As on: Apr 30, 2024 05:05 AM
Dear Shareholders,
Your Directors take pleasure in presenting the Twenty-Sixth Annual Report together with the Audited Financial Statements and Auditors’ Report for the financial year ended on 31 st December, 2015.
PERFORMANCE REVIEW
The performance of the Company, on standalone basis, for the financial year ended on 31 st December, 2015, is summarized below:
The previous financial period was for 18 months commencing from 1 st July, 2013 to 31 st December, 2014 and the current financial year is of 12 months commencing from 1st January, 2015 to 31st December, 2015, hence the figures are not comparable.
OPERATIONS
CONSUMER ELECTRONICS & HOME APPLIANCES
The period was a very tough period marked by challenges in both internal and external environment and the Consumer Electronics & Home Appliances Industry was not an exception to this. The performance of the Company was affected due to economic slowdown, which resulted in lower business volumes.
OIL & GAS
The Company is exploring more and more opportunities in Oil and Gas sector. During the year under review, the Company has announced various discoveries and explorations made by its wholly owned subsidiaries and/or joint ventures thereby adding to the hydrocarbon resources already established in these blocks. The details of discoveries are:
• January, 2015 - Petrobras, the Operator of the BM SEAL - 11 announced the discovery of new oil accumulation in Farfan area in the Sergipe basin. The results confirmed the light oil and gas discovery in Farfan area and presented the excellent permoporosity conditions in the turbidities reservoirs with 54 meters thickness.
• February, 2015 - Petrobras, the Operator of the BM SEAL - 11 announced the drilling results of the third appraisal well 3-SES-186, located 103 km from the city of Aracaju and about 10 km from the discovery well "Farfan". The results confirmed the extension of the light oil reservoirs. In addition the well found presence of a new oil accumulation with a total thickness of 68 meters in shallower reservoirs.
• April, 2015 - Petrobras, Operator of the block SEAL-M-426 in BM-SEAL-11 Concession, Brasil, has completed the formation test of well 3-BRSA-1286-SES / 3-SES-186, located in the BM-SEAL-11 concession in the SEAL-M-426 block in ultra-deep waters of the Sergipe-Alagoas Basin. The results of the formation test confirmed the presence of light oil and good productivity of the reservoirs.
TELECOM
Videocon Telecommunications Limited (VTL), a subsidiary of the Company, is an Indian cellular service provider that offers GSM mobile services and NLD and ILD services in India.
On 3rd March, 2013, VTL was awarded the Unified Licenses Access Services ("ULAS") for six circles, namely, Bihar, Gujarat, Haryana, Madhya Pradesh and Chhattisgarh, Uttar Pradesh (East) and Uttar Pradesh (West) effective 16th February, 2013, which are valid for a period of 20 years. VTL has also been allotted 5 Mhz spectrum in 1,800 Mhz category in each of these six circles, out of which, VTL is already providing commercial services in three circles, namely, Gujarat, Haryana and Madhya Pradesh and Chhattisgarh. VTL is operating National Long Distance (NLD) Services and terminating International Long Distance (ILD) traffic on its own NLD networking across India.
During the year under review, VTL entered into an agreement with Idea Cellular Limited (Idea Spectrum Trading Agreement) to transfer rights to use 2 x 5MHz Spectrum in 1800 MHz band allotted to VTL by Government of India, Ministry of Communications and IT, Department of Telecommunications for Gujarat and Uttar Pradesh (West) based service area at an aggregate consideration ofRs. 3,310 Crores. However, post the Balance Sheet date, VTL and Idea Cellular Limited mutually terminated the Idea Spectrum Trading Agreement on 15th March, 2016.
Futher, in March 2016, VTL entered into an agreement with Bharti Airtel Limited (Airtel Spectrum Trading Agreement) to transfer, at an aggregate consideration of Rs. 4,428 crore, rights to use 2 x 5 MHz spectrum in the 1800 MHz Band allotted to VTL by the Government of India, Ministry of Communication & IT, Department of Telecommunication (DoT) for six circles, namely, Bihar; Gujarat; Haryana; Madhya Pradesh and Chhattisgarh; Uttar Pradesh (East) and Uttar Pradesh (West). The closing of the transaction is subject to satisfaction of the standard conditions including the conditions stated in the Spectrum Trading Guidelines.
POWER
The Company has commissioned three solar power projects viz., 5.75MW solar Photovoltaic Power Project in Village Majra, District Warora, Maharashtra; 5.75 MW solar PV power project in Village Betwasiya, District Jodhpur, Rajasthan has been commissioned by the Company through its step down subsidiary, Comet Power Private Limited; and 5.5 MW solar PV power project in Gujarat has been commissioned by the Company through Unity Power Private Limited. These solar projects are operating at full capacities and are generating electricity.
The Company’s thermal power business consists of two 1,200 MW coal-fired thermal electricity power projects under construction, the Power Project in the state of Gujarat and the Power Project in the state of Chhattisgarh. These power projects are being undertaken by Company's Subsidiaries viz. Pipavav Energy Private Limited and Chhattisgarh Power Ventures Private Limited respectively. These power projects are not yet commissioned.
INSURANCE
The Company entered into a joint venture with US headquartered multinational Liberty Mutual Insurance Group to setup a non-life insurance company, Liberty Videocon General Insurance Company
Limited ("LVGICL"), on 16th December, 2010. Under the terms of the agreement, Liberty Mutual Insurance Group can hold a maximum of 49.0% of equity interest (maximum investment permitted under the applicable law) and our Company must hold a minimum of 51.0% equity interest in the joint venture. The Company currently holds 81.91 % stake in the joint venture and the remaining equity is owned by Liberty Mutual Insurance Group.
LVGICL commenced its business in 2013 and its business plan is focused primarily on using distribution channels like brokers, agents, banks, NBFCs and other affinity partners, online internet and a direct sales force to achieve growth in written premiums. LVGICL plans to focus primarily on personal insurance products such as motor insurance and health insurance in addition to commercial insurance products such as fire, engineering, marine and liability insurance.
LVGICL also plans to add new products for its distribution which falls under group health, personal heath, personal accident cover and the SME segment. LVGICL expects that its new health products will contribute significantly to its growth rate. LVGICL has launched health insurance product Liberty Health Connect on an online platform. CHANGE IN THE NATURE OF BUSINESS There was no change in the nature of business of the Company during the year under review.
DIVIDEND
In view of the loss incurred by the Company, the Board of Directors do not recommend any dividend for the Financial Year ended 31st December, 2015.
TRANSFER TO RESERVES
The Company do not propose to transfer any amount to any reserve. TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND
The Company has transferred a sum of Rs. 1.18 Million in respect of unpaid/undaimed dividend for the Financial Year 2007-08 to the Investor Education and Protection Fund.
ISSUES/ALLOTMENT
During the year under review, the Foreign Currency Convertible Bonds (Bonds) amounting to US$ 194.40 Million due in December, 2015 were fully redeemed by issue of new Bonds of US$ 97.20 Million due on 31st December, 2020 and balance US$ 97.20 Million payment in cash. FIXED DEPOSITS
Your Company has not accepted any Fixed Deposit within the meaning of Chapter V of Section 73 of the Companies Act, 2013 read with Companies (Acceptance of Deposits) Rules, 2014 and as such, no amount of principal or interest was outstanding as on the Balance Sheet date.
MATERIAL CHANGES AND COMMITMENTS IF ANY AFFECTING THE FINANCIAL POSITION OF THE COMPANY, OCCURRED AFTER THE BALANCE SHEET DATE AND AS AT THE DATE OF SIGNING THIS REPORT
No material changes and commitments affecting the financial position of the Company occurred after the Balance Sheet date and as at the date of signing this report.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS
Particulars of loans, guarantees given and investments made during the year as required are provided in Notes 13, 35(B)(i) and 47 of the Standalone Financial Statements.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS AS PER SECTION 188(1)
All the related party transactions are entered on arm’s length basis, in the ordinary course of business and are in compliance with the applicable provisions of the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. There are no materially significant related party transactions made by the Company with Promoters, Directors or Key Managerial Personnel etc. which may have potential conflict with the interest of the Company at large or which warrants the approval of the shareholders. Accordingly, no transactions are being reported in Form AOC-2 in terms of Section 134 of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014. However, the details of the transactions with Related Party are provided in the Company’s financial statements in accordance with the Accounting Standards.
The Policy on Related Party Transactions as approved by the Board is uploaded on the Company’s weblink at http://www.videoconindustriesltd.com/Documents/Related%20 Party%20Transaction%20Policy.pdf
SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES
During the year under review, Videocon International Cooperatie U.A., Videocon Brasil Ventures B.V, Videocon Brasil Petroleo Ltda. and Videocon Hydrocarbon Ventures B.V. became the step down subsidiaries of the Company.
As on 31st December, 2015, your Company had 29 subsidiaries (including step down subsidiaries) viz, Applied Energy Private Limited, Chhattisgarh Power Ventures Private Limited, Comet Power Private Limited, Indigo Energy Private Limited, Jumbo Techno Services Private Limited, Liberty Videocon General Insurance Company Limited, Middle East Appliances LLC, Percept Energy Private Limited, Pipavav Energy Private Limited, Proficient Energy Private Limited, Prosperous Energy Private Limited, Senior Consulting Private Limited, Videocon Australia WA-388-P Limited, Videocon Brasil Petroleo Ltda, Videocon Brasil Ventures B.V., Videocon Easypay Private Limited (Formerly: Datacom Telecommunications Private Limited), Videocon Electronics (Shenzhen) Limited, Videocon Energy Brazil Limited, Videocon Energy Limited, Videocon Global Limited, Videocon Hydrocarbon Holdings Limited, Videocon Hydrocarbon Ventures B.V, Videocon Indonesia Nunukan Inc., Videocon International Cooperatie U.A., Videocon International Electronics Limited, Videocon JPDA 06-103 Limited, Videocon Mauritius Energy Limited, Videocon Oil Ventures Limited, Videocon Telecommunications Limited.
The joint ventures of the Company are Videocon Infinity Infrastructures Private Limited and IBV Brasil Petroleo Limitada.
Further, the associate companies of the Company are Radium Appliances Private Limited and Unity Power Private Limited.
The details of subsidiaries (including step down subsidiaries) /joint ventures/associate companies including the details of performance and financial positions of each of the subsidiaries/joint ventures/ associates are given in Form AOC-1 which is annexed as Annexure 1.
As per the provisions of the Companies Act, 2013, your Company has provided the Consolidated Financial Statements as on 31st December, 2015. The Financial Statements of the subsidiaries/ joint ventures/ associate companies will also be available for inspection during the business hours at the Registered Office of your Company and the respective subsidiaries/ joint ventures/ associate companies. The Annual Report of your Company, though does not contain full financial statements of the subsidiary companies, your Company shall make available the audited annual accounts and related information of the subsidiary companies, upon request by any Member of your Company and the same are displayed on the Company’s website viz. www.videoconworld.com.
COMPANY’S POLICY ON DIRECTOR’S APPOINTMENT AND REMUNERATION
The Company has in place the Nomination and Remuneration Committee. The Company has further formulated the Nomination and Remuneration Policy on directors’ appointment and remuneration including the criteria for determining qualifications, positive attributes and independence of director. The other details form part of the Corporate Governance Report.
EMPLOYEES REMUNERATION
In terms of the provisions of Section 197(12) of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing the names and other particulars of the employees drawing remuneration in excess of the limits set out in the said Rules are provided in Annexure 2 & 3 of the Directors’ Report.
CONSERVATION OF ENERGY
Energy conservation is the goal to reduce the amount of energy required to provide products and services. Reduction in usage of energy reduces energy costs and results in a financial cost saving to consumers. It is also seen as a solution to the problem of reducing greenhouse gas emissions. Energy efficiency and renewable energy are said to be the twin pillars of sustainabie energy policy.
In today’s tough economic climate, all organizations are pushing harder to find cost saving techniques. At the same time, many are under strain to comply with the latest environmental legislations and wish to reduce their carbon footprint. Every organization tries to reduce its overheads by emphasizing the energy conservation perspective.
Some of the specific measures undertaken by the Company for the conservation of energy are:
• Introduction of Solar Power Trading through Indian Energy Exchange for the power cost optimization.
• Replacement of old conventional luminaries by highly efficient 18 watt LED tube lights in all shopfloors and workstations.
• Use of energy saving lighting arrangement on roads and inside the manufacturing facilities by using 60 watt LED Street light lamps, Electronic Ballets, CFL lamps.
• Use of variable-speed drives for large variable loads. Also emphasis to use high-efficiency gear sets & precision alignments.
• Replacement of obsolete and high power consuming air conditioners by using new Star rating and energy efficient AC’s in respective locations.
• Tune up the HVAC Control system to minimize flows and reduce blower/ fan/ pump power requirements.
• Optimizing the blow-down flow rate and ensuring turn off of unnecessary cooling tower fans when loads are reduced.
• Demand efficiency restoration after motor rewinding.
• Use of motion sensors for better lighting control for stores, offices, washrooms.
• Conducting energy saving training sessions for employees at all levels so as to increase awareness for utilization of natural resources.
The adoption of the above energy conservation measures have helped to curtail the proportionate increase in total energy usage consequent to overall increase in production. This has made it possible to maintain the cost of production at optimum levels.
During the year under review, your Company was conferred with the prestigious National Energy Conservation Award for 2015 by the Bureau of Energy Efficiency (BEE), for the First Prize in the Manufacturers of BEE Star Labelled Appliances (Refrigerator) Sector.
RESEARCH & DEVELOPMENT; TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
Research & Development (R & D) is a component of innovation and is situated at the front end of the innovation lifecycle. Innovation is built on R & D and includes commercialization phases. R & D is a scientific investigation that explores the development of new goods and services, new inputs into production, new methods of producing goods and services, or new ways of operating and managing organizations.
In concrete terms, R & D brings new knowledge and processes to a business, the new higher value-added products, processes and services that company needs in order to thrive in a knowledge intensive market. New product design and development is a crucial factor in the survival of a Company. In an industry that is changing fast, the companies must continually revise their design and range of products. This is necessary due to continuous technology change and development as well as other competitors and the changing preference of customers. In order to compete with the ever changing market and to fetch the benefits of technological advancement, your Company has set up a dynamic and active R & D Centre. The R & D Centre has qualified staff working continuously on new products, processes etc.
Your Company has launched number of products in Consumer Electronics Industry with a wide range of Refrigerators, Washing Machines, Air Conditioners, Televisions, etc.
R & D involves constant revitalization of knowledge and expertise, and could result in developments such as:
• New/lmproved products;
• Improved operational process;
• Meeting the changing requirements of customers;
• Cost reduction;
• Meeting the changing social and environmental needs; and
• Maintenance of quality.
R & D activities carried out in various consumer electronics products and benefits derived from these activities:
• Introduced new technology called Liquid Luminous - Technology for more natural colour reproduction.
• Development and production of Digital Direct Broadcast (DDB) technology in India with a broader convergence of TV, d2h, Internet and Cloud Computing.
• Personal Video Recorder (PVR) feature added in DDB platform - This feature enables customer to record favorite program of d2h to watch it later at convenient time.
• The large screen LED TVs i.e. 80", 65", 58", 55" LED TVs have been launched with the incredible DDB Technology. .
• New 4K -65" Curved TV is introduced.
• New 4K Smart TV series launched 40"/43750"/55765".
• A 58" cinema scope TV having an aspect ratio of 21:9 which is altogether a different segment than the conventional LED TVs. It enables users to experience a theatre like environment at home.
• Platform for "Internet TV" based on Windows Operating System having DTH facility. This advancement completes the need of today with digital signal reception and internet accessibility. This platform gives freedom for live chatting, video conferencing, browsing, e-mail accessing etc.
• PIXUS LED is again advancement in display technology which has direct LEDs in it instead of complete display unit. This integrated module is a revolutionary product which has more colours, vivid pictures and better viewing angle. The in-house designed audio system "BOOM BOX" adds much value to this TV.
• Metallica Series: As aesthetical advancement in display technology, the real metal finish LED has altogether a sophisticated look with advance TV algorithms for vivid picture and sound. The lustrous look and slim design has made them pioneers in market.
• Introduction of Refrigerators with a Deep Freezer that can maintain temperature of "-30 C".
• Introduction of Refrigerators with revolutionary features like
"Photosis Fresh", "4-Way cooling system", "Door Alarm", "Digital Clock". •
• Launched various models of refrigerators with smart features such as digital sensor, electronic display control, new looks etc.
• Introduction of DigiGracia Series of 6.5 kg, 6.0 kg, 5.5 kg Fully Automal (FA) Washing Machines with 10 Wash Programs, 10 Water levels, rinse hold feature resulting in less water consumption.
• Digi Zara Platinum series of Fully Automatic Top Loaded machines which are sleek and with modern technology like UV sterilization for hygiene wash, hot air dry technology in top load washing machine which take laundry cleaning and hygiene to new level.
• New Fully Auto washing machine Digi-Virat with 10 kg Washing capacity and in-built heater feature has been introduced which is first of its kind for combination of higher washing capacity with in-built heater.
• DigiGracia series from 5.5 kg to 7.0 kg FA Washing Machines with vibrant colours and aesthetically superior looks, water saver function, multiple wash selection option, lesser water consumption and higher performance.
• New designer Platinum range of Zara series of semi-automatic washing machines with new features and trendy looks.
Future plan of action:
In near future, the Company shall focus on environment friendly products and also focus efforts on new technologies which could offer better products in the domestic as well as international market. The Company has the following plans through R & D:
• New Range Super narrow bezel will be introduced 23.6732740743";
• Star rated TV will be introduced by which annual energy consumption will be reduced;
• New Range of 4K2K Smart Curve TV and 4K2K LED TV will be introduced;
• "Liquid Luminous Plus" technology will be introduced - Technology of more than 100% colour reproduction;
• Increase in the market share and enhance the Brand Value; and
• Bring in best features of various products together.
During the year under review, the Company has incurred Rs. 37.30 Million, representing 0.03% of the turnover towards recurring R & D expenses.
FOREIGN EXCHANGE EARNINGS AND OUTGO
The particulars of Foreign Exchange Earnings and Outgo during the financial year ended on 31 st December, 2015 are set out hereunder:
RISK MANAGEMENT POLICY OF THE COMPANY
The Company has in place the Risk Management Policy to identify the risk elements and manage, monitor and report on the principal risks and uncertainties that can impact its ability to achieve its strategic objectives. The Company has proper confidentialities and privacy policies to control risk elements. The Company has wherever required, taken insurance policies to protect the property, assets etc.
The Company has formed the Risk Management Committee. The scope and composition of the Committee forms part of the Corporate Governance Report. Further, the members of the Risk Management Committee and the senior management personnel review the Risk
Management Policy periodically and discuss and mitigate the identified risks from time to time.
CORPORATE SOCIAL RESPONSIBILITY POLICY
Contribution to Society is one of the core values of the Company. Corporate Social Responsibility (CSR) encompasses within itself sustainability which means creating an awareness of climate change and social imbalance and demands suitable actions for its enhancement. The Company is continuously reviewing its efforts towards improving the quality of life of the communities it serves.
It is not only important for organizations to formulate CSR strategies but also important to make the employees adopt the same.
Your Company believes that while profit is important for all businesses, profit cannot be the only reason for the existence. Your Company conducts its business in a sustainable and socially responsible manner. This principle is an integral part of your Company’s corporate values. The Company continues to impact the lives of people through relentless CSR initiatives. Your Company has put in place the policy including CSR priorities and actions for improvement everywhere in the organization. The Policy is available on the Company's website viz. www.videoconworld.com.
Your Company ensures to remain in a constant dialogue with customers, suppliers and other parties which enable the Company to explore new business opportunities and it shall continue to discharge its CSR in the best possible manner.
The Company has formed a CSR Committee in terms of the provisions of Section 135 of the Companies Act, 2013 and Rules made thereunder read along with Schedule VII of the Act. The scope and composition of the Committee forms part of the Corporate Governance Report. Further, since the average net profit for the three immediately preceding financial years was negative, the Company has not made any CSR expenditure, in specific.
HEALTH & SAFETY
Safety is an area of paramount importance in our Company. A well defined occupational health and safety management system is in place to ensure the safety of employees, workforce as well as equipment and machinery. Our Company continues to exhibit a robust assurance towards Safety, Health and Environment during the year under review. The Health & Safety initiatives adopted by the Company & some new system(s) developed are -
• Installation of new/additional fire extinguishers and fire balls for attending immediate small fire in case of any emergency.
• Established a CCTV controlled room in respective shopfloor areas for the close monitoring of safety and Emergency purpose.
• Display of all Emergency Exit and Evacuation Plan in auto glow board at shopfloors.
• Increased the Fire Marshal(s) quantity in shop floor by adding skills for any emergency.
• Provision of Safety equipments in campus such as PG gas detector, road convex mirror, fire blanket, fire bucket, first aid box and breathing apparatus set.
• Strictly adhere to hot work permit system with availability of security guard for close monitoring.
• Provision of new Ambulance van along with suitable medical accessories to reduce response time during emergency situation & human injury.
• Periodic refresher training conducted for security guard regarding fire prevention & control to enhance competency level.
• Conducting regular safety audit & mock drill as per calendar in the campus.
• Incidents/Accidents Investigation and Reporting with Root cause, corrective and preventive actions.
• Defined the fire points at high hazard area (Zone-0).
• Carried out HPT (Hydraulic Pressure Testing) of pressurized extinguisher as per Maharashtra Fire Prevention & Life Safety Measures Act.
• Displayed cautionary signs at high hazardous areas to warn workers about imminent hazard dealt at site.
• Enhanced road safety - displayed road convex mirror, speed limit board and guidelines for visitors.
• Emergency evacuation plans with location of fire extinguisher are displayed at the entrance of the building.
• Visualization in the campus to access assembly point, first aid box & emergency exit door.
• Displayed MSDS (Material Safety Data Sheet) at chemical storage area as per Rule 73-M from Maharashtra Factory Rules, 1963.
• Creating mass awareness amongst all workers by celebrating Safety promotional activities like - National safety week, Fire service week, Electrical safety week.
• Availability of well equipped Occupational Health Center (OHC) in case of emergency.
• Regular counseling and medical checkups to ensure fitness of its employees.
• Arrangements at manufacturing plants for ensuring safety and absence of risks to health in connection with the use, handling, storage and transport of articles and substances.
• Compliance with the legal requirement of Directorate of Industrial Safety & Health (DISH), Chief Fire Office etc.
• Conducting Safety Committee Meeting to strengthen the safety.
ENVIRONMENTAL PROTECTION
Environmental protection is a practice of protecting the natural environment on individual, organizational or governmental levels, for the benefit of both natural environment and humans. Due to the pressures of population and technology, the biophysical environment is being degraded, sometimes permanently. This has been recognized and governments have begun placing restraints on activities that cause environmental degradation.
Your Company is committed to Green Initiative wherein it has established a green management goal for significantly reducing greenhouse gases and launching eco friendly products.
Your Company adopted the following eco friendly initiatives for the environment:
• Established the Chemical Lab for Waste Water Testing purpose in campus as per Central Pollution Control Board norms.
• Installed Gray Water Treatment plant in canteen area to treat the 10 KLD waste water /day.
• Recertification of ISO-14001 for Environmental Management System.
• Hazardous waste is sent to authorized party for disposal as per defined duration.
• Regular Air & Water Monitoring as per (NAAQS - 2010) Standards.
• Celebration of world environment day, to increase the mass awareness among the employees.
• Upgradation of effluent treatment & sewage treatment plant and using treated water for gardening.
Your Company is in compliance of e-waste rules and guidelines and has a tie up on all India basis, with authorized recycler for collection and disposal of e-waste products. The Company has taken the initiative to spread awareness regarding e-waste management and its handling and disposal through print media, social sites and advertisement campaign by way of putting standee, educating the dealers and the end consumers. INFORMATION TECHNOLOGY
Your Company continues to invest in Information Technology (IT) thereby leveraging it as a source of competitive advantage.
A good IT infrastructure in the Company is absolutely necessary for complying with the regulatory or safety norms, to improve performance and quality via real-time process monitoring, and finally, improve reliability via appropriate maintenance driven by up-to-date information on equipment status.
We have taken major steps in business process transformation program in direct coordination with our senior leadership team. This exercise is transforming business processes as per the industry’s best business practices and helping your organization in strengthening existing processes across functions in the organization.
We as an enterprise are fully focused on leveraging complete advantage of our SAP system. We are continuously auditing our existing processes mapped in SAR identifying the gaps and fulfilling the same across our organization. We are also using IT to the optimum benefits of our MIS users and decision makers. This whole exercise is helping us to be the leader in our space and helping us in reducing the cost, increasing our profit margins, bringing efficiency in our operations, building controls etc.
Your Company understands the significance and impact of the digital revolution and has significantly progressed in this direction by revamping of Brand Websites, implementing many new Microsites and opting for many Tab/Mobile based applications. Your Company has made its presence felt across globe through social media campaigns and digital advertisement. We are transforming our customer’s experience and operations to be the digital leader in our space.
Your Company has matured Sales Transformation & Enhancement Program (STEP) application, an innovative & customised in-house developed sales tool for providing day to day information required by sales force on the field. This tool helps in improving efficiency, enhancing ability & productivity of sales force, leading to long-term business sustainability and customer delight. In addition to STER we have also progressed significantly in ISD Sales Application roll out for PAN India Locations. This application will significantly improve our ISD Sales performance.
Your Company is riding on the technology wave and improving IT systems in complete sync with organization’s goals.
DISCLOSURE AS REQUIRED UNDER SECTION 22 OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013
Your Company is committed towards providing a healthy environment and thus does not tolerate any discrimination and/or harassment in any form. The Company has in place an Internal Complaints Committee to inter-alia:
1) Prevent sexual harassment at the workplace; and
2) Redress the complaints in this regard.
During the year under review, the Company did not receive any complaint.
DETAILS OF DIRECTORS/KEY MANAGERIAL PERSONNEL APPOINTED/RESIGNED DURING THE YEAR
During the year under review, pursuant to the provisions of second proviso to Section 149(1) and Section 161 of the Companies Act, 2013 and the Rules made thereunder and in terms of the Articles of Association of the Company, Mrs. Ramabai V. Dhoot was appointed as an Additional Director (Promoter, Non-Executive) of the Company w.e.f. 28th February, 2015. Subsequently, her appointment was confirmed and she was appointed as Promoter Non-Executive Director by the shareholders of the Company at the Annual General Meeting held on 27th June, 2015, liable to retire by rotation.
Further, appointment of Mr. Radheyshyam Agarwal, Mr. Anil Joshi and Maj. Gen. Sudhir Chintamani Nilkanth Jatar as Independent Directors of the Company for a period of five consequent years from 14th August, 2014 was confirmed by the shareholders of the Company at their Annual General Meeting held on 27th June, 2015.
Mr. Venugopal N. Dhoot was re-appointed as Managing Director of the Company for a period of five years w.e.f. 1 st September, 2015 to 31st August, 2020, liable to retire by rotation, at nil remuneration. His re-appointment was approved by the shareholders of the Company at the Annual General Meeting of the Company held on 27th June, 2015. During the year under review, Mr. Anil Joshi, one of the Independent Directors of the Company left for heavenly abode on 16th November, 2015. The Board would like to express its deep condolence towards the sad demise of Mr. Anil Joshi and also expresses their rich tribute towards the contribution made by him during his tenure as the Director of.the Company.
After the balance sheet date:
1. Mr. Bhopinder Jagdish Mittar Chopra, was appointed as an Independent Director w.e.f. 30th January, 2016, to fill the casual vacancy caused by the sad demise of Mr. Anil Joshi, to hold office upto the date upto which Mr. Anil Joshi would have held office if he had not passed away.
Mr. Bhopinder Jagdish Mittar Chopra, 81 years, is a Bachelor in Science and has done PGD in Electrical Communication Engineering. He has a vast experience in the fields of manufacturing, marketing and finance.
2. Pursuant to the provisions of Section 167(1 )(b) of the Companies Act, 2013, Mrs. Ramabai V Dhoot, ceased to be the Director of the Company on account of not attending the meetings of the Board of Directors during the period of preceding twelve months ended on 29th February, 2016.
3. Mr. Subhash Dayama was appointed as an Additional Director on the Board of the Company at the meeting held on 14th May, 2016. In terms of the provisions of the Companies Act, 2013 and the Rules made thereunder, he holds office upto the date of ensuing Annual General Meeting. The Company has received a notice in writing alongwith the requisite deposit from a member under Section 160 of the Companies Act, 2013, signifying its intention to propose the candidature of Mr. Subhash Dayama for the office of Directors of the Company. The Board recommends his appointment.
A brief profile of Mr. Venugopal N. Dhoot, Mr. Subhash Dayama and Mr. Bhopinder Jagdish Mittar Chopra, nature of expertise in specific functional area, name of other public companies in which they hold directorship, membership/chairmanship of committees of the Board of Directors, particulars of the shareholding and relationship between the directors, KMR manager as stipulated under Regulation 36(3) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is appended to the Notice.
Details of Key Managerial Personnel:
The Company is in compliance with the provisions of Section 203 of the Companies Act, 2013. Following are the Key Managerial Personnel as per the said provisions:
1. Mr. Venugopal N. Dhoot - Managing Director
2. Mr. Ashutosh Gune - Chief Financial Officer
3. Mr. Vinod Kumar Bohra - Company Secretary
DECLARATION GIVEN BY INDEPENDENT DIRECTORS
The Company has received necessary declaration from each Independent Director of the Company under Section 149(7) of the Companies Act, 2013 and the provisions of SEBI (Listing Obligations and Discloure Requirements) Regulations, 2015 stating that they meet the criteria of independence as provided therein.
NUMBER OF MEETINGS OF THE BOARD HELD DURING THE YEAR
During the financial year under review, the Board met 4 times. The details regarding the attendance and the date of Board Meetings are provided in the Corporate Governance Report.
COMMITTEES OF THE BOARD
Pursuant to the provisions of the Companies Act, 2013 and provisions of the SEBI (Listing Obligations and Discloure Requirements) Regulations, 2015 the Company has constituted following Committees:
1. Audit Committee
2. Nomination and Remuneration Committee
3. Stakeholders' Relationship Committee
4. Corporate Social Responsibility Committee
5. Risk Management Committee
6. Rights Issue Committee
7. Re-organization Committee
8. Finance and General Affairs Committee
The composition, scope and powers of the aforementioned Committees together with details of meetings held during the year under review, and details of Vigil Mechanism forms part of Corporate Governance Report.
FORMAL ANNUAL EVALUATION
During the year under review, pursuant to the provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Discloure Requirements) Regulations, 2015 the Nomination and Remuneration Committee adopted a formal mechanism for evaluatingthe performance of the Board of Directors as well as that of its Committees and individual Directors, including Chairman of the Board, Key Managerial Personnel/ Senior Management etc. The exercise was carried out through an evaluation process covering aspects such as composition of the Board, experience, competencies, governance issues etc.
LISTING
The equity shares of your Company are listed on the BSE Limited (Formerly: The Bombay Stock Exchange Limited) and The National Stock Exchange of India Limited (NSE). The Global Depository Receipts (GDRs) and Foreign Currency Convertible Bonds (FCCBs) issued by your Company are listed on the Bourse de Luxembourg and Singapore Exchange Securities Trading Limited respectively.
CORPORATE GOVERNANCE
The Company has complied with the corporate governance requirements under the Companies Act, 2013, and as stipulated under the SEBI (Listing Obligations and Discloure Requirements) Regulations, 2015. A separate section on Corporate Governance under the SEBI (Listing Obligations and Discloure Requirements) Regulations, 2015 along with a certificate from the auditors confirming the compliance, is annexed and forms part of this Annual Report.
CONSOLIDATED FINANCIAL STATEMENTS As stipulated by Regulation 33 of the SEBI (Listing Obligations and Discloure Requirements) Regulations, 2015 the Consolidated Financial Statements have been prepared by the Company in accordance with the applicable Accounting Standards. The audited Consolidated Financial Statements together with Auditors’ Report form part of the Annual Report.
Pursuant to the provisions of Section 136 of the Companies Act, 2013, the financial statements of the subsidiary, associates and joint venture companies will be kept for inspection by the shareholders at the Registered Office of the Company during working hours for a period of 21 days before the date of the Annual General Meeting. The Company shall provide the copy of the financial statements of its subsidiaries, associates and joint venture companies to the shareholders upon their request. The audited accounts are also available on the website of the Company viz. www.videoconworld.com.
CASH FLOW STATEMENT
The Cash Flow Statement for the year ended 31st December, 2015, in conformity with the provisions of Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 with the Stock Exchanges in India, is annexed hereto.
AUDITORS AND THEIR REPORTS
1. STATUTORY AUDITORS AND AUDIT REPORT:
The Members of the Company at the 25th Annual General Meeting held on 27th June, 2015 had approved the appointment of M/s. Kadam & Co., Chartered Accountants, (Firm Registration No. 104524W), Ahmednagar, and M/s. Khandelwal Jain & Co., Chartered Accountants, (Firm Registration No. 105049W), Mumbai for a term of 3 years i.e. from the conclusion of 25th Annual General Meeting until the conclusion of 28th Annual General Meeting of the Company.
Pursuant to Rule 3(7) of the Companies (Audit and Auditors) Rules, 2014, the aforesaid appointment needs to be ratified by the members at the ensuing Annual General Meeting. Accordingly, the appointment of M/s. Kadam & Co., Chartered Accountants, (Firm Registration No. 104524W), Ahmednagar, and M/s. Khandelwal Jain & Co., Chartered Accountants, (Firm Registration No. 105049W), Mumbai as the Statutory Auditors of the Company to hold office from the conclusion of this Annual General Meeting until the conclusion of 28th Annual General Meeting is recommended for ratification by the members.
A certificate from M/s. Kadam & Co., Chartered Accountants, (Firm Registration No. 104524W), Ahmednagar, and M/s. Khandelwal Jain & Co., Chartered Accountants, (Firm Registration No. 105049W), Mumbai that their appointment is within the prescribed limits under Section 141 of the Companies Act, 2013 has been obtained by the Company.
The Board recommends the ratification of appointment of the said Auditors at the ensuing Annual General Meeting.
AUDIT REPORT
The Statutory Auditors of the Company have submitted Auditors’ Report, which have certain Qualifications on the Standalone and Consolidated Financial Statements for the year ended on 31 st December, 2015.
Management’s Explanation to the Auditors’ Qualifications: Standalone:
In respect of the qualification with regards to extent of realisability of investments of Rs. 75,002.00 Million and the advances to Videocon Telecommunications Limited (VTL), the subsidiary, the explanation of management is as under:
The Company has, directly and through its subsidiaries, made investments of Rs. 75,002.00 Million and also given advances to VTL. The licenses awarded by the Department of Telecommunications (DoT) to VTL to provide Unified Access Services (UAS) in 21 circles in India w.e.f. 25th January, 2008, were quashed by the Hon’ble Supreme Court of India, vide its order and judgement dated 2nd February, 2012.
Subsequently, VTL participated in the auction conducted by DoT and has been awarded the Unified Licenses Access Services for 6 circles with effect from 16th February, 2013, which are valid for a period of 20 years. VTL has also been allotted spectrum in these 6 circles. VTL is continuing its commercial operations.
Though VTL has huge accumulated losses, its networth is positive and the management is confident of mobilizing the necessary resources for continuing the operations of VTL as per the business plan. VTL is continuing its commercial operation. VTL has also entered into the agreement for trading the right to use spectrum with Bharti Airtel Limited. Accordingly, in the opinion of the management, no provision is required for diminution in the value of aforesaid investments and advances to VTL.
Consolidated:
In respect of the Auditors’ qualification in the Auditors’ Report on the Consolidated Financial Statement for the year ended 31st December,
2015, regarding assessment of impairment not carried out and the appropriateness of the carrying value of USD 126.39 Million (equivalent to f 8,412.90 Million) of exploration and evaluation assets of Videocon JPDA 06-103 Limited (JPDA) the explanation of management is as under:
The joint venture parties are still in negotiations with Autoridade Nacional Do Petroleo, Temor-Leste (ANP) and post negotiations, the necessary evaluation of the residual assets and impairment, if required will be carried out.
Emphasis of Matter in Consolidated Financial Statements
The auditors of subsidiary companies, namely Videocon Hydrocarbon Holdings Limited, Videocon JPDA06-103 Limited, Videocon Indonesia Nunukan Inc., Videocon Australia WA-388-P Limited and the joint venture IBV Brasil Petroleo Limitada have given emphasis of matter that as the said subsidiaries and joint venture are in exploration stage and in the absence of commercial operations, the ability to continue as a going concern is substantially dependent on their ability to fund their operating and capital expenditure requirement.
The explanation of the management is as under:
The management is confident of mobilizing the necessary resources for continuing the operations of all the subsidiaries and the joint venture, particularly in view of the fact that in certain cases of companies/ joint venture engaged in exploration and production of oil and gas, the operators have reported major discoveries which they intend to develop in an integrated manner to make it optimal and more economical. Accordingly, the financial statements have been prepared by the said subsidiaries and joint venture on a going concern basis.
2. COST AUDITOR AND COST AUDIT REPORT:
In accordance with the provisions of Section 148 of the Companies Act, 2013 read with the Companies (Audit & Auditors) Rules, 2014 and amendments made thereto; from time to time, the Board of Directors of the Company have accorded its approval for appointment of Mr. Jayant B. Galande, Cost Accountant in Whole-Time Practice, Aurangabad (Membership Number 5255) as the Cost Auditor of the Company, to conduct audit of Cost Accounting Records maintained by the Company for the financial period commencing on 1 st January,
2016. In respect of the products covered as mentioned below:
1. Electricals or Electronic Machinery;
2. Other Machinery;
3. Glass;
4. Petroleum Products; and
5. Generation, transmission, distribution and supply of electricity other than for captive generation.
In compliance with the provisions, the remuneration payable to the Cost Auditor has to be ratified by the members of the Company. Accordingly, consent of the Members is sought by way of an Ordinary Resolution for ratification of the remuneration amounting to Rs. 1,10,000/- (Rupees One Lakh Ten Thousand Only) excluding applicable service tax and out-of-pocket expenses payable to the Cost Auditor for the financial year commencing on 1 st January, 2016.
In compliance with provisions of the Companies (Cost Audit Report) Rules, 2011 and General Circulars thereof, we hereby submit that the Company has filed the Cost Audit Report for the financial period started from 1st July, 2013 and ended on 31st December, 2014 on 23rd June, 2015 (due date 29th June, 2015). For the financial year ended on 31 st December, 2015, the due date for filling the Cost Audit Report is 28th June, 2016 and the Company shall file the same on or before due date.
3. SECRETARIAL AUDITOR AND SECRETARIAL AUDIT REPORT:
The Board had appointed Mr. Soumitra Mujumdar, Company Secretary in Whole-time Practice, (CP No.: 12363) to carry out Secretarial Audit under the provisions of Section 204 of the Companies Act, 2013 for the financial year ended on 31st December, 2015. The report of the Secretarial Auditor is annexed to this report as Annexure 4. In connection with the auditor’s observation in the report, it is clarified that the delay in filing of Annual Return in Form MGT - 7 for the period 1 st July, 2013 to 31 st December, 2014 was due to technical difficulty in filing. The Company has filed the said form.
DETAILS OF FRAUDS, IF ANY, REPORTED BY AUDITORS (OTHER THAN REPORTABLE TO CENTRAL GOVERNMENT)
No fraud/misconduct was detected at the time of statutory audit by Auditors of the Company for the financial year ended on 31st December, 2015.
ADEQUACY OF INTERNAL FINANCIAL CONTROLS
The Company has in place adequate internal financial controls with reference to financial statements. During the year, such controls were tested and no reportable material weakness in the design or operation were observed.
EXTRACT OF ANNUAL RETURN
The extract of Annual Return pursuant to the provisions of Section 92 of the Companies Act, 2013 read with Rule 12 of the Companies (Management and Administration) Rules, 2014 is annexed herewith as Annexure 5.
ORDERS PASSED BY REGULATORS/ COURTS/ TRIBUNALS
No material orders were passed by Regulators/ Courts / Tribunals during the year impacting the going concern status and Company’s operations in future.
DIRECTOR RESPONSIBILITY STATEMENT
In accordance with the provisions of Section 134(5) of the Companies Act, 2013 the Board hereby submit its responsibility Statement:—
(a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;
(b) the directors had selected such accounting policies and applied them consistently and made judgements 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 loss 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 this Act 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 were operating effectively; and
(f) the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
ACKNOWLEDGEMENT
The Board of Directors would like to thank the Customers, Vendors, Investors, Financial Institutions, Bankers, Business Partners and Government Authorities for their continued support. The Board of Directors also appreciate the contribution made by the employees at all levels for their hard work, dedication, co-operation and support for the growth of the Company.
The Board of Directors would also like to thank all stakeholders for the continued confidence and trust placed by them with the Company.
ANNEXURE-1
FORM AOC-1
STATEMENT CONTAINING SAILENT FEATURES OF THE FINANCIAL STATEMENT OF SUBSIDIARIES / ASSOCIATE COMPANIES/ JOINT VENTURES
[Pursuant to First Proviso of Sub-Section (3) of Section 129 read with Rule 5 of Companies (Accounts) Rules, 2014]
(A) SUBSIDIARY COMPANIES
us$
100.00
€
BRL
US$
RO
CNY
Note:- The reporting period of alt the Subsidiaries is same as that of the Holding Company i.e., 31 st December, 2015.
(B) ASSOCIATES AND JOINT VENTURES
Latest Audited Balance Sheet Date
Shares of Associate/ Joint Ventures held by the Company on the year end
Networth attributable to Shareholding as per latest audited Balance Sheet
Profit/ Loss for the year
Description of how there is significant influence
Reasons why the Associate/ Joint Venture is not consolidated
Note-
(a) There is a significant influence by virtue of joint control.
(b) There is a significant influence due to percentage of share capital. Names of the subsidiaries which are yet to commence operations
(a) Videocon International Cooperatie U.A
(b) Videocon Hydrocarbon Ventures B.V.
(c) Videocon Brasil Ventures B.V
(d) Videocon Brasil Petroleo Ltda
(e) indigo Energy Private Limited
(f) Percept Energy Private Limited
ANNEXURE-2
STATEMENT OF PARTICULRS OF EMPLOYEES PURSUANT TO PROVISIONS OF SECTION 197 (12) OF THE COMPANIES ACT, 2013 READ WITH COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014
(a) Remuneration includes Basic Salary, Ex-Gratia, H.R.A., Marketing Allowance, Special Allowance, C.A, L.T.A., Leave Encashment, Medical reimbursement and contribution to Provident Fund.
(b) The Employees are in whole-time employment of the Company and the employment is contractual in nature.
(c) None of the Employees listed above is a relative of any director or manager of the Company.
(d) Except Mr. Abhijit Kotnis, Mr. Sudarshan Sheigaonkar, Mr. V G Shilvant and Mr. Pankaj Kothari who hold 0.00% (47 shares), 0.00% (75 shares), 0.00% (163 shares) and 0.00% (1 share) respectively, in the Company, none of the other Employee holds any shares. * Part of the year
ANNEXURE-3
INFORMATION PURSUANT TO SECTION 197(12) OF THE COMPANIES ACT, 2013 READ WITH RULE 5(1) OF THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014
(1) Ratio of the remuneration of each Director/KMP (as defined in Section 203 of the Companies Act, 2013) to the median remuneration of all the employees of the Company for the financial year:
(a) The Promoter Directors, Executive Directors and Promoter- Non-Executive Director are not paid any sitting fees or any other remuneration.
Mr. Venugopal N. Dhoot, Chairman and Managing Director is not entitled for remuneration as per his terms of appointment.
(b) The Independent Directors are paid only sitting fees for attending Board/Committee Meetings.
Notes:
(a) The ratio of remuneration to the median remuneration is based on the remuneration paid during the year 1st January, 2015 to 31st December, 2015. Though the previous accounting period was for a period of 18 months, in order to make the remuneration comparable, the remuneration paid for the period 1st January, 2014 to 31st December, 2014 has been considered.
(b) Except for sitting fees, Directors are not paid any remuneration.
(c) As regards, Mr. Subroto Gupta, the remuneration paid in 2015 is not comparable to the remuneration paid in 2014, since he was appointed w.e.f 14th November, 2014. Further, it is clarified that the sitting fees are paid in favour of the IDBI Bank Limited.
(d) Median remuneration of other employees excluding Key Managerial Personnel has increased by 7.76%.
(e) Increase in average remuneration of employees excluding Key Managerial Personnel is 8.37%.
(f) Remuneration of Key Managerial Personnel has increased by 6.78%.
(2) Relationship between average increase in remuneration and performance of the Company:
Net Revenue of the Company during the Financial Year 2015 declined by 1.79% at Rs. 124,182.13 Million as compared to previous period of 18 months Rs. 189,676.03 Million. The total employee cost during the said period was Rs. 2,834.32 Million. The overall performance of the Company was affected due to economic slowdown, which resulted in lower business volumes. More details are explained in the Directors’ Report and Management Discussion and Analysis Report. Average increase in remuneration is guided by various factors such as normal salary revision, inflation and other external factors.
(3) Comparison of the remuneration of the Key Managerial Performance against the performance of the Company:
(4) Variation in the market capitalisation of the company, price earnings ratio as at the closing date of the current financial year and previous financial year and percentage increase over decrease in the market quotations of the shares of the company in comparison to the rate at which the company came out with the last public offer:
(5) Average percentile increase made in the salaries of employees other than the Managerial personnel and its comparison with the percentile increase in the Managerial Remuneration and justification thereof:
Average percentile increase in the salaries of employees other than Managerial Personnel is 8.37% while percentile increase in the Managerial Remuneration is 6.78%.
(6) Comparison of remuneration of KMP against the performance of the Company:
KMP
(7) Key parameters for variable component of remuneration paid to Directors:
(8) The ratio of remuneration of the highest paid Director to that of the employees who are not Directors but receive remuneration in excess of the highest paid Director during the year:
The highest paid Director of the Company is Mr. Radheyshyam Agarwal. He was paid Rs. 630,000/-. There are huge number of employees drawing remuneration in excess of him.
(9) The remuneration is as per the Nomination and Remuneration policy of the Company.
ANNEXURE-4
SECRETARIAL AUDIT REPORT
To
The Members, Videocon Industries Limited
14 K.M. Stone, Aurangabad Paithan Road,
Village Chittegaon, Taluka Paithan,
Aurangabad - 431105 Maharashtra
I have conducted the secretarial audit of the compliance of applicable statutory provisions and the adherence to good corporate practices by Videocon Industries Limited, (hereinafter called the "Company"). Secretarial Audit was conducted in a manner that provided me a reasonable basis for evaluating the corporate conducts/statutory compliances and expressing my opinion thereon.
Based on my verification of the Company's books, papers, minute books, forms and returns filed and other records maintained by the Company and also the information provided by the Company, its officers, agents and authorized representatives during the conduct of secretarial audit, I hereby report that in my opinion, the Company has, during the audit period covering the financial year from 1st January, 2015 to 31st December, 2015 ("Audit Period") complied with the statutory provisions listed hereunder and also that the Company has proper Board-processes and compliance-mechanism in place to the extent, in the manner and subject to the reporting made hereinafter:
I have examined the books, papers, minute books, forms and returns filed and other records maintained by the Company for the financial year ended on 31 st December, 2015 according to the provisions of:
i. The Companies Act, 2013 (the "Act") and the rules made thereunder;
ii. The Securities Contracts (Regulation) Act, 1956 ("SCRA") and the rules made thereunder;
iii. The Depositories Act, 1996 and the Regulations and Bye-laws framed thereunder;
iv. Foreign Exchange Management Act, 1999 and the rules and regulations made thereunder to the extent of Foreign Direct Investment, Overseas Direct Investment and External Commercial Borrowings;
v. The following Regulations and Guidelines prescribed under the Securities and Exchange Board of India Act, 1992 ("SEBI Act"):
a. The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011;
b. The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 1992;
c. The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009 (Not applicable to the Company during the Audit Period);
d. The Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 and The Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 w.e.f. October 28, 2014 (Not applicable to the Company during the Audit Period);
e. The Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008 (Not applicable to the Company during the Audit Period);
f. The Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents) Regulations, 1993 regarding the Companies Act and dealing with client;
g. The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009 (Not applicable to the Company during the Audit Period);
h. The Securities and Exchange Board of India (Buyback of Securities) Regulations, 1998 (Not applicable to the Company during the Audit Period);
i. The Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 as and when notified in the Official Gazette during the Audit Period for the Company.
I have also examined compliance with the applicable clauses of the following:
i. Secretarial Standards issued by The Institute of Company Secretaries of India. The compliance regarding maintenance of records under Secretarial Standards (specifically SS-1 and SS-2) was checked only for such meetings convened in the Audit Period which were held after 1st July, 2015.
ii. The Listing Agreements entered into by the Company with the BSE Limited and National Stock Exchange of India Limited.
I have relied on the representation made by the Company and its officers for the systems and mechanisms formed by the Company for compliances under applicable Acts, Rules, Laws and Regulations to the Company. The list of major head or groups of Acts, Rules, Laws and Regulations as applicable to the Company is given in Annexure B.
I have not examined compliance by the Company with applicable financial laws, like direct and indirect tax laws and their regulatory compliances, since the same have been subject to review by statutory financial audit and other designated professionals.
During the period under review the Company has complied with the provisions of the Act, Rules, Regulations, Guidelines, Standards, etc. mentioned above subject to the following observation:
i. The Company has delayed the filing of its Annual Return (e-Form MGT-7) for the period 1st July, 2013 to 31st December, 2014 beyond the stipulated time of sixty days from the date of the last convened Annual General Meeting held on 27th June, 2015 as set out in Section 92(4) of the Act.
Apart from the above mentioned observation, I would like to highlight the following matters:
i. The Company is required to comply with the provisions of Section 138 of the Act read with Rule 13 of Companies (Accounts) Rules, 2014 regarding appointment of Internal Auditor within six months of the commencement of the Act. The Company has in place an in-house internal audit team led by in house internal auditor to carry out the audit of internal records maintained by the Company and the said constitution/appointment was prior to commencement of the Act. Hence, the Company was not required to file e-Form MGT-14 for appointment of Internal Auditor.
ii. The Company has already appointed Chief Financial Officer (CFO) prior to the commencement of the Act. Hence, the Company has clarified that it was not required to file e-form MR-1 and e-Form DIR-12 for appointment of CFO. However, in my opinion, an e-form DIR-12 should have been filed ratifying the appointment of the CFO under the provisions of Section 203 of the Act.
I further report that:
i. The Board of Directors of the Company is duly constituted with proper balance of Executive Directors, Non-Executive Directors
and Independent Directors. The changes in the composition of the Board of Directors that took place during the period under review were carried out in compliance with the provisions of the Act.
ii. Adequate notice is given to all directors to schedule the Board Meetings, agenda and detailed notes on agenda were sent at least seven days in advance, and a system exists for seeking and obtaining further information and clarifications on the agenda items before the meeting and for meaningful participation at the meeting.
iii. All decisions at Board Meetings and Committee Meetings are carried out unanimously as recorded in the minutes of the meetings of the Board of Directors or Committee of the Board, as the case may be.
I further report that there are adequate systems and processes in the Company commensurate with the size and operations of the Company to monitor and ensure compliance with applicable laws, rules, regulations and guidelines.
I further report that during the Audit Period, the following major events took place:
i. The Company had passed a special resolution in its Annual General Meeting held on 27th June, 2015 to issue, offer and allot equity shares and/or other equity linked or convertible financial instruments ("OFIs") in one or more tranches, whether denominated in Indian Rupee or foreign currency(ies), in the course of international and/or domestic offering(s) in one or more foreign market(s), for an amount not exceeding Rs. 5,000 Crores (Rupees Five Thousand Crores Only), or its equivalent in foreign currency, inclusive of premium, through a Follow-on Public Offering ("FPO") to eligible investors, or through Global Depository Receipts ("GDRs"), American Depository Receipts ("ADRs"), Foreign Currency Convertible Bonds ("FCCBs"), any other Depository Receipt Mechanism convertible into Equity Shares (either at the option of the Company or the holders thereof).
ii. During the year under review, the Foreign Currency Convertible Bonds (Bonds) amounting to US$ 194.40 Million due in December, 2015 were fully redeemed by issue of new Bonds of US$ 97.20 Million due on 31st December, 2020 (pursuant to the aforesaid special resolution) and balance US$ 97.20 Million payment in cash.
Sd/-
CS Soumitra Mujumdar
ACS 30938 CP 12363
Date: 14th May, 2016
Place: Mumbai
This report to be read with my letter of even date which is annexed as Annexure A and forms an integral part of this report.
Annexure A
The Members,
Videocon Industries Limited
My secretarial audit report of even date is to be read along with this letter.
i. Maintenance of secretarial and other records is the responsibility of the management of the Company. My responsibility is to express an opinion on these records based on my audit.
ii. I have followed the audit practices and process as were appropriate to obtain reasonable assurance about the correctness of the contents of the secretarial and other records. The verification was done on test basis to ensure that correct facts are reflected in secretarial records. I believe that the processes and practices,
I followed, provide a reasonable basis for my opinion.
iii. I have not verified the correctness and appropriateness of financial records and Books of Accounts of the Company.
iv. Wherever required, I have obtained the Management representation about the compliance of laws, rules and regulations and happening of certain events during the Audit Period.
v. The compliance of the provisions of corporate and other applicable laws, rules, regulations, standards is the responsibility of management. My examination was limited to the verification of procedures on test basis and expressing an opinion on the same.
Annexure B
i. Factories Act, 1948
ii. Industrial Disputes Act, 1947
iii. The Payment of Wages Act, 1936
iv. The Minimum Wages Act, 1948
v. Employees State Insurance Act, 1948
vi. The Employees Provident Funds and Miscellaneous Provisions Act, 1952
vii. The Payment of Bonus Act, 1965
viii. The Payment of Gratuity Act, 1972
ix. The Contract Labour (Regulation & Abolition) Act, 1970 .
x. The Maternity Benefit Act, 1961
xi. The Child Labour (Prohibition & Regulation) Act, 1986
xii. The Industrial Employment (Standing Orders) Act, 1946
xiii. The Employees Compensation Act, 1923
xiv. The Apprentices Act, 1961
xv. Equal Remuneration Act, 1976
xvi. The Employment Exchange (Compulsory Notification of Vacancies) Act, 1959
xvii. Water (Prevention and Control of Pollution) Act, 1974
xviii. Air (Prevention and Control of Pollution) Act, 1981
xix. Environment Protection Act, 1986
xx. Hazardous Wastes (Management, Handling and Transboundary Movement) Rules, 2008
xxi. E-Waste Management & Handling Rules, 2016