DIRECTORS' REPORT Dear Members, The Directors of your Company are pleased to present the 22nd Annual Report on the Business and operations of the Company along with the Audited Accounts for the financial year ended 31st March, 2015 2. INFORMATION ON STATE OF AFFAIRS OF THE COMpANY During the fiscal year, amidst the sturdy Competition in the telecom Industry, the Company witnessed a bumpy ride throughout the year but has been constantly endeavoring to sustain itself in the market by expanding its horizons in other markets. The detailed information on the state of affair of the Company is covered in the Management Discussion and Analysis Report forming part of this report. 3. TRANSFER TO RESERVES The Company is not mandatorily required to transfer its surplus to the General Reserve as no dividend has been proposed for the year 2014-15. Hence, current year profit has been proposed to be retained in the Profit and Loss Account. 4. DIVIDEND The Board is of the opinion that the Company should utilize its funds towards the operations to accelerate the growth rate. Accordingly the Board does not recommend any dividend payment for the year 2014-15. 5. DEPOSITS During the year, your Company has not accepted any deposits within the meaning of the provisions of section 73 of the Companies Act, 2013. 6. MATERIAL ORGANIZATIONAL CHANGES Though the Telecom sector is rapidly growing and achieving new heights in Indian economy but the business of Samsung has seen a major decline during the first half year of 2014.The Market of Samsung mobile was earlier dominated by organized trade which had an overall share of nearly 25% of total business volume. Later on, when the Online Channels showed their presence, they started offering predatory pricing of Samsung mobile. This resulted in stupendous growth in the business volume in Online Channel compared to the organized trade and the organized trade lost its market share by nearly 50%. Since Optiemus deals only with OT channel, the impact has been most pronounced on us as well. There was a continuous decline in the business volume of Samsung Mobiles from the last one year. This situation arose due to intense competition by the other brands who started offering the phone of almost similar configuration at a very competitive price which drove out the customer away from Samsung Mobiles. Therefore, the sales volume of Samsung Mobiles faced huge drop in comparison to First Half of previous year 2013 over the first half of current year 2014, which is approximately 25-30%. This fact is well known worldwide. In response to this downfall Optiemus has made serious efforts to shift its focus from topline business activities to bottom line activities thereby focusing on its own brand 'Molife' which is potentially capable to achieve growth in many folds and also to cover up the loss of revenue occurred in the immediate near future. Keeping its pace with the market trend, the Company is inclining towards online trade of its products for wider reach all across the country. Whilst this, Despite of loss of revenue and decline in sales for the current year 2014-15, Company has shown positive approach in maintaining its financial affairs and has maintained increased EBITA level of Rs. 11781 Lacs over the last year EBITA level, which clearly depicts the measures being put by your Company towards giving a new strategic Direction to the business, keeping aligned with the market momentum. 7. EXTRACT OF ANNUAL RETURN The extract of annual return as provided under sub-section (3) of section 92 of the Companies Act, 2013, in the prescribed Form MGT-9 is annexed to this Report as Annexure -1. 8. NUMBER OF MEETINGS OF THE BOARD There were 9 meetings of the Board held during the year. The Maximum gap between the two meetings did not exceed 120 days. Detailed information on Board Meetings is given in Corporate Governance Report. 9. DIRECTORS' RESPONSIBILITY STATEMENT In pursuance to clause (c) of sub section (3) of section 134 of the Companies Act, 2013, to the best of their knowledge and belief, the Directors of your Company hereby confirm that: (i) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures; (ii) the directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit and loss of the company for that period; (iii) the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities; (iv) the directors had prepared the annual accounts on a going concern basis; (v) The directors had laid down internal financial controls to be followed by the company and that such internal financial controls areadequate and were operating effectively. (vi) The directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively. 10. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186 OF THE COMPANIES ACT, 2013 Details of loans and investments falling under the provisions of section 186 of the Companies Act, 2013 are given under Note No. 10 & 11 of the notes to standalone financial statements. 11. RELATED PARTY TRANSACTIONS There were no materially significant transactions with Related Parties during the financial year 2014-15 which were in conflict with the interest of the Company. During the year under reference, the Company has not entered into any transaction with any related party, whether material or not in terms of the section 188 of Companies Act, 2013 and proviso to revised Clause 49 VII C of the Listing Agreement. Suitable disclosures as required under AS-18 have been made in Note 25 of the Notes to the financial statements. The policy on Related Party Transactions as approved by the Board is hosted on the Company's website under the web link <http://www.optiemus.com/investor-desk/policies> 12. RISK MANAGEMENT FRAMEWORK To assist the Board in fulfilling its corporate governance oversight responsibilities with regard to the identification, evaluation and mitigation of strategic, operational, and in order to timely assess & thereafter minimize the risk involved, The Risk Management Committee was implemented which oversees the Risk Management process including risk identification, impact assessment, effective implementation of the mitigation plans and Risk reporting. The details of the Risk Management framework are provided as a part of Management Discussion and Analysis report. 13. corporate social responsibility Pursuant to section 135 of the Companies Act, 2013 read with the Companies (Corporate Social Responsibility Policy) Rules, 2014, your Company approved a policy on CSR which is also hosted on Company's website under web link <http://www.optiemus.com/investor-desk/policies> As a part of CSR initiatives, your Company during the financial year 2014-15 has amongst other activities, undertaken projects in areas of promoting Education and social & Economic welfare of the society. These projects are in accordance with schedule VII of the Companies Act, 2013. The report on CSR is attached as Annexure-2 to this report. 14. DISCLOSURE ON ESTABLISHMENT OF VIGIL MECHANISM Section 177(9) of Companies Act, 2013 and clause 49 of the Listing Agreement, inter alia, provides for a mandatory requirement for all listed companies to establish a mechanism called, 'Whistle Blower Policy' for employees to report to the management, instances of unethical behavior, actual or suspected, fraud or violation of the company's, code of conduct. In compliance of the above requirements, your Company has established a Vigil (Whistle Blower) Mechanism and formulated a Policy which aims to provide a channel to the Directors and employees to report genuine concerns about unethical behavior, actual or suspected fraud or violation of the Codes of Conduct or policy.The Vigil (Whistle Blower) Mechanism is committed to adhere to the highest standards of ethical, moral and legal conduct of business operations and in order to maintain these standards, the Company encourages its employees who have genuine concerns about suspected misconduct to come forward and express these concerns without fear of punishment or unfair treatment. Further, Your Company hereby affirms that no Director/ employee has been denied access to the Chairman of the Audit Committee and that no complaints were received during the year. The Policy is hosted on the Company's website under web link <http://www.optiemus.com/investor-desk/> policies 15. DIRECTORS & KEY MANAGERIAL PERSONNEL NON-EXECUTIVE DIRECTORS Pursuant to section 149(4) of the Companies Act, 2013, every listed company is required to appoint at least one third of its directors as independent directors. The Board already has one half of its directors in the category of independent directors in terms of clause 49 of the Listing Agreement. The Board appointed the existing independent directors under clause 49 as 'Independent directors' pursuant to Companies Act, 2013 as well. The members at the annual general meeting held on 30th September, 2014, approved the appointment of the existing independent directors for a term of 5 years effective from 1st April 2014. There was no change in the composition of Independent Directors of the Company. Independent Directors of the Company as on this date are: Mr. Gautam Kanjilal Mr. Tejendra pal Singh Josen Mr. Charan Singh Gupta The Company has received Certificate of Independence from all Independent Directors, inter-alia, pursuant to Section 149 of the Companies Act, 2013, confirming and certifying that they have complied with all the requirements of being an Independent Director of the Company. Other than Independent Directors, Mrs. Renu Gupta, a Non-Executive woman Director was also appointed on the Board in 2014-15 whose appointment was ratified by the shareholders at the 21st Annual General Meeting held on September 30, 2014. In pursuance of section 164(2) read with the Companies (Appointment and Qualification of Directors) rules 2014, Mrs. Gupta has submitted her declaration to the effect that she is not disqualified from being re-appointed as a Director. There were no pecuniary transactions or relationship of the Non-Executive Directors vis-a-vis the company. Executive Directors As on the date of report, your Company has three (3) executive Directors, namely, Mr. RavinderZutshi, Mr. Ashok Gupta and Mr. Hardip Singh. The brief profile of each Director is provided in the Corporate Governance Report forming part of this annual report. During the period under preview, Mr. Ashok Gupta stepped down from the position of Managing Director w.e.f. August 17, 2015 while continuing on the board as Executive Director and Chairman of the Company. Mr. Ravinder Zutshi, who was appointed as Additional Director, assumed the office of Managing Director w.e.f. July 31, 2015. However, the appointment of Mr. Zutshi is subject to the ratification by the shareholders. The resolution for regularization & ratification is put for approval of the Shareholders in the notice of ensuing Annual General Meeting. In accordance with section 152(6) of the Companies Act, 2013, the period of office of at least two-third Directors of the Company shall be liable to retire by rotation. Hence, pursuant to change in the composition of the Board with the appointment of Mr. Zutshi, and thereby, to align the composition in compliance with the provisions of Section 152 of the Companies Act, 2013, it is proposed that the terms of appointment of Mr. Ashok Gupta be amended to provide that his office shall be liable to retire by rotation. In light of the provisions of the Companies Act, 2013, Mr. Hardip Singh retires from the Board by rotation this year and being eligible, offers himself for re-appointment. The information as required to be disclosed under clause 49 of the Listing Agreement in case of re-appointment of the director is provided in the Notice of the ensuing annual general meeting. Inter-se relationship of Directors Mrs. Renu Gupta, Non-Executive Director is a relative of Mr. Ashok Gupta, Executive Chairman of the Company. No other Directors are related to each other. Key Managerial personnel Pursuant to section 203 of the Companies Act, 2013, following officers are the Key Managerial Personnel of the Company: Mr. Ravinder Zutshi, Managing Director Mr. Hardip Singh, Whole Time Director Mr. Vikas Chandra, Company Secretary & Compliance Officer Mr. Parveen Sharma, Chief Financial Officer During the reporting year, Mr. Ravinder Zutshi was appointed as Managing Director and subsequently Key Managerial Personnel in place of Mr. Ashok Gupta. The Board affirms the Compliances with the code of Conduct set out for Board, Senior Management and other employees. A declaration to affirm the compliance of code of Conduct is attached with the Annual Report as a part of Corporate Governance Report. Selection and Appointment of Directors The charter of Nomination and Remuneration Committee of the Board empowers it to review the structure, size, composition, and diversity of the Board, evaluation of existing skills, defining gaps and making necessary recommendations to the Board. Board Evaluation Pursuant to the provisions of the Companies Act, 2013 and revised Clause 49 of the Listing Agreement, the Board has carried out an annual evaluation of its performance, of the Directors individually as well as the evaluation of the working of its Committees. Manner in which such formal annual evaluation was made by the Board is given below: • Performance evaluation criteria for Board, Committees of the Board and Directors were approved by the Board at its meeting held on 14th August, 2014. The criteria are placed on the Company's website www.optiemus.com under the web link as a part of Company's Nomination & Remuneration Committee Policy. • Based on the criteria a structured questionnaire was prepared after taking into consideration inter-alia the inputs received from the Directors (except for the director being evaluated) for the year under review. The structured questionnaire covered various aspects of the Board's functioning such as strategic alignment and direction, engagement alignment, composition and structure, dynamics and culture, ethical leadership and corporate citizenship, support to the Board, Committees evaluation and self-evaluation etc. • The Ratings for Non-Independent Directors were given by the Independent Directors. The ratings for Independent Directors were given by all the Directors excluding the Independent Director being evaluated. The Ratings for performance of Committee was given by the entire Board. • A consolidated summary of the ratings given by each of the directors was then prepared separately for Independent & Non-Independent Directors, based on which a report of performance evaluation was prepared in respect of the performance of the Board, its Committees and Directors during the year under review. • The report of performance evaluation so arrived at was then noted and discussed by the Nomination and Remuneration Committee and Board at their respective meetings. • In pursuance of the Clause 49 of the Listing Agreement, as per the report of performance evaluation, the Board has to determine, inter alia, whether to continue the term of appointment of the independent director. During the year under review, there was no occasion to decide on the continuance of the term of appointment of any of the independent directors and hence the question of taking a decision on their re-appointment did not arise. The performance evaluation of individual Directors including Chairman of the Board was done in accordance with the provisions of the Companies Act, 2013 and revised Clause 49 of the Listing Agreement and also based on the structured questionnaire mentioned above. Familiarizing programme for Independent Directors The Company had provided Suitable Training and guidance to Independent Directors to familiarize them with the company , their roles,rights, responsibilities in the company, and also to understand the nature of Industry in which company operates and business activities etc. of the company. Wherein, the Company held various familiarization programmes for the Independent Directors throughout the year on an ongoing and continuous basis. Some of the familiarization programmes carried out during the year was as under:- • Various presentations were made by business heads of the Company and its various subsidiaries from time to time on different functions and areas. • Deliberations were held and presentations were made from time to time on major developments in the areas of the new Companies Act, 2013, the new clause 49 of the Listing Agreement and other applicable laws. PARTICULARS OF EMPLOYEES AND OTHER DISCLOSURES Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are provided in the Annexure-3 forming part of the Annual Report. There are no employees drawing remuneration in excess of the limits set out in the said Rules during the financial year apart from Mr. Ashok Gupta, Executive Chairman. The details of his remuneration is given in MGT-9 as annexed to this report under Annexure-1. Statutory Auditors Pursuant to the provisions of section 139 of the Companies Act, 2013 and the Rules made there under, the current Statutory Auditors of the Company, M/s RMA & Associates, Chartered Accountants (registration number: 000978N) were appointed by the shareholders at the 21st annual general meeting to hold office until the conclusion of the 25th annual general meeting, subject to ratification by shareholders at each annual general meeting. Thus, the members are requested to ratify the appointment of M/s RMA & Associates, Chartered Accountants (registration number: 000978N) as statutory auditors of the Company and to fix their remuneration for the year 2015-16. In compliance with section 139 of the Companies Act, 2013, the Auditors have given the Certificate of eligibility for being re-appointed. Also, as required under revised Clause 41 (I) (h) of the Listing Agreement, the Statutory Auditors have confirmed that they have subjected themselves to the peer review process of the Institute of Chartered Accountants of India (ICAI) and that they hold a valid certificate issued by the Peer Review Board of ICAI. The statutory audit report does not contain any qualification, reservation or adverse remark or disclaimer made by statutory auditors. The Auditors did not report any fraud during the year. Secretarial Auditor Pursuant to the provisions of section 204 of the Companies Act, 2013 and Rules made hereunder, the Company appointed M/s S K Batra & Associates, Company Secretaries in Practice (Membership number: 7714, C.P. No. 8072), to undertake the secretarial audit of the Company. Secretarial Audit Report for the financial year 2014-15 as given by M/s S.K.Batra & Associates in the prescribed form MR-3 is annexed to this Report as Annexure -4 The Secretarial Audit Report for the year under review does not contain any qualification, reservation or adverse remark or disclaimer made by the secretarial auditor 18. DISCLOSURE UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION & REDRESSAL) ACT, 2013 The Company has in place an Anti-Sexual Harassment Policy in line with the requirements, inter-alia, of The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. An Internal Committee has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary and trainees) are covered under this policy. The following is a summary of sexual harassment complaints received and disposed off during the Financial Year 2014-15: • No. of complaints received : Nil • No. of complaints disposed off : Nil 19. PARTICULARS OF CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO Conservation of Energy Considering the nature of business of the Company, energy does not form a significant portion of the cost for the Company yet wherever possible and feasible, continuous efforts are being put for conservation of energy and minimizing power cost. However, Capital expenditure on energy conservation equipment is not required, keeping in view the normal energy consumption in the business activity of the Company. Various Steps are being taken for conservation of energy and using alternate sources of energy, to name a few: • Advocating switching off of lights and ACs when not required, turning off of PCs when not in use, setting higher temperatures on air conditioners etc to reduce consumption. • Installed various energy saving electrical devices for saving energy. • Puts control on usage of other electrical equipments. Technology absorption Taking into consideration the nature of Business of Company, No technology is being used. Foreign exchange earnings and Outgo The Company has continued to maintain focus on and avail of export opportunities based on economic considerations. During the year the Company has exports (FOB value) worth Rs. 76,104 lacs 20. SUBSIDIARIES As on 31st March 2015, the Company has five unlisted subsidiaries, namely, i. Oneworld Teleservices Private Limited ii. Kishore Exports India Private Limited iii. Optiemus Infracom (Singapore) Pte. Limited iv. Optiemus Metals & Mining Pte. Limited v. Optiemus Infracom International FZE During the year under purview, The Company acquired additional 40% stake in Kishore Exports India Private Limited, apart from the 50% stake already held, thereby, making it Subsidiary of your Company. In accordance with the provisions of Section 129(3) of the Companies Act, 2013 read with Rule 8 of Companies (Accounts) Rules, 2014, the Company has prepared its consolidated financial statement including all of its subsidiaries, which is forming part of this report. The financial position and performance of its subsidiaries are given in the statement containing salient features of the financial statements of the said subsidiaries in Annexure -5 to this report. In accordance with Section 136 of the Companies Act, 2013, the Annual Report of the company, containing therein its standalone and the consolidated financial statements has been hosted on the website www.optiemus. com. Further the annual accounts of each of the said subsidiary companies of the Company have also been hosted on the website www.optiemus.com Any shareholder who may be interested in obtaining a physical copy of the aforesaid documents may write to the Company Secretary at the Company's Registered Office. Further, please note that the said documents will be available for examination by the shareholders of the Company at its Registered Office during business hours. The Company does not have any material unlisted Company as defined under Clause 49 of the Listing Agreement. The Policy for determining 'material' subsidiaries is hosted on the website of the Company under the web link <http://www.optiemus.com/investor-desk/policies> 21. SIGNIFICANT AND MATERIAL ORDERS There are no significant and material order passed by the Regulators or Courts or Tribunals impacting the going concern status and Company's operations in future. 22. SHARE CAPITAL The paid-up equity share capital as on 31st March 2015 was Rs. 85.81Crore. There was no public issue, rights issue, bonus issue, preferential issue or redemption of shares etc. during the year. Also, The Company has not issued shares with differential voting rights, sweat equity shares nor has it granted any stock options. 23. ADEQUACY OF INTERNAL FINANCIAL CONTROLS The Board reviews the adequacy and effectiveness of the internal finance controls from time to time. The Board, in consultation with the internal Auditors and risk management committee monitors and controls the major financial risk exposures 24. CORPORATE GOVERNANCE The Company is committed to maintain the highest standards of Corporate Governance. The Directors adhere to the requirements set out by the Securities and Exchange Board of India's Corporate Governance Practices and have implemented all the stipulations prescribed. Pursuant to clause 49 of the listing agreement with stock exchanges, a separate section titled 'Corporate Governance' has been included in this annual report, along with the reports on Management Discussion and Analysis. 25. ACKNOWLEDGEMENT Your Directors wish to express their sincere appreciation for the co-operation and assistance received from the Bankers, Regulatory Authorities, Stakeholders including Customers and other business associates who have extended their valuable support and encouragement during the year under review. The directors also acknowledge the hard work, dedication and commitment of the employees of the Company. The enthusiasm and unstinting efforts of the employees have enabled the Company to continue being a leading player in the Retail Sector. On behalf of the Board of Directors For Optiemus Infracom Limited Ashok Gupta Executive Chairman Place : New Delhi Date : September 2, 2015 |