Your Directors present their Report together with the audited financialstatements for the year ended March 31 2020.
FINANCIAL PERFORMANCE/SUMMARY (Rupees in Crores)
|Particulars || |
|31st March 2020 ||31st March 2019 ||31st March 2020 ||31st March 2019 |
|Revenue from operations ||38.37 ||36.66 ||105.71 ||102.55 |
|Total Expenses ||36.01 ||34.28 ||102.47 ||84.11 |
|Profit Before Tax ||3.06 ||2.79 ||5.43 ||19.78 |
|Tax Expense / (Tax Benefit) ||0.72 ||0.84 ||0.66 ||0.93 |
|Profit after tax ||2.34 ||1.95 ||4.77 ||18.85 |
|Total Comprehensive Income ||2.07 ||1.55 ||9.85 ||4.05 |
|Reserves & Surplus ||15.73 ||13.69 ||51.18 ||41.53 |
REVIEW OF OPERATIONS / STATE OF COMPANY'S AFFAIRS FOR THE FY 2019 - 20
Our Company is a global business & technology services company.Recognized as a thought leader & innovator of enterprise solutions we help companiestransform into AI-first Businesses by leveraging Cloud & Big Data. Regardless of theindustry we offer cutting-edge AI cloud solutions custom-made to improve the way thingsare done. There has been no change in the business of the Company during the financialyear ended March 31 2020.
During the financial year under review your Company's revenueincreased by 4.66% on standalone basis. On standalone basis revenue from operations ofyour company for the financial year ended March 31 2020 is Rupees 38.37 crores("cr") as compared to Rupees 36.66 cr for the financial year ended March 312019. Profit after tax increased by 20% to Rupees 2.34 cr for the year ended 31stMarch 2020 as compared to Rupees 1.95 cr for the same period last year. Similarly totalcomprehensive income increased by 33.55% to Rupees 2.07 crores for the year ended 31stMarch 2020 as compared to Rupees 1.55 cr for the same period last year. Reserves andSurplus have increased from Rupees 13.69 cr in FY 2018-19 to Rupees 15.73 crores in FY2019-20.
Further on consolidated basis total revenue from operations of yourcompany increased by 3.08% to Rupees 105.71 cr for the financial year ended March 31 2020as compared to the previous year's total revenue of Rupees 102.55 cr. Profit after taxdecreased by 74.69% to Rupees 4.77 cr for the year ended 31st March 2020 ascompared to Rupees 18.85 cr for the same period last year. Total comprehensive incomeincreased by 143.21% to Rupees 9.85 cr for the year ended 31st March 2020 ascompared to Rupees 4.05 cr for the same period last year. Reserves and Surplus haveincreased from Rupees 41.53 cr in FY 2018-19 to Rupees 51.18 cr in FY 201920.
The Company has adopted Ind AS from 1st April 2017. Theaudited financial statements (both standalone and consolidated) prepared in accordancewith Section 129 and Section 133 of the Companies Act 2013 read with the rules madethereunder ("the Act") and applicable Indian Accounting Standards (Ind AS) alongwith the Auditor's Report form part of this Annual Report.
As required under Section 136 of the Companies Act 2013 auditedfinancial statements including the consolidated financial statements and all otherdocuments required to be attached thereto and audited or unaudited accounts as the casemay be of each of its subsidiaries whose accounts are consolidated are available on thewebsite of the company i.e. www.ctepl.com. These documents will also be available forinspection during the business hours at the registered office of the Company.
REPORT ON SUBSIDIARIES/JOINT VENTURE
As on March 31 2020 the Company has 2 wholly-owned subsidiaries viz.Cambridge Technology Inc. USA Cambridge Technology Investments Pte. Ltd. Singapore and3 step-down subsidiaries viz. M/s Cambridge Innovation Capital LLC USA M/s CambridgeBizserve Inc. Philippines and M/s Cloud Computing Global Pte Ltd. Singapore. During theFinancial Year Cambridge Technology Investments Pte. Ltd. Singapore has subscribedtowards 50 shares in Joint Venture Company named ECD CTL Pte Ltd. which amounts to 50%interest in Joint Venture entity. As at the financial year end Cambridge TechnologyInvestments Pte. Ltd has not remitted any money for shares in the said Joint Venture.
Cambridge Bizserve Private Limited & Cambridge Innovations PrivateLimited ceased to be Subsidiaries of the Company during the financial year 2019-20 and M/sCloud Computing Global Pte. Ltd. Singapore ceased to be Step - down Subsidiary of theCompany in April 2020.
Highlights of Performance
Cambridge Technology Inc. USA had net revenue of Rupees 100.47 crduring the year as compared to Rupees 49.86 cr revenue during the previous financial year.The net profit after tax is Rupees 4.79 cr in FY 2019-20 as compared to net loss of Rupees34.49 cr in FY 2018-19. The contribution of Cambridge Technology Inc. USA to the overallperformance of the company is in the form of revenue earned by the company by renderingits services amounting to Rupees 31.55 cr. Cambridge Innovation Capital LLC USA a step -down subsidiary company had no revenue as on March 31 2020 as compared to net revenue ofRupees 60.99 cr as on March 31 2019. Cambridge Technology Investments Pte. Ltd Singaporehas nil revenue and net profit of Rupees 0.98 lakhs during the year as compared to nilrevenue and net loss of Rupees 3.62 lakhs during the previous financial year. CambridgeBizserve Inc. Philippines has net revenue of Rupees 13.52 lakhs as on March 31 2020 andnet loss of Rupees 118.74 lakhs as compared to net revenue of Rupees 118.78 lakhs and netloss of Rupees 119.36 lakhs during the previous financial year.
Apart from Cambridge Technology Inc. the other entities did not makeany material contribution to the overall performance of the company during the financialyear 2019-20. Cloud Computing Global Pte Ltd step - down subsidiary company and ECD CTLPte. Ltd. has not commenced its operations as on March 31 2020.
Further as per provisions of section 129(3) of the Companies Act2013 a statement containing the salient features of financial statement of oursubsidiaries i.e. a report on the financial performance and financial position of each ofthe Subsidiaries included in the Consolidated Financial Statements is provided in theprescribed format AOC-1 appended as Annexure - 1 to the Board's Report and forms part ofthis Annual Report.
TRANSFER TO RESERVES
The Board of Directors did not propose to transfer any amount toreserves for the period under review. DIVIDEND
Keeping in view the expected cash flow requirements and in order toconserve the resources for future business operations and for the future growth of theCompany the Board of Directors were not able to recommend any dividend for the financialyear ended 31st March 2020.
During the year the authorized share capital and paid up capital ofthe Company remained unchanged at Rupees 300000000/- divided into 30000000 equityshares of Rupees 10/- each & Rupees 196310150/- divided into 19631015 equityshares of Rupees 10/- each respectively.
Fund raising/Issue of Convertible Share Warrants
Pursuant to approval of the members of the Company obtained throughPostal Ballot on December 26 2019 the Board of Directors of the Company on January 092020 has allotted 3360000 Convertible Share Warrants ("Warrants") at an issueprice of Rupees 31/- on preferential basis to Worldwide Technology Investments Pte.
Ltd. a Promoter Group entity. Total value of convertible shareWarrants is Rupees 104160000/- out of which Rupees 26811427.50/- (i.e. 25.74% ofthe total consideration) has been received upfront from the holder of convertible sharewarrants. The warrant holder have a right to apply for and be allotted 1 equity share offace value of Rupees 10/- each of the Company for each warrant within a period of 18months from the date of allotment of warrants i.e. the Warrants shall be exercised withina period of 18 months from the date of their allotment in one or more tranches.
The Company requires this infusion of funds to augment funding needs ofthe Company viz. to meet the working capital requirements general corporate purposes tosupport the future growth plans of the Company and to further invest in the subsidiaries.Infusion of further capital will enable the Company to grow further and realize theobjectives more effectively.
During financial year 2019-20 out of Rupees 26811427.50/- Rupees26723336.06/- has been utilized as per the original object as stated in explanatorystatement to the notice of postal ballot dated November 13 2019. There are novariations/deviations if any in the use of proceeds from the objects stated inexplanatory statement to the notice of postal ballot dated November 13 2019. There are nodeviations/variations between projected utilisation of funds made by it in its explanatorystatement to the notice for postal ballot dated November 13 2019 and the actualutilisation of funds.
The Board of Directors of your Company comprises of 5 (five) Directorsas on the date of this report representing the optimum blend of professionalism knowledgeand having varied experience in different disciplines of corporate functioning. Of these3 (three) Directors are Independent Directors.
Appointments / Re-appointments
Pursuant to provisions of Section 152 of the Companies Act 2013 readwith the Companies (Appointment and Qualification of Directors) Rules 2014 Mr. DharaniRaghurama Swaroop (DIN: 00453250) is liable to retire by rotation at the ensuing AnnualGeneral Meeting and being eligible offers himself for re-appointment to the office ofdirectorship. The Directors propose the re-appointment of Mr. Dharani Raghurama Swaroopfor approval of the shareholders at the ensuing AGM of the Company.
The Board of Directors at their Meeting held on November 13 2019approved appointment of Mr. Sridhar Lalpet having DIN 02539952 as an Additional Director(Non-Executive & Independent) of the Company w.e.f November 13 2019 subject toapproval of members. The members approved his appointment as Non-Executive IndependentDirector for a consecutive period of 5 years w.e.f November 13 2019 by passing requiredresolution on December 26 2019 through Postal Ballot.
The earlier term of Mrs. Jayalakshmi Kumari Kanukollu IndependentDirector expired on March 14 2020. The Board of Directors at their meeting held onFebruary 11 2020 has passed a resolution for re-appointment of Mrs. Jayalakshmi KumariKanukollu (DIN: 03423518) as an Independent Director for a further period of 5 (five)years from the expiry of her present term of office that is with effect from March 142020 subject to members approval. The Directors propose the re-appointment of Mrs.Jayalakshmi Kumari Kanukollu for approval of the shareholders at the ensuing AGM of theCompany.
A Brief profile of Mr. Dharani Raghurama Swaroop & Mrs. JayalakshmiKumari Kanukolly Directors of the Company along with the nature of their expertise andthe number of companies in which they hold directorship and membership / chairmanship ofcommittees of the Board and other requisite details as stipulated under Companies Act2013 SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015("Listing Regulations" or "SEBI (LODR) Regulations 2015") andSecretarial Standard 2 as issued by the Institute of Company Secretaries of India is givenbelow and/or annexed to the notice of the Annual General Meeting.
|Name of the Director ||Mr. Dharani Raghurama Swaroop |
|DIN ||'00453250 |
|Date of Birth ||April 09 1959 |
|Date of first appointment on the Board ||28th January 1999 |
|Age ||61 Years |
|Brief Resume ||Dharani Raghurama Swaroop Whole - Time Director of Cambridge Technology Enterprises Limited ("CT") heads the overall Indian operations and is responsible for the corporate governance and statutory compliances-related aspects of the said Company. Prior to his association with CT Swaroop co-founded a successful IT systems integration company comprising of more than 150 personnel. Swaroop holds an Electrical Engineering degree from Jawaharlal Nehru Technological University India. |
|Qualification ||Degree in Electrical Engineering from Jawaharlal Nehru Technological University. |
|Experience ||He has more than 34 years of experience |
|Terms & Conditions of appointment along with Remuneration sought to be paid ||The basic salary is in the range of Rupees 2000000/- to Rupees 5000000/- per annum payable monthly. The terms and conditions of appointment along with detailed remuneration are as specified in Notice of 19th Annual General Meeting conducted on September 28 2018 and the same is available on website of the Company i.e. www.ctepl.com. |
|Remuneration last drawn ||Remuneration drawn for the FY 2019-20 is Rupees 3500000/- |
|Disclosure of relationships between directors inter- se/Relationship with other Directors Manager and other Key Managerial Personnel of the Company ||Nil |
|Nature of his expertise in specific functional areas ||Statutory Compliances Overseeing Operations IT Services and Corporate Strategic Planning |
|Number of Meetings of the Board attended during the year 2019-20 ||05 |
|Names of Companies/LLP in which he holds the directorship ||Cambridge Technology Enterprises Limited DS Unics Infotech Private Limited and Reshet Technologies LLP |
|Names of Companies in which he holds the membership of Committees of the Board ||He is a member of the following Committees of the Board of the Cambridge Technology Enterprises Limited viz. Audit Committee Stakeholders Relationship Committee Corporate Social Responsibility Committee and Finance Committee. |
|Shareholding in the Company ||9200 Shares (0.047%) as on March 31 2020 |
| || |
|Name of the Director ||Ms. Jayalakshmi Kumari Kanukollu |
|DIN ||'03423518 |
|Date of Birth ||August 08 1968 |
|Date of first appointment on the Board ||March 14 2015 |
|Age ||52 Years |
|Brief Resume ||With a deep passion for teaching Dr. Jayalakshmi Kumari brings more than 15 years of experience from the educational sector having worked for leading schools and colleges in Hyderabad. Presently she is working with the Nalanda Educational Society as a faculty in the field of social sciences. With proven ability to constantly challenge and improve existing processes and systems she has been participating and rendering voluntary services to many social organizations. |
|Qualification ||Dr. Jayalakshmi Kumari has a Ph.D. in social sciences an M.A in Economics M.A in Political Science M. Phil and M.Ed. |
|Experience ||She has more than 15 years of experience in educational sector. |
|Terms & Conditions of appointment along with Remuneration sought to be paid ||Draft letter of appointment of Independent Directors setting out the terms and conditions is available on the website of the company. Sitting fees for attending Board and / or Committee Meetings is sought to be paid to Ms. Jayalakshmi Kumari. Sitting fees for attending Board and / or Committee Meetings is sought to be paid to Ms. Jayalakshmi Kumari. |
|Remuneration last drawn ||Sitting fees paid to her attending Board and Committee Meetings for the FY 2019-20 is Rupees 160000/- |
|Disclosure of relationships between directors inter- se/Relationship with other Directors Manager and other Key Managerial Personnel of the Company ||Nil |
|Nature of her expertise in specific functional areas ||Academician having experience in Economics Political science and Social sciences. Participating and rendering voluntary services to many social organizations. |
|Number of Meetings of the Board attended during the year 2019-20 ||04 |
|Names of Companies/LLP in which she holds the directorship ||1. Cambridge Technology Enterprises Limited 2. Brightcom Group Limited |
|Names of Companies in which she holds the membership of Committees of the Board ||1. Cambridge Technology Enterprises Limited - She is a Chairman of the Nomination and Remuneration Committee Stakeholders Relationship Committee and member of Audit Committee and Corporate Social Responsibility Committee of the Board. 2. Brightcom Group Limited - She is a Chairman of Corporate Social Responsibility Committee and member of Audit Committee and Nomination and Remuneration Committee of the Board. |
|Shareholding in the Company ||She does not hold any shares in the Company whereas her husband Mr. Janakirama Lakshmana Rao Kanukollu holds 10 shares in the Company as on March 31 2020. |
Ms. Usha Srikanth (DIN: 08184237) has resigned as an IndependentDirector of the Company w.e.f February 11 2020. The Board while accepting the resignationof Ms. Usha Srikanth appreciated and placed on record the valuable contribution andsupport provided by her during her tenure as Non-Executive Independent Director and as amember of Nomination and Remuneration Committee.
The tenure of appointment of Mr. Aashish Kalra expired with effect fromclose of working hours on May 13 2020. Mr. Kalra expressed his desire to retire fromservices of the Company and not like to be re-appointed for the next term due to personalreasons. Hence he ceased to be Whole-time Director Chairman & Chief ExecutiveOfficer (CEO) of the Company with effect from close of working hours on May 13 2020.
KEY MANAGERIAL PERSONNEL
Mr. Dharani Raghurama Swaroop is Whole-time Director of the Company.Mr. Chirravuri Subrahmanya Leeladhar a qualified Chartered Accountant is Chief FinancialOfficer of the Company. Mr. Ashish Bhattad qualified Company Secretary is CompanySecretary & Compliance Officer of the Company. Mr. Hanumant Bhansali Manager -Corporate Finance & Head Investor Relations is designated Whole - time Key ManagerialPersonnel.
There were no appointments and resignations of Key Managerial Personnelduring the year. However Mr. Aashish Kalra ceased to be Whole-time Director Chairman& Chief Executive Officer (CEO) of the Company with effect from close of working hourson May 13 2020.
BOARD AND COMMITTEE MEETINGS
The Board met 05 (five) times during the year. Details of thecomposition of the Board and its Committees and of the meetings held and attendance of theDirectors at such meetings are provided in the Corporate Governance Report. Theintervening gap between the Meetings was within the period prescribed under the Section173(1) of Companies Act 2013 and Regulation 17(2) of Listing Regulations.
DECLARATION BY INDEPENDENT DIRECTORS
Pursuant to Section 149(7) of the Companies Act 2013 Rule 6(3) of theCompanies (Appointment and Qualification of Directors) Rules 2014 and Regulation 25(8) ofthe Listing Regulations the Company received declaration from Independent Directors.
The Company at its various meetings held during the financial year2019-20 had familiarized the Independent Directors through various initiatives. TheIndependent Directors of the company have been briefed at the meetings of the Board /Committees thereof on the matters such as their roles functions rights dutiesresponsibilities and liabilities in the Company nature of the industry in which theCompany operates the business model business verticals and operations of the Companygeographies in which company operates financial results of the Company and that of itssubsidiary companies updates on statutory and regulatory changes and impact thereofupdates on development of business of the company overview of board evaluation andprocedures etc. They were made to interact with business heads and senior managementpersonnel and are given all the documents reports and internal policies sought by themfor enabling a good understanding of the Company its various operations and the industryof which it is a part which enable the Directors to contribute significantly to theCompany.
Details of familiarization programs extended to the IndependentDirectors during the year are also disclosed on the Company website from time to time.
Web link: https://www.ctepl.com/pdfs/investors/FamiliarisationProgramme CTEL 2020.pdf PERFORMANCE EVALUATION NOMINATION & REMUNERATION POLICY
The Company has adopted the Performance Evaluation Nomination &Remuneration Policy as required under the provisions of the Companies Act 2013 andRegulation 19 read with Part D of Schedule II of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015. Brief features of the policy inter-alia includesobjective and purpose of the policy which is to lay down the criteria for effectiveevaluation of performance of Board and that of its committees and individual directors toestablish a framework for the remuneration of directors key managerial personnel andother employees to lay down criteria for identifying persons who are qualified to becomedirectors and who may be appointed in senior management in accordance with the criterialaid down and recommending to the Board their appointment and removal criteria fordetermining qualifications positive attributes and independence of a director policyrelating to remuneration of directors key managerial personnel and other employees toensure reasonable and sufficient level and composition of remuneration to attract retainand motivate the Directors KMPs and Senior Management Personnel etc. and role ofNomination and Remuneration Committee as defined under Section 178 of the Companies Act2013 and Regulation 19 read with Part D of Schedule II of the Listing Regulations 2015.
During the year 2018-19 the above said policy was amended inter-aliato comply with provisions introduced by Companies (Amendment) Act 2017 and SEBI (ListingObligations and Disclosure Requirements) (Amendment) Regulations 2018 such as specifyingthe manner for effective evaluation of performance amendment in criteria of Independenceamendment in definition of senior management recommendation to the board by nominationand remuneration committee of all remuneration in whatever form payable to seniormanagement etc.
Performance evaluation nomination and remuneration policy is availableon the website of the Company. Weblink:
http://www.ctepl.com/pdfs/investors/Performance evaluation nominationremuneration policy.pdf
Pursuant to the provisions of Companies Act 2013 read with the rulesmade thereunder and SEBI (LODR) Regulations 2015 the performance evaluation ofindividual Directors Board and its Committees was carried out.
The requisite details as required by Section 134(3) and Regulation 34of SEBI (LODR) Regulations 2015 and other applicable provisions in this regard isprovided elsewhere in this report and/ or Corporate Governance Report.
EVALUATION OF PERFORMANCE OF THE BOARD ITS COMMITTEES AND DIRECTORS
Pursuant to the provisions of the Companies Act 2013 and SEBI (LODR)Regulations 2015 an annual evaluation of performance of the Board its Committees and ofindividual Directors has been carried out.
The Nomination & Remuneration Committee evaluated performance ofthe Directors including Independent Directors for the financial year 2019-20 based on theperformance rating document submitted by individual directors and recommended its reportto the Board. Thereafter the Board reviewed performance of its own its committees and ofindividual directors including independent Directors based on the performance ratingdocument submitted by individual directors. The assessment is carried out by means of astructured questionnaire with ranking. Based on the report the Board and the Nomination& Remuneration Committee has informed that the performance of Directors includingIndependent Directors is satisfactory and they are recommended for continuation asDirectors of the Company.
The criteria for performance evaluation of the Board include aspectslike experience proper mix of qualifications skills and competencies to conduct itsaffairs effectively diversity its roles and responsibilities its functions evaluationof risks setting up of corporate culture and values conduct of board meetings and itseffectiveness corporate strategy business plans corporate performance etc. Thecriteria for performance evaluation of the Committees include aspects like structuremandate composition independence working procedures and functions of committees andeffective contribution to the board etc. The criteria for performance evaluation of theindividual Directors (including Independent Directors) include aspects likequalifications experience competency professional conduct sufficient understanding andknowledge of the entity fulfilling of functions active initiation with respect tovarious areas attendance at the meetings contribution to the company and board meetingscommitment to the Board integrity etc. In addition the performance of IndependentDirectors is evaluated on aspects such as his/her independence from the company and otherdirectors exercise of judgement and expression of opinion etc. In addition theperformance of the Chairman is also evaluated on key aspects of his leadershipdecisiveness commitment to the Board roles and responsibilities etc.
Separate Meeting of the Independent Directors
A separate meeting of the Company's Independent Directors was also heldon February 11 2020. The meeting was held to:
i. Review the performance of non-independent directors and the Board asa whole;
ii. Review the performance of the Chairperson of the Company takinginto account the views of Executive Directors and Non-Executive Directors;
iii. Assess the quality quantity and timeliness of flow of informationbetween the Company Management and the Board that is necessary for the Board toeffectively and reasonably perform their duties.
Opinion of the Board
Pursuant to the amendments in the Companies (Appointment andQualification of Directors) Rules 2014 Mrs. K. Jalayalakshmi Kumari & Mr. SridharLalpet Independent Directors of the Company have registered themselves with the Databankof Independent Directors. Mr. Venkat Motaparthy Independent Director of the Company is inthe process of registering himself with the said Databank. The Independent Directors areyet to undertake online proficiency self-assessment test wherever required conducted bythe institute notified under subsection (1) of section 150 of the Act. The Board is of theopinion that all the Independent Directors of the
Company possess integrity necessary expertise and experience forperforming their functions diligently. They also fulfilling the conditions specified inthe Act and Listing Regulations for appointment as Independent Directors and areindependent of the Management.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to Section 134(3)(c) and 134(5) of the Companies Act 2013the Board of Directors hereby confirm that:
a) In the preparation of the annual accounts the applicable accountingstandards have been followed and there are no material departures;
b) they have selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the company at the end of thefinancial year and of the profit and loss of the company for that period;
c) they have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of this Act for safeguardingthe assets of the company and for preventing and detecting fraud and other irregularities;
d) they have prepared the annual accounts on a going concern basis;
e) they have laid down internal financial controls to be followed bythe company and that such internal financial controls are adequate and were operatingeffectively; and
f) they have devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems were adequate and operatingeffectively.
STOCK EXCHANGE LISTING
Presently the Equity Shares of the Company are listed on the BSELimited (BSE) and the National Stock Exchange of India Limited (NSE). The Company confirmsthat it has paid Annual Listing Fees to both the stock exchanges.
AUDITORS & AUDITORS' REPORT
M/s. Anandam & Co. Chartered Accountants (Firm RegistrationNumber: 000125S) were appointed as Statutory Auditors of the Company from the conclusionof 17th Annual General Meeting till the conclusion of 22nd AGM ofthe Company subject to ratification of their appointment by the members at every AnnualGeneral Meeting.
The Companies Amendment Act 2017 w.e.f May 07 2018 has omitted thefirst proviso to Section 139 of the Companies Act 2013 that provided for the ratificationof appointment of the Statutory Auditors by the Members at every Annual General Meeting.Hence the appointment of Statutory Auditors shall continue to be valid until theconclusion of 22nd Annual General Meeting of the Company and accordingly nosuch item has been placed for approval of the members at this Annual General Meeting.
The Company has received audit report for both standalone andconsolidated audited financial statements of the Company for the financial year endedMarch 31 2020 from the statutory auditors M/s. Anandam & Co. Chartered Accountantsand forms part of this Annual Report. There are no qualifications reservation adverseremarks or disclaimer made by the Statutory Auditors in their Reports. However there isan emphasis of matter made by the Statutory Auditors in their report on standalone as wellas consolidated financial statements and they have stated that their opinion is notmodified in respect of this matter.
Emphasis of Matter - Standalone Financial Statements
The management of the Company is of the opinion that the investments insubsidiaries have a realizable value not lesser than the book value. Further whereapplicable the downstream investments of the respective subsidiaries are expected tocarry valuations that will not lead to any diminution in value of the Company'sinvestments. (Refer Note 5.1 of the standalone financial statements).
Emphasis of Matter - Consolidated Financial Statements
The Group has investments in convertible notes which are valued at costless impairment. The board of directors of the holding company is of the opinion thatthese entities are solvent and carry the value stated in the financial statements. (ReferNote 5.1 of the consolidated financial statements).
The statutory auditors stated in their reports that they have relied onthe same and their opinion is not modified in respect of this matter.
Your Directors have appointed M/s. Narven & Associates CharteredAccountants Hyderabad as Internal Auditors of the Company.
Pursuant to the provisions of Section 204 of the Companies Act 2013read with the Companies (Appointment and remuneration of Managerial personnel) Rules2014. M/s. B. Krishnaveni a Company Secretary in Practice was appointed to undertake theSecretarial Audit of the Company for the financial year 2019-20. The Secretarial AuditReport for financial year 2019-20 forms part of the Annual Report as Annexure 2 to theBoard's Report.
There are no qualifications reservation adverse remarks or disclaimermade by the Secretarial Auditor in her Report.
COMPLIANCE WITH SECRETARIAL STANDARDS
The Board of Directors confirm that the Company during the financialyear ended March 31 2020 has complied with all applicable mandatory SecretarialStandards issued by the Institute of Company Secretaries of India.
EXTRACT OF ANNUAL RETURN
An extract of the Annual Return in the prescribed format is appended asAnnexure 3 to this Report. Annual Return as mentioned under Section 92(3) is alsoavailable on the website of the Company at https://www.ctepl.com/investors/.
PARTICULARS OF EMPLOYEES
The information required under Section 197 (12) of the Act read withRule 5(1) of The Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 as amended is annexed as Annexure 4 to this report.
The information required under Rule 5 (2) and (3) of The Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 is provided in theAnnexure 4 forming part of the Report.
Remuneration / fees to Director from wholly owned subsidiary
During FY 2019-20 provision was made towards remuneration of Mr.Aashish Kalra Chairman & CEO of the Company by Cambridge Technology Inc. USA awholly owned subsidiary company ("CT Inc") for an amount of USD 149900 (Rupees10632000/-). However CT Inc. made no payment to him.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS UNDER SECTION 186
Particulars of loans guarantees and investments if any made by theCompany pursuant to Section 186 of the Companies Act 2013 forms part of the financialstatements and notes to the financial statements of the Company provided in this AnnualReport.
TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND
In terms of Section 125 of the Companies Act 2013 read with theInvestor Education and Protection Fund (Accounting Audit Transfer and Refund) Rules2016 during the financial year ended 31st March 2020 there is no outstandingamount to be transferred to Investor Education and Protection Fund.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGEEARNINGS AND OUTGO
A. CONSERVATION OF ENERGY: The operations of the Company are not energyintensive. However
adequate measures have been taken to conserve energy wherever possibleby using energy efficient computers turning of air-conditioners during weekends andnon-peak hours installing LED lights etc. The financial impact of these measures is notmaterial.
B. TECHNOLOGY ABSORPTION ADAPTATION AND INNOVATION: Your Company hasneither incurred
expenditure on any research and development nor was any specifictechnology obtained from any external sources which needs to be absorbed or adapted. Henceparticulars relating to technology absorption are not applicable. The Company continue toadapt technologies that increase efficiency and improve the quality of its operations.
C. FOREIGN EXCHANGE EARNINGS AND OUTGO: The foreign exchange earned interms of actual inflows during the year and the foreign exchange outgo during the year interms of actual outflows:
|Particulars ||Current year ||Previous year |
| ||31.03.2020 ||31.03.2019 |
|Foreign exchange earnings ||341304818 ||290287530 |
|Foreign exchange outgo ||Nil ||Nil |
|Travel related Expenses ||4029250 ||1962592 |
ADEQUACY OF INTERNAL FINANCIAL CONTROL SYSTEM
Based on the framework of internal financial controls and compliancesystems established and maintained by the Company work performed by the InternalStatutory and Secretarial Auditors and the reviews performed by Management and therelevant Board Committees including the Audit Committee the Board is of the opinion thatthe Company's internal financial controls were adequate and effective with reference tothe financial statements during the financial year 2019-20.
The Company has in place adequate internal financial controlscommensurate with the size and needs of the business. These controls ensures the orderlyand efficient conduct of its Business including adherence to the Company's policiesidentification of areas of improvement safeguarding of its assets from unauthorized usethe prevention and detection of frauds and errors the accuracy and completeness of theaccounting records and timely preparation of reliable financial statements and / ordisclosures. Company policies guidelines and procedures provide for adequate checks andbalances and are meant to ensure that all transactions are authorized recorded andreported correctly. Also please refer details of internal financial controls/Internalcontrol systems that are provided in the Management Discussion and Analysis Report andIndependent Auditors Report on financial statements which forms part of this annualreport.
VIGIL MECHANISM / WHISTLE BLOWER POLICY
The requisite details as required by Section 177 of Companies Act 2013and Regulation 22 & 34 (3) of SEBI (LODR) Regulations 2015 is provided in theCorporate Governance Report.
The Whistleblower policy is available on the website of the Company.
Weblink: http://www.ctepl.com/pdfs/investors/Whistle Blower Policy.pdf
PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE
The Company is committed to maintaining a productive environment forall its employees at various levels in the organization free of sexual harassment anddiscrimination on the basis of gender. The Company has framed
a policy on Prevention of Sexual Harassment in line with therequirements of the Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013. The Company has also set up an Internal Complaints Committee (ICC)for providing a redressal mechanism pertaining to sexual harassment against womenemployees at workplace.
The Company has complied with provisions relating to the constitutionof Internal Complaints Committee under the Sexual Harassment of Woman at Workplace(Prevention Prohibition and Redressal) Act 2013. During the financial year 2019-20 theCompany has not received any complaints pertaining to Sexual Harassment.
The Company process is in place to ensure that all the Current andFuture Material Risks of the Company are identified assessed/quantified and effectivesteps are taken to mitigate/ reduce the effects of the risks to ensure proper growth ofthe business. Your Company has a well-defined risk management framework in place and arobust organizational structure for managing and reporting risks. For details related torisks and risk management shareholders are requested to refer to "Threats risks& concerns section" and "Internal control systems and their adequacysection" of Management Discussion and Analysis Report and Note 34 & 35 (forfinancial instruments & risk management and financial risk management) of theConsolidated and Standalone Financial Statements which forms part of annual report.
EMPLOYEE STOCK OPTION SCHEME
The details of employee stock options for the financial year ended 31March 2020 as per Section 62(1)(b) of the Companies Act 2013 read with Rule 12(9) of theCompanies (Share Capital and Debentures) Rules 2014 are given as Annexure 5 to thisreport.
There is no material change in the employee stock option scheme(s)during the year and the scheme(s) are in compliance with the regulations. Further thedisclosures pursuant to the provisions of Securities and Exchange Board of India (ShareBased Employee Benefits) Regulations 2014 and as per Section 62(1)(b) of the CompaniesAct 2013 read with Rule 12(9) of the Companies (Share Capital and Debentures) Rules 2014for the financial year ended 31 March 2020 are available on website of the Company.Web-link: http://www.ctepl.com/investors/
The Certificate from the Auditors of the Company under regulation 13 ofSEBI (Share Based Employee Benefits) Regulations 2014 stating that the scheme(s) has beenimplemented in accordance with SEBI (Share Based Employee Benefits) Regulations 2014 asamended from time to time and in accordance with the resolution of the company in thegeneral meeting will be available for inspection by the members at the ensuing AGM.
Mr. Dharani Raghurama Swaroop Whole - time Director and Mr. ChirravuriSubrahmanya Leeladhar Chief Financial Officer of the Company have provided ComplianceCertificate (annexed as Annexure 6 to this report) to the Board in accordance withRegulation 17(8) read with Part B of Schedule II of the SEBI (LODR) Regulations 2015 forthe financial year ended 31 March 2020.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
The Policy on materiality of related party transactions and on dealingwith related party transactions is available on the website of the Company.
Web link: http://www.ctepl.com/pdfs/investors/Related partytransactions policy.pdf
All transactions entered into with Related Parties as defined under theapplicable provisions of Companies Act 2013 and Regulation 23 of the SEBI (LODR)Regulations 2015 during the year were in the ordinary course of business and on an arms'length basis and hence are not covered under the scope of Section 188(1) of the CompaniesAct 2013. However Information on transactions with related parties pursuant to section134(3)(h) of the Act read with rule 8(2) of the Companies (Accounts) Rules 2014 are givenin Form AOC-2 and is enclosed as Annexure 7 to this Report. Appropriate approvals ifrequired are obtained from Board and / or Audit Committee from time to time. The auditcommittee also reviews the transactions from time to time.
During the year 2019-20 the Company had not entered into any contract/ arrangement / transactions with Related Parties (except with its wholly ownedsubsidiary(ies)) which could be considered as material in terms of Regulation 23 of theSEBI (LODR) Regulations 2015. In accordance with Ind AS disclosures on related partytransactions have been made in the notes to the financial statements which forms part ofthis annual report.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT & CORPORATE GOVERNANCE
The Management Discussion and Analysis Report and the Report onCorporate Governance for the financial year ended March 31 2020 along with the Auditor'sCertificate on compliance with the provisions of corporate governance under SEBI (LODR)Regulations 2015 is forming part of the Board Report/Annual Report.
Your Company is committed to maintain the prescribed standards ofCorporate Governance and has taken adequate steps to adhere to all the stipulations laiddown in SEBI (Listing Obligations & Disclosure Requirements) Regulations 2015.
Mrs. B. Krishnaveni a Company Secretary in Practice SecretarialAuditor of the company has certified that the conditions of Corporate Governance asstipulated under SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015have been complied by your Company and her certificate is annexed as Annexure 8 to thisReport.
CORPORATE SOCIAL RESPONSIBILITY
The Board of Directors of the Company has constituted a CorporateSocial Responsibility Committee comprising of following Directors:
1. Mr. Dharani Raghurama Swaroop Whole - time Director - Chairman ofthe Committee
2. Mr. Venkat Motaparthy Independent Director - Member of theCommittee
3. Mrs. K Jayalakshmi Kumari - Member of the Committee
The CSR Policy of the Company as recommended by CSR Committee andapproved by the Board of Directors of the Company is available on website of the companyi.e. https://www.ctepl.com/investors/. The objective of framing the CSR Policy of theCompany is to ensure that the Company operate its business in an economically socially& environmentally sustainable manner by enhancing the quality of life & economicwellbeing of the society in fulfillment of its role as a Socially Responsible Corporate.
Decision on non-applicability of CSR
The company declared the following in the Annual Report for the FY2017-18 under Corporate Social Responsibility section:
"Your Company does not have the net worth of Rs. 500 Crore ormore or turnover of Rs. 1000 Crore or more but it has a net profit of more than Rs. 5Crores as at the end of the 31st March 2017. Section 135 of the Companies Act2013 relating to Corporate Social Responsibility is applicable to your Company from thefinancial year 2017 - 18. Hence the Board of Directors of the Company has constituted aCorporate Social Responsibility Committee comprising of following Directors: 1.Mr. DharaniRaghurama Swaroop Whole - time Director - Chairman of the Committee 2.Mr. VenkatMotaparthy Independent Director - Member of the Committee 3.Mrs. K Jayalakshmi Kumari -Member of the Committee The CSR Policy of the Company as recommended by CSR Committee andapproved by the Board of Directors of the Company is available on website of the companyi.e. www.ctepl.com."
The Report on Corporate Social Responsibility containing particulars asper the provisions of Section 135 read with the Companies (Corporate SocialResponsibility) Rules 2014 was also enclosed as Annexure '9' forming part of the saidReport."
The Board in its meeting dated February 11 2020 noted that the Net -Profit before tax for the financial year ended March 31 2017 considered was 73102.88thousand i.e. after taking into account exceptional items and
it was wrongly concluded that CSR provisions were applicable from FY2017-18. The Exceptional Items represented goodwill amortised during the year 2015-16 andreversed during FY 2016-17 on account of approval of Scheme of Capital Reduction. Hencethe Management of the Company is under an opinion that the Profit before exceptional itemsand tax shall be considered which is around Rs. 48674.38 thousands and which is below thelimits of Rupees 5 Crores i.e. threshold for applicability of CSR provisions.
The Board further noted that the provision made for diminution in valueof investment for the year 2017 is related to the Investments made in 100% wholly ownedforeign subsidiary and it cannot be provided with such diminution of investment in Holdingcompany as long as the same effect is given to the corresponding Share Capital ofsubsidiary company. As the effect of other leg is not justified the above provision wasno longer required in the holding company and hence the same will not attract as anaddition in computing the profits u/s 198 of the Companies Act 2013. The resultant NetProfit without considering diminution in the value of Investment was Rs. 48674.38thousands which is below the threshold limit for applying the CSR provisions to thecompany.
Considering the above the Board noted that the CSR criteria is notapplicable to the Company from the FY 201718. As the company inadvertently made applicablethe CSR provisions from the FY 2017-18 It was proposed to the Committee and the Board toreconsider the above and to decide on the non-applicability of CSR and its relatedprovisions to the Company. Hence the Board on recommendation of the CSR Committee inits meeting dated February 11 2020 passed a resolution to the effect that the CorporateSocial Responsibility provisions i.e. Section 135 of the Companies Act 2013 read withthe rules made thereunder and other applicable provisions in this regard are notapplicable to the Company from the FY 2017-18 as the Net Profit as per section 135 of theCompanies Act 2013 as at the end of March 31 2017 is below rupees five crore and alsothat this resolution supersedes all the earlier resolutions passed by the Board andCorporate Social Responsibility Committee in compliance with Section 135 of the CompaniesAct 2013 read with the rules made thereunder.
However the Report on Corporate Social Responsibility is enclosed asAnnexure '9' forming part of this Report.
Also your company does not have net worth of rupees five hundred croreor more or turnover of rupees one thousand crore or more or a net profit of rupees fivecrore or more for the financial year ended March 31 2018 March 31 2019 & March 312020.
Due to the Covid 19 situation there have been several restrictionsimposed by the Governments across the globe considering public health and safety measuresduring March 2020. Based on the current indicators of economic conditions the companyexpects to recover the carrying amount of all its assets. In developing the assumptionsrelating to the possible future uncertainties in the global economic conditions because ofthis pandemic the Company as at date of approval of the financial statements has usedInternal and external sources of information including credit reports related informationand economic forecasts. The actual impact of the COVID-19 pandemic may be different fromthat estimated as at the date of approval of these standalone financial results and thecompany will continue to closely monitor any material changes to the economic conditionsin the future.
Your Directors further state that no disclosure or reporting isrequired in respect of the following items as there were no transactions on these itemsduring the year under review:
a. The Company has neither accepted nor renewed any deposits from thepublic or otherwise in terms of Section 73 of the Companies Act 2013 read with the rulesmade thereunder and as such no amount on account of principal or interest thereon ondeposits from public was outstanding as on the date of Balance Sheet.
b. There is no issue of equity shares with differential rights as todividend voting or otherwise.
c. There were no significant or material orders passed by theRegulators Courts or Tribunals which impact the going concern status and Company'soperations in future.
d. There were no material changes and commitments affecting financialposition of the company between 31st March 2020 and the date of this Board'sReport.
e. The Auditors have not reported any matter under Section 143(12) ofthe Companies Act 2013 and therefore no detail is required to be disclosed under Section134(3)(ca) of the Act.
f. Maintenance of cost records as specified by the Central Governmentunder sub-section (1) of section 148 of the Companies Act 2013 is not required by theCompany and accordingly such accounts and records are neither made nor maintained.
g. Pursuant to the SEBI (Share Based Employee Benefits) Regulations2014 and the Company's Employee Stock Option Scheme 2011 & Employee Stock OptionScheme 2015 the Company during the year 2015 - 16 has granted employee stock optionsthrough a trust set up for the same. The shares purchased by the trust for the saidschemes are held by the trustee(s) for the benefit of the employees and are transferred toemployee(s) when the employee(s) exercise the vested option. Also the said trust is a non- promoter and non - public shareholder and it is herewith not exercising its votingrights. Hence pursuant to Section 67(3) read with Rule 16(4) of the Companies (ShareCapital and Debentures) Rules 2014 the disclosures in respect of voting rights notexercised directly by the employees in respect of shares to which the scheme relates to bemade in the Board's report is not applicable.
APPRECIATIONS & ACKNOWLEDGEMENTS
Your Directors look to the future with confidence. Your Directors wishto express their appreciation for the valuable support and co-operation received fromcustomers vendors investors lenders business associates and bankers for theircontinued support during the year. The Directors also thank the State GovernmentsGovernment of India Governments of various countries other Government Departmentsparticularly Ministry of Electronics and Information Technology the Ministry of Commercethe Ministry of Finance the Ministry of Corporate Affairs the Income Tax DepartmentReserve Bank of India and other government agencies for their support and looks forwardto their continued support. Your Directors are especially indebted to employees of theCompany and its subsidiaries at all levels who through their dedication co-operationsupport and dynamic work have enabled the company to achieve rapid growth. The Board alsowishes to place on record their appreciation of business constituents like SEBI BSE NSENSDL CDSL etc. for their continued support for the growth of the Company. Your Directorsseek and look forward to the same support during the future years of growth.
| || |
For and on behalf of the Board of Directors
| ||Sd/- ||Sd/- |
|Hyderabad ||Dharani Raghurama Swaroop ||K Jayalakshmi Kumari |
|June 22 2020 ||Whole - time Director ||Independent Director |
| ||DIN:00453250 ||DIN: 03423518 |