IIT Investrust Limited

BOARD'S REPORT

The Board of Directors has pleasure in presenting the 29th Annual Report and Audited statement of Accounts for the year ended 31st March, 2015 together with the Independent Auditors' Report.

FUTURE PROSPECTS:

Long term market drivers such as the push to virtualization technology, a transition from PC to thin clients and sustained economic expansion are expected to push the demand for thin clients during the year 2015-16.

2. RESERVES:

In view of the losses, the question of transferring any amount to Reserves does not arise.

3. SHARE CAPITAL:

There were no changes in the Share Capital of the Company during the year.

4. MATERIAL CHANGES & COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY, BETWEEN THE END OF THE FINANCIAL YEAR AND THE DATE OF THE REPORT:

There are no material changes and commitments between the end of the Financial Year and the Date of the Report, which affect the financial position of the Company.

5. EVENTS SUBSEQUENT TO THE DATE OF FINANCIAL STATEMENTS:

There are no material changes after 31st March, 2015 till the signing of this Report. However, based on the recommendation of the Board, approval of the shareholders has been sought by way of Postal Ballot to shift the Registered Office of the Company from the State of Karnataka to the State of Maharashtra to derive more economic and efficient operational advantages. Necessary approval from the Ministry of Corporate Affairs will also be sought.

6. CHANGE IN NATURE OF BUSINESS:

There were no changes in the nature of business during the year under review as prescribed in Rule 8(ii) of the Companies (Accounts) Rules, 2014.

7. DIVIDEND:

Whilst your Directors understand the sentiments of the Investors, the financials in the year that has passed, do not enable the Board to recommend any dividend. However, the Directors will strive hard to bring the Company back to dividend track before long and the improving performance of the Company is hoped to continue to facilitate consideration of dividend in the days to come.

8. BOARD MEETINGS:

The Meetings of the Board are held at regular intervals with a time gap of not more than 120 days between two consecutive Meetings. Additional Meetings of the Board of Directors are held when necessary

The Board of Directors duly met 6 (Six) times from 1st April, 2014 to 31st March, 2015 on 30th May 2014, 29th July 2014, 30th September 2014, 31st October 2014, 31st January 2015 and 31st March 2015.

9. DIRECTORS AND KEY MANANGERIAL PERSONNEL:

Mr. Prakash H Rao and Mrs. Kumkum Bhuwania, who were appointed as Additional Directors, hold office up to the date of ensuing Annual General Meeting; they are proposed to be appointed as Independent Directors of your Company. Notice has been received from a member of the Company under Section 160 of the Companies Act, 2013 along with the requisite deposits. Mr. Prakash H Rao and Mrs. Kumkum Bhuwania, Directors of the Company, are proposed to be appointed as Independent Directors for consecutive 5 years and they fulfill the requirements as per the Companies Act, 2013. Their appointments are proposed under Special Business.

Mr. M. V Shetty, Executive Director, retires by rotation, as per the Companies Act, 2013 and being eligible, offers himself for re-appointment.

10. DECLARATION FROM INDEPENDENT DIRECTORS ON ANNUAL BASIS:

The Company has received necessary declaration from each Independent Director of the Company under Section 149(7) of the Companies Act, 2013 that the Independent Directors of the Company meet with the criteria of their Independence laid down in Section 149(6).

11. COMPOSITION OF AUDIT COMMITTEE, NOMINATION AND REMUNERATION COMMITTEE & STAKEHOLDERS' RELATIONSHIP COMMITTEE:

Following are the composition of various Committees:

i) Composition of Audit Committee:

a) Mr. N. V. Maslekar - Chairman

b) Mr. K. Prakash - Member

c) Mr. Prakash H Rao - Member

d) Mrs. Kumkum Bhuwania - Member

ii) Nomination and Remuneration Committee:

a) Mr. N. V. Maslekar - Chairman

b) Mr. A K Bhuwania - Member

c) Mr. Prakash H Rao - Member

d) Mr. K Prakash - Member

iii) Composition of Stakeholders' Relationship Committee:

a) Mr. K Prakash - Chairman

b) Mr. N V Maslekar - Member

c) Mr. Prakash H Rao - Member

12. RISK MANAGEMENT POLICY:

The Company has not yet formulated a Risk Management Policy and has in place a mechanism to inform the Board Members about risk assessment and minimization procedures and undertakes periodical review to ensure that executive management controls risk by means of a properly designed framework.

13. VIGIL MECHANISM / WHISTLE BLOWER POLICY:

The Company has a whistle blower policy for vigil mechanism which is available on the website of the company and there were no cases reported during the applicability of Section 135 of the Companies Act read with the Companies (Accounts) Rules, 2015. However this clause is not applicable to the Company.

15. PARTICULARS OF LOANS GIVEN, INVESTMENTS MADE, GUARANTEES GIVEN OR SECURITY PROVIDED BY THE COMPANY:

The Company has not given any loan or guarantee covered under the provisions of section 186 of the Companies Act, 2013.

16. DIRECTORS' RESPONSIBILITY STATEMENT:

In pursuance of Section 134 (3) (c) of the Companies Act, 2013, the Directors hereby confirm that:

(a) in the preparation of the annual accounts, the applicable Accounting Standards had been followed along with proper explanation relating to material departures;

(b) 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 endof the financial year and of the profit and loss of the Company for that period;

(c) 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;

(d) the Directors had prepared the annual accounts on a going concern basis;

(e) the Directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and

(f) 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;

17. EXTRACT OF ANNUAL RETURN:

As required pursuant to Section 92(3) of the Companies Act, 2013 and rule 12(1) of the Companies (Management and Administration) Rules, 2014, an extract of Annual return in MGT-9 is attached as a part of this Annual Report. as Annexure-I.

18. AUDITORS:

The Auditors, Messrs Ishwar & Gopal Chartered Accountants, Bengaluru, retire at the ensuing Annual General Meeting. The Company has received a certificate under Section 141 of the Companies Act, 2013 from them that their appointment would be within the limits specified therein.

19. SECRETARIAL AUDIT REPORT:

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed Mr. S Kedarnath, Bengaluru, a Company Secretary in Practice to undertake the Secretarial Audit of the Company. The Report of the Secretarial Auditor in the form of MR-3 is annexed to this Report as Annexure-II.

EXPLANATION BY BOARD ON ADVERSE COMMENTS BY AUDITORS:

The Auditors have pointed out under "Emphasis of Matters" with regard to non- provision in respect of Company's investments in and receivables from its Subsidiary . In view of the long term prospects and the steps taken to recover these receivables and cash flow of the Subsidiary, the Directors feel that no provision need be made in the accounts.

20. CONSERVATION OF ENERGY:

Your Company gives high priority for conservation of energy through better supervision and training of employees to economize the usage of electricity.

TECHNOLOGY ABSORPTION:

The Company's products are manufactured by using in-house know how and Research facilities and no outside technology is being used for manufacturing activities. Therefore no technology absorption is required. The Company constantly strives for maintenance and improvement in quality of its products and entire Research & Development activities are directed to achieve the aforesaid goal.

FOREIGN EXCHANGE EARNINGS AND OUTGO:

The Company earned Rs. 61,42,38,969/- in foreign exchange and expended Rs. 43,89,02,693/- in foreign exchange during the period under review.

21. DEPOSITS:

Your Company has not invited/accepted/renewed any deposits from public as defined under the provisions of Companies Act, 2013 and Companies (Acceptance of Deposits) Rules, 2014 and accordingly, there were no deposits which were due for repayment on or before 31st March, 2015.

22. INTERNAL CONTROL SYSTEMS & THEIR ADEQUACY:

The Company continued to maintain, high standards of internal control designed to provide adequate assurance on the efficiency of operations and security of its assets. The adequacy and effectiveness of the internal control across various activities, as well as compliance with laid-down systems and policies are comprehensively and frequently monitored by your Company's management at all levels of the organization. The Audit Committee, which meets at-least four times a year, actively reviews internal control systems as well as financial disclosures with adequate participation and inputs from the Statutory, Internal and Corporate Secretarial Auditors.

23. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS:

The Company have duly complied with the provision of Section 186 of the Companies Act, 2013 and it has taken: Secured Loans: Rs. 29,52,036/-Unsecured Loans: Rs. 3,75,00,000/-Current / Non-Current Investments: Rs. 51,80,261/-Guarantees: NIL

Securities Extended: Hypothecation of vehicles for Secured Loans

24. MATERIAL ORDER PASSED BY ANY COURT OR REGULATOR OR TRIBNUAL IMPACTING GOING CONCERN STATUS OF COMPANY:

No order was passed by any court or regulator or tribunal during the period under review which impacts going concern status of the Company.

25. RELATED PARTY TRANSACTIONS (RPTs):

All Related Party Transactions are placed before the Audit Committee as also the Board for approval. Prior omnibus approval of the Audit Committee is obtained for the transactions which are of a foreseen and repetitive nature. The transactions entered into pursuant to the omnibus approval so granted are audited and a statement giving details of all related party transactions is placed before the Audit Committee and the Board of Directors for their approval.

The policy on Related Party Transactions as approved by the Board is uploaded on the Company's website. Web link for the same is www.vxl.net.in/Investors/vxl-disclosures.aspx Particulars of Contracts or Arrangements with Related parties referred to in Section 188(1) of the Companies Act, 2013 in Form AOC- 2 annexed to this Report as Annexure-III.

26. HUMAN RESOURCES & INDUSTRIAL RELATIONS:

Your Company recognizes the critical significance of competent and experienced employees. The team VXL Instruments continued to stand by the Company during tiring and tough times and your

Board places its appreciation for these relentless efforts, untiring dedication and sense of belongingness exhibited by the employees at all levels. Your Company focuses on long term Human Resource planning aimed at managing change more efficiently, grooming internal talent for future roles and also driving efficiency within the Organisation.

Pursuant to the closure of the unit manufacturing CRT Terminals caused by the phase out of GVX Terminals, the matter is before the Honourable High Court of Karnataka. As per the directions of the Honourable High Court, pending final decision, the Company has been directed to deposit the amount payable to the workmen with the Honourable High Court. This has been complied with. Industrial relations have been cordial and constructive, which have helped your Company to achieve production targets.

27. DETAILS OF HOLDING COMPANY/ SUBSIDIARIES/JV:

The Company's Subsidiary Company is VXL Instruments Limited (UK) located in the United Kingdom. Financial performance of the Subsidiary Company referred to in Section 129 of the Companies Act, 2013 in Form AOC-1 is annexed to this Report as Annexure-IV.

28. ANNUAL BOARD EVALUATION:

Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board has carried out an annual performance evaluation of its own performance, the Directors individually as well as the evaluation of the working of its Audit, Nomination & Remuneration and Compliance Committees.

29. RATIO OF REMUNERATION TO EACH DIRECTOR:

Pursuant to Section 197(12) of the Companies Act, 2013 and Rule 5 (1) (2) (3) of the Companies (Appointment and Remuneration) Rules, 2014, details/disclosures of Ratio of Remuneration of each Director to the median employee's remuneration is annexed to this report as Annexure -V.

30. LISTING WITH STOCK EXCHANGE:

The Company confirms that it has paid the Annual Listing Fees for the year 2015-16 to BSE where the Company's Shares are listed.

31. CORPORATE GOVERNANCE AND SHAREHOLDERS' INFORMATION:

In compliance with the Listing Agreement with the Stock Exchange, your Board has adhered to the Corporate Governance Code. All the requisite Committees are functioning in line with the guidelines.

As reported earlier, a reputed firm of independent Chartered Accountants has been carrying out the responsibilities of Internal Auditors and periodically they have been reporting their findings of systems, procedures and management practices.

As required under Clause 49 of the Listing Agreement with the Stock Exchange, a report on Corporate Governance and a Certificate from Messrs Ishwar & Gopal Chartered Accountants, confirming compliance with the requirements of Corporate Governance forms integral part of this Report as Annexure VI.

32. CAPITAL EXPENDITURE:

As on 31st March, 2015, the gross tangible and intangible assets stood at Rs. 18,43,33,771/- and the net tangible and intangible assets, at Rs. 17,07,92,765/-. Additions during the year amounted to Rs. 38,63,957/-. The Company has not purchased any assets under lease.

33. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013:

The Company has in place an Anti Sexual Harassment Policy in line with the requirements of the sexual harassment of women at the work place (Prevention, Prohibition & Redressal) Act, 2013. Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy.

The following is a summary of sexual harassment complaints received and disposed off during the year 2014-15:

Number of complaints received: NIL Number of complaints disposed off: NIL

34. MANAGEMENT DISCUSSION AND ANALYSIS:

As requisite and appropriate Management Discussion & Analysis is covered under this Report itself, a separate note on the same is not being furnished.

The Board has, on the recommendation of the Nomination & Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management and their remuneration.

35. ACKNOWLEDGEMENTS:

The Directors place on record their appreciation for valuable contribution made by employees at all levels, active support and encouragement received from the Government of India, Government of Karnataka, Company's Bankers, Customers, Principals, Business Associates and other Acquaintances.

Your Directors recognize the continued support extended by all the Shareholders and gratefully acknowledge with a firm belief that the support and trust will continue in future also.

For and on behalf of the Board of Directors

Madireddy V Nagaraj

Managing Director

M.V. Shetty

Whole Time Director

DIN:00515419 DIN: 00515711

Place : Bengaluru

Date : 30th July, 2015