Zigma Software Ltd Directors Report

Your Directors have pleasure in presenting their 23rd Annual Report on the operation of the Company together with and Audited Accounts for the financial year ended 31st March, 2012.

FINANCIAL RESULTS:

Rupees in Lakhs

	2011-2012	2010-2011
Gross Income	30.81	144.61
Total Expenditure	30.60	79.40
Gross Profit	0.21	65.21
Interest	0.09	0.41
Depreciation	40.24	63.76
Profit Before Taxation	(40.11)	1.04
Provision for Tax	0.00	0.40
Profit After Tax	(40.11)	0.64
Balance B/F from previous year	24.45	23.81
Profit Available for Appropriation	(15.66)	24.45
Paid-up Equity Capital	4176.00	4176.00
Reserve & Surplus	3518.34	3572.46

REVIEW OF OPERATIONS:

The performance of your Company during the year has not been satisfactory due to slow down of economy in the recent past, though the global/domestic economy has been back on the path of development, your Company could not come over the crisis and it is still facing stiff competition in the domestic market, consequently the sales and profitability of the Company has been dropped during the year under review in comparison to previous year.

There are some positives, which are expected to help your Company to improve its turnover and profitability. The Company has undertaken several consultancies and IT enabled services and also expanded its business in the field of biotech and real estate to ensure future growth of the Company.

DIVIDEND:

Due to loss in the year under review, your Directors regret their inability to recommend dividend for the year ended 31st March, 2012.

CHANGE OF REGISTERED OFFICE:

The situation of the Registered Office of the Company has been shifted from Centre Point, 21, H.B. Sarani, 4th floor, Kolkata-700 001 to P-113, Kalindi Housing Estate, Ground Floor, P.S.: Lake Town, Kolkata -700089 with effect from 1st July, 2011.

ACCOUNTING POLICIES:

The major accounting policies of the Company are annexed to the Accounts.

PERSONNEL:

There are no employees in the Company who are in receipt of salary of Rs. 60,00,000/- p.a. or Rs. 5,00,000/- p.m., if employed for part of the year. Hence the Statement of particulars of employees as required under Section 217 (2A) of the Companies Act, 1956, read with Companies (Particulars of Employees) Rules, 1975, as amended till date is not attached.

PARTICULARS OF CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION:

The Company being engaged in the business of Consultancy and Information & Technology, the Directors have nothing to report in compliance with the provisions of Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of particulars in the Report of Board of Directors) Rules, 1988.

FIXED DEPOSITS:

During the year under review the Company has neither invited nor received any deposit from the Public.

CORPORATE GOVERNANCE:

A Management Discussion and Analysis Report forms part of this report. A separate report on Corporate Governance is also included as a part of the Annual Report. A certificate from the Auditors of the Company regarding compliance of conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement is also attached to this Annual Report.

A Code of Conduct, as applicable to the Board Members and Senior Management personnel has been adopted and is practiced and has been put on the website of the Company.

STATUTORY DISCLOSURES:

None of the Directors of the Company are disqualified as per the provisions of Section 274(1) (g) of the Companies Act, 1956.

DIRECTORS:

Shri Neeraj Sachan retires from the Board by rotation at the ensuing Annual General Meeting and offers himself for reappointment.

DIRECTOR’S RESPONSIBILITY:

Pursuant to Section 217 (2AA) of the Companies Act, 1956 the Directors confirm that:

(i) in the preparation of the annual accounts, the applicable accounting standards have been followed with proper explanation relating to material departures;

(ii) appropriate accounting policies have been selected 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 the affairs of the Company as at 31st March, 2012 and of the Loss of the Company for the said period;

(iii) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safe guarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(iv) the annual accounts have been prepared on a going concern basis.

AUDITORS:

Messrs. Bijan Ghosh & Associates, Chartered Accountants retire at the conclusion of the ensuing Annual General Meeting and offer themselves for re-appointment for the year ending 31st March, 2013.

AUDITORS REPORT:

The observation made in the Auditors Report read with the Notes on the Accounts are self explanatory and do not require any further clarification.

ACKNOWLEDGEMENT:

Your Directors would like to place on record their appreciation of the support and assistance received from the Central and State Governments of Karnataka, Maharashtra and Bankers.

Your Directors are thankful to the esteemed customers for their continued support. The Directors wish to record their deep appreciation of the hard work, dedication and enthusiastic support by all the employees for the commendable performance of the Company and also thank the shareholders for their unstinted support to the Company.

	On behalf of the Board
	P. Singhi, Whole time Director
Kolkata, 13th August, 2012.	N. Sachan, Director

ANNEXURE TO DIRECTORS’ REPORT

MANAGEMENT DISCUSSION AND ANALYSIS

FORWARD LOOKING STATEMENT :

This section of the Annual Report has been included in adherence to the spirit enunciated in the Code of Corporate Governance approved by the Securities and Exchange Board of India. Shareholders and Readers are cautioned that the opinions expressed by the management may be forward-looking statements in the current scenario, which is extremely dynamic, and increasingly fraught with risks and uncertainties. Actual results, performances, achievements or sequence of events may be materially different from the views expressed in the statement.

INDUSTRY STRUCTURE AND DEVELOPMENTS

Information Technology has made possible information access at gigabit speeds. It has created a level playing field among nations and has made positive impact on the lives of millions who are poor, marginalised and living in rural and far flung topographies. Internet has made revolutionary changes with possibilities of e-filing Income Tax returns or applying for passports online or railway e-ticketing.

Today a countrys IT potential is paramount for its march towards global competitiveness, healthy GDP, improving defence capabilities and meeting up the energy and environmental challenges.

The Indian Information Technology- Information Technology-Enabled Services (IT-ITES) industry has continued to perform its role as the most consistent growth driver for the economy. Service, software exports and BPO remain the mainstay of the sector. Over the last five years, the IT & ITES industry has grown at a remarkable pace. Consider some of the significant indicators for these remarkable achievements. The IT/ITES exports have grown to a staggering US$ 46.3 billion in 2008-09, the IT sector currently employing 2.2 million professionals directly and another 8 million people indirectly accounts for over 5% of GDP, a majority of the Fortune 500 and Global 2000 corporations are sourcing IT/ITES from India and it is the premier destination for the global sourcing of IT/ITES accounting for 55% of the global market in offshore IT services and garnering 35% of the ITES/BPO market.

The Indian IT-BPO sector including the domestic and exports segments continue to grow from strength to strength, witnessing high levels of activity both onshore as well as offshore. The companies continue to move up the value-chain to offer higher end research and analytics services to their clients. Indias leadership position in the global IT and BPO industries are based primarily on the following advantages.

India accounts for around 28 per cent of IT and BPO talent among 28 low-cost countries. It has a rapidly growing urban infrastructure fostering several IT centres in the country. Offshore service centres are spawning in the country due to operational excellence with low delivery cost, quality leadership and a conducive business environment. Favourable policy interventions, enabling infrastructure and augmenting a wide skill base from the government has further enhanced Indias brand image.

The Department of Electronics and Information Technology is coordinating strategic activities, promoting skill development programmes, enhancing infrastructure capabilities and supporting R&D for Indias leadership position in IT and IT-Enabled services.

OVERVIEW

The Company is proactively trying to seize the opportunity as initiated by the Government of India through Foreign Direct Investment in the Sector. This would be synergistic with the business of the Company and long-term benefits would accrue to the Company once the newly undertaken project scales to its culmination to enhance the value of shareholders with other stakeholders.

INTERNAL CONTROL SYSTEMS

The Company has adequate internal control systems for achieving efficiency in operations, optimum utilization of resources, effective monitoring thereof and compliance with applicable laws and regulations. The Audit Department conducts audits at various departments based on an annual audit plan with due weightage to the risk parameters associated with the business processes.

The Company regularly reviews the adequacy and effectiveness of the internal controls and suggests improvements for strengthening them.

HUMAN RESOURCES

In-house training Programme on various technical, attitudinal and supervisory aspects with the help of internal as well as external faculty, were conducted for employees after identifying their specific training needs in consultation with the respective departmental heads. The focus of the training was to create high performance culture as well as bringing an improvement in the organization.

The Company maintained cordial human relations throughout the year under review.

FINANCIAL PERFORMANCE

The details of the financial performance of the Company are appearing in the Balance Sheet and the Profit &Loss Account

OPPORTUNITIES, THREATS & OUTLOOK

The Company has invested in infrastructure development with a view to further cement the existing relationships and securing new customers. The Company maintains a persistent competitive focus with trusting and enduring partnerships with major technology company.

The Company also striving to resorts to strengthen its position by internally realigning its business and streamlining its operations with the definite intents of reducing cost and enhancing stakeholders value.

	On behalf of the Board
	P. Singhi, Whole time Director
Kolkata, 13th August, 2012.	N. Sachan, Director

ANNEXURE TO DIRECTORS’ REPORT

Report on Corporate Governance:

1. Philosophy on code of governance

The Company believes in and supports the principles and practices of good Corporate Governance. Your Company is following the philosophy of good Corporate Governance by focusing on transparency, accountability, professionalism and corporate social responsibility for enhancing shareholder values. Your board believes that the Corporate Governance is a continuous process as such Company will continue its efforts towards raising the standards in Corporate Governance by reviewing its procedures and systems to keep pace with the changing economic environment. The Company also believes that employees of the Company subscribe to the corporate values and apply them in their conduct by following corporate governance practices.

2. Board of Directors

(i) Composition

The composition of the Board is compliant in terms of clause 49 of the Listing Agreement. The Board comprised of 5 Directors including 3 Non- Executive Independent Directors and Two Executive Directors and out of that one is designated as Managing Director and one is Whole-time Director as on 31st March, 2011.

Composition, Category, Other Directorships, Other Committee Positions held by the Directors as on 31st March, 2012.

Name			Other Committee* Positions as
	Category	Other Directorships in Public Limited Companies incorporated in India	Chairman	Member
Shri Yashwant Rampuria Whole Time Director		—	—	—
Shri Pramod Singhi	Whole Time Director	—	—	—
Shri Neeraj Sachan	Non- Executive
	Independent
	Director	—	—	—
Shri Ashok Agarwal	— do —	—	—	—
Shri Pankaj Sachan	— do —	—	—	—

* Only the other Committee positions held in Audit and Shareholders Grievance Committee in Indian Public Limited Companies are considered.

(ii) Board Meeting:

The Board of Directors of the Company met five times during the year 2011-2012.

The Board meetings during the financial year 2011-2012 were held on 30th April, 2011; 30th July, 2011; 3rd September, 2011; 31st October, 2011 and 31st January, 2012 The gap between any two meetings did not exceed four months.

(iii) Attendance of Directors:

Attendance of Directors at the Board Meetings held during 2011-2012 and at the last Annual General Meeting.

Name of Directors	Meetings attended out of 5 Board Meetings held during (2011-2012)	Whether Attended last AGM held on 30th September, 2011
Yashwant Rampuria	5	Yes
Shri Neeraj Sachan	5	Yes
Shri Ashok Agarwal	5	No
Shri Pankaj Sachan	5	No
Shri Pramod Singhi	5	Yes

(iv) The Company has laid down the code of conduct for all its Board Members and Senior Management Personnel and necessary declarations affirming compliance thereto has received from all of them. The code of conduct is available on the website of the Company.

(v) Prevention of Insider Trading :

As per the SEBI (Prohibition of Insider Trading) Regulations 1992, the Company Secretary is the Compliance Officer and is responsible for setting forth policies, procedures, monitoring adherence to the rules for the preservation of price sensitive information, pre-clearance of trade, monitoring of trades and implementation of the Code of Conduct for trading in Companys securities under the overall supervision of the Board. The Company has adopted a Code of Conduct for Prevention of Insider Trading as well as a Code of Corporate Disclosure Practices.All the Directors on the Board, employees at senior management level at all locations and other employees who could be privy to unpublished price sensitive information of the Company are governed by this Code.

3. Audit Committee

Constitution of the Committee:

The Audit Committee of the Company has been constituted as per Section 292A of the Companies Act, 1956 and in terms of Clause 49 of the Listing Agreement. The Audit Committee is responsible for effective supervision of the financial reporting process, ensuring financial and accounting controls and also ensuring compliance with the financial policies of the Company. The Audit Committee may also review such matters as considered appropriate as per the terms of reference stipulated in Clause 49 II (C) and (D) of the Listing Agreement.

Composition and Meetings of the Committee:

The Audit Committee of the Company comprises with Shri Neeraj Sachan as Chairman, Shri Pankaj Sachan and Shri Ashok Agarwal as Members.

Attendance of Members at the Meetings of the Audit Committee held during 2011-2012.

Five meetings were held during the period on 30th April, 2011; 30th July, 2011; 3rd September, 2011; 31st October, 2011 and 31st January, 2012

Members	Meeting Attended
Shri Neeraj Sachan	5
Shri Ashok Agarwal	5
Shri Pankaj Sachan	5

4. Remuneration Committee:

The broad terms of reference of the Committee is to determine and recommend to the Board the remuneration payable to the Executive Directors in terms of Schedule XIII of the Companies Act, 1956. The Committee comprises three non-executive independent Directors viz., Shri Neeraj Sachan as Chairman, Shri Ashok Agarwal and Shri Pankaj Sachan as Members.

Non- Executive Directors do not draw any remuneration and do not have any material pecuniary relationship/ transactions with the Company in their personal capacity at large. Executive Directors were paid as a part of their remuneration.

The Committee met once on 3rd September, 2011 during the year. Shri Neeraj Sachan, Shri Ashok Agarwal and Shri Pankaj Sachan were attended the Meetings.

5. Shareholders/ Investors’ Grievance Committee.

The Company has a Shareholders/ Investors Grievance Committee (the Committee). The Committee deals with various matters relating to transfer/transmission of Shares/debentures, issue of duplicate shares/debentures, issue and allotment of rights/bonus shares, review of shares dematerialized and all other related matters.

The Committee comprises of three members. viz., Shri Pankaj Sachan, Shri Yashwant Rampuria as Members and Shri. Neeraj Sachan as Chairman.

The Committee met once on 3rd September, 2011 during the year and all the members were present at the meeting.

During the year 16 letters were received from shareholders out of which 6 were of the nature of complaints/grievances and the rest relate to application for transfers/transmission of shares. The complaints had been attended to the satisfaction of the shareholders. No share transfer pending as on 31st March, 2012.

None of the Directors of the Company holding shares/ convertible Instruments of the Company either by self or on behalf of others as beneficiary during the year under review.

6. General Body Meetings :

The last 3 Annual General Meetings of the Company were held on the following dates:

Dates	Time	Venue	Special Resolution/s
19th September, 2009	10.30 a.m.	Science City, Seminar Hall	No
		Kolkata - 700 046
28th September, 2010	10.30 a.m.	Science City, Seminar Hall	No
		Kolkata - 700 046
30th September, 2011	10.30 a.m.	Science City, Seminar Hall	No
		Kolkata - 700 046

There were no special resolutions passed by the Company through Postal Ballot during the year and no resolution is proposed to be conducted by means of Postal Ballot at present.

Resume and other information regarding the directors seeking appointment/ reappointment as required by sub clause (i) of Clause 49 (IV) (G) of the Listing Agreement has been given in the Notice of the Annual General Meeting annexed to this Annual Report.

7. Disclosures:

The Company has not entered into any related party transactions of material nature with its promoters, the Directors or the Management, their subsidiaries or relatives that may have potential conflict with the interest of the Company at large during the year 2011-2012.

There have been generally no instances of non-compliance on any matters by the Company.

8. Other Disclosures

Non- Mandatory Requirement: The Company has not yet adopted the Whistle Blower Policy and other non-mandatory requirement.

Mandatory Requirement: The CEO and CFO Certificate as required has been placed before the Board at its Meeting 3rd September, 2012 and that forms part of this Annual Report. All other mandatory requirements have been duly complied with, as far as practicable.

The Board Members and Senior Management Personnel have affirmed the compliance of Code of Conduct.

9. Means of Communication.

a) Half yearly report sent to each household of shareholders: No

b) Quarterly Results: Published in Newspapers: Business Standard / Pratidin

c) Website, where displayed : www.zigmasoftware.com

d) whether it also displays official news releases : Yes

e) The Presentation made to institutional investors or to the analyst: Yes

f) The Management Discussion and Analysis is a part of the Annual Report.

10. General Shareholder Information.

I)	Annual General Meeting	Date & Time : Saturday 29th September, 2012 At 10.30 a.m. Venue : Science City Seminar Hall, Topsia, Kolkata-700046
II)	Financial Year	1st April to 31st March
III)	Book Closure Date	27th September, 2012 to 29th September, 2012 (both days inclusive)
IV)	Dividend	No dividend during the year
V)	Listing on Stock Exchange	The Calcutta Stock Exchange Ltd., (CSE)
		The Bombay Stock Exchange Ltd, (BSE)
		Listing fees have been paid and there is no fee outstanding as on date.
VI)	Stock Code	CSE :	1001249
		BSE :	532177
		DEMAT ISIN Number :	INE746C01032

VII) Stock Price:

Monthly	High	Low
April 2011	5.70	3.91
May 2011	6.07	3.54
June 2011	4.73	3.73
July 2011	5.74	3.86
August 2011	4.23	3.40
September 2011	3.80	3.20
October 2011	3.80	3.34
November 2011	3.80	2.85
December 2011	3.10	2.10
January 2012	2.83	1.97
February 2012	3.00	2.23
March 2012	2.90	2.11

 

VIII) Registrar & Share Transfer Agents	M/s. MCS Limited acting as Registrar & Share Transfer
	Agent (RTA) for both Physical and Demat modes of
	Securities.
	Address: MCS Limited, 77/2A, Hazra Road,
	Kolkata - 700 029
	Ph. No. (033) 2454 1892/93, Fax (033) 2454 1961
IX) Share Transfer System	The transfer of shares in Demat mode need not be approved by the Company. The transfers of Physical Shares, which are complete in all respects, are taken up for approval and the transferred securities are dispatched to the transferee within the stipulated time.

X) Distribution of shareholding as on 31st March, 2012.

	Category	No. of Share(s) held	Percentage (%) to Total
A	Promoter(s) Holding
	1. Promoters
	a. Indian Promoters	110	0.00
	b. Foreign Promoters	—	—
	2. Persons Acting in Concert	—	—
	Sub Total	110	0.00
B.	Public Share Holding
	3. Institutional Investors
	a. Mutual Funds and UTI	—	—
	b. Bank/ Financial Institutions/
	Insurance companies	1500	0.00
	c. FIIs	—	—
	Sub Total	1500	0.00
	4. Others
	a. Bodies Corporate	13373292	32.03
	b. Indian Public	28309943	67.79
	c. Non Resident Indians	75155	0.18
	Sub Total	41758390	100.00
	Grand Total	41760000	100.00

 

Shareholding (Range)	No. of shares	%	No. of Shareholders	%
1 — 500	2976920	7.13	17925	82.13
501 — 1000	1502323	3.60	1766	8.09
1001 — 2000	1394094	3.34	888	4.07
2001 — 3000	804605	1.93	308	1.41
3001 — 4000	535585	1.28	145	0.66
4001 — 5000	802160	1.92	167	0.77
5001 — 10000	1834428	4.39	235	1.08
10001 — 50000	6257872	14.99	278	1.27
50001 — 100000	2579694	6.18	37	0.17
100001 — Above	23072319	55.25	76	0.35
Total	41760000	100.00	21825	100.00

 

XI) Dematerialization of Shares as on 31st March, 2012	The Company has entered into arrangements with National Securities Depository Ltd., and Central Depository Services (India) Ltd. whereby Shareholders have an option to dematerialize their shares with either of the depositories.
	As regards the shares held in depository 41683299 shares have been dematerialized as on 31st March 2012, which accounts for 99.82 % of the total Shares.
XII) Outstanding GDRs /ADRs/ Warrants or any Convertible instruments, conversion dates	NIL
XIII) Address for Correspondence	Registered Office
	P-113, Kalindi Housing Estate, Ground Floor,
	Lake Town, Kolkata -700089

 

	On behalf of the Board
	P. Singhi, Whole time Director
Kolkata, 13th August, 2012.	N. Sachan, Director

Declaration

The Board Members and Senior Management Personnel have given declaration relating to the Code of Conduct for the Year 2011-12 as per the Clause 49 of the Listing Agreement.

	For Zigma Software Limited
	On behalf of the Board
Kolkata, 13th August, 2012.	P. Singhi, Whole time Director

Auditors’ Certificate on Compliance with the Conditions of Corporate Governance under Clause 49 of the Listing Agreement(s)

To the Members of Zigma Software Ltd. :

We have examined the compliance of conditions of corporate governance by Zigma Software Limited for the year ended on 31st March,2012 as stipulated in Clause 49 of the Listing Agreement of the said Company with stock exchanges.

The compliance of conditions of corporate governance is the responsibility of the Management. Our examination was limited to the procedures and implementation thereof, adopted by the Company for ensuring the compliance of the conditions of the corporate governance. It is neither an audit nor an expression of an opinion on the financial statements of the Company.

In our opinion and to the best of our information and according to the explanations given to us, we certify that the Company has complied with the conditions of corporate governance as stipulated in the above mentioned Listing Agreement.

We further state that such compliance is neither an assurance as to the future viability of the Company nor the efficiency or effectiveness with which the Management has conducted the affairs of the Company.

	For Bijan Ghosh & Associates
	(Chartered Accountants)
Place: Kolkata	(BIJAN GHOSH)
Date: 13th August, 2012.	Partner