The Directors present their Report together with the Companys financialstatements for the year ended March 31 2016.
|FINANCIAL SUMMARY || || |
(In INR Lakhs)
|Particulars ||Consolidated Results ||Standalone Results |
| ||31 March 2016 ||31 March 2015 ||31 March 2016 ||31 March 2015 |
|Revenue from operations ||6582.59 ||3225.57 ||2945.33 ||2589.77 |
|Expenses ||5439.60 ||2654.69 ||2463.16 ||2275.29 |
|Depreciation & Amortization ||578.28 ||308.67 ||309.85 ||308.67 |
|Profit from operations ||564.61 ||262.21 ||172.32 ||5.82 |
|Finance Charges ||49.27 ||- ||3.19 ||- |
|Other Income ||139.14 ||102.42 ||143.61 ||102.42 |
|Profit from Ordinary Activities ||654.48 ||364.63 ||312.73 ||108.23 |
|Tax Expense / (Tax Benefit) ||(251.21) ||52.27 ||(245.77) ||(20.39) |
|Net Profit ||905.69 ||312.36 ||558.50 ||128.63 |
|Reserves ||1915.82 ||929.46 ||1309.20 ||750.70 |
REVIEW OF OPERATIONS FOR THE FY 2015 16
During the financial year under review the revenue of your Company grew by 14% andincreased by INR 355.56 Lakhs on a Standalone basis. Further total revenue on aconsolidated basis increased to INR 6582.59 Lakhs as compared to the previous yearstotal revenue of INR3225.57 Lakhs at an annual growth rate of 104%.
The Standalone PAT (Profit after Tax) increased toINR 558.50 Lakhs as fromINR128.63Lakhs in the previous year achieving a growth rate of 334% and the consolidated PATincreased to INR 905.69 Lakhs as from INR 312.36 Lakhs in the previous year at a growthrate of 190%.
In the financial year 2015-16 overall the companys performance is satisfactorybecause of improved topline sales and considerable increase in profitability. Considerableinvestments have been made in the financial year 2015-16 through its subsidiaries toexpand its operations. The outlook for the next year looks promising as we positionourselves firmly to drive profitable growth and deliver value to our clients andshareholders.
Detailed analysis of financial statements is given in Management Discussion andAnalysis Report forming part of this Annual Report.
TRANSFER TO RESERVES
The Board of Directors did not propose to transfer any amount to reserves for theperiod under review.
Keeping in view the expected cash flow requirements and in order to conserve theresources for future business operations and for the future growth of the Company theBoard of Directors were not able to recommend any dividend for the financial year ended 31stMarch 2016.
Your Company did not accept any public deposits and no amount on account of principalor interest on public deposits was outstanding on the date of balance sheet.
During the year the authorized share capital and paid up capital of the Companyremained unchanged at INR 300000000/- divided into 30000000 equity shares of INR 10/-each & INR 196310150/ - divided into 19631015 equity shares of INR 10/- eachrespectively.
SCHEME OF REDUCTION OF CAPITAL
In order to present a true and factual financial position of the Company the Board ofDirectors of the Company approved the draft Scheme of Reduction of Capital on 18thNovember 2015 to utilize the balance lying in the Securities Premium Account amounting toINR 2252.16 Lakhs of the Company to write off the entire Goodwill amounting to INR 977.14Lakhs and the balance against the accumulated losses to the extent of INR 1275.02 Lakhs ofthe Company. The Company has obtained members approval for the same through EGMdated 06th April 2016. The petition for the same has been filed with theHonble High Court for its approval.
The Reduction of paid-up share capital of the Company by way of writing off of thelosses and the goodwill of the Company against the amount lying in the securities premiumaccount of the Company does not involve reduction in the issued subscribed paid up sharecapital of the Company any payment of the paid up share capital to the shareholders ofthe Company nor does it result in extinguishment of any liability or diminution of anyliability.
The detailed Scheme on the same and other related documents are available on theCompanys website. (URL: http://www.ctepl.com/investors/)
MATERIAL CHANGES AND COMMITMENTS AFFECTING FINANCIAL POSITION BETWEEN THE END OFFINANCIAL YEAR AND DATE OF REPORT
There were no material changes and commitments affecting financial position of thecompany between 31st March 2016 and the date of this Boards Report.
REPORT ON SUBSIDIARIES
During the year under review two new companies were incorporated as subsidiaries toCambridge Technology Enterprises Ltd viz. Cambridge Technology Investments Pte. Ltd.Singapore and Cambridge Bizserve Private Limited India.
As on March 31 2016 the Company has 3 (Three) wholly-owned subsidiaries viz.Cambridge Technology Inc USA Cambridge Technology Investments Pte. Ltd. Singapore andCambridge Bizserve Private Limited.
The consolidated financial statements of the Company including its subsidiaries havebeen prepared in accordance with Section 129(3) of the Companies Act 2013. Further areport on the performance and financial position of each of the subsidiaries in theprescribed format AOC-1 as per the Companies Act 2013 is appended as Annexure - 1 tothe Boards Report. As required under Section 136 of the Companies Act 2013 theaudited financial statements including the consolidated financial statements and relatedinformation of the Company and audited accounts of each of its subsidiaries are availableon the website www.ctepl.com. These documents will also be available for inspection duringthe business hours at the registered office of the Company and any member who wish to getcopies of such financial statements may write to the Company for such requirement.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALSIMPACTING THE GOING CONCERN STATUS AND COMPANYS OPERATIONS IN FUTURE
There are no significant and material orders passed by the regulators or courts ortribunals during the year impacting the going concern status and companys operationsin future.
DETAILS OF DIRECTORS / KEY MANAGERIAL PERSONNEL
The Board of Directors of your Company comprises of 6 (six) Directors as on the date ofthis report representing the optimum blend of professionalism knowledge and having variedexperience in different disciplines of corporate functioning. Of these 3 (three)Directors are Independent Directors.
Change in Designation
Mr. Stefan Hetges Director had resigned as an Executive Director & CEO and hasbeen re-designated as Non Executive Director w.e.f. 14th May 2015. TheBoard of Directors placed on record its appreciation for the services rendered by himduring his tenure as an Executive Director & CEO and welcomed him on board as Non Executive Director.
Retirement by rotation
Pursuant to provisions of Section 152 of the Companies Act 2013 read with theCompanies (Appointment and Qualification of Directors) Rules 2014 Mr. Stefan Hetges(DIN: 03339784) is liable to retire by rotation at the ensuing Annual General Meeting andbeing eligible offers himself for reappointment to the office of directorship. Your Boardof Directors recommend his re-appointment.
Mr. Aashish Kalra (DIN: 01878010) was appointed as an Additional Director of theCompany in Executive Capacity on 14th May 2015 to hold office up to the dateof 16thAnnual General Meeting and was also designated as Chairman of the Board.The Board of Directors at its meeting held on July 24 2015 recommended to Shareholders toappoint him as Whole time Director of the Company for a period of 5 years w.e.f May14 2015. His appointment was approved as Director pursuant to resolution passed at the 16thAnnual General Meeting of the Company dated September 07 2015 and he was appointed asWhole time Director of the Company. He was also designated as Chairman and ChiefExecutive Officer (CEO) of the Company w.e.f September 08 2015.
BOARD AND COMMITTEE MEETINGS
The Board met 11 (eleven) times during the year. Details of the composition of theBoard and its Committees and of the Meetings held and attendance of the Directors at suchMeetings are provided in the Corporate Governance Report. The intervening gap between theMeetings was within the period prescribed under the Section 173(1) of Companies Act 2013and Regulation 17(2) SEBI (LODR) Regulations 2015.
DECLARATION BY INDEPENDENT DIRECTORS
All the Independent Directors have given a declaration that they meet the criteria ofindependence as laid down under Section 149 (6) of the Companies Act 2013 read with therules made thereunder and Regulation 16(1)(b) of SEBI(LODR)Regulations 2015.
The Company at its various meetings held during the financial year 2015-16 hadfamiliarized the Independent Directors with regard to their roles rightsresponsibilities in the Company nature of the industry in which the Company operates thebusiness models of the Company and future outlook etc. They are made to interact withsenior management personnel and are given all the documents reports and internal policiessought by them for enabling a good understanding of the Company its various operationsand the industry of which it is a part which enable the Directors to contributesignificantly to the Company.
Periodic updates are made at the Board and Committee Meetings on business andperformance of the Company business strategy relevant statutory changes and importantamendments are provided to the Directors. Details of familiarization programs extended tothe Independent Directors during the year are also disclosed on the Company website fromtime to time.
Web link: http://www.ctepl.com/pdfs/investors/Familiarisation_Programme_31032016.pdf.
PERFORMANCE EVALUATION NOMINATION & REMUNERATION POLICY
Pursuant to the provisions of Companies Act2013 read with the rules made thereunderand SEBI (LODR) Regulations 2015 the performance evaluation of individual DirectorsBoard and its Committees was carried out.
The requisite details as required by Section 134(3) Section 178(3) & (4) ofCompanies Act 2013 and Regulation 34(2) of SEBI (LODR) Regulations 2015 is provided inthe Corporate Governance Report.
Performance evaluation nomination and remuneration policy is attached as an annexure 2to Corporate Governance Report and the same is available on the website of the Company athttp://www.ctepl.com/pdfs/investors/Performance_evaluation_nomination_remuneration_policy.pdf.
EVALUATION OF PERFORMANCE OF THE BOARD ITS COMMITTEES AND DIRECTORS
Pursuant to the provisions of the Companies Act 2013 and SEBI (LODR) Regulations2015 the Board of Directors has carried out an annual evaluation of its own performanceand that of its Committees and individual Directors.
The performance of the Board Committees and individual Directors was evaluated by theBoard seeking inputs from all the Directors and chairperson. The performance of theCommittees was evaluated by the Board seeking inputs from the Committee members andchairperson. The same was done through evaluation forms.
The criteria for performance evaluation of the Board include aspects like contributionof the board to the development strategy contribution of the board to ensure robust andeffective risk management composition of the board and its committees right balance ofknowledge and skills to maximize performance Board response to any problems or crisisthat arose matters specifically reserved for the board Board communication with themanagement team employees and others updating to the Board with the latest developmentsin the regulatory environment and the market Conduct of Board Meetings at suitablelength management response to the Board receipt of timely information by the Board etc.
DIRECTORS RESPONSIBILITY STATEMENT
Based on the framework of internal financial controls and compliance systemsestablished and maintained by the Company work performed by the Internal Statutory andSecretarial Auditors and the reviews performed by Management and the relevant BoardCommittees including the Audit Committee the Board is of the opinion that theCompanys internal financial controls were adequate and effective during thefinancial year 2015-16.
Accordingly pursuant to Section 134 (3) (c) and 134 (5) of the Companies Act 2013and to the best of their knowledge and ability In terms of Section 134(3)(c) of theCompanies Act 2013 Your Directors confirm as under:
(i) In preparation of the annual accounts for the financial year ended March 31 2016the applicable accounting standards have been followed and there were no materialdepartures from prescribed accounting standards;
(ii) We have selected such accounting policies and applied them consistently and madejudgements and estimates that are reasonable and prudent so as to give a true and fairview of the state of affairs of the company at the end of the financial year and of theprofit and loss of the company for that period;
(iii) We have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the company and for preventing and detecting fraud and other irregularities;
(iv) We have prepared the annual accounts on a going concern basis;
(v) We have laid down internal financial controls which are adequate and are operatingeffectively; and
(vi) We have devised proper systems to ensure compliance with the provisions of allapplicable laws and such systems are adequate and operating effectively.
STOCK EXCHANGE LISTING
Presently the Equity Shares of the Company are listed on the BSE Limited (BSE) and theNational Stock Exchange of India Limited. The Company confirms that it has paid the AnnualListing Fees to the Bombay Stock Exchange for the year 2016-17.
AUDITORS & AUDITORS REPORT
M/s. P Murali & Co. Chartered Accountants Hyderabad statutory auditors of thecompany have conveyed their unwillingness to continue as Statutory Auditors of theCompany. They tendered their resignation vacating office from the conclusion of the 16thAnnual General Meeting of the Company held on September 7 2015.
Pursuant to the provisions of the Section 139 of the Companies Act 2013 and Rulesframed thereunder and as per the recommendation of the Audit Committee the Board ofDirectors at their meeting held on 24th July 2015 filled the casual vacancyby appointing M. Anandam & Co Chartered Accountants Hyderabad (Firm Regn. No000125S) with effect from the conclusion of the 16th Annual General Meetingheld on September 7 2015. Accordingly Shareholders appointed M. Anandam & CoChartered Accountants Hyderabad (Firm Regn. No 000125S) as the Statutory Auditors of theCompany to hold office from the conclusion of 16th Annual General Meeting heldon September 7 2015 until the conclusion of next AGM i.e. 17th Annual Generalmeeting of the Company to be held in the year 2016.
The existing term of M/s. M Anandam & Co as a statutory auditor of the Company isgoing to expire on the conclusion of the forthcoming Annual General Meeting (AGM). Keepingthe above stipulations in view and also the qualification and experience of the partnersof the Firm i.e. M/s. M Anandam & Co which is also in commensurate with the size andrequirements of the Company it is proposed to re-appoint M/s. M Anandam & Co asstatutory auditors of the Company at the forthcoming 17th annual generalmeeting to hold office upto the conclusion of the 22nd annual general meetingto be held in the year 2021 subject to recommendation by the Board and ratification bymembers in every annual general meeting till 22nd Annual General Meeting.
M/s. Anandam & Co. Chartered Accountants have furnished the Certificate of theireligibility for appointment in compliance with Section 141 of the Companies Act 2013. TheBoard recommends their appointment.
There are no qualifications or adverse remarks in the Statutory Auditors Report butthe following emphasis of Matter was made in it: Statutory Auditors drew attention to Note10 to the consolidated financial statements which relates to the qualified opinion in theIndependent Auditors Report of the Companys Wholly Owned Subsidiary"Cambridge Technology Investments Pte Ltd" Singapore regarding theunavailability of sufficient evidence to support the fair value of certain investmentsmade by such subsidiary.
The Directors are confident that such investments are in a startup stage and will beable to yield the results in due course. These investments are permanent in nature andhence temporary diminution if any in their value has not been provided for.
Statutory Auditors opinion was not modified in respect of the said matter.
M/s. B. Krishnaveni Company Secretary in Practice was appointed to conduct the auditof Secretarial and related records of the Company for the financial year 2015-16 pursuantto Section 204 of the Companies Act 2013 read with Companies (Appointment andremuneration of Managerial personnel) Rules 2014. The Secretarial Audit Report forfinancial year 2015-16 forms part of the Annual Report as Annexure 2 of theBoards Report.
There are no qualifications/observations or adverse remarks in the Secretarial AuditorsReport.
EXTRACT OF ANNUAL RETURN
In accordance with Section 134 (3)(a) of the Companies Act 2013 an extract of theAnnual Return in the prescribed format is appended as Annexure 3 of theBoards Report.
PARTICULARS OF EMPLOYEES
The information required under Section 197 (12) of the Act read with Rule 5(1) of TheCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 as amendedis annexed as Annexure 4 to this report.
The information required under Rule 5 (2) and (3) of The Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 is provided in the Annexure forming partof the Report.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS UNDER SECTION 186
Particulars of loans guarantees and investments if any made by the Company pursuantto Section 186 of the Companies Act 2013 forms part of the notes to the financialstatements provided in this Annual Report.
TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND
In terms of Section 125 of the Companies Act 2013 or Section 205C of the CompaniesAct 1956 read with the Investor Education and Protection Fund (Awareness and Protectionof Investor) Rules 2001 during the financial year ended 31 March 2016 the Company hascredited an aggregate amount of INR 84046/- to the Investor Education and ProtectionFund(IEPF).
Unclaimed or unpaid dividend relating to financial year 2007 - 08 amounting to INR84046/- which was due for transfer on 21st November 2015 to InvestorEducation and Protection Fund established by the Central Government was transferred on 28thDecember 2015.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO
A. CONSERVATION OF ENERGY: The operations of the Company involve low energyconsumption.
However adequate measures have been taken to conserve energy wherever practicable.
B. TECHNOLOGY ABSORPTION ADAPTATION AND INNOVATION: The Company continues to usethe latest technologies for improving the quality of its operations. Provision of state ofthe art communication facilities to all software development centers and total technologysolutions to its clients contribute to technology absorption and innovation.
C. FOREIGN EXCHANGE EARNINGS AND OUTGO:The foreign exchange earned in terms ofactual inflows during the year and the foreign exchange outgo during the year in terms ofactual outflows:
| || ||(in INRLakhs) |
|Particulars ||Current year ||Previous year |
| ||31.03.2016 ||31.03.2015 |
|Foreign exchange earnings ||2541.41 ||2298.50 |
|Foreign exchange outgo: ||Nil ||Nil |
|Travel related Expenses ||35.07 ||23.08 |
ADEQUACY OF INTERNAL FINANCIAL CONTROL SYSTEM
The Company has in place adequate internal financial controls commensurate with thesize and needs of the business. These controls ensures the orderly and efficient conductof its Business including adherence to the Companys policies identification ofareas of improvement safeguarding of its assets from unauthorized use the prevention anddetection of frauds and errors the accuracy and completeness of the accounting recordsand timely preparation of reliable financial statements and / or disclosures.
VIGIL MECHANISM / WHISTLE BLOWER POLICY
The requisite details as required by Section 177 of Companies Act 2013 and Regulation22 &34 (3) of SEBI (LODR) Regulations 2015 is provided in the Corporate GovernanceReport.
The Whistleblower policy is available on the website of the Company. Weblink:http://www.ctepl.com/pdfs/investors/Whistle_Blower_Policy.pdf
PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE
The Company has set up an Internal Complaints Committee for providing a redressalmechanism pertaining to sexual harassment against women employees at workplace. There wasno case of sexual harassment reported during the year under review.
CORPORATE SOCIAL RESPONSIBILITY
Your Company does not meet applicable requirements i.e.net worth of INR 500 Crore ormore or turnover of INR 1000 Crore or more or a net profit of INR 5 Crore as specifiedin section 135 of the Companies Act 2013 relating to Corporate Social Responsibility.Hence the Company did not constitute Corporate Social Responsibility Committee and did notadopt any Corporate Social Responsibility Policy.
The Company process is in place to ensure that all the Current and Future MaterialRisks of the Company are identified assessed/quantified and effective steps are taken tomitigate/ reduce the effects of the risks to ensure proper growth of the business.Shareholders are also requested to refer a separate section on Internal Control systemsand their adequacy which also deals with Risk Management in Management Discussion andAnalysis Report.
EMPLOYEE STOCK OPTION SCHEME
During the year the Company has adopted Employee Stock Option Scheme 2015 (ESOS 2015) pursuant to shareholders approval obtained through postal ballot process whichclosed on 29th May 2016. Amendments to the schemes viz. CTEL ESOP Scheme2011 CTEL ESOP Scheme 2008 CTEL ESOP 2006 were made vide Shareholders approval obtainedin 16th Annual General Meeting of the Company dated September 7 2015. The saidamended schemes can be viewed on the website of the Company - http://www.ctepl.com
The details of employee stock options as on 31st March 2016 are given as Annexure-5to this report.
Disclosures pursuant to the provisions of Securities and Exchange Board of India (ShareBased Employee Benefits) Regulations 2014 and as per Section 62(1)(b) of the CompaniesAct 2013 read with Rule 12(9) of the Companies (Share Capital and Debentures) Rules 2014for the financial year ended 31 March 2016 are available on website of the Company athttp://www.ctepl.com.
The Certificate from the Auditors of the Company under regulation 13 of SEBI (ShareBased Employee Benefits) Regulations 2014 stating compliance as per SEBI (Share BasedEmployee Benefits) Regulations 2014/SEBI (Employees Stock Option Scheme and EmployeesStock Purchase Scheme) Guidelines 1999 as amended from time to time and resolution ofthe company passed in the general meeting on implementation of scheme will be availablefor inspection by the members at the AGM.
Mr. Aashish Kalra Chairman & CEO and Mr. T V Siva Prasad CFO & CompanySecretary of the Company have provided Compliance Certificate (annexed as Annexure 6)to the Board in accordance with Regulation 17(8) read with Part B of Schedule II oftheSEBI (LODR) Regulations 2015 for the financial year ended 31 March 2016.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
The Company has formulated a Policy on dealing with Related Party Transactions. ThePolicy is disclosed on the website of the Company.
All transactions entered into with Related Parties as defined under the Companies Act2013 and Regulation 23 of the SEBI (LODR) Regulations2015 during the year were in theordinary course of business and on an arms length basis and do not attract theprovisions of Section 188 of the Companies Act 2013. However pursuant to theprovisionsof Regulation 23 (2) of the SEBI (LODR) Regulations 2015 prior approval of the AuditCommittee was sought for entering into the Related PartyTransactions.
During the year the Company had not enteredinto any contract / arrangement /transactions with Related Parties (except with its subsidiaries) which could be consideredas material in terms of Regulation 23 of the SEBI (LODR) Regulations 2015. Disclosures onrelated party transactions have been made in the notes to the Financial Statements.
The information relating to particulars of contracts or arrangements with relatedparties referred to in sub Section (1) of section 188 of the Companies Act 2013 in FormAOC-2 is annexed as Annexure 7 forming part of this Report.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT AND CORPORATE GOVERNANCE
The Management Discussion and Analysis Report and the Report on Corporate Governanceas required under Regulation 34(2) of SEBI (LODR) Regulations 2015 forms part of theAnnual Report.
Your Company is committed to maintain the prescribed standards of Corporate Governanceand has taken adequate steps to adhere to all the stipulations laid down Listing Agreementand SEBI (LODR) Regulations 2015. A separate report on Corporate Governance and aManagement Discussion and Analysis Report is being presented as part of the Annual Report.
Mrs. B. Krishnaveni a Company Secretary in Practice has certified that conditions ofCorporate Governance as stipulated under SEBI (LODR) Regulations 2015 have been compliedby your Company and her certificate is annexed as Annexure 8 to this Report.
APPRECIATIONS & ACKNOWLEDGEMENTS
Your Directors look to the future with confidence. Your Directors wish to express theirappreciation for the valuable support and co-operation received from customers investorslenders business associates bankers various statutory authorities and society at large.The Directors also thank the State Governments Government of India Governments ofvarious countries other Government Departments and Governmental Agencies. Your Directorsare especially indebted to employees of the Company and its subsidiaries at all levelswho through their dedication co-operation support and dynamic work have enabled thecompany to achieve rapid growth. Your Directors seek and look forward to the same supportduring the future years of growth.
| ||For or on behalf of the Board of Directors || |
| ||Sd/- ||Sd/- |
|Hyderabad ||Dharani Raghurama Swaroop ||VenkatMotaparthy |
|29th August 2016 ||Whole time Director ||Independent Director |