Your Directors have pleasure in presenting the 21st Annual Report on theoperations of ObjectOne Information Systems Limited together with the audited financialstatements for the year ended March 31 2017. The financial results of the Company are asfollows:
1 Financial Results
|Particulars || |
| ||2016-17 ||2015-16 ||2016-17 ||2015-16 |
|Revenue ||2360.04 ||1779.06 ||670.50 ||703.16 |
|Capital Gains ||0.00 ||177.83 ||0.00 ||177.83 |
|Total Income ||2360.04 ||1956.89 ||670.50 ||880.99 |
|Operating profit (PBIDT) ||50.81 ||203.72 ||(3.12) ||178.02 |
|Depreciation ||34.89 ||37.37 ||30.10 ||36.38 |
|Profit before tax (PBT) ||15.92 ||166.35 ||(33.22) ||141.64 |
|Income Tax and Deferred Tax ||(12.83) ||20.47 ||(22.67) ||16.95 |
|Profit after tax (PAT) ||28.75 ||145.88 ||(10.55) ||124.69 |
2 STATE OF AFFAIRS OF COMPANY.
The Consolidated income of Rs. 2360.04 lakhs during the year against previous yearincome of Rs. 1956.89 lakhs and Net Profit of Rs. 28.75 lakhs during the year againstprevious year Net Profit of Rs. 145.88 lakhs
The Standalone income of Rs.670.50 lakhs during the year against previous year incomeof Rs. 880.99 lakhs and Net Loss of Rs. 10.55 lakhs during the year against previous yearNet Profit of Rs. 124.69 lakhs.
This year your Company procured major orders from Government of India for Social MediaPromotion of various Government Policies/ Services related to their Departments.
Social media analytics and Social Media response management is becoming major businessof the Company for the year 2017-18.
Your Company has ventured out into loT space by partnering with Sweden based Terranet aleader in proximal connectivity for development of Tone Flix app for sharing anddownloading of videos without Internet. This app will be a source of entertainment for alltravellers. This product will serve all passengers travelling by APSRTC and TSRTC Thisservice which will be generating advertisement revenue.
Stiaos Technologies Inc.
Your Board of Directors decided for cancellation of share purchase agreement related toM/s. Stiaos Technologies Inc which is not performing well.
3 Material Changes and Commitments If any affecting the financial position of thecompany which have occured between the end of the financial year of the company to whichthe financial statements relate and the date of the report
There are no material changes and commitments affecting the financial position of theCompany.
4 Transfer To Reserves
The company had not transferred any amount to the General Reserve. During the financialyear 2016-17.
The Board of directors not proposed/declared any dividend for the year ended31.03.2017.
6 Particulars of Loans. Guarantees or Investments
The company has not given any loans or guarantees covered under the provisions ofsection 186 of the Companies Act 2013 (Act). The details of the investments made by thecompany are given in the notes to the financial statements.
7 Internal Financial Control Systems and their adequacy
The Company has adequate system of internal controls to safeguard and protect fromloss un-authorised use or disposition of its assets. All the transactions are properlyauthorised recorded and reported to the Management. The Company is following all theapplicable Accounting Standards for proper maintenance of books of accounts and forfinancial reporting.
8 Related Party Transactions
All the transactions with related parties are at arm's length and they fall outside thescope of Section 188(1) of the Act. Information on transactions with related partiespursuant to Section 134(3)(h) of the Act read with rule 8(2) of the Companies (Accounts)Rules 2014 is given in Annexure-1 in Form AOC-2 and the same forms part of this report.
9 Fixed Deposits
Your Company has not accepted any deposits and as such no amount of principal orinterest was outstanding as of the Balance Sheet date.
10 Change in The Nature Of Business If Any
There is no material change in the nature of business affecting the financial positionof the Company for the year ended March 31 2017.
11 Joint Venture
Information on Joint Venture pursuant to Section 129(3) of the Act read with rule 5 ofthe Companies (Accounts) Rules 2014 is not applicable to the Company as the Company doesnot entered any Joint Venture contracts. Hence Form AOC-1 is not applicable.
12 Subsidiary Company
The Company has acquired M/s. Stiaos Technologies Inc. during the Second Quarter of FY2015-16. The details is subsidiary provided in form AOC-1
13 Directors and Key Managerial Personnel
Mr. K. Ravi Shankar who retires by rotation and being eligible offer himself forre-appointment. Your Board recommends his appointment.
During the year Mr. K. Mallikarjuna Rao has been resigned as Whole time Director (on23.01. 2017) of the Company.
Pursuant to the provisions of Clause 49 of the Listing Agreement brief particulars ofthe directors who are proposed to be appointed/re-appointed are provided as an annexure tothe notice convening the Annual General Meeting.
14 Statement on the Declaration Given By The Independent Directors As Per Section149(6)
The company has received necessary declaration from each independent director underSection 149(7) of the Companies Act 2013 that he /she meets the criteria of independencelaid down in Section 149(6) of the Companies Act 2013 and Regulation 25 of SEBI (ListingObligations and Disclosure Requirements) Regulations 2015.
15 Policy on Directors' Appointment And Remuneration And Other Details
The Board has on the recommendation of the Nomination & Remuneration Committeeframed a policy for selection and appointment of Directors Senior Management and fixingtheir remuneration pursuant to the provisions of Section 178 of the Act and SEBI (ListingObligations and Disclosure Requirements) Regulations 2015. The Salient features of theRemuneration Policy are set out in the Corporate Governance Report.
16 Number of Meetings of the Board
Six meetings of the Board were held during the year. The dates on which the Meetingswere held are as follows:
30.05.2016 30.07.2016 11.08.2016 16.08.2016 14.11.2016 and 14.02.2017.
17 Board Evaluation
Pursuant to the provisions of the Companies Act 2013 and SEBI (Listing Obligations AndDisclosure Requirements) Regulations 2015 the Board carried out an annual performanceevaluation of its own performance the directors as well as the evaluation of the workingof its Audit Nomination and Remuneration and Stakeholders' Relationship Committees.Independent Directors carried out a separate evaluation on the performance of Chairman andnon Independent directors. The manner in which the evaluation has been carried out hasbeen explained in the Corporate Governance Report.
18 Report on corporate governance and management discussion and analysis report
Pursuant to the Regulation 15(2) of Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015 the Compliance with thecorporate governance provisions as specified in regulations 17 to 27 and 46 (2) and ParaC D and E of Schedule V are not applicable to the Company since its paid-up share capitalthough exceed Rupees 10 Crore but its net-worth does not exceed Rupees 25 Crore as on thelast day of previous financial year i.e. 31st March 2017.
Accordingly for the year under review the reports stating compliance with the Code ofCorporate Governance and the Management Discussion and Analysis have not been annexed tothis Report.
a) Audit Committee:
The present Audit Committee comprises of Mr. B.S.N.Kumar as Chairman and Ms. E. Kavithaand Mr. K. Mohan are the members of the Audit Committee. The composition of the Committeeis as per the requirements of the provisions of Section 177 of the Companies Act 2013 andthe SEBI (Listing Obligation and Disclosure Requirements) regulations. The Audit Committeecontinues to provide valuable advice and guidance in the areas of costing finance andinternal controls.
During the year under review the Committee met four times on 30th May 2016 16thAugust 201614th November 2016; and 14th February 2017.
b) Nomination and Remuneration Committee
The Nomination and Remuneration Committee comprises of Mr. V. Jayaprakash Narayana asChairman and Mr. B.S.N.Kumar and Mr. K. Mohan are the members of the NRC. The compositionof the Committee is as per the requirements of the provisions of Section 178 of theCompanies Act 2013 and the SEBI (Listing Obligation and Disclosure Requirements)regulations.
During the year under review the Committee met Three (3) on 28th May 2016 30thMarch 2017 and 31st March 2017.
c) Stakeholders Relationship Committee:
A Committee of the Board designated as stakeholders relationship committee tospecifically look into the redressal of Shareholder/investor complaints and to strengtheninvestors relations. The compositions of the Committee are included in the corporateGovernance Report forming part of this report.
The Stakeholders Relationship Committee comprises of Mr. K. Ravi Shankar as Chairmanand Mr. K. Mallikarjuna Rao and Mr. V. Jaya Prakash Narayana are the members of the SRC.The composition of the Committee is as per the requirements of the provisions of Section178 of the Companies Act 2013 and the SEBI (Listing Obligation and DisclosureRequirements) regulations.
During the year under review the Committee met four times on 30th May 2016 16thAugust 2016 14th November 2016; and 14th February 2017.
19 Auditors Statutory Auditors
Under Section 139 of the Companies Act 2013 and the Rules made thereunder it ismandatory to rotate the statutory auditors on completion of the maximum term permittedunder the said section. The audit committee of the Company has proposed. And on 12thAugust 2017 the Board of Directors of the Company has recommended the appointment of M/s.Chandra Babu Naidu & Co. Chartered Accountants (Firm registration number 016016S) asthe statutory auditors of the Company. M/s. Chandra Babu Naidu & Co. CharteredAccountants will hold office for a period of five consecutive years from the conclusion ofthe 21st Annual General Meeting of the Company scheduled to be held on September 29 2017till the conclusion of the 26th Annual General Meeting to be held in the year 2022subject to the approval of the shareholders of the Company. The first year of audit willbe of the financial statements for the year ending March 31 2018.
There were no qualifications reservation or adverse remark in the Audit Report for theFinancial Year ended 31st March 2017.
Mr. S Chidambaram Company Secretary in Practice Hyderabad was appointed to undertakethe Secretarial Audit of the Company for the Financial Year 2016-17. The Secretarial AuditReport is given in Annexure- II.
20 Directors' Responsibility Statement
In terms of Section 134(5) of the Companies Act 2013 your Directors would like tostate that:
a. In the preparation of the Annual Accounts the applicable accounting standards havebeen followed along with proper explanation relating to material departures;
b. The Directors have selected such accounting policies and applied them consistentlyand made judgments 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 endedMarch 31 2017 and the profit of the Company for that financial year;
c. The Directors have 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 have 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 operating effectively.
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.
21 Conservation Of Energy Technology Absorption Foreign Exchange Earnings and Outgo
Conservation of Energy:
The nature of the Company's operations requires a low level of energy consumption.
Research and Development (R&D):
The Company continues to look at opportunities in the areas of research and developmentin its present range of activities.
The Company continues to use the latest technologies for improving the productivity andquality of its services and products. The Company has not imported any technology duringthe year.
Foreign Exchange Earnings and Outgo:
|Purpose of ||2016-17 Amount in Rs ||2015-16 Amount in Rs |
|Inflow - against IT IT enabled Services and other income ||Rs.30486099/- ||Rs.37782529/- |
|Inflow - Against sale of Foreign Subsidiary ||0 ||Rs. 28488500/- |
|Outflow - Acquiring of Foreign Subsidiary ||0 ||Rs. 18806096/- |
22 Particulars of Employees
(a) The information required under section 197 of the Companies Act 2013 read withrule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 are given in Annexure-3.
b) Pursuant to Rule 5(2) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 during the year under review none of the employees of the Companyemployed throughout the financial year was in receipt of remuneration for the year whichin the aggregate was not less than sixty lakh rupees; none of the employees of theCompany employed for a part of the financial year was in receipt of remuneration for anypart of the year at a rate which in the aggregate was not less than five lakh rupeesper month; none of the employees of the Company employed throughout the financial year orpart thereof was in receipt of remuneration in the year which in the aggregate or asthe case may be at a rate which in the aggregate is in excess of that drawn by themanaging director or wholetime director or manager and holds by himself or along with hisspouse and dependent children not less than two percent of the equity shares of thecompany.
23 Extract Of Annual Return
The details forming part of the extract of the Annual Return in form MGT-9 are given inAnnexure-4.
24 Risk Management
Pursuant to section 134 (3) (n) of the Companies Act 2013 and SEBI (ListingObligations And Disclosure Requirements) Regulations 2015 the company has formulated apolicy on risk management. At present the company has not identified any element of riskwhich may threaten the existence of the company.
25 Vigil Mechanism / Whistle Blower Policy
Pursuant to Section 177 of the Companies Act 2013 read with Rule 7 of Companies(Meetings of Board and its Powers) Rules 2014 and SEBI (Listing Obligations
And Disclosure Requirements) Regulations 2015 the Company has established a WhistleBlower Policy to deal with instance of fraud and mismanagement if any. The details of theWhistle Blower Policy are explained in the Corporate Governance Report and also posted onthe website of the Company.
26 Corporate Social Responsibility (CSR)
The provisions relating to Corporate Social Responsibility under the Companies Act2013 do not apply to the company.
27 Disclosure under the Sexual Harassment of Women At Workplace (PreventionProhibition And Redressal) Act 2013
The Company has in place a Policy on Prevention of Sexual Harassment in line with therequirements of The Sexual Harassment of Women at the Workplace (Prevention Prohibition& Redressal) Act 2013. Internal Complaints Committee (ICC) has been set up to redresscomplaints received regarding sexual harassment. All employees (permanent contractualtemporary trainees) are covered under this policy.
Your Directors further state that during the year under review there were no casesfiled pursuant to the Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013.
28 The details of significant and material orders passed by the regulators or courts ortribunals impacting the going concern status and company's operations in future
In terms of sub rule 5(vii) of Rule 8 of Companies (Accounts) Rules 2014 there are nosignificant material orders passed by the Regulators / Courts which would impact the goingconcern status of the Company and its future operations.
29 Management Discussion & Analysis And Corporate Governance
The "Management Discussion and Analysis Report" highlighting the industrystructure and developments opportunities and threats future outlook risks and concernsetc. is furnished separately and forms part of this Board's Report.
As per the requirements of the Listing Agreement with Stock Exchange a Report onCorporate Governance duly audited is annexed for information of the Members.
Your Directors thank the investors bankers clients and vendors for their continuedsupport. Your Directors place on record their appreciation of the valuable contributionmade by the employees at all levels.
| ||FOR OBJECTONE INFORMATION SYSTEMS LIMITED |
| ||Sd/- |
|Place : Hyderabad ||K. Ravi Shanka |
|Date : 12.08.2017 ||Managing Director |