IntraSoft Technologies Limited
We are pleased to present the Twenty Fourth Annual Report of IntraSoft TechnologiesLimited ("the Company") together with the Audited Financial Statements for thefinancial year ended 31 March 2019.
Financial Statements & Results
a. Financial Results:
The consolidated and standalone performance during the year ended 31 March 2019 ascompared to the previous financial year is summarized below:
|Particulars || |
Amount (Rs in Lakhs)
| ||2018-19 ||2017-18 |
|Total Income ||84151.60 ||117497.66 |
|Profit before Interest and Depreciation ||986.07 ||2414.36 |
|Less: Finance Cost ||497.95 ||264.33 |
|Less: Depreciation ||176.19 ||195.57 |
|Profit before Tax ||311.93 ||1954.46 |
|Less : Provision for Income Tax ||(254.52) ||581.31 |
|Profit after Tax ||566.45 ||1373.15 |
On Standalone basis Total Income of the Company recorded at Rs 1376.80 Lacs in FY2018-19 against Rs 1533.53 Lacs in FY 2017-18. EBITDA is recorded at Rs 338.33 Lacs in FY2018-19 against Rs 270.53 Lacs in FY 2017-18. PBT for the financial year under review isrecorded at Rs 196.37 Lacs against Rs 119.90 Lacs in FY 2017-18. The net profit for thefinancial year under review is Rs 163.89 Lacs as compared to Rs 125.02 Lacs of theprevious financial year.
The Company and its subsidiaries achieved an Operating Cash Flow of Rs 1596.09 Lacs inFY 2018-19 as compared to H(5456.14) Lacs in the previous financial year. ConsolidatedTotal Income was Rs 84151.60 Lacs as compared to Rs 117497.66 Lacs. Consolidated NetProfit was Rs 566.45 Lacs as compared to Rs 1373.15 Lacs.
The consistent cash flow performance is attributable to the changes that our E-Commercedivision underwent this year. On the operational front we used this year to incorporateall our data and learnings. The results being our Delivery Engine and MarketplaceExpertise which deliver strong value to our brand-partners.
On the financial front we saw all this materialise into terms of trade thatestablished our cash flow consistency as we outperformed YoY across all four quarters. Wesaw an increase in Accounts Payable Days from 12.90 to 15.30. Long-term Debt fell from Rs7946.77 Lacs to Rs 6937.63 Lacs.
We believe that this working capital efficiency would make growth sustainable in thecoming years and deliver strong value to you year after year.
There was no change in nature of the business of the Company during the year underreview.
c. Performance of Subsidiaries Associates and Joint Venture Companies
The Company has as on 31 March 2019 three wholly owned subsidiaries and two step downsubsidiaries viz. 123Greetings. com Inc (USA) IntraSoft Ventures Pte. Ltd (Singapore)& One Two Three Greetings (India) Private Limited (India) wholly owned subsidiaries123Stores Inc (USA) wholly owned subsidiary of IntraSoft Ventures Pte. Ltd (Singapore)and 123Stores E Commerce Private Limited (India) wholly owned subsidiary of 123StoresInc. The entire group focuses on the E-Commerce business by consolidating all operationsrelated to E-Commerce and online greeting activities to achieve financial and operationalefficiencies.
Apart from the information provided in the foregoing paragraph there was no Companieswhich have become or ceased to be subsidiaries associates and joint venture companyduring the financial year under review.
In accordance with Section 129 of the Companies Act 2013 consolidated financialstatements of the Company along with its subsidiaries have been prepared which forms partof this Annual Report. Further the performance and financial position of each of thesubsidiaries for the year ended 31 March 2019 is attached and marked as Annexure I(FormAOC-1) and forms part of this Report.
The Board of Directors of the Company has recommended a final dividend of Rs 2/- (20%)(previous year Rs 2/- per equity share) per equity share of face value of Rs 10/- for thefinancial year 2018-19 which if approved would absorb Rs 355.20 Lacs including dividenddistribution tax of Rs 60.56 Lacs (Previous year Rs 355.20 Lacs including dividenddistribution tax of Rs 60.56 Lacs ).
There was no Interim Dividend declared by the Company during the financial year.
Dividend Distribution policy is not applicable to the Company.
b. Amount and shares transferred to IEPF with details of Nodal officer
In terms of the Investor Education and Protection Fund Authority (Accounting AuditTransfer and Refund) Second Amendment Rules 2017 the Company has transferred 582 sharesto the designated account of the IEPF Authority during the financial year 2018-19 on whichthe dividend was unclaimed/ unpaid for a period of seven (7) consecutive years from theyear of its declaration in financial year 201011. Company had already transferred 4379shares of different shareholders to IEPF Authority in the financial year 2017-18 of theshareholders on whose shares the Dividend was unpaid/ unclaimed for a period of seven (7)consecutive years starting from the unpaid/unclaimed dividend of the Financial Year2009-10 and also of the earlier years.
Details of the Nodal Officer:
Company Secretary and Compliance Officer
Email ID- email@example.com
Phone Nos. - 022 4004-0008
During the Financial year 2018-19 Unpaid / Unclaimed Dividend of Rs 51648 wastransferred to IEPF Account towards Interim Dividend (H30596) and Final Dividend(H21052) which was declared in the financial year 2010-11 and remained unpaid/unclaimedfor 7 years.
c. Transfer to Reserves
The Board of Directors has not recommended transfer of any amount of profit to reservesduring the year under review. Hence the entire amount of profit for the year under reviewhas been carried forward to Retained Earnings.
Financial Statements as per IND-AS.
Financial Statements for the year ended 31 March 2019 are in accordance with the IndianAccounting Standards (IND-AS) notified by the Ministry of Corporate Affairs Government ofIndia which have already become applicable to the Company from the accounting periodbeginning on 01 April 2017.
During the year under review there was no revision of financial statements pertainingto previous financial year.
The Company has not accepted or renewed any amount falling within the purview ofprovisions of Section 73 of the Companies Act 2013 ("the Act") read with theCompanies (Acceptance of Deposits) Rules 2014. Hence the requirement for furnishing ofdetails of deposits which are not in compliance with the Chapter V of the Act is notapplicable.
Disclosures under Section 134(3)(l) of the Companies Act 2013
Except as disclosed elsewhere in this report no material changes and commitments whichcould affect the Company's financial position have occurred between the end of thefinancial year of the Company and the date of this report.
Disclosure of Internal Financial Controls
The Internal Financial Controls with reference to financial statements as designed andimplemented by the Company are found adequate. During the year under review no materialor serious observation has been received on inefficiency or inadequacy of such controlsfrom the Internal Auditors of the Company.
Disclosure of Orders passed by Regulators or Courts or Tribunal
Your Directors would like to inform that no orders have been passed by any Regulator orCourt or Tribunal which can have impact on the going concern status and on the Company'soperations in future.
Particular of Contracts or Arrangement with Related Parties
All contracts / arrangements / transactions entered into by the Company during thefinancial year with its wholly owned subsidiaries were in the ordinary course of businessand at an arm's length basis. During the year the Company had not entered into anycontract / arrangement / transaction with related parties which could be considered asmaterial related party transaction in accordance with the policy of the Company on relatedparty transactions read with SEBI (Listing Obligations and Disclosure Requirement)Regulations 2015. The Policy on related party transactions as approved by the Board maybe accessed on the Company's website www.itlindia. com.
Your Directors draw attention of the members to Note no. 27 of Standalone financialstatements which sets out disclosures on related parties and transactions entered intowith the said parties.
Particulars of Loans Guarantees Investments and Securities
Full particulars of loans given investments made guarantees given and securitiesprovided along with the purposes for which the loans or guarantees or securities areproposed to be utilized by the recipient(s) thereof are provided in Note nos. 6 7 8 and25 of standalone financial statements.
During the year under review the Company has not issued any shares with differentialvoting rights and sweat equity shares and hence disclosures under Section 43(a)(ii) andSection 54(1)(d) of the Companies Act 2013 read with relevant rules are not required tobe furnished. The Company does not have a scheme of ESOP and hence disclosures pursuant toSection 67(3) of the Companies Act 2013 are also not required to be furnished.
Matters Related to Directors and Key Managerial Personnel:
a. Board of Directors & Key Managerial Personnel
The term of appointment of Mrs. Savita Agarwal Independent Director will come to anend on 29 June 2019 and term of appointment of Mr. Rupinder Singh and Mr. Anil AgarwalIndependent Directors will come to an end on 28 August 2019.
Mrs. Savita Agarwal Mr. Rupinder and Mr. Anil Agarwal have given declaration to theBoard that they meet with the criteria of independence as provided under Section 149 (6)of the Companies Act 2013 and Regulation 16(1 )(b) of the SEBI (Listing Obligations andDisclosure Requirements) Regulation 2015 (Listing Regulations) and amendments thereto.They have also confirmed that they are not disqualified from being re-appointed asDirector in terms of Section 164 of the Act and have consented for such Re-appointments.
In the opinion of the Board Mrs. Savita Agarwal Mr. Rupinder Singh and Mr. AnilAgarwal fulfil the conditions specified in the Act its rules framed thereunder and SEBIListing Regulations 2015 for re-appointment as Non-executive Independent Directors andthey are independent of the management.
The Board of Directors at their Meeting held on 28 May 2019 as per the recommendationof the Nomination and Remuneration Committee of the Company has approved their respectivereappointment for a second consecutive term of a five (5) year subject to the approval ofthe members of the Company in the ensuing Annual General Meeting of the Company in thecategory of Independent Director of the Company (not liable to retire by rotation).
Brief profile and the information as required under the relevant provisions of the ActRegulation 36 of the SEBI Listing Regulations and Secretarial Standards SS-2 are disclosedin the notice of the ensuing Annual General Meeting and forms part of the Annual Report.
In accordance with the provisions of the Act none of the Independent Directors isliable to retire by rotation. Pursuant to the provisions of Section 152 of the CompaniesAct 2013 Mr. Sharad Kajaria shall retire by rotation at the ensuing Annual GeneralMeeting and being eligible offer himself for reappointment. The Board recommends hisappointment.
b. Declaration by Independent Directors
The Independent Directors of the Company have given a declaration confirming that theycontinue to meet with the criteria of the independence as provided in sub-section (6) ofSection 149 of the Companies Act 2013 as further amended by the Companies Amendment Act2017 and Regulation 16(1) (b) of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 and they have also confirmed that they are independent ofthe Management.
The Independent Directors also confirmed that they are not aware of any circumstancesor situation which exist or may be reasonably anticipated that could impair or impacttheir ability to discharge their duties with an objective independent judgement andwithout any external influence.
There has been no change in the circumstances which may affect their status asIndependent director during the year under review.
c. Company's Policy on Director's appointment and remuneration
The Board has as per the recommendation of the Nomination and Remuneration Committeeframed a policy on selection and appointment of Directors and Senior Managerial personneland their remuneration which was further amended by the Board in their Meeting held on 30March 2019 in terms of the Amendments in SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 . The details of said policy are given in the CorporateGovernance Report which forms part of this Annual Report.
Disclosures Related to Board Committees and Policies:
a. Board Meetings
The Board ofDirectors met 5 (Five) times during the financial year 2018-19 inaccordance with the provisions of the Companies Act 2013 and rules made thereunder.Detailed information on the Board Meetings is provided in the Corporate Governance Reportwhich forms part of this Annual Report.
b. Director's Responsibility Statement
In terms of Section 134(5) of the Companies Act 2013 in relation to the auditedfinancial statements of the Company for the year ended 31 March 2019 the Board ofDirectors hereby confirms that:
i. in the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures if any;
ii. such accounting policies have been selected and applied consistently and theDirectors made judgments and estimates that are reasonable and prudent so as to give atrue and fair view of the state of affairs of the Company as at 31 March 2019 and of theprofit of the Company for that year;
iii. proper and sufficient care was taken for the maintenance of adequate accountingrecords in accordance with the provisions of this Act for safeguarding the assets of theCompany and for preventing and detecting fraud and other irregularities;
iv. the annual accounts of the Company have been prepared on a going concern basis;
v. internal financial controls have been laid down to be followed by the Company andthat such internal financial controls are adequate and were operating effectively;
vi. proper systems have been devised to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively.
c. Committees of the Board
There are five Committees of the Board of Directors of the Company viz. AuditCommittee Nomination and Remuneration Committee Stakeholders' Relationship CommitteeCorporate Social Responsibility Committee and Business Advisory Committee. Detailedinformation on all the Committees is provided in the Corporate Governance Report alongwith the details of extract from Nomination and Remuneration Policy of the Company withrespect to remuneration of Executive Directors Key Managerial Personnel and other senioremployees of the Company. Policies framed by the Committees / Board pursuant to theapplicable provisions of the Companies Act 2013 and the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 are available on the Company's Websitewww.itlindia.com.
Disclosure in respect of composition of Committees Committee Meetings held attendanceof members Reference of the Committee and other related matters are made in the CorporateGovernance Report attached and forms part of this Annual Report.
a. Vigil Mechanism Policy for the Directors and Employees
The Board of Directors of the Company have pursuant to the provisions of Section 178(9)of the Companies Act 2013 read with Rule 7 of the Companies (Meetings of Board and itsPowers) Rules 2014 framed a "Vigil Mechanism Policy" for Directors andemployees of the Company to provide a mechanism which ensures adequate safeguards toemployees and Directors from any victimization on raising of concerns of any violations oflegal or regulatory requirements incorrect or misrepresentation of any financialstatements and reports etc.
The employees of the Company have the right to report their concern/grievance to theChairman of the Audit Committee.
The Company is committed to adhere to the highest standards of ethical moral and legalconduct of business operations.
b. Risk Management Policy
The Board of Directors of the Company has designed Risk Management Policy andGuidelines to avoid events situations or circumstances which may lead to negativeconsequences on the Company's businesses and define a structured approach to manageuncertainty and to make use of these in their decision making pertaining to all businessdivisions and corporate functions. Key business risks and their mitigation are consideredin the annual/strategic business plans and in periodic management reviews.
c. Policies and Procedures (Mechanism)
The Board of Directors of the Company has laid down policies and procedures in case ofLeak of Unpublished price sensitive information or suspected leak of Unpublished pricesensitive information in their Meeting held on 30 March 2019 in terms of the SEBI (Prohibition of Insider Trading) (Amendment) Regulations 2018.
Annual Evaluation of Directors Committee and Board
The Board of Directors has carried out annual evaluation of its own performanceCommittees of the Board and individual directors pursuant to the provisions of theCompanies Act 2013 and the Corporate Governance requirements as prescribed underSecurities and Exchange Board of India (Listing Obligation and Disclosure Requirement)Regulations 2015.
A statement indicating the manner for evaluation of performance of the Board itscommittees and individual Directors is stated in the Corporate Governance Report formingpart of this Annual Report.
Internal Control Systems
Adequate internal control systems commensurate with the nature of the Company'sbusiness size and complexity of its operations are in place and have been operatingsatisfactorily. Internal control systems comprising of policies and procedures aredesigned to ensure reliability of financial reporting timely feedback on achievement ofoperational and strategic goals compliance with policies procedure applicable laws andregulations and that all assets and resources are acquired economically used efficientlyand adequately protected.
Payment of Remuneration / Commission to Directors from Holding or Subsidiary Companies
None of the managerial personnel i.e. Managing Director and Whole-time Director of theCompany are in receipt of remuneration/ commission from the Subsidiary Companies of theCompany.
Auditors and Reports:
The matters related to Auditors and their Reports for the year ended 31 March 2019 areas under:-
a. Report of Statutory Auditors on Accounts for the Year ended 31 March 2019:
The Report submitted by the Statutory Auditors for the financial year ended 31 March2019 is free from any observations or qualifications.
b. Secretarial Audit Report:
Provisions of Section 204 read with Section 134(3) of the Companies Act 2013mandates the Company to obtain a Secretarial Audit Report in the Form MR-3 from aPracticing
Company Secretary. M/s. Rathi and Associates Company Secretaries had been appointed asSecretarial Auditors to issue Secretarial Audit Report for the financial year 2018-19.
Secretarial Audit Report issued by M/s. Rathi and Associates Company Secretaries inForm MR-3 for the financial year 201819 forms part of this report as Annexure V.
Walker Chandiok & Co. LLP Chartered Accountants (Firm Registration No.001076N/N500013) were appointed as Statutory Auditors of the Company at the 21st AnnualGeneral Meeting held on 8 September 2016 for consecutive term of 5 (five) years to holdoffice up to the conclusion of the 26th Annual General Meeting of the Company. CompaniesAmendment Act 2017 withdrawn the provisions related to ratification of the appointmentof Auditors and accordingly no ratification of appointment of Statutory Auditors bymembers would be necessary.
d. Fraud Reporting:
During the year under review there were no serious frauds being detected.
Copy of Annual Return 2018 and Extract of Annual Return 2019
Pursuant to the provisions of Section 134(3)(a) of the Companies Act 2013 Extract ofAnnual Return in the prescribed format for the financial year ended 31 March 2019 isuploaded on the website of the Company and the link for the same ishttp://www.itlindia.com/ statutory.html. The Annual Return for the year ended 31 March2018 in Schedule-V which was filed with the Registrar of the Companies is also uploaded onthe Website of the Company and the link for the same ishttp://www.itlindia.com/statutory.html.
Conservation of EnergyTechnology Absorption and Foreign Exchange Earnings and Outgo
The particulars as required under the provisions of Section 134(3) (m) of the CompaniesAct 2013 read with Rule 8 of the Companies (Accounts) Rules 2014 in respect ofconservation of energy technology absorption foreign exchange earnings and outgo etc.are furnished in Annexure II which forms part of this Report.
Annual Report on Corporate Social Responsibility
Pursuant to Section 135 of the Companies Act 2013 and Companies (Corporate SocialResponsibility Policy) Rules 2014 during the financial year under review the Companywas not required to spend any amount towards Corporate Social Responsibility activities.
Further Annual Report on CSR as required to be disclosed under the above mentionedrules for the Financial Year 2018 -19 is attached to this report as Annexure III.
Particulars of Employees as per Section 197 read with Rule 5 of the Companies(Appointment & Remuneration of Managerial Personnel) Rules 2014
The information required pursuant to Section 197 read with Rule 5 (1) and 5 (2) of theCompanies (Appointment & Remuneration of Managerial Personnel) Rules 2014 is attachedto this report as Annexure IV.
The Managing Director and Whole time Director of the Company had not received anycommission from the Company and also not received any remuneration or commission from itssubsidiary company.
Compliance with Secretarial Standards
During the Financial year under review in terms of Section 118 (1) of the CompaniesAct 2013 the Company has observed and complied with the Secretarial Standards SS-1 andSS-2 on Board Meetings and Annual General Meeting specified by the Institute of CompanySecretaries of India (ICSI).
Disclosures under the Sexual Harassment of Women at Workplace (Prevention Prohibitionand Redressal) Act 2013
The Company has taken sufficient measures and adopted a policy in terms of The SexualHarassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013 andrules thereunder. During the year under review no complaints in relation to sexualharassment at workplace have been reported.
Management's Discussion and Analysis
A detailed review of the operations performance and future outlook of the Company andits business is given in the Management's Discussion and Analysis is attached and formspart of this Report.
Corporate Governance Report
The Company is committed to uphold the values of transparency integrityaccountability and ethical corporate citizenship across all its business activities. Thiscommitment lays down the foundation of its governance practices which focus on creatingsustainable value for the stakeholders.
The Company has laid down Code of Conduct to which the board and senior management haveaffirmed compliance. The Code is displayed on the official website of the Company atwww.itlindia . com.
The Company has complied with the provisions of Corporate Governance requirements asstipulated under Regulation 27 of the Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015. A separate section onCorporate Governance forming part of the Directors' Report and the certificate from aPracticing Company Secretary pursuant to the said Regulation is attached with theCorporate Governance Report.
Acknowledgements and Appreciation
Your Directors take this opportunity to place on its gratitude to customersshareholders suppliers bankers business partners/ associates and financial institutionsfor their consistent support and encouragement to the Company.
| || || |
| ||For and on behalf of the Board |
| ||Arvind Kajaria ||Sharad Kajaria |
|Place: Kolkata ||Managing Director ||Whole-time Director |
|Date: 28 May 2019 ||(DIN 00106901) ||(DIN 00108036) |