Om Metals Infraprojects Ltd.
|BSE: 531092||Sector: Engineering|
|NSE: OMMETALS||ISIN Code: INE239D01028|
|BSE 00:00 | 24 Apr 2020||Om Metals Infraprojects Ltd|
|NSE 05:30 | 01 Jan 1970||Om Metals Infraprojects Ltd|
Notice: Undefined property: stdClass::$market_capital_for_nse in /usr2/unibs/application/modules/live-market/views/scripts/company/bs-new-bse-nse-block.php on line 17
Om Metals Infraprojects Ltd. (OMMETALS) - Director Report
Notice: Undefined variable: pattern in /usr2/unibs/application/modules/live-market/views/scripts/company/annual-report.php on line 72
Company director report
Your Directors have pleasure in presenting 47th Annual Report of your Company togetherwith the Audited Financial Statements for the financial year ended 31st March 2019.
FINANCIAL SUMMARY AND HIGHLIGHTS
(Rs. In Lacs)
Note: Previous year's figures have been regrouped / reclassified wherever necessaryFINANCIAL PERFORMANCE AND STATE OF COMPANY'S AFFAIRS AND FUTURE OUTLOOK
The strength of your Company lies in identification execution and successfulimplementation of the projects in the infrastructure space. To strengthen the long-termprojects and ensuring sustainable growth in assets and revenue it is important for yourCompany to evaluate various opportunities in the different business verticals in whichyour Company operates. Your Company currently has several projects under implementationand continues to explore newer opportunities both domestic and international. Your Boardof Directors' considers this to be in strategic interest of the Company and believe thatthis will greatly enhance the long-term shareholders' value.
The Company has reported consolidated revenue from operations Rs. 21285.34 Lakhs asagainst Rs. 30972.97 Lakhs in the previous year and Profit before Tax (PBT) ofRs.2645.61Lakhs as against Rs.4724.93 Lakhs in the previous year.
At present your Company operates in following core sectors - Engineering Real Estateand other Infrastructure Development and is actively exploring some new opportunities.
The Company has reported standalone revenue from operations Rs 21514.29 Lakhs asagainst Rs. Rs. 29801.44 Lakhs in the previous year and a Profit before Tax (PBT) ofRs.2724.30 Lakhs as against Rs. 4623.36 Lakhs in the previous year.
DIVISIONAL ANALYSIS Engineering Division
The Turnover of this division (including joint controlled operations) this year isRs.23140.45 lakhs and profit (PBT) is Rs.5058.55 lakhs as against Turnover of Rs.28074.57lakhs & profit (PBT) is Rs.6403.26 lakhs in the last year.
The Engineering Division focuses on turnkey engineering procurement and constructioncontracts for Hydro mechanical equipment for Hydro Power and Irrigation projects. TheCompany post execution of civil work for Kalisindh dam has since been qualified forcomplete EPC for dam except EM package and shall address a larger share of hydro powerproject. This is a feat for diversifying in the civil construction space and the Companywill not have to take recourse to civil companies for meeting PQ norms for bidding incivil space. The Company is now all geared up to encash the burgeoning opportunities inexecuting complete EPC contract in the space of H M components and civil structure. Theprojects in Hydro power space involve multifarious activities viz. civil constructionelectromechanical component and Hydro mechanical equipments. The Company has executed over60 Hydro-Mechanical turnkey projects in power and irrigation. The major revenue sourcethis financial year are from kutchch project of SSNNL Knowledge city project in UjjainRampur project (UP) and Ghanna Project of the Company
Orders received during the Year:
1. Isarda dam project in Tonk District of Rajasthan for Rs 609 crore from Irrigationand Water Resource Department Rajasthan
Real Estate Development
The Turnover of this division this year is Rs.38.02 lakhs and loss(PBT) isRs.110.23lakhs against Turnover of Rs. 1315.98Lakhs &Profit (PBT) was 42.76Lakhs inthe last year.
There is a potential realizable value of Land Bank/ developable/under development areain Com- pany/subsidiary/Joint Venture.
Real Estate Project Details
Construction has resumed after the judgment of Hon'ble JDA tribunal which in itsverdict ordered that all approvals and maps of the project approved by JDA are as perpolicies/ bye laws and within legal framework. The last mile construction and finishingwork is in progress.
* delivered for possession and 90% units are sold A Subject to approval of Design/ Area
(due to change in IND AS - revenue of incomplete projects recognized earlier reversed)Key Land Bank
Sale Of Hotel Division
Your Company had agreed to sell its business and assets of Hotel Om Tower to JupiterMetals Private Limited at valuation of Rs. 36 cr. The valuation had been carried out by anindependent valuers appointed by the Company and the building value has been taken atdistress value as repairs and renovation was due in building. This division is not a coreactivity of your Company.
Other Infrastructure Division
Other Infrastructure division of the Company includes revenue from packaging and rentalincome.
The Turnover of this division this year is Rs. 1731.50 lakhs as against Rs. 2372.44Lakhs of previous year and reported loss (PBT) of Rs.378.08 lakhs.
The Company had entered into this venture for manufacturing of Closure for water PETbottles and Carbonated Soft Drinks (CSD) caps. Plastic ban and NGT guidelines slowed downthe sale of this division and company decided to sale one of the machines and Company islooking to completely sale this division and business.
Silos: Project received from Food Corporation of India (FCI) for construction anddevelopment of 4 Silos and for the same the Company has formed 4 SPV's and has 50% stakein each.
Your Company sees good prospects in the domestic economy with the thrust oninfrastructure development. The Company has invested in building up the capacities overthe years and has also mapped the emerging opportunities with the internal capabilities.Increase in the pace of implementation of various initiatives by the government andrevival of the investment cycle would be conducive for achieving the growth aspirations ofthe Company. The road ahead planned for your company includes:
> Enlarge global footprint through acquisition and strategic Joint Ventures in thecore business.
> Completion of existing real estate projects.
> Establish presence in varied structure steel design and fabrication works inbridges Pipe laying and heavy engineering works.
> Tap India's second largest potential in the world both in Hydro Electric PowerRiver Linking and irrigation by capitalizing on the plans of the government of India plansof accelerating infra-structure projects.
CHANGES IN NATURE OF BUSINESS IF ANY
There have been no changes in the business carried on by the Company or itssubsidiaries. DIVIDENDS
The Board of Director of your Company is pleased to Recommend a Dividend of Rs 0.25 perEquity share of the Face Value of Rs. 1 each (@ 25%) for the approval of the shareholdersat the ensuing Annual General Meeting ('AGM') of the Company and whose names appears inthe register of Members as on the Book Closure/ Record Date.
Together with the Corporate Tax on dividend the total outflow on account of equitydividend will be Rs. 29172364.3 /- via-a-via Rs. 63747247 /- for the year 2017-18. (Rs.63747247 includes an amount of Interim Dividend for the F.Y. 2017-18 i.e. Rs. 40565572 andFinal Dividend for the F.Y. 2016-17 i.e. Rs. 23181675 which was paid in the year2017-18.)"
AMOUNT IF ANY. WHICH THE BOARD PROPOSES TO CARRY TO ANY RESERVES.
Appropriations to general reserve for the financial year ended March 31 2019 as perstandalone financial statements are as under:
( In Rupees)
The Board of Directors of your Company has decided not to transfer any amount to theReserves for the year under review.
CHANGES IN SHARE CAPITAL IF ANY
The paid up Equity Share Capital as on March 31 2019 was Rs.9.63 Crore. During theyear under review the Company has not issued shares with differential voting rights norgranted Employee Stock Options or Sweat Equity Shares.
INFORMATION ABOUT SUBSIDIARIES/JV/ASSOCIATE COMPANY
There has been no material change in the nature of the business of the subsidiaries.
Pursuant to provisions of Section 129(3) of the Act a statement containing salientfeatures of the financial statements of the Company's subsidiaries in Form AOC-1 isattached to the financial statements of the Company.
In accordance with Section 136 of the Act the financial statements of the subsidiaryand associate companies are available for inspection by the members at the RegisteredOffice of the Company during business hours on all days except Saturdays Sundays andpublic holidays upto the date of the AGM. Any member desirous of obtaining a copy of thesaid financial statements may write to the Company Secretary at the Registered Office ofthe Company. The financial statements including the CFS and all other documents requiredto be attached to this report have been uploaded on the website of the Company at
The Company has in accordance with the amendments to Listing Regulations revised thePolicy for determining material subsidiaries. The said policy may be accessed on thewebsite of the Company at http://www.ommetals.com/#/policies and due to such amendment Om Metals Consortium Private Limited has become materialsubsidiary of the Company.
Apart from this your Company funded its subsidiaries/JV's from time to time as perthe fund requirements through loans guarantees and other means to meet working capitalrequirements.
The developments in business operations / performance of major subsidiaries /JV /Associates consolidated with OMIL are as below:
OM METALS CONSORTIUM PRIVATE LIMITED - This wholly owned Subsidiary Company isdeveloping a high end residential project on a very prime parcel of 19000 sq. mt. land atJaipur and has a sellable built-up area of 6.45 lakh sqft with expected realization of'INR 10000-12000/sqft. OMIL has invested INR 1.6 bn for land and development cost isexpected to be Rs 4 bn. The company expects to generate Rs 6.0 bn of Revenue from thisproject over next 2-3 years which translates into pretax profits of Rs 1.3bn appx. Aftercompletion of structure of building last mile construction value addition interior andfinishing work is going on in full swing as per policies/bye laws and within legalframework.
OM METALS REAL ESTATE PRIVATE LIMITED- This wholly owned Subsidiary Company is holdingstakes in different SPV's and different subsidiaries for different projects in differentlocations.
CHAHEL INFRASTRUCTURES LIMITED - The Company has substantial stake totaling to 94.46%this Company has earmarked for the development of sea port in Pondicherry. After the nonclearance of the project we have moved for arbitration proceedings against Govt. ofPondicherry our claims remain unconsidered.
WORSHIP INFRAPROJECTS PRIVATE LIMITED (earlier known as OM METALS SPML INFRAPROJECTSPVT LTD) - This wholly owned Subsidiary Company. The Company had completed a 457 CrKalisindh Dam project in this SPV which earned qualification of dam construction. Thiscompany was made wholly owned subsidiary of Om metals in last year and this company in JVwith Om metals has secured a work contract of Isarda dam in Rajasthan worth Rs 609 cr.
SANMATI INFRADEVELOPERS PRIVATE LIMITED - This SPV wherein we own 25% stake along withother stakeholders SPML Infra (25%) and Urban Infrastructure Trustees Ltd (UITL) (50%)which is a holding company of Pondicherry SEZ Co. Ltd (PSEZCL). PSEZCL was formed toexecute a multi product SEZ in Pondicherry where 840 acre land has been acquired andbalance 26 acre is pending. After the non clearance of this project we have beennegotiating with UITL to unlock value of financial and real estate assets.
BHILWARA JAIPUR TOLL ROAD PRIVATE LIMITED- This SPV where Om metals has 49% stake hasdone the development of the 212 km road project in Jaipur-Bhilwara Stretch on BOT basisand COD achieved in December 2014. Om Metals has executed 100% of EPC work for a totalproject cost of Rs. 410 Cr. After the COD of the project all 4 toll plazas are operationaland generating revenue. Private vehicles were made toll free wef 1.4.2018 by state govtand we have terminated the concession agreement for breach of contract by Government andsubmitted our claims of Rs 578 cr. The arbitration proceedings are going on and we areawaiting the favorable outcome.
GURHA THERMAL POWER COMPANY LIMITED- This company as a 50% JV of Om Metals has alignite based thermal project in Rajasthan. Due to abnormal delay at the end ofGovernment we have intimated our stand of terminating the project from our side. Ourcompensation and claim is pending for decision in Tribunal.
OM METALS CONSORTIUM (Partnership firm) - This prestigious partnership firm fordevelopment of SRA project in Bandra Reclamation facing Bandra- Worli Sea Link hascompleted the construction of the temporary transit camp.
A redevelopment project of MAHADA in partnership under Om Metals Consortium (OMC) whereOMIL holds 17.5 % stake. Other developmental partners in the consortium are DB RealtyGroup SPML Infra Morya Housing and Mahima developers. This multi-storied residentialproject is spread across 6 acres and entitled to FSI which translate into approx ~1.2 mnsqft (subjected to all Govt clearances ).A premium of additional FSI available shall bepaid by OMC.
OMC has done a JV with DB realty for this project where DB realty would be incurring100% cost for the development and transfer 50% of salable area to OMC.
OM METALS -JSC JV - This JV has been executing Kameng HEP and the project is scheduledto complete by December 2019.
OM RAY CONSTRUCTION JV - This SPV is executing EPC of one project in Karnataka.
SPML -OM METALS JV- This JV has been executing project for development of smartinfrastructure (knowledge city) in Vikram Udyogpuri at Ujjain. The progress of thecontract is very smooth and we are expecting it to complete by 2019.
Gujrat Warehousing Private Limited- This SPV was incorporated for the development ofsilo for storing wheat for FCI. The land acquisition is complete and ground breaking andcivil structure work going on.
West Bengal Logistic Private Limited- This SPV was incorporated for the development ofsilo for storing wheat for FCI. The land acquisition is in process.
Uttar Pradesh Logistic Private Limited- This SPV was incorporated for the developmentof silo for storing wheat for FCI. The land acquisition is in process.
Bihar Logistic Private Limited- This SPV was incorporated for the development of silofor storing wheat for FCI. The land acquisition is complete and ground breaking and civilstructure work going on.
Om WIPL JV Isarda: This JV has been executing project for the Construction of IsardaDam across Banas Riverin Tonk District.
Subsidiaries/Associates of Om Metals Real Estates Private Limited (Wholly ownedsubsidiary of the Company):
OM METALS INFOTECH PRIVATE LIMITED - This Company has industrial land in Jaipur and thelong drawn legal hurdle has been sorted out by out of court settlement. The subdivision ofland has been obtained from RIICO and the sale process of plots has been started.
OM METALS DEVELOPRS PRIVATE LIMITED - OMDPL entered into a JV with Mahindra Life spacefor a residential project in Hyderabad. Mahindra owns 80% of the built-up area rights inthe 10-acre premium residential project called 'Ashvita' and OMDPL holds the rights tothe remaining area. The 20% share of built-up area under OMIL is 80000 sqft andrealization is '4500/sq.ft.(0.36 Bn INR). The construction is complete the project isfully delivered and sale of units are progressing very satisfactorily and very few unitsare pending for final registration.
The Board of Directors of the Company has adopted the policy for the materialsubsidiaries which is available on the website of the company at the following link:
CONSOLIDATED FINANCIAL STATEMENTS
In accordance with the provisions of Companies Act 2013(hereinafter referred to as"the Act") Regulation 33 of the Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015 (hereinafter referred to as"Listing Regulations") and applicable Accounting Standards the AuditedConsolidated Financial Statements of the Company for the financial year 2018-19 togetherwith the Auditors' Report form part of this Annual Report. (Pursuant to provisions ofSection 129(3) of the Act a statement containing salient features of the financialstatements of the Company's subsidiaries in Form AOC-1 is attached as Annexure II to theBoard Report.)
Companies which became / ceased to be Company's Subsidiaries Joint Ventures orAssociate Companies:
Companies which have become subsidiaries Joint Ventures or Associate Companiesduring the financial year 2018-19:
Om WIPL JV Isarda
Companies which has ceased to be the Subsidiaries/Step Subsidiary JointVentures or Associate Companies during the financial year 2018-19: NIL
MATERIAL CHANGES AND COMMITMENTS IF ANY BETWEEN BALANCE SHEET DATE AND DATE OFDIRECTORS' REPORT
Company has partly divested its investment in its Packing Division a non corebusiness by sale of a machine at an agreed valuation of Rs. 7.6 Crore on 22nd day ofMay 2019 except this there was no material changes and commitments between the end of thefinancial year of the Company to which the Financial Statements relates and date ofDirectors' Report affecting the financial position of the Company.
INVESTOR EDUCATION AND PROTECTION FUND (IEPF)
Pursuant to the applicable provisions of the Companies Act 2013 read with the IEPFAuthority (Accounting Audit Transfer and Refund) Rules 2016 ('the rules') all unpaidor dividends are required to be transferred by the Company to the IEPF established by theGovernment of India after the completion of seven years. Further according to the rulesthe shares on which dividend has not been paid or claimed by the shareholders for sevenconsecutive years or more shall also be transferred to the demat account of the IEPFauthority. During the Year 2018-19 the Company has not transferred any unclaimed andunpaid dividends to the IEPF Fund.
Further No corresponding share in respect for which dividend was unclaimed for sevenconsecutive years or more were transferred to the demat account of the IEPF authority inthe Financial Year 2018-19 pursuant to the provisions of Section 124(6) of the CompaniesAct 2013 and the rules there under.
Shareholder can check Details of their Unpaid and unclaimed amount on the website ofthe IEPF Authority i.e. http://www.iepf.gov.in/andcan also check updated details of their shares on website of the Company and Pursuant tothe Rule 5(8) of Investor Education and Protection Authority (Accounting Audit Transferand Refund) Rules 2016 the Company has uploaded the details of unpaid and unclaimedamounts lying with the Company as on date of last Annual General Meeting on the website ofthe Companywww.ommetals.com .
Further information related to IEPF are disclosed in Corporate Governance Reportforming part of this Annual Report.
MEETINGS OF THE BOARD OF DIRECTORS
Five meetings of the Board of Directors were held during the year. For further detailsplease refer to the corporate governance report which forms part of this report. Themaximum interval between any two meetings did not exceed 120 days in prescribed as perthe Companies Act 2013.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to Section 134(5) of the Companies Act 2013 the Board of Directors of theCompany confirms that-
(a) In the preparation of the annual accounts the applicable accounting standards havebeen followed along with proper explanation relating to material departures;
(b) The directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the company at the end of the financial year and ofthe profit and loss of the company for that period;
(c) The directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of Companies Act 2013 forsafeguarding the assets of the company and for preventing and detecting fraud and otherirregularities;
(d) The directors have prepared the annual accounts on a going concern basis; and
(e) The directors have laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively.
(f) The directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
Based on the framework of internal financial controls and compliance systemsestablished and maintained by the Company work performed by the internal statutory andsecretarial auditors and external consultants and the reviews performed by management andthe relevant board committees including the audit committee the board is of the opinionthat the Company's internal financial controls were adequate and effective during thefinancial year 2018-19.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
The constitution of Board of Directors and KMP of the Company during the year 2018-19isas under:
*Appointment of Mr. Naresh Kumar Paliwal on 20.04.2018
The Board on the recommendation of Nomination and Remuneration Committee appointed Mr.Naresh Kumar Paliwal as the Independent Director of the Company which was further ratifiedby the Members of the Company in the Annual General Meeting held for the Financial Year2017-18.
Mr.Naresh Kumar Paliwal is a retired Deputy General Manager of State Bank of Patiala.He has worked in the bank on Different Positions including as Regional Head and ZonalHead. He is Commerce Graduate and holds degree in the Field of Law. He has expertise inFinance and Banking areas.
In terms of Section 152 of the Companies Act 2013 Mr. Vikas Kothari shall retire atthe ensuing Annual General Meeting and being eligible offer himself for re-appointment.
DISCLOSURES FROM INDEPENDENT DIRECTORS
The Company has received declarations from all the Independent Directors of the Companyconfirming that they meet the criteria of independence as prescribed both under Section149 (6) of the Act and SEBI (Listing Obligations & Disclosure Requirements)Regulations 2015.
That Independent Directors has Complied with the Code for Independent Directorsprescribed in Schedule IV to the Companies Act 2013.
In terms of Regulation 25(8) of the Listing Regulations the Independent Directors haveconfirmed that they are not aware of any circumstance or situation which exist or may bereasonably anticipated that could impair or impact their ability to discharge theirduties.
In terms of the requirements of the Act and Listing Regulations the Board carried outthe annual performance evaluation of the Board as a whole Board Committees and theindividual Directors.
The performance of the Board was evaluated by the Board after seeking inputs from allthe directors on the basis of the criteria such as the Board composition and structureeffectiveness of board processes information and functioning etc.The objective of thisevaluation process is constructive improvement in the effectiveness of Board maximise itsstrengths and tackle weaknesses if there are any.
The performance of the committees was evaluated by the board after seeking inputs fromthe committee members on the basis of the criteria such as the composition of committeeseffectiveness of committee meetings etc.
The Board and the Nomination and Remuneration Committee ("NRC") reviewed theperformance of the individual directors on the basis of the criteria such as thecontribution of the individual director to the Board and committee meetings likepreparedness on the issues to be discussed meaningful and constructive contribution andinputs in meetings etc. In addition the Chairman was also evaluated on the key aspectsof his role.
Independent Directors in their separate meeting reviewed and evaluate the performanceof nonindependent directors Board as a whole Managing Director and the Chairman takinginto account the views of executive directors and non-executive directors and criterialaid down by the Nomination and Remuneration Committee.
FAMILARISATION PROGRAMME FOR INDEPENDENT DIRECTORS
To familiarize the Independent Directors with the strategy operations and functions ofour Company the executive directors/ senior managerial employees make presentation to theIndependent Directors about the company's strategy operations etc. Independent Directorsare also visiting factories and branch offices to familiarize themselves with theoperations of the company and to offer their specialized knowledge for improvement of theperformance of the company. Further at the time of appointment of an Independentdirector the company issues a formal letter of appointment outlining his/ her rolefunction duties and responsibilities as a director. The format of the letter ofappointment is available at our website www.ommetals.com
The Policy of the familiarization programme of Independent Directors is put up on thewebsite of the Company at the link: http://www.ommetals.com/#/financial-news
NOMINATION AND REMUNERATION COMMITTEE:-
As per the section 178(1) of the Companies Act 2013 the Company's Nomination andRemuneration Committee comprises of following Non-executive Directors as under:
*Mr. Naresh Kumar Paliwal was appointed as Independent Director of the Company w.e.f.20th April 2018 and he was also appointed as the member of the Nomination And RemunerationCommittee from the same date.
Details of the Nomination & Remuneration Committee terms of reference of thisCommittee are given in the Corporate Governance section of the annual report which formspart of the Director's Report.
During the year under review the Board of Directors amended the Nomination andRemuneration Policy to bring it in line with the amendments to Section 178 of CompaniesAct 2013 and Listing Regulations. The Nomination and Remuneration Policy of the Companyforms part of this report as Annexure IV and the same is being uploaded on the Company'swebsite and can be accessed at: http://www.ommetals.com/#/policies
Criteria for determining qualifications positive attributes and independence of aDirector
In terms of the provisions of Section 178(3) of the Act and Regulation 19 of the SEBIListing Regulations the NRC has formulated the criteria for determining qualificationspositive attributes and independence of Directors the key features of which are asfollows:
Qualifications - The Board nomination process encourages diversity of thoughtexperience knowledge age and gender. It also ensures that the Board has an appropriateblend of functional and industry expertise.
Positive Attributes - Apart from the duties of Directors as prescribed in theAct the Directors are expected to demonstrate high standards of ethical behaviorcommunication skills and independent judgment. The Directors are also expected to abide bythe respective Code of Conduct as applicable to them.
Independence - A Director will be considered independent if he / she meets thecriteria laid down in Section 149(6) of the Act the Rules framed there under andRegulation 16(1)(b) of the SEBI Listing Regulations.
The Directors affirm that the remuneration paid to Directors KMPs and employees is asper the Remuneration Policy of the Company.
The Managing Director of the Company has not received any remuneration or commissionfrom any of the subsidiary companies.
Remuneration to Executive Directors:
The remuneration paid to Executive Directors is recommended by the Nomination andRemuneration Committee and approved by Board in Board meeting subject to the subsequentapproval of the shareholders at the General Meeting and such other authorities as may berequired. The remuneration is decided after considering various factors such asqualification experience performance responsibilities shouldered industry standards aswell as financial position of the Company.
Remuneration to Non Executive Directors:
The Non Executive Directors are paid remuneration by way of Sitting Fees. The NonExecutive Directors are paid sitting fees for each meeting of the Board and itscommittees.
The policy under sub section (3) of section 178 of the Companies Act 2013 adopted byboard is appended as Annexure IV to the Directors' Report.
The Remuneration to Executive Directors and KMP are in affirmation of the Nominationand Remuneration Policy.
The information required under Section 197 of the Act read with Companies (Appointmentand Remuneration of Managerial Personnel) Rules 2014 (including any statutorymodification(s)or re-enactment(s) thereof for the time being in force) inrespect ofDirectors/employees of the Company is set out in the Annexure IVB to this report
According to Section 177 of the Companies Act 2013 the Audit Committee is comprised ofthe following directors:
*Mr. Naresh Kumar Paliwal was appointed as Independent Director of the Company w.e.f.20th April 2018 and he was also appointed as the member of the audit committee from thesame date in place of Mrs. Ranjana Jain.
All members of the Audit Committee are financially literate and have experience infinancial management. All the recommendations made by the Audit Committee were accepted bythe Board of Directors of the Company.
The Company Secretary of the Company acts as the Secretary to the Audit Committee.
Details of the Audit committee terms of reference of the audit committee and of thecompany are given in the Corporate Governance section of the annual report which formspartof the Director's Report.
At the AGM held in the year 2017 M/S Mahipal Jain & Co. Chartered Accountants(Registration No.007284C) as statutory auditors of the Company for a term of 5 years fromthe financial year 201718. The Companies Amendment Act 2017 has waive-off the requirementof annual ratification. The Company has received letter from them to the effect that theircontinuation is within the prescribed limits confirming that they are not disqualified forsuch appointment pursuant to the Companies Act 2013 and applicable statutory provisions.
Pursuant to provisions of Section 143(12) of the Companies Act 2013 the StatutoryAuditors have not reported any incident of fraud to the Audit Committee during the yearunder review.
The Auditors' Report for the Financial Year ended 31st March 2019 on the FinancialStatements of the Company is a part of this Annual Report.
Independent Auditors' Report
The Auditors' Report to the members on the Accounts of the Company for the financialyear ended March 31 2019contain with the qualification/reservation/adverse remark/disclaimer which are replied by the Board of Directors hereunder:
Auditors Remark - 1
'The standalone financial statements the Company's non-current investments as at 31March 2019 include investments aggregating 488.44 Lacs in a subsidiary i.e M/s ChahelInfrastructure Ltd; being considered good and recoverable by the management consideringthe factors stated in the aforesaid note.
However this Subsidiary has accumulated losses and its net worth is fully eroded.Further this subsidiary is facing liquidity constraints due to which they may not be ableto realize projections made as per their respective business plans thus we are unable tocomment upon the carrying value of these non current investments and recoverability of theaforesaid dues and the consequential impact if any on the accompanying standalonefinancial statements and as per audited financial statements of subsidiary provided to usrespective auditor has not qualified on going concern matter. The recoverability of thesaid investment is in doubtful in our opinion.
Chahel Infrastructure Limited a subsidiary which is holding 94.46% share in theCompany has incurred losses during their past years but the Board of directors are in viewthat the said subsidiary Company may receive projects in future based on its experiencewhich will generate revenue in future and such losses will be recovered. Therefore basedon certain estimates like future business plans growth prospects and other factors theDirectors believes that the realizable amount of subsidiary is fully recoverable due towhich these are considered as good and recoverable.
Auditors Remark - 2
The standalone financial statements the Company's non-current investments as at 31March 2019 include investments aggregating 5092.20 Lacs and advances current as well asnoncurrent in two joint ventures viz. Bhilwara Jaipur Toll Road P Ltd and Gurha ThermalPower Company Ltd totalling to Rs. 8518.13 Lacs; being considered good and recoverable bythe management considering various factors.
For the breach on the part of authority both joint ventures has filed terminationnotices to their respective authority and claimed the amount invested and terminationpayments as per concession agreement. Company is operating only on behalf of respectiveauthority and is not booking any expenses and revenue in books after termination. So faras this matter indicates material uncertainty about the going concern of these jointventures. In our view recoverability of the amount invested and advance provided notcertain but no provisioning has been made against such diminution in value of investmentand loans. Management is of the view that such arbitration claims has merits and will bein favor of joint ventures and amount invested and advance provided will be recoveredfully.
The Board of directors are of the view that all such losses and amount due to BhilwaraJaipur Toll Road private Limited a SPV will be recovered from PWD through claim.
The Company has been inducting funds in Bhilwara Jaipur Toll Road Private Limited(BJTR) to service debt due to shortfall in revenue of BJTR due to corporate guarantee.Such service of debt is subsisting regularly on account of corporate guarantee in spite ofthe fact that SPV terminated concession agreement.
Such Arbitration claims has merits and will be in favour of Joint Ventures and amountinvested and advance provided will be recovered fully and It is understood that postreceipt of arbitration award by SPV all claims of Om Metals shall be settled by SPV
The Joint Venture Gurha Thermal Power Company limited in view of the litigation atAPTEL (Appellate tribunal of electricity) in the matter of statutory clearances fromauthorities in relation to agreements with Rajasthan Rajya Vidhyut Prasaran Nigam Ltd(RRVPNL) before which the Joint Venture has made a claim among other things forreimbursement of expenses incurred in relation to the project compensation etc. but thematter is under subjudice and thereafter the Joint Venture pursues other projects in thenear to medium term hence the going concern assumption is followed and such amountinvested and loan granted is good and recoverable.
Auditors Remark - 3
Company granted advance to SPML Infra Limited amount of Rs. 541.95 lacs as at 31 March2019. The Management represented that this amount will be adjusted against capitalcontribution of SPML Infra Ltd lying in OM Metal SPML JV (Ujjain) which is a jointoperation and proportionately included in company's financial statements. However inabsence of third party confirmation and other supportive evidence we are unable tocomment upon such balances and such adjustment. Further company has not adjusted suchamount in books.'
The Board of Directors are in view that the advance to SPML Infra Limited amounting toRs. 541.95 lacs shall be adjusted in the current year by offsetting its current accountcredit balance of SPML in OM Metal SPML JV ( Ujjain).
Pursuant to the provisions of Section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hasappointed Mr. Brij Kishore Sharma Partner M/s B K Sharma & Associates a firm ofCompany Secretaries in Practice to conduct Secretarial Audit of the Company. The Reportof the Secretarial Audit in Form MR-3 for the financial year ended March 31 2019 isenclosed as Annexure V to this Report. There are qualifications reservations or adverseremarks made by the Secretarial Auditor in his report.
The Secretarial Audit Report for the financial year ended March 31 2019 contain withthe qualification/reservation/adverse remark/ disclaimer which are replied by the Board ofDirectors hereunder:
Auditors Remark - 1
As per Regulation 25 (6) of SEBI (LODR) Regulations 2015 An Independent Director whoresigns shall be replaced by a new Independent Director at the earliest but not laterthan the immediate next meeting of the Board or three months whichever is later.Mr. RamKumar Gupta has resigned on 6th January 2018. The Board of Directors of the Company hasappointed new Independent Director Mr. Naresh Kumar Paliwal on 20th April 2018. As newIndependent Director has been appointed after three months from the date of resignation ofold director.
Your Board was taking steps to appoint an independent director to comply therequirement of law. The Board had identified some person and was in the process ofselecting of proper candidate.
After selecting proper candidate the board immediately appointed him. However thisprocess took a little more time ( 15 days) than prescribed by the SEBI LODR 2015.
Auditors Remark - 2
The company has submitted Audited Financial Results for Quarter and Year ended 31stMarch 2018 on 31.05.2018 at 00:00:26 AM to BSE and at 00:00:04 AM to NSE.BSE has finedfor Rs.5000/- in this respect for delay submission of Financial Results for the same.
The Board Meeting was concluded at 11.45 p.m. on 30th May 2018 and the results wereuploaded at 12.01 a.m. on 31st May 2018 within 30 minutes of the conclusion of Boardmeeting.
Auditors Remark - 3
The company has submitted Quarterly Standalone Financial Results for Quarter ended 30thSept. 2018 on 15.11.2018 at 00.30 AM to BSE and at 00.36 AM to NSE. BSE has fined forRs.5000/- in this respect for delay submission of Financial Results for the same.
The Board Meeting was concluded at 11.55 p.m. on 14th November 2018 and the resultswere uploaded at 12.30 a.m. on 15th November 2018.
Secretarial Compliance Report
In accordance with Regulation 24(A) of the Listing Regulations the Company has engagedthe services of Mr. Brij Kishore Sharma (CP No. 12636) Practicing Company Secretary andSecretarial Auditor of the Company for providing this certification and the same has beenannexed as Annexure - VIII to the Board's Report forming part of this Annual Report.
The Company is required to maintain cost records for certain products as specified bythe Central Government under sub-section (1) of Section 148 of the Act and accordinglysuch accounts and records are made and maintained in the prescribed manner.
Pursuant to the provisions of Section 148 of the Companies Act 2013 and as per theCompanies (Cost Records and Audit) Rules 2014 and amendments thereof the Board on therecommendation of the Audit Committee has approved the appointment of M/s. M. Goyal &Co. Cost Accountants as the Cost Auditors for the Company for the financial year endingMarch 31 2020 and the Company has received Consent from M/s. M. Goyal & Co. CostAccountants to act as Cost Auditor for Conducting Audit of the Cost Records for theFinancial Year 2019-20 along with a certificate confirming their Independence and Arm'sLength Relationship.
The due date for filing the Cost Audit Report of the Company is within 180 days fromthe end of the accounting year.
In accordance with the requirement pursuant to Section 148 of the Act your Companycarries out an annual audit of cost accounts. The Cost Audit Report and the ComplianceReport of your
Company for FY18 was filed with the Ministry of Corporate Affairs through ExtensiveBusiness Reporting Language (XBRL) by M/s M. Goyal & Co. Cost Accountants.
A proposal for ratification of remuneration of the Cost Auditor for financial year2019-20 is to be placed before the shareholders at the ensuing 47th Annual GeneralMeeting.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The particulars as prescribed under sub-section (3)(m) of Section 134 of the CompaniesAct 2013 read with Companies (Accounts) Rules 2014 relating to conservation of energytechnology absorption foreign exchange earnings and outgo as required to be disclosedunder the Act are provided in Annexure I to this Report.
VIGIL MECHANISM/WHISTLE BLOWER POLICY
As per Section 177(9) and (10) of the Companies Act 2013 and as per regulation 22 ofthe Listing Regulations the company has established Vigil Mechanism for directors andemployees to report genuine concerns and made provisions for direct access to theChairperson of the Audit Committee. Company has formulated the present policy forestablishing the vigil mechanism/ Whistle Blower Policy to safeguard the interest of itsstakeholders Directors and employees to freely communicate and address to the Companytheir genuine concerns in relation to any illegal or unethical practice being carried outin the Company. The said policy has been also put up on the website of the Company at thefollowing link:
Periodic assessments to identify the risk areas are carried out and management isbriefed on the risks in advance to enable the company to control risk through a properlydefined plan. The areas of risk include- Liquidity risk Interest rate risk Credit riskCommodity price risk foreign currency fluctuation risk Market risk Salary riskInterest risk Investment risk Health Safety And Environment Risks Political Legal AndRegulatory Risks fraud and cyber security and Other Operational Risks etc. The Board isalso periodically informed of the business risks and the actions taken to manage them. TheCompany has formulated a policy for Risk management with the following objectives:
Provide an overview of the principles of risk management
Explain approach adopted by the Company for risk management
Define the organizational structure for effective risk management
Develop a "risk" culture that encourages all employees to identifyrisks and associated opportunities and to respond to them with effective actions.
Identify access and manage existing and new risks in a planned and coordinatedmanner with minimum disruption and cost to protect and preserve Company's human physicaland financial assets.
Fundamentals of our risk management system
The company has in place a code of conduct and high safety standards in plant operationto protect its employees and the environment. The company has instituted control bodieswhich verify important business decisions. Organizational measures are undertaken toprevent the infringement of guidelines and laws.
Goals of risk management
At OMIL the risks are detected at their earliest possible and necessary measures aretaken to avoid economic and environmental damage. The company lays due emphasis onavoidance of risks that threaten the company's continued existence.
Organizational responsibilities and tools
Regular risk analyses at the corporate level are conducted by OMIL's management and byvarious departmental heads.
Specific risks pertaining to operating divisions and units are continually registeredevaluated and monitored centrally. The Board of Directors regularly receives reports onthe risk situation of the company.
PARTICULARS OF LOANS GUARANTEES AND INVESTMENTS MADE UNDER SECTION 186 OF THECOMPANIES ACT 2013
The particulars of Loans & guarantees given investments made and securitiesprovided have been disclosed in the financial statements forming part of this AnnualReport.
RELATED PARTY TRANSACTIONS
All related party transactions that were entered into during the financial year were onan arm's length basis and were in the ordinary course of business and approval of theAudit Committee Board of Directors & Shareholders was obtained wherever required.(Annexure VII)
During the Financial year M/s Jupiter Metal Private Limited a promoter group companyhas given an advance of Rs. 36 crores towards purchase of company's property situated OmTower Church Road M.I. Road Jaipur - 302001 except this there was no material Relatedparty Transactions that may have potential conflict with the interest of the listedCompany at large.
There are no person(s) or entities forming part of the Promoter(s)/Promoter(s) Groupwhich individually hold 10% or more shareholding in the Company except T C Kothari &Family Trust and that the Company has not entered any transaction with this entity.
Pursuant to Regulation 23(9) of the Listing Regulations your Company has filed halfyearly report on Related Party Transactions with the Stock Exchanges for the year endedMarch 31 2019.
During the year under review the Company revised its Policy on dealing with andMateriality of Related Party Transactions in accordance with the amendments to theapplicable provisions of the Listing Regulations. The Policy on materiality of relatedparty transactions and dealing with related party transactions as approved by the Boardmay be accessed on the Company's website at the link:http://www.ommetals.com/#/policies
The details of the related party transactions as per Indian Accounting Standards (INDAS) - 24 are set out in Standalone Financial Statements of the Company.
CORPORATE SOCIAL RESPONSIBILITY
The brief outline of the Corporate Social Responsibility (CSR) Policy of the Companyand the initiatives undertaken by the Company on CSR activities during the year and AnnualReport on CSR Activities are set out in Annexure III of this Report. The Policy isavailable on the website of the Company on the following link:
The Composition of the Corporate Social Responsibility Committee are given below:
Company Secretary of the Company shall act as the Secretary to the Corporate SocialResponsibility Committee.
Further details regarding Corporate Social Responsibility Committee is are given in theCorporate Governance section of the annual report which forms part of the Director'sReport.
EXTRACTS OF ANNUAL RETURN
The Extract of Annual Return as required under section 92(3) of the Companies Act 2013and rule 12(1) of the Companies (Management and Administration) Rules 2014 in Form MGT-9is annexed herewith for your kind perusal and information. (Annexure: VI) and is alsoavailable on the Website of the Company
PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES
The information required under Section 197 of the Act read with rule 5(1) 5(2) and5(3) of the Companies (Appointment and Remuneration of managerial Personnel) Rules 2014are given in ANNEXURE VIII forming part of this report.
The Company does not have scheme or provision of money for the purchase of its ownshares by employees/directors or by trustees for the benefit of employees/directors.
List of top ten employees in terms of remuneration drawn is also given in ANNEXUREVIII.
The Company has complied with the applicable provisions of the Secretarial Standardsissued by the Institute of Company Secretaries of India with respect to General and BoardMeetings.
POWER OF ATTORNEY HOLDERS;
For the implementation and effective execution of the Projects and various Laws asapplicable to the Company the Board of Directors entrusted the following HOD's withresponsibility via Power of Attorney granted to them and they are directly responsible forcompliances:
The Labour Management relation has been cordial during the year under review.
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITIONAND REDRESSAL) ACT 2013
In Compliance with the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013 your Company has constituted an 'InternalComplaints Committee' ('Committee'). No complaint has been received during the Year ended31st March 2019 in this regard.
The Company has in place a Policy for Prevention of Sexual Harassment at Workplace asper requirement of the Sexual Harassment of Women at Workplace (Prevention Prohibitionand Redressal) Act 2013.
Internal Complaint Committee has been set up to redress the complaints receivedregarding sexual harassment. All employees (permanent contractual temporary trainees)are covered under this policy. The following is the Summary of Sexual Harassmentcomplaints received during the year ended 31st March 2019 in this regard.
(a) Number of complaints pending at the beginning of the year: NIL
(b) Number of complaints received during the year: NIL
(c) Number of complaints disposed off during the year: NIL
(d) Number of cases pending at the end of the year: NIL HEALTH SAFETY AND ENVIRONMENT
The safety excellence journey is a continuing process of the Company. The safety of thepeople working for and on behalf of your Company visitors to the premises of the Companyand the communities we operate in is an integral part of business. We have taken severalconscious efforts to inculcate a safer environment within place of work.There is a strongfocus on safety with adequate thrust on employees' safety.
The Company has been achieving continuous improvement in safety performance through acombination of systems and processes as well as co-operation and support of all employees.
The Equity Shares of the Company continue to remain listed with the National StockExchange of India (NSE) and Bombay Stock Exchange (BSE). The listing fees of the exchangesfor the financial year 201920 have been paid.
CARE has assigned ratings symbol of 'BBB+ for its long term facilities'& PR1 tocompany. Credit Rating was obtained on 1st October 2018.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
In terms of provisions of Regulation 34(2)(e) of Securities and Exchange Board of India(Listing Obligations and Disclosure) Regulations 2015 the Management Discussion andAnalysis is presented in a separate section forming part of the Annual Report.
It provides details about the overall industry structure global and domestic economicscenarios developments in business operations/ performance of the Company's variousbusinesses viz. decorative business international operations industrial and homeimprovement business internal controls and their adequacy risk management systems andother material developments during the financial year 2018-19.
INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY
The Company has a well-defined Internal Control system which is adequate andcommensurate with the size and nature of business. Clear roles responsibilities andauthorities coupled with internal information systems ensure appropriate informationflow to facilitate effective monitoring. Adequate controls are established to achieveefficiency in operations optimum utilization of resources and effective monitoringthereof and compliance with applicable laws. An exhaustive programme of internal auditsincluding all Branches of the Company all over India review by management and documentedpolicies guidelines and procedures supplement the internal control system.
The Audit Committee regularly reviews the adequacy and effectiveness of the internalcontrols and internal audit function.
DETAILS IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THEFINANCIAL STATEMENTS
The Company has Internal Financial Controls which are adequate and were operatingeffectively. The controls are adequate for ensuring the orderly and efficient Conduct ofthe Business including adherence to the Company's policies the safeguarding of assetsthe prevention and detection of Fraud and errors the accuracy and completeness ofaccounting Records and timely preparation of reliable financial information.
BUSINESS RESPONSIBILITY REPORT
Regulation 34(2) of the Listing Regulations provides that the Annual Report of the Top500 listed entities based on market capitalization (calculated as on March 31 of everyfinancial year) shall include a Business Responsibility Report ("BRR"). Sinceyour Company does not feature in the Top 500listed entities as per market capitalizationas on March 31 2019 the Business Responsibility Report for the financial year 2018-2019does not form a part of the Annual Report.
Your Company has been following principles of Good Corporate Governance Practices overthe years. Your Company has complied with the Corporate Governance Code as stipulatedunder the Listing Regulations. In Compliance with Regulation 34 of the Listing Regulationsa separate section on Corporate Governance along with certificate from BK Sharma andAssociates Practicing Company Secretaries confirming compliance forms part of the AnnualReport.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS:
There are no significant material orders passed by the regulators /courts/tribunalswhich would impact the going concern status of the Company and its future operations.
During the Year under review your company has not accepted any Deposits within themeaning of Section 73 and 74 of Companies Act 2013 read with the Companies (Acceptance ofDeposits) Rule 2014 and as such no amount of principle or interest was outstanding asof the Balance Sheet date.
Your Directors deeply appreciate the valuable co-operation and continued supportextended by the Company's Bankers Financial Institutions Government agenciesCollaborators Stockiest Dealers Business Associates and also the contribution of allemployees to the Company.
On Behalf of the Board of Directors
Quick Links for Om Metals Infraprojects:
Notice: Undefined variable: mediaAbsUrl in /usr2/unibs/application/modules/live-market/controllers/CompanyController.php on line 6119