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Punjab Communications
BSE: 500346|NSE: PUNJCOMMU|ISIN: INE609A01010|SECTOR: Telecommunications - Equipment
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Chairman's Speech (Punjab Communications) Year : Mar '95
 I have immense pleasure in welcoming you to this 14th Annual 
 General Meeting of Punjab Communications Limited.  Many of 
 you, consequent to our Public Issue have joined this 
 esteemed Organisation for the first time thereby making it a 
 widely held Company.  I extend a special welcome to you all 
 and I sincerely thank you for the confidence reposed in the 
 Management.  The Directors' Report & the Audited Accounts 
 for the year ending March 31, 1995, have already been 
 circulated to you, and with your permission, I take them as 
 read.  Before I take up the agenda for this meeting, I would 
 like to share with you some of my thoughts about your 
 Company, the Industry in particular and the General Economic 
 scenario.
 
 NATION SURGING AHEAD
 
 The opening of the Indian Economy and the consequent 
 liberalised economic policies of the Govt. have resulted in 
 rapid revamping of the Indian Economy.  In an endeavour to 
 globalise the operations, the Indian Economy has not only 
 opened up to the outside world but has also provided the 
 right infrastructure for the healthy competition, to give 
 the best at the most competitive price to the Indian 
 consumers.  No doubt this intense competition has made a 
 little dent in the indigenous industry, but this in the 
 longer run would enable the Indian industry to become more 
 cost conscious and competitive.  In our endeavour to face 
 the global challenges, we are adapting successfully to this 
 changing environment and in this pursuit we are seeking 
 financially attractive technical know-how from the leaders 
 in the telecommunication field by entering into 
 collaboration and joint venture.  This process of 
 globalisation would induce all of us here, to work as a 
 team, respect the universal values concerning people, 
 competitiveness, uncompromising quality, research and 
 technological advancement.
 
 FINANCIAL HIGHLIGHTS
 
 The major customers for company's products are Department of 
 Telecommunications, Railways, Defence, State Police 
 Organisations etc.  Your Company saw a lot of competition 
 due to a number of multinational entrants in this sector.  
 Despite several odds, the company reported very encouraging 
 financial results for the year 1994-95.  The gross income of 
 your company touched its all time high of Rs. 12,793 lacs 
 (approx.) thereby registering a growth of 13.80% over the 
 previous year's gross income.  The Profits After Tax of Rs. 
 2016.46 lacs show an incremental trend with a rise of 29.31% 
 over the previous year.
 
 This performance would have been still better had there been 
 no reduction in the selling price of your company's 
 products.
 
 In view of the encouraging performance by your Company, the 
 BOD of your Company have recommended a dividend of 40% for 
 the year 1994-95.
 
 PUBLIC ISSUE
 
 In the year 1994 your Company came out with its maiden 
 public issue of 42,50,000 equity shares of Rs. 10/- each at 
 a premium of Rs. 240/- per share aggregating Rs. 106.25 
 Crores which was a big hit among the members of the public, 
 oversubscribed by around 35 times.  Please accept my sincere 
 gratitude for reposing so much faith in the management of 
 the Company.  All of us here would try our best to live up 
 to your expectations and maintain the blue-chip status of 
 your Company.
 
 I admit that the share prices have gone down after the 
 Public Issue, but I assure you that this is due to the 
 subdued market condition prevailing in our country and has 
 nothing to do with the working of the Company.  In fact, we 
 as a team are trying our level best to improve the working 
 of the Company for which we have already initiated some 
 drastic steps so that we remain a Company with strong 
 fundamentals.
 
 EXPORTS
 
 With a view to earning precious foreign exchange, your 
 Company has embarked upon an aggressive exports strategy.  
 Hitherto, exports have been an incremental activity of the 
 Marketing Deptt. but keeping in view the strength of your 
 company's products and the liberal attitude of the Govt. 
 exports have been initiated by participating in the 
 international telecom exhibitions/trade fairs in the target 
 countries.  The approach is supplemented by advertising 
 extensively in the overseas trade journals.  So far, your 
 company has participated in trade fairs held at Indonesia, 
 Thailand, China and now in Uzbekistan generating a promising 
 response.  For instance your company is favourably placed in 
 the tender for Transmux worth Rs. 85.00 lacs (approx.) as a 
 result of Indonesian exhibition.  We are targeting the 
 Chinese and Uzbek markets for our RAX (Rural Automatic 
 Exchanges) as the Rural Network is not well developed in 
 these countries, & also TMUX.  We have also executed an 
 order in Nepal and we expect some more orders to flow-in, in 
 the near future.  We are also placed quite favourably in the 
 tender for PCM MUX Equipment in Bangladesh, which we are 
 likely to get.  It is our endeavour to participate in the 
 big tenders in other countries in the region.
 
 Although this is just a beginning, it is a promising step in 
 the desired direction which would definitely reap good 
 results in the years to come.  Your Company has fixed a 
 target to export Rs. 10.00 Crores (approx.) worth of its 
 products in line with its export strategy.
 
 RESEARCH & DEVELOPMENT
 
 Research & Development plays a key role in the growth of the 
 Company through innovations, competitive technology and 
 Introduction of new products.
 
 Keeping the above in view our R&D Cell is working on 
 State-of-the-Art products including Digital Loop Carriers, 
 Optimux Products, Versatile Mux HDSL & Digital Pair Gain 
 Products.
 
 The Radio Division of PCL has completed indigenous 
 development of 2 GHz HMCs.  It has also designed a low cost 
 UHF System using state of the art surface mounted 
 technologies and field programmable gate arrays.  Department 
 of Telecommunications has desired that VSATs installed at 
 remote locations shall operate from 48V battery supply due 
 to unreliable AC mains.  The power supplies for the VSAT 
 Systems have been developed and integrated.  Development 
 work on futuristic projects like 13 GHz 34 Mbit, 18 GHz 8 
 Mbit etc. has also been planned.
 
 NEW PRODUCTS
 
 The Company is in the process of expanding its activities by 
 adding new product lines to its existing range.  The 
 products being introduced are :
 
 Optical Fibre Line Terminating Equipment (OLTE), Very Small 
 Aperture Terminals (VSAT), 140 MBIT Digital Radio Equipment, 
 Digital Rural Communication System (DRC), Versatile Ultra 
 High Frequency Digital Radio Equipment (VUHF), Higher Order 
 Mux (HOM), Frame Relay Technology, Video Synthesizer, 
 Multiband Jig Synthesizer, Cordless Telephone Systems, 
 Satellite Modems, FRP Antennas, Power Plants, Digital Power 
 Gain Systems, DLC Systems, Synchronous Digital Hierarchy 
 Systems etc.
 
 Your Company is diversifying into products having ready-made 
 demand.  the existing infrastructural facilities and the 
 inherent strengths of your company give them an edge for any 
 competition that may emerge as a result of the opening of 
 telecom industry to the private sector.
 
 NEW ALLIANCES/OPERATIONAL AREAS
 
 In view of the dynamism in the Telecom Industry and keeping 
 into consideration the burgeoning Indian Telecommunications 
 market, your Company has entered into two prestigious 
 alliances with foreign companies.
 
 A Memorandum of Understanding has been signed with Reliance 
 Comm Tec Corporation of United States by your Company for 
 the formation of a Joint Venture to produce a broad range of 
 telecom equipments including rectifiers, converters, DC 
 Power Systems, Main distribution frames, protection 
 connection distribution terminals and other outside plant 
 products and digital transmission equipment and test 
 systems. This project would aim to procure a major share of 
 business from DOT (Govt. of India) and the Private Basic 
 services operators to transport 45 million telephone lines 
 from exchanges to the subscribers premises.  With this 
 tie-up your Company will have a technological edge over 
 other competitors as the prevalent technology for these 
 products is not as advanced and tends to affect the call 
 connection rate adversely.
 
 Your Company has also entered into a collaboration agreement 
 with ECI Telecom Limited, Israel for the manufacture of its 
 SYNCOM range of SYNCHRONOUS DIGITAL HIERARCHY (SDH) products 
 in India.  The agreement envisages transfer of technology at 
 the component level.  SDH is the upcoming technology used 
 with optical fibre and other wide band transmission media 
 for providing a large number of speech channels using 
 equipment that conforms to global standards for the first 
 time.  Furthermore, it promises the opportunity to reap 
 enormous benefits in terms of quality, efficiency, 
 flexibility, reliability and manageability.  It would not be 
 out of place to mention that ECI Telecom is one of the 
 largest telecom manufacturers in Israel and a pioneer in Add 
 Drop Multiplexers in the SDH range, with a large number of 
 installations in other countries.  This prestigious tender, 
 floated by DOT for SDH technology has been recently won by 
 our Company by beating 28 parties, including 15 
 Multinational Companies boasting of big names like Alcatel, 
 Ericsson, Marconi, Nokia etc.
 
 I must share with you some more developments that have taken 
 place at our end.  We have won yet another prestigious order 
 for over Rs. 20 Crores from DOT for manufacturing CDOT MAX-L 
 Exchanges.  Your Company has also won an International 
 Tender for the information Systems coverage of the entire 
 WILL's Cricket World Cup to be held next year in three 
 countries namely India, Pakistan and Sri Lanka.  This will 
 launch your company at the global level as this event is 
 expected to be watched by billions of viewers all over the 
 world.  Taking advantage of the situation, we are 
 negotiating with some large computer companies in USA to do 
 their manufacturing in India.  We have also signed an 
 agreement, in principle, with a foreign Company for the 
 manufacture of another promising product which would enable 
 one telephone line to do the work of two telephones without 
 actually adding a new line.
 
 Apart from diversification of existing products as above, 
 your company is in the process of diversifying the markets 
 also.  This is being done with a view to tapping alternative 
 markets to build-up a new and vast horizon of customers for 
 our products.  We are approaching in a big way, the major 
 customers for our range of products viz. Railways, MTNL, 
 State Electricity Boards, ONGC, VSNL etc.
 
 All in all such diversification in the products as well as 
 the markets would take some time to fructify completely but 
 by next year it is expected to bear many fruits.
 
 QUALITY
 
 PCL is committed to Integrating Total quality in all its 
 activities.  PCL is, apart from ITI, the first company to 
 have been allowed Approved Inspection Status (AIS) from the 
 DOT for four of its products under which PCL's QA Staff is 
 authorised to clear the equipment on behalf of the DOT, QA 
 staff with only sample check being carried out by DOT.  In 
 1994, your Company has also acquired ISO 9002 certification 
 and it is the first State Public Sector Undertaking to do so.
 
 It is our endeavour to achieve the highest attainable 
 standards of product quality through motivated workforce who 
 understand our values.
 
 Apart from improving the quality we are laying enormous 
 emphasis on reducing the costs.  To begin with we have 
 already been able to cut down the procurement cost of 
 indigenous as well as imported material by 10% - 15%, not 
 counting the reduction in import duties.
 
 ACKNOWLEDGEMENT
 
 I would like to express my sincere thanks and gratitude for 
 the continuous support received by the Company from the 
 Government of Punjab, Punjab State Electronics Development 
 and Production Corporation Limited, IFCI, PSIDC, PFC, SBI, 
 Syndicate Bank and SBOP.  I would also like to place on 
 record the Company's acknowledgement for the role played by 
 the Govt. of India, DOE in widening its product mix and 
 giving necessary support and assistance to increase its 
 infrastructure.  I am grateful to our esteemed customers who 
 have not only relied on our products but have placed repeat 
 orders to us as a proof of their satisfaction with goods and 
 services already supplied to them.
 
 I would also place on record my sincere gratitude to the 
 shareholders of the company, who have reposed their 
 confidence and trust in the Management of the Company.
 
 I now move the Directors' Report and the Audited Balance 
 Sheet and Profit & Loss Account for the year 1994-95 to be 
 approved and adopted.
 
 
Source : Dion Global Solutions Limited
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