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Aftek Ltd.

BSE: 530707 Sector: IT
NSE: AFTEK ISIN Code: INE796A01023
BSE LIVE 15:29 | 30 Nov Stock Is Not Traded.
NSE 15:29 | 16 Mar Stock Is Not Traded.
OPEN 1.63
VOLUME 96775
52-Week high 1.75
52-Week low 0.00
Mkt Cap.(Rs cr) 17.96
Buy Price 0.00
Buy Qty 0.00
Sell Price 1.63
Sell Qty 69754.00
OPEN 1.63
CLOSE 1.71
VOLUME 96775
52-Week high 1.75
52-Week low 0.00
Mkt Cap.(Rs cr) 17.96
Buy Price 0.00
Buy Qty 0.00
Sell Price 1.63
Sell Qty 69754.00

Aftek Ltd. (AFTEK) - Director Report

Company director report


The Members of Aftek Limited

Your Directors are pleased to present their 28th Annual Report together with theAudited Statement of Accounts for the year ended 31st March 2015.Members maykindly note that vide letter dated 10th September 2015 received from Government ofIndia Ministry of Corporate Affairs Office of the Registrar of Companies Maharashtrathe Company has obtained extension of three months for holding the Annual General Meeting.



PARTICULARS 31/03/2015 31/03/2014
TURNOVER 5260 7575
PROFIT/(LOSS) BEFORE TAX (1946) (1887)
PROFITAFTER TAX (1946) (1833)


In view of the loss incurred during the year it has not been possible for yourDirectors to recommend any dividend for the year.


Your company s performance during the year has been well bellow par. The financialrestructuring and closure of banking with delays in getting the Defense verticleprojects is largly responsible for this dismal performance.The below par turnover aaddwith the dollar fluctuations and writing off certain bad debts the company s balancesheet carries a loss of Rs. 19.46 crores.

In order to inject funds from the investor your company needs to complete the financialrestructuring and the closure of the banks. Your directors are confident that with theIndian economy now catching steam and the reforms viz GST precess getting in place theeconomic envirnoment is expected to improve making the investement climate better alsothe further opening up of the Defense sector for FDI the Make in India would gathermomentum largly benifiting company s like ours operating in this space.

As comunicated during the last AGM your company is engaged in serious discussion withinvestors who have liked the indigenous product and manufacturing strategy now popularlyknown as make in India In Defense smart city smart home and IntegratedIntelligent Transport. Keeping this in mind the directors had proposed an enablingresolution to accommodate the new set of investors. In view of the above your Directorsare actively pursuing the financial restructuring closure of Bank Loans and injectingfresh funds through the prospective investors.


While the recovery of receivables continued to remain at a slow rate your Companyhad to write off sizable amounts as bad debts during the year. While proposal forone time settlement of the dues of lending bankers has been on a positive track the closureof loan accounts has been delayed in spite of Company s rigorous efforts for earlysettlement.

The 354 numbers of FCCBs if converted into GDRs/equity shares at the conversionprice of Rs. 13.76 would result into issuance of additional 11210428numbers of equity shares of Rs. 02/-each.


Pursuant to Sections 149 152 and any other applicable provisions of the CompaniesAct 2013 Miss Aditi Bhatt (DIN 07144131) is proposed to be appointed asIndependent Directors to hold office for five consecutive years.

Brief resume of the Director proposed to be appointed/re-appointed nature of herexpertise in specific functional areas names of the Companies in which she holddirectorships and membership/Chairmanship of Committees of the Board hershareholding in the Company and inter-se relationship with Directors as stipulated undersection 149(6) of the Companies Act 2013 and Clause 49 of Listing Agreemententered into with the Stock Exchanges are set out in the Notice forming part ofthe Annual Report.

The Board commends the resolution to the members for the respective appointment .


The Company has not accepted any Fixed Deposits from the Public.


The present Statutory Auditors of the Company M/s. GMJ & Co. CharteredAccountants was appointed as the statutory Auditor of the company upto financial year2018-19 subject to ratification at every year by the members.

The Company has received a letter as required under Section 141 of the CompaniesAct 2013 from M/s. GMJ & Co. Chartered Accountants confirming their eligibilityand willingness to act as Statutory Auditors if re-appointed. M/s. GMJ & Co.Chartered Accountants shall beappointed as Statutory Auditors of the Company to holdoffice for the reaming period from the conclusion of this Annual General Meeting untilthe conclusion of the fifth Annual General Meeting to examine and audit the accounts ofthe Company for the financial year 2015-16 2016-17 2017-18 and 2018-19 subject toratification by the members of the Company at all the subsequent AGMs.


The Auditors have made certain qualification to the financial statement. Their reportson relevant notes on accounts are self-explanatory and comments of the Board under section134 of the companies Act 2013 are self explanatory.

Auditor qualification and management reply

Point No. Auditors qualifications Management reply
(i) Basis for qualified opinion
Note no.39 regarding Management has not considered any provision in respect of outstanding Debtors for a period more than 12 months amounting to Rs. 22398.36 Lacs which in our opinion as evidenced by the poor recovery made during the year are doubtful of recovery. Consequently profit before tax is overstated by Rs. 22398.36 Lacs. Further in our view there is significant uncertainty as to ultimate collection of Debtors due to non-receipt from overseas debtors. Therefore we are further unable to comment on recoverability of balance debtors amounting to Rs.4995.58 Lacs (i) In view of the on-going slowdown in the European and US Markets there have been delays in receivables. Considering the size and standing of its debtors the company has not made any provision at this stage. The Management is putting more efforts for the recovery.
(ii) Note no.40 regarding company has given certain capital advances and made some investments totaling to Rs.6975.20 Lacs towards the building under construction at Hinjewadi Pune upto the year ended 31-3-2010 thereafter there are no further developments/construction made. The said Plot of land is mortgaged to Bank of India -Jersey Channel Islands against the term loan. However since the Company has made default in repayment of Principal and Interest thereon Bank has demanded repayment total loan and taken the possession of the land alongwith the construction in progress. The bank has called for bids at a base price of Rs.1800.00 Lacs. There is no provision made towards the eventual loss on such auction which is presently not ascertainable till such disposal. The bank has now agreed for an one time settlement (OTS) of outstanding for Rs.2600 lacs; (ii Bank has issued one time settlement (OTS) final stage of negotiations are going on. Completion of the same necessary entries will be made to close theses transactions.
1. Emphasis of matter
Note no.34 b (ii) regarding Liability if any of the pending assessment under Income Tax Sales tax (including interest if any) which are presently not ascertainable 1. Regarding Income-tax on completion of Assessment for the F.Y. 2010-2011 around Rs.1.50 crores is due. Regarding Sales tax about Rs.10.00 lacs . as the position has now improving these are being cleared-off very soon.
2. Without qualifying our opinion we draw attention to Note No.41 regarding intangible Assets under development for various ongoing projects. Due to the delay in the projects Intangible Assets under development for Rs.19910.32 Lacs are yet to be put to use as on the date of balance sheet. The company is of the opinion that with the improved market conditions all the Assets under development will be profitably used by the company in the future projects 2. These intangible assets acquired by the company for the ongoing projects. Some part of the same already put to use balance will be early next year i.e. April 2016.
(iv) In our opinion and according to the information and explanations given to us having regard to the explanation that the IPRs purchased are of special nature and suitable alternative source do not exist for obtaining comparable quotation there exist an adequate internal control system commensurate with its size and nature of its business with regards to purchase of inventory and fixed assets and with regards to the sale of goods and service. During the course of our audit we have not observed any major weakness in such internal control system. (iv) Company is having internal audit control system to monitor usage of IRRS etc. The said Reports will be submitted to the Audit Committee every quarterly for taking necessary action.
(vii) In respect of statutory dues:
(a) According to the information and explanations given to us the company is not regular in depositing undisputed statutory dues Employees State Insurance Sales-tax Wealth Tax Service Tax (a)As the position has now improving these are being cleared-off very soon.
Custom Duty Excise Duty Cess and any other statutory dues with the appropriate authorities. Undisputed provident fund dues are not regularly deposited with the appropriate authorities. In respect of income tax the Company is not regular in depositing those dues with the appropriate authorities and there have been significant delays in a large number of cases. Undisputed amounts payable in respect of above mentioned taxes which were outstanding at the year-end for a period of more than six months from the date they became payable are as follows:
(ix) According to the information and explanations given to us the company has defaulted in repayment of dues to a bank the details of the same as on 31st March 2015 are as mentioned below. (xi) Bank has agreed for one time settlement (OTS) the same is in final stage expected to close these issues on or before end of this current financial year i.e. March 2016



The Audited Consolidated Financial Statements of the Company for the financial yearended 31st March 2015 prepared in accordance with the Companies Act 2013 (the Act)and Accounting Standard (AS) - 21 on Consolidated Financial Statements is provided inthe Annual Report.


Pursuant to the provisions of Section 129(3) of the Companies Act 2013 read with Rule5 of the Companies (Accounts) Rules 2014 a statement containing salient features of thefinancial statements of the subsidiary companies in Form AOC-1 is Annexure I in thisBoard s Report.

Pursuant to the provisions of Section 136 of the Companies Act 2013 the financialstatements of the Company consolidated financial statements together with relevantdocuments and separate audited accounts in respect of subsidiaries are available on thewebsite of the Company.


Management s Discussion and Analysis Report for the year under review as stipulatedunder Clause 49 of the Listing with

Stock Exchange in India is presented in a separate section forming part of the AnnualReport.


There was no change in the nature of business of the Company or any of its subsidiariesduring the year.


As on 31st March 2015 the Company held no deposit in any form from anyone. There wasno deposit held by the company as on 31st March 2015 which was overdue or unclaimed bythe depositors. For the present the Board of Directors has resolved that not to acceptany deposit from public.


During the year under review there were no material change and commitment affecting thefinancial position of the Company.


The Board met 5 times during the financial year the details of which are given in theCorporate Governance Report that forms part of this Annual Report. The intervening gapbetween any two meetings was within the period prescribed by the Companies Act 2013.


The Companies Act 2013 provides the appointment of Independent Directors. Pursuant tothe provisions of Section 149 (4) of the Companies Act 2013 provides that every listedcompany shall have at least one-third of the total number of directors as independentdirectors. The Board of the Company is already in compliance with aforesaid section.

As per the Section 149(10) of the Companies Act 2013 provides that independentdirector shall hold office for a term of upto five consecutive years on the Board of theCompany; and shall be eligible for re-appointment on passing a special resolution by theshareholders of the Company.

Further according to the Section 149 (11) of the Companies Act 2013 no independentdirector shall be eligible for appointment for more than two consecutive terms of fiveyears. Sub-section (13) states that the provisions of retirement by rotation as defined inSub-sections (6) and (7) of Section 152 of the Act shall not apply to such independentdirectors.

The Nomination and Remuneration Committee on 30/05/2015 has confirmed and ratified theappointment of Miss Aditi Bhatt as an Independent Director of the company for a period offive years starting from 30/05/2015 upto 29/05/2020 and who are not liable to retire byrotation. On the recommendation of the Nomination and Remuneration Committee the Boardseeks the ratification of the same from the members of the Company.

Further at the time of appointment of an independent director the Company issues aformal letter of appointment outlining his/her role functions duties andresponsibilities as a director.

The format of the letter of appointment is available on our website


The Company has received necessary declaration from each independent director underSection 149(7) of the Companies Act 2013 that he/she meets the criteria of independencelaid down in Section 149(6) of the Companies Act 2013 and Clause 49 of the ListingAgreement.

The Independent Director under section 149(6) of the Companies Act 2013 declared that:

1. She is not a promoter of the Company or its holding subsidiary or associatecompany;

2. She is not related to promoters or directors in the company its holding subsidiaryor associate company.

3. The independent Director have /had no pecuniary relationship with company itsholding subsidiary or associate company or their promoters or directors during thetwo immediately preceding financial years or during the current financial year;

4. None of the relatives of the Independent Director has or had pecuniary relationshipor transaction with the company its holding subsidiary or associate company or theirpromoters or directors amounting to two per cent. or more of its gross turnover or totalincome or fifty lakh rupees or such higher amount as may be prescribed whichever islower during the two immediately preceding financial years or during the currentfinancial year;

5. Independent Director neither himself nor any of his relatives:

(i) holds or has held the position of a key managerial personnel or is or has beenemployee of the company or its holding subsidiary or associate company in any of thethree financial years immediately preceding the financial year in which he is proposed tobe appointed;

(ii) is or has been an employee or proprietor or a partner in any of the threefinancial years immediately preceding the financial year in which he is proposed to beappointed of: (A) a firm of auditors or company secretaries in practice or cost auditorsof the company or its holding subsidiary or associate company; or (B) any legal or aconsulting firm that has or had any transaction with the company its holding subsidiaryor associate company amounting to ten percent. or more of the gross turnover of such firm;

(iii) Holds together with his relatives two percent. or more of the total voting powerof the company; or

(iv) is a Chief Executive or Director by whatever name called of any nonprofitorganization that receives twenty-five percent. or more of its receipts from the companyany of its promoters directors or its holding subsidiary or associate company or thatholds two percent. or more of the total voting power of the company;

6. Independent Director possesses such qualifications as may be directed by the Board.The Company & the Independent Directors shall abide by the provisions specified inSchedule IV of the Companies Act 2013.


Clause 49 of the Listing Agreement mandates that the Board shall monitor and review theBoard evaluation framework. The Companies Act 2013 states that a formal annual evaluationneeds to be made by the Board of its own performance and that of its committees andindividual directors. Schedule IV of the Companies Act 2013 states that the performanceevaluation of independent directors should be done by the entire Board of Directorsexcluded the director being evaluated.

The evaluation of all the directors and the Board as a whole was conducted based on thecriteria and framework adopted by the Board. The Board approved the evaluation results ascollated by the Nomination and Remuneration Committee.


During the year under review the performance of the Board & Committees andIndividual Director(s) based on the below parameters was satisfactory:

(i) Most of the Directors attended the Board meeting;

(ii) The remunerations paid to executive Directors are strictly as per the company andindustry policy.

(iii) The Independent Directors only received sitting fees.

(iv) The Independent Directors contributed a lot in the Board and committeedeliberation and business and operation of the company and subsidiaries based on theirexperience and knowledge and Independent views.

(v) The Credit Policy Loan Policy and compliances were reviewed periodically;

(vi) Risk Management Policy was implemented at all critical levels and monitored by theInternal Audit team who places report with the Board and Audit committee.


Pursuant of the provision of Section 149 (8) of the Companies Act 2013 read withSchedule IV and Clause 49 of the Listing Agreement the Independent Directors of theCompany held their meeting on 02nd February 2015 reviewed the performance of non-independent directors and the Board as a whole including the Chairperson of the Companyviews expressed by the executive directors and non-executive directors at various leveland quantified the quality quantity and timeliness of flow of information between theCompany management and the Board and expressed satisfaction.


The current policy is to have an appropriate mix of executive and independent directorsto maintain the independence of the Board and separate its functions of governance andmanagement. As on 31stMarch 2015 the Board consists of 7 members. Out of which one isthe Managing Director two is Whole Time Directors and one Women Director.

The policy of the Company on directors appointment and remuneration includingcriteria for determining qualifications positive attributes independence of adirector and other matters provided under Sub section (3) of Section 178 of the CompaniesAct 2013 adopted by the Board and are stated in this Board report. We affirm that theremuneration paid to the directors is as per the terms laid out in the nomination andremuneration policy of the Company.


Currently the Board has Seven Committees:1) Audit Committee 2) Nomination andRemuneration Committee 3) Risk Management Committee 4) Corporate Social ResponsibilityCommittee 5) Shares Transfer /Investor Grievances Committee (6) StakeholdersRelationship Committee.

A detailed note on the Board and its Committees is provided under the CorporateGovernance Report that forms part of this Annual Report.


Pursuant to the Section 178 of the Companies Act 2013 the Company has set up aNomination and Remuneration and Stakeholders Relationship Committee under the Chairmanshipof the Independent Director Mr. Mahesh Naik Mr. Sandip C. Save and Mr. Ranjit Dhuru.

The Gist of the Policy of the said committee:

For Appointment of Independent Director (ID):

a. Any person who is between the age of 25 years and below 75 years eligible to becomeIndependent Director(ID);

b. He has to fulfill the requirements as per section 149 of the Companies Act 2013read with Clause 49 of the Listing Agreement;

c. Adhere to the code of conduct as per Schedule IV to the Companies Act 2013;

d. Strictly adhere to the Insider Trading Regulation of the SEBI and Insider Tradingpolicy of the Company;

e. Independent Director should have adequate knowledge and reasonably able tocontribute to the growth of the Company and stakeholders;

f. Independent Director should be able to devote time for the Board and other meetingsof the company;

g. Entitled for sitting fees and Reasonable conveyance to attend the meetings; and

h. Able to review the policy participate in the meeting with all the stakeholders ofthe company at the Annual General Meeting.


The composition of Corporate Social Responsibility Committee as per the provisions ofsection 135 (2) of the Companies Act 2013:

Sr.No. Composition Name Of Members

1 Mr. Mahesh Naik- Chairman

2 Mr. Ranjit Dhuru - Managing Director

3 Mr. Nitin K. Shulka WTD

4 Mr. Sandip C. Save

Over the years we have been striving to achieve a fine balance of economicenvironmental and social while also paying attention to the needs and expectations of ourinternal as well as external stakeholders. Our corporate social responsibility is notlimited to philanthropy but encompasses holistic community development institutionbuilding and sustainability related initiatives. During the year under review CSRactivity is not applicable to the company.


The company has developed Risk Management Policy mainly covering the following areas ofconcerns

1. License and policy of respective government all over the world in connection withexport of goods and matter in connection with Software Products.

2. Adequate policy in connection with foreign exchange management fluctuations thereofduly placed before the Board.


The Board has adopted the policies and procedures for ensuring the orderly andefficient conduct of its business including adherence to the Company s policies thesafeguarding of its assets the prevention and detection of frauds and errors the accuracyand completeness of the accounting records and the timely preparation of reliablefinancial disclosures.

The Company has an Internal Control System commensurate with the size scale andcomplexity of its operations. The scope and authority of the Internal Audit function isdefined in the Internal Audit Manual. To maintain its objectivity and independence theInternal Audit function reports to the Chairman of the Audit Committee.

The Internal Audit Department monitors and evaluates the efficacy and adequacy ofinternal control system in the Company its compliance with operating systems accountingprocedures and policies at all locations of the Company.

Based on the report of internal audit function process owners undertake correctiveaction in their respective areas and thereby strengthen the controls. Significant auditobservations and recommendations along with corrective actions thereon are presented toBoard.

M/s.Udit S. Master Chartered Accountant is the internal Auditor of the Company.


Pursuant to the Section 134(3)(c) and Section 134 (5) of the Companies Act 2013 theBoard of Directors of the Company hereby confirm:

(i) That in the preparation of the accounts for the financial year ended 31st March2015 the applicable accounting standards have been followed along with proper explanationrelating to material departures;

(ii) That the Directors have selected such accounting policies and applied themconsistently and made judgments and estimates that were reasonable and prudent so as togive a true and fair view of the state of affairs of the Company at the end of thefinancial year and of the profit and loss of the Company for the year under review;

(iii) That the Directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act 2013for safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities;

(iv) That the Directors have prepared the accounts for the financial year ended 31stMarch 2015 on a going concern basis.

(v) The internal financial controls laid and have been followed by the company and thatsuch controls are adequate and are operating effectively. Such controls means controls andpolicies and procedures adopted and adherence by the company for orderly and efficientconduct of the business for safeguarding assets prevention and detection of frauds anderrors and maintenance of accounting records and timely preparation of financialstatements and review its efficiency.

(vi) The Directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.


M/s. Ramesh Chandra Mishra & Associates Company Secretary in Practice wasappointed to conduct the secretarial audit of the Company for the financial year 2014-15as required under Section 204 of the Companies Act 2013 and Rules thereunder. TheSecretarial Audit Report for F.Y. 2014-15 is Annexure-III to this Board's Report.

The Board has re-appointed M/s. Ramesh Chandra Mishra & Associates CompanySecretary in Practice as secretarial auditor of the Company for the financial year2015-16.


There are no significant and material orders passed by the regulators or courts ortribunals impacting the going concern status and Company s operations in future.


As required by the Companies (Disclosure of Particulars in the Report of Board ofDirectors) Rules 1988 the relevant information pertaining to conservation of energytechnology absorption foreign exchange earnings and outgo are as follows:


The Company continues its policy of encouraging energy conservation measures. Theregular review of energy consumption and the systems installed to control utilization ofenergy is undertaken.


There is a dedicated team being formed which will conduct market research on the latestmolecules and the advancements in pharmaceuticals and prepare the inputs which will beused to create the R&D Pipeline. Continuous efforts are being made to improvereliability and quality through in house R&D efforts which is headed by WTD Mr. NitinK. Shukla.


The Company is equipped with technologies from world s leaders.

2014-2015 2013-2014
a. Foreign Exchange Earned 5161.24 7439.82
b. Foreign Exchange Used 110.85 4750.77


The Company has a vigil mechanism named Fraud and Risk Management Policy (FRM) to dealwith instance of fraud and mismanagement if any in staying true to our values ofStrength Performance and Passion and in line with our vision of being one of the mostrespected companies in India the Company is committed to the high standards of CorporateGovernance and stakeholder responsibility.

A high level Committee has been constituted which looks into the complaints raised. TheCommittee reports to the Audit Committee and the Board.

The FRM Policy ensures that strict confidentiality is maintained whilst dealing withconcerns and also that no discrimination will be meted out to any person for a genuinelyraised concern.


Pursuant to the Section 134(3)(h) of the Companies Act 2013 and Rule 8(2) of theCompanies (Accounts) Rules 2014 the particulars of contract or arrangement entered intoby the Company with related parties referred to in Section 188(1) in Form AOC-2 isAnnexed-IV to this Board s Report.

The details of such related party transactions are available in the Notes to theStandalone financial statements section of the

Annual Report.


Loans Guarantees and Investments covered under section 186 of the Companies Act 2013form part of the notes to the financial statements provided in this Annual Report.


Pursuant to the Section 134(3)(a) of the Companies Act 2013 the details forming partof the extract of the Annual Return is Form MGT-9 is Annexure-V.


We take this opportunity to thank employees at all levels for their dedicated serviceand contribution made towards the growth of the company.The relationship with the workersof the Company s manufacturing units and other staff has continued to be cordial.

To ensure good human resources management at the company we focus on all aspects ofthe employee lifecycle. This provides a holistic experience for the employee as well.During their tenure at the Company employees are motivated through variousskill-development engagement and volunteering programs.

As per provisions of Section 197(12) of the Companies Act 2013 read with Rule 5(1) ofthe Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 isAnnexure-VI to this Board s report.

In terms of Section 197(12) of the Companies Act 2013 read with Rule 5(2) and 5(3) ofthe Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 noemployee(s) drawing remuneration in excess of limits set out in said rules forms part ofthe annual report.

Considering the first proviso to Section 136(1) of the Companies Act 2013 the AnnualReport is being sent to the members of the Company and others entitled thereto. The saidinformation is available for inspection at the registered office of the Company duringbusiness hours from 11 a.m to 2 p.m on working days of the Company up to the date of theensuing Annual General Meeting. Any shareholder interested in obtaining a copy thereofmay write to the Company Secretary in this regard.


A Report on Corporate Governance along with a Certificate from Mr. Udit S. MasterChartered Accountant regarding compliance with the conditions of Corporate Governance asstipulated under Clause 49 of the Listing Agreement with Stock Exchange forms part of thisReport and Annexure-VII to this Board s Report.


All the fixed assets finished goods semi-finished goods raw material packingmaterial and goods of the company lying at different locations have been insured againstfire and allied risks.


Directors are thankful to their bankers for their continued support to the company.


Your Directors would like to place on record their sincere appreciation of thecontinued co-operation support and assistance given by shareholders customersvendors bankers service providers suppliers and employees at all levels.

DIN- 00044279