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NINtec Systems Ltd.

BSE: 539843 Sector: IT
NSE: N.A. ISIN Code: INE395U01014
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VOLUME 10000
52-Week high 29.00
52-Week low 16.10
P/E 36.72
Mkt Cap.(Rs cr) 16
Buy Price 21.50
Buy Qty 5000.00
Sell Price 27.40
Sell Qty 5000.00
OPEN 22.00
CLOSE 23.00
VOLUME 10000
52-Week high 29.00
52-Week low 16.10
P/E 36.72
Mkt Cap.(Rs cr) 16
Buy Price 21.50
Buy Qty 5000.00
Sell Price 27.40
Sell Qty 5000.00

NINtec Systems Ltd. (NINTECSYSTEMS) - Director Report

Company director report

Dear Members

NINtec Systems Limited

Your Directors hereby present the Second Annual Report of your company together withthe Audited Standalone Financial Statements for the Financial Year ended 31stMarch 2017.

1. FINANCIAL HIGHLIGHTS
(Amount in Rs.)
Particulars Results for the Financial Year 2017 Results for the Financial Year 2016
Revenue from Operations 30459757 11916354
Profit before Interest Depreciation / Amortisation and Taxes 7548169 1975766
Finance Cost 56841 2355
Depreciation & Amortization 1109196 83327
PROFIT BEFORE TAX 6382132 1890084
(i) Provision for Taxation (Current) 2112510 518264
(ii) Provision for Taxation (Deferred) (132812) 65772
Total Tax 1979698 584036
PROFIT AFTER TAX 4402435 1306048
Minority Interest - -
Profit After Minority Interest - -
Surplus Brought Forward from Previous Year - -
Balance available for appropriations 4402435 1306048
Transferred to General Reserve - -
Interim / Final Dividend on Equity Shares - -
Tax on Dividend on Equity Shares - -
Balance Carried to Balance Sheet 4402435 1306048
Earnings per share (Basic) 0.65 1.21
Earnings per share (Diluted) 0.65 1.21

2. DIVIDEND

In order to conserve resources for future growth and business expansion your directorsdo not recommend any dividend for the Financial Year 2016-17.

3. TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCTION AND PROTECTION FUND

There is no unclaimed/unpaid Dividend within the meaning of the provisions of Section125 of the Companies Act 2013.

4. REVIEW OF BUSINESS OPERATIONS AND FUTURE PROSPECTS

This being the first full year of operations under review the net revenue fromoperations of the company on a Standalone basis stand at Rs. 30459757/-.

During the year under review your company has earned a Profit before Tax (PBT) of Rs.6382132/- and Profit After Tax (PAT) of Rs. 4402435/-. The company has plans toincrease its services/operations in coming years with more businessfriendly/value/solutions approach for other industries with specific software's for theindustry which will further add to growth and new milestones for the company in nearfuture. Further the company has utilised the entire public issue amount of Rs. 1.88crores till 31st March 2017.

5. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS / COURTS/ TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATIONS IN FUTURE

There are no significant/material orders passed by the Regulators or Courts orTribunals impacting the going concern status of your Company and its operations in future.

6. ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIALSTATEMENTS

Your Company has in place adequate internal financial controls with reference tofinancial statements commensurate with the size scale and complexity of its operations.The company has appointed Ms. Zalak Kaushikbhai Choksi as the Internal Auditor of theCompany for the Financial Year 2016-2017 to monitor and evaluate the efficacy and adequacyof Internal Control Systems in the company its compliance with operating systemsaccounting procedures and policies. During the year such controls were tested and noreportable material weaknesses in the operations of the company were observed.

7. MATERIAL CHANGES AND COMMITMENT IF ANY AFFECTING THE FINANCIAL POSITION OFTHE COMPANY OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THIS FINANCIALSTATEMENTS RELATE AND THE DATE OF THE REPORT

The Board wish to inform the members that there are no material changes and commitmentsaffecting the financial position of your Company which have occurred between the end ofthe Financial Year 2016-2017 and the date of this report.

8. PREVENTION OF ENERGY CONSERVATION TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGEEARNINGS AND OUTGO

Pursuant to provisions of Section 134 of the Companies Act 2013 read with Rule 8(3) ofthe Companies (Accounts) Rules 2014 the details of Conservation of Energy TechnologyAbsorption Foreign Exchange Earnings and Outgo are attached as Annexure "A"which forms part of this report.

9. STATEMENT CONCERNING DEVELOPMENT AND IMPLEMENTATION OF RISK MANAGEMENT POLICYOF THE COMPANY

The Company follows a specific well-defined and comprehensive risk management processthat is integrated with operations for identification categorization and prioritizationof operational financial and strategic business risks. Across the organization there areteams responsible for these processes who report to the senior management.

Business risk evaluation and management is an ongoing process within the company. TheBoard and Audit Committee review periodically the risk assessment in the company.

10. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THECOMPANIES ACT 2013

There are no loans given guarantees issued or investments made to which provisions ofSection 186 are applicable to the Company. The details of the Investments made by theCompany are given in the notes to the Financial Statements.

11. PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES

With reference to Section 134 (3) (h) of the Companies Act 2013 all contracts andarrangements with related parties under Section 188(1) of the Act entered by the Companyduring the Financial Year were in the ordinary course of business and on an arm's lengthbasis.

The details of transactions with the company and related parties are given asinformation under Notes to Accounts and Form AOC 2 as Annexure "B" which forms apart of this Report.

12. EXPLANATION OR COMMENTS ON QUALIFICATIONS RESERVATIONS OR ADVERSE REMARKS ORDISCLAIMERS MADE BY THE AUDITORS AND THE PRACTICING COMPANY SECRETARY IN THEIR REPORTS

Statutory Auditors and Secretarial Auditors of the company have not raised anyqualifications reservations or remarks in their respective Audit Report for the financialyear ended on 31st March 2017. The specific notes forming part of the accountsreferred to in the Auditor's Report are self-explanatory.

13. POLICIES

a) VIGIL MECHANISM/ WHISTLE BLOWER POLICY

The company is committed to adhere to the highest standards of ethical moral and legalconduct of business operations. In compliance with Section 177 of the Companies Act 2013and other applicable provisions the company has formulated a Vigil Mechanism / WhistleBlower Policy (Mechanism) for its Stakeholders Directors and Employees in order topromote ethical behaviour in all its business activities and in line with the bestgovernance practices.

Vigil Mechanism provides a channel to report to the management concerns about unethicalbehaviour actual or suspected fraud or violation of the code of conduct or policy. Itprovides adequate safeguards against victimization of directors employees and allstakeholders. It also provides direct access to the Chairman of the Audit Committee.

The policy is available on the website of the company www.nintecsystems.com.

b) PROTECTION OF WOMEN AGAINST SEXUAL HARASSMENT

Your company believes in providing a safe and harassment-free workplace for all itsemployees. Further company ensures that every women employee is treated with dignity andrespect.

The Company has in place an Anti-Sexual Harassment Policy as per the requirements ofThe Sexual Harassment of Women at the Workplace (Prevention Prohibition & Redressal)Act 2013. During the year under review no complaints of sexual harassment have beenreceived by the company.

c) CODE OF CONDUCT TO REGULATE MONITOR AND REPORT TRADING BY INSIDERS

Your company has in place the code of conduct to regulate monitor and report tradingby Directors and Designated Employees in order to protect the investor's interest as perSecurities and Exchange of Board of India (Prohibition of Insider Trading) regulations2015. As per the code periodical disclosures and pre-clearances for trading in securitiesby the Directors Designated Employees and Connected Persons is regulated and monitored.

14. DIRECTORS AND KEY MANAGERIAL PERSONNEL

A. BOARD OF DIRECTORS

The composition of the Board is as per the Listing Regulations and provisions of theCompanies Act 2013. There was no change in the composition of the Board during the yearunder review.

Presently the composition of the Board is eight Directors led by Non IndependentExecutive Chairman & Managing Director with three Non-Executive Directors and fourIndependent Directors.

In accordance with the provisions of Companies Act 2013 Mr. Indrajeet Mitra directorof the company retires by rotation at the ensuing Annual General Meeting and beingeligible has offered himself for reappointment.

The Company has received declarations from all the Independent Directors of the Companyconfirming that they meet the criteria of independence as prescribed both under Section149 of the Companies Act 2013 and Regulation 16(1) (b) SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 with the Stock Exchanges.

B. MEETINGS OF THE BOARD

During the year under review Seven Board Meetings were convened. The intervening gapbetween the meetings was within the period prescribed under the Companies Act 2013 andClause 49 of the Listing Agreement as amended from time to time.

C. COMMITTEES OF THE BOARD OF DIRECTORS

In compliance with the requirement of applicable laws and as part of the bestgovernance practice the Board has constituted various Committees of its members. TheseCommittees hold meetings at such frequencies as is deemed necessary by them to effectivelyundertake and deliver upon the responsibilities and tasks assigned to them. Minutes of themeetings of each of these Committees are tabled regularly at the Board Meetings.

Your Company currently has 3 (Three) Committees viz.:

(a) Audit Committee

The Company has formed a qualified and Independent Audit Committee which acts as a linkbetween the Statutory and Internal Auditors and the Board of Directors. The terms ofreference of the Audit Committee cover the matters specified for Audit Committee in theSEBI Listing Regulations and Section 177 of the Companies Act 2013.

As on 31st March 2017 the Audit Committee comprises of the followingmembers-

Mr. Vishal Shah Chairman
Mr. Indrajeet Mitra Member
Mr. Bhushan Saluja Member

Four Audit Committee meetings were held during the year. Mr. Mukesh Jiwnani CompanySecretary acts as the Secretary of the Committee.

(b) Stakeholders Relationship Committee

The Stakeholders Relationship Committee is constituted according to Section 178 of theCompanies Act 2013 and SEBI Listing Regulations. The Committee ensures cordial investorrelations and oversees the mechanism for redressal of investor grievances. The Committeespecifically looks into redressing shareholders and investor complaints/ grievancespertaining to share transfers non-receipts of annual reports non- receipt of dividendand other allied complaints.

As on 31st March 2017 the Stakeholders Relationship Committee comprises ofthe following members-

Mr. Indrajeet Mitra Chairman
Mr. Vishal Shah Member
Mrs. Rachana Gemawat Member

Two meetings were held for the Committee during the year. Mr. Mukesh Jiwnani CompanySecretary acts as the Secretary of the Committee.

During the period under review Company has not received any complaint fromshareholders. There is no outstanding complaint as on 31st March 2017.

(c) Nomination and Remuneration Committee

In compliance with Section 178 of the Companies Act 2013 and SEBI Listing Regulationsa Nomination & Remuneration Committee of the company has been constituted.

As on 31st March 2017 the Nomination and Remuneration Committee comprisesof the following members-

Mr. Vishal Shah Chairman
Mr. Bhushan Saluja Member
Mrs. Rachana Gemawat Member

During the year three Nomination and Remuneration Committee meetings were held. Mr.Mukesh Jiwnani Company Secretary acts as the Secretary of the Committee.

D. BOARD EVALUATION

The Board adopted a formal mechanism for evaluating its performance as well as that ofits Committees and individual Directors including the Chairman of the Board. The exercisewas carried out through a structured evaluation process covering various aspects of theBoards functioning such as composition of the Board & committees experience &competencies performance of specific duties & obligations contribution at themeetings and otherwise independent judgment governance issues etc.

E. DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to the provisions under Section 134(5) of the Companies Act 2013 withrespect to Directors' Responsibility Statement the Directors confirm:

(a) That in the preparation of the Annual Accounts the applicable Accounting Standardshave been followed and no material departures have been made from the same;

(b) That they had selected such accounting policies and applied them consistently andmade judgements and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company at the end of the financial year and ofthe profit and loss of the Company for that period;

(c) That they 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) That they had prepared the Annual Accounts on a going concern basis;

(e) That they had laid down Internal Financial Controls to be followed by the companyand that such internal financial controls are adequate and were operating effectively; and

(f) That they had devised proper systems to ensure compliance with the provisions ofall applicable laws and that such systems were adequate and operating effectively.

15. AUDITORS

a) STATUTORY AUDITORS

M/s. Samir M. Shah & Associates Chartered Accountants were appointed as theStatutory Auditors of the Company at the Annual General Meeting held on 24thSeptember 2016 for a period of 5 years subject to ratification of their appointment atevery forthcoming Annual General Meeting till 2021. Accordingly the aforesaid appointmentof Auditor needs to be ratified in the forthcoming Annual General meeting by the members.M/s. Samir M. Shah & Associates Chartered Accountants has provided theirconfirmation stating that their appointment is within the prescribed limits under Section141 of the Companies Act 2013.

b) SECRETARIAL AUDITORS

Pursuant to the provisions of section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Board of Directorshave appointed M/s. Tushar Vora & Associates Company Secretaries for conductingsecretarial audit of the company for the year ended 31st March 2017.Secretarial Audit Report issued by Mr. Tushar Vora Practicing Company Secretary in FormMR 3 (Annexure F) forms part of this report.

16. SHARE CAPITAL

During the Financial Year 2016-2017 the company came out with a maiden public issue of1880000 Equity Shares of Rs. 10/- each through Bombay Stock Exchange SME platform. Theissue was opened on March 29 2016 and closed on April 06 2016. The Company's 6880000equity shares are listed and are available for trading on BSE SME platform since April 182016.

Hence the Paid up share capital has been increased from Rs. 50000000 to Rs.68800000 pursuant to allotment of 1880000 Equity Shares of the face value of Rs. 10/-each.

17. FINANCE & ACCOUNTS

Your Company prepares its financial statements in compliances with the requirements ofthe Companies Act 2013 and the Generally Accepted Accounting Principles (GAAP) in India.

Cash and Cash Equivalents as at March 31 2017 were Rs. 1958856/-. The companycontinues to focus on its working capital receivables and other parameters were keptunder check through continuous monitoring. The Company during the year under reviewincurred Capital Expenditure of Rs. 16360/-

18. PUBLIC DEPOSITS

Your company has not invited accepted received or renewed any deposits from publicfalling within the meaning of Section 73 and 76 of the Companies Act 2013 and theCompanies (Acceptance of Deposit) Rules 2014 as amended from time to time during theyear under review and accordingly there were no deposits which were due for repayment onor before 31st March 2017.

19. SHARES

a. BUY BACK OF SECURITIES

The Company has not bought back any of its securities during the year under review.

b. SWEAT EQUITY

The Company has not issued any Sweat Equity Shares during the year under review.

c. BONUS SHARES

No Bonus Shares were issued during the year under review.

d. EMPLOYEES STOCK OPTION PLAN

The Company has not provided any Stock Option Scheme to the employees.

20. SUBSIDIARIES JOINT VENTURES AND ASSOCIATE COMPANIES

Your company does not have any subsidiary Joint Venture and associate companies.

21. CORPORATE GOVERNANCE

In line with the Company's commitment to good Corporate Governance Practices yourCompany has Complied with all the mandatory provisions as prescribed in SEBI ListingRegulations and other applicable provisions.

22. LITIGATIONS

There were no litigations outstanding as on March 31 2017.

23. NUMBER OF COMPLAINTS RELATING TO CHILD LABOUR FORCED LABOUR INVOLUNTARY LABOUR

During the year under review no cases of child labour forced labour involuntarylabour and discriminatory employment were reported.

24. EXTRACT OF ANNUAL RETURN

The extract of the Annual Return in Form MGT-9 in terms of Section 92(3) of theCompanies Act 2013 for the financial year under review has been provided in an Annexure"C" which forms part of the Directors' Report.

25. MANAGEMENT DISCUSSION AND ANALYSIS (MDA)

The Management Discussion and Analysis Report highlighting the important aspects ofthe business of the company for the year under review is given as a separate statement asAnnexure - D which forms part of this Annual Report.

26. FAMILIARISATION PROGRAMME FOR INDEPENDENT DIRECTORS

Your company has in place a structured induction and familiarisation programme for theIndependent Directors of the company. Your company through such programmes familiarisesthe Independent Directors with a brief background of your company their roles rightsresponsibilities nature of the industry in which it operates business model operationsongoing events etc. They are also informed of the important policies of your companyincluding the Code of Conduct for Directors and Senior Management Personnel and the Codeof Conduct for Prevention of Insider Trading. Brief details of the familiarisationprogramme are uploaded on the website of your company (www.nintecsystems.com).

27. PARTICULARS OF EMPLOYEES

Disclosures pertaining to remuneration and other details as required under Section197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 is attached as Annexure ‘E' which forms a part ofthis report.

28. HUMAN RESOURCE MANAGEMENT

At NINtec Systems Limited we believe that human resources are precious assets of thecompany. The motto during the year has been to enhance the morale and capabilities of theemployees. We strongly believe in favourable work environment that encourages innovationand creativity. Your Company has established an organization structure that is agile andfocused on delivering business results stimulating performance culture and motivatingemployees to develop themselves personally and professionally.

29. FRAUD REPORTING

There have been no instances of fraud reported by the Statutory Auditors under Section143(12) of the Act and Rules framed there under either to the Company or to the CentralGovernment.

30. CAUTIONARY STATEMENT

Statements in the Board's Report describing the company's objective expectations orforecasts may be forward looking within the meaning of applicable laws and regulations.Actual results may differ materially from those expressed in the statement.

31. ACKNOWLEDGEMENT

The Directors wish to place on record their appreciation for the assistancecooperation and support received from all the clients vendors bankers Registrar ofCompanies auditors suppliers Government bodies shareholders and other businessassociates.

The Directors also acknowledge the hard work dedication and commitment of theemployees. Their enthusiasm and unstinting efforts have enabled the company to grow duringthe year under review.

The Board deeply acknowledges the trust and confidence placed by the clients of thecompany and all its shareholders. Your Directors look forward to the long term futureconfidently.

For and on behalf of the Board
Place: Ahmedabad (Niraj C. Gemawat)
Date: August 11 2017 Chairman & Managing Director
DIN: 00030749

ANNEXURE-A

DETAILS OF CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS ANDOUTGO

[Pursuant to Section 134(3) (m) of The Companies Act 2013 read with Rule 8(3) of TheCompanies (Accounts) Rules 2014]

A. CONSERVATION OF ENERGY:

Your company's operations are not energy intensive and involve low energy consumption.However adequate measures have been taken to conserve energy wherever possible by usingenergy efficient computers and purchase of energy efficient equipment. Your company hasalso taken effective steps at every stage to reduce consumption of electricity. Theefforts to conserve and optimize the use of energy through improved operational method andother means will continue.

B. TECHNOLOGY ABSORPTION:

Your company continues to use the latest technologies for improving the productivityand quality of its services. Various methods have been established to encourage seamlesscooperation and collaboration amongst project teams across technology and business domainareas. These methods enable teams to explore learn and adapt best practices newapproaches experience and innovative proven solutions from within the industry andshowcase the same through a technology and business-centric review by the management.

C. FOREIGN EXCHANGE EARNINGS AND OUTGO:

(Amt. in Rs.)
Sr. No. Particulars Year ended 31st March 2017
1. Total Foreign Exchange used 554669/-
2. Total Foreign Exchange earned 30459757/-

 

For and on behalf of the Board
Place: Ahmedabad Niraj C. Gemawat
Date: August 11 2017 Chairman & Managing Director
DIN: 00030749

ANNEXURE-B

Form No. AOC-2

[Pursuant to Clause (h) of Sub-Section (3) of Section 134 of the Companies Act 2013and Rules 8 (2) of the Companies (Accounts) Rules 2014]

Form for disclosure of particulars of Contracts / Arrangements entered into by theCompany with the Related Parties referred to in Sub-Section (1) of Section 188 of theCompanies Act 2013 including certain Arm's Length transactions under third provisothereto:

1. DETAILS OF CONTRACTS OR ARRANGEMENTS OR TRANSACTIONS NOT AT ARM'S LENGTHBASIS:

i. Name (s) of the Related Party and nature of Relationship
ii. Nature of contract/arrangement/transactions
iii. Duration of contract/arrangements/transactions
iv. Salient Terms of contract/arrangements/transactions including the value if any None
v. Justification for entering into such contracts or arrangements or transactions
vi. Date(s) of approval by the Board
vii. Amount paid as Advances if any
viii. Date on which the special resolution was passed in general meeting under first proviso to Section 188 of Companies Act 2013

2. DETAILS OF CONTRACTS OR ARRANGEMENTS OR TRANSACTIONS AT ARM'S LENGTH BASIS:

i. Name (s) of the Related Party and nature of Relationship Yemo Connect & Interact B.V Group Company
ii. Nature of contract/arrangement/transactions Software Development Outsourcing
iii. Duration of contract/arrangements/transactions Order/Agreement-based transaction
iv. Total value of contract Rs. 7729603/-
v. Salient Terms of contract/arrangements/transactions including the value if any Normal business terms as normally entered into with unrelated parties
vi. Date(s) of approval by the Board if any 07.11.2016
vii. Amount paid as Advances if any Nil

 

For and on behalf of the Board
Place: Ahmedabad Niraj C. Gemawat
Date: August 11 2017 Chairman & Managing Director
DIN: 00030749

ANNEXURE-E

Particulars of Remuneration as per Section 197 (12) of the Companies Act 2013 readwith Rules 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014

Disclosure of Ratio of Remuneration of each Director to Median Employees Remunerationthe % increase in remuneration of Director Chief Financial Officer and Company Secretaryfor the financial year ended 31st March 2017:-

1) Ratio of Mr. Niraj Gemawat Managing Director's remuneration to the medianremuneration of employees of the company is 0.56:1.

2) Percentage increase in remuneration of Mr. Niraj Gemawat Managing Director is 0 %Mr. Mukesh Jiwnani Company Secretary is 4 % and Mr. Bharat Thaker CFO is 0 % in thefinancial year.

3) Percentage increase in the median remuneration of employees- 9.79%

4) Number of permanent employees on the rolls of company- 16 Employees.

5) The average increase in the salaries of employees other than managerial personnel inthe financial year was 11.00% compared to average increase in managerial personnelremuneration of 0%.

6) The company affirms that the remuneration is as per the remuneration policy of thecompany.

For and on behalf of the Board
Place: Ahmedabad Niraj C. Gemawat
Date: August 11 2017 Chairman & Managing Director
DIN: 00030749