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Softtech Engineers Ltd.

BSE: 535078 Sector: IT
NSE: SOFTTECH ISIN Code: INE728Z01015
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Softtech Engineers Ltd. (SOFTTECH) - Director Report

Company director report

Dear Members

Your directors have pleasure in presenting the 23rd Annual Report on thebusiness and operations of your Company together with the Audited F inancial Statement andthe Auditors ’ Report of your Company for the financial year ended 31AMarch 2019.

1. COMPANY’S PERFORMANCE. STATE OF COMPANY’S AFFAIRS AND FUTURE OUTLOOK:

Your Company is primarily involved in software development and providing softwaresupport and maintenance to the clients. In last 23 years the Company is constantlyimproving developing and innovating software products to meet the AEC industryrequirements. We have a portfolio of 4 established products -AutoDCR PWIMS OPTICONBIMDCR and two products under development stage- RuleBuddy and IBPS out of whichRuleBuddy is ready for beta launch.

Your Company’s financial performance for the year under review has beenencouraging. During the year under review the Company has achieved a gross turnover ofINR 627554789/- in comparison to previous year’s turnover which was INR515423246/-. It represented an increase of 21.76% over the previous year. Your Companyhas earned a net profit of INR 77934792/- against last year’s INR 67936851/-.Key aspects of Financial Performance of your Company for the current financial year2018-19 along with the previous financial year 2017-18 are tabulated below in theFinancial Results.

The future outlook of the Company and its professional management makes an enterpriseof high quality and high efficiency as core competition. Our focus on quality has enabledus to sustain and grow our business model to benefit our customers. Our Company is managedby a team of experienced personnel having experience in different aspects of softwareindustry.

2. FINANCIAL RESULTS:

The Company’s financial performance for the year under review is given hereunder:

(Amount in INR)

Particulars

Standalone

Consolidated
FY 2018-19 FY 2017-18 FY 2018-19
Revenue from Operations (Net) 627554789.00 515423246.00 627554789.00
Other Income 8013525.00 4501462.00 7877011.00
Total Revenue 635568314.00 519924708.00 635431800.00
Depreciation and Amortization 40419359.00 37801546.00 40419359.00
Total Expenses (including Depreciation and Amortization) 526322689.00 423616770.00 529874076.00
Profit/ (Loss) Before Tax 109245625.00 96307938.00 105557724.00
Tax Expenses:
1. Current Tax 35280000.00 32393518.00 35280000.00
2. Deferred Tax (3969167.00) (4022431.00) (3969167.00)
Net Profit/ (Loss) After Tax 77934792.00 67936851.00 74246890.00
Add/Less: Minority Interest (loss/profit) - - 13982.00
Profit for the year 77934792.00 67936851.00 74260873.00

3. KEY DEVELOPMENTS OF THE COMPANY DURING THE YEAR:

• Successfully Implemented the product AutoDCR - an Integrated Online DevelopmentPermission System (ODPS) for State of Gujarat

• Successful implementation of "Online Development Permission ManagementSystem" through AutoDCR software for both the states of Andhra Pradesh and Telanganawho have achieved top rankings for EODB

• Bagged prestigious order to configure customize integrate implement andmaintain the works and projects management and monitoring application from the MunicipalAdministration Department of Andhra Pradesh state

4. DIVIDEND:

Your directors are pleased to recommend a Final Dividend of INR 0.50/- per equity shareof face value of INR 10/- each for the year ended 31st March 2019. The FinalDividend is subject to the approval of Members at the ensuing Annual General Meeting.

5. TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND:

Since no unclaimed dividend amount is pending with the Company for seven consecutiveyears or more no amount is required to be transferred to the Investor Education andProtection Fund.

6. LISTING OF SECURITIES ON STOCK EXCHANGES:

The shares of the Company are listed at the National Stock Exchange of India Limited onSME platform with effect from 11th May 2018. The Company is registered withboth NSDL & CDSL for holding the shares in dematerialized form and open for trading.

7. MANAGEMENT DISCUSSIONS & ANALYSIS REPORT:

In accordance with the provisions of the Companies Act 2013 and SEBI regulations theManagement Discussion and Analysis report is given as ‘Annexure A’ tothis report.

8. EXTRACT OF ANNUAL RETURN:

The 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 herewith for your kind perusal and information as ‘Annexure B’.

9. PARTICULARS OF CONTRACTS/ARRANGEMENTS WITH RELATED PARTIES:

All transactions entered with related parties during the F.Y. 2018-19 were onarm’s length basis and were in the ordinary course of business and provisions ofSection 188(1) are not attracted. There have been no materially significant related partytransactions with the Company’s Promoters Directors and others as defined in section2(76) of the Companies Act 2013. Form AOC 2 is enclosed herewith as ‘AnnexureC’ to the Boards’ Report.

The other disclosures regarding the related party transactions are given in the notesto accounts.

10. CONSERVATION OF ENERGY. TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE OUTGO:

• CONSERVATION OF ENERGY:

The operations carried out by the Company are such that they are not deemed as energyintensive. However the Company constantly makes efforts to avoid excessive consumption ofenergy. The measures are aimed at effective management and utilization of energy resourcesand resultant cost saving of the Company.

• TECHNOLOGY ABSORPTION:

(i) the efforts made towards technology absorption - Nil.

(ii) the benefits derived like product improvement cost reduction product developmentor import substitution - Nil.

(iii) in case of imported technology (imported during the last three years reckonedfrom the beginning of the financial year - Nil.

• FOREIGN EXCHANGE EARNINGS AND OUTGO (IN RUPEES):

Earnings INR 249655/-.
Outgo INR 5620994/-.

11. DIRECTORS AND KEY MANAGERIAL PERSONNEL fKMPl:

I. Changes in Composition of the Board of Directors:

a) Mr. Ravi Mathur (DIN: 01777668) ceased to hold office as a Nominee Director w.e.f. 4thMarch 2019 on account of withdrawal of Nomination by Rajasthan Venture Capital Fund.

b) Mrs. Priti Gupta (DIN: 01735673) Whole-time Director of the Company pursuant to theprovisions of Section 152(6) and other applicable provisions of the Companies Act 2013retires by rotation at the ensuing Annual General Meeting and being eligible has offeredherself for re-appointment.

c) It is proposed to re-appoint Mr. Vijay Gupta (DIN: 01653314) as a Managing Directorfor a period of Five (5) years w.e.f. 24th February 2020. His brief profileand other information of Mr. Vijay Gupta (DIN: 01653314) proposing reappointment asManaging Director is appended as an annexure to the notice of ensuing Annual GeneralMeeting.

d) It is proposed to re-appoint Mrs. Priti Gupta (DIN: 01735673) as a Whole TimeDirector for a period of Five (5) years w.e.f. 24th February 2020. Her briefprofile and other information of Mrs. Priti Gupta (DIN:

01735673) proposing reappointment as Whole Time Director is appended as an annexure tothe notice of ensuing Annual General Meeting.

II. Appointment / Resignation of Key Managerial Personnel:

a) Mr. Anand Dad has resigned as an CFO(KMP) with effect from 6th October2018

b) Mr. Amit Katariya was appointed as a CFO(KMP) with effect from 6thOctober 2018

c) Designation of Mr. Amit Katariya Changed from CFO(KMP) to Finance controller w.e.f.1st April 2019

d) Mr. Piranvez Irani has been appointed as CFO(KMP) with effect from 20thApril 2019

III. Declaration from Independent Directors:

Your Company has received necessary declarations from all its Independent Directorsstating that they meet the criteria of independence as provided in Sub-section (6) ofSection 149 of the Companies Act 2013 and SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 as amended.

IV. Board Evaluation:

The annual evaluation framework for assessing the performance of Directors comprises ofthe following key areas:

a) Attendance for the meetings participation and independence during the meetings.

b) Interaction with Management.

c) Role and accountability of the Board.

d) knowledge and proficiency

e) Strategic perspectives or inputs.

The evaluation involves assessment by the Nomination and Remuneration Committee andBoard of Directors. A member of the Nomination and Remuneration Committee and Board doesnot participate in the discussion of his / her evaluation.

The Composition of Board of Directors & Key Managerial Person as at 31stMarch 2019 consists of following:

Sr. No. Name Designation
1. Mr. Vijay Gupta Managing Director
2. Mrs. Priti Gupta Whole-time Director
3. Mr. Rahul Gupta Independent Director
4. Mr. Sridhar Pillalamarri Independent Director
5. Mr. Amit Katariya CFO(KMP)
6. Ms. Aishwarya Patwardhan Company Secretary

12. AUDITORS:

a) Statutory Auditors:

M/s. Walker Chandiok & Co LLP Chartered Accountants (Firm Registration No.001076N/N500013) were appointed as Statutory Auditors for a period of 5 years in theAnnual General Meeting (AGM) held on 26th September 2016. This was done as perthe provisions of the Companies Act 2013. In the Annual General Meeting dated 28thSeptember 2018 members approved ratification of appointment of M/s. Walker Chandiok &Co LLP Chartered Accountants (Firm Registration No. 001076N/N500013) as the StatutoryAuditors of the Company for the remaining term of Three (3) years i.e. from theconclusion of ensuing Annual General Meeting up to the conclusion of the 25thAnnualGeneral Meeting of the Company to be held in the year 2021.They have indicated theirwillingness to continue as Statutory Auditors of the Company.

b) Secretarial Auditor:

Pursuant to the provisions of Section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hasappointed Mr. Devesh Tudekar Practicing Company Secretary as a secretarial auditor aReport of the Secretarial Audit is annexed herewith as Annexure D.

13. REPORTING OF FRAUD BY STATUTORY AUDITORS:

There was no fraud suspect in the Company hence no reporting was made by StatutoryAuditors of the Company under subsection (12) of section 143 of Companies Act 2013.

14. DEPOSITS:

The Company has not accepted any deposits within the meaning of Section 73 of theCompanies Act 2013 and the rules made there under.

15. TRANSFER TO RESERVES IN TERMS OF SECTION 134 (31 fJl OF THE COMPANIES ACT. 2013:

No amount was transferred to the reserves during the Financial Year ended on 31stMarch 2019.

16. DIRECTORS’ RESPONSIB JTY STATEMENT:

Pursuant to Section 134(5) of the Companies Act 2013 the Board of Directors of theCompany confirms that-

a) In the preparation of the annual accounts for the year ended March 31 2019 theapplicable Accounting Standards had been followed along with proper explanation relatingto material departures if any;

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 andprofit 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.

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.

17. PERSONNEL:

During the financial year under review the provision of Section 197(12) of theCompanies Act 2013 read with Rule 5 of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 i.e. the particulars and information of the employeesforms integral part of this report.

18. CORPORATE GOVERNANCE:

The Company has taken adequate steps to ensure that the conditions of CorporateGovernance as stipulated and applicable under various regulations are complied with.

19. COMPLIANCE OF SECRETARIAL STANDARDS:

The Company has complied with the provisions of the Secretarial Standards issued by theInstitute of Company Secretaries of India.

20. CODE OF CONDUCT FOR PREVENTION OF INSIDER TRADING:

The Company has adopted a Code of Conduct for Prevention of Insider Trading with a viewto regulate trading in securities by the Directors and designated employees of theCompany. The code provides for periodical disclosures from Directors and designatedemployees as well as pre-clearances of transactions by such persons.

The detailed Code of Internal Procedures and Conduct for Regulating Monitoring andReporting of Trading by Insiders is placed on the Company’s website and can be viewedat: http://softteeh-engr.eom/wp-content/uploads/2018/07/3.-CODE-OF-INTERNAL-PROCEDURES-AND-CONDUCT-FOR-PREVENTION-OF-INSIDER-TRADING-REGULATIONS.pdf

21. MEETINGS OF THE BOARD OF DIRECTORS AND IT’S COMMITTEES:

A. MEETINGS OF BOARD OF DIRECTORS:

During the Financial Year under review the Board of Directors of the Company has dulymet Six (6) times on:

Sr. No. Date of Board Meeting Sr. No. Date of Board Meeting
1. 11th April 2018 2. 28th May 2018
3. 31" August 2018 4. 6th October 2018
5. 14th November 2018 6. 4th March 2019

The details of number of meetings attended by each director are summarized as below:

Sr. No. Name of Director Number of meetings entitled to attended Number of meetings attended
1. Mr. Vijay Gupta 6 6
2. Mrs. Priti Gupta 6 6
3. Mr. Rahul Gupta 6 4
4. Mr. Sridhar Pillalamarri 6 4
5. Mr. Ravi Mathur 6 2

B. AUDIT COMMITTEE MEETING:

During the financial year under review the Audit Committee of the Company has duly meton Four (4) times on:

Sr. No. Date of Audit Committee Meeting Sr. No. Date of Audit Committee Meeting
1. 11th May 2018 2. 31st August 2018
3. 6th October 2018 4. 14th November 2018

The details of number of meetings attended by each member of the Audit Committee aresummarized as below:

Sr. No. Name of the member of the Audit committee Number of meetings entitled to attended Number of meetings attended
1. Mr. Vijay Gupta 4 4
2. Mr. Rahul Gupta 4 3
3. Mr. Sridhar Pillalamarri 4 3

C. NOMINATION & REMUNERATION COMMITTEE MEETING:

During the financial year under review the Nomination and Remuneration Committee ofthe Company has duly met Two (2) times on 24th August 2018 and on 6thOctober 2018.

Sr. No. Name of the member of the Nomination and Remuneration committee Number of meetings entitled to attended Number of meetings attended
1. Mr. Sridhar Pillalamarri 2 2
2. Mr. Rahul Gupta 2 2
3. Mr. Ravi Mathur 2 0

D. COMPENSATION COMMITTEE MEETING:

During the financial year under review no meeting of Compensation Committee was held.

E. IPO COMMITTEE MEETING:

During the financial year under review the IPO Committee of the Board of Directors ofthe Company has duly met Three (3) times on 18th April 20184thMay 2018 and on 9th May 2018. The details of number of meetings attended byeach member of the IPO Committee are summarized as below:

Sr. No. Name of Member of the IPO Committee Number of meetings entitled to attended Number of meetings attended
1. Mr. Vijay Gupta 3 3
2. Mrs. Priti Gupta 3 3
3. Mr. Rahul Gupta 3 0

F.CORPORATE SOCIAL RESPONSIBILITY (CSR) COMMITTEE MEETING:

During the financial year under review the Corporate Social Responsibility (CSR)Committee of the Company has duly met Two (2) times on 11th April 2018 and on31st August 2018.

Sr. No. Name of Member of the Corporate Social Responsibility (CSR) Committee Number of meetings entitled to attended Number of meetings attended
1. Mr. Vijay Gupta 2 2
Sr. No. Name of Member of the Corporate Social Responsibility (CSR) Committee Number of meetings entitled to attended Number of meetings attended
2. Mrs. Priti Gupta 2 2
3. Mr. Rahul Gupta 2 1

G. STAKEHOLDERS RELATIONSHIP COMMITTEE MEETING:

During the financial year under review no meeting of Stakeholders RelationshipCommittee was held.

22. COMMITTEES OF THE BOARD:

As on 31st March 2019 the Board had Committees such as the Audit Committeethe Nomination and Remuneration Committee Compensation Committee IPO CommitteeCorporate Social Responsibility (CSR) Committee and Stakeholders Relationship Committee.

• Composition of Audit Committee:

As per the provisions of Section 177 of the Companies Act 2013 the Company’sAudit Committee comprised of the three directors for the financial year ended 31stMarch 2019. The table sets out the composition of the Committee:

Name of the Director Category
Mr. Vijay Gupta Chairman
Mr. Rahul Gupta Member
Mr. Sridhar Pillalamarri Member

• Composition of Nomination and Remuneration Committee:

As per the provisions of Section 178 of the Companies Act 2013 the Company’sNomination and Remuneration Committee comprised of the three directors for the FinancialYear ended 31st March 2019. The table sets out the composition of theCommittee:

Name of the Director Category
Mr. Sridhar Pillalamarri Chairman
Mr. Rahul Gupta Member
Mr. Vijay Gupta* Member

* With effect from 4th March 2019 Mr. Ravi Mathur Nominee Director ceasedto be Director of the Company and member of Nomination of Remuneration committee and Mr.Vijay Gupta was elected as member of the Committee.

• Composition of Compensation Committee:

The Company’s Compensation Committee comprised of the two directors for theFinancial Year ended 31st March 2019. The table sets out the composition ofthe Committee:

Name of the Director Category
Mr. Vijay Gupta Chairman
Mrs. Priti Gupta Member

The Board in its meeting dated 27th May 2019 decided to close Compensationcommittee as terms of reference of this committee got merged into Nomination andRemuneration committee.

• Composition of IPO Committee:

The Company’s IPO Committee comprised of the three directors for the FinancialYear ended 31st March 2019. The table sets out the composition of theCommittee:

Name of the Director Category
Mr. Vijay Gupta Chairman
Mrs. Priti Gupta Member
Mr. Rahul Gupta Member

Further the Board in its meeting dated 27th May 2019 decided to dissolveIPO committee with immediate effect.

• Composition of Corporate Social Responsibility (CSR! Committee:

The Company’s Corporate Social Responsibility (CSR) Committee comprised of thethree directors for the Financial Year ended 31st March 2019. The table setsout the composition of the Committee:

Name of the Director Category
Mr. Vijay Gupta Member
Mrs. Priti Gupta Member
Mr. Rahul Gupta Member

• Composition of Stakeholders Relationship Committee:

The Company’s Stakeholders Relationship Committee comprised of the three directorsfor the Financial Year ended 3181 March 2019. The table sets out thecomposition of the Committee:

Name of the Director Category
Mr. Rahul Gupta Chairman
Mr. Sridhar Pillalamarri Member
Mr. Vijay Gupta Member

23. RISK MANAGEMENT POLICY:

Periodic assessments to identify the risk areas are carried out and the management isbriefed on the risks in advance to enable the Company to control risk through a properlydefined plan. The risks are classified as financial risks operational risks and marketrisks. The risks are taken into account while preparing the annual business plan for theyear. The Board is also periodically informed of the business risks and the actions takento manage them. The Company has formulated a Policy for Risk Management with the followingobjectives:

• Provide an overview of the principles of risk management.

• Explain approach adopted by the Company for risk management.

• Define the organizational structure for effective risk management.

• Develop a "risk" culture that encourages all employees to identifyrisks and associated opportunities and to respond to them with effective actions.

• Identify assess and manage existing and new risks in a planned and coordinatedmanner with minimum disruption and cost to protect and preserve Company’s humanphysical and financial assets.

24. ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENT:

The Company has maintained adequate internal controls commensurate with its size andnature of operations. The Company has also formed an Audit Committee. Audit Committeereviews with the management adequacy and effectiveness of the internal control system andinternal audit functions. The scope of the Internal Audit is decided by the AuditCommittee and the Board. There are policies guidelines and delegation of power issued forthe compliance of the same across the Company.

25. PARTICULARS OF LOANS. GUARANTEES AND INVESTMENTS UNDER SECTION 186:

During the year under review the Company has invested INR 202806/-(Euros 2500/-) inEquity Shares of SoftTech Finland Oy and INR 608424 (USD 8000/-) in Common stock ofSoftTech Engineers Inc. Further the Company has given loan of INR 2487300/- (Euros30000/-) and INR 2194044/-(USD 30000/-) to SoftTech Finland Oy and SoftTech EngineersInc. respectively in the form of debentures. The Company has existing investment in equityshares of The Mahesh Sahakari Bank Limited and The Saraswat Co-operative Bank Limitedamounting to INR 354800/- and INR 25000/- respectively.

26. INFORMATION ABOUT SUBSIDIARY/ JV/ ASSOCIATE COMPANY:

During the Financial Year under review your Company has formed following subsidiaries:

• The Company formed a wholly owned subsidiary SoftTech Finland Oy located inRepublic of Finland. This new subsidiary will enhance upgrade and develop Company’sproducts in international markets

• The Company acquired subsidiary as SoftTech Engineers Inc in state of Delawareand formed a step-down subsidiary SoftTech Government Solutions Inc. in the Commonwealthof Virginia. SoftTech Government Solutions Inc. will mainly focus on handling governmentprojects in the US.

Except above there have been no subsidiary/JV/associate Company which was formed orceased during the Financial Year under review.

27. NOMINATION & REMUNERATION POLICY:

The Policy in compliance with the provisions of the Companies Act 2013 read with theRules made therein is formulated to provide a framework and set standards. The briefobjectives of the policy are as follows:

I. To guide the Board in relation to the appointment and removal of Directors KeyManagerial Personnel and Senior Management.

II. To evaluate the performance of members of the Board and provide necessary report tothe Board for further evaluation.

III. To attract retain and motivate the Senior Management including its Key ManagerialPersonnel evaluation of their performance and provide necessary report to the Board forfurther evaluation.

IV. To ensure the relationship of remuneration with performance is clear and meetsappropriate performance benchmarks.

V. To recommend the Board on Remuneration payable to the Directors Key ManagerialPersonnel and Senior Management.

VI. To promote and develop a high performance workforce in line with the Companystrategy.

VII. To lay down criteria and terms and conditions with regard to identifying personwho are qualified to become Director (Executive & Non- Executive/ Independent/Nominee)and persons who may be appointed in Senior Management Key Managerial Personnel anddetermine their remuneration.

VIII. To determine the remuneration based on the Company’s size and financialposition and practices in the industry. The detailed Nomination & Remuneration Policyof the Company is placed on the Company’s website and can be viewed at: http://softtech-engr.eom/wp-content/uploads/2018/07/7.-Nomination-and-Remuneration-Committee.pdf

28. VIGIL MECHANISM:

The Company has adopted a Vigil Mechanism / Whistle Blower Policy to provide a formalmechanism to the directors and employees to report their concerns about unethicalbehavior actual or suspected fraud or violation of the Company's Code of Conduct orEthics Policy. The Policy provides for adequate safeguards against victimization ofemployees who avail the mechanism and also provides for direct access to the Chairman ofthe Audit Committee in exceptional cases. During the year under review the Company hasnot received any complaints under the said mechanism. The Vigil Mechanism / Whistle BlowerPolicy has been posted on the website of the Company (http://softtech-engr.eom/wp-content/uploads/2018/07/13.-Vigil-Mechanism-Whiste-Blower.pdf).

29. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION.PROHIBITION AND REDRESSAL1 ACT. 2013:

The Company has in place an Anti Sexual Harassment Policy in line with the requirementsof The Sexual Harassment of Women at Workplace (Prevention Prohibition and Redressal)Act 2013. The Policy has set guidelines on the redressal and inquiry process that is tobe followed by aggrieved woman whilst dealing with issues related to sexual harassment atthe work place towards any women. All employees (permanent temporary contractual andtrainees) are covered under this policy.

The Company has complied with the provision relating to the constitution of theInternal Complaint Committee under The Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013.

It may be noted that during the year 2018-19 no grievance / complaint from any womenemployee was reported.

30. MATERIAL CHANGES & COMMITMENTS. BETWEEN THE DATE OF BALANCE SHEET AND THE DATEOF BOARD REPORT:

Designation of Mr. Amit Katariya Changed from CFO(KMP) to Finance controller w.e.f. 1stApril 2019 and Mr. Piranvez Irani has been appointed as CFO(KMP) with effect from 20thApril 2019.

Except above there have been no material changes and commitments affecting thefinancial position of the Company which have occurred between the end of the FinancialYear of the Company to which the Financial Statements relate and the date of the reportexcept as disclosed elsewhere in this report.

31. INDUSTRIAL RELATIONS:

The industrial relations during the year 2018-19 have been cordial. The Directors takeon record the dedicated services and significant efforts made by the Officers Staff andWorkers towards the progress of the Company.

32. CORPORATE SOCIAL RESPONSIBILITY:

The Company has developed Corporate Social Responsibility Policy as per the provisionsof the Section 135 of the Companies Act 2013. The details as per the requirement areannexed to this report as ‘ Annexure E\

33. CHANGE IN NATURE OF BUSINESS. IF ANY:

During the year under review there was no change in the nature of business of theCompany.

34. THE EXPLANATIONS OR COMMENTS BY THE BOARD ON EVERY QUALIFICATION. RESERVATION ORADVERSE REMARK OR DISCLAIMER MADE BY THE STATUTORY AUDITORS/ SECRETARIAL AUDITOR IN THEAUDIT REPORT:

There are no qualifications or adverse remarks in the Statutory Auditors’ Reportwhich require any clarification/ explanation. The notes on financial statements andcomments by Statutory Auditors are self-explanatory and needs no farther explanation.

Observation by Secretarial Auditor Explanation by the Board
The composition of Nomination and Remuneration Committee after 4th March 2019 is not in compliance with the provisions of Section 178 of Companies Act 2013 as one of the Investor has withdrawn the nomination from the Board of Directors of the Company and the Nominee director ceased to be part of the Board and Nomination and Remuneration Committee with effect from 4th March 2019. The Board has appointed Mr. Sundararajan Srinivasan as Non-Executive Director and member of Nomination and Remuneration Committee with effect from 27th August 2019.

35. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS / COURTS / TRIBUNALSIMPACTING THE GOING CONCERN STATUS AND THE COMPANY’S FUTURE OPERATIONS:

The Company has not received any such orders from regulators or courts or tribunalsduring the year which may impact the going concern status of the Company or itsoperations.

36. LOAN FROM DIRECTORS AND RELATIVES OF DIRECTOR:

During the financial year under reviewthe Company has taken unsecured loan of INR3000000/-from Mr. Vijay Gupta and repaid loan of INR 3600000/- to him. Further thedetails of loans and advances accepted from directors of the Company and relatives ofdirectors as on 3181 March 2019 is given below:

Sr. No. Name of person Designation Amount in INR
1 Vijay Gupta Managing Director 16939662
2 Priti Gupta Whole-Time Director 636975

37. CHANGES IN SHARE CAPITAL:

During the year under review the Company has allotted 2851200 Equity Shares of facevalue of INR 10/- each fally paid at price of INR 80/- per equity share (including a sharepremium of INR 70/- per equity share) comprising of a fresh issue of 2371200 equityshares by the Company("Fresh Issue") and an offer for sale of480000 equityshares by existing shareholder Rajasthan Trustee Company Pvt. Ltd. A/c SME TECH FUNDRVCF Trust II.

Further the Company has neither allotted any sweat equity nor it has bought back anyshares or securities.

38. EMPLOYEE STOCK OPTION SCHEME:

The Company has approved the ‘SoftTech Employees Stock Option Plan 2017’ inthe Annual General Meeting held for the Financial Year ended 31st March 2017.The details pursuant to the sub rule 9 of the Rule 12 of The Companies (Share Capital andDebenture) Rules 2014 are mentioned herein under:

Particulars Pre-Bonus Post-Bonus
Options granted 35116 70232
Options vested NIL NIL
Options exercised NIL NIL
Total number of Equity Shares that would arise as a result of full exercise of options granted 35116 70232
Options forfeited/lapsed/cancelled NIL NIL
Variation in terms of options NIL NIL
Money realised by exercise of options NIL NIL
Total number of options in force 35116 70232
Particulars Pre-Bonus Post-Bonus
Employee wise details of options granted to

 

i. Senior managerial personnel i.e. Directors and key management personnel Name of Employee Total Options Granted Name of Employee Total Options Granted
NIL NIL

 

ii. Any other employee who received 1. Sheetal Jagtap Kurhade 1. Sheetal Jagtap Kurhade
a grant in any one year of options 2. Neetesh Singhal 2. Neetesh Singhal
amounting to 5% or more of the 3. Kingshuk Chail 3. Kingshuk Chail
options granted during the year 4. Srinivas Rao Perla 4. Srinivas Rao Perla
5. Kuldeep Rathi 5. Kuldeep Rathi
6. Premanath Basava 6. Premanath Basava
7. Sarika Y. Jaglaganeshwala 7. Sarika Y. Jaglaganeshwala
8. Deepak Warad 8. Deepak Warad

 

iii. Identified employees who are granted options during any one year equal to or exceeding 1% of the issued capital (excluding outstanding warrants and conversions) of our Company at the time of grant NIL NIL

39. ACKNOWLEDGEMENT:

Your directors would like to express their heartfelt gratitude to all BankersGovernment Authorities Customers Vendors and Business Partners for their continuedsupport and association. The directors would also like to express their appreciation tothe employees of the Company for their dedicated individual and collective contributionin the overall growth of the Company.

INFORMATION PURSUANT TO RULE 5 OF THE COMPANIES (APPOINTMENT AND REMUERATIO N OFMANAGERIAL REMUNERATION) RULES 2014

Sr No Particulars Details
1 The ratio of the remuneration of each director to the median remuneration of the employees of the Company for the Financial Year Refer Annexure I
2 The percentage increase in remuneration of each director Chief Financial Officer Chief Executive Officer

Company Secretary or Manager if any in the Financial Year

Refer Annexure II
3 The percentage increase in the median remuneration of employees in the financial year. 7%
4 The number of permanent employees on the rolls of Company. 236 as on 31 March 2019
5 Average percentile increase already made in the salaries of employees other than the managerial personnel inthe last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration Percentage increase in salaries of managerial personnel is 10%

Percentage increase in salaries of employee is 1.4%

The increase in remuneration is not solely based on Company performance but also includes various other factors like individual performance vis-a-vis industry trends economic situation future growth prospects etc. The Board believes that the increase is in line with industry.

6 Affirmation that the remuneration is as per the remuneration policy of the Company. The remuneration to employees of the Company is as per the remuneration policy of the Company
7 Statement showing the names of the top ten employees in terms of remuneration drawn and the name of every employee who Annexure III
(i) if employed throughout the financial year was in receipt of remuneration for that year which in the aggregate was not less than one crore and two lakh rupees;
(ii) if employed for a part of the financial year was in receipt of remuneration for any part of that year at a rate which in the aggregate was not less than eight lakh and fifty thousand rupees per month;
(iii) if employed throughout the financial year or part thereof was in receipt of remuneration in that year which in the aggregate or as the case may be at a rate which in the aggregate is in excess of that drawn by the Managing Director or Whole-Time Director or Manager and holds by himself or alongwith his spouse and dependent children not less than two percent of the equity shares of the Company.

Annexure I:

Sr. No. Name of Director Ratio of remuneration of each Director to the median remuneration of the employees of the Company
1. Mr. Vijay Gupta 11.86 times of median
2. Mrs. Priti Gupta 3.05 times of median
3. Mr. Rahul Gupta No remuneration only sitting fees are paid
4. Mr. Sridhar Pillalamarri No remuneration only sitting fees are paid

Annexure II:

Sr. No. Name of Director/KMP Designation % Increase/(Decrease) in the Remuneration (Including sitting fees paid to the Directors)
1 Mr. Vijay Gupta Managing Director 10%
2 Mrs. Priti Gupta Director 10%
3 Mr. Rahul Gupta Director No remuneration only sitting fees are paid
4 Mr. Sridhar Pillalamarri Director No remuneration only sitting fees are paid
5 Ms. Aishwarya Patwardhan Company

Secretary

No increase
6 Mr. Amit Katariya CFO(KMP) Not Applicable

Annexure ITI

Statement showing the names of the top ten employees in terms of remuneration drawnduring FY 18-19

S.No Emp code Name of the employee Designation Remuneration received p.a. IN FY18-19 INR Nature of employment Qualification and Experience of the employee Date of commencement of employment Age Last employment Percentage of equity shares held by the employee Whether any such employee is relative of any Director and if so name of such director
1 ST001 Vijay Gupta Managing Director 4200000 Permanent IIT Mumbai EXP-32 Years 17-Jun-96 58 - 39.07% Related to Mrs. Priti Gupta
2 ST 177 Kuldeep Rathi Senior Project Manager - Dev 1949768 Permanent MCA EXP-14 Years 1-Sep-08 37 1. Apex Info Soft Pvt. Ltd. 2. Neuerung Technologies 3. Telex Communications - no
3 ST041 Srinivas Rao Perla Senior Project Manager - Dev 1855240 Permanent MCA EXP-16 Years 7-Feb-06 44 Surekha Ratna Software Pvt. Ltd. - no
4 ST070 Sheetal Kurhade Assistant Vice President - AutoDCR 1812218 Permanent B.Arch EXP-18 Years 14-Aug-06 44 - - no
5 ST742 Amit Katariya Chief Financial Offier 1690320 Permanent Bcom CA EXP-16 Years 28-May-18 41 1. Bora & Bora Technologies LLP 2. Synchrony International Services Pvt. Ltd. - no
6 ST137 Neetesh Singhal Assistant Vice President - Technology 1672238 Permanent BE MS EXP-20 Years 1 -Apr-09 42 CoVisible Solutions Inc. USA - Yes. Mr Vijay Gupta and Mrs. Priti Gupta
7 ST116 Prcmanath Basava Assistant VP - Opticon Delivery 1630021 Permanent BE MMS EXP-26 Years 1-Nov-10 51 1. Avam Computer Mgmt & Consultancy 2. Global Solutions 3. Ador Sarnia Limited - no
8 ST265 Amit Rai Manager - Implementation 1603415 Permanent BITMCA EXP-13 Years 2-Jul-07 37 1. CMC Ltd. Kolkata -
9 ST535 Dccpak Trimbak Warad VP- Accounts & Contract Management 1586000 Permanent BE- Civil Management EXP-25 Years 1-Oct-15 52 1. StruEngineer (India) Pvt. Ltd. 2. CSC World (India) Pvt. Ltd - no
10 ST503 Chandrashckhar Sambhaji Bagesar Program Manager 1488144 Permanent BE- Mech EXP-20 Years 23-Jun-15 45 1. Magnaquest Technologies Limited 2. KPMG - no

Part "A": Subsidiaries

Sr. No. Particulars SoftTech Finland Oy. SoftTech Engineers Inc.
1. SI. No. 1 2
2. Name of the subsidiary SoftTech Finland Oy. SoftTech Engineers Inc.
3. The date since when subsidiary was acquired 16th July 2018

21st November 2018

4. Reporting period for the subsidiary concerned if different from the holding company's reporting period NA NA
5. Reporting currency and Exchange rate as on the last date of the relevant financial year in the case of foreign subsidiaries. Reporting Currency-Euro Exchange rate as on 31.03.2019- 77.7024 Reporting Currency-USD Exchange rate as on 31.03.2019- 69.1713
6. Share capital 202806.00 656688.51
7. Reserves & surplus (3516764.00) (191943.04)
8. Total assets 657880.00 2658789.70
9. Total Liabilities 3971838.00 2194044.23
10. Investments Nil 663773.55
11. Turnover Nil Nil
12. Profit before taxation Nil Nil
13. Provision for taxation Nil Nil
14. Profit after taxation Nil Nil
15. Proposed Dividend Nil Nil
16. % of shareholding 100% 92%

1. Names of subsidiaries which are yet to commence operations

a) SoftTech Finland Oy.

b) SoftTech Engineers Inc.

2. Names of subsidiaries which have been liquidated or sold during the year. NIL

Part "B": Associates and Joint Ventures- NA

Enel:

a) Annexure A- Management Discussion and Analysis Report.

b) Annexure B- Extract of Annual Return in Form MGT-9.

c) Annexure C- Particulars of Contract/Arrangement with Related Parties in Form AOC-2

d) Annexure D- Report of the Secretarial Audit

e) Annexure E- Annual Report on Corporate Social Responsibility Activities.

.