Mar 31, 2023
The Directors are pleased to present herewith the 52nd Annual Report of the Company along with the Audited Financial Statements for the year ended 31st March, 2023.
1) FINANCIAL PERFORMANCE: (Rs. In Lakhs) |
||||
Particulars |
Standalone |
Consolidated |
||
2022-2023 |
2021-2022 |
2022-2023 |
2021-2022 |
|
Revenue from Operations |
28384.93 |
25877.80 |
30220.74 |
26754.63 |
Less: Total expenditure before Finance Cost and Depreciation |
26438.78 |
24344.25 |
27653.40 |
25087.31 |
Operating Profit |
1946.15 |
1533.55 |
2567.34 |
1667.32 |
Add: Other Income |
946.71 |
647.90 |
787.70 |
590.34 |
Profit / (Loss) before Finance Cost, Depreciation, Exceptional items and Taxes |
2892.86 |
2181.45 |
3355.04 |
2257.66 |
Less: Finance Costs |
351.49 |
243.75 |
352.01 |
243.90 |
Less: Depreciation |
951.89 |
1045.80 |
1192.39 |
1143.31 |
Less: Exceptional items |
- |
- |
- |
- |
Profit / (Loss) before Tax |
1589.48 |
891.90 |
1810.64 |
870.45 |
Provision for Taxation: |
||||
Current Tax |
347.79 |
149.00 |
347.79 |
149.00 |
Earlier years'' Tax |
(103.94) |
14.44 |
(103.94) |
14.44 |
MAT Credit entitlement |
137.27 |
(25.47) |
137.27 |
(25.47) |
Deferred Tax |
(54.31) |
51.90 |
8.16 |
46.38 |
Profit / (Loss) after Tax |
1262.67 |
702.03 |
1421.36 |
686.10 |
Other Comprehensive Income (net of tax) |
33.57 |
27.20 |
37.12 |
27.74 |
Total Comprehensive Income after Tax |
1296.23 |
729.22 |
1458.48 |
713.84 |
2) COMPANY''S PERFORMANCE AND OPERATIONS:
The Company''s performance improved during the under review. The revenue for the year ended 31st March, 2023 stood at Rs. 28,384.93 Lakhs as against Rs. 25,877.80 Lakhs in the previous year. The rise in revenue is mostly attributable to the partial commencement of activities at the Porbandar Plant as well as change in product mix . The total income from operation (including other income) grew by 10.58% and stood at Rs 29,331.64 Lakhs as against Rs 26,525.70 Lakhs in FY 2021-2022. Consequently, Net Profit after Tax increased by 79.86% and stood at Rs.1,262.65 Lakhs as against Rs. 702.03 Lakhs in the previous year ended 31st March, 2022.
The Company reported decline in export sales which stood at Rs. 6,096.23 Lakhs as against Rs. 6,289.61 Lakhs in the previous year ended 31 stMarch, 2022 due to decrease in consumption trend across the globe on account of inflationary pressures.
On consolidated basis, total income from operation (including other income) grew by 13.4% and stood at Rs 31,008.44 Lakhs as against Rs 27,344.97 Lakhs in FY 2021-2022. Consequently, Net Profit after Tax increased by 107.2% and stood at Rs.1,421.36 Lakhs as against Rs. 686.10 Lakhs in the previous year ended 31st March, 2022.
Your Company also runs wind power plants of 11.1 Mega Watt (M.W.) in Rajasthan and Karnataka, which are operating satisfactorily. During the year under review, the gross revenue from the sale of power stood at Rs. 690.71 Lakhs as compared to Rs. 708.62 Lakhs in the previous year ended 31st March, 2022. The Company is also deliberating on measures required to be taken for further improvement.
Your Company has a power plant capacity of 18 M.W. out of which 9 M.W. is coal based whereas 9 M.W. is based on furnace oil. Due to high fuel costs and high per unit cost of power due to partial operations at the Porbandar plant, the power plant is operated on need basis.
The increase in the turnover and profit, at standalone and consolidated level, is attributable to resumption of Porbandar Plant and better performance ofthe subsidiary.
With respect to the operations of the Company''s Plant at Porbandar, the Hon''ble Industrial Tribunal, Jamnagar, vide its order dated 15th September, 2022, approved the application filed by the Company for closing down the unit producing the Bauxite based products since 30-09-2021 for want of availability of the specialized grade Bauxite, which is the main raw material for production of brown fused alumina and calcined bauxite. However, the order does not affect the other running units which produce non-bauxite-based fused products at the same location.
The Company also deals in the business of Chamotte product, which is mainly used as raw material in the refractory industry. The Company had signed a Memorandum of Understanding (MOU) with Ashapura Minechem Limited, Associate Company of the Company for manufacturing of Chamotte on job-work basis. Since the Company has a sizable customer base for Refractory products, the Company receives and processes the customer orders for Chamotte. Therefore, subsequent to the year under review, in order to eliminate the job work process and its associated costs, the Company purchased the Chamotte Plant / Unit located at Baraya, Gujarat, along with its associated Land & Building from Ashapura Minechem Limited enabling the Company to manufacture directly and to drive the entire value chain of Chamotte products through the Company.
During the year under review, there was no change in the nature of business ofthe Company.
3) CHANGE OF NAME OF THE COMPANY
The Company manufactures and distributes specialty value-added ceramic goods like ceramic proppants for the oil and gas industry as well as ceramic solutions for the abrasives and refractory industries. The Company also caters to several industries beyond the Abrasives Segment. Further, the Company also has plans to consolidate its position in the field of advanced technology-based ceramics.
Hence, in order to align the name of the Company with its business activities, the Company, subsequent to the year under review, changed its name from Orient Abrasives Limited to Orient Ceratech Limited. The word âCeratechâ accurately reflects the business ofthe Company and conveys the essence ofthe Company''s operations and future vision and aspirations.
The aforementioned business was conducted via postal ballot. On May 17, 2023, the Shareholders approved the name. Subsequently, the ROC approved the name and issued âThe Certificate of Incorporation pursuant to change of name" on May 26, 2023.
To reflect the change of name in the regulatory authorities'' records, the essential steps have been taken.
Considering the Company''s improved financial performance and the dividend history, your Directors are pleased to recommend a dividend @ 25 % per share on the face value of Re.1/- each viz. Re.0.25/- per Equity Share for the Financial Year ended 31st March, 2023. Payment of dividend is subject to the approval of the shareholders at the ensuing Annual General Meeting. The Dividend will be paid out ofthe profits for the year.
The Dividend if declared will involve a total outflow of Rs. 299.10 Lakhs which will be subject to deduction of tax at source as applicable and shall be payable during Financial Year 2023-24.
The Company has not proposed to transfer any amount to General Reserve.
During the Financial Year 2022-2023, there was no change in the authorized, issued, subscribed and paid-up share capital of the Company. As on 31st March, 2023, the Company is having authorized share capital of Rs. 18,00,00,000/- (Rupees Eighteen Crores only) consisting of 14,00,00,000 (Fourteen Crores) Equity Shares of Re. 1/- each and 4,00,000 (Four Lakhs) 6% Redeemable Cumulative Preference Shares of Rs. 100/- each.
The issued, subscribed and paid-up equity share capital of the Company remains unchanged. The break-up of issued, subscribed and paid-up equity share capital is provided in Note No 14 of Financial Statements.
During the year under review, the Company has not issued shares with differential rights as to dividend, voting or otherwise or bought back any of its securities. The Company has not issued any sweat equity/bonus shares/employee stock option plan, under any scheme.
7) TRANSFER TO THE INVESTOR EDUCATION AND PROTECTION FUND (IEPF):
Pursuant to the provisions of Section 124(5) of the Companies Act, 2013 (âthe Actâ), your Company has transferred Rs. 11,34,100.50/- during the year to the Investor Education and Protection Fund (IEPF). This amount was lying as unclaimed/ unpaid with the Company for a period of 7 (Seven) years after the declaration of Final Dividend for the Financial Year ended 2014-15.
Further, as required under Section 124 of the Act, 34,393 equity shares, in respect of which dividend has not been paid or claimed by the shareholders for seven consecutive years or more, have been transferred by the Company to IEPF during the Financial Year under review. Details of shares transferred have been uploaded on the website of IEPF as well as the Company at www.orientceratech.com as on 31st March, 2023 a total of 36,55,898 Equity Shares of the Company were lying in the Demat A/c of the IEPF Authority.
The shareholders have an option to claim their shares and / or amount of dividend transferred to IEPF, in the prescribed form available on www.iepf.gov.in . No claim shall be entertained against the Company for the amounts and shares so transferred.
The Company has initiated necessary action for transfer of shares in respect of which dividend has not been paid or claimed by the members consecutively since FY 2015-16.
The voting rights on shares transferred to the IEPF Authority shall remain frozen until the rightful owner claims the shares. Any further dividend received on such shares shall be credited to the IEPF Fund.
During the year under review, your Company has not accepted any deposits within the meaning of provisions of Chapter V -Acceptance of Deposits by Companies ofthe Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014.
9) SUBSIDIARIES / JOINT VENTURES / ASSOCIATE COMPANY:
As on date, the Company has two subsidiaries (i) Orient Advanced Materials Private Limited (OAMPL) (ii) Orient Advanced Materials FZE (OAMFZE).
During the financial year under review, Orient Advanced Materials Private Limited performed outstandingly and increased its revenue by 325% and stood at Rs. 4,348.24 Lakhs as compared to the previous year and reported a net profit after tax of Rs. 170.82 Lakhs as against the net loss of Rs. (15.93) Lakhs in the previous year.
Subsequent to the year under review, in order to meet the financial requirement of OAMPL, the Company invested further capital of Rs. 5,00,00,000/- (Rupees Five Crores Only) on 26th May, 2023. OAMPL issued and allotted 50,000 Equity Shares of Rs. 10 each at a premium of Rs. 990/-each to the Company.
Further, in order to expand its business globally, the Company formed and incorporated one wholly owned subsidiary named Orient Advanced Materials FZE in Hamriyah Free Zones, UAE. The Company invested AED 35000. OAMFZE issued and allotted 35 shares of AED 1000/- each. The said WOS is yet to commence its business.
10) MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY WHICH HAVE OCCURRED BETWEEN 31st MARCH, 2023 AND 3rd AUGUST, 2023:
Except as mentioned herein above, there have been no reportable material changes and commitments affecting the financial position of the Company which have occurred between the end of the Financial Year of the Company to which the financial statements relate and the date of this report.
11) CONSOLIDATED FINANCIAL STATEMENTS:
Pursuant to the provisions of Section 129(3) of the Companies Act, 2013, the Consolidated Financial Statements of the Company and its subsidiary, have been prepared in accordance with the Indian Accounting Standards, which forms part of this Annual Report. Further, pursuant to the provisions of the said section, a statement containing salient features of the Financial Statements ofthe Company''s subsidiary (in Form AOC - 1) is given in this Annual Report.
In accordance with Section 136 of the Companies Act, 2013, the Audited Financial Statements including Consolidated Financial Statements and all other documents required to be attached to this Report and Financial Statements of subsidiary, have been uploaded on the website ofthe Company at www.orientceratech.com.
12) SIGNIFICANT AND MATERIAL ORDERS BY THE REGULATORS:
During the year under review, no significant material orders were passed by the Regulators or Courts or Tribunals impacting the going concern status and the Company''s operations save and except as mentioned herein above.
13) CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSION AND ANALYSIS REPORT:
A report on ''Corporate Governance'' along with the Certificate from M/s. Sanghavi & Co., Chartered Accountants regarding its compliance and ''Management Discussion and Analysis Report'' as stipulated by Regulation 34 of the Listing Regulations are set out separately which form part of this Annual Report.
14) DIRECTOR''S RESPONSIBILITY STATEMENT:
In pursuance of Section 134(5) ofthe Companies Act, 2013, the Directors hereby confirm that:
(a) in the preparation of the annual accounts, the applicable Accounting Standards have been followed along with proper explanation relating to material departures;
(b) the Directors had 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 ofthe PROFIT ofthe Company for that period;
(c) the Directors had 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;
(d) the Directors have prepared the annual accounts on a going concern basis;
(e) the Directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively and
(f) the directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
15) DIRECTORS AND KEY MANAGERIAL PERSONNEL:
The composition ofthe Board of Directors ofthe Company as on 31st March, 2023 is as below.
Sr. No. |
Name of Director |
Designation |
DIN |
1 |
Mr. Harish Motiwalla |
Non-Executive, Independent Director (Chairman) |
00029835 |
2 |
Mr. Manubhai Rathod* |
Whole-Time Director & Chief Executive Officer (CEO) |
07618837 |
3 |
Mr. Hemul Shah |
Non-Executive, Non-Independent Director |
00058558 |
4 |
Ms. Chaitali Salot |
Non-Executive, Non-Independent Director |
02036868 |
5 |
Mr. Ketan Shrimankar |
Non-Executive, Independent Director |
00452468 |
6 |
Mrs. Neeta Shah |
Non-Executive, Independent Director |
07134947 |
*w.e.f. 3 rd August, 2023, the designation of Mr. Manubhai Rathod changed from Whole-Time Director & CEO to Whole-Time Director (Operations).
In accordance with the provisions of Section 152 of Companies Act, 2013, read with the Companies (Appointment and Qualification of Directors) Rules, 2014 and the Articles of Association of your Company, Mr. Manubhai Rathod, Whole-Time Director (Operations) retires by rotation at the ensuing Annual General Meeting and being eligible has offered himself for re-appointment.
The details as required under the provisions of Companies Act, 2013 and Listing Regulations are provided in the Notice convening the ensuing Annual General Meeting.
b) Appointment / Re-appointment of Directors:i) Re-appointment of Mr. Harish Motiwalla, Non-Executive, Independent Director
Based on the recommendations of the Board of Directors and Nomination & Remuneration Committee and considering the specialised knowledge of Mr. Harish Motiwallla (DIN: 00029835) in the field of Accounts, Finance and Corporate Governance, the shareholder of the Company at 51st Annual General Meeting had approved his re-appointment as NonExecutive, Independent Director of the Company for a second term of 5 years commenced from 12th February, 2023 to H^February, 2028.
ii) Appointment of Mr. Manan Shah as Managing Director:
Subsequent to the year under review, the Board of Directors appointed Mr. Manan Shah (President of the Company) as Manging Director w.e.f. April 12, 2023 for a period of three years. His appointment was duly approved by the shareholders by way ofpostal ballot on 17th May, 2023.
Mr. Manubhai Rathod, Whole Time Director & CEO, Mr. Vikash Khemka, Chief Financial Officer, and Mrs. Seema Sharma, Company Secretary & Compliance Officer, continued to be recognized as the Key Managerial Personnel (KMP) of the Company during the year under review in accordance with the provisions of Sections 2(51) and 203 of the Companies Act, 2013.
The Board also recognized Mr. Manan Shah, President, as a KMP ofthe Company.
Subsequent to Mr. Manan Shahâs appointment as Managing Director w.e.f. April 12, 2023, he ceased as president of the Company from the said date.
Pursuant to Section 134(3) (q) read with Rule 5 of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Remuneration and other details of Key Managerial Personnel and other employees for the year ended 31st March, 2023 are annexed to this Report.
d) Declaration by Independent Directors:
The following Non-Executive Directors are Independent Directors in terms of the provisions of Section 149(6) of Companies Act, 2013 read with the provisions of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (hereinafter referred to as âListing Regulationsâ).
a) Mr. Harish Motiwalla
b) Mrs. Neeta Shah
c) Mr. Ketan Shrimankar
The said Independent Directors are not liable to retire by rotation. The Company has received declarations from all the Independent Directors confirming that:- they meet the criteria of independence as prescribed under Section 149(6) of Companies Act, 2013 and Regulation 16(1)(b) of the Listing Regulations and are independent from the management and there has been no change in the circumstances which may affect their status as Independent Director during the year.
- they have registered their names in the Independent Directors'' Databank.
e) Board''s Opinion Regarding Integrity, Expertise and Experience (Including the proficiency) of the Independent Directors appointed:
The Board is of the opinion that the Independent Directors appointed during the year under review are person(s) of integrity and possess core skills/expertise/competencies (including the proficiency) as identified by the Board of Directors as required in the context of Company''s business(es) and sector(s) for the Company to function effectively.
f) Familiarization Programme of Independent Directors:
Refer point No. 2(f) ( c) on Familarization Programme in Report on Corporate Governance.
The Board of Directors adopted the performance evaluation policy with an objective of evaluating the performance of the each and every Director of the Board, its various Committees and performance of the Board as a whole, which would contribute significantly to performance improvements at all the three levels i.e. the organizational, the Board and the individual director level, which in turn would help in increasing accountability, better decision making, enhanced communication and more efficient Board operations.
Accordingly, pursuant to the provisions of Companies Act, 2013, Listing Regulations and Performance Evaluation Policy of the Company, the Board of Directors, in consultation with the Nomination & Remuneration Committee and Independent Directors, carried out & analysed the annual performance evaluation of all the Directors, the Board as a whole and its Committees.
The annual performance evaluation was carried out based on detailed questionnaires drafted in accordance with the guidance note issued by SEBI. The performance of the individual Directors was evaluated after seeking inputs from all the Directors other than the one who is being evaluated. The evaluation was based on the criteria such as Director''s knowledge and understanding of their role, Company''s vision and mission, Director''s Commitment, qualification, skill and experience, assertiveness in communication, etc.
The performance of the Board was evaluated on the basis of various criteria such as composition of the Board, information flow to the board, matters addressed in the meeting, strategic issues, roles and functions of the Board, relationship with the management, engagement with the Board and external stakeholders and other development areas.
The performance of the Committees was evaluated after seeking the inputs of committee members on the criteria such as understanding the terms ofreference, Committee composition, Independence, contributions to Board decisions etc.
Further, the performance of Chairman & Executive Director were evaluated on certain additional parameters depending upon their roles and responsibilities such as leadership, relationship with stakeholders, execution of business plans, risk management, development of plans and policies in alignment with the vision and mission ofthe Company, etc.
Similarly, criteria for evaluation of Independent Directors include effective deployment of knowledge and expertise, willingness to devote time and efforts towards his/her role, high ethical standards, adherence to applicable codes and policies, effective participation, etc.
During the year, the Independent Directors had met separately and discussed, inter-alia, the performance of Non-Executive Chairman, Whole-Time Director & Chief Executive Officer of the Company and the Board as a whole. The Nomination and Remuneration Committee has also carried out evaluation of every Director''s performance.
The Board evaluation report on performance of each individual Director and the Board as a whole was placed before the Board of Directors for appropriate analysis and confirmation.
Based on the annual performance evaluation, the Board expressed its satisfaction with the performance evaluation process.
The composition of committees constituted by the Board along with changes, if any, forms part of the Corporate Governance Report, which is a part of Annual Report.
18) NOMINATION & REMUNERATION POLICY:
Pursuant to the provisions of Companies Act, 2013 and Listing Regulations, the Board of Directors, based on the recommendations of the Nomination & Remuneration Committee, adopted a Policy for selection and appointment of Directors, Key Managerial Personnel & Senior Management and for determining their remuneration, qualifications, positive attributes and independence of Directors. The policy also ensures that the relationship of remuneration to performance is clear so as to meet appropriate performance benchmark.
The Policy on Nomination & Remuneration is available on the website of the Company viz. www.orientceratech.com.The details about the Nomination & Remuneration Committee and payment of remuneration to the Directors are provided in the Report on Corporate Governance which forms part ofthis Annual Report.
19) PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES:
The information required under Section 197 of the Companies Act, 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of Directors/ employees of the Company is set out in âAnnexure Aâ to this Report.
During the year under review, the Board of Directors met 5 (five) times. The intervening gap between the meetings was within the period prescribed under the Companies Act, 2013, as amended from time to time and the Listing Regulations. The dates of the meetings along with the attendance of the Directors therein have been disclosed in the Corporate Governance Report.
The Company has an Audit Committee of the Board of Directors in place. The terms of reference of the Audit Committee are in line with Section 177 of the Companies Act, 2013 read with the Companies (Meetings of Board and its Powers) Rules, 2014 and Regulation 18 of the Listing Regulations. Detailed information pertaining to the Audit Committee including its composition has been provided in the Corporate Governance Report, which forms part ofthis Annual Report.
22) AUDITORS AND AUDITORS'' REPORT:(i) Statutory Auditors:
Pursuant to the provisions of Section 139 of the Companies Act, 2013, read with the Companies (Audit and Auditors) Rules, 2014, M/s. Sanghavi & Co., Chartered Accountants (FRN: 109099W), were re-appointed as Statutory Auditors of the Company for a second term for a period of five years w.e.f. conclusion of 51st Annual General Meeting till the conclusion of 56th Annual General Meeting to be held in the year 2027.
The Auditorsâ Report for the financial year ended March 31, 2023 on the Financial Statements (Standalone and Consolidated) of the Company forms part of this Annual Report.
Further, the Auditor''s Report for the Financial Year ended 31st March, 2023 does not contain any qualification, reservation or adverse remark.
Pursuant to Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Rules, 2014, as amended from time to time, the Board of Directors has, on recommendation of the Audit Committee, appointed M/s. Priyank Vyas & Associates, Cost Accountants, as the Cost Auditors of the Company to conduct audit of the Company''s Cost Accounting Records in respect of the products of the Company for the Financial Year 2023-2024 the remuneration of Rs. 1,70,000/- (Rupees One Lakh Seventy Thousand Only) per annum plus Goods & Service Tax (GST).
Your Company has received consent from M/s Priyank Vyas & Associates, to act as the Cost Auditors of your Company for the financial year 2023-2024 along with a certificate confirming their independence. As per the provisions of the Companies Act, 2013, a resolution seeking approval of the Members for the remuneration payable to the Cost Auditors forms part of the Notice convening Annual General Meeting.
The Company has maintained the cost accounts and records in accordance with Section 148 of the Companies Act, 2013 and Rules framed thereunder. The Cost Audit Report for the Financial Year 2021-2022 was filed with the Ministry of Corporate Affairs on 6thSeptember, 2022.
Pursuant to the provisions of Section 204 of the Companies Act, 2013 read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company had appointed Ms. Dipti Gohil, Practicing Company Secretary to undertake the Secretarial Audit ofthe Company for the Financial Year ended 31st March, 2023.
The Secretarial Audit Report in Form MR-3 is annexed herewith as âAnnexure Bâ.
Secretarial Auditor''s observations:
Further, the Secretarial Audit Report for the Financial Year ended 31st March, 2023 does not contain any qualification, reservation or adverse remark.
23) INTERNAL CONTROL SYSTEM & THIER ADEQUACY:
The Company has an adequate Internal Control System commensurate with the size, scale and nature of its operations. The Audit Committee reviews the adequacy and effectiveness of Internal Control System.
The Company appointed M/s. Atul HMV & Associates LLP, Chartered Accountants, as its Internal Auditors for Financial Year 2022-2023 which carries out the periodic audit as per the Scope of Work approved by the Audit Committee. The Audit Committee of the Board of Directors of the Company periodically reviews the Internal Audit Reports submitted by the Internal Auditors. Internal Audit observations and corrective action taken by the Management are presented to the Audit Committee. The status of implementation of the recommendations are reviewed by the Audit Committee on a regular basis and concerns, if any, are reported to the Board. The Company is taking due action to ensure that the Internal Control is strengthened in all the areas of operations.
Besides this, the Company is using ''SAP'' Systems, an advanced IT business solution platform, to achieve standardized operations that ensures seamless data and information flow. This would further ensure ease in working environment & style and shall enable the Company to be in line with the best global practices.
24) CORPORATE SOCIAL RESPONSIBILITY:
Your Company embraces responsibility for impact of its operations and actions on all stakeholders including society and community at large. As per requirements of the Companies Act, 2013, the Company had duly constituted Corporate Social Responsibility Committee. The brief outline of the Corporate Social Responsibility (CSR) policy of the Company and the
initiative undertaken by the Company on CSR activities during the year are set out in âAnnexure Câ of this report in the format prescribed in the Companies (Corporate Social Responsibility Policy) Rules, 2014. The details of composition of CSR Committee etc. are provided under the Corporate Governance Report.
During the year under review, the Statutory Auditors have not reported any instances of frauds committed in the Company by its Officers or Employees, to the Audit Committee / Central Government under Section 143(12) of the Companies Act, 2013, read with Rule 13 ofthe Companies (Audit and Auditors) Rules, 2014.
26) VIGIL MECHANISM- WHISTLE BLOWER POLICY:
The Company has vigil mechanism named as Whistle Blower Policy, in compliance with the provisions of Section 177 ofthe Companies Act, 2013 and Listing Regulations, wherein the employees/directors can report the instances of unethical behavior, actual or suspected fraud, mismanagement or any violation of the Code of Conduct and/or laws applicable to the Company and seek redressal. This mechanism provides appropriate protection to a genuine Whistle.
The said Policy is available on the website of the Company viz. www.orientceratech.com. During the year under review, no compliant has been received under the Whistle Blower Policy (Vigil Mechanism).
Your Company recognizes that risk is an integral part of business and is committed to managing the risks in a proactive and efficient manner. In line with corporate best practices, the Company assesses the risks in the internal and external environment which will monitor, evaluate and execute all mitigation actions in this regards and takes all measures necessary to effectively deal with incidences of risk. Adequate risk management framework capable of addressing the risks is in place.
28) RELATED PARTY TRANSACTIONS:
All contracts/arrangements/transactions entered by the Company during the Financial Year under review with the Related Parties were in the ordinary course of business and on an arm''s length basis. During the year, the Company had entered into contract/arrangement/transaction with the Related Parties which are considered as material in accordance with the Company''s Policy on Related Party Transactions. The disclosure in Form AOC-2 is enclosed in âAnnexure Dâ.
The Company places all Related Party Transactions before the Audit Committee and also before the Board of Directors for approval on quarterly basis. The omnibus approval was obtained from the Audit Committee in respect of transactions which are repetitive in nature in accordance with the Company''s Policy on Related Party Transactions. The Audit Committee also reviewed the details of such Related Party Transactions entered into by the Company pursuant to each ofthe omnibus approval given on a quarterly basis.
The Policy on Related Party Transactions as approved by the Board of Directors of the Company is available on the website of the Company viz. www.orientceratech.com.
Your Directors draw attention of the members to Note nos. 38 & 38A to the financial statements which sets out related party disclosures.
29) PARTICULARS OF LOANS GIVEN, INVESTMENTS MADE, GUARANTEES GIVEN AND SECURITIES PROVIDED:
Particulars of loans given, investments made, guarantees given and securities provided in accordance with the provision of Section 186 ofthe Companies Act, 2013, are given in the notes to financial statements (please refer note No. 5 & 6)
30) COMPLIANCE WITH SECRETARIAL STANDARDS
The Company has complied with the Secretarial Standards issued by the Institute of Company Secretaries of India on:
1. Meetings ofthe Board of Directors
2. General Meetings
3. Reports of the Board of Directors
31) CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:
The particulars relating to conservation of energy, technology absorption, foreign exchange earnings and outgo, as required to be disclosed under the Companies Act, 2013, are provided in âAnnexure Eâ to this Report.
In accordance with the provisions of section 92(3) of the Companies Act, 2013, the copy of Annual Return of the Company is available on its website www.orientceratech.com.
33) PENDING APPLICATION OR PROCEEDING UNDER THE INSOVENCY AND BANKRUPTCY CODE, 2016:
There is no application made or proceeding pending under the Insolvency and Bankruptcy Code, 2016 during the year against the Company as at the end ofthe financial year.
34) DETAILS OF SETTELEMENT WITH THE BANKS OR FINANCIAL INSTITUTION:
There is no one time settlement with the Banks or Financial Institutions for the FY 2022-2023.
35) PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE:
The Company has zero tolerance for sexual harassment of women at workplace and has adopted a Policy for prevention, prohibition and redressal of sexual harassment at workplace, in terms of provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the rules framed thereunder. An Internal Complaint Committee (ICC) has been constituted for safe working environment where all employees treat each other with courtesy, dignity and respect, irrespective of their gender, race, caste, creed, religion, place of origin, sexual orientation, disability, economic status or position in the hierarchy.
The ICC which has been constituted as per the policy in this regard, provides a forum to employees to lodge Complaints, if any, therewith for appropriate redressal.
During the year, no complaint was lodged with the ICC nor any such instance was reported and the management is happy to take the same on record. The said Policy is available on the website ofthe Company viz. www.orientceratech.com.
Your Directors wish to express their appreciation for the assistance and co-operation received from the financial institutions, banks, employees, investors, customers, government & government agencies, shareholders and all other business associates for the continuous support given by them to the Company and their confidence in its management during the year under review and look forward for their contributed support in future.
Mar 31, 2018
DIRECTORSâ REPORT
To
The Members,
The Directors have pleasure in presenting the Forty Seventh Annual Report of the Company together with the Annual Statements of Accounts for the year ended 31st March, 2018.
FINANCIAL PERFORMANCE:
(H In Lakhs)
PARTICULARS |
2017-2018 |
2016-2017 |
Profit/(Loss) before Interest, Depreciation and Tax |
3,499.21 |
2192.01 |
Interest |
612.64 |
451.89 |
Depreciation |
953.56 |
796.77 |
Profit / (Loss) before Tax |
1,933.01 |
943.44 |
Provision for Taxation: |
||
Current |
233.78 |
242.34 |
Earlier years'' Tax |
- |
- |
Deferred Tax |
- |
- |
Profit / (Loss) after Tax |
1,699.23 |
697.53 |
Prior Period Adjustments |
- |
|
Items not be reclassified to profit and loss |
(3.26) |
(3.57) |
Total Comprehensive Income After Tax |
1,695.97 |
697.53 |
Balance brought forward from the previous year |
8,123.39 |
7,782.28 |
Balance Carried to Balance Sheet |
9,462.63 |
8,123.39 |
COMPANY PERFORMANCE AND OPERATIONS:
Financial Year 2017-2018 witnessed challenges in capacity utilization, majorly on account of competition from Chinese suppliers, weak global demand and volatile exchange rates in Indian Economy. Your Company supplies products to refractory and abrasive industry wherein it was observed that refractory industry has faced various challenges due to major impact on steel industry.
In spite of that, the Companyâs revenue from operations for the year ended 31st March, 2018, increased by approx. 34% and stood at Rs 32,737 Lakhs as against Rs. 24,279.25 Lakhs in previous year, the increase in turnover was mainly attributable to robust and innovative marketing approach by the management. Further, the Company reported a robust growth in Export sales during the year under review and stood at Rs. 4,553.96 Lakhs as against Rs. 330.25 Lakhs for the previous year ended 31st March, 2017. The Company achieved a significant growth in the Net Profit after Tax of Rs. 1,695.97 Lakhs as against Rs.697.53 lakhs for the previous FY 2016-17.
Your Company also runs wind power plants of 11.1 M.W. in Rajasthan and Karnataka. Both the plants in Karnataka and Rajasthan are operating satisfactorily. However, the generation of power has reduced to some extent as compared to that of the previous year. During the year, the gross revenue from sale of power to respective state power distribution companies stood at Rs. 754.60 Lakhs as compared to Rs. 808.72 Lakhs in previous year showing moderate reduction in performance on power count. However, your Company is taking control of the situation and deliberating on measures required to be taken for improvement on this count as well.
Your Company has a power plant capacity of 18 Mega Watt (M.W.) out of which 9.6 M.W. is coal based whereas 9.0 M.W. is on furnace oil. Due to unaffordable price of furnace oil, the furnace oil based power plant is used as and when required.
The management is getting accustomed to state of affairs of your Company, hence in time to come your management is of the view that the performance of the Company shall improve. Your Company envisages better performance for the Financial Year 2018-19, considering the positive changes in the economy at the domestic and global levels. Further to increase in potential demand, your Company has invested in expansion for increased capacity and modernization of the plant resulting in better operational efficiency in order to reduce the cost at various levels.
DIVIDEND:
Your Directors are pleased to recommend dividend @ 25 % per share, on the face value of Rs.1/- each viz. Re.0.25/- per Equity Share for the financial year ended 31st March, 2018. Payment of dividend is subject to the approval of the shareholders at the ensuing Annual General Meeting.
The Dividend, if declared will involve total outflow of Rs. 359.99 Lakhs wherein Rs. 299.10 Lakhs will be towards dividend and Rs. 69.89 Lakhs towards dividend tax.
The company has not proposed to transfer any amount to General Reserves.
INCREASE IN AUTHORISED SHARE CAPITAL:
During the year under review, the Authorized Share Capital of the Company has been increased from Rs. 16,00,00,000/- (Rupees Sixteen Crores only) [consisting of 12,00,00,000 (Twelve Crores) Equity Shares of Re. 1/- each and 4,00,000 (Four Lakhs) 6% Redeemable cumulative preference Rs. 100/- each], to Rs. 18,00,00,000/- (Rupees Eighteen Crores only) [consisting of 14,00,00,000 (Fourteen Crores Only) Equity Shares of Re. 1/- each and 4,00,000 (Four Lakhs) 6% Redeemable Cumulative Preference Shares of Rs. 100/- each] through Postal Ballot Process duly completed on 1941 January, 2018.
PREFERENTIAL ALLOTMENT OF WARRANTS:
Pursuant to the resolution passed by the shareholders of the Company through Postal Ballot process on 19*1January, 2018, the Committee of Directors allotted 62,96,800 convertible warrants of the face value of Rs.1/- each to warrant holder Viz. Mr. Manan Shah, a Promoter Group Member for which the Company received consideration of 25% of the exercise price i.e. Rs. 51.31/- at the time of subscription. The Warrants are convertible into one or more tranches within a period 18 months from the date of allotment i.e. 2nd February, 2018, in event that warrants are not convertible within the 18 months of allotment, the consideration paid shall be forfeited.
TRANSFER TO THE INVESTOR EDUCATION AND PROTECTION FUND (IEPF):
Pursuant to the applicable provisions of the Companies Act, 2013, read with the IEPF Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 (âthe Rulesâ) all unpaid or unclaimed dividends are required to be transferred by the Company to the IEPF established by the Government of India, after the completion of seven years. Further, according to the Rules, the shares on which dividend has not been paid or claimed by the shareholders for seven consecutive years or more shall also be transferred to the demat account of the IEPF Authority. Accordingly, your Company has transferred the unclaimed and unpaid dividends of Rs. 28,35,893/- & Rs. 30,06,886/- for the financial years 2009-2010 and 2010-2011 respectively. Further, 2,43,627 & 27,067 equity shares for the corresponding years were transferred to IEPF Authority as per the requirements of IEPF rules. The details are provided on the website of the Company at www.orientabraisves.com.
INDIAN ACCOUNTING STANDARDS (IND AS):
Pursuant to the provisions of Companies (Indian Accounting Standards) Rules, 2015, the Indian Accounting Standards (Ind AS) has been adopted and implemented in the Company w.e.f. 1st April, 2017. Accordingly, the Company has prepared the âInd ASâ compliant Financial Statements for the Financial Year 2017-2018.
DEPOSITS:
During the year under review, your Company did not accept any deposits within the meaning of provisions of Chapter V - Acceptance of Deposits by Companies of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014.
SUBSIDIARIES/JOINT VENTURES/ASSOCIATE COMPANY:
The Company does not have Subsidiary/Joint Venture or Associate Company.
MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY WHICH HAVE OCCURRED BETWEEN 31â MARCH, 2018 AND 13 th AUGUST, 2018 (DATE OF THE REPORT):
The Management taking into account certain untoward event had shut down the plant and closed the operations w.e.f 27th June, 2018. However, the operations at the plant has been partially started w.e.f 13th July, 2018 but the issue is still impacting the operations of the Company. The Management is working hard to amicably resolve the situation & restore the operations on full-fledge basis at the earliest. Apart from this there are no material changes and commitments affecting the financial positions of the Company between end of the financial year and the date of the report.
SIGNIFICANT AND MATERIAL ORDERS BY THE REGULATIONS:
During the year under review, no significant material orders were passed by the regulators or courts or tribunals impacting the going concern status and the Companyâs operations save and except as mentioned above.
CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSION AND ANALYSIS REPORT:
A report on âCorporate Governanceâ along with the Certificate from M/s Sanghavi & Co., Chartered Accountants, regarding its compliance and âManagement Discussion and Analysisâ Report as stipulated by Regulation 34 of the Securities & Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations) are set out separately which form part of this Annual Report.
DIRECTORâS RESPONSIBILITY STATEMENT:
In pursuance of Section 134(5) of the Companies Act, 2013, the Directors hereby confirm that:
(a) in the preparation of the annual accounts, the applicable Accounting Standards have been followed along with proper explanation relating to material departures;
(b) the Directors had 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 that period;
(c) the Directors had 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;
(d) the Directors had prepared the annual accounts on a going concern basis;
(e) the Directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively and
(f) the directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
DIRECTORS AND KEY MANAGERIAL PERSONNEL:
The following persons are the Key Managerial Personnel of the Company as per the provisions of Section 203 of the Companies Act, 2013.
- Mr. Manubhai Rathod, Whole-time Director & CEO
- Mr. Bimal Parmar, Company Secretary
The Board of Directors at its meeting held on 12th December, 2017, on the recommendation of the Nomination & Remuneration Committee thought it fit to recognize Mr. Manan Shah, President of the Company as Key Managerial Personnel of the Company.
The Board of Directors at their meeting held on 13th August, 2018, on the recommendation of the Nomination & Remuneration Committee appointed Mr. V. Shashidharan as a Chief Financial Officer (CFO) of the Company as required under Section 203 of the Companies Act, 2013.
Further, the statement containing particulars of employees in terms of section 197(12) of the Companies Act, 2013, read with rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is provided in a separate statement and that forms part of the annual report.
Considering the provisions to section 136 of the Companies Act, 2013, the annual report, excluding the aforesaid statement, is being sent to the shareholders of the company and others entitled thereto. The said statement is available for inspection of members at the Registered Office of the Company during working hours up to the date of the Annual General Meeting and shall be made available to any shareholder on request.
Appointment/ re-appointment of Directors:
I. The Board of Directors of the Company at its meeting held on 12th February, 2018, on the recommendation of the Nomination & Remuneration Committee, co-opted Mr. Harish Motiwalla (DIN: 00029835) as an Additional Director (Non-Executive, Independent Director) of the Company subject to the approval of shareholders at the ensuing Annual General Meeting, in accordance with the provisions of Sections 149, 152, 161 read with Schedule IV and any other applicable provisions, if any, of the Companies Act, 2013 and Rules framed thereunder.
The Board, on the recommendation from Nomination & Remuneration Committee, proposes to recommends for the approval of the Members through Ordinary Resolution to appoint Mr. Motiwalla as an Independent Director of the Company for a period of 5 years with effect from 12th February, 2018.
II. Pursuant to the provisions of the Companies Act, 2013 (âthe Actâ) and Clause 49 of the erstwhile Listing Agreement, Mr. Pundarik Sanyal was appointed as Non-Executive, Independent Director of the Company to hold office for a Three (3) years for a term up to 1441 July, 2018 by the Members of the Company in the 43rd Annual General Meeting held on 29th September, 2015. He is eligible for re appointment as Independent Directors for another term of up to five years.
Pursuant to the provisions of the Act, based on the recommendation of the Nomination and Remuneration Committee, the Board recommend for the approval of the Members through Special Resolution at the ensuing Annual General Meeting re-appointment of Mr. Pundriak Sanyal as an Independent Directors for another Three (3) years from 15th July, 2018.
The above proposal for re-appointment forms part of the Notice of the 47th Annual General Meeting and the relevant Resolutions are recommended for your approval therein.
III. Pursuant to the provisions of the Companies Act, 2013 (âthe Actâ) Mrs. Sangeeta Bohra was appointed as Non-Executive Independent Director of the Company to hold office for a Three (3) years for a term up to 28th September, 2018 by the Members of the Company in the 45th Annual General Meeting held on 28th September, 2016. She is eligible for re-appointment as an Independent Directors for another term of up to five years.
Pursuant to the provisions of the Act, based on the recommendation of the Nomination and Remuneration Committee, the Board recommend for the approval of the Members through Special Resolution at the ensuing Annual General Meeting for re-appointment of Mrs. Sangeeta Bohra as Independent Directors for another One (1) year from 29*1 September, 2018.
The above proposal for re-appointment forms part of the Notice of the 47th Annual General Meeting and the relevant Resolutions are recommended for your approval therein.
IV. The Board of Directors of the Company at its meeting held on 12th February, 2018, on the recommendation of the Nomination & Remuneration Committee, co-opted Mrs. Chaitali Salot (DIN: 02036868) as an Additional Director (Non-Executive, Woman Director) of the Company subject to the approval of shareholders at the ensuing Annual General Meeting, in accordance with the provisions of Section 161 and second proviso to Section 149 (1) read with Section 152 and any other applicable provisions, if any, of the Companies Act, 2013 and Rules framed thereunder.
The Board, on the recommendation from Nomination & Remuneration Committee, proposes to recommend for the approval of the Members through Ordinary Resolution to appoint Mrs. Chaitali Salot as Non-Executive Woman Director of the Company with effect from 12th February, 2018.
V. In accordance with the provisions of Section 152 of the Companies Act, 2013 read with the Companies (Appointment and Qualification of Directors) Rules, 2014 and the Articles of Association of your Company, Mr. Manu Bhai Rathod, Whole time Director & CEO, retires by rotation at the ensuing Annual General Meeting and being eligible has offered himself for re-appointment.
The brief particulars and expertise of the aforesaid Directors appointed/re-appointed and regularisation as required under Regulation 36 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and Secretarial Standard - 2 forms part of the notice convening the ensuing Annual General Meeting.
Cessation:
During the year under review, Mr. Mihir Dewani resigned from the office of Whole-Time Director & CEO of the company w.e.f. 15th June, 2017
Your Board of Directors take this opportunity to express their appreciation for the valuable services rendered by Mr. Mihir Devani during his tenure as Whole- Time Director & CEO of the Company.
Declaration by Independent Directors:
The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence in accordance with the provisions of the Companies Act, 2013 and the Listing Regulations.
PERFORMANCE EVALUATION:
Pursuant to the provisions of Companies Act, 2013, Listing Regulations and Performance Evaluation Policy of the Company, the Board of Directors, in consultation with the Nomination & Remuneration Committee and Independent Directors, carried out & analysed the annual performance evaluation of all the Directors, the Board as a whole and its Committees.
The performance evaluation framework was designed keeping in view the Guidance Note on Board Evaluation issued by SEBI and accordingly, a structured questionnaire was formulated having qualitative parameters such as functioning, information availability, leadership qualities, compliance and governance, effectiveness etc.
Evaluation of the Board was based on criteria such as composition and role of the Board, Board communication and relationships, functioning of Board Committees, strategic planning, etc.
Evaluation of Directors was based on criteria such as participation and contribution in Board and Committee meetings, experience and expertise to provide feedback and guidance to top management on business strategy, governance and risk, understanding of the organizationâs strategy, risk and environment, etc.
Based on the annual performance evaluation the Board expressed its satisfaction with the evaluation process.
NOMINATION & REMUNERATION POLICY:
Pursuant to the provisions of the Company Act, 2013 and Listing Regulations, the Nomination & Remuneration Committee formulated the Nomination & Remuneration Policy that was duly adopted by the Board of Directors to ensure that level and composition of remuneration is reasonable and sufficient, relationship of remuneration to performance is clear and to meet appropriate performance benchmark. The Nomination & Remuneration Policy lays down the framework for selection and appointment of Directors including determining qualifications and independence of a Director, Key Managerial Personnel, Senior Management Personnel and their remuneration.
The Nomination & Remuneration Committee, after identifying and ascertaining the integrity, quotient, qualification, expertise and experience of the person for appointment as Director, KMP or at Senior Management Level, recommends his/her appointment to the Board of Directors. The remuneration and commission paid to the Whole-time Director is in accordance with the percentage/slabs/ conditions as per the provisions of the Companies Act, 2013. The KMPs, Senior Management Personnel and other employees of the Company are paid monthly remuneration as per the Companyâs HR policies and/or as may be approved by the Committee. If the remuneration of KMPs or any other officer is to be specifically approved by the Committee and/or the Board of Directors then such approval will be accordingly procured.
The Policy on Nomination & Remuneration is available on the website of the Company viz. www.orientabrasives.com. The details about the Nomination & Remuneration Committee and payment of remuneration to the Directors are provided in the Report on Corporate Governance which forms part of this Annual Report.
PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES:
The information required under Section 197 of the Companies Act, 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of Directors/ employees of your Company is set out in âAnnexure Aâ to this Report.
MEETINGS OF THE BOARD:
During the year under review, the Board of Directors met Six (6) times. The intervening gap between the meetings was within the period prescribed under the Companies Act, 2013 and the Listing Regulations. The dates of the meetings along with the attendance of the Directors therein have been disclosed in the Corporate Governance Report.
AUDIT COMMITTEE:
The Company has an Audit Committee of the Board of Directors in place. The terms of reference of the Audit Committee are in line with Section 177 of the Companies Act, 2013 read with the Companies (Meetings of Board and its Powers) Rules, 2014 and Regulation 18 of the Listing Regulations. Detailed information pertaining to the Audit Committee including its composition has been provided in the Corporate Governance Report, which forms part of this Annual Report.
AUDITORS AND AUDITORSâ REPORT Statutory Auditors:
M/s. Sanghavi & Co., Chartered Accountants (FRN:109099W) were appointed as statutory auditors of the Company at the 46th AGM held on 16th September, 2017 for a period of five years from the conclusion of the 46th AGM until the conclusion of the 51st AGM to be held in the year 2022, subject to ratification by members of the Company at every AGM to be held thereafter. However, pursuant to notification issued by the Ministry of Corporate Affairs on 7th May, 2018 amending Section 139 of the Companies Act, 2013 and the rules framed thereunder, the mandatory requirement for ratification of appointment of auditors by the members at every AGM has been omitted and accordingly, the Company is not proposing ratification of appointment of auditors at this AGM.
The Auditorâs Report for the Financial Year ended 31st March, 2018 does not contain any qualification, reservation or adverse remark and is prepared as per "Ind ASâ.
Cost Auditors:
Pursuant to Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Rules, 2014, as amended from time to time, the Board of Directors has, on recommendation of the Audit Committee, appointed M/s. S. K. Rajani & Co., Cost Accountants as the Cost Auditors of the Company to conduct audit of the Companyâs Cost Accounting Records in respect of the products of the Company for the financial year 2018-2019 at the remuneration of Rs. 1,75,000/- (Rupees One Lakh Seventy Five Thousand Only) per annum (including taxes and reimbursement of actual travel & out of pocket expenses).
Your Company has received consent from M/s. S. K. Rajani & Co., Cost Accountants, to act as the Cost Auditors of your Company for the financial year 2018-2019 along with a certificate confirming their independence. As per the provisions of the Companies Act, 2013, a resolution seeking approval of the Members for the remuneration payable to the Cost Auditors forms part of the Notice convening Annual General Meeting.
Secretarial Auditors:
Pursuant to the provisions of Section 204 of the Companies Act, 2013 read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rule 2014, the Company has appointed Ms. Dipti Gohil, Practicing Company Secretary to undertake the Secretarial Audit of the Company for the Financial Year ended 31st March, 2018.
The Secretarial Audit Report in Form MR-3 is annexed herewith as âAnnexure Bâ.
Secretarial Auditors observations:
The Secretarial Auditors report contained the following qualification, reservation or adverse remarks:
The Company has not appointed Chief Financial Officer (CFO) as required under Section 203 (1) of the Companies Act, 2013, during the audit period under review.
Board explanation/ comments on above remarks:
The Company was looking for suitable person to be appointed as Chief Financial Officer (CFO) of the Company. However, in order to comply with requirement of Section 203 of the Companies Act, 2013 the Board of Directors, on the recommendation of Nomination and Remuneration Committee and considering the financial and accounting expertise of Mr. V. Shashidharan, appointed as Chief Financial Officer of the Company w.e.f. 1341 August, 2018.
INTERNAL CONTROL SYSTEM & THIER ADEQUACY:
The Company has in place internal control systems commensurate with the size and nature of the business and has experienced personnel positioned adequately in the organization to ensure internal control processes and compliances.
The Company takes abundant care in designing, reviewing and monitoring regularly the working of inter control systems and their compliances for all important financial internal control processes. Internal Auditors comprising of professional firms of Chartered Accountants have been entrusted the j ob to conduct regular internal audit at all units/location and report to the management the observation, if any. The Audit findings are reported on quarterly basis to the Audit Committee of the Board headed by a Non-executive Independent Director.
CORPORATE SOCIAL RESPONSIBILITY:
Your Company embraces responsibility for impact of its operations and actions on all stakeholders including society and community at large. As per requirements of Companies Act, 2013, the Company had duly constituted Corporate Social Responsibility Committee. The brief outline of the Corporate Social Responsibility (CSR) policy of the Company and the initiative undertaken by the Company on CSR activities during the year are set out in âAnnexure Câ of this report in the format prescribed in the Companies (Corporate Social Responsibility Policy) Rules, 2014. The details of composition of CSR Committee etc. are provided under the Corporate Governance Report.
VIGIL MECHANISM- WHISTLE BLOWER POLICY:
The Company has established a âvigil mechanismâ for its directors and employees to report genuine concerns or grievances and accordingly formulated the Whistle Blower Policy in compliance with the provisions of Section 177 of the Companies Act, 2013 and the Listing Regulations. The Policy has been formulated with an objective to build and strengthen a culture of transparency and trust within the Company and to provide a framework to its directors and employees for responsible and secure reporting of improper activities (whistle blowing); and also to provide for adequate safeguards against victimization of directors/employees, who avail of the mechanism; and for direct access to the Chairman of the Audit Committee. The said Policy is available on the website of the Company viz. www.orientabrasives.com.
During the year under review, no compliant has been received under the Whistle Blower Policy (Vigil Mechanism). Further information on the Vigil Mechanism and the Whistle Blower Policy of your Company can be referred to in the Report on Corporate Governance.
RISK MANAGEMENT POLICY:
Your Company has a Risk Management Policy that identifies elements of risks inherent to the business and have entrusted the Audit Committee with the responsibility of reviewing the said policy.
RELATED PARTY TRANSACTIONS:
All contracts/arrangements/transactions entered by the Company during the financial year under review with the Related Parties were in the ordinary course of business and on an armâs length basis. During the year, the Company had not entered into any contract/arrangement/transaction with the Related Parties which could be considered as material in accordance with the Companyâs Policy on Related Party Transactions. In view thereof, the disclosure in Form AOC-2 is not required to be provided.
The Company places all Related Party Transactions before the Audit Committee and also before the Board of Directors for approval on quarterly basis. The omnibus approval was obtained from the Audit Committee in respect of transactions which are repetitive in nature in accordance with the Companyâs Policy on Related Party Transactions. The Audit Committee also reviewed the details of such Related Party Transactions entered into by the Company pursuant to each of the omnibus approval given on a quarterly basis.
The Policy on Related Party Transactions as approved by the Board of Directors of the Company is available on the website of the Company viz. www.orientabrasives.com.
Your Directors draw attention of the members to Note no. 28 to the financial statements which sets out related party disclosures.
PARTICULARS OF LOANS GIVEN, INVESTMENTS MADE, GUARANTEES GIVEN AND SECURITIES PROVIDED:
During the year under review no loans given, investments made, guarantees given and securities provided in accordance with the provisions of Section 186 of the Companies Act, 2013.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:
The particulars relating to conservation of energy, technology absorption, foreign exchange earnings and outgo, as required to be disclosed under the Companies Act, 2013, are provided in âAnnexure Dâ to this Report.
EXTRACT OFANNUAL RETURN:
The Extract of Annual Return of the Company in Form MGT-9 as provided under Section 92(3) of the Companies Act, 2013 is annexed herewith as âAnnexure Eâ to this Report.
PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE:
The Company has adopted a Policy in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. The Company has set up an Internal Complaint Committee to redress the complaints, if any, received.
During the year under review, no complaint was received from any employee of the Company involving sexual harassment and thus, no case was filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.
ACKNOWLEDGEMENT:
Your Directors wish to express their appreciation for the assistance and co-operation received from the financial institutions, banks, employees, investors, customers, Government & Government agencies, Members & Shareholders and all other business associates for the continuous support given by them to the Company and their confidence in its management during the year under review and look forward for their contributed support in future.
For and on Behalf of the Board of Directors
Sd/- Sd/-
MANUBHAI RATHOD HEMUL SHAH
WHOLE TIME DIRECTOR
& CEO DIRECTOR
(NON-EXECUTIVE)
(DIN: 07618837) (DIN: 00058558)
Place : Mumbai
Date : 13th August, 2018
- E & OE are regretted
Mar 31, 2016
The directors are pleased to submit the FORTY FIFTH annual report of the Company along with the audited financial statements for the financial year ended March 31, 2016.
FINANCIAL RESULTS
(Rs. In Lacs)
PARTICULARS |
2015-2016 |
2014-2015 |
Revenue from Operations (Gross) |
31,131.15 |
20,427.24 |
Less: Excise Duty |
2,501.38 |
2,136.48 |
Revenue from Operations (Net) |
28,629.77 |
18,290.76 |
Add:- Other Income |
205.64 |
90.27 |
Total Revenue |
28,835.41 |
18,381.03 |
Profit before depreciation, interest and tax |
4,944.31 |
3,048.68 |
Less: Depreciation |
896.22 |
1,059.07 |
Interest |
340.45 |
275.71 |
Profit before Income Tax |
3,707.64 |
1,713.90 |
Less : Income Tax |
1,346.48 |
482.98 |
Net Profit for the year |
2,361.16 |
1,230.92 |
Add: Balance brought forward from the previous year |
5,756.76 |
5,300.79 |
Amount available for appropriation |
8,117.92 |
6,531.71 |
Appropriation: |
||
General Reserve |
400.00 |
400.00 |
Dividend on Equity Shares |
299.10 |
299.10 |
Corporate dividend tax |
60.89 |
60.89 |
CSR Expenses |
31.66 |
14.96 |
Balance carried forward to balance sheet |
7,357.93 |
5,756.76 |
OPERATIONS REVIEW AND FUTURE OUTLOOK
The gross turnover of the Company increased to Rs. 31,131.15 lacs from Rs. 20,427.24 Lacs during previous year i.e. registering an impressive jump of more than 50 %. Accordingly, Profit Before Tax (PBT) and Net Profit were f 3,707.64 Lacs and Rs. 2,361.16 Lacs respectively as compared to Rs.1,713.90 Lacs and Rs. 1,230.92 Lacs respectively in the previous year.
During the year under review the Company sold Bauxite and its value added products amounting to Rs.30,464.62 Lacs as compared to Rs. 19,800.28 Lacs in the previous year. The Company has received permission from Gujarat Government for sale of Bauxite. The Market for abrasive grains is marginally showing improvement in current year.
Your Company also runs wind power plants of 11.1 MW in Rajasthan & Karnataka. During the year the gross revenue from sale of power to respective state power distribution companies was Rs. 666.53 Lacs as compare to Rs. 626.96 Lacs in previous year.
Your Company has a total thermal power plant capacity of 18 MW out of which 9 MW is based on coal and 9 MW on furnace oil. The furnace oil based power plant is used as and when required and same has been found viable. Your directors are hopeful that the companyâs performance will improve in the coming years.
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 Credit Analysis & Research Ltd. (CARE). This rating indicates very strong degree of safety and lowest credit risk.
DIVIDEND
Based on the Companyâs performance, your directors are pleased to recommend a final dividend of f 0.25 per share (i.e. 25%) for the financial year 2015-16 on the capital of 11,96,39,200 equity shares of f 1.00 each, in previous year it was also f 0.25 per share (i.e. 25%).
The final dividend and dividend distributed tax involve the cash out flow of Rs.359.99 Lacs (Previous Year Rs. 359.99 Lacs), the dividend is subject to approval of members of the Company in the Annual General Meeting.
SHARE CAPITAL
Share capital audit, as per the directives of the Securities and Exchange Board of India, is being conducted on a quarterly basis by M/s. Jatin Gupta & Associates, Company Secretaries. The Share Capital Audit Reports are duly forwarded to BSE Limited, the National Stock Exchange of India Limited where the shares of your Company are listed. Furthermore, it is confirmed that during the year under review the Company has neither issued shares in general nor with differential voting rights or granted stock options or sweat equity and does not have any scheme to fund its employees to purchase the shares of the Company. As on 31st March, 2016, none of the Directors of the Company hold convertible instruments.
The paid up Share Capital of the Company as on 31st March, 2016 was Rs. 1,196.52 Lacs.
RESERVES
Your Company, before the declaration of dividend in every financial year, transfers such percentage of its profits for that financial year to the General Reserve as it considers appropriate. Pursuant to the provisions of the Companies Act, 2013, in the year under review, the Company proposes to transfer Rs. 400 Lacs to Reserves.
PROMOTER CHANGE
The members are aware that during the year under reference new set of promoters were reined in, consequent upon erstwhile Promoters i.e. Rajgarhia family executing a Share Purchase Agreement with present promoters for change in management and controlling rights in your Company for which due course of Law of Land was followed. Presently Bombay Minerals Limited (BML) are acting as Promoters of the Company.
HOLDING SUBSIDIARY AND ASSOCIATE COMPANY
During the current year, w.e.f. 15 July 2015 Bombay Minerals Limited, became the associate company of your Company.
SUBSIDIARY COMPANIES AND CONSOLIDATED FINANCIAL STATEMENTS
The Company does not have any subsidiary, hence nothing is required to be stated on this count and the results presented before members are standalone results of Orient abrasives Limited only. It is confirmed that same are prepared in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Companies Act, 2013 (âthe Actâ) read with Companies (Accounts) Rules, 2014, form part of Annual Report and are reflected in the Financial Statements of the Company.
The annual financial statements and related detailed information will be kept at the Registered Office of the Company and will be available to investors seeking information at any time.
FIXED DEPOSIT
During the year under review, your Company did not accepted any fixed deposits.
There are no unclaimed deposits as on March 31, 2016.
Deposits 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
(iv Non Complied Deposits : NIL
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS
During the year, there were no loans, guarantees or investments extended by the Company.
GOING CONCERN
During the year, there is no significant and/or material order passed by the regulators or courts or tribunals impacting the going concern status and companyâs operations in future.
AUDITORS
Statutory Auditors:
The Companyâs Statutory Auditors M/s SRBC & Co. LLP. (ICAI Firm Registration No. 324982E) Chartered Accountants, retire at the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment, and had expressed their willingness to be re-appointed.
Your company has also received a certificate from the 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 45th AGM to 46th AGM for a period of one year and authorize the Board of Directors to fix their remuneration.
Cost Auditors:
M/s. S. K. Rajani & Co. (Firm Registration No. 101113), Cost Accountants have been appointed to conduct Cost Audits relating of the Company for the year ending 31st March, 2017. Pursuant to the provisions of Section 148 of the Act read with The Companies (Audit and Auditors) Rules, 2014, Members are requested to consider the ratification of the remuneration payable to M/s. S.K.Rajani & Co. (Firm Registration No. 10113)
Pursuant to erstwhile appointment effected, said firm had completed audit of affairs of the Company and has given their report thereupon. Said report constitutes part and parcel of present annual report.
Secretarial Auditors:
Pursuant to the provisions of Section 204 of the Act and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, Your Board had appointed M/s. Jatin Gupta & Associates, New Delhi a firm of Company Secretaries in Practice to undertake the Secretarial Audit of the Company for the year ended 31st March, 2017. The Secretarial Audit Report is attached as Annexure A.
The Auditorsâ Report for the financial year ended 31st March, 2016 do not contain any qualification, reservation, adverse remark or disclaimer. Although the Secretarial Auditor had raised their concern that the Company did not appoint CFO post retirement of Mr. A S Sihag, then acting CFO and hence had stated same as a matter of emphasis not qualification, since it takes time to recruit persons with caliber of acting as CFO.
AUDITORSâ REPORT
The Auditorsâ Report read with notes to the financial statements and otherwise are self-explanatory and does not call for any further explanation.
There are no adverse remark in the audit / Cost / Secretarial/ Directors Report for the year.
DIRECTORS RESPONSIBILITY STATEMENT
Based on the framework of internal financial controls and compliance systems established and maintained by the Company, work performed by the Internal, Statutory, Cost and Secretarial Auditors, including audit of the internal financial controls over financial reporting by the Statutory Auditors, and the reviews performed by Management and the relevant Board Committees, including the Audit Committee, your Board is of the opinion that the Companyâs internal financial controls were adequate and effective during the financial year 2015-16.
Pursuant to the requirements under Section 134 (3) (c) and 134 (5) of the Companies Act, 2013, your Board hereby confirm that:
(i) in the preparation of the annual accounts for the year ended 31st March, 2016, 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, 2016 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 âgoing concernâ basis;
(v) the Directors have laid down internal financial controls to be followed by the Company and 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.
CORPORATE SOCIAL RESPONSIBILITY
Your Companyâs Participatory Sustainable Development has been an integral part of the Companyâs Community Development Policy. The Company has thus inculcated and adopted an Integrated Sustainability Model, representing the Social and Environment aspects. The Board has thus constituted a Corporate Social Responsibility Committee pursuant to Section 135 of the Companies Act, 2013 which presently comprises Mr. Pundarik Sanyal, Chairman, Mr. Hemul Shah, Director and Mr. Mihir Devani, Whole Time Director & CEO as members.
The Committee has formulated the CSR policy pursuant to Section 135 and Schedule VII of the Companies Act, 2013 read with the Companies (Corporate Social Responsibility Policy) Rules, 2014 which Company has adopted as its CSR policy.
As partof its CSR initiatives, the Company has undertaken educational, Healthcare, environment and sanitation projects in the State of Gujarat.
The above projects are in accordance with Schedule VII of the Act. The Company has spent Rs. 31.66 Lacs towards the CSR projects during the current Financial Year 2015-16.
The average net profit of the Company, computed as per Section 198 of the Act, during the three immediately preceding financial years was Rs. 1,548.02 lacs. It was hence required to spend Rs.30.96 lacs on CSR activities during the Financial Year 2015-16, being 2% of the average net profits of the three immediately preceding financial years.
Furthermore, the annual report on CSR activities of the Company for the year under review is set out in Annexure B forming part of this report.
CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES:
All Related Party Transactions that were entered into during the financial year were on an armâs length basis, in the ordinary course of business and were in compliance with the applicable provisions of the Act and the Listing Regulations (erstwhile Listing Agreement entered into with the Stock Exchanges).
During the year, the Company had entered into contracts with Bombay Minerals Limited, Ashapura Minechem Limited, Ashapura Perfoclay Limited , Ashapura International Limited and Ashapura Foundation 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 Companyâs website at the link http://www.orientabrasives.com/OAL%20policies/ Related%20Party%20Transactions%20Policy.pdf.
There were no materially significant Related Party Transactions made by the Company during the year that would have required Shareholder approval under the Listing Regulations. All Related Party Transactions are placed before the Audit Committee for approval. Prior omnibus approval of the Audit Committee is obtained for the transactions which are repetitive in nature. A statement of all Related Party Transactions is placed before the Audit Committee for its review on a quarterly basis, specifying the nature, value and terms and conditions of the transactions.
The Company has adopted a Related Party Transactions Policy. The Policy, as approved by the Board, is uploaded on the Companyâs website.
Details of the transactions with Related Parties are provided in the accompanying financial statements. There were transactions during the year which would require to be reported in Form AOC-2.
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.
RISK MANAGEMENT
The Company has in place a Risk Management Policy, pursuant to Section 134 of the Act. The Audit Committee is mandated to take the control of all the risks and comprises of Mr. Pundarik Sanyal - Chairman, Mr. Hemul Shah-Director and Mrs. Sangeeta Bohra, Director as Member, the Audit committee reviews the key risks, mitigation plans and progress of the risk management process at periodic intervals.
This Risk Management framework enables identification and evaluation of business risks and opportunities, seeks to create transparency, minimize adverse impact on business objectives and enhance the Companyâs competitive advantage. It also describes the risk management approach across the enterprise at various levels.
Major risks identified by business and functions are systematically addressed through mitigation actions on a periodic basis. Existing control measures are evaluated against the relevant Key Performance Indicators.
The Company has laid down procedures to inform the Audit Committee as well as the Board about risk assessment and management procedures and status. These procedures are periodically reviewed to ensure that the executive management monitors and controls risks. The Internal Audit Department is responsible for coordinating with the various heads of Departments with respect to risk identification, assessment, analysis and mitigation. The major risks forming part of the Enterprise Risk Management process are linked to the audit universe and are also covered as part of the annual risk based audit plan.
Your Board periodically reviews the risks and suggests steps to be taken to control and mitigate the same through a properly defined framework.
INTERNAL CONTROLS SYSTEMS ADEQUACY AND EFFICACY
The Company has in place an adequate system of internal controls. It has documented policies and procedures covering all financial and operating functions and processes. These have been designed to provide a reasonable assurance with regard to maintaining of proper accounting controls for ensuring reliability of financial reporting, monitoring of operations, protecting assets from unauthorized use or losses and compliance with regulations.
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.
Details of the internal controls system are given in the Management Discussion and Analysis Report, which forms part of the Boardâs Report.
DIRECTORS
APPOINTMENT AND RETIREMENT:
Mrs. Sangeeta Bohra was appointed as Additional Director on the Board of the Company with effect from 29th September, 2015. Pursuant to provisions of Section 161 of the Act and the Articles of Association of the Company, Mrs. Sangeeta Bohra vacates office and is eligible for appointment. Members are requested to refer to Item No. 5 of the Notice of the Annual General Meeting for details.
All Independent Directors of the Company have given declarations that they meet the criteria of independence as laid down under Section 149 (6) of the Act and Regulation 16 (1) (b) of the Listing Regulations. In the opinion of the Board, they fulfill the conditions of independence as specified in the Act and the Rules made there under and are independent of the management.
Except Mr. Amar Singh Sihag, CFO of the Company, No Key Managerial Person has been appointed or has retired or resigned during the year. As a matter of apprising members as on event occurring after closure of FY 2015-2016, we are to state that Mr. Kamlesh Kumar Mundra, Company Secretary and Key Managerial Person has resigned w.e.f 30/04/2016.
In accordance with the provisions of Section 152 of the Act and in terms of the Articles of Association of the Company, Mr. Hemul Shah retires and is eligible for re-appointment.
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.
Annual Evaluation of Board Performance and Performance of its Committees and Directors:
Pursuant to the applicable provisions of the Act and the Listing Regulations, the Board has carried out an annual evaluation of its own performance, performance of the Directors as well as the evaluation of the working of its Committees.
The Nomination and Remuneration Committee has defined the evaluation criteria, procedure and time schedule for the Performance Evaluation process for the Board, its Committees and Directors. The Boardâs functioning was evaluated on various aspects, including inter alia degree of fulfillment of key responsibilities, Board structure and composition, establishment and delineation of responsibilities to various Committees, effectiveness of Board processes, information and functioning.
Directors were evaluated on aspects such as attendance and contribution at Board/ Committee Meetings and guidance/ support to the management outside Board/ Committee Meetings. In addition, the Chairman was also evaluated on key aspects of his role, including setting the strategic agenda of the Board, encouraging active engagement by all Board members and motivating and providing guidance to the Whole Time Director & CEO.
Areas on which the Committees of the Board were assessed included degree of fulfillment of key responsibilities, adequacy of Committee composition and effectiveness of meetings.
The performance evaluation of the Independent Directors was carried out by entire Board, excluding the Director being evaluated. The performance evaluation of the Chairman and the Non Independent Directors was carried out by the Independent Directors, who also reviewed the performance of the Board as a whole. The Nomination and Remuneration Committee also reviewed the performance of the Board, its Committees and of the Directors.
The Chairman of the Board provided feedback to the Directors on an individual basis, as appropriate. Significant high lights, learning and action points with respect to the evaluation were presented to the Board.
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 Companyâs manufacturing, marketing, finance and other important aspects.
The Company Secretary and/or COO/CEO 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 site etc.
The details of such familiarization programme have been displayed on the companyâs website link: http:// www. orientabrasives. com/in vestor_ relations.htm
REMUNERATION POLICY
The Company has adopted a Remuneration Policy for the Directors, Key Managerial Personnel and other employees, pursuant to the provisions of the Act and the Listing Regulations. The policy can also be accessed from the company website at www.orientabrasives.com
BOARD AND COMMITTEE MEETINGS
A calendar of Board and Committee Meetings to be held during the year was circulated in advance to the Directors.
10 (Ten) Board Meetings were convened and held during the year.
The Board has constituted an Audit Committee with Mr. Pundarik Sanyal as Chairman and Mr. Hemul Shah and Mrs. Sangeeta Bohra as Members. There have been no instances during the year when recommendations of the Audit Committee were not accepted by the Board.
Details of the composition of the Board and its Committees and of the Meetings held and attendance of the Directors at such Meetings, are provided in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Act and the Listing Regulations.
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 Whole Time 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.
INDUSTRIAL RELATIONS
The industrial relations with staff and workers during the year under review continue to be cordial.
HUMAN RESOURCES
The Companyâs 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 Whole time Director that all board members and senior management personnel have affirmed compliance with the code of conduct for the year ended March 31, 2016 is attached as Annexure-H.
A certificate from the Practicing Company Secretary regarding compliance of the conditions of Corporate Governance as stipulated is enclosed as Annexure-I. CEO/CFO certificate is enclosed as Annexure-J.
DISCLOSURES:
Audit Committee
The Audit Committee comprised of Mr. Pundarik Sanyal (Chairman), Independent Director, Mrs. Sangeeta Bohra, Independent Director and Mr. Hemul Shah, Non Independent Director.
Audit Committee has not on any occasion recommended any suggestions warranting any suggestion/deliberation. Number of Board Meeting
The Board of Directors of the Company met 10 (Ten) times in the year, the details of which are provided in the Corporate Governance Report.
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 section 136(1) of the Act, the Annual Report excluding the aforesaid is being sent to the members of the Company. The said information is available at the corporate office of the company during the working hours and any member interested in obtaining such information may write to the Company Secretary.
POLICY ON PREVENTION, PROHIBITION AND REDRESSAL OF SEXUAL HARASSMENT AT WORKPLACE
The Company has zero tolerance for sexual harassment at workplace and has adopted a Policy on Prevention, Prohibition and Redressal of Sexual Harassment at the 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 Policy aims to provide protection to employees at the workplace and prevent and redress complaints of sexual harassment and for matters connected or incidental thereto, with the objective of providing a safe working environment, where employees feel secure. The Company has also constituted an Internal Complaints Committee, known as the Prevention of Sexual Harassment (POSH) Committee, to inquire into complaints of sexual harassment and recommend appropriate action.
The Company has not received any complaint of sexual harassment during the financial year 2015-16.
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 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 Companyâs operation in future.
VIGIL MECHANISM
The Company has adopted a Whistle Blower Policy, to provide a formal mechanism to the Directors and employees to report their concerns about unethical behavior, actual or suspected fraud or violation of the Companyâs Code of Conduct or ethics policy. The Policy provides for adequate safeguards against victimization of employees who avail of the mechanism and also provides for direct access to the Chairman of the Audit Committee. It is affirmed that no personnel of the Company has been denied access to the Audit Committee. The Policy on vigil mechanism and whistle blower policy may be accessed on the Companyâs website at www.orientabrasives.com
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(3)(m) of the Companies Act 2013 read with rule 8 of the Companies (Accounts) Rules, 2014 is given in Annexure-E and forms part of this report.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS
During the year, there were no loans, guarantees or investments extended by the Company.
EXTRACT OF ANNUAL RETURN
The Extract of Annual Return in form MGT 9 as per Section 92(3) of the Companies Act, 2013 and Rule 12(1) of the Companies (Management and Administration) Rules, 2014 is set out in Annexure-D forming 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.
ACKNOWLEDGEMENT
Your Board would like to express its sincere appreciation for the support of the shareholders, employees, suppliers and commercial partners during the year for their continued support and guidance to the Companyâs management, which certainly encourages the management in meeting the challenges in the Companyâs growth journey.
For and on behalf of the Board
Sd/-
Mihir H Devani
Whole Time Director and CEO
(DIN-07238089)
Place: Mumbai Date : 09.08.2016
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
Mar 31, 2010
The Directors have pleasure in presenting the 39th Annual Report of
the company along with the Audited Statements of accounts for the year
ended 31st March, 2010.
FINANCIAL RESULTS
(Rs.in lacs)
2010 2009
Gross Sales & Income 34604.77 33395.11
Profit before depreciation,
Interest and tax 8417.19 6577.88
Less : Depreciation 1080.61 971.26
Interest 456.43 702.80
Profit before Income Tax 6880.15 4903.82
Less : Income Tax 1763.65 1719.40
Net Profit for the year 5116.50 3184.42
Add : Balance brought forward from
the previous year 3123.95 2849.34
Amount available for appropriation 8240.45 6033.76
Appropriation :
General Reserve 3000.00 2000.00
Dividend on Equity shares 1196.39 777.65
Corporate Dividend Tax 198.71 132.16
Balance carried forward to Balance Sheet 3845.35 3123.94
8240.45 6033.76
DIVIDEND
In view of the good performance of the Company in the year under
review, your directors are pleased to recommend a dividend @ Re. 1 per
equity share of Re. 1 each for the year ended on March 31, 2010.
The total cash out-flow on account of this dividend payment including
distribution tax is Rs. 1395.10 lac (Previous Year Rs. 909.81 lac).
OPERATIONS REVIEW
The performance of the Company continues to be very satisfactory. The
net profit registered an increase of 61 percent from Rs. 31.84 crore to
Rs. 51.17 crore while the turn over grew from Rs. 333.95 crore to Rs.
346.05 crore. Reduction in power and fuel costs and unrealised foreign
exchange gain were the main contributors to increase in profits. The
exports declined from Rs. 34.25 crore to Rs. 31.14 crore on account of
global recession in the steel industry.
The performance of abrasive grains division improved despite suspension
of its operation from January 16, 2010 to February 10, 2010, following
an order from Gujarat Pollution Control Board. The turn over of the
division increased from Rs. 118.28 crore to Rs. 120.90 crore.
The refractory division also contributed to the improvement in the
performance of the company registering an increase in both turn over
and profits.
The CompanyÃs thermal power plants (both coal based and furnace oil
based) are operating satisfactorily meeting the maximum of power
requirement of the Abrasives Grains Division.
During the year under review the company ventured into green energy
generation by installing four Wind Turbines with a total capacity of
5.1 MW. Three turbines of 1.5 MW each are installed in Rajasthan and
one of 0.6 MW is installed in Karnataka. The power generated is being
sold to the respective state electricity boards. This activity will
also contribute to further improvement in the operation of the company.
FUTURE OUTLOOK
The future outlook of the company is satisfactory. All the business
segments of the company are expected to yield better results.
The company has placed orders and expects to install four more Wind
Turbines of 1.5 MW capacity in the current year. Three turbines are
being installed in the state of Karnataka and one in Rajasthan. The
total capacity of power generation from Wind Turbines would be 11.1 MW
by the end of the current year.
FIXED DEPOSIT
As on the date of this report there is no unclaimed fixed deposit in
the Company.
POSTAL BALLOT
During the year under review, Main Objects and the Other objects of the
Company were altered through conduct of postal ballot process, to
include generation of electric energy from non-conventional energy
sources.
The postal ballot process commenced on July 31, 2009 with the decision
taken in the Board Meeting and concluded on September 26, 2009 with the
declaration of results by the Chairman.
DIRECTORS
Mr Sudhir Kumar Samarendra Narayan, having been longest in the office,
retires by rotation at the Annual General Meeting and being eligible
offer themselves for re-appointment. 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.
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 re-appointed
by the members at the 39th 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.
LISTING ON THE STOCK EXCHANGES
The equity shares of the Company are listed on the National Stock
Exchange of India Ltd. (NSE) and the Bombay Stock Exchange Ltd. (BSE).
The Calcutta Stock Exchange Association Ltd. has not yet confirmed
de-listing despite having completed all the formalities of delisting in
April, 2004 itself.
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 DirectorsÃ
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 DirectorsÃ
Report.
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
May 31, 2010 Chairman