Your Directors take pleasure in presenting the Annual Report on business and operationsof your Company along with audited financial statements for the financial year ended March31 2021.
Company's Financial Performance
Key highlights of the financial performance of your Company for the financial year2020-21 is summarised below:
| || ||( Rs in crores) |
|Particulars ||2020-21 ||2019-20 |
|Revenue from operations ||2032.60 ||2061.82 |
|Other Income ||6.27 ||4.09 |
|Total Revenue ||2038.87 ||2065.91 |
|Expenses || || |
|Operating Expenditure ||1813.09 ||1885.40 |
|Depreciation and Amortization Expense ||43.15 ||40.12 |
|Total Expenses ||1856.24 ||1925.52 |
|Profit Before Finance Cost and Tax ||182.63 ||140.39 |
|Finance Costs ||20.73 ||26.12 |
|Profit Before Tax (PBT) ||161.90 ||114.27 |
|Tax ||42.16 ||35.65 |
|Profit After Tax (PAT) ||119.74 ||78.62 |
|Comprehensive Income / (Losses) ||(0.40) ||(0.11) |
|Total comprehensive Income for the year ||119.34 ||78.51 |
|Dividend ||26.52 ||24.40 |
|Corporate Dividend Tax ||NA ||5.02 |
|Transfer to General Reserve ||15.00 ||15.00 |
|Balance carried to Balance Sheet ||434.44 ||338.17 |
|Earnings per Share (Basic) (in Rs) ||5.64 ||3.71 |
The onset of the pandemic since March'20 significantly disrupted the businessactivities in the first half of the financial year and posed high risks of health andwellness for people. After 5-weeks of complete lockdown cautious and gradual resumptionof sales and manufacturing operations happened from May'20 onwards abiding by allpreventive measures and unlocking guidelines prescribed by the government. Your Companyquickly responded to the situation by allowing work from home for all support teams.Partitions were made in the factory assembly lines for distancing of work force. Sales andservice teams were encouraged to maximise use of digital platforms to connect with theircustomers. Clearly defined SOPs were put in place to ensure hygiene and employee safety.
The new normal encouraged the team to re-imagine the workstyle processes andorganisation structure. The team responded with high agility and adaptability thusquickly embracing digital ways of working connecting business partners through socialnetworking media and online video calls continuous website updates with open andproximate retailer information strong digital communication providing Orient Call Centresupport and attending to critical customer service calls. The Company also took severalcost control measures without compromising on long term strategies competency buildingand employee health. The Company experienced high growth in the year from B2C retail ande-commerce channels. Besides Tier 2 and Tier 3 markets also saw a noticeable spike morepronounced for the economy products. Overall all the segments of the Company registeredgood growth year-on-year across all product lines.
As the business activity rebounded from middle of 2nd quarter of thefinancial year 2020-21 with pent-up demand and rural upsurge home appliances and lightingsegments found renewed traction with consumers largely remaining home bound.
The financial statements for the financial year ended March 31 2021 forming part ofthis Annual Report have been prepared in accordance with the Indian Accounting Standards(Ind AS) as notified by the Ministry of Corporate Affairs. The Revenue from operation wasRs 2032.60 crores as against Rs 2061.82 crores in the previous year showing a decreaseof 1.42%. Earnings before Interest Depreciation and Tax increased by 24.89% at Rs 225.25crores as against Rs 180.36 crores in the previous year. Depreciation was higher by 7.55%at Rs 43.15 crores as against Rs 40.12 crores during the previous year due to progressivecapitalization and accounting of leased assets (Rights of Use Assets) under IND AS 116.The net Finance Cost without considering accounting of lease assets under IND AS 116reduced by 23.85% at Rs 16.09 crores as against Rs 21.13 crores during the previous year.Profit Before Tax was Rs 161.90 crores as against Rs 114.27 crores in the previous yearshowing an increase of 41.69%. Profit After Tax (post comprehensive income / loss) was Rs119.34 crores as against Rs 78.51 crores in the previous year showing an increase of52.01%.
Transfer to General Reserve
The Company has transferred an amount of Rs 15 crores to the General Reserve of theCompany during the financial year ended March 31 2021.
During the financial year your Company paid an interim dividend of Rs 0.75 (75%) pershare of face value of Rs 1 each. Your Directors are pleased to recommend a final dividendof Rs 1.25 per share of the face value of Rs 1 each on the Share Capital thereby makingthe total dividend for the financial year 2020-21 to Rs 2.00 (200%) per share of facevalue of Rs 1 each. Payment of final Dividend is subject to approval ofshareholders at the ensuing Annual General Meeting (AGM') and if approved would bepayable to those shareholders whose names appear in the Register of Members as on theclose of business hour on previous day of Book Closure commencement date i.e. July 222021.
The Register of Members and Share Transfer Books of the Company will remain closed fromFriday July 23 2021 to Thursday July 29 2021 both days inclusive for determining theentitlement of the shareholders to the final dividend for the financial year ended March31 2021 and for annual book closure.
In terms of the provisions of the Income Tax Act 1961 as amended by the Finance Act2020 dividend paid or distributed by a company on or after April 01 2020 is taxable inthe hands of the shareholders. The tax shall be deducted at the rates prescribed under theIncome Tax Act 1961 as amended which varies based upon the category and residentialstatus of the shareholder. In accordance with the new provisions the Company deducted taxat source (TDS') at the applicable rates from the payment of final dividend for thefinancial year 2019-20 and interim dividend for financial year 2020-21 that were paidduring the financial year 2020-21. Shareholders are requested to update their residentialstatus KYC and PAN numbers with their depository participants in case of shares held indemat mode and with the Registrar and Share Transfer Agent of the Company in case theshares are held in physical mode for determining the applicable rate of TDS.
The dividend pay-out is in accordance with the Company's Dividend Distribution Policy.
Details of dividend(s) declared/ paid by the Company during the last three financialyears:
| || ||Dividend Percentage || |
|Type of Dividend ||Financial Year 2020-21 ||Financial Year 2019-20 ||Financial Year 2018-19 |
|Interim Dividend ||75% ||65% ||50% |
|Final Dividend ||125%* ||50% ||50% |
|Total ||200% ||115% ||100% |
*Final Dividend for the financial year 2020-21 is subject to approval by shareholdersin the ensuing AGM and will be paid to the entitled shareholders as on book closure datewithin stipulated timeline post approval by the shareholders at the AGM.
Dividend Distribution Policy
Pursuant to Regulation 43A of the Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015 (Listing Regulations')the Company has adopted a Dividend Distribution Policy to determine the distribution ofdividends in accordance with the provisions of applicable laws. The Dividend DistributionPolicy is available on the Company's website and can be accessed at the following weblink:https:// www.orientelectric.com/images/investors/dividend-distribution-Policy.pdf
Particulars of Loans Guarantees and Investments
Company has not given any loans provided any guarantees / security or made investmentsthat are covered under the provisions of Section 186 of the Companies Act 2013(Act') during the financial year ended March 31 2021.
Company has not accepted any deposits from the public under Chapter V of the Actduring the financial year 2020-21 and as such no amount on account of principal orinterest on deposits from public was outstanding as on March 31 2021.
Holding Subsidiary and Joint Venture Companies
During the financial year 2020-21 the Company had no holding subsidiary or jointventure company.
Dubai Office: The Company continues to maintain representative office (Branch Office)in Dubai Multi Commodity Centre free trade zone of Dubai for facilitating business inthe Middle East and Africa for its products and also engaging in active businessdevelopment of new geographies in the international markets.
Material Changes During and After the Year - Impact of Covid 19
There was no material change during the year under review. Further there are nomaterial changes and commitments affecting the financial position of the Company thatoccurred after the close of the financial year under review till the date of this Report.However the global spread of COVID-19 pandemic and the country wide lockdown affected thebusiness operations in the early part of the year. The business however has well managedand risk was mitigated with pent-up demand effective inventory and working capitalmanagement coupled with introduction of new ways of working.
By staying true to its purpose and its values the top-most priority for the Companywas to ensure the safety of its employees. The Company has taken several measures toensure their well-being including leveraging the power of technology to enable them towork from home. For those employees working in sales offices and manufacturing locationstheir safety has been ensured by stringent use of protective gear abiding by socialdistancing norms and taking all safety precautions.
Standing by its core commitment the Company has been navigating through theseunprecedented times by building stronger and deeper relationships with consumers and itspartners and also supporting them at the times of crisis through extended terms and timelypayments.
Detailed information on the impact of COVID 19 has been included under the ManagementDiscussion & Analysis Report forming an integral part of this Annual Report for thefinancial year 2020-21.
Awards & Accolades
For the 2nd consecutive year your Company has been certified as "GreatPlace To Work" in March 2021 for a period of one year starting from March 2021 toFebruary 2022 by Great Place to Work Institute the global authority in workplace cultureassessment and people management practices. Receiving this Award reflects our unwaveringcommitment in creating and fostering a high performance people centric culture.
Your Company improved its rating by moving from Fortune India Next500 companies'to "Fortune India 500" companies. Your Company has also been conferred with ETBest Brand 2020 during the financial year 2020-21.
Directors and Key Managerial Personnel
Mr. Desh Deepak Khetrapal Non-Executive Director and Vice-Chairman of the Company isliable to retire by rotation at the ensuing AGM and being eligible offers himself forre-appointment. The Board of Directors on the recommendation of the Nomination andRemuneration Committee recommends the re-appointment of Mr. Desh Deepak Khetrapal as aNon-Executive Director liable to retire by rotation at the ensuing AGM of the Company.Further as per the terms of appointment Non-Executive and Non-Independent Directors areonly liable to retire by rotation. Brief profile of Mr. Desh Deepak Khetrapal and otherrequirements as per the provisions of the Act and Rules made thereunder SecretarialStandard issued by the Institute of Company Secretaries of India and Listing Regulationsare provided in the Notice to the AGM.
During the year under review there was no change in the Board of Directors and KeyManagerial Personnel of the Company.
The Nomination and Remuneration Policy of the Company empowers the Nomination andRemuneration Committee to formulate a process for effective evaluation of the performanceof Individual Directors Committees of the Board and the Board as a whole. Nomination andRemuneration Committee annually reviews the implementation of performance evaluationcriteria.
The Board formally assesses the performance of its own committees of the Board andindividual Directors. The Board's performance evaluation is based on parameters which interalia include deciding long term strategy rating the composition and mix of Boardmembers discharging of governance and fiduciary duties handling critical and dissentingsuggestions etc. Performance of committees are inter-alia based on compositionof the committee knowledge of and participation by the committee members etc.
The parameters for the performance evaluation of the Directors include contributionmade at the Board meetings attendance instances of sharing best and next practicesdomain knowledge vision strategy engagement with senior management etc.
The Independent Directors at their separate meeting review the performance ofNon-Independent Directors the Board as a whole and the Chairperson of the Company aftertaking into account the views of Executive Director and Non-Executive Directors thequality quantity and timeliness of flow of information between the Company management andthe Board that is necessary for the Board to effectively and reasonably perform theirduties. The Director being evaluated is not present during the discussion.
The Performance Evaluation exercise for the financial year 2020-21 was completed underthe supervision of Nomination and Remuneration Committee. On completion of PerformanceEvaluation exercise it was concluded that the Executive Non-Executive and IndependentDirectors are meeting all the criteria devoting sufficient time in the matters beingplaced for discussion before the Board or Committees thereof. The Board as a whole and allthe Committees of the Board are discharging their responsibilities effectively. The Boardmembers were satisfied about the adequacy of Board processes and the high leadershipskills of the Chairman.
Declaration by Independent Directors
The Independent Directors have confirmed that they meet the criteria of independencelaid down under Section 149(6) of the Act and Regulation 16 (1)(b) of the ListingRegulations and that they are not aware of any circumstance or situation which exist ormay be reasonably anticipated that could impair or impact their ability to dischargetheir duties with an objective independent judgment and without any external influence.Names of all the Independent Directors of the Company are registered with the IndependentDirectors' Databank being maintained by the Indian Institute of Corporate Affairs.Requisite confirmations as per Rule 6 of the Companies (Appointment and Qualification ofDirectors) Rules 2014 as amended have been received from the Independent Directors inthis regard.
The Board of Directors have taken on record the declaration and confirmation submittedby the Independent Directors after undertaking due assessment of the veracity of the sameand is of the opinion that all the Independent Directors of the Company have requiredintegrity experience and expertise.
Familiarization Programme for Independent Directors
The Management of the Company keeps regularly updating the Independent Directors aboutthe Company's policies strategies market conditions new product launches rankingse_cacies of internal financial controls internal and external risks along with mitigationplans compliance and governance structure and other material information relevant forthem to have a clear understanding of their roles rights and responsibilities for thepurpose of contributing significantly towards the growth of the Company. They are givenfull opportunity to interact with senior management personnel and are provided with allthe documents required and/ or sought by them to have a good understanding of the Companyits business model and various operations and the industry of which it is a part. Besidesregulatory changes are briefed to the Board in advance and wherever required expert adviceis additionally arranged to provide comfort and appropriate guidance to the Directors.
The details of the familiarization program are provided in the Corporate GovernanceReport forming an integral part of the Annual Report for the financial year 2020-21.
The initiatives undertaken by the Company in this respect has also been disclosed onthe website of the Company and can be accessed through the following weblink: https://www.orientelectric.com/images/investors/familiarisation-programme.pdf
Director's Responsibility Statement
To the best of their knowledge and belief and according to the information andexplanations obtained in terms of Section 134 of the Act your Directors state that: a.In the preparation of the Annual Accounts for the financial year ended March 31 2021 theapplicable Accounting Standards have been followed along with proper explanation relatingto material departures; b. The Directors have selected such accounting policies andapplied them consistently and made judgments and estimates that are reasonable and prudentso as to give a true and fair view of the state of affairs of the Company at the end ofthe financial year and of the profit and loss of the Company for that period; c. TheDirectors have taken proper and sufficient care for the maintenance of adequate accountingrecords in accordance with the provisions of the Act for safeguarding the assets of theCompany and for preventing and detecting fraud and other irregularities; d. The Directorshave prepared these Annual Accounts on a going concern basis; e. The Directors have laiddown internal financial controls to be followed by the Company and that such internalfinancial controls are adequate and operating effectively; and f. The Directors havedevised proper systems to ensure compliance with the provisions of all applicable laws andthat such systems are adequate and operating effectively.
Particulars of Directors and Employees
Information required pursuant to Section 197(12) of the Act read with Rule 5 of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 is providedas Annexure A to this Report.
Board of Directors and its Committees
As on March 31 2021 the Board of Orient Electric has six Directors comprising ofExecutive Non-Executive and Independent Directors including one Independent WomanDirector.
During the year under review six meetings of the Board of Directors were held. The gapbetween the two consecutive meetings did not exceed the limits prescribed under the Actand Listing Regulations.
The Board of Directors of your Company has constituted following Committees as perrequirements specified under the Act and the Listing Regulations:
1. Audit Committee;
2. Risk Management Committee;
3. Nomination and Remuneration Committee;
4. Stakeholders' Relationship Committee; and
5. Corporate Social Responsibility Committee
During the year under review all recommendations made by these committees were acceptedby the Board of Directors. Details on the composition of the Board of Directors andCommittees thereof terms of reference of the Committees and attendance of Directors inthe Board and Committee meetings are provided in the Corporate Governance Report formingan integral part of this Annual Report.
The Audit Committee comprises of three Independent Directors and one Non-ExecutiveNon-Independent Director viz. Mr. TCA Ranganathan Mr. K Pradeep Chandra and Mrs. AlkaMarezban Bharucha being Independent Directors and Mr. Desh Deepak Khetrapal being Non-ExecutiveNon-Independent Director. Mr. Rakesh Khanna Managing Director & CEO is a permanentinvitee to the Audit Committee. Mr. Saibal Sengupta Chief Financial Officer and Mr.Hitesh Kumar Jain Company Secretary also attends the Audit Committee meetings. Furtherdetails relating to the Audit Committee are provided in the Report on CorporateGovernance forming an integral part of the Annual Report for the financial year 2020-21.During the year under review all recommendations made by the Audit Committee wereaccepted by the Board of Directors.
Meeting of Independent Directors
Pursuant to the provisions of Schedule IV of the Act and the Rules made thereunder ameeting of the Independent Directors of the Company was held on October 27 2020 withoutthe presence of Non-Independent Directors and members of the Management wherein theIndependent Directors discussed among other matters the flow of information to the Boardof Directors leadership strengths and weaknesses governance compliance and performanceof the executive and non-executive members of the Board including the Chairman.
During the year under review no new shares were issued by the Company therefore therewas no change in the Authorised Issued and Paid-Up Share Capital of the Company.
Orient Electric Employee Stock Option Scheme - 2019
The Company had introduced Orient Electric Employee Stock Option Scheme-2019'(ESOP Scheme - 2019') in the
financial year 2018-19 as part of its Long-Term Incentive Programme in line withgrowth objective of the Company and with the intention to attract motivate and retainhigh quality talent at the senior level. The ESOP Scheme - 2019 is in compliance with theSEBI (Share Based Employee Benefits) Regulations 2014 (ESOP Regulations') andListing Regulations.
During the year under review there was no change in the ESOP Scheme 2019. No new stockoption was granted and no stock option granted earlier vested during the financial year2020-21 M/s S.R. Batliboi & Co. LLP Statutory Auditor of the Company certifiesannually that the Company's ESOP Scheme - 2019 has been implemented in accordance with theESOP Regulations and the resolutions passed by the members for the ESOP Scheme 2019. Said certificate from the Statutory Auditors of the Company shall be available forinspection by the members at the ensuing AGM. Information required under the Act and asper Regulation 14 of the ESOP Regulations read with SEBI Circular CIR/CFD/POLICYCELL/2/2015 dated June 16 2015 is available on the Company's website and can beaccessed at the Web-link:https://www.orientelectric.com/images/investors/ESOS-2019-disclosure-31Mar21.pdf
Further details on ESOPs are provided in the notes to accounts of the financialstatements for the financial year 2020-21 forming an integral part of this Annual Report.
In accordance with Section 139 of the Act and the Rules made thereunder M/s S.R.Batliboi & Co. LLP Chartered Accountants (ICAI Firm Registration Number 301003E/E300005) were appointed as the Statutory Auditor of the Company to hold the office for aterm of five years from the conclusion of the first AGM till the conclusion of sixth AGMof the Company to be held in the calendar year 2022 at a remuneration as may be approvedby the Board. Pursuant to the amendment made by the Companies (Amendment) Act 2017 therequirement of yearly ratification by shareholders of appointment of Statutory Auditorshas been done away with. Accordingly the ratification of their appointment is not beingrecommended to the shareholders of the Company at the ensuing AGM.
There is no qualification reservation or adverse remark in the Audit Report on thefinancials of the Company for the financial year ended March 31 2021. Auditor's Report isself-explanatory and therefore does not require further comments and explanation.
The Auditors' Report for the financial year ended March 31 2021 on the financialstatements of the Company forms an integral part of this Annual Report.
The Company has maintained cost records for certain products as specified by theCentral Government under Section 148(1) of the Act. The Board of Directors of the Companyon the recommendations made by the Audit Committee have approved the appointment of Mr.Somnath Mukherjee Cost Accountant in Practice (M. No. 5343) as the Cost Auditor ofthe Company to conduct the audit of cost records for the financial year 2021-22. Mr.Somnath Mukherjee being eligible have consented to act as the Cost Auditor of theCompany for the financial year 2021-22. Mr. Somnath Mukherjee has further certified thathis appointment is within the limits as prescribed under Section 141(3)(g) of the Act andthat he is not disqualified from such appointment within the meaning of the said Act.
The remuneration proposed to be paid to Mr. Somnath Mukherjee subject to ratificationby the shareholders of the Company at the ensuing AGM has been set out in the Notice ofensuing AGM.
The Board of Directors of the Company have appointed M/s A. K. Labh & Co.Practicing Company Secretaries (Certificate of Practice No. 3238) as the SecretarialAuditor to conduct audit of the secretarial records for the financial year 202122pursuant to the provisions of Section 204 of the Act and the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014. As per Sections 139 and 141 of the Actand relevant rules prescribed thereunder Company has received consent from M/s A. K. Labh& Co. to act as the Secretarial Auditor for conducting audit of the secretarialrecords for the financial year ending March 31 2022 confirming that their appointment iswithin the limits laid down by the Act and Rules made thereunder and they are notdisqualified for being appointed as Secretarial Auditors under the provisions ofapplicable laws.
The Secretarial Audit Report for the financial year ended March 31 2021 under Actread with Rules made thereunder and Regulation 24A of the Listing Regulations (includingany statutory modification(s) or re-enactment(s) thereof for the time being in force)is annexed with this report as Annexure B.
Pursuant to the requirements of the SEBI Circular dated February 8 2019 theSecretarial Compliance Report for the financial year ended March 31 2021 in relation tocompliance of all applicable SEBI Regulations and circulars / guidelines issuedthereunder issued by Mr. A. K. Labh (C.P. No. 3238)
Practicing Company Secretary has been submitted to the Stock Exchanges within theprescribed time limit.
There is no qualification observation or adverse remark in the Secretarial AuditReport and Annual Secretarial Compliance Report and the same are self-explanatory and donot call for any further comments.
Reporting by Auditors under Section 143(12) of the Act
During the financial year 2020-21 the Statutory Auditors Secretarial Auditor and CostAuditor of the Company pursuant to the provisions of Section 143(12) of the Act includingrules made thereunder have confirmed that they have not come across any event indicatingcommitment of any fraud by the officers or employees of the Company thus no reportingunder the said provision was required.
Business Responsibility Report
Your Company is mindful of the needs of the communities and works to make a positivedifference and create maximum value for the society. It has been conducting business in away that delivers long-term economic value that benefits the society as well. YourCompany strongly believes that sustainable and inclusive growth is possible by using thelevers of environmental and social responsibility while setting aspirational targets andimproving economic performance to ensure business continuity and rapid growth. YourCompany is committed to leverage Alternative Thinking' to build competitiveadvantage through customer centricity innovation good governance and inclusive humandevelopment while being sensitive to the environment.
As stipulated under Regulation 34(2)(f) of the Listing Regulations the BusinessResponsibility Report describing the initiatives taken by the Company from anenvironmental social and governance perspective forms an integral part of this AnnualReport for the financial year 2020-21.
Your Company has a rich legacy of ethical governance practices. Your Company iscommitted to transparency in all its dealings and places high emphasis on business ethics.Your Company always places emphasis on managing its affairs with diligence transparencyresponsibility and accountability thereby upholding the important dictum that anorganisation's corporate governance philosophy is directly linked to its performance.
The Company is committed to adopt and adhere the established world-class corporategovernance practices. The Company understands and respects its fiduciary role andresponsibility towards its stakeholders and to the society at large and strives to servetheir interests resulting in creation of value for all stakeholders.
A Report on Corporate Governance along with a Certificate from the Statutory Auditorsregarding compliance with respect to Corporate Governance as stipulated under Schedule Vof Listing Regulations forms an integral part of the Annual Report for the financial year2020-21.
Management Discussion and Analysis Report
A detailed analysis of your Company's performance is discussed in the ManagementDiscussion and Analysis Report as per Regulation 34 of the Listing Regulations for theyear under review forming an integral part of the Annual Report for the financial year2020-21.
Corporate Social Responsibility
Your Company is at the forefront of Corporate Social Responsibility (CSR') andsustainability initiatives and practices. Your Company believes in making lasting impacttowards creating a just equitable human and sustainable society. Your Company continuesto focus its CSR initiatives to drive positive and sustainable change in buildingresilient communities. Your Company has been involved with social initiatives and engagesin various activities in the fields of education healthcare and communities.
The COVID-19 crisis has been testing the world's capability to respond to a pandemic ata time when the world is already grappling with acute inequalities based on gender classaccess to livelihood opportunities amongst others. With the socio-economic impacts of thepandemic hitting hard particularly the vulnerable and marginalised groups there was aneed for businesses to step up to support communities in need. Swiftly responding to thisyour Company extended its support to the efforts of the Government by contributing Rs 3crores to the Prime Minister's Citizen Assistance and Relief in Emergency SituationsFund' (PM CARES Fund'). By contributing to PM CARES Fund your Company intended tohelp in enabling the dedicated medical and service fraternity in the frontline of thebattle against the pandemic and in mitigating its wide-ranging human impact particularlyon the most disadvantaged section of our society. Further during the year under reviewone of the horrifying cyclone Amphan' wreaked havoc all across West Bengal andOdisha. Because of the immediate need which arose due to catastrophe of cyclone Amphanyour Company decided to contribute an amount of Rs 25 lacs for this cause to West BengalState Disaster Management Authority.
During the year under review your Company proactively spent Rs 3.25 crores on CSRactivities against the minimum required amount of Rs 2.22 crores. The detailed AnnualReport on the CSR activities pursuant to Sections 134(3)(o) 135(4) of the Act and Rule 8of the Companies (Corporate Social Responsibility) Rules 2014 containing salient featuresof Company's CSR policy and activities undertaken during the financial year 2020-21 isannexed herewith as Annexure C. Pursuant to the provisions of the Section 135 of the Actread with Rules made thereunder and Schedule VII thereto the Company has a CSR Policy inplace which is duly being implemented. The CSR Policy of the Company can beaccessed at the Company's website through the following Weblink:https://www.orientelectric.com/images/investors/corporate-social-responsibility-policy.pdf
The terms of reference of CSR committee framed in accordance with Section 135 of theAct along with its composition details and number of meeting held during the financialyear under review is provided in the Corporate Governance Report which forms an integralpart of this Annual Report for the financial year 2020-21.
Your Company operates in a constantly evolving environment which exposes it todifferent risks. The Company has adopted an Enterprise Risk Management (ERM')framework and adopted an enterprise risk management policy based on globally recognizedstandards to provide a holistic view of aggregated risk exposures as well as to facilitatemore informed decisions. Through this framework the Company is able to identify assessmitigate and monitor overall and functional exposure to controllable and non-controllablerisks.
The ERM framework is administered by the Risk Management Committee which is alsoreviewed by the Audit Committee and the Board. The objective of the ERM framework is toenable and support achievement of business objectives through risk-intelligent assessmentapart from placing significant focus on constantly identifying and mitigating risks forthe business. The ERM Framework covers various categories of risks including interalia information security and cyber security risks effectiveness of the controlsthat have been implemented to prevent such risks and continuous improvement of the systemsand processes to mitigate such risks.
The ERM framework is structured and involves both bottom-up and top-down approachesaddressing strategic operational and financial objectives of the Company and acrossindividual businesses/functions. Operational management has ownership responsibility andaccountability for identifying assessing managing and mitigating risks. Seniormanagement monitors and facilitates the implementation of an effective ERM framework alongwith the development of policies processes and controls to mitigate risks and issues. Asan independent function Chief Risk Officer of the Company assures the Risk ManagementCommittee Audit Committee and the Board of Directors on the effectiveness of the ERMframework in the Company. The Risk Management Committee of the Company has been entrustedby the Board with the responsibility of reviewing the risk management process in theCompany and ensuring that the risks are brought within acceptable limits. Mitigation plansto significant risks are well integrated with functional and business plans and arereviewed on a regular basis by the management.
The Company endeavours to continuously sharpen its Risk Management systems andprocesses in line with rapidly changing business environment. The Company through itsrisk management process aims to contain the risks within its risk appetite.
Details of Risk Management Committee is provided in the Corporate Governance Reportwhich forms an integral part of this Annual Report.
Internal Financial Controls
Internal financial control over financial reporting have been designed to providereasonable assurance with regards to recording and providing reliable financialinformation and complying with applicable accounting standards. These controls arereviewed periodically and the Company continuously tries to automate these controls toincrease its reliability.
The Company uses an established ERP system to record day to day transactions foraccounting and financial reporting. The ERP system is configured to ensure alltransactions are integrated seamlessly with the underlying books of account.
Company has completed the upgradation of its core ERP system to the latest SAP S/4 HANAversion with assistance of expert consulting partners. All key internal controls overfinancial reporting were thoroughly tested along with the core functionalities beforemigrating to the new system. The Company has a well-defined and documented delegation ofauthority with specified limits for approval of expenditure both capital and revenue. TheCompany has workflows to ensure adherence to the delegation of authority. The Company hasa commercial manual which lays down certain principles and procedures that are to befollowed in all commercial transactions across the Company. The Company periodicallytracks all amendments to Accounting Standards and makes changes to the underlying systemsprocesses and financial controls to ensure adherence to the same. All resultant changesto the policy and impact on financials are disclosed after due validation with the AuditCommittee.
Corporate accounts function is actively involved in designing large process changes aswell as validating changes to IT systems that have a bearing on the books of account. TheCompany gets its financial statements audited every quarter by its Statutory Auditors.
With the aim to improve business efficiency and process improvements Company in theprevious financial year had launched its ambitious digitisation project"eWings". Under this project during the financial year 2020-21 the Companysuccessfully launched a plethora of digital enablement mainly Sales Force AutomationEmployee Engagement Modules Customer Onboarding Vendor Onboarding Collection ManagementSystem Management Approval Workflow Digital Generation of e-Invoicing and e-way billwhich is integrated with GST portal of Government of India. A string of other enablementis in progress and shall be launched soon.
Disclosure under the Sexual Harassment of Women at Workplace (Prevention Prohibitionand Redressal) Act 2013
As per the requirements of the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013 (POSH Act') the Company has formulated aPolicy on Prevention of Sexual Harassment at Workplace (POSH Policy') forprevention prohibition and redressal of sexual harassment at workplace and constitutedInternal Complaints Committees (ICC') across India where the offices of the Companyare located and has the required number of employees to consider and resolve all sexualharassment complaints reported by women.
At Orient Electric the goal has been to create an open and safe workplace where everyemployee feels empowered to contribute to the best of their abilities irrespective ofgender sexual preferences or any other classification that has no bearing on theemployee's work output.
The constitution of the ICC is as per the POSH Act and the committee includes externalmember with relevant experience. Investigations are conducted in accordance with the POSHAct and the POSH Policy. A senior woman employee presides over every case for ensuringjust and fair investigation.
The Company periodically conducts sessions for employees across the organization tobuild awareness about the POSH Policy and the provisions of POSH Act.
One complaint under POSH Policy was received by ICC during the calendar year 2020 whichwas properly investigated in accordance with the procedures prescribed and adequate stepswere taken to resolve. The details of the complaint pertaining to sexual harassment thatwas filed and disposed off are provided in Corporate Governance Report for the financialyear 2020-21. No complaint was pending at the end of calendar year 2020.
Vigil Mechanism / Whistle Blower Policy
The Vigil Mechanism as envisaged in the Act the Rules prescribed thereunder and theListing Regulations are captured in the Company's Whistle Blower Policy to enable all thestakeholders of the Company to report genuine concerns to provide for adequate safeguardsagainst victimization of persons who use such mechanism and also to provide for directaccess to the Chairman of the Audit Committee. All employees shall be protected from anyadverse action for reporting any unacceptable or improper practice and/or any unethicalpractice fraud or violation of any law rule or regulation. Awareness of the Policyamong the employees of the Company is created through sessions posters and mailersportraying the mechanism followed under the Policy. The Company Secretary is theDesignated Officer' under the Whistle Blower Policy of the Company and his contactdetails are provided in the policy.
Furthermore employees are free to communicate their complaints directly to theChairman of the Audit Committee as stated in the policy. The Company has also provided adedicated e-mail address for reporting such concerns. Alternatively the Whistle Blowercan also send written communications to the Company in a sealed envelope marked asProtective Disclosure'. All cases registered under the Policy are investigated bythe Whistle Blower Committee formed under the Policy and corrective actions are takenwherever necessary. All these cases along with the investigation reports are placed beforethe Audit Committee and the Board for their review. The policy is available on theinternal employee portal as well as on the Company's website and can be accessed throughthe following weblinkhttps://www.orientelectric.com/images/investors/whistle-blower-policy.pdf
During the financial year 2020-21 three complaints were received under the WhistleBlower Policy of the Company. The Whistle Blower Committee comprising of seniormanagerial personnel including Managing Director & CEO investigated the matters inaccordance with the procedures prescribed and adequate steps were taken to resolve themwhich includes taking necessary disciplinary actions against the employees who were foundto be guilty. As on March 31 2021 no complaint was pending to be attended to / resolved.Report prepared by the Whistle Blower Committee along with status update on complaintsreceived were placed before the Audit Committee and Board of Directors of the Company.
Further details on whistle blower policy complaints received thereunder during theyear are available in the Report on Corporate Governance that forms an integral part ofthis Annual Report.
Nomination And Remuneration Policy
The Nomination & Remuneration policy adopted by the Company lays down the criteriafor selection of Directors on the Board and payment of remuneration to Directors andSenior Management. It also lays down to have an appropriate mix of ExecutiveNon-Executive and Independent Directors to maintain the independence of the Board andseparate its functions of governance and management. The policy of the Company onNomination & Remuneration including the criteria for determining qualificationspositive attributes independence of a Director and other matters as required underSection 178(3) of the Act and Listing Regulations is available on the website of theCompany and can be accessed through the following weblink: https://www.orientelectric.com/images/investors/nomination-remuneration-policy.pdf
The Company afirms that the remuneration paid to the Directors of the Company duringand for the financial year 2020-21 is as per the terms laid out in the Nomination andRemuneration Policy of the Company.
Related Party Transactions
All contracts/ arrangements/ transactions entered into by the Company during thefinancial year under review with related parties were in the ordinary course of businessand on an arm's length basis. During the year under review the Company had not enteredinto any contract/ arrangement/ transaction with related parties which could be consideredmaterial in accordance with the policy of the Company on materiality of related partytransactions.
Suitable disclosures as required by the Indian Accounting Standards have been made inthe notes to the financial statements for the financial year 2020-21. A declaration inForm AOC-2 as required under Sections 134(3)(h) and 188(1) of the Act is enclosed asAnnexure D.
The policy on related party transactions as approved by the Board is uploaded on theCompany's website and can be accessed at the following Weblink: https://www.orientelectric.com/images/investors/related-party-policy.pdf
Compliance With Secretarial Standards
During the year under review your Company has complied with the respective mandatorySecretarial Standards issued by the Institute of Company Secretaries of India.
Conservation of Energy Technology Absorption and Foreign Exchange Earnings & Outgo
Particulars required under Section 134(3)(m) of the Act read with Rule 8 of theCompanies (Accounts) Rules 2014 regarding conservation of energy technology absorptionand foreign exchange earnings and outgo are given in Annexure E forming part of thisreport.
Change in the Nature of Business of the Company
During the year under review there is no change in the nature of the businessoperations of the Company.
Investor Education and Protection Fund
In accordance with the applicable provisions of the Act read with Investor Educationand Protection Fund (Accounting Audit Transfer and Refund) Rules 2016 (IEPFRules') all unclaimed dividends are required to be transferred to the Investor Educationand Protection Fund (IEPF') after completion of seven consecutive years. Furtheraccording to IEPF Rules the shares on which dividend has not been claimed by theshareholders for seven consecutive years or more shall be transferred to the demat accountof the Investor Education and Protection Fund Authority ("IEPF Authority").
During the year under review no share of the Company was liable to be transferred tothe demat account of IEPF Authority pursuant to Section 124(6) of the Act read with IEPFRules.
During the financial year 2020-21 the Company has transferred Rs 696547.50 to IEPFas dividend amount on unclaimed shares transferred earlier to IEPF Authority. The Companyhas appointed a Nodal Officer under the provisions of IEPF Regulations the details ofwhich are available on the Company's website and can be accessed through the followinglink https://www.orientelectric.com/ investors/investors-contact. The Company has uploadedthe details of unpaid and unclaimed amounts lying with the Company as on March 31 2020 onthe Company website which can be accessed through the following link https://www.orientelectric.com/images/investors/unclaimed-unpaid-dividend-31-mar-20.pdf . Thedetails of unpaid and unclaimed amounts lying with the Company as March 31 2021 will alsobe available on the website of the Company within 60 days of the AGM.
Details of dividend amount so far remitted to IEPF are as follows
|Financial Year ||Type of Dividend ||Dividend declared on ||Amount Transferred to IEPF |
| || || ||(In Rs) |
|2017-18 ||Interim Dividend ||February 12 2018 ||278619.00 |
|2017-18 ||Final Dividend ||July 16 2018 ||278619.00 |
|2018-19 ||Interim Dividend ||January 28 2019 ||278619.00 |
|2018-19 ||Final Dividend ||July 16 2019 ||278619.00 |
|2019-20 ||Interim Dividend ||January 28 2020 ||362204.70 |
|2019-20 ||Final Dividend ||August 07 2020 ||278619.00 |
|2020-21 ||Interim Divided ||January 29 2021 ||417928.50 |
| ||Total || ||2173228.20 |
Your Company continuously strives for excellence in its investor relations engagementwith International and Domestic investors. Your Company always believes in leading fromthe front with emerging best practices in investor relations and building a relationshipof mutual understanding with investor/analysts. Keeping this objective in mind theCompany during the year under review participated in various investor / analystinteractions / conference calls. In all such meetings nothing was discussed about theCompany which was not already disclosed in the public domain. Your Company ensures thatcritical information about the Company is promptly disseminated to all the investors byuploading the same on the websites of the National Stock Exchange of India Limited BSELimited and the Company.
Registrar and Share Transfer Agent
M/s. Kfin Technologies Private Limited (erstwhile Karvy Fintech Private Limited) is theRegistrar and Share Transfer Agent ("RTA") of the Company.
Pursuant to the provisions of Section 134(3)(a) and 92(3) of the Act read with Rule12(1) of the Companies (Management and Administration) Rules 2014 as amended the AnnualReturn of the Company is available on the website of the Company and can be accessedthrough the following linkhttps://www.orientelectric.com/images/investors/Annual-Return-31-Mar-2021.pdf
Significant and Material Orders Passed by any Regulators or Court
During the year under review no regulator or court has passed any materiallysignificant orders impacting either the going concern status of the Company or its futureoperations.
Further during the year under review as per available information no applicationagainst the Company was filed in any court in India under the Insolvency and BankruptcyCode 2016 nor any proceedings thereunder is pending as on March 31 2021.
Appreciations and Acknowledgements
Your Directors wish to extend their sincere thanks to the employees of the Company atall levels for their hard work dedication and commitment. The enthusiasm and unstintingefforts of the employees have enabled the Company to remain an industry leader.
The Board places on record its appreciation for the support and co-operation that yourCompany has been receiving from its suppliers distributors retailers and othersassociated with it as its business partners. It will be your Company's endeavour to buildand nurture strong links with the trade based on mutuality of benefits respect for andco-operation with each other consistent with consumer interests. Your Directors alsotake this opportunity to thank central and state governments as well as governmentagencies banks customers shareholders vendors and other related organisations thathave helped in your Company's progress as partners through their continued support andcooperation.
| ||For and on behalf of the Board of Directors |
| ||For Orient Electric Limited |
|London ||Chandra Kant Birla |
|May 12 2021 ||Chairman |
| ||DIN:00118473 |