MPS Infotecnics Ltd
Directors Reports
DIRECTOR’S REPORT
Dear Members,
Your Directors have pleasure in presenting before you the Twenty-ninth Annual Report of
your Company together with the Audited Financial Statements for the Financial Year ended
31st March, 2018.
I. FINANCIAL RESULTS
The Financial results of the company for the period under review are as below:
|
|
|
|
Rs. In lacs |
| Particulars |
2017-18 |
2017-18 |
2016-17 |
2016-17 |
|
Standalone |
Consolidated |
Standalone |
Consolidated |
| Income from operations |
7,705.11 |
7,776.73 |
18,643.49 |
20,328.15 |
| Other Income |
685.87 |
685.87 |
140.29 |
145.74 |
| Total Income |
8,390.98 |
8,462.60 |
18,783.78 |
20,473.89 |
| Total Expenditure |
7,907.46 |
7,979.46 |
18,783.27 |
20,476.71 |
| Profit / (Loss) Before Interest, Depreciation & Tax |
483.52 |
483.14 |
0.51 |
(2.82) |
| Interest |
321.17 |
321.17 |
40.04 |
40.04 |
| Depreciation |
162.53 |
162.53 |
106.84 |
106.84 |
| Profit before Tax |
(0.18) |
(0.56) |
(146.37) |
(149.70) |
| Provision for Taxation |
|
|
|
|
| a) Current Tax |
- |
- |
- |
- |
| b) Earlier year (Net) |
(360.29) |
(360.29) |
- |
- |
| c) Deferred Tax |
108.98 |
108.98 |
(61.38) |
(61.38) |
| Profit / (Loss) after Tax |
251.13 |
250.74 |
(84.99) |
(88.32) |
| Profit b/f. from previous year |
(2,536.02) |
(2,535.14) |
(2,451.03) |
(2,446.82) |
| Balance carried to Balance Sheet |
(2,284.89) |
(2,284.40) |
(2,536.02) |
(2,535.14) |
| Transfer to General Reserve |
- |
- |
- |
- |
| Paid-up equity Share Capital (Face value |
37,744.37 |
37,744.37 |
37,744.37 |
37,744.37 |
| - Re. 1/-) |
|
|
|
|
| Reserves & Surplus |
7,485.12 |
8,141.01 |
7,229.86 |
7,884.17 |
II. DIVIDEND
In order to plough back its resources, the Board has decided not to recommend any
dividend for the year ended 31st March 2018.
III. RESERVES
No amount is being carried to reserves.
IV. SHARE CAPITAL
There is no change in the issued, subscribed and Paid-up equity share capital of the
company
V. CHANGES IN THE NATURE OF BUSINESS, IF ANY
There is no change in the nature of business of your company during the year under
review
VI. DETAILS OF SIGNIFICANT AND MATERIAL ORDER PASSED BY THE REGULATORS OR COURTS OR
TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY’S OPERATIONS IN FUTURE
SEBI vide its letter dated 7th August 2017, took pre-emptive interim measures under
section 11(1) of SEBI Act in respect of listed shall companies which included the name of
your company also.
SEBI directed stock exchanges to place trading restrictions on promoters / directors
and place the scrip in the ‘trade to trade’ category with limitation on the
frequency of trade and imposed a limitation on the buyers by way of 200% deposit on the
trade value. The said measures were directed by
SEBI pending final determination after verification of credentials and fundamentals by
the Stock Exchanges, including by way of Audit and forensic audit, if necessary. Pursuant
to the above, National Stock Exchange (NSE) vide notice dated August 7, 2018 addressed to
all its market participants, initiated actions envisaged in SEBI letter dated August 7,
2018 in respect of all the listed companies including your company w.e.f. 8th August 2017.
Your company had thereafter made representation, provided the stock exchange, on their
request, the Auditors Certificate, inter alia to following effect:
(a) Status filing of Income Tax Returns for the last three years and status of
disputes, if any, pending with the Income Tax Department.
(b) Status w.r.t. your company’s compliance with all requirements of Companies Act
and Annual Returns filed during last three years; Your Company also provided Secretarial
Audit Reports for the last three years.
(c) Description of business model along with Bank statements of last year with active /
dormant status, evidencing the company is a going concern
(d) Status of Company w.r.t. defaults to any bank / financial
(e) Status of compliance with all the listing regulations requirements for a period of
last three years
Your company was given an opportunity of personal hearing in the matter by NSE.
Pursuant to which
NSE had submitted its report to SEBI, however, SEBI directed the Stock Exchanges to
dispose of the representations received by them directly from the company.
NSE thereafter given another opportunity of personal hearing in the matter to your
company in the month of December 2017 and raised certain queries and sought your
company’s reply in writing which was provided to NSE in January 2018. On 10th January
2018, disposed of your company’s representation and modified the actions envisaged in
SEBI’s letter dated August 7, 2018.
The above directions took effect from the date of orders i.e. 10th January 2018 and are
still in force
The NSE thereafter sometime in the month of February 2018 appointed M/s. M.K. Aggarwal
& Co. as the forensic Auditor to conduct audit of the company. Your company has fully
co-operated with the said auditors and had concluded their audit. We presume that the said
forensic auditors might have forwarded their report to the Stock Exchange, though there is
no communication either from the Forensic Auditors or from the Stock Exchange.
VII. BUSINESS PERFORMANCE / FINANCIAL OVERVIEW
THE COMPANY IS PRESENTLY ENGAGED IN THE FOLLOWING AREAS:
IT Solutions & Products, which comprise of:
System Integration and Networking Solutions (Including Hardware) Enterprise Software
Trading of UID Kit
The entire business has three modes of execution of business i.e. Trading of Hardware
and Peripherals; Establishing IT Infrastructure and Customization and up-gradation. The
Company, based on the orders, procures material from leading Dealers and Distributors of
leading brands of IT and IT Infrastructure product manufacturers like HP, Samsung, LG,
Lenovo, Dell, Acer, etc. thereafter the same are supplied.
IT Enabled Services comprising of:
Domain Registration & Web Hosting Services VAS & IT enabled Services Aadhaar
Enrolment Printing of Election Cards
SignDomainsTM is India’s first ICANN registration of top level domains
(TLD) including .com .net .org .info .biz .in etc. Catering to a global client base
through its on-line presence and secure payment gateway. SignDomainsTM has
several corporates, large portals, resellers and end-users as its clientele.
The Company has tied up with various top level TLDs and offer its network of over 400
Re-sellers as well as directly by the Company.
MPS offers web-hosting solutions on MPS dedicated servers located at server farms and
data centres located in US.
Value added services like SMS, payment gateways, messaging, e-identity management,
e-commerce are available for corporate clients and other businesses.
The Company was engaged by CSC e-Governance Services India Ltd. a Central Government
organization for providing support for the implementation of the Election project in the
state of Gujrat. We were also engaged by CSC e-Governance Services India Ltd. for printing
of Election Cards.
Telecommunication, through web portal www.uvapoint.com comprising of
DTH, Postpaid, prepaid mobile recharge; Insurance;
Ola Car booking
The Company is aggressively working on capitalizing on the ever-growing telecom enabled
services market in India. It has firmed up plans enabled services to customers ranging
from prepaid mobile top-up, post-paid mobile bill payment, DTH recharge, landline bill
payments, data-card recharge / payments bulk SMS, mobile application and software
application. The company has tied up with ANI Technologies Pvt. Ltd. for booking of OLA
cabs through our web portal www.uvapoint.com. Now our customers who do have smart phones,
can book a cab through our web portal www.uvapoint.com. The company has also tied up with
Easy Policy Easy policy is an insurance web aggregators licensed as such by IRDA. The
tie-up with Easy Policy has enabled insurance market place at UVApoint. Now our retailers
can show an interested customer different offers from several insurance providers and
customer can choose the best one as per his choice which in turn enables our retailers and
the company to generate additional income from insurance services.
Effective training of retailers and customer care services will back this activity.
In the fiscal year 2017-18 the consolidated revenues decreased to Rs. 7776.73 lacs from
Rs. 20328.15 lacs during the previous year, whereby registering decline in revenues by
61.74%. The consolidated Profit / (Loss) before interest, depreciation and tax (EBIDT) is
at Rs. 483.13 lacs as compared to loss of Rs. 2.82 lacs suffered by the company during the
previous year. The consolidated Profit / (Loss) after Tax (PAT) during the financial year
under review was Rs. 250.74 lacs as compared to loss of Rs. 88.32 lacs. During the
financial year under review the company had earned profits after tax of Rs. 1680.20 lacs
which is on account of sale of one of the properties of the company and reversal of Income
tax along with interest charged in earlier years.
During the Financial year 2017-18 the standalone revenues declined to Rs. 7705.11 lacs
from Rs. 18643.49 lacs during the previous year, whereby registering a decline in revenues
by 58.67%. Though there has been an increase in profits after tax of Rs. 251.13 lacs as
compared to a loss of Rs. 84.99 lacs suffered by the company during the previous year. The
profits again is on account of sale of one of the company’s property and reversal of
income tax along with interest charges in earlier years.
Segment wise Performance
The segment wise revenues and profits are tabulated hereunder:
| Segment |
Consolidated |
Standalone |
|
2017-18 |
2016-17 |
2017-18 |
2016-17 |
| Segment Revenue |
|
|
|
|
| IT Solutions & Products |
196.55 |
591.68 |
196.55 |
591.68 |
| IT enabled Services |
50.14 |
112.38 |
50.14 |
112.38 |
| Telecommunications |
7530.05 |
19624.09 |
7458.43 |
17939.43 |
| Total Revenues |
7776.73 |
20328.15 |
7705.12 |
18643.49 |
| Segment Results - Profit / (loss) before Interest and tax) |
|
|
|
|
| IT Solutions & Products |
(3.24) |
(15.09) |
(3.24) |
(15.09) |
| IT enabled Services |
4.13 |
10.25 |
4.13 |
10.25 |
| Telecommunications |
(186.79) |
(123.99) |
(186.41) |
(115.21) |
| Total |
(185.91) |
(128.84) |
(185.52) |
(120.06) |
| Less: Interest |
321.16 |
40.04 |
321.17 |
40.04 |
| Less: Other un-allocable Expenditure net off |
179.36 |
126.56 |
179.36 |
126.57 |
| Add: Un-allocable Income |
685.87 |
145.74 |
685.87 |
140.03 |
| Profit before Tax |
(0.56) |
(149.70) |
(0.18) |
(146.37) |
There has been a sharp decline in the business of the company which is mainly
attributable to stiff competition both from the organized sector and unorganized sector,
low margins and long credit periods. The company is still to come out of the effectsof
de-monetization. All the segments in which the company is engaged are under performing and
your Company is taking stern steps to increase its market share.
In its endeavor to increase its market share in its existing business your company has
decided to sell its stake in its subsidiaries subject to the approval by the shareholders
in this Annual General Meeting and focus on its core business of development of enterprise
software and Domain registration and web-hosting and Telecommunication.
Your company is optimistic and expects to generate revenues in the times to come.
MPS was registered with UIDAI as one of its enrolment agency for Aadhaar Card. However,
due to technical issues and change in policy of appointment of Aadhaar Agency, your
company could not meet the requirements hence the company’s application for renewal
had been kept pending by the Authority. Now that your company is able to meet the Policy
requirements of Aadhaar Enrolment Agency, the company would again be applying for
registration. Your company is hopeful that it would again get itself registered with UIDAI
as an Enrolment Agency. During the year under review the shares of your company were put
under GSM Grade VI surveillance w.e.f.
7th August 2017 by the Stock Exchanges where the shares of your company are listed.
Your Company made its representation before the National Stock Exchange, however, the
Exchange appointed M/s.
M.K. Aggarwal & Co. to conduct Forensic Audit of your company. Your company has
fully co-operated with the said auditors and concluded their audit. We hope that they
might have by now submitted their report to National Stock Exchange. Your company is yet
to receive any communication in this regard from the Stock Exchange.
There are no material changes or commitments affecting the financial position of the
Company between the end of the financial year and to the date of the report.
In summary, your company is well positioned in the markets it serves with a broad range
of service offerings and a diversified customer base.
VIII. DETAILS OF SUBSIDIARIES / JOINT VENTURES / ASSOCIATES COMPANIES
Currently Your Company has three wholly owned foreign subsidiary Companies namely:-
M/s Axis Convergence Ltd. (Incorporated in Mauritius), M/s Greenwire Network Ltd.
(Incorporated in Hong Kong) and Opentech Thai Network Specialists Co. Ltd. (OTNS)
(Incorporated in Thailand).
In the last Annual General Meeting of the company held on 29th September 2017, the
members had approved disinvestment in Opentech Thai Network Specialists Co. Ltd. (OTNS) a
company incorporated in Thailand, however, the resolution approving disinvestment could
not be given effect. Now the company is proposing to disinvest in all its subsidiaries to
enable it to concentrate its businesses in India. There has not been any material change
in the nature of the business of the subsidiaries though the revenues have declined.
During the year, the Board of Directors reviewed the affairs of the subsidiaries.
Performance and financial position of each of the Subsidiaries, Associates and Joint
Venture companies included in the Consolidated Financial Statements:
The performance and financial position of the subsidiaries, associate companies and
joint venture companies included in the consolidated financial statement is provided in
accordance with the provisions of Section 129 read with Rule 5 of the Companies (Accounts)
Rules, 2014 containing the salient features of the financial statement of Company’s
subsidiaries/joint ventures or associate companies in Form AOC 1 in "Annexure I"
to this report.
The Consolidated Financial Statements have been prepared in accordance with Indian
Accounting
Standards Ind AS 110 issued by The Institute of Chartered Accountants of India and
shown the financial resources, assets, liabilities, income, profits and other details of
your Company and its subsidiaries as a single entity, after elimination of minority
interest.
The statement also provides the details of performance and financial position of each
of the subsidiaries.
In accordance with section 136 of the Companies Act, 2013 Audited Financial Statements,
including the consolidated financial statements and related information of the Company and
Audited Accounts of each of its subsidiaries, are available on our website
www.mpsinfotec.com. These documents will also be available for inspection till the date of
the AGM during business hours at our registered office in New
Delhi.
There are no subsidiaries, joint venture, or associate companies, which ceased to be
the subsidiaries, joint ventures or associate companies during the year as prescribed
under Rule 8(5) (iv) of the Companies (Accounts) Rules, 2014, The policy for determining
Material Subsidiaries formulated by the Board of Directors is disclosed on the
Company’s website and is accessible on http://www.mpsinfotec.com
IX. HUMAN RESOURCES
Your Company is of the view that while Technology can enable processes but it is the
People who actually make things happen. In a journey of delivering tangible business value
to stakeholders, Associates are envisioned as a strategic differentiator for the Company.
Your Company promotes an empowered and collaborative work environment where leaders
stay engaged with the Associates and encourage them to challenge conventional thinking.
Our employees are our biggest assets. To meet the evolving need of our clients, our
priority is to attract and engage the best talent in the right locations with the right
skills.
Your Company is committed to providing a comprehensive employment experience to
Associates with the flexibility commitments. During their tenure at the Company, employees
are motivated through various skill development programs. We create effective dialogue
through our communication channels to ensure that feedback reach the relevant team,
including leadership. Your Company invests substantially in employee engagement to
motivate employees and encourage social communication and collaboration. Your Company
continuously invests in attraction, retention and development of talent on an ongoing
basis. Your Company thrust is on the promotion of talent internally through job rotation
and job enlargement.
X. BOARD OF DIRECTORS AND KEY MANAGERIAL PERSONNEL
During the year under review all Independent Directors have given declaration that they
meet the criteria of Independence as laid down under section 149(6) of the Companies Act,
2013 and Regulation 16(1)(b) of the SEBI (Listing obligations and Disclosure Requirements)
Regulations, 2015.
In order to strengthen the Board of the Company, the Nomination & Remuneration
Committee recommended the candidature of Mr. Rachit Garg, DIN No. 07574194, to the office
of Director of the
Company. Consequent upon the recommendation by the Nomination & Remuneration
Committee, the Board of Directors in its meeting held on 30th May 2018 appointed Mr.
Rachit Garg, DIN No. 07574194, as an additional director pursuant to the provisions of
section 161 of the Companies Act, 2013, who holds office up to the date of this Annual
General Meeting and being eligible offers himself for this appointment as Non-Execution,
Non-Independent Director of the Company liable to retire by rotation.
Pursuant to the provisions of section 160 of the Companies Act, 2013, the Company has
received notice in writing from a member of the company, proposing Mr. Rachit Garg’s
candidature as Director of the company.
Mr. Rachit Garg is an MBA Finance & Marketing from UP Technical University, Meerut
apart from being a
Commerce Graduate from Chaudhary Charan Singh University, Meerut. He has a rich
experience of over 7 years in Accounts & Finance. He had earlier worked with Geiper
Consulting Pvt. Ltd. in the Accounts & Finance Department and he specializes in
marketing of financial products.
Your company will be immensely benefited his appointment as a Board Member.
During the year under review, Mr. Peeyush Kumar Aggarwal, DIN NO. 00090423, Mr. Manoj
Jain, DIN
NO. 02573858 and Mrs. Madhu Sharma, DIN NO.06947852 were the directors of the Company.
During the year Mr. RahulMeena, Chief Executive Officer
Board, upon the recommendation of the nomination and remuneration committee,
unanimously appointed
Mr. Peeyush Kumar Aggarwal as Managing Director of the Company with effect from 3rd
January, 2018.
Mr. Peeyush Kumar Aggarwal has a very long association with the Company i.e. he had
been as the Board for the past nearly 2 decades and he is also the promoter of the
Company. Mr. Peeyush Aggarwal, aged 55 years, is a Fellow Member of the Institute of
Chartered Accountants of India. He has extensive experience of over 29 years in the field
of Finance and Taxation; Corporate Laws; Project Management; strategic business planning
etc. He is first generation Entrepreneur having a clear business vision. His business
interests today are in the areas of Information Technology; Telecom; VAS; Animation and
Gaming; Digital Cinema; Pharma; Real Estate; Construction & Hospitality; Garment
Exports; and Broking (Shares, Commodities, Insurance). Other details required to be
disclosed in terms of the provisions of Secretarial Standard on General Meetings form part
of the Notice.
During the year, the non-executive directors of the Company had no pecuniary
relationship or transactions with the Company except infusion of funds by Mr. Peeyush
Kumar Aggarwal for the smooth functioning of the Company.
Pursuant to provisions of Section 203 of the Companies Act, 2013, Mr. Peeyush Kumar
Aggarwal,
Managing Director, Mr. Sanjay Sharma, Chief Financial Officer and Miss. Garima Singh,
Company Secretary & Compliance Officer were the Key Managerial Personnel of the
Company during the .
XI. COMMITTEES OF THE BOARD
As on March 31, 2018, the Board had five committees remuneration committee, the
stakeholders’ relationship committee, Corporate Social Responsibility and Risk
Management Committee. All Committees consists of Independent Directors. A detailed note on
the composition of the Board and its committees is provided in the Corporate Governance
Report section of this Annual Report.
XII. BOARD EVALUATION
Pursuant to the provisions of the Companies Act, 2013 and Regulation 19 read with
Schedule II, Part D of the Securities and Exchange Board of India (Listing Obligations and
Disclosure Requirements)
Regulations, 2015, the Board has devised a policy on evaluation of performance of Board
of Directors, Committees and Individual directors. Accordingly, the Chairman of the
Nomination and Remuneration Committee obtained from all the board members duly filled in
evaluation templates for evaluation of the Board as a whole, evaluation of the Committees
and peer evaluation. The summary of the evaluation reports was presented to the respective
Committees and the Board for their consideration.
The Board of Directors of your company has laid down Policy on appointment and removal
of Directors, Key Managerial Personnel and Senior Management. The Board of Directors has
also adopted Policy on Remuneration of the Directors, Key Managerial Personnel and other
Employees. The said policies are available on the company’s website
www.mpsinfotec.com, extracts of which are provided in Annexure II to this report.
The Company’s Policy on Appointment and Removal of Directors, KMPs and Senior
Management, includes inter alia Succession Plan for the Board of Directors, KMPs and
Senior Management. The Policy on Director’s appointment and remuneration also
includes criteria for determining qualifications, positive attributes, independence of
Director and also remuneration for key managerial personnel and other employees, forms
part of the Corporate Governance Report of this Annual Report. The Company has laid down a
policy on training for Independent Directors as part of the governance policies.
The Board Members are regularly updated on changes in Corporate and allied laws,
Taxation laws & matters thereto. MD along with Senior Management conducts exclusive
sessions for the Board Members sharing updates about the Company’s business strategy,
operations and the key trends in the IT industry relevant for the Company. These sessions
generally coincides with the Board Meetings. These updates help the Board Members to keep
themselves abreast with the key changes and their impact on the Company.
The details of programs for familiarization of the Independent Directors with the
Company are available on the Company’s website and can be accessed at the weblink;
www.mpsinfotec.com
XIII. MEETING OF INDEPENDENT DIRECTORS
Independent Directors of the Company met on May 30, 2018 to review the performance of
non-independent directors, the Board as a whole for the FY 2017-18. The Chairman of the
Company was evaluated, taking into account the views of executive directors and
non-executive directors. The Independent Directors in their separate meeting also assessed
the quality, quantity and timeliness of flow of information between the Company management
and the Board that is necessary for the Board to effectively and reasonably perform their
duties. The same was discussed in the board meeting that followed the meeting of the
Independent Directors, at which the performance of the Board, its committees and
individual directors was also discussed.
XIV. MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL POSITION OF THE
COMPANY WHICH HAVE OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR OF THE COMPANY TO WHICH
THE FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT
There are no material changes affecting the Financial Position of the Company which
have occurred between the end of the Financial Year of the Company to which the Financial
Statement relate and the date of the Report except that Mr. Rachit Garg, was appointed as
an Additional Director of the Company w.e.f. 30th May 2018.
XV. DIRECTOR’S RESPONSIBILITY STATEMENT
Pursuant to Section 134(5) of the Companies Act, 2013, your Directors, based on the
representation(s) received from the Operating Management and after due enquiry, confirm
that:
a) in the preparation of annual accounts, the applicable accounting standard had been
followed along with proper explanation relating to material departures;
b) the Directors had selected such accounting policies are consistently applied and
reasonable, made judgment and estimates that are reasonable and prudent so as to give a
true and fair view of the state of affairs of the Company as at the end of the financial
year and of the Company for that period;
c) the Directors had taken proper and sufficient records in accordance with the
provisions of this Act, for safeguarding the assets 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, in the case of a listed company, had laid down internal financial
controls to be followed by the company and that such internal financial controls are
adequate and were operating effectively.
f) the directors had devised proper systems to ensure compliance with the provisions of
all applicable laws and that such systems were adequate and operating effectively. Based
on the framework of internal financial controls and compliance systems established and
maintained by the company, work performed by the Internal, statutory and secretarial
auditors and the reviews performed by management and the relevant board committees,
including the
audit committee, the board is of the opinion that the Company’s internal financial
controls were adequate and effective during the financial year 2017-18.
XVI. DETAILS IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO
THE FINANCIAL STATEMENTS
The Company has internal financial controls which are adequate and were operating
effectively. The controls are adequate for ensuring the orderly & efficient conduct of
the business, including adherence to the Company’s policies, the safe guarding of
assets, the prevention & detection of frauds & errors, the accuracy &
completeness of accounting records and timely preparation of reliable financial
information
XVII. AUDITORS Statutory Auditor
M/s. RMA & Associates LLP, Chartered Accountants, had been the statutory auditors
of the Company and had been conducting Audit of your company since 2008-09. Pursuant to
the provisions of section 139(2) which states that, "No listed Company or a company
belonging to such class or classes of Companies as may be prescribed, shall appoint or
re-appoint –
(a) An individual as auditor for more than one term of five consecutive year; and (b)
An audit firm as auditor for more than two terms of five consecutive years
In terms of the said provisions and rules framed thereunder, M/s. RMA & Associates
LLP, Chartered Accountants, Firm Registration no. 000978N have completed two terms of five
consecutive years, therefore, the company has to appoint a fresh Chartered Accountant, to
conduct audit of the company. The Audit Committee, in its meeting held on 14th August 2018
had recommended the appointment of M/s. Nemani Garg Agarwal & Co., (Firm’s
Registration No. 010192N), Chartered Accountants (CAs), Delhi as the Statutory Auditors of
the Company and the Board of Directors in their meeting held on 14th August 2018 have also
recommended their appointment as the statutory auditors of the Company for a period of 5
years commencing from the conclusion of this Annual general Meeting till the conclusion of
the Annual General Meeting of the Company to be held in the Year 2023.
Brief Profile of Nemani Garg Agarwal & Co.
Nemani Garg Agarwal & Co. is a leading chartered accountancy firm rendering
comprehensive professional services which include Audit, Management Consultancy, Tax
Consultancy, Accounting
Services, Manpower Management, Secretarial Services etc.
Nemani Garg Agarwal & Co. is a professionally managed firm. The team consists of
distinguished Chartered Accountants, Corporate Financial Advisors and Tax Consultants. The
firm represents a combination of specialized skills, which are geared to offers sound
financial advice and personalized Those associated with the firm have regular interaction
with industry and other professionals which enables the firm to keep pace with
contemporary developments and to meet the needs of its clients
Your company has received written consent of the auditor to such appointment in terms
of Section 139
& 141 of the Companies Act, 2013, as amended, and have also obtained a certificate
in terms of Rule 3 & 4 of the Companies (Audit & Auditors) Rules, 2014, to the
effect that it is eligible for appointment and is not disqualified for appointment
regulations made there under; the proposed appointment is as per the term provided under
the Act; the proposed appointment is within the limits laid down by or under the authority
of the Act; and that there are no proceedings against the firm or any partner of the firm
pending with respect to professional matter of conduct before the Institute of Chartered
Accountants of India or other competent authority or court; that they satisfy the criteria
as provided under section 141 and other provisions, if any, of the Companies Act, 2013,
Further pursuant to the provisions of section 139 read with Rules framed thereunder,
the resolution appointing M/s. Nemani Garg Agarwal & Co, is being placed for
consideration by the members in the ensuing Annual General Meeting.
None of the Directors and Key Managerial Personnel of the Company and their relatives,
in any way and / or manner, deemed to be concerned financially or otherwise, in the
Ordinary Resolution as interested set out in the Notice.
Secretarial Auditor
As required under Section 204 of the Companies Act, 2013 and Rules thereunder, the
Board on the recommendation of the Audit Committee appointed M/s. Kundan Agrawal &
Associates, Practicing Company Secretaries, as Secretarial Auditor of the Company for the
FY 2018-19.
Internal Auditors
Pursuant to the provisions of Companies Act, 2013, and Rules thereunder, the Board of
Directors on the recommendation of the Audit Committee has appointed M/s. Sanghi &
Co., Chartered Accountants as the Internal Auditor of the Company for the FY 2018-19.
XVIII. AUDITOR’S REPORT
The observations made in the Auditors’ Report are as under:
1. The Company has shown in the balance sheet, bank balances in Banco Efisa (Lisbon
Portugal) amounting to Rs. 350,977,439/- (USD8,883,210.75) which the bank has adjusted and
the matter is in the court of law. Consequently the bank balances shown in balance sheet
is overstated by Rs. 350,977,439/.
2. The Company has increased its Authorized Capital from Rs. 52.45 Crores to Rs. 377.50
crores during the period of FY-2010-11 to FY 2012-13, ROC fees of Rs. 4.88 crores towards
the same stands payable, under the head "Other Current Liabilities" in the
financial statements.
3. Income Tax for the Assessment year 2013-14 amounting to Rs. 20.80 lacs and interest
thereon is payable.
Report of the Statutory Auditor is annexed with the Annual Report, however, as regards
qualifications made by the Auditors’ in their report your directors state as under:
1. The funds raised by the Company from GDR issue during F.Y. 2007-08 were kept in
fixed deposit account with Banco Efisa, Lisbon, Portugal, as the said amount was to be
deployed in terms of INFORMATION MEMORANDUM of the GDR issue. During the F.Y. 2008-09,
Banco Efisa, the Bank in
Portugal, wrongly debited an amount of USD 8,883,210.75 out of the balance lying in the
Company’s Account with the Bank. The Company has denied and disputed this debit and
had initiated legal action under criminal jurisprudence of Portuguese Law. During the
criminal investigation, several new facts/documents have come to our knowledge and based
on the evaluation of new facts/documents by Barristers, Senior Advocates and investigation
carried out in India, London and Portugal; your
Company has initiated a strong civil action for recovery of USD 8,883,210.75, along
with interest, against Banco Efisa and its Holding Company, wherein our Portuguese
advocates confirm that the chances of recovery are very high. The suit filed by your
company before Portuguese courts is presently pending adjudication.
2. The Company had increased its authorised capital during the Financial Year 2010-11
to 2012-13, however, due to technical issues necessary forms along with the fees w.r.t.
increase in authorised
Capital could not be filed and paid. Meanwhile, the schedule of fees was increased as
per the
Companies Act, 2013. However, the authorised capital was increased prior to the
applicability of Companies Act, 2013. Yet the ROC demanded fee as per the schedule under
the Companies Act,
2013, retrospectively which is much higher than the fees payable under the Companies
Act, 1956.
Representations made with the Ministry of Corporate Affairs did not yield any results
hence the company has filed a Writ Petition bearing No. WP(C) 5199 of 2015 before the
Hon’ble High Court of
Delhi challenging the applicability of provisions prescribed under Para 3 of Table B
under Registration of Offices and Fees Rules 2014 which is pending adjudication.
3. As regards Auditors’ remarks w.r.t. Income Tax for the Assessment year 2013-14
amounting to Rs. 20.80 Lacs and interest thereon is payable. It is stated that your
company has already provided for the amount payable towards Income Tax for AY 2013-14
along with interest hence this liability has no further impact on the profits / retained
earnings of the reported period of the Company.
The Audit Report prepared by the Statutory Auditors forms part of this Annual report.
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 had
appointed M/s. Kundan Aggarwal & Associates, Practicing Company Secretary, Delhi to
undertake the Secretarial Audit of the Company. The Secretarial Audit Report is provided
as Annexure-III. There are no qualifications, reservation or adverse remark or disclaimer
made in the Secretarial Audit Report
Reporting Of Frauds By Auditors
During the year under review, neither the statutory auditors nor the secretarial
auditor or the Internal Auditors have reported to the audit committee, under Section 143
(12) of the Companies Act, 2013, any instances of fraud committed against the Company by
its officers or employees, the details of which would need to be mentioned in the Board
Report’s.
XVII. EXTRACT OF ANNUAL RETURN
In accordance with Section 134(3) (a) of the Companies Act, 2013 read with rule 12(1)
of the Companies
(Management and Administration) Rules, 2014, extract of annual return in the prescribed
Form MGT-9 is annexed as Annexure-IV, which forms part of this report.
XVIII. PARTICULARS OF EMPLOYEES
The ratio of the remuneration of whole-time director and key managerial personnel (KMP)
to the median of employees remuneration as per section 197(12) of the Companies Act, 2013,
read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014 forms part of the Board’s Report. However, as per the
provisions of Section 136 of the Companies Act, 2013, the reports and accounts are being
sent to all the members of the Company and others entitled thereto, excluding the
aforesaid information. Any member interested in obtaining such particulars may write to
the Company
Secretary at the Registered Office of the Company. The said information shall also be
made available for inspection at the registered office of the Company during working
hours.
XIX. CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
In line with the requirements of the Companies Act, 2013 and Listing Regulations, your
Company has formulated a Policy on Related Party Transactions which is also available on
the Company’s website at http://www.mpsinfotec.com/policies.htm. The Policy intends
to ensure that proper reporting, approval and disclosure processes are in place for all
transactions between the Company and Related Parties. All Related Party Transactions are
placed before the Audit Committee for review and approval. Prior omnibus approval is
obtained for Related Party Transactions which are entered in the ordinary course of
business and are at Arm’s Length. All Related Party Transactions that were entered
into during the financial year were on an arm’s length basis. There were no
materially significant related party transactions made by the Company with Promoters,
Directors, Key Managerial Personnel or other designated persons which may have a
potential28 conflict with the interest of the Company at large.
None of the Directors have any material pecuniary relationships or transactions with
the Company except to the extent of their shareholding.
Pursuant to Section 134 (3)(h) of the Companies Act, 2013 and Rules made thereunder,
particulars of transactions with related parties as required under section 188(1) of the
Companies Act, 2013, in the prescribed Form AOC-2 is annexed herewith as Annexure-V.
XX. OBLIGATION OF COMPANY UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE
(PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013
The Company is an equal opportunity provider and consciously strives to build a work
culture that promotes the dignity of all employees. As required under the Sexual
Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and
Rules framed thereunder, the Company has implemented a policy on prevention, prohibition
and redressal of sexual harassment at the workplace. The Company has zero tolerance on
Sexual Harassment at workplace. During the year under review, there were no cases filed
pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and
Redressal) Act, 2013.
XXI. CORPORATE GOVERNANCE
A separate report on Corporate Governance is provided together with Certificate from
the Statutory
Auditors of the Company regarding Compliance of conditions of Corporate Governance as
stipulated under Listing Regulations. A Certificate of the CEO and CFO of the Company in
terms of Listing Regulations, inter-alia, confirming the correctness of the financial
statements and cash flow statements, adequacy of the internal control measures and
reporting of matters to the Audit Committee also forms part of Report on Corporate
Governance.
XXII. MANAGEMENT DISCUSSION AND ANALYSIS REPORT
A detailed Management Discussion and Analysis Report for the year under review, as
stipulated under Regulation 34 of the Listing Regulations forms part of this Report as
Annexure VI.
XXIII. RISK MANAGEMENT POLICY
In terms of the requirement of the Companies Act, 2013 the Company has developed and
implemented the Risk Management Policy. The Audit Committee and the Board reviews the same
periodically. The Risk Management Committee of the Board of Directors periodically reviews
the Risk Management framework, identified risks with criticality and mitigation plan.
The company has also laid down procedures to inform Board members about the risk
assessment and minimization procedures. These procedures are periodically reviewed to
ensure that executive management controls risk through means of a properly defined
framework.
XXIV. PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS UNDER SECTION 186 OF THE
COMPANIES ACT, 2013.
The particulars of the loans, guarantees and investments have been disclosed in the
financial statements.
XXV. CORPORATE SOCIAL RESPONSIBILITY
Pursuant to section 135 of Companies Act, 2013, Company has constituted a CSR
Committee, the details of which are available on the website of the Company (URL:
www.mpsinfotec.com/investors). Due to inadequacy of profit the Company had not contributed
any amount towards CSR activities as required under the CSR Rules, 2014.
The Corporate Social Responsibility Committee of the Company has formulated and
recommended to the29
Board, a Corporate Social Responsibility Policy (CSR Policy) indicating the activities
to be undertaken by the Company, which has been approved by the Board. The CSR Policy may
be accessed on the Company’s website at the link: http://www.mpsinfotec.com/pdf/
Coporate-Social-Resposibility (CSR)%20Policy-Final.pdf
1. The company’s CSR Policy intends to:
Strive for economic development that positively impacts the society at large with
minimal resource footprint. ? Embrace responsibility for the Company’s actions
and encourage a positive impact through its activities on hunger, poverty, malnutrition,
environment, communities, stakeholders and the society.
2. The Composition of the CSR Committee during the Financial Year 2017-18 was:
| Mr. Peeyush Aggarwal |
Promoter /Non-Executive Director and Chairman of the Committee till 2nd January 2018
and thereafter as Managing Director and Chairman of the Committee. |
| Mr. Manoj Kumar Jain |
Independent Director and Member of the Committee. |
| Mrs. Madhu Sharma |
Independent Director and Member of the Committee. |
3. Average net profit (Loss) of the company for last three financial years: (Rs.
38,019,063.33p)
Prescribed CSR Expenditure (two per cent of the amount as in item 3 above): Since the
average net profits for preceding 3 financial years are in negative, therefore no amount
that is required to be spent by the Company as CSR expenditure.
| 4. Details of CSR spent during the financial year: |
|
| (a) Total amount to be spent for the financial year; |
Nil |
| (b) Amount unspent, if any; |
Nil |
(c) Manner in which the amount sent during the financial year is detailed below.
| (1) |
(2) |
(3) |
(4) |
(5) |
(6) |
(7) |
(8) |
| S. No. |
CSR Project or activity identified |
Sector in which the Project is covered |
Projects or Programs (1) Local Area or other (2) Specify the State and district where
projects or programs was undertaken |
Amount outlay (budget) project or programs wise |
Amount spent on the projects or programs Sub-heads: (1) Direct expenditure on projects
or programs (2) Overheads |
Cumulative expenditure upto the reporting period |
Amount spent direct or through implementing agency |
Not Applicable since the company had suffered losses during the last three years
XXVI. DISCLOSURE REQUIREMENT
As per Regulation 34 of the SEBI (Listing Obligation and Disclosure Requirement)
Regulations 2015, corporate governance report with auditors’ certification thereon
and management discussion and analysis are attached and forms part of this report.
Details of familiarization programme of the independent directors are available on the
website of the Company (URL: www.mpsinfotec.com/investors).
Policy on dealing with related party transactions is available on the website of the
Company (URL: www. mpsinfotec.com/investors).
The Company has formulated and published a Whistle Blower Policy to provide Vigil
Mechanism for employees including directors of the company to report genuine concerns. The
provisions of this policy are in line with the provisions of the Section 177(9) of the Act
and the revised Regulation 22 of the listing agreements with Stock Exchanges. (URL:
www.mpsinfotec.com/investors).
The Board has, on the recommendation of the Nomination & Remuneration Committee
framed a policy for selection and appointment of Directors, Senior Management and their
remuneration. The Remuneration Policy is stated in the Corporate Governance Report. The
remuneration policy is also available on the company’s website.
(URL:www.mpsinfotec.com/investors).
XXVII. DEPOSITS
Though Your Company has not accepted any fixed deposits and, as such, no amount of
Principal or interest on deposits from public was outstanding as of the date of balance
sheet yet pursuant to the provisions of Chapter V of the Act, below is the details
relating to deposits:
| Particulars |
Amount *Rs.) / Remarks |
| (a) accepted during the year |
Nil |
| (b) remained unpaid or unclaimed as at the end of the year |
Nil |
| (c) whether there has been any default in repayment of deposits or payment of interest
thereon during the year and if so, number of such cases and the total amount involved |
N.A since the company has not accepted any deposits |
| (i) at the beginning of the year |
Nil |
| (ii) maximum during the year |
Nil |
| (iii) at the end of the year |
Nil |
XXVIII. SECRETARIAL STANDARDS
The Company has complied with the provisions of the applicable secretarial standards,
i.e. SS-1 (Secretarial Standard on Meetings of the Board of Directors) and SS-2
(Secretarial Standards on General Meeting).
XXIX. CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION
Your Company is mainly engaged in the business of IT and IT enabled services, providing
solutions to the customers. The operations of your Company are accordingly not energy
intensive. However, adequate measures are taken to conserve energy and ensure its optimum
consumption by using and purchasing energy-efficient equipments. Your Company is committed
to follow a high standard of environmental protection and provision of a safe and healthy
work place for our people, customers and visitors. As energy costs comprise a very small
part of our total expenses, the financial impact of these measures is not material. The
company has not imported any technology during the year under review.
XXX. RESEARCH & DEVELOPMENT
Your Company strives to deliver high quality services to its customers and in such
endeavor, constantly invests in and undertakes research & development aimed at
improving its solutions. MPS has a dedicated business unit for Research & Development
which delivers innovative solutions to clients and also fosters R&D within all
business units to create intellectual property in the form of re-usable components,
frameworks, etc., which help drive greater productivity. The company is carrying on R and
D in multiple forms, but all of these are focused on better efficiency systems
methodologies and capabilities. Your company is committed to provide I.T. solutions that
are innovative and continuously upgraded in keeping with emerging technology trends by a
motivated workforce that includes R and D group, on time; all the time; resulting in
maximizing stake holder’s value. We have continued to invest in some fundamental
research involving small budget with long term perspective. In order to excel at new
operations and activities. MPS stress is on continuous innovation and research, based on
market requirements and customer expectations.
XXXI. FOREIGN EXCHANGE EARNINGS AND OUTGO
Particulars of foreign exchange earnings and outgo are as follows:
|
|
(Rs. In Lacs) |
| Particulars |
Year ended 31.03.2018 |
Year ended 31.03.2017 |
| Foreign exchange earnings |
0.74 |
20.64 |
| Foreign exchange Outgo |
16.56 |
29.24 |
XXXII. ACKNOWLEDGEMENTS
The Board of Directors acknowledges their deep appreciation to our customers, vendors,
Financial Institutions, Business Associates, Bankers and all other Stakeholders for their
continued co-operation and support to the Company.
The Board places its special appreciation and values the trust reposed and faith shown
by every shareholder of the Company.
The Board places on record its deep appreciation for the cooperation extended by
Auditors of the Company. Further, the Board wishes to record its deep gratitude to all the
members of MPS family for their whole hearted support. The Board is also confident that
the employees will continue to contribute their best in the year to come.
|
For and on behalf of the Board |
|
MPS Infotecnics Ltd. |
| Place : New Delhi |
SD/- |
| Date: 31st May, 2018 |
Peeyush Aggarwal |
|
Chairman & Managing Director |
|
DIN No. 00090423 |