The Members of
M/s. KAVVERI TELECOM PRODUCTS LIMITED
The Directors have pleasure in presenting the 21stAnnual Report of the Company togetherwith the audited accounts for the year ended 31st March 2016.
FINANCIAL RESULTS - CONSOLIDATED
| || ||(in Lakhs) |
| ||Year ended 31.03.2016 ||Year ended 31.03.2015 |
|Total Income from operations ||4444.46 ||5696.41 |
|Total Expenditure including depreciation ||5466.21 ||5852.71 |
|Interest& Bank Charges ||2491.44 ||2722.95 |
|Depreciation ||1955.16 ||1973.51 |
|Tax Exp. &Provision for Differed Tax ||13.03 ||116.83 |
|Net Loss ||(3526.21) ||(3781.17) |
THE COMPANYS PRODUCTS / SERVICES
Kavveri Telecom Products Limited is a leading telecom wireless subsystem productsmanufacturer providing world-class hardware products and solutions for the TelecomDefense & Aerospace segments. Founded in 1991 Kavveri Telecom designs developstests and manufactures a diverse range of wireless Telecom products from concept todeployment. With over 500 R&D man-years of experience and over 20 years of high pacedgrowth Kavveri Telecom is uniquely positioned to offer an array of world-class productsand solutions to meet product and sub-system requirements of wireless Telecom equipmentmanufacturers Carriers Defence and Space clients. The Company enjoys the status of beingthe largest Indian transnational manufacturer of Antennas & RF products with overseasoffices distributed R&D and foreign acquisitions resulting in market access spanningfour continents and is committed to meet the expectations of its share holding communityclients business partners and employees.
Your company has registered a consolidated total income of Rs. 4444.46 lakhs for2015-16 as compared to Rs. 5696.41 lakhs for 2014-15 and the company posted a net loss ofRs. 3526.21 lakhs for 2015-16 as compared to Rs. 3781.17 lakhs for 2014-15.
The Directors regret their inability to recommend dividend for the year under reviewdue to insufficient profit.
BUSINESS RISK MANAGEMENT
The Company like any other enterprise is exposed to business risk which can beinternal risks as well as external risks. The threats to the segments in which the companyoperates are volatility in Exchange rate &material Prices. The company is concernedabout the vide Fluctuations in prices globally and locally and increase in foreignexchange value.
The Company has not accepted deposits covered under Chapter V of the Companies Act2013 and accordingly the disclosure requirements stipulated under the said Chapter arenot applicable.
PARTICULARS OF LOANS GUARANTEES AND INVESTMENTS
During the year under review the company has not given any loans Guarantees andInvestments covered under the provisions of Section 186 of the Companies Act 2013
CONTRACTS AND ARRANGEMEMENTS WITH RELATED PARTIES
Pursuant to clause (h) of sub-section (3)of section 134 of the Act and Rule 8(2) of theCompanies(Accounts) Rules 2014 the details of related party transactions are mentionedelsewhere in this Annual report.
All contracts / arrangements / transactions entered by the Company during the financialyear with related parties were in the ordinary course of business and on an armslength basis. During the year the Company had not entered into any contract / arrangement/ transaction with related parties which could be considered material in accordance withthe policy of the Company on materiality of related party transactions.
The Policy on materiality of related party transactions and dealing with related partytransactions as approved by the Board may be accessed on the Companys website.
Your Directors draw attention of the members to Note to the financial statement whichsets out related party disclosures.
The company has following subsidiaries:
M/s Kavveri Telecom Infrastructure Limited India
M/s Eaicom India Private Limited India
M/s Kavveri Technologies Inc. Canada
M/s Kavveri Telecom Espana Spain
M/s Kavveri Technologies Americas Inc
Step down subsidiaries: (i.e. subsidiaries of M/s Kavveri Technologies Inc.)
M/s Til-Tek Antennae Inc
M/s Spotwave Wireless Ltd
M/s DCI Digital Communications Inc.
M/s Kavveri Realty 5 Inc.
M/s Trackcom Systems Inc.
M/s. Quality communication systems Inc
M/s. New England Communication systems Inc
Pursuant to Ministry of Corporate Affairs Circular No. 2/2011 dated 08.02.2011since the company is presenting consolidated financial statement of Holding and Subsidiarycompanies the individual financial statements of the subsidiaries are not presentedseparately.
The consolidated financial statement has been prepared in strict compliance withapplicable Accounting Standards and where applicable Listing Agreement as prescribed bythe Security and Exchange Board of India. The company do undertake that annual report thatannual accounts of the subsidiary companies and the related detailed information shall bemade available to shareholders of the holding and subsidiary companies seeking suchinformation at any point of time. Annual accounts of the subsidiary companies are alsokept for inspection by any shareholders in the head office (i.e. Registered Office) ofthe company and of the subsidiary companies.
EXTRACT OF ANNUAL RETURN
The details forming part of the extract of the Annual Return in form MGT-9 is annexedherewith elsewhere in the Annual Report.
DEMAT SUSPENSE ACCOUNT UNCLAIMED SHARES
As on 31st March 2016 there were no Equity Shares of Shareholders were lying in theEscrow Account due to non-availability of the correct particulars.
Your Directors are happy to report that your Company has duly constituted the Boardwith the optimum combination of executive and non-executive Directors and has constitutedthe Committees of the Board to comply with the Corporate Governance requirements as perthe Companies Act 2013 and Provisions of SEBI (LODR) Regulations 2015. A separate sectionon Corporate Governance together with a certificate from the Statutory Auditorsconfirming compliance is set out in the Annexure forming part of this report.
MANAGEMENT DISCUSSIONS AND ANALYSIS REPORT
A Management Discussion and Analysis Report has been attached and forms part of theAnnual Report.
ADDITIONAL INFORMATION AS REQUIRED U/ S 134(3)(m) OF THE COMPANIES ACT 2013
(a) Conservation of Energy:
The Company is monitoring the consumption of energy and is identifying measures forconservation of energy.
(i) the steps taken by the company for utilizing alternate sources of energy -Nil
(ii) the capital investment on energy conservation equipments - Nil
(b) (i) Technology Absorption adaptation and innovation:- .
(ii) Research and Development (R & D): The details are provided elsewhere in thisReport.
(c) Foreign exchange earnings: The details are provided elsewhere in this Report.
(d) Foreign exchange out go: The details are provided elsewhere in this Report.
PARTICULARS OF EMPLOYEES
The Directors are to report that none of the employee was in receipt of remunerationexceeding the limit prescribed under rule 5(2) of the Companies (Appointment andRemuneration of managerial Personnel) Rules 2014
M/s. P. Murali & Co. Chartered Accountants Statutory Auditors of the Companyretire at the conclusion of the ensuing Annual General Meeting and are eligible forreappointment. The said Auditors have furnished the Certificate of their eligibility forre-appointment. Pursuant to the provisions of Section 139 of the Companies Act 2013 andthe Rules framed thereunder. Accordingly the statutory auditor of the Company wasreappointed from the conclusion of the previous AGM till the conclusion of the AGM to beheld in the year 2017 subject to ratification of their appointment at the subsequentAGMs.
BOARD AND COMMITTEES PERFORMANCE EVALUATION
Pursuant to the provisions of the Companies Act 2013 and Provisions of SEBI (LODR)Regulations 2015 the Board has carried out an annual performance the directorsindividually as well as the evaluation of the working of its Audit and Nomination &Remuneration Committees.
NUMBER OF BOARD MEETINGS HELD DURING THE FINANCIAL YEAR AND THE DATES OF THE BOARDMEETINGS:
The Board met five times during the financial year 2015-2016.
The dates on which the above Board meetings were held are as follows; 30thMay 201514th August 2015 7th September 2015 14thNovember 2015 and 13th February 2016.
CORPORATE SOCIAL RESPONSIBILTY:
Your Company believes in addressing the needs of the underprivileged and is committedto serving them. Your Company aims to full fill its social responsibilities by beingactively involved in a variety of public service projects serving underprivileged groups.
During the year your Directors have constituted a Risk Management Committee which hasbeen entrusted with the responsibility to assist the Board in (a) Overseeing and approvingthe Companys enterprise wide risk management framework; and (b) Overseeing that allthe risks that the organization faces such as strategic financial credit marketliquidity security property IT legal regulatory reputational and other risks havebeen identified and assessed and there is an adequate risk management infrastructure inplace capable of addressing those risks. A Group Risk Management Policy was reviewed andapproved by the Committee.
The Company managers monitors and reports on the principal risks and uncertaintiesthat can impact its ability to achieve its strategic objectives. The Companysmanagement systems organisational structures processes standards code of conduct andbehaviours together form the Reliance Management System (RMS) that governs how the Groupconducts the business of the Company and manages associated risks
The Company has introduced several improvements to Integrated Enterprise RiskManagement Internal Controls Management and Assurance Frameworks and processes to drive acommon integrated view of risks optimal risk mitigation responses and efficientmanagement of internal control and assurance activities. This integration is enabled byall three being fully aligned across Group wide Risk Management Internal Control andInternal Audit methodologies and processes
Cost Audit is not applicable as your industry is not within the preview of cost audit
DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to the requirement under Section 134(3)(c)of the Companies Act 2013 withrespect to Directors responsibilities Statement it is hereby confirmed:
a. That in preparation of the annual accounts the applicable accounting standards havebeen followed along with proper explanation relating to material departures ;
b. That the directors have selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the company at the end of thefinancial year ended 31st March 2016 and of the profit and loss of the company for thatperiod;
c. That the directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of this Act for safeguardingthe assets of the company and for preventing and detecting fraud and other irregularities;
d. That the directors have prepared the annual accounts on a going concern basis.
e. that proper internal financial controls were in place and that the financialcontrols were adequate and were operating effectively;
f. that systems to ensure compliance with the provisions of all applicable laws were inplace and were adequate and operating effectively.
During the year ended March 31 2016 the details of subsidiaries are disclosedelsewhere in the Annual Report as per the Companies Act 2013 and Provisions of SEBI(LODR) Regulations 2015. The policy on determining material unlisted subsidiary of theCompany is approved by the Board of Directors of the company.
Vigil Blower Mechanism
The Board of Directors of the company are committed to maintain the highest standard ofhonesty openness and accountability and recognize that employees have important role toplay in achieving the goal. As a public company the integrity of the financial matters ofthe Company and the accuracy of financial information is paramount. The stakeholders ofthe Company and the financial markets rely on this information to make decisions. Forthese reasons the Company must maintain workplace where it can retain and treat allcomplaints concerning questionable accounting practices internal accounting controls orauditing matters or concerning the reporting of fraudulent financial information to ourshareholders the Government or the financial markets. The employees should be able toraise these free of any discrimination retaliation or harassment. Pursuant to the policyemployees are encouraged to report questionable accounting practices to Mr. L R VenugopalChairman of Audit Committee through email or by correspondence through post.
Familiarisation programme for Independent Directors
Pursuant to the Companies Act 2013 and Provisions of SEBI (LODR) Regulations 2015 theCompany has formulated a programme for familiarising the Independent Directors with thecompany their roles rights responsibilities in the company nature of the industry inwhich the company operates business model of the company etc through various initiatives.
Key Managerial Personnel
The Company is in the process of appointing the other Key Managerial Personnel asprescribed by the provisions of Companies Act 2013.
Internal Financial Controls
The Company has in place adequate internal financial controls with reference tofinancial statements. Periodic audits are undertaken on a continuous basis covering allthe operations i.e. manufacturing sales & distribution marketing finance etc.Reports of internal audits are reviewed by management from time to time and desiredactionsare initiated to strengthen the control and effectiveness of the system.
Pursuant to the provisions of Section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014the Secretarial AuditReport is obtained by the company and forms part of this Annual report.
Disclosures pursuant to The Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014
1. The Disclosures pursuant to sub-rule (1) of Rule 5 of The Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 are forms part of the BoardsReport.
2. The Disclosures pursuant to sub-rule (2) of Rule 5 of The Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 in respect of employees of the Companyforms part of the Boards Report.
The Board has on the recommendation of the Nomination & Remuneration Committeeframed a policy for selection and appointment of Directors Senior Management and theirremuneration. The details pertaining to criteria for determining qualifications positiveattributes and independence of a Director and remuneration policy have been provided inSection of the attached Corporate Governance Report.
Significant and Material Orders Passed by the Regulators or Courts
There are no significant material orders passed by the Regulators/Courts which wouldimpact the going concern status of the Company and its future operations
Disclosure Under the Sexual Harassment of Women at Workplace (Prevention Prohibitionand Redressal) Act 2013
The Company has in place an Anti Sexual Harassment Policy in line with the requirementsof Sexual Harassment of Women at Workplace (Prevention Prohibition and Redressal) Act2013. An Internal committee has been set up to redress the complaints received regardingsexual harassment at workplace. All employees including trainees are covered under thispolicy.
The relationship between the management and the staff was very cordial throughout theyear under review. Your Directors take this opportunity to record their appreciation forthe cooperation and loyal services rendered by the employees.
Your Directors place on record their appreciation of the continuous assistance andco-operation extended to your Company by the valued customers bankers Reserve BankIndia SEBI Bombay Stock Exchange Limited & National Stock Exchange of India Limitedand all other regulatory Authorities. The Directors also sincerely acknowledge thesignificant contributions made by all the employees for their dedicated services to theCompany.
| ||For and on behalf of the board || |
| ||For KAVVERI TELECOM PRODUCTS LIMITED || |
|PLACE: Bengaluru ||C. Shivakumar Reddy ||R H Kasturi |
|DATE: 29.08.2016 ||Chairman &Managing Director ||Director-Operations |