FOR THE FINANCIAL YEAR 2017-18 Dear Shareholders
Your Directors present the Twenty Fifth Annual Report (the "Report") of theCompany along with the Audited Financial Statements for the year ended March 31 2018.
The Management is pleased to inform the shareholders that your Company has completed 2years of consecutive good performance after the Debt Restructuring Scheme (DRS) presentedto the Lenders during FY 2015-16. Your Company has earned revenue of Rs991.19crores and EBIDTA of Rs156.14 crores for financial year ended March 31 2018 on aconsolidated basis. During the year your Company has made prepayment of Rs97.66 crores toits Lenders out of total debt of Rs468.83 crores. With this pre-payment theCompany has now prepaid 15 months of Principal Debt to its Lenders which represents20.83% of its Outstanding Debt to Lenders. The Company continues to service its Lenders ona regular basis effective from the date of implementation of DRS i.e. from April 1 2016.During the year CRISIL Limited has upgraded the credit rating of the Company from"CRISIL D" to "CRISIL BB/ stable" in respect of the bank loanfacilities. Recently the credit rating has been further upgraded "BBB-/Stable"(Investment Grade as per RBI Circular No. RBI/2017-18/131 dated February 12 2018 onResolution of Stressed Assets Revised Framework'). With a revival in theCompany's health we wish to reinvent ourselves to offer higher value to our stakeholdersand fast pace our growth. While retaining our core values of Innovation Insight andIntegrity our aim is to serve our customers above and beyond their expectations. Tosignal this transformation our brand identity has undergone a makeover to reflect ourinvigorated philosophy. On February 2 2018 your Company has launched new logo pursuantto the re-branding exercise carried out by the Company. Your Company's new brand identityrepresents its ongoing transition into a company with distinctive portfolio of IT Productsand Services that competes in key growth markets. Your Company`s new tagline"Limitless Excellence" aims to represent its passion and zeal to go beyond theexpected and deliver extraordinary levels of performance using combination of evolvedproducts and services exceptional customer engagement and deeper industry expertise. YourCompany has also introduced its new brand "AltirayTM" for theservices portfolio during the year. This new services brand Altiray reflects strengths andcommitment to perform above expectations and enabling our clients to soar high above theirchallenges.
Financial Performance of the Company on Standalone and Consolidated basis:
| ||Rs in crores |
|Particulars ||Standalone ||Consolidated |
| ||2017-18 ||2016-17 ||2017-18 ||2016-17 |
|Total Revenue (I) ||294.72 ||344.87 ||1010.43 ||1055.91 |
|Total Expenses (II) ||381.43 ||253.78 ||930.95 ||953.33 |
|Profit / (Loss) before Tax (I-II) ||(86.71) ||91.09 ||79.48 ||102.58 |
|Tax expense || || || || |
|Current Tax ||- ||- ||7.40 ||5.84 |
|Deferred Tax ||- ||(1.49) ||0.43 ||0.27 |
|Adjustment of tax relating to earlier periods ||- ||0.32 ||0.54 ||2.40 |
|Profit / (Loss) for the year ||(86.71) ||92.26 ||71.11 ||94.07 |
|OTHER COMPREHENSIVE INCOME || || || || |
|A. Other Comprehensive income not to be reclassified to profit and loss in subsequent year: || || || || |
|Remeasurement of gains / (losses) on defined benefit plans ||(0.82) ||4.32 ||0.50 ||7.01 |
|Income tax effect ||- ||(1.49) ||- ||(0.43) |
|Particulars ||Standalone ||Consolidated |
| ||2017-18 ||2016-17 ||2017-18 ||2016-17 |
|B. Other Comprehensive income to be reclassified to profit and loss in subsequent years: ||- ||- ||- ||- |
|OTHER COMPREHENSIVE INCOME FOR THE YEAR NET OF TAX ||(0.82) ||2.83 ||0.50 ||6.58 |
|Total Comprehensive income for the year ||(87.53) ||95.09 ||71.61 ||100.65 |
|Profit for the year attributable to: || || || || |
|Equity holders of the parent ||- ||- ||70.40 ||94.73 |
|Non-controlling interests ||- ||- ||0.71 ||(0.66) |
|Other Comprehensive income for the year attributable to: || || || || |
|Equity holders of the parent ||- ||- ||0.50 ||6.58 |
|Non-controlling interests ||- ||- ||- ||- |
|Total Comprehensive income for the year attributable to: || || || || |
|Equity holders of the parent ||- ||- ||70.90 ||101.31 |
|Non-controlling interests ||- ||- ||0.71 ||(0.66) |
|Earnings per equity share for profit attributable to equity shareholders || || || || |
|Basic EPS ||(0.54) ||0.75 ||0.44 ||0.77 |
|Diluted EPS ||(0.54) ||0.75 ||0.44 ||0.77 |
Standalone sales and other income for FY 2017-18 stood at Rs294.72 crores as againstRs344.87 crores for FY 2016-17. On a consolidated basis sales and other income forFY 2017-18 stood at Rs1010.43 crores as against Rs1055.91 crores for FY 2016-17. Aftermeeting all expenditures though the Company made a total comprehensive income of Rs71.61crores on a consolidated basis there was a loss of Rs 87.53 crores on a standalone basis.
TRANSFER TO RESERVES
There is no amount proposed to be transferred to general reserve this year.
During the year the Company has issued 0.10% Cumulative Non-Convertible RedeemablePreference Shares of face value Rs5/- each ("Class B Preference Shares") to theLenders at par as per the terms of DRS. An amount of Rs9288862 was paid as preferencedividend to Class B Preference Shareholders on preference shares issued upto March 312018. The payment of the abovementioned dividend was made as part of the contractualobligations of the Company with respect to the issue of these preference shares.
The Company has also paid a dividend of Rs395343 as preference dividend as per theterms of issue of 0.01% Cumulative Non-Convertible Redeemable Preference Shares offace value Rs5/- each ("Class A Preference Shares") to Class A PreferenceShareholders for the period from April 1 2012 to April 30 2018.
As per the terms of the Master Restructuring Agreement (MRA) dated March 30 2012entered into by the Company with IDBI Bank Limited the Monitoring Institution and the CDRLenders the Company is prohibited from declaring or paying any dividend on its equityshares without prior approval of its Lenders. In view of this fact your Directors regretto state their inability to recommend any dividend on equity shares for the financial yearended March 31 2018.
Your Company has a comprehensive set of IP based software solutions (20+) coupled witha wide range of IT Services to address the dynamic requirements of a variety of industryverticals including Banking Insurance Capital Markets Asset & Wealth Management(BFSI). The Company also provides solutions for other verticals such as GovernmentManufacturing Distribution Telecom and Healthcare.
The business activities of the Company are broadly divided into two categories viz: ITSolutions and Transaction Services. IT Solutions business comprises of software productsand IT enabled services while the Transaction Services comprise of BPO and KPO services.The Company has a good product portfolio and has dominant presence in fast growingemerging economies. The Product business of the Company has wide base with more than 800active customers who are satisfactorily using the Company's products.
The contribution to the revenue for the year from IT Solutions was 95% and that ofTransaction Services was 5%.
Your Company has presence in 50 countries across six operational geographies viz.South Asia Asia Pacific
(APAC) Middle East and Africa (MEA) Kingdom of Saudi Arabia (KSA) Western Europe(WE) and North America (US). Your Company has marketing network around the worldincluding US WE MEA and APAC. The business of your Company is largely divided intoEmerging Markets and Developed Markets. The share of the Emerging Markets to total revenueof the Company is about 70% while that of Developed Markets is about 30%. For detailedoperations and business performance and analysis kindly refer the Management Discussion& Analysis which forms a part of this Report.
SUBSIDIARIES JOINT VENTURES AND ASSOCIATE COmPANIES
During the year under review 3i Infotech Financial Software Inc a US based step-downsubsidiary of the Company was merged with 3i Infotech Inc another US based step-downsubsidiary of the Company effective December 31 2017. As on March 31 2018 thenumber of subsidiaries are 22 (twenty two).
3i Infotech Software Solutions LLC was incorporated as a step-down subsidiary on May15 2018 to tap business opportunities in Dubai Mainland UAE.
As per the first proviso to Section 129(3) of the Companies Act 2013 (the"Act") read with Rule 5 of Companies (Accounts) Rules 2014 the statementcontaining salient features of the financial statements of subsidiaries/ associatecompanies/joint venture in the prescribed Form AOC-1 is enclosed to the consolidatedfinancial statements. This statement also mentions highlights of performance ofsubsidiaries/associate companies / joint venture and their contribution to theoverall performance of the Company during the year.
Pursuant to the provisions of Section 136 of the Act the financial statements of theCompany consolidated financial statements along with relevant documents and separateaudited accounts in respect of subsidiaries are available on the website of the Company.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS UNDER SECTION 186
Particulars of loans guarantees or investments granted/made during the year are givenunder the notes to standalone financial statements forming part of the Report.
CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
During the year under review all the contracts or arrangements or transactions enteredinto by the Company with related parties referred to in Section 188 of the Act were inthe ordinary course of business and on an arm's length basis. During the year the Companyhas not entered into any contract/arrangement/ transaction with related parties whichcould be considered material in accordance with the policy of the Company on related partytransactions.
Since all related party transactions entered into by the Company were in the ordinarycourse of business and were on an arm's length basis form AOC-2 is not applicable to theCompany.
The Company has in place a Policy on Materiality of Related Party Transactions and aPolicy on dealing with Related Party Transactions. The said policy can be viewed on theCompany's website by accessing the following link:https://www.3i-infotech.com/investors-2/ under "Corporate Governance".
Details regarding related party disclosure are given under the notes to standalonefinancial statements which form part of this Report.
MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY
There have been no material changes and commitments if any affecting the financialposition of the Company which have occurred between the end of the financial year to whichthe financial statements relate and as on the date of this Report.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY REGULATORS
During the year under review no significant and material tribunals impacting the goingconcern status and Company's operation in future.
REPORT ON CORPORATE GOVERNANCE
The Corporate Governance Report along with auditors' certificate thereon in terms ofRegulation 34 of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015("SEBI LODR") read with Schedule V of SEBI LODR is appended herewith as AnnexureI to this Report.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
In terms of provisions of Regulation 34 of SEBI LODR the Management Discussion andAnalysis Report is given under separate section forming part of this Report.
EXTRACT OF ANNUAL RETURN
In terms of the requirements of Section 92 (3) of the Act read with Rule 12 of theCompanies (Management and Administration) Rules 2014 an extract of the Annual Return inthe prescribed form MGT- 9 is appended herewith as Annexure II.
CAPITAL a) Preference Share Capital:
During the year under review as per the terms of DRS the Company had allotted Class BPreference Shares of face value of Rs5/- each at par to its Lenders. Details of theallotments are as follows:
|Date of Allotment ||No. of Class B Preference Shares allotted |
|May 31 2017 ||29761872 |
|September 27 2017 ||78183606 |
|January 15 2018 ||444982211 |
|February 7 2018 ||25638620 |
|March 7 2018 ||3684800 |
|TOTAL ||582251109 |
After taking into account the above allotments the preference share capital of theCompany as on March 31 2018 was Rs7027607980 consisting of 130000000 Class APreference Shares of Rs5/- each and 1275521596 Class B Preference Shares of Rs5/- each.
b) Equity Share Capital:
1) Allotments under Employees Stock Option Schemes (ESOS) :
The Company has not allotted any shares under ESOS during the year.
2) Allotments against conversion of Foreign Currency Convertible Bonds (FCCBs):
During the year the Company has allotted Equity Shares against conversion of FCCBs asper the below mentioned details:
|ISIN of FCCBs ||Value of FCCBs converted (USD) ||Date of allotment ||Number of Equity Shares allotted ||Fixed Foreign Exchange Conversion Rate (in Rs) ||Issue Price (in Rs) ||Premium (in Rs) |
|XS1423751418 ||6034014 ||June 8 2017 ||40021201 ||66.326 ||10 ||- |
|XS0308551166 ||25000 ||August 17 2017 ||6148 ||40.81 ||165.935 ||155.935 |
|XS0769181982 ||345750 ||December 21 2017 ||1064298 ||50.7908 ||16.50 ||6.50 |
|XS1423751418 ||100000 ||March 22 2018 ||530608 ||66.326 ||12.50 ||2.50 |
|XS0769181982 ||3250 ||March 22 2018 ||10004 ||50.7908 ||16.50 ||6.50 |
|Total ||6508014 ||- ||41632259 ||- ||- ||- |
3) Allotments of Equity Shares under the Debt Realignment Scheme (DRS) Package:
During the year under review the Company has allotted 390074516 Equity Shares tosome of the Lenders of the Company including the lenders of the Company's subsidiaries andlenders of facilities guaranteed by the Company and lessors of the Company ("DRSLenders") as per the terms of DRS package the details of which are as follows:
|Date of Allotment ||No. of Shares allotted || |
|April 19 2017 || ||13468574 |
|May 31 2017 || ||48855774 |
|September 27 2017 || ||47084567 |
|January 15 2018 || ||263909361 |
|February 7 2018 || ||14650640 |
|March 7 2018 || ||2105600 |
|TOTAL || ||390074516 |
As a result of the aforesaid allotments the paid-up and issued equity share capital ofthe Company stands at Rs16153581780 as on March 31 2018.
The Company has neither issued equity shares with differential rights as to dividendvoting or otherwise nor any shares (including sweat equity shares) to the employees of theCompany under any Scheme.
EMPLOYEES STOCK OPTION SCHEMES
As per SEBI Circular (CIR/CFD/POLICY CELL/2/2015) dated June 16 2015 relating torequirements specified under the SEBI (Share Based Employee Benefits)Regulations 2014details of the ESOS of the Company are given in Annexure III to this Report.
During the year the Company has not invited/accepted any deposit under Sections 73 and76 of the Act.
DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMP)
During the year under review pursuant to withdrawal of Nomination by IDBI BankLimited Mr. Shantanu Prasad resigned as Nominee Director with effect from January 122018. Further Mr. Gautam Dutta was appointed as Nominee Director (IDBI Bank Limited) onJanuary 12 2018 pursuant to nomination by IDBI Bank Limited. The Directors place onrecord their sincere appreciation towards services rendered by Mr. Shantanu Prasad duringhis tenure as Nominee Director of the Company.
In accordance with Section 152 (6) and other applicable provisions of Companies Act2013 Ms. Sarojini Dikhale (DIN: 02755309) being a Non-Executive Director is liable toretire by rotation at the ensuing Annual General Meeting (AGM) of the Company and beingeligible has offered herself for re-appointment. The Board recommends her re-appointmentat the ensuing AGM for your approval. As stipulated under the Regulation 36 of SEBI LODRa brief resume of the Director proposed to be re-appointed is given in the Noticeconvening the ensuing AGM which is included in the Annual Report 2017-18.
As on the date of this Report the Board of the Company consists of 6 Directors out ofwhich two are Independent Directors two are Nominee Directors one is a Non-ExecutiveDirector and one is an Executive Director.
None of the Independent Directors have had any pecuniary relationship or transactionwith the Company during Financial Year 2017-18 except to the extent of theirdirectorship. None of the Directors or KMP of the Company is related inter-se.
DECLARATION BY INDEPENDENT DIRECTORS
The Company has received declaration from each independent director as per provisionsof SEBI LODR and Section 149 (7) of the Act that he meets the criteria of independencelaid down in Section 149 (6) of the Act.
NUMBER OF MEETINGS OF THE BOARD
Five meetings of the Board of Directors were held during the year. The details of thesame are given in Corporate Governance Report section that forms part of this Report. Theintervening gap between two consecutive Board Meetings did not exceed 120 days.
POLICIES AS PER SEBI LODR
SEBI LODR mandated all Listed Companies to formulate certain policies. The Company hasin place all such policies the list of which is given below:
Whistle Blower Policy;
Policy relating to Remuneration of Directors Key Managerial Personnel and other KeyEmployees;
Corporate Social Responsibility Policy;
Policy for determining Material Subsidiaries;
Policy on Materiality of Related Party Transactions and dealing with Related PartyTransactions;
Policy for Board Diversity and
Policy for Preservation of Documents.
PERFORMANCE EVALUATION OF THE BOARD OF DIRECTORS
In terms of the provisions of the Act and SEBI LODR your Company has laid downcriteria for performance evaluation of Directors and Chairman of the Board and also theevaluation process for the same. Schedule IV of the Act states that the performanceevaluation of Independent Directors shall be done by the entire Board of Directorsexcluding the Director being evaluated. The Company's policy relating to appointment andremuneration of Directors KMPs and other employees including criteria for determiningqualifications positive attributes and independence of a director are covered under theCorporate Governance Report which forms a part of this Report.
It is a practice of the Board of Directors to annually evaluate its own performance andthat of its committees and individual directors. Accordingly the performances of themembers of the Board as a whole and of individual Directors were evaluated at the meetingof the Committee of the Independent Directors and the Board of Directors held on April 232018.
FAMILIARIZATION PROGRAMME FOR INDEPENDENT DIRECTORS
As per provisions of SEBI LODR and the Act the Company has formulated FamiliarizationProgramme for Independent Directors. At the time of appointment of an IndependentDirector the Company issues a formal letter of appointment to an Independent Directoroutlining his/her role function duties responsibilities etc. The terms andconditions for appointment of Independent Directors are also available on the website ofthe Company.
The Board Members are provided with necessary documents/brochures reports and internalpolicies to enable familiarizing them with the Company's procedures and practices.Periodic presentations are made at the Board Meetings on business performance updates ofthe Company global business environment business strategy and risk involved.
As on date of this Report the Board has four committees: i. Audit Committee ii.Nomination and Remuneration Committee iii. Stakeholders' Relationship Committee iv.Corporate Social Responsibility Committee
As per Regulation 21 of SEBI LODR the Board needs to constitute Risk ManagementCommittee wherein majority of the Members of Risk Management Committee should consist ofMembers of Board. This regulation is applicable only to top 100 listed entitiesdetermined on the basis of market capitalization as at the end of the preceding financialyear. Since your Company is not amongst top 100 listed entities your Company has notconstituted a Risk Management Committee.
In line with the provisions of the Act and SEBI LODR the Company has devised andimplemented a vigil mechanism in the form of "Whistle Blower Policy". As perthe Policy the Company has an internal committee comprising of the Head-HR and theCompliance Officer of the Company to address the functioning of the vigil mechanism asmandated by the Act and assist the Audit Committee thereunder.
The detailed information regarding the committees of the Board including compositionof the Audit Committee has been given in the Corporate Governance Report which forms anintegral part of this Report.
CONSOLIDATED FINANCIAL STATEMENTS
The Audited Consolidated Financial Statements presented by the Company include thefinancial results of its subsidiary companies associates and joint ventures and form partof this Report. The audited consolidated financial statements have been prepared inaccordance with the Indian Accounting Standards (referred to as "Ind AS").
INTERNAL FINANCIAL CONTROLS SYSTEMS AND THEIR ADEQUACY
Your Company has implemented adequate procedures and internal controls which providereasonable assurance regarding reliability of financial reporting and preparation offinancial statements. Your Company also ensures that internal controls are operatingeffectively.
M/s. GMJ &Co. Chartered Accountants were appointed as the Statutory Auditors ofthe Company at the 23rd Annual General Meeting held in 2016 for a termof 5 years subject to ratification of their appointment at every Annual General Meeting.
The Audit Committee and the Board recommend ratification of appointment of M/s. GMJ& Co. Accountants as Statutory Auditors of the Company till the conclusion of 26thAnnual General Meeting of the Company. The Company has received letter from statutoryauditors that their re-appointment if made would be within limits as prescribed underSection 141 (3)(g) of Companies Act 2013 and they are not disqualified forre-appointment.
The Auditor`s Report does not contain any qualifications reservations or adverseremarks. However there is an emphasis of matter in the Auditor`s Report on standalonefinancial statements for the year ended March 31 2018 with respect to the remunerationpaid to the Managing Director and Global CEO of the Company during financial year 2016-17.Your Directors would like to inform you that the remuneration paid / provided to theManaging
Director and Global CEO for the financial year 2016-17 has been approved by both theshareholders as well as lenders of the Company. This remuneration was in excess of thelimits prescribed under the erstwhile Section 197 of the Companies Act 2013 and wassubject to the approval of the Ministry of Corporate Affairs (MCA). The managementhad made an application to MCA for the necessary approval. Although MCA has grantedapproval only for a part of the amount the management based on the opinion obtained fromour legal counsel is of the view that once the amended Section 197 of the Companies(Amendment) Act 2017 is notified the Company would be in compliance with the law.
CONSERVATION OF ENERGY
Although the operations of the Company are not energy intensive the management ishighly conscious of the criticality of the conservation of energy at all operationallevels. The requirement of disclosure of particulars with respect to conservation ofenergy as prescribed in Section 134(3)(m) of the Act read with Rule 8(3) of the Companies(Accounts) Rules 2014 is not applicable to the Company and hence are not provided.
TECHNOLOGY ABSORPTION ADOPTION AND INNOVATION
The Company continues to use the latest technologies for improving the productivity andquality of its services and products.
During the year your Company has taken the following technology initiatives:
Information Security Awareness programmes;
Strengthened its IPRs through technology innovation and appropriate security controls;
Improved utilization and delivery productivity by use of LEAN IT techniques for projectdelivery and
Partnerships with major technology providers and publishers for win-win relationshipsand go-to-market strategies.
RESEARCH AND DEVELOPMENT (R & D)
The solutions offered by the Company for various market segments are continuouslydeveloped and upgraded through the Global Development Centers (GDCs).
The GDCs function as the product research and development arm of the Company and focuson developing and expanding the Company's products and IPRs. Besides this the Company isalso in the process of upgrading its varied product lines to standard and latesttechnological platforms.
With a focus to further enhance the Company's software products i.e. its IntellectualProperty based on market needs the GDCs work in line with the Company's strategy forgrowth.
Expenditure on R & D
| || ||Rs in crores |
|Particulars ||2017-18 ||2016-17 |
|Revenue Expenditure ||18.38 ||9.87 |
|Capital Expenditure ||- ||- |
|Total ||18.38 ||9.87 |
|Total R&D expenditure as a percentage of standalone revenue ||7.74% ||3.54% |
The Company is committed to providing innovative and high quality products and servicesthat meet or exceed customer expectations.
Maintaining a quality focus on continuous improvement to our Products Process andServices and
Process adherence and governance ensuring lower defect & On Time delivery.
The Company's Quality Management System (QMS) addresses process required for entireSoftware Development Life Cycle (SDLC) and Project Management Life Cycle (PMLC) supportedwith industry standard templates and guidelines to ensure disciplined project executionthereby transforming business from taking corrective & preventive measures to thestate of predicting outcomes. This framework is designed based on the CMMi Processframework to enhance productivity and to reduce inefficiencies.
The Company has achieved CMMi Level 3 certification to meet the Company's commitmenttowards quality & business process with further plans to extend the certification toCMMi Level 5.
FOREIGN EXCHANGE EARNINGS AND OUTGO
a) Activities relating to exports initiatives taken to increase exports developmentof new export markets for products and services and export plans
More than 28.82% of the revenue of the Company is derived from exports.
b) Foreign Export earnings and expenditure
During the year 2017-18 the expenditure in foreign currencies amounted to Rs6.13crores on account of cost of professional charges cost of outsourced services and boughtout items travelling and other expenses and interest (excluding expenditure incurred byUAE Branch). During the same period the Company earned an amount equivalent to Rs68.46crores in foreign currencies as income from its operations abroad (excluding income fromUAE Branch).
The Company has continued to improve the quality of Human Resource. The key facet hasbeen better levels of productivity as compared to earlier years which has contributed inoperating financial parameters showing a strong uplift. Regular interactions and careerenhancements by way of bigger roles to talented employees have helped in strengthening theconfidence of the employees in the tough financial scenario of the Company. talentpipeline is looking healthy though attrition and retention remains a challenge for theindustry and more so for the Company.
Your Company will continue to focus and build the human potential which would help inimproving operating parameters in the coming year.
In terms of the provisions of Section 197(12) of the Act read with Rules 5(2) and 5(3)of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 astatement showing the names and other particulars of the employees drawing remuneration inexcess of the limits set out in the said rules is provided in a separate annexure formingpart of this Report. Having regard to the provisions of the first proviso to Section136(1) of the
Act the Annual Report excluding the aforesaid information is being sent to the membersof the Company. In terms of Section 136 the said annexure is open for inspection at theRegistered Office of the Company. Any shareholder interested in obtaining a copy of thesame may write to the Company Secretary.
Disclosures pertaining to the remuneration and other details as required under Section197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 are provided in this Report as Annexure IV.
Prevention of Sexual Harassment at Workplace
The Company has in place a policy aiming at prevention of sexual harassment at allworkplaces of the Company in line with the requirements of The Sexual Harassment of Womenat the Workplace (Prevention Prohibition and Redressal) Act 2013 and the rulesthereunder. All employees (permanent contractual temporary trainees) are covered underthis Policy. An internal Complaint Committee has been set up in the Company to considerand redress complaints received with respect to sexual harassment. During the year underreview the Complaint Committee had received one complaint of the nature covered under thesaid Act and has been resolved. There are no pending cases.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
In compliance with Section 135 of the Act read with the Companies (Corporate SocialResponsibility Policy) Rules 2014 the Company has constituted a CSR Committee. A briefoutline of the CSR policy of the Company and the statutory disclosures with respect to CSRCommittee and an Annual Report on CSR for FY 2017-18 as required under Rule 8 (1) of theCSR Rules are set out in Annexure V of this Report. The CSR Policy as recommended by CSRCommittee and as approved by the Board is available on the website of the Company.
During the year the Company has not spent any amount on CSR activities in view oflosses incurred on an average during the preceding three financial years.
SECRETARIAL AUDITOR'S REPORT
Pursuant to the provisions of Section 204 of the Act and Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 the Company had appointed M/s. BNP& Associates Practicing Company Secretaries to undertake the Secretarial Audit ofthe Company for the financial year 2017-18. The Secretarial
Audit Report is appended as Annexure VI to this Report. The Secretarial Audit Reportdoes not contain any qualifications reservations or adverse remarks.
Disclosures required under Regulations of SEBI LODR are shown under the CorporateGovernance Report.
The Corporate Governance Report along with auditor's certificate thereon and theManagement Discussion and Analysis form part of this Report.
The Company will continue to technologically upgrade its products and concentrate onthe Software Products IT Services and IT enabled Services for its growth. The businessoutlook and the initiatives proposed by the management to address its financial risks havebeen discussed in detail in the Management Discussion and Analysis which forms a part ofthis Report.
FORWARD LOOKING STATEMENTS
This Report along with its annexures and Management Discussion & Analysis containsforward-looking statements that involve risks and uncertainties. When used in this Reportthe words anticipate' believe' estimate' expect'intend' will' and other similar expressions as they relate to the Companyand/or its businesses are intended to identify such forward looking statements. TheCompany undertakes no obligation to publicly update or revise any forward- lookingstatements whether as a result of new information future events or otherwise. Actualresults performances or achievements could differ materially from those expressed orimplied in such forward-looking statements. Readers are cautioned not to place unduereliance on these forward-looking statements that speak only as of their dates. ThisReport should be read in conjunction with the financial statements included herein and thenotes thereto.
DIRECTORS' RESPONSIBILITY STATEMENT
As required under Section 134(5) of the Act your Directors hereby confirm that:
a) in preparation of the annual accounts the applicable accounting standards have beenfollowed along with proper explanation relating to material departures;
b) they have selected such accounting policies and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fairview of the state of affairs of the Company as at March 31 2018 and of the loss of theCompany for the financial year ended on that date;
c) they 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) they have prepared the annual accounts on a going concern basis;
e) to be followed by the Company and that such internal financial they have laid downinternal financial controls are adequate and are operating effectively and
f) they have devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems are adequate and are operating effectively.
Based on the reviews of internal statutory and secretarial auditors externalconsultants the management and respective committees of the Board the Board is of theopinion that the Company's system of internal financial controls was adequate and theoperating effectiveness of such controls was satisfactory during the financial year2017-18.
The Directors are thankful to the Members for their confidenceand continued support.The Directors are grateful to the Central and State Government Stock ExchangesSecurities & Exchange Board of India Reserve Bank of India Customs and othergovernment authorities Lenders FCCB holders and last but not the least its trustedclients for their continued support.
The Directors would like to express their gratitude for the unstinted support andguidance received from alliance partners and vendors.
The Directors would also like to express their sincere thanks and appreciation to allthe employees for their commendable team work and professionalism.
|For and on behalf of the Board || |
|Sd/- ||Sd/- |
|Ashok Shah ||Padmanabhan Iyer |
|Chairman ||Managing Director & Global CEO |
|June 29 2018 at mumbai || |