Orient Bell Ltd.
|BSE: 530365||Sector: Consumer|
|NSE: ORIENTBELL||ISIN Code: INE607D01018|
|BSE 00:00 | 18 Feb||150.15||
|NSE 00:00 | 18 Feb||149.70||
|Mkt Cap.(Rs cr)||214|
|Mkt Cap.(Rs cr)||213.96|
Orient Bell Ltd. (ORIENTBELL) - Director Report
Company director report
Your Directors take pleasure in presenting the Forty First Annual Report and theaudited accounts for the financial year ended March 31 2018.
(Rs. in lakhs)
During the year ended March 31 2018 your Company has registered a growth of 5% interms of Reporting Revenue (net of Taxes) from ' 61340 Lakhs in previous year to ' 64271Lakhs in current year as well as in Operating Profit Before Tax (PBT) by 9% from ' 2482Lakhs in the previous year to ' 2706 lakhs in the current year. Good selling of HighValue Products and considerable saving in finance cost has contributed to the growth inIncome and Profits during the year. The display of updated portfolio of Company's productsat Dealer's Showrooms as well as Company owned Boutiques has improved the efficiency.Regular updating of the Display Centers across the Country to showcase the latest productshas also helped in achieving Company's sales targets.
As per the provisions of Companies (Indian Accounting Standards) Rules 2015 as amendedfrom time to time and in terms of the applicability of the said Rules to your Company thefinancial statements for the financial year ended 31.03.2018 has been prepared incompliance with the Indian Accounting Standards (IND-AS).
Your Company has decided to install a new manufacturing line within its Sikandrabad(U.P.) Plant which will produce large format tiles viz. Digital Glazed Vitrified Tiles(DGVT) and Polished Glazed Vitrified Tiles (PGVT). It is estimated to have a productioncapacity of around 8500 sq.mtr. per day. Your Company look forward to reap good benefitsout of this investment. The
project is under progress and the production is expected to start in Q3 of FY 2018-19.
During the year under review your Company has acquired 26% equity stake of a Morbi(Gujarat) based Company Corial Ceramic Private Limited (Rs. Corial'). Corial has a set upof a tile manufacturing plant in Morbi Gujarat having a production capacity of about 5.2million square meters of wall tiles per annum. In another ongoing project in MorbiGujarat with Proton Granito Private Limited the production of Double Charge (Floor) Tileshas started during the year under review. Under these arrangements your Company will beassured of continuous supply of high quality floor tiles and wall tiles.
During the year under review your Company has unveiled a new Logo. This contemporaryLogo with a vibrant colour scheme and style is liked by all in the market and has alreadystarted giving benefits. Under this branding activity branding replacement activity hasbeen completed. With this your Company's identity has become more visible. During FY2017-18 your Company has opened 63 Franchise Boutiques at very prominent locations acrossthe Country. This brand visibility and opening of more display showrooms has improvedcustomer pull for OBL products. In Social media space your Company has engaged a renownedSocial Media Agency for Campaigns on various Social Media platforms and brand promotionsthrough Influencers.
As always your Company participated in/ sponsored several programs related to the tileindustry. During the year under review your Company has sponsored India Arch Dialoguemeet where World's renowned Architects showcase their work. Architects and Influencersplay a pivotal role in growth of a Company like yours. Your Company has as per regularpractice organized the Architects meets and also a Channel Partners meet at Dubai.
Your Company's Project sale vertical is strong as ever which continued its drive to mapthe Government (GPS) and Private (PPS) Projects and sell more and more of its High ValueProducts in these projects. Your Company has represented itself before various GPS and PPSProjects and successfully got its brand "Orient Bell" approved and listed withmany more PPS Government Departments and PSUs. A few of such PPS and GPS and PSU projectsinclude Gannon Dunkerley & Co Ltd B.G. Shirke Construction Tech. Pvt Ltd. NCCLimited Som Projects Private Limited K M V Projects Limited Bestech India Pvt. Ltd.Ashiana Housing Limited Wave Infratrade Private Limited Land Craft Developers Pvt Ltd.NBCC DDA Military Engineer Services (MES) Medical College (Telangana/Tamilnadu/Chitrakoot) Golf Link-Ghaziabad NTPC-Darbhanga LDA-Lucknow etc.
Your Directors have recommended a dividend of ' 0.50 per equity share for the financialyear ended March 31 2018. The total outgo of dividend (inclusive of tax of ' 14.64 lakhs)would amount to ' 85.89 lakhs as against ' 85.39 lakhs in the previous year. The dividendpayout is subject to approval of members at the ensuing Annual General Meeting.
Particulars of Loans Guarantees or Investments
Loans Guarantees and Investments covered under Section 186 of the Companies Act 2013form part of the notes to the financial statements provided in this Annual Report.
Your Company has neither invited nor accepted deposits from the public falling withinthe ambit of Section 73 of the Companies Act 2013 and The Companies (Acceptance ofDeposits) Rules 2014.
Transfer to Reserves
During the year under review no amount was transferred to Reserves.
Particulars of Contracts or Arrangements made with Related Parties
All Related Party Transactions that were entered into during the financial year were onan arm's length basis in the ordinary course of business and were in compliance with theapplicable provisions of the Act and the Listing Regulations. There were no materiallysignificant Related Party Transactions made by the Company during the year that would haverequired Shareholder approval under the Listing Regulations. All Related PartyTransactions are placed before the Audit Committee for
approval. Prior omnibus approval of the Audit Committee is obtained for thetransactions which are repetitive in nature. A statement of all Related Party Transactionsis placed before the Audit Committee for its review on a quarterly basis specifying thenature value and terms and conditions of the transactions. The Company has adopted aRelated Party Transactions Policy. The Policy as approved by the Board is uploaded onthe Company's website. Detail of the transactions with Related Parties are provided in theaccompanying financial statements. There were no transactions during the year which wouldrequire to be reported in Form AOC-2.
Directors and Key Managerial Personnel
During the year under review Mr. K.M. Pai has resigned from the post of ExecutiveDirector & CFO of the Company due to personal reasons to spend more time with hisfamily at Bengaluru. Your Board of Directors has accepted the resignation of Mr. K.M. Paiw.e.f. 01st June 2018 and also approved his continuation on the Board of theCompany as Non-Executive Director w.e.f. 01st June 2018. Relevant resolutionis proposed by the Board in the notice calling 41st AGM.
The present term of appointment of Mr. Mahendra K. Daga is up to 31st March2021 as Chairman & Managing Director of the Company. In view of the fact that Mr.Madhur Daga has completely taken over the responsibilities of Managing Director of theCompany and for better Corporate Governance Mr. Mahendra K. Daga has stepped down fromthe post of Managing Director but consented to continue as Whole Time Director. The Boardof Directors has in its meeting held on 21st May 2018 subject to the approvalof shareholders at forthcoming AGM approved the change in designation of Mr. Mahendra K.Daga from Chairman & Managing Director to Chairman & Whole Time Director of theCompany effective 01st October 2018. Subject to further approval ofshareholders Mr. Mahendra K. Daga will continue to drive the Company Operations fromstrength to strength as Whole Time Director. Relevant resolution is proposed by the Boardin the notice calling 41st AGM.
The second term of appointment of Mr. R.N. Bansal as an Independent Director willexpire on 29th September 2018 and therefore he shall retire on that date interms of Section 149 (11) of the Companies Act 2013. His outstanding contribution andsupport is appreciated by the Board of Directors.
All the Independent Directors have given their respective declarations that they meetthe criteria of independence as laid down under Section 149(6) of the Companies Act 2013and SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.
Mr. Mahendra K. Daga shall retire at the forthcoming Annual General Meeting and beingeligible has offered himself for reappointment.
The present term of appointment of Mr. Madhur Daga as Managing Director of the Companywill end on 31st March 2019. The Nomination and Remuneration Committee and the Board ofDirectors have subject to the approval of the members vide special resolution at theensuing Annual General Meeting and such other approvals as may be necessary in thisregard approved the reappointment and remuneration of Mr. Madhur Daga as ManagingDirector of the Company for a further term of three years from 01st April 2019to 31st March 2022.
During the year under review your Company has appointed Mr. Aditya Gupta as ChiefExecutive Officer (in the category of Key Managerial Personnel) of the Company. Mr. AdityaGupta is a Bachelor of Technology from IIT Mumbai and a Post Graduate Diploma holder inMarketing & Finance from IIM Bangalore with around 27 years of multi- functionalexperience in industry leading companies. Throughout his career he has been recognized& awarded for delivering consistent revenue growth and boosting margins throughinnovative marketing programs and executional excellence. He is a business leader withstrong operational experience in Sales and Marketing having led new product developmentbrand initiatives and building large distribution channels across India. For the lastdecade he has been responsible for delivering significant revenue (in excess of ' 4500Cr) and EBITDA targets for business geographies under his control.
Mr. Aditya Gupta started his career with United Spirits Ltd (now Diageo) and alsoworked at Bharti Airtel Ltd. Mr. Aditya would put immense focus on Purpose Values Ethicsand Institution Building after spending the last nine years with the TATA group where heworked in their Telecom and Power businesses at various senior positions. His last rolewas asset monetization and developing new businesses in the upcoming field of ElectricVehicles Smart Cities and Distributed Generation for TATA Power. His trademark has been aconsistent ability to build and lead cross-functional teams with a relentless focus onexecution.
Number of meetings of the Board
The Board met six times during the financial year the details of which are given inthe Corporate Governance Report that forms part of this Annual Report. The intervening gapbetween any two meetings was within the period prescribed by the Companies Act 2013.
Directors' Responsibility Statement
Pursuant to Section 134(3)(c) of the Companies Act 2013 your Directors to the bestof their knowledge and belief and according to the information and explanations obtainedby them make the following statement:
(a) that in the preparation of annual accounts for the financial year ended March 312018 the applicable accounting standards have been followed along with proper explanationrelating to material departures if any;
(b) that the Directors have selected such accounting policies and applied themconsistently and made judgments and estimates that were reasonable and prudent so as togive a true and fair view of the state of affairs of your Company as at March 31 2018 andof the profit of your Company for the year ended on that date;
(c) that proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;
(d) that the accounts for the financial year ended March 31 2018 have been prepared ona 'going concern' basis;
(e) that internal financial controls were in place and that
such internal financial controls were adequate and were operating effectively;
(f) that proper systems to ensure compliance with the provisions of all applicable lawswere in place and were adequate and operating effectively.
The Audit Committee comprises of three Independent Directors namely Mr. Sameer Kamboj(Chairman) Mr. R.N. Bansal (Member) and Mr. P.M. Mathai (Member) and one Non IndependentDirector Mr. K.M. Pai (Member). All the recommendations made by the Audit Committee wereaccepted by the Board.
The Policy of the Company on Director's appointment and remuneration specifyingcriteria for determining qualifications positive attributes independence of a Directorand other matters provided under sub section (3) of section 178 of the Companies Act2013 adopted by the Board is appended as Annexure 1 to the Board's Report. Weaffirm that the remuneration paid to the Directors is as per the terms laid under theNomination & Remuneration Policy of the Company.
Risk Management Policy
Pursuant to the requirement of SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 the Company has formed a Risk Management Policy. This policy seeks tocreate transparency minimize adverse impact on the business objectives and enhance theCompany's competitive advantage. The policy defines the risk management approach acrossthe enterprise at various levels including documentation and reporting.
The Risk Management Policy as approved by the Board is uploaded on the Company'swebsite https://www.orientbell.com .
Vigil Mechanism cum Whistle Blower Policy
The Company has formulated a Vigil Mechanism cum Whistle Blower Policy to deal with theinstances of unethical behavior actual or suspected fraud or violation of the Company'sCode of Conduct. It provides for a mechanism for Directors and Employees of the Company toapproach the Chairman of the Audit Committee of the Company or the Director nominated toplay the role of Audit Committee as the case may be in exceptional cases to report suchcases. The Vigil Mechanism cum Whistle Blower Policy of the Company is uploaded on theCompany's website https://www.orientbell.com .
Corporate Social Responsibility
The Corporate Social Responsibility Committee comprises Mr. Madhur Daga (Chairman) Mr.R.N. Bansal Ms. Tanuja Joshi and Mr. Sameer Kamboj (Members). The Committee hasformulated and recommended to the Board a Corporate Social Responsibility Policy("CSR Policy") indicating the activities to be undertaken by the Company whichhas been approved by the Board. The CSR Policy may be accessed on the Company's website athttps://www.orientbell.com .
The CSR activities as per the provisions of the Companies Act 2013 may also beundertaken through a Registered Trust. The Company continues to undertake the CSRactivities also through M/s Godavari Foundation a Trust registered under Section 12A ofthe Income Tax Act 1961 (registration no. DIT(E) 268- 69/8E/196/90-91).
The Company undertakes initiatives in compliance with Schedule VII of the Act.
The average net profit of the Company computed as per Section 198 of the Act duringthe three immediately preceding financial years (i.e. 2014-15 2015-16 and 2016-17) was'170735433/-. It was hence required to spend '3414709/- on CSR activities during theFinancial Year 2017-18 being 2% of the average net profits of the three immediatelypreceding financial years. During the year the Company has spent '3445620/- on CSRactivities.
The Annual Report on CSR activities is appended as Annexure 2 to the Board's Report.
Code for prevention of Insider Trading Practices
In accordance with the provisions of SEBI (Prohibition of Insider Trading) Regulations201 5 your Company has formulated and adopted 'Code of Conduct for prevention of InsiderTrading' and 'Code of practices and procedures for fair disclosure of Unpublished PriceSensitive Information' (hereinafter collectively referred to as "OBL Code ofConduct"). The OBL Code of Conduct is uploaded on the website of the companyhttps://www.orientbell.com .
Information pursuant to Section 134(3)(m) of the Companies Act 2013
The information on conservation of energy technology absorption and foreign exchangeearnings and outgo stipulated under section 134(3)(m) of the Companies Act 2013 read withrule 8 of the Companies (Accounts) Rules 2014 is appended as Annexure 3 to the Board'sReport.
Pursuant to the provisions of the Companies Act 2013 and SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 the Board has carried out an annual evaluationof its own performance and that of its Committees as well as performance of the Directorsindividually. Feedback was sought covering various aspects of the Board's functioning suchas adequacy of the composition of the Board and its Committees Board culture executionand performance of specific duties obligations and governance and the evaluation wascarried out based on responses received from the Directors.
A separate exercise was carried out by the Nomination and Remuneration Committee of theBoard to evaluate the performance of individual Directors. The performance evaluation ofthe Non-Independent Directors and the Board as a whole was carried out by the IndependentDirectors. The performance evaluation of the Chairman of the Company was also carried outby the Independent Directors. The Directors expressed their satisfaction with theevaluation process.
Employee Stock Option Scheme
The information required to be disclosed in terms of the provisions of SEBI (Sharebased employee benefits) Regulations 2014 and Companies (Share Capital and Debentures)Rules 2014 is appended as Annexure 4 to the Board's Report.
Management Discussion and Analysis Report
'Management Discussion and Analysis Report' as stipulated under SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 forming part of this reporthas been given under separate section in the Annual Report.
Corporate Governance Report
As per SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 aseparate section on corporate governance practices followed by the Company together witha certificate for compliance of the provisions of Corporate Governance from the StatutoryAuditors forms an integral part of this Report.
Extract of Annual Return
The details forming part of the extract of the Annual Return in Form MGT-9 is appendedas Annexure 5 to the Board's Report.
The Company has no Subsidiary Company.
Particulars of Employees
The information as per Section 197 read with Rule 5 of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 will be provided upon request. Howeveras per the provisions of Section 136 of the Act the Report and Accounts are being sent toall the members excluding the information on particulars of employees which is availablefor inspection by the members at the Registered Office of the Company during businesshours on working days of the Company up to the date of the ensuing Annual General Meeting.Any member interested in obtaining a copy thereof may write to the Company Secretary inthis regard.
M/s B.R. Gupta & Co. Chartered Accountants New Delhi Statutory Auditors of yourCompany have been appointed as such by the Shareholders at the 40th AGM held on 22ndSeptember 2017 to hold office from the conclusion of 40th AGM till the conclusion of 45thAGM to be held in the year 2022. Their appointment was however subject to ratificationby the shareholders in every AGM if required by law. As per the Companies (Amendment)Act 2017 the said requirement of ratification has been dispensed with. Accordingly M/sB.R. Gupta & Co. Chartered Accountants will continue to hold office till theconclusion of 45th AGM to be held in the year 2022 as per Shareholders' approval.
The Auditor's Report read with notes to the accounts referred to in the Auditor Reportare self- explanatory and therefore do not call for any further comments. The Auditor'sReport does not contain any qualification reservation or adverse remark.
Pursuant to the provisions of Section 204 of the Companies Act 2013 and The Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hasappointed M/s Vivek Arora Company Secretaries to undertake the Secretarial Audit of theCompany. The Report of the Secretarial Audit appended as Annexure 6 to the Board'sReport does not contain any qualification reservation or adverse remark.
Material changes and commitments between the end of the financial year and date ofreport.
There is no material change and/or commitment held between the end of the financialyear and the date of report affecting the financial position of the Company.
The Company has a Policy on Prohibition Prevention and Redressal of Sexual Harassmentof Women at Workplace and matters connected therewith or incidental thereto covering allthe aspects as contained under the "The Sexual Harassment of Women at Workplace(Prohibition Prevention and Redressal) Act 2013". Your Directors further state thatduring the year
under review one case was received by the Internal Complaints Committee under theSexual Harassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013and the same was disposed of as per said Act and Policy on prevention prohibition andredressal of Sexual Harassment of Women.
No significant or material orders were passed by the Regulators or Courts or Tribunalswhich impact the going concern status and Company's operations in future.
Your Directors acknowledge with gratitude and wish to place on record their deepappreciation of continued support and co-operation received by the Company from variousGovernment authorities Shareholders Bankers Lenders Business Associates DealersCustomers Financial Institutions and Investors during the year. Your Directors also placeon record their deep appreciation of the dedication and commitment of your Company'semployees at all levels and look forward to their continued support in the future as well.