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Om Metals Infraprojects Ltd - Directors' Report

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Code: 531092
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Code: OMMETALS
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1 Year : Rs 58.15 (-28.98%)
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Dear Members

Your Directors have pleasure in presenting 44 Annual Report of your Company togetherwith the Audited Financial Statement for the financial year ended 31 March 2016.

Financial Results (Rs. In Lacs)

Particulars 2015-16 2014-15
Revenue from operations 18905.10 22205.20
Total expenditure before finance cost depreciation 13775.26 18150.33
Earnings before interest tax depreciation and amortisation (EBITDA) 5129.84 4054.87
Other income (net) 849.15 1634.31
Finance Charges 1325.43 1355.84
Depreciation and amortisation expense 748.99 854.68
Profit before Exceptional Items and Tax 3904.57 3478.66
Exceptional Items 0 0
Profit before tax 3904.57 3478.66
Provision for Tax 789.90 573.30
Net Profit After Tax 3114.67 2905.36
Balance of Profit brought forward 26172.22 23730.98
Balance available for appropriation 29379.45 26636.34
Adjustment related to Fixed Assets 0 72.25
Amount transferred to Revaluation 0 4.84
Reserve due to excess Reversal in Previous
Years
Proposed Dividend on Equity Shares 0 192.61
Interim Dividend 288.91 0
Corporate Dividend Tax 58.82 39.44
Transfer to General Reserve 165.00 155.00
Surplus carried to Balance Sheet 28866.72 26172.22

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.

At present your Company operates in following core sectors- Engineering &Infrastructure and Real Estate Development and is actively exploring some newopportunities for diversifying in Industrial manufacturing Packaging products and SmartCity development and oil n gas sector.

The Company has reported a Profit before Tax (PBT) of Rs.3905 Lacs as against Rs. 3479Lacs in the previous year.

DIVISIONAL ANALYSIS

ENGINEERING DIVISION

The Turnover of this division this year is Rs. 15658.64 lakhs and profit is Rs 2448.55lakhs as against Turnover of Rs. 20809.09 lakhs & profit is Rs. 2633.36 Lakhs in thelast 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 Company has completedEPC work for Jaipur bhilwara road project and NHPC projects in UriTeestaParbati andChamera are almost complete. In recently secured contracts the Company has started revenuerealization in kutchch project of SSNL and in Rampul project ( UP)..

REAL ESTATE DEVELOPMENT

The Turnover of this division this year is Rs.3259.74 lakhs and profit is Rs.666 lakhsagainst Turnover of Rs. 1446.09 lakhs & profit is Rs. 272 lakhs in the last year.

There being a potential realizable value of Land Bank/ developable/under developmentarea in Company/subsidiary/step subsidiary. The company has decided to sale some of itsreal estate assets in a consolidation move.

FUTURE OUTLOOK

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:

O Enter new verticals o Packaging and Manufacturing o Smart city InfrastructureDevelopment

O Enlarge global footprint through acquisition and strategic Joint Ventures in the corebusiness.

O Key and strategic real estate projects on very promising locations.

O Establish presence in varied structure steel design and fabrication works inbridges large building constructions and heavy engineering works.

O Tap India's second largest potential in the world both in Hydro Electric Power andirrigation by capitalizing on the plans of the government of India plans of river linkingproject.

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 in its meeting held on March 11 2016 declared an interim dividend of Rs0.30/- per equity share of face value of Re. 1/- each absorbing a sum of Rs. 34772680/-including corporate dividend tax of Rs. 5881537/- which was paid on or before March 312016. Your Directors recommend that the aforesaid interim dividend shall be declared asfinal dividend for the Year ended March 31 2016.

Considering the capital requirement for ongoing business expansion the Board ofDirectors do not recommend any final dividend on the equity shares.

The dividend payout for the year under review is in accordance with the Company'spolicy of consistent dividend pay out keeping in view the Company's need for capital itsgrowth plans and the intent to finance such plans through internal accruals to themaximum.

TRANSFER TO RESERVES

The Board of Directors proposes to transfer Rs. 16500000/- to General Reserve out ofthe amount available for appropriation.

CHANGES IN SHARE CAPITAL IF ANY

The paid up Equity Share Capital as on March 31 2016 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 as Annexure II.

Pursuant to the provisions of section 136 of the Act the financial statements of theCompany consolidated financial statements along with relevant documents and separateaudited accounts in respect of subsidiaries are available on the website of the Company.

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 6.3 lakh sqft with expected realization of `INR10000-15000/sqft. OMIL has invested INR 1.6 bn for land and development cost is expectedto be Rs 2-2.5 bn. The company expects to generate Rs 7.0 bn of Revenue from this projectover next 2-3 years which translates into pretax profits of Rs 2-2.5 bn. It has hiredyour company as EPC Contractor for structure building under architectural leadership ofStudio 18 a renowned architecture firm of USA. The company has sub contracted the entirestructural work to M/s Shapoorji Palonji. The project faced legal hurdles and obstructionfrom JDA we have moved to court and matter is under consideration.

OM METALS REAL ESTATE PRIVATE LIMITED – This wholly owned Subsidiary Companyis holding stakes in different SPV's and different subsidiaries for different projects indifferent locations. The development of all these projects are in some stages ofclearances.

SKYWAVE IMPEX LIMITED – This wholly owned Subsidiary Company is exploring agriand FMCG business.

PONDICHERRY PORT LIMITED The Company has acquired substantial staketotaling to 94.46% thereby making it as a Subsidiary of the Company. This Company hasearmarked for the development of sea port in Pudducherry. After the non clearance of theproject we have moved for arbitration proceedings and there our as well as of Governmentof Pondicherry claims remain unconsidered and we are taking legal advices.

Odisha Marine Services pvt Ltd- Company acquired 51% stake in this company toexplore the business in Oil n

Gas sector.

SANMATI INFRADEVELOPER PRIVATE LIMITED – This SPV wherein we own 25% stakealong with other stakeholders SPML Infra (25%) and Urban Infrastructure Trustees Ltd(UITL) (50%) which is a holding company of Pondicherry SEZ Co. Ltd (PSEZCL). PSEZCL owns amulti product SEZ in Pudduchery where 840 acre land has been acquired and balance 26 acreis pending. After the non clearance of this project we have moved to court

for legal remedies.

BHILWARA JAIPUR TOLL ROAD PRIVATE LIMITED – This SPV where Om metals has 49%stake has done the development of the 212 km road project in Jaipur-Bhilwara Stretch onBOT basis and COD achieved in December 2014. Om Metals has executed 100% of EPC work fora total project cost of Rs. 410 Cr. After the COD of the project all 4 toll plazas areoperational and generating revenue.

OM METALS-SPML INFRAPROJECTS PRIVATE LIMITED – A 457 Cr Kalisindh Dam projectin a SPV created with SPML infra on 50:50 basis is complete with some final leg work goingon. Om Metals had been executing EPC contract for major work.

GURHA THERMAL POWER COMPANY LIMITED – This company as a 50% JV of Om Metalshas a lignite based thermal project in Rajasthan. Some document formalities are pendingfrom RRVNL (Rajasthan Rajya Vidyut Nigam Ltd.) which is impeding financial closure of theproject. Due to abnormal delay we have intimated our stand of terminating the project fromour side .

OM GAIMA PROJECTS PRIVATE LIMITED – This JV created with Spanian Company hasno more business to do and we have processed to close this company.

PARTNERSHIPS /JV's:

OM METALS CONSORTIUM ( Partnership firm) – This prestigious partnership firmfor development 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 projectis scheduled to complete by next year.

OM RAY CONSTRUCTION JV – This SPV is executing EPC of one project inKarnataka.

SPML –OM METALS JV – This JV has bagged project for development of smartinfrastructure in Vikram Udyogpuri at Ujjain.

Subsidiaries/Associates of Om Metals Real Estates Private Limited (Wholly ownedsubsidiary of the Company):

OM METALS RATNAKAR PRIVATE LIMITED – This Company owing 9467 sq ft officespace in Prime and aesthetic NBCC plaza Delhi purchased in this 100% subsidiary to housethe entire corporate and business development affairs of the Group is fully functionaland contributing to expansion and diversification of the company in high potential areas.

OM METALS INFOTECH PRIVATE LIMITED – This Company has industrial land inJaipur and we are exploring/ expanding our work shop /fabrication facilities in a move tocapacity addition for our upcoming projects.

OM AUTOMOTORS PRIVATE LIMITED – This Company has acquired office space atJaipur. And the Jaipur related business activities are being handled from this office.

OM KOTHARI HOTELS PRIVATE LIMITED – During the last year the company purchaseda plot for construction of flats. The construction of this project "Om Eternity"is going on and some units has already been sold.

OM HYDROMECH PRIVATE LIMITED – 3000 sq. mt. land in NCR near Delhi-Faridabadborder has been bought from NKP Holding Private ltd. The land is used for setting up afactory for packaging product.

OM METALS DEVELOPRS PRIVATE LIMITED – OMDPL entered into a JV with MahindraLifespace for a residential project in Hyderabad. Mahindra owns 80% of the built-up arearights in the 10-acre premium residential project called 'Ashvita' and OMDPL holds therights to the remaining area. The 20% share of built-up area under OMIL is 80000 sqft andexpected realization is `4500/sq.ft.(0.36 Bn INR). The first two towers of the project arealmost at completion stage and sale of units are progressing very satisfactorily Theproject is catching good amount of attraction after rise of Telangana as a state and saleof units is very much satisfactory.

MAYURA CAPITAL ADVISORS PRIVATE LIMITED This Company has a propertyin Saket New Delhi

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:

http://www.ommetals.com/files/material-subsidiaries.pdf

CONSOLIDATED FINANCIAL STATEMENTS

In accordance with the Companies Act 2013 ("the Act") and AccountingStandard (AS) - 21 on Consolidated Financial Statements read with AS - 23 on Accountingfor Investments in Associates and AS - 27 on Financial Reporting of Interests in JointVentures the audited consolidated financial statement is provided in the Annual Report.

Companies which became / ceased to be Company's Subsidiaries Joint Ventures orAssociate Companies:

• Companies which have become subsidiaries during the financial year 2015-16 :Pondicherry Port Limited and Odisha Marine Services Private Limited Odisha Marine isexploring business in oil n gas sector.

• Companies which has ceased to be a joint venture or associate during thefinancial year 2015-16 : NIL

MATERIAL CHANGES AND COMMITMENTS

The EPC contract of construction of residential project at jaipur is slow down sinceMay 2016 due to dispute between project owner and JDA resulting in slow progress ofconstruction and turnover.

Shri Ram Kumar Gupta has been appointed as the Non Executive Independent Director ofthe Company by the Board of Directors subject to the approval of members w.e.f. 10 June2016.

Shri Chandra Prakash Kothari the Chairman of the Company and Shri Dharam PrakashKothari the managing Director of the Company has resigned from the directorship of theCompany w.e.f. 30 July 2016.

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.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to Section 134(5) of the Companies Act 2013 the Board of Directors of theCompany confirms that-

(a) In he 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 director 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 2015-16.

CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE OUTGO

The particulars relating to conservation of energy technology absorption foreignexchange earnings and outgo as required to be disclosed under the Act are provided in AnnexureI to this Report.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

The constitution of Board of Directors and KMP of the Company during the year 2015-16is as under:

S. No. Name Designation Date of change in designation Date of original appointment Date and Mode of Cessation
1. Shri Chandra Prakash Kothari Chairman 22/08/2014 1/10/1994
2. Shri Dharam Prakash Kothari Managing Director 22/08/2014 1/10/1994
3. Shri Sunil Kothari Joint Managing Director 28/03/2015 22/08/2014
4. Shri Vikas Kothari Director & President 28/03/2015 28/03/2015
5. Smt. Ranjana Jain Independent Director 28/03/2015 28/03/2015
6. Shri P. C. Jain Independent Director 30/09/2014 15/07/2001
7. Shri Sukmal Jain Independent Director 30/09/2014 30/05/2013 Resigned on 11/03/2016
8. Shri Devinder Gulati Independent Director 30/09/2014 09/07/2013 Resigned on 05/01/2016
9. Shri Gopi Raman Sharma Independent Director 11/03/2016 11/03/2016
9. Shri Sunil Kumar Jain Chief Financial Officer 28/03/2015 01/04/2009
10 Smt. Reena Jain Company Secretary 03/03/2008

Mr. Vikas Kothari who retires by rotation at ensuing Annual General Meeting and beingeligible has offered himself for re-appointment.

INDEPENDENT DIRECTORS AND DECLARATION

Mr. Sukmal Jain and Mr. Devinder Gulati had resigned from the directorship of theCompany and Mr. Gopi Raman Sharma has been appointed as the Independent Directors of theCompany as per Section 149(10) of the Companies Act 2013 in the Board Meeting on11/03/2016 for a term of Five years subject to confirmation in General Meeting.

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

BOARD EVALUATION

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 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 non-independent 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.

The Policy of the familiarisation programmes of Independent Directors are put up on thewebsite of the Company at the link:http://www.ommetals.com/files/familiarization-programme.pdf

NOMINATION AND REMUNERATION COMMITTEE:

As per the section 178(1) of the Companies Act 2013 the Company's Nomination andRemuneration

Committee comprises of three Non-executive Directors as under:

Name of the Director Position held in the Committee Category of the Director
Mr. Gopi Raman Sharma Chairman Non Executive Independent Director
Mr. P.C. Jain Member Non Executive Independent Director
Mr. Ranjana Jain Member Non Executive Independent Director

Terms of Reference:

a) To formulate a criteria for determining qualifications positive attributes andindependence of a Director.

b) Formulate criteria for evaluation of Independent Directors Board and Committees.

c) Identify persons who are qualified to become Directors and who may be appointed inSenior Management in accordance with the criteria laid down in this policy.

d) To carry out evaluation of every Director's performance.

e) To recommend to the Board the appointment and removal of Directors and SeniorManagement.

f) To recommend to the Board policy relating to remuneration for Directors KeyManagerial Personnel and Senior Management.

g) Ensure that level and composition of remuneration is reasonable and sufficientrelationship of remuneration to performance is clear and meets appropriate performancebenchmarks.

h) To devise a policy on Board diversity.

i) To carry out any other function as is mandated by the Board from time to time and /or enforced by any statutory notification amendment or modification as may beapplicable.

j) To perform such other functions as may be necessary or appropriate for theperformance of its duties.

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 2013adopted by board is appended as Annexure IV to the Directors' Report.

The Remuneration to Executive Directors and KMP are in affirmation of the Nominationand Remuneration Policy.

AUDIT COMMITTEE:

According to Section 177 of the Companies Act 2013 the Audit Committee is comprised ofthe following directors:

Name of the Director Position held in the Committee Category of the Director
Mr. Gopi Raman Sharma Chairman Non Executive Independent Director
Mr. Chandra Prakash Kothari Member Executive Director
Mr. P. C. Jain Member Non Executive Independent Director

AUDITORS

At the Annual General Meeting held on September 30 2014 M/s M.C. Bhandari & Co.Chartered Accountants were appointed as Statutory Auditors bearing ICAI Registration No.303002E to hold the office till the conclusion of the Annual General Meeting to be heldin the year 2017. In terms of the first proviso to the Section 139 of the Companies Act2013 the appointment of the auditors shall be placed for ratification at ensuing AnnualGeneral Meeting.

AUDITORS' REPORT

The Auditors' Report to the members on the Accounts of the Company for the financialyear ended March 31 2016 does not contain any qualification reservations or adverseremarks. The Notes to the Accounts referred to in the Auditors Report are self explanatoryand therefore do not call for any further explanation.

SECRETARIAL AUDITOR

M/s JAKS and Associates Company Secretaries were appointed to conduct the SecretarialAudit of the Company for the Financial Year 2015-16 as required under the Companies Act2013 and rules made thereunder. The report does not contain any qualificationreservations or adverse remarks. The Secretarial Audit report for FY 2015-16 forms part ofthe Annual Report as Annexure V to the Directors' Report.

COST AUDITOR

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 2017.

The due date for filing the Cost Audit Report of the Company is within 180 days fromthe end of the accounting year.

A proposal for ratification of remuneration of the Cost Auditor for financial year2016-17 is placed before the shareholders

VIGIL MECHANISM

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:

http://www.ommetals.com/files/vigil-mechnasim.pdf

RISK MANAGEMENT

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- Technology risk Competition risk Financialrisk Cost risk Legal risk Economic Environment and Market risk Political EnvironmentRisk Inflation and Cost Structure Technology Obsolescence Project ExecutionContractual Compliance Operational efficiency hurdles in Optimum use of resources HumanResource management environment management etc. The Board is also periodically informedof the business risks and the actions taken to manage them. The Company has formulated apolicy 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 assess 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.

LOANS GUARANTEES AND INVESTMENTS

The Company being engaged in the business of providing infrastructural facilities hencein terms of Section 186 (11)(a) the provisions of Section 186 except sub-section (1)regarding loans made guarantees given or securities provided are not applicable to theCompany.

The particulars of Loans & guarantees given investments made and securitiesprovided have been disclosed inthe financial statements.

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 theBoard of Directors & Shareholders was obtained wherever required. Further all thenecessary details of transaction entered with the related parties are attached herewith inForm No. AOC-2 for your kind perusal and information. (Annexure VII)

The Policy on materiality of related party transactions and dealing with related partytransactions as approved by the Board may be accessed on the Company's website at thelink: http://www.ommetals.com/files/related-party-transcation.pdf

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:

http://www.ommetals.com/files/corporate-social-responsibility.pdf

The Composition of the Corporate Social Responsibility Committee are given below:

Name of Director Status
Mr. Gopi Raman Sharma Chairman
Mr. C.P. Kothari Member
Mr. Sunil Kothari Member
Mrs. Ranjana Jain Member

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)

PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES

The information required under Section 197 of the Act read with rule 5(1) of theCompanies

(Appointment and Remuneration of managerial Personnel) Rules 2014 are given below:

A. Remuneration paid to Managing and Whole Time Directors

Directors of the Company Remuneration in F.Y. 2015-16(Rs. In Lacs) Remuneration in F.Y. 2014 -15 (Rs. In Lacs) % increase /decrease in remuneration Ratio to Median remuneration
Mr C.P. Kothari 96.69 82.80 +16.78 47.39
Mr. D.P. Kothari 87.01 72.80 +19.52 42.65
Mr. Sunil Kothari 84.00 84.00*
Mr. Vikas Kothari 30.00 30.00 * 0 14.70

*Based on Annualized Salary.

B. Remuneration paid to KMPs

KMPs of the Company Remuneration in FY 2015-16 Remuneration in FY 2014-15 % increase/decrease in remuneration Ratio to Median remuneration
(Rs. In Lacs) (Rs. In Lacs)
Mr. Sunil Kumar Jain 11.44 6.00 90.67 5.6
Mrs. Reena Jain 3.45 3.45 0 1.69

C) There was increase of 7% in Median Remuneration of employees in financial year2015-16 as compared to financial year 2014-15.

D) Number of permanent employees on the rolls of Company was 203 employees as on31.03.2016.

E) Explanation on the relationship between average increase in remuneration andcompany performance

The average increase in remuneration was 10%. The Profit after Tax for the year 2015-16increased by 7.20%.The average increase in remuneration per employee is in line withnormal pay revisions and variable component forming integral part of remuneration which islinked to individual performance apart from Company's performance.

The total Turnover of the Company declined during the financial year 2015-16 ascompared to financial year 2014-15 by 14.86% and the net profit increased by 7.20%. Thedecline in Turnover is due to the reason that new projects of the company were at theinitial stage and will generate the turnover in coming years.

F) The increase in total remuneration of managing directors and whole-time directorsand KMPs was 12.02% over the previous financial year.

G) The total revenue decline by 17.14% but the increase in remuneration is in line withthe market trends.

H) Comparison of each remuneration of the key managerial personnel against theperformance of the Company:

Mr. C.P. Kothari Chairman Mr. D.P. Kothari Managing Director Mr. Sunil Kothari Joint Managing Director Mr. Vikas Kothari Director & President Mr. S.K. Jain Chief Financial Officer Mrs. Reena Jain Company Secretary
Remuneration in FY 16 (in Lakhs) 96.69 87.01 84.00 30.00 11.44 3.45
Revenue (in Lakhs) 18905.10
Remuneration as % of Revenue 0.51 0.46 0.44 0.16 0.06 0.02
Probit before Tax (PBT) (in Lakhs) 3904.57
Remuneration (as % of PBT) 2.48 2.23 2.15 0.77 0.29 0.09

I) Variations in the market capitalization of the Company price earnings ratio at theclosing date of the current financial year and previous financial year

Particulars March 31 2016 March 31 2015 % Change
Market Capitalisation (in Lakhs) 40399.44 37221.42 +8.54
Price Earning Ratio 12.99 12.80 +1.48

Note: Closing share price of Ordinary Shares at BSE Ltd. has been used for the abovetable.

J) The closing share price of the Company at BSE and NSE on 31st March 2016 being Rs.41.95/- and Rs.42.70/- respectively per equity share of face value of Re. 1/- each hasdecreased since the last offer for sale made in the year 1995 (Offer Price was Rs. 50/-per equity share of face value of Rs. 10/- each )

K) Average Salary increase of non-managerial employees was 10% and that of managerialemployees 10.42% in financial year 2015-16. The average % increase in remuneration is inline with normal pay revision.

L) No Director received any variable component of remuneration in the financial year2015-16.

M) None of the employees who are not directors but receive remuneration in excess ofthe highest paid director during the year

N) Remuneration paid during the year ended 31st March 2016 is as per the RemunerationPolicy of the Company.

In terms of the provisions of Section 197(12) of the Act read with Rules 5(2) and 5(3)of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 thereis no employee who is drawing remuneration in excess of the limits set out in the saidrules.

Details of Top Ten Employees

The details of the top ten employees (excluding Directors & KMP) are as under:

S.No. EMPLOYEE NAME DESIGNATION DOJ REMUNERATION RECEIVED 2016 (PER MONTH) NATURE OF EMPLOMENT (whether contractual or otherwise) qualification & experience Age of Employee The last employment held by the employee before joining the company WHETHER SUCH EMPLOYEE IS RELATIVE OF ANY DIRECTOR
1 K.L.JAIN MANAGER 01.08.1982 50481 Permanent M.Com 35 Years 53 OM Metals NO
2 R.C.DHADICH SALES TAX 01.02.1992 50744 Permanent M.Com 31 Years 55 OM Metals NO
3 Ankur Bhardwaj Sr. Manager HR 02.03.2016 53000 Permanent MBA 10 Years 30 Sanmarg Projects Pvt. Ltd. NO
4 Mr.S.N.Mondal Project Manager 12.10.2007 53000 Consultant B.Sc Mechnical 31 Years 66 Bridge & Roof Company Ltd. NO
5 Sanjay Kumar Dutta Manager (QC) 14.05.2015 58733 Permanent PGD-PTCT (CIPET)B.Sc 16 Years 41 Lunar Mech Technology Pvt. Ltd. NO
6 Pawan Kumar Singh Production Manager 05.11.2015 60000 Permanent Diploma in Mechanicals 17 Years 43 Prima Coporation Ltd. NO
7 Vineet Bhatia GM Design 24.01.2016 98200 Permanent BE Mechnical 19 Years 45 Energy Infratec Ltd. NO
8 Mahendra Pratap Singh Manager 08.01.2016 100000 Permanent HSC DEE 35 Years 57 Uniflex Cable Ltd. NO
9 Mr M Raghubabu GM 07.09.2011 110000 Consultant Diploma in Mechnical 42 Years 63 Sree Padhe Yellampally NO
10 Sudhir Kumar Jain PM 15.02.2016 115000 Permanent B.Tech Civil 28 Years 48 Gannon Drunkey Company Ltd. NO

PERSONNEL

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 Yearended 31 March 2016 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 thecomplaints received regarding sexual harassment. All employees (permanent contractualtemporary trainees) are covered under this policy. No Complaint has been received duringthe year ended 31 March 2016 in this regard.

LISTING

The Equity Shares of the Company continue to remain listed with the National StockExchange (NSE) and Bombay Stock Exchange (BSE). The listing fees of the exchanges for thefinancial year 2016-17 have been paid.

CREDIT RATING

CARE has assigned ratings symbol of 'A minus' & PR1 to company and company hasaccepted it.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

In terms of provisions of Regulation 34 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.

INTERNAL CONTROL SYSTEMS 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.

CORPORATE GOVERNANCE

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. A separate section on Corporate Governance along withcertificate from the Auditors confirming compliance forms part of the Annual Report.

Details of litigations pending or significant or material orders which were passed bythe Regulators or Courts or Tribunals is provided under Independent Auditor's Report

DEPOSITS

The company has not accepted any Fixed Deposits and as such no amount of principle orinterest was outstanding as on the Balance Sheet date.

ACKNOWLEDGEMENTS

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
Sunil Kothari Vikas Kothari
(Mg. Director) (Director & President)
DIN: 00220940 DIN: 00223868
Date: 12 August 2016
Place: Delhi

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