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Orient Refractories Ltd.

BSE: 534076 Sector: Engineering
BSE 00:00 | 18 Jun 312.45 3.05






NSE 00:00 | 18 Jun 312.20 2.30






OPEN 309.30
VOLUME 36623
52-Week high 339.00
52-Week low 139.00
P/E 51.05
Mkt Cap.(Rs cr) 3,753
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 309.30
CLOSE 309.40
VOLUME 36623
52-Week high 339.00
52-Week low 139.00
P/E 51.05
Mkt Cap.(Rs cr) 3,753
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Orient Refractories Ltd. (ORIENTREF) - Director Report

Company director report

Dear Shareholders

The Directors present the Annual Report of Orient Refractories Limited (the Company orORL) along with the audited financial statements for the financial year ended 31 March2020. The consolidated performance of the Company and its subsidiary has been referred towherever required.


(Amount in Rs. Lacs)




2019-20 2018-19 2019-20 2018-19
Gross revenue from operations 69609.40 74794.70 69968.82 74794.70
Total expenditure before finance cost and depreciation 57486.45 61996.63 57787.24 61996.63
Operating Profit 12122.95 12798.07 12181.58 12798.07
Add: Other income 642.57 1817.29 660.83 1817.29
Profit before finance cost depreciation exceptional items and taxes 12765.52 14615.36 12842.41 14615.36
Less: Finance costs - - - -
Profit before depreciation exceptional items and taxes 12765.52 14615.36 12842.41 14615.36
Less: Depreciation 1095.77 863.12 1109.44 863.12
Profit/(Loss) before exceptional items & tax 11669.75 13752.24 11732.97 13752.24
Add/(Less): Exceptional Items - - - -
Profit before taxes 11669.75 13752.24 11732.97 13752.24
Less: Tax Expense 2944.67 4769.58 3046.42 4769.58
(A) Profit/(Loss) after taxes 8725.08 8982.66 8686.55 8982.66
(B) Total other comprehensive income (59.96) (19.51) (59.96) (19.51)
(C) Total comprehensive income for the period [ A + B ] 8665.12 8963.15 8626.59 8963.15
Retained Earnings: Balance brought forward from the previous year 36422.14 31079.84 36422.14 31079.84
Add: Profit for the period 8725.08 8982.66 8686.55 8982.66
Add: Addition on 18 May 2019 on account of acquisition of Subsidiary - - 0.90 -
Add: Other Comprehensive Income recognised in Retained Earnings (59.96) (19.51) (59.96) (19.51)
Balance Which the Directors have apportioned as under to: 45087.26 40042.99 45049.63 40042.99
(i) Dividend on Ordinary Shares 3003.48 3003.48 3003.48 3003.48
(ii) Tax on dividends 617.37 617.37 617.37 617.37
Total Appropriations 3620.85 3620.85 3620.85 3620.85
Retained Earnings: Balance to be carried forward 41466.41 36422.14 41428.78 36422.14

*The Company first time consolidated its financial with subsidiary company thefinancial information of subsidiary company considered in the consolidated financialstatements are of the period 18 May 2019 to 31 March 2020.


The Company's sale was reduced by 6.93% in the financial year 2019-20 to Rs. 69609. 40lacs as compared to previous year 2018-19 which was Rs.74794.70 lacs. The profit beforetax was Rs. 11669.75 lacs during the financial year 2019-20 which is 15.14% lower thanthe previous year profit before tax Rs. 13752.24 lacs.


The Indian economy was in the midst slowdown in 2019 with steel demand remaining tepidthroughout the year. The first two months of 2020 raised the hope both in services andmanufacturing sector but COVID-19 pandemic impacted Indian economy negatively. Anationwide lockdown was declared on 24th March 2020 & extended till June 2020. Allsocioeconomic activities came to a standstill.

The pandemic has impacted the steel production and consumption in all the majoreconomies. The supply side adjustment by major manufacturers is expected to strike abalance in the already existing oversupply market. Indian steel production and imports hasalready declined in the month of April and May 2020. While work force mobilization will bekey challenge for core sectors of the economy lower energy prices and expectation ofnormal monsoon will help revive steel demand in India. The targeted policy measures andthe financial stimulus of Rs. 20 trillion announced by the government is expected tomitigate the economic fallout due to the pandemic. Supply side adjustment and elevatedexports will help offset weak domestic demand and result in gradual recovery in secondhalf of financial year'2021. With partial lifting of lockdown underway across severaleconomies re-emergence of the pandemic will post a risk to the expected recovery in steeldemand.


The Company has taken appropriate measures to ensure safety and health of all itsemployees and ensured due compliance with various directives issued by Central State andMunicipal authorities. The Company has adopted Work from home for its office-basedemployees effective mid of March'2020 to minimize the risk. Consequent to the lock-downorders issued by Central and State Governments the operations have been disrupted from 24March 2020 at both the Plants situated at Bhiwadi Rajasthan & Cuttack Orrisa andacross different sites facilities and distribution centres as per the directivesapplicable to them. To meet the customers requirement and uninterrupted supplies theCompany started dispatches of the finished goods from 20 April 2020 and after obtainingrequisite permission from concerned district administration the Company has resumed theirlimited operation from 8 May 2020 at both Plants in compliance with all the safetyguidelines/ directives issued by the Central/ State Governments and local administrationto safeguard the employees labourers and all other stakeholders to prevent the spread ofCOVID-19.


Orient Refractories Limited (ORL) is in the business of manufacturing and marketingspecial refractory products systems and services to the steel industry in India andGlobally. ORL is market leader for special refractories in India and has many globalcustomers for its international quality products. ORL produces nearly 50000 tonne ofrefractory per annum including customized products and system solutions.

The refractory products are mainly used in high temperature manufacturing processes iniron and steel industry metal smelters cement glass industry and for other industrialproducts. Demand for refractory is primarily dependent on the consumption of steel whichaccounts for about 75% of the total value and the remaining is used for glass cementnon-ferrous petrochemicals etc.

Products of ORL are manufactured at its state-of-the-art manufacturing facility atBhiwadi in Rajasthan & Tangi in Orissa. The Company has ongoing programs forimproving efficiency and effectiveness of its manufacturing processes raw material costenergy conservation control over working capital and to produce special refractories atlow cost so as to add maximum value to the customers. Energy efficient installations havebeen made at the factory. Best in class safety measures and processes have been put inplace and improved upon at the factory and all working sites.

The products of ORL are of Global standards in quality and highly cost competitivewhich makes it attractive for the customers worldwide.


Review of Global Steel Industry and outlook

The global crude steel production grew by 3% in Calendar Year'2019 to 1869 milliontonne on the back of robust demand from China. While European Union's) (EU's)manufacturing industry contracted in Calendar Year'2019 most of the developed economieslike the US Japan and EU reported listless growth in steel demand. However thedeveloping countries like China and India showed positive momentum in production andconsumption. China's crude steel production grew by ~7.7% to 996 million tonne in CalendarYear'2019. According to World Steel Association (WSA) the global finished steel demand isexpected to contract 6.4% Y-o-Y to 1654 million tonne in Calendar Year'2020 on the backof weak economic conditions general freeze in consumption disrupted supply chains andlockdown enforced across the globe due to the outbreak of COVID-19 pandemic. After thelockdown was lifted in Wuhan on 8th April 2020 all the major steel using sectors includingconstruction resumed full scale productivity in China. World Steel Association expectsChina's steel demand to grow by 1% Y-o-Y in Calendar Year'2020. Manufacturing recession inEuropean Union will continue with the steel demand expected to contract by 16% in CalendarYear'2020. Similarly steel demand is expected to decline by 19% and 23% in Japan and USrespectively in Calendar Year'2020 due to high unemployment reduction in income levelsand impaired residential construction.

India's Steel Industry - Review and Outlook

India's steel demand in financial year'2020 was largely subdued despite a small revivalin the start of last quarter of the fiscal year. The crude steel production declined by1.5% Y-o-Y to 109 million tonne due to weak demand outlook from end user industries andthe countrywide lockdown imposed in last week of March'2020 due to the outbreak ofCOVID-19 pandemic. The finished steel consumption witnessed a slowdown in financialyear'2020 with a muted growth of 1.4% Y-o-Y at 100 million tonne. In Financial Year'2020India's economy was coping with a massive slowdown from sectors like capital goodsautomobile infrastructure and construction which are primarily steel intensive. Thisadversely impacted demand for steel and consequently prices also declined to reach thebottom in September'2019. Steel demand started picking momentum from mid of November'2019after the end of monsoon and festive season. The steel demand stabilised in the followingmonths of December'2019 and January'2020 before the global steel demand was impacted bythe outbreak of COVID-19 pandemic. The pandemic severely impacted the steel industry inIndia by disrupting the labor force and supply chain due to the strictest lockdownenforced in the country. The outbreak of COVID-19 also impacted the imports from FreeTrade Agreements (FTA) countries in later half of the year. While the imports declined by18.5% Y-o-Y to 7.17 million tonne in financial year'2020 steel exports grew by 31% Y-o-Yto 11.2 million tonne on the back of weak domestic demand.

The Indian Steel Association has revised downwards India's Steel demand growth forecastfor 2020. It is expected that all Steel using sectors will remain in negative territory in2020. It estimates finished steel demand in India to fall in Calendar Year'2020. Theassumption is based on lockdown till May'2020 further fiscal stimulus boosting demand andhelping the project to complete once the lockdown ends and disruption will end earlyJune'2020. It is expected that any kind of demand recovery will take at least anothermonth from July'2020 onwards on overcoming challenges in the form of getting migrantlabors back resetting the disrupted supply chain and overcoming liquidity constraintsparticularly towards working capital needs cannot be accomplished overnight.

Overall steel production of the country now is expected to reach 90 million tonne asagainst 109 million tonne in 2019.

With regard to automotive sector supply chain disruptions both abroad & withinIndia have further increased the suffering which had already hit hard due to fallingdemand accumulated inventories demand recovery is slow and expected to increase infestive season in October'2020. Similarly the machine sector is expected to see continueddecline due to weaker investment fragile export demand and halted projects in energyconsumptions & mining. The railway sector is most likely to defer its capitalexpenditures. This will affect growth in steel usage negatively.

The COVID-19 crisis is linked with consumers demand supply logistics financials andhuman resources. The logistic work has been impacted globally which has disrupted themovement of raw material and finished goods which contributes to the growth challengesacross sectors and hence will impact the steel sector negatively. The automotive sectoraccounts for 15% of steel usage and consumption & infrastructure account for around60% both the sectors are not performing well because of low demand liquidity low privateinvestment etc.

Indian refractory Industry

With a production capacity of 1.5 million tonne the India Refractory Industry is anintegral part of the Country's steel eco system as well as other thermally intensiveindustries such as Cement and Glass. Refractories are used as vital input materials insteel production process without which the commodity cannot be made.

The nationwide lockdown has disrupted the production of all refractory manufacturers.Despite the disruption and curtailments in steel production there is demand of refractorymaterial. Indian refractory manufacturers are dependent on China for key raw materialslike Bauxite and Magnesia. Clogged logistical network and lack of transportationfacilities are taking toll on timely delivery of raw material. Due to Corona the supply iserratic from China. It is very difficult to comment on forecast for 2020-2021 even tocomment on short term outlook is difficult because of Government's action which arechanging the situation on day to day basis.

Benefits of the new structure

Year 2018 has seen the Indian steel market becoming the second largest in the worldfurther reinforcing the necessity RHI Magnesita continued emphasis on this geography. TheIndian Steel Ministry has set a 300 million tonne per annum steel capacity target by theend of 2030 which bodes well for the future of this industry. The Indian steel industry isundergoing consolidation which is expected to build up its strength but also to provide ahigher market share for industry

leaders. As a result of substantial restructuring and consolidation in the India steelindustry demand for higher performance and better quality solutions has increased - adevelopment which corresponds well to our strengths as a Group and enables us to takeadvantage of this position whilst also working to further strengthen our position in themarket in terms of cost competitive refractory solutions.

As a combined group in India RHI Magnesite's business here will be in a strongposition to benefit from this consolidation on the basis of the breath of the combinedorganization as well as its long-standing relationships with the market-leading customers.

The new organization structure will form one strong entity to seize growthopportunities and enhance the shareholders' value. It will help in simplification of thecorporate structure and consolidation of Indian business. One strong entity will enhancethe business and operational synergies shareholders value and utilization of resourcesdue to pooling of management expertise technologies and other resource of the companies.This will also create a larger asset base and facilitation of access to better financialresources. For the customers the new entity will provide single window for all refractorysolution under one umbrella. There is also an ongoing exercise to optimize the productionfootprint in India through maximizing the operational and supply chain excellence.

Challenges & Opportunities


The financial year 2019-20 was not good for steel sector as all the major steel buyingindustries like energy auto machinery construction showed negative growth during thefinancial year. The demand was low as compared to 2018-19. India with the GDP growth ofless than 5% has slowed down Industrial growth. Below are the factors that resulted inchallenging times for the industries in terms of growth and margins- Bad debts in bankingsystem and tough loan process kept private investors away in investing money on greenfieldprojects.

- Managing currency risk is a big concern to keep the margins intact. Rupeedepreciation against Dollar and Euro has impacted profitability.

- While steel output prices turned soft inputs continued to be costlier for domesticproduction. There are likely to be pressure on the margins in future.

- Trade tensions between the countries have led to slow geographical growth newmarkets have to be explored for capacity utilization. India and China tension has added tothe scarcity of raw material and logistic problems.

- COVID-19 pandemic has disrupted supplies demand human resource and createduncertainty to Industrial growth.


The Indian steel industry has a good chance to seize the opportunity as the steel millsare gearing up for an increase in demand from overseas buyers as the pandemic has chokedthe supplies from China. The movement at Chinese Port is blocked supply gap will emergein south east countries which is a big market for China. India per Capita SteelConsumption is 60 Kg. as compared world average of 250 Kg. So we have an opportunity gapto release. National Steel Policy 2017 states that India's objective is to increase theper Capita Steel Consumption from 60 Kg. to 160 Kg. by 2030-31 this in turn would have300 tonne capacity.

Also to achieve 5 trillion USD economy by fiscal year 2025 India needs to spend 1.4trillion USD on infrastructure.

Current Situation and Market outlook:

Steel production after COVID-19 2020 remains affected due to the countrywide lockdown(till 31st May'20). Outlook for the year as follows:

- Mini steel plants which were shut down have started partial production at 50%-60%capacity during June'2020. Good monsoon and festive season from September'2020 onward willramp up the sales to 80-90% capacity.

- Integrated steel plants (Operating blast furnaces and coke ovens) like JSW TATASAIL JSPL are running at a reduced capacity of 50-70% max in May and in June they haveproduced appox. 75% of the usual production level. Expected to come to a level of 90% inlast quarter.

- Labour migration to hometowns affecting production ramp up. Uncertainty amongindustry people on experienced manpower availability.

- The auto sales will remain weak till the end of June also due to COVID-19 impact allthe infrastructure projects are on hold. Probably good monsoon and rural part will pick upin last quarter.

- Since demand of consumer industry for steel is very low steel production is onlyadding up to inventories.

- No green field project in India in coming half year investments are very low due tostringent and strict banking norms.


The Company is committed towards clean environment and has stopped use of Pat Coke andshifted to cleaner fuel (PNG) at Bhiwadi plant. The plan is to gradually convert alloil-fired Kilns to gas fired Kilns.


In 2018 RHI Magnesita group commenced the reorganization of its Indian operations bymerging its two other Indian subsidiaries - RHI Clasil Pvt. Ltd. and RHI India Pvt. Ltd.with Orient Refractories Ltd. thereby enhancing the business and operational synergiesvia pooling of management expertise technologies and other resources between thebusinesses.

The combined business which is underpinned by the expertise and experience of itsglobal market-leading parent company

- RHI Magnesita will create a larger asset base in India and importantly will providecustomers with one single refractory solutions platform offering the industry's mostcomprehensive product portfolio including among others Magnesia and Alumina basedbricks and mixes for large industrial clients as well as specialty refractory productswith proven supply and sales capabilities. The shareholders and the unsecured creditors ofthe Company and the merging entities had approved the scheme without modification.


The Hon'ble National Company Law Tribunal Mumbai Bench ('NCLT') through their orderdated 2 March 2020 did not deem it fit to approve and sanction the proposed Scheme. TheCompany has decided to file an appeal to National Company Law Appellate Tribunal NewDelhi against the above said order of Hon'ble National Company Law Tribunal Mumbai benchrejecting the captioned scheme of amalgamation and arrangement.


During the year under consideration the Company has invested Rs. 43.56 Crores topurchase certain assets of plant situated at Baichuana Tangi Distt. - Cuttack Orissa ofManishri Refractories & Ceramics Private Limited (MRCPL). This plant capacity is10000 Tons for manufacturing of MGU bricks through recycling and with further capex thecapacity will be increased to 18000 Tons per annum. The Plant has started production fromNovember'2019. Further during the year Company has acquired 100% shareholding ofIntermetal Engineers India Private Limited (IEIPL) for Rs.10.10 Crores for manufacturingof steel plant equipment (viz. slide gate system for flow control of liquid steel oxygenlancing and CCM assemblies such as mould jacket assembly dummy bar assembly) speciallyused during the flow of liquid steel for continuous casting ingot casting which areexported to its regular customers in Gulf and African Region and caters to about 300 to400 regular steel plant customers in India. IEIPL has a plant in Mumbai. These investmentsare made through internal accruals.


Your Company enjoys the status of “One Star Export House”.


The Board recommended a dividend of 2.50 per equity share on 120139200 equity sharesof Re. 1.00 each for the year ended 31 March 2020 (previous year Rs. 2.50 per equityshare). The dividend on equity share is subject to the approval of the shareholders at theAnnual General Meeting ('AGM') scheduled to be held on 28 August 2020. The dividend willbe paid by 4 September 2020.

The register of members and share transfer books will remain closed from Tuesday 11August 2020 to Tuesday 18 August 2020 (both days inclusive) for the purpose of AGM andpayment of the dividend for the financial year ended 31 March 2020.

The dividend pay-out is in accordance with the company's dividend distribution policythe policy is available on the weblink'


The paid-up equity share capital as on 31 March 2020 was Rs. 1201.39 lacs. During theyear under review the Company has not issued any shares. The Company has not issuedshares with differential voting rights. It has neither issued employee stock options norsweat equity shares and does not have any scheme to fund its employees to purchase theshares of the Company.


The Board of Directors has decided to retain the entire amount of profits in the profitand loss account.


In terms of Section 134 (3) (l) of the Companies Act 2013 no material changes andcommitments affecting the financial position of your Company have occurred between the endof the financial year of the Company to which the financial statements relate and on thedate of this report except as disclosed elsewhere in this report.


The Company has adequate internal control systems in place and also has reasonableassurance on authorizing recording and reporting transactions of its operations. TheCompany has a well-placed proper and adequate internal controls environment commensuratewith its size scale and complexities of its operations. The Company had already developedand implemented a framework for ensuring internal controls over financial reporting. Thisframework includes entity level policies processes and operating level standard operatingprocedures. Internal control systems are an integral part of your Company's corporategovernance structure. These have been designed to provide reasonable assurance with regardto inter-alia (a) recording and providing reliable financial and operational information;(b) complying with the applicable statutes; (c) safeguarding assets from unauthorized use;(d) executing transactions with proper authorization and ensuring compliance withcorporate policies; (e) Prevention and detection of frauds / errors and (f) Continuousupdating of IT systems. The Company's management has assessed the effectiveness of theCompany's internal control over financial reporting as of 31 March 2020.

The Audit Committee reviewed the reports submitted by the Management Internal Auditorsand Statutory Auditors. Based on their evaluation (as defined in section 177 of theCompanies Act 2013 and Regulation 18 of Listing Regulations 2015) the Company's AuditCommittee has concluded that as of 31 March 2020 the Company's internal financialcontrols were adequate and operating effectively.


Employees being prime force the Company give equal emphasis on employees' developmentand their engagement. Our people are the most important resource we have. The Companybelieves in enhancing the competencies of employees to create a high performing andinnovative organization. Employees are facilitated to participate in training programs inhouse and at outside institutes. Equal emphasis is given on technical & soft skills.We are creating numerous opportunities for our employees to develop includinginternational development paths and special initiatives for the future management of ourcompany. Last year our main focus of in-house trainings was on interpersonal skillsbehavioral attributes customer focused culture lean implementation and 5's at shopfloor. The Company endeavors to keep the employee's motivation high level by providingcongenial & respectful work atmosphere and rewarding/remunerating effectively. 100%safety of our employees is one of the important operative targets for ORL. Variousinitiatives have been launched to engage employees. Communicating and reaching out toemployees at all levels is being done by using various mass media techniques. Celebratingfestivals and achievements on various occasions is part of ORL culture. There are cordialrelations between the management and the employees of the Company.


Intermetal Engineers (India) Private Limited was acquired by the Company as a 100%wholly owned subsidiary of the Company w.e.f. 18 May 2019.

Pursuant to the provisions of Section 129(3) of the Act a statement containing thesalient features of financial statements of the Company's subsidiaries in Form No. AOC-1is attached to the financial statements of the Company as Annexure-I.

Further pursuant to the provisions of Section 136 of the Act the financial statementsof the Company consolidated financial statements along with relevant documents andseparate audited financial statements in respect of subsidiary are available on thewebsite of the Company


Pursuant to the requirement under Section 134(3)(c) and 134(5) of the Companies Act2013 your Directors to the best of their knowledge confirm that:

- That in the preparation of the annual accounts for the year ended 31 March 2020 theapplicable accounting standards have been followed and there are no material departuresfrom the same;

- 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 31 March 2020 and of the Profit ofthe Company for that period;

- 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;

- the directors have prepared the annual accounts of the Company on a “goingconcern” basis;

- the directors have laid down internal financial controls to be followed by theCompany and the such internal financial controls are adequate and are operatingeffectively and

- the directors have devised proper systems to ensure compliance with the provisions ofall applicable laws and that systems are adequate and operating effectively.


All contracts /arrangements / transactions entered by the Company during the financialyear with related parties were in ordinary course of business and on an arm's lengthbasis. During the year the Company has not entered into any contracts /arrangements /transactions with related parties which could be considered material in accordance withthe policy of the Company on materiality of related party transactions.

Accordingly the disclosure of related party transactions as required under Section134(3)(h) of the Companies Act 2013 in Form AOC - 2 is not applicable to your Company.

The policy on materiality of related party transactions and dealing with related partytransactions are approved by the Board and can be accessed on the Company's website at thelink: Members can refer note no. 30to the financial statements which set out related party disclosures.

The Board of Directors of the Company has approved the criteria for making the omnibusapproval by the Audit Committee within the overall framework of the policy on relatedparty transactions. Prior omnibus approval is obtained for related party transactionswhich are of repetitive nature and proposed to be entered in the ordinary course ofbusiness and at arm's length during the financial year. All related party transactions areplaced before the Audit Committee for review and approval.


The brief outline of the Corporate Social Responsibility (CSR) Policy of the Company asadopted by the Board and the initiatives undertaken by the Company on CSR activitiesduring the year under review are set out in Annexure II of this report in theformat prescribed in the Companies (Corporate Social Responsibility Policy) Rules 2014.For other details regarding the CSR Committee please refer to the Corporate GovernanceReport which is a part of this report. The CSR policy is available on


The Company's Board of Directors has overall responsibility for the establishment andoversight of the Company risk management framework. The Company has framed a RiskManagement Policy to identify and access the key business risk areas and a risk mitigationprocess. The policy aims to ensure resilience for sustainable growth and sound corporategovernance by having an identified process of risk identification and management incompliance with the provisions of the Companies Act 2013. Risk management policies andsystems are reviewed regularly to reflect changes in market conditions and the Company'sactivities. The Company through its training and management standards and proceduresaims to maintain a disciplined and constructive control environment.

The Board has formed a Risk Management Committee. The composition of the same has beengiven in Corporate Governance Report.

The Risk Management Committee oversees how management monitors compliance with theCompany's risk management policies and procedures and reviews the adequacy of the riskmanagement framework in relation to the risks faced by the Company. There are no riskswhich in the opinion of the Board threaten the existence of the Company.


Ms. Sonu Chadha who was appointed as an Additional Independent Director on 13 August2019 will retire at the ensuing Annual General Meeting of the Company in terms ofprovisions of Section 161 of the Companies Act 2013 unless re-appointed. In duecompliance with the provisions of Section 149 of the Companies Act 2013 it is proposedto appoint Ms. Sonu Chadha as Independent Director on the Board of the Company to holdoffice for 5 years from the date of her initial appointment i.e. 13 August 2019 till 12November 2024 and she shall not be liable to retire by rotation.

Mr. Gustavo Lucio Goncalves Franco was appointed as an Additional Director on 6 June2020 and he will be retiring at the ensuing Annual General Meeting of the Company unlessre-appointed. The Board proposes to appoint him as Director of the Company liable toretire by rotation.

Ms. Jacqueline Michelle Knox due to her personal reason resigned from the Board on 31December 2019. Mr. Luiz Gustavo Rossato (DIN: 08695654) was appointed as Non-ExecutiveNon-Independent Additional Director on 11 February 2020 and he resigned due to hispersonal reason from the Board on 1 June 2020. The Board places on record its appreciationfor the services rendered by them during their brief tenure with the Company.

Mr. Parmod Sagar retires by rotation and being eligible has offered himself forre-appointment. Your Board recommends his re-appointment.

Brief profile of the Directors being appointment/re-appointed as required underRegulations 36(3) of Listing Regulations 2015 and Secretarial Standard on GeneralMeetings are provided in the notice for the forthcoming AGM of the Company. The Companyhas received declaration from all Independent Directors of the Company confirming thatthey meet with the criteria of independence as laid down under Section 149(6) of theCompanies Act 2013 confirming that they meet the criteria of independence as prescribedthereunder as well as Regulation 16(1)(b) of the Listing Regulations 2015.

The Company has complied with the requirements of Corporate Governance as stipulatedunder the Listing Regulations 2015 except as mentioned in disclosure section of theReport on Corporate Governance which is forming part of this Annual Report.


Pursuant to Section 203 of the Companies Act 2013 the Key Managerial Personnel of theCompany are- Mr. Parmod Sagar Managing Director & CEO Mr. Sanjeev Bhardwaj ChiefFinancial Officer and Mr. Sanjay Kumar Company Secretary. During the year there has beenno change in the Key Managerial Personnel.


The Company has devised the Nomination and Remuneration Policy for the selectionappointment and remuneration of the Directors and Key Managerial Personnel and alsoremuneration of other employees who have the capacity and ability to lead the Companytowards achieving sustainable development. The Nomination and Remuneration Policy of theCompany is available on the Company's website and can be accessed on the Company's websiteat the link: http://www. The criteria forappointment and remuneration of directors is as under:

(a) Criteria for appointment of Managing Directors / Whole Time Director / Director:

The Nomination and Remuneration Committee shall identify persons of integrity whopossess relevant expertise and experience particularly in refractory industry leadershipqualities required for the position and shall take into consideration recommendation ifany received from any member of the Board.

(b) Criteria for appointment of Independent Director:

The Independent Director shall be of high integrity with relevant expertise andexperience so as to have as diverse Board with directors having expertise in the fields ofmanufacturing marketing finance taxation law governance and general management.


The Board of Directors has carried out an annual evaluation of its own performanceboard committees and individual directors pursuant to applicable provisions of the Act andthe corporate governance requirements as prescribed by Listing Regulations 2015.

The performance of the Board was evaluated by the Board after seeking inputs from allthe Directors on the basis of criteria such as the board composition and structureeffectiveness of board processes information and functioning etc. The Nomination andRemuneration Committee had evaluated the performance of individual directors on the basisof criteria such as the contribution of the individual director to the board and committeemeetings like preparedness on the issues to be discussed meaningful and constructivecontribution and inputs in meetings etc.

Performance evaluation of independent directors was carried out by the entire boardexcluding the independent director being evaluated. A meeting of the independentdirectors with Dr. Vijay Sharma as the Chairman was held on 11 February 2020 to reviewthe performance of the non-independent directors the Board as a whole and the Chairman onthe parameters of effectiveness and to assess the quality quantity and timeliness of theflow of information between the Management and the Board. The same was discussed in theboard meeting that followed the meeting of the independent directors at which theperformance of the board its committees and individual directors was also discussed.

24. AUDITORS Statutory Auditor

M/s. Price Waterhouse Chartered Accountants LLP (Firm Registration No. 012754N/N500016)were appointed as Statutory Auditors of the Company at the 7thAGM held on 25 September2017 for a period of 5 years for auditing the accounts of the Company from the conclusionof 7thAGM till the conclusion of 12th AGM of the Company to be held in year 2021-2022.

Internal Auditor

The Board has appointed M/s. Chaturvedi & Partners as Internal Auditors for thefinancial year 2019-20 under Section 138 of the Companies Act 2013 and they havecompleted the internal audit as per the scope defined by the Board. They have beenre-appointed for the financial year 2020-21 also.

Secretarial Auditor

The Company has appointed M/s. Naresh Verma & Associates Company Secretaries inPractice to conduct Secretarial Audit for the financial year 2019-20 as required bySection 204 of the Companies Act 2013 and rules made thereunder. The Company provided allassistance and facilities to the secretarial auditors for conducting their audit. TheSecretarial Audit Report for the financial year ended 31 March 2020 is annexed herewithmarked as Annexure - III.

Cost Auditor

As per Section 148 of the Companies Act 2013 the Company is required to have theaudit of its cost records conducted by a Cost Accountant in practice. In this connectionthe Board of Directors of the Company has on the recommendation of the Audit Committeeapproved the appointment of M/s. K. G. Goyal & Associates as the Cost Auditors of theCompany for the year ending 31 March 2021.

In accordance with the provisions of Section 148(3) of the Act read with Rule 14 of theCompanies (Audit and Auditors) Rules 2014 the remuneration payable to the cost auditorsas recommended by the Audit Committee and approved by the Board has to be ratified by themembers of the Company. Accordingly appropriate resolution forms part of the noticeconvening the AGM. The Board seeks your support in approving the proposed remuneration ofRs. 75000 plus out-of-pocket expenses and taxes payable to the Cost Auditors for thefinancial year 2020-21.

M/s. K. G. Goyal & Associates have vast experience in the field of cost audit andhave conducted the audit of the cost records of the Company for the past several yearsunder the provisions of the erstwhile Companies Act 1956.

The Cost Audit Report for the year ended 31 March 2020 will be filled within statutorytime limit.


There are no qualifications in the reports of the Statutory Auditor and SecretarialAuditors' except one adverse observation by Secretarial Auditor's regarding short fall inCorporate Social Responsibility expenditure. which is explained in CSR disclosure(Annexure II) stated in this report. The remaining remarks of the Secretarial Auditorsregarding composition of Board of Directors are self-explanatory and no furtherexplanation thereof is required.

The Statutory Auditor in their report has emphasised the matter regarding management'sassessment of the impact of the outbreak of Coronavirus (Covid-19) on the businessoperations of the Company which is explained in the Note 37 to the standalone financialstatements and further explained in point no. 3 of this report.

There are no frauds reported in the reports of the auditors as mentioned undersub-section (12) of Section 143 of the Act.


The industrial relations with staff and workers during the year under review continueto be cordial.


There is no change in the nature of business of your Company during the year underreview.


i. Vigil Mechanism /Whistle Blower Policy

The Vigil mechanism of the Company which also incorporate a whistle blower policy inthe terms of SEBI (Listing Obligations and Disclosure Requirements) 2015 deals withinstances of fraud and mismanagement if any. The policy on vigil mechanism and whistleblower policy may be accessed on the Company's website at the link:

ii. Audit Committee

The composition of the Audit Committee has been given in Corporate Governance Report.All the recommendations made by the Audit Committee were accepted by the Board.

iii. Number of Board Meeting

The Board of Directors of the Company met five (5) times in the year the details ofwhich are provided in the corporate governance report.

iv. Particulars of Loans given Investment made Guarantees given and Securitiesprovided

The particulars of loans guarantees and investments as per Section 186 of the Act bythe Company have been disclosed in the financial statements.

v. Conservation of Energy Technology Absorption and Foreign Exchange Earnings &Outgo

The particulars relating to Conservation of Energy Technology Absorption and ForeignExchange Earnings & Outgo as required to be disclosed under Section 134(3)(m) of theCompanies Act 2013 read with Rule 8 (3) of the Companies (Accounts) Rules 2014 areprovided in Annexure - IV.

vi. Extract of Annual Return

Extract of Annual Return of the Company is annexed herewith marked as Annexure - V.

vii. Particulars of employees and related disclosures

The information required under Section 197(12) of the Companies Act 2013 read withRule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 is attached as Annexure - VI.

viii. Corporate Governance Report

Report on Corporate Governance is annexed herewith as Annexure - VII to thisreport.

ix. Business Responsibility Reporting

The Company's ethical and responsible behaviour complements its corporate culture.Being a public listed company the Company recognises that its accountability is notlimited only to its shareholders from a financial perspective but also to the largersociety in which it operates. During the year consequent to the requirements of reportingof its business responsibility initiatives becoming mandatory under the ListingRegulations the Company formulated a consolidated policy on business responsibility whichlays down the broad principles guiding the Company in delivering its variousresponsibilities to its stakeholders. The policy is intended to ensure that the Companyadopts responsible business practices in the interest of the social set up and theenvironment so that it contributes beyond financial and operational performance.

A copy of the policy is available at the Business Responsibility Report for the year ended 31 March 2020 in terms ofRegulation 34 of the Listing Regulations is annexed to this report as Annexure - VIII.

x. Transfer of amounts to Investor Education and Protection Fund

Details regarding transfer of amount & shares to IEPF has been given in CorporateGovernance Report.

xi. Listing with Stock Exchanges

The Company confirms that it has paid the annual listing fees for the year 2020-21 toNSE and BSE where the Company's shares are listed.

xii. Sexual Harassment of Women at Workplace (Prevention Prohibition &Redressal)Act2013

The Company has formulated and implemented a policy of prevention of sexual harassmentat the workplace with mechanism of loading/redressal complaints. During the year underreview there were no complaints reported to the Board. The policy may be accessed on theCompany's website at the link: htm

xiii. Compliance with the Institute of Company Secretaries of India (“ICSI”)Secretarial Standards

The relevant Secretarial Standards issued by the ICSI related to the Board Meetings andGeneral Meeting have been complied with by the Company.

xiv. No disclosure or reporting is required in respect of the following items as therewere no transaction on these items during the year under review:

- Details relating to deposit and unclaimed deposits or interest thereon.

- Issue of equity shares with differential rights as to dividend or voting.

- Issue of shares (including sweat equity shares) and Employee Stock Option Scheme ofthe Company under any scheme.

- No significant or material orders were passed by the Regulators or Courts orTribunals which impact the going concern and Company's operation in future.


Certain statements in the “Management Discussion and Analysis” describing theCompany's views about the Industry expectations/ predictions objectives etc. may beforward looking within the meaning of applicable laws and regulations. Actual results maydiffer materially from those expressed in the Statement. Company's operations mayinter-alia affect with the supply and demand stipulations input prices and theiravailability changes in Government regulations taxes exchange fluctuations and otherfactors such as Industrial relations and economic developments etc. Investors should bearthe above in mind.


The Directors thank the Company's employees customers vendors investors and academicpartners for their continuous support.

The Directors also thank the Government of India Governments of various states inIndia Governments of various countries and concerned Government departments and agenciesfor their co-operation.

The Directors regret the loss of life due to COVID-19 pandemic and are deeply gratefuland have immense respect for every person who risked their life and safety to fight thispandemic.

The Directors appreciate and value the contribution made by every member of the ORLfamily.

On behalf of the Board of Directors
Dr. Vijay Sharma
Gurugram 29 June 2020 (DIN:00880113)