Mar 31, 2016
Directors'' Report
To the Members,
The Directors presents their Twenty Second Annual Report, together with the Audited Accounts of the Company for the Financial Year ended March 31, 2016.
FINANCIAL HIGHLIGHTS: ,
(Amount in Rs.)
Particulars |
March 31, 2016 Consolidated |
March 31, 2015 Consolidated |
March 31, 2016 Standalone |
March 31, 2015 Standalone |
Net Sales / Income from Operations |
11,178,743,842 |
11,081,171,351 |
4,228,776,777 |
3,835,240,358 |
Other Income |
40,403,138 |
47,357,288 |
121,352,113 |
70,082,893 |
Total Income |
11,219,146,980 |
11,128,528,639 |
4,350,128,890 |
3,905,323,251 |
Total Expenditure |
10,237,059,819 |
9,681,708,594 |
4,103,160,709 |
3,516,906,986 |
Gross Profit before Interest and Depreciation |
982,087,161 |
1,446,820,045 |
246,968,181 |
388,416,265 |
Interest and Finance Charges |
706,889,493 |
538,681,427 |
179,218,640 |
147,546,760 |
Gross Profit before Depreciation and Taxation |
275,197,668 |
908,138,618 |
67,749,541 |
240,869,505 |
Depreciation |
363,323,550 |
307,690,027 |
44,395,246 |
67,377,781 |
Profit / (Loss) Before Tax |
(88,125,882) |
600,448,591 |
23,354,295 |
173,491,724 |
Provision for Taxation: Current year |
35,582,000 |
81,563,000 |
13,400,000 |
74,990,000 |
Deferred |
(20,159,014) |
(16,293,617) |
(7,208,594) |
(14,517,786) |
Net Profit / (Loss) After Taxation |
(103,548,868) |
535,179,208 |
17,162,889 |
113,019,510 |
Less: Minority Interest |
3,112,716 |
29,326,311 |
-- |
-- |
Profit / (Loss) for the year |
(106,661,584) |
505,852,897 |
17,162,889 |
113,019,510 |
Add: Balance brought forward from previous year |
1,867,957,085 |
1,439,640,634 |
628,697,887 |
551,854,924 |
Profit available for Appropriation |
1,761,295,501 |
1,945,493,531 |
645,860,776 |
664,874,434 |
APPROPRIATIONS: |
|
|
|
|
Transfer to General Reserve |
-- |
43,859,899 |
-- |
2,500,000 |
Provision for Dividend |
10,099,915 |
24,239,795 |
10,099,915 |
24,239,795 |
Provision for Tax on Dividend |
2,056,105 |
4,934,641 |
2,056,105 |
4,934,641 |
Adjustment Relating to Fixed Asset |
-- |
4,502,111 |
-- |
4,502,111 |
Balance of Profit carried forward to Balance Sheet |
1,749,139,481 |
1,867,957,085 |
633,704,756 |
628,697,887 |
OPERATIONAL PERFORMANCE
As can be seen from the above table, on consolidated basis, the Total Income for the year 2015-16 was '' 11,219,146,980 (previous year '' 11,128,528,639) and the Loss Before Tax was '' 88,125,882 (previous year Net Profit '' 600,448,591). After adjusting for Tax '' 15,422,986 (previous year '' 65,269,383), Net Loss after Tax was at '' 103,548,868 (previous year Net Profit of '' 535,179,208). After accounting for Minority Interest therefrom Net Loss After Tax and Minority Interest was at '' 106,661,584 as compared to Net Profit of '' 505,852,897 in the previous year.
The Consolidated Financial Statements (CFS) includes the financial statements of Zicom Electronic Security Systems Limited ("the Company") and its subsidiary companies, namely,
a) Zicom SaaS Private Limited ("Zicom SaaS");
b) Unisafe Fire Protection Specialists Singapore Pte. Ltd. ("Unisafe Singapore") and its subsidiaries, viz. Unisafe Fire Protection Specialists LLC, Dubai ("Unisafe Dubai") and its subsi diaries; and Phoenix Inter nationa l WLL, Qatar ("P hoe nix Qatar");
c) Unisafe Fire Protection Specialists India Private Limited ("Unisafe India"); and
d) Zicom Security Projects Pte. Ltd., Singapore ("Zicom Singapore")
On standalone basis, the Total Income for the year 2015-16 was '' 4,350,128,890 (previous year Rs. 3,905,323,251). The Profit before Tax was Rs. 23,354,295 (previous year Rs. 173,491,724). After adjusting for Tax Rs. 6,191,406 (previous year Rs. 60,472,214), Net Profit After Tax was at Rs. 17,162,889 (previous year Rs. 113,019,510).
BUSINESS DEVELOPMENTS AND PROSPECTS
The slump in the global crude prices led to slow-down in Middle East economy, which adversely affected project executions. This resulted delayed recovery from debtors and thereby affecting our consolidated performance. Despite every efforts made to expedite collections, external situation are taking it longer to settle down. To improve profitability, we have focused on service and maintenance business which offers steady cash flow. We have also taken up distribution of Unisafe branded products which are approved by Civil Defense to GCC and North African Region. As the weight age of fire security business in Middle East is high in the total consolidated revenue, performance has been affected adversely. The performance of Zicom SaaS Private Limited, a wholly-owned Indian subsidiary, has been exceptionally well, which shows significant growth on account of new addition of Banks and other Enterprise Customers for ATM and Facility Surveillance.
The initiative of the Central Government to remove custom duties on import of CCTV equipment in Budget of 2016 has made significant impact on electronic security industry. However, this sudden change has unfortunately impacted the valuation of existing inventories held by the Company and resulted in a onetime adjustment impact in profitability for the financial year under review. Further, with environment in our Distribution Business continuing to be competitive, margins were under severe pressure, impacting adversely the standalone performance.
In Unisafe India, your Company''s focus continued to work as Global Design Centre by catering to the design, engineering and estimate needs of all our projects in Gulf Region. Our two wholly-owned subsidiaries in Singapore, viz. Unisafe Fire Protection Specialists Singapore Pte. Ltd. (Unisafe Singapore) and Zicom Security Projects Pte. Ltd. (Zicom Singapore) continues to hold our investment in Phoenix Qatar.
DIVIDEND
Keeping in view the affected performance of the Company and also with a view to conserve resources to meet the business requirements, your Directors have recommend dividend for the financial year 2015-16 at a lower rate of Rs. 0.50 per Equity Share of Rs. 10 each (i.e. 5%) (previous year Rs. 1.20) on share capital of 20,199,829 Equity Shares (previous year 20,199,829 Equity Shares) of the Company. This dividend will entail a total outgo of Rs. 12,156,020 (Rs. 29,174,436) which shows decrease of 58%. The dividend outgo is lower on account of decrease in rate of dividend. The dividend will be paid to Members whose names appear in the Register of Members as on September 21, 2016 and in respect of shares held in dematerialized form, it will be paid to Members whose names are furnished by National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL), as beneficial owners as on that date.
FINANCE
Subsequent to end of the year under review, on August 9, 2016, the Company has cancelled 1,050,000 Warrants due to non-exercise of the option by the Warrant-holders. As a result of same, the application money received upon allotment of said Warrants (calculated @ Rs. 40 per Warrant, being 25% of share price of Rs. 160 to be issued upon exercise of option by the Warrant-holders) were forfeited and the Securities Premium Account of the Company increased by Rs. 42,000,000.
The aforesaid Warrants were allotted by the Company on February
10, 2015 to Promoters'' Group Companies i.e. Baronet Properties and Investments Private Limited and Coronet Properties and Investments Private Limited (525,000 Warrants each) with an option to Warrant-holders to acquire one Equity Share of Rs. 10 each, of the Company at a conversion price of Rs. 160 per Equity Share. This option was to be exercised on or before August 9, 2016. SUBSIDIARY AND JOINT VENTURE COMPANIES As on March 31, 2016, your Company had the following subsidiaries:
1. Zicom SaaS Private Limited (wholly owned subsidiary);
2. Unisafe Fire Protection Specialists Singapore Pte. Ltd., Singapore (wholly-owned subsidiary);
3. Unisafe Fire Protection Specialists LLC, Dubai (step-down subsidiary);
4. Phoenix International WLL, Qatar (step-down subsidiary);
5. Unisafe Fire Protection Specialists India Private Limited (wholly-owned subsidiary); and
6. Zicom Security Projects Pte. Ltd., Singapore (wholly-owned subsidiary)
A statement containing salient features of the financial statement of subsidiaries for 2015-16 as required under Section 129(3) of the Companies Act, 2013 read with Rule 5 of the Companies (Accounts) Rules 2014 and amendment there under is provided in Annexure A hereto in prescribed Form AOC-1. In respect of foreign subsidiary companies, figures in rupees are converted from applicable foreign currency at appropriate exchange rate as on year end date. The Policy on Material Subsidiary as approved may be accessed on the Company''s website at the link: http://beta.zicom.com/img/pdf/ZESSL-Policy on Material Subsidiary.pdf
T h e det ails of key subsidiaries and highlights of their workings are given below:
Zicom SaaS Private Limited
Zicom SaaS has turned up with excellent performance during the year under review, which is evident from the fact that it has posted Total Income of '' 481,987,014 (previous year Rs. 335,496,922) and Net Profit of Rs. 31,791,381 (previous year Rs. 13,293,907) for the financial year ended March 31, 2016. Thus, although in the topline of consolidated results, Zicom SaaS''s contribution may not be substantial; in the consolidated bottomline its contribution has been noteworthy.
This subsidiary offers wide range of managed electronic security services (e-SaaS). The two focus areas for Zicom SaaS are Enterprise division and Make Your City Safe (MYCS) division, where it makes offering of Security as a Service (SaaS).
While Enterprise division, mainly caters to BFSI sectors (Banks, Financial Services and Insurance), the other two sectors where the business is picking up are Retail and Education. Making use of the latest technology, this division offers customized security services to enable management of business more effectively. Various solution packages are offered under e-SaaS (i.e. Security as a Service). The other division being run by Zicom SaaS is Make Your City Safe (MYCS). MYCS caters to housing & residential societies in Greater Mumbai and Pune cities in Maharashtra providing right choice of technology to residential sector without making capital expenditure. This is facilitated through monthly service fees (EMI form), which has increase the affordability of surveillance services to residential sector.
In addition, a safety app called "Ziman" launched by this subsidiary has received overwhelming response. Ziman leverages Zicom Command Centre (also being operated under Zicom SaaS) and offers a strong backend support and all-in-one mobile safety solution. Enthused by the success of free App of Ziman, the Company has also launched Ziman''s paid offering.
Unisafe Fire Protection Specialists LLC, Dubai Unisafe Dubai is one of the major contributor to the consolidated topline and bottomline. However, on account of weakening of crude prices and consequential of slowdown of economy in entire Middle East, performance of Unisafe Dubai has suffered a setback. For the financial year ended March 31, 2016, Unisafe Dubai has posted Total Income of Rs. 5,137,190,113 (as compared to Rs. 5,443,255,742 in the previous year) and a Net Profit of Rs. 33,950,450 (as compared to Rs. 454,061,092 in the previous year). Unisafe Dubai, a leading fire protection company in Dubai, UAE, is a step-down subsidiary of your Company owned 41% by Unisafe Singapore, our wholly owned subsidiary and 8% directly by your Company, making total stake of Zicom Group in this Company at 49%; and the balance 51% is held by our local partner. However, Zicom Group has economic interest of 95% in Unisafe Dubai. It has got presence in seven Emirates, Qatar and Oman and has got exceptional track record of part performance. Its clientele ranges from Government to corporate, refineries, shopping malls and multistorey buildings, etc. to whom it provides comprehensive range of solutions from fire protection needs.
Phoenix International WLL, Qatar
For the financial year ended March 31, 2016, Phoenix Qatar, posted Total Income of Rs. 1,380,355,335 (as compared to Rs. 1,414,389,855 in the previous year) and a Net Profit of Rs. 30,363,148 (as compared to Rs. 143,754,604 in the previous year). This is another step-down subsidiary in which Zicom Group holds 49% stake; 44% by Unisafe Singapore and 5% by your Company. However, Zicom Group''s entitlement in economic interest in Phoenix Qatar is 95%.
Like, Unisafe Dubai, Phoenix Qatar has also suffered a set-back in its operations for the same reason as explained under Unisafe Dubai above. However, extent of set-back in operations is less severe in case of Phoenix Qatar. This subsidiary has also substantial impact on consolidated topline and bottomline of the Company. Unisafe Fire Protection Specialists India Private Limited
This is a wholly-owned subsidiary in India which has also suffered adverse impact on its operations as can be seen from its working results for the financial year ended March 2016. Unisafe India has shown total income of '' 86,699,825 (previous year Rs. 169,419,928) and a Net Loss of Rs. 5,451,305 (previous year Net Loss Rs. 7,238,748) in the year under review.
This business focuses on catering to the needs of design and engineering requirements of fire protection business in Gulf region by acting as a Global Design Centre and also as a trader in fire safety and security equipments.
The turnover and profitability of this Company does not have much impact on consolidated results of the Company.
Unisafe Fire Protection Specialists Singapore Pte. Ltd., Singapore and Zicom Security Projects Pte. Ltd., Singapore
Both these companies are Company''s wholly-owned subsidiaries in Singapore, incorporated with a view to internationally align and consolidate present and future investments of the Group. The Group overseas investment in fire business falls under the umbrella of Unisafe Singapore acting as a holding company for all such ventures, whereas Zicom Singapore, aimed as a holding company for Group investment in international electronic security business.
CONSOLIDATED FINANCIAL STATEMENTS
As per Section n 134 of the Companies Act, 2013, your Company has provided the audited Consolidated Financial Statements for the year ended on March 31, 2016; together with Auditors'' Report thereon forming part of this Annual Report, which includes financial information of all the subsidiaries. These documents will also be available for inspection during the business hours at the Registered Office of your Company and the respective subsidiary companies. Pursuant to the provisions of the Section 129(3) of the Companies Act, 2013 read with Rule 5 of the Companies (Accounts) Rules, 2014 and amendment thereof, a statement containing salient features of the financial statements of Company''s Subsidiaries for financial year 2015-16 (in Form AOC-1) is appended as Annexure A hereto. Your Company has placed the audited annual accounts and related information of subsidiary companies on its website and same will be made available to the Members upon request.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
Directors:
During the year under review, Mr. Vijay Kalantri (DIN: 00019510), Independent Director resigned from the Directorship of the Company w.e.f. December 17, 2015.
Further, Ms. Kunjan Trivedi (DIN: 07131011) whose term as a Whole-time Director of the Company ended on March 25, 2016, ceased to be Director effective from the said date. The Company is looking out for a suitable woman candidate having experience in IT Security Industry for the post of Director, whose experience and knowledge in the security industry will benefit the Company in its business growth.
In accordance with provisions of the Companies Act, 2013 and Articles of Association of the Company, Mr. Manohar Bidaye (DIN: 00010699) is the Director liable to retire by rotation at the ensuing Annual General Meeting and has offered himself for re-appointment.
On December 18, 2015, Mr. Sanjeev Dayal (DIN: 03490363), was appointed as an Additional Director under Section 161 of the Companies Act, 2013 to hold office till the date of the ensuing Annual General Meeting. Mr. Dayal being eligible, has offered himself for appointment as an Independent Director, not liable to retire by rotation.
The first term of Mr. K. D. Hodavdekar and Mr. Prabhakar Dalal, Independent Directors, appointed pursuant to Section 149 of the Companies Act, 2013, ended on March 31, 2016 and June 26, 2016 respectively. The Board of Directors at their meetings held on March 31, 2016 and June 26, 2016 appointed Mr. Hodavdekar and Mr. Dalal as Additional Directors, effective from April 1, 2016 and June 27, 2016 respectively; and proposed their appointments as Independent Directors for their second term, pursuant to Section 149 of the Act, for approval of the Members at the ensuing Annual General Meeting by Special Resolutions.
Pursuant to Section 161 of Companies Act, 2013, the Company has received requisite notices, in writing from Members proposing the candidature of Mr. Sanjeev Dayal, Mr. K. D. Hodavdekar and Mr. Prabhakar Dalal for the office of Independent Directors, not liable to retire by rotation. Their appointments shall be subject to the approval of Members at the forthcoming Annual General Meeting
The brief profiles of Mr. Sanjeev Dayal, Mr. K. D. Hodavdekar and Mr. Prabhakar Dalal are given in Notice of the Annual General Meeting and discussed at length in the Corporate Governance Report.
Your Directors recommend the above appointments for your approval.
Besides, subsequent to the year end, Mr. Venu Raman Kumar, a Non-Independent / Non-Executive Director resigned w.e.f. August 9, 2016.
The Company has received declarations from all the Independent Directors of the Company confirming that they meet with the criteria of independence as prescribed under provisions of the Companies Act, 2013, Rules thereunder and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations").
Mr. Pramoud Rao, Managing Director of the Company, whose remuneration package includes commission, is appointed as the Managing Director of Zicom SaaS Private Limited, a wholly owned subsidiary of the Company, w.e.f. March 30, 2015 and is entitled for remuneration from the said subsidiary as per terms of his remuneration approved. However, for the year under review,
Mr. Rao has neither received any commission from the Company nor has received any remuneration from the said subsidiary.
Key Managerial Personnel:
Ms. Kunjan Trivedi, Company Secretary was appointed as a Whole time Director of the Company on the Board for a period of one year, effective from March 26, 2015 and as such she ceased as a Director effective from March 25, 2016. However, she continues to be Company Secretary of the Company. In view of the above, the position of Key Managerial Personnel is as under:
Name of Key Managerial Personnel |
Designation |
Mr. Pramoud Rao |
Managing Director |
Mr. Hemendra Paliwal |
Chief Financial Officer |
Ms. Kunjan Trivedi |
Whole-time Director (up to March 25, 2016) & Company Secretary |
BOARD EVALUATION
In accordance with the requirements of the Companies Act, 2013 and Listing Regulations, the Board evaluation process was carried out. The Board / Nomination and Remuneration Committee of Directors have laid down the criteria for evaluation of the performance of the Board, its Committees and individual Director. A structured questionnaire prepared covering various aspects of the Board''s functioning such as adequacy of the composition of the Board and its Committee, Board procedures, development, e tc. was circulated to Directors for the purpose of evaluation.
The Board and Nomination and Remuneration Committee of Directors reviewed the performance of the individual Directors on the basis of set criteria''s.
The Independent Directors, at its separate meeting, carried out performance evaluation of Board as a whole, its Committees, Chairman of the Company and Non-Independent Directors. The same was discussed in the Board meeting that followed the meeting of Independent Directors, at which performance of the Board, its Committees and individual Directors was also discussed. REMUNERATION AND NOMINATION POLICY The Board of Directors has framed a Policy which lays down the framework in relation to remuneration to Directors, Key Managerial Personnel and Senior Management of the Company. This Policy also lays down criteria for selection and appointment of Board Member. The Policy is provided in Annexure B to this Report.
AUDITORS AND THEIR REPORT
At the previous Annual General Meeting held on September 29, 2015, M/s. Shyam Malpani & Associates, Chartered Accountants, Mumbai, were appointed as Statutory Auditors of the Company to hold office from that Annual General Meeting until the conclusion of the ensuing Annual General Meeting. On August 10, 2016, the Company received a communication from the Auditors informing that effective from July 22, 2016 the constitution of their Firm has been changed from proprietorship to partnership and also the name has changed from M/s. Shyam Malpani & Associates to
M/s. S M M P & Associates. In view of this, M/s. S M M P & Associates holds the office as Statutory Auditors of the Company till the ensuing Annual General Meeting and are eligible for re-appointment.
As required under provisions of Section 139 and Section 141 of the Companies Act, 2013, the Company has obtained a written consent and certificate from them in respect of the proposal for their re-appointment to the effect that their re-appointment, if made, would be in conformity with the criteria specified in the said sections. The Auditors'' Report does not contain any qualification, reservation or adverse remark. Further, with regard to emphasis of matter as per clause IV in the Auditors'' Report, your Directors wish to state that the said emphasis of matter read with Note No. 25.8 of Standalone Financial Statements is self-explanatory and does not require any further explanation. Your Directors would like to add that the said matter will not have any material adverse effect on the functioning of the Company.
The Board recommends the re-appointment of M/s. S M M P & Associates, Chartered Accountant, for your approval.
SECRETARIAL AUDIT
Pursuant to the provisions of Section 204 of the Companies Act,
2013 and Rules there under, the Company has appointed Ganesh Narayan & Co, Company Secretaries in Practice (CP No. 2238) to conduct Secretarial Audit of the Company for the financial year 2015-16. The Secretarial Audit Report for the financial year ended March 31, 2016 is annexed herewith as Annexure C (as Form MR-3) to this Report. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.
DIRECTORS'' RESPONSIBILITY STATEMENT Pursuant to Section 134 of the Companies Act, 2013, based on the representations received from the operating management, your Directors hereby state that -
a) in preparation of the annual accounts for the year ended March 31, 2016, the applicable accounting standards read with requirements set out under Schedule III to the Act, have been followed and there are no material departures from the same;
b) the Directors 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 as at March 31, 2016 and of the profit / loss 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 that such systems are adequate and operating effectively.
MEETINGS OF THE BOARD
Six (6) meetings of the Board of Directors were held during the year under review. For further details, please refer Section II (F) - Other provisions related to Board and Committees of the Corporate Governance Report forming part of this Report.
COMMITTEES OF THE BOARD
The details of the Committees of the Board constituted under the Companies Act, 2013 and Listing Agreement / Listing Regulations are given under Section III - Board Committees of the Corporate Governance Report forming part of this Report.
PARTICULARS OF LOANS GIVEN, INVESTMENTS MADE, GUARANTEES GIVEN AND SECURITIES PROVIDED
Particulars of loans given, investments made, guarantees given and securities provided are given in the standalone financial statements. Further, following are the purposes for which the loans or guarantees or securities are proposed to be utilized by the recipient:
Name of Recipient Entity |
Relation |
Purpose for which the loans, guarantees and securities are proposed to be utilized |
Unisafe Fire Protection Specialists LLC, Dubai |
Subsidiary |
Business Purpose |
Unisafe Fire Protection Specialists Singapore Pte. Ltd., Singapore |
Subsidiary |
Business Purpose |
Zicom Security Projects Pte. Ltd., Singapore |
Subsidiary |
Cash Management |
Phoenix International WLL, Qatar |
Subsidiary |
Business Purpose |
Zicom SaaS Pvt. Ltd., India |
Subsidiary |
Business Purpose |
Unisafe Fire Protection Specialists India Pvt. Ltd., India |
Subsidiary |
Business Purpose |
RELATED PARTY TRANSACTIONS
All transactions entered with related parties during the year 2015-16 were on arm''s length basis and in the ordinary course of business and that the provision of Section 188(1) of the Companies Act, 2013 are not attracted. Hence the particulars to be disclosed in this regards in Form AOC-2 is Nil. Further, during the year under review, there were no material related party transactions.
The Audit Committee and the Board of Directors have approved the Related Party Transaction Policy, which has been prepared in consonance with provisions of Regulation 23 of the Listing Regulations and Companies Act, 2013. The same has been uploaded on the Company''s website at the link: http://beta.zicom.com/img/pdf/ZESSL-Related Party Transaction Policy.pdf.
All Related Party Transactions are being placed before the Audit Committee for approval. Omnibus approvals are also obtained for transactions which are of repetitive nature. Such transactions are placed before the Audit Committee and Board (as required) for periodical review and approval.
VIGIL MECHANISM / WHISTLE BLOWER POLICY Pursuant to Section 177(9) of the Companies Act, 2013 and Regulation 22 of the Listing Regulations, the Company has formulated Vigil Mechanism / Whistle Blower Policy for Directors and employees to report to the management about the unethical behavior, fraud or violation of Company''s Code of Conduct. The mechanism provides for adequate safeguards against victimization of employees and Directors who use such mechanism and makes provision for direct access to the Chairperson of the Audit Committee in exceptional cases. The said Committee oversees implementation of the Whistle Blower Policy of the Company. The said Policy as approved may be accessed on the Company''s website at the link: http://beta.zicom.com/img/pdf/ZESSL-Whistle Blower Policy.pdf.
MATERIAL CHANGES AND COMMITMENTS As informed under Finance Section above, subsequent to end of the year under review, on August 9, 2016, the Company has cancelled 1,050,000 Warrants due to non-exercise of the option by the Warrant-holders. As a result of same, the application money received upon allotment of said Warrants (calculated @ Rs. 40 per Warrant, being 25% of share price of Rs. 160 to be issued upon exercise of option by the Warrant-holders) were forfeited and the Securities Premium Account of the Company increased by Rs. 42,000,000.
Except for the above, there have not been any other material changes and commitments affecting the financial position of the Company between the end of the financial year of the Company as on March 31, 2016 and the date of this Report.
RISK MANAGEMENT
The Company already has in place the system to inform the Board about the risk assessment and minimization procedure. The risk management system identifies and assesses various risks associated with the Company and its business and finds out and suggests measures to mitigate them. This also includes mechanisms for their proper and timely monitoring and reporting. In this regard, the Company has framed policy to identify and evaluate business risks, and to mitigate them. The Policy defines the risk management approach at various levels including documentation and reporting. The Policy helps in identifying risks trend, exposure and potential impact analysis at Company level and also separately for each business division of the Company. The risk management system is periodically evaluated by the Audit Committee / Board in the light of changing business scenario. Accordingly, new risks are identified, and modified mechanism & procedure for risk assessment and minimization are adopted to ensure that executive management controls risk by means of properly defined framework. Progress in this regard is periodically reported to Audit Committee / Board for their review and corrective actions, required if any. This is a continuous process which enables the Company to keep its risk management system updated and robust in view of fast changing economic and business scenario affecting the Company.
EXTRACT OF ANNUAL RETURN
The Extract of Annual Return of the Company as on the financial year ended on March 31, 2016, in Form MGT-9, as required under Section 92 of the Companies Act, 2013 read with Rule 12 of the Companies (Management and Administration) Rules, 2014, is appended herewith as Annexure D to this Report.
CORPORATE GOVERNANCE
A separate section on Corporate Governance, together with a certificate from your Company''s Auditors confirming compliance of the conditions of Corporate Governance as stipulated under Listing Regulations is appended herewith as Annexure G forming part of this Report.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
Pursuant to the provisions of Section 134(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 relevant information are given hereunder:
A. Conservation of Energy
The Company''s operations include selling, distributing, marketing and installing of electronic security systems, gadgets and equipments and monitoring them; and as can be obs erved s uch operations do not involve much use of energy. However, your Company makes every possible effort to conserve energy at all levels of its operations.
(i) The steps taken or impact on conservation of energy:
At offices and workplaces, creating awareness among employees, contractual workers and customers about modes and means of energy saving through utilization of energy saving systems, devices and equipments; and inculcating a habit in them to strive for conservation and saving of energy.
The above has helped the Company in keeping its energy cost under control.
(ii) The steps taken by the Company for utilizing alternate sources of energy:
As the operations of your Company does not involve much use of energy, the possibility of using alternate source of energy as a measure of conservation of energy in its operations are minimal.
(iii) The capital investment on energy conservation equipments: No material capital investment on energy conservation equipments has been made during the year by your Company.
B. Technology Absorption
As your Company has not imported any technology, the required information to be provided in this regard is Nil. Your Company is continuously working on improving its indigenous products and software. Your Company continuously strives to provide electronic security systems, gadgets and equipments based on latest technology. Further, the details of expenditure incurred on the research and development are Nil.
C. Foreign Exchange Earnings and Outgo and Export Market Developments
Your Company has earned Rs. 112,352,810 (previous year Rs. 59,750,165) in foreign currency and has spent Rs. 204,676,978 (previous year Rs. 237,424,758) in foreign exchange during the year under review. The details of the same are available at Note No. 25.17 being Notes forming part of the Financial Statements.
PARTICULARS OF EMPLOYEES
The disclosure 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 in respect of employees of the Company is appended as Annexure E to this Report.
In terms of the provisions of Section 197(12) of the Companies Act, 2013 read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules,
2014 and amendment thereof, during the year under review, there was no employee under the employment of your Company, who was in receipt of remuneration of Rs. 12,000,000 (before notification Rs. 6,000,000) or more per annum, if employed for the entire year, or a remuneration of Rs. 850,000 (before notification Rs. 500,000) or more per month, if employed during any part of the said year. Hence, the information required to be furnished in this regard is Nil.
At present the Company does not have any Employee Stock Option Plan / Scheme nor does it have any live stock options pending to be exercised.
HUMAN RESOURCES
The Human Resource (HR) is truly a strategic business partner in the growth of your Company. Our HR philosophy is developed around the fundamental of creating value through our most valued resource "Zi-Champ" to drive profitable growth and make Zicom a preferred choice of employer. HR has developed and maintained friendly, transparent and professional work culture woven into the fabric of the company''s environment with strong business ethics.
HR has time and again used innovation in hiring talent in Zicom. With usage of high end assessment tools and latest hiring channels like social media, campus selection, references (Talent Connect) and job portals, HR has hired the best talent from the industry at competent compensation & benefits. HR has created benchmark in the Fire and Security Industry by hiring the Engineers through Pool Campus Recruitment from Tier II and III cities.
In order to fulfill our vision of value creation, a number of developmental initiatives have been undertaken which interalia includes employee branding and a series of learning sessions from senior management within the organization which helps them to serve the customer well.
During the financial year under the review, HR organized Employee connect programs wherein the Zi-Champs were cross functionally bonded with each other and took up fun activities as a team. The most appreciated initiative was "Meet the Top" which helped Employees to connect and share ideas directly with respective Business Heads and Managing Director of the Company.
As on March 31, 2016 the total numbers of direct and indirect employees were standing at 171.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
In compliance with provisions under the Companies Act, 2013, a Corporate Social Responsibility (CSR) Committee has been constituted and also a CSR policy has been adopted by the Company.
Pursuant to Rule 8 of the Companies (Corporate Social Responsibility Policy) Rules, 2014, the requisite details on CSR is given under Annexure F appended to this Report.
A provision of Rs. 851,000 made during the year for CSR activities, however the said amount was unspent during the year under review.
INTERNAL FINANCIAL CONTROLS AND ITS ADEQUACY
Your Company follows current best practices in internal audit and risk management system. Internal Audit System monitors the adequacy and effectiveness of the internal control as per the policy and procedures framed and also under the supervision and guidance of the Audit Committee. It is supported by the enterprise resource planning platform for all business process.
All transactions are properly authorized, recorded and presented to the Management. Your Company observes all the accounting standards prescribed for proper maintenance of books of accounts and reporting of financial statements.
The Internal Control inter-alia facilitates:
- Review of long-term business and annual plans
- Adherence to applicable accounting standards and policies
- Periodic review and rolling forecasts
- Proper accounting and review mechanism
- Compliance with applicable statutes, listing requirement and internal policies and procedures
- Audit on concurrent basis, carried out by an internal auditor covering all statutes and compliance requirements
- IT systems with adequate in-built controls and security
GENERAL
Your Directors 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:
1. Details relating to deposits covered under Chapter V of the Act.
2. Issue of equity shares with differential rights as to dividend, voting or otherwise.
3. Issue of shares (including sweat equity shares) to employees of the Company under any scheme.
4. No significant or material orders were passed by the Regulators or Courts or Tribunals that would impact the going concern status of the Company and its future operations.
5. The Company has in place policy as per the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. During the year, no case was reported to the Committee constituted under the said Act.
ACKNOWLEDGMENTS
Your Directors wish to place on record their sincere appreciation and thanks for the valuable co-operation and support received from the employees of your Company at all levels, Companyâs Bankers, lenders, suppliers, Government authorities, business partners and Members of the Company; and look forward for the same to even greater extent in the coming year.
For and on behalf of the Board of Directors
Manohar Bidaye
Chairman
Place: Mumbai
Date: August 12, 2016
Registered Office:
501, Silver Metropolis,
Western Express Highway,
Goregaon (East), Mumbai 400063.
Mar 31, 2015
The Directors presents their Twenty First Annual Report, together with
the Audited Accounts of the Company for the Financial Year ended March
31, 2015.
FINANCIAL HIGHLIGHTS:
(Amount in Rs,)
Particulars March 31, 2015 March 31, 2014
Consolidated Consolidated
Net Sales / Income from Operations 11,081,171,351 9,260,956,985
Other Income 47,357,288 25,318,584
Total Income 11,128,528,639 9,286,275,569
Total Expenditure 9,681,708,594 8,176,579,557
Gross Profit before Interest and
Depreciation 1,446,820,045 1,109,696,012
Interest and Finance Charges 538,681,427 349,350,690
Gross Profit before
Depreciation and Taxation 908,138,618 760,345,322
Depreciation 307,690,027 249,284,173
Profit Before Tax, Exceptional & 600,448,591 511,061,149
Extraordinary
Items
Exceptional Item -- 45,954,516
Extraordinary Items
Profit Before Tax 600,448,591 465,106,633
Provision for Taxation:
Current year 81,563,000 28,967,000
Deferred -16,293,617 -10,084,269
Taxation of earlier years
Net Profit After Taxation 535,179,208 446,223,902
Less: Minority Interest 29,326,311 26,798,053
Profit for the year 505,852,897 419,425,849
Add: Balance brought forward 1,439,640,634 1,256,852,427
from previous
year
Add: Transfer of Economic Interest -- 202,318,612
Profit available for Appropriation 1,945,493,531 1,878,596,888
APPROPRIATIONS:
Transfer to General Reserve 43,859,899 2,500,000
Provision for Dividend 24,239,795 24,529,430
Provision for Tax on Dividend 4,934,641 3,426,824
Buy Back of Economic Interest -- 408,500,000
Adjustment Relating to Fixed Asset 4,502,111
Balance of Profit carried forward 1,867,957,085 1,439,640,634
to Balance Sheet
Particulars March 31,2015 March 31,2014
Standalone Standalone
Net Sales / Income from Operations 3,835,240,358 3,230,634,433
Other Income 70,082,893 64,447,673
Total Income 3,905,323,251 3,295,082,106
Total Expenditure 3,516,906,986 2,969,676,670
Gross Profit before Interest and 388,416,265 325,405,436
Depreciation
Interest and Finance Charges 147,546,760 97,265,130
Gross Profit before 240,869,505 228,140,306
Depreciation and Taxation
Depreciation 67,377,781 77,463,807
Profit Before Tax, Exceptional & 173,491,724 150,676,499
Extraordinary
Items
Exceptional Item -- 51,776,297
Extraordinary Items -- --
Profit Before Tax 173,491,724 98,900,202
Provision for Taxation:
Current year 74,990,000 27,140,000
Deferred -14,517,786 -9,769,253
Taxation of earlier years -- --
Net Profit After Taxation 113,019,510 81,529,455
Less: Minority Interest -- --
Profit for the year 113,019,510 81,529,455
Add: Balance brought forward 551,854,924 497,372,088
from previous
year
Add: Transfer of Economic Interest -- --
Profit available for Appropriation 664,874,434 81,529,455
APPROPRIATIONS:
Transfer to General Reserve 2,500,000 2,500,000
Provision for Dividend 24,239,795 21,119,795
Provision for Tax on Dividend 4,934,641 3,426,824
Buy Back of Economic Interest -- --
Adjustment Relating to Fixed Asset 4,502,111 --
Balance of Profit carried forward 628,697,887 551,854,924
to Balance Sheet
OPERATIONAL PERFORMANCE
At the outset your Directors are pleased to report that the year ended
March 31, 2015 has been a milestone in the Company's history with it
crossing Rs. 1,100 crores turnover mark on consolidated basis. This
coinciding with the Company completing its successful existence for 20
years is a matter of pride for all of us.
We are pleased to report that the financial year 2014-15 resulted in
the Company to end the year with good performance, on both standalone
as well as consolidated basis.
On consolidated basis, the Total Income for the year 2014-15 was Rs.
11,128,528,639 (previous year Rs. 9,286,275,569) and the Profit Before
Exceptional Items and Tax was Rs. 600,448,591 (previous year Rs.
511,061,149). After adjusting for Exceptional Item Rs. Nil (previous year
Rs.45,954,516) and Tax Rs. 65,269,383 (previous year Rs. 18,882,731), Net
Profit After Tax was at Rs. 535,179,208 (previous year Rs.446,223,902).
After accounting for Minority Interest there from the Net Profit After
Tax and Minority Interest at Rs. 505,852,897 is higher by 21% as compared
to Rs. 419,425,849 of previous year.
The Consolidated Financial Statements (CFS) includes the financial
statements of Zicom Electronic Security Systems Limited ("the Company")
and its subsidiary companies, namely,
a) Zicom SaaS Private Limited ("Zicom SaaS");
b) Unisafe Fire Protection Specialists Singapore Pte. Ltd. ("Unisafe
Singapore") and its subsidiaries, viz. Unisafe Fire Protection
Specialists LLC, Dubai ("Unisafe Dubai") and its subsidiaries, and
Phoenix International WLL, Qatar ("Phoenix Qatar");
c) Unisafe Fire Protection Specialists India Private Limited ("Unisafe
India"); and
d) Zicom Security Projects Pte. Ltd., Singapore ("Zicom Singapore")
On standalone basis, the Total Income for the year 2014-15 was Rs.
3,905,323,251 (previous year Rs. 3,295,082,106). The Other Income also
included dividend from subsidiaries received during the year under
review amounting to Rs. Nil (previous year Rs. 6,592,000). The Profit
Before Exceptional Item and Tax was Rs. 173,491,724 (previous year Rs.
150,676,499). After adjusting for Exceptional Item Rs. Nil (previous year
Rs. 51,776,297) and Tax Rs. 60,472,214 (previous year Rs. 17,370,747), Net
Profit After Tax at Rs. 113,019,510 is higher by 39% as compared
to Rs.81,529,455 of previous year.
Further as can be seen from the Consolidated Financial Results given
above, Earnings Before Depreciation, Interest and Tax (EBIDTA) at Rs.
1,446,820,045 (previous year Rs. 1,063,741,496) shows a jump of 36% over
previous year, resulting into increased EBIDTA margin from 12% to 13%.
BUSINESS DEVELOPMENTS AND PROSPECTS
A close look at the consolidated performance of the Company for the
year under review reveals that the performance of the fire security
business of the Company in Middle East has continued to be encouraging,
despite slump in global crude prices. This business is being conducted
under the two flagship subsidiaries, Unisafe Dubai and Phoenix Qatar,
which have successfully achieved all the set targets in terms of
financial performance and customer satisfaction. In view of the fact
that growth rate of about 20% has been achieved by these businesses
despite slowdown; the performance can be rated on higher scale. Another
highlight of good performance is performance reported by Zicom SaaS,
which shown 93% growth in topline and 130% growth in bottomline. This
has been possible due to continued flow of orders from Banks for ATM
Surveillance and from Housing Societies in Mumbai and Pune under Make
Your City Safe (MYCS) Programme. However, the contribution of Zicom
SaaS to the consolidated topline and bottomline is insignificant as
compared to that of fire security business, as SaaS business is at take
off stage.
As can be seen from the consolidated financial results given above, the
Fire Detection and Protection business of Middle East has continued to
be main contributor, with consistently improved performance which
accounts for more than 50% of topline, has been a driving force behind
it. Economies of these countries highly depend on oil and gas. With
crude prices ruling around half the level of its peak price reached
couple of year back, the economies of these countries could have
witnessed recession. However, huge spending by Governments of these
countries in infrastructure, tourism, hospitality and related
facilities in view of planned commercial and sports events like Dubai
World Expo 2020 and Qatar FIFA World Cup 2022 has helped sustaining
economic growth there. Both, Unisafe Dubai and Phoenix Qatar have
gained from this spending resulting into their sustained growth.
In India, with new Government coming into power, high hopes are raised
for economic recovery. With planned heavy spending on infrastructure,
smart cities and commercial and industrial developments, outlook for
our electronic security business particularly Project Solutions
Business under Zicom standalone and Enterprise and MYCS Businesses
under Zicom SaaS has been promising. This coupled with various steps
being taken by the Company in the form of innovative products and
services, helped by government policies and law enforcing agencies, has
strong potential to show better performance in the current year.
In Unisafe India, your Company's focus continued to work as Global
Design Centre by catering to the design, engineering and estimate needs
of all our projects in Gulf Region.
Our two wholly-owned subsidiaries in Singapore, viz. Unisafe Fire
Protection Specialists Singapore Pte. Ltd. (Unisafe Singapore) and
Zicom Security Projects Pte. Ltd. (Zicom Singapore) continues to hold
our investment in Phoenix Qatar and Joint Venture (JV) investment in
CiaoZicom Security Systems SA, Brazil respectively.
DIVIDEND
With a view to conserve resources to meet the business requirements,
your Directors have recommend a dividend of Rs. 1.20 (Rs. 1.20) per Equity
Share of Rs. 10 each (i.e. 12%) on enhanced share capital of 20,199,829
Equity Shares (17,599,829 Equity Shares) of the Company for the
financial year 2014-15. This dividend will entail a total outgo of Rs.
29,174,436 (Rs. 24,546,619) which shows increase of 19%. The dividend
outgo is higher on account of enhanced share capital and increase in
rate of dividend tax.
The dividend will be paid to Members whose names appear in the Register
of Members as on September 21, 2015 and in respect of shares held in
dematerialized form, it will be paid to Members whose names are
furnished by National Securities Depository Limited and Central
Depository Services (India) Limited, as beneficial owners as on that
date.
During the year in February 2015, 1,050,000 Warrants were issued and
allotted to Promoter Group Companies on preferential basis. These
Warrants entitle their holders to acquire equal number of equity shares
on the terms and conditions of their issue. If entire of these Warrants
or part of them are converted into equal number of Equity Shares, it
may create an obligation on the Company to pay dividend for the
Financial Year 2014-15 @ Rs.1.20 per Equity Share, on such number of
Equity Shares, which may be allotted on or before the record date fixed
for deciding entitlement for the said dividend i.e. September 21, 2015.
FINANCE
During the year, the Company raised total Rs. 458,000,000 by preferential
issue in accordance with SEBI's Guidelines for Preferential Issue, i.e.
Chapter VII of SEBI ICDR Regulations. Under the said preferential
issue, allotment of 2,600,000 Equity Shares of Rs. 10 each for cash at a
price of Rs. 160 per share, aggregating to Rs. 416,000,000 was made on
February 18, 2015 to non-promoter individuals / entity
Further, 1,050,000 Warrants, each Warrant carrying an entitlement to
subscribe to one Equity Share of Rs. 10 each of the Company, were issued
to Promoter Group Companies in accordance with SEBI's Guidelines for
Preferential Issue. The holders of the said Warrants have right to
acquire one Equity Share of the Company at a price of Rs. 160 per share,
which assuming full conversion of Warrants into Equity Shares amounts
to Rs. 168,000,000. The exercise of option to acquire Equity Shares
against the said Warrants has to be within eighteen months from the
date of allotment of the Warrants. The Company received total Rs.
42,000,000 towards Warrant Application Money in accordance with SEBI's
Guidelines for Preferential Issue.
As a result of the above, the Company's Paid-up Share Capital increased
to 20,199,829 Equity Shares of Rs. 10 each aggregating to Rs. 201,998,290.
Also, it's Securities Premium increased by Rs. 390,000,000. Assuming full
conversion and allotment of Equity Shares for the 1,050,000 Warrants
outstanding, post allotment Paid-up Share Capital is expected to be Rs.
212,498,290 comprising of 21,249,829 Equity Shares of Rs.10 each.
SUBSIDIARY AND JOINT VENTURE COMPANIES
As on March 31, 2015, your Company had the following subsidiaries:
1. Zicom SaaS Private Limited (wholly owned subsidiary);
2. Unisafe Fire Protection Specialists Singapore Pte. Ltd., Singapore
(wholly owned subsidiary);
3. Unisafe Fire Protection Specialists LLC, Dubai (step-down
subsidiary);
4. Phoenix International WLL, Qatar (step-down subsidiary);
5. Unisafe Fire Protection Specialists India Private Limited (wholly
owned subsidiary); and
6. Zicom Security Projects Pte. Ltd., Singapore (wholly owned
subsidiary)
A statement containing salient features of the financial statement of
Subsidiaries for 2014-15 as per the Companies Act, 2013 is provided in
Annexure A hereto in prescribed Form AOC-1. In respect of foreign
subsidiary companies, figures in rupees are converted from applicable
foreign currency at appropriate exchange rate as on year end date. The
Policy on Material Subsidiary as approved may be accessed on the
Company's website at the link: http://beta.zicom.com/img/pdf/ZESSL-
Policy_on_Material_Subsidiary.pdf
The details of key subsidiaries and their workings are given below:
Zicom SaaS Private Limited
With a view to capitalize on changing security environment in the
country resulting into evolving consumer needs it was decided to set-up
the business of offering Security as a Service (SaaS) under a separate
wholly owned subsidiary, namely, Zicom SaaS Private Limited. This
subsidiary offers wide range of managed electronic security services
(e-SaaS). The two focus areas for Zicom SaaS are Enterprise and Housing
and Residential segment.
Under Enterprise Division, main contributors are Banks, Financial
Services and Insurance (BFSI companies) which contribute major chunk of
the revenue, and the balance comes from Retail and Education. With the
use of latest technology platform, business enterprises are offered
various customized services under e-SaaS model like Managed Alert
Service, Time & Attendance Service, Remote Fire & Intruder Alarm
Monitoring Service with use of cloud technology and internet, this
business has found speedy acceptance. We have set-up focus on pure
monitoring services revenue for the current year, which with support of
legislative provisions and government and law enforcing authorities,
making CCTV and video surveillance mandatory, has provided good
potential for growth. Similar are the reason for our optimism about
performance in MYCS covering housing and residential segment.
Zicom SaaS has posted Total Income of Rs. 335,496,922 (previous year Rs.
173,833,923) and Net Profit of Rs. 13,293,907 (previous year Rs. 6,077,070)
for the financial year ended March 31, 2015.
Unisafe Fire Protection Specialists LLC, Dubai
Unisafe Dubai, is the leading fire protection company in Dubai, UAE,
having its presence in seven emirates, Qatar and Oman, has been
consistently surpassing its earlier achievements in terms of topline
and bottomline and customer satisfaction. It has got track record of
exceptional performance year after year based on the patronization from
the unstinted confidence and support of its customers.
Unisafe Dubai caters to large spectrum of clientele from Government to
corporate, refineries, shopping malls and multi storey buildings among
others, offering comprehensive range of solutions for all fire
protection needs, starting from the basic hydrant and sprinkler systems
to advance analogue addressable fire alarm systems, specialized gaseous
fire suppression systems, dry and wet chemical extinguishing systems
and water mist fire extinguishing systems. In the area of project
execution and servicing in fire detection and protection in
infrastructure projects, Unisafe Dubai has been recognized as one of
the top brands for almost two decades.
With corporate restructuring, Unisafe Dubai has become a step- down
subsidiary of your Company, in which Unisafe Singapore, our wholly
owned subsidiary, hold 41% stake and balance 8% stake is directly held
by us. With this, total stake of Zicom Group in Unisafe Dubai is 49%
with entitlement in the economic interest being 95%.
Unisafe Dubai has posted Total Income of Rs. 5,350,126,293 (as compared
to Rs. 4,472,112,012 in the previous year) and a Net Profit of Rs.
445,286,900 (as compared to Rs. 398,665,132 in the previous year) for the
financial year ended March 31, 2015.
Phoenix International WLL, Qatar
Phoenix Qatar, is another step-down subsidiary of your Company which
has successfully established itself as one of the leading fire security
solutions provider in Qatar.
With main focus on Fire Prevention and Protection, it has exclusive
tie-up to market safety and security equipments of leading
international supplier. Its offerings includes varied turnkey solutions
for fire protection suppression projects like design, engineering,
integrating, testing and commissioning of Fire Safety, Security and
Building Management Systems. Phoenix Qatar has to its credit large
spectrum of clientele from Government to corporate, refineries,
shopping malls, multi storey buildings, hotels and resorts, etc. some
of which being very prestigious projects in Qatar. Further, it is one
of the few to possess a license to operate in petrochemical sector.
Post corporate restructuring of Zicom Group last year, Phoenix Qatar
had become a step-down subsidiary of your Company with 49% stake; of
which 44% held by Unisafe Singapore and balance 5% held by your
Company. Zicom Group's entitlement in economic interest in Phoenix
Qatar is 95%.
During the year under review Phoenix Qatar, posted Total Income of Rs.
1,391,230,255 (as compared to Rs. 1,222,147,344 in the previous year) and
a Net Profit of Rs. 141,239,321 (as compared to Rs. 137,295,919 in the
previous year) for the financial year ended March 31, 2015.
Unisafe Fire Protection Specialists India Private Limited
Working results of Unisafe India for the financial year ended March 31,
2015 shows Total Income of Rs. 169,334,357 (previous year Rs. 155,631,085)
and a Net Loss of Rs. 7,238,748 (previous year Net Loss Rs. 1,471,989).
Originally set-up as a wholly owned subsidiary with a view to gain
benefit out of the expertise gained from the success of fire safety and
security business in Middle East; later on diverted its focus on
catering to the needs of design and engineering requirements of fire
protection business in Gulf region by acting as a Global Design Centre
and also act as trader in fire safety and security equipments.
Unisafe Fire Protection Specialists Singapore Pte.
Ltd., Singapore and
Zicom Security Projects Pte. Ltd., Singapore
Unisafe Fire Protection Specialists Singapore Pte. Ltd. (Unisafe
Singapore) and Zicom Security Projects Pte. Ltd. (Zicom Singapore) were
set-up as two wholly-owned subsidiaries in Singapore, as a part of
global corporate restructuring of Zicom Group with a view to
internationally align and consolidate present and future investments of
the Group. The Group overseas investment in fire business falls under
the umbrella of Unisafe Singapore acting as a holding company for all
such ventures, whereas Zicom Singapore, aimed as a holding company for
Group investment in international electronic security business.
However plans are on hold in view of not so good experience of
CiaoZicom Security Systems SA, Brazil.
CONSOLIDATED FINANCIAL STATEMENTS
As per Section 134 of the Companies Act, 2013, your Company has
provided the audited Consolidated Financial Statements for the year
ended on March 31, 2015; together with Auditors' Report thereon forming
part of this Annual Report, which includes financial information of all
the subsidiaries. These documents will also be available for inspection
during the business hours at the Registered Office of your Company and
the respective subsidiary companies. Pursuant to the provisions of the
Section 129(3) of the Companies Act, 2013 read with Rule 5 of the
Companies (Accounts) Rules, 2014, a statement containing salient
features of the financial statements of Company's Subsidiaries for
2014-15 (in Form AOC-1) is appended as Annexure A hereto. Your Company
has placed the audited annual accounts and related information of
subsidiary companies on its website and same will be made available to
the Members upon request.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
Directors:
In accordance with the provisions of the Companies Act, 2013 and
Articles of Association of the Company, Mr. V. Raman Kumar (DIN:
00245022) is the Director liable to retire by rotation at the ensuing
Annual General Meeting and has offered himself for re-appointment.
On March 26, 2015, Ms. Kunjan Trivedi (DIN: 07131011) was appointed as
an Additional Director under Section 161 of the Companies Act, 2013, to
hold office till the date of the ensuing Annual General Meeting.
Further, the Board of Directors at its said meeting also appointed Ms.
Trivedi as a Whole-time Director of the Company, designated as
"Whole-time Director and Company Secretary", for a period of one year
from March 26, 2015 till March 25, 2016. The terms of her appointment
as Whole-time Director and Company Secretary including the terms of
remuneration shall continue to be governed by the terms of her
appointment as Company Secretary, subject however to applicable
provisions of Companies Act, 2013 read with Schedule V thereto and
subject to approval of Members. Accordingly, resolutions seeking
approval of Members have been proposed at the ensuing Annual General
Meeting for her appointment as a Director liable to retire by rotation,
and also as a Whole-time Director designated as "Whole-time Director
and Company Secretary" and the terms and conditions thereof including
terms of remuneration. With appointment of Ms. Trivedi on the Board,
the Company has complied with the requirements of Clause 49 (II) (A) of
the Listing Agreement.
The Company has received requisite notice, pursuant to Section 161 of
Companies Act, 2013, in writing from Member proposing the candidature
of Ms. Kunjan Trivedi for the office of Director liable to retire by
rotation.
The brief profiles of Mr. V. Raman Kumar and Ms. Kunjan Trivedi are
given in Notice of the Annual General Meeting and discussed at length
in the Corporate Governance Report.
Your Directors recommend the above appointments for your approval.
Besides above, Members are informed that Mr. Prabhakar Dalal (DIN:
00544948) was appointed as an Additional Director on Board on June 27,
2014 and he held office upto the conclusion of Annual General Meeting
(AGM) held on September 5, 2014. He was appointed as an Independent
Director at the AGM held on September 5, 2014.
Further at the said AGM, the Members also approved the appointments of
Mr. Manohar Bidaye (DIN: 00010699) as a Non-Executive Non-Independent
Director liable to retire by rotation and Mr. Mukul Desai (DIN:
00015126); Mr. K. D. Hodavdekar (DIN: 00406556) and Mr. Vijay Kalantri
(DIN: 00019510) as Independent Directors not liable to retire by
rotation.
All Independent Directors of the Company have given declarations
confirming that they meet with the criteria of independence as
prescribed under provisions of the Companies Act, 2013, Rules
thereunder and Clause 49 of the Listing Agreement.
Mr. Pramoud Rao, Managing Director of the Company, whose remuneration
package includes commission, is appointed as the Managing Director of
Zicom SaaS Private Limited, a wholly owned subsidiary of the Company,
w.e.f. March 30, 2015 and is entitled for remuneration from the said
subsidiary as per terms of his remuneration approved. However, for the
year under review, Mr. Rao has not received any remuneration from the
said subsidiary.
Key Managerial Personnel:
During the year under review, the Company has appointed following
persons as Key Managerial Personnel pursuant to the provisions of
Sections 2(51) and 203 of the Companies Act, 2013 read with the
Companies (Appointment and Remuneration of Managerial Personnel) Rules,
2014:
Sr.
No. Name of Key Managerial Personnel Designation
1. Mr. Pramoud Rao Managing Director
2. Mr. Hemendra Paliwal Chief Financial Officer
3. Ms. Kunjan Trivedi Whole-time Director
& Company Secretary
BOARD EVALUATION
In accordance with the requirements of the Companies Act, 2013 and
Clause 49 of the Listing Agreement, the Board evaluation process was
carried out. The Board / Nomination and Remuneration Committee of
Directors have laid down the criteria for evaluation of the performance
of the Board, its Committees and individual Directors. Accordingly, a
structured questionnaire containing criteria's such as Board
composition and structure, effectiveness of Board processes,
information and functioning, etc. was circulated to Directors for the
purpose of evaluation.
The Board and Nomination and Remuneration Committee of Directors
reviewed the performance of the individual Directors on the basis of
set criteria's.
The Independent Directors, at its separate meeting, carried out
performance evaluation of Board as a whole, its Committees, Chairman of
the Company and Non-Independent Directors. The same was discussed in
the Board meeting that followed the meeting of Independent Directors,
at which performance of the Board, its Committees and individual
Directors was also discussed.
NOMINATION AND REMUNERATION POLICY
The Board of Directors has framed a Policy which lays down the
framework in relation to remuneration to Directors, Key Managerial
Personnel and Senior Management of the Company. This Policy also lays
down criteria for selection and appointment of Board Members. The
Policy is provided in Annexure B to this Report.
AUDITORS AND THEIR REPORT
The Statutory Auditors of the Company M/s. Shyam Malpani & Associates,
Chartered Accountants, Mumbai, holds their office until the conclusion
of the ensuing Annual General Meeting and are eligible for
re-appointment.
As required under the provisions of Section 139 and Section 141 of the
Companies Act, 2013, the Company has obtained a written consent and
certificate from M/s. Shyam Malpani & Associates, Chartered
Accountants, Mumbai, proposed to be re-appointed to the effect that
their re-appointment, if made, would be in conformity with the criteria
specified in the said sections. The Auditors' Report does not contain
any qualification, reservation or adverse remark. Further, with regard
to emphasis of matter as per clause IV in the Auditors' Report, your
Directors wish to state that the said emphasis of matter read with Note
No. 25.8 of Standalone Financial Statements is self-explanatory and
does not require any further explanation. Your Directors would like to
add that the said matter will not have any material adverse effect on
the functioning of the Company.
The Board recommends their re-appointment for your approval.
SECRETARIAL AUDIT
Pursuant to the provisions of Section 204 of the Companies Act, 2013
and Rules thereunder, the Company has appointed Ganesh Narayan & Co,
Company Secretaries in Practice (CP No. 2238) to conduct Secretarial
Audit of the Company for the financial year 2014-15. The Secretarial
Audit Report for the financial year ended March 31, 2015 is annexed
herewith as Annexure C to this Report. The Secretarial Audit Report
does not contain any qualification, reservation or adverse remark.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to Section 134 of the Companies Act, 2013, based on the
representations received from the operating management, your Directors
hereby state that
a) in preparation of the annual accounts for the year ended March 31,
2015, the applicable accounting standards read with requirements set
out under Schedule III to the Act, have been followed and there are no
material departures from the same;
b) the Directors have selected such accounting policies and 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 at March 31, 2015 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 that such systems are adequate
and operating effectively.
MEETINGS OF THE BOARD
Seven meetings of the Board of Directors were held during the year
under review. For further details, please refer Section II (F) - Other
provisions related to Board and Committees under the Corporate
Governance Report forming part of this Report.
COMMITTEES OF THE BOARD
The details of the Committees of the Board constituted under the
Companies Act, 2013 and Listing Agreement are given under Section III
in the Corporate Governance Report forming part of this Report.
PARTICULARS OF LOANS GIVEN, INVESTMENTS MADE, GUARANTEES GIVEN AND
SECURITIES PROVIDED
Particulars of loans given, investments made, guarantees given and
securities provided are given in the standalone financial statements.
Further following are the purposes for which the loans or guarantees or
securities are proposed to be utilized by the recipient:
Name of Recipient Entity Relation Purpose for which
the loans, guarantees
and securities are
proposed to be utilized
Unisafe Fire Protection Subsidiary Business Purpose
Specialists LLC, Dubai
Unisafe Fire Protection
Specialists Subsidiary Business Purpose
Singapore Pte. Ltd.,
Singapore
Zicom Security Projects
Pte. Ltd., Subsidiary Cash
Singapore Management
Phoenix International
WLL, Qatar Subsidiary Business Purpose
Zicom SaaS Pvt.
Ltd., India Subsidiary Business Purpose
Unisafe Fire Protection Subsidiary Business Purpose
Specialists India
Pvt. Ltd., India
RELATED PARTY TRANSACTIONS
All transactions entered with related parties for the year March 31,
2015 were on arm's length basis and in the ordinary course of business
and that the provisions of Section 188 of the Companies Act, 2013 are
not attracted. Hence the particulars to be disclosed in this regards in
Form AOC-2 is Nil. Further, during the year under review, there were no
material related party transactions.
The Audit Committee and the Board of Directors have approved the
Related Party Transaction Policy, which has been prepared in consonance
with provisions of Clause 49 of the Listing Agreement and Companies
Act, 2013. The same has been uploaded on the Company's website at the
link: http://beta.zicom.com/img/pdf/ZESSL-
Related_Party_Transaction_Policy.pdf
All Related Party Transactions are being placed before the Audit
Committee for approval. Omnibus approvals are also obtained for
transactions which are of repetitive nature. Such transactions are
placed before the Audit Committee and Board (as required) for
periodical review and approval.
VIGIL MECHANISM / WHISTLE BLOWER POLICY
Pursuant to Section 177(9) of the Companies Act, 2013 and Clause 49 of
the Listing Agreement, the Company has formulated Whistle Blower Policy
for vigil mechanism for Directors and employees to report to the
management about the unethical behavior, fraud or violation of
Company's Code of Conduct. The mechanism provides for adequate
safeguards against victimization of employees and Directors who use
such mechanism and makes provision for direct access to the Chairperson
of the Audit Committee in exceptional cases. The said Policy as
approved may be accessed on the Company's website at the link:
http://beta.zicom.com/img/pdf/ZESSL- Whistle_Blower_Policy.pdf
MATERIAL CHANGES AND COMMITMENTS
There have not been any material changes and commitments affecting the
financial position of the Company between the end of the financial year
of the Company as on March 31, 2015 and the date of this Report.
RISK MANAGEMENT
The Company already has in place the system to inform the Board about
the risk assessment and minimization procedure. The risk management
system identifies and assesses various risks associated with the
Company and its business and finds out and suggests measures to
mitigate them. This also includes mechanisms for their proper and
timely monitoring and reporting. In this regard, the Company has framed
policy to identify and evaluate business risks, and to mitigate them.
The Policy defines the risk management approach at various levels
including documentation and reporting. The Policy helps in identifying
risks trend, exposure and potential impact analysis at a Company level
as also separately for each business division of the Company. The risk
management system is periodically evaluated by the Audit Committee /
Board in the light of changing business scenario. Accordingly, new
risks are identified, and modified mechanism and procedure for risk
assessment and minimization are adopted to ensure that executive
management controls risk by means of properly defined framework.
Progress in this regard is periodically reported to Audit Committee /
Board for their review and corrective actions, required if any. This is
a continuous process which enables the Company to keep its risk
management system updated and robust in view of fast changing economic
and business scenario affecting the Company.
EXTRACT OF ANNUAL RETURN
The details forming part of the Extract of Annual Return of the
Company, in Form MGT-9, as required under Section 92 of the Companies
Act, 2013, is appended herewith as Annexure D to this Report.
CORPORATE GOVERNANCE
In pursuance of Clause 49 of the Listing Agreement with the Stock
Exchanges, a separate section on Corporate Governance, together with a
certificate from your Company's Auditors confirming compliance of the
conditions of Corporate Governance as stipulated under the said Clause
is set out separately as Annexure H forming part of this Report.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNINGS AND OUTGO
Pursuant to the provisions of Section 134(m) of the Companies Act, 2013
read with Rule 8(3) of the Companies (Accounts) Rules, 2014 relevant
information are given hereunder:
A. Conservation of Energy
The Company's operations include selling, distributing, marketing and
installing of electronic security systems, gadgets and equipments and
monitoring them. As such they do not involve much use of energy.
However, your Company makes every possible effort to conserve energy at
all levels of its operations.
(i) The steps taken or impact on conservation of energy:
At offices and workplaces, creating awareness among employees,
contractual workers and customers about modes and means of energy
saving through utilization of energy saving systems, devices and
equipments; and inculcating a habit in them to strive for conservation
and saving of energy. The above has helped the Company in keeping its
energy cost under control.
(ii) The steps taken by the Company for utilizing alternate sources of
energy:
As the operations of your Company does not involve much use of energy,
the possibility of using alternate source of energy as a measure of
conservation of energy in its operations are minimal. However, your
Company has initiated certain steps in this direction like attempts are
being made to make available affordable CCTV Surveillance Systems using
solar power charged batteries, particularly in remote areas where there
are frequent disruptions in power, and such other alternate energy
using devices.
(iii) The capital investment on energy conservation equipments:
No material capital investment on energy conservation equipments has
been made during the year by your Company.
B. Technology Absorption
As your Company has not imported any technology, the required
information to be provided in this regard is Nil. Your Company is
continuously working on improving its indigenous products and software.
Your Company continuously strives to provide electronic security
systems, gadgets and equipments based on latest technology. Further,
the details of expenditure incurred on the research and development are
Nil.
C. Foreign Exchange Earnings and Outgo
Your Company has earned Rs. 59,750,165 (previous year Rs. 52,705,456) in
foreign currency and has spent Rs. 2,282,961 (previous year Rs. 1,712,877)
in foreign exchange during the year under review. The details of the
same are available at Note No. 25.17 being Notes forming part of the
Financial Statements.
LOANS AND ADVANCES
The details of loans and advances, which are required to be disclosed
in the Financial Statements of the Company pursuant to Clause 32 of the
Listing Agreement with the Stock Exchanges, are furnished separately as
Annexure E to this Report.
PARTICULARS OF EMPLOYEES
The disclosure 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 in
respect of employees of the Company is appended as Annexure F to this
Report.
In terms of the provisions of Section 197(12) of the Companies Act,
2013 read with Rules 5(2) and 5(3) of the Companies (Appointment and
Remuneration of Managerial Personnel) Rules, 2014, during the year
under review, there was no employee under the employment of your
Company, who was in receipt of remuneration of Rs. 6,000,000 or more per
annum, if employed for the entire year, or a remuneration of Rs. 500,000
or more per month, if employed during any part of the said year. Hence,
the information required to be furnished in this regard is Nil.
At present the Company does not have any Employee Stock Option Plan /
Scheme nor does it have any live stock options pending to be exercised.
HUMAN RESOURCES
Human Resource (HR) in Zicom is truly a strategic Business Partner in
the growth of your Company. The HR philosophy is developed around the
fundamental of creating value through our most valued resource
"Zi-Champ" to drive profitable growth and make Zicom a preferred work
place. HR has developed & maintained friendly and professional work
culture woven into the fabric of the Company's environment with strong
business ethics.
HR has time and again used innovation in hiring talent in Zicom. With
usage of high end assessment tools and latest hiring channels like
social media and online hiring sites, HR has hired the best talent from
the industry at competent pay package and benefits. HR has created
benchmark in the Fire and Security Industry by hiring the Engineers
through Pool Campus Recruitment from Tier III cities and providing them
opportunities in the international market with in-depth training.
To fulfill the Company's Vision of value creation number of
developmental initiatives have been undertaken which includes Executive
Coaching for Leadership Development. Zi-Champs have been trained on
behavioral and technical skills through ongoing structure programs
which helps them to serve the customer well.
During the year under review, HR had come up with Employee connect
programs where Zi-Champs were cross functionally bonded with each other
and took up fun activities as a team. The most appreciated initiative
was Business Induction where new joinees undergo in-depth training on
understanding the Business model, Product and Services. Our team of
"Zi-Champs" was the winner of "Corporate Jung" for second consecutive
year in the cricket tournament arranged by Fire and Safety Association
of India.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
The Board of Directors of your Company on May 27, 2014 constituted
Corporate Social Responsibility Committee in compliance with the
requirements of Section 135 of the Companies Act 2013 and the Companies
(Corporate Social Responsibility Policy) Rules, 2014. The said
Committee has formulated and recommended to the Board a Corporate
Social Responsibility Policy (CSR Policy). Based on recommendation of
CSR Committee the Board has approved undertaking of CSR activities by
the Company as enshrined in the Company's CSR Policy. A brief outline
of the said Policy including overview of the Project / Program being
undertaken are set out in the Annual Report on Corporate Social
Responsibility (CSR) Activities and appended herewith as Annexure G,
forming part of this Report.
Towards achieving its CSR objectives, the Company as a humble
beginning, has identified a project of construction of a High School
building in rural area of Sindhudurg District in Maharashtra with an
outlay of Rs. 1.80 crores. This Project aims at assisting a High School
which has been in existence since 1964 with a building structure in
dilapidated state and in dire need to be reconstructed. The School is
being run by a Trust on behalf of five surrounding villages and caters
to more than 400 students in 9 divisions from Class V to Class X,
majority of them belongs to below poverty line segment and families of
farmers and ex-servicemen. With the help of the Company, the new
building structure has been completed and the interior works like
classrooms, laboratory, other infrastructure such as lighting,
sanitation, furniture, sports equipments, etc. are being provided. The
Project is expected to be completed by December 2016. During the year,
the Company spent a total sum of Rs. 1,700,000 towards contributing to
the Project. As the Project for the School is multi-year Project
running over a period of more than three years, the amount has to be
spent based on completion schedule of construction of School building
and subsequent ordering of materials for interiors, furniture,
electrical fittings, laboratory and other equipments, etc.
Besides school education, it is also planned to provide the students
with vocational courses, which will facilitate their employment after
passing Class X. Despite all adversities, the School has been able to
maintain its reputation by consistent good performance, which is
evident by the fact that the last ten year's average success rate of
its students in Class X has been 95%.
INTERNAL FINANCIAL CONTROLS AND ITS ADEQUACY
Your Company follows current best practices in internal audit and risk
management system. Internal Audit System monitors the
adequacy and effectiveness of the internal control under the
supervision and guidance of the Audit Committee. It is supported by the
enterprise resource planning platform for all business process.
All transactions are properly authorized, recorded and presented to the
Management. Your Company observes all the accounting standards
prescribed for proper maintenance of books of accounts and reporting of
financial statements.
The Internal Control inter-alia facilitates:
- Review of long-term business and annual plans
- Adherence to applicable accounting standards and policies
- Periodic review and rolling forecasts
- Proper accounting and review mechanism
- Compliance with applicable statutes, listing requirement and internal
policies and procedures
- Audit on concurrent basis, carried out by an internal auditor
covering all statutes and compliance requirements
- IT systems with adequate in-built controls and security
GENERAL
Your Directors 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:
1. Details relating to deposits covered under Chapter V of the Act.
2. Issue of equity shares with differential rights as to dividend,
voting or otherwise.
3. Issue of shares (including sweat equity shares) to employees of the
Company under any scheme.
4. No significant or material orders were passed by the Regulators or
Courts or Tribunals that would impact the going concern status of the
Company and its future operations.
5. The Company has in place policy as per the provisions of the Sexual
Harassment of Women at Workplace (Prevention, Prohibition and
Redressal) Act, 2013. During the year, no case was reported to the
Committee constituted under the said Act.
ACKNOWLEDGMENTS
Your Directors wish to place on record their sincere appreciation and
thanks for the valuable co-operation and support received from the
employees of your Company at all levels, Company's Bankers, lenders,
suppliers, Government authorities, business partners and Members of the
Company; and look forward for the same to even greater extent in the
coming year.
For and on behalf of the Board of Directors
Manohar Bidaye
Chairman
Place: Mumbai
Date: May 27, 2015
Registered Office:
501, Silver Metropolis,
Western Express Highway,
Goregaon (East), Mumbai 400063.
Mar 31, 2014
Dear Members,
Your Directors presents their Twentieth Annual Report, together with
the Audited Accounts of the Company for the Financial Year ended March
31,2014.
( Amount in Rs )
Particulars March 31, 2014 March 31, 2013
Consolidated Consolidated
Net Sales / Income from Operations 9,260,956,985 6,912,954,653
Other Income" 25,318,584 23,103,814
Total Income 9,286,275,569 6,936,058,467
Total Expenditure 8,176,579,557 6,087,516,230
Gross Profit before Interest
and Depreciation 1,109,696,012 848,542,237
lnterest and Finance Charges 349,350,690 251,836,448
Gross Profit before Depreciation
and Taxation 760,345,322 596,705,789
Depreciation 249,284,173 180,775,944
Profit Before Tax, Exceptional
& Extraordinary Items 511,061,149 415,929,845
Exceptionalltem 45,954,516 --
Extraordinary Items
Profit Before Tax 465,106,633 415,929,845
Provision for Taxation:
Current year 28,967,000 26,078,000
Deferred -10,084,269 20,886,362
Taxation of earlier years -- --
Net Profit After Taxation 446,223,902 368,965,483
Less: Minority Interest 26,798,053 65,765,956
ProfIt for the year 419,425,849 303,199,527
Add: Balance brought forward
from previous year 1,256,852,427 990,525,810
Add: Transfer of Economic Interest 202,318,612 --
Profit available for Appropriation 1,878,596,888 1,293,725,337
apPROpRiationS,
Transfer to General Reserve 2,500,000 8,166,191
Provision for Dividend 24,529,430 20,399,795
Provision for Tax on Dividend 3,426,824 3,309,357
Buy Back of Economic Interest 408,500,000 --
Previous Year Dividend and
Tax thereon -- 4,997,567
Balance of Profit carried forward
to Balance Sheet 1,439,640,634 1,256,852,427
Particulars March 31, 2014 March 31, 2013
Standalone Standalone
Net Sales / Income from Operations 3,230,634,433 2,664,128,159
Other Income" 64,447,673 48,648,234
Total Income 3,295,082,106 2,712,776,393
Total Expenditure 2,969,676,670 2,411,618,155
Gross Profit before Interest
and Depreciation 325,405,436 301,158,238
lnterest and Finance Charges 97,265,130 95,857,168
Gross Profit before Depreciation
and Taxation 228,140,306 205,301,070
Depreciation 77,463,807 79,048,999
Profit Before Tax, Exceptional
& Extraordinary Items 150,676,499 126,252,071
Exceptionalltem 51,776,297 --
Extraordinary Items
Profit Before Tax 98,900,202 126,252,071
Provision for Taxation:
Current year 27,140,000 25,270,000
Deferred -9,769,253 19,935,923
Taxation of earlier years -- --
Net Profit After Taxation 81,529,455 81,046,148
Less: Minority Interest -- --
ProfIt for the year 81,529,455 81,046,148
Add: Balance brought forward
from previous year 497,372,088 447,532,659
Add: Transfer of Economic Interest -- --
Profit available for Appropriation
81,529,455 528,578,807
apPROpRiationS,
Transfer to General Reserve
2,500,000 2,500,000
Provision for Dividend
21,119,795 20,399,795
Provision for Tax on Dividend
3,426,824 3,309,357
Buy Back of Economic Interest
Previous Year Dividend and -- --
Tax thereon
-- 4,997,567
Balance of Profit carried forward
to Balance Sheet 551,854,924 497,372,088
OPERATIONAL PERFORMANCE
Your Directors are pleased to report that the Company ended the year
2013-14 with good performance, on both standalone as well as
consolidated basis.
On consolidated basis, the Total Income for the year 2013-14 was '
9,286,275,569 (previous year ' 6,936,058,467) and the Profit Before
Exceptional Expenses and Tax was ' 511,061,149 (previous year '
415,929,845). After adjusting for Exceptional Expenses and Tax '
64,837,247 (previous year ' 46,964,362), Net Profit After Tax at '
446,223,902 (previous year ' 368,965,483) was higher by 21%. During the
year under review, Zicom Group's entitlement in the economic interest in
Unisafe Dubai increased from 80% to 95% as a result of buy-back of
economic interest of the local partner, the Net Profit After Tax and
Minority interest at ' 419,425,849 has increased substantially by 38% as
compared to ' 303,199,527 of previous year.
The Consolidated Financial Statements (CFS) includes the financial
statements of Zicom Electronic Security Systems Limited ("the Company")
and its subsidiary companies, namely, Zicom SaaS Private Limited ("Zicom
SaaS"); Unisafe Fire Protection Specialists Singapore Pte. Ltd.
("Unisafe Singapore") and its subsidiaries, viz. Unisafe Fire Protection
Specialists LLC, Dubai ("Unisafe Dubai") and its subsidiaries and
Phoenix International WLL, Qatar ("Phoenix Qatar"); Unisafe Fire
Protection Specialists India Private Limited ("Unisafe India"); Zicom
Security Projects Pte. Ltd., Singapore ("Zicom Singapore") and 2020
Imaging India Limited ("2020 India") (formerly known as Zicom CNA
Automation Limited) till the time it was subsidiary of your Company.
On standalone basis, the Total Income for the year 2013-14 was '
3,295,082,106 (previous year ' 2,712,776,393). The Profit Before
Exceptional Expenses and Tax was ' 150,676,499 (previous year '
126,252,071). After adjusting for Exceptional Expenses and Tax '
69,147,044 (previous year Rs 45,205,923), Net Profit After Tax (PAT) was
Rs 81,529,455 as compared to Rs 81,046,148 in previous year. But for the
write off of Rs 51,776,297 under Exceptional item, PAT amount would have
been substantially higher.
On March 25, 2014, your Company transferred its entire stake in its
wholly owned subsidiary, 2020 Imaging India Limited (formerly known as
Zicom CNA Automation Limited) at a consideration of ' 3,675,000. Your
Company incurred loss of RS 195,085 on this sale. As a result, 2020
India ceased to be the subsidiary of your Company from the said date.
The consolidated financial statements therefore includes financial
results of 2020 India upto March 25, 2014.
The consolidated financial statements of the year under review consists
of full year's financial results of Phoenix Qatar. However, consolidated
financial statements for the year ended 2012-13 consisted of 10 months
financials of Phoenix Qatar as Zicom Group acquired it in June 2012. As
a result, both are not comparable.
As can be seen from the consolidated financial results given above, the
Total Income grew by 35%. EBIDTA at ' 1,109,696,012 is 12% of Total
Income vis-a-vis Rs 848,542,237 and 12% in the previous year, which
shows consistent performance. The Net Profit After Tax at ' 419,425,849
as compared to Net Profit After Tax of RS 303,199,527 in the previous
year shows an increase of 38%.
With the contribution of 61% to the top line and 64% to the EBIDTA of
the total consolidated financial results, the Fire Detection and
Protection business of Middle East has continued to be the main
contributor.
Aided by revival in economy in UAE, Qatar and other Gulf countries,
which are the main areas of operations of Unisafe Dubai and Phoenix
Qatar, particularly in second half of the financial year 2013-14; both
these flagship companies have performed better. Further, post
acquisition of Phoenix Qatar various steps were taken to synergize the
operations of Phoenix Qatar with the Zicom Group and improve its
performance; which has started paying off now, and are reflected in
improved performance of Phoenix Qatar.
On revival of economies of Gulf region, Governments, particularly in
UAE and Qatar have planned huge expenditure on infrastructure
development and real estate, hotels and tourism, education and health
care facilities; due to which the construction activities in Middle
East are witnessing unprecedented boost. The business of Fire Detection
and Protection being derivative of such development activities, the
same is also expected to witness robust growth in coming years.
The Company continued the growth in standalone business at 21% and in
EBIDTA at 10%-11%. The revised sustainable business model carved out of
the residue of the restructuring has further consolidated with
excellent customer response and improved performance across all the
major business segments. The Indian business comprise mainly of
distribution and direct sales business of Electronic Security Systems
and Security as a Service (SaaS) under e-SaaS model.
Our two wholly-owned subsidiaries in Singapore, viz. Unisafe Fire
Protection Specialists Singapore Pte. Ltd. (Unisafe Singapore) and Zicom
Security Projects Pte. Ltd. (Zicom Singapore) continues to hold our
investment in Phoenix Qatar and Joint Venture (JV) investment in
CiaoZicom Security Systems SA, Brazil respectively. Due to conversion of
preference shares into equity, the direct shareholding of your Company
in Unisafe Dubai has been reduced from 49% to 8%. Now, your Company,
directly hold 8% equity stake in Unisafe Dubai and 5% equity stake in
Phoenix Qatar with economic interest of 8% and 10% respectively, while
Unisafe Singapore holds 41% equity in Unisafe Dubai with 87% economic
interest.
Excellent performance by Zicom SaaS in the year under review has been
another highlight of the consolidated working. This established your
Company's capability to build innovative business model of service in
the domain of security. With encouraging responses from both the
business divisions of Zicom SaaS, i.e. Enterprise and Make Your City
Safe (MYCS), this business now appears more promising in the long-term.
In Unisafe India, your Company's focus continued to work as Global
Design Centre by catering to the design, engineering and estimate needs
of all our projects in Gulf Region.
In the current year, as economy is showing sign of revival both in
India and Middle East, we expect current year performance to surpass
previous year very easily.
Our group company, Institute of Advanced Security Training and
Management Private Limited (ASTM) continue to drive our social
objective of empowering the people with skill and education in
partnership with National Skill Development Corporation (NSDC).
With a view to conserve resources to meet the business requirements,
your Directors have recommend a dividend of ' 1.20 per Equity Share of
' 10 each (i.e. 12%) on enhanced share capital of 17,599,829 Equity
Shares of the Company for the financial year 2013-14. This dividend
will entail a total outgo of Rs 24,546,619.
In 2012-13, your Company had paid the same rate of dividend i.e. RS
1.20 per Equity Share on 16,999,829 Equity Shares, which entailed the
total outgo of RS 23,709,152.
During the year under review, on December 2 2013, your Company allotted
600,000 Equity Shares of RS 10/- each at a price of ' 46/- per share to
the holders of the Warrants (who are Promoter Group Companies), against
exercise of options attached to the said 600,000 Warrants, which formed
part of the total 1,600,000 Warrants allotted on July 13, 2012 in
accordance with SEBI ICDR Regulations for Preferential Issues.
As a result of the above, the Company's Paid-up Share Capital increased
to ' 175,998,290 divided into 17,599,829 Equity Shares of ' 10 each,
thereby increasing the Securities Premium by ' 21,600,000.
As on March 31, 2014, your Company had the following subsidiaries:
1. Zicom SaaS Private Limited (wholly owned subsidiary);
2. Unisafe Fire Protection Specialists Singapore Pte. Ltd., Singapore
(wholly owned subsidiary);
3. Unisafe Fire Protection Specialists LLC, Dubai (step- down
subsidiary);
4. Phoenix International WLL, Qatar (step-down subsidiary);
5. Unisafe Fire Protection Specialists India Private Limited (wholly
owned subsidiary); and
6. Zicom Security Projects Pte. Ltd., Singapore (wholly owned
subsidiary)
2020 Imaging India Limited (formerly known as Zicom CNA Automation
Limited), ceased to be the wholly owned subsidiary of your Company,
effective March 25, 2014 as already discussed earlier.
CiaoZicom Security Systems SA, a company in Brazil, was set-up as a
Joint Venture (JV) between Zicom Group through Zicom Singapore (38%
stake), Ciao Telecom Inc., USA (44% stake) and IDL Global (18% stake),
with a view to manufacturing, marketing, installing and servicing of
various security products and solutions in Brazil. However, as the JV
could not progress as expected, we are working out modalities with Ciao
Telecom Inc., USA, the major partner, to withdraw from this JV.
Information on financials of the subsidiaries for 2013-14 is provided
in Annexure A hereto. In respect of foreign subsidiary companies,
figures in rupees are converted from applicable foreign currency at
appropriate exchange rate.
The details of key subsidiaries and their workings are given below:
Zicom SaaS Private Limited
Zicom SaaS, a wholly owned subsidiary of your Company, offers a range
of Remote Managed Electronic Security Services to Banks, Retail chains
and residential societies. It is first of its kind Managed Security
Services leveraging telecom, internet and power of cloud.
Operations of Zicom SaaS are driven mainly through two business
divisions, namely Enterprise division and MYCS division. Zicom SaaS
protects remotely located infrastructures / assets using Electronic
Security Equipments and offering Security as a Service (SaaS)
through state-of-the-art Zicom Command Centre (ZCC) located in Mumbai.
Zicom SaaS has posted Total Income of ' 173,833,923 (previous year '
64,514,698) and Net Profit of ' 5,791,836 (previous year ' 1,449,637)
for the financial year ended March 31,2014.
Unisafe Fire Protection Specialists LLC, Dubai
Unisafe Dubai is now step-down subsidiary of your Company in which
Unsiafe Singapore, a wholly owned subsidiary of your Company, hold 41%
stake and your Company, directly hold 8% stake, taking total stake of
Zicom Group to 49%.
Unisafe Dubai, is the leading fire protection company in UAE and caters
to large spectrum of clientele from Government to corporate,
refineries, shopping malls, multi storey buildings and resorts among
others, offering comprehensive range of solutions for all fire
protection needs, starting from the basic hydrant and sprinkler systems
to advance analogue addressable fire alarm systems, specialized gaseous
fire suppression systems, dry and wet chemical extinguishing systems
and water mist fire extinguishing systems. Unisafe Dubai has strong
credentials established over last 18 years in the area of project
execution and servicing in the domain of fire detection and protection
in infrastructure projects.
Unisafe Dubai has its presence in seven emirates, Qatar and Oman. It
has continued its momentum growth story and overtook its previous
milestone in terms of top line, bottom line and customer satisfaction.
It has performed exceptionally well and endures to benefit from the
unstinted confidence & support from its customers.
During the year, your Company's entitlement in the economic interest in
Unisafe Dubai increased from 80% to 95% as a result of buy-back of
economic interest of the local partner.
Unisafe Dubai has posted Total Income of ' 4,472,112,012 (as compared
to ' 3,358,411,279 in the previous year) and a Net Profit of '
398,665,132 (as compared to ' 300,969,770 in the previous year) for the
financial year ended March 31, 2014.
Phoenix International WLL, Qatar
Phoenix Qatar, a step-down subsidiary of your Company, in which Unisafe
Singapore, a wholly owned subsidiary of your Company, holds 44% stake
and your Company directly holds 5% stake, thereby making Zicom Group's
total stake at 49% and Zicom Group has 95% entitlement in the economic
interest in Phoenix Qatar.
Phoenix, is one of the leading fire security solutions provider in
Qatar. It offers turnkey solutions in fire protection and suppression
projects, which covers design, engineering, integrating, testing and
commissioning of Fire Safety, Security and Building Management Systems,
with main focus on Fire Prevention and Protection. It has exclusive
tie- up to market safety and security equipments of leading
international supplier. Phoenix Qatar has handled many prestigious
projects in Qatar and caters to large spectrum of clientele from
Government to corporate, refineries, shopping malls, multi storey
buildings, hotels and resorts, etc. Further, it has license to operate
in petrochemical sector.
The year under review being the first full operational term of Phoenix
Qatar, as a step-down subsidiary of the Company, has posted Total
Income of ' 1,222,147,344 (as compared to ' 700,811,423 in the previous
year) and a Net Profit of ' 137,295,919 (as compared to ' 111,440,046
in the previous year) for the financial year ended March 31,2014.
Unisafe Fire Protection Specialists India Private Limited
Unisafe India, a wholly owned subsidiary of your Company, which was
originally set-up to take advantage of our expertise gained from the
success of fire safety and security business in Middle East, is
primarily catering to the needs of design and engineering requirements
of fire protection business in Gulf region by acting as a Global Design
Centre.
Unisafe India has posted Total Income of ' 155,631,085 (as compared to
Rs 159,968,594 in the previous year) and a Net Loss of Rs -1,471,989 (as
compared to Rs 238,165 in the previous year) for the financial year
ended March 31,2014.
Unisafe Fire Protection Specialists Singapore Pte. Ltd., Singapore and
Zicom Security Projects Pte. Ltd., Singapore
With a view to align and consolidate present and future investments
interest of Zicom Group internationally, your Company had set-up two
wholly-owned subsidiaries in Singapore, viz. Unisafe Fire Protection
Specialists Singapore Pte. Ltd. (Unisafe Singapore) and Zicom Security
Projects Pte. Ltd. (Zicom Singapore). Unisafe Singapore act as a
holding company for Group investment in fire business abroad, while
Zicom Singapore continue to hold investment in CiaoZicom Security
Systems SA, Brazil.
CONSOLIDATED FINANCIAL STATEMENTS
In accordance with the Accounting Standard (AS) 21 on Consolidated
Financial Statements read with Accounting Standard (AS) 23 on
Accounting for Investments in Subsidiaries, the audited Consolidated
Financial Statements are provided in the Annual Report. Further, vide
Circular No.
2/2011 dated February 8, 2011, the Ministry of Corporate Affairs (MCA),
Government of India, has granted general exemption to Companies under
Section 212 (8) of the Companies Act, 1956 from attaching the documents
referred to in Section 212 (1) of the said Act pertaining to its
subsidiaries, subject to certain terms and conditions.
Accordingly, the Board of Directors of your Company has granted its
consent for dispensing with the requirement of attaching to its Annual
Report, the annual audited accounts of your Company's subsidiaries.
Therefore, the Annual Report of your Company does not contain the
individual financial statements of these subsidiaries, but contains the
audited Consolidated Financial Statements of your Company and its
subsidiaries. The Annual Accounts of these subsidiary companies, along
with the related information, are available for inspection at the
Company's Registered Office and copies of the same shall be provided on
request. The Statement on Financials of the Subsidiaries and Statement
on Subsidiaries pursuant to Section 212 of the Companies Act, 1956 are
attached hereto as Annexure A and Annexure B respectively.
DIRECTORS
Pursuant to Section 152 of the Companies Act, 2013 and Articles of
Association of the Company, Mr. Manohar Bidaye and Mr. K. D. Hodavdekar
are the Directors liable to retire by rotation at the ensuing Annual
General Meeting.
Mr. Manohar Bidaye (DIN: 00010699), being Non- Independent Director and
eligible, has offered himself for re-appointment as a Director liable
to retire by rotation.
Pursuant to Section 149 of the Companies Act, 2013 and the Companies
(Appointment and Qualification of Directors) Rules, 2014, Mr. K. D.
Hodavdekar (DIN: 00406556), eligible for being appointed as an
Independent Director, has offered himself for appointment as an
Independent Director, not liable to retire by rotation.
On June 27, 2014, Mr. Prabhakar Dalal (DIN: 00544948) was appointed as
an Additional Director under Section 161 of the Companies Act, 2013, to
hold office till the date of the ensuing Annual General Meeting. Mr.
Dalal being eligible, has offered himself for the appointment as an
Independent Director, not liable to retire by rotation.
In order to comply with the provisions of Sections 149,152 and other
applicable provisions of the Companies Act, 2013 and the Companies
(Appointment and Qualification of Directors) Rules, 2014 w.r.t.
appointment of Independent Directors, in addition to Mr. K. D.
Hodavdekar and Mr. Prabhakar Dalal, your Board has also considered and
recommended the appointment of Mr. Mukul Desai (DIN: 00015126) and Mr.
Vijay Kalantri (DIN: 00019510), being eligible, as Independent
Directors, not liable to retire by rotation.
The Company has received requisite notices in writing from Members
proposing the candidature of Mr. Prabhakar Dalal, Mr. K. D. Hodavdekar,
Mr. Mukul Desai and Mr. Vijay Kalantri for the office of Independent
Director. Their appointments shall be subject to approval of the
Members at the forthcoming Annual General Meeting.
The Company has received declarations from all the aforesaid Directors
of the Company confirming that they meet with the criteria of
Independence as prescribed under provisions of the Companies Act, 2013,
Rules thereunder and Clause 49 of the Listing Agreement.
The brief profile of all the Directors are given in Notice of the
Annual General Meeting and discussed at length in the Corporate
Governance Report.
Your Directors recommend the above appointments for your approval.
AUDITORS
The Statutory Auditors of the Company M/s. Shyam Malpani & Associates,
Chartered Accountants, Mumbai, holds their office until the conclusion
of the ensuing Annual General Meeting and are eligible for
re-appointment.
As required under the provisions of Section 139 and Section 141 of the
Companies Act, 2013, the Company has obtained a written consent and
certificate from M/s. Shyam Malpani & Associates, Chartered
Accountants, Mumbai, proposed to be re-appointed to the effect that
their re-appointment, if made, would be in conformity with the criteria
specified in the said sections.
The Board recommend their re-appointment for your approval.
COST AUDIT
For the year under review, your Company was covered under the Companies
(Cost Accounting Records) Rules, 2011 for maintenance of cost records
under clause (d) of sub-section (1) of Section 209 of the Companies
Act, 1956. This made it mandatory for your Company to obtain
Compliance Certificate from a Cost Accountant as prescribed under Rule
5 of the said Rules. In compliance of the same, your Company has
obtained Compliance Certificate certified by a Cost Accountant, which
does not contain any adverse remarks.
STATUTORY INFORMATION
(a) Conservation of Energy, Technology Absorption and Foreign Exchange
Earnings and Outgo
Conservation of Energy
Your Company is not required to furnish the prescribed information
under Section 217 (1)(e) of the Companies Act, 1956, relating to the
Conservation of Energy and Technology Absorption, as your Company does
not fall under the industries included in Schedule to the relevant
rules. However, your Directors report that the operations of your
Company do not involve much use of energy. Your Company makes every
possible effort to conserve energy at all levels of its operations.
Technology Absorption
As your Company has not imported any technology, the required
information to be provided in this regard is nil. Your Company is
continuously working on improving its indigenous products and software.
Foreign Exchange Earnings and Outgo and Export Market Developments
Your Company has earned ' 52,705,456 (previous year ' 38,255,485) in
foreign currency and has spent Rs1,712,877 (previous year Rs 2,248,887)
in foreign exchange during the year under review. The details of the
same are available at Note No. 25.17 being Notes forming part of the
Financial Statements.
Particulars of Employees
During the year under review, there was no employee under the
employment of your Company, who was in receipt of remuneration of Rs
6,000,000 or more per annum, if employed for the entire year, or a
remuneration of Rs 500,000 or more per month, if employed during any
part of the said year. Hence, the information required to be furnished
in this regard is nil.
(b) Corporate Governance
In pursuance of Clause 49 of the Listing Agreement with the Stock
Exchanges, a separate section on Corporate Governance, together with a
certificate from your Company's Auditors confirming compliance of the
conditions of Corporate Governance as stipulated under the said Clause
is set out separately as Annexure E forming part of this Report.
In December 2009, the Government of India, Ministry of Corporate
Affairs ("MCA") had issued Corporate Governance Voluntary Guidelines
2009. The said guidelines, being voluntary, specifies certain Corporate
Governance practices, which are to an extent consistent with the
provisions of Clause 49 of the Listing Agreement. Your Company being a
listed company is required to comply with Corporate Governance
requirements as specified under Clause 49 of the Listing Agreement and
as such we are in compliance with some of the requirements of the said
guidelines.
DEPOSITS, LOANS AND ADVANCES
Your Company has not accepted any fixed deposits, and as such, no
principal or interest amount was outstanding on the date of the Balance
Sheet. The details of loans and advances, which are required to be
disclosed in the Financial Statements of the Company pursuant to Clause
32 of the Listing Agreement with the Stock Exchanges, are furnished
separately as Annexure D.
HUMAN RESOURCES
Zicom's Human Resource (HR) department is structured around its
business verticals. It has time & again shouldered the responsibility
of a strategic Business Partner alongwith the business units and
ensured that overall business objects are met to drive the growth of
your Company.
HR philosophy is creating value internally through Zi-Champs in terms
of hiring people with right competencies, creating happy & encouraging
work culture, providing opportunities for training and development,
which helps Zi-Champs to create value externally with the customer to
provide best products and services.
HR is focused to provide best talent at right time with right
competencies. It is using the latest tool and techniques for
recruitment and selection, which includes usage of social media and top
class assessment tools.
During the financial year under review, HR has taken number of new
initiatives that includes DOST (Dedicated On boarding Support and
Training) for faster assimilation of the new joinees, Talent Connect -
A Employee Referral Program, HR Connect - to enhance communication with
Zi-Champs, RACE (Reward & Recognition for Achievement & Contribution
towards Excellence) to motivate the achiever Zi-Champs and inspire
others to do their best. Team Fundoo has gained popularity in making
Zi-Champs emotionally connected with the Company by arranging various
events & celebrations like Woman's Day, Diwali, New Year, monthly
Birthday bash and other traditional days.
As on March 31,2014 the total number of direct and indirect employees
were standing at 1,191. To take engagement to next level, HR has
initiated number of new initiatives to create environment which will
allow individuals to excel.
EMPLOYEES STOCK OPTION SCHEME
There were two Schemes of the Company viz. Employee Stock Option Scheme
2006 (ESOS 2006) and Employee Stock Option Scheme 2007 (ESOS 2007).
Under these Schemes, the employees of the Company were granted Options
as per the fixed eligibility criteria. Against each of the Option, an
eligible employee was entitled to acquire equal number of Equity Shares
of ' 10 each of the Company at a grant price.
The validity of ESOS 2006 was upto August 2011 and ESOS 2007 was upto
September 2012. However, the outstanding Options as at beginning of the
year under review were as follows: 9,900 Options under ESOS 2006 and
1,800 Options under ESOS 2007 which were effective upto December 26,
2013. During the year under review, no Options were exercised.
Accordingly, as on March 31, 2014 there are no outstanding Options.
Necessary disclosures required to be given in accordance with
Securities and Exchange Board of India (Employee Stock Option Scheme
and Employee Stock Purchase Scheme) Guidelines, 1999, for ESOS 2006 and
ESOS 2007 forms part as Annexure C to this Report.
DIRECTORSÂ RESPONSIBILITY STATEMENT
Pursuant to Section 217 (2AA) of the Companies Act, 1956, based on the
representations received from the operating management, your Directors
hereby confirm that in preparation of the Financial Statements for the
year ended March 31,2014:
(i) the applicable accounting standards have been followed and that
there are no material departures;
(ii) they have in the selection of the accounting policies, consulted
the Statutory Auditors and have 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) proper and sufficient care was taken, to the best of their
knowledge and ability, for the maintenance of adequate accounting
records in accordance with the provisions of the Companies Act, 1956,
for safeguarding the assets of the Company and for preventing and
detecting fraud and other irregularities;
(iv) the annual accounts have been prepared on a going concern basis.
CORPORATE SOCIAL RESPONSIBILITY (CSR) AND SUSTAINABILITY
Your Company sincerely believes that a corporate cannot grow without
considering the environment, society and economy in which it stays. All
has to grow hand in hand. Towards this end your Company is aware about
its responsibility to the society in which it lives and the environment
surrounding it; which also includes the employees with whose support
the Company is able to conduct its business. Your Company is constantly
evaluating various options to more effectively contribute to the
society and sustainability. The CSR initiatives undertaken by your
Company have been enumerated elsewhere in this Report, which are
focused on education, skill development, and creating job opportunities
in Society.
In order to comply with the provisions of Section 135 of the Companies
Act, 2013 and the Companies (Corporate Social Responsibility Policy)
Rules, 2014, your Company subsequent to the year end under review,
constituted a Corporate Social Responsibility (CSR) Committee. This
Committee shall be responsible for formulating a CSR policy,
recommending the activities that can be undertaken under CSR, deciding
the amount to be incurred on such activities and any other matters
related to CSR, which it should consider.
INSURANCE
All the assets of the Company are adequately insured.
ACKNOWLEDGMENTS
Your Directors wish to place on record their sincere appreciation and
thanks for the valuable co-operation and support received from the
employees of your Company at all levels, Company's Bankers, lenders,
suppliers, Government authorities, business partners and Members of the
Company; and look forward for the same to even greater extent in the
coming year.
For and on behalf of the Board of Directors
Manohar Bidaye
Chairman
Place: Mumbai
Date:June 27, 2014
Registered Office:
501, Silver Metropolis,
Western Express Highway,
Goregaon (East), Mumbai 400063.
Mar 31, 2013
To the Members,
The Directors presents their Nineteenth Annual Report, together with
the Audited Accounts of the Company for the Financial Year ended March
31, 2013.
FINANCIAL HIGHLIGHTS
(Amount in Rs.)
March 31,
2013 March 31, 2012
Particulars Consolidated Consolidated
Net Sales / Income
from Operations 6,912,954,653 4,840,504,463
Other Income 23,103,814 15,673,156
Total Income 6,936,058,467 4,856,177,619
Total Expenditure 6,087,516,230 4,335,706,157
Gross Profit before
Interest and Depreciation 848,542,237 520,471,462
Interest and Finance Charges 251,836,448 138,611,350
Gross Profit before
Depreciation and Taxation 596,705,789 381,860,112
Depreciation 180,775,944 143,273,784
Profit Before Tax,
Exceptional & Extraordinary Items 415,929,845 238,586,328
Exceptional Item 19,386,598
Extraordinary Items
Profit Before Tax 415,929,845 219,199,730
Provision for Taxation:
Current year 26,078,000 5,410,000
Deferred 20,886,362 6,056,491
Taxation of earlier years -2,508,805
Net Profit After Taxation 368,965,483 210,242,044
Less: Minority Interest 65,765,956 41,838,964
Profit for the year 303,199,527 168,403,080
Add: Balance brought forward
from previous year 990,525,810 836,882,789
Profit available for
Appropriation 1,293,725,337 1,005,285,869
APPROPRIATIONS:
Transfer to General Reserve 8,166,191
Provision for Dividend 20,399,795 12,699,829
Provision for Tax on Dividend 3,309,357 2,060,230
Previous Year Dividend and
Tax thereon 4,997,567
Balance of Profit carried
forward to Balance Sheet 1,256,852,427 990,525,810
Particulars March 31,
2013 March 31,
2012
Standalone Standalone
Net Sales / Income
from Operations 2,664,128,159 2,194,159,063
Other Income 48,648,234 26,694,041
Total Income 2,712,776,393 2,220,853,104
Total Expenditure 2,411,618,155 1,956,700,601
Gross Profit before
Interest and Depreciation 301,158,238 264,152,503
Interest and Finance Charges 95,857,168 73,727,745
Gross Profit before
Depreciation and Taxation 205.301.070 190,424,758
Depreciation 79,048,999 117,969,202
Profit Before Tax,
Exceptional &
Extraordinary Items 126.252.071 72,455,556
Exceptional Item 19,386,598
Extraordinary Items 126,252,071 53,068,958
Profit Before Tax 25,270,000 5,410,000
Provision for Taxation: 19,935,923 14,637,235
Current year 2,508,805
Deferred 81,046,148 35,530,528
Taxation of earlier years 81,046,148 35,530,528
Net Profit After Taxation 447,532,659 426,762,190
Less: Minority Interest 528,578,807 462,292,718
Profit for the year 2,500,000
Balance of Profit carried
forward to Balance Sheet 497,372,088 447,532,659
OPERATIONAL PERFORMANCE
Your Directors are pleased to inform that, the performance of your
Company during the year under review was remarkable.
On standalone basis, the Total Income for the year 2012-13 was Rs.
2,712,776,393 (previous year Rs. 2,220,853,104). The Profit Before
Exceptional Expenses and Tax was Rs. 126,252,071 (previous year Rs.
72,455,556). After adjusting for Exceptional Expenses and Tax Rs.
45,205,923 (previous year Rs. 36,925,028), Net Profit After Tax at Rs.
81,046,148 (previous year Rs. 35,530,528) was higher by 128%.
On consolidated basis, the Total Income for the year 2012-13 was Rs.
6,936,058,467 (previous year Rs. 4,856,177,619). The Profit Before
Exceptional Expenses and Tax was Rs. 415,929,845 (previous year Rs.
238,586,328). After adjusting for Exceptional Expenses and Tax Rs.
46,964,362 (previous year Rs. 28,344,284), Net Profit After Tax at Rs.
368,965,483 (previous year Rs. 210,242,044) was higher by 76%.
The Consolidated Financial Statements (CFS) includes the financial
statements of Zicom Electronic Security Systems Limited ("the Company")
and its subsidiaries, namely, Unisafe Fire Protection Specialists LLC,
Dubai ("Unisafe Dubai") and its subsidiaries; Phoenix International
WLL, Qatar ("Phoenix"); Zicom SaaS Private Limited ("Zicom SaaS");
Unisafe Fire Protection Specialists India Private Limited ("Unisafe
India"); Zicom CNA Automation Limited ("ZCNA"); Unisafe Fire Protection
Specialists Singapore Pte. Ltd. ("Unisafe Singapore") and Zicom
Security Projects Pte. Ltd. ("Zicom Singapore").
As consolidated financials for the year under review also includes 10
months'' financials of Phoenix (acquired in June 2012), the same are not
comparable with the consolidated financials for the previous year
2011-12.
BUSINESS DEVELOPMENTS AND PROSPECTS
The year under review witnessed transformation of your Company into a
truly Indian Multinational, which is evident from the fact that its
international business has contributed almost 59% to the topline and
78% to the bottomline of the consolidated results, whereas the Indian
business contributed 41% to the topline and 22% to the bottomline of
the consolidated results.
Fire detection and protection business in the Gulf Region has been the
main foray of the international business of Zicom Group. Unisafe Fire
Protection Specialists LLC, Dubai (Unisafe Dubai) and Phoenix
International WLL, Qatar (Phoenix), are flagship subsidiary companies
in respective countries, and both carries highly reputed brand and
recognition. Phoenix was acquired at a cost of USD 15 million and
became a member of Zicom Group in June 2012. Your Company carried out
organizational restructuring to synergize the working and operations of
Phoenix to bring it in line with Zicom Group, so that it can achieve
corporate goals and objectives. In view of promising business scenario
for this business in the Gulf Region, particularly with economic
recovery in U.A.E. and massive development plans in Qatar, both Unisafe
Dubai and Phoenix are expected to end the current year also with
remarkable growth.
With a view to align and consolidate present and future investments
interest of the Group internationally, your Company had set-up two
wholly-owned subsidiaries in Singapore, viz. Unisafe Fire Protection
Specialists Singapore Pte. Ltd. (Unisafe Singapore) and Zicom Security
Projects Pte. Ltd. (Zicom Singapore). Unisafe Singapore has invested
USD 13.42 million towards 44% stake and 85% economic interest in
Phoenix; whereas Zicom Singapore has advanced USD 2 million to Brazil
joint venture (JV) viz. CiaoZicom Security Systems SA towards
investment by way of taking up 38% stake. It has also advanced USD 7.50
million towards investment in Unisafe Dubai''s Preference Shares.
The Indian business comprises mainly of distribution and direct sales
business of electronic security systems carried out under your Company.
Encouraging performance of the revised sustainable business model,
carved out of the residue of the restructuring, has been the highlight
of standalone working for the year under review. The same has been
witnessed across all major verticals, i.e. your Company on standalone,
Zicom SaaS and Unisafe India.
Achieving breakeven by Zicom SaaS in the year under review has proved
the ability of your Company to build a business vertical in the domain
of providing Security as a Service. With encouraging responses from
both the business verticals of Zicom SaaS, i.e. Enterprise and Make
Your City Safe (MYCS), this business now appears more promising in the
long-term.
The operations of Unisafe India, which has initially focused on acting
as Global Design Centre to support design and estimate needs to all our
projects in Gulf Region, has also performed well; thus achieving
breakeven in the year under review. With expanding activities in fire
detection and protection in Gulf Region, Unisafe India is also expected
to grow in tandem.
Considering that the standalone distribution and direct sales business
as well as the business based on service model with all-together new
organization and infrastructure set-up has proved sustainability in the
very second year of its existence; it is a remarkable achievement. In
the current year, despite various indicators for economic slowdown and
pressure on margin, we expect to end the current year with better
results.
Your Company''s venture into the training and education sector in the
form of Institute of Advanced Security Training and Management Private
Limited (ASTM) has redefined careers in security industry in India; and
is in the process of building large-scale educational infrastructure
including curriculum and delivery modules. Recognition to ASTM by
National Skill Development Corporation (NSDC) and its financial
assistance has opened doors of opportunities for ASTM. Besides, as per
the goals agreed with NSDC and enthused by initial encouraging
response, ASTM is now expanding on Pan-India basis through its retail
network of additional training centres. ASTM has now presence in Mumbai
and other parts of Maharashtra, Bihar, Madhya Pradesh, Haryana and
Uttar Pradesh, and is in advance stage of negotiations for setting-up
training centres for skill development and vocation in other States
like Odisha, Tripura, Chattisgarh, West Bengal, Karnataka, Kerala,
Andhra Pradesh and Rajasthan. Large spending by Central and State
Governments on skill development and vocation with assurance of
employment post training has unleashed opportunities for ASTM. Besides
Government and Public Sector, ASTM has arrangements with various
industries for training skill and semi-skilled students in different
areas in security and providing them employment as certified security
guards with security agencies, corporates, hospitals, hotels and other
industries. The course contents, training modules and study materials
of ASTM are certified by third party service providers like Security
Knowledge Sector Skills Development Council (SKSDC), an affiliate of
NSDC.
In view of the excellent response to ASTM''s training programs and
certification course with arrangement for post-training placement and
looking at ASTM''s plan to impart security training on Pan-India basis,
it is expected to post better results year over year.
DIVIDEND
Enthused by the encouraging performance of your Company during the year
under review, your Directors have recommended a higher dividend of Rs.
1.20 (Rupee One and Paise Twenty only) per Equity Share of Rs. 10 each
(i.e. 12%) as against Rs. 1 per share in the previous year. This higher
dividend is payable on 16,999,829 Equity Shares of the Company, which
will entail a total payout of Rs. 20,399,795 (previous year Rs.
16,999,829).
As on date, there are 600,000 Warrants outstanding out of total
1,600,000 Warrants issued and allotted to Promoter Group Companies
during the year on preferential basis. These Warrants entitle their
holders to acquire equal number of equity shares on the terms and
conditions of their issue. If all of these Warrants or some of them are
converted into equal number of Equity Shares, it may create an
obligation on the Company to pay dividend for the financial year
2012-13 @ Rs. 1.20 per Equity Share, on such number of Equity Shares,
which may be allotted on or before the record date fixed for deciding
entitlement for the said dividend.
FINANCE
During the year, the Company raised total Rs. 204,700,000 by preferential
issue in accordance with SEBI''s Guidelines for Preferential Issue, i.e.
Chapter VII of SEBI ICDR Regulations. Under the said preferential
issue, allotment of 3,300,000 Equity Shares of Rs. 10 each for cash at a
price of Rs. 46 per share was made on July 13, 2012 to foreign entities.
Further, 1,600,000 Warrants, each Warrant carrying an entitlement to
subscribe to one Equity Share of Rs. 10 each of the Company, were issued
to Promoter Group Companies in accordance with SEBI''s Guidelines for
Preferential Issue. Out of the total 1,600,000 Warrants, the holders of
1,000,000 Warrants, acquired equal number of Equity Shares. Thus,
1,000,000 Equity Shares were allotted at a price of Rs. 46 per share on
July 20, 2012.
As a result of the above, the Company''s Paid-up Share Capital increased
to 16,999,829 Equity Shares of Rs. 10 each
aggregating to Rs. 169,998,290. Also, it''s Securities Premium increased
by Rs. 154,800,000. Assuming full conversion and allotment of Equity
Shares for the balance 600,000 Warrants outstanding, post allotment
Paid-up Share Capital is expected to be Rs. 175,998,290 comprising of
17,599,829 Equity Shares of Rs. 10 each.
SUBSIDIARY AND JOINT VENTURE COMPANIES
As on March 31, 2013, your Company had following subsidiaries:
1. Unisafe Fire Protection Specialists LLC, Dubai (direct subsidiary);
2. Phoenix International WLL, Qatar (step-down subsidiary w.e.f. June
1, 2012);
3. Zicom SaaS Private Limited (wholly owned subsidiary);
4. Unisafe Fire Protection Specialists India Private Limited (wholly
owned subsidiary);
5. Zicom CNA Automation Limited (wholly owned subsidiary);
6. Unisafe Fire Protection Specialists Singapore Pte. Ltd., Singapore
(wholly owned subsidiary); and
7. Zicom Security Projects Pte. Ltd., Singapore (wholly owned
subsidiary w.e.f. May 2, 2012)
CiaoZicom Security Systems SA, a company in Brazil, has been set-up as
a Joint Venture (JV) between Zicom Group through Zicom Singapore (38%
stake), Ciao Telecom Inc., USA (44% stake) and IDL Global (18% stake).
The JV has taken-up the activities of manufacturing, marketing,
installing and servicing of various security products and solutions.
The JV is eyeing to benefit from various international sports events
like FIFA World Cup 2014 and Olympics 2016 to be held in Brazil.
Information on financials of the subsidiaries for 2012-13 is provided
in Annexure A hereto. In respect of foreign subsidiary companies,
figures in Rupees are converted from applicable foreign currency at
appropriate exchange rate.
The details of key subsidiaries are given below:
Unisafe Fire Protection Specialists LLC, Dubai
Unisafe Fire Protection Specialists LLC, Dubai (Unisafe Dubai), is a
leading fire protection company in U.A.E. having operation spread
across seven emirates, Qatar and Oman. Unisafe Dubai has strong
credentials established over last 17 years in the area of project
execution and servicing in the domain of fire detection and protection
in infrastructure projects.
Unisafe Dubai caters to large spectrum of clientele from government to
corporate, refineries, shopping malls, multi storey buildings and
resorts among others, offering comprehensive range of solutions for all
fire protection needs, starting from the basic Hydrant and Sprinkler
Systems to advance Analogue Addressable Fire Alarm Systems, specialized
Gaseous Fire Suppression Systems, Dry and Wet Chemical Extinguishing
Systems and Water Mist Fire Extinguishing Systems. Unisafe Dubai has
successfully achieved milestone in terms of topline, bottomline and
customer satisfaction. It has performed well and continued to enjoy
unstinted confidence from its clients despite the slowdown in U.A.E.
during the year.
Unisafe Dubai has posted Total Income of Rs. 3,358,411,279 (as compared
to Rs. 2,547,386,150 in the previous year) and a Net Profit of Rs.
240,775,816 (as compared to Rs. 209,194,821 in the previous year) for the
financial year ended March 31, 2013.
Phoenix International WLL, Qatar
Your Company together with its Singapore based wholly owned subsidiary
viz. Unisafe Fire Protection Specialists Singapore Pte. Ltd. (Unisafe
Singapore) acquired 49% stake and complete management control in
Phoenix International WLL, Qatar (Phoenix), a Limited Liability
Company, at a valuation of USD 15 million. As a part of the Share Sale
Agreement, your Company has acquired 5% stake while Unisafe Singapore
has acquired 44% stake in Phoenix, while both jointly hold 95% economic
interest.
Phoenix, established in 2006, is one of the leading fire security
solutions providers in Qatar. It offers turnkey solutions in fire
protection and suppression projects and has license to operate in
petrochemical sector. It has exclusive tie-up to market safety and
security equipments of leading international suppliers.
The portfolio of services offered by Phoenix covers design,
engineering, integrating, testing and commissioning of Fire Safety,
Security and Building Management Systems, with main focus on Fire
Prevention and Protection. Phoenix has handled many prestigious
projects in Qatar. Today, Phoenix caters to large spectrum of clientele
from government to corporate, refineries, shopping malls, multi storey
building, hotels and resorts, etc.
Phoenix is supported by a team of 212 well trained and experienced
Engineers, Technicians and other employees competent to carry out
installation and maintenance of fire fighting equipments of the
international standards.
Qatar is a part of Gulf Co-operation Council (GCC) Countries and has
the world''s highest per capita GDP. The Economy of Qatar is one of the
fastest growing economies in the world. Large projects in residential
and commercial buildings and infrastructure are coming up in Qatar and
the construction market is estimated at USD 130 billion for next 10
years which is expected to give big boost to safety and security
industry. Qatar is going to host FIFA World Cup in 2022.
Since June 1, 2012, being date of acquisition, till March 31, 2013
Phoenix has posted Total Income of Rs. 700,811,423 and a Net Profit of Rs.
105,868,044.
Zicom SaaS Private Limited
Zicom SaaS Private Limited (Zicom SaaS), a wholly owned subsidiary of
your Company, offers a range of Managed Security Services through
various schemes. This is another pioneering concept brought in India
for the first time by Zicom, leveraging its decade old experience to
deliver Managed Security Services. The Security Managed Services are
offered under different levels of security, all built into an end to
end security solutions.
Zicom SaaS protects remotely located infrastructures / assets using
electronic security equipments and offering security services through
state-of-the-art Zicom Command Centre located in Mumbai.
Under Make Your City Safe (MYCS) Project, Zicom SaaS offers security
services on a monthly / quarterly service fees to Housing and
Commercial Co-operative Societies located in Mumbai and Pune Regions.
In the Enterprise Sector, Zicom SaaS offers security servies to retail
shops, retail chains, bank branches, ATMs, etc. In an attempt to make
its service package easily affordable and relieve its clients from
worry of maintenance in up-keeping the security systems and equipments
installed, Zicom SaaS has launched a concept of Remote Managed
Electronic Security Services called "e-SaaS" (Electronic Security as a
Service). It provides client''s aspirations for more value added
services like Business Intelligence, Loss Prevention, Comfort and
Convenience, etc. bundled them into All-in-One Solution Package. All
these are provided at nominal monthly / quarterly fees.
For the financial year ended March 31, 2013, Zicom SaaS has posted
Total Income of Rs. 64,514,698 (previous year Rs. 2,185,301) and Net Profit
of Rs. 1,449,637 (previous year Rs. -11,420,773).
Unisafe Fire Protection Specialists India Private Limited
Unisafe Fire Protection Specialists India Private Limited (Unisafe
India), wholly owned subsidiary of your Company, was set-up to cater to
Indian Fire Safety market and to act as a centre for global design and
support service for large infrastructure projects in Gulf market, by
leveraging the knowledge and experience gained in Gulf market in
managing fire protection needs of large infrastructure projects by
Unisafe Dubai.
Unisafe India has posted Total Income of Rs. 159,968,594 (as compared to
Rs. 96,708,449 in the previous year) and a Net Profit of Rs. 238,165 (as
compared to Rs. -6,445,528 in the previous year) for the financial year
ended March 31, 2013.
CONSOLIDATED FINANCIAL STATEMENTS
In accordance with the Accounting Standard (AS) 21 on Consolidated
Financial Statements read with Accounting Standard (AS) 23 on
Accounting for Investments in Subsidiaries, the audited Consolidated
Financial Statements are provided in the Annual Report. Further, vide
Circular No. 2/2011 dated February 8, 2011 the Ministry of Corporate
Affairs (MCA), Government of India, has granted general exemption to
Companies under Section 212 (8) of the Companies Act, 1956 from
attaching the documents referred to in Section 212 (1) of the said Act
pertaining to its subsidiaries, subject to certain terms and
conditions.
Accordingly, the Board of Directors of your Company has granted its
consent for dispensing with the requirement of attaching to its Annual
Report, the annual audited accounts of your Company''s subsidiaries.
Therefore, the Annual Report of your Company does not contain the
individual financial statements of these subsidiaries, but contains the
audited Consolidated Financial Statements of your Company and its
subsidiaries. The Annual Accounts of these subsidiary companies, along
with the related information, are available for inspection at the
Company''s Registered Office and its subsidiaries and copies of the same
shall be provided on request. The statement on financials of the
subsidiary and statement on subsidiaries pursuant to Section 212 (3) of
the Companies Act, 1956 are attached hereto as Annexure A and Annexure
B, respectively.
DIRECTORS
In accordance with the provisions of the Companies Act, 1956 and
Article 110 of the Articles of Association, Mr. Mukul Desai is the
Director liable to retire by rotation at the ensuing Annual General
Meeting and being eligible has offered himself for re-appointment.
On September 1, 2012, Mr. Venu Raman Kumar was appointed as an
Additional Director on Board of the Company. As per the provisions of
Section 260 of the Companies Act, 1956, he holds office upto the date
of the ensuing Annual General Meeting. The Company has received a
notice from a Member, pursuant to Section 257 of the Companies Act,
1956, proposing appointment of Mr. Venu Raman Kumar as a Director of
the Company liable to retire by rotation at the ensuing Annual General
Meeting.
The brief profile of the above two Directors is given in Notice of
Annual General Meeting and discussed at length in Corporate Governance
Report.
Your Directors recommend the above appointments for your approval.
AUDITORS
The Statutory Auditors of the Company M/s. Shyam Malpani & Associates,
Chartered Accountants, Mumbai, holds their office until the conclusion
of the ensuing Annual General Meeting and are eligible for
re-appointment.
Your Company has received necessary consent and eligibility certificate
from them to the effect that their re-appointment, if made, would be
within the prescribed limits under Section 224 (1B) of the Companies
Act, 1956.
The Board recommends their re-appointment for your approval.
COST AUDIT
For the year under review, your Company was covered under the Companies
(Cost Accounting Records) Rules, 2011 for maintenance of cost records
under clause (d) of sub-section (1) of Section 209 of the Companies
Act, 1956. This made it mandatory for your Company to obtain Compliance
Certificate from a Cost Accountant as prescribed under Rule 5 of the
said Rules. In compliance of the same, your Company has obtained
Compliance Certificate certified by a Cost Accountant, which does not
contain any adverse remarks.
STATUTORY INFORMATION
(a) Conservation of Energy, Technology Absorption and Foreign Exchange
Earnings and Outgo
Conservation of Energy
Your Company is not required to furnish the prescribed information
under Section 217 (1) (e) of the Companies Act, 1956, relating to the
Conservation of Energy and Technology Absorption, as your Company does
not fall under the industries included in Schedule to the relevant
rules. However, your Directors report that the operations of your
Company do not involve much use of energy. Your Company makes every
possible effort to conserve energy at all levels of its operations.
Technology Absorption
As your Company has not imported any technology, the required
information to be provided in this regard is nil. Your Company is
continuously working on improving its indigenous products and software.
Foreign Exchange Earnings and Outgo and Export Market Developments
Your Company has earned Rs. 38,255,485 (previous year Rs. 15,485,836) in
foreign currency, and has spent Rs. 141,013,752 (previous year Rs.
150,235,114) in foreign exchange during the year under review. The
details of the same are available at Note No. 27.17 being Notes forming
part of the Financial Statements.
During the year under review, your Company started exporting on a
moderate scale, its electronic security systems and equipments to
Brazil through our JV CiaoZicom Security Systems SA. Besides this
direct export, your Company through its overseas subsidiaries is
exploring more and more business opportunities overseas.
Particulars of Employees
During the year under review, there was no employee under the
employment of your Company, who was in receipt of remuneration of Rs.
6,000,000 or more per annum, if employed for the entire year, or a
remuneration of Rs. 500,000 or more per month, if employed during any
part of the said year. Hence, the information required to be furnished
in this regard is nil.
(b) Corporate Governance
In pursuance of Clause 49 of the Listing Agreement with the Stock
Exchanges, a separate section on Corporate Governance, together with a
certificate from your Company''s Auditors confirming compliance of the
conditions of Corporate Governance as stipulated under the said Clause
is set out separately as Annexure E forming part of this Report. While
complying with Corporate Governance practices as prescribed under
Clause 49 of the Listing Agreement with Stock Exchanges, your Company
is already in compliance with some of the requirements under the
Corporate Governance Voluntary Guidelines 2009 of Ministry of Corporate
Affairs to the extent that they are in consonance with the provisions
of the Clause 49.
DEPOSITS, LOANS AND ADVANCES
Your Company has not accepted any deposits falling within the purview
of Section 58A of the Companies Act, 1956, and as such, no principal or
interest amount was outstanding on the date of the Balance Sheet. The
details of loans and advances, which are required to be disclosed in
the annual accounts of the Company pursuant to Clause 32 of the Listing
Agreement with the Stock Exchanges, are furnished separately as
Annexure D.
HUMAN RESOURCES
The Human Resource (HR) department in Zicom is structured around its
business verticals. It works more as a business partner with the
business units and ensures meeting of overall business objectives.
HR recognizes the contribution and importance of Zi-Champs in growth
and goal achievement of your Company finally creating stakeholders''
value. Towards this end entire HR process is focused on selection and
placement of right candidate at right places through cost effective
way.
Your Company participated in Global Employee Engagement Survey
conducted by the International Consulting Firm and the scores of your
Company are much higher than the Global and India Scores. Various
programs were conducted by HR to keep high the morale and involvement
of Zi-Champs. The aim has been to provide them with an environment of
oneness and a place where Zi-Champs would like to work with full zeal
and enthusiasm, thereby increasing their productivity and contribution,
finally benefitting all the stakeholders''. Towards this end, HR
conducted training programs on technical and behavioral skills, various
events and celebrations like Woman''s Day, Republic Day, Diwali, Kite
Festival, Kids Donation, etc. "Auspicious" and "Fundoo" are playing
important roles in this regard and helps to build collaborative culture
in your Company.
As on March 31, 2013 the total of direct and indirect employees were
standing at 948 numbers. To take engagement to next level, HR has
initiated number of new initiatives to create environment which will
allow individuals to excel.
EMPLOYEES STOCK OPTION SCHEME
There were two Schemes of the Company viz. Employee Stock Option Scheme
2006 (ESOS 2006) and Employee Stock
Option Scheme 2007 (ESOS 2007). Under these Schemes, the employees of
the Company have been granted Options as per the fixed eligibility
criteria. Against each of the Option, an eligible employee is entitled
to acquire equal number of Equity Shares of Rs. 10 each of the Company at
a grant price.
The validity of ESOS 2006 was upto August 2011 and ESOS 2007 was upto
September 2012. However, the outstanding Options as on March 31, 2013
were as follows: 9,900 Options under ESOS 2006 and 1,800 Options under
ESOS 2007 which are effective upto December 26, 2013.
During the year under review, no Options were exercised.
Necessary disclosures required to be given in accordance with
Securities and Exchange Board of India (Employee Stock Option Scheme
and Employee Stock Purchase Scheme) Guidelines, 1999, for ESOS 2006 and
ESOS 2007 forms part as Annexure C to this Report.
DIRECTORS'' RESPONSIBILITY STATEMENT
Pursuant to Section 217 (2AA) of the Companies Act, 1956, based on the
representations received from the operating management, your Directors
hereby confirm that in preparation of the annual accounts for the year
ended March 31, 2013:
(i) the applicable accounting standards have been followed and that
there are no material departures;
(ii) they have in the selection of the accounting policies, consulted
the Statutory Auditors and have 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) proper and sufficient care was taken, to the best of their
knowledge and ability, for the maintenance of adequate accounting
records in accordance with the provisions of the Companies Act, 1956,
for safeguarding the assets of the Company and for preventing and
detecting fraud and other irregularities;
(iv) the annual accounts have been prepared on a going concern basis.
CORPORATE SOCIAL RESPONSIBILITY (CSR) AND SUSTAINABILITY
Your Company sincerely believes that a corporate cannot grow without
considering the environment, society and economy in which it stays. All
has to grow hand in hand. Towards this end your Company is aware about
its responsibility to the society in which it lives and the environment
surrounding it; which also includes the employees with whose support it
is able to conduct its business. Your Company is constantly evaluating
various options to more effectively contribute to the society and
sustainability. The CSR initiatives undertaken by your Company have
been enumerated elsewhere in this Report.
INSURANCE
All the assets of the Company are adequately insured.
ACKNOWLEDGMENTS
Your Directors wish to place on record their sincere appreciation and
thanks for the valuable co-operation and support received from the
employees of your Company at all levels, Company''s Bankers, lenders,
suppliers, government authorities, business partners and Members of the
Company; and look forward for the same to even greater extent in the
coming years.
For and on behalf of the Board of Directors
Manohar Bidaye
Chairman
Place: Mumbai
Date: May 16, 2013
Registered Office:
501, Silver Metropolis,
Western Express Highway,
Goregaon (East),
Mumbai 400063.
Mar 31, 2012
The Directors presents their Eighteenth Annual Report, together with
the Audited Accounts of the Company for the Financial Year ended March
31, 2012.
FINANCIAL HIGHLIGHTS: (Amount in Rs.)
Particulars March 31, 20121 March 31, 2011
Consolidated Consolidated
Net Sales / Income
from Operations 4,840,504,463 3,733,674,533
Other Income 15,673,156 32,006,858
Total Income 4,856,177,619 3,765,681,391
Total Expenditure 4,335,706,157 3,486,096,102
Gross Profit before
Interest and
Depreciation 520,471,462 279,585,289
Interest and Finance Charges 138,611,350 153,880,794
Gross Profit
before Depreciation and
Taxation 381,860,112 125,704,495
Depreciation 143,273,784 152,012,753
Profit Before Tax, Exceptional &
Extraordinary Items 238,586,328 -26,308,258
Exceptional Item 19,386,598 85,090,078
Extraordinary Items - 605,258,670
Profit Before Tax 219,199,730 493,860,334
Provision for Taxation:
Current year 5,410,000 33,000,000
Deferred 6,056,491 -3,480,431
Taxation of earlier years -2,508,805 -11,502,724
Net Profit After Taxation 210,242,044 475,843,489
Less: Minority Interest 41,838,964 31,261,843
Profit for the year 168,403,080 444,581,646
Add: Balance brought
forward from
previous year 836,882,789 407,110,262
Profit available for Appropriation 1,005,285,869 851,691,908
APPROPRIATIONS:
Transfer to General Reserve - -
Provision for Dividend 12699,829 12,699,829
Provision for Tax on Dividend 2,060,230 2,109,290
Balance of
Profit carried forward to
Balance Sheet 990,525,810 836,882,789
Particulars March 31, 20121 March 31, 2011
Standalone Standalone
Net/Sale/Income from operations 2,194,159,063 1,157,486,088
Other Income 26,694,041 35,077,274
Total Income 2,220,853,104 1,192,563,362
Total Expenditure 1,956,700,601 1,149,649,503
Gross profit before interes and 264,152,503 42,913,859
Depreciation
Interest and finence chareges 73,727,745 89,839,475
Gross profit before
Depreciation and Taxation 190,424,758 -46,925,616
Depreciation 117,969,202 89,457,924
profit before Tax,
Exceptional & Extraordiary items 72,455,556 -136,383,540
Exceptional Item 19,386,598 --
Extraordinary items -- 300,190,098
profit Before Tax 53,068,958 163,806,558
provision for Taxation
Current year 5,410,000 33,000,000
Deferred 14,637,235 -3,480,431
Taxation of earlier years -2,508,805 -11,502,724
Net profit After Taxation 35.530.528 145,789,713
Less: Minority Interest - -
profit for the year 35,530,528 145,789,713
Add; Balance brought forward
from previous year 462,292,718 295,781,596
profit available for Appropriation 462,292,718 441,571,309
APPROPRIATIONS
Transfer to General Reserve - -
provision for Dividend 12,699,829 12,699,829
provision for Tax on Divided 2,060,230 2,109,290
Balance of profit carried
forward to Balance Sheet 447,532,659 426,762,190
OPERATIONAL PERFORMANCE
Your Directors are pleased to inform that, the year under review was a
first full year of operations post business restructuring.
The Total Income in 2011-12 of your Company as standalone entity was Rs.
2,220,853,104 as against Rs. 1,192,563,362 in 2010-11. Before providing
for Tax, Exceptional and Extraordinary Items, there was a Profit of Rs.
72,455,556 in 2011-12, as compared to Loss of Rs. 136,383,540 in 2010-11.
After adjusting for Exceptional and Extraordinary Items and Taxation
for Rs. 36,925,028 compared to Rs. 282,173,253 in 2010-11, Net Profit After
Tax was Rs. 35,530,528 in 2011-12 as compared to Rs. 145,789,713 in
2010-11.
On consolidated basis, the Total Income in 2011-12 of your Company was
Rs. 4,856,177,619 as against Rs. 3,765,681,391 in 2010-11. Before
providing for Tax, Exceptional and Extraordinary Items there was a
Profit of Rs. 238,586,328 in 2011-12, as compared to Loss of Rs. 26,308,258
in 2010-11. After adjusting for Exceptional and Extraordinary Items
and Taxation for Rs. 28,344,284 compared to Rs. 502,151,747 in 2010-11, Net
Profit After Tax was Rs. 210,242,044 in 2011-12 as compared to Rs.
475,843,489 in 2010-11.
However, in view of the fact that the results of your Company for the
Financial Year 2010-11 were having impact of the business restructuring
exercise, the standalone and consolidated results of your Company for
the year under review cannot be compared with the respective results of
the previous year.
The Consolidated Financial Statements (CFS) includes the financial
statements of Zicom Electronic Security Systems Limited ("the Company")
and its subsidiaries, namely, Zicom CNA Automation Limited ("ZCNA") and
Unisafe Fire Protection Specialists LLC, Dubai ("Unisafe") and its
subsidiaries. The CFS also includes the financial statements of Zicom
SaaS Private Limited ("Zicom SaaS") for full financial year and Unisafe
Fire Protection Specialists India Private Limited ("Unisafe India")
from February 9, 2012, i.e. the date it became the subsidiary of the
Company.
BUSINESS DEVELOPMENTS AND PROSPECTS
Consequent to business restructuring exercise, your Directors have
worked to build long term sustainable business model out of the
remaining structure. Further, with a view to accelerate the growth,
your Directors are also looking for some overseas acquisitions and
joint venture opportunities in security and safety domain, and hope to
conclude them soon.
With the restructuring, the Company was relieved of major debt burden
of itself and of its subsidiaries. As a result, it gained the most
needed flexibility to grow the retained businesses and pursue new
growth opportunities. With long term perspective in mind, your
Directors decided to explore your Company's ability to build a business
of services in the domain of security, such as Central Monitoring
Station services, Video Monitoring Station services, and Remote Asset
Monitoring services, Fire Safety Business and Education and Training in
Security.
With a view to provide managed security services to protect remote
assets and infrastructure through Central Monitoring Station and Video
Monitoring Station facilities with special focus on Small and Medium
Enterprises (SME), Banks, Retail Stores, etc.; your Company formed a
wholly owned subsidiary Zicom SaaS Private Limited (Zicom SaaS).
Further, to leverage in India from the reputation and experience gained
in the business of fire safety in U.A.E. through Unisafe Fire
Protection Specialists LLC, Dubai (Unisafe Dubai), a successful venture
of Zicom in Gulf region, Unisafe Fire Protection Specialists India
Private Limited (Unisafe India) was made a wholly owned subsidiary of
your Company. The subsidiary has advantage of "Unisafe" brand name,
which has many prestigious projects in Gulf to its credit. This will
give an edge to the subsidiary in bidding for large infrastructure
projects in India. To start with, Unisafe India will act as Global
Design Centre, to support design and estimate need of all our projects
in Gulf region. Looking at delays in executing large infrastructure
projects, it is thought prudent to proceed cautiously in taking up
projects in India.
India has big challenge to provide vocational training to its large
unskilled labour force, if it has to sustain its economic growth. There
is a skill gap which is being experienced by all large industries in
the country. On one hand, we have huge young work force and on other
hand, industries are struggling to get competent workers and employees.
Manpower security industry in India is the largest employer in the
world. However, employees engaged in this industry lack credible
knowledge and skills to perform their duties. The security personnel of
tomorrow need to know about physical security, fire security and
electronic security. Today all infrastructure projects, business
houses, hotels, resorts and amusement places, industrial
establishments, power plants etc. have huge demand for quality security
manpower. To bridge this gap through vocational training and education,
your Company decided to venture into training and education sector by
setting up Institute of Advanced Security Training and Management
Private Limited (ASTM). ASTM aims to redefine careers in security
industry by building large scale educational infrastructure, curriculum
and delivery modules. It also aims to drive best practices in Security
Management through high quality training programs targeted at student
education and corporate training. It is recognized by National Skill
Development Corporation (NSDC) through financial assistance. The
initial response to ASTM is quite encouraging.
Your Company has ambition to transform itself into a truly Indian
Multinational Company. With expanding business worldwide, it has become
necessary to control and monitor the fire detection and protection, and
electronic security businesses of the subsidiary companies. Towards
this end, two wholly owned subsidiaries have been formed in Singapore,
viz. Unisafe Fire Protection Specialists Singapore Pte. Ltd. and Zicom
Security Projects Pte. Ltd.
DIVIDEND
With a view to conserve resources for implementing the business plans
of the Company, your Directors have recommended a dividend of Rs. 1
(Rupee One only) per Equity Share of Rs. 10 each (i.e. 10%), on
12,699,829 Equity Shares of the Company for the Financial Year 2011-12.
This dividend will entail a total payout of Rs. 14,760,059. In the
previous year also, your Company had paid the same dividend of Rs. 1 per
Equity Share on 12,699,829 Equity Shares, which entailed the total
outgo of Rs. 14,809,119.
However, in view of the proposal approved by the Board at its meeting
held on May 17, 2012 to issue in aggregate upto 3,300,000 Equity Shares
to a foreign company and a Non-Resident Indian (NRI), and to issue in
aggregate upto 1,600,000 Warrants, carrying entitlement to subscribe to
equal number of Equity Shares, to Promoter Group Companies, both on
preferential basis, on the terms and conditions as mentioned in the
respective Special Resolutions in the Notice of the Postal Ballot
seeking your approval; if approved, may create an obligation on the
Company to pay dividend for the Financial Year 2011-12 @ Rs. 1 per Equity
Share, on such number of Equity Shares, which may be allotted on or
before the record date fixed for deciding entitlement for the said
dividend.
FINANCE
As a result of the business restructuring, your Company could
substantially reduce its debt burden. This made a way to raise funds
for future business plans. In this direction, already a proposal for
raising fund through further issue of Equity Shares and Warrants are
being put up for your approval through Postal Ballot. If approved, it
would considerably help the Company by influx of non-cost bearing fund.
The present capital structure of your Company comprises of
12.699.829 Equity Shares of Rs. 10 each aggregating to Rs. 126,998,290.
Assuming full allotment of Equity Shares in the proposed issue of
Equity Shares and Warrants, post allotment paid-up capital is expected
to be Rs. 175,998,290 comprising of 17.599.829 Equity Shares of Rs. 10
each.
SUBSIDIARY AND JOINT VENTURE COMPANIES
As on March 31, 2012, your Company had following subsidiaries:
1. Unisafe Fire Protection Specialists LLC, Dubai;
2. Zicom SaaS Private Limited (wholly owned subsidiary);
3. Unisafe Fire Protection Specialists India Private Limited (wholly
owned subsidiary);
4. Unisafe Fire Protection Specialists Singapore Pte. Ltd. (wholly
owned subsidiary); and
5. Zicom CNA Automation Limited (wholly owned subsidiary)
Subsequent to the year end, on May 2, 2012, Zicom Security Projects
Pte. Ltd., Singapore was formed as a wholly owned subsidiary. Further,
on May 17, 2012 your Board has approved entering into a joint venture
agreement with Ciao Telecom Inc., USA for setting up of a Joint Venture
(JV) Company in Brazil for manufacturing, marketing, installing and
servicing various security products and solutions in the name and style
"Ciao-Zicom Security Systems SA". The Board has also approved venturing
into fire detection, protection, safety and related services businesses
in Qatar.
Information on financials of the subsidiaries for 2011-12 is provided
in Annexure A hereto. In respect of foreign subsidiary companies,
figures in Rupees are converted from applicable foreign currency at
appropriate exchange rate.
The details of key subsidiaries are given below:
Unisafe Fire Protection Specialists LLC, Dubai
Unisafe Fire Protection Specialists LLC, Dubai (Unisafe), is a leading
fire protection company in U.A.E. having operation spread across seven
Emirates, Qatar and Oman. Unisafe has strong credentials established
over last 15 years in the area of project execution and servicing in
the domain of fire detection and protection in infrastructure projects.
Unisafe caters to large spectrum of clientele from government to
corporate, refineries, shopping malls, multi storey buildings and
resorts, among others, offering comprehensive range of solutions for
all fire protection needs, starting from the basic Hydrant and
Sprinkler Systems to advance Analogue Addressable Fire Alarm Systems,
specialized Gaseous Fire Suppression Systems, Dry and Wet Chemical
Extinguishing Systems and Water Mist Fire Extinguishing Systems.
Unisafe has successfully achieved milestone in terms of top line,
bottom line and customer satisfaction. It has performed well and
continued to enjoy unstinted confidence from its clients despite the
slowdown in U.A.E. during the year.
Unisafe has posted Total Income of Rs. 2,547,386,150 (as compared to Rs.
2,096,490,799 in the previous year) and a Net Profit of Rs. 209,194,821
(as compared to Rs. 157,278,440 in the previous year) for the Financial
Year ended March 31, 2012.
Zicom SaaS Private Limited
Zicom SaaS Private Limited (Zicom SaaS), a wholly owned subsidiary of
your Company, offers a range of Managed Security Services through
various solutions for Security Resource Planning (SRP) on an Easy-Pay
Monthly Service Charges. This is another pioneering concept brought in
India for the first time by Zicom, leveraging its decade old experience
to deliver Managed Security Services. The Security Managed Services are
offered under different levels of security, all built into an end to
end security solutions.
Zicom SaaS protects remotely located retail shops, retail chains, bank
branches, ATMs, residencies, etc. using electronic security equipments
and offering security services through state-of-the-art Command and
Control Centre located in Mumbai.
It also offers security services on the monthly service charges for
Housing and Commercial Co-operative Societies located in the Mumbai
Region (Mumbai, Thane and Navi Mumbai). On the banking and retail side,
it has received order for more than 600 locations for the CMS services.
For the Financial Year ended March 31, 2012, Zicom SaaS has posted
Total Income of Rs. 2,185,301 and a Net Loss of Rs. 11,420,773. This is
mainly on account of setting-up, initial team building and brand
building expenses.
Unisafe Fire Protection Specialists India Private Limited
Unisafe Fire Protection Specialists India Private Limited (Unisafe
India), which became the wholly owned subsidiary of your Company during
the year under review, was set-up to bring in India, knowledge and
experience gained in Gulf market for managing fire protection needs of
large infrastructure projects. Unisafe India will also act as support
service to design large infrastructure projects for Gulf market.
Unisafe India has posted Total Income of Rs. 96,708,449 (as compared to Rs.
Nil in the previous year) and a Net Loss of Rs. 6,445,528 (as compared to
Rs. Nil in the previous year) for the Financial Year ended March 31,
2012.
CONSOLIDATED FINANCIAL STATEMENTS
In accordance with the Accounting Standard (AS) 21 on Consolidated
Financial Statements read with Accounting Standard (AS) 23 on
Accounting for Investments in Subsidiaries, the Audited Consolidated
Financial Statements are provided in the Annual Report.
The Ministry of Corporate Affairs (MCA), Government of India, has
issued a Circular No. 2/2011 dated February 8, 2011 granting general
exemption to Companies under Section 212 (8) of the Companies Act, 1956
from attaching the documents referred to in Section 212 (1) of the said
Act pertaining to its subsidiaries, subject to approval by the Board of
Directors of the Company and furnishing of certain financial
information in the Annual Report.
The Board of Directors of your Company has accordingly granted its
consent to the Company, dispensing with the requirement of attaching to
its Annual Report, the annual audited accounts of your Company's
subsidiaries.
Accordingly, the Annual Report of your Company does not contain the
individual financial statements of these subsidiaries, but contains the
audited consolidated financial statements of your Company and its
subsidiaries. The Annual Accounts of these subsidiary companies, along
with the related information, are available for inspection at the
Company's Registered Office and its subsidiaries and copies of the same
shall be provided on request. The statement on financials of the
subsidiary and statement on subsidiaries pursuant to Section 212 (3) of
the Companies Act, 1956 are attached hereto as Annexure A and Annexure
B, respectively.
DIRECTORS
In accordance with the provisions of the Companies Act, 1956 and
Article 110 of the Articles of Association, Mr. Manohar Bidaye and Mr.
Vijay Kalantri are the Directors liable to retire by rotation at the
ensuing Annual General Meeting. The brief profiles of the Directors
retiring by rotation are given in Notice of Annual General Meeting and
discussed at length in Corporate Governance Report.
The above Directors being eligible have offered themselves for
re-appointment. Your Directors recommend their re-appointments for your
approval.
Mr. K. D. Hodavdekar was appointed as an Additional Director on Board
of the Company w.e.f. August 4, 2011 as per the provisions of Section
260 of the Companies Act, 1956. At the Annual General Meeting held on
September 15, 2011 the Members appointed him as a Director of the
Company liable to retire by rotation in pursuance of the notice
received u/s 257 of the Companies Act, 1956.
AUDITORS
M/s. Malpani & Associates, Chartered Accountants, Mumbai, holds the
office until the conclusion of the ensuing Annual General Meeting and
are eligible for re-appointment.
Your Company has received necessary consent and eligibility certificate
from them to the effect that their re-appointment, if made, would be
within the prescribed limits under Section 224 (1B) of the Companies
Act, 1956.
The Board recommends their re-appointment for your approval.
COST AUDIT
For the year under review, your Company was covered under the Companies
(Cost Accounting Records) Rules, 2011 for maintenance of cost records
under clause (d) of sub-section (1) of Section 209 of the Companies
Act, 1956. This made it mandatory for your Company to obtain Compliance
Certificate from a Cost Accountant as prescribed under Rule 5 of the
said Rules. In compliance of the same, your Company has obtained
Compliance Certificate certified by a Cost Accountant and the same does
not contain any adverse remarks. The said Certificate will be submitted
to the Central Government within the prescribed time.
The Ministry of Corporate Affairs (MCA) has introduced The Companies
(Cost Audit Report) Rules, 2011 vide its Notification No. GSR 430(E)
dated June 3, 2011. These rules make it mandatory for industries to
appoint a Cost Auditor within 90 days of the commencement of the
Financial Year. The Cost Audit Order No. 52/26/CAB/2010 dated January
24, 2012 covers engineering machinery (including electrical and
electronic products) due to which Company's manufacturing operations
will get covered w.e.f. April 1, 2012.
Based on the Audit Committee recommendations at its meeting held on May
17, 2012, the Board has approved the appointment of M/s. Pooja Bomb,
Cost Accountants, as the Cost Auditors of the Company for the Financial
Year 2012-13, subject to approval of the Central Government.
STATUTORY INFORMATION
(a) Conservation of Energy, Technology Absorption and Foreign Exchange
Earnings and Outgo
Conservation of Energy
Your Company is not required to furnish the prescribed information
under Section 217 (1) (e) of the Companies Act, 1956, relating to the
Conservation of Energy and Technology Absorption, as your Company does
not fall under the industries included in Schedule to the relevant
rules. However, your Directors report that the operations of your
Company do not involve much use of energy. Your Company makes every
possible effort to conserve energy at all levels of its operations.
Technology Absorption
As your Company has not imported any technology, the required
information to be provided in this regard is nil. Your Company is
continuously working on improving its indigenous products and software.
Foreign Exchange Earnings and Outgo and Export Market Developments
Your Company has earned Rs. 15,485,836 (previous year Rs. 11,429,422) in
foreign currency, and has spent Rs. 318,771 (previous year Rs. 340,991) in
foreign exchange during the year under review. The details of the same
are available at Note No. 28.22 being Notes forming part of the
Financial Statements.
During the year under review, there was no direct export of materials
and services from India; however, your Company is looking for export
avenues through its subsidiaries and joint ventures.
Particulars of Employees
During the year under review, there was no employee under the
employment of your Company, who was in receipt of remuneration of Rs.
6,000,000 or more per annum, if employed for the entire year, or a
remuneration of Rs. 500,000 or more per month, if employed during any
part of the said year. Hence, the information required to be furnished
in this regard is nil.
(b) Corporate Governance
In pursuance of Clause 49 of the Listing Agreement with the Stock
Exchanges, a separate section on Corporate Governance, together with a
certificate from the Company's Auditors confirming compliance of the
conditions of Corporate Governance as stipulated under the said Clause
is set out separately as Annexure E forming part of this Report. While
complying with Corporate Governance practices as prescribed under
Clause 49 of the Listing Agreement with Stock Exchanges, your Company
is already in compliance with some of the requirements under the
Corporate Governance Voluntary Guidelines 2009 of Ministry of Corporate
Affairs to the extent that they are in consonance with the provisions
of the Clause 49.
DEPOSITS, LOANS AND ADVANCES
Your Company has not accepted any deposits falling within the purview
of Section 58A of the Companies Act, 1956, and as such, no principal or
interest amount was outstanding on the date of the Balance Sheet. The
details of loans and advances, which are required to be disclosed in
the annual accounts of the Company pursuant to Clause 32 of the Listing
Agreement with the Stock Exchanges, are furnished separately as
Annexure D.
HUMAN RESOURCES
At the start of the year under review, the Human Resource (HR)
Department was facing challenge to make Zi-Champs adept to the changed
organization scenario, which emerged post business restructuring. To
ensure this, need was felt to build and maintain a culture of "High
Performance and Engagement" in the organization. For success of this,
"Auspicious" Program was launched with ten point agenda, with active
support of core team of managers. It had entire focus on creating a
'Change' environment in the organization. Successive sessions were
conducted on the theme 'Let's Adapt with the Changing Times', which
helped your Company to achieve this.
As a part of this Program, one important aspect established
successfully was "Communication rhythm", which helped speedy
dissemination of accurate information within the organization.
Your Company has also started hiring 'Engage-able' talent. The intent
is that the talents hired are the ones who are going to be successful
in the jobs assigned to them.
The employee strength of Zicom group as on March 31, 2012 stood at 279
comprising of five nationalities.
Based on the average age, Zicom has relatively younger talent base, and
they require to be kept 'Enthused and Engaged' all the time. Towards
this end, your Company conducted employee engagement activities round
the year. One of the events introduced was gifting a plant on the
birthday of each Zi-Champ, which could be taken home. It has become a
very popular practice in the organization.
Your Company is developing an inclusive culture. In this direction,
family members of Zi-Champs are involved in participation in corporate
programs. A "Kool Kids Day" was hosted at the office wherein kids
coming and spending a day at office turned to be a fun environment. To
help Zi-Champs to improve financial position and inculcate saving
habits in them, a program on Wealth Management was conducted with the
help of a Financial Institution. This turned out to be quiet useful for
Zi-Champs.
EMPLOYEES STOCK OPTION SCHEME
There are two Schemes of the Company viz. Employee Stock Option Scheme
2006 (ESOS 2006) and Employee Stock Option Scheme 2007 (ESOS 2007).
Under these Schemes, the employees of the Company have been granted
Options as per the fixed eligibility criteria. Against each of the
Option, an eligible employee is entitled to acquire equal number of
Equity Shares of Rs. 10 each of the Company at a grant price.
During the year under review, no Options were granted under any
Schemes, nor any Options were exercised.
Necessary disclosures required to be given in accordance with
Securities and Exchange Board of India (Employee Stock Option Scheme
and Employee Stock Purchase Scheme) Guidelines, 1999, for ESOS 2006 and
ESOS 2007 forms part as Annexure C to this Report.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to Section 217 (2AA) of the Companies Act, 1956, based on the
representations received from the operating management, your Directors
hereby confirm that in preparation of the annual accounts for the year
ended March 31, 2012:
(i) the applicable accounting standards have been followed and that
there are no material departures;
(ii) they have in the selection of the accounting policies, consulted
the Statutory Auditors and have 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) proper and sufficient care was taken, to the best of their
knowledge and ability, for the maintenance of adequate accounting
records in accordance with the provisions of the Companies Act, 1956,
for safeguarding the assets of the Company and for preventing and
detecting fraud and other irregularities;
(iv) the annual accounts have been prepared on a going concern basis.
INSURANCE
All the assets of the Company are adequately insured.
CORPORATE SOCIAL RESPONSIBILITY (CSR) AND SUSTAINABILITY
Your Company sincerely believes that a corporate cannot grow without
considering the environment, society and economy in which it stays. All
has to grow hand in hand. Towards this end your Company is aware about
its responsibility to the society in which it lives and the environment
surrounding it; which also includes the employees with whose support it
is able to conduct its business. Some of the activities carried out by
your Company forms part of its CSR initiatives and have been briefly
described below. Your Company is constantly evaluating various options
to more effectively contribute to the society and sustainability.
Social initiatives - Spreading awareness for security, protection and
care: It is said that "Prevention is better than Cure". Zicom believes
that an alert citizen can help to prevent and avert occurrence of
disasters on account of casualties, accidents, theft, burglary,
terrorism etc. In this direction, your Company pioneered formation of
Fire and Security Association of India (FSAI), and as a founder member
continued supporting various activities under the banner of FSAI, which
are mainly, aimed at educating common masses on safety measures in case
of fire and other casualties.
During the year, your Company along with its wholly owned subsidiary
Zicom SaaS Private Limited had launched one such mass awareness
movement, which has become very popular among Mumbaikars, viz. "Make
Mumbai Safe", or MMS for short. Under this Movement, we conducted
various awareness and educational programs for masses with particular
focus on Mumbai city. We covered wide spectrum of Mumbai city including
schools, housing societies, senior citizen homes, commercial complexes,
corporate parks, public gathering places like joggers parks and
nana-nani parks, etc. More than 150 programs have since been conducted
under this Movement. As a result, thousands of Mumbaikars have Pledged
to Make Mumbai Safe. Also, there are thousands of other followers who
have voted and liked the Movement on various social forums. With more
and more programs being planned and conducted across the Mumbai city,
MMS is getting further momentum. Enthused by the success to MMS
Movement, we have decided to conduct such Movement in other adjoining
cities like Pune, Thane and Navi Mumbai. Later we have plans to take
it across the country.
MMS exposure has taught us how public involvement makes a noble cause a
Movement. Besides, to make various festivals celebrations involving
mass gathering safer and secure, like Ganesh festival, Durga Pooja
festival etc. your Company held various awareness meetings with Mumbai
Police and Mumbai Fire Brigade. Your Company has also held various
career guidance workshops in Maharashtra through ASTM to support
economically backward students in their career development.
Employee Care and Betterment: In post restructuring business scenario,
we are now more focused on services. Human resources have therefore
become a key factor for us. With a view to create and maintain a
healthy workforce of highly productive Team, Zicom follows such human
resource policies, which are considered best amongst industry. Our HR
policies are for the benefit and betterment of our employees. This
includes providing better work place and working atmosphere, practicing
humanitarian and personalized approach, non-discriminating policies,
endeavoring continuous development of skill and career of our employees
by providing opportunities for in-house and on the job trainings,
lecture sessions and seminars. Our HR department has adopted new
approach of involvement to improve lifestyle of our employees and help
them to become a responsible citizen. Various steps have been taken by
your Company to achieve this, which are summarized below:
- For enlightening and building team spirit, unity and involvement
amongst employees vis-a-vis with the Company and its objectives through
employees participation in various ways like social and occasional
functions; event celebrations, picnics, participation and contribution
in corporate magazines etc. are encouraged;
- For creating awareness towards pollution free environment and its
protection, we have conducted programs to encourage employees to
celebrate Diwali without crackers and Holi with eco-friendly colours;
- To create better understanding for nature and develop a habit of
plantation and tree growing, your Company conducted inter-department
plant care-taking initiative; wherein each department was given plants
with responsibility to grow within a fixed period of time. At the end
of the period, department with best grown plant was felicitated;
- Towards better health of employees a program "Healthy DinCharya"
was organized, wherein employees were guided on yoga exercises, diet
habits and food tips for better well-being;
- For creating fire safety and protection awareness among employees,
a program on fire training was conducted; and
- Wealth management program was organized with the support of a
Financial Institution, with a view to help employees to improve their
financial position and inculcate saving habits in them.
These activities have helped your Company in improvement of morale,
zeal, enthusiasm and belongingness among its employees.
Environment and Energy Conservation: According to an English saying, "A
penny saved is a penny earned", the same principle is applied in our
business. We are in the business of providing electronic security
solutions and related services, which are non-palliative in nature. Our
activities require minimum use of energy. On the contrary our business
facilitates energy conservation through various advanced security
systems and solutions. We have gradually introduced security equipments
and gadgets which consumes substantially less energy. Not only this,
when integrated with related software and building management systems,
they facilitate lot of energy saving by automatically reducing
operations of various electronic and electrical equipments like air
conditioners, lights etc. They sense weather conditions, level of
light, temperature inside and outside premises and accordingly adjust
the usage; and thereby substantially reduce electricity consumption.
These security systems, equipments and gadgets are made / marketed by
us and thereby helping in energy conservation at large. In our offices
also, we have installed such systems, equipments and gadgets, which
conserves energy and protects environment.
Water Conservation: Water has usage in every aspects of human life.
With increasing population, urbanization and industrialization, water
is becoming more and more scarce. Our activities do not involve much
use of water. However, we have taken various steps for educating our
employees in minimizing water usage and avoid its wastage. Employees
are educated to conserve water wherever possible, by increasing
awareness for water conservation. Graphics, designs and messages are
displayed at various points of water usage like water coolers and
dispensers, washrooms, basins and gardens.
Efficiency in Material Usage: Material cost is an important cost factor
in our business and therefore we need to control it. Effective
material usage facilitates cost controls, implementation of which
differs from industry to industry and organization to organization. The
same also vary with the size and scale of a unit.
In the restructured business scenario, we are now focused on Retail and
SME segments and service sector. Therefore, our requirements for
systems, gadgets and equipments are different, which are now aimed at
meeting the needs of our new class of customer base.
With a view to have better material management, we have developed our
own engineering capabilities through in-house R&D. We constantly
endeavour to find out alternative sources for cost effective materials
as well, to avail various benefits of economies of scale, vocational
tax benefits and cost cutting due to in-house making and assembling. We
have now reworked our entire channel strategy, with implementation of
which, we hope to save on material cost.
Creating job opportunity: In our last Annual Report, while discussing
on the subject, we had informed on our efforts in setting-up an
Institute for conducting various training courses in different areas of
securities, viz. Institute of Advanced Security Training and Management
Private Limited (ASTM). Since then, we have successfully scaled up
these activities with support of NSDC, which can now cater to larger
spectrum of the Society.
We believe that a good corporate citizen should contribute in well
being and prosperity of the society and people with whom it lives.
Towards this end, ASTM impart training to students by offering various
security related courses, which offers them enormous job opportunities
in Corporates, Hotels, Malls, Offices of Public Sector Enterprises and
Places of Strategic Importance, Theatres, Stadiums, Places of Devotion
and other Places of Public Gatherings. Upon successful completion of
training, the students can get employment opportunities as security
executive, security officer or expert advisor depending upon the type
of training obtained.
We have made sizable investment in developing ASTM and our Directors
are actively involved in its management and operations. We are
attempting to expand activities of ASTM by setting-up more training
centers across the country. To start with, we are in the process of
setting-up larger training facilities in Mumbai, Noida and Patna.
Further, for offering more training facilities and courses, to meet
required fund for infrastructure, we have tied up with NSDC, which has
supported us by agreeing to fund up to Rs. 150,000,000 financial
assistance.
Through ASTM, we also help needy students by sponsoring their training,
providing scholarships, finding suitable job opportunities, either at
its owned establishment or that of its associates, customers and other
stakeholders. We are confident that in the long run many families will
be benefited with availability of job opportunities, thereby raising
family income, eradication of poverty and upliftment of standard of
living.
ACKNOWLEDGMENTS
Your Directors wish to place on record their sincere appreciation and
thanks for the valuable co-operation and support received from the
employees of the Company at all levels, Company's Bankers, lenders,
suppliers, government authorities, business partners and Members of the
Company; and look forward for the same to even greater extent in the
coming years.
For and on behalf of the Board of Directors
Manohar Bidaye
Chairman
Place: Mumbai
Date: May 17, 2012
Registered Office:
501, Silver Metropolis,
Western Express Highway,
Goregaon (East), Mumbai 400063.
Mar 31, 2010
The Directors presents their Sixteenth Annual Report, together with
the Audited Accounts of the Company for the financial year ended March
31, 2010.
FINANCIAL HIGHLIGHTS (Rs. in million)
Particulars March31,2010 March31,2009 March31,2010 March31,2009
Consolidated Consolidated Standalone Standalone
Net Sales/Income
from Operations 5,279.70 3,757.55 2,447.68 1,952.53
Other Income 6.16 7.05 0.76 4.44
Total Income 5,285.86 3,764.60 2,448.44 1,956.97
Total Expenditure 4,740.76 3,252.36 2,175.06 1,702.99
Gross Profit before
Interest and Depr-
eciation 545.10 512.24 273.38 253.98
Interest and Finance
Charges 235.92 163.62 148.06 96.97
Gross Profit before
Depreciation and
Taxation 309.18 348.62 125.32 157.01
Depreciation 121.75 108.40 34.99 25.95
Profit Before Tax 187.43 240.22 90.33 131.06
Provision for Taxation:
Current year 3.00 18.00 3.00 18.00
Deferred 11.68 (3.91) 26.80 12.11
Fringe Benefit Tax Nil 2.70 Nil 1.80
Taxation of earlier
years (5.00) 0.56 Nil 0.56
Net Profit After
Taxation 177.75 222.87 60.53 98.59
Less: Minority
Interest 27.46 26.98 Nil Nil
Profit for the year 150.29 195.89 60.53 98.59
Add: Balance brought
forward from previous
year 340.19 161.31 315.39 227.20
Profit available for
Appropriation 490.48 357.20 375.92 325.79
APPROPRIATIONS:
Transfer to General
Reserve 9.33 6.61 6.10 Nil
Provision for Dividend 63.50 8.89 63.50 8.89
Provision for Tax on
Dividend 10.54 1.51 10.54 1.51
Dividend including
taxes for earlier year Nil Nil Nil Nil
Balance of Profit
carried forward to
Balance Sheet 407.11 340.19 295.78 315.39
OPERATIONAL PERFORMANCE
Your Directors are pleased to inform that the year under review
witnessed achievement of milestone by the Company, in terms of its
Total Income, both on standalone and consolidated basis. While
standalone Total Income of Rs. 2,448 million crossed Rs. 2,000 million
mark, the consolidated Total Income at Rs. 5,286 million crossed Rs.
5,000 million mark for the first time in the history of the Company.
The growth in Total Income on standalone and consolidated basis were
25% and 40% respectively. However, the profitability could not cope up
with this growth, mainly on account of high operating and finance
costs.
As a result, the Profit Before Tax on standalone basis decreased to Rs.
90 million (previous year Rs. 131 million) and on consolidated basis
the Profit Before Tax decreased to Rs.187 million (previous year Rs.
240 million). While, Net Profit After Tax on standalone basis decreased
to Rs. 60 million (previous year Rs. 99 million) and the same on
consolidated basis after Minority Interest, was Rs. 150 million
(previous year Rs. 196 million).
The Consolidated Financial Statements include the financial statements
of Zicom Electronic Security Systems Limited ("the Company") and its
subsidiaries, namely, Zicom Retail Products Private Limited ("ZRPPL"),
Zicom Manufacturing Co. (HK) Ltd., Zicom CNA Automation Limited ("Zicom
CNA") and Unisafe Fire Protection Specialists LLC, Dubai ("Unisafe")
and its subsidiaries.
BUSINESS DEVELOPMENTS AND PROSPECTS
As the Members are aware, on March 5, 2010, the Company had entered
into a Business Transfer Agreement (BTA) with Schneider Electric India
Private Limited (Schneider) for sale, transfer, disposal of its
Electronic Security Systems Business comprising of two groups viz.
Building Solutions Group (BSG) and Special Projects Group (SPG) and the
business of Zicom CNA Automation Limited, as a going concern on slump
sale basis for a total consideration of Rs. 2,250 million, subject to
adjustments on Escrow and other accounts of Rs. 120 million as mutually
agreed between the Company and Schneider. However, the said transfer
excluded the retail business, business of Central Monitoring Station
and Video Monitoring Station with right to continue the business of
fire
detection and suppression on a stand alone basis. The said BTA received
the Members approval through Postal Ballot on April 16, 2010.
Your Directors are pleased to inform that during the current year, your
Company has successfully effected the business transfer transaction as
per terms of the BTA. The transaction resulted into Net Profit of Rs.
965 million in the first quarter of the financial year 2010-11. The
discontinued business contributed Rs. 2,434 million to the total
turnover (99%) and Profit After Tax of Rs. 91 million.
The transaction has not only enabled your Company to repay its major
debt burden and that of subsidiaries, but has also enhanced its
flexibility to grow the retained businesses and pursue new growth
opportunities.
Your Company has decided to move away from project business in long
term perspective. The sale of Electronic Security Systems Business,
being project business of the Company, was first step in this
direction. The Company is bullish on its ability to build a business of
services in the domain of security, such as Central Monitoring Station
services, Video Monitoring Station services, asset tracking services,
education and training in security, etc. Today many assets and
infrastructure such as mobile towers, windmills, construction sites
which are remotely located, are in need of such security services.
Considering the past experience and goodwill earned, the Company is
confident of building this business model successfully, which will give
sustained annuity revenue with higher margin. In this regard, the
Company may opt for both organic and inorganic growth. Also, the
Company will continue to drive its growth in the remaining business
with new enthusiasm.
DIVIDEND
In view of the above, your Directors recommend a payment of dividend of
Rs. 5 (Rupees Five only) per Equity Share of Rs. 10 each (i.e. 50%), as
compared to Re. 0.70 per share (7%) declared in previous year on
12,699,829 Equity Shares (previous year 12,699,829 Equity Shares) of
the Company for the financial year 2009-10, thereby entailing the total
payout of Rs. 74 million (previous year Rs. 10 million).
FINANCE
During the year under review, the Company forfeited and transferred to
Capital Reserve, total sum of Rs. 73.50 million received towards
application money for 3,675,000 warrants issued in the financial year
2007-08 on preferential basis to Promoters Group Companies and other
entities; as they failed to exercise their respective options to
acquire equivalent number of fully paid equity shares of Rs. 10 each at
a price of Rs. 200 per share before the prescribed dates.
SUBSIDIARY AND JOINT VENTURE COMPANIES
During the financial year, the Company had four subsidiaries viz.
Zicom Retail Products Private Limited, Unisafe Fire Protection
Specialists LLC, Dubai, Zicom CNA Automation Limited and Zicom
Manufacturing Co. (HK) Ltd. Information on financials of the
subsidiaries for 2009-10, are provided in Annexure B hereto. In respect
of foreign subsidiary companies, figures in rupees are converted from
applicable respective foreign currencies at appropriate exchange rate.
Brief of each subsidiary company is as under:
Unisafe Fire Protection Specialists LLC, Dubai
Unisafe, subsidiary of the Company in U.A.E., leader in providing Fire
Detection and Fire Fighting systems, equipments and services, has its
presence in Dubai, Abu Dhabi and Qatar, operating for over a decade. It
has proved to be a very promising venture of your Company in the GCC
countries. Unisafe caters to large spectrum of clientele from
government to corporate, refineries, shopping malls, multi storey
buildings and resorts, among others. Offering comprehensive range of
solutions for all Fire Protection needs, starting from the basic
Hydrant and Sprinkler Systems to advance Analogue Addressable Fire
Alarm Systems and specialized Gaseous Fire Suppression Systems, Unisafe
has achieved its milestone in terms of top line, bottom line and
customer satisfaction. It has performed well and continued to enjoy
unstinted confidence from its clients despite the slowdown in U.A.E.
during the year. Also, your Company acquired additional 1,960 shares of
AED 1,000 each, thereby increasing its investment to 2,450 shares of
AED 1,000 each in Unisafe. However, as the other JV partner has also
increased his investment in the Company proportionately the holding
ratio of both JV Partners in Unisafe has remained unchanged.
On consolidated basis, Unisafe has posted Total Income of Rs. 1,819
million and a Net Profit of Rs. 149 million.
Zicom Retail Products Private Limited
Zicom Retail, wholly owned subsidiary, focuses on security needs of
separate verticals of fastest growing Small and Medium Business (SMB),
Retail and Residential segments in the country.
SMB is one of the fastest growing segments in India and as per
available research report; India has the 2nd largest SMB population
compared to peer nations such as Brazil, Russia, China and USA. Zicom
Retail sales in the SMB segment are very healthy and it is expected to
grow rapidly in this segment in the coming years. SMBs are installing
electronic security systems with dual objectives à productivity
monitoring and surveillance.
The other segment which saw increased adoption of electronic security
systems was the mid-format Retail Chains. The expectations from the
customers in this segment are very demanding and Zicom Retails product
mix and services portfolio addresses the specific needs of such
customers. The Company had added very big names during the year to its
already huge customer base in the country.
Riding on the back of aggressive growth rates of building and
residential segments during the year, Zicom Retail registered better
growth in the segment.
In its second year of operations, Zicom Retail has achieved Total
Income of Rs. 944 million and incurred a Net Loss of Rs. 12 million.
This was mainly due to higher operating and finance costs incurred
during the year. With various cost cutting measures undertaken, the
Company is expected to break even in the current financial year.
Zicom Manufacturing Co. (HK) Ltd.
Zicom Manufacturing Co. (HK) Ltd., a subsidiary of the Company with 76%
of stakeholding, was initiated with a multiple purpose of promoting
international marketing and sale of Zicom branded products, enabling
the Company to source equipments at competitive prices and supporting
customers in India for their imports who enjoy tax benefits. The growth
of this subsidiary remains stagnant due to change in strategy on
procurement. In the second year of its operations, the subsidiary has
posted Net Income
of Rs. 65 million with Net Profit of Rs. 3 million.
In view of the sale of domestic business to Schneider, the utility of
this subsidiary for the growth strategy has been significantly reduced.
Zicom CNA Automation Limited
Zicom CNA Automation Limited, a Company which is a 51%-49% JV between
your Company and CNA Group Ltd., Singapore and its Associates had
access to superior automation technologies. It was aimed to enable your
Company to capitalize on emerging opportunities into iBMS coupled with
security integration. However, this JV did not deliver as expected, as
it took off at the same time when the global slowdown commenced.
In view of the above, your Company decided to acquire the balance
equity holding of 49% from CNA Group Ltd. and its Associates and sale
and transfer the entire business under BTA dated March 5, 2010 with
Schneider. The same has been successfully completed alongwith the sale
and transfer of your Companys BSG and SPG business, as informed
earlier in this Report.
In its second year of operations, Zicom CNA had achieved Total Income
of Rs. 20 million and incurred a Net Loss of Rs. 6 million.
CONSOLIDATED FINANCIAL STATEMENTS
In accordance with the Accounting Standard (AS) 21 on Consolidated
Financial Statements read with Accounting Standard (AS) 23 on
Accounting for Investments in Subsidiaries, the Audited Consolidated
Financial Statements are provided in the Annual Report. The Company has
been exempted by Central Government under Section 212 of the Companies
Act, 1956, from attaching a copy of financial statements of Zicom
Retail Products Private Limited, Unisafe Fire Protection Specialists
LLC, Dubai, Zicom Manufacturing Co. (HK) Ltd. and Zicom CNA Automation
Limited. Accordingly, the financial statements of the subsidiaries are
not attached with this Annual Report. The statement on subsidiaries
pursuant to Section 212 (3) of the Companies Act and statement on
financials of the subsidiary pursuant to Central Governments approval
are attached hereto as Annexure B and Annexure C respectively. Further,
as required by the Central Government, the Annual Accounts of the
subsidiary companies and related information shall be made available
to the investors of the Company and its subsidiaries seeking such
information; and the same are also available for inspection by any
investor at the Registered Office of the Company and its subsidiaries.
DIRECTORS
In accordance with the provisions of the Companies Act, 1956 and
Article 110 of the Articles of Association, Mr. Mukul Desai and Dr. B.
Samal are the Directors liable to retire by rotation at the ensuing
Annual General Meeting. The brief profile of the Directors retiring by
rotation is given in Notice of Annual General Meeting and discussed at
length in Corporate Governance Report.
Both the above Directors being eligible, have offered themselves for
re-appointment. Your Directors recommend their re-appointments for your
approval.
GROUP
As required under Clause 3 (1) (e) of Securities and Exchange Board of
India (Substantial Acquisition of Shares and Takeovers) Regulations,
1997, persons constituting "Group" as defined under the Monopolies and
Restrictive Trade Practices ("MRTP") Act, 1969, for availing exemption
from applicability of provisions of Regulations 10 to 12 of the
aforesaid SEBI Regulations are disclosed in Annexure A to this Report.
AUDITORS
The term of office of M/s. P. Raj & Co., Chartered Accountants and
Statutory Auditors of the Company will expire at the conclusion of the
ensuing Annual General Meeting. However, M/s. P. Raj & Co. has
intimated their unwillingness to be
re-appointed as Statutory Auditors of the Company. The Company has
received a Special Notice for appointment of M/s. Walker, Chandiok &
Co, Chartered Accountants, as Statutory Auditors in place of the
retiring Auditors M/s. P. Raj & Co., to hold the office from conclusion
of ensuing Sixteenth Annual General Meeting of the Company till
conclusion of the subsequent Annual General Meeting. The Company has
also received consent and certificate of eligibility under Section 224
(1B) of the Companies Act, 1956 from M/s. Walker, Chandiok & Co,
Chartered Accountants. The Directors
recommend the appointment of M/s. Walker, Chandiok & Co, Chartered
Accountants, as Auditors of the Company for your approval.
STATUTORY INFORMATION
(a) Conservation of Energy, Technology Absorption and Foreign Exchange
Earnings and Outgo
Conservation of Energy
The Company is not required to furnish the prescribed information under
Section 217 (1) (e) of the Companies Act, 1956, relating to the
Conservation of Energy and Technology Absorption, as the Company does
not fall under the industries included in Schedule to the relevant
rules. However, your Directors report that the operations of the
Company do not involve much use of energy. The Company makes every
possible effort to conserve energy at all levels of its operations.
Zicom CNA Automation Limited, the Companys subsidiary, is aimed to
offer solutions to support conservation of energy by users.
Technology Absorption
The Company has not imported any technology and therefore no
information is provided in this regard. However, the Company is
continuously working on improving its indigenous products and software.
Foreign Exchange Earnings and Outgo and Export Market Developments
The Company has earned Rs. 40 million (previous year Rs. 8 million) in
foreign currency, and has spent Rs. 0.15 million (previous year Rs.
0.75 million) in foreign exchange during the year under review. The
details of these foreign exchange expenditures are available at Note
Nos. 21 and 22 of Schedule 16, being Notes forming part of the
Accounts.
Export of material and services by the Company has been on a very
moderate scale to the Gulf region and UK. Your Company is exploring
possibilities of developing other export markets. In addition, the
Company through its subsidiary in Dubai is catering to fire safety
related requirements of Gulf region and has registered very strong
presence there.
(b) Particulars of Employees
The Company had three employees including Managing Director, who were
in receipt of remuneration of not less than Rs. 2,400,000 during the
year ended March 31, 2010 or not less than Rs. 200,000 per month during
any part of the said year. Details in respect of remuneration paid to
employees as required under Section 217 (2A) of the Companies Act,
1956, read with the Companies (Particulars of Employees) Rules, 1975,
as amended, forms part of this Report. However, in pursuance of Section
219 (1) (b) (iv) of the Companies Act, 1956, this Report is being sent
to all the Members of the Company excluding the aforesaid information
and the said details will be made available on request, and also made
available for inspection at the Registered Office of the Company.
Members interested in obtaining such particulars may write to the
Company Secretary at the Registered Office of the Company.
(c) Corporate Governance
In pursuance of Clause 49 of the Listing Agreement with the Stock
Exchanges, a separate section on Corporate Governance, together with a
certificate from the Companys Auditors confirming compliance of the
conditions of Corporate Governance as stipulated under the said Clause,
is set out separately as Annexure F forming part of this Report.
DEPOSITS, LOANS AND ADVANCES
Your Company has not accepted any deposits falling within the purview
of Section 58A of the Companies Act, 1956, and as such, no principal or
interest amount was outstanding on the date of the Balance Sheet. The
details of loans and advances, which are required to be disclosed in
the annual accounts of the Company pursuant to Clause 32 of the Listing
Agreement with the Company, are furnished separately as Annexure E.
HUMAN RESOURCES
As on March 31, 2010, the total strength of the Company along with its
subsidiaries was around 385 employees at various locations in India and
abroad. Subsequent to year end, under BTA with Schneider, 92 employees
of the Company have joined Schneider on May 1, 2010.
Every year the Company introduces new initiatives. During the year, the
Company introduced a very successful employee engagement initiative Ã
The 3C Business Promotion Program.
This Program was manned by the HR Department and the intent was to get
all the employees in the Company connected to the business. Employees
were encouraged to contribute potential business leads under this
Program, which were forwarded to the respective sales team to follow up
with the potential customers. On successful closure of the business
lead, the concerned employee was awarded Ãstars which were redeemable
for rewards.
Your Company continues to maintain a very diverse workforce which also
manifests a diverse culture to support the successful growth of various
businesses.
EMPLOYEES STOCK OPTION SCHEME
In accordance with Employees Stock Option Scheme (ESOS) of the Company,
the employees have been offered options as per eligible criteria fixed
under the Scheme. Against each of the above, an eligible employee is
entitled to acquire equal number of equity shares of Rs. 10 each of the
Company at a price as may be decided by the Board / Compensation
Committee. There are two Schemes of the Company viz. ESOS 2006 and ESOS
2007.
Further as under BTA, 92 employees of the Company have joined Schneider
on May 1, 2010, all the unexercised Stock Options granted to such
employees lapsed, changing substantially the status of outstanding
Employee Stock Option under ESOS 2006 and ESOS 2007 of the Company.
Necessary disclosures required to be given in accordance with
Securities and Exchange Board of India (Employee Stock Option Scheme
and Employee Stock Purchase Scheme) Guidelines, 1999, for ESOS 2006 and
2007 forms part as Annexure D to this Report.
DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to Section 217 (2AA) of the Companies Act, 1956, the Directors
hereby confirm that in preparation of the annual accounts for the year
ended March 31, 2010:
(i) The applicable accounting standards have been followed along
with proper explanation relating to material departures, if any;
(ii) Reasonable and prudent judgment and estimates were made, 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 the year
ended on March 31, 2010;
(iii) Proper and sufficient care was taken for the maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act, 1956 for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities;
(iv) The annual accounts have been prepared on a going concern basis.
INSURANCE
All the assets of the Company are adequately insured.
CORPORATE GOVERNANCE VOLUNTARY GUIDELINES 2009
With a view to enhance economic value of corporate enterprises in India
and also to enhance value for every stakeholders connected with the
Indian corporate world, as also to bring corporate governance in India
at par with global benchmarks, the Ministry of Corporate Affairs (MCA)
had issued Corporate Governance Voluntary Guidelines in December 2009.
MCA has proposed that after considering the experience and feedback of
Indian corporates in adopting these Guidelines, it would review the
Guidelines for further improvements after one years period.
Your Company fully supports this initiative of MCA, which it believes
will greatly help the Indian corporate world to achieve global
standards in Corporate Governance. Your Company strongly believes in
forming and adopting best practices for good Corporate Governance and
its corporate philosophy hovers around the same. While complying with
Corporate Governance practices as prescribed under Clause 49 of the
Listing Agreement with Stock Exchanges, your Company is already in
compliance with some of the requirements under the Voluntary Guidelines
of MCA to the extent that they are in consonance with the provisions of
the Clause 49.
CORPORATE SOCIAL RESPONSIBILITY AND SUSTAINABILITY Ã A HUMBLE BEGINNING
The Ministry of Corporate Affairs has released Voluntary Guidelines on
Corporate Social Responsibility (CSR) in December 2009. The Company has
already been carrying activities in relation to its responsibility to
the society in which it lives and the environment surrounding it, which
also includes the employees with whose support it is able to conduct
its business. Some of the activities carried out by the Company forms
part of its CSR initiatives and have been briefly described below. Your
Company is constantly evaluating various options to play its role more
effectively in its contribution to the society and sustainability.
Social initiatives à Spreading awareness for security, protection and
care: During the year under review, the Company has initiated various
programs to build awareness amongst the citizens on disaster management
and fire safety. In this regard, the Company had run an awareness
program through Fire and Safety Association of India to make Ganesh
festival in Maharashtra more safe and secure. Also, during the year,
the Company has conducted various complimentary programs in schools and
colleges to help students to manage any disaster due to fire,
earthquake or terrorism. In the current financial year, Company
initiated program to support students in their career.
At Zicom, we sincerely believe that a corporate cannot grow without
considering the environment, society and economy in which it stays.
All has to grow hand in hand.
Employee Care and Betterment: Best human resource policies are being
followed for the benefit and betterment of its employees. It includes
better work place atmosphere, humanitarian and personalized approach,
development of skill and career through continuous opportunities for
in-house and on the job trainings, lectures, sessions and seminars.
Enlightening and building of team spirit, unity and involvement amongst
employees vis-a-vis with the Company and its objectives. This is being
achieved through employees participation in various ways like social
and occasional functions, event celebrations, picnics, participation
and contribution in corporate magazines, etc.
Employees are also encouraged to grow the business through a reward
scheme for providing lead to the Company in getting orders and
business. Under the Scheme employees get pre-determined incentives
against successful orders procured through business leads provided by
them. Further, employees are also trained in security and first aid and
provided free medical assistance under insurance cover.
All the above steps have helped your Company in morale boosting of its
employees and to improve their zeal, enthusiasm and belongingness,
which finally helps your Company in its growth and prosperity.
Environment and Energy Conservation: Your Company is in the business of
providing total security solutions through electronic systems and
gadgets, which are non-pollutive and consume very less energy. Its
business also caters to energy conservation and waste management
through the concept of green building and intelligent building
solutions under the roof of its subsidiary Zicom CNA Automation
Limited. Further, the security equipments like sensors, control panels
integrated with related software facilitates energy saving by
automatically reducing operations of various electronic and electrical
equipments like air conditioners, lights, etc. which senses weather
conditions, level of light, temperature inside and outside premises and
accordingly adjust the usage, thereby substantially reducing
electricity consumption. These security systems, equipments and gadgets
are made and marketed by your Company to its various customers thereby
helping in energy conservation at large. At our offices also, with the
installation of such systems, equipments and gadgets, we endeavor to
minimize the energy usage and thereby directly and indirectly help in
environmental protection.
Water Conservation: Water is becoming more scarcer resource with
increasing population, urbanization and industrialization. Water finds
usage in every aspects of human life. Realizing importance of the
water, we at Zicom have taken various initiatives to manage its usage.
Some of them are minimizing consumption by educating employees to avoid
its wastage and conserve water wherever possible. To inculcate the
awareness for water conservation for every employee we have resorted to
educate them to that effect by
displaying graphics, designs and messages at every point of water usage
like water coolers and dispensers, washrooms, basins and gardens. We
feel that we have been successful in our motive, thereby helping the
society at large to conserve the scarce water resources.
Efficiency in material usage: Material usage is a very important factor
in business cost control. It can lift or sunk an enterprise depending
upon the management of material usage. Effective material usage
facilitates cost controls. However, its implementation differs from
industry to industry, organization to organization and the same also
vary with the size and scale of a unit. Your Company being in
electronic security industry in India, its requirements for systems,
gadgets and equipments are different from that of the other countries
in the world.
As we have been in custom build system integration, automation and SOHO
segment where customized pre-configurated systems are required to meet
the needs of various classes of retail customers, your Company cannot
rely merely on imported material. Keeping view the long term approach
and also to facilitate cost reduction and strengthening the margin the
Company has set up on a moderate scale a manufacturing unit at Parwanoo
in Himachal Pradesh. This will benefit us in better material
management, as we can have flexibility in timely sourcing of required
materials to meet our customer needs, enable us to take advantage of
our engineering capabilities developed through in-house R&D, avail
various benefits of economies of scale, locational tax benefits and
cost cutting due to in-house manufacturing using material sourced more
economically. Also, to take advantage of better material management,
both at sourcing and distribution ends; we have reworked our entire
channel strategy, with implementation of which, we are hopeful to have
sizable saving in material cost.
Creating job opportunity: Your Company strongly believes that as a good
corporate citizen, it should contribute in well being and prosperity of
the society and people with whom it lives. Even the business activities
of the Company are directed towards this motive. In this direction,
the Company has taken initiatives in setting up an institute where
students will be imparted training in various aspects of security, so
that at the end of the training they can be moulded as security
executive, security officer or expert advisor. This is an uncultivated
job area, where enormous job opportunities lie ahead in corporates,
hotels, malls, offices of public sector enterprises and places of
strategic importance, theatres, stadiums, places of devotion and other
places of public gatherings. Your Company has contributed to this
honest cause by making some initial investment in setting up of the
institute and is closely associated for its further development.
In furtherance to achieve this objective, your Company has planned to
help needy students by sponsoring their training, providing
scholarships, finding suitable job opportunities, either at its owned
establishment or that of its associates, customers and other
stakeholders. We are confident, that in the long run many families will
be benefited with availability of job opportunities, thereby raising
family income, eradication of poverty and upliftment of standard of
living.
ACKNOWLEDGMENTS
Your Directors wish to place on record their sincere appreciation and
thanks for the valuable co-operation and support received from the
employees of the Company at all levels, Companys Bankers, lenders,
suppliers, government authorities, business partners and Members of the
Company and look forward for the same in greater measure in the coming
years.
For and on behalf of the Board of Directors
Manohar Bidaye
Chairman
Place: Mumbai
Date : August 14, 2010
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