TO THE SHAREHOLDERS
The Board of Directors has the pleasure of presenting its Thirty NinethAnnual Report of the business and operations of your Company together with the AuditedFinancial Statements of the Company for the financial year ended March 31 2022.
SUMMARY OF FINANCIAL RESULTS & STATE OF COMPANY'S AFFAIRS
|Description || || || |
Amount (`in lakhs)
| ||Standalone || ||Consolidated || |
| ||2021-22 ||2020-21 ||2021-22* ||2020-21 |
|Revenue from Operations ||132394.90 ||150205.52 ||132394.90 ||150205.52 |
|Other Income ||3100.63 ||2369.80 ||3100.63 ||5531.43 |
|Earnings before Finance Costs Depreciation and Tax ||19106.14 ||23386.83 ||33735.81 ||45188.90 |
|Finance Costs ||5685.96 ||7803.47 ||5685.96 ||7803.47 |
|Profit before Depreciation and Tax ||13420.18 ||15583.36 ||28049.85 ||37385.43 |
|Depreciation and Amortization ||2219.97 ||2336.82 ||2219.97 ||2336.82 |
|Profit before Tax ||11200.21 ||13246.54 ||25829.88 ||35048.61 |
|Tax Expenses ||2739.62 ||2890.92 ||6501.91 ||8040.71 |
|Net Profit for the year ||8460.59 ||10355.62 ||19327.97 ||27007.90 |
* Not comparable with that of the previous financial year 2020-21 forthe reason as stated in detail under the heading "SUBSIDIARIES ASSOCIATES AND JOINTVENTURE".
The financial statements for the financial year ended March 31 2022have been prepared in accordance with Ind AS in terms of the provisions of Section 133 ofthe Companies Act 2013 read with the Companies (Indian Accounting Standards) Rules 2015as amended from time to time.
GENERAL & CORPORATE MATTERS
Your Company continues to operate in two business segments i.e. Cableand Engineering Procurement and Construction (EPC). There has been no change in the natureof business of the Company.
During the year under review your Company achieved revenue fromoperations of ` 132394.90 lakhs as compared to ` 150205.52 lakhs in the previous yearregistering a decline of about 11.86%. The EPC business segment registered a decline inrevenue of 22.12% because of temporary slowdown in order booking as a result ofrecaliberation of Company's EPC business segment business model whereas Cablebusiness segment has registered an increase of 16.25% in revenue in comparison with theprevious year due to increased volume of business in specialty cables and associatedequipment/accessories. Despite improved business leverages in cable business segment theStandalone Profit before Depreciation and Tax of the Company for the year stood at lowerlevel of ` 11200.21 lakhs as compared to ` 13246.54 lakhs in the previous year primarilybecause of lower revenue from operations in Company's EPC business segment supplychain disruption due to Covid-19 pandemic and higher commodity prices as compared toprevious year. The detailed operational working of your Company for the year is providedin the Management Discussion and Analysis forming a part of this Report.
The pandemic has dramatically accelerated the pace of technologyadoption across industries and sectors and created a more digitally savvy eco-system. Inaddition the digital transformation in India is increasing data consumption exponentiallythereby necessitating huge broadband network infrastructure and setting up of data centreslocally. With sustainability increasingly becoming a key business priority for Indianorganisations emerging technologies like Big Data Artificial Intelligence MachineLearning and 4G/5G are reshaping the way businesses operate. While innovation continues tobe main focus the enterprises are looking to increase productivity and improve customerexperience thereby ushering fourth industrial revolution resulting in increasinglyinterconnected society which is fully dependent on robust broadband/backbone telecominfrastructure. The telecom operators and internet service providers have scaled up theirfibre-based broadband networks in a major way post the Covid-19 pandemic therebyincreasing India's mobile and fixed broadband penetration. However despite theseefforts the level of mobile and fixed broadband penetration in India remains low incomparison to global markets indicating a huge untapped potential in this market. Inspiteof the accelerated pace of digitisation which is going to get faster and more intenseIndia is still trailing in the commercial launch of 5G services that hold out promise ofcatapulting its digital economy through its transformative capacity for vast swathes ofservices. As per available information the 5G spectrum auction is expected to take placein second quarter of the current fiscal year paving the way for commercial launch of 5Gservices thereafter leading to criticality of continuous improvements by the telecomoperators in network infrastructure to stay ahead of curve given the fact that newtechnologies are emerging rapidly. This is expected to play a major demand driver foroptical fibre cables as telecom operators need to make investment in robust and reliablecommunication infrastructure to meet the huge bandwidth upload/ download capabilities withvery high speed transmission characteristics. Further in order to enable faster rolloutof 5G networks by reducing time taken by telecom operators to obtain clearances for layingoptical fibre cable and setting up cellular towers among other infrastructure theDepartment of Telecommunications has recently launched "Gati Shakti Sanchar" acentralised portal which will help reduce the time for clearing RoW applications. It isproposed that all 36 States and Union Territories will be part of the centralised portaland the portal will be empowered with legal backing in future bringing clarity andaccountability to the process of obtaining RoW clearances. By facilitating timely disposalof RoW applications of telecom service providers and infrastructure providers the portalwill help in enabling speedy infrastructure creation thereby enabling timely roll-out of5G services. As the government intends to significantly increase India's opticalfibre footprint this augurs well for the Company's EPC business segment whichinteralia operates through IP-1 for networks rollout besides being a leading turnkeyinfrastructure providers to telecom operators. Global Optical Fibre and Cable marketlargely maintained their upward momentum in the beginning of 2022. Optical Fibre Cableconsumption grew by almost 10% surpassing 126 million fibre KMs in the first quarter ofcalendar year 2022 as compared to corresponding quarter of previous fiscal year. The barefibre price(s) also increased noticeably in Europe and India owing to the increase in theprices of almost all the key raw materials. Your Company's Electron Beam Irradiationfacility ("E-Beam cable facility") which helps to cross link the Polymer jacketof the cables have been successfully stabilized and is now operating at par optimumcapacity level and delivering superior products conforming to national and internationalstandards for a variety of applications. In order to derive economies of scale yourCompany has already planned for further increase in the capacity of E-Beam Cable facilityto cater to the increased business demands in all the user segments like solar energyrailways ship building and the new technology segments. Further the Board of Directorsof the Company in its meeting held on May 23 2022 has approved a Technology CooperationAgreement with Huber + Suhner AG Switzerland ("H+S") for the exclusive licenseon the licensed patents the licensed trademarks and right to use the licensesknow-how/technology to manufacture and sale of globally renowned RADOXR families cables inIndia by making use of H+S business processes to Indian Railways its allied companies andalso for the Metro and high speed railway projects (Rolling Stock Industry) applicationetc. The said Agreement will enlarge Company's E-Beam cable products range to meetthe ever increasing demand in Railway infrastructure projects which is likely to open newfrontier of growth opportunities. This should auger well for the Company on a long termbasis. Your Company's expertise in successfully manufacturing specialty communicationcables for rugged field applications has come in very handy and it helped the Company toachieve good results despite the challenges posed by the Pandemic during the first quarterof the financial year 2021-22. As the country is improving the infrastructure facilitiesfor the masses in the big way and it is only going to exponentially develop mega projects.Your Company's EPC division is well positioned to execute large ticket(s) turnkeyprojects across the business verticals like Telecommunications Defence Water includingJal Jeevan Mission/Rural Water supply Power sub-transmission and distribution Gaspipeline including city gas distribution infrastructure projects and other alliedverticals. In addition as one of the largest standalone licensed infrastructure providercategory-1 (IP-1) for optical fibre cable based networks and given the recent seminalreforms for the telecom sector announced and implemented by the Government of India theCompany is fully geared to manage the macro shift that is changing the fundamental natureof business of telecommunication cables to create a value proposition for telecom serviceproviders. Your Directors are pleased to report that the Company's IP-1 optical fibrecable infrastructure is today recognised for best in class network quality deliverystandards and fully conforms to the highest uptime requirement stipulation in the telecomspace.
During the year under review the Company continued its focus onjudicious capital allocation and incurred capital expenditure aggregating to ` 822.52lakhs consisting of addition to (a) Buildings of ` 50.74 lakhs; (b) Plant & Equipmentof ` 755.20 lakhs; and (c) Other Fixed Assets of ` 16.58 lakhs for further capacityexpansion/augmentation.
After considering the Company's profitability free cash flowoverall financial performance and other parameters the Board of Directors of your Companyis pleased to recommend a Dividend of ` 10/- (previous year ` 10/-) per equity share offace value `10/- each (i.e.100%) for the financial year ended on March 31 2022. Thepayment of Dividend will be subject to deduction of Tax at source as per the prescribedrate under Income Tax Act 1961 and rules made thereunder. The distribution of Dividend onequity shares if approved by the Members at the ensuing Annual General Meeting willresult in pay out of ` 1185.09 Lakhs. No amount has been transferred to the GeneralReserve for the financial year 2021-22. The Board of Directors of the Company in itsmeeting held on June 29 2021 has formulated a Dividend Distribution Policy in compliancewith Regulation 43A and other applicable provisions of the Listing Regulations as amendedfrom time to time and the same is uploaded on the Company's website and can beaccessed at weblink: https://www.vtlrewa.com/Investor_Relation/Disclosure_Regulation46(2)/Company's_Policies/Dividend-Distribution-Policy-29.06.2021.pdf
The disclosure relating to year wise amount of unpaid/unclaimeddividend lying in Unpaid Dividend account and the corresponding shares which are liable tobe transferred to the Investor Education and Protection Fund (IEPF) during the currentfinancial year and the due date of such transfer is provided in the Corporate GovernanceReport which forms a part of the Annual Report.
The paid-up Equity Share Capital of the Company as at March 31 2022stood at ` 1185.09 Lakhs. During the year under review the Company has neither issuedshares with differential rights as to dividend voting or otherwise nor has granted stockoptions or sweat equity under any scheme. Further none of the Directors of the Companyholds investments convertible into equity shares of the Company as on March 31 2022.
During the Financial Year 2021-22 the Company has not issued changedreclassified or sub-divided converted or reduced any Equity Shares/ConvertibleSecurities/Warrants/ Sweat Equity Shares/Employee Stock Options and there is no change invoting rights and buy back of shares.
Your Company has not accepted any public deposits during the yearwithin the 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 cashflows and working capital management. Moreover by reduction in overall borrowings yourCompany ensured efficiency in Finance Cost to the extent feasible under the prevailingcircumstances. The Company has redeemed 340 Non-Convertible Debentures (NCDs) aggregatingto ` 3400.00 lakhs alongwith accrued interest thereon during the year under review andbalance 160 NCDs aggregating to ` 1600.00 lakhs plus interest but not due thereon areoutstanding as at the end of the financial year. The Company's financial disciplineand prudence is also reflected in the reasonable credit rating ascribed by the ratingagencies.
Pursuant to Regulation 34(3) read with Para C of Schedule V of the SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 as amended from timeto time ("Listing Regulations") the Management Discussion and Analysis Reporton Corporate Governance and a Certificate by the Managing Director & CEO confirmingcompliance by all the Board Members and Senior Management Personnel with Company'sCode of Conduct and Auditors' Certificate regarding compliance of conditions ofCorporate Governance are made a part of the Annual Report.
CORPORATE SOCIAL RESPONSIBILITY INITIATIVES
As a part of its initiative under Corporate Social Responsibility(CSR) your Company has undertaken CSR projects and programmes in the areas of (i) Animalwelfare; (ii) Promoting healthcare including preventive healthcare and sanitationfacilities; (iii) Ensuring Environmental Sustainability; and (iv) disaster managementincluding relief and rehabilitation activities in and around the local/nearby area(s)where the Company operates. These activities are largely in accordance with Schedule VIIof the Companies Act 2013 read with Companies (Corporate Social Responsibility Policy)Rules 2014 and the Company's CSR Policy. The Annual Report on CSR activities asrequired under the Companies (Corporate Social Responsibility Policy) Rules 2014 is givenin Annexure-I which is attached hereto and forms a part of the Directors'Report. The Corporate Social Responsibility Policy of the Company is available on thewebsite of the Company i.e.https://www.vtlrewa.com/Investor_Relation/Disclosure_Regulation46(2)/Company's_Policies/CSR-Policy-27.03.2021.pdf
DIRECTORS' RESPONSIBILITY STATEMENT
To the best of their knowledge and belief and according to theinformation and explanations obtained by them your Directors make the followingstatements in terms of Section 134(3)(c) of the Companies Act 2013: (a) that in thepreparation of the annual financial statements for the year ended March 31 2022 theapplicable accounting standards read with requirements set out under Schedule III to theCompanies Act 2013 have been followed and there are no material departures from the same;(b) that such accounting policies as mentioned in Notes to the financial statements havebeen selected and applied consistently and judgement and estimates have been made that arereasonable and prudent so as to give a true and fair view of the state of affairs of theCompany as at March 31 2022 and of the profit of the Company for the year ended on thatdate; (c) that proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordance with the provisions of 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 goingconcern basis; (e) that proper internal financial controls were in place and that thefinancial controls were adequate and were operating effectively; and
(f) that proper systems to ensure compliance with the provisions of allapplicable laws were in place and that such systems were adequate and operatingeffectively.
RISK MANAGEMENT AND ADEQUACY OF INTERNAL FINANCIAL CONTROLS
Your Company's system of financial and compliance controls withreference to the financial statements and risk management is embedded in the businessprocess by which the Company pursues its objectives. Additionally the Audit Committee andthe Board of Directors assess and monitor regularly the framework for identificationevaluation and prioritization of risks mechanism to mitigate risks process thatmethodically track governance objectives risk ownership/accountability compliance withpolicies and decisions that are set through the governance process risks to thoseobjectives and services and effectiveness of risk mitigation and controls besides inherentrisks associated with the products/goods and services dealt with by the Company as well asexecution of turnkey projects of EPC business segment. Your Company's approach toaddress business risks and compliance functions is comprehensive across both the businesssegments and includes periodic review of such risks and a framework for mitigating andreporting mechanism of such risks. In the opinion of the Board of Directors there are nomaterial risks which may threaten the existence of the Company.
In addition the Board of Directors of the Company in its Meeting heldon June 29 2021 has constituted a Risk Management Committee in compliance with theRegulation 21 and other applicable provisions of the Listing Regulations as amended. TheRisk Management Policy of the Company has also been formulated by the Board of Directorsin compliance with the applicable provisions of the Listing Regulations and the CompaniesAct 2013 which lays down the procedures about the risk assessment and mitigation thereof.The Company has laid down the policies and procedures for internal financial controls forensuring 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 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 financialcontrols environment which provides assurance on the efficiency of Company's businessoperations coupled with adherence to its established policies safety/security of itsassets besides orderly and legitimate conduct of business in the circumstances which mayreasonably be foreseen. The Company has defined organisation structure authority levelsdelegated powers internal procedures rules and guidelines for conducting businesstransactions. The Company's system and process relating to internal controls andprocedures for financial reporting have been designed to provide reasonable assuranceregarding the reliability of financial reporting and the preparation of financialstatements for external purposes in accordance with the Companies Act 2013 Companies(Indian Accounting Standards) Rules 2015 and other relevant provisions of the Act andrules made thereunder and all other applicable regulatory/statutory guidelines etc. fordisclosures with reference to financial statements. Your Company's internal controlsystems are supplemented by an extensive program of internal audit by an independent firmof Chartered Accountants. Internal audits are conducted at regular intervals and a summaryof the observations and recommendations of such audits are placed before the AuditCommittee. The Internal Auditors as well as the Audit Committee conduct an evaluation ofthe adequacy and effectiveness of the system of internal financial controls system on anongoing basis. The Board has also implemented systems to ensure compliance of allapplicable laws to the Company which were effective and operative. At quarterly intervalsthe Company Secretary & Compliance Officer places before the Board a certificatealongwith a detailed statement certifying compliance of various laws and regulations asapplicable to the business and operations of the Company after obtaining from allfunctional heads responsible for compliance of such applicable laws and regulations. TheCompany Secretary is responsible for compliance of corporate laws including the CompaniesAct 2013 SEBI Act and rules/guidelines other corporate laws/rules and regulations andListing Regulations including any statutory amendment(s) modification(s) or enactment(s)thereto to the extent apply and extend to the Company.
INDUSTRIAL RELATIONS AND SAFETY
Industrial relations remained cordial throughout the year. YourDirectors recognize and appreciate the sincere and hard work loyalty dedicated effortsand contribution of all the employees in the continued satisfactory financial performanceof the Company. The Board would also like to place on record its appreciation fordedicated and exemplary services rendered by employees at all levels in the prevailingchallenging times in ensuring safe and reliable operations/project(s) execution throughoutthe year. The Company's management stands stoically with all employees and theirfamilies committed to their safety security and well-being in the fast changingemployee-employer relationship in the last three years and is trying to reimagine valueproposition by putting in place creative structure for employees at all levels that allowsinnovation growth to work and accelerate competitive advantage to the Company.
Your Company continues to accord a very high priority to bothindustrial safety and environmental protection and these are ongoing process at theCompany's plant and facilities and also at respective project sites to maintain highawareness levels. The Company has stressed the need to adopt the highest safety standardson projects undertaken by the Engineering Procurement and Construction (EPC) businesssegment with the emphasis on ensuring safety on all projects under execution. Your Companyis conscious of the importance of environmentally clean and safe operations so as toensure safety of all concerned and compliance of applicable environmental regulations andto this end working continuously towards reduction in waste for disposal. The Company as apolicy re-evaluates safety standards and practices from time to time including through itssafety committee with representation from all areas of manufacturing and follow up throughregular meetings to take progress and action item in order to raise the bar of safetystandards for its people as well as users and customers. The Company is also acceleratingESG strategies as well as resilience to the dynamics that are taking place globallybecause of climate change by learning adapting and innovating towards a new context.
Your Company's manufacturing facilities continue to remaincertified by independent and reputed external agencies as being compliant as well asaligned with the external standards for Quality Management System as per ISO 9001:2015& TL 9000 R6.3/R5.7 H Environmental Management System as per ISO 14001:2015Occupational Health and Safety Management System as per ISO 45001:2018 BusinessContinuity Management System as per ISO 22301:2012 Rail Quality Management System as perISO/TS 22163:2017 and Information Security Management System as per ISO 27001:2013. Duringthe year the audits for these Certifications established continuous improvement inperformance against these standards.
Shri J. Veeraraghavan Non-Executive Independent Director of theCompany left for heavenly abode on June 3 2021. The Board of Directors expresses withutmost grief its heartfelt condolences on the sudden and untimely sad demise of Shri J.Veeraraghavan who will always be remembered for his endearing and noticeable qualities ofmodesty and simplicity for someone of his stature and bearings.
During the year under review Shri P.S. Dasgupta (DIN: 00012552) hasbeen appointed as a Non-Executive Independent Director of the Company not liable toretire by rotation for a period of Five (5) consecutive years with effect from November21 2021 to November 20 2026 vide an Ordinary Resolution passed by the members of theCompany through Postal Ballot on December 24 2021. In accordance with the provisions ofSection 152 of the Companies Act 2013 and the Company's Articles of AssociationShri D.R. Bansal (DIN: 00050612) Director shall retire by rotation at the ensuing AnnualGeneral Meeting and being eligible has offered himself for re-appointment as a Director ofthe Company. The Board recommends his re-appointment for the consideration of the membersof the Company at the ensuing Annual General Meeting. As required under the Regulation36(3) of the Listing Regulations and relevant provisions of the Secretarial Standard onthe General Meeting (SS-2) the brief resume and other details of Shri D.R. Bansal aregiven as the Annexure to the Notice of the ensuing Annual General Meeting which is beingsent to the shareholders along with the Annual Report.
BUSINESS RESPONSIBILTY REPORT
In compliance with the Regulation 34(2) of the Listing Regulations theBusiness Responsibility Report for the year ended March 31 2022 and the requireddisclosures thereunder form an integral part of the Annual Report.
KEY MANAGERIAL PERSONNEL
Shri Y.S. Lodha Managing Director & CEO Shri Saurabh ChhajerChief Financial Officer and Shri Dinesh Kapoor Company Secretary are the Key ManagerialPersonnel of the Company. Shri Dinesh Kapoor was appointed as the Company Secretary of theCompany with effect from August 1 2021 in place of Shri Hitesh Wadhera who resigned fromthe post of Company Secretary of the Company with effect from the close of Business hoursof July 31 2021.
DECLARATION BY INDEPENDENT DIRECTORS
All Independent Directors of your Company viz. Shri S.K. Misra ShriR.C. Tapuriah Shri Shiv Dayal Kapoor Smt. Kiran Aggarwal and Shri P.S. Dasgupta haveseverally given a declaration pursuant to Section 149(7) of the Companies Act 2013 thatthey meet the criteria of Independence as laid down under Section 149(6) of the CompaniesAct 2013 and that they are registered in the data bank of Indian Institute of CorporateAffairs for life time as per Section 150 of the Companies Act 2013 and rules made thereunder. They have Confirmation also furnished the Declaration and pursuant to Regulation25(8) of the Listing Regulations affirming compliance to the criteria of Independence asprovided under Regulation 16(1)(b) of the Listing Regulations as amended. The IndependentDirectors have individually confirmed that they are not aware of any circumstances orsituation which exist or may be reasonably anticipated that could impair or impact theirability to discharge their duties with an objective independent judgment and without anyexternal influence. Based on the declarations and confirmations of the IndependentDirectors and after undertaking due assessment of the veracity of the same the Board ofDirectors recorded their opinion that all the Independent Directors are independent of theManagement and have fulfilled all the conditions as specified under the governingprovisions of the Companies Act 2013 and the Listing Regulations.
MEETINGS OF BOARD AND COMPOSITION OF COMMITTEES
During the year under review the Board met 5 times viz. on June 292021 August 12 2021 September 9 2021 November 11 2021 and February 10 2022.
As required under Section 177(8) read with Section 134(3) of theCompanies Act 2013 and the rules framed thereunder the composition and meetings of theAudit Committee were in line with the provisions of the Companies Act 2013 and theListing Regulations. During the year under review all the recommendations of the AuditCommittee were accepted by the Board of Directors. The requisite details of AuditCommittee alongwith composition number of meetings of all other Board Committees heldduring the year under review and attendance at the meetings are provided in the Report onCorporate Governance forming a part of the Annual Report.
PERFORMANCE EVALUATION OF BOARD COMMITTEES & DIRECTORS
Pursuant to the Provisions of the Companies Act 2013 and ListingRegulations and the Guidance Note on Board Evaluation issued by SEBI the Board ofDirectors of the Company carried out the annual evaluation of its own performance and thatof its Committees and individual Directors inter-alia to assess the skill set andcontribution that are desired recognising that competencies and experiences evolves overtime. The manner in which annual evaluation has been carried out by the Board of Directorsis given in the Report on Corporate Governance which forms a part of the Annual Report.During the process of evaluation the Board of Directors also considered the criteria forevaluation of performance of Independent Directors and the Board of Directors formulatedby the Nomination and Remuneration Committee. The Independent Directors carried out theannual performance evaluation of the Chairman (taking into account the views ofnon-executive directors and the Managing Director) the Non-Independent Directors and theBoard as a whole and the same was also reviewed and deliberated by the Board ofDirectors. The performance evaluation of independent directors was carried out by theentire Board of Directors excluding the directors being evaluated. In conclusion theBoard of Directors was satisfied with the performance and functioning of the Board itsCommittees and individual members.
SELECTION AND APPOINTMENT OF DIRECTORS AND THEIR REMUNERATION
The Board of Directors in consonance with the recommendation ofNomination and Remuneration Committee (NRC) has adopted a terms of reference whichinter-alia deals with the criteria for identification of members of the Board ofDirectors and selection/appointment of the Key Managerial Personnel/Senior ManagementPersonnel of the Company. The NRC recommends appointment of Director/ appointment orre-appointment of Managing Director based on their qualifications expertise positiveattributes and independence/ professional expertise in accordance with prescribedprovisions of the Companies Act 2013 and rules framed thereunder and Listing Regulations.The NRC in addition to ensuring diversity of race and gender also considers the impactthe appointee would have on Board's balance of professional experience backgroundviewpoints skills and areas of expertise.
The Board of Directors in consonance with the recommendation ofNomination and Remuneration Committee has also adopted the Remuneration Policy for theDirectors Key Managerial Personnel and Senior Managerial Personnel. The guidingprinciples of the Remuneration Policy are stated in the Report on Corporate Governancewhich forms part of the Annual Report. The Remuneration Policy is uploaded on the websiteof the Company and the weblink of the same is https://www.vtlrewa.com/Investor_Relation/Disclosure_Regulation46(2)/Company's_Policies/Remuneration-Policy-16.05.2019.pdf
VIGIL MECHANISM / WHISTLE BLOWER POLICY
In terms of the provisions of Section 177(9) of the Companies Act2013 the Company has implemented a Vigil Mechanism/ Whistle Blower Policy to deal withinstances of fraud and mis-management if any and conducting business with integrityincluding in accordance with all applicable laws and regulations. No employee has beendenied access to the Vigilance Officer as well as Chairman of the Audit Committee. Thedetails of the Vigil Mechanism and Whistle-Blower Policy are explained in the Report onCorporate Governance and also posted on the website of the Company.
MAINTENANCE OF COST RECORDS
The requirement of maintenance of cost records as specified by theCentral Government under sub-section (1) of section 148 of the Companies Act 2013 andhave the audit of its cost records conducted by a Cost Accountant is applicable in respectof certain specified products of the Company and accordingly such accounts and records aremade and maintained by the Company.
Messrs BGJC & Associates LLP Chartered Accountants (RegistrationNo.003304N/ N500056) were appointed as Auditors of the Company for a term of five (5)consecutive years commencing from the conclusion of 37th AGM till theconclusion of the 42nd AGM and their appointment is not required to be ratifiedeach year at the Annual General Meeting of the Company. The auditors have confirmed to theCompany that they continue to remain eligible to hold office as Auditors and are notdisqualified from being so appointed as statutory auditors under the Companies Act 2013the Chartered Accountants Act 1949 and the rules and regulations made thereunder. TheBoard of Directors has on the recommendation of the Audit Committee re-appointed Messrs D.Sabyasachi & Co. Cost Accountants (Registration No. 000369) as the Cost Auditors forconducting the audit of the cost records maintained by the Company in respect of certainspecified products of the Company covered under the Companies (Cost Records and Audit)Rules 2014 and fixed their remuneration based on the recommendation of the AuditCommittee. The remuneration together with applicable Goods and Services Tax thereon andreimbursement of out of pocket expenses to be paid to the Cost Auditors is subject toratification by the members in the ensuing Annual General Meeting of the Company. The CostAudit Report in respect of applicable specified products for the financial year endedMarch 31 2021 was filed by the Company on September 6 2021 with the concernedauthorities.
The Auditors' Report on the financial statements of the Companyforms a part of the Annual Report. There is no qualification reservation adverse remarkdisclaimer or modified opinion in the Auditors' Report which calls for any furthercomments or explanations. Further during the year under review the Auditors have notreported any matter under Section 143(12) of the Companies Act 2013 therefore no detailis required to be disclosed in pursuance to Section 134(3) (ca) of the Companies Act2013.
Pursuant to the provisions of Section 204 of the Companies Act 2013and the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014Messrs R.K. Mishra & Associates Practicing Company Secretaries (PCS RegistrationNo.14474) were appointed to undertake the Secretarial Audit of the Company for the yearended March 31 2022. The Report of the Secretarial Auditor is given in the prescribedform in Annexure-II which is attached hereto and forms a part of theDirectors' Report. Messrs R.K. Mishra & Associates have given the followingremarks or observation in their Secretarial Audit Report. As per the report furnished bythe Secretarial Auditor the Company has complied with the provisions of all theapplicable Acts Rules Regulations Guidelines Standards etc. as stated in theSecretarial Audit Report save and except a slight delay in compliance with Regulation17(1) of Listing Regulations for which the BSE Limited (BSE) and National Stock Exchangeof India Limited (NSE) have levied fines in terms of Standard Operating Procedure (SOP)prescribed under SEBI Circular No. SEBI/HO/ CFD/CMD/CIR/P/2020/12 dated January 22 2020.However the Company has made a suitable representations to both BSE and NSE seekingwaiver of the fines in terms of Policy for exemption of fines levied as per the provisionsof SEBI Standard Operating Procedure Circular which are pending for consideration withthe respective Stock Exchanges.
Director's Comments: The Company has slight belatedly compliedwith the provisions of Regulation 17(1) of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 (Listing Regulations) with the appointment of Shri PriyaShankar Dasgupta (DIN: 00012552) as a Non-Executive Independent Director of the Companyfor a period of Five (5) years w.e.f. November 21 2021. The slight delay in compliancewas for reasons and factors not attributable to and/or beyond the reasonable control ofthe Company viz. pandemic related Natural Calamity. Further such non-compliance shall notbe repeated in future and the Company shall comply with the applicable provisions of theListing Regulations other applicable Regulations and Circulars issued thereunder in trueletter and spirit.
Apart from the above there are no other qualification or disclaimergiven in their report which calls for any comments or explanations.
COMPLIANCE WITH SECRETARIAL STANDARDS
The Company has proper system in place to ensure compliance with theprovisions of applicable Secretarial Standards. During the year under review your Companyhas complied with applicable provisions of Secretarial Standards i.e. SS-1 and SS-2relating to "Meetings of Board of Directors" and "General Meetings"respectively issued by the Institute of Company Secretaries of India.
RELATED PARTY TRANSACTIONS
All related party transactions that were entered into by the Companyduring the financial year under review were generally on arms' length basis and inthe ordinary course of business. The disclosure of related party transactions as requiredunder Section 134(3) (h) of the Companies Act 2013 read with Rule 8 of the Companies(Accounts) Rules 2014 in prescribed Form AOC-2 is given in Annexure-III which isattached hereto and forms a part of the Directors' Report. There are no materialsignificant related party transactions entered into by the Company with its PromotersDirectors Key Managerial Personnel or other designated persons which may have a potentialconflict with the interest of the Company at large.
All related party transactions are placed before the meeting(s) ofAudit Committee for its review and approval. Prior omnibus approval of the Audit Committeeis obtained on an annual basis for a financial year for the transactions which are of aforeseen and repetitive in nature. The statement giving details of all related partytransactions entered into pursuant to the omnibus approval together with relevantdocuments/information are placed before the Audit Committee for review and updation onquarterly basis. In consonance with the recommendations of the Audit Committee the Boardof Directors in its meeting held on February 10 2022 has duly approved the Company'samended Policy on materiality and dealing with Related Party Transactions (RPTPolicy') effective from April 1 2022 in line with the applicable provisions of theListing Regulations as amended. The RPT Policy is uploaded on the Company's websiteand can be accessed at weblink:https://www.vtlrewa.com/Investor_Relation/Disclosure_Regulation46(2)/Company's_Policies/Policy-on-dealing-with-Related-Party-Transactions-10.02.2022.pdf
SUBSIDIARIES ASSOCIATES AND JOINT VENTURE
Your Company has three wholly owned subsidiaries namely August AgentsLimited Insilco Agents Limited and Laneseda Agents Limited. None of the subsidiarycompanies is a material unlisted subsidiary company as defined under Regulation 24(1) ofthe Listing Regulations. During the year under review there was no change in the numberof subsidiaries or in nature of business of subsidiaries. Birla Visabeira Private Limitedan existing joint venture company and also an Associate Company within the meaning ofSection 2(6) of Companies Act 2013 and is presently engaged predominantly in EPC andOperation & Maintenance businesses in the telecommunications sector. The jointventure's financial performance during the period under review was adversely impacteddue to slowdown in optical fibre cables based infrastructure capex in Telecom Sector inIndia.
Apart from Birla Visabeira Private Limited Universal Cables Limited(UCL) Birla Corporation Limited (BCL) and Punjab Produce Holdings Limited (PPHL) areAssociate companies within the meaning of Section 2(6) of the Companies Act 2013 readwith definition of the term Associate' as per Indian Accounting Standard (IndAS)-28. The financial performance of UCL was satisfactory while judging in the prevailingcontext of outbreak of second wave of Covid-19 pandemic causing significant disturbanceand slowdown of economic activities thereby impacting operations and revenue during thefirst half of the year under review. BCL has delivered a resilient financial performanceduring the year under review. The PPHL also posted improved profitability during the year.A Statement containing the salient features of the financial statements of *subsidiariesassociate companies and a joint venture as prescribed under the first proviso tosub-section (3) of section 129 of the Companies Act 2013 read with rule 5 of TheCompanies (Accounts) Rules 2014 is attached as per the prescribed format and forms a partof the Annual Report. In accordance with the provisions of Section 136 of the CompaniesAct 2013 and the amendments thereto read with Listing Regulations the audited financialstatements including the consolidated financial statements and related information of theCompany and financial statements of the subsidiary companies will be available on theCompany's website www.vtlrewa.com.
A report on the performance of financial position of *subsidiarycompanies three associate companies and a joint venture company as per the provisions ofthe Companies Act 2013 is provided as part of the consolidated financial statements andhence not repeated herein for the sake of brevity.
*Note: The information regarding Audited/Unaudited Financial Statementsincluding Special Purpose Ind AS Standalone Financial Statements of the three wholly ownedunlisted subsidiary companies for the financial year ended March 31 2022 are not beingfurnished as the same have not been made available to the Company by certain delinquentdirectors and an ex-director of the subsidiary companies who are having unauthorised andillegal possession of the books of account and other records of the subsidiary companiesand they are not allowing access to other directors of the subsidiary companies. TheCompany being the holding company and the other Board Members of the respectivesubsidiaries are taking necessary actions in this regard in accordance with law as legallyadvised.
CONSOLIDATED FINANCIAL STATEMENTS
The audited consolidated financial statements of the Company as of andfor the year ended March 31 2022 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 the rules made thereunder and Listing Regulations read with Indian AccountingStandard (Ind AS)-110 "Consolidated Financial Statements" and Indian AccountingStandard (Ind AS)-28 "Accounting for Investments in Associates and JointVentures" forms a part of the Annual Report.
The consolidated financial statements for the year ended March 31 2022have been prepared without considering the financial results of three wholly ownedsubsidiaries (Unquoted Non-Banking Financial Companies) viz. August Agents Ltd. InsilcoAgents Ltd. and Laneseda Agents Ltd. ("the Subsidiaries") due to reasons statedhereinabove.
PARTICULARS OF LOANS GUARANTEES AND INVESTMENTS UNDER SECTION 186 OFTHE COMPANIES ACT 2013
The particulars of Loans given Guarantees Investments made andsecurities provided in pursuance to Section 186 of the Companies Act 2013 have beendisclosed in the financial statements read together with Notes annexed to and forming anintegral part of the financial statements.
DISCLOSURE OF RATIO OF REMUNERATION OF DIRECTORS AND KEY MANAGERIALPERSONNEL ETC.
As required under Section 197(12) of the Companies Act 2013 read withRule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 the statement of disclosure of remuneration and such other details as prescribedtherein are given in Annexure-IV which is attached hereto and forms a part of theDirectors' Report.
Annual Return of the Company as per Section 92(3) of the Companies Act2013 is uploaded on website of the Company and the same can be accessed at the weblinkhttps://www.vtlrewa.com/Investor_Relation/Disclosure_Regulation46(2)/Annual-Return.pdf
PARTICULARS OF EMPLOYEES
The information required pursuant to Section 197 (12) of the CompaniesAct 2013 read with Rule 5(2) and 5(3) of The Companies (Appointment and Remuneration ofManagerial Personnel) 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 EXCHANGEEARNING AND OUTGO
As required under Section 134(3)(m) of the Companies Act 2013 readwith Rule 8 of The Companies (Accounts) Rules 2014 the information on Conservation ofEnergy Technology Absorption and Foreign Exchange Earning and Outgo are given in Annexure-VIwhich is attached hereto and forms a part of the Directors' Report.
Your Directors state that no disclosure or reporting is required inrespect of the following items as there were no transactions or events on these itemsduring the year under review: (a) The Managing Director of the Company does not receiveany remuneration or commission from any of the subsidiaries of the Company.
(b) No significant or material orders were passed by the Regulators orCourts or Tribunals which impact the going concern status of the Company and itsoperations in future.
(c) The Company has zero tolerance towards sexual harassment atworkplace and has adopted a Policy on prevention prohibition and redressal of sexualharassment at workplace and has also constituted an Internal Complaints Committee(s) inline with the requirements of The Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013 and Rules made thereunder. During the year underreview no case was filed or reported in pursuance to the provisions of the said Act.
(d) There have been no material changes and commitments which affectthe financial position of the Company that have occurred between the end of the financialyear to which the financial statements relate and the date of this Report save and exceptcontraction in business activities due to lockdown imposed by the State Governmentauthorities considering public health and safety due to COVID-19 pandemic and theresultant challenging business and operating environment.
(e) No frauds were reported by the Auditors in terms of Section 143(2)of the Companies Act 2013 and rules if any made thereunder. (f) The Company has neitherfiled any application under the Insolvency and Bankruptcy Code 2016 (31 of 2016) asamended from time to time nor has availed one time settlement with respect to any loansfrom banks or financial institutions.
The Board desires to place on record its grateful appreciations for theexcellent assistance and co-operation received from the State Government and continuedsupport extended to the Company by the bankers investors vendors and esteemed customersand other business associates/institutions. Your Directors also wish to place on recordtheir sincere thanks and infinite appreciations to all the employees of the Company fortheir unstinted commitment and valuable contribution in the improved financial performanceof the Company.