Your Directors are happy to present the 35th Annual Report and the FinancialResults for the year ended on Bl^March 2018.
1. Financial Results: (Rs. in Lacs)
|Particulars ||2017-2018 ||2016-2017 |
|Income from operations ||179.82 ||192.91 |
|Other Income ||20.63 ||19.57 |
|Total Income ||200.18 ||212.48 |
|Total Expenditure excluding depreciation ||156.84 ||206.89 |
|Depreciation ||5.87 ||3.84 |
|Total Expenditure ||162.71 ||210.73 |
|Net Profit / (Loss) before Taxation ||37.47 ||1.75 |
|Provision for Taxation Deferred Tax ||(7.45) ||(0.32) |
| ||6.42 ||(0.67) |
|Net Profit / (Loss) after Taxation ||36.44 ||0.76 |
2. Management Discussion & Analysis (M D &A):
REVIEW OF BUSINESS & OUTLOOK
Your company remains a preferred supplier for several software requirements.Stockbrokers are showing a renewed interest in our software which is of the highestquality. Additionally ERP system for manufacturing and processing has been the focus ofthe company.
Your Company has tied up with Tradelab adding synergy to the product line ofStockroking. With this tie-up an end-to-end solution for Stockbrokers is now beingcreated - from trading to accounting to backoffice a seamless system is available.
With the African continent showing signs of growth your company is now focusing onthis area.
The mobile market in India is the second largest in the world after China and Mobileapplications developed by your company have shown great acceptance and will continue to bethe prime mover. The Global Mobile Applications market is poised to grow at a sustainedrate and the number of users of smartphones will soon cross more than half the populationof the country. A complete ERP on the Android platform has been developed and will soon bethe flagship product of your company.
Absence of skilled manpower and high cost of development and marketing are the majorimpediments to growth.
Opportunities and Threats:
Most of the mobile app market is tuned to the free app model or aps which cost betweenRs. 50 and Rs. 100. In the Commercial market place there are very few apps that are tunedto Business and Industry. A huge opportunity exists in this space.
Absence of skilled manpower high cost of development high cost of user acquisitionhyper competition driven by independent and freelance developers and the high cost ofmarketing are major impediments to growth.
With the evolution of our new mobile products we expect the market to accept ourproducts more readily and with online advertising which we have introduced the responsehas been uptothe mark.
We have made significant investments in the mobile app sphere and expect them to bearfruit within the coming few months.
The projects with UID Authority of India are working as per the expectations of theCompany and are expected to be on similar lines as the previous year.
Risk and Concerns:
1. The first major problem developed in recent times subject to added different legallaws and norms.
2. Another major problem the need to develop the optimum mix of employees. A bigdilemma is to get the balance correct in terms of recruitment.
Internal control systems and their adequacy:
The Company has a proper and adequate system of internal controls. This ensures thatall transactions are authorized recorded and reported correctly and assets aresafeguarded and protected against loss from unauthorized use or disposition. In additionthere are operational controls and fraud risk controls covering the entire spectrum ofinternal financial controls. The Company has an Internal Control System commensurate withthe size scale and complexity of its operations.
Discussion on financial performance with respect to operational performance:
During the year under review your Company made a Turnover of Rs. 200.18 Lakhs asagainst Rs. 212.48 Lakhs for the previous year and made a profit of Rs. 36.44 Lakhs asagainst profit of Rs. 0.76 Lakhs for the previous year. The Company anticipates moreprofits in the coming years.
Material development in Human Resource & Industrial Relations:
There are no significant developments in human resources and number of people employed.However all our efforts were made to retain the talent and improve the productivity.
3. Change in the nature of business
There were no changes in the nature of business of the Company during the financialyear 2017-18.
The Company has not accepted any deposits from the public during the year in pursuantto Section 73 of the Companies Act 2013.
5. Material Changes and Commitments
There are no significant material changes and commitments affecting financial positionof the company between 31stMarch 2018 and the date of this report.
6. Number of meetings of the Board
The Board of Directors met 4(Four) times during this financial year on 27thMay 2017 10thAugust 2017 17thOctober 2017 and 12thFebruary 2018.
7. 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 MGT9forms a part of this Annual Report (Annexure-I).
Members can download the Annual return form the following link http://hypersoftindia.com/assets/downloads/hyersoft-annual-return-2017-18.pdf
8. Policy on directors' appointment and remuneration
The current policy is to have an appropriate mix of executive and independent directorsto maintain the independence of the Board and they demark their functions of governanceand management. As on March 31 2018 the Board consists of 4 (four) members one of whomis executive three are non-executive and out of which two are independent directors. TheBoard periodically evaluates the need for change in its composition and size. The policyof the Company on directors' appointment and remuneration including criteria fordetermining qualifications positive attributes independence of a director and othermatters provided under Sub-Section (3) of Section 178 of the Companies Act 2013 adoptedby the Board is appended as Annexure-II to the Board's report. We affirm that theremuneration paid to the directors is as per the terms laid out in the nomination andremuneration policy of the Company.
9. Directors and Key Managerial Personnel
The following changes took place in the composition of the Board of Directors for theFinancial Year 2017-18:
1. Appointment of Mr. Premanshu Rana as Independent Director of the Company w.e.f. 10thAugust 2017.
2. Resignation of Mr. Aashay Harshe as Independent Director of the Company w.e.f. 10thAugust2017.
The following changes took place in the composition of the Board of Directors and KeyManagerial Personnel subsequent to the closure of financial year 2017-2018:
1) Resignation of Mr. Premanshu Rana as Independent Director of the Company w.e.f. 28thMay 2018.
2) Appointment of Mr. Joydip Lahiri as Additional Director (Independent) of the Companyw.e.f. 28thMay 2018.
3) Resignation of Ms. Gumpena Naga Jyothi as a Whole-time Company Secretary of theCompany w.e.f.18th July 2018.
10. Declaration given by Independent Directors:
The Company has received necessary declaration from each independent director underSection 149(7) of the Companies Act 2013 that they meet the criteria of independencelaid down in Section 149(6) of the Companies Act 2013 and SEBI (Listing Obligations andDisclosure Requirement) Regulations 2015.
11. Contracts and arrangements with Related Parties under Section 188
The Company has not entered into any contracts or arrangements with related partiesduring the financial year. Therefore Form AOC-2 is not required to be enclosed to thisreport.
12. Particulars of loans guarantees or investments under Section 186
The Company has not made any investments and has not given any loan or guarantee undersection 186 of the Companies Act 2013.
13. Risk Management
The Company has developed and implemented a risk management framework that includesidentification of elements of risk if any which in the opinion of the Board may threatenthe existence of the Company.
The following broad categories of risks to the business objectives have been consideredin our riskmanagementframework:
Strategy: Risks to the successful execution of the Company's articulatedstrategies. These originate from the choices we make on markets business mix resourcesand delivery models that can potentially impact our competitive advantage in the mediumand long term. Risks related to scalability and sustainability of our business might alsohave an impact.
Industry: Risks relating to the inherent characteristics of our industry such ascompetitive structure emergence of new business models technological landscape extentof linkage to economic environment and regulatory structure.
Counterparty: Risks arising from our association with entities for conductingbusiness. The counterparties include clients vendors alliance partners and theirrespective industries. Counterparty risks include those relating to litigation and loss ofreputation.
Resources: Risks arising from inappropriate sourcing or sub-optimal utilizationof key organizational resources such as financial capital talent and infrastructure.
Operations: Risks inherent to business operations including those relating toclient acquisition service delivery to clients business support activities informationsecurity intellectual property physical security and business activity disruptions.Operational risks are assessed primarily on three dimensions - business processeffectiveness compliance to policies and procedures and strength of underlying controls.
Regulatory environment: Risks due to adverse developments in the regulatoryenvironment that could potentially impact our business objectives and lead to loss ofreputation.
Societal: Risks and opportunities relating to our focus on the environment andsociety at large. Environmental focus includes conservation of essential resources such aswater and energy disposal of waste minimizing emissions etc. Social focus includesprojects to impact the communities in the regions where we operate.
14. Subsidiaries Associate Companies and Joint Ventures
The Company does not have any subsidiaries Associate Companies or Joint Ventures.
15. Annual Evaluation of Board's Performance
The Nomination and Remuneration Committee of the Company approved an Evaluation Policyduring the year 2014-2015 which was adopted by the Board of Directors. The policyprovides for evaluation of the Board the Committees of the Board and individualDirectors including the Chairman of the Board. The Policy provides that evaluation of theperformance of the Board and Committees of Board shall be carried out on an annual basis.
The Evaluation process focused on various aspects of the Board and Committeesfunctioning such as composition of the Board and Committees experience and competenciesperformance of specific duties and obligations governance issues etc. A separate exercisewas carried out to evaluate the performance of individual Directors on parameters such asattendance contribution and independent judgment.
The performance evaluation of the Independent Directors was carried out by the entireBoard excluding the Director being evaluated. The performance evaluation of ManagingDirector and Non-Executive Director was carried out by the Independent Directors who alsoreviewed the performance of the Board as a whole. The Nomination and RemunerationCommittee (NRC) also reviewed the performance of the Board its Committees and of theDirectors.
The Chairman of the Board provided feedback to the Directors on an individual basis asappropriate. Significant highlights learning and action points with respect to theevaluation were presented to the Board.
16. Transfers to reserves
The Company has not transferred any amount to the reserves in the financial year.
In view of the accumulated losses the Directors express their inability to recommenddividend during the year.
Pursuant to the provisions of Section 139 of the Act read with Companies (Audit andAuditors) Rules 2014 as amended from time to time Grandhy & Co. CharteredAccountants bearing Firm Registration No. 001007S were appointed as statutory auditorsfrom the conclusion of the thirty fourth Annual General Meeting (AGM) held on 28thSeptember 2017 till the
conclusion of the thirty-ninth AGM of the Company in 2022 subject to the ratificationof their appointment at every AGM if required under law. Accordingly necessaryresolution for ratification of appointment of auditors is included in the Notice for thisAGM. In this regard the Company has received a certificate from auditors to effect thatif they are reappointed it would be in accordance with the provisions of section 141 ofthe Companies Act 2013
Grandhy & Co Chartered Accountants have consented to their appointment asStatutory Auditors and have confirmed that their appointment if made will be inaccordance with Section 139 read with Section 141 of the Act. Members are requested toapprove the appointment of Grandhy & Co Chartered Accountants and authorize the Boardof Directors to fixtheir remuneration.
R & A Associates Practicing Company Secretaries was appointed to conduct thesecretarial audit of the Company for the financial year 2017-18 as required under Section204 of the Companies Act 2013 and Rules there under.
The secretarial audit report for financial year 2017-18 forms part of the Annual Reportas Annexure-III to the Board's report.
19. Corporate Governance:
A report on the Corporate Governance which inter alia includes the composition andconstruction of Audit Committee is featuring as a part of Annual Report. Your Companywill continue to adhere in letter and spirit to the good corporate governance policies.Pursuant to the relevant provisions of Securities Exchange Board of India(ListingObligations And Disclosure Requirements) Regulations 2015 ("ListingRegulations") as referred to in Regulation15 (2) of the Listing Regulations for theperiod 1st April 2017 to 31st March 2018 a certificate from theauditors of the Company is enclosed.
20. Managing Director's Declaration:
Pursuant to the provisions of Listing Regulations a declaration by the ManagingDirector of the Company declaring that all the members of the Board and the SeniorManagement Personnel of the Company have affirmed compliance with the Code of Conduct ofthe Company is enclosed. The same can be viewed on the website of the Company at www.hypersoftindia.com
21. Directors' Responsibility Statement:
In accordance with the provisions of the section 134(c) of the Companies Act 2013 andbased on the information provided by the management your directors state 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 of the Company forthat period;
c. The directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;
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.
22. Corporate Social Responsibility-NotApplicable
23. Significant and material orders
There are no significant and material orders passed by the regulators or courts ortribunals impacting the going concern status and Company's operations in future.
24. Secretarial Standards
The Company is in compliance of Secretarial Standards during the Financial Year2017-2018.
25. Internal Financial Controls
The Board has adopted the policies and procedures for ensuring the orderly andefficient conduct of its business including adherence to the Company's policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial disclosures.
26. Whistle Blower Policy / Vigil Mechanism
To create enduring value for all stakeholders and ensure the highest level of honestyintegrity and ethical behavior in all its operations the Company has formulated a VigilMechanism/Whistle Blower Policy that governs the actions of its employees. ThisWhistleblower Policy/Vigil Mechanism aspires to encourage all employees to reportsuspected or actual occurrence(s) of illegal unethical or inappropriate events (behaviorsor practices) that affect Company's interest / image.
A copy of the Policy is available on the website of the Company.
27. Disclosures Under Sexual Harassment of Women At Workplace (Prevention Prohibition& Redressal) Act 2013
The Company has zero tolerance for sexual harassment at workplace and has adopted apolicy on prevention prohibition and redressal of sexual harassment at workplace in linewith the provisions of the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013 and the rules thereunder for prevention and redressalof complaints of sexual harassment at workplace. During the financial year 2017-18 theCompany has not received any complaints on sexual harassment.
28. Conservation of Energy&Technology Absorption Foreign Exchange EarningsandOutgo:
A. Conservation of Energy:
(a) Energy Conservation measures taken: Your Company's operations are software orientedand not energy intensive. Adequate measures have been taken to conserve energy whereverpossible by using energy-efficient computers and equipment.
(b) Additional investments and proposals if any being implemented for reduction ofconsumption of energy: Exchanging legacy CRT monitors with LCD power saving monitors.
(c) Impact of the measures (a) and (b) above for energy consumption and consequentimpact on the cost of production of goods: As energy conservation is very meager andenergy cost forms a small part of total costs the impact of costs is not material.
B. Technology Absorption:
Research and Development (R & D):
I. Specific areas in which R & D carried out by the Company:
The Company continues to focus and invest in R & D activities for developing andimproving the quality and enhancing the benefits of its software products. The Company isa product oriented Company and the continuous development of new products and the existingproducts is an ongoing exercise.
II. Benefits derived as a result of the R & D:
Research and development of new products & processes will continue to be ofimportance to your Company. Products although have a longer gestation are of higherbenefit to the Company and its profitability in the long run.
III. Future plan of Action:
The Company continues to strive for development and innovation of new products andimproving the existing ones in order to meet the changing requirements and to cater tocustomer needs.
IV. Expenditure on R&D: NIL Adaptation and Innovation:
As a result of new partnerships the Company now has absorbed new technologies and willresult in better adaptation to Indian customer needs.
C. Foreign Exchange Earnings & Outgo:
|Particulars ||2017-2018 (in Rs.) ||2016-2017 (in Rs.) |
|Foreign Exchange Earnings ||1582672 ||807000 |
|Foreign Exchange Outgo: ||- ||- |
|Purchase ||- ||- |
|Expenses ||- ||- |
Your Directors place on record their appreciation of the continued assistance andcooperation extended by the shareholders customers bankers and the dedicated employeesand the business associates.
| || |
For and on behalf of Board of Directors
|Place: Secunderabad Date: 10th August 2018 ||(F.R. Bhote) |
Managing Director DIN:00156590
|(Vinay Vir) |
Director DIN: 02378210