Oricon Enterprises Limited
Your Directors have pleasure in presenting the FIFTIETH ANNUAL REPORT of the Companytogether with the Audited Financial Statement(s) of the Company for the year ended March31 2020.
1. Financial Results:
|Particulars || |
| ||2019-20 ||2018-19 ||2019-20 ||2018-19 |
|Gross Profit ||8422.99 ||8160.54 ||12923.33 ||14269.00 |
|Deduction there from: || || || || |
|Finance Cost ||1249.97 ||1101.22 ||1772.50 ||1788.81 |
|Depreciation ||3762.42 ||2784.18 ||9036.19 ||7537.49 |
|Profit before prior period adjustment ||3410.60 ||4275.14 ||2114.64 ||4942.70 |
|Prior Period adjustment ||- ||- ||- ||- |
|Profit before taxation and exceptional items ||3410.60 ||4275.14 ||2114.64 ||4942.70 |
|Exceptional Item ||500.00 ||- ||300.00 ||- |
|Share of Profit of Joint Ventures ||- ||- ||(0.03) ||- |
|Profit before tax ||3910.60 ||4275.14 ||2414.61 ||4942.70 |
|Less: Provision for Taxation || || || || |
|Current Tax ||1009.00 ||830.00 ||1459.00 ||1240.00 |
|Current Tax for earlier years ||133.71 ||17.33 ||133.71 ||(81.99) |
|Deferred Tax ||(642.88) ||203.33 ||(1737.57) ||(248.77) |
|Profit after tax ||3410.77 ||3224.48 ||2559.47 ||4033.46 |
|Net Profit from continuing operation ||3410.77 ||3224.48 ||2559.47 ||4033.46 |
|Net Profit ||3410.77 ||3224.48 ||2559.47 ||4033.46 |
|Retained Earnings: || || || || |
|Net Profit ||3410.77 ||3224.48 ||2559.47 ||4033.46 |
|Retained Earnings: || || || || |
|Opening Balance ||9477.00 ||7112.52 ||33851.46 ||31164.01 |
|Add: || || || || |
|Profit for the year ||3410.77 ||3224.48 ||2255.66 ||3630.47 |
|Other Comprehensive Income ||135.47 ||25.76 ||136.43 ||3.79 |
|Lease Rental IND AS effect(net of taxes) ||(4.10) ||- ||(72.77) || |
|Transactions with owners in capacity as owners || || || || |
|Dividend Paid ||(2041.62) ||(785.24) ||(2041.62) ||(785.24) |
|Tax on Dividend Paid ||(144.98) ||(100.52) ||(144.98) ||(161.57) |
|Retained earnings to be carry forward. ||10832.54 ||9477.00 ||33984.18 ||33851.46 |
2. Financial Performance Standalone
Sales and Other Income for the year ended March 312020 amounted to Rs. 609.25 Croresas against Rs. 657.15 crores in the previous Financial Year. Net Profit for the year underreview was Rs. 34.11 Crores as against Rs. 32.24 crores in the previous Financial Year.
The consolidated revenue for the year ended March 312020 was Rs. 953.42 crores asagainst Rs. 1156.52 crores in the previous Financial. Net Profit for the year under reviewwas Rs. 25.59 crores as against Rs. 40.33 crores in the previous Financial Year.
The Board of Directors of your Company in its meeting held on 11th March 2020 hadapproved an Interim Dividend @40% i.e. Rs. 0.80 per Equity Share (including Special GoldenJubilee Dividend of Rs. 0.30 per Equity Share) for the Financial Year 2019-20 which waspaid by the Company on 27th March 2020. The total outgo for the interim dividend was Rs.1514.63 lakhs inclusive of divided distribution tax. The Board has not recommended anyfurther dividend hence the interim dividend paid is to be treated as interim cum finaldividend for the year under consideration.
On March 25th 2020 the Government of India had declared COVID-19 as health emergencyand ordered closure of all non-essential business. Accordingly all our manufacturingunits were kept shut from 25th March 2020 to 15th April 2020. The Company has sinceafter receiving required permissions partially commenced operations and scaling up thesame gradually.
COVID-19 has severely impacted businesses globally and in India. The lockdown has alsoimpacted the demand for company's products. The Company's management has made initialassessment of likely adverse impact on business and financial risks. The Company has usedthe principles of prudence in applying judgments estimates and assumptions includingsensitivity analysis and based on the current estimates the Company expects to recoverthe carrying amount of receivables trade receivables tangible assets and investmentsincluding investment in subsidiaries. The Company has evaluated the potential impact ofCOVID-19 on the operations of the Company.
Based on its assessment the Company is of the view that there is no significant impacton the carrying value of its assets and liabilities as at March 312020 and on thefinancial performance for the year ended March 312020. However for the financial year2020-21due to the uncertainties associated with the pandemic the actual impact may notbe in line with current estimates. The Company will continue to closely monitor anychanges to the estimates basis future economic conditions. In light of this uncertaintythe extent to which the coronavirus pandemic may impact the Company's operating resultsfinancial condition and cash flows will depend on future developments and cannot bepredicted at this stage. Further the impact assessment does not indicate any adverseimpact on the ability of the company to continue as a going concern.
5. Joint Venture with Tecnocap
During the year on February 28 2020 the Company has entered into a Joint VentureAgreement with TGP Technocap Group Partecipazioni S.R.L. Italy holding company ofTecnocap group. The Company shall hold 25% Equity shares (2500 shares Rs. 0.25 lakhs) ofTecnocap Oriental Private limited and 75% equity shares will be held by TGP TechnocapGroup Partecipazioni S.R.L. Italy. The Company shall further invest Rs. 550 lakhsconstituting 25% of the issued and paid up share capital of Joint Venture Company.
The Company has also entered into a Business Transfer Agreement ("Agreement")on February 28 2020 with Tecnocap Oriental Private Limited a Joint Venture Companypursuant to which the Company proposes to transfer on slump sale basis its businessundertaking pertaining to manufacturing of Lug Caps Business subject to fulfilment ofcertain conditions precedent for a consideration of Rs. 1875 lakhs plus/minuspost-closing adjustment of working capital amount and less actuarial liabilities onaccount of gratuity/earned leave to identified employees.
6. Subsidiary Joint Venture and Associate Companies
During the year under review following were the Subsidiary Companies and Joint VentureCompany of the Company:
|S.No Name of the Entity ||Relationship |
|1 United Shippers Limited ||Subsidiary |
|2 Reay Road Iron & Metal Warehousing Private Limited ||Subsidiary |
|3 Oriental Containers Limited (Formerly Known as Pelliconi Oriental Limited) ||Subsidiary |
|4 Claridge Energy LLP ||Joint Venture |
|5 Tecnocap Oriental Private Limited ||Associate |
A separate statement containing the salient features of financial statements of all thesubsidiaries of your Company forms part of Annual Report in the prescribed Form AOC-1 as AnnexureI in compliance with Section 129 and other applicable provisions if any of theCompanies Act 2013.
The Financial Statements of the subsidiary companies and related information areavailable for inspection by the Members at the Registered Office of the Company during thebusiness hours on all days except Saturdays Sundays and public holidays up to the date ofthe Annual General Meeting (AGM) as required under Section 136 of the Companies Act 2013.Further in line with the SEBI (Listing Obligations and Disclosures Requirements)Regulations 2015 and in accordance with IND AS - 110 Consolidated Financial Statementprepared by the Company includes financial information of its subsidiaries.
The Company will provide a copy of Annual Report and other documents of its subsidiarycompanies on the request made by any Member investor of the Company/ SubsidiaryCompanies. The Financial Statements of the Subsidiary Companies have been kept forinspection by any Member at the Registered Office of the Company. The statements are alsoavailable on the website of the Company www.oriconenterprises.com
7. Transfer of Unpaid/ Unclaimed Dividend and Shares thereof to IEPF
During the year under review the Company has transferred a sum of Rs. 214039.32/- tothe Investor Education and Protection Fund established by the Central Government incompliance with the provisions of Section 125 of the Companies Act 2013. The said amountrepresents dividends which were declared by the Company in the financial year 2011-12 andwere lying unpaid/unclaimed with the Company for a period of seven years from the date ofits transfer into unpaid dividend account.
The detailed list of members whose unpaid/unclaimed dividend has been transferred toIEPF is uploaded on the website of the Company athttps://www.oriconenterprises.com/pdf/Dividend%20Transf erred%20to%20IEPF%202011-12.pdf
Further pursuant to provisions of Section 125 of the Companies Act 2013 the Companyhas also transferred shares to IEPF on which dividend has not been claimed for the lastseven years i.e. dividend declared by the Company for the financial year 2011-12.
The detailed list of members whose shares has been transferred to IEPF is uploaded onthe website of the Company at https://www.oriconenterprises.com/pdf/Transfer%20of%20Shares%20to%20IEPF-2011-12.pdf
8. Directors and Key Managerial Personnel
In accordance with the requirements of the Companies Act 2013 and Articles ofAssociation of the Company Mr. Varun Somani and Mr. Susheel G. Somani Director of theCompany retire by rotation at the forthcoming Annual General Meeting and being eligibleoffer themselves for reappointment as Director liable to retire by rotation.
9. Details of Committees of the Board
At present the Board has following five (5) Committees:
Nomination and Remuneration Committee
Stakeholders' Relationship Committee and
Corporate Social Responsibility Committee.
The Composition of the Committees and relative compliances are in line with theapplicable provisions of the Companies Act 2013 read with the Rules and SEBI (ListingObligations and Dislcosures Requirements) Regulations 2015. Details of terms of referenceof the Committees Committees' Membership and attendance at meetings of the Committeesexcept CSR Committee are provided in the Report on Corporate Governance.
10. Corporate Social Responsibility Committee
The constitution composition terms of reference role powers rights obligations ofCorporate Social Responsibility Committee [CSR Committee'] are in conformitywith the provisions of Section 135 and all other applicable provisions of the CompaniesAct 2013 read with the Companies (Corporate Social Responsibility Policy) Rules 2014.
The CSR Committee consists of the following Members as on March 312020:
|Name ||Designation ||Non-Executive/Independent |
|Mr. Adarsh Somani ||Chairman ||Joint Managing Director |
|Mr. Vijay Bhatia ||Member ||Independent Director |
|Mr. Vinod Mimani ||Member ||Independent Director |
11. Corporate Social Responsibility
During the year under review the Company has spent Rs.2.10 lacs on Corporate SocialResponsibility as per the CSR policy of the Company.
The Annual report on CSR activities in accordance with the Companies (Corporate SocialResponsibility Policy) Rules 2014 is set out as Annexure II forming part of thisReport.
12. Policy on Directors' appointment and remuneration
The Nomination and Remuneration Committee is entrusted with the responsibility ofidentifying and ascertaining the integrity qualification expertise and experience of theperson for appointment as Director KMP or at Senior Management level and recommendingtheir appointment for the consideration of the Board.
The Company has drawn up Nomination and Remuneration policy in line with therequirement of Section 178 of the Companies Act 2013. The Policy inter alia provides thata person should possess adequate qualification expertise and experience for the positionhe/she is considered for appointment. The Committee has discretion to decide whetherqualification expertise and experience possessed by a person is sufficient/satisfactoryfor the concerned position.
13. Vigil Mechanism/Whistle Blower Policy
The Company has a Vigil Mechanism cum Whistle Blower Policy (Vigil Mechanism') inplace. The Vigil Mechanism is a system for providing a tool to the employees of theCompany to report violation of personnel policies of the Company unethical behaviorsuspected or actual fraud violation of code of conduct. The Company is committed toprovide requisite safeguards for the protection of the persons who raise such concernsfrom reprisals or victimization.
The Policy provides for direct access to the Chairperson of the Audit Committee inappropriate or exceptional cases. The Board of Directors affirm and confirm that noemployee of the Company has been denied access to the Committee.
Details of the Vigil Mechanism are available on the Company's websitewww.oriconenterprises.com
14. Risk Management
The Company has adopted a Risk Management Policy in accordance with the provisions ofthe Companies Act 2013 which laid down the framework to identify evaluate business risksand opportunities. The Company has vested powers to the Audit Committee to regulate therisk identification assessment analysis and mitigation with the assistance of theInternal Auditor. The Company has procedures in place for informing the Board of Directorson risk assessment and management procedures. Senior management periodically reviews thisrisk management framework to keep updated and address emerging challenges. The managementis however of the view that none of the risks may threaten the existence of the Companyas risk mitigation mechanism is put in place to ensure that there is nil or minimum impacton the Company in case any of these risks materialize.
15. Policy on Prevention Prohibition and Redressal of Sexual Harassment at Workplace
The Company is committed to provide a healthy environment to all employees and thusdoes not tolerate any sexual harassment at workplace. The Company has in place ''Policyon Prevention Prohibition and Redressal of Sexual Harassment.'' The policy aims toprovide protection to employees at the workplace and preventing and redressing complaintsof sexual harassment and it covers matters connected or incidental there to.
The Company has in place internal complaints committee as required under the provisionsof Sexual harassment of Women at Workplace (Prevention Prohibition and Redressal) Act2013.
The Company has not received any complaint of sexual harassment during the financialyear 2019-20.
16. Adequacy of Internal Financial Controls with reference to the Financial Statements
The Company has devised appropriate systems and framework for adequate internalfinancial controls with reference to financial statements commensurate with the sizescale and complexity of its operations including proper delegation of authority policiesand procedures effective IT systems aligned to business requirements risk based internalaudit framework and risk management framework.
The Audit Committee regularly reviews the internal control system to ensure that itremains effective and aligned with the business requirements. In case weaknesses areidentified as a result of the reviews new procedures are put in place to strengthencontrols.
Further the Board annually reviews the effectiveness of the Company's internal controlsystem. The Directors and Management confirm that the Internal Financial Controls (IFC)are adequate with respect to the operations of the Company.
A report of the Auditors pursuant to Section 143(3) (i) of the Companies Act 2013certifying the adequacy of Internal Financial Controls is annexed with the Auditors'Report.
17. Number of Board Meetings
Six meetings of Board of Directors were held during the financial year 2019-20 on 27thApril 2019 25th May 2019 09th August 2019 09th November 2019 08th February 2020and 11th March 2020. The details of the Board Meeting and the attendance of the Directorsare provided in the Corporate Governance Report forming part of this Annual Report.
18. Annual Evaluation of Board Performance
Pursuant to the provisions of the Companies Act 2013 and SEBI (Listing Obligations andDisclosures Requirements) Regulations 2015 the performance evaluation of the Chairmanand the Non Independent Directors was carried out by the Independent Directors in theirmeeting held on February 08 2020 who also reviewed the performance of the Board as whole.
The Nomination and Remuneration Committee has defined the evaluation criteriaprocedure for the performance evaluation of the Board of Directors.
The Board's functioning was evaluated on various aspects including inter alia degreeof fulfillment of key responsibilities Board Structure and Composition effectiveness ofBoard process information and functioning.
The Directors were evaluated on aspects such as attendance and contribution atBoard/Committee Meeting 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 of allBoard Members.
Evaluation of Independent Directors was done by the entire Board.
19. Particulars of Loans Guarantees and Investments
Particulars of Loans Guarantees and Investment as required under Section 186 of theCompanies Act 2013 read with the Companies (Meeting of Board and its Powers) Rules 2014are given in Notes no. 8 9 10 and 16 forming part of Financial Statements.
20. Particulars of contracts or arrangements with related parties
All Related Party Transactions that were entered into during the financial year were onan arm's length basis in the ordinary course of business and were in compliance with theapplicable provisions of the Companies Act 2013 (the Act') and the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015.
There are no material contracts or arrangements or transactions during the year. Thusthe disclosure in Form AOC-2 under Section 134(3)(h) of the Companies Act 2013 is notapplicable.
The Disclosures as required under IND AS- 24 'Related Party Dislcosures''notified under Rule 7 of the Companies (Accounts) Rules 2014 have been provided in NoteNo. 49 of the Notes forming part of the Financial Statements.
21. Declaration of Independent Directors
The Independent Directors have submitted their disclosures/ declarations to the Boardthat they fulfill all the requirements as stipulated in Section 149(6) of the CompaniesAct 2013 so as to qualify themselves to be appointed as Independent Directors under theprovisions of the Companies Act 2013 and the relevant rules.
22. Directors Responsibility Statement
The Board of Directors of the Company confirm:
(i) that in the preparation of the annual accounts for the year ended March 31 2020the applicable Accounting Standards have been followed;
(ii) that the Directors have selected such accounting policies and applied themconsistently and made judgments and estimates that were reasonable and prudent so as togive a true and fair view of the state of affairs of the Company at the end of thefinancial year and of the profit of the Company for the year under review;
(iii) that the Directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the Provisions of the Companies Act 2013for safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities;
(iv) that the Directors have prepared the annual accounts for the year ended 31stMarch 2020 on a going concern' basis;
(v) that the Directors have laid down internal financial control and that such internalfinancial control are adequate; and
(vi) that the Directors have devised proper system to ensure compliance with theProvisions of all applicable laws.
23. Credit Rating
Working capital facilities of the Company have been awarded CRISIL A-/Stable for Longterm and CrISIL A2+ for short term rating by CRISIL which represent positive capacity fortimely payment of short term debt obligations for the Financial Year ending 2019-20.
The Credit Rating for the year 2020-21 is being done by CRISIL and is in the process.On receipt of credit rating necessary disclosure will be filed with the Stock Exchange(s).
24. Disclosures Relating to Remuneration of Directors Key Managerial Personnel AndParticulars of Employees
The information required under Section 197 of the Companies Act 2013 read with Rule5(1) Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 inrespect of Directors/ Employees of the Company is appended in Annexure III formingpart of this Report.
In accordance with provisions of Section 197 of the Companies Act 2013 read with Rule5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014are required to be given in Directors Report. In terms of provisions of Section 136(1) ofthe Companies Act 2013 this report is being sent to the members without this annexure.Members interested in obtaining copy of the annexure may write to the Company Secretaryand the same will be furnished on request. The said information is available also forinspection at the registered office of the Company during working hours.
25. Extract of Annual Return
In terms of requirement of Section 92 of the Companies Act 2013 read with theCompanies (Management and Administration) Rules 2014 details forming part of the extractof annual returns is enclosed in Annexure IV forming part of this report.
Pursuant to the amended provisions of Section 92(3) and 134(3)(a) of the Companies Act2013 the Annual Return of the Company in Form MGT-7 is available on the Company's Websitehttp://www.oriconenterprises.com/pdf/Oricon%20Signed%20Form_MGT-7_2019.pdf
26. Disclosure of Particulars
Information's as per the provisions of Section 134(3)(m) of the Companies Act 2013read with Rule 8(3) of the Companies (Accounts) Rules 2014 relating to Conservation ofEnergy Technology Absorption Foreign Exchange Earnings and Outgo is given in AnnexureV forming part of this Report.
27. Management Discussion and Analysis Report
Management Discussion and Analysis Report for the year under review as stipulatedunder the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 isannexed as Annexure VI and forms part of this Annual Report.
28. Corporate Governance
Pursuant to Regulation 34 (3) read with Schedule V of the Securities and Exchange Boardof India (Listing Obligations and Disclosures Requirements) Regulations 2015 a Report onCorporate Governance together with a certificate obtained from Ms. Nirali MehtaPracticing Company Secretary confirming compliance is annexed hereto as Annexure VIIA andAnnexure VII B and forms part of this Annual Report.
a) Statutory Auditors
At the Annual General Meeting of the Company held on July 29 2017 M/s. SGN & Co.(Formerly Known as M/s. Shreyans S Jain and Associates) Chartered Accountants (FRN No.134565W) were appointed as Statutory Auditors of the Company for five consecutivefinancial year. The Auditors have confirmed that they are not disqualified from continuingas Auditors of the Company.
b) Secretarial Auditor and Secretarial Audit Report
The Board has appointed Ms. Nirali Mehta Practicing Company Secretary (M.No. A37734COP No. 20754) to carry out Secretarial Audit under the provisions of Section 204 of theCompanies Act 2013 for the Financial Year 2019-20. The Report of Secretarial Auditor isannexed to this report as Annexure VIIC.
c) Internal Auditors
The Board has appointed M/s Maximus Management Advisory Services Private Limited asinternal auditors of the Company for the Financial Year 2019-20.
For the year 2020-21 the Board in its meeting held on 26th June 2020 has re-appointedM/s Maximus Management Advisory Services Private Limited as Internal Auditor.
d) Cost Auditors
The Board at its meeting held on 26th June 2020 on the recommendation of AuditCommittee the Board has appointed M/s Dilip M Malkar & Co. Firm Registration No:101222 for the Financial Year 2020-21.
The remuneration payable to the Cost Auditor for Financial Year 2020-21 is required tobe ratified by the members in ensuing Annual General Meeting. Accordingly a resolutionfor the remuneration of Cost Auditor is included in the notice of Annual General Meeting.
30. Business Responsibility Report
SEBI vide its notification no. SEBI/LAD-NRO/GN/2019/45 dated 26.12.2019 (Securities andExchange Board of India - Listing Obligations and Disclosure Requirements) (FifthAmendment) Regulations 2019 has extended the applicability of Business ResponsibilityReport from top 500 Listed Companies to top 1000 Listed Companies. On NSE OriconEnterprises Limited is among top 1000 listed entities as per market capitalization as on31st March 2020. The Board has adopted Business Responsibility Policy at its meeting heldon 26th June 2020 and as required the Business Responsibility Report (BRR) is attached tothe Annual Report as Annexure VIII and forms part of this report.
31. Secretarial Standards
The Directors state that applicable Secretarial Standards i.e. SS-1 and SS-2 relatingto Meetings of the Board of Directors' and General Meeting' respectivelyhave been duly followed by the Company.
32. Other Disclosures/Reporting:
Your Directors further state that during the year under review:
a) no amount was transferred to General Reserve;
b) there was no change in nature of Business;
c) there was no change in the Authorized Share Capital of the Company during the year.
d) the Company has not taken any deposits from Public or Members of the Company;
e) there were no significant/material orders passed by the Regulators or Courts orTribunals impacting going concern status of your Company and its operations in future;
f) there were no other material changes and commitments affecting the financialposition of the Company which have occurred between the end of the financial year of theCompany to which this financial statements relate and the date of this Report;
g) there are no qualifications reservation or adverse remark or disclaimer made by theStatutory Auditors in their Report;
h) there are no qualifications reservation or adverse remark or disclaimer made by theSecretarial Auditors in their Report;
i) the Company has not issued equity shares with differential rights as to dividendvoting or otherwise and
j) the Company has not issued any sweat equity shares to its employees.
Your Company continued to enjoy cordial relations with its employees at all locations.Your Directors take this opportunity to record their appreciation for the significantoutstanding contribution made by the employees at all levels.
Your Directors express their deep gratitude for the cooperation and support extended tothe Company by its Members Customers Suppliers Bankers Financial Institutions andvarious Government agencies.
|For and on behalf of the Board || |
|Rajendra Somani ||B.K. Toshniwal |
|Managing Director ||Executive Director |
|(DIN: 00332465) ||(DIN: 00048019) |
|Place: Mumbai || |
|Date: 26th June 2020 || |