DIRECTORS' REPORT Dear Members, We, the Directors of Just Dial Limited, (the "Company") are delighted to present 21st Annual Report along with the audited accounts of the Company for the year ended March 31, 2015 (the "Report"). 2. STATE OF COMPANY'S AFFAIRS, BUSINESS OVERVIEW AND FUTURE OUTLOOK The revenue from the operation has increased by about 27.86°% on accrual basis to Rs. 5,897.98 million in the year ended March 31, 2015 as compared to Rs. 4,612.93 million in the year ended March 31, 2014. The Company's earnings before interest, depreciation and taxes (EBITDA) margin stands at 33.61%% of the total income in the year ended March 31, 2015. The profit before tax (PFJT) of the current year increased by 15.58°% to Rs. 1,905.41 million as compared to Rs. 1,648.56 million for the preceding financial year. The Company's profit aftertax (PAT) of the currentyear increased by 15.16°-6 to Rs. 1,388.90 million as compared to Rs. 1,206.08 million for the preceding financial year. During the year there were no changes in the nature of business of the Company, the detailed discussion on Company's overview and future outlook has been given in the section on 'Management Discussion and Analysis' (MDA). 3. DIVIDEND In continuation of earlier trend of declaring cash dividend, your Directors have recommended a dividend of Rs. 2/-per equity share for the financial year ended March 31, 2015 for the approval of shareholders at the ensuing Annual General Meeting. The total outflow for the year on account of dividend and tax thereupon will be Rs. 169.69 million (inclusive of tax of Rs. 28.70 million) compared to Rs. 164.14 million (inclusive of tax of Rs. 23.84 million) for preceding financial year. 4. TRANSFER TO RESERVE To signify and affirm the financial strength, the Company has transferred Rs. 138.89 million to its general reserve for the financial year ended on March 31, 2015, as compared to Rs. 120.61 million for preceding financial year. 5. DEPOSIT During the year under review, the Company has not accepted any deposits within the meaning of Chapter V of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014, hence there is no details to disclose as required under Rule 8 (5) (v) and (vi) of the Companies (Accounts) Rules, 2014. 6. SUBSIDIARY COMPANY The Company did not have any subsidiary, joint venture or associate company at the beginning of the financial year, however, Just Dial Inc., USA has become a subsidiary of the Company w.e.f. October 1, 2014. 7. CONSOLIDATED FINANCIAL STATEMENT The audited consolidated financial statement, pursuant to Section 129 of the Companies Act, 2013 and Accounting Standard (AS) 21 on Consolidated Financial Statements has been provided in the Annual Report. A statement containing salient features of the financial statement of subsidiary in accordance with the first proviso to sub-section (3) of Section 129 read with Rule 5 of Companies (Accounts) Rules, 2014 in the prescribed form AOC - 1 is annexed as Annexure - 1 of this report. • The authorised share capital of the Company is Rs. 1,01,20,00,000/- divided in to 10,00,00,000 Equity Shares of face value of Rs. 10/- each and 12,00,000 Preference Shares of Rs. 10/- each. There has been no change in the authorised share capital of the Company, during the year under review. • The paid-up share capital of the Company has increased from Rs. 701.51 million to Rs. 704.93 million, during year under review, pursuant to allotment of 3,42,195 Equity Shares of Rs. 10/- each to the employees of the Company upon exercise of options granted to them under the ESOP Scheme, 2010. • The Company has not issued any equity shares with differential rights as to dividend, voting or otherwise, during the year under review. • The Company has not issued any sweat equity shares to its Directors or employees, during the year under review. 9. AWARDS & RECOGNITIONS The Company has been awarded a "Plaque" for Excellence in Financial Reporting forthe financial year 2013-14 by the Institute of Chartered Accountants of India. 10. DIRECTORS AND KEY MANAGERIAL PERSONS The Company has 9(nine) Directors on the Board, of which 3(three) are Independent Directors, 3(three) are Non-executive Directors and 3(three) are Executive Directors including our Managing Director as on March 31, 2015. a. Appointments/resignations from the board of directors During the year under review, the members have approved the following appointments on the Board of the Company: • Mr. B. Anand, Mr. Malcolm Monteiro and Mr. Sanjay Bahadur, as Independent Directors, who are not liable to retire by rotation. • Mrs. Anita Mani, as a Woman Director, in pursuance of the provisions of Section 149 of the Companies Act, 2013 and Clause 49 of the Listing Agreement. • Mr. Ramani Iyer, as a Whole-time Director, w.e.f. August 1, 2014. b. Directors Retiring by Rotation I n terms of Section 152 of the Companies Act, 2013, Mr. V. Krishnan having the longest term in office shall, retire at the ensuing Annual General Meeting and being eligible for re-appointment, offers himself for re-appointment. The information as required to be disclosed under Clause 49 of the Listing Agreement in case of re-appointment of directors will be provided in the notice of ensuing Annual General Meeting. c. Independent Directors The Company has received declarations/confirmations from the following Independent Directors of the Company confirming that they meet the criteria of independence as prescribed under Section 149(6) of the Companies Act, 2013 and Clause 49 of the Listing Agreement. 1. Mr. B. Anand; 2. Mr. Malcolm Monteiro; and 3. Mr. Sanjay Bahadur Pursuant to Clause 49 of Listing Agreement the Company has framed a familiarisation programme for its Independent Directors, the details of the same are available at Company's Website at <http://cms.justdial.com/investor-relations/policies>. d. Appointments/Resignations of the Key Managerial Personnel Mr. V. S. S. Mani, Managing Director and Chief Executive Officer;Mr. V. Krishnan, Whole-time Director, Mr. Ramkumar Krishnamachari, Chief Financial Officer, and Mr. Sachin Jain, Company Secretary of the Company are the key managerial personnel as per the provisions of the Companies Act, 2013 and were already in office before commencement of the Companies Act, 2013. Mr. Ramani Iyer, was appointed as Whole-time Director of the Company w.e.f. August 1, 2014 and being considered as key managerial person as per the provisions of the Companies Act, 2013 from that date. None of the key managerial personnel has resigned during the year under review. 11. NUMBER OF MEETINGS OF BOARD OF DIRECTORS 6 (Six) meetings of the Board of Directors of the Company were held during the year under review. Detailed information of the meetings of the Board is included in the Report on Corporate Governance, which forms part of this Report. 12. DIRECTORS' RESPONSIBILITY STATEMENT Pursuant to the requirement under Section 134 (3) (c) of the Companies Act, 2013, the Directors' hereby confirm and state that: (a) i n 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 end of 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. 13. POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION The Company has in place a policy the 'Nomination and Remuneration Policy' in respect of appointment and remuneration of Directors, key managerial persons and senior managerial persons detailing the criteria for determining qualifications, positive attributes, independence of a Director and other matters. The policy is annexed as Annexure - 2 and forms part of this Report. The Nomination and Remuneration Policy is available at <http://> cms.justdial.com/investor-relations/policies 14. PERFORMANCE EVALUATION OF THE BOARD The Company has engaged a consultant for advising on the criteria and process for evaluation of its Board, its Committees and individual Directors and a structured questionnaire was prepared after taking into consideration inputs received from the Directors, covering various aspects of the Board's functioning such as adequacy of the composition of the Board and its Committees, Board culture, execution and performance of specific duties, obligations and governance. The Nomination and Remuneration Committee of the Company has laid down the criteria for performance evaluation of the Board, its Committees and individual directors including independent Directors. Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board has carried out the annual performance evaluation of its own performance, the Individual Directors including Independent Directors and its Committees on parameters such as level of engagement and contribution, independence of judgment, safeguarding the interest of the Company and its minority shareholders etc. 15. COMMITTEES OF THE BOARD The Company has several committees which have been established as a part of the best corporate governance practices and are in compliance with the requirements of the relevant provisions of applicable laws and statutes: The Committees and their Composition are as follows: Audit Committee 1. Mr. B. Anand, Chairman 2. Mr. Sanjay Bahadur, Member 3. Mr. Malcolm Monteiro, Member Nomination and Remuneration Committee 1. Mr. Malcolm Monteiro, Chairman 2. Mr. Sanjay Bahadur, Member 3. Mr. Ravi Adusumalli, Member Stakeholders Relationship Committee 1. Mr. Sanjay Bahadur, Chairman 2. Mr. V. S. S. Mani, Member 3. Mr. Ramani Iyer, Member 4. Mr. Ramkumar Krishnamachari, Member 5. Mr. Sachin Jain, Member Corporate Social Responsibility Committee 1. Mr. B. Anand, Chairman 2. Mr. V. S. S. Mani, Member 3. Mr. V. Krishnan, Member Risk Assessment and Management Committee 1. Mr. B. Anand, Chairman 2. Mr. Sanjay Bahadur, Member 3. Mr. V. Krishnan, Member 4. Mr. Ramkumar Krishnamachari, Member CORPORATE SOCIAL RESPONSIBILITY( CSR) I n compliance with Section 135 of the Companies Act, 2013 read with the Companies (Corporate Social Responsibility Policy) Rules, 2014, the Company has formed Corporate Social Responsibility (CSR) Committee and statutory disclosures with respect to the CSR Committee and an Annual Report on CSR Activities forms part of this Report as Annexure - 3. The Corporate Social Responsibility (CSR) Policy is available at <http://cms.justdial.com/investor-relations/policies> 17. MANAGEMENT DISCUSSION & ANALYSIS REPORT The Management Discussion and Analysis Report for the year under review as stipulated under Clause 49 of the listing agreement is presented in a separate section and forming part of this Annual Report. 18. CORPORATE GOVERNANCE Your Directors act as trustees of the shareholders and are committed to achieve the highest standards of corporate governance and adhere to various corporate governance requirements. The Report on Corporate Governance as stipulated under Clause 49 of the Listing Agreement forms an integral part of this Report. The report on Corporate Governance also contains certain disclosures required under the Companies Act, 2013. A certificate from V. B. Kondalkar & Associates, Practicing Company Secretary, conforming compliance to the conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement, is annexed to this Report. 19. DETAILS OF ESTABLISHMENT OF VIGIL MECHANISM The Company has implemented a whistle blower policy pursuant to which whistle blowers can raise concern in relation to the matters covered under the policy. Protected disclosures can be made by a whistle blower through an e-mail to the ethics officer and also have direct access to the Chairman of the Audit Committee, in exceptional cases. The functioning of the Vigil Mechanism is reviewed by the Audit Committee from time to time. The whistle blower policy is available at the link: <http://> cms.justdial.com/investor-relations/policies. 20. STATEMENT ON RISK MANAGEMENT POLICY 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 organisation faces such as strategic, financial, market, security, operational, personnel, IT, legal, regulatory, reputational and other risks. The Risk Management Committee have identified and assessed all the material risks that may be faced by the Company and ensured proper policy, procedure and adequate infrastructure are in place for monitoring, mitigating and reporting risks on a periodical basis. 21. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS During the year under review, the Company has not given any loan or provided any Guarantees or security to any person or entity mentioned in Section 186 of the Companies Act, 2013. However, the Company has purchased 100°% holding of Just Dial Inc. USA, for a consideration of Rs. 44,67,964/- and invested the surplus funds available in the units of mutual funds, tax free bonds and debt securities. The details of which are provided in the standalone financial statement (Please refer note no. 13 of the standalone financial statements). 22. PARTICULARS OF CONTRACTS OR 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 policy 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 is available at the link: <http://cms.justdial.com/investor-relations/> policies. The particulars of contracts or arrangements with related parties is attached in prescribed form AOC-2 as Annexure - 4 and forms part of this report. 23. INTERNAL FINANCIAL CONTROL SYSTEM The Company has in place adequate standards, processes and structures to implement 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 was observed. 24. LISTING The Equity Shares of the Company are listed on National Stock Exchange of India Limited, BSE Limited and Metropolitan Stock Exchange of India Limited. 25. AUDITORS (a) Statutory Auditor M/s. S. R. Batliboi & Associates LLP, Chartered Accountants, Mumbai, has been appointed as Statutory Auditors of the Company for a period of 5 years from the conclusion of 20th Annual General Meeting till the conclusion of the 25th Annual General Meeting of the Company, subject to ratification by the members annually. The Board of Directors of your Company has recommended to ratify the appointment of M/s. S. R. Batliboi & Associates LLP, Chartered Accountants, Mumbai, to hold the office as Statutory Auditors of the Company from the ensuing Annual General Meeting till the conclusion of next Annual General Meeting of the Company on such remuneration as may be mutually decided by the Board of Directors or committee thereof and Statutory Auditors. The Statutory audit report does not contain any qualification, reservation or adverse remark or disclaimer, except Clause (iv) and Clause (vii) (b) of the annexure to auditor's report. The comments by auditors in Clause (iv) of the annexure to auditor's report and note 27(B) to the financial statements in relation to Clause (vii) (b) are both self-explanatory and do not call for any further comments. (b) Secretarial Auditor The Board has appointed V. B. Kondalkar & Associates, Practicing 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 - 5 to this Report. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark. 26. MATERIAL CHANGES AND COMMITMENTS There were no material changes and commitments, affecting the financial position of the Company which has occurred between the end of the financial year of the Company, i.e. March 31, 2015 and the date of Directors' Report, i.e. May 29, 2015. 27. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS During the year under review there were no significant and material orders passed by the regulators/courts/tribunals, which may impact the going concern status and the Company's operations in future. 28. PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES (A) The statement containing particulars of employees as required under Section 197(12) of the Companies Act, 2013 read with Rules 5(2) and (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, forms part of this report as Annexure - 6. (B) The ratio of the remuneration of each director to the median employee's remuneration and other details in terms of sub-section 12 of Section 197 of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are forming part of this report as Annexure - 7. (C) Neither the Managing Director nor Whole-time Directors of the Company receive any remuneration or commission from its subsidiary. 29. TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND The Company does not have any unpaid/unclaimed amount which is required to be transferred, under the provisions of Companies Act, 2013 into the Investor Education and Protection Fund (IEPF) of the Government of India, However, following are the outstanding amount as on March 31, 2015 with the Company: A. unclaimed and unpaid dividend of Rs. 16,08,036/- B. Unclaimed share application money pending for refund of Rs. 7,52,461/-. The Company will transfer the unclaimed amount, if any, lying in aforesaid accounts on completion of Seven years from the date it become due for refund. 30. CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION The disclosures to be made under Section 134 (3) (m) of the Companies Act, 2013 read with Rule 8 (3) of the Companies (Accounts) Rules, 2014 by the Company are as under: (A) Conservation of Energy (i) The steps taken or impact on conservation of energy: Though business operation of the Company is not energy-intensive, the Company, being a responsible corporate citizen, makes conscious efforts to reduce its energy consumption. Some of the measures undertaken by the Company on a continuous basis, including during the year, are listed below: a) Use of LED Lights at new office space as well as at renovated office space. b) Rationalisation of usage of electrical equipment- air-conditioning system, office illumination, beverage dispensers, desktops. c) Regular monitoring of temperature inside the buildings and controlling the air-conditioning system. d) Planned Preventive Maintenance schedule put in place for electro-mechanical equipment. e) Usage of energy efficient illumination fixtures. (ii) Steps taken by the Company for utilizing alternate source of energy. The business operation of the Company are not energy-intensive, hence apart from steps mentioned above to conserve energy, there is no requirement to utilise the alternate source of energy. (iii) The capital investment on energy conservation equipment: There is no capital investment on energy conservation equipments during the year under review. (B) Technology Absorption (i) The efforts made towards technology absorption: The Company is itself operates into the dynamic information technology space. The Company has a sizeable team of Information technology to evaluate technology developments on a continuous basis and keep the organisation updated. The Company also has an in-house research and development department to cater the requirements of existing business as well as new products, services, designs, frameworks, processes and methodologies. This allows the Company to serve its users in innovated ways and provide satisfaction and convenience to the users and customers. (ii) The benefits derived : The Company emphasizes the investment in technology development and has immensely benefited from it. The Company has developed most of its softwares required for operations as well as its apps, in-house .It has saved a sizeable amount of funds, ensured data protection and also helps to understand in better way the requirements of users and customers. (iii) The Company has not imported any technology during last three years from the beginning of the financial year. (iv) The Company has incurred an expenditure to the extent of Rs. 66.5 million on Research and Development during the year under review. (C) Foreign Exchange Earnings and Outgo The Company has not earned any foreign exchange during the financial year under review. The foreign exchange outgo during the year is as under: 31. EXTRACT OF THE ANNUAL RETURN Pursuant to sub-section 3(a) of Section 134 and sub-section (3) of Section 92 of the Companies Act, 2013 read with Rule 12 of the Companies (Management and Administration) Rules, 2014 the extracts of the Annual Return as at March 31, 2015 forms part of this report as Annexure-8. 32. PREVENTION OF SEXUAL HARASSMENT Your Company is fully committed to uphold and maintain the dignity of women working in the Company and has zero tolerance towards any actions which may fall under the ambit of sexual harassment at work place. The Company has not received any complaint during the year under review. The policy framed pursuant to the legislation 'Prevention, Prohibition and Redressal of Sexual Harassment of Women at Workplace Act, 2013 read with Rules framed there under may be viewed at <http://cms.justdial.com/investor-relations/policies>. 33. EMPLOYEES' STOCK OPTION SCHEME The Stock Option Schemes enable the Company to hire and retain the best talent for its senior management and key positions. The Nomination and Remuneration Committee of the Board of Directors of the Company, inter alia, administers and monitors the Employees' Stock Option Schemes in accordance with the applicable SEBI Guidelines. The Company has granted 5,90,112 options under ESOP schemes during the year under review. The applicable disclosures as stipulated under the SEBI Guidelines as on March 31, 2015 (cumulative position) with regard to the Just Dial Private Limited Employee Stock Option Scheme, 2010, Just Dial Limited Employee Stock Option Scheme, 2013 and Just Dial Limited Employee Stock Option Scheme, 2014 are provided in Annexure-9, Annexure-10 and Annexure-11 to this Report. The Company has received a certificate from the Auditors of the Company that the Schemes have been implemented in accordance with the SEBI Guidelines and the resolution passed by the members. The certificate would be placed at the Annual General Meeting for inspection by members. Voting rights on the shares issued to employees under the ESOS are either exercised by them directly or through their appointed proxy. 34. ACKNOWLEDGEMENTS Your Directors take the opportunity to express our deep sense of gratitude to all users, vendors, Government and nongovernmental agencies and bankers for their continued support in Company's growth and look forward to their continued support in the future. Your Directors would also like to express their gratitude to the shareholders for reposing unstinted trust and confidence in the management of the Company. For and on behalf of the Board Just Dial Limited V. S. S. Mani Managing Director and Chief Executive Officer (DIN-00202052) Ramani Iyer Whole-time Director (DIN-00033559) Registered Office CIN: L74140MH1993PLC150054 501/B, 5th Floor Palm Court, Building - M, New Link Road, Malad (West), Mumbai - 400 064. Place: Mumbai Date: May 29, 2015 |