Your Directors have pleasure to present the 28th Annual Report and the Audited Accountsfor the financial year ended 31st March 2018.
1. Financial Results
The Company's financial performance for the year ended 31st March 2018 is summarizedbelow:
(Rs. in Lakhs)
|Particulars || |
| ||2017-2018 ||2016-2017 ||2017-2018 ||2016-2017 |
|Gross Revenues ||5334.44 ||5622.45 ||5504.97 ||5633.13 |
|Total Expenditure ||4534.35 ||5132.81 ||5197.55 ||5969.73 |
|Profit/(Loss) before tax ||800.09 ||489.64 ||307.42 ||(336.60) |
|Tax Expense ||354.21 ||145.22 ||354.61 ||145.22 |
|Profit/(Loss) after tax ||445.88 ||344.41 ||(47.19) ||(481.82) |
|Earnings per share || || || || |
|Basic EPS (Face Value ' 2/- each) ||2.02 ||1.56 ||(0.21) ||(2.18) |
|Diluted EPS (Face Value ' 2/- each) ||1.86 ||1.54 ||(0.20) ||(2.15) |
2. Year gone by
During the year under review your company registered a gross revenue of ' 5334.44lakhs (previous ' 5622.45 lakhs) and a profit before tax ' 800.09 lakhs (previous year '489.64 lakhs) on a standalone basis. Our profit for this year stands at ' 307.42 lakhs onconsolidated basis (previous year loss ' 336.60 lakhs).
This year was a challenging one as our investments into a large managed services dealdid not yield expected returns in the anticipated timelines. Due to this we had to reduceour operational expenses and slow down investment of our expansion into matured markets.But now the managed services deal is back on track with both phases of our implementationunderway including migration. Despite difficult times our existing customers trusted usand our strategy to proactively engage with them has resulted in increase in our servicesrevenue. Though we had to slow down our investments on expanding our market presence inmatured markets we could win the confidence of two operators operating in Latin Americaand Europe for digitalization of their customer experience. Domestically we penetrateddeeper into the banking and insurance verticals. Our UniServe NXT platform which is alow-code rapid application development platform is seeing good traction amongst ourcustomers and partner community.
3. Future Outlook
After successfully overcoming the delays in the managed services deal we are expectingsteady stream of revenue from this account. We are continuously farming our existingcustomers to up-sell and cross-sell our solutions. Our UniServe NXT platform has generatedgreat interest among our customers and we are in the process of doing proof of concepts.We have made plans to expand our brand in matured markets like USA with our UniServe NXTplatform and our solutions. Niche capabilities of our platform like data management forsingle view of your customer pre-built solutions for automating customer experiencelifecycle rapid application development for building new customer journeys and digitalsupport platform for greater customer experience address key issues that large enterprisesare facing today. We are working with our partners to deploy our solutions in their labsand use it to build enterprise applications. We have partnered with AWS Microsoft AzureOracle Cloud IBM Cloud and Alibaba Cloud to launch our solutions on their IaaS platforms.We have a joint GTM strategy with them to penetrate domestic and global markets.
4. Change in the nature of business
During the year the company has not changed its business.
In order to conserve its financial resources to meet its growth plan Your Board couldnot recommend any dividend for the year under review.
The Company has not proposed for transfer any amount to Reserves during the financialyear and proposes to retain '. 2754.14 lakhs in the Profit and Loss Account.
Cash and cash equivalents as at March 31st 2018 were '. 329.64 lakhs. The companycontinues to focus on judicious management of its working capital receivables andinventories. Other working capital parameters were kept under strict check throughcontinuous monitoring.
8. Share Capital
During the year there is no change in the Share capital of the Company. The Company hasreceived an amount of ' 430156 towards the share application money.
9. Directors and Key Managerial Personnel
In accordance with the Companies Act 2013 and the rules made thereunder and theArticles of Association of the Company Mr. Tikam Sujan retires by rotation and beingeligible offers himself for reappointment.
During the year 7 (Seven) Board Meetings and 4(Four) Audit Committee Meetings wereconvened and held. The details are given in the Corporate Governance Report. Theintervening gap between the Meetings was within the period prescribed under the CompaniesAct
2013. A calendar of meetings is prepared and circulated in advance to all theDirectors.
11. Board Evaluation
Pursuant to the provisions of the Companies Act 2013 and SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 the Board has carried out an annual performanceevaluation of its own performance the Directors individually as well as the evaluation ofthe working of its Audit Nomination & Remuneration and Compliance Committees. Themanner in which the evaluation has been carried out has been explained in the CorporateGovernance Report.
12. Declaration by an Independent Director(s) and reappointment if any
The Independent Director(s) have submitted the declaration of independence pursuant tosection 149(7) of the Act stating that he/ they meet the criteria of independence asprovided in sub-section (6) of Section 149 of the Companies Act 2013 and Regulation 17(b)of the Securities and Exchange Board of India (Listing Obligations and DisclosureRequirements) Regulations 2015 and that there is no change in their status ofindependence.
13. Remuneration Policy
The Board has on the recommendation of the Nomination & Remuneration Committeeframed a policy for appointment and remuneration of Directors Key Managerial Personneland other employees including criteria for determining qualifications positive attributesand Director's independence. The Remuneration Policy is stated in the Corporate GovernanceReport.
A) Details of the ratio of the remuneration of each Director to the median employee'sremuneration and other details as required pursuant to Rule 5(1) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014.
|Remuneration to Directors: ||Particulars ||2017-18 ( Rs. ) ||% on Total salaries |
|(a) Managing Director ||Salary and Perquisites ||3870000 ||1.41% |
|(b) Whole Time Director ||Salary and Perquisites ||3870000 ||1.41% |
B) Statement of Particulars of employees pursuant to the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 is enclosed as Annexure - III
C) No director is in receipt of any commission from the company and the ManagingDirector/ Whole-time Director of the Company have not received any remuneration orcommission from any other Company subject to its disclosure by the Company in the Board'sReport.
14. Details of Subsidiary/Joint Ventures/Associate Companies
Pursuant to sub-section (3) of section 129 of the Act the statement containing thesalient feature of the financial statement of a company's subsidiary or subsidiariesassociate company or companies and joint venture or ventures is given as Annexure - IV[Performance and financial position of each of the subsidiaries associates and jointventure companies included in the consolidated financial statement].
The Company has three Wholly Owned Subsidiary Company (WOS):
(1) "Intense Technologies FZE" in Hamriyah Free Zone Hamriyah United ArabEmirates (U.A.E).
(2) "Intense Technologies INC" in Miami Florida United States of America(USA).
(3) "Intense Technologies UK Limited" in 200 Brook Drive Green Park ReadingRG2 6UB United Kingdom (UK).
The Company has one Branch:
Intense Technologies Ltd in 10 Anson Road # 24-09 International Plaza Singapore -079903.
Further the Annual Accounts and related documents of the subsidiary company shall bekept open for inspection at the Registered & Corporate Office of the Company. TheCompany will also make available copy thereof upon specific request by any Member of theCompany interested in obtaining the same. Further pursuant to Accounting Standard AS-21issued by the Institute of Chartered Accountants of India Consolidated FinancialStatements presented by the Company in this Annual Report include the financialinformation of its subsidiary.
15. Statutory Auditors
The Statutory Auditors M/s. MV. Narayana Reddy & Co. Chartered Accountants (FirmRegistration No. 002370S) the exiting auditors who were appointed on 27th AGM to holdoffice for a period of five years till conclusion of 32nd Annual General Meeting haveexpressed unwillingness to the ratification of their appointment as Statutory Auditors ofthe Company with effect from the conclusion of the Annual General Meeting. A specialnotice under the provisions of Section 140(4)(i) read with Section 115 of the CompaniesAct 2013 and Rule 23 of the Companies (Management and Administration) Rules 2014 hasbeen received from a Member proposing the appointment of M/s. MSPR & Co. CharteredAccountants (Firm Registration No. 010152S) Hyderabad as the Statutory Auditors in placeof the resigning Auditors M/s. MV. Narayana Reddy & Co. Chartered Accountants.
The Board of Directors on the recommendation of the Audit Committee have approved theappointment M/s. MSPR & Co. Chartered Accountants as the statutory Auditors of theCompany to hold office from the conclusion of this Meeting for a period of threeconsecutive years subject to ratification by the members at every Annual General Meeting.
The Board recommends the appointment of M/s. MSPR & Co. Chartered AccountantsChartered Accountants as the statutory Auditors of the Company.
16. Auditors' Report
The Auditors' Report does not contain any qualification.
Notes to Accounts and Auditors remarks in their report are selfexplanatory and do notcall for any further comments.
17. Disclosure about Cost Audit
As per the Cost Audit Orders Cost Audit is not applicable to the Company for thefinancial year 2017-18.
18. Secretarial Audit Report
Pursuant to the provisions of Section 204 of the Companies Act 2013 and the rulesmade thereunder the Company has appointed Puttaparthi Jagannatham & Co. PracticingCompany Secretaries a firm of company secretaries to undertake the secretarial audit ofthe Company. The Secretarial Audit Report given by Puttaparthi Jagannatham and Co.Company Secretaries is annexed with the report. The self explanatory statement on CSRexpenditure and Secretarial Audit has been mentioned at the relevant paragraphs. TheSecretarial Auditor's report is self-explanatory and do not call for any further commentsand is enclosed as Annexure - V
Annual Report 2017-18
The Board has appointed M/s. Puttaparthi Jagannatham & Co. Practicing CompanySecretaries as Secretarial Auditor of the Company for the Financial Year 2017-18 as perthe provisions of the Companies Act 2013 and Rules made thereof and SEBI (ListingObligation & Disclosure Requirements) Regulations 2015.
19. Internal Audit Controls and their adequacy
The Company has an internal control system commensurate with the size scale andcomplexity of its operations. The scope and authority of the Internal Audit Function isdefined in the Internal Audit Manual. To maintain its objectivity and independence theInternal Audit function reports to the Chairman of the audit committee of the Board and tothe Chairman and Managing Director.
The internal Audit department monitors and evaluates the efficiency and adequacy of theinternal control system in the Company its compliance with operating systems accountingprocedures and policies at all locations of the Company. Based on the report of internalaudit functions process owner undertake corrective actions in their respective areas andthereby strengthen the controls. Significant audit observations and recommendations alongwith corrective actions thereon are presented to the audit committee of the Board.
20. Adequacy of internal financial controls with reference to the financial statements
The company has internal Auditors and the Audit Committee constituted is in place totake care of the same. During the year the Company continued to implement theirsuggestions and recommendations to improve the control environment. Their scope of workincludes review of processes for safeguarding the assets of the Company review ofoperational efficiency effectiveness of systems and processes and assessing the internalcontrol strengths in all areas. Internal Auditors findings are discussed with the processowners and suitable corrective actions are taken as per the directions of Audit Committeeon an ongoing basis to improve efficiency in operations.
21. Issue of Employee Stock Options (ESOP's)
Employees Stock Option Plan as required under SEBI (Share based Employee Benefits)Regulations 2014 the disclosures of the Employees Stock Option Plan 2005 Stock OptionPlan A 2007 and Stock Option Plan A 2009 which are in force are given in Annexure -VI.
22. Whistle Blower Policy
Pursuant to the provisions of section 177(9) & (10) of the Companies Act 2013 aWhistle Blower Policy for directors and employees to report genuine concerns has beenestablished. The Whistle Blower Policy has been uploaded on the website of the Company atwww.in10stech.com .
23. Risk Management And Insurance
The Company has established Risk Management Process to manage risks with the objectiveof maximizing shareholders value.
All the properties of your Company have been adequately insured. Your Companycontinuously monitors business and operational risk through business processre-engineering and reviewing areas such as production finance legal and other issues. Anexhaustive exercise is underway to bring a model regulating risk management mechanism.Your Company's assets are adequately insured against the risk from fire and earthquake.
24. Extract of Annual Return
As per 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 is annexed asAnnexure - I
25. Material changes and commitments
The company adopted Indian Accounting Standards ("Ind AS") and accordinglythe financial results have been prepared in accordance with the recognition andmeasurement principles stated there in prescribed under Section 133 of the Companies Act2013 read with the relevant rules issued thereunder and other accounting pronouncementsgenerally accepted in India. The date of transition to Ind AS is April 01 2016. Theimpact of transition has been accounted for in opening reserves and the comparativeperiods have been restated accordingly. Consequently restatement of prior period incomepertaining to financial year 2016-17 has been disclosed in the net profit reconciliationfor the year ended March 31 2017 in notes to financial statements for the year ended 31stMarch 2018.
26. Details of significant and material orders passed by the regulators or courts ortribunals impacting the going concern status and company's operations in future
No such orders were passed against the Company.
The company has not accepted any fixed deposits from the public.
28. Particulars of loans guarantees or investments under Section 186
(i) Details of loans and advances investments in subsidiary companies:
|Particulars ||Loans and Advances ( Rs. ) ||Investments ( Rs. ) |
|Intense Technologies FZE ||2049884 ||32867725 |
|Intense Technologies U.K. Limited ||8786013 ||111159901 |
|Intense Technologies INC ||2079371 ||94100020 |
|Total ||12915268 ||238127646 |
Related party disclosures are given under notes to Financial Statements in this report.
The cost on investments in Equity Shares of other listed entities: The aggregate marketvalue of these equity shares as on 31st March 2018 is Rs. 129000/-
Annual Report 2017-18
(ii) Details of Guarantee / Security Provided
|Date of providing security/guarantee ||Details of recipient ||Amount ( Rs. ) ||Purpose for which the security/guarantee is proposed to be utilized by the recipient |
|09-Jun-16 ||BSNL Delhi ||37500000 ||Performance Bank Guarantee |
|11-Aug-16 ||Millennium Telecom Ltd ||1500000 ||Performance Bank Guarantee |
|15-Sep-16 ||CGMITPC BSNL Pune ||15000000 ||Performance Bank Guarantee |
|15-Sep-16 ||CGMITPC BSNL Pune ||15000000 ||Performance Bank Guarantee |
| ||Total ||69000000 || |
29. Particulars of contracts or arrangements with related parties
All contracts / arrangements / transactions entered by the Company during the financialyear with related parties were in the ordinary course of business and on an arm's lengthbasis. During the year the Company had not entered into any contract / arrangement /transaction with related parties which could be considered material. All related partytransactions were placed in the meetings of Audit committee and the Board of Directors fortheir necessary review and approval.
There have been no material related party transactions undertaken by the Company underSection 188 of the Companies Act 2013 and hence no details have been enclosed pursuantto clause (h) of subsection (3) of Section 134 of Companies Act 2013 read with Rule 8(2)of the Companies (Accounts) Rules 2014 - AOC-2'."
30. Corporate Governance
A Report on Corporate Governance forming part of this report together with theCompliance certificate from the auditors M/s. Puttaparthi Jagannatham & Co. regardingcompliance of conditions of Corporate Governance as stipulated in Regulation 27 of theSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 is annexed withthe report as Annexure - VIII
31. Management Discussion and Analysis
A report on Management Discussion & Analysis for the year under review asstipulated under Regulation 34 of the Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015 with the Stock Exchanges inIndia is provided in a separate section forming part of this Annual Report and isenclosed as Annexure - VII.
32. Statutory Disclosures
In terms of the provisions of the Companies Act 2013 and other applicable regulationsread with the Companies (Particulars of Employees) Rules 1975 as amended the names andother particulars of the employees are set out in the Annexure - III to the Directors'Report. However as per SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 the Annual Report excluding the aforesaid information is being sent toall the members of the Company and others entitled thereto. Any member interested inobtaining such particulars may write to the Company at the registered office of theCompany.
33. Obligation of Company under the Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013
In order to prevent Sexual Harassment of Women at Workplace a new Act "The SexualHarassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013"has been notified on 9th December 2013. Under the said Act every company is required toset up an Internal Complaints Committee to look into complaints relating to sexualharassment at work place of any women employee.
The company has constituted "Internal Complaints Committee" as required undersection 4 (1) of Sexual harassment of women at work place (prevention prohibition andredressal) Act 2013.
This committee consists of following members:
Ms. Padmini Ieeja
Ms. G. Sushma
Ms. H. C. Madhavi
During the year under review no complaint of harassment at the workplace was receivedby the Committee.
34. Conservation of energy technology absorption and foreign exchange earnings andoutgo
The particulars as prescribed under Sub Section (3) (m) of Section 134 of the CompaniesAct 2013 read with the Companies (Accounts) Rules 2014 are given below:
A. Conservation of Energy:
The Company's core activity is information technology and services related which is notpower intensive. The Company is making every effort to conserve the usage of power.
B. Technology Absorption (R&D Adaptation and Innovation):
1. Efforts in brief made towards technology absorption adaptation and innovation:
i) Continuous research to upgrade existing products and to develop new products andservices.
ii) To enhance its capability and customer service the company continues to carry out R& D activities in house.
2. Benefits derived as a result of the above efforts:
i) Introduction of new and qualitative products.
ii) Upgrade of existing products.
3. Future plan of action:
Intense will continue to invest in and adopt the best processes and methodologiessuited to its line of business and long-term strategy. Training employees in the latestappropriate technologies will remain a focus area. The Company will continue to leveragenew technologies and also on the expertise available.
Annual Report 2017-18
C. Foreign Exchange Earnings & Outgo:
The details of Foreign Exchange earnings and outgo are givenbelow:
(Rs. in Lakhs)
| ||2017-18 ||2016-17 |
|1 Foreign Exchange Earnings || || |
|FOB Value of Goods exported ||2596.16 ||2215.82 |
|2 Foreign Exchange Outgo || || |
|Travel Expenses ||72.79 ||113.68 |
|Other expenditure incurred ||0.77 ||35.50 |
|Transferred for Singapore Branch Expenses ||90.78 ||176.22 |
|Transferred to Subsidiaries ||97.55 ||766.31 |
|Share based payments ||499.85 ||- |
35. Corporate Social Responsibility (CSR)
As per Section 135(1) of the Companies Act 2013 the provisions of Corporate SocialResponsibility are applicable to the Company. The Company has constituted the CSRcommittee as per the CSR Policy Rules and has identified the Education HealthEnvironment Rural Development and Disaster Relief if any as the focus areas for CSRactivities.
The Company could not spend all the earmarked money because of the problems inidentifying the better areas and beneficiaries as per its approved CSR Policy.
The Disclosure as per Rule 9 of Companies (Corporate Social Responsibility Policy)Rules 2014 is enclosed with this report as Annexure - II
36. Human Resources
Your Company treats its "Human Resources" as one of its most importantassets.
Your Company continuously invests in attraction retention and development of talent onan ongoing basis. A number of programs that provide focused people attention are currentlyunderway. Your Company's thrust is on the promotion of talent internally through jobrotation and job enlargement.
37. Directors' Responsibility Statement
The Directors' Responsibility Statement referred to in Clause (c) of SubSection (3) ofSection 134 of the Companies Act 2013 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 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 in the case of a listed company had laid down internal financialcontrols to be followed by the company and that such internal financial controls areadequate and were operating effectively.
(f) the Directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
38. Transfer of Amounts to Investor Education and Protection Fund
Your Company did not have any funds lying unpaid or unclaimed for a period of sevenyears. Therefore there were no funds which were required to be transferred to InvestorEducation and Protection Fund (IEPF).
39. Listing with Stock Exchanges
At present the equity shares of the Company are listed on the Bombay Stock Exchange(BSE) Mumbai and National Stock Exchange of India Limited (NSE) Mumbai. The Companyconfirms that it has paid Annual Listing Fees due to both the Exchanges for the year2018-19.
Pursuant to SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015the Company has formulated all the required policies as mandated. And all the policies areavailable on our website (http:// in10stech.com/investots/company-overview#investor)
41. Depository System
As the Members are aware your Company's shares are tradable compulsorily in electronicform and your Company has established connectivity with both National SecuritiesDepository Limited (NSDL) and Central Depository Services (India) Limited (CDSL). In viewof the numerous advantages offered by the depository system the members are requested toavail the facility of Dematerialization of the Company's shares on NSDL & CDSL. TheISIN allotted to the Company's Equity shares is INE781A01025.
Your Directors' convey their sincere thanks to State Bank of Hyderabad HDFC Bank LtdAxis Bank Ltd and shareholders for their continued support. Your Directors' place onrecord appreciation of the contribution made by the employees at all levels and looksforward to their continued support.
For and on behalf of the Board
Managing Director DIN : 00329398
Place: Secunderabad Date: 14th August 2018
Director DIN : 00329597