Today's Top Gainer
Note:Top Gainer - Nifty 50 More
Your Directors are pleased to present the Thirtieth Annual Report on the Business and Operations of HOV Services Limited (the "Company" or "HOVS") together with the Audited Financial Statements for the financial year ended March 31, 2018.
The financial statements were prepared in accordance with the Indian Accounting Standards (IND AS) as notified by the Ministry of Corporate Affairs applicable to the Company effective from April 1, 2017, transition date being April 1, 2016. The Company has followed guidance prescribed in IND AS 101 i.e. Firsttime adoptionof Indian Accounting Standards for the impact of transition.
FINANICAL RESULTS AND OPERATIONS:
Rs. In Lakhs
|For the year ended on March 31, 2018||For the year ended on March31, 2017||For the year ended on March31, 2018||For the year ended on March31, 2017|
|Income from Operation||1359.95||1543.21||1254.55||1364.51|
|General and Administrative Expenses||428.02||529.46||269.12||284.88|
|Profit/ (Loss) before Interest, Depreciation and Tax||440.29||108.70||206.85||189.93|
|Profit/(Loss) before Exceptional items||308.25||(38.97)||197.09||172.01|
|Profit/(Loss) Before Tax||307.87||(38.97)||(825.63)||172.01|
|Less: Provisions for taxes|
|Profit/(Loss) after Tax||237.82||(97.94)||(883.70)||113.04|
|Share of (Loss) from an Associate||-||(14457.91)||-||-|
|Profit/(Loss) for the year||237.82||(14555.85)||(883.70)||113.04|
|Other Comprehensive Income Items that will not be reclassified subsequently to Profit or Loss||61011.50||3.05||1.23||3.05|
|Total Comprehensive Income for the year||61249.32||(14552.80)||(882.47)||116.09|
1. Results of Operations
For the financial year ended March 31, 2018 as follows:- Consolidated Financial Performance:
Consolidated total Income for the current year was Rs.1780.27 Lakhs.
EBIDT for the current year was Rs.440.29 Lakhs.
Net Profit for the year was Rs.237.82 Lakhs.
Total Comprehensive Income for the year was Rs.61249.32 Lakhs.
The basic and diluted Earnings Per Share (EPS) for the year was Rs.1.90.
Standalone Financial Performance:
Total Income for the current year was Rs.1360.86 Lakhs.
EBIDT for the current year was Rs.206.85 Lakhs.
Exceptional Loss for the current year was Rs.1022.72 Lakhs.
Net Loss for the year was Rs.883.70 Lakhs.
Total Comprehensive Income for the current year was Rs.(882.46) Lakhs.
The basic and diluted Earnings Per Share (EPS) as under:
-EPS Before exceptional item Rs.1.11
- EPS After exceptional item Rs.(7.05)
Your Company intends to conserve available resources to invest in the growth of the business and pursue strategic growth opportunities, accordingly did not recommend any dividend for the year.
(ii) Transfer to Reserve:
No amount was transferred to Reserve during the financial year ended on March 31, 2018.
3. Subsidiary companies
i) HOVS LLC incorporated in Delaware under the laws of Unites States of America;
ii) HOV Environment LLC incorporated in Nevada State under the laws of United States of America;
iii) HOVS Holdings Limited incorporated under the Companies Ordinance of Hong Kong; and
iv) HOV Environment Solutions Private Limited incorporated in Maharashtra under Indian Company Laws. A report on the performance and financial position of Subsidiaries as per the Companies Act, 2013 is annexed in the financial statements.
4. Significant developments- Investment
As part of SourceHOV Business Combination which got completed on July 12, 2017, the Companys wholly owned subsidiary HOVS LLC as of March 31, 2018 received 31,390,646 common shares in Exela Technologies, Inc., through Ex-Sigma LLC a special purpose vehicle formed for SourceHOV Business Combination. The percentage of investment held by HOVS LLC in Exela Technologies, Inc., as of March 31, 2018 is 19.983% and therefore as per IND-AS, the investment has been accounted as Financial Instrument, i.e. FVOCI Equity Instruments. For details refer Note No. 5 of Consolidated Financial statements.
The shareholders in their Annual General Meeting dated July 21, 2007 granted approval for proposed 15,000,000 of ADR/GDR issue. However, so far none of the underlying equity shares were issued by the Company.
6. Share Capital of the Company
During the financial year, the Company had allotted 3,200 equity shares under ESOP Plans 2007. Consequently, after the allotment, the paid up share capital of the Company has gone up from 12,532,522 equity shares of Rs.10/- aggregating to Rs.125,325,220/- to equity shares 12,535,722 of Rs.10 aggregating to Rs.125,357,220/-.
7. Employee Stock Option Plan (ESOP)
Your Company instituted "HOVS Stock Option Plan 2007" for its employees and for employees of its subsidiary companies as detailed below:
|Plan||Shareholders Approval Date||No.of Options for employees of the Company||No.of Options for employees of subsidiary companies||Total|
|"HOVS Stock Option Plan 2007"||July 21, 2007||400,000||700,000||1,100,000|
The information to be disclosed as per SEBI (Employees Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999, is provided herewith as "ANNEXURE- A" to this report.
8. Conservation of Energy, Technology Absorption and Foreign Exchange
The information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 13 (3) (m) of the Companies Act, 2013 read with Rule 8 of The Companies (Accounts) Rules, 2014, is provided herewith as "ANNEXURE- B" to this report.
9. Human Resources
During the year the Company had maintained cordial relations with all its employees and has taken utmost care of its employees deployed.
The Company has no employees who received remuneration in excess of limits prescribed Under Section 197 of the Companies Act, 2013 read with the Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014.
10. Particular of Employees and Related Disclosures
Disclosure as per Section 197 (12) of the Companies Act, 2013 and Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is provided herewith as "ANNEXURE- C" to this report.
11. Directors Responsibility Statement
Information as per Section 134 (5) of the Companies Act, 2013 is provided herewith as "ANNEXURE- D" to this report.
12. Financial Summary and Highlights
The financial summary and highlights are presented under the Management Discussion and Analysis Report.
13. Board Meetings
During the financial year 4 (Four) Board Meetings were held the details of which are given in the Corporate Governance Report.
14. Directors and Key Managerial Personnel
Mr. Vikram Negi Executive Director is liable to retire by rotation at the 30th Annual General Meeting. Mr. Negi has confirmed his eligibility and willingness for re-appointment. Mr. Negi has requisite qualifications and experience and therefore, your Directors recommend that the proposed resolution relating to the re-appointment of Mr. Negi, be passed.
Mr. Rohit Jain, was appointed as an additional director effective September 1, 2017 by the Board of Directors and in terms of Section 161 of the Act 2013, he holds office until the date of ensuing Annual General Meeting. The Nomination and Remuneration Committee in its meeting held on May 29, 2018 had recommended for his appointment as an Independent Director, subject to the approval from shareholders at their ensuing 30th Annual General Meeting.
Mr. Nilesh Bafna was appointed as the Chief Financial Officer of the Company with effect from September 1, 2017 by the Board of Directors in their meeting held on August 31, 2017.
15. Declarations from Independent Directors
The Company has received declarations from all the Independent Directors confirming for meeting the criteria of independence as required under Section 149(7) of the Companies Act, 2013.
16. Meeting of Independent Directors
The meeting of Independent Directors was held on February 12, 2018 to review the performance of the Board as a whole, its committees, non-independent directors, independent directors and the Chairman of the Company and assessed the quality, quantity and timeliness of flow of information between the Company management and the Board that is necessary for the Board to effectively and reasonably perform their duties. The independent directors expressed satisfaction on the quality, quantity and timeliness of flow of information between the management and the Board.
The familiarisation program was arranged by the Company on February 12, 2018 for Independent Directors. The details of the familiarisation program was disclosed under Investor Relations section of the Companys website www.hovsltd.com.
17. Performance Evaluation
The performance evaluation of Board, its Committees, Independent Directors, Non-independent directors and including Chairman of the Board was carried out during the year considering parameters as set by the members of the Board.
The evaluation of the Board and its Committees was carried out through a structured evaluation process covering various aspects of the Boards functioning and having well defined Committees and each Committee having co-operative working environment with the Board.
The evaluation of Chairperson was carried out by independent directors on criteria of leadership, promotes participation among all members and ability to manage conflicting situations positively.
The evaluation of the independent directors by all board members was carried out based on the criteria of efforts undertaken by them, brings independent view point in discussion and awareness of their roles and responsibilities.
18. Internal Financial Controls
The Company has adequate procedures for ensuring the internal financial controls and the same are in place with reference to financial statements. The internal control system is reviewed by the Audit Committee with the management and Internal Auditors of the Company.
19. Related Party Transactions
The transactions entered by the Company with related parties are in ordinary course of business and at arms length basis. The particulars of transactions entered with related parties is provided herewith as "ANNEXURE- E" to this report.
20. Corporate Governance Report
The report on Corporate Governance is annexed as the part of the Directors report.
21. Management Discussion and Analysis
Management Discussion and Analysis Report for the year under review, as stipulated under Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 is presented as a separate section forming part of the Directors report.
22. Code of Conduct for Board and Senior Management
The Company has adopted Code of Conduct for the Directors and Senior Management and is available on the Companys website http://hovsltd.com/code of conduct.html. All Directors and Senior Management personnel have affirmed their compliance with the said Code. A declaration signed by the Whole-time Director to this effect is annexed as part of the Directors Report.
23. Auditors and Auditors Report Statutory Auditors:
M/s BAGARIA & Co., Chartered Accountants were appointed as Statutory Auditors for a period of 5 years, in 29th Annual General Meeting held on September 1, 2017 till the conclusion of the 34th AGM to be held in year 2022.
The Statutory Auditors Report for FY 2017-18 does not contain any qualification, reservation or adverse remark.
Secretarial Audit Report:
M/s. J B Bhave & Co., Practicing Company Secretaries, Pune for conducting secretarial audit, the Secretarial Audit Report for FY 2017-18 is provided herewith as "ANNEXURE- F" to this report.The Secretarial Auditors Report does not contain any qualification, reservation or adverse remark.
During the year under review, there were no instances of frauds committed in the Company by its officers or employees, which requires reporting by the Statutory Auditors and the Secretarial Auditor.
24. Extract of Annual Return
Extract of Annual Return is provided herewith as "ANNEXURE- G" to this report.
25. Committees of the Board
The Company has constituted the Audit Committee; Nomination and Remuneration Committee; Stakeholders Relationship Committee. The details of all the committee are disclosed in the Corporate Governance Report. The Board accepts all the recommendations of the Audit Committee.
The Nomination & Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management and their remuneration. The nomination and remuneration policy has been provided as "Annexure H" forming a part of this report.
26. Particulars of Loans, Advances and Investments
The particulars as required pursuant to Section 186 (4) of the Companies Act , 2013, read with Companies (Meetings of Board and its Powers) Rules, 2014 and pursuant to Regulation 34(3) and Schedule V Part A of SEBI LODR, 2015, the full particulars are mentioned in the Notes to Account to the Financial Statements.
The particulars of loans are mentioned in Note No. 6 of Standalone Notes to Accounts; the particulars of Guarantees are mentioned in Note No. 13 & 12 respectively of Standalone and Consolidated Notes to Accounts; and the particulars of Investment are mentioned in Note No. 5 of both Consolidated and Standalone Notes to Accounts.
27. Compliance with Secretarial Standards
The Secretarial Standards issued by the Institute of Company Secretaries of India, as applicable to the Company, have been complied with.
28. Whistle Blower Policy
The Vigil Mechanism/Whistle Blower Policy is adopted, in order to establish a mechanism for directors and employees to report genuine concerns or grievances about unethical behaviour, actual or suspected frauds or violation of the Companys Code of Conduct. The Policy provides for commitment to the highest possible standards of ethical, moral and legal business conduct and its commitment to open communication and has provisions for direct access to the Chairperson of the Audit Committee in appropriate and exceptional cases.
During the year there was no instances reported under the Policy.
a. The statement relating to risk management policy and identification of risk elements are covered under Management Discussion Analysis Report as annexed with this Report.
b. On following points no reporting or disclosure is required as there were no transactionson during the financial year under review:
i. There was no loan, guarantees and investment made;
ii. Details relating to deposits covered under Chapter V of the Companies Act, 2013;
iii. No significant and material orders passed by the regulators or courts or tribunals which impacted the going concern status and operation of the Company;
iv. Issue of equity shares with differential rights as to dividend, voting or otherwise;
v. Issue of sweat equity shares; and
vi. None of the whole-time directors of the Company received any remuneration or commission from the subsidiaries of the Company.
Your Directors place on record their appreciation for co-operation and support received from the Government of India, Government of Maharashtra, Reserve Bank of India, Software Technology Parks of India, Registrar of Companies, Pune, other local governmental bodies, NASSCOM, the National Stock Exchange, the Bombay Stock Exchange, Bankers of the Company and Shareholders during the financial year.
Your Directors thanks the investors and shareholders for placing faith in the Company.
Your Directors express their sincere appreciation for the contributions made by employees at all levels in your Company for their hard work, co-operation and support.
For and on behalf of the Board of Directors
Chairman & Executive Director
Date: May 29, 2018