Orient Electric Ltd Directors Report.

Dear Members,

Your Directors are pleased to present the Board Report on the business and operations of the Company together with the audited financial statements for the financial year ended March 31, 2022.

HIGHLIGHTS - FINANCIAL RESULTS

In compliance with the provisions of the Companies Act, 2013 ("Act"), and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations"), the Company has prepared its financial statements as per Indian Accounting Standards ("Ind AS") for the financial year 2021-22. The financial highlights of the Company?s operations are as follows:

(Rs. in Crs)

Particulars 2021-22 2020-21
Revenue from operations 2,448.37 2,032.60
Other Income 5.81 6.27
Total Revenue 2,454.18 2,038.87
Expenses
Total Expenditure other than Finance Costs, Depreciation and Amortisation 2,217.05 1,813.09
Profit before Finance Costs, Depreciation and Amortisation 237.13 225.78
Depreciation and Amortization Expense 47.08 43.15
Profit Before Finance Cost and Tax 190.05 182.63
Finance Costs 20.29 20.73
Profit Before Tax (PBT) 169.76 161.90
Tax 43.12 42.16
Profit After Tax (PAT) 126.64 119.74
Comprehensive Income / (Losses) 0.14 (0.40)
Total comprehensive income for the year 126.78 119.34
Dividend 42.43 26.52
Transfer to General Reserve 15.00 15.00
Balance carried to Balance Sheet 520.09 434.44
Earnings per Share (Basic) (In Rs.) 5.97 5.64

CURRENT YEAR REVIEW

Despite a higher corresponding base, which had surged on consumers acting out on their pent-up demand last year, Company sustained a confident revenue momentum for the financial year 2021-22, growing by over 20% YoY. Financial year 2021-22 has seen consumer demand picking up. However, there were certain headwinds as well such as apprehension of another Covid wave, global geopolitical tension, shortage of raw materials, volatility of commodity prices and the likes. Despite all these challenges, your Company has been able to increase its market share driven by, amongst other factors, innovative product launches, focus on consumer centricity, increased distribution penetration and market shift from unorganised to organised players. The Company?s diversified product mix along with its new product interventions, offered across multiple channels, continues to strike a chord with evolving consumer demand.

Marking a new chapter in its journey of innovation and growth, the newly constructed state-of-the-art Research & Development Centre equipped with latest technology was inaugurated at the manufacturing facility of the Company at Faridabad, reinforcing its commitment to develop innovative, consumer-centric products and solutions.

Electrical Consumer Durables (ECD): In FY 22? ECD segment has witnessed a mixed trend. While there was a strong demand built up in the first half of the year, the latter half faced many headwinds such as sharp surge in raw material cost, multiple covid waves creating fear and uncertainty, delayed winters, and sluggish festival sales. Despite of all these, your Company has been able to increase its market share by expanding its reach in southern and eastern regions of India.

Lighting and Switchgear: Despite several challenges, including ongoing global supply chain issues making availability of integrated circuits and semi-conductors difficult, in FY 22? your Company has shown continuous growth in lighting. Company has increased its presence in Consumer Luminaries driven by new product line-up, development of alternative integrated circuits, ensuring availability and expansion of distribution channel. Your Company is building capability to increase presence in fast growing Fa?ade lighting. Switchgear has also delivered encouraging performance backed by new range of switches which saw good demand in the mass market, capability building, product quality strengthening, increased traction in B2B segment and entry in European markets.

FINANCIAL PERFORMANCE OVERVIEW

During the financial year 2021-22, Orient Electric recorded revenue from operations of Rs. 2,448.37 crores 20.46% higher than Rs. 2,032.60 crores in FY 2020-21. Profit before and after tax for the financial year 2021-22 were at Rs. 169.76 crores and

Rs. 126.64 crores, respectively as compared to profit before and after tax of Rs. 161.90 crores and Rs. 119.74 crores, respectively for the financial year 2020-21. For detailed analysis of the financial performance of the Company, refer to the Management Discussion & Analysis Report, forming part of the Annual Report.

AWARDS & ACCOLADES

Orient Electric has been certified as a ‘Great Place To Work? for the third year in a row, for the period March 2022 - March 2023 with improved score over last year. The commitment to the belief that a strong and high-trust team is a key pillar for sustained performance of the Company stands emboldened with this certification.

Company has been conferred with the prestigious ‘National Energy and Conservation Award 2021? under the category "Most Energy Efficient Appliance of the Year - LED Bulb" for its 9 Watt Self Ballasted LED Bulb. The prestigious award instituted by the Bureau of Energy Efficiency (BEE) identifies and recognises prominent achievements in energy conservation.

Your company has also been conferred following accolades:

• Recognised as one of ‘India?s Best Brands? for the year 2021 by ET Edge - An Economic Times Initiative. This recognition is a testimony to customer?s trust in the brand and further strengthens our resolve to deliver compelling consumer experiences;

• ‘Superbrand 2021? status for Fans and Air Coolers retained for the fourth time and second time, respectively, and first time for Lighting;

• ‘Prestigious Brands of Asia 2021-22? by Herald Global and BARC Asia. This recognition reaffirms our sustained commitment to customer-centric innovation and is a fine validation of our strategic direction and choices made over the years.

DIVIDEND

The Board of Directors at their meeting held on May 10, 2022, have recommended payment of Rs. 1.25 (125%) per equity share of the face value of Re. 1 /- each as final dividend for the financial year ended March 31, 2022. The payment of final dividend is subject to the approval of the shareholders at the ensuing Annual General Meeting ("AGM") of the Company.

During the year under review, the Board of Directors of the Company at their meeting held on January 20, 2022, declared an Interim dividend of Rs. 0.75 (75%) per equity share of the face value of Re. 1 each. The interim dividend was paid to the shareholders on February 10, 2022.

The total dividend amount for the financial year 2021-22, including the proposed final dividend, amounts to Rs. 2.00 per equity share of the face value of Re. 1 each.

In view of the changes made under the Income-Tax Act, 1961, by the Finance Act, 2020, dividends paid or distributed by the Company 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 as prescribed.

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 Listing Regulations is available on the Company?s website: https://www.orientelectric.com/images/investors/dividend-distribution-policy.pdf

Dividend paid /recommended by the Company during the last three financial years:

FY 2021-22 FY 2020-21 FY 2019-20
Dividend per share (Rs.) Dividend payout Rs. ( crore) Dividend per share (Rs.) Dividend payout (Rs. crore) Dividend per share (Rs.) Dividend payout (Rs. crore)
Interim Dividend 0.75 15.91 0.75 15.91 0.65 16.63#
Final Dividend 1.25* 26.52* 1.25 26.52 0.50 10.61
Total Dividend 2.00 42.43 2.00 42.43 1.15 27.24
Total Dividend ratio 200% 200% 115%

*Recommended by the Board of Directors at its meeting held on May 10, 2022. The payment is subject to the approval of the shareholders at the ensuing AGM of the Company to be held on July 25, 2022. Book-closure for the purpose of dividend is from Tuesday, July 19, 2022 to Monday, July 25, 2022 (both days inclusive). # Including dividend distribution tax.

PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS

During the financial year ended March 31, 2022, Company has not given any loans, provided any guarantees / securities or made investments that are covered under the provisions of Section 186 of the Act.

TRANSFER TO GENERAL RESERVE

During the financial year ended March 31, 2022, Company has transferred Rs. 15 crores to the General Reserve of the Company.

DEPOSITS

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

HOLDING, SUBSIDIARY, ASSOCIATE AND JOINT VENTURE COMPANIES

The Company had no holding, subsidiary, associate or joint venture company during the financial year 2021-22.

Dubai Office: 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, the Company continues to maintain a representative office (Branch Office) in Dubai Multi Commodity Centre, free trade zone of Dubai.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

In accordance with the provisions of Section 152 and other applicable provisions, if any, of the Act and the Articles of Association of the Company, Mr. Chandra Kant Birla, Non-Executive Director and Chairman of the Company, is liable to retire by rotation at the ensuing AGM and being eligible has offered himself for re-appointment.

A brief resume, nature of expertise, details of directorships held by Mr. Chandra Kant Birla in other companies, along with his shareholding in the Company, as stipulated under Secretarial Standard – 2, issued by Institute of Company Secretaries of India, and Regulation 36 of the Listing Regulations, is appended as an Annexure to the Notice of the ensuing AGM.

Mr. Rakesh Khanna was re-appointed as the Managing Director of the Company with effect from January 23, 2022 for a period of two years. The said re-appointment was approved by the shareholders, through Postal Ballot, on February 27, 2022.

The Managing Director & CEO and Independent Directors of the Company are not liable to retire by rotation.

Save as provided above, during the year under review, there were no other changes in Directorship of the Company.

Declaration from Directors

None of the Directors of the Company are disqualified for being appointed as Directors, as specified in Section 164(2) of the Act read with Rule 14(1) of the Companies (Appointment and Qualification of Directors) Rules, 2014.

Key Managerial Personnel

Mr. Rakesh Khanna, Managing Director & CEO, Mr. Saibal Sengupta, Chief Financial Officer and Mr. Hitesh Kumar Jain, Company Secretary, are the Key Managerial Personnel of the Company. During the year under review, there were no changes in the Key Managerial Personnel of the Company.

BOARD DIVERSITY

The Company recognizes and embraces the importance of a diverse Board in its success. We believe that a truly diverse board will leverage differences in thought, perspective, knowledge, skill, regional and industry experience, cultural and geographical backgrounds, age, ethnicity, race and gender, that will help the Company retain its competitive advantage.

BOARD EVALUATION

Pursuant to the provisions of the Act and the Listing Regulations, the Board has carried out an annual evaluation of its own performance and that of its Committees as well as performance of all the Directors individually, including Chairman & Vice – Chairman of the Board, Independent Directors, and Managing Director & CEO of the Company.

Feedback Mechanism

Feedback was sought by way of a structured questionnaire 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.

Evaluation of Committees

The performance evaluation of Committees was based on criteria such as structure and composition of Committees, attendance and participation of member of the Committees, fulfilment of the functions assigned to Committees by the Board and applicable regulatory framework, frequency and adequacy of time allocated at the Committee meetings to fulfil duties assigned to it, adequacy and timeliness of the agenda and minutes circulated, comprehensiveness of the discussions and constructive functioning of the Committees and effectiveness of the Committee?s recommendation for the decisions of the Board.

Evaluation of individual Directors and the Board

The performance evaluation of the Chairman, Non-Independent Directors and the Board was first carried out by the Independent Directors. Thereafter, the Board Members evaluated the performance of each individual Director, including the Managing Director & CEO, considering the views of the Executive Directors and Non-Executive Directors, without involving the Director being evaluated.

Criteria for Chairman

The performance evaluation of Chairman was based on various criteria, inter-alia, including style of Chairman?s leadership, effective engagement with other Board members during and outside the meetings, allocation of time provided to other Board members at the meetings, effective engagement with shareholders during general meetings.

Result of Evaluation

The result of evaluation showed high level of commitment and engagement of the Board, its various committees and leadership. The Directors expressed their satisfaction with the evaluation process. During the year under review, the Nomination and Remuneration Committee ascertained and reconfirmed that the deployment of "questionnaire" as a methodology, is effective for evaluation of performance of the Board, its Committees and individual Directors.

DECLARATION BY INDEPENDENT DIRECTORS

The Company has received declarations of Independence as stipulated under Section 149(7) of the Act from Independent Directors confirming that he/she is not disqualified from being appointed/ continuing as Independent Director as laid down in section 149(6) of the Act read with rules related thereto and Regulation 16(1)(b) of Listing Regulations. The Independent Directors have complied with the Code for Independent Directors prescribed in Schedule IV to the Act. The Independent Directors of the Company have registered themselves with the data bank maintained by Indian Institute of Corporate Affairs. They have also confirmed on the compliance of Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014.

FAMILIARIZATION PROGRAMME FOR INDEPENDENT DIRECTORS

The members of the Board of the Company are provided with many opportunities to familiarise themselves with the Company, its management and its operations. The Directors are provided with all the documents to enable them to have a better understanding of the Company, its operations and the industry in which it operates.

All the Independent Directors of the Company are made aware of their roles and responsibilities at the time of their appointment through a formal letter of appointment, which also stipulates the terms and conditions of their engagement. Directors are also informed of the various developments in the Company through presentations during the meetings.

Pursuant to Regulation 25(7) of the Listing Regulations, the Company imparted various familiarization programmes for its Directors which includes review of industry outlook, regulatory updates with respect to the Act, Listing Regulations, taxation and other matters by Auditors, Company Secretary and experts, internal control over financial reporting, Prevention of Insider Trading Regulations, framework for related party transactions. Pursuant to Regulation 46 of the Listing Regulations, the details required are available on the website of your Company at the web link: https://www.orientelectric. com/images/investors/familiarisation-programme.pdf

DIRECTOR?S 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, 2022, 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

Disclosures relating to remuneration of Directors and employees as per section 197(12) of the Act, read with Rule 5(1), (2) and (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed as Annexure A to the Board?s Report.

BOARD AND ITS COMMITTEES

In compliance with the statutory requirements, the Company has formulated mandatory Committees viz. Audit Committee, Nomination and Remuneration Committee, Corporate Social Responsibility Committee, Risk Management Committee and Stakeholders? Relationship Committee.

During the year under review, all the recommendations made by the Committees of the Board, including the Audit Committee, were accepted by the Board.

The Board of Directors met five (5) times during the financial year ended March 31, 2022. A detailed update on the Board, its composition, governance of committees including detailed charter, terms of reference of various Board Committees, number of Board and Committee meetings held during the financial year ended March 31, 2022 and attendance of the Directors at each meeting is provided in the Report on Corporate Governance, which forms part of the Annual Report.

AUDIT COMMITTEE

The Audit Committee comprises of Mr. TCA Ranganathan, Mr. K Pradeep Chandra and Mrs. Alka Marezban Bharucha, all being Independent Directors and Mr. Desh Deepak Khetrapal, being Non- Executive Non- Independent Director.

Managing Director & CEO, Chief Financial Officer, Group Internal Audit Head, Internal Audit Head of the Company, Company Secretary and Statutory Auditors are the permanent invitees to the Committee. Further details relating to the Audit Committee, including number of meetings held during the year, are provided in the Corporate Governance Report forming part of the Annual Report.

During the year under review, all recommendations made by the Audit Committee were accepted by the Board of Directors.

MEETING OF INDEPENDENT DIRECTORS

A separate meeting of the Independent Directors ("ID Meeting") was convened and held on November 26, 2021, 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 ID Meeting, the collective feedback of each of the Independent Directors was presented before the Board.

SHARE CAPITAL

The Company?s authorised share capital during the financial year ended March 31, 2022, remained at Rs. 25,00,00,000 (Twenty Five Crores) of Re. 1 each, and the paid up equity share capital remained at Rs. 21,21,85,502 (Twenty One Crores Twenty One Lacs Eighty Five Thousand Five Hundred Two Only) of Re. 1 each. No new shares were issued during the year under review.

Further, as per the provisions of Regulations 34, 39 read with Schedule V(F) of Listing Regulations details of equity shares lying in Orient Electric Limited - Unclaimed Suspense Account, as on March 31, 2022, are provided in the Corporate Governance Report forming part of this Annual Report.

ORIENT ELECTRIC EMPLOYEE STOCK OPTION SCHEME - 2019

‘Orient Electric Employee Stock Option Scheme-2019? ("ESOP Scheme"), adopted by the Company during the financial year 2018-19, as part of its Long-Term Incentive Programme in line with growth objective of the Company and with the intention to attract, motivate and retain high quality talent at the senior level, is in compliance with the SEBI (Share Based Employee Benefits) Regulations, 2014 [now replaced by 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 in compliance with 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-31Mar22.pdf

During the year under review there was no change in the ESOP Scheme 2019. No new stock option was granted and no stock option, granted earlier, vested during the financial year 2021-22. More details on ESOPs are provided in the notes to accounts of the financial statements for the financial year 2021-22, forming part of the Annual Report.

M/s A. K. LABH & Co., Company Secretaries, Secretarial Auditors of the Company, has certified that the Company?s 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

M/s. S.R. Batliboi & Co. LLP, Chartered Accountants, (ICAI Firm Registration Number 301003E/ E300005), were appointed as the Statutory Auditors of the Company at the 1st AGM of the Company, to hold office till the conclusion of the ensuing 6th AGM.

M/s. S.R. Batliboi & Co. LLP, Chartered Accountants, are eligible to be re-appointed for a further term of 4 (four) years, in terms of provisions of Sections 139 and 141 of the Act, read with the Rules made thereunder.

Accordingly, the Board of Directors of the Company at their meeting held on May 10, 2022 basis the recommendation of the Audit Committee and subject to the approval of the shareholders of the Company at the ensuing AGM, have approved the re-appointment of M/s. S.R. Batliboi & Co. LLP, Chartered Accountants, (Firm Registration No. 301003E/ E300005), as the Statutory Auditors, for a further period of 4 (four) years i.e. from the conclusion of the 6th AGM till the conclusion of 10th AGM of the Company.

The Company has received written consent and certificate of eligibility in accordance with sections 139, 141 and other applicable provisions of the Act and Rules made thereunder, from M/s. S.R. Batliboi & Co. They have confirmed about their independence and that they hold a valid certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India (ICAI) as required under the Listing Regulations.

The Auditors have issued an unmodified opinion on the financial statements of the Company for the financial year ended March 31, 2022. The said Report of the Auditors is self-explanatory and therefore does not require further comments and explanations. The Auditors? Report for the financial year ended March 31, 2022 on the financial statements of the Company forms part of this Annual Report.

Cost Auditor

The Company has maintained cost records for certain products as specified by the Central Government under subsection (1) of section 148 of the Act. Mr. Somnath Mukherjee, Cost Accountant in Practice (M. No. – 5343) has carried out the cost audit for applicable products during the financial year 2021-22.

Mr. Somnath Mukherjee has confirmed his eligibility for being appointed, and have consented to act, as the Cost Auditor of the Company for the financial year 2022-23 too. The Board of Directors of the Company, on the recommendations of the Audit Committee, have appointed Mr. Somnath Mukherjee, Cost Accountant in Practice (M. No. – 5343) as the Cost Auditors of the Company to conduct the audit of cost records of certain products for the financial year 2022-23.

The remuneration proposed to be paid to the Cost Auditor, subject to ratification by the shareholders of the Company at the ensuing 6th AGM, is set out in the Notice of the ensuing 6th AGM.

Secretarial Auditor

M/s A. K. Labh & Co., Company Secretaries, (Certificate of Practice No. 3238), appointed as the Secretarial Auditors, have carried out an audit of the secretarial records of the Company for the financial year 2021-22. The Secretarial Audit Report for the financial year ended March 31, 2022 under the Act, read with Rules made thereunder and Regulation 24A of the Listing Regulations, is set out in Annexure B to this Report.

Pursuant to requirement of Regulation 24A of the Listing Regulations, the Secretarial Compliance Report for the financial year ended March 31, 2022, in relation to compliance of all applicable SEBI Regulations and circulars/guidelines issued thereunder, issued by M/s A. K. Labh & Co., Company Secretaries, has been filed with the stock exchanges within the prescribed time limit.

The aforesaid Secretarial Audit Report and Secretarial Compliance Report do not contain any qualification, reservation or adverse remark and therefore do not require any further clarification or explanation.

M/s A. K. Labh & Co., Company Secretaries, have provided a consent to the Company to act as the Secretarial Auditors for conducting the audit of the secretarial records for the financial year ending March 31, 2023, and have also confirmed that their appointment, if made, would be within the limits laid down by the Act and Rules made thereunder and they are not disqualified for being appointed as Secretarial Auditors under the provisions of applicable laws. They have also confirmed that their firm is peer reviewed by The Institute of Company Secretaries of India.

Pursuant to the provisions of section 204 of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board, on the recommendation of the Audit Committee, have appointed M/s A. K. Labh & Co., as the Secretarial Auditor for the financial year ending March 31, 2023.

Reporting by Auditors

During the year under review, the Statutory Auditors, Cost Auditors and 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 142(12) of the Act and the Rules made thereunder was required.

SUSTAINABILITY JOURNEY

The Environment, Social and Governance ("ESG") components are factors that help ascertain both investment decisions and risk management with a lens of sustainability within the organization. The primary objective is to build a culture that encourages, promotes and achieves ethical business conduct which is more environmentally and socially conscientious, while adhering to prescribed/ applicable rules and regulations, and are more likely to sustainably succeed in the long run.

The growing awareness of ESG priorities are no longer a choice but a necessity. Climate change, a risk emerging globally, is a key concern and your Company is addressing it through various ESG initiatives in products, investments and processes. During the financial year 2021-22, the Company undertook a comprehensive materiality assessment exercise to gather insights on emerging ESG issues that may impact our business in the future. The objective was to assess the Company?s current status as an organization basis the worldwide tested parameters of ESG Key Performance Indicators and to lay down the road map for future actions to effectively contribute in achieving the global vision of considerably reducing carbon footprint.

The Company relentlessly strives to provide long-term sustainable value to all its stakeholders including customers, investors, suppliers, employees, government & regulatory bodies and communities. While we do so, we stay consumer-centric and innovation-driven reimagining impactful possibilities in this digital world.

BUSINESS RESPONSIBILITY REPORT

Your Company strongly believes that sustainable and inclusive growth is possible by using the levers of environmental and social responsibility while setting aspirational targets and improving economic performance to ensure business continuity and rapid growth.

Your Company is committed to build competitive advantage in achieving high shareholder returns through consumer centricity, innovation, good governance and inclusive human development while being sensitive to the environment. The ‘Business Responsibility Report? of your Company for the financial year 2021-22 forms part of this Annual Report as required under Regulation 34(2)(f) of the Listing Regulations.

CORPORATE GOVERNANCE

Your Company is committed to maintain the highest standards of Corporate Governance and adheres to the Corporate Governance requirements set out by the Securities and Exchange Board of India. The report on Corporate Governance as stipulated under the Listing Regulations forms part of this Annual Report.

Your Company has duly complied with the Corporate Governance requirements as set out under Chapter IV of the

Listing Regulations. M/s. S.R. Batliboi & Co. LLP, Chartered Accountants, vide their certificate dated May 10, 2022, has confirmed that the Company is and has been compliant with the conditions stipulated in the Chapter IV of the Listing Regulations. The said certificate is annexed to the Corporate Governance Report. A Certificate of 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.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

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

CORPORATE SOCIAL RESPONSIBILITY

In terms of the provisions of section 135 of the Act read with Companies (Corporate Social Responsibility Policy) Rules,2014 and any amendment thereof, the Board of Directors of your Company has constituted a Corporate Social Responsibility (" CSR") Committee which is chaired by Mr. K Pradeep Chandra, Independent Director. The other members of the Committee are Mr. Desh Deepak Khetrapal, Non-Executive Director and Mr. TCA Ranganathan, Independent Director. Further, Mr. Rakesh Khanna, Managing Director & CEO, Mr. Saibal Sengupta, Chief Financial Officer and Mr. Hitesh Kumar Jain, Company Secretary, are the permanent invitees to the Committee.

During the year, the Company reviewed its CSR Policy and necessary amendments, including the new areas of CSR as specified under Schedule VII of the Act, were incorporated. The CSR Policy of the Company is available on its website viz. https://www.orientelectric.com/images/investors/ corporate-social-responsibility-policy.pdf

Your Company is a caring corporate entity and lays significant emphasis on development of the communities around which it operates. During the year, on the recommendation of the CSR Committee and as approved by the Board, your Company has executed several projects in the areas of Women Empowerment, Education, Health Care and Sustainability. As per section 135 of the Act, read with Companies (Corporate Social Responsibility Policy) Rules, 2014 ("CSR Rules") the companies are required to spend minimum 2% of their average net profit for the last three financial years. Basis which the minimum requirement for the Company was Rs. 2.64 crores for the financial year 2021-22.

As per the 3rd proviso to section 135(5) of the Act as amended by the Companies (Amendment) Act, 2020 read with Rule 7 of the CSR Rules as amended by the Companies (Corporate Social Responsibility Policy) Amendment Rules, 2021, the companies are now allowed to carry forward the excess amount spent on CSR during a financial year for set off against the CSR obligations of upto subsequent three financial years. In line with this proviso, the Company has a carry forward excess spent amount of Rs. 1.03 crores from the previous financial year 2020-21. Therefore, the net spent requirement for the Company was Rs. 1.61 crores for the financial year 2021-22, against which the Company had spent an amount of Rs. 1.82 crores and consequently excess amount of Rs. 0.21 crores has been carried forward to the next two financial years. The Annual Report on CSR activities is attached as Annexure C to this Report.

RISK MANAGEMENT

Risk management is embedded in Orient Electric?s operating framework. The Company believes that risk resilience is key to achieving higher growth. To this effect, there is a process in place to identify key risks across the functions and prioritise relevant action plans to mitigate these risks.

To have a more robust process, the Company had constituted a Risk Management Committee to focus on risk management, including determination of the Company?s risk appetite, risk tolerance and regular risk assessments (risk identification, risk quantification and risk evaluation).

The Risk Management Framework is reviewed periodically by the Risk Management Committee, which includes discussing the management submissions on risks, prioritising key risks and approving action plans to mitigate such risks. During the year under review, your Company has revisited the Risk Management Framework and Risk Events applicable on the Company. The Company has revamped the entire risk governing structure by forming a Governance Risk and Compliance Committee ("GRCC") which consists of Managing Director & CEO, Chief Risk Officer, Business Units heads and Internal Auditors. Entire risk events were revamped after detailed deliberation by GRCC on each risk and their categorisation to make the entire Risk Framework more robust. A comprehensive Business Continuity Plan is created considering the existing and emerging risks. Revised risk framework comprises of risk governance, risk events, risk ratings, risk effectiveness, risk mitigation and business continuity plan.

The objective of the Company?s Risk Management Policy is to have a well-defined approach to risk. The policy lays down broad guidelines for timely identification, assessment, and prioritisation of risks affecting the Company in the short term and in the foreseeable future. The policy suggests framing an appropriate response action for the key risks identified, so as to make sure that the risks are adequately addressed or mitigated.

The Chief Risk Officer presents before the Risk Management Committee, risk matrix along with action plans.

Details on risk management forms part of the Management Discussion and Analysis Report under the section ‘Threats & Concerns?, which forms part of this Annual Report. At present, in the opinion of the Board of Directors, there are no risks which may threaten the existence of the Company.

INTERNAL FINANCIAL CONTROLS

The Company has adequate Internal Financial Control System over financial reporting which ensures that all transactions are authorized, recorded, and reported correctly in a timely manner. The Company?s Internal Financial Control over financial reporting is designed to provide reliable financial information and to comply with applicable accounting standards.

The Company has laid down Standard Operating Procedures and policies to guide the operations of the business. Functional heads are responsible to ensure compliance with all laws and regulations and also with the policies and procedures laid down by the management.

The Company periodically tracks all amendments to Accounting Standards and makes changes to the underlying systems, processes and financial controls to ensure adherence to the same. All resultant changes to the policy and impact on financials, if any, are disclosed after due validation with the Statutory Auditors and the Audit Committee.

Your Company uses latest generation SAP S4 HANA systems as a business enabler, to maintain its Books of Account and enabling system generated financial reporting. The transactional controls built into the SAP ERP systems ensure appropriate segregation of duties, appropriate level of approval mechanisms and maintenance of supporting records. The systems, Standard Operating Procedures and controls are periodically reviewed by the management. These systems and controls are audited by Internal Audit team and their findings and recommendations are reviewed by the Audit Committee which ensures the implementation.

Your Company has in place adequate internal financial controls with reference to the Financial Statements commensurate with the size, scale and complexity of its operations. Such controls have been assessed during the year under review taking into consideration the essential components of internal controls stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by The Institute of Chartered Accountants of India. Based on the results of such assessments carried out by the management, no reportable material weakness or significant deficiencies in the design or operation of internal financial controls was observed.

Your Company recognizes that the Internal Financial Controls cannot provide absolute assurance of achieving financial, operational and compliance reporting objectives because of its inherent limitations. Also, projections of any evaluation of the Internal Financial Controls to future periods are subject to the risk that the Internal Financial Controls may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate. Accordingly, regular audits and review processes by multiple agencies ensure that such systems are reinforced on an ongoing basis.

PROTECTION OF WOMEN AT WORKPLACE

The Company believes that every employee should have the opportunity to work in an environment free from any conduct which can be considered as sexual harassment.

The Company is committed to treating every employee with dignity and respect. The Company has formulated a policy on ‘Prevention of Sexual Harassment at Workplace Policy? as per the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013 and Rules made thereunder. The policy is applicable to all Orient Electric establishments located in India. The policy has been widely disseminated. The Company has constituted Internal Complaints Committees to ensure implementation and compliance with the provisions of the aforesaid Act and the Rules.

This Policy addresses the following major objectives:

• To define Sexual Harassment;

• To lay down the guidelines for reporting acts of Sexual Harassment at the workplace; and

• To provide the procedure for the resolution and redressal of complaints of Sexual Harassment.

The policy lays down a detailed procedure for making a complaint, initiating enquiry therein and satisfactory redressal of the complaint.

Training programs and workshops for employees are organised throughout the year. The orientation programs for new recruits include awareness sessions on prevention of sexual harassment and upholding the dignity of employees. Specific programs have been created on the digital platform to sensitize employees to uphold the dignity of their colleagues and prevention of sexual harassment. During the financial year 2021-22, employees have undergone training through the programs / workshops including the awareness sessions.

During the financial year 2021-22, no complaint was reported under the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and Rules made thereunder and none was pending from the previous financial year.

WHISTLE BLOWER POLICY / VIGIL MECHANISM

Orient Electric encourages an open and transparent system of working and dealing amongst its stakeholders. Orient Electric has adopted a ‘Whistle Blower Policy? which encompasses a comprehensive framework of managing complaints of every stakeholder. It encourages its employees and various stakeholders to raise concerns about illegal / unethical behaviour observed in the Company, compromise / violation of Company?s Code of Conduct or legal or regulatory provisions, corruption, misuse of office, actual or suspected fraud and other malpractices detrimental to the interest of the Company without any fear of reprisal, discrimination, harassment or victimization of any kind.

The policy also covers reporting of instances of leakage/ suspected leakage of unpublished price sensitive information which are in violation to SEBI (Prohibition of Insider Trading) Regulations, 2015 and the Company?s Code of Conduct for Regulating, Monitoring and Reporting Trading by Designated Persons.

All such concerns/ complaints are received by the Ombudsman through a dedicated email ID or by way of letter addressed to the Ombudsman. In case the whistle blower wishes to raise a complaint directly to the members of the Audit Committee, and not through above mentioned normal channels, the complaint may be directly made to the Chairperson of the Audit Committee.

All such complaints are enquired into by the appropriate authority within the Company while ensuring confidentiality on the identity of such complainants. On the basis of their investigation, if the allegations are proved to be correct, then the appropriate disciplinary actions are taken against the responsible employee / person. Corrective measures are also taken in consultation with the concerned stakeholders to avoid repetition of similar instances.

Details of whistle blower complaints received, action taken thereon and the functioning of the whistle blower mechanism are reviewed periodically by the Audit Committee. No person has been denied access to the Chairperson of the Audit Committee. During the financial year 2021-22, one complaint was received and taken up for investigation. Details of whistle blower policy and the complaint received thereunder are available in the Corporate Governance Report that forms part of this Annual Report.

The Whistle Blower Policy is available on the website of the Company at the link https://www.orientelectric.com/images/ investors/whistle-blower-policy.pdf

NOMINATION AND REMUNERATION POLICY

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

• formulate the criteria for Board membership, including the appropriate mix of Executive & Non-Executive Directors and Board Diversity;

• approve and recommend compensation packages and policies for Directors, Key Managerial Personnel and Senior Management Personnel;

• lay down the effective manner of performance evaluation of the Board, its Committees and the Directors; and

• such other matters as provided under section 178 of the Act and under the provisions of Listing Regulations.

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. The Policy is available on the website of the Company at: https://www.orientelectric.com/images/investors/ nomination-remuneration-policy.pdf

RELATED PARTY TRANSACTIONS

All arrangements/ transactions entered into by the Company with its related parties during the financial year 2021-22 were in the ordinary course of business and on an arm?s length basis. During the year under review, the Company has not entered into any arrangement/ transaction with related parties which could be considered material in accordance with the Company?s Policy on Related Party Transactions, as amended, read with the Listing Regulations. As per the requirements of Indian Accounting Standards 24, details of all the transactions of the Company with its related parties have been disclosed in Note no. 33 to the financial statements forming part of this Annual Report.

A declaration in Form AOC-2, as required under sections 134(3)(h) read with 188(1) of the Act is enclosed as Annexure D. The Policy on the Related Party Transactions is available on the Company?s website at: 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

The mandatory Secretarial Standards issued by the Institute of Company Secretaries of India, have been duly complied with by the Company, during the year under review.

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

The details of energy conservation, technology absorption and foreign exchange earnings and outgo as required under section 134(3) of the Act read with Rule 8 of the Companies (Accounts of Companies) Rules, 2014 is annexed as The Annexure E to 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, 2022.

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

There are no material changes and commitments, affecting the financial position of the Company between the end of the financial year ended March 31, 2022 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 is duly certified by the Nodal Officer.

All corporate benefits accruing on such shares including dividend except rights shares shall be credited to IEPF.

During the year under review, unpaid or unclaimed dividend amounting to Rs. 9,33,384/- in respect of shares transferred earlier to IEPF Authority, was transferred by the Company to the IEPF, established by the Government of India. Further, during the year under review no share of the Company was liable to be transferred to the demat account of IEPF Authority pursuant to Section 124(6) of the Act read with IEPF Rules.

The Company has been regularly sending communications to members whose dividends are lying unclaimed requesting them to claim their outstanding dividend amount by providing/updating their bank details with the RTA/Company/ Depository Participant, as the case may be so that their dividend amount do not remain unclaimed for seven consecutive years and thus attracting the provision of transferring the corresponding shares to IEPF Authority.

Details of dividend amounts remitted to IEPF:

Financial Year Type of Dividend Dividend declared on Amount Transferred to IEPF (In Rs.)
2017-18 Interim Dividend February 12, 2018 2,78,619.00
2017-18 Final Dividend July 16, 2018 2,78,619.00
2018-19 Interim Dividend January 28, 2019 2,78,619.00
2018-19 Final Dividend July 16, 2019 2,78,619.00
2019-20 Interim Dividend January 28, 2020 3,62,204.70
2019-20 Final Dividend August 07, 2020 2,47,324.00
2020-21 Interim Dividend January 29, 2021 3,50,926.50
2020-21 Final Dividend July 29, 2021 5,98,075.50
2021-22 Interim Divided January 20, 2022 3,35,308.50
Total 30,08,315.20

ANNUAL RETURN

A copy of the Annual Return of the Company containing the particulars prescribed under section 134(3)(a) and 92(3) of the Act read with Rule 12(1) of the Companies (Management and Administration) Rules, 2014, as amended, in Form MGT-7, as they stood on the close of the financial year i.e. March 31, 2022 is uploaded on the website of the Company in the Investor Section and can be accessed from http://www.orientelectric. com/images/investors/Annual-Report-2021-22.pdf.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY ANY REGULATORS OR COURT

During the financial year 2021-22, no significantly material order was passed by the regulators or courts or tribunals impacting the going concern status and the Company?s operations in the future.

AFFIRMATIONS

To the best of our knowledge and the information available, no application against the Company was filed in any court in India under the Insolvency and Bankruptcy Code, 2016, nor any proceedings thereunder is pending as on March 31, 2022.

During the year under review, there was no instance of onetime settlement with any bank or financial institution.

APPRECIATIONS AND ACKNOWLEDGEMENTS

Your Directors place on record their deep appreciation to employees at all levels for their hard work, dedication and commitment. The Board places on record its appreciation for the support and co-operation your Company has been receiving from all its business partners - suppliers, distributors, retailers and others associated with it. Your Company looks upon them as partners in progress and share with them the rewards of growth.

Your Directors also express their sense of gratitude to all the shareholders, customers, vendors, banks and regulatory authorities, both at the Central and State level, and look forward to their continued support.

For and on behalf of the Board of Directors
For Orient Electric Limited
Chandra Kant Birla
Place: New Delhi Chairman
Date: May 10, 2022 DIN:00118473