The Board of Directors of 8K Miles Software Services Limited have pleasure inpresenting the Thirty Third Annual Report on the business & operations for the yearended 31st March 2018 along with the Audited Financial Statements for the year.
The Financial performance of the Company for the year ended 31st March 2018& 31st March 2017 is summarized below. The financial statements for theyear have been prepared in accordance with the new mandatory accounting standards Ind ASnotified under the Companies (Indian Accounting Standards) Rules 2015 and Companies(Indian Accounting Standards) Amendment Rules 2016 as applicable and necessary changeswere made to the corresponding figures of the previous year.
|Particulars || |
|FY18 ||FY17 ||FY18 ||FY17 |
|Revenue ||84923.87 ||52833.50 ||5056.52 ||3746.40 |
|Earnings Before Interest & Depreciation ||30087.02 ||18541.64 ||1560.76 ||737.26 |
|Interest ||971.49 ||135.30 ||755.42 ||89.90 |
|Depreciation and Amortization ||2518.68 ||1351.63 ||83.87 ||304.28 |
|Profit Before Tax (PBT) ||26596.85 ||17054.71 ||721.47 ||343.08 |
|Profit After Tax (PAT) before Minority Interest ||20552.14 ||12917.03 ||487.84 ||163.28 |
|Profit After Tax (PAT) after Minority Interest ||17172.45 ||10445.58 ||487.84 ||163.28 |
FINANCIAL PERSPECTIVE (CONSOLIDATED)
On consolidated basis revenue for the year is ' 84923.87 lakhs signifying agrowth of 60.74% in Rupee terms. EBITDA margin for the current year is 35.08 % as comparedto 35.03 % in previous year. Profit After Tax (PAT) after Minority Interest has increasedby 64.40 % to ' 17172.45 Lakhs as compared to ' 10445.58 Lakhs in theprevious year. Total employee benefit expenses have increased by 33.57%. However Employeebenefits expenses as a percentage to revenue has decreased by only 5.64% on Revenue.
Highlights of performance are discussed in detail in the Management Discussion andAnalysis Report attached as Annexure D to this Report.
We have only one class of shares - equity shares of par value ' 5 each. Theauthorized share capital as at 31st March 2018 was ' 3000 Lakhs dividedinto 600 Lakhs Equity shares of ' 5 each. The paid-up share capital as at 31stMarch 2018 was ' 1525.88 lakhs divided into 30517605 equity shares of '5 each.
Your company is exploring new business opportunities; therefore it is necessary toconserve the funds to meet these investment opportunities which your Board believes wouldenhance the shareholders' wealth in coming periods. Thus your Board has not recommendedany dividend for the financial year 2017-18.
TRANSFER TO RESERVES
The provisions of Section 124(5) of the Companies Act 2013 do not apply as the amountlying with unpaid dividend account is not more than seven years.
Your Company has not accepted any deposits within the meaning of Section 73 of theCompanies Act 2013 and the Companies (Acceptance of Deposits) Rules 2014.
TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND
The provisions of Section 125(2) of the Companies Act 2013 do not apply as there wasno dividend declared and paid during the year.
MATERIAL CHANGES AND COMMITMENT IF ANY AFFECTING THE FINANCIAL POSITION OF THE COMPANY
There have not been any material changes and commitments if any affecting thefinancial position of the Company which have occurred between the end of the FinancialYear of the company to which the financial statements relate and the date of the Report& change in nature of business if any.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
Loans guarantees and investments covered under Section 186 of the Act form part of thenotes to the financial statements provided in this Annual Report.
BOARD AND COMMITTEE MEETINGS
The Board met 7 times during the year. The details regarding the board meetings andcommittee meetings are given separately in the Corporate Governance Report as AnnexureB to this report. The gap intervening between two meetings of the board is within thestipulated time frame prescribed in the Companies Act 2013 and SEBI (LODR) Regulations2015.
Independent Directors of the company are not liable to retire by rotation. The companyhas received declarations from all the Independent Directors of the company confirmingthat they meet the criteria of independence as prescribed under Section 149 (6) of theCompanies Act 2013 and Regulation 16 (1) (b) of the SEBI (LODR) Regulations 2015. Theterms of appointment of Independent Directors are available in the website of the company.
SEPARATE MEETING OF INDEPENDENT DIRECTORS
During the year a separate meeting of Independent Directors was held on 30thMarch 2018. The Independent Directors actively participated and provided guidance to theCompany in all its spheres.
NOMINATION AND REMUNERATION POLICY
The Nomination and Remuneration Committee of the Company reviews the composition ofboard to ensure that there is appropriate mix of talent qualification experience anddiversity in the Board. Pursuant to Section 178 of the Companies Act 2013 theRemuneration policy has been formulated to govern the terms of appointment andremuneration of Directors of the Company. The policy ensures that the remuneration paid issufficient to retain and motivate the Directors of the company. The Remuneration policy isavailable in the website of the Company.
1) 8K Miles Software Services Inc. USA
- Nexage Technologies USA Inc
- (ii) Cornerstone Advisors Inc. USA
2) 8K Miles Software Services FZE. UAE
3) 8K Miles Health Cloud Inc. USA
- Serj Solutions Inc. USA
- 4) Mentor Minds Solutions and Services Inc. USA
- 5) Mentor Minds Solutions and Services (P) Ltd. India (Till 28th February 2018)
The accounts of the subsidiary companies are consolidated with the accounts of thecompany in accordance with the provisions of section 129 of the Companies Act 2013 andregulation 33 of SEBI (LODR) Regulations 2015. The consolidated financial informationforms part of the Annual Report.
A statement under Section 129 (3) of the Companies Act 2013 in Form AOC-1 is attachedas Annexure F to the Directors Report.
CONSERVATION OF ENERGY
- Company ensures that the operations are conducted in the manner whereby optimum utilisation 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 utilisation of energy are not quantitative its impact on cost cannot be stated accurately.
- d) Since the Company does not fall under the list of industries which should furnish this information in Form A annexed to the aforesaid Rules the question of furnishing the same does not arise.
TECHNOLOGY ABSORPTION & FOREIGN EXCHANGE EARNINGS
The Company continues to innovate develop adopt and use the latest technologies toimprove the productivity and quality of its services. The Company's core business demandsinnovation & adoption of emerging technologies to stay ahead of competition. TheCompany has made significant investments in area of Product/ framework to reduce the Cloudtransformation time for our customers while staying ahead of competition.
The Company has taken following initiatives during the year to improve the productivityand quality of its services:
Developed Patient-centric Health Exchange platform targeting to have Patient asthe central and primary focus on the Blockchain technology. This will enable the platformto represent Patient's medical history effectively which is the foundation for Healthcareand Health Information Exchange. Such Exchange can be integrated with any EHR/ EMRsolutions such as EPIC Cerner and Meditech thus not impacting the way hospitals runtoday while enabling Patients to have direct access to his/ her own medical records - ontheir mobile phones and tables. This not only ensures transparency but also enable thepatients share the necessary medical records information with other Providers foreffective continuation or validation of care.
Integrating with Payers (Insurance companies) would extend Digital Experience ofthe patients so the Exchange becomes a primary point of interaction as it would be able toaddress Insurance related capabilities such as Viewing EOBs (Explanation of Benefits)Managing Claims Paying Copays/Deductibles and so on. Having those capabilities on top ofPublic Cloud means not only an effective PaaS (Platform as a Service) solution but alsomakes it possible to provide Big Data Analytics and Artificial Intelligence which will bevery valuable for Pharma and Medical research.
Foreign Exchange Earnings and Outgo (' in Lakhs)
|Particulars ||2017-18 |
|Earnings ||4953.57 |
|Outflow ||2121.49 |
Disclosure as required under Section 22 of Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013
Your Company is committed to provide a work environment that ensures every womenemployee is treated with dignity and respect. The Company has setup an Internal ComplaintsCommittee (ICC). ICC has representation of men and women and is chaired by women employeeand has an external women representation. The Company is also committed to promoteequality at work and an environment that is conducive to the professional growth for allemployees and encourages equal opportunity. Your Company does not tolerate any form ofsexual harassment and is committed to take all necessary steps to ensure that itsemployees are not subjected to any form of harassment including sexual harassment.
The Company has in place a Prevention of Sexual Harassment (POSH) policy in line withthe requirements of the Sexual Harassment of Women at Workplace (Prevention Prohibitionand Redressal) Act 2013.
APPOINTMENT OF DIRECTORS
Mr. Suresh Venkatachari Managing Director retires by rotation at the forthcoming AGMand being eligible offers himself for reappointment. The resolution seeking approval ofthe members for the re-appointment of Mr. Suresh Venkatachari has been incorporated inthe Notice of the AGM of the company.
Mr. R.S.Ramani Whole-Time Director retires by rotation at the forthcoming AGM andbeing eligible offers himself for reappointment. The resolution seeking approval of themembers for the re-appointment of Mr.R.S.Ramani has been incorporated in the Notice ofthe AGM of the company.
Mr. Vivek Prakash was appointed as an Additional Director (Independent Category) witheffect from 17th July 2018 for a period of 5 years subject to approval ofmembers at the forthcoming AGM.
During the year under review Mrs. Sujatha Chandrasekaran (who was appointed asadditional Director by the Board on 8th February 2017 and such appointment wassubsequently regularized by the shareholders at the AGM held on 30th September2017) resigned from the Board with effect from 17th July 2018. The Board wishesto place on record its appreciation for the valuable contributions made by her during hertenure as Director.
PARTICULARS OF EMPLOYEES
Information as required under the section 197 of the Companies Act 2013 read with Rule5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014attached as Annexure A to the Directors' Report.
CORPORATE GOVERNANCE REPORT
Pursuant to Regulation 34 (3) and Schedule V of SEBI (LODR) Regulations 2015 theCorporate Governance Report forms an integral part of this Report.
A detailed report on Corporate Governance is available as a separate section in thisAnnual Report as Annexure B to this report.
A Certificate from the Practising Company Secretary regarding compliance with therequirements of Corporate Governance attached as Annexure C to this report asstipulated in SEBI (LODR) Regulations 2015.
The Chief Executive Officer & Managing Director/Chief Financial Officer (CEO/CFO)certification as required under the SEBI Listing Regulations is attached as Annexure E tothis report.
The Members of your company at the 32nd AGM of your company held on 30thSeptember 2017 appointed M/s Deloitte Haskins & Sells LLP Chartered Accountants asStatutory Auditors of your company to hold office till conclusion of AGM in the year 2022.
The requirement of ratification of appointment of Statutory Auditors in every AnnualGeneral Meeting has been omitted under the Companies (Amendment) Act 2017 which iseffective from 7th May 2018. Accordingly the Board has decided not to placethe ratification before the Members of the Company at the 33rd Annual GeneralMeeting.
|Observation ||Response |
|1 According to the information and explanations given to us and based on our audit a material weaknesses was identified in the Company's internal financial controls over financial reporting as at 31st March 2018 with regard to the adequacy and operating effectiveness of the management's oversight and review of the financial information and the book closing procedures at the subsidiaries which could result in a material misstatement in the consolidated financial statements of the Company. ||This being the first year of adoption of Indian Accounting Standards (IND AS) the financials had to be converted/translated effective 1st April 2016 and hence the delay in reporting. However the Board has taken necessary steps and a process has been put in place to prepare the books of its subsidiaries under IND AS. |
Pursuant to provisions of section 204 of the Companies Act 2013 and The Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the company hasappointed M/s. Chandra & Associates Practising Company Secretaries to undertake theSecretarial Audit of the Company for the year ended 31st March 2018.
The Secretarial Audit report forms part of the Annual Report attached as Annexure H tothis report.
EXPLANATION TO OBSERVATION IN THE SECRETARIAL AUDIT REPORT
Reply to Observations in Secretarial Audit Report: -
|Particulars ||Response |
|1. The company has entered into Related Party Transactions in the ordinary course and at arms' length without taking prior approval of the Audit Committee under Clause 23 of the SEBI (Listing Obligations and Disclosure) Requirements (LODR) even though the transactions have been ratified at a later date. ||Going forward the company will take suitable steps to obtain prior approval . |
|2. The Company didn't file MGT-10 pursuant to sec.93 of the Companies Act 2013 (Section since deleted) when one of the promoter sold 2.24% of equity shares in Company in January 2018. ||The delay was due to inadvertence. The Company has taken sufficient precautions not to repeat such instances in the future. |
|3. The Company had granted loans / made investments to its subsidiary after taking approval of the board of directors as required u/s.179 of the Companies Act 2013 but the filing of the resolution pursuant to sec.117 of the Companies Act 2013 has not been complied with. The company is in the process of making an application for the condonation of delay and for filing the aforesaid form with ROC. ||The company is in the process of making an application for the condonation of delay and for filing the aforesaid form with ROC and such delay was due to inadvertence. |
|4. It is seen from the copies of the Inter Depository Delivery Instructions (Form 15 of the Depositories' business Rules) by one of the promoters that he has transferred 1650000 equity shares of the Company before 31-03-2018 to his own account maintained with another depository but the said shares are not reflected either in the Promoters' category or Public category in the name of the said promoter as per the Benpos dated 06-04-2018. The said transfer perhaps is reflected as 'disposal' in the system based disclosures of insider trading by the BSE Limited. The shareholding pattern filed by the Company to the stock exchanges doesn't reflect the aforesaid transaction ||The promoter is in the process of taking up the same with the concerned for necessary corrective measures. |
EXTRACT OF ANNUAL RETURN
Pursuant to Section 92(3) of Companies Act 2013 an extract of Annual Return in formMGT 9 as on 31st March 2018 is attached as Annexure I to this report.
RELATED PARTY TRANSACTIONS All related party transactions that were entered intoduring the financial year were on arm's length basis and were in the ordinary course ofthe business and are in compliance of the provisions of the Companies Act 2013 and theListing Regulations. There are no material related party transactions made by the companywith Promoters Key Managerial Personnel or other designated persons which may havepotential conflict with the interest of the company at large.
The details of the transactions with related parties are provided in the financialstatements. Policy on Related Party transactions are available in the website.
The details of the related party transactions as required under the Companies Act 2013and rules made thereunder are attached in Form AOC-2 as Annexure G.
CORPORATE SOCIAL RESPONSIBILITY INITIATIVES
The Provisions of section 135 of the Companies Act 2013 are not applicable to theCompany. However CSR activities are already embodied in the value system of the Company.
CODE OF BUSINESS CONDUCT AND ETHICS
The Board of Directors has approved a Code of Conduct and Ethics in terms of ScheduleIV of Companies Act 2013 and Listing Agreement. All the Board Members and the SeniorManagement personnel have confirmed compliance with the Code for the year ended 31stMarch 2018. The annual report contains a declaration to this effect signed by the ManagingDirector.
VIGIL MECHANISM / WHISTLE BLOWER POLICY
In accordance with section 177(9) and (10) of the Companies Act 2013 and Regulation 22of SEBI (LODR) Regulations 2015 the company has established a Vigil Mechanism and has aWhistle Blower Policy. The policy provides a mechanism for all employees to report to themanagement grievances about the unethical behaviour or any suspected fraud. The policy isavailable at the website of the company.
DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS ORTRIBUNALS.
There are no significant material orders passed by the regulators or courts ortribunals which would impact the going concern status of the Company.
EVALUATION OF BOARD'S PERFORMANCE
The board has carried out an evaluation of its own performance and that of itsdirectors individually. The manner in which the evaluation has been carried out isexplained in the Corporate Governance Report. Detailed Note on the composition of theBoard and its committees are provided in the Corporate Governance Report.
REPORTING OF FRAUD
During the year under review neither the statutory auditors nor the secretarialauditors has reported any instances of fraud committed against the Company by its officersor employees as specified under Section 143(12) of Companies Act 2013.
DIRECTORS' RESPONSIBILITY STATEMENT
In terms of Section 134 (5) of the Companies Act 2013 the directors would like tostate that:
- In the preparation of the annual accounts the applicable accounting standards have been followed.
- The directors have selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit or loss of the Company for the year under review.
- The directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.
- The directors have prepared the annual accounts on a going concern basis.
- The directors had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively. vi) The directors had devised proper system to ensure compliance with the provisions of all applicable laws and that such system were adequate and operating effectively.
ACKNOWLEDGMENT AND APPRECIATION
The Directors take this opportunity to thank the Shareholders Financial InstitutionsBanks Customers Suppliers and Regulatory & Governmental Authorities for theircontinued support to the Company. Further the Directors appreciate and value thecontributions made by Employees at all levels.
The Directors' Report & Management Discussion and Analysis contains forward-lookingstatements which may be identified by the use of words in that direction or connoting thesame. All statements that address expectations or projections about the future includingbut not limited to statements about your Company's strategy for growth productdevelopment market positions expenditures and financial results are forward lookingstatements.
Your Company's actual results performance & achievements could thus differmaterially from those projected in such forward-looking statements. The Company assumes noresponsibility to publicly amend modify or revise any forward-looking statements on thebasis of any subsequent development information or events.
| ||For and On behalf of the Board |
| ||8K Miles Software Services Limited |
| ||Sd/- |
|Place: Chennai ||Suresh Venkatachari |
|Date: 7th September 2018 ||Managing Director & CEO |