To the Members,
The Board of Directors is pleased to present the 52nd Annual
Report of the Company along with the Audited Financial Statements (Standalone and
Consolidated) for the financial year ended 31st March, 2024 ("FY
23-24") and the report of the Auditors thereon.
1. FINANCIAL HIGHLIGHTS:
The financial performance of the Company for the year ended 31st
March, 2024 on a Standalone and Consolidated basis, is summarized below:
(' in Lakh)
Particulars |
Standalone |
Consolidated |
|
2023-2024 |
2022-2023 |
2023-2024 |
2022-2023 |
Revenue from Operation |
83,640.47 |
84,90726 |
83,640.47 |
84,90726 |
Other Income |
732.56 |
576.88 |
728.05 |
572.81 |
Profit before exceptional
items, depreciation and finance costs |
5,466.40 |
6,091.35 |
5,421.72 |
5,994.15 |
Less : Depreciation and
amortization expense |
1,96748 |
1,932.81 |
1,979.44 |
1,942.80 |
Profit before finance costs |
3,498.92 |
4,158.54 |
3,442.28 |
4,051.35 |
Less: Finance costs |
2,048.59 |
1,313.10 |
2,036.81 |
1,303.10 |
Profit before exceptional
items and tax expenses |
1,450.33 |
2,845.44 |
1,405.47 |
2,748.25 |
Less: Exceptional Items |
- |
- |
- |
- |
Profit before tax |
1,450.33 |
2,845.44 |
1,405.47 |
2,748.25 |
Less: Tax expense |
502.15 |
782.97 |
495.05 |
773.96 |
Profit for the year |
948.18 |
2,062.47 |
910.42 |
1,974.29 |
Attributable to : |
|
|
|
|
Equity shareholders of the
Company |
948.18 |
2,062.47 |
910.42 |
1,974.29 |
Other comprehensive income
('OCI') Income/(Loss) |
(9.88) |
(6.11) |
(5.84) |
(6.11) |
Total comprehensive income |
938.30 |
2,056.36 |
904.58 |
1,968.18 |
Balance in retained earnings
at the beginning of the year |
56,680.44 |
54,61797 |
56,504.96 |
54,530.67 |
Add: Profit for the year
(attributable to equity shareholders of the Company) |
948.18 |
2,062.47 |
910.42 |
1,974.29 |
Less: Transfer to Items other
comprehensive income |
- |
- |
- |
- |
Less: Dividends including tax
on dividend |
168.27 |
- |
168.27 |
- |
Balance in retained earnings
at the end of the year |
57,460.35 |
56,680.44 |
57,247.11 |
56,504.96 |
2. OPERATIONAL PERFORMANCE/STATE OF COMPANY?S AFFAIRS:
a. Standalone Performance:
During the year under review, the revenue from operations of the
Company stood at '83,640 lakh as against ' 84,907 lakh for the previous year, showing a
decrease of 1.49 %.
The Company earned a Profit after tax of ' 948 lakh as against ' 2,062
lakh for the previous year, thereby registering a decline of 54.03%.
Due to decrease in the profit, the Earning per share (EPS) decreased
from ' 6.13 in the previous year to ' 2.82 in the year under review.
The net worth of the Company increased to ' 58,676 Lakh at the end of
the FY 2023-24 from ' 57,906 lakh at the end of FY 2022-23, thereby registering a growth
of 1.33 %.
b. Consolidated Performance:
The consolidated total sales of the Company for the FY 2023-24, stood
at ' 83,640 lakh as against ' 84,907 lakh for the previous year, showing a decrease of
1.49 %.
The Company earned a Consolidated Profit after tax of ' 910 lakh as
against ' 1,974 lakh for the previous year, thereby registering a decline of 53.90%.
As a result of decrease in the consolidated profit, the Earning per
share (EPS) also decreased from ' 5.87 in the previous year to ' 2.71 in the year under
review.
The Consolidated net worth of the Company increased to ' 58,470 lakh at
the end of the FY 2023-24 from ' 57,729 lakh at the end of FY 2022-23, thereby registering
a growth of 1.28%.
The operational performance for the FY 2023-24 stood as below:
The Company experienced a decline in consolidated turnover in FY
2023-24 primarily due to an unusual drop in raw material prices, especially within the
chemical sector, which led to a reduction in selling prices. Additionally the imbalance
between supply and demand exerted significant pressure on product pricing. The
consolidated Profit after Tax for the Company stood at ' 910 lakh, registering a decrease
of 53.90% from ' 1,974 lakh in the previous year This decline was caused due to increased
utility costs, higher utilization of working capital borrowing and an overall rise in
manufacturing and finance costs.
The industry has seen substantial changes in its competitive landscape,
with an influx of new players and expanded capacities leading to a softer demand
environment. This has exerted pressure on selling prices due to an oversupply of products
such as camphor, terpene chemicals, and specialty aroma ingredients. Looking ahead, it is
expected that demand will remain soft in the coming quarters until the industry reaches a
certain level of stabilization. Once this stability is achieved, the company plans to
leverage the improved conditions. Meanwhile, demand is gradually recovering, leading to
rising prices and ensuring the restoration of healthy profitability in specialty
chemicals.
Oriental Aromatics remains committed to its philosophy of pursuing
profitable growth. Our diversified and risk-mitigated range of products has enabled us to
maintain nearly identical annual sales compared to the previous year. The company is
dedicated to employing various strategies to achieve this goal, including efficient raw
material procurement, reducing conversion costs, and continuous process reengineering. By
continuously seeking opportunities for improvement and adaptation, we aim to sustain
profitability within the market's dynamics.
3. DIVIDEND:
The Board of Directors has recommended a final dividend of ' 0.50/- per
share (10%) of face value of ' 5/- each for FY 2023-24, for approval of the members at the
ensuing 52nd Annual General Meeting. The dividend payout is in accordance with
the Company's Dividend Distribution Policy. If approved, the dividend would be paid to the
members whose name appear in the Register of Members as on Tuesday 6th August, 2024. The
total cash outflow would be ' 168.27 Lakh.
I n terms of provisions of the Income Tax Act, 1961, dividends paid or
distributed by the Company shall be taxable in the hands of the shareholders. Accordingly,
the Company makes the payment of the proposed dividend after deduction of tax at source.
4. TRANSFER TO RESERVES:
The Company does not propose to transfer any amount (previous year NIL)
to the reserves from surplus. An amount of ' 57,460.35 lakh (previous year ' 56,680.44
lakh) is proposed to be held as Retained Earnings.
5. SHARE CAPITAL:
a. Authorized Capital
The authorized share capital of the Company as on 31st
March, 2024 stood at ' 35,00,00,000/- (Rupees Thirty-Five Crore only) comprising of
7,00,00,000 Equity shares of ' 5/- each.
b. Paid-Up Capital
The paid-up capital of the Company as on 31st March, 2024
stood at ' 16,82,67,880/- (Rupees Sixteen crore eighty-two lakh sixty-seven thousand eight
hundred and eighty only) comprising of 3,36,53,576 shares of ' 5/- each.
During the year under review, the Company has not issued any:
a) shares with differential rights
b) sweat equity shares.
6. DEPOSITS COVERED UNDER CHAPTER V OF THE COMPANIES ACT, 2013:
During the year under review the Company has not accepted any Deposits
within the meaning of Section 73 of the Companies Act, 2013 and the Companies (Acceptance
of Deposits) Rules, 2014.
7. FINANCIAL STATEMENT:
The audited standalone and consolidated financial statements for the
year ended on 31st March, 2024 have been prepared in accordance with the Indian Accounting
Standards (Ind AS) , provisions of the Companies Act, 2013 (hereinafter referred to as
"The Act") read with the Companies (Accounts) Rules, 2014 as amended from time
to time and Regulation 33 of the Securities Exchange Board of India (Listing Obligations
and Disclosure Requirements) Regulations, 2015 (hereinafter referred to as "SEBI
Listing Regulations"). The estimates and judgements relating to the Financial
Statements are made on a prudent basis, so as to reflect in a true and fair manner, the
form and substance of transactions and reasonably present the Company's state of affairs,
profits and cash flows for the year ended 31st March, 2024. The Notes to the
Financial Statements adequately cover the standalone and consolidated Audited Statements
and form an integral part of this Report. The Audited financial statements together with
Auditor's Report form part of the Annual Report.
8. PERFORMANCE HIGHLIGHTS OF SUBSIDIARIES:
a. PT Oriental Aromatics (Indonesia)
The Company has only one overseas subsidiary namely PT Oriental
Aromatics in Indonesia. Presently the Company is not doing any business. During the FY
2023-24, it recorded a total loss of ' 4.11 lakh due to administrative expenses. There are
no associate companies within the meaning of section 2(6) of the Act.
b. Oriental Aromatics & Sons Limited
Oriental Aromatics & Sons Limited was incorporated as wholly owned
subsidiary of Oriental Aromatics on 27th December, 2019 which is engaged in the
business of Specialty Aroma Chemicals, flavors and fragrances. During FY 2023-24, it
recorded a total loss of ' 33.66 lakh. In the month of March' 24, the Company started the
trial run production. The Company is expected to commence commercial production by H1 FY
2024-25
Pursuant to the provisions of Section 129 (3) of the Act, a statement
containing the salient features of financial statements of the Company's subsidiaries in
Form AOC-1 is attached as "Annexure A" to the Board's Report.
In accordance with Section 136 of the Companies Act, 2013, the audited
Financial Statements, including the Consolidated Financial Statement and audited accounts
of each of its subsidiaries, are available on the website of the Company at
https://www.orientalaromatics.com/subsidiaries.php.
9. SECRETARIAL STANDARDS:
The Company has adhered to the applicable provisions of the Secretarial
Standards - "SS-1" and "SS-2" relating to 'Meetings of the Board of
Directors' and 'General Meetings' respectively issued by the Institute of Company
Secretaries of India ("ICSI").
10. BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT:
Sustainability Reporting is an emerging discipline encompassing the
disclosure and communication of an entity's non-financial - environmental, social, and
governance (ESG) performance and its overall impact. Pursuant to Regulation 34(2)(f) of
SEBI Listing Regulations and SEBI Circulars dated May 05, 2021 and May 10, 2021, SEBI
mandated reporting of Business Responsibility and Sustainability Report (BRSR). The
disclosures as per BRSR relates to Company's performance against the nine principles of
the 'National Guidelines on Responsible Business Conduct' (NGBRCs).
The Business Responsibility and Sustainability Report / initiatives
taken from an Environmental, Social and Governance perspective in the prescribed format is
available as a separate section of this Report and a copy of which is available on the
available on the Company's website at https://www.orientalaromatics.com/BSSR.php.
11. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:
The Company has implemented internal control systems that are aligned
with the company's size, scale, and operational characteristics. The Company has
maintained a proper and adequate system of internal controls. Monitoring and assessment of
internal controls across various functions is performed through continuous evaluations to
ensure that the implemented internal control system is effective. To maintain its
objectivity and independence, the Internal Auditor reports to the Chairman of the Audit
Committee of the Board.
The Internal Auditor monitors and evaluates the efficacy and adequacy
of internal control system in the Company, its compliance with operating systems,
accounting procedures and policies at all locations of the Company. Based on the report of
internal auditor, corrective actions are undertaken in the respective areas and thereby
strengthening the controls. Significant audit observations and corrective actions thereon
are presented to the Audit Committee of the Board.
12. CREDIT RATING:
Based on a review of the developments, the Rating Committee of ICRA,
after due consideration has revised the long-term rating to [ICRA]A- (pronounced ICRA A
minus) from [ICRA]A (pronounced ICRA A) and has retained short-term rating at [ICRA]A2+
(pronounced ICRA A two plus). The Outlook on the long-term rating revised to Stable from
Negative. Therefore, the credit rating assigned stood as below:
Sr.
No. |
Instrument |
Rating
Agency |
Credit Ratings and Outlook |
Rating assigned on |
1 |
Long term fund-based — Term
loan |
ICRA |
[ICRA]A- (Stable); downgraded
from [ICRA]A (Negative);
Outlook revised to Stable from Negative |
6th June, 2023 |
2 |
Long term/Short term — Fund
based/Non fund based |
ICRA |
[ICRA]A-(Stable)/[ICRA]A2 +
;long-term rating downgraded from [ICRA]A (Negative); Outlook revised to Stable from
Negative; shortterm rating reaffirmed |
6th June, 2023 |
Rationale for revision in rating:
The revision in the rating for the bank lines of Oriental Aromatics
Limited (OAL) reflects ongoing challenges such as heightened competitive pressures from
increased domestic and Chinese camphor capacities, coupled with subdued demand in key
international markets like Europe and America. These factors have led to elevated working
capital requirements and increased reliance on external debt due to a significant debt-
funded capital expenditure program. Additionally, profitability is vulnerable to
fluctuations in raw material prices and adverse forex movements, despite some mitigation
from natural hedges through exports.
Outlook:
ICRA had revised the outlook to Stable from Negative because the
ratings continue to factor in the company's established market position in the Indian
camphor and aroma chemical industry, its diversified product mix and exposure to different
end-user industries. Further, the rating agency considered that the capex across all the
facilities and the greenfield project at Mahad in Maharashtra would support revenue growth
over a longer term.
13. PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS:
There were no loans or guarantees given or securities provided by the
Company except to it's wholly owned subsidiary (WOS), Oriental Aromatics & Sons
Limited, for which Section 186 of the Companies Act, 2013 is not applicable.
Further the details of loans, guarantees and investments in WOS are
given in Notes to the financial statements forming part of Annual Report.
14. RELATED PARTY TRANSACTIONS:
All Related Party Transactions that were entered into were in the
ordinary course of business and on arm's length basis and approved by the Audit Committee.
Certain transactions, which were repetitive in nature, were approved through omnibus
route.
There were no material transactions of the Company with any of its
related parties as per the Act. Therefore, the disclosure of the Related Party
Transactions as required under Section 134(3)(h) of the Act in AOC-2 is not applicable to
the Company for FY 2023-24 and, hence, the same is not required to be provided. Thus a
disclosure in Form AOC-2 in terms of Section 134 of the Act is not required.
Disclosures with respect to related party transactions as per Indian
Accounting Standards ("IND AS")-24 have been made in Note 41 to the Standalone
Financial Statements.
The Company has in place the Policy on dealing with Related Party
Transactions in terms of requirements of the Act and the SEBI Listing Regulations. The
said Policy is available on the Company's website at:
https://www.orientalaromatics.com/corporate-governance.php
15. BOARD, COMMITTEES OF THE BOARD AND OTHER INFORMATION:
The Board of the Company is comprised of eminent persons with proven
competence and integrity. Besides the experience, strong financial acumen and leadership
qualities, they have a significant degree of commitment towards the Company and devote
adequate time to the meetings.
a. COMPOSITION:
The Board comprised of 7 (Seven) directors, out of which 4(four) were
independent directors as on 31st March, 2024. As on the date of the report the Board
comprises of 9 (Nine) directors, out of which 6 (six) are independent directors details
thereof have been provided in the Corporate Governance Report.
b. APPOINTMENT/ RE-APPOINTMENT/CESSATION:
During the financial year 2023-24, Ms. Sapna Tulsiani (DIN: 00023934)
was appointed as an Independent Director with effect from 10th August, 2023 for
a period of four years till 9th August, 2027 and her appointment was approved
by the members via Postal Ballot on 23rd September, 2023 .
The Board, upon recommendation of the Nomination and Remuneration
Committee at its Meeting held on 27th May,, 2024, approved the appointment of
Mr. Cyrus J. Mody (DIN: 07380723) as an Additional Director in the capacity of
Non-Executive - Independent Director on the Board. His appointment is further recommended
to the shareholders at the forthcoming Annual General Meeting for a period of five years
w.e.f 27th May, 2024.
The Board, upon recommendation of the Nomination and Remuneration
Committee at its Meeting held on 27th May,, 2024, approved the appointment of
Mr. Deepak Ramachandra (DIN: 10633078) as Additional Director in the capacity of
Non-Executive - Independent Director on the Board. His appointment is further recommended
to the shareholders at the forthcoming Annual General Meeting for a period of five years
w.e.f. 27th May, 2024.
Re-appointment of Director retiring by rotation
I n terms of Section 152 of the Companies Act, 2013 and the Articles of
Association of the Company, Mr Satish K Ray, Executive Director (DIN:00617950) of the
Company retires by rotation at the ensuing Annual General Meeting and being eligible
offers himself for re-appointment.
Cessation
During the year under review, Ms. Amruda Nair (DIN: 06716791) ceased to
be an Independent Director of the Company with effect from 03rd October, 2023 upon
completion of her two terms, aggregating to ten years. Your Board places on record the
deep appreciation for valuable services and guidance provided by her during her tenure of
Directorship.
c. DECLARATION BY INDEPENDENT DIRECTORS:
All the Independent Directors of Company have given the declarations
that they meet the criteria of Independence as prescribed pursuant to the provisions of
Section 149(6) of the Companies Act, 2013 and Regulation 25(8) and 16(1)(b) of SEBI
Listing Regulations, as amended from time to time and are independent of the management.
The Independent Directors have complied with the Code for Independent
Directors prescribed under Schedule IV of the Companies Act, 2013 and SEBI Listing
Regulations. The Board is of the opinion that the Independent Directors of the Company
possess requisite qualifications, experience and expertise and they hold highest standards
of integrity.
d. BOARD MEETINGS:
During the year under review, four Board Meetings were convened and
held. The intervening gap between the Meetings was within the period prescribed under the
Companies Act, 2013 and SEBI Listing Regulations. Detailed information on the meetings of
the Board has been provided in the Corporate Governance Report annexed hereto.
e. COMMITTEES OF THE BOARD:
The Company has constituted various Committees of the Board as required
under the Companies Act, 2013 and the SEBI Listing Regulations. The details are given in
the Corporate Governance Report which forms a part of this Annual Report.
f. FAMILARIZATION PROGRAM FOR INDEPENDENT DIRECTORS:
The Company has set Familiarization programme for Independent Directors
with regard to their roles, rights, responsibilities in the Company, nature of the
industry in which the Company operates, the business model of the Company etc. The details
of which are available on the website of the Company www.orientalaromatics.com.
The Weblink of the same is
https://www.orientalaromatics.com/familiarisation-programme.php
For details of the Familiarization programme conducted, kindly refer
Corporate Governance Report which forms part of this Annual Report.
g. EVALUATION OF THE BOARD, ITS COMMITTEES AND DIRECTORS:
During the year, the Board carried out an annual evaluation of its
performance as well as of the working of its committees and individual Directors,
including the Chairman of the Board pursuant to the provisions of the Act and the SEBI
Listing Regulations.
The exercise was carried out through a structured questionnaire
prepared separately for the Board, Committees, Chairman and individual Directors. The
Chairman's performance evaluation was carried out by Independent Directors at a separate
meeting.
The parameters assessed included various aspects of the Board's
functioning, such as effectiveness, information flow between Board members and the
Management, quality and transparency of Board discussions, Board dynamics, Board
composition and understanding of roles and responsibilities, succession and evaluation,
and possession of required experience and expertise by Board members, among other matters.
The performance of the Committees was evaluated on the basis of their effectiveness in
carrying out their respective mandates.
h. During FY 2023-24, there was no change in the KMPs. In terms of the
provisions of Section 2(51) and Section 203 of the Act, the following are the Key
Managerial Personnel (KMP) of the Company as on 31st March, 2024:
- Mr. Dharmil A. Bodani - Chairman and Managing Director
- Mr. Shyamal A Bodani - Executive Director
- Mr. Satish Kumar Ray- Executive Director- Operations
- Mr. Parag K. Satoskar - Chief Executive Officer
- Mr. Girish Khandelwal - Chief Financial Officer
- Ms. Kiranpreet Gill - Company Secretary and Compliance Officer
- Ms. Anita Satoskar- Chief Technology Officer
(Designation of Ms. Anita Satoskar was changed with effect from 27th
May, 2024 from Chief R& D Officer to Chief Technology Officer)
16. CORPORATE GOVERNANCE REPORT
A separate section on Corporate Governance practices followed by the
Company, together with a certificate from the Company's Auditors confirming compliance,
forms a part of this Annual Report, as per SEBI Listing Regulations.
17. MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Management Discussion and Analysis Report as required under the
provisions of SEBI Listing Regulations
forms part of this Annual Report.
18. DIRECTOR?S RESPONSIBILITY STATEMENT: -
Pursuant to the requirements under 134(5) of the Companies Act, 2013,
the Directors hereby state and
confirm that:
a. In the preparation of the annual accounts, the applicable accounting
standards have been followed and there have been no material departures.
b. Such accounting policies have been selected and applied consistently
and judgments and estimates have been made that are reasonable and prudent to give a true
and fair view of the Company's state of affairs as at 31st March, 2024 and of
the Company's profit for the year ended on that date.
c. Proper and sufficient care has been taken for the maintenance of
adequate accounting records, in accordance with the provisions of the Companies Act, 2013
for safeguarding the assets of the Company and for preventing and detecting fraud and
other irregularities.
d. The annual financial statements have been prepared on a going
concern basis.
e. That internal financial controls were laid down to be followed and
that such internal financial controls were adequate and were operating effectively.
f. Proper systems were devised to ensure compliance with the provisions
of all applicable laws and that such systems were adequate and operating effectively.
19. DISCLOSURES RELATED TO POLICIES:
a. CORPORATE SOCIAL RESPONSIBILITY (CSR):
Pursuant to Section 135 of the Companies Act, 2013 and the Rules made
there under, the Board of Directors has constituted the Corporate Social Responsibility
(CSR) Committee under the Chairmanship of Mr. Shyamal A. Bodani, Executive Director
(DIN:00617950). The Company undertakes CSR activities in accordance with the CSR Policy.
The Company has adopted a strategy for undertaking CSR activities either directly or
through Keshavlal V. Bodani Education Foundation/ other implementing agencies, as deemed
appropriate, and is committed to allocating at least 2% of average net profit of the last
3 years.
The Company has identified and adopted projects as per the activities
included and amended from time to time in Schedule VII of the Companies Act, 2013. The
Company's main focus area is promoting educational facilities for the students having
learning disabilities by making contribution to Keshavlal V.Bodani Education Foundation.
During the FY 2023-24, in addition to making contribution to Keshavlal V.Bodani Education
Foundation, The Company also made contributions towards ensuring environmental
sustainability, ecological balance, health care and sanitation, empowering Women,
promotion of sports, rural development, old age home facilities for senior citizens.
The Corporate Social Responsibility Policy is available on the website
of the Company and the web-link thereto is
https://www.orientalaromatics.com/documents/corporate-governance/policies/csr-policy. pdf.
During the FY 2023-24, the Company the amount of ' 166 Lakh towards the CSR initiatives.
The disclosure relating to the amount spent and the details of the activities as required
under Companies (Corporate Social Responsibility Policy) Rules, 2014 is provided in
"Annexure B" forming part of this report and the web-link thereto is
https://www.orientalaromatics.com/csr-proiects.php
b. NOMINATION AND REMUNERATION POLICY:
I n terms of the provisions of the Companies Act, 2013 and the SEBI
Listing Regulations as amended from time to time, the policy on nomination and
remuneration of Directors, Key Managerial Personnel, Senior Management and other Employees
has been formulated by the Committee and approved by the Board by Directors.
The objective of the Policy is:
i. to lay down criteria and terms and conditions with regard to
identifying persons who are qualified to become Directors
(Executive/Non-Executive/Independent) and persons who may be appointed in Senior
Management and Key Managerial positions and to determine their remuneration.
ii. to specify the manner for effective evaluation of performance of
Board, its committees and individual directors to be carried out either by the Board, by
the Nomination and Remuneration Committee or by an independent external agency and review
its implementation and compliance.
iii. to recommend to the Board, appointment and removal of Director,
KMP and Senior Management Personnel.
iv. to assist the Board in ensuring that the Board nomination process
is in line with the diversity policy of the Board relating to gender, thought, experience,
knowledge and perspectives.
The remuneration has been paid as per the Nomination and Remuneration
Policy of the Company. The policy may be accessed on the website of the Company at
www.orientalaromatics.com and weblink thereto is:
https://www.orientalaromatics.com/documents/corporate-governance/policies/ NomNRemPol.pdf
c. VIGIL MECHANISM/WHISTLE BLOWER POLICY:
The Company has a vigil mechanism / Whistle Blower Policy to deal with
instance of fraud and mismanagement, if any. The objective of the Policy is to explain and
encourage the directors and employees to report genuine concerns or grievances about
unethical behavior, actual or suspected fraud or violation of the company's Code of
Conduct or Ethics Policy.
The policy may be accessed on the Company's website at
www.orientalaromatics.com at the link:
https://www.orientalaromatics.com/documents/corporate-governance/policies/vigil-mechanism.pdf
d. MATERIAL SUBSIDIARY POLICY:
Pursuant to the provisions of Regulation 16(1)(c) of the SEBI Listing
Regulations the Company has adopted a Policy for determining Material Subsidiaries laying
down the criteria for identifying material subsidiaries of the Company. The Company does
not have any Material subsidiary.
The Policy may be accessed on the website of the Company at the link:
https://www.orientalaromatics.
com/documents/corporate-governance/policies/POLMatSubsidiarv.pdf
e. RISK MANAGEMENT FRAMEWORK:
i. Risk Management Committee:
The Board of Directors of the Company has formed a Risk Management
Committee to frame, implement and monitor the risk management plan for the Company. The
Committee is responsible for reviewing the risk management plan and ensuring the
effectiveness. The Committee considers the risks that impact the mid-term to the long-term
objectives of the business and provides an update to the Board on the Company's risks and
mitigation plans outlined in the risk registers. The members may refer Corporate
Governance report for Composition and Terms of reference of the Committee.
ii. Risk Management Policy:
The Company has adopted Risk Management Policy in compliance with the
provisions of the Companies Act, 2013 and the SEBI Listing Regulations which promotes a
proactive approach in analysis, reporting and mitigation of key risks associated with the
business in order to ensure a sustainable business growth. It provides the Risk Management
framework which is designed to protect and add value to the organization and its
stakeholders through supporting the organization's objectives by improving decision
making, planning and prioritization by comprehensive and structured understanding of
business activity, volatility and project opportunity/threat.
The Risk Management Framework adopted by the Company provides
comprehensive view of risk management to address risks inherent to strategy, operations,
finance and compliance and their resulting organizational impact. The Risk Management
framework comprises of:
• Risk management process and
• Risk management organization structure
The risk management process adopted by the Company has been tailored in
accordance with the
business processes of the organization. Risk Management Committee
periodically reviews the Risk Management Policy of the Company so that the Management can
control the risk through properly defined network. The responsibility for identification,
assessment, management and reporting of risks and opportunities primarily rests with the
business managers as they are best positioned to identify the opportunities and risks,
they face, evaluate these and manage them on a day to day basis. The Risk Management
Committee provides oversight and reports to the Board of Directors. Broadly categorizing,
the process consists of the following stages/steps:
- Risk Assessment (identification, analysis & evaluation)
- Risk Treatment (mitigation plan)
- Monitoring, review and reporting
- Communication and consultation
The risk management organization structure including the key roles and
responsibilities is summarized as follows:
Board of Directors:
The Board oversees the establishment and implementation of an adequate
system of risk management across the Company.
Risk Management Committee:
• Risk Management Committee is chaired by Independent Director.
The Committee seeks to identify the key business risks.
• I t develops risk response processes and assesses adequacy of
responses for the key risks identified through the risk management framework
• Ensures the implementation of risk mitigation plans
• Monitors the Key Risk Indicators (KRIs) of the Enterprise and
Functional Level Key Risks.
Site Level Risk Management Committee:
The Committee sets the risk management procedures and coordinates with
risk unit owners in reporting key risks to the Risk Management Committee.
Risk Unit Owners:
Risk unit owners in consultation with Officer in charge at a plant/unit
assess the risk by determining its probability of occurrence and its impact with an
objective of reporting key risks to the Site Level Risk Committee.
The Risk Unit owners are responsible for preparing and consolidating
the report and the same is reviewed by the Site Level Risk Committee.
iii. Key Risks & Description:
- Financial Risks:
The Company faces market, credit, foreign exchange, and liquidity
risks.These risks are inherent in our business operations and require diligent management
to ensure the Company's stability and success.
- Operational Risks:
The Company faces operational risks such as supply chain disruptions,
high energy costs, production challenges (including manpower shortages), logistics issues,
quality assurance problems, and risks of leakage, spillage, fire, and explosion. These
risks are inherent in our business environment and can lead to potential disruptions and
challenges. We are dedicated to actively managing these risks to protect our operations,
ensure business continuity, and fulfill our commitments to stakeholders.
- Environment, Health & Safety Risks:
The Company faces Environment, Health & Safety risks, including
climate change impacts, carbon emissions, infectious disease containment, and safety
hazards like leakage, spillage, fire, explosion, and toxic releases. We are committed to
proactively managing these risks and integrating responsible practices into our
operations.
- Regulatory and Macroeconomic risk:
The Company is affected by changes in government policies and industry
regulations. Volatile macroeconomic conditions, driven by geopolitical tensions, disrupt
supply chains and raise commodity prices. Inflationary pressures also reduce consumer
demand, further impacting the Company's operations.
The risk-related information outlined above in this section is not
exhaustive. Other material risks are outlined in the Management Discussion and Analysis
section and BRSR which forms a part of this Annual Report.
f. DIVIDEND DISTRIBUTION POLICY:
Pursuant to Regulation 43A of the Securities and Exchange Board of
India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board has
approved and adopted a Dividend Distribution Policy which endeavors for fairness,
consistency and sustainability while distributing profits to the shareholders. The
dividend recommended is in accordance with the Dividend Distribution Policy of the
Company.
The Policy is available on the Company's website
www.orientalaromatics.com at
https://www.orientalaromatics.com/documents/corporate-governance/policies/DivDistPolicv.pdf
g. PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE:
As per the requirement of the Sexual Harassment of Women at Workplace
(Prevention, Prohibition & Redressal) Act, 2013 ('POSH Act') and Rules made
thereunder, the Company has formed Internal Committees ('IC') at all its workplaces to
address complaints pertaining to sexual harassment in accordance with the POSH Act. The
Company has a detailed policy for prevention of sexual harassment which ensures a free and
fair enquiry process. While maintaining the highest governance norms, the Company has
appointed external committee member who has prior experience in the areas of women
empowerment and prevention of sexual harassment.
The Directors state that during the year under review, there were no
cases filed pursuant to the Sexual Harassment of Women at Workplace (Prevention,
Prohibition and Redressal) Act, 2013. To build awareness in this area, the Company
conducted awareness session for all the employees.
20. AUDITORS AND AUDITORS REPORTS:
a. STATUTORY AUDITORS:
Pursuant to the provisions of Section 139 of the Companies Act, 2013
and the Companies (Audit and Auditors) Rules, 2014, the Company had appointed at it's 51st
Annual General Meeting held on 17th August, 2023, M/s Lodha & Co LLP (Firm
Reg. No. 301051E/E300284), Chartered Accountants as statutory Auditors of the Company for
a period of 5 years till the conclusion of conclusion of 56th Annual General
Meeting.
The Auditors Report to the shareholders for the year under review does
not contain any qualification, reservation, disclaimers or adverse remarks.
There was no instance of fraud during the year under review, which
required the Statutory Auditors to report to the Audit Committee and / or Board under
Section 143(12) of the Act and Rules framed thereunder
b. SECRETARIAL AUDITOR:
Pursuant to the provisions of Section 204 of the Companies Act, 2013
and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the
Company had appointed M/s. Shreyans Jain & Co., Practicing Company Secretaries, to
undertake the Secretarial Audit of the Company for the FY 2023-24. The Report of the
Secretarial Audit carried out is annexed herewith as "Annexure C".
The Secretarial Audit report, as issued by the auditors in Form MR-3
does not contain any observation or qualification requiring explanation or comments from
the Board under Section 134(3) of the Companies Act, 2013.
The Board has on the recommendation of the Audit Committee re-appointed
M/s. Shreyans Jain & Co., Practicing Company Secretaries, as Secretarial Auditor, for
conducting Secretarial Audit of the Company for the FY 2024-25.
c. COST AUDITOR:
Pursuant to the provisions of Section 148 of the Companies Act, 2013
read with the Companies (Cost Records and Audit), Rules 2014, the Board had appointed M/s
V J. Talati & Co, Cost Accountants as cost auditors to conduct the audit of Cost
accounting records for the FY 2023-24. The Cost Audit report for the FY 2022-23 was filed
with Ministry of Corporate Affairs on 9th September, 2023.
The Board has on the recommendation of the Audit Committee,
re-appointed M/s V. J. Talati & Co., Cost Accountants to conduct the audit of the cost
accounting records of the Company for FY 2024-25 at a remuneration of ' 1,45,000/- plus
Service Tax & re-imbursement of out-of- pocket expenses. The remuneration is subject
to the ratification of the Members in terms of Section 148 read with Rule 14 of the
Companies (Audit and Auditors) Rules, 2014 and is accordingly placed for your
ratification.
21. TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND (IEPF):
During the year under review, the Company has transferred a sum of '
423,770 (Rupees Four lakh twenty- three thousand seven hundred and seventy only) to
Investor Education and Protection Fund, in compliance with the provisions of Section 125
of the Companies Act, 2013. The said amount represents dividend for the FY 2015-16 which
remained unclaimed by the members of the Company for a period exceeding 7 years from its
due date of payment.
As per the Investor Education and Protection Fund Authority
(Accounting, Audit, Transfer and Refund) Rules, 2016, as amended ('IEPF Rules'), the
Company has uploaded the information in respect of the unclaimed dividends as on 31st
March, 2024 on the website of the Company at www.orientalaromatics.com and the weblink is:
https://www.orientalaromatics.com/unclaimed-dividend.php
Pursuant to the provisions of Section 124 of the Act read with the IEPF
Rules, all the shares on which dividends remain unpaid or unclaimed for a period of seven
consecutive years or more shall be transferred to the demat account of the IEPF Authority
as notified by the Ministry of Corporate Affairs. Accordingly, the Company has transferred
22,066 Equity Shares of face value ' 5/- per share to the demat account of the IEPF
Authority during FY 2023-24.
The Company had sent individual notice to all the Members whose shares
were due to be transferred to the IEPF Authority and had also published newspaper
advertisements in this regard. The details of such shares transferred to IEPF are uploaded
on the website of the Company at https://www.orientalaromatics.com/ unclaimed-dividend.php
The Company has appointed a Nodal Officer and Deputy Nodal Officer
under the provisions of IEPF, the details of which are available on the Company's website
at https://www.orientalaromatics.com/unclaimed- dividend.php.
22. INSURANCE:
The Company's buildings, plant & machinery and inventories have
been adequately insured. Loss of profit with respect to both factories has also been
adequately insured.
23. ENVIRONMENTAL COMPLIANCE AND SAFETY:
The Company is deeply committed to pollution control, environmental
protection, and sustainability throughout its manufacturing processes. By maximizing
resource recovery, conserving water, and minimizing effluents and emissions, we are
actively working to reduce our environmental impact. To ensure transparency and
accountability, we submit the required analytical reports to local authorities,
demonstrating our commitment to maintaining high environmental standards
The Company holds the Environmental Management Systems (EMS) ISO
14001:2015 certification, validating our efforts in establishing and maintaining an
effective environmental management system. This certification enhances our environmental
performance, helps achieve environmental objectives, and ensures compliance with
regulatory obligations. By implementing an EMS, we demonstrate our commitment to
continuous improvement in environmental performance and sustainable practices. The
Company's focus on pollution control, environmental protection and sustainability, along
with our compliance with environmental regulations, positions us as a responsible and
environmentally conscious organization.
24. LISTING OF SECURITIES:
The Equity Shares of the Company are listed at BSE Limited (BSE) and
National Stock Exchange of India Limited (NSE). The Shares are under compulsory
dematerialization list of the Securities & Exchange Board of India. As on 31st
March 2024, total 33020491 shares representing 98.12% of Companies Equity Share Capital
have been dematerialized. The Company has paid Annual Listing fees for the FY 2024-25 to
the stock exchanges where it is listed.
25. INDUSTRIAL RELATIONS:
The relations with the employees of the Company remained peaceful and
cordial during the year under review.
26. ANNUAL RETURN:
Pursuant to Section 92(3) read with Section 134(3)(a) of the Act, the
Annual Return as on 31st March, 2024 is available on the Company's website at
the link https://www.orientalaromatics.com/inspection-documents.php
27. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION & FOREIGN
EXCHANGE EARNINGS AND OUTGO:
The requisite information regarding conservation of energy, technology
absorption and foreign exchange earnings and outgo in accordance with Section 134(3)(m) of
the Act read with Rule 8 of the Companies (Accounts) Rules, 2014, is annexed herewith as
"Annexure - D".
28. PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES:
The information containing details of employees as required under
Section 197 of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration
of Managerial Personnel) Rules, 2014 is attached herewith as "Annexure - E".
The statement containing names of top ten employees in terms of
remuneration drawn and the particulars of employees as required under Section 197(12) of
the Act read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of
Managerial Personnel) Rules, 2014, is provided in a separate annexure forming part of this
report.
Further, the report and the accounts are being sent to the Members
excluding the aforesaid annexure. In terms of Section 136 of the Act, the said annexure is
open for inspection and any Member interested in obtaining a copy of the same may write to
the Company Secretary.
29. GREEN INITIATIVE:
The Company has considered and adopted the initiative of going green
minimizing the impact on the environment. To support the company's 'Green Initiative',
members who have not yet registered their email addresses are requested to register the
same with their Depository Participant's (DPs) in case the shares are held by them in
electronic form and with our Registrar and Share Transfer Agent- Link intime India Private
Limited (RTA) in case the shares are held by them in physical form.
30. OTHER DISCLOSURES:
The Directors state that no disclosure or reporting is required in
respect of the following items as they were either not applicable to the Company or there
were no transactions/events on these matters during the year under review:
i. No material changes and commitments affected the financial position
of the Company between the end of the financial year and the date of this Report.
ii. There has been no change in the nature of business of the Company
as on the date of this report.
iii. There was no revision in the financial statements.
iv. The Managing Director & CEO of the Company did not receive any
remuneration or commission from any of its subsidiaries.
v. No significant or material orders were passed by the Regulators or
Courts or Tribunals which impact the going concern status and Company's operations in
future.
vi. There are no proceedings, pending under the Insolvency and
Bankruptcy Code, 2016.
vii. There was no instance of one-time settlement with any Bank or
Financial Institution.
31. ACKNOWLEDGEMENT:
Your Directors would like to express their appreciation for the
co-operation and assistance received from the Government authorities, banks nd other
financial institutions, vendors, suppliers, customers, shareholders and all other
stakeholders during the year under review.
Your Directors also wish to place on record their deep sense of
appreciation for the committed services of all the employees.
For and on behalf of the Board of Directors
|
Dharmil A. Bodani |
Shyamal A. Bodani |
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Chairman and Managing
Director |
Executive Director |
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DIN: 00618333 |
DIN:00617950 |
Place: Mumbai |
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Dated: 27th May,
2024 |
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