To the Members
The Directors have pleasure in presenting before you the 22nd Directors Report of theCompany together with the Audited Statements of Accounts for the year ended March 312020. The Company's performance is summarized below:
1. Financial Summary/Highlights Operations State of Affairs: The performance duringthe period ended March 31 2020
(Amount In Rs.)
|Particulars ||2019-20 ||2018-19 |
|Turnover/Income (Gross) ||350590 ||303000 |
|Other Income ||2130 ||-- |
|Profit/loss before Depreciation Finance Costs ||(608145) ||(197453) |
|Exceptional items and Tax Expense || || |
|Less: Depreciation/ Amortisation/ Impairment ||73969 ||89226 |
|Profit /loss before Finance Costs Exceptional items and Tax Expense ||(682114) ||(286679) |
|Less: Finance Costs ||-- ||-- |
|Profit /loss before Exceptional items and ||(682114) ||(286679) |
|Tax Expense || || |
|Add/(less): Exceptional items ||-- ||-- |
|Profit /loss before Tax Expense ||(682114) ||(286679) |
|Less: Tax Expense (Current & Deferred) ||-- ||-- |
|Profit /loss for the year (1) ||(682114) ||(286679) |
|Total Comprehensive Income/loss (2) ||-- ||-- |
|Total (1+2) ||(682114) ||(286679) |
|Balance of profit /loss for earlier years ||(35531437) ||(35244758) |
|Less: Transfer to Debenture Redemption Reserve ||-- ||-- |
|Less: Transfer to Reserves ||-- ||-- |
|Less: Dividend paid on Equity Shares ||-- ||-- |
|Less: Dividend paid on Preference Shares ||-- ||-- |
|Less: Dividend Distribution Tax ||-- ||-- |
|Balance carried forward ||-- ||-- |
2. Review of operations:
During the year under review the Company has recorded an income of Rs.350590/- andloss of Rs. (682114) as against the income of Rs.303000/- and loss of Rs.(286679/-)in the previous financial year ending 31.03.2019.
COVID-19 and its impact
The impact of COVID-19 on the Company is being closely reviewed with the Management bythe Directors from time to time. Your Company had temporarily suspended operations as perthe directives given by the Central and State Government and keeping in view the safety ofemployees.
Keeping the Company's revival plans in mind your Directors have decided not torecommend dividend for the year.
4. Transfer to reserves:
Pursuant to provisions of Section 134 (3) (j) of the Companies Act 2013 the companyhas not proposed to transfer any amount to general reserves account of the company duringthe year under review.
5. Material changes & commitment affecting the financial position of thecompany:
There have been no material changes and commitments affecting the financial position ofthe Company which have occurred during the end of the Financial Year of the Company towhich the financial statements relate and the date of the report.
6. Significant & material orders passed by the regulators or courts ortribunals:
No significant or material orders have been passed against the Company by theRegulators Courts or Tribunals which impacts the going concern status and company'soperations in future.
7. Transfer of un-claimed dividend to Investor Education and Protection:
There is no such amount of Un-paid or Unclaimed Dividend be transferred to Investor andEducation and Protection Fund for the financial year ended 31st March 2020.
8. Revision of financial statements:
There was no revision of the financial statements for the year under review.
9. Change in the nature of business if any:
During the period under review and the date of Board's Report there was no change inthe nature of Business.
10. Deposits from public:
The Company has not accepted any public deposits during the Financial Year ended March31 2020 and as such no amount of principal or interest on public deposits wasoutstanding as on the date of the balance sheet.
Details of deposits not in compliance with the requirements of the Act:
Since the Company has not accepted any deposits during the Financial Year ended March31 2020 there has been no non-compliance with the requirements of the Act.
Pursuant to the Ministry of Corporate Affairs (MCA) notification dated January 22 2019amending the Companies (Acceptance of Deposits) Rules 2014 the Company is required tofile with the Registrar of Companies (ROC) requisite returns in Form DPT-3 for outstandingreceipt of money/loan by the Company which is not considered as deposits.
The Company complied with this requirement within the prescribed timelines.
11. Depository System:
SEBI (Listing Obligations & Disclosure Requirements) Regulations 2015 mandate thatthe transfer except transmission and transposition of securities shall be carried out indematerialized form only with effect from 1st April 2019. In view of the numerousadvantages offered by the Depository system as well as to avoid frauds members holdingshares in physical mode are advised to avail of the facility of dematerialization fromeither of the depositories. The Company has directly as well as through its RTA sentintimation to shareholders who are holding shares in physical form advising them to getthe shares dematerialized.
12. Number of meetings of the board:
During the year Six (6) meetings of the Board of Directors of the Company wereconvened and held in accordance with the provisions of the Act. The date(s) of the BoardMeeting attendance by the directors are given in the Corporate Governance Report formingan integral part of this report.
13. Directors and key managerial personnel:
As on date of this report the Company has Five Directors out of those three areIndependent Directors including one Woman Independent Director.
Pursuant to provisions of Section 152 of the Companies Act 2013 read with theCompanies (Appointment and Qualification of Directors) Rules 2014 Mr. T. SrivenkataRamana (DIN 03195303) is liable to retire by rotation at the ensuing 22nd Annual GeneralMeeting and being eligible offers himself for re-appointment to the office of Director.
a) Appointment/ Re-Appointment of Independent Directors of the Company:
(i) Mr.Srinivas Nekkante was appointed as the additional director and independentdirector of the Company on 30th August 2019 by the board of directors in their meetingand further approved by the shareholders in their meeting held on September 28 2019.
b) Resignation of Directors:
(i) Mr.N. Mallikarjuna Reddy Independent Director of the Company resigned w.e.f.August 30 2019 due to preoccupation with certain professional Responsibilities andpersonal commitments and he further confirmed in his resignation letter dated August 302019 that there were no other material reasons for his resignation other than thosementioned above.
(ii) Mr. K Sudheer Independent Director of the Company resigned w.e.f. April 25 2019due to preoccupation with certain professional Responsibilities and personal commitmentsand he further confirmed in his resignation letter dated April 25 2019 that there were noother material reasons for his resignation other than those mentioned above.
c) Key Managerial Personnel:
Key Managerial Personnel for the financial year 2019-20
Mr. C. N. Somasekhar Reddy Managing Director of the company.
Mr. T. Srivenkata Ramana Whole Time Director cum CFO of the company.
Mrs. Kavya Girish Chandwani Company Secretary & Compliance Officer of theCompany.
During the year under review Ms. Kavya Girish Chandwani was appointed as the CompanySecretary of the Company with effect from June 01 2019.
14. Corporate governance:
Corporate Governance is not applicable to the company since the paid up capital and networth of the company is less than Rs.10.00 crores and Rs.25.00 crores respectively.However the company voluntarily provides a separate section in the Annual Report titled"Report on Corporate Governance" along with the Auditors' Certificate onCorporate Governance as stipulated under Regulation 34 read with Schedule V of Securitiesand Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations2015.
15. Management discussion and analysis report:
Management discussion and analysis report for the year under review as stipulated underRegulation 34(2)(e) read with schedule V Part B of SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 is presented in a separate section forming partof the annual report.
16. Board evaluation:
Performance Evaluation of the Board its Committees and Individual Directors Pursuantto applicable provisions of the Companies Act 2013 and the Listing Regulations theBoard in consultation with its Nomination & Remuneration Committee has formulated aframework containing inter-alia the criteria for performance evaluation of the entireBoard of the Company its Committees and individual Directors including IndependentDirectors. The framework is monitored reviewed and updated by the Board in consultationwith the Nomination and Remuneration Committee based on need and new compliancerequirements.
The annual performance evaluation of the Board its Committees and each Director hasbeen carried out for the financial year 2019-20 in accordance with the framework. Thedetails of evaluation process of the Board its Committees and individual Directorsincluding Independent
Directors have been provided under the Corporate Governance Report which forms part ofthis Report.
17. Extract of annual return:
Pursuant to Section 92(3) of the Companies Act 2013 and Rule 12(1) of the Companies(Management and Administration) Rules 2014 an extract of Annual Return in form MGT 9 isannexed herewith as Annexure I' to this report and the same is uploaded on thewebsite of the Company and the web link is www.fgisindia.com.
18. Authorised and paid up capital of the company:
The authorized capital of the company stands at 129500000/- divided into 12950000equity shares of Rs.10/- each and The company's paid up capital at 35500000 dividedinto 3550000 equity shares of Rs.10/- each.
19. Information about the financial performance / financial position of thesubsidiaries / associates:
The company does not have any subsidiaries/Associate companies.
20. Declaration of independence:
The Company has received declarations from all the Independent Directors of the Companyconfirming that they meet with criteria of independence as prescribed both undersub-section (6) of Section 149 of the Companies Act 2013 and under Regulation 16(1)(b)read with Regulation 25 of the Listing Regulations.
The Independent Directors have also confirmed that they have complied with Schedule IVof the Act and the Company's Code of Conduct.
In terms of Regulations 25(8) of the Listing Regulations the Independent Directorshave confirmed that they are not aware of any circumstance or situation which exists ormay be reasonably anticipated that could impair or impact their ability to dischargetheir duties with an objective independent judgement and without any external influence.
During the year Independent Directors of the Company had no pecuniary relationship ortransactions with the Company other than sitting fees commission and reimbursement ofexpenses incurred by them for the purpose of attending meetings of the Board of Directorsand Committee(s).
21. Director's responsibility statement:
In pursuance of section 134 (5) of the Companies Act 2013 the Directors herebyconfirm that:
a) In the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures;
b) The Directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the company at the end of the financial year and ofthe profit and loss of the company for that period;
c) The Directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the company and for preventing and detecting fraud and other irregularities;
d) The Directors had prepared the annual accounts on a going concern basis; and
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.
22. Internal auditors:
The company has not appointed internal auditor during the financial year 2019-20.
23. Statutory audit and auditors report:
The Shareholders in their meeting held on September 28 2019 (21st AGM) appointed M/s.NSVR & Associates. Chartered Accountants Hyderabad as the Statutory Auditors of theCompany to hold office as such till the conclusion of 23rd Annual General Meeting.
The Statutory Auditors shall continue to hold the office as such for the ensuing FY.
The Auditors' Report for fiscal 2020 does not contain any qualification reservation oradverse remark. The Auditors' Report is enclosed with the financial statements in thisAnnual Report. The Company has received audit report with unmodified opinion forstandalone audited financial results of the Company for the Financial Year ended March 312020 from the statutory auditors of the Company.
The Auditors have confirmed that they have subjected themselves to the peer reviewprocess of Institute of Chartered Accountants of India (ICAI) and hold valid certificateissued by the Peer Review Board of the ICAI.
24. Secretarial Auditor & Audit Report:
In terms of section 204 of the Companies Act 2013 read with the Companies (Appointmentand Remuneration of Managerial Personnel) Rules 2014 based upon the recommendations ofthe Audit Committee the Board of Directors had appointed M/s. Sathwik & AssociatesPracticing Company Secretaries (CP No. 16937) as the Secretarial Auditor of the Companyfor conducting the Secretarial Audit for financial year ended March 31 2019.
The Secretarial Audit was carried out by M/s. Sathwik & Associates CompanySecretaries (CP No. 16937) for the financial year ended March 31 2019. The Report givenby the Secretarial Auditor is annexed herewith and forms integral part of this Report.
The Secretarial Audit Report does not contain any qualification reservation or adverseremark.
25. Secretarial standards:
The company is in compliance with Secretarial Standards issued by The Institute ofCompany Secretaries of India on Meetings of the Board of Directors and General Meetings.
26. No Frauds reported by statutory auditors
During the Financial Year 2019-20 the Auditors have not reported any matter undersection 143(12) of the Companies Act 2013 therefore no detail is required to bedisclosed under section 134(3) (ca) of the Companies Act 2013.
27. Declaration by the Company
The Company has issued a certificate to its Directors confirming that it has not madeany default under Section 164(2) of the Act as on March 31 2020.
28. Indian accounting standards:
The Ministry of Corporate Affairs vide its notification dated February 16 2015 hasnotified the Companies (Indian Accounting Standards) Rules 2015. In pursuance of the saidnotification the Company will adopt Indian Accounting Standards. The implementation ofIndian Accounting Standards (IAS) is a major change process for which the Company has setup a dedicated team and is providing desired resources for its completion within the timeframe. The impact of the change on adoption of said IAS is being assessed.
29. Conservation of energy technology absorption and foreign exchange outgo:
The required information as per Sec.134 of the Companies Act 2013 is providedhereunder:
A. Conservation of Energy:
Your Company's operations are not energy intensive. Adequate measures have been takento conserve energy wherever possible by using energy efficient computers and purchase ofenergy efficient equipment.
B. Technology Absorption:
1. Research and Development (R&D): NIL
2. Technology absorption adoption and innovation: NIL
C. Foreign Exchange Earnings and Out Go:
Foreign Exchange Earnings: Rs. NIL
Foreign Exchange Outgo: Rs. NIL
30. Corporate social Responsibility Policy:
Since your Company does not have net worth of Rs. 500 Crore or more or turnover of Rs.1000 Crore or more or a net profit of Rs. 5 Crore or more during the financial yearsection 135 of the Companies Act 2013 relating to Corporate Social Responsibility is notapplicable and hence the Company need not adopt any Corporate Social ResponsibilityPolicy.
31. Particulars of loans guarantees or investments:
The company has not given loans Guarantees or made any investments during the yearunder review.
32. Cost records and cost audit:
Maintenance of cost records and requirement of cost audit as prescribed under theprovisions of Section 148(1) of the Act are not applicable for the business activitiescarried out by the Company.
33. Disclosure of internal financial controls:
The Company has in place adequate internal control systems which commensurate with itssize nature of business and complexity of its operations and are designed to provide areasonable degree of assurance regarding the effectiveness and efficiency of operationsthe adequacy of safeguard for assets internal control over financial reporting andcompliance with applicable laws and regulations. Internal audit function evaluates theadequacy of and compliance with policies plans regulatory and statutory requirements.
The Internal Auditors directly report to the Board's Audit Committee thus ensuring theindependence of the process. It also evaluates and suggests improvement in effectivenessof risk management controls and governance process. The Audit committee and Boardprovides necessary oversight and directions to the Internal audit function andperiodically reviews the findings and ensures corrective measures are taken.
34. Risk management policy:
Your Company follows a comprehensive system of Risk Management. Your Company hasadopted a procedure for assessment and minimization of probable risks. It ensures that allthe risks are timely defined and mitigated in accordance with the well-structured riskmanagement process.
35. Employee relations:
Your Directors are pleased to record their sincere appreciation of the contribution bythe staff at all levels in the improved performance of the Company.
None of the employees is drawing Rs. 850000/- and above per month or Rs.10200000/-and above in aggregate per annum the limits prescribed under Section 134 of the CompaniesAct 2013.
36. Ratio of remuneration to each director:
Under section 197(12) of the Companies Act 2013 and Rule 5(1)(2) & (3) of theCompanies(Appointment & Remuneration) Rules 2014 no remuneration has been paid toany of the Directors of the Company for the financial year 2019-20.
37. Industry based disclosures as mandated by the respective laws governing thecompany:
The Company is not a NBFC Housing Companies etc. and hence Industry based disclosuresis not required.
38. Non-executive directors' compensation and disclosures:
None of the Independent / Non-Executive Directors has any pecuniary relationship ortransactions with the Company which in the Judgment of the Board may affect theindependence of the Directors.
39. Vigil mechanism:
Vigil Mechanism Policy has been established by the Company for directors and employeesto report genuine concerns pursuant to the provisions of section 177(9) & (10) of theCompanies Act 2013. The same has been placed on the website of the Company.
40. Code of Conduct for Prevention of Insider Trading :
Fourth Generation Information Systems Limited has amended the Code of Conduct forPrevention of Insider Trading in Fourth ("Code") in accordance with SEBI(Prohibition of Insider Trading) Amendment Regulations 2018 which is effective fromApril 01 2019. The amended Code is uploaded on the website of the Company. The objectiveof the Code is to protect the interest of shareholders at large to prevent misuse of anyunpublished price sensitive information and to prevent any insider trading activity bydealing in shares of the Company by its Directors Designated Persons and their immediaterelatives.
Pursuant to Section 134(3) of the Companies Act 2013 the nomination and remunerationpolicy of the Company which lays down the criteria for determining qualificationscompetencies positive attributes and independence for appointment of Directors andpolicies of the Company relating to remuneration of Directors KMP and other employees isavailable on the Company's website at www.fgisindia.com.
41. CEO/CFO Certification:
As required Regulation 17(8) read with Schedule II of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 the CEO/CFO certification is attached with theannual report.
42. Prevention of sexual harassment at workplace:
The Company has zero tolerance for sexual harassment at workplace and has adopted aPolicy on Prevention Prohibition and Redressal of Sexual Harassment at workplace.
This is in line with provisions of the Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013 (POSH Act') and the Rules madethereunder. With the objective of providing a safe working environment all employees(permanent contractual temporary trainees) are covered under this Policy. The policy isavailable on the website at www.fgisindia.com.
As per the requirement of the POSH Act and Rules made thereunder the Company hasconstituted an Internal Committee at all its locations known as the Prevention of SexualHarassment (POSH) Committees to inquire and redress complaints received regarding sexualharassment.
During the year under review there were no Complaints pertaining to sexual harassment.
43. Green Initiatives:
The Ministry of Corporate Affairs (MCA) has undertaken green initiative in CorporateGovernance by allowing paperless compliances by the Companies and permitted the service ofAnnual Reports and documents to the shareholders through electronic mode subject tocertain conditions and the Company continues to send Annual Reports and othercommunications in electronic mode to the members who have registered their email addresseswith the Company/RTA.
44. Other Disclosures:
Your Directors state that no disclosure or reporting is required in respect of thefollowing items as there were no transactions on these items during the year under review:
a. Issue of equity shares with differential rights as to dividend voting or otherwise.
b. Issue of shares (including sweat equity shares) to employees of the
Company under any scheme referred to in this Report.
c. Neither the Managing Director nor the Whole-time Directors of the
Company receive any remuneration or commission from any of its subsidiaries.
45. Appreciation & acknowledgement:
Your Directors place on record their appreciation for the overwhelming co-operation andassistance received from the investors customers business associates bankers vendorsas well as regulatory and governmental authorities. Your Directors also thanks theemployees at all levels who through their dedication co-operation support and smartwork have enabled the company to achieve a moderate growth and is determined to poise arapid and remarkable growth in the year to come.
| ||By order of the Board of Directors |
| ||For Fourth Generation |
| ||Information Systems Limited |
| ||Sd/- |
| ||C. N. Somasekhara Reddy |
|Place: Hyderabad ||Managing Director |
|Date: 29.08.2020 ||DIN: 02441810 |