Dear Members,
Your Directors take pleasure in presenting the Forty Sixth Annual
Report and the audited accounts for the financial year ended March 31, 2023.
FINANCIAL RESULTS C ( in Crores)
Particulars |
Standalone |
Consolidated |
|
Year Ended March 31, 2023 |
Year ended March 31, 2022* |
Year ended March 31, 2023 |
Year ended March 31, 2022* |
Net Sales |
699.64 |
650.71 |
699.64 |
650.71 |
Profit before finance cost,
depreciation, taxation, and exceptional item |
52.63 |
58.71 |
52.63 |
58.71 |
Finance Cost |
2.40 |
4.11 |
2.40 |
4.11 |
Depreciation |
21.10 |
20.61 |
21.10 |
20.61 |
Exceptional Item (Net) |
- |
- |
- |
- |
Profit before taxation |
29.13 |
33.99 |
29.13 |
33.99 |
Share of profit/(loss) of Associates |
- |
- |
0.75 |
1.16 |
Operating Profit before taxation |
29.13 |
33.99 |
29.88 |
35.14 |
Tax expense |
7.39 |
2.95 |
7.39 |
2.95 |
Profit after tax |
21.74 |
31.04 |
22.49 |
32.19 |
Other Comprehensive Income
(Net of Taxes) |
0.17 |
0.48 |
0.17 |
0.48 |
PAT with Other Comprehensive |
21.91 |
31.52 |
22.66 |
32.66 |
Income |
|
|
|
|
Earnings per share (B) |
15.04 |
21.57 |
15.56 |
22.36 |
*regrouped
Performance Highlights
Fiscal 2022-23 was a challenging year for the Indian tile Industry.
Despite this lacklustre environment, your Company increased its topline
registering a Net Sales of
C 699.64 Crores in FY23 as against C650.71
Crores in FY22, a growth of 7.5 % and PAT of
C 22.49 Crores.
High inflation and, more specifically, high gas prices significantly
dented business profitability for the industry. Despite its untiring efforts to optimise
costs across the organisation, your Company's profitability also gotimpacted
especially in H2FY23.
Notwithstanding the persisting challenges, your Company successfully
persevered to become LEANER,
STRONGER and FUTURE READY.
During the year, the cash conversion cycle was maintained at a LEAN
level of less than 30 days, allowing the Company to retain a net cash position as of March
31, 2023, despite incurring ~C 65 Crores CAPEX in FY23. The Company continued a
disciplined market credit policy and stayed away from customers with a high credit risk.
Our Credit Rating has improved as well. The Company's credit
rating was elevated from "A" to "A Stable" by CRISIL. This
recognition of the Company's effort was also echoed by another reputed rating agency
viz., India
Ratings which awarded the Company a rating of IND A1 which is at par
with CRISIL's rating. This underlines the robustness, and relevance of our business
model for now and future.
During the year under review, the Company also closed the working
capital arrangements extended by the erstwhile Consortium lenders and entered
multi-lateral fungible working capital facilities with 4 banks viz. Axis Bank, Standard
Chartered Bank, IDFC First Bank and ICICI Bank. Not only were we able to secure better
commercial terms, but the new lenders also allowed your Company to secure the facilities
against its current assets instead of mandating charge creation over immoveable
properties, thus creating options for future Growth CAPEX.
Over the last three years, the Company has spent C 97 Crores on CAPEX
all funded from internal accruals. To put it in perspective this amount is more than what
we invested in the preceding 4 years. The Company has been investing in all the three
manufacturing locations with the goal of premiumisation of its product portfolio and
strengthening its presence in South & West. Even as the net debt remained below ZERO
at end March
2023, manufacturing capacity increased by 2.6 MSM to 33.6 MSM bythe
year end as detailed below:
?
Q1 Sikandrabad (U.P.) - GVT debottlenecking adding 0.7 MSM
?
Q2 Dora (Gujarat) - Line-1 conversion from Ceramic toVitrified
?
Q3 Hoskote (Karnataka) - incremental capacity addition of 1.9 MSM
Line-3 Inspired by the early success of GVT launch from Dora, we decided to further
increase investments at Dora -
Implementation of a new 3.3 MSM GVT Line-2 at this facility is underway
and is expected to commence operations by Q3FY24. A term loan of C 50 Crores from
Axis Bank has been tied up for this project.
The Company also made significant CAPEX investments to use alternative
fuels across its facilities at Sikandrabad, Hoskote and Dora this gives us the
flexibility to quickly change fuel and become more cost effective and hence better
prepared to counter future uncertainties in fuel pricing and availability.
On the people front, we continued to add to our team, more particularly
our sales force, to grow our business volumes. During FY23 we have added 3 new branches
and opened 18 new Headquarter towns for our sales teams.
Apart from adding numbers we have intensified Learning and Development
initiatives. Also, we broadened coverage of our ESOP scheme to strengthen a sense of
ownership and increased alignment with the Company's long-term objectives.
The management team continues to build and strengthen ties with key
customers. FY23 started with a roadshow across 10 cities where we met with more than 200
channel partners and took feedback & suggestions from them. This engagement has
continued through the year with multiple trips under the Foreign Trip Incentive Scheme in
Nepal, Dubai, Singapore & Phuket.
We also continued to expand our distribution reach.
We added net 67 OBTBs (display showrooms) in FY23, taking the total
count of active OBTB's to 352 by March 31, 2023. These OBTB's contributed 39% of
our retail sales in FY23 vs 35% in FY22.
The muted external ecosystem had little effect on your Company's
innovative zeal. New products launched in
FY22 contributed about 14% to your Company's top line in FY23.
We simultaneously increased our marketing investments further in FY23
to reinforce the reputation and popularity of our brand. As a result, our branding recall
improved considerably on websites and social media platforms. We have continued focusing
on our efforts to make Tile Shopping Easier.
All these initiatives were recognised at various industry forums, by
way of various prestigious awards to the Company. Your Company was recognised as the
"Best
Brand" forthe THIRD consecutive year byREALTY+.
Dividend
Your Directors have recommended a dividend of C 1/- per equity share
for the financial year ended March
31, 2023. The total outgo of dividend would amount to C 1.45 Crores as
against C 1.44 Crores in the previous year. The dividend pay-out is subject to approval of
members at the ensuing Annual General Meeting.
Particulars of Loans, Guarantees or Investments
Loans, Guarantees and Investments covered under
Section 186 of the Companies Act, 2013 forms part of the notes to the
financial statements provided in this Annual Report.
Public Deposits and Loans / Advances
Your Company has neither invited nor accepted deposits from the public
falling within the ambit of Section 73 of the Companies Act, 2013 read with the Companies
(Acceptance of Deposits) Rules, 2014.
Transfer to Reserves
During the year under review, no amount was transferred to Reserves.
Particulars of Contracts or Arrangements made with Related Parties
All Related Party Transactions and material modifications, if any those
were entered into during the financial year were on an arm's length basis, in the
ordinary course of business and were in compliance with the applicable provisions of the
Companies Act, 2013 and the SEBI Regulations. There were no transactions during the year
which would require to be reported in Form AOC-2. The Policy on materiality of Related
Party Transactions and on dealing with Related Party Transactions is
uploaded on the Company's website i.e. www.orientbell.com under the head Investor
Relations.
Prior omnibus approvals of the Audit Committee and Board were obtained
for the transactions which are repetitive in nature. A statement of Related Party
Transactions is placed before the Audit Committee for its review on a quarterly basis,
specifying the nature, value and terms and conditions of the transactions. Detail of the
transactions with Related Parties including the transaction(s) of the Company with a
Company belonging to the promoter/promoter group which hold(s) more than 10% shareholding
in the Company as required pursuant to para-A of Schedule V of the
SEBI (Listing Obligations and Disclosure Requirements)
Regulations, 2015 is disclosed separately in the
Financial Statements of the Company.
Change in the nature of business
There was no change in the nature of business of the Company during the
financial year ended
March 31, 2023.
Directors and Key Managerial Personnel
In terms of Section 152 of the Companies Act, 2013,
Mr. Madhur Daga shall retire at the forthcoming Annual General Meeting
and being eligible, has offered himself for re-appointment.
The present term of appointment of Mr. Mahendra K.
Daga is up to March 31, 2024 as Chairman & Whole
Time Director of the Company. The Nomination and Remuneration Committee
and the Board of Directors have, subject to the approval of the members vide special
resolution at the ensuing Annual General Meeting and such other approvals as may be
necessary in this regard, approved the reappointment and remuneration of Mr. Mahendra K.
Daga as Chairman
& Whole Time Director of the Company for a further term of three
years from 01.04.2024 to 31.03.2027.
In this respect, a special resolution forming part of the notice
calling 46th AGM has been proposed to be passed at the AGM.
All the Independent Directors have furnished declarations that they
meet the criteria of independence as laid down under Section 149(6) of the Companies Act,
2013 and Regulation 16 (1)(b) of
SEBI (Listing Obligations and Disclosure Requirements)
Regulations, 2015.
Statement regarding Integrity, Expertise and Experience of Independent
Directors
In the opinion of the Board, the Independent Directors possess
Excellent rating in respect of clear sense of value and integrity and have requisite
expertise and experience in their respective fields.
The online proficiency self-assessment test to be conducted by Indian
Institute of Corporate Affairs is exempted for such Independent Directors who have served
a Company in such capacity for a total of not less than three years. The Company's
Independent Directors need not to undergo the said test as they qualify said criteria.
Number of meetings of the Board
The Board met five times during the financial year, the details of
which are provided in the Corporate Governance Report which forms part of this Annual
Report. The intervening gap between any two meetings was within the period prescribed
under the Companies
Act, 2013 and SEBI (Listing Obligations & Disclosure Requirements)
Regulations, 2015.
Directors' Responsibility Statement
Pursuant to Section 134(3) (c) of the Companies Act, 2013, your
Directors, to the best of their knowledge and belief and according to the information and
explanations obtained by them, make the following statement:
(a) that in the preparation of annual accounts for the financial year
ended March 31, 2023, the applicable accounting standards have been followed along with
proper explanation relating to material departures, if any;
(b) that the Directors have selected such accounting policies and
applied them consistently and made judgments and estimates that were reasonable and
prudent so as to give a true and fair view of the state of affairs of your Company as at
March
31, 2023 and of the profit of your Company for the year ended on that
date;
(c) that proper and sufficient care has been taken for the maintenance
of adequate accounting records in accordance with the provisions of the
Companies Act, 2013 for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities;
(Rs.) that the accounts for the financial year ended
March 31, 2023 have been prepared on a going concern' basis;
(e) that internal financial controls were in place and that such
internal financial controls were adequate and were operating effectively;
(f) that proper systems to ensure compliance with the provisions of all
applicable laws were in place and were adequate and operating effectively.
Audit Committee
The Audit Committee comprises of three Independent Directors namely Mr.
Sameer Kamboj (Chairman), Mr. P.M. Mathai (Member) and Mr. K.M. Pai (Member). All the
recommendations made by the Audit Committee were accepted by the Board.
Investor Education & Protection Fund
Pursuant to Section 124(6) of the Companies Act, 2013 during the period
under review, the Company has transferred 6,855 equity shares of C 10/- each to
Investor Education & Protection Fund in respect of which the
dividends remained unpaid/unclaimed from financial year 2014-15 to 2018-19 and 2020-21.
Pursuant to the provisions of Section 124(5) of the Companies Act,
2013, your Company has transferred entire amount of unpaid/ unclaimed dividend up to FY
2014-15 to Investor Education and Protection
Fund (IEPF) which was due to be transferred to the said authority.
Nomination and Remuneration Policy
The Policy of the Company for Nomination and remuneration of Directors,
Key Managerial Personnel and Senior Managerial Personnel of the Company called as
Nomination and Remuneration Policy specifies the criteria for determining qualifications,
positive attributes, independence of Director and other matters provided under sub section
(3) of section 178 of the Companies Act, 2013. The said policy has been adopted by the
Board and is available on the website of the Company at https://www.orientbell.com under
the head Investor Relations.
The broad parameters covered under the Policy are
Policy Objective, Guiding Principles, Nomination of Directors,
Remuneration of Directors, Nomination and Remuneration of the Key Managerial Personnel
(Other than Managing/ Whole-time Directors), Key-Executives and Senior Management and the
Remuneration of Other Employees.
Risk Management Policy
Pursuant to the requirement of SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015, the
Company has formed a Risk Management Policy. This policy seeks to
create transparency, minimise adverse impact on the business objectives and enhance the
Company's competitive advantage. The policy defines the risk management approach
across the enterprise at various levels including documentation and reporting. The Board
of Directors reviews the risks appurtenant to the Company periodically and a statement of
risks is mentioned under the head Management Discussion and Analysis Report which forms
part of this Annual Report.
The Risk Management Policy as approved by the Board is uploaded on the
Company's website https://www.orientbell.com under the head Investor Relations.
Vigil Mechanism cum Whistle Blower Policy
The Company has in place Vigil Mechanism cum Whistle Blower Policy as
per the provisions of Regulation 22 of SEBI (Listing Obligations & Disclosure
Requirements)
Regulations, 2015 and section 177(9) of the Companies Act, 2013. The
Policy deals with the instances of unethical behaviour-actual or suspected, fraud or
violation of the Company's Code of Conduct. It provides for a mechanism for
safeguarding a Whistle Blower against the victimisation of Director(s)/ Employees and
allows to approach the Chairman of the Audit Committee of the Company with the protected
disclosure. The Whistle Blower may also approach the CEO of the Company for speedier
enquiry. The
Vigil Mechanism cum Whistle Blower Policy of the
Company is uploaded on the Company's website
https://www.orientbell.com under the head Investor Relations.
Corporate Social Responsibility
In accordance with the provisions of Section 135 of the Companies Act,
2013 read with The Companies (Corporate Social Responsibility Policy) Rules, 2014, the
Board of Directors has constituted Corporate Social Responsibility Committee comprising of
Mr. Madhur Daga (Chairman), Ms. Tanuja Joshi and Mr. Sameer Kamboj (Members). The Board
has also formulated a Corporate Social Responsibility Policy ("CSR Policy")
indicating the scope and the activities to be undertaken by the Company, process and
provision of budget allocation, CSR activities implementation mechanism and provisions
related to reporting. The CSR Policy of the Company may be accessed on the Company's
website at https://www.orientbell.com under the head Investor Relations.
The Company undertakes initiatives in compliance with
Schedule VII to the Act and guidelines, circulars issued by the
Government from time to time.
The average net profit of the Company, computed as per
Section 198 of the Act, during the three immediately preceding
financial years (i.e. 2019-20, 2020-21 and 2021-22) was C 16,81,24,767/-. During the year
under review, the Company has spent C 33,35,634/- on CSR activities (after setting off
excess CSR spent of
C 40,526/- carried over from previous Years) against minimum obligation
of C 33,62,495/-. An additional excess CSR spent of C 7,808/- of previous years charged
off as an expense as on March 31, 2023. After above said adjustments an amount of C
13,665/- will remain available to be set off against CSR expense in succeeding financial
years.
The Annual Report on CSR activities is appended as
Annexure 1 to the Board's Report.
Conservation of Energy, Technology Absorption, Foreign Exchange
Earnings and Outgo
The information on conservation of energy, technology absorption and
foreign exchange earnings and outgo stipulated under section 134(3)(m) of the Companies
Act, 2013 read with rule 8 of the Companies (Accounts) Rules, 2014 is appended as Annexure
2 to the Board's Report.
Evaluation of the Board, its Committees and individual Directors
Pursuant to the provisions of the Companies Act,
2013 and SEBI (Listing Obligations and Disclosure Requirements)
Regulations, 2015, the Board has carried out an annual evaluation of its own performance
and that of its Committees as well as performance of the Directors individually. Feedback
was sought covering various aspects of the Board's functioning such as adequacy of
the composition of the Board and its Committees, Board culture, execution and performance
of specific duties, obligations and governance and the evaluation was carried out based on
responses received from the Directors.
A separate exercise was carried out by the Nomination and Remuneration
Committee of the Board to evaluate the performance of individual Directors. The
performance evaluation of the Non-Independent Directors, the Board as a whole and the
Chairman of the Company was carried out by the Independent Directors. The Directors
expressed their satisfaction with the evaluation process.
Employee Stock Option Scheme
The information required to be disclosed in terms of the provisions of
SEBI (Employee Stock Option Scheme and
Employee Stock Purchase Scheme) Guidelines, 1999 and Companies (Share
Capital and Debentures) Rules,
2014 is appended as Annexure 3 to the Board's Report.
Management Discussion and Analysis Report
Management Discussion and Analysis Report, as stipulated under SEBI
(Listing Obligations and
Disclosure Requirements) Regulations, 2015 forming part of this report,
has been given under separate section in the Annual Report.
Corporate Governance Report
As per SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015, a separate section on corporate
governance practices followed by the Company, together with a certificate for compliance
of the provisions of Corporate Governance from the Statutory Auditors forms an integral
part of this Report.
Annual Return
As per the provisions of section 134 (3) (a) the Annual
Return of the Company is disclosed on the website of the Company
https://www.orientbell.com under the head Investor Relations.
Subsidiaries, Associates and Joint Ventures
Your Company has no Subsidiary or Joint Venture. By virtue of the
control as defined under Section 2(6) of the Companies Act, 2013, your Company has two
Associate Companies viz., M/s Proton Granito Private Limited and M/s
Corial Ceramic Private Limited. No new Company has become or ceased to be the subsidiary,
associate or joint venture during the year under review. The Board of Directors has
reviewed the affairs of associates companies. In accordance with Section
129(3) of the Companies Act, 2013, the consolidated financial
statements of the company and its associate companies have been prepared, which forms part
of this Annual Report. A Report on the performance and financial position of each of the
associates companies included in the Consolidated Financial Statement and their
contribution to the overall performance of the
Company is appended in the prescribed format AOC-1 as Annexure - 4 to
the Board's Report.
Particulars of Employees
The information as per Section 197 read with Rule 5 of the Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014 is appended as
Annexure- 5 to the Board's Report.
In terms of the provisions of Section 197(12) of the Companies Act,
2013 read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of
Managerial Personnel) Rules, 2014, a statement showing the names of employees and other
particulars of the top ten employees and employees drawing remuneration in excess of the
limits as provided in the said rules will be provided upon request. However, in terms of
provisions of the first proviso to Section 136(1) of the Companies Act, 2013, the Annual
Report is being sent to the members of the Company excluding the aforesaid information.
The said information is available for inspection at the Registered Office of the Company
during working hours and any member interested in obtaining such information may write to
the Company Secretary and the same will be furnished on request.
The Details of application made /proceeding pending under the
Insolvency and Bankruptcy Code, 2016
The Company has not made any application during the year and no
proceeding is pending under Insolvency &
Bankruptcy Code, 2016 (IBC).
Auditors
Statutory Auditors
M/s S.R. Dinodia & Co., LLP, New Delhi Statutory Auditors of your
Company have been appointed as such by the
Shareholders at the 45th AGM held on July 21, 2022 to hold office from
the conclusion of 45th Annual General Meeting till the conclusion of the 50th Annual
General Meeting tobe held in the year 2027.
Auditors' Report
The Auditor's Report read with notes to the accounts referred to
in the Auditor Report are self- explanatory and therefore do not call for any further
comments. The Auditor's Report does not contain any qualification, reservation or
adverse remark. There is no offence of fraud reported by the Statutory Auditors under
section
143(12) of the Companies Act, 2013.
Secretarial Audit
Pursuant to the provisions of Section 204 of the Companies Act, 2013
and The Companies (Appointment and Remuneration of Managerial Personnel) Rules,
2014, the Company has appointed M/s Ashu Gupta &
Co., Company Secretaries to undertake the Secretarial Audit of the
Company. The Report of the Secretarial Audit, appended as Annexure 6 to the Board's
Report does not contain any qualification, reservation, adverse remark or disclaimer.
Compliance with Secretarial Standards issued by ICSI
The Secretarial Standards issued by the Institute of Company
Secretaries of India (ICSI) have been duly complied with by the Company.
Internal Financial Control System
The Company has well in place the Internal Financial Control Framework
which is independently evaluated from time to time by in-house audit function for
necessary improvement, wherever required. The Statutory auditors also review the internal
financial controls and issue report under section 143 of the Companies Act, 2013 which
forms part of their Report.
The detail in respect of adequacy of internal financial controls with
reference to the financial statements is mentioned under the head Management Discussion
and Analysis Report which forms part of this Annual Report.
Material changes and commitments between the end of the financial year
and date of report
There is no material change and/or commitment held between the end of
the financial year and the date of report affecting the financial position of the Company.
General
(i) The Company has complied with the provisions relating to the
constitution of Internal Complaints Committee and is also having a Policy on Prohibition,
Prevention and Redressal of Sexual Harassment of Women at Workplace and matters connected
therewith or incidental thereto covering all the aspects as contained under "The
Sexual Harassment of Women at Workplace (Prohibition,
Prevention and Redressal) Act, 2013".
a. number of complaints pending at the beginning of the financial year
Nil b. number of complaints filed during the financial year Nil c. number of
complaints disposed of during the financial year Nil d. number of complaints
pending at the end of the financial year Nil
(ii) No significant or material orders were passed by the Regulators or
Courts or Tribunals which impact the going concern status and Company's operations in
future.
(iii) The Company is not required to maintain the cost records as
specified by the Central Government under sub-section (1) of section 148 of the Companies
Act, 2013.
(iv) No one-time settlement/valuation was done while taking loan from
the Bank or Financial Institution.
Acknowledgement
Your Directors wish to place on record their appreciation for dedicated
service and contribution made by the employees of the Company at all levels. Your
Directors would also like to place on record their appreciation for the continued
co-operation and support received by the Company during the year from its customers,
suppliers, bankers, financial institutions, business partners and other stakeholders.
|
For and on behalf of Board of
Directors of Orient Bell Limited |
Place: New Delhi |
Madhur Daga |
P.M. Mathai |
Date: May23, 2023 |
Managing Director |
Director |