FCS Software Solutions Ltd
Directors Reports
(For the Year 2018-2019)
Dear Stakeholders,
We have pleasure in presenting the 26th Directors Report on business and operations,
together with the Audited Statement of Accounts, for the financial year ended March 31,
2019.
|
|
(Rs. in Lakhs) |
|
Standalone |
Consolidated |
|
F.Y 2018-19 |
F.Y2017-18 |
F.Y 2018-19 |
F.Y 2017-18 |
| Revenue from operation |
3962.00 |
3101.13 |
4040.36 |
3430.76 |
| Other Income |
200.66 |
653.61 |
224.95 |
655.19 |
| Total Income |
4162.66 |
3754.73 |
4265.32 |
4085.95 |
| Operating Expenditure |
3464.33 |
3205.64 |
3663.54 |
3595.62 |
| Depreciation and Amortization exps |
333.89 |
104.23 |
16948.45 |
6221.32 |
| Total Expenses |
3798.22 |
3309.87 |
20611.99 |
9816.94 |
| Profit before finance cost and tax |
364.44 |
444.86 |
(16241.21) |
(5693.20) |
| Finance Cost |
104.72 |
37.62 |
105.47 |
37.78 |
| Profit before tax |
259.72 |
407.24 |
(16346.68) |
(5730.99) |
| Tax expense |
78.1 |
105.08 |
81.20 |
105.24 |
| Profit for the year |
178.61 |
302.16 |
(16427.88) |
(5836.22) |
The Board of Directors has made conscious efforts for drawing the financial statements
on the basis of sound, accepted and conservative accounting principles to comply with the
Accounting Standards Specified under Section 133 of Companies Act, 2013, read with Rule 7
of the Companies (Accounts) Rules, 2014 and the relevant provisions of the Companies Act,
2013. The revenues generated have to provide for prior period adjustments and provisions
also but at the same time it ensure true and fair financial statements of the Company. The
Company has adopted the Indian Accounting Standards (Ind AS) from 1st April, 2016.
The comparative financial information of the Company for the year ended 31st March,
2019 have also been reinstated to comply with Ind AS.
Financial Review
For the financialyear ended March 31, 2019, the Company reported a total Consolidated
revenue income of Rs. 4040.36 lakhs and Standalone revenue of Rs. 3962.00 lakhs.
Changes in Share Capital.
During the year 2018-19, there was no change in the share capital of the Company.
Changes in the nature of business
During the year 2018-19, there were no change in the nature of business of the company.
Material changes and Commitments
There has been no material changes and commitments affecting the financial position of
the company which have occurred between the end of the financial year of the company to
which the balance sheet relates and the date of this report.
Transfer to Reserves
The Board of Directors of your company, has decided not to transfer any amount to the
Reserves for the year under review.
Dividend
The Board of Directors of your company, after considering holistically the relevant
circumstances has decided that it would be prudent, not to recommend any Dividend for the
year under review.
Director and Key Managerial Personnel (KMP)
Mr. Sunil Sharma, Executive Director of the Company, who retires by rotation in terms
of section 152(6) of the Companies Act, 2013 is proposed to be appointed as an Executive
Director of the Company in the Annual General Meeting to be held on 13th November, 2019.
Mr. Shayam Sunder Sharma, Independent Director of the Company, was appointed as per
Section 149 of the Companies Act, 2013, in 2014 for a period of five years. His first term
expires on 23rd September, 2019. The Board recommends his appointment for the second term
of 5 years w.e.f. 24th September, 2019 subject to approval of shareholders. The Board has
received his eligibility and consent for re-appointment.
Mrs. Shweta Shatsri, Independent Director of the Company, was appointed as per Section
149 of the Companies Act, 2013, in 2014 for a period of five years. Her first term expires
on 23rd September, 2019. The Board recommends his appointment for the second term of 5
years w.e.f. 24th September, 2019 subject to approval of shareholders. The Board has
received her eligibility and consent for re-appointment.
The Independent Directors have submitted required declarations that they fulfill the
requirements as stipulated in Section 149(6) of the Companies Act, 2013 and SEBI (LODR)
Regulations. Pursuant to Clause VII (1) of Schedule IV of the Companies Act, 2013. The
Independent Directors had a separate meeting on 11th February, 2019 during Financial Year
2018-19. The Independent Directors have also complied with the Code for Independent
Directors prescribed in Schedule IV of the Act.
Mr. Dalip Kumar, Chairman & Managing Director of the Company, was appointed as per
Sections 196, 197, 203 of the Companies Act, 2013, in 2013 for a period of five years. His
term will expire on 31st March, 2020. The Board recommends his appointment for further
term of 5 years with effect from 1st April 2020 to 31 March 2025. The Board has received
his eligibility and consent for re-appointment.
Mr. Dalip Kumar (Chairman & Managing Director), Mr Sunil Sharma (Executive
Director), Mr. Anil Kumar Sharma (Chief Financial Officer) and Ms. Harsha Sharma (Company
Secretary) are Key Managerial Personnel of the Company.
During the year 2018-19, Mr. Mahendra Pratap singh was appointed as additional director
of the company on 14.08.2018 and regularised as Director of the Company at annual general
meeting held on 25th September 2018.
Mr. Shiv Nandan Sharma, Independent director has resigned from the Board w.e.f. 27th
July, 2019 and has sent resignation letter to the company. He has not provided his
confirmation on material reason required as per amended SEBI (Listing Obligations &
Disclosure Requirements) Regulations.
Number of Meetings of the Board of Directors
The Board met seven times during the financial year 2018-19, the details of the Board
Meeting with regard to their dates and attendance of each director have been provided in
the Corporate Governance Report that forms a part of this Annual Report. The maximum
interval between any two consecutive meetings did not exceeded 120 days.
Board Evaluation
Pursuant to the provisions of the Companies Act, 2013 and SEBI Listing Regulations,
2015, the Board has carried out an annual performance evaluation of its own performance,
and that of its Committees and individual directors. The manner in which such formal
annual evaluation was made by the Board is given below:
• Performance evaluation policy for Board, Committees of the Board and Directors
were approved by the Board at its meeting and the same were placed on the Company's
website www.fcsltd.com.
• The evaluation of all the directors and the Board as a whole was conducted based
on the criteria and framework adopted by the board.
• The report of performance evaluation so arrived at was then noted and discussed
by the Nomination and Remuneration Committee and the Board in their respective meetings.
• Under law, as per the report of performance evaluation, the Board shall
determine, inter alia, whether to continue the term of appointment of the independent
director. During the year under review, there was no occasion to decide on the continuance
of the term of appointment of any of the independent directors and hence, the question of
taking a decision on their re-appointment did not arise.
During the year under review, SEBI vide its circular dated 5th January 2017 came out
with a Guidance Note on Board Evaluation, which was to be adopted by the Company, as
considered appropriate. The performance evaluation criteria for the Board, Committees of
the Board, Chairperson and Directors were accordingly modified by the Board at its
meeting, as approved and recommended by the Nomination and Remuneration Committee. The
updated policy is placed on the Company's website www.fcsltd.com and will be applicable
for evaluation from the year 2018-19.
Audit committee
The details pertaining to the composition of the audit committee are included in the
Corporate Governance Report, which is a part of this report.
Policy on directors' appointment and remuneration and other details
The Company's policy on directors' appointment and remuneration and other matters
provided in Section 178(3) of the Act has been disclosed in the Corporate Governance
Report, which is a part of this report.
The Board of Directors of our Company have reviewed the affairs of all the subsidiary
companies. A statement of holding company's interest in subsidiaries as required under
Section 129 of the Companies Act, 2013, forms part of this annual report.
A Statement containing salient features of the financial statement of subsidiaries is
provided in Form- AOC- 1 as "Annexure A" to this Director's Report. In
accordance with the third proviso of the Section 136(1) of the Companies Act, 2013, the
Annual Report of the Company, containing therein its standalone and consolidated financial
statements have been placed on the website of the Company, www.fcsltd.com
Particulars of Contract or Arrangement with Related Party
During the year, no transaction with related parties was in conflict with the interest
of the Company. All transactions entered into by the Company with related parties during
the financial year were in the Ordinary course of business and on an arm's lenth basis.
The Company did not enter into any transaction with its KMP. As stipulated by section
134(3)(h) of the Act read with rule 8(2) of Companies (Accounts) Rules, 2014, particulars
of related party transactions are given in form no. AOC-2 as "Annexure-B" to
this report. In compliance with Regulation 46(2)(g) of listing regulation policy on
dealing with related party transactions as approved has been hosted on the Company's
website.
Conservation of energy, research and development, technology absorption, foreign
exchange earnings and outgo
The particulars as prescribed under section 134(3)(m) of the Companies Act, 2013, read
with Rule 8(3) of the Companies (Accounts) Rules, 2014, are set out in the "Annexure-
C" to this Board Report.
Subsidiaries and Consolidated Financial Statements
FCS has Two Wholly Owned Subsidiary Companies outside India, viz. F.C.S Software Middle
East FZE in UAE and FCS Software Solutions GmbH, in Germany. FCS has five Wholly Owned
Subsidiary Companies in India i.e. Insync Business Solutions Limited, Innova E Services
Private Limited, Stablesecure Infraservices Private Limited, cGain Analytics Private
Limited, and Zero Time Constructions Private Limited.
M/s. Enstaserv Eservices Limited is the associate company of FCS Software Solutions
Limited. Investment in M/s Myzeal IT Solutions Ltd was transferred during the financial
year 2018-19.
The consolidated Financial Statements of the Company and its subsidiaries, prepared in
accordance with Indian Accounting Standards notified under the Companies (Indian
Accounting Statndards) Rules, 2015 (Ind AS) forms part of the Annual Report and are
reflected in consolidated financial statement of the
Particulars of Loan, Guarantees or Investments
In Compliance with the provisions of Section 134(3)(g) forming part of this Annual
Report particulars of loans, Guarantees and Investment covered under the provisions of
section 186 of Companies Act, 2013 are provided in the notes to the Financial Statement.
Public Deposits
The Company has not accepted any public deposits during the year under Section 73 of
the Companies Act, 2013, read with Companies (Acceptance of Deposits) Rules, 2014, and as
such, no amount on account of principal or interest was outstanding as on the date of
Balance Sheet.The Company has not made any loans/advances and investment in its associates
during the year.
Particulars of employee's remuneration
During the year ended March 31, 2019, no employee is drawing remuneration in excess of
the amount prescribed under section 197(12) of the Companies Act, 2013, read with Rule 5
of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.
Directors' responsibility statement
To the Members,
We, the directors of FCS Software Solutions Limited, pursuant to the provisions of
section 134(3)(c) of the Companies Act, 2013, confirm the following:
1. that in the preparation of the annual accounts for the Financial Year ended 31st
March 2019, the applicable accounting standards had been followed along with proper
explanation relating to material departures;
2. that the directors had selected such accounting policies and applied them
consistently and made judgments and estimates that are reasonable and prudent so as to
give a true and fair view of the state of affairs of the Company at the end of the
financial year and of the profit of the Company for that period;
3. that the directors had taken proper and sufficient care for the maintenance of
adequate accounting records in accordance with the provisions of the Companies Act, 2013
for safeguarding the assets of the Company and for preventing and detecting fraud and
other irregularities;
4. that the directors had prepared the annual accounts on a going concern basis.
5. that the Board of Directors had laid down internal financial controls to be followed
by the Company and that such internal financial controls are adequate and operating
effectively.
6. that the Board of Directors had devised proper systems to ensure compliance with the
provisions of all applicable laws and that such systems were adequate and operating
effectively.
Internal Financial Control
The Board has adopted policies and procedures for ensuring the orderly and efficient
conduct of its business, including adherence to the Company's policies, the safeguarding
of its assests, the prevention and detection of fraud, error reporting mechanisms, the
accuracy and completeness of the accounting records, the timely preparation of reliable
disclosures.
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 external consultants, including audit of internal financial
controls over financial reporting by the statutory 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 Financial Year 2018-19.
The extract of Annual Return
Extract of Annual Return of the Company in the prescribed Form MGT-9, is placed on the
Company's website www.fcsltd.com.
Ensuring Compliance of laws
The company has devised and set in place proper systems to ensure compliance of all
laws applicable to the company.
Transfer to Investor Education and Protection fund
Pursuant to Section 125 and other applicable provisions, if any, of the Companies Act,
2013, all unclaimed/ unpaid dividend, application money, remaining unclaimed/unpaid for a
period of seven years from the date they became due for payment, in relation to the
Company, have been transferred to the Investor Education and Protection fund (IEPF)
established by the Central Government. During the year Company was not required to
transfer any amount in the IEPF Account.
Board Committee
The Company has the following committees of the Board:
1. Audit Committee
2. Nomination and Remunaration Committee
3. Stakeholders Relationship Committee
4. Corporate Social Responsibility Committee
Composition of Audit Committee
Details of Audit Committee of Board of Directors of the Company forms part of the
Annual Report and is given separately in Report of Corporate Governance.
Management Discussion and Analysis
The report on Management Discussion and Analysis Report as required under Schedule V of
the SEBI(Listing Obligations and Disclosure Requirements) Regulation, 2015 read with
Regulation-34(3) (c) is annexed and form part of Annual Report.
Details of significant and material orders passed by the regulators or courts or
tribunals impacting the going concern status and Company's operations in future
During the year, no significant and material orders were passed by the regulators or
courts or tribunals impacting the going concern status and Company's operation in future.
Policy on Sexual Harassment
FCS has adopted a policy on prevention, prohibition and redressal for employees on
sexual harassment at workplace as per The Sexual Harassment of Women at Workplace
(Prevention, Prohibition and Redressal) Act, 2013.
During the financial year 2018-19 there were no cases filed pursuant to the Sexual
Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013
Vigil Mechanism/Whistle Blower Policy
In Compliance with the provisions of Section-177(9) of the Companies Act, 2013 read
with Rule-7 of Companies (Meeting of Board and its Powers) Rules, 2014 and Regualtion 22
of SEBI(Listing Obligations and Disclosure Requirements) Regulation, 2015, the Company has
a vigil mechanism through Whistle Blower Policy to deal with instances of fraud and
mismanagement, if any. The details of the policy is explained in the Corporate Governance
Report and is also placed on the website of the Company.
Corporate Social Responsibity (CSR)
CSR is a means to balance economic, social and environmental objectives, it is a
responsible way of doing business.
In terms of provisions of section 135 of the Companies Act, 2013 & Rule 9 of
Companies (Corporate Social Responsibility) Rule, 2014 and other clarification issued by
Ministry of Corporate Affairs, the Company has qualified the norms specified under section
135 of Companies Act, 2013 to contribute towards CSR. The company has contributed Rs.
3,00,000/- this year for corporate social responsibility in accordance with Schedule VII.
Annual Report on CSR is Annexed as "Annexure-D" of the Director's Report.
Statement of Disclosure of Remuneration under Section 197 of Companies Act, 2013 and
Rule 5(1) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014
Disclosures pertaining to remuneration and other details as required under Section
197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and
Remuneration of Managerial Personnel) Rules, 2014, is annexed herewith as
"Annexure-E".
Corporate Governance
As stipulated by Regulation 34(3) read with Schedule V (c) of listing regulations,
Corporate Governance Report forms part of this Annual Report.
Certificate confirming compliance of the conditions of Corporate Governance, is
provided as "Annexure F" to this Director's Report.
Consolidated Financial Statements
The Consolidated Financial Statements of the Company has been prepared in accordance
with applicable Accounting Standards forms a part of this Annual Report.
Company's policy relating to directors appointment, payment or remuneration and
discharge of their duties
The provisions of Section 178(1) relating to constitution of Nomination and
Remuneration Committee are applicable to the Company and hence the Company has adopted a
policy relating to appointment of Directors, payment of Managerial remuneration, Directors
qualifications, positive attributes, independence of Directors and other related matters
as provided under Section 178(3) of the Companies Act, 2013.
Scheme of Amalgamation with wholly owned subsidiaries
In order to gain operational synergy and efficient allocation of managerial
capabilities and infrastructure and consolidation and economies of scale by expansion and
diversion to exploit extended domestic and global markets, FCS Software Solutions Limited
(hereinafter referred to as "FCS") has filed application to Regional Director,
Delhi for amalgamation with its Wholly owned subsidiaries i.e. Insync Business Solutions
Limited, Stablesecure Infraservices Private Limited, cGain Analytics Private Limited,
Innova e Services Private Limited and Zero Time Constructions Private Limited. The Scheme
of Amalgamation has been filed in Regional Director, Delhi for final approval and same is
pending before the authority.
AUDITORS
Statutory Auditors
M/s. Aadit Sanyam & Co., Chartered Accountant, is the existing statutory auditor of
the Company were appointed at 24th Annual General Meeting held on 28th September, 2017 to
hold the office our 29th Annual General Meeting for a period of 5 years.
The Audit Report on the Financial Statements of the Company for the financial year
ended March 31, 2019 read with relevant Notes thereon are self-explanatory and do not call
for any further explanation. The Auditors Report does not contain any qualification,
reservation or adverse remark.
During the year under review, the Statutory Auditors have not reported any matter under
Section 143(12) of the Act, and therefore no details are required to be disclosed under
Section 134 (3)(ca) of the Act.
Secretarial Auditor
The Board of Directors of the Company has appointed M/s. VS Associates, Practising
Company Secretaries, to conduct Secretarial Audit for the F.Y. 2018-19. The Secretarial
Audit Report of M/s. VS Associates, Practising Company Secretaries for the financial year
ended 31st March, 2019, is annexed herewith as "Annexure-G".
The Secretarial Audit Report does not contain any qualification, reservation or adverse
remark.
Internal Auditor
The Board of Directors of the Company has appointed M/s. SPMG & Company, Chartered
Accountants as an internal auditor of the Company for financial year 2018-19.
Listing Fees
The Equity Shares of the Company are listed on the BSE Limited (BSE) with scrip code
No. 532666 and on National Stock Exchange of India Limited (NSE) with scrip code of
FCSSOFT. The Company confirms that the annual listing fees to both the stock exchanges for
the financial year 2018-19 have been paid.
Certificate of Non- Disqualification of Directors
The Certificate required as per Regulation 34(3) and Schedule Obligations and
Disclosure Requirements) Regulations, 2015 forming part of annual report is Annexed as
"Annexure-H".
The Board of Directors of the Company has appointed M/s. Oberoi & Associates,
Practising Company Secretaries, certificateof Non- disqualification from professional for
the F.Y. 2018-19. The to provide certificate of directors of M/s. Oberoi & Associates,
Practising Company Secretaries for the financial year ended 31st March, 2019, is annexed
herewith
Acknowledgement
The Directors thank the Company's employees, customers, vendors, investors, service
providers, bankers for their continued support. The Directors also convey a special thanks
to the Government of India, particularly Ministry of Communication and Information
Technology, the Customs and Excise departments, the Income Tax department, Ministry of
Corporate Affairs, Office of Registrar of Companies, New Delhi, Board of approval and
Development Commissioner of Special Economic Zones, particularly of Noida and Chandigarh
for their co-operation.
|
For and on behalf of the Board of Directors |
|
For FCS Software Solutions Limited |
| Place: Noida |
sd/- |
| Date: 14/10/2019 |
Dalip Kumar |
|
(Chairman & Managing Director) |