Your Directors have pleasure to present the 27th Annual Report and the Audited Accountsfor the financial year ended 31st March 2017.
1. Financial Results
The Companys financial performance for the year ended 31st March 2017 issummarized below:
(Rs. in Lakhs)
|Particulars || |
| ||2016-2017 ||2015-2016 ||2016-2017 ||2015-2016 |
|Gross Revenues ||7122.45 ||4548.70 ||7133.13 ||4729.80 |
|Total Expenditure ||5205.72 ||4503.86 ||6042.65 ||5575.96 |
|Profit/(Loss) before tax ||1916.72 ||44.84 ||1090.48 ||(846.16) |
|Tax Expense ||605.50 ||24.40 ||605.50 ||24.40 |
|Profit/(Loss) after tax ||1311.22 ||20.44 ||484.98 ||(870.56) |
|Earnings per share || || || || |
|Basic EPS (Face Value Rs. 2/- each) ||6.23 ||0.09 ||2.49 ||(4.01) |
|Diluted EPS (Face Value Rs. 2/- each) ||6.16 ||0.09 ||2.46 ||(3.73) |
2. Year gone by
During the year under review your Company registered a gross revenue of Rs. 7122.45lakhs (previous Rs. 4548.70 lakhs) and a Profit Before Tax Rs. 1916.72 lakhs (previousyear Rs. 44.84 lakhs) on a standalone basis. On account of continuous investments beingmade in overseas subsidiaries profit for this year stands at Rs. 1090.48 lakhs onconsolidated basis (previous year loss Rs. 846.16 lakhs).
Good revenue growth this year is a result of our strategic approach of directengagements with new customers farming existing accounts to expand the scope of oursolutions and launch of our solutions on cloud along with digital services initiative. Thelaunch of our new platform UniServe NXT with advanced technological capabilities tohelp enterprises evolve digital ways of doing business has immense potential as we seevery good traction in the market. Moreover we were successful in getting our first orderfor the platform from a leading telecom service provider in Europe. UniServe NXTplatform was recognized as the best of Future IT (Emerging technologies) by world renownediCMG Architecture Awards panel for 2016.
We continue to push for consolidation of our presence in the Americas and are seeinggains being made in the region. Our maiden implementation at a leading data servicescompany will shortly go on stream. We are currently pursuing exciting opportunities thathave the potential to expand into a multi-country engagement. Our cloud and digitalservices initiatives are seeing very good traction in domestic markets. A leadingnon-banking financial services company trusts our customer engagement solutions on cloud.
3. Future Outlook
In the new digital era every business aspires to go digital. Enterprises are lookingto explore digital mediums to automate every aspect of their business and their successdepends on the digital eco systems that they build to deliver value to their customers.UniServe NXT platform will help enterprises adapt digital ways and delivers value bymaking it easy to connect to IoT and use AI to automate business processes. Enterprisescan develop custom applications rapidly and experiment with new ideas of processautomation with the help of the platform. We are partnering with system integrators andconsulting firms to leverage their domain knowledge and evolve a combined valueproposition to take it to the market. Our existing customers are showing great interest inour innovation and are willing to work with us to evolve our platform. Implementation isnow rapidly apace on both phases of the managed services deal from publicly owned telecomservice provider in India and we expect to go on stream by the end of 2017 resulting inpredictable revenue stream.
We are planning to launch our cloud services in global markets in phases during thenext couple of years. With personalization of customer experience faster service tocustomers throughout the lifecycle and contextual customer engagement for greater loyaltybecoming important differentiating factors the need for our solutions in growingexponentially. Riding on good customer references gained in the domestic markets we planto aggressively pursue opportunities in the global markets for our customer engagementsolutions. Our annuity revenue from existing customers is growing steadily indicating thesuccess of our strategy to farm accounts. Beginning next year our operational expenseswill be taken care of by the annuity revenue and new deals can be used to expand ourpresence in the 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
Rs. 359712487/- in the Profit and Loss Account.
Cash and cash equivalents as at March 31st 2017 were Rs. 202084631/-. 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 your Company has issued shares on exercise of Employee Stock Options.
|ESOP Scheme ||No. of options exercised ||Allotted |
|Intense ESOP Scheme A 2009 ||427977 ||427977 |
|Total ||427977 ||427977 |
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 10 (Ten) 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 re- appointment 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 Directors independence. The Remuneration Policy is stated in the CorporateGovernance Report.
A) Details of the ratio of the remuneration of each Director to the medianemployees remuneration and other details as required pursuant to Rule 5(1) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014.
|Remuneration to Directors: ||Particulars ||2016-17 (Rs.) ||% on Total salaries |
|(a) Managing Director ||Salary and Perquisites ||6800000 ||2.19% |
|(b) Whole Time Director ||Salary and Perquisites ||6800000 ||2.19% |
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 theBoards Report.
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 companys 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 (Branch office Singapore) in 10 Anson Road # 24-09International Plaza Singapore 079903. There were no commercial operations inIntense Technologies UK Limited during the financial year 2016-17.
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
M/s Srinivas P. & Associates Chartered Accountants Independent Auditors of theCompany were appointed in the Annual General Meeting held on 29th September 2014 for aperiod of three years till the conclusion of the ensuing AGM i.e. the Twenty SeventhAnnual General Meeting. The Board of Directors on the recommendation of the AuditCommittee have approved the appointment of M/s. M V Narayana Reddy & Co. CharteredAccountants as the Statutory Auditors of the Company to hold office from the conclusion ofthis Meeting for a period of five consecutive years subject to ratification by themembers at every Annual General Meeting.
The Board recommends the appointment of M/s. M V Narayana Reddy & Co. CharteredAccountants 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 self-explanatory 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 2016-17.
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 Auditors report is self-explanatory and do not call for any furthercomments and is enclosed as Annexure V
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 effciency 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 effciency 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 effciency in operations.
21. Issue of Employee Stock Options (ESOPs)
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 AnnexureVI.
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 Companys assets are adequately insured against the risk from fire andearthquake.
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 as Annexure- I
25. Material changes and commitments
There has been a stand off on payment for the implementation services rendered inrespect of a manged services deal which we hope will settle down soon.
26. Details of significant and material orders passed by the regulators or courts ortribunals impacting the going concern status and companys 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 ||27108376 ||395750 |
|Intense Technologies U.K. Limited ||90483749 ||10216 |
|Intense Technologies INC ||67446441 ||6157250 |
|Total ||185038566 ||6563216 |
Related party disclosures are given under notes to Financial Statements in this report.
The cost on investments in Equity Shares of other listed entities aggregates to Rs.37343/- The aggregate market value of these equity shares as on 31st March 2017 is Rs.106068/-
(ii) Details of Guarantee / Security Provided
|Sl.No ||Date of providing security/ guarantee ||Details of recipient ||Amount (Rs.) ||Purpose for which the security/ guarantee is proposed to be utilized by the recipient |
|1 ||09-Jun-16 ||BSNL Delhi ||37500000 ||Performance Bank Guarantee |
|2 ||11-Aug-16 ||Millennium Telecom Ltd ||1500000 ||Performance Bank Guarantee |
|3 ||15-Sep-16 ||CGMITPC BSNL Pune ||45000000 ||Performance Bank Guarantee |
|4 ||31-Dec-16 ||CGMITPC BSNL Pune ||105000000 ||Performance Bank Guarantee |
| || ||Total ||189000000 || |
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 armslength basis. All related party transactions were placed in the meetings of Auditcommittee and the Board of Directors for their 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 regarding compliance of conditions of CorporateGovernance as stipulated in Regulation 27 of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 is annexed with the 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
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 theDirectors Report. However as per SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 the Annual Report excluding the aforesaid information isbeing sent to all the members of the Company and others entitled thereto. Any memberinterested in obtaining such particulars may write to the Company at the registered officeof the Company.
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 2013has 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 InternalComplaints Committee as required under section 4 (1) of Sexual harassment of womenat work place (prevention prohibition and redressal) Act 2013.
This committee consists of following members:
Ms. Sushma Vaddagiri
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 Companys core activity is information technology and services related whichis not power 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.
C. Foreign Exchange Earnings & Outgo:
The details of Foreign Exchange earnings and outgo are given below:
(Rs. in Lakhs)
| ||2016-17 ||2015-16 |
|1 Foreign Exchange Earnings || || |
|FOB Value of Goods exported ||2215.82 ||1938.16 |
|2 Foreign Exchange Outgo || || |
|Travel Expenses ||113.68 ||197.07 |
|Other expenditure incurred ||35.50 ||60.46 |
|Transferred for Singapore Branch Expenses ||176.22 ||156.57 |
|Transferred to Subsidiaries ||766.31 ||643.02 |
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. TheDisclosure as per Rule 9 of Companies (Corporate Social Responsibility Policy) Rules 2014is 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 attracting retaining and development of talent onan ongoing basis. A number of programs that provide focused people attention are currentlyunderway. Your Companys 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 Sub-Section(3) of Section 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 suffcient 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;
(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; and
(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. TheCompanys equity shares are listed with National Stock Exchange of India Limited(NSE) Mumbai w.e.f March 23 2017. The Company confirms that it has paid Annual ListingFees due to both the Exchanges for the year 2017-18.
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/investors/ company-overview#investor)
41. Depository System
As the Members are aware your Companys shares are tradable compulsorily inelectronic form and your Company has established connectivity with both NationalSecurities Depository Limited (NSDL) and Central Depository Services (India) Limited(CDSL). In view of the numerous advantages offered by the depository system the membersare requested to avail the facility of Dematerialization of the Companys shares onNSDL & CDSL. The ISIN allotted to the Companys Equity shares is INE781A01025.
Your Directors convey their sincere thanks to State Bank of Hyderabad HDFC BankLtd Axis Bank Ltd and shareholders for their continued support. Your Directorsplace on record appreciation of the contribution made by the employees at all levels andlooks forward to their continued support.
| || ||For and on behalf of the Board |
|Place: Secunderabad ||C. K. Shastri ||Jayant Dwarkanath |
|Date: 16th August 2017 ||Chairman & Managing Director ||Whole Time Director |
| ||DIN: 00329398 ||DIN: 00329597 |