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Visesh Infotechnics

BSE: 532411|NSE: VISESHINFO|ISIN: INE861A01058|SECTOR: Computers - Software Medium & Small
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Directors Report Year End : Mar '18    Mar 15

Dear Members,

The Directors have pleasure in presenting before you the Twenty-ninth Annual Report of your Company together with the Audited Financial Statements for the Financial Year ended 31 st March, 2018.

I. FINANCIAL RESULTS

The Financial results of the company for the period under review are as below:

Rs. In lacs

Particulars

2017-18 Standalone

2017-18 Consolidated

2016-17 Standalone

2016-17 Consolidated

Income from operations

7,705.11

7,776.73

18,643.49

20,328.15

Other Income

685.87

685.87

140.29

145.74

Total Income

8,390.98

8,462.60

18,783.78

20,473.89

Total Expenditure

7,907.46

7,979.46

18,783.27

20,476.71

Profit / (Loss) Before Interest, Depreciation & Tax

483.52

483.14

0.51

(2.82)

Interest

321.17

321.17

40.04

40.04

Depreciation

162.53

162.53

106.84

106.84

Profit before Tax

(0.18)

(0.56)

(146.37)

(149.70)

Provision for Taxation

a) Current Tax

-

-

-

-

b) Earlier year (Net)

(360.29)

(360.29)

-

-

c) Deferred Tax

108.98

108.98

(61.38)

(61.38)

Profit / (Loss) after Tax

251.13

250.74

(84.99)

(88.32)

Profit b/f. from previous year

(2,536.02)

(2,535.14)

(2,451.03)

(2,446.82)

Balance carried to Balance Sheet

(2,284.89)

(2,284.40)

(2,536.02)

(2,535.14)

Transfer to General Reserve

-

-

-

-

Paid-up equity Share Capital (Face value - Re. 1/-)

37,744.37

37,744.37

37,744.37

37,744.37

Reserves & Surplus

7,485.12

8,141.01

7,229.86

7,884.17

II. DIVIDEND

In order to plough back its resources, the Board has decided not to recommend any dividend for the year ended 31st March 2018.

III. RESERVES

No amount is being carried to reserves.

IV. SHARE CAPITAL

There is no change in the issued, subscribed and Paid-up equity share capital of the company

V. CHANGES IN THE NATURE OF BUSINESS, IF ANY

There is no change in the nature of business of your company during the year under review

VI. DETAILS OF SIGNIFICANT AND MATERIAL ORDER PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY’S OPERATIONS IN FUTURE

SEBI vide its letter dated 7th August 2017, took pre-emptive interim measures under section 11(1) of SEBI Act in respect of listed shall companies which included the name of your company also. SEBI directed stock exchanges to place trading restrictions on promoters / directors and place the scrip in the trade to trade category with limitation on the frequency of trade and imposed a limitation on the buyers by way of 200% deposit on the trade value. The said measures were directed by SEBI pending final determination after verification of credentials and fundamentals by the Stock Exchanges, including by way of Audit and forensic audit, if necessary.

Pursuant to the above, National Stock Exchange (NSE) vide notice dated August 7, 2018 addressed to all its market participants, initiated actions envisaged in SEBI letter dated August 7, 2018 in respect of all the listed companies including your company w.e.f. 8th August 2017.

Your company had thereafter made representation, provided the stock exchange, on their request, the Auditors Certificate, inter alia to following effect:

(a) Status of filing of Income Tax Returns for the last three years and status of disputes, if any, pending with the Income Tax Department.

(b) Status w.r.t. your company''s compliance with all requirements of Companies Act and Annual Returns filed during last three years; Your Company also provided Secretarial Audit Reports for the last three years.

(c) Description of business model along with Bank statements of last year with active / dormant status, evidencing the company is a going concern

(d) Status of Company w.r.t. defaults to any bank / financial institution

(e) Status of compliance with all the listing regulations requirements for a period of last three years

Your company was given an opportunity of personal hearing in the matter by NSE. Pursuant to which NSE had submitted its report to SEBI, however, SEBI directed the Stock Exchanges to dispose of the representations received by them directly from the company.

NSE thereafter given another opportunity of personal hearing in the matter to your company in the month of December 2017 and raised certain queries and sought your company''s reply in writing which was provided to NSE in January 2018. On 10th January 2018, disposed of your company’s representation and modified the actions envisaged in SEBI’s letter dated August 7, 2018.

The above directions took effect from the date of orders i.e. 10th January 2018 and are still in force.

The NSE thereafter sometime in the month of February 2018 appointed M/s. M.K. Aggarwal & Co. as the forensic Auditor to conduct audit of the company. Your company has fully co-operated with the said auditors and had concluded their audit. We presume that the said forensic auditors might have forwarded their report to the Stock Exchange, though there is no communication either from the Forensic Auditors or from the Stock Exchange.

VII. BUSINESS PERFORMANCE / FINANCIAL OVERVIEW

THE COMPANY IS PRESENTLY ENGAGED IN THE FOLLOWING AREAS:

- IT Solutions & Products, which comprise of:

System Integration and Networking Solutions (Including Hardware)

Enterprise Software

Trading of UID Kit

The entire business has three modes of execution of business i.e. Trading of Hardware and Peripherals; Establishing IT Infrastructure and Customization and up-gradation. The Company, based on the orders, procures material from leading Dealers and Distributors of leading brands of IT and IT Infrastructure product manufacturers like HP, Samsung, LG, Lenovo, Dell, Acer, etc. thereafter the same are supplied.

- IT Enabled Services comprising of:

Domain Registration & Web Hosting Services

VAS & IT enabled Services

Aadhaar Enrolment

Printing of Election Cards

SignDomains™ is India’s first ICANN Accredited domain registrar which offers on-line domain registration of top level domains (TLD) including .com .net .org .info .biz .in etc. Catering to a global client base through its on-line presence and secure payment gateway. SignDomainsTM has several corporates, large portals, resellers and end-users as its clientele.

The Company has tied up with various top level TLDs and offer these TLDs to our clients through its network of over 400 Re-sellers as well as directly by the Company.

MPS offers web-hosting solutions on MPS dedicated servers located at server farms and data centres located in US.

Value added services like SMS, payment gateways, messaging, e-identity management, e-commerce are available for corporate clients and other businesses.

The Company was engaged by CSC e-Governance Services India Ltd. a Central Government organization for providing support for the implementation of the Election project in the state of Gujrat. We were also engaged by CSC e-Governance Services India Ltd. for printing of Election Cards.

- Telecommunication, through web portal www.uvapoint.com comprising of

DTH, Postpaid, prepaid mobile recharge;

Insurance;

Ola Car booking

The Company is aggressively working on capitalizing on the ever-growing telecom enabled services market in India. It has firmed up plans to push UVA Point - a retail platform - to offer a host of telecom enabled services to customers ranging from prepaid mobile top-up, post-paid mobile bill payment, DTH recharge, landline bill payments, data-card recharge / payments bulk SMS, mobile application and software application. The company has tied up with ANI Technologies Pvt. Ltd. for booking of OLA cabs through our web portal www.uvapoint.com. Now our customers who do have smart phones, can book a cab through our web portal www.uvapoint.com. The company has also tied up with Easy Policy Easy policy is an insurance web aggregators licensed as such by IRDA. The tie-up with Easy Policy has enabled insurance market place at UVApoint. Now our retailers can show an interested customer different offers from several insurance providers and customer can choose the best one as per his choice which in turn enables our retailers and the company to generate additional income from insurance services. Effective training of retailers and customer care services will back this activity.

In the fiscal year 2017-18 the consolidated revenues decreased to Rs. 7776.73 lacs from Rs. 20328.15 lacs during the previous year, whereby registering decline in revenues by 61.74%. The consolidated Profit / (Loss) before interest, depreciation and tax (EBIDT) is at Rs. 483.13 lacs as compared to loss of Rs. 2.82 lacs suffered by the company during the previous year. The consolidated Profit / (Loss) after Tax (PAT) during the financial year under review was Rs. 250.74 lacs as compared to loss of Rs. 88.32 lacs.

During the financial year under review the company had earned profits after tax of Rs. 1680.20 lacs which is on account of sale of one of the properties of the company and reversal of Income tax along with interest charged in earlier years.

During the Financial year 2017-18 the standalone revenues declined to Rs. 7705.11 lacs from Rs. 18643.49 lacs during the previous year, whereby registering a decline in revenues by 58.67%. Though there has been an increase in profits aftertax of Rs. 251.13 lacs as compared to a loss of Rs. 84.99 lacs suffered by the company during the previous year. The profits again is on account of sale of one of the company’s property and reversal of income tax along with interest charges in earlier years.

Segment wise Performance

The segment wise revenues and profits are tabulated hereunder:

Segment

Consolidated

Standalone

2017-18

2016-17

2017-18

2016-17

Segment Revenue

IT Solutions & Products

196.55

591.68

196.55

591.68

IT enabled Services

50.14

112.38

50.14

112.38

Telecommunications

7530.05

19624.09

7458.43

17939.43

Total Revenues

7776.73

20328.15

7705.12

18643.49

Segment Results - Profit / (loss) before Interest and tax)

IT Solutions & Products

(324)

(15.09)

(324)

(15.09)

IT enabled Services

4.13

10.25

4.13

10.25

Telecommunications

(186.79)

(123.99)

(186.41)

(115.21)

Total

(185.91)

(128.84)

(185.52)

(120.06)

Less: Interest

321.16

40.04

321.17

40.04

Less: Other un-allocable Expenditure net off.

179.36

126.56

179.36

126.57

Add: Un-allocable Income

685.87

145.74

685.87

140.03

Profit before Tax

(0.56)

(149.70)

(0.18)

(146.37)

There has been a sharp decline in the business of the company which is mainly attributable to stiff competition both from the organized sector and unorganized sector, low margins and long credit periods. The company is still to come out of the effects of de-monetization. All the segments in which the company is engaged are under performing and your Company is taking stern steps to increase its market share.

In its endeavor to increase its market share in its existing business your company has decided to sell its stake in its subsidiaries subject to the approval by the shareholders in this Annual General Meeting and focus on its core business of development of enterprise software and Domain registration and web-hosting and Telecommunication.

Your company is optimistic and expects to generate revenues in the times to come.

MPS was registered with UIDAI as one of its enrolment agency for Aadhaar Card. However, due to technical issues and change in policy of appointment of Aadhaar Agency, your company could not meet the requirements hence the companys application for renewal had been kept pending by the Authority. Now that your company is able to meet the Policy requirements of Aadhaar Enrolment Agency, the company would again be applying for registration. Your company is hopeful that it would again get itself registered with UIDAI as an Enrolment Agency.

During the year under review the shares of your company were put under GSM Grade VI surveillance w.e.f. 7th August 2017 by the Stock Exchanges where the shares of your company are listed. Your Company made its representation before the National Stock Exchange, however, the Exchange appointed M/s. M.K. Aggarwal & Co. to conduct Forensic Audit of your company. Your company has fully co-operated with the said auditors and concluded their audit. We hope that they might have by now submitted their report to National Stock Exchange. Your company is yet to receive any communication in this regard from the Stock Exchange.

There are no material changes or commitments affecting the financial position of the Company between the end of the financial year and to the date of the report.

In summary, your company is well positioned in the markets it serves with a broad range of service offerings and a diversified customer base.

VIII. DETAILS OF SUBSIDIARIES / JOINT VENTURES / ASSOCIATES COMPANIES

Currently Your Company has three wholly owned foreign subsidiary Companies namely:-

M/s Axis Convergence Ltd. (Incorporated in Mauritius), M/s Greenwire Network Ltd. (Incorporated in Hong Kong) and Opentech Thai Network Specialists Co. Ltd. (OTNS) (Incorporated in Thailand).

In the last Annual General Meeting of the company held on 29th September 2017, the members had approved disinvestment in Opentech Thai Network Specialists Co. Ltd. (OTNS) a company incorporated in Thailand, however, the resolution approving disinvestment could not be given effect. Now the company is proposing to disinvest in all its subsidiaries to enable it to concentrate its businesses in India.

There has not been any material change in the nature of the business of the subsidiaries though the revenues have declined. During the year, the Board of Directors reviewed the affairs of the subsidiaries.

Performance and financial position of each of the Subsidiaries, Associates and Joint Venture companies included in the Consolidated Financial Statements:

The performance and financial position of the subsidiaries, associate companies and joint venture companies included in the consolidated financial statement is provided in accordance with the provisions of Section 129 read with Rule 5 of the Companies (Accounts) Rules, 2014 containing the salient features of the financial statement of Company’s subsidiaries/joint ventures or associate companies in Form AOC- 1 in “Annexure I” to this report.

The Consolidated Financial Statements have been prepared in accordance with Indian Accounting Standards Ind AS 110 issued by The Institute of Chartered Accountants of India and shown the financial resources, assets, liabilities, income, profits and other details of your Company and its subsidiaries as a single entity, after elimination of minority interest.

The statement also provides the details of performance and financial position of each of the subsidiaries. In accordance with section 136 of the Companies Act, 2013 Audited Financial Statements, including the consolidated financial statements and related information of the Company and Audited Accounts of each of its subsidiaries, are available on our website www.mpsinfotec.com. These documents will also be available for inspection till the date of the AGM during business hours at our registered office in New Delhi.

There are no subsidiaries, joint venture, or associate companies, which ceased to be the subsidiaries, joint ventures or associate companies during the year as prescribed under Rule 8(5) (iv) of the Companies (Accounts) Rules, 2014.

The policy for determining Material Subsidiaries formulated by the Board of Directors is disclosed on the Company''s website and is accessible on http://www.mpsinfotec.com

IX. HUMAN RESOURCES

Your Company is of the view that while Technology can enable processes but it is the People who actually make things happen. In a journey of delivering tangible business value to stakeholders, Associates are envisioned as a strategic differentiator for the Company.

Your Company promotes an empowered and collaborative work environment where leaders stay engaged with the Associates and encourage them to challenge conventional thinking. Our employees are our biggest assets. To meet the evolving need of our clients, our priority is to attract and engage the best talent in the right locations with the right skills.

Your Company is committed to providing a comprehensive employment experience to Associates with the flexibility to balance both professional and personal commitments. During their tenure at the Company, employees are motivated through various skill development programs. We create effective dialogue through our communication channels to ensure that feedback reach the relevant team, including leadership. Your Company invests substantially in employee engagement to motivate employees and encourage social communication and collaboration. Your Company continuously invests in attraction, retention and development of talent on an ongoing basis. Your Company thrust is on the promotion of talent internally through job rotation and job enlargement.

X. BOARD OF DIRECTORS AND KEY MANAGERIAL PERSONNEL

During the year under review all Independent Directors have given declaration that they meet the criteria of Independence as laid down under section 149(6) of the Companies Act, 2013 and Regulation 16(1 )(b) of the SEBI (Listing obligations and Disclosure Requirements) Regulations, 2015.

In order to strengthen the Board of the Company, the Nomination & Remuneration Committee recommended the candidature of Mr. Rachit Garg, DIN No. 07574194, to the office of Director of the Company. Consequent upon the recommendation by the Nomination & Remuneration Committee, the Board of Directors in its meeting held on 30th May 2018 appointed Mr. Rachit Garg, DIN No. 07574194, as an additional director pursuant to the provisions of section 161 of the Companies Act, 2013, who holds office up to the date of this Annual General Meeting and being eligible offers himself for this appointment as Non-Execution, Non-Independent Director of the Company liable to retire by rotation.

Pursuant to the provisions of section 160 of the Companies Act, 2013, the Company has received notice in writing from a member of the company, proposing Mr. Rachit Gargs candidature as Director of the company.

Mr. Rachit Garg is an MBA Finance & Marketing from UP Technical University, Meerut apart from being a Commerce Graduate from Chaudhary Charan Singh University, Meerut. He has a rich experience of over 7 years in Accounts & Finance. He had earlier worked with Geiper Consulting Pvt. Ltd. in the Accounts & Finance Department and he specializes in marketing of financial products.

Your company will be immensely benefited from his expertise and experience and therefore recommends his appointment as a Board Member.

During the year under review, Mr. Peeyush Kumar Aggarwal, DIN NO. 00090423, Mr. Manoj Jain, DIN NO. 02573858 and Mrs. Madhu Sharma, DIN NO.06947852 were the directors of the Company.

During the year Mr. Rahul Meena, Chief Executive Officer resigned with effect 12th July, 2017. Further the

Board, upon the recommendation of the nomination and remuneration committee, unanimously appointed Mr. Peeyush Kumar Aggarwal as Managing Director of the Company with effect from 3rd January, 2018.

Mr. Peeyush Kumar Aggarwal has a very long association with the Company i.e. he had been as the Board for the past nearly 2 decades and he is also the promoter of the Company. Mr. Peeyush Aggarwal, aged 55 years, is a Fellow Member of the Institute of Chartered Accountants of India. He has extensive experience of over 29 years in the field of Finance and Taxation; Corporate Laws; Project Management; strategic business planning etc. He is first generation Entrepreneur having a clear business vision. His business interests today are in the areas of Information Technology; Telecom; VAS; Animation and Gaming; Digital Cinema; Pharma; Real Estate; Construction & Hospitality; Garment Exports; and Broking (Shares, Commodities, Insurance). Other details required to be disclosed in terms of the provisions of Secretarial Standard on General Meetings form part of the Notice.

During the year, the non-executive directors of the Company had no pecuniary relationship or transactions with the Company except infusion of funds by Mr. Peeyush Kumar Aggarwal for the smooth functioning of the Company.

Pursuant to provisions of Section 203 of the Companies Act, 2013, Mr. Peeyush Kumar Aggarwal, Managing Director, Mr. Sanjay Sharma, Chief Financial Officer and Miss. Garima Singh, Company Secretary & Compliance Officer were the Key Managerial Personnel of the Company during the year.

XI. COMMITTEES OF THE BOARD

As on March 31, 2018, the Board had five committees namely: the audit committee, the nomination & remuneration committee, the stakeholders'' relationship committee, Corporate Social Responsibility and Risk Management Committee. All Committees consists of Independent Directors. A detailed note on the composition of the Board and its committees is provided in the Corporate Governance Report section of this Annual Report.

XII. BOARD EVALUATION

Pursuant to the provisions of the Companies Act, 2013 and Regulation 19 read with Schedule II, Part D of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board has devised a policy on evaluation of performance of Board of Directors, Committees and Individual directors. Accordingly, the Chairman of the Nomination and Remuneration Committee obtained from all the board members duly filled in evaluation templates for evaluation of the Board as a whole, evaluation of the Committees and peer evaluation. The summary of the evaluation reports was presented to the respective Committees and the Board for their consideration.

The Board of Directors of your company has laid down Policy on appointment and removal of Directors, Key Managerial Personnel and Senior Management. The Board of Directors has also adopted Policy on Remuneration of the Directors, Key Managerial Personnel and other Employees. The said policies are available on the company’s website www.mpsinfotec.com, extracts of which are provided in Annexure - II to this report.

The Company''s Policy on Appointment and Removal of Directors, KMPs and Senior Management, includes inter alia Succession Plan for the Board of Directors, KMPs and Senior Management. The Policy on Director’s appointment and remuneration also includes criteria for determining qualifications, positive attributes, independence of Director and also remuneration for key managerial personnel and other employees, forms part of the Corporate Governance Report of this Annual Report.

The Company has laid down a policy on training for Independent Directors as part of the governance policies.

The Board Members are regularly updated on changes in Corporate and allied laws, Taxation laws & matters thereto. MD along with Senior Management conducts exclusive sessions for the Board Members sharing updates about the Company''s business strategy, operations and the key trends in the IT industry relevant for the Company. These sessions generally coincides with the Board Meetings. These updates help the Board Members to keep themselves abreast with the key changes and their impact on the Company.

The details of programs for familiarization of the Independent Directors with the Company are available on the Company’s website and can be accessed at the weblink; www.mpsinfotec.com

XIII. MEETING OF INDEPENDENT DIRECTORS

Independent Directors of the Company met on May 30, 2018 to review the performance of non-independent directors, the Board as a whole for the FY 2017-18. The Chairman of the Company was evaluated, taking into account the views of executive directors and non-executive directors. The Independent Directors in their separate meeting also 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 same was discussed in the board meeting that followed the meeting of the Independent Directors, at which the performance of the Board, its committees and individual directors was also discussed.

XIV. 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 are no material changes affecting the Financial Position of the Company which have occurred between the end of the Financial Year of the Company to which the Financial Statement relate and the date of the Report except that Mr. Rachit Garg, was appointed as an Additional Director of the Company w.e.f. 30th May 2018.

XV. DIRECTOR’S RESPONSIBILITY STATEMENT

Pursuant to Section 134(5) of the Companies Act, 2013, your Directors, based on the representation(s) received from the Operating Management and after due enquiry, confirm that:

a) in the preparation of annual accounts, the applicable accounting standard had been followed along with proper explanation relating to material departures;

b) the Directors had selected such accounting policies are consistently applied and reasonable, made judgment 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 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 this 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, in the case of a listed company, 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.

Based on the framework of internal financial controls and compliance systems established and maintained by the company, work performed by the Internal, statutory and secretarial auditors and the reviews performed by management and the relevant board committees, including the audit committee, the board is of the opinion that the Company’s internal financial controls were adequate and effective during the financial year 2017-18.

XVI. DETAILS IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS

The Company has internal financial controls which are adequate and were operating effectively. The controls are adequate for ensuring the orderly & efficient conduct of the business, including adherence to the Company''s policies, the safe guarding of assets, the prevention & detection of frauds & errors, the accuracy & completeness of accounting records and timely preparation of reliable financial information

XVII. AUDITORS

Statutory Auditor

M/s. RMA& Associates LLP, Chartered Accountants, had been the statutory auditors of the Company and had been conducting Audit of your company since 2008-09. Pursuant to the provisions of section 139(2) which states that, No listed Company or a company belonging to such class or classes of Companies as may be prescribed, shall appoint or re-appoint ?

(a) An individual as auditor for more than one term of five consecutive year; and

(b) An audit firm as auditor for more than two terms of five consecutive years

In terms of the said provisions and rules framed thereunder, M/s. RMA & Associates LLP, Chartered Accountants, Firm Registration no. 000978N have completed two terms of five consecutive years, therefore, the company has to appoint a fresh Chartered Accountant, to conduct audit of the company.

The Audit Committee, in its meeting held on 14th August 2018 had recommended the appointment of M/s. Nemani Garg Agarwal & Co., (Firm''s Registration No. 010192N), Chartered Accountants (CAs), Delhi as the Statutory Auditors of the Company and the Board of Directors in their meeting held on 14th August 2018 have also recommended their appointment as the statutory auditors of the Company for a period of 5 years commencing from the conclusion of this Annual general Meeting till the conclusion of the Annual General Meeting of the Company to be held in the Year 2023.

Brief Profile of Nemani Garg Agarwal & Co.

Nemani Garg Agarwal & Co. is a leading chartered accountancy firm rendering comprehensive professional services which include Audit, Management Consultancy, Tax Consultancy, Accounting Services, Manpower Management, Secretarial Services etc.

Nemani Garg Agarwal & Co. is a professionally managed firm. The team consists of distinguished Chartered Accountants, Corporate Financial Advisors and Tax Consultants. The firm represents a combination of specialized skills, which are geared to offers sound financial advice and personalized proactive services. Those associated with the firm have regular interaction with industry and other professionals which enables the firm to keep pace with contemporary developments and to meet the needs of its clients.

Your company has received written consent of the auditor to such appointment in terms of Section 139 & 141 of the Companies Act, 2013, as amended, and have also obtained a certificate in terms of Rule 3 & 4 of the Companies (Audit & Auditors) Rules, 2014, to the effect that it is eligible for appointment and is not disqualified for appointment under the act, Chartered Accountants Act, 1949, and rules and regulations made thereunder; the proposed appointment is as per the term provided under the Act; the proposed appointment is within the limits laid down by or under the authority of the Act; and that there are no proceedings against the firm or any partner of the firm pending with respect to professional matter of conduct before the Institute of Chartered Accountants of India or other competent authority or court; that they satisfy the criteria as provided under section 141 and other provisions, if any, of the Companies Act, 2013,

Further pursuant to the provisions of section 139 read with Rules framed thereunder, the resolution appointing M/s. Nemani Garg Agarwal & Co, is being placed for consideration by the members in the ensuing Annual General Meeting.

None of the Directors and Key Managerial Personnel of the Company and their relatives, in any way and / or manner, deemed to be concerned or interested financially or otherwise, in the Ordinary Resolution as set out in the Notice.

Secretarial Auditor

As required under Section 204 of the Companies Act, 2013 and Rules thereunder, the Board on the recommendation of the Audit Committee appointed M/s. Kundan Agrawal & Associates, Practicing Company Secretaries, as Secretarial Auditor of the Company for the FY 2018-19.

Internal Auditors

Pursuant to the provisions of Companies Act, 2013, and Rules thereunder, the Board of Directors on the recommendation of the Audit Committee has appointed M/s. Sanghi & Co., Chartered Accountants as the Internal Auditor of the Company for the FY 2018-19.

XVIII. AUDITOR’S REPORT

The observations made in the Auditors’ Report are as under:

1. The Company has shown in the balance sheet, bank balances in Banco Efisa (Lisbon Portugal) amounting to Rs. 350,977,439/- (USD8,883,210.75) which the bank has adjusted and the matter is in the court of law. Consequently the bank balances shown in balance sheet is overstated by Rs. 350,977,439/.

2. The Company has increased its Authorized Capital from Rs. 52.45 Crores to Rs. 377.50 crores during the period of FY-2010-11 to FY 2012-13, ROC fees of Rs. 4.88 crores towards the same stands payable, under the head “Other Current Liabilities” in the financial statements.

3. Income Tax for the Assessment year 2013-14 amounting to Rs. 20.80 lacs and interest thereon is payable.

Report of the Statutory Auditor is annexed with the Annual Report, however, as regards qualifications made by the AuditorsCin their report your directors state as under:

1. The funds raised by the Company from GDR issue during F.Y. 2007-08 were kept in fixed deposit account with Banco Efisa, Lisbon, Portugal, as the said amount was to be deployed in terms of INFORMATION MEMORANDUM of the GDR issue. During the F.Y. 2008-09, Banco Efisa, the Bank in Portugal, wrongly debited an amount of USD 8,883,210.75 out of the balance lying in the Company''s Account with the Bank. The Company has denied and disputed this debit and had initiated legal action under criminal jurisprudence of Portuguese Law. During the criminal investigation, several new facts/documents have come to our knowledge and based on the evaluation of new facts/documents by Barristers, Senior Advocates and investigation carried out in India, London and Portugal; your Company has initiated a strong civil action for recovery of USD 8,883,210.75, along with interest, against Banco Efisa and its Holding Company, wherein our Portuguese advocates confirm that the chances of recovery are very high. The suit filed by your company before Portuguese courts is presently pending adjudication.

2. The Company had increased its authorised capital during the Financial Year 2010-11 to 2012-13, however, due to technical issues necessary forms along with the fees w.r.t. increase in authorised Capital could not be filed and paid. Meanwhile, the schedule of fees was increased as per the Companies Act, 2013. However, the authorised capital was increased prior to the applicability of Companies Act, 2013. Yet the ROC demanded fee as per the schedule under the Companies Act, 2013, retrospectively which is much higher than the fees payable under the Companies Act, 1956. Representations made with the Ministry of Corporate Affairs did not yield any results hence the company has filed a Writ Petition bearing No. WP(C) 5199 of 2015 before the Hon’ble High Court of Delhi challenging the applicability of provisions prescribed under Para 3 of Table B under Registration of Offices and Fees Rules 2014 which is pending adjudication.

3. As regards Auditors’ remarks w.r.t. Income Tax for the Assessment year 2013-14 amounting to Rs. 20.80 Lacs and interest thereon is payable. It is stated that your company has already provided for the amount payable towards Income Tax for AY 2013-14 along with interest hence this liability has no further impact on the profits / retained earnings of the reported period of the Company.

The Audit Report prepared by the Statutory Auditors forms part of this Annual report.

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company had appointed M/s. Kundan Aggarwal & Associates, Practicing Company Secretary, Delhi to undertake the Secretarial Audit of the Company. The Secretarial Audit Report is provided as Annexure-lll. There are no qualifications, reservation or adverse remark or disclaimer made in the Secretarial Audit Report

Reporting Of Frauds By Auditors

During the year under review, neither the statutory auditors nor the secretarial auditor or the Internal Auditors have reported to the audit committee, under Section 143 (12) of the Companies Act, 2013, any instances of fraud committed against the Company by its officers or employees, the details of which would need to be mentioned in the Board Reports.

XVII. EXTRACT OF ANNUAL RETURN

In accordance with Section 134(3) (a) of the Companies Act, 2013 read with rule 12(1) of the Companies (Management and Administration) Rules, 2014, extract of annual return in the prescribed Form MGT-9 is annexed as Annexure-IV, which forms part of this report.

XVIII. PARTICULARS OF EMPLOYEES

The ratio of the remuneration of whole-time director and key managerial personnel (KMP) 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. However, as per the provisions of Section 136 of the Companies Act, 2013, the reports and accounts are being sent to all the members of the Company and others entitled thereto, excluding the aforesaid information. Any member interested in obtaining such particulars may write to the Company Secretary at the Registered Office of the Company. The said information shall also be made available for inspection at the registered office of the Company during working hours.

XIX. CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

In line with the requirements of the Companies Act, 2013 and Listing Regulations, your Company has formulated a Policy on Related Party Transactions which is also available on the Company''s website at http://www.mpsinfotec.com/policies.htm. The Policy intends to ensure that proper reporting, approval and disclosure processes are in place for all transactions between the Company and Related Parties.

All Related Party Transactions are placed before the Audit Committee for review and approval. Prior omnibus approval is obtained for Related Party Transactions which are entered in the ordinary course of business and are at Arm’s Length.

All Related Party Transactions that were entered into during the financial year were on an arm’s length basis. There were no materially significant related party transactions made by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of the Company at large.

None of the Directors have any material pecuniary relationships or transactions with the Company except to the extent of their shareholding.

Pursuant to Section 134 (3)(h) of the Companies Act, 2013 and Rules made thereunder, particulars of transactions with related parties as required under section 188(1) of the Companies Act, 2013, in the prescribed Form AOC-2 is annexed herewith as Annexure-V.

XX. OBLIGATION OF COMPANY UNDERTHE SEXUAL HARASSMENT OF WOMEN ATWORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

The Company is an equal opportunity provider and consciously strives to build a work culture that promotes the dignity of all employees. As required under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and Rules framed thereunder, the Company has implemented a policy on prevention, prohibition and redressal of sexual harassment at the workplace.

The Company has zero tolerance on Sexual Harassment at workplace. During the year under review, there were no cases filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

XXI. CORPORATE GOVERNANCE

A separate report on Corporate Governance is provided together with a Certificate from the Statutory Auditors of the Company regarding Compliance of conditions of Corporate Governance as stipulated under Listing Regulations. A Certificate of the CEO and CFO of the Company in terms of Listing Regulations, inter-alia, confirming the correctness of the financial statements and cash flow statements, adequacy of the internal control measures and reporting of matters to the Audit Committee also forms part of Report on Corporate Governance.

XXII. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

A detailed Management Discussion and Analysis Report for the year under review, as stipulated under Regulation 34 of the Listing Regulations forms part of this Report as Annexure VI.

XXIII. RISK MANAGEMENT POLICY

In terms of the requirement of the Companies Act, 2013 the Company has developed and implemented the Risk Management Policy. The Audit Committee and the Board reviews the same periodically.

The Risk Management Committee of the Board of Directors periodically reviews the Risk Management framework, identified risks with criticality and mitigation plan.

The company has also laid down procedures to inform Board members about the risk assessment and minimization procedures. These procedures are periodically reviewed to ensure that executive management controls risk through means of a properly defined framework.

XXIV. PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS UNDER SECTION 186 OF THE COMPANIES ACT, 2013.

The particulars of the loans, guarantees and investments have been disclosed in the financial statements.

XXV. CORPORATE SOCIAL RESPONSIBILITY

Pursuant to section 135 of Companies Act, 2013, Company has constituted a CSR Committee, the details of which are available on the website of the Company (URL: www.mpsinfotec.com/investors). Due to inadequacy of profit the Company had not contributed any amount towards CSR activities as required under the CSR Rules, 2014.

The Corporate Social Responsibility Committee of the Company has formulated and recommended to the Board, a Corporate Social Responsibility Policy (CSR Policy) indicating the activities to be undertaken by the Company, which has been approved by the Board.

The CSR Policy may be accessed on the Company’s website at the link: http://www.mpsinfotec.com/pdf/ Coporate-Social-Responsibility (CSR)%20Policy-Final.pdf

1. The company’s CSR Policy intends to:

- Strive for economic development that positively impacts the society at large with minimal resource footprint.

- Embrace responsibility for the Company''s actions and encourage a positive impact through its activities on hunger, poverty, malnutrition, environment, communities, stakeholders and the society.

2. The Composition of the CSR Committee during the Financial Year 2017-18 was:

Mr. Peeyush Aggarwal

Promoter/Non-Executive Director and Chairman of the Committee till 2nd January 2018 and thereafter as Managing Director and Chairman of the Committee.

Mr. Manoj Kumar Jain

Independent Director and Member of the Committee.

Mrs. Madhu Sharma

Independent Director and Member of the Committee.

3. Average net profit (Loss) of the company for last three financial years: (Rs. 38,019,063.33p)

Prescribed CSR Expenditure (two per cent of the amount as in item 3 above): Since the average net profits for preceding 3 financial years are in negative, therefore no amount that is required to be spent by the Company as CSR expenditure.

4. Details of CSR spent during the financial year:

(a) Total amount to be spent for the financial year; Nil

(b) Amount unspent, if any; Nil

(c) Manner in which the amount sent during the financial year is detailed below.

(1)

(2)

(3)

(4)

(5)

(6)

(7)

(8)

S. No.

CSR Project or activity identified

Sector in which the Project is covered

Projects or Programs

(1) Local Area or other

(2) Specify the State and district where projects or programs was undertaken

Amount

outlay

(budget)

project or

programs

wise

Amount spent on the projects or programs Sub-heads: (1)

Direct

expenditure on projects or programs (2)

Overheads

Cumulative expenditure upto the reporting period

Amount spent direct or through implementing agency

Not Applicable since the company had suffered losses during the last three years

XXVI. DISCLOSURE REQUIREMENT

As per Regulation 34 of the SEBI (Listing Obligation and Disclosure Requirement) Regulations 2015, corporate governance report with auditors’ certification thereon and management discussion and analysis are attached and forms part of this report.

Details of familiarization programme of the independent directors are available on the website of the Company (URL: www.mpsinfotec.com/investors).

Policy on dealing with related party transactions is available on the website of the Company (URL: www. mpsinfotec.com/investors).

The Company has formulated and published a Whistle Blower Policy to provide Vigil Mechanism for employees including directors of the company to report genuine concerns. The provisions of this policy are in line with the provisions of the Section 177(9) of the Act and the revised Regulation 22 of the listing agreements with Stock Exchanges. (URL: www.mpsinfotec.com/investors).

The Board has, on the recommendation of the Nomination & Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management and their remuneration. The Remuneration Policy is stated in the Corporate Governance Report. The remuneration policy is also available on the company’s website. (URL:www.mpsinfotec.com/investors).

XXVII. DEPOSITS

Though Your Company has not accepted any fixed deposits and, as such, no amount of Principal or interest on deposits from public was outstanding as of the date of balance sheet yet pursuant to the provisions of Chapter V of the Act, below is the details relating to deposits:

S.No

Particulars

Amount *Rs.) / Remarks

(a)

accepted during the year

Nil

(b)

remained unpaid or unclaimed as at the end of the year

Nil

(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 since the company has not accepted any deposits

(i) at the beginning of the year

(ii) maximum during the year

(iii) at the end of the year

Nil

Nil

Nil

XXVIII. SECRETARIAL STANDARDS

The Company has complied with the provisions of the applicable secretarial standards, i.e. SS-1 (Secretarial Standard on Meetings of the Board of Directors) and SS-2 (Secretarial Standards on General Meeting).

XXIX. CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION

Your Company is mainly engaged in the business of IT and IT enabled services, providing solutions to the customers. The operations of your Company are accordingly not energy intensive. However, adequate measures are taken to conserve energy and ensure its optimum consumption by using and purchasing energy-efficient equipments. Your Company is committed to follow a high standard of environmental protection and provision of a safe and healthy work place for our people, customers and visitors. As energy costs comprise a very small part of our total expenses, the financial impact of these measures is not material. The company has not imported any technology during the year under review.

XXX. RESEARCH & DEVELOPMENT

Your Company strives to deliver high quality services to its customers and in such endeavor, constantly invests in and undertakes research & development aimed at improving its solutions. MPS has a dedicated business unit for Research & Development which delivers innovative solutions to clients and also fosters R&D within all business units to create intellectual property in the form of re-usable components, frameworks, etc., which help drive greater productivity. The company is carrying on R and D in multiple forms, but all of these are focused on better efficiency through continuous improvement in processes, systems methodologies and capabilities. Your company is committed to provide I.T. solutions that are innovative and continuously upgraded in keeping with emerging technology trends by a motivated workforce that includes R and D group, on time; all the time; resulting in maximizing stake holder’s value. We have continued to invest in some fundamental research involving small budget with long term perspective. In order to excel at new operations and activities. MPS stress is on continuous innovation and research, based on market requirements and customer expectations.

XXXI. FOREIGN EXCHANGE EARNINGS AND OUTGO

Particulars of foreign exchange earnings and outgo are as follows:

(Rs. In Lacs)

Particulars

Year ended 31.03.2018

Year ended 31.03.2017

Foreign exchange earnings

0.74

20.64

Foreign exchange Outgo

16.56

29.24

XXXII. ACKNOWLEDGEMENTS

The Board of Directors acknowledges their deep appreciation to our customers, vendors, Financial Institutions, Business Associates, Bankers and all other Stakeholders for their continued co-operation and support to the Company.

The Board places its special appreciation and values the trust reposed and faith shown by every shareholder of the Company.

The Board places on record its deep appreciation for the cooperation extended by Auditors of the Company. Further, the Board wishes to record its deep gratitude to all the members of MPS family for their whole hearted support. The Board is also confident that the employees will continue to contribute their best in the year to come.

For and on behalf of the Board

MPS Infotecnics Ltd.

Place : New Delhi SD/-

Date: 31st May, 2018 Peeyush Aggarwal

Chairman & Managing Director

DIN No. 00090423

Source : Dion Global Solutions Limited
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