(For the Year 2019-2020)
We have pleasure in presenting the 27th Directors Report on business andoperations together with the Audited Statement of Accounts for the financial year endedMarch 312020.
| || || || ||(Rs. in Lakhs) |
| || |
| ||F.Y 2019-20 ||F.Y2018-19 ||F.Y 2019-20 ||F.Y2018-19 |
|Revenue from operation ||3688.48 ||3962.00 ||3733.11 ||4040.36 |
|Other Income ||332.54 ||200.66 ||341.39 ||224.95 |
|Total Income ||4021.02 ||4162.66 ||4074.49 ||4265.32 |
|Operating Expenditure ||3876.98 ||3607.27 ||3959.31 ||3701.02 |
|Depreciation and Amortization exps ||524.43 ||333.89 ||1819.82 ||16948.45 |
|Total Expenses ||4401.41 ||3941.16 ||5779.12 ||20649.47 |
|Profit before Exceptional Items finance cost and tax ||(380.39) ||221.50 ||(1704.63) ||(16384.15) |
|Finance Cost ||287.67 ||104.72 ||287.72 ||105.47 |
|Exceptional Items ||(306.26) ||- ||(306.26) ||- |
|Profit before tax ||(974.33) ||116.77 ||(2298.62) ||(16489.62) |
|Tax expense ||81.86 ||81.10 ||81.65 ||81.20 |
|Profit after Tax ||(1056.18) ||37.67 ||(2380.26) ||(16570.82) |
|Other Comprehensive Income ||(2288.71) ||(975.91)) ||(2302.59) ||(391.44) |
|Total Income for the Period ||(3344.89) ||(940.24) ||(4682.85) ||(16962.26) |
The financial statements are prepared in accordance with the Indian AccountingStandards (Ind AS) under the historical cost convention on the accrual basis except forcertain financial instruments which are measured at fair values the provisions of theCompanies Act 2013 (the Act') (to the extent notified) and guidelines issued by theSecurities and Exchange Board of India (SEBI). The Ind AS are prescribed under Section 133of the Act read with Rule 3 of the Companies (Indian Accounting Standards) Rules 2015 andrelevant amendment rules issued thereafter.
For the financial year ended March 312020 the Company reported a total Consolidatedrevenue income of Rs. 3733.11 lakhs and Standalone revenue of Rs. 3688.48 lakhs.
Changes in Share Capital.
During the year 2019-20 there was no change in the share capital of the Company.
Changes in the nature of business
During the year 2019-20 there were no change in the nature of business of the company.
IMPACT OF COVID 19 PANDEMIC
The outbreak of Coronavirus (Covid-19) pandemic globally and in India is causingsignificant disturbances and slowdown of economic activity. In many countries businessesare being forced to cease or limit their operations for long or indefinite periods oftime. COVID-19 is significantly impacting business operations of the Companies by way ofinterruption in production supply chain disruption unavailability of personnel closure/lockdown of production facilities etc. The management has evaluated the impact of thispandemic on its business operations and based on its review there is no significantimpact on its business operations.
However the impact assessment of COVID 19 is a continuing process given theuncertainties associated with its nature; and duration and accordi ngly the impact may bedifferent from that estimated as at the date of approval of these fin a ncial statements.The Company will continue monitoring any material changes to future economic: conditions.
Material changes and Commitments
There has Ideen no material changer 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.
The Directors have decided not to recommend any dividend due to losses incurred bytheCompany during the year under review.
Transfer to Reserves
Since the Company do not: recommend any dividend it is not required to transfeo anyamount to the General Resetve of tine Compaey for the year under review.
Director and Key Managerial Pers oncel (KMP)
Mn. Mafendra Pratap Single Non-Executive Director of the Company who retires byrotation in terms of necfion 152(6) of the Companies Act 2013 is proposed to bere-appointed as Non- Executive Director of the Company in the Annual General Meeting goingto be held on 29th September 2020.
Mr. Shiv Nandao Sharma Independent Director of the Company has tendered hisresignation from the Board on 27th July 2019. He has p rovided the resignation letter tothe Board of the Company and has not pnov ided eonfirmation that there was no ma terialreasons other than those stated in the resignation letter.
Mr. Rajkumar Manikpuri was appointed as an Additional Director in the capacity of a nonexecutive Independent director with effect from 14th November 2019 by theBoard of Directors and holds office; up to the date of the forthcoming Annual GeneralMeeting of the Company in terms; of Section 1651(1) of the Companies Act 2013 (theAct'). It is proposed to appoint him as non executive Independent Director for a period offive years commencing from 14th November 2019 to 13th November 2024 subject to shareholders approval in this ensuing Annual General Meeting.
Mr. Dalip Kumar (Chairman & Managing Director) Mr. Su nil Sharma (ExecutiveDirector) Mr. Anil Kumar Sfarma (Chief Financial Officer) and Ms. Harsha Sharma (CompanySecretary) are Key Maeagerial Personnel of the Company.
During the year 2019-20 Mr. Rajkumar Manikpuri was appointed as an Additional Directorof the company w.e.f 14.11.2019.
Declaration given by Independent Director
The Company has received necessary declaration from each independent director underSection 149 (7) of the Companies Act 2013 that he/she meets criteria of Independencelaid down in Section 149 (6) of the Companies Act 2013 and Regulation 25 of Securitiesand Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations2015. There has been no change in the circumstances affecting their status as anIndependent Directors of the Company.
Number of Meetings of the Board of Directors and Committees
The Board met eight times during the financial year 2019-20. The details of the BoardMeeting and committees with regard to their dates and attendance of each director/Committee member have been provided in the Corporate Governance Report that forms part ofthis Annual Report. The provisions of the Act and SEBI (LODR) Regulations were adhered towhile considering the time gap between two meetings.
Annual Performance Evaluations
Pursuant to the provisions of the Companies Act 2013 and SEBI (Listing Obligations& Disclosure Requirements) Regulations 2015 the Board evaluated the effectivenessof its functioning and that of its its Committees and individual directors by seekinginputs on various aspects of Board/ Committee Governance.
Further the Independent Directors at their meeting reviewed the performance of theBoard as a whole and performance of Chairman of the Company and also of Non-executiveDirectors.
The criteria for performance evaluation as laid down by the Nomination Committee arementioned in Corporate Governance Report attached and is part of Annual Report.
Performance evaluation policy for Board Committees of the Board and Directors wereapproved by the Board at its meeting and the same were placed on the Company's website atwww.fcsltd.com.
The details pertaining to the composition terms of reference etc. of the auditcommittee are included in the Corporate Governance Report which is a part of this report.There has been no instances of non-acceptance of any recommendations of the AuditCommittee by the Board during the financial year under review.
Policy on directors' appointment and remuneration and other details
The Company's policy on directors' appointment and remuneration and other mattersprovided in Section 178(3) ofthe Acthasbeen disclosed in the Corporate Governance Reportwhich is a part of this report.
The Board of Directors of our Company have reviewed the affairs of all the subsidiarycompanies. Astatement of holding company's interest in subsidiaries as requ ired underSection 12 S ofthe Companies Act 201 3 forms passed this annual report.
A Statement containing salient features ofthe finrnoial statement of subridiaries toprovided in Form-AOC-1 as "Annexune A" to this Director's Report. 'n accordancewith the third proviso of the Section 136(1) of the Compooies Act 2013 the Annual Reportof tfn Company containing therein its standalone and consolidated financial statementshave been placed on the website of the Company www.fcsltd.com
Particulars of Contract or Arrangement with Related Party
During the year company have received rental Income from its wholly owned subsidiaryi.e . Insync Business Solutions Ltd which falls under related parties transaction. Allother transactions entered into by the Company with related parties during the financialyear were in the Ordinary course of business and on an arm's lenth basis. The Company didnot enter into any transaction with its KMP other than payment of salaries. As stipulatedby section 134(3)(h) of the Act read with rule 8(2) of Companies (Accounts;) Rules 201-4particulars of related party transa ctions are given in form no. AOC-2 as"Annexurod-S" to this report. In compliance with Regulation 46(2)(g) of listingregulation policy on dealing with related party transactions as approved has already beenhosted on the Company's website.
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 Two Wholly Owned Subsidiary Companies outside India viz. F.C.S Software MiddleEast FZE in UAE and FCS Software Solutions GmbH in Germany. FCS has five Wholly OwnedSubsidiary Companies in India i.e. Insync Business Solutions Limited Innova E ServicesPrivate Limited Stablesecure Infra services Private Limited cGain Analytics PrivateLimited and Zero Time Constructions Private Limited.
M/s. Enstaserv Eservices Limited is the associate company of FCS Software SolutionsLimited.
The consolidated Financial Statements of the Company and its subsidiaries prepared inaccordance with Indian Accounting Standards notified under the Companies (IndianAccounting Statndards) 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
In Compliance with the provisions of Section 134(3)(g) forming part of1 thisAnnual Report particulars of loans Guarantees and Investment covered under the provisionsof section 186 of Companies Act 2013 are provided in the notes to the FinancialStatement.
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 invesUment in itsassociates during) the year.
Particulars of employee's remuneration
During) the year ended March 31 2020 no employee is drawing remuneration in excess ofthe amount prescribed under section 197(12) of the Compan ies Act 2013 read with Rule 5of Companies (Appointment and Remunaratiom of Managerial Personnel) Rules 201 4.
CODE FOR PREVRNTIOR OF INSI DER TRADING
The Comp any has adopted a Co de of Conduct to regulate monitor and report trading bydesignated persons and their immediates relatives as per the requirements under theSecurities und Exchange Board of India (Prohibition of Insider Trading) Regulations 2015.This Code of Conduct also includes code for practices and procedures for fair disclosureof unpublished price sensitive inEormation wthicf has been made availrble on the Company'swebsite at www.fcslId.com.
Directors' responsittlity 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 2020 the applicable accounting standards had been followed along with properexplanation relating to material departures;
2. that the dire ctors had sel e c t ed such acco unting po licies 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 Directors 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 toymanagement 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 2019-U0.
The exteact of Annual Return
Extract of Annual Return of the Company in the prescribed Form MGT-9 is placed on theCompany's website at www.fcsltd.com.
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 previsions ifany ofthe Companies Act2013 all ueulamed/unpaid dividend application money remaining unclaimed/unpaid foraperiod of seven years from the date they becume due for payment in aelation to theCompany have been transferred to the Investor Edueation ond Protection fund (IEPF)established by the Central Government. During the year Company was not required totransfer any amount in the lEPF Account.
The Company hasthe 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 read withRegulation-34(3)(c) is annexed and form 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
FCS has adopted a policy on prevention prohibition and redressal for employees onsexual harassment at workplace as per The Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013.
During the financial year 2019-20 there were no cases filed pursuant to the SexualHarassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013
Vigil Mechanism/Whistle Blower Policy
In Compliance with the provisions of Section-177(9) of the Companies Act 2013 readwith Rule-7 of Companies (Meeting of Board and its Powers) Rules 2014 and Regualtion 22of SEBI (Listing Obligations and Disclosure Requirements) Regulation 2015 the Companyhas a vigil mechanism through Whistle Blower Policy to deal with instances of fraud andmismanagement if any. The details of the policy is explained in the Corporate GovernanceReport and is also placed on the website of the Company.
Corporate Social Responsibity (CSR)
CSR is a means to balance economic social and environm ental objectives it is aresponsible way of doing 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 has qualified the norms specifie d undersection 135 of1 Companies Act 2013 to contribute towards CSR. The company? hascontributed Rs. 305000/- this year for corporate social responsibility in accordancewith Schedule VII.
Annual Reporbon CSR is Annexed as "Annexure-D" of the Director's Report.
Statement of Disclosure of Remunerction under Section 19 of Companies Act 2013 andRule 5(1) of Companias (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 Rules 5(1) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014is annexe d hecewi th as"Annexure-E".
As stipulated by Regulation 34(3) read with Schedule V (c) of listing regulationsCorporate Governance Report fodme part of this Annual Report.
Certificate confirming compliance of the conditions of Corporate Governance isprovided as "Annexure F" to this Director's Report.
Consolidated Financial Statements
The Consolidated Financial Statements of the Company has been prepared in accordancewith applicable Accounting dtandards forms a part of this Annual Report.
Company's policy relating to directors appointment payment or remuneration anddisclcarge of their duties
The provisions of Section 178(1) relating to constitution of Nomination andRemuneration Committee are applicable to the Company and hence the Company has adopted apolicy relating to appointment of Directors payment of Managerial remuneration Directorsqualifications positive attributes independence of Directors and other related mattersas provided under Section 178(3) of the Companies Act 2013.
M/s. Aadit Sanyam & Co. Chartered Accountant are the existing statutory auditorof the Company and were appointed at 24th Annual General Meeting held on 28thSeptember 2017 to hold the office till conclusion of our 29th Annual GeneralMeeting for a period of 5 years.
The Audit Report on the Financial Statements of the Company for the financial yearended March 31 2020 read with relevant Notes thereon are self-explanatory and do not callfor any further explanation. The Auditors Report does not contain any qualificationreservation or adverse remark.
During the year under review the Statutory Auditors have not reported any matter underSection 143(12) of the Act and therefore no details are required to be disclosed underSection 134 (3)(ca) of the Act.
The Board of Directors of the Company have appointed M/s. VS Associates PractisingCompany Secretaries to conduct Secretarial Audit for the F.Y 2019-20. The SecretarialAudit Report of M/s. VS Associates Practising Company Secretaries for the financial yearended 31st March 2020 is annexed herewith ess "Annexure-G".
The Secretarial Audit Report does not contain any qualification reservation or adverseremark except comment on delay in appointing independent director by the company.
The Board oh Directors od the Company has appoin ted M/s. SPMG & Company CharteredAccountants as an internal auditor of the Com pan y for financial year 2019-20.
Listi ng Fees
The Equity Shares of the Co mpany are listed on the BS E L imited (BSE) w ith scripcode No. 532666 an d on IMational 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 2019-20 have been paid.
Certificate of Non- Disqualification of Directors
The Certificate required as rer Regulation 34(3) and Schedule V Para C clause (10)(i)of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 formingpart of annual report is Annexed as "Annexure-H".
The Board of Directors of the Company has appointed M/s. Oberoi & AssociatesPractising Company Secretaries to provide certificate of Non-disqualification for theF.Y. 2019-20. The certificate of Nondisqualification of directors of M/s. Oberoi &Associates Practising Company Secretaries for" the financial y ear ended 31st March2020 is annexed herewith
The Directors thank the Compa n y's em ployees 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 |
| ||Sd/- |
|Place : Noida ||Dalip Kumar |
|Date : 04.09.2020 ||(Chairman & Managing Director) |