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Notes to Accounts of Orient Bell Ltd.

Mar 31, 2019

NOTE 1 : CORPORATE INFORMATION

Orient Bell Limited (hereinafter referred as the Company) was incorporated on May 18, 1977 and is engaged in the manufacturing, trading and selling of ceramic and floor tiles. The Company is a public limited company incorporated and domiciled in India and has its registered office at Sikandrabad, Uttar Pradesh, India. The Company has its primary listings on Bombay Stock Exchange Limited and the National Stock Exchange of India Limited. The financial statement are approved by the Board of Directors in their Board Meeting held on May 22, 2019.

NOTE 2 : STATEMENT OF COMPLIANCE

The Financial Statements are prepared on an accrual basis under historical cost Convention. These financial statements have been prepared in accordance with the Indian Accounting Standards (Ind AS) as prescribed under Section 133 of the Companies Act, 2013 read with the Companies (Indian Accounting Standards) Rules 2015 as amended and other relevant provisions of the Companies Act, 2013, as applicable.

The Accounting Policies are applied consistently to all the periods presented in the financial statements.

Basis of Preparation and presentation

The financial statements have been prepared on the historical cost convention on accrual basis except for certain financial instruments which are measured at fair value and defined benefit plans — Plan assets measured at fair value at the end of each reporting period, as explained in the relevant accounting policies mentioned.

The financial statements are presented in ‘ and all values are rounded to the nearest Lakhs except otherwise stated.

Going Concern

The board of directors have considered the financial position of the Company at 31st March 2019, the projected cash flows and financial performance of the Company for at least twelve months from the date of approval of these financial statements as well as planned cost and cash improvement actions, and believe that the plan for sustained profitability remains on course.

The board of directors have taken actions to ensure that appropriate long-term cash resources are in place at the date of signing the accounts to fund the Company’s operations.

Recent accounting pronouncement

In March 2019, the Ministry of Corporate Affairs issued the Companies (Indian Accounting Standards) (Amendments) Rules, 2019, notifying amendments to Ind AS 12 ‘Income Taxes’, introduced the Appendix ‘C’ to Ind AS 12 ‘Uncertainty over Income Tax Treatments’, amendments to Ind AS 19, ‘Employee Benefits’ and also introduced new standard Ind AS 116 ‘Leases’. These amendments rules are applicable to the Company from April 1, 2019.

Ind AS 116 Leases :

On March 30, 2019, Ministry of Corporate Affairs has notified Ind AS 116, Leases. Ind AS 116 will replace the existing leases Standard, Ind AS 17 Leases, and related Interpretations. The Standard sets out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract i.e., the lessee and the lessor. Ind AS 116 introduces a single lessee accounting model and requires a lessee to recognize assets and liabilities for all leases with a term of more than twelve months, unless the underlying asset is of low value. Currently, operating lease expenses are charged to the statement of Profit & Loss. The Standard also contains enhanced disclosure requirements for lessees.

Ind AS 12 Appendix C, Uncertainty over Income Tax Treatments:

On March 30, 2019, Ministry of Corporate Affairs has notified Ind AS 12 Appendix C, Uncertainty over Income Tax Treatments which is to be applied while performing the determination of taxable profit (or loss), tax bases, unused tax losses, unused tax credits and tax rates, when there is uncertainty over income tax treatments under Ind AS 12. According to the appendix, companies need to determine the probability of the relevant tax authority accepting each tax treatment, or group of tax treatments, that the companies have used or plan to use in their income tax filing which are to be considered to compute the most likely amount or the expected value of the tax treatment when determining taxable profit (tax loss), tax bases, unused tax losses, unused tax Credits and tax rates.

Amendment to Ind AS 12 - Income taxes :

On March 30, 2019, Ministry of Corporate Affairs issued amendments to the guidance in Ind AS 12, ‘Income Taxes’, in connection with accounting for dividend distribution taxes.

The amendment clarifies that an entity shall recognise the income tax consequences of dividends in profit or loss, other comprehensive income or equity according to where the entity originally recognised those past transactions or events. It is relevant to note that the amendment does not amend situations where the entity pays a tax on dividend which is effectively a portion of dividends paid to taxation authorities on behalf of shareholders.

Amendment to Ind AS 19 - Plan amendment, curtailment or settlement

On March 30, 2019, Ministry of Corporate Affairs issued amendments to Ind AS 19, ‘Employee Benefits’, in connection with accounting for plan amendments, curtailments and settlements.

The amendments require an entity:

- to use updated assumptions to determine current service cost and net interest for the remainder of the period after a plan amendment, curtailment or settlement; and

- to recognise in profit or loss as part of past service cost, or a gain or loss on settlement, any reduction in a surplus, even if that surplus was not previously recognised because of the impact of the asset ceiling.

The Company is currently evaluating the effect of this amendment on the standalone financial statements.

Application of New Accounting Pronouncements

The following Ind AS pronouncements pursuant to issuance of the Companies (Indian Accounting Standards) Amendment Rules 2018, were applied by the Company during the year.

- Ind AS 115, Revenue from contracts with customers with effect from April 1, 2018.

- Appendix B to Ind AS 21, Foreign Currency Transactions and advance consideration with effect from April 1, 2018.

a) The Company has determined its security deposits are not in the nature of loans and accordingly have been classified as part of other financial assets.

b) Out of the above security deposit Rs.10 lakh (March 31, 2018: Rs.10 Lakh) pertains to the related parties.

c) Fixed Deposits with a carrying amount of ‘ Nil (March 31, 2018 : Rs.0.42 Lakh) are subject to first charge to secure the Company’s loans from banks.

d) Fixed Deposits with a carrying amount of Rs.3.65 Lakh (March 31, 2018 : Rs.3.56 Lakh) are pledged with Government Authorities.

a) The Company has no receivables which have significant increase in credit risk (Refer Note 45).

b) No trade or other receivable are due from directors or other officers of the Company either severally or jointly with any other person.

c) Nor any trade or other receivable are due from firms or private companies in which any director is a partner, director or a member.

d) Trade receivables are generally on terms of not more than 90 days.

a) Short-term deposits are made for varying periods of between one day and three months, depending on the immediate cash requirements of the Company, and earn interest at the respective short-term deposit rates.

b) Fixed Deposits with a carrying amount of ‘ Nil (March 31, 2018 : Rs.15 Lakh) are subject to first charge to secure the Company’s loans from banks.

c) For the purpose of the statement of cash flow, cash and cash equivalents are same given above.

a) Terms/ rights attached to equity shares:

The company has only one class of equity shares having a par value of Rs.10 per share. Each holder of equity shares is entitled to one vote per share. The company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting. During the year ended March 31, 2019, the amount of per share dividend proposed as distributions to equity shareholders was Rs.0.50 per share (March 31, 2018: Rs.0.50 per share). In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

a) For Movement during the period in Other Equity, refer “Statement of Change in Equity”.

b) Nature and Purpose of Other Reserves

(i) Capital Reserves

Capital Reserve was carried forward under the previous GAAP from the books of Amalgmating Company at the time of Amalgamation.

(ii) Security Premium Reserve

The amount received in excess of face value of the equity shares is recognised in Securities Premium Reserve. In case of equity-settled share based payment transactions, the difference between fair value on grant date and nominal value of share is accounted as securities premium reserve. The reserve will be utilised in accordance with provisions of the Companies Act 2013.

(iii) Capital Restructuring

Capital Restructuring reserve was carried forward under the previous GAAP from the books of Amalgmating Company at the time of Amalgamation.

(iv) Amalgamation Reserve

Amalgamation reserve was created under the previous GAAP on the basis of scheme of amalgamation of Bell Ceramics Limited with the Company as approved by the High Court of Allahabad and Gujrat in the year ended March 31, 2012.

(v) Share Options Outstanding Account

The fair value of the equity-settled share based payment transactions with employees is recognised in Statement of Profit and Loss with corresponding credit to Employee Stock Options Outstanding Account.

(vi) General Reserve

The Company has transferred a portion of the net profit of the Company before declaring dividend to general reserve pursuant to the earlier provisions of Companies Act 1956 in earlier years. Mandatory transfer to general reserve is not required under the Companies Act 2013.

(vii) Retained Earnings

Retained earnings are the profits that the Company has earned till date, less any transfers to general reserve, dividends or other distributions paid to shareholders.

All the profits made by the Company are transferred to retained earnings from statement of profit and loss. However retained earnings includes Rs.4,340.04 Lakh (March 31, 2018 : Rs.4,401.25 Lakh) on account of amount transferred from revaluation reserve which is not available for distribution (to the extent of value of depreciable assets).

a) For Interest rate and Liquidity risk related disclosures, refer note 45.

b) The Nature of Security for Term Loan are :

i) The above Secured Loans, Rs.4,102.63 Lakh (March 31, 2018: Rs.1,760.08 Lakh) are secured by way of first pari passu charge on entire fixed assets excluding assets having specific charge, both present and future, and collaterally by way of second pari passu charge on the current assets of the Company. These pertains to various bankers and financial institution namely, Tata Capital Financial Services Ltd, ICICI Bank, IDFC Bank and Axis Bank.

ii) Vehicle loans are secured by way of hypothecation of respective vehicles with the various Bankers and Financial Institution namely Daimler Financial Services India Pvt. Ltd., HDFC Bank, ICICI Bank and Axis Bank.

c) The Nature of Security for Cash Credit & Working Capital Loan are :

i) The Company has a consortium of Various bankers namely State Bank of India, Punjab National Bank, IDBI Bank, Indus Ind Bank , IDFC Bank and Axis Bank (hereafter called the “Consortium”) for Non Current Borrowings (secured).

ii) The above Cash Credit and Working Capital Loans Rs.4,301.76 Lakh (March 31, 2018: Rs.3,935.33 Lakh) are primarily secured by way of first pari passu charge on entire current assets of the Company and collaterally by way of second pari passu charge on the entire fixed assets excluding assets having specific charge, both present & future.

iii) The demand loans are repayable on demand and carries interest rate ranges from 8.50% to 11.75% per annum

d) Maturity Profile- Secured Term Loans

e) The term loan(s) carries rate of interest ranging between 8.70% to 12.10% per annum.

f) Maturity Profile- Unsecured Loans

g) The nature of guarantee for Unsecured Loans are :

Unsecured loan from Bank is secured against property of Promoter at Kolkata.

h) Trade deposits are not in the nature of borrowings and hence are re-grouped from Borrowings to Other Financial Liabilities as at March 31, 2019.

a) Trade deposits are repayable on cessation of business transaction with dealers. The trade deposits carry rate of interest @ 7% per annum.

b) Trade deposits are not in the nature of borrowings and hence are re-grouped from Borrowings to Other Financial Liabilities as at March 31, 2019 and March 31, 2018.

c) There are no amounts due for payment to the Investor Education and Protection Fund under Section 125 of the Companies Act, 2013 as March 31, 2019 (March 31, 2018: Nil,).

b) MAT paid can be carried forward for a period of 15 years and can be set off against the future tax liabilities. MAT is recognised as a deferred tax asset only when the asset can be measured reliably and it is probable that the future economic benefit associated with the asset will be realized.

a) Trade payables are non-interest bearing and are normally settled within 90-day terms except for SME’s (if any) which are settled within 45 days.

b) Trade payables to related parties amounts to Rs.921.24 Lakh as at March 31, 2019 (March 31, 2018 : Rs.690.96 Lakh)

c) Trade payables includes Rs.252.31 lakhs as at March 31, 2019 (March 31, 2018 : ‘ Nil) on account of acceptances.

d) As per Schedule III of the Companies Act, 2013 and notification number GSR 719 (E) dated November 16, 2007 & as certified by the management, the amount due to Micro, & small enterprises as defined in Micro, Small and Medium Enterprises Development Act, 2006 is as under:

Disclosure of payable to vendors as defined under the “Micro, Small and Medium Enterprise Development Act, 2006” is based on the information available with the Company regarding the status of registration of such vendors under the said Act and as per the intimation received from them on requests made by the Company. There are no overdue principal amounts / interest payable amounts for delayed payments to such vendors at the Balance Sheet date except disclosed above.

a) Consequent to the introduction of goods and services Tax (GST) with effect from 1 July 2017, VAT/Sales Tax, Excise Duty etc. have been subsumed into GST and accordingly the GST is not recognised as part of revenue from operations . This has resulted in lower reported revenue from operations in the current year in comparison to the revenue from operations to the extent was reported under the pre-GST structure of indirect taxes. Accordingly, the Revenue from operations for the year ended March 31, 2019 are not comparable with year ended March 31, 2018 presented in the financial statement to the extent was reported inclusive of Excise Duty. The following additional information is being provided to facilitate such understanding:

b) Performance Obligation

Revenue is recognised upon transfer of control of products to the customers.

During the year, the Company has not entered into long term contracts with customers and accordingly disclosure of unsatisfied or remaining performance obligation (which is affected by several factors like changes in scope of contracts, periodic revalidations, adjustment for revenue that has not been materialized, tax laws etc.) is not applicable to the Company.

c) Disaggregation of Revenue: The table below presents disaggregated revenues from contracts with customers on the basis of geographical spread of the operations of the Company. The Company believes that this disaggregation best depicts how the nature, amount of revenues and cash flows are affected by market and other economic factors:

e) Trade Receivables and Contract Balances

For Trade Receivables, refer Note No. 11.

Further, the Company has no contracts where the period between the transfer of the promised goods or services to the customer and payment terms by the customer one year. In light of above;

- it does not adjust any of the transaction prices for the time value of money, and

- there is no unbilled revenue as at March 31, 2019.

b) The Company has spent Rs.44.87 Lakh (March 31, 2018 : Rs.34.46 Lakh) towards various schemes of Corporate Social Responsibility as prescribed under section 135 of the Companies Act, 2013. The details are as follows:

(iii) Above includes a contribution of Rs.42.25 Lakh (March 31, 2018: Rs.33.82 lakh) to an entity (Godavari Foundation) over which KMP has significant influence and which is a Trust registered under section 12A of the Income Tax Act, 1961, with the main objectives of working in the areas of social, economic and environmental issues such as rural development programme, granting aid to Institutions, school, colleges etc for Orphan Children and for poor students/people for their education and social welfare and estabilishing and maintaining schools, tube well for general public and also engaged in women empowerment by enhancing their means and capabilities to meet the emerging opportunities.

c) Operating Lease

The Company’s significant lease agreements are in the nature of operating leases for premises used at various depots and showrooms. These lease agreements are cancellable by either parties thereto as per the terms and conditions of the agreements. In respect of these leases, lease rent of Rs.387.03 Lakh (March 31, 2018: Rs.445.82 Lakh) is debited to Statement of Profit and Loss. This amount includes amount on account of amortisation of Deferred Security deposit in accordance with Ind AS 109 and also lease equalisation reserve (net of reversal) charge for the year ended March 31, 2019.

NOTE 3 : INCOME TAX

The major components of income tax expense for the years ended March 31, 2019 and March 31, 2018 are:

NOTE 4 : EARNINGS PER SHARE (EPS)

Earning per share (EPS) is determined based on the net profit attributable to the shareholder before other comprehensive Income. Basic earning per share is computed using the weighted average number of equity shares outstanding during the year whereas Diluted Earning per share is computed using the weighted average number of common and dilutive equivalent shares including Employee Stock Options except for the case where the result becomes anti-dilutive.

(a) For the year ended March 31, 2019, the dilution is considered on account of non vested ordinary shares under Employee Stock Option Scheme, 2018 in accordance with Para 48 of Ind As 33.

NOTE 5 : GRATUITY AND OTHER POST-EMPLOYMENT BENEFIT PLANS

a) Defined Contribution Plans

The Company makes contribution towards Employees Provident Fund and Employee’s State Insurance scheme. Under the rules of these schemes, the Company is required to contribute a specified percentage of payroll costs. The Company during the year recognised the following amount in the Statement of profit and loss account under company’s contribution to defined contribution plan.

The contribution payable to these schemes by the Company are at the rates specified in the rules of the schemes.

b) Defined Benefit Plans

In accordance with Ind AS 19 “Employee benefits”, an actuarial valuation on the basis of “Projected Unit Credit Method” was carried out, through which the Company is able to determine the present value of obligations. “Projected Unit Credit Method” recognizes each period of service as giving rise to additional unit of employees benefit entitlement and measures each unit separately to built up the final obligation. The method is used in following cases :-

i) Gratuity Scheme

The Company has defined benefit gratuity plan. Gratuity is calculated as 15 days salary for every completed year of service or part thereof in excess of 6 months and is payable on retirement / termination/ resignation. The benefit vests on completing 5 years of service by the employee. The Company makes provision of such gratuity asset/ Liability in the books of accounts on the basis of acturial valuation as per projected unit credit method; net with annual contribution made by Company to insurer to provide gratuity benifits by taking scheme of insurance.

ii) Compensated Absences

The Company operates compensated absences plan wherein all permanent employees of the company are entitled to the benefit equivalent to 21 days leave salary for every completed year of service subject to maximum 50 (March 31, 2018: 60) accumulations of leaves except in case of Dora Workers/SKD Workers where maximum accumulation is 60/30 days respectively. The salary for calculation of earned leave is last drawn salary. The same is payable during service, on retirement, withdrawal of scheme, resignation by employee and upon death / disability of employee.

Other than above, the Company has changed its policy for encashment of accumulated leaves beyond 60/50/30 days as applicable, i.e. the same will lapse after the end of financial year. Therefore the Company has not recognised any short term leave encashment expense for the year ended March 31, 2019. However the Company has recognised Rs.39.75 Lakh for the year ended March 31, 2018 in respect of same.

c) The following tables summarize the components of net benefit expense recognised in the Statement of profit and loss and the funded status and amounts recognised in the balance sheet for the defined benefit plan (viz. gratuity and compensated absences). These have been provided on accrual basis, based on year end actuarial valuation.

The Sensitivity analysis above have been determined based on a method that extrapolates the impact on defined benefit obligation as a result of reasonable changes in key assumptions occuring at the end of the reporting period.

Sensitivities due to morality and withdrawals are insignificant and hence ignored.

Sensitivities as to rate of inflation, rate of increase of pensions in payments, rate of increase of pensions before retirement & life expectancy are not applicable being a lump sum benefit on retirement.

NOTE 6 : CONTINGENT LIABILITIES (TO THE EXTENT NOT PROVIDED FOR) AND COMMITMENTS

(i) Commitments

Estimated amount of contracts remaining to be executed on capital account (net of advances) and which have not been provided for in the financial statements, amounts to Rs.41.54 Lakh (March 31, 2018: Rs.1,584.71 Lakh). The Company does not have any other long term commitments or material non-cancellable contractual commitments, which may have a material impact on the financial statements.

(ii) Contingent Liabilities

a) The Company has reviewed all its pending claims, litigations and other proceedings and has adequately provided for wherever required. However, wherever it is difficult for the Company to estimate the timings of cash outflows, if any, in respect of the above as it is determinable only on receipt of judgement/decisions pending with various forums/authorities, the Company has disclosed the same as Contingent Liabilities (pending resolution of the respective proceedings).

The Company does not expect the outcome of these proceedings to have a material or adverse effect on financial position of the Company. Also, the Company does not expect any reimbursements in respect of the above contingent liabilities.

c) The Company has not made the provision of bonus for the F.Y. 2014-15 on account of retrospective amendment made by The Payment of Bonus (Amendment) Act , 2015 keeping in view the disposal of writ petition vide order no. WP(C) NO. 3024/2016 (C) dated 27th January 2016 passed by the Hon’ble Kerala High Court.

d) The Company is in the process of evaluating the impact of the recent Supreme Court Judgment in case of “Vivekananda Vidyamandir And Others Vs The Regional Provident Fund Commissioner (II) West Bengal” and the related circular (Circular No. C-I/1(33)2019/Vivekananda Vidya Mandir/284) dated March 20, 2019 issued by the Employees’ Provident Fund Organisation in relation to non-exclusion of certain allowances from the definition of “basic wages” of the relevant employees for the purposes of determining contribution to provident fund under the Employees’ Provident Funds & Miscellaneous Provisions Act, 1952.

NOTE 7 : CAPITAL MANAGEMENT

The Company’s objective for managing capital is to ensure:

- ability to continue as a going concern, so that the Company can continue to provide returns to shareholders and benefits for other stakeholders, and

- maintain optimal capital structure to reduce the cost of capital.

The Company manages its capital structure and makes adjustments to it in the light of changes in economic conditions. In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders, return capital to shareholders or issue new shares.

The Company monitors capital structure using Gearing Ratio, which is calculated as under:

(a) No changes were made in the objectives, policies or processes for managing capital during the years ended March 31, 2019 and March 31, 2018.

(b) For the purpose of Capital Management, capital includes issued equity capital & all other reserve attributable to the equity holders of the Company.

NOTE 8 : DERIVATIVE INSTRUMENTS AND UNHEDGED FOREIGN CURRENCY EXPOSURE

The Company does not have any long term contracts including derivative contracts for which there are any material forseeable losses. The amount of foreign currency exposure that are not hedged by derivative instruments or otherwise are as under :-

NOTE 9 : SEGMENT INFORMATION

According to Ind AS 1 08, identification of operating segments is based on Chief Operating Decision Maker (CODM) approach for making decisions about allocating resources to the segment and assessing its performance. In Orient Bell Limited, the decision makers view the operating results internal division wise (Ceramic, Vitrified Polished). Accordingly, such segments may be presented under Ind AS 1 08. However, these segments have been aggregated because the core principles, economic characteristics, nature of products, production process, distribution method, regulatory environment and type of customers in all the divisions are similar. Hence the disclosure requirement of Ind AS 108 of “Segment Reporting” is not considered applicable. Further the Company sells its products mostly within India with insignificant export income and does not have any operation in economic environment with different risk and returns, hence its considered operating in single geographical segment.

Major Customer: No single customers contributed 1 0% or more to the Company’s revenue for year ended March 31, 201 9 and March 31, 2018.

d) Other Transaction

The Company has taken Unsecured loan from Bank against the collateral security on the immovable property of Mr. Mahendra K. Daga (Key Managerial Personnel).

e) Terms and conditions of transactions with related parties

All the transaction with the related parties are made on terms equivalent to those that prevail in arm’s length transactions. Outstanding balances at the year-end are unsecured and carried interest rate. The unsecured loan from bank are secured against the property of Key Managerial Personnel. No expenses has been recognized in the current year in respect of bad or doubtful debts/advances and further no specific provision for doubtful debts/advances has been made in respect of outstanding balances.

f) The remuneration of Key Managerial Personnel does not include amount in respect of Gratuity and Leave Encashment payable as the same are not determinable as individual basis for the KMP. The aforesaid liabilities of Gratuity and Leave Encashment are provided for company as whole.

g) Disclosure in respect of Share Based Payments to related party-Refer Note No. 42.

b) The members of the Company had approved ‘Orient Bell Employee Stock Option Scheme 2018’. The plan envisaged grant of share options to eligible employees at market price as defined in Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014.

Each Employee Stock Option vested in an Employee under the Scheme entitles the holder thereof to apply for and be allotted one equity share of the Company of ‘10 each upon exercise thereof. The Exercise price is ‘‘10’. The exercise period commences from the date of vesting in respect of options granted under the Scheme and ends upon the expiry of three years from the date of each vesting.

c) The maximum number of shares allocated for allotment under 2018 Share Schemes is 2,00,000 (two lakhs) equity share of ‘10/each. The schemes are monitored and supervised by the Compensation Committee of the Board of Directors in compliance with the provisions of Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 and amendments thereof from time to time.

NOTE 10 : FAIR VALUE DISCLOSURE

Set out below, is a comparison by class of the carrying amounts and fair value of the Company’s financial instruments Here the disclosure is made for non-current financial assets and non-current financial liabilities, carrying value of current financial assets and current financial liabilities including trade receivable, cash and cash equivalent, other bank balances, other financial assets, trade payables, current borrowing, other current financial liabilities etc. represent the best estimate of fair value.

The management assessed that fair value of these short term financial assets and liabilities significantly approximate their carrying amount largely due to short term maturities of these instruments.

c) Discount Rate Used in Determining Fair Value

The interest rate used to discount estimated future cash flows, where applicable, are based on the incremental borrowing rate of borrower which in case of financial liabilities is average market cost of borrowings of the Company and in case of financial asset is the average market rate of similar credit rated instrument. The Company maintains policies and procedures to value financial assets or financial liabilities using the best and most relevant data available.

The fair value of the financial assets and liabilities is included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.

The following methods and assumptions were used to estimate the fair values:

a) Fair value for security deposits (other than perpetual security deposits) has been presented based on the discounting factor as at the reporting date. Fair value for all other non-current assets and liabilities is equivalent to the amortised cost, interest rate on them is equivalent to the market rate of interest.

b) For other financial assets and liabilities that are measured at fair value, the carrying amounts are equal to the fair values.

NOTE 11 : FAIR VALUE HIERARCHY

All financial instruments for which fair value is recognised or disclosed are categorised within the fair value hierarchy, described as follows, based on the lowest level input that is insignificant to the fair value measurement as a whole.

Level 1: Quoted (unadjusted) prices in active markets for identical assets or liabilities.

Level 2: Valuation techniques for which the lowest level input that has a significant effect on the fair value measurement are observable, either directly or indirectly.

Level 3: Valuation techniques for which the lowest level input which has a significant effect on the fair value measurement is not based on observable market data.

The following table provides the fair value measurement hierarchy of the Company’s assets and liabilities

(i) Valuation technique used to determine fair value:

Security Deposit : Discounted Cash Flow Method using risk adjusted discount rate.

(ii) There have been no transfers between level 1 and level 2 category during the year ended on respective reporting date given above.

NOTE 12 : FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

The Company’s principal financial liabilities comprise trade and other payables, borrowings, interest accrued and capital creditors. The main purpose of these financial liabilities is to finance the Company’s operations and to provide guarantees to support its operations. The Company’s principal financial assets includes security deposits, trade receivables, cash and cash equivalents, deposits with bank, interest accrued in deposits, receivables from related and other parties and interest accrued thereon.

The Company is exposed to market risk, credit risk and liquidity risk . The Company’s senior level oversees the management of these risks.

A. Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: interest rate risk, currency risk and other price risk, such as equity price risk and commodity risk.

i) Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company’s exposure to the risk of changes in market interest rates relates primarily to the Company’s debt obligations with floating interest rates.

The Company’s main interest rate risk arises from long-term borrowings with variable rates, which expose the Company to interest rate risk.

The assumed movement in basis points for the interest rate sensitivity analysis is based on the currently observable market environment, showing a significantly higher volatility than in prior years.

ii) Foreign currency risk

Foreign currency risk is the risk that the fair value of future cash flows of an exposure will fluctuate because of changes in exchange rates. Foreign currency risk sensitivity is the impact on the Company’s profit before tax is due to changes in the fair value of monetary assets and liabilities. The following tables demonstrate the sensitivity to a reasonably possible change in USD and EURO exchange rates, with all other variables held constant.

B. Credit Risk

Credit risk is the risk that counterparty will default on its contractual obligations resulting in finance loss to the Company. Credit risk arise from Cash and cash equivalents, deposit with banks, trade receivables and other financial assets measure at amortised cost. The Company continuously monitors defaults of customers and other counterparties and incorporate this information into its credit risk control.

The Company also uses expected credit loss model to assess the impairment loss in Trade receivables and makes an allowance of doubtful trade receivables using this model.

C. Liquidity Risk

Liquidity risk is the risk that the Company may not be able to meet its present and future cash and collateral obligations without incurring unacceptable losses. The Company’s objective is to, maintain optimum levels of liquidity to meet its cash and collateral requirements. It maintains adequate sources of financing including loans from banks at an optimised cost.

NOTE 13 : SUBSEQUENT EVENT : DIVIDEND PAID AND PROPOSED

(a) Dividend paid and Proposed

(b) No material events have occurred between the balance sheet date to the date of issue of these financial statements that could affect the values stated in the financial statements.

NOTE 14 :

In view of the management, the current assets have a value on realization in the ordinary course of business at least equal to the amount at which they are stated in the balance sheet as at March 31, 2019.

Note 15 :

The financial statements of the Company for the year ended 31st March, 2019 were approved by the Board of Directors and authorised for issue on May 22, 2019.


Mar 31, 2018

NOTE 1 : CORPORATE INFORMATION

Orient Bell Limited (hereinafter referred as the Company) was incorporated on May 18, 1977 and is engaged in the manufacturing, trading and selling of reputed brand of ceramic wall and floor tiles. The Company is a public limited company incorporated and domiciled in India and has its registered office at Sikandrabad, Uttar Pradesh, India. The Company has its primary listings on BSE Limited and the National Stock Exchange of India Limited.

NOTE 2 : STATEMENT OF COMPLIANCE

The Financial Statements are prepared on an accrual basis under historical cost Convention except for certain financial instruments which are measured at fair value. These financial statements have been prepared in accordance with the Indian Accounting Standards (Ind AS) as prescribed under Section 133 of the Companies Act, 2013 and other relevant provisions of the Companies Act, 2013, as applicable. The financial statements up to the year ended March 31,2017 were prepared in accordance with Accounting Standards notified under the Companies (Accounting Standards) Rules, 2006 and other relevant provisions of the Act (‘Previously GAAP’). These are Company’s first Ind AS financial statements. The date of transition to Ind AS is April 1, 2016. Refer note 49 for an explanation of the transition from previous GAAP to Ind AS.

Basis of Preparation and presentation

The financial statements have been prepared on the historical cost convention on accrual basis except for certain financial instruments which are measured at fair value at the end of each reporting period, as explained in the relevant accounting policies mentioned. The principal accounting policies are set out below.

The financial statements are presented in ‘ and all values are rounded to the nearest Lakhs except otherwise stated.

Going Concern

The board of directors have considered the financial position of the Company at 31st March 2018 and the projected cash flows and financial performance of the Company for at least twelve months from the date of approval of these financial statements as well as planned cost and cash improvement actions, and believe that the plan for sustained profitability remains on course. The board of directors have taken actions to ensure that appropriate long-term cash resources are in place at the date of signing the accounts to fund the Company’s operations.

Recent accounting pronouncement

In March 2018, the Ministry of Corporate Affairs issued the Companies (Indian Accounting Standards) (Amendments) Rules, 2018, notifying amendments to Ind AS 12 ‘Income Taxes’, Ind AS 21 ‘The effects of changes in foreign exchange rates’ and also introduced new revenue recognition standard Ind AS 115 ‘Revenue from contracts with customers’. These amendments rules are applicable to the Company from April 1, 2018.

Ind AS 115 ‘Revenue from Contracts with Customers’ (Ind AS 115)

Ministry of Corporate Affairs (‘MCA’) has notified new standard for revenue recognition which overhauls the existing revenue recognition standards including Ind AS 18 - Revenue. The new standard provides a control-based revenue recognition model and provides a five step application principle to be followed for revenue recognition:

(i) Identification of the contracts with the customer

(ii) Identification of the performance obligations in the contract

(iii) Determination of the transaction price

(iv) Allocation of transaction price to the performance obligations in the contract (as identified in step ii)

(v) Recognition of revenue when performance obligation is satisfied.

The standard permits two possible methods of transition:

- Retrospective approach - Under this approach the standard will be applied retrospectively to each prior reporting period presented in accordance with Ind AS 8 - Accounting Policies, Changes in Accounting Estimates and Errors

- Retrospectively with cumulative effect of initially applying the standard recognized at the date of initial application (Cumulative catch - up approach) The effective date for adoption of Ind AS 115 is financial periods beginning on or after April 1, 2018.

The management is yet to assess the impact of this new standard on the Company’s financial statements.

Amendment to Ind AS 12

The amendment to Ind AS 12 requires the entities to consider restriction in tax laws in sources of taxable profit against which entity may make deductions on reversal of deductible temporary difference (may or may not have arisen from same source) and also consider probable future taxable profit. The Company is evaluating the requirements of the amendment and its impact on the financial statements.

Amendment to Ind AS 21

The amendment to Ind AS 21 requires the entities to consider exchange rate on the date of initial recognition of advance consideration (asset/liability) for recognising related expense/income on the settlement of said asset/liability. The Company is evaluating the requirements of the amendment and its impact on the financial statements.

a) For Credit risk related disclosures, refer note 46.

b) No trade or other receivable are due from directors or other officers of the Company either severally or jointly with any other person.

c) Nor any trade or other receivable are due from firms or private companies in which any director is a partner, director or a member.

d) Trade receivables are generally on terms of not more than 90 days.

a) Short-term deposits are made for varying periods of between one day and three months, depending on the immediate cash requirements of the Company, and earn interest at the respective short-term deposit rates.

b) Fixed Deposits with a carrying amount of Rs. 15 Lakh ( March 31, 2017: Rs. Nil, April 01, 2016 : Rs. Nil) are subject to first charge to secure the Company’s loans from banks.

c) For the purpose of the statement of cash flow, cash and cash equivalents comprise of the following:

b) The above capital includes equity shares 30,43,451 nos (Rs. 304.34 Lakh) which were alloted during 2012-13 pursuant to the schemes of amalgamation without payments being received in cash.

c) Terms/ rights attached to equity shares:

The Company has only one class of equity shares having a par value of Rs. 10 per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting. During the year ended March 31, 2018, the amount of per share dividend proposed as distributions to equity shareholders was Rs. 0.50 per share (March 31,2007 : Rs.0.50 per share; April 01, 2016: Rs. 0.50 per share). In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

Nature and Purpose of Other Reserves

a) Capital Reserves

Capital Reserve was carried forward under the previous GAAP from the books of amalgmating company at the time of Amalgamation.

b) Security Premium Reserve

The amount received in excess of face value of the equity shares in recognised in Securities Premium Reserve. In case of equity-settled share based payment transactions, the difference between fair value on grant date and nominal value of share is accounted as securities premium reserve. The reserve will be utilised in accordance with provisions of the Companies Act, 2013.

c) Capital Restructuring

Capital Restructuring reserve was carried forward under the previous GAAP from the books of amalgmating company at the time of Amalgamation.

d) Amalgamation Reserve

Amalgamation reserve was created under the previous GAAP on the basis of scheme of amalgamation of Bell Ceramics Limited with the Company as approved by the High Court of Allahabad and Gujrat in the year ended March 31, 2012.

e) Share Options Outstanding Account

The fair value of the equity-settled share based payment transactions with employees is recognised in Statement of Profit and Loss with corresponding credit to Employee Stock Options Outstanding Account.

f) General Reserve

The Company has transferred a portion of the net profit of the Company before declaring dividend to general reserve pursuant to the earlier provisions of Companies Act 1956. Mandatory transfer to general reserve is not required under the Companies Act 2013.

g) Retained Earnings

Retained earnings are the profits that the Company has earned till date, less any transfers to general reserves, dividends or other distributions paid to shareholders.

All the profits made by the Company are transferred to retained earnings from statement of profit and loss. However retained earnings includes Rs. 4,401.24 Lakh (March 31,2017 : Rs. 4,447.32 Lakh, April 1, 2016 : Rs. 4,493.39 Lakh) on account of amount transferred from revaluation reserve which is not available for distribution.

b) The Nature of Security for Term Loan are :

i) The above Secured Loans, Rs. 1,760.08 Lakh (March 31,2017: Rs. 2,172.80 Lakh; April 01, 2016: Rs. 2,390.06 Lakh) are secured by way of first pari passu charge on entire fixed assets excluding assets having specific charge, both present and future, and collaterally by way of second pari passu charge on the current assets of the Company. These pertains to various bankers and financial institutions namely, Tata Capital Financial Services Ltd., ICICI Bank and IDFC Bank.

ii) Vehicle loans are secured by way of hypothecation of respective vehicles.

c) The Nature of Security for Cash Credit & Working Capital Loan are :

i) The Company has a consortium of Various bankers namely State Bank of India, Punjab National Bank, IDBI Bank, Indus Ind Bank ,ICICI Bank ,IDFC Bank and Axis Bank (hereafter called the “Consortium”) for Non Current Borrowings (secured).

ii) The above Cash Credit and Working Capital Loans Rs. 3,935.33 Lakh (March 31, 2017: Rs. 5,186.38 Lakh ; April 01, 2016 : Rs. 6,983.86 Lakh) are primarily secured by way of first pari passu charge on entire current assets of the Company and collaterally by way of second pari passu charge on the entire fixed assets excluding assets having specific charge, both present & future.

iii) The demand loans are repayable on demand and carries interest rate ranges from 9.00% to 11.00% per annum

e) The term loan(s) carries rate of interest ranging between 9.20% to 11.50% per annum.

g) The nature of guarantee for Unsecured Loans are :

Unsecured loan from Bank is secured against property of Promoter at Kolkata.

h) These loans are subject to stipulation in respect of corporate loan and working capital facilities sanctioned by bank to the Company, hence are not repayable in next operating cycle.

i) Trade deposits are repayable on cessation of business transaction with dealers. The trade deposits carry rate of interest ranging between 7% to 8% per annum.

(a) Trade payables are non-interest bearing and are normally settled within 90-day terms except for SME’s (if any) which are settled within 45 days.

(b) Trade payables to related parties amounts to Rs. 690.96 Lakh as at March 31, 2018 (March 31, 2017 : Rs. 390.50 Lakh, April 01, 2016 : Nil)

(c) As per Schedule III of the Companies Act, 2013 and notification number GSR 719 (E) dated November 16, 2007 & as certified by the management, the amount due to Micro, small & medium enterprises as defined in Micro, Small and Medium Enterprises Development Act, 2006 is as under:

a) Consequent to the introduction of goods and services Tax (GST) with effect from 1 July 2017, VAT/Sales Tax, Excise Duty etc. have been subsumed into GST and accordingly the GST is not recognised as part of revenue from operations and excise duty as a seperate expense line item as per the requirements of Ind AS. This has resulted in lower reported revenue from operations in the current year in comparison to the revenue from operations reported under the pre-GST structure of indirect taxes. Accordingly, the Revenue from operations for the year ended March 31, 2018 are not comparable with year ended March 31, 2017 presented in the financial results which are reported inclusive of Excise Duty. The following additional information is being provided to facilitate such understanding:

(iii) Above includes a contribution of Rs. 33.82 Lakh (March 31, 2017: Rs. 19.44 lakh) to an entity (Godavari Foundation) over which KMP has significant influence and which is a Company registered under section 8 of the Companies Act, 2013, with the main objectives of working in the areas of social, economic and environmental issues such as rural development programme, granting aid to Institutions, school, colleges etc for Orphan Children and for poor students/people for their education and social welfare and estabilishing and maintaining schools, tube well for general public and also engaged in women enpowerment by enhancing their means and capabilities to meet the emerging opportunities.

c) Operating Lease

The Company’s significant lease agreements are in the nature of operating leases for premises used at various depots and showrooms. These lease agreements are cancellable by either parties thereto as per the terms and conditions of the agreements. In respect of these leases, lease rent of Rs. 445.82 Lakh (March 31, 2017: Rs. 516.21 Lakh) including Rs. 6.21 Lakh (March 31, 2017 : Rs. 1.32 Lakh) on account of amortisation of Deferred Security Deposit in accordance with Ind AS 109 and also including Rs. 1.96 Lakh (March 31, 2017 : Rs. 1.31 Lakh) being reversed on account of lease equalisation reserve as per the lease agreement, has been recognised on a straight line basis. Amount of lease equalisation reserve of Rs. 9.48 Lakh (March 31, 2017 : Rs. 7.52 Lakh ; April 01, 2016 : Rs. 13.55 Lakh) is accounted as per provision under note 19.

NOTE 3 : INCOME TAX

The major components of income tax expense for the years ended March 31, 2018 and March 31, 2017 are:

NOTE 4 : EARNINGS PER SHARE (EPS)

Earning per share (EPS) is determined based on the net profit attributable to the shareholder before other comprehensive Income. Basic earning per share is computed using the weighted average number of equity shares outstanding during the year whereas Diluted Earning per share is computed using the weighted average number of common and dilutive equivalent shares including Employee Stock Options except for the case where the result becomes anti- dilutive.

NOTE 5 : GRATUITY AND OTHER POST-EMPLOYMENT BENEFIT PLANS

a) Defined Contribution Plans

The Company makes contribution towards Employees Provident Fund and Employee’s State Insurance scheme. Under the rules of these schemes, the Company is required to contribute a specified percentage of payroll costs. The Company during the year recognised the following amount in the Statement of profit and loss account under company’s contribution to defined contribution plan.

The contribution payable to these schemes by the Company are at the rates specified in the rules of the schemes.

b) Defined Benefit Plans

In accordance with Ind AS 19 “Employee benefits”, an actuarial valuation on the basis of “Projected Unit Credit Method” was carried out, through which the Company is able to determine the present value of obligations. “Projected Unit Credit Method” recognizes each period of service as giving rise to additional unit of employees benefit entitlement and measures each unit separately to built up the final obligation.

i) Gratuity Scheme

The Company has defined benefit gratuity plan. Gratuity is calculated as 15 days salary for every completed year of service or part thereof in excess of 6 months and is payable on retirement / termination/ resignation. The benefit vests on completing 5 years of service by the employee. The Company makes provision of such gratuity asset/ Liability in the books of accounts on the basis of acturial valuation as per projected unit credit method; net with annual contribution made by Company to insurer to provide gratuity benefits by taking scheme of insurance.

ii) Compensated Absences

The Company operates compensated absences plan wherein all permanent employees of the company are entitled to the benefit equivalent to 21 days leave salary for every completed year of service subject to maximum 60 accumulations of leaves except in case of SKD Workers where maximum accumulation is 30 days. The salary for calculation of earned leave is last drawn salary. The same is payable during service, on retirement, withdrawal of scheme, resignation by employee and upon death/ disability of employee. The Company recognised short term leave encashment expense on the basis of actual eligibility of earned leave beyond 60/30 days as applicable, of Rs. 39.75 Lakh (March 31, 2017 Rs. 35.67 Lakh) in addition to expense recognised by Actuary and a provision of Rs. Nil (March 31, 2017 : Rs. Nil, April 1, 2016 : Rs. Nil) has been recognised in addition to the obligation recognised by Actuary.

c) The following tables summarize the components of net benefit expense recognised in the Statement of profit and loss and the funded status and amounts recognised in the balance sheet for the defined benefit plan (viz. gratuity and compensated absences). Leave encashment include earned leaves . These have been provided on accrual basis, based on year end actuarial valuation

The Sensitivity analysis above have been determined based on a method that extrapolates the impact on defined benefit obligation as a result of reasonable changes in key assumptions occurring at the end of the reporting period.

Sensitivities due to mortality and withdrawals are insignificant and hence ignored.

Sensitivities as to rate of inflation, rate of increase of pensions in payments, rate of increase of pensions before retirement & life expectancy are not applicable being a lump sum benefit on retirement.

NOTE 6 : COMMITMENTS AND CONTINGENCIES

a) Commitments

Estimated amount of contracts remaining to be executed on capital account (net of advances) and which have not been provided for in the financial statements, amounts to Rs. 1,584.71 Lakh (March 31, 2017: Rs. 21.06 Lakh, April 1, 2016: Nil).

The Company has not made the provision of bonus for the F.Y. 2014-15 on account of retrospective amendment made by The Payment of Bonus (Amendment) Act , 2015 keeping in view the diposal of writ petition vide order no. WP(C) NO. 3024/2016 (C) dated 27th January 2016 passed by the Hon’ble Kerala High Court.

(i) Pending resolution of the respective proceedings, it is difficult for the Company to estimate the timings of cash outflows, if any, in respect of the above as it is determinable only on receipt of judgement/decisions pending with various forums/authorities

(ii) The Company has reviewed all its pending litigations and proceedings and has adequately provided for where provisions are required and disclosed as contingent liabilities where applicable, in its financial statements. The Company does not expect the outcome of these proceedings to have a materially adverse effect on its financial position. The Company does not expect any reimbursements in respect of the above contingent liabilities.

(iii) The Company has been advised that the demand is likely to be either deleted or substantially reduced and accordingly no provision is considered necessary.

NOTE 7 : CAPITAL MANAGEMENT

For the purpose of Company’s capital management, capital includes issued equity capital, share premium and all other equity reserves attributable to the equity holders of the parent. The primary objective of the Company’s capital management is to maximise the shareholder value and to ensure the Company’s ability to continue as a going concern.

The Company Manages its capital structure and makes adjustment to it, in light of changes to economic conditions. To maintain or adjust the capital structure, the company may adjust the dividend payment to shareholders, return capital, issue new shares for cash, repay debt, put in place new debt facilities or undertake other such restructuring activities as appropriate.

The Company monitors capital using a gearing ratio, which is net debt divided by total capital as under :

No changes were made in the objectives, policies or processes for managing capital during the years ended March 31, 2018 and March 31, 2017.

In order to achieve this overall objective, the Company’s capital management, amongst other things, aims to ensure that it meets financial covenants attached to the interest-bearing loans and borrowings that define capital structure requirements. The above analysis indicates that the company has improved upon the financial leverage and has lower debt to service as on March 31,2018 vis-a-vis reporting date of earlier two years.

NOTE 8 : DERIVATIVE INSTRUMENTS AND UNHEDGED

The Company has no outstanding derivative instrument at the year end. The amount of foreign currency exposure that are not hedged by derivative instruments or otherwise are as under :-

NOTE 9 : SEGMENT INFORMATION

According to Ind AS 108, identification of operating segments is based on Chief Operating Decision Maker (CODM) approach for making decisions about allocating resources to the segment and assessing its performance. In Orient Bell Limited, the decision makers view the operating results internal division wise (Ceramic, Vitrified Polished). Accordingly, such segments may be presented under Ind AS 108. However, these segments have been aggregated because the core principles, economic characteristics, nature of products, production process, distribution method, regulatory environment and type of customers in all the divisions are similar. Hence the disclosure requirement of Ind AS 108 of “Segment Reporting” is not considered applicable. Further the Company sells its products mostly within India with insignificant export income and does not have any operation in economic environment with different risk and returns, hence its considered operating in single geographical segment.

Major Customer: No single customers contributed 10% or more to the Company’s revenue for both March 31, 2018 and March 31, 2017.

d) Other Transaction

The Company has taken Unsecured loan from Bank against the collateral security on the immovable property of Mr. Mahendra K. Daga (Key Managerial Personnel).

e) Terms and conditions of transactions with related parties

All the transaction with the related parties are made on terms equivalent to those that prevail in arm’s length transactions. Outstanding balances at the year-end are unsecured and carried interest rate. The unsecured loan from bank are secured against the property of Key Managerial Personnel. No expenses has been recognized in the current year in respect of bad or doubtful debts/advances and further no specific provision for doubtful debts/advances has been made in respect of outstanding balances.

NOTE 10 : SHARE BASED PAYMENTS Description of shares based payments arrangements

(i) The Employees Stock Options under the Orient Bell Employees Stock Options Scheme, 2013 (“Scheme”) is granted to an employee in three annual tranches of 30%, 35% and 35% of the total options per employee provided such employee fulfills the eligibility criteria for each year as decided by compensation committee from time to time.

(ii) Each Employee Stock Option vested in an Employee under the Scheme entitles the holder thereof to apply for and be allotted one equity share of the Company of ‘1 0 each upon exercise thereof. The Exercise price is ‘Nil’. The exercise period commences from the date of vesting in respect of options granted under the Scheme and ends upon the expiry of three years from the date of each vesting.

The expense recognised for employee services received during the year is shown in the following table:

NOTE 11 : FAIR VALUE DISCLOSURE

Set out below, is a comparison by class of the carrying amounts and fair value of the Company’s financial instruments. Here the disclosure is made for non-current financial assets and non-current financial liabilities, carrying value of current financial assets and financial liabilities including trade receivable, cash and cash equivalent, other bank balances, other financial assets, trade payables, current borrowing, other current financial liabilities etc. represent the best estimate of fair value.

The management assessed that fair value of these short term financial assets and liabilities significantly approximate their carrying amount largely due to short term maturities of these instruments.

c) Discount Rate Used in Determining Fair Value

The interest rate used to discount estimated future cash flows, where applicable, are based on the incremental borrowing rate of borrower which in case of financial liabilities is average market cost of borrowings of the Company and in case of financial asset is the average market rate of similar credit rated instrument. The Company maintains policies and procedures to value financial assets or financial liabilities using the best and most relevant data available.

The fair value of the financial assets and liabilities is included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. The Fair value of Company’s interest bearing borrowing are determined using discount rate that reflects the entity’s discount rate at the end of reporting period. The own non-performance risk is assessed to be insignificant as at reporting date.

NOTE 12 : FAIR VALUE HIERARCHY

All financial instruments for which fair value is recognised or disclosed are categorised within the fair value hierarchy, described as follows, based on the lowest level input that is insignificant to the fair value measurement as a whole.

Level 1: Quoted (unadjusted) prices in active markets for identical assets or liabilities.

Level 2: Valuation techniques for which the lowest level input that has a significant effect on the fair value measurement are observable, either directly or indirectly.

Level 3: Valuation techniques for which the lowest level input which has a significant effect on the fair value measurement is not based on observable market data.

The following table provides the fair value measurement hierarchy of the Company’s assets and liabilities

(i) Valuation technique used to determine fair value:

Security Deposit : Discounted Cash Flow Method using risk adjusted discount rate.

(ii) There have been no transfers between level 1 and level 2 category during the year ended on respective reporting date given above.

NOTE 13 : FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

The Company’s principal financial liabilities comprise trade and other payables, borrowings, interest accrued and capital creditors. The main purpose of these financial liabilities is to finance the Company’s operations and to provide guarantees to support its operations.

The Company’s principal financial assets includes security deposits, trade receivables, cash and cash equivalents, deposits with bank, interest accrued in deposits, receivables from related and other parties and interest accrued thereon.

The Company is exposed to market risk, credit risk and liquidity risk . The Company’s senior level oversees the management of these risks.

A. Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: interest rate risk, currency risk and other price risk, such as equity price risk and commodity risk.

i) Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company’s exposure to the risk of changes in market interest rates relates primarily to the Company’s debt obligations with floating interest rates.

The Company’s main interest rate risk arises from long-term borrowings with variable rates, which expose the Company to interest rate risk.

The assumed movement in basis points for the interest rate sensitivity analysis is based on the currently observable market environment, showing a significantly higher volatility than in prior years.

ii) Foreign currency risk

Foreign currency risk is the risk that the fair value of future cash flows of an exposure will fluctuate because of changes in exchange rates. Foreign currency risk sensitivity is the impact on the Company’s profit before tax is due to changes in the fair value of monetary assets and liabilities. The following tables demonstrate the sensitivity to a reasonably possible change in USD and EURO exchange rates, with all other variables held constant.

B. Credit Risk

Credit risk is the risk that counterparty will default on its contractual obligations resulting in finance loss to the Company. Credit risk arise from Cash and cash equivalents, deposit with banks, trade receivables and other financial assets measure at amortised cost. The Company continuously monitors defaults of customers and other counterparties and incorporate this information into its credit risk control.

C. Liquidity Risk

Liquidity risk is the risk that the Company may not be able to meet its present and future cash and collateral obligations without incurring unacceptable losses. The Company’s objective is to, maintain optimum levels of liquidity to meet its cash and collateral requirements. It maintains adequate sources of financing including loans from banks at an optimised cost.

NOTE 14: FIRST TIME ADOPTION OF IND AS

As stated in note 2, these financial statements, for the year ended March 31, 2018 are the first annual financial statements prepared in accordance with Indian Accounting Standards (Ind AS). For year up to and including the year ended March 31, 2017, the Company has prepared its financial statements in accordance with accounting standards notified under section 133 of the Companies Act 2013 read together with Companies (Accounts) Rules,2014 and other relevant provisions of the Act (Previous GAAP’).

Accordingly, the Company has prepared financial statements which comply with Ind AS applicable for year ended March 31, 2018, together with the comparative period data as at and for the year ended March 31, 2017, as described in the summary of significant accounting policies. In preparing these financial statements, the Company’s opening balance sheet was prepared as at April 01, 2016, the Company’s date of transition to Ind AS. This note explains the principal adjustments made by the Company in restating its Indian GAAP financial statements, including the balance sheet as at April 01, 2016 and the financial statements as at and for the year ended March 31, 2017.

Exemptions applied

Ind AS 101 allows first-time adopters certain exemptions from the retrospective application of certain requirements under Ind AS. The Company has applied the following exemptions:

a) Mandatory Exceptions

i) Estimates

The estimates at April 01, 2016 and at March 31, 2017 are consistent with those made for the same dates in accordance with Indian GAAP (after adjustments to reflect any differences in accounting policies, if any) apart from the following items where application of Previous GAAP did not require estimation:

- Impairment of financial assets based on expected credit loss model.

The estimates used by the Company to present these amounts in accordance with Ind AS reflect conditions at April 01, 2016, the date of transition to Ind AS and as at March 31, 2017.

ii) De-recognition of Financial Assets:

The company has applied the de-recognition requirements in Ind AS 109 prospectively for transactions occurring on or after the date of transition to Ind AS.

iii) Classification and measurement of Financial Assets:

Financial Instruments:

Financial assets like security deposits received and security deposits paid, has been classified and measured at amortised cost on the basis of the facts and circumstances that exist at the date of transition to Ind AS. Since, it is impracticable for the Company to apply retrospectively the effective interest method in Ind AS 109, the fair value of the financial asset or the financial liability at the date of transition to Ind AS by applying amortised cost method, has been considered as the new gross carrying amount of that financial asset or the financial liability at the date of transition to Ind AS.

iv) Impairment of Financial Assets: (Trade Receivables and Other Financial Assets)

At the date of transition to Ind AS, the Company has determined that there significant increase in credit risk since the initial recognition of a financial instrument would require undue cost or effort, the Company has recognised a loss allowance at an amount equal to lifetime expected credit losses at each reporting date until that financial instrument is derecognised (unless that financial instrument is low credit risk at a reporting date).

b) Optional exemptions

i. Deemed Cost-Previous GAAP Carrying Amount: (PPE and Intangible Assets) :

Ind AS 101 permits a first-time adopter to elect to continue with the carrying value for all of its property, plant and equipment as recognised in the financial statements as at the date of transition to Ind AS, measured as per the previous GAAP (Indian GAAP) and use that as its deemed cost as at the date of transition after making necessary adjustments for de-commissioning liabilities. This exemption can also be used for intangible. Intangible Assets covered by Ind AS 38. Accordingly, the company has elected to measure all of its property, plant and equipment, capital work in progress and intangible assets at their previous GAAP carrying value.

ii. Leases :

Appendix C to Ind AS 17 requires the first-time adopter to assess whether a contract or arrangement contains a lease. In accordance with Ind AS 17, this assessment should be carried out at the inception of the contract or arrangement. However, the Company has used Ind AS 101 exemption and assessed all arrangements for embedded leases based on conditions in place as at the date of transition.

iii. Investment in Associates :

Ind AS 101 permits a first-time adopter to elect to continue Previous GAAP carrying value for its investments in equity intruments of associates. Accordingly, the Company has elected to apply the said exemption.

iv. Share based payments :

A first-time adopter is encouraged, but not required, to apply Ind AS 102 to equity instruments that vested before the date of transition to Ind ASs, it may do so only if the entity has disclosed publicly the fair value of those equity instruments, determined at the measurement date as defined in Ind AS 102.

Under Previous GAAP, a company could have used the intrinsic value method or the fair value method. However, Ind AS 102 requires all types of share-based payments and transactions to be measured at fair value and recognised over the vesting period.

However Ind-AS 101 provides that requirements of Ind-AS 102 can be applied to the options that have been vested only if the company has publically disclosed the fair value. For options that have not yet vested as at the transition date the company will need to apply the requirements of Ind-AS 102 retrospectively.

v. Business combinations:

Ind AS 101 allows a first-time adopter not to apply Ind AS 21 Effects of changes in Foreign Exchange Rates retrospectively for business combinations that occurred before the date of transition to Ind AS. In such cases, where the entity does not apply Ind AS 21 retrospectively to fair value adjustments and goodwill, the entity treats them as assets and liabilities of the acquirer entity and not as the acquiree.

f) Footnotes to the reconciliation of equity as at April 01, 2016 and March 31, 2017 and Statement of Profit & Loss for the year ended March 31, 2018:

i. Proposed Dividend

Under Previous GAAP, Dividend is recognised in the year to which it relates. However under Ind AS, the dividend shall required to be recognised in the year in which the same has been declared and approved. Accordingly, the proposed dividend (including tax thereon) as on April 01, 2016 (on equity shares) has been reversed from the provisions and is recognized in the FY 2016-17 by decreasing the retained earnings.

ii. Property, Plant & Equipment (PPE)

As on the date of transition, Useful life estimate by the management due to which depreciation is calculated on the revised useful life.

Further Revaluation

The Company has netted off revaluation reserve with net block of respective Property, Plant and Equipment as per the transition provision of revised AS 10 of Previous GAAP. In previous GAAP, the Company has taken the related impact on April 01, 2016 and presented the related number in previous GAAP financial Statements of March 31, 2017. The Company has opted the deemed cost exemption and adopt the revalued amount of PPE as deemed cost.

iii. Lease equalisation reserve

Under Previous GAAP, operating lease payments are recognized as an expense in the statement of profit and loss on a straight-line basis over the lease term. Whereas under Ind AS, lease equalisation reserve is derecognised as operating lease payments to the lessor are structured to increase in line with expected general inflation to compensate for the lessor’s expected inflationary cost.

iv. Effective Interest Rate Adjustment on Borrowings

As per Ind AS 109 requires transaction costs incurred origination of borrowings to be deducted from the carrying amount of borrowings on initial recognition. These costs are recognised in the statement of profit and loss over the tenure of the borrowing as part of the finance cost by applying the effective interest rate method. Under previous GAAP, these transaction costs were charged to statement of profit and loss on straight line basis over the period of the loan.

v. Trade Receivables

Under Previous GAAP, Provision for bad debt was recognised on doubtful debtors on a case to case basis. However under Ind AS, the Company assess impairment based on expected credit losses (ECL Model) for measurement and recognition of impairment loss on the trade receivables accounting for non payment and delay of receivables.

vi. Security deposit

Under Previous GAAP, the security deposits paid for lease rent are shown at the transaction value whereas under Ind AS, the same are initially discounted and subsequently recorded at amortized cost at the end of every financial reporting period. Accordingly, the difference between the transaction and discounted value of the security deposits paid is recognized as deferred asset and is amortized over the period of the lease term Further, interest is accreted on the present value of the security deposits paid for lease rent.

vii. Deferred tax

Previous GAAP requires deferred tax accounting using the income statement approach, which focuses on differences between taxable profits and accounting profits for the period. Ind AS 12 requires entities to account for deferred taxes using the Balance Sheet approach, which focuses on temporary differences between the carrying amount of an asset or liability in the Balance Sheet and its tax base. The application of Ind AS 12 approach has resulted in recognition of deferred tax on new temporary differences relating to various transition adjustments which are recognised in correlation to the underlying transaction either in retained earnings as a separate component in equity.

viii. Share Based Payments

Under previous GAAP, Company is recording the cost of employee stock options at the intrinsic value method and corresponding provision is recorded for employee stock option bifurcated into current and non current. Whereas under Ind AS, provision for employee stock option is recorded at fair value at each reporting date.

ix. Prior Period Income

Under previous GAAP, prior period items was required to be disclosed separately in the financial statements. However, as per Ind AS, Company is required to adjust material prior period errors retrospectively by restating the comparative amounts for the earliest prior period presented. Further, where the amount of prior period pertains to the period before the earliest prior period presented, opening balances of the earliest period presented are to be restated.

x. Employee benefits

Both under Previous GAAP and Ind AS, the Company recognised costs related to its post-employment defined benefit plan on an actuarial basis. Under Previous GAAP, the entire cost, including actuarial gains and losses, are charged to statement of Profit and Loss. Under Ind AS, re-measurements (comprising of actuarial gains and losses, the effect of the asset ceiling, excluding amounts included in net interest on the net defined benefit liability and the return on plan assets excluding amounts included in net interest on the net defined benefit liability) are recognised immediately in the books with a corresponding debit or credit to retained earnings through OCI.

xi. Other comprehensive income

Items of income and expense that are not recognised in profit and loss but are shown in ‘other comprehensive income’ includes re-measurements gain/(loss) of defined benefit plans. The concept of other comprehensive income did not exist under previous GAAP. As a consequence, re-measurement gain/(loss) of defined benefit plans has been regrouped from employee benefit expense to other comprehensive income.

xii. Reclassification Adjustment

The company has reclassified previous year figures to conform to Ind AS Classification.

NOTE 15 :

In view of the management, the current assets have a value on realization in the ordinary course of business at least equal to the amount at which they are stated in the balance sheet as at March 31, 2018.

Note 16 :

The financial statements of the Company for the year ended 31st March, 2018 were approved by the Board of Directors and authorised for issue on May 21, 2018.


Mar 31, 2016

(b) Terms/right attached to Equity Shares

The company has only one class of equity shares having a par value of Rs.10 per share. Each holder of equity shares is entitled to one vote per share. The company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting. [During the year ended March 31, 2016, the amount of per share dividend recognized as distributions to equity shareholders was Rs.0.50 per share (March 31, 2015: Rs.0.50 per share). In the event of liquidation of the company, the holders of equity shares will be entitled to receive remaining assets of the company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

Terms and Conditions of Options Granted

(i) Each Option entitles the holder thereof to apply for and be allotted one equity share of the company of Rs.10/- each upon payment of the exercise price during the exercise period. The exercise period commences from the date of vesting of the options and expires at the end of 3rd year from the date of vesting in respect of options granted under the Orient Bell Employees Stock Option Scheme-2013.

(ii) The Employees Stock Options will be granted in three annual tranches of 30%, 35% and 35% of the total options per employee provided such employee shall fulfill the eligibility criteria for each year as decided by Compensation Committee from time to time.

Note: Company vide resolution dated August 13, 2015 has stopped the ESOP scheme for the new employees joined w.e.f April 1, 2015 without affecting the further grant/vest/exercise of options by the existing eligible employees (i.e the employees who were granted the stock options on date September 02, 2013 & 2014 and also to Mr. K.M. Pai on September 02, 2015).

(iv) In respect of stock options granted pursuant to the Company''s stock options scheme, the intrinsic value of the options (excess of market price of the share over the exercise price of the option) is treated as discount and accounted as employee compensation over the vesting period.

(v) Expense on Employee Stock Option Schemes debited to the Statement of Profit and Loss during 2015-16 is Rs.96,81,719 (2014-15 : Rs.73,00,562) pursuant to employee stock option scheme. (refer Note:21)

(vi) Had fair value method been adopted for expensing the compensation arising from employee share-based payment plans:

The employee compensation charge debited to the Statement of Profit and Loss for the year 2015-16 would have been lower by Rs.5,10,839 [In FY 2014-15 expenses would have been higher by : Rs.56,01,574].

Basic EPS before extraordinary items would have increased by Rs.0.04 (2014-2015 lower by Rs.0.41).

Basic EPS after extraordinary items would have increased by Rs.0.04 (2014-2015 lower by Rs.0.41).

Diluted EPS before extraordinary items would have increased by Rs.0.04 (2014-2015 lower by Rs.0.04).

Diluted EPS after extraordinary items would have decreased by Rs.0.04 (2014-2015 lower by Rs.0.04)

(vii) Weighted average fair values of options granted during the year is Rs.123.91 (2014-15: Rs.81.68).

a. The nature of Security for Secured Loans are :

(i) The above secured corporate loan, Rs.22,80,78,504 (March 31, 2015: Rs.37,15,39,289 ) is secured by way of first pari passu charge on entire fixed assets excluding assets having specific charge, both present and future, and collaterally by way of second pari passu charge on the current assets of the company. These pertains to various bankers and financial institution namely, Tata Capital Financial Services Ltd. and Exim Bank.

(ii) The buyer''s credit of Rs.Nil (March 31, 2015: Rs.11,27,41,098 ) is secured by way of first pari passu charge on entire fixed assets excluding assets having specific charge, both present and future, and collaterally by way of second pari passu charge on the current assets of the company. The said facility is provided by Tata Capital Financial Services Ltd. arranged through ING Vysya Bank Ltd (Now Kotak Mahindra Bank).

(iii) Vehicle loans are secured by way of hypothecation of respective vehicles.

c. The nature of guarantee for Unsecured Loans are :

(i) Unsecured loan from Bank is secured against property of Promoter at Kolkata.

(ii) Unsecured loan from financial institution is secured by pledge of the shares belonging to Promoters, other than their holding in the Company.

(ii) Loans & Advances from Related Parties are repayable at the prerogative of the Company.

(iii) Trade deposits are repayable on cessation of business transaction with dealers.

e. The term loan(s) carries interest ranging between 10% to 13.5%.

During the year, Company has not made the provision of bonus for the F.Y. 2014-15 on account of retrospective amendment made by The Payment of Bonus (Amendment) Act , 2015 keeping in view the disposal of writ petition vide order no. WP(C) NO. 3024/2016 (C) dated 27th January 2016 passed by the Hon''ble Kerala High Court.

* The Company has been advised that the demand is likely to be either deleted or substantially reduced and accordingly no provision is considered necessary.

c) Regarding the demand of Rs.1,653 lacs against under drawl of RLNG for the calendar year 2014 (as mentioned in note 8 (b) of financial statements for the year ended March 31, 2015), the Company has entered into settlement agreements dated August 11, 2015 & August 26, 2015 with the seller. According to the agreements, the said demand has been settled by the Company with the seller by paying lump-sump amount of Rs.279.41 lacs and rescinding its right to receive Make-up gas against such lump-sump payment for the calender year 2014. Further as per side letter dated January 21, 2016, GAIL has agreed not to charge any amount against under drawl of RLNG for the calendar year 2015.

The nature of Security for borrowings are as under:

a. The Company has a consortium of Various bankers namely State Bank of India, Punjab National Bank, IDBI Bank, Indus Ind Bank and Axis Bank (hereafter called the "Consortium”) for secured loans borrowings.

b. The above loans are primarily secured by way of first pari passu charge on entire current assets of the company and collaterally by way of second pari passu charge on the entire fixed assets excluding assets having specific charge, both present & future.

c. Loans from Banks is repayable on demand and carries interest rate ranges from 10.00% to 12.00% p.a.

a. Assets acquired on account of Amalgamation includes Land & Building (Dora & Hoskote units) of Bell Ceramics Limited which was revalued based on the report by certified valuers as at December 31, 2010 (Other Land & Buildings being insignificant and not having change in value). The historical cost of Land and Building was Rs.2,24,65,291 and Rs. 31,87,04,446 and their fair values were determined as ? 44,49,02,600 and Rs. 56,1 1,59,900 respectively and therefore an equivalent amount has been credited to Revaluation Reserve account. The method adopted by the certified valuer for both the units for revaluation purpose, was Fair Market Value Method. Till March 31,2014 ,in accordance with the option given in the Guidance Note on Accounting for Depreciation in Companies, the Company recoups additional depreciation out of Revaluation reserve. From the FY 2014-15, as per Schedule II of the Companies Act,2013 read with para 36 of Application Guide on the Provisions of Schedule II to the Companies Act, 2013 issued by Institute of Chartered Accountants of India, the depreciation on revalued amount has been charged to statement of the profit and loss and the amount of depreciation which relates to the difference between depreciation based on the revalued carrying amount of the asset and depreciation based on its original cost has been transferred from the revaluation reserve to the general reserves of the company.

b. Plant and Machinery includes Rs. 74,35,002 (net loss) [March 31, 2015: Rs. 2,51,60,387 (net profit)] on account of exchange difference during the year.

a) Employees Benefits

The company has classified the various benefit provided to employees as under

(i) Defined Contribution Plans

The company makes contribution towards Employees Provident Fund and Employee''s State Insurance scheme. Under the rules of these schemes, the company is required to contribute a specified percentage of payroll costs. The company during the year recognized the following amount in the Statement of profit and loss account under company''s contribution to defined contribution plan.

The contribution payable to these schemes by the Company are at the rates specified in the rules of the schemes.

(ii) Defined Benefit plans and Other Long term Benefits

a) Contribution to Gratuity Funds- Employee''s Gratuity Fund.

b) Leave encashment/ Compensated absence (Long Term).

In accordance with Accounting Standard 15 (revised 2005), an actuarial valuation was carried out in respect of the aforesaid defined benefit plans and other long term benefits based on the following assumptions.

Note:

(1) Actuarial valuation is based on escalation in future salary on account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

(2) On account of short term leave encashment benefit, which is being recognized on the basis of actual eligibility of earned leave beyond 60 days, an expense of Rs.36,42,834 (year ended March, 31 2015: Rs.19,32,376 ) has been recognized in addition to the expense recognized by Actuarial and a provision of Rs.Nil (year ended March, 31 2015: Rs.NIL ) has been recognized in addition to the obligation recognized by Actuarial.

d) Operating Lease

The Company''s significant lease agreements are in the nature of operating leases for premises used at various depots and showrooms. These lease agreements are cancellable by either parties thereto as per the terms and conditions of the agreements. In respect of these leases, lease rent of Rs.5,29,36,886 (March 31, 2015: Rs.4,99,01,733) including Rs.1,41,144 (March 31, 2015: Rs.5,66,012) on account of lease equalisation reserve as per the lease agreement, has been recognized on a straight line basis. Amount of lease equalization reserve of Rs.16,66,592 (March 31, 2015 : Rs.18,07,736) is accounted as provision under Note: 8.

NOTE 1 :

In the opinion of the Board, the Current Assets, Loans & Advances are approximate to the value stated, if realized in the ordinary course of business.

NOTE 2 :

The details of Corporate Social Responsibility as per Section 135 of the Companies Act 2013 read with Schedule VII thereof is as under:

(a) Gross amount required to be spent by the company during the year: 17,30,474

(i.e. 2% of Average Net profits of last three years)

NOTE 3 :

(i) The Company is engaged in manufacture of Ceramic and Vitrified tiles. The entire operations are governed by same set of risk and returns. Hence, the same has been considered representing a single primary segment. The said treatment is in accordance with the guiding principles enunciated in the Accounting Standard-17 on Segment Reporting.

(ii) The Company sells its products mostly within India with insignificant export income and does not have any operations in economic environments with different risk and returns, hence, its considered operating in single geographical segment.

NOTE 4 :

Figures have been rounded off to the nearest rupee.

NOTE 5 :

Balances of Sundry Creditors and Debtors are subject to confirmation.

NOTE 6 :

Figures for the previous year have been reclassified/ regrouped wherever considered necessary


Mar 31, 2015

NOTE 1 : CORPORATE INFORMATION

Orient Bell Limited (the Company) is engaged in the manufacturing, trading and selling of ceramic wall and floor tiles. Company is a public company incorporated and domiciled in India and has its registered office at Sikandrabad, Uttar Pradesh, India. The Company has its primary listings on BSE Limited and on the National Stock Exchange of India.

NOTE 2 : BASIS OF PREPARATION OF FINANCIAL STATEMENTS

Note 2.1 Accounting Convention

These financial statements are prepared in accordance with Indian Generally Accepted Accounting Principles (GAAP) under the historical cost convention on the accrual basis except for certain financial instruments which are measured at fair values. GAAP comprises mandatory accounting standards as prescribed under Section 133 of the Companies Act, 2013 ('the Act') read with Rule 7 of the Companies (Accounts) Rules, 2014, the provisions of the Act (to the extent notified) and guidelines issued by the Securities and Exchange Board of India (SEBI). Accounting policies have been consistently applied except where a newly-issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in the accounting policy hitherto in use.

NOTE 3 :

In the opinion of the Board, the Current Assets, Loans & Advances are approximate to the value stated, if realised in the ordinary course of business.

NOTE 4 :

RELATED PARTY DISCLOSURE

As per Accounting Standard 18 "Related Party Disclosures" issued by the Companies (Accounting Standard) Rules, 2006 related parties and transactions with related parties are as follows:

(i) Related Parties :

A Subsidiary Company

(a) ELIT International Trading (HK) Pvt. Ltd.*

B Relatives and Associates

(a) Freesia Investment and Trading Co. Ltd.

(b) Goodteam Investment & Trading Co. Pvt. Ltd.

(c) Alfa Mercantile Ltd.

(d) Morning Glory Leasing & Finance Ltd.

(e) Iris Designs Pvt. Ltd.

(f) Mahendra K. Daga (HUF)

C Key Managerial Personnel

(a) Mahendra K. Daga, Chairman and Managing Director

(b) Madhur Daga, Joint Managing Director

(c) Kashinath Martu Pai, Executive Director and Chief Financial Officer

(d) Yogesh Mendiratta, Company Secretary

D Relatives of Key Managerial Personnel

(a) Sarla Daga w/o Mahendra Kumar Daga

(b) Roma Monisha Sakraney Daga w/o Madhur Daga

* M/s ELIT International Trading (HK) Pvt. Ltd was subsidiary of the Company till March 20,2015.

NOTE 5 :

Managerial Remuneration includes Rs. 10,00,000 as provision for payment of commission to be paid to the Independent Directors pertaining to financial year 2014 - 2015 which is in excess of prescribed percentage of net profits as specified under the Companies Act, 2013. This amount is subject to the approval of members of the Company and Central Government.

NOTE 6 :

The details of Corporate Social Responsibility as per Section 135 of the Companies Act 2013 read with Schedule VII thereof is as under:

(a) Gross amount required to be spent by the company during the year: (i.e. 2% of Average Net profits of last three years) 19,52,865

(b) Amount spent during the year on:

NOTE 7 :

(i) The Company is engaged in manufacture of Ceramic and Vitrified tiles. The entire operations are governed by same set of risk and returns. Hence, the same has been considered representing a single primary segment. The said treatment is in accordance with the guiding principles enunciated in the Accounting Standard-17 on Segment Reporting.

(ii) The Company sells its products mostly within India with insignificant export income and does not have any operations in economic environments with different risk and returns, hence, its considered operating in single geographical segment.

NOTE 8 :

Figures have been rounded off to the nearest rupee.

NOTE 9 :

Balances of Sundry Creditors and Debtors are subject to confirmation.

NOTE 10 :

Figures for the previous year have been reclassified/ regrouped wherever considered necessary.


Mar 31, 2014

CORPORATE INFORMATION

Orient Bell Limited (the Company) is a public company domiciled in India and incorporated under the provision of the Companies Act, 1956. Its shares are listed on two stock exchanges in India viz, NSE and BSE. The company is engaged in the manufacturing, trading and selling of reputed brand of ceramic and floor tiles.

Terms and Conditions of Options Granted

(i) Each Option entitles the holder thereof to apply for and be allotted one equity share of the company of Rs. 10 each upon payment of the exercise price during the exercise period. The exercise period commences from the date of vesting of the options and expires at the end of 3rd year from the date of vesting in respect of options granted under the Orient Bell Employees Stock Option Scheme-2013.

(ii) The Employees Stock Options will be granted in three annual tranches of 30%, 35% and 35% of the total options per employee provided such employee shall fulfill the eligibility criteria for each year as decided by Compensation Committee from time to time.

(iv) In respect of stock options granted pursuant to the Company''s stock options scheme, the intrinsic value of the options (excess of market price of the share over the exercise price of the option) is treated as discount and accounted as employee compensation over the vesting period.

(v) Expense on Employee Stock Option Schemes debited to the Statement of Profit and Loss during 2013-14 is Rs. 78,08,142 (2012-13 : Nil) pursuant to employee stock option scheme (refer Note 20).

(vi) Had fair value method been adopted for expensing the compensation arising from employee share-based payment plans:

The employee compensation charge debited to the Statement of Profit and Loss for the year 2013-14 would have been lower by Rs. 20,32,667 (2012-13: Nil).

Basic EPS before extraordinary items would have increased by Rs. 0.12.

Basic EPS after extraordinary items would have increased by Rs. 0.12.

Diluted EPS before extraordinary items would have increased by Rs. 0.12.

Diluted EPS after extraordinary items would have increased by Rs. 0.12.

(vii) Weighted average fair values of options granted during the year is Rs. 38.50 (2012-13: Nil).

a. The nature of Security for Secured Loans are :

(i) The above secured corporate loans, Rs. 54,03,78,789 (March 31, 2013: Rs. 53,28,60,678) is secured by way of first pari passu charge on entire fixed assets excluding assets having specific charge, both present and future, and collaterally by way of second pari passu charge on the current assets of the company. These pertains to various bankers namely, IDBI Bank, Axis Bank and Exim Bank.

(ii) The buyer''s credit of Rs. 13,82,96,016 (March 31, 2013: Rs. 4,02,61,160 ) is secured by way of first pari passu charge on entire fixed assets excluding assets having specific charge, both present and future, and collaterally by way of second pari passu charge on the current assets of the company. The said facility is provided by Tata Capital Financial Services Ltd. arranged through ING Vysya Bank Ltd.

(iii) Vehicle loans are secured by way of hypothecation of respective vehicles.

b. The nature of guarantee for Unsecured Loans are :

(i) Unsecured loan from Bank is secured against property of Promoter at Kolkata.

(ii) Unsecured loan from financial institution is secured by pledge of the shares belonging to Promoters, other than their holding in the Company.

The nature of Security for borrowings are as under:

a. The Company has a consortium of various bankers namely State Bank of India, Punjab National Bank, IDBI Bank, ING Vysya Bank, Axis Bank and IndusInd Bank (hereafter called the "Consortium") for secured loans borrowings.

b. The above loans are primarily secured by way of first pari passu charge on entire current assets of the company and collaterally by way of second pari passu charge on the entire fixed assets excluding assets having specific charge, both present & future.

c. Loans from Banks is repayable on demand and carries interest rate ranges from 10.70% to 12.25% p.a.

(Amount in Rs.)

Particulars As at As at March 31, 2014 March 31, 2013 a) Contingent liabilities

Claims against company not acknowledged as debt 11,40,50,838 6,84,94,055

Letter of Credit 17,95,54,105 37,19,28,695

Bank Guarantee (Net of Margin) 78,04,595 70,30,362

b) Commitments

Estimated amount of contracts remaining to be executed on capital account and not provided for - 1,25,17,200

Note:

(1) Actuarial''s valuation is based on escalation in future salary on account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

(2) On account of short term leave encashment benefit, which is being recognised on the basis of actual eligibility of earned leave beyond 60 days, an expense of Rs. 8,75,000 (March, 31 2013: Rs. 27,92,076) has been recognised in addition to the expense recognised by Actuarial and a provision of Rs. Nil (March, 31 2013: Rs. 27,92,076) has been recognised in addition to the obligation recognised by Actuarial.

In the opinion of the Board, the Current Assets, Loans & Advances are approximate to the value stated, if realised in the ordinary course of business.

NOTE 1:

RELATED PARTY DISCLOSURE

As per Accounting Standard 18 "Related Party Disclosures" issued by the Companies (Accounting Standard) Rules, 2006 related parties and transactions with related parties are as follows:

(i) Related Parties :

A Subsidiary Company

(a) ELIT International Trading (HK) Pvt. Ltd.

B Enterprises owned or significantly influenced by Key Managerial Personnel (''KMP'') or their relatives (Only with whom the Company had transaction during the year)

(a) Freesia Investment and Trading Co. Ltd.

(b) Goodteam Investment & Trading Co. Pvt. Ltd.

(c) Alfa Mercantile Ltd.

(d) Morning Glory Leasing & Finance Ltd.

(e) Iris Designs Pvt. Ltd.

(f) Mahendra K. Daga - HUF

C Key Managerial Personnel (KMP)

(a) Mr. Mahendra K. Daga, Chairman and Managing Director

(b) Mr. Madhur Daga, Joint Managing Director

D Relatives of Key Managerial Personnel (Only with whom the Company had transaction during the year)

(a) Mrs. Sarla Daga w/o Mr. Mahendra K. Daga

(b) Mrs. Roma Monisha Sakraney Daga w/o Mr. Madhur Daga

(i) The Company is engaged in manufacture of Ceramic and Vitrified tiles. The entire operations are governed by same set of risk and returns. Hence, the same has been considered representing a single primary segment. The said treatment is in accordance with the guiding principles enunciated in the Accounting Standard-17 on Segment Reporting.

(ii) The Company sells its products mostly within India with insignificant export income and does not have any operations in economic environments with different risk and returns, hence, its considered operating in single geographical segment.

NOTE 2 :

During the financial year, managerial remuneration of Rs. 1,25,81,655 was paid to the Chairman and Managing Director and Rs. 1,18,86,100 was paid to the Joint Managing Director which is in excess of prescribed percentage of net profits as specified under Companies Act, 1956. During the current financial year, the Ministry of Corporate Affairs accorded its approval to the excess remuneration paid to the Chairman and Managing Director. However, the approval for the excess remuneration paid to the Joint Managing Director is still awaited.

NOTE 3 :

Balances of Sundry Creditors and Debtors are subject to confirmation.

NOTE 4 :

Figures for the previous year have been reclassified/ regrouped wherever considered necessary.


Mar 31, 2013

NOTE 1 : CORPORATE INFORMATION

Orient Bell Limited (the Company) is a public Company domiciled in India and incorporated under the provision of the Companies Act, 1956. Its shares are listed on two stock exchanges in India viz, NSE and BSE. The Company is engaged in the manufacturing, trading and selling of reputed brands of ceramic and floor tiles.

NOTE 2 : SIGNIFICANT ACCOUNTING POLICIES AND NOTES TO THE ACCOUNT

Accounting Convention

The financial statements of the Company have been prepared in accordance with Generally Accepted Accounting Principles in India

(Indian GAAP). The Company has prepared the financial statements to comply in all material respects with the accounting standards notified under the Companies (Accounting Standards) Rules, 2006, (as amended) and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared on an accrual basis and under the historical cost convention, except for Building situated at Hoskote and Dora unit which are carried at revalued amounts.

The accounting policies adopted in the preparation of financial statements are consistent with those of previous year, except for the change in accounting policies explained below.

NOTE 3 :

RELATED PARTY DISCLOSURE

As per Accounting Standard 18 "Related Party Disclosures" issued by the Companies (Accounting Standard) Rules, 2006 related parties and transactions with related parties are as follows:

(i) Related Parties :

A Subsidiary Company

(a) ELIT International Trading (HK) Pvt. Ltd.

B Enterprises owned or significantly influenced by Key Managerial Personnel ("KMP") or their relatives (Only with whom the Company had transaction during the year)

(a) Freesia Investment and Trading Co. Ltd.

(b) Goodteam Investment & Trading Co. Pvt. Ltd.

(c) Alfa Mercantile Ltd.

(d) Morning Glory Leasing & Finance Ltd.

(e) Iris Designs Pvt. Ltd.

(f) Mahendra K. Daga - HUF

C Key Managerial Personnel (KMP)

(a) Mr. Mahendra K. Daga, Chairman and Managing Director

(b) Mr. Madhur Daga, Executive Director

D Relatives of Key Managerial Personnel (Only with whom the Company had transaction during the year)

(a) Mrs. Sarla Daga w/o Mr. Mahendra K. Daga

(b) Mrs. Roma Monisha Sakraney Daga w/o Mr. Madhur Daga

NOTE 4 :

(i) The Company is engaged in manufacture of Ceramic and Vitrified tiles. The entire operations are governed by same set of risk and returns. Hence, the same has been considered representing a single primary segment. The said treatment is in accordance with the guiding principles enunciated in the Accounting Standard-17 on Segment Reporting.

(ii) The Company sells its products mostly within India with insignificant export income and does not have any operations in economic environments with different risk and returns, hence, its considered operating in single geographical segment.

NOTE 5 :

Balances of Sundry Creditors and Debtors are subject to confirmation.

NOTE 6 :

Figures for the previous year have been reclassified/ regrouped wherever considered necessary.


Mar 31, 2012

NOTE 1 : CORPORATE INFORMATION

Orient Bell Limited (the Company) (formerly Known as Orient Ceramics And Industries Limited) is a public company domiciled in India and incorporated under the provision of the Companies Act, 1956. Its shares are listed on two stock exchanges in India viz, NSE and BSE. The company is engaged in the manufacturing, trading and selling of reputed brand of ceramic and floor tiles.

(a) Terms/right attached to Equity Shares

The company has only one class of equity shares having a par value of Rs 10 per share. Each holder of equity shares is entitled to one vote per share. The company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting. During the year ended March 31, 2012, the amount of per share dividend recognized as distributions to equity shareholders was Rs 1.5 (March 31, 2011: Rs 2). In the event of liquidation of the company, the holders of equity shares will be entitled to receive remaining assets of the company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

The nature of Security for Secured Loans are :

a. (i) The Term Loan from IDBI Bank and Axis Bank is secured by way of first pari passu charge on entire fixed assets excluding assets having specific charge, both present and future, and collaterally by way of second pari passu charge on the current assets of the company.

(ii) The Term Loan from State Bank Of India is secured by way of first pari passu charge on entire current assets excluding assets having specific charge, both present and future, and collaterally by way of second pari passu charge on the fixed assets of the company.

(iii) Vehicle loans are secured by way of hypothecation of respective vehicles.

b. (i) Unsecured loan from Bank is secured against property of Promoter at Kolkata.

(ii) Unsecured loan from NBFC is secured by pledge of the shares belonging to Promoters, other than their holding in OBL.

(iii) Loans & Advances from Related Parties are repayable at the prerogative of the company.

(iv) Loan from others includes loans from erstwhile promoters of M/s Bell Ceramics Ltd. and is payable after all formalities of acquisition.

a) Pursuant to amendments to schedule VI to Companies Act, 1956 vide Notification No. GSR 719 (E) dated 16th November 2007, the amount due to Micro, Small & Medium Enterprises have not been disclosed for the current year, as the company is in the process of identifying vendors registered under Micro, Small & Medium Enterprises Development Act, 2006 and gathering information to make the necessary disclosure.

b) It does not include any amount due to be transferred to Investor Education and Protection Fund.

The nature of Security for borrowings are as under:

a. The Company has a consortium of Various bankers namely State Bank of India, Punjab National Bank, IDBI Bank, ING Vyasa Bank, Axis Bank, Bank of Bahrain & Kuwait and Bank of India (hereafter called the "Consortium") for secured loans borrowings.

b. The Working Capital Loans including Buyers Credit are primarily secured by way of first pari passu charge on entire current assets of the company and collateraly by way of second pari passu charge on the entire fixed assets excluding assets having specific charge, both present & future.

Aggregate cost of unquoted investment Rs 20,24,08,207 (March 31 2011: Nil) Aggregate cost of quoted investment Rs Nil (March 31 2011: 20,07,81,657) Aggregate Market Value of quoted investment Rs Nil (March 31 2011: 14,30,36,592)

a) Fixed Deposits with a carrying amount of Rs 2,89,76,661 (March 31, 2011 Rs 1,70,00,000) are subject to first charge to secure the Company's Loans from banks.

b) Fixed Deposits with a carrying amount of Rs 3,25,248 (March 31, 2011 Rs 2,09,781) are pledged with Govt. Authorities.

* Excise Duty on Sales amounting to Rs 39,05,07,483 (March 31, 2011 22,32,89,608) has been reduced from Sales and Excise Duty on increase/(decrease) in stock amounting to Rs 2,97,17,947(March 31, 2011 Rs 40,99,571) has been considered as (Income)/Expense in Note No. 23 of Financial Statement

(ii) Defined Benefit plans

The employee's gratuity fund scheme managed by Kotak Mahindra Old Mutual Life Insurance Ltd. and Life Insurance Corporation are defined benefit funded plan. The present value of obligation is determined based on actuarial valuation using the projected unit credit method, which recognizes each period of service as giving rise to additional unit of employees benefit entitlement and measures each unit separately to built up the final obligation. The obligation for leave encashment is a defined unfunded benefit plan, which is recognized in the same manner as gratuity.

NOTE 2 :

The name of the Transferee Company has been changed from Orient Ceramics And Industries Limited to Orient Bell Limited with effect from 15th March, 2012. This is the amalgamated financial statements consequent upon sanction of Scheme of Arrangement by way of amalgamation of Orient Ceramics And Industries Limited (herein referred as 'transferee company' )and Bell Ceramics Limited (hereinafter referred as 'transferor companies'), as approved by the Hon'ble High Court of Allahabad vide its Order dated 19th December 2011 and by the Hon'ble High Court of Ahmedabad vide its Order dated 7th February 2012 u/s 394 of the Companies Act, 1956 and necessary filing of said Order with the Registrar of Companies, on 30th March, 2012, being the 'Effective Date' on which the scheme has become effective. The relevant clauses of such approved scheme are as under :-

(a) Pursuant to such approved scheme, entire business of transferor Company including all assets and liabilities shall stand transferred to and vested with the Company with effect from 1st January 2011 being the "Appointed Date".

(b) The amalgamation has been accounted for under the "Pooling of interest " method as prescribed by the Accounting Standard (AS-14) of the Companies (Accounting Standards) Rules, 2006. Accordingly the assets, liabilities, and reserves of transferor Company, as at 1st January 2011 have been taken over at book values.

(c) All inter-company balances between the Transferor Company and the company have been cancelled and there shall be no further obligation/outstanding in this behalf.

(d) In view of the aforesaid amalgamation with effect from 1st January 2011 the figures for the current year are not comparable with those of the previous year.

(e) Since the Transferor company was amalgamated w.e.f 1st January, 2011, the profit and loss for the period 1st January to 31st March 2011 which has been incorporated in the financial statements of Orient Bell Limited is stated as follows:-

NOTE 3 :

In the opinion of the Board, the Current Assets, Loans & Advances are approximate to the value stated, if realised in the ordinary course of business.

NOTE 4 : RELATED PARTY DISCLOSURE

As per Accounting Standard 18 "Related Party Disclosures" issued by the Companies (Accounting Standard) Rules, 2006 related parties and transactions with related parties are as follows:

(i) Related Parties :

A Subsidiary Company

(a) ELIT International Trading (HK) Pvt. Ltd.*

(b) Bell Ceramics Ltd.**

* became subsidiary w.e.f 17th January 2012

** due to amalgamation, Bell Ceramics Ltd. had ceases to be subsidiary w.e.f 1st January, 2011 (refer Note 26).

B Enterprises owned or significantly influenced by KMP or their relatives

(a) Freesia Investment and Trading Co. Ltd.

(b Goodteam Investment & Trading Co. Pvt. Ltd.

(c) Alfa Mercantile Ltd.

(d) Morning Glory Leasing & Finance Ltd.

(e) Iris Designs Pvt. Ltd.

(f) Mahendra K. Daga - HUF C Key Managerial Personnel

(a) Mr. Mahendra K. Daga, Chairman and Managing Director

(b) Mr. Madhur Daga, Executive Director D Relatives of Key Managerial Personnel

(a) Mrs. Sarla Daga w/o Mahendra K. Daga

(b) Mrs. Roma Monisha Sakraney Daga w/o Madhur Daga

c. All Derivative contracts entered into by the company are for hedging purposes only.

d. During the year the company has provided Rs 47,605 towards premium on forward exchange contracts (March 31, 2011: Rs 81,86,295).

NOTE 5 :

(i) The company is engaged in manufacture of Ceramic and Vitrified tiles. The entire operations are governed by same set of risk and returns. Hence, the same has been considered representing a single primary segment. The said treatment is in accordance with the guiding principles enunciated in the Accounting Standard-17 on Segment Reporting.

(ii) The company sells its products mostly within India with insignificant export income and does not have any operations in economic environments with different risk and returns, hence, its considered operating in single geographical segment.

NOTE 6 :

Balances of certain Sundry Creditors and Debtors are subject to confirmation.

NOTE 7 :

Figures for the previous year have been reclassified/ regrouped in accordance with Revised Schedule VI to the Companies Act, 1956.

Further, figures for the year ended March 31, 2011 are not comparable as such figures are standalone figures of Orient Ceramics And Industries Limited before merger was effective.


Mar 31, 2011

1. Contingent Liabilities (Amount in Rupees)

As at As at Particulars March March 31,2011 31,2010

a) Outstanding Letter of Credit (net of 9,99,88,526 3,96,82,881 margins) furnished in favour of suppliers

b)Outstanding Guarantees furnished by 22,91,513 92,25,000 Company's Banker in favour of Central excise, Customs and Others (net of margins)

c) Custom/excise duty / Service tax / 1,28,52,661 1,62,20,709 Income tax / sales tax demands and show Cause notice issued against which company has preferred appeals. (During the year contigent liability of Rs. 7,72,980/- pending in consumer court has been settled)

2. The nature of security for secured Loans including interest accrued thereon are :

a. The Company has a consortium of five bankers namely state Bank of India, Punjab national Bank, iDBI Bank, Barclays Bank and axis Bank (hereafter called the “Consortium”) for secured loans borrowings.

b.(i) The Corporate Loan from IDBi Bank and axis Bank are secured by way of first pari passu charge on entire fixed assets excluding assets having specific charge, both present and future, and collaterally by way of second pari passu charge on the current assets of the company.

b.(ii) The Corporate Loan from state Bank of India is secured by way of first pari passu charge on entire current assets excluding assets having specific charge, both present and future, and collaterally by way of second pari passu charge on the fixed assets of the company.

c. The Working Capital Limit borrowed by the Company (whether by way of Cash Credit or Working Capital demand Loan or Overdraft limit) from the Consortium is primarily secured by way of 1st pari passu charge on entire current assets of the company and collateraly by way of second pari passu charge on the entire fixed assets excluding assets having specific charge, both present & future.

d. Vehicle loans are secured by way of hypothecation of respective vehicles.

3. enterprise resource Planning (ERP) - the financial accounting and manufacturing module of ERP Package as already implemented is still in the process of improvement. a few entries are recorded in the books manually to complete the accounting of current year.

4. in the opinion of the Board, the Current assets, Loans & advances are approximate to the value stated, if realised in the ordinary course of business.

5. Pursuant to amendments to schedule Vi to Companies act, 1956 vide Notification no. GSR 719 (E) dated 16th November 2007, the amount due to micro, small & medium enterprises have not been disclosed for the current year, as the company is in the process of identifying vendors registered under micro, small & medium enterprises development act, 2006 and gathering information to make the necessary disclosure.

6. Employees Benefits

(a) Defined Contribution Plans:

the company makes contribution towards employees Provident Fund and Employee’s state insurance scheme. under the rules of these schemes, the company is required to contribute a specified percentage of payroll costs. the company during the year recognised the following amount in the profit and loss account under company’s contribution to defined contribution plan.

(b) Defined Benefit Plans:

the employees’ gratuity fund scheme managed by Kotak Mahindra Old mutual Life insurance Ltd. is a defined Benefit Funded Plan. the present value of obligation is determined based on actuarial valuation using the Projected unit Credit method, which recognizes each period of service as giving rise to additional unit of employees benefit entitlement and measures each unit separately to built up the final obligation. the obligation for Leave encashment is a defined unfunded benefit plan, which is recognized in the same manner as gratuity.

Note:

(i) Actuarial’s valuation is based on escalation in future salary on account of infation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

7. As per Accounting Standard 18 “Related Party Disclosures” issued by the Companies (Accounting Standard) Rules, 2006 related parties and transactions with related parties are as follows:

(i) Related Parties:

A subsidiary Company

(a) Bell Ceramics Ltd

B Associates

(a) Freesia Investment and Trading Co. Ltd. (b) Goodteam investment & trading Co. Pvt. Ltd. (c) Alfa mercantile Ltd. (d) morning Glory Leasing & Finance Ltd. (e) iris designs Pvt. Ltd. (f) Orient rave mercantile Ltd. (g) mahendra K. daga - HuF

C Key managerial Personnel (a) mahendra K. daga (b) madhur daga

D Relatives of key managerial Personnel

(a) Sarla Daga w/o mahendra K. daga (b) Roma monisha sakraney daga w/o madhur daga

8. (i) the company is engaged in manufacture of Ceramic and Vitrified tiles. the entire operations are governed by same set of risk and returns. Hence, the same has been considered representing a single primary segment. the said treatment is in accordance with the guiding principles enunciated in the accounting standard-17 on segment reporting.

(ii) the company sells its products mostly within India with insignificant export income and does not have any operations in economic environments with different risk and returns, hence, its considered operating in single geographical segment.

9. derivative Contracts entered into by the company and outstanding as on 31st march 2011 :

(i) nominal amount of derivatives including forward contracts entered into by the company and outstanding as on 31.03.11 amounts to Rs. 1,37,74,899/- (Previous Year Rs. 16,15,88,958/-).

(ii) all derivative contracts entered into by the company are for hedging purposes only.

(iii) during the year the company has provided Rs. 81,86,295/- towards premium on forward exchange contracts. (Previous Year Rs. 68,92,388/-).

(iv) the amount of unhedged exposure as on 31.03.2011 is Rs. 91,04,603/-

10. Balances of certain sundry Creditors and debtors are subject to confirmation.

11. the previous year’s figures have been regrouped, rearranged and reclassified, wherever necessary.


Mar 31, 2010

(Amount in Rupees)

1. Contingent Liabilities 2009-2010 2008-2009

a) Outstanding Letter of Credit (Net of Margins) furnished in favour of suppliers 3,96,82,881 5,49,63,716

b) Outstanding Guarantees furnished by Companys Banker in favour of 92,25,000 1,27,86,948 Central Excise, Customs and Others (Net of Margins)

c) Custom/Excise Duty / Service Tax / Income Tax / Sales Tax demands and 1,62,20,709 5,01,79,644 Show Cause notice issued against which company has preferred appeals

(During the year contingent liability of Rs. 53,613/- pending in consumer court has been settled)



2. The nature of Security for Secured Loans including Interest accrued thereon are :

a. The Company has a consortium of four bankers namely State Bank of India, Punjab National Bank, Standard Chartered Bank and Barclays Bank (hereafter called the “Consortium”) for secured loans borrowings.

b. The Term Loan from State Bank of India is secured by way of first charge over entire fixed assets excluding assets having specific charge, both present and future, and collaterally by way of 2nd charge on the current assets of the company.

c. The Working Capital Limit borrowed by the Company (whether by way of Cash Credit or Working Capital Demand Loan or Overdraft limit) from the Consortium is primarily secured by way of 1st pari passu charge on entire current assets of the company and collateraly by way of 2nd pari passu Charge on the entire fixed assets excluding assets having specific charge, both present & future.

d. Vehicle loans are secured by way of hypothecation of respective vehicles.

3. Enterprise Resource Planning (ERP) - A Financial Accounting Package, implemented in the earlier years is still in the process of improvement. A few entries are recorded in the books manually to complete the accounting of current year.

4. In the opinion of the Board, the Current Assets, Loans & Advances are approximate to the value stated, if realised in the ordinary course of business.

5. Pursuant to amendments to schedule VI to Companies Act, 1956 vide Notification No. GSR 719 (E) dated 16th November 2007, the amount due to Micro, Small & Medium Enterprises have not been disclosed for the current year, as the company is in the process of identifying vendors registered under Micro, Small & Medium Enterprises Development Act, 2006 and gathering information to make the necessary disclosure.

6. The company is in the business of manufacture of Ceramic and Vitrified Tiles. Since, all the activities are related to the main activity, there are no reportable segments as per the requirement of Accounting Standard-17.

7. Derivative Contracts entered into by the company and outstanding as on 31st March 2010 for Hedging Currency and Interest Rate Related Risks:

(i) Nominal amount of derivatives including forward contracts entered into by the company and outstanding as on 31.03.10 amounts to Rs. 16,15,88,958/- (Previous Year 10,71,37,500/-).

(ii) All Derivative contracts entered into by the company are for hedging purposes only.

(iii) During the year the company has provided Rs. 68,92,388/- towards premium on forward exchange contracts. (Previous Year Rs. 1,48,712/-).

8. During the year the company has written off Rs. NIL towards old debtors. (Previous Year Rs. 2,53,04,821/-)

9. Balances of Sundry Creditors and Debtors are subject to confirmation.

10. The previous years figures have been regrouped, rearranged and reclassified, wherever necessary.

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