Dear Members,
The Directors are pleased to present the 35th Annual Report together with audited financial statements for the year ended March 31, 2018.
1. FINANCIAL RESULTS
The Company’s financial performance, for the year ended March 31, 2018 is summarized below:
(Amount in Lakhs)
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Sr. No.
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Particulars
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Standalone
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Consolidated
|
|
March 31, 2018
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March 31, 2017
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March 31, 2018
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March 31, 2017
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|
1
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Revenue from Operations
|
|
|
|
|
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(a)
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Net Sales
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12,520.67
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12,336.79
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13,142.61
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12,720.70
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|
(b)
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Other Operating Income
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502.37
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716.56
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502.37
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716.56
|
|
2
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Other Income
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357.39
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335.91
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357.39
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367.94
|
|
3
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Total Income
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13,380.43
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13,389.26
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14,002.37
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13,805.20
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|
4
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Expenses:
|
|
|
|
|
|
(a)
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Cost of materials consumed
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4,741.79
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4,733.82
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4,811.24
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5,003.02
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|
(b)
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Changes in inventories of finished goods, work-in-progress and stock-in-trade
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(136.07)
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807.86
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(44.39)
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637.71
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|
(c)
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Employee benefits expense
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1,779.79
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1,434.59
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1,936.65
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1,552.58
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|
(d)
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Finance costs
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53.50
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180.21
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53.50
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180.21
|
|
(e)
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Depreciation and amortisation expense
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722.44
|
678.93
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724.37
|
691.45
|
|
(f)
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Power and Fuel
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576.50
|
421.05
|
576.50
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421.05
|
|
(g)
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Other expenses
|
2,136.72
|
1,995.04
|
2,417.65
|
2,219.17
|
| |
Total Expenses
|
9,874.67
|
10,251.50
|
10,475.52
|
10,705.19
|
|
5
|
Profit/(loss) before share of profit from associates and exceptional items
|
3,505.76
|
3,137.76
|
3,526.85
|
3,100.01
|
| |
Share of profit/(loss)from associates
|
-
|
-
|
195.86
|
108.18
|
|
6
|
Total Profit before Exceptional Items and Tax
|
3,505.76
|
3,137.76
|
3,722.71
|
3,208.19
|
|
7
|
Exceptional Items
|
|
|
|
|
|
(a)
|
Profit on sale of Property, Plant and Equipment
|
-
|
54.30
|
-
|
54.30
|
|
8
|
Profit / (loss) before tax
|
3,505.76
|
3,192.06
|
3,722.71
|
3,262.49
|
|
9
|
Tax Expense
|
|
|
|
|
|
(a)
|
Current Tax
|
991.19
|
1,078.76
|
996.14
|
1,084.41
|
|
(b)
|
Deferred Tax
|
23.69
|
35.60
|
23.03
|
33.63
|
|
10
|
Net Profit/ (Loss) for the period
|
2,490.88
|
2,077.70
|
2,703.54
|
2,144.45
|
|
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
|
2,481.85
|
2,082.70
|
2,694.51
|
2,149.45
|
2. DIVIDEND
During the Financial Year 2017-18, your Company has not declared any dividend (Interim and Final) for the Financial Year ended March 31, 2018 (last year Rs. 1.60/- per Equity Share 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 year 2017-18 stood at Rs. 13,023.04 lakhs as against Rs. 13,053.35 lakhs in the previous year, reflecting stability of operations in an otherwise uncertain market. Profit before tax stood at Rs. 3,505.76 lakhs in 2017-18 as compared to Rs. 3,192.06 lakhs in the previous year. The Company could withstand adverse market conditions in the overseas market mainly due to its thrist on achieving internal operational excellence, penetration into new markets extensive tightening control on inventory management participating in the shift to renewable in energy and exercising stringent cost control measures. Net profit after tax stood at Rs. 2,490.88 lakhs for the current year as compared to Rs. 2,077.70 lakhs in the previous 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 2017-18 stood at Rs. 13,644.98 lakhs as against Rs. 13,437.26 lakhs in the previous year, reflecting stability of operations in an uncertain market. Profit before tax stood at Rs. 3,722.71 lakhs in 2017-18 as compared to Rs. 3,262.49 lakhs in the previous year Net profit after tax stood at Rs. 2,703.54 lakhs for the current year as compared to Rs. 2,144.45 lakhs in the previous year. Consequently the earnings per share for the year 2017-18 stood at Rs. 9.43/- 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 of EXCELLERE (UK) Ltd.
6. CREDIT RATING
The Company’s financial discipline and prudence is reflected in the strong credit ratings ascribed by ICRA Limited as given below:
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Instrument
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Rating
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Long Term Debt
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ICRA A (Stable)
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|
Short Term Debt
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ICRA A1
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7. CONSOLIDATED FINANCIAL STATEMENTS
Consolidated Financial Statement has been prepared in accordance with provision of the Companies Act, 2013 (“the Act”) and the applicable Indian Accounting Standards alongwith 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 subsidiary Company of your Company forms part of consolidated financial statements in compliance with section 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. 10,756.40 lakhs and net fixed assets Rs. 9,355.04 lakhs. Additions during the year amounted to Rs. 1,963.60 lakhs.
10. SHARE CAPITAL
The paid up Equity Share Capital as on March 31, 2018 was Rs. 2,825.79 lakhs. During the year under review, the Company has bought back 4,44,444/- 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 Investor Education and Protection Fund in compliance with provisions of the Companies Act, 2013 which 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 a report on Corporate Governance and the certificate as required under Schedule V (E) of the SEBI (LODR) Regulations, 2015 from S. K. Jain & Co., Practicing Company Secretaries, regarding compliance of conditions of Corporate Governance are given as an Annexure forming a part of this Report.
13. DIRECTORS’ RESPONSIBILITY STATEMENT
Pursuant to Section 134(5) of the Companies Act, 2013, and based on the representation received from the management your Directors confirm that:
a. in the preparation of the annual accounts for the financial year ended March 31, 2018, the applicable accounting standards and Schedule III of the Companies Act, 2013, have been followed and there are no material departures from the same;
b. the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair 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 on that date;
c. the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.
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 the Company and that such internal financial controls are adequate and are operating effectively; and
f. the Directors have devised proper systems to ensure compliance with the provisions of 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 in accordance with Section 92(3) of the Companies Act, 2013 read with the Companies (Management and Administration) Rules, 2014, are set out herewith as “Annexure A” 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 under Section 149(7) of the Act that, they meet the criteria of Independence as provided in Sub-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 and attendance 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 the Companies Act, 2013 and Securities and Exchange Board of India (Listing Obligation and Disclosure Requirement) Regulations, 2015. The details related to the composition of the Audit Committee and terms of reference are included in the Corporate Governance Report, which forms a part of Annual Report.
18. REMUNERATION POLICY OF THE COMPANY
The Remuneration Policy of the Company for appointment and remuneration of the Directors, Key Managerial Personnel and Senior Executives of the Company along with other related 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 while recommending candidature to the Board takes into consideration the qualification, attributes, experience and Independence of the Candidate. Director(s) appointment and remuneration 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 along with the Companies (Corporate Social Responsibility Policy) Rules, 2014 and any other statutory amendment or modification thereof and the Company’s CSR Policy in respect of Corporate Social Responsibility activity, a separate Report on CSR activities is attached as “Annexure B” to this Report. The CSR Policy has been posted on the website of the Company at 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 required under the Regulation 34 of the SEBI (LODR) Regulations, 2015 is provided in a separate section 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 and Auditors) Rules, 2014, M/s. G.M. Kapadia & Co., Chartered Accountants (Firm Registration No.104767W), were appointed as Statutory Auditors of the Company for a term of 5 years, to hold office from the conclusion of 32nd Annual General Meeting held on August 24, 2015 until the conclusion of 37th Annual General Meeting, subject to ratification of their appointment at every subsequent Annual General Meeting. The Auditors have confirmed that, their appointment would be in accordance with the Section 139 of the Companies Act, 2013 and rule made thereunder and that they are not disqualified 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 (Cost Records and Audit) Amendment Rules, 2014, the Board of Directors, on the recommendation of the Audit Committee, have appointed M/s. Balwinder & Associates, Cost Accountants (Firm Registration Number: 000201) as Cost Auditors of the Company, for the financial year ending 31st March, 2019, on a remuneration as mentioned in the Notice convening the 35th Annual General Meeting for conducting the audit of the cost records maintained by the Company.
A Certificate from M/s. Balwinder & Associates, Cost Accountants has been received to the effect that their appointment as Cost Auditor of the Company, if made, would be in accordance with the limits specified under Section 141 of the Act and Rules framed thereunder.
A resolution seeking ratification by the members for the remuneration payable to Cost Auditor forms part of the Notice of the 35th Annual General Meeting of the Company and same 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 and complexity of its operations to ensure that all assets are safeguarded and protected against loss from unauthorized use or disposition and those transactions are authorized, recorded and reported correctly.
The internal control is exercised through documented policies, guidelines and procedures. It is supplemented by an extensive program of internal audits. The audit observations and corrective action taken thereon are periodically reviewed by the audit committee to ensure effectiveness of the internal control system. The internal control is designed to ensure that the financial and other records are reliable for preparing financial statements and other data, and for maintaining accountability of persons.
The scope and coverage of the internal audit plan includes reviewing and reporting on key process risks, adherence to operating guidelines and statutory compliances. The internal audit function provides assurance to the Board and the Audit Committee regarding the 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 business conduct. Accordingly, the Board of Directors have formulated a Whistle Blower Policy which is in compliance with the provisions of Section 177(10) of the Companies Act, 2013 and Regulation 22 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The policy provides for a framework and process whereby concerns can be raised by its employees against any kind of discrimination, harassment, victimization or any other unfair practice being adopted against them. More details on the vigil mechanism and the Whistle Blower Policy of your Company have been outlined in the Corporate Governance Report which forms part of this report.
25. RELATED PARTY TRANSACTIONS
The Board of Directors has adopted a policy on Related Party Transactions. The objective is to ensure proper approval, disclosure and reporting of transactions as applicable, between the Company and any of its related parties. During the financial year 2017-18, your Company has entered into transactions with related parties as defined under section 2 (76) of the Companies Act, 2013 read with Companies (Specifications of Definitions Details) Rules, 2014, which were in the ordinary course of business and on arm’s length basis and in accordance with the provisions of Companies Act, 2013, Rules issued thereunder. During the financial year 2017-18, there were transactions with the related parties which qualify as material transactions under Listing Agreement.
The details of the related party transactions are disclosed in the notes to accounts annexed to the standalone financial statement forming part of this Annual Report.
All Related Party Transactions entered during the year were in Ordinary Course of the Business and at Arm’s Length basis. Material Related Party Transactions, i.e. transactions exceeding 10% of the annual consolidated turnover as per the last audited financial statements, were entered during the year by your Company. Accordingly, the disclosure of Related Party Transactions as required under Section 134(3)(h) of the Companies Act, 2013 in 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 high levels of operating performance and cost competitiveness, consolidating and building for growth, enhancing the productive asset and resource base and nurturing overall corporate reputation. Your company is continuously expanding its manufacturing base, which the company is doing with expansions in Kosamba, Gujarat by incorporating new looms. Your Company is also committed to creating value for its other stakeholders by ensuring that its corporate actions positively impact the socio-economic and environmental dimensions and 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 and Company’s Articles of Association, Mr. Bruce Larry Kieval, Director of the Company, retires by rotation at the ensuing Annual General Meeting and being eligible has offered himself for re-appointment.
Your Company has received declarations from all the independent directors confirming that they meet the criteria of independence as prescribed under the provisions of Companies Act, 2013 read with the Schedules and Rules issued thereunder.
Shri Pankaj Seth, Managing Director, Smt. Anisha Seth, Whole Time Director, Shri Mukesh Deopura, Chief Financial Officer and Smt. Neha Poddar, Company Secretary are the Key Managerial 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 of Managerial Personnel) Rules, 2014.
28. EMPLOYEES’ STOCK OPTION SCHEME
The Nomination and Remuneration Committee of the Board of Directors of the Company, inter alia, administers and monitors the Employees’ Stock Option Scheme of the Company in accordance with the applicable SEBI (Share Based Employee Benefits) Regulations, 2014, erstwhile 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 Rule 12(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: 1,51,000
Exercise Price: 52,000 options granted at an exercise price of Rs. 69.75/- per option, 95,000 options granted at an exercise price of Rs. 342/- per option and 4,000 options granted at an exercise price of Rs. 348.50/-.
Options vested: 52,000 options and 95,000 options and 4,000 options.
Options exercised: On 5th November, 2015, company allotted 30,000 equity shares pursuant to exercise of 30,000 stock options by the employees of the Company.
On 29th January, 2016, company allotted 13,000 equity shares pursuant to exercise of 13,000 stock options by the employees of the Company.
On 2nd April, 2016, company allotted 9,000 equity shares pursuant to exercise of 9,000 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 the Company were convened and held. The relevant details, including composition of the Board, date of meetings, attendance and composition of Board, date of Meetings, attendance and composition of various Committees of the Board are given in the Corporate Governance Report forming part of this report. The details regarding the composition of various committees are also available on the Company’s website www.orbitexports.com.
30. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134 of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014, is set as “Annexure E” to this Report.
31. DEPOSITS
The Company did not accepted any deposits within the meaning of the provisions of Chapter V - Acceptance of Deposits by Companies read with the Companies (Acceptance of Deposits) Rules, 2014 during the year under review. Hence, the requirement for furnishing of details of Deposits which are not in Compliance with the Chapter V of the Act is not applicable.
32. REPORTING OF FRAUDS
There was no instance of fraud during the year under review, which required the Statutory 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 TRIBUNALS IMPACTING THE GOING CONCERN STATUS OF THE COMPANY
There has been no significant and material order passed by the regulators or courts or tribunals impacting the going concern status and the Company’s operations. All the orders received by the Company during the year are of routine in nature which have no significant/ 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 carried out an annual performance evaluation of its own performance, the directors individually as well as the evaluation of its various committee.
A separate exercise was carried out to evaluate the performance of individual Directors including the Chairman of the Board, who were evaluated on parameters such as level of engagement and contribution, independence of judgment, safeguarding the interest of the Company and its minority shareholders etc.
The performance evaluation of the Independent Directors was carried out by the entire Board excluding the Directors being evaluated.
The performance evaluation of the Chairman and Non-Independent Directors was carried out 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 of Directors/ employees of your Company is annexed as “Annexure F” to this Annual Report of your Company.
37. MATERIAL CHANGES AND COMMITMENT, IF ANY, AFFECTING FINANCIAL POSITION OF THE COMPANY 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 performance of the Company occurred between the end of the Financial Year of the Company to which the Financial 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 Inter Corporate 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 Syntex for 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 under review.
40. DISCLOSURE AS PER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013
Your Directors further state that during the year under review, there were no cases filed pursuant to the Sexual Harassment of Women at workplace (Prevention, Prohibition and Redressal) Act, 2013.
41. GENERAL
Your Directors state that no disclosure or reporting is required in respect of the following 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 under any scheme save and except ESOS referred to in this Report.
4. Neither the Managing Director nor the Whole-time Directors of the Company receive any remuneration or commission from any of its subsidiaries.
5. No significant or material orders were passed by the Regulators or Courts or Tribunals 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 of Company Secretaries of India on Board and General Meeting.
43. ACKNOWLEDGEMENTS
Your Directors would like to express their sincere appreciation for the assistance and co-operation received from the financial institutions, banks, Government authorities, customers, vendors and members during the year under review. Your Directors also wish to place on record their deep sense of appreciation for the committed services by the Company’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
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