Directors Report of Veto Switchgears & Cables Ltd.

Mar 31, 2018

1. DIRECTOR’S REPORT

Dear Members,

The Directors are pleased to present the 11th Annual Report on the business and operations of the Company, together with the Audited Financial Statements for the financial year ended 31st March, 2018 and other accompanying reports, notes and certificates.

1. Company Performance

Your Company has grown exponentially during the current financial year. The Standalone and Consolidated Audited Financial Results of the Company for year ended 31st March 2018 are as follows.

Financial Results:

	Consolidated		Standalone
Particulars	2017-18	2016-17	2017-18	2016-17
Revenue from Operations (including other Income)	25,562.77	24,072.16	12,963.76	12,570.09
Less Expenses : (a) Cost of materials consumed (b) Purchases of stock -in-trade (c) Changes in inventories of finished goods, and stock- in-trade (d) Employee benefits expense (e) Finance costs (f) Depreciation and amortisation expense (g) Other expenses	5,125.90 14,571.56 (705.90) 901.08 275.64 158.17 1,344.10	4,444.44 14,790.96 (273.28) 1,222.53 412.38 166.44 1.177.38	4,728.51 4,201.08 (1,243.68) 755.32 273.98 148.05 1,124.35	4,444.44 3.691.31 119.17 1,100.57 410.31 166.44 1,110.89
Total expenses	21,670.55	21,940.85	9,987.61	11,043.12
Profit before tax and exceptional items	3,892.22	2,131.31	2,976.15	1,526.97
Less: Exceptional item s	-	-	-	-
Profit before tax	3,892.22	2,131.31	2,976.15	1,526.97
Less: Tax Expense	995.15	298.84	983.07	298.8
Less: Minority interest	-	-	-	-
Profit after tax	2,897.07	1,832.47	1,993.08	1,228.17

Indian Accounting Standards

The Ministry of Corporate Affairs (MCA), vide its notification in the official Gazette dated 16th February, 2015, notified the Indian Accounting Standards (IND AS) which has replaced the existing Indian GAAP prescribed under Section 133 of the Companies Act, 2013, read with rule 7 of the Companies (Accounts) Rules, 2014. Pursuant to the above said notification, the Indian Accounting Standards (IND AS) is applicable on the Company for the accounting periods beginning on or after 1st April, 2017.

Consolidated Financial Results:-

During the year under review on consolidated basis our Company earned profit before tax and exceptional items of Rs. 3,892.22 Lacs against Rs. 2,131.31 Lacs in the previous year. The Company earned profit after tax of Rs. 2,897.07 Lacs as compare to Rs. 1,832.47 Lacs in the previous year. The Company had Income from operation of Rs. 25,562.77 Lacs as compared to Rs. 24,072.16 Lacs in previous year. The Profit before Interest/Depreciation/Tax (PBDIT) was Rs. 4147.88 Lacs as compared to Rs. 2699.09 Lacs in previous year.

Standalone Financial Results:-

During the year under review on standalone basis our Company earned a profit before tax and exceptional items of Rs. 2976.15 Lacs against Rs. 1526.98 Lacs in the previous year. The Company earned profit after tax of Rs. 1993.08 Lacs as compare to Rs. 1228.19 Lacs in the previous year. The Company had Income from operation of Rs. 12380.07 Lacs as compared to Rs. 12033.93 Lacs in previous year. The Profit before Interest/Depreciation/Tax (PBDIT) was Rs. 3349.13 Lacs as compared to Rs. 2094.11 Lacs in previous year.

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

Dividend

We are pleased to recommend a final dividend of Rs. 2/- per share having face value of Rs. 10/- each aggregating to 20% of FV. for the financial year ended on 31st March 2018. The final dividend, if approved by the members, will be paid to members within the period stipulated by the applicable Companies Act. The aggregate dividend for the year will amount to 20%, being Rs. 2 per share of 10/- each.

Reserves

Rs. 1993.08 lakhs has been transfer to reserves and surplus account during the current year.

Share Capital

The paid up Equity Share Capital as at 31st March 2018 stood at Rs.18,32,71,000.

However, the company subsequently has allotted 7,87,855 Equity Shares of Rs. 10 each on 23rd May 2018 to employees/directors of the company pursuant to exercise of Stock Options under Employee Stock Option Scheme 2015 (“ESOP SCHEME 2015”).

Consequent to the said allotment, the paid up Equity Share Capital has been increased to Rs. 1,91,14,955 Equity Shares of Rs. 10 each.

Also, through the Extra-ordinary General Meeting (“EGM”) of the Members of the Company held on May 31st, 2017 the company has been authorised to create, offer, issue and allot, by way of a preferential issue, from time to time and in one or more tranches, an aggregate of 45,00,000 (Forty Five Lacs) warrants convertible into equivalent number of equity shares of a face value of Rs. 10/- each of the Company (“Warrants”), at any time within a period of 18 months from the date of allotment of Warrants, at an exercise price of Rs. 170 (including a premium of Rs. 160) per equity share (“Exercise Price”) to the Promoter Group entities of the Company.

Financial Statements

In accordance with SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (hereinafter referred to as ‘Listing Regulations’) and Section 136 of the Companies Act, 2013 read with Rule 10 of the Companies (Accounts) Rules, 2014, the Annual Report containing salient features of the financial statements, including consolidated financial statements, for the financial year 2017-18, along with statement containing salient features of the Directors’ Report (including Integrated Reporting and Management Discussion & Analysis and Corporate Governance Report) is being sent to all shareholders who have not registered their email address(es) for the purpose of receiving documents/ communication from the Company in electronic mode. Please note that you will be entitled to be furnished, free of cost, the full Annual Report 2017-18, upon receipt of written request from you, as a member of the Company.

Full version of the Annual Report 2017-18 containing complete Balance Sheet, Statement of Profit & Loss, other statements and notes thereto, including consolidated financial statements, prepared as per the requirements of Schedule III to the Companies Act, 2013, Directors’ Report (including Integrated Reporting and Management Discussion & Analysis and Corporate Governance Report) is being sent via email to all shareholders who have provided their email address(es).

Full version of Annual Report 2017-18 is also available for inspection at the registered office of the Company during working hours up to the date of ensuing Annual general meeting (AGM). It is also available at the Company’s website at www.vetoswitchgears.com.

Change in the nature of business, if any

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

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

- The company has launched its new Product range ‘VYOMA’ for Modular Switches on Sunday, 6th May 2018 at Jaipur, Rajasthan.

- The company has shut - down the additional factory unit (depot) at Delhi and Ghaziabad and inaugurated new plants at Indore, Allahabad and Bhatinda.

Management Discussion and Analysis

The Management Discussion and Analysis Report of the financial condition and results of operations of the Company for the year under review as required under regulation 34(2) (e) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is being given separately and forms part of this Board Report .

Particulars of Loan, Guarantee and Investments

The details of loans, guarantees and investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the respective notes to the Standalone Financial Statements of the Company.

Deposits

During the year under review, the Company has neither accepted nor renewed any deposits in terms of Chapter V of the Companies Act, 2013 and Rules framed thereunder.

2. Business Operations/ State of Company’s Affairs

At Veto, we work with the single minded objective of not only improving, but empowering people’s lives with our unique repertoire of products and services, backed by time tested technology and path-breaking R & D methods. With persistent focus on innovation, prompt capitalization of opportunities, building up credibility through strategic thinking, operational expertise, well planned investments and business integrity, we aim to continue our journey unabated. Reaching out with world-wide tie-ups, collaborations and import-export relations, we envision an organization that is truly global in every way - technology, policies and possibilities. Your company has been developing as a distinctive brand of leadership well equipped to address critical challenges faced by industry and society. We look forward to being recognized as one of the major competitors in the global electrical accessory industry.

Veto switchgears and Cables Limited is one of the most respected cable manufacturers in India. Brand Veto is committed to quality, safety and service with no compromise. The Company is an ISO 9001:2008 certified company, engaged in the manufacture and sale of wires & cables and electrical accessories in India.

The brand name VETO is since 1967. VETO holds a major part of electrical accessories in India. The company also has a strong and hardworking team of marketing professionals and dealers and distributors sales of the unit increasing day by day and its production is manifold many times since its inception. We are looking forward to grow further by way of providing “Best Quality at Competitive Prices.”

The product portfolio ranges from industrial cables, stand cables to telephone & co-axial wires, from general switches to modular switches, from ceiling fans to rechargeable fans, compact fluorescent lamps, LED bulbs and other electrical accessories. We are dealing in electrical accessories like switch socket, MCB, bell and all electrical accessories which are used for household purposes and manufacturing wires and cables. Cable starts from 0.75 mm to 10 mm.

Our Company supplies these products under the brands “VETO” and “VIMAL POWER” through large network of dealers to the customers in India as well as selected customers abroad.

VIMAL POWER is a part of the Veto group and continues to reinforce a successful international presence and enhance its enviable reputation for innovation. A continuous programme of research and development ensures a world beating range of cables to satisfy or surpass requirements of Indian Standards.

Recently, the company has launched its new range of Modular Switches by the Brand Name “VYOMA”.

In the year the company has largely benefited from the sale of LED panel Lights, LED Flood Light, Slim Panel Light, LED strip Light.

Its major distribution in India covers more than 10 states including major sale in Rajasthan and Gujarat.

The Group is strongly positioned in high-tech markets and offers the widest range of products, services, technologies and know-how. In the Energy sector, the Group operates in the business of underground and submarine power transmission cables and systems, special cables for applications in a range of industries and building services and also medium and low voltage cables for the construction and infrastructure. In the Telecom sector, the Group manufactures cables and accessories for the voice, video and data transmission and offers a complete range of optical fibres, optical and copper cables and connectivity systems.

Raw Material

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

(Qty. in kg)

Product category	Existing (2017-18)	Proposed (2018-19)
Copper	289008840	317909724
PVC Resin	31910295	35101325
Aluminium	11752879	12928167

Infrastructure facilities

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

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

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

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

Category	Nos.
Top management	3
Managerial & Supervisory staff	6
Office staff	68
Skilled workers	55
Unskilled workers	370
Total	502

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

- Environmental Clearance : We have got all the necessary approvals from the local authorities to operate our business.

- Safety standards : Quality and safety are the hallmarks of our diverse range of products, which are designed and manufactured to the very highest standards such as ISO 9001 and approved by the leading approvals organisations nationally and internationally.

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

- Capacity and capacity utilization

Particulars	Projected		Actual
	FY 2017-18	FY 2018-19	FY 2017-18
Wires & Cables
Installed Capacity	20 Lacs Bundles	20.00 Lacs Bundles	20.00 Lacs Bundles
Capacity Utilization (in %)	40%	40%	31.45%
Production	8.00 Lac Bundles	8.00 Lac Bundles	6.29 Lac Bundles
Electrical Accessories
Installed Capacity	600 Lac pieces	600 Lac pieces	600 Lac pieces
Capacity Utilization (in %)	30%	30%	15.57%
Production	180 Lac pieces	200 Lac pieces	126 Lac pieces

- Insurance

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

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

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

3. Accidental & Health insurance facility for field staff;

4. Gratuity policy;

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

Risks and Concerns:

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

2. Legal Risks, fraud, Theft, etc

3. Uncertainties in financial markets

4. Failure in Projects

5. Credit Risks

6. Outstanding Debtors

7. Security and Storage of Data and Records

8. Competitors have market standing out of Rajasthan.

Internal Control System

- The Company has put in place an adequate system of internal control commensurate with its size and nature of business. These systems provide a reasonable assurance in respect of providing financial and operational information, complying with applicable statutes, safeguarding of assets of the Company and ensuring compliance with corporate policies. The Audit Committee reviews adherence to internal control systems and internal audit reports.

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

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

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

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

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

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

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

Details of Subsidiaries

The Company has two subsidiary Companies. One in Jaipur and the other in Duabi, UAE. On May 29th 2017 Veto Electricals Private Limited has inaugurated its manufacturing plant (100% Export Unit) at Mahindra SEZ, Jaipur and has started commercial Production on July 1st 2017.

Pursuant to provisions of Section 129(3) of the Companies Act, 2013 a statement containing salient features of the Company’s subsidiaries are provided in the Annexure-I to the Board of the Company.

In terms of provisions of Section 136 of the Companies Act, 2013 the financial statements of the Company, consolidated financial statements along with relevant documents and separate audited accounts in respect of subsidiaries, and are also available on the website of the Company. These documents shall also be available for inspection at the registered office of the Company during business hours up to the date of ensuing AGM. On 22nd November, 2014 Veto Electricals Private Limited became the Wholly Owned Subsidiary Company of the Company. Same has been disclosed in Annexure-I

On 11th October 2015 Veto registered a wholly owned subsidiary in Dubai by the name of “Veto Overseas Private FZ.E. It has earned total revenue of 70,735,181 AED for the year ended 31st March 2018. The Company has declared profit of 6,523,040 AED. It is headed by Mr. Ashish Goklani as its Manager. The copy of the Consolidated audited accounts, together with the independent auditor’s report, is provided in a separate section of this Annual Report.

Performance and Financial position of Subsidiary Company

The details with respect to subsidiary Companies in Form AOC-1 as on March 31, 2018 have been discussed in Annexure II.

3. Human Resource Management Employee Relations

VETO encourages a culture of trust and mutual respect. Employees are aligned on common objectives and take pride in the quality of the products that leave the factory for sale in the markets. We have over the years realized the importance of human capital and duly acknowledge it in its business operations. Your Company has managed to create “Lifers” at VETO- people who have been associated with your Company, many having started their earning life at VETO. It gives the much needed stability and satisfaction when we realize that our partners in success trust us to such an extent that they stand by us at all times.

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

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

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

Managerial Remuneration

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

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

1. Remuneration paid to Directors

(in Lacs.)

Name of Director	Title	Remuneration in Year 2017-18	Remuneration in Year 2016-17	% increase in Remuneration in comparison to last year	Ratio of Remuneration to MRE
Mr. Akshay Kumar Gurnani	Managing Director	15,00,000	15,00,000	0.00	5.64
	Whole-
Mr. Narain Das Gurnani	Time Director CFO	12,00,000	12,00,000	0.00	4.51
Ms. Jyoti Gurnani	Director	6,00,000	6,00,000	0.00	2.25

1. The remuneration disclosed here is upto 31st March 2018 as per the audited Financial Statements.

2. The Median Remuneration of Employees is Rs. 2,66,136 approx.

3. Median Remuneration is calculated on the basis on annualized salary, MRE - Median Remuneration of employees.

4. No employee received remuneration in excess of the highest paid Director.

5. The median remuneration of employees was Rs. 266131 as on 31st March 2018 and Rs. 2,12,000 as on 31st March, 2017. There was an increase in MRE during the financial year 2017-18 of 24.18%.

6. On 31st March 2018, the total number of permanent employees on the rolls of Company is 502 employees.

7. Average Salary increase of non-managerial employees was 12.78 % and that of managerial employees 22.64 % in financial year 2017-18. There are no exceptional circumstances in increase in managerial remuneration.

8. There has been no change in the remuneration of any other director.

9. Remuneration paid during the year ended 31st March 2018 is as per the Remuneration Policy of the Company.

Particulars of Employees

Your Directors confirmed that no employee fall under the particulars of Section 197 of the Companies Act, 2013 read with Rule 5 (2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

4. Corporate Governance

Corporate Governance Report

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

Your Company is committed to achieving and maintaining high standards of Corporate Governance and places high emphasis on business ethics. Your Company has set up a Remuneration Committee under Annexure 1-D of SME Equity Listing Agreement, which was later reconstituted under the name ‘Nomination and Remuneration Committee’ pursuant to provisions of Section 174 of The Companies Act, 2013.

A report on corporate governance confirming compliance of conditions as stipulated under SEBI (Listing Obligations and Disclosure Requirements) Regulation, 2015 has been included in Annexure III of this report. The Company has laid down a well-defined Code of Conduct, which fairly addresses the issues of integrity, conflict of interest and confidentiality and stresses the need of ethical conduct, which is the basis of good Governance. This code is applicable to all members of the Board and the Senior Management Personnel. The declaration regarding compliance with Veto Switchgears and Cables Limited-Code of Conduct and Ethics for all Board Members and Senior Management Personnel of the Company has been included in Annexure VII of this report.

5. Directors and Key Managerial Personnel (KMP)

Change in directors and KMP during the year

On 13th February, 2017 appointed Mr. Kanwarjeet Singh as an Independent (Non Executive) Director.

Sr. No.	Name Of Director	Designation	Date of Appointment
1.	Mr. Akshay Kumar Gurnani	Executive Managing Director and CEO	27/08/2014
2.	Mr. Narain Das Gurnani	Whole -Time Director and CFO	28/09/2016
3.	Ms. Jyoti Gurnani	Director	27/08/2014
4.	Mr. Mohan Sukhani	Non -exe cutive Independent Director	31/08/2012
5.	Mr. Govind Ram Thawani	Non -executive Independent Director	31/08/2012
6.	Mr. Kanwarjeet Singh	Non -executive Independent Director	06/ 08/ 2017

Board Evaluation

Pursuant to the provisions of the Companies Act, 2013, the Board has carried out an annual performance evaluation of its own performance, that of its Committees and individual Directors. Relevant details have been provided in the Corporate Governance Report.

Remuneration Policy

I. For Labours:

For fixing the Remuneration for the Labours Minimum Wages Act, 1948 is applicable. Remuneration is payable on Hours basis.

II. For Office Staff:

The Committee will recommend the remuneration to be paid to the Managing Director, Whole-time Director, KMP and Senior Management of the quantity required to run the Company successfully. The relationship of remuneration to performance should be clear and meet appropriate performance benchmarks. Minimum 5% increment to the Management of the Company may provide excess of remuneration on the basis of outstanding performance of employee only, if the Company is not satisfied with the performance of the Employee than they can restrict the increment. The remuneration should also involve a balance between fixed and incentive pay reflecting short and long-term performance objectives appropriate to the working of the company and its goals.

a. Managing Director

The remuneration and commission to be paid to the Managing Director shall be in accordance with the provisions of the Companies Act, 2013, and the rules made thereunder. Increments to the existing remuneration/ compensation structure may be recommended by the Committee to the Board which should be within the limits approved by the Shareholders.

b. Directors

The remuneration/compensation/commission etc. to Directors will be determined by the Committee and recommend to the Board for approval.

c. Non executive Independent Directors

The Non Executive Independent Director may receive remuneration by way of Sitting Fees for attending meetings of the Board thereof. Provided that the amount of such fees shall be subject to ceiling/limits as provided under Companies Act, 2013 and rules made thereunder or any other enactment for the time being in force.

d. KMPs/ Senior Management Personnel

The Remuneration to be paid to KMPs/Senior Management Personnel shall be based on the experience, qualification and expertise of the related personnel and governed by the limits, if any prescribed under the Companies Act, 2013 and rules made thereunder or any other enactment for the time being in force.

e. Directors’ and Officers’ Insurance

Where any insurance is taken by the Company on behalf of its Directors, KMPs/Senior Management Personnel etc. for indemnifying them against any liability, the premium paid on such insurance shall not be treated as part of the remuneration payable to any such personnel.

This Policy is updated based on the provisions of the Companies Act, 2013 and rules made thereunder and requirements of the relevant rules and regulations issued by SEBI from time to time.

In case of any subsequent changes in the provisions of the Companies Act, 2013 or any other regulations which makes any of the provisions in the policy inconsistent with the Act or regulations, then the provisions of the Act or regulations would prevail over the policy and the provisions in the policy would be modified in due course to make it consistent with Law.

This Policy shall be reviewed by the Nomination and Remuneration Committee as and when any changes are to be incorporated in the policy due to change in regulations or as may be felt appropriate by the Committee. Any changes or modification on the policy as recommended by the Committee would be given for approval of the Board of Directors.

No. of meetings of the Board

Six (6) Board meeting were held during the year 2017-2018 and the gap between two meetings did not exceed four months. The dates on which the Board Meeting was held are as follows:

Detail of Board Meetings held:

Sr. No.	Date of Board Meeting
1.	06th May 2017
2.	30th May 2017
3.	6th September 2017
4.	14th September 2017
5.	14th December 2017
6.	12th February 2018

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

All Independent Directors of the Company have given declarations that they meet the criteria of independence as laid down under Section 149 (6) of the Companies Act, 2013 and regulation 16(1)(b) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The terms & conditions for the appointment of Independent Directors are given on the website of the Company and separately disclosed in the Corporate Governance Report. http://www.vetoswitchgears.com/investor/corporate-governance/indpedndent-drectors.

6. Committees of Board

There are currently four Committee of the Board which is as follows:

a) Audit Committee;

b) Nomination, Remuneration & Compensation Committee

c) Corporate Social Responsibility (CSR) Committee;

d) Stakeholders’ Relationship Committee

Details of all the Committees along with their composition, charters Duties, Responsibilities and activities and meetings held during the year, are provided in the “Report on Corporate Governance”, a part of this Annual Report.

Name of Committee	Composition of Committee
Audit Committee	1. Mr. Govind Ram Thawani - Chairman 2. Mr. Mohan Sukhani 3. Mr. Narain Das Gurnani
Nomination and Remuneration Committee1	1. Mr. Govind Ram Thawani - Chairman 2. Mr. Kanwarjeet Singh 3. Mr. Mohan Sukhani
Shareholders’/Investors’ Grievance Committee	1. Mr. Govind Ram Thawani - Chairman 2. Mr. Narain Das Gurnani 3. Mr. Mohan Sukhani
Corporate Social Responsibility Committee	1. Mr. Govind Ram Thawani - Chairman 2. Mr. Mohan Sukhani 3. Mr. Narain Das Gurnani

7. Risk Management

The Company has framed and implemented a Risk Management Policy to identify the various business risks. This framework seeks to create transparency, minimize adverse impact on the business objectives and enhance the Company’s competitive advantage. The risk management policy defines the risk management approach across the enterprise at various levels including documentation and reporting.

8. Directors Responsibility Statement

The Board of Directors acknowledge the responsibility for ensuring compliances with the provisions of Section 134(3) (c) read with Section 134(5) of the Companies Act, 2013 in preparation of annual accounts for the year ended 31st March 2018 and state that :

(a) in the preparation of the annual accounts for the financial year ended 31st March 2018, the applicable accounting standards have been followed along with proper explanation relating to material departures;

(b) the Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable prudent so as to give a true and fair view of the state of affairs of the as at 31st March 2018 and profit of the Company for that period;

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

(d) the annual accounts have been prepared on a going concern basis;

(e) proper internal financial controls have been laid down which are adequate and are operating effectively.

(f) proper systems have been devised to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

9. Related Party Transactions

All transactions entered with Related Parties for the year under review were on arm’s 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 thereunder are not attracted. Thus, disclosure in form AOC-2 in terms of Section 134 of the Companies Act, 2013 is not required. Further, there are no material related party transactions during the year under review with the Promoters, Directors or Key Managerial Personnel. The Company has developed a framework through Standard Operating Procedures for the purpose of identification and monitoring of such Related Party Transactions.

All Related Party Transactions are placed before the Audit Committee as also to the Board for approval. Omnibus approval was obtained on a yearly basis for transactions which are of repetitive nature. Transactions entered into pursuant to omnibus approval are audited and a statement giving details of all Related Party Transactions are placed before the Audit Committee and the Board for review and approval.

The Company has put in place a mechanism for certifying the Related Party Transactions Statements placed before the Audit Committee and the Board of Directors from an Independent Chartered Accountant. The policy on Related Party Transactions as approved by the Board of Directors has been uploaded on the website of the Company viz. www.vetoswitchgears.com. None of the Directors has any pecuniary relationship or transactions vis-a-vis the Company. Pursuant to the provision of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board has framed a Policy on Material Subsidiaries and the same is available on Company’s website http://www.vetoswitchgears.com/investor/corporate-governance/policies-and-related-documents under the head Policy on Material Subsidiary.

However, you may refer to Related Party transactions in the relevant notes of the Standalone Financial Statements.

10. Listing of Shares

The shares of the Company are listed at BSE Limited & National Stock Exchange of India Ltd. and the listing fee for the year 2017-18 has been duly paid.

11. Prevention of Insider Trading

In compliance with the provisions of Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015, the Board has adopted a code of conduct and code of practices and procedures for fair disclosure of unpublished price sensitive information to preserve the confidentiality of price sensitive information prevent misuse thereof and regulate the trading by Insiders. The code of practice and procedures for fair disclosure unpublished price sensitive information is also available on the Company’s website i.e. www.vetoswitchgears.com.

12. Auditors and Auditor’s Report Statutory Auditors

The company as appointed M/s. K. M. Tulsian & Associates (Firm Registration No. 111075W), as the Statutory Auditor(s) of the Company for a period of 5 years commencing from the conclusion of the 10th Annual General Meeting till the conclusion of 15th Annual General Meeting to be held in the year 2022 .

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

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

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

Cost Auditors

Pursuant to the provisions of Section 148 of The Companies Act, 2013 the company is required to conduct cost audit as per Companies (Cost Record & Audit ) Rules, 2014 applicable from 1st April 2015.

The Board of Directors, on the recommendation of Audit Committee, has appointed M/s Rajesh & Company & Co., Cost Accountants, (Firm Registration Number No. 000031) as Cost Auditor to audit the cost accounts of the Company for the financial year 2018-19. As required under the Companies Act, 2013, a resolution seeking member’s approval for the remuneration payable to the Cost Auditor forms part of the Notice convening the Annual General Meeting for their ratification.

Secretarial Audit Report

The Board has appointed Ms. Nisha Agarwal Practicing Company Secretary, to conduct Secretarial Audit for the Financial Year 2017-18. The Secretarial Audit Report for the Financial Year ended 31st March 2018 is annexed herewith marked as Annexure V to this Report. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.

Corporate Governance Certificate

The Company is promptly submitting a “Quarterly Compliance Report on Corporate Governance” as per SEBI (Listing obligations and Disclosure Requirements) Regulations, 2015 with the Stock Exchanges.

The certificate from the Practicing Company secretary, Ms. Nisha Agarwal, C.P No. 8584, confirming compliance of conditions of Corporate Governance as stipulated under SEBI (Listing Obligations and Disclosure Requirements) Regulation, 2015 has been included in Annexures of this report.

Reservation and Qualification on Auditor Report

The report doesn’t contain any reservation, qualification or adverse remark. Information referred in Auditor’s Report are self-explanatory and don’t call for any further comments.

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

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

However an appeal is pending with the Sales Tax Department, Gujarat regarding assessment order issued and the details have been provided in the Independent Auditors Report.

13. Extract of Annual Return

The details with respect to extract of Annual Return is available at Company’s website: http://www.vetoswitchgears.com/investor- zone/category/financial-information/reports/ .

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

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

15. Depository System

Our Company’s Equity Shares are available in dematerialized form through The National Securities Depository Limited (NSDL) and The Central Depository Services of India (India) Limited (CDSL). The Company has set up requisite facilities for dematerialization of its Equity Shares in accordance with the provisions of Depository Act, 1996 with National Securities Depository Limited and Central Depository Services (India) Limited. The Company has entered into agreements with both of the Depositories. Accordingly, all shares post IPO, of the Company is held in demat form.

16. Report under the Prevention of Sexual Harassment Act

As a good corporate citizen, Veto is committed to a gender friendly workplace. It seeks to enhance equal opportunities for men and women, prevent/stop/redress sexual harassment at the workplace and institute good employment practices. Veto has established suitable processes and mechanisms to ensure issues such as sexual harassment, if any, are effectively addressed. Maintaining an open door for repartees, Veto encourages employees to report any harassment concerns and is responsive to complaints about harassment or any other unwelcome and offensive conduct. An Internal Complaints Committee has been constituted to enquire into complaints and recommend appropriate action, wherever required. Veto demands, demonstrates and promotes professional behavior and respectful treatment of all employees. During the year, no complaints of sexual harassment were received.

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

Disclosure pursuant to Section 134(3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014.

(A) CONSERVATION OF ENERGY

(i) Steps taken or impact on conservation of energy and the steps taken by the company for utilizing alternate sources of energy; Energy conservation measures taken Company has taken several steps to conserve energy through its “Sustainability” initiatives. The Company continues its endeavor to improve energy conservation and utilization. The Company has always been conscious of the need for conservation of energy and has been sensitive in making progress towards this end. Energy conservation measures have been implemented at all the plants and offices of the Company and special efforts are being put on undertaking specific energy conservation projects like :

1. Lighting: Efforts have been put by Company to reduce or optimize the lighting requirements at all the plants. Replacement of Conventional Light fittings with LED light fixtures, leading to savings in power at office areas. d) Installation of CFL, LED indicators, Use of 54Wx4 T5 lamps for assembly area.

2. Replacement of old equipment with new/ energy efficient equipment.

3. Optimization of Electrical Equipment: In addition to the existing controls on prime production equipment and existing prime utilities equipment, electrical equipment modifications / additions being done are continuous monitoring of Power factor of plant on daily basis, and redesign of pay off fixtures in cable division to reduce energy consumption by 30%.

4. Company believes in sharing and implementing best practices across all plants & stage wise replacement of conventional light fittings to LED light fittings is under progress across the manufacturing units. Impact of measures reduction of energy consumption.

The above measures have resulted in optimizing energy consumption and savings cost of production, reduction on carbon emissions and processing time.

Capital investment on energy conservation equipments - Efforts have been put by Company to reduce or optimize the energy requirements at all the plants. Company encourages capital investment in energy-saving equipment’s, plants or machinery and has invested a significant amount on the same.

(B) ENVIRONMENT, HEALTH AND SAFETY

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

Our Company is sensitive to environmental and resource conservation and its manufacturing philosophies ensure safety of the worker and surroundings.

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

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

(C) TECHNOLOGY ABSORPTION

The Company is putting continuous efforts in acquisition, development, assimilation and utilization of technological knowledge through its wide advance engineering project portfolio. This has enabled the Company to keep abreast with the latest developments in product technology, manufacturing process and methods, quality assurance and improvement, marketing, management systems and benefit out of mutual experience. To develop our product pipeline, we commit substantial time, efforts, funds and other resources for R&D. Our processes and products currently under development, if and when fully developed and tested, may not perform as we expect and we may not be able to successfully and profitably produce and utilize such products or processes. Therefore, our investments in R&D and new product launches could result in higher costs without a proportionate increase in revenues.

Company is carrying out the following activities to fulfill short term and long term business goals:

- Upgradation of existing product and processes to save cycle time, energy consumption and overall operational efficiency.

- Import substitution and identification of new raw materials for development.

- Technology support to all plants to improve efficiency and enable business growth.

- Optimization of products and processes to minimize waste generation and address environmental and safety concerns.

- Development of smart test methods to speed up testing of incoming raw materials.

- Development of in house domain expertise to support product development.

- Focus on in house product development in the area of smart internet base solution etc.

- The benefits derived like product improvement, cost reduction, product development or import substitution:

(D) Detail of Foreign Exchange Earnings and Outgo.

During the financial year Company’s Foreign exchange earned in terms of actual inflows year was 1,64,09,976 INR and the Foreign Exchange outgo in terms of actual outflows (including machinery imported) was 21,73,177 INR. Hence net foreign exchange inflow is 14236799.374 INR. The information on foreign exchange and outgo is furnished in the relevant notes to the accounts of Standalone Financial results

18. Credit Rating

Your Company has been reaffirmed long-term rating of BBB (ICRA triple B plus) by ICRA Limited. The outlook of long term rating is “Stable”.

19. Employee Stock Options under ESOP 2015

The Company had, vide special resolution passed in the Annual General Meeting held on 26th August, 2015 has approved the company’s ESOP Scheme 2015. The purchase price of the options was approved on 23.05.2016 under the supervision of the Nomination and Remuneration Committee of the Board of Directors of the company. Further, Pursuant to the exercise of stock options under Employee Stock Option Scheme 2015 (“ESOP Scheme 2015”). In accordance with the terms and conditions of the plan the company has granted 916355 stock options on 23.05.2016 and Vested on 23.05.2017 in single tranche. The said options were exercisable within a period of 1 to 3 years from the date of vesting and settled by way of issue of equity shares. The details of the same are as under:

Vesting period	1 to 3 years
Exercise period	3 Years from the date of Vesting of Options
Pricing Formula	Each option carries the right to the holder for one equity share
	of the company at Rs. 50
Brief details of option granted	- The above options have vesting period of 1 to 3 years. - The options shall be exercisable within a period of 3 years after vesting of the same. - The options carry the right to apply for equivalent number of equity shares of the Company.
Employee wise details of options granted to i) senior managerial personnel ii) identified employees who were granted	- Jyoti Gurnani - Akshay Gurnani	900 6,69,855
option, during any one year, equal to or exceeding 1% of the issued capital (excluding outstanding warrants and conversions) of the company at the time of
grant

Acknowledgment

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

For and on behalf of the Board of Directors

Date : 07/09/2018 Sd/- Sd/-

Place : Jaipur Akshay Kumar Gurnani Narain Das Gurnani

Managing Director & CEO Whole-time Director & CTO

DIN: 06888193 DIN: 01970599

---

Mar 31, 2016

1. DIRECTOR''S REPORT Dear Shareowners,

The Directors have pleasure in presenting the 9th Annual Report on the business and operations of the Company, together with the Audited Financial Statements for the financial year ended 31st March, 2016 and other accompanying reports, notes and certificates.

1. Company Performance

The Company has grown exponentially during the current financial year. The Standalone and Consolidated Audited Financial Results of the Company for year ended 31st March, 2016 are as follows:

Financial Results (Rs. in Lacs)

	Consolidated		Standalone
Particulars	2015-16	2014-2015	2015-16	2014-2015
Revenue from Operations (including other Income)	17,698.39	9,783.86	11,287.58	9,783.86
Less Expenses : (a) Cost of materials consumed	4,835.58	4,558.31	4,835.58	4,558.31
(b) Purchases of stock-in-trade	8,573.00	2,290.03	2,632.43	2,290.03
(c) Changes in inventories of finished goods, and stock-in-trade	(608.75)	(398.49)	(463.41)	(398.49)
(d) Employee benefits expense	761.82	599.61	719.56	599.61
(e) Depreciation and amortization expense	197.46	201.37	197.46	201.37
(f) Other expenses	1,525.47	1,162.43	1,496.12	1,162.30
Total expenses	15,284.58	8,413.26	9,417.74	8,413.13
Finance costs	455.01	395.17	454.77	395.17
Profit before tax and exceptional items	1,958.80	975.43	1,415.07	975.56
Less: Exceptional items	421.03	-	421.03	-
Profit before tax	1,537.77	975.43	994.04	975.56
Less: Tax Expense	228.49	261.01	228.49	261.01
Less: Minority interest	-	-	-	-
Profit after tax	1,309.28	714.42	765.55	714.55

Consolidated Financial Results for the year ending 2015 and 2016:-

During the year under review on consolidated basis our Company earned profit before tax and exceptional items of Rs. 1958.80 Lacs against Rs. 975.43 Lacs in the previous year. The Company earned profit after tax of Rs. 1309.28 Lacs as compare to Rs. 714.42 Lacs in the previous year. The Company had Income from operation of Rs. 17674.21 Lacs as compared to Rs. 9730.22 Lacs in previous year. The Profit before Interest/Depreciation/Tax (PBIT) was Rs. 2154.90 Lacs as compared to Rs. 1560.44 Lacs in previous year.

Standalone Financial Results for the year ending 2015 and 2016:-

During the year under review on standalone basis our Company earned a profit before tax and exceptional items of Rs. 1415.07 Lacs against Rs. 975.56 Lacs in the previous year. The Company earned profit after tax of Rs. 765.55 Lacs as compare to Rs. 714.55 Lacs in the previous year. The Company had Income from operation of Rs. 11209.48 Lacs as compared to Rs. 9730.22 Lacs in previous year. The Profit before Interest/Depreciation/Tax (PBIT) was Rs.1611.17 Lacs as compared to Rs. 1560.57 Lacs in previous year.

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

Dividend

The Company has paid an interim dividend of 5%, being Rs. 0.50 per share of Rs. 10/- each, on January 29, 2016. We are pleased to recommend a final dividend of 15%, being Rs. 1.50/- per share of Rs. 10/- each, for the financial year 2015-16. The final dividend, if approved by the members, will be paid to members within the period stipulated by the applicable Companies Act. The aggregate dividend for the year will amount to 20%, being Rs. 2 per share of Rs. 10/- each. This is the first time company has declared any dividend.

Reserves

Rs. 765.55 lakhs has been transfer to reserves and surplus account during the current year.

IPO proceeds and Deployment of funds

Your Company has successfully come up with an IPO on December 13, 2012 and listed on EMERGE in NSE. The issue size was Rs. 25, 00, 50,000/- (Twenty Five Crores Fifty Thousand only) consisting of 50, 01,000 (Fifty Lakh One Thousand only) Equity Shares offered at Rs. 50/- (Face value of shares Rs. 10/- per share and premium of Rs. 40/- per share). The issue open and close date was December 3, 2012 and December 5, 2012 respectively. The amount has been completely utilized towards objects of issue and the details have been furnished in the Annual report of 201415.

Change in the nature of business, if any

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

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

On May 23^rd 2016 the nomination and remuneration committee of the company has granted 916355 Employee Stock options at exercise price of Rs. 50 convertible into equal number of shares i.e. one share for each option, to the employees under Employee Stock Option Scheme 2015 (ESOP 2015). Consequently the company has charged Rs. 56.39 Lakhs in profit and loss account as employee compensation expense. The said amount was charged by the Board of directors after taking into consideration the resignation of Mr. Dinesh Gurnani who gave up his granted 100000 options.

In July, 2016 the promoter and holding company of your company Veto Electro powers (India) Private limited, has sold its holding of approx 8.18%, subsequently your company is no longer a subsidiary of Veto Electro powers (India) Private limited.

In May and July, 2016, Mr. Akshay Kumar Gurnani, promoter of the company, has sold his shares in the market, pursuant to which his shareholding fell from 5.97% to 0.59%. The Stock exchanges were intimated about the same.

On a meeting held by the Board of Directors on 23^rd May 2016, Mr. Dinesh Kumar Gurnani was relieved and Mr. Narain Das Gurnani was appointed as the Additional Director as well as the Chief Financial Officer of the Company.

Management Discussion and Analysis

The Management Discussion and Analysis Report of the financial condition and results of operations of the Company for the year under review as required under regulation 34(2) (e) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is being given separately and forms part of this Board Report .

Particulars of Loan, Guarantee and Investments

The details of loans, guarantees and investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the note no. 13, 31, 11, 14, and 15 respectively to the Standalone Financial Statements of the Company.

Particulars of Contracts and Arrangement under section 188

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

Deposits

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

a) Accepted during the year : NIL

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

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

i. At the beginning of the year: NIL

ii. Maximum during the year: NIL

iii. At the end of the year: NIL

2. Business Operations/ State of Company''s Affairs

As one of the most respected cable manufacturers in India, Veto switchgears and Cables is committed to quality, safety and service with no compromise. The Company is an ISO 9001:2008 certified company, engaged in the manufacture and sale of wires & cables and electrical accessories in India.

The brand name VETO is since 1967. VETO holds a major part of electrical accessories in India. The company also has a strong and hardworking team of marketing professionals and dealers and distributors sales of the unit increasing day by day and its production is manifold many times since its inception. We are looking forward to grow further by way of providing " Best Quality at Competitive Prices."

The product portfolio ranges from industrial cables, stand cables to telephone & co-axial wires, from general switches to modular switches, from ceiling fans to rechargeable fans, compact fluorescent lamps, LED bulbs and other electrical accessories. We are dealing in electrical accessories like switch socket, MCB, bell and all electrical accessories which is used for household purposes and manufacturing wires and cables. Cable starts from 0.75 mm to 10 mm.

Our Company supplies these products under the brands "VETO" and "VIMAL POWER" through large network of dealers to the customers in India as well as selected customers abroad.

VIMAL POWER is a part of the Veto group and continues to reinforce a successful international presence and enhance its enviable reputation for innovation. A continuous programme of research and development ensures a world beating range of cables to satisfy or surpass requirements of Indian Standards. The Group is strongly positioned in high-tech markets and offers the widest range of products, services, technologies and know-how.

The company incorporated a wholly owned subsidiary company in Dubai by the name of VETO Overseas Private F.Z.E in October 2015.

Future Prospects

1) The company is planning to launch a gyser.

2) Operation in Mahindra SEZ are expected to begin in the coming financial year.

Raw Material

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

(Qty. in kg)

Product category	Existing (2015-16)	Proposed (2016-17)
Copper	587472	646220
PVC Resin	95156	104672
Aluminium	493087	542396

Infrastructure facilities

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

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

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

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

Category	Nos.
Top management	3
Managerial & Supervisory staff	77
Office staff	61
Skilled workers	60
Unskilled workers	370
Total	571

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

- Environmental Clearance : We have got all the necessary approvals from the local authorities to operate our business.

- Safety standards : Quality and safety are the hallmarks of our diverse range of products, which are designed and manufactured to the very highest standards such as ISO 9001 and approved by the leading approvals organisations nationally and internationally.

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

- Capacity and capacity utilization

Particulars	Projected		Actual
	FY 201 5-16	FY 201 6-17	FY 201 5-16
Wires & Cables
Installed Capacity	20 Lacs Bundles	20.00 Lacs Bundles	20.00 Lacs Bundles
Capacity Utilization (in %)	45%	50%	43.50%
Production	9.00 Lac Bundles	10.00 Lac Bundles	8.70 Lac Bundles
Electrical Accessories
Installed Capacity	600 Lac pieces	600 Lac pieces	400 Lac pieces
Capacity Utilization (in %)	30 %	36 %	37.15 %
Production	18 0 Lac pieces	216 Lac pieces	148.58 Lac pieces

- Insurance

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

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

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

3. Accidental & Health insurance facility for field staff;

4. Gratuity policy;

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

Risks and Concerns:

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

2. Legal Risks, fraud, Theft, etc

3. Uncertainties in financial markets

4. Failure in Projects

5. Credit Risks

6. Outstanding Debtors

7. Security and Storage of Data and Records

8. Competitors have market standing out of Rajasthan.

Internal Control System

- The Company has put in place an adequate system of internal control commensurate with its size and nature of business. These systems provide a reasonable assurance in respect of providing financial and operational information, complying with applicable statutes, safeguarding of assets of the Company and ensuring compliance with corporate policies. The Audit Committee reviews adherence to internal control systems and internal audit reports.

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

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

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

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

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

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

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

Awards and Recognition

During the year our company has been awarded with "Best in Quality Excellence Award" which was received by our Managing Director Mr. Akshay Gurnani from Confederation of Indian Industry (CII).

Details of Subsidiaries/Joint Venture/Associate Companies

The Company has two subsidiary Companies. One in Jaipur and and the other in Duabi, UAE.

Pursuant to provisions of Section 129(3) of the Companies Act, 2013 a statement containing salient features of the Company''s subsidiaries is provided in the Annexure-I to the Director''s report of the Company.

Pursuant to the provisions of Section 136 of the Companies Act, 2013 the financial statements of the Company, consolidated financial statements along with relevant documents and separate audited accounts in respect of subsidiaries, are also available on the website of the Company.

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

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

On 11th October 2015 Veto registered a wholly owned subsidiary in Dubai by the name of "Veto Overseas Private F.Z.E and Mr. Mohan Das Gurnani was appointed as its Manager. It has earned total revenue of 35611834 AED since its inception till March 31^st 2016. The Company has declared profit of 3070392 AED. It is headed by Group Chairman Mr. Mohan Das Gurnani as its Manager. The copy of the Consolidated audited accounts, together with the independent auditor''s report, is provided in a separate section of this Annual Report.

Performance and Financial position of Subsidiary Company

The details with respect to subsidiary Companies as on March 31, 2016 have been discussed in Annexure II.

3. Human Resource Management

Employee Relations

VETO encourages a culture of trust and mutual respect. Employees are aligned on common objectives and take pride in the quality of the products that leave the factory for sale in the markets. We have over the years realized the importance of human capital and duly acknowledge it in its business operations. Your Company has managed to create "Lifers" at VETO- people who have been associated with your Company, many having started their earning life at VETO. It gives the much needed stability and satisfaction when we realize that our partners in success trust us to such an extent that they stand by us at all times.

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

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

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

Managerial Remuneration

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

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

1. Remuneration paid to Directors

(In Lacs)

Name of Directo r	Title	Remuneration in Year 20152016	Remuneration in Year 20142015	%increase in Remuneration in comparison to last year	Ratio of Remuneration to MRE
Mr. Akshay Kumar Gurnani	Managing Director	1500000	1225000 1	20.69	8.30
Mr. Dinesh Gurnani1	Whole-time Director	720000	720000	0.00	3.99
Ms. Jyoti Gurnani	Director	200000	0	100.00	3.32

1. Mr. Akshay Kumar Gurnani was appointed as Managing Director on August 27^th 2014.

2. Mr. Dinesh Gurnani has resigned from office of Whole time Director and CFO , and has been paid salary up to May 2016.

2. Remuneration paid to Key Managerial Personnel (I_n L_acs)

Name of Key Managerial Personnel	Title	Remuneration in year 20152016	Remuneration in Year 20142015	%increase in Remuneration in comparison to last year	Ratio of Remuneration to MRE
Mr. Vasudev Lalwani	Vice President Marketing	9,76,000	6,08,000	60.53	5.40
Ms. Chavi Rawat	Company Secretary cum Compliance Officer	1,53,3242	60,000	16.15	0.93
Mr. Anuj Kumar Khator	Sr. Accounts Officer	384061	20,128	16.00	2.12
Ms. Shilpi Keswani	Company Secretary cum Compliance Officer	152623 (w.e.f. 05/03/2016)		N.A.	0.99

1. The remuneration disclosed here is upto 31^st March 2016 as per the audited Financial Statements.

2. Ms. Chavi Rawat has been paid salary upto relieving date i.e. 25^th Feb 2016.

3. Ms. Shilpi Keswani was appointed w.e.f. March 5^th 2016.

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

* Median Remuneration is calculated by excluding the employees who leaves during the year and the unskilled employees and is based on annualized salary, MRE - Median Remuneration of employees.

3. The median remuneration of employees was Rs.1,80,600 in financial year 2015-16 the same that was in financial year 2014- 15.

5. The number of permanent employees on the rolls of Company was 571 employees as on 31st March, 2016.

6. The total revenue growth and net profit of the Company during the financial year 2015-16 as compared to financial year 2014-15 was increased by 15.36% and 7.14% respectively. While aggregate remuneration of the employees was increased by 16.13% over the previous financial year. The increase in remuneration was due to annual increment and new employment. Increase in revenue and net profit was due to increased efficiency and growth of the company .

7. Average Salary increase of non-managerial employees was 19.90 % and that of managerial employees 30.37 % in financial year 2015-16. There are no exceptional circumstances in increase in managerial remuneration.

8. There is no change in the remuneration of Whole time Director. However Managing director has been given an annual increment and executive director Ms. Jyoti Gurnani has been paid remuneration for the first time.

9. Remuneration paid during the year ended 31st March, 2016 is as per the Remuneration Policy of the Company.

Particulars of Employees

Your Directors confirmed that no employee fall under the particulars of Section 197 of the Companies Act, 2013 read with Rule 5 (2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

4. Corporate Governance

Corporate Governance Report

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

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

A report on corporate governance confirming compliance of conditions as stipulated under SEBI (Listing Obligations and Disclosure Requirements) Regulation, 2015 has been included in Annexure IV of this report.

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

5. Directors and Key Managerial Personnel (KMP)

Change in directors and KMP during the year

There were no new appointments or cessation of directors in the financial year. During the year, Ms. Chavi Rawat, Company Secretary and compliance officer has resigned w.e.f 9th February, 2016 and was relieved from her duties w.e.f. 25 February, 2016. The Board of Directors at its meeting held on 5th March, 2016 appointed Ms. Shilpi Keswani as the company secretary cum compliance officer. The Shareholders of the Company at their 8th Annual General Meeting (AGM) held on 26th August, 2015 re-appointed Ms. Jyoti Gurnani as Director whose office was liable to retire by rotation.

Composition of Board of Directors as on 31^st March, 2016 :

Sr. No.	Name Of Director	Designation	Date of Appointment	Date of Cessation
1	Mr. Dinesh Gurnani1	Whole -Time Director and CFO	22/08/2012	NA
2	Mr. Mura li dhar Kaurani	Non-executive Independent Director	31/08/2012	NA
3	Mr. Mohan Sukhani	Non-executive Independent Director	31/08/2012	NA
4	Mr. Govind Ram Thawani	Non-executive Independent Director	31/08/2012	NA
5	Ms. Jyoti Gurnani	Director	27/08/2014	NA
6	Mr. A kshay Kumar Gurnani	Exec utive Managing Director and CEO	27/08/2014	NA

1. Mr. Dinesh Gurnani has resigned on May 24^th 2016 and Mr. Narain Das Gurnani has been appointed as the Additional Director cum CFO w.e.f. May 24^th 2016.

Board Evaluation

Pursuant to the provisions of the Companies Act, 2013, the Board has carried out an annual performance evaluation of its own performance, that of its Committees and individual Directors. Relevant details have been provided in the Corporate Governance Report.

Remuneration Policy

Remuneration Policy

For Labours For Office Staff

I. For Labours: For fixing the Remuneration for the Labours Minimum Wages Act, 1948 is applicable. Remuneration is payable on Hours basis.

II. For Office Staff : The Committee will recommend the remuneration to be paid to the Managing Director, Whole-time Director, KMP and Senior Management of the quantity required to run the Company successfully. The relationship of remuneration to performance should be clear and meet appropriate performance benchmarks. Minimum 5% increment to the Management of the Company may provide excess of remuneration on the basis of outstanding performance of employee only, if the Company is not satisfied with the performance of the Employee than they can restrict the increment. The remuneration should also involve a balance between fixed and incentive pay reflecting short and long-term performance objectives appropriate to the working of the company and its goals.

a. Managing Director : The remuneration and commission to be paid to the Managing Director shall be in accordance with the provisions of the Companies Act, 2013, and the rules made there under. Increments to the existing remuneration/ compensation structure may be recommended by the Committee to the Board which should be within the limits approved by the Shareholders.

b. Directors : The remuneration/compensation/commission etc. to Directors will be determined by the Committee and recommend to the Board for approval.

c. Non executive Independent Directors : The Non Executive Independent Director may receive remuneration by way of Sitting Fees for attending meetings of the Board thereof. Provided that the amount of such fees shall be subject to ceiling/limits as provided under Companies Act, 2013 and rules made there under or any other enactment for the time being in force.

d. KMPs/ Senior Management Personnel : The Remuneration to be paid to KMPs/Senior Management Personnel shall be based on the experience, qualification and expertise of the related personnel and governed by the limits, if any prescribed under the Companies Act, 2013 and rules made there under or any other enactment for the time being in force.

e. Directors'' and Officers'' Insurance : Where any insurance is taken by the Company on behalf of its Directors, KMPs/Senior Management Personnel etc. for indemnifying them against any liability, the premium paid on such insurance shall not be treated as part of the remuneration payable to any such personnel.

This Policy is updated based on the provisions of the Companies Act, 2013 and rules made thereunder and requirements of the relevant rules and regulations issued by SEBI from time to time.

In case of any subsequent changes in the provisions of the Companies Act, 2013 or any other regulations which makes any of the provisions in the policy inconsistent with the Act or regulations, then the provisions of the Act or regulations would prevail over the policy and the provisions in the policy would be modified in due course to make it consistent with Law.

This Policy shall be reviewed by the Nomination and Remuneration Committee as and when any changes are to be incorporated in the policy due to change in regulations or as may be felt appropriate by the Committee. Any changes or modification on the policy as recommended by the Committee would be given for approval of the Board of Directors.

No. of meetings of the Board

Nine (9) Board meeting were held during the year 2015-2016 and the gap between two meetings did not exceed four months. The dates on which the Board Meeting was held are as follows:

Detail of Board Meetings held:

Sr. No.	Date of Board Meeting
1	29th May 2015
2	23rd July 2015
3	14th August 2015
4	31st August 2015
5	9th November 2015
6	28th November 20 15
7	18th January 2016
8	22nd February 2016
9	5th March 2016

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

All Independent Directors of the Company have given declarations that they meet the criteria of independence as laid down under Section 149 (6) of the Companies Act, 2013 and regulation 16(1)(b) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The terms & conditions for the appointment of Independent Directors are given on the website of the Company and separately disclosed in the Corporate Governance Report. http://www.vetoswitchgears.com/investor/corporate-governance/independent-directors

6. Committees of Board

There are currently four Committee of the Board which are as follows :

a) Audit Committee

b) Nomination, Remuneration & Compensation Committee

c) Corporate Social Responsibility (CSR) Committee

d) Stakeholders'' Relationship Committee

Details of all the Committees along with their composition, charters Duties, Responsibilities and activities and meetings held during the year, are provided in the "Report on Corporate Governance", a part of this Annual Report.

Name of Committee	Composition of Committee
Audit Committee	1. Mr.Govind Ram Thawani - Chairman 2. Mr. Mohan Sukhani 3. Mr. Dinesh Gurnani1
Nomination and Remuneration Committee	1. Mr.Govind Ram Thawani - Chairman 2. Mr. Murlidhar Kaurani 3. Mr. Mohan Sukhani
Shareholders''/Investors'' Grievance Committee	1. Mr.Govind Ram Thawani - Chairman 2. Mr. Dinesh Gurnani1 3. Mr. Mohan Sukhani
Corporate Social Responsibility Committee	1.Mr. Govind Ram Thawani, Chairman 2. Mr. Mohan Sukhani 3. Mr. Dinesh Gurnani1
Internal Complaint Committee	1. Ms. Jyoti Gurnani, Presiding Officer 2. Mr. Anuj Kumar Khator, Member 3. Mr. Anirudh Mathur, Member

1. Changes in the composition of Director and the Committee:

Mr. Dinesh Gurnani resigned w.e.f 24^th May 2016 and Mr. Narain Das Gurnani was appointed as the additional director cum CFO , and became a member of the Audit Committee, Corporate Social Responsibility Committee and Stakeholders Relationship committees, thereafter.

7. Risk Management

The Company has framed and implemented a Risk Management Policy to identify the various business risks. This framework seeks to create transparency, minimize adverse impact on the business objectives and enhance the Company''s competitive advantage. The risk management policy defines the risk management approach across the enterprise at various levels including documentation and reporting.

8. Directors Responsibility Statement

The Board of Directors acknowledge the responsibility for ensuring compliances with the provisions of Section 134(3) (c) read with Section 134(5) of the Companies Act, 2013 in preparation of annual accounts for the year ended 31st March, 2016 and state that :

(a) in the preparation of the annual accounts for the financial year ended 31st March, 2016, the applicable accounting standards have been followed along with proper explanation relating to material departures;

(b) the Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2016 and profit of the Company for that period;

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

(d) the annual accounts have been prepared on a going concern basis;

(e) proper internal financial controls have been laid down which are adequate and are operating effectively.

(f) proper systems have been devised to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

9. Related Party Transactions

All related party transactions entered into during the financial year were on an arm''s length basis and in the ordinary course of business. There are no material significant related party transactions made by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons and their relatives which may have a potential conflict with the interest of the Company at large. Particulars of contracts or arrangements with related parties referred to Section 188(1) of the Companies Act, 2013 in the form AOC 2 is annexed herewith as Annexure III. A list of all related party transactions is placed before the Audit Committee as well as the Board of Directors. The Board has also framed a policy on related party transactions and the same is available on Company''s website i.e. http://www.vetoswitchgears.com/investor/corporate-governance/policies-and-related-documents under the head Policy on Related Party Transaction

Pursuant to the provision of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board has framed a Policy on Material Subsidiaries and the same is available on Company''s website http://www.vetoswitchgears.com/investor/corporate-governance/policies-and-related-documents under the head Policy on Material Subsidiary

10. Listing of Shares

The shares of the Company are listed at BSE Limited & National Stock Exchange of India Ltd. and the listing fee for the year 2016-17 has been duly paid.

11. Prevention of Insider Trading

In compliance with the provisions of Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015, the Board has adopted a code of conduct and code of practices and procedures for fair disclosure of unpublished price sensitive information to preserve the confidentiality of price sensitive information, prevent misuse thereof and regulate the trading by Insiders. The code of practice and procedures for fair disclosure of unpublished price sensitive information is also available on the Company''s website i.e. www.vetoswitchgears.com .

12. Auditors and Auditor''s Report

Statutory A uditors

SGCO & Co. (Membership No. 44739) Chartered Accountants Statutory Auditors of the Company holds office until the conclusion of the ensuing Annual General Meeting and is eligible for re-appointment. It is proposed to reappoint them as Statutory Auditors of the Company for the financial year 2016-17.

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

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

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

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

Cost Auditors

Pursuant to the provisions of Section 148 of The Companies Act, 2013 the company is required to conduct cost audit as per Companies (Cost Record & Audit ) Rules, 2014 applicable from 1st April 2015.

The Board of Directors, on the recommendation of Audit Committee, has appointed M/s Rajesh & Company & Co., Cost Accountants, (Firm Registration Number No. 000031) as Cost Auditor to audit the cost accounts of the Company for the financial year 2016-17. As required under the Companies Act, 2013, a resolution seeking member''s approval for the remuneration payable to the Cost Auditor forms part of the Notice convening the Annual General Meeting for their ratification.

Secretarial Audit Report

The Board has appointed Ms. Nisha Agarwal Practicing Company Secretary, to conduct Secretarial Audit for the Financial Year 2015-16. The Secretarial Audit Report for the Financial Year ended March 31, 2016 is annexed herewith marked as Annexure VII to this Report. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.

Corporate Governance Certificate

The Company is promptly submitting a "Quarterly Compliance Report on Corporate Governance" as per SEBI (Listing obligations and Disclosure Requirements) Regulations, 2015 with the Stock Exchanges.

The certificate from the Practicing Company secretary, Ms. Nisha Agarwal, C.P. No. 8584, confirming compliance of conditions of Corporate Governance as stipulated under SEBI (Listing Obligations and Disclosure Requirements) Regulation, 2015 has been included in Annexure-ix of this report.

Reservation and Qualification on Auditor Report

The report doesn''t contain any reservation, qualification or adverse remark. Information referred in Auditor''s Report are self-explanatory and don''t call for any further comments.

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

There are no significant and material orders that are passed by the regulators or courts or tribunal impacting the going concern status and Company''s operations in future. However an appeal is pending with the Sales Tax Department, Gujarat.

13. Extract of Annual Return

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

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

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

15. Depository System

Our Company''s Equity Shares are available in dematerialized form through The National Securities Depository Limited (NSDL) and The Central Depository Services of India (India) Limited (CDSL). The Company has set up requisite facilities for dematerialization of its Equity Shares in accordance with the provisions of Depository Act, 1996 with National Securities Depository Limited and Central Depository Services (India) Limited. The Company has entered into agreements with both of the Depositories. Accordingly, the shares post IPO, of the Company is held in demat form.

16. Report under the Prevention of Sexual Harassment Act

A Complaint against an employee of the company Mr. Nitin Motwani has been received by the company and the internal Complaint committee held a meeting on urgent basis to discuss the same. After the meeting a notice was issued to him and he was suspended from his duties till the case is resolved.

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

Disclosure pursuant to Section 134(3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014.

(A) CONSERVATION OF ENERGY

(i) Steps taken or impact on conservation of energy and the steps taken by the company for utilizing alternate sources of energy; Energy conservation measures taken Company has taken several steps to conserve energy through its "Sustainability" initiatives. The Company continues its endeavour to improve energy conservation and utilization. The Company has always been conscious of the need for conservation of energy and has been sensitive in making progress towards this end. Energy conservation measures have been implemented at all the plants and offices of the Company and special efforts are being put on undertaking specific energy conservation projects like :

1. Lighting: Efforts have been put by Company to reduce or optimize the lighting requirements at all the plants. Replacement of Conventional Light fittings with LED light fixtures, leading to savings in power at office areas. d) Installation of CFL, LED indicators, Use of 54Wx4 T5 lamps for assembly area.

2. Replacement of old equipment with new/ energy efficient equipment.

3. Optimization of Electrical Equipment: In addition to the existing controls on prime production equipment and existing prime utilities equipment, some electrical equipment modifications / additions being done are continuous monitoring of Power factor of plant on daily basis, and redesign of pay off fixtures in cable division to reduce energy consumption by 30%.

4. Company believes in sharing and implementing best practices across all plants & stage wise replacement of conventional light fittings to LED light fittings is under progress across the manufacturing units. Impact of measures for reduction of energy consumption

The above measures have resulted in optimizing energy consumption and savings cost of production, reduction on carbon emissions and processing time.

Capital investment on energy conservation equipments - Efforts have been put by Company to reduce or optimize the energy requirements at all the plants. Company encourages capital investment in energy-saving equipment''s, plants or machinery and have invested a significant amount on the same.

B) ENVIRONMENT, HEALTH AND SAFETY

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

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

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

(C) TECHNOLOGY ABSORPTION

The Company is putting continuous efforts in acquisition, development, assimilation and utilization of technological knowledge through its wide advance engineering project portfolio. This has enabled the Company to keep abreast with the latest developments in product technology, manufacturing process and methods, quality assurance and improvement, marketing, management systems and benefit out of mutual experience. To develop our product pipeline, we commit substantial time, efforts, funds and other resources for R&D. Our processes and products currently under development, if and when fully developed and tested, may not perform as we expect and we may not be able to successfully and profitably produce and utilize such products or processes. Therefore, our investments in R&D and new product launches could result in higher costs without a proportionate increase in revenues. Company is carrying out the following activities to fulfill short term and long term business goals:

l Upgradation of existing product and processes to save cycle time, energy consumption and overall operational efficiency.

l Import substitution and identification of new raw materials for development.

l Technology support to all plants to improve efficiency and enable business growth.

l Optimization of products and processes to minimize waste generation and address environmental and safety concerns.

l Development of smart test methods to speed up testing of incoming raw materials.

l Development of in house domain expertise to support product development.

l Focus on in house product development in the area of smart internet base solution etc.

The benefits derived like product improvement, cost reduction, product development or import substitution:

l Increased Customer satisfaction & sale ability.

l Improved Brand equity.

l Cost Reduction through Quality & productivity.

l New product introduction.

In case of imported technology, relevant details :

There was machinery imported from China in the Year 2015. The machinery is currently installed and is working effectively in the plant located at Haridwar

(D) Detail of Foreign Exchange Earnings and Outgo.

During the financial year Company''s Foreign exchange earned in terms of actual inflows year was 901168 USD and the Foreign Exchange outgo in terms of actual outflows (including machinery imported) was 482081.60 USD. Hence net foreign exchange inflow is 419087 USD. The information on foreign exchange and outgo is furnished in the note 39 to the accounts of Standalone Financial results

18. Credit Rating

Your Company has been reaffirmed long-term rating of BBB (ICRA triple B plus) by ICRA Limited. The outlook of long term rating is " Stable" .

19. Employee Stock Options under ESOP 2015

During the year, the company has been granted shareholder''s approval for the ESOP 2015 (here in under referred as "the Scheme") and subsequently the scheme was formulated by the Nomination and remuneration Committee and approved by the Board. The Scheme involved grant of 9,16,355 (Nine Lakh sixteen thousand three hundred and fifty five ) stock options convertible into 9,16,355 (Nine Lakh sixteen thousand three hundred and fifty five) Equity Share of Rs. 10 each. There have been granted no stock options to the eligible employees of the Company and its Subsidiaries in the financial year as the process of obtaining In-principal approval from NSE and BSE was going on. The ESOP Scheme is in compliance with SEBI (Share Based Employee Benefits) Regulations, 2014. The detail is available on the Company''s website www.vetoswitchgears.com.

20. Management Discussion and Analysis

Management Discussion and Analysis report is attached herewith forms part of this report. Summary of performance and various businesses and functions of the Company is as follows:

i. Economy and Markets

The electronics market of India is one of the largest in the world and is anticipated to is projected to grow at a compound annual growth rate (CAGR) of 24.4 per cent during 2012-2020. Separately, forecasts say that the electric wire and cable market in India is to grow at a CAGR of 16.18 percent over the period 2015-19 as power cables led the revenues of the wires and cables market with more than 50 percent contribution to the total market in fiscal year 2014.

The Indian wire and cable industry is growing satisfactorily and getting more and more consolidated and becoming largely organized now. The power cable led the industry from front contributing almost 50 percent of the industry''s emphasis on laying comprehensive power distribution and transmission network in the country. The increasing digitalization has of course catapulted the demand even more. Construction is also one of the core sectors of Indian economy and future of the industry is important for commodities. Construction cables and wire sector anticipated to see steep growth in demands in coming days owing to huge govt''s, spending in infrastructure, smart cities, real estate boom, and housing explosion.

At more than 7% rate of annual GDP growth, India is already amongst the fastest growing economy in the world. Inflation rates are under control and so are the consumer as well as wholesale prices. Government priority projects such as Housing for All, Smart Cities, Interlinking of rivers, AMRUT, Swacch Bharat, development of inland water ways for transportation, etc. are steps in the right direction. Power sector reforms being expected to be a top priority for our government is playing out. We are witnessing notable progress in the Indian power market with regards renewable energy expansion, reducing red tape for power projects and improving fuel availability for thermal generation. We believe the government will increasingly turn its attention to reforming the power distribution segment and boosting India''s energy independence. Also, the year 2015 started off on a good note for the LED industry in India. PM''s initiative to launch Notional programme for LED based Home & street lightning as well as a scheme for LED distribution under the domestic Efficient Lighting program is highly valued for the growth of India. The PO communique stated studies showed LEDs were 25% more efficient than CFL, 23% more efficient than tubelights and 80 % more efficient than incandescent lamps. The Prime Minister''s initiative has accelerated the adoption of LED''s in several sectors across the country through the creation of several new policies and financial subsidies undertaken by the Ministry of power, BEE and various state municipalities. This has helped propel the industry to grow five folds in five year its from its current size of Rs. 4000 crores according to Electric Lamp and Component Manufacturers Association (ELCOMA).

Source:, http://www.openpr.com/ , http://ieema.org/ , wire & cable India .

ii. Market Overview

Your Company has major earning in the state of Rajasthan. But this year our focus is to widen and cover more and more states of India. The company has broadened its network and distribution. We have also had major success in some of the biggest cities of UAE. The company and its Board have started working towards making Veto a globally established brand. Our products are marketed in both domestic and international markets.

Increase in Urban Population and Per-Capita Income has been growing at a steady rate and is expected to increase further due to affordability and changing life styles of the people. The demand of manufacturing of wires & cables and electrical accessories & other allied products in India is also hence likely to increase. We have proposed to expand our manufacturing capacity so as to meet the increased demand both in domestic and foreign markets. De-licensing and Removal of Tariffs for the Industry , Low Entry Barriers, Increased Demand for Housing, Increased Growth in the Emerging Markets and in the Production of Renewable Energy and Increased Growth in the Emerging Markets and in the Production of Renewable Energy are also our basic growth drivers of the market. We are also looking forward to housing projects of Government and semi-government agencies.

iii. Competition

Our Company operates in competitive environment and has a number of organized players and very few unorganized players. Our Company''s major emphasis is on manufacturing of superior designed quality product at affordable price. Thus, due to consistent emphasis on quality and delivery, our Company has been receiving repeated orders from its dealer network.

iv. Marketing Setup

Veto holds a major part of market share of electrical accessories in India. The company has a strong and hardworking team of marketing professionals, dealers and distributors. Our Promoters have vast experience of marketing of wires and cables and electrical accessories & other allied products. They have been manufacturing and marketing these products for past over 35 years. We have a good reputation among our dealer network which consists of more than 2,000 in number. The sale price of the components to be manufactured is decided based on design complexities, material, process, quantity, period of supply, etc.

v. Export obligation

As on the date, we do not have any export obligations.

vi. Strength

l Established brand in North West India and central;

l Experienced management team;

l Organized and comprehensive product offering;

l Established reputation for quality products;

l Driving growth through innovation and marketing;

l Our relationship with customers;

l Our relationship with more than 2,000 dealers;

l Dedicated team of technical manpower;

vii. Weakness

l Player in regional market.

l Any avoidance of rules of Govt. caused under unavoidable circumstances may have an adverse impact on the project.

viii. Opportunity

l The location of the unit is the hub of industry of the multiproduct category. This will cause a competition and that will help the customer to differentiate between the average and the best product. The importers will get variety of the products, which will be a healthy situation for the Industry ultimately.

l The Company has many opportunities in view of the increasing demand for wires & cables and electrical accessories.

l Decrease in copper prices.

ix. Threats l Our contingent liabilities, not provided for, if crystallized, could adversely affect our financial condition.

We have not provided for certain contingent liabilities which if materialized could adversely affect our financial position. The details of the same are as under :

In Lacs

Particulars	As of March 31, 2016	As of March 31, 2015
Guarantee given by banks on behalf of the Company	94.97	121.72
Disputed Sales Tax Liability	6.60	-
Estimated amount of contracts remaining to be executed on capital account (Net of Advance)	307.14	163.84
Total	408.71	285.56

* If these liabilities materialize, it could have an adverse effect on our results of operations.

l The loss of or shutdown of operations at our production facilities may have a material adverse effect on our business, financial condition and results of operations.

The breakdown or failure of our equipments and/ or civil structure can disrupt our production schedules, resulting in performance being below expected levels. In addition, the development or operation of our facilities may be disrupted for reasons that are beyond our control, including explosions, fires, earthquakes and other natural disasters, breakdown, failure or sub-standard performance of equipment, improper installation or operation of equipment, accidents, operational problems, transportation interruptions, other environmental risks, and labour disputes. Our production facilities are also subject to mechanical failure and equipment shutdowns. Our machineries may be susceptible to malfunction. If such events occur, the ability of our facilities to meet production targets may be adversely affected which may affect our business, financial condition and results of operations. l Low cost end-to-end business model being adopted by existing or new competitors.

l Heightened competitive intensity with externally-funded players looking to drive aggressive strategies in the market.

Disclaimer Clause

Statements in Management Discussion and Analysis describing the Company''s objectives, projections, estimates, expectations or predictions may be forward looking statements within the meaning of applicable securities laws and regulations. Actual results could differ materially from those either expressed or implied. Important factors that could make a difference to the Company''s operation include among others, economic conditions affecting demand/supply and price conditions, variation in prices of raw materials, changes in Government regulations, tax regimes, economic developments and other incidental factors.

Acknowledgement

We thank our customers, vendors, investors and bankers for their intense support throughout the year. We place on record our appreciation of the contribution made by our employees at all levels.

We thank the Government of India, particularly the Ministry of Commerce, Ministry of Finance, Ministry of Corporate Affairs, the Custom and Excise Departments, Income Tax Department, the Reserve Bank of India, the State Governments and other government agencies for their support, and look forward to their continued support in the future.

Date : September 5^th 2016

Pl_{ace :} J_aip_ur for and on behalf of the Board of Directors

Sd/- Sd/-

Akshay Kumar Gurnani Narain Das Gurnani

Managing Director & CEO Additional Director & CFO

DIN : 06888193 DIN: 01970599

---

Mar 31, 2015

Dear Members,

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

1. Company Performance

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

Financial Results

(Rs. in Lacs)

Particulars Consolidated

2014-2015 2013-2014

Income from operation 9730.22 9447.72

Profit before Interest/ Depreciation/Tax 1571.92 1168.34

(PBDIT)

Less: Interest & Financial Charges 395.17 204.73

Less: Depreciation 201.37 120.13

Profit Before Tax (PBT) 975.38 843.48

Less: Provision for Taxation 261.01 234.66

-Current

-Deferred

Profit after Taxation (PAT) 714.37 608.82

Balance Carried Forward 714.37 608.82



Particulars Standalone

2014-2015 2013-2014

Income from operation 9730.22 9447.72

Profit before Interest/ Depreciation/Tax 1572.10 1168.53

(PBDIT)

Less: Interest & Financial Charges 395.17 204.73

Less: Depreciation 201.37 120.13

Profit Before Tax (PBT) 975.56 843.67

Less: Provision for Taxation 261.01 234.66

-Current -

-Deferred -

Profit after Taxation (PAT) 714.54 609.01

Balance Carried Forward 714.54 609.01



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

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

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

Dividend

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

Reserves

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

IPO proceeds and Deployment of funds

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

The detail of proceeds of IPO is as under:

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

A Proceeds of Issue 2500.50

B Internal Accruals 49.50

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

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

SI. Particulars Amount No (Rs. in Lacs)

1 Modernisation of existing facility at Haridwar 470.00

2 Working capital requirement 1580.00

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

4 General Corporate purposes 100.00

5 To meet the issue expenses 200.00

Total 2550.00

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

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

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

i) As disclosed in the offer document

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

1 Land Completed

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

3 Dies October 2012 June 2013

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

(ii) Actual Implementation AUGUST 2013 TO MARCH 2015

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

2. Status of utilization of issue proceeds

(i) As disclosed in the offer document -

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

(Rs. in Lacs)

Sr. Details Amount No

1 Modernisation of existing facility at Haridwar, Uttarakhand 470.00

2 Incremental long-term working capital requirement 1,580.00

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

4 General Corporate Purposes 100.00

5 To meet the Issue expenses 200.00

Total Project Cost 2,550.00

Means of Finance

Particulars Amount Amount (In lacs) (In lacs)

Proceeds of the Issue 2,500.50

Internal accruals 49.50

Total means of finance 2,550.00

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

Sr. Particulars Total Actual Cost of no. entire project

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

2 Incremental long-term working capital 1580.00 1580.00 requirement

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

4 General Corporate Purposes 100.00 100.00

5 To meet the Issue expenses 200.00 200.00

TOTAL 2500.50 2550.00

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

(Rs. in lacs)

Particulars Amount utilized till March 31, 2015

Proceeds from IPO 2500.50

Less :

Issue related expenses 200.00

Utilised towards objects of issue 2300.50

Pending utilization towards objects of issue NIL

(iii) Reasons for deviation, if any NIL

Change in the nature of business, if any

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

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

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

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

Management Discussion and Analysis

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

Particulars of Loan, Guarantee and Investments

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

Particulars of Contracts and Arrangement under section 188

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

Deposits

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

a) Accepted during the year : NIL

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

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

i. At the beginning of the year: NIL

ii. Maximum during the year: NIL

iii. At the end of the year: NIL

Investments

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

2. Business Operations/ State of Company's Affairs

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

Future Prospects

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

2. Explore the possibility of marketing in abroad.

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

Raw Material

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

(Qty. in kg)

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

Copper 565170 678204.00

PVC Resin 86122 103346.40

Aluminium 621887 746264.40

Infrastructure facilities

* Power

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

* Fuel

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

* Water

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

*Manpower

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

Category Nos.

Top management 6

Managerial & Supervisory staff 62

Office staff 56

Skilled workers 65

Unskilled workers 435

Total 624

* Effluent Treatment and Disposal

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

* Environmental Clearance

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

* Our Strategy

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

* Capacity and capacity utilization

Particulars Projected

FY 2014-15 FY 2015-16

Wires & Cables

Installed Capacity 20 Lacs Bundles 20.00 Lacs Bundles

Capacity Utilization (in %) 80% 80%

Production 16.00 Lac Bundles 16.00 Lac Bundles

Electrical Accessories

Installed Capacity 380 Lac pieces 600 Lac pieces

Capacity Utilization(in %) 47.36% 54.17%

Production 180 Lac pieces 325 Lac pieces



Particulars Actual

FY 2014-15

Wires & Cables

Installed Capacity 14.08 Bundles

Capacity Utilization (in %) 81.88%

Production 13.36 Lac Bundles

Electrical Accessories

Installed Capacity 380 Lac pieces

Capacity Utilization(in %) 71.16%

Production 270.41 Lac pieces

* Insurance

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

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

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

3. Accidental & Health insurance facility for field staff;

4. Gratuity policy;

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

Risks and Concerns:

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

2. Legal Risks: Fraud, Theft, etc

3. Uncertainties in financial markets

4. Failure in Projects

5. Credit Risks

6. Outstanding Debtors

7. Security and Storage of Data and Records

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

Internal Control System

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

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

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

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

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

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

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

Awards and Recognition

Details of Subsidiaries/ Joint Venture/ Associate Companies

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

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

Performance and Financial position of Subsidiary Company

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

3. Human Resource Management

Employee Relations

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

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

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

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

Managerial Remuneration

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

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

Remuneration paid to Directors

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

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

Mr. Dinesh Gurnani Whole-time 720000 696000 Director

Ms. Jyoti Gurnani Director - -



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

Mr. Akshay Kumar 100% Gurnani

Mr. Dinesh Gurnani 3.45%

Ms. Jyoti Gurnani



Remuneration paid to Independent Directors

(In Lacs)

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

Mr. Murlidhar Kaurani 0.00 0.075

Mr. Mohan Sukhani 0.00 0.15

Mr. Govind Ram Thawani 0.00 0.20

Remuneration paid to Key Managerial Personnel

(In Lacs)

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

Mr. Priavrat Sharma Group CFO 0.00 0.00

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

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

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

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

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

Particulars of Employees

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

4. Corporate Governance

Corporate Governance Report

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

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

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

Directors

A. Change in directors and KMP during the year

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

Sr. Name Of Director Designation Date of No. Appointment

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

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

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

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

5 Ms. Jyoti Gurnani Director 27/08/2014

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



Sr. Name Of Director Date of No. Cessation

1 Mr. Dinesh Gurnani NA

2 Mr. Murali dhar Kaurani NA

3 Mr. Mohan Sukhani NA

4 Mr. Govind Ram Thawani NA

5 Ms. Jyoti Gurnani NA

6 Mr. Akshay Kumar Gurnani NA

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

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

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

No. of meetings of the Board

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

Detail of Board Meetings held:

Sr. No. Date of Board Meeting

1 May 30, 2014

2 July 28, 2014

3 November 14, 2014

4 January 24, 2015

5 February 2,2015

6 February 10, 2015

7 March 30, 2015

Committees of Board

Name of Committee Composition of Committee

Audit Committee 1. Mr.Govind Ram Thawani Chairman

2. Mr. Mohan Sukhani

3. Mr. Dinesh Gurnani

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

2. Mr. Murlidhar Kaurani

3. Mr. Mohan Sukhani

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

2. Mr. Dinesh Gurnani

3. Mr. Mohan Sukhani

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

2. Mr. Mohan Sukhani

3. Mr. Dinesh Gurnani

Risk Management Policy 1. Mr. Dinesh Gurnani

2. Mr. Mohan Sukhani

3. Mr. Govind Ram Thawani

Internal Complaint Committee 1. Ms. Jyoti Gurnani, Officer

2. Mr. Priavrat Sharma, Member

3. Ms. Bharti Ajmera, Member

4. Mr. Anirudh Mathur, Member



Name of Committee Duties, Responsibilities and activities

Audit Committee Disclose under the heading Corporate Governance Report

Nomination and Remuneration Disclose under the heading Committee Corporate Governance Report

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

Corporate Social Disclose under the heading Responsibility Committee Corporate Governance Report

Risk Management Policy Disclose under the heading Corporate Governance Report

Internal Complaint Committee Presiding Discloses under the Director Report

Directors Responsibility Statement

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

Directors' Responsibility Statement, it is hereby confirmed that:

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

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

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

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

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

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

Corporate Governance Certificate

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

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

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

5. Auditors and Auditor's Report

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

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

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

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

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

Cost Auditors

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

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

Secretarial Audit Report

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

Reservation and Qualification on Auditor Report

Basis for Qualified Opinion

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

Qualified Opinion

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

Management Reply towards Qualification:

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

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

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

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

Extract of Annual Return

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

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

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

6. Depository System

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

7. Report under the Prevention of Sexual Harassment Act

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

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

i. Environment, Health and Safety

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

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

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

ii. Research & Development

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

iii. Detail of Foreign Exchange Earnings and Outgo.

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

9. Credit Rating

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

Acknowledgement

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

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

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

---

Mar 31, 2014

Dear Shareowners,

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

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

1. Financial Results [Rs. in Lacs]

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

Income from 9447.72 7413.99 9447.72 7413.99 operation

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

Less: Interest & 204.73 245.17 204.73 245.17 Financial Charges

Less: Depreciation 120.13 106.48 120.13 106.48

Profit Before Tax 843.48 761.83 843.67 761.72 CPBT)

Less: Provision for 234.66 174.09 234.66 174.09 Taxation

-Current - -

-Deferred - -

Profit after Taxation 608.82 587.74 609.01 587.63 (PAT)

Balance Carried 608.82 587.74 609.01 587.63 Forward

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

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

Standalone Financial Results for the year ending 2013and2014:-

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

2. Dividend

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

3. Business Operations

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

i. Raw Material

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

(Qty.inkg) Product Existing Proposed category

Copper 500617 600740.40

PVC Resin 493095 591714.00

Aluminium 62027 74432.40

ii. Infrastructure facilities - Power

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

- Fuel

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

- Water

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

- Manpower

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

Category Nos.

Top management 6

Managerial & Supervisory staff 60

Office staff 55

Skilled workers 60

Unskilled workers 340

Total 521

- Effluent Treatment and Disposal

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

- Environmental Clearance

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

- Our Strategy

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

- Capacity and capacity utilization

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

Wires & Cables

Installed Capacity 14.08 14.08Bun 14.08 Bundles dies Bundles

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

Production 6.00 Lac 6.00 Lac 5.51 Lac Bundles Bundles Bundles

Electrical Accessories

Installed Capacity 380 Lac 380 Lac 380 Lac pieces pieces pieces

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

Production 140 Lac 180 Lac 146.83 pieces pieces Lac pieces

- Insurance

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

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

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

3. Accidental & Health insurance facility for field staff;

4. Gratuity policy;

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

4. IPO proceeds and Deployment of funds

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

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

A Proceeds of Issue 2500.50

B Internal Accruals 49.50

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

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

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

1 Modernisation of existing 470.00 facility at Haridwar

2 Working capital requirement 1580.00

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

4 General Corporate purposes 100.00

5 To meet the issue expenses 200.00

Total 2550.00

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

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

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

(i) As disclosed in the offer document

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

1 Land Completed

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

3 Dies October 2012 June 2013

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

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

ARCHITECTURAL PLAN

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

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

(Rs. in Lacs) Sr. Details Amount No

1 Modernisation of existing facility at Haridwar, Uttarakhand 470.00

2 Incremental long-term working capital requirement 1,580.00

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

4 General Corporate Purposes 100 Q0

To meet the Issue expenses 200.00

Total Project Cost 2,550.00

Means of Finance

Particulars Amount Amount (In lacs) (In lacs)

Proceeds of the Issue 2,500.50

Internal accruals 49.50

Total means of finance 2,550.00

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

Sr. Particulars Total Actual Cost no. of entire project

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

2 Incremental long-term working 1580.00 1580.00 capital requirement

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

4 General Corporate Purposes 100.00 100.00

5 To meet the Issue expenses 200.00 200.00

TOTAL 2305.85 2550.00

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

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

Proceeds from IPO 2500.50

Less:_

Issue related expenses 200.00

Utilised towards objects of issue 2105.85

Pending utilization towards objects of issue* 194.65

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

(iii) Reasons for deviation, if any NIL

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

5. Depository System

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

6. Awards and Recognition

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

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

7. Change in directorship during the year

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

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

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

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

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

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

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

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

8. Auditors and Auditor''s Report

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

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

Our comments on financial statements

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

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

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

9. CostAudit

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

10. Subsidiary Company

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

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

11. Accident

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

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

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

12. Deposits

The Company has not accepted any deposits from the public.

13. Investments

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

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

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

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

i. Environment, Health and Safety

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

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

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

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

ii. Research & Development

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

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

iv. Employee Relations

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

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

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

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

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

16. Credit Rating

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

II. Corporate Governance Report

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

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

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

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

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

IV. Director''s Responsibility Statement

Pursuant to the requirements under Section

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

i. in the preparation of the annual accounts

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

ii. the Directors had selected such accounting

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

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

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

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

Annexure I

Subsidiary Company

1. Veto Electricals Private Limited

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

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

Registered Office

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

Capital Structure and Shareholding Pattern

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

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

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

For the year ended March 31,2 014.

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

Capital 10,00,000 10,00,000

Reserves O O

Total Assets 18013146 18012800

Total Liabilities 17013146 17012800

Investments O O

Turnover/Total Income 3 O

Profit/f Loss! before Tax O O

Provision for Tax O O

Profit/Loss after tax O O

Proposed Dividend O O

For and on behalf of the Board

Mohan Das Gurnani Dinesh Gurnani

Director Director

01831741 00218635

Date : 04.08.2014

Place: Mumbai.