DIRECTORS' REPORT Dear Shareholders, Your Directors have pleasure to present the 25th Annual Report and the Audited Accounts for the financial year ended 31st March, 2015. 2. Review of Operations During the year under review, your Company registered a gross revenue of Rs. 4,948.08 Lakhs (previous year Rs. 4,679.24 Lakhs) and a Profit Before Tax of Rs. 802.09 Lakhs (previous year Rs. 1,244.04 Lakhs). The highlight for the year was the conclusion of a multi-year, multi-country, global price agreement with one of the largest communications solutions providers of the world. This opens new opportunities for our solution across all worldwide locations of this Fortune 500 enterprise. We also maintained market leadership in South Asia for our UniServe™ solutions. Our increased sales investments in Europe and both the Americas, while affecting our margins for the current year, have been instrumental in building a strong sales pipeline for the forthcoming period. We now have customers in all the four continents and are actively exploring new opportunities jointly with large SIs and local partners. 3. Future Outlook Digital Transformation across large enterprises is a global phenomenon now. Our UniServe™ platform, in the past year, has successfully proven its capability as an accelerator to this transformation process. Additionally, with the aforementioned global price agreement in place now, we will endeavor to reach out to all global locations of the enterprise and conclude new opportunities. In the forthcoming year we are also launching our cloud platform to pursue new revenue opportunities in the large SMB segment in India. Long sales cycles are inherent to enterprise-scale solutions and with our limited sales network in the past, we haven't been successful in building a pipeline robust enough to deliver substantial quarter on quarter numbers. We are in the process of correcting this anomaly by buttressing our global sales teams who are already in the process of building a strong sales pipeline. This, along with the assured periodic annuity from our existing engagements, we believe, will allow us to deliver consistently over a quarterly basis, within the next couple of years. Furthermore, our pursuit of global opportunity should also improve proitability as our margin realization has been superior on our export earnings. The Government is a large purchaser of technology solutions and we are also focused on opportunities in this sector. 4. Change in the nature of business During the year the company has not changed its business. 5. Dividend In order to conserve its financial resources to meet its growth plan, your Board could not recommend any dividend for the year under review. 6. Reserves The Company has not proposed for transfer any amount to Reserves during the financial year and proposes to retain Rs. 244,700,331/- in the Profit and Loss Account. 7. Finance Cash and cash equivalents as at March 31st 2015 were Rs. 234,108,666/-. The company continues to focus on judicious management of its working capital, receivables, and inventories. Other working capital parameters were kept under strict check through continuous monitoring. 8. Share Capital During the year, there was no a. Issue of shares with differential rights; b. Issue of sweat equity shares; c. Provision of money by company for purchase of its own shares by employees or trustees for the beneit of employees However, Your Company has issued Employee Stock Options and the details are enclosed in Annexure - VII. 9. Directors and Key Managerial Personnel In accordance with the Companies Act, 2013 and the Articles of Association of the Company, Mr. V. S. Mallick and Mr. K. S. Shanker Rao retire by rotation and being eligible, offer themselves for reappointment. Mr. Navajyoth Puttaparthi has been appointed as the Company Secretary with effect from 24th October, 2014. 10. Meetings During the year 4 (Four) Board Meetings and 4 (Four) Audit Committee Meetings were convened and held. The details are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013. A calendar of meetings is prepared and circulated in advance to all the Directors. 11. Board Evaluation Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board has carried out an annual performance evaluation of its own performance, the directors individually as well as the evaluation of the working of its Audit, Nomination & Remuneration and Compliance Committees. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report. 12. Declaration by an Independent Director(s) and re- appointment, if any The Independent Director(s) have submitted the declaration of independence pursuant to Section 149(7) of the Act stating that he/she meets the criteria of independence as provided in sub-section (6) of Section 149 of the Companies Act, 2013. 13. Remuneration Policy The Board has, on the recommendation of the Nomination & Remuneration Committee, framed a policy for appointment and remuneration of Directors, Key Managerial Personnel and other employees including criteria for determining qualifications, positive attributes and director's independence. The Remuneration Policy is stated in the Corporate Governance Report. 14. Details of Subsidiary/Joint Ventures/Associate Companies Pursuant to sub-section (3) of Section 129 of the Act, the statement containing the salient feature of the financial statement of a company's subsidiary or subsidiaries, associate company or companies and joint venture or ventures is given as Annexure - IV [Performance and financial position of each of the subsidiaries, associates and joint venture companies included in the consolidated financial statement]. The Company has three Wholly Owned Subsidiary Company (WOS): (1) "Intense Technologies FZE" in Hamriyah Free Zone, Hamriyah, United Arab Emirates (UAE). (2) "Intense Technologies INC" in Florida, United States of America (USA). (3) Intense Technologies UK Limited in 200 Brook Drive, Green Park, Reading RG2 6UB, United Kingdom (UK). The Company has one Branch: Intense Technologies Ltd in 9, Temasek Boulevard, # 19-05, Suntec Tower Two, Singapore - 038989. There were no commercial operations in Intense Technologies INC and Intense Technologies UK Limited during the inancial year 2014-15. Further, the Annual Accounts and related documents of the subsidiary company shall be kept open for inspection at the Registered & Corporate Office of the Company. The Company will also make available copy thereof upon specific request by any Member of the Company interested in obtaining the same. Further, pursuant to Accounting Standard AS-21 issued by the Institute of Chartered Accountants of India, Consolidated Financial Statements presented by the Company in this Annual Report include the financial information of its subsidiary. 15. Statutory Auditors M/s Srinivas P & Associates, Chartered Accountants, Independent Auditors of the Company were appointed in the last Annual General meeting for a period of three years till conclusion of Twenty Seventh Annual General Meeting. The resolution relating to ratification of the appointment is put to ratification by members in the ensuing Annual General Meeting. 16. Auditors' Report The Auditors' Report does not contain any qualification. Notes to Accounts and Auditors remarks in their report are self-explanatory and do not call for any further comments. 17. Disclosure about Cost Audit As per the Cost Audit Orders, Cost Audit is not applicable to the Company for the Financial Year 2014-15. 18. Secretarial Audit Report A Secretarial Audit Report given by M/s Puttaparthi Jagannatham and Co., Company Secretaries, is annexed with the report. The delays in ROC filings were due to non availability of the signatory and objectives were however met. The self explanatory statement on CSR expenditure and Secretarial Audit has been mentioned at the relevant paras. The report is self-explanatory and do not call for any further comments and is enclosed as Annexure - V. 19. Internal Audit Controls and their adequacy The Company has an internal control system, commensurate with the size scale and complexity of its operations. The scope and authority of the Internal Audit Function is defined in the Internal Audit Manual. To maintain its objectivity and independence the Internal Audit function reports to the Chairman of the audit committee of the Board and to the Chairman and Managing Director. The internal Audit department monitors and evaluate the efficiency and adequacy of the internal control system in the Company, its compliance with operating systems, accounting procedures and policies at all locations of the Company. Based on the report of internal audit functions, process owner undertake corrective actions in their respective areas and thereby strengthen the controls. Significant audit observations and recommendations along with corrective actions thereon are presented to the audit committee of the Board. 20. Adequacy of internal financial controls with reference to the financial statements The company has internal Auditors and the Audit Committee constituted are in place to take care of the same. During the year, the Company continued to implement their suggestions and recommendations to improve the control environment. Their scope of work includes review of processes for safeguarding the assets of the Company, review of operational efficiency, effectiveness of systems and processes, and assessing the internal control strengths in all areas. Internal Auditors indings are discussed with the process owners and suitable corrective actions taken as per the directions of Audit Committee on an ongoing basis to improve eiciency in operations. 21. Issue of employee stock options Employees Stock Option Plan As required by Clause 12 of SEBI (Employee Stock Options Scheme and Employees Stock Purchase Scheme) Guidelines 1999, the disclosures of the Employees Stock Option Plan 2005, Stock Option Plan A 2007, Stock Option Plan A 2009 and Stock Option Plan B 2009 which are in force are given in Annexure - VII. 22. Whistle Blower Policy Pursuant to the provisions of section 177(9) & (10) of the Companies Act, 2013, a Whistle Blower Policy for directors and employees to report genuine concerns has been established. The Whistle Blower Policy has been uploaded on the website of the Company at www.in10stech.com 23. Risk Management And Insurance The Company has established Risk Management Process to manage risks with the objective of maximizing shareholders value. All the properties of your Company have been adequately insured. Your Company continuously monitors business and operational risk through business process, re-engineering and reviewing areas such as production, inance, legal and other issues. An exhaustive exercise is underway to bring a model regulating risk management mechanism. Your Company's assets are adequately insured against the risk from fire and earthquake. 24. Extract of Annual Return As required pursuant to Section 92(3) of the Companies Act, 2013 and Rule 12(1) of the Companies (Management and Administration) Rules, 2014, an extract of annual return is annexed as Annexure - I. 25. Material changes and commitments No material changes and commitments have occurred after the close of the year till the date of this Report, which affect the financial position of the company. 26. 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 No such orders were passed against the Company. 27. Deposits The company has not accepted any ixed deposits from the public. 28. Particulars of loans, guarantees or investments under Section 186 (i) Details of Loans: No Loans were made during the Financial Year 2014 -15. (ii) Details of Investments: The details of the Investments in equity shares in other listed entities aggregating to Rs. 37,343/- of the Company are given in Notes to the Financial Statements 29. Particulars of contracts or arrangements with related parties As a matter of policy, your Company carries out transactions with related parties on an arms' length basis. There are no materially significant related party transactions made by the company with Promoters, Key Managerial Personnel or other designated persons which may have potential conflict with interest of the company at large. Statement of these transactions is given in other explanatory information attached in compliance of Accounting Standard No. AS-18. 30. Corporate Governance Certificate The Compliance certificate from the auditors regarding compliance of conditions of Corporate Governance as stipulated in Clause 49 of the Listing Agreement shall be annexed with the report. 31. Management Discussion and Analysis A report on Management Discussion & Analysis for the year under review, as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges in India, is provided in a separate section forming part of this Annual Report and is enclosed as Annexure - VI. 32.Statutory Disclosures In terms of the provisions of the Companies Act, 2013 and other applicable regulations read with the Companies (Particulars of Employees) Rules, 1975 as amended, the names and other particulars of the employees are set out in the annexure to the Directors' Report. However, as per the provisions of the said Act read with Clause 32 of the Listing Agreement, the Annual Report excluding the aforesaid information is being sent to all the members of the Company and others entitled thereto. Any member interested in obtaining such particulars may write to the Company at the registered office of the Company. 33. Obligation of Company under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 In order to prevent Sexual Harassment of Women at Workplace a new act "The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013" has been notified on 9th December, 2013. Under the said Act every Company is required to set up an Internal Complaints Committee to look into complaints relating to sexual harassment at work place of any women employee. The Company has constituted "Internal Complaints Committee" as required under Section 4(1) of Sexual harassment of women at work place (prevention, prohibition and redressal) act, 2013. This committee consists of following members: Ms. V. Madhumathi Ms. Drishti Chhabria Ms. H. C. Madhavi During the year under review, no complaint of harassment at the workplace was received by the Committee. 34. Conservation of energy, technology absorption and foreign exchange earnings and outgo The particulars as prescribed under Sub Section (3) (m) of Section 134 of the Companies Act, 2013, read with the Companies (Accounts) Rules, 2014. A. Conservation of Energy : The Company's core activity is information technology and services related which is not power intensive. The Company is making every effort to conserve the usage of power. B. Technology Absorption (R&D, Adaptation and Innovation): 1. Efforts, in brief, made towards technology absorption, adaptation and innovation: i) Continuous research to upgrade existing products and to develop new products and services. ii) To enhance its capability and customer service the company continues to carry out R & D activities in house. 2. Benefits derived as a result of the above efforts: i) Introduction of new and qualitative products. ii) Upgrade of existing products. 3. Future plan of action: Intense will continue to invest in and adopt the best processes and methodologies suited to its line of business and long-term strategy. Training employees in the latest appropriate technologies will remain a focus area. The Company will continue to leverage new technologies and also on the expertise available. 35. Corporate Social Responsibility (CSR) The Company has constituted the CSR committee as per the CSR Policy Rules and has identified the Education, Health, Environment, Rural Development and Disaster Relief, if any as the focus areas for CSR activities. The Company could not spend all the earmarked money because of the problems in identifying the areas and beneficiaries. However, the unspent amount in the year 2014-15 is proposed to be spent during the current year 2015-16 and the next years. The Disclosure as per Rule 9 of Companies (Corporate Social Responsibility Policy) Rules, 2014 are enclosed with this report as Annexure - II. 36. Human Resources Your Company treats its "Human Resources" as one of its most important assets. Your Company continuously invests in attraction, retention and development of talent on an ongoing basis. A number of programs that provide focused people attention are currently underway. Your Company thrust is on the promotion of talent internally through job rotation and job enlargement. 37. Directors' Responsibility Statement The Directors' Responsibility Statement referred to in Clause (c) of Sub-Section (3) of Section 134 of the Companies Act, 2013, shall state that- (a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures; (b) 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 and loss of the company for that period; (c) the directors had taken proper and sufficient care for the maintenance of adequate accounting 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; and (e) the directors, in the case of a listed company, had laid down internal inancial controls to be followed by the company and that such internal inancial 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. 38. Transfer of Amounts to Investor Education and Protection Fund Your Company did not have any funds lying unpaid or unclaimed for a period of seven years. Therefore, there were no funds which were required to be transferred to Investor Education and Protection Fund (IEPF). 39. Listing with Stock Exchanges At present the equity shares of the Company are listed on the Bombay Stock Exchange at Mumbai. The company confirms that it has paid Annual Listing Fees due to the Bombay Stock Exchange for the year 2015 -16. 40. Depository System Members are aware that your Company's shares are tradable compulsorily in electronic form and your Company has established connectivity with both National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL). In view of the numerous advantages offered by the depository system, the members are requested to avail the facility of Dematerialization of the Company's shares on NSDL & CDSL. The ISIN allotted to the Company's Equity shares is INE781A01025. 41. Acknowledgements Your Directors' convey their sincere thanks to State Bank of Hyderabad, HDFC Bank Ltd, and shareholders for their continued support. Your Directors' place on record, appreciation of the contribution made by the employees at all levels and looks forward to their continued support. For and on behalf of the Board C. K. Shastri Chairman & Managing Director Jayant Dwarkanath Whole Time Director Date: 13th August, 2015 Place: Secunderabad |