Dear Members,
The Board of Directors have pleasure in presenting the 35th Annual Report of your
Company along with the Audited Financial Statements for the financial year ended March
31,2023.
FINANCIAL PERFORMANCE
Highlights of the Financial Performance and State of Companys Affairs for the
financial year ended March 31,2023, are provided below:
(Rs. in lakhs)
| Particulars |
Year ended March 31, 2023 |
Year ended March 31, 2022 |
| Revenue from operations |
14,291.25 |
12,071.28 |
| Other Income |
109.99 |
111.72 |
| Total Income |
14,401.24 |
12,183.00 |
| Profit before Depreciation and Tax |
1,125.90 |
1,167.66 |
| Depreciation |
20.99 |
30.85 |
| Profit before Tax |
1,104.91 |
1,136.81 |
| Tax Expense |
287.42 |
288.55 |
| Profit after Tax |
817.49 |
848.26 |
| Other Comprehensive Income |
0.34 |
3.53 |
| Total Comprehensive Income |
817.83 |
851.79 |
Your Company continued to deliver strong operational & financial performance during
the financial year 2022-23 with overall revenue growth of 18% over that of the previous
year. Revenue from the IT-Networking (Enterprise network) business grew by 21%, but there
was a degrowth in revenue from the Telecommunication business of 26% over that of the
previous year. For the full year, the Companys profit before tax stood at Rs. 1,104.91
lakhs compared to Rs.1,136.81 lakhs for the previous year. Profit after tax for the
financial year was Rs.817.49 lakhs as compared to Rs.848.26 lakhs for the previous year.
The growth in revenue was led by both volume as well as product mix. During the quarter
ended March 31,2023, the Company has recorded a provision of Rs.775.34 lakhs towards
outstanding dues from one of its large customers who is undergoing stressful liquidity
conditions. The Company is taking necessary steps to recover its dues.
DIVIDEND
The Board of Directors has recommended a dividend of Rs.4.00 per equity share having a
face value of Rs.10 each for the financial year 2022-23 for approval of the Members at the
35th Annual General Meeting of the Company ("35th AGM). The dividend, if approved by
the Members at the 35th AGM will result in cash outflow of Rs.184 lakhs.
TRANSFER TO RESERVES
Your Company do not propose to transfer any amount to the general reserves of the
Company.
SHARE CAPITAL
During the year under review, there was no change in share capital of the Company.
LOANS, GUARANTEES OR INVESTMENTS
The Company has not given any loan or provided any guarantee or made investment within
the meaning of section 186 of the Companies Act, 2013 during the year under review.
BUSINESS AND OPERATIONS
During the year, your Company emerged strongly with economic activity showing positive
signs. ADC team demonstrated exceptional resilience in dealing with challenging times,
where your Company delivered highest revenue & growth.
With full of uncertainties, it is not something that any of us would claim to predict
the lingering impact of global economic scenarios with supply chain disruptions, rising
interest rates accompanied with increase in costs of commodities & volatility is a
real confrontation with complexity & challenges in front of your Company. At the same
time, tremendous opportunities lies before your Company with growth in Data Centre
business & Broadband connectivity requirements which gives great optimism about the
future that holds for your company.
As always, your company is constantly determining what the mid to long term
implications of each of the challenges are and how your company should respond
strategically. Regardless of all the challenges, your company firmly believe that it will
emerge from this, a stronger ADC India Communications than ever before by realigning cost
structure and sharpen overall productivity by being a more valuable partner to our clients
than ever before. Your company Board and Risk Management Committee has always looked at
worst case scenarios of times like these & built a portion of the strong financials by
making the right decision which is sustainable and consistent over years.
The markets your Company serve continue to undergo disruptions where we must adapt to
new market realities thoughtfully, to ensure our continued growth and success.
Unfortunately, the post-pandemic economy has presented new circumstances that demand
adaptability and resilience as we respond to stay ahead of the market condition. Your
Company would see an impact on the Enterprise Network copper business with an increase in
work from home adoption growing with office space expansion requirements coming down /
going slow in the short term. However, your Company does see continued growth in Fiber
Business over copper due to a multifold increase in Bandwidth requirements, with denser
wireless & deeper fiber deployments across the upcoming infrastructure projects. Added
to this, your Company do see inflationary pressure accelerating with steep increase in
prices across commodities and raw materials like copper, stainless steel, plastics and
many more items; towards which your company has been adjusting prices consistently across
certain products and/or product lines.
Looking ahead, your Company is optimistic about the opportunities for work from its
clients and the approach your Company has put in place with respect to Data Centre
business & Broadband connectivity requirements. The investments committed both by
Government & Private Players towards infrastructure growth would improve the overall
business sentiment and investments in next few Quarters/years. Market is expected to
improve driven by investments in Infrastructure projects, Pharma, Healthcare, Education,
Banking & Finance, Defense sector, E-commerce, Manufacturing, Digital India and Smart
city initiatives where your Company will be able to favorably participate in the areas of
its strength within each opportunity as the market evolves.
While the demand outlook is strong, your Company remain vigilant in order to be agile
and evolve proper approach with the changing dynamics, with continued focus on growing
revenues and profitability with new products introduction and by realigning cost structure
by looking at ways of cost reduction to be competitive in the marketplace.
MANAGEMENT DISCUSSION AND ANALYSIS
As required by Regulation 34(2) of the Securities and Exchange Board Of India (Listing
Obligations and Disclosure Requirements) Regulations, 2015 ("Listing
Regulations"), the Management Discussion and Analysis is set out in a separate
section in this Annual Report.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
As per the provisions of the Companies Act, 2013, Mr. Ravi Bosco Rebello (DIN:07868872)
is liable to retire by rotation at the ensuing 35th Annual General Meeting of the Company
and, being eligible, offers himself for re-appointment. The Board of Directors recommends
his re-appointment to the Members.
The Board, pursuant to the recommendation of the Nomination and Remuneration Committee,
at its meeting held on June 16, 2023 appointed Mr. Rakesh Kishore Bhanushali
(DIN:07220290) as an Additional Director (Non-Executive and NonIndependent) of the Company
with effect from June 17, 2023. Pursuant to section 161 of the Companies Act, 2013 Mr.
Rakesh Kishore Bhanushali will hold the office of the Additional Director up to the date
of the ensuing Annual General Meeting of the Company.The Company has received a notice as
per the provisions of section 160(1) of the Companies Act, 2013 from a Member in writing
proposing his candidature for the office of Director. The Board has recommended his
appointment to the Members of the Company at the forthcoming Annual General Meeting as
Director (Non-Executive and Non-Independent) of the Company, liable to retire by rotation.
All the Independent Directors of the company have submitted declaration to the Company
under Section 149(7) of the Companies Act, 2013, stating that they meet the criteria of
independence as prescribed in section 149(6) of the Companies Act, 2013 and Regulation 16
(1)(b) of SEBI Listing Regulations, 2015. Further in terms of the Regulation 25(8) of the
SEBI Listing Regulations, they have confirmed that they are not aware of any circumstances
or situation, which exists or may be reasonable anticipated, that could impair or impact
their ability to discharge their duties with an objective independent judgement and
without any external influence.The Independent Directors have confirmed compliance of
relevant provisions of Rule 6 of the Companies (Appointment and Qualifications of
Directors) Rules, 2014. In the opinion of the Board, the Independent Directors of the
Company are persons of high repute & integrity and possess requisite expertise and
experience in their respective fields of profession.
During the year, there were no changes in the Key Managerial Personnel of the Company.
As on March 31, 2023, Mr. J.N.Mylaraiah, Managing Director; Mr. Rakesh Kishore Bhanushali,
Chief Financial Officer and Mr. R. Ganesh, Company Secretary are designated as the Key
Managerial Personnel of the Company.
Mr. Rakesh Kishore Bhanushali has resigned from the position of Chief Financial Officer
and Key Managerial Personnel of the Company with effect from the close of business hours
of June 16, 2023. Mr. Anandu Vithal Nayak has been appointed as the Chief Financial
Officer and Key Managerial Personnel of the Company with effect from June 17, 2023.
MEETINGS OF THE BOARD
Six meetings of the Board of Directors were held during the financial year. The
particulars of the meetings held and attendance of the Directors at the meetings are
provided in the Report on Corporate Governance. The maximum interval between any two
meetings did not exceed 120 days, as prescribed by the Companies Act, 2013 and Listing
Regulations.
AUDIT COMMITTEE
Pursuant to the provisions of the Companies Act, 2013 and the Listing Regulations, the
Company has constituted an Audit Committee. Details pertaining to the composition and
terms of reference of the Audit Committee are provided in the Report on Corporate
Governance. During the year under review, all the recommendations made by the Audit
Committee were accepted by the Board of Directors..
DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to the provisions of Section 134 of the Companies Act, 2013, the Board of
Directors, based on the information and explanations obtained by them, to the best of
their knowledge and belief confirm that:
a. in the preparation of the annual accounts for the year ended March 31,2023, the
applicable accounting standards have been followed and no material departures have been
made from the same;
b. they have 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 as of March 31,2023, and of the profits of the
Company for the year ended on that date;
c. they have 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. they have prepared the annual accounts on a going concern basis;
e. they have 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. they have devised proper systems to ensure compliance with the provisions of all
applicable laws and that such systems are adequate and operating effectively.
POLICY ON 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 Companys business and policy decisions are considered
by the Nomination and Remuneration Committee for appointment of new Directors on the
Board. The Non-Executive Independent Directors appointed on the Board are paid sitting
fees for attending the Board and Committee Meetings. No other remuneration or commission
is paid to the NonExecutive Independent Directors. Non-Executive Independent Directors are
neither paid any sitting fees nor paid any commission. The remuneration paid to the
Managing Director is governed by the relevant provisions of the Companies Act, 2013, rules
of the Company and Members approval. Executive Compensation Policy Guidelines is available
on the website of the Company at https://www.adckcl.com/in/ en/aboutus/policies.html.
PERFORMANCE EVALUATION OF THE BOARD
During the year under review, the performance evaluation of the Board, Committees and
Directors was conducted based on the criteria, framework and questionnaires approved by
the Board. The details of the performance evaluation exercise conducted by the Company are
set out in the Report on Corporate Governance.
FAMILIARIZATION PROGRAM FOR INDEPENDENT DIRECTORS
The Independent Directors are regularly informed during the meetings of the Board and
Committees on the business strategy, business activities, manufacturing operations, issues
faced by the Company and regulatory changes. Directors, when they are appointed, are given
a detailed orientation on the Company by the Managing Director. The details of
familiarization programs provided to the Directors of the Company are mentioned in the
Report on Corporate Governance and on the website of the Company at
https://www.adckcl.com/in/en/aboutus/ investorrelations/other-info.htm.
CORPORATE GOVERNANCE
Your Company has always practiced sound corporate governance and has complied with the
Corporate Governance Requirements under the Companies Act, 2013 and the Listing
Regulations.
As required under Regulation 34 of the Listing Regulations, a Report on Corporate
Governance along with a Certificate of Compliance from the Statutory Auditors of the
Company is set out in a separate section in this Annual Report. General Shareholder
Information is set out in a separate section in this Annual Report.
VIGIL MECHANISM
The Vigil Mechanism of the Company is governed by Vigil Mechanism Policy established
pursuant to section 177(9) of the Companies Act, 2013 and Regulation 22 of the Listing
Regulations. The Policy enables Directors, Employees and others who are associated with
the Company to report to the Management of the Company instances of unethical behavior,
actual or suspected fraud or violation of the Companys code of conduct. The Policy
provides adequate safeguards against victimization of Director(s) and Employee(s) who
avail of the mechanism and provides for direct access to the Chairman of the Audit
Committee in exceptional cases. It is affirmed that no person has been denied access to
the Audit Committee. The Vigil Mechanism Policy is available on the website of the Company
at https://www. adckcl.com/in/en/aboutus/policies.html.
POLICY ON PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE
The Company has zero tolerance towards any form of sexual harassment at the
workplace.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. As per the requirement of the provisions of the Sexual Harassment of Women at
Workplace (Prevention, Prohibition and Redressal) Act, 2013 (POSH), the Company has in
place a policy on prevention of sexual harassment at workplace. The Company is committed
to providing a safe and conducive work environment for all its employees. An internal
committee has also been set up to redress complaints received on sexual harassment. The
policy is available on the website of the Company at
https://www.adckcl.com/in/en/aboutus/policies.html. During the year, the Company did not
receive any complaint of alleged sexual harassment.
RISK MANAGEMENT
The Company has put in place a Risk Mitigation Processes to identify, assess and
mitigation of various risks to Companys business.
The Company has constituted a Risk Management Committee. The constitution and terms of
reference of this Committee are provided in the Corporate Governance Report. The Risk
Management Committee at its meeting held on March 21, 2023, discussed and reviewed the
risk mitigation processes adopted by the Management to address various risks to the
Companys business.
RELATED PARTY TRANSACTIONS
The Company has formulated a policy on materiality of related party transactions and on
dealing with related party transactions. The Policy on Related Party Transactions is
available on the website of the Company at https://www.adckcl.com/in/en/aboutus/
policies.html.
All related party transactions entered during the year were in ordinary course of the
business and on arms length basis. There were no materially significant related party
transactions made by the Company during the financial year, which may have a potential
conflict with the interest of the Company at large.
All related party transactions are placed before the Audit Committee on a quarterly
basis, specifying the nature and value of the transactions, for review and approval. Prior
omnibus approval of the Audit Committee is obtained for transactions which are foreseeable
and are of a repetitive nature and/or entered in the ordinary course of business and on
arms length basis.
Pursuant to the provisions of Section 134(3)(h) of the Companies Act, 2013 and Rule
8(2) of the Companies (Accounts) Rules, 2014, the particulars of the material transactions
entered by the Company in the financial year are disclosed in the prescribed Form AOC-2
annexed as Annexure A to the Boards Report.
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 the Companys 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 Companys internal financial controls are deployed through an internally evolved
framework that address material risks in your Companys 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.
STATUTORY AUDITORS AND AUDITORS REPORT
The Members of the Company in 34th Annual General Meeting of the Company approved the
appointment of M/s. SRBC & CO LLP, Chartered Accountants (ICAI Firm Registration
Number 324982E/E300003) (‘M/s.SRBC) as the Statutory Auditors of the Company for a
term of five consecutive years i.e., from the conclusion of 34th Annual General Meeting
till the conclusion of 39th Annual General Meeting. The Report given by M/s. SRBC on the
Financial Statements for the financial year ended March 31, 2023, is part of the Annual
Report. The Notes on the Financial Statements referred to in the Auditors Report are
self-explanatory and do not call for any comments and the Auditors Report does not contain
any qualification, reservation or adverse remark.
SECRETARIAL AUDITORS AND SECRETARIAL AUDIT REPORT
Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors
had appointed M/s.V. Sreedharan and Associates, Practicing Company Secretaries as the
Secretarial Auditors of the Company for the financial year ending March 31, 2023. The
Report given by the Secretarial Auditors is annexed as Annexure B to the Boards
Report. The Secretarial Audit Report is self-explanatory and does not call for any
comments. The Secretarial Audit Report does not contain any qualification, reservation, or
adverse remark.
REPORTING OF FRAUD BY AUDITORS
During the year under review, neither the Statutory Auditors nor the Secretarial
Auditors has reported any instances of fraud committed against the company by its Officers
or Employees to the Audit Committee under section 143(12) of the Companies Act, 2013, the
details of which would need to be mentioned in the Boards Report.
SECRETARIAL STANDARDS
The Company has complied with all applicable Secretarial Standards issued by the
Institute of Company Secretaries of India.
CORPORATE SOCIAL RESPONSIBILITY
The Companys CSR Policy The Board has constituted a Corporate Social Responsibility
(CSR) Committee for implementing CSR activities of your Company. As on March 31, 2023, the
CSR Committee comprised of Ms. Revathy Ashok as Chairperson and Mr.S.Devarajan, Mr.
J.N.Mylaraiah and Ms. Vijaya Latha Reddy as Members. The terms of reference of the CSR
Committee are provided in the Report on Corporate Governance. Your Company has also
formulated a CSR Policy, which is available on the website of the Company at
https://www.adckcl.com/in/en/aboutus/policies.html.
In terms of the provisions of Section 135 of the Companies Act, 2013 read with the
Companies (Corporate Social Responsibility Policy) Rules, 2014, your Company has during
the financial year 2022-23 spent over two percent of the average net profits of the
Company during the three preceding financial years in accordance with the CSR Policy and
amount approved by the Board of Directors on the recommendation of the CSR Committee. The
Companys focus on CSR activities is pre-dominantly in the areas of Education and health.
The Company implements the CSR projects through implementing partners. Annual Report on
CSR activities as required under the Companies (Corporate Social Responsibility Policy)
Rules, 2014 is annexed as Annexure C to the Boards Report.
SUSTAINABILITY
A. Environmental Progress
Your company is proud of its accomplishments so far. Your Company is building a
foundation for a more sustainable future. Your company is building the processes and
systems that will be necessary to ensure that it can meet not only regulatory requirements
but the goals of our customers. ADC India manufacturing facility are certified to ISO
14001:2015 for environmental management systems, and ISO 45001:2018 for health and safety
management systems.
B. Development
During the year, the following developmental activities were carried out by the
Company:
• Commenced in-house assembly of Copper Panels, of both Unloaded & Loaded
Version.
• Introduced new design fiber cable, high density panels and Fiber armored Cable
assemblies to suit customer applications.
• Introduced Cat 6 LSZH Cable assemblies.
INFORMATION REGARDING EMPLOYEES AND RELATED DISCLOSURES
The statement of Disclosure of Remuneration under section 197 of the Companies Act,
2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014 is annexed as Annexure D to the Boards Report.
The statement of particulars employee as required under Rules 5(2) of the Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014 forms part of this
report. In terms of Section 136 of the Companies Act, 2013, the Report and Financial
Statements are being sent to the Members of the Company and others entitled thereto,
excluding the aforesaid statement. Any Member interested in obtaining a copy of the said
statement may write to the Company Secretary at the address of the Registered Office of
the Company or at email address:support@adckcl.com.
INVESTOR EDUCATION AND PROTECTION FUND (IEPF)
Pursuant to the provisions of section 124 of the Companies Act, 2013 and the Investor
Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules,
2016 ("IEPF Rules") read with the relevant circulars and amendments thereto, the
amount of dividend remaining unpaid or unclaimed for a period of seven consecutive years
from the due date is required to be transferred to the Investor Education and Protection
Fund ("IEPF") constituted by the Central Government. In terms of the IEPF Rules,
during the financial year 2022-23, the Company had transferred Rs.1,207,792/- and
Rs.45,103/- to the IEPF, being the unpaid and unclaimed dividend amount pertaining to the
Interim dividend and Final dividend of the financial year 2014-15, respectively.
Pursuant to the provisions of the IEPF Rules, all shares in respect of which any
dividend has not been paid or claimed for seven consecutive years is required to be
transferred by the Company to the designated Demat Account of the IEPF Authority
("IEPF Account") within a period of thirty days of such shares becoming due to
be transferred to the IEPF Account. Accordingly, the Company had during the financial year
2022-23 transferred 2065 equity shares on which dividend(s) remained unpaid or unclaimed
for seven consecutive years to the Demat Account of IEPF Authority, after complying with
the procedure prescribed under the IEPF Rules.
FOREIGN EXCHANGE EARNINGS AND OUTFLOW
During the year under review, your Company has earned Foreign Exchange of Rs.194.40
lakhs and the Foreign Exchange outflow was nil.
ANNUAL RETURN
In accordance with the provisions of Section 92(3) of the Companies Act, 2013, the
Annual Return in the prescribed format is available on the website of the Company at
https://www.adckcl.com/in/en/ aboutus/investorrelations/annual-reports-and- returns.htm.
MATERIAL CHANGES AND COMMITMENTS AFFECTING FINANCIAL POSITION BETWEEN THE END OF THE
FINANCIAL YEAR AND DATE OF THE REPORT
There have been no material changes and commitments affecting the financial position of
the Company that have occurred between the end of the financial year to which the
financial statements relate and the date of this Report. There has been no change in the
nature of business of the Company..
DEPOSITS FROM PUBLIC
The Company has not accepted any deposits from the public and as such no amount of
principal or interest on deposits from the public was outstanding as on the date of the
Balance Sheet.
DEPOSITS
During the year under review, the Company has not accepted any deposit covered under
Chapter V of the Companies Act, 2013 and as such, no amount on account of principal or
interest on deposits was outstanding as on the date of the Balance Sheet.
COST RECORDS AND COST AUDIT
Maintenance of cost records and requirement of cost audit as prescribed under the
provisions of Section 148(1) of the Companies Act, 2013 are not applicable to the business
activities carried out by the Company.
SIGNIFICANT AND MATERIAL ORDERS
There are no significant and material orders passed by the Regulators or Courts or
Tribunals impacting the going concern status and the Companys operations in future.
INSOLVENCY AND BANKRUPTCY CODE, 2016
During the year, the Company has not filed any application and no proceeding is pending
against the Company under the Insolvency and Bankruptcy Code, 2016.
SETTLEMENT WITH BANKS OR FINANCIAL INSTITUTION
During the year, there was no instance of one-time settlement with any bank or
financial institution.
OTHER DISCLOSURES
No disclosure or reporting is made with respect to the following matters, as there were
no transactions during the financial year:
a. Issue of equity shares with differential rights as to dividend, voting or otherwise.
b. Issue of shares (including sweat equity shares) to employees of the Company under
any scheme.
c. Raising of funds through preferential allotment or qualified institutions placement.
ACKNOWLEDGEMENTS
The Directors place on record their appreciation for the hard work, dedication and
commitment of each employee of the Company during the year.The Directors also thank the
customers, channel partners, distributors, vendors and bankers for their support and
co-operation during the year. The Directors would also like to acknowledge the valuable
support of the Promoters of the Company during the year.
| On behalf of the Board of Directors |
|
| S.Devarajan |
J.N.Mylaraiah |
| Chairman |
Managing Director |
| Place : Bangalore Date : June 16, 2023 |
|
+91-9892691696
