Home  »  Company  »  Encore Software  »  Quotes  »  Directors Report
Enter the first few characters of Company and click 'Go'

Directors Report of Encore Software Ltd.

Mar 31, 2015

Dear Members:

The Directors have pleasure in presenting before you the Annual Report of the Company together with the Audited Statements of Accounts for the 23rd year ended 31st March 2015.

1. FINANCIAL SUMMARY/HIGHLIGHTS, OPERATIONS, STATE OF AFFARIS [INSERT AS PER INFORMATION FROM THE COMPANY]

(Rs. in Rupees)

Particulars 2014-2015 2013-2014

Gross Income 23,488 2,35,202

Profit Before Interest and (35,13,870) (51,71,086) Depreciation

Finance Charges 2,18,14,787 2,01,19,052

Gross Profit (2,53,28,657) (2,52,90,138)

Provision for Depreciation — 62,647

Net Profit Before Tax (2,53,28,657) (2,53,52,785)

Provision for Tax — —

Net Profit After Tax (2,53,28,657) (2,53,52,785)

Balance of Profit brought forward (38,40,17,844) (35,86,65,059)

Balance available for appropriatio (40,93,46,501) (38,40,17,844)

While the Company has been striving to get orders for the SATHI as well as trying to make progress in the Brazil project, it has also been working on finding new avenues of business, especially in applying information technology in the domains of Business Intelligence and Human Resources Development, and mobile-based applications for services provision, etc., in keeping with the changing trends. Accordingly, considerable progress has been made in the three areas identified above, and projects/services in these three areas are expected to be launched in the new financial year. These new activities will need further investments to be made in the Company, and the Company is in advanced stages of negotiation with financial institutions and prospective investors for some innovative solutions/schemes for funding. The activities so chosen/planned have relatively low competition.

FUTURE PROSPECTS

The new activities, when launched, have been so chosen for their potential for generating revenues quickly, and the Company is confident of being able to start rebuilding itself during the new financial year, as well as generating significant revenues and operating profit. Additionally, efforts to revive the SATHI manufacturing activity and the Brazil project will continue despite the seeming lack of success so far, which should add to the revenue and profit of the Company in the coming year.

2. EVENTS SUBSEQUENT TO THE DATE OF FINANCIAL STATEMENTS

There were no material changes and commitments which occurred affecting the financial position of the Company between 31st March, 2015 and the date on which this report has been signed.

3. MATERIAL CHANGES AFFECTING THE FINANCIAL POSITION OF THE COMPANY

The Company did not carry out any commercial sales activities: However, in line with the applicable regulations/Statutes, revenue of the Subsidiaries was captured in the consolidated financial Statement of the Company.

4. CHANGE IN THE NATURE OF BUSINESS

The Company expects to add new activities as mentioned above, in the areas of application of Information Technology in the domains of Business Intelligence and Human Resources Development, and mobile-based applications for services provision, will expand the nature of business of the Company from manufacturing and sales of products developed in-house, to also software applications for specific chosen domains, by developing such applications in-house and/or partnering with organizations specializing in those activities/domains.

5. DIVIDEND

In view of the losses incurred, your Directors express inability to recommend any dividend.

6. AMOUNTS TRANSFERRED TO RESERVES

In view of the losses, the question of transferring any amount to Reserves does not arise.

7. CHANGES IN SHARE CAPITAL

There were no changes in the Share Capital of the Company during the year.

Disclosure regarding Issue of Equity Shares with Differential Rights

During the year under review the Company has not issued Shares with Differential Rights.

Disclosure regarding issue of Employee Stock Options

During the year under review the Company has not issued Shares Employee Stock Options.

Disclosure regarding issue of Sweat Equity Shares

During the year under review the Company has not issued Sweat Equity Shares.

8. CAPITAL INVESTMENTS

There were no capital Investments during the year 2014-2015.

9. BOARD MEETINGS

The Meetings of the Board are held at regular intervals with a time gap of not more than 120 days between two consecutive Meetings. Additional Meetings of the Board of Directors are held when necessary. During the year under review 4 (Four) Meetings were held on 29th May 2014, 14th August 2014, 14th November 2014 and 14th February 2015.

The Agenda of the Meeting is circulated to the Directors in advance. Minutes of the Meetings of the Board of Directors are circulated amongst the Members of the Board for their perusal.

The details of other Committee Meetings during the year 2014-2015 are given in the Corporate Governance Report.

10. DIRECTORS AND KEY MANANGERIAL PERSONNEL

Ms. Chhanda Deshpande, Director (DIN: 00225546), retires by rotation, as per the Companies Act, 2013 and being eligible, offers herself for re-appointment.

11. DECLARATION FROM INDEPENDENT DIRECTORS ON ANNUAL BASIS

The Company has received necessary declaration from each Independent Director of the Company under Section 149(7) of the Companies Act, 2013 that the Independent Directors of the Company meet with the criteria of their Independence laid down in Section 149(6).

12. COMPOSITION OF AUDIT COMMITTEE

As on 31st March 2015, the Audit Committee of the Company consists of three (3) Non-Executive Independent Directors and all of them have financial and accounting knowledge.

The Board has accepted the recommendations of the Audit Committee during the year under review.

The Audit Committee consists of the following:

a) Mr. U Divakaran Chairman

b) Mr. S P Satish Member

c) Mr. Vinay L Deshpande Member

13. NOMINATION AND REMUNERATION COMMITTEE POLICY

The Board has, on the recommendation of the Nomination & Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management and for other employees and their remuneration. The Composition, criteria for selection of Directors and the Terms of Reference of the Nomination and Remuneration Committee is stated in the Corporate Governance Report.

The Nomination and Remuneration Committee consists of the following:

a) Mr. U Divakaran Chairman

b) Mr. S P Satish Member

c) Mr. Vinay L Deshpande Member

14. VIGIL MECHANISM/WHISTLE BLOWER POLICY

The Company has established an effective vigil mechanism (for directors and employees to report genuine concerns) pursuant to the provisions of Section 177(9) & (10) of the Companies Act, 2013 and as per Clause 49 of the Listing Agreement which is available on website of the Company and there were no cases reported during the last period.

15. DIRECTORS' RESPONSIBILITY STATEMENT

In pursuance of section 134 (5) of the Companies Act, 2013, the Directors hereby confirm that:

a. in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

b. the directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit and loss of the company for that period;

c. the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

d. the directors had prepared the annual accounts on a going concern basis; and

e. the directors, had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively.

f. the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

16. EXTRACT OF ANNUAL RETURN

As required pursuant to Section 92(3) of the Companies Act, 2013 and rule 12(1) of the Companies (Management and Administration) Rules, 2014, an extract of annual return in MGT 9 as a part of this Annual Report is attached as Annexure I.

17. INFORMATION ABOUT THE FINANCIAL PERFORMANCE/FINANCIAL POSITION OF THE SUBSIDIARIES/ASSOCIATES/JV

Financial performance of the Subsidiary/Associates referred to in Section 129 of the Companies Act, 2013 in Form AOC-1 is annexed to this Report as Annexure II.

18. AUDITORS

The Auditors, Messrs Ishwar & Gopal, Chartered Accountants, Bangalore (registered with ICAI membership number 021748), retire at the ensuing Annual General Meeting and, being eligible, offer themselves for reappointment for a period of 3 years from the conclusion of this Annual General Meeting till the conclusion of 26th Annual General Meeting.

The Company has received a Certificate under Section 141 of the Companies Act, 2013 from them that their appointment would be within the limits specified therein.

QUALIFICATIONS IN THE AUDIT REPORT AND EXPLANATIONS BY THE BOARD

Sl. Qualifications made by Explanations by the Board No. Statutory Auditor a. The entire net worth of the The Company is continuously Company has been eroded. However making efforts to ramp up the Company is continuing to its scale of operations to prepare accounts under going generate profit and concern concept. regain positive net worth.

b. Provision for retirement In view of the few employees, benefits in the form of the Company followed the policy gratuity and leave encashment of accounting gratuity and has been made on estimated leave salary liability on basis instead of on an actuarial estimated basis instead of valuation as on the balance actuarial valuation. sheet date in accordance with Accounting Standard (AS)-15 (revised) on 'Employee Benefits (refer note no. 24.60) in respect of the Holding Company.

The impact of the above on the 'loss' for the year is unascertained.

c. Gratuity and leave salary which In view of the few employees, have been provided on estimated the Company followed the basis instead of actuarial basis; policy of accounting gratuity and leave salary liability on estimated basis instead of actuarial valuation.

19. SECRETARIAL AUDITOR

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed Mr. Parameshwar G Bhat, Bangalore, Company Secretary in Practice to undertake the Secretarial Audit of the Company. The Report of the Secretarial Auditor in the form of MR-3 is annexed to this Report as Annexure III.

QUALIFICATIONS IN THE SECREATARIAL AUDIT REPORT AND EXPLANATIONS BY THE BOARD

Sl. Qualifications made by Explanations by the Board No. Secretarial Auditor

a. Acknowledgements for sending the The notice and agenda for the notices of the Meetings of the Board and Committee meetings Board and the Committees are not are sent by email. The Company maintained by the Company. will ensure to maintain the acknowledgements for sending the notices of the Meetings of the Board and the Committees.

b. Updating of website with regard The Company will take to various policies are pending. necessary steps to update Website with regard to various policies which are pending.

c. Copy of newspaper clippings of The Company will take advertisements informing the necessary steps to comply Board Meeting and AGM and the with the same. quarterly results are not available for review.

d. The Company has not appointed The Company initiated the Company Secretary (CS) during process of finding suitable the year under scrutiny. candidates, but due to the Company's financial position the Company is not in a position to afford the remuneration expected by the Company Secretary. However, Company will take necessary steps for comply with the requirements of law.

e. The Company has not appointed The Company initiated the Chief Financial Officer (CFO) process of finding suitable during the year under scrutiny. candidates but due to the Company's financial position the Company is not in a position to afford the remuneration expected by the CFO. However, Company will take necessary steps for comply with the requirements of law.

f. The Company has not maintained The Company will take necessary the attendance register for steps to maintain the Board and Committee meetings. attendance register for Board and Committee meetings.

g. Statutory Register as per The Company will take necessary Companies Act, 2013 is yet steps to update Statutory to be updated. Register as per Companies Act, 2013.

h. The Company has not appointed Since there is no business and Internal Auditor during the revenue in the last financial year under scrutiny. year, the Company is not in a position to appoint the Internal Auditor. However, Company will take necessary steps for comply with the requirements of law.

i. The terms of appointment of Since the Company does not have Mr. Vinay L Deshpande as the revenue, it was decided not Managing Director and Mrs. to appoint the Managing Chhanda Deshpande as Whole Time Director or Whole Time Director Director expired on June 2014. for the Company to save any The re-appointment of Mr. Vinay additional cost to the Company. L Deshpande as Managing However, Company will take Director and Mrs. Chhanda necessary steps to comply with Deshpande as Whole Time Director the requirements of law. were not taken up by the Company.

j. Constitution of Nomination and The Company does not have Remuneration Committee is not in sufficient number of non compliance with Section 178 of executive Directors to comply the Companies Act, 2013. with Section 178 of the Companies Act. Since Mr. Vinay L Deshpande and Mrs. Chhanda Deshpande are not drawing any remuneration from the Company and are not re-appointed as Managing Director or Whole Time Director respectively, they may be treated as non Executive Directors.

20. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE OUTGO

(A) Conservation of Energy

Steps taken / impact on The Company's operations are not conservation of energy. power intensive. Nevertheless, your Company has introduced various measures to conserve and minimize the use of energy wherever it is possible.

(i) Steps taken by the company Nil for utilizing alternate sources of energy including waste generated.

(ii) Capital investment on Not Applicable energy conservation equipment.

Total energy consumption and Not Applicable energy consumption per unit of production as per Form A.

(B) Technology Absorption

Efforts in brief, made towards Nil technology absorption, adaptation and innovation

Benefits derived as a result Not Applicable of the above efforts, e.g. product improvement, cost reduction, product development, import substitution, etc.

In case of imported technology (imported during the last 5 years reckoned from the beginning of the financial year), following information may be furnished:

Technology imported Not Applicable

Year of Import Not Applicable

Has technology been fully Not Applicable absorbed

If not fully absorbed, areas Not Applicable where this has not taken place, reasons therefore and future plan of action

(C) Research and Development (R & D)

Specific areas in which R & D The Company has not carried out carried out by the company any research and development work during the course of the year.

Benefits derived as a result Not Applicable of the above R & D

Future plan of action Not Applicable

Expenditure on R & D

(a) Capital Nil

(b) Recurring Nil

(c) Total Nil

(d) Total R & D expenditure as Nil a percentage of total turnover

(D) Foreign Exchange Earnings and Outgo

Activities relating to exports Not Applicable

Initiatives taken to increase exports Not Applicable

Development of new export markets for products and Not Applicable services

Export plans Not Applicable

Total Exchange used (Cash basis) As on 31st March 2014: Nil

Total Foreign Exchange Earned As on 31st March 2014: Nil (Accrual Basis)

21. RATIO OF REMUNERATION TO EACH DIRECTOR

The Company had 5 employees as of 31st March 2015. Pursuant to Section 197(12) of the Companies Act, 2013 and Rule 5 (1) (2) (3) of the Companies (Appointment and Remuneration) Rules, 2014, details/disclosures of Ratio of Remuneration to each Director to the median employee's remuneration is annexed to this report as Annexure IV.

There are no employees posted and working in a country outside India, not being Directors or relatives, drawing more than sixty lakhs rupees per financial year or five lakh rupees per month as the case may be. Therefore statement/disclosure pursuant to Sub Rule 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is not required to be circulated to the members and is not attached to the Annual Report.

22. DEPOSITS

Your Company has not invited/accepted/renewed any deposits from public as defined under the provisions of Companies Act, 2013 and Companies (Acceptance of Deposits) Rules, 2014 and accordingly, there were no deposits which were due for repayment on or before 31st March 2015.

23. SIGNIFICANT & MATERIAL ORDERS PASSED BY THE REGULATORS

No order was passed by any court or regulator or tribunal during the period under review which impacts going concern status of the Company.

24. DETAILS OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS

The Company continued to maintain, high standards of internal control designed to provide adequate assurance on the efficiency of operations and security of its assets. The adequacy and effectiveness of the internal control across various activities, as well as compliance with laid-down systems and policies are comprehensively and frequently monitored by your Company's management at all levels of the organization. The Audit Committee, which meets at-least four times a year, actively reviews internal control systems as well as financial disclosures with adequate participation, inputs from the Statutory, Internal and Corporate Secretarial Auditors.

25. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

During the year under review, the Company has not given any Loan, Guarantees or made Investments within the meaning of Section 186 of the Companies Act, 2013.

26. RISK MANAGEMENT POLICY

The Company has not yet formulated a Risk Management Policy and has in place a mechanism to inform the Board Members about risk assessment and minimization procedures and undertakes periodical review to ensure that executive management controls risk by means of a properly designed framework.

27. CORPORATE SOCIAL RESPONSIBILTY POLICY

Since the Company does not meet the criteria for the applicability of Section 135 of the Companies Act read with the Companies (Accounts) Rules, 2015, this clause is not applicable.

28. RELATED PARTY TRANSACTIONS

There were no related party transactions during the year 2014-2015.

29. FORMAL ANNUAL EVALUATION

Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board has carried out an annual performance evaluation of its own performance, the Directors individually as well as the evaluation of the working of its Audit, Nomination & Remuneration and Compliance Committees.

30. MANAGEMENT DISCUSSION AND ANALYSIS

As requisite and appropriate Management Discussion & Analysis is covered under this Report itself, a separate note on the same is not being furnished.

The Board has, on the recommendation of the Nomination & Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management and their remuneration.

31. LISTING WITH STOCK EXCHANGES

The Company confirms that it has paid the Annual Listing Fees for the year 2015-2016 to NSE and BSE where the Company's Shares are listed.

32. CORPORATE GOVERNANCE AND SHAREHOLDERS INFORMATION

Your Company has taken adequate steps to adhere to all the stipulations laid down in Clause 49 of the Listing Agreement. A report on Corporate Governance is attached to this report as Annexure V.

Certificate from the Statutory Auditors of the Company confirming the compliance with the conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement is attached to this report.

33. EVENT BASED DISCLOSURES

Due to certain alleged Income Tax claim, despite receiving an order from the Appellate Tribunal in favour of the Company, the Tax Authorities issued a demand notice and stopped the Company from operating the Bank Account which is now being followed up.

34. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

Your Company did not engage any women employee during the tear under review.

35. ACKNOWLEDGEMENTS

The Directors wishes to place on record their appreciation for the sincere and dedicated efforts of all employees. Your Directors would also like to thank the Shareholders, Bankers and other Business associates for their sustained support, patronage and cooperation.

For and on behalf of Encore Software Limited

Place: Bangalore Vinay L Deshpande Chhanda Deshpande Date: 14th August 2015 Director Director DIN:00225502 DIN:00225546


Mar 31, 2014

Dear Members,

The Directors are pleased to present the Twenty second Annual Report of the Company together with the Audited Statement of Accounts for the year ended March 31, 2014. As notified by MCA Circular No. 1/19/2013-CL-V dated 04.04.2014, the Company has followed the Companies Act, 1956, in respect of the report

FINANCIAL RESULTS

(Rs. In Million)

Year ended Year ended Particulars March 31,2014 March 31,2013

Operating Income - 23.09

Gross Profit/(Loss) after Interest, but before depreciation and tax (25.29) (6.40)

Less: Depredation 0.06 0.35

Provision for Tax Nil Nil

Profit/(Loss) after Tax (25.35) (6.75)

Transfer to Reserve Nil Nil

OPERATIONS

The year 2013-14 has of course been very difficult, but your Company and the Company has incurred loss owing mainly to provisions made for interest and financial charges but the Company is negotiating with the lenders for reducing the interest burden, while pursuing a re-structuring of its operations.

The Company''s subsidiary, Consilient Technologies Pvt Ltd., which commenced operations on September 1, 2012, has consolidated its operations and is now beginning to grow. The coming year expects to see its operations ramping up, leading to growing profit.

The MCP activities are now being reoriented towards providing solutions in the Manufacturing, Education and Defence sectors. Plans have been finalized for infusion of additional funds into the Company in order to help re-build operations in these chosen segments as well as for entering the area of Business Intelligence software.

INDUSTRY OUTLOOK

With the advent of a new government in the country, and with the announced focus of this new government on indigenous manufacturing, especially in the areas of electronics production and defence procurement from domestic companies, it is widely expected that indigenous electronics products will see renewed vigour in the domestic market. Therefore, your Company''s plans for focusing on the chosen sectors of Manufacturing, Education, and Defence, seem to be on target.

MOBILE COMPUTING PRODUCTS

As indicated earlier, efforts at reorienting the activities towards being able to offer products and solutions in Defence, Manufacturing, and Education, are continuing, and are now beginning to produce results, with the first new orders expected to materialize during the new financial year.

Your Company has already upgraded the design of its product for the Brazil market, where your Company continues to be engaged for making an entry in the educational computers market. The proposed Brazil Joint Venture is expected to get under way during the new financial year.

SATHI

The advent of the new government has already resulted in fresh enquiries for the SATHI, and therefore your Company continues to remain hopeful of new orders for this ground-breaking product. Consequently, your Company has already planned aggressive software and hardware updates to the SATHI design during the coming year. In addition, discussions are on in the Defence offsets area.

Likewise, the Air Publication Reader Tablet (APRT) -- the rugged tablet computer we had developed for the Aircraft Publication System project of NASDO (Naval Aircraft Servicing and Development Organization, Goa), along with the companion products Client Interface Platform (CIP) and Air Publication Network Interface (APNI), is being updated to the state of the art, and will be offered to both the Navy and the Air Force during the coining year.

BUSINESS INTELLIGENCE (Bl)

As part of the restructuring of your Company''s business strategy, some new opportunities in the Business Intelligence (Bl) area have been identified, and therefore product development has been initiated in this important new area of business. Your Company is confident of significant revenue in this segment during the ensuing financial year.

OVERSEAS OPERATIONS

Ncore USA, the wholly-owned subsidiary in the United States, continues to be kept alive as in the past, in order to have a base when the market for your Company''s offerings starts growing there. The investment made in the subsidiary is fully provided for under provision for diminution in the value of investments. Since the subsidiary has no assets or liabilities and has also not carried out any operations during the year under review, Consolidated Accounts have not been prepared.

RISKS AND CONCERNS

The main concerns for the coming year relate to the timing of the expected infusion of funds, and the subsequent clinching of purchase orders in the new areas of business being contemplated, and in Brazil.

CORPORATE GOVERNANCE

Being constantly committed to good Corporate Governance, your Company continues to follow sound corporate governance practices, including appropriate internal control structures, which ensure strict compliance with legal requirements and reliable financial reporting and also ensures that management implements and maintains effective business controls, including internal financial controls which are monitored on a self-assessment basis and by audits performed by internal and external auditors. These steps lead to increased transparency and accountability to the Company''s shareholders. A detailed Corporate Governance Report has been provided in Annexure ''B'' and the Auditors'' Report on Corporate Governance is provided in Annexure ''C''.

PARTICULARS OF EMPLOYEES

There was no employee drawing remuneration in excess of the limits prescribed under Section 217(2A) of the Companies Act, 195 6, read with Companies (Particulars of Employees) Rules, 1975.

There was no complaint lodged by any woman employee under Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, with the Company during the period under report.

DIRECTORS

In accordance with the provisions of the Companies Act, 1956, and the Company''s Articles of Association, Mr. Vinay L Deshpande, Director, and Mrs. Chhanda Deshpande, Director, who retire by rotation, and being eligible, offer themselves for re-appointment.

In terms of the requirements of the Companies Act, 2013, appointment of Mr. U Divakaran and Mr. S P Satish as Independent Directors is proposed under Special Business.

During the year, Mr. Jagannathan Suri offered to step down from the office of Director. Furthermore, due to professional commitment, Mr. Ramesh Rao stepped down from the Board.

Your Board places on record its deep appreciation for the significant contribution and support extended by the outgoing Directors.

AUDIT COMMITTEE

The Audit Committee constituted by the Board of Directors continued to discharge its functions during the year under report.

DIRECTORS'' RESPONSIBILITY STATEMENT

The Directors have fulfilled their responsibility for the preparation of the accompanying Financial Statements by taking all reasonable steps to ensure that:

* These statements have been prepared in conformity with generally accepted accounting principles and appropriate accounting standards. Judgements and estimates that are reasonable and prudent have been made where necessary.

* The accounting policies selected and applied consistently give a true and fair view of the Financial Statements.

* The Company has implemented internal controls to provide reasonable assurance of the reliability of its financial records, proper safeguarding and use of its assets and detection of frauds and irregularities. Such controls are based on established policies and procedures and are implemented by trained, skilled and qualified personnel with an appropriate segregation of duties.

The Company''s Statutory Auditors, Messrs Ishwar & Gopal, Chartered Accountants, have audited the Financial Statements in accordance with generally accepted auditing standards and practices as indicated in their report.

GOING CONCERN

In view of the initiative taken in development of diversified products which promise potential business, the Directors consider it appropriate to adopt the financial statements on a ''going concern'' basis.

AUDITORS

Messrs Ishwar & Gopal, Chartered Accountants, the retiring Auditors of the Company, hold office until the conclusion of the forthcoming Annual General Meeting and are eligible for re-appointment. Your Company has received a certificate from them that their re-appointment, if made, would be within the prescribed limits under Section 224(1 B) of the Companies Act, 1956.

AUDITORS'' REPORT

As regards the observations of the Auditors in their Report of even date, the Directors state that the Company is continuously making efforts to ramp up its scale of operations to generate profit and regain positive net worth.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars as prescribed under Section 217 (1) (e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars of Board of Directors) Rules, 1988, have been set out in Annexure ''A'' and form an integral part of this Report.

ACKNOWLEDGEMENTS

The Board expresses its gratitude to the Company''s customers, vendors, bankers and employees and other well-wishers for their continued support. Appreciation is also placed on record for the confidence reposed in the Company by its Shareholders.

By order of the Board

Date: 14th August 2014 Vinay L Deshpande Place: Bangalore Director


Mar 31, 2013

The Directors are pleased to present the Twenty First Annual Report of the Company together with the Audited Statement of Accounts for the year ended March 31, 2013.

OPERATIONS

The year 2012-13 has of course been very difficult, but your Company has managed to reduce losses, while pursuing a re-structuring of its operations.

As decided by the Board, and based on the approval obtained from the Shareholders through Postal Ballot as per Section 192A of the Companies Act, 1956, the Company''s business relating to the Technology Solutions Group has been transferred to Consoling Technologies Private Limited, a subsidiary of your Company. This was so done primarily because the Technology Solutions business needs relatively less capital, and has been consistently profitable, and needed to grow its operations in order to reach its true potential. The minority equity is owned by the employees of the subsidiary. Promoters and Directors of your Company have no shareholding in the new Company.

The subsidiary commenced operations on September 1, 2012. It will operate independently and profitably with a view to building up its value, without being dragged down by the burden of the overheads and current losses of your Company. Further, since a significant minority proportion of the Equity of the subsidiary is owned by the employees thereof, it is expected that they will be highly motivated to build up its value. Your Directors are of the view that this would be a viable methodology to preserve and grow the value of the TSG business which would otherwise be exposed to the risk of value erosion due to the burden of current losses of the Mobile Computing Products (MCP) group.

The MCP activities will continue to be pursued, albeit with a focus on providing solutions in select domains such as Manufacturing, Education and Defence sectors. Plans are afoot to infuse additional funds into the Company in order to help re-build its operations.

This restructuring of the operations of your Company along the two separate business lines is expected to yield better efficiency for both businesses, and your Directors are of the opinion that this will benefit your Company substantially, by facilitating the growth of both groups.

INDUSTRY OUTLOOK

While the market has displayed rapid growth in low-cost computing devices for Education, that segment of business seems to have become commoditized via cheap imports with little regard for quality and long-term reliability. This segment of the market needs a revolutionary solution that combines affordable hardware with easy-to-use intuitive and effective software.

Worldwide, the need for rugged industrial computing products is growing very rapidly, especially in the areas of manufacturing track-and-trace, logistics management, and efficiency improvement in the SME sector. This will result in the deployment of customized but cost-effective solutions such as those being contemplated by your Company.

MOBILE COMPUTING PRODUCTS

Despite the setback in this business that your Company suffered in the last two years, efforts at reorienting the activities towards being able to offer products and solutions in Defence, Manufacturing, and Education, are continuing, with a focus on identifying the right areas and markets. During the new financial year, your Company is confident of converting these efforts into successful orders and deliveries.

With the expected infusion of additional funds, your Company plans to further upgrade its product for the Brazil market, where your Company continues to be strongly placed in the educational computers market, even though the Company has not so far received any purchase orders there. The proposed Joint Venture will also be facilitated by the expected infusion of funds, and will help secure the long-awaited purchase orders.

SATHI

In view of the recent decision of the Government of India that at least one-third of the procurement of defence equipment will be from indigenous firms, your Company continues to remain hopeful of orders for the SATHI. Consequently, your Company has plans to aggressively update the SATHI design, during the coming year, to be contemporary and state-of-the-art, In addition, the Company plans to pursue Defence offsets opportunities as well.

NASDO

Despite promise of new business during the year under review, for the three products your Company custom- developed for NASDO (Naval Aircraft Servicing and Development Organization, Goa) — Client Interface Platform (CIP), Air Publication Network Interface (APNI), and Air Publication Reader Tablet (ApRT), for NASDO''s Aircraft Publication System project, the process of procurement by NASDO for their next round of requirements has been much slower than expected, and no firm orders materialized during the year, despite continuous and active follow-up. However, your Company still expects to receive new orders from NASDO during the coming year.

TECHNOLOGY SOLUTIONS

As mentioned above, the business of the Technology Solutions Group has been transferred to a majority-owned subsidiary named Consoling Technologies Pvt Ltd., effective September 1, 2012. Consoling continues to support customers with integration services in VOIP related product development, modem over IP, and video decoder software, via its two-pronged strategy of software licenses and system integration services based on its intellectual property. With its new-found independence of operations, Consoling is expected to significantly grow its system solution offerings as well as develop new IP''s, consequently rapidly growing its revenues and profits, and thus contributing to the bottom-line of its parent.

OVERSEAS OPERATIONS

Ncore USA, the wholly-owned subsidiary in the United States, continues to be kept alive as in the past, in order to have a base when the market for your Company''s offerings starts growing there. The investment made in the subsidiary is fully provided for under provision for diminution in the value of investments. Since the subsidiary has no assets or liabilities and has also not carried out any operations during the year under review, Consolidated Accounts have not been prepared.

RISKS AND CONCERNS

The main concerns for the coming year relate to the timing of the expected infusion of funds, and the subsequent clinching of purchase orders in the new areas of business being contemplated, and in Brazil.

CORPORATE GOVERNANCE

Being constantly committed to good Corporate Governance, your Company continues to follow sound corporate governance practices, including appropriate internal control structures, which ensure strict compliance with legal requirements and reliable financial reporting and also ensures that management implements and maintains effective business controls, including internal financial controls which are monitored on a self-assessment basis and by audits performed by internal and external auditors. These steps lead to increased transparency and accountability to the Company''s shareholders. A detailed Corporate Governance Report has been provided in Annexure ''B'' and the Auditors'' Report on Corporate Governance is provided in Annexure ''C.

PARTICULARS OF EMPLOYEES

There was no employee drawing remuneration in excess of the limits prescribed under Section 217(2A) of the Companies Act, 1956.

DIRECTORS

In accordance with the provisions of the Companies Act, 1956, and the Company''s Articles of Association, Mrs. Chhanda Deshpande Director, who retires by rotation and being eligible, offers herself for re-appointment. Mr. J Suri, Chairman of the Audit Committee has expressed his inability to continue as Director on the Board due to his personal and professional commitments and has not sought reappointment at the ensuing Annual General Meeting. Your Directors place on record their deep appreciation for the services rendered by Mr. J Suri during his tenure.

Mr. Ramesh Rao, who was appointed as Additional Director at the Board Meeting held on 14.11.2012 is being appointed as Director at the ensuing Annual General Meeting. Notice has been received under Section 257 of the Companies Act, 1956, from a Member proposing the candidature of Mr. Ramesh Rao as Director of the Company, along with the deposit of Rs. 500/-.

AUDIT COMMITTEE

Audit Committee constituted by the Board of Directors with requisite composition to fall in line with the prevailing laws continued to discharge its functions during the year under report.

DIRECTORS'' RESPONSIBILITY STATEMENT

The Directors have fulfilled their responsibility for the preparation of the accompanying Financial Statements by taking all reasonable steps to ensure that:

- These statements have been prepared in conformity with generally accepted accounting principles and appropriate accounting standards. Judgments and estimates that are reasonable and prudent have been made where necessary.

- The accounting policies selected and applied consistently give a true and fair view of the Financial Statements.

- The Company has implemented internal controls to provide reasonable assurance of the reliability of its financial records, proper safeguarding and use of its assets and detection of frauds and irregularities. Such controls are based on established policies and procedures and are implemented by trained, skilled and qualified personnel with an appropriate segregation of duties.

The Company''s Statutory Auditors, Messrs Ishwar & Gopal, Chartered Accountants, have audited the Financial Statements in accordance with generally accepted auditing standards and practices as indicated in their report.

GOING CONCERN

In view of the initiative taken in development of diversified products which promise potential business, the Directors consider it appropriate to adopt the financial statements on a ''going concern'' basis.

AUDITORS

Messrs Ishwar & Gopal, Chartered Accountants, the retiring Auditors of the Company hold office until the conclusion of the forthcoming Annual General Meeting and are eligible for re-appointment. Your Company has received a certificate from them that their re-appointment, if made, would be within the prescribed limits under Section 224(1B) of the Companies Act, 1956.

AUDITORS'' REPORT

As regards the observations of the Auditors in their Report of even date, the Directors state that the Company is continuously making efforts to ramp up its scale of operations to generate profit and regain positive net worth.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars as prescribed under Section 217 (1) (e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars of Board of Directors) Rules, 1988, have been set out in Annexure ''A'' and form an integral part of this Report.

ACKNOWLEDGEMENTS

The Board expresses its gratitude to the Company''s customers, vendors, bankers and employees and other well-wishers for their continued support.

Appreciation is placed on record for the confidence reposed in the Company by its Shareholders.

By order of the Board

Date: 14th August 2013 Vinay L Deshpande

Place: Bangalore Chairman & CEO


Mar 31, 2012

The Directors are pleased to present the Twentieth Annual Report of the Company together with the Audited Statement of Accounts for the year ended March 31, 2012.

FINANCIAL RESULTS: (Rs. In Million)

Particulars Year ended Year ended March 31, 2012 March 31, 2011

Operating Income 33.07 34.99

Gross Profit/(Loss) after Interest ,but before depreciation and tax (17.15) (24.12)

Less: Depreciation 0.89 1.63

Provision for Tax Nil Nil

Profit/(Loss) after Tax (18.04) (25.75)

Transfer to Reserve Nil Nil

OPERATIONS

While yet another difficult year has passed by, your Company has been able to trim its operations and move back towards profitability. Simultaneously, the Company has been patiently working towards reorienting the Company into new areas of business, so that we may turn out a better performance during 2012-2013.

INDUSTRY OUTLOOK

Despite the fact that the desire for affordable computing devices for Education continues to grow rapidly, the same has not resulted yet in any significant procurement of such devices in India, except for the laptop procurement by the Government of Tamil Nadu. However, it is expected that the new year might result in procurement of such devices on a larger scale, as several states intend implementing schemes to provide laptops to students.

The efforts of nationalized banks in India in pursuing rural and doorstep banking, however, seem to have met with some roadblocks as Business Correspondents who are expected to procure the hardware for this application, are beginning to find the remuneration (per transaction) offered by the banks rather uneconomical, resulting in low procurement of the hardware. If this issue can be satisfactorily resolved, the demand for mobile computing products such as those made by your Company will definitely grow, in the banking as well as other applications such as the Mahatma Gandhi National Rural Employment Guarantee Scheme (NREGS), the National Rural Health Mission (NRHM), and Aadhar -related applications.

As the Indian economy continues to grow, one interesting trend that is being observed in the market is the application of IT in industry and business, to improve efficiency and comply with international standards and best practices in some cases, especially in areas such as process control, logistics management, manufacturing track-and-trace of individual products, etc., which all require technologies and products such as those manufactured by your Company. However, the market requires solutions for these applications, rather than just hardware. Therefore, specialist knowledge in these areas of application, combined with expertise in hardware development and manufacturing, and the ability to develop application software in these specialized areas, are what the market is looking for.

MOBILE COMPUTING PRODUCTS

Owing to the lack of orders in this business, your Company has trimmed the workforce in this area, and has initiated efforts at reorienting the activities towards being able to offer products and solutions in Defence, process control, manufacturing track-and-trace, and logistics management, in addition to Education. During the new financial year, your Company expects to be able to convert these efforts into a few successful orders and deliveries.

Your Company's efforts in Brazil have not yet yielded the desired results, owing to complexities in the local situation there, but your Company continues to be strongly placed in the One-Computer-per- Student project of the Ministry of Education there, even though there has been a further delay in placement of purchase orders during this year. The proposed Joint Venture is expected to be established during the coming year.

SATHI

Your Company continues to remain hopeful of orders for the SATHI, as there seems to be a growing recognition of the need for procurement of Defence products from indigenous manufacturers. In addition, the Defence offsets opportunity may also lead to procurement of products such as the SATHI.

NASDO

The three products your Company custom-developed for NASDO (Naval Aircraft Servicing and

Development Organization, Goa) -Client Interface Platform (CIP), Air Publication Network Interface (APNI), and Air Publication Reader Tablet (APRT), for NASDO's Aircraft Publication System project, are all actively in the process of procurement by NASDO for their next round of requirements, and , your Company expects to receive firm orders from NASDO during the coming year.

TECHNOLOGY SOLUTIONS

The Technology Solutions Group continued to support customers with integration services in VOIP related product development. New solutions for modem over IP, video decoder software were developed. The forthcoming year will see the Group continue its focus on the two-pronged approach of software licences and system integration services based on our IP. It is also planning to significantly increase the manpower resources to strengthen the system solution offerings as well as new IP's.

OVERSEAS OPERATIONS

Ncore USA, the wholly-owned subsidiary in the United States, continues to be kept alive as in the past, in order to have a base when the market for your Company's affordable information appliances starts growing there. The investment made in the subsidiary is fully provided for under provision for diminution in the value of investments. Since the subsidiary has no assets or liabilities and has also not carried out any operations during the year under review, Consolidated Accounts have not been prepared.

RISKS AND CONCERNS

Aside from usual ups and downs of any business, the Company does not foresee any special risks or concerns for the coming year.

CORPORATE GOVERNANCE

Being constantly committed to good Corporate Governance, your Company continues to follow sound corporate governance practices, including appropriate internal control structures, which ensure strict compliance with legal requirements and reliable financial reporting and also ensures that management implements and maintains effective business controls, including internal financial controls which are monitored on a self-assessment basis and by audits performed by internal and external auditors. These steps lead to increased transparency and accountability to the Company's shareholders. A detailed Corporate Governance Report has been provided in Annexure 'B' and the Auditors' Report on Corporate Governance is provided in Annexure 'C'.

PARTICULARS OF EMPLOYEES

There was no employee drawing remuneration in excess of the limits prescribed under Section 217(2A) of the Companies Act, 1956.

DIRECTORS

In accordance with the provisions of the Companies Act, 1956 and the Company's Articles of Association, Prof V Rajaraman, Director, retires by rotation and he does not seek reappointment due to advancing age. Your Directors profusely thank Prof. V Rajaraman for long association, continuous guidance and excellent support rendered during his tenure.

AUDIT COMMITTEE

Audit Committee constituted by the Board of Directors with requisite composition to fall in line with the prevailing laws continued to discharge its functions during the year under report.

DIRECTORS' RESPONSIBILITY STATEMENT

The Directors have fulfilled their responsibility for the preparation of the accompanying Financial Statements by taking all reasonable steps to ensure that:

- These statements have been prepared in conformity with generally accepted accounting principles and appropriate accounting standards. Judgments and estimates that are reasonable and prudent have been made where necessary.

- The accounting policies selected and applied consistently give a true and fair view of the Financial Statements.

- The Company has implemented internal controls to provide reasonable assurance of the reliability of its financial records, proper safeguarding and use of its assets and detection of frauds and irregularities. Such controls are based on established policies and procedures and are implemented by trained, skilled and qualified personnel with an appropriate segregation of duties.

The Company's Statutory Auditors, Messrs. Ishwar & Gopal, Chartered Accountants, have audited the Financial Statements in accordance with generally accepted auditing standards and practices as indicated in their report.

GOING CONCERN

In view of the initiative taken in development of diversified products which promise potential business, the Directors consider it appropriate to adopt the financial statements on a 'going concern' basis.

AUDITORS

Messrs Ishwar & Gopal, Chartered Accountants, the retiring Auditors of the Company hold office until the conclusion of the forthcoming Annual General Meeting and are eligible for re-appointment. Your Company has received a certificate from them that their re-appointment, if made, would be within the prescribed limits under Section 224(1 B) of the Companies Act, 1956.

AUDITORS' REPORT

As regards the observations of the Auditors in their Report of even date, the Directors state that the Company is continuously making efforts to ramp up its scale of operations to generate profit and regain positive net worth.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars as prescribed under Section 217 (1) (e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars of Board of Directors) Rules, 1988, have been set out in Annexure 'A' and form an integral part of this Report.

ACKNOWLEDGEMENTS .

The Board expresses its gratitude to the Company's customers, vendors, bankers and employees and other well-wishers for their continued support.

Appreciation is placed on record for the confidence reposed in the Company by its Shareholders. By order of the Board

Date: May 30, 2012 Vinay L Deshpande

Place: Bangalore Chairman & CEO

 
Subscribe now to get personal finance updates in your inbox!