Directors Report of Vindhya Telelinks Ltd.
Mar 31, 2018
Directorsâ Report
TO THE SHAREHOLDERS
The Directors have the pleasure of presenting their Thirty Fifth Annual Report, together with the Audited Financial Statements of the Company for the year ended March 31, 2018.
SUMMARY OF FINANCIAL RESULTS & STATE OF COMPANYâS AFFAIRS
|
Description |
Amount (Rs, in lakhs) |
|
|
2017-18 |
2016-17 |
|
|
Revenue from Operations |
135138.46 |
102654.84 |
|
Other Income |
1073.50 |
1835.41 |
|
Earnings before Finance Costs, Depreciation and Tax |
18811.43 |
14699.58 |
|
Finance Costs |
4719.93 |
4074.28 |
|
Profit before Depreciation and Tax |
14091.50 |
10625.30 |
|
Depreciation and Amortisation |
1490.80 |
1266.41 |
|
Profit before Tax |
12600.70 |
9358.89 |
|
Tax Expenses / (Credit) |
4267.63 |
2795.02 |
|
Net Profit for the year |
8333.07 |
6563.87 |
Your Company has adopted Indian Accounting Standards (Ind AS) with effect from April 1, 2017 (transition date being April 1, 2016). Accordingly, the financial statements for the year ended March 31, 2018 have been prepared in accordance with Ind AS in terms of the provisions of Section 133 of the Companies Act, 2013 read with the Companies (Indian Accounting Standards) Rules, 2015, as amended from time to time. Previous year figures have been restated as per Ind AS to make them comparable.
GENERAL & CORPORATE MATTERS
Your Company continues to operate in two business segments i.e. Cables and Engineering Procurement and Construction (EPC). The detailed operational working of your Company for the year is provided in the Management Discussion and Analysis forming a part of this Report.
During the year under review, your Company achieved Gross Revenue from operations of Rs, 135138.46 lakhs as compared to Rs, 102654.84 lakhs in the previous year, registering a growth of about 31.64%. The revenue from exports including project exports increased substantially to Rs, 3617.37 lakhs as compared to Rs, 1841.45 lakhs during the previous year. During the year under review, the EPC business segment clocked increase in Gross Revenue by 26.61 % mainly due to robust order inflow and strong project execution capabilities through improved monitoring systems and cost control initiatives. The Cables business segment has also registered a significant growth of 44.99% in Gross Revenue in comparison with the previous financial year due to robust orders inflow, capacity augmentation, product diversification and improved operational efficiencies. The leadership at shop floor has enabled the Company to achieve manufacturing excellence at all levels of the organization and deliver the improved financial performance during the year under review. The Profit before Depreciation and Tax for the year stood at Rs, 14091.50 lakhs as compared to Rs, 10625.30 lakhs in the previous year.
The first stage of expansion-cum-diversification of the Companyâs Copper Cable facility has been successfully implemented and became operational during the year under review, which enabled the Company to launch certain variants of cables and conductors for Indian Railways, Solar Energy and Power distribution segments. The second and final stage of the said expansion-cum-diversification project for manufacturing of Electron Beam Irradiated Cross-linked Cables including installation of Electron Beam Accelerator of appropriate rated capacity is progressing as per schedule and barring unforeseen circumstances, is likely to be operational by end of the 2nd quarter of the current fiscal year. Once fully operational, this would enable your Company to expand its products portfolio by diversification into the high end market of specialized electrical cables and electron beam irradiated cross-linked cables. Your Company is also in the process of implementing substantial expansion of its Optical Fibre Cables facility (OFC Unit) at Rewa to be executed in phases. The first phase of the said substantial expansion project for doubling the existing production capacity of Optical Fibre Cables is likely to be operational by November/December, 2018 with an estimated incremental capital outlay of '' 5171.00 lakhs, to be funded by a mix of internal accruals and debt. Although demand for optical fibre cables presently is robust, current level of investments in the industry could result in overcapacity and create fierce competition in the market. Your Company is, therefore, putting focus on automation and operational efficiency with production capacity additions in phased manner in order to insulate itself from the contingencies of intense competition during downturn in business cycle.
At a global level, telecom network building is growing very rapidly across all regions driving higher than expected optical fibre cable market growth resulting in optical fibre supply constraints. As per available reports, the global optical fibre cable consumption increased 14.90% from 429 Million FKM to 493 Million FKM during the calendar year 2017, out of which Chinaâs consumption stood at 286 Million FKM (approx.58% of the total global consumption) and South Asia/Indian Subcontinent accounted for approx.23 Million FKM. South Asia sub-region anchored by India, which accounts for 90% of the regionâs optical fibre cable consumption, is likely to witness a strong growth in demand for optical fibre cables as the government seeks to unlock the transformative power of digital communications networks, interalia, through focus on fibre connectivity with a plan to standardize policy and costs for obtaining the RoW for laying optical fibre cables and development of fibre infrastructure needed for broadband connectivity across the country and all layers of government. India is extremely low in fibre connectivity and the telecom operators need to vastly expand and upgrade the digital infrastructure of optical fibre and backhaul facilities across the country in order to catchup with the peers in the global arena. The proliferation of 4G and Voice over Long Term Evolution services are paving the way for more fibre based deployment across the country. India is also in the process of aligning itself with global road map of 5G deployment for which expansion and improvement of optical fibre infrastructure will be pre-requisite to meet its criteria. Further, with the increasing competition in mobility, the telecom operators in India are also envisaging deployment of various version of FTTx networks to derive competitive advantages and improved quality of services, which will also need substantial quantum of fibre backhaul. The draft National Digital Communication Policy, 2018, recently unveiled by the Government of India, therefore, rightly lays down a fibre-first initiative to take fibre to the home, to enterprise and to key development institutions and the establishment of a National Digital Grid and creation of a National Fibre Authority which augers well for the Company.
The Company also foresees robust demand for its Copper Cables product portfolio including Railway Signaling and Quad Cables with the planned increased infrastructure spending in public and private sectors and also due to focus of the Government on strengthening, capacity augmentation, modernization and electrification of Railways/Metro Railways/Dedicated Freight Corridors network across the country.
The EPC business segment of the Company has established itself as a known and reputed total solution provider from project concept to commissioning in certain infrastructure segments and is continually exploring new business opportunities in the evolving technology landscape in ICT, the Governmentâs Digital India Initiatives and Smart Cities Mission, Power sub-transmission and distribution, Sewerage systems and projects, etc. The EPC business segment having successfully executed some of the very prestigious projects including Network For Spectrum (NFS) and IP-1 in hilly and difficult terrains in India is in the process of securing new and prestigious optical fibre infrastructure projects from Bharat Sanchar Nigam Ltd. and Bharat Broadband Networks Ltd. Given the renewed thrust of the governments, both Central and State Governments, on creating world class infrastructure in the country, your Company as a leading turn-key solution provider, is well poised to grab these upcoming business opportunities in the fields of Telecom, Power sub-transmission and distribution, Sewerage, Water/Irrigation and related Civil Infrastructure, as an end-to-end solutions provider with huge expertise gained over a period.
DIVIDEND AND RESERVES
After considering the Companyâs profitability, free cash flow and overall financial performance, the Board of Directors of the Company is pleased to recommend a Dividend of Rs, 10/- (previous year Rs, 7/-) per equity share of face value Rs, 10/- each (i.e. 100%) for the financial year ended on March 31, 2018. The distribution of Dividend on equity shares, if approved by the Members at the ensuing Annual General Meeting, will result in payout of Rs, 1185.09 lakhs excluding Tax on Dividend and Surcharge/Education Cess thereon, as applicable.
During the year under review, your Company transferred a sum of Rs,835 lakhs (previous year Rs, 418 lakhs) to the Debenture Redemption Reserve.
SHARE CAPITAL
The paid-up Equity Share Capital of the Company as at March 31, 2018 stood at Rs, 1184.21 lakhs. During the year under review, the Company has neither issued shares with differential rights as to dividend, voting or otherwise nor has granted stock options or sweat equity under any scheme. Further, none of the Directors of the Company holds investments convertible into equity shares of the Company as on March 31, 2018.
DEPOSITS/FINANCE
Your Company has not accepted any public deposits during the year within the meaning of Section(s) 73 to 76 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014 and as such no amount on account of principal or interest on public deposits was outstanding as on the date of the Balance Sheet.
Your Company continued to optimise bank borrowings by focusing on cash flows and working capital management. Your Company achieved measurable reduction in its finance costs during the year under review by issuance of Commercial Papers at a very competitive coupon rate(s), significant reduction in charges for non-fund based credit facilities and replacement of comparatively high interest bearing Intercorporate Loans with low coupon rate long term Non-Convertible Debentures, etc.
During the year under review, your Company issued and allotted second tranche of Unsecured, Unlisted, Rated, Redeemable, Nonconvertible Debentures (NCDs) aggregating to Rs, 5000.00 lakhs, at a coupon rate of 8.40% p.a., on a private placement basis to a scheduled bank. The said NCDs are redeemable at par in three annual installments over a period of five years, commencing from end of third year of the date of issuance of the NCDs. The said NCDs carries credit rating CARE AA-; Stable (Double A Minus; Outlook Stable) assigned by CARE Ratings Ltd.
CORPORATE GOVERNANCE
Pursuant to Regulation 34(3) read with Para C of Schedule V of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Management Discussion and Analysis, Report on Corporate Governance and a Certificate by the Managing Director & CEO confirming compliance by all the Board Members and Senior Management Personnel with Companyâs Code of Conduct and Auditorsâ Certificate regarding compliance of conditions of Corporate Governance are made a part of the Annual Report.
CORPORATE SOCIAL RESPONSIBILITY INITIATIVES
As a part of its initiative under Corporate Social Responsibility (CSR), your Company has undertaken CSR activities in the areas of (i) Animal welfare; (ii) Education promoting employment enhancing vocation skills especially among children and livelihood enhancement projects;
(iii) Promoting Girl Child education; (iv) Ensuring Environmental Sustainability, Ecological balance, Conservation of natural resources and maintaining quality of Soil, Air and Water; and (v) Rural Development Projects in the local area where the Company operates and also in other parts of India. These activities are largely in accordance with Schedule VII of the Companies Act, 2013 read with Companies (Corporate Social Responsibility Policy) Rules, 2014 and the Companyâs CSR Policy.
The Annual Report on CSR activities as required under the Companies (Corporate Social Responsibility Policy) Rules, 2014 is given in Annexure-I, which is attached hereto and forms a part of the Directorsâ Report. The Corporate Social Responsibility Policy of the Company is available on the website of the Company i.e. www.vtlrewa.com.
DIRECTORSâ RESPONSIBILITY STATEMENT
To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statements in terms of Section 134(3)(c) of the Companies Act, 2013:
(a) that in the preparation of the annual financial statements for the year ended March 31,2018, the applicable accounting standards read with requirements set out under Schedule III to the Companies Act, 2013, have been followed and there are no material departures from the same;
(b) that such accounting policies as mentioned in Notes to the Financial Statements have been selected and applied consistently and judgment and estimates have been made 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, 2018 and the profit of the Company for the year ended on that date. The Company adopted Indian Accounting Standards (Ind AS) effective from April 1, 2017 with transition date being April 1, 2016 and accordingly, the transition was carried out and applied in the accounting policies in accordance with the applicable Ind AS as stated in the Notes to Financial Statements. The impact of transition has been recorded in opening reserves as at April 1, 2016 and the periods presented have been restated accordingly;
(c) that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
(d) that the annual financial statements have been prepared on a going concern basis;
(e) that proper internal financial controls were in place and that the financial controls were adequate and were operating effectively; and
(f) that system to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.
RISK MANAGEMENT AND ADEQUACY OF INTERNAL FINANCIAL CONTROLS
Your Companyâs system of financial and compliance controls with reference to the financial statements and risk management is embedded in the business process by which the Company pursues its objectives. Additionally, the Audit Committee and the Board of Directors assess and monitor regularly the framework for identification, evaluation and prioritization of risks, mechanism to mitigate risks, process that methodically track governance objectives, risk ownership/accountability, compliance with policies and decisions that are set through the governance process, risks to those objectives and effectiveness of risk mitigation and controls besides inherent risks associated with the products/goods dealt with by the Company as well as execution of turnkey projects of EPC business segment. Your Companyâs approach to address business risks and compliance functions is comprehensive across both the business segments and includes periodic review of such risks and a framework for mitigating and reporting mechanism of such risks. In view of the Board of Directors, there are no material risks, which may threaten the existence of the Company.
The Company has laid down the policies and procedures for internal financial controls for ensuring the orderly and efficient conduct of its business, in order to achieve the strategic, operational and other objectives over a long period and that its exposure to risks are within acceptable limits. In addition, the policies and procedures have been designed with an intent to ensure safeguarding of Companyâs assets, the prevention and detection of frauds and errors, the accuracy in completeness of the accounting records and the timely preparation of reliable financial information.
The management is committed to ensure effective internal financial controls environment, which provides assurance on the efficiency of its business operations coupled with adherence to its established policies, safety/security of its assets besides orderly and legitimate conduct of Companyâs business in the circumstances, which may reasonably be foreseen. The Company has defined organization structure, authority levels, delegated powers, internal procedures, rules and guidelines for conducting business transactions. The Companyâs system and process relating to internal controls and procedures for financial reporting have been designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the Companies Act, 2013, Companies (Indian Accounting Standards) Rules, 2015 and other relevant provisions of the Act and rules made there under and all other applicable regulatory/statutory guidelines, etc. for disclosures with reference to financial statements.
Your Companyâs internal control systems are supplemented by an extensive program of internal audit by independent firms of Chartered Accountants. Internal audits are conducted at regular intervals and a summary of the observations and recommendations of such audits are placed before the Audit Committee. The Internal Auditors, the Audit Committee as well as the Board of Directors conduct an evaluation of the adequacy and effectiveness of the system of internal financial controls system on an ongoing basis.
The Board has also implemented systems to ensure compliance of all applicable laws to the Company which were effective and operative. At quarterly intervals the Company Secretary & Compliance Officer places before the Board a certificate along with a detailed statement certifying compliance of various laws and regulations as applicable to the business and operations of the Company after obtaining confirmation from all functional heads responsible for compliance of such applicable laws and regulations. The Company Secretary is responsible for compliance of corporate laws including Companies Act, 2013, SEBI Act and rules/guidelines and listing regulations including any statutory amendment(s), modification(s) or enactment(s) thereto applicable to the Company.
INDUSTRIAL RELATIONS AND SAFETY
Industrial relations remained cordial throughout the year. Your Directors recognize and appreciate the sincere and hard work, loyalty, dedicated efforts and contribution of all the employees in the growth and performance of the Company during the year. Despite severe competition, the enthusiasm and unstinting efforts of the employees have enabled your Company to remain at the forefront of the industry.
Your Company continues to accord a very high priority to both industrial safety and environmental protection and these are ongoing process at the Companyâs plant and facilities to maintain high awareness levels. The Company has also stressed the need to adopt the highest safety standards on projects undertaken by the Engineering, Procurement and Construction (EPC) business segment with the emphasis on ensuring that safety on all projects under execution. Your Company is conscious of the importance of environmentally clean and safe operations so as to ensure safety of all concerned and compliance of applicable environmental regulations and to this end working continuously towards reduction in waste for disposal. The Company as a policy re-evaluates safety standards and practices from time to time in order to raise the bar of safety standards for its people as well as users and customers.
RECOGNITION
Yours Companyâs manufacturing facilities continue to remain certified by independent and reputed external agency as being compliant as well as aligned with the external standards for Quality Management System ISO 9001:2015 and TL 9000 R5.5/R5.0H, Environmental Management System ISO 14001:2015 and Occupational Health and Safety Management System OHSAS 18001:2007. During the year, the audits for these Certifications established continuous improvement in performance against these standards.
During the year under review, your Company successfully obtained certification under ISO 27001:2013 for Information Security Management System.
DIRECTORS
In accordance with the provisions of Section 152 of the Companies Act, 2013 and the Companyâs Articles of Association, Shri D.R. Bansal (DIN:00050612), Director, shall retire by rotation at the ensuing Annual General Meeting and being eligible, has offered himself for reappointment as a Director of the Company. The Board recommends his re-appointment for the consideration of the members of the Company at the ensuing Annual General Meeting.
Pursuant to provisions contained in Article 94 of the Articles of Association of the Company and Sections 149 and 161 of the Companies Act, 2013, Shri Dilip Ganesh Karnik (DIN: 06419513) was appointed as an Additional Director of the Company by the Board of Directors at its meeting held on November 14, 2017 and he holds the office as such up to the date of this ensuing Annual General Meeting. Shri Dilip Ganesh Karnik is not disqualified from being appointed as a Director in terms of Section 164 of the Companies Act, 2013 and the Company has received a notice in writing under Section 160 of the Companies Act, 2013 from a member proposing the candidature of Shri Dilip Ganesh Karnik for the office of Director of the Company. The Nomination and Remuneration Committee at its Meeting held on May 23, 2018 has recommended the appointment of Shri Dilip Ganesh Karnik as Director, liable to retire by rotation at this ensuing Annual General Meeting.
The brief resume and other details of Director(s) seeking re-appointment/appointment as required under Regulation 36(3) of the Listing Regulations and Clause 1.2.5 of the Secretarial Standard on General Meetings (SS-2) are given in the Notice of the ensuing Annual General Meeting, which is being sent to the shareholders along with Annual Report.
KEY MANAGERIAL PERSONNEL
Shri Y.S. Lodha, Managing Director & CEO, Shri Saurabh Chhajer, Chief Financial Officer and Shri Satyendu Pattnaik, Company Secretary are the Key Managerial Personnel of the Company. Shri Satyendu Pattnaik was appointed as Company Secretary of the Company with effect from August 10, 2017 in place of Shri Raj Kumar Agrawal, who resigned from the services of the Company on August 9, 2017.
DECLARATION BY INDEPENDENT DIRECTORS
All Independent Directors of your Company viz. Shri J.Veeraraghavan, Shri S.K. Misra, Shri R.C.Tapuriah, Shri Shiv Dayal Kapoor and Smt. Kiran Aggarwal have individually and severally given a declaration pursuant to Section 149(7) of the Companies Act, 2013, affirming compliance to the criteria of Independence as laid down under Section 149(6) of the Companies Act, 2013. Based on the declaration(s) of Independent Directors, the Board of Directors recorded its opinion that all Independent Directors are independent of the Management and have fulfilled the conditions as specified under the governing provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements), Regulations, 2015.
MEETINGS OF BOARD AND COMPOSITION OF COMMITTEES
During the year under review, the Board met six times viz. on May 15, 2017, August 09, 2017, September 15, 2017, November 14, 2017, February 06, 2018 and March 09, 2018.
As required under Section 177(8) read with Section 134(3) of the Companies Act, 2013, and the rules framed there under, the composition and meetings of the Audit Committee were in line with the provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, details of which along with composition, number of meetings of all other Board Committees held during the year under review and attendance at the meetings are provided in the Report on Corporate Governance, forming a part of the Annual Report. During the year under review, all the recommendations of the Audit Committee were accepted by the Board of Directors.
PERFORMANCE EVALUATION OF BOARD, COMMITTEES & DIRECTORS
Pursuant to the Provisions of the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and the Guidance Note on Board evaluation issued by SEBI, the Board of Directors of the Company carried out the formal annual evaluation of its own performance and that of its Committees and individual Directors, interalia, to assess the skill set and contribution that are desired, recognizing that competencies and experiences evolves over time. The evaluation process also covered various aspects of the Board functioning such as composition of the Board and its Committees, experience and competencies, performance of specific duties and obligations, governance issues, etc. The process was conducted by allowing the Board to engage in candid discussions with each Director with the underlying objective of taking best possible decisions in the interest of the Company and its stakeholders. The Directors were individually evaluated on well defined parameters which, interalia, comprised of level of engagement and their contribution to strategic planning and other criteria based on performance and personal attributes of the Directors. During the process of evaluation, the Board of Directors also considered the criteria for evaluation of performance of Independent Directors and the Board of Directors formulated by the Nomination and Remuneration Committee. The Board of Directors also reviewed and deliberated the review of performance of the Chairman (taking into account the views of non-executive directors and the Managing Director), the Non-independent Directors and the Board as a whole carried out by the Independent Directors. In conclusion, the Board of Directors was satisfied with the performance and functioning of the Board, its Committees and individual members. A statement indicating the manner, in which formal annual evaluation has been made by the Board of Directors, is given in the Report on Corporate Governance which forms a part of the Annual Report.
SELECTION AND APPOINTMENT OF DIRECTORS AND THEIR REMUNERATION
The Board of Directors in consonance with the recommendation of Nomination and Remuneration Committee (NRC) has adopted a terms of reference which, interalia, deals with the criteria for identification of members of the Board of Directors and selection/appointment of the Key Managerial Personnel/Senior Management Personnel of the Company. The NRC recommends appointment of Director/appointment or re-appointment of Managing Director based on their qualifications, expertise, positive attributes and independence in accordance with prescribed provisions of the Companies Act, 2013 and rules framed there under and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The NRC, in addition to ensuring diversity of race and gender, also considers the impact the appointee would have on Boardâs balance of professional experience, background, view points, skills and areas of expertise.
The Board of Directors in consonance with the recommendation of Nomination and Remuneration Committee has also adopted the Remuneration Policy for the members of the Board and Executive Management. The guiding principles of the Remuneration Policy are stated in the Report on Corporate Governance, which forms a part of the Annual Report.
VIGIL MECHANISM / WHISTLE BLOWER POLICY
In terms of the provisions of Section 177(9) of the Companies Act, 2013, the Company has implemented a Vigil Mechanism which includes implementation of the Whistle Blower Policy to deal with instances of fraud and mis-management, if any, and conducting business with integrity, including in accordance with all applicable laws and regulations. No employee has been denied access to the Vigilance Officer as well as Chairman of the Audit Committee. The details of the Vigil Mechanism and Whistle-Blower Policy are explained in the Corporate Governance Report and also posted on the website of the Company.
AUDITORS
In terms of the provisions of Section 139 of the Companies Act, 2013 read with the Companies (Audit and Auditors) Rules, 2014 as amended vide the Companies (Amendment) Act, 2017 and the Companies (Audit and Auditors) Amendment Rules, 2018 respectively, Messrs V. Sankar Aiyar & Co., Chartered Accountants (Registration No. 109208W), the Auditors of the Company, hold office for a consecutive period of five years until the conclusion of Thirty Seventh (37th) Annual General Meeting of the Company to be held for the financial year 2019-20 and their appointment is not required to be ratified each year at Annual General Meeting of the Company. The Auditors have confirmed to the Company that they continue to remain eligible to hold office as the Auditors and not disqualified for being so appointed under the Companies Act, 2013, the Chartered Accountants Act, 1949 and the rules and regulations made there under.
The Board of Directors has re-appointed Messrs D. Sabyasachi & Co., Cost Accountants (Registration No. 000369), as Cost Auditors for conducting the audit of the cost records maintained by the Company in respect of specified products of the Company covered under the Companies (Cost Records and Audit) Rules, 2014 and fixed their remuneration plus applicable taxes thereon and reimbursement of out of pocket expenses based on the recommendation of the Audit Committee. The remuneration and applicable taxes thereon and reimbursement of out of pocket expenses to be paid to the Cost Auditors is subject to ratification by the members in the ensuing Annual General Meeting of the Company.
AUDITORSâ REPORT
The Auditorsâ Report on the financial statements of the Company forms a part of the Annual Report. There is no qualification, reservation, adverse remark, disclaimer or modified opinion in the Auditorsâ Report, which calls for any further comments or explanations. Further, during the year under review, the Auditors have not reported any matter under Section 143(12) of the Companies Act, 2013, therefore, no detail is required to be disclosed in pursuance to Section 134(3)(ca) of the Companies Act, 2013.
SECRETARIAL AUDITOR
Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, Messrs R.K. Mishra & Associates, Company Secretaries (PCS Registration no.14474) were appointed to undertake the Secretarial Audit of the Company for the year ended March 31, 2018. The Report of the Secretarial Auditor is given in Annexure-II, which is attached hereto and forms a part of the Directorsâ Report.
No qualification or observation or other remarks have been made by Messrs R.K. Mishra & Associates in the Secretarial Audit Report, which calls for any comments or explanations.
COMPLIANCE WITH SECRETARIAL STANDARDS
The Company has proper system in place to ensure compliance with the provisions of applicable Secretarial Standards. During the year under review, your Company has complied with applicable provisions of Secretarial Standard on Meetings of the Board of Directors (SS-1) and Secretarial Standard on General Meetings (SS-2) issued by the Institute of Company Secretaries of India.
RELATED PARTY TRANSACTIONS
All related party transactions that were entered into by the Company during the financial year under review were generally on armsâ length basis and in the ordinary course of business. The disclosure of related party transactions as required under Section 134(3)(h) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 in prescribed Form AOC-2 is given in Annexure III, which is attached hereto and forms a part of the Directorsâ Report. There are no material significant related party transactions entered into by the Company with its Promoters, Directors, Key Managerial Personnel or other designated persons, which may have a potential conflict with the interest of the Company at large.
All related party transactions are placed before the meeting(s) of Audit Committee for its approval. Prior omnibus approval of the Audit Committee is obtained on an annual basis, for a financial year, for the transactions which are of a foreseen and repetitive in nature. The statement giving details of all related party transactions entered into pursuant to the omnibus approval together with relevant documents/ information are placed before the Audit Committee for review and updating on quarterly basis. The Companyâs Policy on materiality of Related Party Transactions and dealing with Related Party Transactions, as approved by the Board of Directors, is uploaded on the Companyâs website and can be accessed at weblink: http://www.vtlrewa.com/pdf/RPTPolicy%20_VTL.pdf.
SUBSIDIARIES, ASSOCIATE AND JOINT VENTURE(S)
Your Company has three wholly owned subsidiaries namely August Agents Limited, Insilco Agents Limited and Laneseda Agents Limited. None of the subsidiary companies is a material non-listed Indian Subsidiary company as defined under Regulation 24(1) of the SEBI (Listing Obligations and Disclosure Requirements), Regulations, 2015. During the year under review there was no change in the number of subsidiaries or in nature of business of subsidiaries. The subsidiaries have achieved satisfactory financial performance during the year under review.
Birla Visabeira Private Limited, an existing joint venture company engaged primarily in EPC and Operation & Maintenance business in the areas of telecommunications and infrastructure. The joint ventureâs financial performance was in consonance with planned business strategy.
Universal Cables Ltd. (UCL), Birla Corporation Ltd. (BCL) and Punjab Produce Holdings Ltd. (PPHL) are Associate companies within the meaning of Section 2(6) of the Companies Act, 2013 read with definition of the term âAssociateâ as per Indian Accounting Standard (Ind AS)-28, UCL and BCL have achieved sustained growth in business with improved financial performances during the year under review and the financial performance of PPHL was satisfactory.
A Statement containing the salient features of the financial statements of subsidiaries, associate companies and a joint venture as prescribed under the first proviso to sub-section (3) of section 129 of the Companies Act, 2013 read with rule 5 of The Companies (Accounts) Rules, 2014 is attached as per the prescribed format and forms a part of the Annual Report.
A report on the performance of financial position of each of three wholly owned subsidiaries, three associate companies and a joint venture company, as per the provisions of the Companies Act, 2013 is provided as part of the consolidated financial statements and hence not repeated herein for the sake of brevity.
CONSOLIDATED FINANCIAL STATEMENTS
The consolidated financial statements of the Company for the Financial Year ended March 31,2018 have been prepared in accordance with Indian Accounting Standards (Ind AS) as prescribed under the Companies Act, 2013 ("the actâ), Companies (Indian Accounting Standards) Rules, 2015 and other relevant provisions of the Act and rules made there under [including the statutory amendment(s) thereof if any].
In accordance with the applicable provisions of the Act and the rules and regulations made there under, read with Indian Accounting Standard (Ind AS)-110 "Consolidated Financial Statementsâ and Indian Accounting Standard (Ind AS)-28 "Accounting for Investments in Associates and Joint Venturesâ, the audited Consolidated Financial Statements of the Company as of and for the year ended March 31, 2018, forms a part of the Annual Report.
PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS UNDER SECTION 186 OF THE COMPANIES ACT, 2013
The particulars of Loans, Guarantees and Investments in pursuance to Section 186 of the Companies Act, 2013 have been disclosed in the financial statements read together with Notes annexed to and forming an integral part of the financial statements.
DISCLOSURE OF RATIO OF REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL, ETC.
As required under Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Statement of Disclosure of Remuneration and such other details as prescribed therein are given in Annexure-IV, which is attached hereto and forms a part of the Directorsâ Report.
EXTRACT OF ANNUAL RETURN
An Extract of Annual Return as provided under Section 92(3) of the Companies Act, 2013 is given in Annexure-V, which is attached hereto and forms a part of the Directorsâ Report.
Particulars of Employees
The information required pursuant to Section 197 of the Companies Act, 2013, read with Rule 5(2) of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of an employee of the Company are given in Annexure-VI, which is attached hereto and forms a part of the Directorsâ Report.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNING AND OUTGO
As required under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of The Companies (Accounts) Rules, 2014, the information on Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo are given in Annexure-VII, which is attached hereto and forms a part of the Directorsâ Report.
GENERAL
Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions or events on these items during the year under review:
(a) The Managing Director of the Company does not receive any remuneration or commission from any of the subsidiaries of the Company.
(b) No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status of the Company and its operations in future.
(c) The Company has zero tolerance towards sexual harassment at workplace and has adopted a Policy on prevention, prohibition and redressal of sexual harassment at workplace in line with the requirements of The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, and Rules made there under. During the year under review, there were no cases filed or reported pursuant to the provisions of the said Act.
(d) There are no material changes or commitments affecting the financial position of the Company, which have occurred between the end of the financial year of the Company to which the financial statements relate and the date of this Report.
(e) No frauds were reported by Auditors in terms of Section 143(2) of the Companies Act, 2013 and rules, if any, made there under.
ACKNOWLEDGEMENT
The Board desires to place on record its grateful appreciations for the excellent assistance and co-operation received from the State Government and continued support extended to the Company by the bankers, investors, vendors and esteemed customers and other business associates/institutions. Your Directors also wish to place on record their sincere thanks and infinite appreciations to all the employees of the Company for their unstinted commitment and continued contribution in the performance of the Company.
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Yours faithfully, |
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Harsh V.Lodha |
Chairman |
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(DIN: 00394094) |
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J. Veeraraghavan |
|
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(DIN: 00078998) |
|
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S.K. Misra |
|
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(DIN: 00009411) |
|
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R.C. Tapuriah |
|
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(DIN: 00395997) |
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D.R. Bansal |
|
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(DIN: 00050612) |
Directors |
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Pracheta Majumdar |
|
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(DIN: 00179118) |
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Shiv Dayal Kapoor |
|
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(DIN: 00043634) |
|
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Kiran Aggarwal |
|
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(DIN: 06991807) |
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Dilip Ganesh Karnik |
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(DIN: 06419513) t |
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Y.S. Lodha |
Managing Director |
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(DIN: 00052861) |
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New Delhi, May 23, 2018 |
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Mar 31, 2017
TO THE SHAREHOLDERS
The Directors have the pleasure of presenting their Thirty Fourth Annual Report, together with the Audited Financial Statements of the Company for the year ended March 31, 2017.
SUMMARY OF FINANCIAL RESULTS & STATE OF COMPANYâS AFFAIRS
|
2016-17 |
2015-16 |
|
|
Rs. in lacs |
Rs. in lacs |
|
|
Revenue from Operations (Gross) |
106222.65 |
102806.84 |
|
Other Income |
1713.38 |
1788.18 |
|
107936.03 |
104595.02 |
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|
The Yearâs working shows - |
||
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Profit before Depreciation, Exceptional Item and Tax |
10870.47 |
13377.17 |
|
Less : Depreciation and Amortization expense |
1266.41 |
1317.37 |
|
: Exceptional Item |
- |
477.76 |
|
Profit before Tax |
9604.06 |
11582.04 |
|
Less : Tax Expense/(Credit) : |
||
|
- Current Tax/Minimum Alternate Tax (MAT) |
3147.00 |
3772.55 |
|
(Net of MAT Credit Entitlement, if any) |
||
|
- Income Tax for Earlier Years |
4.32 |
- |
|
- Deferred Tax Charge/(Credit) |
(271.45) |
74.78 |
|
Net Profit for the Year |
6724.19 |
7734.71 |
GENERAL & CORPORATE MATTERS
Your Company continues to operate in two business segments i.e. Cables and Engineering Procurement and Construction (EPC). The detailed operational working of your Company for the year is provided in the Management Discussion and Analysis forming a part of this Report.
During the year under review, your Company achieved Gross Revenue from operations of Rs.106222.65 lacs as compared to Rs.102806.84 lacs in the previous year, registering a growth of about 3.32%. The revenue from exports including project exports declined to Rs.1841.45 lacs as compared to Rs.7227.58 lacs during the previous year mainly due to prevailing un remunerative price levels, without factoring the steep rise in the prices of key raw materials including optical fibre globally. During the year under review, the EPC segment clocked a noticeable increase in Gross Revenue by 40.15 % mainly due to robust order inflow and strong project execution capabilities through improved monitoring systems and cost control initiatives. The Cables business segment however registered a decrease by 40.12% in Gross Revenue in comparison with the previous financial year due to change of product mix based on demand pattern of customers, lower volumes and competitive price levels. The Profit before Depreciation and Tax for the year stood at Rs.10870.47 lacs as compared to Rs.13377.17 lacs in the previous year.
At a global level, telecom network building is growing very rapidly across all regions driving higher than expected optical fibre cable market growth resulting in optical fibre supply constraints. However, your Company is partially insulated against these constraints having tied up with proper supply sources. Your Company continues to do product innovation and emerged as one of the leading manufacturers in niche and specialty optical fibre cable segments for a variety of newer applications like high speed 4G LTE telecom networks and defense sector related communication networks. Your Company is also in the process of implementing substantial expansion-cum-diversification of its existing Copper Cable facility, to be executed in stages, for manufacturing of Electron Beam Irradiated Cross-linked Cables including installation of Electron Beam Accelerator(s) of appropriate rated capacity, with an estimated capital outlay of approx.Rs.3275.00 lacs, to be funded by a mix of internal accruals and debt. This would enable your Company to expand its products portfolio by diversification into the high end market of specialised electrical cables and electron beam irradiated cross-linked cables. The market for such cables is rapidly expanding due to the exacting technical requirements of new applications and the gradual transition from the conventional cables to the new genre of Electron Beam Irradiated Cables particularly in the market segment of Solar Energy (DC Solar Cables), Railways, Ship Building, etc. The substantial expansion-cum-diversification project is likely to be operational in two stages by December, 2017.
With the Government of Indiaâs ambitious âPower for Allâ program through which all utilities are planning to offer 24x7 power across the entire country, new distribution and transmission lines are planned. This move offers tremendous growth opportunities for the Companyâs EPC business segment. Given the renewed thrust of the Government on creating world class infrastructure in the country including digital India and broadband, power sub-transmission and distribution, Smart Cities, creation of water supply and sewerage pipelines, etc., your Company as a leading turn-key solution provider, is well poised to grab these upcoming business opportunities in the fields of Telecom, Power sub-transmission and distribution, Sewerage, Water/Irrigation and Civil Infrastructure, as an end-to-end solutions provider with huge expertise gained over a period.
DIVIDEND AND RESERVES
After considering the Companyâs profitability, free cash flow and overall financial performance, the Board of Directors of the Company is pleased to recommend a Dividend of Rs.7/- (previous year Rs.6/-) per equity share of face value Rs.10/- each (i.e. 70%) for the financial year ended on March 31, 2017. The distribution of Dividend on equity shares, if approved by the Members at the ensuing Annual General Meeting, will result in payout of Rs.829.56 lacs excluding Tax on Dividend and Surcharge/Education Cess thereon.
Your Board also proposed to transfer Rs.5000.00 lacs to the General Reserve out of the amount available for appropriation leaving a surplus of Rs.7627.70 lacs in the Statement of Profit and Loss to be carried forward.
DEPOSITS/FINANCE
Your Company has not accepted any public deposits during the year within the meaning of Section(s) 73 to 76 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014 and as such no amount on account of principal or interest on public deposits was outstanding as on the date of the Balance Sheet.
Your Company continued to optimize bank borrowings by focusing on cash flows and working capital management. By availing alternate cheaper funding options like issuance of Commercial Papers, etc. your Company achieved substantial reduction in its finance costs during the year under review.
During the year under review, your Company issued Unsecured, Unlisted, Rated, Redeemable, Non-Convertible Debentures (NCDs) aggregating to Rs.5000.00 lacs, at a coupon rate of 8.50% p.a., on a private placement basis to a scheduled bank. The said NCDs are redeemable at par in three equal annual installments over a period of five years. Credit Rating for said NCDs is CARE AA- (indicative of âStable Outlookâ).
CORPORATE GOVERNANCE
Pursuant to Regulation 34(3) read with Para C of Schedule V of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Management Discussion and Analysis, Report on Corporate Governance and a Certificate by the Managing Director & CEO confirming compliance by all the Board Members and Senior Management Personnel with Companyâs Code of Conduct and Auditorsâ Certificate regarding compliance of conditions of Corporate Governance are made a part of the Annual Report.
CORPORATE SOCIAL RESPONSIBILITY INITIATIVES
As a part of its initiative under Corporate Social Responsibility (CSR), your Company has undertaken CSR activities in the areas of (i) Animal welfare; (ii) Education promoting employment enhancing vocation skills especially among children and livelihood enhancement projects; (iii) Ensuring environmental sustainability, ecological balance, protection of flora and fauna, conservation of natural resources and maintaining quality of soil, air and water; and (iv) Promoting health care including preventive health care in the local area where the Company operates. These activities are largely in accordance with Schedule VII of the Companies Act, 2013 read with Companies (Corporate Social Responsibility Policy) Rules, 2014 and the Companyâs CSR Policy.
The Annual Report on CSR activities is given in Annexure-I, which is attached hereto and forms a part of the Directorsâ Report. The Corporate Social Responsibility Policy of the Company is available on the website of the Company i.e. www.vtlrewa.com.
DIRECTORSâ RESPONSIBILITY STATEMENT
To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statements in terms of Section 134(3)(c) of the Companies Act, 2013:
(a) that in the preparation of the annual financial statements for the year ended March 31, 2017, the applicable accounting standards read with requirements set out under Schedule III to the Companies Act, 2013, have been followed and there are no material departures from the same;
(b) that such accounting policies as mentioned in Notes to the Financial Statements have been selected and applied consistently and judgment and estimates have been made 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, 2017 and the profit of the Company for the year ended on that date;
(c) that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
(d) that the annual financial statements have been prepared on a going concern basis;
(e) that proper internal financial controls were in place and that the financial controls were adequate and were operating effectively; and
(f) that system to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.
RISK MANAGEMENT AND ADEQUACY OF INTERNAL FINANCIAL CONTROLS
Your Companyâs system of financial and compliance controls with reference to the financial statements and risk management is embedded in the business process by which the Company pursues its objectives. Additionally, the Audit Committee and the Board of Directors assess and monitor regularly the framework for identification, evaluation and prioritization of risks, mechanism to mitigate risks, process that methodically track governance objectives, risk ownership/accountability, compliance with policies and decisions that are set through the governance process, risks to those objectives and effectiveness of risk mitigation and controls besides inherent risks associated with the products/goods dealt with by the Company as well as execution of turnkey projects of EPC business segment. Your Companyâs approach to address business risks and compliance functions is comprehensive across both the business segments and includes periodic review of such risks and a framework for mitigating and reporting mechanism of such risks. In the view of the Board of Directors, there are no material risks, which may threaten the existence of the Company.
The Board of Directors of your Company has laid down the policies and procedures for internal financial controls to be followed by the Company for ensuring the orderly and efficient conduct of its business, in order to achieve the strategic, operational and other objectives over a long period and that its exposure to risks are within acceptable limits decided by the Board. In addition, the policies and procedures have been designed with an intent to ensure safeguarding of Companyâs assets, the prevention and detection of frauds and errors, the accuracy in completeness of the accounting records and the timely preparation of reliable financial information.
The management is committed to ensure effective internal financial controls environment, which provides assurance on the efficiency of its business operations coupled with adherence to its established policies, safety/security of its assets besides orderly and legitimate conduct of Companyâs business in the circumstances, which may reasonably be foreseen. The Company has defined organization structure, authority levels, delegated powers, internal procedures, rules and guidelines for conducting business transactions. The Companyâs system and process relating to internal controls and procedures for financial reporting have been designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with Generally Accepted Accounting Principles (GAAP) in India, the Companies Act, 2013 and rules framed there under and all other applicable regulatory/statutory guidelines, etc. for disclosures with reference to financial statements.
Your Companyâs internal control systems are supplemented by an extensive program of internal audit by independent firms of Chartered Accountants. Internal audits are conducted at regular intervals and a summary of the observations and recommendations of such audits are placed before the Audit Committee. The Internal Auditors, the Audit Committee as well as the Board of Directors conduct an evaluation of the adequacy and effectiveness of the system of internal financial controls system on an ongoing basis.
The Board has also implemented systems to ensure compliance of all applicable laws to the Company which were effective and operative. At quarterly intervals the Company Secretary & Compliance Officer places before the Board a certificate along with a detailed statement certifying compliance of various laws and regulations as applicable to the business and operations of the Company after obtaining confirmation from all functional heads responsible for compliance of such applicable laws and regulations. The Company Secretary is responsible for compliance of corporate laws including Companies Act, 2013, SEBI Act and rules/guidelines and listing regulations applicable to the Company.
INDUSTRIAL RELATIONS AND SAFETY
Industrial relations remained cordial throughout the year. Your Directors recognize and appreciate the sincere and hard work, loyalty, dedicated efforts and contribution of all the employees in the growth and performance of the Company during the year.
Your Company continues to accord a very high priority to both industrial safety and environmental protection and these are ongoing process at the Companyâs plant and facilities to maintain high awareness levels. The Company has also stressed the need to adopt the highest safety standards on projects undertaken by the Engineering, Procurement and Construction (EPC) business segment with the emphasis on ensuring that safety on all projects under execution. Your Company is conscious of the importance of environmentally clean and safe operations so as to ensure safety of all concerned and compliance of applicable environmental regulations. The Company as a policy reevaluates safety standards and practices from time to time in order to raise the bar of safety standards for its people as well as users and customers.
RECOGNITION
Yours Companyâs manufacturing facilities continue to remain certified by independent and reputed external agency as being compliant as well as aligned with the external standards for Quality Management System ISO 9001:2008, Environmental Management System ISO 14001:2004 and Occupational Health and Safety Management System OHSAS 18001:2007. During the year, the audits for these Certifications established continuous improvement in performance against these standards.
During the year under review, your Company successfully obtained certification under ISO 90001:2008/TL9000 R5.5/R/5.0H Standards from Bureau Veritas for design, manufacture and supply of optical fibre cable which reflects capabilities of the Company to manufacture and supply products covered by the certification by adhering to global standards.
DIRECTORS
In accordance with the provisions of Section 152 of the Companies Act, 2013 and the Companyâs Articles of Association, Shri Pracheta Majumdar (DIN:00179118), Director, shall retire by rotation at the ensuing Annual General Meeting and being eligible, has offered himself for re-appointment as a Director of the Company. The Board recommends his re-appointment for the consideration of the members of the Company at the ensuing Annual General Meeting.
The brief resume and other details of Director seeking re-appointment as required under Regulation 36(3) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 are given in the Notice of the ensuing Annual General Meeting, which is being sent to the shareholders along with Annual Report.
During the year under review, there was no change in the Board of Directors of the Company.
KEY MANAGERIAL PERSONNEL
Shri Y.S. Lodha, Managing Director & CEO, Shri Saurabh Chhajer, Chief Financial Officer and Shri Raj Kumar Agarwal, Vice President (Commercial) & Secretary are the Key Managerial Personnel of the Company. During the year under review, Shri Ashok Mishra has resigned as Company Secretary with effect from close of business hours on January 10, 2017 and Shri Raj Kumar Agarwal has been appointed as Vice President (Commercial) & Secretary with effect from January 11, 2017.
DECLARATION BY INDEPENDENT DIRECTORS
All Independent Directors of your Company viz. Shri J.Veeraraghavan, Shri S.K.Misra, Shri R.C.Tapuriah, Shri Shiv Dayal Kapoor and Smt.Kiran Aggarwal have individually and severally given a declaration pursuant to Section 149(7) of the Companies Act, 2013, affirming compliance to the criteria of Independence as laid down under Section 149(6) of the Companies Act, 2013. Based on the declaration(s) of
Independent Directors, the Board of Directors recorded its opinion that all Independent Directors are independent of the Management and have fulfilled the conditions as specified under the governing provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements), Regulations, 2015.
MEETINGS OF BOARD AND COMPOSITION OF COMMITTEES
During the year under review, the Board met six times viz. on May 19, 2016, July 12, 2016, August 11, 2016, November 11, 2016, January 3, 2017 and February 10, 2017.
As required under Section 177(8) read with Section 134(3) of the Companies Act, 2013, and the rules framed there under, the composition and meetings of the Audit Committee were in line with the provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, details of which along with composition, number of meetings of all other Board Committees held during the year under review and attendance at the meetings are provided in the Report on Corporate Governance, forming a part of the Annual Report. During the year under review, all the recommendations of the Audit Committee were accepted by the Board of Directors.
PERFORMANCE EVALUATION OF BOARD, COMMITTEES & DIRECTORS
Pursuant to the Provisions of the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and the Guidance Note on Board evaluation issued by SEBI, the Board of Directors of the Company carried out the formal annual evaluation of its own performance and that of its Committees and individual Directors, interalia, to assess the skill set and contribution that are desired, recognizing that competencies and experiences evolves over time. The evaluation process also covered various aspects of the Board functioning such as composition of the Board and its Committees, experience and competencies, performance of specific duties and obligations, governance issues, etc. The process was conducted by allowing the Board to engage in candid discussions with each Director with the underlying objective of taking best possible decisions in the interest of the Company and its stakeholders. The Directors were individually evaluated on well defined parameters which, interalia, comprised of level of engagement and their contribution to strategic planning and other criteria based on performance and personal attributes of the Directors. During the process of evaluation, the Board of Directors also considered the criteria for evaluation of performance of Independent Directors and the Board of Directors formulated by the Nomination and Remuneration Committee. The Board of Directors also reviewed and discussed the annual performance evaluation of Directors carried out by the Nomination and Remuneration Committee and review of the performance of the Chairman (taking into account the views of non-executive directors and the Managing Director), the Non-independent Directors and the Board as a whole carried out by the Independent Directors. In conclusion, the Board of Directors and Nomination and Remuneration Committee were satisfied with the performance and functioning of the Board, its Committees and individual members. A statement indicating the manner, in which formal annual evaluation has been made by the Board of Directors, is given in the Report on Corporate Governance which forms a part of the Annual Report.
SELECTION AND APPOINTMENT OF DIRECTORS AND THEIR REMUNERATION
The Board of Directors in consonance with the recommendation of Nomination and Remuneration Committee (NRC) has adopted a terms of reference which, interalia, deals with the criteria for identification of members of the Board of Directors and selection/appointment of the Key Managerial Personnel/Senior Management Personnel of the Company. The NRC recommends appointment of Director/appointment or re-appointment of Managing Director based on their qualifications, expertise, positive attributes and independence in accordance with prescribed provisions of the Companies Act, 2013 and rules framed there under and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The NRC, in addition to ensuring diversity of race and gender, also considers the impact the appointee would have on Boardâs balance of professional experience, background, view points, skills and areas of expertise.
The Board of Directors in consonance with the recommendation of Nomination and Remuneration Committee has also adopted the Remuneration Policy for the members of the Board and Executive Management. The guiding principles of the Remuneration Policy are stated in the Report on Corporate Governance, which forms a part of the Annual Report.
VIGIL MECHANISM / WHISTLE BLOWER POLICY
In terms of the provisions of Section 177(9) of the Companies Act, 2013, the Company has implemented a Vigil Mechanism which includes implementation of the Whistle Blower Policy to deal with instances of fraud and mis-management, if any, and conducting business with integrity, including in accordance with all applicable laws and regulations. No employee has been denied access to the Vigilance Officer as well as Chairman of the Audit Committee. The details of the Vigil Mechanism and Whistle-Blower Policy are explained in the Corporate Governance Report and also posted on the website of the Company.
AUDITORS
Messrs V. Sankar Aiyar & Co., Chartered Accountants (Registration No.109208W), were appointed as Statutory Auditors to hold office for a term of 5 (five) years until the conclusion of thirty seventh Annual General Meeting of the Company to be held for the financial year 2019-20, subject to ratification of their appointment as such by the members at every Annual General Meeting. They have confirmed to the Company that their appointment, if ratified by the members at the ensuing thirty fourth Annual General Meeting, would be according to the terms and conditions prescribed under Section(s) 139 and 141 of the Companies Act, 2013 and rules framed there under and that they are not disqualified for appointment as Auditors within the meaning of the said Act, The Chartered Accountants Act, 1949 and the rules and regulations made there under.
The Board of Directors has re-appointed Messrs D. Sabyasachi & Co., Cost Accountants, as Cost Auditors for conducting audit of the accounting records maintained by the Company in respect of specified products of the Company covered under The Companies (Cost Records and Audit) Amendment Rules, 2014 and fixed their remuneration based on the recommendation of the Audit Committee. The remuneration payable to Cost Auditors is subject to ratification by the shareholders in the ensuing Annual General Meeting of the Company.
AUDITORSâ REPORT
The Auditorsâ Report on the financial statements of the Company forms a part of the Annual Report. There is no qualification, reservation, adverse remark, disclaimer or modified opinion in the Auditorsâ Report, which calls for any further comments or explanations. Further, during the year under review, the Auditors have not reported any matter under Section 143(12) of the Companies Act, 2013, therefore, no detail is required to be disclosed in pursuance to Section 134(3)(ca) of the Companies Act, 2013.
SECRETARIAL AUDITOR
Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, Messrs R.K.Mishra & Associates, Company Secretaries (PCS Registration no.14474) were appointed to undertake the Secretarial Audit of the Company for the year ended March 31, 2017. The Report of the Secretarial Auditor is given in Annexure-ll, which is attached hereto and forms a part of the Directorsâ Report.
No qualification or observation or other remarks have been made by Messrs R.K.Mishra & Associates in the Secretarial Audit Report, which calls for any comments or explanations.
RELATED PARTY TRANSACTIONS
All related party transactions that were entered into by the Company during the financial year under review were generally on armsâ length basis and in the ordinary course of business. The disclosure of related party transactions as required under Section 134(3)(h) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 in prescribed Form AOC-2 is given in Annexure III, which is attached hereto and forms a part of the Directorsâ Report. There are no material significant related party transactions entered into by the Company with its Promoters, Directors, Key Managerial Personnel or other designated persons, which may have a potential conflict with the interest of the Company at large.
All related party transactions are placed before the meeting(s) of Audit Committee for its approval. Prior omnibus approval of the Audit Committee is obtained on an annual basis, for a financial year, for the transactions which are of a foreseen and repetitive in nature. The statement giving details of all related party transactions entered into pursuant to the omnibus approval together with relevant documents/ information are placed before the Audit Committee for review and updation on quarterly basis. The Companyâs Policy on materiality of Related Party Transactions and dealing with Related Party Transactions, as approved by the Board of Directors, is uploaded on the Companyâs website and can be accessed at web link: http://www.vtlrewa.com/pdf/ RPTPolicy%20_VTL.pdf.
SUBSIDIARIES, ASSOCIATE AND JOINT VENTURE(S)
Your Company has three wholly owned subsidiaries namely August Agents Limited, Insilco Agents Limited and Laneseda Agents Limited. None of the subsidiary companies is a material non-listed Indian Subsidiary company as defined under Regulation 24(1) of the SEBI (Listing Obligations and Disclosure Requirements), Regulations, 2015. During the year under review there was no change in the number of subsidiaries or in nature of business of subsidiaries. The subsidiaries have achieved satisfactory financial performance during the year under review.
Birla Cable Limited (Formerly Birla Ericsson Optical Limited) ceased to be an associate and joint venture company with effect from August 24, 2016 upon termination of Joint Venture Agreement entered into by your Company along with Universal Cables Ltd. and Ericsson Cable AB, Sweden followed by the divestment of the entire shareholding of the overseas co-promoter, Ericsson Cables AB, Sweden in favour of Indian co-promoters.
Birla Visabeira Private Limited, an existing joint venture company engaged primarily in EPC and Operation & Maintenance business in certain specific areas in the telecommunications and power infrastructure segments, is in the process of bidding for certain niche projects in India in the relevant fields. The joint ventureâs financial performance was in consonance with planned business strategy.
Universal Cables Ltd. (UCL), an Associate company within the meaning of Section 2(6) of the Companies Act, 2013 read with definition of the term âAssociateâ as per Accounting Standard (AS)-23, achieved sustained growth in business with improved financial performance during the year under review.
A Statement containing the salient features of the financial statements of subsidiaries, an associate company and a joint venture as prescribed under the first proviso to sub-section (3) of section 129 of the Companies Act, 2013 read with rule 5 of The Companies (Accounts) Rules, 2014 is attached and forms a part of the Annual Report.
A report on the performance of financial position of each of three wholly owned subsidiaries, an associate company and a joint venture company, as per the provisions of the Companies Act, 2013 is provided as part of the consolidated financial statements and hence not repeated herein for the sake of brevity.
CONSOLIDATED FINANCIAL STATEMENTS
In accordance with the applicable provisions of the Companies Act, 2013 and the rules and regulations made there under, read with Accounting Standard (AS)-21 âConsolidated Financial Statementsâ, Accounting Standard (AS)-27 âFinancial Reporting of Interests in Joint Ventureâ and Accounting Standard (AS)-23 âAccounting for Investments in Associates in Consolidated Financial Statementsâ, the audited Consolidated Financial Statements of the Company as of and for the year ended March 31, 2017, forms a part of the Annual Report. The Financial Statements of subsidiary companies have been prepared in the same form and manner as that of the Company.
PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS UNDER SECTION 186 OF THE COMPANIES ACT, 2013
The particulars of Loans, Guarantees and Investments in pursuance to Section 186 of the Companies Act, 2013 have been disclosed in the financial statements read together with Notes annexed to and forming an integral part of the financial statements.
DISCLOSURE OF RATIO OF REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL, ETC.
As required under Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Statement of Disclosure of Remuneration and such other details as prescribed therein are given in Annexure-IV, which is attached hereto and forms a part of the Directorsâ Report.
EXTRACT OF ANNUAL RETURN
An Extract of Annual Return as provided under Section 92(3) of the Companies Act, 2013 is given in Annexure-V, which is attached hereto and forms a part of the Directorsâ Report.
PARTICULARS OF EMPLOYEES
The information required pursuant to Section 197 of the Companies Act, 2013, read with Rule 5(2) of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of an employee of the Company are given in Annexure-VI, which is attached hereto and forms a part of the Directorsâ Report.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNING AND OUTGO
As required under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of The Companies (Accounts) Rules, 2014, the information on Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo are given in Annexure-VII, which is attached hereto and forms a part of the Directorsâ Report.
GENERAL
Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions or events on these items during the year under review:
(a) The Company has neither issued shares with differential rights as to dividend, voting or otherwise nor has granted stock options or sweat equity under any scheme. Further, none of the Directors of the Company holds investments convertible into equity shares of the Company as on March 31, 2017.
(b) The Managing Director of the Company does not receive any remuneration or commission from any of the subsidiaries of the Company.
(c) No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status of the Company and its operations in future.
(d) The Company has zero tolerance towards sexual harassment at workplace and has adopted a Policy on prevention, prohibition and redressal of sexual harassment at workplace in line with the requirements of The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, and Rules made there under. During the year under review, there were no cases filed or reported pursuant to the provisions of the said Act.
(e) There are no material changes or commitments affecting the financial position of the Company, which have occurred between the end of the financial year of the Company to which the financial statements relate and the date of this Report.
(f) No frauds were reported by Auditors in terms of Section 143(2) of the Companies Act, 2013 and rules, if any, made there under.
ACKNOWLEDGEMENT
The Board desires to place on record its grateful appreciations for the excellent assistance and co-operation received from the State Government and continued support extended to the Company by the bankers, investors, vendors and esteemed customers and other business associates/institutions. Your Directors also wish to place on record their sincere thanks and infinite appreciations to all the employees of the Company for their unstinted commitment and continued contribution in the performance of the Company.
Yours faithfully,
Harsh V.Lodha Chairman
(DIN: 00394094)
J.Veeraraghavan k
(DIN: 00078998)
S.K.Misra
(DIN: 00009411)
R.C.Tapuriah
(DIN: 00395997)
D.R.Bansal Directors
(DIN: 00050612)
Shiv Dayal Kapoor
(DIN: 00043634)
Kiran Aggarwal
(DIN: 06991807) /
Y.S.Lodha Managing Director
(DIN: 00052861)
New Delhi, May 15, 2017
Mar 31, 2016
TO THE SHAREHOLDERS
The Directors have the pleasure of presenting their Thirty Third Annual Report, together with the Audited Financial Statements of the Company for the year ended March 31, 2016.
SUMMARY OF FINANCIAL RESULTS & STATE OF COMPANYâS AFFAIRS
|
2015-16 |
2014-15 |
|
|
Rs. in lacs |
Rs. in lacs |
|
|
Revenue from Operations (Gross) |
102806.84 |
69606.32 |
|
Other Income |
1788.18 |
1023.45 |
|
104595.02 |
70629.77 |
|
|
The yearâs working shows a - |
||
|
Profit before Depreciation, Exceptional Item and Tax |
13377.17 |
7497.38 |
|
Less : Depreciation and Amortization expense |
1317.37 |
1005.33 |
|
: Exceptional Item |
477.76 |
- |
|
Profit before Tax |
11582.04 |
6492.05 |
|
Less : Tax Expense/(Credit) : Current Tax/Minimum Alternate Tax (MAT) |
||
|
(Net of MAT Credit Entitlement, if any) |
3772.55 |
295.17 |
|
- Deferred Tax Charge |
74.78 |
412.02 |
|
Net Profit for the Year |
7734.71 |
5784.86 |
GENERAL & CORPORATE MATTERS
During the year under review, your Company delivered a robust financial performance and set new records both in terms of an all-time high Revenue and highest ever Profit from Operations, when viewed in the backdrop of highly competitive and challenging business environment prevailing in the industry. Gross revenue from operations for the year grew by around 48% to Rs.102806.84 lacs as compared to Rs.69606.32 lacs during the previous year driven by higher sales revenue in both Cables and EPC business segments. The Exports revenue including project exports, stood at Rs.7227.58 lacs during the year under review as compared to Rs.7038.61 lacs for the previous year. Despite a significant increase in finance costs with interest rates remaining at elevated levels throughout the year, the Profit (before depreciation, exceptional item and tax) for the year increased by around 80 % and stood at Rs.13377.17 lacs as compared to Rs.7497.38 lacs in the previous year primarily resulting from increased revenue from both i.e. Cables and EPC business segments and better products mix. The EPC business segment has displayed stellar financial performance both in terms of Revenue which has increased by approx.173% to Rs.55336.36 lacs, as well as profitability, which has significantly improved owing to strong execution capabilities by way of adhering to disciplined project implementation methodologies. It is noteworthy to report that the Company has developed robust skill and knowledge required for executing complex telecommunication cable network projects meeting the world class network design, engineering and construction standards. The outlook for current primary business verticals of the EPC business segment, viz. Telecom, Power and Sewerage pipeline and/or treatment, remains reasonably positive in the current year with comfortable order book in hand and more projects in the horizon.
During the year under review, your Company consolidated its position further in the telecom cable industry and launched various new innovative and cost competitive products to serve the existing and new end users. To keep pace with the latest technological advancements in the industry, your Company continued to upgrade the technology involved in various processes and systems to derive cost advantages and also to maintain its leadership position in terms of products offering.
Overall, the domestic telecom industry as a whole is expected to grow at decent levels when compared to global trends. As a committed long term telecom cable industry player, your Company has already taken steps to leverage the status of a leading end to end total solution provider in telecom cables to other business verticals like power distribution/transmission, sewerage pipelines besides incidental and allied projects thereby positioning the Company as an infrastructure solution provider in the related business verticals. The Company now has to its credit reasonable credentials, qualifying it to bid for bigger turn-key projects to drive the growth potential to greater heights in the years to come. Armed with complete product portfolio in the value chain, your Company is geared up to take on the competition by offering complete solutions in terms of both products and services to serve the customers in a best suited manner. The Company is also well positioned to cater to the ever increasing needs of the telecom service providers for mobile and fixed line network expansion in this era of huge data boom especially for building networks with optical fibre in the backbone, metro, access and last mile segments.
DIVIDEND AND RESERVES
After considering the Companyâs profitability, free cash flow and overall financial performance, the Board of Directors of the Company is pleased to recommend a Dividend of Rs.6/- (previous year Rs.5/-) per equity share of face value Rs.10/- each (i.e. 60%) for the financial year ended on March 31, 2016. The distribution of Dividend on equity shares, if approved by the Members at the ensuing Annual General Meeting, will result in payout of Rs. 711.05 lacs excluding Tax on Dividend and Surcharge/Education Cess thereon. Your Board also proposed to transfer Rs. 7000.00 lacs to the General Reserve out of the amount available for appropriation leaving a surplus of Rs. 6321.51 lacs in the statement of Profit and Loss to be carried forward.
DEPOSITS/FINANCE
Your Company has not accepted any public deposits during the year within the meaning of Section(s) 73 to 76 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014 and as such no amount on account of principal or interest on public deposits was outstanding as on the date of the Balance Sheet.
Your Company continued to optimize bank borrowings during the year by focusing on cash flows and working capital management. By availing alternate funding options like issuance of Commercial Papers, your Company ensured efficiency in its borrowing costs.
CORPORATE GOVERNANCE
Pursuant to Regulation 34(3) read with Para C of Schedule V of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Management Discussion and Analysis, Report on Corporate Governance and a Certificate by the Managing Director (CEO) confirming compliance by all the Board Members and Senior Management Personnel with Companyâs Code of Conduct and Auditorsâ Certificate regarding compliance of conditions of Corporate Governance are made a part of the Annual Report.
CORPORATE SOCIAL RESPONSIBILITY INITIATIVES
As a part of its initiative under Corporate Social Responsibility (CSR), the Company has undertaken CSR activities in the areas of (i) promoting education and employment enhancing skills, (ii) making available safe drinking water, (iii) ensuring environment sustainability through green land development, (iv) measures undertaken for the benefit of armed forces veterans, war widows and their dependents, and (v) conservation of natural resources, in the area where the Company operates. These activities are largely in accordance with Schedule VII of the Companies Act, 2013 read with the Companies (Corporate Social Responsibility Policy) Rules, 2014 and the Companyâs CSR Policy. The CSR activities during the year were implemented through Madhav Prasad Priyamvada Birla Apex Charitable Trust, a registered trust under Section 12A of the Income Tax Act, 1961.
The Annual Report on CSR activities is given in Annexure-I, which is attached hereto and forms a part of the Directorsâ Report. The Corporate Social Responsibility Policy of the Company is available on the website of the Company i.e. www.vtlrewa.com.
DIRECTORSâ RESPONSIBILITY STATEMENT
To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statements in terms of Section 134(3)(c) of the Companies Act, 2013:
(a) that in the preparation of the annual financial statements for the year ended March 31, 2016, the applicable accounting standards read with requirements set out under Schedule III to the Companies Act, 2013, have been followed and there are no material departures from the same;
(b) that such accounting policies as mentioned in Notes to the Financial Statements have been selected and applied consistently and judgment and estimates have been made 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, 2016 and the profit of the Company for the year ended on that date;
(c) that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
(d) that the annual financial statements have been prepared on a going concern basis;
(e) that proper internal financial controls were in place and that the financial controls were adequate and were operating effectively; and
(f) that system to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.
RISK MANAGEMENT AND ADEQUACY OF INTERNAL FINANCIAL CONTROLS
The Companyâs system of financial and compliance controls with reference to the financial statements and risk management is embedded in the business process by which the Company pursues its objectives. Additionally, the Audit Committee and the Board of Directors assess the implementation of risk management and risk mitigation measures through their review of potential risks which could negatively impact the operations, the proposed budget and plan, the Companyâs strategic framework besides inherent risks associated with the products/goods dealt with by the Company as well as execution of turnkey projects of EPC business segment. Your Companyâs approach to address business risks is comprehensive and includes periodic review of such risks and a framework for mitigating and reporting mechanism of such risks. In the view of the Board of Directors, there are no material risks, which may threaten the existence of the Company.
The Board of Directors of the Company has laid down the policies and procedures for internal financial controls to be followed by the Company for ensuring the orderly and efficient conduct of its business, in order to achieve the strategic, operational and other objectives over a long period and that its exposure to risks are within acceptable limits decided by the Board. In addition, the policies and procedures have been designed with an intent to ensure safeguarding of Companyâs assets, the prevention and detection of frauds and errors, the accuracy in completeness of the accounting records and the timely preparation of reliable financial information.
The management is committed to ensure effective internal financial controls environment, which provides assurance on the efficiency of its business operations coupled with adherence to its established policies, safety/security of its assets besides orderly and legitimate conduct of Companyâs business in the circumstances, which may reasonably be foreseen. The Company has defined organization structure, authority levels, delegated powers, internal procedures, rules and guidelines for conducting business transactions. The Companyâs system and process relating to internal controls and procedures for financial reporting have been designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with Generally Accepted Accounting Principles (GAAP) in India, the Companies Act, 2013 and rules framed there under and all other applicable regulatory/statutory guidelines, etc. for disclosure with reference to financial statements.
Your Companyâs internal control systems are supplemented by an extensive program of internal audit by an independent firm of Chartered Accountants. Internal audits are conducted at regular intervals and a summary of the observations and recommendations of such audits are placed before the Audit Committee. The Internal Auditors, the Audit Committee as well as the Board of Directors conduct an evaluation of the adequacy and effectiveness of the system of internal financial controls system on an ongoing basis.
INDUSTRIAL RELATIONS AND SAFETY
Industrial relations remained cordial throughout the year. Your Directors recognize and appreciate the sincere and hard work, loyalty, dedicated efforts and contribution of all the employees in the growth and performance of the Company during the year.
The Company continues to accord a very high priority to both industrial safety and environmental protection and these are ongoing process at the Companyâs plant and facilities to maintain high awareness levels. The Company has also stressed the need to adopt the highest safety standards on projects undertaken by the Engineering, Procurement and Construction (EPC) business segment with the emphasis on ensuring that safety on all projects under execution are given a great deal of importance. The Company is conscious of the importance of environmentally clean and safe operations so as to ensure safety of all concerned and compliance of applicable environmental regulations. The Company as a policy re-evaluates safety standards and practices from time to time in order to raise the bar of safety standards for its people as well as users and customers.
RECOGNITION
The Companyâs manufacturing facilities continue to remain certified by independent and reputed external agency as being compliant as well as aligned with the external standards for Quality Management System ISO 9001:2008, Environmental Management System ISO 14001:2004 and Occupational Health and Safety Management System OHSAS 18001:2007. During the year, the audits for these Certifications established continuous improvement in performance against these standards.
DIRECTORS
In accordance with the provisions of Section 152 of the Companies Act, 2013 and the Companyâs Articles of Association, Shri Harsh V. Lodha [DIN 00394094], Director, shall retire by rotation at the ensuing Annual General Meeting and being eligible, has offered himself for re-appointment as a Director of the Company. The Board recommends his re-appointment for the consideration of the members of the Company at the ensuing Annual General Meeting.
The brief resume and other details of Director seeking re-appointment as required under Regulation 36(3) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 are given in the Notice of the ensuing Annual General Meeting, which is being sent to the shareholders along with Annual Report.
During the year under review, there was no change in the Board of Directors of the Company.
KEY MANAGERIAL PERSONNEL
Shri Y.S. Lodha, Managing Director & CEO, Shri Saurabh Chhajer, Chief Financial Officer and Shri Ashok Mishra, Company Secretary are the Key Managerial Personnel of the Company. During the year under review, there was no change in the Key Managerial Personnel of the Company.
DECLARATION BY INDEPENDENT DIRECTORS
All Independent Directors of your Company viz. Shri J.Veeraraghavan, Shri S.K.Misra, Shri R.C.Tapuriah, Shri Shiv Dayal Kapoor and Smt.Kiran Aggarwal have individually and severally given a declaration pursuant to Section 149(7) of the Companies Act, 2013, affirming compliance to the criteria of Independence as laid down under Section 149(6) of the Companies Act, 2013. Based on the declaration(s) of Independent Directors, the Board of Directors recorded its opinion that all Independent Directors are independent of the Management and have fulfilled the conditions as specified under the governing provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements), Regulations, 2015.
MEETINGS OF BOARD AND COMPOSITION OF COMMITTEES
During the year under review, the Board met four times viz. on May 16, 2015, August 11, 2015, November 6, 2015 and February 9, 2016.
As required under Section 177(8) read with Section 134(3) of the Companies Act, 2013, and the rules framed there under, the composition and meetings of the Audit Committee were in line with the provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, details of which along with composition, number of meetings of all other Board Committees held during the year under review and attendance at the meetings are provided in the Report on Corporate Governance, forming a part of the Annual Report. During the year under review, all the recommendations of the Audit Committee were accepted by the Board of Directors.
PERFORMANCE EVALUATION OF BOARD, COMMITTEES & DIRECTORS
Pursuant to the Provisions of the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board of Directors of the Company carried out the formal annual evaluation of its own performance and that of its Committees and individual Directors, interlaid, to assess the skill set and contribution that are desired, recognizing that competencies and experiences evolves over time. The process was conducted by allowing the Board to engage in candid discussions with each Director with the underlying objective of taking best possible decisions in the interest of the Company and its stakeholders. The Directors were individually evaluated based on personal interaction to ascertain feedback on well defined parameters which, interlaid, comprised of level of engagement and their contribution to strategic planning and other criteria based on performance and personal attributes of the Directors. During the process of evaluation, the Board of Directors also considered the criteria for evaluation of performance of Independent Directors and the Board of Directors formulated by the Nomination and Remuneration Committee. The Board of Directors also reviewed and discussed the annual performance evaluation of Directors carried out by the Nomination and Remuneration Committee and review of the performance of the Chairman (taking into account the views of non-executive directors and Managing Director), the Non-independent Directors and the Board as a whole carried out by the Independent Directors. A statement indicating the manner, in which formal annual evaluation has been made by the Board of Directors, is given in the Report on Corporate Governance which forms a part of the Annual Report.
SELECTION AND APPOINTMENT OF DIRECTORS AND THEIR REMUNERATION
The Board of Directors in consonance with the recommendation of Nomination and Remuneration Committee (NRC) has adopted a terms of reference which, interlaid, deals with the criteria for identification of members of the Board of Directors and selection/ appointment of the Key Managerial Personnel/Senior Management Personnel of the Company. The NRC recommends appointment of Director/appointment or re-appointment of Managing Director based on their qualifications, expertise, positive attributes and independence in accordance with prescribed provisions of the Companies Act, 2013 and rules framed there under and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The NRC, in addition to ensuring diversity of race and gender, also considers the impact the appointee would have on Boardâs balance of professional experience, background, view points, skills and areas of expertise.
The Board of Directors in consonance with the recommendation of Nomination and Remuneration Committee has also adopted the Remuneration Policy for the members of the Board and Executive Management. The guiding principles of the Remuneration Policy are stated in the Report on Corporate Governance, which forms a part of the Annual Report.
VIGIL MECHANISM / WHISTLE BLOWER POLICY
In terms of the provisions of Section 177(9) of the Companies Act, 2013, the Company has implemented a Vigil Mechanism which includes implementation of the Whistle Blower Policy to deal with instances of fraud and mis-management, if any, and conducting business with integrity, including in accordance with all applicable laws and regulations. No employee has been denied access to the Vigilance Officer as well as Chairman of the Audit Committee. The details of the Vigil Mechanism and Whistle-Blower Policy are explained in the Corporate Governance Report and also posted on the website of the Company.
AUDITORS
Messrs V. Sankar Aiyar & Co., Chartered Accountants (Registration No.109208W), were appointed as Statutory Auditors to hold office for a term of 5 (five) years until the conclusion of thirty seventh Annual General Meeting of the Company to be held for the financial year 2019-20, subject to ratification of their appointment as such by the members at every Annual General Meeting. They have confirmed to the Company that their appointment, if ratified by the members at the ensuing thirty third Annual General Meeting, would be according to the terms and conditions prescribed under Section(s) 139 and 141 of the Companies Act, 2013 and rules framed there under and that they are not disqualified for appointment as Auditors within the meaning of the said Act, The Chartered Accountants Act, 1949 and the rules and regulations made there under.
The Board of Directors has re-appointed Messrs D. Sabyasachi & Co., Cost Accountants, as Cost Auditors for conducting audit of the cost records/accounts maintained by the Company in respect of specified products of the Company covered under the Companies (Cost Records and Audit) Amendment Rules, 2014 and fixed their remuneration based on the recommendation of the Audit Committee. The remuneration payable to Cost Auditors is subject to ratification by the shareholders in the ensuing Annual General Meeting of the Company.
AUDITORSâ REPORT
The Auditorsâ Report on the financial statements of the Company forms a part of the Annual Report. There is no qualification, reservation, adverse remark, disclaimer or modified opinion in the Auditorsâ Report, which calls for any further comments or explanations. Further, during the year under review, the Auditors have not reported any matter under Section 143(12) of the Companies Act, 2013, therefore, no detail is required to be disclosed in pursuance to Section 134(3)(ca) of the Companies Act, 2013.
SECRETARIAL AUDITOR
Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, Messrs R.K.Mishra & Associates, Company Secretaries (PCS Registration no.14474) were appointed to undertake the Secretarial Audit of the Company for the year ended March 31, 2016. The Report of the Secretarial Auditor is given in Annexure-II, which is attached hereto and forms a part of the Directorsâ Report.
No qualification or observation or other remarks have been made by Messrs R.K.Mishra & Associates in the Secretarial Audit Report, which calls for any comments or explanations.
RELATED PARTY TRANSACTIONS
All related party transactions that were entered into by the Company during the financial year under review were on armsâ length basis and in the ordinary course of business. The disclosure of related party transactions as required under Section 134(3)(h) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 in prescribed Form AOC-2 is given in Annexure-III, which is attached hereto and forms a part of the Directorsâ Report. There are no material significant related party transactions entered into by the Company with its Promoters, Directors, Key Managerial Personnel or other designated persons, which may have a potential conflict with the interest of the Company at large.
All related party transactions are placed before the meeting(s) of Audit Committee for its approval. Prior omnibus approval of the Audit Committee is obtained on an annual basis, for a financial year, for the transactions which are of a foreseen and repetitive in nature. The statement giving details of all related party transactions entered into pursuant to the omnibus approval together with relevant documents/information are placed before the Audit Committee for review and updating on quarterly basis. The Companyâs Policy on materiality of Related Party Transactions and dealing with Related Party Transactions, as approved by the Board of Directors, is uploaded on the Companyâs website and can be accessed at we blink: http://www.vtlrewa.com/pdf/ RPTPolicy%20_ VTL.pdf.
SUBSIDIARIES, ASSOCIATE AND JOINT VENTURES
The Company has three wholly owned subsidiaries namely August Agents Limited, Insilco Agents Limited and Laneseda Agents Limited. None of the subsidiary companies is a material non-listed Indian Subsidiary company as defined under Regulation 24(1) of the SEBI (Listing Obligations and Disclosure Requirements), Regulations, 2015. During the year under review there was no change in the number of subsidiaries or in nature of business of subsidiaries.
Birla Ericsson Optical Limited, an existing joint venture company, established in pursuance to a Joint Venture Agreement entered into by your Company along with Universal Cables Ltd. and Ericsson Cables AB, Sweden and engaged in the business of manufacturing and sales of Telecommunication Cables and other types of specialty wire and cables has achieved satisfactory financial performance. During the year under review, a new company in the name and style of âBirla Visabeira Private Limitedâ, was incorporated as a joint venture company on September 15, 2015, in pursuance to a Joint Venture Agreement entered into by and between your Company and Visabeira Global SGPS., SA, Portugal with the main objectives of undertaking project business for network engineering services, construction of infrastructure, installation of networks, specialized consultancy services, operation and maintenance, etc. in certain specific areas in the telecommunications and power infrastructure segments in India and abroad. The Company is in the process of bidding for certain niche projects in India.
During the year under review, Universal Cables Ltd. has been classified as an Associate Company within the meaning of Section 2(76) of the Companies Act, 2013 read with definition of the term âAssociateâ as per Accounting Standard (AS)-23 âAccounting for Investments in Associates in Consolidated Financial Statementsâ with effect from May 15, 2015 and accordingly, the financial statements of said Associate has been dealt with in the consolidated financial statements of the Company as per equity method as provided in the said Accounting Standard.
A Statement containing the salient features of the financial statements of subsidiaries, an associate company and joint venture companies as prescribed under the first proviso to sub-section (3) of section 129 of the Companies Act, 2013 read with rule 5 of the Companies (Accounts) Rules, 2014 is attached and forms a part of the Annual Report.
A report on the performance of financial position of each of three wholly owned subsidiaries, an associate company and two joint venture companies, as per the provisions of the Companies Act, 2013 is provided as part of the consolidated financial statements and hence not repeated herein for the sake of brevity.
CONSOLIDATED FINANCIAL STATEMENTS
In accordance with the applicable provisions of the Companies Act, 2013 and the rules and regulations made there under, read with Accounting Standard (AS)-21 âConsolidated Financial Statementsâ, Accounting Standard (AS)-27 âFinancial Reporting of Interests in Joint Ventureâ and Accounting Standard (AS)-23 âAccounting for Investments in Associates in Consolidated Financial Statementsâ, the audited Consolidated Financial Statements of the Company as of and for the year ended March 31, 2016, forms a part of the Annual Report. The Financial Statements of subsidiary companies have been prepared in the same form and manner as that of the Company.
PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS UNDER SECTION 186 OF THE COMPANIES ACT, 2013
The particulars of Loans, Guarantees and Investment in pursuance to Section 186 of the Companies Act, 2013 have been disclosed in the financial statements read together with Notes annexed to and forming an integral part of the financial statements.
DISCLOSURE OF RATIO OF REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL, ETC.
As required under Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Statement of Disclosure of Remuneration and such other details as prescribed therein are given in Annexure-IV, which is attached hereto and forms a part of the Directorsâ Report.
EXTRACT OF ANNUAL RETURN
An Extract of Annual Return as provided under Section 92(3) of the Companies Act, 2013 is given in Annexure-V, which is attached hereto and forms a part of the Directorsâ Report.
PARTICULARS OF EMPLOYEES
The information required pursuant to Section 197 of the Companies Act, 2013, read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of an employee of the Company are given in Annexure-VI, which is attached hereto and forms a part of the Directorsâ Report.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNING AND OUTGO
As required under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014, the information on Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo are given in Annexure-VII, which is attached hereto and forms a part of the Directorsâ Report.
GENERAL
Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions or events on these items during the year under review:
(a) The Company has neither issued shares with differential rights as to dividend, voting or otherwise nor has granted stock options or sweat equity under any scheme. Further, none of the Directors of the Company holds investments convertible into equity shares of the Company as on March 31, 2016.
(b) The Managing Director of the Company does not receive any remuneration or commission from any of the subsidiaries of the Company.
(c) No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status of the Company and its operations in future.
(d) The Company has zero tolerance towards sexual harassment at workplace and has adopted a Policy on prevention, prohibition and redressed of sexual harassment at workplace in line with the requirements of The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressed) Act, 2013, and Rules made there under. During the year under review, there were no cases filed or reported pursuant to the provisions of the said Act.
(e) There are no material changes or commitments affecting the financial position of the Company, which have occurred between the end of the financial year of the Company to which the financial statements relate and the date of this Report.
ACKNOWLEDGEMENT
The Board desires to place on record its grateful appreciation for the excellent assistance and co-operation received from the State Government and continued support extended to the Company by the bankers, investors, vendors, esteemed customers and other business associates. Your Directors also wish to place on record their sincere thanks and infinite appreciations to all the employees of the Company for their unstinted commitment and continued contribution in the performance of the Company.
Yours faithfully,
Harsh V. Lodha Chairman
(DIN: 00394094)
J. Veeraraghavan (
(DIN: 00078998)
S.K. Misra (DIN:00009411)
R.C. Tapuriah (DIN: 00395997)
D.R. Bansal Directors
(DIN: 00050612)
Shiv Dayal Kapoor (DIN: 00043634)
Kiran Aggarwal (DIN: 06991807)
Y.S. Lodha Managing Director
(DIN: 00052861)
New Delhi, May 19, 2016
Mar 31, 2015
Dear Members,
The Directors have the pleasure of presenting their Annual Report,
together with the Audited Financial Statements of the Company for the
year ended March 31, 2015.
ACCOUNTS & FINANCIAL MATTERS
2014-15 2013-14
Rs. in lacs Rs. in lacs
Revenue from Operations (Gross) 69606.32 45237.86
Other Income 1023.45 636.81
70629.77 45874.67
The year''s working shows a -
Profit before Depreciation and Tax 7497.38 3127.38
Less : Depreciation and Amortisation expense 1005.33 552.82
Profit before Tax 6492.05 2574.56
Less: Current Tax (MAT) (Net of MAT
Credit Entitlement, if any) 295.17 484.25
Income Tax for earlier years - 4.08
Deferred Tax Charge 412.02 -
Net Profit for the year 5784.86 2086.23
GENERAL & CORPORATE MATTERS
During the year under review, your Company has reported a best ever
performance in its history, both in terms of Revenue and Profit from
Operations, when viewed in the context of intensely competitive
landscape prevailing in the industry. Gross revenue from operations for
the year grew by around 54% to Rs.69606.32 lacs as compared to
Rs.45237.86 lacs during the previous year mainly driven by higher sales
revenue in cables business segment. The Exports revenue including
project exports, stood at Rs.7038.61 lacs during the year under review
as compared to Rs 4185.07 lacs for the previous year. Despite a
significant increase in finance costs with interest rates remaining at
elevated levels throughout the year, the Profit (before depreciation
and tax) for the year increased by robust 140% and stood at Rs.7497.38
lacs as compared to Rs.3127.38 lacs in the previous year due to
increased revenue from both i.e. cables and EPC business segments and
better products mix. Although the EPC business segment recorded
comparatively moderate growth in Revenue which increased by approx. 32%
to Rs.20071.01 lacs, its profitability improved substantially owing to
gradual strengthening of execution capabilities and award of a large
project after a long wait in telecom cable networking arena in which
the Company possesses requisites skill and knowledge quotient meeting
the contemporary technological requirements. The current business
verticals of the EPC segment, viz. Telecom, Power and Sewerage pipeline
are now geared up for sustained improvement in performance with
comfortable backlog of orders in hand and in pipeline.
During the year under review, your Company consolidated its position
further in the industry through optimum capacity utilisation and new
products launches as per evolving industry standards. To keep abreast
with the latest trends in the industry, your Company was also vigilant
about technological upgradation of its production facilities, with the
aim of improving assets performance and cost competitiveness.
The domestic telecom cable industry is expected to grow at a reasonable
pace over the medium-term but competitive conditions are likely to
persist. As per conceived strategy, the Company has been fairly
successful in de-risking its business model during last few years from
being a manufacturer of telecommunication cables to a comprehensive
end-to-end solution provider across the broader communications industry
networks besides diversifying into power distribution and sewerage
pipeline projects, etc. The Company''s focus in future, therefore,
shall be to sustain momentum in both the business segments namely,
cables and EPC, by leveraging its inherent strength of products
development as per evolving industry standards and superior project
execution capabilities to drive both the near-term and long-term
growth. With a view to achieve a better value addition in certain niche
telecommunication cable products, the Company has equipped itself for
supplying connectorised cable assemblies for various carrier network
applications and is geared to meet the increasing demand for such
products in the domestic and overseas market places. The recent
spectrum auction by the Government of India will lead to accelerated
investment by telecom operators in data network expansion including
last mile connectivity through deployment of fibre in addition to
rolling out new networks and upgrading the existing ones. The Company,
therefore, envisages a new stream of revenue from Fibre-To-The-Home and
last mile connectivity cable products and accordingly has equipped
itself for manufacturing and supplying products, the full benefit of
which is expected to accrue in future which will further add to the
performance of the Company.
DIVIDEND AND RESERVES
After considering the Company''s profitability, free cash flow and
overall financial performance, the Board of Directors of the Company is
pleased to recommend a Dividend of Rs. 5/- per equity share of Rs.10/-
each (i.e. 50%) for the financial year ended March 31, 2015. The total
quantum of Dividend on equity shares, if approved by the Members, will
be about Rs. 592.54 lacs while about Rs 120.63 lacs will be paid by the
Company towards Tax on Dividend and Surcharge/Education Cess thereon.
Your Board also recommends a transfer to General Reserve of Rs. 1141.15
lacs leaving a surplus of Rs. 6350.48 lacs in the statement of Profit
and Loss to be carried forward.
DEPOSITS
Your Company has not accepted any Deposits within the meaning of
Section 73 to 76 of the Companies Act, 2013 and the Companies
(Acceptance of Deposits) Rules, 2014.
CORPORATE GOVERNANCE
Pursuant to Clause 49 of the Listing Agreement with the Stock
Exchanges, the Management Discussion and Analysis, Report on Corporate
Governance and a Certificate by the Managing Director (CEO) confirming
compliance by all the Board Members and Senior Management Personnel
with Company''s Code of Conduct and Auditors'' Certificate regarding
compliance of conditions of Corporate Governance are made a part of the
Annual Report.
CORPORATE SOCIAL RESPONSIBILITY INITIATIVES
As a part of its initiative under Corporate Social Responsibility
(CSR), the Company has undertaken CSR activities in the areas of
promoting education and employment enhancing skills directed towards
improving the quality of life and increasing the resources of the
surrounding communities, in the area where the Company operates.
These activities are largely in accordance with Schedule VII of the
Companies Act, 2013 and the Companies (Corporate Social Responsibility
Policy) Rules, 2014. The CSR activities during the year were
implemented through Madhav Prasad Priyamvada Birla Apex Charitable
Trust, a registered trust under Section 12A of the Income Tax Act,
1961.
The Annual Report on CSR activities is given in Annexure-I, which is
attached hereto and forms a part of the Directors'' Report.
DIRECTORS'' RESPONSIBILITY STATEMENT
To the best of their knowledge and belief and according to the
information and explanations obtained by them, your Directors make the
following statements in terms of Section 134(3)(c) of the Companies
Act, 2013 :
(a) that in the preparation of the annual financial statements for the
year ended March 31, 2015, the applicable accounting standards read
with requirements set out under Schedule III to the Companies Act,
2013, have been followed and there are no material departures from the
same;
(b) that such accounting policies as mentioned in Notes to the
Financial Statements have been selected and applied consistently and
judgement and estimates have been made 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 the profit of the Company for the year
ended on that date;
(c) that proper and sufficient care has been taken for the maintenance
of adequate accounting records in accordance with the provisions of
Companies Act, 2013 for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities;
(d) that the annual financial statements have been prepared on a going
concern basis;
(e) that proper internal financial controls were in place and that the
financial controls were adequate and were operating effectively;
(f) that system to ensure compliance with the provisions of all
applicable laws were in place and were adequate and operating
effectively.
RISK MANAGEMENT AND ADEQUACY OF INTERNAL FINANCIAL CONTROLS
The Company''s system of financial and compliance controls with
reference to the financial statements and risk management is embedded
in the business process by which the Company pursues its objectives.
Additionally, the Audit Committee and the Board of Directors provide
risk oversight through their review of potential risks which could
negatively impact the operations, the proposed budget and plan, the
Company''s strategic framework and any risks that may negatively
impact it besides inherent risks associated with turnkey projects of
EPC business segment. The management is committed to ensure an
effective internal control environment commensurate with the size,
scale and complexity of the operations, which provides assurance on the
efficiency of the Company''s operations and safety/security of its
assets besides orderly and legitimate conduct of Company''s business
in the circumstances, which may reasonably be foreseen. The Company has
defined organisation structure, authority levels delegated powers,
internal procedures, rules and guidelines for conducting business
transactions.
The Company''s system and process relating to internal controls and
procedures for financial reporting have been designed to provide
reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in
accordance with Generally Accepted Accounting Principles (GAAP) in
India, the Companies Act, 2013 and rules framed thereunder and all
other applicable regulatory / statutory guidelines, etc. for disclosure
with reference to financial statements. The Company''s internal
controls over financial reporting interalia includes the policies and
procedures that pertain to maintenance of records that, in reasonable
detail, accurately and fairly reflect the transactions and dispositions
of assets, provide reasonable assurance that transactions are recorded
as necessary to permit preparation of financial statements in
accordance with GAAP in India and in compliance to other applicable
statutory and regulatory provisions, provide reasonable assurance
regarding prevention or timely detection of unauthorised acquisition,
use or disposition of Company''s assets that could have a material
effect on the financial statements and for preventing and detecting
fraud and other irregularities or deliberate mis-statements. Management
is responsible for establishing and maintaining adequate disclosure
controls and procedures and adequate internal controls over financial
reporting with respect to financial statements besides its
effectiveness in the context of applicable regulations. The Internal
Auditor, the Audit Committee as well as the Board of Directors conduct
from time to time an evaluation of the adequacy and effectiveness of
the system of internal controls for financial reporting with respect to
financial statements.
INDUSTRIAL RELATIONS
Industrial relations remained cordial throughout the year. Your
Directors recognize and appreciate the sincere and hard work, loyalty,
dedicated efforts and contribution of all the employees in the growth
and performance of the Company during the year.
The Company continues to accord a very high priority to both industrial
safety and environmental protection and these are ongoing process at
the Company''s plant and facilities to maintain high awareness levels.
The Company has also stressed the need to adopt the highest safety
standards on Engineering, Procurement and Construction EPC business
segment projects with the emphasis on ensuring that safety on all
projects under execution are given a great deal of importance. The
Company as a policy re-evaluates safety standards and practices from
time to time in order to raise the bar of safety for its people as well
as users and customers.
RECOGNITION
The Company''s manufacturing facilities continue to remain certified
by independent and reputed external agency as being compliant as well
as aligned with the external standards for Quality Management System
ISO 9001:2008 and Environmental Management System ISO 14001:2004.
During the year, the audits for these Certifications established
continuous improvement in performance against these standards.
DIRECTORS
In terms of Section(s) 149, 152 and all other applicable provisions of
the Companies Act, 2013, for the purpose of determining the directors
liable to retire by rotation, the Independent Directors are not
included in the total number of directors of the Company. Accordingly,
Shri D.R.Bansal [DIN 00050612], Director shall retire by rotation at
the ensuing Annual General Meeting and being eligible, has offered
himself for re-appointment as a Director of the Company.
Pursuant to the provisions of Section 161(1) of the Companies Act, 2013
and the Articles of Association of the Company, Smt. Kiran Aggarwal
[DIN 06991807] was appointed as an Additional Director in the category
of Non-executive Independent Director w.e.f. 10thNovember, 2014 and she
holds office as such up to the date of ensuing Annual General Meeting.
Smt. Kiran Aggarwal is not disqualified from being appointed as a
Director in terms of Section 164 of the Companies Act, 2013. The
Company has received requisite notice in writing from a member
proposing her candidature as an Independent Director at the ensuing
Annual General Meeting. Your Board based on the recommendation of the
Nomination and Remuneration Committee recommends appointment of Smt.
Kiran Aggarwal as Independent Director not liable to retire by rotation
for a period of 5 years with effect from 10th November, 2014.
Having regard to the qualifications, wide range of professional
experience and association of Shri Y.S.Lodha [DIN 00052861] with the
Company and considering the overall performance of the Company and its
growth during his tenure, the Board of Directors of the Company based
on recommendation of Nomination and Remuneration Committee has approved
re-appointment and terms of remuneration of Shri Y.S. Lodha as Managing
Director of the Company for a period of five years with effect from 4th
November, 2015 subject to approval of shareholders at the ensuing
Annual General Meeting of the Company.
The details of Directors/Managing Director seeking
appointment/re-appointment as required under Clause 49 of the Listing
Agreement with Stock Exchanges are given in the Notice of the ensuing
Annual General Meeting, which is being sent to the shareholders along
with Annual Report.
KEY MANAGERIAL PERSONNEL
During the year under review Shri R. Radhakrishnan, President
(Commercial) & Secretary retired from the services of the Company
w.e.f. August 14, 2014 consequent to attainment of superannuation as
per Company''s policy. The Board of Directors on the recommendation of
the Nomination and Remuneration Committee appointed two new key
managerial personnel during the year under review viz. Shri Ashok
Mishra as Company Secretary w.e.f. August 14, 2014 and Shri Saurabh
Chhajer as Chief Financial Officer w.e.f. February 7, 2015.
DECLARATION BY INDEPENDENT DIRECTORS
All Independent Directors of your Company viz. Shri J.Veeraraghavan,
Shri S.K.Misra, Shri R.C.Tapuriah, Shri Shiv Dayal Kapoor and Smt.Kiran
Aggarwal have individually and severally given a declaration pursuant
to Section 149(7) of the Companies Act, 2013 affirming compliance to
the criteria of Independence as laid down under Section 149(6) of the
Companies Act, 2013 and Clause 49 of the Listing Agreement with stock
exchanges. Based on the declaration(s) of Independent Directors, the
Board of Directors recorded its opinion that all Independent Directors
are independent of the Management and have fulfilled the conditions as
specified in the Companies Act, 2013, rules made thereunder as well as
relevant provisions of Clause 49 of the Listing Agreement with stock
exchanges.
MEETINGS OF BOARD AND COMMITTEES
During the year under review, the Board met four times viz. on May 19,
2014, on August 9, 2014, on November 10, 2014 and on February 7, 2015.
Details of all Board Committees along with their composition and
meetings held during the year under review are given in the Report on
Corporate Governance.
PERFORMANCE EVALUATION OF BOARD, COMMITTEES & DIRECTORS
Pursuant to the Provisions of the Companies Act, 2013 and as stipulated
under Clause 49 of the Listing Agreement, the Board of Directors of the
Company carried out the formal annual performance evaluation of all the
Directors and also its self-evaluation process, interalia, to assess
the skill set and contribution that are desired, recognising that
competencies and experiences evolves over time. The process was
conducted by allowing the Board to engage in candid discussions with
each Director with the underlying objective of taking best possible
decisions in the interest of the Company and its stakeholders. The
Directors were individually evaluated based on structured
self-assessment and personal interaction to ascertain feedback on well
defined parameters which, interalia, comprised of level of engagement
and their contribution to strategic planning and other criteria based
on performance and personal attributes of the Directors. During the
process of evaluation, the Board of Directors also reviewed and
discussed the annual performance evaluation of Directors carried out by
the Nomination and Remuneration Committee. A statement in detail
indicating the manner, in which formal annual evaluation has been made
by the Board of Directors, is given in the Report on Corporate
Governance which forms a part of the Annual Report.
SELECTION AND APPOINTMENT OF DIRECTORS AND THEIR REMUNERATION
The Board of Directors in consonance with the recommendation of
Nomination and Remuneration Committee (NRC) has adopted a terms of
reference which, interalia, deals with the manner of selection of
Directors and the Key Managerial Personnel of the Company. The NRC
recommends appointment of Director/appointment or re-appointment of
Managing Director based on their qualifications, expertise, positive
attributes and independence in accordance with prescribed provisions of
the Companies Act, 2013 and rules framed thereunder. The NRC, in
addition to ensuring diversity of race and gender, also considers the
impact the appointee would have on Board''s balance of professional
experience, background, view points, skills and areas of expertise.
The Board of Directors in consonance with the recommendation of
Nomination and Remuneration Committee has also adopted the Remuneration
Policy for the members of the Board and Executive Management. The said
policy earmark the principles of remuneration and ensures a well
balanced and performance related compensation package taking into
account shareholders'' interest, industry practices and relevant
corporate regulations in India.
VIGIL MECHANISM / WHISTLE BLOWER POLICY
The Company has a Vigil Mechanism and Whistle-Blower Policy to deal
with instances of fraud and mis-management, if any, and conducting
business with integrity, including in accordance with all applicable
laws and regulations. The details of the Vigil Mechanism and
Whistle-Blower Policy are explained in the Corporate Governance Report
and also posted on the website of the Company.
AUDITORS
Messrs V. Sankar Aiyar & Co., Chartered Accountants (Registration
No.109208W), were appointed as Statutory Auditors to hold office until
the conclusion of the ensuing Annual General Meeting of the Company.
Since Messrs V. Sankar Aiyar & Co. has been functioning as Auditors of
the Company since last five consecutive years, the Board of Directors
unanimously agreeing to the recommendation of the Audit Committee,
further recommends re-appointment of Messrs V.Sankar Aiyar & Co. as
Statutory Auditors of the Company for another term of 5 (five) years
from the conclusion of the ensuing Annual General Meeting (32nd AGM)
till the conclusion of fifth consecutive Annual General Meeting (37th
AGM) hereafter, subject to ratification by shareholders in every Annual
General Meeting, which is in accordance with the provisions of Section
139 read together with other provisions of Chapter X of the Companies
Act, 2013 and the Rules made thereunder. A certificate has been
received from them to the effect that their appointment as Auditors, if
made, would be in accordance to the provisions of Section 139 and 141
of the Companies Act, 2013 and rules framed thereunder.
The Board of Directors has appointed Messrs D. Sabyasachi & Co., Cost
Accountants, as Cost Auditors for conducting audit of the cost accounts
maintained by the Company in respect of specified products of the
Company covered under The Companies (Cost Records and Audit) Amendment
Rules, 2014 and fixed their remuneration based on the recommendation of
the Audit Committee. The remuneration payable to Cost Auditors is
subject to ratification by the shareholders in the ensuing Annual
General Meeting of the Company.
AUDITORS'' REPORT
Notes to Financial Statements are self explanatory including with
respect to Emphasis of Matter paragraph drawn by the Auditors in their
report and therefore, do not call for any further comments or
explanations.
SECRETARIAL AUDITOR
Pursuant to the provisions of Section 204 of the Companies Act, 2013
and the Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014, Messrs R.K.Mishra & Associates, Company
Secretaries were appointed to undertake the Secretarial Audit of the
Company for the year ended 31st March, 2015. There are no adverse
remarks or observations made by Messrs R.K.Mishra & Associates in the
Secretarial Audit Report. The Report of the Secretarial Auditor is
given in Annexure-II, which is attached hereto and forms a part of the
Directors'' Report.
RELATED PARTY TRANSACTIONS
All related party transactions entered into during the financial year
under review by the Company were on an arm''s length basis and in the
ordinary course of business. There are no material significant related
party transactions made by the Company with Promoters, Directors, Key
Managerial Personnel or other designated persons which may have a
potential conflict with the interest of the Company at large.
All related party transactions are placed before the meeting(s) of
Audit Committee for approval. Prior omnibus approval of the Audit
Committee is obtained for the financial year for the transactions which
are of a foreseen and repetitive in nature. The statement giving
details of all related party transactions entered into pursuant to the
omnibus approval together with relevant documents/ information are
placed before the Audit Committee for review and approval on quarterly
basis. The company has developed a Policy on materiality of Related
Party Transactions and dealing with Related Party Transactions. The
policy on Policy on materiality of Related Party Transactions and
dealing with Related Party Transactions as approved by the Board is
uploaded on the company''s website and the same is available at the
weblink http://www.vtlrewa.com/pdf/RPTPolicy%20_VTL.pdf
SUBSIDIARY COMPANIES AND JOINT VENTURE
The Company has three wholly owned subsidiaries namely August Agents
Limited, Insilco Agents Limited and Laneseda Agents Limited. None of
the subsidiary companies is a material non-listed Indian Subsidiary
company as defined under Clause 49 of the Listing Agreement(s) with
stock exchanges.
Birla Ericsson Optical Limited was established as a joint venture
company, in pursuance to a Joint Venture Agreement entered into by your
Company alongwith Universal Cables Ltd. and Ericsson Cables AB, Sweden.
Your Directors are pleased to inform that Birla Ericsson Optical Ltd.
has achieved satisfactory financial performance during the year under
review. There has been no change in the number of subsidiaries or in
nature of business of subsidiaries or the Joint Venture.
A Statement containing the salient features of the financial statement
of subsidiaries and a joint venture as prescribed under the first
proviso to sub-section (3) of section 129 of the Companies Act, 2013
read with rule 5 of The Companies (Accounts) Rules, 2014 is attached
and forms part of the Annual Report.
CONSOLIDATED FINANCIAL STATEMENTS
In accordance with the Companies Act, 2013 and Accounting Standard
(AS)-21 "Consolidated Financial Statements" read with Accounting
Standard (AS)-27 "Financial Reporting of Interests in Joint
Venture", the audited Consolidated Financial Statements form part of
the Annual Report. The Financial Statements of subsidiary companies
have been prepared in the same form and manner as that of the Company.
PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS UNDER SECTION 186 OF
THE COMPANIES ACT, 2013
The particulars of Loans, Guarantees and Investment in pursuance to
Section 186 of the Companies Act, 2013 are given in the Notes to the
Financial Statements.
DISCLOSURE OF RATIO OF REMUNERATION OF DIRECTORS AND KEY MANAGERIAL
PERSONNEL, ETC.
As required under Section 197(12) read with Rule 5 of The Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014, the
details of the ratio of the remuneration of each Director to the median
employee''s remuneration and such other details as prescribed therein
are given in Annexure-III, which is attached hereto and forms a part of
the Directors'' Report.
EXTRACT OF ANNUAL RETURN
An Extract of Annual Return as per Section 92(3) of the Companies Act,
2013 is given in Annexure-IV, which is attached hereto and forms a part
of the Directors'' Report.
PARTICULARS OF EMPLOYEES
The information required pursuant to Section 197 of the Companies Act,
2013, read with Rule 5 of The Companies (Appointment and Remuneration
of Managerial Personnel) Rules, 2014 in respect of an employee of the
Company are given in Annexure-V, which is attached hereto and forms a
part of the Directors'' Report.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNING AND OUTGO
As required under Section 134(3)(m) of the Companies Act, 2013 read
with Rule 8 of The Companies (Accounts) Rules 2014, the information on
Conservation of Energy, Technology Absorption and Foreign Exchange
Earnings and Outgo are given in Annexure- VI, which is attached hereto
and forms a part of the Directors'' Report.
GENERAL
Your Directors state that no disclosure or reporting is required in
respect of the following items as there were no transactions on these
items during the year under review:
(a) Issue of equity shares with differential rights as to dividend,
voting or otherwise.
(b) Issue of shares (including sweat equity shares) to employees of the
Company under any scheme.
(c) Neither the Managing Director nor the Whole-time Directors of the
Company receive any remuneration or commission from any of its
subsidiaries.
(d) No significant or material orders were passed by the Regulators or
Courts or Tribunals which impact the going concern status and
Company''s operations in future.
(e) During the year under review, there were no cases filed or reported
pursuant to the Sexual Harassment of Women at Workplace (Prevention,
Prohibition and Redressal) Act, 2013.
ACKNOWLEDGEMENT
The Board desires to place on record its grateful appreciation for the
excellent assistance and co-operation received from the State
Government and continued support extended to the Company by the
bankers, investors, suppliers and esteemed customers and other business
associates. Your Directors also wish to place on record their deep
sense of appreciation to all the employees of the Company for their
unstinted commitment and continued contribution in the performance of
the Company.
Yours faithfully,
Harsh V.Lodha Chairman
(DIN:00394094)
J.Veeraraghavan
(DIN:00078998)
S.K.Misra
(DIN: 00009411)
R.C.Tapuriah (DIN: 00395997)
D.R.Bansal (DIN: 00050612) Directors
Pracheta Majumdar (DIN: 00179118)
Shiv Dayal Kapoor (DIN: 00043634)
Kiran Aggarwal (DIN: 06991807)
Y.S.Lodha Managing Director
(DIN:00052861)
New Delhi, May 16, 2015
Mar 31, 2014
Dear Shareholders
The Directors have the pleasure of presenting their Annual Report,
together with the Audited Financial Statements of the Company for the
year ended March 31, 2014.
ACCOUNTS & FINANCIAL MATTERS
2013-14 2012-13
Rs.in lacs Rs.in lacs
Revenue from operations (gross) 45237.86 35815.84
Other income 636.81 917.40
45874.67 36733.24
The year''s working shows a
Gross Profit (after Interest) of - 3127.38 1064.37
Less : Depreciation and Amortisation expense 552.82 476.62
Profit before Tax 2574.56 587.75
Current Tax(MAT) 484.25 13.81
Income Tax for earlier years 4.08 -
Net Profit for the year 2086.23 573.94
GENERAL & CORPORATE MATTERS
During the year under review, your Company has reported a continued
improved performance when viewed against the backdrop of extremely
challenging business context in which it was achieved. Gross revenue
from operations for the year grew by 26.30% to Rs. 45237.86 lacs as
compared to Rs. 35815.84 lacs during the previous year. The Exports
revenue including project exports, stood at Rs. 4185.07 lacs during the
year under review as compared to Rs. 3824.19 lacs for the previous
year. Despite a significant increase in finance costs with interest
rates remaining at elevated levels throughout the year, the Gross
Profit (before interest) for the year increased by 193.82% and stood at
Rs. 3127.38 lacs as compared to Rs. 1064.37 lacs in the previous year
mainly due to increased revenue from cables business segment. Although
the EPC business segment recorded moderate growth in Revenue which
increased by 12.54% to Rs. 15344.19 lacs, its profitability was
impacted on account of the competitive market environment coupled with
slow down in the business verticals in which EPC segment of the Company
operates. The current business verticals of the EPC Division viz.
Telecom, Power and Sewerage pipeline building are now geared up for
improved performance with change in backlog order composition with
enhanced EBITDA margins and a special emphasis on sewerage pipelines
and telecommunication networks in which the Company possesses
requisites skill and knowledge quotient meeting the contemporary
technological requirements.
The domestic telecom cable industry is expected to grow at a reasonable
pace over the medium-term. During the year under review, your Company
consolidated its pre-eminent position in the industry through capacity
augmentation and new product launches at its OFC plant which became
operational at the end of the financial year. The full benefit of
expansion is expected to accrue in future which will further strengthen
the performance of the Company. To keep abreast with the latest trends
in the industry, your Company shall continue to accord priority for
technological upgradation of its production facilities, with the aim of
improving assets performance and cost competitiveness. Your Company''s
consciously pursued strategy of de-risking the infrastructure of
traditional PIJF Cables business by scaling up the production
facilities for Quad, Railway Signaling and other specialty copper
cables has yielded positive results in terms of sustained market share
and margin improvement.
Your Company continues to focus on developing new products by
innovation and as per the latest industry requirements, which will
further strengthen its competitiveness in both domestic and export
market places, leading to overall improved operational efficiency.
DIVIDEND
After considering the Company''s profitability, cash flow and overall
financial performance, the Board of Directors of the Company is pleased
to recommend a Dividend of Rs. 2.00 per equity share of Rs. 10/- each
(i.e. 20%) for the financial year ended March 31, 2014. The total
quantum of Dividend, if approved by the Members, will be about Rs.
237.02 lacs while about Rs. 40.28 lacs will be paid by the Company
towards Dividend Distribution Tax and Surcharge thereon. Your Board
also recommends a transfer to General Reserve of Rs.200.00 lacs leaving
a surplus of Rs. 2419.94 lacs in the statement of Profit and Loss to be
carried forward.
CORPORATE GOVERNANCE
Pursuant to Clause 49 of the Listing Agreement with the Stock
Exchanges, the Management Discussion and Analysis, Report on Corporate
Governance and a Certificate by the Managing Director (CEO) confirming
compliance by all the Board Members and Senior Management Personnel
with Company''s Code of Conduct and Auditors'' Certificate regarding
compliance of conditions of Corporate Governance are made a part of the
Annual Report.
DIRECTORS'' RESPONSIBILITY STATEMENT
As required under Section 217 (2AA) of the Companies Act, 1956, your
Directors to the best of their knowledge and belief and according to
the information and explanation obtained by them, state that:
. in the preparation of the Annual Accounts for the year ended March
31, 2014, the applicable accounting standards have been followed;
. the Company has selected such accounting policies, applied them
consistently, 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 the end of the financial year 2013-14 and of the
profit for the year ended March 31, 2014;
. proper and sufficient care has been taken 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 and other irregularities; and
. the attached Annual Statement of Accounts for the year ended
March 31, 2014 have been prepared on a ''going concern'' basis.
JOINT VENTURE
Your directors are pleased to inform that Birla Ericsson Optical Ltd.,
a venture promoted by your Company in association with Universal Cables
Ltd. and Ericsson Cables AB, Sweden has posted encouraging financial
performance during the year under review.
INDUSTRIAL RELATIONS
Industrial relations remained cordial throughout the year. Your
Directors recognize and appreciate the sincere and hard work, loyalty,
dedicated efforts and contribution of all the employees in a volatile
and uncertain business environment during the year.
The Company continues to accord a very high priority to both industrial
safety and environmental protection and these are ongoing process at
the Company''s plant and facilities to maintain high awareness levels.
The Company has also stressed the need to adopt the highest safety
standards on EPC business segment projects with the emphasis on
ensuring that safety on all projects under execution are given a great
deal of importance. The Company will also revisit its safety standards
and norms from time to time in order to raise the bar of safety for its
people as well as users and customers.
RECOGNITION
The Company''s manufacturing facilities continue to remain certified by
independent and reputed external agency as being compliant as well as
aligned with the external standards for Quality Management System ISO
9001:2008 and Environmental Management System ISO 14001:2004. During
the year, the audits for these Certifications established continuous
improvement in performance against these standards.
Your Directors are pleased to inform that Engineering Export Promotion
Council - Western Region has awarded the Company with a trophy for
"Star Performer as medium enterprise in the product group of project
exports for outstanding contribution to engineering exports during the
year 2011-12, which reflects its successful strategies.
DIRECTORS
In terms of Section(s) 149, 152 and all other applicable provisions of
the Companies Act, 2013, for the purpose of determining the directors
liable to retire by rotation, the Independent Directors shall not be
included in the total number of directors of the Company. Accordingly,
Shri Pracheta Majumdar, Director shall retire by rotation at the
ensuing Annual General Meeting and being eligible, has offered himself
for re-appointment.
Pursuant to the provisions of Section 161(1) of the Companies Act, 2013
and the Articles of Association of the Company, Shri Shiv Dayal Kapoor
was appointed as an Additional Director designated as an Independent
Director w.e.f. May 19, 2014 and he shall hold office up to the date of
the ensuing Annual General Meeting. The Company has received requisite
notice in writing from a member proposing Shri Shiv Dayal Kapoor for
appointment as an Independent Director, not liable to retire by
rotation at the ensuing Annual General Meeting.
Pursuant to Section 149(6) of the Companies Act, 2013, Directors are
required to inform their status as to ÂIndependent Director'' (ID) in
the first meeting of the Board of Directors held from April 1, 2014.
Accordingly three of the Directors of your Company viz.
(i) Shri J.Veeraraghavan, (ii) Shri S.K. Misra and (iii) Shri
R.C.Tapuriah have declared their adherence to the criteria fixed under
Section 149(6) for ÂIndependent Directors''. The Board of Directors of
the Company at its meeting held on May 19, 2014 perused their
declarations and other requirements under the Companies Act, 2013 and
the Rules made thereunder, as applicable, and found all of them to be
meeting with criteria for Independent Director and same were taken on
record. The relevant provisions of the Companies Act, 2013 also provide
that the IDs shall be appointed as such within a period of 12 months
from April 1, 2014. Your Board has deemed it prudent and recommended to
the Shareholders their appointment as IDs for a period upto 5 years at
the ensuing Annual General Meeting. All IDs shall not be liable to
retire by rotation. None of the above mentioned persons is disqualified
from being appointed as a Director in terms of Section 164 of the
Companies Act, 2013.
Details of Directors seeking appointment/re-appointment as required
under Clause 49 of the Listing Agreement with Stock Exchanges are given
in the Notice of the ensuing Annual General Meeting, which is being
sent to the shareholders along with Annual Report.
Messrs V. Sankar Aiyar & Co., Chartered Accountants (Registration
No.109208W), were appointed as Statutory Auditors to hold office until
the conclusion of the ensuing Annual General Meeting of the Company.
Section 139 read together with other provisions of Chapter X of the
Companies Act, 2013 and the Rules made thereunder, inter alia, provide
that no listed company shall appoint/ re-appoint an audit firm as
auditor for more than two terms of five consecutive years and the
period for which the firm has held office as Auditors prior to the
commencement of the Companies Act, 2013 shall be taken into account for
calculating the period of five or ten consecutive years, as the case
may be. In other words, the Company can make appointment of auditors
for five years at a time. Since Messrs V. Sankar Aiyar & Co. has been
functioning as Auditors of the Company since last four consecutive
years, the Board of Directors unanimously agreeing to the
recommendation of the Audit Committee, further recommends
re-appointment of Messrs V.Sankar Aiyar & Co. as Statutory Auditors of
the Company for one year to hold office from the conclusion of the
ensuing Annual General Meeting until the conclusion of the next Annual
General Meeting of the Company, subject to ratification by
shareholders.
The Board of Directors has appointed Messrs D. Sabyasachi & Co., Cost
Accountants, as Cost Auditors for conducting audit of the cost accounts
maintained by the Company in respect of cables and fixed their
remuneration based on the recommendation of the Audit Committee. The
remuneration payable to Cost Auditors is subject to ratification by the
shareholders in the ensuing Annual General Meeting of the Company.
The due date and actual date of filing of the Cost Audit Report of the
Company for the financial year 2012-13 were September 27,2013 and
September 05, 2013 respectively.
AUDITORS'' REPORT
Notes to Financial Statements are self explanatory including with
respect to Emphasis of Matter paragraph drawn by the Auditors in their
report and therefore, do not call for any further comments or
explanations.
CONSOLIDATED FINANCIAL STATEMENTS
In accordance with Accounting Standard (AS)-21 "Consolidated Financial
Statements read with Accounting Standard (AS)-27 "Financial
Reporting of Interests in Joint Venture", the Consolidated Financial
Statements form part of the Annual Report. These Group Accounts have
been prepared on the basis of audited financial statements received
from subsidiaries and a joint venture company, as approved by their
respective Board of Directors.
SUBSIDIARY COMPANIES
A statement pursuant to Section 212 of the Companies Act, 1956,
relating to subsidiary companies is attached and forms part of the
Annual Report. None of the subsidiary companies is a material
non-listed Indian Subsidiary company as defined under Clause 49 of the
Listing Agreement(s) with stock exchanges.
In accordance with the General Circular issued by the Ministry of
Corporate Affairs, Government of India, the Balance Sheet, Statement of
Profit & Loss and other documents of the subsidiary companies are not
being attached with the Balance Sheet of the Company. However, the
financial information of the subsidiary companies is disclosed in the
Annual Report in compliance with the said Circular.
The Financial Statements of the subsidiary companies and other detailed
information shall be made available to the members seeking such
information at any point of time. The annual accounts of the subsidiary
companies will also be available for inspection at the Registered
Office of the Company and that of the respective subsidiary companies.
PARTICULARS OF EMPLOYEES
Particulars of employees in accordance with the provisions of Section
217(2A) of the Companies Act, 1956, read with the Companies
(Particulars of Employees) Rules, 1975, as amended, are not given as
none of the employees qualifies for such disclosure.
ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNINGS AND OUTGO
As required under Section 217(1)(e) of the Companies Act, 1956 and the
Rules made therein, the concerned particulars relating to Energy
Conservation, Technology Absorption, Foreign Exchange Earnings and
Outgo are given in Annexure, which is attached hereto and forms part of
the Directors'' Report.
ACKNOWLEDGEMENT
The Board desires to place on record its grateful appreciation for the
excellent assistance and co-operation received from the State
Government and continued support extended to the Company by the
bankers, investors, suppliers and esteemed customers and other business
associates. Your Directors also wish to place on record their deep
sense of appreciation for the committed services by the Company''s
executives, staff and workers.
Yours faithfully,
Harsh V.Lodha Chairman
J.Veeraraghavan
S.K.Misra
R.C.Tapuriah Directors
D.R.Bansal
Y.S.Lodha Managing Director
New Delhi, May 19, 2014
Mar 31, 2013
The Directors have the pleasure of presenting their Annual Report,
together with the Audited Financial Statements of the Company for the
year ended March 31, 2013.
ACCOUNTS & FINANCIAL MATTERS
2012-13 2011-12
Rs. in lacs Rs. in lacs
Revenue from operations (gross) 35815.84 26277.30
Other income 917.40 681.96
36733.24 26959.26
The year''s working shows a Gross
Profit/(Loss) (after Interest) of - 1064.37 (824.52)
Less : Depreciation and Amortisation expense 476.62 475.76
Profit/(Loss) before Tax 587.75 (1300.28)
Current Tax(MAT) 13.81 -
Income tax and fringe benefit tax charge/
(credit) of earlier years - 3.18
Net Profit/(Loss) for the year 573.94 (1303.46)
Your Directors regret their inability to recommend any equity dividend
for the year in order to conserve cash resources for future business
requirements.
GENERAL & CORPORATE MATTERS
During the year under review, your Company has reported improved
performance; achieving higher revenue from operations by 36.30%. The
year 2012 witnessed the heightened regulatory uncertainty in the
telecom sector, which forced all the stakeholders in the industry, to
play safe in terms of reduced network roll-out, which affected your
company''s overall business outlook. However, the current year promises
full of new projects being lined up by major companies in public sector
such as Bharat Broadband Network Limited (BBNL) for its National
Optical Fibre Network Project (NoFN), BSNL''s Network for Spectrum (NFS)
for Defence forces. In private sector, a leading Telecom player''s
roll out of a country-wide 4G LTE network using high fibre count ribbon
type OF cable and all other private telecom operators'' plan of
enhancing their network reach for their 2G and 3G networks, etc. will
add wings to the government''s initiatives. The last budget presented in
the Parliament, which is being regarded as realistic hinge on growth
and development, will definitely pave the way for growth in the
infrastructure to significant levels which indirectly will contribute
to the performance of Company''s EPC Division, in the near future.
The gross revenue from operations for the year under review increased
to Rs.35815.84 lacs as compared to Rs.26277.30 lacs during the previous
year mainly due to increased revenue from cables business by 49.64%
(Rs.21307.39 lacs vs. Rs.14239.27 lacs in the previous year). The
increased revenue paved the way for higher profitability despite a
significant increase in finance costs.
A focused approach by debottlenecking the PIJF Copper Telecom cable
production facilities to Railway Quad, Signaling and other specialty
copper cables has enhanced the performance of your company in a
considerably way, by contributing 40% of the cable division''s revenue
with better market share, which is worth mentioning. Also the increased
off take of optical fibre cable by a leading public sector telecom
operator and other important private operators coupled with continuous
improvement in export markets has added to the top line performance
significantly. As the Company has already focused on clear and
consistent priorities to invest in the future to create increased and
new revenue streams by continuously upgrading and modernizing the
production facilities, the demand for telecom cables which is likely to
witness considerable growth with the emergence of government''s
initiatives and other private customers will be met and the Company can
continue to deliver quality products and enjoy customers'' loyalty for
products which are witnessing expanding volumes.
Your Directors believe the demand for telecom cables will gain a fillip
as the NOFN project will be requiring, laying of fibre to pre-last mile
stage, which is aimed at reaching 250,000 gram panchayats. In addition
to the above, the government''s commitment to improve the infrastructure
sector will also generate more revenue for your Company''s EPC Division
to grab major projects in the power and telecom sectors.
The EPC Division sales increased from Rs.11582.80 lacs to Rs.13654.12
lacs, an increase of 17.88% compared to the previous year. The current
business verticals of the EPC Division viz. Telecom, Power and Sewerage
pipeline building are now geared up for improved performance with
change in backlog order composition with enhanced EBITDA margins with a
special emphasis on Sewerage pipeline projects.
To keep abreast with the latest trends in the industry, your Company
has been continuously augmenting and upgrading the production
facilities, with a close watch on cost controls. To have better
operational income, your company is adopting a continuous improvement
approach by way of optimum resource utilization, prudent sourcing
practices of all materials required across different business
verticals. Your Company would continue to develop new products by
innovation and as per the latest industry requirements, which will
further strengthen its competitiveness in both domestic and export
market places, leading to customers'' bliss and improved operational
efficiency.
CORPORATE GOVERNANCE
Pursuant to Clause 49 of the Listing Agreement with the Stock
Exchanges, the Management Discussion and Analysis, Report on Corporate
Governance and a Certificate by the Managing Director (CEO) confirming
compliance by all the Board Members and Senior Management Personnel
with Company''s Code of Conduct and Auditors'' Certificate regarding
compliance of conditions of Corporate Governance are made a part of the
Annual Report.
DIRECTORS'' RESPONSIBILITY STATEMENT
As required under Section 217 (2AA) of the Companies Act, 1956, your
Directors to the best of their knowledge and belief and according to
the information and explanation obtained by them, state that:
- in the preparation of the Annual Accounts for the year ended March
31, 2013, the applicable accounting standards have been followed;
- the Company has selected such accounting policies, applied them
consistently, 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 the end of the financial year 2012-13 and of the
profit for the year ended March 31, 2013;
- proper and sufficient care has been taken 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 and other irregularities; and
- the attached Annual Statement of Accounts for the year ended March
31, 2013 have been prepared on a ''going concern'' basis.
JOINT VENTURE
Your directors are pleased to inform that Birla Ericsson Optical Ltd.,
a venture promoted by your Company in association with Universal Cables
Ltd. and Ericsson Cables AB, Sweden has shown significant improvement
in the financial performance during the year under review.
INDUSTRIAL RELATIONS
Industrial relations remained cordial throughout the year. Your
Directors recognize and appreciate the sincere and hard work, loyalty,
dedicated efforts and contribution of all the employees in most
difficult and challenging business environment during the year.
The Company continues to accord a very high priority to both industrial
safety and environmental protection and these are ongoing process at
the Company''s plant and facilities.
RECOGNITION
The Company''s manufacturing facilities continue to remain certified by
independent and reputed external agency as being compliant as well as
aligned with the external standards for Quality Management System ISO
9001:2008 and Environmental Management System ISO 14001:2004. During
the year, the audits for these Certifications established continuous
improvement in performance against these standards.
Your Company is pleased to inform that Engineering Export Promotion
Council, which is a body constituted under Union Ministry of Commerce
and Industry, has given the award of Star Performer in the export
segment for the Company''s various products and services for the year
2010-11.
DIRECTORS
The Board of Directors of the Company at its meeting held on October
31, 2012 has re-appointed Shri Y.S.Lodha as the Managing Director of
the Company for a further period of 3 (Three) years with effect from
November 4, 2012 to November 3, 2015 for which requisite approvals
including from shareholders of the Company vide a Special Resolution
passed at the Extra-Ordinary General Meeting held on December 10, 2012
have been obtained.
In accordance with the provisions of the Companies Act, 1956 and the
Articles of Association of the Company, Shri Harsh V.Lodha and Shri
J.Veeraraghavan, the Directors are due to retire by rotation at the
ensuing Annual General Meeting and being eligible have offered
themselves for re-appointment. Details about Directors seeking
re-appointment are given in the Notice of the ensuing Annual General
Meeting which is being sent to the shareholders along with Annual
Report.
AUDITORS
Messrs V. Sankar Aiyar & Co., Chartered Accountants, retire as Auditors
of the Company and, being eligible, offer themselves for
re-appointment.
Your Company has appointed Messrs D.Sabyasachi & Co., Cost Accountants,
97/2, Suren Sarkar Road, Beleghata, Trikon Park, Kolkata - 700010 as
Cost Auditors for conducting audit of the cost accounts maintained by
the Company in respect of cables. The due date and actual date of
filing of the cost audit report of the Company for the financial year
2011-12 are 31.01.2013 and 09.01.2013 respectively.
AUDITORS'' REPORT
Notes to Financial Statements are self explanatory including with
respect to Emphasis of Matter paragraph drawn by the Auditors in their
report and therefore, do not call for any further comments or
explanations.
CONSOLIDATED FINANCIAL STATEMENTS
In accordance with Accounting Standard (AS)-21 "Consolidated Financial
Statements" read with Accounting Standard (AS)-27 "Financial Reporting
of Interests in Joint Venture", the Consolidated Financial Statements
form part of the Annual Report. These Group Accounts have been prepared
on the basis of audited financial statements received from subsidiaries
and a joint venture company, as approved by their respective Board of
Directors.
SUBSIDIARY COMPANIES
A statement pursuant to Section 212 of the Companies Act, 1956,
relating to subsidiary companies is attached and forms part of the
Annual Report. In terms of the general exemption granted by the
Ministry of Corporate Affairs vide its circular no.02/2011 dated
February 8, 2011, the audited Accounts and Reports of Board of
Directors and Auditors of the Company''s subsidiaries have not been
annexed to this Annual Report. The Company has complied with the
requirements as prescribed under the said circular. The consolidated
financial statements prepared in accordance with Accounting Standard
(AS)-21 read with Accounting Standard (AS)-23 forming part of this
Annual Report include the financial information of the subsidiary
companies. None of the subsidiary companies is a material non-listed
Indian Subsidiary company as defined under Clause 49 of the Listing
Agreement(s) with stock exchanges.
PARTICULARS OF EMPLOYEES
Particulars of employees in accordance with the provisions of Section
217(2A) of the Companies Act, 1956, read with the Companies
(Particulars of Employees) Rules, 1975, as amended, are not given as
none of the employees qualifies for such disclosure.
ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNINGS AND OUTGO
As required under Section 217(1)(e) of the Companies Act, 1956 and the
Rules made therein, the concerned particulars relating to Energy
Conservation, Technology Absorption, Foreign Exchange Earnings and
Outgo are given in Annexure, which is attached hereto and forms part of
the Directors'' Report.
ACKNOWLEDGEMENT
The Board desires to place on record its grateful appreciation for the
excellent assistance and co-operation received from the State
Government and continued support extended to the Company by the
bankers, investors, suppliers and esteemed customers and other business
associates.
The Directors appreciate and value the contributions made by every
member of the VTL family.
Yours faithfully,
Harsh V. Lodha Chairman
J. Veeraraghavan
S.K. Misraq2 Directors
R.C. Tapuriah
D.R. Bansal
Y.S. Lodha Managing Director
New Delhi, May 21, 2013
Mar 31, 2012
The Directors have the pleasure of presenting their Annual Report,
together with the Audited Financial Statements of the Company for the
year ended March 31, 2012.
ACCOUNTS & FINANCIAL MATTERS
2011-12 2010-11
Rs. in lacs Rs. in lacs
Revenue from operations (gross) 26277.30 20451.26
Other income 681.96 1081.51
26959.26 21532.77
The year's working shows a
Gross Profit/(Loss) (after Interest) of - (824.52) 843.37
Less : Depreciation and Amortisation expense 475.76 462.12
Profit/(Loss) before Tax (1300.28) 381.25
Income tax and fringe benefit tax credit
of earlier years 3.18 (0.79)
Net Profit/(Loss) for the year (1303.46) 382.04
Your Directors regret their inability to recommend any equity dividend
for the year in order to conserve cash resources for future business
requirements.
GENERAL & CORPORATE MATTERS
During the year under review, your Company's revenue from operations
was higher than the previous year by 28.49%. This is appreciable given
the fact that telecommunications sector in India has been facing
considerable uncertainty in the recent past due to unfavourable
regulatory environment, which has slowed down the domestic capex cycle
of the telecom operators. As a consequence telecommunications cables
manufacturers have had to struggle for business with lower volumes and
longer credit periods. Despite this major but temporary aberration
leading to reduced telecommunications cables consumption during the
year under review, pent- up demand is expected to remain strong.
However the magnitude and timing will depend upon clarity on major
policy issues and consequent resource allocations by the Government and
the telecom operators. In addition to this, the liquidity constraints
and slow decision making process in the power and telecommunications
infrastructure sectors in India where huge upfront investment
commitment is a pre-requisite, have led to uninspiring performance by
Company's EPC Division as the anticipated growth did not materialize.
The gross revenue from operations for the year under review increased
to Rs. 26277.30 lacs as compared to Rs. 20451.26 lacs during the
previous year mainly due to increased revenue from cables business by
55.39% (Rs.14100.29 lacs vs. Rs.9074.26 lacs in the previous year) and
a modest increase of Rs. 736.08 lacs in EPC Division (Rs.11498.24 lacs
vs. Rs. 10762.16 lacs of previous year). Your Company's consciously
pursued strategy of de-risking the infrastructure of traditional PIJF
Cables business by scaling up the production facilities for Quad,
Railway Signaling and other speciality copper cables has yielded
positive results in terms of increased market share, margin expansions
and sustainability. The Company will continue to focus on delivering
outstanding and differentiated products and developing customers'
loyalty for these products which are witnessing expanding volumes.
However, despite the increase in the overall revenue, the Company
suffered a gross loss of Rs.824.52 lacs for the year as against the
gross profit of Rs.843.37 lacs during the previous year mainly on
account of lower than anticipated volume of business, intense
competition leading to compromise on margins, longer working capital
cycle due to financial strife faced by the ultimate customers in Power
& Telecom sectors, higher finance costs and negative foreign exchange
rate fluctuation.
Your Directors believe that Government shall decide the final framework
of the new telecom policy which will eventually pave the way for speedy
implementation of broadband infrastructure projects including laying of
a nationwide OFC network to bring more than one million villages into
high speed internet. Your Company is already geared up to exploit such
a huge business opportunity.
The EPC Division sales increased from Rs.10762.16 lacs to Rs.11498.24
lacs, an increase of 6.84% compared to the previous year. During the
year under review the EPC Division's operating performance came under
stress due to lower margins, liquidity constraints with the customers
and general depression in the business segment it operates. However,
the current business verticals of the EPC Division viz. Telecom, Power
and Gas distribution pipelines are now geared up for improved
performance with change in backlog order composition with enhanced
EBITDA margins. Your Company also awaits the final outcome of tenders
floated by BSNL for supply and laying of a dedicated nationwide
alternate communication network for Defence forces in which your
Company alongwith consortium members had emerged as the lowest bidders
for two of the packages and also for the Navy OFC Network project where
your Company emerged as the lowest bidder.
In view of fast changing trends in the industry, your Company continues
to accord priority to control operating costs by deploying contemporary
technologies and practices including outsourcing, to keep the business
humming. Additionally, planned sourcing of materials and resource
optimization across different verticals of EPC Division will eventually
ensure higher operating margins. Your Company would continue to accord
thrust on development of new products as per evolving industry
standards, which will further strengthen its competitive abilities in
domestic and overseas market places and improve upon operational
performance.
CORPORATE GOVERNANCE
Pursuant to Clause 49 of the Listing Agreement with the Stock
Exchanges, the Management Discussion and Analysis, Report on Corporate
Governance and a Certificate by the Managing Director (CEO) confirming
compliance by all the Board Members and Senior Management Personnel
with Company's Code of Conduct and Auditors' Certificate regarding
compliance of conditions of Corporate Governance are made a part of the
Annual Report.
DIRECTORS' RESPONSIBILITY STATEMENT
As required under Section 217 (2AA) of the Companies Act, 1956, your
Directors to the best of their knowledge and belief and according to
the information and explanation obtained by them, state that:-
- in the preparation of the Annual Accounts for the year ended March
31, 2012, the applicable accounting standards have been followed;
- the Company has selected such accounting policies, applied them
consistently, 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 the end of the financial year 2011-12 and of the loss
for the year ended March 31, 2012;
- proper and sufficient care has been taken 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 and other irregularities; and
- the attached Annual Statement of Accounts for the year ended March
31, 2012 have been prepared on a 'going concern' basis.
JOINT VENTURE
In view of the depressed market conditions, Birla Ericsson Optical
Ltd., a venture promoted by your Company in association with Universal
Cables Ltd. and Ericsson Cables AB, Sweden has unfortunately shown a
downturn in financial performance during the year under review.
Your directors are pleased to inform that your Company has entered into
a joint venture agreement for setting up a project in the Kingdom of
Saudi Arabia for, interalia, manufacturing and sale of Optical Fibre
Cables, FTTx, connectivity products & accessories, etc. in order to
exploit the emerging business opportunities in Middle East and North
Africa regions. Your company also envisages to provide technical
support to the new joint venture company for manufacturing Optical
Fibre Cables through a technical collaboration agreement.
INDUSTRIAL RELATIONS
Industrial relations remained cordial throughout the year. Your
Directors recognize and appreciate the sincere and hard work, loyalty,
dedicated efforts and contribution of all the employees in most
difficult and challenging business environment during the year.
The Company continues to accord a very high priority to both industrial
safety and environmental protection and these are ongoing process at
the Company's plant and facilities.
RECOGNITION
The Company's manufacturing facilities continue to remain certified by
independent and reputed external agency as being compliant as well as
aligned with the external standards for Quality Management System ISO
9001:2008 and Environmental Management System ISO 14001:2004. During
the year, the audits for these Certifications established continuous
improvement in performance against these standards.
DIRECTORS
In accordance with the provisions of the Companies Act, 1956 and the
Articles of Association of the Company, Shri R.C.Tapuriah and Shri
D.R.Bansal, the Directors are due to retire by rotation at the ensuing
Annual General Meeting and being eligible have offered themselves for
re-appointment. Details about Directors seeking re-appointment are
given in the Notice of the ensuing Annual General Meeting which is
being sent to the shareholders along with Annual Report.
AUDITORS
Messrs V. Sankar Aiyar & Co., Chartered Accountants, retire as Auditors
of the Company and, being eligible, offer themselves for re-
appointment.
Messrs D.Sabyasachi & Co., Cost Accountants have been appointed as the
Cost Auditors of the Company for audit of cost accounts relating to
Cables.
AUDITORS' REPORT
Notes to the Financial Statements are self explanatory and therefore,
do not call for any further comments or explanations.
CONSOLIDATED FINANCIAL STATEMENTS
In accordance with Accounting Standard (AS)-21 "Consolidated Financial
Statements" read with Accounting Standard (AS)-27 "Financial Reporting
of Interests in Joint Venture", the Consolidated Financial Statements
form part of the Annual Report. These Group Accounts have been prepared
on the basis of audited financial statements received from subsidiaries
and a joint venture company, as approved by their respective Board of
Directors.
SUBSIDIARY COMPANIES
A statement pursuant to Section 212 of the Companies Act, 1956,
relating to subsidiary companies is attached and forms part of the
Annual Report. In terms of the general exemption granted by the
Ministry of Corporate Affairs vide its circular no.02/2011 dated
February 8, 2011, the audited Accounts and Reports of Board of
Directors and Auditors of the Company's subsidiaries have not been
annexed to this Annual Report. The Company has complied with the
requirements as prescribed under the said circular. The consolidated
financial statements prepared in accordance with Accounting Standard
(AS)-21 read with Accounting Standard (AS)-23 forming part of this
Annual Report include the financial information of the subsidiary
companies. None of the subsidiary companies is a material non-listed
Indian Subsidiary company as defined under Clause 49 of the Listing
Agreement(s) with stock exchanges.
PARTICULARS OF EMPLOYEES
Particulars of employees in accordance with the provisions of Section
217(2A) of the Companies Act, 1956, read with the Companies
(Particulars of Employees) Rules, 1975, as amended, are not given as
none of the employees qualifies for such disclosure.
ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNINGS AND OUTGO
As required under Section 217(1)(e) of the Companies Act, 1956 and the
Rules made therein, the concerned particulars relating to Energy
Conservation, Technology Absorption, Foreign Exchange Earnings and
Outgo are given in Annexure, which is attached hereto and forms part of
the Directors' Report.
ACKNOWLEDGEMENT
The Board desires to place on record its grateful appreciation for the
excellent assistance and co-operation received from the State
Government and continued support extended to the Company by the
bankers, investors, suppliers and esteemed customers and other business
associates.
The Directors appreciate and value the contributions made by every
member of the VTL family.
Yours faithfully,
Harsh V. Lodha Chairman
J. Veeraraghavan
S.K. Misra Directors
R.C. Tapuriah
D.R. Bansal
Y.S. Lodha Managing Director
New Delhi, May 16, 2012
Mar 31, 2011
TO THE SHAREHOLDERS
The Directors have the pleasure of presenting their Annual Report,
together with the Audited Financial Statements of the Company for the
year ended March 31, 2011.
ACCOUNTS & FINANCIAL MATTERS
2010-11 2009-10
Rs. in lacs Rs. in lacs
Turnover (Gross) 20314.26 20908.34
Other Income 1218.51 846.61
21532.77 21754.95
The yearÃs working shows a
Gross Profit (after Interest) of à 843.37 1577.63
Less : Depreciation/Amortisation 462.12 421.23
Profit before Tax 381.25 1156.40
Income Tax and Fringe Benefit Tax
credit of earlier years (0.79) (2.09)
Net Profit for the year 382.04 1158.49
Credit Balance brought forward 1158.49 Ã
Surplus carried to Balance Sheet 1540.53 1158.49
Your Directors regret their inability to recommend any equity dividend
for the year in order to conserve cash resources for future business
requirements.
GENERAL & CORPORATE MATTERS
During the year under review, telecom cable industry in general has
been adversely impacted as a consequence of ambiguity on policy and
regulatory framework in the telecom sector of the Government as an
aftermath of the 2G spectrum episode. This has significantly affected
the financial performance of your Company. Amidst the challenging
operating environment during the year, one of the Company's major
customers, BSNL, did not place any order for Jelly Filled Telephone
Cables and gave a counter offer for supplying optical fibre cables at
economically unviable price levels, which your Company declined. The
network expansion plans of telecom operators were also put on hold due
to an unclear roadmap for future business and liquidity constraints.
The lower sales in the domestic market were somewhat offset by the
Company's push for higher exports of telecommunication cables and
increased revenue from EPC Division, thus the total turnover was only
marginally lower by 2.84% at Rs.203.14 crores as compared to previous
year. However, prevailing sluggish market conditions and further
erosion in prices of telecommunication cables due to lower demand and
internecine competition negatively impacted the profitability during
the year under review.
Domestic turnover from Jelly Filled Telephone Cables was significantly
down both in volume and value terms during the year, and the Company is
carrying out business transformation to realign increased sales from
exports and manufacture of specialty cables, while defocusing from a
single dominant client.
Despite the domestic telecommunication cables market having shrunk and
a general decline in the prices of Optical Fibre Cables, the Company
believes that in the long term the proposed new National Telecom Policy
and National Broadband Policy will lay the foundation for a massive
rollout of Optical Fibre Cable network across the country.
To exploit such a huge business opportunity the Company has already
invested in areas of new revenue streams by upgrading and modernizing
the production facilities besides knowledge updation of human talent to
sustain superior and consistent product quality and flexible production
capacity.
The EPC Division sales increased from Rs.8985.93 lacs to Rs.10762.16
lacs an increase of 19.77% compared to the previous year. The current
business verticals of the EPC Division viz. Telecom, Power and Gas
distribution pipelines are comfortable with a backlog of orders and
your Board is confident that the Division's positive business momentum
will continue in future. As an additional revenue stream, the Company
has embarked on roll out of OFC Networks under Infrastructure Provider
(IP-1) License. This allows operators to use readymade networks and
reduce their capex expenditure, while providing your Company with a
steady revenue growth. Your Company has also added another vertical in
EPC Division to offer end-to-end LED lighting solutions and related
projects. The LED lighting solutions are environmental friendly, help
reduce operational costs, improve productivity and alleviate the
world's most pressing environmental challenges. With a strategy in
place to expand the business verticals and markets, gradual
strengthening of the ability to provide superior customer services and
excellence in project delivery through project management capabilities,
knowledge management and robust quality system, the EPC Division is
poised to achieve a reasonable growth in the years to come.
The year under report could have been a transformative year for the EPC
Division, as the Company along with its consortium partners expended
sizeable time and managerial resources to successfully bid for two
prestigious projects to establish a state-of-the- art dedicated OFC
network for the Defence and Navy. Although your Company was declared
the lowest bidders in August, 2010 for two packages of Network For
Spectrum (NFS) project for Defence and also for the Navy OFC Network
project being executed through BSNL, the respective tenders have not
yet been decided.
With the Company following a very disciplined and focused globalization
approach by aggressively targeting pockets where external copper
telecom cable network are still being laid and with a mission of
becoming an important key player in the EPC Division with a global
footprint, the Company is strategically and operationally building for
a bright future.
Your Company completed 25 years in March, 2011. It is a matter of great
pride and reflective of the indomitable spirit driven by values and
powered by internal vitality. Your Board and all employees look forward
to the future with confidence and stand committed to creating a
brighter future for all stakeholders.
CORPORATE GOVERNANCE
Pursuant to Clause 49 of the Listing Agreement with the Stock
Exchanges, the Management Discussion and Analysis, Report on Corporate
Governance and a Certificate by the Managing Director (CEO) confirming
compliance by all the Board Members and Senior Management Personnel
with Company's Code of Conduct and Auditors' Certificate regarding
compliance of conditions of Corporate Governance are made a part of the
Annual Report.
DIRECTORSÃ RESPONSIBILITY STATEMENT
As required under Section 217 (2AA) of the Companies Act, 1956, your
Directors to the best of their knowledge and belief and according to
the information and explanation obtained by them, state that:-
- in the preparation of the Annual Accounts for the year ended March
31, 2011, the applicable accounting standards have been followed;
- the Company has selected such accounting policies, applied them
consistently, 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 the end of the financial year 2010-11 and of the
profit for the year ended March 31, 2011;
- proper and sufficient care has been taken 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 and other irregularities; and
- the attached Annual Statement of Accounts for the year ended March
31, 2011 have been prepared on a 'going concern' basis.
JOINT VENTURE
In view of the depressed market conditions, Birla Ericsson Optical
Ltd., a venture promoted by your Company in association with Universal
Cables Ltd. and Ericsson AB, Sweden has unfortunately shown a downturn
in financial performance during the year under review.
INDUSTRIAL RELATIONS
Industrial relations remained cordial throughout the year. The Board
wishes to place on record its sincere appreciation for the contribution
made by the employees to the significant improvement in operational
performance of the Company, their commitment and dedicated efforts in
most difficult and challenging environment during the year.
The Company continues to accord a very high priority to both industrial
safety and environmental protection and these are ongoing process at
the Company's plant and facilities.
RECOGNITION
The Company's manufacturing facilities continue to remain certified by
independent and reputed external agency as being compliant as well as
aligned with the external standards for Quality Management System
IS/ISO 9001:2008 and Environmental Management System IS/ISO 14001:2004.
During the year, the audits for these Certifications established
continuous improvement in performance against these standards.
DIRECTORS
Shri Harsh V.Lodha was appointed as Chairman of the Board of Directors
of the Company with effect from December 22, 2010.
In accordance with the provisions of the Companies Act, 1956 and the
Articles of Association of the Company, Shri S.K.Misra and Shri
Pracheta Majumdar, the Directors are due to retire by rotation at the
ensuing Annual General Meeting and being eligible have offered
themselves for re-appointment. Details about Directors seeking
re-appointment are given in the Notice of the ensuing Annual General
Meeting which is being sent to the shareholders along with Annual
Report.
AUDITORS
Messrs V. Sankar Aiyar & Co., Chartered Accountants, retire as Auditors
of the Company and, being eligible, offer themselves for
re-appointment.
Messrs D.Sabyasachi & Co., Cost Accountants have been appointed as Cost
Auditors for Cost Audit in respect of Cables.
AUDITORSÃ REPORT
Notes to the Accounts are self explanatory and therefore, do not call
for any further comments or explanations.
CONSOLIDATED FINANCIAL STATEMENTS
In accordance with Accounting Standard (AS-21) "Consolidated Financial
Statements" read with Accounting Standard (AS-27) "Financial Reporting
of Interests in Joint Venture", the Consolidated Financial Statements
form part of the Annual Report. These Group Accounts have been prepared
on the basis of audited financial statements received from subsidiaries
and a joint venture company, as approved by their respective Board of
Directors.
SUBSIDIARY COMPANIES
The statement pursuant to Section 212 of the Companies Act, 1956
containing details of subsidiaries of the Company, forms part of the
Annual Report.
In terms of approval granted by the Central Government under Section
212(8) of the Companies Act, 1956, the documents relating to subsidiary
companies as provided in Section 212(1) of the Companies Act, 1956 have
not been attached with the Balance Sheet of the Company. The Company
will make available hard copies of these documents, upon written demand
by any member of the Company interested in obtaining the same at any
point of time. These documents will also be kept at the Registered
Office of the Company as well as respective subsidiary companies for
inspection by any member of the Company. The consolidated financial
statements presented by the Company include audited financial
statements of its all subsidiaries, which are non-listed Indian
companies. None of the subsidiary company is a material non-listed
Indian Subsidiary company as defined under Clause 49 of the Listing
Agreement(s) with stock exchanges.
PARTICULARS OF EMPLOYEES
Particulars of employees in accordance with the provisions of Section
217(2A) of the Companies Act, 1956, read with the Companies
(Particulars of Employees) Rules, 1975, as amended, are not given as
none of the employees qualifies for such disclosure.
ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNINGS AND OUTGO
As required under Section 217(1)(e) of the Companies Act, 1956 and the
Rules made therein, the concerned particulars relating to Energy
Conservation, Technology Absorption, Foreign Exchange Earnings and
Outgo are given in Annexure, which is attached hereto and forms part of
the Directors' Report.
ACKNOWLEDGEMENT
The Board desires to place on record its grateful appreciation for the
excellent assistance and co-operation received from the State
Government and continued support extended to the Company by the
bankers, investors, suppliers and esteemed customers and other business
associates.
The Directors appreciate and value the contributions made by every
member of the VTL family.
Yours faithfully,
Harsh V. Lodha Chairman
J. Veeraraghavan
S.K. Misra
R.C. Tapuriah Directors
D.R. Bansal
Pracheta Majumdar
Y.S. Lodha Managing Director
New Delhi,
July 14, 2011
Mar 31, 2010
The Directors have the pleasure of presenting their Annual Report,
together with the Audited Financial Statements of the Company for the
year ended March 31, 2010.
ACCOUNTS & FINANCIAL MATTERS
2009-10 2008-09
Rs. in lacs Rs. in lacs
Turnover (Gross) 20908.34 27756.83
Other Income 854.99 648.93
21763.33 28405.76
The yearÃs working
shows a Gross Profit
/(Loss) (after
Interest) of - 1577.63 (401.12)
Less: Depreciation/
Amortisation 421.23 535.24
Profit/(Loss)
before Tax 1156.40 (936.36)
- Tax Credit of
earlier years (2.09) (17.37)
- Deferred Tax
(Credit) Ã (0.71)
- Fringe Benefit
Tax à 17.75
Net Profit/(Loss)
for the year 1158.49 (936.03)
Credit Balance
brought forward à 749.68
Adjusted by transfer
from General Reserve à 186.35
Surplus carried to
Balance Sheet 1158.49 Ã
Your Directors regret their inability to recommend any equity dividend
for the year in order to conserve cash resources for future business
requirements.
GENERAL & CORPORATE MATTERS
During the year under review, your Company has exhibited improved
financial performance despite a significant decrease in turnover driven
primarily by volume and price decline in the telecommunication cables
business. However, lower volumes in domestic market were offset
somewhat by higher exports to Europe, Middle East, SAARC countries and
countries in the African continent where the Company successfully added
new customers. The improvement in the profitability is attributable to
superior financial performance of the EPC Division which has
contributed handsomely in achieving the profits. The CompanyÃs gross
turnover decreased by approx. 25% and stood at Rs.20908.34 lacs during
the year under review as against Rs.27756.83 lacs during the
corresponding previous year. Your Company earned a gross profit (after
interest) of Rs.1577.63 lacs as compared to a loss of Rs.401.12 lacs, a
positive swing by Rs.1978.75 lacs, with reference to the previous year.
This is a noteworthy performance considering the extreme volatility in
commodity raw-materials where a significant part of the price increase
could not be passed on to the customers.
Turnover in Jelly Filled Telephone Cables was significantly down both
in volume and value terms during the year, as the CompanyÃs major
customer, Bharat Sanchar Nigam Ltd. stayed away from floating a new
tender due to negative growth in fixed line telephone subscribers base.
The demand from other private operators also remained restricted for
maintenance of networks to a major extent which added to the woes of
the JFTC manufacturers.
Further, a cautious investment approach by telecom operators for
networks expansion reduced volumes and turnover of optical fibre cables
business and negatively impacted the overall profitability, volume and
turnover. Lower demand of Ribbon type high fibre count Optical Fibre
Cables from Bharat Sanchar Nigam Ltd. coupled with predatory pricing
for other types of optical fibre cables have also contributed in
reduced turnover to a significant extent. However, after overcoming
several hiccups and roadblocks, the GovernmentÃs decision to auction
the 3G Spectrum during the course of ensuing financial year and planned
investment for extending affordable broadband connectivity to all
villages by leveraging infrastructure and augmentation of optical fibre
cables network will provide a major thrust to the capacity utilisation
of the optic fibre cable plant.
Despite telecommunication cables market lagging the growth in economy,
in longer term the Company believes that the appetite for higher
bandwidth and renewed impetus of the Government on penetration of
broadband connectivity in the country will drive demand for
telecommunication cables. The Company has therefore put in place clear
and consistent priorities to invest in the future to create increased
and new revenue streams by continuously upgrading and modernising the
production facilities with a specific focus on reduction in costs and
protecting financial health by conserving cash.
During the year under review, your Company maintained its share in the
supply of quad cables to Railways and other private customers. Other
new products like Simplex Cable, Micro Cable, Premise Cable, Control
and Instrumentation Cables have already enabled the Company to move
forward and attain a fair market share immediately.
The CompanyÃs vision to be a benchmark solution provider by undertaking
turnkey projects through the new EPC Division has paved the way for
this yearÃs impressive performance and also for a significant growth in
the immediate future. The EPC Division has clocked a turnover of
Rs.8985.93 lacs as against Rs.4080.51 lacs in the previous year and
lived up to the expectation and potential envisaged at the beginning of
the financial year under review. As mentioned in your earlier
Directorsà Report the EPC Division has completed the first overseas
project awarded by a globally renowned telecom operator in connection
with laying of optical fibre cables. The EPC Division will play a major
role in realising the CompanyÃs mission with the entire Indian economy
moving towards infrastructure development through power, telecom and
other areas as your Company has already established a solid foundation
in these domains. The current business verticals of the EPC Division
viz. telecom, power and Gas distribution pipelines are already
comfortable with backlog of orders and your Board is confident that the
DivisionÃs positive business momentum will continue and enable your
company to deliver better results in future. With the increasing
importance of human resources in different business verticals of EPC
Division, emphasis has been laid on capability building and enhancing
the effectiveness of specialised teams besides strengthening the
leadership.
Your Company has identified the acute shortage of trained manpower for
both the rollout and subsequent operation and maintenance of the OFC
and FTTx networks by major telecom operators and has converted it into
an opportunity to make a Training Institute as a separate profit
centre. To this end, the Company has identified a site and is in the
process of establishing an Institute which will provide a regular
source of trained personnel for the CompanyÃs future projects. The
Institute is likely to commence operation by middle of ensuing fiscal
year.
CORPORATE GOVERNANCE
Pursuant to Clause 49 of the Listing Agreement with the Stock
Exchanges, the Management Discussion and Analysis, Report on Corporate
Governance and a Certificate by the Managing Director (CEO) confirming
compliance by all the Board Members and Senior Management Personnel
with CompanyÃs Code of Conduct and Auditorsà Certificate regarding
compliance of conditions of Corporate Governance are made a part of the
Annual Report.
DIRECTORSÃ RESPONSIBILITY STATEMENT
As required under Section 217 (2AA) of the Companies Act, 1956, your
Directors to the best of their knowledge and belief and according to
the information and explanation obtained by them, state that:- - in the
preparation of the Annual Accounts for the year ended March 31, 2010,
the applicable accounting standards have been followed;
- the Company has selected such accounting policies, applied them
consistently, made judgements 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 the end of the financial year 2009-10 and of the
profit for the year ended March 31, 2010;
- proper and sufficient care has been taken 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 and other irregularities; and
- the attached Annual Statement of Accounts for the year ended March
31, 2010 have been prepared on a Ãgoing concernà basis.
JOINT VENTURE
Birla Ericsson Optical Ltd., a venture promoted by your Company in
association with Universal Cables Ltd. and Ericsson AB, Sweden has made
a positive turnaround during the year under review.
INDUSTRIAL RELATIONS
Industrial relations remained cordial through out the year. The Board
wishes to place on record its sincere appreciation for the contribution
made by the employees to the significant improvement in operational
performance of the Company, their commitment and dedicated efforts in
most difficult and challenging environment during the year.
The Company continues to accord a very high priority to both industrial
safety and environmental protection and these are on going process at
the CompanyÃs plant and facilities.
RECOGNITION
During the year under review, the Company was conferred ÃExport House
(EH)Ã status by Government of India, Ministry of Commerce & Industry
based on its export performance.
DIRECTORS
The Board of Directors of the Company at its Meeting held on October
30, 2009 has re-appointed Shri Y.S. Lodha as the Wholetime Director and
re-designated him as the Managing Director of the Company for a further
period of 3 (three) years with effect from November 4, 2009 to November
3, 2012 for which requisite approvals including from members of the
Company vide a Special Resolution passed at the Extra-Ordinary General
Meeting held on December 21, 2009 have been obtained.
In accordance with the provisions of the Companies Act, 1956 and the
Articles of Association of the Company, Shri Harsh V. Lodha and Shri
J.Veeraraghavan, the Directors are due to retire by rotation at the
ensuing Annual General Meeting and being eligible have offered
themselves for re-appointment. Details about Directors seeking
re-appointment are given in the Notice of the ensuing Annual General
Meeting which is being sent to the shareholders along with Annual
Report.
AUDITORS
Messrs S.R. Batliboi & Co., Chartered Accountants retire as Auditors at
the ensuing Annual General Meeting and have given an intimation in
writing expressing their inability to be re-appointed as Statutory
Auditors of the Company. Your Directors recommend the appointment of
Messrs V. Sankar Aiyar & Co., Chartered Accountants, who being
eligible, have expressed their willingness to be appointed as Statutory
Auditors of the Company.
Messrs D. Sabyasachi & Co., Cost Accountants have been appointed as
Cost Auditors for Cost Audit in respect of Cables.
AUDITORSÃ REPORT
The remark of Auditors at Para 4.vi of the Auditorsà Report read with
Note No. 6 in Schedule 23 - Notes to the Accounts are self explanatory
and therefore, do not call for any further comments or explanations.
CONSOLIDATED FINANCIAL STATEMENTS
In accordance with Accounting Standard (AS)-21 ÃConsolidated Financial
Statementsà read with Accounting Standard (AS)-27 ÃFinancial Reporting
of Interests in Joint VentureÃ, the Consolidated Financial Statements
form part of the Annual Report. These Group Accounts have been prepared
on the basis of audited financial statements received from Subsidiaries
and a Joint Venture Company.
SUBSIDIARY COMPANIES
The statement pursuant to Section 212 of the Companies Act, 1956
containing details of Subsidiaries of the Company, forms part of the
Annual Report.
The Company has sought exemption from the Central Government under
Section 212(8) of the Companies Act, 1956, from attaching to the
Balance Sheet of the Company, the accounts and other reports of its
Subsidiary companies. Accordingly, the annual accounts relating to
Subsidiary companies as provided in Section 212(1) of the Companies
Act, 1956 have not been attached with the Balance Sheet of the Company.
The Company will make available hard copies of these documents, upon
written demand by any member of the Company interested in obtaining the
same at any point of time. The Company has displayed details of the
accounts of individual Subsidiary companies in its website as well.
These documents will also be kept at the Registered Office of the
Company and of the respective Subsidiary companies for inspection by
any member of the Company. The consolidated financial statements
presented by the Company include audited financial statements of its
all subsidiaries which are non-listed Indian companies. None of the
Subsidiary company is a material non-listed Indian Subsidiary company
as defined under Clause 49 of the Listing Agreement(s) with stock
exchanges.
PARTICULARS OF EMPLOYEES
Particulars of employees in accordance with the provisions of Section
217(2A) of the Companies Act, 1956, read with the Companies
(Particulars of Employees) Rules, 1975, as amended, are not given as
none of the employees qualifies for such disclosure.
ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNINGS AND OUTGO
As required under Section 217(1)(e) of the Companies Act, 1956 and the
Rules made therein, the concerned particulars relating to Energy
Conservation, Technology Absorption, Foreign Exchange Earnings and
Outgo are given in Annexure, which is attached hereto and forms part of
the Directorsà Report.
ACKNOWLEDGEMENT
The Board desires to place on record its grateful appreciation for the
excellent assistance and co-operation received from the State
Government and continued support extended to the Company by the
bankers, investors, suppliers and esteemed customers and other business
associates.
Yours faithfully,
Harsh V. Lodha
J. Veeraraghavan
S.K. Misra
R.C. Tapuriah Directors
D.R. Bansal
Pracheta Majumdar
Y.S. Lodha Managing
Director
New Delhi, May 11, 2010
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