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Videocon Industries Ltd.

BSE:511389  |  NSE:VIDEOINDBZ  |  58888:vind  |  IND:Electronics/Electricals  |  ISIN code:INE703A01011  |  SECT:Consumer Durables

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You can view full text of the Director's Report for Videocon Industries Ltd.
Director Report
Dec2014   Dec 2015
Dear Shareholders,



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.



PERFORMANCE REVIEW



The performance of the Company, on standalone basis, for the financial

year ended on 31 st December, 2015, is summarized below:



(Rs. in Million)



18 months

Year Ended Ended 31st

Particulars 31st December, December,

2015 2014



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.



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 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

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,

201S.



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.



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 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

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/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

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"/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

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.



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, 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

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, 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

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 31st 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 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;



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.



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

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