BOARD'S REPORT Your Directors have pleasure in presenting the 25th Annual Report, together with the Audited Accounts of the Company, for the year ended 31st March, 2015. Performance Review The Company continued to be engineering partners to clients in aerospace, heavy engineering, industrial products and auto industry, and recorded growth both in terms of revenues and profitability. The improved earnings reflect focus on efficiency in operation in FY 2015 enabling the company to invest for growth. The Company continued to invest in building a strong leadership team, a larger and more focused sales team and new recruitments of subject matter experts from industry to scale up the practice line. These investments together with focus on delivering customer value has laid down a solid platform for accelerated growth in the future. Financial Highlights - Standalone Total Income increased by 3.5% to Rs.1, 895.7 million in 2014-15. EBIDTA increased by 44.2% to Rs.305.3 million in 2014-15. Profit before tax and exceptional items increased by 88.9% to Rs.201.8 million in 2014-15. Net Profit after tax increased by 38% to Rs.113.2 million in 2014-15. Financial Highlights - Consolidated Total Income increased by 3% to Rs.3,192.4 million in 2014-15. EBIDTA increased by 37.2% to Rs.434.7 million in 2014-15. Profit before tax and exceptional items increased by 59.7% to Rs.317.8 million in 2014-15. Net Profit after tax increased by 24% to Rs.198 million in 2014-15. Dividend Considering need for conservation of funds for catering to the immediate growth plans of the company, your Directors consider it expedient to pass over dividend for 2014-15. Particulars Of Loans, Guarantees Or Investments The company has not made any loan or provided any guarantee or made investments during the financial year falling within the purview of Section 186 of Companies Act, 2013.The position of all the loans/guarantees and Investments held or outstanding as on March 31, 2015 are furnished in the financial statements. Public Deposits The Company has not accepted/renewed any public deposits and as such no amount on account of principal or interest on public deposits under Section 73 of the Companies Act, 2013, read with Companies (Acceptance of Deposits) Rules, 2014 was outstanding as on the date of the Balance Sheet. Issue And Listing Of Shares The company's shares are listed on BSE Limited (BSE) and National Stock Exchange Limited (NSE). Stock performance and stock data are furnished in the section on Corporate Governance Pursuant to the Scheme of Arrangement for merger of CADES Digitech sanctioned by the Hon'ble High courts of Karnataka and Delhi, 72,29,112 equity shares have been issued and allotted to the shareholders of amalgamating company and the shares have been duly listed on the stock exchanges. The issued and paid up capital of the company stands increased to that extent. Particulars Of Contracts Or Arrangements With Related Parties The particulars of contracts or arrangements with related parties referred to in section 188(1) of the Companies Act, 2013 are furnished in the prescribed form AOC-2 as Annexure I to this Report. All transactions with the related parties during the financial year were in the ordinary course of business and at arm's length basis. The company has taken necessary approvals of Audit Committee & the Board, as applicable to a transaction. The Company has not entered into any transaction with related parties which can be considered material in accordance of with the policy of the Company on material related party transactions formulated as per the requirements of Listing Agreement. The Policy on materiality and dealing with related party transactions formulated and approved by the Board is posted on the website of the Company and is accessible at www. axiscades.com Material Changes And Commitments There were no material changes and commitments affecting the financial position of the Company occurred between the financial year end and the date of this report. Management Discussion And Analysis A detailed chapter on Management Discussion and Analysis highlighting the Company's strategy, business environment, operations, performance, risks and outlooks is provided separately in this Annual Report. 2. BUSINESS STRUCTURE Subsidiaries, Joint Ventures And Associate Companies The Company has following the following subsidiaries: Overseas Subsidiaries All foreign subsidiaries are wholly owned by the Company and in Indian subsidiary, the Company holds 76% equity. The company does not have any joint venture or associate company. A report on the performance and financial position of each of the subsidiaries as per rule 8(1) of Companies (Accounts ) Rules 2014 is furnished under the statement containing salient features of financial statements of subsidiaries in AOC-1 is attached to this Report as Annexure II, pursuant to Section 129(3) of Companies Act, 2013. In accordance with the provisions of Section 136 of the Companies Act, 2013, the audited financial statements of subsidiaries have been placed on the Company's website at www.axiscades.com The copies of these documents will be sent if requested by any shareholder of the Company/ subsidiary interested in obtaining the same. These documents will also be made available for inspection at the Registered Office of the Company during business hours on working days. Consolidated Financial Statements Pursuant to the provisions of Section 129(3) of Companies Act 2013 read with Accounting Standards (AS) 21, 23 and 27, the audited Consolidated Financial Statements are furnished in the Annual Report. Change Of Name Of The Company The name of the Company was changed to AXISCADES Engineering Technologies Limited from Axis-IT&T Limited with effect from August 1, 2014 with necessary statutory approvals 3. ORGANIZATION DEVELOPMENT Board Of Directors Retirements and Reappointments Mr. Valmeekanathan S. and Mr. Rohitasava Chand, Directors will retire by rotation at the ensuing Annual General Meeting, and being eligible, offer themselves for re-appointment. The Directors recommend their re-appointment at the ensuing Annual General Meeting. All the Independent Directors were appointed by the shareholders either at the previous annual general meeting or by Postal Ballot pursuant to Section 149(10) of Companies Act 2013, and no independent director is liable to retire at the ensuing AGM. Human Resources Development The Company is committed to build an environment and where employees are inspired to achieve excellence in their area of functioning. The Human Resource Policy of the Company is focused on attracting, building and retaining best talents. In this direction, the Company has taken several Human Resource initiatives and has strengthened the in-house Human Resource Department. Many continuous training and employee development programs are put in place. The manpower strength of the Company, on consolidated basis stood at 1486 employees during the year end. Particulars Of Employees The information required pursuant to Section 197 (12) of the Companies Act, 2013 read with Rule 5(1) of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is provided as Annexure III to this Report. The statement of particulars of employees pursuant to Rule 5(2) of Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 is attached as Annexure IVto this Report. 4. CORPORATE GOVERNANCE The report on Corporate Governance as required under clause 49 of the Listing Agreement is attached and forms part of this Report. A certificate from the Auditors of the company as regards of compliance of conditions of corporate governance is also appended to the report. Meetings Of The Board The Board of the Company met 9 (nine) times during the year. The dates, attendance and other particulars of the meetings are furnished in the Report on Corporate Governance attached to this Report. The intervening gap between any two meetings was within the limit prescribed by the provisions of Companies Act, 2013. Committees Of The Board The Audit Committee consists of 5 members namely, Mr. Kailash M. Rustagi, Mr. Pradeep Dadlani Mr. Srinath Batni and Dr. Vivek Mansingh, Independent Directors and Mr. Kedarnath Choudhury, Non-executive Director. The Chairman of the Audit Committee is an Independent Director. All the recommendations made by the Audit Committee during the year have been accepted by the Board. The Company has also constituted Nomination and Remuneration Committee, Stakeholders Relationship Committee and Corporate Social Responsibility Committee as required under the provisions of Companies Act, 2013 and also as required under Listing Agreements and the composition, scope of their functions, responsibilities etc. are given in the Corporate Governance Section, which forms part of this Report. Declaration From Independent Directors The Company has received declarations from all Independent Directors under Section 149(7) of the Companies Act, 2013, to the effect that they meet the criteria of independence as laid down in section 149(6) of the Companies Act, 2013 and clause 49 of the Listing Agreement. The terms and conditions of appointment of Independent Directors are placed on the website of the Company at www.axiscades.com Performance Evaluation Of The Board, Committees And Directors Pursuant to the provisions of the Companies Act, 2013 and the Listing Agreement with Stock Exchanges, the Board on recommendation of the Nomination & Remuneration Committee, has formulated a Policy containing, inter alia, the criteria for evaluation of the performance of the Board, its Committees and individual directors, including independent directors, and the details have been furnished in the section on Corporate Governance. The evaluation of all the directors, Board as a whole and Committees thereof is being conducted once a year, based on the criteria and framework adopted in the policy. Vigil Mechanism The Vigil Mechanism of the Company which also incorporates the Whistle blower policy provides a formal mechanism to all Directors and employees to approach the Chairman of the Audit Committee and make protective disclosures about unethical behavior, actual or suspected fraud or violation of the Company's Code of Conduct or ethics policy. The Whistle Blower Policy is an extension of the Company Code of Conduct, which requires every employee to promptly report to the Management any actual or possible violation of the Code or an event he is aware of, that could affect the business or reputation of the Company. The disclosures reported are addressed in the manner and within the time frames prescribed in the Policy. No personnel of the Company were denied access to the Chairman of the Audit Committee. The Whistle blower policy which also describes the mechanism may be accessed on the Company's website at www.axiscades com. Policy On Director's Appointment And Remuneration The company's policy on directors' appointment and remuneration including criteria for determining qualifications, positive attributes, independence of a director and the policy on remuneration of directors, key managerial personnel and other employees formulated pursuant Section 134(3) (e) and 178 (3) of the Companies Act, 2013 are furnished in Annexure V. Risk Management Policy The Company has formulated and implemented a Risk Management Policy which focuses on identification of elements of risk, if any, which in the opinion of the Board, may threaten the existence of the Company. The Company has a risk identification and management frame work appropriate to its size and the environment under which it operates. The risk management process involves identification and periodic assessment of potential risks and their impact on the operations, profitability, growth and continuity and focuses on risk elements related competitive position in the key market segments, business environment, statutory and regulatory changes, global economy and business scenario, Currency exchange rate fluctuations, resource constraints etc. and initiating timely preventive as well as remedial actions. Prudential norms aimed at limiting exposures are an integral part of this framework. Reporting and control mechanisms ensure timely information availability and facilitates proactive risk management. These mechanisms are designed to cascade down to the level of line managers so that risk at the transactional level are identified and steps are taken towards mitigation in a decentralized fashion. Risks are being continuously monitored in relation to business strategy, operations and transactions, statutory/ legal compliance, financial reporting, information technology system etc. on inputs from both external and internal sources like key incidents, Internal audit findings etc. The Board of Directors is responsible for monitoring risk levels on various parameters and the senior management group ensures implementation of mitigation measures, if required. The audit committee provides the overall direction on the risk management policies. Prevention Of Sexual Harassment Of Women At Workplace In order to prevent sexual harassment of women at work place your Company has adopted a Policy for prevention of Sexual Harassment of Women at Workplace and has proper mechanism to control the same which is commensurate with the nature and size of the business of the company. During the year 2014-15, no such complaints were received. 5. DIRECTORS' RESPONSIBILITY STATEMENT Pursuant to Section 134(5) read with Sec.134 (3) (c) of the Companies Act, 2013, your Directors confirm that: a. in the preparation of the annual accounts the applicable accounting standards have been followed along with proper explanation relating to material departures; b. they have 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; c. they 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. they have prepared the annual accounts on a going concern basis; e. 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. have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively. 6. AUDITORS AND AUDITORS' REPORT STATUTORY AUDITORS M/S Walker Chandiok & Co LLP Chartered Accountants (Firm Registration No. 001076N/ N500013), were appointed as Auditors of the Company by the shareholders at the last AGM held on September 9, 2014 to hold office until the conclusion of the 27th AGM of the Company to be held during the calendar year 2017. In terms of the first proviso to Section 139 of the Companies Act 2013, the appointment of auditors shall be placed for ratification at every AGM. Accordingly the appointment of M/s Walker Chandiok & Co LLP Chartered Accountants as Auditors of the Company is placed for ratification of the shareholders at the ensuing AGM. The Company has received a certificate from the auditors to the effect that their appointment will be in accordance with the provisions of Section 141 of the Companies Act, 2013. The Auditors' Report does not contain any qualification, reservation or adverse remark. Secretarial Auditor 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 M/s Anant B. Khamankar & Co., Company Secretaries, to undertake Secretarial Audit of the Company for the financial year 2014-15. The Secretarial Audit Report attached as Annexure VI forms part of this report. Secretarial Audit Report does not contain any qualification, reservation or adverse remark. Significant Orders By Regulators/Courts/ Tribunals There are no significant and material orders passed by the regulators or courts which would impact the going concern status of the company and its future operations. Extract Of Annual Return The extract of Annual Return of your Company as on March 31, 2015, prepared pursuant to Section 92(3) of the Companies Act, 2013 and the Rules made thereunder, in Form MGT-9 is attached as Annexure VII to this Report. Internal Financial Controls Your Company has adopted the policies and procedures for ensuring the orderly and efficient conduct of its business, including adherence to the Company's policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial disclosures. 7. CORPORATE SOCIAL RESPONSIBILITY (CSR) The company has constituted a Corporate Social Responsibility Committee (CSR Committee) in accordance with the provisions of Section 135 of the Companies Act, 2013 and the rules made thereunder. The Committee is chaired by an Independent Director. The Company on recommendation of the CSR Committee, has framed a CSR policy in line with Schedule VII of the Companies Act, 2013. The policy has been posted and is accessible on the company's website at www.axiscades.com The annual report on CSR activities is furnished in 'Annexure Vlir to this Report. 8. CONSERVATION OF ENERGY, FOREIGN EXCHANGE EARNINGS ETC The particulars pursuant to Rule 8(3) of Companies (Accounts) Rules 2014, are given below Conservation of Energy Being an Information Technology company, is not energy intensive. However, adequate measures have been taken to conserve energy by introducing improved operational methods. The company in its initiative to be ISO14001 -Environmental Management System compliant, is adhering to the provisions of E-Waste (Management and Handling) Rules 2011 and Batteries (Management and Handling) rules 2011, by efficiently managing the AC installations, replacing PC's by VPC and recycling of paper etc. The Company has not engaged any imported technology. Since the requirements of the technology business are changing constantly, your Company has sought to focus on critical in house technologies and processes, which are likely to create value in the foreseeable future 9. FUTURISTIC STATEMENTS Certain statements made in this section or elsewhere in this report may be futuristic in nature. Such statements represent the intentions of the Management and the efforts being put in by them to realize certain goals. The success in realizing these goals depends on various factors both internal and external. Therefore, the investors are requested to make their own judgment by taking into account all relevant factors before making any investment decision. Acknowledgements Your Directors deeply appreciate and acknowledge the co-operation and support extended by Clients, Vendors, Investors and Bankers, various government agencies & regulatory bodies across the globe, the Software Technology Park, Noida, Hyderabad & Bangalore and other industry forums and agencies like NASSCOM and look forward to their continued support in the future. Your Directors wish to place on record their appreciation of the valuable contribution made by the employees of the Company at all levels. For and on behalf of the Board of Directors Valmeekanathan S. Director Kedarnath Choudhury Director Date: August 12, 2015 Place: Bengaluru |