TO THE SHAREHOLDERS
Your Directors have the pleasure in presenting the Seventy Sixth Annual Report togetherwith the Audited Financial Statements of your Company for the Financial Year ended 31stMarch 2021.
(Rs. in lakhs)
|Description ||Standalone ||Consolidated |
| ||2020-21 ||2019-20 ||2020-21 ||2019-20 |
|Revenue from Operations ||128066.56 ||156895.69 ||128066.56 ||156895.69 |
|Earnings before Finance Costs Depreciation and Tax ||10429.68 ||18088.84 ||10429.68 ||18088.84 |
|Finance Costs ||6283.38 ||7726.20 ||6283.38 ||7726.20 |
|Profit before Depreciation and Tax ||4146.30 ||10362.64 ||4146.30 ||10362.64 |
|Depreciation and Amortization ||2634.55 ||2253.10 ||2634.55 ||2253.10 |
|Profit before Tax ||1511.75 ||8109.54 ||8956.96 ||14679.08 |
|Tax Expenses (Including Deferred Tax) ||295.20 ||1654.44 ||2234.32 ||5671.54 |
|Net Profit for the year ||1216.55 ||6455.10 ||6722.64 ||9007.54 |
The financial statements for the year ended 31st March 2021 have beenprepared in accordance with Ind AS in terms of the provisions of Section 133 of theCompanies Act 2013 read with the Companies (Indian Accounting Standards) Rules 2015 asamended from time to time.
STATE OF COMPANY'S AFFAIRS
The Company is predominantly engaged in the business of manufacturing a large range ofpower cables from 1.1kV to 400kV & capacitors Turnkey Projects relating thereto andother types of wires and cables conductors etc. There has been no change in the businessof the Company during the financial year ended 31st March 2021.
GENERAL & CORPORATE MATTERS
Your Company achieved the total Revenue from Operations of Rs. 128066.56 lakhs in thecurrent fiscal year as compared to Rs. 156895.69 lakhs in the previous fiscal yearregistering a decrease of 18.37% mainly due to the challenges posed by the COVID-19pandemic and associated economic slowdown during the first half of the financial year. Therevenue from exports for your Company was Rs. 2376.39 lakhs during the year under review.Earnings before interest (finance costs) tax depreciation and amortization (EBITDA)during the current fiscal year is Rs. 10429.68 lakhs as compared to Rs. 18088.84 lakhs inthe previous fiscal year. During the year under review the Profit before Tax stood atlower level of Rs. 1511.75 lakhs as compared to Rs. 8109.54 lakhs in the previous fiscalyear primarily because of higher commodity prices and social disruptions caused due topandemic. Profit after Tax stood at Rs. 1216.55 lakhs in the current fiscal year ascompared to Rs. 6455.10 lakhs in the previous fiscal year.
The COVID-19 outbreak persisted throughout the year causing a downturn in the overalleconomy and as a consequence it led to contraction in the demand. The pace of growth andthe investments in the infrastructural segment on which your Company largely dependsupon was severely impeded. Over and above the regular operations of your Company wereseverely hindered due to disruptions in transportation and logistics affecting timelymovement of incoming and outgoing materials delays in manufacturing clearances delays ininspections of the finished goods and decline in mobility. The project work at differentsites slowed down due to labour non availability and safety protocol. As a sum total ofthese encumbrances the performance of your Company marked a decline in Revenue during theyear under review.
Your Company recognizes that as soon as the pandemic recedes and is contained restoringnormalcy there would be a quick rebound in the industrial activities and trade with anupsurge in demand. Your Company is ready for the adaptive challenges during the new normalenvironment. On the other side cost pressures have emerged due to the steep rise ininternational commodity prices such as copper aluminium and steel. Your Company istiding over these issues giving preference to price variation contracts and avoidingprotracted delivery periods. Another hurdle your Company is facing is the unprecedentedand temporary scarcity of polymeric compound which is a major raw material input. Havingestablished long term association with suppliers your Company has a preferential edgewhich is an enabling factor to mitigate these scarcities.
Your Company's strategic principles of technology leadership retention of customersimproving competitiveness risk mitigation is reviewed monitored and bench marked withpeer Companies. Your Company is engaged in a continuous effort for improving theoperational efficiencies by laying thrust on capacity utilization reducing scrap and overusage of input raw materials strengthening the supply chain management for timely flow ofmajor raw materials ensuring better inventory control periodic upgradation of plant& machinery and astute financial discipline. These initiatives translate to continuousincremental improvement in quality and competitiveness.
Your Company has a leading market share in the Extra High Voltage (EHV) segment inIndia which includes supply and installation of cables. Presently your Company equippedwith two VCV Lines having the latest version of technology has the largest productioncapacity in the country. Your Company is also recognized as a manufacturer-cum-EPCcontractor in the EHV underground transmission projects. Your Company has successfullycompleted the Type Test for super specialized 1 x 2500 Sq mm Enamelled Copper Conductor400kV EHV cable recently at world renowned Testing Laboratory-CESI/IPH Germany. Inaddition the most rigorous long duration Pre-Qualification (PQ) test of 400 KV system hasalso been successfully completed at KEMA Netherland in the financial year 2020-21 and hascommenced manufacturing of 400kV EHV cables which is the highest voltage segment forunderground cables in India. In the ensuing financial year 2021-22 your Company expectsto commercialize bulk volume of 400kV cables against the order in-hand. In the HV and MVsegment your Company commands a sizeable market share. Your Company has twostate-of-the-art high Capacity CCV Lines for manufacturing widest range of cables in HVand MV market segment. During the year under review the Company successfully completedthe capacity expansion project for power and control cables LT & HT power capacitorsand thermoplastic compounds with the prime objective of aligning the manufacturingfacilities at Satna (M.P.) to keep pace with envisaged growth in demand. The expandedcapacity would further strengthen your Company's market share in the period ahead.However in the LV segment your Company has a relatively low market share compared to itspeers despite gradual augmentation in production capacity over the years. Your Companyfeels as normalcy sets in it would be the opportune moment to further expand in the LVsegment which is expected to pass through a rising growth curve to meet the need forinfrastructural development.
Your Company has the advantage of flexible manufacturing enabling it to switchproduction between EHV and MV the key products at times when the demand is asymmetric innature. Your Company has substantially increased its presence and has positioned itself asa front runner in turnkey business in EHV cable projects. Your company has initiated itsfootprint in MV cable intensive turnkey power distribution projects which also hassignificant market opportunities.
Your Company foresees that rebound in demand is imminent and would be visible as thenear normal situation approaches. The major thrust of the demand growth is expected to bedriven by the DISCOMs which are under reformation and being infused with financialstimulus by the Government. The virtually stalled infrastructural development in othersectors would gradually gain momentum pushing the demand growth. Your Company is geared totake advantage when the demand sets in full swing especially in the segment of high-endproducts.
Your Company has always maintained its policy to retain talent and to hone the skillsof its employees for deliverance of their capabilities and creativity to contribute totheir workplace and your Company at large. Your Company gives weightage to home growntalent and spots achievers for grooming them for a succession plan in your Company. YourCompany espouses positive organizational change by setting directions buildingself-confidence encouraging smart risk taking and drawing strength from adversities.
Your Company pays considerable importance to occupational and health safety forprotecting all levels of employees from risks hazards and accidents as well as protectingyour Company's assets. Mandatory safety-drills are in force as a routine. Environmentprotection is diligently followed. In a recent drive the Plant aesthetics have undergonesignificant improvement creating an ambiance for a conducive working place.
Your Company expresses its concern over the complete eradication of the COVID-19pandemic which is the biggest threat to the economy and society. The downside is the slowroll-out of the vaccine and the emergence of the new virus mutation which could prolongthe recovery phase. Your Company is taking various hygienic measures and precautions forits employees. In the present scenario your Company has shifted towards the use of onlinevideo platform in tender negotiations inspections and business meetings to maintain anear normal working environment.
After considering the Company's profitability free cash flow overall financialperformance and other parameters the Board of Directors of the Company is pleased torecommend a Dividend of Rupee 1 (One) (previous year Rs. 2/-) per equity share of facevalue of Rs. 10/- each i.e. 10 % (previous year 20%) for the financial year ended 31stMarch 2021. The payment of Dividend will be subject to deduction of Tax at source as perprescribed rates under Income Tax Act 1961 and rules made thereunder. The distribution ofDividend on equity shares if approved by the Members at the ensuing Annual GeneralMeeting will result in payout of Rs. 346.95 lakhs. No amount has been transferred to theGeneral Reserve for the financial year 2020-21.
The Board of Directors of the Company in its meeting held on 29th June 2021has formulated a Dividend Distribution Policy in compliance with Regulation 43A and otherapplicable provisions of the Listing Regulations as amended from time to time and thesame is uploaded on the Company's website and can be accessed atweblink:http://www.unistar.co.in/pdf/dividend distribution policv.pdf.
The disclosure relating to year-wise amount of unpaid/unclaimed dividend lying inUnpaid Dividend account and the corresponding shares which are liable to be transferred tothe Investor Education and Protection Fund (IEPF) during the current financial year andthe due date of such transfer is provided in the Corporate Governance Report which forms apart of the Annual Report.
During the year under review there was no change in the Issued Subscribed and Fullypaid-up equity share capital of the Company. The fully paid-up equity share capital of theCompany as on 31st March 2021 stood at ' 3469.83 lakhs.
During the year under review your Company has not accepted any public deposits withinthe meaning of Section(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 orinterest on public deposits was outstanding as on the date of the Balance Sheet.
Your Company continued to optimise bank borrowings by focusing on cash flows andworking capital management. The Company's financial discipline and prudence is alsoreflected in the reasonable credit rating ascribed by the rating agencies.
Pursuant to Regulation 34(3) read with Para C of Schedule V of SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 as amended from time to time("Listing Regulations") the Management Discussion and Analysis Report onCorporate Governance and a Certificate by the Managing Director & 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 (CSR)
As a part of its initiative under Corporate Social Responsibility (CSR) your Companyhas undertaken CSR projects and programmes in the areas of (i) Rural Development; (ii)Health care including preventive health care; (iii) Disaster Management including reliefrehabilitation and reconstruction activities; and (iv) Empowerment of physicallychallenged persons. The CSR activities have been carried out in and around the local areaswhere the Company operates and nearby localities. These activities are largely inaccordance with Schedule VII of the Companies Act 2013 read with Companies (CorporateSocial Responsibility Policy) Rules 2014 and the Company's CSR Policy.
The Annual Report on CSR activities as required under the Companies (Corporate SocialResponsibility Policy) Rules 2014 is given in Annexure-I which is attached heretoand forms a part of the Directors' Report. The composition of the CSR Committee theCorporate Social Responsibility Policy of the Company and CSR projects/programmes approvedby the Board are available on the website of the Company i.e. www.unistar.co.in/investorrelation/investor.php.
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 annual financial statements for the year ended 31stMarch 2021 the applicable accounting standards read with requirements set out underSchedule III to the Companies Act 2013 have been followed and there are no materialdepartures from the same;
(b) that such accounting policies as mentioned in Notes to the financial statementshave been selected and applied consistently and judgement and estimates have been madethat are reasonable and prudent so as to give a true and fair view of the state of affairsof the Company as at 31st March 2021 and the profit of the Company for theyear ended on that date;
(c) that proper and sufficient care has been taken 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) that the annual financial statements have been prepared on a going concern basis;
(e) that proper internal financial controls were in place and that the financialcontrols were adequate and were operating effectively; and
(f) that proper systems to ensure compliance with the provisions of all applicable lawswere in place and that such systems were adequate and operating effectively.
RISK MANAGEMENT AND ADEQUACY OF INTERNAL FINANCIAL CONTROLS
Your 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 and monitor regularly the framework for identification evaluation andprioritization of risks mechanism to mitigate risks process that methodically trackgovernance objectives risk ownership/accountability compliance with policies and decisionsthat are set through the governance process risks to those objectives and services andeffectiveness of risk mitigation and controls besides inherent risks associated with theproducts/goods and services dealt with by the Company as well as execution of turnkeyprojects. Your Company's approach to address business risks and compliance functions iscomprehensive across the business and includes periodic review of such risks and aframework for mitigating and reporting mechanism of such risks. The Company's business andfunctions are systematically addressed through mitigating actions on a continuing basis.In opinion of the Board of Directors there are no material risks which may threaten theexistence of the Company.
In addition the Board of Directors of the Company in its Meeting held on 29thJune 2021 has constituted a Risk Management Committee in compliance with the Regulation21 and other applicable provisions of the Listing Regulations as amended.
The Company has laid down the policies and procedures for internal financial controlsfor ensuring the orderly and efficient conduct of its business in order to achieve thestrategic operational and other objectives over a long period and that its exposure torisks are within the acceptable limits. In addition the policies and procedures have beendesigned with an intent to ensure safeguarding of Company's assets the prevention anddetection of frauds and errors the accuracy in completeness of the accounting records andthe timely preparation 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. Your Company has defined organization structure authority levels delegatedpowers internal procedures rules and guidelines for conducting business transactions.Your 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 in accordance with the Companies Act 2013 Companies (Indian AccountingStandards) Rules 2015 and other relevant provisions of the Companies Act 2013 and rulesmade thereunder and all other applicable regulatory/statutory guidelines etc. fordisclosures with reference to financial statements.
The Board has also implemented systems to ensure compliance of all applicable laws tothe Company which were effective and operative during the year under review. At quarterlyintervals the Company Secretary & Compliance Officer places before the Board acertificate along with a detailed statement certifying compliance of various laws andregulations as applicable to the business and operations of the Company after obtainingconfirmation from all functional heads responsible for compliance of such applicable lawsand regulations. The Company Secretary is responsible for compliance of corporate lawsincluding the Companies Act 2013 SEBI Act and rules/guidelines other corporatelaws/rules and regulations and Listing Regulations including any statutory amendment(s)modification(s) or enactment(s) thereto to the extent apply and extend to the Company.
Your Company's internal control systems are supplemented by an extensive program ofinternal audit by an independent firm of Chartered Accountants. Internal audits areconducted at regular intervals and a summary of the observations and recommendations ofsuch audits are placed before the Audit Committee. The Internal Auditors the AuditCommittee as well as the Board of Directors conduct an evaluation of the adequacy andeffectiveness of the system of internal financial controls system on an ongoing 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 continued satisfactory financial performance of the Company. TheBoard would also like to place on record its appreciation for dedicated and exemplaryservices rendered by employees at all levels in the prevailing challenging times inensuring safe and reliable operations/project(s) execution throughout the ongoing pandemiccrisis. The Company's management stands stoically with all employees and their familiescommitted to their safety security and well-being during this dreadful pandemic and hasput in place all appropriate measures to this effect.
Your Company continues to accord a very high priority to both industrial safety andenvironment protection and these are ongoing process at the Company's Plant and facilitiesand also at respective project sites to maintain high awareness levels. Your Company hasalso stressed the need to adopt the highest safety standards on turnkey projectsundertaken for EHV power cables with the emphasis on ensuring that safety on all projectsunder execution are given a great deal of importance. The Company is conscious of theimportance of environmentally clean and safe operations so as to ensure safety of allconcerned and compliance of applicable environmental regulations and to this end workingcontinuously towards reduction in waste for disposal. The Company as a policy reevaluatessafety standards and practices from time to time in order to raise the bar of safetystandards for its people as well as users and customers.
Your Company's manufacturing facilities and functional departments continue to remaincertified by independent and reputed external agencies as being compliant as well asaligned with international standards for integrated Quality Management System ISO9001:2015 Environmental Management System ISO 14001:2015 and Occupational Health andSafety Management System ISO 45001:2018. During the year the audits for theseCertifications established continuous improvement in performance against these standards.EHV Cable Laboratory of the Company is accredited by National Accreditation Board forTesting & Calibration Laboratories (NABL) in accordance with the Standard ISO/IEC17025: 2017 (General Requirements for the Competence of Testing & CalibrationLaboratories) in the field of Testing.
The In-house Research and Development Laboratory of the Company is recognised by theMinistry of Science & Technology Government of India.
The Board of Directors regretfully report and expresses with utmost grief its heartfeltcondolences on the sad demise of Shri Dinesh Chanda an Independent Director on 21stMay 2021 who will always be remembered for his endearing and noticeable qualities ofmodesty and simplicity for someone of his stature and bearings. The Board places on recordits highest gratitude sincere and deep appreciation for valuable guidance given andcontribution made by him in building up Company's growth during his long association as aDirector/Independent Director of the Company.
In accordance with the provisions of Section 152 of the Companies Act 2013 and theCompany's Articles of Association Shri Dilip Ganesh Karnik (DIN: 06419513) Directorshall retire by rotation at the ensuing Annual General Meeting and being eligible hasoffered himself for re-appointment as a Director of the Company. The Board recommends hisre-appointment for the consideration of the members of the Company at the ensuing AnnualGeneral Meeting. As required under the Regulation 36(3) of the Listing Regulations andrelevant provisions of the Secretarial Standard on the General Meeting (SS-2) the briefresume and other details pertaining to Shri Dilip Ganesh Karnik are given as the Annexureto the Notice of the ensuring Annual General Meeting which is being sent to theshareholders along with the Annual Report.
KEY MANAGERIAL PERSONNEL
Shri Y.S.Lodha Managing Director & Chief Executive Officer Shri Mahesh LadiaChief Financial Officer and Shri Sudeep Jain Company Secretary are the Key ManagerialPersonnel of the Company.
Shri Mahesh Ladia has been appointed as Chief Financial Officer of the Company witheffect from 29th June 2021 in place of Shri Vishnu Gupta who served theCompany as the Chief Financial Officer from 1st December 2020 to 20thJanuary 2021. Prior to him Shri Sanjeev Jain had resigned from the post of ChiefFinancial Officer of the Company and relinquished the office as such on 15thNovember 2020.
DECLARATION BY INDEPENDENT DIRECTORS
All Independent Directors of your Company viz. Shri S.S. Kothari Shri S.C. Jain andDr. Kavita A. Sharma have severally given a declaration pursuant to Section 149(7) of theCompanies Act 2013 that they meet the criteria of Independence as laid down under Section149(6) of the Companies Act 2013 and that they are registered in the data bank of IndianInstitute of Corporate Affairs for life-time as per Section 150 of the Companies Act 2013and rules made there under. They have also furnished the Declaration and Confirmationpursuant to Regulation 25(8) of the Listing Regulations affirming compliance to thecriteria of Independence as provided under Regulation 16(1)(b) of the Listing Regulations.The Company had also received the said declaration from Late Shri Dinesh Chanda before hissad demise on 21st May 2021 affirming compliance with the relevant provisionsof the Companies Act 2013 and Listing Regulations as stated above.
The Independent Directors have individually confirmed that they are not aware of anycircumstances or situation which exist or may be reasonably anticipated that couldimpair or impact their ability to discharge their duties with an objective independentjudgement and without any external influence. Based on the declarations and confirmationsof the Independent Directors and after undertaking due assessment of the veracity of thesame the Board of Directors recorded its opinion that all the Independent Directors areindependent of the Management and have fulfilled all the conditions as specified under thegoverning provisions of the Companies Act 2013 and the Listing Regulations.
MEETINGS OF BOARD AND COMPOSITION OF COMMITTEES
During the year under review the Board met four times viz. on 1st June2020 10th August 2020 9th November 2020 and 12thFebruary 2021.
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 the Listing Regulations. Duringthe year under review all the recommendations of the Audit Committee were accepted by theBoard of Directors. The requisite details of Audit Committee 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.
PERFORMANCE EVALUATION OF BOARD COMMITTEES & DIRECTORS
Pursuant to the provisions of the Companies Act 2013 Listing Regulations and theGuidance Note on Board Evaluation issued by SEBI the Board of Directors of the Companycarried out the annual evaluation of its own performance and that of its Committees andindividual Directors inter alia to assess the skill set and contribution that aredesired recognising that competencies and experiences evolves over time. The manner inwhich annual evaluation has been carried out by the Board of Directors is given in theReport on Corporate Governance which forms a part of the Annual Report. During the processof evaluation the Board of Directors also considered the criteria for evaluation ofperformance of Independent Directors and the Board of Directors formulated by theNomination and Remuneration Committee. The Independent Directors carried out the annualperformance evaluation of the Chairman (taking into account the views of non-executivedirectors and the Managing Director) the Non-Independent Directors and the Board as awhole and the same was also reviewed and deliberated by the Board of Directors. Theperformance evaluation of independent directors was carried out by the entire Board ofDirectors excluding the directors being evaluated. In conclusion the Board of Directorswas satisfied with the performance and functioning of the Board its Committees andindividual members.
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 inter-alia dealswith the criteria for identification of members of the Board of Directors and selection/appointment of the Key Managerial Personnel/Senior Management Personnel of the Company.The NRC recommends appointment of Directors/appointment or re-appointment of ManagingDirector based on their qualifications expertise positive attributes andindependence/professional expertise in accordance with prescribed provisions of theCompanies Act 2013 and rules framed thereunder and the Listing Regulations. The NRC inaddition to ensuring diversity of race and gender also considers the impact the appointeewould have on Board's balance of professional experience background viewpoints skillsand 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 Key Managerial Personnel and Senior Management Personnel. The salient features ofthe Remuneration Policy are stated in the Report on Corporate Governance which forms apart of the Annual Report. The Remuneration Policy is uploaded on the website of theCompany and the weblink of the same is http://www.unistar.co.in/pdf/ Policy forRemuneration for Board Members Exective Management.pdf.
BUSINESS RESPONSIBILITY REPORT
The Business Responsibility Report as required under Regulation 34(2) of the SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 form an integral partof this 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/Whistle Blower Policy to deal with instances of fraudand mis-management if any and conducting business with integrity including inaccordance with all applicable laws and regulations. No employee has been denied access tothe Vigilance Officer as well as Chairman of the Audit Committee. The details of the VigilMechanism and Whistle Blower Policy are stated in the Corporate Governance Report and alsoposted on the website of the Company.
MAINTENANCE OF COST RECORDS
The requirement of maintenance of cost records as specified by the Central Governmentunder sub-section (1) of Section 148 of the Companies Act 2013 and have the audit of itscost records conducted by a Cost Accountant is applicable in respect of certain specifiedproducts of the Company and accordingly such accounts and records are made and maintainedby 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 V.Sankar Aiyar & Co. Chartered Accountants (Registration No. 109208W) the Auditors ofthe Company hold office for a consecutive period of five(5) years until the conclusion ofSeventy Seventh (77th) Annual General Meeting of the Company and their appointment is notrequired to be ratified each year at the Annual General Meeting of the Company. TheAuditors have confirmed to the Company that they continue to remain eligible to holdoffice as the Auditors and are not disqualified from being so appointed as StatutoryAuditors under the Companies Act 2013 the Chartered Accountants Act 1949 and the rulesand regulations made thereunder.
The Board of Directors has on the recommendation of the Audit Committee re-appointedMessrs D. Sabyasachi & Co. Cost Accountants (Registration No. 000369) as the CostAuditors for conducting the audit of the cost records maintained by the Company in respectof certain specified products of the Company covered under the Companies (Cost Records andAudit) Rules 2014 and fixed their remuneration based on the recommendation of the AuditCommittee. The remuneration together with reimbursement of applicable Goods and ServicesTax thereon and actual out of pocket and travelling expenses incurred in connection withaudit of cost accounting records of the Company to be paid to the Cost Auditors is subjectto ratification by the members in the ensuing Annual General Meeting of the Company.
The Auditors' Report on the financial statements of the Company form 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 and pursuant toRegulation 24A of the Listing Regulations Messrs R.K. Mishra & Associates CompanySecretaries in whole time practice (PCS Registration No. 4433) were appointed toundertake the Secretarial Audit of the Company for the year ended 31st March2021. The Report of the Secretarial Auditors for the year ended 31st March2021 is given in the prescribed form in Annexure - II which is attached hereto andforms a part of the Directors' Report.
No qualification observation other remarks or disclaimer have been made bySecretarial Auditors 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 Standards i.e. SS-1 and SS-2 relating to"Meetings of Board of Directors" and "General Meetings" respectivelyissued by the Institute of Company 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 an arm's 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 heretoand forms a 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 conflict with theinterest of the Company at large.
All related party transactions are placed before the Meeting(s) of Audit Committee forits review and approval. Prior omnibus approval of the Audit Committee is obtained on anannual basis for a financial year for the transactions which are of a foreseen andrepetitive in nature. The statement giving details of all related party transactionsentered into pursuant to the omnibus approval together with relevant documents/informationare placed before the Audit Committee for review and updation on quarterly basis. TheCompany's Policy on materiality of Related Party Transactions and dealing with RelatedParty Transactions as approved by the Board of Directors is uploaded on the Company'swebsite and can be accessed at weblink http://www.unistar.co.in/pdf/ Policy Related PartyTransactions.pdf.
ASSOCIATE AND JOINT VENTURE
Your Company has an associate company viz. Vindhya Telelinks Limited and a jointventure company viz. Birla Furukawa Fibre Optics Private Limited. Vindhya TelelinksLimited an associate company is engaged in the business of manufacturing and sales oftelecommunication cables other types of wires and cables FRP rods/Glass rovings etc.and Engineering Procurement and Construction (EPC) business. Birla Furukawa Fibre OpticsPrivate Limited joint venture company established in pursuance to a Joint VentureAgreement entered into between your Company and Furukawa Electric Co. Ltd. Japan andengaged in the business of manufacturing and sales of telecommunication grade OpticalFibres. During the year under review Vindhya Telelinks Limited an associate company hasachieved satisfactory financial performance despite significant reduction in demand forOptical Fibre cables due to persisting sluggish market conditions as well as delay inexecution of EPC projects due to COVID-19 pandemic. The financial performance of BirlaFurukawa Fibre Optics Private Limited a joint venture company was satisfactory whilejudging in the prevailing context of outbreak of COVID-19 pandemic causing significantdisturbance and slowdown of economic activities thereby impacting operations and revenueduring the year under review. Notwithstanding the adverse market condition prevailing atthe moment the medium and long term outlook for Optical Fibre and Optical Fibre Cablesappears to be encouraging as the world marches towards digitalization besides increaseddemand for telecommunication services and shift in consumer habits which is expected todrive the demand for optical fibre and optical fibre cables upwards.
A statement containing the salient features of the financial statements of an associatecompany and joint venture company as prescribed under the first proviso to sub-section (3)of Section 129 of the Companies Act 2013 read with Rule 5 of the Companies (Accounts)Rules 2014 is attached and forms a part of the Annual Report.
A report on the performance of financial position of an associate company and a jointventure company as per the provisions of the Companies Act 2013 is provided as part ofthe consolidated financial statements and hence not repeated herein for the sake ofbrevity.
The Company had entered into a Manufacturing Technical Collaboration Agreement with NKTGmbH & Co. KG Germany on 9th August 2018 for 400 kV Extra High VoltageXLPE Underground Cables which continues to remain in force.
CONSOLIDATED FINANCIAL STATEMENTS
The Audited Consolidated Financial Statements of the Company as of and for the yearended 31st March 2021 have also been prepared in the same form and manner asthat of the Company and are in accordance with the applicable provisions of the CompaniesAct 2013 rules made thereunder and Listing Regulations read with Indian AccountingStandards specified under the Companies (Indian Accounting Standards) Rules 2015 viz.Indian Accounting Standard (Ind AS)-110 "Consolidated Financial Statements" andIndian Accounting Standard (Ind AS)-28 "Investments in Associates and JointVentures" forms a part of the Annual Report.
PARTICULARS OF LOANS GUARANTEES AND INVESTMENTS
The particulars of Loans given Guarantees Investments made and securities providedpursuant to Section 186 of the Companies Act 2013 have been disclosed in the financialstatements read together with Notes annexed to and forming an integral part of thefinancial 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.
Annual Return of the Company as per Section 92(3) of the Companies Act 2013 isuploaded on website of the Company and the same can be accessed at the weblinkhttp://www.unistar.co.in/pdf/Annual Return.pdf
PARTICULARS OF EMPLOYEES
The information required pursuant to Section 197(12) of the Companies Act 2013 readwith Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 in respect of employees of the Company are given in Annexure - Vwhich is attached hereto and forms a part of the Directors' Report.
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 whichis attached 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 to dividendvoting or otherwise nor has granted stock options or sweat equity under any scheme.Further none of the Directors of the Company holds investments convertible into equityshares of the Company as on 31st March 2021.
(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 and has also constituted an Internal Complaints Committee(s) in line with therequirements of the Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013 and Rules made thereunder. During the year under review no case wasfiled or reported in pursuance to the provisions of the said Act.
(d) There have been no material changes and commitments which affect the financialposition of the Company that have occurred between the end of the financial year of theCompany to which the financial statements relate and the date of the Directors' Reportsave and except severe contraction in business activities due to extended lockdown imposedby the Central and State Government authorities in India considering public health andsafety due to outbreak of COVID-19 pandemic.
(e) No frauds were reported by the Auditors in terms of Section 143(2) of the CompaniesAct 2013 and rules if any made thereunder.
(f) The Company has neither filed any application under the Insolvency and BankruptcyCode 2016 (31 of 2016) as amended from time to time nor has availed one time settlementwith respect to any loans from banks or financial institutions.
The Board desires to place on record its grateful appreciation for the excellentassistance and co-operation received from the State Government and continued supportextended to the Company by the bankers investors suppliers esteemed customers and otherbusiness associates. Your Directors also wish to place on record their deep sense ofappreciation to all the employees of the Company for their unstinted commitment andcontinued contribution in the performance of the Company.
| ||Yours faithfully || |
| ||Harsh V. Lodha ||Y.S.Lodha |
| ||Chairman ||Managing Director & Chief Executive Officer |
|Date : 29th June 2021 Place : Satna ||(DIN:00394094) ||(DIN: 00052861) |