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8K Miles Software Services Ltd.

BSE: 512161 Sector: IT
NSE: 8KMILES ISIN Code: INE650K01021
BSE 00:00 | 20 Apr 8K Miles Software Services Ltd
NSE 05:30 | 01 Jan 8K Miles Software Services Ltd
OPEN 22.85
PREVIOUS CLOSE 23.30
VOLUME 77899
52-Week high 126.80
52-Week low 22.85
P/E 17.92
Mkt Cap.(Rs cr) 71
Buy Price 23.30
Buy Qty 600.00
Sell Price 23.30
Sell Qty 500.00
OPEN 22.85
CLOSE 23.30
VOLUME 77899
52-Week high 126.80
52-Week low 22.85
P/E 17.92
Mkt Cap.(Rs cr) 71
Buy Price 23.30
Buy Qty 600.00
Sell Price 23.30
Sell Qty 500.00

8K Miles Software Services Ltd. (8KMILES) - Director Report


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Company director report

The Board of Directors of 8K Miles Software Services Limited have pleasure inpresenting the Thirty Fourth Annual Report on the business & operations for the yearended March 31 2019 along with the Audited Financial Statements for the year.

Financial Performance

The Financial performance of the Company for the year ended 31st March 2019 & 31stMarch 2018 is summarized below.

(Amount Rs. in Lakhs)

Particulars

Consolidated

Standalone

FY 19 FY 18 FY 19 FY 18
Revenue 84219.15 84923.87 5694.44 5056.52
Earnings Before Interest & Depreciation 17765.20 30087.02 2366.76 1560.76
Interest 1162.49 971.49 969.66 755.42
Depreciation and Amortization 6959.83 2518.68 34.05 83.87
Profit Before Tax (PBT) 9642.88 26596.85 1363.05 721.47
Profit After Tax (PAT) before Minority Interest 7982.49 20541.31 980.16 498.67
Profit After Tax (PAT) after Minority Interest 6871.77 17161.62 980.16 498.67

Financial Perspective (Consolidated)

On consolidated basis revenue for the year is Rs 84219.15 lakhs signifying a decreaseby 0.83% in Rupee terms. EBITDA margin for the current year is 20.89 % as compared to35.08 % in previous year. Profit After Tax (PAT) after Minority Interest has decreased by59.96 % to Rs.6871.77 Lakhs as compared to Rs.17161.62 Lakhs in the previous year. Totalemployee benefit expenses have increased by 23.33%. However Employee benefits expenses asa percentage to revenue has decreased by only 6.76% on Revenue.

Highlights of performance are discussed in detail in the Management Discussion andAnalysis Report attached as Annexure D to this Report.

Share Capital

We have only one class of shares - equity shares of par value Rs.5 each. The authorizedshare capital as at March 31 2019 was Rs.3000 Lakhs divided into 600 Lakhs Equity sharesof Rs.5 each. The paid-up share capital as at March 31 2019 was Rs. 1525.88 lakhsdivided into 30517605 equity shares of Rs.5 each.

Dividend

Your company is exploring new business opportunities therefore it is necessary toconserve the funds to meet these investment opportunities. Thus your Board has notrecommended any dividend for the financial year 2018-19.

Transfer to Reserves

Your Company does not propose to transfer amounts to the general reserve out of theamounts available for appropriation and an amount of Rs.6871.77 Lakhs is proposed to beretained in the profit and loss account.

Public Deposits

Your Company has not accepted any deposits within the meaning of provisions of ChapterV of the Act read with the Companies (Acceptance of Deposits) Rules 2014 for the yearended March 31 2019.

Transfer of Unclaimed Dividend to Investor Education and Protection Fund

There was no amount required to be transferred to Investor Education and ProtectionFund during the year.

Material changes and commitment if any affecting the financial position of the company

There are no material changes and commitments affecting the financial position of theCompany between the end of financial year and the date of this Report.

Particulars of Loans Guarantees or Investments

Loans guarantees and investments covered under Section 186 of the Act form part of thenotes to the financial statements provided in this Annual Report.

Board and Committee Meetings

The Board met seven times during the Financial Year 201819. The details regarding theboard meetings and committee meetings are given separately in the Corporate GovernanceReport as Annexure B to this report. The gap intervening between two meetings ofthe board is within the stipulated time frame prescribed in the Companies Act 2013 andSEBI (LODR) Regulations 2015.

Independent Directors

All Independent Directors hold office for a period of five years and are not liable toretire by rotation. The company has received declarations from all the IndependentDirectors of the company confirming that they meet the criteria of independence asprescribed under Section 149 (6) of the Companies Act 2013 and Regulation 16 (1) (b) ofthe SEBI (LODR) Regulations 2015. The terms of appointment of Independent Directors areavailable in the website of the company.

https://8kmiles.com/Investor/Policies/FamilirizationprogramforIndependentDirectors.pdf

During the year Mrs. Padmini Ravichandran an Independent Director considering therich experience in the field of promotion and strategy planning the Board of Directorsrequested to take part in active role and advise in the area of Marketing and promotionalactivities and to strategize business planning for the growth of the Company as and whenrequired. Considering this Board requested her for change in category from IndependentDirector to Non-Executive NonIndependent Director w.e.f 13th February 2019.

There has been a change in category of Directorship of Mr. Gurumurthi Jayaraman fromIndependent Director to Nonexecutive Non- Independent Director of the Company and w.e.f6th September 2019.

Separate Meeting of Independent Directors

During the year a separate meeting of Independent Directors was held on 13th February2019. The Independent Directors actively participated and provided guidance to the Companyin all its spheres.

Nomination and Remuneration Policy

The Nomination and Remuneration Committee of the Company reviews the composition ofboard to ensure that there is appropriate mix of talent qualification experience anddiversity to serve the interests of the shareholders of the Company.

Pursuant to Section 178 of the Companies Act 2013 the Remuneration policy has beenformulated to govern the terms of appointment and remuneration of Directors of theCompany. The policy ensures that the remuneration paid is sufficient to retain andmotivate the Directors of the company. The Remuneration policy is available in the websiteof the Company.

https://8kmiles.com/Investor/Policies/Remunerationpolicy.pdf

Subsidiary Companies

1) 8K Miles Software Services Inc. USA

(i) Nexage Technologies USA Inc

(ii) Cornerstone Advisors Inc. USA

2) 8K Miles Software Services FZE. UAE

3) 8K Miles Health Cloud Inc. USA (i) Serj Solutions Inc. USA

4) Mentor Minds Solutions and Services Inc. USA

A statement under Section 129 (3) of the Companies Act 2013 in Form AOC-1 is attachedas Annexure F to the Directors Report.

Consolidated Accounts

The Consolidated financial statements of the Company are prepared in accordance withthe provisions of Section 129 of Companies Act 2013 read with Companies (Accounts) Rules2014 and Regulation 33 of SEBI (LODR) Regulations 2015.

The audited consolidated financial statements together with Auditors report forms partof the Annual report.

Conservation of Energy

a) Company ensures that the operations are conducted in the manner whereby optimumutilisation and maximum possible savings of energy is achieved.

b) No specific investment has been made in reduction in energy consumption.

c) As the impact of measures taken for conservation and optimum utilisation of energyare not quantitative its impact on cost cannot be stated accurately.

d) Since the Company does not fall under the list of industries which should furnishthis information in Form A annexed to the aforesaid Rules the question of furnishing thesame does not arise.

Technology Absorption:

The Company continues to innovate develop adopt and use the latest technologies toimprove the productivity and quality of its services. The Company's core business demandsinnovation & adoption of emerging technologies to stay ahead of competition. TheCompany has made significant investments in area of Platforms/Tools/Framework to reducethe Cloud transformation time for our customers while staying ahead of Competition.

The Company has taken following initiatives during the year to improve the productivityand quality of its services:

• Developed Patient-centric Health Exchange platform targeting to have Patient asthe central and primary focus on the Blockchain technology. This will enable the platformto represent Patient's medical history effectively which is the foundation for Healthcareand Health Information Exchange. Such Exchange can be integrated with any EHR/ EMRsolutions such as EPIC Cerner and Meditech thus not impacting the way hospitals runtoday while enabled Patients to have direct access to his/her own medical records ontheir mobile phones and tables. This not only ensures transparency but also enable thepatients share the necessary medical records information with other Providers foreffective continuation or validation of care.

• Integrating with Payers (Insurance companies) would extend Digital Experience ofthe Patients so the Exchange becomes a primary point of interaction as it would be able toaddress Insurance related capabilities such as Viewing EOBs (Explanation of Benefits)Managing Claims Paying Copays/Deductibles and so on. Having those capabilities on top ofPublic Cloud means not only an effective PaaS (Platform as a Service) solution but alsomakes it possible to provide Big Data Analytics and Artificial Intelligence which will bevery valuable for Pharma and Medical research.

• Launched numerous Bots over our flagship CloudEz platform startedDevops-as-a-service to differentiate ourselves in the managed services marketplace;enhanced Multi-Domain Identity Services Platform (MISP) to help Cloud providers expandSoftware-as-a-Service offerings with Single Sign-on with hundreds of additional SaaSplatforms. A new EzMFA (Multi Factor Authentication) offering on the cloud was alsolaunched. DataEz an 8K Miles Data Lake Platform-as-a-Service was launched along withAnalyticsEz which is our Data Analytics Plat- form-as-a-Service.

Foreign Exchange Earnings and Outgo (Rs.in Lakhs)

Particulars 2018-19
Earnings in Foreign Exchange 4556.38
Foreign Exchange Outflow 773.75

INTERNAL FINANCIAL CONTROLS

In accordance with Section 134(5)(e) of the Companies Act 2013 the Company hasInternal Financial Controls Policy by means of Policies and Procedures commensurate withthe size and nature of its operations and pertaining to financial reporting. In accordancewith Rule 8(5)(viii) of Companies (Accounts) Rules 2014 it is hereby confirmed that theInternal Financials Controls are adequate with reference to the financial statements.

Other Laws:

Disclosure as required under Section 22 of Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013

The Company has in place a Policy on Prevention of Sexual Harassment (POSH) in linewith the requirements of the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013. Frequent communication of this policy is done inassimilation programs and at regular intervals.

Pursuant to Rule 8(5) (x) of Companies Act (Accounts) Rules 2014 the Company hascomplied with the provisions relating to the constitution of Internal ComplaintsCommittee. During the year under review there were no complaints received by theCommittee.

Appointment of Directors

Mrs. Padmini Ravichandran Director retires by rotation at the forthcoming AGM andbeing eligible offers herself for reappointment. The resolution seeking approval of themembers for the re-appointment of Mrs. Padmini Ravichandran has been incorporated in theNotice of the AGM of the company.

Mr. Raghunathan Aravamuthan was appointed as an Additional Director (IndependentCategory) with effect from 6th September 2019 for a period of 5 years subject to approvalof members at the forthcoming AGM.

There has been a change in category of Directorship of Mr. Gurumurthi Jayaraman fromIndependent Director to Nonexecutive Non- Independent Director of the Company and w.e.f2nd November 2019 Mr. R.S. Ramani and Mr. Gurumurthi Jayaraman resigned from office ofdirectorship of the Company.

Particulars of Employees

Disclosure pertaining to the remuneration and other details as required under Section197(12) of the Act and the Rules framed thereunder is enclosed as Annexure A to theBoards Report.

Corporate Governance Report

Pursuant to Regulation 34 (3) and Schedule V of SEBI (LODR) Regulations 2015 theCorporate Governance Report forms an integral part of this Report.

A detailed report on Corporate Governance is available as a separate section in thisAnnual Report as Annexure B to this report.

A Certificate from the Practising Company Secretary regarding compliance with therequirements of Corporate Governance attached as Annexure C to this report asstipulated in SEBI (LODR) Regulations 2015.

The Chief Executive Officer & Managing Director/Chief Financial Officer (CEO/CFO)certification as required under the SEBI Listing Regulations is attached as Annexure E tothis report.

Secretarial Audit

Pursuant to provisions of section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the company hasappointed M/s. P Sriram & Associates Practising Company Secretaries to undertake theSecretarial Audit of the Company for the year ended March 31 2019.

The Secretarial Audit report forms part of the Annual Report attached as Annexure H tothis report.

Explanation to Observations in the Secretarial Auditor's Report:

S.NO Particulars Response
1. The company has entered into certain Related Party Transactions without taking prior approval of the Audit Committee and Board as required under SEBI (Listing Obligations and Disclosure) Requirements (LODR). Going forward the company will take suitable steps to obtain prior approval.
2. The Company had granted loans & has made investments to its subsidiary after taking approval of the board of directors as required u/s.179 of the Companies Act 2013 but the filing of the resolution pursuant to sec.117 of the Companies Act 2013 has not been complied with. The company is in the process of making an application for the condonation of delay and for filing the aforesaid form with Roc. The Company is in the process of making an application for the condonation of delay and for filing the aforesaid form with ROC and such delay was due to inadvertence.
3. The consolidated accounts for the year 2017-18 have been approved by the Board of Directors belatedly in the meeting held on 17th July 2018. Being the first year of IND AS adoption the company declared Consolidated results belatedly and the delay was intimated to stock exchanges well in advance.
4. The company has not spent the CSR amount as required to be spent during the year under review as the committee was formed only on 13th February 2019. The CSR Committee was formed during the year and the company is looking for suitable and viable projects to spend the amount.
5. The company is yet to file IEPF-2 form relating unclaimed dividend declared in the Annual General Meeting held on 30th September 2017 The delay was due to inadvertence. The Company has taken sufficient precautions not to repeat such instances in the future.
6. Mr. Gurumurthy Jayraman and Ms. Padmini Ravichandran who were the Independent Directors redesignated as Non-Executive Non Independent Directors of the Company during the year under review consequent to the observations made by the statutory auditors on appointment of their relatives in the company/overseas subsidiary post their appointment as employee/consultant. Since their appointment as an independent director presupposed the employment of such relatives they shall not be disqualified to be an Independent Director U/s.149 of the Act.
7. The Boards' report was signed by Managing Director of the Company as against the requirement of signing by the Managing Director and other director as contemplated U/s.134 of the Act. The Company missed out inadvertently.
8. There were certain lapses in compliance with Secretarial Standards. Inadvertently the Company missed to follow certain minor secretarial standards and the Board assures that the same will be taken care in the forthcoming years.
9. During the year under review it was observed that there were certain non-compliance in terms of disclosures to be made to the Committees & Board as contemplated under SEBI (LODR] Regulations 2015. Inadvertently the Company missed to follow certain minor secretarial standards and the Board assures that the same will be taken care in the forthcoming years.
10. The company had re-appointed the Managing Director who is a Non-resident Indian on 30th September 2017 which required the approval of the Central Government and during the year under review. The Company had filed the requisite form seeking the approval of the Central Government which was though not resubmitted with clarification within time frame this has now been submitted afresh on 2nd November 2019.
11. The Company had made intimations to Stock Exchanges under SEBI (SAST) Regulation 2011 and SEBI (PIT) Regulation2015 on Pledge and sale of shares of the Promoter belatedly. The Company will comply & adhere to all regulations within the timelines in the forthcoming years.
12. The company has not filed form ODI with Reserve Bank of India thorough its Authorized dealers with respect to guarantees given on behalf of its subsidiary 8K Miles Software Services Inc. to Columbia Bank. The shareholders' resolution passed during the AGM (under section 186 of Companies Act 2013) in the year 2015. The minutes of the Board of Directors meeting approving such corporate guarantee has been provided and the necessary intimation in the prescribed format to AD bank is in progress.

Secretarial Standards

The Company has complied with the applicable Secretarial Standards SS-1 on meetings ofDirectors and SS -2 on General Meetings issued by the Institute of Company Secretaries ofIndia as per Section 118(10) of the Companies Act 2013.

Extract of Annual Return

Pursuant to Section 92(3) of Companies Act 2013 an extract of Annual Return in formMGT 9 as on 31st March 2019 is attached as Annexure I to this report.

Related Party Transactions

During the Financial Year ended 31st March 2019 all the contracts or arrangements ortransactions entered into by the Company with the Related Parties were in the ordinarycourse of business and on an arms' length basis and were in compliance with the applicableprovisions of the Companies Act 2013 and the SEBI (Listing Obligations & DisclosureRequirements) Regulations 2015.

Further the Company has not entered into any contract or arrangement or transactionwith the Related Parties which could be considered material in accordance with the Policyof the Company on materiality of Related Party Transactions.

The details of the transactions with related parties are provided in the financialstatements. Policy on Related Party transactions are available in the website.

https://8kmiles.com/Investor/Policies/PolicyonRelatedpartytransactions.pdf

The details of the related party transactions as required under the Companies Act 2013and rules made thereunder are attached in Form AOC-2 as Annexure G.

Corporate Social Responsibility Initiatives

Corporate Social Responsibility (CSR) activities have been embedded in the value systemof the Company. The Company continues to be actively engaged in CSR initiatives fordevelopment of the society through partnerships and continued to focus on to helpinglesser privileged communities in areas like education health & hygiene culture &heritage and actively participated in other welfare projects.

The provisions of Section 135 of the Companies Act 2013 became applicable to theCompany with effect from 1st April 2018. Accordingly the Board of Directors of theCompany at their meeting held on 13th February 2019 constituted the CSR Committee thedetails of which are provided in the Corporate Governance report.

Based on the recommendation by the CSR Committee the Board has approved theprojects/programs to be undertaken as CSR activities for a sum of Rs. 838189 during thefinancial year 2018-19. The Company is in the process of identifying the suitable andviable projects and ensure the objective of making a positive contribution to societythrough effective impact and sustainable development program.

Code of Business Conduct and Ethics

The Board of Directors has approved a Code of Conduct and Ethics in terms of ScheduleIV of Companies Act 2013 and Listing Agreement. All the Board Members and the SeniorManagement personnel have confirmed compliance with the Code for the year ended March 312019. The annual report contains a declaration to this effect signed by the ManagingDirector.

Vigil Mechanism / Whistle Blower Policy

Pursuant to the provisions of Section 177(9) of the Act read with Rule 7 of theCompanies (Meetings of Board and its powers) Rules 2014 and Regulation 22 of the SEBIListing Regulations The Company's vigil mechanism allows Directors and employees toreport their concerns anonymously about unethical behavior actual/suspected fraudviolation of Code of Conduct/ business ethics. The vigil mechanism provides adequatesafeguards against victimization of Directors and Employees who avail this mechanism. TheCompany has established a Whistle Blower Policy and the same was hosted on the website ofthe Company.

Your Company hereby affirms that no Director/Employee has been denied access to theChairman of the Audit Committee and that no complaints were received during the year.

https://8kmiles.com/Investor/Policies/WhistleBlowerPolicy.pdf

Details of Significant and Material orders passed by the Regulators or Courts ortribunals.

There are no significant material orders passed by the regulators or courts ortribunals which would impact the going concern status of the Company.

Evaluation of Board's Performance

The board has carried out an evaluation ofits own performance and that of itsdirectors individually. The manner in which the evaluation has been carried out isexplained in the Corporate Governance Report. Detailed Note on the composition of theBoard and its committees are provided in the Corporate Governance Report.

Reporting of Fraud

For the year under review the statutory auditors have reported instances of suspectedfraud committed against the Company by its officers or employees and reported the same tothe Central Government as specified under Section 143(12) of Companies Act 2013. TheBoard has taken cognizance of the suspected fraud and strengthening the internal controlsystems and appropriate response has been annexed to Auditors report

Directors' Responsibility Statement

In terms of Section 134 (5) of the Companies Act 2013 the Board of directors to thebest of their knowledge and ability confirm:

i) That in the preparation of the annual accounts for the financial year ended 31stMarch 2019 the applicable accounting standards had been followed.

ii) The directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that were reasonable and prudent so as to give a true andfair view of the state of affairs of the Company at the end of the financial year 31stMarch 2019 and of the profit or loss of the Company for the year under review.

iii) The directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of this Act for safeguardingthe assets of the Company and for preventing and detecting fraud and other irregularities.

iv) The directors have prepared the annual accounts on a going concern basis.

v) The directors had laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively.

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

Acknowledgment and Appreciation

The Directors wish to place on record their appreciation for the committed service ofall employees at all levels.

The Directors take this opportunity to thank the Shareholders Financial InstitutionsBanks Customers Suppliers and Regulatory & Governmental Authorities for theircontinued support to the Company.

Cautionary Statement

The Directors' Report & Management Discussion and Analysis contains forward-lookingstatements which may be identified by the use of words in that direction or connoting thesame.

All statements that address expectations or projections about the future including butnot limited to statements about your Company's strategy for growth product developmentmarket positions expenditures and financial results are forward looking statements.

Your Company's actual results performance & achievements could thus differmaterially from those projected in such forward-looking statements. The Company assumes noresponsibility to publicly amend modify or revise any forward-looking statements on thebasis of any subsequent development information or events.

For and on behalf of the Board of Directors

Sd/- Sd/-
Suresh Venkatachari Dinesh Raja Punniamurthy
Managing Director Director
DIN: 00365522 DIN: 03622140
Place : Chennai
Date : 2 November 2019