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Quest Softech India Ltd.

BSE: 535719 Sector: IT
NSE: N.A. ISIN Code: INE989J01017
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VOLUME 400
52-Week high 2.36
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P/E 3.87
Mkt Cap.(Rs cr) 2
Buy Price 2.36
Buy Qty 15.00
Sell Price 0.00
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OPEN 2.36
CLOSE 2.25
VOLUME 400
52-Week high 2.36
52-Week low 1.32
P/E 3.87
Mkt Cap.(Rs cr) 2
Buy Price 2.36
Buy Qty 15.00
Sell Price 0.00
Sell Qty 0.00

Quest Softech India Ltd. (QUESTSOFTECH) - Director Report

Company director report

To

The Members

Your Directors have pleasure in presenting their Seventeenth (17th) Annual Report onthe business and operations of the Company and the accounts for the Financial Year endedMarch 31 2016.

1. FINANCIAL SUMMARY OR HIGHLIGHTS/PERFORMANCE OF THE COMPANY

(Rs In lakhs)

Particulars For the year ended March 31 2016 For the year ended March 31 2015
Total income 9.51 49.85
Expenditure 46.00 44.76
Profit before interest finance charges and depreciation (5.61) 35.98
Interest and finance charges - -
Depreciation 30.88 30.88
Profit before tax (36.49) 5.09
Profit after taxation (28.73) 8.03
Balance brought forward from previous year (514.37) (521.59)
Loss after taxation carried forward to Balance Sheet (543.10) (514.37)

2. BRIEF DESCRIPTION OF THE COMPANY’S AFFAIRS DURING THE YEAR

Quest Softech (India) Limited ("Quest") is a Public Limited Company listedon Bombay Stock Exchange (BSE) Limited on July 05 2013. The main business of the Companyis providing software and hardware consulting services related to the preparation andmaintenance of accounting information and reports. The registered and corporate office ofQuest is in Mumbai.

3. DIVIDEND

In view of unavailability of sufficient profits the Board of Director of the Companyregrets their inability to recommend any dividend for the Financial Year ended March 312016.

4. RESERVES

Due to insufficient profit the company has not transferred any amount to reservesduring the year.

5. MATERIAL CHANGES AND COMMITMENTS IF ANY AFFECTING

THE FINANCIAL POSITION OF THE COMPANY WHICH HAVE OCCURRED BETWEEN THE END OF THEFINANCIAL YEAR OF THE COMPANY TO WHICH THE FINANCIAL STATEMENTS RELATE AND THE DATE OF THEREPORT

There have been no material changes affecting the financial position of the Companywhich have occurred between the end of the financial year of the Company and the date ofthe Report.

6. CHANGES IN NATURE OF BUSINESS

There has been no change in the business of the Company during the year under review.

7. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTSOR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY’S OPERATIONS IN FUTURE

During the year under review no significant and material orders have been passed bythe regulators or courts or tribunals impacting the going concern status andCompany’s operations in the future.

8. INTERNAL FINANCIAL CONTROLS AND THEIR ADEQUACY

The Company has in place adequate systems of Internal Control to ensure compliance withpolicies and procedures which is commensurate with size scale and complexity of itsoperations. The Company has appointed an external professional firm as an InternalAuditor. The Internal Audit of the Company is regularly carried out to review the internalcontrol systems and processes. The internal Audit Reports along with implementation andrecommendations contained therein are periodically reviewed by Audit Committee of theBoard.

9. AUDITORS a. Statutory Auditor

The Board of Directors of the Company appointed M/s Chokshi & Chokshi LLP (FirmRegistration No. 131228W / W100044) to hold the office from the conclusion of this AGMtill the conclusion of the Company’s Annual General Meeting to be held in the year2021 subject to the ratification of shareholder at each AGM.

b. Secretarial Auditor

Pursuant to provisions of Section 204 of the Companies Act 2013 read with Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hasappointed M/s. Dharmendra Sharma & Associates Company Secretaries as the SecretarialAuditors of the Company to undertake Secretarial Audit of the Company. The SecretarialAudit Report is annexed herewith as Annexure II.

c. Internal Auditor

M/s Bajrang Paras & Co Chartered Accountants performs the duties of internalauditor of the Company and their report is reviewed by the audit committee periodically.

10. AUDITORS’ REPORT

There was no qualification reservation or adverse remark or disclaimer made by theStatutory Auditors in their report and the said Auditor’s Report & notes toaccounts are self-explanatory.

11. NUMBER OF MEETINGS OF THE BOARD

The Board of Directors of the Company met 6 (six) times during the year under review.In addition to this one meeting of Independent Director’s was also held. The detailsof the meetings of the Board including of its Committees meeting are given in the Reporton Corporate Governance section forming part of this Annual Report.

12. SEPARATE MEETING OF INDEPENDENT DIRECTORS

Pursuant to Schedule IV to the Companies Act 2013 a meeting of Independent Directorswas held on November 14 2015 without the attendance of non-independent directors andmembers of Management. In addition the Company encourages regular separate meetings ofits independent directors to update them on all business-related issues and newinitiatives.

13. SUBSIDIARIES JOINT VENTURES AND ASSOCIATE COMPANIES

The Company does not have any Subsidiary Joint Venture or Associate Company (ies).

14. SHARE CAPITAL

The Paid-up Equity Share Capital of the Company on March 31 2016 was ` 10 crore.There was no change in the Authorised or Paid-up Capital/Subscribed Capital during FY2015-16.

15. DECLARATION BY INDEPENDENT DIRECTOR(S) AND RE-APPOINTMENT IF ANY

The Company has received declarations from all Independent Directors that they meet thecriteria of independence as laid down under Section 149(6) of the Act and Clause 49 of theListing Agreement.

16. VIGIL MECHANISM

The Company has established a Vigil Mechanism that enables the Directors and Employeesto report genuine concerns. The Vigil Mechanism provides for (a) adequate safeguardsagainst victimization of persons who use the Vigil Mechanism; and (b) direct access to theChairperson of the Audit Committee of the Board of Directors of the Company in appropriateor exceptional cases.

17. EXTRACT OF ANNUAL RETURN

Extract of Annual Return pursuant to the provisions of Section 92 read with Rule 12 ofthe Companies (Management and Administration) Rules 2014 is furnished in Annexure I andis attached to this Report.

18. DEPOSITS

Your Company has not accepted any fixed deposits as defined in Section 73 and 74 ofthe Companies Act 2013 read with the relevant rules during the year under review.

19. MANAGERIAL REMUNERATION

The Board on the recommendation of the Nomination & Remuneration Committee approveda policy for selection and appointment of Directors Senior Management and for determiningtheir remuneration.

20. SECRETARIAL AUDIT REPORT

Pursuant to the provisions of Section 204 of the Act and the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 the Board of Directors has appointedMr. Dharmendra Sharma & Associates Practicing Company Secretary for conductingsecretarial audit of the Company for the financial year 2015-2016.

The Secretarial Audit Report is annexed herewith as Annexure II. The Secretarial Auditreport does not contain any qualification reservation or adverse remark.

21. DIRECTORS AND KEY MANAGERIAL PERSONNEL

Pursuant to the provisions of Section 149 of the Act Mrs. Kalpana Sah was appointed asWomen Independent Director and she resigned on May 30 2016.

Ms. Aditi Nangalia was appointed as an Additional Director of the Company on Board onMay 30 2016 to be appointed as Women Independent Director of the Company. She has alsosubmitted a declaration that she meets the criteria of independence as provided in section149(6) of the Act and there has been no change in the circumstances which may affect herstatus as independent director during the year.

Mr. Suresh Vishwasrao retires at the AGM and has offered himself for re-appointment.Necessary resolutions for the appointment and re-appointment of the aforesaid Directorshave been included in the Notice convening the ensuing AGM and details of the proposal forappointment is mentioned in the Explanatory Statement to the Notice.

22. COMMITTEES OF THE BOARD

The committee of the Board duly constituted as per regulation 17 SEBI ListingObligation and Disclosure Requirement (LODR) 2015. It is disclosed separately in thecorporate governance report which forms part of the directors’ report.

23. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS UNDER SECTION 186

The Company has certain loans and unquoted investments. The details of changes in theLoans Guarantees and Investments covered under the provisions of Section 186 of the Actare given in the notes to the Financial Statements.

24. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

The Company has neither made any transaction with any related party and nor enteredinto any contract with any related party which is detrimental to the operation of theCompany. Therefore no such disclosure been annexed to this Report.

25. CORPORATE GOVERNANCE CERTIFICATE

The Company is committed to good corporate governance in line with the ListingAgreement with Stock Exchange and Quest Softech corporate governance norms. The Company isin compliance with the provision on corporate governance specified in the ListingAgreement and SEBI (LODR).

A certificate

Prakash Rane Practicing Company Secretary and his report on Corporate Governance formpart of this Annual Report.

Management’s Discussion and Analysis Report for the year under review asstipulated under SEBI regulation 34 of Listing Obligation and Disclosure Requirement(LODR) 2015 with the Stock Exchanges in India is presented in a separate section formingpart of the Annual Report.

26. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS ANDOUTGO

The provision of Section 134 of the Companies Act 2013 read with Companies (Disclosureof Particulars in the Report of Board of Directors) directors furnish herein below theadditional information

a. Conservation of Energy

Although the operation of the Company is not energy intensive it continues to adoptenergy conservation measure at all operational levels. The disclosure under Section 134(3)(m) of the Companies Act 2013 read with the Companies (Accounts) Rules 2014 is notapplicable to the company.

b. Technology Absorption

Your Company has not imported any technology during the year under review.

c. Foreign exchange earnings and outgo

During the year under review there were no transactions in Foreign Currency.

27. CORPORATE SOCIAL RESPONSIBILITY (CSR)

Due to unavailability of sufficient profit the Company could not contribute to theCorporate Social Responsibility activities.

28. PARTICULAR OF EMPLOYEES

The information required under Section 197 of the Act read with rule 5(1) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 are givenbelow:

a) The ratio of the remuneration of each director to the median remuneration of theemployees of the company for the financial year;

Executive Director Ratio to median remuneration
Mr. Dhiren Kothary 0.20
Non-Executive Director Ratio to median remuneration
Mr. Suresh Vishwasrao -
Mr. Paresh Zaveri -
Ms. Kalpana Sah -

b) the percentage increase in remuneration of each director Chief Financial OfficerChief Executive Officer Company Secretary or Manager if any in the financial year;

Directors Chief Executive Officer Chief Financial Officer and Company Secretary % increase in remune- ration in the financial year
Mr. Dhiren Kothary -
Mr. Suresh Vishwasrao -
Mr. Paresh Zaveri -
Ms. Kalpana Sah -
Ms. Archana Tripathi -

c) The percentage decrease in the median remuneration of employees in the financialyear – 20%

d) The number of permanent employees on the rolls of company –

2 (Two)

e) The explanation on the relationship between average increase in remuneration andcompany performance

- The decrease in company revenue for the Financial Year 15-16 over 14-15 was 81% andthe average increase in remuneration was 92%. The average increase in remuneration is notbased on Quest Softech’s performance alone but also takes into consideration otherfactors like market benchmark data; the average increases being given by peer companiesindustrial standard rate and overall budgetary impact within the Company.

f) Comparison of the remuneration of the Key Managerial Personnel against theperformance of the company;

Aggregate remuneration of key managerial personnel (KMP) FY16 (in lakhs)
Revenue (in lakhs) 9.5
Remuneration of KMPs 96
(as % of revenue)
Profit before Tax (PBT) (36.49)
(in lakhs)
Remuneration of KMP *
(as % of PBT)

*The Remuneration of KMP (as % of PBT) cannot be calculated.

g) Variations in the market capitalisation of the company price earnings ratio as atthe closing date of the current financial year and previous financial year

Particulars March 31 2016 March 31 2015 % Change
Market Capitalisation ( in lakhs) 205 764 (73.17%)
Price Earnings (PE) Ratio * 95.20 -

*Due to loss in FY 2015-16 the PE ratio cannot be calculated.

h) Percentage increase over decrease in the market quotations of the shares of thecompany in comparison to the rate at which the company came out with the last public offerin case of listed companies

- The Company was listed as a result of Scheme of Arrangement and has not come out withan IPO. Hence the details of the same are not applicable.

i) Average percentile increase already made in the salaries of employees other thanthe managerial personnel in the last financial year and its comparison with the percentileincrease in the managerial remuneration and justification thereof and point out if thereare any exceptional circumstances for increase in the managerial remuneration

- The average increase in salary of employee during the year was 92%. There is noexceptional increase in the remuneration of Managerial Remuneration in comparison to theaverage increase in the salary of other employees.

j) Comparison of each remuneration of the Key Managerial Personnel against theperformance of the company;

Mr. Dhiren Kothary Ms. Archana Tripathi
Executive Director Company Secretary
Remuneration in FY 2016 (in lakhs) 1.2 7.63
Revenue 9.5 9.5
Remuneration as % of revenue 96% 96%
Profit before Tax (PBT) (in lakhs) (36.49) (36.49)
Remuneration (as % of PBT) * *

*Due to loss in FY 2015-16 the Remuneration of KMP (as % of PBT) cannot be calculated.

j) The key parameters for any variable component of remuneration availed by thedirectors - None k) The ratio of the remuneration of the highest paid director tothat of the employees who are not directors but receive remuneration in excess of thehighest paid director during the year - 6.36 times

l) Affirmation that the remuneration is as per the remuneration policy of the company.

- The Company affirms remuneration is as per the remuneration policy of the Company.The statement containing particulars of employees as required Rule 5(2) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 is not applicable tothe Company there are no employees drawing salary in excess of the limits prescribedunder the said Act.

29. DIRECTORS’ RESPONSIBILITY STATEMENT

In accordance with the provisions of Section 134(3) (c) and 134(5) of the CompaniesAct 2013 the Board of Directors confirms 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 judgements and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company as at March 312016 and of the profit ofthe Company for that year;

c) the Directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;

d) the Directors have prepared the annual accounts on a going concern basis;

e) the Directors have laid down internal financial controls to be followed by theCompany and that such financial controls are adequate and were operating effectively;

f) the Directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.

30. BOARD EVALUATION

Pursuant to the provisions of the Companies Act 2013 the Board has carried out anannual performance evaluation of its own performance the directors individually as wellas the evaluation of the working of the Audit and Nomination & RemunerationCommittees.

31. RISK MANAGEMENT

The Company has devised and implemented a mechanism for risk management and hasdeveloped a Risk Management Policy. The Policy work towards identifying internal andexternal risks and implementing risk mitigation steps.

32. DISCLOSURES OF RATIO OF REMUNERATION TO EACH DIRECTOR

The disclosure on remuneration and other matters provided in Section 178(3) of the Act.The policy contains provisions relating to Directors’ appointment and theirremuneration criteria for determining qualifications positive attributes independenceof director remuneration of Key Managerial Personnel Senior Managerial Personnel andother employees.

33. LISTING WITH STOCK EXCHANGES

The Company’s shares are listed on BSE Ltd. (BSE) & with effect from July 052013.

The annual listing fee for the financial year 2016-17 to BSE has been paid andrequisite taxes in respect of listing fees has been deposited to the statutory authority.

34. MATERIALCHANGESANDCOMMITMENTS

There have been no material changes affecting the financial position of the Companywhich have occurred between the end of the financial year of the Company and the date ofthe Report.

35. BOARD EVALUATION

The Board of Directors has carried out an annual evaluation of its own performanceboard committees and individual directors pursuant to the provisions of the Act and thecorporate governance requirements as prescribed by Securities and Exchange Board of India(Listing Obligations and Disclosure Requirements) Regulations 2015 ("SEBI ListingRegulations").

36. DISCLOSURE UNDER SEXUAL HARRASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITIONAND REDRESSAL) ACT 2013

The disclosures required to be under Sexual Harassment of Women at Workplace(Prevention Prohibition & Redressal) Act 2013 are given in the following table: -

1 Number of complaints of sexual harassment received in the year Nil
2 Number of complaints disposed off during the year Not applicable
3 Number of cases pending for more than 90 days Not applicable
4 Whether workshops or awareness programs against sexual harassment were carried out Yes. Awareness program was done for all employees
5 Nature of action taken by the employer Not applicable

37. ACKNOWLEDGEMENTS

Your Directors acknowledge with gratitude and wishes to place on record itsappreciation for the dedication and commitment of your Company’s employees at alllevels which has continued to be our major strength. Your Company has been able to operateefficiently because of the culture of professionalism creativity integrity andcontinuous improvement in all functions and areas as well as the efficient utilization ofthe Company’s resources for sustainable and profitable growth.

Your Directors also thank the shareholders investors customers business partnersbankers and other stakeholders for their confidence in the Company and its management andlook forward for their continuous support.

For and on behalf of the Board of Directors
Dhiren Kothary Suresh Vishwasrao
Executive Director Non-Executive Director
(DIN-00009972) (DIN- 00837235)
Date: August 13 2016
Place: Mumbai
Registered Office:
82 Mittal Court A Wing
8th Floor Nariman Point
Mumbai- 400 021