To the Members
Paired Technologies Limited
Hyderabad Telangana India
The Board of Directors hereby submits the report of the business and operations of yourCompany (the Company' or Paired') along with the audited "Financialstatement for the "Fiscal Year ended March 31 2017. The Consolidated performance ofthe Company and its subsidiaries has been referred to where required.
1. FINANCIAL SUMMARY/HIGHLIGHTS:
The performance during the period ended 31st March 2017 has been as under:(Amount in Rs.)
|Particulars || |
| ||2016-2017 ||2015-2016 ||2016-2017 ||2015-2016 |
|Turnover/Income (Gross) ||11785514 ||22000194 ||427491001 ||412523247 |
|Loss before Finance charges Depreciation Taxation and Exceptional item ||(12293075) ||(6137979) ||(106159069) ||(205192021) |
|Less: Finance charges (excluding amount capitalized) ||0 ||0 ||0 ||3787110 |
|Loss before Depreciation Taxation and Exceptional item ||(12293075) ||(6137979) ||(106159069) ||(208979131) |
|Less : Depreciation ||2095753 ||2649171 ||7574412 ||5755852 |
|Loss before Taxation and Exceptional item ||(14388828) ||(8787148) ||(113733481) ||(214734983) |
|Less: Exceptional item ||7791886 ||0 ||7791886 ||0 |
|Loss before Tax ||(22180714) ||(8787148) ||(121525367) ||(214734983) |
|Less : Current tax ||0 ||1094224 ||0 ||1094224 |
|Less: Deferred Tax benefits ||0 ||0 ||0 ||(113993) |
|Less : Taxes of earlier years ||7457083 ||0 ||7457083 ||0 |
|Loss after Tax ||(29637797) ||(9881372) ||(128982450) ||(215715214) |
2. REVIEW OF OPERATIONS:
Revenues - standalone
During the year under review the Company has recorded an income of Rs. 11785514 andloss of Rs. 29637797 as against the income of Rs. 22000194 and loss of Rs. 9881372 in theprevious financial year ending 31.03.2016.
Revenues - Consolidated
During the year under review the Company has recorded an income of Rs. 427491001/- andloss of Rs. 128982450/- as against the income of Rs. 412523247/- and loss of Rs.215715214/- in the previous financial year ending 31.03.2016. It has reduced its lossessignificantly by 40%.
The Company is looking forward for good profit margins in near future.
3. EMPLOYEE STOCK OPTION SCHEME
Details of the options up to March 31 2017 are set out in the Annexure-A to thisreport as required under clause 12 of the Securities and Exchange Board of IndiaRegulation 14 of SEBI (Share Based Employee Benefits) Regulations 2014.
4. CONSOLIDATED FINANCIAL STATEMENTS
In compliance with the provisions of the Companies Act 2013 and the AccountingStandards AS-21 and AS-27 on consolidated financial statements your Directors haveprovided the consolidated financial statements for the financial year ended March 31 2017which forms part of the Annual Report.
5. BOARD MEETINGS
During the year 2016-17 six Board meetings were held the details of which are givenin the Corporate Governance Report.
6. BOARD EVALUATION
In accordance with the provisions of Section 134 of the Act and Regulation 17 of theListing Regulations the Board has carried out evaluation of its own performance theperformance of committees of the Board namely Audit Committee Risk ManagementCommittee Stakeholders Relationship Committee and Nomination and Remuneration Committeeand also the directors individually.
The manner in which the evaluation was carried out and the process adopted has beenmentioned in the Corporate Governance Report.
7. CHANGE IN THE NATURE OF BUSINESS IF ANY:
During the period under review and the date of Board's Report there was no change inthe nature of Business.
8. DEPOSITS FROM PUBLIC:
The Company has not accepted any deposits from public and as such no amount on accountof principal or interest on deposits from public was outstanding as on the date of thebalance sheet.
9. TRANSFER TO RESERVES:
Directors have decided not to transfer any amount to reserves for the year.
Keeping the Company's growth plans in mind your Directors have decided not torecommend dividend for the year.
11. REVISION OF FINANCIAL STATEMENTS:
There was no revision of the financial statements for the year under review.
PALRED PTRON and LATESTONE are key intangible assets of the Company and itssubsidiaries.
13. MANAGEMENT DISCUSSION AND ANALYSIS:
In terms of the provisions of Regulations 34 of Securities and Exchange Board of India(Listing Obligations and Disclosure Requirements) 2015 the Management's Discussion andAnalysis is set out in this Annual report.
Our Strategic objective is to build multiple verticals in E-Commerce and IT and ITrelated business and obtain sustainable growth. The Key word for the year has been"PERSEVERENCE" and this has been applied to everything we do.
Information about the Financial Performance / Financial Position of the Subsidiaries /Associates/ Joint Ventures
The new domains of Business which have gained momentum during the year are e-commerceand IT solutions for E-commerce.
At the beginning of the year we had two direct subsidiaries -
a) Palred Online Technologies Private Limited and
b) Palred Technology Services Private Limited.
At the beginning of the year we had two steps down Subsidiaries
a) Palred Technology Services USA - subsidiary of Palred Technology Services PrivateLimited and
b) Palred Online Bilism Teknoljileri Ticaret Anonim Sirketi Turkey Istanbul -subsidiary of Palred Online Technologies Private Limited.
Palred Online Technologies Private Limited:
Palred Online Technologies Private Limited owns and
operates e-commerce portal Latestone.com India's only e-tailer specialized in techand mobile accessories such as Bluetooth devices mobile covers tablet accessoriescables power banks Android TVs headsets smart watches or CCTV's it stocks over 10000different products in its inventory and operates through its own Fulfillment centers inDelhi and Mumbai.
During the year the company has continued its growth and has declared growth of 8% inNet Revenue on a year on year basis. While showing the growth the Company hassignificantly reduced its losses by 60%. In a very short span of time LatestOne.com hasreached a milestone by achieving an average of 4000 orders per day from an average of 100orders per day in the beginning. The website receives over 3.5 Million visitors in a monthand till date has successfully shipped / delivered more than 2.5 million orders since thecommencement of its operations.
The market size of Tech & Mobile accessories market in India is estimated at Rs.20000 crores by Value It is the fastest growing product range in the online category andthe Market is expected to grow 20-25% year-on-year for the next 3 years.
The Company also plans to increase revenue by expanding product categories sellingquality products and creating long term goodwill and set up fulfillment centers toprovide quicker delivery of products sourced locally.
The Company is also planning to launch its ecommerce portal in International Markets.
Palred Technology Services Private Limited.
Palred Technology Services Private Limited is the IT vertical of Palred. It provides ITsolutions to access relevant data provided in a timely and cost-effective mannerdevelopment of software program for ecommerce portal latestone.com. PTS has also sold itsproperitory ecommerce solutions to companies like Health & Glow Lorna Jane Australia& TVS Group India.
During the year the Board of Directors (the Board') reviewed the affairs of thesubsidiaries. In accordance with Section 129(3) of the Companies Act 2013 we haveprepared consolidated financial statements of the Company which forms part of this AnnualReport.
Highlights of performance of subsidiary companies and their contribution to the overallperformance of the company during the period under report have been indicated in theBoards' Report wherever required. Further a statement containing the salient features ofthe financial statement of our subsidiaries in the prescribed format AOC-l is appended asAnnexure B to the this report. The statement provides the details of performance andfinancial positions of each of the subsidiaries.
In accordance with Section 136 of the Companies Act 2013 the audited financialstatements including the consolidated financial statements are available on our websitewww. palred.com.
14. RISK MANAGEMENT POLICY:
Your Company follows a comprehensive system of Risk Management. Your Company hasadopted a procedure for
assessment and minimization ofprobable risks. It ensures that all the risks are timelydefined and mitigated in accordance with the well-structured risk management process.
15. DISCLOSURES UNDER SECTION 134 (3) (l) OF THE COMPANIES ACT 2013:
There have been no material changes and commitments affecting the financial positionof the Company which occurred during between the end of the financial year to which thefinancial statements relate and the date of this report.
16. DISCLOSURE UNDER SECTION 43(a)(ii) OF THE COMPANIES ACT 2013:
The Company has not issued any shares with differential rights and hence no informationas per provisions of Section 43(a)(ii) of the Act read with Rule 4(4) of the Companies(Share Capital and Debenture) Rules 2014.
17. DISCLOSURE UNDER SECTION 54(1)(d) OF THE COMPANIES ACT 2013:
The Company has not issued any sweat equity shares during the year under review andhence no information as per provisions of Section 54(1) (d) of the Act read with Rule8(13) ofthe Companies (Share Capital and Debenture) Rules 2014.
18. DISCLOSURE UNDER SECTION 62(1)(b) OF THE COMPANIES ACT 2013:
The Company has not issued any equity shares under Employees Stock Option Scheme duringthe year under review and hence no information as per provisions of Section 62(1)(b) ofthe Act read with Rule 12(9) of the Companies (Share Capital and Debenture) Rules 2014.
19. DETAILS OF SIGNIFICANT MATERIAL ORDERS PASSED BY REGULATORS COURTS TRIBUNALSIMPACTING THE GOING CONCERN BASIS OF THE COMPANY:
There were no significant material orders passed by regulators courts tribunalsimpacting the going concern basis of the Company.
20. CORPORATE GOVERNANCE:
A Separate section titled "Report on Corporate Governance" along with theAuditors' Certificate on Corporate Governance as stipulated under Regulation 34 read withSchedule V of Securities and Exchange Board of India (Listing Obligations and DisclosureRequirements) Regulations 2015 as Annexure-H to this report.
21. MANAGEMENT DISCUSSION AND ANALYSIS REPORT:
Management discussion and analysis report for the year under review as stipulated underRegulation 4(3) read with schedule V Part B of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 with the stock exchange in India is presented in aseparate section forming as Annexure-J to this report.
22. DIRECTORS AND KEY MANAGERIAL PERSONNEL:
Mr. Palem Srikanth Reddy is the Chairman and Managing Director of the Company. Mrs.Richa Patnaik Mr. Atul
Sharma and Mr. S. Vijaya Saradhi are the Independent Directors on Board of Palred andN.Archana Sastry has resigned from the post of company secretary w.e.f.31.03.2017.
23. COMMITTEES OF THE BOARD:
Currently the Board has 4 committees: the Audit Committee the Nomination andRemuneration Committee the Stakeholder Relationship Committee and the Risk ManagementCommittee. A detailed note on composition of the Board and its committees is provided inthe Corporate Governance Section of the Annual Report.
24. EXTRACT OF ANNUAL RETURN:
As required pursuant to section 92(3) of the Companies Act 2013 and rule 12(1) of theCompanies (Management and Administration) Rules 2014 an extract of annual return in MGT9 as Annexure-E to this report.
25. AUTHORISED AND PAID UP CAPITAL OF THE COMPANY:
The authorized capital of the Company stands at Rs. 350000000/- divided into 28038800equity shares of Rs.10/- each and 696120 14% redeemable optionally convertible cumulativepreference shares of Rs. 100/- each. The company's paid up capital is Rs.82130830/-divided into 8213083 equity shares of Rs. 10/- each.
26. DECLARATION FROM INDEPENDENT DIRECTORS ON ANNUAL BASIS:
The Company has received declarations from Mr. S. Vijaya Saradhi Mr. Atul Sharma andMs. Richa Patnaik Independent directors of the company to the effect that they aremeeting the criteria of independence as provided in Sub-section (7) of Section 149 of theCompanies Act 2013 and Regulation 25 of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015. The prescribed declarations are appended as Annexure-I tothis report.
27. DIRECTOR'S RESPONSIBILITY STATEMENT:
In pursuance of section 134 (5) of the Companies Act 2013 the Directors herebyconfirm that:
a) In the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures;
b) The Directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the company at the end of the financial year and ofthe profit and loss of the company for that period;
c) The Directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the company and for preventing and detecting fraud and other irregularities;
d) The Directors had prepared the annual accounts on a going concern basis; and
e) The Directors had laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively.
f) The Directors had devised proper systems to ensure compliance with the provisions ofall applicable laws and that such systems were adequate and operating effectively.
28. VIGIL MECHANISM:
Vigil Mechanism Policy has been established by the Company for directors and employeesto report genuine concerns pursuant to the provisions of section 177(9) & (10) of theCompanies Act 2013. The same has been placed on the website of the Company www.palred.com
29. STATUTORY AUDITORS:
The existing auditors M/s. Walker Chandiok & Co. LLP who were appointed asStatutory Auditors of the Company in the Annual General Meeting of the Company held onSeptember 30 2016 to hold office till the conclusion of the AGM to be held in the year2019 subject to ratification at every Annual General Meeting held in between. Accordinglythe ratification of appointment of M/s. Walker Chandiok & Co. LLP as statutoryauditors of the Company is placed before the shareholders for approval. The Auditors'Report for fiscal 2017 does not contain any qualification reservation or adverse remark.
The Auditors' Report is enclosed with the financial statements in this Annual Report.
30. INTERNAL AUDITORS:
Pursuant to section 138 of the Companies Act 2013 and rules made thereunder M/s.Lakshmi Niwas & Co. Chartered Accountants Hyderabad were appointed as InternalAuditors of the Company to conduct internal audit of the functions and activities of thecompany.
The Board has re-appointed M/s. Lakshmi Niwas & Co. Chartered AccountantsHyderabad as Internal Auditors for the Financial Year 2017-2018
31. SECRETARIAL AUDIT:
Pursuant to the provisions of Section 204 ofthe Companies Act 2013 and The Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hadappointed M/s. S. S. Reddy & Associates a firm of Company Secretaries in Practice toundertake the Secretarial Audit of the Company. The Report of the Secretarial Auditcarried out is annexed herewith as Annexure-F to this report.
The Board at its meeting held on May 26 2017 has reappointed M/s. S. S. Reddy &Associates Practicing Company Secretaries as Secretarial Auditor for conductingSecretarial Audit of the Company for FY 2017-18.
32. AUDIT REPORTS:
(a) Statutory Auditors Report:
The Board has duly reviewed the Statutory Auditor's Report on the Accounts for the yearended March 31 2017 and has noted that the same does not have any reservationqualification or adverse remarks. However the Board decided to further strengthen theexisting system and procedures to meet all kinds of challenges that may occur in theindustry.
(b) Secretarial Audit Report:
The Board has duly reviewed the Secretarial Audit
Report on the Compliances according to the provisions of section 204 of the CompaniesAct 2013 and after the sale of business the Company does not have any operating businessyet and is still in the process of appointing right candidate as CFO.
33. GOODS AND SERVICES TAX (GST)
The introduction of Goods and Services Tax (GST) is a very significant step in thefield of indirect tax reforms in India. By amalgamating a large number of Central andState taxes into a single tax it would mitigate cascading or double taxation in a majorway and pave the way for a common national market.
The transition to GST scenario is a major change process and the Company hasestablished a dedicated team to evaluate the impact analysis and carry out changes to thebusiness process &e-commerce industry as per the GST framework.
34. INDIAN ACCOUNTING STANDARDS
The Ministry of Corporate Affairs vide its notification dated 16th February 2015 hasnotified the Companies (Indian Accounting Standards) Rules 2015. In pursuance of the saidnotification the Company will adopt Indian Accounting Standards with effect from 01stApril 2017. The implementation of Indian Accounting Standards (IAS) is a major changeprocess for which the Company has set up a dedicated team and is providing desiredresources for its completion within the time frame. The impact of the change on adoptionof said IAS is being assessed.
35. AUDITORS' CERTIFICATE ON CORPORATE GOVERNANCE:
As required by SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 the auditors' certificate on corporate governance is enclosed as Annexure-G to thisreport. The auditors' certificate for the financial year 20162017 does not contain anyqualification reservation or adverse remark.
36. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE OUTGO:
The required information as per Sec.134 (3) (m) of the Companies Act 2013 is providedhereunder and Rule 8 of Companies (Accounts) Rules 2014:
A. Conservation of Energy:
Your Company's operations are not energy intensive. Adequate measures have been takento conserve energy wherever possible by using energy efficient computers and purchase ofenergy efficient equipment.
B. Technology Absorption:
1. Research and Development (R&D): NIL
2. Technology absorption adoption and innovation: NIL
C. Foreign Exchange Earnings and Out Go:
1. Foreign Exchange Earnings: Nil
2. Foreign Exchange Outgo: Nil
37. CORPORATE SOCIAL RESPONSIBILTY POLICY:
Since your Company does not have net worth of Rs. 500 Crore or more or turnover of Rs.1000 Crore or more or a net profit of Rs. 5 Crore or more during the financial yearsection
135 of the Companies Act 2013 relating to Corporate Social Responsibility is notapplicable and hence the Company need not adopt any Corporate Social ResponsibilityPolicy.
38. SECRETARIAL STANDARDS:
The company is in compliance with Secretarial Standards issued by The Institute ofCompany Secretaries of India on Meetings of the Board of Directors and General Meetings.
The properties and assets of your Company are adequately insured.
40. PARTICULARS OF LOANS GUARANTEES:
The Company has not availed any facilities of Credit and Guarantee.
41. DISCLOSURE OF INTERNAL FINANCIAL CONTROLS:
The Company has in place adequate internal control systems which commensurate with itssize nature of business and complexity of its operations and are designed to provide areasonable degree of assurance regarding the effectiveness and efficiency of operationsthe adequacy of safeguard for assets internal control over financial reporting andcompliance with applicable laws and regulations. Internal audit function evaluates theadequacy of and compliance with policies plans regulatory and statutory requirements.
The Internal Auditors directly report to the Board's Audit Committee thus ensuring theindependence of the process. It also evaluates and suggests improvement in effectivenessof risk management controls and governance process. The Audit committee and Boardprovides necessary oversight and directions to the Internal audit function andperiodically reviews the findings and ensures corrective measures are taken.
42. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES:
Particulars of Contracts or Arrangements with related Parties: Particulars of Contractsor arrangements with Related Parties referred to in Section 188(1) of the Companies Act2013 in the Prescribed Form AOC-2 is appended as Annexure-C to this report.
43. DISCLOSURE ABOUT COST AUDIT:
Cost Audit is not applicable for the financial year 2016-17.
44. EMPLOYEE RELATIONS:
Your Directors are pleased to record their sincere appreciation of the contribution bythe staff at all levels in the improved performance of the Company.
The ratio of remuneration of each director to the median of employees' remuneration asper Section 197(12) of the Companies Act 2013 read with Rule 5(1) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 is appended asAnnexure-D to this report.
None of the employees is drawing Rs. 850000/- and above per month or Rs.10200000/-and above in aggregate per annum the limits prescribed under Section 134 of the CompaniesAct 2013.
45. RATIO OF REMUNERATION TO EACH DIRECTOR:
Ratio of Remuneration to Each Director: Under section 197(12) of the Companies Act2013 and Rule 5(1) (2) & (3) of the Companies(Appointment & Remuneration) Rules2014 the ratio of remuneration paid to Managing Director and maiden employees is 3:1
46. NON-EXECUTIVE DIRECTORS' COMPENSATION AND DISCLOSURES:
None of the Independent / Non-Executive Directors has any pecuniary relationship ortransactions with the Company which in the Judgment of the Board may affect theindependence of the Directors.
47. INDUSTRY BASED DISCLOSURES AS MANDATED BY THE RESPECTIVE LAWS GOVERNING THECOMPANY:
The Company is not a NBFC Housing Companies etc. and hence Industry based disclosuresis not required.
48. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTIONPROHIBITION AND REDRESSAL) ACT 2013:
The Company has in place a Sexual Harassment Policy in compliance with the requirementsof the Sexual Harassment of Women at Workplace (Prevention Prohibition and Redressal)Act 2013. The Company always endeavors to create and provide an environment that is freefrom discrimination and harassment including sexual harassment. The Internal ComplaintsCommittee (ICC) has been set up to redress complaints regarding sexual harassment if any.
The Directors further state that during the year under review there were no casesfiled pursuant to the Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013.
49. APPRECIATION & ACKNOWLEDGEMENT:
Your Directors place on record their appreciation for the overwhelming co-operation andassistance received from the investors customers business associates bankers vendorsas well as regulatory and governmental authorities. Your Directors also thanks theemployees at all levels who through their dedication co-operation support and smartwork have enabled the company to achieve a moderate growth and is determined to poise arapid and remarkable growth in the year to come.
Your Directors also wish to place on record their appreciation of businessconstituents banks and other "financial institutions and shareholders of the Companylike SEBI BSE NSE NSDL CDSL ICICI Bank Kotak Mahindra Bank and State Bank of Indiaetc. for their continued support for the growth of the Company.
| ||For and on behalf of the Board of |
| ||Paired Technologies Limited |
| ||Sd/- |
|Place : Hyderabad ||Palem Srikanth Reddy |
|Date : 04.09.2017 ||Chairman & Managing Director |
| ||(DIN: 00025889) |