To the Members
The Board of Directors have pleasure in presenting the 29th Annual Report on thebusiness and operations of your Company along with the audited financial statements forthe financial year ended March 31 2017.
| ||(Rs. in lakhs) |
| ||For the year ended 31st March 2017 ||For the Year ended 31st March 2016 |
|Revenue from operations (net of Excise Duty) ||6232.39 ||5819.25 |
|Other Income ||295.55 ||279.21 |
|Total Revenue ||6527.94 ||6098.46 |
|Profit before depreciation and Tax ||658.54 ||618.60 |
|Depreciation ||26.06 ||34.19 |
|Profit for the year before Tax ||632.48 ||584.41 |
|Provision for Tax ||244.95 ||62.71 |
|Profit for the year after Tax ||387.53 ||521.70 |
In the financial year 2016-17 the revenue from operations grew by 7% over that ofprevious year. Revenue from the Telecommunication business decreased by about 9% and therevenue from IT-Networking (Enterprise network) business grew by about 13% over that ofprevious year.
Your Directors recommend a dividend of Rs.3.00 per equity share of the face value ofRs.10/-each to be appropriated from the profits of the financial year ended March 312017 subject to the approval by the shareholders at the ensuing Annual General Meeting.
During the financial year ended March 31 2017 unclaimed dividend amount of Rs.80119/- pertaining to dividend declared for the financial year 2008-09 was transferred tothe Investor Education and Protection Fund.
TRANSFER TO RESERVES
During the year no amount has been transferred to the General Reserve.
STRATEGY AND OPERATIONS
India has been witnessing a steady economic growth over the past few years and isexpected to grow strongly with government reforms and thereby creating opportunitieswhere your company foresee growth in Enterprise network market as compared to Telecomsector which is grappling with emergence of new and competitive service models andwitnessing consolidation with fewer orders lower price realization and reducedprofitability. Pressure on profitability continues due to greater competition at themarket. The market is expected to improve driven by demand in Banking & Financesector Manufacturing Infrastructure projects by Government Defense sector healthcare& hospitality projects. Your Company do see growth in Fiber Business over copper duehigh bandwidth requirements with rapid adoption of advanced internet applications and yourCompany will be able to favorably participate in this market.
The Company continues to focus on consistent revenue growth with profitability. TheCompany focused on effective strategy execution this year which had good success inbringing large deals and we believe that the core products from Enterprise & Telecomsector together with new things are helping us to differentiate on value in the market.The Company continue to focus on client engagement and value creation. Apart fromoutsourcing a portion of manufacturing operations the Company continued to look at waysof cost reduction through operational efficiency and be cost competitive in the market toachieve the desired results.
During the year there were no changes in the Board of Directors.
DECLARATION BY INDEPENDENT DIRECTORS
The Company has received declarations from all the Independent Directors of thecompany confirming that they meet the criteria of independence as provided under Section149(6) of the Companies Act 2013.
Seven Board meetings were held during the financial year 2016-17 on May 25 2016 July05 2016 July 13 2016 August 05 2016 November 12 2016 January 27 2017 and March21 2017.The details of meetings held by various Committees of the Board are given in theCorporate Governance Report.
DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to the provisions of Section 134(3) (C) of the Companies Act 2013 theDirectors based on the information and representations received from the CompanyManagement confirm
a. In the preparation of Annual Accounts the applicable Accounting Standards have beenfollowed with no material departures;
b. The Directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company at the end of the financial year and ofthe profit of the Company for that period ;
c. The Directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities ;
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 thecompany and that such internal financial controls are adequate and have been operatingeffectively; and
f. The Directors had devised proper systems to ensure compliance with the provisions ofall 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 havingprofessional expertise in their individual capacity as independent professionals and whocan effectively contribute to the Company's business and policy decisions are consideredby the Nomination and Remuneration Committee for appointment of new Directors on theBoard. The Non-Executive Directors appointed on the Board are paid sitting fees forattending the Board and Board Committee Meetings. No other remuneration or commission ispaid to the Non-Executive Directors. The remuneration paid to the Managing Director isgoverned by the relevant provisions of the Companies Act 2013 rules of the Company andShareholders' approval.
AUDITORS AND AUDITORS' REPORT
At the 26th Annual General Meeting of the Company held on August 08 2014 M/s. DeloitteHaskins & Sells Statutory Auditors of the Company were reappointed as the Auditors ofthe Company from the conclusion of this Annual General Meeting until the conclusion of thefifth consecutive Annual General Meeting.
In terms of section 139 of the Companies Act 2013 and the Rules made thereunder thisappointment is subject to ratification by members at every Annual General Meeting. M/s.Deloitte
Haskins & Sells have confirmed their eligibility for re-appointment and offerthemselves for reappointment. The Board of Directors based on the recommendation of theAudit Committee proposes the appointment of M/s. Deloitte Haskins & Sells as theStatutory Auditors of the Company.
The Auditors' observation read with Notes to Financial Statements are self-explanatoryand do not call for any further explanation or comments under Section 134(f) of theCompanies Act 2013.
SECRETARIAL AUDITORS AND SECRETARIAL AUDIT REPORT
Pursuant to the provisions of Section 204 of the Companies 2013 and the Rules madethereunder M/s.V.Sreedharan and Associates Practicing Company Secretaries were appointedas the Secretarial Auditors to conduct a secretarial audit of the Company's Secretarialand related records for the financial year 2016-17. The Secretarial Auditors' Report forthe financial year ended March 31 2017 is annexed to this Report as Annexure 1. Noadverse 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 ofRs.500000/- towards various CSR Programs undertaken by the Company during the year. TheAnnual Report on CSR activities in accordance with the Companies (Corporate SocialResponsibility) Rules 2014 is annexed to this Report as Annexure 2.
Your Company has always practiced sound corporate governance and has complied withvarious provisions of corporate governance.
As required under Regulation 34 of the Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015 Management Discussion andAnalysis Report Corporate Governance Report and the Statutory regardingAuditors'complianceCertificate of conditions of Corporate Governance forms part of the AnnualReport.
WEBSITE OF THE COMPANY
The Company maintains a website www.adckcl.com where information related to the Companyare provided.
During the year the Company has not accepted any fixed deposits. Hence there is nooutstanding amount as on the Balance Sheet date
The equity shares of the Company are listed with Bombay Stock Exchange Limited. Thereare 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:
Continual usage of Natural ventilations and energy efficient CFL lamps in thefactory premises for overall electricity consumption.
Effective preventive maintenance helped enhanced energy efficiency of variousequipment.
During the financial year 2016-17 the Company decided to upgrade its ERP system to havebetter control on the operations & at the same time be ready for the GST roll-outplanned by Central Government and the upgradation is in progress. The Company alsointroduced new Copper & Fiber Patch panels in the market which helps customer inbetter rack space saving with better manageability features. Further the Company didintroduce upgraded Outdoor environment enclosures/Cable assemblies' products to supportthe Security & Surveillance market & continued its focus on Standard-Compliantproduct portfolio to increase its geographical reach.
C. Research and Development
Safety guards were provided to all the machines in the factory to preventaccidents.
For Pneumatic operated presses safety operation technique were built in toprevent accidents.
To prevent soldering fume in the open atmosphere a duct was made to remove the fumeoutside to protect the health of the employees.
FOREIGN EXCHANGE EARNINGS AND OUTFLOW
During the year your Company has earned Foreign Exchange of Rs.2665432/- and theForeign
Exchange outflow was Rs.4279272/-.
EXTRACT OF ANNUAL RETURN
As required under the provisions of section 92(3) and 134(3)(a) of the CompaniesAct.2013 read with Companies ( Management and Administration) Rules 2014 an extract ofthe annual return for the year ended March 31 2016 is annexed to this report as Annexure3.
MANAGERIAL REMUNERATION AND RELATED DISCLOSURES
The details of the remuneration paid to the Directors of the Company is mentioned inthe Corporate Governance Report. The disclosure pursuant to the provisions of Section197(12) of the Companies Act 2013 read with Rule 5(1) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 (as amended) is annexed to this reportas Annexure 4.
WHISTLE BLOWER MECHANISM
The Company has established a mechanism called "Vigil Mechanism Policy" foremployees directors and others who are associated with the Company to report tomanagement instances of unethical behavior actual or suspected fraud or violation of theCompany's code of conduct. The Policy provides adequate safeguards against victimizationof employees/directors who avail the mechanism. The Vigil Mechanism also cover the WhistleBlower mechanism aspect as stipulated under clause 49 of the Listing Agreement. TheCompany affirms that no person has been denied access to the Audit Committee in thisrespect. The policy has been communicated to all employees by displaying the same on theCompany'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 PROHIBITIONAND REDRESSAL) ACT 2013
The Company has implemented a policy on Prevention Prohibition and Redressal of SexualHarassment of Women at Workplace. The Company is committed to creating a safe and healthyworking environment. The Company believes that all individuals have the right to betreated with dignity and strives to create a workplace which is free of gender bias andSexual Harassment. The Company has a zero tolerance approach to any form of SexualHarassment. The policy has been displayed in the Company's website.
RELATED PARTY TRANSACTIONS
The Related Party Transaction Policy for determining the materiality of related partytransactions and also on the dealings with related parties has been displayed in theCompany's website.
All transactions with related parties during the year were in the ordinary course ofbusiness and at arm's length. There are no related party transactions that may havepotential conflict with the interest of the Company at large. The details of related partytransactions are disclosed in Note No.24 to financial statements forming part of theaccounts.
The Company has formed a Risk Management Committee and the constitution and terms ofreference of this Committee are set out in detail in the Corporate Governance Report. Thedetails of risks faced by the Company and its mitigation process was discussed by the RiskManagement Committee at its meeting held on January 27 2017 and the same was alsoreviewed 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 controlsto be followed by the Company which they believe are adequate keeping in view the sizeand nature of Company's business.
Adequate financial procedures are in place to ensure that all the assets aresafeguarded protected against loss and all transactions are authorized recorded andreported correctly. This ensures the quality and reliability of financial data financialstatements and financial reporting.
Your Company's internal financial controls are deployed through an internally evolvedframework that address material risks in your Company's operations and financial reportingobjectives through a combination of entity level controls and process controls (bothmanual and automated) information technology based controls period end financialreporting and closing controls and through internal audit. The Audit Committee of theBoard reviews the adequacy of internal financial controls on an ongoing basis to identifyopportunities for improvement in the existing systems to further strengthen the internalcontrol environment in your Company.
ANNUAL EVALUATION OF BOARD'S PERFORMANCE
The Company's Policy and process for evaluation lays down a structured questionnaire tobe used in the evaluation of the entire Board of the Company Board Sub-Committees andIndividual Directors including the Independent Directors. This Policy has been displayedin the Company's website www.adckcl.com.
Using the structured questionnaire the evaluations of the entire Board BoardCommittees and individual Board Members including the Chairman of the Board has beencarried out. The Directors have expressed their full satisfaction with the performance ofthe 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 thefinancial year 2016-17 attracting the provisions of Section 186 of the Companies Act2013.
MATERIAL CHANGES AND COMMITMENTS
There have not been any material changes and commitments affecting the financialposition of the Company between the financial year ended March 31 2017 and the date ofthe Directors Report.
Your Directors thank the customers channel partners distributors vendors and bankersfor the support and co-operation given by them during the year. Your Directors also wishto place on record their sincere appreciation for the continued co-operation and supportprovided by all employees during the year as well as for the advice received from thePromoters of the Company.
|For and on behalf of the Board of Directors |
|S.Devarajan ||J.N.Mylaraiah |
|Chairman ||Managing Director |
|Place: Bangalore || |
|Date: May 16 2017 || |