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Softsol India Ltd.

BSE: 532344 Sector: IT
NSE: N.A. ISIN Code: INE002B01016
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NSE 05:30 | 01 Jan Softsol India Ltd
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VOLUME 61
52-Week high 53.50
52-Week low 29.10
P/E 14.11
Mkt Cap.(Rs cr) 77
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 46.00
CLOSE 46.00
VOLUME 61
52-Week high 53.50
52-Week low 29.10
P/E 14.11
Mkt Cap.(Rs cr) 77
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Softsol India Ltd. (SOFTSOLINDIA) - Director Report

Company director report

Dear Members

The Directors have pleasure in presenting the 27th Directors' Report on the businessand operations of your Company for the year ended March 31 2017.

Financial Highlights

(Amount in Rs. Lakhs)

Stand Alone

Consolidated

31-03-2017 31-03-2016 31-03-2017 31-03-2016
Revenue from Operations 250.29 367.69 3810.93 5855.16
Other Income 1126.36 1075.31 1202.96 1116.19
Total Revenue 1376.65 1443.00 5013.89 6971.36
Profit before Interest Depreciation & Tax (Before Exceptional Items) 642.82 472.09 764.65 525.04
Depreciation 286.02 336.13 289.13 340.22
Finance Costs 1.03 28.36 4.37 48.62
Profit before Tax (Before Exceptional Items) 355.77 107.60 471.15 136.20
Exceptional Items - -
Current Tax 72.55 22.00 117.70 34.44
Deferred Tax 0 (9.05) - (9.04)
Profit after Tax 283.22 94.65 353.45 110.80
Dividend (Interim Dividend) - - - -
General Reserve - - - -
EPS (Basic & Diluted) (in Rs.) 1.68 0.56 2.10 0.66

Review of Operations

During the year under review your Company recorded income of Rs.250.29 lakhs fromexport of software in comparison with previous year's income of Rs. 367.69 Lakhs. Yourcompany achieved net profit of Rs.283.22 Lakhs for the year in comparison with theprevious year's net profit of Rs. 94.65 Lakhs.

Review of operations of Wholly owned subsidiary

SoftSol Resources Inc. (SRI) a wholly owned subsidiary of your Company recorded totalrevenue of US$ .5.67 Millions for the year 2017 in comparison with the previous year'srevenue of US$ 8.67 Millions. SRI recoded net profit of US$ 107064 for the year 2017 incomparison with the previous year's net profit of US$ 25060.

Outlook and Business:

Softsol India Limited is an IT services company that focuses on enabling businesses toachieve their strategic objectives.

The tech industry is being reshaped in numerous ways. Disruption is evident in softwareand services delivery business models the vast amount of money being poured intostartups of all stripes the cloud big data entrepreneurialism and constant innovation.Against that backdrop companies can no longer rely on one-note value strategies. Analystsindicate which immediate path holds the most chance for short-term success but over timeboth improving margins and finding new revenue streams are critical for success.

The Company is taking planned steps to diversify its revenue sources by changing itsstrategic growth plan to move to a hybrid outsourcing model with a focus on products andplatforms in addition to services offerings. This strategy enables the Company tocapitalize onthe opportunities as the world transitions to digital commerce. Thistransition is prone to challenges as well opportunities which bring potential volatilitywith it. Fortunately the Company with its 20+ years of experience has demonstratedsuccess in navigating volatility and achieving managed transition to strengthen itslong-term foundation. The Company is committed to use this opportunity to diversify itsbusiness and expand its reach to geographies beyond North America.

The Company's approach to focus on strategic accounts continue to differentiate itsservice offerings within its focus area attracting & retaining top talent focustowards enhancing operational efficiency and scale-up towards building a deliverycapability & excellence has established the Company as a preferred partner for itsclients within its focused verticals. The client's response towards its solution offeringwas encouraging. The Company shall continue to propel further in its area of strengththrough alliances developing customer center of excellence and by readying its clients tobe prepared for digital age. The Company believes that its efforts in becoming a reliablepartner to its clients will make it a leader in digital solution provider in the years tocome.

The Company will enhance its cutting-edge proposition to address new customersstrengthening its emphasis on marketing to small and medium-sized firms.

Management Discussions and Analysis Report

Pursuant to Regulation 34(2) (e) of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 a Management Discussion and Analysis Report is annexed tothis Report.

Management Discussions and Analysis Report

Pursuant to Regulation 34(2) (e) of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 a Management Discussion and Analysis Report is annexed tothis Report.

Dividend

In view of the financial performance of your Company during the year 2016-17 yourDirectors have not recommended any dividend for this financial year.

Amounts transferred to Reserves:

During the year under review the Board carried Rs. NIL/- to the Reserves.

Share Capital

The paid up Equity Share Capital as on March 31 2017 was 16822513 Equity Shares of Rs.10 each. During the year under review the Company has not issued any shares includingshares with differential voting rights nor granted stock options nor sweat equity. Thereis no buyback of Shares conducted during the financial year.

As on March 31 2017 other than Mr. Srinivasa Rao Madala - Director (1366099 Shares -8.12%) and Mr. Bhaskara Rao Madala - Whole time Director (269766 Shares - 1.60%) none ofthe other Directors of the Company held shares of the Company.

Extract of the Annual Return

The details forming part of the extract of the Annual Return in form MGT 9 is annexedto this report.

Directors:

None of the directors of the company is disqualified under the provisions of theCompanies Act 2013 or under the provisions of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015.

As per the provisions of the Companies Act 2013 read with Articles of Association ofthe Company Mr. Srinivasa Rao Madala retire by rotation and being eligible offer himselffor re-appointment at this Annual General Meeting. Pursuant to the provisions of SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 brief particulars ofthe retiring directors who are proposed to be appointed/re-appointed are provided as anannexure to the notice convening the AGM.

The existing composition of the Company's board is fully in conformity with theapplicable provisions of the Companies Act 2013 and provisions of SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 having the following directorsas non-executive Independent Director's namely Dr T. Hanuman Chowdhary Mr. B. S.Srinivasan Mr. P. Venkatramaiah and Mrs. Thota Neelima (Woman as well as IndependentDirector).

The Members at the 24th Annual General Meeting held on September 30 2014 appointed theexisting Independent Directors as said above under the Companies Act 2013 each for a termof five years.

All Independent Directors have given declarations that they meet the criteria ofindependence as laid down under Section 149(6) of the Companies Act 2013 and Clause16(1)(b) of Securities and Exchange Board of India (Listing Obligations and DisclosureRequirements) Regulations 2015.

Pursuant to the provisions of sections 196 197 203 of the Companies Act 2013 readwith Schedule V and the Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014 Board of Directors proposed re-appointment of Bhaskara Rao Madala (DIN00474589) as Whole time Director for a period of three years with effect from 1st November2017 subject to the approval of the members of the Company. Resolution for membersapproval is placed in the Notice of AGM.

Key Managerial Personnel

There is no change in the key managerial personnel during the year. Mr. SrinivasMandava is the CFO of the Company and Mr. B. Laxman (ACS 20625) is the Company Secretary.

Number of meetings of the Board

During the year Six Board Meetings and Five Audit Committee Meetings were convened andheld. The details of these are given in the Corporate Governance Report. The interveninggap between the Meetings was within the period prescribed under the Companies Act 2013.

Board Committees:

Details regarding the composition terms and references number of meetings andattendance of respective members of the various committees of board are providedseparately in the Corporate Governance Report.

Company's policy on Directors' appointment and remuneration

The Board has on the recommendation of the Nomination & Remuneration Committeeframed a policy for selection and appointment of Directors Senior Management and theirremuneration including criteria for determining qualifications positive attributesindependence of a Director and other matters provided under sub-section (3) of section 178relating to the remuneration for the Directors key managerial personnel and otheremployees.

Explanations or comments by the Board on every qualification reservation or adverseremark

There is no qualification reservation or adverse remark or disclaimer made -

(i) by the auditor in his report; and

(ii) by the Company Secretary in practice in her secretarial audit report.

Particulars of Loans Guarantees or Investment

There are no loans given guarantees issued or investments made to which provisions ofSection 186 are applicable to the Company.

Corporate Governance:

The Company has taken the requisite steps to comply with the recommendations concerningCorporate Governance. A separate statement on Corporate Governance together with acertificate regarding compliance of conditions of Corporate Governance as stipulated underSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 forms part ofthis Annual Report.

WTD and CFO Certification

As required under Regulations 17(8) and 33(2) (a) of SEBI (Listing Obligations &Disclosure Requirements) Regulations 2015 certificates are duty signed by Mr. BhaskaraRao Madala Whole time Director and Mr. Srinivas Mandava CFO.

Listing at Stock Exchange:

The Equity Shares of the Company continue to be listed on Bombay Stock Exchange Limitedand the annual listing fees for the year 2017-18 have been paid to the Exchange.

Auditors:

In accordance with the provisions of Sections 139 142 and other applicable provisionsif any of the Companies Act 2013 and the Rules made there under M/s. JVSL &Associates Chartered Accountants Hyderabad (FRN: 015002S) are hereby appointed as theStatutory Auditors of the Company to hold office for a term of 5 years from the conclusionof 27th Annual General Meeting until the conclusion of 32nd Annual General Meeting(subject to ratification by the members at every Annual General Meeting held after thisAnnual General Meeting).

The Company has obtained necessary certificate under Section 141 of the Companies Act2013 from the Auditors conveying their eligibility for the above appointment. The AuditCommittee and Board reviewed their eligibility criteria as laid down in Section 141 ofthe Companies Act 2013 and recommended their appointment as auditors for the aforesaidperiod.

Secretarial Auditors

During the year under review the Board of Directors had appointed M/s VBM Rao &Associates Company Secretaries Hyderabad for conducting secretarial audit in accordancewith the provisions of Companies Act 2013 and the rules framed there under. TheSecretarial Audit Report is annexed and forms part of this report.

Fixed Deposits

During the year the Company has not accepted any deposit under Section 73 of theCompanies Act 2013 and The Companies (Acceptance of Deposits) Rules 2014. As on 31stMarch 2017 there are no unclaimed deposits with the Company. Further the Company has notdefaulted in repayment of deposits or payment of interest thereon.

Particulars of contracts or arrangements with related parties

All related party transactions that were entered into during the financial year were onan arm's length basis and were in the ordinary course of business and same were enteredonly with SoftSol Resources Inc USA (a wholly owned Subsidiary Company). The details ofrelated party transactions are provided in the accompanying financial statements andCorporate Governance Report. All transactions entered into with related party (SoftSolResources Inc USA a wholly owned Subsidiary Company) during the year were on an arm'slength basis and were in the ordinary course of business. Accordingly transactionsreported in Form AOC-2 is annexed.

There are no materially significant related party transactions made by the Company withPromoters Directors Key Managerial Personnel or other designated persons who may have apotential conflict with the interest of the Company at large. None of the Directors hasany pecuniary relationships or transactions vis-a-vis the Company.

Conservation of energy technology absorption foreign exchange earnings and outgo:

A. Conservation of energy:

a) The Company continues to work on reducing carbon footprint in all its areas ofoperations through initiatives like (a) green infrastructure (b) green IT (data centerslaptops and servers etc (c) operational energy efficiency.

b) The steps taken by the Company for utilising alternate sources of energy: NIL

c) The capital investment on energy conservation equipments: NIL

B. Technology absorption:

a) The Company continues to use the latest technologies for improving the productivityand quality of its services and products. The Company's operations do not requiresignificant import of technology.

b) The efforts made towards technology absorption: A continuous interaction andexchange of information in the industry is being maintained with a view to absorbingadapting and innovating new methods that may be possible.

(ii) The expenditure incurred on Research and Development: Nil.

C. Foreign Exchange earnings and outgo: Total foreign exchange earnings during the yearwere Rs. 163.17 Lakhs (Previous year Rs. 198.50 Lakhs) and foreign exchange outgo was:NIL. (previous year: NIL).

Corporate Social Responsibility (CSR) Initiatives

Pursuant to Section 135 Companies Act 2013 read with Rules issued the provisions ofCorporate Social Responsibility is not applicable to the Company for the financial year2016-17. Hence allocation of CSR Budget for the financial year 2016-17 is not applicablefor the Company and also spending of CSR expenditure not applicable to the company.

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 is not required as noneof the employee's falls under the category.

Employees Relations

The employees' relation at all levels and at all units continued to be cordial duringthe year.

Board evaluation

Pursuant to the provisions of the Companies Act 2013 and Regulation 19 of the SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 the Board has carriedout an annual performance evaluation of its own performance the directors individually aswell as the evaluation of the working of its Audit Committee Nomination &Remuneration Committee and Stakeholders Relationship Committee. The Directors weresatisfied with the evaluation results which reflected the overall engagement of the Boardand its Committees with the Company.

Familiarization programme for Independent Directors

The Whole time Director has one to one discussion with all Directors to familiarizethem with the Company's operations. Further the Company has put in place a system tofamiliarize the Independent Directors about the Company its business and on-going eventsrelating to the Company. The details of such familiarization programmes for IndependentDirectors are posted on the website of the Company viz. www.softsolindia.com .

Significant and Material Orders passed by the Regulators or Courts

There are no significant material orders passed by the Regulators / Courts which wouldimpact the going concern status of the Company and its future operations.

Transfer of Unpaid/Unclaimed amounts to IEPF

Pursuant to the provisions of Section 125 of Companies Act 2013 the Unclaimed Dividendand interest thereon which remained unpaid/unclaimed for a period of 7 years have beentransferred by the Company to the Investor Education and Protection Fund (IEPF)established by the Central Government pursuant to Section 125 of the Companies Act 2013.

Directors' Responsibility Statement:

Pursuant to the requirement under Section 134(3)(c) of the Companies Act 2013 withrespect to Directors' Responsibility Statement it is hereby confirmed that:

a) in the preparation of the annual accounts for the year ended March 31 2017 theapplicable accounting standards had been followed along with proper explanation relatingto 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 as at March 31 2017 and of the profitand 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;

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;

"Internal Financial Controls" means the policies and procedures adopted bythe Company for ensuring the orderly and efficient conduct of its business including theadherence to company's policies the safeguarding of its assets the prevention anddetection of frauds and errors the accuracy and completeness of the accounting recordsand the timely preparation of reliable financial information;

f) the directors had devised proper systems to ensure compliances with the provisionsof the applicable laws and that such systems were adequate and operating effectively.

Vigil Mechanism / Whistle Blower Policy

The Company has a vigil mechanism to deal with instance of fraud and mismanagement ifany. The details of the Whistle Blower Policy is explained in the Corporate GovernanceReport and also posted on the website of the Company.

Subsidiaries Joint Venture or Associate Companies

Your company has prepared the consolidated financial statements in accordance with therelevant accounting standards and the provisions of the Companies Act 2013 (Act).Pursuant to the provisions of the Act documents in respect of the subsidiary company M/s.SoftSol Resources Inc. USA viz. Directors' Report Auditor's Report Balance Sheet andProfit and Loss Account are attached the Annual Report.

Consolidated Financial Statements

In compliance with the provisons of companies act 2013 and stipulated under theprovisions of the SEBI (Listing Obligations & Disclosure Requirements) Regulations2015 also as the Consolidated Financial Statements have been prepared by the Company inaccordance with the applicable Accounting Standards. The audited Consolidated FinancialStatements together with Auditors' Report form part of the Annual Report.

Material changes and commitments affecting the Financial Position

There are no material changes and commitments affecting the financial position of theCompany which have occurred between the end of the financial year of the Company to whichthe financial statement relate and the date of the report.

Details of Significant and Material Orders passed by the Regulators

There are no significant and material orders passed by the regulators or courts ortribunals impacting the going concern status and Company's operations in future.

Internal Financial Controls and their adequacy

Your Company's internal control systems commensurate with the nature and size of itsbusiness operations. Your Company has maintained a proper and adequate system of internalcontrols. This ensures that all Assets are safeguarded and protected against loss fromunauthorized use or disposition and that the transactions are authorised recorded andreported diligently.

The Audit Committee and Independent Internal Auditors regularly review internalfinancial controls and operating systems and procedures for efficiency and effectiveness.The Internal Auditor's Reports are regularly reviewed by the Audit Committee of the Board.

Disclosure under the Sexual Harassment of Women at Workplace (Prevention Prohibitionand Redressal) Act 2013.

The Company has put in place a Prevention Prohibition and Redressal of SexualHarassment at Workplace in accordance with the requirement of the ‘Sexual Harassmentof Women at Workplace (Prevention Prohibition and Redressal) Act 2013'.

Internal Complaints Committee (ICC) has been set up to redress complaints receivedregarding sexual harassment. All employees of the Company are covered under theaforementioned Policy.

The summary of complaints received and disposed off up to 31st March 2017 were asunder:

Number of complaints received: Nil Number of complaints disposed off: Nil

Acknowledgements:

Your Directors take this opportunity to thank all investors business partnersclients banks regulatory and governmental authorities stock exchanges and employees fortheir continued support.

On behalf of the Board of Directors

Bhaskar Rao Madala

Whole time Director

Place: Hyderabad Date: 14-08-2017

Registered Office:

Plot No. 4 Software Units Layout Madhapur

Hyderabad - 500 081 Bhaskara.

Madala@softsol.com

www.softsolindia.com