Your Directors have pleasure in presenting 41st Annual Report and audited accounts of the Company for the year ended 31st March, 2013.
RESULTS OF OPERATION
(Rs. In Lacs)
Year Ended March 31,
|Operating Profit (EBITDA)||7076.35||6461.92|
|Profit before Tax||4342.10||2873.22|
|Provision for Taxes||1138.29||470.86|
|Profit after Tax||3203.81||2402.35|
|Add: Profit brought forward from previous year||15451.77||13281.34|
|Profit available for appropriation||18655.57||15683.69|
|Retained Profit carried forward to the next year||18461.45||15451.77|
The strength of your Company lies in identification, execution and successful implementation of the projects in the infrastructure space. To strengthen the long-term projects and ensuring sustainable growth in assets and revenue, it is important for your Company to evaluate various opportunities in the different business verticals in which your Company operates. Your Company currently has several projects under implementation and continues to explore newer opportunities, both domestic and international. Your Board of Directors considers this to be in strategic interest of the Company and believe that this will greatly enhance the long-term shareholders value.
At present your Company operates in three business sectors- Heavy Engineering cum construction, Real Estate and Infrastructure Projects.
The Company has reported a Profit Before Tax (PBT) of Rs. 4342 lacs, as against Rs. 2873 lacs in the previous year.
The Turnover of this division this year is Rs. 353. 75 crore and profit is Rs 29. 07 crore against Turnover of Rs 183. 65 crore & profit is Rs 18. 03 in the last year. The Engineering Division focuses on turnkey engineering procurement and construction contracts for Hydro mechanical equipment for Hydro Power and Irrigation projects. The Company post qualification in civil work for dam will qualify for complete EPC for dam except EM package and shall address a larger share of hydro power project. This is a feat for diversifying in the civil construction space and the Company will not have to take recourse to civil companies for meeting PQ norms for bidding in civil space. The Company is now all geared up to encash the burgeoning opportunities in executing complete EPC contract in the space of H M components and civil structure as well for Hydro projects of 38000 MW power generation planned in next 10 years by GOI. The projects in Hydro power space involve multifarious activities viz. civil construction, electromechanical component and Hydro mechanical equipments, the company also doing EPC for road project and this will further increase the addressing area in infra space.
REAL ESTATE, HOTELS AND MULTIPLEX
The Turnover of this division this year is Rs. 33. 79 crore and profit is Rs 6 crore against Turnover of Rs 8. 66 crore & profit is Rs 2. 13 crore in the last year.
The turnover from hotel Om Tower in Jaipur and Multiplex in Kota remained at same levels. With the revival in economical growth -revenue is expected to increase buoyed by increasing domestic and international tourism ahead.
Though in real estate front we have not seen any major revenue generation but we launched another residential project Om Urban Heights" the response of which is very motivating.
The company has started construction on premium and prestigious land in Jaipur for developing state of the art high end residential apartments. Top notch agencies have been hired in every field for timely completion of project.
In Mumbai bandra project-Post CRZ and MOEF clearance - other statutory clearance and extensions from SRA and other different agencies are on fast track and we have successfully constructed the temporary transit camps for shifting slum dwellers and this will pave the way to begin construction activities of rehab apartments and commercially roll out sellable apartments in Bandra Reclamation- A project initiated by MHADA.
Going ahead, the Company aims to further enhance its skiil-sets, core strengths, capacity enhancement, Build a fleet of construction equipments to effectively and efficiently tackle even bigger and more complex projects in this niche space, within and outside India.
The Company is all geared up to encash the burgeoning opportunities in the Hydro Mechnical segment and utilise the PQ earned from Kalisindh project in Civil space by providing turnkey solution in civil as well as Hydro mechanical space to minimum 38, 000 MW additional Hydel power generation planned in next 10 years by GOI.
The consortium formed between the company and SPML Infra remained LI and has been awarded a LOI for development of 70 MW lignite based thermal project in Rajasthan.
The lease income from Inox is continuing in Multiplex & hotel in jaipur is doing satisfactory business and we are confidante of surge in tourism industry.
OTHER REAL ESTATE PROJECTS IN DIFFERENT SPVS ARE DISCUSSED IN SUBSIDARY SECTION.
The proceeds from the allotment of 2, 00, 00, 000 shares at Rs. 60/share to QIBs (Qualified Institutional Buyers) was partly utilized in capacity expansion in Engineering division and real estate developments. The partial proceeds have been invested in Subsidiary company and liquid funds and we are awaiting potential overseas/domestic Business acquisition opportunity to utilize the available credit limits.
Out strong cash flows enable us to manage financial and business risks.
During the year under review, your directors had declared and paid interim dividend of Rs. 0. 10 per share in March, 2013. The Directors recommend it to treat as final dividend.
The dividend pay out for the year under review is in accordance with the Company`s policy of consistent dividend pay out keeping in view the Company`s need for capital, its growth plans and the intent to finance such plans through internal accruals to the maximum.
TRANSFER TO RESERVES
The Board of Directors proposes to transfer Rs 8219619 to General Reserve in accordance with the Companies (Transfer of Profit to Reserves) Rules, 1975.
OM Metals Consortium Pvt Ltd. - This 100% subsidiary Company is developing a high end residential project on a very prime parcel of 19000 sq mt land at Statue circle Jaipur. It has hired your company as EPC Contractor for structure building under architectural leadership of Studio 18, a renowned architecture firm of USA. the construction is in progress and scheduled for completion with in 36 month. The company has sub contracted the entire structural work to shapoorji Palonji
OM Metals Real Estate Pvt. Ltd. _This 100% subsidiary is holding stakes in different SPVs for different projects in Hyderabad, Faridabad, Jaipur. The development of all these projects are in some stages of clearances.
Om Metals Ratnakar Pvt Ltd. - a step subsidiary 9467 sq ft office space in Prime and aesthetic NBCC plaza, Delhi purchased in this 100% subsidiary to house the entire corporate and business development affairs of the Group, is fully functional and contributing to expansion and diversification of the company in high potential areas.
Om Hydromech Pvt. Ltd. a step subsidiary - A long pending legal matter for land with uncleared title in Bhilai which was purchased from Bank of baroda has been over and we have received back the consideration amount with interest.
Om Automotors Private Limited: a step subsidiary- This company has acquired office space at Jaipur. Om Kothari Hotels Private Limited: a step subsidiary -During the year the company purchased a plot for construction of flats. The approval of map is pending with UIT, Kota.
Om Metals Developer Pvt Ltd. - Post development agreement with Mahindra life space for residential housing project at Hyderabad on 25: 75 basis-the developer has launched the project under the Project name "Ashvita. We have revised the development agreement on area share on some advance consideration for 5% space rights to Mahindra life space and now existing sharing ratio is 20: 80.
OM Shivay Real Estate Pvt. Ltd. With the completion of the flyover at Badarpur near Faridabad, the traffic congestion has gone down considerably. And it has also eased the accessibility to the plot nearby. Minor litigation on the verge of the final hearing in local court.
NKP holding (P) Ltd. _3000 sq. Mt land in NCR near Delhi-faridabad boarder is in possession with the company where we hold 50% ownership through OREPL. The land is suitable for corporate park and is adjacent to the land owned by our associate Om Shivay Real estate (P) Ltd.
Om Sansation Properties (P) Ltd. _This company owns agricultural land in andra Pradesh and our ownership in this company is 25%.
Sanmati Buildcon (P) Ltd. _33 acre appx land is owned by this company in sohna dist gurgaon (Haryana) and we own 33. 33% in this company.
OM Metals Consortium-_This prestigious partnership firm for development of SRA project in Bandra Reclamation facing Bandra-Worli sea Link has completed the construction of the temporary transit camp. We are in negotiations with local reputed developers for Joint development of the project.
Pondicherry Port Ltd. An SPV earmarked for the development of sea port in Pudducherry. All the statutory approvals when in place shall enable the company start the project.
Sanmati Infradevcloper Pvt Ltd. - This SPV wherein we own 25% stake along with other stake holders Subhash Projects (25%) and Urban Infrastructure Trustees Ltd (UITL) (50%) is a holding company of Pondicherry SEZ Co. l.. td( PSEZCL). PSEZCL owns a multi product SEZ in Pudduchery where 840 acre land has been acquired and balance 26 acre is pending. We are awaiting formal notification from Ministry of Commerce..
Bhilwara Jaipur Toll Road Pvt Ltd. _The construction of the 212 km road project in Jaipur-Bhilwara Stretch is in very advance stage of progress and the completion is expected by the end of October 2013. We are initiating for time extension from PWD Rajasthan on some non fulfillment of grounds by PWD. Grant for Viability Gap funding is in process and we have avail part of it by June 2013. Om metals is doing the entire EPC for this road project.
OM Metals-SPML Infraprojects Pvt Ltd. A 457 cr Kalisindh Dam project in a SPV created with SPML infra on 50: 50 is running in full swing and Om Metals has been executing EPC contract for major work. The time extension for this project has been awarded by the project authority.
CONSOLIDATED FINANCIAL STATEMENTS
As required under Clause 49 of the listing agreement with stock Exchanges, the consolidated financial statements of the Company are attached with the Annual Accounts of the Company.
As per Section 212 of the Companies Act, 1956, we are required to attach the Directors` report, Balance Sheet, and Profit and Loss account of our subsidiaries. The Ministry of Corporate Affairs, Government of India vide its circular no. 2/2011 dated February 8, 2011 has provided an exemption to companies from complying with Section 212, provided such companies publish the audited consolidated financial statements in the Annual Report. Accordingly, the Annual Report 2012-13 does not contain the financial statements of our subsidiaries. The audited annual accounts and related information of our subsidiaries, where applicable, will be made available upon request. These documents will also be available for inspection during business hours at our registered office in Jaipur, India.
The investment in significant associates like Om Metals Consortium, Om Metals Consortium (P) Ltd., Om Ray JV, OM1L-JSC JV, Pondicherry Port Ltd., Sanmati Infradeveloper Pvt. Ltd., Bhilwara Jaipur Toll Road (P) Ltd., Om Metals SPML Infraprojects (P) Ltd. have been treated as per AS 27/23 and accordingly have been consolidated in financial statements in compliance with AS.
The consolidated financial statement of the Company pursuant to AS 23 and AS 27 have been prepared and attached.
In accordance with the provisions of sections 255 and 256 of the Companies Act, 1956 and the Articles 61 of the Articles of Association of the Company Shri Prakash Chand Jain retires by rotation at the ensuing AGM of the Company and being eligible offer themselves for re-appointment.
Shri Chandra Prakash Kothari was appointed as Managing director of the Company for a period of 5 years. The Board considered that it would be in the interest of the Company to reappoint Shri Chandra Prakash Kothari as Managing Director for next five year w. e. f. 1. 09. 2013
Shri Dharam Prakash Kothari, executive director of the Company has a vast experience in production field as well as in general management and business development. He was appointed as whole time director of the Company for a period of 5 years.
The Board considered that it would be in the interest of the Company to reappoint Shri Dharam Prakash Kothari as Whole-time Director for next five year w. e. f. 16. 09. 2013
During the year, Shri Kamal Kumar Chandwar, non executive independent director resigned from the Company for personal reasons w. e. f. 12th January, 2013. He was also member of Audit Committee, Shareholder Grievances Committee and Executive committee.
During the year Shri Trilok Chand Kothari, non executive chairman of the board has passed away on 27th February, 2013. Late Shri Trilok Chand Kothari was founder of the Company. He did invaluable contributions towards progress of the Company. Late Shri Trilok Chand Kothari was also member of Audit committee, Shareholder Grievances Committee, share transfer committee and Executive committee.
Shri Sukmal Jain has been appointed as non executive independent director w. e. f 30th May, 2013.
Shri Sukmal Jain has been appointed as member of the Audit, Shareholder grievance, share transfer and Executive committee.
M/s. M. C. Bhandari & Co., Chartered Accountants, Statutory auditor M/s. B. Khosla & Co. Chartered Accountants Branch Auditor of hotel division and M/s Milind Vijiyvargiya & Associates Chartered Accountants Branch Auditor of engg. & Real estate division will retire at the conclusion of the Annual General Meeting and being eligible offer themselves for reappointment, if may be in accordance with Section 224(1B) of the Companies Act, 1956. The board recommends their re-appointment.
The Notes to the Accounts referred to in the Auditors Report are self explanatory and therefore do not call for any further explanation.
PARTICULARS OF TECHNOLOGY ABSORPTION, CONSERVATION OF ENERGY AND FOREIGN EXCHANGE EARNING AND OUTGO.
As required under section 217 (1) (e) of the Companies Act, 1956 read with the Companies (Disclosure of particulars in the Report of Board of Directors) absorption, conservation of energy and foreign exchange earnings and outgo are set out in Annexure A to the Directors Report.
PARTICULARS OF EMPLOYEES
There is no employee in respect of whom information u/s 217(2A) of the Companies Act, 1956 is required to be given.
The Labour Management relation has been cordial during the year under review.
The Equity Shares of the Company continue to remain listed with the National Stock Exchange, Bombay Stock Exchange (BSE) and Delhi Stock Exchange. The listing fees payable to the exchanges for the financial year 2012-13 have been paid.
The Company has voluntary delisted the equity shares of the Company from Jaipur Stock Exchange of India. The Governing Board of Jaipur Stock Exchange in its meeting held on 1st November, 2012 has approved the delisting application of the Company. The delisting procedure from Ahemdabad Stock Exchange is in process.
The reasons that have prompted the Board for delisting of shares are:
1 To cut down and reduce all possible expenses which are disproportionate to the benefits accruing to the Company and its shareholders.
2 There has been no trading for long periods in Jaipur Stock Exchange and Ahmadabad Stock Exchange
Company`s shares will continue to be listed on Bombay Stock Exchange, National Stock Exchange of India and Delhi Stock Exchange. Both Bombay Stock Exchange and National Stock Exchange of India have nation wide terminals and with the extension of these terminals in all the cities, investors have access to online dealings in the Company`s securities from all over the country. Therefore, delisting of equity shares from the Jaipur Stock Exchange and Ahmadabad Stock Exchange will not in any way adversely affect the investors
CARE has assigned ratings symbol of A & PR1 to company and company has accepted it.
DIRECTORS RESPONSIBILITY STATEMENT
As required under section 217(2AA) of the Companies Act, 1956, your directors confirm that:
(i) In the preparation of account for the period ended March 31, 2013 the applicable Accounting Standards had been followed and that there are no material departures;
(ii) The directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the year end of the financial year and of the profit of the Company for that period,
(iii) The directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provision of the Companies Act 1956 for safe guarding the assets of the Company and for preventing and detecting fraud and other irregularities.
(iv) The accounts for the period ended March 31, 2013 are on a going concern basis.
The Managing Director and Chief Financial Officer of the Company have submitted certificate to the Board as required under Clause 49 of the Listing agreement for the year ended 31st March, 2013.
Section 205 of the Companies Act, 1956, mandates that companies transfer dividend that has been unclaimed for a period of seven years from the unpaid dividend account to the Investor Education and Protection Fund (IEPF). In accordance with the following schedule, the dividend for the years mentioned as follows, if unclaimed within a period of seven years, will be transferred to IEPF.
% Of Dividend Declared
|Date of Declaration||Due date of Transfer||Amount(Rs)|
The Company is sending periodic communication to the concerned shareholders, advising them to lodge their claims with respect to unclaimed dividend. Shareholders are cautioned that once unclaimed dividend is transferred to IEPF, no claim shall lie in respect thereof with the Company.
Transfer to Investor protection fund account
The Company has transferred unclaimed dividend, which was declared on 30/09/2005 to Investor Protection Fund A/c amounting to Rs. 105294/-
The Company has transferred unclaimed dividend to Investor Protection Fund A/c which was declared on 14/02/2006 amounting to Rs. 109308/-
The website of the Company, WWW. OMMETALS. COM carries a comprehensive database of information of interest to the stakeholders including the corporate profile, information with regard projects, financial performance of your Company and others.
MANAGEMENT INFORMATION AND DISCUSSION REPORT
Management Analysis and Discussion Report for the year under review, as stipulated under clause 49 of the Listing Agreement with the Stock Exchanges in India, is presented in a separate section forming part of the annexure B to the Directors Report.
INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
The Company has a well-defined Internal Control system that is adequate and commensurate with the size and nature of business. Clear roles, responsibilities and authorities, coupled with internal information systems, ensure appropriate information flow to facilitate effective monitoring. Adequate controls are established to achieve efficiency in operations, optimum utilization of resources and effective monitoring thereof and compliance with applicable laws. An exhaustive programme of internal audits, including all Branches of the Company all over India, review by management, and documented policies, guidelines and procedures, supplement the internal control system.
The Audit Committee regularly reviews the adequacy and effectiveness of the internal controls and internal audit function.
Your Company has been practicing principles of good corporate governance practices over the years. Your Company has complied with the Corporate Governance Code as stipulated under the Listing Agreement with the Stock Exchanges. A separate section on Corporate Governance along with certificate from the Auditors confirming compliance is annexed and forms part of the annexure C to the Directors` Report.
JOINT VENTURES & FOREIGN COLLABORATIONS
ATB Riva Calzoni SpA, Italy
JSC Ukr Hydro Mech, Ukraine
OMIL JSC JV This JV is executing project for NEEPCO in Kameng HE Project.
Om Ray JV This JV is executing project in Karnataka.
OM METALS SEW JV: This JV created for project in Sripad Sagar (AP) has been executing project in full swing.
During the year under review, your Company has not accepted any deposits from Public under Section 58A of Companies Act, 1956.
Your Directors deeply appreciate the valuable co-operation and continued support extended by the Company`s Bankers, Financial Institutions, Government agencies, Collaborators, Stockists, Dealers, Business Associates, and also the contribution of all employees to the Company.
|Regd. Office:||On behalf of the Board of Directors,|
|Om Towers, Church Road||Sd/-|
|M I Road, Jaipur||(Shri C. P. Kothari)|
|Date: 30th MAY, 2013||Managing Director|
Annexure to Directors Report
Information under Section 217(l)(e) of the Companies Act, 1956 read with Companies (Disclosure of particulars in the report of board of Directors) Rules, 1988 and forming part of the Directors Report for the year ending 31st March, 2012. `
1 Conservation of energy:
(a) Energy conservation measures taken:
Greater emphasis has been laid on creating awareness amongst all employees for the optimal utilization of power and prevent misuse of energy at all levels.
(b) Additional investments proposals, if any being implemented for reduction of consumption of energy, Efforts are being made in the direction of reducing energy consumption.
(c) Impact of the measure at (a) and (b) above for reduction of energy consumption and consequent impact on the cost production of goods.
Impact has not been measured.
(d) Total energy consumption and energy consumption per unit of production in respect of industries specified in the Schedule thereto.
It is not feasible to maintain product category wise energy consumption data since there are a large variety of products with different energy intensities.
II Technology Absorption:
(a) Research & Development:
(i) Specific areas in which R & D was carried out by the company.
Cutting & Welding which is required on fabrication of Gates, Hoist etc.
Replacement of electric hoists to hydraulic hoists.
Improvement in product quality.
Better utilization of Scrap.
(ii) Benefits derived:
Production improved gradually.
(b) Future Plan of Action:
The company is having on going process to reduce the weight of gates, to suit to incoming private power projects.
(c) Expenditure on R&D
No expenditure was made on R & D because owned staff is working on R & D and their salaries & wages included in respective head of expenditure.
III Technology Absorption, Adoption and Innovation:
(a) Efforts in brief, made towards technology absorption and innovation. Progress was made in the up gradation of technology and innovation in the following areas:
Replacement of electric hoist to hydraulic hoist.
Cutting and welding for gate and hoist fabrication.
Efforts for technology development and innovation are going on.
(b) Benefits derived as a result of the effort product improvement.
Product development & Import substitution etc.
(c) Technology imported during the last 5 year.
IV Foreign Exchange Earning and Outgo:
(a) Activities relating to exports, initiatives taken to increase exports, development of new export, development of new export markets for products and service and export plans.
(b) Total foreign exchange used and earned.
(Rs. in Lacs)
|i. Earning by ways of:|
|ii. Outgo by way of|
|(a) CIF value of imports||1343.94||703.54|
|(b) Travelling & Others||163.7||117.77|
|(c) Capital Goods||0||316.10|