3i Infotech Ltd Directors Report.
FOR THE FINANCIAL YEAR 2017-18 Dear Shareholders,
Your Directors present the Twenty Fifth Annual Report (the "Report") of the Company along with the Audited Financial Statements for the year ended March 31, 2018.
The Management is pleased to inform the shareholders that your Company has completed 2 years of consecutive good performance after the Debt Restructuring Scheme (DRS) presented to the Lenders during FY 2015-16. Your Company has earned revenue of Rs991.19 crores and EBIDTA of Rs156.14 crores for financial year ended March 31, 2018 on a consolidated basis. During the year, your Company has made prepayment of Rs97.66 crores to its Lenders out of total debt of Rs468.83 crores. With this pre-payment, the Company has now prepaid 15 months of Principal Debt to its Lenders, which represents 20.83% of its Outstanding Debt to Lenders. The Company continues to service its Lenders on a regular basis effective from the date of implementation of DRS i.e. from April 1, 2016. During the year, CRISIL Limited has upgraded the credit rating of the Company from "CRISIL D" to "CRISIL BB/ stable" in respect of the bank loan facilities. Recently, the credit rating has been further upgraded "BBB-/Stable" (Investment Grade as per RBI Circular No. RBI/2017-18/131 dated February 12, 2018 on Resolution of Stressed Assets Revised Framework). With a revival in the Companys health, we wish to reinvent ourselves to offer higher value to our stakeholders and fast pace our growth. While retaining our core values of Innovation, Insight and Integrity, our aim is to serve our customers, above and beyond their expectations. To signal this transformation, our brand identity has undergone a makeover to reflect our invigorated philosophy. On February 2, 2018, your Company has launched new logo pursuant to the re-branding exercise carried out by the Company. Your Companys new brand identity represents its ongoing transition into a company with distinctive portfolio of IT Products and Services that competes in key growth markets. Your Companys new tagline "Limitless Excellence" aims to represent its passion and zeal to go beyond the expected and deliver extraordinary levels of performance using combination of evolved products and services, exceptional customer engagement and deeper industry expertise. Your Company has also introduced its new brand "AltirayTM" for the services portfolio during the year. This new services brand Altiray reflects strengths and commitment to perform above expectations and enabling our clients to soar high above their challenges.
Financial Performance of the Company on Standalone and Consolidated basis:
|Rs in crores|
|Total Revenue (I)||294.72||344.87||1,010.43||1,055.91|
|Total Expenses (II)||381.43||253.78||930.95||953.33|
|Profit / (Loss) before Tax (I-II)||(86.71)||91.09||79.48||102.58|
|Adjustment of tax relating to earlier periods||-||0.32||0.54||2.40|
|Profit / (Loss) for the year||(86.71)||92.26||71.11||94.07|
|OTHER COMPREHENSIVE INCOME|
|A. Other Comprehensive income not to be reclassified to profit and loss in subsequent year:|
|Remeasurement of gains / (losses) on defined benefit plans||(0.82)||4.32||0.50||7.01|
|Income tax effect||-||(1.49)||-||(0.43)|
|B. Other Comprehensive income to be reclassified to profit and loss in subsequent years:||-||-||-||-|
|OTHER COMPREHENSIVE INCOME FOR THE YEAR, NET OF TAX||(0.82)||2.83||0.50||6.58|
|Total Comprehensive income for the year||(87.53)||95.09||71.61||100.65|
|Profit for the year attributable to:|
|Equity holders of the parent||-||-||70.40||94.73|
|Other Comprehensive income for the year attributable to:|
|Equity holders of the parent||-||-||0.50||6.58|
|Total Comprehensive income for the year attributable to:|
|Equity holders of the parent||-||-||70.90||101.31|
|Earnings per equity share for profit attributable to equity shareholders|
Standalone sales and other income for FY 2017-18 stood at Rs294.72 crores as against Rs344.87 crores for FY 2016-17. On a consolidated basis, sales and other income for FY 2017-18 stood at Rs1,010.43 crores as against Rs1,055.91 crores for FY 2016-17. After meeting all expenditures, though the Company made a total comprehensive income of Rs71.61 crores on a consolidated basis, there was a loss of Rs 87.53 crores on a standalone basis.
TRANSFER TO RESERVES
There is no amount proposed to be transferred to general reserve this year.
During the year, the Company has issued 0.10% Cumulative Non-Convertible Redeemable Preference Shares of face value Rs5/- each ("Class B Preference Shares") to the Lenders at par as per the terms of DRS. An amount of Rs9,288,862 was paid as preference dividend to Class B Preference Shareholders on preference shares issued upto March 31, 2018. The payment of the abovementioned dividend was made as part of the contractual obligations of the Company with respect to the issue of these preference shares.
The Company has also paid a dividend of Rs395,343 as preference dividend as per the terms of issue of 0.01% Cumulative Non-Convertible Redeemable Preference Shares of face value Rs5/- each ("Class A Preference Shares") to Class A Preference Shareholders for the period from April 1, 2012 to April 30, 2018.
As per the terms of the Master Restructuring Agreement (MRA) dated March 30, 2012 entered into by the Company with IDBI Bank Limited, the Monitoring Institution and the CDR Lenders, the Company is prohibited from declaring or paying any dividend on its equity shares without prior approval of its Lenders. In view of this fact, your Directors regret to state their inability to recommend any dividend on equity shares for the financial year ended March 31, 2018.
Your Company has a comprehensive set of IP based software solutions (20+), coupled with a wide range of IT Services to address the dynamic requirements of a variety of industry verticals including Banking, Insurance, Capital Markets, Asset & Wealth Management (BFSI). The Company also provides solutions for other verticals such as Government, Manufacturing, Distribution, Telecom and Healthcare.
The business activities of the Company are broadly divided into two categories, viz: IT Solutions and Transaction Services. IT Solutions business comprises of software products and IT enabled services while the Transaction Services comprise of BPO and KPO services. The Company has a good product portfolio and has dominant presence in fast growing emerging economies. The Product business of the Company has wide base with more than 800 active customers who are satisfactorily using the Companys products.
The contribution to the revenue for the year from IT Solutions was 95% and that of Transaction Services was 5%.
Your Company has presence in 50 countries across six operational geographies, viz. South Asia, Asia Pacific
(APAC), Middle East and Africa (MEA), Kingdom of Saudi Arabia (KSA), Western Europe (WE) and North America (US). Your Company has marketing network around the world, including US, WE, MEA and APAC. The business of your Company is largely divided into Emerging Markets and Developed Markets. The share of the Emerging Markets to total revenue of the Company is about 70% while that of Developed Markets is about 30%. For detailed operations and business performance and analysis, kindly refer the Management Discussion & Analysis which forms a part of this Report.
SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COmPANIES
During the year under review, 3i Infotech Financial Software Inc, a US based step-down subsidiary of the Company was merged with 3i Infotech Inc, another US based step-down subsidiary of the Company effective December 31, 2017. As on March 31, 2018, the number of subsidiaries are 22 (twenty two).
3i Infotech Software Solutions LLC was incorporated as a step-down subsidiary on May 15, 2018 to tap business opportunities in Dubai Mainland, UAE.
As per the first proviso to Section 129(3) of the Companies Act, 2013 (the "Act") read with Rule 5 of Companies (Accounts) Rules, 2014, the statement containing salient features of the financial statements of subsidiaries/ associate companies/joint venture in the prescribed Form AOC-1 is enclosed to the consolidated financial statements. This statement also mentions highlights of performance of subsidiaries/associate companies / joint venture and their contribution to the overall performance of the Company during the year.
Pursuant to the provisions of Section 136 of the Act, the financial statements of the Company, consolidated financial statements along with relevant documents and separate audited accounts in respect of subsidiaries are available on the website of the Company.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186
Particulars of loans, guarantees or investments granted/made during the year are given under the notes to standalone financial statements forming part of the Report.
CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
During the year under review, all the contracts or arrangements or transactions entered into by the Company with related parties referred to in Section 188 of the Act, were in the ordinary course of business and on an arms length basis. During the year, the Company has not entered into any contract/arrangement/ transaction with related parties which could be considered material in accordance with the policy of the Company on related party transactions.
Since all related party transactions entered into by the Company were in the ordinary course of business and were on an arms length basis, form AOC-2 is not applicable to the Company.
The Company has in place a Policy on Materiality of Related Party Transactions and a Policy on dealing with Related Party Transactions. The said policy can be viewed on the Companys website by accessing the following link: https://www.3i-infotech.com/investors-2/ under "Corporate Governance".
Details regarding related party disclosure are given under the notes to standalone financial statements which form part of this Report.
MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY
There have been no material changes and commitments, if any, affecting the financial position of the Company which have occurred between the end of the financial year to which the financial statements relate and as on the date of this Report.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY REGULATORS
During the year under review, no significant and material tribunals impacting the going concern status and Companys operation in future.
REPORT ON CORPORATE GOVERNANCE
The Corporate Governance Report along with auditors certificate thereon in terms of Regulation 34 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("SEBI LODR") read with Schedule V of SEBI LODR is appended herewith as Annexure I to this Report.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
In terms of provisions of Regulation 34 of SEBI LODR, the Management Discussion and Analysis Report is given under separate section forming part of this Report.
EXTRACT OF ANNUAL RETURN
In terms of the requirements of Section 92 (3) of the Act read with Rule 12 of the Companies (Management and Administration) Rules, 2014, an extract of the Annual Return in the prescribed form MGT- 9 is appended herewith as Annexure II.
CAPITAL a) Preference Share Capital:
During the year under review, as per the terms of DRS, the Company had allotted Class B Preference Shares of face value of Rs5/- each at par to its Lenders. Details of the allotments are as follows:
|Date of Allotment||No. of Class B Preference Shares allotted|
|May 31, 2017||29,761,872|
|September 27, 2017||78,183,606|
|January 15, 2018||444,982,211|
|February 7, 2018||25,638,620|
|March 7, 2018||3,684,800|
After taking into account the above allotments, the preference share capital of the Company as on March 31, 2018 was Rs7,027,607,980 consisting of 13,00,00,000 Class A Preference Shares of Rs5/- each and 1,275,521,596 Class B Preference Shares of Rs5/- each.
b) Equity Share Capital:
1) Allotments under Employees Stock Option Schemes (ESOS) :
The Company has not allotted any shares under ESOS during the year.
2) Allotments against conversion of Foreign Currency Convertible Bonds (FCCBs):
During the year, the Company has allotted Equity Shares against conversion of FCCBs as per the below mentioned details:
|ISIN of FCCBs||Value of FCCBs converted (USD)||Date of allotment||Number of Equity Shares allotted||Fixed Foreign Exchange Conversion Rate (in Rs)||Issue Price (in Rs)||Premium (in Rs)|
|XS1423751418||6,034,014||June 8, 2017||40,021,201||66.326||10||-|
|XS0308551166||25,000||August 17, 2017||6,148||40.81||165.935||155.935|
|XS0769181982||345,750||December 21, 2017||1,064,298||50.7908||16.50||6.50|
|XS1423751418||1,00,000||March 22, 2018||530,608||66.326||12.50||2.50|
|XS0769181982||3,250||March 22, 2018||10,004||50.7908||16.50||6.50|
3) Allotments of Equity Shares under the Debt Realignment Scheme (DRS) Package:
During the year under review, the Company has allotted 390,074,516 Equity Shares to some of the Lenders of the Company including the lenders of the Companys subsidiaries and lenders of facilities guaranteed by the Company and lessors of the Company ("DRS Lenders") as per the terms of DRS package, the details of which are as follows:
|Date of Allotment||No. of Shares allotted|
|April 19, 2017||13,468,574|
|May 31, 2017||48,855,774|
|September 27, 2017||47,084,567|
|January 15, 2018||263,909,361|
|February 7, 2018||14,650,640|
|March 7, 2018||2,105,600|
As a result of the aforesaid allotments, the paid-up and issued equity share capital of the Company stands at Rs16,153,581,780 as on March 31, 2018.
The Company has neither issued equity shares with differential rights as to dividend, voting or otherwise nor any shares (including sweat equity shares) to the employees of the Company under any Scheme.
EMPLOYEES STOCK OPTION SCHEMES
As per SEBI Circular (CIR/CFD/POLICY CELL/2/2015) dated June 16, 2015 relating to requirements specified under the SEBI (Share Based Employee Benefits)Regulations 2014, details of the ESOS of the Company are given in Annexure III to this Report.
During the year, the Company has not invited/accepted any deposit under Sections 73 and 76 of the Act.
DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMP)
During the year under review, pursuant to withdrawal of Nomination by IDBI Bank Limited, Mr. Shantanu Prasad resigned as Nominee Director with effect from January 12, 2018. Further, Mr. Gautam Dutta was appointed as Nominee Director (IDBI Bank Limited) on January 12, 2018 pursuant to nomination by IDBI Bank Limited. The Directors place on record their sincere appreciation towards services rendered by Mr. Shantanu Prasad during his tenure as Nominee Director of the Company.
In accordance with Section 152 (6) and other applicable provisions of Companies Act, 2013, Ms. Sarojini Dikhale (DIN: 02755309), being a Non-Executive Director, is liable to retire by rotation at the ensuing Annual General Meeting (AGM) of the Company and, being eligible, has offered herself for re-appointment. The Board recommends her re-appointment at the ensuing AGM for your approval. As stipulated under the Regulation 36 of SEBI LODR, a brief resume of the Director proposed to be re-appointed is given in the Notice convening the ensuing AGM, which is included in the Annual Report 2017-18.
As on the date of this Report, the Board of the Company consists of 6 Directors, out of which two are Independent Directors, two are Nominee Directors, one is a Non-Executive Director and one is an Executive Director.
None of the Independent Directors have had any pecuniary relationship or transaction with the Company during Financial Year 2017-18, except to the extent of their directorship. None of the Directors or KMP of the Company is related inter-se.
DECLARATION BY INDEPENDENT DIRECTORS
The Company has received declaration from each independent director as per provisions of SEBI LODR and Section 149 (7) of the Act, that he meets the criteria of independence laid down in Section 149 (6) of the Act.
NUMBER OF MEETINGS OF THE BOARD
Five meetings of the Board of Directors were held during the year. The details of the same are given in Corporate Governance Report section that forms part of this Report. The intervening gap between two consecutive Board Meetings did not exceed 120 days.
POLICIES AS PER SEBI LODR
SEBI LODR mandated all Listed Companies to formulate certain policies. The Company has in place all such policies, the list of which is given below:
Whistle Blower Policy;
Policy relating to Remuneration of Directors, Key Managerial Personnel and other Key Employees;
Corporate Social Responsibility Policy;
Policy for determining Material Subsidiaries;
Policy on Materiality of Related Party Transactions and dealing with Related Party Transactions;
Policy for Board Diversity and
Policy for Preservation of Documents.
PERFORMANCE EVALUATION OF THE BOARD OF DIRECTORS
In terms of the provisions of the Act and SEBI LODR, your Company has laid down criteria for performance evaluation of Directors and Chairman of the Board and also the evaluation process for the same. Schedule IV of the Act states that the performance evaluation of Independent Directors shall be done by the entire Board of Directors, excluding the Director being evaluated. The Companys policy relating to appointment and remuneration of Directors, KMPs and other employees, including criteria for determining qualifications, positive attributes and independence of a director are covered under the Corporate Governance Report, which forms a part of this Report.
It is a practice of the Board of Directors to annually evaluate its own performance and that of its committees and individual directors. Accordingly, the performances of the members of the Board as a whole and of individual Directors were evaluated at the meeting of the Committee of the Independent Directors and the Board of Directors held on April 23, 2018.
FAMILIARIZATION PROGRAMME FOR INDEPENDENT DIRECTORS
As per provisions of SEBI LODR and the Act, the Company has formulated Familiarization Programme for Independent Directors. At the time of appointment of an Independent Director, the Company issues a formal letter of appointment to an Independent Director outlining his/her role, function, duties, responsibilities, etc. The terms and conditions for appointment of Independent Directors are also available on the website of the Company.
The Board Members are provided with necessary documents/brochures, reports and internal policies to enable familiarizing them with the Companys procedures and practices. Periodic presentations are made at the Board Meetings on business performance updates of the Company, global business environment, business strategy and risk involved.
As on date of this Report, the Board has four committees: i. Audit Committee ii. Nomination and Remuneration Committee iii. Stakeholders Relationship Committee iv. Corporate Social Responsibility Committee
As per Regulation 21 of SEBI LODR, the Board needs to constitute Risk Management Committee, wherein majority of the Members of Risk Management Committee should consist of Members of Board. This regulation is applicable only to top 100 listed entities, determined on the basis of market capitalization, as at the end of the preceding financial year. Since your Company is not amongst top 100 listed entities, your Company has not constituted a Risk Management Committee.
In line with the provisions of the Act and SEBI LODR, the Company has devised and implemented a vigil mechanism, in the form of "Whistle Blower Policy". As per the Policy, the Company has an internal committee comprising of the Head-HR and the Compliance Officer of the Company to address the functioning of the vigil mechanism as mandated by the Act and assist the Audit Committee thereunder.
The detailed information regarding the committees of the Board, including composition of the Audit Committee, has been given in the Corporate Governance Report which forms an integral part of this Report.
CONSOLIDATED FINANCIAL STATEMENTS
The Audited Consolidated Financial Statements presented by the Company include the financial results of its subsidiary companies, associates and joint ventures and form part of this Report. The audited consolidated financial statements have been prepared in accordance with the Indian Accounting Standards (referred to as "Ind AS").
INTERNAL FINANCIAL CONTROLS SYSTEMS AND THEIR ADEQUACY
Your Company has implemented adequate procedures and internal controls which provide reasonable assurance regarding reliability of financial reporting and preparation of financial statements. Your Company also ensures that internal controls are operating effectively.
M/s. GMJ &Co., Chartered Accountants, were appointed as the Statutory Auditors of the Company at the 23rd Annual General Meeting held in 2016 for a term of 5 years, subject to ratification of their appointment at every Annual General Meeting.
The Audit Committee and the Board recommend ratification of appointment of M/s. GMJ & Co., Accountants as Statutory Auditors of the Company till the conclusion of 26th Annual General Meeting of the Company. The Company has received letter from statutory auditors that their re-appointment, if made, would be within limits as prescribed under Section 141 (3)(g) of Companies Act, 2013 and they are not disqualified for re-appointment.
The Auditors Report does not contain any qualifications, reservations or adverse remarks. However, there is an emphasis of matter in the Auditors Report on standalone financial statements for the year ended March 31, 2018 with respect to the remuneration paid to the Managing Director and Global CEO of the Company during financial year 2016-17. Your Directors would like to inform you that the remuneration paid / provided to the Managing
Director and Global CEO for the financial year 2016-17 has been approved by both the shareholders as well as lenders of the Company. This remuneration was in excess of the limits prescribed under the erstwhile Section 197 of the Companies Act 2013 and was subject to the approval of the Ministry of Corporate Affairs (MCA). The management had made an application to MCA for the necessary approval. Although MCA has granted approval only for a part of the amount, the management, based on the opinion obtained from our legal counsel is of the view that once the amended Section 197 of the Companies (Amendment) Act, 2017 is notified, the Company would be in compliance with the law.
CONSERVATION OF ENERGY
Although the operations of the Company are not energy intensive, the management is highly conscious of the criticality of the conservation of energy at all operational levels. The requirement of disclosure of particulars with respect to conservation of energy as prescribed in Section 134(3)(m) of the Act read with Rule 8(3) of the Companies (Accounts) Rules, 2014, is not applicable to the Company and hence are not provided.
TECHNOLOGY ABSORPTION, ADOPTION AND INNOVATION
The Company continues to use the latest technologies for improving the productivity and quality of its services and products.
During the year, your Company has taken the following technology initiatives:
Information Security Awareness programmes;
Strengthened its IPRs through technology innovation and appropriate security controls;
Improved utilization and delivery productivity by use of LEAN IT techniques for project delivery and
Partnerships with major technology providers and publishers for win-win relationships and go-to-market strategies.
RESEARCH AND DEVELOPMENT (R & D)
The solutions offered by the Company for various market segments are continuously developed and upgraded through the Global Development Centers (GDCs).
The GDCs function as the product research and development arm of the Company and focus on developing and expanding the Companys products and IPRs. Besides this, the Company is also in the process of upgrading its varied product lines to standard and latest technological platforms.
With a focus to further enhance the Companys software products, i.e. its Intellectual Property based on market needs, the GDCs work in line with the Companys strategy for growth.
Expenditure on R & D
|Rs in crores|
|Total R&D expenditure as a percentage of standalone revenue||7.74%||3.54%|
The Company is committed to providing innovative and high quality products and services that meet or exceed customer expectations.
Maintaining a quality focus on continuous improvement to our Products, Process and Services and
Process adherence and governance ensuring lower defect & On Time delivery.
The Companys Quality Management System (QMS) addresses process required for entire Software Development Life Cycle (SDLC) and Project Management Life Cycle (PMLC) supported with industry standard templates and guidelines to ensure disciplined project execution, thereby transforming business from taking corrective & preventive measures to the state of predicting outcomes. This framework is designed based on the CMMi Process framework to enhance productivity and to reduce inefficiencies.
The Company has achieved CMMi Level 3 certification to meet the Companys commitment towards quality & business process with further plans to extend the certification to CMMi Level 5.
FOREIGN EXCHANGE EARNINGS AND OUTGO
a) Activities relating to exports, initiatives taken to increase exports, development of new export markets for products and services and export plans
More than 28.82% of the revenue of the Company is derived from exports.
b) Foreign Export earnings and expenditure
During the year 2017-18, the expenditure in foreign currencies amounted to Rs6.13 crores on account of cost of professional charges, cost of outsourced services and bought out items, travelling and other expenses and interest (excluding expenditure incurred by UAE Branch). During the same period, the Company earned an amount equivalent to Rs68.46 crores in foreign currencies as income from its operations abroad (excluding income from UAE Branch).
The Company has continued to improve the quality of Human Resource. The key facet has been better levels of productivity as compared to earlier years which has contributed in operating financial parameters showing a strong uplift. Regular interactions and career enhancements by way of bigger roles to talented employees have helped in strengthening the confidence of the employees in the tough financial scenario of the Company. talent pipeline is looking healthy though attrition and retention remains a challenge for the industry and more so for the Company.
Your Company will continue to focus and build the human potential which would help in improving operating parameters in the coming year.
In terms of the provisions of Section 197(12) of the Act read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing the names and other particulars of the employees drawing remuneration in excess of the limits set out in the said rules is provided in a separate annexure forming part of this Report. Having regard to the provisions of the first proviso to Section 136(1) of the
Act, the Annual Report excluding the aforesaid information is being sent to the members of the Company. In terms of Section 136, the said annexure is open for inspection at the Registered Office of the Company. Any shareholder interested in obtaining a copy of the same may write to the Company Secretary.
Disclosures pertaining to the remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are provided in this Report as Annexure IV.
Prevention of Sexual Harassment at Workplace
The Company has in place a policy aiming at prevention of sexual harassment at all workplaces of the Company in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the rules thereunder. All employees (permanent, contractual, temporary, trainees) are covered under this Policy. An internal Complaint Committee has been set up in the Company to consider and redress complaints received with respect to sexual harassment. During the year under review, the Complaint Committee had received one complaint of the nature covered under the said Act and has been resolved. There are no pending cases.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
In compliance with Section 135 of the Act read with the Companies (Corporate Social Responsibility Policy) Rules, 2014, the Company has constituted a CSR Committee. A brief outline of the CSR policy of the Company and the statutory disclosures with respect to CSR Committee and an Annual Report on CSR for FY 2017-18 as required under Rule 8 (1) of the CSR Rules are set out in Annexure V of this Report. The CSR Policy as recommended by CSR Committee and as approved by the Board is available on the website of the Company.
During the year, the Company has not spent any amount on CSR activities in view of losses incurred on an average during the preceding three financial years.
SECRETARIAL AUDITORS REPORT
Pursuant to the provisions of Section 204 of the Act, and Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company had appointed M/s. BNP & Associates, Practicing Company Secretaries, to undertake the Secretarial Audit of the Company for the financial year 2017-18. The Secretarial
Audit Report is appended as Annexure VI to this Report. The Secretarial Audit Report does not contain any qualifications, reservations or adverse remarks.
Disclosures required under Regulations of SEBI LODR are shown under the Corporate Governance Report.
The Corporate Governance Report along with auditors certificate thereon and the Management Discussion and Analysis form part of this Report.
The Company will continue to technologically upgrade its products and concentrate on the Software Products, IT Services and IT enabled Services for its growth. The business outlook and the initiatives proposed by the management to address its financial risks have been discussed in detail in the Management Discussion and Analysis which forms a part of this Report.
FORWARD LOOKING STATEMENTS
This Report along with its annexures and Management Discussion & Analysis contains forward-looking statements that involve risks and uncertainties. When used in this Report, the words anticipate, believe, estimate, expect, intend, will and other similar expressions as they relate to the Company and/or its businesses are intended to identify such forward looking statements. The Company undertakes no obligation to publicly update or revise any forward- looking statements, whether as a result of new information, future events, or otherwise. Actual results, performances or achievements could differ materially from those expressed or implied in such forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements that speak only as of their dates. This Report should be read in conjunction with the financial statements included herein and the notes thereto.
DIRECTORS RESPONSIBILITY STATEMENT
As required under Section 134(5) of the Act, your Directors hereby confirm that:
a) in preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;
b) 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 as at March 31, 2018 and of the loss of the Company for the financial year ended on that date;
c) they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
d) they have prepared the annual accounts on a going concern basis;
e) to be followed by the Company and that such internal financial they have laid down internal financial controls are adequate and are operating effectively and
f) they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and are operating effectively.
Based on the reviews of internal, statutory and secretarial auditors, external consultants, the management and respective committees of the Board, the Board is of the opinion that the Companys system of internal financial controls was adequate and the operating effectiveness of such controls was satisfactory during the financial year 2017-18.
The Directors are thankful to the Members for their confidenceand continued support. The Directors are grateful to the Central and State Government, Stock Exchanges, Securities & Exchange Board of India, Reserve Bank of India, Customs and other government authorities, Lenders, FCCB holders and last but not the least, its trusted clients for their continued support.
The Directors would like to express their gratitude for the unstinted support and guidance received from alliance partners and vendors.
The Directors would also like to express their sincere thanks and appreciation to all the employees for their commendable team work and professionalism.
|For and on behalf of the Board|
|Ashok Shah||Padmanabhan Iyer|
|Chairman||Managing Director & Global CEO|
|June 29, 2018 at mumbai|