Mar 31, 2018
To
The Members,
Palred Technologies Limited,
Hyderabad, Telangana, India
The Board of Directors hereby submits the report of the business and operations of your Company (âthe Companyâ or âPalredâ) along with the audited âFinancial statement for the âFiscal Year ended March 31, 2018. The Consolidated performance of the Company and its subsidiaries has been referred to where required.
1. Financial summary/highlights:
The performance during the period ended 31st March, 2018 has been as under: (Amount in Rs.)
Particulars |
Standalone |
Consolidated |
||
2017-2018 |
2016-2017 |
2017-2018 |
2016-2017 |
|
Turnover/Income (Gross) |
231.53 |
117.86 |
5,380.95 |
4,274.91 |
Loss before Finance charges, Depreciation, Taxation and Exceptional item |
94.46 |
(123.31) |
(549.65) |
(1062.44) |
Less: Finance charges (excluding amount capitalized) |
0 |
0 |
3.94 |
0 |
Loss before Depreciation, Taxation and Exceptional item |
94.46 |
(123.31) |
(553.59) |
(1062.44) |
Less : Depreciation |
22.63 |
20.96 |
88.70 |
75.74 |
Loss before Taxation and Exceptional item |
71.84 |
(144.26) |
(642.29) |
(1,138.18) |
Less: Exceptional item |
0 |
77.92 |
0 |
77.92 |
Loss before Tax |
71.84 |
(222.18) |
(642.29) |
(1,216.10) |
Less : Current tax |
0 |
74.57 |
0 |
74.57 |
Less: Deferred Tax benefits |
0 |
0 |
0 |
0 |
Less : Taxes of earlier years |
0 |
0 |
0 |
0 |
Loss after Tax |
71.84 |
(296.75) |
(642.29) |
(1,293.22) |
2. Performance Review Revenues - standalone
During the year under review, the Company has recorded an income of Rs. 231.53 Lakhs and profit of Rs. 71.84 Lakhs as against the income of Rs. 117.86 Lakhs and loss of Rs. 296.75 Lakhs in the previous financial year ending 31.03.2017.
Revenues - Consolidated
During the year under review, the Company has recorded an income of Rs. 5,380.95 Lakhs and loss of Rs. 642.29 Lakhs as against the income of Rs. 4,274.91 Lakhs and loss of Rs. 1,290.67 Lakhs in the previous financial year ending 31.03.2017.
The Company is looking forward for good profit margins in near future.
3. Transfer to reserves:
Pursuant to provisions of Section 134(3)(j) of the Companies Act, 2013, the company has not proposed to transfer any amount to general reserves account of the company during the year under review.
4. Material changes & commitment affecting the financial position of the Company
There are no material changes and commitments affecting the financial position of the Company, which have occurred between the end of the financial year and the date of this report.
5. Significant & material orders passed by the Regulators or Courts or Tribunals
No significant or material orders have been passed against the Company by the Regulators, Courts or Tribunals, which impacts the going concern status and companyâs operations in future.
6. Revision of financial statements:
There was no revision of the financial statements for the year under review.
7. Change in the nature of business, if any:
During the period under review and the date of Boardâs Report there was no change in the nature of Business.
8. Dividend:
Keeping the Companyâs growth plans in mind, your Directors have decided not to recommend dividend for the year.
9. Deposits From Public:
The Company has not accepted any deposits from public and as such, no amount on account of principal or interest on deposits from public was outstanding as on the date of the balance sheet.
10. Consolidated Financial Statements:
The consolidated financial statements of the Company are prepared in accordance with applicable Ind AS notified by Ministry of Corporate Affairs and form part of this annual report.
11. Indian Accounting Standards:
Your Company has adopted Indian Accounting Standard (Ind AS) notified by MCA and the relevant provision of the Companies Act, 2013 and the general circulars issued by the Ministry of Corporate Affairs from time to time.
The significant accounting policies which are consistently applied have been set out in the notes to the Financial Statements.
12. Subsidiaries:
Pursuant to first proviso to sub-section (3) of section 129 read with rule 5 of Companies (Accounts) Rules, 2014, a Statement containing the salient features of the financial statements of subsidiaries as on March 31, 2018 in Form AOC-1 is annexed herewith as Annexure- B to this report. Below are the descriptive details about the subsidiaries;
13. Investment in Subsidiaries:
During FY 2017-18, the Company had infused a capital of 13 Crores in its Subsidiaries, Palred Online Technologies Private Limited and Palred Technology Services Private Limited by subscribing to its equity shares.
14. Brand Protections:
Your Company has taken appropriate actions against counterfeits, fakes and other forms of unfair competitions/ trade practices.
PALRED, PTRON, DaZon, Xmate and LATESTONE are key intangible assets of the Company and its subsidiaries.
15. Training of Independent Directors:
Your Companyâs Independent Directors are highly qualified and have been associated with corporate and business organizations. They understand Companyâs business and activities very well, however, pursuant to Regulation 4 of the Listing Regulations, the Board has shown all the Independent Directors Companyâs business and manufacturing activities and were also introduced to Companyâs staff.
16. Independent Directorâs familiarization programmes
The Company continued with its Independent directorsâ familiarization program for familiarizing them with companyâs operations, regulatory and critical aspects which would enable them to effectively discharge responsibilities and functions conferred on them. Programs undertaken during the year include:
i. Corporate Strategy & plans of action
ii. GST & SAP implementation and its impact
iii. Workshop on Board Dynamics
iv. Investment of surplus funds, & project status
v. Risk analysis & mitigation framework of the Company
vi. SEBI Regulations & other Statutory laws
vii. Companies Act, 2013 & Amendment rules & regulations Details of familiarization programme imparted is placed on the Companyâs website and its web link is http://www.palred. com
17. Evaluation of Board, Committees and Directors
Pursuant to the provisions of the Act and the Listing Regulations, the Board had carried out performance evaluation of its own, the Board Committees and of the Independent directors. Further, Independent Directors at a separate meeting evaluated performance of the Non Independent Directors, Board as a whole and ofthe Chairman of the Board.
Manner in which the evaluation has been carried out and matters incidental thereto, have been detailed in the Report on Corporate Governance, which forms part of this report
18. Managerial Remuneration and particulars of employees
Information pursuant to Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed herewith as Annexure- D to this report.
Information pursuant to Rule 5(2) & 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 pertaining to the top ten names and other particulars of employees also form part of this report. However, this information is not sent along with this report pursuant to the proviso to Section 136(1) of the Act. Any shareholder interested in obtaining a copy of the same may write to the Company Secretary/Compliance Officer at the registered office address of the Company.
19. Number of Board and Committee Meetings:
Pursuant to Section 134(3) (b), details of Board Meetings held during the year are given in Corporate Governance (Annexure- F) part of this report.
During the year eight board meetings and four audit committee meetings & four Stakeholder Relationship Committee Meetings and two Nomination & Remuneration committee meetings were held, details of which are given in the Corporate Governance Report. The intervening gap between the meetings was within the period prescribed under the Companies Act, 2013.
A separate meeting of Independent Directors, pursuant to Section 149(7) read with Schedule VI of the Companies Act, 2013 and Regulation 25 of the Listing Regulations was held on 14 February, 2018.
20. Directors and key managerial personnel:
Mr. Palem Srikanth Reddy is the Chairman and Managing Director of the Company. Mrs. Richa Patnaik, Mr. Atul Sharma and Mr. S. VijayaSaradhi are the Independent Directors on Board of Palred and Mr. Naveen Kumar has appointed as company secretary w.e.f. 01.08.2017.
Mr. Palem Srikanth Reddy earlier was appointed as Managing Director of the Company for a period of 5 years with effect from 18.07.2013 to 17.07.2018 at the 14th Annual General Meeting held on 27.11.2013.
Based on the recommendations of the Nomination and Remuneration Committee, the Board of Directors of the Company at their meeting held on 30.05.2018, approved the re-appointment of Mr. Palem Srikanth Reddy (DIN: 00025889) as Managing Director of the Company for a term of five years commencing from 18.07.2018 to 17.07.2023.
21. Regulatory Affairs Between The End of Financial Year And Date Of Report
The following were the regulatory affairs occurred as on the date of Boardâs Report -
- As per SEBI Circular No. IMD/FPIC/CIR/P/2018/61 dated 5th April, 2018, the Central Depository Services (India) Limited (CDSL) was appointed as the Designated Depository for the purpose of monitoring the Foreign Investment Limits in the Company.
- As per SEBI Circular No. SEBI/HO/CFD/DCR1/ CIR/P/2018/85 dated 28th May, 2018, the Central Depository Services (India) Limited (CDSL) was appointed as the Designated Depository for the purpose of System Driven Disclosures in Securities Market for the Company.
22. Green Initiative:
Securities and Exchange Board of India (SEBI) has vide its circular No. SEBI/HO/MIRSD/DOP1/ CIR/P/2018/73dated 20th April, 2018 mandated that all the shareholders, whose ledger folio do not have or having incomplete details with respect to their PAN and Bank particulars, must submit the same to the Registrar and Transfer Agent (RTA) or the Company.
Your active co-operation is required in this regard and in order to be a part of the green initiative, to help in conserving trees for a greener India and to enable the Company to disseminate to you all the requisite documents and information electronically, i.e. through emails and make payments of dividend directly into your bank account, you are requested:-
a. To provide your PAN and bank details as required by SEBI. For crediting your dividend amount directly into your bank account through National Automated Clearing House (NACH), a separate form is attached for providing your bank details, kindly fill and sign the form and submit with RTA/Company (for shares held in physical form) or with your depository participant (for shares held in demat form), as the case may be, along with requisite documents mentioned in the form, within stipulated time.
b. To register or update your e-mail address by filling in and signing the attached form and submit with RTA/ Company (for shares held in physical form) or with your depository participant (for shares held in demat form), as the case may be, along with requisite documents mentioned in the form, within stipulated time.
Kindly note that it is mandatory for the Company to mention your bank details on the dividend payment instrument, in case where NACH details are not registered with the Company / RTA.
23. Statutory Auditors :
At the Annual General Meeting held on 30th September, 2016, (17th AGM) the Company has appointed M/s. Walker Chandiok & Co LLP, Hyderabad (Firm Registration No: 001076N/N500013) as statutory auditors of the Company to hold office until the conclusion of 20th Annual General meeting of the Company. In terms of the first proviso to Section 139 (1) of the Companies Act, 2013, the appointment of the auditors shall be placed for ratification at every Annual General Meeting. Accordingly, the appointment of M/s. Walker Chandiok & Co LLP, Chartered Accountants, as statutory auditors of the Company, is placed for ratification by the shareholders at the Annual General Meeting.
The Board of Directors recommended their re-appointment ratification for the financial year 2018-19. The Auditorsâ Report for the financial year 2017-18 is enclosed with the financial statements in this Annual Report.
24. Internal auditors:
Pursuant to provisions of Section 138 read with Rule 13 of the Companies (Accounts) Rules, 2014 and Section 179 read with Rule 8(4) of the Companies (Meetings of Board and its Powers) Rules, 2014; M/s. Laxminiwas & Co.,. Chartered Accountants were appointed as Internal Auditors of the Company for the Financial Year 2017-18.
Deviations are reviewed periodically and due compliance ensured. Summary of Significant Audit Observations along with recommendations and its implementations are reviewed by the Audit Committee and concerns, if any, are reported to Board.
The Board has re-appointed M/s. Laxminiwas & Co., Chartered Accountants, Hyderabad as Internal Auditors for the Financial Year 2018-2019.
25. Secretarial auditors:
Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, M/s. S. S. Reddy & Associates, Practicing Company Secretaries, was appointed to undertake the Secretarial Audit of the Company for the Financial Year 2017-18.
The Secretarial Audit Report in Form MR 3 is annexed herewith as Annexure- I to this report.
26. Qualifications in audit reports:
Explanations or comments by the Board on every qualification, reservation or adverse remark or disclaimer made, if any â
(a) Statutory Auditors Report:
The Board has duly reviewed the Statutory Auditorâs Report on the Accounts for the year ended March 31, 2018 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 rapid global challenges.
(b) Secretarial Audit Report:
The Board has duly reviewed the Secretarial Audit Report for the year ended March 31, 2018 on the Compliances according to the provisions of section 204 of the Companies Act 2013 and and after the sale of business, the Company does not have any operating business yet and is still in the process of appointing right candidate as CFO.
27. No Frauds reported by statutory auditors
There is no instance of frauds reported by the statutory auditors of the Company for the financial year under review under sub Section (12) of Section 143 of the Companies Act, 2013.
28. Conservation of energy, technology absorption and foreign exchange outgo:
The required information as per Sec.134 (3) (m) of the Companies Act 2013 is provided hereunder and Rule 8 of Companies (Accounts) Rules, 2014:
A. Conservation of Energy:
Your Companyâs 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:
1. Foreign Exchange Earnings: Nil
2. Foreign Exchange Outgo: Nil
29. Management discussion and analysis report:
Management discussion and analysis report for the year under review as stipulated under Regulation 4(3) read with schedule V , Part B of SEBI (Listing Obligations and Disclosure Requirements), Regulations 2015 with the stock exchange in India is annexed herewith as Annexure- J to this report.
30. Risk management policy:
Your Company follows a comprehensive system of Risk Management. Your Company has adopted a procedure for assessment and minimization ofprobable risks. It ensures that all the risks are timely defined and mitigated in accordance with the well-structured risk management process.
31. Corporate governance:
A Separate section titled âReport on Corporate Governanceâ along with the Auditorsâ Certificate on Corporate Governance as stipulated under Regulation 34 read with Schedule V of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 is annexed herewith as Annexure- F to this report.
The certificate of compliance on corporate governance by M/s. S.S. Reddy & Associates is annexed herewith as Annexure- G to this report.
32. Committees of the board:
Currently the Board has 4 committees: the Audit Committee, the Nomination and Remuneration Committee, the Stakeholder Relationship Committee and the Risk Management Committee. A detailed note on composition of the Board and its committees is provided in the Corporate Governance Section (Annexure- F) to this Report.
33. Extract of Annual Return:
As provided under section 92(3) of the Companies Act, 2013 and rule 12(1) of the Companies (Management and Administration) Rules, 2014, the extract of annual return under form MGT 9 is annexed herewith as Annexure- E to this report.
34. Authorised and paid up capital of the company:
The authorized capital of the company stands at Rs. 35,00,00,000/- divided into 2,80,38,800 equity shares of Rs.10/- each and 6,96,12,014 redeemable optionally convertible cumulative preference shares of Rs. 100/- each. The companyâs paid up capital is Rs. 9,73,25,660/- divided into 97,32,566 equity shares of Rs. 10/- each.
35. Declaration by Independent Directors:
All Independent Directors have given declarations that they meet the criteria of independence as prescribed under the provisions ofthe Companies Act, 2013 and Regulations 16(1) (b) and 25 of the Listing Regulations, such declarations are annexed herewith as Annexure- H to this report..
36. Policy on Directors appointment and Remuneration and other details:
The Companyâs policy on Directors appointment and remuneration and other matters provided in Section 178(3) of the Companies Act, 2013 has been disclosed in Corporate Governance Report, which forms part of Annual Report.
37. Directorâs Responsibility Statement:
In accordance with the provisions of Section 134(5) of the Companies Act, 2013, your Directors confirm that: -
a) in the preparation of the annual accounts for the financial year ended 31 March 2018, the applicable accounting standards and schedule III of the Companies Act, 2013 have been followed and there are no material departures from the same;
b) the Directors have 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 your Company as on 31 March 2018 and of the profit and loss of the Company for the financial year ended 31 March 2018;
c) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
d) the annual accounts have been prepared on a going concern basis;
e) proper internal financial controls laid down by the Directors were followed by the Company and that such internal financial controls are adequate and were operating effectively; and,
f) proper systems to ensure compliance with the provisions of all applicable laws were followed and that such systems were adequate and operating effectively.
38. Vigil Mechanism/Whistle Blower Policy:
The Board of Directors has formulated a Whistle Blower Policy which is in compliance with the provisions of Section 177(10) of the Companies Act, 2013 and Regulation 22 of the Listing Regulations. The Company has a vigil mechanism to deal with fraud and mismanagement, if any. The policy is on the website of the Company.
39. EMPLOYEE STOCK OPTION SCHEME
Details of the options up to March 31, 2018 are set out in the Annexure- A to this report, as required under clause 12 of the Securities and Exchange Board of India Regulation 14 of SEBI (Share Based Employee Benefits) Regulations, 2014.
40. Corporate social responsibility policy:
Since your Company does not have net worth of Rs. 500 Crore or more or turnover of Rs. 1000 Crore or more or a net profit of Rs. 5 Crore or more during the financial year, section 135 of the Companies Act, 2013 relating to Corporate Social Responsibility is not applicable and hence the Company need not adopt any Corporate Social Responsibility Policy.
41. Secretarial Standards:
The company is in compliance with Secretarial Standards issued by The Institute of Company Secretaries of India on Meetings of the Board of Directors and General Meetings.
42. Insurance:
The properties and assets of your Company are adequately insured.
43. Particulars of loans, guarantees:
The Company has not availed any facilities of Credit and Guarantee.
44. Internal Financial Control Systems:
Your Company has well laid out policies on financial reporting, asset management, adherence to Management policies and also on promoting compliance of ethical and well defined standards. The Company follows an exhaustive budgetary control and standard costing system. Moreover, the management team regularly meets to monitor goals and results and scrutinizes reasons for deviations in order to take necessary corrective steps. The Audit Committee which meets at regular intervals also reviews the internal control systems with the Management and the internal auditors.
The internal audit is conducted at the Company and covers all key areas. All audit observations and follow up actions are discussed with the Management as also the Statutory Auditors and the Audit Committee reviews them regularly.
45. Related Party Transactions:
During the financial year 2017-18, your Company has entered into transactions with related parties as defined under Section 2(76) of the Companies Act, 2013. All transactions with related parties were reviewed and approved by the Audit Committee. All related party transactions that were entered were on an armâs length basis and were in the ordinary course of business.
There are no materially significant related party transactions made by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of the Company at large.
The Form AOC-2 pursuant to Section 134(3)(h) of the Companies Act, 2013 read with Rule 8(2) of the Companies (Accounts) Rules, 2014 is is annexed herewith as Annexure-C to this report.
46. Disclosure about cost audit:
Cost Audit is not applicable for the financial year 2017-18.
47. 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.
The ratio of remuneration of each director to the median of employeesâ remuneration as per Section 197(12) of the Companies Act, 2013, read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed herewith as Annexure- D to this report.
None of the employees is drawing Rs. 8,50,000/- and above per month or Rs.1,02,00,000/- and above in aggregate per annum, the limits prescribed under Section 134 of the Companies Act, 2013.
48. Ratio of remuneration to each director:
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, the ratio of remuneration paid to Managing Director and maiden employees is 3:1
49. Non-executive directorsâ compensation and disclosures:
None of the Independent / Non-Executive Directors has any pecuniary relationship or transactions with the Company which in the Judgment of the Board may affect the independence of the Directors.
50. Industry based disclosures as mandated by the respective laws governing the company:
The Company is not a NBFC, Housing Companies etc., and hence Industry based disclosures is not required.
51. Prevention of Sexual Harassment at Workplace:
As per the requirement of The Sexual Harassment of Women at Workplace (Prevention, Prohibition &Redressal) Act, 2013 read with rules made thereunder, your Company has constituted Internal Complaints Committee which is responsible for redressal of complaints related to sexual harassment. During the year under review, there were no Complaints pertaining to sexual harassment.
52. Appreciation & acknowledgement:
Your Directors place on record their appreciation for the overwhelming co-operation and assistance received from the investors, customers, business associates, bankers, vendors, as well as regulatory and governmental authorities. Your Directors also thanks the employees at all levels, who through their dedication, co-operation, support and smart work have enabled the company to achieve a moderate growth and is determined to poise a rapid and remarkable growth in the year to come.
Your Directors also wish to place on record their appreciation of business constituents, banks and other âfinancial institutions and shareholders of the Company like SEBI, BSE, NSE, NSDL, CDSL, ICICI Bank, Kotak Mahindra Bank, HSBC Bank and State Bank of India etc. for their continued support for the growth of the Company.
For and on behalf of the Board of
Palred Technologies Limited
Sd/-
Palem Srikanth Reddy
Place: Hyderabad Managing Director
Date: 14.08.2018 (DIN: 00025889)
Mar 31, 2016
Boardâs Report
Dear Members,
The Board of Directors hereby submits the report of the business and operations of your Company ( âthe Companyâ or âPalredâ) along with the audited financial statement for the financial Year ended March 31, 2016. The Consolidated performance of the Company and its subsidiaries has been referred to where required.
1. FINANCIAL SUMMARY, OPERATION/ RESULTS OF OUR OPERATION:
The financial performance during the financial year 2015-2016 is as hereunder: (Rs. In Lakhs)
Particulars |
Standalone |
Consolidated |
||
31-Mar-16 |
31-Mar-15 |
31-Mar-16 |
31-Mar-15 |
|
Audited |
Audited |
Audited |
Audited |
|
Income from operations |
- |
216.53 |
3,818.33 |
704.98 |
Total expenses |
307.00 |
578.14 |
6,233.84 |
1,263.78 |
Profit / (Loss) from operations before other income, finance costs and exceptional items |
(307.00) |
(361.61) |
(2,415.51) |
(558.80) |
Other income |
230.00 |
621.43 |
306.90 |
650.51 |
Profit / (Loss) from ordinary activities before finance costs and exceptional items |
(87.87) |
259.29 |
(2,108.61) |
91.71 |
Finance costs |
(0.87) |
(0.53) |
(38.74) |
(0.98) |
Profit / (Loss) from ordinary activities after finance costs but before exceptional items |
(2,147.35) |
90.73 |
||
Exceptional items |
- |
- |
||
Profit / (Loss) from ordinary activities before tax |
(87.87) |
259.29 |
(2,147.35) |
90.73 |
Tax expense |
(10.94) |
Nil |
(9.80) |
(1.14) |
Net Profit / (Loss) from ordinary activities after tax |
(98.81) |
259.29 |
(2,157.15) |
89.59 |
Extraordinary items (net of tax expense) |
- |
- |
- |
- |
Net Profit / (Loss) for the period/year |
(98.81) |
259.29 |
(2,157.15) |
89.59 |
Paid-up equity share capital (Face value ''10 per share) : (refer note 3) |
821.31 |
1951.85 |
821.31 |
1,951.85 |
Reserve excluding revaluation reserves as per balance sheet of previous accounting year |
5007.97 |
6948.39 |
3,299.62 |
7,014.24 |
Earnings Per Share (Basic and Diluted) |
-0.89 |
1.32 |
(14.40) |
0.64 |
Notes: The above figures are extracted from the standalone and consolidated financial statements.
Share Capital
i. As detailed in the Annual Report 2014-2015, the Company has pursuant to Honâble High court order dated 09.06.2015, reduced the paid up capital of the Company to the extent of sixty percent which is in excess of the business requirements of the Company. The record date fixed by the Board of Directors for Reduction of Equity Share Capital was July 9, 2015. The company has paid Rs. 16.50/- per Equity Share to Equity Share Holders of the Company for 60% shareholding reduced by the Company. Consequently, the issued, subscribed and Paid-up capital shall stand reduced to Rs. 7,80,73,940 consisting of 1,56,14,788 Equity Shares of Rs. 5/- each pursuant to Capital reduction.
ii. The Company has allotted 8,11,379 fully paid-up equity shares of Rs. 5/- per share vide Preferential Allotment dated December 16, 2016.
iii. The Company has consolidated its 2 equity shares of Rs. 5 each into 1 equity share of Rs. 10 each in its Extra-Ordinary General meeting held on 13 November 2015. Subsequent to year ended 31 March 2016, the Company obtained the necessary approval from the stock exchanges and trading of equity shares with new face value of Rs. 10 per share has resumed effective from 9 May 2016. The effect of this consolidation of equity shares has been given in computing earnings per share of all periods presented.
iv. (a) Pre-Consolidation, The Authorized and Paid up Capital of the Company is Rs. 35 Crores divided into (a) 5,60,77,600
Equity Shares of Rs. 5/- (Rupees Five Only) each and (b) 6,96,120 Redeemable Preference Shares of Rs.100/-(Rupees One Hundred only).
(b) Post Consolidation, the Authorized and Paid up Capital of the Company is Rs. 35 Crores divided into (a) 2,80,38,800 Equity Shares of Rs. 10/- (Rupees Ten Only) each and (b) 6,96,120 Redeemable Preference Shares of Rs.100/-(Rupees One Hundred only).
Review oi operations:
Revenues - standalone:
Our total income on a standalone basis is Rs. 220 Lakhs as against 621.43 Lakhs in previous year. The Change in Income is on account of Discontinuation of Online E-Commerce business from October 2014, which is operated by Subsidiary Company, Palred Online Technologies Private Limited.
Revenues - Consolidated
Our total income on a consolidated basis increased to Rs. 3818.33 Lakhs from Rs 704.98 Lakhs in the previous year. Our revenues from Palred Online Technologies Private Limited, the e-commerce subsidiary of the Company increased to Rs. 3809.93 Lakhs from 693.25 Lakhs in the previous year. The revenue for Palred Technology Services Private Limited is Rs. 38.4 Lakhs in the 2015-2016.
Profits/Loss - standalone
Loss on Standalone Basis is 98.81 Lakhs as against profit of Rs 259.29 Lakhs in Previous Year. The Change is on account of Discontinuation of Online E-Commerce business from October 2014, which is operated by Subsidiary Company, Palred Online Technologies Private Limited.
Profits/Loss - consolidated
Loss on a consolidated basis amounted to Rs. 2157.15 Lakhs as against Profits of Rs. 89.59 Lkahs in previous Year.
Distribution and Business Promotion Expenses amounted to Rs. 3474.46 and 428.93 Lakhs for the years ended March 31, 2016 and March 31, 2015.
Purchase of Stock was Rs. 1527.06 and 690.00 for the years ended March 31, 2016 and March 31, 2015.
Capital expenditure on tangible assets - standalone
This year, on a standalone basis, we capitalized Rs. 1.42 Lakhs. This Comprises Rs. 1.20 Lakhs for investment in Computer Equipment and the balance Rs 0.22 Lakhs on infrastructures.
Capital expenditure on tangible assets - consolidated
On a consolidated basis, we capitalized Rs. 83.02 Lakhs. During the current year, Rs 32.3 Lakhs has been invested in computer equipment and the balance Rs 51.72 Lakhs on Infrastructure.
Liquidity
We continue to be debt-free and maintain sufficient cash to meet our strategic objectives.
Particulars of Loans, guarantees and investments:
Loans, guarantees and investments covered u/s 186 of the Companies Act, 2013 form part of the financial Statements provided in the Annual report.
Dividend:
Since the Company has ventured in to new businesses after sale of its business and distribution of sale proceeds among its shareholders, your Board of Directors regret their inability to declare dividend for the financial year 2015-2016.
Transfer to Reserves:
The Company has not transferred/proposes to transfer any amount to Reserves.
Public Deposits:
Your Company has not accepted any deposits falling within the meaning of Sec. 73 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules 2014, during the financial year under review.
Credit & Guarantee Facilities:
The Company has not availed any facilities of Credit and Guarantee. Corporate Social Responsibility Policy:
Since your Company does not have the net worth of Rs. 500 Crore or more, or turnover of Rs. 1000 Crore or more, or a net profit of Rs. 5 Crore or more during preceding 3 financial years, section 135 of the Companies Act, 2013 relating to Corporate Social Responsibility is not applicable and hence the Company need not adopt any Corporate Social Responsibility Policy.
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.
Particulars of Contracts or Arrangements with related Parties:
Particulars of Contracts or arrangements with Related Parties referred to in Section 188(1) of the Companies Act, 2013, in the Prescribed Form AOC-2, is appended as Annexure 2 to Boardâs Report.
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, the ratio of remuneration paid to Managing Director and maiden employees is 3:1
Material changes and commitments, affecting the financial position of the company between the end of the financial year of the company to which the financial statements relate and the date of the report:
(1) The Shareholders of the Company, have at the Extra Ordinary General Meeting held on 13 November 2015, approved consolidation of 2 equity shares of Rs. 5 each into
1 equity share of Rs. 10 each. Subsequent to year ended 31 March 2016, the Company obtained the necessary approval from the stock exchanges and trading of equity shares with new face value of Rs. 10 per share has resumed effective from 9 May 2016.
(2) As on March 31, 2016 the Company has 98.8% stake in Palred Technology Services Private Limited. On June 20, 2016, the Company has acquire 100% stake by Acquisition of Beneficial Interest in shares of Palred Technology Services Private Limited, making it a wholly owned subsidiary of Palred Technologies Limited.
Management Discussion and Analysis:
In terms of the provisions of Regulations 34 of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) 2015, the Managementâs Discussion and Analysis is set out in this Annual report.
II) BUSINESS
Strategy:
Our Strategic objective is to build multiple verticals in E-Commerce and IT and IT related business and obtain sustainable growth. The Key word for the year has been âPERSEVERENCEâ and this has been applied to everything we do.
Subsidiaries:
The new domains of Business which have gained momentum during the year are e-commerce and IT solutions for E-commerce,
At the beginning of the year we had two direct subsidiaries -
a) Palred Online Technologies Private Limited and
b) Palred Technology Services Private Limited.
During the year we have established 2 step down Subsidiaries
a) Palred Technology Services USA - subsidiary of Palred Technology Services Private Limited and
b) Palred Online Bilism Teknoljileri Ticaret Anonim Sirketi, Turkey, Istanbul - subsidiary of Palred Online Technologies Private Limited.
Palred Online Technologies Private Limited:
Palred Online Technologies Private Limited owns and operates e-commerce portal, Latestone.com, Indiaâs only e-tailer specialized in tech and mobile accessories such as Bluetooth devices, mobile covers, tablet accessories, cables, power banks, Android TVs, headsets, smart watches or CCTVâs, it stocks over 10,000 different products in its inventory and operates through its own Fulfillment centers in Hyderabad and Delhi.
During the year the company has continued its aggressive growth and has declared a 450% growth in net revenue on a year on year basis. In a very short span of time, Late stone. com has reached a milestone by achieving an average of 4000 orders per day, from an average of 100 orders per day in the beginning. The website receives over 3.5 Million visitors in a month and till date has successfully shipped / delivered more than one million orders since the commencement of its operations.
The average order value on LatestOne.com has increased from INR 450 in 2014-2015 to INR 700 in 2015-2016, The market size of Tech & Mobile accessories market in India is estimated at Rs. 18,000 crores by Value, It is the fastest growing product range in the online category and the Market is expected to grow 20-25% year-on-year for the next 3 years.
The Company also plans to increase revenue by expanding product categories, selling quality products and creating long term goodwill, and set up fulfillment centers, to provide quicker delivery of products sourced locally.
Post Closure of Financial Year, the Company has developed a hybrid model and converted the existing Business Model into a managed marketplace. The Company also established a Fulfillment Centre in Mumbai.
Palred Technology Services Private Limited.
Palred Technology Services Private Limited is the IT vertical of Palred. It provides IT solutions to access relevant data, provided in a timely and cost-effective manner, development of software program for ecommerce portal latestone.com.
During the year, the Board of Directors (the Boardâ) reviewed the affairs of the subsidiaries. In accordance with Section 129(3) of the Companies Act, 2013, we have prepared consolidated financial statements of the Company, which forms part of this Annual Report.
Highlights of performance of subsidiary companies and their contribution to the overall performance of the company
during the period under report have been indicated in the Boardsâ Report, wherever required. Further, a statement containing the salient features of the financial statement of our subsidiaries in the prescribed format AOC-l is appended as Annexure 1 to the Boardâs report. The statement provides the details of performance and financial positions of each of the subsidiaries.
In accordance with Section 136 of the Companies Act, 2013, the audited financial statements, including the consolidated financial statements are available on our website, www. palred.com.
Investment in Subsidiaries:
a) Palred Online Technologies Private Limited:
On July 29, 2015 and May 30, 2016, the Board of Palred Technologies Limited, authorized the Company to invest Rs. 10 crores and Rs. 5 Crores respectively in Palred Online Technologies Private Limited.
The Company has undertaken valuation by an independent value and accordingly the investment was made at Rs. 11.50/- per share including a premium of Rs.1.50/- per share .
The Company holds 82% stake in the said subsidiary.
b) Palred Technology Services Private Limited:
On July 29, 2015, the Board of Palred Technologies Limited, authorized the Company to invest Rs. 5 Crores in Palred Technology Services Private Limited.
The Company holds 99.8% stake in the said Subsidiary.
The Company has acquired Beneficial Interest from the shareholders on June 20, 2016 and Palred Technology Services Private Limited is now a wholly owned Subsidiary of Palred Technologies Limited.
Branding:
PALRED, PTRON and LATESTONE are key intangible assets of the Company and its subsidiaries.
III. HUMAN RESOURCE MANAGEMENT
Post sale of Business in 2013, the Company has been venturing new areas of operations. We have received 450 (Approximate) applications from prospective employees. Palred group added 200 employees during 2015-2016, taking the total strength to 185 as on 31.03.2016 from 93 as on 31.03.2015.
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. 8,50,000/- and above per month or Rs.1,02,00,000/- and above in aggregate per annum, the limits prescribed under Section 134 of the Companies Act, 2013 read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014.
Particulars of employees
The ratio of remuneration of each director to the median of employeesâ remuneration as per Section 197(12) of the Companies Act, 2013, read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed to the Boardâs report. (Annexure 3).
IV. CORPORATE GOVERNANCE
Our Corporate Governance Philosophy:
An effective corporate governance is crucial for the management of a companyâs business affairs as well as for money market communication. Our commitment to higher corporate governance standards is our chance to demonstrate our dedication to well-balanced and transparent rules to the market participants and emphasize the importance of our clearly defined management tools and responsibilities internally
Palred believes that sound corporate governance is critical to enhance and retain investor trust. Accordingly, we always seek to attain performance with integrity. The Board extends its fiduciary responsibilities in the widest sense of the term and aims at enhancing long term shareholder value and respect minority rights in all business decisions.
Palred in its continuous initiative and drive towards good governance and accountability, has upheld the corporate governance through ethical business practices, integrity and transparent business operations. Palred has full support of the board and employees in the corporate governance initiative.
At the core of the corporate governance practice is the board, which oversees how the management serves and protects the interests of all the stakeholders of the company. Palred believes that an active, well informed and independent board is necessary to ensure highest standards of corporate governance.
Number of meetings of the Board
The Board met ten times during the financial year, the details of which are given in the Corporate governance report. The maximum interval between any two meetings did not exceed 120 days, as prescribed in the Companies Act, 2013.
Directorsâ appointment and remuneration
The company has majority of Independent Directors on Board. On March 31, 2016, the Board consists of four members, one executive Director and 3 are independent directors.
We affirm that the remuneration paid to the directors is as per the terms laid out in the nomination and remuneration policy of the Company.
None of the Independent / Non-Executive Directors has any pecuniary relationship or transactions with the Company which may affect the independence of the Directors.
Board evaluation
SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 mandates that the Board shall monitor and review the Board evaluation framework. The framework includes the evaluation of directors on various parameters such as :
- Board dynamics and relationships
- Information flows
- Decision-making
- Relationship with stakeholders
- Company performance and strategy
- Tracking Board and committeesâ effectiveness
- Peer evaluation
The Companies Act, 2013 states that a formal annual
evaluation needs to be made by the Board of its own performance and that of its committees and individual directors. Schedule IV of the Companies Act, 2013 states that the performance evaluation of independent directors shall be done by the entire Board of Directors, excluding the director being evaluated.
The evaluation of all the directors and the Board as a whole was conducted based on the criteria and framework adopted by the Board.
The evaluation process has been explained in the Corporate Governance report. The Board approved the evaluation results as collated by the nomination and remuneration committee.
Code of conduct
In compliance with Regulation 26(3) of the SEBI (Listing Obligations and Disclosure Requirements) Regulation, 2015 and the Companies Act, 2013, the Company has framed and adopted a Code of Conduct and Ethics (the Codeâ). The Code is applicable to the members of the Board, the executive officers and all employees of the Company and its subsidiaries. The Code is available on our website, www. palred.com.
All members of the Board, the executive officers and senior financial officers have affirmed compliance to the Code as on March 31. 2016.
A declaration to this effect, Signed by the Chairman and MD forms part of the Annual Report.
Independent directors
The Companies Act, 2013 provides for the appointment of independent directors. Sub-section (10) of Section 149 of the Companies Act, 2013 (effective April 1, 2014) provides that independent directors shall hold office for a term of up to five consecutive years on the board of a company; and shall be eligible for re-appointment on the passing of a special resolution by the shareholders of the Company. Accordingly, all independent directors were appointed by the shareholders Annual General Meeting as required under Section 149(10).
Further, Section 149(11) states that no independent director shall be eligible to serve on the board for more than two consecutive terms of five years. Section 149(13) states that the provisions of retirement by rotation as defined in subsections (6) and (7) of Section 152 of the Act shall not apply to such independent directors. None of the independent directors will retire at the ensuing AGM.
Declaration by Independent Directors
The Company has received necessary declaration from each independent director under Section 149(7) of the Companies Act, 2013, that he/she meets the criteria of independence laid down in Section 149(6) of the Companies Act, 2013 and Regulation 25 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
Directors and Key Managerial Personnel :
Mr. Palem Srikanth Reddy is the Chairman and Managing Director of the Company. Mrs. Richa Patnaik, Mr. Atul Sharma and Mr. S. Vijaya Saradhi are the Independent Directors on Board of Palred.
Inductions and Resignations:
a) Mr. Atul Sharma, Mr. S. Vijaya Saradhi and Mrs. Richa Patnaik have been appointed as Independent Directors at the AGM held on 30.09.2015 for a period of 5 years.
b) The Board on the recommendation of the Nomination and Remuneration Committee, appointed Mrs. N Archana Sastry as Company Secretary effective, October 15, 2015.
c) Mr. T.R.Sivarama Krishnan, and Mr Mohan Krishna Reddy have resigned from the post of Directors w.e.f. 14.08.2015.
d) Ms. A. Amala has resigned resigned from the post of Directors w.e.f. 29.08.2015 respectively.
e) Mr. E. Srinivas Prasad has resigned from the post of Director w.e.f 31.08.2015
Committees of the Board:
Currently the Board has 4 committees: The Audit Committee, the Nomination and Remuneration Committee, the Stakeholder Relationship Committee and the Risk Management Committee. A detailed note on composition of the Board and its committees is provided in the Corporate Governance Section of the Annual Report.
Internal financial control and its adequacy
The Board has adopted policies and procedures for ensuring the orderly and efficient conduct of its business, including adherence to the Companyâs policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial disclosures.
Significant and material orders
There are no Significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and Companyâs operations in future.
Extract of annual return
In accordance with Section 134(3)(a) of the Companies Act, 2013, an extract of the annual return in the prescribed format is appended as Annexure 4 to the Boardsâ report.
Secretarial Standards:
The company is in compliance with Secretarial Standards issued by The Institute of Company Secretaries of India on Meetings of the Board of Directors and General Meeting.
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 www.palred.com.
Directorsâ responsibility statement
The financial statements are prepared in accordance with mandatory accounting standards as prescribed under Section 133 of the Companies Act, 2013 (the Actâ), read with Rule 7 of the Companies (Accounts) Rules, 2014, the provisions of the Act (to the extent notified) and guidelines issued by the Securities and Exchange Board of India (SEBI). There are no material departures from the prescribed accounting standards in the adoption of these standards.
The directors confirm that:
- In preparation of the annual accounts for the financial year ended March 31, 2016, the applicable accounting standards have been followed.
- They have 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.
- They have taken proper and sufficient care towards 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.
- They have prepared the annual accounts on a going concern basis.
- They have laid down internal financial controls, which are adequate and are operating effectively
- They have devised proper systems to ensure compliance with the provisions of all applicable laws and such systems are adequate and operating effectively.
V. Auditors
Statutory auditors
At the Annual General Meeting held on September 30, 2015, Walker Chandiok &. Co. LLP, Chartered Accountants, were appointed as statutory auditors of the Company to hold office till the conclusion of the next Annual General Meeting to be held in the calendar year 2016.
The Company has already received letter from them to the effect that their appointment, if made by the shareholders, would be within the prescribed limits and that they are not disqualified for re-appointment within the meaning of the Companies act 2013. The Board of Directors recommend their re-appointment for the financial year 2015-16. Accordingly, the re-appointment of Walker Chandiok &. Co. LLP, Chartered Accountants, as statutory auditors of the Company, is placed for approval by the shareholders.
The Auditorsâ Report for financial year 2015-2016 does not contain any qualification, reservation or adverse remark. The Auditorsâ Report is enclosed with the financial statements in this Annual Report.
Internal Audit:
Pursuant to section 138 of the Companies Act, 2013 and rules made there under, M/s. Lakshmi Niwas & Co., Chartered Accountants, Hyderabad were appointed as Internal Auditors of the Company to conduct internal audit of the functions and activities of the company.
The Board has re-appointed M/s. Lakshmi Niwas & Co., Chartered Accountants, Hyderabad as Internal Auditors for the Financial Year 2016-2017.
Secretarial auditor
Mr. S. Sarweswar Reddy & Co, Practicing Company Secretary, was appointed to conduct the secretarial audit of the Company for the financial year 2015-2016, as required under Section 204 of the Companies Act, 2013 and Rules there under. The secretarial audit report for financial year 2015-2016 forms part of the Annual Report as Annexure 5 to the Boardâs report. After the sale of business, the Company does not have any operating business yet and is still in the process of appointing right candidate as CFO.
The Board has re-appointed S. Sarweswar Reddy & Co, Practicing Company Secretary, as secretarial auditor of the Company for financial year 2016-2017.
Auditorsâ certificate on corporate governance
As required by SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the auditorsâ certificate on corporate governance is enclosed as Annexure 6 to the Boardâs report. The auditorsâ certificate for financial year 2015-2016 does not contain any qualification, reservation or adverse remark.
VI. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE OUTGO:
The required information as per Sec. 134 (3) (m) of the Companies Act 2013 is provided hereunder and Rule 8 of Companies (Accounts) Rules, 2014:
A. Conservation of Energy:
Your Companyâs 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:
1. Foreign Exchange Earnings: Nil
2. Foreign Exchange Outgo: Nil
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
Industry Based Disclosures As Mandated By the Respective Laws Governing The Company
The Company is not a NBFC, Housing Companies etc., and hence Industry based disclosures is not required.
INSURANCE:
The properties and assets of your Company are adequately insured. DISCLOSURE ABOUT COST AUDIT:
Cost Audit is not applicable to your Company.
ACKNOWLEDGEMENTS:
Your Directors place on record their appreciation for the overwhelming co-operation and assistance received from the investors, customers, business associates, bankers, vendors, as well as regulatory and governmental authorities. Your Directors also thanks the employees at all levels, who through their dedication, co-operation, support and smart work have enabled the company to achieve a moderate growth and is determined to poise a rapid and remarkable growth in the year to come.
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, NSE, NSDL, CDSL, ICICI Bank, Kotak Mahindra Bank and State Bank of India etc. for their continued support for the growth of the Company.
For and on behalf of the
Board Palred Technologies Limited
Sd/-
Palem Srikanth Reddy
Chairman and
Place : Hyderabad Managing Director
Date : September 2, 2016 (DIN: 00025889)
Mar 31, 2015
To the Members,
The Directors have pleasure in presenting before you the 16th 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:
The performance during the period ended 31st March, 2015 has been as
under:
(Rs. In millions)
Particulars 2014-2015 2013-2014
Consolidated Standalone Standalone
Total Income 135.55 83.80 221.19
Total Expenditure 122.22 54.22 207.27
Operating Profit /
(Loss) (EBITDA) 13.33 29.58 13.92
Interest - - 0.43
Depreciation and
amortization 4.37 3.65 5.63
Profit before Tax 8.96 25.93 7.86
Tax Expense - - 337.73
Profit/(Loss) after tax and
before exceptional items 8.96 25.93 (329.87)
Exceptional Items - - 1601.48
Profit/(Loss) after tax
and Exceptional Items 8.96 25.93 1271.61
Minority Interest (share of Loss) (3.55) - -
Profit / (Loss) after
Minority Interest 12.51
Basic and diluted
Earnings per share (in Rs.) 0.32 0.66 32.57
REVIEW OF OPERATIONS:
During the year under review, the Company has recorded a consolidated
income of Rs.1355 lakhs and the profit of Rs. 125.10 lakhs as against
an income of Rs.2283.39 Lakhs and profit of Rs. 12716.06 Lakhs in the
previous financial year ending 31.03.2014.
DIVIDEND:
Since the Company has ventured in to new businesses after sale of its
business and distribution of sale proceeds among its shareholders, your
Board of Directors regret their inability to declare dividend for the
financial year 2014-2015.
REDUCTION OF CAPITAL:
The Company has pursuant to Hon,ble High court order dated 09.06.2015,
reduced the paid up capital of the Company to the extent of sixty
percent which is in excess of the business requirements of the Company.
Consequently, the issued, subscribed and Paid-up capital shall stand
reduced from Rs. 195,184,850/- (Rupees Nineteen Crore Fifty One Lakhs
Eighty Four Thousand Eight Hundred and Fifty Only) consisting of
39,036,970 (Three Crore Ninety Lakhs Thirty Six Thousand Nine Hundred
and Seventy Only) Equity Shares of Rs. 5/- (Rupees Five Only) each
fully paid-up to Rs. 78,073,940 (Rupees Seven Crore Eighty Lakhs
Seventy Three Thousand Nine Hundred and Forty Only) consisting of
15,614,788 (One Crore Fifty Six Lakhs Fourteen Thousand Seven Hundred
and Eighty Eight Only) Equity Shares of Rs. 5/- (Rupees Five Only)
each.
INFORMATION ABOUT THE FINANCIAL PERFORMANCE / FINANCIAL POSITION OF THE
SUBSIDIARIES / ASSOCIATES/ JOINT VENTURES:
Palred Technology Services Private Limited and Palred Online
Technologies Private Limited are the subsidiary companies of Palred
Technologies Limited. The performance details of the Subsidiary
companies are as under:
Palred Online Technologies Private Limited (Rs. In millions)
Particulars 2014-15 2013-2014
Standalone Standalone
Total Income 69.33 0.28
Total Expenditure 110.29 0.87
Operating Profit /
(Loss) (EBITDA) (37.92) (0.59)
Interest
Depreciation and amortization 0.72 0.01
Profit before Tax (38.64) (0.60)
Tax Expense
Profit/(Loss) after tax (38.64) (0.60)
Basic and diluted
Earnings per share (in Rs.) (7.55) (6.00)
Palred Technology Services Private Limited (Rs. In millions)
Particulars 2014-15 2013-14
Standalone Standalone - -
Total Income
Total Expenditure 0.99 -
Operating Profit /
(Loss) (EBITDA) (0.99) -
Interest - -
Depreciation and amortization - -
Profit before Tax (0.99) -
Tax Expense - -
Profit/(Loss) after tax (0.99) -
Basic and diluted
Earnings per share (inRs.) (7) -
* FY 2014-15 being first year of operations there are no comparative
figures for FY 2013-14
MANAGEMENT DISCUSSION AND ANALYSIS REPORT:
The Management Discussion and Analysis as required under clause
49(VIII)(D) of the Listing Agreement forms a part of this Report.
CORPORATE GOVERNANCE
A Separate section titled "Report on Corporate Governance" along with
the Auditors, Certificate on Corporate Governance as stipulated under
Clause 49 of the Listing Agreement forms a part of this report.
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.
DIRECTORS AND KEY MANANGERIAL PERSONNEL:
During the year, Mr. Atul Sharma, Mr.S.Vijaya Saradhi and Mrs. Richa
Patnaik were appointed as Additional Directors. Now the Board proposes
to appoint themas Independent Directors in line with the requirements
of the Companies Act, 2013, it is therefore proposed to appoint
existing additional directors in the independent category, as
Independent Director on the Board of the Company for a term up to five
consecutive years. A brief profile of proposed Independent Directors,
including nature of their expertise, is provided in this Annual Report.
a) Notice has been received from Members proposing candidature of the
Director namely Mr. Atul Sharma, Mr. S. Vijaya Saradhi and Mrs. Richa
Patnaik for the office of Independent Director of the Company In the
opinion of the Board, they fulfil the conditions specified in the
Companies Act, 2013 and the Rules made there under for appointment as
Independent Director of the Company.
b) Mr. T.RSivarama Krishnan, Ms. A. Amala and Mr Mohan Krishna Reddy
have resigned from the post of Directors we.f 14.08.2015
c) Mr. E. Srinivas Prasad has resigned from the post of Director we.f
31.08.2015
Details of appointments of the director:
Name of the Director Mr. Atul Sharma Mr. S. Vijaya
Saradhi Mrs.Richa
Patnaik
Date of Birth 27/08/1965 06/10/1959 11/11/1980
Date of Appointment 14/05/2015 14/05/2015 31/08/2015
Qualifications CA M.Com PGDBM
No. of Shares
held in the Company 25000 2000 Nil
Directorships
held in other
companies
(excluding private
limited and foreign
companies) Nil Nil Nil
Positions held in
mandatory committees
of other
companies Nil Nil nil
DECLARATION FROM INDEPENDENT DIRECTORS ON ANNUAL BASIS
The Company has received a declaration from, Mr. S. Vijaya Saradhi, Mr.
Atul Sharma and Mrs. Richa Patnaik, Independent directors of the
company to the effect that they are meeting the criteria of
independence as provided in Sub-section (6) of Section 149 of the
Companies Act, 2013.
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 ww.palred.com
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.
AUDITORS AND AUDITORS REPORT
In the previous Annual General Meeting ( 15th AGM), the Company has
appointed M/s. Walker Chandiok & Co., LLP, Chartered accountants as
statutory Auditors to hold office until the conclusion of the 16th
annual General Meeting. The Company has already received letter from
them to the effect that their appointment, if made by the shareholders,
would be within the prescribed limits and that they are not
disqualified for re-appointment within the meaning of the Companies act
2013. The Board of Directors recommend their re-appointment for the
financial year 2015-16.
INTERNAL AUDIT:
M/s. Lakshmi Niwas & Co., Chartered Accountants, Hyderabad are the
Internal Auditors of the Company.
SECRETARIAL AUDIT:
Pursuant to the provisions of Section 204 of the Companies Act, 2013
and the Companies (Appointment and Remuneration of managerial
personnel) Rules 2014, Mr. S.Sarveswara Reddy, Practicing Company
Secretary has conducted Secretarial Audit of the Company for the FY
2014-15. The Secretarial Audit Report for the FY 2014-15 is annexed
hereto and forms part of this Annual report. The Company on large
scale operations globally is in the process of appointing right
candidate as CFO.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
OUTGO:
The required information as per Sec.134 (3) (m) of the Companies Act
2013 is provided hereunder:
A. Conservation of Energy:
Your Company,s operations are not energy intensive. Adequate measures
have been taken toconserve 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: 95,15,312
PUBLIC DEPOSITS:
Your Company has not accepted any deposits falling within the meaning
of Sec. 73 of the Companies Act, 2013 and the Companies (Acceptance of
Deposits) Rules 2014, during the financial year under review.
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.
INSURANCE:
The properties and assets of your Company are adequately insured.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS:
Details of loans, guarantees or investments made under section 186 of
the companies Act, 2013 are given in the note to the financial
statements.
CREDIT & GUARANTEE FACILITIES:
The Company has not availed any facilities of Credit and Guarantee.
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.
CORPORATE SOCIAL RESPONSIBILTY POLICY:
Since your Company do not have the net worth of Rs. 500 Crore or more,
or turnover of Rs. 1000 Crore or more, or a net profit of Rs. 5 Crore
or more during the financial year, section 135 of the Companies Act,
2013 relating to Corporate Social Responsibility is not applicable and
hence the Company need not adopt any Corporate Social Responsibility
Policy
RELATED PARTY TRANSACTIONS:
All related party transactions that were entered into during the
financial year were on arm,s length basis and were in the ordinary
course of business. There were no materially significant related party
transactions made by the Company with the promoters, directors, key
managerial personnel or other designated persons which may have a
potential conflict with the interest of the Company at large.
As required under clause 49(V)(D) of the listing agreement, the Company
has formulated a policy for determining 'material, subsidiaries, the
said policy is disclosed at Company,s website at www.palred.com
As required under clause 49(VIII)(A)(2) of the listing agreement, the
Company has disclosed the policy on dealing with related party
transactions at Company,s website at www.palred.com
Your Directors draw attention of the members to Note 32 of the
financial statement which sets out related party disclosures.
DISCLOSURE ABOUT COST AUDIT:
Cost Audit is not applicable to your Company
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, the ratio
of remuneration paid to Managing Director and maiden employees is 1:18.
LISTING WITH STOCK EXCHANGES:
The Company is listed with BSE Limited and National Stock Exchange
India Limited (NSE) and confirms that it has paid the Annual Listing
Fees where the Company,s Shares are listed.
INDUSTRY BASED DISCLOSURES AS MANDATED BY THE RESPECTIVE LAWS GOVERNING
THE COMPANY
The Company is not a NBFC, Housing Companies etc., and hence Industry
based disclosures is not required.
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
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.
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
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, NSE, NSDL, CDSL, ICICI
Bank, Kotak Mahindra Bank and State Bank of India etc. for their
continued support for the growth of the Company.
For and on behalf of the Board
Palred Technologies Limited
Place: Hyderabad Palem Srikanth Reddy
Date: 31.08.2015 Managing Director
(DIN: 00025889)
Mar 31, 2014
Dear Members,
The Directors are pleased to place before the shareholders the
Fifteenth Annual Report of Paired Technologies Limited (formerly Four
Soft Limited) (herein after referred to as ''Palred'' or ''the Company'')
together with the audited financial statements for the year ended
March, 31, 2014.
1. Standalone Financial Results
(Rs. In millions except per share data)
For the year ended 31st March
Particulars 2014 2013
Total Income 221.19 341.68
Total expenditure 207.27 342.12
Operating profit/(Loss)(EBITDA) 13.92 (0.44)
Interest 0.43 0.49
Depreciation and amortization 5.63 11.50
Profit before Tax 7.86 (12.43)
Tax Expense 337.73 -
Profit/(Loss) After tax and before
exceptional items (329.87) (12.43)
Exceptional Items 1601.48 -
Profit/(Loss) after tax and
Exceptional Items 1271.61 (12.43)
Basic and diluted Earnings
per share (in Rs.) 32.57 (0.32)
2. Business Performance
During the year under review, the total income of the Company is Rs.
221.19 million as compared to Rs. 341.68 Million of the previous year.
The operating profit stood at Rs. 13.92 Million as compared to a loss
of Rs. 0.44 Million in the previous year 2012-13. The profit after tax
of the Company stood at Rs. 1271.61 Million during the year under
review compared to a loss of 12.43 million during the previous year.
Your Company is into providing IT solutions and IT services for Media
and Entertainment and Online e-commerce portals after the sale of IT
business and investments in the foreign subsidiaries. Your Company
conducting its operations in online sale of Laptops, computers, Mobile
accessories and computer peripherals through its website
www.latestone.com.
3. Declaration of Interim Dividend
The Company has declared an interim dividend of Rs.29/- per share
during the year under review. The interim dividend has been paid out of
the profits on slump sale of the IT business and investments in the
foreign subsidiaries. In view of the requirement of funds for the
expansion of business after the sale of IT business and investments in
the foreign subsidiaries, the directors do not recommend dividend for
the financial year 2013-14.
4. Transfer to reserves
The Company proposes the entire amount of profit after tax for an
amount of Rs. 1271.61 Million to be retained in profit and loss
account.
5. Fixed Deposits
Your Company has not accepted any fixed deposits and, as such, no
principal or interest was outstanding as of the balance sheet date.
6. Issue of equity shares under Employee Stock Option Scheme
During the year under review, your Company has allotted 77,226 shares
under the Employee Stock Option scheme to the eligible employees. The
Board of Directors had approved allotment of 65,228 shares under ESOP
Scheme- 2009 on their Board Meeting held on 30th May, 2013 and 11,938
shares on their Board Meeting held on 10th August, 2013. The Company''s
paid-up capital is Rs.195, 184,850/- consisting of 39, 036, 970 equity
shares of Rs. 5/- each as on 31st March, 2014. There has been no change
in the Authorized capital of the Company during the year under review.
7. Reservation of 20,00,000 shares to the new management team
The Company has reserved 20, 00,000 shares to the new management team,
under the Employee Stock Option Scheme. The Board of Directors had
given their approval on their meeting held on 13th October, 2013 and
the members had given their approval at their general meeting held on
27th November, 2013.
8. Slump sale of business
During the year under review, your Company had sold the IT business and
Investments in foreign subsidiaries to Transport I.T Solutions Private
Limited, a Kewill Group Company, for a lumpsum consideration of USD
43.4 Million subject to customary price purchase adjustments. The
respective sale of business had been approved by the Board of Directors
at their meeting held on 10th August, 2013 and the shareholders had
given their consent by way of postal ballot on 18th September, 2013.
9. Subsidiaries
As a part of slump sale of business, the entire investments in the
share capital of foreign subsidiaries, Four Soft B.V, Four Soft
Singapore Pte Ltd., and Four Soft USA Inc. including the step down
subsidiaries have been sold off to Kewill Group. During the year under
review, Four Soft Malaysia SDN applied for liquidation. As on 31st
March, 2014 there are no subsidiaries for your Company.
10. Change in the registered office of the Company
During the year under review, the registered office of the Company has
been shifted from 5Q1, A3, Cyber Towers, HITECH City, Madhapur,
Hyderabad- 500081 to Plot No.2, 8-2-703/2/B, Road No.12, Banjara Hills,
Hyderabad- 500034 with effect from 07th October, 2013.
11. Acquisition
During the year under review, your Company has acquired on January 8th
2014, Deals15.com from Premium Web Services which provides internet
services and software services/solutions to business to business
e-commerce and website development for the purpose of business
operations in online e-commerce as it is being emerged as a profitable
area of business and it would be an effective way to initiate the
business post sale of Four Soft Limited.
12. Technology - Solutions offered
Presently your Company, after selling 4S products to Kewill, is
focusing on three different verticals. The first vertical is online
e-commerce solutions. Your Company is focusing on occupying the online
electronics accessories e-commerce niche area in India. Your Company is
doing Dry Run for your online electronics accessories e- commerce site
called LatestOne.com which is powered by Palred Stores. Your Company
also offers solution called Palred Stores for e-commerce industry,
which would like to open their online store and focus on their business
rather than worrying about the technology platform. Your Company is
focusing on implementing processes to improve overall shipment delivery
turn around, quality of service and better automations. The backend
solution has been implemented using Microsoft Dynamics AX 2012 R2. The
LatestOne.com site integrates with CCAvenue payment gateway and many of
the 3PLs (Bluedart, Aramex, Delhivery, DotZot and EMS) for shipment
delivery.
The Second vertical, your Company offers IT-services on high-end
solutions like enterprise application integration, data analytics, big
data and master data management. The third vertical, your company
offers solutions for media and entertainment.
13. Corporate Governance
Your Company has been making every effort to improve governance and
transparency in the conduct of business. Your Company is committed to
good Corporate Governance coupled with good corporate practices. A
detailed report on corporate governance is available as a separate
section in this Annual Report. Certificate by a Practicing Company
Secretary on compliance with the code of Corporate Governance under
Clause 49 of the Listing Agreement is enclosed as an annexure in this
Annual Report.
The Company has well framed policies such as Whistle Blower Policy,
Fraud Detection Policy and Code of Conduct for prevention of Insider
Trading. The Company has internal controls and documented procedures
and continues to ensure compliance with the said policies.
14. Management Discussion and Analysis
A report on the Management Discussion and Analysis for the year under
review is annexed hereto and forms part of the Annual Report.
15. Directors
Appointment:
With effect from 1st September, 2014, Ms. Amala Mudhapuram has been
appointed as Additional Director by the Board of Directors of your
Company.
As per the requirements of Section 149 of the Companies Act, 2013 and
Clause 49 of the Listing Agreement entered with the Stock Exchanges,
the Independent Directors are not liable to retire by rotation and are
to be appointed for a period of Five (5) consecutive years. Hence, Ms.
Amala.M, Mr. E. Srinivas Prasad, Mr. A. Mohan Krishna Reddy and Dr.
T.R. Sivarama Krishnan are being appointed for a period of five (5)
years.
16. Corporate Social Responsibility
At Palred we strongly believe in improving the quality of life of the
communities we serve. To achieve this objective, the Palred
Technologies CSR team has been actively working on improving the
welfare of the socially and economically disadvantaged communities,
especially those that exist in and around its areas of primary
operation.
Your Company CSR policy encompasses initiatives to encourage
sustainable socio-economic development of the community and to improve
the quality of life of the people living in the areas in which it
operates. In line with the values of all its stakeholders and most
importantly, based on a genuine concern for people and the community,
we at Palred donated an amount of Rs. 5 Lakhs to Bhupati Raju Sita Devi
Charitable Trust, for the education of the children of the trust.
17. Statutory Auditors
The retiring Statutory Auditors of the Company, M/s Walker Chandiok &
Co. LLP, Chartered Accountants (Firm Registration No. 001076N) hold
office as Statutory Auditors till the conclusion of Fifteenth Annual
General Meeting and they have confirmed their eligibility and
willingness to accept office and be re-appointed as the Statutory
Auditors to hold office until the conclusion of sixteenth Annual
General Meeting.
The Audit Committee and the Board of Directors recommend the
re-appointment of M/s Walker Chandiok & Co. LLP, Chartered Accountants,
as the Statutory Auditors to hold office until the conclusion of
sixteenth Annual General Meeting.
The Company has received a certificate from M/s Walker Chandiok & Co.,
LLP to the effect that their re-appointment, if made, would be in
accordance with the limits as specified under Section 139 of the
Companies Act, 2013 and that they meet the criteria of independence.
The proposal of their re-appointment is included in the notice of the
ensuing Annual General Meeting.
A report of Auditors on the financials of the Company is appended to
this annual report. There are no qualifications in the report.
18. Particulars of Employees
As required under the provisions of Section 217 (2A) of the Companies
Act, 1956 read with Companies (Particulars of Employees) Rules, 1975 as
amended thereon, no employees other than Managing Director are drawing
more than rupees sixty lakhs per financial year or rupees Five Lakh per
month, as the case may be for the year 2013-14. The particulars are
mentioned in annexure II to the Directors'' Report.
19. Disclosures as per Listing Agreement Clause 32
The cash flow statement under indirect method is in accordance with the
Accounting Standard on cash flow statement (AS-3) as notified by the
Companies (Accounting Standards) Rules, 2006, as amended is appended to
this Annual Report.
20. Directors'' Responsibility Statement
Your Company''s Directors make the following statement in terms of
Section 217 (2AA) of the Companies Act, 1956 which is to the best of
their knowledge and belief and according to the information and
explanations obtained by them:
I. The financial statements have been prepared in conformity with the
applicable Accounting Standards issued by the Institute of Chartered
Accountants of India and requirements of the Companies Act, 1956. There
are no material departures in the adoption of applicable Accounting
Standards.
II. The Directors 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 Company at the end
of the financial year ended 31st March, 2014 and of the profit and loss
of the Company for the year.
III. We have taken proper and sufficient care for the maintenance of
adequate accounting records in accordance with the provisions of
Companies Act, 1956 for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities.
IV. We have prepared the annual accounts for the financial year ended
31st March, 2014 on a going concern basis.
The Board of Directors and the management of your Company accepts
responsibility for the integrity and objectivity of these financial
statements. The estimates and judgments relating to the financial
statements have been made on a prudent and reasonable basis, in order
to that the financial statements reflect in a true and fair manner; the
form and substance of transactions, and reasonably present the
Company''s state of affairs and profit for the year.
The financial statements have been audited by Walker Chandiok & Co.,
LLP Chartered Accountants, the Statutory Auditors.
The Audit Committee of the Company meets periodically with the
Statutory Auditors to review the manner in which the auditors are
discharging their responsibilities, and to discuss auditing, internal
control and financial reporting issues. To ensure complete
independence, Statutory Auditors have full and free access to the
members of the Audit Committee to discuss any manner of substance.
21. Acknowledgement
Your Directors wish to express their gratitude to the Central and State
Governments, investors, Securities and Exchange Board of India, the
stock exchanges, analysts, financial institutions, banks, associates,
and customers for their support. Your directors commend all the
employees of your company for their continued dedication, significant
contributions, hard work and commitment.
Place: Hyderabad For and on behalf of the Board of Directors
Date: 01.09.2014 Sd/-
Palem Srikanth Reddy
Chairman & Managing Director
(DIN-00025889)
Mar 31, 2013
To the Members,
The Directors present to you the Fourteenth Annual Report of Four Soft
Limited (hereinafter referred to as ''Four Soft'' or ''the Company'')
together with the audited financial statements for the year ended on
March 31, 2013.
1. Financial results
(Rs.in million except per share data)
For the year ended 31 March
Particulars Consolidated Standalone
2013 2012 2013 2012
Total income 1339.42 1272.14 341.68 308.61
Total expenditure 1111.93 1115.38 342.12 373.90
Operating profit /
(loss) (EBITDA) 227.49 156.76 (0.44) (65.29)
Interest 20.58 23.82 0.49 0.30
Depreciation 18.44 18.63 11.50 11.76
Profit / (Loss) before tax 188.47 114.31 (12.43) (77.35)
Current tax 30.17 52.71
Deferred tax expense /
(benefit) 14.90 (12.02) 23.61
Profit after tax before
exceptional items 143.40 73.62 (12.43) (100.96)
Exceptional items (28.15) 68.00
Profit after tax and
exceptional items 115.25 73.62 (12.43) (32.96)
Impairment of goodwill
resulting on consolidation (500.00)
Reported net profits /
(loss) after tax 115.25 (426.38) (12.43) (32.96)
Basic and diluted
earnings per share
(in Rs) 2.97 and 2.96 (11.00) (0.32) (0.85)
2. Changes to share capital
During the year under review, there has been no change in the Company''s
capital structure and the Authorized Share Capital of the Company
stands at Rs. 350 million.
3. Dividend
In view of requirement of funds for various business expansion
activities in future, the directors do not recommend dividend for the
financial year 2012-13.
4. Reserves
There has been no transfer of funds to reserves during financial year
2012-13.
5. Business performance
Total income in financial year ended March 31, 2013, on a consolidated
basis, is Rs.1,339.42 million (2012: Rs. 1,272.14 million) and on a
standalone basis is Rs.341.68 million (2012: Rs.308.61 million).
Your Company made an operating profit of Rs.227.49 million (2012:
Rs.156.76 million) on a consolidated basis. The operating loss on a
standalone basis stands at Rs.0.44 million (2012: Loss of Rs.65.29
million). The profit for the year is Rs.115.25 million (2012: excluding
impairment of goodwill, Rs.73.63 million) on a consolidated basis. The
loss for the financial year ended 31 March 2013 on standalone basis is
Rs.12.43 million (2012: Rs.32.96 million).
Your Company has grown by 5.3 % during the year on a consolidated
basis. During the year under review your Company increased its
client-base globally, built up a robust pipeline and progressed further
on large implementations. Your Company''s vision is to become the
Industry leader in transportation and logistics vertical and make
significant headway in the supply chain/shippers market. By leveraging
technology excellence, domain spread and expertise, your Company
continues to mine existing customers who contribute to more than 90% of
revenues. On a consolidated basis the Company has added assets worth
Rs. 8.44 million (2012: Rs. 8.76 million) primarily consisting of
computer hardware and furniture & fittings.
Your Company continues to focus on research and development and has
incurred Rs.54.10 million (2012: Rs.76.58 million) during the year.
Your Company is operating in the markets such as Europe and the United
States which are currently facing economic uncertainties and tough
competition. However, your Company''s strong value creating product
lines and sales efforts have resulted in closure of 9 contracts during
the year in the European, American and Indian market. We see a definite
trend in which our target market is shifting towards. Customers are
increasingly leaning towards low capital expenditure model of Software
as a Service (SaaS). Among the 9 contracts signed during the year, we
have signed 2 SaaS contracts in American market.
Our visibility products 4S Visilog® and 4S Visilog Plus® continue to
find increased reception among our potential customers. Our pipeline
also includes significant number of prospects at different stages of
contract finalization.
In addition to our direct sales and inside sales efforts which have
resulted in execution of new contracts, we also have increased our
order book by account mining of existing customers under implementation
in line with the strategy in the previous year
6. Liquidity
Your Company continues to generate cash from operations and has been
able to manage its working capital requirements. Your Company has cash
equivalents of Rs.214.86 million as at March 31, 2013 (2012: Rs.184.25
million) on a consolidated basis, of which Rs.11.46 million (2012:
Rs.17.5 million) were invested in short term liquid instruments.
7. Subsidiaries
Four Soft Ltd has three direct subsidiaries; Four Soft B.V, The
Netherlands, Four Soft Singapore Pte Ltd, Four Soft Malaysia Sdn Bhd,
and the following six step-down subsidiaries Four Soft Netherlands B.V,
Four Soft Nordic A/s, Four Soft UK Ltd, Four Soft USA Inc., Four Soft
Japan KK and Four Soft Australia Pty Ltd. All subsidiaries are wholly
owned by your Company.
During the year, your Company has neither made any acquisitions nor has
setup any subsidiaries. There has been no material change in the nature
of the subsidiaries listed aforesaid. A statement with brief financial
data of each subsidiary is part of this annual report.
A consolidated financial statement of the Company and its wholly owned
subsidiaries is attached as required by the Listing Agreement. The
consolidated financial statements have been prepared in accordance with
Accounting Standard 21 - "Consolidated Financial Statements" as
notified by the Companies (Accounting Standards) Rules, 2006, as
amended.
The Ministry of Corporate Affairs has granted general exemption under
section 212(8) of the Companies Act, 1956 exempting companies from
attaching copies of the Balance Sheet, Statement of Profit and Loss,
Reports of the Board of Directors and Auditors of Subsidiaries as
specified under Section 212 (1) of the Companies Act, 1956 subject to
publication of certain summarized financial information of the
subsidiaries in the Annual Report. Accordingly these documents related
to subsidiaries are not attached to the Balance Sheet and the
summarized financial information related to subsidiaries is included in
the Annual Report. Full Annual Report including financial information
of the subsidiaries will be available upon request by any member
interested in obtaining the same. All the documents related to
subsidiaries are kept in the head office of the Company for inspection
by any interested shareholder.
8. Solutions offered
Presently, your Company offers solutions for freight forwarding
industry, 3PLs and service providers, customs brokerage, contract and
warehousing logistics, and for liners, non-vessel operating common
carriers (NVOCCs) and agencies. Products in freight forwarding industry
include 4S eTrans®, 4S Visilog® and 4S eTrans SME® and that for
contract and 3PL warehousing providers include 4S eLog®. In addition,
4S iShipping targets the liners market, 4S eCustoms® targets the
customs brokers & shippers and 4S Visilog Plus® which represents the
Four Soft shipper logistics industry targets the shippers and
manufacturers for their logistic needs. Your Company also offers IT-
services including consulting, software development and system
integration and implementation in the domain of logistics related I T.
9. Human resources
To remain competitive in the IT industry and achieve its business
objectives, your Company understands the need of constantly attracting,
grooming and retaining the best talent in the industry for its
strategic success.
The Company has focused on transformation through qualitative
recruitments across all levels and functions (Project Managers,
Technical Designers, QA lead, to name a few). We have focused on
premier institutes (IIT Hyderabad, BITS Hyderabad, and NIT to name a
few) to hire bright candidates into the organization who have the
potential to become the future leaders with their high drive to excel.
A concentrated effort in recruitment was taken to make the staff more
culturally diverse and further improve workplace demographics by
recruiting people from different cities and IT hubs in India.
Talent development and continuous learning have been the focus area
during the year. More hours (600 hrs.) of training have been conducted
spreading over technical, functional and behavioral growth of the
resources. Constant improvements in behavioral skills and updations
with advanced technologies have been the core areas for learning
opportunities.
To have better control, improved process efficiency and quality,
payroll administration and statutory compliances and filings were
bought in-house. This has also resulted in a much lower operational
cost than what was spent annually for outsourcing it. All these
activities are managed and maintained by Company personnel.
Your Company follows performance with engagement methodology where each
resource is entitled for having fun at work. Engagement activities
with an objective of enhanced communication, cohesiveness and
collaboration within the teams have been conducted at regular
intervals. These activities have also acted as mode of de-stressing the
resources who are sometimes hard pressed due to important project
deliverables. Corporate wellness programs inclusive of health check-ups
by related specialists paved their way into your Company''s motto for
better, fitter and engaged resources.
Your Company has successfully ranked 18th in top 20 IT companies across
India with employee headcount less than 2000 in the DQ-CMR Best
Employer Survey 2012. It has successfully marked its entry in To p 20
in most of the major categories viz. ''Preferred Employer'' (18th),
''Managing Slowdown'' (17th), ''Company Image'' (18th) and ''HR Ranking''
(13th). It was also conferred with "Best HR Strategic Plan Award" at
India Human Capital Summit 2012. This award was given for having best
HR strategies in line and supporting the business to achieve its
vision.
With various new initiatives planned in the year ahead, your Company
aspires to retain or improve its image as an employer of choice and
keep attracting and retaining the best talent in the industry for
sustained high performance and growth.
10. Processes
Your Company''s quality system is built on three pillars: ISO 9000, CMMI
and Lean Management. We have built our process definitions, standards,
tools and documents so that the system is in conformance with all the
three frameworks. We not only undertake extensive customer satisfaction
surveys but also conduct internal audits to maintain and verify high
levels of compliance. We are currently CMMI Level 5 Company. This
continuous improvement model of CMMI is one of the most prestigious
certifications and is a testimony of the organizational focus on
process improvements. We initiated Lean Management in the year 2009 and
we are reaping benefits of the same in all identified value streams.
Measures that validate the success of this program are reduced amounts
of rework in the Company, faster implementation cycle for standard
implementations and increased automation levels in various functions.
Lean is implemented in projects and functions focusing on reducing non
value activities and increasing value to customer. Process and
templates are reviewed applying lean principles and non-value process
steps are removed. This has simplified process implementation for
practitioners.
11. Corporate governance
As a good governance initiative, your Company continues to improvise on
complying and providing additional disclosures apart from complying
with the recommended SEBI guidelines on Corporate Governance. A report
on corporate governance along with the certificate from a Company
Secretary-in-Practice confirming compliance of conditions of corporate
governance as stipulated under Clause 49 of the Listing Agreements with
the stock exchanges form part of the Annual Report.
The Company has well framed policies such as the Whistleblower Policy,
Fraud Detection Policy and the Code of Conduct for senior officers and
executives in the Company. The Company has internal controls and
documented procedures and continues to ensure compliance with the said
policies.
12. Corporate social responsibility
At Four Soft we strongly believe in improving the quality of life of
the communities we serve. To achieve this objective, the communities,
especially those that exist in and around its areas of primary
operation.
Your Company CSR policy encompasses initiatives to conserve, sustain
and renew the environment, to encourage sustainable socio-economic
development of the community and to improve the quality of life of the
people living in the areas in which it operates. The greatest strength
of the Company''s CSR activity is that it is looked upon as a business
process, like any other, not post-profit philanthropy. In line with the
values of all its stakeholders and most importantly, based on a genuine
concern for people and the community, we at Four Soft implemented
various CSR activities during the year including the following:
- Donations to Kinnera Welfare Society (Old Age Home) - to mark the
occasion of Gandhi Jayanti (02 October 2012), we have distributed
woolen clothes, blankets, grocery and other consumables to the
residents of the old age home.
- Tribes India (2nd November 2012) - With a noble cause and positive
support to tribal craftsmanship in India, a kiosk facility was extended
by Tribes India in your Company.
- Blood Donation camp (1st March 2013) - Over 25ltrs of blood for the
NTR Memorial Trust blood bank was contributed by your Company staff.
The blood bank provides blood free of cost to the poor and collects
nominal fee from others.
Consistent with Four Soft''s approach to social responsibility towards
nature, the Company continues its march towards "Going Green." Our
green policy is consistent with your Company''s commitment to good
corporate citizenship and best management practices. We have continued
the following initiatives as part of our campaign:
- Go Green Campaign: Dry waste collection by "Aashayein" on 23rd July
2012 as part of Environment - Employment - Education (EEE) campaign.
This initiative leads to pollution free environment; provide employment
opportunities to under privileged people through Aashayein by way of
recruiting them for collecting dry waste from various corporates.
Aashayein manufactures and sometimes provides dry waste to relevant
small scale business units for recycling to make usable items like
paper bags etc.
- Carpooling: As a more environmental friendly and sustainable way to
travel, reducing carbon emissions and traffic congestion on the roads;
carpooling by employees in your Company has been actively promoted.
Your Company recognizes the importance of quality life, in the growth
and development of individuals, country and the world. As such, it
always works towards the betterment of the society by conducting
various projects and events aligned with its goals.
13. Directors
As per Article 88 of the Articles of Association, Mr. Mohan Krishna
Reddy, Director is retiring by rotation at this meeting and being
eligible, offers himself for re-appointment.
Pursuant to the provisions of Clause 49 of the Listing Agreement, brief
profile of the above director is provided in the notice to the Annual
General Meeting.
The Board of directors of your Company recommends his re-appointment.
14. Auditors
M/s. Walker, Chandiok & Co, Chartered Accountants hold office until the
conclusion of the forthcoming Annual General Meeting and have confirmed
their eligibility and willingness to accept the office of the Auditors,
if reappointed.
The Board of Directors recommends the appointment of M/s. Walker,
Chandiok & Co, as the Statutory Auditors of the Company for the year
2013-14.
A Report of the Auditors on the financials of the Company is appended
to this Annual Report. There are no qualifications in the Report.
15. Disclosures as per Listing Agreement
Clause 32:
The cash flow statement under indirect method is in accordance with the
Accounting Standard on cash flow statement (AS- 3) as notified by the
Companies (Accounting Standards) Rules, 2006, as amended is appended to
his Annual Report.
Director''s responsibility statement as required under Section 217 (2AA)
of the Companies Act, 1956 Your directors confirm that -
- In the preparation of the annual accounts, the applicable accounting
standards have been followed along with proper explanation relating to
material departures.
- the directors have 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 or loss
of the Company for that period.
- The directors 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.
- The directors have prepared the annual accounts on a going concern
basis. The financial statements have been audited by M/ s. Walker,
Chandiok & Co, Chartered Accountants - the statutory auditors.
16. Four Soft Limited Employee Welfare Trust
The Company has established Four Soft Limited Employees Welfare Trust
("the Trust") to administer the ESOP Scheme and as at March 31, 2013
had issued 1,170,200 equity shares of Rs.5 each, including 217,200
equity shares issued pursuant to issue of bonus shares in 2003.
Pursuant to the ESOP Scheme 2003 the trust has granted equity shares at
an exercise price of Rs. 5 each to the eligible employees, which are
subject to progressive vesting (1 year after date of issue of options)
over a period of three years from the date of grant. As of March 31,
2013 the total shares held by the Trust is 143,987 (2012: 243,987).
Mode of settlement of these stock options is equity.
Details of the equity shares issued under ESOP and the disclosures in
compliance with clause 12 of the SEBI (Employees Stock Options Scheme
and Employees Stock Purchase Scheme) Guidelines, 1999 are set out in
the annexure to this report.
17. Fixed deposits
Your Company has not accepted any fixed deposits and, as such, no
amount of principal or interest was outstanding as of the balance sheet
date.
18. Personnel
Particulars of employees as required under the provisions of Section
217 (2A) of the Companies Act, 1956 read with the Companies
(Particulars of Employees) Rules, 1975, as amended:
There are no such employees who were in receipt of remuneration, which
in aggregate, was not less than Rs .60 Lacs for the year 2012-13.
Conservation of energy, research and development, technology
absorption, foreign earnings and outgo:
The particulars as prescribed under sub-section (1)(e) of Section 217
of the Companies Act 1956 read with the Companies (Disclosure of
particulars in the report of the Board of Directors) Rules, 1988, are
set out in the annexure included in this report.
19. Acknowledgments
Your directors take this opportunity to convey their appreciation for
the support and co-operation received during the year under review,
from all the government authorities, shareholders, other stakeholders,
clients, vendors, partners, bankers and other business associates. Your
directors'' wish to place on record their deep sense of appreciation for
the dedicated and sincere services rendered by the employees at all
levels.
By order of the Board of Directors
Sd/-
M. Raghuram
Hyderabad, August 10, 2013 Company Secretary
Mar 31, 2010
The Directors have pleasure in presenting to you the Eleventh Annual
Report together with the Audited Statement of Accounts for the year
ended 31st March 2010.
1. Standalone Financial Results :
Rs. in Million, except per share
Particulars 2009-10 2008-09 Growth%
Total Income 331.52 390.96 -15%
Total Operating Expenditure 282.13 331.21 -15%
Operating Profit (EBITDA) 49.39 59.75 -17%
Interest 15.81 16.94 -7%
Depreciation 14.70 22.42 -34%
Profit Before Tax 18.88 20.39 -7%
Provision for Tax 5.71 2.29 149%
Deferred Tax 1.63 (3.28) -150%
Fringe Benefit Tax - 1.72 -100%
Profit after tax 11.54 19.66 -41%
Basic Earnings per share 0.30 0.51 -41%
Consolidated Financial Results :
Rs. in Million, except per share
Particulars 2009-10 2008-09 Growth%
Total Income 1381.22 2094.38 -34%
Total Operating Expenditure 1247.16 1380.61 -10%
Operating Profit (EBITDA) 134.06 713.77 -81%
Interest 24.71 39.57 -38%
Depreciation 23.86 42.12 -43%
Impairment Loss - 36.40 -100%
Profit Before Tax 85.49 595.68 -86%
Provision for Tax 18.87 144.22 -87%
Deferred Tax 4.83 2.50 93%
Fringe Benefit Tax - 1.72 -100%
Profit after tax 76.65 447.24 -83%
Basic Earnings per share 1.99 11.62 -83%
2. Changes to Share Capital
During the year under review, there has been no change in the Companys
capital structure and the Authorized Share Capital of the Company
stands at Rs.350 Million.
3. Dividend
The Company has paid in interim dividend of 0.5 per equity share in
respect of financial year 2009-10 amounting to Rs.1.14 crores including
dividend tax.
4. Transfer to Reserves
The Company proposes the entire amount of Profit after tax of Rs. 11.54
Million to be retained in the profit and loss account.
BUSINESS PERFORMANCE
Result of Operations
During the year under review, the global economic slowdown had impact
on the Companys revenues as customers have deferred the decision to
make investments in IT systems. However this provides opportunity for
your Company in the year 2010-11 as the customers are likely to release
the IT budgets withheld last year as the economy is showing sign of
improvement. The global logistics industry, market dynamics and the
environment in which our business operates has started improving
significantly towards the end of year and is likely to benefit us in
the next financial year. In current financial year all our flagship
products such as 4S eTrans, 4S eLog, 4S Visilog, 4S Visilog Plus and 4S
iShipping have been implemented successfully across numerous customers
in multiple global locations. With the global economy showing signs of
coming out of the recessionary phase, we believe this is the right time
to strengthen our sales and marketing engine and take up an aggressive
product and services roll out. Accordingly the Company has made
significant investment by appointing global sales team in last quarter
of the year and will continue investing significantly in products.
Revenues
Total income in financial year 2009-10 is Rs. 331.52 Million (Previous
year Rs.390.96 Million) and Rs. 1381.21- Million as per the
Consolidated Accounts (previous Year Rs 2094.38 Million).
Operating Profit (EBITDA) is at Rs. 49.39 Million (previous year Rs.
59.75 Million) and Rs.134.06 Million as per Consolidated Accounts
(previous year Rs. 713.77 Million). Profit after tax is Rs. 11.54
Million or 3.48% of total income (Previous Year Rs. 19.66 Million or
6.02% of total income) and Rs. 76.65 Million or 5.55% as per the
Consolidated Accounts (Previous Year Rs. 447.24 Million or 21.09% of
total income)
During the year under review your Company increased its client- base
across the globe. Your Company continues to grow towards becoming the
Industry leader in this domain, leveraging the excellence in
technology, domain and processes and continue to get more than 80% of
revenues from existing customers. The Company has incurred capital
expenditure of Rs. 0.87 Million for infrastructure and facilities. The
Company has incurred Rs. 80.59 Million on R&D expenses for the year
2009-10 as against Rs 59.61 Million during the year 2008-09.
We were also able to close many deals in India during this year and
India is now emerging as a potential market which will be untapped for
your Company in the years to come. To capitalize on the opportunities
that are opening up in the domestic market, we are investing in new
marketing initiatives, strengthening IT capability and expanding our
research division.
Liquidity
Your Company continues to generate cash from operations and has been
able to manage working capital requirements and had cash equivalents of
Rs. 21.02 Million as on March31,2010.
SUBSIDIARIES:
We have four subsidiaries; Four Soft B.V., Netherlands, Four Soft
Singapore Pte Ltd. Four Soft Malaysia Sdn Bhd, Four Soft Nordic A/S,
Denmark and six step-down subsidiaries Four Soft Netherlands B.V., Four
Soft UK Ltd. Four Soft USA Inc., Four Soft Japan KK, Four Soft (HK)
Ltd. and Four Soft Australia Pty Ltd.
The summary of the key financials of all the four subsidiaries is
mentioned below:
Four Soft B.V Netherlands
During the year 2009-10, Four Soft B.V. has made a consolidated net
loss after tax of à 0.48 Million (2008-09 profit of à 5.94 Million) on
revenue of à 12.78 Million (2008-09 à 22.21 Million).
Four Soft Nordic A/S.
In January 2007, the Company acquired Transaxiom Holding A/S and after
the name of the Company was changed to Four Soft Holding A/S. Four Soft
Holding A/S merged with Four Soft Nordic A/S on the date of
acquisition. Four Soft Nordic A/S generated revenues of DKK 43,56
Million, with a net profit of DKK 6.41 Million.
Four Soft Singapore Pte Ltd
In May 2005 the Company acquired Comex Frontier Pte Ltd. (renamed as
Four Soft Singapore Pte Ltd). The Company generated revenues of SG$
0.93 Million, with gross profit of SG$ 0.35 Million and a net loss of
SG$ 0.02 Million.
Our business in Far East has remained at the same level, primarily due
to the macro-economic developments. However we anticipate good traction
in emerging markets such as Japan and China in the coming years. We
have initiated entering into these markets by direct and channel
partner models.
Acquisition of Comex Frontier and further developments in far east has
let to our entry in the Japanese Market which has huge potential to
grow in the future.
Four Soft Malaysia Sdn Bhd
In May 2005, the Company acquired MY Comex Sdn. Bhd. (renamed as Four
Soft Malaysia Sdn Bhd). The Company generated revenues of RM 0.11
Million, with a net profit of RM 0.03 Million.
INDUSTRY SOLUTIONS
Presently, your Company offers solutions in the areas of Freight
forwarding industry, 3PLs and Service providers, Customs brokerage,
Contract & Warehousing Logistics, and for Liners, NVOCCS & Agencies.
Products in Freight forwarding industry include 4S eTrans, 4S Visilog
iLogistics, Shipper Logistics, and 4S eTrans SME and that for Contract
and 3PL warehousing providers include 4S eLog. In addition, 4s
iShipping targets the Liners market, 4S eCustoms targets the customs
brokers & shippers and 4S Visilog Plus which represents the 4S Shipper
Logistics targets the shippers and manufacturers for their logistics.
Your Company also offers IT- Services including Consulting, Software
Development and System Integration & Implementation in the domain of
Logistics related I T.
Your Company had re-branded the product 4S ePOMS to 4S Visilog as a
more suitable name for the functionality it provides, namely order
management and track and trace, and it being the visibility layer in
our product range. Similarly 4S Visilog has been renamed as 4S Visilog
Plus as a more appropriate name for its wide encompassing feature set
of visibility, order management, freight management, warehouse
management etc.
HUMAN RESOURCES
Last year due to global recession, the Company confronted a challenging
competitive landscape and industry conditions. In response to the
corporate strategic goal of being an internationally leading enterprise
and the need for developing the business further, the Company focused
on developing a competitive edge in human resources (HR) in support of
its business operation. By enhancing its system for employee
utilization and optimizing its HR structure, the Company improved its
organizational capabilities. The Company consistently innovated its HR
management system and process and promoted the application of
differentiation and diversified management. All these efforts provided
stronger organizational and HR support for the strategic goal of being
a worldwide leader in logistics and supply chain management solutions.
The Company has further pursued its HR enhancement work and laid down
the theoretical system and basic framework for its competence model
building. The fundamental employee management system was consolidated
so as to lower employment risks. In light of the current development
stage and the direction for future development, the Company
strengthened its performance management and brought the motivational
and binding effect of the remuneration strategy into full play. The
Company earnestly promoted the establishment of its core talent team
and continuously optimized the dynamic of talent management system and
built up the competitive advantage in key talents. The recruitment
management system was fully optimized to maintain the enhancement of
the efficiency of talent selection and hiring. The qualities of
corporate HR were comprehensively improved by effectively advancing the
development of training system, perfecting the internal & external
trainer management system, promoting the implementation of the training
curriculum, and furthering the popularization of on-the-job learning.
Some of the Key initiatives launched last year and will continue in the
Company can be categorized as follows:
Talent Management Program (TMP)
TMP is a skill-based development guide or "road map" designed at
identifying, developing and retaining all top-performers identified
through the formal performance evaluations. This program aims at career
management of these employees into positions of higher responsibility
and authority by developing their leadership skills, knowledge and
abilities which is not only required in their current work but also in
their planned future work. Initially all employees categorized as
A-level (top performers) will be part of the TMP and it will be an
on-going program in the future.
Participants in TMP will complete a self-assessment to confirm their
leadership strengths. Following a conversation with their supervisor
and the TMP committee that centers on development needs and interests,
the participant will prepare a plan tying their career goals with the
priorities of their department. In TMP all employees will be challenged
to take responsibility for their development and in return are provided
with the support to continually learn.
The Intern/Trainee and Placement Programs
Many existing programs that have been attracting new, young and diverse
employee populations into the Company were reviewed, revised, and in
some cases expanded. These programs have succeeded in attracting
exceptionally talented individuals while providing them with the
intense orientation and work experience that makes them productive
contributors from the beginning of their employment. These programs are
primarily of 2 types:
a) Management Internship (MI) Program - resources, with or without
prior work experience, are hired on temporary basis and after
performance evaluation are converted into permanent employees, and
b) Management Trainee (MT) Program - for resources with no prior work
experience having good academic records and typically hired directly
from campuses.
Corporate Human Resource Action Plan
A plan was developed for modernizing human resource management practice
through the use of eStart (Strategic Talent Administration, Recruitment
and Training) an in-house developed HR Information System software
aimed at streamlining the HR policies, process and practices in all
regions in which the Company operates its businesses. The plan has
three major goals - 1) improved governance with respect to the delivery
of HR management, 2) transactional reform, and 3) shared services.
Each goal has a set of specific outcomes to be completed. Collectively
these goals mean that, once achieved, there will be an even more
effective HR coordination to ensure greater efficiency and consistency
in administering and monitoring all HR related policies and practices.
PROCESSES
Your Companys quality system is built on three pillars: ISO 9000, CMMI
and Lean Management. We have built our process definitions, standards,
tools and documents so that the system is in conformance with all these
three frameworks. We not only undertake extensive customer satisfaction
surveys but also conduct internal audits to maintain and verify high
levels of compliance.
CMMi LEVEL 5 CERTIFICATION
Having achieved CMMi level 3 certification last year, we had targeted
level 5 certification during 2010 - 11. We have refined our size-based
estimation models and put in place process performance models that give
the level of certainty to the project managers. They indicate critical
sub-phases that managers can analyze and take preventive action so that
software delivery is in time and with the expected quality. Through
internal assessments and external spot checks, we have demonstrated
that projects are operating at higher levels of maturity in their
implementations. Thus we are going well on our way to achieve CMMi
level certification.
LEAN MANAGEMENT
As you know, we had initiated lean management last year; we are seeing
benefits of the same in all identified value streams. Measures that
validate the success of this program are reducing amounts of rework in
the Company, faster implementation cycle for standard implementations
and increasing automation levels in various functions.
CORPORATE GOVERNANCE
As good governance initiative, Four Soft continues to improvise on
complying and provide additional disclosures apart from complying with
recommended SEBI guidelines on Corporate Governance. A Report on
Corporate Governance along with the Certificate of the Practising
Company Secretary confirming compliance of conditions of Corporate
Governance as stipulated under Clause 49 of the Listing Agreements with
the stock exchanges form part of the Annual Report.
The Company has well framed policies like The Whistle Blower Policy,
Fraud Detection Policy and the Code of Conduct for Senior Officers and
Executives in the Company. The Company has internal controls and
documented procedures and continues to ensure compliance with the said
recommendations.
CORPORATE SOCIAL RESPONSIBILITY
As a concerned corporate citizen, Four Soft believes in sharing and
contributing to the overall global development. We at Four Soft do not
just deliver goods but also believe in sharing health and happiness.
Your Company has recognized the underutilized potential of the educated
and skilled people in rural areas by new dimension of promoting IT
Education in rural schools. Your Company has enabled the economically
disadvantaged rural school children to gain access and develop IT
skills from a young age. Your Company has tied up with NGOs for
working towards bridging this gap between Million of educated but
unemployed or under employed youth and shortage of skilled, trained and
talented manpower in most sectors including retail, infrastructure,
IT and Pharma and create a win-win situation for the industry as well
as to people of the country who need appropriate employment. As a part
of this effort, your Company in co- ordination with NGOs has taken up
the project on a massive scale to provide IT education in schools. This
programme will fill the gap to the benefit of the IT Industry as well
as economically disadvantaged rural children.
Flood Relief Operations
October 2, 2009 goes down as the darkest day in the history of Kurnool
city as well as scores of villages along the Tungabhadra and Hundri
rivers. The city witnessed many floods during its 1000-year existence
but the present one left unforgettable deep sorrow.Four Soft and its
employees in India have participated in the disaster relief effort by
way financial support amounting to over Rs.1.5 lacs and also ground
zero support by way of donation of clothes, participating in rescue
operations. With over 450 employees in India and a presence in the
country for over 11 years, Four Soft was deeply saddened by this
tragedy. The contributions to the relief funds marked the solidarity of
the Company and its employees to enable speedy easing of the situation
caused by unprecedented floods.
Going Green
Consistent with Four Soft approach to social responsibility, the
Company is "Going Green." The FS green policy has two primary goals:
(a) to lessen the Companies impact on the environment and (b) to
become a standard-bearer in the logistics industry in promoting
responsible stewardship toward the environment and its natural
resources. Four Soft has built and maintained over the years a firm
culture that prizes excellence not only in the logistics business, but
also in discharging the Companies responsibility to the communities in
which our staff live and work. Our green policy is consistent with the
4S commitment to good corporate citizenship and best management
practices. The initiative will involve programs and policies in the
following areas:
Document Production & Management
The Going Green initiative seeks to (a) decrease our consumption of
paper and (b) increase our usage of paper that contains recycled
content.
Energy Reduction & Conservation
At Four Soft the green committee is dedicated to reduce the energy
footprint in the data center. The policy we adopt for a green data
centre is to keep the hot and cold air separate. The Company also
proposes for consolidating servers and encourage employees to turn off
any equipment that doesnt need to be on when they are not in the
office, and if possible unplug them too.
Recycle and Reuse
The policy includes reduce, reuse, recycle programs including reducing
the volume of disposable materials used at our offices and by offering
each employee a reusable mug for daily beverages; thus discouraging the
use of disposable glass and further the policy also encourages
recycling.
Four Soft Emission Calculators
Four Soft in conjunction with FFIFA members has developed an emission
calculator, which provides detailed data of emissions, which allows
transport and logistics companies to document and report the emission
of co2 and other green house gases directly to the transport customers,
as well as in the preparation of environmental reports.
Vendor & Client Programs
Our Going Green initiative seeks to address the consumer choices we
make across the breadth of our operations, from office supplies and
equipment to commercial real estate. We also seek to participate in our
clients vendor programs, wherever possible.
Office Green Committees
A key component to our Going Green initiative will be the formation of
Green Committees in every office. The Green Committee will be
responsible for promoting, implementing, monitoring, and reporting the
status and progress of our offices Going Green efforts.
Four Soft as a commitment to the Environment and to running an Energy
Efficient business for its associates, customers, community and
stakeholders has been working towards becoming an environment friendly
organization.
DIRECTORS:
Mr. Joergen Winther Nielsen was appointed as Additional Director by the
Board of Directors in its meeting held on 20 January, 2010. As per the
provisions of the Section 260 of the Companies Act, 1956 Mr. Joergen
Winther Nielsen shall hold office up to this Annual General Meeting.
Mr. Joergen Winther Nielsen is eligible for re-appointment as Director
of the Company. The Company has received a Notice along with requisite
fee from member under Section 257 of the Companies Act, 1956 proposing
the candidature of Mr. Joergen Winther Nielsen as Director of the
Company.
As per Article 88 of the Articles of Association Dr. Sivaramakrishnan
and Mr. Srinivas Prasad, Directors are retiring by rotation at this
meeting and being eligible, offer themselves for re-appointment.
Pursuant to the provisions of Clause 49 of the Listing Agreement, brief
profiles of the above directors are provided in the notice to the
Annual General Meeting.
The Board of Directors of your Company recommends their appointment /
re-appointment.
AUDITORS:
M/s. Walker, Chandiok, Chartered Accountants hold office until the
conclusion of the forthcoming Annual General Meeting and have confirmed
their eligibility and willingness to accept the office of the Auditors,
if reappointed.
The Board of Directors recommends the appointment of M/s. Walker,
Chandiok & Co, as the Statutory Auditors of the Company for the year
2010-11.
AUDITORS REPORT:
A Report of the Auditors on the financials of the Company is appended
to this Annual Report.
The observations made by the auditors in the audit report are self
explanatory.
DISCLOSURE AS PER LISTING AGREEEMNT:
Clause 32:
The cash flow statement in accordance with the Accounting Standard on
cash flow statement (AS-3) issued by ICAI is appended to this Annual
Report.
Clause: 43A
Your Companys shares are listed on the Bombay Stock Exchange Limited,
Mumbai (Stock Code: 532521) and National Stock Exchange of India
Limited, Mumbai (Stock Code: FOURSOFT). The Annual Listing Fees for
the year 2010-11 has been paid.
Directors Responsibility Statement as required under Section 217 (2AA)
of the Companies Act, 1956
Your Directors confirm that -
- in the preparation of the annual accounts, the applicable accounting
standards had been followed along with proper explanation relating to
material departures.
- 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 or loss
of the Company for that period.
- the directors had 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.
- the directors had prepared the annual accounts on a going concern
basis.
The financial statements have been audited by Walker Chandiok &
Associates, Chartered Accountants - the statutory auditors.
Employee Welfare Trust
The Company has established Four Soft Limited Employees Welfare Trust
("The Trust") to administer the ESOP Scheme and as at March 31, 2010
had issued 1,170,200 equity shares of Rs.5 each, including 217,200
equity shares issued pursuant to issue of bonus shares in 2003.
Pursuant to the ESOP Scheme the trust has granted equity shares at an
exercise price of Rs. 5 each to the eligible employees, which are
subject to progressive vesting (1 year after date of issue of options)
over a period of three years from the date of grant. As of March 31,
2010 the total shares held by the Trust is 466,318 (previous year
556,856). Mode of settlement of these stock options is equity.
Outstanding at the beginning of the year 345,352
Granted during the year -
Forfeited during the year 56,834
Exercised during the year 117,993
Expired during the year -
Outstanding at the end of the year 2118,512
Exercisable at the end of the year Nil
Employees receiving 5% and more during the year Nil
Diluted EPS, pursuant to issue of shares in
accordance with AS 20 Rs.0.31
FIXED DEPOSITS:
Your Company has not accepted any fixed deposits and, as such, no
amount of principal or interest was outstanding as of the balance sheet
date.
PERSONNEL
Particulars of employees as required under the provisions of Section
217 (2A) of the Companies Act, 1956 read with the Companies
(Particulars of Employees) Rules, 1975, as amended, is attached to this
Report
Conservation of energy, research and development, technology
absorption, foreign earnings and outgo:
The particulars as prescribed under Subsection (1)(e) of Section 217 of
the Companies Act 1956 read with the Companies (Disclosure of
particulars in the report of the Board of Directors) Rules, 1988, are
set out in the annexure included in this report.
ACKNOWLEDGMENTS:
Your Directors take this opportunity to convey their appreciation for
the support and co-operation received during the year under review,
from all the Government Authorities, Shareholders, other Stakeholders,
Clients, Vendors, Partners, Bankers and other Business Associates. Your
Directors wish to place on record their deep sense of appreciation for
the dedicated and sincere services rendered by the Employees at all
levels.
For and on behalf of the Board of Directors
Sd/-
Place : Hyderabad Palem Srikanth Reddy
Date : 19th of August 2010 Chairman & Managing
Director