. S G Rajgarhia and Mr. P P Khanna as other members The said Committee has been entrusted with the responsibility of formulating and recommending to the Board, a Corporate Social Responsibility Policy (CSR Policy) and deciding the activities to be undertaken by the Company.

CORPORATE GOVERNANCE

A separate section on corporate governance is attached to this report as Annexure-C. A certificate from the Practicing Company Secretary regarding compliance of the conditions of corporate governance as stipulated under clause 49 of the listing agreements with stock exchanges is enclosed as Annexure-D. A certificate from the managing director that all board members and senior management personnel have affirmed compliance with the code of conduct for the year ended March 31, 2014 is attached as Annexure-E. CEO/General Manager certificate is enclosed as Annexure-F.

ACKNOWLEDGEMENTS

Your directors sincerely appreciate the dedication and efforts of the employees at all levels of the organisation in contributing to the success of the Company. The directors are also thankful to the investors of the Company for their confidence in the Company. They also gratefully acknowledge the continued support received from the customers, business associates, various government agencies, financial institutions and the banks.

For and on behalf of the Board

Sd/- New Delhi R S Bajoria 6 August 2014 Chairman (DIN-00033727)


Mar 31, 2013

The directors have pleasure in presenting the Forty Second Annual Report of the Company along with the audited financial statements for the financial year ended March 31, 2013.

FINANCIAL RESULTS

(Rs. in Lacs)

PARTICULARS 2012-2013 2011-2012

Gross Sales & Income 18,456.69 16,835.61

Profit before depreciation, interest and tax 3,825.81 2,978.10

Less : Depreciation 1,273.98 1,231.30

Interest 489.81 489.18

Profit before Income Tax 2,062.02 1,257.62

Less : Income Tax 467.18 343.57

Net Profit for the year 1,594.84 914.05

Add : Balance brought forward from the previous year 4,469.70 4,133.75

Amount available for appropriation 6,064.54 5,047.80

Appropriation

General Reserve 600.00 300.00

Dividend on Equity Shares 418.74 239.28

Corporate dividend tax 71.16 38.82

Balance carried forward to balance sheet 4,974.64 4,469.70



DIVIDEND

Based on the Company''s performance, your directors are pleased to recommend a final dividend of Rs. 0.35 per share (i.e. 35%) for the financial year 2012-13 on the capital of 11,96,39,200 equity shares of Rs. 1.00 each. The final dividend on the equity shares, if approved by the members would involve a cash outflow including dividend distribution tax of X. 489.90 Lacs (Previous year Rs. 278.10 Lacs).

OPERATIONS REVIEW AND FUTURE OUTLOOK

During the year under review, the performance of your Company was satisfactory. The gross turnover of the Company increased to X 20,025.39 Lacs during the year under review from Rs. 18,360.79 Lacs in the previous year. Accordingly gross profit and net profit were Rs. 2,062.02 Lacs and Rs. 1,594.84 Lacs respectively as compared to Rs. 1,257.62 Lacs and Rs. 914.05 Lacs respectively in the previous year. The turnover of the abrasives grains decreased to Rs. 11,456.91 Lacs during the year under review from Rs. 12,632.44 Lacs in the previous year.

During the year under review, the Company has sold non-plant grade bauxite amounting to Rs. 2,488.39 Lacs which includes export sale of Rs. 804.42 Lacs. The management expects that the Company will sale/export non-plant grade bauxite at various mines in Jamnagar district, Gujarat, subject to approval from the state government.

As you aware that your Company has also wind generation power plants having capacity of 11.1 MW, located at Jodhpur & Jaisalmer in Rajasthan and Kalmangi & Gajendragarh in Kamataka. These plants are operating satisfactorily, the power generated by these plants are sold to the respective state power distribution companies. During the year under review gross revenue for sale of power (wind energy) increased to Rs. 895.57 Lacs from Rs. 824.13 Lacs.

Your Company has a total thermal power plant capacity of 18 Mega Watt (MW) out of which 9 MW is based on coal and 9 MW on furnace oil. Due to unaffordable price of furnace oil, the furnace oil based power plant is used as and when required and found viable.

Your directors are hopeful that the performance of the Company in the current year will remain satisfactory.

FIXED DEPOSIT

As on date of this report there is no overdue or unclaimed fixed deposit in the Company.

AUDITORS

M/s S R Batliboi & Co. LLP, Chartered Accountants, who are the statutory auditors of the Company, hold office, in accordance with the provisions of the Act up to the conclusion of the forthcoming annual general meeting and offer themselves for re-appointment. They have confirmed that their re-appointment, if made, shall be within the limits laid down in Section 224(1 B) of the Companies Act, 1956.

AUDITORS'' REPORT

The Auditors'' Report read with notes to the financial statements is self-explanatory and does not call for any further explanation by the board.

COST AUDITORS

M/s K G Goyal & Associates was appointed as Cost Auditors u/s 233(1 B) of Companies Act, 1956 for the year 2011 -12 for conducting Cost audit of business segment related to power division of the Company. The Cost Audit Report was duly filed with the MCA in requisite form on December 28, 2012 well within the extended due date of filing i.e. February 28, 2013.

M/s K G Goyal & Associates, Cost Accountants have further been appointed as Cost Auditor of the Company for the financial year 2013-14 for the products manufactured by the Company.

DIRECTORS

Mr P P Khanna and Mr S K S Narayan, directors retire by rotation at the ensuing annual general meeting and being eligible offer themselves for re-appointment. Mr P P Khanna has also been appointed as an executive director of the Company. A brief resume of the appointees is given in the notice to the annual general meeting. Your directors recommend their re-appointment at the ensuing annual general meeting in the overall interest of the Company.

During the period Mr T N Chaturvedi resigned from the board of the Company. The board places on record its gratitude for the services rendered by Mr Chaturvedi during his tenure as member of the Board.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the requirement of Section 217(2AA) of the Companies Act, 1956 ("Act"), the Directors hereby confirm that:

(i) in the preparation of the annual accounts for the year 2012-13, the applicable accounting standards have been followed and there are no material departures;

(ii) 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 at the end of the financial year and of the profit of the Company for the financial year;

(iii) they have taken proper and sufficient care to the best of their knowledge and ability for the maintenance of adequate accounting records in accordance with the provisions of the Act. They confirm that there are adequate systems and controls for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities,

(iv) they have prepared the annual accounts on a going concern basis.

CREDIT RATING OF BANK BORROWINGS

For Long Term Bank Facilities A (Single A) rating have been assigned by Credit Analysis & Research Ltd. (CARE) and Credit Rating Information Services of India Limited (CRISIL) .This ratings indicates adequate safety and carries low credit risk.

For Short Term Borrowings A1 (A One Plus) have been assigned by CARE and A1 (A one) by CRISIL. These ratings indicates very strong degree of safety and carries lowest credit risk.

CODE OF CONDUCT

The Company has laid down a code of conduct for the directors and senior management personnel as specified. The code was adopted in the board meeting held on December 13, 2005. It is available on the website of the Company www.orientabrasives.com. A certificate from the managing director that all board members and senior management personnels have affirmed compliance with the code of conduct for the year ended March 31, 2013 is attached as Annexure F.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

Information relating to Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo, required to be made pursuant to Section 217 (1) (e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the report of Board of Directors) Rules, 1988, is given in Annexure-A and forms part of this report.

PARTICULARS OF EMPLOYEES

The details of employees who drew remuneration either in whole or for a part of the year that attracts disclosure requirements as per Section 217 (2A) of the Companies Act,1956, read with the Companies (Particulars of Employees) rules, 1975 as amended, is given in Annexure-B and forms part of this report.

MANAGEMENT DISCUSSION AND ANALYSIS

Notes on Management Discussion and Analysis of the Company have been given in Annexure-C and forms part of this report.

CORPORATE GOVERNANCE

A separate section on corporate governance for the year ended March 31, 2013 is attached to this report as Annexure-D. A certificate from the Practicing Company Secretary regarding compliance of the conditions of corporate governance as stipulated under clause 49 of the listing agreements with stock exchanges is enclosed as Annexure-E. CEO/CFO certificate is enclosed as Annexure-G.

CORPORATE SOCIAL RESPONSIBILITY

The Company will in due course of time shall make efforts contribute to the society and environment by following the voluntary guidelines on Corporate Social Responsibility, 2009 and the National Voluntary Guidelines on Social, Environmental and Economic Responsibilities of Business, 2011 framed by the Ministry of Corporate affairs, in letter and spirit.

ACKNOWLEDGEMENTS

Your directors sincerely appreciate the dedication and efforts of the employees at all levels of the organisation in contributing to the success of the Company. The directors are also thankful to the investors of the Company for their confidence in the Company. They also gratefully acknowledge the continued support received from the customers, business associates, various government agencies, financial institutions and the banks.

For and on behalf of the Board

New Delhi R K Rajgarhia

May 17, 2013 Chairman


Mar 31, 2012

The directors have pleasure in presenting the forty first annual report of the Company along with the audited financial statements for the financial year ended March 31, 2012.

SCHEME OF DEMERGER

During the year under review, a scheme of demerger ("The Scheme") was sanctioned by the Hon'ble High Court of Judicature at Delhi vide its order dated September 19, 2011. The scheme becomes effective with effect from October 31, 2011 ("the effective date"). Pursuant to scheme the refractory business of the Company carried at its manufacturing unit at Bhiwadi (demerged undertaking), was transferred to the transferee company i.e. Orient Refractories Limited with effect from April 01, 2011 (the appointed date).

The said scheme provides, inter alia, the transfer of demerged undertaking on a going concern basis to the transferee company in consideration of which, each shareholder of the Company whose name appeared in the register of members of the Company on the record date i.e. November 14, 2011, received one fully paid equity share of face value of Rs. 1.00 each in the transferee company.

OPERATIONS REVIEW AND FUTURE OUTLOOK

The financial results for the year ended March 31, 2012 are for the businesses remaining with the Company, after giving effect to the scheme of demerger and accordingly, are not strictly comparable with the previous corresponding period and hence not given here.

During the year under review your Company has achieved a Gross Turnover of Rs. 18,360.79 Lacs. Gross profit and Net profit are Rs. 1,257.62 Lacs and Rs. 914.05 Lacs respectively. The performance of the abrasive grains division was overall satisfactory during the year under review. The turnover of the abrasive grains increased to Rs. 12,632.44 Lacs from Rs. 8,731.01 Lacs, growing by 45% .

Your Company has a total thermal power plant capacity of 18 Mega Watt (MW) out of which 9 MW is based on coal and 9 MW on furnace oil. The thermal power plant based on coal is more economical and operating at full capacity and satisfactorily meeting the maximum power requirement of the abrasive grains division, Porbandar. Due to increase in the price of furnace oil, the furnace oil based power plant is used as and when required and found viable.

As you are aware that your Company has also wind generation power plants having capacity of 11.1 MW, located at Jodhpur & Jaisalmer in Rajasthan and Kalmangi & Gajendragarh in Karnataka. These plants are operating satisfactorily, the power generated by these plants are sold to the respective state power distribution companies. During the year under review gross revenue for sale of power increased to Rs. 824.13 Lacs from Rs. 410.35 Lacs in the previous year.

Your directors are hopeful that the turnover and profitability of the Company will increase in the current year.

DIVIDEND

Based on the Company's performance, your directors are pleased to recommend a final dividend of Rs. 0.20 per share (i.e. 20%) for the financial year 2011-12 on the capital of 119,639,200 equity shares of Rs. 1.00 each. The final dividend on the equity shares, if approved by the members would involve a cash outflow of Rs. 278.10 Lacs including dividend distribution tax.

SUBSIDIARY COMPANY

During the year, pursuant to the scheme of arrangement for demerger, Orient Refractories Limited ceased to be subsidiary of the Company.

FIXED DEPOSIT

As on date of this report there is no overdue or unclaimed fixed deposit in the Company.

AUDITORS

M/s. S.R. Batliboi & Co., Chartered Accountants, who are the statutory auditors of the Company, hold office, in accordance with the provisions of the Act up to the conclusion of the forthcoming annual general meeting and offer themselves for re-appointment. They have confirmed that their re-appointment, if made, shall be within the limits laid down in Section 224(1B) of the Companies Act, 1956.

AUDITORS' REPORT

The Auditors' Report read with notes to the financial statements is self-explanatory and does not call for any further explanation by the board.

COST AUDITORS

M/s. K G Goyal & Associates, Cost Accountants have been appointed as Cost Auditor of the Company for the financial year 2012-13.

DIRECTORS

Mr T N Chaturvedi and Mr R S Bajoria having been longer in the office, retire by rotation at the ensuing annual general meeting and being eligible offer themselves for re-appointment. A brief resume of the appointees is given in the notice to the annual general meeting.

Mr P P Khanna was appointed as a whole-time director designated as executive director w.e.f. August 07, 2006 for a period of three years by the members at their 36th annual general meeting held on September 20, 2007. He was again appointed on same designation w.e.f. May 2, 2009 for a period of three years, his re-appointment was approved by the members at their 38th annual general meeting held on August 3, 2009 and accordingly his term expired on May 1, 2012. However, board of directors in their meeting held on February 09, 2012, after mutual agreement between Mr P P Khanna & the board of directors and subject to approval of the members of the company, re-appointed him for a period of three years w.e.f. May 2, 2012.

During the year Mr. R K Khanna was appointed as additional director of your Company and holds office up to ensuing annual general meeting. Notice under Section 257 of the Companies Act, 1956 has been received from a member, proposing the candidature of Mr. R K Khanna as director. Further, board of directors in their meeting held on August 11, 2012, after mutual agreement between Mr R K Khanna & the board of directors and subject to approval of the members of the company, appointed him as a whole-time director designated as President w.e.f. August 11, 2012.

Your directors recommend their appointment/re-appointment at the ensuing annual general meeting in the overall interest of the Company.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the requirement of Section 217(2AA) of the Companies Act, 1956 ("Act"), the Directors hereby confirm that

(i) in the preparation of the annual accounts for the year 2011-12, the applicable accounting standards have been followed and there are no material departures;

(ii) 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 at the end of the financial year and of the profit of the Company for the financial year;

(iii) they have taken proper and sufficient care to the best of their knowledge and ability for the maintenance of adequate accounting records in accordance with the provisions of the Act. They confirm that there are adequate systems and controls for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities

(iv) they have prepared the annual accounts on a going concern basis.

CREDIT RATING OF BANK BORROWINGS

The Company continues to have A (Single A Plus) rating on its long term borrowings by Credit Analysis & Research Ltd. (CARE). This rating indicates adequate safety and carries low credit risk.

For short term borrowings A1 (A One Plus) have been assigned by CARE. This rating indicates very strong degree of safety and carries lowest credit risk.

CODE OF CONDUCT

The Company has laid down a code of conduct for the directors and senior management personnel as specified. The code was adopted in the board meeting held on December 13, 2005. It is available on the website of the Company www.orientabrasives.com. A declaration by the managing director regarding annual affirmation of compliance of the code by all concerned is annexed to the report on corporate governance.

delisting of equity shares

Your Company has received confirmation from the Calcutta Stock Exchange Ltd. about voluntary delisting of equity shares w.e.f. December 14, 2011.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

Information relating to Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo, required to be made pursuant to Section 217 (1) (e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the report of Board of Directors) Rules, 1988, is given in Annexure-A and forms part of this report.

PARTICULARS OF EMPLOYEES

None of the employee of the Company was drawing salary in excess of the limits prescribed under Section 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975.

MANAGEMENT DISCUSSION AND ANALYSIS

Notes on Management Discussion and Analysis of the company have been given in Annexure-B and forms part of this report.

CORPORATE GOVERNANCE

A separate section on corporate governance is attached to this report as Annexure-C. A certificate from the Practicing Company Secretary regarding compliance of the conditions of corporate governance as stipulated under clause 49 of the listing agreements with stock exchanges is enclosed as Annexure-D. A certificate from the managing director that all board members and senior management personnel have affirmed compliance with the code of conduct for the year ended March 31,2012 is attached as Annexure-E. CEO/CFO certificate is enclosed as Annexure-F.

CORPORATE SOCIAL RESPONSIBILITY

The Company will in due course of time shall make efforts contribute to the society and environment by following the voluntary guidelines on Corporate Social Responsibility, 2009 and the National Voluntary Guidelines on Social, Environmental and Economic Responsibilities of Business, 2011 framed by the Ministry of Corporate affairs, in letter and spirit.

ACKNOWLEDGEMENTS

Your directors sincerely appreciate the dedication and efforts of the employees at all levels of the organisation in contributing to the success of the Company. The directors are also thankful to the investors of the Company for their confidence in the Company. They also gratefully acknowledge the continued support received from the customers, business associates, various government agencies, financial institutions and the banks.

For and on behalf of the Board

New Delhi R K Rajgarhia

August 11, 2012 Chairman


Mar 31, 2011

The Members,

Orient Abrasives Limited

The Directors have pleasure in presenting the 40th Annual Report of the company along with the Audited Statements of accounts for the year ended 31st March, 2011.

FINANCIAL RESULTS

(Rs.in lacs)

2011 2010

Gross Sales & Income 39957.71 34604.77

Profit before depreciation, Interest and tax 7939.26 8417.19

Less : Depreciation 1298.21 1080.61

Interest 697.82 456.43

Profit before Income Tax 5943.23 6880.15

Less : Income Tax 1259.72 1763.65

Net Profit for the year 4683.51 5116.50

Add : Balance brought forward from the previous year 3845.34 3123.95

Amount available for appropriation 8528.85 8240.45

Appropriation :

General Reserve 3000.00 3000.00

Dividend on Equity shares 1196.39 1196.39

Corporate Dividend Tax 198.71 198.71

Balance carried forward to Balance Sheet 4133.75 3845.35

8528.85 8240.45

INTERIM DIVIDEND

The Company paid an interim dividend @ Re. 1 per equity share, declared at the Board Meeting held on March 9, 2011.

The total cash out-flow on account of this dividend payment including distribution tax was Rs. 1395.10 lac (Previous Year Rs. 1395.10 lac)

FINAL DIVIDEND

In order to augment resources and also in view of the interim dividend having been paid, no final dividend is being recommended with respect to financial year ending on March 31, 2011, for consideration of the members at the Annual General Meeting.

OPERATIONS REVIEW AND FUTURE OUTLOOK

Turnover of the Company increased to Rs. 395.68 Cr during the year under review from Rs. 343.70 Cr in the previous year. However, gross profit and net profit declined to Rs. 59.43 Cr and Rs. 46.84 cr respectively during the year under review as compared to Rs. 68.80 Cr and Rs. 51.17 Cr respectively in the previous year. General increase in raw material costs was one of the reasons for decline in the profit. Besides, abnormal rise in fuel costs especially of furnace oil and coal reduced the margins. Increase in financial expenses on account of higher interest rates on borrowings and loss on account of foreign exchange and derivative contracts as against a gain of about Rs. 3.46 Cr last year also contributed to the decrease in profits. The Company could not absorb the increased costs by a corresponding increase in sales price. The Company could also not achieve the expected revenue from the wind farms due to delay in commissioning of the turbines.

Exports grew from Rs. 31.14 Cr to Rs. 40.80 Cr during the year under review, by developing new customers and consolidating existing markets

Both the abrasive grains division and the refractory division performed satisfactory in terms of sales. The thermal power plants at Porbander division fulfilled a major share of the power requirements of the Abrasives Grains Division. The operating cost of these power plants was higher due to a substantial rise in fuel costs

The wind farm capacity of the Company increased to 9.6 mw during the year under review. Another turbine of 1.5 mw was commissioned in June 2011 thereby making the total capacity, 11.1 mw comprising of 6 mw located in Rajasthan and 5.1 mw in Karnataka.

The financial results of the Company in the first 4 months of the current year was satisfactory. Your directors hope that the sales and profitability of the Company shall improve in the current year.

FIXED DEPOSIT

As on the date of this report there is no unclaimed fixed deposit in the Company.

DIRECTORS

Mr Rajendra Kumar Rajgarhia and Mr Umesh Kumar Khaitan having been longer in the office, retire by rotation at the Annual General Meeting and being eligible offer themselves for re-appointment. A brief resume of the appointees is given in the notice to the Annual General Meeting. Your directors recommend their re-appointment at the ensuing Annual General Meeting in the overall interest of the Company.

AUDITORS

M/s. S.R. Batliboi & Co., Auditors of the Company hold office till the conclusion of the ensuing Annual General Meeting and being eligible offer themselves for reappointment. A certificate under section 224 (1) of the Companies Act, 1956 confirming their eligibility has been obtained from them. Your Directors recommend that they be appointed by the members at the 40th Annual General Meeting.

AUDITORS REPORT

The Auditors Report read with notes to the financial statements in schedule 24 is self-explanatory and does not call for any further explanation by the Board.

PARTICULARS OF EMPLOYEES

The details of employees who drew remuneration either in whole or for a part of the year that attracts disclosure requirements as per Section 217 (2A) of the Companies Act,1956, read with the Companies (Particulars of employees) rules, 1975 as amended, is annexed and forms an integral part of this report .

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

As required under section 217 (1) (e) of the Companies Act,1956 read with the Companies (Disclosure of particulars in the report of Board of Directors) Rules, 1988, the particulars relating to conservation of energy, technology absorption and foreign exchange earnings and outgo are annexed.

DIRECTORS RESPONSIBILITY STATEMENT

In compliance of Section 217(2AA) of the Companies Act, 1956, your Directors confirm:

(i) that in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

(ii) that 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 at the end of the financial year and of the profit or loss of the company for that period;

(iii) that they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

(iv) that they have prepared the annual accounts on a going concern basis ;

AUDIT COMMITTEE

The audit committee meets at due intervals to conduct the required business. At present the committee comprises of Mr Tribhuvan Nath Chaturvedi (Chairman), Mr Rama Shanker Bajoria and Mr Umesh Kumar Khaitan, all independent directors.

DEMERGER OF REFRACTORY BUSINESS

During the year under review the Company decided to demerge its refractory undertaking situated at SP-148, RIICO Industrial Area, Bhiwadi, Rajasthan with a view to de-risk and segregate the refractory business from the other two businesses viz. abrasive grains and power generation as the economic and market factors guiding the refractory business are distinct from those applicable to the other two. The demerger will also allow a focused strategy in operations of the Refractory Undertaking alongwith providing scope for independent collaboration and expansion without committing the existing organization in its entirety. The demerger would also help in enhancing the stakeholder value with the two businesses growing independently of each other as the management can formulate separate business strategy for each considering the independent characteristics of each entity and without being affected by the constraints faced by each other.

A subsidiary Company named Orient Refractories Ltd. was incorporated on November 26, 2010 for this purpose. The demerger process is at an advanced stage. The equity shareholders, secured creditors and unsecured creditors at their respective meetings held on February 26, 2011 approved the scheme of demerger. The final petition for demerger has been filed before the Hon'ble High Court of Delhi at New Delhi and the date of hearing on the demerger is fixed for September 19, 2011.

CONSOLIDATION OF ACCOUNTS

As required under the Companies Act, 1956 and the listing agreement, the accounts of the Company has been consolidated with that of its subsidiary, Orient Refractories Ltd. as per the applicable accounting standards. Pursuant to the exemption granted by the recent circulars issued by the Ministry of Company Affairs, the financial statements, directors report and other annexure of the subsidiary company as required to be annexed to this Annual Report under Section 212 of the Companies Act, 1956 have not been annexed. The Board of Directors of the Company in its meeting held on July 30, 2011 has given consent to such not attaching the financial statements of the subsidiary Company. Previous year figures have not been given in the said accounts as the subsidiary company had not been incorporated then.

The annual accounts of the subsidiary company and the related detailed information shall be made available to shareholders of the holding and subsidiary companies seeking such information at any point of time. The annual accounts of the subsidiary companies shall also be kept for inspection by any shareholders at the registered office of the Company and the subsidiary Company. The Company shall furnish a hard copy of details of accounts of subsidiaries to any shareholder on demand.

The details in regard to the subsidiary Company required to be disclosed as per general circular no. 2/2011 dated 08/02/2011issued by the Ministry of Corporate Affairs has been given in the Consolidated annual accounts section of the this Annual Report.

PERFORMANCE OF THE SUBSIDIARY COMPANY

The subsidiary Company, Orient Refractories Limited was incorporated on November 26, 2010 for the purpose of vesting the undertaking being demerged. The said Company has not started any commercial operations. Once the scheme of demerger is approved by the Hon'ble High Court, the refractory business of the Company shall be demerged into this Company w.e.f. April 1, 2011, being the appointed date.

Therefore during the year under report, there was no commercial activity by the subsidiary Company to be commented upon.

CREDIT RATING OF BANK BORROWINGS

The Company has been assigned A rating on its long term borrowings by both CRISIL and CARE. This rating indicates adequate safety and carry low credit risk.

For short term borrowings P1 and PR1 have been assigned by both CRISIL and CARE respectively which is the highest given by these agencies for such facilities and carry lowest credit risk.

CORPORATE GOVERNANCE

The Report on Corporate Governance has been annexed to this Directors' Report. The Company has obtained a certificate by a firm of practising company secretaries regarding compliance of various requirements of corporate governance.

CODE OF CONDUCT

The Company has laid down a Code of Conduct for the Directors and Senior Management Personnel as specified. The Code was adopted in the Board Meeting held on December 13, 2005. It is available on the website of the Company www.orientabrasives.com. A declaration by the Managing Director regarding annual affirmation of compliance of the Code by all concerned is annexed to the Report on Corporate Governance.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Management Discussion and Analysis Report on matters relating to business performance of the Company has been annexed to this Directors' Report.

VOLUNTARY GUIDELINES ON CORPORATE GOVERNANCE

The Company will endeavour to follow the Voluntary Guidelines on Corporate Governance, 2009 issued by the Ministry of Corporate Affairs in due course. Efforts are being to bring the same into practice wherever possible.

CORPORATE SOCIAL RESPONSIBILITY

The Company will in due course of time shall make efforts contribute to the society and environment by following the voluntary guidelines on Corporate Social Responsibility, 2009 and the National Voluntary Guidelines on Social, Environmental and Economic Responsibilities of Business, 2011 framed by the Ministry of Corporate affairs, in letter and spirit.

GREEN INTIATIVE BY THE CENTRAL GOVERNMENT

Pursuant to the "Green Initiative in Corporate Governance" taken by the Ministry of Corporate affairs by allowing paperless compliances by Companies through electronic mode, the Company proposes to send various notices and documents, including Annual Report, to its shareholders through electronic mode to the registered e- mail addresses of shareholders.

This move by the Ministry is welcome since it will benefit the society at large through reduction in paper consumption and contribution towards a Greener Environment. It will also ensure prompt receipt of communication and avoid loss in postal transit. Necessary communication has already been sent to all the shareholders whose e-mail ids are registered with the Company. The Annual report is being sent to those who have opted for electronic mode, in such mode only. Your Board of directors urges all the shareholders to communicate their e-mail ids to the Company and allow paperless communication.

ACKNOWLEDGEMENT

Your Directors sincerely appreciate the dedication and efforts of the employees at all levels of the organisation in contributing to the success of the Company. The Directors are also thankful to the investors of the Company for their confidence in the Company. They also gratefully acknowledge the continued support received from the customers, business associates, various government agencies, financial institutions and the banks.

For and on behalf of the Board of Directors

New Delhi R K Rajgarhia

July 30, 2011 Chairman











 
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