The Directors of your Company hereby present the Thirty Forth (34th) AnnualReport alongwith the Audited Financial Statements (Consolidated and Standalone) of theCompany for the Financial Year ("FY") ended March 31 2020.
The summary of the Company's financial performance both on a consolidated andstandalone basis for the FY 2019-2020 ("FY20") as compared to the previous FY2018-2019 ("FY19") is given below:
(Rs in Crore)
|Particulars || |
| ||Year ended March 31 2020 ||Year ended March 31 2019 ||Year ended March 31 2020 ||Year ended March 31 2019 |
|Revenue from Operations ||309.35 ||306.85 ||4993.92 ||1852.74 |
|Other Income ||6.26 ||6.25 ||31.55 ||6.39 |
|Total Income ||315.61 ||313.10 ||5025.47 ||1859.13 |
|Profit/(Loss) before finance cost depreciation exceptional items and tax ||24.33 ||14.67 ||401.49 ||52.96 |
|Less: Interest and finance charges (Net) ||18.50 ||17.05 ||129.38 ||44.54 |
|Less : Depreciation ||7.46 ||2.01 ||98.96 ||14.65 |
|Profit/(Loss) before tax & exceptional items ||(1.63) ||(4.39) ||173.15 ||(6.23) |
|Add/(Less): Exceptional item ||- ||5.67 ||(125.05) ||(73.12) |
|Profit/(Loss) before tax ||(1.63) ||1.28 ||48.10 ||(79.35) |
|(Add)/Less : Tax ||- ||- ||6.98 ||(0.58) |
|Profit/(Loss) after tax ||(1.63) ||1.28 ||41.12 ||(78.77) |
|Add/(Less): Other Comprehensive Income ||(0.51) ||0.83 ||(99.48) ||2.14 |
|Total Comprehensive Income for the year ||(2.14) ||2.11 ||(58.36) ||(76.63) |
|Earnings/(Loss) Per Share of Rs 10/- each after exceptional items: || || || || |
|Basic: (in Rs) ||(0.55) ||0.44 ||13.83 ||(26.97) |
|Diluted: (in Rs) ||(0.55) ||0.44 ||13.68 ||(26.97) |
The Company for the year ended March 31 2020 recorded a gross turnover of Rs4993.92 Crores for FY20 as against Rs 1852.74 Crores recorded in FY19 on consolidatedbasis reflecting an increase of 2.7x over previous year. This increase was mainlyattributed to the full year impact related to acquisition of Black Box Corporation and itsdirect/indirect subsidiaries (collectively referred to as "Black Box entities")which were acquired in January 2019. On standalone basis the gross turnover was Rs 309.35Crores as against Rs 306.85 Crores for the period ended March 31 2019 reflecting aminimal increase of 0.81% over previous year. The muted performance on standalone basiswas due to various reasons including slowing down in economy and adverse market conditioncoupled with COVID-19 condition during March-2020 quarter. On Consolidated basis theCompany has recorded a Net Profit of Rs 41.12 Crores for FY20 as compared to a net loss ofRs 78.77 Crores for FY19. This increase in net profits is primarily due to costtransformation initiatives such as improvement in operational efficiencies ratio-centricorganisation and optimization of overheads including leased facilities. The Companycontinues its focus on all the financial metrics together with better liquidity managementand profitability growth initiatives.
The Company recorded a Net loss (before exceptional items) of Rs 1.63 Crores for FY20as against Net loss (before exceptional item) of Rs 4.39 Crores for FY19 on standalonebasis. The Company has recorded Other Comprehensive Income (OCI) of negative Rs 99.48Crores for FY20 as against OCI of Rs 2.14 Crores for FY19 on consolidated basis. Thenegative OCI recorded for FY20 is mainly attributed to remeasurement losses on definedpension plan of BBX Inc. and its subsidiaries in USA for the year ended March 31 2020amounting to Rs 82.15 Crores.
The unprecedented situation of COVID-19 has impact on economy and way of doing businessgenerally in all the geographies the Company operates. The Company responded to thesituation swiftly to maintain its business operations with the support of its customersvendors and employees apart from other stakeholders. The Company activated businesscontinuity plans focusing primarily on employee safety mitigation of operational andfinancial impact and sustaining normal operations. Various initiatives were undertaken bythe Company related to awareness of all stakeholders including tools for work-for-home(WFH) guidance on masks and other personal protective equipment as per requirement fromcustomer and local jurisdiction guidelines. The Company hasn't seen significant ormaterial impact of COVID-19 on its operations and financial results for the year endedMarch 31 2020. The Company continues to monitor opening of various countries as perrespective guidelines and relevant changes in evolving economic situation across thegeographies it operates in.
Pursuant to Regulation 30(3) of SEBI (Listing Obligations and Disclosure Requirements)Regulations ("LODR Regulations") upon application of materiality and SEBICircular dated May 20 2020; on June 30 2020 the Company submitted a disclosurecontaining detailed information on the impact of COVID-19 on its operations to the StockExchanges as per the format prescribed in the said SEBI Circular. The disclosure isaccessible on the website of the Company athttps://www.agcnetworks.com/in/wp-content/uploads/2016/10/OutcomeofBM-1.pdf
NATURE OF BUSINESS AND STATE OF AFFAIRS OF THE COMPANY
During the year under review there have been no changes in the nature of business ofthe Company. The information on the affairs of the Company has been covered under theManagement Discussion & Analysis forming part of this Report.
MATERIAL CHANGES AND COMMITMENTS
There were no material changes and commitments affecting the financial position of theCompany which occurred between the end of the financial year to which these financialstatements relate and the date of this Report.
At the beginning of FY20 the Authorised Share Capital of the Company was Rs1450000000/- (Rupees One Hundred and Forty Five Crores Only) divided into 45000000(Four Crore Fifty Lakh) equity shares of Rs 10/- (Rupees Ten only) each 5000000 (FiftyLakh) Cumulative/Non-Cumulative Redeemable Preference Shares and 5000000 (Fifty Lakh)Convertible Preference Shares of Rs 100/- (Rupees Hundred only) each or any otherdenomination as may be approved by the Board which has remained unchanged during the yearunder review. The paid-up capital of the Company at the beginning of the FY20 consisted ofpaid-up equity capital of Rs 297376490/- (Rupees Twenty Nine Crore Seventy Three LakhSeventy Six Thousand Four Hundred and Ninety only) divided into 29737649 equity sharesof Rs 10/- each.
On February 14 2020 the Company issued & allotted 7000 Equity Shares of Rs 10/-(Rupees Ten only) each to an employee pursuant to exercise of Employee Stock Options("ESOP options") duly vested upon him in accordance with the applicable termsof "AGC Networks Employee Stock Option Scheme 2015" ("ESOP Scheme").Accordingly as on March 31 2020 the Paid-up Equity Share Capital of the Companyincreased by Rs 70000/- to Rs 297446490/- (Rupees Twenty Nine Crore SeventyFour Lakh Forty Six Thousand Four Hundred and Ninety only) divided into 29744649 EquityShares of Rs 10/- (Rupees Ten only) each. The Company has not made any issue of SweatEquity Shares or Equity Shares with Differential Voting Rights during the year underreview.
With a view to conserve resources for future growth your Directors have notrecommended any dividend for the financial year ended March 31 2020.
TRANSFER TO RESERVE
With a view to facilitate the growth of the Company's business over the coming yearsthe Board of Directors have recommended that the entire profits generated in the currentfinancial year 2019-2020 should be transferred to the reserves of the Company.
HR priorities for an engaging employee experience
FY20 has been a year of integration and transformation of AGC Black Box. This increasedthe Company's reach across the global market with our geographic footprint over LatinAmerica Europe and many countries in Asia Pacific. The Company's focus continued to be inacquiring talent providing an engaged workplace and enhance overall employee experience.
At AGC Black Box we believe that our employees are our greatest asset. They enable usto achieve our vision by accelerating growth for our customers. Hence investing inupskilling individuals with the latest technology skills has been one of the prioritiesfor the Company.
i) Talent Acquisition & Employer Branding:
The Talent Acquisition priorities have been on Workforce Planning in newtechnologies and skills in arena of Trend Micro Avaya AV Voice Digital ApplicationsCyber-security etc. The Company equally prioritizes the candidate experience of these newincumbents to stay competitive in the market. The Talent Acquisition team uses the socialmedia platform for posting jobs and creating positive stories around the brand andgathering insights around emotional intelligence of employees their passions and theirmotivations. These platforms have enabled best fit hires and cost saving for the Company.Company culture and values are not only a priority but continues to be a core part of ouremployer brand and our recruiting strategy. The Company makes every effort to makeprogress towards it being an equal opportunity employer and promoting diversity andinclusivity through Talent Acquisition.
ii) Talent Development:
The Company believes that all our employees should have continuous access toopportunities which help them learn and grow. Over the last year our learning offeringshave been more accessible to our employees anywhere and at any time through the LearningManagement System (LMS). Our employees participated in learning programs in either ofthe modes classroom or virtual signifying the reach of learning that has been enabled fortheir capability growth. Additionally to enable and continue partnerships with core andstrategic OEMs (Original Equipment Manufacturers) special importance has been assignedtowards Key OEM certifications.
iii) Talent Engagement: Employee Communication plays a major role in cascadingbusiness information amongst internal stakeholders. There are multitudinous internalcommunication channels at AGC which help AGC leadership team to stay connected withemployees at all times and keep them meaningfully engaged.
Diverse calendarized Employee Engagement programs have been also undertakenthroughout the year. As a responsible corporate entity the Company has relentlesslystrived towards adding value to the society through diverse community initiatives withinits sphere of operations. The Company's community initiatives have been driven by adefined philosophy to reach out to the society at large and help people attain and sustaina valued quality life. The health and well-being of our employees has always been of primeimportance to us and hence through various awareness programs on health and fitness andparticipation in marathons we encouraged this attitude in our employees. Moreover throughour Global Reward & Recognition framework designed to recognize exceptionaltalents and outstanding business performances employees are recognized for theirachievements on diverse criterions spread across functions & geos. The CEOPerformance+ Awards are conferred on distinguished employees to acknowledge theirexemplary performances exceeding business expectations and setting new performancebenchmarks.
The organizations empowering culture philosophy of capability development andprogressive HR practices has supported creation of a strong employer brand for theCompany.
MANAGEMENT'S DISCUSSION AND ANALYSIS
Management's Discussion and Analysis for the year under review in terms of theprovisions of Regulation 34 of the SEBI (Listing Obligation and Disclosure Requirements)Regulations 2015 ("LODR Regulation") is set out as a separate section formingan integral part of this Annual Report.
INTERNAL FINANCIAL CONTROLS
The Company has in place adequate internal financial controls for ensuring orderly andefficient conduct of its business including adherence to company's policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation of reliablefinancial information with reference to financial statements.
During the year under review these internal controls have been subject to audit. Fordetails with regard to reportable material weaknesses in the said controls if any pleaserefer the Statutory Auditors' Report forming part of this Annual Report.
The Company has not accepted any fixed deposits including from the public and as suchno amount of principal or interest was outstanding as on the date of the Balance Sheet.
During the year under review the following changes took place in Subsidiaries andHolding Company of the Company:
During the year Essar Telecom Limited ("ETL") Promoter of the Companyexecuted an off-market purchase of 197912 equity shares of the Company therebyincreasing its shareholding to 14082055 equity shares constituting a 47.35% stake inthe total paid-up share capital of the Company. During the year Onir Metallics Limited("OML") a Promotor Group entity entered into an inter-se share transfer withOnir Information Technology Limited ("OITL") another Promotor Group entitypursuant to which OML acquired the entire shareholding of OITL. Further OML also executedan off-market purchase of 1240694 equity shares of the Company. Consequently as on March31 2020 the shareholding of OML had increased to 6472897 equity shares constituting a21.76% stake in the total paid-up share capital of the Company whereas OITL ceased to bethe shareholder of the Company. Thus as on March 31 2020 ETL and OML collectively hold20554952 equity shares of the Company constituting a 69.10% Promoter shareholding inthe Company. Essar Global Fund Limited remains the ultimate Holding Company of theCompany.
Black Box Holdings Limited Step-Down Subsidiary ("SDS") of the Companyincorporated Black Box Network Services Hong Kong Limited.
a. IOT Division of Stesalit Systems Limited ("Undertaking") based in India:Black Box Network Services India Private Limited SDS of the Company acquired the IOTDivision of Stesalit Systems Limited ("Stesalit") situated in India togetherwith all employees assets and liabilities thereof (hereinafter referred to as"Undertaking") as a going concern on slump sale basis by executing a BusinessTransfer Agreement with Stesalit Systems Limited. The estimated enterprise value of theUndertaking was Rs 20.40 Crores and the total purchase consideration for the saidacquisition transaction aggregated to Rs 15.31 Lakhs approx. The said acquisition waseffective from February 1 2020.
b. Fujisoft Technology LLC (Dubai) Fujisoft Security Solutions LLC (Dubai) and FujiSoft Technology LLC (Abu Dhabi): Black Box Holdings Limited SDS of the Companyacquired all shares of Fujisoft Technology LLC and Fujisoft Security Solutions LLCsituated in Dubai & Fuji Soft Technology LLC situated in Abu Dhabi (collectivelyreferred to as "Fujisoft entities") by executing a Share Sale Agreement withMr. Abizer Leelwalla Sajjad Hussain and Mr. Albert Raj Naricitti Peter on May 31 2020.The aggregate consideration for said acquisition was AED 9866353 (UAE Dirhams NineMillion Eight Hundred Sixty Six Thousand Three Hundred and Fifty Three Only). Theacquisition of Fujisoft Technology LLC and Fujisoft Security Solutions LLC situated inDubai was completed with effective date as July 1 2020. Further the acquisition of FujiSoft Technology LLC situated in Abu Dhabi is anticipated to be completed by end ofDecember 2020 upon receipt of approval of relevant MEA authorities. The management hadundertaken said acquisition of Fujisoft entities with the object of establishing thepresence of Black Box in Middle East region as well as to add Datacentre portfolio andcapabilities and offer wider range of services to the customers.
c. Pyrios Pty Limited (Australia) and Pyrios Limited (New Zealand) (collectively"Pyrios entities"): Black Box Networks Services Australia Pty Ltd SDS ofthe Company acquired 100% stake in Pyrios Pty Limited situated in Australia byexecuting a Share Sale Agreement with Agile Group Limited on June 10 2020. The aggregateconsideration for said acquisition was US$ 800000/- (US Dollars Eight Hundred ThousandOnly). The said acquisition was completed with effective date as July 1 2020. FurtherBlack Box Networks Services New Zealand Ltd SDS of the Company acquired 100% stake inPyrios Limited situated in Auckland New Zealand by executing a Share Sale Agreementwith Agile Group Limited on June 10 2020. The aggregate consideration for saidacquisition was USD 1950000/- (US Dollars One Million Nine Hundred and Fifty ThousandOnly). The said acquisition was completed with effective date as July 1 2020.
The management had undertaken said acquisition of Pyrios entities with the object ofcreating efficiency of scale in Australia & New Zealand markets as well as to addCloud Services portfolio. Further this enabled widening the range of services offering toexisting customers of Pyrios and Black Box entities alongwith adding to the managementcapabilities.
As on March 31 2020 the following are the subsidiaries/step-down subsidiaries of theCompany:
|Sr. ||Name of the Entity ||Registration ||Nature of Relationship |
|No. || ||Geos || |
|1. ||AGC Networks Pte. Ltd ||Singapore ||Subsidiary Company |
|2. ||AGC Networks Australia Pty. Ltd ||Australia ||Subsidiary Company |
|3. ||AGC Networks Inc. (now known as AGC Networks LLC) ||US ||Step-Down Subsidiary Company |
|4. ||AGC Networks Philippines Inc. ||Philippines ||Step-Down Subsidiary Company |
|5. ||AGC Networks & Cyber Solutions Limited ||Kenya ||Step-Down Subsidiary Company |
|6. ||AGC Networks LLC Dubai ||Dubai ||Step-Down Subsidiary Company |
|7. ||AGC Networks LLC Abu Dhabi ||Abu Dhabi ||Step-Down Subsidiary Company |
|8. ||AGC Networks New Zealand Limited ||New Zealand ||Step-Down Subsidiary Company |
|9. ||AGCN Solutions Pte. Ltd ||Australia ||Step-Down Subsidiary Company |
|10. ||BBX Main Inc. ||US ||Step-Down Subsidiary Company |
|11. ||BBX Inc. ||US ||Step-Down Subsidiary Company |
|12. ||Black Box Corporation ||US ||Step-Down Subsidiary Company |
|13. ||ACS Communications Inc. ||US ||Step-Down Subsidiary Company |
|14. ||ACS Dataline LP ||US ||Step-Down Subsidiary Company |
|15. ||ACS Investors LLC ||US ||Step-Down Subsidiary Company |
|16. ||BB Technologies Inc. ||US ||Step-Down Subsidiary Company |
|17. ||BBOX Holdings Mexico LLC ||US ||Step-Down Subsidiary Company |
|18. ||BBOX Holdings Puebla LLC ||US ||Step-Down Subsidiary Company |
|19. ||Black Box Corporation of Pennsylvania ||US ||Step-Down Subsidiary Company |
|20. ||Black Box Network Services Inc. Government Solutions ||US ||Step-Down Subsidiary Company |
|21. ||Black Box Services Company ||US ||Step-Down Subsidiary Company |
|22. ||CBS Technologies Corp. ||US ||Step-Down Subsidiary Company |
|23. ||Delaney Telecom Inc. ||US ||Step-Down Subsidiary Company |
|24. ||Norstan Communications Inc. ||US ||Step-Down Subsidiary Company |
|25. ||Nu-Vision Technologies LLC ||US ||Step-Down Subsidiary Company |
|26. ||Black Box Network Services Australia Pty Ltd ||Australia ||Step-Down Subsidiary Company |
|27. ||Black Box GmbH ||Austria ||Step-Down Subsidiary Company |
|28. ||Black Box Network Services NV ||Belgium ||Step-Down Subsidiary Company |
|29. ||Black Box do Brasil Industria e Comercio Ltda. ||Brazil ||Step-Down Subsidiary Company |
|30. ||Black Box Canada Corporation ||Canada ||Step-Down Subsidiary Company |
|31. ||Norstan Canada Ltd./Norstan Canada Lte ||Canada ||Step-Down Subsidiary Company |
|32. ||Black Box Holdings Ltd. ||Cayman Islands ||Step-Down Subsidiary Company |
|Sr. No. ||Name of the Entity ||Registration Geos ||Nature of Relationship |
|33. ||Black Box Chile S.A. ||Chile ||Step-Down Subsidiary Company |
|34. ||Black Box E-Commerce (Shanghai) Co. Ltd. ||China ||Step-Down Subsidiary Company |
|35. ||Black Box A/S ||Denmark ||Step-Down Subsidiary Company |
|36. ||Black Box Network Services (UK) Limited ||England ||Step-Down Subsidiary Company |
|37. ||Black Box Finland OY ||Finland ||Step-Down Subsidiary Company |
|38. ||Black Box France ||France ||Step-Down Subsidiary Company |
|39. ||Black Box Deutschland GmbH ||Germany ||Step-Down Subsidiary Company |
|40. ||Black Box Network Services India Private Limited ||India ||Step-Down Subsidiary Company |
|41. ||Black Box Network Services (Dublin) Limited ||Ireland ||Step-Down Subsidiary Company |
|42. ||Black Box Software Development Services Limited ||Ireland ||Step-Down Subsidiary Company |
|43. ||Black Box Network Services S.r.l. ||Italy ||Step-Down Subsidiary Company |
|44. ||Black Box Network Services Co. Ltd. ||Japan ||Step-Down Subsidiary Company |
|45. ||Black Box Network Services Korea Limited ||Korea ||Step-Down Subsidiary Company |
|46. ||Black Box Network Services SDN. BHD. ||Malaysia ||Step-Down Subsidiary Company |
|47. ||Black Box de Mexico S. de R.L. de C.V. ||Mexico ||Step-Down Subsidiary Company |
|48. ||Black Box International B.V. ||Netherlands ||Step-Down Subsidiary Company |
|49. ||Black Box International Holdings B.V. ||Netherlands ||Step-Down Subsidiary Company |
|50. ||Black Box Network Services New Zealand Limited ||New Zealand ||Step-Down Subsidiary Company |
|51. ||Black Box Norge AS ||Norway ||Step-Down Subsidiary Company |
|52. ||Black Box P.R. Corp. ||Puerto Rico ||Step-Down Subsidiary Company |
|53. ||Black Box Network Services Singapore Pte Ltd ||Singapore ||Step-Down Subsidiary Company |
|54. ||Black Box Comunicaciones S.A. ||Spain ||Step-Down Subsidiary Company |
|55. ||Black Box Network Services AB ||Sweden ||Step-Down Subsidiary Company |
|56. ||Black Box Network Services AG ||Switzerland ||Step-Down Subsidiary Company |
|57. ||Black Box Network Services Corporation ||Taiwan ||Step-Down Subsidiary Company |
|58. ||Black Box Network Services Hong Kong Limited ||Hong Kong ||Step-Down Subsidiary Company |
|59. ||Servicios Black Box S.A. de C.V. ||Mexico ||Step-Down Subsidiary Company |
|60. ||COPC Holdings Inc. ||US ||Step-Down Subsidiary Company |
|61. ||COPC Inc. ||US ||Step-Down Subsidiary Company |
|62. ||COPC International Inc. ||US ||Step-Down Subsidiary Company |
|63. ||RevealCX LLC ||US ||Step-Down Subsidiary Company |
|64. ||COPC Asia Pacific Inc. ||US ||Step-Down Subsidiary Company |
|65. ||COPC International Holdings LLC. ||US ||Step-Down Subsidiary Company |
|66. ||COPC India Private Limited ||India ||Step-Down Subsidiary Company |
|67. ||COPC Consultants (Beijing) Co. Limited ||China ||Step-Down Subsidiary Company |
PARTICULARS OF LOANS GIVEN INVESTMENTS MADE GUARANTEES GIVEN AND SECURITIES PROVIDED
The particulars of loan(s) given investment(s) made guarantee(s) given and/orsecurities provided by the Company along with the purpose for which such amount of loanguarantee or security is proposed to be utilized by the recipient has been provided inthe notes to financial statements.
STATUTORY AUDITORS AND THEIR REPORT
M/s. Walker Chandiok & Co LLP Chartered Accountants (ICAI Registration No.001076N/N00013) have been reappointed as the Statutory Auditors of the Company videresolution passed by Shareholders at the 33rd Annual General Meeting (AGM) ofthe Company and hold this office for a period of Five (5) year commencing from conclusionof the 33rd AGM till the conclusion of 38th AGM of the Company.
Statutory Auditors' Report
The Statutory Auditors' Report on the financial statements of the Company (standalone& consolidated) for the financial year ended March 31 2020 has been annexed to thefinancial statements contained in this Annual Report. The Statutory Auditors haveexpressed their qualifications/reservations /emphasis of matter on the standalone &consolidated financial statements of the Company in the said report.
The qualifications relate to previous years and has no relevance w.r.t dealings of theCompany in the FY 2019-2020 and emphasis of matter deals with COVID related impact.Further the said reservation/emphasis of matter/qualifications alongwith the management'sresponse on the same is given below:
A. Standalone Audit Report:
(i) Auditor's qualification on annual audited financial results (Standalone)
"As stated in point no. 3 of the Auditors' report on Standalone FinancialStatement of the Company during the previous year ended 31 March 2019 the Company hadrecorded only the differential amount of` 1.11 Crores as profit on sale of propertyplant and equipment being the difference between the sale consideration of a certainproperty re-assigned to a new buyer and the outstanding receivable from an earlier saletransaction was incorrectly recorded without the transfer of risks and rewards ofownership of such property in the year ended 31 March 2015.
Had the Company followed the principles of Ind AS 16 Property Plant and Equipment andcorrected the aforementioned errors relating to incorrect recognition of sale in earlieryear of the said property in accordance with Ind AS 8 Accounting Policies Changes inAccounting Estimates and Errors exceptional item (income) representing gain on sale ofproperty plant and equipment for the year ended 31 March 2019 would have been higher by`22.79 Crores (quarter ended 31 March 2019: Nil) while depreciation expense for theyear ended 31 March 2019 would have been higher by` 0.02 Crores (quarter ended 31March 2019: Nil).
Our reports on the standalone financial results for the quarter ended 31 December 2019and year ended 31 March 2019 were also qualified in respect of the above matter andaccordingly our opinion on the accompanying standalone financial results for the yearended 31 March 2020 is also qualified with respect to the effects of this matter on thecomparability of current and corresponding figures in the accompanying standalonefinancial statements."
Management's views on the above:
During the year ended 31 March 2015 the Company entered into deed of assignment totransfer all the rights title and obligations of its land and building situated atGandhinagar to another company for a consideration of Rs 44.63 Crores.
During April 2015 the lender to whom these assets were provided as security providedits in-principle approval for the said transfer subject to fulfilment of conditions statedtherein. The said transfer was pending approval from the relevant government authority andtransfer of legal title that were considered to be procedural in nature. Accordingly theCompany had recognised profit on sale of property plant and equipment of Rs 40.85 Crores(net of incidental expenses Rs 3.04 Crores) during the year ended 31 March 2015.
During the year ended 31 March 2019 the said property was re-assigned in the name ofthe Company by the buyer since the buyer expressed its inability to get the aforementionedsale deed registered with the relevant government authority. Subsequently the saidproperty had been transferred to another buyer through a separate sale transaction for aconsideration of Rs 23.51 Crores and the Company had recorded the differential amount ofRs 1.11 Crores between the said consideration and balance receivable as at re-assignmentdate from the earlier recognised sale as profit on sale of property plant and equipment.The amount of consideration already received amounting to Rs 22.23 Crores as atre-assignment date from the erstwhile buyer is not required to be refunded by the Company.The entire transaction stands completed.
(ii) Emphasis of Matters Impact of COVID 19 and compliances with laws andregulations
"As stated in point no. 5 of the Auditors' report on Standalone FinancialStatement of the Company with respect to delay in repatriation of proceeds of export ofgoods and services and delay in remittance for import payments aggregating to` 1.37Crores and Rs 4.33 Crores respectively as on 31 March 2020 beyond the timelinesstipulated under the Foreign Exchange Management Act 1999 and regulations thereunder.The management of the Company is in the process of filing and in some cases has filednecessary applications seeking extension of time / approval for write off of foreigncurrency payables and condonation of delays with appropriate authorities for regularisingthese defaults subsequent to 31 March 2020. Pending conclusion on these mattersmanagement is of the view that the possible fines / penalties which may be levied arecurrently unascertainable but are not expected to be material and accordingly theaccompanying standalone financial statements do not include any consequential adjustmentsthat may be required due to such delay / default." "As stated in point no. 6 ofthe Auditors' report on Standalone Financial Statement of the Company which describes theimpact of COVID-19 pandemic on the Company's operations. In view of the uncertainties inthe economic environment due to the outbreak of COVID-19 pandemic the impact on theoperations of the Company is significantly dependent on the future developments as theyevolve."
Management's views on the above:
Response to point no. 5 of the Auditors' report on Standalone Financial Statement ofthe Company
The outstanding balance of trade receivables and trade payables as appearing instandalone balance sheet as at 31 March 2020 include amount receivable aggregating to Rs1.37 Crores and amount payable aggregating to Rs 4.33 Crores respectively from / to thecompanies situated outside India. These balances are pending for settlement and haveresulted in delay in collection / remittance beyond the timeline stipulated under theForeign Exchange Management Act 1999. The Company has filed the necessary applicationswith the appropriate authority for extension of time period / condonation of such delayssubsequent to 31 March 2020. Pending conclusion of the aforesaid matter the amount ofpenalty if any that may be levied is not ascertainable and accordingly theaccompanying standalone financial statements do not include any adjustments that may arisedue to such delay / default.
Out of the above-mentioned receivables the Company has filed application with ADCategory - I bank ("AD Bank") during the year for extension of time limit for anamount aggregating to Rs 0.44 Crores. However approval is pending from AD Bank as at 31March 2020. Also Company has remitted foreign payment aggregating to Rs 1.79 Crorestowards imports subsequent to 31 March 2020.
Response to point no. 6 of the Auditors' report on Standalone Financial Statement ofthe Company
The spread of COVID-19 a pandemic caused by the novel Coronavirus is having anunprecedented impact on global economy and way of doing business. The Company hasresponded to the situation swiftly and maintained business operations with the support oftheir customers vendors employees and other stakeholders through the crisis. There hasbeen no significantly adverse impact on the operations and results for the year ended 31March 2020. The Company has considered the possible effects that may result from thepandemic relating to COVID-19 on the carrying amounts of trade receivables inventoriestangible assets intangible assets investments and other financial assets and continuesto monitor changes in future economic conditions. In developing the assumptions relatingto the possible future uncertainties in the economic conditions because of this pandemicthe Company as at the date of approval of these standalone financial results has usedinternal and external sources of information and based on current estimates expects thatthe carrying amount of these assets will be recovered. The eventual outcome of the impactof the pandemic may be different from those estimated as on the date of approval of thesestandalone financial statement.
B. Consolidated Audit report
(i) Auditor's qualification on annual audited financial results (consolidation)
"As stated in Note 3 of the Auditors' report to the Consolidated FinancialStatements during the previous year ended 31 March 2019 the Holding Company had recordedonly the differential amount of` 1.11 Crores as profit on sale of property plant andequipment being the difference between the sale consideration of a certain propertyre-assigned to a new buyer and the outstanding receivable from an earlier sale transactionincorrectly recorded without the transfer of risks and rewards of ownership of suchproperty in the year ended 31 March 2015. Had the Holding Company followed the principlesof Ind AS 16 Property Plant and Equipment and corrected the aforementioned errorsrelating to incorrect recognition of sale in earlier year of the said property inaccordance with Ind AS 8 Accounting Policies Changes in Accounting Estimates and Errorsexceptional item (income) representing gain on sale of property plant and equipment forthe year ended 31 March 2019 would have been higher by` 22.79 Crores (quarter ended 31March 2019: Nil) while depreciation expense for the year ended 31 March 2019 would havebeen higher by` 0.02 Crores (quarter ended 31 March 2019: Nil).
Our reports on the consolidated financial results for the quarter ended 31 December2019 and year ended 31 March 2019 were also qualified in respect of the above matter andaccordingly our opinion on the accompanying consolidated financial results for the yearended 31 March 2020 is also qualified with respect to the effects of this matter on thecomparability of current and corresponding figures in the accompanying consolidatedfinancial statement
Management's views on the above:
During the year ended 31 March 2015 the Holding Company entered into deed ofassignment to transfer all the rights title and obligations of its land and buildingsituated at Gandhinagar to another company for a consideration of Rs 44.63 Crores. DuringApril 2015 the lender to whom these assets were provided as security provided itsin-principle approval for the said transfer subject to fulfilment of conditions statedtherein. The said transfer was pending approval from the relevant government authority andtransfer of legal title that were considered to be procedural in nature. Accordingly theHolding Company had recognised profit on sale of property plant and equipment of Rs 40.85Crores (net of incidental expenses Rs 3.04 Crores) during the year ended 31 March 2015.During the year ended 31 March 2019 the said property was re-assigned in the name of theHolding Company by the buyer since the buyer expressed its inability to get theaforementioned sale deed registered with the relevant government authority. Subsequentlythe said property had been transferred to another buyer through a separate saletransaction for a consideration of Rs 23.51 Crores and the Holding Company had recordedthe differential amount of Rs 1.11 Crores between the said consideration and balancereceivable as at re-assignment date from the earlier recognised sale as profit on sale ofproperty plant and equipment. The amount of consideration already received amounting toRs 22.23 Crores as at re-assignment date from the erstwhile buyer is not required to berefunded by the Holding Company. The entire transaction stands completed.
(ii) Emphasis of Matters Impact of COVID 19
"As stated in point no. 5 of the Auditors' report on Consolidated FinancialStatement of the Company which describes the impact of COVID-19 pandemic on the Group'soperations. In view of the uncertainties in the economic environment due to the outbreakof COVID-19 pandemic the impact on the operations of the Group is significantly dependenton the future developments as they evolve."
Management's views on the above:
The spread of COVID-19 a pandemic caused by the novel Coronavirus is having anunprecedented impact on global economy and way of doing business. The Group has respondedto the situation swiftly and maintained business operations with the support of theircustomers vendors employees and other stakeholders through the crisis. There has been nosignificantly adverse impact on the operations and results for the year ended 31 March2020. The Group has considered the possible effects that may result from the pandemicrelating to COVID-19 on the carrying amounts of trade receivables inventories tangibleassets intangible assets investments and other financial assets and continues to monitorchanges in future economic conditions. In developing the assumptions relating to thepossible future uncertainties in the economic conditions because of this pandemic theGroup as at the date of approval of these consolidated financial results has usedinternal and external sources of information and based on current estimates expects thatthe carrying amount of these assets will be recovered. The eventual outcome of the impactof the pandemic may be different from those estimated as on the date of approval of theseconsolidated financial statement.
SECRETARIAL AUDITORS AND THEIR REPORT
Pursuant to Section 204(1) of the Act and Rule 9 of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 the Secretarial Audit of the Companywas carried out by Dr. S. K. Jain Practicing Company Secretary (FCS No. 1473) &Proprietor of M/s. S. K. Jain & Co. for the financial year 2019-2020. The Reportgiven by the Secretarial Auditor is annexed as Annexure - I and forms an integral part ofthis Board's Report. There is no qualification reservation or adverse remark ordisclaimer in their Report.
REPORTING OF FRAUDS BY THE AUDITORS
During the year under review neither the Statutory Auditor nor the Secretarial Auditorhas reported to the Audit Committee pursuant to the provisions of Section 143(12) of theAct any fraud committed against the Company by its employees or officers.
COST RECORDS AND COST AUDIT
The maintenance of cost records and requirement of cost audit as prescribed under theprovisions of Section 148(1) of the Act are not applicable for the business andactivities carried out by the Company.
The Company is committed to maintain the highest standards of corporate governance andadhere to the corporate governance requirements set out by SEBI. The Company has alsoimplemented several benchmark corporate governance practices as prevalent globally. TheCorporate Governance Report as stipulated under the SEBI LODR Regulations forms anintegral part of this Annual Report. Further in accordance with the applicable provisionsof Schedule V of the said Regulations a compliance certificate issued by M/s. S. K. Jain& Co. LLP Practicing Company Secretaries (ICSI Certificate of Practice No. 3076)confirming that the Company has complied with the conditions of corporate governance isannexed herewith and marked as Annexure II.
NUMBER OF BOARD MEETINGS
During the FY 2019-2020 Seven (7) Board meetings were held. Further detail on the sameis available in the Corporate Governance Report which forms part of this Annual Report.
EMPLOYEES STOCK OPTION SCHEME
Pursuant to the shareholders' approval dated April 21 2015 the Nomination andRemuneration Committee of the Board of Directors of the Company granted stock options asper the terms of "AGC Networks Employee Stock Option Scheme 2015" ("ESOPScheme") (approved by the shareholders at their meeting held on April 21 2015) tothe employees and executive directors of the Company as well as its subsidiaries. Thefollowing table shows detailed information with regards to the same:
|Total options granting eligibility of the Company (A) ||1423323 |
|Total options granted as on 31.3.2019 (B) ||1495913 |
|Total options lapsed as on 31.3.2019 (C) ||869651 |
|Options available for grant as on 31.3.2019 (D) = (A-B+C) ||797061 |
|Options granted during the FY 2019-2020 (E) ||0 |
|Options lapsed during the FY 2019-2020 (F) ||0 |
|Options available for grant as on 31.3.2020 (G) = (D-E+F) ||797061 |
During the year under review the Company issued & allotted 7000 Equity Shares ofRs 10/- (Rupees Ten only) each to an employee on February 14 2020 pursuant to exerciseof Employee Stock Options ("ESOP options") duly vested upon him in accordancewith the applicable terms of ESOP Scheme.
The details pursuant to the SEBI ESOP Regulations have been placed on the website ofthe Company and web link of the same ishttps://www.agcnetworks.com/in/wp-content/uploads/2016/10/Disclosure-on-ESOP-Scheme-2015-as-on-31.03.2020.pdf
TRANSFER OF UNPAID AND UNCLAIMED DIVIDEND/SHARES TO IEPF
The dividends which remained unpaid/unclaimed for a period of more than sevenconsecutive years have been transferred on due dates by the Company to the InvestorEducation and Protection Fund ("IEPF") established by the Central Government.
Pursuant to the applicable provisions of Section 124 of the Act and the applicableprovisions of the Investor Education and Protection Fund Authority (Accounting AuditTransfer and Refund) Rules 2016 ("the Rules") the Company is required totransfer all amounts of dividend that has remained unpaid or unclaimed for a period ofseven years from its unpaid dividend account to the IEPF Fund. Further according to theapplicable provisions of the said section read with the rules made thereunder the Companyis also required to transfer the corresponding shares with respect to the dividend whichhas not been paid or claimed for seven consecutive years or more to the demat account ofthe IEPF Authority.
Accordingly the Company has transferred unpaid/unclaimed dividends alongwith thecorresponding shares to IEPF Fund within the time limits prescribed under the said sectionand rules. The details of the shares already transferred have been uploaded on the websiteof the Company and can be accessed at http://www.agcnetworks.com/in/investors/#iepf. Inaccordance with the applicable provisions of the LODR Regulations it is disclosed thatthere were no shares lying in the demat suspense account/unclaimed suspense account of theCompany at the beginning of FY 2019-2020 during FY 2019-2020 as well as at the at the endof the FY 2019-2020.
FAMILIARIZATION PROGRAMME FOR INDEPENDENT DIRECTORS
All Directors of the Company including the Independent Directors are provided withnecessary documents/brochures reports and internal policies to facilitate theirfamiliarization with the procedures and practices followed by the Company. Furtherperiodic presentations are made at the meetings of the Board of Directors and its variousCommittee on business and performance updates of the Company global businessenvironment business strategy and risks involved. Quarterly updates new amendmentscirculars and notifications issued by the regulatory authorities including ROC RBI andSEBI which mandates further compliances for the Company are regularly circulated to theDirectors.
Further at the time of appointment of any Independent Director the Company issues aformal letter of appointment outlining his/her role function duties and responsibilitiesalongwith Code of Conduct to be adhered by the Directors.
The Vigil Mechanism of the Company in terms of the LODR Regulations has beenestablished through the Whistle Blower Policy/Policy on Vigil Mechanism of the Company.Protected disclosures can be made by a Whistle Blower through an e-mail or a letter to theChief Ethics Officer or to the Chairman of the Audit Committee. The Policy on VigilMechanism/Whistle Blower Policy may be accessed on the Company's website at the https://www.agcnetworks.com/in/wp-content/uploads/2016/10/Whistle-Blower-Policy.pdf
In terms of the requirement of the Companies Act 2013 and LODR Regulations annualperformance evaluation of the Board the Chairman of the Board Independent andNon-Independent Directors and various Committees of the Board for the Financial Year2019-2020 was undertaken.
The evaluation was carried out through a Digital Platform on questionnaire based ratingassessment mechanism where the evaluators were requested to give rating for each criteriaset for evaluating the performance of the Director or the Committee of which theperformance was being evaluated. The board evaluation process was focused around how tomake the Board more effective as a collective body in the context of the business and theexternal environment in which the Company functions. From time to time during the yearthe Board was appraised of the business issues and the related opportunities and risks.The Board discussed various aspects of the functioning of the Board and its Committeessuch as structure composition meetings functions and interaction with management.
Additionally during the evaluation process the Board also focused on the contributionbeing made by the Board as a whole as well as through Committees. The overall assessmentof the Board was that it was functioning as a cohesive body including the Committees ofthe Board that were functioning effectively.
EXTRACT OF ANNUAL RETURN
In terms of Section 134(3)(a) of the Act the extract of Annual Return of the Companyin the prescribed Form No. MGT-9 for the Financial Year 2019-2020 has been placed on thewebsite of the Company and can be accessed at https://www.agcnetworks.com/in/wp-content/uploads/2016/10/Annual-Return-FY2019-2020.pdf
DIRECTORS AND KEY MANAGERIAL PERSONNEL ("KMP")
Section 152 of the Act provides that unless the Articles of Association provide for theretirement of all directors at every AGM not less than two-third of the total number ofdirectors of a public company (excluding the independent directors) shall be persons whoseperiod of office is liable to determination by retirement of directors by rotation.Accordingly Mr. Sanjeev Shekhar Verma Whole-time Director of the Company shall retire byrotation at the ensuing AGM and being eligible has offered himself for re-appointment.
During the year following changes took place in the Board of Directors and KeyManagerial Personnel ("KMP") of the Company:
|Name ||Event ||Designation ||Date of Event |
|Mr. Deepak Kumar Bansal ||Appointment ||Executive Director ||August 14 2019 |
As on March 31 2020 the Company had the following KMPs:
Mr. Sanjeev Verma Whole-Time Director
Mrs. Mahua Mukherjee Executive Director
Mr. Deepak Kumar Bansal Chief Financial Officer & Executive Director
Mr. Aditya Goswami Company Secretary & Compliance Officer
Post-closure of the year under review the Board of Directors of the Company at itsmeeting held on September 10 2020 has approved the appointment of Ms. Neha Nagpal (DIN:08842400) as an Independent Additional Director and Mr. Anshuman Ruia (DIN: 00008501) as aNon-Executive Additional Director of the Company. In accordance with the provisions ofSection 161 of the Act both Additional Directors are eligible to hold respective officesonly upto the date of the ensuing 34th AGM of the Company. Consequently theBoard at its meeting held on October 19 2020 on the basis of recommendation of theNomination and Remuneration Committee approved the re-appointment of Ms. Neha Nagpal asan Independent Director of the Company for a period of 5 (Five) consecutive yearscommencing from September 10 2020 and re-appointment of Mr. Anshuman Ruia asNon-Executive Director of the Company subject to the approval of the Members at theensuing AGM.
The Company has received declarations from all the Independent Directors on its Boardconfirming that he/she meets all the criteria of independence laid down under Section149(6) of the Act and Regulation 16(1)(b) of LODR Regulations and that he/ she is notaware of any circumstance/situation which exists or may be reasonably anticipated thatcould impair/impact his/ her ability to discharge the duties of an Independent Directorwith objective independent judgment and without any external influence. These declarationsand confirmations of the Independent Directors were noted by the Board of Directors afterdue assessment. Consequently the Board is of the opinion that all Independent Directorsof the Company fulfill the criteria of independence specified under the Act & LODRRegulations and are independent from the management of the Company.
Further in the opinion of the Board of Directors all Independent Directors of theCompany hold highest standards of integrity and possess requisite expertise &experience enabling them to fulfil their duties as Independent Directors.
For detailed composition of Board of Directors and various Committees kindly refer theCorporate Governance Report forming part of the Annual Report.
The Nomination and Remuneration Committee of the Company has devised a policy forperformance evaluation of Directors Board and Senior Management which includes thecriterias for performance evaluation as well as the remuneration policy for the DirectorsSenior Management and Employee of the Company.These policies are annexed to this report asAnnexure III and IV respectively and are also accessible on the Company's website at thelink https://www.agcnetworks.com/in/wp-content/uploads/2016/10/Code-of-Conduct-Directors-Senior-Management.pdfand https://www.agcnetworks.com/in/wp-content/uploads/2016/10/Remuneration-Policy.pdfrespectively.
COMMITTEES OF THE BOARD
The details relating to various Committees constituted by the Board of Directors of theCompany are mentioned in the Corporate Governance Report' which forms a part of theAnnual Report.
CODE OF CONDUCT FOR DIRECTORS & SENIOR MANAGEMENT
Pursuant to the provisions of Regulation 17(5) of the LODR Regulations a Code ofConduct for the Directors & Senior Management of the Company has been formulated &approved by the Board of Directors. Further in accordance with the provisions ofRegulation 26(3) all Directors & members of Senior Management of the Company haveaffirmed compliance with the said Code of Conduct during the Financial Year 2019-2020.
The said Code of Conduct is accessible on the Company's website at the linkhttps://www.agcnetworks.com/in/wp-content/uploads/2016/10/Code-of-Conduct-Directors-Senior-Management.pdfFurther pursuant to the provisions of Regulation 34(3) of the LODR Regulations readwithSchedule V Part D Mr. Sanjeev Verma Whole-Time Director has issued a declarationstating that all the Directors and members of Senior Management of the Company havecomplied with the Code of Conduct of the Company during the FY 2019-2020. The saiddeclaration has been disclosed in the Corporate Governance Report forming part of theAnnual Report.
The Board places on record its appreciation for the hard work and dedicated efforts putin by all the employees. The relations between the management and employees continue toremain cordial on all fronts.
The statement of particulars of appointment and remuneration of managerial personneland employees of the Company as required under Section 197(12) of the Act read with Rule 5of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 isannexed to this Report as Annexure V.
Having regard to the provisions of the second proviso to Section 136(1) of the Act andas advised the Annual Report excluding the aforesaid information is being sent to themembers of the Company. The said information is available for inspection at the registeredoffice of the Company during working hours and any member interested in obtaining suchinformation may write to the Company Secretary and the same will be furnished on request.
POLICY ON PREVENTION OF GENDER HARASSMENT AT WORKPLACE AND INTERNAL COMPLAINTSCOMMITTEE ("ICC")
The Company has in place a policy for prevention prohibition and redressal of genderharassment at workplace. Appropriate reporting mechanisms are in place for ensuringprotection against gender harassment and the right to work with dignity. Further inaccordance with the applicable provisions of the Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013 the Company had constituted an InternalComplaints Committee ("ICC") to consider and resolve sexual harassmentcomplaints raised by the employees of the Company. The constitution of the ICC is inaccordance with the applicable provisions of the said Act.
During the year under review the details of complaints raised by the employees of theCompany are as follows:
|Particular ||No. of Complaints received during the FY 2019-2020 ||No. of Complaints disposed during the FY 2019-2020 ||No. of Complaints pending at the end of FY 2019-2020 |
|No. of Complaints ||Nil ||Nil ||Nil |
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS & OUTGO
(i) Part A pertaining to conservation of energy is not applicable to the Company.
(ii) Part B pertaining to particulars relating to technology absorption is as perAnnexure VI to this report.
(iii) Part C pertaining to foreign exchange earnings and outgoings is as mentionedbelow:
(` In Crores)
|Expenditure in foreign currency (accrual basis) ||FY2020 ||FY2019 |
|Service charges ||13.37 ||12.63 |
|Travelling and conveyance ||1.09 ||1.27 |
|Expenses reimbursement paid ||0.90 ||0.85 |
|Other items ||0.36 ||0.49 |
|Total ||15.72 ||15.24 |
| || ||(` In Crores) |
|Earnings in foreign currency (accrual basis) ||FY2020 ||FY2019 |
|Sale of goods and services || || |
|(Including sale from overseas branch and to Export Oriented Units) ||27.44 ||15.13 |
|Commission income ||0.75 ||0.74 |
|Expenses reimbursement received ||21.46 ||14.72 |
|Total ||49.65 ||30.59 |
CORPORATE SOCIAL RESPONSIBILITY (CSR)
The Corporate Social Responsibility Committee (CSR Committee) has formulated andrecommended to the Board a Corporate Social Responsibility Policy (CSR Policy) indicatingthe activities to be undertaken by the Company which has been approved by the Board. TheCSR Policy is accessible on the Company's website at the link https://www.agcnetworks.com/in/wp-content/uploads/2016/10/Corporate-Social-Responsibility-policy-Revised.pdfThe Report on CSR activities is annexed herewith marked as Annexure VII.
RISK MANAGEMENT POLICY
The Company has a comprehensive Risk Management Policy in place which clearly indicatesall the risks that the organization faces such as strategic financial credit marketliquidity security property IT legal regulatory reputational and other risks thathave been identified and assessed and there is an adequate risk management infrastructurein place capable of addressing those risks. In terms of Regulation 21 (5) of SEBI (LODR)Regulations 2015 the provisions of constituting Risk Management Committee were notapplicable to the Company during the FY2019-2020.
CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES
All contracts / arrangements / transactions entered by the Company during the financialyear with related parties were in the ordinary course of business and on arm's lengthbasis. During the year the Company had not entered into any contract / arrangement /transaction with related parties which could be considered material in accordance with theCompany's policy of on materiality of related party transactions. Most of these arepurchase/sales transactions and maintenance services transactions which are of theduration of 3 months to 12 months. Your Directors draw attention of the members to Noteno. 36 (Consolidated) and Note No. 33 (Standalone) to the financial statement which setsout related party disclosures.
The Policy on materiality of related party transactions and dealing with related partytransactions as approved by the Board may is accessible on the Company's website at thelink https://www.agcnetworks.com/in/wp-content/uploads/2020/05/Related-Party-Transaction-Policy-Revised.pdf
DIRECTORS' RESPONSIBILITY STATEMENT
Your Directors state that: a. in the preparation of the annual accounts for the yearended March 31 2020 the applicable accounting standards read with requirements set outunder Schedule III to the Act have been followed and there are no material departuresfrom the same; b. the Directors have selected such accounting policies and applied themconsistently and made judgements and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company as on March 31 2020 andof the profit/(loss) of the Company for the financial year ended on the said date; c. theDirectors have taken proper and sufficient care for the maintenance of adequate accountingrecords in accordance with the provisions of the Act for safeguarding the assets of theCompany and for preventing and detecting fraud and other irregularities; d. the Directorshave prepared the annual accounts on a going concern' basis; e. the Directors havelaid down internal financial controls to be followed by the Company and that such internalfinancial controls are adequate and are operating effectively; and f. the Directors havedevised proper systems to ensure compliance with the provisions of all applicable laws andthat such systems are adequate and operating effectively.
Based on the framework of internal financial controls and compliance systemsestablished and maintained by the Company; work performed by the internal statutory andsecretarial auditors and external consultants including audit of internal financialcontrols over financial reporting by the statutory auditors and the reviews performed bymanagement and the relevant board committees including the audit committee; the Board isof the opinion that the Company's internal financial controls were adequate and effectiveduring FY 2019-2020.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
There are no significant and material orders passed by the Regulators / Courts whichwould impact the going concern status of the Company and its future operations. Furtherno penalties have been levied by SEBI or any other Regulators during the year underreview.
The Board is thankful to the Shareholders Bankers and Customers of the Company fortheir continued support. It also takes this opportunity to express gratitude to itsvarious suppliers and its partners for their continued co-operation support andassistance. Above all the Board expresses its appreciation to each and every employee forhis / her contribution dedication and sense of commitment to the Company's objectives.
For and on behalf of the Board of Directors
|Sanjeev Shekhar Verma ||Mahua Mukherjee |
|Whole-Time Director ||Executive Director |
|DIN: 06871685 ||DIN: 08107320 |
|Texas USA ||Mumbai |
|October 19 2020 ||October 19 2020 |