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Directors Report of Veto Switchgears & Cables Ltd.

Mar 31, 2015

Dear Members,

The Director's have great pleasure in presenting you the 8th Annual Report on the business and operations of the Company together with the Audited Statements of Accounts for the financial period from April 1, 2014 to March 31, 2015 and other accompanying reports, notes and certificates.

1. Company Performance

Your Company has grown exponentially during the current financial year. The financial results of current financial year are as follows:-

Financial Results

(Rs. in Lacs)

Particulars Consolidated

2014-2015 2013-2014

Income from operation 9730.22 9447.72

Profit before Interest/ Depreciation/Tax 1571.92 1168.34

(PBDIT)

Less: Interest & Financial Charges 395.17 204.73

Less: Depreciation 201.37 120.13

Profit Before Tax (PBT) 975.38 843.48

Less: Provision for Taxation 261.01 234.66

-Current

-Deferred

Profit after Taxation (PAT) 714.37 608.82

Balance Carried Forward 714.37 608.82



Particulars Standalone

2014-2015 2013-2014

Income from operation 9730.22 9447.72

Profit before Interest/ Depreciation/Tax 1572.10 1168.53

(PBDIT)

Less: Interest & Financial Charges 395.17 204.73

Less: Depreciation 201.37 120.13

Profit Before Tax (PBT) 975.56 843.67

Less: Provision for Taxation 261.01 234.66

-Current -

-Deferred -

Profit after Taxation (PAT) 714.54 609.01

Balance Carried Forward 714.54 609.01



During the year under review on consolidated basis our Company earned an income of Rs. 975.38 Lacs against Rs. 843.48 Lacs in the previous year. The Company earned profit after tax of Rs. 714.37 Lacs as compare to Rs.608.82 Lacs in the previous year. The Company had Income from operation of Rs. 9730.22 Lacs as compared to Rs. 9447.72 Lacs in previous year. The Profit before Interest/Depreciation/Tax (PBIT) was Rs. 1571.38 Lacs as compared to Rs. 1168.34 Lacs in previous year.

During the year under review on standalone basis our Company earned an income of Rs. 975.56 Lacs against Rs. 843.67 Lacs in the previous year. The Company earned profit after tax of Rs. 714.54 Lacs as compare to Rs. 609.01 Lacs in the previous year. The Company had Income from operation of Rs. 9730.22 Lacs as compared to Rs. 9447.72 Lacs in previous year. The Profit before Interest/Depreciation/Tax (PBIT) was Rs.1572.10 Lacs as compared to Rs. 1168.53 Lacs in previous year.

Keeping pace with growth trajectory and its efforts to improve efficiency, productivity and profitability the management seeks the trust of shareholders in future growth of the Company and enhancement of shareholders wealth.

Dividend

The Board of Directors has decided not to recommend any dividend for the year ended on 31st March, 2015.

Reserves

Rs. 71,454,473 has been transfer to reserves and surplus account during the current year.

IPO proceeds and Deployment of funds

Your Company has successfully come up with an IPO on December 13, 2012 and listed on EMERGE in NSE. The issue size was Rs. 25, 00, 50,000/- (Twenty Five Crores Fifty Thousand only) consisting of 50, 01,000 (Fifty Lakh One Thousand only) Equity Shares offered at Rs. 50/- (Face value of shares Rs. 10/- per share and premium of Rs. 40/- per share). The issue open and close date was December 3, 2012 and December 5, 2012 respectively.

The detail of proceeds of IPO is as under:

SI. Particulars Amount (Rs. in Lacs) No.

A Proceeds of Issue 2500.50

B Internal Accruals 49.50

As per RHP, the Proceeds of Issue were Rs. 2500 Lakh and Internal Accruals were Rs. 50 Lakh. However, due to lot size of 3000 Equity shares, IPO proceeds came to Rs. 2500.50 Lakh and therefore internal accruals get reduced by Rs. 0.50 Lakh.

The project covers Modernization of existing facility at Haridwar amounting Rs. 470 Lacs, Working capital requirement amounting Rs. 1580 Lacs, Enhancement of our Company's brand through advertising and other Brand Building activities amounting Rs. 200 Lacs, General Corporate purposes amounting Rs. 100 Lacs and to meet the issue expenses amounting Rs. 200 Lacs.

SI. Particulars Amount No (Rs. in Lacs)

1 Modernisation of existing facility at Haridwar 470.00

2 Working capital requirement 1580.00

3 Enhancement of our Company's brand through advertising and 200.00 other Brand Building activities

4 General Corporate purposes 100.00

5 To meet the issue expenses 200.00

Total 2550.00

As required under clause 52 (IV) (D) of SME Equity Listing Agreement, the utilization of IPO proceeds are being reported on half-yearly basis published by the Company after the same is reviewed by the Audit Committee.

The detailed description with respect to deployment of funds and explanation as per Clause 45 (c) of SME Listing Agreement is given hereunder:

1. Status of implementation of project/ commencement of commercial production

i) As disclosed in the offer document

Sr. Activity Date/Month of Date/Month of No Commencement Completion

1 Land Completed

2 Factory building & civil work October 2012 January 2013 (modernization)

3 Dies October 2012 June 2013

4 Plant & Machinery & other service utilities October 2012 December 2012

(ii) Actual Implementation AUGUST 2013 TO MARCH 2015

(iii) Reasons for delay in implementation, if any DELAY IN ARCHITECTURAL PLAN

2. Status of utilization of issue proceeds

(i) As disclosed in the offer document -

The total cost of the project is estimated at Rs. 2550.00 lacs brief details of which are as follows:

(Rs. in Lacs)

Sr. Details Amount No

1 Modernisation of existing facility at Haridwar, Uttarakhand 470.00

2 Incremental long-term working capital requirement 1,580.00

3 Enhancement of our Company's brand through advertising and other brand building activities 200.00

4 General Corporate Purposes 100.00

5 To meet the Issue expenses 200.00

Total Project Cost 2,550.00

Means of Finance

Particulars Amount Amount (In lacs) (In lacs)

Proceeds of the Issue 2,500.50

Internal accruals 49.50

Total means of finance 2,550.00

(ii) Actual Utilisation - (Rs. in lacs)

Sr. Particulars Total Actual Cost of no. entire project

1 Modernisation of existing facility at Haridwar, 470.00 470.00 Uttarakhand.

2 Incremental long-term working capital 1580.00 1580.00 requirement

3 Enhancement of our Company's brand through 150.50 200.00 advertising and other brand building activities

4 General Corporate Purposes 100.00 100.00

5 To meet the Issue expenses 200.00 200.00

TOTAL 2500.50 2550.00

The details of amount utilized out of the IPO proceeds in the project upto March 31, 2015 is as stated below:

(Rs. in lacs)

Particulars Amount utilized till March 31, 2015

Proceeds from IPO 2500.50

Less :

Issue related expenses 200.00

Utilised towards objects of issue 2300.50

Pending utilization towards objects of issue NIL

(iii) Reasons for deviation, if any NIL

Change in the nature of business, if any

There is no change in the nature of business during current financial year.

Material changes if any affecting the financial position of the Company which have occurred between the ends of the financial year of the company to which the financial year relates and the date of the report.

On Feb 10,2015 the Board decided to migrate the Company from SME Platform to NSE Main Board. A special Resolution was passed through the Postal Ballot on 18th March, 2015. On April 29, 2015 Company was migrated on Main Board of NSE by way of listing its entire share capital of 18327100 Equity Shares on NSE Main Board.

The Board of Directors of the company decided to grant shares under ESOP Scheme to the employees of the company, its holding & subsidiaries company subject to the approval of shareholders in Annual General Meeting.

Management Discussion and Analysis

In terms of the Provisions of Clause 49 of the Listing Agreement, the Management Discussion and Analysis is set out in this Annual Report.

Particulars of Loan, Guarantee and Investments

Loans, guarantees and investments covered under section 186 of the Companies Act, 2013 form part of the notes to the financial statements provided in this Annual Report.

Particulars of Contracts and Arrangement under section 188

Particulars of contracts and arrangements made with related parties referred to in Section 188 (1) of the Companies Act, 2013, in the prescribed form AOC-2, is appended as Annexure III to the Board's Report.

Deposits

The Company has not accepted any deposits from the public. The details relating to deposits, covered under Chapter V of the Act.-

a) Accepted during the year : NIL

b) Remained unpaid or unclaimed as at the end of the year: NIL

c) Whether there has been any default in repayment of deposits or payment of interest thereon during the year and if so, number of such cases and the total amount involved-

i. At the beginning of the year: NIL

ii. Maximum during the year: NIL

iii. At the end of the year: NIL

Investments

Our Company has total fixed deposit of Rs. 57.82 lacs including accrued interest with the Indian Overseas Bank, M.l Road branch, Jaipur.

2. Business Operations/ State of Company's Affairs

Our Company is an ISO 9001:2008 certified company, engaged in the manufacture and sale of wires & cables and electrical accessories in India. The product portfolio ranges from industrial cables, stand cables to telephone & co-axial wires, from general switches to modular switches, from ceiling fans to rechargeable fans, compact fluorescent lamps, LED bulbs and other electrical accessories. Our Company supplies these products under the brands "VETO" and "VIMAL POWER" through large network of dealers to the customers in India as well as selected customers abroad.

Future Prospects

1. Company is planning to open 100 Retails exclusive Veto Retails outlets in Rajasthan.

2. Explore the possibility of marketing in abroad.

3. Board of the Company intents for direct listing in Bombay Stock Exchange Limited.

Raw Material

Our Company's present and proposed consumption of Raw material is as under:

(Qty. in kg)

Product category Existing (2014-15) Proposed (2015-16)

Copper 565170 678204.00

PVC Resin 86122 103346.40

Aluminium 621887 746264.40

Infrastructure facilities

* Power

Presently, we have 400 KVA of power supply sanctioned by Uttarakhand Power Corporation Limited, of which we utilize approximately 325 KVA of power for our present business operations. In addition, to avoid any disruption in the power supply, our Company has already installed a DG set of 250 KVA capacity. Therefore, we envisage that our further requirement of power for our proposed modernization at our Haridwar facility can be easily met from the present supplies.

* Fuel

Our Company mainly requires HSD for operating the DG sets. The present monthly consumption of HSD is about 1000 litres. The HSD is being supplied by retail outlets of IOC, HPCL and BPCL.

* Water

Water is basically required for drinking and other domestic purpose. Our present requirement at our Haridwar unit is about 5000 litres per day. Our entire water requirement is met from our own borewell. The water supply is regular and sufficient to meet entire requirements. The proposed modernization at our Haridwar facility will require additional 2000 litres of water per day. There is no difficulty in obtaining this because of the presence of a number of borewell and the water level in the area being high due to proximity to nearby canal and a river, Ganga.

*Manpower

Our Company has adequate manpower at all levels at present and does not envisage any difficulty in getting the requisite personnel for our business operations at existing locations. Following are the details of our manpower:

Category Nos.

Top management 6

Managerial & Supervisory staff 62

Office staff 56

Skilled workers 65

Unskilled workers 435

Total 624

* Effluent Treatment and Disposal

Our Company does not generate any industrial effluents which is hazardous to the environment. The waste produced during the manufacturing operations is re-used or recycled.

* Environmental Clearance

We have got all the necessary approvals from the local authorities to operate our business.

* Our Strategy

Further research in process and product engineering to ensure the best manufacturing process for our products in order to enhance competitiveness in the markets is one of our goals. Research and development in electrical accessories and other allied products will better enable a competitive position in the market. Further enhancement of operations by improving the existing assets to yield better output and installation of new assets to enhance and attract new markets are also in the horizon.

* Capacity and capacity utilization

Particulars Projected

FY 2014-15 FY 2015-16

Wires & Cables

Installed Capacity 20 Lacs Bundles 20.00 Lacs Bundles

Capacity Utilization (in %) 80% 80%

Production 16.00 Lac Bundles 16.00 Lac Bundles

Electrical Accessories

Installed Capacity 380 Lac pieces 600 Lac pieces

Capacity Utilization(in %) 47.36% 54.17%

Production 180 Lac pieces 325 Lac pieces



Particulars Actual

FY 2014-15

Wires & Cables

Installed Capacity 14.08 Bundles

Capacity Utilization (in %) 81.88%

Production 13.36 Lac Bundles

Electrical Accessories

Installed Capacity 380 Lac pieces

Capacity Utilization(in %) 71.16%

Production 270.41 Lac pieces

* Insurance

Our Company has taken up a range of insurance policies including:

1. Fire policies for our units, buildings and offices, raw materials, work-in-progress and finished goods;

2. Marine policy for transit of raw materials and finished products in India and Marine Export policy;

3. Accidental & Health insurance facility for field staff;

4. Gratuity policy;

These insurance policies are reviewed annually to ensure that the coverage is adequate. All the policies are in existence and the premiums have been paid thereon.

Risks and Concerns:

1. Common Risks: Accidents in the work place, fires, tornadoes, and other natural disasters

2. Legal Risks: Fraud, Theft, etc

3. Uncertainties in financial markets

4. Failure in Projects

5. Credit Risks

6. Outstanding Debtors

7. Security and Storage of Data and Records

8. Competitors: Havells, Polycab, Wizard, Anchor, Bajaj Electricals

Internal Control System

* Company has formed the Risk Management Committee for the assessment and monitoring of the risks involved in the Company.

* Preparation and issue of financial reports to shareholders and the markets, including the Annual Report and consolidated financial statements, is overseen by the Audit Committee. The Company's financial reporting process is controlled using documented accounting policies and reporting formats, supplemented by detailed instructions and guidance on reporting requirements. The Company's processes support the integrity and quality of data, including appropriate segregation of duties. The financial information of the parent entity and all subsidiary entities, which form the basis for the preparation of the consolidated financial statements are subject to scrutiny by Group level senior management. The Company's financial reports, financial guidance, and Annual Report and consolidated financial statements are also reviewed by the Audit Committee of the Board in advance of being presented to the full Board for their review and approval;

* Detailed budgetary process which includes identifying risks and opportunities and which is ultimately approved at Board level;

* Board approved capital expenditure and Audit Committee approved treasury policies which clearly define authorization limits and procedures;

* An internal audit function which reviews key financial/business processes and controls, and which has full and unrestricted access to the Audit Committee;

* Established systems and procedures to identify control and report on key risks. Exposure to these risks is monitored by the Risk Management Committee; and

* A risk management programme in place throughout the Company whereby Risk Management executive reviews and monitors the controls in place, both financial and non financial, to manage the risks facing the business.

Awards and Recognition

Details of Subsidiaries/ Joint Venture/ Associate Companies

On 22nd November, 2014 Veto Electricals Private Limited becomes the Wholly Owned Subsidiary Company of the Company. Same has been disclosed in Annexure-I

A land is purchased by Veto Electricals Private Limited in Mahindra, SEZ. Company had already applied for letter of approval with the Development Commissioner SEZ, Noida. The case has already been approved by Unit Approval Committee (UAC) and company is planning to start construction work of building in Mahindra SEZ in Month of September, 2015 and expected to complete the Construction and erection of plant and machinery upto March, 2016. Hence commercial production will be start in the Month of April, 2016.

Performance and Financial position of Subsidiary Company

The details with respect to subsidiary Company as on March 31, 2015 have been discussed in Annexure II.

3. Human Resource Management

Employee Relations

VETO has over the years realized the importance of human capital and duly acknowledges it in its business operations. Your Company has managed to create "Lifers" at VETO- people who have been associated with your Company, many having started their earning life at VETO. It gives the much needed stability and satisfaction when we realize that our partners in success trust us to such an extent that they stand by us at all times.

Their experience, skills, knowledge, ideas and enthusiasm are an invaluable asset. We humbly acknowledge their contributions with competitive compensation and benefits that appropriately reward performance. Pay revisions and other benefits are designed in such a way to compensate good performance of the employees of the Company.

The talent pool of your Company has steadily evolved with changing times with fresh talent being infused to meet demanding situations. The Company has a scalable recruitment and human resource management process which enables us to attract and retain high caliber minds.

Inspired by its commitment to quality and core values of honesty and transparency, your Directors and employees look forward to the future with confidence and stand committed to creating an even brighter future for all stakeholders.

Managerial Remuneration

A) Information as per Rule 5(1) of Chapter XIII, Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014

The Nomination and Remuneration Committee continuously reviews the performance of the Managing Director, Whole Time Director and Other Directors.

Remuneration paid to Directors

Name of Director Title Remuneration in Remuneration year 2014-2015 in Year 2013-2014

Mr. Akshay Kumar Managing 1225000 - Gurnani Director (appointed on 27/08/2014)

Mr. Dinesh Gurnani Whole-time 720000 696000 Director

Ms. Jyoti Gurnani Director - -



Name of Director %increase in Remuneration in comparison to last year

Mr. Akshay Kumar 100% Gurnani

Mr. Dinesh Gurnani 3.45%

Ms. Jyoti Gurnani



Remuneration paid to Independent Directors

(In Lacs)

Name of Director Remuneration Remuneration in year in Year 2013 2014-2015 2014

Mr. Murlidhar Kaurani 0.00 0.075

Mr. Mohan Sukhani 0.00 0.15

Mr. Govind Ram Thawani 0.00 0.20

Remuneration paid to Key Managerial Personnel

(In Lacs)

Name of Key Title Remuneration Remuneration anagerial in year in Year Personnel 2014-2015 2013-2014

Mr. Priavrat Sharma Group CFO 0.00 0.00

Ms. Chavi Rawat Company 60,000 (w.e.f - Secretary 14/11/2014) cum Compliance Officer

Mr. Anuj Khator Sr. Accounts 20,128 (w.e.f - Officer 11/03/2015)

*Mr. Priavrat Sharma, Group CFO draws his salary from its Holding Company Veto Electropowers (India) Private Limited.

The Median Remuneration of Employees excluding Managing Director and Whole-time Director is Rs.1,80,600. No employee received remuneration in excess of the highest paid Director.

* Median Remuneration is calculated by excluding the employees who leaves during the year and the unskilled employees.

Particulars of Employees

Your Directors confirmed that no employee fall under the particulars of Section 192 (12) of the Companies Act, 2013 read with Rule 5 (1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

4. Corporate Governance

Corporate Governance Report

Corporate Governance refers to laws, regulations, and acceptable business practices that determine relationships between corporation owners and its managers, on one hand, and its investors, on the other hand. It was born and evolved in response to corporate failures, crises, and misdeeds. In many types of economies, corporate governance concentrates on at least four important factors: Ensuring disclosures of all relevant information to shareholders and creditors; including business risk analyses; Building a system of rules and voluntary practices that will guide the board of directors; Establishing independent audit committees composed of outside directors; Monitoring and controlling management. On the other hand, developing economies, like the Caribbean, focus on strengthening and improving the legal and regulatory systems that will help ensure better enforcement of contracts and protection of property rights.

Your Company is committed to achieving and maintaining high standards of Corporate Governance and places high emphasis on business ethics. Your Company has set up a Remuneration Committee under Annexure 1-D of SME Equity Listing Agreement, which was later reconstituted under the name 'Nomination and Remuneration Committee' pursuant to provisions of Section 174 of The Companies Act, 2013. The report on Corporate Governance as stipulated under Clause 49 of the Listing Agreement has been included in Annexure IV of this report

The Company has laid down a well-defined Code of Conduct, which fairly addresses the issues of integrity, conflict of interest and confidentiality and stresses the need of ethical conduct, which is the basis of good Governance. This code is applicable to all members of the Board and the Senior Management Personnel. The declaration regarding compliance with Veto Switchgears And Cables Limited-Code of Conduct and Ethics for all Board Members and Senior Management Personnel of the Company forms part of the Report on Corporate Governance.

Directors

A. Change in directors and KMP during the year

There were certain appointments in capacity of directors as managing director and independent director. The current Managing Director of the Company w.e.f. August 27, 2014 is Mr. Akshay Kumar Gurnani, s/o Mr. Vishnu Kumar Gurnani. In order to comply with the provisions of Section 149 (1) and Section 149(10), Ms. Jyoti Gurnani, D/o Mr. Vishnu Kumar Gurnani has been appointed as a women Director of the Company in the Last AGM. The detail has been given below:

Sr. Name Of Director Designation Date of No. Appointment

1 Mr. Dinesh Gurnani Whole-Time Director and 22/08/2012 CFO

2 Mr. Murali dhar Kaurani Non-executive 31/08/2012 Independent Director

3 Mr. Mohan Sukhani Non-executive 31/08/2012 Independent Director

4 Mr. Govind Ram Thawani Non-executive 31/08/2012 Independent Director

5 Ms. Jyoti Gurnani Director 27/08/2014

6 Mr. Akshay Kumar Gurnani Executive Managing 27/08/2014 Director and CEO



Sr. Name Of Director Date of No. Cessation

1 Mr. Dinesh Gurnani NA

2 Mr. Murali dhar Kaurani NA

3 Mr. Mohan Sukhani NA

4 Mr. Govind Ram Thawani NA

5 Ms. Jyoti Gurnani NA

6 Mr. Akshay Kumar Gurnani NA

Ms. Divya Singh, Company Secretary cum Compliance Officer of the Company had resigned on 14th November, 2014 in place of her Ms. Chavi Rawat was appointed as Company Secretary cum Compliance Officer of the Company.

B. Declaration by an Independent Director(s) and re-appointment, if any

The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as per prescribed both under the Act and Clause 49 of the Listing Agreement with the Stock Exchange.

No. of meetings of the Board

Seven (7) Board meeting were held during the year 2014-2015 and the gap between two meetings did not exceed four months. The dates on which the Board Meeting was held are as follows:

Detail of Board Meetings held:

Sr. No. Date of Board Meeting

1 May 30, 2014

2 July 28, 2014

3 November 14, 2014

4 January 24, 2015

5 February 2,2015

6 February 10, 2015

7 March 30, 2015

Committees of Board

Name of Committee Composition of Committee

Audit Committee 1. Mr.Govind Ram Thawani Chairman

2. Mr. Mohan Sukhani

3. Mr. Dinesh Gurnani

Nomination and Remuneration 1. Mr.Govind Ram Thawani Committee Chairman

2. Mr. Murlidhar Kaurani

3. Mr. Mohan Sukhani

Shareholders'/lnvestors' 1. Mr.Govind Ram Thawani Grievance Committee Chairman

2. Mr. Dinesh Gurnani

3. Mr. Mohan Sukhani

Corporate Social 1. Mr.Govind Ram Thawani, Responsibility Committee Chairman

2. Mr. Mohan Sukhani

3. Mr. Dinesh Gurnani

Risk Management Policy 1. Mr. Dinesh Gurnani

2. Mr. Mohan Sukhani

3. Mr. Govind Ram Thawani

Internal Complaint Committee 1. Ms. Jyoti Gurnani, Officer

2. Mr. Priavrat Sharma, Member

3. Ms. Bharti Ajmera, Member

4. Mr. Anirudh Mathur, Member



Name of Committee Duties, Responsibilities and activities

Audit Committee Disclose under the heading Corporate Governance Report

Nomination and Remuneration Disclose under the heading Committee Corporate Governance Report

Shareholders'/lnvestors' Disclose under the heading Grievance Committee Corporate Governance Report

Corporate Social Disclose under the heading Responsibility Committee Corporate Governance Report

Risk Management Policy Disclose under the heading Corporate Governance Report

Internal Complaint Committee Presiding Discloses under the Director Report

Directors Responsibility Statement

Pursuant to the requirements under Section 134 (5) of the Companies Act, 2013 with respect to the

Directors' Responsibility Statement, it is hereby confirmed that:

i. in the preparation of the annual accounts for financial year ended March 31, 2015, the applicable Accounting Standards had been followed along with proper explanation relating to material departures;

ii. the Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2015 and of the profit of the Company for the year under review;

iii. the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

iv. the Directors had prepared the annual accounts for financial year ended March 31, 2015 on a 'going concern' basis.

v. the Directors had laid down the internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operate effectively.

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

Corporate Governance Certificate

The Company is promptly submitting a "half yearly Compliance Report on Corporate Governance" as per Clause 52 of the SME Listing Agreement with the Stock Exchanges.

Now as the Company is migrated on the Main Board of NSE the Company will submit the "quarterly Compliance Report on Corporate Governance" as per Clause 49 of the Listing Agreement.

The certificate from the Practicing Company secretary, Ms. Nisha Agarwal, C.P. No. 8584, confirming the compliance with the condition of Corporate Governance as stipulated under Clause 49 is reproduced in an Annexure IX in the report.

5. Auditors and Auditor's Report

- SGCO&Co., (Membership No. 44739) Chartered Accountants Statutory Auditors of the Company holds office until the conclusion of the ensuing Annual General Meeting and is eligible for re-appointment. It is proposed to re-appoint them as Statutory Auditors of the Company for the financial year 2015-16.

The Company has received a letter from Statutory Auditors to the effect that their re-appointment, if made would have be within the prescribed limits under Section 139 of the Companies Act, 2013 and that they are not disqualifies for reappointment within the meaning of Section 141 of the said Act.

Our comments on financial statements referred to in the Auditor's Reports under Section 145 of the Companies Act, 2013 are given below:

a) With regard to the Emphasis of Matter appearing in the Auditor's Report, your attention is drawn to the notes forming part of financial statements of the year which are self explanatory.

b) With respect to the comments of the Auditors in their report on the Consolidated Audit Report, our responses are given in the Notes to the Financial Statements, which is self-explanatory.

Cost Auditors

Pursuant to the provisions of Section 148 of The Companies Act, 2013 M/s Rajesh & Company, Cost Accountants, Jaipur were appointed as Cost Auditors of the Company for conducting cost audit for the financial year 2015-2016.

As per amendment on 31.12.14 in Companies (Cost Record & Audit) Rules, 2014 Central Govt notified exemption for applicability of cost audit on the Company covered in serial no 12 and 24 to 32. This is applicable from 1st April 2015. Our Company covered in serial no 32.

Secretarial Audit Report

The Board has appointed Ms. Nisha Agarwal Practicing Company Secretary, to conduct Secretarial Audit for the Financial Year 2014-15. The Secretarial Audit Report for the Financial Year ended March 31, 2015 is annexed herewith marked as Annexure VII to this Report. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.

Reservation and Qualification on Auditor Report

Basis for Qualified Opinion

1. During the year the Company has recognized insurance claim on account of fire amounting to Rs.1, 669.03 lacs which is still not approved by the Insurance Company. Since at present there is no certainty of collection, in our view recognition of the same is not in compliance with Accounting Standard (AS-9) relating to "Revenue Recognition". Had the same not been recognized the loss for the year would have been Rs. 693.47 lacs as against the reported "Profit for the year" of Rs. 975.56 la nd "otherr Current Assets" would have been lower by Rs. 1669.03 lacs and having a consequential impact on the Reserves and surplus. (Refer Note :40)

Qualified Opinion

In our opinion and to the best of our information and according to the explanations given to us, except for the effects of the matter described in the Basis for Qualified Opinion paragraph above, the aforesaid standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31st March,2015, its profit and its cash flows for the year ended on that date.

Management Reply towards Qualification:

Company is regularly in touch with surveyor appointed by Insurance Company & Insurance Company itself. Insurance Company is already disposed off the Scrap material from our godown in auction of Rs. 2.00 Crores. Hence claim is receivable.

As per our information the surveyor has not submitted the final report to the Insurance Company. Hence we are not able to provide any final report for this purpose. However, Insurance Company also considers provision of this claim in their balance sheet.

Details of significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and Company's operations in future

There are no significant and material orders that are passed by the regulators or courts or tribunal impacting the going concern status and Company's operations in future.

Extract of Annual Return

The details with respect to extract of Annual Return have been discussed in Annexure VI.

Details in respect of adequacy of internal financial controls with reference' to the financial statements

The Company has in place adequate internal financial controls with reference to financial statements. During the year, such controls were tested and no reportable material weakness is observed.

6. Depository System

Our Company's Equity Shares are available in dematerialized form through The National Stock Exchange of India Limited (NSDL) and The Central Depository Services of India (India) Limited (CDSL). As per the Securities and Exchange Board of India (SEBI) Circular No. : Cir/ISD/3/2011 dated June 17, 2011 on "trading rules and shareholding in dematerialized mode", all Listed Companies have to achieve 100% of their promoters and promoter group's holding in dematerialized form latest by quarter ended September 2011. Accordingly, all shares post IPO, of the Company is held in demat form.

7. Report under the Prevention of Sexual Harassment Act

There were no complaints reported under the Prevention of Sexual harassment of Women at workplace (Prevention, Prohibition & Redressal) Act, 2013.

8. Conservation of energy, technology absorption and foreign earning and outgo

i. Environment, Health and Safety

VETO is committed to caring for people and the planet by integrating environmental and safety principles in all aspects of its business are it from procurement, material-use, manufacturing of sustainable products, creating awareness through marketing, and innovation/R&D for better products and processes. We constantly monitor and better our environmental and occupational health and safety performance through our internal risk management exercise. At the compliance level, your Company conforms to all applicable regulatory Environmental Health & Safety (EHS) requirements wherever it operates.

Our Company is sensitive to environmental and resource conservation and its manufacturing philosophies ensure safety of the worker and surroundings. Being in a non-polluting category of business, it has minimal impact on the environment but has a huge positive impact on the local community. RoHS or 'Restriction of Hazardous Substances' compliance in all its products like CFLs, cables, PCBs, etc. ensures safety across the product life cycle. Our Company strongly believes and promotes energy conservation not only through its products but also within the premises. Energy conservation measures have been adopted at all the plants.

Our Company follows best practices for health and safety. Employees and workers are regularly trained by industry experts on issues of occupational and industrial health & safety, first-aid and environment management. Healthy lifestyle and well-being are also promoted as a culture at VETO. Our Company also provides life insurance cover, personal accident cover and robust medical & health policies to all field staff against any unfortunate incident. VETO India strongly believes in maintaining a work-life balance and therefore follows strict in-and-out work-timings. This has gone a long way in maintaining a healthy, happy and motivated workforce.

ii. Research & Development

To develop our product pipeline, we commit substantial time, efforts, funds and other resources for R&D. Our processes and products currently under development, if and when fully developed and tested, may not perform as we expect and we may not be able to successfully and profitably produce and utilize such products or processes. Therefore, our investments in R&D and new product launches could result in higher costs without a proportionate increase in revenues.

iii. Detail of Foreign Exchange Earnings and Outgo.

In this financial year Company exported electrical accessories and goods amounting USD 1231247.62 and imported electrical accessories amounting USD 480185.10. Hence net foreign exchange inflow is USD 751062.52.

9. Credit Rating

Our Company has been assigned long-term rating of BBB (pronounced ICRA triple B plus) by ICRA Limited.

Acknowledgement

We thank our customers, vendors, investors and bankers for their intense support throughout the year. We place on record our appreciation of the contribution made by our employees at all levels. We thank the Government of India, particularly the Ministry of Commerce, Ministry of Finance, Ministry of Corporate Affairs, the Custom and Excise Departments, Income Tax Department, the Reserve Bank of India, the State Governments and other government agencies for their support, and look forward to their continued support in the future.

Date: 23/07/2015 for and on behalf of the Board Place: Jaipur

Akshay Kumar Gurnani Dinesh Gurnani Director Director (06888193) (00218635)


Mar 31, 2014

Dear Shareowners,

The period under review was challenging yet full of opportunities as there was unstability in macro economic environment. In spite of all odds, our Company recorded significant growth and robust performance at all levels. The growth oriented performance is grossly attributable to Company''s customer-centric approach and its ability to innovate customer specific solutions, focus on pricing and aggressive marketing strategy, disciplined project executions, focused management approach, prudent financial and human resources management and ensuring better control over cost.

Your Director''s have great pleasure in presenting you the 7th Annual Report of the Company together with the Audited Accounts for the financial period from April 1,2013 to March 31,2014.

1. Financial Results [Rs. in Lacs]

Particulars Consolidated Standalone 2013- 2012- 2013- 2012- 2014 2013 2014 2013

Income from 9447.72 7413.99 9447.72 7413.99 operation

Profit before Interest/ 1168.34 1113.48 1168.53 1113.37 Depreciation/Tax CPBDIT)_

Less: Interest & 204.73 245.17 204.73 245.17 Financial Charges

Less: Depreciation 120.13 106.48 120.13 106.48

Profit Before Tax 843.48 761.83 843.67 761.72 CPBT)

Less: Provision for 234.66 174.09 234.66 174.09 Taxation

-Current - -

-Deferred - -

Profit after Taxation 608.82 587.74 609.01 587.63 (PAT)

Balance Carried 608.82 587.74 609.01 587.63 Forward

Consolidated Financial Results for the year ending 2013 and 2014 :-

During the year under review on consolidated basis our Company earned an income of Rs. 843.48 Lacs against Rs. 761.83 Lacs in the previous year. The Company earned profit after tax of Rs.608.82 Lacs as compare to Rs. 587.74 Lacs in the previous year. The Company had Income from operation of Rs. 9447.72 Lacs as compared to Rs. 7413.99 Lacs in previous year. The Profit before Interest/ Depreciation / Tax (PBIT) was Rs. 1168.34 Lacs as compared to Rs. 1113.48 Lacs in previous year.

Standalone Financial Results for the year ending 2013and2014:-

During the year under review on standalone basis our Company earned an income of Rs. 843.67 Lacs against Rs. 761.72 Lacs in the previous year. The Company earned profit after tax of Rs. 609.01 Lacs as compare to Rs. 587.63 Lacs in the previous year. The Company had Income from operation of Rs. 9447.72 Lacs as compared to Rs. 7413.99 Lacs in previous year. The Profit before Interest/Depreciation/Tax [PBIT] was Rs. 1168.53 Lacs as compared to Rs. 1113.3 7 Lacs in previous year. Keeping pace with growth trajectory and its efforts to improve efficiency, productivity and profitability the management seeks the trust of shareholders in future growth of the Company and enhancement of shareholders wealth.

2. Dividend

The Board of Directors has decided not to recommend any dividend for the year ended on 31st March, 2014.

3. Business Operations

Our Company is an ISO 9001:2008 certified company, engaged in the manufacture and sale of wires & cables and electrical accessories in India. The product portfolio ranges from industrial cables, stand cables to telephone & co-axial wires, from general switches to modular switches, from ceiling fans to rechargeable fans, compact fluorescent lamps, LED bulbs and other electrical accessories. Our Company supply these products under the brands "VETO" and "VIMAL POWER" through large network of dealers to the customers in India as well as selected customers abroad.

i. Raw Material

Our Company''s present and proposed consumption of Raw material is as under:

(Qty.inkg) Product Existing Proposed category

Copper 500617 600740.40

PVC Resin 493095 591714.00

Aluminium 62027 74432.40

ii. Infrastructure facilities - Power

Presently, we have 400 KVA of power supply sanctioned by Uttarakhand Power Corporation Limited, of which we utilize approximately 325 KVA of power for our present business operations. In addition, to avoid any disruption in the power supply our Company has already installed a DG set of 250 KVA capacity. Therefore, we envisage that our further requirement of power for our proposed modernization at our Hardwar facility can be easily met from the present supplies.

- Fuel

Our Company mainly requires HSD for operating the DG sets. The present monthly consumption of HSD is about 1000 litres. The HSD is being supplied by retail outlets of IOC,HPCLandBPCL.

- Water

Water is basically required for drinking and other domestic purpose. Our present requirement at our Haridwar unit is about 5000 litres per day. Our entire water requirement is met from our own borewell. The water supply is regular and sufficient to meet entire requirements. The proposed modernization at our Haridwar facility will require additional 2000 litres of water per day. There is no difficulty in obtaining this because of the presence of a number of borewell and the water level in the area being high due to proximity to nearby canal and a river, Ganga.

- Manpower

Our Company has adequate manpower at all levels at present and does not envisage any difficulty in getting the requisite personnel for our business operations at existing locations. Following are the details of our manpower:

Category Nos.

Top management 6

Managerial & Supervisory staff 60

Office staff 55

Skilled workers 60

Unskilled workers 340

Total 521

- Effluent Treatment and Disposal

Our Company does not generate any industrial effluents which is hazardous to the environment. The waste produced during the manufacturing operations is re- used or recycled.

- Environmental Clearance

We have got all the necessary approvals from the local authorities to operate our business.

- Our Strategy

Further research in process and product engineering to ensure the best manufacturing process for our products in order to enhance competitiveness in the markets is one of our goals. Research and development in electrical accessories and other allied products will better enable a competitive position in the market. Further enhancement of operations by improving the existing assets to yield better output and installation of new assets to enhance and attract new markets are also in the horizon.

- Capacity and capacity utilization

Particulars Projected Actual FY 2013- FY 2014- FY 2013- 2014 2015 2014

Wires & Cables

Installed Capacity 14.08 14.08Bun 14.08 Bundles dies Bundles

Capacity 42.61% 42.61% 39.13% Utilization (in %)

Production 6.00 Lac 6.00 Lac 5.51 Lac Bundles Bundles Bundles

Electrical Accessories

Installed Capacity 380 Lac 380 Lac 380 Lac pieces pieces pieces

Capacity 36.84% 47.36% 38.64% Utilization (in %)

Production 140 Lac 180 Lac 146.83 pieces pieces Lac pieces

- Insurance

Our Company has taken up a range of insurance policies including:

1. Fire policies for our units, buildings and offices, raw materials, work-in-progress and finished goods;

2. Marine policy for transit of raw materials and finished products in India and Marine Export policy;

3. Accidental & Health insurance facility for field staff;

4. Gratuity policy;

These insurance policies are reviewed annually to ensure that the coverage is adequate. All the policies are in existence and the premiums have been paid thereon.

4. IPO proceeds and Deployment of funds

Our Company has successfully come up with an IPO on December 13,2012 and listed on EMERGE in NSE. The issue size was Rs. 25,00,50,000/- (Twenty Five Crores Fifty Thousand only] consisting of 50,01,000 (Fifty Lakh One Thousand only) Equity Shares offered at Rs. 50/- (Face value of shares Rs. 10/- per share and premium of Rs. 40/- per share). The issue open and close date were December 3, 2012 and December 5,2012 respectively. The detail of proceeds of IPO is as under:

SI. Particulars Amount No. (Rs. in Lacs)

A Proceeds of Issue 2500.50

B Internal Accruals 49.50

As per RHP, the Proceeds of Issue were Rs. 2500 Lacs and Internal Accruals were Rs. 50 Lacs. However, due to lot size of 3000 Equity shares, IPO proceeds came to Rs. 2500.50 Lacs and therefore internal accruals get reduced by Rs. 0.50 Lacs.

The project covers Modernisation of existing facility at Haridwar amounting Rs. 470 Lacs, Working capital requirement amounting Rs. 1580 Lacs, Enhancement of our Company''s brand through advertising and other Brand Building activities amounting Rs. 200 Lacs, General Corporate purposes amounting Rs. 100 Lacs and to meet the issue expenses amounting Rs. 200 Lacs.

SI. Particulars Amount No. (Rs. in Lacs)

1 Modernisation of existing 470.00 facility at Haridwar

2 Working capital requirement 1580.00

3 Enhancement of our Company''s 200.00 brand through advertising and other Brand Building activities

4 General Corporate purposes 100.00

5 To meet the issue expenses 200.00

Total 2550.00

As required under clause 52 (IV) (D) of SME Equity Listing Agreement, the utilization of IPO proceeds are being reported on half-yearly basis published by the Company after the same is reviewed by the Audit Committee.

The detailed description with respect to deployment of funds and explanation as per Clause 45 (c) ofSME Listing Agreement is given hereunder:

1. Status of implementation of project/ commencement of commercial production

(i) As disclosed in the offer document

Sr. Activity Date/Month of Date/Month No Commencement of Completion

1 Land Completed

2 Factory building & October 2012 January 2013 civil work (modernization)

3 Dies October 2012 June 2013

4 Plant & Machinery & October 2012 December other service utilities 2012

(ii) Actual Implementation AUGUST 2013 TO MARCH 2014 (iii) Reasons for delay in implementation, if any DELAY IN

ARCHITECTURAL PLAN

2. Status of utilization of issue proceeds (i) As disclosed in the offer document -

The total cost of the project is estimated at Rs. 2550.00 lacs brief details of which are as follows:

(Rs. in Lacs) Sr. Details Amount No

1 Modernisation of existing facility at Haridwar, Uttarakhand 470.00

2 Incremental long-term working capital requirement 1,580.00

3 Enhancement of our Company''s brand through advertising and other brand building activities 200.00

4 General Corporate Purposes 100 Q0

To meet the Issue expenses 200.00

Total Project Cost 2,550.00

Means of Finance

Particulars Amount Amount (In lacs) (In lacs)

Proceeds of the Issue 2,500.50

Internal accruals 49.50

Total means of finance 2,550.00

(ii) Actual Utilisation - (Rs. in lacs)

Sr. Particulars Total Actual Cost no. of entire project

1 Modernisation of existing facility 365.34 470.00 at Haridwar, Uttarakhand._

2 Incremental long-term working 1580.00 1580.00 capital requirement

3 Enhancement of our Company''s 60.51 200.00 brand through advertising and other brand building activities_

4 General Corporate Purposes 100.00 100.00

5 To meet the Issue expenses 200.00 200.00

TOTAL 2305.85 2550.00

The details of amount utilized out of the IPO proceeds in the project upto March 31,2014 is as stated below:

(Rs. in lacs) Particulars Amount utilized till March 31, 2014

Proceeds from IPO 2500.50

Less:_

Issue related expenses 200.00

Utilised towards objects of issue 2105.85

Pending utilization towards objects of issue* 194.65

The pending amount of Rs. 194.65 Lacs for utilization towards object of issue is kept in form of FDR with Indian Overseas Bank, Jaipur.

(iii) Reasons for deviation, if any NIL

The utilization under modernization of Building & other civil work was amounting Rs. 100.00 Lacs. This utilization was supposed to be completed till January 2013, but it could not be started on time due to delay in finalization of architectural plans of elevation of factory building till April 2013 and then arrival of monsoon has hampered the modernization as per scheduled plan. Since the production is not at all affected due to the mentioned delay, the Company has decided to work on this plan from the month of September 2013 that is after the end of monsoon.

5. Depository System

Our Company''s Equity Shares are available in dematerialized form through The National Stock Exchange of India Limited (NSDL) and The Central Depository Services of India (India) Limited (CDSL). As per the Securities and Exchange Board of India (SEBI) Circular No.: Cir/ISD/3/2011 dated June 17, 2011 on "trading rules and shareholding in dematerialized mode", all Listed Companies have to achieve 100% of their promoters and promoter group''s holding in dematerialized form latest by quarter ended September 2011. Accordingly, all shares post IPO, of the Company are held in demat form.

6. Awards and Recognition

Our Company''s Group CFO Mr. P V Sharma has been awarded ''Super Quality Crown of Industrial Excellence Award'' by All India Economy Survey Award Council on August 25,2013 in New Delhi.

Mr. Vishnu Kumar Gurnani, former Managing Director of the Company has been awarded ''Indira Gandhi Sewa Chakra Award'' by All India Economy Survey Award Council'' on August 25, 2013 in New Delhi.

7. Change in directorship during the year

There were certain proposed appointments in capacity of directors as managing director and independent director. The current Managing Director of the Company has also resigned from the Company w.e.f. May 19,2014. In place of Mr. Vishnu Kumar Gurnani, the Board of Directors has proposed the name of Mr. Akshay Kumar Gurnani, s/o Mr. Vishnu Kumar Gurnani. The appointment shall subject to approval of shareholders in the Annual General Meeting. In order to comply with the provisions of Section 149 (10) and Section 149(1), the Independent directors of the Company shall required to be appointed on the Board for a term of five consecutive years by passing a special resolution and name of Ms. Jyoti Gurnani, D/o Mr. Vishnu Kumar Gurnani has been proposed for directorship of the Company. The detail has been given below:

Sr. Name Of Designation Date of Date of No. Director Appointment Cessation

1 Mr. Vishnu Kumar Executive 01/05/2012 19/05/2014 Gurnani Managing Director

2 Mr. Murali dhar Non-executive 31/08/2012 NA Kaurani Independent Director

3 Mr. Mohan Non-executive 31/08/2012 NA Sukhani Independent Director

4 Mr. Govind Ram Non-executive 31/08/2012 NA Thavani Independent Director

5 Mr. Jyoti Gurnani Director Proposed NA Subject to approval by shareholders]

6 Mr. Akshay Kumar Executive Proposed NA Gurnani Managing (Subject to Director approval by shareholders]

8. Auditors and Auditor''s Report

M/s Singordia Goyal & Co., (Membership No. 44739) Chartered Accountants Statutory Auditors of the Company hold office until the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment. It is proposed to re-appoint them as Statutory Auditors of the Company for the financial year 2014-15.

The Company has received a letter from Statutory Auditors to the effect that their re- appointment, if made would have be within the prescribed limits under Section 139 of the Companies Act, 2013 and that they are not disqualifies for reappointment within the meaning of Section 141 of the said Act.

Our comments on financial statements

reffered to in the Auditor''s Reports under Section 145 of the Companies Act, 2013 are given below:

a) With regard to the Emphasis of Matter appearing in the Auditor''s Report, your attention is drawn to the notes forming part of financial statements of the year which are self explanatory.

b) With respect to the comments of the Auditors in their report on the Consolidated Audit Report, our responses are given in the Notes to the Financial Statements, which is self-explanatory.

9. CostAudit

Pursuantto the provisions of Section 148 of The Companies Act, 2013 M/s Rajesh & Company, Cost Accountants, Jaipur were appointed as Cost Auditors of the Company for conducting costauditfor the financial year 2014-2015.

10. Subsidiary Company

Veto Electricals Private Limited is the only subsidiary Company during the year under review.

The details with respect to subsidiary Company as on March 31,2014 has been discussed in Annexure I.

11. Accident

Post to end of Financial Year 2013-14, on May 19, 2014 at 5:00 P.M., one of our senior officer got a call from godown situated at E-2, Malviya Nagar Industrial Area, Jaipur informing about a severe fire accident. All our senior officials reached the venue immediately. The fire brigade and police control room were already informed, the moment as fire was noticed.

It was believed and later confirmed that the accident took place due to short circuit in wire at first floor of godown. The total loss caused by fire was Rs. 18 Crores. However, the godown was fully insured by Rs. 27 Crores from United India Insurance Limited.

Due to the vigilant approach of our senior staff at godown, there were no casualties.

12. Deposits

The Company has not accepted any deposits from the public.

13. Investments

Our Company has total fixed deposit of Rs. 7.61 Crores including accrued interest with Indian

Overseas Bank, M.I. road branch, Jaipur.

14. Information under section 217 (1) (e) of the Companies Act, 1956

Information under section 217 (1) (e) of the Companies Act, 1956 read with the Companies (Disclosure of particulars in the Report of Board of Directors) Rules, 1988 are:

i. Environment, Health and Safety

VETO is committed to caring for people and the planet by integrating environmental and safety principles in all aspects of its business be it from procurement, material-use, manufacturing of sustainable products, creating awareness through marketing, and innovation/R&D for better products and processes. We constantly monitor and better our environmental and occupational health and safety performance through our internal risk management exercise. At the compliance level, your Company conforms to all applicable regulatory Environmental Health & Safety (EHS) requirements wherever it operates.

Our Company is sensitive to environmental and resource conservation and its manufacturing philosophies ensure safety of the worker and surroundings. Being in a non-polluting category of business, it has minimal impact on the environment but has a huge positive impact on the local community. RoHS or ''Restriction of Hazardous Substances'' compliance in all its products like CFLs, cables, PCBs, etc. ensures safety across the product life cycle. Our Company strongly believes and promotes energy conservation not only through its products but also within the premises. Energy conservation measures have been adopted at all the plants.

Our Company follows best practices for health and safety. Employees and workers are regularly trained by industry experts on issues of occupational and industrial health & safety, first-aid and environment management. Healthy lifestyle and well-being are also promoted as a culture at VETO. Our Company also provides life insurance cover, personal accident cover and robust medical & health policies to all field staff against any unfortunate incident. VETO India

strongly believes in maintaining a work-life balance and therefore follows strict in-and-out work- timings. This has gone a long way in maintaining a healthy, happy and motivated workforce.

ii. Research & Development

To develop our product pipeline, we commit substantial time, efforts, funds and other resources for R&D. Our processes and products currently under development, if and when fully developed and tested, may not perform as we expect and we may not be able to successfully and profitably produce and utilize such products or processes. Therefore, our investments in R&D and new product launches could result in higher costs without a proportionate increase in revenues.

iii. Detail of Foreign Exchange Earnings and Outgo. In this financial year Company exported electrical accessories and goods amounting USD 762378.60 and imported electrical accessories amounting USD 263736.73. Hence net foreign exchange inflowis USD 498641.87.

iv. Employee Relations

VETO has over the years realized the importance of human capital and duly acknowledges it in its business operations. Your Company has managed to create "Lifers" at VETO- people who have been associated with your Company, many having started their earning life at VETO. It gives the much needed stability and satisfaction when we realize that our partners in success trust us to such an extent that they stand by us at all times.

Their experience, skills, knowledge, ideas and enthusiasm are an invaluable asset. We humbly acknowledge their contributions with competitive compensation and benefits that appropriately reward performance. Pay revisions and other benefits are designed in such a way to compensate good performance of the employees of the Company.

The talent pool of your Company has steadily evolved with changing times with fresh talent being infused to meet demanding situations. The Company has scalable recruitment and human resource management process which enables us to ] attract and retain high caliber minds. Inspired by its commitment to quality and core values of honesty and transparency, your Directors and employees look forward to the future with confidence and stand committed to creating an even brighter future for all stakeholders.

15. Particulars of Employees under Section 217 (2A)

The particulars of Section 217 (2A), which was introduced by the Companies (Amendment) Act, 2000 your Director''s confirm that there were no employees who would fall under this category.

16. Credit Rating

Our Company has been assigned long-term rating of BBB (pronounced ICRA triple B plus) by ICRA Limited.

II. Corporate Governance Report

Corporate Governance refers to laws, regulations, and acceptable business practices that determine relationships between corporation owners and its managers, on one hand, and its investors, on the other hand. It was born and evolved in response to corporate failures, crises, and misdeeds. In many types of economies, corporate governance concentrates on at least four important factors: Ensuring disclosures of all relevant information to shareholders and creditors; including business risk analyses; Building a system of rules and voluntary practices that will guide the board of directors; Establishing independent audit committees composed of outside directors; Monitoring and controlling management. On the other hand, developing economies, like the Caribbean, focus on strengthening and improving the legal and regulatory systems that will help ensure better enforcement of contracts and protection of property rights.

Your Company is committed to achieving and maintaining high standards of Corporate Governance and places high emphasis on business ethics. Your Company has set up a Remuneration Committee under Annexure 1-D of SME Equity Listing Agreement, which was later reconstituted under the name ''Nomination and Remuneration Committee'' pursuant to provisions of Section 174 of The Companies Act, 2013. The report on Corporate Governance as stipulated under Clause 52 of the SME Equity Listing Agreement has been included in Annexure II of this report.

The Company has laid down a well-defined Code of Conduct, which fairly addresses the issues of integrity, conflict of interest and confidentiality and stresses the need of ethical conduct, which is the basis of good Governance. This code is applicable to all members of the Board and the Senior Management Personnel. The declaration regarding compliance with Veto Switchgears And Cables Limited-Code of Conduct and Ethics for all Board Members and Senior Management Personnel of the Company forms part of the Report on Corporate Governance.

The Company is promptly submitting a "Half- yearly Compliance Report on Corporate Governance" as per Clause 52 of the Listing Agreement with the Stock Exchanges.

The certificate from the Practising Company secretary, Ms. Nisha Agarwal, C.P. No. 8584, confirming the compliance with the condition of Corporate Governance as stipulated under Clause 52 is reproduced in a separate section elsewhere in the report.

IV. Director''s Responsibility Statement

Pursuant to the requirements under Section

217(2AA) of the Companies Act, 1956 with respect to the Directors'' Responsibility Statement, it is hereby confirmed that:

i. in the preparation of the annual accounts

for financial year ended March 31, 2014, the applicable Accounting Standards had been followed along with proper explanation relating to material departures;

ii. the Directors had selected such accounting

policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31,

2014 and of the profit of the Company for the year under review;

hi. the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud & other irregularities; and

iv. the Directors had prepared the annual accounts for financial year ended March 31, 2014 on a ''going concern'' basis.

Annexure I

Subsidiary Company

1. Veto Electricals Private Limited

Veto Electricals Private Limited ("VEPL") was incorporated on March 24,2008 vide Certificate of Incorporation issued by the Registrar of Companies, Rajasthan, at Jaipur. The CIN of VEPL is U31300RJ2008PTC12189.

The main objects of VEPL are to carry on in India or elsewhere all or any of the business of general merchants, manufacturers, buyers, seller, importers, exporters, traders, procurers, retailers, distributors, franchises and collaborators in all kinds and every description of wires, cables, electrical fans and accessories, PVC wires, copper conductors, aluminium conductors or other conductors made of any of the substance, electrical lamps including vacuum and gas filled lamps, general lighting lamps, luminaries and accessories etc. and other appliances, cables, wire lines and all types of machinery, plant or apparatus and things required for or capable of being used in connection with the manufacture of the above and business related commercial activities and services, merchandise, electrical and electronic goods at outright commission basis or through departmental stores, super markets, chain stores of electrical and electronic items.

Registered Office

The registered office of VEPL is located at 230, Sindhi Colony, Raja Park, Jaipur, Rajashtan 302 004 India.

Capital Structure and Shareholding Pattern

The authorized share capital of VEPL is '' 1,000,000 divided into 100,000 equity shares of'' 10/- each. The issued, subscribed and paid- up share capital is N 1,000,000 divided into 100,000 equity shares of Rs. 10/- each.

The shareholding of Veto Switchgears And Cables Limited is of 90% i.e. 90,000 equity shares.

Disclosure as per the provisions of Section 212 of Companies Act, 1956.

For the year ended March 31,2 014.

Particulars As on March As on March 31, 2014 31, 2013

Capital 10,00,000 10,00,000

Reserves O O

Total Assets 18013146 18012800

Total Liabilities 17013146 17012800

Investments O O

Turnover/Total Income 3 O

Profit/f Loss! before Tax O O

Provision for Tax O O

Profit/Loss after tax O O

Proposed Dividend O O

For and on behalf of the Board

Mohan Das Gurnani Dinesh Gurnani

Director Director

01831741 00218635

Date : 04.08.2014

Place: Mumbai.

 
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