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Your Directors have pleasure in submitting their 6th Annual Report together with the Audited standalone & consolidated financial statement for the year ended on 31st March, 2017.
Financial Highlights & Review of Operations:
Standalone for financial year ended on 31st March
Consolidated for financial year ended on 31st March
|Revenue from operations||1,490.85||1,401.53||1,491.24||1,401.80|
|Cost of Material Consumed||1,406.36||1,383.50||1,406.49||1,383.66|
|Change in inventories of finished goods||(39.51)||(77.96)||(39.51)||(77.96)|
|Employee benefit expense||57.18||19.84||57.31||19.92|
|Depreciation and amortization expense||2.78||3.70||2.78||3.70|
|Profit before Exceptional and Prior Period Items & tax||37.89||30.78||37.92||30.79|
|Exceptional and Prior Period Items||2.30||2.30|
|Profit before tax||35.59||35.62|
|Profit for the year||21.95||20.07||21.97||20.08|
|Basic Earnings Per Share (In Rs.)||10.08||10.30||10.09||10.30|
|Diluted Earnings Per Share (In Rs.)||10.08||10.30||10.09||10.30|
REVIEW OF BUSINESS OPERATIONS
Your Companys standalone total revenue for the current financial year 2016-17 has increased to Rs. 1,493.50 Crores from the previous financial year of Rs. 1,403.98 Crores. Similarly the Companys Standalone total profit for the current financial year 2016-17 has increased to Rs. 21.95 Crores from the previous financial year of Rs. 20.07 Crores.
Your Directors assured that Companys performance will enhance in future also.
REVIEW OF BUSINESS OPERATIONS AND FUTURE PROSPECTS
Your Directors are optimistic about companys business and hopeful of better performance with increased revenue in coming year. There was no change in the nature of business of Company. During the year under review, few orders from one of the partners of the Company had been cancelled/terminated, however, the Company and its Board is striving its best in order to maintain its growth and business in the coming years.
No Dividend was declared for the current financial year.
TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCTION AND PROTECTION FUND
The provisions of Section 125(2) of the Companies Act, 2013 do not apply as there was no dividend transferred to the unpaid dividend account. Further, no dividend remain unpaid or unclaimed for the period of 7 Years.
TRANSFER TO RESERVES
Your Company has not made any transfer to reserve during the Financial Year 2016-17. However profit for the year is shown as surplus under the head Reserve & Surplus during the financial year 2016-17.
During the year under review, the company has undertaken following transactions:
|Increase in Authorized Capital||Increase in Paid-up Capital [Bonus]||Buy Back of Securities||Sweat Equity||Bonus Shares||Employees Stock Option Plan|
A) Issue of equity shares with differential rights
Your Company had not issued equity shares with differential rights as required to be disclosed in rule 4 (4) of Companies (Share Capital and Debentures) Rules, 2014, during the year under review.
B) Issue of sweat equity shares
Your Company had not issued sweat equity shares as require to be disclosed under rule 8 (13) of Companies (Share Capital and Debentures) Rules, 2014, during the year under review.
C) Issue of employee stock
Your Company had not issued employee stock option as required to be disclosed under rule 12 (9) of Companies (Share Capital and Debentures) Rules, 2014, during the year under review.
D) Provision of money by company for purchase of its own shares by employees or by Trustees for the benefit of employees: N.A.
MATERIAL CHANGES DURING THE FINANCIAL YEAR
Increase in the Authorized Share Capital
Your Company increased its authorized share capital from Rs.25 Crores to Rs. 30 Crores during the year under review. Increase in the Paid up Share Capital
- Bonus Issue
Your company allotted by way of bonus Issue 10,892,000 (One Crore Eight Lakh Ninety Two Thousand) equity shares of Rs. 10/- each in the ratio of 1:1, fully paid up by capitalisation of Reserves on 4th February, 2017, to the member of the company, during the financial year under review.
- Purchase of shares of Enpocket Services (India) Private Limited know known as Enpocket IT Services (India) Private Limited
Your Company purchased 10,000 (100%) equity shares at the rate of Rs. 3,900/- (Rupees Three Thousand Nine Hundred only) each of Enpocket Services (India) Private Limited, a subsidiary of Nokia Investment OY, Finland, during the financial year under review.
- Incorporation of Fourth Dimension Solutions Pte. Ltd.
A subsidiary of your Company was incorporated at Singapore under the name and style of Fourth Dimension Solutions Pte Ltd. on 18-11-2016, during the financial year under review.
- Incorporation at Fourth Dimension Solutions DMCC
A wholly owned subsidiary of your Company was incorporated at DMCC UAE under the name and style of Fourth Dimension Solutions DMCC on 16.02.2017, during the financial year under review.
The Logo of your company got registered with the Registrar of Trade Marks under the provisions of Section 23(2) of Trade Mark Act, 1999 read with rule 62(1) of the Trade Mark Rules, 2002 in Class 35 vide e-certificate dated 15th December, 2016, during the financial year under review.
CHANGES IN DIRECTORS AND KEY MANAGERIAL PERSONNEL
The Board consists of executive and non-executive directors who have wide and varied experience in different disciplines of corporate, in order to further strengthen the Board, during the year under review, the changes in the Directors and Key Managerial Personnel are herein below.
The Board in its meeting held on 25th February, 2017 appointed Mr. Sanjay Kumar Sachdev (DIN: 01548230), as an Additional Director, of the Company, with immediate effect.
Retirement by Rotation
In accordance with the provisions of Section 152 of the Companies Act, 2013 and in terms of the Articles of Association of the Company, Mrs. Namita Mukherjee (DIN: 06561265), Director, and Mr. Bibekananda Mukherjee (DIN: 07008285), Director, of the Company, will retire by rotation at the ensuing Annual General Meeting of your Company and being eligible offer themselves for reappointment. The Board of Directors of the Company has recommended their re-appointment.
MATERIAL CHANGES, IF ANY, AFTER THE END OF FINANCIAL YEAR
The Board in its meeting held on 29th May, 2017
(i) Appointed Mr. Rajeev Ranjan (DIN: 06534751), Ms. Shipra Jain (DIN: 07771758) and Mr. Mahavir Singh Farswan (DIN: 07833852) as an Additional Director of the Company, with immediate effect.
(ii) Took note on the resignation of Mrs. Namita Mukherjee (DIN: 06561265) from the post of whole time director of the Company, with effect from 31.05.2017, however she will continue on the Board as Director of the Company.
Mr. Mahavir Singh Farswan (DIN: 07833852), resigned due to his preoccupation, from the post of Additional Director of the Company w.e.f., 22nd July, 2017.
The Board in its meeting held on 19th August, 2017, appointed Mr. Rajendra Kumar (DIN: 06380868) as an Additional Director of the Company, with immediate effect.
COMPANYS POLICY RELATING TO DIRECTORS APPOINTMENT, PAYMENT OF REMUNERATION AND DISCHARGE OF THEIR DUTIES
During the year under review, the Company had reconstituted Nomination and Remuneration Committee. The Constitution
of the Nomination and Remuneration Committee is as per the provisions of Section 178 of the Companies Act, 2013. As per the current policy the Composition of Board is an appropriate mix of executive and independent directors to maintain the independence of the Board, and separate its functions of governance and management. On March 31,2017, the Board consists of seven Directors, two of whom are executive, two non-executive and three are independent directors. They meets the criteria policy of the Company on directors appointment and remuneration, including criteria as required under sub-section (3) of Section 178 of the Companies Act, 2013 for determining qualifications, positive attributes, independence of a director and other matter. 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.
DECLARATION BY THE INDEPENDENT DIRECTORS
During the year under review, 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.
EXTRACT OF ANNUAL RETURN
As per Section 134(3)(a) the extracts of Annual Return in form MGT-9, pursuant to the provisions of Section 92 read with Rule 12 of the Companies (Management and Administration) Rules, 2014 is furnished in Annexure I and is attached to this Report.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
As per Rule 8(3) of Companies (Accounts) Rules, 2014, the disclosure required under this rule are as follows:
A. Conservation of Energy
Your Company is engaged in business of sale and services of IT and ITes Related products, providing e-governance services and such operations do not require substantial Electricity, Gas & Steam, Power, Water or any other kind of energy consumption. However, the Company is taking all possible measures to conserve the energy.
(i) The steps taken or impact on conservation of energy; N.A.
(ii) The steps taken by the Company for utilizing alternate sources of energy; N.A.
(iii) The capital investment on energy conservation equipments; N.A.
B. Technology Absorption and Research & Development
The Company has not incurred any expenditure on Research & Development. Your Company has not imported technology reckoned from the beginning of the financial year.
(i) The efforts made towards technology absorption; N.A.
(ii) The benefits derived like product improvement, cost reduction, product development or import substitution; N.A.
(iii) In case of imported technology (imported during the last three years reckoned from the beginning of the financial year) - N.A.
(a) The details of technology imported; N.A.
(b) The year of import; N.A.
(c) Whether the technology been fully absorbed; N.A.
(d) If not fully absorbed, areas where absorption has not taken place, and the reasons thereof; and N.A.
(iv) The expenditure incurred on Research and Development. N.A.
C. Foreign Exchange Earnings and Outgo
Your Company has earned in Forex equivalent to Rs. 10.36 Crores from supply/ rendering of services. However your Company has spent Rs. 15.93 Crores on import of goods and Rs. 2.00 Crores on tour and travel during the financial year under review.
The Board of Directors duly met Nine (9) times during the financial year 2016-17 and in respect of all the proceedings were properly recorded
|1. 12.04.2016||2.||28.05.2016 and 30.05.2016 - (Adjourned)|
COMMITTEES OF THE BOARD
Currently, the Board has five committees: the Audit Committee, the Executive Committee, the Stakeholders Relationship Committee, the Nomination & Remuneration Committee and the Corporate Social Responsibility Committee. A detailed note on the composition of the Board and its committees is provided in the Corporate Governance report as Annexure V and is attached to this Report.
Your Company has neither accepted nor renewed any Deposit under Schedule V of the Companies Act, 2013, read with Companies (Acceptance of Deposits) Rules, 2014 during the year under review.
The details relating to deposits, covered under Chapter V of the Act,-
(a) The Company have not accepted deposit during the year; N.A.
(b) Remained unpaid or unclaimed as at the end of the year; N.A.
(c) Whether there has been any default in repayment of deposits or payment of interest thereon During the year and if so, number of such cases and the total amount involved- N.A.
(i) At the beginning of the year; N.A.
(ii) Maximum during the year; N.A.
(iii) At the end of the year; N.A.
The details of deposits which are not in compliance with the requirements of Chapter V of the Act; N.A.
MANAGEMENT DISCUSSION & ANALYSIS REPORT
Pursuant to Regulation 34 and Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Management Discussion and Analysis Report is as follows:
Forward looking statement
Statements made herein describing the Companys expectations or predictions are "forward looking statements". The actual results may differ from those expected or predicted. Prime factors that may make a difference to the Companys performance include market conditions, input costs, govt. regulations, economic development within/outside country etc.
The following discussions on our financial condition and result of operations should be read together with our audited consolidated financial statements and the notes to these statements included in the annual report. Unless otherwise specified or the context otherwise requires, all references herein to "we", "us", "our", "the Company", "FDS" are to Fourth Dimension Solutions Ltd. and its subsidiaries and associates.
Global GDP growth is projected to increase, rising from just under 3% in 2016 - the slowest pace since 2009 - to 3.3% in 2017 and around 3.5% in 2018. Indias economy could expand by between 6.75% and 7.5% in 2017-18, a government survey said, signalling that growth could recover sooner than expected after a shock scrapping of high-value banknotes to fight "black money". The cash ban, however, will slow down growth for 2017 to below 7%, said the Economic Survey, which is an annual government report on the economy that also sets the tone for the general budget and floats new policy ideas. The survey said "demonetization" would bring long-term benefits to the economy.
It also said structural reforms and proposed Goods and Service Tax could boost growth rate to 8-10%. The GST will create a common Indian market, improve tax compliance and governance, and boost investment and growth; it is also a bold new experiment in the governance of Indias cooperative federalism. All businesses face the task of lowering down the cost of production and simultaneously maintain the satisfaction of the consumer. This is why manufacturing industry is a very competitive industry. Therefore the GST will lead to the reduction in cost of production because the GST reduces the tax increment. The GST program should have allowed uninterrupted tax credit by removing the old indirect tax rule of not getting any tax credit of the central taxes over state taxes and vice versa.
Indian electronics and hardware industry is expected to reach USD 112-130 billion by 2018 on the back of rising consumer demand, growing disposable income, declining electronics prices and various government initiatives like Digital India.
Moreover, the Government of India (Gol) has announced several programmes such as Digital India, Smart Cities, the cloud initiative, solar power, UIDAI projects and the National Knowledge Network initiative which will necessitate installation and up- gradation of installed devices and networks.
In the Union Budget 2017-18, the Government of India announced the following key proposals in addition to the previously announced Digital India Initiative which will provide a boost to the businesses of IT/ITES and ICT (Information & Communication Technology:
- The Government of India has allocated Rs 10,000 crore (US$ 1.5 billion) for BharatNet project under which it aims to provide high speed broadband to more than 150,000 gram panchayats by 2017-18.
- Prime Minister of India, Mr Narendra Modi, has launched the Bharat Interface for Money (BHIM) app, an Aadhaar-based mobile payment application that will allow users to make digital payments without having to use a credit or debit card. The app has already reached the mark of 10 million downloads.
(Source: OECD Outlook, World Bank report on "Global Economic Prospects, January 2017", Economic Survey 2017, Analyst Reports, Government Publications)
ABOUT Fourth Dimension Solutions Ltd. (FDS)
Fourth Dimension Solutions founded in 2011, is an India-based information technology (IT) and cable infrastructure Company which provides end-to-end IT / ITEs and telecom solutions combined with technical support and operations outsourcing. The Company partners with government and public sector institutions to provide sustainable IT strategies at competitive costs. It operates in three core verticals - Technology Solutions, IT Infrastructure Services, and Operations Outsourcing.
With over 2000 employees, FDS is a professionally driven global Company, catering over 100+ Indian & Global customers, including ranked 66 among THE Next 500 Indias Top Midsize Companies by Fortune India magazine and Raked 1st in the InfoTech Segment Companies. FDS is also amongst the best SME IT companies in India as per the recent surveys and reports.
SUBSIDIARY ASSOCIATES AND JOINT VENTURES Domestic Subsidiaries -
M/s. Thumbspeed Tech Solutions Private Limited (Previously known as Thumbspeed Software Solutions Private Limited) a wholly owned subsidiary of the company is engaged in IT and FMCG related business.
M/s. Enpocket IT Services (India) Private Limited (Previously known as Enpocket Services (India) Private Limited became wholly owned subsidiary of the company, during the year under review. Previously it was a subsidiary of M/s. Nokia Investments OY. M/s. Enpocket IT Services (India) Private Limited is engaged in IT App related business.
Overseas Subsidiaries -
M/s. Fourth Dimension Solutions Pte. Ltd. a subsidiary of Fourth Dimension Solutions Limited got incorporated on 18th November, 2016 at Singapore and is engaged in IT and ITes related business. During the year under review, no business or operation had commenced.
M/s. Fourth Dimension Solutions DMCC a wholly owned subsidiary of Fourth Dimension Solutions Limited got incorporated on 16th February, 2017 at Dubai, U.A.E. and is engaged in IT and ITes related business. During the year under review, no business or operation had commenced.
During the year under review, the total revenue of M/s. Thumbspeed Tech Solutions Private Limited has increased to Rs. 29,55,590/- from previous financial year Rs. 2,720,630/- and net profit after tax for the current financial year 2016-17 has decreased to Rs. 39,353/- from the previous financial year of Rs. 72,422/-.
During the year under review, the total revenue of M/s. Enpocket IT Services (India) Private Limited has decreased to Rs. 10,71,250/- from previous financial year Rs. 28,16,094/- and net profit after tax for the current financial year 2016-17 has decreased to Rs. 1,74,735/- from the previous financial year of Rs. 9,84,683/-.
A separate statement containing the salient features of Financial Statements of Subsidiary of your Company i.e., M/s. Thumbspeed Tech Solutions Private Limited and M/s. Enpocket IT Services (India) Private Limited forms a part of consolidated financial statement in terms of Section 129 of the Companies Act, 2013. The Financial Statements of Subsidiary Companies are kept open for inspection by the shareholders at the Registered Office of your Company during business hours on all days except Saturdays, Sundays and public holidays upto the date of the Annual General Meeting (AGM) as required under Section 136 of the Companies Act, 2013. Any member desirous of obtaining a copy of the said financial statements may write to the Company at its Registered Office.
PERFORMANCE AND FINANCIAL POSITION OF THE SUBSIDIARY
The statement containing the features of the financial statements of Thumbspeed Tech Solutions Private Limited and Enpocket IT Services Private Limited under the first proviso to sub-section (3) of Section 129 of the Companies Act, 2013 is being attached with the Boards Report in Form AOC-1 as Annexure II and the forming part of the Boards Report.
CONSOLIDATED FINANCIAL STATEMENTS
The audited Consolidated Financial Statement, comprising of the Company and its subsidiary form part of this Report. The Auditors Report on the Consolidated Accounts is also attached. The same is unqualified. The Consolidated Financial
Statement have been prepared in accordance with the applicable Accounting Standards and in compliance with the applicable provisions of the Companies Act, 2013 other applicable provisions.
CONSOLIDATED FINANCIAL OVERVIEW -
The consolidated performance of the Company for the financial year ended March 31,2017, is as follows:
Total revenue from operations at Rs. 1491.2 crore for the year ended March 31,2017, as against Rs. 1401.8 crore for the corresponding previous period, an increase of 6.4%.
The cost of raw materials for the financial year ended March 31,2017 were Rs. 1367.0 crore as against Rs. 1305.7 crore for the corresponding previous period, an increase of 4.7%.
Staff expenses for the financial year ended March 31,2017 were Rs 57.3 crore as against Rs. 19.92 crore for the corresponding previous period, an increase of 188.1%, on account of increase in number of staff.
The EBIDTA (earnings before interest, depreciation and tax) was Rs. 43.4 crore for the year ended March 31,2017, as against Rs. 55.6 crore for the corresponding previous period, a decrease of 21.9%, mainly on account of increase in number of staff in the current year, owing to higher staff expenses.
Depreciation for the financial year ended March 31,2017 was Rs. 2.8 crore, as against Rs. 3.7 crore for the corresponding previous period.
The interest for the financial year ended March 31,2017 was Rs. 5.4 crore as against Rs. 23.5 crore for the corresponding previous period, a decrease of 77.2%, for the corresponding previous period.
Profit after tax was Rs 21.97 crore for the year ended March 31, 2017, as against Rs. 20.1 crore for the corresponding previous period, an increase of 9.4%.
EPS (Earning Per Share) for the financial year ended March 31,2017 was Rs. 10.09 for a face value of Rs 10 per share.
RESOURCES AND LIQUIDITY
As on March 31,2017, the consolidated net worth stood at Rs. 68.97 crore and the consolidated debt was at Rs. 4.98 crores.
The cash and cash equivalents at the end of March 31,2017 were Rs. 5.27 crore.
The net debt to equity ratio of the Company stood at 0.23:1 as on March 31,2017.
The Company provides Information technology (IT) services and solutions. The operational profits have improved on account of optimizing all the operations of the Company.
This performance could not have been achieved without your Companys continuous focus on customer centric initiatives, strengthening of network capabilities and widespread deployment of information technology. Your Company has continued to grow as a lean and agile organisation, delivering robust performance due to consistent implementation of best practices in operations, institutionalization of a number of strategic initiatives and enhanced employees engagement. Your Company firmly believes that the employees are its most valuable asset. This belief is translated into action through a number of initiatives for improving employee engagement, capability building, empowerment and thought leadership to yield consistent results.
ACHIEVEMENTS IN BUSINESS DURING THE YEAR
Fourth Dimension Solutions Ltd was recognized as "India Industry Trendsetter" by the Power brand Global London International forum of Equality at the KIA Oval, UK. This award is given to organizations that have established their presence in a very short span of time in the field of IT/ITES.
Fourth Dimension Solutions was awarded "Honour of Excellence" for significant contribution to Indias self-reliance at
the National Conference on Defence Production: Self Reliance and Beyond on 14th December, 2016 at New Delhi.
This prestigious award is a feather in the cap for our Company and is a testimony of the effort and skill of our team.
For the second year in a row, Fourth Dimension Solutions Ltd. (FDS) has made it to the prestigious Fortune India Next 500 list of Indian companies, with the IT/ITES infrastructure and services company improving its ranking to 66 from 371 in 2016. FDS features at the top, ranking #1 from 8 in 2016 in the Infotech Sector list.
Companies in the Next 500 list are mostly mid-sized and termed as the small wonders by the magazine. These firms drawn from various sectors like food and agricultural products, pharma, information technology, iron and steel and financial services are capable of breaking into the Fortune India the next 500 Rankings.
The services sector has been moving up the rankings driven by key financials. Recognising the Companys financial performance, FDS has been highlighted as a Mover and Shaker on the following key financial parameters:
- Cash Rich Company with Cash & Equivalents at 158.58% of Total Assets
- Maximised Shareholder Returns with Return on Net Worth (63.12%)
- Capital Efficiency with a high Return on Capital Employed (160.76%)
The Company is ranked ahead on established names cutting across multiple sectors, highlighting the Managements commitment to deliver excellence year after year.
RISKS AND CONCERNS
This section lists forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in these statements as a result of certain factors.
A part of business is substantially dependent on the prevailing domestic economic conditions. Factors that may adversely affect Indias economic growth that could affect the demand for IT products & services from the public sector include slowdown in the rate of implementation of digitization progams, inflation, changes in tax, trade, fiscal and monetary policies, scarcity of credit etc. Our revenues are highly dependent on Government E-governance projects, as well as on clients concentrated in certain industries. An economic slowdown or other factors that affect the economic health of the nation or those industries, or any other impact on the growth of such industries, may affect our business.
This risk arises from more players wanting a share in the same pie. Like in most other industries, opportunity brings with itself competition. We face different levels of competition in each sector, from domestic as well as multinational companies. Intense competition in the market for technology services could affect our pricing, which could reduce our share of business from clients and decrease our revenues. However, FDS has established strong brand goodwill in the market and a strong foothold in a wide spectrum IT & ICT projects and services. We have built a strong relationship with key industry participants and as a result are able to obtain competitive commercial terms and operational advantages. We also counter this risk with the quality of our products, our customer-centric approach and our ability to innovate customer specific solutions, focusing on pricing and aggressive marketing strategy, disciplined and time bound order executions, coupled with prudent financial and human resources management and better control over costs. Thus, we do not expect to be significantly affected by this risk.
Our engagements with customers are typically singular in nature and do not necessarily provide for subsequent engagements. Our business will suffer if we fail to anticipate and develop new services and enhance existing services in order to keep pace with rapid changes in technology and in the industries on which we focus. Disruptions in telecommunications, system failures, or virus attacks could negatively impact our operations and ability to provide our services and solutions, which could result in client dissatisfaction and a reduction in our revenues. A large part of our revenues is dependent on our top clients and the loss of any one of our major clients could significantly impact our
Given the projected growth in the Indian economy it is estimated that demand for our services will continue to rise steadily. The Company is further reducing its dependence on local by diversifying the sectors we cater to. Thus, we believe we have adequate mitigation in place for trade risk.
If we are unable to obtain required approvals and licenses in a timely manner, our business and operations may be adversely affected. We require certain approvals, licenses, registrations and permissions for execution of projects as per contract stipulations. We may encounter delays in obtaining these requisite approvals, or may not be able to obtain such approvals at all, which may have an adverse effect on our revenues. However, the Government has come up with a number of initiatives to boost the sector. As all industry predictions suggest that this will be the trend in the future as well and given our own experience in obtaining such permissions, we do not expect this risk to affect us materially in the coming years.
This risk refers to our liability arising from any damage to products, equipment, plant & machinery, life and third parties which may adversely affect our business. We may be liable to our clients for damages caused by the disclosure of confidential information, system failures, errors or unsatisfactory performance of services. We may be the subject of litigation which, if adversely determined, could harm our business. The Company attempts to mitigate this risk through contractual obligations and insurance policies.
The Company has undertaken number of projects in the last year and several more are in the pipeline. Contracts are often conditioned upon our performance, which, if unsatisfactory, could result in lower revenues than previously anticipated. Some of our long-term client contracts contain benchmarking provisions which, if triggered, could result in lower future revenues and profitability under the contract. Our increasing work with governmental agencies may expose us to additional risks. Any delay in project implementation can impact revenue and profit for that period. Our implementation schedules are in line with the plans. Emergency and contingency plans are in place to prevent or minimize business interruptions. Therefore, we do not expect this risk to affect us materially in the future. Concerns such as an unfavourable tax structure, infrastructure bottle-necks, retaining talent and unprecedented natural and man-made disasters and political/social turmoil which may affect our business, remain. However, these are threats faced by the entire industry. With superior methodologies and improved processes and systems, the Company is well positioned to lead a high growth path.
OPPORTUNITIES & THREATS
The Government has announced major initiatives to promote IT and ITeS sector in India.
The Government of Gujarat has signed 89 MoUs worth Rs 16,000 crore (USD 2.3 billion) in the IT sector, during Vibrant Gujarat Global Summit-2017.
The Railway Ministry plans to give a digital push to the India Railways by introducing bar-coded tickets, Global Positioning System (GPS) based information systems inside coaches, integration of all facilities dealing with ticketing issues, Wi-Fi facilities at the stations, super-fast long-route train service for unreserved passengers among other developments, which will help to increase the passenger traffic.
Government of India is planning to develop five incubation centres for IoT start-ups, as a part of Prime Minister Mr. Narendra Modis Digital India and Startup India campaign, with at least two centres to be set up in rural areas to develop solutions for smart agriculture.
The Government of India has launched the Digital India programme to provide several government services to the people using IT and to integrate the government departments and the people of India. The adoption of key technologies across sectors spurred by the Digital India Initiative could help boost Indias Gross Domestic Product (GDP) by USD 550 billion to USD 1 trillion by 2025.
India and the US have agreed to jointly explore opportunities for collaboration on implementing Indias ambitious Rs 1.13 trillion (USD 16.58 billion) Digital India Initiative.
We are confident that we can successfully procure and execute projects in a timely fashion as we have made adequate provisions to cover risks arising from our business activities. However, there are concerns such as a downturn in economic activity, change in the governments technology and digital policy, cancellation and delay in contracts, nonadherence to contract clauses by counter parties which may have a negative impact on our line of business which is beyond our immediate control.
INTERNAL CONTROL SYSTEMS AND ADEQUACY
Your Company have sufficient mechanism to ensure the effectiveness of the internal control system and their adequacy pertaining to financial reporting have disclosed to the auditors and the audit committee, deficiencies in the design or operation of such internal controls, if any, of which they are aware and the steps they have taken or propose to take to rectify these deficiencies. No significant change in internal control over financial reporting including accounting policies during the year under reference and that the same have been disclosed in the notes to the financial statements; Your Company had not encountered or been aware of any instance during the year of significant fraud of which have become aware and the involvement therein, if any, of the management or an employee having a significant role in the companys internal control system over financial reporting.
The Companys HR philosophy is to establish and build a high performing organization, where each individual is motivated to perform to the fullest capacity to contribute to developing and achieving individual excellence and departmental objectives and continuously improve performance to realize the full potential of our personnel.
During the year, your Company has witnessed significant expansion of business operation to build capabilities and align it with the strategy for future growth. The Companys operations are being handled by qualified and competent personnel. Our success depends largely upon our highly-skilled technology professionals and our ability to hire, attract, motivate, retain and train these personnel. The Company continued with its intensive training and development efforts to promote and develop a talent pipeline for the industry. Effective HRM is vital for the attainment of the Companys goals. The Company believes that employees are the heart of organization and they constitute the primary source of sustainable competitive advantage. Relations among all the employees of the Company remained cordial and harmonious.
As on March 31,2017, the Company had a workforce of 2170 people on rolls.
IT/ITES sector is one of the fastest growing sectors in the country and the government has taken various initiatives to promote further investments in the sector. Programs such as Digital India, Smart Cities, BharatNet, e-governance etc. are putting technology at the core of policy measures and catalysing growth for infrastructure services, user-support services and more integrated solutions.
This has been very encouraging for our industry. Your Company is focused towards reshaping portfolios to address changing market dynamics and achieving the strategic objectives. To make our overseas presence more impactful we will continue to enhance our investments in order to achieve a market leading position. Your Company is focused on strengthening infrastructure, improving operational excellence, implementing best practices, and enhancing network productivity.
The focus of the Company is to continue to deliver value to our clients; to contribute to the drive of the nation; give career & growth opportunities to our employees and grow profitability ultimately leading to maximization of shareholder value & return.
The financial statements have been prepared in compliance with the requirements of the Companies Act, 2013 and Generally Accepted Accounting Principles in India. Please refer Directors Report in this respect.
STATE OF COMPANYS AFFAIRS
M/s. FOURTH DIMENSION SOLUTIONS LIMITED
Your company is a CMMI level 5 company managed by experienced IT, Marketing and Administration Professionals. Your Company engaged in the business of IT and ITes related products and services.
Your company also empanelled in the various E-governance activities of Central Government and State Government. Your company expanding its business activities in very wide and diversified area i.e.:
IT Infrastructure Solutions & Services
? IT facilities management services
? e-governance activities
? AMC Services
? Data digitalization
? Professional Services entry level and high skilled resources in different technologies
? Implementation of configuration services for computing and network pieces
? Network & Security Optimization
? Server & Storage Consolidation
IT Procurement Service
? Hardware and Software
? IT-Products-sales, support & service
? Project and program management
? Printing Solution
? Manpower Outsourcing
? Document & Records Management Services
? Internet and web marketing
? Front & Back Office Operations
Business Segment Overview
Our business comprises of the IT Services and IT Products segments.
Product Wise Performance Our Business:
FDSL acknowledge itself for innovative approach, delivering IT management, support & consultancy services includes Operation, Infrastructure Management and Technologies Solution Services. We provide value to our customers by innovation, accomplishment, trust and long-term relationship through our unique service portfolio
and expertise. We are a group of highly talented people and absorb all problems and convert into meaningful solutions, to meet business requirements of clients.
What We Do
Switching and Routing
Data centre Build up and consulting
Storage and Server Consolidation
Internet and Data Security
IT Infrastructure Services
IT Facilities Management Services
Professional Services Entry level and higher skilled resources in different Technologies
Implementation of configuration services for Computing and Network pieces
Voice data video safety and security
Documents & Record Management
Document Life Cycle Management
Front and back office operation
As per the applicable provisions of Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a detailed Corporate Governance Report has been given in this Report is annexed as Annexure V. A certificate from auditors confirming compliance with the conditions of Corporate Governance as stipulated under Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is annexed as Annexure VI.
Good Governance & Management Practices
At FDSL, Corporate Governance is more than just adherence to the Statutory & Regulatory requirements. It is equally about focusing on voluntary practices that underlie the highest levels of transparency & propriety.
DEPRICIATION AND AMORTIZATION
The Company had followed WDV method on its assets the rates prescribed under the Part C of the Schedule II of the Companies Act, 2013, Intangible fixed assets stated at cost less accumulated amount of amortization.
The Company has a vigil mechanism for Directors and Employees to report their concerns about unethical behavior, actual or suspected fraud or violation of the companys Code of Conduct. The mechanism provides for adequate safeguards against victimization of Directors and employees who avail the mechanism. In exceptional cases, Directors and employees have direct access to the Chairman of the Audit Committee. However your Company being listed on SME Exchange - "NSE Emerge" is exempt under Regulation 22 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015
EVALUATION OF THE BOARDS PERFORMANCE
In compliance with the Companies Act, 2013 and Regulation 17(10) of SEBI (Listing Obligations and Disclosure Requirements), Regulations, 2015, Your Company being listed on SME Exchange - "NSE Emerge" is exempt under Regulation 17(10) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
RISK MANAGEMENT POLICY
The Company has business Risk Management framework to identify and evaluate business risks and opportunities. This framework seeks to create transparency, minimize adverse impact on its business objectives and enhance its competitive advantage. It defines the risk management approach across the Company and its subsidiary at various levels including the documentation and reporting. During the period under review, the Company has not identified any element of risk which may threaten its existence or are very minimal.
Your Company promote and adhere the highest level of ethical standards in the business transactions. The SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 mandated the formulation of certain policies for all listed companies. All our corporate governance policies are available on our website (http://fdsindia.co.in/policies.html). The policies are reviewed periodically by the Board and updated based on need and new compliance requirement.
DEMATERIALISATION OF SHARES
The shares of your Company are being traded in electronic form and the Company has established connectivity with both the depositories i.e. National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL). In view of the numerous advantages offered by the Depository system, Members are requested to avail the facility of dematerialization of shares with either of the Depositories as aforesaid. As on March 31,2017, 100.00% of the share capital stands dematerialized.
The equity shares of your Company are listed with the National Stock Exchange - SME Platform "EMERGE".
COMPANY CODE OF PRACTICES AND PROCEDURES FOR FAIR DISCLOSURE OF UNPUBLISHED PRICE SENSITIVE INFORMATION (UPSI)
The Board of Directors has adopted the Insider Trading Policy in accordance with the requirements of the SEBI (Prohibition of Insider Trading) Regulation, 2015. The Insider Trading Policy of the Company lays down guidelines and procedures to be followed, and disclosures to be made while dealing with shares of the Company, as well as the consequences of violation. The policy has been formulated to regulate, monitor and ensure reporting of deals by employees and to maintain the highest ethical standards of dealing in Company securities.
The Insider Trading Policy of the Company covering code of practices and procedures for fair disclosure of unpublished price sensitive information (UPSI), is available on our website (http://fdsindia.co.in/beta/docs/Regulation_8(Annexure%20 I)pdf)
CORPORATE SOCIAL RESPONSIBILITY
The Contribution of your Company during the year under Corporate Social Responsibility (CSR) initiatives is through a NGO "Presidium Educational & Charitable Trust" (PECT) registered Trust under the Trust Act, 1882 vide Registration No. 56 and is established on 16th January, 2012. Your Company is supporting the Projects "Education for All" of PECT on promoting education, art and culture and rural development projects. PECT through its project "Education for All" is constructing building and proving better infra for the education of children in Gurgaon, Haryana and Ghaziabad U.P. for better and advance education. The Project "Education for All" total outlay budget is Rs. 30,00,00,000/- and amount spent on the project is Rs. 11,50,00,000/- and Cumulative Expenditure up to the reporting period is Rs. 15,00,00,000/-
As per the Companies Act, 2013, all companies having a net worth of Rs. 500 crore or more, or a turnover of Rs. 1,000 crore or more or a net profit of Rs. 5 crore or more during any financial year are required to constitute a CSR committee of the Board of Directors comprising three or more directors, at least one of whom should be an independent director. All such companies are required to spend at least 2% of the average net profits of their three immediately preceding financial years on CSR-related activities.
Composition of Corporate Social Responsibility Committee
Mrs. Namita Mukherjee
Mr. Amalendu Mukherjee
Mr. Prashant Kumar Gupta
Accordingly, the Company was required to spend Rs. 36,50,000/- towards CSR activities, the requirement of fund on Project "Education for All" of PECT is in phase manner and during the year under review, the Company had contributed Rs. 20,00,000/- on Project "Education for All" under activities as specified in Schedule VII of the Companies Act, 2013. At the consolidated level, the total expenditure on CSR activities, as specified in Schedule VII of the Companies Act, 2013, was Rs. 20,00,000/-. The remaining amount will be spent in the next year. The annual report on our CSR activities is appended as Annexure VIII to the Boards report.
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013
The Company has in place a Sexual Harassment of woman at workplace (Prevention Prohibition and Redressal) Policy in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition and Redressal) Act, 2013. Internal Complaints Committee (ICC) has been set up at location/offices where the Company operates to redress complaints received regarding sexual harassment. All person including organizational non organizational (permanent, contractual, temporary, trainees) are covered under this policy.
Report of the committee in respect of Complaints received during the year under the year under the Prevention of Sexual Harassment at the Workplace Act, 2013 and Rules framed there under as per Section 21 of the Act:
Annual Report for the year under Section 21 of Prevention of Sexual Harassment at the Workplace Act of 2013.
|a. No. of Complaints received during the year:||NIL|
|b. No. of Complaints disposed off during the year:||NIL|
|c. No. of Cases pending for more than 90 days:||NIL|
AWARD AND RECOGNISITIONS
Your Companys strives to focus on customer delight and commitment towards customer satisfaction resulting in the few award and recognition recorded and received by your Company.
|SN AWARD AND RECOGNISITIONS||DATE|
|1 Your Company received certificate of ISO/IEC 20000-1:2011 vide Certificate No.: GACB1840||12.11.2014|
|2 Your Company received certificate from NSICL in relation to the Government Purchase Enlistment Certificate vide Registration No.: NSIC/GP/DEL/2014/0008386||29.10.2014|
|3 Your Company received certificate of registration as CMMI-DEV V.1.3, Maturity Level 5 vide Registration No.: QSA-1502373||07.02.2015|
|4 Your Company received certificate of ISO 14001:2015 vide Certificate No.: 1617/EMS/ CCXIX||13.07.2016|
|5 Your Company received certificate of ISO 27001:2013 vide Certificate No.: 1617/ISMS/ CCXVII||13.07.2016|
|6 "Honour of Excellence" Award for significant contribution to Indias self-reliance at the National Conference on Defence Production: Self Reliance and Beyond at New Delhi||14.12.2016|
|7 India Industry Trendsetter Award 2016 by the Power brand Global London International forum of Equality at the KIA Oval, UK||17.05.2017|
|8 Your Company received certificate of ISO 9001:2015 vide Certificate No.: 17DQBU19||19.07.2017|
|9 The Company has been ranked 66 among THE NEXT 500 Indias Top midsize Companies by Fortune India Magazine and ranked 1 in Infotech Segment Companies.||20.07.2017|
Your Company is committed to the principle of good Corporate Governance practices and it conducts its business and deals with its stakeholders in the same way. Your Companys Corporate Governance practices are aimed at having systems and procedures that ensure transparency, accountability and integrity which maintain an appropriate balance between the Directors and the Management. These practices include timely and accurate disclosure of information regarding the operational and financial performance of the Company to not only the investors, but also your Companys customers, creditors, employees and the society at large. Your Company strongly believes that adhering to such a high level of corporate governance practices go a long way in establishing the credibility of the Company and create significant long term value for all its stakeholders.
DIRECTORS RESPONSIBILITY STATEMENT
In accordance with the provisions of Section 134(3) (c) of the Companies Act, 2013, the Board of Directors affirm:-
a) that in the preparation of the annual accounts, the applicable accounting standards had been followed along with the proper explanation relating to material departure;
b) that the directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year 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 the 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;
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.
The Chairman proposed to the Board of Directors that the Auditors of the Company, M/s. Sain Kanwar & Associates, Chartered Accountants, (Firm Registration No. 018023N) would retire at the conclusion of the forthcoming Annual General Meeting of the Company and that the said firm of Statutory Auditors has confirmed that if reappointed, their appointment will be within the limits of Section 139 and 141 of the Companies Act, 2013. He further proposed that the members of the Company in their meeting should make the appointment of the auditors. The Board discussed and recommended the appointment of M/s. Sain Kanwar & Associates, Chartered Accountants, (Firm Registration No. 018023N) as Auditors of the to hold office from the conclusion of this Annual General Meeting (AGM) till the conclusion of the Eleventh Annual General Meeting of the Company to be held in the year 2022 and fixation of their remuneration by the shareholders at the forthcoming Annual General Meeting.
The Auditors Report for fiscal 2017 does not contain any qualification, reservation or adverse remark. The Auditors Report is enclosed with the financial statements in this Annual Report.
M/s. Atiuttam Singh & Associates, Practicing Company Secretaries, were appointed to conduct the secretarial audit of the Company for the financial year 2016-17, as required under section 204 of the Companies Act, 2013 and the rules thereunder. The secretarial audit report for the financial year 2016-17 forms the part of the Annual Report as Annexure IV to the Board Report. The Secretarial Audit report does not contain any qualification, reservation or adverse remark.
The Board has appointed M/s. Atiuttam Singh & Associates, Practising Company Secretaries, as Secretarial Auditor of the Company for fiscal 2018.
AUDITOR CERTIFICATE ON CORPORATE GOVERNANCE
As required by SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the auditors certificate on Corporate Governance is enclosed as Annexure VI to the Boards report. The auditors certificate for Financial Year 2016-17 does not contain any qualification, reservation or adverse remark.
The Cost Audit is not applicable to your Company.
ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO FINANCIAL STATEMENTS
The Company has in place adequate internal financial controls with reference to financial statements. The Board has adopted policies and procedures for ensuring the orderly and efficient conduct of its business, including adherence to the Companys 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.
During the year under review, such controls were tested and no reportable material weakness in the design or operation were observed.
DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS, COURTS AND TRIBUNALS
No significant and material order has been passed by the regulators, courts, tribunals impacting the going concern status and Companys operations in future.
PARTICULARS OF LOANS, GUARANTEES, SECURITIES OR INVESTMENTS UNDER SECTION 186
During the year your Company not provided loans and Investments as prescribed under section 186 of Companies Act, 2013 and Rules made thereunder.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
During the financial year under review no contract or arrangements were entered into by the Company with related parties referred to in sub-section (1) of Section 188 of the Companies Act and Regulation 23 of the SEBI (Listing Obligations Disclosure Requirements) Regulations 2015. Form AOC-2 attached with the Boards Report as Annexure III.
PARTICULARS OF EMPLOYEES
The ratio of remuneration of each director to the median of employees 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 forms part of the Boards report (Annexure VII).
A statement containing the names of every employee posted in India throughout the financial year and in receipt of a remuneration of Rs. 1 crore and 2 lakh or more, or posted for part of the year and in receipt of Rs. 8.5 lakh or more a month, under Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 forms part of the Boards Report (Annexure VII). The details of employees posted outside India can be made available on request.
In view of the tribute to the Mother Nature, we are publishing only the statutory disclosures in the printed version of the Annual Report. Electronic Copy of the Annual Report 2016-17 and Notice of the 6th Annual General Meeting are sent to the members whose email address are registered with the Company/ Depository Participant(s). For the members who have not registered their email address, physical copies are sent in the permitted mode.
Your Directors place on record their appreciation for the contributions made by employees towards the success of your Company. Your Directors gratefully acknowledge the co-operation and support received from the shareholders, customers, vendors, bankers, regulatory and Governmental authorities.
For and on Behalf of the Board of Directors
|Amalendu Mukherjee||Namita Mukherjee|
|Place: New Delhi||DIN:03544485||DIN:06561265|