Your Directors have great pleasure in presenting the report of the Business andOperations of your Company ('the Company' or 'AIL') along with the audited financialstatements for the financial year ended March 31 2020. The Consolidated Performance ofyour Company and its subsidiaries has been referred to wherever required.
Results of our operations and state of affairs.
|Particulars || |
|2019-2020 ||2018-2019 ||2019-2020 ||2018-2019 |
|Total Income ||816.08 ||1589.29 ||816.08 ||1459.29 |
|Profit before Financial Cost Depreciation Taxation and Exceptional items ||71.27 ||-36.82 ||71.27 ||-62.32 |
|Less: || || || || |
|Financial Cost ||19.69 ||17.71 ||19.69 ||17.71 |
|Depreciation and Amortization Expenses ||33.04 ||54.48 ||33.04 ||54.48 |
|Profit/(Loss) before tax & Exceptional Items ||18.54 ||-109.01 ||18.54 ||-134.51 |
|Less: || || || || |
|Exceptional items/Extra Ordinary Items ||3140.42 ||0 ||1453.00 ||0 |
|Profit/(Loss) before tax ||-3121.88 ||-109.01 ||-1434.46 ||-134.51 |
|Less: Tax expenses ||-2.51 ||0 ||-2.51 ||0 |
|Profit before Minority Interest ||-3119.38 ||-102.84 ||-1431.95 ||-128.34 |
|Less: Minority Interest ||0 ||0 ||0 ||0 |
|Profit/(Loss) after tax ||-3119.38 ||-102.84 ||-1431.95 ||-128.34 |
Your Directors have not recommended any dividend for this financial year 2019-2020.
Review of Operations
During the year under review your Company achieved consolidated revenue of Rs. 816.08Lakhs as against revenue of Rs. 1589.29 Lakhs in the previous fiscal. Consolidated EBITDAof Rs. 71.27 Lakhs as against Rs. -36.82 Lakhs of previous year and incurred a Net loss ofRs.3121.88 Lakhs as against Net loss of Rs. 102.84 Lakhs in the previous fiscal.
At standalone level your Company recorded revenue of Rs 816.08 Lakhs against a revenueof Rs.1459.29 Lakhs in the previous year EBITDA of Rs. 71.27 Lakhs as against Rs. -62.32Lakhs of previous year and loss of Rs. 1431.95 Lakhs as against losses of Rs. 128.34Lakhs in the previous year.
Consolidated Financial Statements (CFS)
The Consolidated Financial Statements of your Company for the financial year 2019-2020are prepared in compliance with applicable provisions of the Companies Act 2013 read withthe Rules issued thereunder applicable Accounting Standards and the provisions of SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 (hereinafter referredto as the "Listing Regulations"). The consolidated financial statements havebeen prepared on the basis of audited financial statements of your Company itssubsidiaries as approved by the respective Board of Directors.
The CFS should therefore be read in conjunction with the directors' report financialnotes cash flow statements and the individual auditor reports of the subsidiaries.
Pursuant to provisions of section 129(3) of the Companies Act 2013 a statementcontaining salient features of the financial statements of the Company's subsidiaries isattached to the financial statements of the Company.
Abridged Annual Accounts
Pursuant to the provisions of the first proviso to Section 136(1) of the Act and Rule10 of Companies (Accounts) Rules 2014 the abridged annual accounts are being sent to allshareholders whose e-mail id's are not registered with the Company. The full annual reportis available on the website of your Company at www.adroitinfotech.com and available forinspection at the registered office of the Company during working hours. Any memberinterested in obtaining the full annual report may write to the Company Secretary and thesame will be furnished on request
The Company has 2 subsidiaries as on March 31 2020. There are no associate or jointventure companies within the meaning of Section 2(6) of the Companies Act 2013("Act"). There has been no material change in the nature of the business of thesubsidiaries.
Further pursuant to the provisions of Section 136 of the Act the financial statementsof the Company consolidated financial statements along with relevant documents andseparate audited financial statements in respect of subsidiaries are available on thewebsite of the Company https://www.adroitinfotech.com/investor-relations.
Directors' Responsibility Statement
Pursuant to the requirement under section 134(5) of the Companies Act 2013 withrespect to the Directors' Responsibility Statement relating to the Company (Standalone)it is hereby confirmed:
1. That in the preparation of the Accounts for the financial year ended March 31 2020the applicable accounting standards and schedule III of the Companies Act 2013 (includingany statutory modification(s) or re-enactment(s) for the time being in force) have beenfollowed and there is no material departure;
2. That the Directors have selected such accounting policies and applied themconsistently and made judgments and estimates that were reasonable and prudent so as togive a true and fair view of the state of affairs of the Company as at March 31 2020 andof the profit and loss of the Company for the financial year ended March 31 2020;
3. That proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 (includingany statutory modification(s) or re-enactment(s) for the time being in force) forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;
4. That the accounts have been prepared on 'going concern' basis for the financialyear ended March 31 2020;
5. That the Company they have laid down internal financial controls to be followed bythe Company and such internal financial controls are adequate and operating effectively;;
6. The directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and such systems are adequate and operating effectively.
Based on the framework of internal financial controls and compliance systemsestablished and maintained by the Company the work performed by the internal statutoryand secretarial auditors and external consultants including the audit of internalfinancial controls over financial reporting by the statutory auditors and the reviewsperformed by management and the relevant board committees including the audit committeethe Board is of the opinion that the Company's internal financial controls were adequateand effective during FY 2020.
Directors and Key Managerial Personnel (KMP)
Pursuant to the provisions of Section 149 of the Act the independent directors havesubmitted declarations that each of them meet the criteria of independence as provided inSection 149(6) of the Act along with Rules framed thereunder and Regulation 16(1)(b) ofthe SEBI Listing Regulations. There has been no change in the circumstances affectingtheir status as independent directors of the Company.
During the year under review the non-executive directors of the Company had nopecuniary relationship or transactions with the Company other than sitting feescommission if any and reimbursement of expenses incurred by them for the purpose ofattending meetings of the Board / Committee of the Company.
Pursuant to the provisions of Section 203 of the Act the Key Managerial Personnel ofthe Company as on March 31 2020 are:
Mr. Sudhakiran Reddy Sunkerneni Managing Director Mr. Venkateswara Rao Narepalem ChiefFinancial Officer Ms. Shradha Somani Company Secretary and Compliance Officer.
Meetings of the Board and Committees
Six (6) Meetings of the Board of Directors were held during the year. For furtherdetails on the meetings and the attendance of directors/members please refer report onCorporate Governance of this Annual Report.
Detailed composition of the mandatory Board committees namely Audit CommitteeNomination and Remuneration Committee Stakeholders Relationship Committee number ofmeetings held during the year under review and other related details are set out in theCorporate Governance Report which forms a part of this Report.
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Pursuant to the provisions of the Companies Act 2013 and the Securities and ExchangeBoard of India (Listing Obligation and Disclosure Requirements) Regulations 2015 theBoard of Directors has carried out an annual performance evaluation of their own thedirectors individually as well as the evaluation of the working of its Audit Nomination& Remuneration and other Committees. The manner in which the evaluation has beencarried out has been explained hereunder.
A structured questionnaire was prepared after taking into consideration inputs receivedfrom the Directors covering various aspects of the Board ' s functioning such as adequacyof the composition of the Board and its Committees Board culture execution andperformance of specific duties obligations and governance.
The above criteria are broadly based on the Guidance Note on Board Evaluation issued bythe Securities and Exchange Board of India on January 5 2017.
In a separate meeting of independent directors performance of non-independentdirectors the Board as a whole and the Chairman of the Company was evaluated taking intoaccount the views of executive directors and non-executive directors.
The Board and the Nomination and Remuneration Committee reviewed the performance ofindividual directors on the basis of criteria such as the contribution of the individualdirector to the board and committee meetings like preparedness on the issues to bediscussed meaningful and constructive contribution and inputs in meetings etc. At theboard meeting that followed the meeting of the independent directors and meeting ofNomination and Remuneration Committee the performance of the Board its Committees andindividual directors was also discussed. Performance evaluation of Independent Directorswas done by the entire Board excluding the independent director being evaluated.
Particulars of Employees and related disclosures
The information required under Section 197 of the Act read with Rule 5(1) of Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014
The remuneration paid to your Directors is in accordance with the Nomination andRemuneration Policy formulated in accordance with Section 178 of the Companies Act 2013and Regulation 19 of the Securities and Exchange Board of India (Listing Obligations andDisclosure Requirement) Regulations 2015 (including any statutory modification(s) orre-enactment(s) for the time being in force). The salient aspects covered in theNomination and Remuneration Policy has been outlined in the Corporate Governance Reportwhich forms part of this report.
The ratio of the remuneration of each Director to the median remuneration of theemployees of the Company for the financial year 2019-2020 and percentage increase inremuneration of each Director Chief Financial Officer and Company Secretary during thefinancial year 2019-2020 are as under:
The median remuneration is Rs. 600000 P.A. and the percentage increase in the medianremuneration of employees in the financial year is Nil%.
The number of permanent employees on the rolls of company as on March 31 2020: 90
It is hereby affirmed that the remuneration paid is as per the Remuneration Policy ofthe Company.
The statement containing particulars of employees as required under Section 197(12) ofthe Act read with Rule 5(2) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 is provided as below:
Details of Employee/s throughout the financial year was in receipt of remuneration forthat year which in the aggregate was not less than 10200000: NIL
Details of for a part of the financial year was in receipt of remuneration for anypart of that year at a rate which in the aggregate was not less than Rs. 850000 permonth: NIL
Average percentile increase already made in the salaries of employees other than themanagerial 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 annual increase was 6 percent in India. However during the course of theyear the total increase is approximately 7.7 percent after accounting for promotions andother event based compensation revisions. The increase in remuneration is in line with themarket trends in the respective countries.
Affirmation that the remuneration is as per the remuneration policy of the Company:
The Company affirms that the remuneration is as per the remuneration policy of theCompany.
Your Directors have on the recommendation of the Nomination & RemunerationCommittee framed a policy for selection and appointment of Directors Senior ManagementPersonnel and their remuneration. The Remuneration Policy forms part of the CorporateGovernance Report.
Particulars of Loans Guarantees and Investments
Details of Loans Guarantees and Investments covered under the provisions of Section186 of the Companies Act 2013 read with the Companies (Meetings of Board and its Powers)Rules 2014forms part of the Financial Statements.
Pursuant to the provisions of section 177(9) & (10) of the Companies Act 2013 andRegulation 22 of Securities and Exchange Board of India (Listing Obligations andDisclosure Requirement) Regulations 2015 a Vigil Mechanism for directors and employeesto report genuine concerns about any instance of any irregularity unethical practiceand/or misconduct has been established. Further the details as aforesaid are available onthe website of your company at www.adroitinfotech.com.
Familiarisation Programme for Independent Directors
Pursuant to Securities and Exchange Board of India (Listing Obligations and DisclosureRequirement) Regulations 2015 the Company shall familiarise the Independent Directorswith the Company their roles rights responsibilities in the Company nature of theindustry in which the Company operates business model of the Company etc. throughvarious programmes.
Accordingly your Company arranged a technical session on 30.05.2019 to familiarize theIndependent Directors the details of which are disclosed on the website of the company athttp://adroitinfotech.com/policies.html
Development and Implementation of Risk Management Policy
The Board of Directors of the Company has formed a Risk Management Committee to frameimplement and monitor the risk management plan for the Company. The Committee isresponsible for monitoring and reviewing the risk management plan and ensuring itseffectiveness. The Audit Committee has additional oversight in the area of financial risksand controls. The major risks identified by the businesses and functions aresystematically addressed through mitigating actions on a continuing basis. The developmentand implementation of risk management policy has been covered in the Management Discussionand Analysis which forms part of this report.
Internal financial control systems and their adequacy
Your Company has established and maintained a framework of internal financial controlsand compliance systems. Based on the same and the work performed by the internal auditorsstatutory auditors and external agencies and the reviews performed by Top Management teamand the Audit Committee your Directors are of the opinion that your Company's InternalFinancial Controls were adequate and effective during the financial year 2019-2020.
Further the statutory auditors of your company has also issued an attestation report oninternal control over financial reporting (as defined in section 143 of Companies Act2013) for the financial year ended March 31 2020 which forms part to the StatutoryAuditors Report.
Transactions with related parties
None of the transactions with related parties fall under the scope of Section 188(1) ofthe Act. The information on transactions with related parties pursuant to Section134(3)(h) of the Act read with Rule 8(2) of the Companies (Accounts) Rules 2014 are givenis Annexured in Form No. AOC-2 and the same forms part of this report.
Auditors: Statutory Auditors
At the twenty-ninth AGM held on September 30 2019 the Members approved appointment ofM/s. Niranjan & Narayan Chartered Accountants (Firm Registration No. 005899S) asStatutory Auditors of the Company to hold office for a period of five years from theconclusion of that AGM till the conclusion of the thirty-forth AGM subject toratification of their appointment by Members at every AGM if so required under the Act.The requirement to place the matter relating to appointment of auditors for ratificationby Members at every AGM has been done away by the Companies (Amendment) Act 2017 witheffect from May 7 2018. Accordingly no resolution is being proposed for ratification ofappointment of statutory at the ensuing AGM and a note in respect of same has beenincluded in the Notice for this AGM.
Pursuant to the provisions of Section 204 of the Companies Act 2013 and The Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 your Company hasappointed Ms. Charu Golash- Practising Company Secretaries to undertake the SecretarialAudit of your Company. The Report of the Secretarial Audit is annexed as Annexure - A.
Further Practising Company Secretaries/Chartered Accountants carries outReconciliation of Share Capital Audit every quarter and the report thereon is submitted tothe Stock Exchanges.
As per SEBI Listing Regulations the Corporate Governance Report with the Auditors'Certificate thereon and the integrated Management Discussion and Analysis including theBusiness Responsibility Report are attached which forms part of this report.
The Company has devised proper systems to ensure compliance with the provisions of allapplicable Secretarial Standards issued by the Institute of Company Secretaries of Indiaand that such systems are adequate and operating effectively.
Deposits from public
The Company has not accepted any deposits from public and as such no amount on accountof principal or interest on deposits from public was outstanding as on the date of thebalance sheet.
Extract of Annual Return
The details forming part of the extract of the Annual Return in Form MGT-9 inaccordance with Section 92(3) of the Companies Act 2013 read with Companies (Managementand Administration) Rules 2014 is annexed as Annexure - B.
Conservation of energy technology absorption foreign exchange earnings and outgo
a) Conservation of Energy:
The Company is in the business of development of Information Technology and does notrequire large quantities of energy. However wherever possible energy saving efforts aremade.
b) Technology Absorption:
We firmly believe that technology is the genesis of innovative business practiceswhich in turn enable the organization to carry out business effectively and efficiently.Even though the Information Technology industry is technology intensive we believe thatthere is an increasing need to mechanize the processes involved in order to minimize costsand increase efficiency. We intend to make investments in innovative techniques for thisregard.
c) Foreign Exchange earnings and outgo:
The particulars of earning and expenditure in foreign exchange during the year aregiven as additional information in note no. 35 in Notes on Financial Statements.
|S.No ||Foreign exchange earnings and outgo ||FY. 2020 ||FY. 2019 || |
|a ||Foreign exchange earnings ||436.06 ||11.94 || |
|b ||CIF Value of imports ||0 ||0 || |
|c ||Expenditure in foreign currency ||2.42 ||0 || |
| || || || || |
Your Company is committed to maintain the high standards of corporate governance andadhere to the corporate governance requirements set out by Securities and Exchange Boardof India. The Report on corporate governance as stipulated under Securities and ExchangeBoard of India (Listing Obligations and Disclosure Requirement) Regulations 2015 formspart of the Annual Report and is annexed as Annexure - C. The requisite certificatefrom the Practicing Company Secretary confirming compliance with the conditions ofcorporate governance as stipulated under the aforesaid Regulations is part of this report.
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Management Discussion and Analysis (MD&A)
MD & A Report for the financial year under review as stipulated under Regulation34 of Securities and Exchange Board of India (Listing Obligations and DisclosureRequirement) Regulations 2015 is presented in a separate section forming part of theAnnual Report.
Your Directors state that no disclosure or reporting is required in respect of thefollowing items as there were no transactions on these items during the financial yearunder review:
1. Issue of equity shares with differential rights as to dividend voting or otherwise.
2. Issue of shares (including sweat equity shares) to employees of your Company underany scheme save and except ESOS referred to in this Report.
3. No significant or material orders were passed by the Regulators or Courts orTribunals which impact the going concern status and Company's operations in future.
4. During the year under review there were no cases filed pursuant to the SexualHarassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013.
5. During the year under review your company has not declared any dividend neither hastransferred any amount to reserves.
6. Non-applicability of Corporate Social Responsibility under Section 135 of theCompanies Act 2013.
7. There were no qualifications mentioned by the Auditors in their report.
8. The policies as framed by the company is available on the web link as providedhereunder: http://www.adroitinfotech.com/policies-our-company.html
The Directors thank the Company's employees customers vendors investors BanksFinancial Institutions and other business partners for their continuous support. TheDirectors also thank the Government of India Governments of various states in India andconcerned Government departments and agencies for their co-operation extended by them toyour company. The Directors regret the loss of life due to COVID-19 pandemic and aredeeply grateful and have immense respect for every person who risked their life and safetyto fight this pandemic. The Directors appreciate and value the contribution made by everymember of the Adroit family.
| ||On behalf of the Board of Directors |
| ||Sd./- |
|Place: Hyderabad ||Sudhakiran Reddy Sunkerneni |
|Date: 25.07.2020 ||Managing Director |
| ||DIN:001436242 |