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CG-VAK Software & Exports Ltd.

BSE: 531489 Sector: IT
NSE: N.A. ISIN Code: INE084D01010
BSE LIVE 15:41 | 07 Dec 31.15 -1.85
(-5.61%)
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31.90

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35.50

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NSE LIVE 05:30 | 01 Jan Stock Is Not Traded.
OPEN 31.90
PREVIOUS CLOSE 33.00
VOLUME 3745
52-Week high 68.70
52-Week low 22.05
P/E 21.48
Mkt Cap.(Rs cr) 15.76
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 31.90
CLOSE 33.00
VOLUME 3745
52-Week high 68.70
52-Week low 22.05
P/E 21.48
Mkt Cap.(Rs cr) 15.76
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

CG-VAK Software & Exports Ltd. (CGVAKSOFTWARE) - Director Report

Company director report

To the Members

The Board of Directors of your Company take pleasure in presenting the 20thAnnual Report on the business and operations of your Company and the Audited FinancialStatements for the year ended 31st March 2015.

FINANCIAL RESULTS 2014-15

During the year under review your Company has achieved a turnover of Rs.1053.77 lakhsas against Rs.895.12 lakhs in the previous year. There is a net Profit ofRs.93.90 lakhs asagainst the net profit ofRs.65.06 lakhs in the previous year.

GLOBALREVENUE

The global revenues for the Company including the business done by the Wholly OwnedSubsidiary for the year under review was Rs.3906 lakhs as compared to Rs.3153 lakhs in theprevious year .

STATE OF AFFAIRS OF THE COMPANY

The contributions of business from various Geographical areas were:

North America contributed to 86% and Rest of the World 14% of business. Business fromOffshore Software Services during the year 2014-2015 was Rs.1053.77 lakhs as againstRs.895.12 lakhs in the previous year. The increase has been at 17.72% compared withprevious year.

FUTURE OUT LOOK

The global market for IT services is expected to expand and corporations areincreasingly using offshore service providers to meet their IT service needs. Thisincreases the addressable market for offshore software service providers like us. Thecompany has been growing positively in the offshore software services business and thismomentum is likely to continue this year.

Our client retention and client satisfaction levels have been growing steadily. We havereceived many client appreciations and significant amount of repeat business. In additionto North America our business and customer base from Australia Africa and Europe is alsoexpanding as planned.

Our Social Mobility and Cloud practice has been growing significantly and we expect agood growth in this offering. The company will continue its focus on the in OPD(Out-sourced Product development) market space where it has achieved significant success.Geographically the company is planning to strengthen its presence in the markets it isoperating.

We expect a positive growth this year and the Company should perform better in theensuing year 2015-16.

QUALITY

Your company has a strict quality assurance and control programs to ensure that highlevel of Quality service is delivered to the customers. Matured and proven qualitymanagement systems are in place based on the requirements of ISO 9001:2008 standards.

DIVIDEND

Your Directors recommended a dividend of Rs. 0.50 per equity share (i.e. 5% on eachequity share having Face value of Rs. 10 each) subject to the approval by theshareholders at the ensuing Annual General Meeting. The total dividend payout will be ofRs.30.42 lakhs inclusive of tax amount of Rs.5.14 lakhs. During the previous year ended2013-2014 your Company has paid a dividend of Rs.25.27 lakhs.

The dividend if approved by the shareholders will be paid to those members whosenames appear in the Register of Members as on the date of the Annual General Meeting

TRANSFER TO RESERVES

Your company propose to Transfer Rs.281693/- to the General Reserve.

MATERIAL CHANGES AND COMMITMENT IF ANY AFFECTING THE FINANCIAL POSITION OF THE COMPANYOCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THIS FINANCIAL STATEMENTS RELATEAND THE DATE OF THE REPORT

No material changes and commitments affecting the financial position of the Companyoccurred between the end of the financial year to which these financial statements relateand on the date of this report.

DEPOSITORY SYSTEM

The trading in the Equity Shares of your Company is under compulsory dematerializationmode. As on 31st March 2015 Equity Shares representing 89.70% of the equityshare capital are in dematerialized form. As the depository system offers numerousadvantages members are requested to take advantage of the same and avail of the facilityof dematerialization of the Company’s shares.

LISTING OF SHARES

The Equity Shares of your Company continue to remain listed with BSE Limited. Thelisting fees for the year 2015-16 have been paid to the Stock Exchange. The Shares of thecompanies are compulsorily tradable in dematerialized form.

INSURANCE

The assets of the Company are adequately insured against fire and such other risks asare considered necessary by the Management.

CONSOLIDATED FINANCIAL STATEMENTS

The Consolidated Financial Statements of the Company are prepared in accordance withthe applicable Accounting Standards forms a part of this Annual Report.

CORPORATE GOVERNANCE

Your Company is committed to maintain the highest standards of Corporate Governance.Company continues to be compliant with the requirements enshrined in clause 49 of theListing Agreement which relates to Corporate Governance.

Pursuant to SEBI Circular No.CIR/CFD/POLICY CELL/7/2014 dated 15th September2014 compliance with the provisions of Clause 49 is not mandatory for your Company sinceyour Company’s paid up capital is not exceeding Rs.10 crore and Net worth is notexceeding Rs.25 crore as on 31st March 2014.

A Report on Corporate Governance as stipulated under clause 49 of the Listing Agreementforms part of the Annual Report. A certificate from the Statutory Auditors of the Companyconfirming compliance with the conditions of Corporate Governance as stipulated underclause 49 forms part of this Report.

MANAGEMENT DISCUSSION AND ANALYSIS

The Management Discussion and Analysis Report for the year under review as stipulatedunder clause 49 of the Listing Agreement is presented in a separate section forming partof the Annual Report.

NUMBER OF MEETINGS OF THE BOARD

The board met Five times during the financial year the details of which are given inthe Corporate Governance Report that forms part of this Annual Report. The intervening gapbetween any two meetings was within the periods prescribed by the Companies Act 2013.

AUDIT COMMITTEE

The Audit committee comprises of Independent Directors namely Mr.S.Muthukumar(Chairman) Mr.S.Mohan and Mr.A.Sankar as other Members. All the recommendations made bythe Audit Committee were accepted by the Board.

CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION. FOREIGN EXCHANGE EARNINGS AND OUTGO

As per the requirement of Section 134 (3)(m) of the Companies Act 2013 read with Rule8 (3) of the Companies (Accounts) Rules 2014 the information regarding conservation ofenergy technology absorption and foreign exchange earnings and outgo are given below.

Particulars of Energy Conservation Technology Absorption and Foreign Exchange Earningsand Outgo as required under Companies (Accounts) Rules 2014:

A) CONSERVATION OF ENERGY

Your Company uses electrical energy for its equipment such as air-conditionerscomputer terminals lighting and utilities at work places. As an ongoing process thecompany continued to undertake various measures to conserve energy

B) TECHNOLOGY ABSORPTION

a) Research & Development

The nature of the business of software development involves inbuilt constant Researchand Development as a part of its process of manufacturing (development). The Company isdeveloping applications engines re-usable codes and libraries as a part of its R&Dactivities.

b) Technology Absorption

The Company has not absorbed technology from outside.

c) Information regarding imported technology (Imported during last three years)

Details of Technology imported Technology imported from Year of Import Status Implementation/absorption
NIL NA NA NA

 

C) FOREIGN EXCHANGE EARNING AND OUTGO (Rs.)
Foreign Exchange Earnings: 105496361
Foreign Exchange Outgo: 548856
Foreign Travel : 230060
Others: 318796

PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES

In terms of the provisions of Section 197(12) of Act read with rules 5(2) and 5(3) ofthe Companies (Appointment and Remuneration of Managerial personnel) Rules 2014 astatement showing the names and other particulars of the employees drawing remuneration inexcess of the limits set out in the said rules are provided in the Annual Report.

Disclosures pertaining to remuneration and other details as required under section197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 are provided in the Annexure -1.

STATEMENT CONCERNING DEVELOPMENT AND IMPLEMENTATION OF RISK MANAGEMENT POLICY OF THECOMPANY

The Company has adopted a Risk Management Policy for identifying and managing risk atthe strategic operational and tactical level. The Risk Management policy has been placedon the website of the Company. At present the Company has not identified any element ofrisk which may threaten the existence of the Company.

PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THE COMPANIESACT 2013

There were no loans and guarantees given or investments made by the Company underSection 186 of the Companies Act 2013 during the year under review.

EXPLANATION OR COMMENTS ON QUALIFICATIONS RESERVATIONS OR ADVERSE REMARKS ORDISCLAIMERS MADE BY THE AUDITORS AND THE PRACTICING COMPANY SECRETARY IN THEIR REPORTS

There were no qualifications reservations or adverse remarks made either by theAuditors or by the Practicing Company Secretary in their respective reports. YourDirectors have provided explanation in Annexure 2 for the matter of emphasis in theAuditor’s Report.

CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES.

All related party transactions that were entered into during the financial year were onan arm’s length basis and were in the ordinary course of business. There are nomaterially significant related party transactions made by the Company with PromotersDirectors Key Managerial Personnel or other designated persons which may have a potentialconflict with the interest of the Company at large. All Related Party Transactions areplaced before the Audit Committee as also in the Board for approval.

The disclosure on related party is annexed herewith as Annexure 3.

POLICY ON DIRECTOR’S APPOINTMENT AND REMUNERATION

The current Policy is to have an appropriate mix of executive and independent directorsto maintain the Independence of the Board and separate its functions of the governance andmanagement. As on 31st March 2015 the Board consists of 7 members Two ofwhom are Executive or Whole Time Directors One of whom is Non Executive Women Directorand Four are Independent Directors. The Board periodically evaluates the need for changein its composition and size.

The policy of the Company on Directors’ appointment and remuneration includingCriteria for determining Qualification positive attributes independence of a directorand other matters provided under sub-section(3) of Section 178 of the Companies Act2013adopted by the Board is appended as Annexure 4 to the Board’s Report. We affirm thatthe remuneration paid to the Directors is as per the terms laid out in the nomination andremuneration policy of the company.

WHOLLY OWNED SUBSIDIARY: CG-VAK SOFTWARE USA INC.

As on 31st March 2015 your Company has only one wholly owned subsidiary.Your Company’s Wholly Owned Subsidiary CG-VAK Software USA Inc. at USA has made aSales Turnover of US$ 4.65 Million during this year compared to the US$ 3.93 Millionduring the previous year.

During the year the Board of Directors reviewed the affairs of the wholly ownedsubsidiary. In accordance with Section 129(3) of the Companies Act 2013 we have preparedconsolidated financial statements of the Company and the wholly owned subsidiary whichforms part of the Annual Report. Further a statement containing the silent features ofthe financial statement of our wholly owned subsidiary in the prescribed format AOC-1 isappended as Annexure - 5 to the Board’s Report. The statement also provides thedetails of performance financial positions of the wholly owned subsidiary.

In accordance with Section 136 of the Companies Act 2013 the audited financialstatement including the Consolidated Financial Statements and related information of theCompany and the wholly owned subsidiary are available on our website. These documents willalso be available for inspection during the business hours at our Registered office.

EXTRACT OF ANNUAL RETURN

In accordance with section 134(3)(a) of the Companies Act2013an extract of annualreturn in the prescribed format is appended as Annexure - 6 to Board’s Report.

DIRECTOR’S RESPONSIBILITY STATEMENT AS REQUIRED UNDER SECTION 134(3)(C) OF THECOMPANIES ACT 2013

In accordance with the provisions of Section 134(3)(c) of the Companies Act 2013 theDirectors would like to state that:

i In preparation of annual accounts for the financial year ended 31st March2015 the applicable accounting standards have been followed.

ii The Directors have selected such accounting policies and applied them consistentlyand made judgements and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the company at the end of the financial year and ofthe profit and loss of the company for that period.

iii The directors have taken proper and sufficient care towards the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act 2013for safeguarding the assets of the company and for preventing and detecting fraud andother irregularities.

iv The directors have prepared the annual accounts on a going concern basis.

v The directors have laid down internal financial controls which are adequate and areoperating effectively

vi The directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and such systems are adequate and operating effectively

SIGNIFICANT AND MATERIAL ORDERS

There are no significant and material order passed by regulations or courts ortribunals impacting the going status and Company’s operations in future.

INSPECTION UNDER SECTION 209A OF THE COMPANIES ACT 1956

During the financial year (2012-13) inspection under Section 209A of the CompaniesAct 1956 was carried out by the office of Ministry of Corporate Affairs and the companyhas provided the reply for the clarifications sought by MCA.

SEBI - SECURITIES APPELLATE TRIBUNAL ORDER

During the financial year SEBI Securities Appellate Tribunal had upheld the orders ofthe SEBI Adjudicating Officer dated 17th December 2013 and imposed a penaltyof Rs.3 lakhs on the company for delayed disclosure/reporting of purchase of shares underthe SEBI PIT regulations. The Company had paid the penalty amount on 08th May2014.

PUBLIC DEPOSIT

During the year your Company has not accepted/renewed any Deposits. The Company hasrepaid all the Deposits on or before 31st March 2015.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

As per the provisions of the Companies Act 2013 Mr.G.Suresh (DIN 00600906) retirefrom office by rotation and being eligible offer himself for re-appointment at theensuing Annual General Meeting of the Company.

Brief particulars of the Director eligible for reappointment in terms of Clause 49 ofthe Listing Agreement are annexed to the Notice dated 29th May 2015 conveningthe 20th Annual General Meeting.

Pursuant to provisions of Section 203 of the Companies Act 2013 Mr.C.GanapathyExecutive Chairman Mr.G.Suresh Managing Director & CEO Mr.P.S.Subramanian ChiefFinancial Officer and Mr.Shainshad Aduvanni Company Secretary are the Key ManagerialPersonnel of the Company.

DECLARATION BY INDEPENDENT DIRECTORS

The company has received necessary declaration from each independent Director undersection 149(7) of the Companies Act 2013 that they meet the criteria of independence laiddown in Section 149(6) of the Companies Act 2013 and Clause 49 of the Listing Agreement.

BOARD EVALUATION

The evaluation framework for assessing the performance of Directors comprises of thefollowing key areas:

1. Attendance of Board Meeting and Board Committee Meetings

2. Quality of Contribution to Board deliberations

3. Strategic perspectives or inputs regarding future growth of Company and itsperformance

4. Providing perspectives and feedback going beyond information provided by themanagement

5. Commitment to shareholders and other stakeholder interests

The evaluation involves self-evaluation by the Board Members and subsequentlyassessment by the Board of Directors. A member of the Board will not participate in thediscussion of his/ her evaluation.

VIGIL MECHANISM/ WHISTLE BLOWER POLICY

The Company has adopted a Whistle Blower Policy as a mechanism for employees to reportto the management their concern about unethical behaviour actual or suspected fraud orviolation of the company's code of conduct and it affirms that no personnel have beendenied access to the Audit Committee. A copy of Whistle Blower Policy has been placed atour website at www.cgvak.com for reference.

AUDITORS

The Statutory Auditors of the Company M/s. S.Lakshminarayanan Associates CharteredAccountants Coimbatore retire at the conclusion of the ensuing Annual General Meeting.The Statutory Auditors have confirmed their eligibility and willingness to accept theoffice on re-appointment. The Board recommends their re-appointment for the next term.

SECRETARIAL AUDITOR

Mrs.Manimekala V Raj Practising Company Secretary was appointed to conduct thesecretarial audit of the company for financial year 2014-15 as required under Section 204of the Companies Act 2013 and Rules made there under. The secretarial audit report for FY2014-15 forms part of the Annual Report as Annexure 7 to the Board’s Report.

INTERNAL FINANCIAL CONTROLS

The Company has in place adequate internal financial controls with reference toFinancial Statements. Such controls were tested during the financial year and no materialweakness in the design or operation was observed.

DISCLOSURE AS REQUIRED UNDER SECTION 22 OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE(Prevention Prohibition and Redressal) Act 2013.

The Company has in this place an Anti Sexual Harassment Policy in line with therequirements of the Sexual Harassment of Women at Workplace (Prevention ProhibitionRedressal) Act 2013. The Internal Complaints Committee (ICC) has been setup to redressthe complaints received regarding Sexual Harassment. All employees are covered under thispolicy.

The following are the complaints received and disposed off during the financial year2014-15:

A. No.of complaints received: NIL

B. No.of complaints disposed off : NIL

ACKNOWLEDGEMENT

The Directors of your Company would like to take this opportunity to thank one and allassociated with it enabling it to scale greater heights and emerge as a recognizedsoftware solutions vendor in the industry. The faith and confidence shown on your Companyby banks global clients government authorities and shareholders has propelled ourenthusiasm and strengthen our determination to achieve our vision.

Finally your Directors would like to express their sincere thanks to the dedication andcommitted hard work of the employees working in India USA and at various client locationsto reach our corporate vision.

(By Order of the Board)
for CG-VAK SOFTWARE AND EXPORTS LIMITED
Place: Coimbatore C.Ganapathy
Date : 29th May 2015 Chairman
DIN 00735840

Annexure -1 to Director’s Report

Particulars of Remuneration of Directors and Employees pursuant to Section 197 (12) ofthe Companies Act 2013 read with the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014.

(i) The ratio of the remuneration of each director to the median remuneration of theemployees of the company for the financial year:

S. No. Name of the Director Ratio
1 Mr.C.Ganapathy Executive Chairman 1.71:1
2 Mr.G.Suresh Managing Director & CEO 17.13:1
3 Mr.M.Durairaj Independent Director 0.05:1
4 Mr.S.Muthukumar Independent Director 0.20:1
5 Mr.S.Mohan Independent Director 0.20:1
6 Mr.A.Sankar Independent Director 0.20:1
7 Mrs.S.Latha Non Executive Women Director 0.07:1

During the year the non-executive directors received only the sitting fees asremuneration.

(ii) The percentage increase in remuneration of each Director Chief Financial Officer(CFO) Chief Executive Officer (CEO) Company Secretary (CS) or Manager if any in thefinancial year:

S.No Name of the Director / CFO/ CEO/CS % Increase/(Decrease) in remuneration
1 Mr.C.Ganapathy Executive Chairman Not Applicable
2 Mr.G.Suresh Managing Director & CEO Not Applicable
3 Mr.M.Durairaj Independent Director Not Applicable
4 Mr.S.Muthukumar Independent Director Not Applicable
5 Mr.S.Mohan Independent Director Not Applicable
6 Mr.A.Sankar Independent Director Not Applicable
7 Mrs.S.Latha Non Executive Women Director Not Applicable
8 Mr.P.S.Subramanian CFO 31%
9 Mr.Shainshad Aduvanni CS 35%

 

(iii) The percentage increase in the median remuneration of the employees in the financial year 1.74%
(iv) Number of Permanent Employees on the rolls of the company (As on 31st March 2015) 182

(v) The explanation on the relationship between average increase in remuneration andcompany performance :

The performance of the company has improved when compared with previous years.

The increase granted to employees is in line with the normal increase granted bycompany from time to time and is intended to compensate for inflation and motivateemployees to perform at their best.

(vi) Comparison of the remuneration of the Key Managerial Personnel (KMP) against theperformance of the company

KMP's remuneration 2014-15 (Rs in Lakhs) % Increase/ (Decrease) in KMP’s remuneration (2014-15 against 2013-14) Sales 2014-15 (Rs in Lakhs) % Increase in sales Sales (2014-15 against 2013-14)
46.47 7.44% 1053.77 17.72%

(vii) Variations in the market capitalization of the company price earnings ratio asat the closing date of the current financial year and previous financial year andpercentage increase over decrease in the market quotations of the shares of the company incomparison to the rate at which the company came out with last public offer in case oflisted companies and in case of unlisted companies the variations in the net worth of thecompany as at the close of the current financial year and previous financial year:

Particulars As on 31.03.2014 As on 31.03.2015 Variations Percentage
Market Capitalization (Rs in Lakhs) 223.15 1173.92 950.77 426%
Price earnings ratio 1.29 1.86 0.57 44.19%

 

Market quotations of the shares as on 31.03.2015 (BSE) Rs.23.20/- per share of the face value Rs.10/- per share.
Market quotations of the shares when the company came out with last public offer Public Issue in December 1995 at a price of Rs.10/- per share of the face Value Rs.10/- per share.
Percentage increase/decrease over in the market quotations of the company The Company has come out with initial public offer in December 1995. An amount of Rs.10 invested in the said IPO would be worth Rs.23.20 as on 31st March 2015 indicating a compounded annual growth rate of 4 % which is excluding the dividend accrued thereon.

(viii) Average percentile increase already made in salaries of employees other thanmanagerial personnel in the last financial year and its comparison with the percentileincrease in the managerial remuneration and justification thereof and point out if thereare any exceptional circumstances for the increase in the managerial remuneration : Theaverage percentile increase granted to employees other than the managerial personnel is12.53%. The percentile increase granted to managerial personnel is 7.44%.

(ix) Comparison of the each remuneration of the Key Managerial Personnel against theperformance of the company:

KMP’s Name & Designation CTC (for 2014-15) (Rs in Lakhs) %Increase / (Decrease) in CTC (2014-15 against 2013-14) Sales (for 2014-15) (Rs in Lakhs) %Increase in Sales (2014-15 against 2013-14)
Mr.C.Ganapathy Executive Chairman 5.62 71%

1053.77

17.72%

Mr.G.Suresh Managing Director & CEO 31.16 3%
Mr.P.S.Subramanian Chief Financial Officer 6.90 31%
Mr.Shainshad Aduvanni Company Secretary 7.05 35%

 

(x) The key paramaters for any variable Component of remuneration availed by the directors The Directors are not eligible for any variable compensation as per the provisions of the Act
(xi) The ratio of the remuneration of the highest paid director to that of employees who are not directors but receive remuneration in excess of the highest paid Director during the year Since the remuneration of the highest paid employee is not in excess of the highest paid Director it is not applicable.

(xii) We affirm that the remuneration paid to Directors Key Managerial Personnel andemployees is as per the

remuneration policy approved by the Board of Directors of the company.

(xiii) Statement of employees receiving remuneration not less than 5 lakh rupees permonth : Not Applicable NOTE:

1. Mr.C.Ganapathy Mr.G.Suresh and Mrs.S.Latha are related to each other

2. Gross remuneration comprises salary commission allowance monetary values ofperquisites and the company’s contribution to the provident fund Gratuity Fund andSuperannuation Fund.

3. Net remuneration is exclusive of contributions to provident fund gratuity fundsuperannuation fund and tax deducted.

4. The CTC granted to Mr.C.Ganapathy includes medical reimbursement paid during thefinancial year 2014-15.

(By Order of the Board)
for CG-VAK SOFTWARE AND EXPORTS LIMITED
Place: Coimbatore C.Ganapathy
Date : 29th May 2015 Chairman
DIN 00735840

Annexure - 2 to Director’s Report

Explanation to the Auditors’ Report to the members of M/s. CG-VAK Software AndExports Limited

1 With reference to the auditors’ remark on non provision of gratuity claim (noteno.4.13 of the notes forming part of accounts) we wish to state that no provision hasbeen made as the terms of appointment of former Managing Director does not containprovisions for payment of gratuity; The Assistant Commissioner Labour has alreadydismissed the claim. The Complainant has preferred an appeal against the order of the AsstCommissioner and the Appeal is pending. The company has disputed the claim;

2 With reference to the auditors’ remark on non provision of gratuity claim (noteno.4.14 of the notes forming part of accounts) we wish to state that no provision hasbeen made as the Director concerned was a Non Executive Director and was not drawing anysalary and hence not eligible for gratuity. The company has disputed the claim and thesame is pending before the Labour Court;

3 With reference to the auditors’ remark on non provision of gratuity claim (noteno.4.15 of the notes forming part of accounts) we wish to state that no provision hasbeen made as the employee was not eligible for gratuity. The company has disputed theclaim and the same is pending before the Labour Court;

4 With reference to the Auditors’ remark on non-payment of fixed deposit (noteno.4.16 of the notes forming part of accounts) we wish to state that The Fixed Depositclaim is an appeal made by a Former Managing Director and his family members before theHigh Court Madras against the Company Law Board’s Order. The Company Law Board hadearlier passed an order that the claim was not maintainable and decided in favor ofCompany during June 2011. The Company has disputed the claim before the High CourtMadras.

5 With reference to the Auditors’ remark on the non-audit of wholly ownedsubsidiary (note no.4.17 of the notes forming part of accounts) we wish to state thatAudit of the subsidiary is not mandated as per the prevailing rules and regulations inUnited States of America where the subsidiary is registered.

(By Order of the Board)
for CG-VAK SOFTWARE AND EXPORTS LIMITED
Place: Coimbatore C.Ganapathy
Date : 29th May 2015 Chairman
DIN 00735840

Annexure -3 to Director's Report

Form No. AOC-2

[Pursuant to clause(h) of sub-section (3) of section 134 of the Companies Act 2013 andRule 8(2) of the Companies (Accounts) Rules 2014] Form of disclosure of Particulars ofcontracts/arrangements entered into by the company with the related parties referred to insub-section (1) of section 188 of the Companies Act 2013 including certain arms-lengthtransactions under third proviso thereto.

1. Details of contracts or arrangements or transactions not at arm’s basis:

S.No. Name of related party and nature of relationship Name of contracts / arrangements transactions Duration of contracts/ arrangements/ transactions Salient features of contracts/arrangements/ transactions including value if any Justifications for entering into such contracts/arrangements/ transactions Date(s) of approval by the Board Amount paid as advances if any Date on which special resolution was passed in General meeting u/s 188
(A) (B) (C) (D) (E) (F) (G) (H)
Not Applicable

2. Details of material contracts or arrangements or transactions at arm's-length basis.

S.No. Name of related party and nature of relationship Name of contracts / arrangements transactions Duration of contracts/ arrangements/ transactions Salient features of contracts/arrangements/ transactions including value if any Date(s) of approval by the Board / Audit committee Amount paid as advances if any
(A) (B) (C) (D) (E) (F)
1 S.Latha Non Executive Women Director Rental Agreement renewed on 30.06.2014 upto 31.05.2015 Renewed in every 11 months at Rs. 146410/month Leasing of Property & Renewed in every 11 months at Rs. 146410/month Rs.1100000
2 CG-VAK Software USA Inc (WOS) Loan to WOS During April 2014 to March 2015 Loan repaid during 2014-15 Rs.2136720 and interest receipts Rs.118982 These RPTs are in the ordinary course of business and are at arm's length basis and are reported to Audit Committee/ Board at their meetings. Not Applicable
3 CG-VAK Software USA Inc (WOS) Recruitment services rendered to WOS During April 2014 to March 2015 Rs.3493510 Not Applicable

 

(By Order of the Board)
for CG-VAK SOFTWARE AND EXPORTS LIMITED
Place: Coimbatore C.Ganapathy
Date : 29th May 2015 Chairman
DIN 00735840

Annexure - 4 to Director’s Report

Policy for Selection of Directors and determining Directors’ independence

1. Introduction

1.1 CG-VAK Software And Exports Ltd (CG-VAK) believes that an enlightened Boardconsciously creates a culture of leadership to provide a long term vision and policyapproach to improve the quality of governance.

Towards this CG-VAK ensures constitution of a Board of Directors with an appropriatecomposition size diversified expertise and experience and commitment to discharge theirresponsibilities and duties effectively.

1.2 CG-VAK recognizes the importance of Independent Directors in achieving theeffectives of the board. CG-VAK aims to have an optimum combination of ExecutiveNon-Executive and Independent Directors

2. Scope and Exclusion:

This policy sets out the guiding principles for the Nomination and Remunerationcommittee for identifying persons who are qualified to become Directors and to determinethe independence of Directors in case of their appointment as independent directors ofthe Company.

3. Terms and References:

In this policy the following terms shall have the following meanings:

3.1 Director means a director appointed to the Board of the Company.

3.2 Nominations and Remuneration Committee means the committee constituted byCG-VAK’s Board in accordance with the provisions of Section 178 of the Companies Act2013 and Clause 49 of the Equity Listing Agreement.

3.3 Independent Director means a director referred to in sub-section (6) of Section 149of the Companies Act 2013 and Clause 49(II)(B) of the Equity Listing Agreement.

4. Policy:

4.1. Qualification and criteria

4.1.1. The Nomination and Remuneration Committee and the Board shall review on anannual basis appropriate skills knowledge and experience required for the Board as awhole and its individual members. The objective is to have a Board with diverse backgroundand experience that are relevant for the Company’s global operations.

4.1.2. In evaluation the suitability of individual Board members the Nomination andRemuneration committee may take into account factors such as:

• General understanding of the Company’s business dynamics global businessand social perspective;

• Educational and professional background Standing in the profession;

• Personal and professional ethics integrity and values;

• Willingness to devote sufficient time and energy in carrying out their dutiesand responsibilities effectively.

4.1.3. The proposed appointee shall also fulfill the following requirements:

• Shall possess a Director Identification Number;

• Shall not be disqualified under the Companies Act 2013;

• Shall give his written consent to act as a Director;

• Shall endeavour to attend all Board meetings and wherever he is appointed as aCommittee Member the Committee Meetings;

• Shall abide by the Code of Conduct established by the Company for Directors andSenior Management Personnel;

• Shall disclose his concern or interest in any company or companies or bodiescorporate firms or others association of individuals including his shareholding at thefirst meeting of the Board in every financial year and thereafter whenever there is achange in the disclosures already made;

• Such other requirements as may be prescribed from time to time under theCompanies Act 2013 Equity Listing Agreements and other relevant laws.

4.1.4. The Nomination and Remuneration committee shall evaluate each individual withthe objective of having a group that best enables the success of the Company’sbusiness.

4.2 Criteria of Independence

4.2.1 The Nomination and Remuneration committee shall assess the independence ofDirectors at the time of appointment/re-appointment and the Board shall assess the sameannually. The Board shall re-assess determinations of independence when any new interestsor relationships are disclosed by a Director.

4.2.2. The criteria of independence as laid down in Companies Act 2013 and Clause 49of the Equity Listing Agreement is as below;

An independent director in relation to a company means a director other than amanaging director or a whole time director or a nominee director.

a) Who in the opinion of the Board is a person of integrity and possesses relevantexpertise and experience;

b) i) who is or was not a promoter of the company or its holding subsidiary orassociate company;

ii) who is not related to promoters or directors in the company its holdingsubsidiary or associate company;

c) who has or had no pecuniary relationship with the company its holding subsidiaryor associate company or their promoters or directors during the two immediatelypreceding financial years or during the current financial year;

d) none of whose relatives has or had pecuniary relationship or transaction with thecompany its holding subsidiary or associate company or their promoters or directorsamounting to two per cent or more of its gross turnover or total income or fifty lakhrupees or such higher amount as may be prescribed whichever is lower during the twoimmediately preceding financial years or during the current financial year;

e) who neither himself nor any of his relatives

i) holds or has held the position of a key managerial personnel or is or has beenemployee of the company or its holding subsidiary or associate company in any of thethree financial years immediately preceding the financial year in which he is proposed tobe appointed;

ii) is or has been an employee or proprietor or a partner in any of the threefinancial years immediately preceding the financial year in which he is proposed to beappointed of

A) a firm of auditors or company secretaries in practice or cost auditors of thecompany or its holding subsidiary or associate company; or

B) any legal or a consulting firm that has or had any transaction with the company itsholding subsidiary or associate company amounting to ten per cent or more of the grossturnover of such firm;

iii) holds together with his relatives two per cent or more of the total voting powerof the company; or

iv) is a Chief Executive or Director by whatever name called of any non-profitorganization that receives twenty-five per cent or more of its receipts from the Companyany of its promoters directors or its holding subsidiary or associate company or thatholds two per cent or more of the total voting power of the company; or

f) Shall possess such other qualifications as may be prescribed.

4.2.3. The Independent Directors shall abide by the Code for Independent Directors asspecified in Schedule IV to the Companies Act 2013.

4.3. Other directorships / committee memberships

4.3.1. The Board members are expected to have adequate time and expertise andexperience to contribute to effective Board performance.

Accordingly members should voluntarily limit their directorships in other listedpublic limited companies in such a way that it does not interfere with their role asdirectors of the Company. The Nomination and Remuneration Committees shall take intoaccount the nature of and the time involved in a Director’s service on other Boardsin evaluating the suitability of the individual Director and making its recommendations tothe Board.

4.3.2. A Director shall not serve as Director in more than 20 Companies of which notmore the 10 shall be Public Limited Companies.

4.3.3. A Director shall not serve as an Independent Director in more than 7 ListedCompanies and not more than 3 Listed Companies in case he is serving as a Whole-timeDirector in any Listed Company.

4.3.4. A Director shall not be a member in more than 10 Committees or act as Chairmanof more than 5 Committees across all companies in which he holds directorships.

For the purpose of considering the limit of the Committees Audit Committee andStakeholders’ Relationship Committee of all Public Limited Companies whether listedor not shall be included and all other companies including Private Limited CompaniesForeign Companies and Companies under Section 8 of the Companies Act 2013 shall beexcluded.

POLICY ON REMUNERATION OBJECTIVES OF THE POLICY

I. The Company’s Remuneration Policy is aimed to attract and retain the besttalents by ensuring a fair transparent and equitable remuneration to employees andDirectors based inter alia on individual job requirements responsibilities commensuratequalifications of individuals experience the performance of the Company and theperformance / contribution of the individual employee. The policy enables a framework thatallows for fair rewards for the achievement of key deliverables in line with industry andGroup practice.

II. The Company follows a compensation mix of fixed and performance linked variablepay. Individual performance pay is measured through a structured and transparent appraisalprocess.

Managing Director (MD) / Executive Director (ED) / Whole-time Director (WTD)

III. When determining the remuneration for the MD / ED / WTD the Company will take intoaccount the market sector that it operates business performance and the practices inother comparable Companies including global companies when appropriate.

IV. The Company pays remuneration by way of Salary Perquisites and performance linkedvariable pay to its MD / ED / WTD within the overall ceiling limits approved by theShareholders of the Company subject to the provisions of the Companies Act 2013. TheNomination & Remuneration Committee recommends the performance linked variable paypayable to the MD / ED/ WTD based on the profits for the financial year and as per thepolicy of the Group based on the performance of the Company as well as that of the MD /ED / WTD and as prescribed under the Companies Act and within overall limits approved bythe shareholders. The Board of Directors approves the variable pay payable for the yearbased on the recommendations of the Nomination & Remuneration Committee.

V. The Company also extends other perquisites as is applicable to the Senior ManagementPersonnel of the Company and as per the Policy of the Company as may be approved by theNomination & Remuneration Committee / Board of Directors from time to time.

Non-Executive & Independent Directors

The Company currently pays sitting fees for attending the meetings of the Board /Committees thereof which includes Audit Committee Nomination & RemunerationCommittee and Stakeholder’s Relationship Committee. Any change in this fee would haveto be approved by the Board of Directors within the limits and provisions of the CompaniesAct 2013. The Company also reimburses the out-of-pocket expenses incurred by theDirectors for attending the meetings as and when applicable.

Key Managerial Personnel (KMP) & Senior Management Personnel (SMP)

KMP as defined in the Companies Act 2013 includes the Chief Financial Officer and theCompany Secretary. The Senior Management Personnel are all those Executives who directlyreport to the MD / ED / WTD i.e. one level below the Board of Directors.

The Compensation package to the KMPs and the SMPs will comprise:

• Salary and applicable allowances. The annual salary revision for members of theKMPs and SMPs will be subject to approval by the Nomination and Remuneration Committee.

• A performance linked variable pay based on the performance of the Company andthe concerned individual.

• Applicable Perquisites based on HR policies.

• Pension and other retiral benefits in accordance with the relevant statutes.

Any other perquisite in accordance with the Policy of the Company and as approved bythe Nomination & Remuneration Committee / Board of Directors from time to time.

Annexure - 5 to Director’s Report

Form AOC -1

Pursuant to section 129(3) of the Companies Act 2013 read with Rule 5 of the Companies(Accounts) Rules 2014. Statement containing salient features of the financial statementof the subsidiary

(in Rs.)

1 Name of the Subsidiary

CG-VAK Software USA Inc.

2 Reporting Period

31st March 2015

3 Reporting Currency

USD

4 Exchange Rate*

62.00

5 Share Capital

35480000

6 Reserves and Surplus

56526931

7 Total Assets

123935049

8 Total Liabilities

123935049

9 Details of Investments

Not Applicable

10 Turnover and Other Income

285365961

11 Profit / (Loss) Before Taxation

8756253

12 Provision for Taxation

2422362

13 Profit / (Loss) After Taxation 6333891
14 Proposed Dividend NIL
15 Percentage of Holding 100%

* The Financial Statements of subsidiary whose reporting currency other than INR areconverted into India Rupees on the basis of appropriate exchange rate. The financialstatements of the Subsidiary which are reported in US Dollars are converted into Indianrupees at Rs.62.00/USD (Rs.60.75/USD for the previous year ended 31- March 2014) andtranslated on appropriate basis for monetary non-monetary income and expenditure.

For and on Behalf of the Board of Directors

G.Suresh C.Ganapathy S.Muthukumar
Managing Director Executive Chairman Director
Place : Coimbatore P.S. Subramanian Shainshad Aduvanni
Date : 29th May 2015 Chief Financial Officer Company Secretary

Annexure - 6 to Director’s Report

Form No. MGT -9 EXTRACT OF ANNUAL RETURN

As on the financial year ended 31st March 2015 [Pursuant to section 92(3)of the Companies Act 2013 and rule 12(1) of The Companies (Management and Administration)Rules 2014]

I. REGISTRATION AND OTHER DETAILS:

i) CIN: L30009TZ1994PLC005568

ii) Registration Date: 06th December 1994

iii) Name of the Company : CG-VAK SOFTWARE AND EXPORTS LIMITED

iv) Category/Sub-Category of the Company: Company Limited by Shares/ IndianNon-Govt.Company

v) Address of the Registered Office and Contact Details:

No. 171 Mettupalayam Road Coimbatore - 641 043

Ph: 0422-2434491/92/93

Fax: 0422-2440679

Email: investorservices@cgvak.com

vi) Whether Listed Company: Yes

vii) Name Address and Contact details of Registrars and Transfer Agents if any:

M/s. S.K.D.C. Consultants Limited

Kanapathy Towers 3rd Floor 1391/A-1 Sathy Road Ganapathy Coimbatore - 641 006

Phone: 0422 - 6549995 2539835 2539836

Fax : 0422 - 2539837

E-mail: info@skdc-consultants.com

II. PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY:

All the business activities contributing 10% or more of the total turnover of theCompany

S.No. Name and Description of main products/services NIC Code of the product/service % to total turnover of the Company
1. Computer Programming Consultancy and Related Services 62020 100%

III. PARTICULARS OF HOLDING SUBSIDIARY AND ASSOCIATE COMPANIES:

S.No. Name address & CIN / GLN of the Company % of Shares held Applicable Section
1. CG-VAK Software USA Inc 100% 2(87)

IV SHARE HOLDING PATTERN (EQUITY SHARE CAPITAL BREAKUP AS PERCENTAGE OF

TOTAL EQUITY)

(i) Category-wise Shareholding :

Category of Shareholders

No.of Shares held at the beginning of the year

No.of Shares held at the end of the year

% of change during the year

Demat Physical Total %of Total Shares Demat Physical Total %of Total Shares
(A) Promoters
(1) Indian
a) Individuals/ Hindu Undivided Family 1891899 0 1891899 37.389 2066922 0 2066922 40.848 3.442
b) Central Government/ State Government(s) 0 0 0 0.000 0 0 0 0.000 0.000
c) Bodies Corporate 0 0 0 0.000 0 0 0 0.000 0.000
d) Financial Institutions/ Banks 0 0 0 0.000 0 0 0 0.000 0.000
e)Any Others(Specify) 0 0 0 0.000 0 0 0 0.000 0.000
TRUSTS 0 0 0 0.000 0 0 0 0.000 0.000
Sub Total(A)(1) 1891899 0 1891899 37.389 2066922 0 2066922 40.848 3.442
(2) Foreign
a) Individuals (Non-Residents Individuals/
Foreign Individuals) 0 0 0 0.000 0 0 0 0.000 0.000
b) Bodies Corporate 0 0 0 0.000 0 0 0 0.000 0.000
c) Institutions 0 0 0 0.000 0 0 0 0.000 0.000
d) Qualified Foreign Investor 0 0 0 0.000 0 0 0 0.000 0.000
e) Any Others(Specify) 0 0 0 0.000 0 0 0 0.000 0.000
Sub Total(A)(2) 0 0 0 0.000 0 0 0 0.000 0.000
Total Shareholding of Promoter and Promoter Group (A)= (A)(1)+(A)(2) 1891899 0 1891899 37.389 2066922 0 2066922 40.848 3.442
(B) Public shareholding
(1) Institutions
a) Mutual Funds/ UTI
b) Financial Institutions / Banks
c) Central Government/ State Government(s) - - - - - - - - -
d) Venture Capital Funds

-

- - -

-

- - -

-

e) Insurance Companies
f) Foreign Institutional Investors
g) Foreign Venture Capital Investors

-

-

-

-

-

-

-

-

-

h) Qualified Foreign Investor
i) Any Other (specify)
FOREIGN PORTFOLIO INV ( CORP CAT )
Sub-Total (B)(1) 0 0 0 0.000 0 0 0 0.000 0.000
(2) Non-institutions
a) Bodies Corporate
i) Indian 58518 4400 62918 1.243 56356 4400 60756 1.201 (0.042)
ii) Overseas
b) Individuals
i) Individual shareholders holding nominal share capital up to Rs 1 lakh 949635 430820 1380455 27.284 839537 422820 1261507 24.931 (2.336)
ii) Individual shareholders holding nominal share capital in excess of Rs. 1 lakh. 1344995 46800 1391795 27.506 1152158 33900 1186058 23.440 (4.066)
c) Others (specify)
DIRECTORS & THEIR RELATIVES 217535 49600 267135 5.279 342075 60000 402075 7.946 2.667
NON RESIDENT INDIANS 12723 0 12723 0.251 13750 0 13750 0.272 0.021
CLEARING MEMBERS 7257 0 7257 0.143 23070 0 23070 0.456 0.313
HINDU UNDIVIDED FAMILIES 45818 0 45818 0.905 45862 0 45862 0.906 0.001
Sub-Total (B)(2) 2636481 531620 3168101 62.611 2472808 521120 2993078 59.152 -3.442
Total Public Shareholding (B)= (B)(1)+(B)(2) 2636481 531620 3168101 62.611 2472808 521120 2993078 59.152 -3.442
C.Shares held by Custodian for GDRs & ADRs
GRAND TOTAL (A)+(B)+(C) 4528380 531620 5060000 100.000 4539730 521120 5060000 100.000 0.000

(ii) Shareholding of Promoters :

S.No. Shareholders Name

No.of Shares held at the beginning of the year

No.of Shares held at the end of the year

% of change during the year

No.of shares % of total shares of the company % of Shares pledged / encumbered to total shares No.of shares % of total shares of the company % of Shares pledged / encumbered to total shares
1 S LATHA 355686 7.029 0.000 515402 10.186 0.000 3.140
2 G SURESH 936753 18.513 0.000 952060 18.815 0.000 0.302
3 G SARASWATHY 193110 3.816 0.000 193110 3.816 0.000 0.000
4 GANAPATHY C 406350 8.031 0.000 406350 8.031 0.000 0.000
TOTAL 1891899 37.389 0.000 2066922 40.848 0.000 3.442

(iii) Change in Promoters’ Shareholding:

S.No. Name

Date

Shareholding at the beginning of the year

Cumulative Shareholding during the year

No.of shares % of total shares of the company No.of shares % of total shares of the company
1 G.Saraswathy At the Beginning of the year 01.04.2014 01/04/2014 193110 3.82 193110 3.82
Date wise increase/decrease in the Shareholding during the year specifying the reasons for the increase
At the end of the year 31/03/2015 193110 3.82 193110 3.82
2 C.Ganapathy At the Beginning of the year 01.04.2014 01/04/2014 406350 8.03 406350 8.03
Date wise increase/decrease in the Shareholding during the year specifying the reasons for the increase -

-

-

-

-

At the end of the year 31/03/2015 406350 8.03 406350 8.03
3 G.Suresh At the Beginning of the year 01.04.2014 01/04/2014 936753 18.51 936753 18.51
Date wise increase/decrease in the Shareholding during the year specifying the reasons for the increase - Purchase 09/05/2014 100 0.00 936853 18.51
16/05/2014 200 0.00 937053 18.52
23/05/2014 430 0 01 937483 18.53
06/06/2014 1076 0.02 938559 18.55
13/06/2014 1556 0.03 940115 18.58
20/06/2014 6245 0.12 946360 18.70
30/06/2014 3100 0.06 949460 18.76
04/07/2014 2600 0.05 952060 18.82
At the end of the year 31/03/2015 952060 18.82 952060 18.82
4 S.Latha At the Beginning of the year 01.04.2014 01/04/2014 355686 7.03 355686 7.03
Date wise increase/decrease in the Shareholding during the year specifying the reasons for the increase - Purchase 11/07/2014 1100 0.02 356786 7.05
18/07/2014 3312 0.07 360098 7.12
25/07/2014 6993 0.14 367091 7.25
01/08/2014 200 0.00 367291 7.26
08/08/2014 2105 0.04 369396 7.30
14/08/2014 4898 0.10 374294 7.40
22/08/2014 13000 0 26 387294 7.65
29/08/2014 1790 0.04 389084 7.69
05/09/2014 3939 0.08 393023 7.77
19/09/2014 3659 0.07 396682 7.84
30/09/2014 900 0.02 397582 7.86
10/10/2014 2723 0.05 400305 7.91
17/10/2014 751 0.01 401056 7.93
14/11/2014 2402 0.05 403458 7.97
09/01/2015 1700 0.03 405158 8.01
16/01/2015 4047 0.08 409205 8.09
23/01/2015 1975 0.04 411180 8.13
30/01/2015 3187 0.06 414367 8.19
06/02/2015 5300 0.10 419667 8.29
20/02/2015 800 0.02 420467 8.31
27/02/2015 3000 0.06 423467 8.37
06/03/2015 3247 0.06 426714 8.43
13/03/2015 5750 0.11 432464 8.55
20/03/2015 21070 0.42 453534 8.96
27/03/2015 41960 0.83 495494 9.79
31/03/2015 19908 0.39 515402 10.19
At the end of the year 31/03/2015 515402 10.19 515402 10.19

(iv) Shareholding of top ten shareholders (other than Directors Promoters and holdersof GDRs and ADRs):

S.No. Name

Date

Shareholding at the beginning of the year

Cumulative Shareholding during the year

No.of shares % of total shares of the company No.of shares % of total shares of the company
1 K.V. Kamaraj At the Beginning of the year 01.04.2014 01/04/2014 521674 10.31 521674 10.31
Date wise increase/decrease in the Shareholding during the year specifying the reasons for the increase
At the end of the year 31/03/2015 521674 10.31 521674 10.31
2 C. Loganathan At the Beginning of the year 01.04.2014 01/04/2014 201735 3.99 201735 3.99
Date wise increase/decrease in the Shareholding during the year specifying the reasons for the increase/decrease-sale 14/11/2014 (130) 0.00 201605 3.98
21/11/2014 (410) -0.01 201195 3.98
31/12/2014 (10) 0.00 201185 3.98
09/01/2015 (300) -0.01 200885 3.97
23/01/2015 (1000) -0 02 199885 3.95
30/01/2015 (3100) -0.06 196785 3.89
06/02/2015 (1667) -0.03 195118 3.86
13/02/2015 (3200) -0 06 191918 3.79
20/02/2015 (400) -0.01 191518 3.78
27/02/2015 (200) 0.00 191318 3.78
06/03/2015 (200) 0 00 191118 3.78
13/03/2015 (200) 0.00 190918 3.77
At the end of the year 31/03/2015 190918 3.77 190918 3.77
3 S Sankar At the Beginning of the year 01.04.2014 01/04/2014 133336 2.64 133336 2.64
Date wise increase/decrease in the Shareholding during the year specifying the reasons for the increase/decrease-sale 20/03/2015 (15625) -0.31 117711 2.33
27/03/2015 (33350) -0.66 84361 1.67
31/03/2015 (14550) -0.29 69811 1.38
At the end of the year 31/03/2015 69811 1.38 69811 1.38
4 K. Jalajadevi At the Beginning of the year 01.04.2014 01/04/2014 101607 2.01 101607 2.01
Date wise increase/decrease in the Shareholding during the year specifying the reasons for the increase
At the end of the year 31/03/2015 101607 2.01 101607 2.01
5 Nataraj Kumar N At the Beginning of the year 01.04.2014 01/04/2014 77550 1.53 77550 1.53
Date wise increase/decrease in the Shareholding during the year specifying the reasons for the increase
At the end of the year 31/03/2015 77550 1.53 77550 1.53
6 S Dhanabakkiam At the Beginning of the year 01.04.2014 01/04/2014 63046 1.25 63046 1.25
Date wise increase/decrease in the Shareholding during the year specifying the reasons for the increase
At the end of the year 31/03/2015 63046 1.25 63046 1.25
7 M.Thanigachalam At the Beginning of the year 01.04.2014 01/04/2014 56000 1.11 56000 1.11
Date wise increase/decrease in the Shareholding during the year specifying the reasons for the increase
At the end of the year 20/03/2015 56000 1.11 56000 1.11
8 Narayanasamy R At the Beginning of the year 01.04.2014 01/04/2014 52500 1.04 52500 1.04
Date wise increase/decrease in the Shareholding during the year specifying the reasons for the increase
At the end of the year 31/03/2015 52500 1.04 52500 1.04
9 Ramakrishna Prabhu N At the Beginning of the year 01.04.2014 01/04/2014 43600 0.86 43600 0.86
Date wise increase/decrease in the Shareholding during the year specifying the reasons for the increase
At the end of the year 31/03/2015 43600 0.86 43600 0.86
10 Chandrakant At the Beginning of the year 01.04.2014 01/04/2014 39500 0.78 39500 0.78
Kirtilal Parikh Date wise increase/decrease in the Shareholding during the year specifying the reasons for the increase
At the end of the year 31/03/2015 39500 0.78 39500 0.78

(v) Shareholding of Directors and Key Managerial Personnel :

S.No. Name

Date

Shareholding at the beginning of the year

Cumulative Shareholding during the year

No.of shares % of total shares of the company No.of shares % of total shares of the company
1 C.Ganapathy At the Beginning of the year 01.04.2014 01/04/2014 406350 8.03 406350 8.03
Date wise increase/decrease in the Shareholding during the year specifying the reasons for the increase -

-

-

-

-

At the end of the year 31/03/2015 406350 8.03 406350 8.03
2 G.Suresh At the Beginning of the year 01.04.2014 01/04/2014 936753 18.51 936753 18.51
Date wise increase/decrease in the Shareholding during the year specifying the reasons for the increase - Purchase 09/05/2014 100 0.00 936853 18.51
16/05/2014 200 0.00 937053 18.52
23/05/2014 430 0.01 937483 18.53
06/06/2014 1076 0.02 938559 18.55
13/06/2014 1556 0.03 940115 18.58
20/06/2014 6245 0.12 946360 18.70
30/06/2014 3100 0.06 949460 18.76
04/07/2014 2600 0 05 952060 18.82
At the end of the year 31/03/2015 952060 18.82 952060 18.82
3 S.Latha At the Beginning of the year 01.04.2014 01/04/2014 355686 7.03 355686 7.03
Date wise increase/decrease in the Shareholding during the year specifying the reasons for the increase - Purchase 11/07/2014 1100 0.02 356786 7.05
18/07/2014 3312 0.07 360098 7.12
25/07/2014 6993 0.14 367091 7.25
01/08/2014 200 0.00 367291 7.26
08/08/2014 2105 0.04 369396 7.30
14/08/2014 4898 0.10 374294 7.40
22/08/2014 13000 0.26 387294 7.65
29/08/2014 1790 0.04 389084 7.69
05/09/2014 3939 0 08 393023 7.77
19/09/2014 3659 0.07 396682 7.84
30/09/2014 900 0.02 397582 7.86
10/10/2014 2723 0 05 400305 7.91
17/10/2014 751 0.01 401056 7.93
14/11/2014 2402 0.05 403458 7.97
09/01/2015 1700 0.03 405158 8.01
16/01/2015 4047 0.08 409205 8.09
23/01/2015 1975 0.04 411180 8.13
30/01/2015 3187 0.06 414367 8.19
06/02/2015 5300 0.10 419667 8.29
20/02/2015 800 0.02 420467 8.31
27/02/2015 3000 0.06 423467 8.37
06/03/2015 3247 0.06 426714 8.43
13/03/2015 5750 0.11 432464 8.55
20/03/2015 21070 0.42 453534 8.96
27/03/2015 41960 0.83 495494 9.79
31/03/2015 19908 0.39 515402 10.19
At the end of the year 31/03/2015 515402 10.19 515402 10.19
4 S.Muthukumar At the Beginning of the year 01.04.2014 01/04/2014 2500 0.05 2500 0.05
Date wise increase/decrease in the Shareholding during the year specifying the reasons for the increase
At the end of the year 31/03/2015 2500 0.05 2500 0.05
5 S.Mohan At the Beginning of the year 01.04.2014 01/04/2014 1000 0.02 1000 0.02
Date wise increase/decrease in the Shareholding during the year specifying the reasons for the increase
At the end of the year 31/03/2015 1000 0.02 1000 0.02
6 M.Durairaj At the Beginning of the year 01.04.2014 01/04/2014 10000 0.20 10000 0.20
Date wise increase/decrease in the Shareholding during the year specifying the reasons for the increase
At the end of the year 31/03/2015 10000 0.20 10000 0.20
7 A.Sankar At the Beginning of the year 01.04.2014 01/04/2014 - - - -
Date wise increase/decrease in the Shareholding during the year specifying the reasons for the increase
At the end of the year 31/03/2015
8 P.S.Subramanian At the Beginning of the year 01.04.2014 01/04/2014 2000 0.04 2000 0.04
Date wise increase/decrease in the Shareholding during the year specifying the reasons for the increase
At the end of the year 31/03/2015 2000 0.04 2000 0.04
9 Shainshad Aduvanni At the Beginning of the year 01.04.2014 01/04/2014 100 0.00 100 0.00
Date wise increase/decrease in the Shareholding during the year specifying the reasons for the increase
At the end of the year 31/03/2015 100 0.00 100 0.00

V. INDEBTEDNESS

Indebtedness of the company including interest outstanding/accrued but not due forpayment

(Rs in Lakhs)
Particulars Secured Loans excluding deposits Unsecured Loans Deposit Total Indebtedness
Indebtedness at the beginning of the financial year 11.66 1.55 26.86 40.07
i) Principal Amount 11.50 1.50 26.03 39.03
ii) Interest due but not paid - - - -
iii) Interest accrued but not due 0.16 0.05 0.83 1.04
Total (i+ii+iii) 11.66 1.55 26.86 40.07
Change in Indebtedness during the financial year
Addition - 17.81 - 17.81
Reduction 6.08 5.52 26.86 38.46
Net Change (6.08) 12.29 (26.86) (20.65)
Indebtedness at the end of the financial year 5.58 13.84 0 19.42
i) Principal Amount 5.50 12.24 0 17.74
ii) Interest due but not paid

-

-

-

-

iii) Interest accrued but not due 0.08 1.60 0 1.68
Total (i+ii+iii) 5.58 13.84 0 19.42

VI REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL

A. Remuneration to Managing Director Whole-time Directors and/or Manager

(Rs in Lakhs)
Sl.No. Particulars of Remuneration

Name of MD/WTD/Manager

Total
G.Suresh (Managing Director and CEO) C.Ganapathy (ExecutiveChairman) Amount
1. Gross Salary
(a) Salary as per provisions contained in section 17(1) of the Income Tax Act 1961 30.00 3.00 33.00
(b) Value of perquisite u/s 17(2) of the Income Tax Act 1961 1.16 2.62 3.78
(c) Profits in lieu of salary u/s 17(3) of Income Tax Act 1961

-

-

-

2. Stock Option - - -
3. Sweat Equity - - -
4. Commission as percentage of profit - - -
Others specify - - -
5. Others (Retiral Benefits) - - -
TOTAL (A) 31.16 5.62 36.78
Ceiling as per the Act

As per Schedule V of the Companies Act 2013

B. Remuneration to other directors

Sl.No. Particulars of Remuneration

Name of Directors

Total
M. Durairaj S. Muthukumar S. Mohan A. Sankar Amount
1 Independent Directors
(a) Fee for attending board committee meetings 8000 35000 35000 35000 113000
(b) Commission - - - - -
(c) others-( specify) - - - - -
Total(1) 8000 35000 35000 35000 113000
2 Other Non-Executive Directors S. Latha
(a) Fee for attending board committee meetings 12000 12000
(b) Commission - -
(c) others-( specify) - -
Total(2) 12000 12000
Total (B)=(1+2) 125000
Total Managerial Remuneration(A+B)

Rs.38.03 lakhs

Over all Ceiling as per the Act

As per Rule 4 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014

C.Remuneration to KMP other than MDWTD/Manager

(Rs in Lakhs)
Sl.No. Particulars of Remuneration

Name of the Key Managerial Personnel

Total
P.S.Subramanian (Chief Financial Officer) Shainshad Aduvanni (Company Secretary) Amount
1. Gross Salary
(a) Salary as per provisions contained in section 17(1) of the Income Tax Act 1961 6.60 6.87 13.47
(b) Value of perquisite u/s 17(2) of the Income Tax Act 1961 0.30 0.18 0.48
(c) Profits in lieu of salary u/s 17(3) of Income Tax Act 1961

-

-

-

2. Stock Option - - -
3. Sweat Equity - - -
4. Commission as percentage of profit - - -
Others specify - - -
5. Others (Retiral Benefits) - - -
TOTAL 6.90 7.05 13.95

VII. PENALTIES/PUNISHMENT/COMPOUNDING OF OFFENCES

There are no penalties/punishment/compounding of offences against CG-VAK Software AndExports Limited and its Directors and Officers under the Companies Act 2013 for the yearended on 31st March 2015

(By Order of the Board)
for CG-VAK SOFTWARE AND EXPORTS LIMITED
Place: Coimbatore C.Ganapathy
Date : 29th May 2015 Chairman
DIN 00735840

Annexure - 7 to Director’s Report

Form No. MR-3

SECRETARIAL AUDIT REPORT FOR THE FINANCIAL YEAR ENDED 31st MARCH 2015

[Pursuant to section 204(1) of the Companies Act 2013 and rule No.9 of the Companies(Appointment and Remuneration of

Managerial Personnel) Rules 2014]

To

The Members

CG-Vak Software & Exports Limited

(CIN L30009TZ1994PLC005568)

171 Mettupalayam Road

Coimbatore - 641043.

I have conducted the secretarial audit of the compliance of applicable statutoryprovisions and the adherence to good corporate practices by CG-Vak Software & ExportsLimited (hereinafter called the company). Secretarial Audit was conducted in a manner thatprovided me a reasonable basis for evaluating the corporate conducts /statutorycompliances and expressing my opinion thereon.

Based on my verification of the Company’s books papers minute books forms andreturns filed and other records maintained by the Company and also the informationprovided by the Company its officers agents and authorized representatives during theconduct of secretarial audit I hereby report that in my opinion the company has duringthe audit period covering the financial year ended on 31st March 2015 compliedwith the statutory provisions listed hereunder and also that the Company has proper Board-processes and compliance-mechanism in place to the extent in the manner and subject tothe reporting made hereinafter:

I have examined the books papers minute books forms and returns filed and otherrecords maintained by the Company for the financial year ended on 31st March2015 according to the provisions of:

(i) The Companies Act 2013 (the Act) and the rules made there under;

(ii) The Securities Contracts (Regulation) Act 1956 (‘SCRA’) and the rulesmade there under;

(iii) The Depositories Act 1996 and the Regulations and Bye-laws framed there under;

(iv) Foreign Exchange Management Act 1999 and the rules and regulations madethereunder to the extent of Foreign Direct Investment and Overseas Direct Investment;

(v) The following Regulations and Guidelines prescribed under the Securities andExchange Board of India Act 1992 (‘SEBI Act’):-

(a) The Securities and Exchange Board of India (Substantial Acquisition of Shares andTakeovers) Regulations 2011;

(b) The Securities and Exchange Board of India (Prohibition of Insider Trading)Regulations 1992;

(c) The Securities and Exchange Board of India (Registrars to an Issue and ShareTransfer Agents) Regulations 1993 regarding the Companies Act and dealing with client;

(vi) Other laws applicable specifically to the company:

(a) Information Technology Act 2000 and the Rules made thereunder

(b) Software Technology Parks of India Rules and Regulations.

I have also examined compliance with the applicable clauses of the Listing Agreemententered into by the Company with BSE Limited.

I report that during the period under review the Company has complied with theprovisions of the Act Rules Regulations and Guidelines mentioned above subject to thefollowing observations :

a) In the Financial Year 2013-14 the SEBI Adjudicating Officer had imposed a penalty ofRs. 3 Lakhs on the Company for the delayed disclosure/ reporting of purchase of sharesunder The Securities and Exchange Board of India (Prohibition of Insider Trading)Regulations 1992. The Company had appealed against the order of the SEBI AdjudicatingOfficer to SEBI Securities Appellate Tribunal which upheld the order of the AdjudicatingOfficer on 23.04.2014. The Company has paid the penalty of Rs. 3 Lakhs on 08.05.2014.

b) Gratuity claims by a former Director former Managing Director and a former employeein the previous years has been disputed by the company and the case is pending before theLabour Court.

c) An appeal regarding a claim by a former Managing Director and his family members inthe previous years for non payment of Fixed Deposit is pending before the High Court ofMadras.

I further report that there were no actions/ events in pursuance of:

(a) The Securities and Exchange Board of India (Issue of Capital and DisclosureRequirements) Regulations 2009.

(b) The Securities and Exchange Board of India (Employee Stock Option Scheme andEmployee Stock Purchase Scheme) Guidelines 1999;

(c) The Securities and Exchange Board of India (Issue and Listing of Debt Securities)Regulations 2008.

(d) The Securities and Exchange Board of India (Delisting of Equity Shares)Regulations 2009; and

(e) The Securities and Exchange Board of India (Buyback of Securities) Regulations1998; requiring compliance thereof by the Company during the financial year.

The Secretarial Standards issued by the Institute of Company Secretaries of India werenot applicable during the year.

I further report that the Board of Directors of the Company is duly constituted withproper balance of Executive Directors NonExecutive Directors and Independent Directors.The changes in the composition of the Board of Directors that took place during the periodunder review were carried out in compliance with the provisions of the Act.

Adequate notice is given to all directors to schedule the Board Meetings agenda anddetailed notes on agenda were sent at least seven days in advance and a system exists forseeking and obtaining further information and clarifications on the agenda items beforethe meeting and for meaningful participation at the meeting.

As per the minutes of the Board Meetings duly recorded and signed by the Chairman thedecisions of the Board were unanimous and no dissenting views have been recorded.

I further report that there are adequate systems and processes in the companycommensurate with the size and operations of the company to monitor and ensure compliancewith applicable laws rules regulations and guidelines.

I further report that during the audit period the Company has not taken any action orhad any specific event having a major bearing on the affairs of the Company in pursuanceof the above referred Laws Rules Regulations and Guidelines other than the following:

a) The members of the Company passed Special Resolution u/s 180( 1 )(c) of theCompanies Act 2013 through postal ballot process empowering the Board of Directors toborrow monies provided the amounts borrowed and outstanding at any point of time shall notexceed Rs. 25 Crores over and above the aggregate of paid up capital and free reserves ofthe Company

b) The members of the Company passed Special Resolution u/s 180( 1 )(a) of theCompanies Act 2013 through postal ballot process empowering the Board of Directors tocreate charge on the Company's property/assets/undertakings to secure credit facilities/borrowings availed or to be availed by the Company upto the Board's borrowing limits.

MANIMEKALA V RAJ
PRACTISING COMPANY SECRETARY
Place : Coimbatore FCSNo: 5163
Date : 29th May 2015 C.P.No: 3789

This report is to be read with my letter of even date which is annexed as (AnnexureA)and forms an integral part of this report.

Annexure-A

To

The Members

CG-Vak Software & Exports Limited

(CIN L30009TZ1994PLC005568)

171 Mettupalayam Road

Coimbatore - 641043.

My report of even date is to be read along with this letter.

1. Maintenance of secretarial records is the responsibility of the management of thecompany. My responsibility is to express an opinion on these secretarial records based onmy audit.

2. I have followed the audit practices and processes as were appropriate to obtainreasonable assurance about the correctness of the contents of the Secretarial records. Theverification was done on a test basis to ensure that correct facts are reflected in thesecretarial records. I believe that the processes and practices I followed provide areasonable basis for my opinion.

3. I have not verified the correctness and appropriateness of financial records andBooks of Accounts of the company.

4. Where ever required I have obtained the Management representation about thecompliance of laws rules and regulations and happening of events etc.

5. The compliance of the provisions of Corporate and other applicable laws rulesregulations standards is the responsibility of management. My examination was limited tothe verification of procedures on test basis.

6. The Secretarial Audit report is neither an assurance as to the future viability ofthe company nor of the efficacy or effectiveness with which the management has conductedthe affairs of the company.

MANIMEKALA V RAJ
PRACTISING COMPANY SECRETARY
Place : Coimbatore FCS No: 5163
Date : 29th May 2015 C.P No: 3789

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