DIRECTORS' REPORT TO THE MEMBERS OF LCC INFOTECH LIMITED, Your Board of directors is pleased to present 29th Annual Report of the Company and Audited Financial Result for the Financial Year ended on 31st March 2015 along with Management Discussion & Analysis Report in terms of Clause-49 of the Listing Agreement with Stock Exchanges. 2. Dividend: Board of Directors of your company expresses their inability to declare dividend for the current financial year as company has incurred net loss of Rs. (11.93) Lakhs due to high competition in IT & software training market. However your company is actively working on this segment that seems to have tremendous growth prospects and profitability in the coming years. 3. Share Capital: The paid up Equity Share Capital was Rs.2531.87 lakh at the end of financial year on 31.03.2015. The company has not issued fresh shares or any convertible instruments during the year under review. 4. Economic Scenario and Outlook: With India moving towards becoming a super power in the years to come, one of the key contributors to this growth will be a large pool of skilled and talented individuals. As seen recently that a large part of this pool is coming from smaller towns and cities across the country and this is a strong area of operation for your company. The job market is slow in the bigger cities however the smaller businesses in the semi urban part of the country are still working on automating their business processes and increasing efficiency. Your company is actively working on this segment that seems to have tremendous growth prospects in the coming years. 5. Management Discussion and Analysis: A separate report on the Management Discussion and Analysis is attached as a part of the Annual Report 6. Corporate Social Responsibility: The provisions of Companies Act, 2013 regarding Corporate Social Responsibility are not attracted to the company however the Company has been pursuing it as part of its corporate philosophy. As part of its initiatives under "Corporate Social Responsibility (CSR), the Company has undertaken projects in the areas of Education and skill training. These projects are in accordance with item no. (II) and (X) of Schedule VII of the Companies Act, 2013. Your Company has been Providing quality Education and skill training to the students during the year. During the year company has introduced scholarship scheme in the name of UDDAN with aided education initiatives like smart 2014-2015 classes and interactive kiosks at rural areas to keep in pace with modern methods of learning. Further Specific support was provided to revive education for SC/ST/OBC/BPL category students under the Public Private Partnership Schemes with Ministry of Labour and Employment. Skill development training programmes have been imparted to unemployed youth in partnership with various Govt. Department which helped approx 1000 youth to get job placements in various industry. 7. Business Risk Management: In accordance with clause 49 of the listing agreement in respect to the risk assessment and minimization Procedures, the Board formally adopted steps for monitoring the risk management plan for the company. Now the Company has a healthy Business Risk Management structure to identify, evaluate business risks and opportunities. This structure seeks to create transparency, minimize adverse impact on the business objectives and enhance the Company's competitive advantage. The business risk framework defines the risk management approach across the enterprise at various levels including documentation and reporting. The structure has different risk models which help in identifying risks trend, associated with the business. 8. Change in the nature of business, if any: There is no change in the nature of the business of the Company 9. Details of significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and the company's operations in future: There were no significant and material orders passed by regulators or courts or tribunals impacting the going concern status and the Company's operations in future. 10. Material changes and commitments, if any, affecting the financial position of the company which have occurred between the end of the financial year of the company to which the financial statements relate and the date of the report: There were no material changes and commitments affecting the financial position of the Company occurring between March 31, 2015 and the date of this Report of the Directors. 11. Internal Control System and their Adequacy: The Company has an Internal Control System, Commensurate with the size, scale of business to safeguard and protect the company from unauthorized use and disposition of its assets. The Company is following all the applicable Accounting Standards for properly maintaining the books of accounts and reporting financial statements. The internal audit and internal control procedures adopted in LCC are adequate and commensurate with the size and the complexity of the business. All major expenses are controlled and businesses are monitored so that the actual spending is in accordance with the budget. A well-defined organizational structure, strong internal controls, defined authority matrix and documented policy guidelines ensure compliance with internal policies and applicable laws and regulations, efficiency of operations and protection of resources. 12. Vigil Mechanism / Whistle Blower Policy: A vigil mechanism policy has been adopted by the company to ensure the privacy while dealing with concerns and also to ensure that the activities of the Company and its employees are conducted in a fair and transparent manner. The details of the Policy is explained in the Corporate Governance Report and also posted on the website of the Company 13. Subsidiary Company: Your company has only one Indian subsidiary named eLCC Info-Com Limited. Your parent company is holding 99.98% control over the subsidiary company. Your company is engaged in the business of computer training, computer education, training in English etc. Pursuant to first provisions of section 129 (3) read with rule 5 of Companies (Accounts) Rules, 2014) Statement containing salient features of the financial statement of subsidiaries/associate companies/joint ventures is enclosed herein report as "Annexure- III" 14. Directors, Key Managerial Personnel and Committees: The Members of the Company at its 28th meeting held on 24th September 2014 has appointed its existing Independent directors viz. Mr. Kamaljit Singh (DIN-00552381), Mr. Praveen Jain (00714340) and Mr. G.K.Gupta (0075668) as Independent Directors for consecutive period of 5 years w.e.f. from April 24, 2014 under the Companies Act, 2013. All Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and Clause 49 of the Listing Agreement. Mr. Sidharth Lakhotia (DIN-00057511) retires by rotation and being eligible offers himself for re-appointment under section 152(6) of Companies Act 2013. Key Managerial Personnel The following three persons were formally appointed as Key Managerial Personnel of the Company in compliance with the provisions of Section 203 of the Companies Act, 2013: a) Mrs. Kirti Lakhotia, Managing Director b) Sidharth Lakhotia Director & CEO c) Mr. Pratik Lakhotia, Chief Financial Officer (CFO) d) Mr. P. N. Rouchoudhury, Company Secretary 14.1 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. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report. 14.2 Remuneration Policy: 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. The Remuneration Policy is stated in the Corporate Governance Report. 14.3 Meeting: During the year 5 board meetings as well 4 audit committee meetings were held ,the details of which are duly given in the Corporate Governance Report. The Minimum gap between two board meetings was within the period provided in Companies Act 2013 and in accordance with listing agreement. 14.4. Audit Committee: The committee consists of three directors all being independent directors. The details are as under: i) Mr. G.K.Gupta - Chairman - Non Executive and Independent director ii) Mr. Kamaljit Singh - Member - Non Executive and Independent director iii) Mr. Praveen jain - Member - Non Executive and Independent director 14.5 Nomination and Remuneration Committee: The committee consists of three directors all being independent directors. The details are as under: i) Mr. G.K.Gupta - Chairman - Non Executive and Independent director ii) Mr. Kamaljit Singh - Member - Non Executive and Independent director iii) Mr. Praveen jain - Member - Non Executive and Independent director 15. Directors' Responsibility Statement: To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statements in terms of Section 134(3)(c) of the Companies Act, 2013: a) that in the preparation of the annual financial statements for the year ended March 31, 2015, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any; b) that such accounting policies as mentioned in Notes to the Financial Statements have been selected and applied consistently and judgment and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2015 and of the profit of the Company for the year ended on that date; c) that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; d) that the annual financial statements have been prepared on a going concern basis; e) that proper internal financial controls were in place and that the financial controls were adequate and were operating effectively. f) that systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively. 16. Related Party Transactions: All related party transactions entered into during the financial year were on an arm's length basis and in the ordinary course of the business of the Company. All related party transactions are placed before the Audit Committee of the Board of Directors for its approval. Prior omnibus approval of the Audit Committee of the Board of Directors is obtained for the transactions. The policy on Related Party Transactions as approved by the Board has been hosted on website of company. The details of transaction annexed in Annexure IV. 17. Auditors: 17.1 Statutory Auditors: Pursuant to the provisions of Section 139 (2) and 142(1) of the Companies Act, 2013 and the rule made there under and pursuant to the recommendation of Audit Committee "M/s Budhiya & Co (Firm registration No : 320163E ), Chartered Accountants, has been appointed as statutory Auditor of the company to hold office from conclusion of this Annual General Meeting till conclusion of next Annual General Meeting at such remuneration as may be determined by the Board of Directors of the Company. 17.2 Secretarial Auditors: 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 Mrs. Riddhi Kanodia, Company Secretaries with CP No. 12778, as Secretarial Auditors of the Company to undertake the secretarial audit of the company for the financial Year 201415. The Secretarial Audit Report is annexed herewith as 'Annexure -I'. 17.3 Internal Auditors: Jhumur Kumar Mukhopadhyay (Membership- 055993)Chartered Accountants performs the duties of internal auditors of the company and their report is reviewed by the audit committee from time to time. 18. Corporate Governance: As per Clause 49 of the Listing Agreement with the Stock Exchanges, a separate section on corporate governance practices followed by the Company, together with a certificate from the Company's Secretarial Auditor confirming compliance forms an integral part of this Report. 19. Extract of Annual Return: Eextract of the Annual Return in form MGT 9 is annexed herewith as "Annexure-II" which is forming part of Annual return. 20. Loans, guarantees and investments: The Company has not given any guarantee for loans taken by others from bank or financial institutions. The loans and advances made by the Company are detailed in Note No. 10 of the Annual finaincial statements. 21. Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo: There are no activities relating to conservation of energy and technology absorption and also there were no foreign exchange earnings or outgo. 22. Disclosure on Managerial Remuneration & Particulars of Employees: Details of Remuneration as required under Section 197(12) read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 a) Ratio of the remuneration of each director to the median remuneration of the employees of the Company for the financial year ended 31st March 2015: b) There is no increase in remuneration of any Director, Chief Executive Officer, Company Secretary or Manager in the financial year ended 31st March 2015 c) The number of permanent employees on the rolls of the company is 27 d) There is no increase in remuneration of employee and KMP during the year under report as company reported net loss due to economic slowdown in IT sector. e) The details of variations in the market capitalization of the Company, Price Earnings Ratio at the end of the current financial year and previous financial year are as follows: The Market Capitalization of the company increased at the end of the current financial year under report as compare to market capitalization of last year ended on 31.03.2014. The market capitalization increased by 100% from Rs. 189.89 lacs as at March 31, 2014 to Rs. 397.78 lacs as at March 31, 2015. The Price Earnings Ratio as at March 31, 2015 was (-) 31.91 as compared to the Price-Earnings Ratio as at March 31, 2014 which was (-)13.16 The equity shares of the Company closed at Rs. 0.30/- on National Stock Exchange of India Ltd. on March 31, 2015 representing an increase of 100% since the last financial year. Due to some penal reason trading has been suspended on Bombay Stock Exchange. No employee fall under the particulars of the employees who are covered by the provisions contained in Rule 5(2) and rule 5(3) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. The remuneration paid to all Key management Personnel was in accordance with remuneration policy adopted by the company. f) No variable component in any kind/form was availed by the directors during the financial year ended March 31, 2015. g) No employee has received remuneration higher than the highest paid director during the financial year ended March 31, 2015. h) It is hereby affirmed that the remuneration paid during the year ended on 31.03.2015 is as per the Remuneration Policy of the Company. 23. Consolidated Financial Statements: The Consolidated Financial Statements of the Company prepared in accordance with relevant Accounting Standards (AS) issued by the Institute of Chartered Accountants of India form part of this Annual Report. 24. Disclosures under Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013: Your Company has constituted an Internal Complaints Committees in accordance with the requirements under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 which ensures implementation and compliance with the Law as well as the policy at every unit. There were no cases/ complaints reported in this regard during the year 201415 25. Acknowledgements: We please to thank various Departments of central and state Government, Organizations and Agencies for the continued help and co-operation extended by them. We also gratefully acknowledge all stakeholders of the Company viz. members, shareholders, banks and other concerned associate for the excellent support received from them during the year. We also sincerely thank all the employees of the Company for their unstinted commitment and continued contribution to the Company. |