Your Directors present their Report together with the audited financial statements forthe year ended March 31 2017.
(In INR Lakhs)
|Particulars ||Consolidated Results ||Standalone Results |
| ||FY 2016-17 ||FY 2015-16 ||FY 2016-17 ||FY 2015-16 |
|Revenue from operations ||10060.36 ||6582.49 ||3865.55 ||2945.33 |
|Expenses ||7854.94 ||5439.60 ||3396.21 ||2463.16 |
|Depreciation & Amortization ||379.12 ||578.28 ||96.01 ||309.85 |
|Finance Charges ||133.40 ||49.27 ||13.80 ||3.19 |
|Other Income ||127.29 ||139.14 ||90.41 ||143.61 |
|Profit from Ordinary Activities ||1820.19 ||654.48 ||694.22 ||312.73 |
|Exceptional Items ||(244.28) ||- ||(244.28) ||- |
|Tax Expense / (Tax Benefit) ||376.18 ||(251.21) ||269.86 ||(245.77) |
|Net Profit ||1688.30 ||905.69 ||424.36 ||558.50 |
|Reserves & Surplus ||2569.02 ||1915.82 ||756.43 ||1309.20 |
REVIEW OF OPERATIONS / STATE OF COMPANY'S AFFAIRS FOR THE FY 2016 - 17
During the financial year under review the revenue of your Company grew by 31% andincreased by INR 920.22 Lakhs on a Standalone basis. Further total revenue on aconsolidated basis increased to INR 10060.36 Lakhs as compared to the previous year'stotal revenue of INR 6582.49 Lakhs at an annual growth rate of 53%.
The Standalone Profit before Tax and after exceptional items stood at INR 694.22 Lakhsas compared to INR 312.73 Lakhs in the previous year and the consolidated Profit beforeTax and after exceptional items stood at INR 2064.48 Lakhs as compared to INR 654.48 Lakhsin the previous year. The Standalone PAT (Profit after Tax) decreased to INR 424.36 Lakhsas from INR 558.50 Lakhs in the previous year at a rate of 24% and the consolidated PATincreased to INR1688.30 Lakhs as from INR 905.69 Lakhs in the previous year at a growthrate of 86%. The exceptional item represent reversal of goodwill amortization of Rs.244.28 Lakhs for the year ended March 31 2017.
In the financial year 2016-17 overall the company's performance is satisfactorybecause of improved topline sales. Considerable investments have been made in thefinancial year 2016-17 through its subsidiaries to expand its operations.
Detailed analysis of financial statements is given in Management Discussion andAnalysis Report forming part of this Annual Report.
TRANSFER TO RESERVES
The Board of Directors did not propose to transfer any amount to reserves for theperiod under review.
Keeping in view the expected cash flow requirements and in order to conserve theresources for future business operations and for the future growth of the Company theBoard of Directors were not able to recommend any dividend for the financial year ended 31stMarch 2017.
During the year the authorized share capital and paid up capital of the Companyremained unchanged at INR 300000000/- divided into 30000000 equity shares of INR 10/-each & INR 196310150/- divided into 19631015 equity shares of INR 10/- eachrespectively.
SCHEME OF REDUCTION OF CAPITAL
In order to present a true and factual financial position of the Company the Board ofDirectors of the Company approved the draft Scheme of Reduction of Capital on 18thNovember 2015 to utilize the balance lying in the Securities Premium Account amounting toINR 2252.16 Lakhs of the Company to write off the entire Goodwill amounting to INR 977.14Lakhs and the balance against the accumulated losses to the extent of INR 1275.02 Lakhs ofthe Company. The Company has obtained member's approval for the same through EGM dated 06thApril 2016.
The Hon'ble High Court of Judicature at Hyderabad has approved the Scheme of Reductionof Capital and a certified copy of order dated 5th October 2016 has been received by theCompany. The Registrar of Companies at Hyderabad has registered the certified copy of theorder and the minute approved by the Hon'ble High Court on January 09 2017. Hencepursuant to Section 103(2) of the Companies Act 1956 necessary entries have been passedduring the year 2016-17. As per the approved scheme Goodwill amounting to INR 977.14Lakhs and accumulated losses of INR 1275.02 Lakhs were adjusted against the SecuritiesPremium Account available as on 31.3.2015.
The Reduction of paid-up share capital of the Company by way of writing off of thelosses and the goodwill of the Company against the amount lying in the securities premiumaccount of the Company does not involve reduction in the issued subscribed paid up sharecapital of the Company any payment of the paid up share capital to the shareholders ofthe Company nor does it result in extinguishment of any liability or diminution of anyliability.
The detailed Scheme on the same and other related documents are available on theCompany's website. (URL: http://www.ctepl.com/investors/)
REPORT ON SUBSIDIARIES
During the year under review a subsidiary and a step-down subsidiary to CambridgeTechnology Enterprises Ltd were incorporated viz. Cambridge innovations Private Ltd.India and Cambridge Innovations Capital LLC USA respectively.Cambridge InnovationsCapital LLC USA is a subsidiary of Cambridge Technology Inc. USA a wholly ownedsubsidiary company.
As on March 31 2017 the Company has 4 wholly-owned subsidiaries viz. CambridgeTechnology Inc. USA Cambridge Technology Investments Pte. Ltd. Singapore CambridgeBizserve Private Limited & Cambridge Innovations Private Limited.
The consolidated financial statements of the Company including its subsidiaries havebeen prepared in accordance with Section 129(3) of the Companies Act 2013 which formspart of this Annual Report. Further a statement containing the salient features offinancial statement of our subsidiaries in the prescribed format AOC-1 as per theCompanies Act 2013 is appended as Annexure - 1 to the Board's Report. The saidstatement also provides details of performance and financial position of each of thesubsidiaries.
As required under Section 136 of the Companies Act 2013 the audited financialstatements including the consolidated financial statements and related information of theCompany and audited accounts of each of its subsidiaries are available on the websitewww.ctepl.com. These documents will also be available for inspection during the businesshours at the registered office of the Company and any member who wish to get copies ofsuch financial statements may write to the Company for such requirement.
Cambridge Technology Inc. USAhad net revenue of INR 9437.12 lakhs during the year ascompared to INR 6813.30 lakhs revenue during the previous financial year. The net profitis INR1474.74 lakhs in FY2017 as compared to INR 360.69 lakhs in FY2016. The contributionof Cambridge Technology Inc.USA to the overall performance of the company is in the formof revenue earned by the company by rendering its services to Cambridge Technology Inc.amounting to INR 3235.57 lakhs.
Cambridge Technology Investments Pte. Ltd Singaporehad net revenue of INR 30.13 lakhsin FY 2017 as compared to INR 213.09 lakhs revenue during the previous financial year. Thetotal loss stood at INR 88.95 lakhs in FY 2017 as against INR 7.66 lakhs in FY 2016.
Cambridge Bizserve Private Limited & Cambridge Innovations Private Limited wholly owned subsidiary companies has not commenced its operations and CambridgeInnovation Capital LLC USA a step down subsidiary company has no revenue fromits operations as on March 31 2017.
DETAILS OF DIRECTORS / KEY MANAGERIAL PERSONNEL
The Board of Directors of your Company comprises of 6 (six) Directors as on the date ofthis report representing the optimum blend of professionalism knowledge and having variedexperience in different disciplines of corporate functioning. Of these 3 (three)Directors are Independent Directors.
Retirement by rotation
Pursuant to provisions of Section 152 of the Companies Act 2013 read with theCompanies (Appointment and Qualification of Directors) Rules 2014 Mr. Aashish Kalra(DIN: 01878010) is liable to retire by rotation at the ensuing Annual General Meeting andbeing eligible offers himself for reappointment to the office of directorship. Your Boardof Directors recommend his re-appointment.
Appointments & Resignation
There are no appointments and resignation of Directors during the year 2016-17.
BOARD AND COMMITTEE MEETINGS
The Board met 06 (six) times during the year. Details of the composition of the Boardand its Committees and of the meetings held and attendance of the Directors at suchmeetings are provided in the Corporate Governance Report. The intervening gap between theMeetings was within the period prescribed under the Section 173(1) of Companies Act 2013and Regulation 17(2) SEBI (LODR) Regulations 2015.
DECLARATION BY INDEPENDENT DIRECTORS
All the Independent Directors have given a declaration that they meet the criteria ofindependence as laid down under Section 149 (6) of the Companies Act 2013 read with therules made thereunder and Regulation 16(1)(b) of SEBI(LODR)Regulations 2015.
The Company at its various meetings held during the financial year 2016-17 hadfamiliarized the Independent Directors.The Independent Directors of the company have beenbriefed at the meetings of the Board / Committees thereof on the matters such as theirroles rights functions duties & responsibilities in the Company nature of theindustry in which the Company operates the business models and operations of the Companyfinancial results of the Company and that of its subsidiary companies update on statutoryand regulatory changes and impact thereof business strategy of the company riskmanagement board governance human resources and overview of board evaluation andprocedures. They are made to interact with senior management personnel and are given allthe documents reports and internal policies sought by them for enabling a goodunderstanding of the Company its various operations and the industry of which it is apart which enable the Directors to contribute significantly to the Company.
Details of familiarization programs extended to the Independent Directors during theyear are also disclosed on the Company website from time to time.
PERFORMANCE EVALUATION NOMINATION & REMUNERATION POLICY
Pursuant to the provisions of Companies Act2013 read with the rules made thereunderand SEBI (LODR) Regulations 2015 the performance evaluation of individual DirectorsBoard and its Committees was carried out.
The requisite details as required by Section 134(3) Section 178(3) & (4) ofCompanies Act 2013 and Regulation 34(2) of SEBI (LODR) Regulations 2015 is providedelsewhere in this report and/ or Corporate Governance Report.
Performance evaluation nomination and remuneration policy is attached as an annexure 2to Corporate Governance Report and the same is available on the website of the Company athttp://www.ctepl.com/pdfs/investors/Performance_evaluation_nomination_remuneration_policy.pdf.
EVALUATION OF PERFORMANCE OF THE BOARD ITS COMMITTEES AND DIRECTORS
Pursuant to the provisions of the Companies Act 2013 and SEBI (LODR) Regulations2015 the Board of Directors has carried out an annual evaluation of its own performanceand that of its Committees and individual Directors.
The performance of the Board Committees and individual Directors was evaluated by theBoard seeking inputs from all the Directors and chairperson. The performance of theCommittees was evaluated by the Board seeking inputs from the Committee members andChairperson. The same was done through evaluation forms.
The criteria for performance evaluation of the Board include aspects like contributionof the board to the development strategy contribution of the board to ensure robust andeffective risk management composition of the board and its committees right balance ofknowledge and skills to maximize performance Board response to any problems or crisisthat arose matters specifically reserved for the board Board communication with themanagement team employees and others effectiveness of its use of the Annual GeneralMeeting and the annual report updating to the Board with the latest developments in theregulatory environment and the market Conduct of Board Meetings at suitable lengthmanagement response to the Board receipt of right information and quality of timelyinformation by the Board etc.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to Section 134 (3) (c) and 134 (5) of the Companies Act 2013 and to the bestof their knowledge and ability the Board of Directors confirm that: a) In preparation ofthe annual accounts for the financial year ended March 31 2017 the applicable accountingstandards have been followed and there were no material departures from prescribedaccounting standards; 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 havetaken proper and sufficient care for the maintenance of adequate accounting records inaccordance with the provisions of this Act for safeguarding the assets of the company andfor preventing and detecting fraud and other irregularities; d) They have prepared theannual accounts on a going concern basis; e) They have laid down internal financialcontrols to be followed by the company and that such internal financial controls areadequate and are operating effectively; and f) They have devised proper systems to ensurecompliance with the provisions of all applicable laws and that such systems are adequateand operating effectively.
STOCK EXCHANGE LISTING
Presently the Equity Shares of the Company are listed on the BSE Limited (BSE) and theNational Stock Exchange of India Limited. The Company confirms that it has paid the AnnualListing Fees to the Bombay Stock Exchange Limited & National Stock Exchange of IndiaLimited for the year 2016-17.
AUDITORS & AUDITORS' REPORT
There are no qualifications reservation adverse remarks or disclaimer made by theStatutory Auditors in their Report. The Company has received audit report with unmodifiedopinion for both standalone and consolidated audited financial statements of the Companyfor the financial year ended March 31 2017 from the statutory auditors M/s. Anandam&Co. Chartered Accountants.
M/s. Anandam & Co. Chartered Accountants were appointed as Statutory Auditors ofthe Company by the members at the 17th Annual General Meeting held on September30 2016 for a term of 5 consecutive years subject to ratification by the Members at everyAnnual General Meeting.
In this regard M/s. Anandam & Co. Chartered Accountants have submitted theirwritten consent that they are eligible and qualified to be re-appointed as StatutoryAuditors of the Company in terms of Section 139 of the Companies Act 2013 and alsosatisfy the criteria provided in Section 141 of the Companies Act 2013.
Accordingly the Board recommends ratification of the appointment of M/s. Anandam &Co. Chartered Accountants as the Statutory Auditors of the Company at the ensuing AnnualGeneral Meeting.
Pursuant to the provisions of Section 204 of the Companies Act 2013 read with theCompanies (Appointment and remuneration of Managerial personnel) Rules 2014. M/s. B.Krishnaveni a Company Secretary in Practice was appointed to undertake the SecretarialAudit of the Company for the financial year 2016-17. The Secretarial Audit Report forfinancial year 2016-17 forms part of the Annual Report as Annexure 2 to the Board'sReport.
There are no qualifications reservation adverse remarks or disclaimer made by theSecretarial Auditor in her Report.
EXTRACT OF ANNUAL RETURN
In accordance with Section 134 (3)(a) of the Companies Act 2013 an extract of theAnnual Return in the prescribed format is appended as Annexure 3 to the Board'sReport.
PARTICULARS OF EMPLOYEES
The information required under Section 197 (12) of the Act read with Rule 5(1) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 as amendedis annexed as Annexure 4 to this report.
The information required under Rule 5 (2) and (3) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 is provided in the Annexure 4 formingpart of the Report.
Remuneration / fees to Director from wholly owned subsidiary
During the financial year 2016-17 Mr. Aashish Kalra Chairman & CEO Whole time Director of the Company received remuneration of INR 5199475/- from CambridgeTechnology Inc. USA a wholly owned subsidiary Company.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS UNDER SECTION 186
Particulars of loans guarantees and investments if any made by the Company pursuantto Section 186 of the Companies Act 2013 forms part of the notes to the financialstatements provided in this Annual Report.
TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND
In terms of Section 125 of the Companies Act 2013 or Section 205C of the CompaniesAct 1956 read with the Investor Education and Protection Fund(Awareness and Protection ofInvestor) Rules 2001 during the financial year ended 31 March 2016 the Company hascredited an aggregate amount of INR 84046/- to the Investor Education and ProtectionFund(IEPF). There is no outstanding amount to be transferred to Investor Education andProtection Fund during the year 2016 17 as no dividend was declared in any of thefinancial year(s) consequent to FY 2007 08.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO A.CONSERVATION OF ENERGY: The operations of the Company involve low energy consumption.
However adequate measures have been taken to conserve energy wherever practicable.
B. TECHNOLOGY ABSORPTION ADAPTATION AND INNOVATION: The Company continues to usethe latest technologies for improving the quality of its operations. Provision of state ofthe art communication facilities to all software development centers and total technologysolutions to its clients contribute to technology absorption and innovation.
C. FOREIGN EXCHANGE EARNINGS AND OUTGO: The foreign exchange earned in terms ofactual inflows during the year and the foreign exchange outgo during the year in terms ofactual outflows:
|Particulars ||Current year ||Previous year |
| ||31.03.2017 ||31.03.2016 |
|Foreign exchange earnings ||3235.57 ||2541.41 |
|Foreign exchange outgo: ||Nil ||Nil |
|Travel related Expenses ||15.27 ||35.07 |
ADEQUACY OF INTERNAL FINANCIAL CONTROL SYSTEM
Based on the framework of internal financial controls and compliance systemsestablished and maintained by the Company work performed by the Internal Statutory andSecretarial Auditors and the reviews performed by Management and the relevant BoardCommittees including the Audit Committee the Board is of the opinion that the Company'sinternal financial controls were adequate and effective during the financial year 2016-17.
The Company has in place adequate internal financial controls commensurate with thesize and needs of the business. These controls ensures the orderly and efficient conductof its business including adherence to the company's policies identification of areas ofimprovement safeguarding of its assets from unauthorized use the prevention anddetection of frauds and errors the accuracy and completeness of the accounting recordsand timely preparation of reliable financial statements and / or disclosures.The detailsof adequacy of Internal Financial Controls are given in the Management Discussion andAnalysis Report.
VIGIL MECHANISM / WHISTLE BLOWER POLICY
The requisite details as required by Section 177 of Companies Act 2013 and Regulation22 & 34 (3) of SEBI (LODR) Regulations 2015 is provided in the Corporate GovernanceReport.
The Whistleblower policy is available on the website of the Company. Weblink: http://www.ctepl.com/pdfs/investors/Whistle_Blower_Policy.pdf
PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE
The Company is committed to maintaining a productive work environment for all itsemployees at various levels in the organization free of sexual harassment anddiscrimination on the basis of gender. The company has framed a policy on Prevention ofSexual Harassment in line with the requirements of the Sexual Harassment of Women atWorkplace (Prevention Prohibition and Redressal) Act 2013. The Company has also set upan an Internal Complaints Committee for providing a redressal mechanism pertaining tosexual harassment against women employees at workplace. There was no case of sexualharassment reported during the year under review.
The Company process is in place to ensure that all the current and future materialrisks of the company are identified assessed/quantified and effective steps are taken tomitigate/ reduce the effects of the risks to ensure proper growth of the business.TheBoard is of the view that there are no elements of risk as on today's date that maythreaten the existence of the Company. Shareholders are also requested to refer a separatesection on Internal Control systems and their adequacy which also deals with RiskManagement in Management Discussion and Analysis Report.
EMPLOYEE STOCK OPTION SCHEME
The details of employee stock options as on 31st March 2017 are given as Annexure5 to this report. Disclosures pursuant to the provisions of Securities and ExchangeBoard of India (Share Based Employee Benefits) Regulations 2014 and as per Section62(1)(b) of the Companies Act 2013 read with Rule 12(9) of the Companies (Share Capitaland Debentures) Rules 2014 for the financial year ended 31 March 2016 are available onwebsite of the Company at http://www.ctepl.com/investors/. The Certificate from theAuditors of the Company under regulation 13 of SEBI (Share Based Employee Benefits)Regulations 2014 stating that the scheme(s) has been implemented in accordance with SEBI(Share Based Employee Benefits) Regulations 2014 as amended from time to time and inaccordance with the resolution of the company in the general meeting will be availablefor inspection by the members at the ensuing AGM.
Mr. Aashish Kalra Chairman & CEO and Mr. T V Siva Prasad CFO & CompanySecretary of the Company have provided Compliance Certificate (annexed as Annexure 6)to the Board in accordance with Regulation 17(8) read with Part B of Schedule II of theSEBI (LODR) Regulations 2015 for the financial year ended 31 March 2017.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
The Company has formulated a Policy on dealing with Related Party Transactions. ThePolicy is disclosed on the website of the Company.
All transactions entered into with Related Parties as defined under the Companies Act2013 and Regulation 23 of the SEBI (LODR) Regulations 2015 during the year were in theordinary course of business and on an arms' length basis and do not attract the provisionsof Section 188 of the Companies Act 2013. Approval of the Board and / or Audit Committeeis obtained as required from time to time. The transactions are also reviewed by auditcommittee from time to time. However there were no such transactions requiring approvalof the Audit Committee/Board/Shareholders as per the Listing Regulations.
During the year the Company had not entered into any contract / arrangement /transactions with Related Parties (except with its subsidiaries) which could be consideredas material in terms of Regulation 23 of the SEBI (LODR) Regulations 2015. In accordancewith applicable accounting standards disclosures on related party transactions have beenmade in the notes to the Financial Statements.
The information relating to particulars of contracts or arrangements with relatedparties referred to in sub Section (1) of section 188 of the Companies Act 2013 in FormAOC-2 is annexed as Annexure 7 forming part of this Report.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT AND CORPORATE GOVERNANCE
The Management Discussion and Analysis Report and the Report on Corporate Governancefor the financial year ended March 31 2017 along with the Auditor's Certificate oncompliance with theprovisions of corporate governance under SEBI (LODR) Regulations 2015is forming part of the Annual Report.
Your Company is committed to maintain the prescribed standards of Corporate Governanceand has taken adequate steps to adhere to all the stipulations laid down in SEBI (LODR)Regulations 2015.
Mrs. B. Krishnaveni a Company Secretary in Practice Secretarial Auditor of thecompany has certified that the conditions of Corporate Governance as stipulated under SEBI(Listing Obligation and Disclosure Requirements) Regulations 2015 have been complied byyour Company and her certificate is annexed as Annexure 8 to this Report.
Your Directors state that no disclosure or reporting is required in respect of thefollowing items as there were no transactions on these items during the year under review:a. The Company has not accepted any deposits from the public or otherwise in terms ofSection 73 of the Companies Act 2013 read with the rules made thereunder and as such noamount on account of principal or interest thereon on deposits from public was outstandingas on the date of Balance Sheet. b. There is no issue equity shares with differentialrights as to dividend voting or otherwise. c. No significant or material orders werepassed by the Regulators Courts or Tribunals which impact the going concern status andCompany's operations in future. d. There were no material changes and commitmentsaffecting financial position of the company between 31st March 2017 and the date of thisBoard's Report. e. The Auditors have not reported any matter under Section 143(12) of theCompanies Act 2013 and therefore no detail is required to be disclosed under Section134(3)(ca) of the Act.
f. During the FY 2016-17 the Company is not required to comply with the provisions ofsection 135 of the Companies Act 2013 relating to Corporate Social Responsibility. g.Pursuant to the SEBI (Share Based Employee Benefits) Regulations 2014 and the Company'sEmployee Stock Option Scheme 2011 & Employee Stock Option Scheme 2015 the Companyduring the year 2015 16 has granted employee stock options through a trust set upfor the same. The shares purchased by the trust for the said schemes are held by thetrustee(s)for the benefit of the employees and the said shares are not yet vested with theemployees. Further as the said trust is a non promoter and non publicshareholder it is herewith not exercising its voting rights. Hence pursuant to Section67(3) read with Rule 16(4) of the Companies (Share Capital and Debentures) Rules 2014the disclosures in respect of voting rights not exercised directly by the employees inrespect of shares to which the scheme relates to be made in the Board's report is notapplicable.
APPRECIATIONS & ACKNOWLEDGEMENTS
Your Directors look to the future with confidence. Your Directors wish to express theirappreciation for the valuable support and co-operation received from customers investorslenders business associates bankers various statutory authorities and society at large.The Directors also thank the State Governments Government of India Governments ofvarious countries other Government Departments and Governmental Agencies. Your Directorsare especially indebted to employees of the Company and its subsidiaries at all levelswho through their dedication co-operation support and dynamic work have enabled thecompany to achieve rapid growth. Your Directors seek and look forward to the same supportduring the future years of growth.
| ||For or on behalf of the Board of Directors |
|Hyderabad ||AashishKalra |
|August 24 2017 ||Chairman & CEO |
| ||(DIN: 01878010) |