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Hypersoft Technologies Ltd.

BSE: 539724 Sector: IT
NSE: N.A. ISIN Code: INE039D01014
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OPEN 9.37
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VOLUME 5500
52-Week high 11.65
52-Week low 8.80
P/E 187.40
Mkt Cap.(Rs cr) 4
Buy Price 0.00
Buy Qty 0.00
Sell Price 9.34
Sell Qty 8800.00

Hypersoft Technologies Ltd. (HYPERSOFT) - Director Report

Company director report

Dear Shareholders

Your Directors are happy to present 33rd Annual Report and the Financial Results forthe year ended on 31st March 2016.

1. Financial Results:

(Rs. in Lacs)

Particulars 2015-2016 2014-2015
Income from operations 286.81 224.58
Other Income 23.38 21.88
Total Income 310.19 246.46
Total Expenditure before depreciation 303.62 204.38
Profit / (Loss) before depreciation 6.57 42.08
Depreciation 3.84 4.11
Net Profit / (Loss) before Taxation 2.73 37.97
Provision for Taxation (0.52) (7.23)
Deferred Tax 0.43 1.33
Net Profit / (Loss) after Taxation 2.64 32.07

2. Management Discussion & Analysis (M D &A): Industry Structure anddevelopments:

The mobile app revolution is taking place and with India having the second largest userbase behind China it is reckoned that the consumer interest in mobile apps is growing ata rapid pace.

With the exponential growth of apps and the Make in India programme of the Governmentof India it is estimated that of the 500 million Indians on the Internet a large portionof them will be mobile-only.

A study published by Indian Council for Research on International Economic Relations(ICRIER) and Internet and Mobile Association of India (IAMAI) titled "An InquiryInto The Impact Of India’s App Economy" estimates the size of India’s appeconomy at Rs 1964 crore by 2016. As per estimates there are roughly three lakh appdevelopers in India.

Business Wire ( A Berkshire Hathaway Company ) expects the Global Mobile ApplicationsMarket is poised to grow at a CAGR of around 29.2% over the next decade to reachapproximately $1.3 trillion by 2025.

Opportunities and Threats:

Most of the mobile app market is tuned to the free app model or aps which cost betweenRs. 50 and Rs. 100. In the Commercial market place there are very few apps that are tunedto Business and Industry. A huge opportunity exists in this space.

Absence of skilled manpower high cost of development high cost of user acquisitionhyper competition driven by independent and freelance developers and the high cost ofmarketing are major impediments to growth.

Outlook:

With the evolution of our new mobile products we expect the market to accept ourproducts more readily and with online advertising which we have introduced the responsehas been up to the mark.

We have made significant investments in the mobile app sphere and expect them to bearfruit within the coming few months.

The projects with UID Authority of India are working as per the expectations of theCompany and are expected to be on similar lines as the previous year.

Risk and Concerns:

1. The first major problem developed in recent times subject to added different legallaws and norms.

2. Another major problem the need to develop the optimum mix of employees. A bigdilemma is to get the balance correct in terms of recruitment..

Internal control systems and their adequacy:

The Company has a proper and adequate system of internal controls. This ensures thatall transactions are authorized recorded and reported correctly and assets aresafeguarded and protected against loss from unauthorized use or disposition. In additionthere are operational controls and fraud risk controls covering the entire spectrum ofinternal financial controls. The Company has an Internal Control System commensurate withthe size scale and complexity of its operations.

Discussion on financial performance with respect to operational performance:

During the year under review your Company made a Turnover of Rs. 310.19 Lakhs asagainst Rs. 246.47 Lakhs for the previous year and incurred a profit of Rs. 2.64 Lakhs asagainst a profit of Rs. 32.07 Lakhs for the previous year the Company anticipates moreprofits in the coming years.

Material development in Human Resource & Industrial Relations:

There are no significant developments in human resources and number of people employed.However all our efforts were made to retain the talent and improve the productivity.

3. Change in the nature of business

There were no changes in the nature of business of the Company during the financialyear 2015-16.

4. Deposits: The Company has not accepted any deposits from the publicduring the year in pursuant to Section 73 of the Companies Act 2013.

5. Material Changes and Commitments

There are no significant material changes and commitments affecting financial positionof the company between 31st March 2016 and the date of this report.

6. Number of meetings of the Board:

The Board of Directors met 6 (six) times during this financial year on 29th May 201525th July 2015 25th August 2015 30th October 2015 10th November 2015 and 20thJanuary 2016.

7. Extract of Annual Return

As required pursuant to section 92(3) of the Companies Act 2013 and rule 12(1) of theCompanies (Management and Administration) Rules 2014 an extract of annual return in MGT9 as a part of this Annual Report (Annexure-I).

8. Policy on directors’ appointment and remuneration

The current policy is to have an appropriate mix of executive and independent directorsto maintain the independence of the Board and they demark their functions of governanceand management. As on March 31 2016 the Board consists of 5(five) members two of whomare executive one is non-executive and two are independent directors. The Boardperiodically evaluates the need for change in its composition and size. The policy of theCompany on directors’ appointment and remuneration including criteria fordetermining qualifications positive attributes independence of a director and othermatters provided under Sub-Section (3) of Section 178 of the Companies Act 2013 adoptedby the Board is appended as Annexure-II to the Board’s report. We affirm that theremuneration paid to the directors is as per the terms laid out in the nomination andremuneration policy of the Company.

9. Directors and Key Managerial Personnel:

The following changes took place in the composition of the Board of Directors for theFY 2015-16:

1) Appointment of Mr. K. S Hanumaiah as a Whole time Director of the Company w.e.f.29thMay 2015

2) Regularization of Mr. K. S Hanumaiah and Ms. Geeta Feroz Bhote as Directors of theCompany w.e.f 29th September 2015.

3) Appointment of Ms. Khushboo Joshi as Whole-time Company Secretary of the Companyw.e.f. 1st August 2015.

10. Declaration given by Independent Directors:

The Company has received necessary declaration from each independent director underSection 149(7) of the Companies Act 2013 that they meets the criteria of independencelaid down in Section 149(6) of the Companies Act 2013 and Clause 49 of the ListingAgreement and SEBI (Listing Obligations and Disclosure Requirement) Regulations 2015.

11. Contracts and arrangements with Related Parties under Section 188

The Company has not entered into any contracts or arrangements with related partiesduring the financial year. Therefore AOC-2 is not required to be enclosed to this report.

12. Particulars of loans guarantees or investments under Section 186

The Company has not made any investments and has not given any loan or guarantee undersection 186 of the companies Act 2013.

13. Risk Management

The Company has developed and implemented a risk management framework that includesidentification of elements of risk if any which in the opinion of the Board may threatenthe existence of the Company.

The following broad categories of risks to the business objectives have been consideredin our risk management framework:

• Strategy: Risks to the successful execution of the Company’sarticulated strategies. These originate from the choices we make on markets business mixresources and delivery models that can potentially impact our competitive advantage in themedium and long term. Risks related to scalability and sustainability of our businessmight also have an impact on our business.

• Industry: Risks relating to the inherent characteristics of our industrysuch as competitive structure emergence of new business models technological landscapeextent of linkage to economic environment and regulatory structure.

• Counterparty: Risks arising from our association with entities forconducting business. The counterparties include clients vendors alliance partners andtheir respective industries. Counterparty risks include those relating to litigation andloss of reputation.

• Resources: Risks arising from inappropriate sourcing or sub-optimalutilization of key organizational resources such as financial capital talent andinfrastructure.

• Operations: Risks inherent to business operations including those relatingto client acquisition service delivery to clients business support activitiesinformation security intellectual property physical security and business activitydisruptions. Operational risks are assessed primarily on three dimensions — businessprocess effectiveness compliance to policies and procedures and strength of underlyingcontrols.

• Regulatory environment: Risks due to adverse developments in the regulatoryenvironment that could potentially impact our business objectives and lead to loss ofreputation.

• Societal: Risks and opportunities relating to our focus on the environmentand society at large. Environmental focus includes conservation of essential resourcessuch as water and energy disposal of waste minimizing emissions etc. Social focusincludes projects to impact the communities in the regions where we operate.

14. Subsidiaries Associate Companies and Joint Ventures

The Company does not have any subsidiaries Associate Companies or Joint Ventures.

15. Annual Evaluation of Board’s Performance

The Evalution policy provides for evaluation of the Board the Committees of the Boardand individual Directors. The Policy provides that evaluation of the performance of theBoard and Committees of Board shall be carried out on an annual basis.

The Evaluation process focused on various aspects of the Board and Committeesfunctioning such as composition of the Board and Committees experience and competenciesperformance of specific duties and obligations governance issues etc. A separate exercisewas carried out to evaluate the performance of individual Directors on parameters such asattendance contribution and independent judgment.

The results of the Evaluation were shared with the Board Chairman of respectiveCommittees and individual Directors. Based on the outcome of the Evaluation the Board andCommittees have agreed on the action plan to improve on the identified parameters.

16. Transfers to reserves

The Company has not transferred any amount to the reserves in the financial year.

17. Dividend

In view of the accumulated losses the Directors express their inability to recommenddividend during the year.

18. Auditors

At the Annual General Meeting held on 29th September 2015 Ramanatham & RaoChartered Accountants bearing Firm Registration Number 002934S has been appointed asStatutory Auditors of the Company to hold office till the conclusion of the 34th AnnualGeneral Meeting to be held in the year 2017. In terms of the first proviso to section 139of the Companies Act 2013 the appointment of the auditors shall be placed forratification at every Annual General Meeting. Accordingly the appointment of Ramanatham& Rao Chartered Accountants as statutory auditors of the Company is placed forratification by the shareholders. In this regard the Company has received a certificatefrom auditors to effect that if they are reappointed it would be in accordance with theprovisions of section 141 of the Companies Act 2013.

Secretarial Auditor:

R & A Associates Practicing Company Secretaries was appointed to conduct thesecretarial audit of the Company for the financial year 2015-16 as required under Section204 of the Companies Act 2013 and Rules thereunder.

The secretarial audit report for financial year 2015-16 forms part of the Annual Reportas Annexure-III to the Board’s report.

19. Corporate Governance:

A report on the Corporate Governance which inter alia includes the compositionand construction of Audit Committee is featuring as a part of Annual Report. Your Companywill continue to adhere in letter and spirit to the good corporate governance policies.Pursuant to the Provisions of Clause 49 of the Listing Agreement ("Listing Agreement)of the Company with the Stock Exchanges for the period 1st April 2015 to 30th November2015 and as per the relevant provisions of Securities Exchange Board of India (ListingObligations And Disclosure Requirements) Regulations 2015 ("ListingRegulations") as referred to in Regulation 15 (2) of the Listing Regulations for theperiod 1st December 2015 to 31st March 2016 a certificate from the auditors of theCompany is enclosed.

20. CEO’s Declaration:

Pursuant to the provisions of Listing Regulations a declaration by the ManagingDirector of the Company declaring that all the members of the Board and the SeniorPersonnel of the Company have affirmed compliance with the Code of Conduct of the Companyis enclosed. The same can be viewed on the website of the Company atwww.hypersoftindia.net.

21. Directors’ Responsibility Statement:

In accordance with the provisions of the section 134(c) of the Companies Act 2013 andbased on the information provided by the management your directors state that:

a. In the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures;

b. The directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to givea true and fair view of the state of affairs of the Company at the end of the financialyear and of the profit of the Company for that period;

c. The directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;

d. The directors had prepared the annual accounts on a going concern basis.

e. The directors had laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively.

f. The directors had devised proper systems to ensure compliance with the provisions ofall applicable laws and that such systems were adequate and operating effectively.

22. Corporate Social Responsibility – Not Applicable

23. Significant and material orders

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.

24. Secretarial Standards

The Company is in compliance of Secretarial Standards during the F.Yr. 2015-2016.

25. Internal Financial Controls

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 theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial disclosures.

26. Whistle Blower Policy/ Vigil Mechanism

To create enduring value for all stakeholders and ensure the highest level of honestyintegrity and ethical behavior in all its operations the company has formulated a VigilMechanism/ Whistle Blower Policy that governs the actions of its employees. This Whistleblower Policy/ Vigil Mechanism aspires to encourage all employees to report suspected oractual occurrence(s) of illegal unethical or inappropriate events (behaviors orpractices) that affect Company’s interest / image.

A copy of the Policy is available on the website of the Company.

27. Disclosures Under Sexual Harassment Of Women At Workplace (Prevention Prohibition& Redressal) Act 2013

The Company has zero tolerance for sexual harassment at workplace and has adopted apolicy on prevention prohibition and redressal of sexual harassment at workplace in linewith the provisions of the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013 and the rules thereunder for prevention and redressalof complaints of sexual harassment at workplace. During the financial year 2015-16 theCompany has not received any complaints on sexual harassment.

28. Conservation of Energy & Technology Absorption Foreign Exchange Earnings andOutgo:

A. Conservation of Energy:

(a) Energy Conservation measures taken: Your Company’s operations are softwareoriented and not energy intensive. Adequate measures have been taken to conserve energywherever possible by using energy-efficient computers and equipment.

(b) Additional investments and proposals if any being implemented for reduction ofconsumption of energy: Exchanging legacy CRT monitors with LCD power saving monitors.

(c) Impact of the measures (a) and (b) above for energy consumption and consequentimpact on the cost of production of goods: As energy conservation is very meager andenergy cost forms a small part of total costs the impact of costs is not material.

B. Technology Absorption:

Research and Development (R & D):

1. Specific areas in which R & D carried out by the Company:

The Company continues to focus and invest in R & D activities for developing andimproving the quality and enhancing the benefits of its software products. The Company isa product oriented Company and the continuous development of new products and the existingproducts is an ongoing exercise.

2. Benefits derived as a result of the R & D:

Research and development of new products & processes will continue to be ofimportance to your Company. Products although have a longer gestation are of higherbenefit to the Company and its profitability in the long run.

3. Future plan of Action:

The Company continues to strive for development and innovation of new products andimproving the existing ones in order to meet the changing requirements and to cater tocustomer needs.

4. Expenditure on R & D: NIL

Adaptation and Innovation:

As a result of new partnerships the Company now has absorbed new technologies and willresult in better adaptation to Indian customer needs.

C. Foreign Exchange Earnings & Outgo:

Particulars 2015-2016 (in Rs.) 2014-2015 (in Rs.)
Foreign Exchange Earnings - 18435
Foreign Exchange Outgo: - -
Purchase - -
Expenses - -

29. Appreciation:

Your Directors place on record their appreciation of the continued assistance andco-operation extended by the shareholders customers bankers and the dedicated employeesand the business associates.

For and on behalf of Board of Directors
Place: Secunderabad (F.R. Bhote)
Date : 27th July 2016 Managing Director
DIN: 00156590

Statement of Disclosure of Remuneration Under Section 197 of Companies Act 2013 andRule 5(1) of Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014

1. The ratio of the remuneration of each director to the median remuneration of theemployees of the company for the financial year 2015-2016Aggregate remuneration of KeyManagerial Personnel in FY 2015-16

Sl. No. Name of Director Designation Ratio of remuneration of each Director to median remuneration of Employees
1. Mr. F.R.Bhote Managing Director 2.65
2. Mr. K S Hanumaiah Whole Time Director 1.47

2. Percentage increase in remuneration of each director and CFO in the financial year2015-2016

Sl. No. Name of Director/CFO Designation % increase in Remuneration in the Financial Year 2015-16
1. Mr. F.R.Bhote Managing Director Nil
2. Mr. K S Hanumaiah Whole Time Director NA since appointed on 29th May 2015
3. Mr. Khudaventh CFO 8.11
4. Ms. Khushboo Joshi Company Secretary NA since appointed on 1st August 2015

3. The percentage increase in the median remuneration of employees in the financialyear 2015-2016 was NIL

4. There are 16 (Sixteen) permanent employees on the rolls of company

5. Relationship between average increase in remuneration and company performance:

The reward philosophy of the Company is to provide market competitive total rewardopportunity that has a strong linkage to and drives performance culture. Every year thesalary increases for the Company are decided on the basis of a benchmarking exercise thatis undertaken with similar profile organizations. The final salary increases given are afunction of Company’s market competitiveness in this comparator group as well asoverall business affordability. During the year similar approach was followed toestablish the remuneration increases to the Employees. Variable compensation is anintegral part of our total reward package and is directly linked to an individualperformance rating and business performance. Salary increases during the year were in linewith Company’s performance as well as per Company’s market competitiveness.

6. Comparison of the remuneration of the Key Managerial Personnel against theperformance of the Company:

Aggregate remuneration of Key Managerial 1709387
Personnel in FY 2015-16 (Rs.)
Total Revenue of the Company in FY 2015-16 (Rs.) 31019611
Remuneration of KMP (as % of revenue) 5.51

7. Variations in the market capitalization of the Company price earnings ratio as atthe closing date of the current financial year and previous financial year and percentageincrease over decrease in the market quotations of the salaries of the Company incomparison to the rate at which the company came out with the last public offer thevariations in the net worth of the Company as at the close of the current financial yearand previous financial year –N.A

8. Average percentage increase made in the salaries of Employees other than themanagerial personnel in the financial year was 6.77% whereas the increase in themanagerial remuneration was NIL

9. Comparison of each remuneration of the KMP against the performance of the company:

Particulars Managing Director Whole time Director CFO CS
Remuneration of Key
Managerial Personnel
in FY 2015-16 636000 353387 480000 240000
Total Revenue of the
Company in FY 2015-16 31019611 31019611 31019611 31019611
Remuneration of
KMP (as % of revenue) 2.05 1.14 1.55 0.77

10. The key parameters of any variable component of remuneration availed by thedirectors - Nil

11. The ratio of the remuneration of the highest paid director to that of the employeeswho are not directors but receive remuneration in excess of the highest paid directorduring the year - Nil

12. It is hereby affirmed that the remuneration paid is as per the remuneration policyof the Company.

For and on behalf of Board of Directors
(F.R. Bhote)
Place: Secunderabad Managing Director
Date : 27th July 2016 DIN: 00156590

Annexure I to Director’s Report

Form No.MGT-9

EXTRACT OF ANNUALRETURN

As on the financial year ended on 3103.2016

[Pursuant to section 92(3) of the Companies Ac 2013 and rule 12(1) of the

Companies(Management and Administration)Rules2014]

I. REGISTRATIONANDOTHERDETAILS:

i CIN L29309TG1983PLC003912
ii Registration Date 18th April 1983
iii Name of the Company Hypersoft Technologies Limited
iv Category/Sub-category of the Company Company Limited By Shares
v Address of the Registered office& contact details Flat No. 28 Goyal Society Moti Valley
Tirmulgerry Secunderabad
Telangana-500015
vi Whether listed company Yes
vii Name Address & contact details of the Registrar & Transfer Agent if any. CIL Securities Ltd

II. PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY

All the business activities contributing 10% or more of the total turnover of thecompany shall be stated:-

SL No Name & Description of main Product /service NIC Code of the products/services % to total turnover of the company
Division – 62
Group – 620
Class – 6201
1 Software Maintenance

Sub-class – 62013

93.22%

III. PARTICULARS OF HOLDING SUBSIDIARY AND ASSOCIATE COMPANIES

Sl No Name & Address of the Company CIN/GLN HOLDING/ SUBSIDIARY/ ASSOCIATE % OF SHARES HELD

APPLICABLE SECTION

NIL

IV. SHAREHOLDING PATTERN(Equity Share Capital Breakup as percentage of Total Equity) i)Category-wise Share Holding

Category of Shareholders No. of Shares held at the end of the year[As on 31-March-2015] No. of Shares held at the end of the year[As on 31-March-2016]
Demat Physical Total % of Total Shares Demat Physical Total % of Total Shares % Chan ge during the year
A. Promoters
(1) Indian
a) Individual/HUF - 1771300 1771300 41..66 1767400 20900 1788300 42.06 0.40
b) Central Govt - - - - - - - - -
c) State Govt(s) - - - - - - - - -
d) Bodies Corp. - - - - - - - - -
e) Banks / FI - - - - - - - - -
f) Any other - - - - - - - - -
(2) Foreign
a) NRIs –
Individuals - - - - - - - - -
b) Other –
Individuals - - - -
c) Bodies Corp. - - - - - - - - -
d) Banks / FI - - - - - - - - -
e) Any Other…. - - - - - - - - -
Total shareholding of - 1771300 1771300 41.66 1767400 20900 1788300 42.06 0.40
Promoter (A)
B. Public
Shareholding
1. Institutions - - - - - - - - -
a) Mutual Funds - - - - - - - - -
b) Banks / FI - - - - - - - - -
c) Central Govt - - - - - - - - -
d) State Govt(s) - - - - - - - - -
e) Venture Capital Funds - - - - - - - - -
f) Insurance Companies - - - - - - - - -
g) FIIs - - - - - - - - -
h) Foreign Venture Capital Funds - - - - - - - - -
i) Others (specify) - - - - - - - - -
Sub-total (B)(1):-
2. Non- Institutions
a) Bodies Corp. 64650 381800 646450 15.20 267742 329900 597642 14.06 1.14
i) Indian - - - - - - - - -
ii) Overseas - - - - - - - - -
b) Individuals - - - - - - -
i) Individual shareholders holding nominal share capital uptoRs. 1 lakh 259650 455200 714850 16.81 285409 419100 704509 16.57 0.24
ii) Individual shareholders holding nominal share capital in excess of Rs 1 lakh 207000 748800 955800 22.48 224549 773400 997949 23.47 0.99
c) Others (specify) Non Resident Indians - 120000 120000 2.82 - 120000 120000 2.82
Overseas Corporate Bodies Foreign Nationals Clearing Members - - - - - - - - -
Trusts - - - - - - - - -
Foreign Bodies - - - - - - - - -
Directors/Relatives 43300 - 43300 1.02 43300 - 43300 1.02
Sub-total (B)(2):- 774600 1705800 2480400 58.34 821000 1642400 2463400 57.94 0.40
Total Public Shareholding (B)=(B)(1)+ (B)(2) 774600 1705800 2480400 58.34 821000 1642400 2463400 57.94 0.40
C. Shares held by Custodian for GDRs & ADRs - - - - - - - -
Grand Total (A+B+C) 774600 3477100 4251700 100 2588400 1663300 4251700 100

ii. Shareholding of Promoters

Shareholding at the beginning of the year Shareholding at the end of the year
Sl No. Shareholders Name No. of shares % of total shares of the com- pany % of shares pledged encumb ered to total shares No. of shares % of total shares of the com- pany % of shares pledged encumb ered to total shares % change in share holding during the year
1 Dadabhoy Rusi Bhote

803000

18.89

-

803000

18.89

-

-

2 Feroz Rusi Bhote 605650 14.24 - 605650 14.24 - -
3 Kashmira Dadabhoy Bhote 230900 5.43 - 230900 5.43 - -
4 R D Bhote 58250 1.37 - 58250 1.37 - -
5 Bhote Sillo Russi 36000 0.85 - 36000 0.85 - -
6 Rusi Holmusji Bajina 10100 0.24 - - - - -
7 Amy Russi Bajina 7500 0.18 - 23100 0.54 - 0.37
8 Bomi Rusi Bhote 5900 0.14 - 7500 0.18 - 0.04
9 Rita Bhote 14000 0.33 - 5900 0.14 - 0.19
10 Umez Bhote - - - 18000 0.42 - -
Total 1771300 41.66 - 1788300 42.06 - 0.40

** Shares Transmitted to Ms. Amy Russi Bajina existing Promoter of the Company

(iii)Change in Promoters’ Shareholding - 0.40% increase on total shares

(iv) Shareholding Pattern of top ten Shareholders (other than Directors Promoters andHolders of GDRs and ADRs):

Shareholding at the beginning of the year Cumulative Shareholding during the Year
Sl No. Name of the Shareholders No. of shares % of total shares of the company No. of shares % of total shares of the company
1. Savio Pinto
At the beginning of the year 250000 5.88 250000 5.88
Bought during the year
Sold during the year
At the end of the year 250000 5.88 250000 5.88
2. Zen Securities Ltd.
At the beginning of the year 200000 4.70 200000 4.70
Bought during the year
Sold during the year
At the end of the year

200000

4.70

200000

4.70

3. N C Nagarajan
At the beginning of the year 132900 3.13 132900 3.13
Bought during the year
Sold during the year
At the end of the year 132900 3.13 132900 3.13
4. Ranjit Malik
At the beginning of the year 120000 2.82 120000 2.82
Bought during the year
Sold during the year
At the end of the year 120000 2.82 120000 2.82
5. Latin Maharlal Securities Pvt Ltd
At the beginning of the year 100000 2.35 100000 2.35
Bought during the year
Sold during the year
At the end of the year 100000 2.35 100000 2.35
6. RVG Investments & Tech P Ltd
At the beginning of the year 100000 2.35 100000 2.35
Bought during the year
Sold during the year
At the end of the year 100000 2.35 100000 2.35
7. Bodhtree Consulting Ltd
At the beginning of the year 100000 2.35 100000 2.35
Bought during the year
Sold during the year
At the end of the year 100000 2.35 100000 2.35
8. Nallur Chandrasekaran Murthy
At the beginning of the year 100000 2.35 100000 2.35
Bought during the year
Sold during the year
At the end of the year 100000 2.35 100000 2.35
9. V Nagesh
At the beginning of the year 71000 1.67 71000 1.67
Bought during the year
Sold during the year
At the end of the year 71000

1.67

71000

1.67

10. Kirti D Shah
At the beginning of the year 60000 1.41 60000 1.41
Bought during the year
Sold during the year
At the end of the year 60000 1.41 60000 1.41

(v) Shareholding of Directors and Key Managerial Personnel:

Shareholding at the beginning of the year Cumulative Shareholding during the Year
Sl No. Name of the Director/KMP No. of shares % of total shares of the company No. of shares % of total shares of the company
1. F.R Bhote
At the beginning of the year 605650 14.24 605650 14.24
Date wise Increase / Decrease in

NIL

NIL

NIL

NIL
Promoters Shareholding during the year specifying the reasons for increase /decrease (e.g. allotment / transfer / bonus/ sweat equity etc): NIL
At the end of the year 605650 14.24 605650 14.24
2. N. Gowrishankar
At the beginning of the year Date wise Increase / Decrease in 43300 1.02 43300 1.02
Promoters Shareholding during the year specifying the reasons for increase / decrease (e.g. allotment / transfer / bonus/ sweat equity etc): NIL
At the end of the year 43300 1.02 43300 1.02
3. K S Hanumaiah
At the beginning of the year (appointed on 29th May 2016)

NIL

NIL

NIL

NIL
Date wise Increase / Decrease in Promoters Shareholding during the year specifying the reasons for increase / decrease (e.g. allotment / transfer / bonus/ sweat equity etc): 10000 0.23 10000 0.23
At the end of the year 10000 0.23 10000 0.23

V. INDEBTEDNESS

Indebtedness of the Company including interest outstanding/accrued but not due forpayment - NIL

VI. REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL

A. Remuneration to Managing Director

SN. Particulars of Remuneration Name of KMP
F.R. Bhote
1 Gross salary Rs.
(a) Salary as per provisions contained in section 17(1) of the Income-tax Act 1961 594873
(b) Value of perquisites u/s 17(2) Income-tax Act 1961 39353
(c) Profits in lieu of salary under section 17(3) Income- tax Act 1961 NIL
2 Stock Option NIL
3 Sweat Equity NIL
4 Commission- as % of profit- others specify…
5 Others please specify (PF) 54720
Total (A) 688946
Ceiling as per the Act 3000000

B. Remuneration to other Directors:

SN Particulars of Remuneration Name of the KMP
K S Hanumaiah
1 Gross salary Rs.
(a) Salary as per provisions contained in section 17(1) of the Income-tax Act 1961 336987
(b) Value of perquisites u/s 17(2) Income-tax Act 1961 NIL
(c) Profits in lieu of salary under section 17(3) Income-tax Act 1961 NIL
2 Stock Option NIL
3 Sweat Equity

NIL

4 Commission

NIL

- as % of profit NIL
others specify… NIL
5 Others please specify NIL
Total 336987
Ceiling as per the Act 3000000

C. Remuneration to Key Managerial Personnel other than MD/ Manager/ WTD:

SN Particulars of Remuneration Key Managerial Personnel
CFO CS
1 Gross salary Rs. Rs.
(a) Salary as per provisions contained in section 17(1) of the Income-tax Act 1961 412200 225600
(b) Value of perquisites u/s 17(2) Income-tax Act 1961 NIL NIL
(c) Profits in lieu of salary under section 17(3) Income-tax Act 1961 NIL NIL
2 Stock Option NIL NIL
3 Sweat Equity

NIL

NIL

4 Commission NIL NIL
- as % of profit NIL NIL
others specify… 38880 NIL
5 Others please specify

NIL

NIL

Total 451080 225600

VII. PENALTIES/PUNISHMENT/COMPOUNDING OF OFFENCES:

Type Section of the Companies Brief Description Details of Penalty/ Punishment/ Compounding fees imposed Authority (RD/NCLT/ Court) Appeal made if any (give details)
A. COMPANY
Penalty

NIL

NIL

NIL

NIL

NIL

Punishment

NIL

NIL

NIL

NIL

NIL

Compounding

NIL

NIL

NIL

NIL

NIL

B. DIRECTORS
Penalty NIL NIL

NIL

NIL

NIL

Punishment

NIL

NIL

NIL

NIL

NIL

Compounding NIL NIL

NIL

NIL

NIL

C. OTHER OFFICERS IN DEFAULT
Penalty NIL NIL

NIL

NIL

NIL

Punishment

NIL

NIL

NIL

NIL

NIL

Compounding NIL NIL

NIL

NIL

NIL

Annexure II to Director’s Report Nomination and Remuneration Policy

The Board of Directors are collectively responsible for selection of a member on theBoard. The Nomination and Remuneration Committee of the Company follows a defined criteriafor identifying screening recruiting and recommending candidates for election as aDirector on the Board. The criteria for appointment to the Board include:

• Composition of the Board which is commensurate with the size of the Companyits portfolio geographical spread and its status as a listed Company;

• Desired age and diversity on the Board;

• Size of the Board with optimal balance of skills and experience and balance ofExecutive and Non-Executive Directors consistent with the requirements of law;

• Professional qualifications expertise and experience in specific area ofbusiness;

The guiding principles for Company’s reward policies / practices are as follows:

1. Open Fair Consistent and Explainable: increase transparency and ensure fairnessand consistency in Reward framework.

2. Insight and Engagement: make Reward truly relevant to the employees by using leadingedge tools that helps the Company ‘hear’ how employees feel about their Reward.

3. Innovation: continuously improve Company’s Reward through innovations based oninsight analytics expertise.

4. Simplicity Speed and Accuracy: simplify reward plans and processes and deliver theinformation employees need quickly clearly and efficiently.

5. Business Results: Company’s business results are the ultimate test of whetherReward solutions are effective and sustainable.

The appointment of Executive Directors Key Managerial Personnel Management Committeemembers and other employees is by virtue of their employment with the Company asmanagement employees and therefore their terms of employment vis--vis salary variablepay service contract notice period and severance fee if any are governed by theapplicable policies at the relevant point in time. The total reward for ExecutiveDirectors Key Managerial Personnel and Management Committee members is reviewed andapproved by the Nomination and Remuneration Committee annually taking into accountexternal benchmarks.

Annexure III

SECRETARIAL AUDIT REPORT

FOR THE FINANCIAL YEAR ENDED 31ST MARCH 2016

[Pursuant to section 204(1) of the Companies Act 2013 and rule no .9 of theCompanies

(Appointment and Remuneration of Managerial Personnel) Rules 2014]

To

The Members

Hypersoft Technolgies Limited

28 Goyal Society Moti Valley

Tirmulgherry Secunderabad – 500015 Telangana

We have conducted the secretarial audit of the compliance of applicable statutoryprovisions and the adherence to good corporate practices by M/s. Hypersoft TechnologiesLimited (hereinafter called the "Company"). Secretarial Audit was conductedin a manner that provided us a reasonable basis for evaluating the corporateconducts/statutory compliances and expressing our opinion thereon.

Based on our verification of the Company’s books papers minute books forms andreturns filed and other records maintained by the Company and also the informationprovided by the Company its officers agents and authorized representatives during theconduct of secretarial audit we hereby report that in our opinion the Company hasduring the audit period covering the financial year ended on 31st March 2016 ("AuditPeriod") complied with the statutory provisions listed hereunder and also that theCompany has proper board processes and compliance-mechanism in place to the extent in themanner and subject to the reporting made hereinafter:

We have examined the books papers minute books forms and returns filed and otherrecords maintained by the Company for the financial year ended on 31st March 2016according to the provisions of:

(i) The Companies Act 2013 ("the Act") and the rules made thereunder.

(ii) The Securities Contracts (Regulation) Act 1956 (‘SCRA’) and the rulesmade there under;

(iii) The Depositories Act 1996 and the Regulations and Bye-laws framed there under;

(iv) Foreign Exchange Management Act 1999 and the rules and regulations madethereunder to the extent of Foreign Direct Investment;

(v) The following Regulations and Guidelines prescribed under the Securities andExchange Board of India Act 1992 (‘SEBI Act’):

a)The Securities and Exchange Board of India (Substantial Acquisition of Shares andTakeovers) Regulations 2011;

b)The Securities and Exchange Board of India (Prohibition of Insider Trading)Regulations 1992; c) The Securities and Exchange Board of India (Issue of Capital andDisclosure Requirements) Regulations 2009; (Not Applicable)

d) The Securities and Exchange Board of India (Employee Stock Option Scheme andEmployee Stock Purchase Scheme) Guidelines 1999 and The Securities and Exchange Board ofIndia (Share Based Employee Benefits) Regulations 2014 notified on 28 October 2014; (NotApplicable )

e) The Securities and Exchange Board of India (Issue and Listing of Debt Securities)Regulations 2008; (Not Applicable )

f) The Securities and Exchange Board of India (Registrars to an Issue and ShareTransfer Agents) Regulations 1993 regarding the Companies Act and dealing with client;

g) The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations2009; (Not Applicable) and

h) The Securities and Exchange Board of India (Buyback of Securities) Regulations1998; (Not Applicable)

We have also examined compliance with the applicable clauses of the following:

(i) Secretarial Standards issued by "The Institute of Company Secretaries ofIndia" on Meetings of the Board of Directors and General Meeting.

(ii) Listing Agreement entered into by the Company with Ahmedabad Stock ExchangeLimited and Securities and Exchange Board of India (Listing Obligations and DisclosureRequirements) Regulations 2015.

During the period under review the Company has complied with the provisions of the ActRules Regulations Guidelines Standards etc. mentioned above.

We further report that the Board of Directors of the Company is duly constituted withproper balance of Executive Directors Non-Executive Directors and Independent Directors.The changes in the composition of the Board of Directors that took place during the periodunder review were carried out in compliance with the provisions of the Act.

Adequate notice is given to all directors to schedule the Board Meetings agenda anddetailed notes on agenda were generally sent at least seven days in advance and a systemexists for seeking and obtaining further information and clarifications on the agendaitems before the meeting and for meaningful participation at the meeting.

All decisions at Board Meetings and Committee Meetings are carried out unanimously asrecorded in the minutes of the meetings of the Board of Directors or Committee of theBoard as the case may be.

We further report that the Company is engaged into software services and applicablespecific industry laws are in compliance.

We further report that there are adequate systems and processes in the Companycommensurate with the size and operations of the Company to monitor and ensure compliancewith applicable laws rules regulations and guidelines.

We further report that during the audit period the Company has made an application forlisting with BSE Limited on 14th September 2015 pursuant to which obtained the approvalletter for listing on 8th March 2016 and the equity shares of the Company are listed withBSE Limited with effect from 10th March 2016 and allotted SCRIP Code is 539724.

For R & A Associates
(G. Raghu Babu)
Partner
Place: Hyderabad FCS No.4448
Date: 27th July 2016 CP No. 2820

This report is to be read with our letter of even date which is annexed as"Annexure –A" attached herewith and forms an integral part of this report.

To

The Members

Hypersoft Technolgies Limited

28 Goyal Society Moti Valley

Tirmulgherry Secunderabad – 500015 Telangana

Our report of even date is to be read along with this letter:

1. Maintenance of secretarial records is the responsibility of the management of M/s.Hypersoft Technologies Limited ("the Company"). Our responsibility is toexpress an opinion on these secretarial records based on our audit.

2. We have followed the audit practices and processes as were appropriate to obtainreasonable assurance about the correctness of the contents of the Secretarial records. Theverification was done on the random test basis to ensure that correct facts are reflectedin secretarial records. We believe that the processes and practices we followed provide areasonable basis for our opinion.

3. We have not verified the correctness and appropriateness of financial records andBooks of Accounts of the Company.

4. The compliance of the provisions of Corporate and other applicable laws rulesregulations standards is the responsibility of management. Our examination was limited tothe verification of procedures on random test basis.

5. The Secretarial Audit report is neither an assurance as to the future viability ofthe Company nor of the efficacy or effectiveness with which the management has conductedthe affairs of the Company.

R & A Associates
(G. Raghu Babu)
Partner
Place: Hyderabad FCS No: 4448
Date: 27th July 2016 C P No.: 2820