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Vindhya Telelink

BSE: 517015|NSE: VINDHYATEL|ISIN: INE707A01012|SECTOR: Cables - Telephone
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Directors Report Year End : Mar '18    Mar 17

Directors’ Report

TO THE SHAREHOLDERS

The Directors have the pleasure of presenting their Thirty Fifth Annual Report, together with the Audited Financial Statements of the Company for the year ended March 31, 2018.

SUMMARY OF FINANCIAL RESULTS & STATE OF COMPANY’S AFFAIRS

Description

Amount (Rs, in lakhs)

2017-18

2016-17

Revenue from Operations

135138.46

102654.84

Other Income

1073.50

1835.41

Earnings before Finance Costs, Depreciation and Tax

18811.43

14699.58

Finance Costs

4719.93

4074.28

Profit before Depreciation and Tax

14091.50

10625.30

Depreciation and Amortisation

1490.80

1266.41

Profit before Tax

12600.70

9358.89

Tax Expenses / (Credit)

4267.63

2795.02

Net Profit for the year

8333.07

6563.87

Your Company has adopted Indian Accounting Standards (Ind AS) with effect from April 1, 2017 (transition date being April 1, 2016). Accordingly, the financial statements for the year ended March 31, 2018 have been prepared in accordance with Ind AS in terms of the provisions of Section 133 of the Companies Act, 2013 read with the Companies (Indian Accounting Standards) Rules, 2015, as amended from time to time. Previous year figures have been restated as per Ind AS to make them comparable.

GENERAL & CORPORATE MATTERS

Your Company continues to operate in two business segments i.e. Cables and Engineering Procurement and Construction (EPC). The detailed operational working of your Company for the year is provided in the Management Discussion and Analysis forming a part of this Report.

During the year under review, your Company achieved Gross Revenue from operations of Rs, 135138.46 lakhs as compared to Rs, 102654.84 lakhs in the previous year, registering a growth of about 31.64%. The revenue from exports including project exports increased substantially to Rs, 3617.37 lakhs as compared to Rs, 1841.45 lakhs during the previous year. During the year under review, the EPC business segment clocked increase in Gross Revenue by 26.61 % mainly due to robust order inflow and strong project execution capabilities through improved monitoring systems and cost control initiatives. The Cables business segment has also registered a significant growth of 44.99% in Gross Revenue in comparison with the previous financial year due to robust orders inflow, capacity augmentation, product diversification and improved operational efficiencies. The leadership at shop floor has enabled the Company to achieve manufacturing excellence at all levels of the organization and deliver the improved financial performance during the year under review. The Profit before Depreciation and Tax for the year stood at Rs, 14091.50 lakhs as compared to Rs, 10625.30 lakhs in the previous year.

The first stage of expansion-cum-diversification of the Company’s Copper Cable facility has been successfully implemented and became operational during the year under review, which enabled the Company to launch certain variants of cables and conductors for Indian Railways, Solar Energy and Power distribution segments. The second and final stage of the said expansion-cum-diversification project for manufacturing of Electron Beam Irradiated Cross-linked Cables including installation of Electron Beam Accelerator of appropriate rated capacity is progressing as per schedule and barring unforeseen circumstances, is likely to be operational by end of the 2nd quarter of the current fiscal year. Once fully operational, this would enable your Company to expand its products portfolio by diversification into the high end market of specialized electrical cables and electron beam irradiated cross-linked cables. Your Company is also in the process of implementing substantial expansion of its Optical Fibre Cables facility (OFC Unit) at Rewa to be executed in phases. The first phase of the said substantial expansion project for doubling the existing production capacity of Optical Fibre Cables is likely to be operational by November/December, 2018 with an estimated incremental capital outlay of '' 5171.00 lakhs, to be funded by a mix of internal accruals and debt. Although demand for optical fibre cables presently is robust, current level of investments in the industry could result in overcapacity and create fierce competition in the market. Your Company is, therefore, putting focus on automation and operational efficiency with production capacity additions in phased manner in order to insulate itself from the contingencies of intense competition during downturn in business cycle.

At a global level, telecom network building is growing very rapidly across all regions driving higher than expected optical fibre cable market growth resulting in optical fibre supply constraints. As per available reports, the global optical fibre cable consumption increased 14.90% from 429 Million FKM to 493 Million FKM during the calendar year 2017, out of which China’s consumption stood at 286 Million FKM (approx.58% of the total global consumption) and South Asia/Indian Subcontinent accounted for approx.23 Million FKM. South Asia sub-region anchored by India, which accounts for 90% of the region’s optical fibre cable consumption, is likely to witness a strong growth in demand for optical fibre cables as the government seeks to unlock the transformative power of digital communications networks, interalia, through focus on fibre connectivity with a plan to standardize policy and costs for obtaining the RoW for laying optical fibre cables and development of fibre infrastructure needed for broadband connectivity across the country and all layers of government. India is extremely low in fibre connectivity and the telecom operators need to vastly expand and upgrade the digital infrastructure of optical fibre and backhaul facilities across the country in order to catchup with the peers in the global arena. The proliferation of 4G and Voice over Long Term Evolution services are paving the way for more fibre based deployment across the country. India is also in the process of aligning itself with global road map of 5G deployment for which expansion and improvement of optical fibre infrastructure will be pre-requisite to meet its criteria. Further, with the increasing competition in mobility, the telecom operators in India are also envisaging deployment of various version of FTTx networks to derive competitive advantages and improved quality of services, which will also need substantial quantum of fibre backhaul. The draft National Digital Communication Policy, 2018, recently unveiled by the Government of India, therefore, rightly lays down a fibre-first initiative to take fibre to the home, to enterprise and to key development institutions and the establishment of a National Digital Grid and creation of a National Fibre Authority which augers well for the Company.

The Company also foresees robust demand for its Copper Cables product portfolio including Railway Signaling and Quad Cables with the planned increased infrastructure spending in public and private sectors and also due to focus of the Government on strengthening, capacity augmentation, modernization and electrification of Railways/Metro Railways/Dedicated Freight Corridors network across the country.

The EPC business segment of the Company has established itself as a known and reputed total solution provider from project concept to commissioning in certain infrastructure segments and is continually exploring new business opportunities in the evolving technology landscape in ICT, the Government’s Digital India Initiatives and Smart Cities Mission, Power sub-transmission and distribution, Sewerage systems and projects, etc. The EPC business segment having successfully executed some of the very prestigious projects including Network For Spectrum (NFS) and IP-1 in hilly and difficult terrains in India is in the process of securing new and prestigious optical fibre infrastructure projects from Bharat Sanchar Nigam Ltd. and Bharat Broadband Networks Ltd. Given the renewed thrust of the governments, both Central and State Governments, on creating world class infrastructure in the country, your Company as a leading turn-key solution provider, is well poised to grab these upcoming business opportunities in the fields of Telecom, Power sub-transmission and distribution, Sewerage, Water/Irrigation and related Civil Infrastructure, as an end-to-end solutions provider with huge expertise gained over a period.

DIVIDEND AND RESERVES

After considering the Company’s profitability, free cash flow and overall financial performance, the Board of Directors of the Company is pleased to recommend a Dividend of Rs, 10/- (previous year Rs, 7/-) per equity share of face value Rs, 10/- each (i.e. 100%) for the financial year ended on March 31, 2018. The distribution of Dividend on equity shares, if approved by the Members at the ensuing Annual General Meeting, will result in payout of Rs, 1185.09 lakhs excluding Tax on Dividend and Surcharge/Education Cess thereon, as applicable.

During the year under review, your Company transferred a sum of Rs,835 lakhs (previous year Rs, 418 lakhs) to the Debenture Redemption Reserve.

SHARE CAPITAL

The paid-up Equity Share Capital of the Company as at March 31, 2018 stood at Rs, 1184.21 lakhs. During the year under review, the Company has neither issued shares with differential rights as to dividend, voting or otherwise nor has granted stock options or sweat equity under any scheme. Further, none of the Directors of the Company holds investments convertible into equity shares of the Company as on March 31, 2018.

DEPOSITS/FINANCE

Your Company has not accepted any public deposits during the year within the meaning of Section(s) 73 to 76 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014 and as such no amount on account of principal or interest on public deposits was outstanding as on the date of the Balance Sheet.

Your Company continued to optimise bank borrowings by focusing on cash flows and working capital management. Your Company achieved measurable reduction in its finance costs during the year under review by issuance of Commercial Papers at a very competitive coupon rate(s), significant reduction in charges for non-fund based credit facilities and replacement of comparatively high interest bearing Intercorporate Loans with low coupon rate long term Non-Convertible Debentures, etc.

During the year under review, your Company issued and allotted second tranche of Unsecured, Unlisted, Rated, Redeemable, Nonconvertible Debentures (NCDs) aggregating to Rs, 5000.00 lakhs, at a coupon rate of 8.40% p.a., on a private placement basis to a scheduled bank. The said NCDs are redeemable at par in three annual installments over a period of five years, commencing from end of third year of the date of issuance of the NCDs. The said NCDs carries credit rating CARE AA-; Stable (Double A Minus; Outlook Stable) assigned by CARE Ratings Ltd.

CORPORATE GOVERNANCE

Pursuant to Regulation 34(3) read with Para C of Schedule V of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Management Discussion and Analysis, Report on Corporate Governance and a Certificate by the Managing Director & CEO confirming compliance by all the Board Members and Senior Management Personnel with Company’s Code of Conduct and Auditors’ Certificate regarding compliance of conditions of Corporate Governance are made a part of the Annual Report.

CORPORATE SOCIAL RESPONSIBILITY INITIATIVES

As a part of its initiative under Corporate Social Responsibility (CSR), your Company has undertaken CSR activities in the areas of (i) Animal welfare; (ii) Education promoting employment enhancing vocation skills especially among children and livelihood enhancement projects;

(iii) Promoting Girl Child education; (iv) Ensuring Environmental Sustainability, Ecological balance, Conservation of natural resources and maintaining quality of Soil, Air and Water; and (v) Rural Development Projects in the local area where the Company operates and also in other parts of India. These activities are largely in accordance with Schedule VII of the Companies Act, 2013 read with Companies (Corporate Social Responsibility Policy) Rules, 2014 and the Company’s CSR Policy.

The Annual Report on CSR activities as required under the Companies (Corporate Social Responsibility Policy) Rules, 2014 is given in Annexure-I, which is attached hereto and forms a part of the Directors’ Report. The Corporate Social Responsibility Policy of the Company is available on the website of the Company i.e. www.vtlrewa.com.

DIRECTORS’ RESPONSIBILITY STATEMENT

To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statements in terms of Section 134(3)(c) of the Companies Act, 2013:

(a) that in the preparation of the annual financial statements for the year ended March 31,2018, the applicable accounting standards read with requirements set out under Schedule III to the Companies Act, 2013, have been followed and there are no material departures from the same;

(b) that such accounting policies as mentioned in Notes to the Financial Statements have been selected and applied consistently and judgment and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2018 and the profit of the Company for the year ended on that date. The Company adopted Indian Accounting Standards (Ind AS) effective from April 1, 2017 with transition date being April 1, 2016 and accordingly, the transition was carried out and applied in the accounting policies in accordance with the applicable Ind AS as stated in the Notes to Financial Statements. The impact of transition has been recorded in opening reserves as at April 1, 2016 and the periods presented have been restated accordingly;

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

(d) that the annual financial statements have been prepared on a going concern basis;

(e) that proper internal financial controls were in place and that the financial controls were adequate and were operating effectively; and

(f) that system to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.

RISK MANAGEMENT AND ADEQUACY OF INTERNAL FINANCIAL CONTROLS

Your Company’s system of financial and compliance controls with reference to the financial statements and risk management is embedded in the business process by which the Company pursues its objectives. Additionally, the Audit Committee and the Board of Directors assess and monitor regularly the framework for identification, evaluation and prioritization of risks, mechanism to mitigate risks, process that methodically track governance objectives, risk ownership/accountability, compliance with policies and decisions that are set through the governance process, risks to those objectives and effectiveness of risk mitigation and controls besides inherent risks associated with the products/goods dealt with by the Company as well as execution of turnkey projects of EPC business segment. Your Company’s approach to address business risks and compliance functions is comprehensive across both the business segments and includes periodic review of such risks and a framework for mitigating and reporting mechanism of such risks. In view of the Board of Directors, there are no material risks, which may threaten the existence of the Company.

The Company has laid down the policies and procedures for internal financial controls for ensuring the orderly and efficient conduct of its business, in order to achieve the strategic, operational and other objectives over a long period and that its exposure to risks are within acceptable limits. In addition, the policies and procedures have been designed with an intent to ensure safeguarding of Company’s assets, the prevention and detection of frauds and errors, the accuracy in completeness of the accounting records and the timely preparation of reliable financial information.

The management is committed to ensure effective internal financial controls environment, which provides assurance on the efficiency of its business operations coupled with adherence to its established policies, safety/security of its assets besides orderly and legitimate conduct of Company’s business in the circumstances, which may reasonably be foreseen. The Company has defined organization structure, authority levels, delegated powers, internal procedures, rules and guidelines for conducting business transactions. The Company’s system and process relating to internal controls and procedures for financial reporting have been designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the Companies Act, 2013, Companies (Indian Accounting Standards) Rules, 2015 and other relevant provisions of the Act and rules made there under and all other applicable regulatory/statutory guidelines, etc. for disclosures with reference to financial statements.

Your Company’s internal control systems are supplemented by an extensive program of internal audit by independent firms of Chartered Accountants. Internal audits are conducted at regular intervals and a summary of the observations and recommendations of such audits are placed before the Audit Committee. The Internal Auditors, the Audit Committee as well as the Board of Directors conduct an evaluation of the adequacy and effectiveness of the system of internal financial controls system on an ongoing basis.

The Board has also implemented systems to ensure compliance of all applicable laws to the Company which were effective and operative. At quarterly intervals the Company Secretary & Compliance Officer places before the Board a certificate along with a detailed statement certifying compliance of various laws and regulations as applicable to the business and operations of the Company after obtaining confirmation from all functional heads responsible for compliance of such applicable laws and regulations. The Company Secretary is responsible for compliance of corporate laws including Companies Act, 2013, SEBI Act and rules/guidelines and listing regulations including any statutory amendment(s), modification(s) or enactment(s) thereto applicable to the Company.

INDUSTRIAL RELATIONS AND SAFETY

Industrial relations remained cordial throughout the year. Your Directors recognize and appreciate the sincere and hard work, loyalty, dedicated efforts and contribution of all the employees in the growth and performance of the Company during the year. Despite severe competition, the enthusiasm and unstinting efforts of the employees have enabled your Company to remain at the forefront of the industry.

Your Company continues to accord a very high priority to both industrial safety and environmental protection and these are ongoing process at the Company’s plant and facilities to maintain high awareness levels. The Company has also stressed the need to adopt the highest safety standards on projects undertaken by the Engineering, Procurement and Construction (EPC) business segment with the emphasis on ensuring that safety on all projects under execution. Your Company is conscious of the importance of environmentally clean and safe operations so as to ensure safety of all concerned and compliance of applicable environmental regulations and to this end working continuously towards reduction in waste for disposal. The Company as a policy re-evaluates safety standards and practices from time to time in order to raise the bar of safety standards for its people as well as users and customers.

RECOGNITION

Yours Company’s manufacturing facilities continue to remain certified by independent and reputed external agency as being compliant as well as aligned with the external standards for Quality Management System ISO 9001:2015 and TL 9000 R5.5/R5.0H, Environmental Management System ISO 14001:2015 and Occupational Health and Safety Management System OHSAS 18001:2007. During the year, the audits for these Certifications established continuous improvement in performance against these standards.

During the year under review, your Company successfully obtained certification under ISO 27001:2013 for Information Security Management System.

DIRECTORS

In accordance with the provisions of Section 152 of the Companies Act, 2013 and the Company’s Articles of Association, Shri D.R. Bansal (DIN:00050612), Director, shall retire by rotation at the ensuing Annual General Meeting and being eligible, has offered himself for reappointment as a Director of the Company. The Board recommends his re-appointment for the consideration of the members of the Company at the ensuing Annual General Meeting.

Pursuant to provisions contained in Article 94 of the Articles of Association of the Company and Sections 149 and 161 of the Companies Act, 2013, Shri Dilip Ganesh Karnik (DIN: 06419513) was appointed as an Additional Director of the Company by the Board of Directors at its meeting held on November 14, 2017 and he holds the office as such up to the date of this ensuing Annual General Meeting. Shri Dilip Ganesh Karnik is not disqualified from being appointed as a Director in terms of Section 164 of the Companies Act, 2013 and the Company has received a notice in writing under Section 160 of the Companies Act, 2013 from a member proposing the candidature of Shri Dilip Ganesh Karnik for the office of Director of the Company. The Nomination and Remuneration Committee at its Meeting held on May 23, 2018 has recommended the appointment of Shri Dilip Ganesh Karnik as Director, liable to retire by rotation at this ensuing Annual General Meeting.

The brief resume and other details of Director(s) seeking re-appointment/appointment as required under Regulation 36(3) of the Listing Regulations and Clause 1.2.5 of the Secretarial Standard on General Meetings (SS-2) are given in the Notice of the ensuing Annual General Meeting, which is being sent to the shareholders along with Annual Report.

KEY MANAGERIAL PERSONNEL

Shri Y.S. Lodha, Managing Director & CEO, Shri Saurabh Chhajer, Chief Financial Officer and Shri Satyendu Pattnaik, Company Secretary are the Key Managerial Personnel of the Company. Shri Satyendu Pattnaik was appointed as Company Secretary of the Company with effect from August 10, 2017 in place of Shri Raj Kumar Agrawal, who resigned from the services of the Company on August 9, 2017.

DECLARATION BY INDEPENDENT DIRECTORS

All Independent Directors of your Company viz. Shri J.Veeraraghavan, Shri S.K. Misra, Shri R.C.Tapuriah, Shri Shiv Dayal Kapoor and Smt. Kiran Aggarwal have individually and severally given a declaration pursuant to Section 149(7) of the Companies Act, 2013, affirming compliance to the criteria of Independence as laid down under Section 149(6) of the Companies Act, 2013. Based on the declaration(s) of Independent Directors, the Board of Directors recorded its opinion that all Independent Directors are independent of the Management and have fulfilled the conditions as specified under the governing provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements), Regulations, 2015.

MEETINGS OF BOARD AND COMPOSITION OF COMMITTEES

During the year under review, the Board met six times viz. on May 15, 2017, August 09, 2017, September 15, 2017, November 14, 2017, February 06, 2018 and March 09, 2018.

As required under Section 177(8) read with Section 134(3) of the Companies Act, 2013, and the rules framed there under, the composition and meetings of the Audit Committee were in line with the provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, details of which along with composition, number of meetings of all other Board Committees held during the year under review and attendance at the meetings are provided in the Report on Corporate Governance, forming a part of the Annual Report. During the year under review, all the recommendations of the Audit Committee were accepted by the Board of Directors.

PERFORMANCE EVALUATION OF BOARD, COMMITTEES & DIRECTORS

Pursuant to the Provisions of the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and the Guidance Note on Board evaluation issued by SEBI, the Board of Directors of the Company carried out the formal annual evaluation of its own performance and that of its Committees and individual Directors, interalia, to assess the skill set and contribution that are desired, recognizing that competencies and experiences evolves over time. The evaluation process also covered various aspects of the Board functioning such as composition of the Board and its Committees, experience and competencies, performance of specific duties and obligations, governance issues, etc. The process was conducted by allowing the Board to engage in candid discussions with each Director with the underlying objective of taking best possible decisions in the interest of the Company and its stakeholders. The Directors were individually evaluated on well defined parameters which, interalia, comprised of level of engagement and their contribution to strategic planning and other criteria based on performance and personal attributes of the Directors. During the process of evaluation, the Board of Directors also considered the criteria for evaluation of performance of Independent Directors and the Board of Directors formulated by the Nomination and Remuneration Committee. The Board of Directors also reviewed and deliberated the review of performance of the Chairman (taking into account the views of non-executive directors and the Managing Director), the Non-independent Directors and the Board as a whole carried out by the Independent Directors. In conclusion, the Board of Directors was satisfied with the performance and functioning of the Board, its Committees and individual members. A statement indicating the manner, in which formal annual evaluation has been made by the Board of Directors, is given in the Report on Corporate Governance which forms a part of the Annual Report.

SELECTION AND APPOINTMENT OF DIRECTORS AND THEIR REMUNERATION

The Board of Directors in consonance with the recommendation of Nomination and Remuneration Committee (NRC) has adopted a terms of reference which, interalia, deals with the criteria for identification of members of the Board of Directors and selection/appointment of the Key Managerial Personnel/Senior Management Personnel of the Company. The NRC recommends appointment of Director/appointment or re-appointment of Managing Director based on their qualifications, expertise, positive attributes and independence in accordance with prescribed provisions of the Companies Act, 2013 and rules framed there under and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The NRC, in addition to ensuring diversity of race and gender, also considers the impact the appointee would have on Board’s balance of professional experience, background, view points, skills and areas of expertise.

The Board of Directors in consonance with the recommendation of Nomination and Remuneration Committee has also adopted the Remuneration Policy for the members of the Board and Executive Management. The guiding principles of the Remuneration Policy are stated in the Report on Corporate Governance, which forms a part of the Annual Report.

VIGIL MECHANISM / WHISTLE BLOWER POLICY

In terms of the provisions of Section 177(9) of the Companies Act, 2013, the Company has implemented a Vigil Mechanism which includes implementation of the Whistle Blower Policy to deal with instances of fraud and mis-management, if any, and conducting business with integrity, including in accordance with all applicable laws and regulations. No employee has been denied access to the Vigilance Officer as well as Chairman of the Audit Committee. The details of the Vigil Mechanism and Whistle-Blower Policy are explained in the Corporate Governance Report and also posted on the website of the Company.

AUDITORS

In terms of the provisions of Section 139 of the Companies Act, 2013 read with the Companies (Audit and Auditors) Rules, 2014 as amended vide the Companies (Amendment) Act, 2017 and the Companies (Audit and Auditors) Amendment Rules, 2018 respectively, Messrs V. Sankar Aiyar & Co., Chartered Accountants (Registration No. 109208W), the Auditors of the Company, hold office for a consecutive period of five years until the conclusion of Thirty Seventh (37th) Annual General Meeting of the Company to be held for the financial year 2019-20 and their appointment is not required to be ratified each year at Annual General Meeting of the Company. The Auditors have confirmed to the Company that they continue to remain eligible to hold office as the Auditors and not disqualified for being so appointed under the Companies Act, 2013, the Chartered Accountants Act, 1949 and the rules and regulations made there under.

The Board of Directors has re-appointed Messrs D. Sabyasachi & Co., Cost Accountants (Registration No. 000369), as Cost Auditors for conducting the audit of the cost records maintained by the Company in respect of specified products of the Company covered under the Companies (Cost Records and Audit) Rules, 2014 and fixed their remuneration plus applicable taxes thereon and reimbursement of out of pocket expenses based on the recommendation of the Audit Committee. The remuneration and applicable taxes thereon and reimbursement of out of pocket expenses to be paid to the Cost Auditors is subject to ratification by the members in the ensuing Annual General Meeting of the Company.

AUDITORS’ REPORT

The Auditors’ Report on the financial statements of the Company forms a part of the Annual Report. There is no qualification, reservation, adverse remark, disclaimer or modified opinion in the Auditors’ Report, which calls for any further comments or explanations. Further, during the year under review, the Auditors have not reported any matter under Section 143(12) of the Companies Act, 2013, therefore, no detail is required to be disclosed in pursuance to Section 134(3)(ca) of the Companies Act, 2013.

SECRETARIAL AUDITOR

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, Messrs R.K. Mishra & Associates, Company Secretaries (PCS Registration no.14474) were appointed to undertake the Secretarial Audit of the Company for the year ended March 31, 2018. The Report of the Secretarial Auditor is given in Annexure-II, which is attached hereto and forms a part of the Directors’ Report.

No qualification or observation or other remarks have been made by Messrs R.K. Mishra & Associates in the Secretarial Audit Report, which calls for any comments or explanations.

COMPLIANCE WITH SECRETARIAL STANDARDS

The Company has proper system in place to ensure compliance with the provisions of applicable Secretarial Standards. During the year under review, your Company has complied with applicable provisions of Secretarial Standard on Meetings of the Board of Directors (SS-1) and Secretarial Standard on General Meetings (SS-2) issued by the Institute of Company Secretaries of India.

RELATED PARTY TRANSACTIONS

All related party transactions that were entered into by the Company during the financial year under review were generally on arms’ length basis and in the ordinary course of business. The disclosure of related party transactions as required under Section 134(3)(h) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 in prescribed Form AOC-2 is given in Annexure III, which is attached hereto and forms a part of the Directors’ Report. There are no material significant related party transactions entered into by the Company with its Promoters, Directors, Key Managerial Personnel or other designated persons, which may have a potential conflict with the interest of the Company at large.

All related party transactions are placed before the meeting(s) of Audit Committee for its approval. Prior omnibus approval of the Audit Committee is obtained on an annual basis, for a financial year, for the transactions which are of a foreseen and repetitive in nature. The statement giving details of all related party transactions entered into pursuant to the omnibus approval together with relevant documents/ information are placed before the Audit Committee for review and updating on quarterly basis. The Company’s Policy on materiality of Related Party Transactions and dealing with Related Party Transactions, as approved by the Board of Directors, is uploaded on the Company’s website and can be accessed at weblink: http://www.vtlrewa.com/pdf/RPTPolicy%20_VTL.pdf.

SUBSIDIARIES, ASSOCIATE AND JOINT VENTURE(S)

Your Company has three wholly owned subsidiaries namely August Agents Limited, Insilco Agents Limited and Laneseda Agents Limited. None of the subsidiary companies is a material non-listed Indian Subsidiary company as defined under Regulation 24(1) of the SEBI (Listing Obligations and Disclosure Requirements), Regulations, 2015. During the year under review there was no change in the number of subsidiaries or in nature of business of subsidiaries. The subsidiaries have achieved satisfactory financial performance during the year under review.

Birla Visabeira Private Limited, an existing joint venture company engaged primarily in EPC and Operation & Maintenance business in the areas of telecommunications and infrastructure. The joint venture’s financial performance was in consonance with planned business strategy.

Universal Cables Ltd. (UCL), Birla Corporation Ltd. (BCL) and Punjab Produce Holdings Ltd. (PPHL) are Associate companies within the meaning of Section 2(6) of the Companies Act, 2013 read with definition of the term ‘Associate’ as per Indian Accounting Standard (Ind AS)-28, UCL and BCL have achieved sustained growth in business with improved financial performances during the year under review and the financial performance of PPHL was satisfactory.

A Statement containing the salient features of the financial statements of subsidiaries, associate companies and a joint venture as prescribed under the first proviso to sub-section (3) of section 129 of the Companies Act, 2013 read with rule 5 of The Companies (Accounts) Rules, 2014 is attached as per the prescribed format and forms a part of the Annual Report.

A report on the performance of financial position of each of three wholly owned subsidiaries, three associate companies and a joint venture company, as per the provisions of the Companies Act, 2013 is provided as part of the consolidated financial statements and hence not repeated herein for the sake of brevity.

CONSOLIDATED FINANCIAL STATEMENTS

The consolidated financial statements of the Company for the Financial Year ended March 31,2018 have been prepared in accordance with Indian Accounting Standards (Ind AS) as prescribed under the Companies Act, 2013 (the act”), Companies (Indian Accounting Standards) Rules, 2015 and other relevant provisions of the Act and rules made there under [including the statutory amendment(s) thereof if any].

In accordance with the applicable provisions of the Act and the rules and regulations made there under, read with Indian Accounting Standard (Ind AS)-110 Consolidated Financial Statements” and Indian Accounting Standard (Ind AS)-28 Accounting for Investments in Associates and Joint Ventures”, the audited Consolidated Financial Statements of the Company as of and for the year ended March 31, 2018, forms a part of the Annual Report.

PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS UNDER SECTION 186 OF THE COMPANIES ACT, 2013

The particulars of Loans, Guarantees and Investments in pursuance to Section 186 of the Companies Act, 2013 have been disclosed in the financial statements read together with Notes annexed to and forming an integral part of the financial statements.

DISCLOSURE OF RATIO OF REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL, ETC.

As required under Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Statement of Disclosure of Remuneration and such other details as prescribed therein are given in Annexure-IV, which is attached hereto and forms a part of the Directors’ Report.

EXTRACT OF ANNUAL RETURN

An Extract of Annual Return as provided under Section 92(3) of the Companies Act, 2013 is given in Annexure-V, which is attached hereto and forms a part of the Directors’ Report.

Particulars of Employees

The information required pursuant to Section 197 of the Companies Act, 2013, read with Rule 5(2) of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of an employee of the Company are given in Annexure-VI, which is attached hereto and forms a part of the Directors’ Report.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNING AND OUTGO

As required under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of The Companies (Accounts) Rules, 2014, the information on Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo are given in Annexure-VII, which is attached hereto and forms a part of the Directors’ Report.

GENERAL

Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions or events on these items during the year under review:

(a) The Managing Director of the Company does not receive any remuneration or commission from any of the subsidiaries of the Company.

(b) No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status of the Company and its operations in future.

(c) The Company has zero tolerance towards sexual harassment at workplace and has adopted a Policy on prevention, prohibition and redressal of sexual harassment at workplace in line with the requirements of The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, and Rules made there under. During the year under review, there were no cases filed or reported pursuant to the provisions of the said Act.

(d) There are no material changes or commitments affecting the financial position of the Company, which have occurred between the end of the financial year of the Company to which the financial statements relate and the date of this Report.

(e) No frauds were reported by Auditors in terms of Section 143(2) of the Companies Act, 2013 and rules, if any, made there under.

ACKNOWLEDGEMENT

The Board desires to place on record its grateful appreciations for the excellent assistance and co-operation received from the State Government and continued support extended to the Company by the bankers, investors, vendors and esteemed customers and other business associates/institutions. Your Directors also wish to place on record their sincere thanks and infinite appreciations to all the employees of the Company for their unstinted commitment and continued contribution in the performance of the Company.

Yours faithfully,

Harsh V.Lodha

Chairman

(DIN: 00394094)

J. Veeraraghavan

(DIN: 00078998)

S.K. Misra

(DIN: 00009411)

R.C. Tapuriah

(DIN: 00395997)

D.R. Bansal

(DIN: 00050612)

Directors

Pracheta Majumdar

(DIN: 00179118)

Shiv Dayal Kapoor

(DIN: 00043634)

Kiran Aggarwal

(DIN: 06991807)

Dilip Ganesh Karnik

(DIN: 06419513) t

Y.S. Lodha

Managing Director

(DIN: 00052861)

New Delhi, May 23, 2018

Source : Dion Global Solutions Limited
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