You can view full text of the Director's Report for Videocon Industries Ltd.
The 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.
The performance of the Company, on standalone basis, for the financial
year ended on 31 st December, 2015, is summarized below:
(Rs. in Million)
Year Ended Ended 31st
Particulars 31st December, December,
Net Revenue from Operations 124,182.13 189,676.03
Other Income 8,443.33 11,651.42
Total Income 132,625.46 201,327.45
Profit Before Finance Costs, 30,094.69 45,093.02
Depreciation and Tax
Finance Costs 23,684.59 35,188.96
Depreciation and Amortization 7,017.14 9,858.11
Profit/(Loss) Before Tax (607.04) 45.95
Tax Expenses (48.99) 15.55
Profit/(Loss) for the Year/ Period (558.05) 30.40
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.
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
- 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.
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 of Rs. 3,31i 0 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
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.
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.
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,
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/unclaimed dividend for the Financial Year 2007-08 to the
Investor Education and Protection Fund.
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.
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
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
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
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.
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
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 sustainable 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
- 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,
- Conducting energy saving training sessions for employees at all
levels so as to increase awareness for utilization of natural
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/Improved 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
- 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"/43"/50"/55"/65".
- 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
- 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
- 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
- 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
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
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.
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
- 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
- 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
- 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
- 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
- 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 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
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
- 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
- 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.
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
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
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
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
DETAILS OF DIRECTORS/KEY MANAGERIAL PERSONNEL APPOINTED/RESIGNED DURING
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, 201S.
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
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
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
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, KMP, 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
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.
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
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.
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 31st December, 2015.
Management''s Explanation to the Auditors'' Qualifications:
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.
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 t 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;
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
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,
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
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
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
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
(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.
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.
For and on behalf of the Board of Directors of
VIDEOCON INDUSTRIES LIMITED
VENUGOPAL N. DHOOT
Place: Mumbai CHAIRMAN & MANAGING DIRECTOR
Date: 14th May, 2016 DIN: 00092450