SOFCOM SYSTEMS LIMITED
Your Directors have pleasure in presenting the 22nd Annual Report of yourCompany along with the Audited Statement of Accounts for the year ended March 31 2017.
1. FINANCIAL RESULTS:
|Particulars ||2016-2017 ||2015-2016 |
|Business & Other Income ||1463200.00 ||12450000.00 |
|Other Expense excluding Interest Depreciation & Tax ||4061294.00 ||12045488.00 |
|Profit / (Loss) before Interest Depreciation & Tax ||(2598094.00) ||371794.00 |
|Less: Interest ||-- ||-- |
|Less: Depreciation ||-- ||32718.00 |
|Profit / (Loss) before tax ||(2598094.00) ||339076.00 |
|Exceptional Items || || |
|Less: Provision for Tax: || || |
|a. Current Year ||-- ||100000.00 |
|b. Deferred Tax ||(802370.00) ||(1619.00) |
|c. MAT Credit Entitlement || || |
|d. Short / Excess for earlier years ||17360 ||-- |
|Profit / (Loss) for the Period ||(1813084.00) ||273413.00 |
|Balance brought forward from the previous year ||(544508.00) ||(817921.00) |
|Total Balance carried to Balance Sheet ||(2357592.00) ||(544508.00) |
(i) Results O f Operations:
Total revenues earned during the year amounted to Rs. 1463200 as compared to Rs.12450000 in the previous financial year.
(ii) Business Operations:
(1) Software Services:
The revenue generated from this segment during the Financial Year 2016-17 was Rs.735000 as against Rs. 1200000 during the previous financial year.
(2) Service Income:
During the year there is increase in the income from consultancy services. The revenuegenerated from this segment during current Financial Year 2016-17 is Rs. 728200/ - asagainst Nil during the previous financial year.
(3) Sale of Algorithms (IPR):
During the year there is no increase and decrease in the income from sale ofalgorithms. The revenue generated from this segment during previous financial year 2016-17was Rs.1 12 50000.
Company has made profits for the year 2016-17 but in order to ease the operations ofthe business plough back of the profits is done and therefore the directors are notrecommending any dividend for the financial year 2016-17.
3. TRANSFER TO RESERVES:
The Company proposes to transfer no amount to the general reserve.
4. INFORMATION ABOUT SUBSIDIARY/ASSOCIATE COMPANY:
The company has an associate company - Abok Spring Private Limited
Related Party Transactions- During the year under review the Company has not enteredinto any contracts or arrangements with related parties as per section 188(1) of theCompanies Act 2013.
5. TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND:
The provisions of Section 125(2) of the Companies Act 2013 is not applicable as therewas no Dividend declared and paid last year.
Company has not accepted any deposits from the public during the year under review.
7. MATERIAL CHANGES AND COMMITMENTS:
As on the date of this report no material changes and commitments affecting theFinancial position of the Company have occurred between the end of the financial year towhich these financial statements relate.
8. EXTRACT OF ANNUAL RETURN
An Extract of Annual Return as required under section 92(3) of the Companies Act 2013and rule 12(1) of the Companies (Management and Administration) Rules 2014 in Form MGT-9is annexed in Annexure-D herewith.
9. DIRECTORS' RESPONSIBILITY STATEMENT:
Pursuant to clause (c) of sub-section (3) of Section 134 of the Companies Act 2013with respect to Directors' Responsibility Statement it is confirmed that-
(a) In the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures;
(b) Such accounting policies have been selected and applied consistently and judgmentsand estimates have been made that are reasonable and prudent so as to give a true and fairview of the state of affairs of the company at the end of the financial year and of theprofit and loss of the company for that period;
(c) Proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordance with the provisions of Companies 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) That internal financial controls were laid down to be followed and that suchinternal financial controls were adequate and were operating effectively.
(f) That proper system was devised to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively.
10. SHARE CAPITAL:
The Company has 4155000 Equity Shares of Rs. 10 each amounting to Rs. 41550000.During the year under review the Company has not issued any shares or any convertibleinstruments.
The Company has only one class of Equity Share having a par value of Rs. 10/ -eachholder of share is entitled to one vote per share with same rights.
During the Year 2016-17 the company has not made any issue of equity shares withdifferential voting rights Sweat Equity Shares and employee stock option.
11. LISTING OF SHARES
Shares of company has been listed on Bombay Stock Exchange Madras Stock Exchange
a. Statutory Auditors:
M/s R MOHNOT & Co. Chartered Accountants (Firm Registration No. 001654C) areappointed as Statutory Auditors of the Company to hold office from the conclusion of thisAGM till the conclusion of the Annual General Meeting to be held for the Financial Yearending on 31st March 2022. Now Board of Directors recommends the appointmentof M/s R MOHNOT & Co. Chartered Accountants (Firm Registration No. 001654C).In this regard the Company has received a certificate from the auditors to the effectthat if they are reappointed it would be in accordance with the provisions of Section 141of the Companies Act 2013.
b. Statutory Auditors' Report:
The observations made by the Auditors in their Report read with relevant notes as givenin the Notes on Accounts annexed to the Accounts are self explanatory and therefore donot call for any further comments under Section 134 (3)(f) of the Companies Act 2013.
The Auditors of the Company have not raised any queries or made any Qualifications onthe Accounts adopted by the Board which were then audited by them.
c. Secretarial Auditor:
The provisions of Section 204 read with Section 134(3) of the Companies Act 2013 theBoard has appointed M/s. Mahendra Khandelwal & Co. a firm of Company Secretaries inPractice as the Secretarial Auditor of the Company for the financial year 2016-17.
d. Secretarial Audit Report
The Secretarial Audit Report is annexed herewith as Annexure B. The Auditors of theCompany have not raised any queries or made any Qualifications with respect to SecretarialAudit conducted by them.
13. DIRECTORS /KEY MANAGERIAL PERSONNEL:
a) Re-Appointment of Managing Director:
As per Sections 196 197 and 203 read with other applicable provisions and Schedule Vof the Companies Act 2013 Mr. KISHORE MEHTA (DIN:00043865) be and is hereby re-appointedas Managing Director of the company for a period of five years upon such terms andconditions including terms of remuneration as recommended by Nomination and RemunerationCommittee.
b) Retire by Rotation
In terms of Section 152 (6) of the Companies Act 2013 Mr. NAWRATAN MALL MEHTA (DIN:00858126) Director of the company retires by rotation and being eligible offers himselffor re-appointment. The Board recommends his re-appointment.
c) Independent Directors
The Board of the Company at March 31 2017 consisted of 6 directors out of which 3 areindependent directors one is Managing Director and two are non-executive director.
All Independent Directors have given declaration that they meet the criteria ofindependence as laid down under Section 149(6) of the Companies Act 2013 and Regulation16 of Securities and Exchange Board of India (Listing Obligations and DisclosureRequirements) Regulations 2015 which were placed at the Board meeting held on 28/05/2016.
d) Composition of Board of Director
The Board of the Company as on March 31 2017 consist of 6 directors out of which 3 areIndependent directors one is Managing Director and two are Non-Executive director.
e) Changes in the composition of Key Managerial Personnel (other than Board ofDirectors):
Anil Nahar was appointed as CFO of the Company in the Board meeting held on 31stMarch 2016 but he stepped down from his position due to his pre-occupation elsewhere. Hisresignation was taken and accepted by the Board in its meeting held on 17thJuly 2016.
Hari Om Vijay was appointed as CFO of the Company in the Board Meeting held on 17thJuly 2016 and further appointment is confirmed in Annual General Meeting held on01/09/2016.
|NAME OF KEY MANAGERIAL PERSONNEL ||NATURE OF CHANGE IN DESIGNATION ||DATE OF CHANGE IN DESIGNATION |
|1. ANIL NAHAR ||RESIGNATION ||17/06/2016 |
|2. HARI OM VIJAY ||APPOINTMENT (CFO) ||17/06/2016 |
14. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS ANDOUTGO
The details of conservation of energy technology absorption foreign exchange earningsand outgo are as follows:
A. Conservation of energy:
The information required under the provisions of section 134 (3) (m) of the CompaniesAct 2013 read with Rule 8(3) of the Companies (Accounts) Rules 2014 relating to theconservation of energy and technology absorption is not applicable as the Company is notcarrying out any manufacturing operation.
B. Foreign exchange earnings and Outgo:
|PARTICULARS ||AS ON 31.03.2017 ||AS ON 31.03.2016 |
|a) Earnings in foreign exchange ||Nil ||Nil |
|b) Expenditure / outgo in foreign exchange (Travelling) ||Nil ||Nil |
The Board of Directors during the year 2016-17 met Nine times on:
During the year 7 (Seven) Board Meetings 3 (Two) Nomination & RemunerationCommittee 5 (five) Audit Committee 1(one) shareholders/investors grievance committee and1(One) Independent Directors meeting were convened and held. The gap between the Meetingswas within the period prescribed under the Companies Act 2013.
|DATE OF BOARD MEETING ||BOARD'S STRENGTH ||NO. OF DIRECTORS PRESENT |
|1. 28/05/2016 ||6 ||6 |
|2. 17/06/2016 ||6 ||6 |
|3. 22/07/2016 ||6 ||6 |
|4. 01/08/2016 ||6 ||6 |
|5. 08/08/2016 ||6 ||6 |
|6. 12/11/2016 ||6 ||6 |
|7. 09/02/2017 ||6 ||6 |
16. DETAILS OF ESTABLISHMENT OF VIGIL MECHANISM FOR DIRECTORS AND EMPLOYEES:
The company has established a vigil mechanism for grievances redressal of director andemployees of the company which will help in reporting genuine concerns or grievances ofdirectors and employees
17. CORPORATE SOCIAL RESPONSIBILITY (CSR):
As the Company does not fall under the Class of Companies as prescribed under Section135 of Companies Act 2013 and Rules made there under therefore the provisions related toCorporate Social Responsibility is not applicable to the Company.
Therefore Company is not liable to contribute towards Corporate Social Responsibility.
18. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS UNDER SECTION 186:
Particulars of Loan given Investments made guarantees given and securities providedalong with the purpose for which the loan or guarantee or security is proposed to beutilized by the recipient are provided in standalone financial statement.
19. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES:
The particulars of contracts or arrangements entered into by the Company with relatedparties referred to in sub-section (1) of section 188 of the Companies Act 2013 includingcertain arms length transactions under the proviso thereto have been disclosed in Form No.AOC -2 annexed.
20. MANAGERIAL REMUNERATION:
(A) Due to inadequacy of profit no remuneration is paid to directors of the company.
(B) There is no Employee who is in receipt of more than Rs. 850000 P.M. or Rs.10200000 per financial year under section 5(2) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 in the financial 2016-17.
(C) The company does not have any material information to report in accordance withRule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014.
21. RISK MANAGEMENT POLICY
The Company has its Risk Management Policy to identify and deal with the risks andthreats that could impact the organization. Risk Management Policy is available forinspection at the Registered Office of the Company during business hours on any workingday.
23. DETAILS IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THEFINANCIAL STATEMENTS.
The Company has proper place and adequate internal control systems commensurate withthe nature of its business and size and complexity of its operations. Internal controlsystems comprising of policies and procedures are designed to ensure reliability offinancial reporting timely feedback on achievement of operational and strategic goalscompliance with policies procedure applicable laws and regulations and all assets andresources are acquired economically used efficiently and adequately protected.
24. CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSION & ANALYSIS REPORTS:
The Corporate Governance and Management Discussion & Analysis Report which forms apart of this Report are set out separately together with the Certificate from theAuditors of the Company regarding compliance with the requirements of Corporate Governanceas stipulated in SEBI (LODR) Regulations 2015.
25. GREEN INTIATIVES
Electronic copies of the Annual Report 2016-17 and the notice of 22nd AGMare sent to all members whose e-mail address is registered with the company/depositoryparticipants. For members who have not registered their email address physical copies aresent in the permitted mode.
26. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS ORTRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATIONS IN FUTURE:
There were no orders passed by the regulators or courts or tribunals impacting thegoing concern status and company's operations in future.
An acknowledgement with thanks is hereby conveyed to all with whose help cooperationand hard work the Company was able to achieve the results.
| || ||By order of the Board |
| || ||For SOFCOM SYSTEMS LIMITED |
| || ||CIN: L72200RJ1995PLC010192 |
|Date:31.08.2017 || || |
|Place: Jaipur ||SD/- ||SD/- |
| ||KISHORE MEHTA ||NAWRATAN MALL MEHTA |
| ||Director ||Director |
| ||Din: 00043865 ||Din: 00858126 |