To the Members
The Board of Directors have pleasure in presenting the 28th Annual Report on thebusiness and operations of your Company along with the audited financial statements forthe financial year ended March 312016.
(Rs. in lakhs)
| ||For the year ended 31st March 2016 ||For the Year ended 31st March 2015 |
|Gross Revenue (including Excise Duty) ||6310.85 ||6456.08 |
|Profit/(Loss) before depreciation and Tax ||618.60 ||770.77 |
|Less: Depreciation ||34.19 ||54.99 |
|Net Profit/(Loss) for the year before Tax ||584.41 ||715.78 |
|Provision for Tax ||62.71 ||218.06 |
|Profit/(Loss) after Tax ||521.70 ||497.72 |
|Add: Profit brought forward from previous year ||2424.22 ||3594.94 |
|Profit available for Appropriation ||2945.92 ||4092.66 |
|Appropriations || || |
|Interim Dividend on Equity Shares || |
|Proposed Final Dividend on Equity Shares ||115.00 ||46.00 |
|Tax on Dividends ||23.41 ||288.44 |
|Profit retained in Profit & Loss Account ||2807.51 ||2424.22 |
The gross revenue including other income during the year was more or less the same asthat of previous year. Revenue from the Telecommunication business decreased by about 19%and the revenue from IT- Networking (Enterprise network) business grew by about 10% ascompared to last year.
Your Directors recommend a dividend of Rs.2.50 per equity share of the face value ofRs.10/-each to be appropriated from the profits of the financial year ended March312016 subject to the approval by the shareholders at the ensuing Annual GeneralMeeting.
During the financial year ended March 31 2016 unclaimed dividend amount of Rs.132948/- pertaining to dividend declared for the year 2008 was transferred to theInvestor Education and Protection Fund.
TRANSFER TO RESERVES
During the year no amount has been transferred to the General Reserve. An amount ofRs.2807.51 lakhs is proposed to be retained in the Statement of Profit and Loss onStandalone basis.
STRATEGY AND OPERATIONS
The economic environment continued to improve where Enterprise network market growthcontinues to improve compared to Telecom sector which grapple with fewer orders lowerprice realization and reduced profitability. Pressure on profitability continues due togreater competition at the market. Your Company foresee growth in both Enterprise andtelecom industry to grow in the next few years. The market overall is expected to improvein the medium term driven by demand in Infrastructure projects Defense sectorE-commerce Hospitality IT/ITES & Government projects. Your Company do see growth inFiber Business over copper due to large infrastructure corridors national fiber opticnetwork digital India & smart city initiatives. Your Company should be able tofavorably participate once the market activities picks up.
With the acquisition of the Broadband Network Solutions Business Unit of TEConnectivity Limited by CommScope your company has now become part of CommScope.Consequently your Company continued to focus on successful integration with the newcompany and growing revenues with profitability. Apart from outsourcing a major portion ofmanufacturing operations the Company continued to look at other ways of cost reductionand be cost competitive in the market. As you are aware the Company continues to operatefrom smaller location which fits into overall operational requirement and continue to rentthe companys own facility which has yielded better results as expected and expectthe same in the years to follow.
Mr. Joydeep Nag and Mr.Arun Kakatkar resigned as Directors of the Company with effectfrom August 29 2015. Your Directors place on record their appreciation for the guidanceand contribution provided by Mr. Joydeep Nag and Mr.Arun Kakatkar during their tenure withthe Company.
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.
Nine Board meetings were held during the year 2015-16 on May 11 2015 June 12 2015July 17 2015 August 14 2015 August 28 2015 November 03 2015 January 22 2016March 08 2016 and March 28 2016. The details of meetings held by various Committees ofthe 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 theDirectors based on the information and representations received from the CompanyManagement confirm that:
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
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 Companys business and policy decisions areconsidered by the Nomination and Remuneration Committee for appointment of new Directorson the Board. 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 Act2013 and the Rules made thereunder this appointment is subject to ratification by membersat every annual general meeting. M/s. Deloitte Haskins & Sells have confirmed theireligibility for re-appointment and offer themselves for reappointment. The Board ofDirectors based on the recommendation of the Audit Committee proposes the re-appointmentof M/s. Deloitte Haskins & Sells as the Statutory Auditors of the Company.
The Auditors observation read with Notes to Financial Statements areself-explanatory and do not call for any further explanation or comments under Section134(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 madethereunder M/s.V.Sreedharan and Associates Practicing
Company Secretaries were appointed as the Secretarial Auditors to conduct a secretarialaudit of the Companys Secretarial and related records for the financial year2015-16. The Secretarial Auditors Report for the financial year ended March 312016is annexed to this Report as Annexure 1. No adverse comments have been made in the saidreport.
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.750000/- 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 the report on ManagementDiscussion and Analysis Corporate Governance Report and the Statutory AuditorsCertificate regarding compliance of conditions of Corporate Governance forms part of theAnnual Report.
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:
Optimum usage of Natural ventilations and CFL lamps in the factory premises.
Continuation of good maintenance practices.
Rain water harvesting at the factory premises and use of water collected forcleaning activities. This has resulted in reduction in water consumption by around 10%.
Change of Air Compressor from 18KW to 3.5KW resulting in reduced powerconsumption.
Your Company did introduce new products such as Fiber & Copper patch Lock systemwhich helps customer to look at additional level of physical security in criticalconnectivity requirements & also continued its work on supporting high density fiberrequirements for co-locations with better manageability features. Your Company didintroduce Outdoor environment enclosures / Cable assemblies products to support theSecurity & Surveillance market & continued its focus on Standard-Compliant productportfolio to increase its geographical reach.
C. Research and Development
Installation of Chequer plates at material movement locations.
Environmental Occupation Health and Safety (EOHS) awareness training forsub-contractor employees.
FOREIGN EXCHANGE EARNINGS AND OUTFLOW
During the year your Company has earned Foreign Exchange of Rs.16422099/- and theForeign Exchange outflow was Rs.3825462/-.
EXTRACT OF ANNUAL RETURN
As required under the provisions of section 92(3) and 134(3)(a) of the Companies Act2013 read with Companies ( Management and Administration) Rules 2014 an extract of theannual return for the year ended March 31 2016 is annexed to this report as Annexure 3.
PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES
Disclosures pursuant to the provisions of section 197(12) of the Companies Act 2013read with Rule 5(1) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 are set out in Annexure 4 and forms part of the BoardsReport.
Disclosures pursuant to the provisions of section 197(12) of the Companies Act 2013read with Rule 5(2) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 are set out in Annexure 5 and forms part of the BoardsReport.
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 theCompanys code of conduct. The Policy provides adequate safeguards againstvictimization of employees/directors who avail the mechanism. The Vigil Mechanism alsocover the Whistle Blower mechanism aspect as stipulated under clause 49 of the ListingAgreement The Company affirms that no person has been denied access to the Audit Committeein this respect. The policy has been communicated to all employees by displaying the sameon the Companys 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 Companys 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 theCompanys website.
All transactions with related parties during the year were in the ordinary course ofbusiness and at arms
length. There are no related party transactions that may have potential conflict withthe interest of the Company at large. The details of related party transactions aredisclosed in Note No.24 to financial statements forming part of the accounts.
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 222016 and the same was also reviewedby 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 Companys business. Adequate financial procedures are in place toensure that all the assets are safeguarded protected against loss and all transactionsare authorized recorded and reported correctly. This ensures the quality and reliabilityof financial data financial statements and financial reporting.
Your Companys internal financial controls are deployed through an internallyevolved framework that address material risks in your Companys operations andfinancial reporting objectives through a combination of entity level controls and processcontrols (both manual and automated) information technology based controls period endfinancial reporting and closing controls and through internal audit.The Audit Committee ofthe Board reviews the adequacy of internal financial controls on an ongoing basis toidentify opportunities for improvement in the existing systems to further strengthen theinternal control environment in your Company.
ANNUAL EVALUATION OF BOARDS PERFORMANCE
The Companys Policy and process for evaluation lays down a structuredquestionnaire (a set of positive assertions) to be used in the evaluation of the entireBoard of the Company Board Sub-Committees and Individual Directors including theIndependent Directors. This Policy has been displayed in the Companys websitewww.adckcl.com.
Using the parameters mentioned in the policy and process all the evaluations has beencarried out during the year. The Board Members had submitted their response on a scale of0 to 3 for evaluating the entire Board Board Committees and of their peer Board Membersincluding the Chairman of the Board. The Directors expressed their overall satisfactionwith the evaluation process.
LOANS GUARANTEES OR INVESTMENTS
The Company has not given any loan or guarantee nor has made any investment during thefinancial year 2015-16 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 312015 and the date of theDirectors 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 committed services by all employeesduring the year as well as for the advice received from the Promoters of the Company.
|For and on behalf of the Board of Directors |
|S.Devarajan ||J.N.Mylaraiah |
|Chairman ||Managing Director |
Date: May 25 2016