OCTAWARE TECHNOLOGIES LIMITED.
During the year under review performance of the company as under: Statement ofStandalone Audited Results for the Year ended 31.03.2019
(Rs. In Lakhs.)
| || |
Year Ended Results
|Particulars ||31.03.2019 ||31.03.2018 |
| ||Audited ||Audited |
|I Revenue from operations ||265.28 ||91.53 |
|II Other Income ||11.49 ||0.01 |
|III Total Revenue (I+II) ||276.77 ||91.54 |
|IV Expenses || || |
|(a) Cost of materials consumed ||92.77 ||9.36 |
|(b) Purchases of stock-in-trade ||- ||- |
|(c) Changes in inventories of finished goods work-in-progress and stock-in-trade || || |
|(d) Employee benefits expense ||98.07 ||13.65 |
|(e) Finance Costs ||- ||- |
|(f) Depreciation and amortisation expense ||10.99 ||9.60 |
|(g) Other expenses ||53.78 ||42.55 |
|Total Expenses ||255.61 ||75.16 |
|V Profit / (Loss) before exceptional and extraordinary items and tax (III-IV) ||21.16 ||16.38 |
|VI Exceptional items ||- ||- |
|VII Profit / (Loss) before extraordinary items and tax (V-VI) ||21.16 ||16.38 |
|VIII Extraordinary Items ||- ||- |
|IX Profit before tax (VII-VIII) ||21.16 ||16.38 |
|X Tax Expenses || || |
|(a) Current Tax ||10.65 ||3.60 |
|(b) Deferred Tax ||-1.47 ||-0.79 |
|XI Profit / (Loss) for the period from continuing operations (IX-X) ||11.98 ||13.57 |
|XII Profit/ (Loss) from discontinuing operations ||- ||- |
|XIII Tax Expenses of discontinuing operations ||- ||- |
|XIV Profit/ (Loss) from discontinuing operations (after tax) (XII-XIII) ||- ||- |
|XV Profit/ (Loss) for the period (XI+XIV ||11.98 ||13.57 |
|XVI i. Earning per share(before extraordinary items) (of Rs 10 each) (not annualised) ||- || |
|(a) Basic ||0.33 ||0.38 |
|(b) Diluted ||0.33 ||0.38 |
|ii. Earning per share(after extraordinary items) (of Rs 10 each) (not annualised) || || |
|(a) Basic ||0.33 ||0.38 |
|(b) Diluted ||0.33 ||0.38 |
Review of Operations:
Total Consolidated Income for the year was Rs. 1095.13 Lacs as against last year's Rs1134.39 Lacs. Further during the year company resulting in net profit of Rs. 57.68 Lacs asagainst previous year profit of Rs. 238.61 Lacs
Your Directors are taking optimum efforts to increase the profits through aggressivesales campaign.
Our cliental base constitutes customers of diverse sectors encompassing variousindustries like Healthcare Education Telecom Oil & Gas Real Estate &Construction Banking & Financial Services and Manufacturing sectors. Our strategy isto seek new customers and at the same time secure additional engagements from existingcustomers by providing high quality services and cross-selling new services. Our qualitystandards unflinching efforts for punctual order completions and our unmatched overallservice have resulted in significant recurring revenue from existing customers and alsoenabled us to garner clients who are some of the leading banking financial healthcaremanufacturing education and telecommunication names in India and abroad. We believe thatour current capabilities and plans for the future ensure that we are well positioned toattract and develop new customer relationships. Business from new customers is acceptedupon consideration of factors such as alignment of capabilities and customer expectationvolume of business and future business potential for close partnership with long-termassociation and an analysis of upfront costs.
The following table illustrates the concentration of our revenues among our topcustomers in lakhs). Percentage indicates % of total revenue.
| || |
|Top 5 customers ||229.21 ||86.40 ||68.57 ||74.92% ||67.78 ||91.74% |
|Top 10 customers ||258.82 ||97.56 ||88.42 ||96.60% ||73.49 ||99.47% |
Developed a long-standing relationship with our clients which include companies likeMicrosoft Pitney Bowes Copernicus Consulting Integrated Networks VOIP Connection SaiHospital Essel Propack and Tech Mahindra among others. Further we continuously endeavourto increase our cliental base and have a dedicated marketing team at several of our Indianand overseas offices for client acquisition.
Management discussion and Analysis Report
The company is a software development enterprise solution and consulting firm engagedin the business of providing a range of Information T echnology ("IT") solutionsto companies across sectors such as Healthcare Education Telecom Oil & Gas RealEstate & Construction Banking & Financial Services and Manufacturing sectors. Thecompany design develop and maintain software systems and solutions creates newapplications and enhances the functionality of the customers' existing software products.The company endeavour to bring together creativity and knowledge with positive businessstrategy to furnish the requirements of diverse clients with an inclusive range ofproducts and services which are comprehensive and cost-effective so that the client canfocus on their corecompetencies to improve or expand their businesses. The companydelivers services across all stages of the product life-cycle which enables us to workwith a wide-range of customers and allow the company to develop enhance and deploycustomers' software products. The various services offered by the company are SoftwareDevelopment Services Enterprise Portal ERP and CRM Implementation Consulting ServicesMobile Solutions RFID Solutions Cloud and IT Infrastructure Services and GeospatialServices. The comprehensive suite of service offerings allows the company to attract newcustomers and expand existing customer relationships. The company provide an array ofproducts and solutions like PowerERM - Employee Relationship Management Hospice -Healthcare Solution and iOnAsset - Asset Tracking & Management System RealWin - RealEstate CRM Solution Life2Care - Patient Relationship Management eDocNet - EnterpriseContent and Document Management Solution and eQuire - Office Automation and eProcurementManagement Solution which help our clients in strategising their business objectives. Asan offshore outsourcing company the company have various offshore development centres inIndia. Currently Octaware has 2 offices in India including registered office and a SEZoffice in Mumbai. The company is promoted by Mr. Aslam Khan and Mr. Sajid Hameed whoindividually have approximate 20 years of experience. Having worked with technologycompanies like TCS Microsoft Citibank and AskMe Inc. Mr. Aslam Khan started Octaware in2005 pooling all his experience. He was aided by Mr. Sajid Hameed who has
rich experience in setting up business developing markets managing customers andhandling overall businesses. In the year 2006 The company acquired 2 large customers inUS and the growth continued with our establishing partner relationships in Qatar in 2007allowing the company to offer specialised solution for the Middle East market. Later in2008 The company introduced solutions for various industries like healthcareprofessional services and real-estate industry by investing in inhouse productdevelopment.
The market for IT Products and Services is both highly competitive and rapidlyevolving. It has evolved into a consolidated global industry and the company facecompetition both in the domestic as well as the export markets. The company primarily facecompetition from the small and large Indian IT services companies as well as internationaltechnology services companies which offer broad-based services offshore captive centresof global corporations and technology firms. The company anticipate this competition tocontinue to grow as the demand for these services increases and expect additionalcompanies to enter the Indian market. The company expect that further competition willincrease and potentially include firms in countries with lower personnel costs than thoseprevailing in India.
Further Clients that presently outsource a significant proportion of their IT servicerequirements to vendors in India may seek to reduce their dependence on one country andoutsource work to other offshore destinations such as China Russia and Eastern Europeancountries. Also many countries have the advantage of being located in proximity to thecompany's main export markets of American and European countries. The company also facecompetition from other countries mainly in US and European countries that have advancedtechnology and ability to cater to large scale businesses in different parts of the world.There are number of competitors offering products and services similar to the company.Octaware believe the principal elements of competition in IT industry are price timelydelivery and reliability and most importantly pace in keeping up with the requiredchanging technology in the industry. The company has the belief that company's costeffective and integrated offerings focus on customer satisfaction and reliabilitycombined with quality consciousness provides company with competitive advantage in many ofproducts.
During the year under review Authorised Share Capital remained same as earlier i.e.42000000. During the year the paid-up capital of the company also remained at35905700.
Internal Control System and their Adequacy
The Company has adequate system of internal control to safeguard and protect from lossunauthorized use or disposition of its assets. All the transactions are properlyauthorized recorded and reported to the Management. The Company is following all theapplicable Accounting Standards for properly maintaining the books of accounts andreporting financial statements. The internal auditor of the company checks and verifiesthe internal control and monitors them in accordance with policy adopted by the company.
The Company continues to ensure proper and adequate systems and procedures commensuratewith its size and nature of its business.
The Company has framed a sound Risk Management Policy to identify and evaluate businessrisks and opportunities and the same has become integral part of Company's day to dayoperations. The key business risks identified by the Company are as follows viz. IndustryRisk Management and Operations Risk Market Risk Government Policy risk Liquidity riskand Systems risk. The Company has in place adequate mitigation plans for the aforesaidrisks.
The company has three subsidiary companies. One is in India that is "OctawareInformarion Technologies Pvt Limited" and Other two are in Dubai and Qatar namely"Octaware Gulf FZE" and "Octaware Gulf (QFC Branch)".
Your Directors do not recommend dividend for the year ended 31st March2019.
TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND:
Since there was no unpaid/unclaimed Dividend declared and paid last year theprovisions of Section 125 of the Companies Act 2013 do not apply.
Number of Meetings of the Board
The Board meets at regular intervals to discuss and decide on Company/business policyand strategy apart from other Board business.
The Board met Five (5) times in financial year 2018-19 i.e. on 28th May2018 20th July 2018 03rd September 2018 13thNovember 2018 11th February 2019.
Committee of the Board:
The Company's Board has the following committees:
1. Audit Committee
2. Nomination and Remuneration Committee
3. Stakeholders' Relationship Committee
As required the above committees consist of independent directors in majority.
Directors' Responsibility Statement
In accordance with the provisions of Section 134(5) of the Companies Act 2013 yourdirectors confirm that:
a) in the preparation of the annual accounts for the year ended March 31 2019 theapplicable accounting standards read with requirements set out under schedule III to theAct have been followed and there are no material departures from the same;
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 as at March 31 2019 and of the profit ofthe Company for the year ended on that date;
c) the Directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;
d) the Directors have prepared the annual accounts on a 'going concern' basis;
e) the Directors have laid down internal controls to be followed by the Company andthat such internal controls are adequate and are operating effectively; and
f) the Directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems are adequate and operating effectively.
During the year under review the company has not accepted any deposit within themeaning of Sections 73 and 74 of the Companies Act 2013 read with the Companies(Acceptance of Deposits) Rules 2014 (including any statutory modification(s) orre-enactment(s) for the time being in force).
The Company has in place a mechanism to identify assess monitor and mitigate variousrisks to key business objectives. Major risks identified by the business and functions aresystematically addressed through mitigating actions on a continuing basis. These arediscussed at the meeting of the Board of Directors of the Company.
The Company's internal control systems are commensurate with the nature of its businessand the size and complexity of its operations. The Board of Directors reviews adequacy andeffectiveness of the Company's internal control environment and monitors the implement ofauditors' recommendations.
Directors and Key Managerial Personnel
The composition of Board of Directors and details of Key Managerial Personnel for theF.Y. 2018-19 are as follows:
|Name of the Person ||Category ||With effect from and Tenure |
|Mohammed Aslam Khan ||Chairman and Managing Director ||November 9 2018-For a period of 3 years |
|Sajid Iqbal Abdul Hameed ||Whole Time Director CFO ||November 9 2018-For a period of 3 years |
|Mohammed Siraj Gunwan ||Whole Time Director ||November 9 2018-For a period of 3 years |
|Shariq Nisar ||Independent Director ||Resigned on January 31 2019 |
|Krishnan Narayanan ||Independent Director ||November 9 2015-For a period of 5 years |
|Usha Mishra ||Independent Director ||March 29 2018- For a period of 5 years |
|Rabia Khan ||Additional Director (Independent) ||February 11 2019- For a period of 5 years |
|Muzammil Memon ||Company Secretary ||November 20 2015 |
Mr. Shariq Nisar resigned from the post of Independent Director on January 31 2019 andMs. Rabia Khan was appointed as Additional Director (Independent) w.e.f. 11thFebruary 2019
Particulars of Employees
The information required pursuant to Section 197 read with rule 5 of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 in respect of employeesof the Company will be provided upon request. In terms of Section 136 of the Act thereports and accounts are being sent to the members and others entitled thereto excludingthe information on employees' p articulars which is available for inspection by themembers at the Registered office of the company during business hours on working days ofthe company up to the date of ensuing Annual General Meeting. If any member is interestedin inspecting the same such member may write to the company secretary in advance.
M/s. MVK Associates Chartered Accountants Statutory Auditors holds office till theconclusion of the ensuing Annual General Meeting. Your Board recommends M/s. MVKAssociates Chartered Accountants appointment as Statutory Auditors from the conclusion ofthis Annual General Meeting till the conclusion of the next Annual General Meeting.
Pursuant to the provision of section 138 of the Companies Act 2013 and the Companies(Accounts) Rules 2014 the Company has appointed M/s. Ashok K. Surana & AssociatesChartered Accountants to undertake the Internal Audit of the Company for the F.Y. 2018-19.There stood no adverse finding & reporting by the Internal Auditor in the InternalAudit Report for the year ended 31st March 2019.
Comments on Auditors Report
The Notes on financial statement referred to in the Auditors' Report areself-explanatory and do not call for any further comments. The Auditors' Report does notcontain any qualification reservation or adverse remark or disclaimers. The StatutoryAuditors have not reported any incident of fraud in the year under review.
Particulars of Loan given Investment made Guarantees given and Securities Provided(Section 186)
There were no loans guarantees or investments made by the Company under Section 186 ofthe Companies Act 2013 during the year under review and hence the said provision is notapplicable.
Particulars of Contracts or Arrangements with Related Parties referred to in Section188(1)
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. The particulars of contracts or arrangements with related parties referred to inSection 188(1) as prescribed in Form AOC - 2 of the rules prescribed under Chapter IXrelating to Accounts of Companies under the Companies Act 2013 is appended as AnnexureI.
Material changes and commitments affecting the financial position of the Company
There have been no material changes and commitments if any affecting the financialposition of the Company which have occurred between the end of the financial year of theCompany to which the financial statements relate and the date of the report.
Conservation of Energy Technology Absorption and Foreign Exchange Earnings and Outgo
The particulars regarding foreign exchange earnings and outgo appear as separate itemsin the notes to the Accounts. Since the Company does not own any manufacturing facilitythe other particulars relating to conservation of energy and technology absorptionstipulated in the Companies (Accounts) Rules 2014 are not applicable.
Extract of Annual Return
The extract of Annual Return in format MGT -9 for the Financial Year 2018-19 has beenenclosed with this report in Annexure II.
Secretarial Auditor & Report
The Board of Directors of the Company has appointed M/s. C. B. Jain & AssociatesPracticing Company Secretary to conduct the Secretarial Audit and their Report onCompany's Secretarial Audit is appended to this Report as Annexure III.
Corporate Social Responsibility
The provisions of Section 135 of the Companies Act 2013 are not applicable to theCompany. Corporate Governance Disclosure
As per Regulation 34(3) and Schedule V of SEBI (Listing Obligations and DisclosureRequirements) Regulations) 2015 a separate Section on Corporate Governance on corporategovernance practices followed by the Company an integral part of this Report. The Reporthas been attached in Annexure IV.
Statement on declaration given by independent directors under section 149 of theCompanies Act 2013
As required under provisions of the Act and SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 all Independent Directors of the Company have confirmedthat they meet the requisite criteria of independence.
Disclosure under the sexual harassment of Women at workplace (Prevention Prohibitionand Redressal) Act 2013
The Company has zero tolerance for sexual harassment at its workplace. The Company hasadopted an Anti-harassment Policy in line with the requirements of the Sexual Harassmentof Women at Workplace (Prevention Prohibition and Redressal) Act 2013. InternalComplaint Committee are set up to redress complaints received regularly and are monitoredby women line supervisors who directly report to the Chairman & Managing Director. Allfemale employees are covered under the policy.
The Company has complied with Secretarial Standards issued by the Institute of CompanySecretaries of India on Board meetings and Annual General Meetings.
Cost Records and Cost audit
Maintenance of cost records and requirement of cost audit as prescribed under theprovisions of Section 148(1) of the Companies Act 2013 are not applicable for thebusiness activities carried out by the Company.
Your Directors would like to express their sincere appreciation for the assistance andco-operation received from the banks Government authorities customers vendors andmembers during the year under review. Your Directors also wish to place on record theirdeep sense of appreciation for the committed services by the Company's executives staffand workers.
| ||By Order of the Board of Directors |
| ||For Octaware Technologies Limited |
| ||Sd/- |
| ||Mohammed Aslam Khan |
|Place: Mumbai ||Chairman & Managing Director |
|Date: 29-05-2019 ||DIN No:00016438 |