DIRECTOR'S REPORT The Members, 1. Your Directors are pleased to present the 16th Annual Report of the Company for the financial year 2014-15. 2. DIVIDEND In order to strengthen the financial viability and in view of the future plans of the company, your directors have expressed their inability to recommend any dividend for the financial year 2014-15. 3. TRANSFER TO GENERAL RESERVE The Company proposes to transfer an amount of Rs.5.23 lakhs/- to the General Reserve out of the amount available for appropriations. 4. PERFORMANCE REVIEW On consolidation basis, your company achieved revenue from operations Rs.195700.36 lakhs for the financial year 2014-15 as against Rs.167337.38 lakhs in the previous financial year, an increase of around 16.95% year on year basis. Earnings before Interest, Tax, Depreciation and amortisation (EBITDA) increased by 58.93% to Rs.58588.99 lakhs as compared to Rs.36864.98 lakhs for the previous financial year. Profit after Tax (PAT) stood at Rs.34221.77 lakhs as compared to Rs.22096.28 lakhs for the previous financial year. The digital segment revenues grew by 22.88% and overall revenue growth is about 16.95% compared to previous year. During the year under review, there is no change in nature of business of the company and no material changes and commitments have occurred after the close of the year till the date of this Report, which affect the financial position of the Company. 5. BUSINESS REVIEW The Management Discussion and Analysis Section of the Annual Report presents a detailed business review of the company. 6. SUBSIDIARY COMPANIES There has been no material change in nature of business of the Subsidiaries. There are no associate companies within the meaning of Section 2(6) of the Companies Act, 2013 (hereinafter referred as "Act). Pursuant to Proviso to Section 129(3) of the Act, a statement containing the brief details of performance and financials of the Subsidiary Companies, for the financial year ended March 31, 2015 is attached to Financial Statements of the Company. Pursuant to Section 136 of the Act, the financial statements including consolidated financial statements and other relevant documents are available at website of the company www.lycos.com under Investor section. During the year under review, none of the Companies have become nor ceased to be subsidiaries or associates or Joint Ventures of the Company. 7. CONSOLIDATED FINANCIAL STATEMENTS In terms of Section 129(3) of the Companies Act, 2013 and Clause 32 of the Listing Agreement with the Stock Exchanges, Consolidated Financial Statements of the Company prepared in accordance with Accounting Standards issued by Institute of Chartered Accountants of India, are attached and forms part of the Annual Report. 8. FIXED DEPOSITS During year under review, your company has neither invited nor accepted any Fixed Deposits from the public. 9. CORPORATE GOVERNANCE Your Company is committed to adhere to the standards of corporate governance as set out by the Listing agreement. The majority of the decisions of the Board are taken at the Board meetings and the Board has constituted certain committees to enable better management of the affairs of the Company. The details relating to number of Board meetings held during the year under review and composition of the committees are disclosed in Corporate Governance Report. The requisite certificate from the Auditors of the Company confirming the compliance of the conditions stipulated under Clause 49 of the Listing Agreement is attached to the Report on Corporate Governance. 10. MANAGEMENT DISCUSSION AND ANALYSIS REPORT As stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges, the Report on Management Discussion and Analysis is annexed to this report and forms part of the Annual Report. 11. POLICY ON CODE OF CONDUCT The Company has laid down a "Code of Conduct & Ethics" for all Board members and Senior Management Personnel. Pursuant to Clause 49(II)(E)(ii) of the Listing Agreement, the Declaration by the Chairman and Managing Director affirming the compliance with the Code of Conduct & Ethics is attached to the Report on Corporate Governance. 12. DIRECTORS AND KEY MANAGERIAL PERSONNEL Pursuant to provisions of Section 152 of the companies Act, 2013, Mr.M.Suresh Kumar Reddy, Director retires by rotation at the ensuing Annual General Meeting and being eligible offers himself for re-appointment. The Board of Directors re-appointed Mr.Y.Ramesh Reddy as an Independent Director of the Company, for tenure of five years, at the forthcoming Annual General meeting, pursuant to provisions of the Section 149 of the Companies Act, 2013 (Act) and Clause 49 of the Listing Agreement. Pursuant to provisions of Section 149(1) and 161 of the Act and Clause 49(II)(A)(1) of the Listing agreement, Mrs.S.V.Rajyalaxmi Reddy has been appointed as an Additional Director of the Company w.e.f March 27, 2015. The Board of Directors appointed Mr. Michael Loren Mauldin and Mr. Subrato Saha as an Additional Directors (Independent Directors) of the Company w.e.f August 24, 2015. The resolutions seeking approval of the Members for the reappointment / appointment of Mr. Y. Ramesh Reddy, Mrs. S. V. Rajyalaxmi Reddy, Mr. Michael Loren Mauldin and Mr. Subrato Saha have been incorporated in the notice of the forthcoming annual general meeting of the Company. The Company has received notices under Section 160 of the Act along with the requisite deposit proposing the appointment of Mrs. S. V. Rajyalaxmi Reddy as Director, Mr. Y. Ramesh Reddy, Mr. Michael Loren Mauldin and Mr. Subrato Saha as Independent Directors. All the Independent Directors of the company have given declaration to the Company that they meet the criteria of independence as specified under Section 149(6) of the Act and Clause 49 of the Listing agreement. During financial year under review, Mr.Amreek Singh Sandhu has resigned as CFO w.e.f December 31, 2014 and Mr.Y.Srinivasa Rao has been appointed as CFO w.e.f January 1, 2015. Ms.K.Anusha has been appointed as CS w.e.f. May 28, 2014. The Policy on appointment and remuneration for Directors, Key Managerial Personnel and other employees as specified under Section 178(3) of the Act has been disclosed in Corporate Governance Report. 13. BOARD EVALUATION The Board of Directors has carried out an annual evaluation of its own performance, its committees and individual directors, as per the requirements of the Act. The performance of the Board was evaluated at a meeting wherein all the Directors has discussed about the performance of the Board, effectiveness of board process, flow of information, execution of the decisions of the Board and contribution of individual directors etc. The performance of the Committees was evaluated by the Board by considering the effective recommendations made by the Committees, from time to time, to the Board of the Directors of the Company and effectiveness of Committee meetings etc. As per Schedule IV of the Act, Independent Directors of the Company at a separate meeting evaluated the performance of non-independent directors, the Board as a whole and the Chairman of the company taking into account the views of executive and non executive directors. Independent Directors also reviewed the quality, quantity and timeliness of flow of information between management of the Company and the Board, for the effective performance of the board. 14. AUDITORS AND THEIR REPORTS Statutory Auditors M/s.P.Murali & Co., Statutory Auditors of the company holds the office until the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment. The Company has received a letter from the Statutory Auditors that their appointment, if made, would be within the limits prescribed under the provisions of the Companies Act, 2013 and that they are not disqualified for re-appointment. The Board of Directors recommends the reappointment of M/s.P.Murali & Co., as Statutory Auditors of the Company. The Auditor's Report on the financial statements of the Company for financial year 2014-15 does not contain any adverse remark, qualifications. Secretarial Audit As per provisions of Section 204 of the Act, the Board of Directors of the company have appointed M/s Jaipal Reddy N & Associates, Practicing Company Secretaries as Secretarial Auditor for the purpose of auditing the Secretarial activities of the Company for the financial year 2014-15. The Secretarial audit report issued by the said auditor has been annexed to this report as Annexure A. The Secretarial Audit Report does not contain any adverse remarks or qualifications. 15. PARTICULARS OF LOANS, INVESTMENTS AND GUARANTEES The particulars of loans, investments made and guarantees issued under Section 186 of the Act, during year under review are provided in notes to accounts of financial statements. 16. RELATED PARTY TRANSACTIONS As per the requirement of provisions of the Act and Clause 49 of the Listing agreement, the Company has formulated a policy on related party transactions to ensure the transparency in transactions between the company and related parties. The said RTP Policy is also available at Company's website at www.lycos.com under Investors Section. All Related Party Transactions entered by the Company during the year under review were in ordinary course of business and on Arm's length basis. There were no materially significant related party transactions entered by the company during year under review. Since all the related party transactions were in ordinary course of business and were on Arm's length basis, disclosure in form AOC-2 as required under Section 134(3) (h) of the Act is not applicable. 17. INTERNAL FINANCIAL CONTROLS AND RISK MANAGEMENT The details relating to internal financial controls and their adequacy and Risk Management are included in the Management Discussion and Analysis Report. 18. WHISTLE BLOWER POLICY The Board has adopted a Vigilance Policy as stipulated under Section 177(9) of the Act and Clause 49 of the Listing agreement to report the genuine concerns of the employees. Protected disclosures can be made by the employees of the company to the Ombudsperson appointed by the Board for this purpose and can also have access to the Chairman of Audit Committee. 19. EXTRACT OF ANNUAL RETURN Extract of Annual Return of the company as provided under section 92(3) of the Act is annexed as Annexure B to this Report. 20. SIGNIFICANT AND MATERIAL ORDERS There are no significant and material orders passed by the regulators or orders or tribunals impacting the going concern status and Company's operations in future. 21. PARTICULARS OF EMPLOYEES No Salary is being paid to Directors of the Company including Managing Director other than sitting fee to Independent Directors and hence the details as required to be disclosed under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration to Key Managerial Personnel) Rules, 2014 is not applicable. The statement containing particulars of employees of the company who are in receipt of remuneration in excess of the limits specified under Rule 5(2) of Companies (Appointment and Remuneration of Key Managerial Personnel) Rules 2014 is annexed to this report. Further, this report and accounts are being sent to the members excluding the aforesaid annexure. In terms of Section 136 of the Act, the said annexure is open for inspection at the registered office of the Company. Any shareholder interested in obtaining a copy of the same may write to the Company Secretary. 22. SEXUAL HARASSMENT During the year under review, there were no cases field pursuant to the Sexual Harassment of women at work space(Prevention, Prohibition and Redressal) Act, 2013 and the Rules there under. 23. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS & OUTGO: The particulars, as prescribed under Section 134(m) of the Companies Act, 2013, read with Rule 8(3) of Companies (Accounts) Rules, 2014, are as following: (I) Details of Conservation of Energy The operations of your company do not consume high levels of energy. The Company uses electric energy for its equipment such as computer terminals, air conditioners, lighting and utilities in the work premises. Adequate measures have been taken to conserve energy by using energy-efficient computers and equipment with the latest technologies. However, the requirement of disclosure of particulars with respect to conservation of energy as prescribed in the Section 134(m) of the Companies Act, 2013, read with Rule 8(3) of Companies (Accounts) Rules, 2014 are not applicable to the Company and hence not provided. (ii) Technology Absorption The Information Technology (IT) and Information Technology Enabled Services (ITES) Industry are subject to high rate of technological obsolescence. The Company's business is Digital Marketing and Software Development. The change in the industry paradigm is dynamic. The Company is continuously updating these changes and constantly evaluating these developments to improve its capabilities towards the industry. Accordingly, research and development of new services, display advertising, platforms and methodologies, continue to be of importance to us. This allows us to enhance quality, productivity and customer satisfaction through continuous improvements and innovations. As part of the continuous thrust on R&D, the company is also focused on Solutions Research and Vertical Focus Research. These would identify new ideas which would enable business process improvement for customers and would be aligned with the business strategy and growth opportunities of the organization. Our R & D activities are not capital intensive and we do not specifically provide for the same in our books. (iii) Foreign Exchange Earnings and outgo The particulars of earnings and expenditure in foreign exchange during the year are given in notes to Standalone financial statements. 24. CORPORATE SOCIAL RESPONSIBILITY The brief outline of the Corporate Social Responsibility (CSR) policy of the company and the initiatives undertaken by the company on CSR activities during the year as required to be disclosed under Annexure ii of the Companies (Corporate Social Responsibility Policy) Rules, 2014 is annexed as Annexure C to this Report. 25. DIRECTORS' RESPONSIBILITY STATEMENT Pursuant to the provisions of Section 134(5) of the Companies Act, 2013, the Board of Directors hereby state that: (a) In preparation of annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures. (b) Selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit of the company for that period; (c) Have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities; (d) Prepared the annual accounts on a going concern basis;and (e) The company had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively (f) Devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively. 26. ACKNOWLEDGEMENTS AND APPRECIATIONS We thank our Customers, Vendors, governmental authorities, Banks, Financial Institutions and esteemed Shareholders for their continued support. We place on record our appreciations of the contribution made by the employees at all levels. For and on behalf of the Board of Directors LYCOS INTERNET LIMITED (Formerly, Ybrant Digital Ltd) M. Suresh Kumar Reddy Chairman & Managing Director Place: Hyderabad Date: August 24, 2015 |