Board's Report Dear Members, Your Directors take pleasure in presenting the 19th Annual Report along with the Audited Financial Statements for the financial year ended March 31, 2015. State of the Company's Affairs During the period under review, the Company has achieved revenue of Rs.1326. 12 million and net profit of Rs. 30. 70 million on a Standalone basis. During the same period, the Company has achieved revenue of Rs. 2424.91 million and net profit of Rs. 25.88 million on a consolidated basis. Transfer to Reserves The Company has not proposed to transfer any amount to the general reserve for the financial year ended March 31, 2015. Dividend The Company has not declared dividend for the financial year ended March 31, 2015. Operations Tanla Solutions [BSE: 532790 NSE: TANLA] founded in the year 1999 listed since 2007, a Hyderabad based Indian company is a leading provider of telecom solutions to Mobile Operators., Tanla is the first Indian Company to develop and deploy SMSC with all leading telcos. Tanla serves more than 100 clients in 32 countries. Tanla is a telecom products & solutions company that specializes in pioneering communication roadmaps and integrating various systems of communication for mobile technology. Tanla is listed on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) in India. Material Changes: There are no Material changes affecting the financial position of the Company during financial year 2014-15. Management Discussion & Analysis The Management Discussion and Analysis Report highlighting the industry structure and developments, opportunities and threats, future outlook, risks and concerns etc., is furnished separately and forms part of this Annual Report. Directors Responsibility Statement as required under Section 134 of the Companies Act, 2013 Directors' Responsibility Statement Pursuant to the provisions of Section 134 (3) (c) and 134(5) of the Companies Act 2013, the Board of Directors of Tanla Solutions Limited make the following statements, to the best of their knowledge and belief and according to the information and explanations obtained by them: a) That in the preparation of the annual financial statements for the year ended March 31, 2015, the applicable accounting standards have been followed and there have been no material departures therefrom; b) That the accounting policies mentioned in Note 52 to the Financials Statements have been selected and applied consistently and judgments and estimates have been made 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 profits 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 have been laid down to be followed by the Company and such internal financial controls are adequate and operating effectively; f) That proper systems are in place to ensure compliance with the provisions of all applicable laws and such systems are adequate and operating effectively. Consolidated Financial Results Consolidated Financial Statements incorporating the operations of the Company, its subsidiaries and Joint Venture Companies is appended. As required under the provisions of the Act, a statement showing the salient features of the financial statements of the subsidiaries and joint ventures is enclosed as an Annexure B to this Report. The financial statements of the subsidiary companies will be made available to the members of the Company and its subsidiary companies on request and will also be kept for inspection in the Registered Office of the Company. Subsidiary Companies Tanla Solutions (UK) Limited, formerly Techserv Teleservices (UK) Limited, UK (hereinafter referred to as "Tanla UK"), a wholly owned subsidiary of Tanla based at London, UK, provides aggregator and offshore development services to clients in telecommunications and offshore service sectors. Tanla Corporation Private Limited (formerly known as Mufithumb Corporation Private Limited, India), a wholly owned subsidiary of Tanla based at Hyderabad, India is engaged in development of telecom products and services. Tanla Mobile Private Limited (a 100% subsidiary company) was merged with Mufithumb Corporation Private Limited (a 100% subsidiary company) with implementation date April 01, 2014 vide Honourable High Court of Andhra Pradesh and Telangana order no. C. P of 7 & 8 of 2015 dt. April 28, 2015 and subsequently the name was changed to Tanla Corporation Private Limited. Tanla Mobile Asia Pacific Pte Limited, Singapore (hereinafter referred to as "Tanla Singapore"), a wholly owned subsidiary of Tanla based at Singapore, provides aggregator and offshore development services to clients in telecommunications and offshore service sectors. Tanla Mobile Ireland Pvt Limited, Ireland (hereinafter referred to as "Tanla Ireland"), a wholly owned subsidiary of Tanla Singapore based at Ireland, provides aggregator services to clients in the telecommunications sector. Tanla Mobile Middle East FZ LLC, Dubai (hereinafter referred to as "Tanla Dubai"), a wholly owned subsidiary of Tanla Singapore based at Dubai, UAE provides aggregator services to clients in the telecommunications sector. Tanla Mobile Finland Oy, Finland (hereinafter referred to as "Tanla Finland,"), a wholly owned subsidiary of Tanla Dubai based at Finland. Tanla Oy, Finland (hereinafter referred to as "Tanla Oy"), a wholly owned subsidiary of Tanla Finland Oy, Finland provides payment solutions to clients in telecommunications and allied areas. Safety, Health and Environment (SHE) Company's focus on Safety, Health and Environment continued during the year under review across all locations maintaining high safety standards. Company has put in place robust processes and performance indicators to track its SHE performance. There were nil reportable incidents during the year. The Company maintained high standards of environmental performances with all facilities operating well within norms. The Company continued its efforts to track health indicators of its entire operating staff. Corporate Social Responsibility As the Company has not made profits during the preceding three (3) years, the Company has not spent any amount on CSR activity. Particulars of Loans, Guarantees and Investments Details of loans and guarantees given and investments made under Section 186 of the Act are given in the Notes to the Financial Statements. Public Deposits The Company has not accepted any deposit from the public under Chapter V of the Act or under the corresponding provisions of Section 73 and 74 of the Companies Act, 2013, and no amount of principal or interest was outstanding as on the Balance Sheet date. Particulars of Employees A table containing the particulars in accordance with the provisions of Section 197(12) of the Act, read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is appended as Annexure C to this Report. A statement containing the name of every employee employed throughout the financial year and in receipt of remuneration of Rs. 60 lakh or more, or employed for part of the year and in receipt of Rs. 5 lakh or more a month, under Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is enclosed as Annexure D to this Report. Extract of the Annual Return In accordance with Section 134(3)(a) of the Act, an extract of the Annual Return (MGT-9) in the prescribed format is appended as Annexure E to this Report. Corporate Governance The Company is committed to maintain high standards of Corporate Governance. As stipulated under the requirements of the Listing Agreement with Stock Exchanges, a report on Corporate Governance is appended to this report from a Practicing Company Secretary confirming compliance with the conditions of Corporate Governance. Directors and Key Managerial Personnel In accordance with Article 121 of the Company's Articles of Association, read with Section 152 of the Act, Mr. D Uday Kumar Reddy, retires by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment. Mr. Satish Kathirisetti, Director of the company resigned from the Board w.e.f. 02nd September, 2014 All the Independent Directors of the Company have given declarations under sub-section (6) of Section 149 of the Act, and the same have been considered and taken on record by the Board. Mr. D Uday Kumar Reddy, Mr. Gautam Sabharwal Mr. Satish Kathirisetti (resigned w.e.f Sept 02, 2014), Mr G.K.Srinivas, Chief Financial Officer and Smt. Seshanuradha Chava, Company Secretary, are the Key Managerial Personnel (KMP) of the Company in terms of the provisions of the Act. Familiarisation Programme for Independent Directors On their appointment, Independent Directors are familiarised about the Company's operations and businesses. Interaction with the Business Heads and key executives of the Company is also facilitated. Detailed presentations on the business of each of the Division are also made to the Directors. Direct meetings with the Chairman & Managing Director are further facilitated for the new appointee to familiarize him/her about the Company/its businesses and the group practices. Number of meetings of the Board of Directors During the year ended March 31, 2015, Five (5) Board Meetings were held. The dates on which the Board meetings were held are - May 30, 2014; July 08, 2014; October 17, 2014; December 27, 2014 and January 14, 2015 Internal Financial Control Systems The Company has adequate Internal Financial Controls consistent with the nature of business and size of the operations, to effectively provide for safety of its assets, reliability of financial transactions with adequate checks and balances, adherence to applicable statutes, accounting policies, approval procedures and to ensure optimum use of available resources. These systems are reviewed and improved on a regular basis. It has a comprehensive budgetary control system to monitor revenue and expenditure against approved budget on an ongoing basis. The Company has its own corporate internal audit function to monitor and assess the adequacy and effectiveness of the Internal Financial Controls and System across all key processes. Deviations are reviewed periodically and due compliance ensured. Summary of Significant Audit Observations along with recommendations and its implementation are reviewed by the Audit Committee and concerns, if any, are reported to Board. Vigil Mechanism / Whistle Blower Policy The Company has a Whistle Blower Policy which provides the employees, customers, vendors and Directors an avenue to raise concerns on ethical and moral standards and legal provisions in conduct of the business operations of the Company. It also provides for necessary safeguards for protection against victimization for whistle blowing in good faith. Board Evaluation In accordance with the provisions of the Act and Clause 49 of the Listing Agreement, the Board has carried out evaluation of its own performance, the performance of Committees of the Board, namely, Audit Committee, Risk Management Committee, Stakeholders Relationship Committee, and Nomination & Remuneration Committee and also the Directors individually. The manner in which the evaluation was carried out and the process adopted has been mentioned in the Report on Corporate Governance. Remuneration Policy 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. Salient features of the Remuneration Policy are set out in the Report on Corporate Governance. Risk Management Policy The Company has constituted a Risk Management Committee. Details of constitution of the Committee and its terms of reference are set out in the Report on Corporate Governance. The Company has formulated a Risk Management Policy, under which various risks associated with the business operations are identified and risk mitigation plans have been put in place, details of which are set out in the Management Discussion and Analysis Report. Material Subsidiary Policy The Company has adopted a policy for determining material subsidiary, in line with the requirements of the Listing Agreement. The Policy on Material Subsidiary is available on the website of the Company at www.tanla.com Related Party Transactions All related party transactions that were entered into during the financial year were on arm's length basis and were in the ordinary course of business. There were no material significant related party transactions made by the Company with the Promoters, Directors, Key Managerial Personnel or the Senior Management which may have a potential conflict with the interest of the Company at large. The related party transactions entered into are reviewed by an independent audit firm to confirm that they were in the ordinary course of business and at arm's length basis. The Company has formulated a policy for Related Party Transactions which has been approved by the Board and is placed on the website of the Company. None of the Directors had any pecuniary relationship or transactions with the Company, except the payments made to them in the form of remuneration and sitting fee. In accordance with Section 134(3) (h) of the Companies Act, 2013 and Rule 8(2) of the Companies (Accounts) Rules, 2014, the particulars of contract or arrangement entered into by the Company with related parties referred to in Section 188(1) in Form AOC-2 is attached as "Annexure B". The details of related party disclosures form part of the notes to the financial statements provided in this annual report. Audit Committee The Audit Committee comprises of Padmabhushan Ram Narain Agarwal, Chairman, and Dr. A.G.Ravindranath Reddy & Mr. Gautam Sabharwal, Members. All the recommendations made by the Audit Committee were accepted by the Board. Statutory Auditors M/s Ramasamy Koteswara Rao & Co., Chartered Accountants, were appointed as Auditors of the Company for a period of three years from the conclusion of the last Annual General Meeting held on September 30, 2014. As required under the provisions of Section 139 of the Act, a resolution for the yearly ratification of their appointment is being placed before the shareholders for their approval. In this regard, the Company has received a certificate from the auditors to the effect that if they are reappointed, it would be in accordance with the provisions of Section 141 of the Act. Cost Auditors The provisions of Section 148 of the Companies Act, 2013 does not apply to the Company and hence, no cost auditors are appointed. Secretarial Auditor As per the provisions of Section 204 of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014, the Board had appointed BS & Company, Company Secretaries as Secretarial Auditor to conduct Secretarial audit of the company for the financial year ended on March 31, 2015. Secretarial Audit Report issued by BS & Company, Company Secretaries in form MR-3 is enclosed as a part of Corporate Governance Report. Secretarial Auditors have observed that, there is no Woman Director on the Board of the Company. The Company is in the process of identifying a suitable candidate to be appointed as a Woman Director on Board of the Company. Conservation of energy, technology absorption, foreign exchange earnings and outgo The particulars as prescribed under Sub-section (3)(m) of Section 134 of the Act, read with Companies (Accounts) Rules, 2014, are enclosed as Annexure-F to this Report. Employees' Stock Options The Nomination and Remuneration Committee has cancelled the ESOP Scheme 2008 and the underlying ESOP Pool of 5,000,000 Options. The Board in its meeting held on August 13, 2015 has approved ESOP 2015-16 Policy to its Employees with 50 Lakh fully paid-up Equity Shares, subject to the approval of Shareholders. Obligation of Company Under The Sexual Harassment Of Women At Workplace (Prevention, Prohibition And Redressal) Act, 2013 The Company has in place an Anti Sexual Harassment Policy in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy. The following is a summary of sexual harassment complaints received and disposed off during the year 2014-15: No complaints have been received under this Act, during the year. Your Directors place on record their appreciation for the services rendered by the employees. The relation between the management and the employees has been cordial throughout the year. Acknowledgement The Directors acknowledge and would like to place on record the commitment and dedication on the part of the employees of your Company for their continued efforts in achieving good results. The Directors also wish to acknowledge and record their appreciation of the continued support and assistance received by the Company's Banks, financial institutions, mutual funds, as well as from various Government bodies both at the Centre and the State. On behalf of the Board of Directors for Tanla Solutions Limited Sd/- D. Uday Kumar Reddy Chairman & Managing Director (DIN: 00003382) Place: Hyderabad. Date : August 13, 2015 |