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Orient Beverages Ltd.

BSE: 507690 Sector: Others
NSE: N.A. ISIN Code: INE247F01018
BSE 00:00 | 15 Feb 84.50 -0.45
(-0.53%)
OPEN

84.50

HIGH

84.90

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84.50

NSE 05:30 | 01 Jan Orient Beverages Ltd
OPEN 84.50
PREVIOUS CLOSE 84.95
VOLUME 202
52-Week high 140.00
52-Week low 65.25
P/E 7.57
Mkt Cap.(Rs cr) 18
Buy Price 76.60
Buy Qty 100.00
Sell Price 84.50
Sell Qty 6.00
OPEN 84.50
CLOSE 84.95
VOLUME 202
52-Week high 140.00
52-Week low 65.25
P/E 7.57
Mkt Cap.(Rs cr) 18
Buy Price 76.60
Buy Qty 100.00
Sell Price 84.50
Sell Qty 6.00

Orient Beverages Ltd. (ORIENTBEVERAGES) - Director Report

Company director report

To The Shareholders

Your Directors have pleasure in presenting the Annual Report and Audited Accounts ofyour Company for the year ended 31st March 2018:

FINANCIAL RESULTS : (Rs in 000)
Particulars Standalone Consolidated
2017-18 2016-17 2017-18
Profit / (Loss) before Depreciation & Taxation 26032 25092 26032
Less : Depreciation and Amortization Expense 13263 12397 13263
Tax Expenses
-Current Tax 3200 1332 3209
-Deferred Tax Expenses/(Credit) (763) 7029 (771)
-Tax for Earlier years (1503) 429 (1503)
934 8790 935
Profit after Depreciation and Taxation 11835 3905 11834
Other Comprehensive Income (Net of Tax) (10) (675) (10)
Total Comprehensive Income for the year 11825 3230 11824

DIVIDEND:

Your Directors have recommended a dividend @ 8% i.e. " 0.80 per equityshare of " 10/- each for the financial year ended 31st March 2018 amountingto " 2084 thousand (Inclusive of dividend tax of " 355 thousand). The dividend payout is subject to approval of the members at the ensuing Annual GeneralMeeting.

TRANSFER TO RESERVE:

The Directors doesn't propose to transfer any amount to reserve during the year.

INDIANACCOUNTING STANDARDS (Ind-AS):

The Ministry of Corporate Affairs (MCA) vide its notification in the Official Gazettedated February 16 2015 notified the Indian Accounting Standards (Ind-AS) applicable tocertain classes of companies. Ind-AS has replaced the existing Indian GAAP prescribedunder Section 133 of the Companies Act 2013 read with Rule 7 of the Companies (Accounts)Rules 2014. The Company has adopted Indian Accounting Standard (Ind-AS) with effect from1st April 2017 with a transition date of April 1 2016. Accordingly financialstatements of the Company and consolidated financial statements were prepared for thefinancial year ended 31st March 2018 with comparative data for the year ended March 312017 in compliance with 'Ind-AS'.

OPERATIONS AND STATE OF COMPANY'S AFFAIRS :

The Company's Revenue from operations have increased from " 476737thousand in the FY 2016-17 to " 535439 thousand in the FY 2017-18.Sale ofBeverages has increased from " 446260 thousand in the FY 2016-17 to "506380 thousand in the FY 2017-18 showing an increase of 13.5%. Total ComprehensiveIncome of the Company has also increased from " 3230 thousand in the FY2016-17 to " 11825 thousand in the FY 2017-18. The total comprehensive incomehas been mainly increased due to decrease in tax expenses. Desired results could not beachieved due to increase in the cost of material and manpower without correspondingincrease in the sale price of our products since sale price is fixed by our principalM/s Bisleri International Pvt. Ltd.

Leasehold rights of the Company in a property situated at 225C A. J. C. Bose RoadKolkata is going to expire in the next financial year. The Company is in the negotiationswith the landlord for renewal of the lease; however outcome of the negotiation cannot beascertained at this stage. The Company has received settlement proposal from a tenantnamely M/s Income Tax Appellate Tribunal against a long pending dispute in the matter ofincrease in rent. The Company is in the process of executing necessary documents forsettlement and withdrawal of court case filed by it. A good increase in the rental incomeof the Company is expected up on completion of settlement process. The Directors hope fora better year ahead in the current year subject to the stable market conditions.

SUBSIDIARY COMPANIES:

Sharad Quench Pvt. Ltd. (SQPL): The Company had promoted a wholly owned subsidiarySQPL on 29th March 2017 to construct and operate a packaged drinking water project atP.O. Sankrail Dist. Howrah West Bengal. SQPL has drawn its first Financial Statementsfor the period from 29th March 2017 (Date of Incorporation) to 31st March 2018 and thesame has been duly considered in the Consolidated Financial Statements presented in theAnnual Report of the Company for the year 2017-18. Salient features of the financialstatements of said subsidiary has been also attached along with the Annual Report in theForm AOC-1.

Satyanarayan Rice Mill Pvt. Ltd. (SRMPL): The Company has acquired 100 percentEquity Shares of SRMPL on 3rd April 2018 as a result the said SRMPL has become whollyowned subsidiary of Orient Beverages Ltd. SRMPL is engaged in the business of packageddrinking water and has Plant at P.O. Pandua Dist. Hooghly West Bengal. FinancialStatements of SRMPL will be consolidated with that of Orient Beverages Ltd. from thefinancial year 2018-19 onwards as required by the provisions of Section 129 of theCompanies Act 2013. It is expected that there should be a sizeable increase in the Groupturnover and income with the working of said subsidiary companies in the coming time.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT :

Management discussion and analysis report for the year under review as stipulatedunder Regulation 34(2)(e) of the Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015 is attached with this Reportand marked as Annexure - I.

EXTRACT OF ANNUAL RETURN:

Pursuant to Section 92(3) of the Companies Act 2013 read with Rule 12(1) of theCompanies (Management and Administration) Rules 2014 an extract of the Annual Return forthe year ended 31st March 2018 in the prescribed Form MGT- 9 is attached with this Reportand marked as Annexure - II.

DIRECTORS:

Smt. Sarita Tulsyan (DIN : 05285793) Non-Executive Director retires by rotation atthe ensuing Annual General Meeting and being eligible offers herself for re-appointment.An appropriate resolution for her appointment is being placed for consideration of themembers at the ensuing Annual General Meeting.

Sri Ganpat Lal Agarwalla Non-Executive Director has resigned from the Board ofDirectors of the Company with effect from 26th March 2018. The Board of Directors hasplaced on record its sincere appreciation and gratitude for the valuable contribution madeby Sri Agarwalla during his association with the Company as a Director.

None of the Directors is disqualified for appointment/re-appointment under Section 164of the Companies Act 2013.

DECLARATION UNDER SECTION 149(7) OF THE COMPANIES ACT 2013:

The Company has received declarations from Dr. Gora Ghose (DIN: 00217079) Sri AnilKumar Poddar (DIN: 00304837) and Sri Vivek Vardhan Agarwalla (DIN: 00674395) that theymeet the criteria of Independence as prescribed under Section 149(6) of the Companies Act2013.

FORMALANNUAL EVALUATION:

The Nomination and Remuneration Committee of the Board has devised criteria forevaluation of the performance of Directors. The Board has evaluated its own performancesand that of its Committees and all individual directors i.e. both Independent andNon-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 Policy in consultationwith its Nomination and Remuneration Committee for determining qualifications positiveattributes and independence of directors and criteria for directors' appointment andremuneration.

The main features of the Policy are as follows:

• The Company while constituting the Board shall draw members from diverse fieldssuch as finance law administration management marketing manufacturing operations orother disciplines related to the Company's business. There shall be no discrimination onthe basis of gender while determining the Board composition.

• A Director shall be a person of integrity who possesses relevant expertise andexperience. He/she shall uphold ethical standards of integrity and probity and actobjectively and constructively. He/she shall exercise his/her responsibilities in abona-fide manner in the interest of the Company. Devote sufficient time and attention tohis/her professional obligations for informed and balanced decision making. Assist theCompany in implementing the best corporate governance practices.

• The objective of the policy is to have a compensation framework that will rewardand retain talent.

• The remuneration will be such as to ensure that the correlation of remunerationto performance is clear and meets appropriate performance benchmarks.

KEY MANAGERIAL PERSONNEL:

Pursuant to Section 203 of the Companies Act 2013 following officials are the KeyManagerial 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 Jiyut Prasad CompanySecretary.

NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS:

The Board of Directors met 8(Eight) times during the year under review. The dates ofsuch meetings were 20th April 2017 30th May 2017 25th July 2017 14th September2017 14th December 2017 30th January 2018 13th February 2018 and 19th March 2018.

Pursuant to the requirements of Schedule IV to the Companies Act 2013 and the SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 a separate Meeting ofthe Independent Directors of the Company was also held on 4th December 2017 without thepresence of non-independent directors and members of the management to review theperformance of non-independent directors and the Board as a whole the performance of theChairperson of the Company and also to assess the quality quantity and timeliness of flowof information between the Company management and the Board.

DIRECTORS' RESPONSIBILITY STATEMENT:

Pursuant to the provisions of Section 134(5) the Companies Act 2013 the Directorshereby confirm and state that: i. In the preparation of annual accounts for the financialyear ended 31st March 2018 the applicable accounting standards have been followed alongwith proper explanation relating to material departures ii. They have selected suchaccounting policies and applied them consistently and made judgement and estimates thatare reasonable and prudent so as to give a true and fair view of the state of affairs ofthe Company at the end of the financial year and of the profit of the Company for thatperiod; iii. They have taken proper and sufficient care for the maintenance of adequateaccounting 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; v.They have laid down internal financial controls to be followed by the Company and thatsuch internal financial controls are adequate and are operating effectively; and vi. Theyhave devised proper systems to ensure compliance with the provisions of all applicablelaws and that such systems are adequate and operating effectively.

AUDITORS:

M/s D. Mitra & Co. Chartered Accountants (ICAI Firm Regn. No. 328904E) wereappointed as Statutory Auditors of the Company for a period of 5(five) years with effectfrom financial year 2017-18 who shall hold office from the conclusion of the 56th AnnualGeneral Meeting till the conclusion of the 61st Annual General Meeting of the Company. M/sD. Mitra & Co. Chartered Accountants have confirmed their willingness and eligibilityin terms of the provisions of Section 141 of the Companies Act 2013 the CharteredAccountants Act 1949 and rules or regulations made there under to continue as Auditors ofthe Company.

AUDITORS' REPORTS:

The Independent Auditors' Reports for the financial year ended 31st March 2018 doesnot contain any qualification reservation or adverse remark.

SECRETARIALAUDIT:

Pursuant to Section 204 of the Companies Act 2013 read with Rule 9 of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hadappointed M/s Manoj Shaw & Co. Practising Company Secretaries as Secretarial Auditorfor conducting the Secretarial Audit of the Company for the financial year 2017-18. TheSecretarial Auditors' Report received from said Auditors forms part of this Report andmarked as Annexure - III. There are no qualifications or adverse remarks in theirReport.

COSTAUDIT:

Pursuant to the provisions of Section 148 of the Companies Act 2013 read with theCompanies (Cost records and audit) Rules 2014 Cost Audit is not applicable to theCompany.

PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS:

Particulars of loans given by the Company have been disclosed in the Notes to theFinancial Statements for the year under review. The Company has not given any guarantee orprovided security in connection with a loan taken by any other person. Particulars ofInvestments made by the Company have been disclosed in the Notes to Financial Statementsfor the year under review.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES:

All the transactions with related parties entered during the year under review were inthe ordinary course of business and on the arm's length basis and the same has been dulyapproved by the Audit Committee. However there was no material contract or arrangement ortransaction other than arm's length basis entered with a related party during the yearunder review. Hence disclosure in Form AOC- 2 is not required.

INFORMATION PURSUANT TO SECTION 134(3)(m) OF THE COMPANIES ACT 2013 READ WITH RULE 8OF THE COMPANIES (ACCOUNTS) RULES 2014: (A) Conservation of energy: i. Steps taken orimpact on conservation of energy:

• Installation of Advanced technology Auto Blow Moulding Machines for blowingplant to save time and power.

• Lighting system in the factory has been upgraded to use more LED lights andthereby saving in the cost of energy. ii. The steps taken by the Company for utilisingalternate sources of energy:

• The Company is making maximum use of natural lighting during day time by usingtransparent roof sheets. iii. The capital investment on energy conservation equipments:

• A sum of "6213 thousand was spent towards acquisition of energyconservation equipments during the year under review.

(B) Technology Absorption: i. The efforts made towards technology absorption:

• Technology absorption is a continuous process. The Company keeps track of newmachines and upgrade its plant and machinery with the latest available technology. ii. Thebenefits derived like product improvement cost reduction product development or importsubstitution:

• Improved productivity and consequent reduction in the cost of production. iii.In case of imported technology (imported during the last three years reckoned from thebeginning of the financial year)

Details of technology Year of Whether the technology imported import been fully absorbed Not Applicable If not fully absorbed areas where absorption has not taken place and the reasons thereof

iv. The expenditure incurred on research and development:

• Being Franchisee of M/s Bisleri International Private Limited the Company isadopting technological guidelines provided by its Principal from time to time and thusresearch and development of technology is automatically taken care of. Hence there is noexpenditure 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 year under review.The foreign exchange outgo was "2776 thousand on account of travelling andother expenses.

DEVELOPMENT AND IMPLEMENTATION OF RISK MANAGEMENT POLICY:

The Board has developed and implemented a risk management policy of the Companyidentifying therein the elements of risk and concern that may threaten the existence ofthe Company which entail the recording monitoring and controlling of Company's risks andaddressing them comprehensively and empirically.

The Risk Management system aims to: i. Address our Company's strategies operations andcompliances and provide a unified and comprehensive perspective; ii. Establish the riskappetite; iii. Be simplistic and intuitive to facilitate a speedy and appropriateidentification of potential and actual risks and its communication; iv. Seek escalation ofthe identified risk events to the appropriate persons to enable a timely and satisfactoryrisk response; v. Reduce surprises and losses foresee opportunities and improvedeployment of resources; and vi. Develop a mechanism to manage risks.

CORPORATE SOCIAL RESPONSIBILTY:

Provisions of Section 135 of the Companies Act 2013 are not applicable to the Company.Hence disclosure as per Annexure given in the Companies (Corporate Social ResponsibilityPolicy) Rules 2014 has not been made here.

LISTING OF SHARES AND LISTING FEE:

The equity shares of the Company are listed on The Calcutta Stock Exchange Ltd. and BSELimited. The listing fee for the year 2018-19 has already been paid to the both StockExchanges.

CORPORATE GOVERNANCE REPORT:

The provisions of Regulation 15(2) read with Regulation 27 of the Securities andExchange Board of India (Listing Obligations and Disclosure Requirements) Regulations2015 are not applicable to the Company. Hence report on Corporate Governance for thefinancial year 2017-18 is not attached herewith.

DEPOSITS:

The Company has not accepted any deposits from the public under Section 73 of theCompanies Act 2013 read with the Companies (Acceptance of deposit) Rules 2014.

AUDIT COMMITTEE:

The present composition of the Audit Committee of the Company is as under:

Sl. No. Name of the Director Category of the Director Designation
i. Sri Anil Kumar Poddar Independent Director Chairman
ii. Dr. Gora Ghose Independent Director Member
iii. Sri Ballabha Das Mundhra Executive Director Member
iv. Sri Vivek Vardhan Agarwalla Independent Director Member

The Company Secretary acts as Secretary of the Committee. There is no suchrecommendation of the Audit Committee which has not been accepted by the Board during theyear under review.

ESTABLISHMENT OF VIGIL MECHANISM:

The Company has established a vigil mechanism/ whistle blower policy. The policy allowsintimation by any director or employee or any other stakeholder to the designated officerin good faith of misconduct or unethical or improper activity through a writtencommunication. Audit Committee oversees the vigil mechanism for disposal of the complaint.Direct access to the chairman of the Audit Committee is also allowed in exceptional cases.The vigil mechanism/ whistle blower policy is available on Company's websitewww.obl.org.in.

PARTICULARS OF EMPLOYEES:

Particulars of employees pursuant to Section 197(12) of the Companies Act 2013 readwith Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 are attached herewith and marked as

Annexure - IV.

INTERNAL FINANCIAL CONTROL SYSTEMS:

The Company has adopted guidelines for ensuring orderly and efficient InternalFinancial Controls as required under the provisions of the Companies Act 2013. The AuditCommittee after considering the views of Statutory Auditors and Internal Auditors hasfound that such Internal Financial Controls commensurate with the size and operations ofthe Company are adequate and operating efficiently. The Audit Committee in consultationwith the Internal Auditors formulates the scope function and methodology for conductingthe internal audit. The Internal Financial Controls system is satisfactory as perevaluation of the Audit Committee.

DISCLOSURES:

Following disclosures are made under the Companies (Accounts) Rules 2014:

(i) The financial summary or highlights are discussed at the beginning of this report;

(ii) There is no change in the nature of business;

(iii) There is no significant and material order was passed by the regulators or courtsor tribunals impacting the going concern status and the Company's operations in future.

APPRECIATION:

Your Directors wish to express their grateful appreciation for the co-operation andsupport received from customers vendors shareholders financial institutions banksregulatory authorities and the society at large. Deep Appreciation is also recorded forthe dedicated efforts and contribution of the employees at all levels as without theirfocus commitment and hard work the Company's consistent growth would not have beenpossible despite the challenging environment.

For and behalf of the Board
N. K. Poddar
Kolkata 30th May 2018 Chairman