| Dear Members,
The Directors are pleased to present the report on the business and
operations of your Company along with the audited accounts for the
financial year ended March 31, 2015.
A. Results of operation
Particulars 31-03-2015 31-03-2014
(Rs.) (Rs.)
Consolidated
Revenue from operation and other income 1,128,942,752 1,212,269,770
Earnings before Depreciation and 13,510,881 1,768,170
amortization
Depreciation and amortization 31,854,421 23,375,585
Profit before Exceptional items (18,343,540) (21,607,415)
Exceptional Items
Provision for diminution in value of - -
Investment
Bad debts (write-off of loan) - (3,561,232)
Provision for impairment of goodwill on - (50,000,000)
Consolidation
Profit / (Loss) on sale of investment in (27,577,367) -
Subsidiary
Profit Before Tax (45,920,907) (75,168,647)
Less : Provision for Taxation (171,406) 3,467,414
Profit After Tax (45,749,501) (78,636,061)
Particulars 31-03-2015 31-03-2014
(Rs.) (Rs.)
Standalone
Revenue from operation and other income 109,780,464 130,654,883
Earnings before Depreciation and 9,781,266 12,965,876
amortization
Depreciation and amortization 10,889,258 10,785,788
Profit before Exceptional items (1,107,992) 2,180,088
Exceptional Items
Provision for diminution in value of - (50,000,000)
Investment
Bad debts (write-off of loan) - (3,561,232)
Provision for impairment of goodwill on - (50,000,000)
Consolidation
Profit / (Loss) on sale of investment in - -
Subsidiary
Profit Before Tax (1,107,992) (51,381,144)
Less : Provision for Taxation (171,406) 680,282
Profit After Tax (936,586) (52,061,426)
During the financial year 2014-15, no amount has been transferred to
the reserves.
B. Dividend
As the Company has suffered losses, your Directors have decided not to
declare any dividend for the financial year 2014-15.
C. Disposal of step down subsidiaries
The economic slowdown and the tightening of the immigration laws and
hiring procedures have had an adverse effect on the operations of the
Company's step down subsidiaries namely Dice Technologies Inc., USA and
Dicetek LLC., Dubai. This has also adversely impacted the financial
viability of the step down subsidiaries. In view of this, Dicetek
(Sing) Pte Limited, Singapore, has disposed of investment in the shares
held by it in Dice Technologies Inc., USA. Accordingly, Dice
Technologies Inc., USA has ceased to be a subsidiary of the Company.
Dicetek (Sing) Pte Limited, Singapore has also taken steps to dispose
of its investment in Dicetek LLC., Dubai.
D. Management Discussion and Analysis report
E. Directors and Key Managerial Personnel
Mr. Srikanth Ramanathan was re-appointed as Managing Director of the
Company for a period of 1 year with effect from February 6, 2014.
Accordingly, his term as Managing Director ended on February 5, 2015.
The Board of Directors of the Company based on the recommendation of
the Nomination & Remuneration committee have re-appointed Mr. Srikanth
Ramanathan as Managing Director for a period of one year with effect
from February 6, 2015. Mr. Srikanth Ramanathan has expressed his
desire to not draw any remuneration from the company and accordingly,
he is not being paid any remuneration w.e.f. January 1, 2012. The
Board of Directors recommend the re-appointment of Mr. Srikanth
Ramanathan as Managing Director for a period of 1 year with effect from
February 6, 2015. Mr. Srikanth Ramanathan, Managing Director retires by
rotation in accordance with the provisions of the Companies Act, 2013
and being eligible, offers himself for re-appointment.
During the year, Mr. S. Ramakrishnan has resigned as Director with
effect from April 9, 2014. Further, Mr. S. Arun Kumar, Chief Financial
Officer and Company Secretary has also resigned with effect from April
9, 2014. The Company is on the lookout for suitable persons for the
positions of Chief Financial Officer and Company Secretary.
During the year under review, the members of the Company approved the
appointment of Mr. K. Balaji, Mr. K. S. Vaidyanathan and Mr. V.
Ganapathi Subramanian, as Independent Directors who are not liable to
retire by rotation. With the appointment of Independent Directors, the
conditions specified in the Companies Act 2013 and the Rules made
thereunder as also under revised Clause 49 of the Listing Agreement
stand complied.
Mrs. Kamakshi Shankararaman was appointed as an Additional Director by
the Board with effect from July 10, 2015. Pursuant to the provisions of
Section 161 of the Companies Act, 2013, Mrs. Kamakshi Shankararaman
will hold office up to the date of the ensuing Annual General Meeting.
The Company has received notice in writing under the provisions of
Section 160 of the Companies Act, 2013, from a member along with
requisite deposit proposing the candidature of Mrs. Kamakshi
Shankararaman for the office of Independent Director, to be appointed
as such under the provisions of Section 149 of the Companies Act, 2013.
In the opinion of the Board of Directors, Mrs. Kamakshi Shankararaman,
the Independent Director proposed to be appointed, fulfils the
conditions specified in the Companies Act 2013 and the Rules made
thereunder and she is independent of the Management.
The Board has based on the recommendation of the Nomination and
Remuneration Committee and subject to approval of the shareholders,
appointed Mrs. Kamakshi Shankararaman as Independent Director with
effect from July 10, 2015, for a term up to July 09, 2020, and whose
office shall not be liable to retire by rotation.
The Independent Directors have submitted the declaration of
independence, as required under Section 149 of the Companies Act 2013
and Clause 49 of the listing agreement, declaring that they meet the
criteria of independence.
The information to shareholders as per Clause 49 of the Listing
agreement pertaining to the Director / Managing Director seeking
appointment / re-appointment, are being provided in the Notice of the
Annual General Meeting which forms part of this Annual Report.
The Board has, on the recommendation of the Nomination & Remuneration
Committee framed a policy for selection and appointment of Directors
and their remuneration. The policy for selection and appointment of
Directors and their remuneration is stated in the Report on Corporate
Governance.
The manner in which formal evaluation has been made by the Board of its
own performance and that of its committees and individual directors is
given in the Report on Corporate Governance.
The Company has devised a formal familiarization programme for its
Independent Directors, the details of which are provided in the Report
on Corporate Governance.
F. Meetings of the Board and Audit Committee
During the year under review, five meetings of the Board of Directors
and four meetings of the Audit Committee were held. For further
details, please refer the report on Corporate Governance. The
intervening gap between the meetings was within the period prescribed
under the Companies Act, 2013.
G. Auditors
I. Statutory Auditor
Mr. S. Ramanath, Chartered Accountant, Coimbatore (Membership number
29416) was re-appointed as the statutory auditor of the Company at the
last Annual General Meeting for a period of 3 years to hold office till
the conclusion of the 23rd Annual General Meeting of the Company to be
held in the year 2017 (subject to ratification of his appointment at
every Annual General Meeting).
As per the provisions of Section 139 of the Companies Act, 2013 and the
rules framed there under, the appointment of Mr. S. Ramanath as Auditor
of the Company till the conclusion of the 23rd Annual General Meeting
of the Company to be held in the year 2017 is subject to ratification
of his appointment at every Annual General Meeting. Your Directors
recommend the ratification of appointment of Mr. S. Ramanath as Auditor
of the Company.
The Company has received confirmation from Mr. S. Ramanath to the
effect that his appointment is within the prescribed limits under
Section 141(3)(g) of the Companies Act, 2013 and that he is not
disqualified for re-appointment.
The Auditors' Report does not contain any qualification, reservation or
adverse remark.
II. Internal Auditor
As per Section 138 of the Companies Act, 2013 read with Rule 13 of the
Companies (Accounts) Rules, 2014, Ms. M.S. Indira, Chartered
Accountant, Chennai (Membership No. 230544) was appointed as an
Internal Auditor of the Company for financial year 2014-15.
III. Secretarial Auditor
The Board has appointed M/s. Aashish Kumar Jain & Associates,
Practising Company Secretaries, Chennai, to conduct Secretarial Audit
of the Company for the financial year 2014-15. The Report of the
Secretarial Audit is annexed herewith as "Annexure - 1". The
Secretarial Audit Report does not contain any qualification,
reservation or adverse remark.
H. Directors' Responsibility Statement
To the best of our knowledge and belief and according to the
information and explanations obtained by us, your Directors make the
following statements in terms of Section 134(3)(c) of the Companies
Act, 2013:
a. that in the preparation of the annual financial statements for the
year ended March 31, 2015, the applicable accounting standards have
been followed along with proper explanation relating to material
departures, if any;
b. the directors had selected such accounting policies and applied
them consistently and made judgements 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 March 31, 2015 and of the Loss of the Company for
the year ended on that date;
c. that proper and sufficient care has been taken 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;
d. that the annual financial statements have been prepared on a going
concern basis;
e. that proper internal financial controls were in place and that the
financial controls were adequate and were operating effectively.
f. that systems to ensure compliance with the provisions of all
applicable laws were in place and were adequate and operating
effectively.
I. Subsidiary
As at March 31, 2015, your Company has 2 subsidiaries namely, Dicetek
(Sing) Pte Limited, Singapore and Dicetek LLC., Dubai. Both these
subsidiaries are engaged in the business of providing IT Services and
Consulting.
During the year, M/s. Dicetek (Sing) Pte Limited, Singapore has
completed the sale of its investment in M/s. Dicetek
Technologies Inc., USA. Consequent to this, M/s. Dicetek Technologies
Inc., USA has ceased to be a step down subsidiary of the Company.
As required under the Listing Agreements entered into with the Stock
Exchanges and Section 129(3) of the Companies Act 2013, the Company has
prepared the consolidated financial statement of the Company and all
its subsidiaries, which forms part of this Annual Report. The
consolidated financial statements have been prepared in accordance with
the relevant accounting standards as prescribed under Section 133 of
the Companies Act, 2013.
A statement containing the salient features of the financial statement
of the subsidiaries in the prescribed format AOC-1 is attached to the
standalone financial statements of the Company. The statement also
provides the details of performance, financial positions of each of the
subsidiaries. In accordance with Section 136 of the Companies Act,
2013, the 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 the Company's
website www.aurumsoftsystem.com. These documents will also be available
for inspection during business hours at the registered office of the
Company.
J. Corporate Governance
In terms of Clause 49 of the Listing Agreement with the stock
exchanges, a Report on Corporate Governance is made part of this Annual
report.
A certificate from a practicing Company Secretary regarding compliance
of the conditions stipulated for Corporate Governance under Clause 49
of the Listing Agreement is attached to this report.
The declaration by the Managing Director addressed to the members of
the Company pursuant to Clause 49 of the Listing Agreement regarding
adherence to the Code of Conduct by the Members of the Board and by the
Members of the Senior Management Personnel of the Company is also
attached to this Report.
K. Risk Management
The Company views risk management as a continuous process which is the
principal driver for effective Corporate Governance and for enhancement
of value to the shareholders.
During the year, the Board has formed a Risk Management Committee to
oversee and manage the Risk Management and mitigation frame work. The
Risk Management Committee comprises of Mr. K. Balaji, Chairman and Mr.
Srikanth Ramanathan, Managing Director. The detailed terms of reference
of the Risk Management Committee is provided in the report on Corporate
Governance.
The Company has framed a policy on Risk Management and the same has
been posted on the Company's website and is available on the following
link:
http://www.aurumsoftsystems.com/cp/pdf/031020141412323532Risk%20Mgt%
20Policy%20-%20Aurum%20website-October%202014.pdf
L. Related Party Transaction
All related party transactions that were entered into during the
financial year were on an arm's length basis and were in the ordinary
course of business. During the year, the Company had not entered into
any related party transaction which could be considered material in
accordance with the policy of the Company on Related Party
Transactions.
The policy on Related Party Transactions as approved by the Board is
uploaded on the Company's website and the same is available on the
following link:
http://www.aurumsoftsystems.com/cp/pdf/031020141412337111Related%
20party%20transactions%20policy.pdf
The particulars of transactions between the Company and its related
parties, is set out in Note 23 of Notes to the standalone financial
statements.
M. Corporate Social Responsibility
The requirement on Corporate Social Responsibility as provided in
Section 135 of the Companies Act, 2013 is not applicable to your
Company.
N. Whistle Blower Mechanism
Your Company has adopted a Whistle Blower Policy so that the employees
of the Company have a secure mechanism to report any concerns that they
may have of actual, suspected or planned wrongdoings to the Chairman of
the Board and Chairman of the Audit Committee. The whistle blower
policy is available on the Company's website in the following link:
http://www.aurumsoftsystems.com/cp/
pdf/021020141412254893whistle%20blower%20policy.pdf
O. Conservation of Energy, Technology Absorption and Research &
Development
Your Company's power requirements are very minimal. Your Company
however takes every possible step to make optimum utilization of energy
and avoid unnecessary wastage of power.
Your Company keeps itself updated with the latest technology available
in the market. Your Company constantly strives to enhance
state-of-the-art development standards to meet the ever growing
challenges of the corporate world. Your company aims at providing
future-proof and future adaptable technologies to all its clients.
P. Extract of Annual Return
Extract of the Annual Return of the Company is annexed herewith as
"Annexure - 2" to this Report.
Q. Foreign Exchange Earnings and Outgo
During the financial year 2014-15, the total foreign exchange earnings
on account of Interest on Loan to the Company's wholly owned foreign
subsidiary was Rs. 15.11 lakhs. There was no expenditure incurred by
the Company in foreign currency during financial year 2014-15.
R. Deposits
During the year, your Company has not accepted any deposits from the
public.
S. Particulars of Employees and related disclosures
During the financial year 2014-15, no employee of the Company has drawn
remuneration in excess of the limits specified under Rule 5(2) of the
Companies (Appointment and Remuneration of Managerial Personnel) Rules,
2014, that requires disclosure under Rules 5(2) and 5(3) of the
Companies (Appointment and Remuneration of Managerial Personnel) Rules,
2014.
The 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 are given below:
i. The ratio of the remuneration of each director to the median
remuneration of the employees of the company for the financial year
No remuneration has been paid to any of the Directors of the Company.
The sitting fees paid to the Directors is not treated as remuneration.
The median remunerate on of the employees of the Company during the
financial year 2014-15 is Rs. 142,200.
ii. The percentage increase in remuneration of each director, Chief
Financial Officer, Chief Executive Officer, Company Secretary or
Manager, if any, in the financial year
There is no increase in remuneration of Key Managerial Personnel.
iii. The percentage increase in the median remuneration of employees in
the financial year
The percentage increase in the median remuneration of the employees
during the financial year 2014-15 is 12.85%.
iv. The number of permanent employees on the rolls of company
The number of permanent employees on the rolls of the Company as on
31st March 2015 is 618.
v. The explanation on the relationship between average increase in
remuneration and company performance
The Company's Loss after Tax for the Financial Year 2014-15 was Rs.
9.37 lakhs compared to a Profit after Tax (excluding exceptional items)
of Rs. 15 lakhs (i.e. a decrease of 164.87%). The average increase in
remuneration of the employees (excluding Key Managerial Personnel)
during the financial year 2014-15 is 10.82%. The increase in
remuneration is in line with the remuneration policy of the Company.
vi. Comparison of the remuneration of the Key Managerial Personnel
against the performance of the company
No remuneration is paid to the Managing Director of the Company. The
Company does not have any other Key Managerial Personnel.
vii. Variations in the market capitalisation of the company, price
earnings ratio as at the closing date of the current financial year and
previous financial year and percentage increase over decrease in the
market quotations of the shares of the company in comparison to the
rate at which the company came out with the last public offer in case
of listed companies, and in case of unlisted companies, the variations
in the net worth of the company as at the close of the current
financial year and previous financial year
Issued Closing Market
Particulars Capital Market EPS (Rs.) PE ratio Capital
(Shares) Price per -isation
share (Rs> (Rs. in
Crores
As on 31st 65,100,000 9.00 (0.80) N.A 58.59
March 2014
As on 31st 65,100,000 1.60 (0.01) N.A 10.42
March 2015
Increase /
(Decrease) - (7.40) 0.79 (48.17)
% Increase /
(Decrease) - (82.22%) 98.75% (82.22%)
Issue Price of
the share at the - 2.00
last Public
Offer (IPO)
(Decrease) in
market price
as on 31st
March 2015 as - (0.40)
compared to Issue
Price at IPO
% (Decrease) in
market price - (20.00%)
viii. Average percentile increase already made in the salaries of
employees other than the managerial personnel in the last financial
year and its comparison with the percentile increase in the managerial
remuneration and justification thereof and point out if there are any
exceptional circumstances for increase in the managerial remuneration
Average increase in remunerate on of employees other than Key
Managerial Personnel is 10.82%. No remuneration is paid to the
Managing Director of the Company. The Company does not have any other
Key Managerial Personnel.
ix. Comparison of the each remuneration of the Key Managerial
Personnel against the performance of the company
No remuneration is paid to the Managing Director of the Company. The
Company does not have any other Key Managerial Personnel.
x. The key parameters for any variable component of remuneration
availed by the directors
No remuneration has been paid to any of the Directors of the Company.
The sitting fees paid to the directors is not treated as remuneration.
xi. The ratio of the remuneration of the highest paid director to that
of the employees who are not directors but receive remuneration in
excess of the highest paid director during the year
Not Applicable
xii. Affirmation that the remuneration is as per the remuneration
policy of the company
The remuneration is as per the remuneration policy of the Company
T. Other Disclosures
No significant or material orders were passed by the Regulators or
Courts or Tribunals which impact the going concern status and Company's
operations in future.
During the year under review, no Compliant was received by the Company
pursuant to the Sexual Harassment of Women at Workplace (Prevention,
Prohibition and Redressal) Act, 2013.
The details of Loans given and Investments made by the Company, in its
subsidiary are given in Note 30 and 9 respectively in notes forming
part of the standalone financial statements. Apart from this, the
Company has not given any Loan or Guarantee or made any investments
covered under the Provisions of Section 186 of the Companies Act, 2013.
U. Appreciation
Your Directors wish to place on record their appreciation to all
shareholders, customers, suppliers and bankers for their co-operation
and support extended to the Company.
Your Directors also place on record their appreciation of the efforts
and contribution during 2014-15 of the Company's employees.
For and on behalf of the Board of Directors
K. Balaji
Chennai, July 10, 2015 Chairman |