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Orient Electric Ltd.

BSE: 541301 | NSE: ORIENTELEC |

Represents Equity.Intra - day transactions are permissible and normal trading is done in this category
Series: EQ | ISIN: INE142Z01019 | SECTOR: Consumer Goods - Electronic

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Annual Report

For Year :
2019 2018

Director’s Report

Dear Shareholder''s,

The Board of Directors are pleased to present the Annual Report on the business and operations of the Company along with the audited financial statements for the financial year ended March 31, 2019.

Summary of Financial Performance

Company''s financial performance during the financial year ended March 31, 2019:

(Rs. In crores)

Particulars

2018-19

2017-18

Revenue

Total Revenue

1,864.40

1,625.58

Other Revenue

9.53

5.51

Total Revenue

1,873.93

1,631.09

Expenses

Operating Expenditure

1,723.12

1,489.04

Depreciation and amortization expense

23.05

19.75

Total Expenses

1,746.17

1,508.79

Profit before finance cost and tax

127.76

122.30

Finance costs

22.86

24.47

Profit before tax (PBT)

104.90

97.83

Tax

35.59

33.80

Profit for the year

69.31

64.03

Other Comprehensive Income

(0.44)

(0.97)

Profit brought forward from last year

47.15

11.86

Transfer to General Reserve

(15.00)

(15.00)

Dividend on equity shares

(21.22)

(10.61)

Corporate Dividend Tax

(4.36)

(2.16)

Balance carried to balance sheet

75.44

47.15

Earnings per Share

3.27

3.02

Operational and Financial Performance

Orient Electric registered a revenue of Rs.1,864.40 crores for the financial year ended March 31, 2019 vs. Rs.1,625.58 crores in the previous year. EBITDA (Earnings before Interest, Tax, Depreciation and Amortisation) stood at Rs.150.14 crores, up by 6.81% compared to the previous year, on the back of growing business operations with interim headwinds of commodity and currency pressures and rising input costs.

Depreciation was higher by 16.71% due to progressive capitalization during the year under review and still remaining in an asset-lite model. The Finance Cost was reduced by 6.58%. Profit before Tax (Before Exceptional Items) stood at Rs.104.23 crores, up by 8.18% compared to the previous year. Net Profit for the financial year ended March 31, 2019 stood at Rs.69.31 crores as compared to Rs.64.03 crores in the previous year.

Dividend

The Board of Directors are pleased to recommend a final dividend of Rs.0.50 per equity share of face value of Rs.1 each for the financial year ended March 31, 2019, subject to the approval of shareholders at the ensuing Annual General Meeting (AGM) to be held on July 16, 2019. The total dividend for the financial year ended March 31, 2019 aggregates to Rs.1 per equity share of face value of Rs.1/- each which includes interim dividend of Rs.0.50 per equity share declared during the financial year 2018-19.

The Register of Members and Share Transfer Books of the Company will remain closed from Saturday, July 13, 2019 to Tuesday, July 16, 2019, both days inclusive, for determining the entitlement of the shareholders to the final dividend for the financial year ended March 31, 2019 and for annual book closure.

Listing of Shares

With the objective of unlocking value for the shareholders, the Consumer Electric Business of Orient Paper & Industries Limited (OPIL) through the Scheme of Arrangement (Scheme) between OPIL and Orient Electric Limited (the Company), transferred and vested into the Company with effect from the appointed date of March 1, 2017. As part of the Scheme and pursuant to the exemption granted by the Securities and Exchange Board of India from the application of Rule 19(2)(b) of the Securities Contracts (Regulations) Rules, 1957, the equity shares of the Company got listed on National Stock Exchange of India Limited (NSE) and BSE Limited (BSE), and trading in the equity shares started w.e. f. May 14, 2018 on both these stock exchanges.

During the financial year 2018-19 there was no change in the outstanding paid-up share capital of the Company.

Orient Electric Employee Stock Option Scheme-2019

In line with growth objective of the Company and with the intention to attract, motivate and retain the high quality talent at the senior level, the Company, during the financial year 2018-19, as part of its Long Term Incentive Programme, introduced ''Orient Electric Employee Stock Option Scheme - 2019'' (ESOP Scheme - 2019). Under the ESOP Scheme -2019 upto 30,00,000 Stock Options can be granted to the eligible employees of the Company, which upon exercise are convertible into equal number of equity shares of the Company of the face value of Rs.1 each at a grant price to be decided by the Nomination and Remuneration Committee. Though there is no holding or subsidiary company of the Company at present, however keeping in mind the future prospects, benefits under the ESOP Scheme - 2019 included the potential eligible employee(s) of any future holding/ subsidiary company(ies) of the Company. In accordance with the provisions of Section 62(1)(b) of the Companies Act, 2013 (Act), the Companies (Share Capital and Debentures) Rules, 2014 and the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 (ESOP Regulations), ESOP Scheme - 2019 is approved by the shareholders through Postal Ballot process effective from March 13, 2019. Nomination and Remuneration Committee of the Board of Directors of the Company is authorised to implement and administer the ESOP Scheme - 2019.

During the financial year 2018-19 a total of 19,98,309 Stock Options were granted to the eligible senior employees of the Company under the ESOP Scheme - 2019. There is no change in the ESOP Scheme - 2019 during the financial year 2018-19 post implementation. The ESOP Scheme - 2019 is in compliance with ESOP Regulations and the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended (Listing Regulations). A certificate from the statutory auditors on the implementation of the ESOP Scheme - 2019 in compliance with ESOP Regulations will be placed at the ensuing Annual General Meeting (''AGM'') for inspection by the shareholders.

Further, details required to be disclosed as per Regulation 14 of ESOP Regulations can be accessed on the website of the Company http://www.orientelectric.com.

Management Discussion and Analysis Report

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

Corporate Governance

Your Company always places major thrust on managing its affairs with diligence, transparency, responsibility and accountability thereby upholding the important dictum that an organisation''s corporate governance philosophy is directly linked to its performance.

The Company is committed in adopting and adhering to established best corporate governance practices. The Board as a body understands and respects its fiduciary role and responsibilities towards the stakeholders of the Company and society at large, and strives to serve their interests, resulting in creation of value for all stakeholders.

A report on corporate governance alongwith a certificate from M/s. S.R. Batliboi & Co. LLP, Chartered Accountants, Statutory Auditors of the Company, confirming the compliance of the conditions of corporate governance, as stipulated under Regulation 34 of Listing Regulations, is attached to this Annual Report.

Holding, Subsidiary and Joint Venture Companies

During the financial year 2018-19, the Company had no holding, subsidiary or joint venture company.

Director''s Responsibility Statement

Pursuant to Section 134(3)(c) of the Act, the Board of Directors, to the best of their knowledge, belief and ability, confirm the following:

a. In the preparation of the Annual Accounts for the financial year ended March 31, 2019, the applicable Accounting Standards have been followed along with proper explanation relating to material departures;

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 this 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 were operating effectively; and

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

Directors and Key Managerial Personnel

Mr. Desh Deepak Khetrapal, Non-Executive Director of the Company, retiring by rotation at the forthcoming AGM and being eligible, offers himself for re-appointment. His brief profile and other details as required under the provisions of the Act and Rules made thereunder, Secretarial Standard issued by the Institute of Company Secretaries of India and Listing Regulations are provided in the Notice to the AGM.

The Board of Directors recommends re-appointment of Mr. Desh Deepak Khetrapal as a Non- Executive Director, liable to retire by rotation, at the ensuing AGM of the Company.

Declaration by Independent Directors

All Independent Directors of the Company have given declaration confirming that they meet the criteria of independence as prescribed both under Section 149(6) of the Act and Regulations 16 and 25 of the Listing Regulations.

(Familiarization Programme for Independent Directors

The Company has adopted a policy on familiarization programme for Independent Directors. All the Independent Directors were briefed with an overview of the Company''s business operations, organization structure and products of the Company. Details of the familiarization programme for Independent Directors are available on the website of the Company and can be accessed at the following link: https://www.orientelectric.com/images/investors/ familiarisation-programme.pdf.

Performance Evaluation

Pursuant to the provisions of the Act, Listing Regulations and Directors'' Performance Evaluation Policy of the Company, the Nomination and Remuneration Committee of the Board has laid down the manner for effective performance evaluation of the Board, it''s committees and individual directors. During the year performance evaluation was carried out by the Board under the supervision of Nomination and Remuneration Committee. Independent Directors carried out the performance evaluation of Non-Independent Directors, the Board as a whole and the Chairman of the Board after taking into account the views of Executive Directors and Non-Executive Directors. The Board evaluated the performance of individual Directors, the Board as a whole and Committees thereof after taking the views of Executive and Non-Executive Directors on structured questionnaire.

Performance of the Board was evaluated by each Director on the parameters such as its role and responsibilities, business risks, contribution to the development of strategy and effective risk management, understanding of operational programmes, availability of quality information in a timely manner, regular evaluation of progress towards strategic goals and operational performance, adoption of good governance practices, adequacy and length of meetings, etc.

Board Committees were evaluated by the respective Committee Members on the parameters such as its role and responsibilities, effectiveness of the Committee vis-a-vis assigned role, appropriateness of Committee composition, timely receipt of information by the Committee, effectiveness of communication by the Committee with the Board, Senior Management and Key Managerial Personnel.

Performance of the Chairperson was evaluated by the Independent Directors on the parameters such as demonstration of effective leadership, contribution to the Board''s work, communication with the Board, use of time and overall efficiency of Board meetings, quality of discussions at the Board meetings, process for settling Board agenda, etc.

Directors were evaluated individually by the Board of Directors (except by the Director being evaluated) on the parameters such as his/ her preparedness at the Board meetings, attendance at the Board meetings, devotion of time and efforts to understand the Company and its business, quality of contribution at the Board meetings, application of knowledge and experience while considering the strategy, effectiveness of follow-up in the areas of concern, communication with Board Members, Senior Management and Key Managerial Personnel, etc. The performance evaluation of the Non - Independent Directors was also carried out by the Independent Directors. Nomination and Remuneration Committee reviews the implementation of performance evaluation criteria.

Board of Directors and its Committees

Company''s Board consists of six Directors comprising of Executive, Non-Executive and Independent Directors, including one Woman Independent Director. As per regulatory requirements and with a view to have focused deliberation, the Board has constituted following Committees:

a. Audit Committee,

b. Nomination and Remuneration Committee,

c. Stakeholders'' Relationship Committee,

d. Corporate Social Responsibility Committee, and

e. Risk Management Committee.

In the last financial year 2018-19, the Board of Directors met five times. The intervening gap between the meetings was within the limits prescribed under the Act and Listing Regulations.

Details of the composition of the Board and its Committees, terms of reference and roles of these Committees along with the meetings of the Board and Committees, held during the year under review, are stated in the Corporate Governance Report forming part of this Annual Report.

Audit Committee

Audit Committee of the Company has been duly constituted by the Board of Directors pursuant to the provisions of the Act and Listing Regulations. During the year under review all recommendations made by the Audit Committee to the Board of Directors were accepted by the Board.

Dividend Distribution Policy

As per the list of top 500 listed companies, based on market capitalization as on March 31, 2019, released by NSE and BSE, your Company falls under the category of top 500 listed companies. Therefore, as per the requirement of Regulation 43A of the Listing Regulations, your Company has formulated a dividend distribution policy. The policy is appended to this Report as Annexure I and can also be accessed at the following web link: https://www.orientelectric.com/ images/investors/dividend-distribution-Policy.pdf.

Vigil Mechanism Whistle Blower Policy

The Vigil Mechanism of your Company is governed by ''Whistle Blower Policy'' (Policy) and Code of Conduct for Directors and Senior Management (Code), through which Directors and Employees are provided a platform to report to the Company Secretary and/or Chairman of the Audit Committee, on a confidential basis, any practices or actions believed to be inappropriate or illegal as per the Company''s Policy and Code. It is affirmed that no person has been denied access to the Audit Committee.

The Whistle Blower Policy is available on the website of the Company and can be accessed through the following web link: https://www.orientelectric.com/images/investors/ whistle-blower-policy.pdf.

During the year under review one compliant was received under the Policy. The Whistle Blower Committee, consisting of senior managerial personnel, including Managing Director & CEO, investigated the matter. Based on the investigation, disciplinary action was taken against two employees, who were found to be involved in the irregularity. The details and status of the said compliant was placed before the Audit Committee and Board of Directors of the Company.

Nomination and Remuneration Policy

Nomination and Remuneration Policy (Remuneration Policy) of the Company is designed to create a high-performance culture. It enables the Company to attract, retain and motivate Directors on the Board, Key Managerial Personnel and the Senior Management Officers. Our business model promotes customer centricity and requires employee mobility to address project needs. The Remuneration Policy supports such mobility through pay models that are at par with industry standards.

The Company pays remuneration by way of salary, benefits, perquisites and allowances (fixed component), variable pay and other benefits under Long Term Incentive Programme (variable component) to its Managing Director & CEO, Key Managerial Personnel and the Senior Management Officers. Annual increments are recommended by the Remuneration Committee and are effective form April 1, of every year. Based on the performance of the Company viz a viz the concerned person, the Remuneration Committee decides and recommends to the Board of Directors the variable amount payable to the Managing Director & CEO, Key Managerial Personnel and the Senior Management Officers. The Remuneration Committee also decides, and recommends to the Board of Directors, the remuneration payable to the Non - Executive Directors. Non - Executive Directors are paid remuneration in the form of commission, apart from sitting fees for attending meetings of the Board and Committees thereof.

The shareholders at the AGM of the Company held on July 16, 2018, approved payment of remuneration in the form of commission to the Non-Executive Directors with the ceiling of 1% of net profits of the Company as computed under Section 198 of the Act, for a period of five years, effective from the financial year 2017-18. Remuneration Committee decides and recommends to the Board of Directors, the quantum and distribution of such commission amongst the Non-Executive Directors.

Details of sitting fees paid to the Non-Executive Directors for attending meetings of the Board and Committees thereof and also the commission for the financial year 2018-19 are provided in the Corporate Governance Report annexed to this Annual Report.

The Nomination and Remuneration Policy of the Company containing the criteria for payment of remuneration to Executive and Non-Executive Directors including independent Directors, as adopted by the Board of Directors is available on the website of the Company and can be accessed through the following web link: https:// www.orientelectric.com/images/investors/nomination-remuneration-policy.pdf.

The key objectives of this Policy include:

(i) guiding the Board of Directors in relation to appointment and removal of Directors, Key Managerial Personnel and Senior Management.

(ii) specifying the manner for effective evaluation of the performance of members of the Board, the Board as a whole and Committees thereof, and review its implementation and compliance.

(iii) recommending to the Board the remuneration, in whatever form, payable to the Directors, Key Managerial Personnel & Senior Management Personnel.

Particulars of Directors and Employees

The statement of Disclosure on the Remuneration of Directors and Key Managerial Personnel as per the provisions of Section 197 of the Act and Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is appended as Annexure II to this Report.

Auditors

Statutory Auditor

M/s S.R. Batliboi & Co. LLP, Chartered Accountants (ICAI Firm Registration Number 301003E/ E300005) are the Statutory Auditors of the Company who were appointed for a period of five years i.e. to hold office from the conclusion of the 1st AGM till the conclusion of 6th AGM of the Company to be held in the calendar year 2022. In accordance with the Companies (Amendment) Act, 2017, made effective from May 7, 2018 by the Ministry of Corporate Affairs, the appointment of Statutory Auditors is now not required to be ratified by the shareholders of the Company at every AGM. Therefore ratification of their appointment is not being proposed for the shareholder''s approval at the AGM.

Auditors'' Report on the financials of the Company for the financial year 2018-19 is self-explanatory and therefore, does not require further comments and explanation. There is no reservation or qualification in the Auditor''s Report. During the year under review, the Statutory Auditors have not reported any matter under Section 143(12) of the Act, and therefore no details are required to be disclosed under Section 134 (3) (ca) of the Act.

Cost Auditor

In terms of the provisions of Section 148 of the Act read with Companies (Cost Records and Audit) Amendment Rules, 2014, the Board of Directors of your Company have, on the recommendation of the Audit Committee, appointed Mr. Somnath Mukherjee, Cost Accountant in Practice (M. No. - F5343) as Cost Auditors, to conduct the audit of cost records of your Company for the financial year 2019-20, at a remuneration as mentioned in the Notice convening the AGM. As required under the Act, ratification of the remuneration payable to the Cost Auditor for audit of the cost records for the financial year 2019-20, by shareholders is being sought at the ensuing AGM.

The Company has received declaration from Mr. Somnath Mukherjee, Cost Accountant, to the effect that his reappointment would be within the limits prescribed under Section 141(3)(g) of the Act and that he is not disqualified for such re-appointment within the meaning of Section 141 of the Act.

Secretarial Auditor

The Secretarial Audit was carried out by M/s A. K. Labh & Co., Practicing Company Secretaries, (C.P No. 3238) for the financial year 2018-19. The report given by the Secretarial Auditor is annexed as Annexure III and forms integral part of this Report. There is no qualification, reservation or adverse remark in the Secretarial Audit Report. During the financial year 2018-19, the Secretarial Auditor had not reported any matter under Section 143 (12) of the Act, therefore no detail is required to be disclosed under Section 134 (3)(ca) of the Act.

In terms of Section 204 of the Act read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors on the recommendation of the Audit Committee, appointed M/s A. K. Labh & Co., Practicing Company Secretaries, (C.P No. 3238) as the Secretarial Auditor of the Company for the financial year 2019-20. Your Company had received their written consent confirming that their appointment will be in accordance with the applicable provisions of the Act and rules framed thereunder.

|Compliance with Secretarial Standards

During the year under review your Company has complied with the respective Secretarial Standards issued by the Institute of Company Secretaries of India on Board Meetings, General Meetings and Dividend.

Particulars of Loans, Guarantees and Investments

During the financial year 2018-19 your Company has not given any loans, provided any guarantees/securities and made investments which are covered under the provisions of Section 186 of the Act.

Deposits

During the financial year 2018-19 your Company has not accepted any deposits from public under Chapter V of the Act and as such, no amount on account of principal or interest on deposits from public was outstanding as on March 31, 2019.

Related Party Transactions

In line with the requirements of the Act and Listing Regulations, your Company has formulated a Policy on Related Party Transactions which is available on the Company''s website and can be accessed at the following web link: https:// www.orientelectric.com/images/investors/related-party-policy.pdf. This Policy intends to ensure that proper approval, reporting and disclosure processes are in place for all transactions between the Company and its Related Parties.

All Related Party Transactions are placed before the Audit Committee for review and approval. The approval of the Board and shareholders is also taken, wherever such approval is required as per the provisions of Section 188 of the Act, rules made thereunder, Regulation 23 of the Listing Regulations and applicable Accounting Standards. Prior omnibus approval is obtained for Related Party Transactions which are of repetitive nature.

All Related Party Transactions entered during the financial year 2018-19 were in ordinary course of business and at arm''s length basis. During the year under review, your Company had not entered into any material related party transactions i.e. transactions exceeding 10% of the last audited annual consolidated financial statement.

Particulars of contract or arrangements with related parties referred to in Section 188(1) of the Act, in the prescribed Form AOC-2, is annexed as Annexure IV, to this Report. Shareholders may refer to notes to the Financial Statements for details on Related Party Transactions.

Disclosure under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal)Act,2013

As per the requirement of Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013 (''POSH Act'') and rules made thereunder, your Company has adopted a policy on prevention, prohibition and redressal of sexual harassment of women at workplace. The Company has also constituted Internal Complaints Committees. While maintaining the highest governance norms, the Company has appointed external independent person who had worked in this area and have the requisite experience and knowledge in handling such matters, as Member of such Committees. To build awareness in this area, the Company has been conducting induction / awareness programmes in the organisation on a continuous basis.

During the year under review, no complaint of sexual harassment was received by the Company. Details as per Section 21 and 22 of the POSH Act are as under:

Number of cases pending as on the beginning of the financial year

Nil

Number of complaints filed during the financial year

Nil

Number of cases pending as at the end of the financial year

Nil

Risk Management

The Company has an elaborated Risk Management framework in place, which helps in identifying the risks and proper mitigation thereof. During the year under review, as per the requirements of Regulation 21 of the Listing Regulations, to review the risk management process of the Company, the Board of Directors has also constituted a Risk Management Committee. The Committee is responsible for reviewing the risk management plan and ensuring its effectiveness. The Audit Committee has additional oversight in the area of financial risks and controls. The major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continuing basis.

The senior management team sets the overall tone and risk culture of the organization through defined and communicated corporate values, clearly assigned risk responsibilities, appropriately delegated authority, and a set of processes and guidelines which are presented to the Committee and the Board especially with respect to risk assessment and risk minimization procedures. As an organization, it promotes strong ethical values and high levels of integrity in all its activities, which in itself is a significant risk mitigator.

With the growth strategy in place, risk management holds key to the success of our journey of continued competitive sustainability in attaining desired business objectives. The development and implementation of risk management policy has been covered in the Management Discussion and Analysis Report, which forms part of this Annual Report.

Internal Financial Controls and their Adequacy

The Company had laid down a set of internal financial controls to be followed in the business operations. Certain policies and procedures are adopted by the Company for ensuring the orderly and efficient conduct of its business, including adherence to the Company''s policies, safeguarding of its assets, prevention and detection of frauds and errors, accuracy and completeness of the accounting records, and timely preparation of reliable financial information. Audit Committee and the Board, on regular basis evaluates the internal financial control system.

As per the provisions of Section 134(5)(e) of the Act, the Directors have an overall responsibility for ensuring that the Company has implemented robust systems/ framework of internal financial controls to provide them with reasonable assurance regarding the adequacy and operating effectiveness of controls with regard to reporting operational and compliance risks.

The internal financial controls have been embedded in the business processes. Assurance on the effectiveness of internal financial controls is obtained through management reviews, continuous monitoring by functional leaders as well as testing of the internal financial control systems by the internal auditors during the course of their audits.

Conservation of Energy, Technology Absorption and foreign Exchange Earnings & Outgo

a) Conservation of Energy

The Company is an energy intensive unit, hence alternate source of energy may not be feasible. However, regular efforts are made to conserve the energy. The Company evaluates the possibilities and various alternatives to reduce energy consumption.

b) Technology Absorption

The Company is conscious on implementation of latest technologies in key working areas. Technology is ever changing and employees of the Company are made aware of the latest working techniques and technologies through workshops, group e-mails, and discussion sessions for optimum utilization of available resources and to improve operational efficiency.

c) Foreign Exchange Earnings & Outgo

As on March 31, 2019, Company has earned a foreign exchange of Rs.85.36 crores and foreign exchange outgo was Rs.140.92 crores.

Particulars required under Section 134(3)(m) of the Act read with Rule 8 of the Companies (Accounts) Rules, 2014 regarding conservation of energy and technology absorption is enclosed as Annexure V to this Report.

Change in the Nature of Business of the Company

During the year under review, except as stated in this Report, there is no change in the nature of business operations of the Company.

Material Development after the end of the year

No material changes and commitments affecting the financial position of your Company have occurred between the end of the financial year of the Company to which the Financial Statements relate and the date of this Report.

Corporate Social Responsibility

The Board of Directors of your Company has constituted a Corporate Social Responsibility (CSR) Committee pursuant to the provisions of Section 135(1) of the Act. Composition, role and terms of reference of the CSR Committee are stated in the Corporate Governance Report annexed to this Annual Report. The Company has adopted and implemented a CSR Policy which covers activities prescribed in Schedule VII to the Act and sets out the procedure for making contributions. A copy of the Company''s CSR policy is available on the website of the Company and can be accessed through the following web link: https://www.orientelectric.com/ images/investors/corporate-social-responsibility-policy. pdf.

Since the Company was incorporated on October 10, 2016, the average net profit of the Company could be calculated for a period of two preceding financial years as of April 1, 2018. Accordingly, the minimum spending requirement specified under Section 135(5) of the Act was not applicable for the financial year 2018-19.

In accordance with the provisions of Section 134(3)(o) of the Act and Rule 9 of the Companies (Corporate Social Responsibility) Rules, 2014, a report on Corporate Social Responsibility covering brief extract of the CSR policy of the Company is annexed as Annexure VI to this Report.

Investor Education and Protection Fund

Pursuant to the Scheme, the Company had allotted 5,57,238 equity shares against the shares of OPIL which it had transferred to the demat account of Investor Education and Protection Fund (IEPF) Authority for non-encashing of dividend for last 7 years. As per Section 124 (6) of the Act, read with Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 (''the Rules''), the Company has transferred through corporate action, these 5,57,238 equity shares to the demat account of IEPF Authority. Corresponding dividend amount on the said shares, pertaining to financial years 2017-18 (interim and final dividend) and 2018-19 (interim dividend) totaling to Rs.8,35,857/- has also been transferred in the designated bank account of IEPF Authority

Registrar and Share Transfer Agent

With the objective to improve the shareholders'' services and on the recommendation of the Stakeholders'' Relationship Committee, the Board of Directors at their meeting held on January 28, 2019 approved the appointment of Karvy Fintech Private Limited as the new Registrar and Share Transfer Agent (RTA) of the Company in place of existing RTA, MCS Share Transfer Agent Limited. The appointment of new RTA would be effective on the completion of regulatory process and execution of required agreements & documents.

Extract of Annual Return

The extract of annual return in Form MGT-9 as required under the provisions of Section 92(3) of the Act and Rule 12 of the Companies (Management and Administration) Rules, 2014, is annexed as Annexure VII to this Report. Extract of Annual Return has also been placed at the Company''s website and can be accessed at http://www.orientelectric.com/images/ investors/Annual-Report-2018-19.pdf, in terms of the provisions of Section 134(3)(a) of the Act.

Significant and Material Orders Passed by any Regulators or Court

During the year under review no regulator or court has passed any significant and material orders impacting the going concern status of the Company and its future operations. However, the Company, during the year received notice each from NSE and BSE alleging non-compliance of Regulation 29(2) and (3) of Listing Regulations and each imposing fine of Rs.10,000. The Company submitted its response to NSE and BSE clarifying that the Company has not made any default in complying with Regulation 29 of the Listing Regulations and requested for waiver of the fine. In the absence of any revert from NSE and BSE, the Company paid the fine under protest.

Appreciations and Acknowledgements

Your Directors place on record their deep appreciation to employees at all levels for their hard work, dedication and commitment. The enthusiasm and unstinting efforts of the employees have enabled the Company to emerge as a significant player in the industry.

The Board places on record its appreciation for the support and co-operation your Company has been receiving from its suppliers, distributors, retailers, business partners and others associated with it as its trading partners. Your Company looks upon them as partners in its progress and has shared with them the rewards of growth. It will be your Company''s endeavour to build and nurture strong links with the trade based on mutuality of benefits, respect for, and co-operation with, each other, consistent with consumer interests.

Your Directors also take this opportunity to thank all shareholders, clients, vendors, banks, government and regulatory authorities for their continued support.

For and on behalf of the Board of Directors

For Orient Electric Limited

New Delhi Chandra Kant Birla

April 30, 2019 Chairman

Director’s Report