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CG-VAK Software & Exports Ltd.

BSE: 531489 Sector: IT
NSE: N.A. ISIN Code: INE084D01010
BSE LIVE 15:28 | 26 May 31.00 1.40
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NSE 05:30 | 01 Jan Stock Is Not Traded.
OPEN 30.00
PREVIOUS CLOSE 29.60
VOLUME 380
52-Week high 45.90
52-Week low 22.05
P/E 20.13
Mkt Cap.(Rs cr) 16
Buy Price 30.10
Buy Qty 5.00
Sell Price 31.00
Sell Qty 10.00
OPEN 30.00
CLOSE 29.60
VOLUME 380
52-Week high 45.90
52-Week low 22.05
P/E 20.13
Mkt Cap.(Rs cr) 16
Buy Price 30.10
Buy Qty 5.00
Sell Price 31.00
Sell Qty 10.00

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 21st AnnualReport on the business and operations of your Company and the Audited Financial Statementsfor the year ended 31st March 2016.

FINANCIAL RESULTS 2015-16

During the year under review your Company has achieved a turnover of Rs.1003.77lakhs as against Rs.1053.77 lakhs in the previous year. There is a net Profitof Rs.80.57 lakhs as against the net profit of Rs.93.90 lakhs in theprevious year.

GLOBAL REVENUE

The global revenues for the Company including the business done by the Wholly OwnedSubsidiary for the year under review was Rs.3547 lakhs as compared to Rs.3894lakhs in the previous year .

STATE OF AFFAIRS OF THE COMPANY

The contributions of business from various Geographical areas were:

North America contributed to 81% and Rest of the World 19% of business. Business fromOffshore Software Services during the year 2015-2016 was Rs.946.52 lakhs as againstRs.1007.52 lakhs in the previous 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 2016-17.

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 of Rs.30.39lakhs inclusive of tax amount of Rs.5.14 lakhs. During the previous year ended2014-2015 your Company has paid a dividend of Rs.25.27 lakhs. One shareholderholding one share has waived his dividend entitlement of Re.0.50 for the Financial Year2015-16 vide his letter dated 25 May 2016.

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.118307/- to the General Reserve.

FORFEITURE

After giving enough opportunities and sending various reminder notices requesting theshareholders holding partly paid shares to pay the allotment money due your Directors attheir meeting held on 11th November 2015 has forfeited 9800 equity shares in the capitalof the company for non-payment of allotment money of Rs. 5/- per share in compliance withthe provisions of Listing Agreement Articles of Association of the Company read withRegulation 29 of Schedule I of Table A of the Companies Act 1956 and Regulation 28 ofTable F of the Companies Act 2013. Notices of such forfeiture were also given to thedefaulting Equity Shareholders. The BSE has approved the forfeiture of equity shares.

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 Companyhave been occurred between the end of the financial year to which these financialstatements relate and 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 2016 Equity Shares representing 90.28% of the equity sharecapital are in dematerialized form. As the depository system offers numerous advantagesmembers are requested to take advantage of the same and avail of the facility ofdematerialization 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 2016-17 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.The Company continues to be compliant with the requirements enshrined in clause 49 of theListing Agreement/SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015which relates to Corporate Governance.

Pursuant to SEBI Circular No.CIR/CFD/POLICY CELL/7/2014 dated 15th September 2014compliance with the provisions of Clause 49 is not mandatory for the Company since theCompany's paid up capital is not exceeding Rs.10 crores and Net worth is not exceedingRs.25 crores as on 31st March 2015.

SEBI vide its press release No. 226/2015 had notified and replaced the existing ListingAgreement with SEBI (Listing Obligations & Disclosure Requirement) Regulations 2015(Listing Regulations). Pursuant to Regulation 15 (2) of Listing Regulations thecompliance with corporate governance provisions are not mandatory for the Company sincethe Company's paid up capital is not exceeding Rs.10 crores and Net worth is not exceedingRs.25 crores as on 31st March 2015.

However a Report on Corporate Governance as per SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 forms part of the Annual Report. A certificatefrom the Statutory Auditors of the Company confirming compliance with the conditions ofCorporate Governance as stipulated under Clause 49/ SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 forms part of this Report.

MANAGEMENT DISCUSSION AND ANALYSIS

The Management Discussion and Analysis Report for the year under review as stipulatedas per SEBI (Listing Obligations & Disclosure Requirement) Regulations 2015 (ListingRegulations) is presented in a separate section forming part of 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: 100376923
Foreign Exchange Outgo: 782511
Foreign Travel : 403841
Others: 378670

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 inthe Auditor’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 of interest with the Company at large. All Related Party Transactions are placedbefore 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 2016 the Board consists of 7 members Two of whom areExecutive or Whole Time Directors One of whom is Non Executive Women Director and Fourare Independent Directors. The Board periodically evaluates the need for change in itscomposition 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. Weaffirm that the remuneration paid to the Directors is as per the terms laid out in thenomination and remuneration policy of the company.

WHOLLY OWNED SUBSIDIARY: CG-VAK SOFTWARE USA INC.

As on 31st March 2016 your Company has only one wholly owned subsidiary. YourCompany’s Wholly Owned Subsidiary CG-VAK Software USA Inc. at USA has made a SalesTurnover of US$ 4.00 Million during year as compared to the US$ 4.65 Million during theprevious 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 March 2016 theapplicable 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 orders passed by regulators or courts ortribunals impacting the going concern status and Company’s operations in future.

ORDER OF JOINT COMMISSIONER OF LABOUR

During the Financial Year the Company had paid Rs.579690/-(along with interest at10% amounting to Rs.291229/-) to former Managing Director of Company as Gratuity as perorder of the Joint Commissioner of Labour vide his order dated 24th July 2015.

SEBI - SECURITIES APPELLATE TRIBUNAL ORDER

During the previous financial year (2014-15) SEBI Securities Appellate Tribunal hadupheld the orders of the SEBI Adjudicating Officer dated 17th December 2013 and imposed apenalty of Rs.300000 on the company for delayed disclosure/reporting of purchase ofshares under the SEBI PIT regulations. The Company had paid the penalty amount on 08thMay 2014.

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.

PUBLIC DEPOSIT

During the year your Company has not accepted/renewed any Deposits.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

As per the provisions of the Companies Act 2013 Mr.C.Ganapathy retire from office byrotation and being eligible offer himself for re-appointment at the ensuing AnnualGeneral Meeting of the Company.

The Board has appointed Mr.C.Ganapathy as Whole Time Director designated as ExecutiveChairman for a fresh term of three years with effect from 01st July 2016 and Mr.G.Sureshas Managing Director & CEO for a fresh term of three years with effect from 01stSeptember 2016 in terms of Section 196 of the Companies Act 2013 read with Schedule V ofthe said Act. Necessary Special Resolutions seeking the approval of the Shareholders fortheir appointment along with Explanatory Statement justifying the appointment are includedin the Notice convening the 21st Annual General Meeting of the Company.

Pursuant to Section 149 of the Companies Act 2013 Mr.A.Sankar was appointed asIndependent Directors of the Company for a term of two consecutive years with effect from26th September 2014. The Company proposes to reappoint Mr.A.Sankar as IndependentDirector of the Company to hold office for a second term of 5 (Five) consecutive yearsfrom 26th September 2016 and Special Resolution for his reappointment as IndependentDirector of the Company is included in the Notice convening the 21st Annual GeneralMeeting of the Company.

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.

Brief particulars of Directors eligible for reappointment in terms of SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 and the Secretarial Standardsare annexed to the Notice dated 26th May 2016 convening the 21st Annual General Meeting.

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 independencelaid down in Section 149(6) of the Companies Act 2013 and Clause 49 of the ListingAgreement.

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

M/s. S.Lakshminarayanan Associates Chartered Accountants Coimbatore the StatutoryAuditors of your Company hold office upto the conclusion of the forthcoming AnnualGeneral Meeting of the Company.

M/s.S.Lakshminarayanan Associates have been the Statutory Auditors of the Companysince inception of the Company. The Statutory Auditors have maintained the highest levelof governance rigour and quality in their audit. The Board places on record itsappreciation for the services rendered by M/s S.Lakshminarayanan Associates as theStatutory Auditors of the Company.

In line with the requirement of Section 139 (1) of the Companies Act 2013 the AuditCommittee considering the qualifications and experience of M/s.N.C.Rajan & CoChartered Accountants Coimbatore has recommended their appointment as Statutory Auditorsof the Company to the Board. The Board further recommends their appointment as StatutoryAuditors to hold office from the conclusion of this Annual General Meeting (AGM) until theconclusion of the 26 Annual General Meeting of the Company to the members' for approvalin this AGM. In terms of Section 139 (1) of the Companies Act 2013 the appointment ofStatutory Auditors shall be placed for ratification at every general meeting.

M/s.N.C. Rajan & Co Chartered Accountants Coimbatore have furnished acertificate of their eligibility as per Section 141 of the Companies Act 2013 and haveprovided their consent for appointment as Statutory Auditors of the Company.

SECRETARIAL AUDITOR

Mrs.Manimekala V Raj Practising Company Secretary was appointed to conduct thesecretarial audit of the company for financial year 2015-16 as required under Section 204of the Companies Act 2013 and Rules made there under. The Secretarial Audit Report for FY2015-16 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 year2015-16 :

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 : 26th May 2016 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 1.14:1
2 Mr.G.Suresh Managing Director & CEO 11.36:1
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

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 10%
9 Mr.Shainshad Aduvanni CS 12%

 

(iii) The percentage increase in the median remuneration of the employees in the financial year 10%
(iv) Number of Permanent Employees on the rolls of the company (As on 31st March 2016) 172

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

The performance of the company has decreased when compared with previous year. Theincrease granted to employees is in line with the normal increase granted by company fromtime to time and is intended to compensate for inflation and motivate employees to performat their best.

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

KMP's remuneration % Increase/ (Decrease) in KMP’s remuneration Sales 2015-16 % Increase/ (Decrease) in sales (2015-16 against
2015-16 (Rs in Lakhs) (2015-16 against 2014-15) (Rs in Lakhs) 2014-15)
47.96 3.22% 1003.77 (4.75%)

(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 31.03.2015 As on 31.03.2016 Variations %+/(-)
Market Capitalization (Rs in Lakhs) 1173.92 1689.29 515.37 44%
Price earnings ratio 12.47 20.90 8.43 68%

 

Market quotations of the shares as on 31.03.2016 (BSE) Rs.33.45/- 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.33.45 as on 31st March 2016 indicating a compounded annual growth rate of 6 % 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 is17.25%. The percentile increase granted to managerial personnel is 3.22%.

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

KMP’s Name & Designation CTC (for 2015-16) (Rs in Lakhs) %Increase / (Decrease) in CTC (2015-16 against 2014-15) Sales (for 2015-16) (Rs in Lakhs) %Increase/ (Decrease) in Sales (2015-16 against 2014-15)
Mr.C.Ganapathy Executive Chairman 3.96 (30%)
Mr.G.Suresh Managing Director & CEO 30.89 (1%) 1003.77 (4.75%)
Mr.P.S.Subramanian Chief Financial Officer 7.59 10%
Mr.Shainshad Aduvanni Company Secretary 7.91 12%

 

(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 thecompany.

(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.

(By Order of the Board)
for CG-VAK SOFTWARE AND EXPORTS LIMITED
Place: Coimbatore C. Ganapathy
Date : 26th May 2016 Chairman
DIN 00735840

Annexure - 2 to Director’s Report

Explanations on the Matter of Emphasis in the Auditors’ Report to the members ofM/s. CG-VAK Software And Exports Limited for the year ended 31st March 2016

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 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;

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 employee was not eligible for gratuity. The company has disputed theclaim and the same is pending before the Labour Court;

3 With reference to the Auditors’ remark on non-payment of fixed deposit (noteno.4.15 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.

(By Order of the Board)
for CG-VAK SOFTWARE AND EXPORTS LIMITED
Place: Coimbatore C. Ganapathy
Date : 26th May 2016 Chairman
DIN 00735840