Orient Beverages Ltd.
|BSE: 507690||Sector: Others|
|NSE: N.A.||ISIN Code: INE247F01018|
|BSE 00:00 | 23 Jul||72.15||
|NSE 05:30 | 01 Jan||Orient Beverages Ltd|
Orient Beverages Ltd. (ORIENTBEVERAGES) - Director Report
Company director report
To The Shareholders
Your Directors have pleasure in presenting the Annual Report andAudited Accounts of your Company for the year ended 31st March 2020:
FINANCIAL RESULTS :
(" in 000)
Your Directors have recommended a dividend @5% i.e. " 0.50 perequity share of " 10/- each for the financial year ended 31st March 2020 amountingto " 1081 thousand. The dividend payout is subject to approval of the members at theensuing Annual General Meeting.
TRANSFER TO RESERVE:
The Directors doesn't propose to transfer any amount to reserve duringthe year.
OPERATIONS AND STATE OF COMPANY'S AFFAIRS:
The Company's Revenue from operations have increased from "692689 thousand in the FY 2018-19 to " 779786 thousand in the FY 2019-20. Sale ofBeverages has increased from " 643638 thousand in the FY 2018-19 to " 762900thousand in the FY 2019-20 showing an increase of 18.53%. In spite of increase inturnover the total Comprehensive Income of the Company has decreased from " 20420thousand in the FY 2018-19 to " 12243 thousand in the FY 2019-20 because in the FY2018-19 the Company has received a sum of " 18426 thousand as arrear rent pursuantto settlement of a long dispute with a tenant. Hence comparing previous year'sfinancial results excluding arrear rent financial results for the year under review areencouraging.
Leasehold rights of the Company in a property situated at 225C A. J.C. Bose Road Kolkata has expired on 11th May 2019. Negotiations for renewal of the leasebetween the landlord and the Company are going on. The Company's rental income hasgot a big hit due to expiry of lease.
The spread of COVID-19 and consequent nationwide lockdown has severallyaffected sales profit and overall performance of the Company but we are struggling hardto minimise the loss and achieve the best possible results in the current year.
SUBSIDIARY COMPANIES :
Sharad Quench Pvt. Ltd. (SQPL) : SQPL a wholly owned subsidiary ofthe Company has completed the construction of a "Packaged Drinking Water"project and commenced production of packaged drinking water with effect from 22ndFebruary 2020 at Sankrail Howrah W.B. Financial Statements of SQPL for the FY 2019-20has been duly considered in the Consolidated Financial Statements presented in this AnnualReport of the Company.
Satyanarayan Rice Mill Pvt. Ltd. (SRMPL) : SMRPL is engaged in thebusiness of packaged drinking water and has Plant
at P.O. Pandua Dist. - Hooghly W.B. Financial Statements of SRMPL forthe FY 2019-20 has been duly considered in the Consolidated Financial Statements presentedin this Annual Report of the Company. It is expected that there should be a sizebleincrease in the Group turnover and income with the working of said subsidiary companies inthe coming time.
Salient features of the financial statements of said subsidiaryCompanies have been attached along with the Annual Report in the Form AOC-1.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT:
Management discussion and analysis report for the year under review asstipulated under Regulation 34(2)(e) of the Securities and Exchange Board of India(Listing Obligations and Disclosure Requirements) Regulations 2015 is attached with thisReport and marked as Annexure - I.
EXTRACT OF ANNUAL RETURN:
Pursuant to Section 92(3) of the Companies Act 2013 read with Rule12(1) of the Companies (Management and Administration) Rules 2014 an extract of theAnnual Return for the financial year ended 31st March 2020 in the prescribed Form MGT- 9is attached with this Report and marked as Annexure - II.
Sri Ballabha Das Mundhra Executive Director (DIN: 01162223) retires byrotation at the ensuing Annual General Meeting and being eligible offers himself forre-appointment. An appropriate resolution for his appointment is being placed forconsideration of the members at the ensuing Annual General Meeting.
The present term of Sri Narendra Kumar Poddar as Chairman (being Wholetime Director); Sri Akshat Poddar as Managing Director and Sri Ballabha Das Mundhra asExecutive Director (being Whole time Director) expired on 31st March 2020. Your Directorspropose their re-appointment for another term as mentioned in the relevant Resolutionswith effect from 1st April 2020 for a period of 5(five) consecutive years.
None of the Directors is disqualified for appointment/re-appointmentunder Section 164 of the Companies Act 2013. DECLARATION UNDER SECTION 149(7) OF THECOMPANIES ACT 2013:
The Company has received declarations from Dr. Gora Ghose (DIN:00217079) and Sri Vivek Vardhan Agarwalla (DIN: 00674395) that they meet the criteria ofIndependence as prescribed under Section 149(6) of the Companies Act 2013.
FORMAL ANNUAL EVALUATION:
The Nomination and Remuneration Committee of the Board has devisedcriteria for evaluation of the performance of Directors. The Board has evaluated its ownperformances and that of its Committees and all individual directors i.e. both Independentand Non-Independent. All the Directors of the Company are found to be persons of havingknowledge and experience in their respective area and their association with the Companyis considered to be beneficial to the Company.
COMPANY'S POLICY ON APPOINTMENT AND REMUNERATION OF DIRECTORS:
The Board of Directors of the Company has adopted a Remuneration Policyin consultation with its Nomination and Remuneration Committee for determiningqualifications positive attributes and independence of directors and criteria fordirectors' appointment and remuneration.
The main features of the Policy are as follows:
The Company while constituting the Board shall draw members fromdiverse fields such as finance law administration management marketing manufacturingoperations or other disciplines related to the Company's business. There shall be nodiscrimination on the basis of gender while determining the Board composition.
A Director shall be a person of integrity who possessesrelevant expertise and experience. He/she shall uphold ethical standards of integrity andprobity and act objectively and constructively. He/she shall exercise his/herresponsibilities in a bona-fide manner in the interest of the Company. Devote sufficienttime and attention to his/her professional obligations for informed and balanced decisionmaking. Assist the Company in implementing the best corporate governance practices.
The objective of the policy is to have a compensation frameworkthat will reward and retain talent.
The remuneration will be such as to ensure that the correlationof remuneration to performance is clear and meets appropriate performance benchmarks.
KEY MANAGERIAL PERSONNEL:
Pursuant to Section 203 of the Companies Act 2013 following officialsare the Key Managerial Personnel of the Company:
i. Sri Narendra Kumar Poddar Chairman;
ii. Sri Akshat Poddar Managing Director;
iii. Sri Ballabha Das Mundhra Executive Director;
iv. Sri Arun Kumar Singhania Chief Financial Officer and v Sri JiyutPrasad Company Secretary.
NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS:
The Board of Directors met 12(twelve) times during the year underreview. The dates of such meetings were 12th April 2019 30th May 2019 22nd July 201914th August 2019 2nd September 2019 14th October 2019 13th November 2019 10thDecember 2019 26th December 2019 10th January 2020 13th February 2020 and 26thFebruary 2020.
Pursuant to the requirements of Schedule IV to the Companies Act 2013and the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 aseparate Meeting of the Independent Directors of the Company was also held on 20thDecember 2019 without the presence of non-independent directors and members of themanagement to review the performance of non-independent directors and the Board as awhole the performance of the Chairperson of the Company and also to assess the qualityquantity and timeliness of flow of information between the Company management and theBoard.
DIRECTORS' RESPONSIBILITY STATEMENT:
Pursuant to the provisions of Section 134(5) the Companies Act 2013the Directors hereby confirm and state that:
i. In the preparation of annual accounts for the financial year ended31st March 2020 the applicable accounting standards have been followed along with properexplanation relating to material departures
ii. They have selected such accounting policies and applied themconsistently and made judgement and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company at the end of thefinancial year and of the profit of the Company for that period;
iii. They have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;
iv. They have prepared the annual accounts on a going concern basis;
vi. They have devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems are adequate and operatingeffectively.
M/s D. Mitra & Co. Chartered Accountants (ICAI Firm Regn. No.328904E) were appointed as Statutory Auditors of the Company for a period of 5(five)years with effect from financial year 2017-18 who shall hold office from the conclusionof the 56th Annual General Meeting till the conclusion of the 61st Annual General Meetingof the Company. M/s D. Mitra & Co. Chartered Accountants have confirmed theirwillingness and eligibility in terms of the provisions of Section 141 of the CompaniesAct 2013 the Chartered Accountants Act 1949 and rules or regulations made there underto continue as Auditors of the Company.
Further the Ministry of Corporate Affairs (MCA) vide notification dated7th May 2018 has done away with the requirement of ratification of appointment ofStatutory Auditors at every Annual General Meeting as per the first proviso of Section139 of the
Companies Act 2013 and the Companies (Audit and Auditors) AmendmentRules 2018. Accordingly the Company is not required to pass any resolution pertaining toratification of the appointment of Statutory Auditors in the ensuing Annual GeneralMeeting.
The Independent Auditors' Reports for the financial year ended 31stMarch 2020 does not contain any qualification reservation or adverse remark.
Pursuant to Section 204 of the Companies Act 2013 read with Rule 9 ofthe Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 theCompany had appointed M/s Manoj Shaw & Co. Practising Company Secretaries asSecretarial Auditor for conducting the Secretarial Audit of the Company for the financialyear 2019-20. The Secretarial Auditors' Report received from said Auditors forms part ofthis Report and marked as Annexure - III. There are no qualifications or adverseremarks in their Report.
Pursuant to the provisions of Section 148 of the Companies Act 2013read with the Companies (Cost records and audit) Rules 2014 Cost Audit is not applicableto the Company.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS:
Particulars of loans given by the Company have been disclosed in theNotes to the Financial Statements for the year under review. The Company has not given anyguarantee or provided security in connection with a loan taken by any other person.Particulars of investments made by the Company have been disclosed in the Notes toFinancial Statements for the year under review.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES:
All the transactions with related parties entered during the year underreview were in the ordinary course of business and on the arm's length basis and the samehas been duly approved by the Audit Committee. However there was no material contract orarrangement or transaction other than arm's length basis entered with a related partyduring the year under review. Hence disclosure in Form AOC- 2 is not required.
INFORMATION PURSUANT TO SECTION 134(3)(m) OF THE COMPANIES ACT 2013READ WITH RULE 8 OF THE COMPANIES (ACCOUNTS) RULES 2014:
(A) Conservation of energy:
i. Steps taken or impact on conservation of energy:
Installation of Industrial Process Chiller with Automatic PetBlow Moulding Machine for Blowing Plant to upgrade the output system.
Installation of new Pet Blow Machine for 5 Litre pack in BlowingPlant to save time and energy.
Installation of Shrink Wrapping Machine for packing of finishedgoods to save time and energy.
The lighting system in the factory has been upgraded andmodified to use of LED lights to reduce consumption of energy.
ii. The steps taken by the Company for utilising alternate sources ofenergy:
The Company is making maximum use of natural lighting during daytime by using transparent roof sheets.
iii. The capital investment on energy conservation equipments:
A sum of " 1295 thousand was spent towards acquisition ofenergy conservation equipments during the year under review.
(B) Technology Absorption:
i. The efforts made towards technology absorption:
Technology absorption is a continuous process. The Company keepstrack of new machines and upgrade its plant and machinery with the latest availabletechnology.
ii. The benefits derived like product improvement cost reductionproduct development or import substitution:
Improved productivity and consequent reduction in the cost ofproduction.
iii. In case of imported technology (imported during the last threeyears reckoned from the beginning of the financial year)
iv. The expenditure incurred on research and development:
Being Franchisee of M/s Bisleri International Private Limitedthe Company is adopting technological guidelines provided by its Principal from time totime and thus research and development of technology is automatically taken care of. Hencethere is no expenditure incurred on research and development during the year.
(C) Foreign exchange earnings and outgo:
Your Company did not have any foreign exchange earnings during the yearunder review. The foreign exchange outgo was " 2804 thousand on account oftravelling and other expenses.
DEVELOPMENT AND IMPLEMENTATION OF RISK MANAGEMENT POLICY:
The Board has developed and implemented a risk management policy of theCompany identifying therein the elements of risk and concern that may threaten theexistence of the Company which entail the recording monitoring and controlling ofCompany's risks and addressing them comprehensively and empirically.
The Risk Management system aims to:
i. Address our Company's strategies operations and compliances andprovide a unified and comprehensive perspective;
ii. Establish the risk appetite;
iii. Be simplistic and intuitive to facilitate a speedy and appropriateidentification of potential and actual risks and its communication;
iv. Seek escalation of the identified risk events to the appropriatepersons to enable a timely and satisfactory risk response; v Reduce surprises and lossesforesee opportunities and improve deployment of resources; and
vi. Develop a mechanism to manage risks.
CORPORATE SOCIAL RESPONSIBILTY:
Provisions of Section 135 of the Companies Act 2013 are not applicableto the Company. Hence disclosure as per Annexure given in the Companies (Corporate SocialResponsibility Policy) Rules 2014 has not been made here.
LISTING OF SHARES AND LISTING FEE:
The equity shares of the Company are listed on The Calcutta StockExchange Ltd. and BSE Limited. The listing fee for the year 2020-21 has already been paidto the both Stock Exchanges.
CORPORATE GOVERNANCE REPORT:
The provisions of Regulation 15(2) read with Regulation 27 of theSecurities and Exchange Board of India (Listing Obligations and Disclosure Requirements)Regulations 2015 are not applicable to the Company. Hence report on Corporate Governancefor the financial year 2019-20 is not attached herewith.
The Company has not accepted any deposits from the public under Section73 of the Companies Act 2013 read with the Companies (Acceptance of deposit) Rules 2014.
The present composition of the Audit Committee of the Company is asunder:
The Company Secretary acts as Secretary of the Committee. There is nosuch recommendation of the Audit Committee which has not been accepted by the Boardduring the year under review.
ESTABLISHMENT OF VIGIL MECHANISM:
The Company has established a vigil mechanism/ whistle blower policy.The policy allows intimation by any director or employee or any other stakeholder to thedesignated officer in good faith of misconduct or unethical or improper activity through awritten communication. Audit Committee oversees the vigil mechanism for disposal of thecomplaint. Direct access to the chairman of the Audit Committee is also allowed inexceptional cases. The vigil mechanism/ whistle blower policy is available on Company'swebsite www.obl.org.in.
PARTICULARS OF EMPLOYEES:
Particulars of employees pursuant to Section 197(12) of the CompaniesAct 2013 read with Rule 5 of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 are attached herewith and marked as Annexure - IV.
INTERNAL FINANCIAL CONTROL SYSTEMS:
The Company has adopted guidelines for ensuring orderly and efficientInternal Financial Controls as required under the provisions of the Companies Act 2013.The Audit Committee after considering the views of Statutory Auditors and InternalAuditors has found that such Internal Financial Controls commensurate with the size andoperations of the Company are adequate and operating efficiently. The Audit Committee inconsultation with the Internal Auditors formulates the scope function and methodologyfor conducting the internal audit. The Internal Financial Controls system is satisfactoryas per evaluation of the Audit Committee.
Following disclosures are made under the Companies (Accounts) Rules2014:
(i) The financial summary or highlights are discussed at the beginningof this report;
(ii) There is no change in the nature of business;
(iii) There is no significant and material order was passed by theregulators or courts or tribunals impacting the going concern status and the Company'soperations in future.
Your Directors wish to express their grateful appreciation for theco-operation and support received from customers vendors shareholders financialinstitutions banks regulatory authorities and the society at large. Deep appreciation isalso recorded for the dedicated efforts and contribution of the employees at all levelsas without their focus commitment and hard work the Company's consistent growth wouldnot have been possible despite the challenging environment.