DIRECTOR REPORT Your directors have pleasure in submitting their 23rd Annual Report together with the audited accounts for the year ended 30th June, 2015. Dividend In view of the losses and carried over losses as at June 30, 2015, no dividend is recommended by your board of directors for the financial year ended 30th June,2015. Financial Performance with respect to Operational Performance: The company report standalone turnover of Rs. 49.01 lacs compare to Rs. 52.03 lacs in the previous year. The net loss during the year of Rs. 20.49 lacs compare to loss of Rs. 43.42lacs in the previous year. MANAGEMENT DISCUSSION AND ANALYSIS (a) Industry structure and developments: The Indian information technology IT-ITES industry has played a key role in putting India on the global map. Over the past decade, this sector has become the country's premier growth engine, crossing significant milestones in terms of revenue growth, employment generation and value creation, in addition to becoming the global brand ambassador for India. According to a recent report developed by NASSCOM, Perspective 2020, the current industry size of IT-BPO approximately USD 60 billion is projected to grow to approximately USD 225 billion by 2020, and possibly larger. It also estimated that up to 80 per cent of this growth would like to come from adjacent areas where traditional IT-BPO work, combined with deep domain knowledge, innovation and IT- based growth engines would help create new opportunities and Market. (b) Future Outlook With a compounded annual growth rate (CAGR) of over 24% in the last decade, the Indian IT/ITeS industry has emerged as a key growth engine for the economy, contributing around 5.6% to the country's Gross Domestic Product (GDP) in FY 2011 and also providing direct employment to about 2.3 million people (from just about half a million in 2001). It remains one of the biggest sectors for wealth generation in the country. As per the industry body, NASSCOM, the sector is estimated to provide direct employment to 10 million and indirect employment to 20 million by 2020. (c) Strategies and Future plans The Company is also actively examining the possibility of reducing costs at all levels and evaluating new value added products, which will have fresh business in domestic as well as international markets. (d) Risks and Concerns The Company recognises that risk is an integral and unavoidable component of business and is committed to managing the risk in a proactive and effective manner. In this regard, the Company has adopted Risk Management Mechanism which involves the Process of systematically identifying all possible risk events which have a potential impact on the business. Prioritizing the identified risks by the likelihood and the potential impact. Managing risks by using any of the four techniques namely risk avoidance, risk transfer, risk sharing and risk reduction. Oversight and review of the risk management system and any changes that might affect it. Monitoring and reviewing occurs concurrently throughout the risk management process. Appropriate communication and consultation with internal and external stakeholders should occur at each stage of the risk management process as well as on the process as a whole. KEY RISKS Foreign Exchange Risk Company is exposed to foreign exchange risk on account of its export sales to other countries. Credit Risks Company faces credit risks in case of delays in settlement of dues by clients. Legal Risks The Company operates in a complex legal/regulatory environment and is governed by various laws and statutes. Hence the Company is exposed to legal risk exposure.Company has set up an experienced team of professionals and has established a well compliance management to deal with all legal requirements. Other Risks Apart from the risks mentioned above, the Company's business is exposed to other operating risks, which are mitigated through regular monitoring and corrective action. (e) Internal control and systems The Company has in place a well established internal control procedures covering various areas. Necessary checks and balances have been instituted for timely correction. Human resources management Employees are your company's most valuable resource. Your Company continues to create a favourable environment at work place. The company also recognises the importance of training and consequently deputes its work force to various work related courses/seminars including important areas like issues like Technical skills. Environmental Protection, Health and Safety (EHS) EHS continues to receive the highest priority in all operational and functional areas at all locations of your Company. Extract of Annual Return The extract of annual return in Form MGT - 9 has been annexed with this report and form part of this report. Number of Board Meetings The details pertaining to meetings of the Board has been explained under Corporate Governance Report annexed to the director's report and forms part of this report. Establishment of Vigil Mechanism The Company has established a vigil mechanism for Directors and employees to report their genuine concerns. Declaration by Independent Directors Independent directors of the Company have submitted a declaration that each of them meets the criteria of independence as provided in Sub-Section (6) of Section 149 of the Act and revised Clause 49 of the Listing Agreements. Further, there has been no change in the circumstances which may affect their status as Independent director during the year. Secretarial Audit and statutory Report The Company appointed Ms. Jeethi Pillai Practising Company Secretaries as Secretarial Auditors, to conduct Secretarial Audit particularly with reference to compliance with Companies Act, 1956/2013, Listing Agreement and relevant SEBI Regulations for the financial year 2014-15. The report of the Secretarial Audit for the financial year 2014-15 in FORM MR-3 is annexed to this report and forms part of this report. There are disqualifications, reservations or adverse remarks or disclaimers in the Secretarial Auditors Report, which your company would like to rectify in phase manner. There are no disqualification, reservations or adverse remarks or disclaimers in the Auditor Report. The emphasis matter in the Auditor reports are self explanatory. Audit Committee Details of Composition of Audit Committee are covered under Corporate Governance Report annexed with this report and forms part of this report. Further, during this year none of the recommendations of the Audit Committee has been rejected by the Board. Policy of Directors Appointment and Remuneration Company's policy on Directors' appointment and remuneration including criteria for determining qualifications, positive attributes, independence of a director and other matters provided under section 178(3) of the Act are covered under Nomination and Remuneration Policy covered under Corporate Governance Report and forms part of this report. Further, information about elements of remuneration package of individual directors is provided in the extract of Annual Return as provided under Section92(3) of the Act, prescribed form MGT-9 annexed with this report and forms part of this Report. Particulars of Employees The information required under Rule 5 of the Act and rules made there-under, in respect of employees employed throughout the year and in receipt of remuneration of Rs. 5,00,000 or in agreegate of Rs. 60,00,000 per year - Nil - (Previous Year -Nil-) Managerial Remuneration Statistical Disclosures pursuant to Rule 5 of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed with this report and forms part of this report. Related Party Transactions Transactions entered with related parties have been explained in Form AOC -2 annexed with this report and forms part of this report. Board Evaluation The board of directors had carried out an annual evaluation of its own performance, Board committees and individual directors pursuant to the provisions of the Companies Act, 2013 and clause 49 of the SEBI listing agreement. In the separate meeting of the Independent directors, performance of non-independent directors, performance of the board as a whole and performance of the Chairman was evaluated taking into account the views of executive directors and non-executive directors. The same was discussed at the next Board Meeting followed the meeting of the Independent directors and the Independent Directors were evaluated without the presence of the director getting evaluated and also the performance of the Board, its Committees and individual directors were also discussed by the Board. The individual directors and the board as a whole in accordance with the performance Evaluation Policy guidelines were evaluated mainly on the basis of the criteria such as attendance, participation, contribution and the benefits derived by the Company. The Chairman was evaluated on the key aspects of his role. The performance of the committees was evaluated by the board after seeking inputs from the committee members on the basis of the criteria such as the composition of committees, effectiveness of committee meetings, etc. The Performance Evaluation policy is uploaded in the Company's website. Disclosure as per Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 The Company has zero tolerance for sexual harassment at workplace and has adopted a policy on prevention, prohibition and redressal of sexual harassment at workplace in line with the provisions of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the rules framed thereunder. The Company has set up a Committee for addressing issues related to women and during the financial year 2014-15, there were no complaints received on sexual harassment. Performance of Subsidiary Companies Innovative BPO Solutions Inc and Innovative BPO Solution Inc are WOS of the comapny within the meaning specified under Section 2 (87)(ii) of Companies Act, 2013 Material Changes and Commitments during the year, if any There were no material changes and commitments between the end of the period under review and the date of this report which could have an impact on the Company's operation in the future or its status as a "going concern". Significant And Material Orders Passed By The Courts Or Tribunals Impacting The Company NIL Listing of Shares Your Company's Shares are traded only in Bombay Stock Exchange which is presently under suspended category. Annexures to this Report The following are the annexures to this report Director's Responsibility Statement in Annexure 1 1. Conservation of energy, technology absorption, Research and development and foreign exchange earnings and outgo in Annexure 2 2. Statement containing salient features of the financial statement of associate company (Form AOC - 1) in Annexure 3 3. Form AOC - 2 in Annexure 4 4. Extract of Annual Report (Form MGT-9) in Annexure 5 5. Secretarial Audit Report (Form MR-3) in Annexure 6 6. Particulars of Remuneration in Annexure 7 7. Corporate Governance Report in Annexure 8 Cautionary Note Statements in the Directors' report and the management discussion and analysis describing the Company's objectives, expectations or predictions may be forward looking within the meaning of applicable securities laws and regulations. Actual results might differ materially from those either expressed or implied in the statement. Important factors that could influence the Company's operations include global and domestic demand and supply conditions affecting selling prices of finished goods, input availability and prices, changes in government regulations, tax laws, economic developments within the country and other related factors such as litigation and industrial relations. Appreciation Directors of your Company record their sincere appreciation of the dedication and commitment of all employees in achieving and sustaining excellence in all areas of the business. Your directors thank the Shareholders, Customers, Suppliers, Bankers and other stakeholders for their continued support during the year. Your Company's consistent growth has been made possible by the hard work, solidarity, cooperation and support of the management team. On behalf of the Board Mohan Subramanian Wholetime Director 24th November,2015 Mumbai |