orient electric ltd share price Directors report

Dear Members,

The Board of Directors ("Board") hereby submits the report on the business and operations of your Company (the "Company" or "Orient Electric"), along with the audited financial statements, for the financial year ended March 31, 2023.

SUMMARY OF FINANCIAL PERFORMANCE

Your Companys performance during the financial year as compared with that during the previous financial year is summarized below: ( H crores)

Particulars	2022-23	2021-22
Revenue from operations	2,529.17	2,448.37
Other Income	26.61	5.81
Total Revenue	2,555.78	2,454.18
Total Expenditure (Before Depreciation, Amortization & Finance Cost)	2,378.19	2,217.05
Profit before Finance Costs, Depreciation and Amortisation	177.59	237.13
Depreciation and Amortization Expense	53.50	47.08
Finance Costs	22.15	20.29
Profit Before Tax (PBT)	101.94	169.76
Tax	26.09	43.12
Profit After Tax (PAT)	75.85	126.64
Comprehensive Income l (Losses)	0.5	0.14
Total comprehensive income for the year	76.35	126.78
Dividend	42.48	42.43
Transfer to General Reserve	15.00	15.00
Balance carried to Balance Sheet	563.36	520.09
Earnings per Share (Basic) (In J)	3.57	5.97

OPERATIONAL HIGHLIGHTS

Financial year 2022-23 was the first full year of unrestricted operations post covid and the business encountered mixed reaction from domestic and international markets. What started on a positive note in the year beginning with the summer season experienced turmoil across the global economy with several geo-political challenges. Amidst the global disruptions in several countries, Indian economy demonstrated resilience with stronger diplomatic relations and sailing through a moderate growth rate. The Lighting and Switchgear segment produced encouraging performance with a consistent high growth both in top line and margins. The trade channel continues to create pull for the products, the B2B channel has grown at a faster pace enabled by the professional luminaries and fa?ade lighting. The Company executed several projects from Public Sector Undertakings including National Highway Authority of India, Jaipur Development Authority, Delhi PhD and Railways in the Lighting segment. The Company has registered its significant presence in fa?ade lighting and has successfully delivered several projects including Ganga Barrage, Varanasi Cantonment Railway Station, and Puducherry Smart City. On Republic Day, the Company illuminated several landmark buildings across India with its fa?ade lighting in the colours of Indian flag as a part of ‘Orient lights up India Campaign. The Go to Market strategy of the Company in selected states started yielding results. The aggressive drive in accelerating Digital Revenue also started showing early signs of promising growth towards the latter part of the financial year. Consumer durables sector, however, combatted tougher challenges with demand contraction mainly in fans and appliances coupled with the regulatory changes in fans BEE star rating from January 1, 2023. All this resulted in slowdown in the small appliances industry across all the channels thereby impacting revenue growth and profitability, especially in the Electrical Consumer Durables (ECD) segment. Under the circumstances, Orient Electric suffered a setback in the ECD segment with a drop in revenue and margins as compared to the previous year, whereas in the Lighting and Switchgear segment, both B2C and B2B gained traction resulting double digit growth both in revenue and margins. Your Board of Directors are happy to share that in our continuous pursuit of bringing technology-enabled innovative products to delight the consumers, yet one more innovation has come out of the stable of Orient Electric, namely the Cloud3 Fan with Cloud Chill technology that was launched in March23 garnering lot of consumer excitement and acceptance. This was launched in the digital channel and now being rolled out in retail across the country. Besides, the Company also added new range of energy efficient BLDC Fans. To augment the production capacity to fuel future growth as well as market high quality products to the domestic and international consumers at competitive costs, the Company has already initiated a project to setup a state-of-the-art manufacturing facility at its greenfield site at Hyderabad and the same is expected to complete by middle of FY 2023-24.

More details on the operations are exhaustively covered in the ‘Management Discussion and Analysis report forming part of this Annual Report.

FINANCIAL HIGHLIGHTS

During the financial year 2022-23:

1. Revenue from operations increased to Rs 2,529.17 crores as against Rs 2,448.37 crores in the previous year, recording a moderate growth of 3.30%.

2. Employee cost as a percentage to revenue from operations was 7.62% (Rs 192.6 crores) as against 7.78% (Rs 190.46 crores) in the previous year.

3. Other expense as a percentage to revenue from operations increased to 14.29% (Rs 361.41 crores) as against 10.62% (Rs 259.98 crores) in the previous year.

4. Profit before exceptional items and tax for the current year is Rs 101.94 crores as against Rs 169.76 crores in the previous year, a drop of 39.95%.

5. Profit after tax for the current year is Rs 75.85 crores as against Rs 126.78 crores in the previous year, a drop of 40.11%.

6. During and for the financial year 2022-23, the Company paid Rs 26.09 crores as direct tax as compared to Rs 43.12 crores during and for the financial year 2021-22.

AWARDS & ACCOLADES

Orient Electric has received many prestigious awards and accolades for its commitment to manufacture quality lifestyle electrical solutions that benchmark against the best in the industry. It has also been recognized for its state-of-the-art manufacturing capabilities, innovative marketing practices and excellent customer service initiatives. Following are some of the key Awards and Accolades conferred upon your Company during the year under review:

- Certified as a Great Place To Work for the fourth year in a row. The commitment to the belief that a strong and high-trust team is a key pillar for sustained high - performance of a company, stands emboldened with this certification.

- Recognised as one of the ‘ Most Trusted Brands of India 2023 by Team Marksmen based on an industry wide consumer study evaluating brands on various parameters including loyalty, brand identity, consumer perception and reciprocity, among others. This recognition re-affirms consumer trust in the brand ‘Orient and further strengthens the Companys resolve to deliver compelling consumer experiences.

- Awarded with Superbrand‘ India 2023 – 5th time in a row for fans, 3rd time in a row for coolers and 2nd time in a row for lighting products. This is not just an award, but a validation of the trusts which consumers have on your Company in multiple categories.

- Featured among the India ‘ s Iconic Brands for the year 2022 by ET Edge - An Economic Times Initiative. This recognition is a testimony to the Companys consumer-centric business model, strong brand relevance and resonance, adherence to best practices, and a willingness to change and adapt.

- Conferred with ‘CII Supply Chain and Logistics Award 2022 in Consumer Durables category for achieving significant improvement in E-Commerce Fill Rate through Warehouse and Operation Excellence.

- For safety and environment sustainability, won the

‘Fame India Safety Excellence Award and ‘Fame India Environment Excellence Award‘ in Consumer Goods category, also the ‘Gold Award in Environment Excellence from Grow Care India.

DIVIDEND

During the year under review, the Board of the Company at its meeting held on January 30, 2023, declared an Interim dividend of Rs 0.75 (75%) per equity share of the face value of Rs 1 each. The interim dividend was paid to the shareholders on February 16, 2023.

Further, your directors are pleased to recommend a final dividend of Rs 0.75 per equity share of Rs 1 each of the Company, for the year ended March 31, 2023, subject to the approval of the shareholders at the ensuing Annual General Meeting ("AGM"). The total dividend amount for the financial year 2022-23, including the proposed final dividend, amounts to Rs 1.50 (150%) per equity share of the face value of Rs 1 each. The dividend payout ratio for the year works out to 42.08 % of the net profit for the financial year ended March 31, 2023.

In view of the changes made under the Income-Tax Act, 1961, by the Finance Act, 2020, as amended, dividend paid or distributed by the companies shall be taxable in the hands of the shareholders. The Company shall, accordingly, make the payment of the final dividend after deduction of tax at source, at the rates prescribed therein.

The dividend recommended by the Board is in accordance with the Dividend Distribution Policy of the Company. The Dividend Distribution Policy, in terms of Regulation 43A of the Securities and Exchange Board of India (Listing Obligation and Disclosure Requirements)Regulations, 2015 ("Listing Regulations") is available on the Companys website: https://www.orientelectric. com/images/investors/dividend-distribution-Policy.pdf

PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS

The Company has not given any loans, provided any guarantees / securities or made investments that are covered under the provisions of Section 186 of the Companies Act, 2013 (the "Act"), during the financial year ended March 31, 2023.

TRANSFER TO GENERAL RESERVE

The Company has transferred Rs 15 crores to the General Reserve of the Company during the financial year ended March 31, 2023.

DEPOSITS

The Company has not accepted any deposits from the public under Chapter V of the Act and the Rules related thereto and, as such, no amount of principal or interest was outstanding as on the balance sheet date. The Company has not accepted any loan from any of its directors.

HOLDING, SUBSIDIARY, ASSOCIATE AND JOINT VENTURE COMPANIES

During the financial year ended March 31, 2023, the Company had no holding, subsidiary, associate, or joint venture company.

Dubai Office: The Company continues to maintain a representative office (Branch Office) in Dubai Multi Commodity Centre, free trade zone of Dubai, for facilitating business in the Middle East and Africa for its products and for engaging in active business development of new geographies in the international markets.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

During the year under review, Mr. Rakesh Khanna (DIN: 00266132), Managing Director & CEO, resigned from the Company due to his personal reasons which become effective from the close of business hours on April 03, 2023. The Board expressed its deep sense of appreciation for Mr. Khannas leadership over his 8 years of service with the Company and acknowledges his efforts and contributions towards business growth and transformation.

The Board at its meeting held on March 31, 2023, on the recommendation of the Nomination and Remuneration Committee and after considering the expertise and experience of Mr. Rajan Gupta (DIN: 07603128), appointed him, subject to approval of the shareholders, as an Additional Director and designated him as the Managing Director and Chief Executive Officer ("CEO") of the Company for a period of five years effective from April 04, 2023. As an Additional Director, Mr. Rajan Gupta would hold the office of director upto the date of the ensuing 7^th AGM, or three months, whichever is earlier. The Company has received a notice in writing from a member of the Company in accordance with the provisions of Section 160 of the Act, proposing the candidature of Mr. Rajan Gupta for the office of director, not liable to retire by rotation. As per the requirements of Regulation 17(1C) of the Listing Regulations, the Company is seeking approval of its members for the appointment of Mr. Rajan Gupta, as the Managing Director & CEO of the Company, through Postal Ballot process.

In accordance with the provisions of the Act and in terms of the Memorandum and Articles of Association of the Company, Mr. Desh Deepak Khetrapal retires by rotation at the ensuing AGM and has offered himself for re-appointment. Members attention is drawn to Item No. 3 of the Notice for the reappointment of Mr. Desh Deepak Khetrapal as a director of the Company, liable to retire by rotation. The Managing Director & CEO and Independent Directors of the Company are not liable to retire by rotation.

Mr. TCA Ranganathan, Mr. K Pradeep Chandra and Mrs. Alka Marezban Bharucha were re-appointed as Independent Director(s) of the Company with effect from January 19, 2023, for the second term of five consecutive years. The said re-appointments were approved by the shareholders, through Postal Ballot, on December 28, 2022. The Company formalised their re-appointment through appointment letters which inter-alia stipulates their roles and responsibilities. In the opinion of the Board, all the three Independent Directors, reappointed during the year, are persons having requisite expertise and experience.

All the Independent Directors have given declarations that they continue to meet the criteria of independence as laid down under Section 149(6) of the Act and Regulation 16(1)(b) of the Listing Regulations and that they are not debarred from holding the office of director by virtue of any order of the Securities and Exchange Board of India ("SEBI) " or any other such authority. All the Independent Directors have confirmed that they are in compliance with Rules 6(1) and 6(2) of the Companies (Appointment and Qualification of Directors) Rules, 2014, with respect to registration with the data bank of Independent Directors maintained by the Indian Institute of Corporate Affairs.

In terms of the provisions of Section 2(77) of the Act, none of the Directors and Key Managerial Personnel of the Company are related to each other.

Except as mentioned above, during the year under review, there was no other change in Directorship or Key Managerial Personnel of the Company.

BOARD EVALUATION

Pursuant to the provisions of the Act and the Listing Regulations, the annual performance evaluation of the Board, its committees and the Directors was carried out as per the criteria laid down by the Nomination and Remuneration Committee pursuant to the Nomination and Remuneration Policy of the Company. The evaluation of the performance of the Board, its Chairman and the Non-Independent Directors was carried out by the Independent Directors. The evaluation of the performance of the Board, its committees and the individual directors was done by the Board.

The criteria for the evaluation of individual directors, mainly, included:

1. the extent of engagement and contribution to the affairs of the Company including by way of attendance in Board and committee meetings;

2. ability to discharge their duties and obligations diligently in the best interest of the Company;

3. ability to provide effective leadership and checks and balances towards sustaining the highest levels of corporate governance;

4. exercise duty of care and skill in the discharge of their functions;

5. exercise independence of judgment and bring about objectivity to the Board process; and

6. safeguarding the interest of all the stakeholders.

The evaluation criteria of the performance of the Board and its committees included, inter-alia, their culture and management with various factors like environment of discussion, their roles and responsibilities, effectiveness to govern the organisation, diversity, expertise, experience, independence of directors, integrity, their composition, attendance, participation levels, bringing specialised knowledge for decision making, smooth functioning, effective decision making, terms of reference, conduct of committees and frequency of meetings, etc. The directors expressed their satisfaction with the evaluation process. The Board also noted that the Independent Directors had fulfilled the independence criteria as specified in the Listing Regulations and were independent from the management.

FAMILIARIZATION PROGRAMME FOR INDEPENDENT DIRECTORS

Details of familiarization programmes imparted to Independent Directors during the financial year 2022-23, is disclosed on the Companys website at the web link: https://www.orientelectric. com/images/investors/familiarisation-programme.pdf.

For further details on familiarization programmes, imparted by the Company, refer to the Corporate Governance Report, forming part of this Annual Report.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to section 134(5) of the Act, your directors, to the best of their knowledge and belief, confirm that:

a. In the preparation of the 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, wherever applicable;

b. The directors have selected such accounting policies and applied them consistently and made judgments 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 and loss of the Company for that period;

c. The directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d. The directors have prepared these Annual Accounts on a going concern basis;

e. The directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and operating effectively; and

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

PARTICULARS OF DIRECTORS AND EMPLOYEES

As required by the provisions of Section 197 of the Act read with Rule 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the particulars of the employees are set out in Annexure A.

BOARD AND ITS COMMITTEES

During the financial year 2022-23, five (5) Board meetings were held on May 10, 2022, July 25, 2022, November 03, 2022, January 30, 2023, and March 31, 2023. The details of the same are provided in the Corporate Governance Report which forms part of the Annual Report.

The Board has constituted several Committees of directors with adequate delegation of powers to focus effectively on the specific issues and ensure expedient resolution of diverse matters. Each Committee has specific terms of reference setting forth the purpose, role, and responsibilities of the Committee. The Board has constituted following committees:

1. Audit Committee

2. Nomination and Remuneration Committee

3. Stakeholders Relationship Committee

4. Corporate Social Responsibility Committee

5. Risk Management Committee

The details relating to roles, terms of reference, powers and meetings of the above committees are provided in the Corporate Governance Report which forms part of the Annual Report.

All recommendations of the Committees are placed before the Board for approval or information, if required. During the financial year ended March 31, 2023, all the recommendations of /submissions by, the Committees which were mandatorily required, were accepted by the Board. These Committees meet as often as required for the proper discharge of roles and responsibilities or as statutorily required.

MEETING OF INDEPENDENT DIRECTORS

Meeting of Independent Directors was held separately on December 05, 2022, without the presence of Non-Independent Directors and members of the management, which reviewed the performance of the Board, the Non-Independent Directors, and the Chairman. Post Meeting of the Independent Directors, the collective feedback of each of the Independent Directors was presented before the Board.

SHARE CAPITAL

During the financial year 2022-23 there was no change in the authorised share capital of the Company. As on March 31, 2023, the paid-up share capital of the Company stood at H 21,27,85,578/- divided into 21,27,85,578 equity shares of H 1/- each. During the financial year 2022-23, your Board approved the allotment of 6,00,076 equity shares, on exercise of equal number of Stock Options under the Orient Electric – Stock Options Scheme – 2019.

Further, details of equity shares lying in Orient Electric Limited - Unclaimed Suspense Account, as on March 31, 2023, as per the provisions of Regulations 34, 39 read with Schedule V(f) of the Listing Regulations, are provided in the Corporate Governance Report forming part of this Annual Report.

ORIENT ELECTRIC EMPLOYEE STOCK OPTION SCHEME - 2019

Company has adopted ‘Orient Electric Employee Stock Option Scheme-2019 ("ESOP Scheme"), during the financial year 2018-19, as part of its Long-Term Incentive Programme with the intention to attract, motivate and retain high quality talent at the senior level and in line with growth objective of the Company. The ESOP Scheme of the Company is in compliance with the SEBI (Share Based Benefits and Sweet Equity) Regulations, 2021 ("ESOP Regulations") and Listing Regulations.

Details of the shares issued under ESOP Scheme, alongwith the disclosures pursuant to ESOP Regulations, are uploaded on the website of the Company and can be accessed at the Web-link: https://www.orientelectric.com/images/investors/ESOS-2019-disclosure-31Mar23.pdf

During the financial year 2022-23, there was no change in the ESOP Scheme 2019. During the year under review 3,40,924 new stock option were granted to eligible employees of the Company while 6,09,732 stock option, granted earlier, got vested out of which 6,00,076 stock options were exercised by these employees. More details on ESOPs are provided in the notes to accounts of the financial statements for the financial year 2022-23, forming part of the Annual Report.

M/s A. K. LABH & Co., Practicing Company Secretaries, Secretarial Auditors of the Company, has certified that the Companys ESOP Scheme has been implemented in accordance with the ESOP Regulations, and the resolutions passed by the shareholders approving the ESOP Scheme. Said certificate from the Secretarial Auditors of the Company shall be available for inspection by the shareholders at the ensuing AGM.

AUDITORS

Statutory Auditors & Audit Report

The shareholders of the Company, on the recommendation of the Board, at the AGM held on July 25, 2022, re-appointed M/s. S.R. Batliboi & Co. LLP, Chartered Accountants, (ICAI Firm Registration Number 301003E/ E300005), as Statutory Auditors of the Company for the second term from the conclusion of 6^th AGM till the conclusion of 10^th AGM.

The Audit report for the financial year 2022-23 does not contain any qualification, reservation, or adverse remarks. Further, during the financial year 2022-23, the Statutory Auditors have not come across any event indicating commitment of any fraud by the officers or employees of the Company and therefore have not reported any instances of fraud to the Audit Committee or Board or the Central Government as required Section 143(12) of the Act.

Secretarial Auditor

The Secretarial Audit Report for the financial year 2022-23, issued under the Act read with Rules made thereunder and Regulation 24A of the Listing Regulations, by M/s A. K. Labh & Co., Practicing Company Secretaries, Secretarial Auditors of the Company, is set out in Annexure B to this Report.

The Secretarial Compliance Report, pursuant to the requirement of Regulation 24A of the Listing Regulations, received from Mr. A. K. Labh, for the financial year 2022-23, in relation to compliance of the Securities and Exchange Board of India Act, 1992, the Securities Contracts (Regulation) Act, 1956 and the Rules, Regulations/Circulars/ Guidelines issued thereunder, as applicable, is available on the website of the Company and can be accessed at the following weblink: https://www.orientelectric. com/images/investors/secretarial-compliance-report-2023.pdf

The Secretarial Audit Report and Secretarial Compliance Report for the financial year 2022-23 do not contain any qualification, reservation, or adverse remark. Further, the Secretarial Auditors have confirmed that they have not come across any event indicating commitment of any fraud by the officers or employees of the Company and thus, no reporting under the provisions of section 143(12) of the Act and the Rules made thereunder was required.

The Board of the Company, on the recommendation of the Audit Committee, has appointed M/s A. K. Labh & Co., Practicing Company Secretaries, (Certificate of Practice No. 3238), as the Secretarial Auditor to conduct an audit of the secretarial records for the financial year 2023-24.

Cost Auditor

Mr. Somnath Mukherjee, Cost Accountant in Practice (M. No. – 5343), was appointed as the Cost Auditor of the Company for conducting audit of the cost records of certain products of the Company for the financial year ending March 31, 2023. As per the requirements of Section 148 of the Act read with the Companies (Cost Records and Audit) Rules, 2014, as amended, the Company is maintaining proper cost records. The Cost Auditor will submit his report for the financial year 2022-23 within the timeframe prescribed under the Act and the rules made thereunder.

The Board, on the recommendation of Audit Committee, has reappointed Mr. Somnath Mukherjee, Cost Accountant in Practice (M. No. – 5343), as Cost Auditor of the Company for the financial year 2023-24. In accordance with the provisions of Section 148 of the Act read with the Companies (Audit and Auditors) Rules, 2014, since the remuneration payable to the Cost Auditor will have to be ratified by the shareholders, the Board recommends the same for its ratification by the shareholders at the ensuing AGM.

ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG)

During the previous financial year 2021-22, Orient Electric started its ESG Journey. Taking it further, the focus is steadfast on leveraging technology to battle climate change, conserving electricity and water and managing waste. On the social front, emphasis of the Company is towards women empowerment by providing improved means for education, skills, vocational training, better healthcare facilities, improving diversity and inclusion, facilitating employee wellness and experience, delivering technology for good and energizing the communities we work in. We are also redoubling our efforts to serve the interests of all our stakeholders, by leading through our core values and setting benchmarks in corporate governance.

BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT (BRSR)

SEBI, vide its circular dated May 10, 2021, replaced the existing Business Responsibility Report by Business Responsibility and Sustainability Report ("BRSR") and made it mandatory for the top 1,000 listed companies (by market capitalization) from fiscal 2023. BRSR is based on the framework of the National Guidelines on Responsible Business Conduct. Disclosures in BRSR are based on ESG parameters, compelling organizations to holistically engage with stakeholders and go beyond regulatory compliances in terms of business measures and its reporting.

Orient Electric has adopted the BRSR to provide enhanced disclosures on ESG practices and priorities of the Company. The BRSR disclosures form a part of this Annual Report.

CORPORATE GOVERNANCE

Our corporate governance practices are a reflection of our value system encompassing our culture, policies, and relationships with our stakeholders. Integrity and transparency are key to our corporate governance practices to ensure that we gain and retain the trust of our stakeholders at all times. Corporate governance is about maximizing shareholder value legally, ethically, and sustainably. At Orient Electric, the Board exercises its fiduciary responsibilities in the widest sense of the term. Our disclosures seek to attain the best practices in corporate governance. We also endeavor to enhance long-term shareholder value and respect minority rights in all our business decisions.

Orient Electrics Corporate Governance Report for the financial year ended March 31, 2023, forms part of this Annual Report. A Certificate from the CEO and CFO of the Company in terms of Listing Regulations, inter-alia, confirming the correctness of the financial statements and cash flow statements, adequacy of the internal control measures and reporting of matters to the

Audit Committee, is also annexed to the Corporate Governance Report. M/s. S.R. Batliboi & Co. LLP, Chartered Accountants, have confirmed that the Company has been compliant with the conditions of the Corporate Governance as stipulated in the Listing Regulations. The said certificate is annexed to the Corporate Governance Report.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

In terms of Regulation 34 of the Listing Regulations, the Management Discussion and Analysis Report for the year under review is presented in a separate section, forming an integral part of this Annual Report.

CORPORATE SOCIAL RESPONSIBILITY

The Company has in place Corporate Social Responsibility Policy ("CSR Policy") which outlines the Companys philosophy and responsibility and lays down the guidelines and mechanism for undertaking socially impactful programs towards welfare and sustainable development of the community around the area of its operations.

Pursuant to clause (o) of sub section (3) of Section 134 of the Act and Rule 8 of the Companies (Corporate Social Responsibility) Rules, 2014, as amended, the Annual Report on Corporate Social Responsibility activities of the Company undertaken during the year under review, including salient features of Companys CSR Policy forms part of this Report as Annexure C.

During the year, no amendment to the CSR Policy of the Company was required. The CSR Policy of the Company is available on the website of the Company and the weblink is: https://www.orientelectric.com/images/investors/corporate-social-responsibility-policy.pdf

RISK MANAGEMENT

The Company has constituted a Risk Management Committee ("RMC") of the Board comprising of directors of the Company. The RMC has a Risk Management Charter and Policy that is intended to ensure that an effective Risk Management framework is established and implemented within the organisation. The Risk Management framework is in place to identify, prioritise, mitigate, monitor, and appropriately report any significant threat to the organisations strategic objectives, its reputation, operational continuity, environment, compliance, and the health & safety of its employees. The Company has an internal Governance Risk and Compliance Committees ("GRCC"), which review risks on a half-yearly basis and evaluate its impact and plans for mitigation. As part of this process, the Company has identified the risks with the highest impact and then assigned a likely probability of occurrence. Mitigation plans for each risk have also been put in place and are reviewed by the GRCC every six months before presenting to the RMC. The RMC has set out a review process to report to the Board on the progress of the initiatives for the major risks of each of the businesses. Your Board is of the opinion that as on the date of this report there is no risk which may threaten the existence of the Company or impact its going concern.

Further details about the RMC including its composition are mentioned in the Corporate Governance Report which forms part of this Annual Report.

INTERNAL FINANCIAL CONTROLS

During the year, the Company has reviewed its Internal Financial Control systems and has continually contributed to the establishment of a more robust and effective internal financial control framework, as prescribed under the ambit of Section 134(5) of the Act. The control framework is administered and tracked closely through digitally enabled processes with commensurate checks and balances to ensure strict adherence. The preparation and presentation of the financial statements is pursuant to the control criteria defined considering the essential components of Internal Control - as stated in the "Guidance Note on Audit of Internal Financial Controls Over Financial Reporting" issued by the Institute of Chartered Accountants of India.

The control criteria ensure the orderly and efficient conduct of the Companys business, including adherence to its policies, safeguarding of its assets, prevention and detection of frauds and errors, accuracy and completeness of the accounting records and the timely preparation of reliable financial information. Based on the assessment carried out by the management and the evaluation of the results of the assessment, the Board is of the opinion that the Company has an adequate Internal Financial Controls system that is operating effectively as of March 31, 2023.

There were no instances of fraud which would have necessitated reporting of material misstatements in the Companys operations. There has been no communication from regulatory agencies concerning non-compliance with, or deficiencies in, financial reporting practices.

PROTECTION OF WOMEN AT WORKPLACE

Orient Electric has always endeavored to create an open and safe workplace for every employee to feel empowered, irrespective of gender, sexual preferences, and other factors, and contribute to the best of their abilities. The Company has constituted Internal Committees " ( IC") for all the working locations of the Company in India to consider and resolve sexual harassment complaints, if any reported by women employee.

The IC has been constituted as per the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, ("POSH") and the committee includes independent external expert with relevant experience. A senior woman employee is the presiding officer for every case. The role of the IC is not restricted to mere redressal of complaints but also encompasses prevention and prohibition of sexual harassment. In the last few years, the ICs have worked extensively on creating awareness on relevance of sexual harassment issues in the new normal by using brand new and innovative measures to help employees understand the forms of sexual harassment. During the financial year 2022-23, no complaint was reported under the provisions of POSH . The details required to be disclosed under POSH are provided in the Corporate Governance Report forming part of this Annual Report.

VIGIL MECHANISM

The Company has a robust vigil mechanism wherein the employees can approach the management of the Company and make protective disclosures about unethical behaviour, actual or suspected fraud or violation of the Companys Code of Conduct and Insider Trading Code. The Whistle Blower Policy requires every stakeholder to promptly report to the management any actual or possible violation of the above codes or an event an employee becomes aware of, that could affect the business or reputation of the Company. The disclosures reported are addressed in the manner and within the time frames prescribed in the Policy. A mechanism is in place whereby any employee of the Company has access to the Chairman of the Audit Committee to report any concern. No person has been denied access to the Chairman to report any concerns. Further, the said policy has been disseminated within the organization and has also been posted on the Companys website at https://www.orientelectric. com/images/investors/whistle-blower-policy.pdf

The Whistle-Blower Policy aims to:

1. allow and encourage stakeholders to bring to the managements notice concerns about unethical behavior;

2. ensure timely and consistent organisational response; 3. build and strengthen a culture of transparency and trust; and 4. provide protection against victimisation.

NOMINATION AND REMUNERATION POLICY

The Nomination and Remuneration Policy of the Company, inter alia, provides that the Nomination and Remuneration Committee shall:

1. formulate the criteria for board membership, including the appropriate mix of Executive & Non-Executive directors;

2. approve and recommend compensation packages and policies for directors and senior management; and

3. lay down the effective manner of performance evaluation of the Board, its Committees, and the directors.

The salient features of the Nomination and Remuneration Policy of the Company are outlined in the Corporate Governance Report which forms part of this Annual Report. There was no amendment in the Policy during the financial year 2022-23. The Policy is also available on the website of the Company at https://www.orientelectric.com/images/investors/nomination-remuneration-policy.pdf

RELATED PARTY TRANSACTIONS

Prior approval of the Audit Committee is obtained for all related party transactions. The Audit Committee accords omnibus approval for Related Party Transactions which are in ordinary course of business, repetitive in nature and satisfy the arms length principles. The Audit Committee reviews, on a quarterly basis, the details of the Related Party Transactions entered pursuant to the aforementioned omnibus approval.

There were no related party transactions which were not in the ordinary course of the business or not on arms length basis and also there was no material related party transaction, during the year under review. A declaration in Form AOC-2 under Section 134(3)(h) of the Act is enclosed as Annexure D to this Report. For more details on Related Party Transactions, which are in ordinary course of business and on arms length basis, please refer to Note No. 33 of Financial Statements.

The Company has framed a Policy for determining materiality of Related Party Transactions and dealing with Related Party Transactions. The Policy is in line with the requirements of Listing Regulations and the Act. The said Policy is hosted on the website of the Company and can be accessed at the following link: https://www.orientelectric.com/images/investors/related-party-policy.pdf

A detailed note on the procedure adopted by the Company in dealing with contracts and arrangements with related parties is provided in the Report on Corporate Governance, which forms part of this Annual Report.

COMPLIANCE WITH THE PROVISIONS OF SECRETARIAL STANDARDS

During the year under review, the applicable Secretarial Standards i.e SS – 1 and SS – 2, relating to "Meeting of the Board of Directors" and "General Meetings", respectively, as issued by

The Institute of Company Secretaries of India, have been duly complied by the Company.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS & OUTGO

Information in accordance with the provisions of Section 134(3) (m) of the Act, read with Rule 8 of the Companies (Accounts) Rules, 2014 regarding conservation of energy, technology absorption and foreign exchange earnings and outgo, is given in the statement annexed as Annexure E hereto and forms a part of this Report.

CHANGE IN THE NATURE OF BUSINESS OF THE COMPANY

There is no change in the nature of the business operations of the Company, during the financial year ended March 31, 2023.

MATERIAL CHANGES AND COMMITMENTS AFFECTING FINANCIAL POSITION BETWEEN END OF THE FINANCIAL YEAR AND DATE OF REPORT

There have been no material changes and commitments affecting the financial position of the Company between the end of the financial year under review and the date of this Report.

INVESTOR EDUCATION AND PROTECTION FUND

In accordance with the applicable provisions of the Act read with Investor Education and Protection Fund (Accounting, Audit, Transfer, and Refund) Rules, 2016 ("IEPF Rules"), all unclaimed dividends are required to be transferred to the Investor Education and Protection Fund ("IEPF") after completion of seven consecutive years. Further, according to IEPF Rules, the shares on which dividend has not been claimed by the shareholders for seven consecutive years or more shall be transferred to the demat account of the Investor Education and Protection Fund Authority ("IEPF Authority"). After the transfer, the concerned shareholders can claim the said shares along with the dividend(s) by making an application to IEPF Authority in accordance with the procedure available on www.iepf.gov.in and on submission of such documents as prescribed under the IEPF Rules. On receipt of the application, the Company shall send an online verification report to the IEPF Authority after verifying all the necessary details which are duly certified by the Nodal Officer. All corporate benefits accruing on such shares including dividend except rights shares shall be credited to IEPF.

Details of the Dividend amount transferred to the IEPF Authority have been disclosed in the Corporate Governance Report of the Company, forming part of this Annual Report.

ANNUAL RETURN

Pursuant to Section 92(3) read with Section 134(3)(a) of the Act, the Annual Return as on March 31, 2023 is available on the Companys website at https:www.orientelectric.com/images/ investors/Annual-Return-31-Mar-2023.pdf

SIGNIFICANT AND MATERIAL ORDERS PASSED BY ANY REGULATORS OR COURT

During the financial year 2022-23, there were no significant or material orders passed by the Regulators or Courts or Tribunals impacting the going concern status and operations of the Company in the future.

AFFIRMATIONS

1. No application has been made under the Insolvency and Bankruptcy Code, hence the requirement to disclose the details of application made or any proceeding pending under the Insolvency and Bankruptcy Code, 2016 during the year along with their status as at the end of the financial year is not applicable.

2. During the year under review, your Company has not made any onetime settlement with any bank or financial institution.

ACKNOWLEDGEMENTS

Your directors take this opportunity to convey their appreciation for the unstinted dedication, professionalism, commitment, and resilience displayed by the Companys employees at all levels, and express their sense of gratitude to the customers, suppliers, banks & financial institutions, channel partners, business associates, Central & State Governments for their cooperation and look forward to their continued support in future. Your directors also wish to express their gratitude towards the shareholders for their continued trust, support, and confidence.

For and on behalf of the Board of Directors

	For Orient Electric Limited
	Chandra Kant Birla
Place: New Delhi	Chairman
Date: May 12, 2023	DIN:00118473