Archana Software Ltd.
|BSE: 530565||Sector: IT|
|NSE: SSLFINANCE||ISIN Code: INE149B01015|
|BSE LIVE 14:24 | 21 Jul||Stock Is Not Traded.|
|NSE 05:30 | 01 Jan||Stock Is Not Traded.|
|BSE: 530565||Sector: IT|
|NSE: SSLFINANCE||ISIN Code: INE149B01015|
|BSE LIVE 14:24 | 21 Jul||Stock Is Not Traded.|
|NSE 05:30 | 01 Jan||Stock Is Not Traded.|
Your Directors have pleasure in presenting the Twentieth Annual Report on the workingof the Company along with the audited Balance Sheet and Profit Loss Account for the yearended 31st March 2016.
No dividend has been recommended for the year.
TRANSFER TO RESERVES IN TERMS OF SECTION 134 (3) (J) OF THE COMPANIES ACT 2013
The board does not proposed any amount to carry to any specific reserves.
OPERATIONS as STATE OF COMPANY S AFFAIRS
During the year your company has clocked a turnover of Rs.1.92 crores and Net loss ofRs.10.29 lakhs. Your directors are confident of registering substantial increase inturnover and profits in the coming years.
CHANGES IN NATURE OF BUSINESS
There is no significant changes had been made in the nature of the company during thefinancial year
MANAGEMENT DISCUSSION & ANALYSIS
Overview of the Economy
In 2015-2016 world economy continued its recovery from the recession in the lastdecade; the global growth of 3.4% showed a continued path to improvement taking intoaccount growth of 3.4% in 2013. India s economy also showed a continued cyclical upswing;in FY 2015-16 India s GDP grew significantly compared to FY15. While these higher numberspartially reflect the change in base year used for calculation of GDP the overall growthdemonstrates a strong recovery. Due to record-low oil prices and focus on fiscal policy bythe new Government at the centre inflation has eased. It has also allowed easing ofinterest rates. Strong investor sentiment and record FII inflows have helped stabilize thecurrency.
However deadlock in the parliament on key reforms and the prospect of taxation underMAT has led to short-term jitters in the market. Lack of pickup in credit growth due tohigh banking NPAs is a worrying sign. While the markets have reached record levelsshowing great optimism it remains to be seen whether it will be seen in the performanceof industry sector. Looking ahead the outlook for FY 2016-17 appears optimistic. Policyinitiatives pick-up in investments and continued low oil prices are likely to continuethe momentum. While a lot will depend on the ability of the Government to drive 2ndgeneration reforms and remove structural bottle-necks the intent and continued support toindustrial growth in the country is unquestioned.
In FY 2016-17 India is likely to accelerate GDP growth rate to 7%- 7.6%. The increasein growth rate is expected to be contributed majorly by the industrial sector. Uncloggingof domestic policy logjam as well as improvement in private consumption demand is likelyto drive the growth. Though addressing supply-side constraints (e.g. in mining power andsteel sectors) will be the key to continue this momentum and achieve the increase ingrowth rate. The prospects of long-term growth in India remain strong. India brings to thetable a rare set of strengths: A long standing tradition of stable democratic governmentscapable private sector huge consumer base and restless entrepreneurs. Given India sdemographic transition the country will still be a relatively young nation 20 years fromnow. This is likely to generate significant volumes of savings and investment over thecoming years. All of the above will create a huge market opportunity for companies who arewilling to take long-term bets on the Indian consumer.
Indian Textile Industry
Indian Textiles Industry has an overwhelming presence in the economic life of thecountry. Apart from providing one of the basic necessities of life the textile industryalso plays a pivotal role through its contribution to industrial output employmentgeneration and export earnings of the country. It contributes about 4% of India s GDP 14%to India s industrial production and 13% to the country s export earnings & 27% of theforeign exchange inflows. Textile Industry provides employment to 45 million people whichmakes it the 2nd largest employment provider in the country after Agriculture. GloballyIndia has the 2nd largest textile manufacturing capacity; the Indian textiles industryaccounts for about 24 per cent of the world s spindle capacity and eight per cent ofglobal rotor capacity. It is now the 2nd largest textile exporter in the world. The sizeof the Indian textiles and apparel industry is expected to reach USD 223 billion by 2021.While Indian textile industry has strong presence across the value chain manufacturingvalue chain is 3 unbalanced. India is 2nd largest producer of man-made staple fibre. With50 million spindles india is one of the world s leading and most cost efficient producerof the spun yarn. While it has 2nd largest no. of looms globally the organized millsector contributes only 5%. India needs to upgrade its loom as well as processingmachinery.
Opportunities and Threats
The demand for the company s product are on the stable the premium products are morevisible and are adding to the revenue of the company. Association with Indian PremierLeague has given a wider reach to the companies products.
The company is trying to do well in the domestic market. On the whole the outlook forthe company continues to remain positive.
Risks and Concern
Proper and unhindered availability of labor force is an issue to meet the increasingdemand coupled with un even price fluctuation in yarn prices and govt policies are some ofthe issues that needs to be taken care of your company is taking efforts to cut downdependence to outside forces Your Company has a well documented Risk Management Policy.This policy is reviewed by the Management periodically and is appropriately modifiedwherever necessary.
Transparency in Sharing Information
Transparency refers to sharing information and acting in an open manner. Processesinstructions and information are directly accessible to those concerned with them andenough information is Provided to understand and monitor them. Your Company believes intotal transparency in sharing information about its business operations with all itsstakeholders.
Your Company strives to provide maximum possible information in the ManagementDiscussion and Analysis in the Annual Report and also through other means to keep thestakeholders informed about the business performance.
Internal Control Systems
The Company has adequate internal control procedure commensurate with the nature of itsbusiness and the size of its operations for the smooth conduct of its businesses. Internalaudit is conducted at regular intervals and covers the key areas of operations. It is anindependent objective and assurance function responsible for evaluating and improving theeffectiveness of risk management control and governance processes. An Audit Committeeconsisting of three independent non-executive directors inter alia monitors performanceof Internal Audit on a periodical basis through review of the audit plans audit findingsand promptness of issue resolution through follow-ups.
Your Company continues to be focused towards employee empowerment. We acknowledge thecommitment and dedication of our team. With expanding operations we continue to build ourteam with on-board training across various processes..
Estimates and expectations stated in this Management Discussion and Analysis may be aforward-looking statement within the meaning of applicable securities laws andregulations. Actual results could differ materially from those expected or implied.Important factors that could make a difference to your Company s operations includeeconomic conditions affecting demand/supply price conditions in the domestic andinternational markets changes in the Government regulations tax laws other statutes andother incidental factors.
MATERIAL CHANGES AND COMMITMENTS OCCURRED BETWEEN THE DATE OF BALANCE SHEET AND THEDATE OF AUDIT REPORT
No significant material changes and commitments have occurred between the date of thebalance sheet and the date of the audit report
SIGNIFICANT AND MATERIAL ORDERS PASSED BY REGULATORS/COURTS/TRIBUNALS
There are no significant and material orders passed by Regulators/Court/Tribunalsagainst the company.
ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS
The Company has in place proper and adequate internal control systems commensurate withthe nature of its business size and complexity of its operations. Internal controlsystems comprising of policies and procedures are designed to ensure liability offinancial reporting timely feedback on achievement of operational and strategic goalscompliance with policies procedure applicable laws and regulations and that all assetsand resources are acquired economically used.
Relationship with the customers in the textile business has opened up a new businessavenue for the company. Your directors are exploring the opportunities to venture intotextile products to increase the business volume
Subsidiaries / Joint Ventures
There are no subsidiaries and Joint venture Companies.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGOA.CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION
Since the Company is engaged in the Computer Software Development the question ofconservation of Energy and Technology Absorption does not arise.
B. FOREIGN EXCHANGE EARNING AND OUTGO
There was no foreign exchange expenses and income during the year.
1. Details of Managerial Remuneration required to be Disclosed in Boards Report as perSection 197(12) of the Companies Act 2013 and read with Rule 5(1) of the CompaniesAppointment and Remuneration of Managerial Personnel) Rules 2014:-
**Mr. V. Ramani resigned from directorship on 8th June 2015
There is no employee who is withdrawing remuneration more than 60 Lacs per annum morethan 5 Lacs per month and more than remuneration of Managing Director or Whole TimeDirector
The board confirms that the remunerations paid to the directors is as per theremuneration policy.
2. STATEMENT OF PARTICULARS OF EMPLOYEES PURSUANT TO PROVISIONS OF SECTION 197(12) OFTHE COMPANIES ACT 2013 READ WITH RULE 5(2) And RULE 5 (3) of COMPANIES (APPOINTMENT ANDREMUNERATION OF MANAGERIAL PERSONNEL) RULES 2014
A. Employed throughout the year and in receipt of remuneration in aggregate of not lessthan Rs. 60 Lakhs per annum
---- None ----
B. for part of the year and in receipt of remuneration of more than Rs. 5 Lakhs permonth
---- None ----
C. If employed throughout the FY or part thereof was is in receipt of remuneration inexcess of that drawn by the Managing Director or WTD or Manager and holds himself or alongwith his spouse and dependent children not less than 2% of equity shares of the Company.
---- None ----
RISK MANAGEMENT POLICY
The risk management policy of the company rectifies the risk and controlling mitigatingfactors. The risk as identified by the company does not threaten the existence of thecompany
DIRECTORS RESPONSIBILITY STATEMENT
The Directors confirm:
1. That in the preparation of Annual Accounts the applicable Accounting Standards havebeen followed and no material departures have been made from the same.
2. That they have selected such accounting policies and applied them consistently andmade judgments and estimates that are reasonable and prudent so as to give a true and fairview of the state of affairs of the company for that period.
3. That they have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 1956 forsafeguarding the assets of the company preventing and detecting fraud and otherirregularities.
4. That they have prepared the annual accounts on the going concern basis
5. The Directors have laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and are operatingeffectively
6. The Directors had devised proper system to ensure that systems to ensure compliancewith the provisions of all applicable laws and that such systems are adequate andoperating effectively
DETAILS OF MEETINGS OF THE BOARD OF DIRECTORS
The Board met 9 (Nine times) on the following dates during the financial year 2015 -16
A report on Corporate Governance pursuant to clause 49 is annexed hereto and formspart of this report. A certificate from Mr. A. Saravanan Chartered Accountants TirupurStatutory Auditors of the Company regarding compliance of conditions of corporategovernance stipulated by the stock exchanges is annexed to this report.
An extract of Annual Return as on 31 March 2016 pursuant to Section 92 ( 3) of theCompanies Act 2013 and forming part of the report is attached separately as Annexure-A
CODE OF CONDUCT
The Company has adopted a code of conduct for the Board of Directors and seniormanagement of the Company and all of them have affirmed compliance of the same.
MANAGEMENT DISCUSSIONS AND ANALYSIS REPORT
In accordance with the listing agreement the Management Discussion and Analysis Reportis annexed hereto and forms part of this report.
COMMITTEES OF THE BOARD
Currently the Board has 5 committees. The Audit Committee Nomination and RemunerationCommittee Risk Management Committee Corporate Social Responsibility Committee andStakeholders Relationship committee.
A detailed note on the Board and its committees is provided under the CorporateGovernance Report Section in this Report.
Your company has complied with the provisions of Section 177 of the Companies Act 2013as to constitution of Audit Committee with Mr. S Sonnachalam Mrs. P Parimala and Mr. S.Vasanthkumar are being members of the said committee. Mr. V Paranthaman is the Chairman ofthe committee. The committee met 7 times during the year.
The Company has not accepted any deposit from the public during the year under review.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THE COMPANIESACT 2013
There were no loans guarantees or investments made by the Company under Section 186 ofthe Companies Act 2013 during the year under.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES.
All Contracts/arrangements/transactions entered by the company during the financialyear 2015-16 with related parties were in the ordinary course of business and on an arm slength basis. Details given in the Annexure-E
DETAILS OF POLICY DEVELOPED AND IMPLEMENTED BY THE COMPANY ON ITS CORORATE SOCIALRESPONSIBILITY INITIATIVES.
The Companies Act 2013 lays down a mandatory provision wherein every company havingNet worth of rupees five hundred crore or more or Turnover of rupees one thousand croreor more or Net profit of rupees five crore or more during any financial year shallconstitute a Corporate Social Responsibility Committee of the Board consisting of three ormore directors out of which at least one director shall be an independent director. Asthe said provisions are not applicable to the company it has not developed andimplemented any Corporate Social Responsibility initiatives.
FORMAL ANNUAL EVALUATION OF PERFORMANCE OF THE BOARD AND ITS COMMITTEES
The manner in which the formal evaluation of the members of both the board and variouscommittees constituted by the company has been covered in the Corporate Governance Reportto this report.
The following policies relating to appointment of Directors payment of Managerialremuneration Directors qualifications positive attributes independence of Directors andother related matters as provided under Section 178(3) of the Companies Act 2013 of thecompany are attached for (a) Policy relating to selection of directors appointment.-Annexure -C (B) Remuneration Policy for directors Key Managerial Personnel and otheremployees.- Annexure-D
The Shares of your company is presently listed in the Bombay Stock Exchange (BSE).DIRECTORS a. Re-appointment:
Mr. S Sonaachalam Director of the Company retires by rotation at this Annual Generalmeeting and being eligible offers himself for appointment.
On 31st March 2015 Mr. V Paranthaman has joined the Board as Independent Director& Mrs. P Parimala was inducted into the Board as Independent & Women Director.
Mr. V Ramani resigned from directorship and all committee on 8th June 2015.
Pursuant to the provisions of Section 149 (6) of the Act the Independent Directors ofthe Company have submitted their declaration that each of them meets the criteria ofindependence as provided in Section 149(6) of the Act and there has been no change in thecircumstances which may affect their status as independent director during the year2015-2016
Mr. A Saravanan Chartered Accountants Tirupur the Statutory Auditor of the Companyhold office until the conclusion of the ensuing Annual General Meeting. He was appointedas Auditor of the Company during the transitional period of 3 years at the 20th AnnualGeneral Meeting held on 29th September 2014 subject to ratification by the members atevery AGM held after 20th AGM. His appointment was ratified at the 21st Annual GeneralMeeting held on 29th September 2015 till the conclusion of next Annual General Meeting(23rd AGM). The Statutory Auditor has confirmed that his appointment if made would be inaccordance with the provisions of Sec.141 of the Companies Act 2013 read with Companies(Audit and Auditors) Rules 2014.
He is eligible for ratification/re-appointment from the ensuing AGM till the conclusionof next AGM only as provided in Section 139(2) of the Companies Act 2013 read withremoval of difficulties order dated 30th June 2016.
The Auditors Report on the financial statements of the company for financial year ended31st March 2016 does not contain any reservation qualification or adverse remarks andtheir report together with notes to Financial Statements are self-explanatory and hence donot call for any further comments under Section 134 of the Companies Act 2013.
The Board has appointed Mr.P Thirumalaikumar Practicing Company Secretary to conductSecretarial Audit for the financial year 2015-16. The Secretarial Audit report for thefinancial year ended March 31 2016 is annexed herewith. Annexure-B.
Auditors had not made any qualification or did not make any adverse remark in theirreport regarding financial statements. Therefore there is no need for any clarificationor any comment on Auditors report.
The observations mentioned in the Secretarial Audit Report by the Secretarial Auditorare self explanatory.
During the financial year the Company had not issued any Equity Shares withDifferential rights any Sweat Equity Shares and any Employee Stock Options.
India is the seventh largest country in the world by geographical area. While progressin the environmental front is being made India still faces some major challenges..Despite highly evolved environmental laws and regulations in some areas manyenvironmental practices such as regulation of air pollutants using model seen in westerncountries are still at a very rudimentary stage in India. Increased environmentalregulations will likely become a key area of concern in the near future.
The increasing desire of Indian companies to meet world class standards has causedestablished companies in India to take on sustainable initiatives as a means of improvingtheir global brand and reputation and the environmental sector is expected to be at theforefront of India's evolving story in the coming years.
The Company has already considered the prerequisites of environment compliance long wayback and is doing new initiative every year. Some of the major initiatives of regularbasis are:
Slogan of the Company One planet one earth one nature which propagates Save the earthfor better tomorrow .
By regular training for workers and staff to prevent accident related to mechanicalelectrical chemical physiological and psychological safety the Company has made Zeroincidents as acceptable standard.
The Company has started project to conserve water and energy minimize generation ofwaste minimize carbon foot print generate pollution prevention awareness throughout theplant and to achieve 100 percent legal compliance.
The Management is grateful to the shareholders valued customers bankers and vendorsfor the continued support and co-operation.
The Director also wishes to place on record their appreciation of the support andco-operation of all employees to enable the company to achieve its growth plans.