Your Directors are pleased to present the 34th Annual Report together withaudited financial statements for the year ended March 31 2017.
1. FINANCIAL RESULTS
The Company's financial performance for the year ended March 31 2017 is summarizedbelow:
| || |
|Particulars || |
Rs. in Lakhs
Rs. in Lakhs
| ||Year ended 31.03.2017 ||Year ended 31.03.2016 ||Year ended 31.03.2017 ||Year ended 31.03.2016 |
|Revenue from Operations (Net) and other income ||13751.05 ||15053.38 ||13335.11 ||14916.23 |
|Profit Before Tax (PBT) ||3121.32 ||3568.43 ||3159.09 ||3693.98 |
|Provision for Tax ||1118.04 ||1245.12 ||1114.36 ||1241.12 |
|Profit After Tax (PAT) ||2111.46 ||2324.69 ||2044.73 ||2452.86 |
|Balance brought forward from previous year ||6812.83 ||5135.47 ||6787.68 ||4982.14 |
|Sub - Total ||8924.29 ||7460.16 ||8832.41 ||7435.00 |
|Appropriations: || || || || |
|Interim Equity Dividend ||287.03 ||322.70 ||287.03 ||322.70 |
|Proposed Final Equity Dividend ||172.20 ||215.13 ||172.20 ||215.13 |
|Tax on Equity Dividends ||93.52 ||109.50 ||93.53 ||109.49 |
|Differential Dividend paid FY 15-16 ||0.14 ||0.00 ||0.14 ||0.00 |
|General Reserve ||0.00 ||0.00 ||0.00 ||0.00 |
|Surplus carried to the next year's account ||8371.40 ||6812.83 ||8279.50 ||6787.68 |
Your Directors have recommended a final dividend of ' 0.6/- per Equity Share (i.e. 6%)(post-bonus) of ' 10/- each (last year ' 1.50 per Equity Share) for the Financial Yearended March 31 2017 amounting to ' 172.20 lakhs (excluding Dividend Distribution Tax).The dividend payout is subject to approval of Members at the ensuing Annual GeneralMeeting.
During the Financial Year 2016-17 your Company declared and paid an interim dividendof Rs.2.00 per equity share (i.e. 20%) (pre-bonus) of ' 10 each. The total dividend forthe year ended March 31 2017 would accordingly be ' 2.60/- per Equity Share of ' 10/-each. The total outgo for the Financial Year 2016-17 will be ' 459.23 lakhs (excludingdividend distribution tax) as against ' 537.83 lakhs (excluding Dividend Distribution Tax)in the previous year.
3. PERFORMANCE REVIEW
The Revenue from operations for the Company on the Standalone basis for the year2016-17 stood at ' 13053.35 lakhs as against ' 14673.89 lakhs in the previous yearreflecting stability of operations in an otherwise uncertain market. Profit before taxstood at ' 3159.09 lakhs in 2016-17 as compared to ' 3693.98 lakhs in the previous year.The Company could withstand adverse market conditions in the overseas market mainly due toits thrist on achieving internal operational excellence penetration into new marketsextensive tightening control on inventory management participating in the shift torenewable in energy and exercising stringent cost control measures. Net profit after taxstood at ' 2044.73 lakhs for the current year as compared to ' 2452.86 lakhs in theprevious year. Consequently the earnings per share for the year 2016-17 stood at ' 7.12/-per share as compared to ' 8.56/- per share in the year 2015-16.
The revenue from operations for the Company of the Consolidated for the year 2016-17stood at ' 13437.26 lakhs as against ' 14811.04 lakhs in the previous year reflectingstability of operations in an uncertain market. Profit before tax stood at ' 3121.32 lakhsin 2016-17 as compared to ' 3568.43 lakhs in the previous year. Net profit after tax stoodat ' 2111.46 lakhs for the current year as compared to ' 2324.69 lakhs in the previousyear. Consequently the earnings per share for the year 2016-17 stood at ' 7.36/- per shareas compared to ' 8.11/- per share in the year 2015-16.
4. CREDIT RATING
The Company's financial discipline and prudence is reflected in the strong creditratings ascribed by ICRA Limited as given below:
|Instrument ||Rating |
|Long Term Debt ||ICRA A (Stable) |
|Short Term Debt ||ICRA A1 |
5. CONSOLIDATED FINANCIAL STATEMENT
Consolidated Financial Statement has been prepared in accordance with provision of theCompanies Act 2013 ("the Act") and Accounting Standards (AS) - 21 onConsolidated Financial Statements read with AS - 23 on Accounting for Investments inAssociates issued by the Institute of Chartered Accountants of India form part of thisAnnual Report.
6. SUBSIDIARY COMPANIES
A statement containing the salient features of financial statements of the subsidiaryCompany of your Company forms part of consolidated financial statements in compliance withsection 129 and other applicable provisions if any of the Companies Act 2013.
7. CAPITAL EXPENDITURE
As at 31st March 2017 the gross fixed assets stood at ' 10751.38 lakhs and net fixedassets ' 8121.22 lakhs. Additions during the year amounted to ' 483.15 lakhs.
8. SHARE CAPITAL
The paid up Equity Share Capital as on March 31 2017 was ' 2870.23 lakhs. During theyear under review the Company has issued 9000 Equity Shares pursuant to exercise of9000 Stock Options to the employees of the Company under OEL Employees Stock Option Plan- 2013.
The Company has also issued 14351150 Equity Shares of ' 10/- each pursuant to Issueof Bonus Shares.
9. CORPORATE GOVERNANCE REPORT AND CERTIFICATE
As required under Regulation 34(3) read with Schedule V(C) of the Listing Regulations areport on Corporate Governance and the certificate as required under Schedule V (E) of theSEBI (LODR) Regulations 2015 from S. K. Jain & Co. Practicing Company Secretariesregarding compliance of conditions of Corporate Governance are given as an Annexureforming a part of this Report.
10. DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to Section 134(5) of the Companies Act 2013 and based on the representationreceived from the management your Directors confirm that:
a. in the preparation of the annual accounts for the financial year ended March 312017 the applicable accounting standards and Schedule III of the Companies Act 2013have been followed and there are no material departures from the same;
b. the Directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company as at March 31 2017 and of the profit ofthe Company for the year ended on that date;
c. the Directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities.
d. the Directors have prepared the annual accounts on a 'going concern' basis;
e. the Directors have laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and are operatingeffectively; and
f. the Directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems are adequate and operating effectively.
11. SECRETARIAL AUDIT
Pursuant to the provisions of Section 204 of the Companies Act 2013 read with the Rule9 of Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 yourCompany has appointed
S. K. Jain & Co. Practicing Company Secretary to conduct the Secretarial Audit ofyour Company. The report does not contain any qualification. The Report of the SecretarialAudit is placed as an Annexure to this Report. The report does not contain anyqualification.
12. EXTRACT OF ANNUAL RETURN
The details forming part of the extract of the Annual Return in Form MGT-9 inaccordance with Section 92(3) of the Companies Act 2013 read with the Companies(Management and Administration) Rules 2014 are set out herewith as Annexure to thisReport.
13. COMPLIANCE ON CRITERIA OF INDEPENDENCE BY THE INDEPENDENT DIRECTORS
All Independent Directors of the Company have given declarations to the Company underSection 149(7) of the Act that they meet the criteria of Independence as provided inSub-section 6 of Section 149 of the Act and also under the Listing Regulations.
14. REMUNERATION POLICY OF THE COMPANY
The Remuneration Policy of the Company for appointment and remuneration of theDirectors Key Managerial Personnel and Senior Executives of the Company along with otherrelated matters have been provided in the Corporate Governance Report.
As and when need arises to appoint Director the Nomination and Remuneration Committee(NRC) of the Company determines the criteria based on the specific requirements. NRC whilerecommending candidature to the Board takes into consideration the qualificationattributes experience and Independence of the Candidate
15. CORPORATE SOCIAL RESPONSIBILITY
Pursuant to the provisions of Section 135 of the Companies Act 2013 the Company hasconstituted a CSR Committee Mr. Pankaj Seth Managing Director is the Chairperson of theCommittee Mrs. Anisha Seth Mr. Pardeep Khosla and Mr. Gopikrishna Bubna are othermembers of the Committee.
The adopted CSR Policy outlines various areas like education healthcare water andsanitation environment and women empowerment for undertaking CSR activities.
The Company had found various alternatives for doing CSR Activities. But the Companyhas not found them reliable to do the CSR Activity. During the year Company had found onetrust to be relied upon i.e. Udayan Care Trust. The Company has spend '130000/- in theareas of education through Udayan Care Trust.
The Company then thought of creating its own Trust and then doing CSR Activity throughthat so that reliability can be there. The Company then formed trust in the name of'Orbit Foundation' during March 2017.
The Company could not undertook further CSR Activity during the financial year2016-2017 as Company was planning to form its own trust and undertake the CSR Activitybut the trust was formed in March 2017. The Company is likely to finalise CSR projectsduring the financial year 2017-2018.
16. MANAGEMENT DISCUSSION AND ANALYSIS
Management Discussion and Analysis Report for the year under review as stipulatedunder Regulation 34 of the SEBI (LODR) Regulations 2015 is presented in the separatesection forming part of Annual Report.
17. STATUTORY AUDITORS
Pursuant to provisions of Section 139 of the Act read with the Companies (Audit andAuditors) Rules 2014 M/s. G.M. Kapadia & Co. Chartered Accountants (FirmRegistration No.104767W) were appointed as Statutory Auditors of the Company for a termof 5 years to hold office from the conclusion of 32nd Annual General Meeting held onAugust 24 2015 until the conclusion of 37th Annual General Meeting subject toratification of their appointment at every subsequent Annual General Meeting. The Auditorshave confirmed that their appointment would be in accordance with the Section 139 of theCompanies Act 2013 and rule made thereunder and that they are not disqualified in termsof Section 141 of the Act.
A resolution seeking ratification of their appointment forms part of the noticeconvening the 34th Annual General Meeting and the same is recommended for yourconsideration and approval.
18. COST AUDITOR
In terms of the provisions of Section 148 of the Act read with the Companies (CostRecords and Audit) Amendment Rules 2014 the Board of Directors on the recommendation ofthe Audit Committee have appointed M/s. Balwinder & Associates Cost Accountants(Firm Registration Number: 000201) as Cost Auditors of the Company for the financial yearending 31st March 2018 on a remuneration as mentioned in the Notice convening the 34thAnnual General Meeting for conducting the audit of the cost records maintained by theCompany.
A Certificate from M/s. Balwinder & Associates Cost Accountants has been receivedto the effect that their appointment as Cost Auditor of the Company if made would be inaccordance with the limits specified under Section 141 of the Act and Rules framedthereunder.
A resolution seeking ratification by the members for the remuneration payable to CostAuditor forms part of the Notice of the 34th Annual General Meeting of the Company andsame is recommended for your consideration and approval.
19. SECRETARIAL AUDITOR AND THEIR REPORT:
M/s. S. K. Jain & Co. Practicing Company Secretary was appointed to conductSecretarial Audit of the Company for the financial year 2016-17 as required under Section204 of the Companies Act 2013 read with Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014. The Secretarial Audit Report for the financial yearended March 31 2017 is annexed as Annexure to this Report.
The Secretarial Audit Report does not contain any qualification reservation adverseremark or disclaimer which requires any further comments or explanations in this report.
20. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
The Company has an Internal Control System commensurate with the size scale andcomplexity of its operations to ensure that all assets are safeguarded and protectedagainst loss from unauthorized use or disposition and those transactions are authorizedrecorded and reported correctly.
The internal control is exercised through documented policies guidelines andprocedures. It is supplemented by an extensive program of internal audits. The auditobservations and corrective action taken thereon are periodically reviewed by the auditcommittee to ensure effectiveness of the internal control system. The internal control isdesigned to ensure that the financial and other records are reliable for preparingfinancial statements and other data and for maintaining accountability of persons.
The scope and coverage of the internal audit plan includes reviewing and reporting onkey process risks adherence to operating guidelines and statutory compliances. Theinternal audit function provides assurance to the Board and the Audit Committee regardingthe design adequacy and operating effectiveness of the internal control system.
21. VIGIL MECHANISM
Your company is committed to highest standards of ethical moral and legal businessconduct. Accordingly the Board of Directors have formulated a Whistle Blower Policy whichis in compliance with the provisions of Section 177(10) of the Companies Act 2013 andRegulation 22 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations2015. The policy provides for a framework and process whereby concerns can be raised byits employees against any kind of discrimination harassment victimization or any otherunfair practice being adopted against them. More details on the vigil mechanism and theWhistle Blower Policy of your Company have been outlined in the Corporate GovernanceReport which forms part of this report.
22. RELATED PARTY TRANSACTIONS
The Board of Directors has adopted a policy on Related Party Transactions. Theobjective is to ensure proper approval disclosure and reporting of transactions asapplicable between the Company and any of its related parties. During the financial year2016-17 your Company has entered into transactions with related parties as defined undersection 2 (76) of the Companies Act 2013 read with Companies (Specifications ofDefinitions Details) Rules 2014 which were in the ordinary course of business and onarm's length basis and in accordance with the provisions of Companies Act 2013 Rulesissued thereunder. During the financial year 2016-17 there were no transactions with therelated parties which qualify as material transactions under Listing Agreement.
The details of the related party transactions as required under Accounting Standard -18 are disclosed in the notes to accounts annexed to the standalone financial statementforming part of this Annual Report.
All Related Party Transactions entered during the year were in Ordinary Course of theBusiness and at Arm's Length basis. No Material Related Party Transactions i.e.transactions exceeding 10% of the annual consolidated turnover as per the last auditedfinancial statements were entered during the year by your Company. Accordingly thedisclosure of Related Party Transactions as required under Section 134(3)(h) of theCompanies Act 2013 in Form AOC-2 is not applicable.
23. TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND
As required under Section 205C of the Companies Act 1956 there is 1 case of transferof dividend amount to Investor Education and Protection Fund Account due on 24th March2017. The said transfer is done in the month of April 2017.
24. ENHANCING SHAREHOLDERS VALUE
Your Company believes that its Members are among its most important stakeholders.Accordingly your Company's operations are committed to the pursuit of achieving highlevels of operating performance and cost competitiveness consolidating and building forgrowth enhancing the productive asset and resource base and nurturing overall corporatereputation. Your company is continuously expanding its manufacturing base which thecompany is doing with expansions in Kosamba Gujarat by incorporating new looms. Yourcompany had purchased a new factory building in Kalyan (Asmeeta Textile Park) which hadcommenced the production from Apr 2015 which has led to the expansion in the ribbons andmade ups segment. Your Company is also committed to creating value for its otherstakeholders by ensuring that its corporate actions positively impact the socio-economicand environmental dimensions and contribute to sustainable growth and development.
25. DIRECTORS AND KEY MANAGERIAL PERSONNEL
In accordance with the provisions of the Act and the Articles of Association of theCompany Mr. Varun Daga Director of the Company retires by rotation at the ensuingAnnual General Meeting and being eligible has offered himself for re-appointment.
Your Company has received declarations from all the independent directors confirmingthat they meet the criteria of independence as prescribed under the provisions ofCompanies Act 2013 read with the Schedules and Rules issued thereunder.
Shri Pankaj Seth Managing Director Smt. Anisha Seth Whole Time Director Shri MukeshDeopura Chief Financial Officer and Smt. Neha Poddar Company Secretary are the KeyManagerial Personnel of your Company in accordance with the provisions of Section 2(51)203 of the Companies Act 2013 read with Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014.
26. EMPLOYEES' STOCK OPTION SCHEME
The Nomination and Remuneration Committee of the Board of Directors of the Companyinter alia administers and monitors the Employees' Stock Option Scheme of the Company inaccordance with the applicable SEBI (Share Based Employee Benefits) Regulations 2014erstwhile SEBI (Employees Stock Option Scheme and Employee Stock Purchase Scheme)Guidelines 1999 and as per Section 62(1) (b) of the Companies Act 2013 read with Rule12(9) of the Companies (Share Capital and Debentures) Rules 2014.
Disclosures with respect to Employees Stock Option Scheme of the Company Number ofoptions granted: 151000
Exercise Price: 52000 options granted at an exercise price of ' 69.75/- peroption 95000 options granted at an exercise price of ' 342/- per option and 4000options granted at an exercise price of ' 348.50/-.
Options vested: 52000 options and 95000 options - The rest 4000 options granted willvest over a period of 2 to 4 years from the date of grant.
Options exercised: On 5th November 2015 company allotted 30000 equity sharespursuant to exercise of 30000 stock options by the employees of the Company.
On 29th January 2016 company allotted 13000 equity shares pursuant to exercise of13000 stock options by the employees of the Company.
On 2nd April 2016 company allotted 9000 equity shares pursuant to exercise of 9000stock options by the employees of the Company.
During the year under review 7(Seven) Meetings of the Board of Directors of the Companywere convened and held. The relevant details including composition of the Board date ofmeetings attendance and composition of Board date of Meetings attendance andcomposition of various Committees of the Board are given in the Corporate GovernanceReport forming part of this report. The details regarding the composition of variouscommittees are also available on the Company's website www.orbitexports.com.
28. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS ANDOUTGO
The information on conservation of energy technology absorption and foreign exchangeearnings and outgo stipulated under Section 134 of the Companies Act 2013 read with theCompanies (Accounts) Rules 2014 is set as Annexure to this Report.
The Company did not accepted any deposits within the meaning of the provisions ofChapter V - Acceptance of Deposits by Companies read with the Companies (Acceptance ofDeposits) Rules 2014 during the year under review. Hence the requirement for furnishingof details of Deposits which are not in Compliance with the Chapter V of the Act is notapplicable.
30. DISCLOSURE REGARDING COMPANY'S POLICIES UNDER COMPANIES ACT 2013 AND SEBI (LISTINGOBLIGATION AND DISCLOSURE REQUIREMENTS) REGULATIONS 2015
The Company has framed various policies as per Companies Act 2013 and SEBI (ListingObligation And Disclosure Requirement) Regulation 2015; viz i) Remuneration ii)Determining Material Subsidiary iii) Performance evalution of Board Committee andDirectors iv) Materiality of related Party Transactions v) Whistle Blower/VigilMachanism vi) Archival Policy for Disclosure and vi) Code of Conduct for Directors aredisplayed on the website of the Company.
31. REPORTING OF FRAUDS
There was no instance of fraud during the year under review which required theStatutory Auditors to report to the Audit Committee and / or Board under Section 143(12)of the Act and Rules framed thereunder.
32. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALSIMPACTING THE GOING CONCERN STATUS OF THE COMPANY
There has been no significant and material order passed by the regulators or courts ortribunals impacting the going concern status and the Company's operations. All the ordersreceived by the Company during the year are of routine in nature which have nosignificant/ material impact.
33. ANNUAL EVALUATION OF BOARD ITS COMMITTEES AND INDIVIDUAL DIRECTORS
Pursuant to the provisions of the Companies Act 2013 and Regulation 17 of the SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 the Board has carriedout an annual performance evaluation of its own performance the directors individually aswell as the evaluation of its various committee.
A separate exercise was carried out to evaluate the performance of individual Directorsincluding the Chairman of the Board who were evaluated on parameters such as level ofengagement and contribution independence of judgment safeguarding the interest of theCompany and its minority shareholders etc.
The performance evaluation of the Independent Directors was carried out by the entireBoard excluding the Directors being evaluated.
The performance evaluation of the Chairman and Non-Independent Directors was carriedout by the Independent Directors at their separate Meeting.
The Board of Directors expressed its satisfaction with the evaluation process
34. AMOUNT IF ANY PROPOSED TO BE TRANSFERRED TO GENERAL RESERVE There were notransfers to General Reserves during the Financial Year 2016-17.
35. PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES
The information required pursuant to Section 197 read with Rule 5 of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 in respect ofDirectors/ employees of your Company is annexed as Annexure to this Annual Report of yourCompany.
36. MATERIAL CHANGES AND COMMITMENT IF ANY AFFECTING FINANCIAL POSITION OF THECOMPANY FROM THE END OF THE FINANCIAL YEAR AND TILL THE DATE OF THIS REPORT
There has been no material change and commitment affecting the financial performanceof the Company occurred between the end of the Financial Year of the Company to which theFinancial Statements relate and the date of this Report.
37. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS UNDER SECTION 186 OF THE ACT
During the year under review your Company has not granted any Loan Guarantees orInvestments made within the meaning of Section 186 of the Act.
38. CHANGE IN THE NATURE OF BUSINESS
There is no change in the nature of business of the Company during the year underreview.
39. AUDIT COMMITTEE
The Composition of the Audit Committee needs the requirement as per Section 177 of theCompanies Act 2013 and Securities and Exchange Board of India (Listing Obligation andDisclosure Requirement) Regulations 2015. The details related to the composition of theAudit Committee and terms of reference are included in the Corporate Governance Reportwhich forms a part of Annual Report.
40. DISCLOSURE AS PER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTIONPROHIBITION AND REDRESSAL) ACT 2013
Your Directors further state that during the year under review there were no casesfiled pursuant to the Sexual Harassment of Women at workplace (Prevention Prohibition andRedressal) Act 2013.
Your Directors state that no disclosure or reporting is required in respect of thefollowing items as there were no transactions on these items during the year under review:
1. Details relating to deposits covered under Chapter V of the Act.
2. Issue of equity shares with differential rights as to dividend voting or otherwise.
3. Issue of shares (including sweat equity shares) to employees of the Company underany scheme save and except ESOS referred to in this Report.
4. Neither the Managing Director nor the Whole-time Directors of the Company receiveany remuneration or commission from any of its subsidiaries.
5. No significant or material orders were passed by the Regulators or Courts orTribunals which impact the going concern status and Company's operations in future.
Your Directors would like to express their sincere appreciation for the assistance andco-operation received from the financial institutions banks Government authoritiescustomers vendors and members during the year under review. Your Directors also wish toplace on record their deep sense of appreciation for the committed services by theCompany's executives staff and workers
| ||For and on behalf of the Board of Directors |
|Place: Mumbai. ||Pankaj Seth |
|Dated: May 22 2017 ||Chairman & Managing Director |