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Vital Communications Ltd.

BSE: 532325 Sector: Telecom
NSE: VITALCOMM ISIN Code: INE377B01012
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Vital Communications Ltd. (VITALCOMM) - Director Report

Company director report

Dear Members

Your Directors are pleased to present the 20thAnnual Report and the AuditedAccounts for the year ended 31st March 2015.

Financial

Particulars Year ended March 31 2015 Year ended March 31 2014
Income -
Less: total Expenses 339945 500601
Profit/Loss before tax (339645) (500601)
Less: Tax - -
Less: Deferred Tax 40886 44216
Profit after Tax (380831) (544817)

FINANCIAL PERFORMANCE

During the year under review the Company’s incurred a loss of Rs. 380831/- asagainst loss of Rs. 544817/- in 2013-14.

RESERVE AND SURPLUS

The amount of Rs. (380831) is being transferred in the reserve and Surplus as theCurrent year profit.

DIVIDEND

In consideration of future prospects of the Company Your Board of Directors hasdecided to plough back the profits into the business operations of the Company.

STATE OF COMPANY AFFAIRS:

The Company is complying with all the applicable laws and provisions and there is noadverse action against the business operations of the Company.

CHANGE IN THE SHARE CAPITAL

There is no change in the share capital of the company during the period under review.

CHANGE IN THE NATURE OF BUSINESS

During the year the Company has not changed its nature of business.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

As required under Clause 49 of the Listing Agreements with Stock Exchanges theManagement Discussion and Analysis Report is presented in the separate section and formsan integral part of the Directors Report and attached as annexure I.

MATERIAL CHANGES AND COMMITMENTS IF ANY AFFECTING THE FINANCIAL POSITION OF THECOMPANY WHICH HAVE OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR OF THE COMPANY TO WHICHTHE FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT

There have been no material changes and commitments which can affect the financialposition of the Company occurred between the end of the financial year of the Company anddate of this report.

AUDIT COMMITTEE

The Board has well-qualified Audit Committee with majority of Independent Directorsincluding Chairman. They possess sound knowledge on Accounts Audit Finance TaxationInternal Controls etc. The details of the Composition of the Audit Committee are given inthe Corporate Governance Report.

During the year there are no instances where the Board had not accepted therecommendations of the Audit Committee.

RISK MANAGEMENT POLICY

The Company has devised and implemented a mechanism for risk management and hasdeveloped a Risk Management Policy. The Policy provides for constitution of a RiskCommittee which will work towards creating a Risk Register identifying internal andexternal risks and implementing risk mitigation steps. The Committee will on a quarterlybasis provide status updates to the Board of Directors of the Company.

FAMILIARIZATION PROGRAMME

The Company at its various meetings held during the Financial year 2014 -15 hadfamiliarize the Independent Directors with regard to the roles rights responsibilitiesin the Company nature of the industry in which the Company operates the Business modelsof the Company etc. The Independent Directors have been provided with necessary documentsreports and internal policies to familiarize then with the Company’s policiesprocedures and practices.

Periodic presentations are made to the Board and Board Committee meeting on Businessand performance updates of the Company Business strategy and risks involved.

Quarterly updates on relevant statutory changes and judicial pronouncements andencompassing important amendments are briefed to the Directors.

PARTICULARS OF EMPLOYEES AND OTHER DISCLOSURE

The prescribed particulars of Employees required under Section 197(12) of the CompaniesAct 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 is given as annexure II:

The information required pursuant to Section 197(12) read with Rule 5(2) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 in respect ofEmployees of the Company will be provided on request. In terms of Section 136 of the Actthe reports and accounts are being sent to the members and others entitled theretoexcluding the information on employees particulars mentioned in rule 5(2) of the said rulewhich is available for inspection by the Members at the Registered Office of the Companyduring the business hours on working days of the Company upto the date of ensuing AnnualGeneral Meeting. If any Member is interest in inspecting the same such Member may writeto the Compliance officer in advance.

DEPOSITS

The Company has not accepted deposit from the public falling within the ambit ofSection 73 of the Companies Act 2013 and The Companies (Acceptance of Deposits) Rules2014. No amount of principal or interest was outstanding as on the date of Balance Sheet.

NAME OF THE COMPANIES WHICH HAVE BEEN BECOME OR CEASED TO BE ITS SUBSIDIARIES ANDASSOCIATE COMPANIES DURING THE YEAR

Since the Company has no subsidiaries as on 31st March 2015 provision of section 129of the Companies Act 2013 is not applicable.

STATE OF COMPANY AFFAIRS:

The Company is complying with all the applicable laws and provisions and there is noadverse action against the business operations of the Company.

AUDITORS

The Auditors M/s G.P. Keshri & Associates Chartered Accountant are herebyrecommended as Statutory Auditors of the Company.

AUDITOR’S REPORT

The observation made in the Auditors’ Report read together with relevant notesthereon are self explanatory and hence do not call for any further comments under Section217 of the Companies Act 1956.

CORPORATE GOVERNANCE REPORT

In terms of the provisions of Clause 49 of the Listing Agreement the Report onCorporate Governance is attached to the report as an Annexure III. Certificate from theStatutory Auditors of the company M/s G.P. KESHRI & ASSOCIATES Chartered Accountantsconfirming the compliance with the conditions of Corporate Governance as stipulated underClause 49 of the Listing Agreement is attached to this report.

EXTRACT OF THE ANNUAL RETURN

The extract of the annual return in form no. MGT 9 has been annexed to the Report asAnnexure IV.

CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars as required under the provisions of Section 314(3)(m) of the CompaniesAct 2013 read with Rule 8(3) of The Companies (Accounts) Rules 2014 in respect ofConservation of Energy and Technology Absorption have not been furnished considering thenature of activities undertaken by the Company during the year under review. There was noforeign exchange earning & outgo during the financial year under review.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

During the year under review the Company is not required to comply with the provisionsrelated to Corporate Social Responsibility on the basis of its financial statement.

DIRECTORS & COMMITTEES:

a) Changes in Directors and Key Managerial Personnel

During the year under review there is no change among the directorship and keyManagerial person of the company.

b) Declaration by an Independent Director(s) and re- appointment if any

All Independent Directors have given declaration that they meet the criteria ofindependence as laid down under Section 149(6) of the Companies Act and ListingAgreement.

c) Formal Annual Evaluation of Board

Pursuant to the provisions of companies Act 2013 and clause 49 of the ListingAgreement the Board has carried out annual performance evaluation of its own performancethe directors individually as well the evaluation of the working of its Audit Nomination& Remuneration and Stakeholder relationship committee. The manner in which theevaluation has been carried out has been explained in Corporate Governance Report.

NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS

a. BOARD MEETINGS

During the year Six Board Meetings were convened and held. The details of which aregiven below. The intervening gap between the Meetings was within the period prescribedunder the Companies Act 2013.

S. No. Date of meeting Total No. of Directors on the Date of Meeting No. of Directors attended
1. 06.05.2014 3 3
2. 28.05.2014 3 3
3. 14.08.2014 3 3
4. 30.08.2014 3 3
5. 13.11.2014 3 3
6. 13.02.2015 3 3

COMPOSITION AND MEETINGS OF AUDIT COMMITTEE

The Composition and terms of reference of the Committee satisfy the requirementsSection 177 of the Companies Act 2013. Audit Committee met 4 times during the financialyear 2014-15 on 28.05.2014 14.08.2014 13.11.2014 and 13.02.2015 and following is thecomposition:

Name of Member Designation Category
Mrs. Shubha Jhindal Chairperson Non Executive Director
Mr. Manoj Kumar Member Non Executive Director
Mr. Shyam Sunder Sabharwal Member Non Executive Director

COMPOSITION AND MEETINGS OF STAKEHOLDERS RELATIONSHIP COMMITTEE

The Composition and terms of reference of the Committee satisfy the requirementsSection 178 of the Companies Act 2013. The Committee met 4 times during the financialyear 2014-15 on 28.05.2014 14.08.2014 13.11.2014 and 13.02.2015 and following is thecomposition:

Name of Member Designation Category
Mrs. Shubha Jhindal Chairperson Non Executive Director
Mr. Manoj Kumar Member Non Executive Director
Mr. Shyam Sunder Sabharwal Member Non Executive Director

NOMINATION & REMUNERATION COMMITTEE

The Company has duly constituted Nomination and Remuneration Committee to align withthe requirements prescribed under the provisions of the Companies Act 2013. The detailsof the Composition of the Nomination and Remuneration Committee are given below:

Name of Member Designation Category
Mrs. Shubha Jhindal Chairperson Non Executive Director
Mr. Manoj Kumar Member Non Executive Director
Mr. Shyam Sunder Sabharwal Member Non Executive Director

DETAILS OF ESTABLISHMENT OF VIGIL MECHANISM FOR DIRECTORS AND EMPLOYEES

During the year as per Section 177(9) read with Rule 7(1) of The Companies (Meeting ofBoard and its Powers) Rules 2014 Company is required to establish a Vigil Mechanism forits Directors and employees. In order to ensure that the activities of the Company and itsemployees are conducted in a fair and transparent manner by adoption of highest standardsof professionalism honesty integrity and ethical behavior the company has adopted avigil mechanism policy. This policy is explained in corporate governance report and alsoposted on the website of company.

PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS UNDER SECTION 186

During the year Company has not provided Loans Guarantees and Investments coveredunder the provisions of Section 186 of the Companies Act 2013.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES:

The Company has no material significant transactions with its related parties which mayhave a potential conflict with the interest of the Company at large. The details oftransactions with the Company and related parties are given for information under notes toAccounts.

MANAGERIAL REMUNERATION POLICY

Provisions relating to Managerial Remuneration as per Section 197 read with Rule 5 ofThe Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 The Boardhas on the recommendation of the Nomination & Remuneration Committee framed a Policyfor Selection and appointment of Directors Senior management and their Remuneration.

DETAILS IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THEFINANCIAL STATEMENTS

The Company maintains appropriate systems of internal control including monitoringprocedures to ensure that all assets are safeguarded against loss from unauthorized useor disposition. Company policies guidelines and procedures provide for adequate checksand balances and are meant to ensure that all transactions are authorized recorded andreported correctly.

SECRETARIAL AUDIT REPORT AND EXPLANATION TO THE QUALIFICATIONS REPORTED IN THE REPORT

Provisions relating to Secretarial Audit as per Section 204 read with Rule 9 of TheCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 the Companyhas appointed M/s. Sumit Gupta & Associates Company Secretaries to undertake theSecretarial audit of the Company for the Financial Year 2014-15 and the report is attachedherewith as Annexure V. With respect to the qualifications the Company is searching thebest candidate for the post of Company Secretary and Chief Financial officer and wouldtry to intimate and file the required information/compliances timely and effective stepshas been taken to comply the qualifications as reported by the Secretarial Auditor.

INFORMATION UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITIONAND REDRESSAL) ACT 2013

In order to prevent sexual harassment of women at workplace; the provisions of SexualHarassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013 areeffective in the Company. Under the said Act every company is required to set up anInternal Complaints Committee to look into complaints relating to sexual harassment atworkplace of any women employee. There was no complaint on sexual harassment during theyear under review.

DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS ORTRIBUNALS IMPACTING THE GOING

CONCERN STATUS AND COMPANY’S OPERATIONS IN FUTURE

On 31st July 2014 SEBI has passed order no. WTM/RKA/IVD/ID-08/72-95/2014dated July 31 2014 restrained the Company from accessing the securities market and arefurther prohibiting them from buying selling or otherwise dealing in the securitiesmarket either directly or indirectly or being associated with the securities market inany manner whatsoever for the period of 3 years.

AUDIT OBSERVATIONS

Auditors’ observations are suitably explained in notes to the Accounts and areself-explanatory.

HUMAN RESOURCES

There are no employees as on date on the rolls of the Company who are in receipt ofRemuneration which requires disclosures under Section 134 of the Companies Act 2013 andCompanies (Particulars of Employees) Rules 1975.

During the year under review relationship with the employees is cordial.

DIRECTORS’ RESPONSIBILITY STATEMENT

The Directors’ Responsibility Statement referred to in clause (c) of sub-section(3) of Section 134 of the Companies Act 2013 shall state that -

(a) In the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures;

(b) 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 and loss of the company for that period;

(c) The directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the company and for preventing and detecting fraud and other irregularities;

(d) The directors had prepared the annual accounts on a going concern basis; and

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

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

ACKNOWLEDGEMENT

Directors take this opportunity to express their thanks to various departments of theCentral and State Government Bankers Material Suppliers Customers and Shareholders fortheir continued support and guidance.

The Directors wish to place on record their appreciation for the dedicated efforts putin by the employees of the Company at all level

By Order of the Board
For VITAL COMMUNICATIONS LIMITED
Place: Delhi Sd/- Sd/-
Date: 1st September 2015 Shyam Sunder Sabharwal Manoj Kumar
DIN: 01912767 DIN: 00906104