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Lee & Nee Software (Exports) Ltd.

BSE: 517415 Sector: IT
NSE: N.A. ISIN Code: INE791B01014
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NSE 05:30 | 01 Jan Lee & Nee Software (Exports) Ltd
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52-Week high 1.69
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P/E 50.00
Mkt Cap.(Rs cr) 6
Buy Price 1.05
Buy Qty 4.00
Sell Price 1.05
Sell Qty 291.00
OPEN 1.00
CLOSE 1.00
VOLUME 1
52-Week high 1.69
52-Week low 0.83
P/E 50.00
Mkt Cap.(Rs cr) 6
Buy Price 1.05
Buy Qty 4.00
Sell Price 1.05
Sell Qty 291.00

Lee & Nee Software (Exports) Ltd. (LEENEESOFT) - Director Report

Company director report

To

The Shareholders

Your Directors have pleasure in presenting the 30th Annual Report togetherwith the Audited Financial Statements and their Report thereon for the financial yearended 31st March 2018.

Financial Results

Amount in (Rs.)

Particulars

Consolidated

Standalone

2017-18 2016-17 2017-18 2016-17
Total Revenue 39333549 35023 057 27980614 24921097
Profit/ (Loss) before interest depreciation and Taxation 2200027 1442966 1601956 1064253
Less: Interest 4390 - 4390 -
Depreciation 372848 352507 332873 327941
Profit before taxation 1822789 1090459 1264692 736311
Less: Provision for taxation - 65284 - -
Profit after Taxation 1822789 1025175 1264692 736311

The financials of the Company are required to be prepared under IND AS a new set ofAccounting Standards. The financials for the previous financial year have also beenrestated in line with the requirements of IND AS. Accordingly the figures may not becomparable with the financials prepared under the then prevailing accounting standards.

Company's Performance

During the period under review at consolidated level the company achieved revenue ofRs. 39333549 EBDITA Rs. 2200027 PBT of Rs. 1822789 and PAT of Rs. 1822789 asagainst a revenue of Rs. 35023057 EBDITA Rs. 1442966 PBT of Rs. 1090459 and PAT ofRs 1025175 respectively in the previous year.

At standalone level the company achieved revenue of Rs. 27980614 EBDITA Rs.1601956 PBT of Rs. 1264692 and PAT of Rs. 1264692 as against a revenue of Rs.24921097 EBDITA Rs. 1064253 PBT of Rs. 736311 and PAT of Rs 736311 respectively inthe previous year.

At the Standalone level the sales of the Company have increased by 12.89% as comparedto previous year and at the Consolidated level also the sales of the Company has increasedby 12.88% as compared to last year.

A detailed Management Discussion and Analysis Report forms part of this report isannexed as Annexure-1.

Events subsequent to the date of Financial Statements

There were no events to report that has happened subsequent to the date of thefinancial statements.

Change in the nature of business if any

There has been no change in the nature of business of the company during the financialyear 2017-18.

Share Capital

During the year under review the company has not altered its share capital.

Dividend

The directors have not recommended any dividend for the current financial year becauseof brought forward losses.

IND AS Standards

Your Company has adopted IND AS with effect from 1 April 2017 pursuant to thenotification dated February 15 2015 under Section 133 of the Companies Act 2013 issuedby the Ministry of Corporate Affairs notifying the Companies (Indian Accounting Standard)Rules 2015. Your Company has published IND AS Financials for the year ended 31 March2018 along with comparable financials for the year ended 31 March 2017 together withopening statement of Assets and Liabilities as on 1 April 2016.

The quarterly results published by the Company during the financial year 2017-18 werealso based on IND AS. These have been published in newspapers and also made available onthe Company's website www.lnsel.com and the website of the stock exchanges where theshares of the Company are listed.

Quality Initiatives & Achievements:

The Company successfully achieved annual enterprise-wide ISO certification for ISO9001:2008 (Quality Management) for Software Development ERP Solution WebsiteDevelopment Medical Transcription & Search Engine Optimization.

Reserves

No amount was transferred to the reserves during the financial year ended on 31stMarch 2018.

Future Prospects

Your company has maintained the business from domestic market in this year and hasexpanded its business in the overseas market. In order to meet the modern demands ofcorporates the Company has identified new avenues of software business like RoboticsProcess Automation Data Security and Cloud offerings. Your company continues to extendits enterprise solution to medium and large enterprises in India.

Following are few services that your company plans to offer in the coming years:

• Your Company is looking forward to work in the areas of Robotics ProcessAutomation Data Security and Cloud solutions as there is huge potential in these areas.

• Your Company is now focused on further expanding Enterprise Applicationsbusiness both in domestic as well as in overseas market.

• Your Company has further developed niche products for specific industryverticals and plans to offer them on SaaS model in coming years.

• Your company is also planning to venture into new and emerging technologies likeIoT Robotics and Artificial Intelligence.

• Your Company has made strategic alliances to offer Data Security and Cloudsolutions. The Company anticipates to get good volume of business in the coming year.

Your Company is constantly striving to keep pace with changing demands of corporatesand adapt to new fields of innovation improved performance with a continued sense ofcommitment to a higher standard. Your Company is committed to handle new roles andresponsibilities and is open to accept new challenges on a global basis by virtue of itsstrengthened business model. In addition there are continuous efforts at improvingefficiency and delivering excellence in project execution.

Subsidiary companies

The Company has two subsidiaries namely Lensel Web Services Pvt Ltd and Rituraj SharesBroking Pvt. Ltd. as on March 31 2018.

Pursuant to sub-section (3) of Section 129 of the Companies Act 2013 read with Rule 5of the Companies (Accounts) Rule 2014 the statement containing the salient features ofthe financial statement of a company's subsidiaries is given in AOC-I as "Annexure2" which forms a part of this Annual Report.

The Consolidated Financial Statements are prepared in line with Section 129(3) of theAct read with the aforesaid Rules SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 and in accordance with the Indian Accounting Standards ("INDAS"). Consolidated Financial Statements and other applicable provisions includefinancial information of its subsidiary companies.

During the year no new subsidiary was formed or ceased. Further the Company has noJoint Venture and Associate during the financial year ended 31st March 2018.

The audited financial statements of each of its subsidiary companies are available forinspection at the Company's registered office and also at registered offices of therespective companies.

The Company has adopted a policy for determining the criteria of material subsidiarieswhich can be viewed at the Company's website at the link: http://www.lnsel.com

Deposits

Your Company has not accepted any kind of deposit from the public falling within theambit of Section 73 of the Companies Act 2013 and the Companies (Acceptance of Deposits)Rules 2014.

Particulars of loans guarantees and investments.

There are no Loans Guarantees and Investments made under the provisions of Section 186of the Companies Act 2013 during the year under review.

Related Party Transactions

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 anycontract/arrangement/transaction with related parties which could be considered materialsave and except the carry forward balances appearing in the notes to accounts. In view ofthe above the requirement of giving particulars of contracts/arrangements/transactionsmade with related parties in Form AOC-2 are not applicable for the year under review.

The Policy on materiality of related party transactions and on dealing with relatedparty transactions as approved by the Board may be accessed on the Company's website atthe link https://lnsel.com/wp-content/themes/lnselwp/pdf/Policy-for-determining-materiality.pdf.

The Directors draw attention of the members to Note no 24 to the standalone financialstatement which sets out related party disclosures.

Material changes and Commitments

No material changes and commitments have occurred from the date of close of thefinancial year till the date of this report which may effect the financial position of thecompany.

Details of Significant and material orders passed by regulators/ court/ tribunals

There was no instance of any material order passed by any regulators/ court/ tribunalsimpacting the going concern status of the company.

Corporate Social Responsibility Initiatives

The Company has not developed and implemented any Corporate Social Responsibilityinitiatives as the said provisions are not applicable to the Company.

Disclosure Relating To Material Variations

As per Regulation 32(1) of SEBI (Listing Obligations and Disclosure Requirements)Regulation 2015 there are no such material variances in the Company.

Material Changes and Commitments If any affecting The Financial Position between theend of the Financial Year and date of the report

There are no material changes or commitments affecting the financial position of theCompany which have occurred between the end of the financial year and the date of thisReport.

Details Of Significant And Material orders passed by the Regulators /Courts/TribunalsImpacting the going concern status and the Company's operations in future

There are no significant and material orders passed by any Regulators/Courts/Tribunals which impacts the going concern status of the Company or will have any bearingon Company's Operations in future.

Directors' Responsibility Statement

Pursuant to Section 134 (5) of the Companies Act 2013 the Board of Directors to thebest of their knowledge and ability confirm 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 have 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 for that period;

(c) the Directors have 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 annual accounts have been prepared on a going concern basis;

(e) the Directors have laid down internal financial controls to be followed by theCompany and such internal financial controls are adequate and are operating effectively.

(f) the Directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.

Directors and Key Managerial Personnel

Your Director Mr. AJAY KUMAR AGARWAL retires at the ensuing Annual General Meeting andbeing eligible offers himself for reappointment. Additional information and brief profileas required under the SEBI Regulations for the Director seeking reappointment is annexedto the Notice of AGM.The Board of Directors of your Company recommends his reappointmentin the Board.

Your Company has received declaration from each of the Independent Directors underSection 149(7) of the Companies Act 2013 that they meets the criteria of independencelaid down in Section 149(6) of the Companies Act 2013 and Regulation 16 of SEBI ListingRegulations 2015. All the declarations were placed before the Board.

Board and Committee Meetings

Four meetings of the board were held during the year. For details of the meetings ofthe board and its Committees please refer to the Corporate Governance Report which formspart of this report.

Familiarizations Programme for Ids'

In terms of 25(7) of Listing Regulations 2015 the Company has conducted theFamiliarization Programme for Independent Director to familiarize them with their rolesrights responsibilities in the company nature of the industry in which the companyoperates business model of the company etc. through various initiatives.

Board Evaluation

Pursuant to the applicable provisions of the Companies Act 2013 and SEBI ListingRegulations the Board has carried out an annual evaluation of its own performanceperformance of the directors and the working of its Committees on the evaluation criteriadefined by the Nomination and Remuneration Committee for performance evaluation process ofthe Board its Committee and Directors.

The Board's functioning was evaluated on various aspects including inter alia degreeof fulfillment of key responsibilities Board structure and composition establishment anddelineation of responsibilities to various Committees effectiveness of Board processesinformation and functioning.

The Committees of the Board were assessed on the degree of fulfillment of keyresponsibilities adequacy of Committee Composition and effectiveness of Meetings. TheDirectors including the Chairman of the Board were evaluated on parameters such as levelof attendance engagements and contribution independence of judgment safeguarding theinterest of the Company and its minority shareholders etc.

The performance evaluation of the Independent Directors was carried out by the entireBoard excluding the directors being evaluated. The performance evaluation of the Chairmanand the Non Independent Directors was carried out by the Independent Directors. TheDirectors expressed their satisfaction with the evaluation process.

Policy on Appointment of Director and Remuneration

The Nomination and Remuneration Committee identifies and ascertains the integrityqualification expertise skills knowledge and experience of the person for appointmentas Director and Key Managerial Personnel. The appointment of a Director as recommended bythe Nomination and Remuneration Committee requires approval of the Board.

The remuneration determined for Executive/ Independent Directors is subject to therecommendation of the Nomination and Remuneration Committee and approval of the Board ofDirectors. The Non-Executive Directors appointed on the Board are paid sitting fees forattending the Board and Board Committee meetings. No other remuneration or commission ispaid to the NonExecutive Directors.

The Board has on the recommendation of the Nomination & Remuneration Committeeadopted and framed a Remuneration Policy for the Directors Key Managerial Personnel andother employees pursuant to the provisions of the Companies Act 2013 and SEBI ListingRegulations. The said Remuneration Policy is annexed as Annexure-3 to this report.

Prevention of Insider Trading

The Company has adopted a Code of Conduct for Prevention of Insider Trading with a viewto regulate trading in securities by the Directors and designated employees of theCompany. The Code prohibits the purchase or sale of Company shares by the Directors andthe designated employees while in possession of unpublished price sensitive information inrelation to the Company during the period (the Trading Window is closed). The Board isresponsible for implementation of the Code.

All Board Directors and the designated employees have confirmed compliance with theCode.

Internal Financial Controls

The Company has in place adequate internal financial controls with reference to theFinancial Statements. The Audit Committee of the Board reviews the internal controlsystems the adequacy of internal audit function and significant internal audit findingswith the management Internal Auditors and Statutory Auditors.

Auditors

M/s Jain Sonu & Associates Chartered Accountants Kolkata (Firm Registration No.324386E) were appointed as Statutory Auditors of the Company at the 29thAnnual General Meeting held on 23rd September 2017 in terms of the provisionsof Section 139 of Companies Act 2013 to hold office until the conclusion of 33rdAnnual General Meeting subject to ratification at each Annual General Meeting.

In terms of Companies (Amendment) Act 2017 effective from 7th May 2018the requirement of seeking ratification of auditors' appointment at every annual generalmeeting has been dispensed with.

In view of the above the Board will not be placing any resolution seekingshareholders' ratification of appointment of M/s Jain Sonu & Associates CharteredAccountants Kolkata as Statutory Auditors of the Company at annual General Meetingsduring the course of its remaining tenure.

Secretarial Audit

Pursuant to the provisions of Section 204 of the Companies Act 2013 read with theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 the Companyhas appointed Mrs. Rasna Goyal a Practicing Company Secretary in Practice (CP No. - 9209)to undertake the Secretarial Audit of the Company for the year ended 31st March 2018. TheSecretarial Audit Report in this regard is annexed as Annexure-4. There are noqualifications or observations or remarks made by Secretarial Auditor in her report.

Risk Mangement Policy

In terms of the requirement of the Companies Act 2013 and SEBI (Listing Obligationsand Disclosure Requirements) Regulations 2015 the Company has taken adequate measures tomitigate various risk encountered. In the opinion of the Board there is no such risk whichmay threaten the present existence of the Company.

Extract of Annual Return

Pursuant to Section 92(3) of the Companies Act 2013 read with Rule 12(1) of theCompanies (Management and Administration) Rules 2014 an extract of the Annual Return inform MGT 9 is annexed herewith as Annexure-5.

Particulars of Employees and related disclosures

The information required under section 197 of the Act read with Rule 5(1) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 is notapplicable as no remuneration has been paid to the directors except sitting fees.

Disclosure Under the Sexual Harassment of Women at Work Place (Prevention Prohibitionand Redressal) Act 2013

The Company has always believed in a policy against sexual harassment which has alsofound its place in the governing Codes of Conduct and Ethics applicable to its employeeswhich includes a mechanism to redress such complaints. The Company has a zero toleranceapproach to any form of sexual harassment. During the year under review there were nocomplaints of sexual harassment reported to the Company.

Vigil Mechanism/Whistle Blower Policy

The Company has adopted a Whistle Blower Policy to provide a formal mechanism to theDirectors employees and others who are associated with the Company to report theirconcerns about unethical behavior actual or suspected fraud or violation of the Company'scode of conduct. The Policy provides for adequate safeguards against victimization ofEmployees/ Directors who avail the mechanism. The company affirms that no person has beendenied access to the Audit Committee in this respect. The said policy has been uploaded onthe website of the Company at http://www.lnsel.com

Conservation of Energy Technology Absorption Foreign Exchange Earnings and Outgo

The Statement pursuant to section 134(3) (m) of the Companies Act 2013 read with Rule8(3) of the Company's (Accounts) Rules 2014 is annexed as Annexure-6 to thisreport.

Declaration by Independent Directors

Shri Vikash Kamani Shri Sushil Kumar Gupta and Miss Leela Murjani are IndependentDirectors on the Board of your Company. The Company has received declarations from all theIndependent Directors of the Company confirming that they meet the criteria ofIndependence as provided under section 149(6) of the Companies Act 2013.

Corporate Governance & Management Discusssion and Analysis

The Company continues to remain committed to high standards of corporate governance.The Company is in compliance with all the provisions of Corporate Governance as stipulatedin the Regulations under Chapter IV of SEBI Listing Regulations. The Corporate GovernanceReport and the Statutory Auditors' Certificate regarding compliance of conditions ofCorporate Governance forms part of this report and annexed as Annexure-7. TheManagement Discussion and Analysis Report in terms of Regulation 34 (3) of SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 for the year under reviewforms part of this report and annexed as Annexure-1.

Acknowledgments

Your Directors place on record their appreciation for the help and co-operationreceived by them from ICICI Bank Ltd. Indusind Bank Oriental Bank of Commerce StateGovernment of West Bengal and Department of Electronics & Department ofTelecommunication under Ministry of Information & Technology Government of Indiaspecially Software Technology Parks of India WEBEL (West Bengal Electronics IndustryDevelopment Corporation Limited).

Your Directors also place on record their appreciation for the dedicated servicesrendered by the employees of your Company at all levels.

For and on behalf of the Board of Directors of
Lee & Nee Softwares (Exports) Ltd.
Place : Kolkata Ajay Kumar Agarwal Arpita Gupta
Dated : 26th July 2018 Director Director
(DIN : 01265141) (DIN : 02839878)