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Archana Software Ltd.

BSE: 530565 Sector: IT
NSE: SSLFINANCE ISIN Code: INE149B01015
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NSE 05:30 | 01 Jan Archana Software Ltd
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VOLUME 35
52-Week high 4.70
52-Week low 1.84
P/E 13.89
Mkt Cap.(Rs cr) 2
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 2.50
CLOSE 2.50
VOLUME 35
52-Week high 4.70
52-Week low 1.84
P/E 13.89
Mkt Cap.(Rs cr) 2
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Archana Software Ltd. (SSLFINANCE) - Director Report

Company director report

Dear Shareholders

Your Directors have pleasure in presenting the Twenty Third Annual Report on theworking of the Company along with the audited Balance Sheet and Profit Loss Account forthe year ended 31st March 2017.

FINANCIAL RESULTS

Rs. in Lacs

Particulars

2016-2017

2015-2016

Sales Income 537.46 192.28
Profit / (Loss) before Tax 1.42 (10.07)
Profit / (Loss) after Tax 1.19 (10.29)
Balance carried to Balance Sheet (657.35) (658.55)

DIVIDEND

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.5.37 crores and Net Profitof Rs.1.19 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

As per IMF Global growth currently estimated at 3.1 percent in 2015 is projected at3.4 percent in 2016 and 3.6 percent in 2017. The pickup in global activity is projected tobe more gradual than in the October 2015 World Economic Outlook (WEO) especially inemerging market and developing economies. In advanced economies a modest and unevenrecovery is expected to continue with a gradual further narrowing of output gaps. Thepicture for emerging market and developing economies is diverse but in many caseschallenging. The slowdown and rebalancing of the Chinese economy lower commodity pricesand strains in some large emerging market economies will continue to weigh on growthprospects in 2016 17. The projected pickup in growth in the next two years despite theongoing slowdown in China primarily reflects forecasts of a gradual improvement of growthrates in countries currently in economic distress notably Brazil Russia and somecountries in the Middle East though even this projected partial recovery could befrustrated by new economic or political shocks. Risks to the global outlook remain tiltedto the downside and relate to ongoing adjustments in the global economy: a generalizedslowdown in emerging market economies China s rebalancing

Indian Textile Industry

The textile and apparel industry can be broadly divided into two segments - yarn andfibre and processed fabrics and apparel. India accounts for 14 per cent of the world sproduction of textile fibres and yarns (largest producer of jute second largest producerof silk and cotton and third largest in cellulosic fibre). India has the highest loomcapacity (including hand looms) with 63 per cent of the world s market share. The domestictextile and apparel industry in India is estimated to reach US$ 141 billion by 2021 fromUS$ 67 billion in 2014. Increased penetration of organised retail favourabledemographics and rising income levels are likely to drive demand for textiles. India isthe world s second largest exporter of textiles and clothing.

Textile and apparel exports from India are expected to increase to US$ 82 billion by2021 from US$ 40 billion in 2014. Readymade garments remain the largest contributor tototal textile and apparel exports from India. In FY15-16 the segment had a share of 40 percent of all textile and apparel exports. Cotton and man-made textiles were the other majorcontributors with shares of 31 per cent and 16 percent respectively. Rising governmentfocus and favourable policies is leading to growth in the textiles and clothing industry.Foreign direct investment (FDI) in textile sector increased to US$ 1587.8 million inFY15-16 from US$ 1424.9 million in FY14-15. The Ministry of Textiles is encouraginginvestments through increasing focus on schemes such as Technology Up-gradation FundScheme (TUFS). To promote apparel exports 12 locations have been approved by thegovernment to set up apparel parks for exports. As per the 12th Five Year Planthe Government plans to provide a budgetary support of US$ 4.25 billion to textiles. Freetrade with ASEAN countries and proposed agreement with European Union will also help boostexports. In the near future India s apparel exports to developed markets are expected toincrease considerably. Total exports of textiles and apparel are expected to touch US$ 65billion by March 2017.

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.

Future Outlook

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 government policies aresome of the issues that needs to be taken care of your company is taking efforts to cutdown dependence to outside forces Your Company has a well documented Risk ManagementPolicy. This policy is reviewed by the Management periodically and is appropriatelymodified wherever 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.

Human Resources

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..

Cautionary statement

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.

FUTURE PLAN

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 OUTGO

A.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.

MANAGERIAL REMUNERATION

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:-

Name of the Director Designation Remuner ation Paid in FY 2016-2017 (in RS) Remuneratio n Paid in FY 2015-2016 (in RS) % increase of remuneratio n in 2017 as compared to 2016 previous year Ratio/Times per Median of employee remuneratio n
S VasanthKumar Non-
excutive NIL NIL NA NA
Director
V Paranthaman Independent NIL NIL N A NA
Director
Chikalpat Wholetime 120000 120000 N A NA
Yogesh Pai Director
S Sonaachalam Independent NIL NIL NA NA
Director
P Parimala Independent NIL NIL NA NA
Director
K P Appusamy CEO 72000 72000 NA NA
G Narendiran CFO 60000 60000 NA NA

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 AccountingStandards have been followed and no material departures have been made from the same.

2. That they have selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the company for that period.

3. That they have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act 1956for safeguarding 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 bythe company and that such internal financial controls are adequate and are operatingeffectively

6. The Directors had devised proper system to ensure that systems to ensurecompliance with the provisions of all applicable laws and that such systems are adequateand operating effectively

DETAILS OF MEETINGS OF THE BOARD OF DIRECTORS

The Board met 9 (Nine times) on the following dates during the financial year 2016 -17

Date of Board Few Main Agendas discussed
meeting
30th April 2016 Adoption of Un-Audited Quarterly & Annual Financial Results for the year ended 31st March 2016
13th May 2016 Review of business Reports of various committees. Adoption of Audited Financial Results for the year 2015-2016.
15th June 2016 Review of Business Operation of the Company.
30th July 2016 1. Adoption of Unaudited Financial Results for the Quarter ended 30 th June 2016
2. Adoption of AGM Notice proposed AGM transactions draft resolutions Audited Accounts Auditors Reports Notes on Accounts Annexures to the Auditors Report Directors Report etc for the year 2015-2016.
15th September 2016 Business Review
29th October 2016 Adoption of Unaudited Financial Results for the Quarter & half yearly ended 30th September 2016
10th December 2016 Business Review
30th January 2017 Adoption of Unaudited Financial Results for the Quarter ended 31st December 2016
Adoption of Ralated Party Transactions.
24th March 2017 Business Review

CORPORATE GOVERNANCE:

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.

ANNUAL RETURN

An extract of Annual Return as on 31 March 2017 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 9 times during the year.

PUBLIC DEPOSIT

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.

Prior approval / Omnibus approval is obtained from the Audit Committee for all relatedparty transactions and the transactions are periodically placed before the Audit Committeefor its approval. Transactions with the related party is material in nature in accordancewith Company's "Related Party Transaction Policy" and Regulation 23 of SEBI(LODR) Regulations 2015.

All Contracts/arrangements/transactions entered by the company during the financialyear 2016-2017 with related parties were in the ordinary course of business and on an arms length 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

LISTING

The Shares of your company is presently listed in the Bombay Stock Exchange (BSE).

DIRECTORS

a. Re-appointment:

Mr. S Vasanthkumar Director of the Company retires by rotation at this Annual Generalmeeting and being eligible offers himself for appointment.

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 year2016-2017

AUDITORS

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 20thAnnual General Meeting held on 29th September 2014 subject to ratification bythe members at the 21st & 22nd Annual General Meeting and tillthe conclusion of ensuing Annual General Meeting (23rd AGM). Now his officecomes to and end as the period gets completed.

The Board of Directors wish to place on record their sincere appreciation for theservices rendered by Mr. A Saravanan Chartered Accountants during his tenure as StatutoryAuditors of the Company.

Subject to the approval of the Members of the Company at the ensuing 23rdAnnual General Meeting the Board of Directors have recommended the appointment of M/s.G.K.P Associates Chartered Accountants as Statutory Auditors of the Company pursuant toSection 139 of the Companies Act 2013. The Audit Committee at its meeting held on 27thMay 2017 had recommended their appointment as Statutory Auditors pursuant to Section 139(11) of the Companies Act 2013. Written consents from the incoming Auditors have beenobtained confirming that they satisfy the legal requirements for their appointment. Theproposal relating to their appointment has been included in the notice convening the 23rdAnnual General Meeting of the Company. They shall hold office from the conclusion of 23rdAnnual General Meeting to the conclusion of 24th Annual General Meeting.

The Auditors Report on the financial statements of the company for financial year ended31st March 2017 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 2016-2017. The Secretarial Audit report for thefinancial year ended March 31 2017 is annexed herewith. Annexure-B.

BOARD S VIEW ON AUDITORS REPORT

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.

For & On behalf of Board of Directors

Chikalpat Yogesh Pai S Vasanthkumar
WholeTime Director Director
DATE : 31.07.2017.
PLACE: CHENNAI