We're Part of the Future. We're Part of the Digital Revolution
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We’re part of the future. We’re part of the digital revolution. WeP Solutions Limited Twenty Second Annual Report 2016-17 Corporate Information Board of Directors Internal Auditors Ram N Agarwal - Chairman and Managing Director M/s. Gnanoba & Bhat, Chartered Accountants, Bengaluru H V Gowthama - Independent Director Sudhir Prakash - Independent Director Corporate Identity Number (CIN) Shankar Jaganathan - Independent Director L72200KA1995PLC025617 Mythily Ramesh - Independent Director G H Visweswara - Independent Director Listed on B R Ganesh - Small Shareholders and Bombay Stock Exchange (BSE) Independent Director Scrip Code : 532373 Dr. A L Rao - Non - Executive Director Scrip Name : WEPSOLN Prashee Agarwal - Non-Executive Director Share Transfer Agent Website Cameo Corporate Services Limited, www.wepsolutions.co.in #1, Subramanian Building, www.wepdigital.com Club House Road, Chennai - 600 002 Email: [email protected] Investor E-mail ID [email protected] Bankers Axis Bank Limited Registered Ofce Corporation Bank 40/1 A, Basappa Complex, HDFC Bank Limited Lavelle Road, Bengaluru 560 001. Ph.: +91 80 66112000 Fax : +91 80 66112055 Statutory Auditors E-mail : [email protected] M/s. N.M. Raiji & Co, Chartered Accountants, Mumbai [email protected] Secretarial Auditor Manufacturing Locations S Kannan and Associates, Practicing Company Secretary, Bengaluru a. Karnataka: No. 312/313, Hebbal Industrial Area, Mysore 570 016. Cost Auditor b. Himachal Pradesh: Plot No. 87, EPIP, Phase I, Jharmajri, District: Solan, M/s. Rao, Murthy and Associates, Cost Accountants, Bengaluru Himachal Pradesh -174 103. Contents Letter to Shareholders ..............................................................................................03 Performance at a Glance ..........................................................................................04 Business Overview ....................................................................................................07 Directors’ Report ......................................................................................................11 Report on Corporate Governance .............................................................................39 Consolidated Auditor’s Report..................................................................................57 Consolidated Financials ............................................................................................61 Standalone Auditor’s Report ....................................................................................79 Standalone Financials ...............................................................................................84 Letter to the Shareholders Dear Shareholders, Recently several initiatives are being taken in the country to promote Digitisation of the economy. One of the prime objectives of these is to provide opportunities for the micro and small enterprises to be a part of main stream economic activities and to be counted. Many of these will bring discernible positive results in the medium and long term. All these measures will enable and encourage building of ‘Made in India’ digital solutions which will be very beneficial to Indian economy and society. WeP has a vision to participate aggressively and comprehensively in this unfolding opportunity and to help these enterprises to conduct their business efficiently by providing state of art Digital Solution. We are rapidly getting ready for this vast digital challenge and opportunities. I am happy to report that we were successful in ‘WeP Digital’ business by getting empanelment from GSTN as an approved GST Suvidha Provider (GSP). We also demonstrated digital devices which have GST ready solution. These digital devices will help the MSME businesses to file their GST returns with minimal pain. WeP also acquired first set of customers for Aadhaar Authentication. I am happy to report that we have received additional investment by way of Preferential Issue at a premium to help us grow this Digital Business Segment. The transformation at WeP, which was initiated during the year 2015-16, continued to gather momentum: Ÿ MPS Business grew by 6% on yearly basis. Ÿ Retail Printing Solution Business grew by 20% on YoY basis in spite of Demonization bump. Ÿ Cost reduction in traditional businesses helped us to contain losses at last year levels in spite of significant planned reduction in Impact Printer sales revenues. Ÿ Good news is that in second half of the year, Printer Business Operating loss was reduced to only Rs.1.9 mn in comparison to Rs.29 mn in the first half. As indicated in the last year’s Annual Report, our sales revenue growth should begin from the year 2017-18 onwards. We will continue to provide ‘WoW’ to our customers in form of WeP Products and Services with long term returns to our shareholders and challenging/exciting workplace to all our employees. I convey my gratitude and place on record appreciation for all the employees at all levels for their hard work, solidarity, cooperation and dedication during the year. I sincerely convey their appreciation to Customers, Shareholders, Vendors, Bankers, Business Associates, Regulatory and Government authorities for their continued support and cooperation. We rededicate ourselves to everyone who have reposed their faith and trust on us. With Best Regards, Ram N Agarwal WeP Solutions Limited | Twenty Second Annual Report 2016-17 3 Standalone Highlights Revenue Gross Earnings (EBITDA) ` in Mn. ` in Mn. 1100 1042 135 1000 120 889 107 900 105 105 800 781 95 90 700 672 600 75 505 500 60 400 400 381 384 370 45 300 30 200 100 15 0 0 PBU MPS TOTAL FY 2014-15 FY 2015-16 FY 2016-17 FY 2014-15 FY 2015-16 FY 2016-17 Prot After Tax Operating Cash Flow ` in Mn. ` in Mn. 20 220 18 200 16 16 180 160 14 144 12 140 12 11 120 110 10 101 100 8 80 6 60 4 40 2 20 0 0 FY 2014-15 FY 2015-16 FY 2016-17 FY 2014-15 FY 2015-16 FY 2016-17 4 WeP Solutions Limited | Twenty Second Annual Report 2016-17 Consolidated Highlights Revenue Gross Earnings (EBITDA) ` in Mn. ` in Mn. 1000 110 894 900 100 800 786 90 101 80 700 92 70 600 505 60 500 400 50 400 381 384 40 300 30 200 20 100 10 0 0 PBU MPS TOTAL FY 2015-16 FY 2016-17 FY 2015-16 FY 2016-17 Prot After Tax Operating Cash Flow ` in Mn. ` in Mn. 10 160 150 9 140 8 130 7 120 145 7 110 100 6 90 103 5 80 70 4 60 3 3 50 40 2 30 20 1 10 0 0 FY 2015-16 FY 2016-17 FY 2015-16 FY 2016-17 WeP Solutions Limited | Twenty Second Annual Report 2016-17 5 Shareholders Analytics No. of Shareholders No. of Shares Traded in Nos. in Lacs 4500 4,239 60 4,013 55 53 4000 50 3,488 45 3500 45 3000 40 35 2500 30 25 2000 25 1500 20 15 1000 10 500 5 0 0 March 31, 2015 March 31, 2016 March 31, 2017 FY 2014-15 FY 2015-16 FY 2016-17 Value Traded Market Capitalisation ` in Lacs ` in Lacs 1,982 2000 14000 13,317 13000 1800 12000 1600 11000 10000 1400 1,329 9000 1200 8000 1000 7000 6000 800 5,072 5000 600 4000 3,105 400 383 3000 2000 200 1000 0 0 FY 2014-15 FY 2015-16 FY 2016-17 March 31, 2015 March 31, 2016 March 31, 2017 (Source: www.bseindia.com) 6 WeP Solutions Limited | Twenty Second Annual Report 2016-17 Business Overview MANAGED PRINTING SOLUTIONS (MPS) GST Services Retail Printing Solutions Aadhaar Authentication Services DIGITAL PRINTER SERVICES BUSINESS Impact Printers (PBU) Document Management Solutions (DMS) I. DIGITAL SERVICES Ÿ Keeping up with this important change in Indian history, WeP Digital has started GST services. WeP Solutions has been taking innovative initiatives to Ÿ WeP Solutions is one of the 34 Companies appointed as a transform our company into newer areas of growth GST Suvidha Provider (GSP) by the GSTN (Goods and particularly, towards a Digital future, a future which is being Services Tax Network). accelerated by our visionary Prime Minister. During the year, steps have been taken to sign up for many Government of India Digital Infrastructure initiatives like Aadhaar, eSign and GST Introduction: GST. Now that we are at a threshold of an explosive growth, Ÿ GST is one indirect tax for the whole nation. we feel it appropriate that we reorganize ourselves so as is to Ÿ GST is a single tax on the supply of goods and services. provide focus on customers and opportunities which arise with them. Ÿ Applicable on all stages starting from Manufacturer and ending at consumer. A new business named WeP Digital is being launched. Mission of ‘WeP Digital’ is to empower our business customers by Ÿ Tax is applicable only on Value addition. This is achieved by providing innovative Digital Services which are omnipresent providing set-off of taxes paid at earlier stages. and which help the customers to operate on ‘cashless’ and Ÿ The nal consumer will bear only the GST charged by the ‘paperless’ basis. These services are being launched for last dealer in the supply chain. applications in the areas of GST Tax ling, Document management and Aadhaar Authentication. Our Mission a. GST Services Ÿ Simple, Robust and easy to use E-ling GST Software (ASP Platform) Ÿ 2017 is an important year for Indian economy. The entire Ÿ taxation system is about to change with the advent of One Stop Solution for all GST Compliances Goods and Services Tax in India. Ÿ Removing all road blocks for transition to GST Ÿ GSP services- For businesses who want to use only our GSP platform Ÿ ASP & GSP services- For businesses and aggregators who want to use our ASP and GSP platform Ÿ Complete GST package- For retailers, who will use our GST ready devices Ÿ India’s rst GST ready devices- We have developed our own è GST Ready Billing Device- Easy Bill DR1 EASY BILL P3 EASY BILL DR1 è GST Ready POS tablet- Easy Bill P3 GST Ready POS Tablet GST ReadyW BillingeP Solutions Device Limited | Twenty Second Annual Report 2016-17 7 WeP Solutions Limited | Twenty Second Annual Report 2016-17 7 Business Overview b. Aadhaar Authentication Services WeP Aadhaar Authentication enables Aadhaar-holders to Business prove their identity and for service providers to conrm the Prot resident’s identity claim in order to provide services and give access to benets.