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Lee & Nee Software (Exports) Ltd.

BSE: 517415 Sector: IT
NSE: N.A. ISIN Code: INE791B01014
BSE 00:00 | 27 May 11.82 -0.44
(-3.59%)
OPEN

11.71

HIGH

12.50

LOW

11.65

NSE 05:30 | 01 Jan Lee & Nee Software (Exports) Ltd
OPEN 11.71
PREVIOUS CLOSE 12.26
VOLUME 66650
52-Week high 30.95
52-Week low 3.15
P/E 394.00
Mkt Cap.(Rs cr) 66
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 11.71
CLOSE 12.26
VOLUME 66650
52-Week high 30.95
52-Week low 3.15
P/E 394.00
Mkt Cap.(Rs cr) 66
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

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

Company director report

To The Members

Your Directors presenting the 33rd Annual Report togetherwith the audited accounts of your company for the financial year ended 31stMarch 2021.

Financial Results

Your Company's performance for the financial year ended 31stMarch 2021 is summarized below:

(Rupees in Lakhs)

Particulars For the financial year ended For the financial year ended
(Standalone) (Consolidated)
31.03.2021 31.03.2020 31.03.2021 31.03.2020
Income:
Revenue from operations 481.66 416.51 534.79 474.91
Other Income 51.02 59.80 113.44 122.78
Total Income 532.68 476.31 648.23 597.69
Expenses:
Operating Expenditure 513.03 459.16 603.53 583.29
Depreciation & Amortization Expense 1.78 2.97 2.10 3.38
Total Expenses 514.81 462.13 605.63 586.67
Profit Before Tax (PBT) 17.87 14.18 42.60 11.02
Tax Expense 1.68 3.86 1.37 3.86
Profit for the year 16.19 10.32 41.07 7.16
Other Comprehensive Income (Net of tax) 2.88 -1.96 33.14 -48.02
Total Comprehensive Income for the period 19.07 8.36 74.21 -40.86

Company's Performance:

The year gone by started with an unprecedented nation-wide lockdown dueto pandemic which negatively impacted the economic activities across the globe. Postrelaxation of lockdown economic activities gradually started picking up from mid May 2020.As we entered 2021 the outlook was uncertain & no specific expectations for growthwere set however as the year progressed Lee & Nee Softwares was able to scale up andsurpassed the 2020 base year revenue. During the period under review at consolidatedlevel the company achieved revenue of Rs.64823878 EBITDA Rs. 4470612 PBT of Rs.4260699 and PAT of Rs. 4106944 as compared to the revenue of Rs.59769406 EBITDA Rs.1440222 PBT of Rs. 1101977and PAT of Rs. 716455 respectively in the previous year.

On an unconsolidated basis (at standalone level) the company achievedrevenue of Rs. 53268192 EBITDA Rs. 1964731 PBT of Rs. 1786994 and PAT of Rs.1618798 as compared to the revenue of Rs. 47631231 EBITDA Rs. 1715962 PBT of Rs.1418422 and PAT of Rs. 1032902respectively in the previous year.

At the Standalone level the sales of the Company have increased by11.83% as compared to previous year and at the Consolidated level also the sales of theCompany has increased by 8.46% as compared to last year.

Share Capital

As on 31st March 2021 paid up share capital of the Companywas Rs. 557740000 divided into 55774000 equity shares of Rs.10/- each. There was nochange in share capital of the Company during the Financial Year 2020-21.

Dividend and Transfer to Reserves

In terms of the Dividend Distribution Policy as per SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 equity shareholders of theCompany may expect dividend if the Company is having surplus funds and after taking intoconsideration the relevant internal and external factors as mentioned in the said Policy.Accordingly considering the cash position fund requirements for growth of business ofyour Company and the brought forward losses the Board of Directors has not recommendedany dividend for the financial year ended 31st March 2021. Accordingly noamount is also proposed to be transferred to the reserves of your Company.

Listing with Stock Exchanges

Your Company confirms that it has paid the Annual Listing Fees for theyear 2020-21 to Bombay Stock Exchange and Calcutta Stock Exchange where yourCompany's Shares are listed.

No shares of your Company were delisted during the financial year2020-21.

Change in the nature of business if any

There has been no change in the nature of business of the Companyduring the financial year 2020-21.

Deposits from Public

Your Company has not accepted any kind of deposit from the public underChapter V of the Companies Act 2013 during the year under review and as such no amount onaccount of principal or interest on deposits from public was outstanding as on the date ofthe Balance Sheet.

Particulars of loans guarantees and investments

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

Material Changes and Commitments if any affecting the FinancialPosition between the end of the Financial Year and date of the report

There are no material changes or commitments affecting the financialposition of the Company which have occurred between the end of the financial year towhich the financial statement relates and the date of this Report.

Management Discussion and Analysis Report

A detailed Management Discussion and Analysis Report as required underthe Securities and Exchange Board of India (Listing Obligations and DisclosureRequirements) Regulations 2015 (“SEBI LODR”) forms part of this Annual Reportand is annexed as ‘Annexure-1'.

Human Resource Management

Attracting enabling and retaining talent has been the cornerstone ofthe Human Resource function and the results underscore the important role that humancapital plays in critical strategic activities such as growth.

Your Company's focus lies in creating a performance based culturedriven by focused growth and clear career development plan for each employee. A robustTalent Acquisition system enables the Company to balance unpredictable business demands.

Quality Initiatives & Achievements:

The Company successfully achieved annual enterprise-wide ISOcertification for ISO 9001:2015 (Quality Management) for Software Development ERPSolution Website Development Medical Transcription Mobile Application and DigitalMarketing.

Consolidated Financial Statements

In accordance with the Companies Act 2013 (“the Act”) SEBILODR and Ind-AS-110 on Consolidated Financial Statements the Audited ConsolidatedFinancial Statements for the financial year ended 31st March 2021 are provided in theAnnual Report.

Subsidiary companies

The Company has two subsidiaries namely Lensel Web Services Private Ltdand Rituraj Shares Broking Pvt. Ltd. as on March 31 2021. There has been no materialchange in the nature of business of the subsidiaries.

Pursuant to sub-section (3) of Section 129 of the Companies Act 2013 astatement containing the salient features of the financial statement of a company'ssubsidiaries is given in Form No. AOC-1 annexed as ‘Annexure 2' which forms apart of this Annual Report.

During the year no new subsidiary was formed or ceased. Further theCompany has no Joint Venture and Associate during the financial year ended 31stMarch 2021.

Pursuant to the provisions of Section 136 of the Companies Act 2013the financial statement of the Company consolidated financial statements along withrelevant documents and separate audited financial statements in respect of Subsidiariesare available on the website of the Company https://lnsel.com/investor/ The annualaccounts of the subsidiary companies shall also be kept for inspection by any shareholderin the Head Office of the Company and the respective offices of its subsidiary companies.

The Company has adopted a policy for determining the criteria of‘Material subsidiaries' which can be viewed at the Company's website at thelink: https://lnsel.com/wp-content/uploads/2020/09/policy-on-material-subsidiaries.pdfDetails of Significant and Material orders passed by the Regulators /Courts / TribunalsImpacting the going concern status and the Company's operations in future

During the financial year 2020-21 there was no significant andmaterial orders passed by any Regulators / Courts /Tribunals which impacts the goingconcern status and the Company's Operations in future.

Directors' Responsibility Statement

Pursuant to Section 134 (3)(C) and 134(5) of the Companies Act 2013the Board of Directors to the best of their knowledge and ability confirm that:

(a) In the preparation of the annual accounts the applicableaccounting standards had been followed along with proper explanation relating to materialdepartures;

(b) the Directors had selected such accounting policies and appliedthem consistently and made judgements and estimates that are reasonable and prudent so asto give a true and fair view of the state of affairs of the Company at the end of thefinancial year and of the profit of the Company for that period;

(c) the Directors had taken proper and sufficient care for themaintenance of adequate accounting records in accordance with the provisions of this Actfor safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities;

(d) the Directors had prepared the annual accounts on a going concernbasis;

(e) the Directors have laid down internal financial controls to befollowed by the Company and such internal financial controls are adequate and areoperating effectively; and

(f) the Directors had devised proper systems to ensure compliance withthe provisions of all applicable laws and that such systems were adequate and operatingeffectively.

Directors and Key Managerial Personnel

Mr. Vikash Kamani Mr. Sushil Kumar Gupta & Miss Leela Murjani werereappointed as Independent Directors with effect from 27th September 2019 fora second term of five years expiring on 26th September 2024.

Your Director Mr. Ajay Agarwal retires at the ensuing Annual GeneralMeeting and being eligible offers himself for reappointment. Additional information andbrief profile as required under the SEBI Regulations for the Director seekingreappointment is annexed to the Notice of AGM. The Board of Directors of your Companyrecommends his reappointment in the Board. During the year under review the non-executivedirectors of the Company had no pecuniary relationship or transactions with the Companyother than sitting fees commission if any and reimbursement of expenses incurred by themfor the purpose of attending meetings of the Board /Committee of the Company.

Disclosures with respect to the Board composition Directors and Boardmeetings held during the financial year are covered under the Corporate Governance reportforming part of this report as per the Provisions of the Companies Act 2013. All thedeclarations were placed before the Board. Further all the Directors have also confirmedthat they are not debarred to act as a Director by virtue of any SEBI order or any otherstatutory authority.

Pursuant to the provisions of Section 203 of the Act the KeyManagerial Personnel of the company as on March 31 2021 are; Mahesh Gupta ChiefExecutive Officer Vikash Singh Chief Financial Officer and Pritika Gupta CompanySecretary.

Independent Directors

Your Company has laid down procedures to be followed for familiarizingthe Independent Directors with your Company their roles rights responsibilities in yourCompany and to impart the required information and training to enable them contributesignificantly to your Company.

All the Independent Directors of the Company have given declarationsthat they meet the criteria of independence as laid down in section 149(6) of the Act andRegulation 16(1)(b) of Listing Regulations. The Independent Directors have also confirmedthat they have complied with the Company's Code of Conduct.

The details of the familiarisation programme imparted to theIndependent Directors of the Company are uploaded on the website of the Company athttps://lnsel.com/wp-content/uploads/2021/08/familiarization-programme-for-independent-director.pdfBoard and Committee Meetings

Five meetings of the board were held during the year. For details ofthe meetings of the board and its Committees please refer to the Corporate GovernanceReport which forms a part of this report.

Separate Meeting of Independent Directors

During the year under review the Independent Directors met on February24 2021 without the presence of Non-Independent Directors and members of the Managementand inter alia:

(i) reviewed the performance of Non-Independent Directors and the Boardas a whole;

(ii) reviewed the performance of the Chairperson of the Company takinginto account the views of Executive Directors and Non-Executive Directors.

(iii) assessed the quality quantity and timeliness of flow ofinformation between the Company management and the Board that is necessary for the Boardto effectively & reasonably perform their duties.

Board Evaluation

Pursuant to the provisions of the Act and the SEBI Listing Regulationsthe Nomination and Remuneration Committee has laid down the criteria for performanceevaluation on the basis of which the Board has carried out evaluation of its ownperformance the performance of Board Committees and of the Independent Directorsindividually.

The Independent Directors of the Company without the participation ofNon-Independent Directors and members of management in their separate meeting held onFebruary 24 2021 have reviewed the performance of Non-Independent Directors and theBoard as a whole. The review of performance of Non-Independent Directors was done onvarious parameters such as skill competence experience governance degree ofengagement ideas & planning attendance leadership etc. The Board performance wasreviewed on various parameters such as adequacy of the composition of the Board Boardculture appropriateness of qualification & expertise of Board members process ofidentification and appointment of Independent Directors inter-personal skills ability toact proactively managing conflicts managing crisis situations diversity in theknowledge and related industry expertise roles and responsibilities of Board membersappropriate utilization of talents and skills of Board members etc.

The Nomination and Remuneration Committee of the Board based on thereport of the Independent Directors evaluated the performance of the Non-IndependentDirectors. The said Committee members also evaluated the performance of the IndependentDirectors of the Company based on the reports of the Executive Directors consideringtheir requisite skills competence experience and knowledge of the regulatoryrequirements relating to governance such as roles and responsibilities under the Codefor Independent Directors the Act the SEBI Listing Regulations etc.

The Board of Directors of the Company based on the report of theIndependent Directors and the Nomination and Remuneration Committee evaluated theperformance of Board and of individual Directors. The Board also carried out theevaluation of performance of its Committees on various parameters such as adequacy ofmeetings in enhancing the effectiveness of the Committee existence of a defined set ofobjectives/ terms of reference etc.

The result of review and evaluation of performance of Board it'sCommittees and of individual Directors was found to be satisfactory.

Policy on Appointment of Director and Remuneration

The Nomination and Remuneration Committee identifies and ascertains theintegrity qualification expertise skills knowledge and experience of the person forappointment as Director and Key Managerial Personnel. The appointment of a Director asrecommended by the Nomination and Remuneration Committee requires approval of the Board.

The remuneration determined for Executive/ Independent Directors issubject to the recommendation of the Nomination and Remuneration Committee and approval ofthe Board of Directors. The Non-Executive Directors appointed on the Board are paidsitting fees for attending the Board and Board Committee meetings. No other remunerationor commission is paid to the Non-Executive Directors.

The Board has on the recommendation of the Nomination &Remuneration Committee adopted and framed a Remuneration Policy for the Directors KeyManagerial Personnel and other employees pursuant to the provisions of the Companies Act2013 and SEBI Listing Regulations. The said Remuneration Policy forms part of this reportand is annexed as ‘Annexure-3' to this report. The same is also available onhttps://lnsel.com/wp-content/uploads/2020/09/remuneration-policy.pdf

Internal Financial Control System and their adequacy

The Company has in place adequate internal financial controls withreference to the Financial Statements. The controls are adequate for ensuring the orderlyand efficient conduct of the business including adherence to the Company's policiesthe safe guarding of assets the prevention & detection of frauds & errors theaccuracy and completeness of accounting records and timely preparation of reliablefinancial information.

Cost Records and Cost Audit

Maintenance of cost records and requirements of cost audit asprescribed under the provisions of Section 148 (1) of the Companies Act 2013 are notapplicable for the business activities carried out by the Company.

Audit Committee

The details with respect to the composition of the Audit Committee thenumber of meetings held during the Financial Year under review and attendance therein andthe terms of reference has been detailed out in the Corporate Governance Report whichforms part of this Annual Report.

Further there were no instances wherein the Board had not accepted anyrecommendation of the Audit Committee.

Nomination and Remuneration Committee

Details pertaining to constitution of the Nomination and RemunerationCommittee of the Board of Directors of the Company number of meetings held during theperiod under review attendance therein and its terms of reference have been stated in theCorporate Governance Report which forms part of this Annual Report.

Auditors

Statutory Auditors

M/s Jain Sonu & Associates Chartered Accountants Kolkata (FirmRegistration No. 324386E) had been appointed as the Statutory Auditors of the Company tohold office for a period of 5 (five) years from the conclusion of the 29th AGM of theCompany (for the Financial Year 2016-17) held on September 23 2017 until the conclusionof the 34th AGM of the Company for the Financial Year 2021-22.

In terms of Companies (Amendment) Act 2017 the requirement of seekingratification of auditors' appointment at every annual general meeting has beendispensed with.

Accordingly no resolution is being proposed for ratification ofappointment of statutory auditors at the ensuing Annual General Meeting and a note inrespect of same has been included in the Notice for this Annual General Meeting.

The Statutory Auditors have confirmed that they satisfy theindependence criteria required under Companies Act 2013 code of ethics issued byInstitute of Chartered Accountants of India.

Secretarial Auditor

Pursuant to the provisions of Section 204 of the Act read withCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 the Board ofDirectors of the Company has appointed Mrs. Rasna Goyal a Practicing Company Secretaryin Practice (CP No.-9209) to conduct the Secretarial Audit Report of the Company for thefinancial year 2020-21. The Secretarial Audit Report in Form MR-3 for the financial yearended March 31 2021 is annexed as ‘Annexure-4-(a)' to this Report. TheSecretarial Audit Report does not contain any qualifications reservations or adverseremarks.

Lensel Web Services Pvt Ltd. material subsidiary of your Company hasundertaken its secretarial audit for the financial year ended 31st March 2021by Mrs. Rasna Goyal a Practicing Company Secretary in Practice (CP No.-9209) as‘Annexure-4-(b)' to this Report. The Secretarial Audit Report does not containany qualification reservation or adverse remark.

In line with the Circular dated February 08 2019 issued by theSecurities and Exchange Board of India Annual Secretarial Compliance Report for the yearended 31st March 2021 confirming compliance of all applicable SEBI Regulations Circularsand Guidelines by the Company was issued by Rasna Goyal Practicing Company Secretariesand filed with the Stock Exchanges. The same is available on the website of the Company atwww.lnsel.com.

Qualifications in Audit Reports

The statutory auditor's report and the secretarial audit report donot contain any qualifications reservations or adverse remarks or disclaimer.Secretarial audit report is attached to this report.

Risk Management Policy

The Company has systems for Internal Audit and Enterprise Riskassessment and mitigation. As part of the Annual Internal Audit Plan the audit plan isapproved by the audit committee. Further on a quarterly basis summary of key findings ispresented to the Audit committee. With increasing globalization and unprecedented changesin business environment the Company on a periodic basis identifies these uncertaintiesand after assessing them formulates short-term and long-term action plans to mitigate anyrisk which could materially impact the Company's long-term goals and Vision.

In the opinion of the Board there is no such risk which may threatenthe present existence of the Company.

Secretarial Standards

The Directors state that the applicable Secretarial Standards i.e.SS-1 and SS -2 relating to ‘Meetings of the Board of Directors' and‘General Meeting' respectively have been duly followed by the Company.

Vigil Mechanism/Whistle Blower Policy

The Company has adopted a Whistle Blower Policy to provide a formalmechanism to the Directors employees and others who are associated with the Company inconfirmation with Section 177(9) of the Act and Regulation 22 of Listing Regulations toreport their concerns about unethical behavior actual or suspected fraud or violation ofthe Company's code of conduct. The Policy provides for adequate safeguards againstvictimization of Employees/ Directors who avail the mechanism. The company affirms that noperson has been denied access to the Audit Committee in this respect. The said policy hasbeen uploaded on the website of the Company athttps://lnsel.com/wp-content/uploads/2020/09/vigil-mechanismwhistle-blower-policy.pdfRelated Party Transactions

All contracts / arrangements / transactions entered by the Companyduring the financial year 2020-21 with related parties were in the ordinary course ofbusiness and on an arm's length basis .During the financial year the Company had notentered into any contract / arrangement / transaction with related parties which could beconsidered material in accordance with the company's policy of Materility of RelatedPart Transactions except those provided in Form AOC-2 are not applicable for the yearunder review.

The Policy on dealing with related party transactions as approved bythe Board may be accessed on the Company's website at the linkhttps://lnsel.com/wp-content/uploads/2020/09/policy-for-determining-materiality.pdf

The Directors draw attention of the members to Note no 24 to thestandalone financial statement which sets out related party disclosures.

Corporate Social Responsibility Initiatives

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

Annual Return

A copy of the Extracts of the Annual Return of the Company as requiredunder section 134(3)(a) of the Companies Act 2013 in Form MGT-9 as they stood on theclose of the financial year i.e. 31st March 2021 is furnished in ANNEXURE 5 and formspart of this Report.

Further a copy of the Annual Return of the Company containing theparticulars prescribed u/s 92 of the Companies Act 2013 in Form MGT-7 as they stood onthe close of the financial year i .e. 31st March 2020 is uploaded on the website of theCompany which is accessed at the linkhttps://lnsel.com/wp-content/uploads/2020/09/extract-of-annual-return-mgt-7.pdfParticulars of Employees and related disclosures

There are no employees falling within the provisions of section134(3)(q) of the Companies Act 2013 read with Rule 5(2) and 5(3) of The Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014.

FUTURE PROSPECTS

Your company has had steady growth in both domestic as well asinternational markets this year. Your company has special focus on further expanding itsERP & Mobile Application within India in coming years. It has also expanded itsdigital transformation business in the overseas market by adding more business partnersfrom various countries.

Cloud Solutions continues to show an increasing demand as mostorganizations are working remotely and hence moving to cloud to run their operations.Cloud is increasingly becoming an integral part of the business across all sectors.E-commerce has come a long way since last year. The way the world consumes has now shiftedin favor of the minimum-risk and minimum-exposure advantage of online shopping. In spiteof a pandemic year e-commerce added 20 million new shoppers in 2020. However this isexpected to double in 2021 as 40 million new customers actively come to shop one-commerce platforms. Your company is actively helping companies to increase their salesby building their own ecommerce platforms The global mobile application market size wasvalued at $106.27 billion in 2018 and projected to reach $407.31 billion by 2026 growingat a CAGR of 18.4% from 2019 to 2026. Your company has expanded its capabilities in themobile apps market and has successfully delivered various projects. We look forward tocontinuing to enhance our expertise in this area to adhere to the continued demands of themarket.

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

Your Company is looking forward to work in the areas of ERP SolutionsE-Commerce and Mobile Application as there is huge potential in these areas.

Your Company is now focused on further expanding EnterpriseApplications business both in domestic as well as in overseas market.

Your Company is focussing on getting more Government projects in theareas of ERP and Mobile Applications.

Your Company is constantly striving to keep pace with changing demandsof corporations and adapt to new fields of innovation improved performance with acontinued sense of commitment to a higher standard. Your Company is committed to handlenew roles and responsibilities and is open to accept new challenges on a global basis byvirtue of its strengthened business model. In addition there are continuous efforts atimproving efficiency and delivering excellence in project execution with the help ofbusiness automation tools.

Employee Stock Option Scheme

Presently the Company does not have any Employee Stock Option/PurchaseScheme.

Policy on Prevention of Sexual Harassment

Your Company has in place a policy on prevention of sexual harassmentat work place in accordance with the provisions of Prevention Prohibition and Redressalof Sexual Harassment of Women at Workplace Act 2013. The policy aims at prevention ofharassment of women employees and lays down the guidelines for identification reportingand prevention of sexual harassment. During the year under review there were no casesfiled pursuant to the Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013.

Conservation Of Energy Technology Absorption Foreign ExchangeEarnings And Outgo Pursuant To Provisions Of Section 134 Of The Companies Act 2013 ReadWith The Companies (Accounts) Rules 2014.

The Statement pursuant to section 134(3) (m) of the Companies Act 2013read with Rule 8(3) of the Company's (Accounts) Rules 2014 is annexed as‘Annexure-6' forming part of this report.

Corporate Governance

The Corporate Governance Report in terms of Regulation 34(3) readwith Schedule V of the SEBI Listing Regulations forms part of this Annual Report. Thecompany has obtained a certificate from the Statutory Auditors' of the companyregarding compliance of conditions and the same forms part of this annual report andannexed as ‘Annexure-7'.

Acknowledgments

Your Directors place on record their appreciation for the help andco-operation received by them from ICICI Bank Ltd Indusind Bank Oriental Bank ofCommerce State Government of West Bengal and Department of Electronics & Departmentof Telecommunication 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 thededicated services rendered by the employees of your Company at all levels and thank theCompany's customers vendors investors and academic partners for their continuoussupport. Our consistent growth is possible because of their hard work solidarityco-operation and support.

For and on behalf of the Board of Directors of
Lee & Nee Softwares (Exports) Ltd.
Place : Kolkata Ajay Kumar Agarwal
Dated : 6th August 2021 Chairman and Director
(DIN : 01265141)

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