Your Directors take pleasure in presenting the Forty Third Annual Report and theaudited accounts for the financial year ended March 31 2020.
|Particulars ||Year ended March 31 2020 ||Year ended March 312019* |
|Net Sales/ Revenue from Operations (adjusted for taxes) ||49056 ||56945 |
|Profit before finance cost depreciation taxation and exceptional item ||3131 ||3895 |
|Finance Cost ||809 ||871 |
|Depreciation ||2059 ||1652 |
|Exceptional Item (Net) ||0 ||0 |
|Profit before taxation ||263 ||1372 |
|Operating Profit before taxation ||263 ||1372 |
|Tax expense ||(420) ||482 |
|Profit after tax ||683 ||890 |
|(Other Comprehensive Income (Net of Taxes) ||65 ||64 |
|PAT with Other Comprehensive Income ||748 ||954 |
|Earning per share (Rs) ||4.78 ||6.24 |
During the year under review FY 2019-20 your Company's Net Sales is Rs 49056 lakhs asagainst Rs 56945 lakhs in the previous year FY 2018-19 and the Profit Before Tax (PBT)for the current fiscal FY 2019-20 is Rs 263 lakhs as against Rs 1372 lakhs in theprevious year FY 2018-19.
Challenging market conditions continued to persist during FY20. Liquidity remainedscarce while certain one off factors too played during the course of the year restrictingvolumes and thus topline.
Concerted efforts continued on the costs front. Optimization of manufacturing KeyPerformance Indicators (KPI's) alternative procurement options rationalization ofadministrative overheads etc. explored to achieve a favourable cost base. The company wasalso able to realize significant savings in power and fuel costs by switching from LPG toRLNG and by use of solar power at its Hoskote plant.
Despite challenging market conditions your company was able to reduce overall debt by~50% during the year. Core cash conversion cycle was reduced by ~19 days driven by sharpfocus on collections and inventory and also renegotiation on payment terms with keysuppliers.
The strict financial prudence exhibited by your company also reflected throughreaffirmation of the credit ratings by CRISIL as A-/Negative.
During the year under review your Company on boarded a Chief Human Resource Officer("CHRO) to complete the CXO suite. On people front your Company alsoidentified various new positions under the Sales function to strengthen overall structureand to improve market penetration. Your Company is focusing on quality hiring andrecruitments based on competencies that drive success. Several reward and recognitionprograms training calendars have driven engagement for all functions. The interaction ofCXO's with your Company's Channel Partners as well as with Staff has increasedsignificantly. The Managing Director has had many townhall meetings to encourage a culturethat fosters openness & transparency.
The "CEO with HR Orientation award from ZEE BUSINESS National Human CapitalLeadership Congress recognises our early efforts to build a company with competencies forfuture success.
During the year under review your Company has launched several new categories sizesand designs to augment its product portfolio -
- Valencica (SKD Floor Sizes: 600x600) is an entirely new product developed inSikandrabad Plant to cater to lower entry point for GVT-like aesthetics
- Full body tile (SKD Floor Size: 600x600) was another first from the SikandrabadPlant. With minimal investment a whole new manufacturing process was set-up tomanufacture Full Body Tiles. This reduced the dependence on Morbi and gave our channelpartners the ease of ordering from Sikandrabad.
- Timeless Pavers (400x400) was another category of pavers introduced at Sikandrabad.Multiplica (SKD Wall Sizes: 300 x 450 & 300 x 600) is an effort to increase thenumber of concepts by inspiring customers to mix & match tiles. This increased thevariety your company offered with minimal addition of SKUs.
- Duazzle (HSK Wall Sizes 250 x 375) is a unique product from Hoskote Plant that forthe first time in the factory history produced wall tiles at Hoskote Plant. This giveschannel partners to buy an even broader portfolio of products from Hoskote.
The Marketing Mix for all of these New Product Developments (NPDs) resulted from a veryintense collaboration with customers. Each one of these launches have been acceptedfavorably by the market and your company is already reaping benefits from theseinitiatives.
Your Company has continued to engage with Channel Partners across India to strengthenour relationships with them as well as improve the quality of displays. As on 31-03-2020the Company had opened 20 Tile boutiques in targeted cities resulting in 166 Orient BellTile Boutiques (OBTBs) across the Country.
Your Company's thrust on digital means to create brand awareness using social mediaplatforms and other customer centric tools (virtual showrooms) continued during FY20.
The branding efforts are being noticed and recognized externally. Realty+ a keypublication focusing on real estate recognized our marketing campaign as the BestIntegrated Brand Campaign (Interior Exterior Award 2020). It also recognized our newlyrelaunched website as the Website Of The Year.
The Future of Retail Summit recognized Quicklook as the 'Best Omnichannel Retailmodel'. It is already being used by 100+ channel partners for visualizing ambiences &sending quotations.
Covid-19 pandemic has only accentuated the need for digital and hence your companywould continue to invest in this area to enhance customer connect and overall experienceduring FY21 as well.
Your Directors do not recommend any dividend for the financial year ended 31stMarch 2020.
Particulars of Loans Guarantees or Investments
Loans Guarantees and Investments covered under Section 186 of the Companies Act 2013forms part of the notes to the financial statements provided in this Annual Report.
Public Deposits and Loans / Advances
Your Company has neither invited nor accepted deposits from the public falling withinthe ambit of Section 73 of the Companies Act 2013 read with 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 Companies Act 2013 and the SEBI Regulations. There are nomaterially significant related party transactions during the year under review made by theCompany with Promoters Directors Key Managerial Personnel or other designated personswhich may have potential conflict with the interest of the Company at large. TheDisclosure in Form AOC-2 under Section 134(3)(h) of the Companies Act 2013 is notrequired.
All Related Party Transactions are placed before the Audit Committee for approval.Prior omnibus approval of the Audit Committee is obtained for the transactions which arerepetitive in nature. A statement of Related Party Transactions is placed before the AuditCommittee for its review on a quarterly basis specifying the nature value and terms andconditions of the transactions. The Company has adopted a Related Party TransactionsPolicy. The Policy as approved by the Board is uploaded on the Company's website. Detailof the transactions with Related Parties including the transaction(s) of the Company witha Company belonging to the promoter/promoter group which hold(s) more than 10%shareholding in the Company as required pursuant to para A of Schedule V of the SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 is disclosedseparately in the Financial Statements of the Company.
Directors and Key Managerial Personnel
Mr. Mahendra K. Daga shall retire at the forthcoming Annual General Meeting and beingeligible has offered himself for reappointment.
The first term of Ms. Tanuja Joshi as an Independent Director expired on 02ndNovember 2019. Ms. Tanuja Joshi has given her consent to act as an Independent directorfor a further term of five years from 03rd November 2019 to 02ndNovember 2024. The Nomination & Remuneration Committee and the Board of Directorshave subject to the approval of the Members approved the appointment of Ms. Tanuja Joshias an Independent Director for a second term from 03.1 1.2019 to 02.1 1.2024. In thisrespect a special resolution forming part of the notice calling 43rd AGM hasbeen proposed to be passed at the AGM.
The present term of appointment of Mr. Mahendra K. Daga is up to 31st March2021 as Chairman & Whole Time Director of the Company. The Nomination and RemunerationCommittee and the Board of Directors have subject to the approval of the members videspecial resolution at the ensuing Annual General Meeting and such other approvals as maybe necessary in this regard approved the reappointment and remuneration of Mr. MahendraK. Daga as Chairman & Whole Time Director of the Company for a further term of threeyears from 01.04.2021 to 31.03.2024. In this respect a special resolution forming part ofthe notice calling 43rd AGM has been proposed to be passed at the AGM.
All the Independent Directors have furnished declarations that they meet the criteriaof independence as laid down under Section 149(6) of the Companies Act 2013 andRegulation 16 (1)(b) of SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015.
Statement regarding Integrity Expertise and Experience of Independent Directors
In the opinion of the Board the Independent Directors possess Very Good rating inrespect of clear sense of value and integrity and have requisite expertise and experiencein their respective fields. As regards the online proficiency self-assessment testconducted by Indian Institute of Corporate Affairs it is yet to be undertaken by theIndependent Directors.
Number of meetings of the Board
The Board met four times during the financial year the details of which are providedin the Corporate Governance Report which forms part of this Annual Report. The interveninggap between any two meetings was within the period prescribed by the Companies Act 2013and SEBI (Listing Obligations & Disclosure Requirements) Regulations 2015.
Directors Rs 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 312020 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 2020 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 2020 have been prepared ona 'going concern Rs basis;
(e) that internal financial controls were in place and that such internal financialcontrols 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 two Independent Directors namely Mr. Sameer Kamboj(Chairman) Mr. P.M. Mathai (Member) and one Non Independent- Non Executive Director Mr.K.M. Pai (Member). All the recommendations made by the Audit Committee were accepted bythe Board.
Investor Education & Protection Fund
Pursuant to Section 124(6) of the Companies Act 2013 during the period under reviewthe Company has transferred 28113 equity shares of Rs 10/- each to Investor Education& Protection Fund in respect of which the dividends remained unpaid/ unclaimed forseven consecutive years i.e. from 2011-12 to 2017-18.
Nomination and Remuneration Policy
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 available on the website of the Company athttps://www.orientbell.com under the heading Investor Relations.
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 Board ofDirectors reviews the risks appurtenant to the Company periodically and a statement ofrisks is mentioned under the head Management Discussion and Analysis Report which formspart of this Annual Report.
The Risk Management Policy as approved by the Board is uploaded on the Company'swebsite https://www.orientbell. com under the heading Investor Relations.
Vigil Mechanism cum Whistle Blower Policy
The Company has in place Vigil Mechanism cum Whistle Blower Policy as per theprovisions of Regulation 22 of SEBI (Listing Obligations & Disclosure Requirements)Regulations 2015 and section 177(9) of the Companies Act 2013. The Policy deals with theinstances of unethical behavior-actual or suspected fraud or violation of the Company'sCode of Conduct. It provides for a mechanism for safeguarding a Whistle Blower against thevictimization of Director(s)/ Employees and allows to approach the Chairman of the AuditCommittee of the Company with the protected disclosure. The Whistle Blower may alsoapproach the CEO of the Company for speedier enquiry. The Vigil Mechanism cum WhistleBlower Policy of the Company is uploaded on the Company's website https://www.orientbell.com under the heading Investor Relations.
Corporate Social Responsibility
The Corporate Social Responsibility Committee comprises Mr. Madhur Daga (Chairman) Ms.Tanuja Joshi and Mr. Sameer Kamboj (Members). The Committee has formulated and recommendedto the Board a Corporate Social Responsibility Policy ("CSR Policy) indicatingthe activities to be undertaken by the Company which has been approved by the Board. TheCSR Policy may be accessed on the Company's website at https:// www.orientbell.com underthe heading Investor Relations.
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 directly and also through M/s Godavari Foundation a Trust registered underSection 12A of the Income Tax Act 1961 (registration no. DIT(E) 268-69/8E/196/90-91).
The Company undertakes initiatives in compliance with Schedule VII to the Act andguidelines circulars issued by the Government from time to time.
The average net profit of the Company computed as per Section 198 of the Act duringthe three immediately preceding financial years (i.e. 2016-17 2017-18 and 2018-19) was Rs217881646/-. During the year under review the Company has spent Rs 4500133/- on CSRactivities against Rs 4357633/- (2% of average net Profits of 3 immediately previousfinancial years).
The Annual Report on CSR activities is appended as Annexure 1 to the Board'sReport.
Conservation of Energy Technology Absorption Foreign Exchange Earnings and Outgo
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 2 to theBoard's Report.
Evaluation of the Board its Committees and individual Directors
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 (EmployeeStock Option Scheme and Employee Stock Purchase Scheme) Guidelines 1999 and Companies(Share Capital and Debentures) Rules 2014 is appended as Annexure 3 to the Board'sReport.
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.
As per the provisions of section 134 (3) (a) the Annual Return of the Company isdisclosed on the website of the Company https://www.orientbell.com under the headingInvestor Relations.
Subsidiaries Associates and Joint Ventures
Your Company has no Subsidiary or Joint Venture. By virtue of the control as definedunder Section 2(6) of the Companies Act 2013 your Company has two Associate Companiesviz. M/s Proton Granito Private Limited and M/s Corial Ceramic Private Limited. No newCompany has become or ceased to be the subsidiary associate or joint venture during theyear under review. The Board of Directors has reviewed the affairs of associatescompanies. In accordance with Section 129(3) of the Companies Act 2013 the consolidatedfinancial statements of the company and its associate companies have been prepared whichforms part of this Annual Report. A Report on the performance and financial position ofeach of the associates companies included in the Consolidated Financial Statement andtheir contribution to the overall performance of the Company is appended in the prescribedformat AOC-1 as Annexure 4 to the Board's Report.
Particulars of Employees
The information as per Section 1 97 read with Rule 5 of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 is appended as Annexure 5 to theBoard's Report.
In terms of the provisions of Section 197(12) of the Companies Act 2013 read withRules 5(2) and 5(3) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 a statement showing the names of employees and other particularsof the top ten employees and employees drawing remuneration in excess of the limits asprovided in the said rules are set out in the Board's Report as an addendum thereto.However in terms of provisions of the first proviso to Section 136(1) of the CompaniesAct 2013 the Annual Report is being sent to the members of the Company excluding theaforesaid information. The said information is available for inspection at the RegisteredOffice of the Company during working hours and any member interested in obtaining suchinformation may write to the Company Secretary and the same will be furnished on request.
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 on22nd September 2017 to hold office from the conclusion of 40th AGMtill the conclusion of 45th AGM to be held in the year 2022.
Auditors Rs Report
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. There is nooffence of fraud reported by the Statutory Auditors under section 143(12) of the CompaniesAct 2013.
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.
Compliance with Secretarial Standards issued by ICSI
The Secretarial Standards issued by the Institute of Company Secretaries of India(ICSI) have been duly complied with by the Company.
Internal Financial Control System
The Company has well in place the Internal Financial Control Framework which isindependently evaluated from time to time by in-house audit function for necessaryimprovement wherever required. The detail in respect of adequacy of internal financialcontrols with reference to the financial statements is mentioned under the head ManagementDiscussion and Analysis Report which forms part of this Annual Report.
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 complied with the provisions relating to the constitution of InternalComplaints Committee and is also having a Policy on Prohibition Prevention and Redressalof Sexual Harassment of Women at Workplace and matters connected therewith or incidentalthereto covering all the aspects as contained under the "The Sexual Harassment ofWomen at Workplace (Prohibition Prevention and Redressal) Act 2013. Your Directorsfurther states that during the year under review no case was received by the InternalComplaints Committee under the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013.
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 wish to place on record their appreciation for dedicated service andcontribution made by the employees of the Company at all levels. Your Directors would alsolike to place on record their appreciation for the continued co-operation and supportreceived by the Company during the year from its customers suppliers bankers financialinstitutions business partners and other stakeholders.
| || |
For and on behalf of Board of Directors of Orient Bell Limited
|Place : New Delhi ||Madhur Daga ||P.M. Mathai |
|Date: 17th June 2020 ||Managing Director ||Director |