orient bell ltd Directors report

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 Companys 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 Companys credit rating was elevated from "A–" to "A Stable" by CRISIL. This recognition of the Companys 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 CRISILs 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:

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Q1 Sikandrabad (U.P.) - GVT debottlenecking adding 0.7 MSM

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Q2 Dora (Gujarat) - Line-1 conversion from Ceramic toVitrified

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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 Companys 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 OBTBs to 352 by March 31, 2023. These OBTBs contributed 39% of our retail sales in FY23 vs 35% in FY22.

The muted external ecosystem had little effect on your Companys innovative zeal. New products launched in

FY22 contributed about 14% to your Companys 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 arms 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 Companys 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 Companys 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 Companys 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 Companys 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 Companys 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 Companys 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 Companys 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 Boards 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 Boards 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 Boards 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 Boards 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 Boards 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 Boards 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 Auditors 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 Auditors 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 Boards 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 Companys 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