SPECIAL BUSINESS 6. To consider and if thought fit, to pass the following resolution, with or without, modification/s, as a Special Resolution:

Transcription

1 Notice NOTICE IS HEREBY GIVEN THAT THE EIGHTEENTH ANNUAL GENERAL MEETING OF THE MEMBERS OF TORRENT CABLES LIMITED (formerly known as Torrent Gujarat Biotech Ltd.) will be held on Thursday, 23rd July, 2009 at A.M. at Sheth Shree Amrutlal Hargovandas Memorial Hall, Gujarat Chamber of Commerce & Industry, Shree Ambica Mills Gujarat Chamber Building, Ashram Road, Ahmedabad to transact the following business : ORDINARY BUSINESS 1. To receive, consider and adopt the audited Balance Sheet as at 31st March, 2009 and the audited Profit and Loss Account of the Company for the period ended on that date, together with the Directors Report and the Auditors Report thereon. 2. To declare dividend on equity shares. 3. To appoint a Director in place of Shri V S Parikh, who retires by rotation and being eligible, offers himself for reappointment. 4. To appoint a Director in place of Shri V A Shah, who retires by rotation and being eligible, offers himself for reappointment. 5. To appoint Auditors and to fix their remuneration. SPECIAL BUSINESS 6. To consider and if thought fit, to pass the following resolution, with or without, modification/s, as a Special Resolution: NOTES: Alteration of Article of Association of the Company RESOLVED THAT pursuant to Section 31 and other applicable provisions, if any, of the Companies Act, 1956, the consent of the members be and is hereby accorded to the alteration in the Articles of Association of the Company, as stated hereunder : To insert the following Articles in the present Articles of Association of the Company after Article 55 : Article 56 - Buyback of Shares The Company shall have power, subject to and in accordance with the provisions of Sections 77A, 77AA and 77B of the Act and other relevant regulations, as applicable, including regulations laid down by the SEBI and / or the Government of India in this regard from time to time, to purchase any of its own shares or such other specified securities. Article 57 - Postal Ballot The Company shall put to vote such of the resolutions as are specified by the Authority, pursuant to provision of Section 192A of the Act through postal ballot or as may be specified from time to time and shall declare the results thereof within the time specified under the Act without holding the meeting. Notwithstanding the provisions of Articles of Association, the Board of Directors of the Company shall at their absolute discretion, obtain the decision of the members with regard to any matter through postal ballot and if the Directors so decide, the provisions of Section 192A and other provisions of the Act shall apply to such resolutions as if the resolutions were compulsorily required to be passed through postal ballot. 1) A MEMBER ENTITLED TO ATTEND AND VOTE AT THE MEETING IS ENTITLED TO APPOINT A PROXY TO ATTEND AND VOTE INSTEAD OF HIMSELF AND A PROXY NEED NOT BE A MEMBER OF THE COMPANY. 1

2 2) A proxy form, duly completed and stamped, must reach the Registered Office of the Company not later than 48 hours before the time of holding the aforesaid Meeting. 3) The Register of Members and the Share Transfer Books of the Company will remain closed from 16th July, 2009 to 23rd July, 2009 (both days inclusive). 4) The Explanatory Statement pursuant to Section 173(2) of the Companies Act, 1956 is annexed hereto in respect of Special Business and form part of this notice. 5) Members seeking any information or clarification on the accounts are requested to send written queries to the Company, at least 10 days before the date of the meeting, to enable the management to keep the required information available at the meeting. 6) All the documents referred to in the Notice are open for inspection at the Corporate Office of the Company between a.m. to p.m. on all working days except Saturdays, Sundays and Public Holidays until the date of the Annual General Meeting or any adjournment(s) thereof. 7) Members are requested to intimate the Company or its Registrar and Transfer Agents any change in address, immediately. 8) Members are requested to bring their copy of Annual Report to the Meeting. Registered Office Torrent House, Off Ashram Road Ahmedabad Dated : Place : Ahmedabad By order of the Board of Directors B K PATEL COMPANY SECRETARY Explanatory Statement pursuant to Section 173(2) of the Companies Act, Item No. 6 Considering the amendments made in the Companies Act, 1956 by the Government from time to time, it is necessary to insert new Articles in the Articles of Association relating to postal ballot and buy back of shares, as the present Articles of Association of the Company does not contain these provisions. The above newly inserted Articles were placed before the Board of Directors at its meeting held on 6 th May, 2009 and the Board has recommended the same for approval of the shareholders of the Company, by passing a special resolution. None of the Directors of the Company is concerned or interested in the said resolution. The Directors recommend the resolution for your approval. Registered Office By order of the Board of Directors Torrent House, Off Ashram Road Ahmedabad Dated : B K PATEL Place : Ahmedabad COMPANY SECRETARY Torrent Cables Ltd. 2

3 Directors Report Dear Shareholders, The Directors present the Eighteenth Annual Report on the business and operations of the Company and the Audited Accounts for nine months period ended 31 st March, Financial Results (Rupees in crore) Particulars Sales / Income Profit before interest, Depreciation, Taxation Less: Interest Depreciation Profit before tax Less: Provision for Tax and fringe benefit tax Add: Provision for Taxation of earlier years not required Add: Deferred Tax Asset Net Profit for the year Balance of profit/(loss) brought forward from previous year Debit balance adjusted against Reconstruction Reserve Balance Profit of merged company Balance of Profit available for appropriation Appropriation : Transferred to General Reserve Equity dividend Tax on Distributed Profit Balance of Profit carried to the Balance Sheet Nine Months ended Year ended (202.59) Dividend Your Directors recommend a dividend of Rs per equity share amounting to Rs crore. The tax on this dividend will be Rs crore. The proposed dividend would be tax free in the hands of shareholders. Operations The gross sales for the period July, 2008 to March, 2009 was Rs crore. Your Company has earned Profit Before Tax (PBT) of Rs crore. The Accounting Year has been changed from June ending to March ending. Accordingly the figures for year under review are for nine months (July, 2008 to March, 2009) and hence are not comparable with the previous years figures. Due to meltdown in economy the demand was affected. Further unpredicted increase in raw material prices during the period April, 2008 to August, 2008 also affected the margins substantially. Future Prospects and Plans The power cable industry is likely to grow in the years ahead. Our industry is linked to power business. India has deficit of MW. It is projected that in the next 10 years, demand is likely to cross 3 lacs MW. The present day financial constraints has deferred or delayed the investment plans. But to achieve 8% GDP growth the investment in infrastructure is imminent. The initiatives by the Government to reduce the financial cost will have a positive impact and in time to come investments picks up the momentum, cable industry demand will also increase. The new H.T. cable line is likely to be commissioned in September, 2009 and commercial production to begin from October, 2009, means delay by two months. The investment will be within the limit of Rs. 64 crore as planned. The decreasing trend in raw material prices from October, 2008 end till March, 2009 has taken the reverse turn and now the prices are firming up or on increasing trend. The present trend may affect the performance in time to come. Finance The Company has arranged for Suppliers Line of Credit to the extent of Rs. 20 crore for the imported equipments in respect of expansion undertaken at Nadiad plant. The Company has utilized the facility to the extent of Rs. 10 crores. Further, Company 3

4 has disbursed Rs. 23 crore from internal accruals for the expansion. Apart from Rs. 10 crore stated above, Company has no other borrowings. Transfer to Investor Education and Protection Fund Pursuant to Section 205C of the Companies Act, 1956, the Company has transferred Rs. 33,778/- being unclaimed debenture Interest for the year and Rs. 3,13,885/- being unclaimed third installment of redemption of debentures, during the year to the Investor Education and Protection Fund established by the Central Government. Directors Responsibility Statement As required by Section 217 (2AA) of Companies Act, 1956, the Directors inform that : 1. The applicable Accounting Standards, as specified by the Institute of Chartered Accountants of India, have been followed in the preparation of the Annual Accounts. 2. The Accounting Policies have been applied consistently, subject to such adjustments and estimates have been made for the preparation of accounts that are reasonable and prudent, so as to give a true and fair view of the state of the affairs of the Company at the end of the financial year and the profit of the Company for the year. 3. The Company has taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 to safeguard the assets of the Company and to prevent fraud and irregularities. 4. The annual accounts have been prepared on a going concern basis. Corporate Governance Pursuant to Clause 49 of the Listing Agreement with the Stock Exchange, Management Discussion and Analysis Report, Corporate Governance Report, Auditors Certificate regarding compliance of conditions of Corporate Governance and declaration by Director-in-Charge for Compliance of Code of Conduct, form part of this Annual Report. Holding Company Torrent Private Ltd. is holding 61% of the Equity Shares of your Company and accordingly, your Company is a subsidiary of Torrent Private Ltd. Particulars of Employees No employee is drawing remuneration as provided under the Companies (Particulars of Employees) Rules, 1975 and hence information as required under Section 217(2A) of the Companies Act, 1956 is not required to be furnished. Directors Shri R.S. Agarwal has submitted resignation at the Board Meeting held on 6th May, 2009 and the Board has accepted his resignation at the meeting held on 6th May, The Directors wish to take note of the contributions made by him. Shri V A Shah and Shri V.S. Parikh, Directors of the Company retire by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment. Auditors The Auditors, M/s. C C Chokshi & Co., Chartered Accountants, Ahmedabad retire at the ensuing Annual General Meeting and are eligible for re-appointment. The Audit Committee in their meeting held on 6 th May, 2009 has recommended the reappointment of M/s. C C Chokshi & Co., as Auditors of the Company. Notes on Accounts are self explanatory and do not require further explanation. Insurance All the properties of the Company including factory buildings, plant and machinery, stocks, etc. are adequately insured. Fixed Deposits The Company has not been accepting / renewing fixed deposit since January, Energy Conservation, Research & Development and Foreign Exchange Earning & Outgo A statement containing necessary information required under the Companies (Disclosures of Particulars in the Report of Board of Directors) Rules, 1988 is annexed and forms part of this report. (Annexure 1) Torrent Cables Ltd. 4

5 Acknowledgements Your Directors are grateful and pleased to place on record their appreciation for the support, guidance and co-operation extended by the Government of Gujarat, Banks and esteemed customers including Group Companies. The Board, also express its appreciation for the understanding and support extended by the shareholders and employees of the Company, at all levels. Dated : 6 th May, 2009 Place : Ahmedabad For and on behalf of the Board ROHIT C MEHTA Chairman ANNEXURE 1 TO DIRECTOR S REPORT INFORMATION REQUIRED UNDER THE COMPANIES (DISCLOSURE OF PARTICULARS IN THE REPORT OF THE BOARD OF DIRECTORS) RULES, A) CONSERVATION OF ENERGY a) Replaced the steady type Cooling tower with rotating sprinkler type for efficient cooling of water. b) Reduced Furnace Oil consumption by reducing volume of steam curing chamber for small cable drums. B) RESEARCH AND DEVELOPMENT a) 22/33 kv Wet cure cables developed. b) Process developed for use of water sealant tapes. C) FOREIGN EXCHANGE EARNING AND OUTGO The information on foreign exchange earning and outgo is furnished in Note No. 8 of Part B of Schedule 17 : Notes on Accounts. Report on Corporate Governance 1. Company s Philosophy on Corporate Governance The Board of Directors believes that the code prescribes minimum framework for Governance of a business in corporate framework. The Company believes that it must govern its affairs, so as to optimize satisfaction among all its stakeholders, which include shareholders, lenders, suppliers, customers and employees. The Company attaches equal importance to both - ends and means. The Company sees the governance norms originating in the stock market institutions as an integral part of its corporate governance philosophy, to be respected not just in the letter but, more importantly, in spirit. The Company has set, as a mission, the implementation of a system to ensure transparency, control, accountability, responsibility and fairness in all areas of operations. 2. Management The Board of Directors : The present Board of Directors consists of six Directors. The composition of Board is complying with the requirements of Clause 49(I)(A) - i.e. more than 50% of the directors are non-executive directors and more than 33% of the directors are independent directors. The detailed composition of the Board and other related information is given in the table below: 5

6 Name of the Director Category No. of other Directorships (excluding Pvt. Ltd. & Sec. 25 Companies) No. of other Board Committees of which Member/ Chairman No. of Board Meetings Attended Last AGM attended Shri Rohit C Mehta* Non-Executive & Independent 3 1/1 3 Yes Chairman Shri V S Parikh* Non-Executive & Independent Yes Shri Prafull Anubhai* Non-Executive & Independent 6*** 4/4 2 Yes Shri R S Agarwal* Non-Executive & Independent 9 6/6 3 Yes Shri V A Shah Non-Executive - Promoter Group 5 0/1 6 Yes Shri Jagrut Vyas* Director-in-Charge - Promoter Group Yes Shri S M Shah** Non-Executive & Independent 2 0/3 4 No Shri A G Thakore** Non-Executive & Independent No Shri J K Satta** Non-Executive & Independent 1 3/1 4 No * Appointed w.e.f. from ** Resigned w.e.f. from *** Includes Directorship in one foreign Company As required by the Companies Act, 1956 and Clause 49 of Listing Agreement, none of the directors hold directorship in more than 15 public companies or membership of committees of the Board (Audit/Investor Grievance Committees) in excess of 10 or chairmanship of committees of the Board, as aforesaid in excess of 5. Details of Board Meetings held Date of Meeting No. of Directors Present 29 th August, th September, th October, th October, th November, rd January, The time gap between any two meetings was less than four months. Details of Directors seeking appointment/re-appointment at the ensuing Annual General Meeting: Shri V A Shah Shri Vasant A Shah is a Chartered Accountant and possess more than 41 years of experience in the field of accounts and finance. He was with Torrent Group since He is holding Directorship in various companies viz. Gujarat Lease Financing Ltd., GLFL Housing Finance Ltd. and Indo Col-Chem Ltd. Shri V. S. Parikh Shri Vipin S Parikh is a leading Solicitor and Advocate in Ahmedabad. He is Director of Textile Traders Co-op. Bank Ltd. 3. Audit Committee : The composition of the Audit Committee and other related details are as under. Sr. No. Name of Director Category No. of meetings Attended 1. Shri V S Parikh, Chairman* Non-Executive, Independent 3 2. Shri Prafull Anubhai, Member* Non-Executive, Independent 2 3. Shri R S Agrawal, Member* Non-Executive, Independent 3 4. Shri Jagrut Vyas, Member* Executive, Promoter Group 3 5. Shri S M Shah** Non-Executive, Independent 1 6. Shri V A Shah** Executive, Promoter Group 1 7. Shri A G Thakore** Non-Executive, Independent 1 8. Shri J K Satta** Non-Executive, Independent 1 * Appointed w.e.f. from ** Ceased w.e.f. from Torrent Cables Ltd. 6

7 Shri Vipin S Parikh is Chairman of the Audit Committee. Shri R.S. Agarwal possess expert knowledge in finance & accounts. The above composition meets with all requirements of Clause 49 of the Listing Agreement and Section 292A of the Companies Act, The Company Secretary acts as the Secretary of the Audit Committee. The terms of reference for the Audit Committee are as stipulated in Clause 49 of Listing Agreement and as laid down in Circular No. SEBI/CFD/DIL/CG/1/2004/12/10 dated 29 th October, 2004 Annexure I Clause II (D). During the period July, 2008 to March, 2009, four meetings of the Audit Committee were held on 16 th September, 2008, 24 th October, 2008, 18 th November, 2008 and 23 rd January, The minutes of the Audit Committee Meetings were circulated to the Board, discussed and taken note of. The functions of the Audit Committee are as per Company Law and Listing Agreement with Stock Exchange. Broadly the same are (i) oversee company s financial reporting process (ii) recommend the appointment or removal of External Auditors, decide the audit fee as well as approve fees for other services, discuss the nature and scope of audit and ascertain the areas of concern (iii) review the annual and quarterly financial statements (iv) review changes in the accounting policies and practices of major accounting entries (v) review adjustments in financial statements, highlighted by audit findings (vi) review disclosure of related party transactions (vii) review with the Management the performance of statutory and internal audit and adequacy of internal control system (viii) review the adequacy of internal audit function and discuss with them, significant findings, if any (ix) review the findings of internal investigations in case of suspected fraud or irregularity and (x) probe into the reasons for substantial default in payment of declared dividend. 4. Remuneration Committee The Board did not have a remuneration committee. The requirement to have a remuneration committee is currently not mandatory. 5. Remuneration to Directors During the year, Company has not paid any remuneration to the Directors. Non-Executive Directors, not belonging to the Promoter Group, were paid sitting fees of Rs.10,000/- each for every Board and Audit Committee Meetings attended by them. Manager: Shri Prakash Satyan was Manager of the Company under Section 2(24) of the Companies Act, Salary and perquisites paid to Shri Prakash Satyan for the period to was Rs. 8,81,234/-. 6. Shareholders /Investors Grievance Committee The composition of the Shareholders /Investors Grievance Committee and other related details are as under : Sr. No Name of Director Category No. of meetings Attended 1. Shri V S Parikh, Chairman* Non-Executive, Independent 2 2. Shri Prafull Anubhai, Member* Non-Executive, Independent 1 3 Shri Jagrut Vyas, Member* Executive, Promoter Group 2 4 Shri S M Shah** Non-Executive, Independent 1 5 Shri V A Shah** Executive, Promoter Group 1 6 Shri A G Thakore** Non-Executive, Independent 1 7 Shri J K Satta** Non-Executive, Independent 1 * Appointed w.e.f. from ** Ceased w.e.f. from Shri Vipin S Parikh is the Chairman of the Committee. During the period July, 2008 to March, 2009, three meetings of the Shareholders /Investors Grievance Committee were held on 16 th September, 2008, 1 st January, 2009 and 31 st March, The Minutes of the meetings of the Shareholders / Investors Grievance Committee were discussed and taken note of by the Board of Directors. The Committee ensures the effective redressal of the complaints of the shareholders such as dematerialization, transfer, non-receipt of balance sheet/dividend etc. The Committee also recommends steps to be taken for further improvement in the quality of services to the investors. The Company received 17 (including opening Nil) complaints during the year and all were resolved to the satisfaction 7

8 of the investors. There were no valid requests for transfer/transmission of shares, issue of duplicate shares etc. were pending as on The Company Secretary acts as the Secretary and Compliance Officer of the Shareholders / Investors Grievance Committee. 7. General Body Meetings : The details of Annual General Meetings held in last three years are as under : AGM Date of AGM Accounting Year 15th 30 th August, th 9 th October, th 29 th December, Time of Meeting 1 A.M. 1 A.M A.M. Venue/Location Sheth Shri A.H. Memorial Hall Gujarat Chamber of Commerce & Industry, Ashram Road, Ahmedabad H T Parekh Convention Centre Ahmedabad Management Association, ATIRA Campus, Ahmedabad Sheth Shri A.H. Memorial Hall Gujarat Chamber of Commerce & Industry, Ashram Road, Ahmedabad No. of Special Resolutions passed 1 1 No special resolution was put through the postal ballot last year. 8. Disclosures : Transactions with related parties are disclosed in detail in Note No of Schedule 17 Part B, Notes forming part of the Accounts annexed to the financial statements for the year. Adequate care was taken to ensure that the potential conflict of interest did not harm the interests of the Company at large. Shri Vasant A Shah, Director holds 5 shares of the Company as on 31 st March, There has been no instance of non-compliance by the Company. No penalties or strictures were imposed on the Company by Stock Exchange or SEBI or any other authority, on any matter related to capital markets during the last three years. 9. Means of Communication: The Company had submitted its quarterly, half yearly & yearly financial results to the Stock Exchange soon after its approval by the Board and published the same in leading national newspapers. The Company did display the financial results on its Website. The Company did not send the half yearly report to the Shareholders. No presentations were made to the Institutional investors or analyst during the period under review. The Management Discussion & Analysis report has been included in the annual report. 10. General Shareholders Information : Date of Annual General Meeting : 23rd July, 2009, Thursday - Time :10.30 A. M. Venue : Sheth Shree Amrutlal Hargovandas Memorial Hall Gujarat Chamber of Commerce & Industry Shree Ambica Mills Gujarat Chamber Building Ashram Road, Ahmedabad Book Closure : 16th July, 2009 to 23rd July, 2009 (both days inclusive). Financial Calendar for the year : Financial Year 1 st April, 2009 to 31 st March, 2010 First Quarter Results July, 2009 Second Quarter and Half Yearly Results October, 2009 Third Quarter Results January, 2010 Yearly Results May, 2010 Annual General Meeting for the year July, 2010 Torrent Cables Ltd. 8

9 Listing on Stock Exchanges & Scrip Code: The shares of the Company are listed on The Bombay Stock Exchange Ltd., Mumbai and Scrip Code is Annual listing fee for the year has been paid to the Stock Exchange, Mumbai. Market Price Data: The table below gives the highs and lows of the Company s shares on The Bombay Stock Exchange Ltd., Mumbai (BSE) and performance in relation to the BSE Sensex from July, 2008 to March, Month and Year July, 2008 August, 2008 September, 2008 October, 2008 November, 2008 December, 2008 January, 2009 February, 2009 March, 2009 High (Rs.) Low (Rs.) Company Price BSE Sensex Company Price BSE Sensex Distribution of Shareholding as on 31 st March, 2009 : Sr. No. Category No. of Shares Percentage Promoters a) Holding Company b) Others Directors & their relatives Financial Institutions, Nationalised & other Banks Mutual Funds FIIs Corporate Bodies NRIs General Public 52,45, ,79,366 4,16,699 60,654 26,95, Total 85,98, Broad Shareholding Distribution : No. of Shares Shareholders Percentage No. of Shares Percentage 01 to to to to Above Total Dematerialisation of Shares : As on 31 st March, 2009, out of the total 85,98,395 equity shares held by 74,805 shareholders, approximately 79,97,750 equity shares held by 34,203 shareholders representing 93.01% of the total paid-up equity capital have been dematerialized. Demat security (ISIN) code for Equity Share is - INE859B

10 Registrar and Share Transfer Agents : MCS Limited 1 st Floor, Shatdal Complex Opp: Bata Show Room, Ashram Road, Ahmedabad Telephone: (079) Fax: (079) mcsamd@jindalonline.com Share Transfer System : The transfers which are complete in all respects are taken up for approval atleast once in a fortnight and the transferred securities dispatched to the transferee within 21 days. The details of transfer/transmission approved by the delegates were noted by the Board at its next meeting. Investor Correspondence : All enquiries, clarifications and correspondence should be addressed to the Compliance Officer at the following address : B K Patel, Company Secretary Torrent Cables Ltd. Pelican, 6 th Floor, GCCI Compound, Ashram Road, Ahmedabad Telephone: (079) , Fax: (079) bkpatel@torrentcables.com, Invgrievance@torrentcables.com Plant Location Torrent Cables Ltd. Yoginagar, Mission Road, Nadiad (Dist. Kheda) Auditors Certificate Regarding Compliance of Conditions of Corporate Governance To the Members of Torrent Cables Limited We have examined the compliance of conditions of Corporate Governance by Torrent Cables Limited, for the nine months period ended 31 st March, 2009 as stipulated in Clause 49 of the Listing Agreement of the said Company with the Stock Exchange. The compliance of conditions of Corporate Governance is the responsibility of the Management. Our examination was limited to procedures and implementation thereof, adopted by the Company for ensuring the compliance of the conditions of Corporate Governance. It is neither an audit nor an expression of an opinion on the financial statements of the Company. In our opinion and to the best of our information and according to the explanations given to us and based on the representations made by the Directors and Management, we certify that the Company has complied with the conditions of Corporate Governance as stipulated in the above mentioned Listing Agreement. We further state that such compliance is neither an assurance as to the future viability of the Company nor the efficiency or effectiveness with which the Management has conducted the affairs of the Company. For C C Chokshi & Co. Chartered Accountants GAURAV J SHAH Dated : Partner Place : Ahmedabad Membership No Declaration for Compliance of Code of Conduct Code of Conduct for Board Members and Senior Management Personnel was approved at the Board Meeting held on 24 th October, It was placed on the Website of the Company. Company has obtained confirmation for the compliance of Code of Conduct from all the Board Members and Senior Management Personnel of the Company on an annual basis. The Senior Management Personnel covers all the employees in the cadre of Vice President, General Manager and Assistant General Manager. This is a declaration as required by Circular No. SEBI/CFD/DIL/CG/1/2004/12/10 dated 29 th October, 2004 Annexure I Clause I (D) (II). Dated : Place : Ahmedabad JAGRUT VYAS Director-In-Charge Torrent Cables Ltd. 10

11 MANAGEMENT DISCUSSIONS AND ANALYSIS REPORT Power Cable Industry Outlook : The Power Cable Industry growth is likely to be sustained. GDP growth since for the five years was averaging at 8.9%. The world economy has been affected severely on account of meltdown. However, Indian economy growth is likely to be in the range of 7 / 7.5% in current financial year. The projects adding upto about MW are under construction and this provides enough opportunities for downstream ancillary industries. Power Utilities have to concentrate on Transmission and Distribution Loss reduction. In city area, overhead lines will have to be converted to underground lines. These factors are likely to have a positive impact on cable demand in time to come. The inflation rate is practically zero and not likely to move upward in near future. Reserve Bank of India is working in positive direction of lower interest regime. The Banks have reasonable good liquidity. Investment in infrastructure industry is likely to remain as a thrust area which will also lead to industrial growth. This is also likely to give push for the cable market. Emphasis on rural electrification programme provides a scope for cable market growth. Company Outlook : In order to capitalize on the growing market demand in the power sector, the Company has embarked on expanding its HT cable manufacturing capacity. The new HT XLPE line is expected to be completed by August, 2009 end and begin the commercial production from October, The Company is taking steps to restructure and strengthen the marketing set up and looking for different options of suitable marketing strategy to ensure the wide market reach and wider clients base. It has been conveyed earlier that the expanding the HT XLPE manufacturing capability is partially towards the replacement of the present line which is nearly 20 years old. The Management expects that the new line is not likely to remain idle. Risks & Concerns: Raw material prices continue to be the main area of concern. During the 1 st half of the year , prices of Aluminium, Copper, Steel and Compounding materials have increased. However, during the second half the trend was reversed. This unpredictable trend of the input prices affects the execution of the orders and margins. Further, the company will continue to focus on operational efficiency in all facets of manufacturing, in order to reduce the impact of such volatility in the raw material prices. Internal Control System: The Company has a Budgetary Control System and actual performance is reviewed with reference to budgets on a regular basis. The Company has a flat organization structure, which helps in conducting the business, effectively. The Company has an independent Chartered Accountant firm in practice, as Internal Auditor. They conduct regular audits, in order to ensure the compliance and adherence to management policies. They also suggest improvements in the system. The Internal Auditors reports are regularly reviewed by the management. Financial Performance v/s. operational performance: During the period July, 2008 to March, 2009, the Company has earned the Cash Profit Rs. 13 crore. The positive side is that the Cash Profit during January, 2009 to March, 2009 was Rs. 7 crore. The conservative financial planning with the focus to use the internal accruals for expansion, less dependency on borrowed funds has helped to control the interest cost substantially. Further, effective forward planning, conservative and efficient material procurement strategy, less overheads compared to the industry and bottom-line focus during order booking has helped to control cost and maintain the profitability. Human Resources: As part of the ongoing expansion program, the Company will be investing substantially in Human Resources from recruitment, training & development and retention stand-point. The Company has been fully committed and involved in planning the appropriate training programs, considering every individual s skill level and future development. The Company fosters creativity and provides an open and free work environment, in order to best utilize the strengths of its employees, its most valued assets. Industrial relations continue to be cordial at all levels. 11

12 Auditors Report to The Members of Torrent Cables Limited 1. We have audited the attached Balance Sheet of Torrent Cables Limited, as at 31st March, 2009 and also the Profit and Loss Account and the Cash Flow Statement for the nine month period ended on that date, annexed thereto. These financial statements are the responsibility of the Company s management. Our responsibility is to express an opinion on these financial statements based on our audit. 2. We conducted our audit in accordance with auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. 3. As required by the Companies (Auditor s Report) Order, 2003, (the Order ) issued by the Central Government in terms of Section 227(4A) of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in Paragraphs 4 and 5 of the Order. 4. Further to our comments in the Annexure referred to in paragraph 3 above, we report that: (a) we have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit; (b) in our opinion, proper books of account as required by law have been kept by the Company so far as appears from our examination of those books; (c) the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account; (d) in our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report comply with the accounting standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956; (e) on the basis of written representations received from the directors as on 31st March, 2009 and taken on record by the Board of Directors of the Company, we report that none of the directors is disqualified as on 31st March, 2009 from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, (f) in our opinion and to the best of our information and according to the explanations given to us, the said accounts read together with the notes thereon, give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India: (i) in the case of the Balance Sheet of the state of the affairs of the Company as at 31st March, 2009; (ii) in the case of the Profit and Loss Account of the profit of the Company for the nine month period ended on that date; and (iii) in the case of the Cash Flow Statement, of the cash flows for the nine month period ended on that date. For C. C. Chokshi & Co. Chartered Accountants (Gaurav J. Shah) Place : Ahmedabad Partner Date : Membership No Annexure to the Auditors Report (Referred to in paragraph 3 of our report of even date) 1. The nature of the Company s business / activities during the period is such that the requirements of clauses (xiii) and (xiv) of paragraph 4 of the Companies (Auditor s Report) Order, 2003 are not applicable to the Company. 2. (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets. (b) The fixed assets have been physically verified by the management during the period and according to the information and explanations given to us, no material discrepancies were noticed on such verification. (c) There was no substantial disposal of fixed assets during the period. 3. (a) The inventories have been physically verified by the management during the period. In our opinion, the frequency of such verification is reasonable. (b) In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business. (c) In our opinion and according to the information and explanations given to us, the Company has maintained proper records of its inventories and no material discrepancies were noticed on physical verification as compared to book records. 4. (a) The Company has not granted any loans to companies, firms or other parties listed in the register maintained under Section 301 of the Companies Act, (b) The Company had taken interest free loan from a company covered in the register maintained under Section 301 of Torrent Cables Ltd. 12

13 the Companies Act, The maximum amount involved during the period was Rs lacs and the period end balance of the loan was Nil. (c) As per the information and explanations given to us, in our opinion, the other terms and conditions on which the interest free loan had been taken are not, prima facie, prejudicial to the interest of the Company. 5. In our opinion and according to the information and explanations given to us, there are adequate internal control systems commensurate with the size of the Company and the nature of its business for purchases of inventory and fixed assets and for the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in such internal control systems. 6. To the best of our knowledge and belief and according to the information and explanations given to us, the Company has not entered into any transactions which require to be recorded in the register maintained under Section 301 of the Companies Act, According to the information and explanations given to us, the Company has not accepted any deposits from the public. Therefore, the provisions of Clause (vi) of paragraph 4 of the Order are not applicable to the Company. 8. The Company has appointed a firm of Chartered Accountants for carrying out internal audit. On the basis of the reports made by them to the management, in our opinion, the internal audit system is commensurate with the size of the Company and the nature of its business. 9. We have broadly reviewed the accounts maintained by the Company, pursuant to the Rules made by the Central Government for the maintenance of cost records under Section 209(1)(d) of the Companies Act, 1956, for the Company s products to which the said rules are made applicable and are of the opinion that prima facie the prescribed accounts and records have been maintained. We have not, however, made a detailed examination of the records with a view to determining whether they are accurate or complete. 10. (a) According to the information and explanations given to us and the records of the Company examined by us, the Company has generally been regular in depositing undisputed statutory dues including provident fund, investor education and protection fund, employees state insurance, income-tax, sales-tax, wealth-tax, service tax, customs duty, excise duty, cess and other material statutory dues with appropriate authorities during the period. We are informed that no undisputed amounts payable in respect of above were in arrears, as at 31 st March, 2009 for a period of more than six months from the date on which they became payable. (b) According to the information and explanations given to us there are no dues of service tax/custom duty/wealth tax/ excise duty/cess which have not been deposited on account of any dispute. Details of dues of income tax and sales tax which have not been deposited as on 31 st March, 2009 on account of any dispute are as follows: 13 Name of the Statute Nature of dues Amount Rs. (in lacs) Period to which the amount relates Forum where the dispute is pending Income Tax Act, 1961 Income tax A.Y & Income-tax Appellate Tribunal Gujarat Sales Tax Act Sales tax Jt. Commr. of Commr.Tax (Appeal) Gujarat Sales Tax Act Sales tax Jt. Commr. of Commr.Tax (Appeal) 11. The Company does not have any accumulated losses at the end of the financial period and has not incurred cash losses in the current and immediately preceding financial year. 12. In our opinion and according to the information and explanations given to us, the Company has not defaulted in the repayment of dues to a financial institution, bank or debenture holders. 13 Based on our examination of the records and the information and explanations given to us, the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities. 14. According to the information and explanations given to us, the Company has not given any guarantee during the period for loans taken by others from banks or financial institutions. 15. Term loan taken by the Company during the period has been applied for the purpose for which it was raised. 16. According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we report that funds raised on short-term basis have, prima facie, not been used during the period for long term investment. 17. The Company has not made any preferential allotment of shares during the period to parties and companies covered in the register maintained under Section 301 of the Companies Act, The Company did not have any debentures outstanding at the end of the financial period. 19. The Company has not raised any money by way of public issue during the period. 20. To the best of our knowledge and belief and according to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the course of our audit. For C. C. Chokshi & Co. Chartered Accountants (Gaurav J. Shah) Place : Ahmedabad Partner Date : Membership No

14 Balance Sheet As At 31st March, 2009 (Rs. in lacs) As at As at SOURCES OF FUNDS Shareholders Funds: Share Capital Reserves & Surplus Loan Funds: Secured Loans Unsecured Loans TOTAL APPLICATION OF FUNDS Fixed Assets: Gross Block Less: Depreciation Net Block Capital Work in Progress Investments Deferred Tax Asset Current Assets, Loans & Advances Inventories Sundry Debtors Cash & Bank Balances Loans & Advances Less: Current Liabilities & Provisions Net Current Assets TOTAL Significant Accounting Policies and Notes on Accounts 17 As per our report of JAGRUT VYAS ROHIT C. MEHTA Chairman even date attached Director-in-Charge V. S. PARIKH Director For C.C. Chokshi & Co., PRAFULL ANUBHAI Director Chartered Accountants R. S. AGARWAL Director V. A. SHAH Director GAURAV J SHAH B. K. PATEL Partner Company Secretary Dated : Dated : Place : Ahmedabad Place : Ahmedabad Torrent Cables Ltd. 14

15 Profit & Loss Account for the 9 months ended 31st March, 2009 As per our report of JAGRUT VYAS ROHIT C. MEHTA Chairman even date attached Director-in-Charge V. S. PARIKH Director For C.C. Chokshi & Co., PRAFULL ANUBHAI Director Chartered Accountants R. S. AGARWAL Director V. A. SHAH Director GAURAV J SHAH B. K. PATEL Partner Company Secretary Dated : Dated : Place : Ahmedabad Place : Ahmedabad 15 (Rs. in lacs) 9 Months ended Year ended (Ref. Note 18 of Sch. 17 Part B) INCOME: Sales (Gross) Less : Excise duty Sales tax Net Sales Increase/(Decrease) in Finished Goods and Work in Process stocks (313.64) Other income TOTAL EXPENDITURE: Material cost and other consumptions Employees remuneration Other expenses Provision for doubtful debts Interest to banks and others Depreciation TOTAL Profit for the year before taxation Less/(Add) : Tax provisions Current tax Deferred Tax (0.41) (62.76) Fringe benefit tax Provision for taxation (including deferred tax) of earlier years no longer required (20.79) ( ) Profit for the year after taxation Add/(Less): Balance brought forward from previous year ( ) Less : Debit Balance as on adjusted against Reconstruction Reserve pursuant to the Scheme of Amalgamation Add : Balance of profit of the transferor company for the period from 1st July, 2006 to 30th June, Available for Appropriations Appropriations: Proposed Dividend Distribution Tax on Proposed Dividend Dividend for of merged company Torrent Cables Ltd Tax on dividend Transfer to General Reserve Balance carried to Balance Sheet Basic & Diluted Earnings Per Share [Refer Note 11 of Schedule 17(B)] Rs Rs Significant Accounting Policies and Notes on Accounts 17

16 Cash Flow Statement For The 9 Months Ended 31st March, 2009 (Rs. in lacs) 9 Months ended Year ended (Ref. Note 18 of Sch. 17 Part B) A) CASH FLOW FROM OPERATING ACTIVITIES Net Profit before tax Adjustments for: - Depreciation Provision for dimunation in value of investment no longer required (3.75) (4.50) - Interest Income (120.94) (50.13) - Dividend Income (51.89) (115.89) - Interest paid Loss/(Profit) on Assets sold Operating Profit Before Working Capital Changes Adjustments for: - Trade and other Receivables (429.67) - Inventories (291.91) Loans & Advances (401.27) Trade and other Payables (326.85) Cash generated from operations Direct Taxes (38.80) ( ) Cash flow from operating activities B) CASH FLOW FROM INVESTING ACTIVITIES Increase in Investment ( ) Decrease in investment Purchase of Fixed Assets ( ) (628.00) Sale of Fixed Assets Interest Income Dividend Income Net cash used in investing activities (131.05) ( ) C) CASH FLOW FROM FINANCING ACTIVITIES Dividend paid (350.04) Interest paid (4.82) (3.69) (Decrease) in Secured loan (14.90) (10.15) Increase in Secured Loan Unsecured loan repaid (6.85) Calls in arrears received 5.64 Net Cash used in financing activities (8.20) Net increase in cash and cash equivalents (A)+(B)+(C) Cash and Cash Equivalents at the beginning of the year Cash and Cash Equivalents transferred from Torrent Cables Ltd. as on Cash and Cash Equivalents at the close of the year Note: 1) Cash and Cash Equivalents includes monies lying with Banks on account of unclaimed interest, redemption amount of debentures and dividend not available for immediate use ) The above cash flow statement has been prepared under the Indirect Method as set out in the Accounting Standard - 3 on Cash Flow Statement issued by the Institute of Chartered Accountants of India. As per our report of JAGRUT VYAS ROHIT C. MEHTA Chairman even date attached Director-in-Charge V. S. PARIKH Director For C.C. Chokshi & Co., PRAFULL ANUBHAI Director Chartered Accountants R. S. AGARWAL Director V. A. SHAH Director GAURAV J SHAH B. K. PATEL Partner Company Secretary Dated : Dated : Place : Ahmedabad Place : Ahmedabad Torrent Cables Ltd. 16

17 Schedules forming part of the balance sheet (Rs. in lacs) PARTICULARS As at As at SCHEDULE - 1 SHARE CAPITAL AUTHORISED 7,00,00,000 Equity Shares of Rs. 10/- each ISSUED 4,50,00,011 Equity Shares of Rs.10/- each SUBSCRIBED 85,98,395 (Previous year 4,49,99,916) Equity Shares of Rs. 10/- each PAID UP 85,98,395 (Previous year 4,47,45,316) Equity Shares of Rs. 10/- each* Less: Share Capital Suspense - Equity Share Capital to be reduced pursuant to the Scheme of Amalgamation Total SHARE CAPITAL SUSPENSE NIL (Previous Year Equity Shares of Rs. 10/- each to be issued as fully paid-up to the shareholders of Torrent Cables Ltd. pursuant to the Scheme of Amalgamation without payment being received in cash Total *Note: 1) Equity Shares of Rs. 10/- fully paid have been issued pursuant to the Scheme of Amalgamation without payment being received in cash to the Shareholders of Merged Company - Torrent Cables Ltd. 2) Equity Shares are held by the holding Company - Torrent Pvt. Ltd. 17