ADC India Communications Ltd
Directors Reports
To the Members,
The Board of Directors have pleasure in presenting the 30th Annual Report on the
business and operations of your Company, along with the audited financial statements for
the financial year ended March 31, 2018.
Financial Results
|
|
(Rs. in lakhs) |
|
Year ended 31st March 2018 |
Year ended 31st March 2017 |
| Revenue from operations |
6544.41 |
6176.73 |
| Other Income |
303.94 |
295.81 |
| Total Revenue |
6848.35 |
6472.54 |
| Profit before depreciation and Tax |
615.80 |
659.58 |
| Depreciation |
29.23 |
26.06 |
| Profit for the year before Tax |
586.57 |
633.52 |
| Tax Expense |
232.86 |
245.25 |
| Profit for the year after Tax |
353.71 |
388.27 |
FINANCIAL PERFORMANCE
In the financial year 2017-18 the overall revenue from operations grew by about 6% over
that of previous year. Revenue from the Telecommunication business decreased by about 4%
and the revenue from IT-Networking (Enterprise network) business grew by about 9% over
that of previous year.
DIVIDEND
Your Directors recommend a dividend of Rs.4.00 per equity share, of the face value of
Rs.10/-each,to be appropriated from the profits of the financial year ended March 31,
2018, subject to the approval by the shareholders at the ensuing Annual General Meeting.
STRATEGY AND OPERATIONS
The economic environment continued to improve where Enterprise network market growth
continues to improve compared to Telecom sector which grapple with fewer orders. Pressure
on profitability continues due to major issue with greater competition for every single
opportunity leading to pressure on margins in the market place. Your Company foresee
continued growth in Enterprise network in the next few years and another challenging year
for the Telecom sector, which continue to be volatile.
The market overall is expected to improve in the medium term driven by domestic demand
and Government projects, Infrastructure projects, Defense sector, E-commerce. Your Company
do see growth in Fiber Business over copper due to large infrastructure corridors,
national fiber smart city initiatives. Your Company should be able to favorably
participate in the areas of its strength within each Opportunity as the market activities
picks up.
Apart from outsourcing a major portion of manufacturing operations, the Company
continued to look at other ways of cost reduction and be cost competitive in the market.
As you are aware the Company continue to operate from smaller location which fits into
overall operational requirement at this moment and continue to rent the company's own
facility, which has yielded better results as expected and expect the same in the years to
follow.
DIRECTORS
Mr.N.Srinivasan, Independent Director passed away on March 04, 2018.Your Board of
Directors and the Employees of ADC India express their profound grief and place on record
their sincere appreciation for his guidance and valuable contributions to the Company
during his tenure as a Director of the Company.
We are glad to invite Mr. Ravi Bosco Rebello who joined the Board on August 04, 2017 as
an Additional Director. Brief resume of Mr. Ravi Bosco Rebello is provided in the Notice
of the Annual General Meeting.
DECLARATION BY INDEPENDENT DIRECTORS
The Company has received declarations from all the Independent Directors of the
company,confirming that they meet the criteria of independence as provided under section
149(6) of the Companies Act, 2013.
BOARD MEETINGS
Six Board meetings were held during the financial year 2017-18 on May 16, 2017, July
21, 2017, August 04, 2017, November 15, 2017, February 02, 2018 and March 21, 2018. The
details of meetings held by various Committees of the Board are given in the Corporate
Governance Report.
DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to the provisions of Section 134(3) (C) of the Companies Act, 2013, the
Directors based on the information and representations received from the Company
Management confirm
a. In the preparation of Annual Accounts, the applicable Accounting Standards have been
followed with no 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 at the end of the financial year and of
the profit of the Company for that period ;
c. 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 ;
d. The Directors had prepared the Annual Accounts on a ‘going concern' basis;
e. The Directors had laid down internal financial controls to be followed by the
company and that such internal financial controls are adequate and have been operating
effectively; and
f. The Directors had devised proper systems to ensure compliance with the provisions of
all applicable laws and that such systems are adequate and operating effectively.
DIRECTORS' APPOINTMENT AND REMUNERATION
Considering the requirements of the skill-sets on the Board, persons having
professional expertise in their individual capacity as independent professionals and who
can effectively contribute to the Company's business and policy decisions are considered
by the Nomination and Remuneration Committee for appointment of new Directors on the
Board. The Non-Executive Directors appointed on the Board are paid sitting fees for
attending the Board and Board Committee Meetings. No other remuneration or commission is
paid to the Non-Executive Directors. The remuneration paid to the Managing Director is
governed by the relevant provisions of the Companies Act, 2013, rules of the Company and
Shareholders' approval.
AUDITORS AND AUDITORS' REPORT
At the 26th Annual General Meeting of the Company held on August 08, 2014 M/s. Deloitte
Haskins & Sells, Statutory Auditors of the Company were appointed as the Auditors of
the Company from the conclusion of this Annual General Meeting until the conclusion of the
fifth consecutive Annual General Meeting and in terms of section 139 of the Companies Act,
2013 and the Rules made thereunder this appointment was subject to ratification by members
at every annual general meeting.The Companies (Amendment) Act,2017 has amended Section 139
of the Companies Act, 2013 where in the provision regarding ratification of appointment of
the Auditors at every Annual General Meeting has been omitted. Consequently, the matter of
ratification of appointment of M/s. Deloitte Haskins & Sells need not be placed before
the forthcoming Annual General Meeting.
The Auditors' report read with Notes to Financial Statements are self-explanatory and
do not call for any further explanation or comments under Section 134(f) of the Companies
Act, 2013.
SECRETARIAL AUDITORS AND SECRETARIAL AUDIT REPORT
Pursuant to the provisions of section 204 of the Companies, 2013 and the Rules made
thereunder, M/s.V.Sreedharan and Associates, Practicing Company Secretaries were appointed
as the Secretarial Auditors to conduct a secretarial audit of the Company's Secretarial
and related records for the financial year 2017-18. The Secretarial Auditors' Report for
the financial is annexed to this Report as Annexure 1.No adverse comments have been made
in the said report.
CORPORATE SOCIAL RESPONSIBILITY
Pursuant to the provisions of Section 135 of the Companies Act, 2013 and the Companies
(Corporate Social Responsibility Policy) Rules, 2014, the Company has spent an amount of
Rs.20 lakhs, which includes the unspent amount of Rs.6.90 lakhs during the financial year
2016-17 towards various CSR Programs undertaken by the Company during the year. The Annual
Report on CSR activities is in accordance with the Companies (Corporate Social
Responsibility) Rules, 2014 is annexed to this Report as Annexure 2.
CORPORATE GOVERNANCE
Your Company has always practiced sound corporate governance and has complied with
various provisions of corporate governance.
As required under Regulation 34 of the Securities and Exchange Board of India (Listing
Obligations and Disclosure Requirements) Regulations, 2015, Management Discussionand
Analysis Report, Corporate Governance Report and the Statutory Auditors' Certificate
regarding compliance of conditions of Corporate Governance forms part of the Annual
Report.
UNCLAIMED DIVIDEND AND UNCLAIMED SHARES
During the financial year 2017-18 unclaimed dividend amount of Rs. 0.80 Lakhs
pertaining to dividend declared for the financial year 2008-09 was transferred to the
Investor Education and Protection Fund. During this year in terms of the Investor
Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules,
2016 as amended, the Company transferred the corresponding shares, where the dividends for
the last seven consecutive years have not been claimed by the concerned shareholders to
IEPF on December 01, 2017.
Unclaimed dividend amounting to Rs. 0.77 Lakhs pertaining to dividend declared for the
financial year 2009-10 was transferred to the Investor Education and Protection Fund on
April 12, 2018.In terms of the Investor Education and Protection Fund Authority
(Accounting, yearendedMarch31,2018 Audit, Transferand Refund) Rules, 2016 as amended, the
Company has also transferred the corresponding shares, where the dividends for the last
seven consecutive years have not been claimed by the concerned shareholders to IEPF on May
10, 2018.
TRANSFER TO RESERVES
During the year no amount has been transferred to the General Reserve.
WEBSITE OF THE COMPANY
The Company maintains a website www.adckcl. com where information related to the
Company are displayed.
FIXED DEPOSITS
During the year, the Company has not accepted any fixed deposits. Hence, there is no
outstanding amount as on the Balance Sheet date.
LISTING
The equity shares of the Company are listed with Bombay Stock Exchange Limited. There
are no arrears on account of payment of listing fees to them.
CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION
A. Conservation of Energy
The following energy conservation measures were implemented during the year:
• Replaced Air Conditioner Reciprocating Compressor to Scroll compressor to reduce
power consumption.
• Replaced Push Cock water taps to Hall Round taps to reduce water consumption.
B. Technology
During the year under review the Company successfully completed the migration to cloud
based ERP System which also enabled compliance with GST Rules and Regulations.
C. Research and Development
• Focus on continuous improvement activities continued during the year.
• Provided battery operated stacker to the subcontractor to reduce operator
fatigue and accidents.
• Fixed safety brackets for a few material storage racks to prevent accidents.
• 50 Ton Injection Molding Machine operating front panel was repaired locally
using the old parts of 80 Ton Injection Molding Machine resulting in a saving of around
Rs. 6 lakhs.
FOREIGN EXCHANGE EARNINGS AND OUTFLOW
During the year your Company has earned Foreign Exchange of Rs.47.72 Lakhs and the
Foreign Exchange outflow was Rs.17.37 Lakhs.
EXTRACT OF ANNUAL RETURN
As required under the provisions of section 92(3) and 134(3)(a) of the Companies
Act.2013 read with Companies (Management and Administration) Rules, 2014 an extract of the
annual return for the year ended March 31, 2018 isannexed to this report as Annexure 3
MANAGERIAL REMUNERATION AND RELATED DISCLOSURES
The details of the remuneration paid to the Directors of the Company is mentioned in
the Corporate Governance Report. The disclosure pursuant to the provisions of section
197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and
Remuneration of Managerial Personnel) Rules,2014 (as amended) is annexed to this report as
Annexure 4.
WHISTLE BLOWER MECHANISM
The Company has established a mechanism called "Vigil Mechanism Policy" for
employees, directors and others who are associated with the Company to report to
management instances of unethical behavior, actual or suspected fraud or violation of the
Company's code of conduct. The Policy provides adequate safeguards against victimization
of employees/directors who avail the mechanism. The Vigil Mechanism also cover the Whistle
Blower mechanism aspect as stipulated under clause 49 of the Listing Agreement. The
Company affirms that no person has been denied access to the Audit Committee in this
respect.The policy has been communicated to all employees by displaying the same on the
Company's website.
SUBSIDIARY/ASSOCIATES/JOINT VENTURE COMPANIES
The Company does not have any Subsidiary/ Associate/Joint Venture Company.
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION
AND REDRESSAL) ACT, 2013
The Company has implemented a policy on Prevention, Prohibition and Redressal of Sexual
Harassment of Women at Workplace. The Company is committed to creating a safe and healthy
working environment. The Company believes that all individuals have the right to be
treated with dignity and strives to create a workplace which is free of gender bias and
Sexual Harassment. The Company has a zero tolerance approach to any form of Sexual
Harassment. The policy has been displayed in the Company's website.
RELATED PARTY TRANSACTIONS
The Related Party Transaction Policy for determining the materiality of related party
transactions and on the dealings with related parties has been displayed in the Company's
website.
All transactions with related parties during the year were in the ordinary course of
business and at arm's length. There are no related party transactions that may have
potential conflict with the interest of the Company at large.The details of related party
transactions are disclosed in Note No.32 to financial statements forming part of the
accounts.
RISK MANAGEMENT
The Company has formed a Risk Management Committee and the constitution and terms of
reference of this Committee are set out in detail in the Corporate Governance Report. The
details of risks faced by the Company and its mitigation process was discussed by the Risk
Management Committee at its meeting held on February 02,2018 and the same was also
reviewed by the Board of Directors at its meeting a held on the same day.
INTERNAL FINANCIAL CONTROLS AND THEIR ADEQUACY
Your Directors to the best of their ability have laid down internal financial controls
to be followed by the Company, which they believe are adequate keeping in view the size
and nature of Company's business. Adequate financial procedures are in place to ensure
that all the assets are safeguarded, protected against loss and all transactions are
authorized, recorded and reported correctly. This ensures the quality and reliability of
financial data, financial statements and financial reporting.
Your Company's internal financial controls are deployed through an internally evolved
framework that address material risks in your Company's operations and financial reporting
objectives, through a combination of entity level controls and process controls (both
manual and automated), information technology based controls, period end financial
reporting and closing controls and through internal audit. The Audit Committee of the
Board reviews the adequacy of internal financial controls on an ongoing basis to identify
opportunities for improvement in the existing systems to further strengthen the internal
control environment in your Company.
ANNUAL EVALUATION OF BOARD'S PERFORMANCE
The Company's Policy and process for evaluation lays down a structured questionnaire to
be used in the evaluation of the entire Board of the Company, Board Sub-Committees and
Individual Directors including the Independent Directors.This Policy has been displayed in
the Company's websitewww. adckcl.com.
Using the structured questionnaire the evaluations of the entire Board, Board
Committees and individual Board Members including the Chairman of the Board has been
carried out.The Directors have expressed their full satisfaction with the performance of
the Board, Board Committees and the members of the Board.
LOANS, GUARANTEES OR INVESTMENTS
The Company has not given any loan or guarantee nor has made any investment during the
financial year 2017-18 attracting the provisions of section 186 of the Companies Act,2013.
MATERIAL CHANGES AND COMMITMENTS
There have not been any material changes and commitments affecting the financial
position of the Company between the financial year ended March 31, 2018 and the date of
the Directors Report.
ACKNOWLEDGEMENTS
Your Directors thank the customers, channel partners, distributors, vendors and bankers
for the support and co-operation given by them during the year. Your Directors also take
this opportunity to place on record their appreciation to all employees for their hard
work and support during the year as well as for the advice and support received from the
Promoters of the Company.
| For and on behalf of the Board of Directors |
|
| S.Devarajan |
J.N.Mylaraiah |
| Chairman |
Managing Director |
| Place: Bangalore |
|
| Date: May 23, 2018 |
|
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