Your directors are pleased to submit the FORTY FIFTH annual report of the Company alongwith the audited financial statements for the financial year ended March 31 2016.
| || ||(Rs. In Lacs) |
|particulars ||2015-2016 ||2014-2015 |
|Revenue from Operations (Gross) ||31131.15 ||20427.24 |
|Less: Excise Duty ||2501.38 ||2136.48 |
|Revenue from Operations (Net) ||28629.77 ||18290.76 |
|Add:- Other Income ||205.64 ||90.27 |
|Total Revenue ||28835.41 ||18381.03 |
|Profit before depreciation interest and tax ||4944.31 ||3048.68 |
|Less: Depreciation ||896.22 ||1059.07 |
|Interest ||340.45 ||275.71 |
|Profit before Income Tax ||3707.64 ||1713.90 |
|Less: Income Tax ||1346.48 ||482.98 |
|Net Profit for the year ||2361.16 ||1230.92 |
|Add: Balance brought forward from the previous year ||5756.76 ||5300.79 |
|Amount available for appropriation ||8117.92 ||6531.71 |
|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 ||7357.93 ||5756.76 |
operations review and future outlook
The gross turnover of the Company increased to f 31131.15 lacs from f 20427.24 Lacsduring previous year i.e. registering an impressive jump of more than 50 %. AccordinglyProfit Before Tax (PBT) and Net Profit were f 3707.64 Lacs and f 2361.16 Lacsrespectively as compared to f 1713.90 Lacs and f 1230.92 Lacs respectively in theprevious year.
During the year under review the Company sold Bauxite and its value added productsamounting to f 30464.62 Lacs as compared to f 19800.28 Lacs in the previous year. TheCompany has received permission from Gujarat Government for sale of Bauxite. The Marketfor 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 powerdistribution companies was f 666.53 Lacs as compare to f 626.96 Lacs in previous year.
Your Company has a total thermal power plant capacity of 18 MW out of which 9 MW isbased on coal and 9 MW on furnace oil. The furnace oil based power plant is used as andwhen required and same has been found viable. Your directors are hopeful that thecompanys 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 creditrisk.
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 creditrisk.
Based on the Companys performance your directors are pleased to recommend afinal dividend of f 0.25 per share (i.e. 25%) for the financial year 2015-16 on thecapital of 119639200 equity shares of f 1.00 each in previous year it was also f 0.25per share (i.e. 25%).
The final dividend and dividend distributed tax involve the cash out flow of f 359.99Lacs (Previous Year f 359.99 Lacs) the dividend is subject to approval of members of theCompany in the Annual General Meeting.
Share capital audit as per the directives of the Securities and Exchange Board ofIndia is being conducted on a quarterly basis by M/s. Jatin Gupta & AssociatesCompany Secretaries. The Share Capital Audit Reports are duly forwarded to BSE Limitedthe 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 neitherissued shares in general nor with differential voting rights or granted stock options orsweat equity and does not have any scheme to fund its employees to purchase the shares ofthe Company. As on 31s1 March 2016 none of the Directors of the Company hold convertibleinstruments.
The paid up Share Capital of the Company as on 31st March 2016 was Rs. 1196.52 Lacs.
Your Company before the declaration of dividend in every financial year transferssuch percentage of its profits for that financial year to the General Reserve as itconsiders appropriate. Pursuant to the provisions of the Companies Act 2013 in the yearunder review the Company proposes to transfer Rs. 400 Lacs to Reserves.
The members are aware that during the year under reference new set of promoters werereined in consequent upon erstwhile Promoters i.e. Rajgarhia family executing a SharePurchase Agreement with present promoters for change in management and controlling rightsin your Company for which due course of Law of Land was followed. Presently BombayMinerals Limited (BML) are acting as Promoters of the Company.
HOLDING SUBSIDIARY AND ASSOCIATE COMPANY
During the currentyear w.e.f. 15 July 2015 Bombay Minerals Limited became theassociate company of your Company.
SUBSIDIARY COMPANIES AND CONSOLIDATED FINANCIAL STATEMENTS
The Company does not have any subsidiary hence nothing is required to be stated onthis count and the results presented before members are standalone results of Orientabrasives Limited only. It is confirmed that same are prepared in accordance with theaccounting principles generally accepted in India including the Accounting Standardsspecified under Section 133 of the Companies Act 2013 (the Act) read withCompanies (Accounts) Rules 2014 form part of Annual Report and are reflected in theFinancial Statements of the Company.
The annual financial statements and related detailed information will be kept at theRegistered Office of the Company and will be available to investors seeking information atany time.
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 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 ||: NIL |
|(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 theCompany.
During the year there is no significant and/or material order passed by the regulatorsor courts or tribunals impacting the going concern status and companys operations infuture.
The Companys Statutory Auditors M/s SRBC & Co. LLP. (ICAI Firm RegistrationNo. 324982E) Chartered Accountants retire at the conclusion of the ensuing Annual GeneralMeeting and are eligible for re-appointment and had expressed their willingness to bere-appointed.
Your company has also received a certificate from the Auditors to the effect that theyare eligible for appointment under the applicable provisions of the Companies Act 2013and the Companies (Audit and Auditors) Rules 2014 as amended time to time.
Members are requested to appoint the proposed auditors in ensuing AGM from conclusionof this 45th AGM to 46th AGM for a period of one year and authorize the Board of Directorsto fix their remuneration.
M/s. S. K. Rajani & Co. (Firm Registration No. 101113) Cost Accountants have beenappointed to conduct Cost Audits relating of the Company for the year ending 31st March2017. Pursuant to the provisions of Section 148 of the Act read with The Companies (Auditand Auditors) Rules 2014 Members are requested to consider the ratification of theremuneration payable to M/s. S.K.Rajani & Co. (Firm Registration No. 10113)
Pursuant to erstwhile appointment effected said firm had completed audit of affairs ofthe Company and has given their report thereupon. Said report constitutes part and parcelof present annual report.
Pursuant to the provisions of Section 204 of the Act and The Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 Your Board had appointed M/s. JatinGupta & Associates New Delhi a firm of Company Secretaries in Practice to undertakethe Secretarial Audit of the Company for the year ended 31st March 2017. The SecretarialAudit Report is attached as Annexure A.
The Auditors Report for the financial year ended 31st March 2016 do not containany qualification reservation adverse remark or disclaimer. Although the SecretarialAuditor had raised their concern that the Company did not appoint CFO post retirement ofMr. A S Sihag then acting CFO and hence had stated same as a matter of emphasis notqualification since it takes time to recruit persons with caliber of acting as CFO.
The Auditors Report read with notes to the financial statements and otherwise areself-explanatory and does not call for any further explanation.
There are no adverse remark in the audit / Cost / Secretarial/ Directors Report for theyear.
DIRECTORS RESPONSIBILITY STATEMENT
Based on the framework of internal financial controls and compliance systemsestablished and maintained by the Company work performed by the Internal Statutory Costand Secretarial Auditors including audit of the internal financial controls overfinancial reporting by the Statutory Auditors and the reviews performed by Management andthe relevant Board Committees including the Audit Committee your Board is of the opinionthat the Companys internal financial controls were adequate and effective during thefinancial year 2015-16.
Pursuant to the requirements under Section 134 (3) (c) and 134 (5) of the CompaniesAct 2013 your Board hereby confirm that:
(i) in the preparation of the annual accounts for the year ended 31st March 2016 theapplicable accounting standards read with requirements set out under Schedule III to theCompanies Act 2013 have been followed and there are no material departures from thesame;
(ii) the Directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that were reasonable and prudent so as to give a true andfair view of the state of affairs of the Company as at 31st March 2016 and of the Profitof the Company for the year ended as on that date;
(iii) the Directors have taken proper and sufficient care for maintenance of adequateaccounting records in accordance with provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;
(iv) the Directors have prepared the annual accounts of the Company on a "goingconcern" basis;
(v) the Directors have laid down internal financial controls to be followed by theCompany and such internal financial controls are considered adequate and are operatingeffectively; and
(vi) the Directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that systems are considered adequate and operating effectively.
CORPORATE SOCIAL RESPONSIBILITY
Your Companys Participatory Sustainable Development has been an integral part ofthe Companys Community Development Policy. The Company has thus inculcated andadopted an Integrated Sustainability Model representing the Social and Environmentaspects. The Board has thus constituted a Corporate Social Responsibility Committeepursuant to Section 135 of the Companies Act 2013 which presently comprises Mr. PundarikSanyal 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 ofthe 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 Healthcareenvironment and sanitation projects in the State of Gujarat.
The above projects are in accordance with Schedule VII of the Act. The Company hasspent T 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 duringthe three immediately preceding financial years was T 1548.02 lacs. It was hence requiredto spend T 30.96 lacs on CSR activities during the Financial Year 2015-16 being 2% of theaverage net profits of the three immediately preceding financial years.
Furthermore the annual report on CSR activities of the Company for the year underreview 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 onan arms length basis in the ordinary course of business and were in compliance withthe applicable provisions of the Act and the Listing Regulations (erstwhile ListingAgreement entered into with the Stock Exchanges).
During the year the Company had entered into contracts with Bombay Minerals LimitedAshapura Minechem Limited Ashapura Perfoclay Limited Ashapura International Limited andAshapura Foundation related party that is considered material contract in accordance withthe policy of the Company on materiality of related party transactions. The Policy onmateriality of related party transactions and dealing with related party transactions areapproved by the Board may be accessed on the Companys website at the linkhttp://www.orientabrasives.com/QAL%20policies/Related%20Party%20Transactions%20Policy.pdf.
There were no materially significant Related Party Transactions made by the Companyduring the year that would have required Shareholder approval under the ListingRegulations. All Related Party Transactions are placed before the Audit Committee forapproval. Prior omnibus approval of the Audit Committee is obtained for the transactionswhich are repetitive in nature. A statement of all Related Party Transactions is placedbefore the Audit Committee for its review on a quarterly basis specifying the naturevalue and terms and conditions of the transactions.
The Company has adopted a Related Party Transactions Policy. The Policy as approved bythe Board is uploaded on the Companys website.
Details of the transactions with Related Parties are provided in the accompanyingfinancial statements. There were transactions during the year which would require to bereported in Form AQC-2.
Members can refer Note no. 26 to the financial statement which sets out related partydisclosures.
The Annual Report on related party contract is annexed herewith as Annexure C.
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 asMember the Audit committee reviews the key risks mitigation plans and progress of therisk management process at periodic intervals.
This Risk Management framework enables identification and evaluation of business risksand opportunities seeks to create transparency minimize adverse impact on businessobjectives and enhance the Companys competitive advantage. It also describes therisk management approach across the enterprise at various levels.
Major risks identified by business and functions are systematically addressed throughmitigation actions on a periodic basis. Existing control measures are evaluated againstthe relevant Key Performance Indicators.
The Company has laid down procedures to inform the Audit Committee as well as the Boardabout risk assessment and management procedures and status. These procedures areperiodically reviewed to ensure that the executive management monitors and controls risks.The Internal Audit Department is responsible for coordinating with the various heads ofDepartments with respect to risk identification assessment analysis and mitigation. Themajor risks forming part of the Enterprise Risk Management process are linked to the audituniverse 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 andmitigate 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 documentedpolicies and procedures covering all financial and operating functions and processes.These have been designed to provide a reasonable assurance with regard to maintaining ofproper accounting controls for ensuring reliability of financial reporting monitoring ofoperations protecting assets from unauthorized use or losses and compliance withregulations.
Necessary checks and balances are in place to ensure that transactions are adequatelyauthorized and reported correctly. The Internal Auditors of the Company conduct Audits ofvarious departments to ensure that the necessary controls are in place. The AuditCommittee of the Board reviews these and the Company when needed takes correctiveactions.
Details of the internal controls system are given in the Management Discussion andAnalysis Report which forms part of the Boards Report.
APPOINTMENT AND RETIREMENT:
Mrs. Sangeeta Bohra was appointed as Additional Director on the Board of the Companywith effect from 29th September 2015. Pursuant to provisions of Section 161 of the Actand the Articles of Association of the Company Mrs. Sangeeta Bohra vacates office and iseligible for appointment. Members are requested to refer to Item No. 5 of the Notice ofthe Annual General Meeting for details.
All Independent Directors of the Company have given declarations that they meet thecriteria 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 theconditions of independence as specified in the Act and the Rules made there under and areindependent of the management.
Except Mr. Amar Singh Sihag CFO of the Company No Key Managerial Person has beenappointed or has retired or resigned during the year. As a matter of apprising members ason event occurring after closure of FY 2015-2016 we are to state that Mr. Kamlesh KumarMundra 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 theArticles of Association of the Company Mr. Hemul Shah retires and is eligible forre-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 theoverall 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 Boardhas carried out an annual evaluation of its own performance performance of the Directorsas well as the evaluation of the working of its Committees.
The Nomination and Remuneration Committee has defined the evaluation criteriaprocedure and time schedule for the Performance Evaluation process for the Board itsCommittees and Directors. The Boards functioning was evaluated on various aspectsincluding inter alia degree of fulfillment of key responsibilities Board structureand composition establishment and delineation of responsibilities to various Committeeseffectiveness 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/ CommitteeMeetings. In addition the Chairman was also evaluated on key aspects of his roleincluding setting the strategic agenda of the Board encouraging active engagement by allBoard 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 fulfillmentof key responsibilities adequacy of Committee composition and effectiveness of meetings.
The performance evaluation of the Independent Directors was carried out by entireBoard excluding the Director being evaluated. The performance evaluation of the Chairmanand the Non Independent Directors was carried out by the Independent Directors who alsoreviewed the performance of the Board as a whole. The Nomination and RemunerationCommittee 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 asappropriate. Significant high lights learning and action points with respect to theevaluation were presented to the Board.
FAMILIARISATION PROGRAMME FOR BOARD MEMBERS
On appointment the concerned Director is issued a Letter of Appointment setting out indetail the terms of appointment duties responsibilities and expected time commitments.Each newly appointed Independent Director is taken through a formal induction programincluding the presentation from the Director on the Companys manufacturingmarketing finance and other important aspects.
The Company Secretary and/or COO/CEO briefs the Director about their legal andregulatory responsibilities as a Director. The induction for Independent Director includeinteractive sessions with Executive Directors Business and Functional Heads visit tosite etc.
The details of such familiarization programme have been displayed on the companyswebsite link: http:// www. orientabrasives. com/in vestor_ relations.htm
The Company has adopted a Remuneration Policy for the Directors Key ManagerialPersonnel and other employees pursuant to the provisions of the Act and the ListingRegulations. 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 inadvance 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 andMr. Hemul Shah and Mrs. Sangeeta Bohra as Members. There have been no instances during theyear 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 andattendance of the Directors at such Meetings are provided in the Corporate GovernanceReport. The intervening gap between the Meetings was within the period prescribed underthe Act and the Listing Regulations.
CODE OF CONDUCT
The Company has laid down a code of conduct for the directors and senior managementpersonnel. It is available on the website of the Company www.orientabrasives.com. Adeclaration by the Whole Time Director regarding annual affirmation of compliance of thecode by all concerned is annexed to the report on Corporate Governance. With a view toregulate trading in securities by Directors KMP & Designated Employees the companyadopted a code of conduct to Regulate Monitor and Report Trading by Insiders.
The industrial relations with staff and workers during the year under review continueto be cordial.
The Companys human resources continue to be its most valuable asset. The team hasremained as committed as ever and produced results that are considered significant.Quality quick delivery and focus on resolving customer issues are the hallmark of theteam performance.
There is a strong focus on team spirit during the year many events/training programswere conducted to develop personality and outlook of its employees. Employee relationscontinue 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 managementpersonnel have affirmed compliance with the code of conduct for the year ended March 312016 is attached as Annexure-H.
A certificate from the Practicing Company Secretary regarding compliance of theconditions of Corporate Governance as stipulated is enclosed as Annexure-I. CEO/CFOcertificate is enclosed as Annexure-J.
The Audit Committee comprised of Mr. Pundarik Sanyal (Chairman) Independent DirectorMrs. Sangeeta Bohra Independent Director and Mr. Hemul Shah Non Independent Director.
Audit Committee has not on any occasion recommended any suggestions warranting anysuggestion/deliberation. Number of Board Meeting
The Board of Directors of the Company met 10 (Ten) times in the year the details ofwhich 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 withRules 5(2) and (5)3 of the companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 and in terms of provisions of section 136(1) of the Act the AnnualReport excluding the aforesaid is being sent to the members of the Company. The saidinformation is available at the corporate office of the company during the working hoursand any member interested in obtaining such information may write to the CompanySecretary.
POLICY ON PREVENTION PROHIBITION AND REDRESSAL OF SEXUAL HARASSMENT AT WORKPLACE
The Company has zero tolerance for sexual harassment at workplace and has adopted aPolicy on Prevention Prohibition and Redressal of Sexual Harassment at the Workplace inline with the provisions of the Sexual Harassment of Women at Workplace (PreventionProhibition 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 sexualharassment and for matters
connected or incidental thereto with the objective of providing a safe workingenvironment where employees feel secure. The Company has also constituted an InternalComplaints Committee known as the Prevention of Sexual Harassment (POSH) Committee toinquire into complaints of sexual harassment and recommend appropriate action.
The Company has not received any complaint of sexual harassment during the financialyear 2015-16.
No disclosure or reporting is required in respect of the following items as there wereno 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 ofthe Company under any scheme.
4. No significant or material orders were passed by the Regulators or Courts orTribunals which impact the going concern and Companys operation in future.
The Company has adopted a Whistle Blower Policy to provide a formal mechanism to theDirectors and employees to report their concerns about unethical behavior actual orsuspected fraud or violation of the Companys Code of Conduct or ethics policy. ThePolicy provides for adequate safeguards against victimization of employees who avail ofthe 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 AuditCommittee. The Policy on vigil mechanism and whistle blower policy may be accessed on theCompanys website at www.orientabrasives.com
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO
Information relating to Conservation of Energy Technology Absorption Foreign ExchangeEarnings and Outgo required to be made pursuant to section 134(3)(m) of the Companies Act2013 read with rule 8 of the Companies (Accounts) Rules 2014 is given in Annexure-E andforms part of this report.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
During the year there were no loans guarantees or investments extended by theCompany.
EXTRACT OF ANNUAL RETURN
The Extract of Annual Return in form MGT 9 as per Section 92(3) of the Companies Act2013 and Rule 12(1) of the Companies (Management and Administration) Rules 2014 is setout in Annexure-D forming part of this report. MANAGEMENT DISCUSSION AND ANALYSIS
Notes on Management Discussion and Analysis of the company have been given inAnnexure-F and forms part of this report.
Your Board would like to express its sincere appreciation for the support of theshareholders employees suppliers and commercial partners during the year for theircontinued support and guidance to the Companys management which certainlyencourages the management in meeting the challenges in the Companys growth journey.
| ||For and on behalf of the Board |
| ||Sd/- |
| ||Mihir H Devani |
| ||Whole Time Director and CEO |
|Place: Mumbai ||(DIN-07238089) |
|Date: 09.08.2016 || |