To the Members
The Directors have pleasure in presenting before you the Annual Report of the Companytogether with the Audited Statements of Accounts for the year ended 31st March2016.
| || ||(Rs in actuals) |
|Particulars ||2015-16 ||2014-15 |
|1. Gross Income ||89400000 ||45964500 |
|2. Depreciation ||8513511 ||10366397 |
|3. Finance Charges ||246367 ||9313 |
|4. Gross Profit ||19913751 ||18487510 |
|5. Provision for Depreciation ||0 ||0 |
|6. Net Profit Before Tax ||19913751 ||18485043 |
|7. Provision for Tax ||8806515 ||5919851 |
|8. Net Profit After Tax ||11107236 ||12567659 |
|9. Balance of Profit brought forward ||11107236 ||12567659 |
|10. Balance available for appropriation ||11107236 ||12567659 |
|11. Proposed Dividend on Equity Shares ||0 ||0 |
|12. Tax on proposed Dividend ||0 ||0 |
|13. Transfer to General Reserve ||0 ||0 |
|14. Surplus carried to Balance Sheet ||11107236 ||12565993 |
Gross revenues increased to Rs89400000 as against Rs45964500 in the previousyear. Profit before taxation was Rs19913751 against Rs18485043 in the previous year.After providing for taxation the net profit of the Company for the year under review wasplaced at Rs11107236 as against Rs12567659 in the previous year.
During the year the Company came out with Public Issue of 1704000 Equity shares ofRs25/- per share ( including Premium of Rs15) aggregating to Rs426.00 Lakhs of which96000 Equity shares of Rs25/- per share ( including Premium of Rs15) were reserved forsubscription by the Market Makers to the issue. The issue constitutes 26.56% of the postissue paid up equity share capital of the Company. The issue opened for subscription on 28thDecember 2015 and closed on 31st December 2015 in accordance with Securitiesand Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations2009.The issue was subscribed to the extent of 2.49 times as per application data. Theallotment of equity shares were made in consultation with BSE Lead manager V.B. DesaiFinancial Services Ltd and Registrars to the Issue and basis of allotment was done as perSecurities and Exchange Board of India (Issue of Capital and Disclosure Requirements)Regulations 2009.
UTILISATION OF PROCEEDS OF IPO
To enhance our capabilities in developing technological expertise with the presentactivities we had earmarked Rs375 lakhs for strategic acquisition/ joint ventureinvestments out of the Public Issue. The Company has fully utilized Rs18.62 lakhsearmarked for General Corporate purpose and Rs32.38 lakhs for Issue expenses. Thus wehave fully utilized the total Public Issue proceeds during the year.
Our management has evaluated and analyzed various business projects which havesubstantial technology in line with our present business model domains and client service.Consultants were appointed to do Financial Valuation Legal Due Diligence and FinancialDiligence Report for the identified project. After considering all factors and the Reportsas stated above from Consultants and the negotiation with the intended sellers the Boardof Directors at their meeting held on 8th February 2016 selected one businessproject for potential acquisition and approved to acquire a business project from M/sObject- Frontier Software Private Ltd for a purchase consideration of Rs5 crores.
The purchase was financed through the IPO Proceeds of Rs3.75 Crores earmarked forpurchase of strategic acquisition / joint venture and the balance Rs1.25 crores was frominternal financing. The Company intends to enhance business in the IT enabled ServiceIndustry. After the business acquisition the Company can integrate vertically with theacquired business unit.
The acquired business project has two IT related divisions catering to overseas clientsand has 27 employees. The business project has relocated to our Companys existing ITdevelopment center at Ascendas International Tech Park Chennai Tamil Nadu. With theacquisition of new project the Company expected to earn substantial export earnings inthe current year.
Your Directors have not recommended any dividend during the financial year 2015-16.
The paid up equity capital as on 31st March 2016 was Rs6.41 crore. Duringthe year under review the Company made an Initial Public offering of 1704000 Equityshares of Rs25/- per share ( including Premium of Rs15). The Company has not issued shareswith differential voting rights nor granted stock options or sweat equity during the yearunder review.
Cash and cash equivalents as at 31st March 2016 was Rs26974146. TheCompany continues to focus on judicious management of its working capital receivablesinventories and other working capital parameters were kept under strict check throughcontinuous monitoring.
The Company has not accepted any deposits within the meaning of Section 73 of theCompanies Act 2013 and the Companies (Acceptance of Deposits) Rules 2014 and anyamendments thereto.
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. The details of the investments made by Company aregiven in the notes to the financial statements.
INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
The Company has an Internal Control System commensurate with the size scale andcomplexity of its operations. The scope and authority of the Internal Audit function isdefined in the Internal Audit Manual.
To maintain its objectivity and independence the Internal Audit function reports tothe Chairman of the Audit Committee of the Board & to the Chairman & ManagingDirector.
The Internal Audit Department monitors and evaluates the efficacy and adequacy ofinternal control system in the Company its compliance with operating systems accountingprocedures and policies at all locations of the Company.
Based on the report of internal audit function process owners undertake correctiveaction in their respective areas and thereby strengthen the controls. Significant auditobservations and recommendations along with corrective actions thereon are presented tothe Audit Committee of the Board.
CORPORATE SOCIAL RESPONSIBILITY
The Company has not taken any initiatives under "Corporate SocialResponsibility" as the ceiling limit was not applicable to the Company as per Section135 Companies Act 2013.
CONSERVATION OF ENERGY
a) Company ensures that the operations are conducted in the manner whereby optimumutilization and maximum possible savings of energy is achieved.
b) No specific investment has been made in reduction in energy consumption.
c) As the impact of measures taken for conservation and optimum utilization of energyare not quantitative its impact on cost cannot be stated accurately.
d) Since the Company does not fall under the list of industries which should furnishthis information in Form A annexed to the aforesaid Rules the question of furnishing thesame does not arise.
No outside technology is being used for Development activities. The Company constantlystrives for maintenance and improvement in quality of its products and entire Research& Development activities are directed to achieve the aforesaid goal.
FOREIGN EXCHANGE EARNINGS AND OUT-GO
During the period the Company earned Rs8.94 crores and there was no outflow.
8 Annual Report 2015-16
DIRECTORS AND KEY MANANGERIAL PERSONNEL
The Company has received necessary declaration from each Independent Director of theCompany under Section 149(7) of the Companies Act 2013 that they meet the criteria ofIndependence laid down under Section 149(6) of the Companies Act2013.
Mr.Ezhumalai Muniyan was appointed as Chief Financial Officer of the Company witheffect from 6th April 2015.
Pursuant to the provisions of the Companies Act 2013 the Board has carried out anevaluation of its own performance the directors individually as well as the evaluation ofthe working of its Audit Appointment & Remuneration Committees. The manner in whichthe evaluation has been carried out has been explained in the Corporate Governance Report.
The Company is compliant with the following policies/charters:
- Audit Committee Charter
- Nomination and Remuneration Policy
- Vigil Mechanism/Whistle Blower Policy
- Corporate Social Responsibility Policy
- Policy for determination of Materiality of any Event/Information
- Related Party Transaction Policy
- Code of conduct for prevention of insider trading and code of practices andprocedures for fair disclosure of unpublished price sensitive information
- Policy for preservation of documents and Archival Policy
All the policies are available in the website of the Company www.ofstech.com.
The Board of Directors met 14 times during the financial year 2015-16. The dates of theBoard meetings are as follows:
6th April 2015 10th April 2015 5th May 2015 2ndJune 2015 21st June 2015 12th August 2015 19thAugust 2015 4th September 2015 23rd November 2015 3rdDecember 2015 8th January 2016 14th January 2016 22ndJanuary 2016 and 8th February 2016.
DIRECTOR'S RESPONSIBILITY STATEMENT
In terms of Section 134 (5) of the Companies Act 2013 the directors would like tostate that:
i) In the preparation of the annual accounts the applicable accounting standards havebeen followed.
ii) The directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that were 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 or loss of the Company for the year under review.
iii) The directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of this Act for safeguardingthe assets of the Company and for preventing and detecting fraud and other irregularities.
iv) The directors have prepared the annual accounts on a going concern basis.
v) The directors had laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively.
vi) The directors had devised proper system to ensure compliance with the provisions ofall applicable laws and that such system were adequate and operating effectively.
RELATED PARTY TRANSACTIONS
All related party transactions that were entered into during the financial year were onarms length basis and were in the ordinary course of the business. There are nomaterially significant related party transactions made by the Company with Promoters KeyManagerial Personnel or other designated persons which may have potential conflict withinterest of the Company at large.
The Company does not have any subsidiary.
CODE OF CONDUCT
The Board of Directors has approved a Code of Conduct which is applicable to theMembers of the Board and all employees in the course of day to day business operations ofthe Company. All the Board Members and the Senior Management personnel have confirmedcompliance with the Code. All Management Staff were given appropriate training in thisregard.
According to the provision of Section 204 of the Companies Act 2013 read with Rule 9of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 theCompany engaged the services of Mr. S Hari Krishnan CP No: 13740 Company Secretary inPractice Chennai to conduct the Secretarial Audit of the Company for the Financial Year2015-16.
The Secretarial Audit Report submitted by the Company Secretary in Practice is enclosedas a part of this Annual report in Annexure-A which is self explanatory.
The Auditor Mr.V.Krishnamoorthy Chartered Accountant Chennai retires at theconclusion of the ensuing Annual General Meeting and being eligible offer themselves forre-appointment.
OBSERVATIONS IN AUDITORS REPORT
The Auditors report does not contain any qualification reservation or adverseremarks.
The Central Government has not prescribed maintenance of cost records for the existingbusiness activities of the Company.
EXTRACT OF ANNUAL RETURN
The details forming part of the extract of the Annual Return in form MGT-9 is annexedherewith as Annexure-B
PARTICULARS OF EMPLOYEES
The Company has not employed any person during the year
- whose remuneration was not less than Rs6000000/- for the whole year or - not lessthan Rs500000/- per month if employed for part of the year.
- if employed throughout the financial year or part thereof was in receipt ofremuneration in that year which in the aggregate or as the case may be at a rate whichin the aggregate is in excess of that drawn by the managing director or whole-timedirector or manager and holds by himself or along with his spouse and dependent childrennot less than two percent of the equity shares of the Company.
The information required pursuant to Section 197 read with rule 5 of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 in respect of employeesof the Company will be provided upon request. In terms of Section 136 of the Act thereports and accounts are being sent to the members and others entitled thereto excludingthe information on employees particulars which is available for inspection by themembers at the Registered office of the Company during business hours on working days ofthe Company up to the date of ensuing Annual General Meeting. If any member is interestedin inspecting the same such member may write to the Company secretary in advance.
CORPORATE GOVERNANCE AND SHAREHOLDERS INFORMATION
The Company has taken adequate steps to adhere to all the stipulations laid down underSecurities and Exchange Board of India (Listing Obligations and Disclosure Requirements)Regulations 2015. A report on Corporate Governance included as a part of this AnnualReport is given in Annexure-E. Certificate from the Statutory Auditors of the Companyconfirming the compliance with the conditions of Corporate Governance as stipulated underSecurities and Exchange Board of India (Listing Obligations and Disclosure Requirements)Regulations 2015 is attached to this Annual Report.
PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE POLICY
The Companys policy on Prevention of Sexual Harassment of Women provides for theprotection and prevention against sexual harassment of women employees at the workplaceand redressal of such complaints. There were no complaints received or pending forredressal during the FY 15-16.
The Directors take this opportunity to place on record their gratitude for the supportextended to the Company by the clients banks employees investors and otherstakeholders.
| ||On behalf of the Board |
| ||For OFS Technologies Limited |
| ||Mr.Jesudas Premkumar |
|Place: Chennai ||Managing Director |
|Date: 30th May 2016 ||DIN: 07008031 |
Form No. MR-3
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 the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014]
M/s OFS Technologies Limited No 510 2nd Floor 16th Cross 2ndStage Indira Nagar Bangalore-560 038 Karnataka
My report of even date is to be read along with this letter;
1. Maintenance of secretarial records is the responsibility of the management of theCompany. My responsibility is to express an opinion on those secretarial records based onmy audit.
2. I 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 test basis to ensure that correct facts are reflected insecretarial records. I believe that the processes and practices I followed provide areasonable basis for my opinion.
3. I have not verified the correctness and appropriateness of financial records andBooks of Accounts of the Company.
4. Wherever required I have obtained the Management representation about thecompliance of laws rules and regulations and happening of events etc.
5. The compliance of the provisions of Corporate and other applicable laws rulesregulations standards is the responsibility of management. My examination was limited tothe verification of procedures on test basis.
6. 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.
| ||S Hari Krishnan |
|Place: Chennai ||ACS No: 29583 |
|Date: 27th May 2016 ||CP No: 13740 |
Secretarial Audit Report for the financial year ended 31.03.2016
[Pursuant to Section 204(1) of the Companies Act 2013 and Rule No. 9 of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014]
M/s OFS Technologies Limited No 510 2nd Floor 16th Cross 2ndStage Indira Nagar Bangalore 560 038 Karnataka
I have conducted the Secretarial Audit of the compliance of applicable statutoryprovisions and the adherence to good corporate practices by M/s OFS TechnologiesLimited (Formerly Known as Bole Technologies Limited) (hereinafter called "theCompany") (CIN: U72300KA2008PLC045897). The Secretarial Audit was conducted in amanner that provided me a reasonable basis for evaluating the corporate conducts/statutorycompliances and expressing my opinion thereon.
Based on my verification of the M/s OFS Technologies Limiteds bookspapers minute books forms and returns filed and other records maintained by the Companyand also the information provided by "the Company" its officers agents andauthorized representatives during the conduct of Secretarial Audit I hereby report thatin my opinion the Company has during the audit period ended on 31st March2016 complied with the statutory provisions listed hereunder and also that the Companyhas proper Board-processes and compliance-mechanism in place to an extent in the mannerand subject to the reporting made hereinafter:
I have examined the books papers minute books forms and returns filed and otherrecords maintained by the Company for the period ended on 31st March 2016according to the provisions of:
1. The Companies Act 2013 ("the Act") and the rules made thereunder;
2. The Securities Contracts (Regulation) Act 1956 (SCRA) and the rulesmade thereunder; (Applicable to the Company from 14th January 2016)
3. The Depositories Act 1996 and the Regulations and Bye-laws framed thereunder;
4. Foreign Exchange Management Act 1999 and the rules and regulations made thereunderto the extent of Foreign Direct Investment;
5. 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; (Applicable to the Company from 14th January2016)
(b) The Securities and Exchange Board of India (Prohibition of Insider Trading)Regulations 2015; (Applicable to the Company from 14th January 2016)
(c) The Company has issued any securities during the year under review and hence thequestion of compliance of the provisions of Securities and Exchange Board of India (Issueof Capital and Disclosure Requirements) Regulations 2009 does not arise;
(d) The Company has not issued any securities under employee stock option scheme andemployee stock purchase scheme during the year under review and hence the question ofcompliance of the provisions of Securities and Exchange Board of India (Employee StockOption Scheme and Employee Stock Purchase Scheme) Guidelines 1999 does not arise;
(e) The Company has not issued any debt securities during the year under review andhence the question of compliance of the provisions of Securities and Exchange Board ofIndia (Issue and Listing of Debt Securities) Regulations 2008 does not arise;
(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;(Applicable to the Company from 14th January 2016)
(g) The Securities and Exchange Board of India (Delisting of Equity Shares)Regulations 2009; (Not applicable to the Company during the audit period) and
(h) The Company has not bought back any securities during the year under review andhence the question of compliance of the provisions of Securities and Exchange Board ofIndia (Buyback of Securities) Regulations 1998 does not arise;
I have also examined compliance with the applicable clauses of the following:
i) Secretarial Standards with respect to Meetings of Board of Directors (SS-1) andMeetings of General Meetings (SS-2) issued by The Institute of Company Secretariesof India applicable from 01st July 2015.
ii) The uniform listing agreement entered with BSE Limited pursuant to the provision ofSEBI (Listing Obligations and Disclosure requirements) Regulations 2015.
During the period under review the Company has generally complied with the provisionsof the Act Rules Regulations Guidelines and Standards as mentioned above.
I further report that having regard to the compliance system prevailing in theCompany and on examination of the relevant documents and records in pursuance thereof theCompany has complied with the following law applicable specifically to the Company:
a. The Sexual Harassment of Women at Workplace (Prevention Prohibition and Redressal)Act 2013;
b. The Payment of Gratuity Act 1972 and The Payment of Gratuity (Central) Rules 1972;
c. The Employees' Provident Funds and [Miscellaneous Provisions] Act 1952 TheEmployees' Provident
Fund Scheme 1952 Employees' Pension Scheme 1995 and Employees' Deposit-linkedInsurance Scheme 1976;
I further report that the Board of Directors of "the Company" is dulyconstituted with proper balance of Executive Directors Non-Executive Directors. Thechanges 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 was given to all Directors to schedule the Board Meetings agenda anddetailed notes on agenda were sent in advance and a system exists for seeking andobtaining further information and clarifications on the agenda items before the meetingand for meaningful participation at the meeting.
- Majority decision is carried through while the dissenting members views arecaptured and recorded as part of the minutes.
I further report that based on the information received and records maintainedthere are adequate systems and processes in the Company commensurate with the size andoperations of the Company to monitor and ensure compliance with applicable laws rulesregulations and guidelines.
I further report that during the audit period the Company made initial publicoffering of the equity shares to an extent of 1704000 Equity Shares of INR.10/- each ata premium of INR. 15/-per share by way of fresh issuance of Equity Shares and listed inBSE Limited in the list of 'XT' Group Securities w.e.f 14th January 2016.
I further report that
i. The Company has not filed any Advance reporting and/or FC-GPR with Reserve Bank ofIndia for the funds received from FIIs under ASBA as there is delay in receipt ofFIRC/KYC from the concerned Bankers.
ii. As per Section 12 of the Companies Act 2013 the Company is required to mentionits name or names changed during the last two years in all its business lettersbillheads letter papers and all its notices and other official publications. The Companyhas changed its name from Bole Technologies Limited to OFS Technologies Limited witheffect from 25th September 2014 and the Company has missed out to comply withthe above provision in few places.
iii. As per Section 178 of the Companies Act 2013 every listed is required to appointminimum 3 Non-executive Directors in Nomination and Remuneration Committee and the Companyhas not complied with the same.
| ||S Hari Krishnan |
|Place: Chennai ||ACS No: 29583 |
|Date: 27th May 2016 ||CP No: 13740 |
REMUNERATION RATIO OF THE DIRECTORS / KEY MANAGERIAL PERSONNEL (KMP) / EMPLOYEES:Pursuant to Section 197 read with Rule 5 of The Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 and Companies (Particulars of Employees) Rules 1975
|Name ||Designation ||Remunerat ion in FY 14-15 (in Rslakhs) ||Remunerati on in FY 15- 16 (in Rslakhs) ||Percentage increase in remuneration ||Ratio of the remuneration of each director to the median remuneration of the employees of the Company for the financial year |
|1 Jesudas Premkumar ||Managing Director ||13.00 ||13.85 ||6.53 ||2.38 |
|2 Karthikeyan ||Non executive Independent Director ||N.A. ||N.A. ||- ||- |
|3 Allwin Roeger ||Non executive Independent Director ||N.A. ||N.A. ||- ||- |
|4 Ruth Hilda ||Non executive Independent Director ||N.A. ||N.A. ||- ||- |
|5 Ezhumalai ||Chief Financial Officer ||N.A. ||9.20 ||- ||- |
|6 Manivel .K ||Company Secretary ||5.05 ||5.13 ||1.58 ||- |
|Description ||Particulars |
|1. The percentage increase in the median remuneration of employees in the financial year. ||There is an increase in median remuneration by 20.89% as compared to FY 14-15. |
|2. The number of permanent employees on the rolls of Company; ||54 |
|3. The explanation on the relationship between average increase in remuneration and Company performance; ||Average increase in remuneration is based on the Companys performance and other parameters. There was increase in revenue by 8.88% in FY 14-15 as compared to FY 13-14 and increase in revenue in FY 15-16 in comparison with FY 14- 15 by 51.41% |
|4. Comparison of the remuneration of the Key Managerial Personnel against the performance of the Company; ||Total remuneration paid to the Key Managerial Personnel for FY 15-16 constituted 25.36% of the net profits of the Company as compared to 21.68% during FY 14- 15. |
|5. Variations in the market capitalization of the Company price earnings ratio as at the closing date of the current financial year and previous financial year and percentage increase over decrease in the market quotations of the shares of the Company in comparison to the rate at which the Company came out with the last public offer in case of listed companies and in case of unlisted companies the variations in the net worth of the Company as at the close of the current financial year and previous financial year; ||*Given below |
|6. Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration; ||Average percentile increase in salaries of the employees other than Key Managerial Employee was 9.64% as compared to FY 14-15. Average increase in Key managerial remuneration was 69.84% as compared to FY 14-15. |
|7 Comparison of remuneration of each Key Managerial Personnel against the performance of the Company ||CEO: Rs13.85 Lakhs 12.46% of the net profits of the Company |
| ||CFO: Rs9.20 lakhs 8.28% of the net profits of the Company CS: Rs5.13 lakhs 4.61% of the net profits of the Company |
|8. The key parameters for any variable component of remuneration availed by the directors; ||N.A. |
| ||No variable component is paid to the Directors. |
|9. The ratio of the remuneration of the highest paid director to that of the employees who are not directors but receive remuneration in excess of the highest paid director during the year; ||Two employees. Ratio: 1.69 times. |
|10. Affirmation that the remuneration is as per the remuneration policy of the Company. ||Yes. Affirmed that remuneration paid is as per the remuneration policy of the Company. |
|Particulars ||2015-16 (As at 31.03.2016) |
|Market capitalization ||Rs8.47 crores |
|Price earnings ratio ||8.89 |
|Market quotations ||15.40 |
The net worth as at March 31 2015 was Rs 6.09 crores and as at March 31 2016was Rs11.47 crores