PUNJAB COMMUNICATIONS LIMITED
Ladies & Gentlemen,
I have immense pleasure in welcoming you to this 14th Annual General
Meeting of Punjab Communications Limited. Many of you, consequent to our
Public Issue have joined this esteemed Organisation for the first time
thereby making it a widely held Company. I extend a special welcome to you
all I sincerely thank you for the confidence reposed in the Management. The
Directors' Report & the Audited Accounts for the year ending March 31,
1995, have already been circulated to you and, with your permission, I take
them as read. Before I take up the agenda for this meeting, I would like to
share with you some of my thoughts about your Company, the industry in
particular and the General Economic scenario.
NATION SURGING AHEAD
The opening up of the Indian Economy and the consequent liberalised
economic policies of the Govt. have resulted in rapid revamping of the
Indian Economy. In an endeavour to globalise the operations, the Indian
Economy has not only opened up to the outside world but has also provided
me right infrastructure for the healthy competition, to give me best at me
most competitive price to me Indian consumers. No doubt this intense
competition has made a little dent in the indigenous industry, but this in
the longer run would enable the Indian Industry to become more cost
consious and competitive. In our endeavour to face the global challenges,
we are adapting successfully to this changing environment and in this
pursuit we are seeking financially attractive technical know-how from the
leaders in the in the telecommunication field by entering into
collaboration and joint venture. This process of globalisation would induce
all of us here, to work as a team, respect the universal values concerning
people competitiveness, uncompromising quality, research & technological
The major customers for company's products are Department of
Telecommunications, Railways, Defence, State Police Organisations etc. Your
Company saw a lot of competition due to a number of multinational entrants
in this sector. Despite several odds, the company reported very encouraging
financial results for the year 1994-45. The gross income of your company
touched its all high of Rs. 12,793 lacs (approx.) thereby registering a
growth of 13.80% over the previous year's gross income. The Profits After
Tax of Rs. 2016.46 lacs show an incremental trend with a rise of 29.31%
over me previous year.
This performance would have been still better had there been no reduction
in me selling price of your company's products.
In view of me encouraging performance by your Company, me BOD of your
Company have recommended a dividend of 40% for the year 1994-95.
In the Year 1994 your Company came out with its maiden public issue of
42,50,000 equity shares of Rs. 10/- each at a premium of Rs. 240/- per
share aggregating Rs. 106.25 Crores which was a big hit among the members
of the public, oversubscribed by around 35 times. Please accept my since
gratitude for reposing so much faith in the management of the Company. All
of us here would try our best to live up to your expectations and maintain
the blue-chip status of your Company.
I admit that the share prices have gone down after the Public Issue, but I
assure you that this is due to the subdued market condition prevailing in
our country and has nothing to do with the working of the Company. In fact,
we as a team are trying our level best to improve the working of the
Company for which we have already initiated some drastic steps so that we
remain a Company with strong fundamentals.
With a view to earning precious foreign exchange, your Company has embaked
upon an agressive exports strategy. Hitherto, exports have been an
incremental activity of the Marketing Deptt., but keeping in view the
strength of your company's products and the liberal attitude of the Govt.,
exports have been initiated by participating in the international telecom
exhibitions/trade fairs in the target countries. This approach is
supplemented by advertising extensively in the overseas trade journals. So
far, your company has participated in trade fairs held at Indonesia,
Thailand, China & now in Uzbekistan generating a promising response. For
instance your company is favourably placed in me tender for Transmux worm
Rs. 85.00 lacs (approx.) as a result of Indonesian exhibition. We are
targeting the Chinese and Uzbek markets for our RAX (Rural Automatic
Exchanges) as the Rural Network is not well developed in these countries, &
also TMUX. We have also executed an order in Nepal and we expect some more
orders to flow-in, in the near future. We are also placed quite favourably
in me tender for PCM MUX Equipment in Bangladesh, which we are likely to
get. It is our endeavour to participate in the big tenders in other
countries in me region.
Although this is just a beginning, it is a promising step in the desired
direction which would definitely reap good results in the years to come.
Your Company has fixed a target to export Rs. 10.00 Crores (approx.) worm
of its products in line with its export strategy.
RESEARCH & DEVELOPMENT
Research & Development plays a key role in the growth of the Company
through innovations, competitive technology and introduction of new
Keeping the above in view our R & D Cell is working on State-of-the-Art
products including Digital Loop Carriers, Optimux Products, Versatile Mux
HDSL & Digital Pair Gain Products.
The Radio Division of PCL has completed indigenous development of 2 GHz
HMCs. It has also designed a low cost UHF System using state of the art
surface mounted technologies & field programmable gate arrays. Department
of Telecommunications has desired that VSATs installed at remote locations
shall operate from 48V battery supply due to unreliable AC mains. The power
supplies for the VSAT Systems have been developed and integrated.
Development work on futuristic projects like 13 GHz 34 Mbit, 18 GHz 8 Mbit
etc. has also been planned.
The Company is in the process of expanding its activities by adding new
product lines to its existing range. The products being introduced are :
Optical Fibre Line Terminating Equipment (OLTE), Very Small Aperture
Terminals (VSAT), 140 MBIT Digital Radio Equipment, Digital Rural
Communication System (DRC), Versatile Ultra High Frequency Digital Radio
Equipment (VUHF), Higher Order Mux (HOM), Frame Relay Technology, Video
Synthesizer, Multiband Jig Synthesizer, Cordless Telephone Systems,
Satellite Modems, FRP Antennas, Power Plants, Digital Power Gain Systems,
DLC Systems, Synchronous Digital Hierarchy Systems etc.
Your Company is diversifying into products having ready-made demand. The
existing infrastructural facilities and the inherent strengths of your
company give them an edge for any competition that may emerge as a result
of me opening of telecom industry to the private sector.
NEW ALLIANCES/OPERATIONAL AREAS
In view of the dynamism in the Telecom Industry & keeping into
consideration the burgeoning Indian Telecommunications market, your Company
has entered into two prestigious alliances with foreign companies.
A Memorandum of Understanding has been signed with Reliance Comm Tec
Corporation of United States by your Company for me formation of a Joint
Venture to produce a broad range of telecom equipments including
rectifiers, converters, DC Power Systems, Main distribution frames,
protection connection distribution terminals and other outside plant
products and digital transmission equipment and test systems. This project
would aim to procure a major share of business from DOT (Govt. of India)
and the Private Basic services operators to transport 45 million telephone
lines from exchanges to the subscribers premises. With this tie-up your
Company will have a technological edge over other competitors as me
prevalent technology for these products is not as advanced and tends to
affect the call connection rate adversely.
Your Company has also entered into a collaboration agreement with ECI
Telecom Limited, Israel for the manufacture of its SYNCOM range of
SYNCHRONOUS' DIGITAL HIERARCHY (SDH) products in India. The agreement
envisages transfer of technology at the component level. SDH is the
upcoming technology used with optical fibre and other wide band
transmission media for providing a large number of speech channels using
equipment that conforms to global standards for the first time.
Furthermore, it promises the opportunity to reap enormous benefits in terms
of quality, efficiency, flexibility, reliability and manageability. It
would not be out of place to mention that ECI Telecom is one of me largest
telecom manufacturers in Israel and a pioneer in Add Drop Multiplexers in
me SDH range, with a large number of installations in other countries. This
prestigious tender, floated by DOT for SDH technology has been recently won
by our Company by beating 28 parties, including 15 Multinational Companies
boasting of big names like Alcatel, Ericsson, Marconi, Nokia etc.
I must share with you some more developments that have taken place at our
end. We have won yet another prestigious order for over Rs. 20 Crores from
DOT for manufacturing CDOT MAX-L Exchanges. Your Company has also won an
International Tender for the Information Systems coverage of the entire
WILL's Cricket World Cup to be held next year in three countries namely
India, Pakistan & Srilanka. This will launch your company at the global
level as this event is expected to be watched by billions of viewers all
over the world. Taking advantage of the situation, we are negotiating with
some large computer companies in USA to do their manufacturing in India. We
have also signed an agreement, in principle, with a foreign Company for the
manufacture of another promising product which would enable one telephone
line to do me work of two telephones without actually adding a new line.
Apart from diversification of existing products as above, your company is
in the process of diversifying the markets also. This is being done with a
view to tapping alternative markets to build-up a new and vast horizon of
customers for our products. We are approaching in a big way, the major
customers for our range of products viz. Railways, MTNL, State Electricity
Boards, ONGC, VSNL etc.
All in all such diversification in the products as well as the markets
would take some time to fructify completely but by next year it is expected
to bear many fruits.
PCL is committed to intergrating "Total quality" in all its activities. PCL
is, apart from ITI, the first company to have been allowed Approved
Inspection Status (AIS) from the DOT for four of its products under which
PCL's QA Staff is authorised to clear the equipment on behalf of the DOT QA
staff with only sample check being carried out by DOT. In 1994, your
Company has also acquired ISO 9002 certification & it is the first State
Public Sector Undertaking to do so.
It is our endeavour to achieve the highest attainable standards of product
quality through motivated workforce who understand our values.
Apart from improving the quality we are laying enormous emphasis on
reducing the costs. To begin with we have already been able to cut down the
procurement cost of indigenous as well as imported material by 10% - 15%,
not counting the reduction in import duties.
I would like to express my sincere thanks and gratitude for the continuous
support received by the Company from the Government of Punjab, Punjab State
Electronics Development and Production Corporation Limited, IFCI, PSIDC,
PFC, SBI, Syndicate Bank and SBOP. I would also like to place on record the
Company's acknowledgement for the role played by the Govt. of India, DOE in
widening its product mix and giving necessary support and assistance to
increase its infrastructure. I am grateful to our esteemed customers who
have not only relied on our products but have placed repeat orders to us as
a proof of their satisfaction with goods and services already supplied to
I would also place on record my sincere gratitude to the shareholders of
the company, who have reposed their confidence and trust in the Management
of the Company.
I now move the Directors' Report and me Audited Balance Sheet and Profit &
Loss Account for the year 1994-95 to be approved and adopted.
PLACE : S.A.S. NAGAR
DATE : 30.09.1995