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Directors Report of ERP Soft Systems Ltd.

Mar 31, 2015

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

1. FINANCIAL SUMMARY/HIGHLIGHTS, OPERATIONS, STATE OF AFFARIS:

(Rs. in lakhs)

Standalone Particulars 2014-2015 2013-2014

Gross Income 70.25 56.46

Profit Before Interest and Depreciation 21.88 20.84

Finance Charges 0 0

Gross Profit 21.88 20.84

Provision for Depreciation 1.60 1.66

Net Profit Before Tax 20.28 19.18

Provision for Tax 6.35 6.64

Net Profit After Tax 13.93 12.53

(Rs. in lakhs)

Consolidated Particulars 2014-2015 2013-2014

Gross Income 1476.75 2898.08

Profit Before Interest and Depreciation 63.98 137.03

Finance Charges 0 0

Gross Profit 63.98 137.03

Provision for Depreciation 1.68 3.91

Net Profit Before Tax 62.30 133.12

Provision for Tax 19.35 41.64

Net Profit After Tax 42.95 91.48

The Company has recorded a turnover of Rs. 71.19 Lakhs and a Profit of Rs. 13.93 Lakhs in the current year against the turnover of Rs. 72.32 Lakhs and a Profit of Rs. 12.53 Lakhs in the previous financial year ending 31.03.2014.

On consolidated basis company recorded a turnover of Rs. 1476.75 Lakhs and a Profit of Rs. 42.95 Lakhs in the current year against the turnover of Rs. 2898.08 Lakhs and a Profit of Rs. 91.48 Lakhs in the previous financial year ending 31.03.2014.

2. EVENTS SUBSEQUENT TO THE DATE OF FINANCIAL STATEMENTS:

There were no material changes and commitments affecting financial position of the company between 31st March and the date of Board's Report.

3. CHANGE IN THE NATURE OF BUSINESS, IF ANY:

During the period under review and the date of Board's Report there was no change in the nature of Business.

4. DIVIDEND:

No dividend is proposed to be declared for the year.

5. BOARD MEETINGS:

The Board of Directors met 4 times during the year on 29.05.2014, 13.08.2014, 13.11.2014, 12.02.2015 in respect of which meetings, proper notices were given and the proceedings were properly recorded and signed in the minute's book maintained for the purpose.

6. DIRECTORS AND KEY MANANGERIAL PERSONNEL:

In accordance with the Companies Act, 2013 read with Articles of Association of the company the Director namely Mrs. D. Sarojanamma retires by rotation and being eligible, offers herself for re-appointment at this ensuring Annual General Meeting. Your Directors recommend her re-appointment.

During the period under review Mr. K. Radhakrishna Reddy was appointed as a CFO of the Company w.e.f. 13.08.2014 and Ms. P. Shivaleela Reddy was appointed as the Company Secretary of the Company w.e.f. 13.08.2014. The appointment of CFO & the Company Secretary was approved by the board of directors in their meeting held on 13.08.2014.

POLICY FOR SELECTION OF DIRECTORS AND DETERMINING DIRECTORS' INDEPENDENCE

1. Scope:

This policy sets out the guiding principles for the Nomination & Remuneration Committee for identifying persons who are qualified to become Directors and to determine the independence of Directors, in case of their appointment as independent Directors of the Company.

2. Terms and References:

2.1 "Director" means a director appointed to the Board of a Company.

2.2 "Nomination and Remuneration Committee means the committee constituted in accordance with the provisions of Section 178 of the Companies Act, 2013 and clause 49 of the Equity Listing Agreement.

2.3 "Independent Director" means a director referred to in sub-section (6) of Section 149 of the Companies Act, 2013 and Clause 49(II)(B) of the Equity Listing Agreement.

3. Policy:

Qualifications and criteria

3.1.1 The Nomination and Remuneration Committee, and the Board, shall review on annual basis, appropriate skills, knowledge and experience required of the Board as a whole and its individual members. The objective is to have a board with diverse background and experience that are relevant for the Company's operations.

3.1.2 In evaluating the suitability of individual Board member the Nomination & Remuneration Committee may take into account factors, such as:

- General understanding of the company's business dynamics, global business and social perspective;

- Educational and professional background

- Standing in the profession;

- Personal and professional ethics, integrity and values;

- Willingness to devote sufficient time and energy in carrying out their duties and responsibilities effectively.

3.1.3 The proposed appointee shall also fulfill the following requirements:

- shall possess a Director Identification Number;

- shall not b disqualified under the companies Act, 2013;

- shall Endeavour to attend all Board Meeting and Wherever he is appointed as a Committee Member, the Committee Meeting;

- shall abide by the code of Conduct established by the company for Directors and senior Management personnel;

- shall disclose his concern or interest in any company or companies or bodies corporate, firms, or other association of individuals including his shareholding at the first meeting of the Board in every financial year and thereafter whenever there is a change in the disclosures already made;

- Such other requirements as amy be prescribed, from time to time, under the companies Act, 2013, Equity listing Agreements and other relevant laws.

3.1.4 The Nomination & Remuneration Committee shall evaluate each individual with the objective of having a group that best enables the success of the company's business.

3.2 criteria of independence

3.2.1 The Nomination & Remuneration Committee shall assess the independence of Directors at time of appointment/ re-appointment and the Board shall assess the same annually. The Board shall re- assess determinations of independence when any new interest or relationships are disclosed by a Director.

3.2.2 The criteria of independence, as laid down in companies Act, 2013 and Clause 49 of the Equity Listing Agreement, is as below:

An independent director in relation to a company, means a director other than a managing director or a whole-time director or a nominee director- a. Who, in the opinion of the Board, is a person of integrity and possesses relevant expertise and experience;

b. (i) who is or was not a promoters of the company or its holding, subsidiary or associate company;

(ii) Who is not related to promoters or directors the company its holding, subsidiary or associate company

c. Who has or had no pecuniary relationship with the company, its holding, subsidiary or associate company, or their promoters, or director, during the two immediately preceding financial year or during the current financial year;

d. None of whose relative has or had pecuniary relationship or transaction with the company, its holding, subsidiary or associate company, or their promoters, or directors, amounting to two per cent or more of its gross turnover or total income or fifty lakh rupees or such higher amount as may be prescribed, whichever is lower, during the two immediately preceding financial year or during the current finance year;

e. Who, neither himself nor any of his relative- (i) Holds or has held the position of a key managerial personnel or is or has been employee of the or associate company in any of the three finance years immediately preceding the finance year in which he is proposed to be appointed;

(ii) Is or has been an employee or proprietor or a partner, in any of the three finance year immediately preceding the finance year in which he is proposed to be appointed of- (A) a firm of auditors or company secretaries in practice or cost auditors of the company or its holding, subsidiary or associate company; or

(B) any legal or a consulting firm that has or had any transaction with the company, its holding subsidiary or associate company amounting to ten per cent or more of the gross turnover of more of the gross turnover of such firm;

(iii) holds together with his relatives two per cent or more of the total voting power of the company; or

(iv) is a chief Executive or director, by whatever name called, of any non- profit organization that receives twenty-five per cent or more of its receipt from the company any of its promoters , directors or its holding subsidiary or associate company or that holds two per cent or more of the total voting power of the company; or

(v) is a material supplier, service provider or customer or a lessor or lessee of the company.

f. Shall possess appropriate skills experience and knowledge in one or more field of finance , law management, sales, marketing administration, research, corporate governance, technical operations, corporate social responsibility or this disciplines related to the company's business.

g. Shall possess such other qualifications as may be prescribed from time to time, under the companies Act,2013.

h. Who is not less than 21 years of age

3.2.3 The independent Director shall abide by the "code for independent Directors "as specified in Schedule IV to the companies A ct, 2013.

3.3 other directorships/ committee memberships

3.3.1 The Board members are expected to have adequate time and expertise and experience to contribute to effective Board performance Accordingly, members should voluntarily limit their directorships in other listed public limited companies in such a way that it does not interfere with their role as director of the company. The NR Committee shall take into account the nature of , and the time involved in a director service on other Boards, in evaluating the suitability of the individual Director and making its recommendations to the Board.

3.3.2 A Director shall not serve as director in more than 20 companies of which not more than 10 shall be public limited companies.

3.3.3 A Director shall not serve as independent Director in more than 7 listed companies and not more than 3 listed companies in case he is serving as a whole-time Director in any listed company.

3.3.4 A Director shall not be a member in more than 10 committee or act chairman of more than 5 committee across all companies in which he holds directorships.

For the purpose of considering the limit of the committee, Audit committee and stakeholder's relationship committee of all public limited companies, whether listed or not, shall be included and all other companies including private limited companies, foreign companies and companies under section 8 of the companies Act, 2013 shall be excluded.

Remuneration policy for Directors, key managerial personnel and other employees

1. Scope:

1.1 This policy sets out the guiding principles for the Nomination and Remuneration committee for recommending to the Board the remuneration of the directors, key managerial personnel and other employees of the company.

2. Terms and Reference:

In this policy the following terms shall have the following meanings:

2.1 "Director" means a directors appointed to the Board of the company.

2.2 "key managerial personnel" means

(i) The Chief Executive Office or the managing director or the manager;

(ii) The company secretary;

(iii) The whole-time director;

(iv) The chief finance Office; and

(v) Such other office as may be prescribed under the companies Act, 2013

2.3 "Nomination and Remuneration committee" means the committee constituted by Board in accordance with the provisions of section 178 of the companies Act,2013 and clause 49 of the Equity Listing Agreement.

3. Policy:

3.1 Remuneration to Executive Director and key managerial personnel

3.1.1 The Board on the recommendation of the Nomination and Remuneration (NR) committee shall review and approve the remuneration payable to the Executive Director of the company within the overall approved by the shareholders.

3.1.2 The Board on the recommendation of the Nomination & Remuneration (NR) committee shall also review and approve the remuneration payable to the key managerial personnel of the company.

3.1.3 The remuneration structure to the Executive Director and key managerial personnel shall include the following components:

(i) Basic pay

(ii) Perquisites and Allowances

(iii) Stock Options

(iv) Commission (Applicable in case of Executive Directors)

(v) Retrial benefits

(vi) Annual performance Bonus

3.1.4 The Annual plan and Objectives for Executive committee shall be reviewed by the Nomination & Remuneration (NR) committee and Annual performance Bonus will be approved by the committee based on the achievement against the Annual plan and Objectives.

3.2 Remuneration to Non – Executive Directors

3.2.1 The Board, on the recommendation of the Nomination & Remuneration (NR) Committee, shall review and approve the remuneration payable to the Non – Executive Directors of the Company within the overall limits approved by the shareholders as per the provisions of Companies Act, 2013.

3.2.2 Non – Executive Directors shall be entitled to sitting fees attending the meetings of the Board and the Committees thereof. The Non- Executive Directors shall also be entitled to profit related commission in addition to the sitting fees.

3.3. Remuneration to other employees

3.3.1. Employees shall be assigned grades according to their qualifications and work experience, competencies as well as their roles and responsibilities in the organization. Individual remuneration shall be determined within the appropriate grade and shall be based on various factors such as job profile skill sets, seniority, experience and prevailing remuneration levels for equivalent jobs.

7. DECLARATION FROM INDEPENDENT DIRECTORS ON ANNUAL

BASIS

The Company has received necessary declaration from Mr. P.V. Srinivasa Rao and Ms. R. Kamala Mohan the Independent Directors 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).( Annexure II)

8. COMPOSITION OF COMMITTEES

AUDIT COMMITTEE AT THE MEETINGS:

i) The Audit Committee of the Company is constituted in line with the provisions of Clause 49 of the Listing Agreements with the Stock Exchanges read with Section 177 of the Companies Act, 2013.

ii) The terms of reference of the Audit Committee include a review of;

- Overview of the Company's financial reporting process and disclosure of its financial information to ensure that the financial statements reflect a true and fair position and that sufficient and credible information is disclosed.

- Recommending the appointment and removal of external auditors, fixation of audit fee and also approval for payment for any other services.

- Discussion with external auditors before the audit commences, of the nature and scope of audit as well as post-audit discussion to ascertain any area of concern.

- Reviewing the financial statements and draft audit report including quarterly / half yearly financial information.

- Reviewing with management the annual financial statements before submission to the Board, focusing on:

1. Any changes in accounting policies and practices;

2. Qualification in draft audit report;

3. Significant adjustments arising out of audit;

4. The going concern concept;

5. Compliance with accounting standards;

6. Compliance with stock exchange and legal requirements concerning financial statements;

7. Any related party transactions

- Reviewing the company's financial and risk management's policies.

- Disclosure of contingent liabilities.

- Reviewing with management, external and internal auditors, the adequacy of internal control systems.

- Reviewing the adequacy of internal audit function, including the audit character, the structure of the internal audit department, approval of the audit plan and its execution, staffing and seniority of the official heading the department, reporting structure, coverage and frequency of internal audit.

- Discussion with internal auditors of any significant findings and follow-up thereon.

- Reviewing the findings of any internal investigations by the internal auditors into the matters where there is suspected fraud or irregularity or a failure of internal control systems of a material nature and reporting the matter to the Board.

- Looking into the reasons for substantial defaults in payments to the depositors, debenture holders, shareholders (in case of non- payment of declared dividends) and creditors.

- Reviewing compliances as regards the Company's Whistle Blower Policy.

i ii) The previous Annual General Meeting of the Company was held on 30th September, 2014 and Mr. P.V. Srinivasa Rao, Chairman of the Audit Committee, attended previous AGM.

iv) The composition, meetings and the attendance during the year of the Audit Committee is given below:

The Company has complied with all the requirements of Clause 49 (II) (A) of the Listing Agreement relating to the composition of the Audit Committee. During the financial year 2014-2015, (4) four meetings of the Audit Committee were held on the 29.05.2014, 13.08.2014, 13.11.2014 and 12.02.2015.

The details of the composition of the Committee at the meetings are given below:

Name Designation Category

Mr. P.V. Srinivasa Rao Chairman NED (I)

Mrs. R. Kamala Mohan Member NED (I)

Mr. K. Radhakrishna Reddy Member NED (P)

NED (I): Non Executive Independent Director

ED (P) : Executive Director Promoter

The necessary quorum was present at all the meetings.

NOMINATION AND REMUNERATION COMMITTEE:

The details of the composition of the Committee at the meetings are given below:

Name Designation Category

Mr. P.V. Srinivasa Rao Chairman NED (I)

Mrs. R. Kamala Mohan Member NED (I)

*Mrs. D. Kowsalyamma Member NED (P)

NED (I): Non Executive Independent Director

ED (P) : Executive Director Promoter

*Appointed w.e.f. 09.07.2015

Terms of reference:

The main term of reference of the Committee is to approve the fixation/revision of remuneration of the Directors of the Company and while approving:

- To take into account the financial position of the Company, trend in the industry, appointee's qualification, experience, past performance, past remuneration etc.

- To bring out objectivity in determining the remuneration package while striking a balance between the interest of the Company and the Shareholders.

- Remuneration Policy:

The objectives of the remuneration policy are to motivate Directors to excel in their performance, recognize their contribution and retain talent in the organization and reward merit.

The remuneration levels are governed by industry pattern, qualifications and experience of the Directors, responsibilities shouldered, individual performance etc.

No remuneration was paid to Non-Executive Directors of the Company for the financial year 2014-15. The details of remuneration paid to the Executive Director for the financial year 2014-15 are given below:

Name of the Designation Salary Commission Perquisites Retirement Director (Rs in (Rs in (Rs in Benefits Lakhs) Lakhs) Lakhs) (Rs in Lakhs)

Ms. K. Parvathi Managing Nil Nil Nil Nil Reddy Director

STAKEHOLDERS RELATIONSHIP COMMITTEE:

Name Designation Category

Mrs. R. Kamala Mohan Chairman NED (I)

Mr. P.V. Srinivasa Rao Member NED (I)

Mr. K. Radhakrishna Reddy Member NED (P)

NED (I): Non Executive Independent Director

ED (P) : Executive Director Promoter

Powers:

The Committee has been delegated with the following powers:

- To redress shareholder and investor complaints relating to transfer of shares, Dematerialization of Shares, non-receipt of balance sheet, non-receipt of declared dividend etc.

- to approve, transfer, transmission, and issue of duplicate / fresh share certificate(s)

- Consolidate and sub-division of share certificates etc.

- To redress, approve and dispose off any, other complaints, transactions and requests etc., received from any shareholder of the company and investor in general.

The Board has delegated the power to process the transfer and transmission of shares to the Registrar and Share Transfer Agents, who process share transfers within a week of lodgment in the case of shares held in physical form.

The Board has designated Mrs. R. Kamala Mohan as the Compliance Officer. The Company has designated an exclusive e-mail ID called Investorcare@erpsoft.com for redressal of shareholders' complaints/grievances.

RISK MANAGEMENT COMMITTEE

A.) Composition:

The Details of composition of the Committee are given below:

Name Designation Category

Mrs. R. Kamala Mohan Chairman NED (I)

Mrs. D. Sorajanamma Member NED (I)

*Mrs. D. Kowsalyamma Member NED (P)

NED (I) : Non Executive Independent Director

NED (NI) : Non Executive Non-Independent

*Appointed w.e.f. 09.07.2015 Role and Responsibilities of the Committee includes the following:

- Framing of Risk Management Plan and Policy

- Overseeing implementation of Risk Management Plan and Policy

- Monitoring of Risk Management Plan and Policy

- Validating the process of risk management

- Validating the procedure for Risk minimization.

- Periodically reviewing and evaluating the Risk Management Policy and practices with respect to risk assessment and risk management processes.

- Continually obtaining reasonable assurance from management that al known and emerging risks have been identified and mitigated or managed.

9. VIGIL MECHANISM:

Vigil Mechanism Policy has been established by the Company for directors and employees to report genuine concerns pursuant to the provisions of section 177(9) & (10) of the Companies Act, 2013. The same has been placed on the website of the Company.

10. DIRECTOR'S 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.

11. STATUTORY COMPLIANCE:

The Company has complied with the required provisions relating to statutory compliance with regard to the affairs of the Company in all respects.

12. INFORMATION ABOUT THE FINANCIAL PERFORMANCE / FINANCIAL POSITION OF THE SUBSIDIARIES / ASSOCIATES/ JOINT VENTURES:

100% Subsidiary company, Liberty.com LLC in USA is focusing on ERP, Business Intelligence/ Analytics projects and staffing.

13. 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

( ANNEXURE I)

14. AUDITORS:

The Auditors, M/s Vijayaraghavan and Associates, Chartered Accountants, Chennai, retire at the ensuing Annual General Meeting and, being eligible; offer themselves for reappointment for a period of one year from the conclusion of this Annual General Meeting [AGM] till the conclusion of next AGM.

15. SECRETARIAL AUDIT:

Pursuant to the provisions of Section 134(3)(f) & Section 204 of the Companies Act, 2013, Secretarial audit report as provided by M/s. S. S. Reddy & Associates, Practicing Company Secretaries is annexed to this Report as annexure.

16. QUALIFICATIONS IN AUDIT REPORTS:

(a) Statutory Auditors Report:

The Board has duly reviewed the Statutory Auditor's Report on the Accounts for the year ended March 31, 2015 and has noted that the same does not have any reservation, qualification or adverse remarks. However, the Board decided to further strengthen the existing system and procedures to meet all kinds of challenges and growth in the market expected in view of the robust capital market in the coming years.

(b) Secretarial Audit Report:

The Board has duly reviewed the Secretarial Audit Report on the Compliances according to the provisions of Section 204 of the Companies Act 2013, and the same does not have any reservation, qualifications or adverse remarks.

17. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE OUTGO:

(A) Conservation of energy:

Your Company's operations are not energy intensive. Adequate measures have been taken to conserve energy wherever possible by using energy efficient computers and purchase of energy efficient equipment.

B. Technology Absorption:

1. Research and Development (R&D) : NIL

2. Technology absorption, adoption and innovation : NIL

C. Foreign Exchange Earnings and Out Go:

Foreign Exchange Earnings : $ 16,111

Foreign Exchange Outgo : NIL

18. DETAILS RELATING TO DEPOSITS, COVERING THE FOLLOWING:

Your Company has not accepted any deposits falling within the meaning of Sec.73, 74 & 76 of the Companies Act, 2013 read with the Rule 8(v) of Companies (Accounts) Rules 2014, during the financial year under review.

19. SIGNIFICANT & MATERIAL ORDERS PASSED BY THE

REGULATORS:

During the period under review there were no significant and material orders passed by the regulators or Courts or Tribunals impacting the going concern status and the company's operations in future.

20. DETAILS OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS:

Your Company has well established procedures for internal control across its various locations, commensurate with its size and operations. The organization is adequately staffed with qualified and experienced personnel for implementing and monitoring the internal control environment. The internal audit function is adequately resourced commensurate with the operations of the Company and reports to the Audit Committee of the Board.

21. INSURANCE:

The properties and assets of your Company are adequately insured.

22. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS:

The company has not given loans, Guarantees or made any investments during the year under review.

23. RISK MANAGEMENT POLICY:

Your Company follows a comprehensive system of Risk Management.

Your Company has adopted a procedure for assessment and minimization of probable risks. It ensures that all the risks are timely defined and mitigated in accordance with the well structured risk management process.

24. CORPORATE SOCIAL RESPONSIBILTY POLICY:

Corporate Social Responsibility is not applicable to the Company since the Net Profit of the Company is less than 5 Crores, the Net worth of the Company is less than 500 Crores and also the Turnover of the Company is less than 1000 Crores.

25. RELATED PARTY TRANSACTIONS:

All contracts/arrangements/transactions entered by the Company during the financial year with related parties were in the ordinary course of business and on arm's length basis. During the year, the Company had not entered into any contract/arrangement/transaction with related parties which could be considered material in accordance with the policy of the company on materiality of related party transactions other than providing services to Liberty.com LLC which is company's Subsidiary in the ordinary course of business.

The Policy on materiality of related party transactions and dealing with related party transactions as approved by the Board may be accessed on the Company's website at www.erpsoft.com. (Annexure III)

26. FORMAL ANNUAL EVALUATION:

As per section 149 of the Companies Act, 2013 read with clause VII (1) of the schedule IV and rules made thereunder, the independent directors of the company had a meeting on 23/03/2015 without attendance of non- independent directors and members of management. In the meeting the following issues were taken up:

(a) Review of the performance of non-independent directors and the Board as a whole;

(b) Review of the performance of the Chairperson of the company, taking into account the views of executive directors and non-executive directors;

(c) Assessing the quality, quantity and timeliness of flow of information between the company management and the Board that is necessary for the Board to effectively and reasonably perform their duties.

The meeting also reviewed and evaluated the performance of non- independent directors. The company has 4 (four) non-independent directors namely:

1. Ms. K. Parvathi Reddy

2. Mrs. D. Sarojanamma

3. Mrs. D. Kowsalyamma

4. Mr. K. Radhakrishna Reddy

The meeting also reviewed and evaluated the performance the Board as whole in terms of the following aspects:

- Preparedness for Board/Committee meetings

- Attendance at the Board/Committee meetings

- Guidance on corporate strategy, risk policy, corporate performance and overseeing acquisitions and disinvestments.

- Monitoring the effectiveness of the company's governance practices

- Ensuring a transparent board nomination process with the diversity of experience, knowledge, perspective in the Board.

- Ensuring the integrity of the company's accounting and financial reporting systems, including the independent audit, and that appropriate systems of control are in place, in particular, systems for financial and operational control and compliance with the law and relevant standards.

Ms. K. Parvathi Reddy, Managing Director of the company has performed exceptionally well by attending board meetings regularly, by taking active participation in the discussion of the agenda and by providing required guidance from time to time to the company for its growth etc.

It was noted that the Board Meetings have been conducted with the issuance of proper notice and circulation of the agenda of the meeting with the relevant notes thereon.

27. DISCLOSURE ABOUT COST AUDIT:

Cost Audit is not applicable to the Company.

28. RATIO OF REMUNERATION TO EACH DIRECTOR:

Under section 197(12) of the Companies Act, 2013, and Rule 5(1)(2) & (3) of the Companies(Appointment & Remuneration) Rules, 2014, no remuneration is being paid to any of the Directors of the Company.

29. LISTING WITH STOCK EXCHANGES:

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

30. CORPORATE GOVERNANCE AND SHAREHOLDERS

INFORMATION:

Report on Corporate Governance is not applicable to the Company since the Paid-up Capital of the Company is less than 10 Crores and the Net worth of the Company is less than 25 Crores.

31. INDUSTRY BASED DISCLOSURES AS MANDATED BY THE RESPECTIVE LAWS GOVERNING THE COMPANY NBFC, HOUSING COMPANIES ETC.

Not Applicable.

32. SECRETARIAL STANDARDS

EVENT BASED DISCLOSURES

During the year under review, the Company has not taken up any of the following activities:

1. Issue of sweat equity share : NA

2. Issue of shares with differential rights : NA

3. Issue of shares under employee's stock option scheme: NA

4. Disclosure on purchase by company or giving of loans by it for purchase of its shares : NA

5. Buy back shares : NA

6. Disclosure about revision : NA

7. Preferential Allotment of Shares : NA

33. EMPLOYEE RELATIONS:

Your Directors are pleased to record their sincere appreciation of the contribution by the staff at all levels in the improved performance of the Company.

None of the employees is drawing Rs. 5,00,000/- and above per month or Rs.60,00,000/- and above in aggregate per annum, the limits prescribed under Section 134 of the Companies Act, 2013

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

The Company has in place an Anti Sexual Harassment Policy in line with the requirements of The Sexual Harassment of Women at workplace (Prevention, Prohibition and Redressal) Act, 2013. Internal Complaint Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees are covered under this policy.

The following is the summary of sexual harassment complaints received and disposed during the calendar year.

No. of complaints received : Nil

No. of complaints disposed off: Nil

35. ACKNOWLEDGEMENTS:

Your Directors wish to place on record their appreciation of the contribution made by the employees at all levels, to the continued growth and prosperity of your Company.

Your Directors also wish to place on record their appreciation of business constituents, banks and other financial institutions and shareholders of the Company like SEBI, BSE, NSDL, CDSL, ICICI Bank etc. for their continued support for the growth of the Company.

For and on Behalf of the Board

ERP Soft Systems Limited Sd/-

K. Parvathi Reddy

Managing Director Place: Chennai (DIN: 00827258) Date : 28.08.2015


Mar 31, 2014

Dear Members,

We have pleasure in presenting the 20th Annual Report with Audited Statements of Accounts for the year ended 31st March 2014.

FINANCIAL RESULTS:

Stand Alone

(Rupees in million)

Particulars 2013-2014 2012-2013

Income from Operations 5.64 7.38

Expenditure 3.57 3.60

Depreciation 0.16 0.16

Profit/Loss before Tax 1.91 3.62

Provision for Tax 0.65 1.04

Profit/Loss after Tax 1.26 2.58

Consolidated

(Rupees in million)

Particulars 2013-2014 2012-2013

Income from Operations 289.80 336.20

Expenditure 276.10 327.47

Depreciation 0.39 0.16

Profit/Loss before Tax 13.31 8.57

Provision for Tax 4.16 1.04

Profit/Loss after Tax 9.15 7.53

PERFORMANCE REVIEW- CONSOLIDATED:

During the year under review, the Company has recorded an income of Rs. 289.80 million and the profit/(loss) of Rs. 9.15 million as against the income of Rs. 336.20 million and profit/(loss) of Rs. 7.53 million in the previous financial year ending 31.03.2013.

The Company has been continuously working on quality up-gradation and cost reduction plans for achieving efficient running of the organisation.

The Company has been continuously working on quality up-gradation and cost reduction plans for achieving efficient running of the organisation.

DIVIDEND:

No dividend is proposed to be declared for the year.

PUBLIC DEPOSITS:

Your Company has not accepted any deposits falling within the meaning of Sec.58A of the Companies Act, 1956 read with the Companies (Acceptance of Deposits) Rules, during the financial year under review.

LISTING:

The equity shares of your company are listed on BSE Limited and Madras Stock Exchange.

CAPITAL OF THE COMPANY:

The Authorised Share Capital of the Company is Rs. 45,000,000/- divided into 45,00,000 equity shares of 10/- each, Paid up share capital is Rs. 39,600,000/- divided in to 39,60,000 equity shares of Rs. 10/- each.

MANAGEMENT DISCUSSION AND ANALYSIS:

A detailed review of operations, performance and future outlook of your Company and its business is given in the Management Discussion and Analysis, which forms part of this Report.

DIRECTORS:

In accordance with the Companies Act, 2013 read with Articles of Association of the company the Director namely Mrs. D. Sarojanamma retires by rotation and being eligible, offers herself for re-appointment at this ensuring Annual General Meeting. Your Directors recommend his re-appointment.

Pursuant to the notification of Sec. 149 and other applicable provisions of Companies Act, 2013, your Directors are seeking appointment of Ms. R. Kamala Mohan and Mr. P.V. Srinivasa Rao and as Independent Directors. Details of the proposal for appointments/re-appointments of Directors are mentioned in the Notice of 20th Annual General Meeting.

DIRECTORS' RESPONSIBILITY STATEMENT:

In pursuance of Section 217(2AA) of the Companies Amendment Act, 2000 your directors confirm:

i) that the directors in the preparation of the annual accounts the applicable accounting standards have been followed along with proper explanations relating to material departures.

ii) that 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.

iii) that the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safe guarding the assets of the company and for preventing and deleting fraud and other irregularities.

iv) that the directors had prepared the annual accounts on the going concern basis.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION & FOREIGN EXCHANGE EARNINGS AND OUT GO :

The required information as per Sec. 217 (1) (e) of the Companies Act 1956 is provided hereunder:

A. Conservation of Energy:

Your Company's operations are not energy intensive. Adequate measures have been taken to conserve energy wherever possible by using energy efficient computers and purchase of energy efficient equipment.

B. Technology Absorption:

1. Research and Development (R&D) : NIL

2. Technology absorption, adoption and innovation : NIL

C. Foreign Exchange Earnings and Out Go:

Foreign Exchange Earnings : NIL

Foreign Exchange Outgo : NIL

PARTICULARS OF EMPLOYEES:

There is no employee who is falling under section 217 (2A). Therefore, the disclosures required to be made under section 217 (2A) of the Companies Act, 1956 and the rules made there under are not applicable.

SUBSIDIARY COMPANY:

100% Subsidiary company, Libertycom LLC in USA is focusing on ERP, Business Intelligence/ Analytics projects and staffing.

CODE OF CONDUCT:

The Code has been circulated to all the members of the Board and Senior Management and the compliance of the same has been affirmed by them. A declaration signed by the Managing Director is given in Annexure.

AUDITORS:

Your directors propose the appointment of M/s. Vijayaraghavan and Associates, Charted Accountants as statutory auditors to hold office from the conclusion of this Annual General Meeting till the conclusion of the next Annual General Meeting of the company.

CORPORATE GOVERNANCE:

For and on Behalf of the Board

As a listed company, necessary measures have been taken to comply with the listing agreements of Stock Exchanges. A report on Corporate Governance, along with a certificate of compliance from the Auditors forms part of this Report as Annexure.

Sd/- K. Parvathi PACCeNOheLEDGEMENTS: Managing Director Date: 13.08.2014 (DIN: 00827258)


Mar 31, 2013

Dear Shareholders,

The Directors take great pleasure in presenting their report on the business and operations of your Company along with the Annual Report and audited financial statements for the period April 01, 2012 to March 31, 2013.

FINANCIAL PERFORMANCE

Key aspects of your Company''s financial performance for the year 2012-13 are tabulated below:

(In Rupees)

Consolidated Parent

2012 - 2013 2011 - 2012 2012- 2013 2011 -2012 Sales and other income 336,206,172 45,202,584 7,383,673 4,477,729

Profit before tax 8,571,206 7,787,653 3,612,847 1,204,116

Provision for tax 1,192,000 149,504 1,192,000 149,504

Deferred Tax (472) (22,253) (472) (22,253)

Income Tax Previous Year 149,508 600,000 149,504 600,000

Profit for the year 7,529,186 8,260,402 2,570,827 1,676,865

Accumulated losses carried forward 0 0 0 0

Appropriations : 0 0 0 0

Interim Dividend 0 0 0 0

Proposed dividend 0 0 0 0

Transfer to reserves 7,529,186 8,260,402 2,570,827 1,676,865



SUBSIDIARY COMPANIES

100% Subsidiary company, Libertycom LLC in USA is focusing on ERP, Business Intelligence/ Analytics projects and staffing. The financial statements of the subsidiary are enclosed at the end of this annual report.

CONSOLIDATED RESULTS

Our Consolidated Sales for the current year have increased by Rs.285,921,281/- and profit for the same period have decreased to Rs.731,216/-.

CORPORATE GOVERNANCE

Corporate Governance will continue to be Board''s responsibility.

The Code of Ethics and Business Conduct of the Company is based fundamental principles:

Report on Corporate Governance, along with a certificate of Statutory Auditors of the Company, is annexed herewith.

A certificate from the Managing Director and CFO of the Company confirming internal controls and checks pertaining to financial statements for the period April 01, 2012 to 31 March, 2013 was placed before the Board of Directors and the Board has noted the same.

A list of the committees of the Board and names of their members is given below. The scope of each of these committees and other related information is detailed in the enclosed Corporate Governance Report.

a) Composition of the Audit Committee along with the Independent status

1) Mr. Pavan Srinivas, ACS Chairman, Audit Committee- Independent Director Non-Executive Professional Company Secretary

2) Mrs. R. Kamala Mohan, Member, Audit Committee Independent Director Non-Executive

b) Composition of the Shareholders / Investors Grievance Committee

1) Mrs. R. Kamala Mohan,

Chairman, Investors Grievance Committee

Independent Director

Non-Executive

2) Mr. Pavan Srinivas, ACS

Member, Investors Grievance Committee

Independent Director

Non-Executive

Professional Company Secretary

HUMAN RESOURCES

Employees are the key assets of the Company/ ERP SOFT has established process for selecting quality resources and engages them in the projects in USA and India.

EMPLOYEE STOCK OPTION PLANS

No employee was issued Stock Option, during the year. .

FOREIGN EXCHANGE EARNINGS AND OUTGOINGS

During the year our Company earned foreign exchange inflow of Rs.224.39 Lacs and the outgoings in foreign exchange were Nil.

CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION

The particulars as prescribed under sub-section (1)(e) of Section 217 of the Companies Act, 1956 read with Companies (Disclosure of particulars in the Report of Board of Directors) Rules, 1988, the relevant data pertaining to conservation of energy and technology absorption are furnished hereunder:

CONSERVATION OF ENERGY

The operations of the Company are not energy-intensive. The Company, however, takes measures to reduce and optimize energy consumption by using energy efficient computers etc. Further, offices have been designed to maximize the use of ambient lighting while conserving the air conditioning. The expense on power in relation to income is nominal and under control.

TECHNOLOGY ABSORPTION

Since businesses, process and technologies are changing constantly, investment in research and development activities is of great importance. Your Company lays a great importance on knowledge management and has a process for absorption of new technologies. Your Company continued its focus on quality up-gradation of the software development process and software product enhancements.

MANAGEMENT''S DISCUSSION AND ANALYSIS REPORT

The Management Discussion and Analysis Report on Company''s performance , industry trends and other material changes with respect to the Company and its subsidiaries, wherever applicable are presented that forms part of this annual report.

RE-APPOINTMENT OF STATUTORY AUDITOR

M/s Vijayaraghavan and Associates, the present Statutory Auditors of the Company, retire at the ensuing Annual General Meeting and have confirmed their eligibility and willingness to accept office, if re- appointed.

FIXED DEPOSITS

ERPSOFT has not accepted any fixed deposits. Hence, there is no outstanding amount as on the Balance Sheet date.

ACKNOWLEDGEMENTS AND APPRECIATION

Your Directors take this opportunity to thank the customers, shareholders, suppliers, bankers, financial institutions and Central and State Governments for their consistent support to the Company.

Your Directors also place on record their appreciation for the excellent contribution made by all employees of ERP Soft Systems Limited through their commitment, competence, co-operation and diligence to duty in achieving consistent growth for the Company.

DIRECTORS'' RESPONSIBILITY STATEMENT

As required under Section 217 (2AA) of the Companies Act, the Directors hereby confirm that:

i. In the preparation of the annual accounts, the applicable accounting standards have been followed and that no material departures is made from the same;

ii. We have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give true and fair view of the state of affairs of the Company at the end of the financial year and of the profits of the Company for the period;

iii. We have taken proper and sufficient care 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; and

iv. We have prepared the annual accounts on a going concern basis.

PROSPECTS

ERPSOFT focus areas of SAP and Analytics/ Business Intelligence are growth areas. These areas in the environment of social, cloud and mobility have a huge upside. ERPSOFT is hiring experienced IT employees and consultants. SAP HANA and Big Data are niche areas and ERPSOFT is taking small initiatives to test the business potential.

Disclosure of Particulars of employees forming part of directors report pursuant to Section 217(2A) of the Companies Act, 1956 and the companies (Particulars of Employees) Rules, 1975

During the year no employee, had drawn salary in excess of the amounts prescribed under section 217(2A) of the Companies Act, 1956.

Disclosures of particulars in compliance with Clause 12 of the Securities and Exchange Board of India (Employee Stock Option Scheme) and (Employee Stock Purchase Scheme) Guidelines, 1999

No employee was issued Stock Option, during the year equal to or exceeding 1% of the issued capital of the Company.



For and on behalf of the Board of Directors,





Sd/-

K. Parvathi

Managing Director.



Chennai, May 30, 2013.


Mar 31, 2012

Dear Shareholders,

The Directors presents their report on the business and operations of your Company along with the Annual Report and audited financial statements for the period April 01, 2011 to March 31, 2012.

ERPSOFT regrets to inform that the company suffered immense loss in the passing away of its founder promoter Mr. Duvvuru Srinivasulu Reddy. Mr Reddy passed away on 11.11.2011.

FINANCIAL PERFORMANCE

Key aspects of your Company's financial performance for the year 2011-12 are tabulated below:

(In Rupees)

Consolidated Parent

2011-2012 2010-2011 2011-2012 2010-2011

Sales and other income 4,52,02,584 3,27,45,841 44,77,729 46,76,496

Profit before tax 77,87,653 44,48,265 12,04,116 18,68,678

Provision for tax (1,49,504) (6,00,000) (1,49,504) (6,00,000)

Deferred Tax 22,253 55,136 22,253 55.136

Income Tax Previous Year (6,00,000) 0 6,00,000 0

Profit for the year 82,60,402 39,03,401 16,76,865 13,23,814

Accumulated losses carried forward 0 0 0 0

Appropriations : 0 0 0 0

Interim Dividend 0 0 0 0

Proposed dividend 0 0 0 0

Transfer to reserves 82,60,402 39,03,401 16,76,865 13,23,814

SUBSIDIARY COMPANIES

100% Subsidiary company, Libertycom LLC in USA. is focusing on ERP, Business Intelligence, BPO and IT consulting services. The financial statements of the subsidiary are enclosed at the end of this annual report.

CONSOLIDATED RESULTS

Our Consolidated Sales for the current year have increased by Rs.1,25,16,303/- and profit for the same period have increased to Rs.43,57,001/-.

CORPORATE GOVERNANCE

Corporate Governance will continue to be Board's responsibility.

The Code of Ethics and Business Conduct of the Company is based on the following fundamental principles:

1) Lay solid foundations for management

2) Structure the Board to add value

3) Promote ethical and responsible decision-making

4) Safeguard integrity in financial reporting

5) Make timely and balanced disclosures

6) Recognize and manage business risks

7) Respect the rights of the shareholders

8) Encourage enhanced performance

9) Remunerate fairly and responsibly

10) Recognize the legitimate interest of the stakeholders

11) Legal and Statutory compliance

As in the past year separate committees for Audit, Protection of Member's interest are constituted. A separate report on Corporate Governance, along with a certificate of Statutory Auditors of the Company, is annexed herewith.

A certificate from the Managing Director and CFO of the Company confirming internal controls and checks pertaining to financial statements for the period April 01, 2011 to 31 March, 2012 was placed before the Board of Directors and the Board has noted the same.

A list of the committees of the Board and names of their members is given below. The scope of each of these committees and other related information is detailed in the enclosed Corporate Governance Report.

a) Composition of the Audit Committee along with the Independent status

1) Mr. PavanSrinivas, ACS

Chairman, Audit Committee-

Independent Director

Non-Executive

Professional Company Secretary

2) Mrs. R. Kamala Mohan,

Member, Audit Committee

Independent Director

Non-Executive

3) Mr. Sivkumar Reddy Duvvuru, FCA, CPA

Member, Audit Committee

Executive

Non-Independent Director

Certified from Institute of Chartered Accountants of India

Certified from American Institute of Certified Public Accountants

Certified from Information Systems Audit & Control Association (ISACA)

b) Composition of the Shareholders / Investors Grievance Committee

1) Mrs. R. Kamala Mohan,

Chairman, Investors Grievance Committee

Independent Director

Non-Executive

2) Mr. PavanSrinivas, ACS

Member, Investors Grievance Committee

Independent Director

Non-Executive

Professional Company Secretary

HUMAN RESOURCES

Employees are the key assets of the Company and the Company has created a healthy and productive work environment which encourages excellence. Your Company continuously invests in training staff in the latest technology trends and in various sub-verticals within the financial services domain. The Knowledge Process Outsourcing business of the Company is in an investment mode.

EMPLOYEE STOCK OPTION PLANS

No employee was issued Stock Option, during the year equal to or exceeding 1% of the issued capital of the Company.

FOREIGN EXCHANGE EARNINGS AND OUTGOINGS

During the year our Company earned foreign exchange inflow of Rs.34.57Lacs and the outgoings in foreign exchange were Nil.

CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION

The particulars as prescribed under sub-section (1)(e) of Section 217 of the Companies Act, 1956 read with Companies (Disclosure of particulars in the Report of Board of Directors) Rules, 1988, the relevant data pertaining to conservation of energy and technology absorption are furnished hereunder:

CONSERVATION OF ENERGY

The operations of the Company are not energy-intensive. The Company, however, takes measures to reduce and optimize energy consumption by using energy efficient computers etc. Further, offices have been designed to maximize the use of ambient lighting while conserving the air conditioning. The expense on power in relation to income is nominal and under control.

TECHNOLOGY ABSORPTION

Since businesses, process and technologies are changing constantly, investment in research and development activities is of great importance. Your Company lays a great importance on knowledge management and has a process for absorption of new technologies. Your Company continued its focus on quality up-gradation of the software development process and software product enhancements.

MANAGEMENT'S DISCUSSION AND ANALYSIS REPORT

The Management Discussion and Analysis Report on Company's performance , industry trends and other material changes with respect to the Company and its subsidiaries, wherever applicable are presented that forms part of this annual report.

RE-APPOINTMENT OF STATUTORY AUDITOR

M/s Vijayaraghavan and Associates, the present Statutory Auditors of the Company, retire at the ensuing Annual General Meeting and have confirmed their eligibility and willingness to accept office, if re- appointed.

FIXED DEPOSITS

We have not accepted any fixed deposits. Hence, there is no outstanding amount as on the Balance Sheet date.

ACKNOWLEDGEMENTS AND APPRECIATION

Your Directors take this opportunity to thank the customers, shareholders, vendors, bankers for their consistent support to the Company.

Your Directors also place on record their appreciation for the excellent contribution made by all stakeholders of ERPSOFT through their commitment, competence, co-operation and diligence to duty in achieving consistent growth for the Company.

DIRECTORS' RESPONSIBILITY STATEMENT

As required under Section 217 (2AA) of the Companies Act, the Directors hereby confirm that:

i. In the preparation of the annual accounts, the applicable accounting standards have been followed and that no material departures is made from the same;

ii. We have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give true and fair view of the state of affairs of the Company at the end of the financial year and of the profits of the Company for the period;

iii. We have taken proper and sufficient care 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; and

iv. We have prepared the annual accounts on a going concern basis.

PROSPECTS

ERPSOFT is focusing on Governance, Risk and Compliance (GRC) solutions of SAP.There is substantial potential in this niche area. ERPSOFT will partner with companies that have proven capabilities to execute projects and attract customers. .

Disclosure of Particulars of employees forming part of directors report pursuant to Section 217(2A) of the Companies Act, 1956 and the companies (Particulars of Employees) Rules, 1975

During the year no employee, had drawn salary in excess of the amounts prescribed under section 217(2A) of the Companies Act, 1956.

Disclosures of particulars in compliance with Clause 12 of the Securities and Exchange Board of India (Employee Stock Option Scheme) and (Employee Stock Purchase Scheme) Guidelines, 1999

No employee was issued Stock Option, during the year equal to or exceeding 1% of the issued capital of the Company.

For and on behalf of the Board of Directors,

Sd/-

K. Parvathi

Managing Director.

Chennai, September 03, 2012.








Mar 31, 2010

The Directors take great pleasure in presenting their report on the business and operations of your Co along with the Annual Report and audited financial statements for the period April 01, 2009 to March 31, 2010

FINANCIAL PERFORMANCE

Key aspects of your Companys financial performance for the year 2008-09 are tabulated below:

(In Rupees) Consolidated Parent

2009 - 2010 2008 - 2009 2009- 2010 2008 -2009

Sales and other income 3,02,57,159 2,69,82,655 52,83,566 36,48,203

Profit before tax 47,06,368 33,21,112 26,93,935 15,78,976

Provision for tax 3,79,570 3,48,229 3,79,570 3,48,229

Profit for the year 43,26,798 29,72,883 23,14,365 12,30,747

Accumulated losses carried forward 0 0 0 0

Appropriations : 0 0 0 0

Interim Dividend 0 0 0 0

Proposed dividend 0 0 0 0

Transfer to reserves 43,26,798 29,72,883 23,14,365 12,30,747

SUBSIDIARY COMPANIES

100% Subsidiary company, Libertycom LLC in USA. It is focusing on ERP, Business Intelligence, BPO and IT consulting services. The financial statements of the subsidiary are enclosed at the end of this annual report.

CONSOLIDATED RESULTS

Our Consolidated Sales for the current year have increased by Rs. 3,274,504/- and profit for the same period have increased by Rs.13, 53,915/-.

CORPORATE GOVERNANCE

Corporate Governance will continue to be Boards responsibility.

The Code of Ethics and Business Conduct of the Company is based on the following fundamental principles:

1) Lay solid foundations for management

2) Structure the Board to add value

3) Promote ethical and responsible decision-making

4) Safeguard integrity in financial reporting

5) Make timely and balanced disclosures

6) Recognize and manage business risks

7) Respect the rights of the shareholders

8) Encourage enhanced performance

9) Remunerate fairly and responsibly

10) Recognize the legitimate interest of the stakeholders

11) Legal and Statutory compliance

As in the past year separate committees for Audit, Protection of Members interest are constituted. A separate report on Corporate Governance, along with a certificate of Statutory Auditors of the Company, is annexed herewith.

A certificate from the Managing Director and CFO of the Company confirming internal controls and checks pertaining to financial statements for the period April 01, 2009 to 31 March, 2010 was placed before the Board of Directors and the Board has noted the same.

A list of the committees of the Board and names of their members is given below. The scope of each of these committees and other related information is detailed in the enclosed Corporate Governance Report.

a) Composition of the Audit Committee along with the Independent status

1) Mr. Pavan Srinivas, ACS Chairman, Audit Committee- Independent Director Non-Executive Professional Company Secretary

2) Mrs. R. Kamala Mohan, Member, Audit Committee Independent Director Non-Executive

3) Mr. Shiva Duvvuru, FCA, CPA Member, Audit Committee Executive Non-Independent Director Certified from Institute of Chartered Accountants of India Certified from American Institute of Certified Public Accountants Certified from Information Systems Audit & Control Association (ISACA)

b) Composition of the Shareholders / Investors Grievance Committee

1) Mrs. R. Kamala Mohan,

Chairman, Investors Grievance Committee

Independent Director

Non-Executive

2) Mr. Pavan Srinivas, ACS

Member, Investors Grievance Committee

Independent Director

Non-Executive

Professional Company Secretary

HUMAN RESOURCES

Employees are the key assets of the Company and the Company has created a healthy and productive work environment which encourages excellence. Your Company continuously invests in training staff in the latest technology trends and in various sub-verticals within the financial services domain. The Knowledge Process Outsourcing business of the Company is in an investment mode.

EMPLOYEE STOCK OPTION PLANS

No employee was issued Stock Option, during the year equal to or exceeding 1% of the issued capital of the Company.

FOREIGN EXCHANGE EARNINGS AND OUTGOINGS

During the year our Company earned foreign exchange inflow of Rs.75.17Lacs and the outgoings in foreign exchange were Nil.

CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION

The particulars as prescribed under sub-section (1)(e) of Section 217 of the Companies Act, 1956 read with Companies (Disclosure of particulars in the Report of Board of Directors) Rules, 1988, the relevant data pertaining to conservation of energy and technology absorption are furnished hereunder:

CONSERVATION OF ENERGY

The operations of the Company are not energy-intensive. The Company, however, takes measures to reduce and optimize energy consumption by using energy efficient computers etc. Further, offices have been designed to maximize the use of ambient lighting while conserving the air conditioning. The expense on power in relation to income is nominal and under control.

TECHNOLOGY ABSORPTION

Since businesses, process and technologies are changing constantly, investment in research and development activities is of great importance. Your Company lays a great importance on knowledge management and has a process for absorption of new technologies. Your Company continued its focus on quality up-gradation of the software development process and software product enhancements.

MANAGEMENTS DISCUSSION AND ANALYSIS REPORT

The Management Discussion and Analysis Report on Companys performance , industry trends and ot material changes with respect to the Company and its subsidiaries, wherever applicable are presented t forms part of this annual report.

RE-APPOINTMENT OF STATUTORY AUDITOR

M/s Vijayaraghavan and Associates, the present Statutory Auditors of the Company, retire at the ensu Annual General Meeting and have confirmed their eligibility and willingness to accept office, if re-appointed.

FIXED DEPOSITS

We have not accepted any fixed deposits. Hence, there is no outstanding amount as on the Balance Sh date.

ACKNOWLEDGEMENTS AND APPRECIATION

Your Directors take this opportunity to thank the customers, shareholders, suppliers, bankers, finan institutions and Central and State Governments for their consistent support to the Company.

Your Directors also place on record their appreciation for the excellent contribution made by all employees ERP Soft Systems Limited through their commitment, competence, co-operation and diligence to duty achieving consistent growth for the Company.

DIRECTORS RESPONSIBILITY STATEMENT

As required under Section 217 (2AA) of the Companies Act, the Directors hereby confirm that:

i. In the preparation of the annual accounts, the applicable accounting standards have been followed and that no material departures is made from the same;

ii. We have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give true and fair view of the state of affairs of the Company at the end of the financial year and of the profits of the Company for the period;

iii. We have taken proper and sufficient care 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; and

Iv We have prepared the annual accounts on a going concern basis.

PROSPECTS

ERP Soft is focusing in IT consulting and IT services. The strategy has been to bring on board experienced employees and or partners with decades of experience. The company is confident of substantial growth in the next three years.

Disclosure of Particulars of employees forming part of directors report pursuant to Section 217(2A) of the Companies Act, 1956 and the companies (Particulars of Employees) Rules, 1975

During the year no employee, had drawn salary in excess of the amounts prescribed under section 217(2A) of the Companies Act, 1956.

Disclosures of particulars in compliance with Clause 12 of the Securities and Exchange Board of India (Employee Stock Option Scheme) and (Employee Stock Purchase Scheme) Guidelines, 1999

No employee was issued Stock Option, during the year equal to or exceeding 1% of the issued capital of the Company.



For and on behalf of the Board of Directors,

Sd/- K.Parvathi Managing Director

Chennai, August 29, 2010.

 
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