AFFLUENCE

DIRECTORS’ REPORT FOR THE FINANCIAL YEAR 2015-2016

To

The Members

Your Directors have pleasure in presenting the 25th Annual Report on the business and operations of the Company together with the Audited Statement of Accounts for the year ended 31st March 2016

Financial Highlights of the Company for the year under review are as under

                                (Rupees in Lakhs)

State of the Company’s Affairs and Future Outlook

Highlights of the Company’s performance for the year under review are as under

v  Revenue from operations decreased 30.10 percent to Rs 4395.72 lakhs due to sharp drop exports to 1049.33 lakhs

v  Profit before taxes decreased by 51.71 percent to Rs.452.62  lakhs

v  Profit after taxes (Net Profit) decreased by 53.07 percent to Rs.302.27 lakhs

The Commercial Industrial division of the Company posted more or less stagnant  growth . 

The Retail Division experienced negative growth mainly due to sharp drop in exports which is due to low cost grey market substitutes being available for overseas customers. Inland Retail division sales remained more or less stagnant  due to sluggish growth in the brick and mortar stores under lifestyle, fashion and consumer electronic segments. We expect the situation to remain stagnant in the coming couple of years .

Earnings per share( EPS) was  Rs.12.69 per share for the year under review as against Rs. 27.04 in the previous year.

No material changes and commitments have occurred after the close of the year till the date of this Report, which affect the financial position of the Company.

Future outlook for the Company is positive on account of the vision of your Company to continue and strengthen growth in coming years.

The Company tried to explore large projects by forming separate and dedicated  marketing  team in the Commercial Industrial Division  which did not meet with desired success.

 Diversification into floating solar projects has started yielding goods results with the Company bagging the prestigious work order from Kerala State Electricity Board for design, construction, installation, commissioning and handover of 500 KW Floating Solar Power Project in Banasurasagar Dam, Wayanad, Kerala. Work is going in full swing in this project and the Company expects more orders to be received in this division.

DIVIDEND

The Company has, during the financial year 2015-16, paid an interim dividend of Rs. 2.50 per share (ie 25 percent dividend). This has resulted in a cash outflow of Rs.59.57 lakhs towards dividend payment and Rs.12.13 lakhs towards Dividend Distribution Tax. Your Directors recommend to ratify this interim dividend as the final dividend  for the FY 2015-16.

As on 31st March 2016, an amount of Rs. 521,915/- is lying in the Unpaid Dividend Account with State Bank of India towards the dividend declared and paid but not claimed for the financial years from 2008-09 to 2014-15 as per details given in the notes on Account . Those Shareholders who have not encashed their dividend warrants are requested to immediately approach the corporate office of the Company for revalidation/reissue of the dividend warrants after which the warrants may be presented for payment. The unclaimed dividend up to and including the year 2007-08 has been transferred to the Investor Education and Protection Fund (the Fund) set up by the Government of India and no payments shall be made in respect of any such claims by the Fund.

The Dividend payout for the year has been formulated keeping in mind the Company’s ability to pay sustainable dividends vis a vis the requirement of funds for running business and the long term objectives which are to be met by internal cash accruals.

Amounts transferred to Reserves

The Board of Directors have decided to transfer an amount of Rs. 30.40 lakhs to General Reserve.

Changes in Share Capital and Reserves

During the year under review, there has been no change in the paid up share capital of the Company. The Capital and Reserves of the Company as on 31st  March 2016 stood at Rs. 3084.12 lakhs as against that of Rs. 2853.44 lakhs as on the corresponding day of the previous year

GENERAL

Your Directors also 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

Ø  Disclosure regarding Issue of Equity Shares with differential rights as stated in Rule 4(4) of Companies (Share Capital and Debenture Rules, 2014) 

Ø  Details relating to deposits covered under Chapter V of the Companies Act, 2013

Ø  Disclosure regarding issue of Employee Stock Options as stated in Rule 12(9) of Companies (Share Capital and Debenture Rules, 2014) 

Ø  Disclosure regarding issue of Sweat Equity  Shares as specified in Rule 8 (13) of Companies (Share Capital and Debenture Rules, 2014) 

Ø  Receipt of Commission or Remuneration by the Managing Director nor the Whole-time Directors of the Company from subsidiaries, since the Company does not have any subsidiary.

Ø  No significant or material order which impact the going concern status and Company’s operations in future were passed by the Regulators or Courts or Tribunals.

Extract of Annual Return, in format MGT-9, for the financial year 2015-16 is annexed to the Board’s report as Annexure-B

CORPORATE GOVERNANCE

Provisions in the SEBI (Listing Obligation and Disclosure Requirement)Regulations, 2015 relating to report on  Corporate Governance are not mandatory to the Company since, as on 31st March 2016  the Company is not listed in any recognised stock exchange. However, keeping in view that the Company is planning to apply for listing, detailed report on Corporate Governance along with certificate on Corporate Governance from Statutory Auditors is forming part of this Report.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT (MDA)

The Management Discussion and Analysis Report for the year under review is forming part of this Report.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The details in respect of internal control systems and their adequacy are included in the Management Discussion and Analysis Report,  which forms part of this report.

DISCLOSURE AS PER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE(PREVENTION,PROHIBITION AND REDRESSAL) ACT, 2013

Your Company has 07 women employees in various cadres as on 31st March 2016. Your Company has zero tolerance towards sexual harassment at the work place. The Company has constituted an Internal Complaint Committee in line with the requirements of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. 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 Redressal) Act, 2013

DIRECTOR’S RESPONSIBILITY STATEMENT

Your Directors state that

(a)  In the preparation of annual accounts for the year ended March 31, 2016, the applicable accounting standards read with requirements set out under Schedule III to the Companies Act, 2013, have been followed and there are no material departures from the same;

(b)  The Directors have selected such accounting policies and have applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as on March 31, 2016 and of the profit of the Company for the year ended on that date;

(c)  The Directors have 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 fraud and other irregularities;

(d)  The Directors have prepared the annual accounts on a ‘going concern’ basis;

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

(f)     The Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

Details on Board Meetings held during the year under review

During Financial year 2015 -16, 5 meetings on Board of Directors were held on the following dates 30th May, 2015,13th August 2015, 14th November 2015, 12th February 2016 and 18 March 2016.

Attendance of Directors at each meeting of Board of Directors are as follows

Contracts and arrangements with related parties

All contracts/arrangements/transactions with related parties entered into by the Company during the financial year were in the ordinary course of business  and are on arm’s length. During the year, the Company had not entered into any contract/arrangement/transaction with related parties which could be considered material . All related party transactions were at arms length and in the ordinary course of business and conforming  to the requirements of Companies Act, 2013.  Omnibus approval is taken from the Board of Directors meeting for approval of transactions what are of a repetitive nature. Form AOC-2 as required under Section 134(3)(h) of the Companies Act, 2013, read with rule 8(2) of the Companies (Accounts) Rules, 2014 is enclosed  as Annexure -C

Particulars of Loan, Guarantee and Investments under Section 186

The Company has made an inter corporate deposit with a non banking finance company viz M/s Muthoot Capital Services Limited for an amount of Rs. 140.85 lakhs as  an investment for a period of 3 months at a rate of interest of nine percent per annum,  under Section 186 of the Companies Act, 2013. The investment is made in the ordinary course of business with the view to investing surplus funds of the Company to get the maximum returns. Other than the above, the Company has not given any loans, guarantees or investments under Section 186 to any party during the period under review.             Conservation of Energy, Technology, Absorption, Foreign Exchange Earnings and Outgo

The details of Energy, Technology, Absorption, Foreign Exchange Earnings and Outgo are as under:

Conservation of Energy.

The business of the Company is not power intensive, being an electronic equipment integration unit. Even then, the Company continues to accord high priority to conservation of Energy. Systems are in force to closely monitor energy usage.  

      Technology Absorption, Research  & Development.

The Company has efficient R & D department which closely observes and suggests cost effective changes in components for integration of Access Control Systems.

    C.   Foreign exchange earnings and outgo.

i. Earnings in Foreign Currency

ii.Expenditure in Foreign Currency

Particulars of Employees and related disclosures

In terms of the provisions of Section 197(12) of the Companies Act, 2013 read with Rule 5(2) and 5  (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, there are no employees of the Company drawing remuneration in excess of the limits set out in the said rules.

Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Companies Act,2 013 read with Rule 5(1) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules, 2014,are provided in Annexure D.

Your Company does not have any subsidiaries, joint ventures or associates and there are no details to be disclosed.

Risk Management Policy

Your Company has constituted a risk management committee  comprising of the Managing Director, Executive Director, Company Secretary, Chief Financial Officer and  Head of Marketing  and  which assists the Board of Directors in overseeing and approving the Company’s enterprise wide risk management framework and to be in a constant watch mode so as to identify all risks that the Organisation faces viz financial, strategic, market, liquidity, security, property, legal and regulatory. There is a constant process of management and reporting of principal risks and uncertainties in the Company.

By having transparent policies and system of reporting firmly in place, the elements of risks are identified at earlier stages which enables the Organisation to control the effects.  Risk management committee is fully in sync with the Audit Committee and with the Internal Control and Internal Audit teams  with the aim of early identification of risks. The Board believes that effective control of internal activities and procedures will mitigate the chances of risks from within the organisation which is achieved by laying of procedures and codes of conduct and by constant interaction with employees and other stake holders of the Company.

INTERNAL FINANCIAL CONTROLS

The Company has in place adequate internal financial controls with reference to financial statements. During the financial year, such controls were tested and no material weakness in the design or operation were observed. Internal Auditors M/s Roy Varghese and Associates, a reputed audit team confirms that the activities are in compliance with the Companies policies and that no material deviations were detected. Internal Auditors review systems and operations of the Company and ensure that the Company is functioning within the limits of all applicable statutes. Any internal control weaknesses, non-compliance with statutes and suggestions on improvement of existing practices form part of internal audit report. The Audit committee reviews the internal audit report and compliance report and ensures that the observations pointed out in these reports are addressed in a timely and structured manner by the Management. The Internal Audit report is also reviewed by the Statutory Auditors .

Vigil Mechanism/Whistle Blower Policy for Directors and employees.

The Company is committed to the highest standards of ethical, moral and legal conduct of business operations and in order to maintain these standards , the Company encourages its employees who have genuine concerns about suspected misconduct to come forward and express those concerns  without fear of punishment or unfair treatment.  The Company has a proper vigil mechanism  and whistle blower policy in place pursuant to Section 177(9) and 177(10) of the Companies Act, 2013 and as per Regulation 4(2)(d) (iv) and 34(3) read with Para 10 of part C of Schedule V of the  SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.  The mechanism also provides for adequate safeguards against victimisation of Directors and employees who avail the mechanism and also provides for direct access to the Chairman of the Audit Committee in special cases. The said policy is available in the website of the Company www.adtechindia.com

Listing with Stock Exchanges

Shares of the Company were listed in the regional stock exchanges of Madras Stock Exchange, the Cochin Stock Exchange Limited and the Ahmedabad Stock Exchange Association Limited which were closed down as a result of orders issued by the Securities and Exchange Board of India (SEBI). Shares of the Company are moved to the dissemination board of National Stock Exchange (NSE). The Company is in the process of listing its shares in Stock Exchange which meets the criteria prescribed by SEBI and has commenced steps.

Directors and Key Managerial Personnel

In accordance with the provisions of the Companies Act, 2013 and the Articles of Association of the Company, Shri. M.R.Narayanan, Director(DIN 00044926)  of the Company , retires by rotation at the ensuing Annual General Meeting and being eligible have offered himself for re-appointment. Your Board of Directors recommend the re-appointment of Shri.M.R.Narayanan as a Director of the Company.

The Board of your Company consists of six directors as on the date of this report as follows

All the Directors have rich experience and specialized knowledge in various areas of relevance to the Company . The Company is immensely benefitted by the range of experience and skills that the Directors bring to the Board. The composition of the Board is as per the Companies Act, 2013 and the SEBI (Listing Obligation and Disclosure Requirement) Regulations, 2015.

Changes in Directors and Key Managerial Personnel during the year 2015-16

During the year under review, there has been no change in Directors or Key Management Personnel.

The Company has received necessary declarations from all the three Independent Directors confirming that they meet the criteria of independence as prescribed both under the Companies Act, 2013 and under the SEBI (Listing Obligation and Disclosure Requirement) Regulations, 2015 with Stock Exchanges.

 Following persons are the Key Managerial Persons of the Company as recorded by the Board

1.      Shri.M.R.Subramonian               - Managing Director

2.      Shri.S.Balamurali                         - Company Secretary & Compliance Officer.

3.      Shri.P.Vinaya Chand                 - Chief Financial Officer.

Woman Director

Pursuant to the provisions of Section 149 of the Companies Act, 2013 and clause 49 of the SEBI (Listing Obligation and Disclosure Requirement) Regulations, 2015, Company shall have at least one Woman Director on the Board and accordingly, your Board has Ms P.K.Anandavally Ammal as Woman Director.

Declaration by Independent Director(s) and re-appointment, if any

The Company has three Independent Directors on the Board. The Company has received declaration from each Independent Director of the Company under Section 149(7) of the Companies Act, 2013 on  01st April 2015 that they meet the criteria of independence as laid down in Section 149(6) of the Companies Act, 2013 and subsequently the same was placed at the Board Meeting held on 30th May 2015.

A declaration by the Managing Director confirming receipt of this declaration from Independent Directors is annexed to this report as Annexure A

Company’s Policy on Director’s appointment and other matters as provided under Section 178 (1) and 178 (3) of the Companies Act, 2013.

The Company has formulated a familiarization programme for its Directors which gives proper guidance into the history of the Company, its promoters, performance of the Company over the previous years, products and services dealt with by the Company, its Auditors and the top management. The familiarization programme is posted on the website of the Company. During the year , the Company had conducted a refresher programme for its Independent Directors.

 Policy for bringing diversity to the Board includes the following

a.     Diversity is ensured through consideration of a number of factors including but not limited to skills, specialization and industry experience. Factors based on the business model and specific needs from time to time are also considered.

b.     The Nomination and Remuneration Committee shall drive the process for Board appointment and for identifying and nominating, for approval of the Board, candidates for appointment to the Board

c.     Benefits of experience/knowledge in the areas relevant to the Company continue to influence succession planning and continue to be the key criteria for the search and nomination of Directors to the Board

d.     Board appointments are purely based on merit, having due regard to for the benefits of diversity on the Board.

Nomination and Remuneration Committee and policies

 The Board had constituted a Nomination and Remuneration Committee on 14th August 2014 pursuant to the provisions of Section 178 of the Companies Act, 2013 and the SEBI (Listing Obligation and Disclosure Requirement)Regulations, 2015.

The Committee met once during the financial year on 12 September 2015. The composition of the Nomination and Remuneration Committee is as under. All the committee members attended the meeting held on 12th September 2015.

Pursuant to the provisions of Section 178 and 134 (3(e) and Rule 8 (4) of the Companies (Accounts) Rules, 2014, Companies Act, 2013 and the SEBI (Listing Obligation and Disclosure Requirement)Regulations, 2015, the Committee was constituted with the following terms of reference.

a.     Formulation of criteria for determining qualifications, positive attributes and independence of a Director and recommend to the Board a policy, relating to remuneration of Directors, Key Managerial Personnel and other employees.

b.      Formulation of criteria for evaluation of Directors, Chairman, Managing Director and Executive Director, Board as a whole and various Committees of the Board. Based on the recommendations of the Committee, the said Policy on Nomination and Remuneration and Evaluation of Directors was adopted by the Board.

c.     Identifying persons who are qualified to become Directors and who may be appointed in Senior Management positions in accordance with the criteria laid down.

The Committee has adopted the following criteria for selection of Members on the Board of Directors of the Company and also candidates eligible to be appointed in the Senior Management of the Company

(i)Criteria for Selection of Directors

Before making a recommendation to the Board for appointment of any Director, the Committee shall ensure that

(a)  The candidate possesses appropriate skills experience and knowledge in one or more fields of managerial/business/administrative/legal/finance qualifications and experience over two decades ;

(b)  The candidate shall be free from any disqualification as provided under Sections 164 and 167 of the Companies Act, 2013;

(c)  In the case of appointment of an Independent Director, the candidate meets the conditions of being independent as stipulated under Companies Act, 2013 and the SEBI (Listing Obligation and Disclosure Requirement)Regulations, 2015

(d)  The candidate also complies with the “Fit and Proper” criteria as laid down by the policy of the Company.

(ii) Criteria for Selection of Senior Management Personnel

The term Senior Management shall have the same meaning as provided under the explanation to Section178 of the Companies Act, 2013

The Committee shall, before making any recommendation to the Board for appointment, should ensure that the candidate has the attributes set forth below

(a)  The candidate should have a minimum experience of 10 years in any of the areas viz electronic security related, financial management, legal, sales, marketing, procurement, research, technical operations or such other areas which in the opinion of the Committee are relevant for the Company’s business; and

(b)  The candidate should possess qualities that demonstrate leadership skills, effective communication skills, hard work, commitment and such other attributes which in the opinion of the Committee are in the interest of the Company.

The Committee makes its recommendation to the Board if it finds that a candidate meets the criteria for appointment.

The Board of Directors has carried out an annual evaluation of its own performance, its Committees and individual Directors pursuant to the provisions of Section 178(3) of the Companies Act, 2013. All the Directors have provided inputs to the questionnaire seeking information on criteria such as Board Composition and structure, Board Processes and procedures, effectiveness of the Board, etc

The Board and Nomination and Remuneration Committee reviewed the performance of the individual  Directors  interalia, on the basis of understanding and knowledge of the market in which the Company is operating, ability to appreciate the working of the Company and the challenges it faces, attendance to meetings, extend of participation and involvement in the meetings and ability to convey one’s views and flexibility to work with others. The performance of the Committees was evaluated by the based on the composition  of the Committees, effectiveness of the Committee meetings with respect to the terms of reference and conduct of the meetings and the procedures followed. 

Separate meeting of Independent Directors was conducted during the year, to review the performance of the Board as a whole, performance of Non Independent Director and Chairman and assess the quality, quantity, timelines of flow of information from the Management to the Board of Directors.

Remuneration Policy

The Committee has formulated policies on remuneration of Directors, KMP and other employees, features of the same are as under

(i)                  Remuneration of Managing Director and Executive Director

Committee takes into consideration the performance of the Company, the ability to lead the team, past remuneration, the comparative remuneration profile in the industry subject to the condition that overall remuneration shall be in accordance and within the limits stipulated under the Companies Act, 2013

(ii)                Remuneration to Non Executive Directors

Remuneration to Non Executive Director is paid subject to the limits stipulated under the Companies Act, 2013 and based on level of participation in the affairs of the Company.

Remuneration to Independent Directors is restricted to sitting fees for attending meetings of the Board of Directors .

The Company does not at present have a provision of stock options.

(iii)               Remuneration of Senior Management Personnel and KMP

The Remuneration of the Senior Management Personnel and KMP shall be in accordance with the Policy of the Company as is applicable to the employees. Performance of the business/function under his control is also considered while deciding remuneration.

Details of remuneration paid to Directors and KMP are mentioned elsewhere in this report.

Audit Committee

Composition of the Audit Committee is as follows

The Audit committee consists of two Non-Executive Independent Directors, one of whom is the Chairman. All the members of the Committee possesses accounting or related financial management expertise. The Committee met five times during the financial year 2015-16 on 30th  May 2015,13th August 2015, 14th November 2015, 12th February 2016 and on 18 March 2016, in which meetings, all the members were present.

The terms of reference of Audit committee in accordance with Section 177(4) of the Companies Act, 2013 and the SEBI (Listing Obligation and Disclosure Requirement)Regulations, 2015 are as under

1.      The recommendation for appointment, remuneration and terms of appointment of auditors of the Company;

2.      Review and monitor the auditor’s independence and performance, and effectiveness of audit process and discussions thereon;

3.      Examination of the financial statement and the auditor’s report thereon;

4.      Approval or any subsequent modification of transactions of the company with related parties;

5.      Scrutiny of inter-corporate loans and investments;

6.      Valuation of undertakings or assets of the Company;

7.      Evaluation of internal financial controls and risk management systems;

8.      Monitoring the end use of funds raised through public offers and or debt;

9.      Discusssion with internal auditors of any significant findings and follow up theron;

10.  To review the functions of Whistle Blower mechanism;

11.  To carry out such other functions as may be referred to it.

There was no situation where the Board has not accepted the recommendation of the Audit Committee.

The Company has in place a Code of Conduct intended to focus the Board and Senior Management on areas of ethical risk, provide guidance to Directors and Senior Management to help them recognize and deal with ethical issues, provide mechanisms to report unethical conduct.

The Company has also in place a Code of Conduct for Prevention of Insider Trading for its designated Persons, in compliance with the SEBI (Prohibition of Insider Trading ) Regulations,1992. The code advises them on the procedures to be followed and disclosures to be made, while dealing in shares of the Company and cautioning them of the consequences of violations. The Code of Conduct for Directors and Senior Management is placed in the website of the Company. However, since the company is not listed in NSE or BSE, there is no trading in shares of the Company.

Statutory Auditors

The Auditors of the Company M/s M.R.Ramachandran and Co, Chartered Accountants, were appointed as Statutory Auditors of the Company during 23rd AGM held on 24th September 2014 for a period of three years. As per provisions of Section 139 of the Companies Act, 2013, the appointment need to be ratified at each AGM during their tenure and your Directors recommend ratification of the appointment of Statutory Auditors for the financial year 2016-17 in the ensuing AGM.

Auditors Report

There are no qualifications or adverse remarks mentioned in the Auditors Report for the financial year 2015-16 except the mention of a delay of 53 days in transferring the unpaid dividend for the year 2007-08 of Rs. 18400 to the Investors Education and Protection Fund(IEPF). The Company has explained that the delay was due to a bank reconciliation issue and corresponding delay in preparing list of unclaimed shareholders. The notes on accounts forming part of financial statements are self explanatory.

Secretarial Auditors Report

Secretarial Auditors Report for the financial year 2015-16 as provided by M/s Krishna Prasad R.S & Co, Company Secretaries,T.C 12/1233, Law College Junction, Vanchiyoor PO, Near PMG, Trivandrum 695 035 is annexed to this  report. There are no adverse comments or qualifications mentioned in the Secretarial Auditors Report except on the delay of 53 days in transferring an amount of Rs. 18400 to the Investors Education and Protection Fund (IEPF). The delay was explained as due to bank reconciliation problem and corresponding delay in preparing the list of unclaimed shareholders.

Details of remuneration and other particulars required under Section 197(12) of the Companies Act read with relevant rules are given as Annexure III

Corporate Social Responsibility (CSR)

Your Company has always believed in Social Responsibility and has been supporting the cause in a reasonable manner. The Company has taken up various activities in line with the business and requirements of the society in the locality. The brief outline of the CSR Policy of the Company and the initiatives undertaken by the Company on CSR activities during the year are set out in Annexure E to this report in the format prescribed in the Companies (Accounts) Rules, 2014. The policy is available in the website of the Company. The composition and other details of the CSR Committee is detailed here under

Reason for the Company not being able to spend 2 percent of the net profits for CSR activities.

Pursuant to provisions of Section 135 of the Companies Act, the Company has to spend amount of 2 percent of the average net profits of the Company in the preceding 3 years calculated in accordance with the provisions of Section 198 on CSR activities. Accordingly, the amount to be spent during the financial year 2015-16 was Rs. 18,71,450. In order for the benefit of the locality in whose area the Company functions through its corporate office, the Company associated with the residential association in the area and maintained the children’s park and bus stops which it constructed in 2014-15. In the year under review, the Company has associated with the residential association and constructed a public road by closing of an open drainage which was a long pending requirement of the residents in that area. Hence, instead of the required amount to be spend Rs. 18,71,450 the Company spend Rs. 18.35,000.  The shortfall in spending of allotted CSR amount  is due to strict implementation of cost control measures in the project.  Detailed report on CSR policy of the Company and the activities/projects undertaken are provided in Annexure E.

Acknowledgements

The Directors sincerely acknowledge the contribution and support from Customers, Shareholders, Bankers, Vendors, Business Associates and  various Government as well as Regulatory Agencies for their valuable support for the Company’s growth. Your Directors also wish to place on record their appreciation of the contribution by the employees whose dedication, hard work and commitment enables the Company to sustain growth.

State of the Company’s Affairs and Future Outlook Highlights of the Company’s performance for the year under review are as under v Revenue from operations decreased 30.10 percent to Rs 4395.72 lakhs due to sharp drop exports to 1049.33 lakhs v Profit before taxes decreased by 51.71 percent to Rs.452.62 lakhs v Profit after taxes (Net Profit) decreased by 53.07 percent to Rs.302.27 lakhs The Commercial Industrial division of the Company posted more or less stagnant growth . The Retail Division experienced negative growth mainly due to sharp drop in exports which is due to low cost grey market substitutes being available for overseas customers. Inland Retail division sales remained more or less stagnant due to sluggish growth in the brick and mortar stores under lifestyle, fashion and consumer electronic segments. We expect the situation to remain stagnant in the coming couple of years . Earnings per share( EPS) was Rs.12.69 per share for the year under review as against Rs. 27.04 in the previous year. No material changes and commitments have occurred after the close of the year till the date of this Report, which affect the financial position of the Company. Future outlook for the Company is positive on account of the vision of your Company to continue and strengthen growth in coming years. The Company tried to explore large projects by forming separate and dedicated marketing team in the Commercial Industrial Division which did not meet with desired success. Diversification into floating solar projects has started yielding goods results with the Company bagging the prestigious work order from Kerala State Electricity Board for design, construction, installation, commissioning and handover of 500 KW Floating Solar Power Project in Banasurasagar Dam, Wayanad, Kerala. Work is going in full swing in this project and the Company expects more orders to be received in this division.

Conservation of Energy. The business of the Company is not power intensive, being an electronic equipment integration unit. Even then, the Company continues to accord high priority to conservation of Energy. Systems are in force to closely monitor energy usage.

Technology Absorption, Research & Development. The Company has efficient R & D department which closely observes and suggests cost effective changes in components for integration of Access Control Systems.

Foreign exchange earnings and outgo. i. Earnings in Foreign Currency Head of Earnings2015-16 in Rs Lakhs2014-15 in Rs Lakhs Export Sales1049.332940.09 Sales Incentives on Direct orders placed on overseas principals48.87137.30 ii.Expenditure in Foreign Currency Head of Expenditure2014-15 in Rs Lakhs2014-15 in Rs Lakhs Foreign Travel Expenses22.1920.74 Import Purchases667.17549.16

DIRECTOR’S RESPONSIBILITY STATEMENT Your Directors state that (a) In the preparation of annual accounts for the year ended March 31, 2016, the applicable accounting standards read with requirements set out under Schedule III to the Companies Act, 2013, have been followed and there are no material departures from the same; (b) The Directors have selected such accounting policies and have applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as on March 31, 2016 and of the profit of the Company for the year ended on that date; (c) The Directors have 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 fraud and other irregularities; (d) The Directors have prepared the annual accounts on a ‘going concern’ basis; (e) The Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and (f) The Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.