DIRECTORS' REPORT To the Members, The Directors present their 22nd Annual Report on the business and operations of the Company and the audited statement of accounts for the year ended March 31" 2015. Corporate Highlights During the year under review, the total income is Rs. 1,209 lakh (previous year: Rs. 1,205 lakh). The profit before depreciation and taxation is Rs. 100 lakh (previous year: Rs. 81 lakh) and the net loss is Rs. 14 lakh (previous year: loss of Rs. 20 lakh). Operations and State of Affairs The operation and state of affairs have been adequately explained in Management Discussion and Analysis segment and form part of this report. Subsidiaries and their Performance As part of its future growth strategy, the Company had established two subsidiaries, viz. Valiant Communications (UK) Limited, United Kingdom and Valiant Infrastructure Limited, India, to explore the emerging opportunities in world telecom market and infrastructure development. The statement containing the salient feature of financial statements of the aforesaid subsidiaries is annexed herewith as Annexure-1. The Company has adopted a Policy for determining Material Subsidiaries in terms of Clause 49 of the Listing Agreement. The Policy, as approved by the Board, is uploaded on the Company's website at the web link: <http://valiantcom.com/> corporate/misc/notice/policy-material.pdf Consolidated Financial Statements As required under Section 129 of the Companies Act, 2013 ("the Act") and the Listing Agreement with Stock Exchange(s), the audited Consolidated Financial Statements of the Company and its subsidiaries, prepared in accordance with Accounting Standard 21 issued by the Institute of Chartered Accountants of India, form part of the Annual Report and are reflected in the Consolidated Financial Statements of the Company. The annual accounts of the subsidiaries and related detailed information will be kept at the Registered Office of the Company, as also at the registered offices of the respective subsidiary companies and will be available to investors seeking information at any time. In view of the loss suffered by the Company in the financial year under reporting, the Board of Directors finds it prudent not to propose any dividend for the year under reporting. Dematerialisation of Equity Shares As on March 31" 2015, 95.93% (previous year: 95.83%) of the outstanding equity shares of the Company have been dematerialized. Employee Stock Option Plan (ESOP) The Company did not issue any employee stock options / equity shares during the financial year under review, under the Employee Stock Option Scheme. Deposits During the year under review, your Company has not taken any public deposits. Particulars of Loans, Guarantee and Investments During the year under review, your Company has not given any loans, guarantees or made investments under Section 186oftheAct, 2013. Related Party Transactions All Related Party Transactions that were entered into during the financial year were on an arm's length basis, in the ordinary course of business and were in compliance with the applicable provisions of the Act and the Listing Agreement. There were no materially significant Related Party Transactions made by the Company during the year that would have required Shareholder approval under Clause 49 of the Listing Agreement. All Related Party Transactions are placed before the Audit Committee for approval. Prior omnibus approval of the Audit Committee is obtained for the transactions which are repetitive in nature. A statement of all Related Party Transactions is placed before the Audit Committee for its review on a quarterly basis, specifying the nature, value and terms and conditions of the transactions. The Company has adopted a Related Party Transactions Policy. The Policy, as approved by the Board, is uploaded on the Company's website at the web link: www.valiantcom . com/corporate/misc/notice/rtp_policy .pdf Details of the transactions with Related Parties are provided in the accompanying financial statements. Risk Management Policy The Company has adopted a Risk Management Policy in accordance with the provisions of the Act and Clause 49 of the Listing Agreement. It establishes various levels of accountability and overview within the Company, while vesting identified managers with responsibility for each significant risk. The Company has laid down procedures to inform the Audit Committee as well as the Board of Directors about risk assessment and management procedures and status. The risk management process consists of risk identification and assessment; risk measurement, mitigation and monitoring; and risk reporting. Board of Directors Appointment of Directors and Key Managerial Personnel At the last Annual General Meeting of the Company held on September 26th 2014, the Members had approved the appointment of Mr. Gaurav Kaura, Mr. Avinash Verma, Mr. Sumit Mehta and Ms. Neepa Chaterjee as Independent Directors for a term of five years. All the Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149(6) of the Act and Clause 49 of the Listing Agreement entered into with the Stock Exchanges. In the opinion of the Board, they fulfill the conditions of independence as specified in the Act and the Rules made there under and are independent of the management. In accordance with the provisions of Section 152 of the Act, Mr. Davinder Mohan Sood, Whole-time Director of the Company, retire by rotation, and being eligible, offers himself for re-appointment. Apart from above disclosure, there has not been any instance of appointment or resignation of Directors and Key Managerial Personnel during the year under reporting. Policy on appointment and remuneration of Directors The Company has adopted a Nomination and Remuneration Policy for the Directors, Key Managerial Personnel and other employees, pursuant to the provisions of the Act and Clause 49 of the Listing Agreement. In accordance with the Nomination and Remuneration Policy adopted by the Company, the Nomination and Remuneration Committee is responsible for developing competency requirements for the Board based on the industry and strategy of the Company. The Committee is responsible for reviewing and vetting the profile of potential candidates vis-a-vis the required competencies and meeting potential candidates, prior to making recommendations of their nomination to the Board in accordance with the Nomination and Remuneration Policy of the Company. The Nomination and Remuneration Committee has formulated the criteria for determining requisite qualifications, positive attributes such as high standards of ethical behavior, strong interpersonal and communication skills and soundness of judgment and independence of Directors in terms of provisions of Section 178 of the Act and Clause 49 of the Listing Agreement. The philosophy for remuneration of Directors, Key Managerial Personnel and all other employees of the Company is based on the commitment of fostering a culture of leadership with trust. The Remuneration Policy of the Company is aligned to this philosophy. The Nomination and Remuneration Committee has considered the following factors while formulating the Policy: (i) The level and composition of remuneration is reasonable and sufficient to attract, retain and motivate Directors of the quality required to run the Company successfully; (ii) Relationship of remuneration to performance is clear and meets appropriate performance benchmarks; and (iii)Remuneration to Directors, Key Managerial Personnel and Senior Management involves a balance between fixed and incentive pay reflecting short and long-term performance objectives appropriate to the working of the Company and its goals. It is affirmed that the remuneration paid to Directors, Key Managerial Personnel and all other employees is as per the Remuneration Policy of the Company. The Policy, as approved by the Board, is uploaded on the Company's website at the web link: www.valiantcom.com/ corporate/misc/notice/Nomination.pdf Annual Evaluation of Board Performance and Performance of its Committees and of Directors Pursuant to the provisions of the Act and Clause 49 of the Listing Agreement, the Board has carried out an annual evaluation of its own performance, performance of the Directors as well as the evaluation of the working of its Committees. The Nomination and Remuneration Committee has defined the evaluation criteria, procedure and time schedule for the Performance Evaluation process for the Board, its Committees and Directors. The Board's functioning was evaluated on various aspects, including inter-alia degree of fulfillment of key responsibilities, Board structure and composition, establishment and delineation of responsibilities to various Committees, effectiveness of Board processes, information and functioning. The criteria for performance evaluation of Board and Independent Directors, is uploaded on the Company's website at the web link: www.valiantcom.com/corporate/ misc/notice/criteria.pdf Corporate Social Responsibility The provisions of the Act relating to Corporate Social Responsibility are not applicable. Nevertheless, the Company shall continue its endeavor to fulfill its responsibility towards society. Board and Committee Meetings Details of the composition of the Board and its Committees and of the Meetings held and attendance of the Directors at such Meetings, are provided in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Act and the Listing Agreement. Directors' Responsibility Statement In terms of Section 134(3)(c) of the Act, your directors, to the best of their knowledge and belief and according to the information and explanations obtained by them in the normal course of their work, state that, in all material respects: a) In the preparation of the annual financial statements for the year ended March 31", 2015, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any: b) Appropriate accounting policies have been selected, applied consistently and judgment and estimates have been made 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) Proper and sufficient care has been taken 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 annual financial statements have been prepared on a going concern basis: e) Proper internal financial controls were in place and the financial controls were adequate and operating effectively; and f) Proper systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively. Corporate Governance Report and Management Discussion & Analysis Report As per Clause 49 of the Listing Agreements entered into with the Stock Exchanges, Corporate Governance Report with auditors' certificate thereon and Management Discussion and Analysis are attached and form part of this report. Vigil Mechanism / Whistle Blower Policy The company has a vigil mechanism named 'Whistle Blower Policy' to deal with instances of fraud and mismanagement, if any. The details of the said policy is posted on the website of the company at www.valiantcom.com/corporate/misc/ notice/vigil-mechanism.pdf Anti-Sexual Harassment Policy The Company has not received any complaint of sexual harassment during the financial year under reporting, as required under the Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. Code of Conduct All Board of Directors and senior management personnel have affirmed their respective annual compliance with the provisions of the Code of Conduct, laid down by the Board to govern the conduct of Directors and senior management of the Company by certain fundamental business principles, ethics, values, policies and procedures within the applicable laws, rules and regulations. Code for Prevention of Insider Trading Pursuant to the SEBI (Prohibition of Insider Trading) Regulations 2015, the company has adopted a Code for Prevention of Insider Trading. The objective of the code is to restrict an insider from dealing in the shares of the company either directly or indirectly when in possession of unpublished price sensitive information and also to restrict communication of such information. The code is applicable to the directors and designated employees/persons associated with the Company. The code enumerates the procedure to be followed for dealing in the shares of the company and periodic disclosures to be made. It also restricts the insiders from dealing in the company's shares during the period when the 'Trading Window' is announced closed. The company secretary has been designated as the Compliance Officer. Internal Controls Systems and Adequacy The Company's internal audit systems are geared towards ensuring adequate internal controls commensurate with the size and needs of the business, with the objective of efficient conduct of operations through adherence to the Company's policies, identifying areas of improvement, evaluating the reliability of Financial Statements, ensuring compliances with applicable laws and regulations and safeguarding of assets from unauthorized use. Details of the internal controls system are given in the Management Discussion and Analysis Report, which forms part of the Directors' Report. Auditors and Audit i) Statutory Auditors The auditors, B. Aggarwal & Company, Chartered Accountants, hold office until the conclusion of Annual General Meeting (AGM) to be held in year 2017, subject to the ratification of their appointment by members at every AGM. They have confirmed their eligibility under section 141 of the Act and their willingness to accept office, on proposed ratification of their appointment in the ensuing AGM. ii) Secretarial Audit In accordance with the provisions of Section 204 of the Act and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the company has appointed K. Chaand & Associates, Company Secretaries, Delhi, to undertake the Secretarial Audit of the company. The Secretarial Audit report is annexed herewith as Annexure-2. The Auditors' Report and the Secretarial Audit Report for the financial year ended 31" March, 2015 do not contain any qualification, reservation, adverse remark or disclaimer. Extract of Annual Return The details forming part of the extract of the Annual Return in Form No. MGT-9 is annexed herewith as Annexure-3. Significant and Material Orders passed by the Regulators or Courts No significant material orders have been passed by the Regulators or Courts or Tribunals which would impact the going concern status of the Company and its future operations. Personnel The information required under Section 197(12) of the Act read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is annexed as Annexure-4. Particulars of Conservation Of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo The information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134(3) (m) of the Act read with Rule 8 of the Companies (Accounts) Rules, 2014, is annexed as Annexure-5. Acknowledgments The Directors sincerely acknowledge the trust and confidence that has been placed by the employees, shareholders and investors in the Company. The Directors are thankful to all the employees and the officers of the Company, for their dedication, support and co-operation. On behalf of the Board of Directors For Valiant Communications Limited Inder Mohan Sood Chairman and Managing Director New Delhi, May 16, 2015 |