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Directors Report of ADCC Infocad Ltd.

Mar 31, 2015

Dear Members,

The Directors are pleased to present the Seventeenth Annual Report of the Company together with the Audited Statements of Accounts for the year ended March 31st, 2015

1. Financial Results

We are delighted to present the report on our business and operations for the year ended March 31st, 2015.

Standalone

Particulars 2015 2014

Total Income 98,44,85,473 77,55,42,112

Profit before interest, depreciation and 19,58,38,333 18,45,04,177 taxes

Finance Cost 7,47,67,032 6,27,70,445

Depreciation 2,36,07,319 1,90,21,475

Provision for income 3,18,33,806 3,05,67,516 tax

Prior Period item:

Depreciation 0 55,40,813

Employee benefit 0 15,47,025

Net Profit for the 6,56,30,176 6,50,56,903 year

Dividend 67,95,000 1,49,84,991

Dividend tax 13,83,326 25,46,701

Net worth 36,50,22,271 21,69,83,194

Earnings per Share 7.24 9.77 (EPS) (Basic)

Earnings per Share 7.10 9.77 (EPS) (Diluted)

Consolidated

Particulars 2015 2014

Total Income 1,08,67,34,364 79,85,05,457

Profit before interest, depreciation and 20,09,10,519 18,13,11,657 taxes

Finance Cost 7,50,66,984 6,31,05,386

Depreciation 2,44,96,298 1,98,28,253

Provision for income 3,20,00,036 3,04,86,757 tax

Prior Period item:

Depreciation 0 55,40,811

Employee benefit 0 15,47,025

Net Profit for the 6,93,47,200 6,08,03,425 year

Dividend 67,95,000 1,49,84,991

Dividend tax 13,83,326 25,46,701

Net worth 36,80,93,103 21,16,77,689

Earnings per Share 7.55 9.02 (EPS) (Basic)

Earnings per Share 7.40 9.02 (EPS) (Diluted)

2. Company's Performance

Revenues Standalone

Total Income on Standalone basis in Financial year 2014-15 increased to Rs. 98,44,85,473/- from Rs. 77,55,42,112/- in the previous year 2013-14, at a growth rate of 26.94%. Profit before interest, tax AND depreciation (EBITD) were Rs. 19,58,38,333/- registering a growth of 6.14% over EBITD of Rs.18,45,04,177/- in 2013-14. Profit before tax (PBT) for the year was Rs. 9,74,63,982/- recording a growth of 1.93% over the PBT of Rs. 9,56,24,419/- in 2013-14. Profit after tax (PAT) for the year was Rs. 6,56,30,176/- recording a growth of 0.88 % over the PAT of Rs. 6,50,56,903/- in 201314.

Revenues Consolidated

Total Income on Standalone basis in Financial year 2014-15 increased to Rs. 1,08,67,34,364/- from Rs. 79,85,05,457/-in the previous year 2013-14, at a growth rate of 36.10%. Profit before interest, tax, depreciation (EBITD) was Rs. 20,09,10,519/- registering a growth of 10.81% over EBITD of Rs. 18,13,11,657/- in 2013-14. Profit before tax (PBT) for the year was Rs. 10,13,47,237/- recording a growth of 11.02% over the PBT of Rs. 9,12,90,182/- in 2013-14. Profit after tax (PAT) for the year was Rs. 6,93,47,200/- recording a growth of 14.05. % over the Profit after tax (PAT) of Rs. 6,08,03,425/- in 2013-14.

3. Dividend:

Based on the Company's performance, the directors are pleased to recommend for approval of the members a final dividend of Rs. 0.75/- per share for the financial year 2014-15 aggregating to Rs. 67,95,000/-. The final dividend on equity shares, if approved by the members would involve a cash outflow of Rs. 81,78,326/- including dividend tax for financial year 2014-15.

The Dividend, subject to the approval of Members at the Annual General Meeting on September 30, 2015, will be paid on or after September 7, 2015 to the Members whose names appear in the Register of Members, as on 21st September, 2015 and the share transfer book shall be closed from September 22, 2015 to September 30, 2015 (both days inclusive).

4. Transfer to Reserves:

The Company has not transfer any amount to the general reserve account during the reporting period

5. Particulars of Loans, Guarantees or Investments:

Loans, guarantees and investments covered under Section 186 of the Companies Act, 2013 form part of the notes to the financial statements provided in this Annual Report.

6. Particulars of Contracts or Arrangements made with related parties:

Particulars of contracts or arrangements with related parties referred to in Section 188(1) of the Companies Act, 2013, in the prescribed Form AOC-2, is appended as Annexure 2 to the Board's report.

7. Material Events occurring after Balance Sheet date:

The Company in its Prospectus dated September 23, 2014 had specified the utilization of the proceeds of the fresh issue by the Company under the section titled "Objects of the Issue" on page no. 65. The Total Fund requirement under the Issue (including internal accruals) was Rs. 992.74 lakhs (including 32.74 lakhs of internal accruals) and the said proceeds was to be utilized for (i) Purchase of New Technical Equipment, Software and Hardware (i.e. Rs. 115.83 lakhs), (ii) Part finance the long term Working Capital requirement (Rs. 700 lakhs), (iii) International Marketing & Branding Expenses (Rs. 48.99 lakhs), (iv) General Corporate Purposes (Rs. 77.92 lakhs) and (v) issue expenses (Rs. 50 lakhs).

The company achieved with respect to utilization of the objects relating to "Technical Equipment, Software and Hardware" as mentioned in prospectus was 27.13% till 31st March, 2015 (in terms of total amount deployed in this particular object). As on March 31, 2015, the total amount utilized for the said Objects of the Issue is Rs. 31.42 lakhs and the balance unutilized amount amounting to Rs. 84.41 lakhs is temporarily lying in current accounts with Banks. During the current financial year, the Company has acquired some Technical Equipment, software and Hardware which is mentioned in the below revised proposed object.

Thus pursuant to the provisions of Section 27 and other applicable provisions, if any, of the Companies Act, 2013 read with The Companies (Prospectus and Allotment of Securities) Rules, 2014 the Company has conducted a postal ballot in which the shareholders shall approve the variation in deployment of funds. The Company has dispatch the Postal Ballot Notice to all the Shareholders which has been completed on 03rd August, 2015 and the Notice of Postal Ballot will be available at website of the Company as well as on the website of Bombay Stock Exchange. The E-Voting commenced from August 5, 2015 at 10:00 A.M. and shall complete on September 3, 2015 at 5:00 P.M.

There will not be any material impact on financial position of the company, if company purchase the Technical Equipment, Software and Hardware from the proposed vendors within the extended dates as mentioned above from the IPO proceeds.

8. Fixed deposits:

In terms of the provision of Sections 73 and 74 of the Companies Act, 2013 read with the relevant rules, your Company has not accepted any fixed deposits during the year under review.

9. Management's discussion and analysis:

In terms of the provisions of Clause 52 of the Listing Agreement, the Management's discussion and analysis is set out in this Annual Report.

10. Subsidiaries:

As on March 31, 2015, we have six subsidiaries which are as follows:

I. ADCC Infocom Private Limited;

II. AI Instruments Private Limited;

III. ADCC Academy Private Limited;

IV. ADCC International East Africa Limited;

V. ADCC Tech Limited; and

VI. ADCC Technology Zambia Limited

During the year, the Board of Directors ('the Board') reviewed the affairs of the subsidiaries. In accordance with Section 129(3) of the Companies Act, 2013, we have prepared consolidated financial statements of the Company and all its subsidiaries, which form part of the Annual Report. Further, a statement containing the salient features of the financial statement of our subsidiaries in the prescribed format AOC 1 is appended as Annexure 1 to the Board's report.

The statement also provides the details of performance, financial positions of each of the subsidiaries. In accordance with Section 136 of the Companies Act, 2013, the audited financial statements, including the consolidated financial statements and related information of the Company and audited accounts of each of its subsidiaries, shall be available on our website www.adccinfocad.com. These documents will also be available for inspection during business hours at our registered office in Nagpur, India.

Investments and Disinvestments made during the reporting period in the subsidiaries are mentioned below:

During the reporting period, the Company invested in ADCC Tech Limited as a Subscriber to the Memorandum at the time of incorporation on February 14, 2015.

The Main object of ADCC Tech limited is to carry on the business of geographical surveys and mapping, On-Shore & Off-Shore surveys and Fields Surveys including oil & gas and any other fields, Consultancy of Survey Engineering, Survey Planning, Aerial Photography, Aerial and Satellite Remote Sensing using different sensors like RADAR, Aeromag, LiDAR etc., in addition to cameras and mapping using any of the above mentioned sensor systems from Aerial and other platforms, geographical information systems, Management System Engineering Consultancy including without limiting the generality, to all such other events/activities ancillary thereto.

During the reporting period, the Company disinvested 5 percent of its holding made in ADCC Academy Private Limited and ADCC Infocom Private Limited.

11. Business:

Strategy

At ADCC our strategic objective is to build up an integrated platform in Geospatial field which enables us to serve our clients to the best of their requirements and at the same time generating profitable growth for our investors. In order to fulfill these objectives and to meet the demands of present and future the Company has developed ADCC Strategic Management Plan which deals with challenges, opportunities, and new initiatives that have resulted through a study of organizational processes and the geospatial industry.

Attract and Retain

A global, diverse, motivated and high performing employee base

To ensure good human resources management, your Company focuses on all aspects of the employee lifecycle. In ADCC retention has been identified as one of the areas within HRD to strategize upon. As a part of HR initiative for retentions we have specifically Implemented some Industry Best practices with employee Benefits. The Company periodically arranges Rewards and Recognition programs at the right time for the right resource and they are ranging from monthly monetary rewards to Foreign Tours for extraordinary performances, Holiday Club Benefits with paid vacation of 3 days to 5 top performers, the Company conduct Regular surveys and Audits to judge employee Satisfaction and reviews for changes accordingly, Survey from great place to work with focus on organizational culture, employee inputs etc. Target based incentive plans and Timely annual Appraisals. The Company has taken a very unique initiative CMMI (Capability Maturity Model Integration) implementation process to strengthen Process for employees.

Human Resources Management

The company has adapted good practices to retain, encourage and develop skills of all the employees of the company. The details of Human Resource of the company has been mentioned in other sections of this Annual Report.

12. Corporate Governance:

Corporate governance is an ethically driven business process that is committed to values aimed at enhancing an organization's brand and reputation. This is ensured by taking ethical business decisions and conducting business with a firm commitment to values, while meeting stakeholders' expectations. Our Corporate governance report for fiscal 2015 forms part of this Annual Report.

13. Appointment of statutory auditors:

The Members of the Company at the Annual General Meeting of the Company held on August 26, 2014 appointed M/s. Shah Baheti Chandak & Co; Chartered Accountants (Firm Registration No.109513W) as the Statutory Auditors of the Company to hold such office till the conclusion of twentieth (20th) Annual general Meeting.

M/s. Shah Baheti Chandak & Co; Chartered Accountants have confirmed their eligibility and willingness to accept office, if appointment is ratified by the Members of the Company. The ratification of appointment of Statutory Auditors is subject to the approval of the Members of the Company.

Your Directors propose ratification of appointment of M/s. Shah Baheti Chandak & Co, Chartered Accountants Co. as the Statutory Auditors of your Company.

14. Auditors' report and secretarial auditors' report:

Pursuant to Section 204 of the Companies Act, 2013, the Board of Directors had appointed M/s. Sushil Kawadkar, Practicing Company Secretary as the Secretarial Auditor of the Company. Accordingly, the Secretarial Auditor has given his report, which is annexed hereto as Annexure-6. The comments of the Board on the observations of the Secretarial Auditor are given after Annexure-6 above.

15. Board Meetings:

The details pertaining to the composition, terms of reference, etc. of the Board of Directors of the Company and the meetings thereof held during the financial year are given in the Report on Corporate Governance section forming part of this Annual Report.

16. Directors' responsibility statement:

Pursuant to Section 134(5) of the Companies Act, 2013, the board of directors, to the best of their knowledge and ability, confirm that:

i. in the preparation of the annual accounts, the applicable accounting standards have been followed and there are no material departures;

ii. 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 of the Company for that period;

iii. 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;

iv. they have prepared the annual accounts on a going concern basis;

v. they have laid down internal financial controls to be followed by the Company and such internal financial controls are adequate and operating effectively;

vi. they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

Based on the framework of internal financial controls and compliance systems established and maintained by the Company, work performed by the internal, statutory and secretarial auditors and external consultants and the reviews performed by management and the relevant board committees, including the audit committee, the board is of the opinion that the Company's internal financial controls were adequate and effective during the financial year 2014-15.

17. Directors and Key Managerial Personnel:

During financial year 2014-15, 4 (Four) Independent Directors were appointed for a period of 5 (Five) consecutive years. Pursuant to the provisions of the Companies Act, 2013, they are not liable to retire by rotation. As on March 31, 2015 your Company has 6 (Six) Non-Executive Directors out of them 5 (five) are Independent Directors and One is NonIndependent. Pursuant to Section 149 of the Companies Act, 2013, your company should have at least one third of its total strength of the Board of Directors as Independent Directors and pursuant to clause 52 (I) (A) (i) and 52 (I) (A) (ii) of listing agreement your company should have at least fifty percent of its total strength of the Board of Directors as Independent Directors. Based on the present composition of the Board of Directors and the number of Independent Directors, the Company complies with this requirement.

In terms of Section 152 of the Companies Act, 2013 and Article 134 of the Articles of Association of your Company, Mr. Sagar Meghe, Director is liable to retire by rotation at the Seventeenth Annual General Meeting. Mr. Sagar Meghe has confirmed his eligibility and willingness to accept the office of the Director of your Company, if confirmed by the Members at the ensuing Annual General Meeting.

In the opinion of your Directors, your Company will continue to benefit from Mr. Sagar Meghe in his capacity as the Director and Chairman of your Company. Your Directors, therefore, recommend that the proposed resolution relating to appointment of Mr. Sagar Meghe be passed.

Pursuant to Section 149 of the Companies Act, 2013, and pursuant to rules made there under every listed company should have at least one woman director on the Board. In order to comply with these provisions, Board of Directors of your Company in its meeting held on 11th March, 2015 appointed Ms. Shrilekha Lanjekar as an Additional Director in the Category of Non-Executive Independent Women Director of the Company and who holds office till the date of Annual General Meeting. In terms of section 161 of the Companies Act, 2013 and in respect of whom the Company has received a notice in writing from a member under section 160 of the Companies Act, 2013 signifying his intention to propose Ms. Shrilekha Lanjekar as a candidate for the office of a director of the Company. The resolutions seeking approval of the Members for the appointment of Ms. Shrilekha Lanjekar is incorporated in the notice of the forthcoming annual general meeting of the Company along with brief details about her. The Company has received a notice under Section 160 of the Act along with the requisite deposit proposing the appointment of Ms. Shrilekha Lanjekar.

18. Policy on directors' appointment and remuneration and other details:

The Company's policy on directors' appointment and remuneration and other matters provided in Section 178(3) of the Act has been disclosed in the corporate governance report, which forms part of the Annual report.

19. Declaration of Independence by Independent Director:

The Board confirms that all Independent Directors of the Company have given a declaration under Section 149 (7) of the Companies Act, 2013, to the Board that they meet the criterion of independence as prescribed under Section 149(6) of the Companies Act, 2013.

20. Board Evaluation:

The Companies Act, 2013 sec.149 (8) states that a formal annual evaluation needs to be made by the Board of its own performance and that of its committees and individual directors. Pursuant to Schedule IV of the Companies Act, 2013 states that the performance evaluation of independent directors shall be done by the entire Board of Directors, excluding the director being evaluated.

The evaluation of all the directors and the Board as a whole is followed based on the criteria and framework adopted by the Board. The evaluation process has been explained in the corporate governance report section which forms part of the Annual report. Recommendations and suggested areas of improvement for the Board, its various committees and the individual Directors were considered by the Board. The Board approved the evaluation results as collated by the nomination and remuneration committee.

21. Committees of the Board:

During the financial year 2014-15, the Board of Directors of your Company constituted the following Committees of the Board. The details of the powers, functions, composition and meetings of the Committees of the Board held during the year are given in the Report on Corporate Governance section forming part of this Annual Report.

i. Management Committee

ii. Audit Committee

iii. Nomination and Remuneration Committee

iv. Corporate Social Responsibility Committee

v. Stakeholders Relationship and Grievance Committee

22. Corporate Governance:

A separate section on Corporate Governance with a detailed compliance report as stipulated under the Listing Agreement and any other applicable law for the time being in force forms an integral part of this Report.

23. Conservation Of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo:

The particulars as prescribed under Sub-section (3)(m) of Section 134 of the Companies Act, 2013, read with the Companies (Accounts) Rules, 2014, are annexed as Annexure-11 to the Board's report.

24. Employee stock option plans:

Your Company has issued ADCC ESOP 2014 to its employees. Details of the stock options granted under ADCC ESOP 2014 are annexed as Annexure-9 to the Board's report.

25. Corporate social responsibility:

The brief outline of the Corporate Social Responsibility (CSR) Policy of the Company and the initiatives undertaken by the Company on CSR activities during the year are set out in Annexure-8 to the Board's report in the format as prescribed in the Companies (Corporate Social Responsibility) Rules, 2014.

26. Extract of annual return

As provided under Section 92(3) of the Act, the extract of annual return is annexed as Annexure-7 to the Board's report in the prescribed Form MGT-9.

27. Vigil Mechanism /Whistle Blower Policy

The details of the vigil mechanism/whistle blower policy are annexed in Annexure-10 to the Board's report

28. Legal, Governance and brand protection

Your Company continued to focus on the key areas and projects within the Legal, Compliance and Corporate Affairs functions. During the year, your Company has adopted new policies and amended existing policies such as Policy on CSR Policy and Vigil mechanism/Whistle Blower Policy, Policy on code of conduct, Nomination and Remuneration policy, Insider Trading Policy in line with new governance requirements. The Company has established a vigil mechanism for Directors and employees to report their genuine concerns, details of which have been given in the Corporate Governance Report annexed to the Board's report.

29. Enhancing Shareholders Value

Your Company believes that its Members are among its most important stakeholders.

30. Acknowledgement

The directors thank the Company's employees, customers, vendors, investors for their continuous support. The directors also thank the government of various countries, government of India, the governments of various states in India and concerned government departments / agencies for their co-operation. The directors appreciate and value the contributions made by every member of the ADCC family.

For and on behalf of the Board of directors

SD/- SD/- Place: Nagpur CA Amit Somani Mr. Sameer Meghe 4th September, 2015 Managing Director Vice Chairman



 
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