The Board of Directors are pleased to present the Annual Report on thebusiness and operations of the Company along with the audited financial statements for thefinancial year ended March 31 2019.
Summary of Financial Performance
|Company's financial performance during the financial year ended March 31 2019: || || |
| ||( र In crores) |
|Particulars ||2018-19 ||2017-18 |
|Revenue || || |
|Total Revenue ||1864.40 ||1625.58 |
|Other Revenue ||9.53 ||5.51 |
|Total Revenue ||1873.93 ||1631.09 |
|Expenses || || |
|Operating Expenditure ||1723.12 ||1489.04 |
|Depreciation and amortization expense ||23.05 ||19.75 |
|Total Expenses ||1746.17 ||1508.79 |
|Profit before finance cost and tax ||127.76 ||122.30 |
|Finance costs ||22.86 ||24.47 |
|Profit before tax (PBT) ||104.90 ||97.83 |
|Tax ||35.59 ||33.80 |
|Profit for the year ||69.31 ||64.03 |
|Other Comprehensive Income ||(0.44) ||(0.97) |
|Profit brought forward from last year ||47.15 ||11.86 |
|Transfer to General Reserve ||(15.00) ||(15.00) |
|Dividend on equity shares ||(21.22) ||(10.61) |
|Corporate Dividend Tax ||(4.36) ||(2.16) |
|Balance carried to balance sheet ||75.44 ||47.15 |
|Earnings per Share ||3.27 ||3.02 |
Operational and Financial Performance
Orient Electric registered a revenue of `1864.40 crores for thefinancial year ended March 31 2019 vs. `1625.58 crores in the previous year. EBITDA(Earnings before Interest Tax Depreciation and Amortisation) stood at `150.14 crores upby 6.81% compared to the previous year on the back of growing business operations withinterim headwinds of commodity and currency pressures and rising input costs.
Depreciation was higher by 16.71% due to progressive capitalizationduring the year under review and still remaining in an asset-lite model. The Finance Costwas reduced by 6.58%. Profit before Tax (Before Exceptional Items) stood at `104.23crores up by 8.18% compared to the previous year. Net Profit for the financial year endedMarch 31 2019 stood at `69.31 crores as compared to `64.03 crores in the previous year.
The Board of Directors are pleased to recommend a final dividend of`0.50 per equity share of face value of `1 each for the financial year ended March 312019 subject to the approval of shareholders at the ensuing Annual General Meeting (AGM)to be held on July 16 2019. The total dividend for the financial year ended March 312019 aggregates to `1 per equity share of face value of `1/- each which includes interimdividend of `0.50 per equity share declared during the financial year 2018-19.
The Register of Members and Share Transfer Books of the Company willremain closed from Saturday July 13 2019 to Tuesday July 16 2019 both days inclusivefor determining the entitlement of the shareholders to the final dividend for thefinancial year ended March 31 2019 and for annual book closure.
Listing of Shares
With the objective of unlocking value for the shareholders theConsumer Electric Business of Orient Paper & Industries Limited ("OPIL")through the Scheme of Arrangement ("Scheme") between OPIL and Orient ElectricLimited (the "Company") transferred and vested into the Company with effectfrom the appointed date of March 1 2017. As part of the Scheme and pursuant to theexemption granted by the Securities and Exchange Board of India from the application ofRule 19(2)(b) of the Securities Contracts (Regulations) Rules 1957 the equity shares ofthe Company got listed on National Stock Exchange of India Limited ("NSE") andBSE Limited ("BSE") and trading in the equity shares started w.e. f. May14 2018 on both these stock exchanges.
During the financial year 2018-19 there was no change in theoutstanding paid-up share capital of the Company.
Orient Electric Employee Stock Option Scheme - 2019
In line with growth objective of the Company and with the intention toattract motivate and retain the high quality talent at the senior level the Companyduring the financial year 2018-19 as part of its Long Term Incentive Programmeintroduced Orient Electric Employee Stock Option Scheme - 2019' (ESOP Scheme -2019). Under the ESOP Scheme - 2019 upto 3000000 Stock Options can be granted to theeligible employees of the Company which upon exercise are convertible into equal numberof equity shares of the Company of the face value of `1 each at a grant price to bedecided by the Nomination and Remuneration Committee. Though there is no holding orsubsidiary company of the Company at present however keeping in mind the futureprospects benefits under the ESOP Scheme - 2019 included the potential eligibleemployee(s) of any future holding/ subsidiary company(ies) of the Company. In accordancewith the provisions of Section 62(1)(b) of the Companies Act 2013 ("Act") theCompanies (Share Capital and Debentures) Rules 2014 and the Securities and Exchange Boardof India (Share Based Employee Benefits) Regulations 2014 ("ESOP Regulations")ESOP Scheme 2019 is approved by the shareholders through Postal Ballot processeffective from March 13 2019. Nomination and Remuneration Committee of the Board ofDirectors of the Company is authorised to implement and administer the ESOP Scheme - 2019.
During the financial year 2018-19 a total of 1998309 Stock Optionswere granted to the eligible senior employees of the Company under the ESOP Scheme - 2019.There is no change in the ESOP Scheme - 2019 during the financial year 2018-19 postimplementation. The ESOP Scheme - 2019 is in compliance with ESOP Regulations and theSecurities and Exchange Board of India (Listing Obligations and Disclosure Requirements)Regulations 2015 as amended ("Listing Regulations"). A certificate from thestatutory auditors on the implementation of the ESOP Scheme - 2019 in compliance with ESOPRegulations will be placed at the ensuing Annual General Meeting ("AGM") forinspection by the shareholders.
Further details required to be disclosed as per Regulation 14 of ESOPRegulations can be accessed on the website of the Company http://www.orientelectric.com.
Management Discussion and Analysis Report
As stipulated under Regulation 34 of the Listing RegulationsManagement Discussion and Analysis Report for the year under review is presented in aseparate section forming part of this Annual Report.
Your Company always places major thrust on managing its affairs withdiligence transparency responsibility and accountability thereby upholding the importantdictum that an organisation's corporate governance philosophy is directly linked toits performance.
The Company is committed in adopting and adhering to established bestcorporate governance practices. The Board as a body understands and respects its fiduciaryrole and responsibilities towards the stakeholders of the Company and society at largeand strives to serve their interests resulting in creation of value for all stakeholders.
A report on corporate governance alongwith a certificate from M/s. S.R.Batliboi & Co. LLP Chartered Accountants Statutory Auditors of the Companyconfirming the compliance of the conditions of corporate governance as stipulated underRegulation 34 of Listing Regulations is attached to this Annual Report.
Holding Subsidiary and Joint Venture Companies
During the financial year 2018-19 the Company had no holdingsubsidiary or joint venture company.
Director's Responsibility Statement
Pursuant to Section 134(3)(c) of the Act the Board of Directors tothe best of their knowledge belief and ability confirm the following:
a. In the preparation of the Annual Accounts for the financial yearended March 31 2019 the applicable Accounting Standards have been followed along withproper explanation relating to material departures;
b. The Directors have selected such accounting policies and appliedthem consistently and made judgments and estimates that are reasonable and prudent so asto give a true and fair view of the state of affairs of the Company at the end of thefinancial year and of the profit and loss of the Company for that period;
c. The Directors have taken proper and sufficient care for themaintenance of adequate accounting records in accordance with the provisions of this Actfor safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities;
d. The Directors have prepared these Annual Accounts on a going concernbasis; e. The Directors have laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively; and
f. The Directors have devised proper systems to ensure compliance withthe provisions of all applicable laws and that such systems were adequate and operatingeffectively.
Directors and Key Managerial Personnel
Mr. Desh Deepak Khetrapal Non-Executive Director of the Companyretiring by rotation at the forthcoming AGM and being eligible offers himself forre-appointment. His brief profile and other details as required under the provisions ofthe Act and Rules made thereunder Secretarial Standard issued by the Institute of CompanySecretaries of India and Listing Regulations are provided in the Notice to the AGM.
The Board of Directors recommends re-appointment of Mr. DeshDeepak Khetrapal as a Non- Executive Director liable to retire by rotation at theensuing AGM of the Company.
Declaration by Independent Directors
All Independent Directors of the Company have given declarationconfirming that they meet the criteria of independence as prescribed both under Section149(6) of the Act and Regulations 16 and 25 of the Listing Regulations.
Familiarization Programme for Independent Directors
The Company has adopted a policy on familiarization programme forIndependent Directors. All the Independent Directors were briefed with an overview of theCompany's business operations organization structure and products of the Company. Detailsof the familiarization programme for Independent Directors are available on the website ofthe Company and can be accessed at the following link:https://www.orientelectric.com/images/investors/ familiarisation-programme.pdf.
Pursuant to the provisions of the Act Listing Regulations andDirectors' Performance Evaluation Policy of the
Company the Nomination and Remuneration Committee of the Board haslaid down the manner for effective performance evaluation of the Board it'scommittees and individual directors. During the year performance evaluation was carriedout by the Board under the supervision of Nomination and Remuneration Committee.Independent Directors carried out the performance evaluation of Non-Independent Directorsthe Board as a whole and the Chairman of the Board after taking into account the views ofExecutive Directors and Non-Executive Directors. The Board evaluated the performance ofindividual Directors the Board as a whole and Committees thereof after taking the viewsof Executive and Non-Executive Directors on structured questionnaire.
Performance of the Board was evaluated by each Director on theparameters such as its role and responsibilities business risks contribution to thedevelopment of strategy and effective risk management understanding of operationalprogrammes availability of quality information in a timely manner regular evaluation ofprogress towards strategic goals and operational performance adoption of good governancepractices adequacy and length of meetings etc.
Board Committees were evaluated by the respective Committee Members onthe parameters such as its role and responsibilities effectiveness of the Committeevis-a-vis assigned role appropriateness of Committee composition timely receipt ofinformation by the Committee effectiveness of communication by the Committee with theBoard Senior Management and Key Managerial Personnel.
Performance of the Chairperson was evaluated by the IndependentDirectors on the parameters such as demonstration of effective leadership contribution tothe Board's work communication with the Board use of time and overall efficiency ofBoard meetings quality of discussions at the Board meetings process for settling Boardagenda etc.
Directors were evaluated individually by the Board of Directors (exceptby the Director being evaluated) on the parameters such as his/ her preparedness at theBoard meetings attendance at the Board meetings devotion of time and efforts tounderstand the Company and its business quality of contribution at the Board meetingsapplication of knowledge and experience while considering the strategy effectiveness offollow-up in the areas of concern communication with Board Members Senior Management andKey Managerial Personnel etc. The performance evaluation of the Non IndependentDirectors was also carried out by the Independent Directors. Nomination and RemunerationCommittee reviews the implementation of performance evaluation criteria.
Board of Directors and its Committees
Company's Board consists of six Directors comprising of ExecutiveNon-Executive and Independent Directors including one Woman Independent Director. As perregulatory requirements and with a view to have focused deliberation the Board hasconstituted following Committees: a. Audit Committee b. Nomination and RemunerationCommittee c. Stakeholders' Relationship Committee d. Corporate SocialResponsibility Committee and e. Risk Management Committee.
In the last financial year 2018-19 the Board of Directors met fivetimes. The intervening gap between the meetings was within the limits prescribed under theAct and Listing Regulations.
Details of the composition of the Board and its Committees terms ofreference and roles of these Committees along with the meetings of the Board andCommittees held during the year under review are stated in the Corporate GovernanceReport forming part of this Annual Report.
Audit Committee of the Company has been duly constituted by the Boardof Directors pursuant to the provisions of the Act and Listing Regulations. During theyear under review all recommendations made by the Audit Committee to the Board ofDirectors were accepted by the Board.
Dividend Distribution Policy
As per the list of top 500 listed companies based on marketcapitalization as on March 31 2019 released by NSE and BSE your Company falls under thecategory of top 500 listed companies. Therefore as per the requirement of Regulation
43A of the Listing Regulations your Company has formulated a dividenddistribution policy. The policy is appended to this Report as Annexure I and can also beaccessed at the following web link: https://www.orientelectric.com/images/investors/dividend-distribution-Policy.pdf.
Vigil Mechanism / Whistle Blower Policy
The Vigil Mechanism of your Company is governed by Whistle BlowerPolicy' ("Policy") and Code of Conduct for Directors and Senior Management("Code") through which Directors and Employees are provided a platform toreport to the Company Secretary and/or Chairman of the Audit Committee on a confidentialbasis any practices or actions believed to be inappropriate or illegal as per theCompany's Policy and Code. It is afirmed that no person has been denied access to theAudit Committee.
The Whistle Blower Policy is available on the website of the Companyand can be accessed through the following web link:https://www.orientelectric.com/images/investors/ whistle-blower-policy.pdf.
During the year under review one compliant was received under thePolicy. The Whistle Blower Committee consisting of senior managerial personnel includingManaging Director & CEO investigated the matter. Based on the investigationdisciplinary action was taken against two employees who were found to be involved in theirregularity. The details and status of the said compliant was placed before the AuditCommittee and Board of Directors of the Company.
Nomination and Remuneration Policy
Nomination and Remuneration Policy ("Remuneration Policy") ofthe Company is designed to create a high-performance culture. It enables the Company toattract retain and motivate Directors on the Board Key Managerial Personnel and theSenior Management Officers. Our business model promotes customer centricity and requiresemployee mobility to address project needs. The Remuneration Policy supports such mobilitythrough pay models that are at par with industry standards.
The Company pays remuneration by way of salary benefits perquisitesand allowances (fixed component) variable pay and other benefits under Long TermIncentive Programme (variable component) to its Managing Director & CEO KeyManagerial Personnel and the Senior Management
Officers. Annual increments are recommended by the RemunerationCommittee and are effective form April 1 of every year. Based on the performance of theCompany viz a viz the concerned person the Remuneration Committee decides and recommendsto the Board of Directors the variable amount payable to the Managing Director & CEOKey Managerial Personnel and the Senior Management Officers. The Remuneration Committeealso decides and recommends to the Board of Directors the remuneration payable to theNon - Executive Directors. Non - Executive Directors are paid remuneration in the form ofcommission apart from sitting fees for attending meetings of the Board and Committeesthereof.
The shareholders at the AGM of the Company held on July 16 2018approved payment of remuneration in the form of commission to the Non-Executive Directorswith the ceiling of 1% of net profits of the Company as computed under Section 198 of theAct for a period of five years effective from the financial year 2017-18. RemunerationCommittee decides and recommends to the Board of Directors the quantum and distributionof such commission amongst the Non-Executive Directors.
Details of sitting fees paid to the Non-Executive Directors forattending meetings of the Board and Committees thereof and also the commission for thefinancial year 2018-19 are provided in the Corporate Governance Report annexed to thisAnnual Report.
The Nomination and Remuneration Policy of the Company containing thecriteria for payment of remuneration to Executive and Non-Executive Directors includingindependent Directors as adopted by the Board of Directors is available on the website ofthe Company and can be accessed through the following web link: https://www.orientelectric.com/images/investors/nomination-remuneration-policy.pdf.
The key objectives of this Policy include:
(i) guiding the Board of Directors in relation to appointment andremoval of Directors Key Managerial Personnel and Senior Management.
(ii) specifying the manner for effective evaluation of the performanceof members of the Board the Board as a whole and Committees thereof and review itsimplementation and compliance.
(iii) recommending to the Board the remuneration in whatever formpayable to the Directors Key Managerial Personnel & Senior Management Personnel.
Particulars of Directors and Employees
The statement of Disclosure on the Remuneration of Directors and KeyManagerial Personnel as per the provisions of Section 197 of the Act and Rule 5 of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 is appendedas Annexure II to this Report.
M/s S.R. Batliboi & Co. LLP Chartered Accountants (ICAI FirmRegistration Number 301003E/ E300005) are the Statutory Auditors of the Company who wereappointed for a period of five years i.e. to hold office from the conclusion of the 1stAGM till the conclusion of 6th AGM of the Company to be held in the calendar year 2022. Inaccordance with the Companies (Amendment) Act 2017 made effective from May 7 2018 bythe Ministry of Corporate Affairs the appointment of Statutory Auditors is now notrequired to be ratified by the shareholders of the Company at every AGM. Thereforeratification of their appointment is not being proposed for the shareholder's approval atthe AGM.
Auditors' Report on the financials of the Company for thefinancial year 2018-19 is self-explanatory and therefore does not require furthercomments and explanation. There is no reservation or qualification in the Auditor'sReport. During the year under review the Statutory Auditors have not reported any matterunder Section 143(12) of the Act and therefore no details are required to be disclosedunder Section 134 (3) (ca) of the Act.
In terms of the provisions of Section 148 of the Act read withCompanies (Cost Records and Audit) Amendment Rules 2014 the Board of Directors of yourCompany have on the recommendation of the Audit Committee appointed Mr. SomnathMukherjee Cost Accountant in Practice (M. No. F5343) as Cost Auditors toconduct the audit of cost records of your Company for the financial year 2019-20 at aremuneration as mentioned in the Notice convening the AGM. As required under the Actratification of the remuneration payable to the Cost Auditor for audit of the cost recordsfor the financial year 2019-20 by shareholders is being sought at the ensuing AGM.
The Company has received declaration from Mr. Somnath Mukherjee CostAccountant to the effect that his reappointment would be within the limits prescribedunder Section 141(3)(g) of the Act and that he is not disqualified for such re-appointmentwithin the meaning of Section 141 of the Act.
The Secretarial Audit was carried out by M/s A. K. Labh & Co.Practicing Company Secretaries (C.P. No. 3238) for the financial year 2018-19. The reportgiven by the Secretarial Auditor is annexed as Annexure III and forms integral part ofthis Report. There is no qualification reservation or adverse remark in the SecretarialAudit Report. During the financial year 2018-19 the Secretarial Auditor had not reportedany matter under Section 143 (12) of the Act therefore no detail is required to bedisclosed under Section 134 (3)(ca) of the Act.
In terms of Section 204 of the Act read with the Companies (Appointmentand Remuneration of Managerial Personnel) Rules 2014 the Board of Directors on therecommendation of the Audit Committee appointed M/s A. K. Labh & Co. PracticingCompany Secretaries (C.P. No. 3238) as the Secretarial Auditor of the Company for thefinancial year 2019-20. Your Company had received their written consent confirming thattheir appointment will be in accordance with the applicable provisions of the Act andrules framed thereunder.
Compliance with Secretarial Standards
During the year under review your Company has complied with therespective Secretarial Standards issued by the Institute of Company Secretaries of Indiaon Board Meetings General Meetings and Dividend.
Particulars of Loans Guarantees and Investments
During the financial year 2018-19 your Company has not given any loansprovided any guarantees/securities and made investments which are covered under theprovisions of Section 186 of the Act.
During the financial year 2018-19 your Company has not accepted anydeposits from public under Chapter V of the Act and as such no amount on account ofprincipal or interest on deposits from public was outstanding as on March 31 2019.
Related Party Transactions
In line with the requirements of the Act and Listing Regulations yourCompany has formulated a Policy on Related Party Transactions which is available on theCompany's website and can be accessed at the following web link: https://www.orientelectric.com/images/investors/related-party-policy.pdf. This Policy intends toensure that proper approval reporting and disclosure processes are in place for alltransactions between the Company and its Related Parties.
All Related Party Transactions are placed before the Audit Committeefor review and approval. The approval of the Board and shareholders is also takenwherever such approval is required as per the provisions of Section 188 of the Act rulesmade thereunder Regulation 23 of the Listing Regulations and applicable AccountingStandards. Prior omnibus approval is obtained for Related Party Transactions which are ofrepetitive nature.
All Related Party Transactions entered during the financial year2018-19 were in ordinary course of business and at arm's length basis. During theyear under review your Company had not entered into any material related partytransactions i.e. transactions exceeding 10% of the last audited annual consolidatedfinancial statement.
Particulars of contract or arrangements with related parties referredto in Section 188(1) of the Act in the prescribed Form AOC-2 is annexed as Annexure IVto this Report. Shareholders may refer to notes to the Financial Statements for details onRelated Party Transactions.
Disclosure under the Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013
As per the requirement of Sexual Harassment of Women at Workplace(Prevention Prohibition & Redressal) Act 2013 (POSH Act') and rules madethereunder your Company has adopted a policy on prevention prohibition and redressal ofsexual harassment of women at workplace. The Company has also constituted InternalComplaints Committees. While maintaining the highest governance norms the Company hasappointed external independent person who had worked in this area and have the requisiteexperience and knowledge in handling such matters as Member of such Committees. To buildawareness in this area the Company has been conducting induction / awareness programmesin the organisation on a continuous basis.
During the year under review no complaint of sexual harassment wasreceived by the Company. Details as per Section 21 and 22 of the POSH Act are as under:
|Number of cases pending as on the beginning of the financial year ||Nil |
|Number of complaints filed during the financial year ||Nil |
|Number of cases pending as at the end of the financial year ||Nil |
The Company has an elaborated Risk Management framework in place whichhelps in identifying the risks and proper mitigation thereof. During the year underreview as per the requirements of Regulation 21 of the Listing Regulations to review therisk management process of the Company the Board of Directors has also constituted a RiskManagement Committee. The Committee is responsible for reviewing the risk management planand ensuring its effectiveness. The Audit Committee has additional oversight in the areaof financial risks and controls. The major risks identified by the businesses andfunctions are systematically addressed through mitigating actions on a continuing basis.
The senior management team sets the overall tone and risk culture ofthe organization through defined and communicated corporate values clearly assigned riskresponsibilities appropriately delegated authority and a set of processes and guidelineswhich are presented to the Committee and the Board especially with respect to riskassessment and risk minimization procedures. As an organization it promotes strongethical values and high levels of integrity in all its activities which in itself is asignificant risk mitigator.
With the growth strategy in place risk management holds key to thesuccess of our journey of continued competitive sustainability in attaining desiredbusiness objectives. The development and implementation of risk management policy has beencovered in the Management Discussion and Analysis Report which forms part of this AnnualReport.
Internal Financial Controls and their Adequacy
The Company had laid down a set of internal financial controls to befollowed in the business operations. Certain policies and procedures are adopted by theCompany for ensuring the orderly and efficient conduct of its business includingadherence to the Company's policies safeguarding of its assets prevention anddetection of frauds and errors accuracy and completeness of the accounting records andtimely preparation of reliable financial information. Audit Committee and the Board onregular basis evaluates the internal financial control system.
As per the provisions of Section 134(5)(e) of the Act the Directorshave an overall responsibility for ensuring that the Company has implemented robustsystems/ framework of internal financial controls to provide them with reasonableassurance regarding the adequacy and operating effectiveness of controls with regard toreporting operational and compliance risks.
The internal financial controls have been embedded in the businessprocesses. Assurance on the effectiveness of internal financial controls is obtainedthrough management reviews continuous monitoring by functional leaders as well as testingof the internal financial control systems by the internal auditors during the course oftheir audits.
Conservation of Energy Technology Absorption and foreign ExchangeEarnings & Outgo
a) Conservation of Energy
The Company is an energy intensive unit hence alternate source ofenergy may not be feasible. However regular efforts are made to conserve the energy. TheCompany evaluates the possibilities and various alternatives to reduce energy consumption.
b) Technology Absorption
The Company is conscious on implementation of latest technologies inkey working areas. Technology is everchanging and employees of the Company are made awareof the latest working techniques and technologies through workshops group e-mails anddiscussion sessions for optimum utilization of available resources and to improveoperational efficiency.
c) Foreign Exchange Earnings & Outgo
As on March 31 2019 Company has earned a foreign exchange of `85.36crores and foreign exchange outgo was `140.92 crores.
Particulars required under Section 134(3)(m) of the Act read with Rule8 of the Companies (Accounts) Rules 2014 regarding conservation of energy and technologyabsorption is enclosed as Annexure V to this Report.
Change in the Nature of Business of the Company
During the year under review except as stated in this Report there isno change in the nature of business operations of the Company.
Material Development after the end of the year
No material changes and commitments affecting the financial position ofyour Company have occurred between the end of the financial year of the Company to whichthe Financial Statements relate and the date of this Report.
Corporate Social Responsibility
The Board of Directors of your Company has constituted a CorporateSocial Responsibility (CSR) Committee pursuant to the provisions of Section 135(1) of theAct. Composition role and terms of reference of the CSR Committee are stated in theCorporate Governance Report annexed to this Annual Report. The Company has adopted andimplemented a CSR Policy which covers activities prescribed in Schedule VII to the Act andsets out the procedure for making contributions. A copy of the Company's CSR policyis available on the website of the Company and can be accessed through the following weblink: https://www.orientelectric.com/images/investors/corporate-social-responsibility-policy. pdf.
Since the Company was incorporated on October 10 2016 the average netprofit of the Company could be calculated for a period of two preceding financial years asof April 1 2018. Accordingly the minimum spending requirement specified under Section135(5) of the Act was not applicable for the financial year 2018-19.
In accordance with the provisions of Section 134(3)(o) of the Act andRule 9 of the Companies (Corporate Social Responsibility) Rules 2014 a report onCorporate Social Responsibility covering brief extract of the CSR policy of the Company isannexed as Annexure VI to this Report.
Investor Education and Protection Fund
Pursuant to the Scheme the Company had allotted 557238 equity sharesagainst the shares of OPIL which it had transferred to the demat account of InvestorEducation and Protection Fund ("IEPF") Authority for non-encashing of dividendfor last 7 years. As per Section 124 (6) of the Act read with Investor Education andProtection Fund Authority (Accounting Audit Transfer and Refund) Rules 2016 ("theRules") the Company has transferred through corporate action these 557238 equityshares to the demat account of IEPF Authority. Corresponding dividend amount on the saidshares pertaining to financial years 2017-18 (interim and final dividend) and 2018-19(interim dividend) totaling to `835857/- has also been transferred in the designatedbank account of IEPF Authority.
Registrar and Share Transfer Agent
With the objective to improve the shareholders' services and onthe recommendation of the Stakeholders' Relationship Committee the Board ofDirectors at their meeting held on January 28 2019 approved the appointment of KarvyFintech Private Limited as the new Registrar and Share Transfer Agent ("RTA") ofthe Company in place of existing RTA MCS Share Transfer Agent Limited. The appointment ofnew RTA would be effective on the completion of regulatory process and execution ofrequired agreements & documents.
Extract of Annual Return
The extract of annual return in Form MGT-9 as required under theprovisions of Section 92(3) of the Act and Rule 12 of the Companies (Management andAdministration) Rules 2014 is annexed as Annexure VII to this Report. Extract of AnnualReturn has also been placed at the Company's website and can be accessed athttp://www.orientelectric.com/images/ investors/Annual-Report-2018-19.pdf in terms of theprovisions of Section 134(3)(a) of the Act.
Significant and Material Orders Passed by any Regulators or Court
During the year under review no regulator or court has passed anysignificant and material orders impacting the going concern status of the Company and itsfuture operations. However the Company during the year received notice each from NSE andBSE alleging non-compliance of Regulation 29(2) and (3) of Listing Regulations and eachimposing fine of `10000. The Company submitted its response to NSE and BSE clarifyingthat the Company has not made any default in complying with Regulation 29 of the ListingRegulations and requested for waiver of the fine. In the absence of any revert from NSEand BSE the Company paid the fine under protest.
Appreciations and Acknowledgements
Your Directors place on record their deep appreciation to employees atall levels for their hard work dedication and commitment. The enthusiasm and unstintingefforts of the employees have enabled the Company to emerge as a significant player in theindustry.
The Board places on record its appreciation for the support andco-operation your Company has been receiving from its suppliers distributors retailersbusiness partners and others associated with it as its trading partners. Your Companylooks upon them as partners in its progress and has shared with them the rewards ofgrowth. It will be your Company's endeavour to build and nurture strong links withthe trade based on mutuality of benefits respect for and co-operation with each otherconsistent with consumer interests.
Your Directors also take this opportunity to thank all shareholdersclients vendors banks government and regulatory authorities for their continuedsupport.
For and on behalf of the Board of Directors
For Orient Electric Limited
Chandra Kant Birla
New Delhi April 30 2019