Your Directors have pleasure in presenting the 29th Annual Report together with theaudited financial statement of accounts for the financial year ended March 31 2016.
It gives immense pleasure to share the vision and path that we at Aksh are committed toand continue to add value. The last couple of years have been truly amazing not just forthe telecom sector but for the Optical Fibre Sector in particular. With the realizationof large scale telecom projects and increased focus on IP enabled services; the demand forOptical Fibre Cable has been on the upswing not just in India but globally as well.
Your Company has been able to add several new geographies in ever expanding exportportfolio and happy to report that the Company now exports to over 70 countries across 6continents. The export division has stood strong against the global macro-economicheadwinds and slowdown and has continued to add value not just to the company but also tothe companies that we cater to by delivering world class customized products and services.
The financial performance of the Company for the financial year ended March 31 2016is summarized below:
| || ||Rs. in Lacs |
|Particulars ||F.Y. ended 2015-2016 ||F.Y. ended 2014-2015 |
|Revenue from Operations ||43831.46 ||35413.46 |
|Earnings before Interest Depreciation Amortization Exceptional Items & Tax ||7364.51 ||5503.27 |
|Depreciation and Amortization Expenses ||1872.44 ||1630.88 |
|Earnings before Interest Amortization Exceptional Items & Tax ||5492.07 ||3872.39 |
|Finance Cost ||1040.12 ||705.80 |
|Profit before Exceptional items & Tax ||4451.95 ||3166.59 |
|Exceptional Income/(Expenses) ||(729.26) ||115.51 |
|Profit before Tax ||3722.69 ||3282.10 |
|Income Tax ||794.48 ||759.13 |
|Deferred Tax Expenses ||234.00 ||- |
|MAT Credit Entitlement ||657.67 ||687.95 |
|Net Profit after Tax ||3351.88 ||3210.92 |
|Balance (Loss)/profit brought forward from previous year ||2.88 ||(3199.34) |
|Less : Appropriation || || |
|Proposed Dividend ||- ||(7.44) |
|Dividend Tax ||- ||(1.26) |
|Surplus carried to Balance sheet ||3354.76 ||2.88 |
Financial year 2015-16 closed with revenue of Rs.43831.46 Lacs EBIDTA of Rs.7364.51Lacs and PAT of Rs.3351.88 Lacs. The manufacturing business earned revenues ofRs.39689.70 Lacs at an EBIT margin of 14.34%.
During the year the Company introduced certain new products and adding new markets inthe manufacturing business. your Company continues to be recognized globally for highquality Fibre Reinforced Plastic (FRP) Rods and Optical Fibre Cables.
The detailed analysis of Company's operations and segment wise performance is coveredunder Management Discussion & Analysis Report.
The directors are unable to recommend any dividend in view of the capital expenditurerequired for expansion and diversification by the Company.
The domestic Indian market is currently on a high with most service providers rapidlyexpanding and improving their network performance. Carriers need to continue to focus onproviding data and voice services that are high quality reliable and affordable. Thechallenge in 2016 will be doing this in a market where there is increasing usagedeclining rates and scarce spectrum.
Data usage has been growing dramatically particularly due to streaming services andis expected to continue that path in the year ahead. Wi- Fi usage will continue to be keyespecially as carriers look to offload more mobile traffic onto broadband networks(especially fibre) as well as considerations around other spectrum efficiency technologiesand potentially unlicensed spectrum solutions (i.e. LTE-U). Voice over LTE (VoLTE) andVoice over Wi-Fi (VoWiFi) services will also be a key focus to help carriers rationalizenetworks and potentially offer improved and expanded services.
Growth in APAC is expected to be higher than other regions at a CAGR of 11.45%. APACcontinues to dominate the market with demand for optical fibre and optical fibre cablesprimarily driven by China Japan South Korea and Taiwan in the FTTx market. Thisexplosive growth has triggered a scarcity in the 'Perform' market and driving both thevendors and users to scramble for sourcing fibre. The market price of fibre has scaled upby over 30% in last six months with a predictive surge in demand for next few months
As in China data growth and government impetus will drive data demand in India. Though'Smart Cities' is being touted as the next big growth story for digital India the primaryfocus would be to create a duality of a 'Smart Home' and a 'Smart City'. Therefore inIndia too the FTTx market would see a phenomenal demand for optical fibre networks fornext few years.
In India annual demand for telecom sector showed signs of revival with governmentoffering spectrum licenses to cover virgin territories across India especially in Tier IIIregions. Besides railways modernization additionally the infrastructure segment coveringGreenfield projects viz. dedicated freight corridors metro rail and renewable energy isexperiencing great demand for optical fibre network.
India continues to march the growth trajectory in NOFN NFS and Triple Playapplications.
Overall it is forecasted that global fibre optics market will reach $12.2 billion by2020 at a CAGR of 9.5% with growth buoyancy dominated in APAC region. The demand for FRPis also set to rise by 9 % during the current year as compared to the previous year. It isanticipated that the demand of FRP will rise by 18-20% by 2020 as compared to FY 2015-16.Aksh share of FRP market is ~ 21% which is set to rise by >10% by 2020.
SERVICES DIVISION: 1 STOP AKSH
A special mention is required for the services division of the Company- 1 Stop Aksh.The services team has made sure that the 1 Stop Aksh brand reaches even the most difficultterritories of Rajasthan and the service quality & delivery is at par with the Urbanareas of Rajasthan. 1 Stop Aksh is well on its course to open a record of 10000+ e-kiosksin the state of Rajasthan by the end of next financial year. With over 8000+ operationalkiosks in the state 1 Stop Aksh is already a market leader in the e-governance space withover 250+ services currently on offer through the brand. It is estimated that over 16million citizens across the state of Rajasthan are benefitting from the services renderedon the 1 Stop Aksh network.
The company has also launched a massive employability skill development campaign withIT Gyan Kendras (ITGK) "National Digital Literacy Mission (NDLM)" and"Telecom Sector Skill Council (TSSC)". The company has set an aggressive targetof training over 100000+ candidates in the state through various programmes.
The company is also offering to recruit and help find employment to candidates whoundergo necessary OFC related training that the company is delivering via Telecom SectorSkill Council (TSSC) programmes which is a first in the country by any large scaleOptical Fibre Cable player in India.
During the year with a view to increase product portfolio and brand presence Board ofDirectors decided to enter into new line of business to manufacture Ophthalmic Lenses. Theoperation of proposed manufacturing facilities will be initiated during 2016-17 and thesame is to be completed in a phased manner in next 3-5 years with production capacity of200000 pairs of lenses per day at a project outlay of INR 85 cr.
Currently 95% of domestic requirement of ophthalmic lenses is met through imports.There is no Indian Manufacturer with such huge capacities and there is handful oforganised players in India. Setting up these facilities in India shall give a boost tomake India as self reliant and is a notable step towards "Make in India"project. It shall also be a step forward towards sustainable growth of Company in years tocome.
To cater upcoming robust demand in Optical Fibre Industry and also to maintain itsleadership position Board of Directors also approved capital expenditure of Rs.95 Cr forexpansion and modernization of existing manufacturing facilities and to enhance thecapacity in Optical Fibre by 100% Optical Fibre cable by 50% and Fibre Reinforced Plasticby 200%. The capacity expansion is being strategically planned to cater the market demandsand is on track to become operational during FY 2016-17.
As on date the Company has one Indian Subsidiary viz. APAKSH Broadband Limited andone Wholly Owned Overseas Subsidiary namely 'AOL-FZE' incorporated in SAIF Zone Sharjah(U.A.E) with one step down Wholly Owned Overseas subsidiary namely 'AOL PROJECTS- DMCC'.
A report on highlights of performance and their contribution to the overall performanceof the Company as per Companies Act 2013 is provided in Annexure-I. The policy fordetermining material subsidiaries as approved may be accessed on the company's website atthe link: http:// www.akshoptifibre.com/corporate-governance.php.
LOANS GUARANTEES OR INVESTMENTS
Pursuant to Section 186 of the Companies Act 2013 the details of Loans Guaranteesextended and / or Investments made by the Company in subsidiaries are provided inAnnexure-II.
RELATED PARTY TRANSACTIONS
All contracts / arrangements / transactions entered into by the Company during thefinancial year with related party(s) were in ordinary course of business and on arm'slength basis. During the year the Company did not enter into any contracts / arrangements/ transactions with related parties which could be considered material in accordance withthe policy of the Company on materiality of related policy transactions.
The policy on dealing with related party transactions as approved by the Board may beaccessed on the company's website at the link:http://www.akshoptifibre.com/corporate-governance.php
Particulars of contracts or arrangements with related parties referred to in section188(1) of the Companies Act 2013 in prescribed Form AOC-2 is annexed herewith marked asAnnexure-III.
As on March 31 2016 the Board of your Company consisted of 6 Directors consisting of1 Promoter-Chairman & Managing Director 4 Independent Directors 1 Non Executive NonIndependent Director.
MEETINGS OF THE DIRECTORS
The Company had 4 (Four) Board meetings during the financial year under review thedetails which are given in the Corporate Governance Report that forms part of this AnnualReport. The intervening gap between any two meetings was within the period prescribed bythe Companies Act 2013.
APPOINTMENTS / RESIGNATIONS FROM THE BOARD / KMPS
During the year under review Ms. Devika Raveendran was appointed as an IndependentDirector by the shareholders for a term of 5 years w.e.f. May 30 2015;
Dr. Kailash S Choudhari was appointed as Chairman & Managing Director for the termof 3 years w.e.f. June 1 2015; and also designated as KMP of the Company.
Mr. Chetan Choudhari resigned from the position of Managing Director & KMP w.e.f.June 01 2015.
There were no other appointments/ resignations of Directors/KMP during the year endedMarch 31 2016.
Further the Board in its meeting held on May 28 2016:
a) appointed Mr. Satyendra Gupta as Deputy Managing Director (KMP) w.e.f. May 282016 for a term of 3 years till May 27 2019 subject to the approval of Shareholders;
b) appointed Mr. Pawan Kumar Gambhir as Chief Financial Officer and KMP of the Company.
DECLARATION FROM INDEPENDENT DIRECTORS
The Company has received declarations from all the Independent Directors of the Companyconfirming that they meet with the criteria of independence as prescribed both undersub-section (6) of Section 149 and Regulation 16 (1) (b) of the SEBI (Listing Obligationsand Disclosure Requirements) Regulations 2015.
The Board of Directors declare that the Independent Directors Mr. Amrit Nath Mr.Dinesh Kumar Mathur Mr. Narendra Kumbhat & Ms. Devika Raveendran are:
(a) in the opinion of the Board are persons of integrity and possesses relevantexpertise and experience;
(b) (i) were not a promoter of the Company or its holding subsidi-ary or associatecompany;
(ii) not related to promoters or directors in the Company its holding subsidiary orassociate company;
(c) had no pecuniary relationship with the company its holding subsidiary orassociate company or their promoters or directors during the two immediately precedingfinancial years or during the current financial year;
(d) None of their relatives has or had pecuniary relationship or transaction with thecompany its holding subsidiary or associate company or their promoters or directorsamounting to two percent or more of its gross turnover of total income or fifty lakhrupees or such higher amount as may be prescribed whichever is lower during the twoimmediately preceding financial years or during the current financial year;
(e) Neither they nor any of their relatives -
(i) holds or has held the position of a key managerial personnel or is or has beenemployee of the company or its holding subsidiary or associate company in any of thethree financial year immediately preceding the financial year in which he is proposed tobe appointed;
(ii) is or has been an employee or proprietor or a partner in any of the threefinancial years immediately preceding the finan- cial year in which he is proposed to beappointed of -
- a firm of auditors or company secretaries in practice or cost auditors or the companyor its holding subsidiary or associate company; or
- any legal or a consulting firm that has or had any trans- action with the companyits holding subsidiary or asso- ciate company amounting to ten percent or more of thegross turnover of such firm;
(iii) holds together with his relative two per cent or more of the total voting powerof the Company; or
(iv) is a Chief Executive or Director by whatever name called of any non profitorganization that receives twenty-five percent or more of its receipts from the companyany of its promot- ers directors or its holding subsidiary or associate company or thatholds two per cent or more of the total voting power of the company; or
(f) possesses such other qualifications as may be prescribed.
Material Changes and commitments affecting the financial position between the end offinancial year and date of report
a) The Board in its meeting held on April 23 2016 has considered approved andrecommended:
Changes in the Main Objects of the Memorandum (Clause III (A)) by way ofInclusion of new business objects;
Amendment in Clause III(B) & (C) of the Memorandum; and
Amendment in Liability clause of the Memorandum to being it in line with theprovisions of Companies Act 2013.
The same was approved by the shareholders through postal ballot on July 12 2016.
b) The Board in its meeting held on May 28 2016 has considered and approved:
Appointment of Mr. Satyendra Gupta as Deputy Managing Director (KMP) on theBoard of the Company for a term of 3 (Three) years w.e.f May 28 2016 till May 27 2019.
Appointment of Mr. Pawan Kumar Gambhir as Chief Financial Officer & KeyManagerial Personnel (KMP) of the Company w.e.f May 28 2016.
Setting up of Manufacturing Facility for production of Opthal- mic Lenses with aproduction capacity of 200000 pairs of lenses per day at a project outlay of INR 85 Cr.to be complet- ed in a phased manner and to be funded by debt & internal accruals.
Merger of its subsidiary APAKSH Broadband Limited with the Company subject tonecessary statutory approvals and process/details to be finalized in due course withrequisite agencies.
RE-APPOINTMENT/ APPOINTMENT OF DIRECTORS
In accordance with the Articles of Association of the Company Mr. B. R. Rakhecha theNon Executive Non Independent Director retire by rotation and being eligible has offeredhimself for re-appointment.
Pursuant to the provisions of Section 152(6) and other applicable provisions of theCompanies Act 2013 your Directors are seeking re- appointment of Mr. B. R. Rakhecharetiring by rotation in the ensuing Annual General Meeting.
PERFORMANCE EVALUATION OF THE BOARD
The Company has devised a policy for performance evaluation of Independent DirectorsChairman Board Board Committees and other individual Directors which include thecriteria for performance evaluation of the non-executive Directors and executiveDirectors.
Based on the policy for performance evaluation of Independent Directors the BoardBoard Committees and other individual Directors a process of evaluation was followed bythe Board for its own performance and that of its Committees and individual Directors.
The statement indicating the manner in which formal annual evaluation of the Directorsthe Board and Board level Committees are given in detail in the report on CorporateGovernance which forms part of this Annual Report. The Nomination & remunerationpolicy may be accessed on the Company's website at the link:http://www.akshoptifibre.com/corporate-governance.php
The Nomination & Remuneration Policy is annexed herewith marked as Annexure-IV.
The Report on Corporate Governance along with the Certificate from the StatutoryAuditors certifying the compliance of Corporate Governance enumerated in Regulation 34(3)and Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 is included in the Annual Report.
MANAGEMENT DISCUSSION AND ANALYSIS
The Report on Management Discussion and Analysis has been attached and forms part ofthe Annual report.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
The Company has constituted Corporate Social Responsibility Committee as per Section135 of the Companies Act 2013 read with the Companies (Corporate Social ResponsibilityPolicy) Rules 2014. The Company has Corporate Social Responsibility Policy (CSR Policy)elaborating the activities to be undertaken by the company in furtherance and duedischarge of its corporate social responsibility.
The CSR policy may be accessed on the Company's website at the link:http://www.akshoptifibre.com/corporate-governance.php
During the year the company continued its plantation drive 'Upvan' in order to improvethe ecological balance and spread the message of Environment protection in the Industrialtown of Bhiwadi. More than 50 industries NGOs and educational institutions from Bhiwadijoined in the initiative of the Company and carried out a massive rally "PrayavaranJagrukta Rally" to spread awareness on importance of plantation in community. TheCompany was able to plant more than 25000 saplings during the year. For this effort thecompany was recognized and appreciated by the Bhiwadi Manufacturers Association (BMA) theIndian Medical Association the Rotary Club Bhiwadi and other organizations.
This year the company also started plantation Drive "Aksh Econation" atReengus (Sikar). Local schools and Gram Panchayats joined the company's initiative andtogether planted more than 4500 trees.
Under the Mission 'Muskaan' the Company further improved the infra of its adoptedschool in Bhiwadi by providing class room furniture constructing Boundary walldeveloping playground providing drinking water purification system. The company alsoprovided computer teachers in four Government Schools of Bhiwadi to promote qualitycomputer Education among children.
During the year the company adopted one more school at Reengus (Sikar) under itsMission 'Shiksha Hamara Swabhiman' this making total of 3 Schools. In all adopted schoolsthe company developed the infra like construction of Toilets development of playgroundrenovation of building construction of shade educational painting in class rooms etc.
State Govt. of Rajasthan duly recognized and appreciated Aksh CSR initiatives in thefield of Education and accordingly Hon'ble Governor of Rajasthan bestowed the prestigious"BHAMASHAH AWARD" to both of its manufacturing locations at Bhiwadi and Reengusfor Company's contribution in education sector.
The statutory disclosures and an Annual Report on CSR activities is annexed herewithmarked as Annexure -V.
(A) The statement containing particulars of employees as required under Section 197(12)of the Companies Act 2013 read with Rule 5(2) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 as amended from time to time forms partof this report. In terms of Section 136 of the Companies Act 2013 the same is open forinspection at the Registered Office of your Company. Copies of this statement may beobtained by the members by writing to the Company Secretary of your Company.
(B) The ratio of the remuneration of each director to the median employee'sremuneration and other details in terms of sub- section 12 of Section 197 of the CompaniesAct 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 as amended from time to time are forming part of this report asAnnexure -VI.
EMPLOYEES STOCK PURCHASE SCHEME
During the year under review no shares have been granted hence there was no vesting ofShares.
The Company has comprehensive risk management policy to take care of the business andother risks to which the company is exposed to.
CONSOLIDATED FINANCIAL STATEMENTS
As provided in the Accounting Standard (AS-21) issued by the Institute of CharteredAccountants of India (ICAI) on consolidated financial statements the consolidatedfinancial statements are attached which form part of the Annual Report.
At the Annual General Meeting held on 27th September 2014 M/s P. C. Bindal & Co.Chartered Accountants were appointed as Statutory Auditors of the Company to hold officetill the conclusion of the Thirtieth Annual General Meeting. In terms of first proviso toSection 139 of the Companies Act 2013 the appointment of the auditors shall be placedfor ratification at every Annual General Meeting. Accordingly the appointment of M/s P.C. Bindal & Co. Chartered Accountants as Statutory Auditors of the Company isplaced for ratification by the shareholders. In this regard the Company has received acertificate from the auditors to the effect that if they are reappointed it would be inaccordance with the provisions of Section 141 of the Companies Act 2013.
The observation of Auditors and their report read with the relevant Notes to Accountsare self-explanatory and therefore do not require further explanation.
The Company has appointed M/s. K. G. Goyal & Associates as Cost Auditors for theFinancial Year 2016-2017 to audit the cost records of the Company.
COST AUDIT COMPLIANCE
Pursuant to Sec. 148 of the Companies Act 2013 read with Companies (Cost Audit) Rules2014 including any statutory modifications thereof the Company shall submit the CostAudit Report for the financial year 2015-16.
The Company appointed Ms. Pooja Anand Practicing Company Secretary to conduct theSecretarial Audit for the financial year 2015- 16. The Secretarial Audit Report for thefinancial year ended March 31 2016 is annexed herewith marked as Annexure - VII tothis Report.
The Company's manufacturing facilities continue to remain certified by independent andreputed external agency as being compliant as well as aligned with the external standardsfor Quality Management System & Environmental Management System ISO 9001:2008 and14001:2004.
Industrial relations remained cordial throughout the year. Your Directors recognizesand appreciates the sincerity hard work loyalty dedicated efforts and contribution ofall the employees during the year. The Company continues to accord a very high priority toboth industrial safety and environmental protection and these are ongoing process at theCompany's plants.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN ExCHANGE EARNINGS & OUTGO
The particulars relating to conservation of energy technology absorption foreignexchange earnings & outgo as required to be disclosed under the Act are provided in Annexure- VIII to this report.
EXTRACT OF ANNUAL RETURN
Extract of Annual Return of the Company is annexed herewith as Annexure- Ix tothis Report.
The Equity Shares of the Company continue to be listed at The Bombay Stock Exchange Ltdand The National Stock Exchange Ltd. The Listing Fee has been paid to all the stockexchanges.
Your directors state that no disclosure or reporting is required in respect of thefollowing items as there were no transactions on these items during the year under review:
i. Details of deposits covered under chapter V of the Act;
ii. Issue of equity shares with differential voting rights dividend or otherwise;
iii. Issue of shares (including sweat equity shares) to employees of the company underthe ESOS scheme or otherwise;
Your Directors further state that during the year under review there were nocomplaints/ cases pursuant to the Sexual Harassment of Women in workplace (PreventionProhibition and Redressal) Act 2013.
DIRECTOR'S RESPONSIBILITY STATEMENT
To the best of our knowledge and belief and according to the information andexplanations obtained by us your Directors make the following statements in terms ofSection 134 (5) of the Companies Act 2013:
(a) in the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to 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 and loss 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 this Act for safeguarding theassets 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; and
(e) the directors had laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively.
(f) the directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
Your Directors take this opportunity to place on record their appreciation to thecontribution made by the employees to the working of the company.
Your Directors would also like to express a profound sense of appreciation andgratitude to all the stakeholders for the patronage and for the commitment shown insupporting the company in its continued robust performance on all fronts.
We look forward to your continued support and co-operation as we move forward to ournew journey while assuring our continued commitment to maintain and healthy and fruitfulrelationship.
| ||for Aksh Optifibre Limited |
| ||Dr. Kailash S Choudhari |
|Date: August 13 2016 ||Chairman & Managing Director |
|Place: New Delhi || |