Encore Software Ltd.
|BSE: 531750||Sector: IT|
|NSE: N.A.||ISIN Code: INE103B01012|
|BSE 00:00 | 04 Mar||Encore Software Ltd|
|NSE 05:30 | 01 Jan||Encore Software Ltd|
|BSE: 531750||Sector: IT|
|NSE: N.A.||ISIN Code: INE103B01012|
|BSE 00:00 | 04 Mar||Encore Software Ltd|
|NSE 05:30 | 01 Jan||Encore Software Ltd|
To the Members
The Directors have pleasure in presenting before you the 27th Annual Reportof the Company together with the Audited Financial Statements for the year ended 31stMarch 2019.
1. FINANCIAL SUMMARY/HIGHLIGHTS OPERATIONS STATE OF AFFARIS
Despite serious and strong efforts to diversify its line of business in order toimprove its prospects your Company was not successful in securing new orders during theyear under review. However some new prospects have emerged for licensing the Company'sIntellectual Property (IP) and progress has been made in this direction. Consequentlythe Company is hopeful of securing significant IP licensing business in the new financialyear. In addition our efforts to get orders for the SATHI as well as the Simputerand Wave information appliances will continue during the year to follow.Successful conversion of the prospects into firm orders should definitely help the Companyto revitalize itself.
The Company is in active discussions in order to realize the revenue potential for theabove activities which will help the Company to rebuild itself during the comingfinancial year while also generating significant revenues and operating profit. Furtherthe Company sees strong potential for revival of the SATHI manufacturing activity and hasstarted seeing renewed interest from Brazil in the Company's information appliances. Allof these should together help grow the Company's revenue and profit in the coming year.
REVOCATION OF SUSPENSION OF TRADING
Owing to circumstances beyond the control and owing to the financial difficulties theCompany has been passing through over the last few years trading in the Shares of yourCompany was suspended by the BSE Limited (BSE) last year. Your Company is continuously andactively interacting with BSE for correction of the lapses pointed out by them and ishopeful of having the suspension in trading revoked soon.
2. EVENTS SUBSEQUENT TO THE DATE OF FINANCIAL STATEMENTS
There were no material changes and commitments which occurred affecting the financialposition of the Company between 31st March 2019 and the date on which thisreport has been signed.
3. MATERIAL CHANGES AFFECTING THE FINANCIAL POSITION OF THE COMPANY
The Company did not carry out any commercial sales activities. However in line withthe applicable Regulations/Statutes revenue of the Subsidiaries was captured in theConsolidated Financial Statements of the Company.
4. CHANGE IN THE NATURE OF BUSINESS
The Company expects to license some of its IP as mentioned above to some prospectivenew customers thus broadening the nature of its business from manufacturing and sales ofproducts developed in-house and also extending it to software applications for specificchosen domains by developing such applications in-house and/or partnering withorganizations specializing in those activities/domains.
In view of the losses incurred your Directors express inability to recommend anydividend.
6. AMOUNTS TRANSFERRED TO RESERVES
In view of the losses the question of transferring any amount to Reserves does notarise.
7. CHANGES IN SHARE CAPITAL
There were no changes in the Capital Structure of the Company during the year underreport. Capital structure remained as follows:
The Authorised Share Capital of the Company was र 120000000/- (Rupees TwelveCrores only) and the Paid-up Share Capital of the Company was र 64715000/- (RupeesSix Crores Forty Seven Lakhs Fifteen Thousand only) as on 31st March 2019.
Disclosure regarding Issue of Equity Shares with Differential Rights
During the year under review the Company has not issued Shares with DifferentialRights.
Disclosure regarding issue of Employee Stock Options
During the year under review the Company has not issued Shares Employee Stock Options.
Disclosure regarding issue of Sweat Equity Shares
During the year under review the Company has not issued Sweat Equity Shares.
8. CAPITAL INVESTMENTS
There was no capital Investments during the year 2018-19.
9. BOARD MEETINGS
The Meetings of the Board are held at regular intervals with a time gap of not morethan 120 days between two consecutive Meetings. During the year under review 4 (Four)Meetings were held on 25th May 2018; 13th August 2018; 13thNovember 2018 and 14th February 2019.
The Agenda of the Meeting is circulated to the Directors in advance. Minutes of theMeetings of the Board of Directors are circulated amongst the Members of the Board fortheir perusal.
The details of other Committee Meetings during the financial year 2018-19 are given inthe Corporate Governance Report which forms part of this Report.
10. DIRECTORS AND KEY MANANGERIAL PERSONNEL
Mrs. Chhanda Deshpande Director (DIN 00225546) retires by rotation as per theCompanies Act 2013 and being eligible offers herself for re-appointment. There were nochanges in the composition of the Board during the financial year.
11. COMPOSITION OF AUDIT COMMITTEE
As on 31st March 2019 the Audit Committee of the Company consisted of two(2) Non-Executive Independent Directors and one (1) Executive Director and all of themhave financial and accounting knowledge.
The Board has accepted the recommendations of the Audit Committee during the year underreview.
The Audit Committee consists of the following:
12. NOMINATION AND REMUNERATION COMMITTEE POLICY
The Nomination and Remuneration Committee consists of the following:
The Company will take steps to induct new Independent Directors who will be appointedas the Independent Member of the Nomination and Remuneration Committee.
The Composition criteria for selection of Directors and the Terms of Reference of theNomination and Remuneration Committee is stated in the Corporate Governance Report.
13. VIGIL MECHANISM/WHISTLE BLOWER POLICY
The Company has a Whistle Blower Policy for vigil mechanism pursuant to the provisionsof Sections 177(9) and (10) of the Companies Act 2013 and as per Regulation 4(2) (d)(iv)of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 which isavailable on website of the Company at http://www.ncoretech.com and there were no casesreported during last year.
14. DIRECTORS' RESPONSIBILITY STATEMENT
In pursuance of Section 134(5) of the Companies Act 2013 the Directors hereby confirmthat:
a. in the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures;
b. the Directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company at the end of the financial year and ofthe profit and loss of the Company for that period;
c. the Directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;
d. the Directors had prepared the Financial Statements on a going concern basis;
e. the directors had laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively; and
f. the Directors had devised proper systems to ensure compliance with the provisions ofall applicable laws and that such systems were adequate and operating effectively to beprovided.
15. EXTRACT OF ANNUAL RETURN
As required pursuant to Section 92(3) of the Companies Act 2013 and Rule 12(1) of theCompanies (Management and Administration) Rules 2014 an extract of annual return in MGT9 as a part of this Annual Report is attached as Annexure I.
16. INFORMATION ABOUT THE FINANCIAL PERFORMANCE/FINANCIAL POSITION OF THESUBSIDIARIES/ASSOCIATES/JV
Financial performance of the Subsidiary/Associates referred to in Section 129 of theCompanies Act 2013 in Form AOC-1 is annexed to this Report as Annexure II.
Messrs B. Chandrashekhar & Co. Chartered Accountants (ICAI Firm Registration No.004848S) were appointed as Statutory Auditors of the Company in the Twenty Fifth AGM heldon 27th September 2017 for a period of 5 years upto the conclusion of the 30thAGM to be held in the year 2022.
Pursuant to the Companies (Amendment) Act 2017 and rules made there under with effectfrom 7th May 2018 the Central Government notified the omission of therequirement related to ratification of appointment of auditors by Members at every AnnualGeneral Meeting. Accordingly the resolution for ratification has not been placed beforethe Members.
QUALIFICATIONS IN THE AUDIT REPORT AND EXPLANATIONS BY THE BOARD
18. SECRETARIAL AUDITOR
Pursuant to the provisions of Section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hasappointed Mr. Vijayakrishna K T Company Secretary in Practice to undertake theSecretarial Audit of the Company. The Report of the Secretarial Auditor in the form ofMR-3 is annexed to this Report as Annexure III.
QUALIFICATIONS IN THE SECREATARIAL AUDIT REPORT AND EXPLANATIONS BY THE BOARD
19. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE OUTGO
(A) Conservation of Energy
(D) Foreign Exchange Earnings and Outgo
20. RATIO OF REMUNERATION TO EACH DIRECTOR
The Company had no employees as of 31st March 2019. Pursuant to Section197(12) of the Companies Act 2013 and Rule 5 (1) (2) (3) of the Companies (Appointmentand Remuneration) Rules 2014 details/disclosures of Ratio of Remuneration to eachDirector to the median employee's remuneration is annexed to this report as Annexure IV.
There are no employees posted and working in a country outside India not beingDirectors or relatives drawing more than the limits prescribed in Sub Rule 5(2) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014.
Your Company has not invited/accepted/renewed any deposits from public as defined underthe provisions of the Companies Act 2013 and the Companies (Acceptance of Deposits)Rules 2014 and accordingly there were no deposits which were due for repayment on orbefore 31st March 2019.
22. SIGNIFICANT & MATERIAL ORDERS PASSED BY THE REGULATORS
No order was passed by any court or regulator or tribunal during the year under reviewwhich impacts going concern status of the Company.
23. DETAILS OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS
The Company continued to maintain high standards of internal control designed toprovide adequate assurance on the efficiency of operations and security of its assets. Theadequacy and effectiveness of the internal control across various activities as well ascompliance with laid-down systems and policies are comprehensively and frequentlymonitored by your Company's management at all levels of the organization. The AuditCommittee which meets at least four times a year actively reviews internal controlsystems as well as financial disclosures with adequate participation inputs from theStatutory Internal and Corporate Secretarial Auditors.
24. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
During the year under review the Company has not given any Loan Guarantees orprovided any securities. The details of Investments made during the year are provided inthe Notes to Accounts and are within the limits of Section 186 of the Companies Act 2013.
25. RISK MANAGEMENT POLICY
The Company has not yet formulated a Risk Management Policy and has in place amechanism to inform the Board Members about risk assessment and minimization proceduresand undertakes periodical review to ensure that executive management controls risk bymeans of a properly designed framework.
26. CORPORATE SOCIAL RESPONSIBILTY POLICY
Since the Company does not meet the criteria for the applicability of Section 135 ofthe Companies Act 2013 read with the Companies (Accounts) Rules 2015 this clause is notapplicable.
27. RELATED PARTY TRANSACTIONS
There were no related party transactions during the financial year 2018-19.
28. FORMAL ANNUAL EVALUATION
Pursuant to the provisions of the Companies Act 2013 and the Listing Regulations theBoard has carried out an annual performance evaluation of its own performance and of theDirectors individually as well as the evaluation of the working of its Audit Nominationand Remuneration and Compliance Committees.
The Board has on the recommendation of the Nomination and Remuneration Committeeframed a policy for selection and appointment of Directors Senior Management and theirremuneration.
29. MANAGEMENT DISCUSSION AND ANALYSIS
As requisite and appropriate Management Discussion & Analysis is covered under thisReport itself a separate note on the same is not being furnished.
30. LISTING WITH STOCK EXCHANGES
Due to liquidity constraints the Company has not yet been able to pay the AnnualListing Fees for the financial years 2016-17 2017-18 and 2018-19 to BSE Limited wherethe Company's Shares are listed.
31. CORPORATE GOVERNANCE AND SHAREHOLDERS INFORMATION
A separate Report on Corporate Governance in terms of Regulation 34 of the SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 along with aCertificate from a Practising Company Secretary regarding compliance with the conditionsstipulated under Chapter IV of the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 is attached to this report as Annexure V.
32. DECLARATION FROM INDEPENDENT DIRECTORS ON ANNUAL BASIS
The Company has received necessary declaration from each Independent Director of theCompany under Section 149(7) of the Companies Act 2013 that the Independent Directors ofthe Company meet with the criteria of their Independence laid down in Section 149(6).
33. EVENT-BASED DISCLOSURES
The Company's shares are suspended from trading on BSE Limited vide orderL/DOSS/PK/INV/COM/531750/1 dated 21st August 2015 passed by Managing Directorand Chief Executive Officer of BSE Limited with effect from 26th August 2015.
34. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTIONPROHIBITION AND REDRESSAL) ACT 2013
Your Company did not engage any women employee during the year under review.
35. MAINTANANCE OF COST RECORDS
Maintenance of cost records as specified by the Central Government under sub-section(1) of section 148 of the Companies Act 2013 is not applicable to the Company.
The Directors wish to place on record their appreciation for the sincere and dedicatedefforts of all employees. Your Directors would also like to thank the ShareholdersBankers and other Business associates for their sustained support patronage andcooperation.