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Directors Report of Torrent Cables Ltd. Company
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Directors Report of Torrent Cables Ltd.

Mar 31, 2014

Dear Shareholders,

The Directors have pleasure in presenting the 23,d Annual Report of the Company together with the Audited Accounts for the year ended on 31st March, 2014.

Financial Results

The summary of financial results for the year under review is as under:

[Rupees in crores]

Current Year ended Previous Year ended Particulars 31-03-2014 31-03-2013

Sales and Operating Income 220.92 377.49

Profit before Depreciation, Interest and Tax 13.12 34.30

Less: Depreciation 7.43 7.84

Interest 0.29 2.21

Profit before Tax 5.40 24.25

Less: Tax Expenses (Net) 1.16 4.81

Deferred Tax 0.08 1.52

Net Profit for the year 4.32 17.92

Add: Balance brought forward from previous year 53.55 40.92

Distributable Profit 57.87 58.84

Appropriation :

Transferred to General Reserve 0.22 1.79

Proposed Dividend 1.29 3.01

Dividend Distribution Tax on Proposed Dividend 0.24 0.49

Balance carried to the Balance Sheet 56.12 53.55

Dividend

Your Directors have pleasure in recommending dividend @15 % i.e., Rs.1.50 (one rupee and fifty paisa) per equity share amounting to Rs. 1.29 crore (rounded off) and dividend distribution tax amounting to Rs. 21.92 lacs (rounded off). The proposed dividend would be tax free in the hands of shareholders.

Year in Retrospect

During the year under review, despite the continuing demand stagnation further aggravated by the overhang of significantly expanded cable manufacturing capacity, your company was able to report a sales turnover of Rs 220.92 crore ( Rs.377.49 crore in previous year ) which is 41.47% lower than the previous year. The Company could register EBITDA of Rs.13.12 crore (Rs.34.30 crore in previous year) which is again 61.74 % lower than previous year.

The performance of the company was badly affected by the lower demand in cable industry due mainly to continuing misfortunes of power sector with stalled generation projects and cash-strapped utilities. Expectation of an economic and industrial turn around in the year under review was belied. Situation, in fact, worsened. Manufacturing capacities added by the existing cable manufacturers over the years and entry of overseas manufacturers only added to the woes of cable industry struggling for viable orders.

Current Slowdown and Competitive Pressure

The Indian power cables market is highly competitive and fragmented with a large number of cable manufacturers in both organized and unorganized sectors. Moreover, with major capacity additions by larger players, and sluggish demand for cables due to economic downturn, the revenues and margins of all the players have been adversely impacted. The domestic power cable business in LT/HT/ EHV PVC & XLPE segments (in which the Company operates) had suffered a steep de-growth in FY 2012-13 by over 14% as compared to FY 2011-12 majorly due to delay in the power projects coupled with the increasing imports in this segment. The situation witnessed a slight improvement in FY 2013-14 but still remained over 9% lower than that of FY 2011-12. This had an impact on the order book profile of the Company as reflected in the decline in sales during the year 2013-14.

Margins continued to remain under pressure due to high intensity of competition in the industry. Although the Company is relatively a small player compared to big domestic companies having sales turnover in thousands of crores, the company has been able to maintain decent level of capacity utilization in the recent past, mainly because of its technical and cost competitiveness (cost competitiveness arising from control on scrap generation and reduction in overheads) as well as strong relationship with customers.

Positive Long Term Outlook

With the expectation of the new stable government in place at the center, the long term outlook for the power cable industry is expected to be favorable, driven by power sector reforms to expand the generation capacity and strengthen transmission & distribution network. Also, with renewed focus on power sector reforms in place the distribution sector is expected to undergo improvement, thereby initiating the need to curb T&D losses and hence increasing the demand for insulated power cables in the country. Taking clue from such positive development, turnaround scenario is envisaged during the latter part of the financial year 2014-15. With growth in power sector, cable industry is set to grow as well.

Finance

We are pleased to report that your Company is a debt free company except for fund based (cash credit facilities) and non fund based credit limits (letter of credit/bank guarantee) of Rs.99 crores sanctioned by Company''s Bankers against the hypothecation of stock and book debts. There are no term loans from Banks/Financial Institution outstanding as at the end of the financial year. The immovable assets of the company are free of any encumbrances. The Company has working capital facilities with the banks and the utilization stood at Rs. 5.43 crore as on 31st March, 2014.

Credit Rating

The Company''s fund-based line of credit has been reaffirmed the long term rating of " A "wifh stable oudook by ICRA meaning adequate degree of safety regarding timely discharge of obligations. Non fund based short term facilities have been reaffirmed rating of "A1 " with stable outlook meaning a very strong degree of safety regarding timely discharge of obligations.

Composite Scheme of Amalgamation

The Board in its meeting on 31st October, 2013 had accorded its approval to carry out a Study and thereby evolve a suitable and optimum business model along with a desirable capital structure for the Power sector operations of the Torrent Group covering, inter alia, the possibility of appropriate re-organisation including merger, demerger, forward/backward integration, sale of any division, etc.

Based on the outcome of the Study, the amalgamation of Torrent Cables Limited and Torrent Energy Limited (wholly owned subsidiary of Torrent Power Limited ) with Torrent Power Limited alongwifh appropriate re-organisation of consolidated long-term financing arrangements was found to be a suitable and optimum business model for the power sector operations of the Torrent Group.

Torrent Energy Limited, a wholly owned subsidiary of Torrent Power Limited is engaged in the similar business as that of Torrent Power Limited and Torrent Cables Limited is one of the major suppliers of power cables for the power transmission and distribution activities of Torrent Power Limited as well as Torrent Energy Limited. Besides, these companies, being part of the Torrent Group, in view of similar business of Torrent Energy Limited and Torrent Power Limited and complementary business relationship between Torrent Cables Limited on one hand and Torrent Energy Limited & Torrent Power Limited on the other hand, it is proposed to consolidate the activities of Torrent Cables Limited, Torrent Energy Limited and Torrent Power Limited by way of amalgamation. The proposed amalgamation is expected to benefit all the three companies and their stakeholders in terms of synergies of operations, higher integration, concentrated management focus, increased shareholders'' value and enhanced reputation of Torrent Group.

In this regard, a composite scheme of amalgamation of Torrent Energy Limited and Torrent Cables Limited with Torrent Power Limited (Scheme) under the provisions of Sections 391-394 of the Companies Act, 1956 including the share exchange ratio was recommended by the Audit Committee and approved by the Board of Directors at their respective meetings held on 12th May, 2014. The Appointed Date of the Scheme is 1st April, 2014. The Share exchange ratio determined by the valuer, M/s. Price Waterhouse & Co., LLP, Chartered Accountants and the fairness opinion provided by M/s IDFC Securities Limited, Merchant Bankers, on the same, is as under:

Every shareholder holding 20 (Twenty) fully paid up equity shares of Rs. 10/- each of Torrent Cables Limited, shall be entided to receive 19 (Nineteen) fully paid up equity shares of Rs 10/- each of Torrent Power Limited.

Since Torrent Energy Limited is a wholly owned subsidiary of Torrent Power Limited, the investment of the Company in Torrent Energy Limited shall stand cancelled.

The Scheme is conditional upon, inter alia, various regulatory and other necessary approvals and sanctions from the lenders on re- organisation of consolidated long term financing arrangements on such terms and conditions as may be acceptable to the Board.

Change in legislation governing companies in India

During die year under review, die provisions of the new Companies Act have been made effective replacing die Companies Act of 1956 by the induction of die Companies Act, 2013. The Government has notified die implementation of many sections in two tranches. Some effective from 12* September, 2013 and further additional sections effective from 1st of April, 2014.

The Ministry of Corporate Affairs, has clarified that the provisions of the Companies Act, 1956 would remain applicable in respect of financial year ending on 31st March, 2014 and die directors'' report and auditors'' report thereon. Accordingly, die company has continued die compliance of the said provisions.

In view of die foregoing changes in law, the Board of Directors has, at dieir meeting held on 12th May, 2014:

£=* constituted Corporate Social Responsibility (CSR) Committee consisting of Shri Vasant A Shah, non-executive independent director, Shri Jayesh Desai, non-executive non-independent director and Shri Raghu Parakh, Director-in-Charge (executive non-independent) in line with the requirement of provisions of section 135 of the Companies Act, 2013, read with rules made thereunder. The CSR Committee will recommend the CSR Policy to the Board. Once the CSR Policy is finalized the Company would comply with the legal requirements based on the CSR activities selected by the CSR Committee.

- constituted Nomination and Remuneration Committee consisting of Shri Vasant A Shah and Shri Rohit C Mehta, both non- executive independent directors and Shri Jayesh Desai, non-executive & non-independent director of the Company and defined their terms of reference/scope of working in line with the provisions of section 178 of the Companies Act, 2013 read with the rules made thereunder.

- renamed Shareholders / Investors Grievance Committee with a new nomenclature of "Stakeholders Relationship Committee (SRC)" in line with the provisions of section 178 of the Companies Act, 2013 read with the rules made thereunder with the scope as per the said provisions.

- revised the scope of terms of reference/scope for Audit Committee in line with the provisions of Section 177 of the Companies Act, 2013 with additional scope on vigil mechanism, safeguards against victimization of persons who use such mechanism, direct access to chairperson of audit committee in appropriate or exceptional cases etc.

Vigil Mechanism

The provisions of section 177 (9) and (10) of the Companies Act, 2013 mandates every listed company to establish vigil mechanism for directors and employees to report genuine concern in such manner as may be prescribed. We are pleased to report that your company had already formulated such mechanism pursuant to the provisions of the corporate governance voluntary guidelines, 2009 read with clause 49 of the listing agreement, and had accordingly framed and adopted the Whistle Blower Policy on 18th January, 2012. The provisions of the said policy, provided for adequate safeguards against the victimization of persons who use such mechanism and make provisions for direct access to the chairperson of the Audit Committee in appropriate or exceptional cases. The Board of Directors of the Company have, at its meeting held on 12th May, 2014, approved minor revisions in the whistle blower policy to be in line with the provisions of Companies Act, 2013 read with the listing agreement. A copy of the latest Whistle Blower Policy of the Company is available at the website of the company - wwwtorrent cables.com.

Corporate Social Responsibility

Your Company is a part of Torrent Group. The Group is actively involved in several community welfare projects since long. Apart from significant involvement in earthquake rehabilitation, institution building, environment care, community welfare and slum electrifica- tion, Torrent''s other notable contributions include financial support to families in distress, helping in building of fully equipped 60-bed hospital in earthquake hit Kutch region, donations to Prime Minister''s National Relief Fund to rebuild the lives of Tsunami victims, establish and manages medical institutions such as the U. N Mehta Institute of Cardiology and Research Centre at Ahmedabad. The Group has been carrying on all these activities through various trusts and foundation since long wherein group companies participate/ contribute. As reported, the Board of Directors of the Company has, as required by the provisions of section 135 of the Companies Act, 2013, constituted Corporate Social Responsibility Committee. The committee will meet as and when required. The CSR Committee will recommend the CSR Policy to the Board. Once the CSR Policy is finalized, the Company would take appropriate steps towards the compliance of the legal requirements.

Environment, Health and safety

The Company accords the highest priority to Environment, Health and Safety. Your Company has implemented "Conviction for Safety" policy, in line with its philosophy of highest importance to safety in its various operations. This is an effort to create more awareness about safety at the work place and compliance of safety norms, and also to substantially compensate the personnel and their families, who may be adversely affected by accidents. The said Policy is aimed at creating stake in safety for every employee. We are pleased to report that this year continued to be an accident free year due to the highest standard of safety being administered. No claim has been reported or received under the Conviction for Safety Policy nor any complaint or negative reporting has been received under Whistle Blower Policy or under Policy on Protection of Employees against Sexual Harassment at Work Place of the Company.

Directors

Shri Jayesh Desai, retire by rotation at the ensuing Annual General Meeting and, being eligible, offer himself for reappointment.

Members'' attention is invited to the provisions of sub-section 13 of Section 149 of the Companies Act, 2013, effective from 1st April, 2014. As per the said provisions, the independent directors are not required to retire by rotation i.e. they are now becoming non rotational director. In view of the above, it is proposed to appoint the independent directors for a fixed period of 3 years not liable to retire by rotation within this term. Accordingly, Shri Rohit C Mehta, Shri Vipin S Parikh, Shri Praful Anubhai and Shri Vasant A Shah, non-executive independent directors, are proposed to be appointed for a fixed term of three years not liable to retire by rotation within the said term.

The Board of Directors of the Company has, at their meeting held on 12th May, 2014, subject to the approval of the shareholders of the Company, appointed Shri Raghu Parakh as Director In Charge & Chief Executive Officer of the Company with effect from 1st June, 2014 upto 31st July, 2015, with remuneration. The requisite resolution along with the explanatory statement is provided in the notice convening the ensuing annual general meeting

A brief resume and other relevant details in respect of all the above directors, being proposed for appointment and re-appointment, are given in the Explanatory Statement to the Notice convening the Annual General Meeting as well as under corporate governance report of the Board. The Board of Directors recommends the appointment and re-appointment of directors as aforesaid.

Directors'' Responsibility Statement

In terms of Section 217 (2AA) of Companies Act, 1956, in relation to the financial statements for the year 2013-14, the Board of Directors states that:

(i.) In preparation of the Annual Accounts, the applicable Accounting Standards have been followed along with proper explanation.

(ii.) The Accounting Policies have been applied consistently, subject to such adjustments and estimates made that are reasonable and prudent for the preparation of accounts, so as to give a true and fair view of the state of the affairs of the Company as on 31st March, 2014 and the profit for the year ended on 31st March, 2014;

(iii.) The Company has taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 to safeguard the assets of the Company and to detect fraud and other irregularities; and

(iv.) The financial statements have been prepared on a going concern basis.

Corporate Governance

As required by Clause 49 of the Listing Agreement, the Management Discussion and Analysis Report and Report on Corporate Governance form part of this Annual Report. A certificate from the Statutory Auditors of the Company regarding compliance with the conditions of Corporate Governance as stipulated in clause 49 of the listing agreement is also appended to the Annual Report.

Auditors

- Statutory Auditors

M/s. C C Chokshi & Co., Ahmedabad (Firm Registration No. 101876W), Statutory Auditors of the Company retire at the ensuing Annual General Meeting and are eligible for re appointment. The Company has received a confirmation from them about their eligibility for appointment as Statutory Auditors, as required under section 141 of the Companies Act, 2013. The observations made in the Auditors'' Report on the audited accounts of the company for the year ended 31st March, 2014, are self explanatory and therefore, do not require further explanation. Your Directors recommend members'' approval for the appointment of statutory auditors as proposed in the said notice.

- Cost Auditors

The Board of Directors of the Company, at their meeting held on 25s1 January, 2014 appointed M/s. Kirit Mehta & Co., Cost Accountants, Mumbai as Cost Auditors of the Company to audit cost accounts/records of the Company for the financial year 2014-15 and also approved their remuneration.

However, as per the provisions of Section 148(3) of the Companies Act, 2013(which is effective from 1st April, 2014), the remuneration payable to cost auditors is required to be approved by the shareholders of the company. Accordingly, Your Directors recommend members'' approval in respect of the cost auditors'' remuneration as detailed in the notice convening the annual general meeting.

- Internal Auditor

M/s. Manubhai & Shah, Chartered Accountants, Ahmedabad have been appointed as internal auditors of the company by the Board of Directors of the Company, based on the recommendation of the Audit Committee. The Internal Auditors report their findings on the internal audit carried out by them to the Audit Committee on a quarterly basis.

- Secretarial Auditor

As a good governance practice, the Company has been following the practice of getting the secretarial compliance audit carried out since long which has now become a mandatory requirement under the Companies Act, 2013. This audit is focused on reviewing the compliance of various procedures under Company Laws, Securities Laws, SEBI Laws, and Listing Agreement with Stock Exchange, on a quarterly basis. The report on secretarial compliance is placed before the Board of Directors on a quarterly basis for review. As provided under the provisions of Companies Act, 2013, the practicing company secretary will be providing yearly secretarial audit report in compliance with the applicable provisions.

Insurance:

All the assets of the company are adequately insured by the Company.

Conservation of Energy, Research & Development and Foreign Exchange Earning & Outgo

A statement containing necessary information required under the Companies (Disclosures of Particulars in the Report of Board of Directors), Rules, 1988 is annexed to this report as Annexure — 1.

Human Resources

Committed and motivated employees are one of the most important assets for the Company. The Company is committed towards excellence in action through development and administration of opportunities for its employees that helps attract, retain and develop a diverse workforce.

Performance management area is also given prime attention. Contribution of each individual employee in the organization''s growth is evaluated and their efforts are rewarded. The Company is committed towards creating a healthy conducive and safe working environment. During the year, there were significant areas of achievement around processes and policy development. Continuous efforts were made to implement Gender Diversity initiatives, undertaken by the Company, in various areas to ensure enhanced representation of women employees. On the industrial front, the Company continued to strengthen cordial industrial relations during the year. The Company has taken special initiatives to communicate more with its employees and to foster unity on occasions like Independence Day, Republic Day and Founders'' Day.

The Company has a diverse workforce of 343 as on 31st March, 2014. None of the employee of the Company is drawing remuneration higher than the limit prescribed under the Companies (Particulars of Employees) Rules, 1975. In view of the same, the information as required under Section 217 (2A) of the Companies Act, 1956 is not required to be furnished.

Appreciation and Acknowledgements

The Board of Directors is pleased to place on record their appreciation for the continued guidance and support received from the Government of India, the State Governments. The Board is thankful to the Shareholders, Auditors, Consultants, Vendors, Service Providers, Insurers and all its employees for their unstinted support and contribution. The Board also recognizes the contribution of the esteemed customers to the growth of the Company and takes this opportunity to pledge the Company''s commitment to serve them.

For and on behalf of the Board, For Torrent Cables Limited

Dated: 12th May, 2014 ROHIT C MEHTA

Place: Ahmedabad Chairman


Mar 31, 2013

Dear Shareholders,

The Directors have pleasure in presenting the 22nd Annual Report of the Company together with the Audited Accounts for the year ended on 31st March, 2013.

Highlights

The key highlights for the financial year 2012-13 are as under:

- Financial Performance:

- Net Sales increased by 17.41% to Rs. 377.49 crore

- PBIDT decreased by 2.14% to Rs. 34.30 crore

- Cash profit decreased by 4.23% to Rs. 25.76 crore.

- PAT decreased by 7.10% to Rs. 17.92 crore.

Increased competitive pressure did not allow last year''s gross margins and recovery of inflation-driven-overhead-rise, causing profits to depress despite healthy increase in sales.

- Production Capacity:

- Capacity has been enhanced during the year by approximately 10% by modernization and improved productivity

- Overall Capacity utilization achieved was 90% of the enhanced capacity as compared to 95% last year of pre-enhancement capacity (equivalent to 89% of enhanced capacity).

- Based on the audits conducted by Siemens, Germany during the year, the Company''s plant has been approved for their global sour cing

Financial Results

The summary of financial results for the year under review is as under

[Rupees in crores] Year ended Year ended Particulars 31-03-2013 31-03-2012

Sales and Operating Income 377.49 321.52

Profit before Depreciation, Interest and Tax 34.30 35.05

Less: Depreciation 7.84 7.61

Interest 2.21 1.38

Profit before Tax 24.25 26.06

Less: Tax Expenses (Net) 4.81 5.17

Deferred Tax 1.52 1.60

Net Profit for the year 17.92 19.29

Add: Balance brought forward from previous year 40.92 27.05

Distributable Profit 58.84 46.34

Appropriation : - Transferred to General Reserve 1.79 1.93

- Proposed Dividend 3.01 3.01

- Dividend Distribution Tax on Proposed Dividend 0.49 0.49

Balance carried to the Balance Sheet 53.55 40.92

Management Discussion and Analysis (MDA)

The detailed analysis of the operating performance of the Company for the year, the state of affairs and the key changes in the operating environment have been included in the Management Discussion and Analysis, which forms part of this Annual Report and attached to the Annual Report.

Dividend

The Board of Directors has, on 22nd May, 2013, recommended dividend at the same level as last year''s i.e., @ 35 % i.e. Rs. 3.50 per equity share amounting to Rs. 3.01crores (previous year Rs.3.01 crores). With dividend distribution tax of Rs. 0.49 crores (previous year Rs.0.49 crores), the total outflow on account of dividend would work out to Rs 3.50 crores (previous year Rs.3.50 crores). The proposed dividend would be tax free in the hands of shareholders.

Future Prospects

The general economic scenario of the country further weakened during the last financial year (FY) but ended with an outlook for recovery in FY 2013-14 with some determined policy initiatives of the Government.

India registered its weakest GDP growth in a decade of 5% for FY 2012-13. Growth rate in Industry, Manufacturing and Utility (electricity, gas & water) sectors slowed down respectively from 3.5%, 2.7% and 6.5% in FY 2011-12 to 3.1%, 1.9% and 4.9%. Index of Industrial Production (IIP) dropped from 2.9% in 2011-12 to 0.7% for April-Dec, 2012. Core industries underperformed due to structural bottlenecks. Shortages of power, coal and natural gas, stoppage of mining activity in some states following legal enforcements on illegal mining were major constraining factors for industrial growth. It reflected in cable industry (for power & control cables) registering a de-growth in value terms by 16.5% in FY 2012- 13. Your company''s performance could not remain insulated from this slow down mainly affecting the margins adversely.

Going by various indicators and studies, the slow down appears to have been bottomed out. GDP growth rate is expected to accele rate though at a weak pace to around 6% for FY 2013-14 and 6.7% for FY 2014-15. Inflation is showing signs of being reigned in raising expectation of monetary policy easing. Inflation pressure is further easing with benign global commodity prices. Forecast for a normal south-west monsoon is further supporting the benign inflation sentiments. However, if structural issues are quickly resolved, a turnaround in investment activity should be possible in the later half of FY 2013-14. Improved governance and concerted action to resolve structural bottlenecks, especially in infrastructure sector is the key.

The prospects of your company''s performance is also characterised by cautious optimism. It is expected to improve progressively during the year.

Finance

The Company had arranged for Suppliers'' Line of Credit of Rs. 20 crore for imported equipments for expansion at Nadiad Plant in 2009-10. The Company repaid the balance amount of Rs. 2.04 crore during the year and there was no liability towards the said facility as on 31st March, 2013. The Company has working capital facilities with the banks and the utilized balance outstanding as on 31st March, 2013 was Rs. 0.37 crore(previous year Rs.5.25 crores).

The Company''s fund based line of credit has been re-affirmed rating of "A " with stable outlook by ICRA meaning adequate degree of safety regarding timely discharge of obligations. Non-fund based short term facilities have been reaffirmed rating of "A1 " with stable outlook meaning a very strong degree of safety regarding timely discharge of obligations

Directors'' Responsibility Statement

In terms of Section 217 (2AA) of Companies Act, 1956, in relation to the financial statements for the year 2012-13, the Board of Directors states that :

1. In preparation of the Annual Accounts, the applicable Accounting Standards have been followed along with proper explanation;

2. The Accounting Policies have been applied consistently, subject to such adjustments and estimates made that are reasonable a nd prudent for the preparation of accounts, so as to give a true and fair view of the state of the affairs of the Company as on 31st March, 2013 and the profit for the year ended on 31st March, 2013;

3. The Company has taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 to safeguard the assets of the Company and to detect fraud and other irregularities; and

4. The financial statements have been prepared on a going concern basis.

Environment, Health and safety

In line with its philosophy of highest importance to safety in its various operations and in an effort to create more awareness at the work place about safety and compliance of safety norms so as to avoid accidents at the work places and also to substantially compensate the personnel and their families who may be adversely affected by accidents, the "Conviction for Safety" policy has been implemented by the Compa ny. It is aimed at everyone having a stake in safety. The safety campaigns and public awareness programs have also been enhanced.

Directors

Shri Vipin S Parikh and Shri Vasant A Shah, Directors of the Company, retire by rotation at the ensuing Annual General Meeting and, being eligible, offer themselves for reappointment. The details pertaining to these directors, as stipulated under Clause 49 of the Listing Agreement, are provided in Report on Corporate Governance forming a part of the Annual Report. The Board of Directors recommends their r e- appointment

Corporate Governance

As required by Clause 49 of the Listing Agreement, a separate Report on Corporate Governance forms part of the Annual Report. Also, a certificate from the Statutory Auditors of the Company regarding compliance with the Corporate Governance Code forms part of this report and attached to the Annual Report.

Auditors

- Statutory Auditors

M/s. C C Chokshi & Co., Chartered Accountants, (Firm Registration No. 101876W), Statutory Auditors of the Company retire at the ensuing Annual General Meeting and are eligible for reappointment. The Company has received a confirmation from them about their eligibility for appointment as Statutory Auditors, as per Section 224(1B) of the Companies Act, 1956. Observations made in the Auditors'' Report are self explanatory and therefore, do not require further explanation.

- Cost Auditors

Pursuant to the approval of the Central Government under Section 233B of the Companies Act, 1956, the Company has appointed M/s. Kirit Mehta and Co., Cost Accountants, Mumbai (Firm Registration No. 00015), as Cost Auditors of the Company for the financial year ended 31st March, 2013. Further, the Company has filed Cost Audit Report for the financial year ended on 31st March, 2012, on 4th February, 2013, within the time limit prescribed by the Central Government.

Conservation of Energy, Research & Development and Foreign Exchange Earning & Outgo

A statement containing necessary information required under the Companies (Disclosures of Particulars in the Report of Board of Directors), Rules, 1988 is annexed to this report as Annexure – 1.

Particulars of Employees

No employee is drawing remuneration as provided under the Companies (Particulars of Employees) Rules, 1975 and hence information as required under Section 217 (2A) of the Companies Act, 1956 is not required to be furnished.

Appreciation and Acknowledgements

Your Directors are grateful and pleased to place on record their appreciation for the excellent support, guidance and co-operation extended by the Government of Gujarat, State Government Bodies and Authorities, Banks and esteemed customers including Group Companies. The Board recognizes contribution of the esteemed customers in the growth of the Company and take opportunity to pledge the Company''s commitment to serve them better. The Board expresses its appreciation for the commitment and contribution of all employees and support extended by the shareholders.

For and on behalf of the Board

Dated : 22-05- 2013 ROHIT C MEHTA

Place : Ahmedabad Chairman


Mar 31, 2012

The Directors have pleasure in presenting the 21st Annual Report of the Company together with the Audited Accounts for the year ended on 31 st March, 2012.

Highlights

The key highlights for the financial year 2011-12 are:

Financial Performance:

- Increase in Net Sales by 26% to Rs. 321.52 Crore.

- Increase in PBDIT by 107% to Rs. 35.05 Crore

- Increase in PAT by 181% to Rs. 19.29 Crore

Higher sales, better product mix (with higher margins) and improved production efficiencies have largely contributed to the higher profit. Capacity Utilization:

- Increase in capacity utilization of new production unit (PU4) was 95% as compared to 65% in the previous year.

- Overall capacity utilization of plant was 95%.

FINANCIAL RESULTS

[Rupees in crore] Year ended Year ended

Particulars

31 March 2012 31 March 2011

Sales / Income 321.52 254.28

Profit before interest, Depreciation, taxation (PBID'I) 35.05 16.97

Less: Interest 1.38 0.86

Depreciation 7.61 7.74

Profit before tax 26.06 8.37

Less: Provision for Tax 5.17 1.85

Less: Deferred tax liability 1.60 -

Add: Provision for Taxation of earlier years not required - (0.35)

Net Profit for the year 19.29 6.87

Balance of profit brought forward from previous year 27.05 26.68

Balance of Profit available for appropriation 46.34 33.55

Appropriation :

- Transferred to General Reserve 1.93 4.00

- Equity dividend 3.01 2.15

- Tax on Distributed Profit 0.49 0.35

- Balance of Profit carried to the Balance Sheet 40.91 27.05

Dividend

Considering the improved performance of the Company, your Directors recommcnd a dividend @ 35% i.e. Rs. 3.50 per equity share amounting to Rs. 3.01 Crores and tax on dividend will be Rs.0.49 Crore. The proposed dividend would be tax free in the hands of shareholders. The Company paid the dividend @ 25% i.e. Rs. 2.50 per equity share last year. '

Future Prospects and Plans

Targeted Power Generation capacity could not be added during the 11th Five year Plan. An ambitious target of adding Power Generation capacity of 1 Lac MW during the 12th Five Year Plan has been set by Govt, of India. Restricted availability of domestic supply of coal and natural gas, high cost of imports, agitations against Nuclear Power Projects are some of the major problems faced by the Power Projects. However, to achieve the targeted GDP growth of 7.3% & 8.6% of the economy for FY 2012-13 and 2013-14 respectively, the Power Sector will have to play an important role. Accordingly, the Power Cable market is also likely to grow steadily.

Prospects for the Company are also expected to be reasonably good.

Finance

The Company had arranged for Suppliers' Line of Credit to the extent of Rs. 20 crores for the imported equipments for expansion at Nadiad Plant in 2009-10. The Company has repaid an amount of Rs. 6.88 crores during the year and the outstanding liability as on 31st March, 2012 was Rs.2.04 crores. The Company has also obtained Working Capital Facilities from the Banks, which stood utilized to the extent of Rs. 5.25 crores as on 31st March, 2012.

Transfer to Investor Education and Protection Fund

The Company has deposited Rs. 0.89 crores in the Investor Education and Protection Fund pursuant to Section 205C of the Companies Act, 1956.

Directors' Responsibility Statement

In terms of Section 217 (2AA) of the Companies Act, 1956, in relation to the financial statements for the year 2011-12, the Board of Directors states that:

- In preparation of the Annual Accounts, the applicable Accounting Standards have been followed alongwith proper explanation;

- The Accounting Policies have been applied consistently, subject to such adjustments and estimates made that are reasonable and prudent for the preparation of accounts, so as to give a true and fair view of the state of the affairs of the Company as on 31st March, 2012 and the profit for the year ended on 31st March, 2012;

- The Company has taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 to safeguard the assets of the Company and to detect fraud and other irregularities; and

- The financial statements have been prepared on a going concern basis.

Corporate Governance

The governance philosophy of the Company rests on five basic principles viz. protection of rights and interests of shareholders, equality in treatment of all shareholders, disclosure of timely and accurate information, strategic guidance and effective monitoring by the Board and accountability of the Board to the Company and its shareholders.

In terms of the Listing requirement, the Management Discussion and Analysis Report, a Report on Corporate Governance, certificate of Auditors' regarding compliance with the Corporate Governance Code and declaration by Director & CEO regarding compliance with the Code of Conduct, form part of and are attached to the Annual Report.

Holding Company

Torrent Private Limited is holding 61% of the Equity Shares of your Company and accordingly, your Company is a subsidiary of Torrent Private Limited.

Particulars of Employees

No employee is drawing remuneration exceeding the limits specified in the Companies (Particulars of Employees) Rules, 1975 as amended and hence information required under Section 217(2A) of the Companies Act, 1956 is not furnished.

Directors

Shri Jayesh Desai was appointed as an Additional Director effective from 18th January, 2012 and holds office upto the commencement of ensuing Annual General Meeting and offers himself for appointment.

Shri Rohit C Mehta and Shri Prafull Anubhai, Directors of the Company, retire by rotation at the ensuing Annual General Meeting and, being eligible, offer themselves for reappointment.

Shri Ruchir Modi was appointed as Director & CEO of the Company effective from 18th January, 2012, for a period of 3 years. Shri Modi has resigned from the Board of Directors effective from 15th May, 2012.

Shri Jagrut Vyas has resigned from the Board of Directors effective from 18th January, 2012.

Shri Raghu Parakh resigned as Director of the Company effective from 18th January, 2012. Shri Parakh has again been appointed as an Additional Director effective from 15th May, 2012 and shall hold office upto the commencement of ensuing Annual General Meeting and offers himself for appointment. Shri Parakh has also been appointed as Director-in-Charge of the Company effective from 15th May, 2012, for a period of 3 years.

The Board of Directors recommends their appointment/re-appointment for approval of the shareholders of the Company.

Auditors

M/s. C C Chokshi & Co., Chartered Accountants, Statutory Auditors of the Company, retire at the ensuing Annual General Meeting and are eligible for re-appointment. The Audit Committee, at its meeting held on 15th May, 2012, has recommended re-appointment of M/s. C C Chokshi & Co., as Statutory Auditors of the Company. They have furnished a certificate regarding their eligibility for re-appointment as Statutory Auditors, pursuant to the provisions of Section 224 (IB) of the Companies Act, 1956.

Observations made in the Auditors' Report are self explanatory and therefore, do not require further explanation.

Cost Auditors

M/s. Kirit Mehta and Co., Cost Accountants, Mumbai have been appointed as Cost Auditors of the Company for the Financial Year 2011-12. The cost audit report for the Financial Year 2010-11 was filed on 8th August, 2011, within the prescribed time limit of 180 days from the close of the financial year.

Insurance

All the properties of the Company, including factory buildings, plant and machineries, stocks, etc. are adequately insured.

Conservation of Energy, Research & Development and Foreign Exchange Earning & Outgo

A statement containing necessary information required under the Companies (Disclosures of Particulars in the Report of Board of Directors), Rules, 1988 is annexed hereto and forms part of this report. (Annexure -1)

Acknowledgements

The Directors are pleased to place on record their appreciation for the continued support, guidance and co-operation received from the Government of Gujarat, Banks and esteemed Customers including Group Companies. The Board recognizes the contribution of the esteemed customers in the growth of the Company and takes the opportunity to pledge the Company's commitment to serve them better. The Board would like to express its sincere appreciation for the commitment and contribution of all employees. The Company thanks its shareholders for their unstinted support.

For and on behalf of the Board

Dated : 15-05-2012 ROHIT C MEHTA

Place : Ahmedabad Chairman


Mar 31, 2010

The Directors present the Nineteenth Annual Report on the business and operations of the Company and the Audited Accounts for the year ended 31st March, 2010.

Financial Results

[Rupees in crore] Particulars Year ended 31-03-2010 Nine Months ended 31-03-2009

Sales / Income 172.68 141.00

Profit before interest, depreciation, taxation 11.74 13.42

Less: Interest 0.07 0.05

Depreciation 2.31 2.10

Profit before tax 9.38 11.27

Less : Provision for tax and fringe benefit tax 1.65 1.41

Add : Provision for taxation of earlier years not required 3.40 0.21

Less : Deferred Tax Asset 0.63 0.00

Net Profit for the year 10.50 10.07

Balance of Profit brought forward from previous year 26.18 25.13

Balance of Profit available for appropriation 36.68 35.20

Appropriation:

- Transferred to General Reserve 7.00 6.00

- Equity dividend 2.58 2.58

- Tax on Distributed Profit 0.43 0.44

- Balance of Profit carried to the Balance Sheet 26.67 26.18



Dividend

Your Directors recommend a dividend of Rs. 3.00 per equity share amounting to Rs. 2.58 crore. The tax on this dividend will be Rs. 0.43 crore. The proposed dividend would be tax free in the hands of shareholders.

Operations

The gross sales for the year ended on 31st March, 2010 was Rs. 186.54 crore. Your Company has earned Profit Before Tax (PBT) of Rs. 9.38 crore. The previous accounting year was for the period of nine months (July, 2008 to March, 2009) and hence the performance figures for the year are not comparable with the previous year.

The New HT XLPE Cable line had commenced commercial production from March, 2010. There was delay of nearly 4 months.

The demand for the cables was affected in the first half of the year on account of recessionary trend in the market. Further the raw material prices were on reducing trend which affected the price realization. The competition was severe due to lower demand in the market. This affected the top line - value realization and also the bottom line - margins.

The input prices particularly metals had shown the increasing trend from second half of the year but the market conditions did not improved and margins were severely affected in the second half of the year.

Future Prospects and Plans

The power sector performance over the last year has been mixed bag. Inspite of encouraging policies, desired capacity addition has not picked up significantly. However, the budget proposal for the year 2010-11 to double the allocation for power sector from Rs. 2130 crore to 5130 crore should attract fresh investment in the sector. The Government targets to add over 78000 MW capacity by 2012. Rs.1,85,511 crores is expected to be spent by private sector for the development of power sector during the Eleventh Five Year Plan - Year 2007-08 to 2011-12. In distribution segment, though at present private participation is slow but expected to grow sizeably in future.

The above factors should have positive impact on the power related business and demand is likely to be picked up in time to come.

The discouraging factor is the increasing trend in the raw material prices which can not be passed on to the customers since in cable industry order finalization takes a long time and normally the orders are firm price. This may affect the performance of the Company.

Finance

The Company has arranged for Suppliers Line of Credit to the extent of Rs. 20 crore for the imported equipments in respect of expansion undertaken at Nadiad plant. The Company has utilized the facility to the extent of Rs. 10 crores. Further, Company has disbursed Rs. 46 crore from internal accruals for the expansion.

Apart from Rs. 10 crore stated above, Company has no other borrowings.

Transfer to Investor Education and Protection Fund

No amount was falling due during the year to be deposited in the Investor Education and Protection Fund established by the Central Government pursuant to Section 205C of the Companies Act, 1956.

Directors Responsibility Statement

As required by Section 217(2AA) of Companies Act, 1956, the Directors inform that :

1. The applicable Accounting Standards have been followed in the preparation of the Annual Accounts.

2. The Accounting Policies have been applied consistently, subject to such adjustments and estimates made that are reasonable and prudent for the preparation of accounts, so as to give a true and fair view of the state of the affairs pf the Company at the end of the financial year and the profit of the Company for the year.

3. The Company has taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 to safeguard the assets of the Company and to prevent fraud and irregularities.

4. The annual accounts have been prepared on a going concern basis.

Corporate Governance

Pursuant to Clause 49 of the Listing Agreement with the Stock Exchange, Management Discussion and Analysis Report, Corporate Governance Report, Auditors Certificate regarding compliance of conditions of Corporate Governance and declaration by Director-in-Charge for Compliance of Code of Conduct, form part of this Annual Report.

Holding Company

Torrent Private Ltd. -is holding 61% of the Equity Shares of your Company and accordingly, your Company is a subsidiary of Torrent Private Ltd.

Particulars of Employees

The information required under section 217(2A) of the Companies Act, 1956, read with Companies (Particulars of Employees) Rules, 1975, forms part of this report as Annexure - 2. However, as permitted by section 219(I)(b)(iv) of the Companies Act, 1956, this Annual Report is being sent to all shareholders excluding the said Annexure. Any shareholder interested in obtaining the particulars may obtain it by writing to the Company Secretary at the Registered Office of the Company.

Directors

Shri Rohitbhai C Mehta and Shri Prafull Anubhai, Directors of the Company retire by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment.

Auditors

The Auditors, M/s. C C Chokshi & Co., Chartered Accountants, Ahmedabad retire at the ensuing Annual Genera] Meeting and are eligible for re-appointment. The Audit Committee in their meeting held on 10th May, 2010 has recommended the re-appointment of M/s. C C Chokshi & Co., as Auditors of the Company.

Notes on Accounts are self explanatory and do not require further explanation.

Insurance

All the properties of the Company, including factory buildings, plant and machinery, stocks, etc. are adequately insured.

Fixed Deposits

The Company has not been accepting/renewing fixed deposit since January, 1999.

Energy Conservation, Research & Development and Foreign Exchange Earning & Outgo

A statement containing necessary information required under the Companies (Disclosures of Particulars in the Report of Board of Directors) Rules, 1988 is annexed and forms part of this report. (Annexure -1)

Acknowledgements

Your Directors are grateful and pleased to place on record their appreciation for the support, guidance and co-operation extended by the Government of Gujarat, Banks and esteemed customers including Group Companies. The Board, also express its appreciation for the understanding and support extended by the shareholders and employees of the Company, at all levels.

For and on behalf of the Board

Dated .: 10th May, 2010 ROHIT C MEHTA

Place : Ahmedabad Chairman

 
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