Your Directors are pleased to present the 35th Annual Report together with auditedfinancial statements for the year ended March 31 2018.
1. FINANCIAL RESULTS
The Company's financial performance for the year ended March 31 2018 is summarizedbelow:
(Amount in Lakhs)
|Sr. No. ||Particulars || |
| || ||March 31 2018 ||March 31 2017 ||March 31 2018 ||March 31 2017 |
|1 ||Revenue from Operations || || || || |
|(a) ||Net Sales ||12520.67 ||12336.79 ||13142.61 ||12720.70 |
|(b) ||Other Operating Income ||502.37 ||716.56 ||502.37 ||716.56 |
|2 ||Other Income ||357.39 ||335.91 ||357.39 ||367.94 |
|3 ||Total Income ||13380.43 ||13389.26 ||14002.37 ||13805.20 |
|4 ||Expenses: || || || || |
|(a) ||Cost of materials consumed ||4741.79 ||4733.82 ||4811.24 ||5003.02 |
|(b) ||Changes in inventories of finished goods work-in-progress and stock- in-trade ||(136.07) ||807.86 ||(44.39) ||637.71 |
|(c) ||Employee benefits expense ||1779.79 ||1434.59 ||1936.65 ||1552.58 |
|(d) ||Finance costs ||53.50 ||180.21 ||53.50 ||180.21 |
|(e) ||Depreciation and amortisation expense ||722.44 ||678.93 ||724.37 ||691.45 |
|(f) ||Power and Fuel ||576.50 ||421.05 ||576.50 ||421.05 |
|(g) ||Other expenses ||2136.72 ||1995.04 ||2417.65 ||2219.17 |
| ||Total Expenses ||9874.67 ||10251.50 ||10475.52 ||10705.19 |
|5 ||Profit/(loss) before share of profit from associates and exceptional items ||3505.76 ||3137.76 ||3526.85 ||3100.01 |
| ||Share of profit/(loss)from associates ||- ||- ||195.86 ||108.18 |
|6 ||Total Profit before Exceptional Items and Tax ||3505.76 ||3137.76 ||3722.71 ||3208.19 |
|7 ||Exceptional Items || || || || |
|(a) ||Profit on sale of Property Plant and Equipment ||- ||54.30 ||- ||54.30 |
|8 ||Profit / (loss) before tax ||3505.76 ||3192.06 ||3722.71 ||3262.49 |
|9 ||Tax Expense || || || || |
|(a) ||Current Tax ||991.19 ||1078.76 ||996.14 ||1084.41 |
|(b) ||Deferred Tax ||23.69 ||35.60 ||23.03 ||33.63 |
|10 ||Net Profit/ (Loss) for the period ||2490.88 ||2077.70 ||2703.54 ||2144.45 |
|11 ||Other Comprehensive Income (net of tax) || || || || |
|(a) ||Items that will not be re-classified to profit or loss || || || || |
|(i) ||Re-measurement of the defined benefit plan (net of tax) ||(9.03) ||5.00 ||(9.03) ||5.00 |
| ||Total Other Comprehensive Income/(Loss) (after tax) ||(9.03) ||5.00 ||(9.03) ||5.00 |
|12 ||Total Other Comprehensive Income/(Loss) (after tax) for the period ||2481.85 ||2082.70 ||2694.51 ||2149.45 |
During the Financial Year 2017-18 your Company has not declared any dividend (Interimand Final) for the Financial Year ended March 31 2018 (last year Rs 1.60/- per EquityShare of Rs 10/- each). The total outgo for the Financial Year 2016-17 was Rs 459.24 lakhs(excluding dividend distribution tax).
3. PERFORMANCE REVIEW
The Revenue from operations for the Company on the Standalone basis for the year2017-18 stood at Rs 13023.04 lakhs as against Rs 13053.35 lakhs in the previous yearreflecting stability of operations in an otherwise uncertain market. Profit before taxstood at Rs 3505.76 lakhs in 2017-18 as compared to Rs 3192.06 lakhs in the previousyear. The Company could withstand adverse market conditions in the overseas market mainlydue to its thrist on achieving internal operational excellence penetration into newmarkets extensive tightening control on inventory management participating in the shift torenewable in energy and exercising stringent cost control measures. Net profit after taxstood at Rs 2490.88 lakhs for the current year as compared to Rs 2077.70 lakhs in theprevious year. Consequently the earnings per share for the year 2017-18 stood at Rs 8.69/-per share as compared to Rs 7.24/- per share in the year 2016-17.
The revenue from operations for the Company of the Consolidated for the year 2017-18stood at Rs 13644.98 lakhs as against Rs 13437.26 lakhs in the previous year reflectingstability of operations in an uncertain market. Profit before tax stood at Rs 3722.71lakhs in 2017-18 as compared to Rs 3262.49 lakhs in the previous year Net profit aftertax stood at Rs 2703.54 lakhs for the current year as compared to Rs 2144.45 lakhs inthe previous year. Consequently the earnings per share for the year 2017-18 stood at Rs9.43/- per share as compared to Rs 7.47/- per share in the year 2016-17.
4. WIND POWER PROJECT
During the year the Company has installed 1.50 MW Windmill at Vejalpar Taluka -Maliya District - Morbi Gujarat.
5. INCORPORATION OF SUBSIDIARY COMPANY
During the year the Company has incorporated Subsidiary Company in UK in the name ofEXCELLERE (UK) Ltd.
6. 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 |
7. CONSOLIDATED FINANCIAL STATEMENTS
Consolidated Financial Statement has been prepared in accordance with provision of theCompanies Act 2013 ("the Act") and the applicable Indian Accounting Standardsalongwith all relevant documents and the Auditors Report form part of this Annual Report.
8. 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.
9. CAPITAL EXPENDITURE
As at 31st March 2018 the gross fixed assets stood at Rs 10756.40 lakhs and net fixedassets Rs 9355.04 lakhs. Additions during the year amounted to Rs 1963.60 lakhs.
10. SHARE CAPITAL
The paid up Equity Share Capital as on March 31 2018 was Rs 2825.79 lakhs. During theyear under review the Company has bought back 444444/- Equity Shares of Rs 10/- each.
11. TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND
During the year the Company has transferred a sum of Rs 1.95 Lacs to the InvestorEducation and Protection Fund in compliance with provisions of the Companies Act 2013which represents unclaimed/ unpaid dividend.
12. 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.
13. 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 312018 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 2018 and of the profit of the Company for the year ended onthat 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.
14. 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 "AnnexureA" to this Report.
15. 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.
16. COMMITTEES OF THE BOARD
The Board of Directors has following Committees:
1. Audit Committee
2. Nomination and Remuneration Committee
3. Stakeholders' Relationship Committee
4. Corporate Social Responsibility Committee
The details of the Committees along with their composition number of meetings held andattendance at the meetings are provided in the Corporate Governance Report.
17. 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.
18. 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. Director(s) appointment andremuneration are made as per NRC Policy of the Company.
19. CORPORATE SOCIAL RESPONSIBILITY
As per provision of Section 135 read with Schedule VII of the Companies Act 2013 alongwith the Companies (Corporate Social Responsibility Policy) Rules 2014 and any otherstatutory amendment or modification thereof and the Company's CSR Policy in respect ofCorporate Social Responsibility activity a separate Report on CSR activities is attachedas "Annexure B" to this Report. The CSR Policy has been posted on the website ofthe Company at HREF="http://www.orbitexports.com/">www.orbitexports.com .
The Company has made a budget of Rs 71.29 Lakhs.
20. MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Management Discussion and Analysis Report on the operations of the Company as requiredunder the Regulation 34 of the SEBI (LODR) Regulations 2015 is provided in a separatesection and forms an integral part of this Report as "Annexure C".
21. 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 Meetingheld on August 24 2015 until the conclusion of 37th Annual General Meetingsubject to ratification of their appointment at every subsequent Annual General Meeting.The Auditors have confirmed that their appointment would be in accordance with theSection 139 of the Companies Act 2013 and rule made thereunder and that they are notdisqualified in terms of Section 141 of the Act.
22. 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 2019 on a remuneration as mentioned in the Notice conveningthe 35th Annual General Meeting for conducting the audit of the cost recordsmaintained by the Company.
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 35th Annual General Meeting of the Company andsame is recommended for your consideration and approval.
23. 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.
24. VIGIL MECHANISM / WHISTLE BLOWER POLICY
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)
Regulations 2015. The policy provides for a framework and process whereby concerns canbe raised by its employees against any kind of discrimination harassment victimizationor any other unfair practice being adopted against them. More details on the vigilmechanism and the Whistle Blower Policy of your Company have been outlined in theCorporate Governance Report which forms part of this report.
25. 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 year2017-18 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 2017-18 there were transactions with therelated parties which qualify as material transactions under Listing Agreement.
The details of the related party transactions are disclosed in the notes to accountsannexed to the standalone financial statement forming 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. Material Related Party Transactions i.e. transactionsexceeding 10% of the annual consolidated turnover as per the last audited financialstatements were entered during the year by your Company. Accordingly the disclosure ofRelated Party Transactions as required under Section 134(3)(h) of the Companies Act 2013in Form AOC-2 is attached as Annexure D.
26. 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 is also committed to creating value for its other stakeholders by ensuring thatits corporate actions positively impact the socio-economic and environmental dimensionsand contribute to sustainable growth and development.
27. DIRECTORS AND KEY MANAGERIAL PERSONNEL
In accordance with the provisions of Section 152 of the Companies Act 2013 andCompany's Articles of Association Mr. Bruce Larry Kieval Director of the Companyretires by rotation at the ensuing Annual General Meeting and being eligible has offeredhimself 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.
28. 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 of options granted: 151000
Exercise Price: 52000 options granted at an exercise price of Rs 69.75/- per option95000 options granted at an exercise price of Rs 342/- per option and 4000 optionsgranted at an exercise price of Rs 348.50/-.
Options vested: 52000 options and 95000 options and 4000 options.
Options exercised: On 5th November 2015 company allotted 30000 equityshares pursuant to exercise of 30000 stock options by the employees of the Company.
On 29th January 2016 company allotted 13000 equity shares pursuant toexercise of 13000 stock options by the employees of the Company.
On 2nd April 2016 company allotted 9000 equity shares pursuant toexercise of 9000 stock options by the employees of the Company.
29. NUMBER OF MEETINGS OF THE BOARD
During the year under review 7 (Seven) Meetings of the Board of Directors of theCompany were convened and held. The relevant details including composition of the Boarddate of meetings 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 .
30. 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 E" 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.
32. 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.
33. 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.
34. 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.
35. AMOUNT IF ANY PROPOSED TO BE TRANSFERRED TO GENERAL RESERVES
There was no transfer to General Reserves during the Financial Year 2017-18.
36. 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 F" to this AnnualReport of your Company.
37. 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.
38. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS UNDER SECTION 186 OF THE ACT
During the year the Company has granted Inter Corporate Deposit of Rs 50 Lakhs to M/s.Shahlon Silk Industries Pvt. Ltd. for a period of 6 months and at an interest rate of 12%p.a. and which was further extended for a period of 6 months and received back the InterCorporate Deposit from Shahlon Silk Industries Pvt. Ltd. on 27th March 2018.
The Company has also granted Inter Corporate Deposit of Rs 25 Lakhs to Wampum Syntexfor a period of 6 months and at an interest rate of 12% p.a..
39. CHANGE IN THE NATURE OF BUSINESS
There is no change in the nature of business of the Company during the year underreview.
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.
42. OTHER DISCLOSURE
1. The Company has complied with Secretarial Standards issued by the Institute ofCompany Secretaries of India on Board and General Meeting.
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 |
| ||Pankaj Seth |
| ||Chairman & Managing Director |
|Place: Mumbai || |
|Date: May 30 2018 || |