Prabhat Technologies (India) Ltd Directors Report.

Dear Members,

Your Directors are pleased to present the 12th Annual Report together with the Audited Statement of Accounts for the year ended 31st March, 2019. The Management Discussion & Analysis is also incorporated into this Report.

1) FINANCIAL RESULTS:

Summary of the Companys financial performance for F.Y. 2018-2019 as compared to the previous financial year is given below: (Figures in lakhs)

Particulars F.Y. 2018 – 2019 F.Y. 2017 – 2018 F.Y. 2018 – 2019 F.Y. 2017 – 2018
Standalone Standalone Consolidated Consolidated
Revenue from operations (Net) 12,185.50 27,751.03 13,043.10 29,135.88
Revenue from 196.96 399.02 196.96 399.02
Other Income
Total Revenue 12,382.46 28,150.05 13,240.06 29,534.90
Profit/Loss before -767.87 -1,558.48 -756.46 -1,528.86
Depreciation & Interest
Depreciation & Amortization 88.25 89.33 89.01 90.52
Interest Cost 110.34 271.73 110.38 271.94
Extraordinary Items Nil Nil Nil Nil
Profit/Loss After
Depreciation & Interest & Extraordinary Items -966.46 -1,919.54 -955.85 -1,891.32
Provision for Tax -563.21 45.14 -562.07 48.63
Profit After Tax -403.25 -1,964.68 -373.94 -1,939.95
EPS Basic -3.77 -22.02 -3.49 -21.74
EPS Diluted -3.77 -18.35 -3.49 -18.12

2) HIGHLIGHTS:

During the year under review, your company has reported a Consolidated Turnover of Rs. 13,240.06 Lakhs including other income. The Turnover of the Company has decreased because of stiff competition in the target markets and long duration taken for flow of working capital cycle in the telecom industry. The Company has incurred a loss in revenue due to recent changes in business environment and changes in tax regime.

3) SHARE CAPITAL:

The Paid Up Equity Capital as on March 31, 2019 was Rs. 10,70,62,770/-. The Shareholders had approved in the Extra Ordinary General Meeting held on 20th June, 2018, the Bonus issue of equity shares in the ratio of 1:5 of face value of Rs. 10/- and in the proportion of shares held by them on the record date to be decided by the Board and that such new shares, as when issued shall rank pari passu with the existing equity shares.

4) TRANSFER TO RESERVE AND SURPLUS:

There was no transfer to General Reserve and Surplus during the year ended March 31st, 2019.

5) NON ACCEPTANCE OF PUBLIC DEPOSITS:

The Company has not accepted any public deposits as defined under Section 73 (1) of the Companies Act, 2013 during the Financial Year 2018-19.

6) DIVIDEND:

With a view to strengthening the financial position of the company, your Board of Directors have not recommended any dividend for the financial year 2018-19. There are underlying shares for which dividend has remained unpaid or unclaimed for a consecutive period of seven years. Therefore, there is no transfer of the same to the Investor Education Protection Fund.

7) POLICIES ON DIRECTORS APPOINTMENT AND REMUNERATION:

The policies of the Company on Directors appointment and remuneration including criteria for determining qualifications, positive attributes, independence of a Director and other matters provided under sub-section (3) of Section 178 of the Act is appended as Annexure A to this Report.

8) PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186:

Details of investments covered under section 186 of the Companies Act, 2013 will be produced for verification to the members at the Registered Office of the company on their request.

9) DETAILS OF SUBSIDIARY/JOINT VENTURES/ASSOCIATE COMPANIES:

Name and address of the Company CIN / GLN Holding/ Subsidiary / Associate % of shareholding
1. Prabhat Telecoms Hong Kong Limited - Subsidiary 100%
2. Prabhatech Global Electronics Private Limited U32302MH2018PTC309377 Subsidiary 99.99%

A separate statement containing the salient features of the financial statement of the said subsidiary in "Form AOC-1" which is annexed as Annexure B.

10) DIRECTORS RESPONSIBILITY STATEMENT:

In accordance with the provisions of Section 134 (3) (c) of the Companies Act, 2013, and based on the information provided by management, your Directors state that:

1. In the preparation of the annual accounts for the financial year ended 31st March, 2019 the applicable accounting standards have been followed.

2. Accounting policies selected were applied consistently. Reasonable and prudent judgments and estimates were made so as to give a true and fair view of the State of affairs of the Company as on March 31st, 2019 and of the profit and loss of the Company for the year ended on that date.

3. Proper and sufficient care to the best of their knowledge and ability for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

4. The Annual Accounts of the Company have been prepared on going concern basis.

5. 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.

6. 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.

11) NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS:

The Board meets at regular intervals to discuss and decide on the companys policies and strategy apart from other Board matters. During the Financial year 2018-2019, Board meetings were held 16 times as follows; 21.05.2018,30.05.2018, 06.06.2018, 26.06.2018, 02.07.2018, 13.07.2018, 13.08.2018, 03.09.2018, 21.09.2018, 01.10.2019, 30.11.2019, 14.12.2019, 26.12.2018, 11.01.2019, 14.02.2019 and 27.02.2019.

12) BOARD COMMITTEES:

Your company has formed following Committees of the Board in accordance with Companies Act, 2013:

Audit Committee

The Audit Committee comprises Ms. Geeta Krishna Bhosle as Chairman, Mrs. Nidhi Prem Chand Dodhia and Mr. Vishwamani Tiwari as the members. The Committee is assigned role, powers and responsibilities as provided under Section 177 of the Companies Act, 2013.

Nomination and Remuneration Committee

The Nomination and Remuneration Committee comprises Mrs. Geeta Krishna Bhosle as Chairman, Mrs. Nidhi Prem Chand Dodhia and Mr. Alberto Zummo as the members. The Committee is formed for the purpose of recommending the Nomination and Remuneration and evaluation of the Directors performance.

Stakeholders Relationships Committee

The Stakeholders Relationships Committee comprises Ms. Geeta Krishna Bhosle as Chairman, Ms. Nutan Singh and Mr. Parag Malde as the members.

13) POSTAL BALLOT:

During the year 2018-19 the Postal Ballot was conducted twice.

First Instance of Postal Ballot: -

During the year, members of the Company have approved the resolutions, stated in the below table by requisite majority, by means of Postal Ballot, including Electronic Voting (e-voting). The Postal Ballot Notice dated 13th July, 2018 along with the Postal Ballot Form was sent in the electronic form to the members whose email addresses were registered with the Company / respective Depository Participants. In case of physical shareholding, copies of the Postal Ballot Notice along with Postal Ballot Form were sent in physical, by permitted mode along with self-addressed postage pre-paid Business Reply Envelope.

The Company has appointed Jaya Sharma & Associates., Practicing Company Secretary, as Scrutinizer for conducting the Postal Ballot thereto in accordance with the provisions of the Act. M/s. Budgujar & Co., (Practicing Company Secretary), had submitted his report on the Postal Ballot to the Chairman on 16th August, 2018.

The details of the voting pattern are given below:

Resolutions passed through Postal Ballot Votes in favor of the resolution (%) Votes against the resolution (%)
Migration of Company from BSE SME Exchange to the Main Board Platform of BSE Limited 100 Nil

Second Instance of Postal Ballot: -

During the year, members of the Company have approved the resolutions, stated in the below table by requisite majority, by means of Postal Ballot, including Electronic Voting (e-voting). The Postal Ballot Notice dated 27thFebruary, 2019 along with the Postal Ballot Form was sent in the electronic form to the members whose email addresses were registered with the Company / respective Depository Participants. In case of physical shareholding, copies of the Postal Ballot Notice along with Postal Ballot Form were sent in physical, by permitted mode along with self-addressed postage pre-paid Business Reply Envelope.

The Company had appointed Ms. Riddhi Shah, Practicing Company Secretary, as Scrutinizer for conducting the Postal Ballot thereto in accordance with the provisions of the Act. Ms. Riddhi Shah, had submitted her report on the Postal Ballot to the Chairman on 02ndApril, 2019. The resolution was passed on Monday, 1stApril, 2019.

The details of the voting pattern are given below:

Resolutions passed through Postal Ballot Votes in favour of the resolution (%) Votes against the resolution (%)
Change of name of the Company & Alteration of MOA & AOA 100 Nil
Appointment of M/s. Harish Arora & Associates, Chartered Accountant (Form No. 015226C) Statutory Auditors to fill the casual vacancy 100 Nil

14) CORPORATE SOCIAL RESPONSIBILITY [CSR]:

The provisions of the CSR expenditure and Composition of Committee, as provided in the Section 135 of the Companies Act, 2013, are not applicable to the company.

15) STATUTORY AUDITORS:

M/s. Harish Arora & Associates (FRN: 015226C), Chartered Accountants, were appointed as Statutory Auditors from the conclusion of the 12thAnnual General Meeting till the conclusion of 17th Annual General Meeting of the company subject to ratification at every AGM during the continuation of their tenure.

16) INTERNAL AUDITORS:

During the year, Company has appointed M/s. Bharat J. Rughani & Co. as an Internal Auditor for the Financial Year 2018-19 to conduct Internal Audit on such terms and conditions as decided mutually.

17) AUDITORS REPORT:

The Observations made in the Auditors Report are self-explanatory and therefore do not call for any further comments under Section 134(3) of the Companies Act, 2013.

18) COMMENTS ON AUDITORS REPORT:

There is a qualified Opinion made by M/s. Harish Arora & Associates., Statutory Auditors, in their Audit Report.

The reply of the management is as below:

The management is of the view that the qualification made by the auditor has no implications on earning capacity or profitability of the Company. The qualifications are procedural in nature and which are the internal procedure / matter and can be managed. External Confirmation of Balances of sundry debtors and creditors are in process and management is assured of the amount stated in books are actually receivable and payable. Therefore, no provision is required on account of non-confirmations as Management is quite confident that all the debtors/creditors are considered good and do not require any provision.

19) INTERNAL CONTROL AND ITS ADEQUACY:

The Company has a well-placed, proper and adequate internal financial control system which ensures that all assets are safeguarded and protected and that the transactions are authorized recorded and reported correctly. The Companys internal financial control system also comprises due compliances with Companys policies and Standard Operating Procedures (SOPs) and audit and compliance by in-house Internal Audit Division, supplemented by internal audit checks from Independent Internal Auditors of the Company.

20) PREVENTION OF INSIDER TRADING:

The Company has adopted a Code of Conduct for Prevention of Insider Trading with a view to regulate trading in securities by the Directors and designated employees of the Company. The Code requires preclearance for dealing in the Companys shares and prohibits the purchase or sale of Company shares by the Directors and the designated employees while in possession of unpublished price sensitive information in relation to the Company and during the period when the Trading Window is closed. The Board is responsible for implementation of the Code. All Board of Directors and the designated employees have confirmed compliance with the Code.

21) EXTRACT OF ANNUAL RETURN:

Pursuant to the requirements under Section 92(3) read with Rule 12(1) of Companies (Management and Administration) Rules, 2014, an extract of Annual Return in prescribed Form MGT-9 is given in the Report as Annexure C.

22) MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL POSITION OF THE COMPANY WHICH HAVE OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR OF THE COMPANY TO WHICH THE FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT

There have been no material changes that have occurred subsequent to the close of the financial year of the company to which the balance sheet relates and the date of the report.

23) DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANYS OPERATIONS IN FUTURE.

There has been no material order passed by the regulators or courts or tribunals impacting the going concern status and companys operations in future.

24) RISK MANAGEMENT AND INTERNAL CONTROLS:

The Company has the risk management and internal control framework in place commensurate with the size of the Company. However Company is trying to strengthen the same. The details of the risks faced by the Company and the mitigation thereof are discussed in detail in the Management Discussion and Analysis report that forms part of the Annual Report.

25) CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION:

Conservation of Energy

The company has taken various in –house measures to conserve the electricity and energy.

Technology Absorption

Technology absorption and innovation is a continuous process in the company.

Foreign Exchange:

The foreign exchange earnings and foreign exchange outgo by the Company during the year are:

Earnings: Nil

Outgo : Rs. 1,66,45,000 /-

26) POLICY FOR PREVENTION, PROHIBITION AND REDRESSAL OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE:

The company has framed policy and Constituted Internal Complaints Committees for Redressal of Sexual Harassment in accordance with Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

During the financial year 2018-19, no cases in the nature of sexual harassment were reported at any workplace of the company.

The POSH committee consists of the following members- a. Dipti More b. Meghana Kashte c. Jaisy Shiju d. Dr. Yogesh Dubey.

27) DIRECTORS:

A. CHANGES IN DIRECTORS AND KEY MANAGERIAL PERSONNEL:

Ms. Nutan Singh was appointed as Additional Executive Whole-time Woman Director w.e.f 21st September, 2018.

Mrs. Nidhi Prem Chand Dodhia was appointed as an Additional Independent Director w.e.f. 11thJanuary, 2019.

Ms. Geeta Bhosle was appointed as an Additional Independent Director w.e.f. 06thMay, 2019.

Ms. Meghana Ekanath Kashte was appointed as the Company Secretary and Compliance Officer w.e.f 14th February, 2019.

Mr. Lijo Varghese resigned from the post of the Company Secretary and Compliance Officer w.e.f 11th January, 2019.

Ms. Dipti Yelve resigned from the post of the Director w.e.f 03th November, 2018.

Mr. Vaibhav Shastri resigned from the post of the Company Secretary and Compliance Officer w.e.f 28th February, 2019.

Mr. Arvind Singh resigned from the post of the Company Secretary and Compliance Officer w.e.f 21st September, 2018.

Except as above, there was no other change that took place in the positions of directors and KMPs in the Company.

B.DECLARATION BY INDEPENDENT DIRECTOR:

The Company has received necessary declaration from each Independent Director of the Company under Section 149(7) of the Companies Act, 2013 that the Independent Directors of the Company meet with the criteria of their Independence laid down in Section 149(6). (Annexure F)

C. FORMAL ANNUAL EVALUATION:

The Nomination & Remuneration Committee (hereinafter known as ‘NRC) had formulated policy (approved by the board) on performance evaluation of the whole board, its committees, individual directors and KMPs. As per the Policy, performance evaluation of:

Independent directors has been done by the whole board excluding the director being evaluated and submit its report to NRC;

Non-Independent directors including chairman has been done by independent directors and submit its report to NRC;

Committees of the board and KMPs have been done by the board of directors and submit its report to NRC.

NRC reviews the reports of the Independent Directors and Board and accordingly, recommends the appointment/re-appointment/continuation of Directors to the Board. Based on the recommendation of NRC, Board will take the appropriate action.

28) PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES:

All contracts/arrangements/transactions entered by the Company during the financial year with related parties were in ordinary course of business and on arms length basis. During the year, the Company had not entered into any contract/arrangement/ transaction with related parties which could be considered material under Regulation 23 of Listing Regulations. Accordingly, the disclosure of Related Party Transactions as required under Section 134(3)(h) of the Companies Act, 2013 in Form No. AOC - 2 is not applicable.

29) SECRETARIAL AUDIT REPORT:

The Board has appointed Jaya Sharma & Associates, Practicing Company Secretaries as Secretarial Auditor pursuant to the provisions of Section 204 of the Companies Act, 2013. The Report of the Secretarial Auditor is annexed to the Report as per Annexure D.

30) VIGIL MECHANISM / WHISTLE BLOWER POLICY:

The Company has established vigil mechanism for directors and employees to report genuine concerns of fraud & misconduct in the company and the vigil policy is uploaded on the website of the company www.prabhatgroup.net.

31) MANAGEMENT DISCUSSION AND ANALYSIS REPORT:

The Management Discussion and Analysis Report covering a wide range of issues relating to Industry Trends, Company Performance, SWOT analysis, Corporate Process, Business Outlook among others is annexed to this Report in Annexure E for the year ended March 31st, 2019.

32) COST RECORDS AND COST AUDIT

Maintenance of cost records and requirement of cost audit as prescribed under the provisions of Section 148 (1) of the Companies Act, 2013 are not applicable for the business activities carried out by the Company.

33) NUMBER OF MEETINGS OF THE BOARD AND COMMITTEES

The details of the number of meetings of the Board held during the Financial Year 2018-19 forms part of the Corporate Governance Report.

33) OTHER DETAILS:

No Change in the nature of the business of the company during the year;

Process undertaken to change the name of the company during the year –

The Shareholders of the Company gave their approval by postal ballot dated 27 February, 2019 to change the name of the Company to Prabhat Technologies (India) Limited, so as to widen the business activities of the Company and have a strong position in the market. to utilize & explore its resources and Business opportunities to the fullest and achieve maximum growth. However, the Certificate of Incorporation with the new name is yet to be received.

34) ACKNOWLEDGEMENT:

The Board of Directors wishes to express sincere thanks to Members, Bankers, Clients, Financial Institutions, Customers, Suppliers and Employees of Companies for extending support during the year. Your Directors express their deep sense of appreciation towards all the employees and staff of the company and wish the management all the best for achieving greater heights in the future.

For and On behalf of the Board

PRABHAT TELECOMS (INDIA) LIMITED

SD/-

Mr. Vishwamani Tiwari

Chairman & Managing Director DIN: 01932624

Date: May 30, 2019 Place: Mumbai