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Zigma Software Ltd.

BSE: 532177 Sector: IT
NSE: N.A. ISIN Code: INE746C01032
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Zigma Software Ltd. (ZIGMASOFTWARE) - Director Report

Company director report

Your Directors have pleasure in presenting their 23rd Annual Report on the operation ofthe Company together with and Audited Accounts for the financial year ended 31st March,2012.

FINANCIAL RESULTS:

Rupees in Lakhs

2011-2012 2010-2011
Gross Income 30.81 144.61
Total Expenditure 30.60 79.40
Gross Profit 0.21 65.21
Interest 0.09 0.41
Depreciation 40.24 63.76
Profit Before Taxation (40.11) 1.04
Provision for Tax 0.00 0.40
Profit After Tax (40.11) 0.64
Balance B/F from previous year 24.45 23.81
Profit Available for Appropriation (15.66) 24.45
Paid-up Equity Capital 4176.00 4176.00
Reserve & Surplus 3518.34 3572.46

REVIEW OF OPERATIONS:

The performance of your Company during the year has not been satisfactory due to slowdown of economy in the recent past, though the global/domestic economy has been back onthe path of development, your Company could not come over the crisis and it is stillfacing stiff competition in the domestic market, consequently the sales and profitabilityof the Company has been dropped during the year under review in comparison to previousyear.

There are some positives, which are expected to help your Company to improve itsturnover and profitability. The Company has undertaken several consultancies and ITenabled services and also expanded its business in the field of biotech and real estate toensure future growth of the Company.

DIVIDEND:

Due to loss in the year under review, your Directors regret their inability torecommend dividend for the year ended 31st March, 2012.

CHANGE OF REGISTERED OFFICE:

The situation of the Registered Office of the Company has been shifted from CentrePoint, 21, H.B. Sarani, 4th floor, Kolkata-700 001 to P-113, Kalindi Housing Estate,Ground Floor, P.S.: Lake Town, Kolkata -700089 with effect from 1st July, 2011.

ACCOUNTING POLICIES:

The major accounting policies of the Company are annexed to the Accounts.

PERSONNEL:

There are no employees in the Company who are in receipt of salary of Rs. 60,00,000/-p.a. or Rs. 5,00,000/- p.m., if employed for part of the year. Hence the Statement ofparticulars of employees as required under Section 217 (2A) of the Companies Act, 1956,read with Companies (Particulars of Employees) Rules, 1975, as amended till date is notattached.

PARTICULARS OF CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION:

The Company being engaged in the business of Consultancy and Information &Technology, the Directors have nothing to report in compliance with the provisions ofSection 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure ofparticulars in the Report of Board of Directors) Rules, 1988.

FIXED DEPOSITS:

During the year under review the Company has neither invited nor received any depositfrom the Public.

CORPORATE GOVERNANCE:

A Management Discussion and Analysis Report forms part of this report. A separatereport on Corporate Governance is also included as a part of the Annual Report. Acertificate from the Auditors of the Company regarding compliance of conditions ofCorporate Governance as stipulated under Clause 49 of the Listing Agreement is alsoattached to this Annual Report.

A Code of Conduct, as applicable to the Board Members and Senior Management personnelhas been adopted and is practiced and has been put on the website of the Company.

STATUTORY DISCLOSURES:

None of the Directors of the Company are disqualified as per the provisions of Section274(1) (g) of the Companies Act, 1956.

DIRECTORS:

Shri Neeraj Sachan retires from the Board by rotation at the ensuing Annual GeneralMeeting and offers himself for reappointment.

DIRECTOR’S RESPONSIBILITY:

Pursuant to Section 217 (2AA) of the Companies Act, 1956 the Directors confirm that:

(i) in the preparation of the annual accounts, the applicable accounting standards havebeen followed with proper explanation relating to material departures;

(ii) appropriate accounting policies have been selected 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 the affairs of the Company as at 31st March, 2012 and of theLoss of the Company for the said period;

(iii) proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;

(iv) the annual accounts have been prepared on a going concern basis.

AUDITORS:

Messrs. Bijan Ghosh & Associates, Chartered Accountants retire at the conclusion ofthe ensuing Annual General Meeting and offer themselves for re-appointment for the yearending 31st March, 2013.

AUDITORS REPORT:

The observation made in the Auditors Report read with the Notes on the Accounts areself explanatory and do not require any further clarification.

ACKNOWLEDGEMENT:

Your Directors would like to place on record their appreciation of the support andassistance received from the Central and State Governments of Karnataka, Maharashtra andBankers.

Your Directors are thankful to the esteemed customers for their continued support. TheDirectors wish to record their deep appreciation of the hard work, dedication andenthusiastic support by all the employees for the commendable performance of the Companyand also thank the shareholders for their unstinted support to the Company.

On behalf of the Board
P. Singhi, Whole time Director
Kolkata, 13th August, 2012. N. Sachan, Director

ANNEXURE TO DIRECTORS’ REPORT

MANAGEMENT DISCUSSION AND ANALYSIS

FORWARD LOOKING STATEMENT :

This section of the Annual Report has been included in adherence to the spiritenunciated in the Code of Corporate Governance approved by the Securities and ExchangeBoard of India. Shareholders and Readers are cautioned that the opinions expressed by themanagement may be forward-looking statements in the current scenario, which is extremelydynamic, and increasingly fraught with risks and uncertainties. Actual results,performances, achievements or sequence of events may be materially different from theviews expressed in the statement.

INDUSTRY STRUCTURE AND DEVELOPMENTS

Information Technology has made possible information access at gigabit speeds. It hascreated a level playing field among nations and has made positive impact on the lives ofmillions who are poor, marginalised and living in rural and far flung topographies.Internet has made revolutionary changes with possibilities of e-filing Income Tax returnsor applying for passports online or railway e-ticketing.

Today a country's IT potential is paramount for its march towards globalcompetitiveness, healthy GDP, improving defence capabilities and meeting up the energy andenvironmental challenges.

The Indian Information Technology- Information Technology-Enabled Services (IT-ITES)industry has continued to perform its role as the most consistent growth driver for theeconomy. Service, software exports and BPO remain the mainstay of the sector. Over thelast five years, the IT & ITES industry has grown at a remarkable pace. Consider someof the significant indicators for these remarkable achievements. The IT/ITES exports havegrown to a staggering US$ 46.3 billion in 2008-09, the IT sector currently employing 2.2million professionals directly and another 8 million people indirectly accounts for over5% of GDP, a majority of the Fortune 500 and Global 2000 corporations are sourcing IT/ITESfrom India and it is the premier destination for the global sourcing of IT/ITES accountingfor 55% of the global market in offshore IT services and garnering 35% of the ITES/BPOmarket.

The Indian IT-BPO sector including the domestic and exports segments continue to growfrom strength to strength, witnessing high levels of activity both onshore as well asoffshore. The companies continue to move up the value-chain to offer higher end researchand analytics services to their clients. India's leadership position in the global IT andBPO industries are based primarily on the following advantages.

India accounts for around 28 per cent of IT and BPO talent among 28 low-cost countries.It has a rapidly growing urban infrastructure fostering several IT centres in the country.Offshore service centres are spawning in the country due to operational excellence withlow delivery cost, quality leadership and a conducive business environment. Favourablepolicy interventions, enabling infrastructure and augmenting a wide skill base from thegovernment has further enhanced India's brand image.

The Department of Electronics and Information Technology is coordinating strategicactivities, promoting skill development programmes, enhancing infrastructure capabilitiesand supporting R&D for India's leadership position in IT and IT-Enabled services.

OVERVIEW

The Company is proactively trying to seize the opportunity as initiated by theGovernment of India through Foreign Direct Investment in the Sector. This would besynergistic with the business of the Company and long-term benefits would accrue to theCompany once the newly undertaken project scales to its culmination to enhance the valueof shareholders with other stakeholders.

INTERNAL CONTROL SYSTEMS

The Company has adequate internal control systems for achieving efficiency inoperations, optimum utilization of resources, effective monitoring thereof and compliancewith applicable laws and regulations. The Audit Department conducts audits at variousdepartments based on an annual audit plan with due weightage to the risk parametersassociated with the business processes.

The Company regularly reviews the adequacy and effectiveness of the internal controlsand suggests improvements for strengthening them.

HUMAN RESOURCES

In-house training Programme on various technical, attitudinal and supervisory aspectswith the help of internal as well as external faculty, were conducted for employees afteridentifying their specific training needs in consultation with the respective departmentalheads. The focus of the training was to create high performance culture as well asbringing an improvement in the organization.

The Company maintained cordial human relations throughout the year under review.

FINANCIAL PERFORMANCE

The details of the financial performance of the Company are appearing in the BalanceSheet and the Profit &Loss Account

OPPORTUNITIES, THREATS & OUTLOOK

The Company has invested in infrastructure development with a view to further cementthe existing relationships and securing new customers. The Company maintains a persistentcompetitive focus with trusting and enduring partnerships with major technology company.

The Company also striving to resorts to strengthen its position by internallyrealigning its business and streamlining its operations with the definite intents ofreducing cost and enhancing stakeholders' value.

On behalf of the Board
P. Singhi, Whole time Director
Kolkata, 13th August, 2012. N. Sachan, Director

ANNEXURE TO DIRECTORS’ REPORT

Report on Corporate Governance:

1. Philosophy on code of governance

The Company believes in and supports the principles and practices of good CorporateGovernance. Your Company is following the philosophy of good Corporate Governance byfocusing on transparency, accountability, professionalism and corporate socialresponsibility for enhancing shareholder values. Your board believes that the CorporateGovernance is a continuous process as such Company will continue its efforts towardsraising the standards in Corporate Governance by reviewing its procedures and systems tokeep pace with the changing economic environment. The Company also believes that employeesof the Company subscribe to the corporate values and apply them in their conduct byfollowing corporate governance practices.

2. Board of Directors

(i) Composition

The composition of the Board is compliant in terms of clause 49 of the ListingAgreement. The Board comprised of 5 Directors including 3 Non- Executive IndependentDirectors and Two Executive Directors and out of that one is designated as ManagingDirector and one is Whole-time Director as on 31st March, 2011.

Composition, Category, Other Directorships, Other Committee Positions held by theDirectors as on 31st March, 2012.

Name Other Committee* Positions as
Category Other Directorships in Public Limited Companies incorporated in India Chairman Member
Shri Yashwant Rampuria Whole Time Director
Shri Pramod Singhi Whole Time Director
Shri Neeraj Sachan Non- Executive
Independent
Director
Shri Ashok Agarwal — do —
Shri Pankaj Sachan — do —

* Only the other Committee positions held in Audit and Shareholders Grievance Committeein Indian Public Limited Companies are considered.

(ii) Board Meeting:

The Board of Directors of the Company met five times during the year 2011-2012.

The Board meetings during the financial year 2011-2012 were held on 30th April, 2011;30th July, 2011; 3rd September, 2011; 31st October, 2011 and 31st January, 2012 The gapbetween any two meetings did not exceed four months.

(iii) Attendance of Directors:

Attendance of Directors at the Board Meetings held during 2011-2012 and at the lastAnnual General Meeting.

Name of Directors Meetings attended out of 5 Board Meetings held during (2011-2012) Whether Attended last AGM held on 30th September, 2011
Yashwant Rampuria 5 Yes
Shri Neeraj Sachan 5 Yes
Shri Ashok Agarwal 5 No
Shri Pankaj Sachan 5 No
Shri Pramod Singhi 5 Yes

(iv) The Company has laid down the code of conduct for all its Board Members and SeniorManagement Personnel and necessary declarations affirming compliance thereto has receivedfrom all of them. The code of conduct is available on the website of the Company.

(v) Prevention of Insider Trading :

As per the SEBI (Prohibition of Insider Trading) Regulations 1992, the CompanySecretary is the Compliance Officer and is responsible for setting forth policies,procedures, monitoring adherence to the rules for the preservation of price sensitiveinformation, pre-clearance of trade, monitoring of trades and implementation of the Codeof Conduct for trading in Company's securities under the overall supervision of the Board.The Company has adopted a Code of Conduct for Prevention of Insider Trading as well as aCode of Corporate Disclosure Practices.All the Directors on the Board, employees at seniormanagement level at all locations and other employees who could be privy to unpublishedprice sensitive information of the Company are governed by this Code.

3. Audit Committee

Constitution of the Committee:

The Audit Committee of the Company has been constituted as per Section 292A of theCompanies Act, 1956 and in terms of Clause 49 of the Listing Agreement. The AuditCommittee is responsible for effective supervision of the financial reporting process,ensuring financial and accounting controls and also ensuring compliance with the financialpolicies of the Company. The Audit Committee may also review such matters as consideredappropriate as per the terms of reference stipulated in Clause 49 II (C) and (D) of theListing Agreement.

Composition and Meetings of the Committee:

The Audit Committee of the Company comprises with Shri Neeraj Sachan as Chairman, ShriPankaj Sachan and Shri Ashok Agarwal as Members.

Attendance of Members at the Meetings of the Audit Committee held during 2011-2012.

Five meetings were held during the period on 30th April, 2011; 30th July, 2011; 3rdSeptember, 2011; 31st October, 2011 and 31st January, 2012

Members Meeting Attended
Shri Neeraj Sachan 5
Shri Ashok Agarwal 5
Shri Pankaj Sachan 5

4. Remuneration Committee:

The broad terms of reference of the Committee is to determine and recommend to theBoard the remuneration payable to the Executive Directors in terms of Schedule XIII of theCompanies Act, 1956. The Committee comprises three non-executive independent Directorsviz., Shri Neeraj Sachan as Chairman, Shri Ashok Agarwal and Shri Pankaj Sachan asMembers.

Non- Executive Directors do not draw any remuneration and do not have any materialpecuniary relationship/ transactions with the Company in their personal capacity at large.Executive Directors were paid as a part of their remuneration.

The Committee met once on 3rd September, 2011 during the year. Shri Neeraj Sachan, ShriAshok Agarwal and Shri Pankaj Sachan were attended the Meetings.

5. Shareholders/ Investors’ Grievance Committee.

The Company has a Shareholders/ Investors' Grievance Committee (the Committee). TheCommittee deals with various matters relating to transfer/transmission ofShares/debentures, issue of duplicate shares/debentures, issue and allotment ofrights/bonus shares, review of shares dematerialized and all other related matters.

The Committee comprises of three members. viz., Shri Pankaj Sachan, Shri YashwantRampuria as Members and Shri. Neeraj Sachan as Chairman.

The Committee met once on 3rd September, 2011 during the year and all the members werepresent at the meeting.

During the year 16 letters were received from shareholders out of which 6 were of thenature of complaints/grievances and the rest relate to application fortransfers/transmission of shares. The complaints had been attended to the satisfaction ofthe shareholders. No share transfer pending as on 31st March, 2012.

None of the Directors of the Company holding shares/ convertible Instruments of theCompany either by self or on behalf of others as beneficiary during the year under review.

6. General Body Meetings :

The last 3 Annual General Meetings of the Company were held on the following dates:

Dates Time Venue Special Resolution/s
19th September, 2009 10.30 a.m. Science City, Seminar Hall No
Kolkata - 700 046
28th September, 2010 10.30 a.m. Science City, Seminar Hall No
Kolkata - 700 046
30th September, 2011 10.30 a.m. Science City, Seminar Hall No
Kolkata - 700 046

There were no special resolutions passed by the Company through Postal Ballot duringthe year and no resolution is proposed to be conducted by means of Postal Ballot atpresent.

Resume' and other information regarding the directors seeking appointment/reappointment as required by sub clause (i) of Clause 49 (IV) (G) of the Listing Agreementhas been given in the Notice of the Annual General Meeting annexed to this Annual Report.

7. Disclosures:

The Company has not entered into any related party transactions of material nature withits promoters, the Directors or the Management, their subsidiaries or relatives that mayhave potential conflict with the interest of the Company at large during the year2011-2012.

There have been generally no instances of non-compliance on any matters by the Company.

8. Other Disclosures

Non- Mandatory Requirement: The Company has not yet adopted the Whistle Blower Policyand other non-mandatory requirement.

Mandatory Requirement: The CEO and CFO Certificate as required has been placed beforethe Board at its Meeting 3rd September, 2012 and that forms part of this Annual Report.All other mandatory requirements have been duly complied with, as far as practicable.

The Board Members and Senior Management Personnel have affirmed the compliance of Codeof Conduct.

9. Means of Communication.

a) Half yearly report sent to each household of shareholders: No

b) Quarterly Results: Published in Newspapers: Business Standard / Pratidin

c) Website, where displayed : www.zigmasoftware.com

d) whether it also displays official news releases : Yes

e) The Presentation made to institutional investors or to the analyst: Yes

f) The Management Discussion and Analysis is a part of the Annual Report.

10. General Shareholder Information.

I) Annual General Meeting Date & Time : Saturday 29th September, 2012 At 10.30 a.m. Venue : Science City Seminar Hall, Topsia, Kolkata-700046
II) Financial Year 1st April to 31st March
III) Book Closure Date 27th September, 2012 to 29th September, 2012 (both days inclusive)
IV) Dividend No dividend during the year
V) Listing on Stock Exchange The Calcutta Stock Exchange Ltd., (CSE)
The Bombay Stock Exchange Ltd, (BSE)
Listing fees have been paid and there is no fee outstanding as on date.
VI) Stock Code CSE : 1001249
BSE : 532177
DEMAT ISIN Number : INE746C01032

VII) Stock Price:

Monthly High Low
April 2011 5.70 3.91
May 2011 6.07 3.54
June 2011 4.73 3.73
July 2011 5.74 3.86
August 2011 4.23 3.40
September 2011 3.80 3.20
October 2011 3.80 3.34
November 2011 3.80 2.85
December 2011 3.10 2.10
January 2012 2.83 1.97
February 2012 3.00 2.23
March 2012 2.90 2.11

 

VIII) Registrar & Share Transfer Agents M/s. MCS Limited acting as Registrar & Share Transfer
Agent (RTA) for both Physical and Demat modes of
Securities.
Address: MCS Limited, 77/2A, Hazra Road,
Kolkata - 700 029
Ph. No. (033) 2454 1892/93, Fax (033) 2454 1961
IX) Share Transfer System The transfer of shares in Demat mode need not be approved by the Company. The transfers of Physical Shares, which are complete in all respects, are taken up for approval and the transferred securities are dispatched to the transferee within the stipulated time.

X) Distribution of shareholding as on 31st March, 2012.

Category No. of Share(s) held Percentage (%) to Total
A Promoter(s) Holding
1. Promoters
a. Indian Promoters 110 0.00
b. Foreign Promoters
2. Persons Acting in Concert
Sub Total 110 0.00
B. Public Share Holding
3. Institutional Investors
a. Mutual Funds and UTI
b. Bank/ Financial Institutions/
Insurance companies 1500 0.00
c. FIIs
Sub Total 1500 0.00
4. Others
a. Bodies Corporate 13373292 32.03
b. Indian Public 28309943 67.79
c. Non Resident Indians 75155 0.18
Sub Total 41758390 100.00
Grand Total 41760000 100.00

 

Shareholding (Range) No. of shares % No. of Shareholders %
1 — 500 2976920 7.13 17925 82.13
501 — 1000 1502323 3.60 1766 8.09
1001 — 2000 1394094 3.34 888 4.07
2001 — 3000 804605 1.93 308 1.41
3001 — 4000 535585 1.28 145 0.66
4001 — 5000 802160 1.92 167 0.77
5001 — 10000 1834428 4.39 235 1.08
10001 — 50000 6257872 14.99 278 1.27
50001 — 100000 2579694 6.18 37 0.17
100001 — Above 23072319 55.25 76 0.35
Total 41760000 100.00 21825 100.00

 

XI) Dematerialization of Shares as on 31st March, 2012 The Company has entered into arrangements with National Securities Depository Ltd., and Central Depository Services (India) Ltd. whereby Shareholders have an option to dematerialize their shares with either of the depositories.
As regards the shares held in depository 41683299 shares have been dematerialized as on 31st March 2012, which accounts for 99.82 % of the total Shares.
XII) Outstanding GDRs /ADRs/ Warrants or any Convertible instruments, conversion dates NIL
XIII) Address for Correspondence Registered Office
P-113, Kalindi Housing Estate, Ground Floor,
Lake Town, Kolkata -700089

 

On behalf of the Board
P. Singhi, Whole time Director
Kolkata, 13th August, 2012. N. Sachan, Director

Declaration

The Board Members and Senior Management Personnel have given declaration relating tothe Code of Conduct for the Year 2011-12 as per the Clause 49 of the Listing Agreement.

For Zigma Software Limited
On behalf of the Board
Kolkata, 13th August, 2012. P. Singhi, Whole time Director

Auditors’ Certificate on Compliance with the Conditions of Corporate Governanceunder Clause 49 of the Listing Agreement(s)

To the Members of Zigma Software Ltd. :

We have examined the compliance of conditions of corporate governance by Zigma SoftwareLimited for the year ended on 31st March,2012 as stipulated in Clause 49 of the ListingAgreement of the said Company with stock exchanges.

The compliance of conditions of corporate governance is the responsibility of theManagement. Our examination was limited to the procedures and implementation thereof,adopted by the Company for ensuring the compliance of the conditions of the corporategovernance. It is neither an audit nor an expression of an opinion on the financialstatements of the Company.

In our opinion and to the best of our information and according to the explanationsgiven to us, we certify that the Company has complied with the conditions of corporategovernance as stipulated in the above mentioned Listing Agreement.

We further state that such compliance is neither an assurance as to the futureviability of the Company nor the efficiency or effectiveness with which the Management hasconducted the affairs of the Company.

For Bijan Ghosh & Associates
(Chartered Accountants)
Place: Kolkata (BIJAN GHOSH)
Date: 13th August, 2012. Partner
.