Ducon Infratechnologies Ltd Management Discussions.

Management Analysis and Discussions

Discussion on financial performance with respect to operational performance

During the year, your Company earned total revenues of Rs. 4082.49. lacs compared with Rs. 3262.82 lacs during the previous year, reflecting a growth of 25.12% over the previous year. The profit before tax stood at Rs.110.94 lacs as compared to Rs. 45.24 lacs in the previous year. The Company has made a provision of tax totaling to Rs. 53.60 lacs and the profit after tax stood at Rs. 69.32 lacs for the current year. The Operating Profit (earnings before depreciation and interest and tax) grew from Rs. 211.95 lacs to Rs. 298.94 lacs, a growth of 41.04% over the previous year.

The Company has built a comprehensive brand portfolio across various verticals including software, server and security, and this has helped the company to increase its earnings. The company has a mix of products, services and technology integration in order to build opportunities for incremental revenue growth along with Non IT infrastructure for its clients.

Review of Operations including IT Infra and Non IT Infra Industry Structure and Developments

IT Infra Structure and Developments

The year under review was one of the most challenging ones in recent years. The year witnessed moderate growth in Global demand of IT products reflecting broad pricing pressures, government spending constraints from continued fiscal challenges, data center consolidation enabled by virtualization, accelerating cloud adoption and a shift toward lower-cost hardware products. In India although the sentiment continues to be positive, demand on the ground has not picked across product categories. From an IT products standpoint, the market remains sluggish. Projects, essentially driven out of investment in infrastructure by government and corporates, have slowed down and only old projects are being executed. Your Company has demonstrated its high adversity quotient and its capacity for implementing differentiated strategic solutions.

Information Technology lies at the core of your Companys business. The sector prompted and shaped industrial growth and transformed the lifestyle of the citizens. Now a new trend is emerging where the enterprise focus is gradually shifting from capital expenditure to operating expenditure and billing style is changing from transaction to annuity, pay-per-use, and pay- per-click. The trend is not disruptive today and is at a nascent stage. But it is expected to evolve in the next decade. The strong fundamentals of business and the current model will continue to be in vogue but at a lower pace of growth as compared to the new tech trend. Looking ahead there are a few significant trends shaping the distribution business in general and IT distribution in particular. Your Company is engaged in monitoring and suitably adapting its strategy to participate and be relevant in the changed scenario.

Adoption of Cloud based infrastructure and solutions is gaining traction in India and there is a gradual acceptance on the part of organizations in the SMB sector to embrace this practice in order to shift their IT Infrastructure from a Capex to an Opex model. Cloud technology allows users access to applications over the Internet displacing the age-old practice of running programs by downloading software onto a physical server or computer. We aspire to position ourselves as a single company that acts as a bridge between the Cloud Technology providers and the End Customers by offering a complete bouquet of Cloud solutions and services. Your Company is looking to sell Cloud Solution as a product. As the demand pattern in India matures, your Company will evaluate appropriate Cloud business strategies and invest in this space accordingly.

Given that India is one of the fastest growing markets in the world, all major brands in the enterprise and retail verticals, even those with an existing presence in the country, are keenly looking at ways to increase their market share. Our diversity in terms of a large bouquet of products lines and vendors and geographical reach has enabled your Company to take maximum advantage of the available growth opportunities. Your Company has embarked on the set up of a robust services platform that benefits both the brand and the end customer. This will involve offering complete parts planning, parts warehousing, forward and reverse logistics, imts and re-exports, and assets recovery and e-waste management to provide a single-window fret-free parts management service to brands.

With growing dependence on IT, thanks to the Internet and mobility, uptime of devices be it PCs, Tablets or Smart phones, and enterprise assets like networking devices, servers and storage which support them, has become critical for running business applications and maintaining operational efficiencies. User organizations have therefore time and again necessarily refurbished their IT hardware from a plethora of vendors ending up with products from multiple brands. To complicate matters further, rapid strides in technology have successfully shortened product life cycles and put tremendous strain on parts availability for maintenance of assets beyond service life. Managing the uptime of heterogeneous IT hardware is therefore a huge challenge for user companies. Your company is looking to tap this into a big opportunity and offer single window SLA bound AMC service for heterogeneous hardware, which spans PCs, peripherals, and enterprise assets. Your Companys investment and engagement over the years has enabled it to develop a strong foothold catering to Enterprise & Infrastructure projects.

While strengthening and consolidating its core business, it is evaluating ways and means of transforming through better efficiencies and increased process driven automation. Your company is evolving into a Solution oriented partner for its vendors and customers. Pre-Sales and Technical Sales talents are deployed to help partners provide their customers with customized solutions to achieve their desired business outcomes even on the NON IT infra requirements of the clients.

Non IT Infra Industry Structure and Developments-FGD

Industry

Flue gas desulfurization (FGD) is a process that removes sulfur dioxide from the flue gas before its emission. This process is carried out during combustion in fossil fuel power plants such as coal and oil fired combustion units. When coal or oil is burned to produce energy, about 95% of the sulfur is converted into sulfur dioxide under standard temperature conditions. FGD can be characterized into wet & spray dry scrubbing, wet sulfuric acid process, SNOX flue gas desulfurization and dry sorbent injection system based on methods of desulfurization. Flue gas desulfurization technology has gained importance as a result of increasing air pollution due to sulfur dioxide released into the atmosphere during combustion processes. Flue gas desulfurization market has witnessed a significant growth in recent years due to stringent government policies relating to emissions of harmful gases in the environment.

Additionally, increasing demand for electricity coupled with dependence on coal for power production will further boost the demand for FGD systems. Rapid industrialization and increasing the need for electricity in emerging economies is expected to boost the demand for flue gas desulfurization systems in future. Technological advancements in the development of highly efficient systems may provide market participants with new opportunities. Additionally, decreasing the capital cost of FGD systems might provide opportunities for new participants in the market. However, operation and maintenance costs increase as a result of many reagents that are required to treat sulfur content in gases. Disposal of waste as a result of FGD processes considerably increases the operation and maintenance cost of flue gas desulfurization systems. Moreover, availability of alternative methods such as hydrodesulfurization, fluidized bed combustion, and THIOPAQ may hinder the market growth in future.

Technology

There are two types of technologies used for flue gas desulfurization - wet and dry FGD systems. In dry FGD systems, reagents such as lime and limestone are injected directly into flue gas to remove sulfur dioxide, whereas, in wet FGD systems, the reagent is added to water to remove sulfur dioxide. Wet FGD systems are widely used in comparison to dry FGD and are expected to maintain dominance over the forecast period owing to high efficiency and low maintenance.

Applications

Application segments of flue gas desulfurization market include new FGD systems and reagents & replacements. Increasing electricity demand in emerging economies such as China and India owing to rapid industrialization and urbanization is expected to increase the number of coal-fired power plants. This, in turn, is expected to boost the demand for new FGD systems in the market. The demand for reagents & replacements was primarily for repair of parts such as pump impellers, nozzles, valves and filter belts among others in established FGD systems. The increasing use of reagents such as limestone, dibasic acid, and sodium hydroxide is further expected to boost the growth of reagents & replacements application segment in the market.

Geography

Asia Pacific emerged as the largest region for flue gas desulfurization market accounting for more than half of the market share in 2013, owing to stringent government regulations and presence of a large number of coal-fired power plants in India and China. Additionally, rising concerns over industrial air pollution is also a major driver of FGD market in this region. North America and Europe accounted for over 40% of the market share in 2013. The market in this region is primarily driven by demand for new FGD systems to retrofit existing power plants. In addition, replacement of obsolete parts in existing flue gas desulfurization systems is expected to boost the demand for flue gas desulfurization systems in the region.

Key Players in the Market

Some of the major companies in global flue gas desulfurization market include Alstom S.A., Babcock & Wilcox, Siemens Energy, Thermax, Ducon Technologies Inc., Hamon Research-Cottrell, Mitsubishi Heavy Industries, and Marsulex Environmental Technologies. Other companies include China Boqi, Chiyoda Corporation, Hitachi Power Systems America Ltd., Marsulex Environmental Technologies and Lonjing Environment Technology Co. Ltd.

Ducon and FGD

Ducon has supplied wet FGD systems on over 20,000 MW of combined power plant capacity. Ducon FGD systems can achieve over 99% sulfur dioxide removal efficiency. Ducon Flue Gas Desulfurization systems can also recover up to 90% of oxidized mercury in the flue gas.

Depending upon the reagent utilized, Ducon can select a packed tower, a spray tower or a Ventri-Rod Absorber (VRA™) (a proprietary Environeering unit) for the wet FGD application. For Dry Flue Gas Desulfurization systems, Ducon uses its proprietary two-fluid nozzle DRX-25 to atomize feed slurry in the spray reactor. Ducon can also provide a Circulating Reactor Dry FGD System suitable for applications of upto 3% sulfur coal and by utilizing dry lime, it can provide upto 97% SO2 removal efficiency. Ducon provides either bag house filter or Electrostatic Precipitator for duct collection downstream. Ducon works with reputable vendors to provide Gas-to-Gas heat exchangers, fans, controls, and reagent handling & feeding systems.

Ducon has the capability to provide a complete global turnkey installations including effluent treatment systems.

Strengths

The Company provides the entire spectrum of Information Technology Infra and Non IT Infra. The strength of your Company is the brand and products diversification along with wide product range, dedicated group of talented professional who drive its business and relationships with its business partners and manage its support functions. The strategy to engage with clients on their large transformative programs, both in traditional IT areas as well as for their new digital business initiatives and non IT Infra. The company expands existing client relationships by providing them with a broad set of end-to-end service offerings and increase the size, nature and number of projects they do with them.

The inherent strength of your Company derives from its absolute belief in sound, sustainable business practices and an ability to continuously address the diverse needs of its customers. The strengths have enabled your Company to successfully articulate its various differentiated value propositions in the markets in which it operates. The strategic objective of the company is to build a sustainable organization that remains relevant to the agenda of the clients, while generating profitable growth for the investors. In order to do this, the company will apply the priorities of renew and new to our own business and cascade it to everything we do.

We believe our strong brand, robust quality process and our access to skilled talent base at lower costs of providing services places to us in a unique position to take advantage of the opportunities available. The Company is not dependent on any single technology or platform. The company has developed competencies in various technologies, platforms and operating environment, and offers a wide range of technology options for its clients to choose from, based on their needs.

Quality

Customer Satisfaction and excellence in quality are key elements for succeeding in this competitive market. In order to be able to respond quickly to the customers, your Company continues with various internal initiatives to implement result oriented quality management models, compete effectively, improve organizational flexibility and efficiency, streamline internal processes across all its entities globally and institutionalize a culture of continuous improvement.

Your Company continues to strive towards operational and delivery excellences with a renewed focus on the path of business excellence. Customer satisfaction and excellence in quality are key elements for succeeding in the competitive global market. A strong emphasis is based on quality in every aspect of the companys activities. In line with this philosophy we have designed our quality management program and have defined several key parameters for measurement of quality levels to ensure improvement in the quality of the deliverables. Several initiatives have been taken to implement result oriented quality management models.

In order to be able to respond quickly to the customers, your Company continues with various internal initiatives to compete effectively, improve organizational flexibility and efficiency, streamline internal processes and institutionalize a culture of continuous improvement. The system comprises well defined organization structure, pre-identified authority levels and documented policy guidelines and manuals for delegation of authority.

Review of key business processes like business planning, reporting and communication has been done to make them more effective in meeting business objectives. Moving forward, your company shall continue to further strengthen its processes by adopting best-in-class standards.

Opportunities and threats

Opportunities

We believe there is a growing demand for additional services and solutions from companies that already have an established global presence and existing infrastructure, which is why we are strategically focused on increasing our capabilities in these areas. Our diversification strategy continues to provide us with new growth opportunities. Looking towards the future, your Company will remain focused on agility, innovation and operational excellence. Focusing on strategic verticals and geographies will also lead to an increase in the list of potential customer base.

Threats:

Competition is the main threat to most tech outfits, considering the relentless product cycles, the typically rapid move toward commoditization in the sector and also changes in technology and markets, changes in government policy or regulations / legislation etc also brings challenges and treats to the smooth functioning of the Company. The focus of the Traditional IT service providers is slowly moving towards industry focused business solutions and digital-business enablement. As companies recognize the critical role of technology as an enabler to their business, the number of in-house technology centres of large enterprises as well as the number of new entrants in the market increases.

Since the IT Infra sector and Non IT Infra is exposed to high attrition rate due to more opportunities available in market for the employee, retaining existing talent pool and attracting new talented manpower is a major risk to the Company. The Company has initiated various measures to enhance the retention of employees during the year which includes, employee engagement surveys, transparent Performance Management System, to maintain employee-friendly culture in the organization.

Risks and Concerns

The productive life of IT Infra and Non IT Infra resources and competencies is shrinking, thereby increasing the level of investment needed to meet the market requirements. The convergence of IT and Telecommunication industries, while provide huge growth opportunities to your Company, also exposes it to increased competition. In the IT industry, the ability to execute projects, build and maintain client partnerships and to achieve forecasted operating and financial results are significantly influenced by the organizations success in hiring, training and retaining highly skilled IT professionals. The market continues to be highly competitive for attracting and retaining IT professionals & this is compounded by the ever changing constraints around talent mobility primarily on account of regulatory requirements and also the evolving value propositions for a range of clients across geographies.

Both the number of incidents and the severity of cyber security threats are increasing globally and are becoming more widespread. This can put the company and the client data of risk, in the event that data confidentiality, integrity and availability is compromised, presenting a risk to the success and sustenance of the company.

The Companys objectives and expectations may be forward looking within the meaning of applicable laws and regulations. The competition from large international and Indian IT companies is increasing in the domestic market space. Actual results may differ materially from those expressed. Important factors that could influence the Companys operations include change in government regulations, tax laws, increased competition, economic and political developments.

Internal control systems and their adequacy

The Companys well-defined organizational structure, documented policy guidelines, defined authority matrix and internal controls ensure efficiency of operations, compliance with internal policies and applicable laws and regulations as well as protection of resources. The Companys internal control system is commensurate with its size, scale and complexities of its operations. The Company has a well-defined delegation of power with authority limits for approving revenue as well as expenditure and processing payments. The Company has the robust Management Information System, which is an integral part of the control mechanism Your Company has an effective internal control and risk mitigation system, which are constantly assessed and strengthened with new/revised standards operating procedures. The Company has made the employees responsible for establishing expectations and seeking feedback at every role that is assigned. The employees have been enabled to influence their network of peers to co-own goals. This has helped enable cross functional collaboration and interlock. Employees can give and receive help on their goals by making them public and also express their likelihood of reaching their goals. The company has put in place adequate systems of internal control commensurate with its size and the nature of its business. These systems provide a reasonable assurance in respect of financial and operational information, compliance with both applicable statutes, & corporate policies and safeguarding of the assets of the company.

Ducon Infratechonologies Limited has an audit committee, the details of which have been provided in the corporate governance report.The Audit Committee of the Board of Directors actively reviews the adequacy and effectiveness of the internal control systems and suggest improvements to strengthen the same.

3. Dividend

With a view to plough back the profits of the Company and keeping in mind the expansion of business activities, the Board of Directors consider it prudent and recommend not declaring any dividend for the year ended March 31, 2017.

4. Transfer of Unclaimed Dividend to Investor Education And Protection Fund:

The Provisions of Sec.125 (2) of the Companies Act, 2013 do not apply as there was no dividend declared and paid last year.

5. Transfer to reserves

The Company has transferred Rs. 69.32 Lakhs amount to reserves.

6. Material changes and commitments, if any, affecting the financial position of the company which have occurred between the end of the financial year of the company to which the financial statements relate and the date of the report

• There were no material changes and commitments, affecting the financial position of the Company which has occurred between the end of the financial year of the Company and the date of the Directors report.

• There are no significant and material orders passed by the Regulators or courts or tribunals impacting the going concern status and companys operations in future.

• During the year the company announced the scheme of arrangement for the demerger under sections 391 to 394 of the companies act, 1956 between Ducon Technologies (India) Private Limited(Demerged Company) & Ducon Infratechnologies Limited (Formerly Known As Dynacons Technologies Limited) (Resulting Company) & their respective shareholders and creditors.

• The Company has received in-principal approval from BSE Ltd. and National Stock Exchange of India Ltd. dated January 01, 2017 and January 03, 2017 respectively. The NCLT passed orders for convening meeting for the shareholders of the Company on August 31, 2017 and the shareholders at the court convened meeting passed the resolution for the scheme of arrangement with majority of 99.60%.The Voting Results were uploaded on both the Stock Exchanges i.e. National stock Exchange Limited and BSE Limited and are available on the Companys Website.

Details of the same are available on the website of the Company

• During the year under review, there were no cases filed under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

7. Details of Holding/Subsidiary/Joint Ventures/Associate Companies:

The Company does not have any Holding/Subsidiary/Joint Ventures/Associate Companies.

8. Explanation or comments on Qualifications, reservations or adverse remarks made by Auditors and the Practicing Company Secretary in their Reports:

The Auditors Report to the members on the Accounts of the Company for the financial year ended 31st March, 2017 does not contain any qualifications, reservations or adverse remarks and Secretarial Audit Report provided by

9. Directors and Key Managerial Personnel

Ms. Ratna Jhaveri (holding Din 07732263), was appointed as a Non-Executive, Independent Director w.e.f. February 14, 2017. The Director has given the declaration to the Board that she met the criteria of independence as provided under Section 149(6) of the said Act and also confirmed that she will abide by the provisions as mentioned in Schedule IV of the Companies Act, 2013.

Pursuant to Section 149 of the Companies Act, 2013, the Board recommended the appointment of Ms. Ratna Jhaveri for a period of 5 Years as an Independent Director of the Company, not liable to retire by rotation from the date of its 8th Annual General Meeting subject to approval of the Members of the Company.

Mr. Abhinav Anand (holding Din 07732241), was appointed as an Additional Director designated as an Independent Director w.e.f. February 14, 2017. The Director has given the declaration to the Board that he met the criteria of independence as provided under Section 149(6) of the said Act and also confirmed that he will abide by the provisions as mentioned in Schedule IV of the Companies Act, 2013.

The Board recommends the resolutions for your approval for the above appointments.

During the year, Mrs. Pinakee Parikh resigned from the post of Non-Executive, Independent Director of the Company w.e.f February 14, 2017.

During the year Key Managerial Personnel Structure was revised and new Key Managerial Personnel will be Mr. Arun Govil, Mr. Harish Shetty and Mr. Chandrasekhar Ganesan w.e.f. August 13, 2016.

10. Auditors

M/s. P. Parikh & Associates, Chartered Accountant resigned as a Statutory Auditor of the Company w.e.f. 2017. The board recommended M/s. Hitesh Shah & Associates, Chartered Accountants firm having firm registration no. as Statutory Auditor of the Company w.e.f. 2017 subject to approval of members in the ensuing AGM.

Pursuant to the provisions of Section 139 of the Act and the rules framed thereunder, M/s. Hitesh Shah & Associates, Chartered Accountants firm was proposed to be appointed as Statutory Auditors of the Company from the conclusion of the ensuing 8th Annual General Meeting (AGM) of the Company till the conclusion of the 12th AGM to be held in the year 2022, subject to ratification of their appointment at every AGM in place of M/s. P. Parikh & Associates , Chartered Accountants. The Company has received the eligibility certificate from the Statutory Auditor.

Auditors Report

The Auditors Report does not contain any qualification. Notes to Accounts and Auditors remarks in their report are selfexplanatory and do not call for any further comments.

11. Scheme of Arrangement

During the year the company announced the scheme of arrangement for the demerger under sections 391 to 394 of the Companies act, 1956 between Ducon Technologies (India) Private Limited(Demerged Company) & Ducon Infratechnologies Limited (Formerly Known As Dynacons Technologies Limited) (Resulting Company) & their respective shareholders and creditors.

The Company has received in-principal approval from BSE Ltd. and National Stock Exchange of India Ltd. dated January 01, 2017 and January 03, 2017 respectively. The NCLT passed orders for convening meeting for the shareholders of the Company on August 31, 2017 and the shareholders at the court convened meeting passed the resolution for the scheme of arrangement with majority of 99.60%.The Voting Results were uploaded on both the Stock Exchanges i.e. National stock Exchange Limited and BSE Limited and are available on the Companys Website.

12. Corporate Governance

Your Company has always practiced sound corporate governance and takes necessary actions at appropriate times for meeting stakeholders expectations while continuing to comply with the mandatory provisions of corporate governance.

As required under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the report on Management Discussion and Analysis, Corporate Governance as well as the Statutory Auditors Certificate regarding compliance of conditions of Corporate Governance forms part of the Annual Report.

13. Code of Conduct For Directors And Senior Management

The Directors and members of Senior Management have affirmed compliance with the Code of Conduct for Directors and Senior Management of the Company. The copies of Code of Conduct as applicable to the Executive Directors (including Senior Management of the Company) and Non Executive Directors are uploaded on the website of the Company - www.dtlindia.com.

14. Familiarization Program for Independent Directors

The Company has practice of conducting familiarization program of the independent directors as detailed in clause 8 of the Corporate Governance Report which forms part of the Annual Report.

15. Particulars of the Employees

The information as required under Section 197 of the Act and rules made there-under is not applicable as none of the employees are in receipt of remuneration which exceeds the limits specified under the said rules.

16. Documents Placed on the Website

The following documents have been placed on the website in compliance with the Act

• Financial statements of the Company along with relevant documents.

• Details of Vigil mechanism for directors and employees to report genuine concerns as per proviso to Section 177(10).

• The terms and conditions of appointment of independent directors as per Schedule IV to the act.

• Latest Announcements

• Annual Reports

• Shareholding Pattern

• Code of Conduct

• Corporate Governance

• Nomination and Remuneration Policy

17. Human Resource Management (Material developments in Human resources/Industrial Relations front, including number of people employed)

Your Companys core strength is its people. To bring in more business focus and total ownership, your Companys business organizational structure has been redesigned. This is expected to allow better growth and reward opportunities for talent, while simultaneously delivering better value to shareholders. Your Company has HR policy that elaborates on each aspect of human resource management including recruitment, employee development & training, staff welfare, administration services & recreation events. The Company offers a growth environment along with monetary benefits in line with industry standards. The Company has a number of employee initiatives to attract, retain and develop talent in the organization.

Your Company encourages regular training and development program. Continuous training is imparted in advanced technologies, managerial and soft skills for the employees to enhance their skill-sets in alignment with their respective roles. The major thrust continues in the effort to bring about measurable change in training coverage and effectiveness, increasing the Leadership and Development opportunities for every staff member.

Companys people centric focus providing an open work environment fostering continuous improvement and development helped several employees realize their career aspirations during the year. Ducon has continually adopted structures that help attract best external talent and promote internal talent to higher roles and responsibilities.

Employee Retention is a key focus area. The Company has initiated various measures to enhance the retention of employees during the year which includes, employee engagement surveys, transparent Performance Management System, and connect to maintain employee-friendly culture in the organization.

18. Fixed Deposits

Your Company has not accepted any fixed deposits and, as such, no amount of principal or interest was outstanding as on the date of the Balance Sheet.

19. Directors Responsibility Statement

Pursuant to the provisions of clause (C) of sub-section (3) of Section 134 of the Companies Act, 2013 the Directors based on the information and representations received from the operating management confirm that:

i) In the preparation of the annual accounts, the applicable accounting standards had been followed along with no material departures;

ii) The Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period;

iii) The Directors had taken proper and sufficient care, to the best of their knowledge and ability, for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv) The Directors had prepared the annual accounts on a going concern basis; and

v) The directors had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively.

vi) The directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

20. Share Capital

The paid up Equity Share Capital as on 31st March, 2017 was Rs. 7,84,23,100 divided into 7,84,23,100 Equity shares of Re.1/- each which is same as share capital as at the previous year end.

21. Shares

a. Buyback of Securities: The Company has not brought back any of the securities during the year under review.

b. Sweat Equity: The Company has not issued any sweat equity shares during the year under review.

c. Employee Stock Option Plan: The Company had passed Resolution for providing Stock Options to the employees of the Company through postal ballot.

22. Board Evaluation

Pursuant to the provisions of the Companies Act, 2013, the Board has carried out an annual performance evaluation of its own performance, the directors individually as well as the evaluation of the working of its Audit, Nomination & Remuneration Committee.

23. Number of Meetings of the Board

During the year Nine Board Meetings were held. The details of the Board and various Committee meetings are given in the Corporate Governance Report.

24. Declaration by an Independent Director(s)

A declaration has been received by an Independent Director(s) that they meet the criteria of independence as provided in sub-section (6) of Section 149 of the Companies Act, 2013 and SEBI (Listing Obligation & Disclosure Requirements) Regulations, 2015. Further, there has been no change in the circumstances which may affect their status as independent director during the year.

25. Remuneration Policy

The Board has, on the recommendation of the Nomination & Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management and their remuneration.

Nomination remuneration and compensation committee policy (NRC Committee)

The NRC Committee of the Company shall be formed by the Board of Directors of the Company out of its Board members. The NRC Committee shall consist of minimum three non-executive directors out of which two shall be independent directors. The chairperson of the company may be appointed as a member of the NRC Committee but shall not chair the NRC Committee. The Chairman of the NRC Committee shall be an independent director. No member of the NRC Committee shall have a relationship that may interfere with his independence from management and the Company or with the exercise of his duties as a NRC committee member. The NRC Committee may invite such of the executives of the Company, as it considers appropriate (and particularly the Managing Director) to be present at the meetings of the NRC committee, but on occasions it may also meet without the presence of any executives of the company. The Company Secretary shall act as the secretary to the NRC Committee.

26. Composition of Audit Committee

The Audit Committee which comprises of three directors namely, Mr. Harish Shetty, Mr. Viren Shah and Ms. Ratna Jhaveri w.e.f. 14th February, 2017

During the year, Ms. Ratna Jhaveri was appointed as Non-Executive, Independent Director of the Company w.e.f. February 14, 2017 was inducted as a member of Audit Committee and Mrs. Pinakee Parikh resigned from the post of Non-Executive, Independent Director of the Company w.e.f. February 14, 2017 and simultaneously from Audit Committee.

27. Risk Management

Risks are events, situations or circumstances which may lead to negative consequences on the Companys businesses. Risk management is a structured approach to manage uncertainty. As a formal roll-out, all business divisions and corporate functions will embrace Risk Management Policy and Guidelines, and make use of these in their decision making. Key business risks and their mitigation are considered in the annual/strategic business plans and in periodic management reviews. The risk management process in our multi-business, multi-site operations, over the period of time will become embedded into the Companys business systems and processes, such that our responses to risks remain current and dynamic.

The Risk Management is overseen by the Audit Committee of the Company on a continuous basis. The Committee oversees Companys process and policies for determining risk tolerance and review managements measurement and comparison of overall risk tolerance to established levels. Major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continuous basis. For details, please refer to the Management Discussion and Analysis report which form part of the Board Report.

28. Vigil Mechanism

Your Company has established a mechanism called Vigil Mechanism for directors and employees to report the unethical behavior, actual or suspected, fraud or violation of the Companys code of conduct or ethics policy and provides safeguards against victimization of employees who avail the mechanism. The Vigil Mechanism Policy has been uploaded on the website of the Company atwww.dtlindia.com .

29. Corporate Social Responsibility

The Company is not required to constitute a Corporate Social Responsibility Committee as it does not fall within purview of Section 135(1) of the Companies Act, 2013 and hence it is not required to formulate policy on corporate social responsibility.

30. Particulars of Employee

None of the employee has received remuneration exceeding the limit as stated in rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

31. Particulars of Remuneration

The information required under Section 197 of the Act and the Rules made there-under, in respect of employees of the Company, is given under Annexure IV.

32. Internal Audit & Controls

The Company has in place proper and adequate internal control systems commensurate with the nature of its business, and size and complexity of its operations. Internal Auditors findings are discussed with the process owners and suitable corrective actions taken as per the directions of Audit Committee on an ongoing basis to improve efficiency in operations. During the year, the Company continued to implement their suggestions and recommendations to improve the control environment. Their scope of work includes review of processes for safeguarding the assets of the Company, review of operational efficiency, effectiveness of systems and processes, and assessing the internal control strengths in all areas.

33. Extract of Annual Return

As required pursuant to section 92(3) of the Companies Act, 2013 and rule 12(1) of the Companies (Management and Administration) Rules, 2014, an extract of annual return in MGT-9 as a part of this Annual Report as Annexure-I.

34. Secretarial Audit Report

Pursuant to Section 204 of the Companies Act, 2013, the Company had appointed, Ms. Shruti Shah, Practicing Company Secretary as its Secretarial Auditor to conduct the Secretarial Audit of the Company for the F.Y 2016-17. The Company provides all the assistance and facilities to the Secretarial Auditor for conducting their audit. Report of Secretarial Auditors for the F.Y 2016-17 in Form MR-3 is annexed to this report as Annexure-II.

35. Particulars of Loans, Guarantees or Investments

Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements.

36. Particulars of contracts or arrangements with related parties

The particulars of every contract or arrangements entered into by the Company with related parties referred to in sub-section (1) of Section 188 of the Companies Act, 2013 including certain arms length transactions under third proviso thereto have been disclosed in Form No. AOC-2 as Annexure-III.

37. Obligation of company under the sexual harassment of women at workplace (prevention, prohibition and redressal) act, 2013

In order to prevent sexual harassment of women at work place, a new act The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 has been notified. Your Company has adopted a policy for prevention of Sexual Harassment of Women at workplace and has set up Committee for implementation of said policy. During the year Company has not received any complaint of harassment.

38. Conservation of Energy, Technology Absorption, Research & Development and Foreign Exchange Earnings and Outgo

Information pursuant to Section 134(3)(m) of the Companies Act 2013 read with Rule 8(3) the Companies (Accounts) Rules, 2014 forming part of Directors Report for the year ended 31st March, 2017 is as under:

Conservation of Energy: The Companys operations involve low energy consumption. However efforts to conserve and optimize the use of energy through improved operational methods and other means will continue.

Technology Absorption: The Technology available and utilized is continuously being upgraded to improve overall performance and productivity.

Research & Development: Your Company believes that research & development is a continuous process for sustained corporate excellence. Our research & development activities help us in product and service improvement, effective time management and are focused to provide unique benefits to our customers. Such methods do not involve any specific cost burden to the Company.

Foreign Exchange Earnings : Rs. Nil (previous year Nil)
Foreign Exchange Outgo : Rs. Nil (previous year 0.03)

39. Acknowledgements

Your Directors thank the Companys Investors, Clients, Vendors, Bankers, Business and various governmental as well as regulatory agencies for their continued support and confidence in the management.

Your Directors wish to place on record their deep sense of appreciation of the dedicated and sincere services rendered by employees at all levels during the year. Your Companys consistent growth was made possible by their hard work, solidarity, cooperation and support.

For and on behalf of the Board of Directors
Chandrashekhar Ganesan Harish Shetty
Date: September 01, 2017 Director Director
Place: Thane Din no.: 07144708 Din no.: 07144684