Orient Beverages Ltd Directors Report.

To The Shareholders,

Your Directors have pleasure in presenting the Annual Report and Audited Accounts of your Company for the year ended 31st March, 2020:

FINANCIAL RESULTS :

(" in 000)

Particulars

Standalone

Consolidated

2019-20 2018-19 2019-20 2018-19
Profit / (Loss) before Depreciation & Taxation 36,563 41,877 25,096 46,587
Less : Depreciation and Amortization Expense 14,405 13,898 15,642 15,642
Tax Expenses
-Current Tax 6,555 6,853 7,038 7,747
-Deferred Tax Expenses/ (Credit) 231 (241) (3,107) (372)
-Tax for Earlier years 1,237 - 1,394 (168)
8,023 6,612 5,325 7,207
Profit after Depreciation and Taxation 14,135 21,367 4,129 23,738
Other Comprehensive Income (Net of Tax) (1,892) (947) (1,892) (947)
Total Comprehensive Income for the year 12,243 20,420 2,237 22,791

DIVIDEND:

Your Directors have recommended a dividend @5% i.e. " 0.50 per equity share of " 10/- each for the financial year ended 31st March, 2020 amounting to " 1,081 thousand. The dividend payout is subject to approval of the members at the ensuing Annual General Meeting.

TRANSFER TO RESERVE:

The Directors doesnt propose to transfer any amount to reserve during the year.

OPERATIONS AND STATE OF COMPANYS AFFAIRS:

The Companys Revenue from operations have increased from " 6,92,689 thousand in the FY 2018-19 to " 7,79,786 thousand in the FY 2019-20. Sale of Beverages has increased from " 6,43,638 thousand in the FY 2018-19 to " 7,62,900 thousand in the FY 2019-20, showing an increase of 18.53%. In spite of increase in turnover, the total Comprehensive Income of the Company has decreased from " 20,420 thousand in the FY 2018-19 to " 12,243 thousand in the FY 2019-20, because in the FY 2018-19 the Company has received a sum of " 18,426 thousand as arrear rent pursuant to settlement of a long dispute with a tenant. Hence comparing previous years financial results excluding arrear rent, financial results for the year under review are encouraging.

Leasehold rights of the Company in a property situated at 225C, A. J. C. Bose Road, Kolkata has expired on 11th May, 2019. Negotiations for renewal of the lease between the landlord and the Company are going on. The Companys rental income has got a big hit due to expiry of lease.

The spread of COVID-19 and consequent nationwide lockdown has severally affected sales, profit and overall performance of the Company, but we are struggling hard to minimise the loss and achieve the best possible results in the current year.

SUBSIDIARY COMPANIES :

Sharad Quench Pvt. Ltd. (SQPL) : SQPL, a wholly owned subsidiary of the Company, has completed the construction of a "Packaged Drinking Water" project and commenced production of packaged drinking water with effect from 22nd February, 2020 at Sankrail, Howrah, W.B. Financial Statements of SQPL for the FY 2019-20 has been duly considered in the Consolidated Financial Statements presented in this Annual Report of the Company.

Satyanarayan Rice Mill Pvt. Ltd. (SRMPL) : SMRPL is engaged in the business of packaged drinking water and has Plant

at P.O. Pandua, Dist. - Hooghly, W.B. Financial Statements of SRMPL for the FY 2019-20 has been duly considered in the Consolidated Financial Statements presented in this Annual Report of the Company. It is expected that there should be a sizeble increase in the Group turnover and income with the working of said subsidiary companies in the coming time.

Salient features of the financial statements of said subsidiary Companies have been attached along with the Annual Report in the Form AOC-1.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT:

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

EXTRACT OF ANNUAL RETURN:

Pursuant to Section 92(3) of the Companies Act, 2013 read with Rule 12(1) of the Companies (Management and Administration) Rules, 2014, an extract of the Annual Return for the financial year ended 31st March, 2020 in the prescribed Form MGT- 9 is attached with this Report and marked as Annexure - II.

DIRECTORS:

Sri Ballabha Das Mundhra, Executive Director (DIN: 01162223) retires by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment. An appropriate resolution for his appointment is being placed for consideration of the members at the ensuing Annual General Meeting.

The present term of Sri Narendra Kumar Poddar as Chairman (being Whole time Director); Sri Akshat Poddar as Managing Director and Sri Ballabha Das Mundhra as Executive Director (being Whole time Director) expired on 31st March, 2020. Your Directors propose their re-appointment for another term as mentioned in the relevant Resolutions with effect from 1st April, 2020 for a period of 5(five) consecutive years.

None of the Directors is disqualified for appointment/re-appointment under Section 164 of the Companies Act, 2013. DECLARATION UNDER SECTION 149(7) OF THE COMPANIES ACT, 2013:

The Company has received declarations from Dr. Gora Ghose (DIN: 00217079) and Sri Vivek Vardhan Agarwalla (DIN: 00674395) that they meet the criteria of Independence as prescribed under Section 149(6) of the Companies Act, 2013.

FORMAL ANNUAL EVALUATION:

The Nomination and Remuneration Committee of the Board has devised criteria for evaluation of the performance of Directors. The Board has evaluated its own performances and that of its Committees and all individual directors i.e. both Independent and Non-Independent. All the Directors of the Company are found to be persons of having knowledge and experience in their respective area and their association with the Company is considered to be beneficial to the Company.

COMPANYS POLICY ON APPOINTMENT AND REMUNERATION OF DIRECTORS:

The Board of Directors of the Company has adopted a Remuneration Policy in consultation with its Nomination and Remuneration Committee for determining qualifications, positive attributes and independence of directors and criteria for directors appointment and remuneration.

The main features of the Policy are as follows:

• The Company while constituting the Board shall draw members from diverse fields such as finance, law, administration, management, marketing, manufacturing, operations or other disciplines related to the Companys business. There shall be no discrimination on the basis of gender, while determining the Board composition.

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

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

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

KEY MANAGERIAL PERSONNEL:

Pursuant to Section 203 of the Companies Act, 2013 following officials are the Key Managerial Personnel of the Company:

i. Sri Narendra Kumar Poddar, Chairman;

ii. Sri Akshat Poddar, Managing Director;

iii. Sri Ballabha Das Mundhra, Executive Director;

iv. Sri Arun Kumar Singhania, Chief Financial Officer and v Sri Jiyut Prasad, Company Secretary.

NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS:

The Board of Directors met 12(twelve) times during the year under review. The dates of such meetings were 12th April, 2019, 30th May, 2019, 22nd July, 2019, 14th August, 2019, 2nd September, 2019, 14th October, 2019, 13th November, 2019, 10th December, 2019, 26th December, 2019, 10th January, 2020, 13th February, 2020 and 26th February, 2020.

Pursuant to the requirements of Schedule IV to the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a separate Meeting of the Independent Directors of the Company was also held on 20th December, 2019 without the presence of non-independent directors and members of the management, to review the performance of non-independent directors and the Board as a whole, the performance of the Chairperson of the Company and also to assess the quality, quantity and timeliness of flow of information between the Company management and the Board.

DIRECTORS RESPONSIBILITY STATEMENT:

Pursuant to the provisions of Section 134(5) the Companies Act, 2013, the Directors hereby confirm and state that:

i. In the preparation of annual accounts for the financial year ended 31st March, 2020, the applicable accounting standards have been followed along with proper explanation relating to material departures,

ii. They have selected such accounting policies and applied them consistently and made judgement and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period;

iii. They have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv. They have prepared the annual accounts on a going concern basis;

v. They have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively and

vi. They have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

AUDITORS:

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

Further the Ministry of Corporate Affairs (MCA) vide notification dated 7th May, 2018 has done away with the requirement of ratification of appointment of Statutory Auditors at every Annual General Meeting, as per the first proviso of Section 139 of the

Companies Act, 2013 and the Companies (Audit and Auditors) Amendment Rules, 2018. Accordingly, the Company is not required to pass any resolution pertaining to ratification of the appointment of Statutory Auditors in the ensuing Annual General Meeting.

AUDITORS REPORTS:

The Independent Auditors Reports for the financial year ended 31st March, 2020 does not contain any qualification, reservation or adverse remark.

SECRETARIAL AUDIT:

Pursuant to Section 204 of the Companies Act, 2013 read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company had appointed M/s Manoj Shaw & Co., Practising Company Secretaries, as Secretarial Auditor for conducting the Secretarial Audit of the Company for the financial year 2019-20. The Secretarial Auditors Report received from said Auditors, forms part of this Report and marked as Annexure - III. There are no qualifications or adverse remarks in their Report.

COST AUDIT:

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

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS:

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

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES:

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

INFORMATION PURSUANT TO SECTION 134(3)(m) OF THE COMPANIES ACT, 2013 READ WITH RULE 8 OF THE COMPANIES (ACCOUNTS) RULES, 2014:

(A) Conservation of energy:

i. Steps taken or impact on conservation of energy:

• Installation of Industrial Process Chiller with Automatic Pet Blow Moulding Machine for Blowing Plant to upgrade the output system.

• Installation of new Pet Blow Machine for 5 Litre pack in Blowing Plant to save time and energy.

• Installation of Shrink Wrapping Machine for packing of finished goods to save time and energy.

• The lighting system in the factory has been upgraded and modified to use of LED lights to reduce consumption of energy.

ii. The steps taken by the Company for utilising alternate sources of energy:

• The Company is making maximum use of natural lighting during day time by using transparent roof sheets.

iii. The capital investment on energy conservation equipments:

• A sum of " 1,295 thousand was spent towards acquisition of energy conservation equipments during the year under review.

(B) Technology Absorption:

i. The efforts made towards technology absorption:

• Technology absorption is a continuous process. The Company keeps track of new machines and upgrade its plant and machinery with the latest available technology.

ii. The benefits derived like product improvement, cost reduction, product development or import substitution:

• Improved productivity and consequent reduction in the cost of production.

iii. In case of imported technology (imported during the last three years reckoned from the beginning of the financial year)

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

iv. The expenditure incurred on research and development:

• Being Franchisee of M/s Bisleri International Private Limited, the Company is adopting technological guidelines provided by its Principal from time to time and thus research and development of technology is automatically taken care of. Hence there is no expenditure incurred on research and development during the year.

(C) Foreign exchange earnings and outgo:

Your Company did not have any foreign exchange earnings during the year under review. The foreign exchange outgo was " 2,804 thousand on account of travelling and other expenses.

DEVELOPMENT AND IMPLEMENTATION OF RISK MANAGEMENT POLICY:

The Board has developed and implemented a risk management policy of the Company identifying therein the elements of risk and concern that may threaten the existence of the Company which entail the recording, monitoring and controlling of Companys risks and addressing them comprehensively and empirically.

The Risk Management system aims to:

i. Address our Companys strategies, operations and compliances and provide a unified and comprehensive perspective;

ii. Establish the risk appetite;

iii. Be simplistic and intuitive to facilitate a speedy and appropriate identification of potential and actual risks and its communication;

iv. Seek escalation of the identified risk events to the appropriate persons to enable a timely and satisfactory risk response; v Reduce surprises and losses, foresee opportunities and improve deployment of resources; and

vi. Develop a mechanism to manage risks.

CORPORATE SOCIAL RESPONSIBILTY:

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

LISTING OF SHARES AND LISTING FEE:

The equity shares of the Company are listed on The Calcutta Stock Exchange Ltd. and BSE Limited. The listing fee for the year 2020-21 has already been paid to the both Stock Exchanges.

CORPORATE GOVERNANCE REPORT:

The provisions of Regulation 15(2) read with Regulation 27 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 are not applicable to the Company. Hence, report on Corporate Governance for the financial year 2019-20 is not attached herewith.

DEPOSITS:

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

AUDIT COMMITTEE:

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

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

The Company Secretary acts as Secretary of the Committee. There is no such recommendation of the Audit Committee which has not been accepted by the Board, during the year under review.

ESTABLISHMENT OF VIGIL MECHANISM:

The Company has established a vigil mechanism/ whistle blower policy. The policy allows intimation by any director or employee or any other stakeholder to the designated officer in good faith of misconduct or unethical or improper activity through a written communication. Audit Committee oversees the vigil mechanism for disposal of the complaint. Direct access to the chairman of the Audit Committee is also allowed in exceptional cases. The vigil mechanism/ whistle blower policy is available on Companys website www.obl.org.in.

PARTICULARS OF EMPLOYEES:

Particulars of employees pursuant to Section 197(12) of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are attached herewith and marked as Annexure - IV.

INTERNAL FINANCIAL CONTROL SYSTEMS:

The Company has adopted guidelines for ensuring orderly and efficient Internal Financial Controls as required under the provisions of the Companies Act, 2013. The Audit Committee after considering the views of Statutory Auditors and Internal Auditors has found that such Internal Financial Controls, commensurate with the size and operations of the Company, are adequate and operating efficiently. The Audit Committee, in consultation with the Internal Auditors, formulates the scope, function and methodology for conducting the internal audit. The Internal Financial Controls system is satisfactory as per evaluation of the Audit Committee.

DISCLOSURES:

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

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

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

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

APPRECIATION:

Your Directors wish to express their grateful appreciation for the co-operation and support received from customers, vendors, shareholders, financial institutions, banks, regulatory authorities and the society at large. Deep appreciation is also recorded for the dedicated efforts and contribution of the employees at all levels, as without their focus, commitment and hard work, the Companys consistent growth would not have been possible, despite the challenging environment.

For and behalf of the Board
N.K.Poddar
Kolkata, 26th August, 2020 Chairman