DIRECTORS' REPORT: The Members, The Board of Directors take pleasure in presenting their Report along with the Audited Accounts of the Company for the year ended 31 -March, 2015. RESULTS OF OPERATIONS: The Year has been a challenging one for the company as the cellular operators have drastically reduced their capex spends and this has severely affected your company's operations resulting in drastic reduction of sales revenues compared to the previous year. During the year the Company's sales were Rs. 115.62 Lacs as against Rs. 8772.14 Lacs in the corresponding period of last year. The Company made a Loss of Rs. 2730.80 Lacs as against a Loss of Rs 918.38 lacs in the corresponding period of last year DIVIDEND: To maintain liquidity, your Directors have not recommended any dividend for the reporting period. MANAGEMENT DISSCUSSION AND ANALYSIS REPORT A Management Discussion and Analysis Report for the year under review as stipulated under clause 49 of the Listing Agreement with the Stock Exchanges is presented in a separate section forming part of the Annual Report. SUBSIDIARIES: The company has following subsidiaries: Direct subsidiaries. M/s Kaweri Telecom Infrastructure Limited, India M/s Eaicom India Private Limited, India M/s Kavveri Technologies Inc., Canada M/s Kaweri Telecom Espana, Spain Step down subsidiaries: (i.e., subsidiaries of M/s Kaweri Technologies Inc.,) M/s Til-Tek Antennae Inc, M/s Spotwave Wireless Ltd, M/s DCI Digital Communications Inc., M/s Kaweri Realty 5 Inc., M/s Trackcom Systems Inc. Pursuant to Ministry of Corporate Affair's Circular No. 2/2011 dated 08.02.2011, since the company is presenting consolidated financial statement of Holding and Subsidiary companies, the individual financial statements of the subsidiaries are not presented separately. The consolidated financial statement has been prepared in strict compliance with applicable Accounting Standards and, where applicable, Listing Agreement as prescribed by the Security and Exchange Board of India. The company do undertake that annual report that annual accounts of the subsidiary companies and the related detailed information shall be made available to shareholders of the holding and subsidiary companies seeking such information at any point of time. Annual accounts of the subsidiary companies are also kept for inspection by any shareholders in the head office (i.e.. Registered Office) of the company and of the subsidiary companies. FIXED DEPOSITS: Your Company has not accepted any Fixed Deposits during the year within the meaning of Section 76 of the Companies Act, 2013 and the Rules made there under. DIRETORS RESPONSIBILITY STATEMENT: Pursuant to the provisions of Clause (c) of Subsection (3) of Section 134 of the Companies Act, 2013, the directors hereby confirm that: • In preparation of the annual accounts, the applicable Accounting Standards had been followed along with proper explanation relating to material departures. • 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 or loss of the Company for that period. • The Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities. • The Directors had prepared the annual accounts on a going concern basis. • The Directors had laid down internal financial controls to be followed by the company and such internal financial controls are adequate and were operating effectively. • The Directors had devised proper systems to ensure the compliance of all applicable laws and that such systems were adequate and operating effectively CORPORATE GOVERNANCE: Corporate governance, as required under amended Clause 49 of the listing Agreement with the Stock Exchanges, a Certificate of Compliance of Corporate Governance from the company secretary in whole time practice is annexed and forms part of this Directors Report. BUSINESS RESPONSIBILITY REPORT As stipulated under the Listing Agreement, the Business Responsibility report describing the initiatives taken by the Company from environmental, social and governance perspective is attached as part of the Annual Report. CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES All contracts / arrangements / transactions entered by the Company during the financial year with related parties were in the ordinary course of business and on an arm's length basis. During the year, the Company had not entered into any contract / arrangement / transaction with related parties which could be considered material in accordance with the pol icy of the Company on materiality of related party transactions. The Policy on materiality of related party transactions and dealing with related party transactions as approved by the Board may be accessed on the Company's website www.kavveritelecoms.com Your Directors draw attention of the members to Note XX to the financial statement which sets out related party disclosures. CORPORATE SOCIAL RESPONSIBILITY: Your Company believes in addressing the needs of the underprivileged and is committed to serving them. Your Company aims to full fill its social responsibilities by being actively involved in a variety of public service projects serving underprivileged groups. Your Company has also made donations to religious institutions. RISK MANAGEMENT During the year, your Directors have constituted a Risk Management Committee which has been entrusted with the responsibility to assist the Board in (a) Overseeing and approving the Company's enterprise wide risk management framework; and (b) Overseeing that all the risks that the organization faces such as strategic, financial, credit, market, liquidity, security, property, IT, legal, regulatory, reputational and other risks have been identified and assessed and there is an adequate risk management infrastructure in place capable of addressing those risks. A Group Risk Management Policy was reviewed and approved by the Committee. The Company managers, monitors and reports on the principal risks and uncertainties that can impact its ability to achieve its strategic objectives. The Company's management systems, organisational structures, processes, standards, code of conduct and behaviours together form the Reliance Management System (RMS) that governs how the Group conducts the business of the Company and manages associated risks The Company has introduced several improvements to Integrated Enterprise Risk Management, Internal Controls Management and Assurance Frameworks and processes to drive a common integrated view of risks, optimal risk mitigation responses and efficient management of internal control and assurance activities. This integration is enabled by all three being fully aligned across Group wide Risk Management, Internal Control and Internal Audit methodologies and processes INTERNAL FINANCIAL CONTROLS The Company has in place adequate internal financial controls with reference to financial statements. During the year, such controls were tested and no reportable material weakness in the design or operation were observed. DIRECTORS AND KEY MANAGERIAL PERSONNEL The details of programmes for familiarisation of Independent Directors with the Company, their roles, rights, responsibilities in the Company, nature of the industry in which the Company operates, business model of the Company and related matters are put up on the website of the Company at www.kaweritelecoms.com The following policies of the Company are attached herewith marked as Annexure IIIA and Annexure 1MB: a) Policy for selection of Directors and determining Directors independence; and b) Remuneration Policy for Directors, Key Managerial Personnel and other employees. EMPLOYEES' STOCK OPTION SCHEME The Human Resources, Nomination and Remuneration Committee of the Board of Directors of the Company, inter alia, administers and monitors the Employees' Stock Option Scheme of the Company in accordance with the applicable SEBI Guidelines. The applicable disclosures as stipulated under the SEBI Guidelines as on March 31,2015 (cumulative position) with regard to the Employees' Stock Option Scheme (ESOS) are provided in Annexure IV to this Report. The issue of equity shares pursuant to exercise of options does not affect the Statement of Profit and Loss of the Company, as the exercise is made at the market price prevailing as on the date of the grant plus taxes as applicable. Voting rights on the shares issued to employees under the ESOS are either exercised by them directly or through their appointed proxy. AUDITORS AND AUDITORS' REPORT Statutory Auditors: M/s. P. Murali & Co, Chartered Accountants, Statutory Auditors of the Company, hold office till the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment. They have confirmed their eligibility to the effect that their re-appointment, if made, would be within the prescribed limits under the Act and that they are not disqualified for re-appointment. The Notes on financial statement referred to in the Auditors' Report are self-explanatory and do not call for any further comments. The Auditors' Report does not contain any qualification, reservation or adverse remark. Secretarial Auditor The Board has appointed M/s. Pratap Satla and Associates, at H.No. 6-3-1238/15/1, Flat No. 301, 3rd Floor, Elite Heights, Somajiguda, Hyderabad, 500 082 Practising Company Secretary, to conduct Secretarial Audit for the financial year 2014-15. The Secretarial Audit Report for the financial year ended March 31, 2015 is annexed herewith marked as Annexure V to this Report. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark DISCLOSURES: Audit Committee J^he Audit Committee comprises Independent & Executive Directors namely Shri L.R.Venugopal (Chairman), Mr. S.Shankaranarayan and Shri C.Shivakumar Reddy as other members. All the recommendations made by the Audit Committee were accepted by the Board. Vigil Mechanism The Vigil Mechanism of the Company, which also incorporates a whistle blower policy in terms of the Listing Agreement, includes an Ethics & Compliance Task Force comprising senior executives of the Company. Protected disclosures can be made by a whistle blower through an e-mail, or dedicated telephone line or a letter to the Task Force or to the Chairman of the Audit Committee. The Policy on vigil mechanism and whistle blower policy may be accessed on the Company's website at www.kaweritelecoms.com Meetings of the Board Five Meetings of the Board of Directors were held during the year. For further details, please refer report on Corporate Governance on page no. xxx of this Annual Report. PARTICULRS OF LOANS GIVEN.INVESTMENTS MADE. GUARANTEES GIVEN AND SECURITIES PROVIDED Particulars of loans given, investments made, guarantees given and securities provided along with the purpose for which the loan or guarantee or security is proposed to be utilized by the recipient are provided in the stand alone financial statement CONSERVATION OF ENERGY. TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUT GO The particulars relating to conservation of energy, technology absorption, foreign exchange earnings and outgo, as required to be disclosed under the Act, are provided in Annexure VI to this Report. EXTRACT OF ANNUAL RETURN Extract of Annual Return of the Company is annexed herewith as Annexure VII to this Report. PARTICULARS OF EMPLOYEES AND RELATED DISCI OSITRPg. In terms of the provisions of Section 197(12) of the Act read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing the names and other particulars of the employees drawing remuneration in excess of the limits set out in the said rules are provided in the Annual Report. Disclosures pertaining to remuneration and other details as required under Section 197( 12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are provided in the Annual Report. Having regard to the provisions of the first proviso to Section 136( 1) of the Act and as advised, the Annual Report excluding the aforesaid information is being sent to the members of the Company. The said information is available for inspection at the registered office of the Company during working hours and any member interested in obtaining such information may write to the Company Secretary and the same will be furnished on request. The full Annual Report including the aforesaid information is being sent electronically to all those members who have registered their email addresses and is available on the Company's website GENERAL Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review: 1. Details relating to deposits covered under Chapter V of the Act. 2. Issue of equity shares with differential rights as to dividend, voting or otherwise. 3. Issue of shares (including sweat equity shares) to employees of the Company under any scheme save and except ESOS referred to in this Report. 4. Neither the Managing Director nor the Whole-time Directors of the Company receive any remuneration or commission from any of its subsidiaries. 5. No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Company's operations in future. Your Directors further state that during the year under review, there were no cases filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressel) Act, 2013. ACKNOWLEDGEMENT Your Directors would like to express their since re appreciation for the assistance and co-operation received from the financial institutions, banks, Government authorities, customers, vendors and members during the year under review. Your Directors also wish to place on record their deep sense of appreciation for the committed services by the Company's executives, staff and workers. For and on behalf of the Board of Directors For and on behalf of the Board C. SHIVAKUMAR REDDY Chairman and Managing Director Place : Bangalore Date: 06-09-2015 |