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Ducon Infratechnologies Ltd.

BSE: 534674 Sector: IT
NSE: DUCON ISIN Code: INE741L01018
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VOLUME 67932
52-Week high 82.45
52-Week low 27.25
P/E 560.63
Mkt Cap.(Rs cr) 352
Buy Price 44.85
Buy Qty 1000.00
Sell Price 0.00
Sell Qty 0.00
OPEN 43.80
CLOSE 43.80
VOLUME 67932
52-Week high 82.45
52-Week low 27.25
P/E 560.63
Mkt Cap.(Rs cr) 352
Buy Price 44.85
Buy Qty 1000.00
Sell Price 0.00
Sell Qty 0.00

Ducon Infratechnologies Ltd. (DUCON) - Director Report

Company director report

Your Directors are pleased to present the Seventh Annual Report of your Company for theperiod ended March 31 2016.

1. Financial Highlights

(Rs. In lacs)

Particulars Year ended 31/03/2016 Year ended 31/03/2015
1. Total Income 3262.82 3606.18
2. Total Expenditure (Excl. Depreciation & Interest) 3050.87 3424.86
3. Interest 81.63 83.86
4. Depreciation 85.08 78.72
5. Profit before Tax 45.24 18.74
6. Provision for Taxation 6.64 9.09
7. Profit after tax 38.60 9.65

2. Management Analysis and Discussions

Discussion on financial performance with respect to operational performance

During the year your Company earned total revenues of Rs. 3262.82 lacs compared withRs. 3606.18 lacs during the previous year reflecting a degrowth of 9.53% over theprevious year. The profit before tax stood at Rs. 45.24 lacs as compared to Rs. 18.74 lacsin the previous year. The Company has made a provision of tax totaling to Rs. 6.04 lacsand the profit after tax stood at Rs. 38.60 lacs for the current year an increase of 300%over the previous year. The Operating Profit (earnings before depreciation and interestand tax) grew from Rs. 212 lacs to Rs. 130 lacs a growth of 9.52% over the previous year.

The Company has built a comprehensive brand portfolio across various verticalsincluding software server and security and this has helped the Company to increase itsearnings. The Company has a mix of products services and technology integration in orderto build opportunities for incremental revenue growth along with Non IT infrastructure forits clients.

Review of Operations including IT Infra and Non IT Infra Industry Structure andDevelopments

The year under review was one of the most challenging ones in recent years. The yearwitnessed moderate growth in Global demand of IT products reflecting broad pricingpressures government spending constraints from continued fiscal challenges datacenterconsolidation enabled by virtualization accelerating cloud adoption and a shift towardlower-cost hardware products. In India although the sentiment continues to be positivedemand on the ground has not picked across product categories. From an IT productsstandpoint the market remains sluggish. Projects essentially driven out of investment ininfrastructure by government and corporates have slowed down and only old projects arebeing executed. Your Company has demonstrated its high adversity quotient and its capacityfor implementing differentiated strategic solutions.

Information Technology lies at the core of your Company's business. The sector promptedand shaped industrial growth and transformed the lifestyle of the citizens. Now a newtrend is emerging where the enterprise focus is gradually shifting from capitalexpenditure to operating expenditure and billing style is changing from transaction toannuity pay-per-use and pay-per-click. The trend is not disruptive today and is at anascent stage. But it is expected to evolve in the next decade. The strong fundamentals ofbusiness and the current model will continue to be in vogue but at a lower pace of growthas compared to the new tech trend. Looking ahead there are a few significant trendsshaping the distribution business in general and IT distribution in particular. YourCompany is engaged in monitoring and suitably adapting its strategy to participate and berelevant in the changed scenario.

Adoption of Cloud based infrastructure and solutions is gaining traction in India andthere is a gradual acceptance on the part of organizations in the SMB sector to embracethis practice in order to shift their IT Infrastructure from a Capex to an Opex model.Cloud technology allows users access to applications over the Internet displacing theage-old practice of running programs by downloading software onto a physical server orcomputer. We aspire to position ourselves as a single Company that acts as a bridgebetween the Cloud Technology providers and the End Customers by offering a completebouquet of Cloud solutions and services. Your Company is looking to sell Cloud Solution asa product. As the demand pattern in India matures your Company will evaluate appropriateCloud business strategies and invest in this space accordingly.

Given that India is one of the fastest growing markets in the world all major brandsin the enterprise and retail verticals even those with an existing presence in thecountry are keenly looking at ways to increase their market share. Our diversity in termsof a large bouquet of products lines and vendors and geographical reach has enabled yourCompany to take maximum advantage of the available growth opportunities. Your Company hasembarked on the set up of a robust services platform that benefits both the brand and theend customer. This will involve offering complete parts planning parts warehousingforward and reverse logistics imports and re-exports and assets recovery and e-wastemanagement to provide a single-window fret-free parts management service to brands.

With growing dependence on IT thanks to the Internet and mobility uptime of devicesbe it PCs Tablets or Smartphones and enterprise assets like networking devices serversand storage which support them has become critical for running business applications andmaintaining operational efficiencies. User organizations have therefore time and againnecessarily refurbished their IT hardware from a plethora of vendors ending up withproducts from multiple brands. To complicate matters further rapid strides in technologyhave successfully shortened product life cycles and put tremendous strain on partsavailability for maintenance of assets beyond service life. Managing the uptime ofheterogeneous IT hardware is therefore a huge challenge for user Companies. Your Companyis looking to tap this into a big opportunity and offer single window SLA bound AMCservice for heterogeneous hardware which spans PCs peripherals and enterprise assets.Your Company's investment and engagement over the years has enabled it to develop a strongfoothold catering to Enterprise & Infrastructure projects.

While strengthening and consolidating its core business it is evaluating ways andmeans of transforming through better efficiencies and increased process driven automation.Your Company is evolving into a Solution oriented partner for its vendors and customers.Pre-Sales and Technical Sales talents are deployed to help partners provide theircustomers with customized solutions to achieve their desired business outcomes even on theNON IT infra requirements of the clients.

Strengths

The inherent strength of your Company derives from its absolute belief in soundsustainable business practices and an ability to continuously address the diverse needs ofits customers. The strengths have enabled your Company to successfully articulate itsvarious differentiated value propositions in the markets in which it operates. Thestrategic objective of the Company is to build a sustainable organization that remainsrelevant to the agenda of the clients while generating profitable growth for theinvestors. In order to do this the Company will apply the priorities of ‘renew’and ‘new’ to our own business and cascade it to everything we do.

We believe our strong brand robust quality process and our access to skilled talentbase at lower costs of providing services places to us in a unique position to takeadvantage of the opportunities available. The Company is not dependent on any singletechnology or platform. The Company has developed competencies in various technologiesplatforms and operating environment and offers a wide range of technology options for itsclients to choose from based on their needs.

The Company provides the entire spectrum of Information Technology Infra and Non ITInfra. The strength of your Company is the brand and products diversification along withwide product range dedicated group of talented professional who drive its business andrelationships with its business partners and manage its support functions. The strategy toengage with clients on their large transformative programs both in traditional IT areasas well as for their new digital business initiatives and non IT Infra. The Companyexpands existing client relationships by providing them with a broad set of end-to-endservice offerings and increase the size nature and number of projects they do with them.

Quality

Your Company continues to strive towards operational and delivery excellences with arenewed focus on the path of business excellence. Customer satisfaction and excellence inquality are key elements for succeeding in the competitive global market. A strongemphasis is based on quality in every aspect of the Company's activities. In line withthis philosophy we have designed our quality management program and have defined severalkey parameters for measurement of quality levels to ensure improvement in the quality ofthe deliverables. Several initiatives have been taken to implement result oriented qualitymanagement models.

In order to be able to respond quickly to the customers your Company continues withvarious internal initiatives to compete effectively improve organizational flexibilityand efficiency streamline internal processes and institutionalize a culture of continuousimprovement. The system comprises well defined organization structure pre-identifiedauthority levels and documented policy guidelines and manuals for delegation of authority.

Review of key business processes like business planning reporting and communicationhas been done to make them more effective in meeting business objectives. Moving forwardyour Company shall continue to further strengthen its processes by adopting best-in-classstandards.

Customer Satisfaction and excellence in quality are key elements for succeeding in thiscompetitive market. In order to be able to respond quickly to the customers your Companycontinues with various internal initiatives to implement result oriented qualitymanagement models compete effectively improve organizational flexibility and efficiencystreamline internal processes across all its entities globally and institutionalize aculture of continuous improvement.

Opportunities and threats

Opportunities

We believe there is a growing demand for additional services and solutions fromCompanies that already have an established global presence and existing infrastructurewhich is why we are strategically focused on increasing our capabilities in these areas.Our diversification strategy continues to provide us with new growth opportunities.Looking towards the future your Company will remain focused on agility innovation andoperational excellence. Focusing on strategic verticals and geographies will also lead toan increase in the list of potential customer base.

Threats

Competition is the main threat to most tech outfits considering the relentless productcycles the typically rapid move toward commoditization in the sector and also changes intechnology and markets changes in government policy or regulations / legislation etc.also brings challenges and treats to the smooth functioning of the Company. The focus ofthe Traditional IT service providers is slowly moving towards industry focused businesssolutions and digital-business enablement. As Companies recognize the critical role oftechnology as an enabler to their business the number of in-house technology centres oflarge enterprises as well as the number of new entrants in the market increases.

Since the IT Infra sector and Non IT Infra is exposed to high attrition rate due tomore opportunities available in market for the employee retaining existing talent pooland attracting new talented manpower is a major risk to the Company. The Company hasinitiated various measures to enhance the retention of employees during the year whichincludes employee engagement surveys transparent Performance Management System tomaintain employee-friendly culture in the organization.

Risks and Concerns

The productive life of IT Infra and Non IT Infra resources and competencies isshrinking thereby increasing the level of investment needed to meet the marketrequirements. The convergence of IT and Telecommunication industries while provide hugegrowth opportunities to your Company also exposes it to increased competition. In the ITindustry the ability to execute projects build and maintain client partnerships and toachieve forecasted operating and financial results are significantly influenced by theorganization’s success in hiring training and retaining highly skilled ITprofessionals. The market continues to be highly competitive for attracting and retainingIT professionals & this is compounded by the ever changing constraints around talentmobility primarily on account of regulatory requirements and also the evolving valuepropositions for a range of clients across geographies.

Both the number of incidents and the severity of cyber security threats are increasingglobally and are becoming more widespread. This can put the Company and the client data ofrisk in the event that data confidentiality integrity and availability is compromisedpresenting a risk to the success and sustenance of the Company.

The Company’s objectives and expectations may be forward looking within themeaning of applicable laws and regulations. The competition from large international andIndian IT Companies is increasing in the domestic market space. Actual results may differmaterially from those expressed. Important factors that could influence the Company’soperations include change in government regulations tax laws increased competitioneconomic and political developments.

Internal control systems and their adequacy

The Company’s internal control system is commensurate with its size scale andcomplexities of its operations. The Company has a well-defined delegation of power withauthority limits for approving revenue as well as expenditure and processing payments.Your Company has an effective internal control and risk mitigation system which areconstantly assessed and strengthened with new/revised standards operating procedures. TheCompany has made the employees responsible for establishing expectations and seekingfeedback at every role that is assigned. The employees have been enabled to influencetheir network of peers to co-own goals. This has helped enable cross functionalcollaboration and interlock. Employees can give and receive help on their goals by makingthem public and also express their likelihood of reaching their goals. The Company has putin place adequate systems of internal control commensurate with its size and the nature ofits business. These systems provide a reasonable assurance in respect of financial andoperational information compliance with both applicable statutes & corporatepolicies and safeguarding of the assets of the Company.

The Company has the robust Management Information System which is an integral part ofthe control mechanism. Ducon Infratechonologies Limited has an audit committee thedetails of which have been provided in the corporate governance report.The Audit Committeeof the Board of Directors actively reviews the adequacy and effectiveness of the internalcontrol systems and suggest improvements to strengthen the same.

3. Dividend

With a view to plough back the profits of the Company and keeping in mind the expansionof business activities the Board of Directors consider it prudent and recommend notdeclaring any dividend for the year ended March 31 2016.

4. Transfer of Unclaimed Dividend to Investor Education And Protection Fund

The Provisions of Sec.125 (2) of the Companies Act 2013 do not apply as there was nodividend declared and paid last year.

5. Transfer to reserves

During the year the Company has not transferred any amount to reserves.

6. Others

There were no material changes and commitments affecting the financial position of theCompany which has occurred between the end of the financial year of the Company and thedate of the Directors’ report.

There are no significant and material orders passed by the Regulators or courts ortribunals impacting the going concern status and Company’s operations in future.

The Company now recognizes its revenue between IT Infra and Non IT Infra as these arethe nature of businesses of the Company.

The Company continues to be an IT infra and Non IT Infra Company. The members of theCompany duly approved the change in main object of the Company and change in registeredoffice vide voting through postal ballot conducted by the Company. The resolutionspertaining to Alteration of Objects of the Company and consequently amendment in ClauseIII of Memorandum of Association of the Company Change of Name of the Company andconsequently amendment in Clause I Memorandum of Association of the Company Change inRegistered Office address of the Company under Section 12 and other applicable Sections ofthe Companies Act 2013 were passed by the requisite majority through postal ballotE-Voting and the Scrutinizer report on results was made public on 19.03.2016 with BSE NSEand Newspapers. Details of the same are available on the website of the Company.

During the year under review there were no cases filed under the Sexual Harassment ofWomen at Workplace (Prevention Prohibition and Redressal) Act 2013.

7. Details of Holding/Subsidiary/Joint Ventures/Associate Companies

The Company does not have any Holding/Subsidiary/Joint Ventures/Associate Companies.

8. Explanation or comments on Qualifications reservations or adverse remarksmade by Auditors and the Practicing Company Secretary in their Reports

The Auditors’ Report to the members on the Accounts of the Company for thefinancial year ended 31st March 2016 does not contain any qualifications reservations oradverse remarks.HoweverThe Secretarial Auditor has observed the partial non-compliancepertaining to composition of board of directors for the year under review.

Management reply: The Company is in not in compliance with the requirements stipulatedunder Clause 49 (II) of the Listing Agreements and Schedule V and clause (C)sub-regulation (2) of regulation 46 of SEBI Listing Regulations of for 3 days due toresignation of the Independent Director Mr. Dilip Palicha on 29.03.2016.However as ondate the board meets the criteria of the Listing Regulations since Independent Directorhas been appointed on the board.

9. Directors and Key Managerial Personnel

Pursuant to Section 149 of the Companies Act 2013 the Board recommended theappointment of Mrs. Pinakee Parikh for a period of 5 Years as an Independent Director ofthe Company not liable to retire by rotation from the date of its 7th AnnualGeneral Meeting subject to approval of the Members of the Company.

Mrs. Pinakee Parikh (holding Din 07297861) was appointed as an Additional Directordesignated as an Independent Director w.e.f. September 24 2015. The Director has giventhe declaration to the Board that she met the criteria of independence as provided underSection 149(6) of the said Act and also confirmed that she will abide by the provisions asmentioned in Schedule IV of the Companies Act 2013.

The Board recommends the resolutions for your approval for the above appointments.

During the year Mr. Jitesh Jain resigned from the post of Non-Executive IndependentDirector of the Company w.e.f September 24 2015.

During the year Ms. Pooja M. Dere was appointed as Key managerial personnel w.e.f. 1stOctober 2014 as per Section 203 of Companies Act 2013 and was resigned w.e.f. 24thAugust 2015. Mr. Arun Govil Mr. Shirish Anjaria & Mr Darshit Parikh were appointedas Key managerial personnel w.e.f. 6th November 2015.

Currently Mr. Arun Govil Mr. Harish Shetty and Mr. Chandrasekhar Ganesan are KeyManagerial Personnel w.e.f. August 13 2016.

10. Auditors

Pursuant to the provisions of Section 139 of the Act and the rules framed thereunderM/s. P. Parikh & Associates as proposed to be appointed as Statutory Auditors of theCompany from the conclusion of the 7th Annual General Meeting (AGM) of theCompany held on 30th September 2016 till the conclusion of the 12thAGM to be held in the year 2021 subject to ratification of their appointment at every AGMin place of M/s. Palan & Co. Chartered Accountants. The Company has received theeligibility certificate from the Statutory Auditor.

Auditors Report

The Auditors’ Report does not contain any qualification. Notes to Accounts andAuditors remarks in their report are self-explanatory and do not call for any furthercomments.

11. Scheme of Arrangement

During the year the Company announced the scheme of arrangement for the demerger undersections 391 to 394 of the Companies Act 1956 between Ducon Technologies (India) PrivateLimited (Demerged Company) & Ducon Infratechnologies Limited (Formerly Known AsDynacons Technologies Limited) (Resulting Company) & their respective shareholders andcreditors.

The Company has approached the exchanges for their consent to file the application withthe Hon’able High Court Mumbai. The approval from the exchanges are awaited and themanagement desires to swiftly show the results of the scheme of arrangement to itsstakeholders once the same is in effect from 01.04.2015.

12. Change of Name of the Company

During the year the Company has taken approval via postal ballot e-voting from membersto change the name of the Company from Dynacons Technologies Limited to DuconInfratechnologies Limited. Details of the same are available on the website of theCompany.

13. Corporate Governance

Your Company has always practiced sound corporate governance and takes necessaryactions at appropriate times for meeting stakeholders’ expectations while continuingto comply with the mandatory provisions of corporate governance.

As required under Clause 49 of the Listing Agreement with the Stock Exchanges thereport on Management Discussion and Analysis Corporate Governance as well as theStatutory Auditors’ Certificate regarding compliance of conditions of CorporateGovernance forms part of the Annual Report.

14. Code of Conduct For Directors And Senior Management

The Directors and members of Senior Management have affirmed compliance with the Codeof Conduct for Directors and Senior Management of the Company. The copies of Code ofConduct as applicable to the Executive Directors (including Senior Management of theCompany) and Non Executive Directors are uploaded on the website of the Company –www.dtlindia.com.

15. Familiarization Program for Independent Directors

The Company has practice of conducting familiarization program of the independentdirectors as detailed in clause 8 of the Corporate Governance Report which forms part ofthe Annual Report.

16. Particulars of the Employees

The information as required under Section 197 of the Act and rules made there-under isnot applicable as none of the employees are in receipt of remuneration which exceeds thelimits specified under the said rules.

17. Documents Placed on the Website

The following documents have been placed on the website in compliance with the Act:

• Financial statements of the Company along with relevant documents.

• Details of Vigil mechanism for directors and employees to report genuineconcerns as per proviso to Section 177(10).

• The terms and conditions of appointment of independent directors as per ScheduleIV to the Act.

• Latest Announcements

• Annual Reports

• Shareholding Pattern

• Code of Conduct

• Corporate Governance

• Nomination and Remuneration Policy

18. Human Resource Management (Material developments in Humanresources/Industrial Relations front including number of people employed)

Your Company's core strength is its people. To bring in more business focus and totalownership your Company's business organizational structure has been redesigned. This isexpected to allow better growth and reward opportunities for talent while simultaneouslydelivering better value to shareholders. Your Company has HR policy that elaborates oneach aspect of human resource management including recruitment employee development &training staff welfare administration services & recreation events. The Companyoffers a growth environment along with monetary benefits in line with industry standards.The Company has a number of employee initiatives to attract retain and develop talent inthe organization.

Your Company encourages regular training and development program. Continuous trainingis imparted in advanced technologies managerial and soft skills for the employees toenhance their skill-sets in alignment with their respective roles. The major thrustcontinues in the effort to bring about measurable change in training coverage andeffectiveness increasing the Leadership and Development opportunities for every staffmember.

Company’s people centric focus providing an open work environment fosteringcontinuous improvement and development helped several employees realize their careeraspirations during the year. Ducon has continually adopted structures that help attractbest external talent and promote internal talent to higher roles and responsibilities.

Employee Retention is a key focus area. The Company has initiated various measures toenhance the retention of employees during the year which includes employee engagementsurveys transparent Performance Management System and connect to maintainemployee-friendly culture in the organization.

19. Fixed Deposits

Your Company has not accepted any fixed deposits and as such no amount of principalor interest was outstanding as on the date of the Balance Sheet.

20. Directors Responsibility Statement

Pursuant to the provisions of clause (C) of sub-section (3) of Section 134 of theCompanies Act 2013 the Directors based on the information and representations receivedfrom the operating management confirm that:

i) In the preparation of the annual accounts the applicable accounting standards hadbeen followed along with no material departures;

ii) The Directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company at the end of the financial year and ofthe profit of the Company for that period;

iii) The Directors had taken proper and sufficient care to the best of their knowledgeand ability for the maintenance of adequate accounting records in accordance with theprovisions of the Companies Act 1956 for safeguarding the assets of the Company and forpreventing and detecting fraud and other irregularities;

iv) The Directors had prepared the annual accounts on a going concern basis; and

v) The directors had laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively.

vi) The directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.

21. Share Capital

The paid up Equity Share Capital as on 31st March 2016 was Rs. 78423100divided into 78423100 Equity shares of Re.1/- each which is same as share capital as atthe previous year end.

22. Shares

a. Buyback of Securities: The Company has not brought back any of the securities duringthe year under review.

b. Sweat Equity: The Company has not issued any sweat equity shares during the yearunder review. c. Employee Stock Option Plan: The Company has not provided any stockoptions to the employees.

23. Board Evaluation

Pursuant to the provisions of the Companies Act 2013 the Board has carried out anannual performance evaluation of its own performance the directors individually as wellas the evaluation of the working of its Audit Nomination & Remuneration Committee.

24. Number of Meetings of the Board

During the year Fourteen Board Meetings were held. The details of the Board and variousCommittee meetings are given in the Corporate Governance Report.

25. Declaration by an Independent Director(s)

A declaration has been received by an Independent Director(s) that they meet thecriteria of independence as provided in sub-section (6) of Section 149 of the CompaniesAct 2013 and revised Clause 49 of the Listing Agreements. Further there has been nochange in the circumstances which may affect their status as independent director duringthe year.

26. Remuneration Policy

The Board has on the recommendation of the Nomination & Remuneration Committeeframed a policy for selection and appointment of Directors Senior Management and theirremuneration.

Nomination remuneration and compensation committee policy (NRC Committee)

The NRC Committee of the Company shall be formed by the Board of Directors of theCompany out of its Board members. The NRC Committee shall consist of minimum threenon-executive directors out of which two shall be independent directors. The chairpersonof the Company may be appointed as a member of the NRC Committee but shall not chair theNRC Committee. The Chairman of the NRC Committee shall be an independent director. Nomember of the NRC Committee shall have a relationship that may interfere with hisindependence from management and the Company or with the exercise of his duties as a NRCcommittee member. The NRC Committee may invite such of the executives of the Company asit considers appropriate (and particularly the Managing Director) to be present at themeetings of the NRC committee but on occasions it may also meet without the presence ofany executives of the Company. The Company Secretary shall act as the secretary to the NRCCommittee.

27. Composition of Audit Committee

The Audit Committee comprises of three directors namely Mr. Harish Shetty Mr. VirenShah and Mrs. Pinakee Parikh.

28. Risk Management

Risks are events situations or circumstances which may lead to negative consequenceson the Company's businesses. Risk management is a structured approach to manageuncertainty. As a formal roll-out all business divisions and corporate functions willembrace Risk Management Policy and Guidelines and make use of these in their decisionmaking. Key business risks and their mitigation are considered in the annual/strategicbusiness plans and in periodic management reviews. The risk management process in ourmulti-business multi-site operations over the period of time will become embedded intothe Company’s business systems and processes such that our responses to risks remaincurrent and dynamic.

The Risk Management is overseen by the Audit Committee of the Company on a continuousbasis. The Committee oversees Company’s process and policies for determining risktolerance and review management’s measurement and comparison of overall risktolerance to established levels. Major risks identified by the businesses and functionsare systematically addressed through mitigating actions on a continuous basis. Fordetails please refer to the Management Discussion and Analysis report which form part ofthe Board Report.

29. Vigil Mechanism

Your Company has established a mechanism called ‘Vigil Mechanism’ fordirectors and employees to report the unethical behavior actual or suspected fraud orviolation of the Company’s code of conduct or ethics policy and provides safeguardsagainst victimization of employees who avail the mechanism. The Vigil Mechanism Policy hasbeen uploaded on the website of the Company at www.dtlindia.com.

30. Corporate Social Responsibility

The Company is not required to constitute a Corporate Social Responsibility Committeeas it does not fall within purview of Section 135(1) of the Companies Act 2013 and henceit is not required to formulate policy on corporate social responsibility.

31. Particulars of Employee

None of the employee has received remuneration exceeding the limit as stated in rule5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014.

32. Particulars of Remuneration

The information required under Section 197 of the Act and the Rules made there-underin respect of employees of the Company is given under Annexure IV.

33. Internal Audit & Controls

The Company has in place proper and adequate internal control systems commensurate withthe nature of its business and size and complexity of its operations. Internal Auditorsfindings are discussed with the process owners and suitable corrective actions taken asper the directions of Audit Committee on an ongoing basis to improve efficiency inoperations. During the year the Company continued to implement their suggestions andrecommendations to improve the control environment. Their scope of work includes review ofprocesses for safeguarding the assets of the Company review of operational efficiencyeffectiveness of systems and processes and assessing the internal control strengths inall areas.

34. Extract of Annual Return

As required pursuant to section 92(3) of the Companies Act 2013 and rule 12(1) of theCompanies (Management and Administration) Rules 2014 an extract of annual return inMGT-9 as a part of this Annual Report as Annexure-I.

35. Secretarial Audit Report

Pursuant to Section 204 of the Companies Act 2013 the Company had appointed Ms.Shruti Shah Practicing Company Secretary as its Secretarial Auditor to conduct theSecretarial Audit of the Company for the F.Y 2015-16. The Company provides all theassistance and facilities to the Secretarial Auditor for conducting their audit. Report ofSecretarial Auditors for the F.Y 2015-16 in Form MR-3 is annexed to this report asAnnexure-II.

36. Particulars of Loans Guarantees or Investments

Details of Loans Guarantees and Investments covered under the provisions of Section186 of the Companies Act 2013 are given in the notes to the Financial Statements.

37. Particulars of contracts or arrangements with related parties

The particulars of every contract or arrangements entered into by the Company withrelated parties referred to in sub-section (1) of Section 188 of the Companies Act 2013including certain arm’s length transactions under third proviso thereto have beendisclosed in Form No. AOC-2 as Annexure-III.

38. Obligation of Company under the sexual harassment of women at workplace(prevention prohibition and redressal) Act 2013

In order to prevent sexual harassment of women at work place a new act the SexualHarassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013 hasbeen notified. Your Company has adopted a policy for prevention of Sexual Harassment ofWomen at workplace and has set up Committee for implementation of said policy. During theyear Company has not received any complaint of harassment.

39. Conservation of Energy Technology Absorption Research & Development andForeign Exchange Earnings and Outgo

Information pursuant to Section 134(3)(m) of the Companies Act 2013 read with Rule 8(3)the Companies (Accounts) Rules 2014 forming part of Directors’ Report for the yearended 31st March 2016 is as under:

Conservation of Energy: The Company’s operations involve low energyconsumption. However efforts to conserve and optimize the use of energy through improvedoperational methods and other means will continue.

Technology Absorption: The Technology available and utilized is continuouslybeing upgraded to improve overall performance and productivity.

Research & Development: Your Company believes that research &development is a continuous process for sustained corporate excellence. Our research &development activities help us in product and service improvement effective timemanagement and are focused to provide unique benefits to our customers. Such methods donot involve any specific cost burden to the Company.

Foreign Exchange Earnings : Rs. NIL (previous year Nil)
Foreign Exchange Outgo : Rs. 0.03 (previous year 0.03)

40. Acknowledgements

Your Directors thank the Company’s Investors Clients Vendors Bankers Businessand various governmental as well as regulatory agencies for their continued support andconfidence in the management.

Your Directors wish to place on record their deep sense of appreciation of thededicated and sincere services rendered by employees at all levels during the year. YourCompany’s consistent growth was made possible by their hard work solidaritycooperation and support.

For and on behalf of the Board of Directors
Chandrashekhar Harish Shetty
Place : Thane Director Director
Dated : September 1 2016 Din no.: 07144708 Din no.: 07144684