DIRECTORS' REPORT TO THE MEMBERS, Your Directors presents their Twenty First Annual Report, together with the Audited Accounts of the Company for the Financial Year ended March 31, 2015 OPERATIONAL PERFORMANCE At the outset your Directors are pleased to report that the year ended March 31, 2015 has been a milestone in the Company's history with it crossing Rs. 1,100 crores turnover mark on consolidated basis. This coinciding with the Company completing its successful existence for 20 years is a matter of pride for all of us. We are pleased to report that the financial year 2014-15 resulted in the Company to end the year with good performance, on both standalone as well as consolidated basis. On consolidated basis, the Total Income for the year 2014-15 was Rs. 11,128,528,639 (previous year Rs. 9,286,275,569) and the Profit Before Exceptional Items and Tax was Rs. 600,448,591 (previous year Rs. 511,061,149). After adjusting for Exceptional Item Rs. Nil (previous year Rs. 45,954,516) and Tax Rs. 65,269,383 (previous year Rs. 18,882,731), Net Profit After Tax was at Rs. 535,179,208 (previous year Rs. 446,223,902). After accounting for Minority Interest there from the Net Profit After Tax and Minority Interest at Rs. 505,852,897 is higher by 21% as compared to Rs. 419,425,849 of previous year. The Consolidated Financial Statements (CFS) includes the financial statements of Zicom Electronic Security Systems Limited ("the Company") and its subsidiary companies, namely, a) Zicom SaaS Private Limited ("Zicom SaaS"); b) Unisafe Fire Protection Specialists Singapore Pte. Ltd. ("Unisafe Singapore") and its subsidiaries, viz. Unisafe Fire Protection Specialists LLC, Dubai ("Unisafe Dubai") and its subsidiaries, and Phoenix International WLL, Qatar ("Phoenix Qatar"); c) Unisafe Fire Protection Specialists India Private Limited ("Unisafe India"); and d) Zicom Security Projects Pte. Ltd., Singapore ("Zicom Singapore") On standalone basis, the Total Income for the year 2014-15 was Rs. 3,905,323,251 (previous year Rs. 3,295,082,106). The Other Income also included dividend from subsidiaries received during the year under review amounting to Rs. Nil (previous year Rs. 6,592,000). The Profit Before Exceptional Item and Tax was Rs. 173,491,724 (previous year Rs. 150,676,499). After adjusting for Exceptional Item Rs. Nil (previous year Rs. 51,776,297) and Tax Rs. 60,472,214 (previous year Rs. 17,370,747), Net Profit After Tax at Rs. 113,019,510 is higher by 39% as compared to Rs. 81,529,455 of previous year. Further as can be seen from the Consolidated Financial Results given above, Earnings Before Depreciation, Interest and Tax (EBIDTA) at Rs. 1,446,820,045 (previous year Rs. 1,063,741,496) shows a jump of 36% over previous year, resulting into increased EBIDTA margin from 12% to 13%. BUSINESS DEVELOPMENTS AND PROSPECTS A close look at the consolidated performance of the Company for the year under review reveals that the performance of the fire security business of the Company in Middle East has continued to be encouraging, despite slump in global crude prices. This business is being conducted under the two flagship subsidiaries, Unisafe Dubai and Phoenix Qatar, which have successfully achieved all the set targets in terms of financial performance and customer satisfaction. In view of the fact that growth rate of about 20% has been achieved by these businesses despite slowdown; the performance can be rated on higher scale. Another highlight of good performance is performance reported by Zicom SaaS, which shown 93% growth in topline and 130% growth in bottom line. This has been possible due to continued flow of orders from Banks for ATM Surveillance and from Housing Societies in Mumbai and Pune under Make Your City Safe (MYCS) Programme. However, the contribution of Zicom SaaS to the consolidated top line and bottom line is insignificant as compared to that of fire security business, as SaaS business is at take off stage. As can be seen from the consolidated financial results given above, the Fire Detection and Protection business of Middle East has continued to be main contributor, with consistently improved performance which accounts for more than 50% of topline, has been a driving force behind it. Economies of these countries highly depend on oil and gas. With crude prices ruling around half the level of its peak price reached couple of year back, the economies of these countries could have witnessed recession. However, huge spending by Governments of these countries in infrastructure, tourism, hospitality and related facilities in view of planned commercial and sports events like Dubai World Expo 2020 and Qatar FIFA World Cup 2022 has helped sustaining economic growth there. Both, Unisafe Dubai and Phoenix Qatar have gained from this spending resulting into their sustained growth. In India, with new Government coming into power, high hopes are raised for economic recovery. With planned heavy spending on infrastructure, smart cities and commercial and industrial developments, outlook for our electronic security business particularly Project Solutions Business under Zicom standalone and Enterprise and MYCS Businesses under Zicom SaaS has been promising. This coupled with various steps being taken by the Company in the form of innovative products and services, helped by government policies and law enforcing agencies, has strong potential to show better performance in the current year. In Unisafe India, your Company's focus continued to work as Global Design Centre by catering to the design, engineering and estimate needs of all our projects in Gulf Region Our two wholly-owned subsidiaries in Singapore, viz. Unisafe Fire Protection Specialists Singapore Pte. Ltd. (Unisafe Singapore) and Zicom Security Projects Pte. Ltd. (Zicom Singapore) continues to hold our investment in Phoenix Qatar and Joint Venture (JV) investment in CiaoZicom Security Systems SA, Brazil respectively. DIVIDEND With a view to conserve resources to meet the business requirements, your Directors have recommend a dividend of Rs. 1.20 (Rs. 1.20) per Equity Share of Rs. 10 each (i.e. 12%) on enhanced share capital of 20,199,829 Equity Shares (17,599,829 Equity Shares) of the Company for the financial year 2014-15. This dividend will entail a total outgo of Rs. 29,174,436 (Rs. 24,546,619) which shows increase of 19%. The dividend outgo is higher on account of enhanced share capital and increase in rate of dividend tax. The dividend will be paid to Members whose names appear in the Register of Members as on September 21, 2015 and in respect of shares held in dematerialized form, it will be paid to Members whose names are furnished by National Securities Depository Limited and Central Depository Services (India) Limited, as beneficial owners as on that date. During the year in February 2015, 1,050,000 Warrants were issued and allotted to Promoter Group Companies on preferential basis. These Warrants entitle their holders to acquire equal number of equity shares on the terms and conditions of their issue. If entire of these Warrants or part of them are converted into equal number of Equity Shares, it may create an obligation on the Company to pay dividend for the Financial Year 2014-15 @ Rs. 1.20 per Equity Share, on such number of Equity Shares, which may be allotted on or before the record date fixed for deciding entitlement for the said dividend i.e. September 21, 2015. FINANCE During the year, the Company raised total Rs. 458,000,000 by preferential issue in accordance with SEBI's Guidelines for Preferential Issue, i.e. Chapter VII of SEBI ICDR Regulations. Under the said preferential issue, allotment of 2,600,000 Equity Shares of Rs. 10 each for cash at a price of Rs. 160 per share, aggregating to Rs. 416,000,000 was made on February 18, 2015 to non-promoter individuals / entity. Further, 1,050,000 Warrants, each Warrant carrying an entitlement to subscribe to one Equity Share of Rs. 10 each of the Company, were issued to Promoter Group Companies in accordance with SEBI's Guidelines for Preferential Issue. The holders of the said Warrants have right to acquire one Equity Share of the Company at a price of Rs. 160 per share, which assuming full conversion of Warrants into Equity Shares amounts to Rs. 168,000,000. The exercise of option to acquire Equity Shares against the said Warrants has to be within eighteen months from the date of allotment of the Warrants. The Company received total Rs. 42,000,000 towards Warrant Application Money in accordance with SEBI's Guidelines for Preferential Issue. As a result of the above, the Company's Paid-up Share Capital increased to 20,199,829 Equity Shares of Rs. 10 each aggregating to Rs. 201,998,290. Also, it's Securities Premium increased by Rs. 390,000,000. Assuming full conversion and allotment of Equity Shares for the 1,050,000 Warrants outstanding, post allotment Paid-up Share Capital is expected to be Rs. 212,498,290 comprising of 21,249,829 Equity Shares of Rs. 10 each. SUBSIDIARY AND JOINT VENTURE COMPANIES As on March 31, 2015, your Company had the following subsidiaries: 1. Zicom SaaS Private Limited (wholly owned subsidiary); 2. Unisafe Fire Protection Specialists Singapore Pte. Ltd., Singapore (wholly owned subsidiary); 3. Unisafe Fire Protection Specialists LLC, Dubai (step-down subsidiary); 4. Phoenix International WLL, Qatar (step-down subsidiary); 5. Unisafe Fire Protection Specialists India Private Limited (wholly owned subsidiary); and 6. Zicom Security Projects Pte. Ltd., Singapore (wholly owned subsidiary) A statement containing salient features of the financial statement of Subsidiaries for 2014-15 as per the Companies Act, 2013 is provided in Annexure A hereto in prescribed Form AOC-1. In respect of foreign subsidiary companies, figures in rupees are converted from applicable foreign currency at appropriate exchange rate as on year end date. The Policy on Material Subsidiary as approved may be accessed on the Company's website at the link: <http://beta.zicom.com/img/pdf/ZESSL->Policy_on_Material_Subsidiary.pdf The details of key subsidiaries and their workings are given below: Zicom SaaS Private Limited With a view to capitalize on changing security environment in the country resulting into evolving consumer needs it was decided to set-up the business of offering Security as a Service (SaaS) under a separate wholly owned subsidiary, namely, Zicom SaaS Private Limited. This subsidiary offers wide range of managed electronic security services (e-SaaS). The two focus areas for Zicom SaaS are Enterprise and Housing and Residential segment Under Enterprise Division, main contributors are Banks, Financial Services and Insurance (BFSI companies) which contribute major chunk of the revenue, and the balance comes from Retail and Education. With the use of latest technology platform, business enterprises are offered various customized services under e-SaaS model like Managed Alert Service, Time & Attendance Service, Remote Fire & Intruder Alarm Monitoring Service with use of cloud technology and internet, this business has found speedy acceptance. We have set-up focus on pure monitoring services revenue for the current year, which with support of legislative provisions and government and law enforcing authorities, making CCTV and video surveillance mandatory, has provided good potential for growth. Similar are the reason for our optimism about performance in MYCS covering housing and residential segment. Zicom SaaS has posted Total Income of Rs. 335,496,922 (previous year Rs. 173,833,923) and Net Profit of Rs. 13,293,907 (previous year Rs. 6,077,070) for the financial year ended March 31, 2015. Unisafe Fire Protection Specialists LLC, Dubai Unisafe Dubai, is the leading fire protection company in Dubai, UAE, having its presence in seven emirates, Qatar and Oman, has been consistently surpassing its earlier achievements in terms of topline and bottomline and customer satisfaction. It has got track record of exceptional performance year after year based on the patronization from the unstinted confidence and support of its customers. Unisafe Dubai caters to large spectrum of clientele from Government to corporate, refineries, shopping malls and multi storey buildings among others, offering comprehensive range of solutions for all fire protection needs, starting from the basic hydrant and sprinkler systems to advance analogue addressable fire alarm systems, specialized gaseous fire suppression systems, dry and wet chemical extinguishing systems and water mist fire extinguishing systems. In the area of project execution and servicing in fire detection and protection in infrastructure projects, Unisafe Dubai has been recognized as one of the top brands for almost two decades. With corporate restructuring, Unisafe Dubai has become a step-down subsidiary of your Company, in which Unisafe Singapore, our wholly owned subsidiary, hold 41% stake and balance 8% stake is directly held by us. With this, total stake of Zicom Group in Unisafe Dubai is 49% with entitlement in the economic interest being 95%. Unisafe Dubai has posted Total Income of Rs. 5,350,126,293 (as compared to Rs. 4,472,112,012 in the previous year) and a Net Profit of Rs. 445,286,900 (as compared to Rs. 398,665,132 in the previous year) for the financial year ended March 31, 2015. Phoenix International WLL, Qatar Phoenix Qatar, is another step-down subsidiary of your Company which has successfully established itself as one of the leading fire security solutions provider in Qatar. With main focus on Fire Prevention and Protection, it has exclusive tie-up to market safety and security equipments of leading international supplier. Its offerings includes varied turnkey solutions for fire protection suppression projects like design, engineering, integrating, testing and commissioning of Fire Safety, Security and Building Management Systems. Phoenix Qatar has to its credit large spectrum of clientele from Government to corporate, refineries, shopping malls, multi storey buildings, hotels and resorts, etc. some of which being very prestigious projects in Qatar. Further, it is one of the few to possess a license to operate in petrochemical sector. Post corporate restructuring of Zicom Group last year, Phoenix Qatar had become a step-down subsidiary of your Company with 49% stake; of which 44% held by Unisafe Singapore and balance 5% held by your Company. Zicom Group's entitlement in economic interest in Phoenix Qatar is 95%. During the year under review Phoenix Qatar, posted Total Income of Rs. 1,391,230,255 (as compared to Rs. 1,222,147,344 in the previous year) and a Net Profit of Rs. 141,239,321 (as compared to Rs. 137,295,919 in the previous year) for the financial year ended March 31, 2015. Unisafe Fire Protection Specialists India Private Limited Working results of Unisafe India for the financial year ended March 31, 2015 shows Total Income of Rs. 169,334,357 (previous year Rs. 155,631,085) and a Net Loss of Rs. 7,238,748 (previous year Net Loss Rs. 1,471,989). Originally set-up as a wholly owned subsidiary with a view to gain benefit out of the expertise gained from the success of fire safety and security business in Middle East; later on diverted its focus on catering to the needs of design and engineering requirements of fire protection business in Gulf region by acting as a Global Design Centre and also act as trader in fire safety and security equipments. Unisafe Fire Protection Specialists Singapore Pte. Ltd., Singapore and Zicom Security Projects Pte. Ltd., Singapore Unisafe Fire Protection Specialists Singapore Pte. Ltd. (Unisafe Singapore) and Zicom Security Projects Pte. Ltd. (Zicom Singapore) were set-up as two wholly-owned subsidiaries in Singapore, as a part of global corporate restructuring of Zicom Group with a view to internationally align and consolidate present and future investments of the Group. The Group overseas investment in fire business falls under the umbrella of Unisafe Singapore acting as a holding company for all such ventures, whereas Zicom Singapore, aimed as a holding company for Group investment in international electronic security business. However plans are on hold in view of not so good experience of CiaoZicom Security Systems SA, Brazil. CONSOLIDATED FINANCIAL STATEMENTS As per Section 134 of the Companies Act, 2013, your Company has provided the audited Consolidated Financial Statements for the year ended on March 31, 2015; together with Auditors' Report thereon forming part of this Annual Report, which includes financial information of all the subsidiaries. These documents will also be available for inspection during the business hours at the Registered Office of your Company and the respective subsidiary companies. Pursuant to the provisions of the Section 129(3) of the Companies Act, 2013 read with Rule 5 of the Companies (Accounts) Rules, 2014, a statement containing salient features of the financial statements of Company's Subsidiaries for 2014-15 (in Form AOC-1) is appended as Annexure A hereto. Your Company has placed the audited annual accounts and related information of subsidiary companies on its website and same will be made available to the Members upon request. DIRECTORS AND KEY MANAGERIAL PERSONNEL Directors: In accordance with the provisions of the Companies Act, 2013 and Articles of Association of the Company, Mr. V. Raman Kumar (DIN: 00245022) is the Director liable to retire by rotation at the ensuing Annual General Meeting and has offered himself for re-appointment. On March 26, 2015, Ms. Kunjan Trivedi (DIN: 07131011) was appointed as an Additional Director under Section 161 of the Companies Act, 2013, to hold office till the date of the ensuing Annual General Meeting. Further, the Board of Directors at its said meeting also appointed Ms. Trivedi as a Whole-time Director of the Company, designated as "Whole-time Director and Company Secretary", for a period of one year from March 26, 2015 till March 25, 2016. The terms of her appointment as Whole-time Director and Company Secretary including the terms of remuneration shall continue to be governed by the terms of her appointment as Company Secretary, subject however to applicable provisions of Companies Act, 2013 read with Schedule V thereto and subject to approval of Members. Accordingly, resolutions seeking approval of Members have been proposed at the ensuing Annual General Meeting for her appointment as a Director liable to retire by rotation, and also as a Whole-time Director designated as "Whole-time Director and Company Secretary" and the terms and conditions thereof including terms of remuneration. With appointment of Ms. Trivedi on the Board, the Company has complied with the requirements of Clause 49 (II) (A) of the Listing Agreement. The Company has received requisite notice, pursuant to Section 161 of Companies Act, 2013, in writing from Member proposing the candidature of Ms. Kunjan Trivedi for the office of Director liable to retire by rotation. The brief profiles of Mr. V. Raman Kumar and Ms. Kunjan Trivedi are given in Notice of the Annual General Meeting and discussed at length in the Corporate Governance Report. Your Directors recommend the above appointments for your approval. Besides above, Members are informed that Mr. Prabhakar Dalal (DIN: 00544948) was appointed as an Additional Director on Board on June 27, 2014 and he held office upto the conclusion of Annual General Meeting (AGM) held on September 5, 2014. He was appointed as an Independent Director at the AGM held on September 5, 2014. Further at the said AGM, the Members also approved the appointments of Mr. Manohar Bidaye (DIN: 00010699) as a Non-Executive Non-Independent Director liable to retire by rotation and Mr. Mukul Desai (DIN: 00015126); Mr. K. D. Hodavdekar (DIN: 00406556) and Mr. Vijay Kalantri (DIN: 00019510) as Independent Directors not liable to retire by rotation. All Independent Directors of the Company have given declarations confirming that they meet with the criteria of independence as prescribed under provisions of the Companies Act, 2013, Rules thereunder and Clause 49 of the Listing Agreement. Mr. Pramoud Rao, Managing Director of the Company, whose remuneration package includes commission, is appointed as the Managing Director of Zicom SaaS Private Limited, a wholly owned subsidiary of the Company, w.e.f. March 30, 2015 and is entitled for remuneration from the said subsidiary as per terms of his remuneration approved. However, for the year under review, Mr. Rao has not received any remuneration from the said subsidiary. Key Managerial Personnel: During the year under review, the Company has appointed following persons as Key Managerial Personnel pursuant to the provisions of Sections 2(51) and 203 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014: BOARD EVALUATION In accordance with the requirements of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board evaluation process was carried out. The Board / Nomination and Remuneration Committee of Directors have laid down the criteria for evaluation of the performance of the Board, its Committees and individual Directors. Accordingly, a structured questionnaire containing criteria's such as Board composition and structure, effectiveness of Board processes, information and functioning, etc. was circulated to Directors for the purpose of evaluation. The Board and Nomination and Remuneration Committee of Directors reviewed the performance of the individual Directors on the basis of set criteria's. The Independent Directors, at its separate meeting, carried out performance evaluation of Board as a whole, its Committees, Chairman of the Company and Non-Independent Directors. The same was discussed in the Board meeting that followed the meeting of Independent Directors, at which performance of the Board, its Committees and individual Directors was also discussed. NOMINATION AND REMUNERATION POLICY The Board of Directors has framed a Policy which lays down the framework in relation to remuneration to Directors, Key Managerial Personnel and Senior Management of the Company. This Policy also lays down criteria for selection and appointment of Board Members. The Policy is provided in Annexure B to this Report. AUDITORS AND THEIR REPORT The Statutory Auditors of the Company M/s. Shyam Malpani & Associates, Chartered Accountants, Mumbai, holds their office until the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment. As required under the provisions of Section 139 and Section 141 of the Companies Act, 2013, the Company has obtained a written consent and certificate from M/s. Shyam Malpani & Associates, Chartered Accountants, Mumbai, proposed to be re-appointed to the effect that their re-appointment, if made, would be in conformity with the criteria specified in the said sections. The Auditors' Report does not contain any qualification, reservation or adverse remark. Further, with regard to emphasis of matter as per clause IV in the Auditors' Report, your Directors wish to state that the said emphasis of matter read with Note No. 25.8 of Standalone Financial Statements is self-explanatory and does not require any further explanation. Your Directors would like to add that the said matter will not have any material adverse effect on the functioning of the Company. The Board recommends their re-appointment for your approval. SECRETARIAL AUDIT Pursuant to the provisions of Section 204 of the Companies Act, 2013 and Rules thereunder, the Company has appointed Ganesh Narayan & Co, Company Secretaries in Practice (CP No. 2238) to conduct Secretarial Audit of the Company for the financial year 2014-15. The Secretarial Audit Report for the financial year ended March 31, 2015 is annexed herewith as Annexure C to this Report. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark. DIRECTORS' RESPONSIBILITY STATEMENT Pursuant to Section 134 of the Companies Act, 2013, based on the representations received from the operating management, your Directors hereby state that a) in preparation of the annual accounts for the year ended March 31, 2015, the applicable accounting standards read with requirements set out under Schedule III to the Act, have been followed and there are no material departures from the same; b) the Directors have 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 as at March 31, 2015 and of the profit of the Company for the year ended on that date; c) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; d) the Directors have prepared the annual accounts on a going concern basis; e) the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and f) the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws that such systems are adequate and operating effectively. MEETINGS OF THE BOARD Seven meetings of the Board of Directors were held during the year under review. For further details, please refer Section II (F) - Other provisions related to Board and Committees under the Corporate Governance Report forming part of this Report. COMMITTEES OF THE BOARD The details of the Committees of the Board constituted under the Companies Act, 2013 and Listing Agreement are given under Section III in the Corporate Governance Report forming part of this Report. PARTICULARS OF LOANS GIVEN, INVESTMENTS MADE, GUARANTEES GIVEN AND SECURITIES PROVIDED Particulars of loans given, investments made, guarantees given and securities provided are given in the standalone financial statements. Further following are the purposes for which the loans or guarantees or securities are proposed to be utilized by the recipient: RELATED PARTY TRANSACTIONS All transactions entered with related parties for the year March 31, 2015 were on arm's length basis and in the ordinary course of business and that the provisions of Section 188 of the Companies Act, 2013 are not attracted. Hence the particulars to be disclosed in this regards in Form AOC-2 is Nil. Further, during the year under review, there were no material related party transactions. The Audit Committee and the Board of Directors have approved the Related Party Transaction Policy, which has been prepared in consonance with provisions of Clause 49 of the Listing Agreement and Companies Act, 2013. The same has been uploaded on the Company's website at the link: <http://beta.zicom.com/img/pdf/ZESSL->Related_Party_Transaction_Policy.pdf All Related Party Transactions are being placed before the Audit Committee for approval. Omnibus approvals are also obtained for transactions which are of repetitive nature. Such transactions are placed before the Audit Committee and Board (as required) for periodical review and approval. VIGIL MECHANISM / WHISTLE BLOWER POLICY Pursuant to Section 177(9) of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Company has formulated Whistle Blower Policy for vigil mechanism for Directors and employees to report to the management about the unethical behavior, fraud or violation of Company's Code of Conduct. The mechanism provides for adequate safeguards against victimization of employees and Directors who use such mechanism and makes provision for direct access to the Chairperson of the Audit Committee in exceptional cases. The said Policy as approved may be accessed on the Company's website at the link: <http://beta.zicom.com/img/pdf/ZESSL->Whistle_Blower_Policy.pdf MATERIAL CHANGES AND COMMITMENTS There have not been any material changes and commitments affecting the financial position of the Company between the end of the financial year of the Company as on March 31, 2015 and the date of this Report. RISK MANAGEMENT The Company already has in place the system to inform the Board about the risk assessment and minimization procedure. The risk management system identifies and assesses various risks associated with the Company and its business and finds out and suggests measures to mitigate them. This also includes mechanisms for their proper and timely monitoring and reporting. In this regard, the Company has framed policy to identify and evaluate business risks, and to mitigate them. The Policy defines the risk management approach at various levels including documentation and reporting. The Policy helps in identifying risks trend, exposure and potential impact analysis at a Company level as also separately for each business division of the Company. The risk management system is periodically evaluated by the Audit Committee / Board in the light of changing business scenario. Accordingly, new risks are identified and modified mechanism and procedure for risk assessment and minimization are adopted to ensure that executive management controls risk by means of properly defined framework. Progress in this regard is periodically reported to Audit Committee / Board for their review and corrective actions, required if any. This is a continuous process which enables the Company to keep its risk management system updated and robust in view of fast changing economic and business scenario affecting the Company. EXTRACT OF ANNUAL RETURN The details forming part of the Extract of Annual Return of the Company, in Form MGT-9, as required under Section 92 of the Companies Act, 2013, is appended herewith as Annexure D to this Report. CORPORATE GOVERNANCE In pursuance of Clause 49 of the Listing Agreement with the Stock Exchanges, a separate section on Corporate Governance, together with a certificate from your Company's Auditors confirming compliance of the conditions of Corporate Governance as stipulated under the said Clause is set out separately as Annexure H forming part of this Report. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO Pursuant to the provisions of Section 134(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 relevant information are given hereunder: A. Conservation of Energy The Company's operations include selling, distributing, marketing and installing of electronic security systems, gadgets and equipments and monitoring them. As such they do not involve much use of energy. However, your Company makes every possible effort to conserve energy at all levels of its operations. (i) The steps taken or impact on conservation of energy: At offices and workplaces, creating awareness among employees, contractual workers and customers about modes and means of energy saving through utilization of energy saving systems, devices and equipments; and inculcating a habit in them to strive for conservation and saving of energy. The above has helped the Company in keeping its energy cost under control. (ii) The steps taken by the Company for utilizing alternate sources of energy: As the operations of your Company does not involve much use of energy, the possibility of using alternate source of energy as a measure of conservation of energy in its operations are minimal. However, your Company has initiated certain steps in this direction like attempts are being made to make available affordable CCTV Surveillance Systems using solar power charged batteries, particularly in remote areas where there are frequent disruptions in power, and such other alternate energy using devices. (iii) The capital investment on energy conservation equipments: No material capital investment on energy conservation equipments has been made during the year by your Company. B. Technology Absorption As your Company has not imported any technology, the required information to be provided in this regard is Nil. Your Company is continuously working on improving its indigenous products and software. Your Company continuously strives to provide electronic security systems, gadgets and equipments based on latest technology. Further, the details of expenditure incurred on the research and development are Nil. C. Foreign Exchange Earnings and Outgo Your Company has earned Rs. 59,750,165 (previous year Rs. 52,705,456) in foreign currency and has spent Rs. 2,282,961 (previous year Rs. 1,712,877) in foreign exchange during the year under review. The details of the same are available at Note No. 25.17 being Notes forming part of the Financial Statements. LOANS AND ADVANCES The details of loans and advances, which are required to be disclosed in the Financial Statements of the Company pursuant to Clause 32 of the Listing Agreement with the Stock Exchanges, are furnished separately as Annexure E to this Report. PARTICULARS OF EMPLOYEES The disclosure required pursuant to Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company is appended as Annexure F to this Report. In terms of the provisions of Section 197(12) of the Companies Act, 2013 read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, during the year under review, there was no employee under the employment of your Company, who was in receipt of remuneration of Rs. 6,000,000 or more per annum, if employed for the entire year, or a remuneration of Rs. 500,000 or more per month, if employed during any part of the said year. Hence, the information required to be furnished in this regard is Nil. At present the Company does not have any Employee Stock Option Plan / Scheme nor does it have any live stock options pending to be exercised. HUMAN RESOURCES Human Resource (HR) in Zicom is truly a strategic Business Partner in the growth of your Company. The HR philosophy is developed around the fundamental of creating value through our most valued resource "Zi-Champ" to drive profitable growth and make Zicom a preferred work place. HR has developed & maintained friendly and professional work culture woven into the fabric of the Company's environment with strong business ethics. HR has time and again used innovation in hiring talent in Zicom. With usage of high end assessment tools and latest hiring channels like social media and online hiring sites, HR has hired the best talent from the industry at competent pay package and benefits. HR has created benchmark in the Fire and Security Industry by hiring the Engineers through Pool Campus Recruitment from Tier III cities and providing them opportunities in the international market with in-depth training. To fulfill the Company's Vision of value creation number of developmental initiatives have been undertaken which includes Executive Coaching for Leadership Development. Zi-Champs have been trained on behavioral and technical skills through ongoing structure programs which helps them to serve the customer well. During the year under review, HR had come up with Employee connect programs where Zi-Champs were cross functionally bonded with each other and took up fun activities as a team. The most appreciated initiative was Business Induction where new joinees undergo in-depth training on understanding the Business model, Product and Services. Our team of "Zi-Champs" was the winner of "Corporate Jung" for second consecutive year in the cricket tournament arranged by Fire and Safety Association of India. CORPORATE SOCIAL RESPONSIBILITY (CSR) The Board of Directors of your Company on May 27, 2014 constituted Corporate Social Responsibility Committee in compliance with the requirements of Section 135 of the Companies Act 2013 and the Companies (Corporate Social Responsibility Policy) Rules, 2014. The said Committee has formulated and recommended to the Board a Corporate Social Responsibility Policy (CSR Policy). Based on recommendation of CSR Committee the Board has approved undertaking of CSR activities by the Company as enshrined in the Company's CSR Policy. A brief outline of the said Policy including overview of the Project / Program being undertaken are set out in the Annual Report on Corporate Social Responsibility (CSR) Activities and appended herewith as Annexure G, forming part of this Report. Towards achieving its CSR objectives, the Company as a humble beginning, has identified a project of construction of a High School building in rural area of Sindhudurg District in Maharashtra with an outlay of Rs. 1.80 crores. This Project aims at assisting a High School which has been in existence since 1964 with a building structure in dilapidated state and in dire need to be reconstructed. The School is being run by a Trust on behalf of five surrounding villages and caters to more than 400 students in 9 divisions from Class V to Class X, majority of them belongs to below poverty line segment and families of farmers and ex-servicemen. With the help of the Company, the new building structure has been completed and the interior works like classrooms, laboratory, other infrastructure such as lighting, sanitation, furniture, sports equipments, etc. are being provided. The Project is expected to be completed by December 2016. During the year, the Company spent a total sum of Rs. 1,700,000 towards contributing to the Project. As the Project for the School is multi-year Project running over a period of more than three years, the amount has to be spent based on completion schedule of construction of School building and subsequent ordering of materials for interiors, furniture, electrical fittings, laboratory and other equipments, etc. Besides school education, it is also planned to provide the students with vocational courses, which will facilitate their employment after passing Class X. Despite all adversities, the School has been able to maintain its reputation by consistent good performance, which is evident by the fact that the last ten year's average success rate of its students in Class X has been 95%. INTERNAL FINANCIAL CONTROLS AND ITS ADEQUACY Your Company follows current best practices in internal audit and risk management system. Internal Audit System monitors the adequacy and effectiveness of the internal control under the supervision and guidance of the Audit Committee. It is supported by the enterprise resource planning platform for all business process. All transactions are properly authorized, recorded and presented to the Management. Your Company observes all the accounting standards prescribed for proper maintenance of books of accounts and reporting of financial statements. The Internal Control inter-alia facilitates: • Review of long-term business and annual plans • Adherence to applicable accounting standards and policies • Periodic review and rolling forecasts • Proper accounting and review mechanism • Compliance with applicable statutes, listing requirement and internal policies and procedures • Audit on concurrent basis, carried out by an internal auditor covering all statutes and compliance requirements • IT systems with adequate in-built controls and security GENERAL Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review: 1. Details relating to deposits covered under Chapter V of the Act. 2. Issue of equity shares with differential rights as to dividend, voting or otherwise. 3. Issue of shares (including sweat equity shares) to employees of the Company under any scheme. 4. No significant or material orders were passed by the Regulators or Courts or Tribunals that would impact the going concern status of the Company and its future operations. 5. The Company has in place policy as per the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. During the year, no case was reported to the Committee constituted under the said Act. ACKNOWLEDGMENTS Your Directors wish to place on record their sincere appreciation and thanks for the valuable co-operation and support received from the employees of your Company at all levels, Company's Bankers, lenders, suppliers, Government authorities, business partners and Members of the Company; and look forward for the same to even greater extent in the coming year. For and on behalf of the Board of Directors Manohar Bidaye Chairman Place: Mumbai Date: May 27, 2015 Registered Office: 501, Silver Metropolis, Western Express Highway, Goregaon (East), Mumbai 400063. |