The Directors of your Company are pleased to present the 24th Annual Reporton the Business and operations of the Company along with the Audited Accounts for thefinancial year ended 31st March 2017.
1. FINANCIAL SYNOPSIS:
Key aspects of Financial Performance of the Company for the year ended March 312017are tabulated below inter-alia pursuant to the Companies (Accounts) Rules 2014.
The consolidated performance of the Company and its subsidiaries has also been set outherein and wherever required.
| || || || ||(Rs. in Lacs) |
|Particulars || |
| ||Year ended on 31.03.2017 ||Year ended on 31.03.2016 ||Year ended on 31.03.2017 ||Year ended on 31.03.2016 |
|Total Revenue ||109160 ||191955 ||158984 ||193137 |
|Total Expenses ||107807 ||189154 ||157878 ||190850 |
|Profit before Exceptional & Extraordinary Items and Tax ||1353 ||2801 ||1106 ||2287 |
|Exceptional Items ||- ||- ||- ||- |
|Profit Before Tax ||1353 ||2801 ||1106 ||2287 |
|Tax Expense: || || || || |
|(1) Current Tax ||601 ||1330 ||629 ||1330 |
|(2) Deferred Tax ||(239) ||(325) ||(193) ||(325) |
|(3) Taxation Adjustment of previous year (net) ||3 ||(12) ||(20) ||(12) |
|Minority Interest ||- ||- ||(10) ||- |
|Profit After Tax ||988 ||1808 ||680 ||1294 |
|Earnings per equity share ||1.15 ||2.11 ||0.79 ||1.51 |
2. INFORMATION ON STATE OF AFFAIRS OF THE COMPANY
In the financial year 2016-17 your Company continued its growth momentum on keyparameters despite sluggish growth/downturn witnessed by industry across country.Detailed information on state of affairs of the Companies is given in ManagementDiscussion and Analysis Report forming part of this report.
3. TRANSFER TO RESERVES
The Company is not mandatorily required to transfer its surplus to the General Reserveas no dividend has been proposed for the year 2016-17. Hence current year profit has beenproposed to be retained in the Profit and Loss Account.
The Board is of the opinion that the Company should utilize its funds towards theoperations to accelerate the growth rate. Accordingly the Board does not recommend anydividend payment for the year 2016-17.
During the year your Company has not accepted any deposits within the meaning of theprovisions of section 73 of the Companies Act 2013.
6. MATERIAL ORGANIZATIONAL CHANGES
Licensing Agreement with Blackberry
Being highly competitivethe telecom Industry is undergoing rapid changes due to thepace of developments in technology and innovation in business models. Moving in the samedirection Optiemus has very recently joined hands with Canada based Mobile brand"Blackberry". Having signed an Exclusive licensing agreement with BlackberryOptiemus has qualified itself to design sell promote and provide customer supportservice for blackberry mobile devices in India Sri Lanka Nepal & Bangladesh.Blackberry Limited will provide its unparalleled software and security solution whichwill give Optiemus a new platform to keep the innovation alive in this world's fastestgrowing smartphone market and create an affluence for its shareholders.
Ongoing Corporate Restructuring
With a view to offer a strong financial structure to the stakeholders of the Companyachieving better cash flows and to maintain lean organizational structure and betteradministrative control it is intended to merge two of your Company's subsidiaries vizM/s MPS Telecom Private Limited & M/s Oneworld Teleservices Private Limited. DraftScheme of Amalgamation has also been proposed in the notice of the AGM for approval ofMembers. Disclosures like Scheme of Amalgamation Financials of Transferor Companies andother relevant information is annexed to notice.
Direct Listing of Equity shares on NSE in order to provide enhanced liquidity to theshareholders of the Company your Company applied to National Stock Exchange of India(NSE) for listing of its equity shares on NSE under Direct listing route and approval forthe same was granted on August 4 2017 and the equity shares of the Company were listedand admitted for dealings on the exchange w.e.f. August 8 2017. Hence the Company is nowlisted on NSE as well along with BSE.
7. EXTRACT OF ANNUAL RETURN
The extract of annual return as provided under sub-section (3) of section 92 of theCompanies Act 2013 in the prescribed Form MGT-9 is annexed to this Report as Annexure-1.
8. NUMBER OF MEETINGS OF THE BOARD
There were 14 (fourteen) meetings of the Board held during the year. The Maximum gapbetween the two meetings did not exceed 120 days. Detailed information on Board Meetingsis given in Corporate Governance Report.
9. DIRECTORS' RESPONSIBILITY STATEMENT
In pursuance to clause (c) of sub section (3) of section 134 of the Companies Act2013 to the best of their knowledge and belief the Directors of your Company herebyconfirm that:
(i) in the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures;
(ii) the directors had 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 and ofthe profit and loss of the company for that period;
(iii) the directors had 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 andother irregularities;
(iv) the directors had 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 systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
10. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS UNDER SECTION 186 OF THE COMPANIESACT 2013
Details of Investments and loans given falling under the provisions of section 186 ofthe Companies Act 2013 are given under Note No. 12 & 14 of the notes to standalonefinancial statements. The Company has given corporate guarantee to one of its subsidiarynamely M/s Optiemus Electronics Limited against a loan of ' 22 crores from Indusind Bank.
11. RISK MANAGEMENT FRAMEWORK
Given the diversified scale of operations your Company has put in place a frameworkand adopted an enterprise risk management policy. The Company had in place a RiskManagement Committee to assist the Board in fulfilling its corporate governance oversightresponsibilities with regard to the identification evaluation and mitigation ofstrategic operational and in order to timely assess & thereafter minimize the riskinvolved.The details of the Risk Management framework are provided as a part of ManagementDiscussion and Analysis report.
12. CORPORATE SOCIAL RESPONSIBILITY
Pursuant to section 135 of the Companies Act 2013 read with the Companies (CorporateSocial Responsibility Policy) Rules 2014 your Company approved a policy on CSR which isalso hosted on Company's website under web link http://www.optiemus.com/policies.
The detailed report on CSR is attached as Annexure-2 to this report.
13. DISCLOSURE ON ESTABLISHMENT OF VIGIL MECHANISM
Section 177(9) of Companies Act 2013 and SEBI (Listing Obligations and DisclosureRequirement) Regulations 2015 inter alia provides for a mandatory requirement for alllisted companies to establish a mechanism called Whistle Blower Policy' foremployees to report to the management instances of unethical behavior actual orsuspected fraud or violation of the company's code of conduct.
In compliance of the above requirements your Company has established a Vigil (WhistleBlower) Mechanism and formulated a Policy which aims to provide a channel to the Directorsand employees to report genuine concerns about unethical behavior actual or suspectedfraud or violation of the Codes of Conduct or policy. The Vigil (Whistle Blower) Mechanismaims to ensure that the Company is committed to adhere to the highest standards ofethical moral and legal conduct of business operations and in order to maintain thesestandards the Company encourages its employees who have genuine concerns about suspectedmisconduct to come forward and express these concerns without fear of punishment or unfairtreatment.
Further Your Company hereby affirms that no Director/ employee have been denied accessto the Chairman of the Audit Committee and that no complaints were received during theyear.
The Policy is hosted on the Company's website www.optiemus.com under web link http://www. optiemus. com/policies.
14. DIRECTORS & KEY MANAGERIAL PERSONNEL
In accordance with section 152(6) of the Companies Act 2013 the period of office ofat least two-third Directors of the Company shall be liable to retire by rotation out ofwhich atleast one-third Directors shall retire at every Annual General Meeting. Hencethis year Mr. Ashok Gupta retires from the Board by rotation and being eligible offershimself for re-appointment. The information as required to be disclosed under SEBI(Listing Obligation & Disclosure Requirement) Regulations 2015 and SecretarialStandards in case of re-appointment of the director is provided in the Notice of theensuing annual general meeting which forms part of this Annual report.
Declaration by Independent Directors
The Company has received Certificate of Independence from all Independent Directorsinter-alia pursuant to Section 149 of the Companies Act 2013 confirming and certifyingthat they have complied with all the requirements of being an Independent Director of theCompany.
Inter-se relationship of Directors
Ms. Renu Gupta Non-Executive Director is a relative of Mr. Ashok Gupta ExecutiveChairman of the Company. No other Directors are related to each other. Also there were nopecuniary transactions or relationship of the Non-Executive Directors vis-a-vis thecompany.
Selection and Appointment of Directors
The charter of Nomination and Remuneration Committee of the Board empowers it to reviewthe structure size composition and diversity of the Board evaluation of existingskills defining gaps and making necessary recommendations to the Board.
The Companies Act 2013 and the SEBI (Listing obligations and Disclosure Requirements)Regulations 2015 requires the Annual report to disclose manner in which formal annualevaluation of the Board its Committee and individual Directors is done and evaluationcriteria thereof. Performance evaluation criteria for Board Committees of the Board andDirectors are placed on the Company's website www.optiemus.com under the web linkhttp://www.optiemus.com/policies as a part of Company's Nomination & RemunerationCommittee Policy.
Manner in which said evaluation was made by the Board is given below:
Based on the criteria a structured questionnaire was prepared after taking intoconsideration inter-alia the inputs received from the Directors (except for the directorbeing evaluated) for the year under review. The structured questionnaire covered variousaspects of the Board's functioning such as strategic alignment and direction engagementalignment composition and structure dynamics and culture ethical leadership andcorporate citizenship support to the Board Committees evaluation and self-evaluationetc.
The Ratings for Non-Independent Directors were given by the IndependentDirectors at a separate meeting convened by them. The ratings for Independent Directorswere given by all the Directors excluding the Independent Director being evaluated. TheEvaluation for performance of Committees was given by the entire Board.
A consolidated summary of the ratings given by each of the directors was thenprepared separately for Independent & Non-Independent Directors based on which areport on performance evaluation was prepared in respect of the performance of the Boardits Committees and Directors during the year under review.
The report on performance evaluation of Non Independent Directors so arrived atwas then noted and discussed by the Nomination and Remuneration Committee and that ofIndividual Directors and committees Board at their respective meetings.
The performance evaluation of individual Directors including Chairman of the Board wasdone in accordance with the provisions of the Companies Act 2013 and Listing Regulationsand also based on the structured questionnaire mentioned above.
Familiarizing programme for Independent Directors
SEBI (Listing obligations & Disclosure Requirement) Regulations 2015 and theapplicable provisions of Companies Act 2013 requires conduction of familiarizationprogramme of the independent directors. On these lines Board has always endeavored tokeep Independent Directors updated about the latest happenings in the Company for whichPeriodic familiarization programmes are conducted for the directors about the businessoperations new avenues industry overview threats opportunities and challenges inrespective verticals.
15. PARTICULARS OF EMPLOYEES AND OTHER DISCLOSURES
Disclosures pertaining to remuneration and other details as required under Section197(12) of the Companies Act 2013 read with Rule 5 of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 are provided in the Annexure -3 formingpart of the Annual Report.
Pursuant to the provisions of section 139 of the Companies Act 2013 and the Rules madethereunder the current Statutory Auditors of the Company M/s RMA & AssociatesCharteredAccountants (registration number: 000978N) were appointed by the shareholders atthe 21st annual general meeting to hold office until the conclusion of the 25thannualgeneral meeting subject to ratification by shareholders at each annual general meeting.However they resigned from the office of Statutory Auditors of the Company w.e.f.December 13 2016 due to unavoidable circumstances resulting into a casual vacancy inthe office of Statutory Auditors of the Company as envisaged by section 139(8) of the Act.
Accordingly The Audit Committee and the Board of Directors in their respectivemeetings recommended to appoint M/s Mukesh Raj & Co. Chartered Accountants (FirmRegistration No. 016693N) as Statutory Auditors of the Company to fill the casual vacancycaused by the resignation of M/s. RMA & Associates. Consequently in the process ofPostal Ballot conducted by the Company (through postal ballot notice dated February 142017) the shareholders by passing Ordinary resolution approved the appointment of M/sMukesh Raj & Co. to be appointed as Statutory Auditors of the Company to hold officeupto the conclusion of ensuing Annual General Meeting.
In terms of section 139 of the Companies Act 2013 since a Statutory Auditor has to beappointed for a period of five years at a time subject to ratification by shareholders atevery Annual General meeting your Company proposed to appoint M/s Mukesh Raj & Co.(firm registration no. 016693N) as the
Statutory Auditors of your Company for a term of 5 years commencing from the conclusionof the ensuing Annual General Meeting till the conclusion of the 29thAnnualGeneral Meeting of the Company to be held in the calendar year 2022. The Company hasreceived written consent and confirmation from M/s Mukesh Raj & Co. to the effect thattheir appointment if made would be within the limits prescribed under Section 141 of theAct and rules framed thereunder and that they satisfy the criteria provided there. Alsothe Statutory Auditors have confirmed that they have subjected themselves to the peerreview process of the Institute of Chartered Accountants of India (ICAI) and that theyhold a valid certificate issued by the Peer Review Board of ICAI.
Accordingly Ordinary Resolution is proposed for the consideration and approval ofmembers in the notice forming part hereto.
The statutory audit report submitted by M/s Mukesh Raj & Co. for FY 2016-17 doesnot contain any qualification reservation or adverse remark or disclaimer made bystatutory auditors. The Auditors did not report any fraud during the year.
M/s Mukesh Raj & Co Chartered Accountants have certified that the company hascomplied with the mandatory requirements of corporate governance as stipulated in ListingRegulations. The same is annexed to this report as Annexure -4.
Pursuant to the provisions of section 204 of the Companies Act 2013 and Rules madehereunder the Company appointed M/s S K Batra & Associates Company Secretaries inPractice (Membership number: 7714 C.P. No. 8072) to undertake the secretarial audit ofthe Company. Secretarial Audit Report for the financial year 2016-17 as given by M/s S.K.Batra & Associates in the prescribed form MR-3 is annexed to this Report as Annexure-5
The Adverse remarks contained in Secretarial Audit Report for the year under review andCompany's reply thereto is as follows:
|Adverse Remark ||Company Reply |
|Managerial Remuneration has been paid in excess of the limits prescribed in section 197 of the companies Act 2013 read with Schedule V of the Act although the company is in the process of applying waiver from the Central government. ||Major reform announced by Government to demonetize of two highest demonization notes created bearish momentum in near term adversely impacting all sectors and industries Telecom Industry being one of them which resulted in low sales volume of mobile handset. resulting in low profits and inadequate profits. However considering the contribution of Manegerial personnel Company is already in process of applying waiver of access remuneration paid and in this regard a special resolution seeking approval of shareholders for waiver of such excess remuneration paid has been proposed in the notice of the Annual General Meeting forming part of this report. Once approval of members is obtained application to Central Government shall be made. |
|The Company has not expended on account of CSR (Corporate Social Responsibility) as per the provisions of section 135 of the Act. However in accordance with section 134(3)(o) of the Act the Company has disclosed all the relevant information about its CSR Policy and its implementation including the reasons of non-spending. ||The Company could not spend requisite amount as no appropriate trust(s)/NGO for spending allocated amount could be found on the projects as were discussed and decided by the Committee and the Board. However the Company shall create a provision of setting aside the unspent amount. |
17. DISCLOSURE UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITION& REDRESSAL) ACT 2013
The Company has in place an Anti-Sexual Harassment Policy in line with therequirements inter-alia of The Sexual Harassment of Women at Workplace (PreventionProhibition Redressal) Act 2013. An Internal Committee has been set up to redresscomplaints received regarding sexual harassment. All employees (permanent contractualtemporary and trainees) are covered under this policy.
The following is a summary of sexual harassment complaints received and disposed offduring the Financial Year 2016-17:
| No. of complaints received ||: Nil |
| No. of complaints disposed off ||: N.A |
18. PARTICULARS OF CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGEEARNINGS AND OUTGO
Conservation of Energy
Considering the nature of business of the Company energy does not form a significantportion of the cost for the Company yet wherever possible and feasible continuous effortsare being put for conservation of energy and minimize power cost. However Capitalexpenditure on energy conservation equipment is not required keeping in view the normalenergy consumption in the business activity of the Company. Various Steps are being takenfor conservation of energy and using alternate sources of energy to name a few:
Advocating switching off of lights and ACs when not required turning off of PCswhen not in use setting higher temperatures on air conditioners etc to reduceconsumption.
Installed various energy saving electrical devices for saving energy.
Puts control on usage of other electrical equipments.
Taking into consideration the nature of Business of Company No technology is beingused.
Foreign exchange earnings and Outgo
The Company has continued to maintain focus on and avail of export opportunities basedon economic considerations.
Foreign Exchange Earning & Outgo details are as follows:
|Foreign Exchange details * ||As on 31st March 2017 |
| ||(Figures in Lacs) |
|Foreign Exchange Earnings (A)(Including deemed exports & sales through export houses) ||907 |
|Foreign Exchange Outgo (B) ||78180 |
|Net Foreign Exchange Earnings (A-B) ||(77273) |
*The Figures are on receipt/payment basis.
As on 31st March 2017 the Company has six unlisted subsidiaries namely
i. Oneworld Teleservices Private Limited
ii. Optiemus Electronics Limited
iii. FineMS Electronics Private Limited
iv. MPS Telecom Private Limited
v. Optiemus Infracom (Singapore) Pte. Limited
vi. Optiemus Metals & Mining Pte. Limited
During the year under purview The Company acquired two subsidiaries namely M/s FineMS Electronics Private Limited which is incorporated on 9th July 2016 as aJoint venture between the Company and M/s SC Finetechnix Private Limited. FineMS isengaged in the business of manufacturing of Mobile and allied accessories. Optiemus holds60% of the Equity Share Capital in the Company. Another Company which became wholly ownedsubsidiary of Optiemus is M/s MPS Telecom Private Limited. Currently MPS is engaged in thedistribution business of HTC Branded Mobile Phones in India for General Trade (North West& South). 100% equity shares of the Company were acquired for all-cash deal with aview to merge MPS in Optiemus Infracom Limited in terms of Section 233 of the CompaniesAct 2013 under fast track route.
During the year the Company divested its entire stake in M/s Kishore Exports IndiaPrivate limited. Also M/s Optiemus Infracom International Fze Company incorporated inUAE as a wholly owned subsidiary of the Company got dissolved in the reporting period.
No associate Company was acquired or sold during the year.
In accordance with the provisions of Section 129(3) of the Companies Act 2013 readwith Rule 8 of Companies (Accounts) Rules 2014 the Company has prepared its consolidatedfinancial statement including all of its subsidiaries which is forming part of thisreport.
The highlights of financial position and performance of its subsidiaries are given inthe statement containing salient features of the financial statements of the saidsubsidiaries in Annexure -6 to this report.
In accordance with Section 136 of the Companies Act 2013 the Annual Report of theCompany containing therein its standalone and the consolidated financial statements hasbeen hosted on the website www.optiemus.com. Further the annual accounts of each of thesaid subsidiary companies of the Company have also been hosted on the websitewww.optiemus.com. Any shareholder who may be interested in obtaining a physical copy ofthe aforesaid documents may write to the Company Secretary. Further please note that thesaid documents will be available for examination by the shareholders of the Company at itsRegistered & Corporate Office during business hours.
The Company has two material unlisted Companies namely M/s Optiemus Electronics Limitedand M/s MPS Telecom Private Limited where material subsidiary is defined in SEBI (ListingObligations & Disclosure Requirements) Regulations 2015 to mean a subsidiary whoseincome or net worth exceeds twenty percent of the consolidated income or net worthrespectively of the listed entity and its subsidiaries in the immediately precedingaccounting year.
The Policy for determining material' subsidiaries is hosted on the website of theCompany under the web link.http://www. optiemus. com/policies.
20. RELATED PARTY TRANSACTIONS
There were no materially significant transactions with Related Parties during thefinancial year 201617 which were in conflict with the interest of the Company. During theyear under reference However there were certain transactions with the related parties ofthe Company executed in ordinary course of business at arm's length. The disclosure ofsuch transactions as required under Companies Act 2013 attached herewith as Annexure-7.Further Suitable disclosures as required under AS-18 have been made in Note 32 of theNotes to the financial statements.
The policy on Related Party Transactions as approved by the Board is hosted on theCompany's website under the web link http://www.optiemus.com/policies
21. SIGNIFICANT AND MATERIAL ORDERS
There are no significant and material order passed by the Regulators or Courts orTribunals impacting the going concern status and Company's operations in future.
22. SHARE CAPITAL
The paid-up equity share capital as on 31 March 2017 was Rs. 85.81 Crore.
There was no public issue rights issue bonus issue preferential issue or redemptionof shares etc. during the year. Also The Company has not issued shares with differentialvoting rights or sweat equity shares. With regard to Stock Options The Company has in itsExtra-Ordinary General Meeting held on December 30 2016 interalia obtained approval ofthe shareholders of the Company by way of Special Resolution for approval ofOptiemus Employees Stock Option Scheme 2016' but the Company has not granted anystock Options during the year.
23. ADEQUACY OF INTERNAL FINANCIAL CONTROLS
The Board reviews the adequacy and effectiveness of the internal finance controls fromtime to time. The Board in consultation with the internal Auditors and risk managementcommittee monitors and controls the major financial risk exposures.
24. CORPORATE GOVERNANCE
The Company is committed to maintain the highest standards of Corporate Governance. TheDirectors adhere to the requirements set out by the Securities and Exchange Board ofIndia's Corporate Governance Practices and have implemented all the stipulationsprescribed.
Pursuant to SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 aseparate section titled Corporate Governance' has been included in this annualreport along with the reports on Management Discussion and Analysis.
Your Directors wish to express their sincere appreciation for the co-operation andassistance received from the Bankers Regulatory Authorities Stakeholders includingCustomers and other business associates who have extended their valuable support andencouragement during the year under review.
The directors also acknowledge the hard work dedication and commitment of theemployees of the Company. The enthusiasm and unstinting efforts of the employees haveenabled the Company to continue being a leading player in the Telecom Industry.
| ||On behalf of the Board of Directors |
| ||For Optiemus Infracom Limited |
|Place : Noida (U.P) ||Ashok Gupta |
|Date : November 112017 ||Executive Chairman |