Directors Report of Five Core Exim Ltd.
Mar 31, 2015
Dear Members,
The Directors are pleased to present the report on the business and
operations of your Company along with the audited accounts for the
financial year ended March 31, 2015.
A. Results of operation
Particulars 31-03-2015 31-03-2014
(Rs.) (Rs.)
Consolidated
Revenue from operation and other income 1,128,942,752 1,212,269,770
Earnings before Depreciation and 13,510,881 1,768,170
amortization
Depreciation and amortization 31,854,421 23,375,585
Profit before Exceptional items (18,343,540) (21,607,415)
Exceptional Items
Provision for diminution in value of - -
Investment
Bad debts (write-off of loan) - (3,561,232)
Provision for impairment of goodwill on - (50,000,000)
Consolidation
Profit / (Loss) on sale of investment in (27,577,367) -
Subsidiary
Profit Before Tax (45,920,907) (75,168,647)
Less : Provision for Taxation (171,406) 3,467,414
Profit After Tax (45,749,501) (78,636,061)
Particulars 31-03-2015 31-03-2014
(Rs.) (Rs.)
Standalone
Revenue from operation and other income 109,780,464 130,654,883
Earnings before Depreciation and 9,781,266 12,965,876
amortization
Depreciation and amortization 10,889,258 10,785,788
Profit before Exceptional items (1,107,992) 2,180,088
Exceptional Items
Provision for diminution in value of - (50,000,000)
Investment
Bad debts (write-off of loan) - (3,561,232)
Provision for impairment of goodwill on - (50,000,000)
Consolidation
Profit / (Loss) on sale of investment in - -
Subsidiary
Profit Before Tax (1,107,992) (51,381,144)
Less : Provision for Taxation (171,406) 680,282
Profit After Tax (936,586) (52,061,426)
During the financial year 2014-15, no amount has been transferred to
the reserves.
B. Dividend
As the Company has suffered losses, your Directors have decided not to
declare any dividend for the financial year 2014-15.
C. Disposal of step down subsidiaries
The economic slowdown and the tightening of the immigration laws and
hiring procedures have had an adverse effect on the operations of the
Company's step down subsidiaries namely Dice Technologies Inc., USA and
Dicetek LLC., Dubai. This has also adversely impacted the financial
viability of the step down subsidiaries. In view of this, Dicetek
(Sing) Pte Limited, Singapore, has disposed of investment in the shares
held by it in Dice Technologies Inc., USA. Accordingly, Dice
Technologies Inc., USA has ceased to be a subsidiary of the Company.
Dicetek (Sing) Pte Limited, Singapore has also taken steps to dispose
of its investment in Dicetek LLC., Dubai.
D. Management Discussion and Analysis report
E. Directors and Key Managerial Personnel
Mr. Srikanth Ramanathan was re-appointed as Managing Director of the
Company for a period of 1 year with effect from February 6, 2014.
Accordingly, his term as Managing Director ended on February 5, 2015.
The Board of Directors of the Company based on the recommendation of
the Nomination & Remuneration committee have re-appointed Mr. Srikanth
Ramanathan as Managing Director for a period of one year with effect
from February 6, 2015. Mr. Srikanth Ramanathan has expressed his
desire to not draw any remuneration from the company and accordingly,
he is not being paid any remuneration w.e.f. January 1, 2012. The
Board of Directors recommend the re-appointment of Mr. Srikanth
Ramanathan as Managing Director for a period of 1 year with effect from
February 6, 2015. Mr. Srikanth Ramanathan, Managing Director retires by
rotation in accordance with the provisions of the Companies Act, 2013
and being eligible, offers himself for re-appointment.
During the year, Mr. S. Ramakrishnan has resigned as Director with
effect from April 9, 2014. Further, Mr. S. Arun Kumar, Chief Financial
Officer and Company Secretary has also resigned with effect from April
9, 2014. The Company is on the lookout for suitable persons for the
positions of Chief Financial Officer and Company Secretary.
During the year under review, the members of the Company approved the
appointment of Mr. K. Balaji, Mr. K. S. Vaidyanathan and Mr. V.
Ganapathi Subramanian, as Independent Directors who are not liable to
retire by rotation. With the appointment of Independent Directors, the
conditions specified in the Companies Act 2013 and the Rules made
thereunder as also under revised Clause 49 of the Listing Agreement
stand complied.
Mrs. Kamakshi Shankararaman was appointed as an Additional Director by
the Board with effect from July 10, 2015. Pursuant to the provisions of
Section 161 of the Companies Act, 2013, Mrs. Kamakshi Shankararaman
will hold office up to the date of the ensuing Annual General Meeting.
The Company has received notice in writing under the provisions of
Section 160 of the Companies Act, 2013, from a member along with
requisite deposit proposing the candidature of Mrs. Kamakshi
Shankararaman for the office of Independent Director, to be appointed
as such under the provisions of Section 149 of the Companies Act, 2013.
In the opinion of the Board of Directors, Mrs. Kamakshi Shankararaman,
the Independent Director proposed to be appointed, fulfils the
conditions specified in the Companies Act 2013 and the Rules made
thereunder and she is independent of the Management.
The Board has based on the recommendation of the Nomination and
Remuneration Committee and subject to approval of the shareholders,
appointed Mrs. Kamakshi Shankararaman as Independent Director with
effect from July 10, 2015, for a term up to July 09, 2020, and whose
office shall not be liable to retire by rotation.
The Independent Directors have submitted the declaration of
independence, as required under Section 149 of the Companies Act 2013
and Clause 49 of the listing agreement, declaring that they meet the
criteria of independence.
The information to shareholders as per Clause 49 of the Listing
agreement pertaining to the Director / Managing Director seeking
appointment / re-appointment, are being provided in the Notice of the
Annual General Meeting which forms part of this Annual Report.
The Board has, on the recommendation of the Nomination & Remuneration
Committee framed a policy for selection and appointment of Directors
and their remuneration. The policy for selection and appointment of
Directors and their remuneration is stated in the Report on Corporate
Governance.
The manner in which formal evaluation has been made by the Board of its
own performance and that of its committees and individual directors is
given in the Report on Corporate Governance.
The Company has devised a formal familiarization programme for its
Independent Directors, the details of which are provided in the Report
on Corporate Governance.
F. Meetings of the Board and Audit Committee
During the year under review, five meetings of the Board of Directors
and four meetings of the Audit Committee were held. For further
details, please refer the report on Corporate Governance. The
intervening gap between the meetings was within the period prescribed
under the Companies Act, 2013.
G. Auditors
I. Statutory Auditor
Mr. S. Ramanath, Chartered Accountant, Coimbatore (Membership number
29416) was re-appointed as the statutory auditor of the Company at the
last Annual General Meeting for a period of 3 years to hold office till
the conclusion of the 23rd Annual General Meeting of the Company to be
held in the year 2017 (subject to ratification of his appointment at
every Annual General Meeting).
As per the provisions of Section 139 of the Companies Act, 2013 and the
rules framed there under, the appointment of Mr. S. Ramanath as Auditor
of the Company till the conclusion of the 23rd Annual General Meeting
of the Company to be held in the year 2017 is subject to ratification
of his appointment at every Annual General Meeting. Your Directors
recommend the ratification of appointment of Mr. S. Ramanath as Auditor
of the Company.
The Company has received confirmation from Mr. S. Ramanath to the
effect that his appointment is within the prescribed limits under
Section 141(3)(g) of the Companies Act, 2013 and that he is not
disqualified for re-appointment.
The Auditors' Report does not contain any qualification, reservation or
adverse remark.
II. Internal Auditor
As per Section 138 of the Companies Act, 2013 read with Rule 13 of the
Companies (Accounts) Rules, 2014, Ms. M.S. Indira, Chartered
Accountant, Chennai (Membership No. 230544) was appointed as an
Internal Auditor of the Company for financial year 2014-15.
III. Secretarial Auditor
The Board has appointed M/s. Aashish Kumar Jain & Associates,
Practising Company Secretaries, Chennai, to conduct Secretarial Audit
of the Company for the financial year 2014-15. The Report of the
Secretarial Audit is annexed herewith as "Annexure - 1". The
Secretarial Audit Report does not contain any qualification,
reservation or adverse remark.
H. Directors' Responsibility Statement
To the best of our knowledge and belief and according to the
information and explanations obtained by us, your Directors make the
following statements in terms of Section 134(3)(c) of the Companies
Act, 2013:
a. that in the preparation of the annual financial statements for the
year ended March 31, 2015, the applicable accounting standards have
been followed along with proper explanation relating to material
departures, if any;
b. the directors had selected such accounting policies and applied
them consistently and made judgements and estimates that are reasonable
and prudent so as to give a true and fair view of the state of affairs
of the Company as at March 31, 2015 and of the Loss of the Company for
the year ended on that date;
c. that proper and sufficient care has been taken for the maintenance
of adequate accounting records in accordance with the provisions of the
Companies Act, 2013 for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities;
d. that the annual financial statements have been prepared on a going
concern basis;
e. that proper internal financial controls were in place and that the
financial controls were adequate and were operating effectively.
f. that systems to ensure compliance with the provisions of all
applicable laws were in place and were adequate and operating
effectively.
I. Subsidiary
As at March 31, 2015, your Company has 2 subsidiaries namely, Dicetek
(Sing) Pte Limited, Singapore and Dicetek LLC., Dubai. Both these
subsidiaries are engaged in the business of providing IT Services and
Consulting.
During the year, M/s. Dicetek (Sing) Pte Limited, Singapore has
completed the sale of its investment in M/s. Dicetek
Technologies Inc., USA. Consequent to this, M/s. Dicetek Technologies
Inc., USA has ceased to be a step down subsidiary of the Company.
As required under the Listing Agreements entered into with the Stock
Exchanges and Section 129(3) of the Companies Act 2013, the Company has
prepared the consolidated financial statement of the Company and all
its subsidiaries, which forms part of this Annual Report. The
consolidated financial statements have been prepared in accordance with
the relevant accounting standards as prescribed under Section 133 of
the Companies Act, 2013.
A statement containing the salient features of the financial statement
of the subsidiaries in the prescribed format AOC-1 is attached to the
standalone financial statements of the Company. The statement also
provides the details of performance, financial positions of each of the
subsidiaries. In accordance with Section 136 of the Companies Act,
2013, the audited financial statements, including the consolidated
financial statements and related information of the Company and audited
accounts of each of its subsidiaries are available on the Company's
website www.aurumsoftsystem.com. These documents will also be available
for inspection during business hours at the registered office of the
Company.
J. Corporate Governance
In terms of Clause 49 of the Listing Agreement with the stock
exchanges, a Report on Corporate Governance is made part of this Annual
report.
A certificate from a practicing Company Secretary regarding compliance
of the conditions stipulated for Corporate Governance under Clause 49
of the Listing Agreement is attached to this report.
The declaration by the Managing Director addressed to the members of
the Company pursuant to Clause 49 of the Listing Agreement regarding
adherence to the Code of Conduct by the Members of the Board and by the
Members of the Senior Management Personnel of the Company is also
attached to this Report.
K. Risk Management
The Company views risk management as a continuous process which is the
principal driver for effective Corporate Governance and for enhancement
of value to the shareholders.
During the year, the Board has formed a Risk Management Committee to
oversee and manage the Risk Management and mitigation frame work. The
Risk Management Committee comprises of Mr. K. Balaji, Chairman and Mr.
Srikanth Ramanathan, Managing Director. The detailed terms of reference
of the Risk Management Committee is provided in the report on Corporate
Governance.
The Company has framed a policy on Risk Management and the same has
been posted on the Company's website and is available on the following
link:
http://www.aurumsoftsystems.com/cp/pdf/031020141412323532Risk%20Mgt%
20Policy%20-%20Aurum%20website-October%202014.pdf
L. Related Party Transaction
All related party transactions that were entered into during the
financial year were on an arm's length basis and were in the ordinary
course of business. During the year, the Company had not entered into
any related party transaction which could be considered material in
accordance with the policy of the Company on Related Party
Transactions.
The policy on Related Party Transactions as approved by the Board is
uploaded on the Company's website and the same is available on the
following link:
http://www.aurumsoftsystems.com/cp/pdf/031020141412337111Related%
20party%20transactions%20policy.pdf
The particulars of transactions between the Company and its related
parties, is set out in Note 23 of Notes to the standalone financial
statements.
M. Corporate Social Responsibility
The requirement on Corporate Social Responsibility as provided in
Section 135 of the Companies Act, 2013 is not applicable to your
Company.
N. Whistle Blower Mechanism
Your Company has adopted a Whistle Blower Policy so that the employees
of the Company have a secure mechanism to report any concerns that they
may have of actual, suspected or planned wrongdoings to the Chairman of
the Board and Chairman of the Audit Committee. The whistle blower
policy is available on the Company's website in the following link:
http://www.aurumsoftsystems.com/cp/
pdf/021020141412254893whistle%20blower%20policy.pdf
O. Conservation of Energy, Technology Absorption and Research &
Development
Your Company's power requirements are very minimal. Your Company
however takes every possible step to make optimum utilization of energy
and avoid unnecessary wastage of power.
Your Company keeps itself updated with the latest technology available
in the market. Your Company constantly strives to enhance
state-of-the-art development standards to meet the ever growing
challenges of the corporate world. Your company aims at providing
future-proof and future adaptable technologies to all its clients.
P. Extract of Annual Return
Extract of the Annual Return of the Company is annexed herewith as
"Annexure - 2" to this Report.
Q. Foreign Exchange Earnings and Outgo
During the financial year 2014-15, the total foreign exchange earnings
on account of Interest on Loan to the Company's wholly owned foreign
subsidiary was Rs. 15.11 lakhs. There was no expenditure incurred by
the Company in foreign currency during financial year 2014-15.
R. Deposits
During the year, your Company has not accepted any deposits from the
public.
S. Particulars of Employees and related disclosures
During the financial year 2014-15, no employee of the Company has drawn
remuneration in excess of the limits specified under Rule 5(2) of the
Companies (Appointment and Remuneration of Managerial Personnel) Rules,
2014, that requires disclosure under Rules 5(2) and 5(3) of the
Companies (Appointment and Remuneration of Managerial Personnel) Rules,
2014.
The disclosures pertaining to remuneration and other details as
required under Section 197(12) of the Companies Act, 2013 read with
Rule 5(1) of the Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014 are given below:
i. The ratio of the remuneration of each director to the median
remuneration of the employees of the company for the financial year
No remuneration has been paid to any of the Directors of the Company.
The sitting fees paid to the Directors is not treated as remuneration.
The median remunerate on of the employees of the Company during the
financial year 2014-15 is Rs. 142,200.
ii. The percentage increase in remuneration of each director, Chief
Financial Officer, Chief Executive Officer, Company Secretary or
Manager, if any, in the financial year
There is no increase in remuneration of Key Managerial Personnel.
iii. The percentage increase in the median remuneration of employees in
the financial year
The percentage increase in the median remuneration of the employees
during the financial year 2014-15 is 12.85%.
iv. The number of permanent employees on the rolls of company
The number of permanent employees on the rolls of the Company as on
31st March 2015 is 618.
v. The explanation on the relationship between average increase in
remuneration and company performance
The Company's Loss after Tax for the Financial Year 2014-15 was Rs.
9.37 lakhs compared to a Profit after Tax (excluding exceptional items)
of Rs. 15 lakhs (i.e. a decrease of 164.87%). The average increase in
remuneration of the employees (excluding Key Managerial Personnel)
during the financial year 2014-15 is 10.82%. The increase in
remuneration is in line with the remuneration policy of the Company.
vi. Comparison of the remuneration of the Key Managerial Personnel
against the performance of the company
No remuneration is paid to the Managing Director of the Company. The
Company does not have any other Key Managerial Personnel.
vii. 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 in case
of listed companies, and in case of unlisted companies, the variations
in the net worth of the company as at the close of the current
financial year and previous financial year
Issued Closing Market
Particulars Capital Market EPS (Rs.) PE ratio Capital
(Shares) Price per -isation
share (Rs> (Rs. in
Crores
As on 31st 65,100,000 9.00 (0.80) N.A 58.59
March 2014
As on 31st 65,100,000 1.60 (0.01) N.A 10.42
March 2015
Increase /
(Decrease) - (7.40) 0.79 (48.17)
% Increase /
(Decrease) - (82.22%) 98.75% (82.22%)
Issue Price of
the share at the - 2.00
last Public
Offer (IPO)
(Decrease) in
market price
as on 31st
March 2015 as - (0.40)
compared to Issue
Price at IPO
% (Decrease) in
market price - (20.00%)
viii. 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 increase in remunerate on of employees other than Key
Managerial Personnel is 10.82%. No remuneration is paid to the
Managing Director of the Company. The Company does not have any other
Key Managerial Personnel.
ix. Comparison of the each remuneration of the Key Managerial
Personnel against the performance of the company
No remuneration is paid to the Managing Director of the Company. The
Company does not have any other Key Managerial Personnel.
x. The key parameters for any variable component of remuneration
availed by the directors
No remuneration has been paid to any of the Directors of the Company.
The sitting fees paid to the directors is not treated as remuneration.
xi. 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
Not Applicable
xii. Affirmation that the remuneration is as per the remuneration
policy of the company
The remuneration is as per the remuneration policy of the Company
T. Other Disclosures
No significant or material orders were passed by the Regulators or
Courts or Tribunals which impact the going concern status and Company's
operations in future.
During the year under review, no Compliant was received by the Company
pursuant to the Sexual Harassment of Women at Workplace (Prevention,
Prohibition and Redressal) Act, 2013.
The details of Loans given and Investments made by the Company, in its
subsidiary are given in Note 30 and 9 respectively in notes forming
part of the standalone financial statements. Apart from this, the
Company has not given any Loan or Guarantee or made any investments
covered under the Provisions of Section 186 of the Companies Act, 2013.
U. Appreciation
Your Directors wish to place on record their appreciation to all
shareholders, customers, suppliers and bankers for their co-operation
and support extended to the Company.
Your Directors also place on record their appreciation of the efforts
and contribution during 2014-15 of the Company's employees.
For and on behalf of the Board of Directors
K. Balaji
Chennai, July 10, 2015 Chairman
Mar 31, 2014
Dear Members,
The Directors are pleased to present the report on the business and
operations of your Company along with the audited accounts for the
financial year ended March 31, 2014.
A. Results of operation
31-03-2014 31-03-2013
Particulars (Rs.) (Rs.)
Consolidated
Revenue from operation
and other income 1,212,269,770 1,114,691,747
Earnings before Depreciation
and
amortization 1,768,170 35,970,196
Depreciation and amortization 23,375,585 19,062,007
Profit before Exceptional items (21,607,415) 16,908,189
Exceptional Items - -
Provision for diminution in value of - -
Investment - -
Bad debts (write-off of loan) (3,561,232) -
Provision for impairment of
goodwill on Consolidate on (50,000,000) -
Profit Before Tax (75,168,647) 16,908,189
Less : Provision for Taxation 3,467,414 1,460,109
Profit After Tax (78,636,061) 15,448,080
31-03-2014 31-03-2013
Particulars (Rs.) (Rs.)
Standalone
Revenue from operation
and other income 130,654,883 174,241,508
Earnings before Depreciation and
amortization 12,965,876 11,919,129
Depreciation and amortization 10,785,788 10,785,788
Profit before Exceptional items 2,180,088 1,133,341
Exceptional Items - -
Provision for diminution in
value of Investment (50,000,000) -
Bad debts (write-off of loan) (3,561,232) -
Provision for impairment of
goodwill on Consolidation - -
Profit Before Tax (51,381,144) 1,133,341
Less : Provision for Taxation 680,282 778,704
Profit After Tax (52,061,426) 354,637
B. Dividend
As the Company has suffered losses, your Directors have decided not to
declare any dividend for the financial year 2013-14.
C. Disposal of step down subsidiaries and write-off of investment in
subsidiary
The economic slowdown and the tightening of the immigration laws and
hiring procedures have had an adverse effect on the operations of the
Company''s step down subsidiaries namely Dice Technologies Inc., USA and
Dicetek LLC., Dubai. This has also adversely impacted the financial
viability of the step down subsidiaries.
In view of this, Dicetek (Sing) Pte Limited, Singapore has during
financial year 2013-14, provided for impairment loss of S$ 249,692 on
its investment in Dice Technologies Inc., USA, in addition to the
impairment loss of S$ 2.24 million provided earlier.
In order to reflect the diminution in the value of the investment in
the subsidiary, the Company has in accordance with Accounting Standard
- 13 ("Accounting for Investments"), provided for the diminution in
value of investment to the extent of Rs. 5 crores during financial year
2013-14 (i.e. to the extent allowed under the automatic route by the
relevant RBI Regulations).
Further, Dicetek (Sing) Pte Limited, Singapore, has also taken steps
for disposal of investment in shares held by it in Dicetek LLC., Dubai
and Dice Technologies Inc., USA. Dicetek (Sing) Pte Limited, Singapore,
is expected to realize around US$ 1 million from the disposal of the
step down subsidiaries.
Reserves
Due to the provision made for diminution in value of investment in
foreign subsidiary and the write-off of loans, there was a debit
balance in the statement of Profit and Loss on standalone basis of Rs.
409.20 lakhs and a debit balance of Rs. 310.43 lakhs on consolidated
basis.
Investments
Investment in wholly owned subsidiary is carried in the books at cost
less any provision for diminution in value. Consequent to the provision
made for diminution in value of investment in foreign subsidiary, the
Investment in subsidiary stood at Rs. 1705 lakhs as at March 31, 2014.
Current investments which represent investment made in short term debt
oriented Mutual Funds stood at Rs. 30.90 lakhs as at March 31, 2014.
Goodwill on consolidation
Consequent to the provision for impairment made in respect of
diminution in value of investment in foreign subsidiary, the Goodwill
on consolidation of all the subsidiaries stood at Rs. 786.45 lakhs as
at March 31, 2014.
Trade Receivables
The trade receivables on standalone basis marginally decreased to Rs.
177.38 lakhs as at March 31, 2014 compared to Rs. 187.40 lakhs as at
the end of the previous financial year.
The total trade receivables of the group on a consolidated basis also
decreased to Rs. 2178.36 lakhs as at March 31, 2014 compared to Rs.
2318.95 lakhs as at the end of the previous financial year.
Cash and Bank Balance
The Cash and Bank balance represents bank balance and amounts placed in
fixed deposits with Banks. On standalone basis, the Company had a cash
and bank balance of Rs. 9.02 lakhs and further Rs. 18.65 lakhs had been
placed in fixed deposits with banks.
On a consolidated basis, the cash and bank balance including fixed
deposits was Rs. 386.37 lakhs as at March 31, 2014.
Fixed Assets
On a standalone basis, there was no addition to fixed asset. The net
tangible assets as at March 31, 2014 were Rs. 3.80 lakhs and intangible
assets stood at Rs. 205.66 lakhs.
On a consolidated basis, the gross addition to tangible assets during
financial year 2013-14 was Rs. 12.77 lakhs and the addition to
intangible assets was Rs. 107.99 lakhs. The net tangible assets on
consolidated basis as at March 31, 2014 were Rs. 66.91 lakhs and
intangible assets stood at Rs. 338.38 lakhs.
Loans and Advances
On standalone basis, short-term loans and advances stood at Rs. 6.90
lakhs as at March 31, 2014 compared to Rs. 4.26 lakhs as at the end of
the previous financial year. The increase was on account of rental
advance for new office premises. Long term loans and advances increased
to Rs. 722.65 lakhs compared to Rs. 600.80 lakhs. The increase was
mainly on account of the additional loan of Rs. 84.63 lakhs lent to the
Company''s wholly-owned subsidiary M/s. Dicetek (Sing) Pte Limited,
Singapore. There was also an increase in the Tax deducted at source by
the clients. Advance taxes as at March 31, 2014 stood at Rs. 103.34
lakhs compared to Rs. 78.71 lakhs. Other current assets stood at Rs.
38.55 lakhs compared to Rs. 23.47 lakhs as at the end of the previous
financial year, significant portion of which represents interest
outstanding on the loan extended to the wholly owned subsidiary.
On a consolidated basis, short-term loans and advances stood at Rs.
446.64 lakhs as at March 31, 2014 compared to Rs. 427.12 lakhs during
the previous financial year. Long-term loans and advances stood at Rs.
364.52 lakhs compared to Rs. 374.21 lakhs.
Liabilities and provisions
On a standalone basis, provision for bonus stood at Rs. 51.40 lakhs as
at March 31, 2014 compared to Rs. 44.92 lakhs during the previous
financial year. On a consolidated basis, short-term provision for
employee benefits like bonus, leave salary, Annual air fare etc., stood
at Rs. 257.33 lakhs compared to Rs. 232.63 lakhs.
Provision for gratuity on a standalone basis stood at Rs. 53.38 lakhs
as at March 31, 2014. On a consolidated basis, provision for gratuity
stood at Rs. 174.45 lakhs.
Trade payables on a standalone basis stood at Rs. 0.17 lakhs as at
March 31, 2014. Other current liabilities stood at Rs. 111.00 lakhs. Of
this, Rs. 92.84 lakhs represents salary payable which has been
subsequently paid.
On a consolidated basis, trade payables as at March 31, 2014 decreased
to Rs. 214.66 lakhs, compared to Rs. 286.92 lakhs as at the end of the
previous financial year. Other current liabilities stood at Rs. 724.71
lakhs as at March 31, 2014. Of this, Rs. 697.82 lakhs represents salary
payable, which has been subsequently paid.
Long-term borrowings on a consolidated basis as at March 31, 2014 stood
at Rs. 12.31 lakhs compared to Rs. 14.30 lakhs as at the end of the
previous financial year. These represent the vehicle loans borrowed by
the Company''s wholly owned subsidiary M/s. Dicetek LLC., Dubai.
Short-term borrowings on a consolidated basis as at March 31, 2014
stood at Rs. 116.05 lakhs, compared to Rs. 34.74 lakhs as at the end of
the previous financial year. These represent the vehicle loans and
bills discounted by the Company''s wholly owned subsidiary M/s. Dicetek
LLC., Dubai.
Human Resources
With the available abundant experience and expertise of our employees,
your company believes that Human Resource is the major asset. Since
your Company''s business is highly people driven, development and
retention of human resources is one of the key challenges. During the
financial year 2013-14, your Company faced unprecedented attrition of
employees. New hirings have also adversely impacted margins. Going
forward, your Company faces a huge challenge and has to proactively act
in order to attract and retain the best talents.
E. Directors
Mr. Srikanth Ramanathan was re-appointed as Managing Director of the
Company for a period of 1 year with effect from February 6, 2013.
Accordingly, his term as Managing Director ended on February 5, 2014.
The Board of Directors of the Company based on the recommendation of
the Remuneration committee has re-appointed Mr. Srikanth Ramanathan as
Managing Director for a period of one year with effect from February 6,
2014. Mr. Srikanth Ramanathan has expressed his desire to not draw any
remuneration from the Company and accordingly, he is not being paid any
remuneration w.e.f. January 1, 2012. The Board of Directors recommend
the re-appointment of Mr. Srikanth Ramanathan as Managing Director for
a period of 1 year with effect from February 6, 2014.
In view of the provisions of the Companies Act 2013 (''Act''), Mr.
Srikanth Ramanathan, Managing Director, has now become retiring
Director and retires from the Board by rotation this year and being
eligible, offers himself for reappointment.
Pursuant to Section 149(4) of the Companies Act 2013, every listed
company shall have at least one third of its Board of Directors as
Independent Directors. Out of the 4 Directors on the Board, 3 of the
Directors are Independent Directors in terms of the provisions of
Clause 49 of the Listing Agreement.
The Board therefore, at its meeting held on May 30, 2014 appointed the
existing Independent Directors under Clause 49, namely Mr. K. Balaji,
Mr. K. S. Vaidyanathan and Mr. V. Ganapathi Subramanian, as
''Independent Directors'' pursuant to provisions of Section 149 of the
Companies Act 2013, subject to the approval of shareholders. As
required under the Companies Act 2013 and the Rules made thereunder,
the same is now put up for approval of members at the ensuing Annual
General Meeting. Necessary details have been annexed to the notice of
the meeting in terms of Section 102 of the Act.
The Independent Directors have submitted the declaration of
independence, as required under Section 149(6) of the Act, declaring
that they meet the criteria of independence.
With the appointment of Independent Directors, the conditions specified
in the Companies Act 2013 and the Rules made thereunder as also under
revised Clause 49 of the Listing Agreement stand complied.
The information to shareholders as per Clause 49 of the Listing
agreement pertaining to the Directors seeking appointment /
re-appointment, is being provided in the Notice of the Annual General
Meeting which forms part of this Annual Report.
F. Auditors
Mr. S. Ramanath, Chartered Accountant, Coimbatore (Membership number
29416) was appointed as the statutory auditor of the Company for
financial year 2013-14, at the Annual General Meeting of the Company
held on September 27, 2013 and holds office as Auditor of the Company
upto the conclusion of the ensuing Annual General Meeting.
Mr. S. Ramanath has been the Auditor of the Company since financial
year 2012-13 and has completed a term of 2 years. As per the provisions
of Section 139 of the Companies Act 2013, no listed Public Company, can
appoint or re-appoint an individual as auditor for more than five
consecutive years.
In view of the above, Mr. S. Ramanath is eligible for re-appointment as
auditor for a term of another three consecutive years. Pursuant to the
provisions of Section 139 of the Companies Act 2013 and the Rules
framed thereunder, the proposal for appointment of Mr. S. Ramanath as
the statutory auditor of the Company for a period of 3 years to hold
office from the conclusion of the ensuing Annual General Meeting till
the conclusion of the 23rd Annual General Meeting of the Company to be
held in the year 2017 (subject to ratification of his appointment at
every Annual General Meeting), is being placed before the Members of
the Company at the ensuing Annual General Meeting.
The Company has received confirmation from Mr. S. Ramanath to the
effect that his re-appointment, if made, would be within the prescribed
limits under Section 141(3)(g) of the Companies Act, 2013 and that he
is not disqualified for re-appointment.
G. Directors'' Responsibility Statement
Your Directors'' hereby confirm in terms of Section 217(2AA) of the
Companies Act, 1956 that:
1. In the preparation of the annual accounts for the year ended March
31, 2014, the applicable accounting standards have been followed and
there are no material departures;
2. The accounting policies listed in Note 2 to the Notes forming part
of the financial statements have been selected and applied consistently
and judgements and estimates that are reasonable and prudent made so as
to give a true and fair view of the state of the affairs of the Company
at the end of the financial year on March 31, 2014 and of the Loss of
the Company for that year;
3. Proper and sufficient care has been taken for the maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act, 1956 for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities;
4. The annual accounts for the year ended March 31, 2014, have been
prepared on a going concern basis.
H. Deposits
During the year, your Company has not accepted any deposits from the
public.
I. Subsidiary
Your Company has 3 subsidiaries namely, Dicetek (Sing) Pte Limited,
Singapore, Dicetek LLC., Dubai and Dice Technologies Inc., USA. All
these subsidiaries are engaged in the business of providing IT Services
and Consulting.
As required under the Listing Agreements entered into with the Stock
Exchanges, a consolidated financial statement of the Company and all
its subsidiaries is attached. The consolidated financial statements
have been prepared in accordance with the relevant accounting standards
as prescribed under Section 211(3C) of the Companies Act, 1956.
Pursuant to the provisions of Section 212(8) of the Companies Act 1956,
the Ministry of Corporate Affairs vide its circular dated February 8,
2011 has granted general exemption from attaching the balance sheet,
statement of profit and loss and other documents of the subsidiary
companies with the balance sheet of the Company. A statement containing
brief financial details of the Company''s subsidiaries for the financial
year ended March 31, 2014 is included in the Annual Report. The annual
accounts of these subsidiaries and the related detailed information
will be made available to any member of the Company/its subsidiaries
seeking such information at any point of time and are also available
for inspection by any member of the Company/its subsidiaries at the
registered office of the Company and also at the respective registered
office of the subsidiaries for inspection.
The same has also been put-up on the Company''s website,
www.aurumsoftsystems.com
J. Corporate Governance
In terms of Clause 49 of the Listing Agreement with the stock
exchanges, a Corporate Governance Report is made part of this Annual
report.
A certificate from a practicing Company Secretary regarding compliance
of the conditions stipulated for Corporate Governance under Clause 49
of the Listing Agreement is attached to this report.
The declaration by the Managing Director addressed to the members of
the Company pursuant to Clause 49 of the Listing Agreement regarding
adherence to the Code of Conduct by the Members of the Board and by the
Members of the Senior Management Personnel of the Company is also
attached to this Report.
K. Risk Management
The Managing Director of the Company is entrusted with the task of
identifying, monitoring and taking steps for mitigating various risks
which the Company is likely to encounter as part of its business
operations. He periodically presents to the Board and the Audit
Committee for review, the risks faced by the Company and the steps
taken to mitigate the same.
L. Particulars of Employees
During the financial year 2013-14, no employee of the Company has drawn
remuneration in excess of the limits specified under Section 217(2A) of
the Companies Act, 1956 read with Companies (Particulars of Employees)
Rules, 1975, as amended.
M. Conservation of Energy, Technology Absorption and Research &
Development
Your Company''s power requirements are very minimal. Your Company
however takes every possible step to make optimum utilization of energy
and avoid unnecessary wastage of power.
Your Company keeps itself updated with the latest technology available
in the market. Your Company constantly strives to enhance
state-of-the-art development standards to meet the ever growing
challenges of the corporate world. Your company aims at providing
future-proof and future adaptable technologies to all its clients.
N. Foreign Exchange Earnings and Outgo
During the financial year 2013-14, the total foreign exchange earnings
on account of Interest on Loan to the Company''s wholly owned foreign
subsidiary was Rs. 14.27 lakhs. There was no expenditure incurred by
the Company in foreign currency during financial year 2013-14.
O. Appreciation
Your Directors wish to place on record their appreciation to all
shareholders, customers, suppliers and bankers for their co-operation
and support extended to the Company.
Your Directors also place on record their appreciation of the efforts
and contribution during 2013-14 of the Company''s employees.
Statement pursuant to general exemption under Section 212(8) of the
Companies Act, 1956 relating to subsidiary companies
The Company undertakes that the audited annual accounts and other
related information of the subsidiaries, where applicable, would be
made available to the shareholders upon request. The annual accounts of
the subsidiaries are also available for inspection at the registered
office of the company during business hours. The same has also been
put-up on our website www.aurumsoftsystems.com
For and on Behalf of the Board of Directors
SRIKANTH RAMANATHAN K. BALAJI
Managing Director Chairman
Place : Chennai
Date : May 30, 2014
Mar 31, 2013
Dear Members,
The Directors are pleased to present the report on our business and
operations of your Company along with the audited accounts for the fi
nancial year ended March 31, 2013.
A. Results of operation
31-03-2013 31-03-2012 31-03-2013 31-03-2012
Particulars (<) (<) (<) (<)
Consolidated Standalone
Revenue from
operation
and other income 1,114,691,747 974,838,848 174,241,508 185,832,226
Earnings before
Depreciation and 35,970,196 37,071,078 11,919,129 14,106,510
amortization
Depreciation and
amortization 19,062,007 20,826,062 10,785,788 10,785,788
Profit Before Tax 16,908,189 16,245,016 1,133,341 3,320,722
Less : Provision
for Taxation
Income Tax 440,791 934,129 477,706 723,321
Deferred
Tax 1,019,318 (2,195,478) 300,998 109,732
MAT Credit
Entitlement - 224,055 - 224,055
Profit After Tax 15,448,080 17,282,310 354,637 2,263,614
B. Dividend
Your directors have decided to utilize the internal accruals for future
growth. Hence, your Directors have not recommended any dividend for the
current year. Your Directors believe that this will increase the
long-term shareholder value.
C. Withdrawal of Amalgamation
Your Company initiated the Amalgamation of Point Red Telecom Limited
with the Company during October 2011. During the fi nancial year
2012-13, there has been a signifi cant down turn in the fi nancial
position and profi tability of Point Red Telecom Limited. The 4G and
WiMAX equipment business in which Point Red Telecom Limited is engaged
is also facing a signifi cant slowdown and instability. In view of
this, your directors felt that the synergies and benefi ts expected
from the business combination may not be achieved and have decided to
call-off the amalgamation of Point Red Telecom Limited in the interest
of the Company and its shareholders.
D. Directors
Mr. Srikanth Ramanathan was re-appointed as Managing Director of the
Company for a period of 1 year with eff ect from February 6, 2012.
Accordingly, his term as Managing Director ended on February 5, 2013.
The Board of Directors of the Company based on the recommendation of
the Remuneration committee have re-appointed Mr. Srikanth Ramanathan as
Managing Director for a period of one year with eff ect from February
6, 2013. Mr. Srikanth Ramanathan has expressed his desire to not draw
any remuneration from the company and accordingly, he is not being paid
any remuneration w.e.f. January 1, 2012. The Board of Directors
recommend the re-appointment of Mr. Srikanth Ramanathan as Managing
Director for a period of 1 year with eff ect from February 6, 2013.
In accordance with the requirements of the Companies Act, 1956 and the
Articles of Association of the Company, Mr. S. Ramakrishnan and Mr.
K.S. Vaidyanathan, Directors, retire by rotation at the forthcoming
Annual General Meeting of the Company and being eligible, off er
themselves for re-appointment.
The information to shareholders as per Clause 49 of the Listing
agreement pertaining to brief resume, expertise in functional areas,
names of Companies in which Mr. Srikanth Ramanathan, Mr. S.
Ramakrishnan and Mr. K.S. Vaidyanathan are Directors etc., is being
provided in the Notice of the Annual General Meeting which forms part
of this Annual Report.
F. Auditors
Mr. S. Ramanath, Chartered Accountant, Coimbatore retires as Auditor of
the Company at the forthcoming Annual General Meeting and is eligible
for re-appointment. The Company has received confi rmation that his
appointment, if made, will be within the limits prescribed under
Section 224(1B) of the Companies Act, 1956. The Directors recommend
that Mr. S. Ramanath, be appointed as the Company''s auditor to hold
offi ce until the conclusion of the next Annual General Meeting.
G. Directors'' Responsibility Statement
Your Directors'' hereby confi rm in terms of Section 217(2AA) of the
Companies Act, 1956 that:
1. In the preparation of the annual accounts for the year ended March
31, 2013, the applicable accounting standards have been followed and
there are no material departures;
2. The accounting policies listed in Note 2 to the Notes forming part
of the fi nancial statements have been selected and applied
consistently and judgements and estimates that are reasonable and
prudent made so as to give a true and fair view of the state of the aff
airs of the Company at the end of the fi nancial year on March 31, 2013
and of the profi t of the Company for that year;
3. Proper and suffi cient care has been taken for the maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act, 1956 for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities;
4. The annual accounts for the year ended March 31, 2013, have been
prepared on a going concern basis.
H. Deposits
During the year, your Company has not accepted any deposits from the
public.
I. Subsidiary
Your Company has 3 subsidiaries namely, Dicetek (Sing) Pte Limited,
Singapore, Dicetek LLC, Dubai and Dice Technologies Inc., USA. All
these subsidiaries are engaged in the business of providing IT Services
and Consulting.
As required under the Listing Agreements entered into with the Stock
Exchanges, a consolidated fi nancial statement of the Company and all
its subsidiaries is attached. The consolidated fi nancial statements
have been prepared in accordance with the relevant accounting standards
as prescribed under Section 211(3C) of the Companies Act, 1956.
Pursuant to the provisions of Section 212(8) of the Companies Act 1956,
the Ministry of Corporate Aff airs vide its circular dated February 8,
2011 has granted general exemption from attaching the balance sheet,
statement of profi t and loss and other documents of the subsidiary
companies with the balance sheet of the Company. A statement containing
brief fi nancial details of the Company''s subsidiaries for the fi
nancial year ended March 31, 2013 is included in the Annual Report. The
annual accounts of these subsidiaries and the related detailed
information will be made available to any member of the Company/its
subsidiaries seeking such information at any point of time and are also
available for inspection by any member of the Company/its subsidiaries
at the registered offi ce of the Company and also at the respective
registered offi ce of the subsidiaries for inspection.
The same has also been put-up on the Company''s website,
www.aurumsoftsystems.com.
J. Corporate Governance
In terms of Clause 49 of the Listing Agreement with the stock
exchanges, a Corporate Governance Report is made part of this Annual
report.
A certificate from a practicing Company Secretary regarding compliance
of the conditions stipulated for Corporate Governance under Clause 49
of the Listing Agreement is attached to this report.
The declaration by the Managing Director addressed to the members of
the Company pursuant to Clause 49 of the Listing Agreement regarding
adherence to the Code of Conduct by the Members of the Board and by the
Members of the Senior Management Personnel of the Company is also
attached to this Report.
K. Risk Management
The Managing Director of the Company is entrusted with the task of
identifying, monitoring and taking steps for mitigating various risks
which the Company is likely to encounter as part of its business
operations. He periodically presents to the Board and the Audit
Committee for review, the risks faced by the Company and the steps
taken to mitigate the same.
L. Particulars of Employees
During the financial year 2012-13, no employee of the Company has
drawn remuneration in excess of the limits specifi ed under Section
217(2A) of the Companies Act, 1956 read with Companies (Particulars of
Employees) Rules, 1975, as amended.
M. Conservation of Energy, Technology Absorption and Research &
Development
Your Company''s power requirements are very minimal. Your Company
however takes every possible step to make optimum utilization of energy
and avoid unnecessary wastage of power.
Your Company keeps itself updated with the latest technology available
in the market. Your Company constantly strives to enhance
state-of-the-art development standards to meet the ever growing
challenges of the corporate world. Your company aims at providing
future- proof and future adaptable technologies to all its clients.
N. Foreign Exchange Earnings and Outgo
During the financial year 2012-13, the Company provided Technical and
other support services to its subsidiary in USA.
The total foreign exchange earnings during the year was Rs. 13.58 lakhs.
There was no expenditure incurred by the Company in foreign currency
during fi nancial year 2012-13.
O. Appreciation
Your Directors wish to place on record their appreciation to all
shareholders, customers, suppliers and bankers for their co-operation
and support extended to the Company.
Your Directors also place on record their appreciation of the eff orts
and contribution during 2012-13 of the Company''s employees.
For and on behalf of the Board of Directors
S. Ramakrishnan
Chennai, August 6, 2013 Chairman
Mar 31, 2012
The Directors are pleased to present the report on our business and
operations of your Company along with the audited accounts for the
financial year ended March 31, 2012.
A. Results of operation
31-03-2012 31-03-2011 31-03-2012 31-03-2011
Particulars (Rs.) (Rs.) (Rs.) (Rs.)
Consolidated Standalone
Revenue from
operation
and other income 974,838,848 646,133,244 185,832,226 17,552,540
Earnings More
Depredation and 37,071,078 22,209,290 14,106,510 6,461,955
amortization
Depreciation and
amortization 20,826,062 7,976,290 10,785,788 760,634
Profit Before Tax 16,245,016 14,233,000 3,320,722 5,701,321
Less :
Provision for
Taxation
Income Tax 934,129 889,884 723,321 638,295
Deferred Tax (2,195,478) (2,814,991) 109,732 (3,533,288)
MAT Credit
Entitlement 224,055 (604,701) 224,055 (604,701)
Profit After Tax 17,282,310 16,762,808 2,263,614 9,201,015
B. Dividend
Yours directors have decided to utilize the internal accruals for
future growth. Hence, your Directors have not recommended any dividend
for the current year. Your Directors believe that this will increase
the long-term shareholder value.
D. Directors
Mr. Srikanth Ramanathan was appointed as Managing Director of the
Company for a period of 3 years with effect from February 6, 2009.
Accordingly, his initial term as Managing Director ended on February 5,
201 2. The Board of Directors of the Company based on the
recommendation of the Remuneration committee has re-appointed Mr.
Srikanth Ramanathan as Managing Director for a period of one year with
effect from February 6, 201 2 and the same has also been approved by
the shareholders by way of postal ballot. Mr. Srikanth Ramanathan has
expressed his desire to not draw any remuneration from the company and
accordingly, he is not being paid any remuneration with effect from
January 1, 2012.
In accordance with the requirements of the Companies Act, 1956 and the
Articles of Association of the Company, Mr. V. Ganapathi Subramanian
and Mr. K. Balaji, Directors, retire by rotation at the forthcoming
Annual General Meeting of the Company and being eligible, offer
themselves for re-appointment.
The information to shareholders as per Clause 49 of the Listing
agreement pertaining to brief resume, expertise in functional areas,
names of Companies in which Mr. V. Ganapathi Subramanian, and Mr. K.
Balaji are Directors etc., is being provided in the Notice of the
Annual General Meeting which forms part of this Annual Report.
E. Auditors
Mr. R. R. Rajkumar, Chartered Accountant, Chennai retires as Auditor of
the Company at the forthcoming Annual General Meeting. He has not
offered himself for re-appointment. Pursuant to Section 225 and other
applicable provisions of the Companies Act, 1956, a special notice has
been received from a member proposing the appointment of Mr. S.
Ramanath, Chartered Accountant, Coimbatore (Membership No. 29416) as
the statutory auditor of the company to hold office from the conclusion
of the ensuing annual general meeting until the conclusion of the next
annual general meeting. Mr. S. Ramanath, Chartered Accountant,
Coimbatore, (Membership No. 29416) has also expressed his willingness
to act as statutory auditor of the company, if appointed. The Directors
recommend the appointment of Mr. S. Ramanath, Chartered Accountant,
Coimbatore, as the Company's auditor to hold office until the
conclusion of the next Annual General Meeting. The Company has also
received confirmation that his appointment, if made, will be within the
limits prescribed under Section 224(1B) of the Companies Act, 1956.
F. Directors' Responsibility Statement
Your Directors' hereby confirm in terms of Section 21 7(2AA) of the
Companies Act, 1956 that:
1. In the preparation of the annual accounts for the year ended March
31, 2012, the applicable accounting standards have been followed and
there are no material departures;
2. The accounting policies listed in Note 2 to the Notes forming part
of the financial statements have been selected and applied consistently
and judgments and estimates that are reasonable and prudent made so as
to give a true and fair view of the state of the affairs of the Company
at the end of the financial year on March 31, 2012 and of the profit of
the Company for that year;
3. Proper and sufficient care has been taken for the maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act,
1 956 for safeguarding the assets of the Company and for preventing and
detecting fraud and other irregularities;
4. The annual accounts for the year ended March 31, 2012, have been
prepared on a going concern basis.
G. Deposits
During the year, your Company has not accepted any deposits from the
public.
H. Subsidiary
Your Company has 3 subsidiaries namely, Dicetek (Sing) Pte Limited,
Singapore, Dicetek LLC., Dubai and Dice Technologies Inc., USA. All
these subsidiaries are engaged in the business of providing IT Services
and Consulting.
As required under the Listing Agreements entered into with the Stock
Exchanges, a consolidated financial statement of the Company and all
its subsidiaries is attached. The consolidated financial statements
have been prepared in accordance with the relevant accounting standards
as prescribed under Section 211(3C) of the Companies Act, 1956.
Pursuant to the provisions of Section 212(8) of the Companies Act 1956,
the Ministry of Corporate Affairs vide its circular dated February 8,
2011 has granted general exemption from attaching the balance sheet,
statement of profit and loss and other documents of the subsidiary
companies with the balance sheet of the Company. A statement containing
brief financial details of the Company's subsidiaries for the financial
year ended March 31, 2012 is included in the Annual Report. The annual
accounts of these subsidiaries and the related detailed information
will be made available to any member of the Company/its subsidiaries
seeking such information at any point of time and are also available
for inspection by any member of the Company/its subsidiaries at the
registered office of the Company and also at the respective registered
office of the subsidiaries for inspection.
The same has also been put-up on the Company's website,
www.aurumsoftsystems.com
I. Corporate Governance
In terms of Clause 49 of the Listing Agreement with the stock
exchanges, a Corporate Governance Report is made part of this Annual
report.
A certificate from a practicing Company Secretary regarding compliance
of the conditions stipulated for Corporate Governance under Clause 49
of the Listing Agreement is attached to this report.
The declaration by the Managing Director addressed to the members of
the Company pursuant to Clause 49 of the Listing Agreement regarding
adherence to the Code of Conduct by the Members of the Board and by the
Members of the Senior Management Personnel of the Company is also
attached to this Report.
J. Risk Management
The Managing Director of the Company is entrusted with the task of
identifying, monitoring and taking steps for mitigating various risks
which the Company is likely to encounter as part of its business
operations. He periodically presents to the Board and the Audit
Committee for review, the risks faced by the Company and the steps
taken to mitigate the same.
K. Particulars of Employees
During the financial year 2011-12, no employee of the Company has drawn
remuneration in excess of the limits specified under Section 217(2A) of
the Companies Act, 1956 read with Companies (Particulars of Employees)
Rules, 1975, as amended. Hence, the particulars of employees'
remuneration prescribed under Section 217(2A) of the Companies Act,
1956 has not been attached to this Report.
L. Conservation of Energy, Technology Absorption and Research &
Development
Your Company's power requirements are very minimal. Your Company
however takes every possible step to make optimum utilization of energy
and avoid unnecessary wastage of power.
Your Company keeps itself updated with the latest technology available
in the market. Your Company constantly strives to enhance
state-of-the-art development standards to meet the ever growing
challenges of the corporate world. Your company aims at providing
future-proof and future adaptable technologies to all its clients.
M. Foreign Exchange Earnings and Outgo
During the financial year 2011-12, the Company provided Technical and
other support services to its subsidiary in USA.
The total foreign exchange earnings during the year was Rs. 13.76 lakhs.
There was no expenditure incurred by the Company in foreign currency
during FY 2011-12.
N. Appreciation
Your Directors wish to place on record their appreciation to all
shareholders, customers, suppliers and bankers for their co-operation
and support extended to the Company.
Your Directors also place on record their appreciation of the efforts
and contribution during 2011-12 of the Company's employees.
For and on behalf of the Board of Directors
S. Ramakrishnan
Chennai, August 14, 2012 Chairman
Mar 31, 2010
The Directors are pleased to present the report on our business and
operatons of your Company along with the audited accounts for the
fnancial year ended March 31, 2010.
31-03-2010 31-03-2010 31-03-2009
Particulars (In Rs.) (In Rs.) (In Rs.)
Consolidated Standalone
Sofware and Consulting 480,029,245 20,908,815 9,728,200
Other Income 7,770,694 7,415,503 1,174,947
Total Income 487,799,939 28,324,318 10,903,147
Total Expenditure 491,607,285 35,981,009 7,772,375
Proft / (Loss) before Depreciaton (3,807,346) (7,656,691) 3,130,772
Less: Depreciaton 6,105,430 400,117 12,427
Proft / (Loss) before tax (9,912,776) (8,056,808) 3,118,345
Less : Provision for Taxaton
Income Tax 437,278 (10,437) 2,049,671
Deferred Tax (386,454) 694,379 (677,078)
Proft / (Loss) afer Tax (9,963,600) (8,740,749) 1,745,752
Less: Transfer to Statutory Reserve - - 349,150
(9,963,600) (8,740,749) 1,396,602
Add : Balance brought from last year 16,521,929 16,521,929 15,125,327
Balance Available for appropriaton 6,558,329 7,781,180 16,521,929
Appropriatons:
Proposed Dividend 4,340,000 4,340,000 -
Tax on Proposed Dividend 720,874 720,874 -
Balance Carried forward to
Balance Sheet 1,497,455 2,720,306 16,521,929
Basic and Diluted Earning per share
(in Rs.) (1.15) (1.01) 0.36
B. Change of name of the Company
In line with the new line of Business undertaken by the Company, the
name of the Company has been changed from Jaisal Securites Limited to
Aurum Sof Systems Limited w.e.f. February 4, 2010.
C. Dividend
Your Directors recommend a dividend of Re. 0.50 per equity share of Rs.
10 each for the year ended March 31, 2010, subject to the approval of
the shareholders at the ensuing Annual General Meeting.
D. Management Discussion and Analysis report
Industry structure and developments *
The Indian IT-BPO sector has become the countryÃs premier growth
engine, crossing signifcant milestones in terms of revenue growth,
employment generaton and value creaton, in additon to becoming the
global brand ambassador for India. During 2009-10, the industry
performance was afected by recessionary headwinds in the global market
thereby resulting in muted business opportunites.
The Industry has started working on diversifcaton beyond core oferings
and markets through new business and pricing models, specialise to
provide end-to-end service oferings with deeper penetraton across
vertcals, transform the process delivery through re-engineering and
enabling technology, innovate through research and development and
drive inclusive growth in India by developing targeted solutons for the
domestc market.
Indias technology and business services industry has fourished in the
last decade. A bright future lies ahead and the industry has much to
look forward to, with the potental to quadruple its revenues over the
next decade. Several macro-economic and social trends will support the
rise of the IT-BPO sector in the future, in core and emerging markets.
India faces serious competton from other global sourcing locatons, and
to retain its advantage, concerted efort is needed by all stakeholders.
The beginning of 2010 has signaled the revival of outsourcing within
core markets, along with the emerging markets increasingly adopting
outsourcing for enhanced compettveness. Key demand indicators in the
last two quarters such as increased deal fow, volume growth, stable
pricing, and faster decision making has made the industry post good
results. Though full recovery is expected in another two quarters,
development of new growth levers, improved efciency and changing demand
outlook signifes early signs of recovery.
Opportunites *
The beginning of the new decade heralds the slow, but steady end of the
worst recession in the past 60 years. Improving economic conditons
signifying return of consumer confdence and renewal of business growth,
is expected to drive IT spending going forward. IT services is expected
to grow by 2.4 per cent in 2010, and 4.2 per cent in 2011 as companies
coming out of recession harness the need for informaton technology to
create compettve advantage.
Organisatons now recognise ITÃs contributon to economic performance
extending beyond managing expenditures. They expect IT to play a role
in reducing enterprise costs, not merely with cost cuting but by
changing business processes, workforce practces and informaton use.
The surge expected in the global technology related spend provides your
Company with enough oppurtunites to exploit. Your Company together with
its Subsidiaries has the experience and the expertse in developing
trustworthy and innovatve IT solutons.
Segment-wise performance
Your Company has cancelled its registraton as a Non-banking fnance
company and your Company together with its wholly owned subsidiaries is
now concentrating entrely on its new line of business viz., IT Solutons
and Consulting services.
During the fnancial year 2009-10, in relaton to the NBFC actvites, your
Company has earned only interest income amounting to Rs. 3.83 lakhs from
the unsecured loans lent by the Company, when it was into NBFC
business. Also loans and advances to the tune of Rs. 157.08 lakhs have
been writen-of as the same is found not realisable. Your Company is
taking steps to realise the balance fnancial assets in its books. Apart
from that, there has been no actvity pertaining to the Financial
Services business segment.
Apart from the above, entre revenue (except other income) of your
Company and its subsidiariesà is atribut- able to IT solutons and
consulting business.
Future Business Outlook
As a major step towards foraying into the global market, your Company
acquired Dicetek (Sing) Pte Limited, Singapore and its Subsidiaries
Dicetek LLC., Dubai and Dice Technologies Inc., USA. With these
acquisitons, your Company aims to provide globally, IT Solutons and IT
Consulting / Professional Services across a variety of industries
including Banking & Financial Services, Logistcs, Supply Chain,
Manufacturing, Hospitality, Retail and Healthcare.
Realizing that globalizaton, rapid market change and regulatons have
turned the desire for more agile and usable applicatons, the company,
along with its subsidiaries, has created and delivered dynamic business
applicatons, apart from partnering with global vendors like Microsof,
Oracle, SAP and IBM to provide enterprise solutons with focus on
cross-functonal applicatons.
Keeping in mind the growing trend of small businesses that are moving
into an enterprise level system, your Company has invested in the R & D
of mid ter ERP systems and strategically acquired the worldwide
copyright (except Republic of Maldives) of the Human Resource and
Retail sofware from Intek Systems Private Limited, Republic of
Maldives. Your Company and its subsidiaries plan to further enhance and
market the Sofware globally.
The group has experience and expertse in developing complex business
systems and is continuously innovating and investing on latest
technologies and applicatons. With the popularity of mobile features
and applicatons, the group is developing a variety of wireless & mobile
applicatons and mobile client interfaces to our mid ter ERP systems.
The group is also developing applicatons that assist in making business
decisions by providing simulaton, predicton, optmizaton and other
analytcs.
Over the years, your Company has evolved from an applicaton developer
to a full-fedged IT Services player providing Web applicaton services,
ERP services, CRM services, Infrastructure services, Consulting services
and end to end System integraton. Your Company has also recently
ventured into IT Managed Services. Your Company would be providing
Remote Infrastructure Management (RIM) and cloud computing services that
ofer our clients access to best-in-class process management at reduced
capital expenditure levels.
Your Company aims at making its customerÃs vision a reality by
providing high quality technical solutons & services. Your Company also
upholds the values of Commited, Customer-driven, Quality and Total
Solutons to the customer.
The opportunites at hand indicate a strong momentum, supporting a
positve outlook. A bright future lies ahead and the Company has much to
look forward to, with the potental to surge its revenues signifcantly
over the coming years.
Risks and concerns
Your CompanyÃs revenues from Informaton Technology business are derived
in US Dollar. The majority of the expenses are in Indian rupees. The
prevailing currency fuctuaton does bring in an uncertainty on the
receivables which may have an adverse impact on your companyÃs revenues
and gross margins.
The recessionary headwinds prevailing in the global economy has
resulted in cuts in the IT budget of various companies. The resultant
reducton in the spend on IT services by various companies may result in
muted business oppurtunites for your companyÃs service thereby afecting
your CompanyÃs revenues.
The income tax exempton available to your Company under Sofware
Technology Parks of India Scheme and Secton 10A of the Income Tax Act
would not be available from the Financial year 2011-12, unless the same
is extended by the Government. The sunset of this exempton will
increase the overall tax payable by your Company in the coming years
which would have an adverse impact on the proftability of your Company.
Further, the Indian IT industry is likely to face stf competton from
new outsourcing destinaton in the world which seek to emulate IndiaÃs
success in a cost efectve manner. This would result in a stf pricing
war in the global IT industry. Going forward, this cost compettveness
in the global IT industry might have an adverse impact on the gross
margins of your Company.
Internal control systems and their adequacy
The Company adopts strong internal control systems to ensure optmal
utlizaton and protecton of assets, tmely compliance with the statutory
provisions and facilitate accurate and tmely compilaton of fnancial
statements and other reports to the management. The entre evaluaton of
internal controls of your company is carried out by the Chief Financial
Officer. The Audit Committee then on a periodic basis, reviews the
adequacy of Internal Control Systems.
Discussion on fnancial performance of the Company and the Group
Share Capital and Premium
The Company has a paid-up capital of Rs. 8.68 Crores, as on March 31,
2010. During the fnancial year 2009-10, there was no increase in the
authorized or paid-up share capital of the Company.
The balance in the share premium account as on March 31, 2010 is Rs.
22.72 Crores, which represents the premium on the shares issued on
preferental basis during December 2008.
Statutory Reserves
The balance in the statutory reserves as on March 31, 2010 is Rs. 41.68
lakhs. The Company has not transferred any amount to the statutory
reserves as the Company has got itself de-registered as a NBFC.
Turnover & Proftability
Your Company has cancelled its registraton as a Non-banking fnance
company and is now concentrating entrely on its new line of business
viz., IT Solutons and Consulting services.
During 2009-10, your Company achieved a turnover of Rs. 209.09 lakhs
from IT solutions and consulting services compared to Rs. 97.28 lakhs in
2008-09. Other income was Rs. 74.15 lakhs compared to Rs. 11.75 lakhs
during the last fscal. Loss before tax stood at Rs. 80.57 lakhs
compared to previous yearÃs Proft before tax of Rs. 31.18 lakhs. Loans
to the tune of Rs. 157.08 lakhs, extended by the company when it was a
NBFC, have been found to be not realizable and have been writen-of as
bad debts. This has had an adverse efect on the proftability of the
Company for the financial year 2009-10.
The group achieved a turnover of Rs. 4800.29 lakhs during the fnancial
year 2009-10(taking into account the turnover of the subsidiaries from
the date of their acquisiton by the Company). The Loss afer tax of the
group as a whole stood at Rs. 99.64 lakhs. As stated earlier, the
write-of of loans amounting to Rs. 157.08 lakhs has had an adverse
impact on the proftability of the Group for the fnancial year 2009-10.
Fixed Assets
Your Company made an additon of Rs. 34.72 lakhs towards fxed assets of
which signifcant amount was incurred on acquisiton of IPRs from M/s.
Intek Systems Private Limited, Republic of Maldives for Rs. 30.90
lakhs. Other than this, Rs. 2.62 lakhs was spent on purchase of
Computers and Rs. 1.10 lakhs on Furnitures and Fixtures. The
depreciaton in respect of all assets has been provided in accordance
with the requirements of Companies Act, 1956.
The total fixed assets of the group stood at Rs. 173.07 lakhs as on
March 31, 2010.
Investments
During the financial year 2009-10, your Company acquired 100% stake in
M/s. Dicetek Sing Pte Limited, Singapore for Rs. 2205 lakhs. Your
Company has also invested the idle funds in Mutual Funds with dividend
re-investment opton. The value of investment in Mutual Funds together
with the dividend re-invested as on March 31, 2010 was Rs. 721.71
lakhs.
Goodwill on consolidaton
Your Company had acquired 100% stake in M/s. Dicetek Sing Pte Limited,
Singapore for Rs. 2205 lakhs. The
goodwill on consolidaton as on the date of acquisiton (i.e. July 28,
2009) was computed at Rs. 1286.45 lakhs.
Debtors
Sundry Debtors represents amount receivable from one of the Subsidiary
Company viz., M/s. Dicetek LLC.,
Dubai towards license fee. Sundry Debtors stood at Rs. 179.68 lakhs as
at March 31, 2010.
The total trade receivables of the group stood at Rs. 1165.05 lakhs.
Cash and Bank Balance
The cash and bank balance represents Cash in hand, Bank Balance and
amounts placed in Fixed deposits with Banks. The Cash and bank balances
have decreased from Rs.2866.12 lakhs to Rs. 43.49 lakhs. A signifcant
porton of the funds raised through the preferental issue was expended
on acquisiton of M/s. Dicetek (Sing) Pte Limited. The balance idle
funds have been invested in Mutual Funds. This has led to the decrease
in the cash and bank balance available with the Company as on March 31,
2010.
The Group has a Cash and bank balance of Rs. 505.95 lakhs, as at the
end of Financial year 2009-10.
Loans and Advances
Loans and advances as at March 31, 2010 have decreased to Rs. 92.98
lakhs from Rs. 438.72 lakhs. This is mainly on account of realizaton of
loans given by the Company when it was a NBFC. Also loans to the tune
of Rs. 157.08 lakhs have been writen-of as the same have been found to
be not realizable. As on March 31, 2010, loans amounting to Rs. 39.57
lakhs, which was extended when the Company was a NBFC, are stll
remaining to be realized. The balance amount of loans and advances
represents Rs. 28.65 lakhs towards advance taxes paid, Rs. 18.28 lakhs
of advances given to Mr. Nakthamal Bhagwandas and Rs. 6.48 lakhs of
rental and other advances / deposits.
Current Liabilites and Provision
Current liabilites and provisions as at March 31, 2010 stood at Rs.
70.21 lakhs compared to Rs. 67.75 lakhs in the previous year. The
Provision on non-performing assets to the tune of Rs. 19.57 lakhs has
been reversed as the loans in respect of which the provisions were made
have been either realized or fully writen-of in the books. Also, sundry
creditors and other liabilites have decreased from Rs. 29.90 lakhs to
Rs. 0.83 lakhs as the Company has setled all the liabilites due to its
favourable cash positon.
Material developments in Human Resources / Industrial Relatons front,
including number of people employed
With the available abundant experience and expertse of our employees,
your Company and its subsidiaries believes that Human Resource is the
major asset of the Group. The Group has a long term strategy to atract
and retain the best talents. Development of human resources will be a
key challenge of your Company/group.
Consequent to cancellaton of the Business Transfer Agreement with Intek
Systems Private Limited, Republic of Maldives (ÃIntekÃ), your Company
has during the fnancial year 2009-10, transferred back the employees
who were taken over by your Company to Intek.
As at March 31, 2010, your Company and its subsidiaries had 343
employees on its rolls.
E. Directors
In accordance with the requirements of the Companies Act, 1956 and the
Artcles of Associaton of the Company, Mr. Ganapathi Subramanian,
Director, retres by rotaton at the forthcoming Annual General Meeting of
the Company and being eligible ofers himself for re-appointment.
The informaton to shareholders as per Clause 49 of the Listing agreement
pertaining to brief resume, expertse in functonal areas, names of
Companies in which Mr. Ganapathi Subramanian is a Director etc., is
being provided in the Notce of the Annual General Meeting which forms
part of this Annual Report.
F. Auditors
Mr. R.R.Rajkumar, Chartered Accountant, Chennai retres as Auditor of
the Company at the forthcoming Annual General Meeting and is eligible
for reappointment. The Directors recommend that Mr. R.R.Rajkumar, be
appointed as the CompanyÃs auditor to hold ofce untl the conclusion of
the next Annual General Meeting. The Company has received confrmaton
that his appointment, if made, will be within the limits prescribed
under Secton 224(1B) of the Companies Act, 1956.
G. Directors Responsibility Statement
Your Directors hereby confrm in terms of Secton 217(2AA) of the
Companies Act, 1956 that:
1. In the preparation of the annual accounts for the year ended March
31, 2010, the applicable accounting standards have been followed;
2. The accounting policies listed in Schedule XI to the Notes to
Accounts have been selected and applied consistently and judgements and
estmates that are reasonable and prudent made so as to give a true and
fair view of the state of the afairs of the Company at the end of the
fnancial year on March 31, 2010 and of the proft of the Company for
that year;
3. Proper and sufcient care has been taken for the maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act, 1956 for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularites;
4. The annual accounts for the year ended March 31, 2010, have been
prepared on a going concern basis.
H. Deposits
During the year, your Company has not accepted any deposits from the
public.
I. Subsidiary
On July 28, 2009, your Company acquired 100% stake in M/s. Dicetek Sing
Pte Limited, Singapore for US$ 4.5 million. Consequent to this, M/s.
Dicetek Sing Pte. Limited, Singapore and its Subsidiaries namely, M/s.
Dice Technologies Inc, U.S.A. and M/s. Dicetek LLC., Dubai, have become
subsidiaries of the Company during the fnancial year 2009-10. All these
subsidiaries are engaged in providing IT solutons and consulting
business. Your Company has also plans to market its products and
services globally through its subsidiaries.
Your Company has vide leter no. 47/472/2010-CL-III dt. July 9, 2010,
received the approval from the Ministry of Corporate Afairs under
Secton 212(8) of the Companies Act, 1956, exempting the Company from
ataching the Annual Report of subsidiary companies with the Annual
Report of the Company and to provide the accounts in the same manner as
certfed by overseas auditors in the respectve countries where the
subsidiaries are situated. The statement as required under the above
mentoned approval leter and Secton 212 is Annexed and forms part of
this report.
The consolidated financial statements of the subsidiaries duly audited
are presented along with the accounts of your Company. The annual
accounts of subsidiary companies are kept at the CompanyÃs registered
ofce and also at the respectve registered ofce of the subsidiaries for
inspecton and shall be made available to the members seeking such
information. The same has also been put-up on the CompanyÃs website,
www. aurumsoftsystems.com.
J. Corporate Governance
In terms of Clause 49 of the Listing Agreement with the stock exchanges,
a Corporate Governance Report is made part of this Annual report.
A certificate from a practcing Company Secretary regarding compliance of
the conditons stpulated for Corporate Governance under Clause 49 of the
Listing Agreement is atached to this report.
The declaraton by the Managing Director addressed to the members of the
Company pursuant to Clause 49 of the Listing Agreement regarding
adherence to the Code of Conduct by the Members of the Board and by the
Members of the Senior Management Personnel of the Company is also
atached to this Report.
K. Risk Management
The Managing Director of the Company is entrusted with the task of
identfying, monitoring and taking steps for mitgating various risks
which the Company is likely to encounter as part of its business
operatons. He periodically presents to the Board and the Audit Commitee
for review, the risks faced by the Company and the steps taken to
mitgate the same.
As required by the provisions of Secton 217 (2A) of the Companies Act,
1956 read with Companies (Partculars of Employees) Rules, 1975 as
amended, the name and other partculars of the employees are set out in
the Annexure to the DirectorÃs Report.
M. Conservation of Energy, Technology Absorption and Research &
Development
Your CompanyÃs power requirements are very minimal. Your Company
however takes every possible step to make optmum utlizaton of energy
and avoid unnecessary wastage of power.
Your Company keeps itself updated with the latest technology available
in the market. Your Company constantly strives to enhance
state-of-the-art development standards to meet the ever growing
challenges of the corporate world. Your company aims at providing
future-proof and future adaptable technologies to all its clients.
N. Foreign Exchange Earnings and Outgo
In terms of the erstwhile Business Transfer Agreement with M/s. Intek
Systems Private Limited, your Company was exporting sofware to Republic
of Maldives. This said Business Transfer Agreement has been terminated.
The Company has acquired subsidiaries in Singapore, Dubai and United
States of America. In order to market its sofware in some select
Middle-east countries, through its subsidiary, your Company has entered
into a licensing and technical support agreement with Dicetek LLC.,
Dubai. During 2010-11, the Company has also entered into technical
support agreement with its subsidiaries. All the revenues from these
services are realized in US Dollar.
The details of foreign exchange earnings and outgo is given below:
Year ended Year ended
31-03-2010 31-03-2009
(in Rs.) (in Rs.)
Expenditure incurred in Foreign Currency
(on accrual basis)
Rent 1,462,883 179,486
Overseas Allowance 2,539,484 422,857
Bad Debts 1,215,977 -
Repairs & Maintenance - Others 117,654 15,413
Telephone Expenses 435,054 53,508
Travelling, Hotel Boarding and Lodging 140,900 60,104
Electricity Expenses 252,779 35,103
Work Permit 58,284 24,733
Bank Charges 6,910 -
Staf Welfare 721,660 93,154
Total Expenditure in Foreign Currency 6,951,585 884,358
Income earned in Foreign Currency
(on accrual basis)
Income from Sofware Services and Products 19,662,565 9,728,200
O. APPRECIATION
Your Directors wish to place on record their appreciaton to all
shareholders, customers, suppliers and bankers for their co-operaton
and support extended to the Company.
Your Directors also place on record their appreciaton of the eforts and
contributon during 2009-10 of the CompanyÃs employees.
For and on behalf of the Board of Directors
Chennai, A. BALASUBRAMANIAN
August 14, 2010 Chairman
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