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Notes to Accounts of Orient Bell Ltd.

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.

 
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