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Veto Switchgears & Cables Ltd.

BSE: 539331 Sector: Engineering
NSE: VETO ISIN Code: INE918N01018
BSE 11:31 | 26 May 89.60 -2.75
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OPEN 94.10
PREVIOUS CLOSE 92.35
VOLUME 611
52-Week high 171.85
52-Week low 78.55
P/E 7.66
Mkt Cap.(Rs cr) 171
Buy Price 89.55
Buy Qty 438.00
Sell Price 90.05
Sell Qty 9.00
OPEN 94.10
CLOSE 92.35
VOLUME 611
52-Week high 171.85
52-Week low 78.55
P/E 7.66
Mkt Cap.(Rs cr) 171
Buy Price 89.55
Buy Qty 438.00
Sell Price 90.05
Sell Qty 9.00

Veto Switchgears & Cables Ltd. (VETO) - Director Report

Company director report

Dear Members

The Board of Directors have the pleasure of presenting the 14thAnnual Reportof the business and operations of your Company along with the Audited Financial Statementsfor the Financial Year ended 31 st March 2021 and other accompanying reportsnotes and certificates. The Consolidated performance of the Company and its subsidiarieshas been referred to wherever required.

FINANCIAL RESULTS

Y our Company is growing expeditiously. The Company’s financial performance(standalone and consolidated) for the year ended March 31 2021 is summarised below:

(Rs. In Lakhs)

Particulars

Consolidated

Standalone

2020-21 2019-20 2020-21 2019-20
Revenue from Operations (including other Income) 18272.00 15090.30 15536.81 12634.38
Less Expenses :
(a) Cost of materials consumed 7521.25 5026.17 6212.31 4402.88
(b) Purchases of stock-in-trade 5770.00 4759.72 4765.39 3857.42
(c) Changes in inventories of finished goods and stock-in-trade (519.14) 699.55 (626.60) (91.59)
(d) Employee benefits expense 1246.89 1099.83 1091.50 1032.00
(e) Finance costs 186.28 373.17 174.68 371.5 1
(f) Depreciation and amortisation expense 199.82 189.89 179.64 175.47
(g) Other expenses 1741.89 1550.35 1505.42 1316.60
T otal expenses 16146.99 13698.68 13302.34 11064.29
Profit before tax and exceptional items 2125.01 1391.62 2234.47 1570.09
Less: Exceptional items 13.85 - - -
Profit before tax 2138.86 1391.62 2234.47 1570.09
Less: Tax Expense 655.30 463.63 622.54 464.52
Less: Minority interest

-

-

Profit after tax 1483.56 927.99 1611.93 1105.57

The year started with an unexpected nation-wide lockdown due to a pandemic whichnegatively impacted economic activities across the globe. Economic activities graduallystarted picking up from mid May 2020. Our Company backed by manufacturing strength robustsupply chain management and strong distribution network made a strong comeback. In Spiteof COVID-19 pandemic situation the Company achieved more than 20% growth in top line andBottom line on Year to Year Basis. Uncertain challenges and partial lockdowns are stillfaced by the economy due to COVID-19 across the country. However we as an organizationremain vigilant to the ground developments with confidence and optimism to manage emergingscenarios.

FINANCIAL PERFORMANCE CONSOLIDATED FINANCIAL RESULTS

During the year under review on consolidated basis our Company earned profit before taxand exceptional items of Rs.2125.01 Lacs against Rs. 1391.62 Lacs in the previous year.The Company earned profit after tax of Rs. 1483.56 Lacs as compare to Rs. 927.99 Lacs inthe previous year. The Company had Income from operations of Rs.18123.07 Lacs as comparedto Rs. 15021.81 Lacs in previous year. The Profit before Interest/Depreciation/Tax (PBDIT)was Rs. 2511.11 Lacs as compared to Rs. 1954.68 Lacs in previous year.

Income from Operations (In Lacs)

STANDALONE FINANCIAL RESULTS

During the year under review on standalone basis our Company earned a profit before taxand exceptional items of Rs. 2234.47 Lacs against Rs. 1570.09 Lacs in the previous year.The Company earned profit after tax of Rs. 1611.93 Lacs as compare to Rs. 1105.57 Lacs inthe previous year. The Company had Income from operation of Rs. 15265.62 Lacs as comparedto Rs. 12069.73 Lacs in previous year. The Profit before Interest/Depreciation/Tax (PBDIT)was Rs.2588.79 Lacs as compared to Rs. 2117.07 Lacs in previous year.

Keeping pace with growth trajectory and its efforts to improve efficiency productivityand profitability the management seeks the trust of shareholders in future growth of theCompany and enhancement of shareholders wealth.

INDIAN ACCOUNTING STANDARDS

Indian Accounting Standards (IND AS) had replaced the Indian GAAP prescribed underSection 133 of the Companies Act 2013 read with rule 7 of the Companies (Accounts)Rules 2014 pursuant to the notification issued by the Ministry of Corporate Affairs (MCA)and since then the Indian Accounting Standards (IND AS) is applicable on the Company forthe accounting periods beginning on or after 1st April 2017.

FINANCIAL STATEMENTS

In accordance with SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 (hereinafter referred to as ‘Listing Regulations’) and Section 136 of theCompanies Act 2013 read with Rule 10 of the Companies (Accounts) Rules 2014 the AnnualReport containing salient features of the financial statements including consolidatedfinancial statements for the financial year 2020-21 along with statement containingsalient features of the Directors’ Report (including Integrated Reporting andManagement Discussion & Analysis and Corporate Governance Report) is being sent onlyby electronic mode to members whose e-mail addresses are registered with the Company orwith the Depository participant and uploaded on the website of the Company also beaccessed from the websites of the Stock Exchanges i.e. BSE Ltd and National Stock Exchangeof India Limited at www.bseindia.com and www.nseindia.com respectively

Annual Report 2020-21 containing complete Balance Sheet Statement of Profit &Loss other statements and notes thereto including consolidated financial statementsprepared as per the requirements of Schedule III to the Companies Act 2013.

DIVIDEND

The Board of Directors of your company pleased to recommend a final Dividend of Rs. 1/- per share having face value of Rs. 10/- each of 10% of F.V. for the Financial Year endedon 31st March 2021. The proposed Dividend subject to approval of Shareholdersin the ensuing Annual General Meeting of the Company will be paid to members within theperiod stipulated by the applicable Companies Act. The dividend would be payable to allShareholders whose names appear in the Register of Members as on the Book Closure Date.The Register of Members and Share Transfer books shall remain closed from 23rdSeptember 2021 Thursday to 29th September 2021 Wednesday (both daysinclusive).

RESERVES

Rs. 1626.17 l akhs has been transferred to reserves and surplus account during thecurrent year.

SHARE CAPITAL

The Authorised Capital of the company is Rs. 250000000/- (Rupees Twenty Five CroresOnly) divided into 25000000 (Two Crores Fifty Lacs) equity shares of Rs. 10/- each andIssued Subscribed and Paid-up capital is Rs. 191149550/- (Rupees Nineteen CroresEleven Lacs Forty Nine Thousand Five Hundred Fifty Only) divided into 19114955 (OneCrores Ninety One Lacs Fourteen Thousand Nine Hundred Fifty Five ) equity shares of Rs.10/- during the year.

There has been no change in the Authorized Share Capital Issued Paid up andSubscribed Capital of the company during the year.

CHANGE IN THE NATURE OF BUSINESS IF ANY

There being no change in the nature of business during the financial year ended 31stMarch 2021.

Material changes if any affecting the financial position of the Company which haveoccurred between the ends of the financial year of the company to which the financial yearrelates and the date of the report.

• Veto Switchgears and Cables Limited acquired 95.5% stake in Vankon ModularPrivate Limited and above information intimated to Stock Exchanges.

Now Vankon Modular Private Limited deemed Subsidiary Company of Veto Switchgears andCables Limited.

The Vankon Modular Private Limited is in the same line of business. Veto Switchgearsand Cables Limited will be benefited by this acquisition due to integration benefits. Anddue to thi s network of Dealer of the company become from 2500 dealers to 4000 dealers.

The Management Discussion and Analysis Report of the financial condition and results ofoperations of the Company for the year under review as required under regulation 34(2) (e)of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 is being givenseparately and forms part of this board report .

PARTICULARS OF LOAN GUARANTEE AND INVESTMENTS

The details of loans guarantees and investments covered under the provisions ofSection 186 of the Companies Act 2013 are given in the respective notes to the StandaloneFinancial Statements of the Company.

DEPOSITS

During the year under review the Company has neither accepted nor renewed any depositsin terms of Chapter V of the Companies Act 2013 and Rules framed thereunder.

BUSINESS OPERATIONS / STATE OF COMPANY’S AFFAIRS

In the last month of FY 2020 the COVID-19 pandemic developed rapidly into a globalcrisis forcing governments to enforce lock-downs of all economic activity.

Pandemic is posing formidable and unprecedented challenges across the business valuechain. Team Veto was focus immediately shifted to ensuring the health and well-being ofall employees and on minimizing disruption to services for all our customers globally.

Most of the non-essential operational expenditure and Capital expenditures werecurtailed and sufficient liquidity was maintained without affecting payments tostakeholders. The plans for Capital expenditures were minimized still maintaining thecontinuity of projects in hand. Cross-functional teams were formed with senior leadershipacross the country focusing on different aspects of the Company such as ManufacturingBranch operations Supply chain Go to Market etc. for swift decision making &execution during an unprecedented & uncertain environment.

In Spite of COVID-19 pandemic situation the Company achieved more than 20% growth intop line and Bottom line on Year to Year Basis .

The company and individuals carry the same objective of not only improving butempowering people’s lives with our unique repertoire of products and services backedby time tested technology and advanced Research & Development methods. With persistentfocus on innovation prompt capitalization of opportunities building up credibilitythrough strategic thinking operational expertise well planned investments and businessintegrity we aim to continue our journey without any reduction in intensity or strength.The company envisages an organization that is truly global in every way i.e. technologypolicies and possibilities and it can be seen with its world-wide tie-ups collaborationsand import-export relations. Your company has been developing as a distinctive brand ofleadership well equipped to address critical challenges faced by industry and society. Ourambition is being recognized as one of the major competitors globally in the electricalaccessories industry.

Veto Switchgears and Cables Limited is one of the most respectable cable manufacturersin India. Brand Veto is committed to quality safety and service with no compromise. TheCompany is an ISO 9001:2008 certified company engaged in manufacturing and selling wires& cables along with other electrical accessories in India.

The brand VETO came into existence in 1967 and since then holds a major sector ofelectrical accessories in India. The company has built powerful and efficient team ofmarketing professionals dealers and distributors. Result of which can be seen through itsincreasing sales. Production has reached its manifold several times since its inception.We aim at providing "Best Quality at Competitive Prices."

The product portfolio ranges from industrial cables stand cables to telephone &co-axial wires from general switches to modular switches from ceiling fans torechargeable fans compact fluorescent lamps LED bulbs and other electrical accessoriessuch as switch socket MCB bell and all other electrical accessories that are used forhousehold purposes and manufacturing of wires and cables. Cable range starts from 0.75 mmto 10 mm. The Company also manufactures LED panel Lights LED Flood Light Slim PanelLight LED strip Light and has also received tremendous response from selling the same.

The products are supplied under the brand name "VETO" and "VIMALPOWER" through large network of dealers and distributors to its valuable customers inIndia as well as Abroad.

VIMAL POWER is a part of Veto group and continues to reinforce a successfulinternational presence and enhance its enviable reputation for innovation. Measures takenfor continuous research and development ensures in developing world beating range ofcables for satisfying or surpassing the requirements of Indian Standards.

Its major distribution in India covers more than 15 states including major sale inRajasthan Uttar Pradesh Gujarat Haryana Himachal Pradesh Punjab JNK UttarakhandJharkhand Bangalore Assam Karnataka Kerala Tamil Nadu Andhra Pradesh and MadhyaPradesh.

Raw Material

Our Company’s present and proposed consumption of Raw material is as under:

(Qty. in kg)

Product category Existing (2020-21) Proposed (2021-22)
Copper 360961032 379009083
PVC Resin 33053796 34706486
Aluminium 8119232 8525194

Infrastructure facilities

• Power: Presently 400 KVA of power supply is sanctioned by Uttarakhand PowerCorporation Limited of which approximately 325 KVA have been utilized for our presentbusiness operations. Addition to this the Company has installed a DG set of 250 KVAcapacity to avoid any disruption in the power supply. Therefore we envisage that ourfurther requirement of power for our proposed modernization plans can easily be met fromthe present supplies.

• F uel: Our Company mainly requires HSD for operating the DG sets. The presentmonthly consumption of HSD is about 1000 litres. The HSD is being supplied by retailoutlets of IOC HPCL and BPCL.

• Water: Water is an essential need and is basically required for drinking andother domestic purpose. Presently about 7000 litres per day (after proposedmodernization) is required at our Haridwar unit. Requirement of water is met from our ownborewell. The water supply is regular and sufficient to meet entire requirements. Therearise no difficulty in obtaining water because of the presence of number of borewell andthe water level in the area being high due to proximity to nearby canal and River Ganga.

• Manpower: Our Company has adequate manpower at all levels and does not envisageany difficulty in getting the requisite personnel for our business operations at existinglocations. Details of manpower are as follow:

Category Nos.
Top management 3
Managerial & Supervisory staff 10
Office staff 120
Skilled workers 41
Unskilled workers 229
Total 403

• Effluent Treatment and Disposal: Our Company does not generate any industrialeffluents which is hazardous to the environment. The waste produced during themanufacturing operation is re-used and/ or recycled.

• Environmental Clearance: We have got all the necessary approvals from the localauthorities to operate our business.

• Safety Standards: Quality and safety are the hallmarks of our diverse range ofproducts which are designed and manufactured to the very highest standards such as ISO9001 and approved by the leading organizations nationally and internationally.

• Our Strategy: Company’s goal is to enhance the competitiveness in themarket by adopting several techniques such as continuous research and development productengineering to ensure the best manufacturing process for our products. Research anddevelopment in electrical accessories and other allied products will better enable acompetitive position in the market. Further enhancement of operations by improving theexisting assets to yield better output. Installation of new assets to enhance and attractnew markets is also in the horizon.

• Capacity and capacity utilization

Particulars

Projected

Actual
FY 2020-21 FY 2021-22 FY 2020-21
Wires & Cables
Installed Capacity 20.00 Lacs Bundles 20.00 Lacs Bundles 20.00 Lacs Bundles
Capacity Utilization (in %) 45% 45% 30.37%
Production 9.00 Lac Bundles 9.50 Lac Bundles 6.07 Lac Bundles
Electrical Accessories
Installed Capacity 600 Lac pieces 600 Lac pieces 600 Lac pieces
Capacity Utilization (in %) 45% 30% 16.45%
Production 270 Lac pieces 285 Lac pieces 98.70 Lac pieces

• Insurance

Our Company has taken up a range of insurance policies including:

1. Fire policies for our units buildings and offices raw materials work-in-progressand finished goods as well as entire stock maintained at all our Depot’s;

2. Marine policy for transit of raw materials and finished products in India and MarineExport policy;

3. Accidental & Health insurance facility for field staff;

4. Gratuity policy.

These insurance policies are reviewed annually to ensure that the coverage is adequate.All the policies are in existence and the premiums have been paid thereon.

• Internal Control System

• The Company has an adequate system of internal control commensurate with itssize and nature of business. These systems provide a reasonable assurance in respect ofproviding financial and operational information complying with applicable statutessafeguarding of assets of the Company and ensuring compliance with corporate policies. TheAudit Committee reviews adherence to internal control systems and internal audit reports.

• Preparation and issuance of financial reports to the shareholders and in themarket including the Annual Report and consolidated financial statements is reviewed bythe Audit Committee. The Company’s financial reporting process is controlled usingdocumented accounting policies and reporting formats supplemented by detailedinstructions and guidance on reporting requirements. The Company’s processes supportthe integrity and quality of data including appropriate segregation of duties. Thefinancial information of the parent entity and all its subsidiary entities which form thebasis for the preparation of the consolidated financial statements are subject to scrutinyby Group level senior management. The Company’s financial reports financialguidance Annual Report and consolidated financial statements are also reviewed by theAudit Committee of the Board prior of presenting to the Board of Directors for theirconsideration and approval.

• Detailed budgetary process includes identification of risks & opportunitieswhich is ultimately approved at Board level.

• Board approved the capital expenditure and Audit Committee approved the treasurypolicies which clearly defines authorization limits and procedures.

• An internal audit function reviews key financial / business processes and hasfull & unrestricted access to the Audit Committee.

• A risk management programme is placed throughout the Company whereby RiskManagement executive reviews and monitors the controls in place both financial andnon-financial to manage the risks facing the business.

SUBSIDIARY JOINT VENTURE AND ASSOCIATE COMPANIES

As on 31st March 2021 The Company has 4 (Four) subsidiary companies. One is registeredoutside India and three are registered in India:

S.No Name of the Entity Relationship
1. Veto Electricals Private Limited Wholly own Subsidiary
2. Veto LED Lighting Private Limited Wholly own Subsidiary
3. Veto Overseas Private F.Z.E. Wholly own Subsidiary
4. Vankon Modular Private Limited Subsidiary

The details with respect to subsidiary Companies are provided in the Annexure-I to theDirectors’ Report of the Company.

A separate statement containing the salient features of financial statements of all thesubsidiaries of your Company forms part of Annual Report in the prescribed Form AOC-1 asAnnexure II in compliance with Section 129 and other applicable provisions if any of theCompanies Act 2013.

The Financial Statements of the subsidiary companies and related information areavailable for inspection by the Members at the Registered Office of the Company during thebusiness hours up to the date of the Annual General Meeting (AGM) as required underSection 136 of the Companies Act 2013. Further in line with the SEBI (Listing Obligationsand Disclosures Requirements) Regulations 2015 and in accordance with IND AS - 110Consolidated Financial Statement prepared by the Company includes financial information ofits subsidiaries.

The standalone annual accounts of the subsidiary companies and the detailed relatedinformation shall be made available to Shareholders of the Company and of its subsidiarycompanies upon request and it shall also be made available on the website of the Companyi.e. www.vetoswitchgears.com

Names of Companies which have become or ceased to be its Subsidiaries Joint Venturesor Associate Companies during the year:

Veto acquired 95.5% stake in Vankon Modular Private Limited now it’s becomesubsidiary of Veto. Vankon Modular Private Limited do the same line of business. Same hasbeen disclosed in Annexure-I.

MANAGERIAL REMUNERATION

A) Information has been laid down under Section 197 (12) of the Companies Act 2013read with Rule 5(1) of Companies (Appointment and Remuneration of Managerial Personnel)Rules

The Nomination and Remuneration Committee continuously reviews the performance of theManaging Director Whole Time Director and Other Directors.

1. Remuneration paid to Directors

Name of Director Title Remuneration in Y ear 202021 Remuneration in Year 201920 % increase in Remuneration in comparison to last year Ratio of Remuneration to MRE
Mr. Akshay Kumar Gurnani Managing Director 2400000 1950000 23.08 8.91
Mr. Narain Das Gurnani Whole-time Director/ CFO 1200000 1200000 0.00 4.46
Mrs. Jyoti Gurnani Director 600000 600000 0.00 2.23

1. The remuneration disclosed here is upto 31st March 2021 as per theaudited Financial Statements.

2. The Median Remuneration of Employees is Rs.134669/- approx.

3. Median Remuneration is calculated on the basis on annualized salary MRE - MedianRemuneration of employees.

4. The median remuneration of employees was Rs. 134669/- as on 31st March 2021 andRs. 160803/- as on 31st March 2020. There is decrease in MRE during the financial year2020-21 of 16.25%.

5. On 31st March 2021 the total number of permanent employees on the rolls of Companyis 403 employees.

6. Average Salary decrease of non-managerial employees is (4.19) % and increase ofmanagerial employees is 23.08% in financial year 2020-21.

8. Remuneration paid during the year ended 31st March 2021 is as per the RemunerationPolicy of the Company.

Particulars of Employees

Your Directors confirmed that no employee fall under the particulars of Section 197 ofthe Companies Act 2013 read with Rule 5 (2) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014.

CORPORATE GOVERNANCE REPORT

Corporate Governance refers to laws regulations and acceptable business practicesthat determine relationship between corporate owners and its managers on one hand and itsinvestors on the other hand. The concept of Corporate Governance came to response thecorporate failures crises and misdeeds. In several economies corporate governanceconcentrates on at least four important factors: Ensuring disclosures of all relevantinformation to shareholders and creditors including business risk analyses; Building asystem of rules and voluntary practices that will guide the board of directors;establishing independent audit committees composed of outside directors; Monitoring andcontrolling management. Developing economies focus on strengthening and improving thelegal and regulatory systems that will ensure better enforcement of contracts andprotection of property rights.

Your Company is committed to achieve and maintain high standards of CorporateGovernance and places high emphasis on business ethics. Your Company has set upRemuneration Committee under Annexure 1-D of SME Equity Listing Agreement which was laterreconstituted under the name ‘Nomination and Remuneration Committee’ pursuant toprovisions of Section 174 of the Companies Act 2013.

A report on corporate governance confirming compliance of conditions as stipulatedunder SEBI (Listing Obligations and Disclosure Requirements) Regulation 2015 has beenincluded in Annexure III of this report.

The Company has laid down well-defined Code of Conduct that fairly addresses the issuesof integrity conflict of interest confidentiality and stress upon the need of ethicalconduct which forms the basis of good Corporate Governance. This code is applicable to allmembers of the Board and the Senior Management Personnel. The declaration regardingcompliance with Veto Switchgears and Cables Limited-Code of Conduct and Ethics for allBoard Me mbers and Senior Management Personnel of the Company has been included inAnnexure III of this report.

DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMP)

CHANGE IN DIRECTORS AND KMP DURING THE YEAR

There being no change in the Directors during the Financial Year. On 29.06.2020 Mrs.Varsha Ranee Choudhary was appointed as a company secretary in place of Ms. BhavnaGiamalani.

The Shareholders of the Company at their 13th Annual general meeting (AGM)held 29th September 2020 reappointed Mrs. Jyoti Gurnani (DIN: 06953899) asDirector whose office was liable to retire by rotation.

S. No. Name of the Directors Designation Date of Appointment
1. Mr. Akshay Kumar Gurnani Executive Managing Director and CEO 27/08/2014
2. Mr. Narain Das Gurnani Whole-Time Director and CFO 24/05/2016
3. Mrs. Jyoti Gurnan i Director 27/08/2014
4. Mr. Govind Ram Thawani Non-Executive Independent Director 22/08/2012
5. Mr. Kanwarjeet Singh Non-Executive Independent Director 06/05/2017
6. Mr. Hari Krishan Motwani Non-Executive Independent Director 28/09/2019

BOARD EVALUATION

Pursuant to the provisions of the Companies Act 2013 the Board has carried out anannual performance evaluation of its own performance that of its Committees andindividual Directors. Relevant details have been provided in the Corporate GovernanceReport.

REMUNERATION POLICY

Remuneration Policy of the Company has been laid down separately for:

1. labours

2. Office Staff

I. For labours

Labours Minimum Wages Act 1948 is applicable for fixing the remuneration of theLabours. Remuneration is payable on Hourly basis.

II. For Office Staff

The Committee will recommend the remuneration to be paid to the Managing DirectorWhole-time Director KMP and Senior Management of the quantity required to run the Companysuccessfully. The relationship of remuneration to performance should be clear and meetappropriate performance benchmarks. The Management of the Company may be provided inexcess of remuneration on the basis of outstanding performance performed by the employeeonly if the Company is not satisfied with the performance of the employee than the saidincrement can be restricted. The remuneration should also involve a balance between fixedand incentive pay reflecting short and long-term performance objectives appropriate to theworking of the company and its goals.

a. Managing Director

The remuneration and commission to be paid to the Managing Director shall be inaccordance with the provisions of the Companies Act 2013 and the rules made thereunder.Increments to the existing remuneration / compensation structure may be recommended by theCommittee to the Board which should be within the limits approved by the Shareholders.

b. Directors

The remuneration/compensation/commission etc. to be paid to the Directors will bedetermined by the Committee and recommend to the Board for approval.

c. Non-Executive Independent Directors

The Non-Executive Independent Director may receive remuneration by way of Sitting Feesfor attending meetings of the Board thereof. Provided that the amount of such fees shallbe subject to ceiling/limits as provided under Companies Act 2013 and rules madethereunder or any other enactment for the time being in force.

d. KMPs/ Senior Management Personnel

The Remuneration to be paid to KMPs/Senior Management Personnel shall be based on theexperience qualification and expertise of the related personnel and governed by thelimits if any prescribed under the Companies Act 2013 and rules made thereunder or anyother enactment for the time being in force.

e. Directors’ and Officers’ Insurance

Where any insurance is taken by the Company on behalf of its Directors KMPs/SeniorManagement Personnel etc. for indemnifying them against any liability the premium paid onsuch insurance shall not be treated as part of the remuneration payable to any suchpersonnel.

This Policy is updated based on the provisions of the Companies Act 2013 and rulesmade thereunder and requirements of the relevant rules and regulations issued by SEBI fromtime to time.

In case of any subsequent changes in the provisions of the Companies Act 2013 or anyother regulations which makes any of these provisions in the policy inconsistent with theAct or regulations then the provisions of the Act or regulations would prevail over thepolicy and the provisions in the policy would be modified in due course to make itconsistent with Law.

This Policy shall be reviewed by the Nomination and Remuneration Committee as and whenany changes are to be made in the policy due to change in regulations or as may be feltappropriate by the Committee. Any changes or modification in the policy as recommended bythe Committee would be given for approval of the Board of Directors.

NO. OF MEETINGS OF THE BOARD

In total Ten (10) Board Meetings were held during the year 2020-2021 and the gapbetween two consecutive meetings did not exceed 120 days. Following is the schedule ofBoard Meeting :

Detail of Board Meetings held

S. No. Date of Board Meeting

1. 29thJune 2020

2. 04thSeptember 2020

3. ^September 2020

4. 13th November 2020

5. 18th November 2020

6. 28th November 2020

7. 15thDecember 2020

8. 10th February 2021

9. 12th February 2021

10. 20th February 2021

DECLARATION BY AN INDEPENDENT DIRECTOR(S) AND RE-APPOINTMENT IF ANY

All Independent Directors of the Company have given declaration that they meet with thecriteria of independence as laid down under Section 149 (6) of the Companies Act 2013 andregulation 16(1)(b) of SEBI (Listing Obligations and Disclosure Requirements) Regulations2015. The terms & conditions for the appointment of Independent Directors are laiddown on the website of the Company and have been separately disclosed in the CorporateGovernance Report. http://www.vetoswitchgears.com/investor/corporate-governance/independent-directors.

COMMITTEES OF BOARD

Following are the four Committees of the Board namely:

a) Audit Committee

b) Nomination Remuneration & Compensation Committee

c) Corporate Social Responsibility (CSR) Committee

d) Stakeholders' Relationship Committee

Detail of all the Committees along with their composition charters dutiesresponsibilities activities and meetings held during the year have been provided in the"Report on Corporate Governance" as part of this Annual Report.

Name of Committee Composition of Committee
Audit Committee 1. Mr. Govind Ram Thawani - Chairman
2. Mr. Hari Krishan Motwani
3. Mr. Narain Das Gurnani
Nomination and Remuneration Committee 1. Mr.Govind Ram Thawani - Chairman
2. Mr. Kanwarjeet Singh
3. Mr. Hari Krishan Motwani
Shareholders’/Investors’ Grievance Committee 1. Mr.Govind Ram Thawani - Chairman
2. Mr. Narain Das Gurnani
3. Mr. Hari Krishan Motwani
Corporate Social Responsibility Committee 1.Mr. Govind Ram Thawani - Chairman
2. Mr. Hari Krishan Motwani
3. Mr. Narain Das Gurnani

CORPORATE SOCIAL RESPONSIBILITY (CSR)

The constitution composition terms of reference role powers rights obligations of‘Corporate Social Responsibility Committee [‘CSR Committee’] are inconformity with the provisions of Section 135 and all other applicable provisions of theCompanies Act 2013 read with the Companies (Corporate Social Responsibility Policy)Rules 2014. Relevant details have been provided in the Corporate Governance Report.

During the year under review the Company has spent Rs.21.00 lacs on Corporate SocialResponsibility as per the CSR policy of the Company.

The Annual report on CSR activities in accordance with the Companies (Corporate SocialResponsibility Policy) Rules 2014 is set out as Annexure IV forming part of this Report.

RISK MANAGEMENT

The Company has framed and implemented Risk Management Policy to identify the variousbusiness risks. This framework seeks to create transparency minimize adverse impact onthe business objectives and enhance the Company’s competitive advantage. The riskmanagement policy defines the risk management approach across the enterprise at variouslevels including documentation and reporting.

DIRECTORS RESPONSIBILITY STATEMENT

The Board of Directors acknowledge the responsibility for ensuring compliances with theprovisions of Section 134(3) (c) read with Section 134(5) of the Companies Act 2013 inpreparation of annual accounts for the year ended 31st March 2021 and state that :

(a) in the preparation of the annual accounts for the financial year ended 31st March2021 the applicable accounting standards have been followed along with proper explanationrelating to material departures;

(b) the Directors have selected such accounting policies being applied themconsistently and make judgments & estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company as at 31st March 2021 andprofit of the Company for that period;

(c) the Directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;

(d) the annual accounts have been prepared on a going concern basis;

(e) proper internal financial controls have been laid down which are adequate and areoperating effectively;

(f) proper systems have been devised to ensure compliance with the provisions of allapplicable laws and that such systems are adequate and operating effectively.

RELATED PARTY TRANSACTIONS

All transactions entered with Related Parties for the year under review were onarm’s length basis and in the ordinary course of business and that the provisions ofSection 188 of the Companies Act 2013 and the Rules made thereunder are not attracted.Thus disclosure in form AOC-2 in terms of Section 134 of the Companies Act 2013 is notrequired. Further there are no material related party transactions during the year underreview with the Promoters Directors or Key Managerial Personnel. The Company hasdeveloped a framework through Standard Operating Procedures for the purpose ofidentification and monitoring of such Related Party Transactions.

All Related Party Transactions are placed before the Audit Committee and also to theBoard for approval. Omnibus approval was obtained on yearly basis for transactions whichare of repetitive nature. Transactions entered into pursuant to omnibus approval areaudited and a statement giving details of all Related Party Transactions are placed beforethe Audit Committee and the Board for review and approval.

The Company has put in place a mechanism for certifying the Related Party TransactionsStatements placed before the Audit Committee and the Board of Directors from anIndependent Chartered Accountant. The policy on Related Party Transactions as approved bythe Board of Directors has been uploaded on the website of the Company viz.www.vetoswitchgears.com. None of the Directors has any pecuniary relationship ortransactions vis-a-vis the Company.

Pursuant to the provisions of SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 the Board has framed Policy on Material Subsidiaries and it is alsoavailable on Company’s websitehttp://vetoswitchgears.com/investor/corporate-governance/policies-and-related-documentsunder the head Policy on Material Subsidiary.

However a note on Related Party transactions may be referred to in the relevant notesof the Standalone Financial Statements.

LISTING OF SHARES

The shares of the Company are listed on recognized Stock Exchanges i.e. at Bombay StockExchange Limited & at National Stock Exchange of India Limited and the listing fee forthe year 2020-21 has been duly paid.

PREVENTION OF INSIDER TRADING

In compliance with the provisions of Securities and Exchange Board of India(Prohibition of Insider Trading) Regulations 2015 the Board has adopted a code ofconduct and code of practices and procedures for fair disclosure of unpublished pricesensitive information to preserve the confidentiality of price sensitive information toprevent misuse thereof and to regulate the trading by Insiders. The code of practice andprocedures for fair disclosure of unpublished price sensitive information is alsoavailable on the Company's website i.e. www.vetoswitchgears.com.

EXTRACT OF ANNUAL RETURN

A copy of the Extracts of the Annual Return of the Company as required under section134(3)(a) of theCompanies Act 2013 in Form MGT-9 as they stood on the close of thefinancial year i.e. 31st March 2021 is furnished in Annexure V and forms part of thisReport.

Further a copy of the Annual Return of the Company containing the particularsprescribed u/s 92 of the Companies Act 2013 in Form MGT-7 as they stoodon the close ofthe financial year i.e. 31st March 2020 is uploaded on Company’s website:http://www.vetoswitchgears.com/investor-zone/categorv/financial- information/reports/

AUDITORS

STATUTORY AUDITORS

Upon the recommendation of the Audit Committee The Company had appointed CAS & Co.Formerly known as M/s. K. M. Tulsian & Associates (Firm Registration No. 111075W) asthe Statutory Auditor(s) of the Company for a period of 5 years commencing from theconclusion of the 10th Annual General Meeting till the conclusion of 15 th Annual GeneralMeeting to be held in the year 2022 on such remuneration as may be mutually agreed upon bythe Board of Directors and the Auditors.

Our comments on financial statements referred to in the Auditor’s Reports underSection 145 of the Companies Act 2013 are given below:

a) With regard to the Emphasis on Matter appearing in the Auditor’s Report yourattention is drawn to the notes forming part of financial statements for the year whichare self-explanatory.

b) With respect to the comments of the Auditors in their report on the ConsolidatedAudit Report our responses against it are provided in the Notes to the FinancialStatements which is self-explanatory .

Details in respect of frauds reported by auditors:

There were no instances of fraud reported by the auditors.

COST AUDITORS

As per Section 148 of the Companies Act 2013 the Company is required to have theaudit of its cost records conducted by a Cost Accountant in practice.

The Board of Directors on the recommendation of Audit Committee were appointed M/s.Rajesh & Co. Cost Accountants (Firm Registration Number No. 000031) as Cost Auditorto audit the cost accounts of the Company for the Financial Year 2020-21 be paid aremuneration of Rs. 15000/- Plus Service tax . As required under the Companies Act 2013a resolution seeking member’s approval for the remuneration payable to the CostAuditor forms part of the Notice convening the Annual General Meeting for theirratification.

The due date for filing the Cost Audit Report of the Company for the financial yearended 31st March 2020 was filed in XBRL mode by the Cost Auditor within due date.

SECRETARIAL AUDITORS

The Board has appointed Ms. Nisha Agarwal Practicing Company Secretary to conductSecretarial Audit under the provisions of Section204 of the Companies Act 2013 for theFinancial Year 2020-21. The Secretarial Audit Report for the Financial Year ended 31stMarch 2021 is annexed herewith marked as Annexure VI to this Report. The Secretarial AuditReport does not contain any qualification reservation or adverse remark.

INTERNAL AUDITORS

The Board has appointed Mr. Kapil Motiramani as internal auditors of the Company forthe Financial Year 2020-21.

For the year 2021-22 the Board in its meeting held on 17th June 2021 hasre-appointed Mr. Kapil Motiramani as Internal Auditor.

CORPORATE GOVERNANCE CERTIFICATE

The Company is continuously submitting a "Quarterly Compliance Report on CorporateGovernance" as per SEBI (Listing obligations and Disclosure Requirements)Regulations 2015 with the Stock Exchanges.

The certificate from the Practicing Company secretary Ms. Nisha Agarwal C.P. No.8584 confirming compliance of conditions of Corporate Governance as stipulated under SEBI(Listing Obligations and Disclosure Requirements) Regulation 2015 has been included inAnnexures VII of this report .

DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS ORTRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY’S OPERATIONS IN FUTURE

There are no significant and material orders that are passed by the regulators orcourts or tribunal impacting the going concern status and Company’s operations infuture.

DETAILS WITH RESPECT TO ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THEFINANCIAL STATEMENTS

The Company has placed adequate internal financial controls with reference to financialstatements. During the year such controls were tested and no reportable materialweaknesses have been observed.

DEPOSITORY SYSTEM

Our Company’s Equity Shares are in dematerialized form through The NationalSecurities Depository Limited (NSDL) and The Central Depository Services (India) Limited(CDSL). The Company has already set the requisite facilities for dematerialization of itsEquity Shares in accordance with the provisions of Depository Act 1996 with NationalSecurities Depository Limited and Central Depository Services (India) Limited. The Companyhad entered into agreements with both the Depositories. Accordingly shares post IPO ofthe Company are held in demat form.

REPORT UNDER THE PREVENTION OF SEXUAL HARASSMENT ACT

As a good corporate citizen Veto is committed to a gender friendly workplace. It seeksto enhance equal opportunities for men and women prevents/stops/redresses sexualharassment at the workplace and institute good employment practices. Veto has establishedsuitable processes and mechanisms to ensure and address issues on sexual harassment ifany maintaining an open door for repartees. Veto encourages employees to report anyharassment concern and is responsive to complaints about harassment or any other unwelcomeand offensive conduct. An Internal Complaint Committee has been constituted to enquireinto the complaints and recommend appropriate action wherever required. Veto demandsdemonstrates and promotes professional behavior and respectful treatment of all employees.

During the year no complaints of sexual harassment were received.

CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EARNINGS & OUTGO

Disclosure pursuant to Section 134(3)(m) of the Companies Act 2013 read with Rule 8(3)of the Companies (Accounts) Rules 2014 have been made.

(A) CONSERVATION OF ENERGY

Company has taken several steps to conserve energy through its"Sustainability" initiatives and the Company continues its endeavor to improvemethods used for energy conservation and utilization. The Company has always beenconscious of the need for conserving energy and has always been sensitive in makingprogress towards this end. Energy conservation measures have been implemented at all theplants and offices of the Company and special efforts are being made on undertakingspecific energy conservation projects like:

1. Lighting: Continuous efforts are being made by the Company to reduce or optimize thelighting requirements at all the plants. Replacement of Conventional light fittings withLED light fixtures Installation of CFL and LED indicators Use of 54Wx4 T 5 lamps forassembly areas lead to savings in power at office areas.

2. Replacement of old equipment with new / energy efficient equipment.

3. Optimization of Electrical Equipment: In addition to the existing controls on primeproduction equipment and existing prime utilities equipment some electrical equipmentmodifications / additions being done for continuous monitoring of power factor of plant ondaily basis and redesign of pay off fixtures in cable division to reduce energyconsumption by 40%.

4. Company believes in sharing and implementing best practices across all plant. Stagewise replacement of all conventional light fittings to LED light fittings made across themanufacturing units. Impact of all the measures taken for reduction of energy consumptionwas seen.

The above measures have resulted in optimizing energy consumption and savings in costof production reduction in carbon emission and processing time.

Capital investment on energy conservation equipment’s - Efforts have been made byCompany to reduce or optimize the energy requirements at all the plants. Companyencourages capital investment in energy-saving equipment’s plants or machinery andhas invested a significant amount on the same.

(B) ENVIRONMENT HEALTH AND SAFETY

VETO is committed towards caring for people and the planet by integrating environmentaland safety principles in all the aspects of its business from procurement to materialusage from manufacturing of sustainable products to creating awareness through marketingor through innovation / R&D for better products and processes. We constantly monitorand innovate our environmental and occupational health and safety performance through ourinternal risk management mechanism. At the compliance level your Company confirms to allapplicable regulatory Environmental Health & Safety (EHS) requirements wherever itoperates.

Our Company is sensitive towards environmental and resource conservation and itsmanufacturing philosophies which ensure safety of the workers and surroundings. Being in anon-polluting category of business it causes minimal impact on the environment but has ahuge positive impact on the local community. Restriction of Hazardous Substances (RoHS )compliance in all its products like CFLs cables PCBs etc. ensures safety across theproduct life cycle. Our Company strongly believes and promotes energy conservation notonly through its products but also within the premises. Energy conservation measures havebeen adopted at all the plants.

Our Company follows best practices for health and safety. Employees and workers areregularly trained by industry experts on issues of occupational and industrial health& safety first-aid and environment management. Healthy lifestyle and well-being arealso promoted as a culture at VETO. Our Company also provides life insurance coverpersonal accident cover and robust medical & health policies to all field staffagainst any unfortunate incident. VETO India strongly believes in maintaining a balancedwork-life and therefore follows strict in-and-out work-timings. This has gone a long wayin maintaining a healthy happy and motivated workforce.

(C) TECHNOLOGY ABSORPTION

The Company is putting continuous efforts in acquisition development assimilation andutilization of technological knowledge through its wide advance engineering projectportfolio. This has enabled the Company to keep abreast with the latest developments inproduct technology manufacturing process and methods quality assurance and improvementmarketing management systems and benefited out of mutual experience. To develop ourproduct pipeline we commit substantial time efforts funds and other resources forR&D. Our processes and products for such development are fully tested. There is apossibility that it may not perform as expected and may not be able to successfully andprofitably produce and utilize such products or processes as thought. Therefore ourinvestments in R&D and new product launch could result in higher costs without aproportionate increase in revenues.

Company is carrying out the following activities to fulfill short term and long termbusiness goals:

• Up gradation of existing products and processes to save cycle time energyconsumption and overall operational efficiency.

• Import substitution and identification of new raw materials for development .

• Technology support to all plants to improve efficiency that enables businessgrowth.

• Optimization of products and processes to minimize waste generation and addressenvironmental and safety concerns.

• Development of smart test methods to speed up testing of incoming raw materials.

• Development of in house domain expertise to support product development.

• Focus on in house product development in the area of smart internet basesolution etc.

• The benefits derived like product improvement cost reduction productdevelopment or import substitution.

(D) DETAIL OF FOREIGN EXCHANGE EARNINGS AND OUTGO.

During the financial year Company’s Foreign Exchange Earnings in terms of actualinflow was 17978022.57/- INR and the Foreign Exchange Outgo in terms of actual outflow(including machinery imported) was 34414776/- INR. The information on foreign exchangeearnings and outgo is furnished in the notes to the accounts of Standalone Financialresults.

CREDIT RATING

Your Company has been reaffirmed long-term rating of BBB+ (ICRA triple B plus) shortterm rating of A2 by ICRA Limited. During the year ended 31st March 2021. The outlook oflong term rating is "Stable".

COMPLIANCE WITH SECRETARIAL STANDARDS

The Company is in compliance with the applicable Secretarial Standards issued by theInstitute of Company Secretaries of India and approved by the Central Government underSection 118(10) of the Act.

MANAGEMENT DISCUSSION AND ANALYSIS

The Management of Veto Switchgears and Cables Limited (‘he Company’) presentsthe analysis of the Company for the year ended on March 31 2021 and its outlook for thefuture. This outlook is based on assessment of the current business environment. It mayvary due to future economic and other developments both in India and Abroad.

OVERVIEW:

COVID-19 was not only a health crisis it had far-reaching implications on the globaleconomy. The pandemic led to a sharp decline in global trade lower commodity prices andtighter liquidity conditions.

FY21 was an extraordinary year for the Indian economy. India followed the rest of theworld in implementing a nationwide lockdown for most of Q1. While this helped curb thespread of the virus to some extent the contraction in GDP exacerbated unemployment wasbecause of reduced economic activity and restricted mobility due to COVID-19 as peoplecurtailed discretionary spending and focused on essentials and precautionary savings dueto the level of uncertainty which contributed to nearly half of India’s GDP.Progressive unlocking from June 2020 along with initiatives undertaken by the government(and the Reserve Bank of India) such as the economic stimulus that amounted to more than10% of the total GDP liquidity support lowering of interest rates and loan moratoriumsaided a sequential revival of the economy. Consumer’s sentiment and demand witnesseda sharp recovery in the second half of the year led by phased unlocking decreased numberof infections and hopes created by the vaccination drive. A normal monsoon and reversemigration accelerated the semi-urban and rural economy. However growth in urban Indiaremained affected by intermittent government restrictions.

We believe companies with strong values solid fundamentals and governance practicesrobust manufacturing distribution and marketing capabilities can leverage these long-termgrowth opportunities and play an important role in the process of nation rebuilding whilecreating greater value for all stakeholders. While Indian GDP growth for FY21 is expectedto contract by 8% YoY as per the estimates by the Ministry of Statistics and ProgrammeImplementation (MOSPI) and various other institutions such as the RBI IMF and othersproject India to grow in double digits in FY22. However the second wave of COVID-19 ismanifested to be more disruptive than the one prevailing given the spike in infectionrate and this has cast some uncertainty over the timing and extent of economic recovery.

INDUSTRY STRUCTURE AND DEVELOPMENTS:

During the year growth in the Electrical Goods sector was relatively weak largely onaccount of the pandemic. The electrical industry has immense growth potential especiallyconsidering the increased penetration of electricity and home improvement drive. Over theyears this industry has evolved rapidly with increasing participation of organizedplayers and gave more emphasis on branding. The nationwide lockdown in the first quarterdisrupted retail trade significantly. Consumer’s belief over the time made it a startwith gradual unlocking. Accordingly the second half of FY21 faced healthy growth acrossthe Electrical segment.

In this environment we are very well positioned to deliver accelerated growth with anintegrated portfolio that enables us to address the design build and maintain valuechains for clients across industries. While the company has faced COVID-19 challenges wehave significantly enhanced our ability to address new opportunities that are nowemerging. Improvements in access to electricity a surge in the sale of white goods andhigher demand for LED bulbs have driven demand from the domestic sector.

Growth in population has increased the need for residential and commercial spaces. Thenumber of buildings is growing rapidly in cities like Bengaluru and Gurugram. Thesedevelopments have increased the demand for electricity which has been driving the needfor power generation as well as transmission and distribution equipment in India.Consequently the electrical equipment market growth in India has been substantial.

Furthermore supportive government policies such as UDAY 2.0 24x7 - Power for AllSAUBHAGYA UJALA Scheme Green Energy Corridor and vehicle electrification have helped toboost the Indian power sector.

The Central Government has recently announced its intent to give production linkedincentives (PLI) to promote manufacturing in India.

In recent years there has been a significant improvement in power supplies to ruralareas due to Government’s rural electrification programmes.

C OMPANY OVERVIEW

Veto Switchgears and Cables Limited is one of the largest and most diversifiedmanufacturers of electrical and telecommunication cables. The Company has been maintainingits leadership in manufacturing of Industrial Wires and Cables since the last 50 years.This has been primarily due to its continuing investments in world- class technologymodernizing manufacturing capabilities and maintaining highest standards of quality andservice. Its recent foray into LED segment underpins its attempt to emerge as a leadingand preferred electric solutions provider from being a mere wires and cables manufacturer.

The addition of a unique range of products to its product portfolio has enabled thecompany to augment its reach and presence in the consumer products market. Its new segmentof business has made significant contributions in the overall performance of the company.

Major Products and segments

The comprehensive product portfolio of the company is designed to cater to the diverseelectrical requirements across domestic commercial and industrial markets. Delivering awide array of wires and electrical cables it is recognized as one of the leadingcompanies in the electrical accessories market.

> WIRES AND CABLES:

The Indian wire and cable industry is growing satisfactorily and getting more and moreconsolidated and becoming largely organized now. Due to the pandemic the first half ofthe year was challenging for the Indian Cable & Wire Industry as the demand from theIndustrial and Infrastructural segment was severely impacted and the recovery in thehousing sector was tepid. The second half of the year though has been promising supportedby positive demand in the residential segment and revival of Infrastructure projects.

The Central Government’s ‘Housing for All by 2022’ (20mn houses forurban poor and 30mn for rural poor) and Smart Cities (development of 100 cities) missionspromise to trigger fast-paced rollout of new homes. This should usher in multi-year growthfor electrical products and appliances. Increasing consumer focus on aesthetics and energyefficiency has also resulted in a notable shift towards branded products. With its abilityto offer competitive pricing superior product range & quality upgraded technologyand innovations more safety features and increased brand awareness VETO is well placedto offer an enriching consumer experience.

The infusion of funds by the Government in infrastructure projects implementation ofstrict RERA norms in real estate and push for schemes such as ‘Atma NirbharBharat’ and Saubhagya would help sustain demand for wires and power cables. Lowerinterest rate regime for home loans is expected to spur the first-time home buyers and theaffordable home segment.

The Wires and Cables division registered revenues Rs. 5308.29/-Lacs during FY 2020-21compared to revenues of Rs. 4290.41 Lacs FY 2019-20.

- AC CESSORIES & OTHERS:

Switchgear segment which is part of the Electrical Accessories & other segment isprimarily constituted by modular & non-modular switches and accessories.

India Switchgear Market (2017-2022) Report says that growing T&D network and ruralelectrification program coupled with infra development are the key factors driving theswitchgear market in India. Government schemes & initiatives such as UDAY & DDUGJYare expected to further fuel the growth of the switchgear market in the forecast period.According to 6 Wresearch report India switchgear market is projected to reach $3.7Billion by 2022.

Further Government initiatives to increase the penetration of clean energy are also amajor source of growth for the switchgear market in India.

The international market showing the price hike by 2024 for low voltage switchgearindustry further the growing demand for electrical and power sector in addition to theurbanization have increased the demand for electrical products and electrical protectionequipment.

The Indian power sector has an investment potential of Rs 15 trillion (US$ 225 billion)in the next 4-5 years thereby providing immense opportunities in power generationdistribution transmission and equipment. The government's immediate goal is to generatetwo trillion units (kilowatt hours) of energy by 2019. This means doubling the currentproduction capacity to provide 24x7 electricity for residential industrial commercialand agriculture use. The Goal is taking a number of steps and initiatives like 10- yeartax exemption for solar energy projects etc. in order to achieve Indio's ambitiousrenewable energy targets of adding 175 GW of renewable energy including addition of 100GW of solar power by the year 2022. The government has also sought to restart the stalledhydro power projects and increase the wind energy production target to 60-GW by 2022 fromthe current 20 GW.

Veto switchgear portfolio offers a complete range for Circuit protection for therapidly urbanizing Indian market. Though the real estate sector has been generallyunderperforming over the last couple of years an uptick in re sidential and commercialconstruction and ongoing electrification programmesof the Government would support growthof the switchgear market.

Post Covid there was sharp recovery in demand owing to our comprehensive product andfocus on expansion of semi-urban and rural markets. Veto was able to leverage itsmanufacturing capacity and requirement of the market.

The Accessories & Others division registered revenues of Rs. 4251.37/- Lacs duringFY 2020-21 compared to revenues of Rs. 3115.70/- Lacs FY 2019-20.

> LIGHTING AND FITTINGS:

India LED lighting market witnessed a surge in recent years on account of the growingpopulation and subsequent urbanization. With the increasing rate of electricityconsumption the demand for an environmentally friendly and cost-effective lightingsolution is also gaining traction. Hence in recent years LED lighting has started toconsiderably penetrate the mainstream general lighting market of India. According to 6Wresearch India LED Lighting Market size is projected to grow at a CAGR of 23.6% during2019-25. Several government schemes such as Unnat Jyoti by Affordable LEDs for All (UJALA)and Street Lighting National Programme (SLNP) remained the biggest demand drivers for theLED lighting market in India. The aim of such initiatives is to increase awareness amongthe consumers regarding the adoption of LED bulbs over conventional lighting sources suchas incandescent bulbs CFL and halogen lights. For instance under the SLNP thegovernment aims to replace over 1.34 crore conventional street lights in India out ofwhich around 1.04 crore street lights were already.

The Northern region accounts for the largest revenue share in the overall market inIndia followed by the Southern region. With several upcoming infrastructure projectsacross the residential industrial and commercial domains across several parts of thecountry the demand for LED lamps & luminaires is projected to witness significantgrowth over the coming years.

Veto is well placed in the Smart lighting led Fan CFL and other fancy Lightingsegment with a strong product profile well-entrenched trade network along with supportiveConsultants Contractors Specifiers.Veto has a strong presence both in the Consumerlighting and Professional luminaire market segment. Lighting is the spearhead product forthe journey of Veto on the verge of expansion into rural markets.

The Lighting and Fixtures division registered revenues Rs. 5705.96/- Lacs during FY2020-21 compared to revenues Rs. 4663.62/- Lacs FY 2019-20.

COMPETITION

The market comprises international and regional / local vendors who face intensecompetition from the unorganized vendors. The regional and unorganized players in themarket offer products at a comparative price which induces the well-establishedinternational electric wire and cable manufacturers to focus on differentiating theirproducts to sustain their market shares. In addition to innovative product offeringscable and wire manufacturers thus have also entered into various business strategies suchas mergers and acquisitions to acquire new technologies and have expanded their customerreach.

The leading vendors in the market are -

• Finolex Cables

• Havells India

• KEI Industries

• Polycab Wires

The other prominent vendors in the market are Cable Corporation of India AparIndustries Limited Cords Cable Industries KEC International LS Cable India ShilpiCable Technologies Universal Cable and V- Guard Industries.

MARKETING SETUP

Veto holds a major part of market share of electrical accessories in India. The companyhas a strong and efficient team of marketing professionals dealers and distributors. OurPromoters carry and share their vast experience in the marketing segment of wires andcables electrical accessories & other allied products. They have been indulging intomanufacturing and marketing segments for their products for the past over 40 years. Vetoholds a recognized reputation among its dealer network consisting of more than 2500 innumber. The selling price of the components to be manufactured is decided on the basis ofdesign complexities material used process gone through quantity period of supply etc.

Your Company had major earnings from the state of Rajasthan and Gujarat and now theMadhya Pradesh and Karnataka also forms the part of the major earnings due to ourcontinuous focus on widening and covering more and more states of India. Almost 15 stateshave become a major part of our distribution network including Maharashtra PunjabMadhya Pradesh Haryana Uttar Pradesh Jharkhand Karnataka Kerala New Delhi and Assam.The company has broadened its network and distribution channels. We have also had majorsuccess in some of the biggest cities of UAE. The company and its Board are continuouslyputting efforts toward making Veto a globally established brand. Our products are marketedin both domestic and international markets.

Strength

• Established brand in North West India South and central

• Experienced management team

• Organized and comprehensive product offering

• Established reputation for quality products

• Driving growth through innovation and marketing

• Our relationship with customers

• Our relationship with more than 2500 dealers

• Dedicated team of technical manpower

Weakness

• Player in regional market.

• Any avoidance of rules of Govt. caused under unavoidable circumstances may havean adverse impact on the project.

Opportunity

• The location of the unit is the hub of industry of the multiproduct category.This causes huge competition and thus helps the customer to differentiate between theaverage and the best product. The importers will get a variety of the products which willbe a healthy situation for the Industry ultimately.

• Opportunities for the Company have been growing due to increasing demand forwires & cables electrical accessories LED lights etc.

Threats

• Uncertainty due to COVID-19 disruption in business

• Our contingent liabilities not provided for if crystallized could adverselyaffect our financial condition.

• The loss of or shutdown of operations at our production facilities may have amaterial adverse effect on our business financial condition and results of operations.

• Low cost end-to-end business model being adopted by existing or new competitors.

• Heightened competitive intensity with externally-funded players looking to driveaggressive strategies in the market.

• Changes in the fiscal policies by the Government.

• Shifts in the size or demographic composition of the market area

RISK AND CONCERNS:

1. Common Risks: Accidents in the workplace fires earthquake tornadoes and anyother natural disasters

2. Legal Risks fraud Theft etc.

3. Uncertainties in financial markets

4. Failure in Projects

5. Credit Risks

6. Outstanding Debtors

7. Security and Storage of Data and Records

8. Competitors have market standing out of Rajasthan

The Company has a risk identification and management framework appropriate to it and tothe business environment under which it operates. Risks are being identified at regularintervals by the Board.

The Company has a Risk Management Policy which provides an overall framework of RiskManagement in the Company. The Board of Directors is responsible for the assessmentformulation and implementation of guidelines managing key risks risk minimizationprocedures and periodicals review .

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The company has adequate systems of internal control commensurate with its size and thenature of its operations. These have been designed to provide reasonable assurance withregard to recording and providing reliable financial and operational informationcomplying with applicable statutes safeguarding assets from unauthorized use or lossesexecuting transactions with proper authorization and ensuring compliance with corporatepolicies. The company has a well-defined manual for delegation of authority for approvingrevenue and expenditure. The company uses an updated system to record data for accountingconsolidation and management information purposes connecting to different locations forthe exchange of information.

The internal audit process is designed to review the adequacy of internal controlchecks and covers all significant areas of the company’s global operations.

The company has an Audit Committee of the Board of Directors the details of which havebeen provided in the corporate governance report.

Whistle Blower Policy

The Company promotes ethical behavior and has put in place a mechanism for reportingillegal and unethical behavior. The Company has a Vigil mechanism and Whistle BlowerPolicy under which the employees are free to report violations of applicable laws andregulations and the Code of Conduct. The reportable matters may be disclosed under thesupervision of the Audit Committee. Employees may also report to the Chairman of the AuditCommittee. During the year under review no employee had reported to the Committee.

FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE:

This has been dealt with in the Director Report.

HUMAN RESOURCES / INDUSTRIAL RELATIONS:

VETO encourages a culture of trust and mutual respect. Employees are aligned to commonobjectives and take pride in the quality of the products that enhance the factory for salein the markets. We have always realized the importance of human capital and dulyacknowledge it in our business operations. Your Company has managed to create and build"Lifers" at VETO- people who have been associated with the Company have startedearning life at VETO. It ensures stability and satisfaction when we realize that ourpartners in success trust us to such an extent that they stand by us at all times.

Their experience skills knowledge ideas and enthusiasm are an invaluable asset. Wehumbly acknowledge their contributions with competitive compensation and benefits thatappropriately reward performance. Pay revisions and other benefits are designed in such away to compensate for the good performance of the employees of the Company.

The talent pool of your Company has steadily evolved with changing times with freshtalent being infused to meet demanding situations. The Company has a scalable recruitmentand human resource management process which enables us to attract and retain high caliberminds.

Inspired by the commitment to quality and core values of honesty and transparency yourdirectors and employees look forward to the future with confidence and stand committed forcreating an even brighter future for all our stakeholders.

The Company had a total of 403 permanent employees as on 31st March 2021.

KEY FINANCIAL RATIOS:

The key financial ratios are given as below:

Ratio FY 2020-21 FY 2019-20 Reason
Debtors turnover (times) 2.80 2.66 Due to prevailing industry Practice
Inventory turnover (times) 2.50 2.14 Due to reduction of Inventory Level
Interest Coverage Ratio (times) 13.79 5.23 Due to lesser utilization of CC limit
Current Ratio (times) 2.47 2.98 Due to reduce creditor level
Debt-Equity Ratio (times) 0.20 0.16 Due to reduction in debt
Operating Profit Margin (%) 15.78% 16.09% Due to Increase in Advertising cost
Net Profit Margin (%) 11.87% 9.16% Slightly increase in marginal profit on account of increase in Turnover
Return on Net Worth (%) 10.73% 7.25% Due to higher Net worth

DISCLAIMER CLAUSE

Statements in Management Discussion and Analysis describing the Company’sobjectives projections estimates expectations or predictions are forward lookingstatements within the meaning of applicable securities laws and regulations. Actualresults could differ materially from those either expressed or implied. Important factorsthat could make a difference to the Company’s operation include among otherseconomic conditions affecting demand /supply and price conditions variation in prices ofraw materials changes in Government regulations tax regimes economic developments andother incidental factors .

ACKNOWLEDGEMENT

We thank our customers vendors investors and bankers for their intense supportthroughout the year. We place on record our appreciation of the contribution made by ouremployees at all levels. We thank the Government of India particularly the Ministry ofCommerce Ministry of Finance Ministry of Corporate Affairs the Custom and ExciseDepartments Income Tax Department the Reserve Bank of India the State Government(s) andother government agencies for their support and look forward to their continued supportin the future.

Date: 04/09/2021

for and on behalf of the Board of Directors

Place: Jaipur Sd/- - Sd/
Akshay Kumar Gurnani Narain Das Gurnani
Managing Director & CEO Whole-time Director & CFO
DIN: 06888193 DIN: 01970599

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