(For the Year 2016-2017)
Your Directors are pleased to present their 24th Directors Report on business andoperations together with the Audited Statement of Accounts for the financial year endedMarch 312017.
|Financial Highlights || ||(Figures in Lakh) |
| || |
|Particulars ||2017 ||2016 |
| ||(Rs.) ||(Rs.) |
|Revenue from Operations ||3660.14 ||4249.03 |
|Operating Profit (EBITDA) ||(758.30) ||(471.80) |
|Misc. Income ||1021.29 ||1088.90 |
|Depreciation ||4692.15 ||4656.55 |
|Interest ||66.67 ||504.42 |
|Profit before tax (PBT) ||(4495.83) ||(4543.87) |
|Tax Expenses ||54.17 ||51.02 |
|Profit After Tax (PAT) ||(4550.00) ||(4594.89) |
The Board of Directors has made conscious efforts for drawing the financial statementson the basis of sound accepted and conservative accounting principles to comply with theAccounting Standards Specified under Section 133 of Companies Act 2013 read with Rule7of the Companies (Accounts) Rules 2014 and the relevant provisions of the Companies Act2013. The revenues generated have to provide for prior period adjustments and provisionsalso but at the same time it ensure true and fair financial statements of the Company. TheCompany has adopted the Indian Accounting Standards (Ind AS) from 1st April 2016. Thecomparative financial information of the Company for the year ended 31st March 2016 havealso been reinstated to comply with Ind AS.
For the financial year ended March 312017 the Company reported a total revenue ofRs.3660.14 lakhs.
Changes in nature of business
During the year under review there were no changes in nature of business of thecompany.
Changes in the Capital Structure
Druing the year under review the company has allotted 50000000 equity shares of Re.1/- each fully paid up pursuant to the conversion of warrants into equity shares on 12thApril 2016.
Consequent to the above the issued subscribed and paid up Equity Share Capital of theCompany as on 31st March 2017 is Rs. 1709553100/- comprising of 1709553100 equityshares of Re. 1/- each.
Material changes and Commitments
There has been no material changes and commitments affecting the financial position ofthe company which have occurred between the end of the financial year of the company towhich the balance sheet relates and the date of this report.
Transfer to Reserves
No amount is being transferred to reserves.
Due to losses in the Company your directors do not recommend any dividend for thefinancial year 2016-17 under review.
Director and Key Managerial Personnel (KMP)
Mr. Govinda Sahu Executive Director of the Company who retires by rotation in termsof section 152(6) of the Companies Act 2013 was appointed as Executive Director of theCompany in the Annual General Meeting held on 22nd September 2016.
During the year Mr. Rohit Pratap Singh Non Executive Director of the Company hasresigned from the post of non executive director w.e.f. 30th May 2016 which was acceptedby the Board.
Mr. Sunil Sharma was appointed by the Board as an additional director of the Company inits meeting held on 13th August 2016 and was regularized as an Executive Director of theCompany in its Annual General Meeting held on 22nd September 2016.
Mr. Sunil Sharma Executive Director of the Company is proposed to be retired byrotation in the forthcoming annual general meeting and being eligible offers himself forre-appointment.
Mr. Dalip Kumar (Chairman & Managing Director) Mr. Govinda Sahu (Whole TimeDirector) Mr. Anil Kumar Sharma (Chief Financial Officer) and Ms. Harsha Sharma (CompanySecretary) are Key Managerial Personnel of the Company. There were no change in KMP'sduring the Financial Year 2016-17.
Number of Meetings of the Board of Directors
The Board met Nine times during the financial year 2016-17 the details of the BoardMeeting with regard to their dates and attendance of each director have been provided inthe Corporate Governance Report that forms a part of this Annual Report. The maximuminterval between any two consecutive meetings did not exceeded 120 days.
Pursuant to the provisions of the Companies Act 2013 and SEBI Listing Regulations2015 the Board has carried out an annual performance evaluation of its own performanceand that of its Committees and individual directors. The manner in which such formalannual evaluation was made by the Board is given below:
Performance evaluation policy for Board Committees of the Board and Directorswere approved by the Board at its meeting held on 16th March 2017 and the same were placedon the Company's website www.fcsltd.com
The evaluation of all the directors and the Board as a whole was conducted basedon the criteria and framework adopted by the board.
The report of performance evaluation so arrived at was then noted and discussedby the Nomination and Remuneration Committee and the Board at their meetings held on 16thMarch 2017.
Under law as per the report of performance evaluation the Board shalldetermine inter alia whether to continue the term of appointment of the independentdirector. During the year under review there was no occasion to decide on the continuanceof the term of appointment of any of the independent directors and hence the question oftaking a decision on their re-appointment did not arise.
During the year under review SEBI vide its circular dated 5th January 2017 came outwith a Guidance Note of Board Evaluation which was to be adopted by the Company asconsidered appropriate. The performance evaluation criteria for the Board Committees ofthe Board Chairperson and Directors were accordingly modified by the Board at its meetingheld on 16th March 2017 as approved and recommended by the Nomination and RemunerationCommittee. The updated policy is placed on the Company's website www.fcsltd.com and willbe applicable for evaluation from the year 2016-17.
Declaration By Independent Directors
The Company maintains the requisite number of Independent Directors as required underSection 149(4)of the Companies Act 2013 and Regulation 17 of the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015. The Independent Directors havesubmitted the declaration of independence as required under Section 149(7) of theCompanies Act 2013confirming that they meet the criteria of independence as provided insub-Section(6) of Section 149 of the Act.
The Board of Directors of our Company have reviewed the affairs of all the subsidiarycompanies. A statement of holding company's interest in subsidiaries as required underSection 129 of the Companies Act 2013 forms part of this annual report.
A Statement containing salient features of the financial statement of subsidiaries isprovided in Form- AOC-1 as "Annexure A" to this Board Report. In accordance withthe third proviso of the Section 136(1) of the Companies Act 2013 the Annual Report ofthe Company containing there in its standalone and consolidated financial statements havebeen placed on the website of the Company www.fcsltd.com
Particulars of Contract or Arrangement with Related Party
In accordance with third proviso of Section 136(1) of Companies Act 2013 the AnnualReport of the company containing there in its details of Contract or Arrangement withRelated Party of the Company in the prescribed Form AOC-2 is provided as "AnnexureB" to Director's Report.
Conservation of energy research and development technology absorption foreignexchange earnings and outgo
The particulars as prescribed under section 134(3)(m) of the Companies Act 2013 readwith Rule 8(3) of the Companies (Accounts) Rules 2014 are set out in the "Annexure-C" to this Board Report.
Subsidiaries and Consolidated Financial Statements
FCS has four Wholly Owned Subsidiary Companies outside India viz. FCS SoftwareSolutions America Limited incorporated in America and F.C.S Software Middle East FZE inUAE FCS Software Solutions GmbH in Germany and FCS Software (Shanghai) Co. Ltd. inChina. FCS has one Wholly Owned Subsidiary Company in India i.e. Insync Business SolutionsLimited and five Subsidiary Company in India i.e. Innova e Services Private LimitedHeimdahl Software Systems Private Limited Stablesecure Infraservices Private LimitedcGain Analytics Private Limited and Zero Time Constructions Private Limited.
M/s. Enstaserv Eservices Limited is now associate company of FCS Software SolutionsLimited which was earlier the subsidiary company.
The consolidated Financial Statements of the Company and its subsidiaries prepared inaccordance with Indian Accounting Standards notified under the Companies (IndianAccounting Standards) Rules 2015 (Ind AS) forms part of the Annual Report and arereflected in consolidated financial statement of the Company.
Particulars of Loan Guarantees or Investments
Details of Loan Guarantees and Investment covered under the provisions of section 186of Companies Act 2013 are provided in the notes to the Financial Statement.
The Company has not accepted any public deposits during the year under Section 73 ofthe Companies Act 2013 read with Companies (Acceptance of Deposits) Rules 2014 and assuch no amount on account of principal or interest was outstanding as on the date ofBalance Sheet. The Company has not made any loans/advances and investment in itsassociates during the year.
Particulars of employees
During the year ended March 31 2017 no employee is drawing remuneration in excess ofthe amount prescribed under section 197(12) of the Companies Act 2013 read with Rule 5of Companies (Appointment and Remunaration of Managerial Personnel) Rules 2014.
Directors' responsibility statement
To the Members
We the directors of FCS Software Solutions Limited pursuant to the provisions ofsection 134(3)(c) of the Companies Act 2013 confirm the following:
1. that in the preparation of the annual accounts for the Financial Year ended 31stMarch 2017 the applicable accounting standards had been followed along with properexplanation relating to material departures;
2. that the directors had selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company at the end of thefinancial year and of the profit of the Company for that period;
3. that the directors had taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act 2013for safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities;
4. that the directors had prepared the annual accounts on a going concern basis.
5. that the Board of Director had laid down internal financial controls to be followedby the Company and that such internal financial controls are adequate and operatingeffectively.
6. that the Board of Directors had devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems were adequate and operatingeffectively.
Internal Financial Control
The Board has adopted policies and procedures for ensuring the orderly and efficientconduct of its business including adherence to the Company's policies the safeguardingof its assests the prevention and detection of fraud error reporting mechanisms theaccuracy and completeness of the accounting records the timely preparation of reliabledisclosures.
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 Financial Year 2016-17.
The extract of Annual Return
Extract of Annual Return of the Company in the prescribed Form MGT-9 is provided as"Annexure-D" to Director's Report.
Ensuring Compliance of laws
The company has devised and set in place proper systems to ensure compliance of alllaws applicable to the company.
Transfer to Investor Education and Protection fund
Pursuant to Section 125 and other applicable provisions if any of the Companies Act2013 all unclaimed/ unpaid dividend application money remaining unclaimed/unpaid for aperiod of seven years from the date they became due for payment in relation to theCompany have been transferred to the Investor Education and Protection fund (IEPF)established by the Central Government. During the year Company have transferred thebalance of unpaid dividend account of Rs. 107209 on 12th October 2016 in the IEPFAccount.
The Company has the following committees of the Board:
1. Audit Committee
2. Nomination and Remunaration Committee
3. Stakeholders Relationship Committee
4. Corporate Social Responsibility Committee
Composition of Audit Committee
Details of Audit Committee of Board of Directors of the Company forms part of theAnnual Report and is given separately in Report of Corporate Governance.
Management Discussion and Analysis
The report on Management Discussion and Analysis Report as required under Schedule V ofthe SEBI (Listing Obligations and Disclosure Requirements) Regulation 2015 is annexed andform part of Annual Report.
Details of significant and material orders passed by the regulators or courts ortribunals impacting the going concern status and Company's operations in future
During the year no significant and material orders were passed by the regulators orcourts or tribunals impacting the going concern status and Company's operation in future.
Policy on Sexual Harassment
The company has adopted a policy on prevention prohibition and redressal for employeeson sexual harassment at workplace.
During the financial year 2016-17 company has not received any complaints of sexualharassment.
Vigil Mechanism/Whistle Blower Policy
The Company has a vigil mechanism through Whistle Blower Policy to deal with instancesof fraud and mismanagement if any. The details of the policy is explained in theCorporate Governance Report and is also placed on the website of the Company.
Corporate Social Responsibity (CSR)
Your Company's approach is to spend on activities for the welfare of society. CSR is ameans to balance economic social and environmental objectives it is a responsible way ofdoing business.
In terms of provisions of section 135 of the Companies Act 2013& Rule 9 ofCompanies (Corporate Social Responsibility) Rule 2014 and other clarification issued byMinistry of Corporate Affairs the Company qualify the norms specified under section 135of Companies Act 2013 to contribute towards CSR. But due to net loss from threeimmediately preceding financial year company has not spent any amount towards CSRactivities.
Annual Report on CSR is Annexed as Annexure-E of the Director's Report.
Statement of Disclosure of Remuneration under Section 197 of Companies Act 2013 andRule 5(1) of Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014
Disclosures pertaining to remuneration and other details as required under Section197(12) of the Companies Act 2013 read with Rule 5(1) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 is annexed herewith as Annexure-F.
FCS is endeavoring to implement every norm which is promulgated by legislation or anyof the statutory bodies.
Your Company has established and maintained a strong ethical environment overseen byBoard of Directors where 3 out of 6 Directors are Independent. The Company's practicesand policies reflect true spirit of Corporate Governance initiatives.
Your Company is in compliance of all mandatory requirements of Corporate Governance asstipulated as per Securities and Exchange Board of India (Lisiting Obligations andDisclosure) Regulations 2015. Compliance status is provided in the Corporate Governancesection of the Annual Report. A certificate issued by the Statutory Auditors of theCompany under Regulation 34 of Securities and Exchange Board of India (Listing Obligationsand Disclosure) Regulations 2015 confirming compliance of the conditions of CorporateGovernance is provided as Annexure G to this Directors' Report. The auditors' certificatefor Financial Year 2017 does not contain any qualifications reservations or adverseremark.
A detailed report on Corporate Governance for the year forms part of this AnnualReport.
Consolidated Financial Statements
The Consolidated Financial Statements of the Company prepared in accordance withapplicable Accounting Standards forms a part of this Annual Report.
M/s. SPMG & Co. Chartered Accountant the existing statutory auditor of theCompany were appointed at 21st Annual General Meeting held on 24th September 2014 to holdthe office till conclusion of our forthcoming 24th Annual General Meeting for a period of3 years.
Accordingly they will retire at this Annual General Meeting. In accordance with theprovision of Section 139 and other applicable provisions if any of the Companies Act 2013 and the relevant rules framed thereunder the Board of Directors have proposed toappoint M/s. Aadit Sanyam & Assosiates Chartered Accoutant as a statutory auditor ofthe Company for a term of 5 consecutive years at the 24th Annual General Meeting till theconclusion of 29th Annual General Meeting in place of retiring auditors SPMG & Co.Chartered Accountant.
The Board of Directors of the Company appointed M/s. Vikas Gandhi & AssociatesPractising Company Secretary to conduct Secretarial Audit for the F.Y 2016-17. TheSecretarial Audit Report of M/s. Vikas Gandhi & Associates Practising CompanySecretary for the financial year ended 31st March 2017 is annexed herewith asAnnexure-H.
The Secretarial Audit Report does not contain any qualification reservation or adverseremark.
The Board of Directors of the Company has appointed M/s. Mahajan Rajeev & Co.Chartered Accountants as internal auditor of the Company for financial year 2017-18.
The Equity Shares of the Company are listed on the BSE Limited (BSE) with scrip codeNo. 532666 and on National Stock Exchange of India Limited (NSE) with scrip code ofFCSSOFT. The Company confirms that the annual listing fees to both the stock exchanges forthe financial year 2017-18 have been paid.
The Directors thank the Company's employees customers vendors investors serviceproviders bankers for their continued support. The Directors also convey a special thanksto the Government of India particularly Ministry of Communication and InformationTechnology the Customs and Excise departments the Income Tax department Ministry ofCorporate Affairs Office of Registrar of Companies New Delhi Board of approval andDevelopment Commissioner of Special Economic Zones particularly of Noida and Chandigarhfor their co-operation.
| ||For and on behalf of the Board of Directors |
| ||For FCS Software Solutions Limited |
|Place: Noida ||sd/- |
|Date: 25/08/2017 ||Dalip Kumar |
| ||(Chairman & Managing Director) |