To the Members
The Directors have pleasure in presenting before you the 20 Directors Report of theCompany together with the Audited Statements of Accounts for the year ended 31 March2018. The Company's performance is summarized below:
1. FINANCIAL SUMMARY/HIGHLIGHTS OPERATIONS STATE OF AFFAIRS:
The performance during the period ended 31st March 2018 has been as under:
| || ||(Amount In Rs.) |
|Particulars ||2017-2018 ||2016-2017 |
|Turnover/Income (Gross) ||450099 ||- |
|Profit before Finance charges ||(128450) ||(346708) |
|Depreciation and Taxation || || |
|Less: Finance charges (excluding amount capitalized) ||-- ||-- |
|Profit before Depreciation and Taxation ||(128450) ||(346708) |
|Less : Depreciation ||110954 ||142855 |
|Profit for the year after Depreciation ||(239404) ||(489563) |
|Less : Provision for taxation ||-- ||-- |
|Less : Deferred tax ||-- ||-- |
|Profit after Tax ||(239404) ||(489563) |
2. REVIEW OF OPERATIONS:
During the year under review the Company has recorded an income of Rs. 450099/- andloss of Rs. 239404 as against the income of Rs. nil and loss of Rs.489563/- in theprevious financial year ending 31.03.2017.
3. 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.
4. DEPOSITS FROM PUBLIC:
The Company has not accepted any deposits from public and as such no amount on accountof principal or interest on deposits from public was outstanding as on the date of thebalance sheet.
5. TRANSFER TO RESERVES:
During the year under review no amount has been transferred to General Reserve.
Keeping the Company's revival plans in mind your Directors have decided not torecommend dividend for the year.
7. REVISION OF FINANCIAL STATEMENTS:
There was no revision of the financial statements for the year under review.
8. DETAILS OF SIGNIFICANT MATERIAL ORDERS PASSED BY REGULATORS COURTSTRIBUNALS IMPACTING THE GOING CONCERN BASIS OF THE COMPANY:
There were no significant material orders passed by regulators courts tribunalsimpacting the going concern basis of the Company.
9. NUMBER OF MEETINGS OF THE BOARD:
Four (4) meetings of the Board were held during the year. For details of meetings ofthe Board please refer to the Corporate Governance Report which is a part of thisreport.
10. DIRECTORS AND KEY MANAGERIAL PERSONNEL:
In accordance with the provisions of Section 152 of the Companies Act 2013 and interms of the Articles of Association of the Company Mr. T. Srivenkata Ramana(DIN:03195303) Director retires by rotation at the ensuing Annual General Meeting and beingeligible offers himself for reappointment to the Board. Pursuant to the provisions of theCompanies Act 2013 ("the Act") and Clause 49 of the erstwhile ListingAgreement Mr. K. Sudheer Mr. K. Santosh Reddy and Mr. N. Mallikarjuna Reddy wereappointed as Independent Non-Executive Directors to hold office for five consecutive yearsfor a term up to 31st March 2019 by the Members of the Company in the 16thAnnual GeneralMeeting held on 30th September 2014. They are eligible for reappointment as IndependentDirectors for another term of five consecutive years.
Pursuant to the provisions of the Act based on the recommendation of the Nominationand Remuneration Committee the Board recommends for the approval of the Members throughSpecial Resolution at the ensuing Annual General Meeting reappointment of Mr. K. SudheerMr. K. Santosh Reddy and Mr. N. Mallikarjuna Reddy as Independent Directors for anotherfive consecutive years from 1st April 2019 upto 31st March 2024.
Profile and other information of the aforesaid Directors as required under Regulation36 of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 andSecretarial Standard - 2 forms part of the notice convening the ensuing Annual GeneralMeeting.
The above proposal for re-appointment forms part of the Notice of the 20th AnnualGeneral Meeting and the relevant Resolutions are recommended for your approval therein.
11. 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.
12. MANAGEMENT DISCUSSION AND ANALYSIS REPORT:
Management discussion and analysis report for the year under review as stipulated underRegulation 4(3) read with schedule V Part B of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 with the stock exchange in India is presented in aseparate section forming part of the annual report.
13. 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 2017-18 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 Reportwhich forms part of this Report.
14. EXTRACT OF ANNUAL RETURN:
As required pursuant to section 92(3) of the Companies Act 2013 and rule 12(1) of theCompanies (Management and Administration) Rules 2014 an extract of annual return in MGT9 as a part of this Annual Report. Annexure-I
15. AUTHORISED AND PAID UP CAPITAL OF THE COMPANY:
The authorized capital of the company stands at 129500000 /- divided into12950000 equity shares of Rs.10/- each and The company's paid up capital at 35500000divided into 3550000 equity shares of ` 10/- each.
16. INFORMATION ABOUT THE FINANCIAL PERFORMANCE / FINANCIAL POSITION OF THESUBSIDIARIES / ASSOCIATES:
The company does not have any subsidiaries/Associate companies.
17. DECLARATION OF INDEPENDENCE:
All Independent Directors have given necessary declarations that they meet the criteriaof independence as laid down under Section 149(6) of the Companies Act 2013 andRegulation 16(b) of SEBI (Listing Obligations and Disclosure Requirements) Regulation2015 as amended.
18. 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.
19. INTERNAL AUDITORS:
The company has not appointed internal auditor during the financial year 2017-18
20. STATUTORY AUDITORS:
At the Annual General Meeting held on 27th September 2017 (19th AGM) the Company hasappointed M/s. Chanamolu & Co. as statutory auditors of the Company to hold officeuntil the conclusion of 24th Annual General meeting of the Company. In terms of the firstprovision to Section 139 of the Companies Act 2013 the appointment of the auditors shallbe placed for ratification at every Annual General Meeting. Accordingly the appointmentof M/s. Chanamolu & Co. Chartered Accountants as statutory auditors of the Companyis placed for ratification by the shareholders at the Annual General Meeting. The Board ofDirectors recommended their re-appointment ratification for the financial year 2018-19.The Auditors' Report for the financial year 2017-18 is enclosed with the financialstatements in this Annual Report.
21. SECRETARIAL AUDIT:
The Board had appointed M/s. Sathwik & Associates practicing Company SecretariesHyderabadhaving C.P. No 16937 to conduct Secretarial Audit for the financial year2017-18 pursuant to the provisions of Section 204 of the Companies Act 2013 andCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014. TheSecretarial Audit Report in Form MR 3 for the financial year 2017- 18 is enclosedherewith as Annexure-III to this Report.
22. 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.
23. AUDIT REPORTS:
(a) Statutory Auditors Report:
The Board has duly reviewed the Statutory Auditor's Report on the Accounts for the yearended March 31 2018 and has noted that the same does not have any reservationqualification or adverse remarks. However the Board decided to further strengthen theexisting system and procedures to meet all kinds of challenges that may occur in theindustry.
(b) Secretarial Audit Report:
The Board has duly reviewed the Secretarial Audit Report on the Compliances accordingto the provisions of section 204 of the Companies Act 2013 and noted is at the same thatthe company has not appointed company secretary and Internal Auditor during the year butthe company is taking necessary measures to appoint the same at the earliest
24. DETAILS IN RESPECT OF FRAUDS REPORTED BY AUDITORS OTHER THAN THOSE WHICH AREREPORTABLE TO THE CENTRAL GOVERNMENT:
The Statutory Auditors or Secretarial Auditors of the Company have not reported anyfrauds to the Audit Committee or to the Board of Directors under Section 143(12) of theCompanies Act 2013 including rules made thereunder.
25. INDIAN ACCOUNTING STANDARDS:
The Ministry of Corporate Affairs vide its notification dated 16th February 2015 hasnotified the Companies (Indian Accounting Standards) Rules 2015. In pursuance of the saidnotification the Company will adopt Indian Accounting Standards with effect from1stApril 2017. The implementation of Indian Accounting Standards (IAS) is a major changeprocess for which the Company has set up a dedicated team and is providing desiredresources for its completion within the time frame. The impact of the change on adoptionof said IAS is being assessed.
26. 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
27. CORPORATE SOCIAL RESPONSIBILTY 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.
28. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS:
The company has not given loans Guarantees or made any investments during the yearunder review.
29. DISCLOSURE ABOUT COST AUDIT:
Cost Audit is not applicable for the financial year 2017-18.
30. 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.
31. 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.
32. 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.
33. 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 2017-18.
34. 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.
35. 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.
36. 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
37. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTIONPROHIBITION AND REDRESSAL) ACT 2013:
The Company has in place a Sexual Harassment Policy in compliance with the requirementsof the Sexual Harassment of Women at Workplace (Prevention Prohibition and Redressal)Act 2013. The Company always endeavors to create and provide an environment that is freefrom discrimination and harassment including sexual harassment. The Internal ComplaintsCommittee (ICC) has been set up to redress complaints regarding sexual harassment if any.
The Directors further state that during the year under review there were no casesfiled pursuant to the Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013
38. 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.
| ||For and on behalf of the Board of |
| ||Fourth Generation Information Systems Limited |
| ||Sd/- ||Sd/- |
| ||T. Srivenkata Ramana ||C. N. Somasekhara Reddy |
|Place: Hyderabad ||Executive Director & CFO ||Managing Director |
|Date: 14.08.2018 ||(DIN: 03195303) ||(DIN: 02441810) |