Intrasoft Technologies Ltd Directors Report.
IntraSoft Technologies Limited
We are pleased to present the Twenty Fourth Annual Report of IntraSoft Technologies Limited ("the Company") together with the Audited Financial Statements for the financial year ended 31 March 2019.
Financial Statements & Results
a. Financial Results:
The consolidated and standalone performance during the year ended 31 March 2019 as compared to the previous financial year is summarized below:
Amount (Rs in Lakhs)
|Profit before Interest and Depreciation||986.07||2,414.36|
|Less: Finance Cost||497.95||264.33|
|Profit before Tax||311.93||1,954.46|
|Less : Provision for Income Tax||(254.52)||581.31|
|Profit after Tax||566.45||1,373.15|
On Standalone basis, Total Income of the Company recorded at Rs 1,376.80 Lacs in FY 2018-19 against Rs 1,533.53 Lacs in FY 2017-18. EBITDA is recorded at Rs 338.33 Lacs in FY 2018-19 against Rs 270.53 Lacs in FY 2017-18. PBT for the financial year under review is recorded at Rs 196.37 Lacs against Rs 119.90 Lacs in FY 2017-18. The net profit for the financial year under review is Rs 163.89 Lacs as compared to Rs 125.02 Lacs of the previous financial year.
The Company and its subsidiaries achieved an Operating Cash Flow of Rs 1,596.09 Lacs in FY 2018-19, as compared to H(5,456.14) Lacs in the previous financial year. Consolidated Total Income was Rs 84,151.60 Lacs, as compared to Rs 117,497.66 Lacs. Consolidated Net Profit was Rs 566.45 Lacs, as compared to Rs 1,373.15 Lacs.
The consistent cash flow performance is attributable to the changes that our E-Commerce division underwent this year. On the operational front, we used this year to incorporate all our data and learnings. The results being our Delivery Engine and Marketplace Expertise, which deliver strong value to our brand-partners.
On the financial front, we saw all this materialise into terms of trade that established our cash flow consistency, as we outperformed YoY across all four quarters. We saw an increase in Accounts Payable Days from 12.90 to 15.30. Long-term Debt fell from Rs 7,946.77 Lacs to Rs 6,937.63 Lacs.
We believe that this working capital efficiency would make growth sustainable in the coming years, and deliver strong value to you year after year.
There was no change in nature of the business of the Company, during the year under review.
c. Performance of Subsidiaries, Associates and Joint Venture Companies
The Company has, as on 31 March 2019, three wholly owned subsidiaries and two step down subsidiaries, viz. 123Greetings. com, Inc (USA), IntraSoft Ventures Pte. Ltd (Singapore) & One Two Three Greetings (India) Private Limited (India) wholly owned subsidiaries, 123Stores, Inc (USA), wholly owned subsidiary of IntraSoft Ventures Pte. Ltd (Singapore) and 123Stores E Commerce Private Limited (India), wholly owned subsidiary of 123Stores, Inc. The entire group focuses on the E-Commerce business by consolidating all operations related to E-Commerce and online greeting activities to achieve financial and operational efficiencies.
Apart from the information provided in the foregoing paragraph, there was no Companies which have become or ceased to be subsidiaries, associates and joint venture company during the financial year under review.
In accordance with Section 129 of the Companies Act, 2013, consolidated financial statements of the Company along with its subsidiaries have been prepared which forms part of this Annual Report. Further, the performance and financial position of each of the subsidiaries for the year ended 31 March 2019 is attached and marked as Annexure I (FormAOC-1) and forms part of this Report.
The Board of Directors of the Company has recommended a final dividend of Rs 2/- (20%) (previous year Rs 2/- per equity share) per equity share of face value of Rs 10/- for the financial year 2018-19, which if approved would absorb Rs 355.20 Lacs including dividend distribution tax of Rs 60.56 Lacs (Previous year Rs 355.20 Lacs including dividend distribution tax of Rs 60.56 Lacs ).
There was no Interim Dividend declared by the Company during the financial year.
Dividend Distribution policy is not applicable to the Company.
b. Amount and shares transferred to IEPF with details of Nodal officer
In terms of the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Second Amendment Rules, 2017 the Company has transferred 582 shares to the designated account of the IEPF Authority during the financial year 2018-19 on which the dividend was unclaimed/ unpaid for a period of seven (7) consecutive years from the year of its declaration in financial year 201011. Company had already transferred 4379 shares of different shareholders to IEPF Authority in the financial year 2017-18 , of the shareholders on whose shares the Dividend was unpaid/ unclaimed for a period of seven (7) consecutive years starting from the unpaid/unclaimed dividend of the Financial Year 2009-10 and also of the earlier years.
Details of the Nodal Officer:
Company Secretary and Compliance Officer
Email ID- firstname.lastname@example.org
Phone Nos. - 022 4004-0008
During the Financial year 2018-19, Unpaid / Unclaimed Dividend of Rs 51,648 was transferred to IEPF Account towards Interim Dividend (H30,596) and Final Dividend (H21,052) which was declared in the financial year 2010-11 and remained unpaid/unclaimed for 7 years.
c. Transfer to Reserves
The Board of Directors has not recommended transfer of any amount of profit to reserves during the year under review. Hence, the entire amount of profit for the year under review has been carried forward to Retained Earnings.
Financial Statements as per IND-AS.
Financial Statements for the year ended 31 March 2019 are in accordance with the Indian Accounting Standards (IND-AS) notified by the Ministry of Corporate Affairs, Government of India, which have already become applicable to the Company from the accounting period beginning on 01 April 2017.
During the year under review, there was no revision of financial statements pertaining to previous financial year.
The Company has not accepted or renewed any amount falling within the purview of provisions of Section 73 of the Companies Act 2013 ("the Act") read with the Companies (Acceptance of Deposits) Rules, 2014. Hence, the requirement for furnishing of details of deposits which are not in compliance with the Chapter V of the Act is not applicable.
Disclosures under Section 134(3)(l) of the Companies Act, 2013
Except as disclosed elsewhere in this report, no material changes and commitments which could affect the Companys financial position have occurred between the end of the financial year of the Company and the date of this report.
Disclosure of Internal Financial Controls
The Internal Financial Controls with reference to financial statements as designed and implemented by the Company are found adequate. During the year under review, no material or serious observation has been received on inefficiency or inadequacy of such controls, from the Internal Auditors of the Company.
Disclosure of Orders passed by Regulators or Courts or Tribunal
Your Directors would like to inform that no orders have been passed by any Regulator or Court or Tribunal which can have impact on the going concern status and on the Companys operations in future.
Particular of Contracts or Arrangement with Related Parties
All contracts / arrangements / transactions entered into by the Company during the financial year with its wholly owned subsidiaries were in the ordinary course of business and at an arms length basis. During the year, the Company had not entered into any contract / arrangement / transaction with related parties which could be considered as material related party transaction in accordance with the policy of the Company on related party transactions read with SEBI (Listing Obligations and Disclosure Requirement) Regulations, 2015. The Policy on related party transactions as approved by the Board may be accessed on the Companys website www.itlindia. com.
Your Directors draw attention of the members to Note no. 27 of Standalone financial statements which sets out disclosures on related parties and transactions entered into with the said parties.
Particulars of Loans, Guarantees, Investments and Securities
Full particulars of loans given, investments made, guarantees given and securities provided along with the purposes for which the loans or guarantees or securities are proposed to be utilized by the recipient(s) thereof are provided in Note nos. 6, 7, 8 and 25 of standalone financial statements.
During the year under review, the Company has not issued any shares with differential voting rights and sweat equity shares and hence, disclosures under Section 43(a)(ii) and Section 54(1)(d) of the Companies Act, 2013 read with relevant rules are not required to be furnished. The Company does not have a scheme of ESOP and hence disclosures pursuant to Section 67(3) of the Companies Act, 2013 are also not required to be furnished.
Matters Related to Directors and Key Managerial Personnel:
a. Board of Directors & Key Managerial Personnel
The term of appointment of Mrs. Savita Agarwal, Independent Director will come to an end on 29 June 2019 and term of appointment of Mr. Rupinder Singh and Mr. Anil Agarwal, Independent Directors will come to an end on 28 August 2019.
Mrs. Savita Agarwal, Mr. Rupinder and Mr. Anil Agarwal have given declaration to the Board that they meet with the criteria of independence as provided under Section 149 (6) of the Companies Act, 2013 and Regulation 16(1 )(b) of the SEBI (Listing Obligations and Disclosure Requirements) Regulation, 2015 (Listing Regulations) and amendments thereto. They have also confirmed that they are not disqualified from being re-appointed as Director in terms of Section 164 of the Act and have consented for such Re-appointments.
In the opinion of the Board, Mrs. Savita Agarwal, Mr. Rupinder Singh and Mr. Anil Agarwal fulfil the conditions specified in the Act, its rules framed thereunder and SEBI Listing Regulations, 2015 for re-appointment as Non-executive Independent Directors and they are independent of the management.
The Board of Directors at their Meeting held on 28 May 2019, as per the recommendation of the Nomination and Remuneration Committee of the Company, has approved their respective reappointment for a second consecutive term of a five (5) year, subject to the approval of the members of the Company in the ensuing Annual General Meeting of the Company, in the category of Independent Director of the Company (not liable to retire by rotation).
Brief profile and the information as required under the relevant provisions of the Act, Regulation 36 of the SEBI Listing Regulations and Secretarial Standards SS-2 are disclosed in the notice of the ensuing Annual General Meeting and forms part of the Annual Report.
In accordance with the provisions of the Act, none of the Independent Directors is liable to retire by rotation. Pursuant to the provisions of Section 152 of the Companies Act, 2013, Mr. Sharad Kajaria shall retire by rotation at the ensuing Annual General Meeting and being eligible, offer himself for reappointment. The Board recommends his appointment.
b. Declaration by Independent Directors
The Independent Directors of the Company have given a declaration confirming that they continue to meet with the criteria of the independence as provided in sub-section (6) of Section 149 of the Companies Act, 2013 as further amended by the Companies Amendment Act, 2017 and Regulation 16(1) (b) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and they have also confirmed that they are independent of the Management.
The Independent Directors also confirmed that they are not aware of any circumstances or situation, which exist or may be reasonably anticipated, that could impair or impact their ability to discharge their duties with an objective independent judgement and without any external influence.
There has been no change in the circumstances which may affect their status as Independent director during the year under review.
c. Companys Policy on Directors appointment and remuneration
The Board has as per the recommendation of the Nomination and Remuneration Committee, framed a policy on selection and appointment of Directors and Senior Managerial personnel and their remuneration which was further amended by the Board in their Meeting held on 30 March 2019 in terms of the Amendments in SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 . The details of said policy are given in the Corporate Governance Report which forms part of this Annual Report.
Disclosures Related to Board, Committees and Policies:
a. Board Meetings
The Board ofDirectors met 5 (Five) times during the financial year 2018-19 in accordance with the provisions of the Companies Act, 2013 and rules made thereunder. Detailed information on the Board Meetings is provided in the Corporate Governance Report which forms part of this Annual Report.
b. Directors Responsibility Statement
In terms of Section 134(5) of the Companies Act, 2013, in relation to the audited financial statements of the Company for the year ended 31 March 2019, the Board of Directors hereby confirms that:
i. in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures, if any;
ii. such accounting policies have been selected and applied consistently and the Directors 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 31 March 2019 and of the profit of the Company for that year;
iii. proper and sufficient care was taken for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
iv. the annual accounts of the Company have been prepared on a going concern basis;
v. internal financial controls have been laid down to be followed by the Company and that such internal financial controls are adequate and were operating effectively;
vi. proper systems have been devised to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
c. Committees of the Board
There are five Committees of the Board of Directors of the Company viz. Audit Committee, Nomination and Remuneration Committee, Stakeholders Relationship Committee, Corporate Social Responsibility Committee and Business Advisory Committee. Detailed information on all the Committees is provided in the Corporate Governance Report along with the details of extract from Nomination and Remuneration Policy of the Company with respect to remuneration of Executive Directors, Key Managerial Personnel and other senior employees of the Company. Policies framed by the Committees / Board pursuant to the applicable provisions of the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 are available on the Companys Website www.itlindia.com.
Disclosure in respect of composition of Committees, Committee Meetings held, attendance of members, Reference of the Committee and other related matters are made in the Corporate Governance Report attached and forms part of this Annual Report.
a. Vigil Mechanism Policy for the Directors and Employees
The Board of Directors of the Company have pursuant to the provisions of Section 178(9) of the Companies Act, 2013 read with Rule 7 of the Companies (Meetings of Board and its Powers) Rules, 2014, framed a "Vigil Mechanism Policy" for Directors and employees of the Company to provide a mechanism which ensures adequate safeguards to employees and Directors from any victimization on raising of concerns of any violations of legal or regulatory requirements, incorrect or misrepresentation of any, financial statements and reports, etc.
The employees of the Company have the right to report their concern/grievance to the Chairman of the Audit Committee.
The Company is committed to adhere to the highest standards of ethical, moral and legal conduct of business operations.
b. Risk Management Policy
The Board of Directors of the Company has designed Risk Management Policy and Guidelines to avoid events, situations or circumstances which may lead to negative consequences on the Companys businesses, and define a structured approach to manage uncertainty and to make use of these in their decision making pertaining to all business divisions and corporate functions. Key business risks and their mitigation are considered in the annual/strategic business plans and in periodic management reviews.
c. Policies and Procedures (Mechanism)
The Board of Directors of the Company has laid down policies and procedures in case of Leak of Unpublished price sensitive information or suspected leak of Unpublished price sensitive information in their Meeting held on 30 March 2019 in terms of the SEBI ( Prohibition of Insider Trading) (Amendment) Regulations, 2018.
Annual Evaluation of Directors, Committee and Board
The Board of Directors has carried out annual evaluation of its own performance, Committees of the Board and individual directors pursuant to the provisions of the Companies Act, 2013 and the Corporate Governance requirements as prescribed under Securities and Exchange Board of India (Listing Obligation and Disclosure Requirement) Regulations, 2015.
A statement indicating the manner for evaluation of performance of the Board, its committees and individual Directors is stated in the Corporate Governance Report forming part of this Annual Report.
Internal Control Systems
Adequate internal control systems commensurate with the nature of the Companys business, size and complexity of its operations are in place and have been operating satisfactorily. Internal control systems comprising of policies and procedures are designed to ensure reliability of financial reporting, timely feedback on achievement of operational and strategic goals, compliance with policies, procedure, applicable laws and regulations and that all assets and resources are acquired economically, used efficiently and adequately protected.
Payment of Remuneration / Commission to Directors from Holding or Subsidiary Companies
None of the managerial personnel i.e. Managing Director and Whole-time Director of the Company are in receipt of remuneration/ commission from the Subsidiary Companies of the Company.
Auditors and Reports:
The matters related to Auditors and their Reports for the year ended 31 March 2019 are as under:-
a. Report of Statutory Auditors on Accounts for the Year ended 31 March 2019:
The Report submitted by the Statutory Auditors for the financial year ended 31 March 2019 is free from any observations or qualifications.
b. Secretarial Audit Report:
Provisions of Section 204 read with Section 134(3) of the Companies Act, 2013, mandates, the Company to obtain a Secretarial Audit Report in the Form MR-3 from a Practicing
Company Secretary. M/s. Rathi and Associates, Company Secretaries had been appointed as Secretarial Auditors to issue Secretarial Audit Report for the financial year 2018-19.
Secretarial Audit Report issued by M/s. Rathi and Associates, Company Secretaries in Form MR-3 for the financial year 201819 forms part of this report as Annexure V.
Walker Chandiok & Co. LLP, Chartered Accountants (Firm Registration No. 001076N/N500013) were appointed as Statutory Auditors of the Company at the 21st Annual General Meeting held on 8 September 2016, for consecutive term of 5 (five) years to hold office up to the conclusion of the 26th Annual General Meeting of the Company. Companies Amendment Act, 2017, withdrawn the provisions related to ratification of the appointment of Auditors and accordingly no ratification of appointment of Statutory Auditors by members would be necessary.
d. Fraud Reporting:
During the year under review, there were no serious frauds being detected.
Copy of Annual Return 2018 and Extract of Annual Return 2019
Pursuant to the provisions of Section 134(3)(a) of the Companies Act, 2013, Extract of Annual Return in the prescribed format for the financial year ended 31 March 2019 is uploaded on the website of the Company and the link for the same is http://www.itlindia.com/ statutory.html. The Annual Return for the year ended 31 March 2018 in Schedule-V which was filed with the Registrar of the Companies is also uploaded on the Website of the Company and the link for the same is http://www.itlindia.com/statutory.html.
Conservation of Energy,Technology Absorption and Foreign Exchange Earnings and Outgo
The particulars as required under the provisions of Section 134(3) (m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 in respect of conservation of energy, technology absorption, foreign exchange earnings and outgo etc. are furnished in Annexure II which forms part of this Report.
Annual Report on Corporate Social Responsibility
Pursuant to Section 135 of the Companies Act, 2013 and Companies (Corporate Social Responsibility Policy) Rules, 2014, during the financial year under review, the Company was not required to spend any amount towards Corporate Social Responsibility activities.
Further, Annual Report on CSR as required to be disclosed under the above mentioned rules for the Financial Year 2018 -19 is attached to this report as Annexure III.
Particulars of Employees as per Section 197 read with Rule 5 of the Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014
The information required pursuant to Section 197 read with Rule 5 (1) and 5 (2) of the Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014 is attached to this report as Annexure IV.
The Managing Director and Whole time Director of the Company had not received any commission from the Company and also not received any remuneration or commission from its subsidiary company.
Compliance with Secretarial Standards
During the Financial year under review, in terms of Section 118 (1) of the Companies Act, 2013, the Company has observed and complied with the Secretarial Standards SS-1 and SS-2 on Board Meetings and Annual General Meeting specified by the Institute of Company Secretaries of India (ICSI).
Disclosures under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013
The Company has taken sufficient measures and adopted a policy in terms of The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and rules thereunder. During the year under review, no complaints in relation to sexual harassment at workplace have been reported.
Managements Discussion and Analysis
A detailed review of the operations, performance and future outlook of the Company and its business is given in the Managements Discussion and Analysis is attached and forms part of this Report.
Corporate Governance Report
The Company is committed to uphold the values of transparency, integrity, accountability and ethical corporate citizenship across all its business activities. This commitment lays down the foundation of its governance practices which focus on creating sustainable value for the stakeholders.
The Company has laid down Code of Conduct to which the board and senior management have affirmed compliance. The Code is displayed on the official website of the Company at www.itlindia . com.
The Company has complied with the provisions of Corporate Governance requirements, as stipulated under Regulation 27 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015. A separate section on Corporate Governance forming part of the Directors Report and the certificate from a Practicing Company Secretary pursuant to the said Regulation is attached with the Corporate Governance Report.
Acknowledgements and Appreciation
Your Directors take this opportunity to place on its gratitude to customers, shareholders, suppliers, bankers, business partners/ associates and financial institutions for their consistent support and encouragement to the Company.
|For and on behalf of the Board|
|Arvind Kajaria||Sharad Kajaria|
|Place: Kolkata||Managing Director||Whole-time Director|
|Date: 28 May 2019||(DIN 00106901)||(DIN 00108036)|