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Zicom Electronic Security Systems Ltd.

BSE: 531404 Sector: Engineering
NSE: ZICOM ISIN Code: INE871B01014
BSE 15:41 | 27 Mar 2018 Zicom Electronic Security Systems Ltd
NSE 05:30 | 01 Jan 1970 Zicom Electronic Security Systems Ltd
OPEN 15.95
PREVIOUS CLOSE 15.45
VOLUME 35574
52-Week high 41.95
52-Week low 15.80
P/E
Mkt Cap.(Rs cr) 65
Buy Price 0.00
Buy Qty 0.00
Sell Price 15.85
Sell Qty 120.00
OPEN 15.95
CLOSE 15.45
VOLUME 35574
52-Week high 41.95
52-Week low 15.80
P/E
Mkt Cap.(Rs cr) 65
Buy Price 0.00
Buy Qty 0.00
Sell Price 15.85
Sell Qty 120.00

Zicom Electronic Security Systems Ltd. (ZICOM) - Director Report

Company director report

To the Members

Your Directors presents their Twenty First Annual Report together with the AuditedAccounts of the Company for the Financial Year ended March 31 2015.

FINANCIAL HIGHLIGHTS:

(Amount in Rs)
Particulars March 31 2015 Consolidated March 31 2014 Consolidated March 31 2015 Standalone March 31 2014 Standalone
Net Sales / Income from Operations 11081171351 9260956985 3835240358 3230634433
Other Income 47357288 25318584 70082893 64447673
Total Income 11128528639 9286275569 3905323251 3295082106
Total Expenditure 9681708594 8176579557 3516906986 2969676670
Gross Profit before Interest and Depreciation 1446820045 1109696012 388416265 325405436
Interest and Finance Charges 538681427 349350690 147546760 97265130
Gross Profit before Depreciation and Taxation 908138618 760345322 240869505 228140306
Depreciation 307690027 249284173 67377781 77463807
Profit Before Tax Exceptional & 600448591 511061149 173491724 150676499
Extraordinary Items
Exceptional Item -- 45954516 -- 51776297
Extraordinary Items -- -- -- --
Profit Before Tax 600448591 465106633 173491724 98900202
Provision for Taxation:
Current year 81563000 28967000 74990000 27140000
Deferred -16293617 -10084269 -14517786 -9769253
Taxation of earlier years -- -- -- --
Net Profit After Taxation 535179208 446223902 113019510 81529455
Less: Minority Interest 29326311 26798053 -- --
Profit for the year 505852897 419425849 113019510 81529455
Add: Balance brought forward from previous year 1439640634 1256852427 551854924 497372088
Add: Transfer of Economic Interest -- 202318612 -- --
Profit available for Appropriation 1945493531 1878596888 664874434 81529455
APPROPRIATIONS:
Transfer to General Reserve 43859899 2500000 2500000 2500000
Provision for Dividend 24239795 24529430 24239795 21119795
Provision for Tax on Dividend 4934641 3426824 4934641 3426824
Buy Back of Economic Interest -- 408500000 -- --
Adjustment Relating to Fixed Asset 4502111 -- 4502111 --
Balance of Profit carried forward to Balance Sheet 1867957085 1439640634 628697887 551854924

OPERATIONAL PERFORMANCE

At the outset your Directors are pleased to report that the year ended March 31 2015has been a milestone in the Company’s history with it crossing Rs 1100 croresturnover mark on consolidated basis. This coinciding with the Company completing itssuccessful 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 endthe 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 11128528639(previous year Rs 9286275569) and the Profit Before Exceptional Items and Tax was Rs600448591 (previous year Rs 511061149). After adjusting for Exceptional Item Rs Nil(previous year Rs 45954516) and Tax Rs 65269383 (previous year Rs 18882731) NetProfit After Tax was at Rs 535179208 (previous year Rs 446223902). After accountingfor Minority Interest there from the Net Profit After Tax and Minority Interest at Rs505852897 is higher by 21% as compared to Rs 419425849 of previous year.

The Consolidated Financial Statements (CFS) includes the financial statements of ZicomElectronic Security Systems Limited ("the Company") and its subsidiarycompanies namely

a) Zicom SaaS Private Limited ("Zicom SaaS");

b) Unisafe Fire Protection Specialists Singapore Pte. Ltd. ("UnisafeSingapore") 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 ("UnisafeIndia"); and

d) Zicom Security Projects Pte. Ltd. Singapore ("Zicom Singapore")

On standalone basis the Total Income for the year 2014-15 was

Rs 3905323251 (previous year Rs 3295082106). The Other Income also includeddividend from subsidiaries received during the year under review amounting to Rs Nil(previous year Rs 6592000). The Profit Before Exceptional Item and Tax was Rs173491724 (previous year Rs 150676499). After adjusting for Exceptional Item Rs Nil(previous year Rs 51776297) and Tax Rs 60472214 (previous year Rs 17370747) NetProfit After Tax at Rs 113019510 is higher by 39% as compared to Rs 81529455 ofprevious year.

Further as can be seen from the Consolidated Financial Results given above EarningsBefore Depreciation Interest and Tax (EBIDTA) at Rs 1446820045 (previous year Rs1063741496) shows a jump of 36% over previous year resulting into increased EBIDTAmargin from 12% to 13%.

BUSINESS DEVELOPMENTS AND PROSPECTS

A close look at the consolidated performance of the Company for the year under reviewreveals that the performance of the fire security business of the Company in Middle Easthas continued to be encouraging despite slump in global crude prices. This business isbeing conducted under the two flagship subsidiaries Unisafe Dubai and Phoenix Qatarwhich have successfully achieved all the set targets in terms of financial performance andcustomer satisfaction. In view of the fact that growth rate of about 20% has been achievedby these businesses despite slowdown; the performance can be rated on higher scale.Another highlight of good performance is performance reported by Zicom SaaS which shown93% growth in topline and 130% growth in bottomline. This has been possible due tocontinued flow of orders from Banks for ATM Surveillance and from Housing Societies inMumbai and Pune under Make Your City Safe (MYCS) Programme. However the contribution ofZicom SaaS to the consolidated topline and bottomline is insignificant as compared to thatof fire security business as SaaS business is at take off stage.

As can be seen from the consolidated financial results given above the Fire Detectionand Protection business of Middle East has continued to be main contributor withconsistently improved performance which accounts for more than 50% of topline has been adriving force behind it. Economies of these countries highly depend on oil and gas. Withcrude prices ruling around half the level of its peak price reached couple of year backthe economies of these countries could have witnessed recession. However huge spending byGovernments of these countries in infrastructure tourism hospitality and relatedfacilities in view of planned commercial and sports events like Dubai World Expo 2020 andQatar FIFA World Cup 2022 has helped sustaining economic growth there. Both Unisafe Dubaiand 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 economicrecovery. With planned heavy spending on infrastructure smart cities and commercial andindustrial developments outlook for our electronic security business particularly ProjectSolutions Business under Zicom standalone and Enterprise and MYCS Businesses under ZicomSaaS has been promising. This coupled with various steps being taken by the Company in theform of innovative products and services helped by government policies and law enforcingagencies has strong potential to show better performance in the current year.

In Unisafe India your Company’s focus continued to work as Global Design Centreby catering to the design engineering and estimate needs of all our projects in GulfRegion.

Our two wholly-owned subsidiaries in Singapore viz. Unisafe Fire ProtectionSpecialists 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 Directorshave 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 20199829 Equity Shares (17599829 Equity Shares) of theCompany for the financial year 2014-15. This dividend will entail a total outgo of Rs29174436 (Rs 24546619) which shows increase of 19%. The dividend outgo is higher onaccount 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 ason September 21 2015 and in respect of shares held in dematerialized form it will bepaid to Members whose names are furnished by National Securities Depository Limited andCentral Depository Services (India) Limited as beneficial owners as on that date.

During the year in February 2015 1050000 Warrants were issued and allotted toPromoter Group Companies on preferential basis. These Warrants entitle their holders toacquire equal number of equity shares on the terms and conditions of their issue. Ifentire of these Warrants or part of them are converted into equal number of Equity Sharesit 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 orbefore the record date fixed for deciding entitlement for the said dividend i.e. September21 2015.

FINANCE

During the year the Company raised total Rs 458000000 by preferential issue inaccordance with SEBI’s Guidelines for Preferential Issue i.e. Chapter VII of SEBIICDR Regulations. Under the said preferential issue allotment of 2600000 Equity Sharesof Rs 10 each for cash at a price of Rs 160 per share aggregating to Rs 416000000 wasmade on February 18 2015 to non-promoter individuals / entity.

Further 1050000 Warrants each Warrant carrying an entitlement to subscribe to oneEquity Share of Rs 10 each of the Company were issued to Promoter Group Companies inaccordance with SEBI’s Guidelines for Preferential Issue. The holders of the saidWarrants have right to acquire one Equity Share of the Company at a price of Rs 160 pershare which assuming full conversion of Warrants into Equity Shares amounts to Rs168000000. The exercise of option to acquire Equity Shares against the said Warrants hasto be within eighteen months from the date of allotment of the Warrants. The Companyreceived total Rs 42000000 towards Warrant Application Money in accordance withSEBI’s Guidelines for Preferential Issue.

As a result of the above the Company’s Paid-up Share Capital increased to20199829 Equity Shares of Rs 10 each aggregating to Rs 201998290. Also it’sSecurities Premium increased by Rs 390000000. Assuming full conversion and allotment ofEquity Shares for the 1050000 Warrants outstanding post allotment Paid-up Share Capitalis expected to be Rs 212498290 comprising of 21249829 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 ownedsubsidiary);

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 for2014-15 as per the Companies Act 2013 is provided in Annexure A hereto in prescribed FormAOC-1. In respect of foreign subsidiary companies figures in rupees are converted fromapplicable foreign currency at appropriate exchange rate as on year end date. The Policyon Material Subsidiary as approved may be accessed on the Company’s website at thelink: 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 resultinginto evolving consumer needs it was decided to set-up the business of offering Security asa Service (SaaS) under a separate wholly owned subsidiary namely Zicom SaaS PrivateLimited. This subsidiary offers wide range of managed electronic security services(e-SaaS). The two focus areas for Zicom SaaS are Enterprise and Housing and Residentialsegment.

Under Enterprise Division main contributors are Banks Financial Services andInsurance (BFSI companies) which contribute major chunk of the revenue and the balancecomes from Retail and Education. With the use of latest technology platform businessenterprises are offered various customized services under e-SaaS model like Managed AlertService Time & Attendance Service Remote Fire & Intruder Alarm MonitoringService with use of cloud technology and internet this business has found speedyacceptance. We have set-up focus on pure monitoring services revenue for the current yearwhich with support of legislative provisions and government and law enforcing authoritiesmaking CCTV and video surveillance mandatory has provided good potential for growth.Similar are the reason for our optimism about performance in MYCS covering housing andresidential segment.

Zicom SaaS has posted Total Income of Rs 335496922 (previous year Rs 173833923) andNet Profit of Rs 13293907 (previous year Rs 6077070) for the financial year endedMarch 31 2015.

Unisafe Fire Protection Specialists LLC Dubai

Unisafe Dubai is the leading fire protection company in Dubai UAE having itspresence in seven emirates Qatar and Oman has been consistently surpassing its earlierachievements in terms of topline and bottomline and customer satisfaction. It has gottrack record of exceptional performance year after year based on the patronization fromthe unstinted confidence and support of its customers.

Unisafe Dubai caters to large spectrum of clientele from Government to corporaterefineries shopping malls and multi storey buildings among others offering comprehensiverange of solutions for all fire protection needs starting from the basic hydrant andsprinkler systems to advance analogue addressable fire alarm systems specialized gaseousfire suppression systems dry and wet chemical extinguishing systems and water mist fireextinguishing systems. In the area of project execution and servicing in fire detectionand protection in infrastructure projects Unisafe Dubai has been recognized as one of thetop brands for almost two decades.

With corporate restructuring Unisafe Dubai has become a step-down subsidiary of yourCompany in which Unisafe Singapore our wholly owned subsidiary hold 41% stake andbalance 8% stake is directly held by us. With this total stake of Zicom Group in UnisafeDubai is 49% with entitlement in the economic interest being 95%.

Unisafe Dubai has posted Total Income of Rs 5350126293 (as compared to Rs4472112012 in the previous year) and a Net Profit of Rs 445286900 (as compared to Rs398665132 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 successfullyestablished 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 marketsafety and security equipments of leading international supplier. Its offerings includesvaried turnkey solutions for fire protection suppression projects like designengineering integrating testing and commissioning of Fire Safety Security and BuildingManagement Systems. Phoenix Qatar has to its credit large spectrum of clientele fromGovernment to corporate refineries shopping malls multi storey buildings hotels andresorts etc. some of which being very prestigious projects in Qatar. Further it is oneof the few to possess a license to operate in petrochemical sector.

Post corporate restructuring of Zicom Group last year Phoenix Qatar had become astep-down subsidiary of your Company with 49% stake; of which 44% held by UnisafeSingapore and balance 5% held by your Company. Zicom Group’s entitlement in economicinterest in Phoenix Qatar is 95%.

During the year under review Phoenix Qatar posted Total Income of Rs 1391230255 (ascompared to Rs 1222147344 in the previous year) and a Net Profit of Rs 141239321 (ascompared to Rs 137295919 in the previous year) for the financial year ended March 312015.

Unisafe Fire Protection Specialists India Private

Limited

Working results of Unisafe India for the financial year ended March 31 2015 showsTotal Income of Rs 169334357 (previous year Rs 155631085) and a Net Loss of Rs7238748 (previous year Net Loss Rs 1471989).

Originally set-up as a wholly owned subsidiary with a view to gain benefit out of theexpertise 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 engineeringrequirements of fire protection business in Gulf region by acting as a Global DesignCentre and also act as trader in fire safety and security equipments.

Unisafe Fire Protection Specialists Singapore Pte. Ltd. Singapore and Zicom SecurityProjects Pte. Ltd. Singapore

Unisafe Fire Protection Specialists Singapore Pte. Ltd. (Unisafe Singapore) and ZicomSecurity Projects Pte. Ltd. (Zicom Singapore) were set-up as two wholly-owned subsidiariesin Singapore as a part of global corporate restructuring of Zicom Group with a view tointernationally align and consolidate present and future investments of the Group. TheGroup overseas investment in fire business falls under the umbrella of Unisafe Singaporeacting as a holding company for all such ventures whereas Zicom Singapore aimed as aholding company for Group investment in international electronic security business.However plans are on hold in view of not so good experience of CiaoZicom Security SystemsSA Brazil.

CONSOLIDATED FINANCIAL STATEMENTS

As per Section 134 of the Companies Act 2013 your Company has provided the auditedConsolidated Financial Statements for the year ended on March 31 2015; together withAuditors’ Report thereon forming part of this Annual Report which includes financialinformation of all the subsidiaries. These documents will also be available for inspectionduring the business hours at the Registered Office of your Company and the respectivesubsidiary companies. Pursuant to the provisions of the Section 129(3) of the CompaniesAct 2013 read with Rule 5 of the Companies (Accounts) Rules 2014 a statement containingsalient 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 auditedannual accounts and related information of subsidiary companies on its website and samewill 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 ofAssociation of the Company Mr. V. Raman Kumar (DIN: 00245022) is the Director liable toretire by rotation at the ensuing Annual General Meeting and has offered himself forre-appointment.

On March 26 2015 Ms. Kunjan Trivedi (DIN: 07131011) was appointed as an AdditionalDirector under Section 161 of the Companies Act 2013 to hold office till the date of theensuing Annual General Meeting. Further the Board of Directors at its said meeting alsoappointed 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 March26 2015 till March 25 2016. The terms of her appointment as Whole-time Director andCompany Secretary including the terms of remuneration shall continue to be governed by theterms of her appointment as Company Secretary subject however to applicable provisions ofCompanies Act 2013 read with Schedule V thereto and subject to approval of Members.Accordingly resolutions seeking approval of Members have been proposed at the ensuingAnnual General Meeting for her appointment as a Director liable to retire by rotation andalso 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 ofMs. 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 Act2013 in writing from Member proposing the candidature of Ms. Kunjan Trivedi for theoffice of Director liable to retire by rotation.

The brief profiles of Mr. V. Raman Kumar and Ms. Kunjan Trivedi are given in Notice ofthe 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) wasappointed as an Additional Director on Board on June 27 2014 and he held office upto theconclusion of Annual General Meeting (AGM) held on September 5 2014. He was appointed asan Independent Director at the AGM held on September 5 2014.

Further at the said AGM the Members also approved the appointments of Mr. ManoharBidaye (DIN: 00010699) as a Non-Executive Non-Independent Director liable to retire byrotation 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 theymeet with the criteria of independence as prescribed under provisions of the CompaniesAct 2013 Rules thereunder and Clause 49 of the Listing Agreement.

Mr. Pramoud Rao Managing Director of the Company whose remuneration package includescommission is appointed as the Managing Director of Zicom SaaS Private Limited a whollyowned subsidiary of the Company w.e.f. March 30 2015 and is entitled for remunerationfrom the said subsidiary as per terms of his remuneration approved. However for the yearunder 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 KeyManagerial Personnel pursuant to the provisions of Sections 2(51) and 203 of the CompaniesAct 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 theListing Agreement the Board evaluation process was carried out. The Board / Nominationand Remuneration Committee of Directors have laid down the criteria for evaluation of theperformance of the Board its Committees and individual Directors. Accordingly astructured questionnaire containing criteria’s such as Board composition andstructure effectiveness of Board processes information and functioning etc. wascirculated to Directors for the purpose of evaluation.

The Board and Nomination and Remuneration Committee of Directors reviewed theperformance of the individual Directors on the basis of set criteria’s.

The Independent Directors at its separate meeting carried out performance evaluationof Board as a whole its Committees Chairman of the Company and Non-IndependentDirectors. The same was discussed in the Board meeting that followed the meeting ofIndependent Directors at which performance of the Board its Committees and individualDirectors was also discussed.

NOMINATION AND REMUNERATION POLICY

The Board of Directors has framed a Policy which lays down the framework in relation toremuneration to Directors Key Managerial Personnel and Senior Management of the Company.This Policy also lays down criteria for selection and appointment of Board Members. ThePolicy is provided in Annexure B to this Report.

AUDITORS AND THEIR REPORT

The Statutory Auditors of the Company M/s. Shyam Malpani & Associates CharteredAccountants Mumbai holds their office until the conclusion of the ensuing Annual GeneralMeeting and are eligible for re-appointment.

As required under the provisions of Section 139 and Section 141 of the Companies Act2013 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 effectthat their re-appointment if made would be in conformity with the criteria specified inthe said sections. The Auditors’ Report does not contain any qualificationreservation or adverse remark. Further with regard to emphasis of matter as per clause IVin the Auditors’ Report your Directors wish to state that the said emphasis ofmatter read with Note No. 25.8 of Standalone Financial Statements is self-explanatory anddoes not require any further explanation. Your Directors would like to add that the saidmatter 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 Rulesthereunder the Company has appointed Ganesh Narayan & Co Company Secretaries inPractice (CP No. 2238) to conduct Secretarial Audit of the Company for the financial year2014-15. The Secretarial Audit Report for the financial year ended March 31 2015 isannexed herewith as Annexure C to this Report. The Secretarial Audit Report does notcontain any qualification reservation or adverse remark.

DIRECTORS’ RESPONSIBILITY STATEMENT

Pursuant to Section 134 of the Companies Act 2013 based on the representationsreceived from the operating management your Directors hereby state that

a) in preparation of the annual accounts for the year ended March 31 2015 theapplicable accounting standards read with requirements set out under Schedule III to theAct have been followed and there are no material departures from the same;

b) the Directors have selected such accounting policies and applied them consistentlyand made judgements and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company as at March 31 2015 and of the profit ofthe Company for the year ended on that date;

c) the Directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding theassets 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 theCompany and that such internal financial controls are adequate and are operatingeffectively; and

f) the Directors have devised proper systems to ensure compliance with the provisionsof 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. Forfurther details please refer Section II (F) - Other provisions related to Board andCommittees 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 2013and Listing Agreement are given under Section III in the Corporate Governance Reportforming 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 providedare given in the standalone financial statements. Further following are the purposes forwhich 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 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 for the year March 31 2015 were onarm’s length basis and in the ordinary course of business and that the provisions ofSection 188 of the Companies Act 2013 are not attracted. Hence the particulars to bedisclosed in this regards in Form AOC-2 is Nil. Further during the year under reviewthere were no material related party transactions.

The Audit Committee and the Board of Directors have approved the Related PartyTransaction Policy which has been prepared in consonance with provisions of Clause 49 ofthe Listing Agreement and Companies Act 2013. The same has been uploaded on theCompany’s website at the link: http :// beta.zicom.com/img/p df/ZESSL -Related PartyTransaction Policy pdf

All Related Party Transactions are being placed before the Audit Committee forapproval. Omnibus approvals are also obtained for transactions which are of repetitivenature. 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 ListingAgreement the Company has formulated Whistle Blower Policy for vigil mechanism forDirectors and employees to report to the management about the unethical behavior fraud orviolation of Company’s Code of Conduct. The mechanism provides for adequatesafeguards against victimization of employees and Directors who use such mechanism andmakes provision for direct access to the Chairperson of the Audit Committee in exceptionalcases. The said Policy as approved may be accessed on the Company’s website at thelink: 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 financialposition of the Company between the end of the financial year of the Company as on March31 2015 and the date of this Report.

RISK MANAGEMENT

The Company already has in place the system to inform the Board about the riskassessment and minimization procedure. The risk management system identifies and assessesvarious risks associated with the Company and its business and finds out and suggestsmeasures to mitigate them. This also includes mechanisms for their proper and timelymonitoring and reporting. In this regard the Company has framed policy to identify andevaluate business risks and to mitigate them. The Policy defines the risk managementapproach at various levels including documentation and reporting. The Policy helps inidentifying risks trend exposure and potential impact analysis at a Company level as alsoseparately for each business division of the Company. The risk management system isperiodically evaluated by the Audit Committee / Board in the light of changing businessscenario. Accordingly new risks are identified and modified mechanism and procedure forrisk assessment and minimization are adopted to ensure that executive management controlsrisk by means of properly defined framework. Progress in this regard is periodicallyreported to Audit Committee / Board for their review and corrective actions required ifany. This is a continuous process which enables the Company to keep its risk managementsystem updated and robust in view of fast changing economic and business scenarioaffecting the Company.

EXTRACT OF ANNUAL RETURN

The details forming part of the Extract of Annual Return of the Company in Form MGT-9as required under Section 92 of the Companies Act 2013 is appended herewith as AnnexureD to this Report.

CORPORATE GOVERNANCE

In pursuance of Clause 49 of the Listing Agreement with the Stock Exchanges a separatesection on Corporate Governance together with a certificate from your Company’sAuditors confirming compliance of the conditions of Corporate Governance as stipulatedunder 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 Rule8(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 installingof electronic security systems gadgets and equipments and monitoring them. As such theydo not involve much use of energy. However your Company makes every possible effort toconserve 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 andcustomers about modes and means of energy saving through utilization of energy savingsystems devices and equipments; and inculcating a habit in them to strive forconservation and saving of energy. The above has helped the Company in keeping its energycost 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 possibilityof using alternate source of energy as a measure of conservation of energy in itsoperations are minimal. However your Company has initiated certain steps in thisdirection like attempts are being made to make available affordable CCTV SurveillanceSystems using solar power charged batteries particularly in remote areas where there arefrequent 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 duringthe year by your Company.

B. Technology Absorption

As your Company has not imported any technology the required information to beprovided in this regard is Nil. Your Company is continuously working on improving itsindigenous products and software. Your Company continuously strives to provide electronicsecurity systems gadgets and equipments based on latest technology. Further the detailsof expenditure incurred on the research and development are Nil.

C. Foreign Exchange Earnings and Outgo

Your Company has earned Rs 59750165 (previous year Rs 52705456) in foreign currencyand has spent Rs 2282961 (previous year Rs 1712877) in foreign exchange during theyear under review. The details of the same are available at Note No. 25.17 being Notesforming part of the Financial Statements.

LOANS AND ADVANCES

The details of loans and advances which are required to be disclosed in the FinancialStatements of the Company pursuant to Clause 32 of the Listing Agreement with the StockExchanges 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 readwith 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 thisReport.

In terms of the provisions of Section 197(12) of the Companies Act 2013 read withRules 5(2) and 5(3) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 during the year under review there was no employee under theemployment of your Company who was in receipt of remuneration of Rs 6000000 or more perannum if employed for the entire year or a remuneration of Rs 500000 or more per monthif employed during any part of the said year. Hence the information required to befurnished in this regard is Nil.

At present the Company does not have any Employee Stock Option Plan / Scheme nor doesit 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 ofyour Company. The HR philosophy is developed around the fundamental of creating valuethrough our most valued resource "Zi-Champ" to drive profitable growth and makeZicom a preferred work place. HR has developed & maintained friendly and professionalwork culture woven into the fabric of the Company’s environment with strong businessethics.

HR has time and again used innovation in hiring talent in Zicom. With usage of high endassessment tools and latest hiring channels like social media and online hiring sites HRhas hired the best talent from the industry at competent pay package and benefits. HR hascreated benchmark in the Fire and Security Industry by hiring the Engineers through PoolCampus Recruitment from Tier III cities and providing them opportunities in theinternational market with in-depth training.

To fulfill the Company’s Vision of value creation number of developmentalinitiatives have been undertaken which includes Executive Coaching for LeadershipDevelopment. Zi-Champs have been trained on behavioral and technical skills throughongoing structure programs which helps them to serve the customer well.

During the year under review HR had come up with Employee connect programs whereZi-Champs were cross functionally bonded with each other and took up fun activities as ateam. The most appreciated initiative was Business Induction where new joinees undergoin-depth training on understanding the Business model Product and Services. Our team of"Zi-Champs" was the winner of "Corporate Jung" for second consecutiveyear 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 SocialResponsibility Committee in compliance with the requirements of Section 135 of theCompanies Act 2013 and the Companies (Corporate Social Responsibility Policy) Rules 2014.The said Committee has formulated and recommended to the Board a Corporate SocialResponsibility Policy (CSR Policy). Based on recommendation of CSR Committee the Board hasapproved undertaking of CSR activities by the Company as enshrined in the Company’sCSR Policy. A brief outline of the said Policy including overview of the Project / Programbeing 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 identifieda project of construction of a High School building in rural area of Sindhudurg Districtin Maharashtra with an outlay of Rs 1.80 crores. This Project aims at assisting a HighSchool which has been in existence since 1964 with a building structure in dilapidatedstate and in dire need to be reconstructed. The School is being run by a Trust on behalfof five surrounding villages and caters to more than 400 students in 9 divisions fromClass V to Class X majority of them belongs to below poverty line segment and families offarmers and ex-servicemen. With the help of the Company the new building structure hasbeen completed and the interior works like classrooms laboratory other infrastructuresuch as lighting sanitation furniture sports equipments etc. are being provided. TheProject is expected to be completed by December 2016. During the year the Company spent atotal sum of Rs 1700000 towards contributing to the Project. As the Project for theSchool is multi-year Project running over a period of more than three years the amounthas to be spent based on completion schedule of construction of School building andsubsequent ordering of materials for interiors furniture electrical fittings laboratoryand other equipments etc.

Besides school education it is also planned to provide the students with vocationalcourses which will facilitate their employment after passing Class X. Despite alladversities the School has been able to maintain its reputation by consistent goodperformance which is evident by the fact that the last ten year’s average successrate 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 managementsystem. Internal Audit System monitors the adequacy and effectiveness of the internalcontrol under the supervision and guidance of the Audit Committee. It is supported by theenterprise 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 ofbooks 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 policiesand procedures

• Audit on concurrent basis carried out by an internal auditor covering allstatutes 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 thefollowing 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 underany scheme.

4. No significant or material orders were passed by the Regulators or Courts orTribunals that would impact the going concern status of the Company and its futureoperations.

5. The Company has in place policy as per the provisions of the Sexual Harassment ofWomen at Workplace (Prevention Prohibition and Redressal) Act 2013. During the year nocase was reported to the Committee constituted under the said Act.

ACKNOWLEDGMENTS

Your Directors wish to place on record their sincere appreciation and thanks for thevaluable co-operation and support received from the employees of your Company at alllevels Company’s Bankers lenders suppliers Government authorities businesspartners and Members of the Company; and look forward for the same to even greater extentin 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.

Annexure ‘A’ to Directors’ Report

Statement containing salient features of the financial statement of subsidiaries as perCompanies Act 2013:

PART A : SUBSIDIARIES

(Amount in Rs)

Sr. No. Name of the Subsidiary Reporting Currency Exchange Rate on the last day of the financial year Share Capital Reserves & Surplus Total Assets Total Liabilities Investments Turnover Profit Before Taxation Provision for Taxation Profit After Taxation Proposed Dividend % of Share- holding
1. Unisafe Fire Protection Specialists LLC Dubai AED 16.95 519093750 1777398967 6255475860 6255475860 25764000 5443255742 454061092 - 454061092 62291250 8.00
2. Phoenix International WLL Qatar QAR 17.10 17100000 432472030 1117871015 1117871015 - 1414389855 143754604 - 143754604 85500000 5.00
3. Zicom SaaS Private Limited INR 1.00 200000000 59114607 1004474038 1004474038 - 335240088 20111202 6817295 13293907 - 100.00
4. Unisafe Fire Protection Specialists India Private Limited INR 1.00 50000000 -14918100 88675809 88675809 - 169334357 -9258874 -2020126 -7238748 - 100.00
5. Unisafe Fire Protection Specialists Singapore Pte. Ltd. Singapore USD 62.27 249 -40532726 1493064292 1493064292 1052915833 - 38481739 - 38481739 - 100.00
6. Zicom Security Projects Pte. Ltd. Singapore USD 62.27 62 -8488397 635611062 635611062 - - 1920718 - 1920718 - 100.00

Note:

Names of subsidiaries which are yet to commence operations - NIL

Names of subsidiaries which have been liquidated or sold during the year - NIL

Annexure ‘B’ to Directors’ Report

NOMINATION AND REMUNERATION POLICY ZICOM ELECTRONIC SECURITY SYSTEMS LIMITED

A. INTRODUCTION:

The Company has always considered human resources as its invaluable assets andconsistently works towards harmonizing the aspirations of its employees with that of thegoals of the Company.

Pursuant to Section 178 of the Companies Act 2013 and Clause 49 of the ListingAgreement the Board of Directors of every listed Company shall constitute the Nominationand Remuneration Committee. The Company had already constituted Remuneration Committeecomprising of Non-Executive Independent Directors as required under Listing Agreement. Inorder to align it with the provisions of the Companies Act 2013 and the amended ListingAgreement the Board of Directors on 27 May 2014 changed the nomenclature of the"Remuneration Committee" as "Nomination and Remuneration Committee".

The Nomination and Remuneration Policy ("the Policy") as per the requirementsof Section 178 of the Companies Act 2013 & Clause 49 of the Listing Agreement hasbeen formulated with the object of enhancing competencies of the Board and attracting aswell as retaining talented employees for role of Key Management Personnel / SeniorManagement.

Scope of the Policy / Applicability:

The Committee has adopted the following criteria for selection of candidates eligibleto be appointed in the Senior Management and other employees of the Company and alsoMember on the Board of Directors and the Executive Directors of the Company.

B. OBJECTIVES:

1. To formulate criteria for appointing Directors Key Managerial Personnel and SeniorManagement in accordance with the provisions prescribed under the Companies Act 2013Rules made thereunder and Listing Agreement.

2. To guide the Board in relation to the appointment and removal of Directors KeyManagerial Personnel and Senior Management.

3. To recommend to the Board on remuneration payable to the Directors Key ManagerialPersonnel and Senior Management.

4. To retain motivate and promote talent and to ensure long term sustainability oftalented managerial persons and create competitive advantage.

C. DEFINITIONS:

1. "Act" means the Companies Act 2013 and Rules framed thereunder asamended from time to time.

2. "Board" means Board of Directors of the Company.

3. "Committee" means Nomination and Remuneration Committee.

4. "Company" means Zicom Electronic Security Systems Limited.

5. "Directors" mean Members of the Board of Directors of the Company.

6. "Independent Director" means a director referred to in Section149(6) of the Companies Act 2013.

7. "Key Managerial Personnel" means

a) Chief Executive Officer or the Managing Director or the Manager;

b) Wholetime Director; -

c) Chief Financial Officer;

d) Company Secretary; and

e) Such other Officer as may be prescribed.

8. "Senior Management" means personnel of the Company who are membersof its core management team excluding the Board of Directors comprising all members ofmanagement one level below the Executive Directors including the functional heads.

D. INTERPRETATION OF POLICY:

In this Policy words importing the masculine shall include feminine and wordsimporting singular shall include the plural or vice versa. Any other term referred in thisPolicy shall have the same meaning assigned to them in the Companies Act 2013 Rules madethereunder Listing Agreement and SEBI Regulations as amended from time to time.

Effective Date: This Policy shall become effective from the date of adoption by theBoard.

E. ROLE OF COMMITTEE:

The Committee shall:

1. Formulate criteria for determining qualifications positive attributes andindependence of a Director.

2. Formulate criteria for evaluation of Independent Directors and the Board.

3. Carry out evaluation of every Director’s performance.

4. Identify persons who are qualified to become Directors and who may be appointed inSenior Management in accordance with the criteria laid down in this Policy.

5. Recommend to the Board the appointment and removal of Directors and SeniorManagement.

6. Devise a policy on Board diversity.

7. Recommend to the Board policy relating to remuneration for Directors Key ManagerialPersonnel Senior Management and other employees.

8. To perform such other functions as may be necessary or appropriate for theperformance of its duties.

Nomination and Remuneration Committee shall ensure the following while formulating thePolicy:

(a) the level and composition of remuneration is reasonable and sufficient to attractretain and motivate Directors of the quality required to run the Company successfully;

(b) relationship of remuneration to performance is clear and meets appropriateperformance benchmarks; and

(c) remuneration to Directors Key Managerial Personnel and Senior Management involvesa balance between fixed and incentive pay reflecting short and long-term performanceobjectives appropriate to the working of the Company and its goals.

F. MEMBERSHIP:

1. The Committee shall comprise minimum of three Non-Executive Directors of which atleast half shall be Independent Directors.

2. Minimum two members shall constitute a quorum for the Committee meeting.

3. Term of the Committee shall be continued unless terminated by the Board ofDirectors.

4. Membership of the Committee shall be disclosed in the Annual Report.

G. CHAIRMAN:

1. Chairman of the Committee shall be an Independent Director.

2. Chairman of the Company may be appointed as a member of the Committee but shall notChair the Committee.

3. In the absence of the Chairman the members of the Committee present at the meetingshall choose one amongst them to act as Chairman.

4. Chairman of the Nomination and Remuneration Committee could be present at the AnnualGeneral Meeting or may nominate some other member to answer the shareholders’queries.

H. COMMITTEE MEMBER’S INTERESTS:

1. A member of the Committee is not entitled to be present when his own remuneration isdiscussed at a meeting or when his performance is being evaluated.

2. The Committee may invite such executives as it considers appropriate to be presentat the meetings of the Committee.

I. SECRETARY:

The Company Secretary shall act as Secretary of the Committee.

J. VOTING:

1. Matters arising for determination at Committee meetings shall be decided by amajority of votes of Members present and voting and any such decision shall for allpurposes be deemed a decision of the Committee.

2. In the case of equality of votes the Chairman of the meeting will have a castingvote.

K. APPOINTMENT AND REMOVAL OF DIRECTOR KEY MANAGERIAL PERSONNEL AND SENIOR

MANAGEMENT:

1. Criteria for Appointment:

a) To identify and ascertain the integrity qualification expertise and experience ofthe person for appointment as Director Key Managerial Personnel or at Senior Managementlevel and recommend appointment to the Board.

b) To ensure that the candidate possess adequate qualification expertise and regionaland industry experience for the position he is considered for appointment. The Committeehas discretion to decide whether qualification expertise and experience possessed by aperson are sufficient / satisfactory for the concerned position.

c) To appoint such person as an Independent Director who fulfils all the criterion ofindependence as mentioned under Section 149(6) of the Companies Act 2013 and Clause 49 ofthe Listing Agreement.

d) To decide on not to appoint or discontinue the employment of any person as ManagingDirector / Whole-time Director / Manager who has attained the age of seventy years.Provided that the term of the person holding this position may be extended beyond the ageof seventy years with the approval of shareholders by passing a special resolution basedon the explanatory statement annexed to the notice for such motion indicating thejustification for extension of appointment beyond seventy years.

e) To consider the extent to which the candidate is likely to contribute to the overalleffectiveness of the Board work constructively with the existing Directors and enhancethe efficiencies of the Company.

f) To judge the skills and experience that the candidate brings to the role of KeyManagerial Personnel / Senior Management and how such candidate will enhance theproductivity and competency of the Company.

g) To consider the skills and experience that the candidate brings to the role ofDirector and how such candidate will enhance the skill sets and experience of the Board asa whole.

h) To consider the nature of existing positions held by the candidate includingdirectorships or other relationships and the impact they may have on the candidate’sability to exercise independent judgment.

Term:

a) Managing Director / Whole time Director:

The Company shall appoint or re-appoint any person as its Managing Director orExecutive Director for a term not exceeding five years at a time. No re-appointment shallbe made earlier than one year before the expiry of the term.

b) Independent Director:

An Independent Director shall hold office for a term upto five consecutive years on theBoard of the Company and will be eligible for re-appointment on passing of a specialresolution by the Company and disclosure of such appointment in the Board’s Report.

No Independent Director shall hold office for more than two consecutive terms but suchIndependent Director shall be eligible for appointment after expiry of three years ofceasing to become an Independent Director. Provided that an Independent Director shallnot during the said period of three years be appointed in or be associated with theCompany in any other capacity either directly or indirectly. However if a person who hasalready served as an Independent Director for five years or more in the Company as onOctober 1 2014 or such other date as may be determined by the Committee as per regulatoryrequirement; he shall be eligible for appointment for one more term of five years only.

At the time of appointment of Independent Director it should be ensured that number ofBoards on which such Independent Director serves is restricted to seven listed companiesas an Independent Director and three listed companies as an Independent Director in casesuch person is serving as a Whole-time Director of a listed company or such other numberas may be prescribed under the Act.

3. Evaluation:

The Committee shall evaluate the performance of every Director Key ManagerialPersonnel and Senior Management on yearly basis.

4. Removal:

The Committee may recommend to the Board with reasons recorded in writing removal ofa Director Key Managerial Personnel or Senior Management due to reasons for anydisqualification mentioned in the Companies Act 2013 Rules made thereunder or under anyother applicable Act rules and regulations or wherever the Committee deems so in the bestinterest of the Company.

5. Retirement:

The Director Key Managerial Personnel and Senior Management shall retire as per theapplicable provisions of the Companies Act 2013 and the prevailing policy of the Company.The Board will have the discretion to retain the Director Key Managerial PersonnelSenior Management in the same position / remuneration or otherwise even after attainingthe retirement age for the benefit of the Company subject to compliance with theprescribed requirements and procedure.

6. Notice of Termination and Severance Pay Policy:

a) For Managing Director the termination period from the Company will be of sixmonths. In addition thereto the Managing Director provided that termination has beenmade by the Company will be entitled to a maximum severance pay of six months salaryinclusive of the value of variable remuneration and other fixed entitled benefits.

b) For Key Managerial Personnel and Senior Management the termination period from theCompany will be as per the Company's policy.

L. REMUNERATION TO MANAGING DIRECTOR / KEY MANAGERIAL PERSONNEL / SENIOR

MANAGEMENT:

1. Fixed Salary:

Managing Director Key Managerial Personnel and Senior Management shall be eligible formonthly remuneration as may be approved by the Board on the recommendation of theCommittee in accordance with the provisions of the Companies Act 2013 and Rules madethereunder for the time being in force. The break-up of the pay scale and quantum ofperquisites including employer’s contribution to P.F. pension medical expensesetc. shall be decided and approved by the Board on the recommendation of the Committee;and further approved by the shareholders and Central Government wherever required.

2. Minimum Remuneration:

If in any financial year the Company has no profits or its profits are inadequatethe Company shall pay remuneration to the Managing Director / Whole-time Directors /Manager in accordance with the provisions of Schedule V of the Companies Act 2013 and ifit is not able to comply with such provisions with the prior approval of the CentralGovernment.

3. Excess Remuneration:

If Managing Director / Whole-time Directors / Manager draws or receives directly orindirectly by way of remuneration any such sums in excess of the limits prescribed underthe Companies Act 2013 or without the prior sanction of the Central Government whererequired he shall refund such sums to the Company and until such sum is refunded hold itin trust for the Company. The Company shall not waive recovery of such sum refundable toit unless permitted by the Central Government.

M. REMUNERATION TO NON-EXECUTIVE / INDEPENDENT DIRECTOR:

1. Remuneration / Commission:

The remuneration / commission shall be in accordance with the provisions of theCompanies Act 2013 and the rules made thereunder for the time being in force.

2. Sitting Fees:

The Non- Executive / Independent Director may receive remuneration by way of fees forattending meetings of Board or Committee thereof. Provided that the amount of such feesshall not exceed the maximum amount as provided in the Companies Act 2013 per meeting ofthe Board or Committee or such amount as may be prescribed by the Central Government fromtime to time.

3. Limit of Remuneration / Commission:

Remuneration / commission may be paid within the monetary limit approved byshareholders subject to the limit not exceeding 1% of the Net Profits of the Companycomputed as per the applicable provisions of the Companies Act 2013.

4. Stock Options:

An Independent Director shall not be entitled to any Stock Option of the Companyunless otherwise permitted by the Act and other applicable statutory provisions.

N. NOMINATION AND REMUNERATION

COMMITTEE DUTIES:

1. To ensure that appropriate induction is provided to new Directors and members ofSenior Management and review its effectiveness.

2. To ensure that on appointment to the Board Non-Executive Directors receive aformal letter of appointment in accordance with the provisions of the Companies Act 2013.

3. To determine the appropriate size diversity and composition of the Board subjectto the applicable statutory provisions.

4. To set a formal and transparent procedure for selecting new Directors forappointment to the Board.

5. To develop and regularly review succession plan for the Board and Senior Management.

6. To evaluate the performance of the Board and Senior Management with theCompany’s performance from business and compliance perspective.

7. To make recommendations to the Board concerning any matters relating to thecontinuation in office of any Director at any time including the suspension or terminationof service of an Executive Director as an employee of the Company subject to theprovisions of the law and their service contract.

8. To consider and determine the Remuneration Policy for Board and Senior Management.

Annexure ‘C’ to Directors’ Report

Form No. MR-3 SECRETARIAL AUDIT REPORT

For the Financial Year ended 31 March 2015

[Pursuant to Section 204(1) of the Companies Act 2013 and Rule No. 9 of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014]

To

The Members

Zicom Electronic Security Systems Ltd.

Mumbai

I have conducted the secretarial audit of the compliance of applicable statutoryprovisions and the adherence to good corporate practices by Zicom Electronic SecuritySystems Ltd. ("the Company"). Secretarial Audit was conducted in a manner thatprovided me a reasonable basis for evaluating the corporate conducts / statutorycompliances and expressing my opinion thereon.

Based on my verification of books papers minute books forms and returns filed andother records maintained by the Company and also the information provided by the Companyits officers agents and authorized representatives during the conduct of secretarialaudit and as per the explanations given to me and the representation made by theManagement I hereby report that in my opinion the Company has during the audit periodcovering the financial year ended on 31 March 2015 generally complied with the statutoryprovisions listed hereunder and also that the Company has proper Board processes andcompliance mechanism in place to the extent in the manner and subject to the reportingmade hereinafter:

I have examined the books papers minute books forms and returns filed and otherrecords made available to me and maintained by Zicom Electronic Security Systems Ltd.("the Company") for the

Financial Year ended on 31 March 2015 according to the applicable provisions of:

i) The Companies Act 1956 and the Companies Act 2013 (‘the Act’) and therules made thereunder as applicable;

ii) The Securities Contracts (Regulation) Act 1956 (‘SCRA’) and the rulesmade thereunder;

iii) The Depositories Act 1996 and the Regulations and Bye-laws framed thereunder;

iv) The Foreign Exchange Management Act 1999 and the Rules & Regulations madethereunder to the extent of Foreign Direct Investment Overseas Direct Investment andExternal Commercial Borrowings;

v) The following Regulations and Guidelines prescribed under the Securities andExchange Board of India Act 1992 (‘SEBI Act’):-

a) The Securities and Exchange Board of India (Substantial Acquisition of Shares andTakeovers) Regulations 2011;

b) The Securities and Exchange Board of India (Prohibition of Insider Trading)Regulations 1992;

c) The Securities and Exchange Board of India (Issue of Capital and DisclosureRequirements) Regulations 2009 regarding issue of Shares / Securities on preferentialbasis under Chapter VII;

d) The Securities and Exchange Board of India (Employee Stock Option Scheme andEmployee Stock Purchase Scheme) Guidelines 1999 (Not applicable as the Company does nothave any Employee Stock Option Plan / Scheme nor does it have any live stock optionspending to be exercised);

e) The Securities and Exchange Board of India (Issue and Listing of Debt Securities)Regulations 2008 (Not applicable as the Company has not issued any debt securities likedebentures);

f) The Securities and Exchange Board of India (Registrars to an Issue and ShareTransfer Agents) Regulations 1993 regarding the Companies Act and dealing with client;

g) The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations2009 (Not applicable to the Company during the Audit period); and

h) The Securities and Exchange Board of India (Buyback of Securities) Regulations 1998(Not applicable to the Company during the Audit Period).

vi) Other Laws applicable to the Company as per the representations made by theManagement.

I have also examined compliance with the applicable clauses of the following:

a. The Listing Agreements entered into by the Company with the BSE Limited (BSE) andNational Stock Exchange of India Limited (NSE).

b. Secretarial Standards of The Institute of Company Secretaries of India with respectto the board and general meetings (Not applicable as not notified during the Audit Period).

During the period under review and as per the explanations and clarifications given tome and the representation made by the Management the Company has generally complied withthe provisions of the Act Rules Regulations Guidelines etc. mentioned above.

I further report that:

1. The Board of Directors of the Company is duly constituted with proper balance ofExecutive Directors Non-Executive Directors and Independent Directors. The changes in thecomposition of the Board of Directors that took place during the year under review werecarried out in compliance with the provisions of the Act.

2. Adequate notice was given to all Directors to schedule the Board Meetings agendaand detailed notes on agenda were sent adequately in advance and a system exists forseeking and obtaining further information and clarifications on the agenda items beforethe meeting and for meaningful participation at the meeting.

3. Decisions at the Board Meetings and Committee Meetings were carried through on thebasis of majority as recorded in the minutes of the meetings. As represented by theManagement there were no dissenting views by any member of the Board of Directors orCommittee of the Board as the case may be during the period under review.

I further report that as per the explanations given to me and the representations madeby the Management and relied upon by me generally there are adequate systems and processesin the Company commensurate with the size and operations of the Company to monitor andensure compliance with all applicable laws rules regulations and guidelines.

I further report that during the audit period

i) The Company had raised Rs 458000000 by preferential issue in accordance withSEBI’s Guidelines for Preferential Issue i.e. Chapter VII of SEBI ICDR Regulations.Under the said preferential issue the Company has allotted:

a) 2600000 Equity Shares Rs 10 each for cash at a price of Rs 160 per share i.e. ata premium of Rs 150 per share to non-promoter individuals / entity; and

b) 1050000 Warrants each Warrant carrying an entitlement to subscribe to one equityshare of Rs 10 each of the Company for cash at a price of Rs 160 per equity share i.e.at a premium of Rs 150 per equity share to Promoters’ Group Companies.

Note: 1. The Equity Shares mentioned in (a) above were granted Listing permission byBSE on 24 March 2015 and by NSE on 31 March 2015. Further BSE and NSE both grantedTrading permission with effect from 10 April 2015.

2. Till the date of signing this Report no holder of the Warrants mentioned in (b)above had exercised their option to subscribe to one Equity Share of the Company as perterms of issue of said Warrants.

ii) There were no instances of

a. Major decisions taken by the Members in pursuance to Section 180 of the CompaniesAct 2013.

b. There were no instances of merger / amalgamation / reconstruction etc.

c. There were no instances of foreign technical collaborations.

I further report that

1. Maintenance of Secretarial record is the responsibility of the Management of theCompany. My responsibility is to express an opinion on these secretarial records based onmy audit.

2. I have followed the audit practices and processes as were appropriate to obtainreasonable assurance about the correctness of the contents of the Secretarial records. Theverification was done on test basis to ensure that correct facts are reflected inSecretarial records. I believe that the processes and practices I followed provide areasonable basis for my opinion.

3. I have not verified the correctness and appropriateness of financial records andBooks of Accounts of the Company.

4. Wherever required I have obtained the Management representation about theCompliance of General and Industry Specific laws rules and regulations and happening ofevents etc.

5. The Compliance of the provisions of Corporate and Other applicable and IndustrySpecific laws rules regulations standards is the responsibility of Management. Myexamination was limited to the verification of procedures on test basis.

6. The Secretarial Audit report is neither an assurance as to future viability of theCompany nor of the efficacy or effectiveness with which the Management has conducted theaffairs of the Company.

For Ganesh Narayan & Co
Company Secretaries
Ganesh Narayan
Proprietor
FCS: 6910 / CP No.: 2238
Place: Mumbai
Date: May 27 2015

Annexure ‘E’ to Directors’ Report

Particulars of loans / advances and investment in its own subsidiaries by listedcompanies their subsidiaries associates etc. required to be disclosed in the AnnualAccounts of the Company pursuant to Clause 32 of the Listing Agreement:

Loans and advances in nature of loans to subsidiaries:

(Amount in Rs)
Name of the Company Balances as on March 31 2015 Maximum outstanding during the year
Unisafe Fire Protection Specialists LLC Dubai 73422433 73422433
Unisafe Fire Protection Specialists Singapore Pte. Ltd. Singapore 453460166 453460166
Zicom Security Projects Pte. Ltd. Singapore 115184181 115184181
Unisafe Fire Protection Specialists India Pvt. Ltd. -29050831 34235000
Phoenix International WLL Qatar 8349861 8349861
Zicom SaaS Pvt. Ltd. Nil 101759796

Loans and advances in the nature of Investments or loans to associates firms /companies in which Directors are interested: NIL

Annexure ‘F’ to Directors’ Report

Details pertaining to remuneration as required under Section 197(12) of the CompaniesAct 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014:

Sr. No. Requirements Disclosure
1 The ratio of the remuneration of each director to the median Name of Director Ratio
remuneration of the employees of the Company for the financial year. Mr. Manohar Bidaye 6:1
Mr. Pramoud Rao 9:1
Mr. Mukul Desai --
Mr. V. Raman Kumar --
Mr. Prabhakar Dalal --
Mr. K. D. Hodavdekar --
Mr. Vijay Kalantri --
Ms. Kunjan Trivedi 2:1
Note : In computation of above ratio sitting fees paid to Directors is excluded.
2 The percentage increase in remuneration of each Director Chief Financial Officer Chief Executive Officer Company Secretary or Manager in the financial year. No remuneration is paid to Independent Directors and
Non-Executive Directors except for Mr. Manohar Bidaye. Others are paid sitting fees for attending the meetings of the Board of Directors and Committees thereof.
During the FY 2014-15 there was no increase in remuneration to Mr. Pramoud Rao Managing Director and Mr. Manohar Bidaye Chairman.
The percentage increase in remuneration of Mr. Hemandra Paliwal Chief Financial Officer and Ms. Kunjan Trivedi Company Secretary was 6% and 18% respectively.
3 The percentage increase in the median remuneration of employees in the financial year. 10%
4 The number of permanent employees on the rolls of the Company. 90
5 The explanation on the relationship between average increase in remuneration and Company performance. Standalone Profit Before Tax for the financial year ended March 31 2015 after considering the Exceptional Item has increased by 75% from the previous year’s performance whereas increase in the median remuneration was 11% which is reasonable considering the performance of the Company.
6 Comparison of the remuneration of the Key Managerial Personnel against the performance of the Company. The average remuneration of KMP increased by 4% and Profit Before Tax of the Company on standalone basis as explained above has increased by 75%.
7 Variations in the market capitalisation of the Company price earnings ratio as at the closing date of the current financial year and previous financial year and percentage increase over decrease in the market quotations of the shares of the Company in comparison to the rate at which the Company came out with the last public offer. Particular March 31 2015 March 31 2014
Market Capitalisation Rs 3195612948 Rs 1114069176
Price Earnings Ratio 25.07 13.35
The Zicom Electronic Security Systems Limited stock price as at March 31 2015 for one share (face value Rs 10) was Rs 158.20 has increased by 1482% over the last public offering th i.e. 30 November 1995 at the price of Rs 10 (face value Rs 10).
8 Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration. Average percentile increase 11% whereas percentile increase in managerial remuneration is 2% only.
9 Comparison of the each remuneration of the Key Managerial Personnel against the performance of the Company. During the FY 2014-15 there was 2% increase in remuneration of Directors.
The percentage increase in remuneration of Mr. Hemendra Paliwal Chief Financial Officer and Ms. Kunjan Trivedi Company Secretary was 6% and 18% respectively as against increase in Profit Before Tax of the Company by 75%.
10 The key parameters for any variable component of remuneration availed by the Directors. N.A.
11 The ratio of the remuneration of the highest paid Director to that of the employees who are not Directors but receive remuneration in excess of the highest paid Director during the year. N.A.
12 Affirmation that the remuneration is as per the remuneration policy of the Company. The Company affirms the remuneration is as per the Remuneration Policy of the Company.

Annexure ‘G’ to Directors’ Report

ANNUAL REPORT ON CORPORATE SOCIAL RESPONSIBILITY (CSR) ACTIVITIES FOR THE FINANCIALYEAR 2014-15

1. A brief outline of the Company’s CSR Policy including overview of projects or programs proposed to be undertaken and a reference to the web-link to the CSR Policy and projects or programs The CSR Policy of the Company focuses on three core areas viz. A. Education; B. Skill Development; and C. Creation of job opportunities All the three focus areas taken together helps the Company to achieve objective of its CSR Policy i.e. boosting economic development of society at large with the help of quality education and skill development which in turn provides rural mass an opportunity to improve their quality of life by getting better job and earning. To achieve the above objectives Company has undertaken Project of re-development and construction of High School building in rural area of Sindhudurg District in Maharashtra at a total outlay of Rs 1.80 crores. The Project is at its final stage with completion of building construction and other infrastructure and facilities for the School are being arranged. The CSR Policy of the Company is available on its website at the link: http://beta.zicom.com/img/pdf/ZESSL_Corporate_Social_Responsibility_Policy.pdf
2. Composition of CSR Committee 1. Mr. Manohar Bidaye Chairman
2. Mr. Pramoud Rao Member
3. Mr. K. D. Hodavdekar Member
3. Average Net Profit of the Company for last three financial years Rs 90543077
4. Prescribed CSR Expenditure (2% of the amount as in item no. 3 above) Rs 1810862
5. Details of CSR spent during the financial year:
a) Total amount to be spent for the financial year Rs 1810862
b) Amount unspent if any Rs 110862
c) Manner in which the amount spent during the financial year Details given below

DETAILS OF AMOUNT SPENT ON CSR ACTIVITIES DURING THE FINANCIAL YEAR 2014-15

Sr. No. CSR Project or Activity Identified Sector in which the Project is covered (clause no. of Schedule VII to the Companies Act 2013 as amended) Projects or Programs 1) Local Area or Other 2) Specify the State and District where Projects or Programs was undertaken Amount Outlay (Budget) Project or Programs wise Amount spent on the Projects or Programs Sub-Heads: 1)Direct Expenditure on Projects or Programs 2)Overheads Cumulative Expenditure upto the reporting period i.e. FY 2014-15 Amount Spent: Direct or through Implementing Agency
1. Construction of Kalambist Panchkroshi Shikhan Prasarak Mandal High School Building Promoting education including vocational training leading to employment enhancement 1) Area around local area Rs 18000000 Direct spending Rs 1700000 during FY 2014-15 Rs 4200000 Direct
2) State: Maharashtra District: Sindhudurga Taluka: Sawantwadi Village: Kalambist

6. Reasons for Unspent amount: The Project for the School is multi-year Projectrunning over a period of more than three years the amount has to be spent based oncompletion schedule of construction of School building and subsequent ordering ofmaterials for interiors furniture electrical fittings laboratory and other equipmentsetc.

7. Responsibility Statement of CSR Committee: We hereby declare that theimplementation and monitoring of Corporate Social Responsibility (CSR) Policy is incompliance with CSR objectives and policy of the Company.

Pramoud Rao Manohar Bidaye
Managing Director Chairman CSR Committee
May 27 2015

Annexure ‘H’ to Directors’ Report

CORPORATE GOVERNANCE REPORT

I COMPANY’S PHILOSOPHY ON CORPORATE

GOVERNANCE

Corporate Governance is about commitment to values and ethical business conduct. It isa set of policies practices processes culture and customs affecting the way a companyis directed administered controlled or managed; which includes the manner in which itdeals with various stakeholders. Some of the important best practices of corporategovernance framework are timely and accurate disclosure of information regarding thefinancial situation performance ownership and governance of the Company.

At Zicom we firmly believe that good governance practice represents the culture andmindset of the organization and therefore in addition to the compliances with thestatutory requirements we also adhere to and constantly work towards improving integrityfairness transparency and accountability in our relationship with all our stakeholdersprotecting their interest; and promotion of ethical practices at work place.

II BOARD OF DIRECTORS

A) Composition and Category of the Board

Your Company’s Board acts as an agency to safeguard good governance andfunctioning of the Company. The Board Members are professionals drawn from diverse areaswith vast experience and knowledge. The Board Members enjoy uninterrupted freedom forexpressing their views and ideas in respect of any item included in agenda. They havecomplete freedom to deliberate on other matters with the permission of Chairman subject tostatutory restrictions. Statutory compliance reports are placed periodically before theBoard by Managing Director / Chief Executive Officer for review by Board Members at Boardmeetings.

The Board of Directors consists of professionals drawn from diverse fields who bringwith them a wide range of professionalism skills knowledge expertise experience andenables the Board to discharge its responsibilities and provide effective leadership tothe business. The Non-Executive including the Independent Directors bring external andwider perception and independence in the decision making. The Board from time to timereviews for addition to the Board and Senior Management of the Company (whether forexpansion or for replacement) thereby planning for orderly succession to the Board ofDirectors and Senior Management.

As on March 31 2015 the Board of your Company comprised of eight Directors of whichfour are Independent one Non-Independent one Whole-time Director being a woman Directorand two Promoters; out of which one being Executive Director.

The Board is structured to maintain optimum combination of Independent andNon-Independent as well as Executive and Non-Executive Directors with one woman Directorin compliance with the requirements of Clause 49 (II) (A) of the Listing Agreement. TheChairman of the Board being the Promoter of the Company is a Non-Executive Director andhence half of the Board comprises of Independent Directors. There are no Institutional /Nominee Directors on the Board of the Company.

The composition of the Board and category of Directors are given in the below table:

Name of the Director Category
Mr. Manohar Bidaye Chairman Non-Executive (Promoter)
Mr. Pramoud Rao Managing Director Executive (Promoter)
Mr. Mukul Desai Independent
Mr. Venu Raman Kumar Non-Executive Non-Independent
Mr. K. D. Hodavdekar Independent
Mr. Vijay Kalantri Independent
Mr. Prabhakar Dalal (appointed w.e.f. June 27 2014) Independent
Ms. Kunjan Trivedi (appointed w.e.f. March 26 2015) Whole-time Director

B) Independent Directors

Pursuant to the provisions of Section 149 of the Companies Act 2013 that came intoeffect from April 1 2014 and Clause 49 (II) (A) (2) of the Listing Agreement everylisted company is required to have at least one-third / half of the total number ofDirectors as Independent Directors depending upon category of the Chairman. TheseIndependent Directors shall be appointed for not more than two terms of five years eachand shall not be liable to retire by rotation. Further as per the clarification issued byMinistry of Corporate Affairs under General Circular No. 14/2014 the existing IndependentDirectors of the Company shall have to be expressly appointed under Section 149 read withSchedule IV of the Companies Act 2013 within one year from April 1 2014. The Board ofDirectors of the Company has adopted the provisions with respect to appointment and tenureof Independent Directors laid down under the Companies Act 2013 and Listing Agreement.

At the 20 Annual General Meeting (AGM) held on September 5 2014 the Members hadappointed all existing Independent Directors of the Company being Mr. Mukul Desai Mr.K. D. Hodavdekar Mr. Vijay Kalantri and Mr. Prabhakar Dalal as Independent Directorsunder the provisions of the Companies Act 2013 and Listing Agreement.

The Company issued formal letters of appointment to the Independent Directors and theterms and conditions of appointment have been disclosed on the website of the Company viz.www.zicom.com.

C) Independent Directors’ Meeting

In accordance with Schedule IV of Companies Act 2013 and Clause 49 (II) (B) (6) ofListing Agreement during the year under review the Independent Directors met on March20 2015 inter-alia to discuss evaluation of performance of Non-Independent Directors andthe Board of Directors as a whole; evaluation of performance of the Chairman of theCompany taking into account the views of Executive and Non-Executive Directors; andevaluation of the quality content and timeliness of flow of information between theManagement and the Board that is necessary for the Board to effectively and reasonablyperform its duties.

All Independent Directors except for Mr. Vijay Kalantri were present at the Meeting.

D) Familiarisation Programme for Independent Directors

The Company believes that a Board which is well informed / familiarised with theCompany can contribute significantly to effectively discharge its role of trusteeship ina manner that fulfils stakeholders’ aspirations and societal expectations. In pursuitof this the Independent Directors are updated on a continuing basis on changes /developments in the domestic / global corporate and industry scenario including thosepertaining to statutes / legislations and economic environment to enable them to takewell informed and timely decisions.

The details of Familiarization Programme for Independent Directors may be accessed onthe website of the Company at the link: http://beta.zicom.com/img/pdf/ZESSL_Familiarisation_Programme_for_Independent_Directors.pdf

E) Compensation and Disclosures of Non-Executive Directors

The Company pays sitting fees to all its Non-Executive Directors for attending themeetings of the Board Audit Committee and other

Committees of the Company except to Mr. Manohar Bidaye; who is paid monthlyremuneration for rendering advisory services to the Company as approved by theShareholders and Central Government.

The details of remuneration paid to Mr. Manohar Bidaye and sitting fees paid to otherNon-Executive Directors during the financial year are given under Para III (b) onNomination and Remuneration Committee in this Report.

Mr. Venu Raman Kumar Non-Independent Non-Executive Director holds 400000 EquityShares as an Individual and 2900000 Equity Shares through Aark Singapore Pte. Ltd.wherein he is a Director and 100% Shareholder.

No Independent Director is holding any Equity Shares or Stock Options in the Company.

F) Other provisions related to Board and Committees

Board Meetings held: During the year under review the Board met on sevenoccasions i.e. on May 27 2014; June 27 2014; August 12 2014; November 13 2014;December 17 2014; February 10 2015 and March 26 2015. The maximum gap between the twomeetings was not more than one hundred and twenty days as stipulated under the CompaniesAct 2013 and Listing Agreement entered with the Stock Exchanges. Information as mentionedat Annexure X to Clause 49 of the Listing Agreement has been time to time placed beforethe Board for its consideration.

Chairmanship / Membership: All the Directors have confirmed to theCompany that none of them is a member of more than ten committees or is chairman of morethan five committees across all companies in which they are acting as Directors. For thepurpose of reckoning the said limit Chairmanships / Memberships of the Audit Committeeand the Stakeholders’ Relationship Committee alone are considered.

Periodical review of Compliance Reports: Reports on compliance with allstatutory laws applicable to the Company have been periodically placed before the Boardfor review.

None of the Directors are related to each other in any way.

Attendance of Directors at Board Meetings Audit Committee Meetings last AnnualGeneral Meeting (AGM) and number of other Directorships and Chairmanships / Memberships ofCommittees of each Director in various companies:

Name of Director Particulars of other Directorships Committee Chairmanships / Memberships Attendance
Directorships Committee Memberships Committee Chairmanships Board Meeting Audit Committee Meeting Last AGM
Mr. Manohar Bidaye 4 4 3 6 4 Yes
Mr. Pramoud Rao 3 1 - 7 N.A. Yes
Mr. Mukul Desai 3 3 2 7 4 Yes
Mr. Venu Raman Kumar - - - 3 N.A. Yes
Mr. K. D. Hodavdekar 2 1 - 6 N.A. Yes
Mr. Vijay Kalantri 8 6 2 3 4 No
Mr. Prabhakar Dalal (appointed w.e.f. June 27 2014) 7 8 - 5 N.A. Yes
Ms. Kunjan Trivedi (appointed w.e.f. March 26 2015) - - - N.A. N.A. N.A.

• Alternate directorships directorships / committee memberships in privatecompanies foreign companies companies under Section 8 of the Companies Act 2013 arenot included while calculating directorships in above table.

• Chairmanships / Memberships of only the Audit Committee and Stakeholders’Relationship Committee of all public limited companies have been considered.

• Also includes the committees in which a Director holds position as a Chairman.

APPOINTMENT / RE-APPOINTMENT OF DIRECTORS

As per the provisions of Section 152(6) of the Companies Act 2013 and Articles ofAssociation of the Company at every Annual General Meeting (AGM) of the Company out ofthe two-third of the total number of Directors (excluding Independent Directors)one-third of such Directors are liable to retire by rotation. Accordingly Mr. V. RamanKumar is the Director retiring by rotation at the forthcoming Twenty First Annual GeneralMeeting of the Company.

Mr. V. Raman Kumar (DIN: 00245022) being Non-Independent Non-Executive Director andeligible has offered himself for re-appointment as a Director liable to retire byrotation.

During the year under review on March 26 2015 Ms. Kunjan Trivedi (DIN: 07131011) wasappointed as an Additional Director under Section 161 of the Companies Act 2013 to holdoffice till the date of the ensuing Annual General Meeting. Further as Ms. Trivedi isemployed with the Company as a Company Secretary with her appointment as a Director onthe Board she also became the Whole-time Director of the Company effective from March 262015. Ms. Trivedi shall hold office as Whole-time Director upto March 25 2016. The termsof her appointment as Whole-time Director shall continue to be governed by the terms ofher appointment as Company Secretary subject however to applicable provisions ofCompanies Act 2013 read with Schedule V thereto. Ms. Trivedi being eligible has offeredherself for the appointment as a Whole-time Director liable to retire by rotation.

The Company has received requisite notice in writing from a Member proposing thecandidature of Ms. Kunjan Trivedi for the office of Whole-time Director. Her appointmentshall be subject to approval of the Members at the forthcoming Annual General Meeting.

Besides above Mr. Prabhakar Dalal (DIN: 00544948) was appointed as an AdditionalDirector on Board on June 27 2014 and he held office upto the conclusion of AnnualGeneral Meeting (AGM) held on September 5 2014. He was appointed as an IndependentDirector at the AGM held on September 5 2014.

As required under Clause 49 (VIII) (E) of the Listing Agreement brief portrayal ofboth the Directors seeking re-appointment / appointment respectively at the ensuing AGMalongwith the list of other companies in which they hold directorships and memberships ofthe Committees of the Board are furnished hereunder:

Name of the Director Mr. V. Raman Kumar Ms. Kunjan Trivedi
Father’s Name Mr. Venu Gopal Rao Mr. Hemant Trivedi
Date of Birth March 10 1961 July 20 1982
Date of Appointment September 1 2012 March 26 2015
Directors Identification Number (DIN) 00245022 07131011
Nationality Indian Indian
Expertise in specific functional areas Management Investment and Strategy Corporate Laws
Qualification B.A. (Hons) M.A. and MBA (Yale University) B.Com. LL.B. Company Secretary
Number of Directorships in other companies 15 Nil
List of outside directorships held (includes public private foreign companies companies under Section 8) • CBay Infotech Ventures Pvt. Ltd. Nil
• Aeries (India) Pvt. Ltd.
• Aeries Technology Solutions Pvt. Ltd.
• Spark Offshore Processing Pvt. Ltd.
• Infokey Solutions Pvt. Ltd.
• CKAR Systems Pvt. Ltd.
• CBay Remote Services Pvt. Ltd.
• Spheris India Pvt. Ltd.
• Pulse Secure Technologies (India) Pvt. Ltd.
• Novo Trading Pvt. Ltd.
• Aark Singapore Pte. Ltd. Singapore
• Aark Holdings Pte. Ltd. Singapore
• Novo GTC FZE UAE
• ZyFin Holdings Pte. Ltd. Singapore
• ZyFin Research Ltd. Cayman Islands
List of other committees in which Director is member / chairman (includes all chairmanships / memberships of Audit Committee Stakeholders’ Relationship Committee and Nomination and Remuneration Committee of all public limited companies) Nil Nil
Number of shares held in the Company 400000 Equity Shares in his own name and 2900000 Equity Shares through Aark Singapore Pte. Ltd. Singapore wherein he is a Director and 100% Shareholder. Nil

G) Code of Conduct

The Board has laid down and adopted Code of Conduct for Board of Directors includingIndependent Directors and Senior Managerial Personnel for avoidance of conflicts ofinterest and ensuring the highest standard of honesty dedication and professionalism incarrying out their functional responsibilities. The Code of Conduct is posted on theCompany’s website www.zicom.com. All the Board Members and Senior ManagerialPersonnel of the Company have affirmed compliance with the Code of Conduct for the yearended March 31 2015. A declaration signed by the Chief Executive Officer (CEO) andManaging Director to this effect is annexed to this Report.

H) The Senior Management has made disclosures to the Board confirming that thereare no material financial and / or commercial transactions between them and the Companywhich could have potential conflict of interest with the Company at large.

III BOARD COMMITTEES

The Board of Directors has constituted several committees as required under theCompanies Act 2013 and Listing Agreement with adequate delegation of powers todischarge their functions with respect to specific matters of the Company. The Committeesare constituted by inclusion of Executive Non-Executive and Independent Directors to meetthe prescribed requirements which carry out its function as per their terms of reference.The decisions taken by these Committees are noted by the Board in its minutes. The briefparticulars of Audit Committee Nomination and Remuneration Committee; Stakeholders’Relationship Committee and Corporate Social Responsibility Committee as required underClause 49 of the Listing Agreement and the Companies Act 2013 are given hereunder:

a) Audit Committee

The composition quorum powers role review of information scope etc. of the AuditCommittee are in accordance with provisions of Section 177 of the Companies Act 2013 andClause 49 (III) of the Listing Agreement. The Audit Committee acts as a link between theAuditors and the Board of Directors. The Audit Committee inter-alia keeps checks on theadequacy of the internal control systems financial disclosures and statutory compliances.

Composition: The Audit Committee comprises of three Non-Executive Directors all ofthem being financially literate and having accounts and financial management knowledge.Majority i.e. two-thirds of the Audit Committee Members are Independent. Mr. Mukul DesaiChairman of Audit Committee is in practice as a Chartered Accountant since 1982 and hasvaried experience in the field of audit and taxation. He has developed expertise incorporate law matters direct and indirect taxation laws corporate finance structuringamong others. The Chief Financial Officer (CFO) and representatives of the StatutoryAuditors and Internal Auditors remain present at the Meetings. The Company Secretary actsas Secretary to the Committee Meetings. The Audit Committee invites such of theexecutives professionals and other persons as it deem necessary for its functioning.

The Chairman of Audit Committee was present at the Annual General Meeting held onSeptember 5 2014.

The Members of the Audit Committee are as follows:

Name of Committee Member Designation in Committee Category
Mr. Mukul Desai Chairman Independent
Mr. Manohar Bidaye Member Non-Executive (Promoter)
Mr. Vijay Kalantri Member Independent

Objective: The Audit Committee is constituted by the Board with intent to assistthe later in its oversight of - (i) the quality and integrity of the accounting auditingand reporting practices of the Company;

(ii) the integrity of the financial statements the appointment independenceperformance and remuneration of the Statutory and Internal Auditors;

(iii) the independent auditor’s qualifications;

(iv) the performance of the Company’s internal audit function and independentauditors; and

(v) the compliance with the legal and regulatory requirements.

Meetings: During the year under review the Audit Committee met four times on May27 2014; August 12 2014; November 13 2014 and February 10 2015. The maximum time gapbetween two meetings did not exceed a period of four months. The quorum of the AuditCommittee meeting is two Independent Members. Requisite quorum was present at all theCommittee meetings held during the year. The attendance of Members at the Audit Committeemeetings held during the year is given in the table under Para II (F) above.

Terms of Reference:

The terms of reference of the Audit Committee covers the following:

i. Oversight of the Company’s financial reporting process and the disclosure ofits financial information to ensure that the financial statement is correct sufficientand credible.

ii. Recommending to the Board the appointment re-appointment terms of appointmentand if required the replacement or removal of the Statutory Auditors and the fixation ofaudit fees.

iii. Approving payment to Statutory Auditors for any other services rendered by theStatutory Auditors.

iv. Reviewing with the management the annual financial statements and Auditor’sReport thereon before submission to the Board for approval with particular reference to:

a. Matters required to be included in the Director’s Responsibility Statementforming part of the Board’s Report in terms of clause (c) of sub-section 3 of Section134 of the Companies Act 2013;

b. Changes if any in accounting policies and practices and reasons for the same;

c. Major accounting entries involving estimates based on the exercise of judgment bythe management;

d. Significant adjustments made in the financial statements arising out of auditfindings;

e. Compliance with listing and other legal requirements relating to FinancialStatements;

f. Disclosure of any related party transactions;

g. Qualifications in the draft Audit Report.

v. Reviewing with the Management the quarterly financial statements before submissionto the Board for approval.

vi. Reviewing with the Management the statement of uses / application of funds raisedthrough an issue (public issue rights issue preferential issue etc.) the statement offunds utilized for purposes other than those stated in the offer document / prospectus /notice and the report submitted by the monitoring agency monitoring the utilisation ofproceeds of a public or rights issue and making appropriate recommendations to the Boardto take up steps in this matter.

vii. Review and monitor the Auditor’s independence and performance andeffectiveness of audit process.

viii. Approval or any subsequent modification of transactions of the Company withrelated parties.

ix. Scrutiny of inter-corporate loans and investments.

x. Valuation of undertakings or assets of the company wherever it is necessary.

xi. Evaluation of internal financial controls and risk management systems.

xii. Reviewing with the Management the performance of Statutory and InternalAuditors and adequacy of the internal control systems.

xiii. Reviewing the adequacy of the internal audit function if any including thestructure of the internal audit department staffing and seniority of the official headingthe department reporting structure coverage and frequency of internal audit.

xiv. Discussion with Internal Auditors any significant findings and follow up thereon.xv. Reviewing the findings of any internal investigations by the Internal Auditors intomatters where there is suspected fraud or irregularity or a failure of internal controlsystems of a material nature and reporting the matter to the Board.

xvi. Discussion with the Statutory Auditors before the audit commences about thenature and scope of audit as well as post audit discussions to ascertain any area ofconcern.

xvii. To look into the reasons for substantial defaults in the payment to thedepositors debenture holders shareholders (in case of non-payment of declared dividends)and creditors.

xviii. To review the functioning of the Whistle Blower Mechanism.

xix. Approval of appointment of CFO (i.e. the whole-time Finance Director or any otherperson heading the finance function or discharging that function) after assessing thequalifications experience and background etc. of the candidate.

xx. Carrying out any other function as is mentioned in the terms of reference of theAudit Committee.

Further the Audit Committee mandatorily reviews and considers all the mattersprescribed under Clauses 49 (III) (E); 49 (VII) and 49 (VIII) (A) as are periodicallyplaced before it. The Committee also recommends on the appointment of the Internal Auditorto the Board.

b) Nomination and Remuneration Committee

In order to comply with the requirements of the Companies Act 2013 during the yearunder review the Board of the Company amended the nomenclature of "RemunerationCommittee" to "Nomination and Remuneration Committee".

Composition: The Nomination and Remuneration Committee comprises of fourIndependent Directors as detailed below:

Name of Committee Member Designation in Committee Category
Mr. Mukul Desai Chairman Independent
Mr. Vijay Kalantri Member Independent
Mr. K.D. Hodavdekar Member Independent
Mr. Prabhakar Dalal (appointed w.e.f. June 27 2014) Member Independent

Terms of Reference:

The Terms of Reference inter-alia includes the following:

1. To formulate the criteria for determining qualifications positive attributes andindependence of a Director and recommend to the Board a policy relating to theremuneration for the Directors Key Managerial Personnel and other employees.

2. To formulate the criteria for evaluation of Independent Directors and the Board.

3. To devise a policy on Board diversity.

4. To identify persons who are qualified to become Directors and who may be appointedin senior management in accordance with the criteria laid down and to recommend to theBoard their appointment and / or removal.

5. To carry out evaluation of every Director’s performance.

6. To provide reports after completion of evaluation process by the Directors.

7. To recommend / review remuneration of the Managing Director and Whole-time Directorbased on performance and defined assessment criteria.

8. To administer monitor and formulate detailed terms and conditions of theEmployees’ Stock Option Scheme.

9. To carry out any other function as is mandated by the Board from time to time and /or enforced by any statutory notification amendment or modification as may beapplicable.

10. To perform such other functions as may be necessary or appropriate for theperformance of its duties.

Meetings: During the year under review the Committee met three times on June 252014 February 10 2015 and March 20 2015. The necessary quorum was present for all theMeetings. The Chairman of the Committee was present at the Annual General Meeting held onSeptember 5 2014 to answer shareholders queries. The attendance of each Member at thesaid Meetings is stated below:

Name of Committee Member No. of Meetings attended
Mr. Mukul Desai 3
Mr. Vijay Kalantri 2
Mr. K. D. Hodavdekar 3
Mr. Prabhakar Dalal (appointed w.e.f. June 27 2014) 2

Remuneration Policy:

In accordance with the Nomination and Remuneration Policy of the Company the Nominationand Remuneration Committee recommends to the Board the remuneration to be paid to theManaging Director Key Managerial Personnel and Senior Management; the same is as per theprovisions of the Companies Act 2013 and the Rules made thereunder. The Committee alsorecommends to the Board the breakup of pay scale quantum of perquisites includingemployer’s contribution to provident fund pension medical expenses etc.; which isapproved by the Board. The remuneration of employees largely consists of basic salaryperquisites bonus and performance incentives. The components of the total remunerationvary for different grades and are governed by the industry pattern qualification andexperience / merits performance of each employee. Whenever required the Company obtainsnecessary approvals of the Members and the Central Government.

Further whenever the Company suffers losses or there is inadequacy of profits; it hasa policy of paying remuneration to Managerial Personnel as per the requirements ofSchedule V of the Companies Act 2013. Recovery of excess remuneration drawn or receivedis not waived by the Company; directly or indirectly unless the same is permitted by theCentral Government.

Payment of remuneration to Non-Executive Directors except sitting fees to the extentpermitted is made only with prior approval of Members and / or Central Government (ifrequired); subject to the limits specified in this behalf under provisions of theCompanies Act 2013.

Independent Non-Executive Directors are appointed for their professional expertise intheir individual capacity as independent professionals / business executives.Non-Executive Directors are paid sitting fees for attending the meetings of the Board andvarious other Committees which is determined keeping in view comparable industry andcorporate standards. As the Chairman is paid monthly remuneration in accordance withapproval of Members and Central Government he is not entitled for sitting fees.

In addition to the above the Directors (other than Promoters and IndependentDirectors) and the employees may be granted stock options under the Employees StockOptions Scheme of the Company as may be approved by the Members and decided by theCompensation Committee of Directors from time to time.

The main objective of the Nomination and Remuneration Policy is to motivate each andevery employee and to stimulate excellence in their performance recognise merits /achievements in order to retain the talent in the Company and to promote the feeling ofbelongingness.

While formulating the Nomination and Remuneration Policy the Nomination andRemuneration Committee ensures that:

(i) the level and composition of remuneration is reasonable and sufficient to attractretain and motivate Directors of the quality required to run the Company successfully;

(ii) relationship of remuneration to performance is clear and meets appropriateperformance benchmarks; and

(iii) remuneration to Directors Key Managerial Personnel and Senior Managementinvolves a balance between fixed and incentive pay reflecting short and long-termperformance objectives appropriate to the working of the Company and its goals.

Details of remuneration to Directors:

Particulars Remuneration to Mr. Pramoud Remuneration to Mr. Manohar Remuneration to Ms. Kunjan
Rao Managing Director (Executive Director) Bidaye Chairman (Non-Executive Director) Trivedi Whole-time Director (Executive Director)
Terms of Appointment The term of Mr. Pramoud Rao as Managing Director has been renewed for a period of five years i.e. upto February 28 2017. His terms and conditions including remuneration were approved by Members for a period of three years ending February 28 2015. Subsequently the Nomination and Remuneration Committee of Directors and the Board of Directors at their respective meetings held on February 10 2015 have approved to continue the same terms of remuneration for the balance period of two years subject to approval of Members and Central Government (if required). A Supplemental Agreement has been executed between the Company and the Managing Director for continuation of same terms of remuneration for the balance period of two years. Remuneration paid to Mr. Pramoud Rao during 2014-15 is as under: The Central Government vide its letter dated August 27 2012 has approved payment of remuneration to Mr. Manohar Bidaye for a further period of five years w.e.f. April 1 2012 with an overall ceiling limit of Rs 800000 per month. During the financial year ended March 31 2015 he was paid a monthly remuneration of Rs 294790 i.e. total remuneration of Rs 3537480 for rendering his advisory services to the Company. The Nomination and Remuneration Committee of Directors and the Board of Directors of the Company at their respective meetings held on March 20 2015 and March 26 2015 have subject to the approval of Members appointed Ms. Kunjan Trivedi as a Whole-time Director of the Company to be 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. Remuneration paid to Ms. Kunjan Trivedi during 2014-15 as Whole-time Director computed proportionately is as under:
Salary Salary
(including Basic HRA Special Allowance CCA) Rs 5313000 (including Basic HRA Special Allowance CCA) Rs 14240
Commission Rs Nil Commission Rs Nil
Medical Rs 15000 Medical Rs 242
LTA Rs Nil LTA Rs 290
PF Rs 16500 PF Rs 608
Total Rs 5344500 Total Rs 15380
Contractual basis Yes Yes No
Commission & Fixed Components Commission up to 2% of Net Profit for each financial year (as may be decided by the Board) and other fixed components which forms part of remuneration. No Commission has been paid for financial year 2014-15. He is not entitled to any commission on the Net Profit of the Company. She is not entitled to any commission on the Net Profit of the Company.
Notice period for severance & severance fees Six months. Compensation for severance of services would be computed in accordance with applicable provision of the Companies Act. Three months. Compensation for severance is three months remuneration. One month. Compensation for severance is one mont h remuneration.

 

Particulars Remuneration to Mr. Pramoud Rao Managing Director (Executive Director) Remuneration to Mr. Manohar Bidaye Chairman (Non-Executive Director) Remuneration to Ms. Kunjan Trivedi Whole-time Director (Executive Director)
Perquisites Entitled as per the Agreement. Entitled as per the Agreement. Entitled as per Company’s policies and rules.
Sitting Fees Not entitled for sitting fees for attending meetings of the Board of Directors or any of its Committees. Not entitled for sitting fees for attending meetings of the Board of Directors or any of its Committees. Not entitled for sitting fees for attending meetings of the Board of Directors or any of its Committees.
Absence or inadequacy of profits In the event of absence or inadequacy of profits in any financial year during the tenure of Managing Director he would be entitled for the aforesaid remuneration perquisites / benefits as the minimum remuneration subject to the ceiling limits prescribed under Schedule V and other applicable provisions of the Companies Act 2013; subject to necessary approval from the Central Government (if required). In the event of absence or inadequacy of profits in any financial year during the tenure of Whole-time Director she would be entitled for the remuneration perquisites / benefits as approved by the Members as the minimum remuneration subject to the ceiling limits prescribed under Schedule V and other applicable provisions of the Companies Act 2013; subject to necessary approval from the Central Government (if required).

Remuneration to other Non-Executive Directors

Remuneration by way of sitting fees for attending Board and Committee meetings are paidto Non-Executive Directors (other than Chairman). Sitting fees vary from type of meetingsattended.

During the year the Non-Executive Directors were paid sitting fees for attending eachof the following meetings of the Company as under:

Type of Meetings Sitting fees (in Rs)
Board Meeting 15000
Audit Committee Meeting 5000
Stakeholders’ Relationship 1500
Committee Meeting
Other Committee Meeting 2500

Details of sitting fees paid to Non-Executive Directors during the year are as under:

Name of Non-Executive Directors Sitting fees (in Rs)
Mr. Mukul Desai 170500
Mr. Vijay Kalantri 92500
Mr. K. D. Hodavdekar 115000
Mr. Venu Raman Kumar 45000
Mr. Prabhakar Dalal (appointed w.e.f. June 27 2014) 95000
Total 518000

Except Mr. Manohar Bidaye who draws remuneration from the Company as stated above noother Non-Executive Director has any material pecuniary relationship or transactions withthe Company.

Except for Mr. Manohar Bidaye Promoter & Non-Executive Director and Mr. Venu RamanKumar Non Executive and Non-Independent Director no other Non-Executive Directors holdany Equity Shares of the Company.

Mr. Manohar Bidaye holds 430100 Equity Shares as individual. Besides Mr. ManoharBidaye is Director / Shareholder in four private companies who are holding shares in theCompany as per details given below:

Sr. No. Name of the Company No. of Shares held % of shareholding
1. Baronet Properties and Investments Private Limited 1535652 7.60
2. Coronet Properties and Investments Private Limited 1386286 6.86
3. Progressive Equifin Private Limited 145264 0.72
4. Success Equifin Private Limited 60521 0.30

Mr. Venu Raman Kumar holds 400000 Equity Shares as individual and 2900000 throughAark Singapore Pte. Ltd. (wherein he is a Director and 100% Shareholder).

• No Directors hold any Stock Options of the Company neither any of them weregranted Stock Options.

• None of the Directors hold any convertible instruments in the Company.

Performance Evaluation

In accordance with the requirements of the Companies Act 2013 and Clause 49 of theListing Agreement the Board evaluation process was carried out. The Board / Nominationand Remuneration Committee of Directors have laid down the criteria for evaluation of theperformance of the Board its Committees and individual Directors. Accordingly astructured questionnaire containing criteria’s such as Board composition andstructure effectiveness of Board processes information and functioning etc. wascirculated to Directors for the purpose of evaluation.

The Board and Nomination and Remuneration Committee of Directors reviewed theperformance of the individual Directors on the basis of set criteria’s.

The Independent Directors at its separate meeting carried out performance evaluationof Board as a whole its Committees Chairman of the Company and Non-IndependentDirectors. The same was discussed in the Board meeting that followed the meeting ofIndependent Directors at which performance of the Board its Committees and individualDirectors was also discussed.

c) Stakeholders’ Relationship Committee

In order to comply with the requirements of the Companies Act 2013 the Board of theCompany during the year under review amended the nomenclature of the "ShareTransfer and Investors’ Grievance Committee" to "Stakeholders’Relationship Committee".

Composition: Stakeholders’ Relationship Committee comprises of following threeDirectors:

Name of Committee Member Designation in Committee Category
Mr. Manohar Bidaye Chairman Non-Executive (Promoter)
Mr. Pramoud Rao Member Executive (Promoter)
Mr. Mukul Desai Member Independent

Terms of Reference: The terms of reference inter alia are as follows:

i) To approve or deal with applications for transfer transmission transposition andmutation of share certificates including duplicate split renewal sub-division orconsolidation of certificates and to deal with all related matters.

ii) To look into and redress Shareholders / investors grievances relating to:

a) Transfer of shares;

b) Non-receipt of declared dividends;

c) Non-receipt of annual reports;

d) All such complaints directly concerning the Shareholders / investors as stakeholdersof the Company; and

e) Any such matters that may be considered necessary in relation to Shareholders andinvestors of the Company.

iii) To oversee the performance of the Company’s Registrar and Transfer Agents.

iv) To monitor implementation and compliance with the Company’s Code of Conductfor Prohibition of Insider Trading.

Meetings:

The Stakeholders' Relationship Committee generally meets once in a month depending onthe frequency of grievances / transfer / duplicate requests received from theShareholders. In the financial year 2014-15 the Committee met 12 times. The attendance ofeach Member at the said Meetings is stated below:

Name of Committee Member No. of Meetings attended
Mr. Manohar Bidaye 12
Mr. Pramoud Rao 12
Mr. Mukul Desai 12

Compliance Officer:

Ms. Kunjan Trivedi Company Secretary is the Compliance Officer for complying with therequirements of SEBI Regulations and the Listing Agreements with the Stock Exchanges inIndia.

Prohibition of Insider Trading:

With a view to regulate trading in securities by the Directors and designatedemployees the Company has adopted a Code of Conduct for Prohibition of Insider Tradingunder SEBI (Prohibition of Insider Trading) Regulations 1992.

Subsequent to the year end to comply with the new SEBI (Prohibition of InsiderTrading) Regulations 2015 the Company has formulated approved and adopted w.e.f. May15 2015:

1. Code of Practices and Procedures for Fair Disclosure of Unpublished Price SensitiveInformation and

2. Code of Conduct for Prohibition of Insider Trading to regulate monitor and reporttrading by its employees and other connected persons.

Name of Committee Member Designation in Committee Category
Mr. Manohar Bidaye Chairman Non-Executive (Promoter)
Mr. Pramoud Rao Member Executive (Promoter)
Mr. K.D. Hodavdekar Member Independent

Terms of Reference:

i) To formulate and recommend to the Board a Corporate Social Responsibility Policywhich shall indicate the activities to be undertaken by the Company as specified inSchedule VII of the Companies Act 2013;

ii) To recommend the amount of expenditure to be incurred on the CSR activities; and

iii) To monitor the CSR Policy of the Company from time to time.

Meetings:

During the year under review a Meeting of CSR Committee was held on August 12 2014.All the Members were present at the Meeting.

In addition to the above mentioned Committees the Board has also constituted thefollowing Committees:

i) Compensation Committee comprising of the following Directors:

Mr. Manohar Bidaye Chairman; Mr. Mukul Desai and Mr. Vijay Kalantri Members Nomeeting of the said Committee was held during the year under review.

These Codes supersedes the Code of Conduct for Prohibition of Insider Trading of theCompany formulated under SEBI (Prohibition of Insider Trading) Regulations 1992.

Investor Grievance Redressal:

The Company addresses all complaints suggestions and grievances expeditiously andreplies have normally been sent / issued within 7-10 days except in case of dispute overfacts or other impediments. As during the year under review there were no unresolvedcomplaints and hence the requirement of giving details does not apply.

d) Corporate Social Responsibility Committee

Pursuant to Section 135 of the Companies Act 2013 the Corporate Social Responsibility(CSR) Committee was constituted.

Composition: Corporate Social Responsibility (CSR) Committee comprises of followingthree Directors:

ii) Preferential Issue Committee comprising of the following Directors:

Mr. Manohar Bidaye Chairman; Mr. Pramoud Rao Mr. Mukul Desai and Mr. Vijay KalantriMembers

The Committee met twice during the year on February 6 2015 and February 18 2015 forissue and allotment of Equity Shares and Warrants carrying right to subscribe to equalnumber of Equity Shares on preferential / private placement basis.

iii) Managing Committee comprising of the following Directors:

Mr. Manohar Bidaye Chairman; Mr. Pramoud Rao and Mr. Vijay Kalantri Members

The Committee met seven times during the year on April 11 2014; August 21 2014;September 4 2014; October 10 2014; November 4 2014; January 19 2015 and March 9 2015and has transacted various businesses falling within its terms of reference.

SUBSIDIARY COMPANIES

As on March 31 2015 the Company had following four direct subsidiaries and twostep-down subsidiaries of which two are Indian and the other four foreign.

Sr. No. Name of the Subsidiary No. of Members nominated on the Board
1. Zicom SaaS Private Limited India 4
2. Unisafe Fire Protection Specialists India Private Limited India 3
3. Unisafe Fire Protection Specialists LLC Dubai 4
4. Phoenix International WLL Qatar 5
5. Unisafe Fire Protection Specialists Singapore Pte. Ltd. Singapore 4
6. Zicom Security Projects Pte. Ltd. Singapore 3

None of the above Indian subsidiaries were material non-listed subsidiary. However onthe Board of its Indian subsidiaries the Company has nominated its Directors /Independent Directors.

The Financial Statements in particular the investment made by the unlistedsubsidiaries statement containing all significant transactions and arrangements enteredinto by the unlisted subsidiaries forming part of the financials are being reviewed by theAudit Committee of your Company on quarterly basis. Also statements of all significanttransactions and arrangements entered into by the unlisted subsidiary companies areperiodically brought to the attention of the Board by the Management.

Minutes of the meetings of the unlisted subsidiaries are placed before theCompany’s Board as required.

The Policy on Material Subsidiary as approved may be accessed on the Company’swebsite at the link:http ://beta .zicom.com/img/pdf/ZESSL-Policy on Material Subsidiarypdf

RISK MANAGEMENT

The provisions of Clause 49 (VI) (C) to (E) of the Listing Agreement relating toformation of Risk Management Committee are not applicable to the Company. However theCompany has in place mechanisms to inform the Board Members about risk assessment andminimization procedures and periodical review to ensure that executive management controlsrisk by means of properly defined framework. Risk Management is discussed in detail in theDirectors' Report forming part of this Report.

INVESTORS INFORMATION

GENERAL BODY MEETINGS

Details of the previous three Annual General Meetings of the Members are as under:

Respective 2013-14 2012-13 2011-12
Financial Year
Date of Meeting September 5 2014 August 30 2013 August 24 2012
Time of Meeting 3.00 p.m. 3.00 p.m. 3.00 p.m.
Place of Meeting M.I.G. Cricket Club M.I.G. Colony Bandra (East) Mumbai 400051. Mumbai Cricket Association Recreation Centre RG 2 G Block Bandra Kurla Complex Mumbai 400051. Mumbai Cricket Association Recreation Centre RG 2 G Block Bandra Kurla Complex Mumbai 400051.
Items of Special Resolution passed at each Meeting • To create securities in favour of Lenders u/s 180(1)(a) of the Companies Act 2013 Nil • Amendment of Articles of Association by inserting Article 153B for allowing e-voting meeting through video conferencing electronic media etc.
• To set borrowing limits of the Company u/s 180(1)(c) of the Companies Act 2013

Details of Extraordinary General Meetings of the Members held in last three years areas under:

Financial Year 2014-15
Date of Meeting January 16 2015
Time of Meeting 10.30 a.m.
Place of Meeting Mumbai Cricket Association Recreation Centre RG 2 G Block Near Laxmi Tower Bandra Kurla Complex Bandra (East) Mumbai 400051
Items of Special Resolution passed at each Meeting • To increase the limit of Investments in the Company’s shares and securities by Non-Resident Indian (NRIs) / Persons of Indian Origin (PIOs) upto 24% of paid-up Share Capital / value of other permissible securities of the Company
• To issue and allot upto 2600000 Equity Shares on preferential / private placement basis to Non-Promoters persons / entities pursuant to Section 62 and other applicable provisions of the Companies Act 2013 and Rules made thereunder read with Chapter VII of SEBI (Issue of Capital and Disclosure Requirements) Regulations 2009
• To issue and allot upto 1050000 Warrants carrying right to subscribe to equal number of Equity Shares on preferential / private placement basis to Promoters’ Group Companies pursuant to Section 62 and other applicable provisions of the Companies Act 2013 and Rules made thereunder read with Chapter VII of SEBI (Issue of Capital and Disclosure Requirements) Regulations 2009

Details of Special Resolution passed through Postal Ballot:

During the year under review no Special Resolution was passed through Postal Ballot.Further no Special Resolution through Postal Ballot is proposed at the ensuing AnnualGeneral Meeting.

DISCLOSURES

1. Related Party Transactions:

During the year under review the Company had not entered into any material transactionwith any of its related parties. All transactions entered into with the related parties asdefined under the Companies Act 2013 and Clause 49 of the Listing Agreement during thefinancial year were in the ordinary course of business and on arm’s length basis anddo not attract the provisions of Section 188 of the Companies Act 2013. Related partytransactions have been disclosed under Note No. 25.10 of Standalone Financial Statements.

The Audit Committee and the Board of Directors have approved the Related PartyTransaction Policy which has been prepared in consonance with provisions of Clause 49 ofthe Listing Agreement and Companies Act 2013. The same has been uploaded on theCompany’s website at the link: http://beta.zicom.com/img/pdf/ZESSL-Related PartyTransaction Policy pdf All Related Party Transactions are being placed before the AuditCommittee for approval. Omnibus approvals are also obtained for transactions which are ofrepetitive nature. Such transactions are placed before the Audit Committee and Board (asrequired) for periodical review and approval.

2. No treatment different from the accounting standards prescribed by the Institute ofChartered Accountants of India has been followed in the preparation of financialstatements.

3. In view of various business risks associated with the Company in general and certainrisks specific to the Company and the nature of business of the Company and itssubsidiaries risk management policy of the Company is framed for implementation byexecutive management so as to minimize such risks. The same is periodically reviewed bythe Board and modified from time to time to meet the changing business scenario.

4. During the last three years there were no instances of non-compliance by theCompany and no penalty or strictures were imposed on the Company by the Stock Exchanges orSEBI or any statutory authority on any matter related to the capital markets.

5. The Company is fully compliant with the applicable mandatory requirements of Clause49 of the Listing Agreement with the Stock Exchanges relating to Corporate Governance.Adoption of non-mandatory requirements of Clause 49 of the Listing Agreement is beingreviewed by the Board from time to time.

6. Pursuant to Section 177(9) of the Companies Act 2013 and Clause 49 of the ListingAgreement the Company has formulated Whistle Blower Policy for vigil mechanism forDirectors and employees to report to the management about the unethical behavior fraud orviolation of Company’s code of conduct and same has been disclosed on theCompany’s website at the link:http://beta.zicom.com/img/pdf/ZESSL-Whistle_Blower_Policy.pdf. The mechanism provides foradequate safeguards against victimization of employees and Directors who use suchmechanism and makes provision for direct access to the Chairperson of the Audit Committeein exceptional cases. The Company has not denied access to any personnel to approach theAudit Committee on any issue.

7. During the year under review the Company did not make any public issue rightissue. However the Company made the following preferential issues during the year underreview:

a. 2600000 Equity Shares issued to following Non-Promoter individuals / entity at aprice of Rs 160 per share on preferential basis:

Sr. No. Name of Allottees No. of Equity Shares allotted
1. Mr. Atim Kabra 1040850
2. Frontline Strategy Limited 259150
3. Mr. Arvind Darab Dubash 650000
4. Mrs. Sudha Darab Dubash 650000
Total 2600000

b. 1050000 Warrants issued to Promoters’ Group Companies at a price of Rs 40being 25% of the price at which each of such Warrant shall entitle their holder to acquireone Equity Share i.e. being a price of Rs 160 per share.

The entire proceeds from the above preferential issues were utilized for the purposesof making investment in subsidiaries for meeting the incremental and long term workingcapital requirements of the Company and its subsidiaries.

AUDITORS’ CERTIFICATE

The Statutory Auditors have certified that the Company has complied with the conditionsof Corporate Governance as stipulated in Clause 49 of the Listing Agreement with the StockExchanges and the same is annexed to this Report.

CERTIFICATE BY CEO AND CFO

As required under Clause 49 (IX) of the Listing Agreement with the Stock Exchanges theChief Executive Officer (CEO) and the Chief Financial Officer (CFO) of the Company havecertified to the Board about the financial reporting and internal controls in the Company.The said certificate was reviewed by the Audit Committee and taken on record by the Boardof Directors at the respective meetings held on May 27 2015.

MEANS OF COMMUNICATION

The Company established procedures to disseminate in a planned manner relevantinformation to Members analysts employees and the society at large.

Press releases and presentations: All our press and news releases are submitted tothe Stock Exchanges and are also posted on the Company’s website at www.zicom.com.Detailed presentations were made to institutional investors and financial analysts basedon performance and achievements of the Company.

Quarterly Half-yearly and Annual results: Our quarterly half-yearly and annualresults are published in widely circulated national newspapers such as The BusinessStandard (English) (all Editions) and the local daily Mumbai Lakshadeep (Marathi) (MumbaiEdition). They are also filed on websites of the Stock Exchanges and are also displayed onthe Company’s website.

Corporate Filing and Dissemination System (CFDS): The CFDS portal jointly ownedmanaged and maintained by BSE and NSE is a single source to view information filed bylisted companies. All disclosures and communications to BSE and NSE are filedelectronically through CFDS portal and hard copies of the said disclosures andcorrespondence are also filed with the Stock Exchanges.

NSE Electronic Application Processing Systems (NEAPS): The NEAPS is a web basedapplication designed by NSE for corporates. All periodical compliance filings likeshareholding pattern corporate governance report press releases etc. are filedelectronically on NEAPS.

BSE Corporate Compliance & Listing Centre (the "Listing Centre"): TheListing Centre of BSE is a web based application designed by BSE for corporates. Allperiodical compliance filings like shareholding pattern corporate governance reportpress releases etc. are also filed electronically on the Listing Centre.

SEBI Complaint Redress System (SCORES): The investor complaints are processed in acentralised web based complaints redress system. The significant features of SCORES are:Centralised database of all companies online upload of Action Taken Report (ATRs) by theconcerned companies and online viewing by investors of actions taken on the complaint andits current status.

Website: In accordance with Clause 54 of the Listing Agreement the Company hasmaintained a functional website www.zicom.com containing basic information about theCompany viz. details of its business financial information shareholding patterncompliance with corporate governance contact information of designated officials of theCompany who is responsible for assisting and handling investor grievances etc. Thecontents of the said website are updated from time to time.

Annual Report: Annual Report containing audited standalone and consolidatedfinancial statements together with Directors’ Report Auditors’ Report and otherimportant information are circulated to Members and others entitled thereto. The AnnualReport is displayed on the website of the Company.

Stock Exchange(s): The Company from time to time disseminates to the StockExchanges (i.e. BSE and NSE) wherein its equity shares are listed all mandatoryinformation and price sensitive / such other information which in its opinion arematerial and / or have a bearing on its performance / operations and issues pressreleases wherever necessary for the information of the public at large.

Members Correspondence: For the benefit of the Members a separate email id hasbeen created for Members correspondence viz. investors@zicom.com.

MANAGEMENT DISCUSSION AND ANALYSIS

A Management Discussion and Analysis Report is attached to and forms part of thisReport and includes discussion on various matters specified under Clause 49 (VIII) (D) ofthe Listing Agreement.

GENERAL SHAREHOLDERS’ INFORMATION

i. 21 Annual General Meeting
Venue M.I.G. Cricket Club M.I.G. Colony Bandra (East) Mumbai 400051
Time 10.30 a.m.
Day Tuesday
Date September 29 2015
ii. Financial Calendar (tentative)
Audited Annual Results of previous year ended March 31 2015 Fourth week of May 2015
1 quarter results for quarter ending June 2015 Second week of August 2015
2 quarter results for quarter ending September 2015 Second week of November 2015
3 quarter results for quarter ending December 2015 Second week of February 2016
Last quarter results for quarter ending March 2016 End of May 2016
iii. Financial year April 1 2015 to March 31 2016
iv. Book closure dates Tuesday September 22 2015 to
Tuesday September 29 2015 (both days inclusive)
v. Dividend payment / dispatch date for Financial Year 2014-15 October 20 2015
vi. Listing of equity shares on Stock Exchanges The Bombay Stock Exchange Limited (BSE)
P J Towers Dalal Street Fort Mumbai 400001. National Stock Exchange of India Limited (NSE) Exchange Plaza Bandra Kurla Complex Bandra (East) Mumbai 400051.
vii. Stock Codes BSE: 531404
NSE: ZICOM
viii. International Securities Identification Number (ISIN) INE871B01014
ix. Corporate Identity Number (CIN) L32109MH1994PLC083391

i) The Company has paid within the prescribed time the annual listing fees for theFinancial Year 2015-16 to Bombay Stock Exchange Limited (BSE) and National Stock Exchangeof India Limited (NSE).

ii) The annual custodial fees for the Financial Year 2015-16 to National SecuritiesDepository Limited (NSDL) and Central Depository Services (India) Limited (CDSL) will bepaid by the Company on receipt of the invoices.

x. MARKET PRICE DATA for the Financial Year 2014-15

BSE NSE
Month Share Price High (Rs) Low (Rs) No. of Shares Traded Share Price High (Rs) Low (Rs) No. of Shares Traded
April 2014 79.65 62.35 292122 79.75 62.60 789599
May 2014 85.70 61.70 912509 85.95 62.25 2025987
June 2014 127.45 82.00 2097267 127.75 82.90 5343687
July 2014 121.00 99.05 371043 120.95 99.75 732143
August 2014 125.00 95.00 205600 125.00 94.75 614885
September 2014 124.80 98.00 333798 125.00 98.00 1295095
October 2014 118.00 101.50 218936 118.00 99.90 764842
November 2014 167.35 111.00 3075686 167.50 110.05 8641287
December 2014 185.40 141.00 1490669 185.60 141.00 4356752
January 2015 196.50 169.05 1099995 196.50 168.60 2895369
February 2015 188.90 161.50 945291 189.40 154.20 2518662
March 2015 188.00 147.40 848589 188.45 146.00 2147656

xi. Registrar and Share Transfer Agent Bigshare Services Private Limited

E-2 Ansa Industrial Estate

Saki-Vihar Road

Sakinaka Andheri (East)

Mumbai 400072.

Tel: (022) 40430200

Fax: (022) 28475207

Email: investor@bigshareonline.com

xii. Compliance Officer

Ms. Kunjan Trivedi

Company Secretary

501 Silver Metropolis

Western Express Highway

Goregaon (East)

Mumbai 400063.

Tel: (022) 4290 4290

Fax: (022) 4290 4291

Email: investors@zicom.com

xiii. Share Transfer System

Shares lodged for transfer at the Registrar and Transfer Agent address are normallyprocessed within 15 days from the date of lodgement if the documents are clear in allrespects. All requests for dematerialization of securities are processed and theconfirmation is given to the Depositories within 15 days. Senior Executives of the Companyare empowered to approve transfer of shares and other investor related matters. Grievancesreceived from investors and other miscellaneous correspondence on change of addressmandates etc. are processed by the Registrar and Transfer Agent within 7 days.

Pursuant to Clause 47(c) of the Listing Agreement with the Stock Exchangescertificates on half-yearly basis have been issued by a Company Secretary-in-Practicefor due compliance of share certificate issue and transfer formalities by the Company.

A Company Secretary-in-Practice carried out a Reconciliation of Share Capital Audit toreconcile the total admitted capital with NSDL and CDSL and the total issued and listedcapital. The audit confirms that the total issued / paid-up capital is in agreement withthe aggregate of the total number of shares in physical form and the total number ofshares in dematerialised form (held in NSDL and CDSL). It also confirms that whether thede-mat receipts duly lodged are processed and released within the specified period andthat the Register of Members is duly updated.

xiv. Distribution of Shareholding as on March 31 2015

No. of shares Total holders % of total holders Total holding in shares % of total capital
1 - 500 10113 84.14 1342813 6.65
501 - 1000 788 6.56 648350 3.21
1001 - 2000 523 4.35 822243 4.07
2001 - 3000 213 1.77 551213 2.73
3001 - 4000 101 0.84 365996 1.81
4001 - 5000 63 0.52 304385 1.51
5001 - 10000 93 0.78 685307 3.39
10001 - 999999999 125 1.04 15479522 76.63
Total 12019 100.00 20199829 100.00

xv. Shareholding Pattern as on March 31 2015

Category No. of Shares %
Promoters 4237523 20.98
Institutional Investors 226315 1.12
FIIs 387315 1.92
Private Corporate Bodies 2799271 13.85
Indian Public 7100276 35.15
NRIs / OCBs 5256200 26.02
Trust 192929 0.96
Total 20199829 100.00

xvi. Dematerialisation of shares and liquidity as on March 31 2015

Physical shares : 3067007 (15.18%)
De-materialised shares : 17132822 (84.82%)
Total shares : 20199829 (100.00%)

Out of the above de-mat shares 11480306 (67.01%) are held through NationalSecurities Depository Limited and 5652516 (32.99%) are held through Central DepositorySecurities (India) Limited.

Your Company’s Equity Shares are widely held and actively traded on BSE and NSE.

xvii. Transfer of Unclaimed Dividend to Investor Education & Protection Fund (IEPF)

Pursuant to Section 205C of the Companies Act 1956 dividends that are unpaid /unclaimed for a period of seven years from the date they became due for payment arerequired to be transferred by the Company to the Investor Education and Protection Fund(IEPF) administered by the Central Government. Given below are the dates of declaration ofdividend and corresponding last dates when unpaid / unclaimed dividends are due fortransfer to IEPF:

Financial Year Date of Declaration Last Date for claiming dividend
2007-08 12-09-2008 18-10-2015
2008-09 29-08-2009 03-10-2016
2009-10 29-09-2010 03-11-2017
2010-11 15-09-2011 20-10-2018
2011-12 24-08-2012 29-09-2019
2012-13 30-08-2013 04-10-2020
2013-14 05-09-2014 09-11-2021

During the year under review an amount of Rs 196003 pertaining to unpaid dividend forthe financial year 2006-07 has been transferred to IEPF on November 11 2014.

Shareholders who have so far not encashed their dividend demand drafts are requested towrite to the Company / Registrar & Share Transfer Agent to claim the same to avoidtransfer to IEPF. Shareholders are advised that no claims shall lie against IEPF or theCompany for the amounts of dividend so transferred to IEPF.

The details of unpaid and unclaimed dividend lying with the Company as on September 52014 (date of last Annual General Meeting) has been uploaded on Company’s website(www.zicom.com) in accordance with the requirements of relevant Investor Education andProtection Fund (Uploading of information regarding unpaid and unclaimed amounts lyingwith companies) Rules 2012 and the same has also been uploaded on Ministry of CorporateAffairs website www.mca.gov.in.

xviii. Outstanding ADR / GDR / Warrants / any Convertible Instruments

During the year under review the Company did not issue any ADRs / GDRs. No Bonds wereoutstanding as on March 31 2015.

During the year under review on February 10 2015 the Company allotted 1050000Warrants each Warrant carrying an entitlement to subscribe to one equity share of Rs 10each of the Company for cash at a price of Rs 160 per equity share i.e. at a premium of

Rs 150 per equity share to Promoters’ Group Companies on preferential basis inaccordance with SEBI’s Guidelines for Preferential Issue i.e. Chapter VII ofSecurities & Exchange Board of India (Issue of Capital and Disclosure Requirements)Regulations 2009.

The Warrants are valid for a period of eighteen months from the date of theirallotment. If the option to acquire Equity Share underlying the Warrant is not exercisedby the Promoters within the said period or the Promoters have surrendered the Warrants tothe Company before expiry of said period then such Warrants shall stand cancelled and theamount per Warrant as paid by the Promoters towards its face value shall be forfeited.

There are no Stock Options outstanding as on March 31 2015.

xix. Plant Location and Registered Office address

The Company does not have any Plant.

Registered Office address:

501 Silver Metropolis

Western Express Highway Goregaon (East) Mumbai 400063.

xx. Address for correspondence

All correspondence by Members should be made to the Registrar and Transfer Agent orRegistered Office of the Company as stated above. In case of Members holding shares indemat form are requested to intimate change in certain specific personal information likeaddress PAN etc. to their Depository Participant. Others can send their correspondenceto the Registered Office of the Company or communicate to the Company oninvestors@zicom.com.

Other information for correspondence

Telephone No. : (022) 4290 4290
Fax No. : (022) 4290 4291
Website : www.zicom.com

CORPORATE GOVERNANCE VOLUNTARY GUIDELINES 2009

With a view to enhance economic value of corporate enterprises in India and also toenhance value for every stakeholders connected with the Indian corporate world as also tobring corporate governance in India at par with global benchmarks the Ministry ofCorporate Affairs (MCA) had issued Corporate Governance Voluntary Guidelines in December2009.

Your Company being a listed company is already complying with Corporate Governanceguidelines and practices as prescribed under Clause 49 of the Listing Agreement with StockExchanges; and as such it is also in compliance with such of the requirements under theVoluntary Guidelines of MCA which are in consonance with the provisions of the Clause 49.

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.