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ADC India Communications Ltd. Directors Report
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You can view full text of the latest Director's Report for the company.
Market Cap. (Rs.) 406.82 Cr. P/BV 7.83 Book Value (Rs.) 112.99
52 Week High/Low (Rs.) 1125/557 FV/ML 10/1 P/E(X) 49.77
Bookclosure 31/07/2023 EPS (Rs.) 17.77 Div Yield (%) 0.45
Year End :2018-03 

To the Members,

The Board of Directors have pleasure in presenting the 30th Annual Report on the business and operations of your Company, along with the audited financial statements for the financial year ended March 31, 2018.

Financial Results

(Rs. in lakhs)

Year ended 31st March 2018

Year ended 31st March 2017

Revenue from operations

6544.41

6176.73

Other Income

303.94

295.81

Total Revenue

6848.35

6472.54

Profit before depreciation and Tax

615.80

659.58

Depreciation

29.23

26.06

Profit for the year before Tax

586.57

633.52

Tax Expense

232.86

245.25

Profit for the year after Tax

353.71

388.27

FINANCIAL PERFORMANCE

In the financial year 2017-18 the overall revenue from operations grew by about 6% over that of previous year. Revenue from the Telecommunication business decreased by about 4% and the revenue from IT-Networking (Enterprise network) business grew by about 9% over that of previous year.

DIVIDEND

Your Directors recommend a dividend of Rs.4.00 per equity share, of the face value of Rs.10/-each,to be appropriated from the profits of the financial year ended March 31, 2018, subject to the approval by the shareholders at the ensuing Annual General Meeting.

STRATEGY AND OPERATIONS

The economic environment continued to improve where Enterprise network market growth continues to improve compared to Telecom sector which grapple with fewer orders. Pressure on profitability continues due to major issue with greater competition for every single opportunity leading to pressure on margins in the market place. Your Company foresee continued growth in Enterprise network in the next few years and another challenging year for the Telecom sector, which continue to be volatile.

The market overall is expected to improve in the medium term driven by domestic demand and Government projects, Infrastructure projects, Defense sector, E-commerce. Your Company do see growth in Fiber Business over copper due to large infrastructure corridors, national fiber optic network, digital India & smart city initiatives. Your Company should be able to favorably participate in the areas of its strength within each Opportunity as the market activities picks up.

Apart from outsourcing a major portion of manufacturing operations, the Company continued to look at other ways of cost reduction and be cost competitive in the market. As you are aware the Company continue to operate from smaller location which fits into overall operational requirement at this moment and continue to rent the company’s own facility, which has yielded better results as expected and expect the same in the years to follow.

DIRECTORS

Mr.N.Srinivasan, Independent Director passed away on March 04, 2018.Your Board of Directors and the Employees of ADC India express their profound grief and place on record their sincere appreciation for his guidance and valuable contributions to the Company during his tenure as a Director of the Company.

We are glad to invite Mr. Ravi Bosco Rebello who joined the Board on August 04, 2017 as an Additional Director. Brief resume of Mr. Ravi Bosco Rebello is provided in the Notice of the Annual General Meeting.

DECLARATION BY INDEPENDENT DIRECTORS

The Company has received declarations from all the Independent Directors of the company, confirming that they meet the criteria of independence as provided under section 149(6) of the Companies Act, 2013.

BOARD MEETINGS

Six Board meetings were held during the financial year 2017-18 on May 16, 2017, July 21, 2017, August 04, 2017, November 15, 2017, February 02, 2018 and March 21, 2018. The details of meetings held by various Committees of the Board are given in the Corporate Governance Report.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the provisions of Section 134(3) (C) of the Companies Act, 2013, the Directors based on the information and representations received from the Company Management confirm that:

a. In the preparation of Annual Accounts, the applicable Accounting Standards have been followed with no material departures;

b. The Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period ;

c. The Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act,2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities ;

d. The Directors had prepared the Annual Accounts on a ‘going concern’ basis;

e. The Directors had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and have been operating effectively; and

f. The Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

DIRECTORS’ APPOINTMENT AND REMUNERATION

Considering the requirements of the skill-sets on the Board, persons having professional expertise in their individual capacity as independent professionals and who can effectively contribute to the Company’s business and policy decisions are considered by the Nomination and Remuneration Committee for appointment of new Directors on the Board. The Non-Executive Directors appointed on the Board are paid sitting fees for attending the Board and Board Committee Meetings. No other remuneration or commission is paid to the Non-Executive Directors. The remuneration paid to the Managing Director is governed by the relevant provisions of the Companies Act, 2013, rules of the Company and Shareholders’ approval.

AUDITORS AND AUDITORS’ REPORT

At the 26th Annual General Meeting of the Company held on August 08, 2014 M/s. Deloitte Haskins & Sells, Statutory Auditors of the Company were appointed as the Auditors of the Company from the conclusion of this Annual General Meeting until the conclusion of the fifth consecutive Annual General Meeting and in terms of section 139 of the Companies Act, 2013 and the Rules made thereunder this appointment was subject to ratification by members at every annual general meeting.The Companies (Amendment) Act,2017 has amended Section 139 of the Companies Act, 2013 where in the provision regarding ratification of appointment of the Auditors at every Annual General Meeting has been omitted. Consequently, the matter of ratification of appointment of M/s. Deloitte Haskins & Sells need not be placed before the forthcoming Annual General Meeting.

The Auditors’ report read with Notes to Financial Statements are self-explanatory and do not call for any further explanation or comments under Section 134(f) of the Companies Act, 2013.

SECRETARIAL AUDITORS AND SECRETARIAL AUDIT REPORT

Pursuant to the provisions of section 204 of the Companies, 2013 and the Rules made thereunder, M/s.V.Sreedharan and Associates, Practicing Company Secretaries were appointed as the Secretarial Auditors to conduct a secretarial audit of the Company’s Secretarial and related records for the financial year 2017-18. The Secretarial Auditors’ Report for the financial year ended March 31, 2018 is annexed to this Report as Annexure 1.No adverse comments have been made in the said report.

CORPORATE SOCIAL RESPONSIBILITY

Pursuant to the provisions of Section 135 of the Companies Act, 2013 and the Companies (Corporate Social Responsibility Policy) Rules, 2014, the Company has spent an amount of Rs.20 lakhs, which includes the unspent amount of Rs.6.90 lakhs during the financial year 2016-17 towards various CSR Programs undertaken by the Company during the year. The Annual Report on CSR activities is in accordance with the Companies (Corporate Social Responsibility) Rules, 2014 is annexed to this Report as Annexure 2.

CORPORATE GOVERNANCE

Your Company has always practiced sound corporate governance and has complied with various provisions of corporate governance.

As required under Regulation 34 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, Management Discussion and Analysis Report, Corporate Governance Report and the Statutory Auditors’ Certificate regarding compliance of conditions of Corporate Governance forms part of the Annual Report.

UNCLAIMED DIVIDEND AND UNCLAIMED SHARES

During the financial year 2017-18 unclaimed dividend amount of Rs. 0.80 Lakhs pertaining to dividend declared for the financial year 2008-09 was transferred to the Investor Education and Protection Fund. During this year in terms of the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 as amended, the Company transferred the corresponding shares, where the dividends for the last seven consecutive years have not been claimed by the concerned shareholders to IEPF on December 01, 2017.

Unclaimed dividend amounting to Rs. 0.77 Lakhs pertaining to dividend declared for the financial year 2009-10 was transferred to the Investor Education and Protection Fund on April 12, 2018.In terms of the Investor Education and Protection Fund Authority (Accounting, Audit, Transferand Refund) Rules, 2016 as amended, the Company has also transferred the corresponding shares, where the dividends for the last seven consecutive years have not been claimed by the concerned shareholders to IEPF on May 10, 2018.

TRANSFER TO RESERVES

During the year no amount has been transferred to the General Reserve.

WEBSITE OF THE COMPANY

The Company maintains a website www.adckcl. com where information related to the Company are displayed.

FIXED DEPOSITS

During the year, the Company has not accepted any fixed deposits. Hence, there is no outstanding amount as on the Balance Sheet date.

LISTING

The equity shares of the Company are listed with Bombay Stock Exchange Limited. There are no arrears on account of payment of listing fees to them.

CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION

A. Conservation of Energy

The following energy conservation measures were implemented during the year:

- Replaced Air Conditioner Reciprocating Compressor to Scroll compressor to reduce power consumption.

- Replaced Push Cock water taps to Hall Round taps to reduce water consumption.

B. Technology

During the year under review the Company successfully completed the migration to cloud based ERP System which also enabled compliance with GST Rules and Regulations.

C. Research and Development

- Focus on continuous improvement activities continued during the year.

- Provided battery operated stacker to the subcontractor to reduce operator fatigue and accidents.

- Fixed safety brackets for a few material storage racks to prevent accidents.

- 50 Ton Injection Molding Machine operating front panel was repaired locally using the old parts of 80 Ton Injection Molding Machine resulting in a saving of around Rs. 6 lakhs.

FOREIGN EXCHANGE EARNINGS AND OUTFLOW

During the year your Company has earned Foreign Exchange of Rs.47.72 Lakhs and the Foreign Exchange outflow was Rs.17.37 Lakhs.

EXTRACT OF ANNUAL RETURN

As required under the provisions of section 92(3) and 134(3)(a) of the Companies Act.2013 read with Companies (Management and Administration) Rules, 2014 an extract of the annual return for the year ended March 31, 2018 isannexed to this report as Annexure 3

MANAGERIAL REMUNERATION AND RELATED DISCLOSURES

The details of the remuneration paid to the Directors of the Company is mentioned in the Corporate Governance Report. The disclosure pursuant to the provisions of section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules,2014 (as amended) is annexed to this report as Annexure 4.

WHISTLE BLOWER MECHANISM

The Company has established a mechanism called “Vigil Mechanism Policy” for employees, directors and others who are associated with the Company to report to management instances of unethical behavior, actual or suspected fraud or violation of the Company’s code of conduct. The Policy provides adequate safeguards against victimization of employees/directors who avail the mechanism. The Vigil Mechanism also cover the Whistle Blower mechanism aspect as stipulated under clause 49 of the Listing Agreement. The Company affirms that no person has been denied access to the Audit Committee in this respect.The policy has been communicated to all employees by displaying the same on the Company’s website.

SUBSIDIARY/ASSOCIATES/JOINT VENTURE COMPANIES

The Company does not have any Subsidiary/ Associate/Joint Venture Company.

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

The Company has implemented a policy on Prevention, Prohibition and Redressal of Sexual Harassment of Women at Workplace. The Company is committed to creating a safe and healthy working environment. The Company believes that all individuals have the right to be treated with dignity and strives to create a workplace which is free of gender bias and Sexual Harassment. The Company has a zero tolerance approach to any form of Sexual Harassment. The policy has been displayed in the Company’s website.

RELATED PARTY TRANSACTIONS

The Related Party Transaction Policy for determining the materiality of related party transactions and on the dealings with related parties has been displayed in the Company’s website.

All transactions with related parties during the year were in the ordinary course of business and at arm’s length. There are no related party transactions that may have potential conflict with the interest of the Company at large.The details of related party transactions are disclosed in Note No.32 to financial statements forming part of the accounts.

RISK MANAGEMENT

The Company has formed a Risk Management Committee and the constitution and terms of reference of this Committee are set out in detail

in the Corporate Governance Report. The details of risks faced by the Company and its mitigation process was discussed by the Risk Management Committee at its meeting held on February 02,2018 and the same was also reviewed by the Board of Directors at its meeting a held on the same day.

INTERNAL FINANCIAL CONTROLS AND THEIR ADEQUACY

Your Directors to the best of their ability have laid down internal financial controls to be followed by the Company, which they believe are adequate keeping in view the size and nature of Company’s business. Adequate financial procedures are in place to ensure that all the assets are safeguarded, protected against loss and all transactions are authorized, recorded and reported correctly. This ensures the quality and reliability of financial data, financial statements and financial reporting.

Your Company’s internal financial controls are deployed through an internally evolved framework that address material risks in your Company’s operations and financial reporting objectives, through a combination of entity level controls and process controls (both manual and automated), information technology based controls, period end financial reporting and closing controls and through internal audit. The Audit Committee of the Board reviews the adequacy of internal financial controls on an ongoing basis to identify opportunities for improvement in the existing systems to further strengthen the internal control environment in your Company.

ANNUAL EVALUATION OF BOARD’S PERFORMANCE

The Company’s Policy and process for evaluation lays down a structured questionnaire to be used in the evaluation of the entire Board of the Company, Board Sub-Committees and Individual Directors including the Independent Directors.This Policy has been displayed in the Company’s websitewww. adckcl.com.

Using the structured questionnaire the evaluations of the entire Board, Board Committees and individual Board Members including the Chairman of the Board has been carried out.The Directors have expressed their full satisfaction with the performance of the Board, Board Committees and the members of the Board.

LOANS, GUARANTEES OR INVESTMENTS

The Company has not given any loan or guarantee nor has made any investment during the financial year 2017-18 attracting the provisions of section 186 of the Companies Act,2013.

MATERIAL CHANGES AND COMMITMENTS

There have not been any material changes and commitments affecting the financial position of the Company between the financial year ended March 31, 2018 and the date of the Directors Report.

ACKNOWLEDGEMENTS

Your Directors thank the customers, channel partners, distributors, vendors and bankers for the support and co-operation given by them during the year. Your Directors also take this opportunity to place on record their appreciation to all employees for their hard work and support during the year as well as for the advice and support received from the Promoters of the Company.

For and on behalf of the Board of Directors

S.Devarajan J.N.Mylaraiah

Chairman Managing Director

Place: Bangalore

Date: May 23, 2018


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