To the Members
The Board of Directors have pleasure in presenting the 34th Annual Report along withthe audited financial statements for the financial year ended March 312022.
Key highlights of the financial results of your Company prepared as per the IndianAccounting Standards ("Ind AS") for the financial year ended March 312022 areprovided below:
(Rs. in lakhs)
|Particulars ||Year ended 31st March 2022 ||Year ended 31st March 2021 |
|Revenue from operations ||11892.51 ||5985.96 |
|Other Income ||111.72 ||94.24 |
|Total Revenue ||12004.23 ||6080.20 |
|Profit before depreciation and Tax ||1167.66 ||574.88 |
|Depreciation ||30.85 ||51.20 |
|Profit before Tax ||1136.81 ||523.68 |
|Tax Expense ||288.55 ||161.30 |
|Profit after Tax ||848.26 ||362.38 |
|Other Comprehensive Income ||3.53 ||(0.76) |
|Total Comprehensive Income ||851.79 ||361.62 |
Financial Year 2021-22 was an outstanding year for the company. Your Company did havethe fastest growth over the previous financial year. Your Company has been gaining marketshare in Fiber Optic business where your Companys capabilities are comprehensiveand of immense value for the customers.
Your Company had a successful year in delivering strong operational & financialperformance where the overall revenue from operations increased by 99% over that ofprevious year. Revenue from the Telecommunication business increased by 18% and therevenue from IT-Networking (Enterprise network) business increased by 108% over that ofprevious year. For the full year the Companys profit before tax stood at Rs.1136.81lakhs compared to Rs.523.68 lakhs for the previous year. Profit after tax for thefinancial year was Rs.848.26 lakhs as compared to Rs.362.38 lakhs for the previous year.On an overall basis improved revenue from operations and profitability which was largelydriven by volume and product mix.
Your Directors at their meeting held on May 27 2022 has recommended payment of finaldividend of Rs.4 per equity share of face value of Rs.10 each and one-time specialdividend of Rs.10 per equity share of face value of Rs.10 each for the financial yearended March 312022 for approval of the Members at the ensuing Annual General Meeting(AGM) of the Company. The dividend if approved by the Members at the AGM scheduled onJuly 29 2022 will result in cash outflow of Rs.644 lakhs.
TRANSFER TO RESERVES
The Company has not transferred any amount to reserves during the year under review.
There is no change in the Share Capital structure of the Company during the year underreview.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
The Company has not given any loan or provided any guarantee or made investment withinthe meaning of Section 186 of the Companies Act 2013 during the year under review.
BUSINESS AND OPERATIONS
During the year your Company emerged strongly after Pandemic tested us severely duringthe beginning of the financial year. ADC team demonstrated exceptional resilience indealing with an unprecedented time where your Company delivered highest revenue &growth.
With full of uncertainties it is not something that any of us would claim to predict.The lingering impact of Covid in many locations of the world including India massivesupply chain disruptions rising interest rates accompanied with increase in costs ofcommodities & volatility is a real confrontation with complexity & challenges infront of your Company. At the same time tremendous Opportunities lies before your Companywith growth in Data Centre business & Broadband connectivity requirements which givesgreat optimism about the future that holds for your company.
With this new normal and difficult challenge your company is constantly determiningwhat the mid to long term implications of the crisis are and how your company shouldrespond strategically. Regardless of all the challenges your company firmly believe thatit will emerge from this a stronger ADC India Communications than ever before byrealigning cost structure and sharpen overall productivity by being a more valuablepartner to our clients than ever before. Your company Board and Risk Management Committeehas always looked at worst case scenario of times like these & built a portion of thestrong financials by making right decision which is sustainable and consistent over years.
The markets your Company serve continue to undergo disruptions after the pandemicwhere your Company would see an impact in the Enterprise Network copper business withincrease in work from home adoption growing with office space expansion requirementscoming down/going slow in short term. However your Company do see continues growth inFiber Business over copper due to multifold increase in Bandwidth requirements withdenser wireless & deeper fiber deployments across the upcoming infrastructureprojects. Added to this your Company do see inflationary pressure accelerating with steepincrease in prices across commodities and raw materials like copper stainless steelplastics and many more items; towards which your company has been adjusting pricesconsistently across certain products and/or product lines.
While our Country is still far from being out of the medical crisis & its impact ondifferent aspects of business it is clear to us that the way we behave in a crisis is inmany ways more reflective of who we are as a Company. Looking ahead your Company isoptimistic of the opportunities of the work from its clients and the approach your Companyhas put in place with respect to Data Centre business & Broadband connectivityrequirements. The massive investments committed both by Government & Private Playerstowards infrastructure growth would improve the overall business sentiment and investmentsin next few Quarters/Years. Market is expected to improve driven by investments inInfrastructure projects Pharma Healthcare Education Banking & Finance Defensesector E-commerce Manufacturing Digital India and Smart city initiatives where yourCompany will be able to favorably participate in the areas of its strength within eachopportunity as the market evolves.
While the demand outlook is strong your Company remain vigilant in order to be agileand evolve proper approach with the changing dynamics with continued focus on growingrevenues and profitability with new products introduction and by realigning cost structureby looking at ways of cost reduction to be competitive in the marketplace.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Management Discussion and Analysis Report for the year under review as stipulatedunder Regulation 34 of SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 (SEBI Listing Regulations) is presented in a separate section forming part of theAnnual Report.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
In accordance with the provisions of the Companies Act 2013 and the Articles ofAssociation of the Company Ms. Yaman Roy (DIN 07341809) Director retires by rotation atthe ensuing Annual General Meeting of the Company and being eligible offers herself forre-appointment.
During the year under review there were no changes in the Key Managerial Personnel ofthe Company. As on date Mr.J.N.Mylaraiah Managing Director Mr. Rakesh Bhanushali ChiefFinancial Officer and Mr. R. Ganesh Company Secretary are the Key Managerial Personnel ofthe Company.
The Independent Directors of the company have submitted declaration to the Companyunder Section 149(7) of the Companies Act 2013 stating that they meet the criteria ofindependence as provided in section 149(6) of the Companies Act 2013 and Regulation 16(1) (b) of SEBI Listing Regulations 2015. Further in terms of the Regulation 25(8) of theSEBI Listing Regulations they have confirmed that they are not aware of any circumstancesor situation which exists or may be reasonable anticipated that could impair or impacttheir ability to discharge their duties with an objective independent judgement andwithout any external influence.
The Independent Directors have also submitted declaration to the Company confirmingcompliance of relevant provisions of Rule 6 of the Companies (Appointment andQualifications of Directors) Rules 2014.
In the opinion of the Board the Independent Directors of the Company are persons ofhigh repute & integrity and possess the relevant expertise and experience in theirrespective fields of profession.
Six Board meetings were held during the year. The details of the meetings held andattended by each Director during the year are given in the Corporate Governance Reportwhich forms part of this Report.
The details pertaining to the composition and terms of reference of the Audit Committeeare provided in the Corporate Governance Report which forms part of this Report.
During the year under review all the recommendations made by the Audit Committee wereaccepted by the Board of Directors.
DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to the provisions of Section 134 of the Companies Act 2013 the Board ofDirectors based on the information and explanations obtained by them to the best oftheir knowledge and belief confirm that:
a. in the preparation of annual accounts the applicable accounting standards have beenfollowed and that no material departures have been made from the same;
b. they have selected such accounting policies and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of the Company as on March 31 2022 and of the profit and loss ofthe Company for the period ended on March 312022;
c. they have 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. they have prepared the annual accounts on a going concern basis;
e. they have laid down internal financial controls to be followed by the company andthat such internal financial controls are adequate and have been operating effectively;and
f. they have devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems are adequate and operating effectively.
DIRECTORSAPPOINTMENT 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 Companys business and policy decisions areconsidered by the Nomination and Remuneration Committee for appointment of new Directorson the Board. The Non-Executive Independent Directors appointed on the Board are paidsitting fees for attending the Board and Audit Committee Meetings. No other remunerationor commission is paid to the Non-Executive Independent Directors. NonExecutiveNon-Independent Directors are neither paid any sitting fees nor paid any commission. Theremuneration paid to the Managing Director is governed by the relevant provisions of theCompanies Act 2013 rules of the Company and Members approval. Executive CompensationPolicy Guidelines has been placed on the Companys website www.adckcl.com/AboutADC/Policies.
The Companys Policy and Process for Board Evaluation lays down a structuredquestionnaire to be used in the performance evaluation of the Board its Committees andIndividual Directors. This Policy has been displayed on the website of the Company atwww.adckcl.com.
Using the structured questionnaire the Board of Directors has carried out during theyear under review an annual evaluation of its own performance and that of its variousCommittees and individual Directors pursuant to the requirements of the Companies Act2013 and SEBI Listing Regulations. The Board of Directors have expressed their fullsatisfaction with the overall functioning of the Board and its various Committees and themembers of the Board.
Further the Independent Directors at their exclusive meeting held on March 15 2022reviewed the performance of the entire Board of Directors and NonIndependent Directors andother items as stipulated under the SEBI Listing Regulations.
Your Company has always practiced sound corporate governance and has complied with theCorporate Governance Requirements under the Companies Act 2013 and SEBI ListingRegulations.
As required under Regulation 34 (3) read with Schedule V (C) of the SEBI ListingRegulations a report on Corporate Governance along with a certificate from StatutoryAuditors of the Company regarding compliance of conditions of Corporate Governance duringthe year ended March 31 2022 are given in a separate section and forms part of the AnnualReport.
VIGIL MECHANISM / WHISTLE BLOWER POLICY
The Vigil Mechanism of the Company is governed by "Vigil Mechanism Policy"for Directors Employees and others who are associated with the Company to report to theManagement of the Company instances of unethical behavior actual or suspected fraud orviolation of the Companys code of conduct. The Policy provides adequate safeguardsagainst victimization of Director(s) and Employee(s) who avail of the mechanism andprovides for direct access to the Chairman of the Audit Committee in exceptional cases.The Vigil Mechanism also cover the Whistle Blower Mechanism aspect as stipulated under theCompanies Act 2013 and the SEBI Listing Regulations. The Company affirms that no personhas been denied access to the Audit Committee in this respect. The Vigil Mechanism/WhistleBlower policy is available on the Companys website at www.adckcl.com/AboutADC/Policies.
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITIONAND REDRESSAL) ACT 2013
The Company has zero tolerance towards any form of sexual harassment at the workplaceand to this end has adopted a policy on prevention prohibition and redressal of sexualharassment of women at workplace in line with the provisions of Sexual Harassment of Womenat Workplace (Prevention Prohibition and Redressal) Act 2013 (POSH Policy) and the Rulesframed thereunder. The Company is committed to providing a safe and conducive workenvironment to all its employees. The Company believes that all individuals have the rightto be treated with dignity and strives to create a workplace which is free of gender biasand sexual harassment. An internal committee has also been set up to redress complaintsreceived on sexual harassment. The policy has been displayed in the Companys websiteat www.adckcl. com/About ADC/Policies.
The Company has not received any complaint of sexual harassment during the year underreview.
The Company has formulated a Risk Management Policy to identify assess and mitigationof various risks to Companys business which is covered in detail in the ManagementDiscussion and Analysis Report which forms part of this Report.
The Company has constituted a Risk Management Committee. The constitution and terms ofreference of this Committee are provided in the Corporate Governance Report. The RiskManagement Committee at its meeting held on March 15 2022 discussed and reviewed variousbusiness risks encountered by the Company and the risk mitigation processes adopted by theManagement to address these risks.
RELATED PARTY TRANSACTIONS
In line with the requirements of the Companies Act 2013 and SEBI Listing Regulationsthe Company has formulated a Policy on Related Party Transactions. The objective is toensure proper approval disclosure and reporting of transactions as applicable betweenthe Company and any of its related parties. The Policy on Related Party Transactions hasbeen displayed in the Companys website at www.adckcl.com/About ADC/Policies.
All the related party transactions entered by the Company during the financial yearwere at arms length basis and in the ordinary course of the Companys businessand adheres to the applicable provisions of the Companies Act 2013 and SEBI ListingRegulations.
A statement of all related party transactions is placed before the Audit Committee on aquarterly basis specifying the nature and value of the transactions for review andapproval. Prior omnibus approval of the Audit Committee is obtained for the transactionswhich are foreseeable and of a repetitive nature. There were no related party transactionsmade by the Company during the financial year having potential conflict with the interestof the Company at large.
Transactions with related parties as perthe requirement of Indian Accounting Standard24 are disclosed in the notes to the financial statements. In accordance with Section 134of the Companies Act 2013 read with Rule 8 of the Companies (Accounts) Rules 2014particulars of the material related party transactions entered by the Company during thefinancial year ended March 312022 in the prescribed Form AOC-2 is annexed to this reportas Annexure A.
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 Committeeof the 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.
STATUTORY AUDITORS AND AUDITORS REPORT
M/s. Deloitte Haskins & Sells Chartered Accountants (Firms Registration No.008072S) were appointed as the Statutory Auditors of the Company for a period of threeyears commencing from the conclusion of the 31st Annual General Meeting until theconclusion of the 34th Annual General Meeting. Accordingly M/s. Deloitte Haskins &Sells will be completing their present term of three years at the conclusion of theensuing Annual General Meeting. With this M/s. Deloitte Haskins & Sells will alsocomplete the period of ten years as permitted under Section 139 of the Companies Act 2013read with the Companies (Audit and Auditors) Rules 2014 and shall retire as the StatutoryAuditors of the Company at the conclusion of the ensuing Annual General Meeting.
The Board of Directors of the Company at their meeting held on May 27 2022 on therecommendation of the Audit Committee and subject to approval of the Members of theCompany at the ensuing Annual General Meeting have recommended the appointment of M/s.SRBC & CO LLP Chartered Accountants (Firms Registration No. 324982E/E300003) as theStatutory Auditors of the Company for a period of five years from the conclusion of the34th Annual General Meeting till the conclusion of 39th Annual General Meeting.
M/s. SRBC & CO LLP is a part of S.R.Batliboi & Affiliates network of auditfirms which are primarily engaged in providing audit and related assurance services toits clients.
The Company has received written consent from M/s. SRBC & CO LLP to the saidappointment and a certificate that they satisfy the criteria provided under Section 141 ofthe Companies Act 2013 and that the appointment if made shall be in accordance with theapplicable provisions of the Companies Act 2013 and rules framed thereunder. Furtherthey have confirmed that they hold a valid certificate issued by the Peer Review Board ofthe Institute of Chartered Accountants of India (ICAI) as required under the SEBI ListingRegulations.
The Auditors have issued an unmodified opinion on the Financial Statements for thefinancial year ended March 312022. The Auditors Report does not contain anyqualification reservation or adverse remark.
SECRETARIAL AUDITORS AND SECRETARIAL AUDIT REPORT
The Board had appointed M/s.V.Sreedharan and Associates Company Secretaries to carryout the Secretarial Audit under the provisions of section 204 of the Company's Act 2013for the financial year ended March 31 2022. The Report given by the Secretarial Auditorsis annexed to this Report as Annexure B. The secretarial Audit Report does not contain anyqualification reservation or adverse remark.
REPORTING OF FRAUD
There was no instance of fraud during the year under review which required theStatutory Auditors to report under section 143(12) of the Companies Act 2013.
COMPLIANCE WITH SECRETARIAL STANDARDS
The Company has complied with the applicable secretarial standards issued by theInstitute of Company Secretaries of India.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
The Company has formulated a Policy on Corporate Social Responsibility and hasconstituted a CSR Committee as required under the Companies Act 2013 for implementingvarious CSR activities. Details on Composition of the CSR Committee and Terms of Referenceare provided in Corporate Governance Report.
In terms of the provisions of Section 135 of the Companies Act 2013 and the Companies(Corporate Social Responsibility Policy) Rules 2014 your Company has during the yearunder review spent an amount of Rs.13 lakhs on CSR activities which is 2% of the averagenet profits of your Company during the three preceding financial years. The Companysfocus on CSR activities is pre-dominantly in the areas of Education and health.
The Annual Report on CSR activities as required under the Companies (Corporate SocialResponsibility) Rules 2014 is annexed to this Report as Annexure C.
CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION
A. Conservation of Energy
During the year your company continued its focus on various energy conservationmeasures. Metal allied lamps at warehouse were replaced with LED lights to reduce powerconsumption resulting in saving of 439 Kwh per month.
During the year the following developmental activities were carried out by theCompany:
New Design of Fiber Cable Construction to meet upcoming customer requirement fordifferent applications.
Introduced new Copper Panels for both shielded and unshielded solutions.
Data Storage was moved to Cloud Base from the current practice of manual back upfor data security and quick recovery of data.
IT infrastructure strengthened against ransomwares and loss of data.
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 pertaining to remuneration and otherdetails 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 isannexed to this Report as Annexure D.
PARTICULARS OF EMPLOYEES
The information on employee particulars as required under section 197(12) of theCompanies Act 2013 read with Rules 5(2) and 5(3) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules2014 forms part of this report. However interms of Section 136 of the Companies Act 2013 the Annual Report and FinancialStatements are being sent to the Members of the Company and others entitled theretoexcluding the aforesaid information. The said information is available for inspection bythe Members of the Company at the Registered Office of the Company during business hourson working days of the Company up to the date of the ensuing Annual General Meeting. AnyMember interested in obtaining a copy of the said statement may write to the CompanySecretary at the address of the Registered Office of the Company.
TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND
Pursuant to the provisions of Section 124 of the Companies Act 2013 and the InvestorEducation and Protection Fund Authority (Accounting Audit Transfer and Refund) Rules2016 as amended ("IEPF Rules") the amount of dividend remaining unpaid orunclaimed for a period of seven years from the due date is required to be transferred bythe Company to the Investor Education and Protection Fund ("IEPF") establishedby the Central Government. The Company had accordingly transferred an amount of Rs.150378/- being the unpaid and unclaimed dividend amount pertaining to the financial yearended March 312014 during the financial year 2021-22 to the Investor Education andProtection Fund.
Pursuant to the provisions of the IEPF Rules all shares on which dividend has not beenpaid or claimed for seven consecutive years is required to be transferred to thedesignated Demat Account of the IEPF Authority after complying with the procedure laiddown under the IEPF Rules. The Company in compliance with the IEPF Rules has transferred1406 equity shares belonging to 13 shareholders underlying the unclaimed dividends to theDemat Account of the IEPF Authority.
FOREIGN EXCHANGE EARNINGS AND OUTFLOW
During the year under review your Company has earned Foreign Exchange of Rs.100.05lakhs and the Foreign Exchange outflow was Nil.
The Annual Return as required under Section 92 and section 134 of the Companies Act2013 read with Rule 12 of the Companies (Management and Administration) Rules 2014 isavailable on the website of the Company at www.adckcl.com/ investor relations/AnnualReports.
MATERIAL CHANGES AND COMMITMENTS BETWEEN END OF FINANCIAL YEAR AND DATE OF THE REPORT
There were no material changes and commitments affecting the financial position of theCompany which have occurred between the end of financial year to which the financialstatements relate and the date of this Report.
WEBSITE OF THE COMPANY
The Company maintains a website www.adckcl. com where information related to theCompany are provided.
During the year under review the Company has not accepted any deposit covered underChapter V of the Companies Act 2013 and as such no amount on account of principal orinterest on deposits was outstanding as on the date of the Balance Sheet.
COST RECORDS AND COST AUDIT
Maintenance of cost records and requirement of cost audit as prescribed under theprovisions of Section 148(1) of the Companies Act 2013 are not applicable to the businessactivities carried out by the Company.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURT
There have been no significant and material orders passed by the Regulators or Courtsor Tribunals impacting the going concern status and the Companys operations.
INSOLVENCY AND BANKRUPTCY CODE 2016
During the financial year neither any application has been made nor any proceedingswere initiated against the Company under the Insolvency and Bankruptcy Code 2016.
SETTLEMENT WITH BANKS OR FINANCIAL INSTITUTION
During the financial year there was no instance of one-time settlement with any bankor financial institution.
No disclosure or reporting is made with respect to the following items as there wereno transactions during the financial year:
a. Issue of equity shares with differential voting rights as to dividend voting orotherwise.
b. Issue of shares (including sweat equity shares) to employees of the Company underany scheme.
c. Raising of funds through preferential allotment or qualified institutions placement.
Your Directors place on record their appreciation to every employee of the Company fortheir hard work dedication and commitment during the year. Your Directors also thank thecustomers channel partners distributors vendors and bankers for their support andco-operation during the year. Your Directors would also like to acknowledge the valuablesupport of the Promoters of the Company during the year.
|For and on behalf of the Board of Directors || |
|S.Devarajan ||J.N.Mylaraiah |
|Chairman ||Managing Director |
|Place: Bangalore || |
|Date: May 27 2022 || |