DIRECTORS' REPORT To, The Shareholders Your Directors have pleasure in presenting the 27th Annual Report together with the Audited thereon for Financial Statements and their Report the financial year ended 31st March, 2015. Company's Performance During the period under review, at consolidated level, the company achieved revenue of Rs. 23,838,167.97, EBDITA Rs. 1,175,078.62, PBT of Rs. 634,134.62 and PAT of Rs. 723,713.40 as against a revenue of Rs. 22,852,118.56, EBDITA Rs. 815,773.63, PBT of Rs. 413,019.28 and PAT of Rs 392,778.78 respectively in the previous year. At standalone level, the company achieved revenue of Rs. 15,778,989.21, EBDITA Rs.411,507.27, PBT of Rs. (45,574.73) and PAT of Rs. 44,004.05 as against a revenue of Rs. 18,315,579.57, EBDITA Rs. 394,373.65, PBT of Rs. 106,221.45 and PAT of Rs 85,980.95 respectively in the previous year. At the Standalone level the sales of the Company have marginally decreased as compared to previous year. The export sales were comparatively lower as compared to previous year whereas domestic sales have comparatively increased in this year being the equally focused area. And at the Consolidated level the sales of the Company has increased as compared to last year, as Company has equally focused on the business of both the subsidiary companies. A detailed Management Discussion and Analysis Report forms part of this report is annexed as Annexure-1. Dividend No dividend is recommended in view of the accumulated losses during the year apart from meeting the contingent liabilities. Quality Initiatives & Achievements: The Company successfully achieved annual enterprise-wide ISO certification for ISO 9001:2008 (Quality Management) for Software Development, ERP Solution, Website Development, Medical Transcription & Search Engine Optimization. Reserves No amount was transferred to the reserves during the financial year ended on 31st March, 2015. Future Prospects Your company have achieved good amount of business from domestic market in this year. The Company has also explored the Australian market recently to expand its share of business in the overseas market. The Company has identified new avenues of software business. Ecommerce business is picking up in India helping the company to get more software business from the domestic market. Oracle is another new area in which the company has entered in this year. Here is a list of what your company plans for the coming years: • Your Company is looking forward to work in the areas of SAP ERP Solution, Digital Marketing and Mobile Apps development as there is huge potential in these areas. • Your Company is now focused on successfully expanding Oracle Applications business both in domestic as well as in overseas market. • Your Company has also ventured into computer hardware activities for its client as a part of integrated package deal. The Company is very positive to get good volume of business in the coming year. • Your Company is on the way of developing its own sector specific products and packages in the months to come. Your Company is constantly striving for new fields of innovation, improved performance with a continued sense of commitment to a higher standard. There is a constant effort that is being made for bringing in worthy and new projects. Your Company is committed to handle new roles and responsibilities and is open to accept new challenges on a global basis by virtue of its strengthened business model. In addition, there are continuous efforts at improving efficiency and delivering excellence in project execution. Subsidiary companies The Company has two subsidiaries namely Lensel Web Services Pvt Ltd and Rituraj Shares Broking Pvt. Ltd. as on March 31, 2015. There are no associate companies within the meaning of Section 2(6) of the Companies Act, 2013 ("Act"). There has been no material change in the nature of the business of the subsidiaries. Pursuant to provisions of Section 129(3) of the Act read with Rule 5 of Companies (Accounts of Companies) Rules, 2014, a statement containing salient features of the financial statements of the Company's subsidiaries in Form AOC-1 is attached to the financial statements of the Company as Annexure-2. The audited financial statements of each of its subsidiary companies are available for inspection at the Company's registered office and also at registered offices of the respective companies. The Policy for determining material subsidiaries as approved may be accessed on the Company's website at the link: <http://> www.lnsel.com Deposits Your Company has not accepted any deposit within the meaning of Section 73 of the Companies Act, 2013 and the Rules made thereunder and therefore, no amount of principal or interest was outstanding as on the date of Balance Sheet. Particulars of loans, guarantees and investments. There are no Loans, Guarantees and Investments made under the provisions of Section 186 of the Companies Act,2013 during the year under review. Related Party Transactions There are no contracts or arrangements with related parties referred to in Section 188(1) of the Companies Act, 2013 save and except the carry forward balances appearing in the notes to accounts. Corporate Social Responsibility Initiatives The Company has not developed and implemented any Corporate Social Responsibility initiatives as the said provisions are not applicable to the Company. Directors' Responsibility Statement Pursuant to Section 134(5) of the Companies Act, 2013, the board of directors, to the best of their knowledge and ability, confirm that: (a) in the preparation of the annual accounts, the applicable accounting standards had been followed and there are no material departures; (b) the Directors have 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; (c) the Directors have 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 annual accounts have been prepared on a going concern basis; (e) the Directors have laid down internal financial controls to be followed by the Company and such internal financial controls are adequate and are operating effectively. (f) the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively. Directors Your Director Mr. Ajay Agarwal retires at the ensuing Annual General Meeting and being eligible offers himself for reappointment. Additional information and brief profile as stipulated under the Listing agreement for the Director seeking reappointment is annexed to the Notice of AGM. No. of Meetings of the Board Five meetings of the board were held during the year. For details of the meetings of the board, please refer to the corporate governance report, which forms part of this report. 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 other Committees. The manner in which the evaluation has been carried out has been explained hereunder. A structured questionnaire was prepared after taking into consideration inputs received from the Directors, covering various aspects of the Board's functioning such as adequacy of the composition of the Board and its Committees, Board Culture, execution and performance of specific duties, obligations and governance. A separate exercise was carried out to evaluate the performance of individual Directors including the Chairman of the Board, who were evaluated on parameters such as level of attendance, engagements and contribution, independence of judgment, safeguarding the interest of the Company and its minority shareholders, etc. The performance evaluation of the Independent Directors was carried out by the entire Board, excluding the directors being evaluated. The performance evaluation of the Chairman and the Non Independent Directors was carried out by the Independent Directors. The Directors expressed their satisfaction with the evaluation process. Policy on Appointment of Director and Remuneration The Nomination and Remuneration Committee identifies and ascertains the integrity, qualification, expertise, skills, knowledge and experience of the person for appointment as Director and Key Managerial Personnel. The appointment of a Director as recommended by the Nomination and Remuneration Committee requires approval of the Board. The remuneration / compensation / commission etc. to the Directors and Key Managerial Personnel is proposed by the Nomination and Remuneration Committee in compliance with requirements of the Companies Act and recommended to the Board for it's approval. Approval of Shareholders is obtained, if required. The Directors receive remuneration by way of fees for attending meetings of the Board or committees thereof. At the time of appointing an Independent Director, a formal letter of appointment is given to the candidate, which inter-alia, explains the role, functions, duties and responsibilities expected of the person as an Independent Director of the Company. The Independent Director is also explained in detail the compliance required from him under the Companies Act, 2013 and other relevant regulations. The independence of Director is decided as per provisions of the Companies Act, 2013. The Board has, on the recommendation of the Nomination & Remuneration Committee framed a policy for remuneration of Directors, Key Managerial Personnel and Senior Management. The said Remuneration Policy is annexed as Annexure-3 to this report. Internal Financial control systems and their adequacy The Company has in place adequate internal financial controls with reference to financial statements. During the year, such controls were tested and no reportable material weakness in the design or operation were observed. Audit Committee The details pertaining to composition of audit committee are included in the Corporate governance Report, which forms part of this report. Auditors Pursuant to the provisions of Section 139 of the Act and the rules framed thereunder, Jain Sonu & Associates, Chartered Accountants, were appointed as statutory auditors of the Company, hold office till the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment. They have confirmed their eligibility to the effect that their re-appointment, if made, would be within the prescribed limits under the Act and that they are not disqualified for re-appointment. The Notes on financial statement referred to in the Auditors' Report are self-explanatory and do not call for any further comments. The Auditors' Report does not contain any qualification, reservation or adverse remark. Secretarial Audit 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 has appointed Mrs. Rasna Goyal, a Practicing Company Secretary in Practice (CP No.- 9209) to undertake the Secretarial Audit of the Company. The Report of the Secretarial Audit Report is annexed herewith as Annexure-4. There are no qualifications or observations or remarks made by Secretarial Auditor in his report. Risk management The Company has laid down procedures to inform Board members about the risk assessment and minimization procedures. A Risk management Committee consisting of Director and senior executives of the Company has been formed to periodically reviews these procedures to ensure that executive management controls risk through means of a properly defined framework .The Company has framed the risk assessment and minimization procedures which will be periodically reviewed by the Board. Extract of Annual Return The extract of the Annual Return in form MGT 9 is annexed herewith as Annexure-5. Particulars of Employees and related disclosures The information required under section 197(12) of the Act read with rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is not applicable as no remuneration has been paid to the directors, except sitting fees. Vigil Mechanism/Whistle Blower Policy Pursuant to the provision of section 177(9) & (10) of the Companies Act, 2013 and clause 49 of the Listing Agreement, a Vigil Mechanism for directors and employees to report genuine concerns has been established. The Vigil Mechanim Policy has been uploaded on the website of the Company at <http://www.lnsel.com> Disclosure requirements As per Clause 49 of the listing agreements entered into with the stock exchanges, corporate governance report with auditors' certificate thereon and management discussion and analysis are attached, which form part of this report. Details of the familiarization programme of the independent directors are available on the website of the Company (URL: www.lnsel.com/investors ). Policy for determining material subsidiaries of the Company is available on the website of the Company (URL:www.lnsel.com/ investors ). Policy on dealing with related party transactions is available on the website of the Company (URL:www.lnsel.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 Clause 49 of the Listing Agreements with stock exchanges (URL: www.lnsel.com/investors ). Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo Additional information relating to conservation of energy, technology absorption, foreign exchange earnings and outgo as required under the Companies Act, 2013 is annexed as Annexure-6 to this report. Declaration by Independent Directors Shri Vikash Kamani, Shri Sushil Kumar Gupta and Miss Leela Murjani are Independent Directors on the Board of your Company. In the opinion of the Board and as confirmed by these Directors, they fulfill the conditions specified in Section 149 of the Companies Act, 2013 and the Rules made thereunder about their status as Independent Directors of the Company. Corporate Governance The Company continues to remain committed to high standards of corporate governance. The report on corporate governance as per the requirement of the listing agreement with stock exchanges forms part of this report is annexed as Annexure-7. The Company has complied with all the requirements of corporate governance. The certificate from the Auditors of the Company confirming compliance to the conditions of the corporate governance requirements is also annexed. Acknowledgments Your Directors place on record their appreciation for the help and co-operation received by them from ICICI Bank Ltd., Allahabad Bank, Indian Overseas Bank, Union Bank of India, Indusind Bank, Oriental Bank of Commerce, State Government of West Bengal and Department of Electronics & Department of Telecommunication under Ministry of Information & Technology Government of India, specially Software Technology Parks of India, WEBEL(West Bengal Electronics Industry Development Corporation Limited). Your Directors also place on record their appreciation for the dedicated services rendered by the employees of your Company at all levels. For and on behalf of the Board Ajay Agarwal Chairman Arpita Gupta Director Place : Kolkata Dated : 8th July, 2015 |