TO THE SHAREHOLDERS
Your Directors have pleasure in presenting their Twenty Sixth Annual Report togetherwith the Audited Financial Statements of the Company for the year ended March 31 2018.
SUMMARY OF FINANCIAL RESULTS & STATE OF COMPANY'S AFFAIRS
|Description ||Amount (Rs in lakhs) |
| ||2017-18 ||2016-17 |
|Revenue from Operations ||32868.69 ||22952.31 |
|Other Income ||130.53 ||316.41 |
|Earnings before Finance Costs Depreciation and Tax ||3583.76 ||1669.74 |
|Finance Costs ||387.90 ||347.95 |
|Profit before Depreciation and Tax ||3195.86 ||1321.79 |
|Depreciation and Amortization ||794.07 ||772.77 |
|Profit before Tax ||2401.79 ||549.02 |
|Tax Expenses / (Credit) ||788.43 ||215.57 |
|Net Profit for the year ||1613.36 ||333.45 |
Your Company has adopted Indian Accounting Standards (Ind AS) with effect from April 12017 (transition date being April 1 2016). Accordingly the financial statements for theyear ended March 31 2018 have been prepared in accordance with Ind AS in terms of theprovisions of Section 133 of the Companies Act 2013 read with the Companies (IndianAccounting Standards) Rules 2015 as amended from time to time. Previous year figureshave been restated as per Ind AS to make them comparable.
GENERAL & CORPORATE MATTERS
During the year under review your Company achieved Gross Revenue from operations of Rs32868.69 lakhs as compared to Rs 22952.31 lakhs in the previous year (an increase of about43.20%). The increase in revenue was mainly due to robust orders received from variouscustomers. The Profit before Depreciation and Tax for the year stood at Rs 3195.86 lakhsas compared to Rs 1321.79 lakhs in the previous year. The increase in profit was due toexcellent order position enjoyed by the company during the year under review. The Globaloptical fibre cable consumption has gone up to 493 million fibre-km in 2017 which is aclear increase of 14.9 % from the previous year. The overall growth in the global opticalfibre market coupled with increasing Indian market demand primarily due to huge demandfrom Government driven rural broadband project and other Greenfield network expansionprojects from private telecom players in the country. As a matter of fact the Fibredemand in India mainly driven by the migration of 3G to 4G telecom network which warrantshuge volumes of fibre cables to be deployed in backbone access and premise network nodes.This even extends to the fiberisation requirements to cell sites due to heavy data drivennetworks with the high bandwidth demands. The spurt in overall growth in the requirementof optical fibre cables is not only in the domestic segment but also in the overseasmarket due to robust network roll-out by leading telcos all across the world. Almost onethird of the revenue came from the export segment for the company which clearlydemonstrates the quality culture traditionally being nourished by the company on a longterm basis.
DIVIDEND AND RESERVES
After considering the Company's profitability free cash fl ow and overall financialperformance the Board of Directors of the Company is pleased to recommend a Dividend ofRs 1/- (previous year Rs Nil) per equity share of face value Rs 10/- each (i.e. 10%) forthe financial year ended on March 31 2018. The distribution of Dividend on equity sharesif approved by the Members at the ensuing Annual General Meeting will result in payout ofRs 300.00 lakhs excluding Tax on Dividend and Surcharge/Education Cess thereon.
The paid-up Equity Share Capital of the Company as at March 31 2018 stood at Rs3000.00 lakhs. During the year under review the Company has neither issued shares withdifferential rights as to dividend voting or otherwise nor has granted stock options orsweat equity under any scheme. Further none of the Directors of the Company holdsinvestments convertible into equity shares of the Company as on March 31 2018.
Your Company has not accepted any public deposits during the year within the meaning ofSection(s) 73 to 76 of the Companies Act 2013 and the Companies (Acceptance of Deposits)Rules 2014 and as such no amount on account of principal or interest on public depositswas outstanding as on the date of the Balance Sheet.
Your Company continued to optimise bank borrowings during the year by focusing on cashfl ows and working capital management. By availing alternate funding options like issuanceof Buyer's Credit and Supplier's Credit your Company ensured efficiency in its borrowingcosts.
Pursuant to Regulation 34(3) read with Para C of Schedule V of SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 the Management Discussion& Analysis Report on Corporate Governance and a certification by the Chief ExecutiveOfficer (CEO) confirming compliance by all the Board Members and Senior ManagementPersonnel with Company's Code of Conduct and Auditors' Certificate regarding compliance ofconditions of Corporate Governance are made a part of the Annual Report.
CORPORATE SOCIAL RESPONSIBILITY INITIATIVES
As a part of its initiative under Corporate Social Responsibility (CSR) the Companyhas undertaken CSR activities in the areas of (i) Animal welfare and (ii) Educationpromoting employment enhancing vocation skills especially among children and livelihoodenhancement projects. These activities are largely in accordance with Schedule VII of theCompanies Act 2013 read with Companies (Corporate Social Responsibility Policy) Rules2014 and the Company's CSR Policy. The Annual Report on CSR activities is given inAnnexure-I which is attached hereto and forms a part of the Directors' Report. TheCorporate Social Responsibility Policy of the Company is available on the website of theCompany i.e. www.birlacable.com.
DIRECTORS' RESPONSIBILITY STATEMENT
To the best of their knowledge and belief and according to the information andexplanations obtained by them your Directors make the following statements in terms ofSection 134(3)(c) of the Companies Act 2013: (a) that in the preparation of the annualfinancial statements for the year ended March 31 2018 the applicable accountingstandards read with requirements set out under Schedule III to the Companies Act 2013have been followed and there are no material departures from the same; (b) that suchaccounting policies as mentioned in Notes to the Financial Statements have been selectedand applied consistently and judgement and estimates have been made that are reasonableand prudent so as to give a true and fair view of the state of affairs of the Company asat March 31 2018 and the profit of the Company for the year ended on that date. TheCompany adopted Indian Accounting Standards (Ind AS) effective from April 1 2017 withtransition date being April 1 2016 and accordingly the transition was carried out andapplied in the accounting policies in accordance with the applicable Ind AS as stated inthe Notes to Financial Statements. The impact of transition has been recorded in openingreserves as at April 1 2016 and the periods presented have been restated accordingly; (c)that proper and sufficient care has been taken for the maintenance of adequate accountingrecords in accordance with the provisions of Companies Act 2013 for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities; (d)that the annual financial statements have been prepared on a going concern basis; (e) thatproper internal financial controls were in place and that the financial controls wereadequate and were operating effectively; and (f) that system to ensure compliance with theprovisions of all applicable laws were in place and were adequate and operatingeffectively.
RISK MANAGEMENT AND ADEQUACY OF INTERNAL CONTROL SYSTEMS
The Company's system of financial and compliance controls with reference to thefinancial statements and risk management is embedded in the business process by which theCompany pursues its objectives. Additionally the Audit Committee and the Board ofDirectors assess the implementation of risk management and risk mitigation measuresthrough their review of potential risks which could negatively impact the operations theproposed budget and plan the Company's strategic framework besides inherent risksassociated with the products/ goods dealt with by the Company. Your Company's approach toaddress business risks is comprehensive and includes periodic review of such risks and aframework for mitigating and reporting mechanism of such risks. In the view of the Boardof Directors there are no material risks which may threaten the existence of theCompany.
The Board of Directors of the Company has laid down the policies and procedures forinternal financial controls to be followed by the Company for ensuring the orderly andefficient conduct of its business in order to achieve the strategic operational andother objectives over a long period and that its exposure to risks are within acceptablelimits decided by the Board. In addition the policies and procedures have been designedwith an intent to ensure safeguarding of Company's assets the prevention and detection offrauds and errors the accuracy in completeness of the accounting records and the timelypreparation of reliable financial information.
The management is committed to ensure effective internal financial controlsenvironment which provides assurance on the efficiency of its business operations coupledwith adherence to its established policies safety/security of its assets besides orderlyand legitimate conduct of Company's business in the circumstances which may reasonably beforeseen. The Company has defined organisation structure authority levels delegatedpowers internal procedures rules and guidelines for conducting business transactions.The Company's system and process relating to internal controls and procedures forfinancial reporting have been designed to provide reasonable assurance regarding thereliability of financial reporting and the preparation of financial statements forexternal purposes with the Companies Act 2013 Companies (Indian Accounting Standards)Rules 2015 and other relevant provisions of the Act and rules made thereunder and allother applicable regulatory/statutory guidelines etc. for disclosures with reference tofinancial statements. Your Company's internal control systems are supplemented by anextensive program of internal audit by an independent firm of Chartered Accountants.Internal audits are conducted at regular intervals and a summary of the observations andrecommendations of such audits are placed before the Audit Committee. The InternalAuditors the Audit Committee as well as the Board of Directors conduct an evaluation ofthe adequacy and effectiveness of the system of internal financial controls system on anongoing basis.
INDUSTRIAL RELATIONS AND SAFETY
Industrial relations remained cordial throughout the year. Your Directors recognize andappreciate the sincere and hard work loyalty dedicated efforts and contribution of allthe employees in the growth and performance of the Company during the year. The Companycontinues to accord a very high priority to both industrial safety and environmentalprotection and these are ongoing process at the Company's plant and facilities to maintainhigh awareness levels. The Company is conscious of the importance of environmentally cleanand safe operations so as to ensure safety of all concerned and compliance of applicableenvironmental regulations. The Company as a policy re-evaluates safety standards andpractices from time to time in order to raise the bar of safety standards for its peopleas well as users and customers.
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 IS/ISO 9001:2008 TL9000R5.5/5.0H Environmental ManagementStandards IS/ISO 14001:2004 and Occupational Health and Safety Management System OHSAS18001:2007. During the year the audits for these Certifications established continuousimprovement in performance against these standards. During the year under review theCompany successfully obtained certification under Information Security Management SystemISO/IEC 27001:2013 Standards from Bureau Veritas for design development and manufactureof optical fibre cables ribbon type optical fibre cables polyethylene insulated jellyfilled telecommunication cables copper communication cables insulated wire & cableselectric conductors supply of accessories for optical fibre cables & copper cablesand support processes.
In accordance with the provisions of Section 152 of the Companies Act 2013 and theCompany's Articles of Association Shri D.R.Bansal [DIN: 00050612] Director shall retireby rotation at the ensuing Annual General Meeting and being eligible has offered himselffor re-appointment as a Director of the Company. The Board recommends his re-appointmentfor the consideration of the members of the Company at the ensuing Annual General Meeting.
The brief resume and other details of Director seeking re-appointment as required underRegulation 36(3) of the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 and Secretarial Standard on General Meetings (SS-2) are given in theNotice of the ensuing Annual General Meeting which is being sent to the shareholdersalong with Annual Report.
During the year under review there was no change in the Board of Directors of theCompany.
KEY MANAGERIAL PERSONNEL
Shri R Sridharan Manager and Chief Executive Officer and Shri Somesh Laddha GeneralManager (Accounts) & Secretary are the Key Managerial Personnel of the Company. Duringthe year under review there was no change in the Key Managerial Personnel of the Company.
DECLARATION BY INDEPENDENT DIRECTORS
All Independent Directors of your Company viz.Shri R.C.Tapuriah Dr.AravindSrinivasanShri Arun Kishore Shri K.Raghuraman and Smt. Archana Capoor have individuallyand severally given a declaration pursuant to Section 149(7) of the Companies Act 2013affirming compliance to the criteria of Independence as laid down under Section 149(6) ofthe Companies Act 2013. Based on the declaration(s) of Independent Directors the Boardof Directors recorded its opinion that all Independent Directors are independent of theManagement and have fulfilled the conditions as specified in the Companies Act 2013rules made thereunder as well as applicable provisions of the SEBI (Listing Obligationsand Disclosure Requirements) Regulations 2015.
MEETINGS OF BOARD AND COMPOSITION OF COMMITTEES
During the year under review the Board met six times viz. May 16 2017 August 082017 September 27 2017 November 14 2017 February 06 2018 and March 09 2018.
As required under Section 177(8) read with Section 134(3) of the Companies Act 2013and the rules framed thereunder the composition and meetings of the Audit Committee werein line with the provisions of the Companies Act 2013 and SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 details of which alongwith composition numberof meetings of all other Board Committees held during the year under review and attendanceat the meetings are provided in the Report on Corporate Governance forming a part of theAnnual Report. During the year under review all the recommendations of the AuditCommittee were accepted by the Board of Directors.
PERFORMANCE EVALUATION OF BOARD COMMITTEES AND DIRECTORS
Pursuant to the Provisions of the Companies Act 2013 and the SEBI (Listing Obligationsand Disclosure Requirements) Regulations 2015 and the Guidance Note on Board evaluationissued by SEBI the Board of Directors of the Company carried out the formal annualevaluation of its own performance and that of its Committees and individual Directorsinteralia to assess the skill set and contribution that are desired recognising thatcompetencies and experiences evolves over time. The Directors were individually evaluatedbased on personal interaction to ascertain feedback on well defined parameters whichinteralia comprised of level of engagement and their contribution to strategic planningand other criteria based on performance and personal attributes of the Directors. Duringthe process of evaluation the Board of Directors also considered the criteria forevaluation of performance of Independent Directors and the Board of Directors formulatedby the Nomination and Remuneration Committee. The Board of Directors also reviewed anddiscussed the annual performance evaluation of Directors carried out by the Nomination andRemuneration Committee and review of the performance of the Chairman (taking into accountthe views of non-executive directors) the Non-independent Directors and the Board as awhole carried out by the Independent Directors. A statement indicating the manner inwhich formal annual evaluation has been made by the Board of Directors is given in theReport on Corporate Governance which forms a part of the Annual Report.
SELECTION AND APPOINTMENT OF DIRECTORS AND THEIR REMUNERATION
The Board of Directors in consonance with the recommendation of Nomination andRemuneration Committee (NRC) has adopted a terms of reference which interalia deals withthe criteria for identification of members of the Board of Directors andselection/appointment of the Key Managerial Personnel/Senior Management Personnel of theCompany. The NRC recommends appointment of Director/appointment or re-appointment ofManager & CEO based on their qualifications expertise positive attributes andindependence in accordance with prescribed provisions of the Companies Act 2013 and rulesframed thereunder and SEBI (Listing Obligations and Disclosure Requirements) Regulations2015. The NRC in addition to ensuring diversity of race and gender also considers theimpact the appointee would have on Board's balance of professional experience backgroundview points skills and areas of expertise.
The Board of Directors in consonance with the recommendation of Nomination andRemuneration Committee has also adopted the Remuneration Policy for the members of theBoard and Executive Management. The guiding principles of the Remuneration Policy arestated in the Report on Corporate Governance which forms a part of the Annual Report.
VIGIL MECHANISM / WHISTLE BLOWER POLICY
In terms of the provisions of Section 177(9) of the Companies Act 2013 the Companyhas implemented a Vigil Mechanism which includes implementation of the Whistle BlowerPolicy to deal with instances of fraud and mis-management if any and conducting businesswith integrity including in accordance with all applicable laws and regulations. Noemployee has been denied access to the Vigilance Officer as well as Chairman of the AuditCommittee. The details of the Vigil Mechanism and Whistle Blower Policy are explained inthe Corporate Governance Report and also posted on the website of the Company.
In terms of the provisions of Section 139 of the Companies Act 2013 read with theCompanies (Audit and Auditors) Rules 2014 as amended vide the Companies (Amendment) Act2017 and the Companies (Audit and Auditors) Amendment Rules 2018 respectively Messrs JainPramod Jain & Co. Chartered Accountants (Firm Registration No. 016746 N) wereappointed as Statutory Auditors of the Company to hold office for a term of five (5) yearsuntil the conclusion of the Thirtieth Annual General Meeting of the Company to be held forthe financial year 2021-22 and their appointment is not required to be ratified each yearat Annual General Meeting of the Company. The Auditors have confirmed to the Company thatthey continue to remain eligible to hold office as the Auditors and not disqualified forbeing so appointed under the Companies Act 2013 the Chartered Accountants Act 1949 andthe rules and regulations made thereunder.
The Board of Directors has re-appointed Messrs D. Sabyasachi & Co. CostAccountants as Cost Auditors for conducting audit of the accounting records maintained bythe Company in respect of specified products of the Company covered under The Companies(Cost Records and Audit) Amendment Rules 2014 and fixed their remuneration based on therecommendation of the Audit Committee. The remuneration payable to Cost Auditors issubject to ratification by the shareholders in the ensuing Annual General Meeting of theCompany.
The Auditors' Report on the financial statements of the Company forms a part of theAnnual Report. There is no qualification reservation adverse remark disclaimer ormodified opinion in the Auditors' Report which calls for any further comments orexplanations. Further during the year under review the Auditors have not reported anymatter under Section 143(12) of the Companies Act 2013 therefore no detail is requiredto be disclosed in pursuance to Section 134(3)(ca) of the Companies Act 2013.
Pursuant to the provisions of Section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 Messrs R.K.Mishra& Associates Company Secretaries (PCS Registration no.14474) were appointed toundertake the Secretarial Audit of the Company for the year ended March 31 2018. TheReport of the Secretarial Auditor is given in Annexure-II which is attached hereto andforms a part of the Directors' Report.
No qualification or observation or other remarks have been made by Messrs R.K.Mishra& Associates in the Secretarial Audit Report which calls for any comments orexplanations.
COMPLIANCE WITH SECRETARIAL STANDARDS
The Company has proper system in place to ensure compliance with the provisions ofapplicable Secretarial Standards. During the year under review your Company has compliedwith applicable provisions of Secretarial Standard on Meetings of the Board of Directors(SS-1) and Secretarial Standard on General Meetings (SS-2) issued by the Institute ofCompany Secretaries of India.
RELATED PARTY TRANSACTIONS
All related party transactions that were entered into by the Company during thefinancial year under review were generally on arms' length basis and in the ordinarycourse of business. The disclosure of related party transactions as required under Section134(3)(h) of the Companies Act 2013 read with Rule 8 of the Companies (Accounts) Rules2014 in prescribed Form AOC-2 is given in Annexure-III which is attached hereto and formsa part of the Directors' Report. There are no material significant related partytransactions entered into by the Company with its Promoters Directors Key ManagerialPersonnel or other designated persons which may have a potential confl ict with theinterest of the Company at large.
All related party transactions are placed before the meeting(s) of Audit Committee forits approval. Prior omnibus approval of the Audit Committee is obtained on an annualbasis for a financial year for the transactions which are of a foreseen and repetitivein nature. The statement giving details of all related party transactions entered intopursuant to the omnibus approval together with relevant documents/ information are placedbefore the Audit Committee for review and updation on quarterly basis. The Company'sPolicy on materiality of Related Party Transactions and dealing with Related PartyTransactions as approved by the Board of Directors is uploaded on the Company's websiteand can be accessed at weblink: http://www.birlacable.com/pdf/RPTPolicy_BCL.pdf.
PARTICULARS OF LOANS GUARANTEES AND INVESTMENTS UNDER SECTION 186 OF THE COMPANIESACT 2013
The particulars of Loans Guarantees and Investment in pursuance to Section 186 of theCompanies Act 2013 have been disclosed in the financial statements read together withNotes annexed to and forming an integral part of the financial statements.
DISCLOSURE OF RATIO OF REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL ETC.
As required under Section 197(12) of the Companies Act 2013 read with Rule 5(1) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 theStatement of Disclosure of Remuneration and such other details as prescribed therein aregiven in Annexure-IV which is attached hereto and forms a part of the Directors' Report.
EXTRACT OF ANNUAL RETURN
An Extract of Annual Return as provided under Section 92(3) of the Companies Act 2013is given in Annexure-V which is attached hereto and forms a part of the Directors'Report.
PARTICULARS OF EMPLOYEES
Particulars of employees in accordance with the provisions of Section 197 of theCompanies Act 2013 read with Rule 5(2) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 are not given as none of the employees qualifies forsuch disclosure.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNING AND OUTGO
As required under Section 134(3)(m) of the Companies Act 2013 read with Rule 8 of theCompanies (Accounts) Rules 2014 the information on Conservation of Energy TechnologyAbsorption and Foreign Exchange Earnings and Outgo are given in Annexure-VI which isattached hereto and forms a part of the Directors' Report.
Your Directors state that no disclosure or reporting is required in respect of thefollowing items as there were no transactions or events on these items during the yearunder review: (a) the Company has neither issued shares with differential rights as todividend voting or otherwise nor has granted stock options or sweat equity under anyscheme. Further none of the Directors of the Company holds investments convertible intoequity shares of the Company as on March 31 2018.
(b) No significant or material orders were passed by the Regulators or Courts orTribunals which impact the going concern status of the Company and its operations infuture.
(c) The Company has zero tolerance towards sexual harassment at workplace and hasadopted a Policy on prevention prohibition and redressal of sexual harassment atworkplace in line with the requirements of the Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013 and Rules made thereunder. During theyear under review there were no cases filed or reported pursuant to the provisions of thesaid Act.
(d) There are no material changes or commitments affecting the financial position ofthe Company which have occurred between the end of the financial year of the Company towhich the financial statements relate and the date of this Report.
(e) No frauds were reported by Auditors in terms of Section 143(2) of the CompaniesAct 2013 and rules if any made thereunder.
The Board of Directors desires to place on record its grateful appreciation for theexcellent assistance and co-operation received from the State Government and continuedsupport extended to the Company by the bankers investors vendors esteemed customers andother business associates. Your Directors also wish to place on record their sincerethanks and infinite appreciations to all the employees of the Company for their unstintedcommitment and continued contribution in the performance of the Company.
|Yours faithfully || |
|Harsh.V.Lodha ||Chairman |
|(DIN: 00394094) || |
|D.R.Bansal || |
|(DIN: 00050612) || |
|R.C.Tapuriah || |
|(DIN: 00395997) || |
|Aravind Srinivasan || |
| ||Directors |
|(DIN: 00088037) || |
|Arun Kishore || |
|(DIN: 00177831) || |
|Archana Capoor || |
|(DIN: 01204170) || |
|New Delhi May 24 2018 || |