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Orient Refractories Ltd.

BSE: 534076 Sector: Engineering
BSE 00:00 | 24 Apr Orient Refractories Ltd
NSE 05:30 | 01 Jan Orient Refractories Ltd
OPEN 149.35
52-Week high 268.50
52-Week low 108.50
P/E 19.15
Mkt Cap.(Rs cr) 1,778
Buy Price 145.00
Buy Qty 10.00
Sell Price 169.45
Sell Qty 10.00
OPEN 149.35
CLOSE 146.75
52-Week high 268.50
52-Week low 108.50
P/E 19.15
Mkt Cap.(Rs cr) 1,778
Buy Price 145.00
Buy Qty 10.00
Sell Price 169.45
Sell Qty 10.00

Orient Refractories Ltd. (ORIENTREF) - Director Report

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Company director report

Dear Shareholders

Your directors are pleased to present the 9th Annual Report of Orient RefractoriesLimited (the "Company") along with the audited financial statements for thefinancial year ended 31 March 2019.


(Amount in दLacs)

Particulars 2018-19 2017-18
Gross revenue from operations 74794.70 63722.73
Total expenditure before finance cost and depreciation 61996.63 51017.74
Operating Profit 12798.07 12704.99
Add: Other income 1817.29 1062.23
Profit before finance cost depreciation exceptional items and taxes 14615.36 13767.22
Less: Finance costs - -
Profit before depreciation exceptional items and taxes 14615.36 13767.22
Less: Depreciation 863.12 682.69
Profit/(Loss) before exceptional items & tax 13752.24 13084.53
Add/(Less): Exceptional Items - -
Profit before taxes 13752.24 13084.53
Less: Tax Expense 4769.58 4501.21
(A) Profit/(Loss) after taxes 8982.66 8583.32
(B) Total other comprehensive income (19.51) (14.43)
(C) Total comprehensive income for the period [ A + B ] 8963.15 8568.89
Retained Earnings: Balance brought forward from the previous year 31079.84 26125.87
Add: Profit for the period 8982.66 8583.32
Add: Other Comprehensive Income recognised in Retained Earnings (19.51) (14.43)
Balance Which the Directors have apportioned as under to: 40042.99 34694.76
(i) Dividend on Ordinary Shares 3003.48 3003.48
(ii) Tax on dividends 617.37 611.44
Total Appropriations 3620.85 3614.92
Retained Earnings: Balance to be carried forward 36422.14 31079.84


The Company demonstrated strong double digit growth during financial year 2018-19. Therevenue (excluding GST) stood at द74794.70 lacs as compared to द62678.77 lacs in2017-18 registering a growth of 19.33%.

The Company ended the year with a 5.07% increase in profit before tax as compared tothe previous year. Profit before tax for the year 2018-19 stood at द13748.28 lacs.

As per the list of Top 1000 companies (based on Market capitalization as on 31 March2019) available on NSE website your Company is now one of the top 500 companies (based onMarket capitalization as on 31 March 2019) and is required to comply with variousadditional regulations stated in SEBI (LODR) Regulations 2015. The Company has alreadyinitiated steps to comply with such new regulations.


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 tons 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 cementnonferrous petrochemicals etc.

Products of ORL are manufactured at its state-of-the-art manufacturing facility atBhiwadi in Rajasthan. The Company has ongoing programs for improving efficiency andeffectiveness of its manufacturing processes raw material cost energy conservationcontrol over working capital and to produce special refractories at low cost so as to addmaximum value to the customers. Energy efficient installations have been made at thefactory. Best in class safety measures and processes have been put in place and improvedupon 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.

In the year 2016 the parent company of ORL RHI AG reached at an agreement withcontrolling shareholding of another global refractory company M/S Magnesita GP &Rohne and became the largest refractory company in the world. The combined Company calledRHI Magnesita is serving ORL customers by offering more comprehensive range of productsand services.


RHI Magnesita is the leading global supplier of high-grade refractory products systemsand solutions which are indispensable for industrial high-temperature processes exceeding1200C in a wide range of industries including steel cement non-ferrous metals andglass. With a vertically integrated value chain from raw materials to refractory productsand full performance-based solutions RHI Magnesita serves customers in nearly allcountries around the world.

The Company has a high level of geographic diversification with more than 14000employees in 35 main production sites and more than 70 sales offices around the world. RHIMagnesita intends to leverage its global leadership in terms of revenue scale productportfolio and diversified geographic presence to target strategically those countries andregions benefitting from more dynamic economic growth prospects.

Its shares have a premium listing on the London Stock Exchange (symbol: RHIM) and are aconstituent of the FTSE 250 index.


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 inIndia and importantly will provide customers with one single refractory solutionsplatform offering the industry's most comprehensive product portfolio including amongothers Magnesia and Alumina based bricks and mixes for large industrial clients as wellas specialty refractory products with proven supply and sales capabilities.


Global Steel Industry :

In 2018 despite concerns about trade protectionism global steel production grew by4.6% to a new peak of 1.81 billion tonnes. In 2018 China accounted for 52% of globalsteel production East Asia 11% EU28 9% NAFTA 7% India 6% CIS 5% and the rest of theworld 9%. Production in 2018 increased by 1.0% in East Asia decreased 0.3% in EU28 andincreased 4.1% in North America 4.9% in India 0.3% in CIS and 5.7% in the rest of theworld. In Q1CY19 China's steel production grew to 231.1 Mt vs. 210.2 mn MT USA's steelproduction stood at 30.7 Mt vs. 29.5 Mt and there was slight slow down seen across Europe.

Indian Steel Industry :

In Q4 FY19 Domestic Steel production was flat at 27.4 Mt compared to the same periodin 2018. Indian Steel consumption has grown by 5.7% YoY and reached 92.1 MT in 2018 (asper World Steel Association). Amongst the consumption driven sectors automotive andconsumer durables have clocked ~16% and ~22% growth respectively in 2018. Howeverautomotive sector is witnessing softer demand conditions since Oct-Nov 2018. Going by therecent trend and a strong base effect growth is expected to slow down in the first halfof 2019. However revival is expected in the 2nd half of the year with pre-buying beforeBS-VI implementation and improvement in consumption growth. The Indian Steel Associationhas forecasted India's steel demand to grow by 7.1% in calendar year 2019 and by 7.2% incalendar year 2020. Investment driven sectors such as Construction Capital Goods &Railways are likely to maintain the healthy growth momentum driven by infrastructureprograms such as Bharatmala Sagarmala Railway track electrification dedicated freightcorridors metro rails etc. In the wake of stressed steel assets getting acquired throughNCLT by stronger players and brownfield expansions being announced by large steel players;there could be an additional capacity of about 20-30 mn tons over the next 2 years. As perthe steel industry report India has become the second largest producer of steel surpassingJapan and is well placed to achieve the Indian Steel Ministry's target of erecting steelcapacity of 300 million tons per annum by the end of 2030.

Global Refractory Industry :

Global Refractories Market is currently around $39.2 billion and it is estimated togrow at a CAGR of 5.2% and reach a size of $48.6 billion by 2023. Asian market is poisedto grow faster than the rest of the world as steel production heats up in the Asianpacific countries.

Indian refractory Industry :

Indian refractory industry is around Rs 9000 crores which is 3% of the globalrefractory market. Indian market is expected to grow at 5-6%. Indian refractory makers arecurrently reeling from high raw material prices which are expected to see some kind ofreduction in FY19. Prices for graphite have declined over the last 6 months whilebauxite aluminum and magnesia prices continue to remain firm. The refractory industry islooking for alternate minerals and trying to increase the use of recycled materials.


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 300MT per annum steel capacity target by the end of 2030which bodes well for the future of this industry. The Indian steel industry is undergoingconsolidation which is expected to build up its strength but also to provide a highermarket share for industry leaders. As a result of substantial restructuring andconsolidation in the India steel industry demand for higher performance and betterquality solutions has increased - a development which corresponds well to our strengths asa Group and enables us to take advantage of this position whilst also working to furtherstrengthen our position in the market in terms of cost competitive refractory solutions.

As a combined group in India RHI Magnesita'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 productionfoot print in India through maximizing the operational and supply chain excellence.



The year 2018 was good for India with the GDP growth of over 7%. However certainfactors negative factors slowed down the industrial growth and made for a more competitivedomestic market. Below are the factors that resulted in challenging times for theindustries in terms of growth and margins-

1. Bad debts in banking system and non-performing assets led to low investments and lowcapitalization in Indian Industry there were no Greenfield projects in 2018 for steelmanufacturing.

2. Managing currency risk is a big concern to keep the margins intact. Rupeedepreciated against dollar in second half of the year resulting in reduced margins andimpacted Q3/Q4 results of the Company.

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

4. Trade tensions between the countries have lead to slow geographical growth newmarkets has to be explored for capacity utilization.

5. Crude oil prices are increasing continuously having an impact on prices.

6. There is slowdown in demand due to trade tension between major steel producingcountries currency volatility and normalization of monetary policy in EU & US.

7. Capacity cut across the industries to safeguard the environment especially Chinahas created scarcity of raw material.

Opportunities :

India became the second largest steel producer in the world surpassing Japan after adecade of solid growth. An ambitious government program aims to reach 300 kton of steelproduction by 2030 and triple the output of 2016. The per capita steel consumption islikely to increase from 63 kg to 160 kg. India's steel production and demand is expectedto increase by 5% and 7.3% respectively in 2019 backed by growth in investment ininfrastructure and construction projects complemented by strong automotive demand. Atpresent Indian steel industry is running at 78% utilization rate ( current capacity 130kton per annum). The demand outlook for next 3-5 years looks set to mirror the GDP growthat 7 % + led by robust demand from infrastructure and construction sectors supported byrevival in industrial capex. After 2019 general elections it is expected that theGovernment of India will take some more measures in upcoming fiscal budget to boost theoverall sentiments.

ORL is fully focused on taking advantage of the expected increase in steel productionas the parent Company RHI Magnesita has started integration of three legal entities inIndia for pooling the resources for market expansion product expansion using expertise ofthe parent company and is also exploring the possibilities of geographical expansion. ORLexpects the ongoing consolidation efforts to conclude by mid of 2019 and pave ways forstrong growth of the combined entity by better leveraging the growth potential of theSteel Industry. India steel market is growing at ~5% and ORL India business grew by 9-10 %in terms of volume and 19 % in terms of sales value as compared to FY 17-18 and isexpected to further boost up.

Further India's economy grew at faster pace than most major nations in 2018 and thisyear it is poised to overtake UK to become the world's fifth biggest economy. ORL India istaking active part in this journey.

The expansion plans of the larger Steel industries to increase the capacity of steelproduction are on track and schedule is to complete the projects very fast. Steel Industryin India is going under consolidation primarily due to ongoing Insolvency and BankruptcyCode. This is expected to result in revival of steel industry and higher market share formarket leaders like Tata Steel JSW Steel etc. and potential entry for new MNC players inIndia like Arcelor Mittal. Consolidation of legal entities with ORL in India will haveincrease the strength of its foot print in coming time.


Trade tensions volatile currency movement and uneven global growth are increasinguncertainty for sustainability of the increase in global steel usage. In thisunpredictable environment India growth path remains steadfast backed by Indian Governmentspending on Infrastructure roads rails transmission and housing.


In view of increase in demand the existing capacity of isotopic products of 9300 tonsper annum was increased to 11700 tons per annum in 2018. The expansion project wascompleted in record one year time. The addition serves to address the bottle necks inproduction capacity by building an additional ISO production line in existing factory atBhiwadi. The other project includes installation of hydraulic press for slide gaterefractory which is expected to be completed in third quarter of FY 2019-20.


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 all oilfired Klins to gas fired Klins.


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 2019 (previous year द2.50 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 23 July 2019. The dividend will bepaid by 22 August 2019.

The register of members and share transfer books will remain closed from Tuesday 2July 2019 to Tuesday 9 July 2019 (both days inclusive) for the purpose of AGM and paymentof the dividend for the financial year ended 31 March 2019.


The paid up equity share capital as on 31 March 2019 was द1201.39 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.


The board of directors on 30 April 2019 approved the acquisition of the entire paid-upequity share capital of "Intermetal Engineers India Private Limited" (IEIPL)[CIN: U28920MH1988PTC047421] a company comprising of 1597 equity shares of द100/- eachto make it a wholly owned subsidiary of the Company. On 18 May 2019 the Company completedthe process of acquisition of IEIPL. The Company has paid for 1597 equity shares of IEIPL@ द63244/- per equity share of द100/- each.

Dr. Vijay Sharma Director and Mr. Parmod Sagar Managing Director & CEO of theCompany have joined the board of IEIPL as nominee directors of Orient Refractories Limitedw.e.f. 18 May 2019.

IEIPL was incorporated on 20 May 1988 for marketing and manufacturing of steel plantequipment (viz. slide gate system for flow control of liquid steel oxygen lancing andCCM assemblies such as mould jacket assembly dummy bar assembly) specially used duringthe flow of liquid steel for continuous casting ingot casting which are exported tovarious countries and caters to about 300 to 400 regular steel plant customers in India.

IEIPL having revenues of द546 lacs and total asset size of द848 lacs as per theaudited balance sheet as on 31 March 2018.

Turnover of last 3 years are as follows : 31 March 2018: द417.35 lacs; 31 March2017: द466.49 lacs & 31 March 2016: द541.82 lacs.

The acquisition was not fall within related party transaction and none of the promoter/ promoter group/ group companies have any interest in IEIPL.


The board of directors of the Company at its meeting held on 31 July 2018 hadgranted its in-principle approval to the scheme of amalgamation of RHI India PrivateLimited (RHI India) and RHI Clasil Private Limited (RHI Clasil) (together the MergingEntities) with and into the Company subject to approval of the shareholders and creditorsof the three companies the stock exchanges the Securities and Exchange Board of India(SEBI) the National Company Law Tribunal and other regulatory authorities.

In this regard the board of directors had approved the share exchange ratio i.e. forevery 100 equity shares of face value of द10 each of RHI India issue of 7044 equityshares of face value of Re. 1 each of the Company and for every 1000 equity shares offace value of द10 each of RHI Clasil issue of 908 equity shares of face value of Re. 1each of the Company.

Subsequently the Company had filed an application with the stock exchanges forobtaining their approval under Regulation 37 of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 which approval was granted by the stockexchanges vide their letters dated 12 October 2018. Pursuant to these approvals theCompany along with the merging entities had approached the National Company LawTribunal Mumbai bench (the NCLT) by way of joint company scheme application no. 1556 of2018 seeking directions for convening the meetings of their respective shareholders andcreditors. The NCLT vide its order dated 29 March 2019 (Order) issued directions to theCompany and the merging entities to hold the meetings of their respective shareholders andcreditors on 17 May 2019.

The Company completed dispatch and publication of notices (along with the relevantannexures) of the meetings in accordance with the directions of the NCLT. In theirrespective meetings held pursuant to the NCLT Order the shareholders and the unsecuredcreditors of the Company approved the proposed scheme of amalgamation with requisitemajority. The Company along with the Merging Entities has filed a joint company schemepetition with the NCLT on [27 May 2019] for sanction of the scheme of amalgamation and thesame is now pending with the Hon'ble NCLT.


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 2019.

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 2019 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 employees 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 became 100% wholly owned subsidiary of theCompany w.e.f. 18 May 2019.


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 2019 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 2019 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. 30 to thefinancial 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 board of directors of the Company has approved a corporate social responsibility(CSR) policy based on the recommendation of the CSR Committee. The board has formed acommittee on CSR in accordance with Companies Act 2013. The composition of the same hasbeen given in corporate governance report. The CSR policy of the Company is available onthe Company's website and can be accessed on the Company's website at the link: http://www.

In the year 2018-19 the Company was required to spend द217.07 towards CSRactivities however the Company spent द158.55 lacs towards the CSR activities.

The amount of द58.52 lacs remained unspent due to delay in identifying the skilldevelopment projects in India. It was earlier decided to held skill development projectsin collaboration of Austrian Development Agency the project was however later on scrappedresulting in unspent amount in CSR as compared to budget. The board on the recommendationof the CSR Committee has decided not to carry forward the unspent amount.

The initiatives undertaken by the Company on CSR activities during the year is set outin Annexure - I.


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 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.


Mr. Reinhold Steiner and Ms. Verena Buzzi resigned from the board effective 1 April2019. The board places on record their deep appreciation for the contribution during theirtenure.

Ms. Jacqueline Michelle Knox was appointed as an additional director on 23 April 2019and she will be retiring at the ensuing annual general meeting of the Company unlessre-appointed. The board proposes to appoint her as director of the Company liable toretire by rotation.

Mr. Erwin Jankovits retires by rotation and being eligible has offered himself forre-appointment. Your board recommends his re-appointment.

Dr. Vijay Sharma (DIN-0880113) was appointed as an independent director on the board ofthe Company w.e.f. 12 November 2014 for a period of 5 years. He holds office as anindependent director of the Company up to 11 November 2019. The nomination andremuneration committee of the board of directors on the basis of the report ofperformance evaluation of independent director has recommended re-appointment of Dr.Vijay Sharma as an independent director for a second term of 5 (five) consecutive years onthe board of the Company. Your Board recommends his re-appointment.

In compliance of the Securities and Exchange Board of India (Listing Obligations andDisclosure Requirements) (Amendment) Regulations 2018 notified on 9 May 2018 approvalof the shareholders by way of a special resolution is required for continuation ofdirectorship of Mr. Rama Shanker Bajoria who had attained the age of 75 years on 17 May2018.

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 Company has received declaration from all independent directors of the Companyconfirming that they meet with the criteria of independence as laid down under Section149(6) of the Companies Act 2013 confirming that they meet the criteria of independenceas prescribed thereunder 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 and accordingly the report on corporate governanceforming part of this annual report.

On the basis of market capitalization as on 31 March 2019 your company is now one ofthe top 500 listed entities and in terms of the provision of SEBI (LODR) 2015 is requiredto have minimum 6 directors including a women non-executive independent director on itsboard. The Company is taking necessary steps to comply with the same. The Company willalso take required steps to reconstitute its various committees if required.


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 for appointment 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 17 May 2018 to review theperformance of the non-independent directors the Board as a whole and the Chairman on theparameters of effectiveness and to assess the quality quantity and timeliness of the flowof information between the Management and the Board. The same was discussed in the boardmeeting that followed the meeting of the independent directors at which the performanceof the board its committees and individual directors was also discussed.


Statutory auditor

M/s. Price Waterhouse Chartered Accountants LLP (Firm Registration No.012754N/N500016) were appointed as Statutory Auditors of the Company at the 7 AGM held on25 September 2017 for a period of 5 years for auditing the accounts of the Company fromthe conclusion of 7 AGM till the conclusion of 12 AGM of the Company to be held in year2021-2022.

Internal auditor

The board has appointed M/s. Chaturvedi & Partners as an internal auditors for thefinancial year 2018-19 under Section 138 of the Companies Act 2013 and they havecompleted the internal audit as per the scope defined by the audit committee.

Secretarial auditor

The Company has appointed M/s. Naresh Verma & Associates Company Secretaries inPractice to conduct secretarial audit for the financial year 2018-19 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 2019 is annexed herewithmarked as Annexure - II.

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 2020.

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. 50000 plus out-ofpocket expenses and taxes payable to the Cost Auditors for thefinancial year ending 31 March 2019.

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 2019 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 point no. 16pertaining to CSR disclosure stated in this report. The remaining remarks of thesecretarial auditors are self-explanatory and no further explanation thereof is required.There are no frauds reported in the reports of the auditors as mentioned under sub-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 audit committee comprised of two independent non-executive directors viz. Dr. VijaySharma (Chairman) & Mr.R. S. Bajoria and one non-executive director viz. Mr. ErwinJankovits. 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 four times in the year the details of whichare provided in the corporate governance report.

iv. Particulars of loans given investment made guarantees given and securitiesprovided

The Company has not given any loans guarantee or investments covered under theprovisions of Section 186 of the Companies Act 2013.

v. Conservation of energy technology absorption and foreign exchange earnings andoutgo

The particulars relating to conservation of energy technology absorption foreignexchange earnings and 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 - III.

vi. Extract of annual return

Extract of annual return of the Company is annexed herewith marked as Annexure - IV.

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 - V.

viii. Corporate governance report

Report on corporate governance is annexed herewith as Annexure - VI to this report.

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 2019 in terms ofRegulation 34 of the Listing Regulations is annexed to this report as Annexure - VII.

x. Transfer of amounts to Investor Education and Protection Fund

The Company did not have any fund lying unpaid or unclaimed for a period of sevenyears. Therefore there was no fund which was required to be transferred to InvestorEducation and Protection Fund (IEPF). Pursuant to the provisions of the Investor EducationProtection Fund (Uploading of information regarding unpaid and unclaimed amounts lyingwith companies) Rules 2012 the Company has already filed the necessary form and uploadedthe details of unpaid and unclaimed amounts lying with the Company as on the date of lastAnnual General Meeting (i.e. 10 September 2018) with the Ministry of Corporate Affairs.

xi. Listing with stock exchanges

The Company confirms that it has paid the annual listing fees for the year 2019-20 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 board of directors would like to express their sincere appreciation for theassistance and co-operation received from the financial institutions banks Governmentauthorities customers vendors and members during the year under review.

The boards of directors also wish to place on record its deep sense of appreciation forthe committed services by the Company's executives staff and workers.

Last but not least your Directors wish to place on record their warm appreciation toyou for your continuous support and encouragement.

For and on behalf of the Board of Directors
Dr. Vijay Sharma
Place : Gurugram Chairman
Date : 28 May 2019 (DIN: 00880113)