Your Directors take pleasure in presenting the Fourteeth Annual Report and the auditedaccounts for the financial year ended March 31 2017.
|Financial Results || ||( Rs in lakhs) |
|Particulars ||Year ended March 31 2017 ||Year ended March 31 2016* |
|Gross Income ||70694.20 ||75967.14 |
|Profit before finance cost depreciation taxation and exceptional item ||5512.22 ||4886.06 |
|Finance Cost ||1334.67 ||1880.90 |
|Depreciation ||1732.42 ||1707.82 |
|Profit before taxation ||2445.13 ||1297.33 |
|Tax expense ||1340.84 ||652.93 |
|Profit after tax ||1104.29 ||644.40 |
|Earning per share ( Rs ) ||7.84 ||4.43 |
Operations and Business Review
The financial year 2016-17 has been a mix of good and not so good happenings. It was adifficult year for the tile industry and real estate sector. While your Company has notgrown in terms of Sales Turnover but has registered a growth of 88% in the Profit BeforeTax (PBT) from Rs 1297 Lakhs in the previous year to Rs 2445 Lakhs in the current year.The drop in fuel prices and major savings in finance cost by better working capitalmanagement helped us to post reasonable profits during the year under review despite dropin sale numbers.
Your Company is constantly working on its brand building and product display for ourtiles. During the year under review your Company has opened Company Owned CompanyOperated Boutiques as well as thirty Franchise Boutiques at very conspicuous locationsacross the Country viz. Chandigarh Pune (Maharashtra) Bhatinda (Punjab) Agra (U.P.)Ranchi (Jharkhand) Sangrur (Punjab) Varanasi (U.P.) Haldwani (Uttrakhand) Patiala(Punjab) and many more. The opening of such Boutiques at prestigious locations indifferent parts of Country will pave way for the professionals as well as retail customersto drop in and make their selection of tiles out of huge range as per their likings.
Your Company has increased engagements with architects channel partners and tileexperts manifold. The social media campaigns have been made live since January 2017 andare seeing success in the online space. These campaigns your Company feels will continuewith full force during times to come. Your Company has also appointed Print media andAdvertising agency which will support brand promotion of the Company and is believed toadd value in customer pull and strengthen our brand. Your company has made arrangementswith the local bus operators in various metropolitan cities carrying our branding and alsoinstalled hoardings in such cities at prominent places like bus shelters etc.
Several new designs / SKUs have been introduced by the Company during the year underreview. Your Company has launched 600 mm x 600 mm GVT and PGVT tiles in over 50 designsthat are now manufactured at Sikandrabad (U.P.) plant. Digital pavers manufactured at yourCompany's Hoskote plant have been well accepted by the market. The product portfolio ofyour Company is much more complete and compares favorably with the best in the Industry.New products like digital pavers and PGVT/ DGVT from our plants have widened our productportfolio. Various attractive schemes against annual / quarterly sales target launched bythe Company from time to time are welcomed by the channel partners.
Your Company continued its drive to map the Government (GPS) and Private (PPS) Projectsand sell more and more of its High Value Products in these projects. Your Company hasrepresented itself before various GPS and PPS Projects and successfully got its brand"ORIENTBELL" approved and listed with many Government Departments and PSUs. Afew of such Departments and PSUs include NBCC NTPC CPWD State PWDs Military EngineerServices (MES) State Housing Boards State Police Housing Boards Airports Authority ofIndia Delhi Metro Air India HUDCO Engineers India Limited ONGC Chennai Metro DelhiUniversity Aam Aadmi Mohalla Clinic Aam Aadmi Polyclinic Delhi Government SchoolsAIIMS (Raibareilly) etc. Your Company has also bagged orders from prestigious privateProjects like Thapar University Bennett University PVR Cinemas HLL Hospital MedantaHospital Simplex Nagarjuna Construction Company Ansals L&T DLF Gannon DunkerleyExperion Ajnara etc.
Your Directors have recommended a dividend of Rs 0.50 per equity share for thefinancial year ended March 31 2017. The total outgo of dividend (inclusive of tax of Rs14.44 lakhs) would amount to Rs 85.39 lakhs as against Rs 84.26 lakhs in the previousyear. The dividend payout is subject to approval of members at the ensuing Annual GeneralMeeting.
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
We propose to transfer Rs 7895888/- to Securities Premium and Rs 612721894/- fromRevaluation Reserve to General Reserve and Rs 377329/- from Employee Stock OptionReserve to General Reserve.
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 ofthe Audit Committee is obtained for the transactions which are repetitive in nature. Astatement of all Related Party Transactions is placed before the Audit Committee for itsreview on a quarterly basis specifying the nature value and terms and conditions of thetransactions. The Company has adopted a Related Party Transactions Policy. The Policy asapproved by the Board is uploaded on the Company's website. Details of the transactionswith Related Parties are provided in the accompanying financial statements. There were notransactions during the year which would require to be reported in Form AOC-2.
Directors and Key Managerial Personnel
During the year under review Mr. N.R. Srinivasan's term of office as IndependentDirector of the Company ended on 29.09.2016. His outstanding contribution and support isappreciated by the Board of Directors.
All Independent Directors have given their respective declarations that they meet thecriteria of independence as laid down under Section 149(6) of the Companies Act 2013 andSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.
Mr. K.M. Pai shall retire at the forthcoming Annual General Meeting and being eligiblehas offered himself for reappointment.
The present term of appointment of Mr. Mahendra K. Daga as Chairman & ManagingDirector of the Company will end on 31st March 2018. The Nomination andRemuneration Committee and the Board of Directors have subject to the approval of themembers vide special resolution at the ensuing Annual General Meeting and such otherapprovals as may be necessary in this regard approved the reappointment and remunerationof Mr. Mahendra K. Daga as Chairman & Managing Director of the Company for a furtherterm of three years from 01st April 2018 to 31st March 2021.
Number of meetings of the Board
The Board met four 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 312017 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 2017 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 2017 have been prepared ona going concern' 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 three Independent Directors namely Mr. Sameer Kamboj(Chairman) Mr. R.N. Bansal (Member) and Mr. P.M. Mathai (Member) and one Non Independent-Executive Director Mr. K.M. Pai (Member). All the recommendations made by the AuditCommittee were accepted 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 Clause 49 of the Listing Agreement the Company hasformed a Risk Management Policy. This policy seeks to create transparency minimizeadverse impact on the business objectives and enhance the Company's competitive advantage.The policy defines the risk management approach across the enterprise at various levelsincluding documentation and reporting.
The Risk Management Policy as approved by the Board is uploaded on the Company'swebsite http://www.oblcorp.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 http://www.oblcorp.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 athttp://www.oblcorp.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 to the Act.
The average net profit of the Company computed as per Section 198 of the Act duringthe three immediately preceding financial years was Rs 9.64 Crores. It was hence requiredto spend at least Rs 19.30 Lakhs on CSR activities during the Financial Year 2016-17being 2% of the average net profits of the three immediately preceding financial years.During the year the Company has spent Rs 19.50 Lakhs on CSR activities.
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) Regulations2015 your Company has formulated and adopted Code of Conduct for prevention ofInsider Trading' and Code of practices and procedures for fair disclosure ofUnpublished Price Sensitive Information' (hereinafter collectively referred to as"OBL Code of Conduct"). The OBL Code of Conduct is uploaded on the website ofthe company http://www.oblcorp.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 (EmployeeStock Option Scheme and Employee Stock Purchase Scheme) Guidelines 1999 is appended as Annexure4 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 acertificate 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 S. R. Dinodia & Co. LLP Chartered Accountants New Delhi Statutory Auditors ofyour Company will hold office till the conclusion of ensuing Annual General Meeting. Interms of the provisions contained under Section 139 of the Companies Act 2013 andCompanies (Audit and Auditors) Rules 2014 M/s S.R. Dinodia & Co. LLP having servedthe Company as Statutory Auditors for more than 10 consecutive years cannot bereappointed.
The Board of Directors have identified another audit firm namely M/s B.R. Gupta &Co. Chartered Accountants and after considering and reviewing its credentials appointedthe said firm as Company's audit firm for a term of five years from the conclusion offorthcoming AGM till the conclusion of the AGM to be held in the year 2022. The Companyhas received a letter from M/s B.R. Gupta & Co. confirming that their appointment ifmade would be within the limits prescribed under section 139 and 141 of the CompaniesAct 2013 and that they are not disqualified for appointment as audit firm of the Company.
The Board of Directors recommends the appointment of M/s B.R. Gupta & Co. asStatutory Auditors from the conclusion of ensuing Annual General Meeting till theconclusion of 45th Annual General Meeting to be held in the year 2022 inaccordance with the provisions of Section 139 of the Companies Act 2013 and rules madethere under at such remuneration as shall be fixed by the Board of Directors of theCompany.
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 statesthat during the year under review no case was filed under the Sexual Harassment of Womenat Workplace (Prevention Prohibition 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 acknowledges with gratitude and wish to place on record their deepappreciation of continued support and co-operation received by the Company from thevarious Government authorities Shareholders Bankers Lenders Business AssociatesDealers Customers Financial Institutions and Investors during the year. Your Directorsalso place on record their deep appreciation of the dedication and commitment of yourCompany's employees at all levels and look forward to their continued support in thefuture as well.
| ||For and on behalf of Board of Directors |
| ||of Orient Bell Limited |
|Place : New Delhi ||Madhur Daga ||K.M. Pai |
|Date: 22nd May 2017 ||Managing Director ||Executive Director |
| || ||& CFO |