Mar 31, 2018
Directorsâ Report
TO THE SHAREHOLDERS
Your Directors have the pleasure of presenting their Seventy Third Annual Report, together with the Audited Financial Statements of your Company for the year ended 31st March, 2018.
SUMMARY OF FINANCIAL RESULTS & STATE OF COMPANYâS AFFAIRS
Description |
Amount Rs, in lakhs |
|
2017-18 |
2016-17 |
|
Gross Revenue |
122018.21 |
90878.69 |
Earnings before Finance Costs, Depreciation and Tax |
11797.27 |
8609.20 |
Finance Costs |
5343.26 |
4397.12 |
Profit before Depreciation and Tax |
6454.01 |
4212.08 |
Depreciation and Amortization |
2090.23 |
1889.16 |
Profit before Tax |
4363.78 |
2322.92 |
Tax Expenses/(Credit) |
169.32 |
(587.73) |
Net Profit for the year |
4194.46 |
2910.65 |
Your Company has adopted Indian Accounting Standards (Ind AS) with effect from 1st April, 2017 (transition date being 1st April, 2016). Accordingly, the financial statements for the year ended 31st March, 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 achieved the total Gross Revenue of Rs, 122018.21 lakhs in the current fiscal as compared to Rs, 90878.69 lakhs in the previous fiscal registering an increase of 34.26%. The revenue from exports for your Company increased significantly to Rs, 8685.94 lakhs as compared to Rs, 3518.40 lakhs during the previous year, with Company making inroads into newer geographies. Earnings before interest (finance costs), tax, depreciation and amortization (EBITDA) during the current financial year is Rs, 11797.27 lakhs as compared to Rs, 8603.20 lakhs in the previous fiscal. During the year under review, the Company earned Profit before Tax of Rs, 4363.78 lakhs as compared to Rs, 2322.92 lakhs in the previous fiscal reflecting a robust increase of 87.86%. Profit after Tax stood at Rs, 4194.46 lakhs in the current fiscal year as compared to Rs, 2910.65 lakhs in the previous fiscal year showing an impressive growth of 44.11%.
Apart from the figures stated above, other key financial ratios e.g., leverage ratio, liquidity ratios and important efficiency ratios shows a marked improvement in your Companyâs operations.
The performance of your Company marked a notable improvement during the year under review. This sets an upswing trend on your Companyâs year-on-year performance. Overall, the improved performance can be attributed to the strategic initiatives taken by the Company, interalia, for meeting and anticipating customer needs timely, improving operational efficiencies with the end-goals of delivering products of highest quality at competitive costs, achieving manufacturing excellence through gradual up gradation of plant and equipment with consequential capacity augmentation and aligning the same with the long term objectives. Your Company has been consistently striking a balance on the operating risks and the strategic business efforts. Your Company has been upgrading its manufacturing infrastructure in a phased manner with the twin objectives of augmenting the capacity and cost reduction which has also paid off in terms of increased production, better process capabilities, improved quality, energy conservation and lower manufacturing cost.
With the underlying objectives to create business value, growth and market reach, your Company seized the opportunity to cater to the turnkey business model for Extra High Voltage (EHV) underground transmission system and has emerged to be the leading player in this specialized market segment, especially, having the facility for manufacturing eHv cables, the highest cost element of such turnkey projects. With the demand in this segment growing steadily and which is expected to continue to meet the infrastructural needs in the country, your Company is in a position to take advantage of the captivating challenges playing-out. In changeable circumstances, where there is an asymmetrical demand pattern, your Company is equipped to change gears in line with the demand scenario having a flexible manufacturing facility which can switch between EHV & Hv, the major product groups. Your Company is also in the process of augmenting its HV manufacturing capacity by way of installing a new generation cCv line dedicated to the manufacturing of HV & MV cables. This new infrastructure is being added to cater to the foreseeable demand as an outcome of the large infrastructural investment and the stimulus for inclusive growth under the Governmentâs manifesto for "Make-in-Indiaâ.
During the year under review, your Company has successfully migrated to a higher version of its existing software SAP to SAP HANA for improved data management, integration of functional departments, exercising better control and improved technical support.
Your Company has always maintained its policy to retain talent and also to hone the skills of its employees for deliverance of their capabilities and creativity to contribute to their workplace and your Company at large.
Your Company pays considerable importance to occupational and health safety for protecting all levels of employees from risks, hazards and accidents as well as protecting your Companyâs assets. Mandatory safety-drills are in force as a routine. Environment protection are diligently followed. Your Company is pleased to report that there has been no untoward incidence in the Plant on health & safety issues. In a recent drive, the Plant aesthetics have undergone significant improvement creating an ambiance for an appreciable working place.
Your Company continues its drive in optimizing the raw-material consumption and production cost, reduction of inventories and rationalization of manpower to remain competitive in the market.
DIVIDEND
After considering the Companyâ profitability, free cash flow and overall financial performance, the Board of Directors of the Company is pleased to recommend a Dividend of '' 1.50 per equity share of face value of '' 10/- each (i.e. 15%) for the financial year ended 31st March,
2018. The distribution of Dividend on equity shares, if approved by the Members at the ensuing Annual General Meeting, will result in payout of '' 520.43 lakhs excluding Tax on Dividend and surcharge/education cess thereon, as applicable.
SHARE CAPITAL
During the year under review, there is no change in the Issued, Subscribed and Fully paid-up equity share capital of the Company. The Fully paid-up equity share capital of the Company as on 31st March, 2018 is '' 3469.83 lakhs. However, dispatch of share certificate(s) in physical form and credit in the respective demat account(s) in respect of 27,05,553 number of additional equity shares, in aggregate, allotted to certain allottees under category âCâ of the basis of allotment as per the Letter of Offer of the Rights Issue during the year 2015-16, have not yet been completed in view of the status-quo order passed by the Honâble High Court of Delhi on 18th November, 2015. DEPOSITS/FINANCE
Your Company has not accepted any public deposits within the meaning of Section(s) 73 to 76 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014 during the year under review. 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. During the year under review, your Company has also availed alternate cheaper funding option like issuance of Commercial Papers in order to reduce 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 Manager & Chief Executive Officer (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 (CSR)
The Company has constituted the CSR Committee in accordance with Section 135(1) of the Companies Act, 2013, the details of which have been provided in the Corporate Governance Report forming part of the Annual Report. The Annual Report on CSR activities as required to be given under Section 135 of the Companies Act, 2013 read with Rule 8 of the Companies (Corporate Social Responsibility Policy) Rules, 2014 has been provided in Annexure-I which 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.unistar.co.in.
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 31st March, 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 31st March, 2018 and the profit of the Company for the year ended on that date. The Company adopted Indian Accounting Standards (Ind AS) effective from 1st April, 2017 with transition date being 1st April, 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 1st April, 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 the 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 your 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 including additional oversight in the area of financial risks and controls, the proposed budget and plan, Companyâs strategic framework besides inherent risks associated with the products/goods dealt with by the Company as well as execution of turnkey projects. Your Companyâs approach to address business risks and compliance functions is comprehensive across the business and includes periodic review of such risks and a framework for mitigating and reporting mechanism of such risks. The Companyâs business and functions are systematically addressed through mitigating actions on a continuing basis. In the view of the Board of Directors, there are no material risks, which may threaten the existence of your 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 the 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. Your Company has defined organization structure, authority levels, delegated powers, internal procedures, rules and guidelines for conducting business transactions. Your 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 applicable accounting standards 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 Board has also implemented systems to ensure compliance of all applicable laws to the Company which were effective and operative during the year under review. 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.
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 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.
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. Your Company has also stressed the need to adopt the highest safety standards on turnkey projects undertaken for EHV power cables 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 for its people as well as users and customers.
RECOGNITION
Your Companyâs manufacturing facilities and functional departments continue to remain certified by independent and reputed external agencies as being compliant as well as aligned with international standards for Quality Management System ISO 9001:2015, 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.
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.
Shri Dilip Ganesh Karnik (DIN: 06419513) has been appointed as an Additional Director of the Company with effect from 15th November, 2017 pursuant to Sections 149 and 161 of the Companies Act, 2013, read with the rules framed thereunder and Article 140 of the Articles of Association of the Company and holds the office upto the date of the 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 23rd May, 2018 has recommended the appointment of Shri Dilip Ganesh Karnik as Director, liable to retire by rotation. The Board recommends the appointment of Shri Dilip Ganesh Karnik as Director, liable to retire by rotation for the consideration of the members of the Company at the ensuing Annual General Meeting. The brief resume and other information/details of Directors seeking appointment/re-appointment, as required under Regulation 36(3) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 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
The Board upon the recommendation/approval of the Nomination and Remuneration Committee, at its Meeting held on 7th February, 2018 has, subject to the approval of Members of the Company by way of a Special Resolution, re-appointed Shri Y.S.Lodha as the Manager & Chief Executive Officer of the Company for a further period of three (3) years effective from 15th May, 2018 to 14th May, 2021.
The information/details of Shri Y.S.Lodha, Manager & Chief Executive Officer seeking re-appointment, as required under 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 alongwith Annual Report.
Shri Pankaj Gupta, who was appointed as Chief Financial Officer of the Company, has resigned from the services of the Company with effect from 25th August, 2017. Shri Prasanta Pandit has been appointed as Chief Financial Officer of the Company with effect from 15th November, 2017.
Shri Y.S.Lodha, Manager & Chief Executive Officer, Shri Prasanta Pandit, Chief Financial Officer and Shri Om Prakash Pandey, Company Secretary are the key managerial personnel of the Company.
DECLARATION BY INDEPENDENT DIRECTORS
All Independent Directors of your Company viz. Shri S.S. Kothari, Shri S.C. Jain, Shri Dinesh Chanda and Dr. Kavita A. Sharma 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 five times viz. on 5th May, 2017, 15th May, 2017, 8th August, 2017, 15th November, 2017 and 7th February, 2018.
As required under Section 177(8) read with Section 134(3) of the Companies Act, 2013 and the rules framed thereunder, 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, the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and Guidance Note on Board evaluation issued by SEBI, the Board of Directors of your Company carried out the formal annual evaluation of its own performance and that of its Committees and individual Directors. 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, 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 the performance of the Chairman (taking into account the views of Non-executive Directors and Manager & Chief Executive Officer), 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, 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 Directors based on their qualifications, expertise, positive attributes and independence in accordance with prescribed provisions of the Companies Act, 2013 and rules framed thereunder and the 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, key managerial personnel and senior management personnel. The salient features of the Remuneration Policy are stated in the Report on Corporate Governance, which forms a part of the Annual Report. The Remuneration Policy is uploaded on the website of the Company and the web link of the same is http://www.unistar.co.in/pdf/Policy_for_Remuneration_forBoard_Members_Exective_Management.pdf. During the year under review, there was no change in the Remuneration Policy.
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 stated 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, Messers
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 Seventy Seventh (77th) Annual General Meeting of the Company 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 thereunder.
The Board of Directors has re-appointed Messers 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 form 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 in whole time practice (PCS Registration No.14474) were appointed to undertake the Secretarial Audit of the Company for the year ended 31st March, 2018. The Report of the Secretarial Auditors for the year ended 31stMarch, 2018 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 Secretarial Auditors 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 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 on an armâs 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 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 the same can be accessed at weblink http://www.unistar.co.in/pdf/Policy_Relate_Party_Transactions.pdf.
ASSOCIATE AND JOINT VENTURE
Your Company has an associate company viz. Vindhya Telelinks Limited and a joint venture company viz. Birla Furukawa Fibre Optics Private Limited. Vindhya Telelinks Limited, an associate company is engaged in the business of manufacturing and sales of telecommunication cables, other types of wires and cables, FRP rods/Glass rovings, etc. and Engineering, Procurement and Construction (EPC) business. Birla Furukawa Fibre Optics Private Limited, joint venture company, established in pursuance to a Joint Venture Agreement entered into between your Company and Furukawa Electric Co. Ltd., Japan and engaged in the business of manufacturing and sales of telecommunication grade Optical Fibres. Both Vindhya Telelinks Limited, an associate company and Birla Furukawa Fibre Optics Private Limited, joint venture company have 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 an associate company and joint venture company 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 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 rules made thereunder read with Indian Accounting Standards specified under the Companies (Indian Accounting Standards), Rules, 2015, viz. Indian Accounting Standard (Ind AS)-110 "Consolidated Financial Statementsâ and Indian Accounting Standard (Ind AS)-28 "Investments in Associates and Joint Venturesâ, the audited Consolidated Financial Statements of the Company as of and for the year ended 31st March, 2018, forms a part of the Annual Report.
PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS
The particulars of Loans, Guarantees and Investments pursuant to Section 186 of the Companies Act, 2013 have been disclosed in the financial statements read together with Notes annexed 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.
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, is not applicable, as none of the employees during the year under review was in receipt of remuneration as specified under the said Rule.
EXTRACT OF ANNUAL RETURN
An Extract of Annual Return as per 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.
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 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 31st March, 2018.
(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 thereunder. 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 and 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 the Directorsâ Report.
(e) No frauds were reported by Auditors in terms of Section 143(2) of the Companies Act, 2013 and rules, if any, made thereunder. 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, 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)
S.C. Jain
(DIN: 00194087)
Dinesh Chanda
(DIN: 00939978)
B R. Nahar Directors
(DIN: 00049895)
Kavita A. Sharma
(DIN: 07080946)
Dilip Ganesh Karnik
(DIN: 06419513)
New Delhi 23rd May, 2018
Mar 31, 2017
TO THE SHAREHOLDERS
The Directors have the pleasure of presenting their Seventy Second Annual Report, together with the Audited Financial Statements of your Company for the year ended 31st March, 2017.
SUMMARY OF FINANCIAL RESULTS & STATE OF COMPANYâS AFFAIRS
Description |
Amount Rs. in lakhs |
|
2016-17 |
2015-16 |
|
Total Gross Revenue (including Other Income) |
90934.80 |
84105.84 |
Earning before Finance Costs, Depreciation and Tax |
8565.27 |
8618.47 |
Finance Costs |
4425.19 |
5117.48 |
Profit before Depreciation and Tax |
4140.08 |
3500.99 |
Depreciation and Amortization |
1889.16 |
1765.19 |
Profit before Tax |
2250.92 |
1735.80 |
Tax Expenses/(Credit) |
(587.73) |
(219.15) |
Net Profit for the year |
2838.65 |
1954.95 |
GENERAL & CORPORATE MATTERS
Your Company has achieved the total gross revenue of Rs. 90934.80 lakhs in the current fiscal as compared to Rs. 84105.84 lakhs in the previous fiscal, an increase of 8.12%. Earnings before interest (finance costs), tax, depreciation and amortization (EBITDA) is Rs. 8565.27 lakhs as compared to Rs. 8618.47 lakhs in the previous fiscal. Profit before tax increased to Rs. 2250.92 lakhs as compared to Rs. 1735.80 lakhs in the previous fiscal, an increase of 29.68%. Profit after tax increased to Rs. 2838.65 lakhs in the current fiscal as compared to Rs. 1954.95 lakhs in the previous fiscal, an increase of 45.20% after availing of tax credit.
Apart from the profitability ratios mentioned, other key financial ratios e.g., leverage ratio, liquidity ratios and important efficiency ratios shows a marked improvement in your Companyâs operations. The net interest paid by your Company reduced by 19.14% over the previous fiscal which has significantly improved the cash flow.
The performance of your Company marked a perceivable improvement over the previous fiscal. In context to the industry and its position in the economic environment and market variables, the results are seen to be favourable. Your Company was able to weather an overall frail growth in demand coupled with an intensely competitive environment. Your Companyâs thrust has been on reshuffling the product-mix conducive to its bottom-line, optimal allocation of resources, flexible planning and exercising austerity measures across all functional activities.
There is a clear and present danger of competition having risen to a higher water-mark with new players penetrating into the high-end market space. Your Company has, therefore, taken a decision for exercising austerities in all sphere of its operation, further improving productivity and focusing on repayment of the debts gradually from internal accruals. This would enable your Company to become operationally more competitive.
Your Company has implemented CAPEX in the Plant for the fiscal, typically aimed at energy conservation and reduction of manufacturing cycle for meeting the short delivery requirements of the customers.
Your Company is migrating to a higher version of its existing software SAP to SAP HANA for improved data management, integration of functional departments, exercising better control and improved technical support.
Your Company has always maintained its policy to retain talent and also to hone the skills of its employees for deliverance of their capabilities and creativity to contribute to their work place and your Company at large.
Though the going would be interlaced with many challenges your Company is confident to overcome these as the fundamentals of your Company are strong and strategic initiatives taken have started to pay off.
DIVIDEND
Though the Company has earned profit during the year under review, however, in order to retain the earnings for business growth, your Companyâs Board of Directors has decided not to propose dividend on equity shares for the financial year ended 31st March, 2017.
SHARE CAPITAL
During the year under review, there is no change in the Issued, Subscribed and Fully paid-up equity share capital of the Company. The Fully paid-up equity share capital of the Company as on 31st March, 2017 is Rs. 3469.83 lakhs. However, dispatch of share certificate(s) in physical form and credit in the respective demat account(s) in respect of 27,05,553 number of additional equity shares, in aggregate, allotted to certain allottees under category âCâ of the basis of allotment as per the Letter of Offer of the Rights Issue during the year 2015-16, have not yet been completed in view of the status-quo order passed by the Honâble High Court of Delhi on 18th November, 2015.
DEPOSITS/FINANCE
Your Company has not accepted any public deposits within the meaning of Section(s) 73 to 76 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014 during the year under review. 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 in order to ensure 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 Manager & Chief Executive Officer (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 (CSR)
The Company has constituted the CSR Committee in accordance with Section 135(1) of the Companies Act, 2013, the details of which have been provided in the Corporate Governance Report forming part of the Annual Report. The Board of Directors has approved the CSR policy which is available on the Companyâs website www.unistar.co.in. The Annual Report on CSR activities as required to be given under Section 135 of the Companies Act, 2013 read with Rule 8 of the Companies (Corporate Social Responsibility Policy) Rules, 2014 has been provided in Annexure-I which attached hereto and forms a part of the Directorsâ Report.
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 31st March, 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 31st March, 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;
(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 your 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 including additional oversight in the area of financial risks and controls, the proposed budget and plan, your Companyâs strategic framework besides inherent risks associated with the products/goods dealt with by the Company as well as execution of turnkey projects. Major risks identified by the Companyâs business and functions are systematically addressed through mitigating actions on a continuing basis. In the view of the Board of Directors, there are no material risks, which may threaten the existence of your 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 the 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. Your Company has defined organization structure, authority levels, delegated powers, internal procedures, rules and guidelines for conducting business transactions. Your 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 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.
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. Your Company has also stressed the need to adopt the highest safety standards on turnkey projects undertaken for EHV power cables 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 for its people as well as users and customers.
RECOGNITION
Your Companyâs manufacturing facilities and functional departments continue to remain certified by independent and reputed external agencies as being compliant as well as aligned with the international standards for Quality Management System ISO 9001:2008, Environmental Management System ISO 14001:2004, Occupational Health and Safety Management System OHSAS 18001:2007 and Social Accountability Policy SA-8000. 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 B.R. Nahar (DIN 00049895), 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.
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.
KEY MANAGERIAL PERSONNEL
Shri Y.S. Lodha, Manager & Chief Executive Officer, Shri Pankaj Gupta, Chief Financial Officer and Shri Om Prakash Pandey, Company Secretary are the key managerial personnel of the Company. Shri Sanjay Kumar, who was appointed as Chief Financial Officer of the Company, no longer in the services of the Company with effect from 23rd August, 2016. Shri Pankaj Gupta has been appointed as Chief Financial Officer of the Company with effect from 2nd December, 2016.
DECLARATION BY INDEPENDENT DIRECTORS
All Independent Directors of your Company viz. Shri S.S. Kothari, Shri S.C. Jain, Shri Dinesh Chanda and Dr. Kavita A. Sharma 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 five times viz. on 18th May, 2016, 12th July, 2016, 11th August, 2016, 10th November, 2016 and 9th February, 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, the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and Guidance Note on Board evaluation issued by SEBI, the Board of Directors of your Company carried out the formal annual evaluation of its own performance and that of its Committees and individual Directors. 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, 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), 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, 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 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 the 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, key managerial personnel and senior management personnel. 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 Auditors to hold office until the conclusion of the ensuing Annual General Meeting of the Company. Since Messrs V. Sankar Aiyar & Co., Chartered Accountants 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 Auditors of the Company for another term of 5 (five) years from the conclusion of the ensuing Annual General Meeting (72nd AGM) till the conclusion of Seventy Seventh Annual General Meeting (77th AGM), 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 there under. A certificate has been received from them to the effect that their re-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 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 accounting 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 plus applicable taxes thereon and reimbursement of out of pocket expenses to be paid to the 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 form 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 31st March, 2017. 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 an armâs length basis and in the ordinary course of business and that the provisions of Section 188 of the Companies Act, 2013 and the Rules made there under are not attracted. Thus, disclosure in Form AOC-2 in terms of Section 134 of the Companies Act, 2013 is not required. There are no material significant related party transactions entered into 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. Further, none of the Directors has any pecuniary relationship or transactions vis-a-vis the Company.
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 the same can be accessed at weblink http://www.unistar.co.in/pdf/Policy_Relate_Party_Transactions.pdf.
ASSOCIATE AND JOINT VENTURE
Your Company has an associate company viz. Vindhya Telelinks Limited and a joint venture company viz. Birla Furukawa Fibre Optics Private Limited. Vindhya Telelinks Limited, an associate company is engaged in the business of manufacturing and sales of Telecommunication Cables, other types of wires and cables, FRP rods/Glass rovings, etc. and Engineering, Procurement and Construction (EPC) business. Birla Furukawa Fibre Optics Private Limited, joint venture company, established in pursuance to a Joint Venture Agreement entered into between your Company and Furukawa Electric Co. Ltd., Japan and engaged in the business of manufacturing and sales of telecommunication grade Optical Fibres. Both Vindhya Telelinks Limited, an associate company and Birla Furukawa Fibre Optics Private Limited, joint venture company have achieved sustained growth in business with improved 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 24th August, 2016 upon termination of Joint Venture Agreement entered into by your Company along with Vindhya Telelinks Limited 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.
A Statement containing the salient features of the financial statements of an associate company and joint venture company 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 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 made there under, read with Accounting Standard (AS)-21 "Consolidated Financial Statementsâ, Accounting Standard (AS)-27 "Financial Reporting of Interests in Joint Ventureâ and Accounting Standard (AS)-23 "Accounting for Investments in Associates in Consolidated Financial Statementsâ, the audited Consolidated Financial Statements of the Company as of and for the year ended 31st March, 2017, 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 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 disclosure of Remuneration and such other details as prescribed therein are given in Annexure -III, 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, is not applicable, as none of the employees during the year under review was in receipt of remuneration as specified under the said Rule.
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 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-V, 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 31st March, 2017.
(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 and 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 the Directorsâ 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 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, 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)
Dinesh Chanda
(DIN: 00939978) Directors
B.R. Nahar
(DIN: 00049895)
Kavita A. Sharma
(DIN: 07080946)
New Delhi
15th May, 2017
Mar 31, 2014
DEAR SHAREHOLDERS
The Directors have pleasure in presenting their Annual Report,
together with the Audited Financial Statements of the Company for the
year ended 31st March, 2014
FINANCIAL RESULTS
Amount (Rs. in lacs)
Description Year Ended Year Ended
31st March,2014 31st March,2013
Gross Income 68660.84 69254.42
Earnings before
Interest,Depreciation
and Tax (EBITDA) 561.72 3314.20
Finance Cost 3285.81 2532.48
Profit/(Loss) before
Depreciation and Tax (2724.09) 781.72
Depreciation and Amortization 1687.34 1476.88
Earlier Year Taxes - 1.20
Deferred Tax (Credit) (405.55) 1281.79 (234.09) 1243.99
(Loss) for the year (4005.88) (462.27)
Surplus brought forward
from previous year 4444.91 4907.18
Surplus carried to
Balance Sheet 439.03 4444.91
In view of the loss, your Directors regret their inability to recommend
any dividend for the year under consideration.
GENERAL & CORPORATE MATTERS
Despite subdued market scenario in the Power Sector, your Company has
been able to achieve gross revenue of Rs. 686.61 crores in the current
fiscal as compared to Rs. 692.54 crores for the previous year. However,
the magnitude of loss suffered for the year is higher at Rs. 40.06
crores as compared to Rs. 4.62 crores for the previous fiscal.
During the year under review, the operations of your Company have been
severely impacted due to increased finance cost arising from extended
debtors cycle in the industry, the slow-down in the power transmission
segment adversely affecting the EHV cable demand which is your
Company''s key product coupled with predatory pricing strategy adopted
by certain overseas players leading to severe pressure on margins. Many
of the power infrastructural projects have been temporarily stalled due
to the policy impasse on substantive issues of environmental
clearances, Rights of-the-Way permissions, coal linkages/allocation and
revision in power purchase agreement, etc. This has caused
unanticipated deferment in their delivery schedule for the Company''s
products leading to higher inventory of finished goods and payment hold
up intensifying liquidity pressure on the Company. In addition to the
above, apart from the other key imported raw-materials, the prices of
bulk raw-materials such as Copper & Alumunium though indigenously
sourced, are linked with the foreign exchange rates. The depreciation
of the rupee has therefore severely affected the margins as the
industry mainly operates on firm price contracts. Under the present
business environment, your Company has decided to re-structure its
business strategy by broadening its market base. To de-risk itself from
aberrations of a polarized Extra High Voltage (EHV) market segment, in
which your Company is a formidable player and equipped with
best-in-class VCV technology, it has expanded its capacity in the
Medium Voltage (MV) and Light Duty cable verticals. The overall
increase in the manufacturing capacity in the MV & Light Duty cable
verticals would transform the Company into a competitive manufacturing
base. The Company is focusing on products and customers from where
better margins are available.
Your Company has also ventured into execution of turnkey projects for
capacitors banks where the margins are reasonably remunerative.
Constant efforts are being made by your Company to enhance productivity
with a view to gain competitive edge. In a parallel effort, your
Company is continuously upgrading and modernizing the production
facilities with a special focus on production cost reduction,
optimization of raw material consumption and rationalization of
manpower.
Your Company''s strength lies in its technological primacy, advanced
manufacturing facilities, high-end products, brand equity and skilled &
talented manpower. Therefore, once the power & other infrastructural
segment recovers from the present slump, the Company would emerge
stronger.
CORPORATE GOVERNANCE
Pursuant to Clause 49 of the Listing Agreement(s) with the Stock
Exchanges, Management Discussion and Analysis, Corporate Governance
Report and Certificate by Chief Mentor & Executive Director 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 attached hereto
and forms part of this Directors'' 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 31st
March, 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 loss
for the year ended 31st March, 2014;
* proper and sufficient care have 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 31st
March, 2014 have been prepared on a ''going concern'' basis.
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 Harsh V. Lodha, 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 Bachh Raj Nahar
was appointed as an Additional Director w.e.f. 19th May, 2014 and he
shall hold office upto the date of the ensuing Annual General Meeting.
The Company has received requisite notice in writing from a member
proposing Shri Bachh Raj Nahar for appointment as a Director of the
Company, liable to retire by rotation.
Pursuant to Section 149(6) of the Companies Act, 2013, Independent
Directors are required to inform their status as to ''Independent
Director'' (ID) in the first meeting of the Board of Directors in which
they participate and thereafter at the first meeting of the Board in
every financial year. Accordingly four of the Directors of your Company
viz. (i) Shri S.S. Kothari, (ii) Shri S.C. Jain, (iii) Dr. S.R. Jain
and (iv) Shri Dinesh Chanda have declared their adherence to the
criteria fixed under Section 149(6) for ''Independent Directors''. The
Board of Directors of the Company at its meeting held on 19th May, 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 1st April, 2014. Your Board has deemed it
prudent and recommended to the Shareholders their appointment as IDs
for a period of upto 5 years with effect from 1st April, 2014 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.
Shri J.C. Sharma, a Director of the Company has left for his heavenly
abode on 31st January, 2014. The Board gratefully places on record its
deep sense of appreciation for the services rendered by Shri J.C.
Sharma during his tenure as Director 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.
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. In other
words, the Company can make appointment of auditor for five years at a
time. Since Messrs V. Sankar Aiyar & Co. has been functioning as
Auditors of the Company since last two consecutive years, the Board of
Directors unanimously agreeing to the recommendation of the Audit
Committee, further recommends re-appointment of M/s V.Sankar Aiyar &
Co. as Statutory Auditors of the Company for further period of upto
three financial year starting from 1st April, 2014 to hold office from
the conclusion of the ensuing Annual General Meeting until the
conclusion of the next third Annual General Meeting of the Company
subject to ratification by shareholders in the subsequent Annual
General Meetings.
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 capacitors 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 27.09.2013 and 02.09.2013
respectively.
AUDITORS'' REPORT
Notes on Financial Statements referred to in the Auditors'' Report are
self explanatory, therefore, do not call for any further comments or
explanations.
JOINT VENTURE
Birla Furukawa Fibre Optics Limited (BFL), a joint venture between the
Company & Furukawa Electric Co., Ltd., Japan, has recorded considerable
growth in its operations notwithstanding the fact that it is just a
five years old Company. The operations of BFL are rapidly gaining
momentum to capitalize on the emerging business opportunities in the
optical fibre market with the underlying objective of providing world
class products to the customers through its state-of-the-art
manufacturing processes and facility. The telecom market in India is
opening up exciting possibilities with the imminent launch of 4G
networks, bringing India at the same level as some of the first
countries in the world to embark commercially on this ground breaking
technology. Accordingly, the capacity expansion project undertaken by
BFL in phased manner keeping pace with the growth in demand for optical
fibre in domestic market, is progressing as per Schedule and production
after completion of first phase has started in April, 2014.
Your directors are pleased to inform that Birla Ericsson Optical Ltd.,
a venture co-promoted by your Company in association with Vindhya
Telelinks Limited and Ericsson Cables AB, Sweden having made a positive
turnaround last fiscal has posted encouraging financial performance
during the year under review.
INDUSTRIAL RELATIONS & 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 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.
PARTICULARS OF EMPLOYEES
As required under Section 217(2A) of the Companies Act, 1956 and the
Rules made thereunder, particulars of the employee concerned are given
in Annexure ''A'' which is attached hereto and forms a part of the
Directors'' Report.
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 thereunder, the concerned particulars relating to Energy
Conservation, Technology Absorption and Foreign Exchange Earnings and
Outgo are given in Annexure ''B'' which is attached hereto and forms a
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, 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
employees at all level in a most challenging and difficult business
environment.
Yours faithfully,
Harsh V. Lodha
Chairman
S.R. Jain
S.S. Kothari
S. C. Jain
Directors
Dinesh Chanda
B.R. Nahar
D.R. Bansal
Chief Mentor & Executive Director
New Delhi, 19th May, 2014
Mar 31, 2013
TO THE SHAREHOLDERS
The Directors have pleasure in presenting their Annual Report,
together with the Audited Financial Statements of the Company for the
year ended 31st March, 2013.
FINANCIAL MATTERS
Amount (Rs. in lacs)
Description Year Ended Year Ended
31st March, 2013 31st March, 2012
Gross Income 69290.58 68161.81
Profit before Interest,
Depreciation and Tax 3350.36 1775.12
Finance Cost 2568.64 2397.26
Profit/(Loss) before
Depreciation and Tax 781.72 (622.14)
Depreciation and Amortization 1476.88 1481.01
Earlier Year Taxes 1.20 34.16
Deferred Tax (Credit) (234.09) 1243.99 (744.30) 770.87
(Loss) for the year (462.27) (1393.01)
Surplus brought forward
from previous year 4907.18 6300.19
Surplus carried to
Balance Sheet 4444.91 4907.18
In view of the loss, your Directors regret their inability to recommend
any dividend for the year under consideration.
GENERAL & CORPORATE MATTERS
Despite stiff competition during the year under review, your Company
has been able to register slightly higher gross revenue at Rs. 692.91
crores as compared to Rs. 681.62 crores for the previous fiscal.
In terms of EBIDTA also, the Company witnessed significant improvement
at Rs. 33.50 crores as compared to Rs. 17.75 crores for the previous year.
Although the increase in overall revenue, has helped the Company to
contain its net loss at Rs. 4.62 crores as against Rs. 13.93 crores for the
year 2011-12, intense competition leading to compromise in margins,
longer working capital cycle due to financial strife faced by the
ultimate customers in the power sector, higher finance costs on account
of liquidity crunch and elevated input prices have hindered resilience
of the Company to overcome its subdued performance in the previous
fiscal.
The power sector which is inextricably intertwined with the country''s
economic development still remains a weak spot. Despite major reforms
in place, the power sector, being plagued with multifaceted problems
such as fuel scarcity, shortage of equipments, infrastructural
constraints, etc. has been perennially lagging behind its target,
thereby exposing the economic development to a major risk. The
hydrocarbon fuel linkage for the power plants, which is the mainstay
for conventional power, is in a diabolic state. Even the nuclear energy
remains shrouded with uncertainties. In this sector, the Industry does
not see any cataclysmic change in the immediate future. There is an air
of uncertainty of the industry either re-entering into recession or
enduring a prolonged period of low demand growth.
Though the economy is on low ebb, there is a silver lining of a good
potential that imminently lies ahead for meeting the rising per capita
energy demand which gives the industry a redeeming hope of a
sustainable demand spiral. Economic recession is no stranger to the
Company, it has passed through cyclical phases of low demand where the
Company has shown indefatigable spirit, resilience and unending zest to
emerge as a strong player.
The Company in its quest for future products deserves the credit for
developing 400kV cable, the highest achieved level in the world for
underground cables, which has a promising future for power
sub-transmission networks. This achievement is the first of its kind by
an Indian manufacturer. This development inarguably pitchforks the
Company into the top echelon of global players.
The Company''s Capacitor Division is also progressing well and growing
by developing new products for better value addition.
CORPORATE GOVERNANCE
Pursuant to Clause 49 of the Listing Agreement(s) with the Stock
Exchanges, Management Discussion and Analysis, Corporate Governance
Report and Certificate by the Chief Mentor & Executive Director
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 attached
hereto and forms part of this Directors'' 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 31st
March, 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 loss
for the year ended 31st March, 2013;
- proper and sufficient care have 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 Accounts for the year ended 31st March, 2013
have been prepared on a ''going concern'' basis.
INDUSTRIAL RELATIONS & SAFETY
Industrial relations remained by and large cordial during the year.
DIRECTORS
The Board of Directors of the Company at its meeting held on 3rd May,
2012 had appointed Shri D.R. Bansal as the Chief Mentor & Executive
Director of the Company for a period of 3 (Three) years with effect
from 5th May, 2012 to 4th May, 2015 for which requisite approvals
including from shareholders of the Company vide a Special Resolution
passed at the Annual General Meeting held on 28th June, 2012 and the
Central government 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
Dinesh Chanda, 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 the Annual
Report.
Shri S.N. Prasad, a Director of the Company has left for his heavenly
abode on 13th December, 2012.
Shri S.K. Daga acted as Alternate Director to Shri S.N. Prasad till
13th December, 2012, when he vacated the office of the Alternate
Director upon the sad demise of Shri S.N. Prasad.
Shri S.P. Tamrakar acted as Alternate Director to Shri Dinesh Chanda,
till he vacated the office under section 313(2) of the Companies Act,
1956 with effect from 31st October, 2012.
AUDITORS
Messrs V. Sankar Aiyar & Co., Chartered Accountants, retire as Auditors
of the Company and being eligible offer themselves for re-appointment
for the financial year 2013-2014.
Messrs Satish Dhume & Co., Chartered Accountants, Panaji, Goa the
retiring branch auditors at the ensuing Annual General Meeting have
given an intimation in writing expressing their inability to be
re-appointed as branch auditors for the Company''s Goa Unit. Your
Directors recommend that Messrs V. Sankar Aiyar & Co., Chartered
Accountants who are being re-appointed as Statutory Auditors of the
Company, at the ensuing Annual General Meeting of the Company, be also
entrusted with the responsibility of audit of the Company''s Goa Unit
for the financial year 2013-2014.
Your Company 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 capacitors. 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 15.01.2013,
respectively.
AUDITORS''S 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.
JOINT VENTURE
Birla Furukawa Fibre Optics Limited (BFL), a joint venture between the
Company and Furukawa Electric Co., Ltd., Japan, is rapidly gaining
momentum to capitalize on the emerging business opportunities in the
optical fibre market with the underlying objective of providing world
class products to the customers through state-of-the-art manufacturing
processes and facility.
The telecom market in India is opening up exciting possibilities with
the imminent launch of 4G networks, bringing India at the same level as
some of the first countries in the world to embark commercially on this
ground breaking technology. Pricing pressures however, continue to pose
challenges to the Optical Fibre Industry.
BFL has recorded considerable growth in its operations notwithstanding
that it is just a three years old Company.
Your directors are pleased to inform that Birla Ericsson Optical Ltd.,
a venture promoted by your Company in association with Vindhya
Telelinks Limited 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.
PARTICULARS OF EMPLOYEES
As required under Section 217(2A) of the Companies Act, 1956 and the
Rules made thereunder, particulars of the employee concerned are given
in Annexure ''A'' which is attached hereto and forms a part of the
Directors'' Report.
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 thereunder, the concerned particulars relating to Energy
Conservation, Technology Absorption and Foreign Exchange Earnings and
Outgo are given in Annexure ''B'' which is attached hereto and forms a
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, esteemed customers and other business
associates.
Yours faithfully,
Harsh V. Lodha Chairman
S.R. Jain
S.S. Kothari
S. C. Jain Directors
J.C. Sharma
Dinesh Chanda
D.R. Bansal Chief Mentor
& Executive
Director
New Delhi, 21st May, 2013
Mar 31, 2012
The Directors have pleasure in presenting their Annual Report,
together with the Audited Annual Accounts of the Company for the year
ended 31st March, 2012.
FINANCIAL MATTERS
Description Amount (Rs. in lacs)
Year Ended Year Ended
31st March, 2012 31st March, 2011
Gross Income 68162.63 59132.76
Profit before Interest,
Depreciation and Tax 1775.12 5434.62
Finance Cost 2397.26 1095.85
Profit/(Loss) before
Depreciation and Tax (622.14) 4338.77
Depreciation and
Amortisation 1481.01 1656.83
Current Income Tax - 810.00
Earlier Year Taxes 34.16 -
Deferred Tax Charge/(Credit) (744.30) 770.87 92.03 2558.86
Net Profit/(Loss) (1393.01) 1779.91
Surplus brought forward from
previous year 6300.19 5305.71
Total amount available
for appropriation 4907.18 7085.62
Appropriation
Proposed Dividend - 462.61
Corporate Dividend Tax - 72.82
Transfer to General Reserve - - 250.00 785.43
Surplus carried to
Balance Sheet 4907.18 6300.19
In view of the loss, your Directors regret their inability to recommend
any dividend for the year under consideration.
GENERAL & CORPORATE MATTERS
Despite there being higher gross revenue at Rs. 681.63 crores as compared
to Rs. 591.33 crores for the previous fiscal, the Company has suffered a
Net Loss of Rs. 13.93 crores during the year under review.
The profitability of the Company has been adversely impacted mainly due
to unprecedented sharp weakening of Indian rupee vis-a-vis US$ and
other foreign currencies, volatile and elevated input prices and
soaring interest rates.
The Company has in a bid to de-risk revenues and profitability, planned
a shift in the business model from supply contracts to total turnkey
solutions which alongwith the measures taken to re-inforce the EPC wing
have helped the Company to contain the deficit for the year to some
extent.
Historically, the cable industry has been exposed to repeated cyclical
downturns. The Company has in the past came out of these cycles
stronger which testify its resilience. The Company hopes that the
environment in the power sector improves so that it can benefit from
it.
Power is the key to economic growth. Unquestionably, the growth plan of
the power sector is irreversible. The Government is pursuing formidable
strategic development plans and dynamic policy reforms on fast track,
which is imperative to achieve its obligation for "Power For All" which
is an integral part of the Nation's aspiration for "India Vision 2020"
to transform India to a developed Nation. This instills confidence in
the entire cross-section of engineering industries to expect a robust &
sustained growth in demand for the next couple of decades. The
electrical industry including cables & capacitors will be one of the
greatest benefactors of the proposed power sector investments. The
private infrastructure companies are also expected to play a major role
in the growth and development of the economy and therefore growth of
the cable industry will also be linked to their performance in future.
The Company's Capacitor Division is also progressing well and growing
by developing new products for better value addition.
As a long-term strategy, the Company has been pursuing technological
advancement at par with the major international players. The Company is
proud of its excellent technology and quality of its power cables up to
400 kV. The Company is the only cable manufacturer in India having an
in-house Testing Laboratory which has earned the prestigious NABL
accreditation.
Apart from the above, by continuously upgrading and modernizing the
production facilities with a special focus on reduction in the cost of
production by initiating and implementing various measures in all the
areas, your Company will be in an advantageous position to become a
competitive player in a market driven by high cost of production and
cutthroat competition.
CORPORATE GOVERNANCE
Pursuant to Clause 49 of the Listing Agreement(s) with the Stock
Exchanges, Management Discussion and Analysis, Corporate Governance
Report and Certificate by Chief Executive Officer (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.
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 31st
March, 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 31st March, 2012;
- proper and sufficient care have 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 31st
March, 2012 have been prepared on a 'going concern' basis.
INDUSTRIAL RELATIONS & SAFETY
Industrial relations remained by and large cordial during the year.
The Company continues to accord a very high priority to both industrial
safety and environmental protection and these are ongoing processes at
the Company's plant and facilities.
DIRECTORS
Shri S.N. Prasad, Dr. S.R. Jain and Shri J.C. Sharma retire by rotation
and, being eligible, offer themselves for re-appointment.
At the Board Meeting held on 3rd May, 2012, Shri D.R. Bansal was
appointed as an Additional Director with effect from 5th May, 2012 from
which date he shall also assume responsibilities as Chief Mentor &
Executive Director subject to requisite approvals including from
members vide a special resolution to be passed at the ensuing Annual
General Meeting of the Company.
Details about the Directors seeking appointment/re-appointment are
given in the Notice of the ensuing Annual General Meeting which is
being sent to the shareholders along with the 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 Satish Dhume & Co., Chartered Accountants, Panaji, Goa retire as
Branch Auditors of the Company and being eligible, offer themselves for
re-appointment as Branch Auditors of the Company to audit the accounts
in respect of the Goa Unit for the financial year 2012-2013.
Messrs D. Sabyasachi & Co., Cost Accountants, have been re-appointed as
Cost Auditors on 3rd May, 2012 for the financial year 2012-2013.
JOINT VENTURE
Birla Furukawa Fibre Optics Limited (BFL), a joint venture between the
Company & Furukawa Electric Co., Ltd., Japan, is rapidly gaining
momentum to capitalize on the emerging business opportunities in the
optical fibre market with the underlying objective of providing world
class products to the customers through state-of-the-art manufacturing
processes and facility.
The telecom market in India is opening up exciting possibilities with
the imminent launch of 4G networks, bringing India at the same level as
some of the first countries in the world to embark commercially on this
ground breaking technology. Pricing pressures however, continue to pose
challenges to the Optical Fibre Industry.
The financial performance of BFL is satisfactory considering the fact
that it is just a two year old Company.
In view of depressed market conditions, Birla Ericsson Optical Limited,
a venture promoted by your Company in association with Vindhya
Telelinks Limited and Ericsson Cables AB, Sweden has shown a down turn
in financial performance during the year under review.
PARTICULARS OF EMPLOYEES
None of the employee of the Company qualifies for disclosure pursuant
to Section 217(2A) of the Companies Act, 1956, read with the Companies
(Particulars of Employees) Rules, 1975 as amended from time to time.
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 thereunder, the concerned particulars relating to Energy
Conservation, Technology Absorption and Foreign Exchange Earnings and
Outgo are given in Annexure which is attached hereto and forms a part
of the Directors' Report.
ACKNOWLEDGEMENT
The Board of Directors would like to thank the Shareholders, all
employees of the Company, Customers, Suppliers, Collaborators and
Bankers for their continued support.
Yours faithfully,
Harsh V. Lodha Chairman
S. R. Jain
S. S. Kothari
S. C. Jain Directors
J. C. Sharma
Dinesh Chanda
New Delhi, 3rd May, 2012
Mar 31, 2011
The Directors have the pleasure of presenting their Annual Report,
together with the Audited Annual Accounts of the Company for the year
ended 31st March, 2011.
FINANCIAL MATTERS
Description Amount (Rs. in lacs)
Year Ended Year Ended
31st March, 2011 31st March, 2010
Gross Income 58952.76 54896.08
Profit before Interest,
Depreciation and Tax 5057.70 6605.65
Interest 718.93 786.17
Profit before
Depreciation and Tax 4338.77 5819.48
Depreciation and
Amortisation 1656.83 1687.43
Current Income Tax 810.00 1180.00
Deferred Tax Charge 92.03 242.54
Fringe Benefit Tax
Credit for earlier years à 2558.86 (4.68) 3105.29
Net Profit 1779.91 2714.19
Surplus brought forward
from previous year 5305.71 3568.05
Total amount
available for
appropriation 7085.62 6282.24
Appropriation
Proposed Dividend 462.61 578.26
Corporate Dividend Tax 72.82* 98.27
Transfer to General Reserve 250.00 785.43 300.00 976.53
Surplus carried to
Balance Sheet 6300.19 5305.71
*Net of Rs. 2.23 lacs being excess provision written back for the
previous year.
DIVIDEND
Your Directors are pleased to recommend for your consideration a
dividend of Rs. 2/- per share (i.e. 20%) on 23130254 Equity Shares of
Rs. 10/- each for the year ended 31st March, 2011.
GENERAL & CORPORATE MATTERS
The Company showed a 9% increase in Turnover from Rs. 527.61 crores in
the previous year to Rs. 574.98 crores in the financial year 2010-2011.
The Company has further strengthened its position in the Extra High
Voltage (EHV) Cable segment by installing the Second VCV Line in the
same tower with technology from Furukawa Electric Co., Ltd.
The Company has also successfully completed the rigorous one-year long
duration pre-qualification test on 200 kV Cable system at an
International Laboratory, certified by world renowned KEMA, Netherland.
This gives the Company a firm marketing ground and the status of being
the only Company in India to achieve this feat.
Having enhanced its market share for EHV Cables upto 220 kV, the
Company is preparing grounds for venturing into the 400 kV segment.
In line with the shift in the business model from supply contracts to
total turnkey solutions, the Company has shored up its resources and
taken measures to re-inforce its construction wing by mechanizing some
process and on-site training of jointers.
The Company has once again won the EEPCINDIA Coveted Star Performer
Silver Shield award in succession for the year 2008-2009 which has been
announced during the year.
The Company has progressed well on the Capacitors front by developing
new products for better value addition and has also increased the
installed capacity by adding balancing equipments.
Pursuant to the Joint Venture Agreement with Furukawa Electric Co.,
Ltd., Japan, the Company has transferred/sold certain specified assets
related to the manufacturing operations of Optical Fibre during the
year. Consequently, the manufacturing of Optical Fibre was discontinued
in the month of November, 2010.
CORPORATE GOVERNANCE
Pursuant to Clause 49 of the Listing Agreement(s) with the Stock
Exchanges, Management Discussion and Analysis, Corporate Governance
Report and Certificate by Chief Executive Officer (CEO) confirming
compliance by all the Board members and Senior Management Personnel
with Companys Code of Conduct and Auditors Certificate regarding
compliance of conditions of Corporate Governance are made a part of the
Annual Report.
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 31st
March, 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 31st March, 2011;
- proper and sufficient care have 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 31st
March, 2011 have been prepared on a going concern basis.
INDUSTRIAL RELATIONS & SAFETY
Industrial relations remained by and large cordial during the year.
DIRECTORS
Shri Harsh V Lodha, Shri S.S. Kothari and Shri S.C. Jain retire by
rotation and, being eligible, offer themselves for re-appointment.
AUDITORS
M/s S. R. Batliboi & Co., Chartered Accountants, retire as Auditors of
the Company and being eligible, offer themselves for re-appointment for
the financial year 2011-2012.
M/s Satish Dhume & Co., Chartered Accountants, Panaji, Goa retire as
Branch Auditors of the Company and being eligible, offer themselves for
re-appointment as Branch Auditors of the Company to audit the accounts
in respect of Optic Fibre Goa Unit for the financial year 2011-2012.
M/s D. Sabyasachi & Co., Cost Accountants, have been re-appointed as
Cost Auditors on 14th May, 2011 for the financial year 2011-2012.
JOINT VENTURE
Since the market conditions are not very much favourable, the
performance of Birla Ericsson Optical Limited, a venture promoted by
your Company in association with Vindhya Telelinks Limited and Ericsson
Cables AB, Sweden was adversely affected during the year under review.
The performance of Birla Furukawa Fibre Optics Ltd., another venture
promoted by your Company in association with Furukawa Electric Co.,
Ltd., Japan for its first year of operations has been satisfactory.
PARTICULARS OF EMPLOYEES
None of the employee of the Company qualifies for disclosure pursuant
to Section 217(2A) of the Companies Act, 1956, read with the Companies
(Particulars of Employees) Rules, 1975, as amended from time to time.
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 thereunder, the concerned particulars relating to Energy
Conservation, Technology Absorption and Foreign Exchange Earnings and
Outgo are given in Annexure which is attached hereto and forms a part
of the Directors Report.
ACKNOWLEDGEMENT
The Board of Directors would like to thank the Shareholders, all
employees of the Company, customers, suppliers, collaborators and
bankers for their continued support.
Yours faithfully,
Harsh V. Lodha Chairman
S.R. Jain }
S.S. Kothari }
S.C. Jain } Directors
J.C. Sharma }
Dinesh Chanda }
New Delhi, 14th May, 2011
Mar 31, 2010
The Directors have the pleasure of presenting their Annual Report,
together with the Audited Annual Accounts of the Company for the year
ended 31 st March, 2010.
FINANCIAL MATTERS
Year Ended
31st March, 2010 31st March, 2009
Rupees Rupees Rupees Rupees
in lacs in lacs in lacs in lacs
Gross Income 54826.63 64852.48
Profit before
Interest,
Depreciation
and Tax 6605.65 4796.98
Interest 786.17 2023.15
Profit before
Depreciation
and Tax 5819.48 2773.83
Depreciation
and Amortisation 1687.43 1648.47
Current
Income Tax 1180.00 365.00
Income Tax
for earlier
years (Net) - 98.26
Deferred Tax
Charge 242.54 30.19
Deferred Tax
Credit for
earlier years - (104.69)
Fringe Benefit
Tax for current
year - 36.55
Fringe Benefit
Tax Credit for
earlier years (4.68) 3105.29 - 2073.78
Net Profit 2714.19 700.05
Surplus brought
forward from
previous year 3568.05 3288.61
Total amount
available for
appropriation 6282.24 3988.66
Appropriation
Proposed
Dividend 578.26 231.30
Corporate
Dividend Tax 98.27 39.31
Transfer to
General
Reserve 300.00 976.53 150.00 420.61
Surplus
carried
to Balance
Sheet 5305.71 3568.05
DIVIDEND
Your Directors are pleased to recommend for your consideration a
dividend of Rs. 2.50 per share {i.e. 25%) on 23130254 Equity Shares of
Rs. 10/- each for the year ended 31 st March, 2010.
GENERAL & CORPORATE MATTERS
The Company has created yet another milestone by achieving the highest
ever Net Profit of Rs. 27.14 Crores with an impressive growth of about
288%.
The true hallmark of the Companys impressive performance is attributed
to its sharp focus on the bottom-line improvement by re-formatting its
business portfolio with major thrust on high-end products and turnkey
projects.
This has been a watershed year for the Company in the 220 kV Cables
segment with commendable execution figures in just second year of
commercialization. Looking into the success in the Extra High Voltage
(EHV) Cable market, the Company is expanding its capacity and range by
installing the 2nd VCV line with technology transfer from Fumkawa
Electric Co. Ltd., Japan. This is slated for commissioning in
September, 2010.
The long duration Pre-qualification (PQ) Test on 220 kV EHV Cables
manufactured by the Company is currently undergoing at an overseas
laboratory.
The Company has been imparting rigorous on site and off site training
to its employees for laying, installation and commissioning jobs of 220
kV cables to have an edge over the competitors by developing these
capabilities in-house in a cost effective manner to provide end-to-end
solutions.
The Company has, during the year, been accredited to SA 8000:2008, an
International Standard which aims to promote continuous improvement for
work place condition and ensures the ethical sourcing for production of
goods and services thereby testifying the Companys commitment to
global best industrial practices.
The Company has made noteworthy progress by being elevated to "Star
Export House" category. The Company has also won the EEPCINDIA
(formerly Engineering Export Promotion Council) coveted Star Performer
Silver Shield award for 2007-08 in the category of Medium Enterprises -
Miscellaneous engineering goods which has been announced during the
year.
The Optic Fibre Goa Unit of the Company has, during the year, been
awarded with a Certificate of Merit by ELCINA-DUN and BRADSTREETfor
outstanding achievement in export of Optical Fibres in the Large Scale
Sector.
The Company has recently partnered with Innovites B.V, a software
development Company of Netherlands to implement CableBuilder, the
popular cable design software of Cimteq Ltd. The implementation of
CableBuilder will seamlessly integrate designing, costing and quoting
process of the Company, thereby giving it the cutting edge
capabilities.
CORPORATE GOVERNANCE
Pursuant to Clause 49 of the Listing Agreement(s) with the Stock
Exchanges, Management Discussion and Analysis, Corporate Governance
Report and Certificate by Chief Executive Officer (CEO) confirming
compliance by all the Board Members and Senior Management Personnel
with Companys Code of Conduct and Auditors Certificate regarding
compliance of conditions of Corporate Governance are made a part of the
Annual Report.
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 31st
March, 2010, 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 2009-10 and of the
profit for the year ended 31 st March, 2010;
? proper and sufficient care have 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 31st
March, 2010 have been prepared on a going concernbasis.
INDUSTRIAL RELATIONS & SAFETY
Industrial relations remained by and large cordial during the year.
DIRECTORS
Shri S. N. Prasad, Shri J. C. Sharma and Shri Dinesh Chanda retire by
rotation and, being eligible, offer themselves for re-appointment.
AUDITORS
M/sS. R. Batliboi & Co., Chartered Accountants, retire as Auditors of
the Company and being eligible, offer themselves for re-appointment for
the financial year 2010-11.
M/s Satish Dhume & Co., Chartered Accountants, Panaji, Goa retire as
Branch Auditors of the Company and being eligible, offer themselves for
re-appointment as Branch Auditors of the Company to audit the accounts
in respect of Optic Fibre Goa Unit for the financial year 2010-11.
M/s D. Sabyasachi & Co., Cost Accountants, have been re-appointed as
Cost Auditors on 11th May, 2010 for the financial year 2010-11.
JOINT VENTURE
While the market conditions are not very much favourable, Birla
Ericsson Optical Limited, a venture promoted by your Company in
association with Vindhya Telelinks Limited and Ericsson Cables AB,
Sweden has shown satisfactory performance during the year under review.
Following the alliance with Japanese major Furukawa Electric Co. Ltd.,
the Company has incorporated a new Joint Venture Company viz. Birla
Furukawa Fibre Optics Limited in the State of Goa to deal in optical
fibre and allied businesses. The Joint Venture Company is yet to
commence commercial production.
PARTICULARS OF EMPLOYEES
As required under Section 217(2A) of the Companies Act, 1956 and the
Rules made thereunder, particulars of the employee concerned are given
in Annexure A which is attached hereto and forms a part of the
Directors Report.
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 thereunder, the concerned particulars relating to Energy
Conservation, Technology Absorption and Foreign Exchange Earnings and
Outgo are given in Annexure B which is attached hereto and forms a
part of the Directors Report.
ACKNOWLEDGEMENT
The Board of Directors would like to thank the Shareholders, all
Employees of the Company, Customers, Suppliers and the
Bankersfortheircontinued support.
Yours faithfully,
H.V. Lodha
Chairman
S.R. Jain
S.S. Kothari
S.C. Jain Directors
J.C. Sharma
Dinesh Chanda
New Delhi, 11th May, 2010
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