Your Directors have pleasure in submitting their 6th Annual Report together with theAudited standalone & consolidated financial statement for the year ended on 31stMarch 2017.
Financial Highlights & Review of Operations:
|Particulars || |
Standalone for financial year ended on 31st March
Consolidated for financial year ended on 31st March
| ||2017 ||2016 ||2017 ||2016 |
|Revenue from operations ||1490.85 ||1401.53 ||1491.24 ||1401.80 |
|Other income ||2.65 ||2.45 ||2.66 ||2.45 |
|Total revenues ||1493.50 ||1403.98 ||1493.90 ||1404.25 |
|Cost of Material Consumed ||1406.36 ||1383.50 ||1406.49 ||1383.66 |
|Change in inventories of finished goods ||(39.51) ||(77.96) ||(39.51) ||(77.96) |
|Employee benefit expense ||57.18 ||19.84 ||57.31 ||19.92 |
|Finance costs ||5.37 ||23.54 ||5.37 ||23.54 |
|Depreciation and amortization expense ||2.78 ||3.70 ||2.78 ||3.70 |
|Other expenses ||23.43 ||20.58 ||23.54 ||20.60 |
|Total expenses ||1455.61 ||1373.20 ||1455.98 ||1373.46 |
|Profit before Exceptional and Prior Period Items & tax ||37.89 ||30.78 ||37.92 ||30.79 |
|Exceptional and Prior Period Items ||2.30 || ||2.30 || |
|Profit before tax ||35.59 || ||35.62 || |
|Tax expense ||13.64 ||10.71 ||13.65 ||10.71 |
|Profit for the year ||21.95 ||20.07 ||21.97 ||20.08 |
|Basic Earnings Per Share (In Rs.) ||10.08 ||10.30 ||10.09 ||10.30 |
|Diluted Earnings Per Share (In Rs.) ||10.08 ||10.30 ||10.09 ||10.30 |
REVIEW OF BUSINESS OPERATIONS
Your Company's standalone total revenue for the current financial year 2016-17 hasincreased to Rs. 1493.50 Crores from the previous financial year of Rs. 1403.98 Crores.Similarly the Company's Standalone total profit for the current financial year 2016-17 hasincreased to Rs. 21.95 Crores from the previous financial year of Rs. 20.07 Crores.
Your Directors assured that Company's performance will enhance in future also.
REVIEW OF BUSINESS OPERATIONS AND FUTURE PROSPECTS
Your Directors are optimistic about company's business and hopeful of betterperformance with increased revenue in coming year. There was no change in the nature ofbusiness of Company. During the year under review few orders from one of the partners' ofthe Company had been cancelled/terminated however the Company and its Board is strivingits best in order to maintain its growth and business in the coming years'.
No Dividend was declared for the current financial year.
TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCTION AND PROTECTION FUND
The provisions of Section 125(2) of the Companies Act 2013 do not apply as there wasno dividend transferred to the unpaid dividend account. Further no dividend remain unpaidor unclaimed for the period of 7 Year's.
TRANSFER TO RESERVES
Your Company has not made any transfer to reserve during the Financial Year 2016-17.However profit for the year is shown as surplus under the head Reserve & Surplusduring the financial year 2016-17.
During the year under review the company has undertaken following transactions:
|Increase in Authorized Capital ||Increase in Paid-up Capital [Bonus] ||Buy Back of Securities ||Sweat Equity ||Bonus Shares ||Employees Stock Option Plan |
|50000000 ||108920000 ||Nil ||Nil ||108920000 ||Nil |
A) Issue of equity shares with differential rights
Your Company had not issued equity shares with differential rights as required to bedisclosed in rule 4 (4) of Companies (Share Capital and Debentures) Rules 2014 duringthe year under review.
B) Issue of sweat equity shares
Your Company had not issued sweat equity shares as require to be disclosed under rule 8(13) of Companies (Share Capital and Debentures) Rules 2014 during the year underreview.
C) Issue of employee stock
Your Company had not issued employee stock option as required to be disclosed underrule 12 (9) of Companies (Share Capital and Debentures) Rules 2014 during the year underreview.
D) Provision of money by company for purchase of its own shares by employees or byTrustees for the benefit of employees: N.A.
MATERIAL CHANGES DURING THE FINANCIAL YEAR
Increase in the Authorized Share Capital
Your Company increased it's authorized share capital from Rs.25 Crores to Rs. 30 Croresduring the year under review. Increase in the Paid up Share Capital
- Bonus Issue
Your company allotted by way of bonus Issue 10892000 (One Crore Eight Lakh Ninety TwoThousand) equity shares of Rs. 10/- each in the ratio of 1:1 fully paid up bycapitalisation of Reserves on 4th February 2017 to the member of the company during thefinancial year under review.
- Purchase of shares of Enpocket Services (India) Private Limited know known asEnpocket IT Services (India) Private Limited
Your Company purchased 10000 (100%) equity shares at the rate of Rs. 3900/- (RupeesThree Thousand Nine Hundred only) each of Enpocket Services (India) Private Limited asubsidiary of Nokia Investment OY Finland during the financial year under review.
- Incorporation of Fourth Dimension Solutions Pte. Ltd.
A subsidiary of your Company was incorporated at Singapore under the name and style ofFourth Dimension Solutions Pte Ltd. on 18-11-2016 during the financial year under review.
- Incorporation at Fourth Dimension Solutions DMCC
A wholly owned subsidiary of your Company was incorporated at DMCC UAE under the nameand style of Fourth Dimension Solutions DMCC on 16.02.2017 during the financial yearunder review.
The Logo of your company got registered with the Registrar of Trade Marks under theprovisions of Section 23(2) of Trade Mark Act 1999 read with rule 62(1) of the Trade MarkRules 2002 in Class 35 vide e-certificate dated 15th December 2016 during the financialyear under review.
CHANGES IN DIRECTORS AND KEY MANAGERIAL PERSONNEL
The Board consists of executive and non-executive directors who have wide and variedexperience in different disciplines of corporate in order to further strengthen theBoard during the year under review the changes in the Directors and Key ManagerialPersonnel are herein below.
The Board in its meeting held on 25th February 2017 appointed Mr. Sanjay Kumar Sachdev(DIN: 01548230) as an Additional Director of the Company with immediate effect.
Retirement by Rotation
In accordance with the provisions of Section 152 of the Companies Act 2013 and interms of the Articles of Association of the Company Mrs. Namita Mukherjee (DIN:06561265) Director and Mr. Bibekananda Mukherjee (DIN: 07008285) Director of theCompany will retire by rotation at the ensuing Annual General Meeting of your Company andbeing eligible offer themselves for reappointment. The Board of Directors of the Companyhas recommended their re-appointment.
MATERIAL CHANGES IF ANY AFTER THE END OF FINANCIAL YEAR
The Board in its meeting held on 29th May 2017
(i) Appointed Mr. Rajeev Ranjan (DIN: 06534751) Ms. Shipra Jain (DIN: 07771758) andMr. Mahavir Singh Farswan (DIN: 07833852) as an Additional Director of the Company withimmediate effect.
(ii) Took note on the resignation of Mrs. Namita Mukherjee (DIN: 06561265) from thepost of whole time director of the Company with effect from 31.05.2017 however she willcontinue on the Board as Director of the Company.
Mr. Mahavir Singh Farswan (DIN: 07833852) resigned due to his preoccupation from thepost of Additional Director of the Company w.e.f. 22nd July 2017.
The Board in its meeting held on 19th August 2017 appointed Mr. Rajendra Kumar (DIN:06380868) as an Additional Director of the Company with immediate effect.
COMPANY'S POLICY RELATING TO DIRECTORS APPOINTMENT PAYMENT OF REMUNERATION ANDDISCHARGE OF THEIR DUTIES
During the year under review the Company had reconstituted Nomination and RemunerationCommittee. The Constitution
of the Nomination and Remuneration Committee is as per the provisions of Section 178 ofthe Companies Act 2013. As per the current policy the Composition of Board is anappropriate mix of executive and independent directors to maintain the independence of theBoard and separate its functions of governance and management. On March 312017 theBoard consists of seven Directors two of whom are executive two non-executive and threeare independent directors. They meets the criteria policy of the Company on directors'appointment and remuneration including criteria as required under sub-section (3) ofSection 178 of the Companies Act 2013 for determining qualifications positiveattributes independence of a director and other matter. We affirm that the remunerationpaid to the directors is as per the terms laid out in the nomination and remunerationpolicy of the Company.
DECLARATION BY THE INDEPENDENT DIRECTORS
During the year under review the Company has received necessary declaration from eachindependent director under Section 149(7) of the Companies Act 2013 that he / she meetsthe criteria of independence laid down in Section 149(6) of the Companies Act 2013 andRegulation 25 of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.
EXTRACT OF ANNUAL RETURN
As per Section 134(3)(a) the extracts of Annual Return in form MGT-9 pursuant to theprovisions of Section 92 read with Rule 12 of the Companies (Management andAdministration) Rules 2014 is furnished in Annexure I and is attached to this Report.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
As per Rule 8(3) of Companies (Accounts) Rules 2014 the disclosure required underthis rule are as follows:
A. Conservation of Energy
Your Company is engaged in business of sale and services of IT and ITes Relatedproducts providing e-governance services and such operations do not require substantialElectricity Gas & Steam Power Water or any other kind of energy consumption.However the Company is taking all possible measures to conserve the energy.
(i) The steps taken or impact on conservation of energy; N.A.
(ii) The steps taken by the Company for utilizing alternate sources of energy; N.A.
(iii) The capital investment on energy conservation equipment's; N.A.
B. Technology Absorption and Research & Development
The Company has not incurred any expenditure on Research & Development. YourCompany has not imported technology reckoned from the beginning of the financial year.
(i) The efforts made towards technology absorption; N.A.
(ii) The benefits derived like product improvement cost reduction product developmentor import substitution; N.A.
(iii) In case of imported technology (imported during the last three years reckonedfrom the beginning of the financial year) - N.A.
(a) The details of technology imported; N.A.
(b) The year of import; N.A.
(c) Whether the technology been fully absorbed; N.A.
(d) If not fully absorbed areas where absorption has not taken place and the reasonsthereof; and N.A.
(iv) The expenditure incurred on Research and Development. N.A.
C. Foreign Exchange Earnings and Outgo
Your Company has earned in Forex equivalent to Rs. 10.36 Crores from supply/ renderingof services. However your Company has spent Rs. 15.93 Crores on import of goods and Rs.2.00 Crores on tour and travel during the financial year under review.
The Board of Directors duly met Nine (9) times during the financial year 2016-17 and inrespect of all the proceedings were properly recorded
|SN Date ||SN ||Date |
|1. 12.04.2016 ||2. ||28.05.2016 and 30.05.2016 - (Adjourned) |
|3. 27-08-2016 ||4. ||22.10.2016 |
|5. 12.12.2016 ||6. ||21.01.2017 |
|7. 27.01.2017 ||8. ||04.02.2017 |
|9. 25.02.2017 || || |
COMMITTEES OF THE BOARD
Currently the Board has five committees: the Audit Committee the Executive Committeethe Stakeholders Relationship Committee the Nomination & Remuneration Committee andthe Corporate Social Responsibility Committee. A detailed note on the composition of theBoard and its committees is provided in the Corporate Governance report as Annexure V andis attached to this Report.
Your Company has neither accepted nor renewed any Deposit under Schedule V of theCompanies Act 2013 read with Companies (Acceptance of Deposits) Rules 2014 during theyear under review.
The details relating to deposits covered under Chapter V of the Act-
(a) The Company have not accepted deposit during the year; N.A.
(b) Remained unpaid or unclaimed as at the end of the year; N.A.
(c) Whether there has been any default in repayment of deposits or payment of interestthereon During the year and if so number of such cases and the total amount involved-N.A.
(i) At the beginning of the year; N.A.
(ii) Maximum during the year; N.A.
(iii) At the end of the year; N.A.
The details of deposits which are not in compliance with the requirements of Chapter Vof the Act; N.A.
MANAGEMENT DISCUSSION & ANALYSIS REPORT
Pursuant to Regulation 34 and Schedule V of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 the Management Discussion and Analysis Reportis as follows:
Forward looking statement
Statements made herein describing the Company's expectations or predictions are"forward looking statements". The actual results may differ from those expectedor predicted. Prime factors that may make a difference to the Company's performanceinclude market conditions input costs govt. regulations economic developmentwithin/outside country etc.
The following discussions on our financial condition and result of operations should beread together with our audited consolidated financial statements and the notes to thesestatements included in the annual report. Unless otherwise specified or the contextotherwise requires all references herein to "we" "us""our" "the Company" "FDS" are to Fourth DimensionSolutions Ltd. and its subsidiaries and associates.
Global GDP growth is projected to increase rising from just under 3% in 2016 - theslowest pace since 2009 - to 3.3% in 2017 and around 3.5% in 2018. India's economy couldexpand by between 6.75% and 7.5% in 2017-18 a government survey said signalling thatgrowth could recover sooner than expected after a shock scrapping of high-value banknotesto fight "black money". The cash ban however will slow down growth for 2017 tobelow 7% said the Economic Survey which is an annual government report on the economythat also sets the tone for the general budget and floats new policy ideas. The surveysaid "demonetization" would bring long-term benefits to the economy.
It also said structural reforms and proposed Goods and Service Tax could boost growthrate to 8-10%. The GST will create a common Indian market improve tax compliance andgovernance and boost investment and growth; it is also a bold new experiment in thegovernance of India's cooperative federalism. All businesses face the task of loweringdown the cost of production and simultaneously maintain the satisfaction of the consumer.This is why manufacturing industry is a very competitive industry. Therefore the GST willlead to the reduction in cost of production because the GST reduces the tax increment. TheGST program should have allowed uninterrupted tax credit by removing the old indirect taxrule of not getting any tax credit of the central taxes over state taxes and vice versa.
Indian electronics and hardware industry is expected to reach USD 112-130 billion by2018 on the back of rising consumer demand growing disposable income decliningelectronics prices and various government initiatives like Digital India.
Moreover the Government of India (Gol) has announced several programmes such asDigital India Smart Cities the cloud initiative solar power UIDAI projects and theNational Knowledge Network initiative which will necessitate installation and up-gradation of installed devices and networks.
In the Union Budget 2017-18 the Government of India announced the following keyproposals in addition to the previously announced Digital India Initiative which willprovide a boost to the businesses of IT/ITES and ICT (Information & CommunicationTechnology:
- The Government of India has allocated Rs 10000 crore (US$ 1.5 billion) for BharatNetproject under which it aims to provide high speed broadband to more than 150000 grampanchayats by 2017-18.
- Prime Minister of India Mr Narendra Modi has launched the Bharat Interface forMoney (BHIM) app an Aadhaar-based mobile payment application that will allow users tomake digital payments without having to use a credit or debit card. The app has alreadyreached the mark of 10 million downloads.
(Source: OECD Outlook World Bank report on "Global Economic Prospects January2017" Economic Survey 2017 Analyst Reports Government Publications)
ABOUT Fourth Dimension Solutions Ltd. (FDS)
Fourth Dimension Solutions founded in 2011 is an India-based information technology(IT) and cable infrastructure Company which provides end-to-end IT / ITEs and telecomsolutions combined with technical support and operations outsourcing. The Company partnerswith government and public sector institutions to provide sustainable IT strategies atcompetitive costs. It operates in three core verticals - Technology Solutions ITInfrastructure Services and Operations Outsourcing.
With over 2000 employees FDS is a professionally driven global Company catering over100+ Indian & Global customers including ranked 66 among THE Next 500 India's TopMidsize Companies by Fortune India magazine and Raked 1st in the InfoTech SegmentCompanies. FDS is also amongst the best SME IT companies in India as per the recentsurveys and reports.
SUBSIDIARY ASSOCIATES AND JOINT VENTURES Domestic Subsidiaries -
M/s. Thumbspeed Tech Solutions Private Limited (Previously known as Thumbspeed SoftwareSolutions Private Limited) a wholly owned subsidiary of the company is engaged in IT andFMCG related business.
M/s. Enpocket IT Services (India) Private Limited (Previously known as EnpocketServices (India) Private Limited became wholly owned subsidiary of the company during theyear under review. Previously it was a subsidiary of M/s. Nokia Investments OY. M/s.Enpocket IT Services (India) Private Limited is engaged in IT App related business.
Overseas Subsidiaries -
M/s. Fourth Dimension Solutions Pte. Ltd. a subsidiary of Fourth Dimension SolutionsLimited got incorporated on 18th November 2016 at Singapore and is engaged in IT and ITesrelated business. During the year under review no business or operation had commenced.
M/s. Fourth Dimension Solutions DMCC a wholly owned subsidiary of Fourth DimensionSolutions Limited got incorporated on 16th February 2017 at Dubai U.A.E. and is engagedin IT and ITes related business. During the year under review no business or operationhad commenced.
During the year under review the total revenue of M/s. Thumbspeed Tech SolutionsPrivate Limited has increased to Rs. 2955590/- from previous financial year Rs.2720630/- and net profit after tax for the current financial year 2016-17 has decreasedto Rs. 39353/- from the previous financial year of Rs. 72422/-.
During the year under review the total revenue of M/s. Enpocket IT Services (India)Private Limited has decreased to Rs. 1071250/- from previous financial year Rs.2816094/- and net profit after tax for the current financial year 2016-17 has decreasedto Rs. 174735/- from the previous financial year of Rs. 984683/-.
A separate statement containing the salient features of Financial Statements ofSubsidiary of your Company i.e. M/s. Thumbspeed Tech Solutions Private Limited and M/s.Enpocket IT Services (India) Private Limited forms a part of consolidated financialstatement in terms of Section 129 of the Companies Act 2013. The Financial Statements ofSubsidiary Companies are kept open for inspection by the shareholders at the RegisteredOffice of your Company during business hours on all days except Saturdays Sundays andpublic holidays upto the date of the Annual General Meeting (AGM) as required underSection 136 of the Companies Act 2013. Any member desirous of obtaining a copy of thesaid financial statements may write to the Company at its Registered Office.
PERFORMANCE AND FINANCIAL POSITION OF THE SUBSIDIARY
The statement containing the features of the financial statements of Thumbspeed TechSolutions Private Limited and Enpocket IT Services Private Limited under the first provisoto sub-section (3) of Section 129 of the Companies Act 2013 is being attached with theBoard's Report in Form AOC-1 as Annexure II and the forming part of the Board's Report.
CONSOLIDATED FINANCIAL STATEMENTS
The audited Consolidated Financial Statement comprising of the Company and itssubsidiary form part of this Report. The Auditors' Report on the Consolidated Accounts isalso attached. The same is unqualified. The Consolidated Financial
Statement have been prepared in accordance with the applicable Accounting Standards andin compliance with the applicable provisions of the Companies Act 2013 other applicableprovisions.
CONSOLIDATED FINANCIAL OVERVIEW -
The consolidated performance of the Company for the financial year ended March 312017is as follows:
Total revenue from operations at Rs. 1491.2 crore for the year ended March312017 as against Rs. 1401.8 crore for the corresponding previous period an increase of6.4%.
The cost of raw materials for the financial year ended March 312017 were Rs.1367.0 crore as against Rs. 1305.7 crore for the corresponding previous period anincrease of 4.7%.
Staff expenses for the financial year ended March 312017 were Rs 57.3 crore asagainst Rs. 19.92 crore for the corresponding previous period an increase of 188.1% onaccount of increase in number of staff.
The EBIDTA (earnings before interest depreciation and tax) was Rs. 43.4 crorefor the year ended March 312017 as against Rs. 55.6 crore for the corresponding previousperiod a decrease of 21.9% mainly on account of increase in number of staff in thecurrent year owing to higher staff expenses.
Depreciation for the financial year ended March 312017 was Rs. 2.8 crore asagainst Rs. 3.7 crore for the corresponding previous period.
The interest for the financial year ended March 312017 was Rs. 5.4 crore asagainst Rs. 23.5 crore for the corresponding previous period a decrease of 77.2% for thecorresponding previous period.
Profit after tax was Rs 21.97 crore for the year ended March 31 2017 asagainst Rs. 20.1 crore for the corresponding previous period an increase of 9.4%.
EPS (Earning Per Share) for the financial year ended March 312017 was Rs. 10.09for a face value of Rs 10 per share.
RESOURCES AND LIQUIDITY
As on March 312017 the consolidated net worth stood at Rs. 68.97 crore and theconsolidated debt was at Rs. 4.98 crores.
The cash and cash equivalents at the end of March 312017 were Rs. 5.27 crore.
The net debt to equity ratio of the Company stood at 0.23:1 as on March 312017.
The Company provides Information technology (IT) services and solutions. Theoperational profits have improved on account of optimizing all the operations of theCompany.
This performance could not have been achieved without your Company's continuous focuson customer centric initiatives strengthening of network capabilities and widespreaddeployment of information technology. Your Company has continued to grow as a lean andagile organisation delivering robust performance due to consistent implementation of bestpractices in operations institutionalization of a number of strategic initiatives andenhanced employees engagement. Your Company firmly believes that the employees are itsmost valuable asset. This belief is translated into action through a number of initiativesfor improving employee engagement capability building empowerment and thought leadershipto yield consistent results.
ACHIEVEMENTS IN BUSINESS DURING THE YEAR
Fourth Dimension Solutions Ltd was recognized as "India Industry Trendsetter"by the Power brand Global London International forum of Equality at the KIA Oval UK. Thisaward is given to organizations that have established their presence in a very short spanof time in the field of IT/ITES.
Fourth Dimension Solutions was awarded "Honour of Excellence" for significantcontribution to India's self-reliance at
the National Conference on Defence Production: Self Reliance and Beyond on 14thDecember 2016 at New Delhi.
This prestigious award is a feather in the cap for our Company and is a testimony ofthe effort and skill of our team.
For the second year in a row Fourth Dimension Solutions Ltd. (FDS) has made it to theprestigious Fortune India Next 500 list of Indian companies with the IT/ITESinfrastructure and services company improving its ranking to 66 from 371 in 2016. FDSfeatures at the top ranking #1 from 8 in 2016 in the Infotech Sector list.
Companies in the Next 500 list are mostly mid-sized and termed as the smallwonders' by the magazine. These firms drawn from various sectors like food andagricultural products pharma information technology iron and steel and financialservices are capable of breaking into the Fortune India the next 500 Rankings.
The services sector has been moving up the rankings driven by key financials.Recognising the Company's financial performance FDS has been highlighted as a Moverand Shaker' on the following key financial parameters:
- Cash Rich Company with Cash & Equivalents at 158.58% of Total Assets
- Maximised Shareholder Returns with Return on Net Worth (63.12%)
- Capital Efficiency with a high Return on Capital Employed (160.76%)
The Company is ranked ahead on established names cutting across multiple sectorshighlighting the Management's commitment to deliver excellence year after year.
RISKS AND CONCERNS
This section lists forward-looking statements that involve risks and uncertainties. Ouractual results could differ materially from those anticipated in these statements as aresult of certain factors.
A part of business is substantially dependent on the prevailing domestic economicconditions. Factors that may adversely affect India's economic growth that could affectthe demand for IT products & services from the public sector include slowdown in therate of implementation of digitization progams inflation changes in tax trade fiscaland monetary policies scarcity of credit etc. Our revenues are highly dependent onGovernment E-governance projects as well as on clients concentrated in certainindustries. An economic slowdown or other factors that affect the economic health of thenation or those industries or any other impact on the growth of such industries mayaffect our business.
This risk arises from more players wanting a share in the same pie. Like in most otherindustries opportunity brings with itself competition. We face different levels ofcompetition in each sector from domestic as well as multinational companies. Intensecompetition in the market for technology services could affect our pricing which couldreduce our share of business from clients and decrease our revenues. However FDS hasestablished strong brand goodwill in the market and a strong foothold in a wide spectrumIT & ICT projects and services. We have built a strong relationship with key industryparticipants and as a result are able to obtain competitive commercial terms andoperational advantages. We also counter this risk with the quality of our products ourcustomer-centric approach and our ability to innovate customer specific solutionsfocusing on pricing and aggressive marketing strategy disciplined and time bound orderexecutions coupled with prudent financial and human resources management and bettercontrol over costs. Thus we do not expect to be significantly affected by this risk.
Our engagements with customers are typically singular in nature and do not necessarilyprovide for subsequent engagements. Our business will suffer if we fail to anticipate anddevelop new services and enhance existing services in order to keep pace with rapidchanges in technology and in the industries on which we focus. Disruptions intelecommunications system failures or virus attacks could negatively impact ouroperations and ability to provide our services and solutions which could result in clientdissatisfaction and a reduction in our revenues. A large part of our revenues is dependenton our top clients and the loss of any one of our major clients could significantly impactour
Given the projected growth in the Indian economy it is estimated that demand for ourservices will continue to rise steadily. The Company is further reducing its dependence onlocal by diversifying the sectors we cater to. Thus we believe we have adequatemitigation in place for trade risk.
If we are unable to obtain required approvals and licenses in a timely manner ourbusiness and operations may be adversely affected. We require certain approvals licensesregistrations and permissions for execution of projects as per contract stipulations. Wemay encounter delays in obtaining these requisite approvals or may not be able to obtainsuch approvals at all which may have an adverse effect on our revenues. However theGovernment has come up with a number of initiatives to boost the sector. As all industrypredictions suggest that this will be the trend in the future as well and given our ownexperience in obtaining such permissions we do not expect this risk to affect usmaterially in the coming years.
This risk refers to our liability arising from any damage to products equipment plant& machinery life and third parties which may adversely affect our business. We may beliable to our clients for damages caused by the disclosure of confidential informationsystem failures errors or unsatisfactory performance of services. We may be the subjectof litigation which if adversely determined could harm our business. The Companyattempts to mitigate this risk through contractual obligations and insurance policies.
The Company has undertaken number of projects in the last year and several more are inthe pipeline. Contracts are often conditioned upon our performance which ifunsatisfactory could result in lower revenues than previously anticipated. Some of ourlong-term client contracts contain benchmarking provisions which if triggered couldresult in lower future revenues and profitability under the contract. Our increasing workwith governmental agencies may expose us to additional risks. Any delay in projectimplementation can impact revenue and profit for that period. Our implementation schedulesare in line with the plans. Emergency and contingency plans are in place to prevent orminimize business interruptions. Therefore we do not expect this risk to affect usmaterially in the future. Concerns such as an unfavourable tax structure infrastructurebottle-necks retaining talent and unprecedented natural and man-made disasters andpolitical/social turmoil which may affect our business remain. However these are threatsfaced by the entire industry. With superior methodologies and improved processes andsystems the Company is well positioned to lead a high growth path.
OPPORTUNITIES & THREATS
The Government has announced major initiatives to promote IT and ITeS sector in India.
The Government of Gujarat has signed 89 MoUs worth Rs 16000 crore (USD 2.3billion) in the IT sector during Vibrant Gujarat Global Summit-2017.
The Railway Ministry plans to give a digital push to the India Railways byintroducing bar-coded tickets Global Positioning System (GPS) based information systemsinside coaches integration of all facilities dealing with ticketing issues Wi-Fifacilities at the stations super-fast long-route train service for unreserved passengersamong other developments which will help to increase the passenger traffic.
Government of India is planning to develop five incubation centres for IoTstart-ups as a part of Prime Minister Mr. Narendra Modi's Digital India and Startup Indiacampaign with at least two centres to be set up in rural areas to develop solutions forsmart agriculture.
The Government of India has launched the Digital India programme to provideseveral government services to the people using IT and to integrate the governmentdepartments and the people of India. The adoption of key technologies across sectorsspurred by the 'Digital India Initiative' could help boost India's Gross Domestic Product(GDP) by USD 550 billion to USD 1 trillion by 2025.
India and the US have agreed to jointly explore opportunities for collaborationon implementing India's ambitious Rs 1.13 trillion (USD 16.58 billion) Digital IndiaInitiative'.
We are confident that we can successfully procure and execute projects in a timelyfashion as we have made adequate provisions to cover risks arising from our businessactivities. However there are concerns such as a downturn in economic activity change inthe government's technology and digital policy cancellation and delay in contractsnonadherence to contract clauses by counter parties which may have a negative impact onour line of business which is beyond our immediate control.
INTERNAL CONTROL SYSTEMS AND ADEQUACY
Your Company have sufficient mechanism to ensure the effectiveness of the internalcontrol system and their adequacy pertaining to financial reporting have disclosed to theauditors and the audit committee deficiencies in the design or operation of such internalcontrols if any of which they are aware and the steps they have taken or propose to taketo rectify these deficiencies. No significant change in internal control over financialreporting including accounting policies during the year under reference and that the samehave been disclosed in the notes to the financial statements; Your Company had notencountered or been aware of any instance during the year of significant fraud of whichhave become aware and the involvement therein if any of the management or an employeehaving a significant role in the company's internal control system over financialreporting.
The Company's HR philosophy is to establish and build a high performing organizationwhere each individual is motivated to perform to the fullest capacity to contribute todeveloping and achieving individual excellence and departmental objectives andcontinuously improve performance to realize the full potential of our personnel.
During the year your Company has witnessed significant expansion of business operationto build capabilities and align it with the strategy for future growth. The Company'soperations are being handled by qualified and competent personnel. Our success dependslargely upon our highly-skilled technology professionals and our ability to hire attractmotivate retain and train these personnel. The Company continued with its intensivetraining and development efforts to promote and develop a talent pipeline for theindustry. Effective HRM is vital for the attainment of the Company's goals. The Companybelieves that employees are the heart of organization and they constitute the primarysource of sustainable competitive advantage. Relations among all the employees of theCompany remained cordial and harmonious.
As on March 312017 the Company had a workforce of 2170 people on rolls.
IT/ITES sector is one of the fastest growing sectors in the country and the governmenthas taken various initiatives to promote further investments in the sector. Programs suchas Digital India Smart Cities BharatNet e-governance etc. are putting technology at thecore of policy measures and catalysing growth for infrastructure services user-supportservices and more integrated solutions.
This has been very encouraging for our industry. Your Company is focused towardsreshaping portfolios to address changing market dynamics and achieving the strategicobjectives. To make our overseas presence more impactful we will continue to enhance ourinvestments in order to achieve a market leading position. Your Company is focused onstrengthening infrastructure improving operational excellence implementing bestpractices and enhancing network productivity.
The focus of the Company is to continue to deliver value to our clients; to contributeto the drive of the nation; give career & growth opportunities to our employees andgrow profitability ultimately leading to maximization of shareholder value & return.
The financial statements have been prepared in compliance with the requirements of theCompanies Act 2013 and Generally Accepted Accounting Principles in India. Please referDirectors' Report in this respect.
STATE OF COMPANY'S AFFAIRS
M/s. FOURTH DIMENSION SOLUTIONS LIMITED
Your company is a CMMI level 5 company managed by experienced IT Marketing andAdministration Professionals. Your Company engaged in the business of IT and ITes relatedproducts and services.
Your company also empanelled in the various E-governance activities of CentralGovernment and State Government. Your company expanding its business activities in verywide and diversified area i.e.:
IT Infrastructure Solutions & Services
? IT facilities management services
? e-governance activities
? AMC Services
? Data digitalization
? Professional Services entry level and high skilled resources in differenttechnologies
? Implementation of configuration services for computing and network pieces
? Network & Security Optimization
? Server & Storage Consolidation
IT Procurement Service
? Hardware and Software
? IT-Products-sales support & service
? Project and program management
? Printing Solution
? Manpower Outsourcing
? Document & Records Management Services
? Internet and web marketing
? Front & Back Office Operations
Business Segment Overview
Our business comprises of the IT Services and IT Products segments.
Product Wise Performance Our Business:
FDSL acknowledge itself for innovative approach delivering IT management support& consultancy services includes Operation Infrastructure Management and TechnologiesSolution Services. We provide value to our customers by innovation accomplishment trustand long-term relationship through our unique service portfolio
and expertise. We are a group of highly talented people and absorb all problems andconvert into meaningful solutions to meet business requirements of clients.
What We Do
Switching and Routing
Data centre Build up and consulting
Storage and Server Consolidation
Internet and Data Security
IT Infrastructure Services
IT Facilities Management Services
Professional Services Entry level and higher skilled resources in differentTechnologies
Implementation of configuration services for Computing and Network pieces
Voice data video safety and security
Documents & Record Management
Document Life Cycle Management
Front and back office operation
As per the applicable provisions of Schedule V of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 a detailed Corporate Governance Report hasbeen given in this Report is annexed as Annexure V. A certificate from auditors confirmingcompliance with the conditions of Corporate Governance as stipulated under Schedule V ofthe SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 is annexed asAnnexure VI.
Good Governance & Management Practices
At FDSL Corporate Governance is more than just adherence to the Statutory &Regulatory requirements. It is equally about focusing on voluntary practices that underliethe highest levels of transparency & propriety.
DEPRICIATION AND AMORTIZATION
The Company had followed WDV method on its assets the rates prescribed under the Part Cof the Schedule II of the Companies Act 2013 Intangible fixed assets stated at cost lessaccumulated amount of amortization.
The Company has a vigil mechanism for Directors and Employees to report their concernsabout unethical behavior actual or suspected fraud or violation of the company's Code ofConduct. The mechanism provides for adequate safeguards against victimization of Directorsand employees who avail the mechanism. In exceptional cases Directors and employees havedirect access to the Chairman of the Audit Committee. However your Company being listed onSME Exchange - "NSE Emerge" is exempt under Regulation 22 of the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015
EVALUATION OF THE BOARD'S PERFORMANCE
In compliance with the Companies Act 2013 and Regulation 17(10) of SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 Your Company being listed onSME Exchange - "NSE Emerge" is exempt under Regulation 17(10) of the SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015.
RISK MANAGEMENT POLICY
The Company has business Risk Management framework to identify and evaluate businessrisks and opportunities. This framework seeks to create transparency minimize adverseimpact on its business objectives and enhance its competitive advantage. It defines therisk management approach across the Company and its subsidiary at various levels includingthe documentation and reporting. During the period under review the Company has notidentified any element of risk which may threaten its existence or are very minimal.
Your Company promote and adhere the highest level of ethical standards in the businesstransactions. The SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015mandated the formulation of certain policies for all listed companies. All our corporategovernance policies are available on our website (http://fdsindia.co.in/policies.html).The policies are reviewed periodically by the Board and updated based on need and newcompliance requirement.
DEMATERIALISATION OF SHARES
The shares of your Company are being traded in electronic form and the Company hasestablished connectivity with both the depositories i.e. National Securities DepositoryLimited (NSDL) and Central Depository Services (India) Limited (CDSL). In view of thenumerous advantages offered by the Depository system Members are requested to avail thefacility of dematerialization of shares with either of the Depositories as aforesaid. Ason March 312017 100.00% of the share capital stands dematerialized.
The equity shares of your Company are listed with the National Stock Exchange - SMEPlatform "EMERGE".
COMPANY CODE OF PRACTICES AND PROCEDURES FOR FAIR DISCLOSURE OF UNPUBLISHED PRICESENSITIVE INFORMATION (UPSI)
The Board of Directors has adopted the Insider Trading Policy in accordance with therequirements of the SEBI (Prohibition of Insider Trading) Regulation 2015. The InsiderTrading Policy of the Company lays down guidelines and procedures to be followed anddisclosures to be made while dealing with shares of the Company as well as theconsequences of violation. The policy has been formulated to regulate monitor and ensurereporting of deals by employees and to maintain the highest ethical standards of dealingin Company securities.
The Insider Trading Policy of the Company covering code of practices and procedures forfair disclosure of unpublished price sensitive information (UPSI) is available on ourwebsite (http://fdsindia.co.in/beta/docs/Regulation_8(Annexure%20 I)pdf)
CORPORATE SOCIAL RESPONSIBILITY
The Contribution of your Company during the year under Corporate Social Responsibility(CSR) initiatives is through a NGO "Presidium Educational & CharitableTrust" (PECT) registered Trust under the Trust Act 1882 vide Registration No. 56 andis established on 16th January 2012. Your Company is supporting the Projects"Education for All" of PECT on promoting education art and culture and ruraldevelopment projects. PECT through its project "Education for All" isconstructing building and proving better infra for the education of children in GurgaonHaryana and Ghaziabad U.P. for better and advance education. The Project "Educationfor All" total outlay budget is Rs. 300000000/- and amount spent on the project isRs. 115000000/- and Cumulative Expenditure up to the reporting period is Rs.150000000/-
As per the Companies Act 2013 all companies having a net worth of Rs. 500 crore ormore or a turnover of Rs. 1000 crore or more or a net profit of Rs. 5 crore or moreduring any financial year are required to constitute a CSR committee of the Board ofDirectors comprising three or more directors at least one of whom should be anindependent director. All such companies are required to spend at least 2% of the averagenet profits of their three immediately preceding financial years on CSR-relatedactivities.
Composition of Corporate Social Responsibility Committee
Mrs. Namita Mukherjee
Mr. Amalendu Mukherjee
Mr. Prashant Kumar Gupta
Accordingly the Company was required to spend Rs. 3650000/- towards CSR activitiesthe requirement of fund on Project "Education for All" of PECT is in phasemanner and during the year under review the Company had contributed Rs. 2000000/- onProject "Education for All" under activities as specified in Schedule VII of theCompanies Act 2013. At the consolidated level the total expenditure on CSR activitiesas specified in Schedule VII of the Companies Act 2013 was Rs. 2000000/-. Theremaining amount will be spent in the next year. The annual report on our CSR activitiesis appended as Annexure VIII to the Board's report.
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITIONAND REDRESSAL) ACT 2013
The Company has in place a Sexual Harassment of woman at workplace (PreventionProhibition and Redressal) Policy in line with the requirements of The Sexual Harassmentof Women at the Workplace (Prevention Prohibition and Redressal) Act 2013. InternalComplaints Committee (ICC) has been set up at location/offices where the Company operatesto redress complaints received regarding sexual harassment. All person includingorganizational non organizational (permanent contractual temporary trainees) arecovered under this policy.
Report of the committee in respect of Complaints received during the year under theyear under the Prevention of Sexual Harassment at the Workplace Act 2013 and Rules framedthere under as per Section 21 of the Act:
Annual Report for the year under Section 21 of Prevention of Sexual Harassment at theWorkplace Act of 2013.
|a. No. of Complaints received during the year: ||NIL |
|b. No. of Complaints disposed off during the year: ||NIL |
|c. No. of Cases pending for more than 90 days: ||NIL |
AWARD AND RECOGNISITIONS
Your Company's strives to focus on customer delight and commitment towards customersatisfaction resulting in the few award and recognition recorded and received by yourCompany.
|SN AWARD AND RECOGNISITIONS ||DATE |
|1 Your Company received certificate of ISO/IEC 20000-1:2011 vide Certificate No.: GACB1840 ||12.11.2014 |
|2 Your Company received certificate from NSICL in relation to the Government Purchase Enlistment Certificate vide Registration No.: NSIC/GP/DEL/2014/0008386 ||29.10.2014 |
|3 Your Company received certificate of registration as CMMI-DEV V.1.3 Maturity Level 5 vide Registration No.: QSA-1502373 ||07.02.2015 |
|4 Your Company received certificate of ISO 14001:2015 vide Certificate No.: 1617/EMS/ CCXIX ||13.07.2016 |
|5 Your Company received certificate of ISO 27001:2013 vide Certificate No.: 1617/ISMS/ CCXVII ||13.07.2016 |
|6 "Honour of Excellence" Award for significant contribution to India's self-reliance at the National Conference on Defence Production: Self Reliance and Beyond at New Delhi ||14.12.2016 |
|7 India Industry Trendsetter Award 2016 by the Power brand Global London International forum of Equality at the KIA Oval UK ||17.05.2017 |
|8 Your Company received certificate of ISO 9001:2015 vide Certificate No.: 17DQBU19 ||19.07.2017 |
|9 The Company has been ranked 66 among THE NEXT 500 India's Top midsize Companies by Fortune India Magazine and ranked 1 in Infotech Segment Companies. ||20.07.2017 |
Your Company is committed to the principle of good Corporate Governance practices andit conducts its business and deals with its stakeholders in the same way. Your Company'sCorporate Governance practices are aimed at having systems and procedures that ensuretransparency accountability and integrity which maintain an appropriate balance betweenthe Directors and the Management. These practices include timely and accurate disclosureof information regarding the operational and financial performance of the Company to notonly the investors but also your Company's customers creditors employees and thesociety at large. Your Company strongly believes that adhering to such a high level ofcorporate governance practices go a long way in establishing the credibility of theCompany and create significant long term value for all its stakeholders.
DIRECTORS' RESPONSIBILITY STATEMENT
In accordance with the provisions of Section 134(3) (c) of the Companies Act 2013 theBoard of Directors affirm:-
a) that in the preparation of the annual accounts the applicable accounting standardshad been followed along with the proper explanation relating to material departure;
b) 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 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 the Act for safeguarding the assets of the Companyand for preventing and detecting fraud and other irregularities;
d) the directors had prepared the Annual Accounts 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.
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.
The Chairman proposed to the Board of Directors that the Auditors of the Company M/s.Sain Kanwar & Associates Chartered Accountants (Firm Registration No. 018023N) wouldretire at the conclusion of the forthcoming Annual General Meeting of the Company and thatthe said firm of Statutory Auditors has confirmed that if reappointed their appointmentwill be within the limits of Section 139 and 141 of the Companies Act 2013. He furtherproposed that the members of the Company in their meeting should make the appointment ofthe auditors. The Board discussed and recommended the appointment of M/s. Sain Kanwar& Associates Chartered Accountants (Firm Registration No. 018023N) as Auditors ofthe to hold office from the conclusion of this Annual General Meeting (AGM) till theconclusion of the Eleventh Annual General Meeting of the Company to be held in the year2022 and fixation of their remuneration by the shareholders at the forthcoming AnnualGeneral Meeting.
The Auditors' Report for fiscal 2017 does not contain any qualification reservation oradverse remark. The Auditors' Report is enclosed with the financial statements in thisAnnual Report.
M/s. Atiuttam Singh & Associates Practicing Company Secretaries were appointed toconduct the secretarial audit of the Company for the financial year 2016-17 as requiredunder section 204 of the Companies Act 2013 and the rules thereunder. The secretarialaudit report for the financial year 2016-17 forms the part of the Annual Report asAnnexure IV to the Board Report. The Secretarial Audit report does not contain anyqualification reservation or adverse remark.
The Board has appointed M/s. Atiuttam Singh & Associates Practising CompanySecretaries as Secretarial Auditor of the Company for fiscal 2018.
AUDITOR CERTIFICATE ON CORPORATE GOVERNANCE
As required by SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 the auditors' certificate on Corporate Governance is enclosed as Annexure VI to theBoard's report. The auditors' certificate for Financial Year 2016-17 does not contain anyqualification reservation or adverse remark.
The Cost Audit is not applicable to your Company.
ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO FINANCIAL STATEMENTS
The Company has in place adequate internal financial controls with reference tofinancial statements. The Board has adopted policies and procedures for ensuring theorderly and efficient conduct of its business including adherence to the Company'spolicies the safeguarding of its assets the prevention and detection of frauds anderrors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial disclosures.
During the year under review such controls were tested and no reportable materialweakness in the design or operation were observed.
DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS COURTS ANDTRIBUNALS
No significant and material order has been passed by the regulators courts tribunalsimpacting the going concern status and Company's operations in future.
PARTICULARS OF LOANS GUARANTEES SECURITIES OR INVESTMENTS UNDER SECTION 186
During the year your Company not provided loans and Investments as prescribed undersection 186 of Companies Act 2013 and Rules made thereunder.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
During the financial year under review no contract or arrangements were entered into bythe Company with related parties referred to in sub-section (1) of Section 188 of theCompanies Act and Regulation 23 of the SEBI (Listing Obligations Disclosure Requirements)Regulations 2015. Form AOC-2 attached with the Board's Report as Annexure III.
PARTICULARS OF EMPLOYEES
The ratio of remuneration of each director to the median of employees' remuneration asper Section 197(12) of the Companies Act 2013 read with Rule 5(1) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 forms part of theBoard's report (Annexure VII).
A statement containing the names of every employee posted in India throughout thefinancial year and in receipt of a remuneration of Rs. 1 crore and 2 lakh or more orposted for part of the year and in receipt of Rs. 8.5 lakh or more a month under Rule5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014forms part of the Board's Report (Annexure VII). The details of employees posted outsideIndia can be made available on request.
In view of the tribute to the Mother Nature we are publishing only the statutorydisclosures in the printed version of the Annual Report. Electronic Copy of the AnnualReport 2016-17 and Notice of the 6th Annual General Meeting are sent to the members whoseemail address are registered with the Company/ Depository Participant(s). For the memberswho have not registered their email address physical copies are sent in the permittedmode.
Your Directors place on record their appreciation for the contributions made byemployees towards the success of your Company. Your Directors gratefully acknowledge theco-operation and support received from the shareholders customers vendors bankersregulatory and Governmental authorities.
| || |
For and on Behalf of the Board of Directors
| ||Sd/- ||Sd/- |
| ||Amalendu Mukherjee ||Namita Mukherjee |
|Date:19.08.2017 ||Managing Director ||Director |
|Place: New Delhi ||DIN:03544485 ||DIN:06561265 |