The Directors of your company are pleased to present the 32nd Annual Report togetherwith the Audited Financial Statement of accounts for the Financial Year ended March 312019.
The highlights of the performance of subsidiary companies and their contribution to theoverall performance of the Company for the financial year are appended herewith.
The financial performance of the Company for the financial year ended March 31 2019is summarized below:
| || ||(Rs. In Lakhs) |
|Particulars ||F.Y. ended 2018-19 ||F.Y. ended 2017-18 |
|Revenue from Operations ||52872.84 ||58939.15 |
|Other Income ||742.32 ||446.56 |
|Profit before Interest Depreciation Amortization Exceptional Items & Tax ||9577.10 ||7441.54 |
|Depreciation/ Amortization Expenses/Impairment ||2446.39 ||2119.38 |
|Profit before Interest Amortization Exceptional Items & Tax ||7130.71 ||5322.16 |
|Finance Cost ||2837.89 ||1792.25 |
|Profit before Exceptional items & Tax ||4292.82 ||3529.91 |
|Exceptional Income/(Expenses) ||363.43 ||(50.11) |
|Profit before Tax ||4656.25 ||3479.80 |
|Income Tax ||1363.04 ||1043.38 |
|Deferred Tax (Including MAT utilisation) ||479.62 ||158.42 |
|Adjustment of tax relating to earlier periods ||- ||(2.71) |
|Profit after Tax (1) ||2813.59 ||2280.71 |
|Total Comprehensive Income (2) ||(6.71) ||1.82 |
|Total (1+2) ||2806.88 ||2282.53 |
|Balance profit brought forward from previous year ||5760.14 ||3477.61 |
|Less: Transfer to Reserves ||- ||- |
|Less: Dividend paid on Equity Shares ||488.09 ||- |
|Less: Dividend Distribution Tax ||100.33 || |
|Surplus carried to Balance sheet ||7978.60 ||5760.14 |
Financial year 2018-19 closed with revenue of Rs 52872.84 lakhs EBIDTA of Rs.9577.10 lakhs and PAT of Rs 2813.59 lakhs. The manufacturing business earned revenues ofRs. 47516.98 lakhs.
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 capacity expansionsthat took place in the recent past. With regards to that Management holds the view thatwith the gamut of the increased capacity the company also require enhanced workingcapital to support its expanded operations.
Optical Fibre/Optical Fibre Cable/FRP Rod
Telecommunication is anticipated to present promising growth prospects due to growingadoption of the technology in communication and data transmission services. Fiber opticsis enabling high-speed data transfer services in both small and long-range communications.Furthermore increasing cloud-based applications audio-video services andVideo-on-Demand (VoD) services will stimulate the demand.
We expect major carriers in China the US and other countries to launch commercial 5Gnetworks from 2020. It can be projected that Chinese carriers' mobile-network capex torise significantly from 2018 to 2023 with above a 14% CAGR. Therefore we see 5G-relatedcapex as a percentage of total mobile network capex rising significantly over this period.Telecom infrastructure companies including Optical Fibre players and their supply chainsshould benefit first followed by endpoint device-related companies and over-the-topapplication players.
Services Division: 1 STOP AKSH
Governments around the world are pushing hard to deploy information and technology intheir operations. For the purpose of making the reach of the Government efficient vastand responsive e-Governance is breaking all the stereotypes. India is progressing in thefield of e-Governance. From making use of Information and Communications Technology (ICT)for elections census computerizing all the government offices to digital lockerse-kranthi portals and e-seva kendras the new India has paved its way in the world ofe-Governance.
Talking about the scope of e-governance in the country G2C is the most basic pillar ofe-governance. In this domain for the purpose of promoting good governance advanced publicutility services can be introduced & improved. e-Citizenship e-Transportatione-Health e-Education e-Taxation are much more are some prime attractions under thissegment.
A dedicated and much-insightful G2G relationship is meant for a better communicationand exchange of sensitive information between the Central and the State Government. Inthis segment e-Administration e-Police e-Courts are some of the attractions. Also thegovernment is trying to provide land record copies which is further making the landresource process simpler & transparent. Also election commission of India is alsobringing reforms for the purpose of advancing electoral rolls and keeping them updated ona regular basis for good governance.
Given the current high level of political commitment India is likely to soon emerge asa leader in E-Governance. In spite of encountering many demographic challenges India hassuccessfully implemented e-governance projects. Effective promotion schemes by the Indiangovernment will also be a boosting factor to provide quality services to their citizenswhich means there is huge potential for the development of e-governance in varioussectors. As per a recent study 81% citizens report reduction in corruption 95% find costof e-governance affordable and 78% favors fast delivery of services. Therefore it can beassumed that e-Governance is the key to the Good Governance for rapidly developing economylike India to minimize corruption provide efficient effective and quality services toits citizens.
The Company had initiated setting-up Optical Fibre (OF) manufacturing facility in JebelAli Free Tarde Zone (JAFZA) UAE with capacity of 4 (Four) Million fibre Km Per annum. Theplant is expected to get operational within the current financial year.
As on March 31 2019 Company has One Indian Wholly Owned Subsidiary namely AkshComposites Private Limited and three Overseas Wholly Owned Subsidiaries namely AOL-FZE'incorporated in SAIF Zone Sharjah (U.A.E) (Material Subsidiary) AOL Technologies FZEincorporated in Jafza UAE and Aksh Technologies (Mauritius) Limited incorporated inMauritius.
The Company also has one Step Down Subsidiary namely AOL Composites (Jiangsu) Co. Ltdincorporated in China (Subsidiary of AOL-FZE UAE).
A report on highlights of performance and their contribution to the overall performanceof the Company as per Companies Act 2013 is provided in the prescribed format Form AOC-1is annexed herewith as Annexure -I. The policy for determining material subsidiaries asapproved may be accessed on the company's website at the link: http://www.akshoptifibre.com/corporate-governance.php.
LOANS GUARANTEES OR INVESTMENTS
Details of Loans Guarantees and Investments covered under the provisions of Section186 of the Companies Act 2013 are given in the Notes to Financial Statements.
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
All Related Party Transactions entered during the year were on arm's length basis. Nomaterial Related Party Transactions (transaction(s) exceeding ten percent of the annualconsolidated turnover of the Company as per last audited financial statements) wereentered during the year by the Company and considering wholly owned subsidiaries areexempt for the purpose of Section 188(1) of the Act. Accordingly disclosure of RelatedParty Transactions as required under section 134(3)(h) of the Companies Act 2013 in FormAOC-2 is not applicable. However all the transaction entered by the company with relatedparties are provided under Note No. 34C of the financial statement of the Company.
As on March 31 2019 the Board of your Company consisted of 6 Directors consisting of1 Promoter-Chairman 1 Managing Director 3 Independent Directors (including 1 WomanDirector) and 1 Non-Executive Non Independent Director.
MEETINGS OF THE DIRECTORS
The Company had 4 (Four) Board Meetings during the financial year under review thedetails of which are given in the Corporate Governance Report that forms part of thisAnnual Report. The intervening gap between any two meetings was within the periodprescribed by the Companies Act 2013.
APPOINTMENTS / RESIGNATIONS FROM THE BOARD / KMPS
1. During the year 2018-19 Mr. Satyendra Gupta Deputy Managing Director (DIN:00035141) was appointed as Managing Director of the Company w.e.f February 12 2019 for aperiod of 3 years till February 11 2022 subject to the approval of the Shareholders inthe ensuing Annual General Meeting.
2. After the closure of financial year 2018-19 Mr. Amrit Nath Independent Director(DIN: 00431866) has resigned from the directorship of the Company w.e.f. July 222019 inview of the order passed by SEBI on June 28 2019 in the matter of the GDR issue completedby the Company in the year 2010. Mr. Amrit Nath further confirmed that there is no othermaterial reason for his resignation.
3. Dr. Kailash S. Choudhari Director (DIN: 00023824) is due for retirement at theforthcoming AGM and has offered himself for reappointment.
There were no other appointments/ resignations of Directors/KMP.
DECLARATION FROM INDEPENDENT DIRECTORS
The Company has received declarations from all the Independent Directors of the Companyconfirming:
1. that they meet with the criteria of independence as prescribed both undersub-section (6) of Section 149 of Companies Act 2013 and Regulation 16 (1) (b) of theSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 and any amendmentthereof.
2. that they have complied with the Code of Conduct for Independent Directorsprescribed in Schedule IV to the Companies Act 2013.
MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION BETWEEN THE END OFFINANCIAL YEAR AND DATE OF REPORT
There are no material changes occurred between the end of financial year and the dateof Director's Report.
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 theDirectors the Board and Board level Committees was carried out are given in detail inthe report on Corporate Governance which forms part of this Annual Report. The Nomination& remuneration policy may be accessed on the Company's website at the link: http://www.akshoptifibre.com/corporate-governance.php
The Report on Corporate Governance along with the Certificate from the PracitisingCompany Secretary certifying the compliance of Corporate Governance enumerated inRegulation 34(3) and Schedule V of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 is included in this 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.
Importance of tree plantation has been stressed upon time and again. The need for treeplantation has become even greater these days because of the growing pollution in theenvironment. The only way to fight it is by planting more trees.
Aksh Optifibre Limited with the continued cooperation & active support of BMA& member industries & various social organizations has so far planted 110500plants under Clean & Green' drive in Bhiwadi Industrial Area from year2014-2019. This drive inspired by the vision of Dr. Kailash S. Choudhari-Chairman AkshOptifibre Limited was initiated in year 2014. This dream was shared by BMA and vehementlysupported by its member industries many social institutions like Lions Club Rotary ClubRotary Shakti Indian Medical Association many Govt. & Private Schools & socialactivists. Objective of the drive was to touch the figure of 100000 trees in five yearsin Bhiwadi to neutralize the impact of industrial pollution and finally this year Companyhas crossed the target. In order to improve the ecological balance in BhiwadiIndustrial Area' Aksh continued its plantation drive Upvan'. Aksh planted more than22693 saplings during the financial year 2018-19.
Under Muskaan which is a program to support Government Schools situated nearby BhiwadiIndustrial Area. The main objective under this drive is to bring a smile on children'sface. The drive aims to continuously improve the basic infrastructure of the Govt. Schoolsespecially for girl child and those who are not able to join school due to lack of basicamenities like toilet drinking water facility and hygienic environment.
Working for women empowerment under its CSR initiatives Aksh' in associationwith Singer India Rotary Club of Bhiwadi and USCKM School is running a Skill DevelopmentCenter at UCSKM School Bhiwadi. This Skill Development Center is providing three monthscertificate course and six months diploma course in stitching & tailoring to promotewomen entrepreneurship. Presently 70 students are undergoing six months diploma course institching & tailoring and 79 students have been awarded diploma certificate till date.
Under Aksh CSR initiative ShikshaHamaraSwabhiman the Company withcontinuous & dedicated aim of improving basic infrastructure of its adopted Govt.Senior Secondary School Reengus Govt. Girls Senior Secondary School Reengus Govt.Upper Primary School Parsarampura and Govt. Senior Secondary School Sargoth have takeninitiatives since 2015 which includes roof-repairs plasters electricity fitting colourpainting constructions of tin shed for morning prayer assembly floor constructionconstruction of Boundary Wall and other repairing work educational painting and otherpainting work Plantation installation of windows and doors fan establishment of SmartClasses in school classroom RO and chilled water facility for students etc.
The statutory disclosures and an Annual Report on CSR activities is annexed herewithmarked as Annexure -II.
The CSR policy may be accessed on the Company's website at the link:http://www.akshoptifibre.com/corporate-governance.php
(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. None of the employees listed in theAnnexure are related to any Director of the 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 -III.
A robust governance structure has been developed across the Organisation. The developedRisk Management framework identifies and assesses strategic operational financial andcompliance risks and monitors the -effectiveness and efficiency of risk mitigation andcontrol measures. The major risks identified by the businesses and functions aresystematically addressed through mitigating actions on a continual basis.
The responsibility of tracking and monitoring the key risks of the divisionperiodically and implementing suitable mitigation plans proactively is with the seniorexecutives of various functional units. These risk owners are expected to avoid any unduedeviations or adverse events and ultimately help in creating value for the business.
During the year Company undertook multiple initiatives to strengthen widen and deepenthe scope and coverage of the risk framework across the Company.
Aksh was rated BBB- by ICRA Limited (outlook Stable) during the financial year 2017-18.There has been no change in ratings during the current financial year 2018-19.
After the closure of financial year improved Credit Rating was accepted on April 272019 from CARE and Aksh was rated as BBB (Outlook Stable). Further on May 27 2019 CAREissued revised Credit Rating and rated Aksh as D. The reason for decline in rating wasongoing delays in debt servicing along with ongoing devolvement of Letter of Credit. Thedelays were on account of stressed liquidity position primarily due to delayed realizationfrom government customers leading to cash flow mismatches.
CONSOLIDATED FINANCIAL STATEMENTS
As provided in the Accounting Standard issued by the Institute of Chartered Accountantsof India (ICAI) on consolidated financial statements the consolidated financialstatements are attached which form part of the Annual Report.
At the Annual General Meeting held on December 26 2017 pursuant to the provision ofthe Companies Act and rules made thereunder M/s BGG & Associates CharteredAccountants New Delhi (FRN: 016874N) were appointed as Statutory Auditors of the Companyto hold office till the conclusion of the 35th Annual General Meeting.
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 had appointed M/s Sanjay Gupta & Associates Cost Auditors of theCompany for the Financial Year 2018-19 and further re-appointed for the Financial Year2019-20.
COST AUDIT COMPLIANCE
Pursuant to Sec. 148 of the Companies Act 2013 read with Companies (Cost Audit) Rules2014 including any statutory modifications thereof the cost audit report for financialyear ended March 31 2019 would be filed with the Central Government within the prescribedtime.
The Company had appointed M/s Himanshu Sharma & Associates Company Secretaries toconduct the Secretarial Audit for the Financial Year 2018-19. The Secretarial Audit Reportfor the financial year ended March 31 2019 is annexed herewith marked as Annexure - IV tothis Report. Further the Company had re-appointed M/s Himanshu Sharma & AssociatesCompany Secretaries to conduct the Secretarial Audit for the financial year 2019-20.
The Company had appointed M/s S C Kwatra & Associates as Internal Auditors of theCompany for the Financial Year 2018-19 and further reappointed for the Financial Year2019-20.
SECRETARIAL STANDARD OF ICSI
The Company is in compliance with all the mandatory Secretarial Standards issued by TheInstitute of Company Secretaries of India.
The Company's manufacturing facilities continue to remain certified by independent andreputed external agencies as being compliant as well as aligned with the National andInternational standards for The Telecom Quality Management System EnvironmentalManagement System Complaint Handling Management System and Occupational Health &Safety Management System i.e. TL 9000:2016 ISO 9001:2015 ISO 14001:2015 ISO 10002:2014and ISO 45001:2018 respectively.
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 thelocations of Company.
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 inAnnexure V to this report.
EXTRACT OF ANNUAL RETURN
Extract of Annual Return of the Company is annexed herewith as Annexure- VI to thisReport.
The Equity Shares of the Company continue to be listed at BSE Ltd and The NationalStock Exchange Ltd. The Listing Fee has been paid to both of the stock exchanges.
During the year under review no significant and material orders have been passed bythe regulators or courts or tribunals impacting the going concern status and Company'soperations in future.
However after the closure of the financial year Company has received an Order No.WTM/AB/EFD-1/DRA-1/11/2019-20 dated June 28 2019 passed by Whole Time Member ofSecurities and Exchange Board of India Pursuant to the said SEBI Order:
1. The Company and Dr. Kailash S. Choudhari are restrained from accessing thesecurities market and further prohibited from buying selling or otherwise dealing insecurities including units of mutual funds directly or indirectly or being associatedwith the securities market in any manner for a period of five years from the date of theorder.
2. The other Noticees i.e. Mr. P.F. Sundesha Mr. B.R. Rakhecha Mr. Narendra Kumbhatand Mr. Arun Sood are prohibited from buying selling or otherwise dealing in securitiesincluding units of mutual funds directly or indirectly or being associated with thesecurities market in any manner whatsoever for a period of six months from the date ofthe order.
The Company and Directors have filed an appeal in Hon'ble Securities AppellateTribunal Mumbai for challenging the above said order.
Disclosures under the Companies Act 2013 Rules thereunder and Secretarial Standards
i. Your Company has not accepted any deposits covered under chapter V of the CompaniesAct 2013;
ii. Your Company has not issued equity shares with differential voting rights dividendor otherwise;
iii. Your Company has not issued shares (including sweat equity shares) to employees ofthe company under the ESOS scheme or otherwise;
iv. During the year the Statutory auditors the secretarial auditors and cost auditorshave not reported any fraud under Section 143(12) of the Companies Act 2013 and theCompanies (Audit and Auditors) Rules 2014.
v. During the previous Financial Year the Company had passed the special resolutionfor issuance of warrants convertible into equity shares on Preferential basis to thePromoters of the Company however the same was not subscribed within the time frameprescribed under the law.
vi There are no qualification in the Reports provided by the Auditors for the financialyear ended March 31 2019.
vii. The following information is given in the Corporate Governance Report forming partof this Report:
i) The performance evaluation of the Board the Committees of the Board Chairpersonand the individual Directors;
ii) The Composition of Audit Committee; and
iii) The details of establishment of Vigil Mechanism.
Pursuant to the provisions of Sexual Harassment of Women in workplace (PreventionProhibition and Redressal) Act 2013 the Company has duly constituted the InternalComplaints Committee and Your Directors further state that during the year under reviewthere were no complaints/cases filed/pending pursuant to the said Act.
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 towards overall growth 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 healthy and fruitfulrelationship.
| ||for Aksh Optifibre Limited |
| ||Dr. Kailash S. Choudhari |
|Date: August 8 2019 ||Chairman |
|Place: New Delhi ||DIN: 00023824 |