CAPRICORN SYSTEMS GLOBAL SOLUTIONS LIMITED
Your Directors have pleasure in presenting the 31st (Thirty First) Annual Report ofyour Company together with the Audited Accounts for the financial year ended 31st March2017 and the report of the Auditors thereon.
|Particulars ||2016-17 ||2015-16 |
|Total Income ||490.62 ||412.77 |
|Expenditure ||475.45 ||391.71 |
|Profit before Tax Interest and Depreciation ||15.19 ||21.06 |
|Less : Depreciation ||7.68 ||7.83 |
|Less : Interest ||0.00 ||0.00 |
|Profit before Tax ||7.51 ||13.23 |
|Provision for Income Tax ||3.42 ||4.98 |
|Provision for Deferred Tax Liability ||(1.16) ||(0.83) |
|Net Profit after Tax ||5.24 ||9.08 |
|Profit brought forward ||64.33 ||82.67 |
|Balance available for appropriation ||69.57 ||91.75 |
|Profit carried to Balance Sheet ||69.57 ||64.33 |
STATE OF COMPANY'S AFFAIRS: OPERATIONS & FUTURE PROPSECTS:
The operations of the company have been progressing steadily with the support of thelong standing customers. The revenue of the company has witnessed a marginal increaseduring the year. However some of the long term contracts that the company is entered intoare coming up for review with the customers during the 2nd Quarter of FY 2017-18.Considering the prevailing market conditions the company is expecting that some of theorder may not materialise. The company is planning to expand its market reach by exploringnew works . Company with the committed and long standing work force with the lowestemployee turnover is working on development of delivering new technologies.
INDUSTRY STRUCTURE AND DEVELOPMENT:
The company is engaged in the business of software development providing BusinessProcess Out sourcing consultancy services in the fields of software and allied services.The industry is expected to grow at the moderate rate compared to the earlier period andthe company is expecting to expand its business areas to capitalise on the its longstanding tract record for its growing marketing.
LISTING OF EQUITY SHARES:
The Company's Equity shares are presently listed on BSE Limited and the Company haspaid the Annual Listing Fees to the said Stock Exchanges for the financial year 2016 2017.
TRANSFER TO RESERVES:
Profit earned by the company after taxes Amounting Rs.5.24 Lakhs is being transferredto Reserves.
CHANGE IN NAUTURE OF BUSINESS IF ANY:
During the year under review there has been no change in the nature of business of theCompany.
MATERIAL CHANGES AND COMMITMENTS AFFECTING FINANCIAL POSITION BETWEEN THE END OF THEFINANCIAL YEAR AND DATE OF REPORT:
There are no material changes and commitments in the business operations of the Companyfrom thefinancial year ended 31st March 2017 to the date of signing of the DirectorsReport.
PERFORMANCE AND FINANCIAL POSITION OF THE SUBSIDIARY COMPANY:
The Company does not have any subsidiaries or associate companies. Hence the requiredinformation under this head is not being attached to the report.
The Corporate Governance Report and a certificate by the Statutory Auditors regardingcompliance of the conditions of corporate governance by your Company as stipulated inListing Regulations SEBI 2015 of the Listing Agreement with Stock Exchanges are annexedto this Report.
STATEMENT ON DECLARATION GIVEN BY INDEPENDENT DIRECTORS:
All the Independent Directors have given declarations of Independence as requiredpursuant to Section 149 (7) of the Companies Act 2013 stating that they meet the criteriaof Independence as provided in subsection (6) of Section 149 of the Companies Act 2013.
MEETING OF INDEPENDENT DIRECTORS:
The performance of the Individual Directors on the Board and the Committees thereof isdone by the Board and the Independent Directors in their exclusive meeting done as per thepolicy formulated by the Board in this regard.
In terms of the provisions of Section 177 of the Companies Act 2013 your Company hasformulated a Whistle Blower Policy as a Vigil Mechanism. This mechanism aims forconducting the affairs in a fair and transparent manner by adopting highest standards ofprofessionalism honesty integrity and ethical behavior. All permanent employees of theCompany are covered under the policy.
This mechanism is for the employees to report concerns about unethical behavior actualor suspected fraud or violation of Code of Conduct and Ethics. It also provides foradequate safeguards against victimization of employees who avail of the mechanism andallows direct access to the Chairman of the Audit Committee in exceptional cases.
CHANGES IN DIRECTORS:
One of the independent director's of the company Mr. G. Ramesh Babu has resigned fromthe board of the company due to health grounds with effect from 30th August' 2017. Theboard places on record his contribution to the company
CHANGES IN KEY MANAGERIAL PERSONNEL:
There have been no changes in the Key Managerial Personnel.
NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS:
During the year under review 6 Board meetings were held during the Financial Year2016-17 on the followingdates:- 30/05/2016 12/08/2016 31/08/2016 30/09/2016 14/11/2016& 14/02/2017.The intervening gap between any two Board Meetings was within the periodprescribed under the provisions of the Companies Act 2013. All the recommendations givenby the Audit Committee are accepted by the Board.
INTERNAL FINANCIAL CONTROL:
The Board has adopted the policies and procedures for ensuring the orderly andefficient conduct of its business including adherence to the Company's policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial disclosures.
DIRECTORS' RESPONSIBILITY STATEMENT:
Pursuant to the requirement of Section 134(5) of the Act and based on therepresentations received from the management the directors hereby confirm that: i. in thepreparation of the annual accounts for the financial year 20162017 the applicableaccounting standards have been followed and there are no material departures; ii. selectedsuch accounting policies and applied them consistently and made judgments and estimatesthat are reasonable and prudent so as to give a true and fair view of the state of affairsof the Company at the end of the financial year and of the profit of the Company for thefinancial year; iii. and sufficient care to the best of their knowledge and ability forthe maintenance of adequate accounting records in accordance with the provisions of theAct. They confirm that there are adequate systems and controls for safeguarding the assetsof the Company and for preventing and detecting fraud and other irregularities; iv.prepared the annual accounts on a going concern basis; v. laid down internal financialcontrols to be followed by the Company and that such internal financial controls areadequate and operating properly; and vi. devised proper systems to ensure compliance withthe provisions of all applicable laws and that such systems were adequate and operatingeffectively
RISK AND RISK MITIGATION POLICY:
The operations of the company are dependent on the export to overseas markets Theinternational economic environment directly influences the spending patterns of theindustry on the Information Technology. Also with the growing demand for the skilledmanpower and ever growing business environment poses risk of availability of skilled manpower. With the employee friendly policies the company pursued the employee retention ratehas been very high in the company.
CORPORATE SOCIAL RESPONSIBILITY:
Your Company does not fall under any of the criteria specified under the provisions ofCompanies Act 2013. Hence the Company has not constituted any committee and is notrequired to furnish information required under the provisions of the said Act.
PARTICULARS OF LOANS GUARANTEES AND INVESTMENTS:
There have been no loans guarantees and investments under Section 186 of the Actduring the financial year 20162017.
TRANSACTIONS WITH RELATED PARTIES:
There are related party transactions during the year except that entered in theordinary course of business and on arm's length basis. There were no materiallysignificant related party transactions between your Company and the Directors promotersKey Managerial Personnel and other designated persons which may have a potential conflictwith the interest of company at large.Form AOC 2 for disclosure of particulars ofcontracts / arrangements entered into by your company with related parties is attachedherewith as Annexure I.
TECHNOLOGY ABSORPTION ENERGY CONSERVATION & FOREIGN EXCHANGE EARNINGS AND OUTGO:
Information in accordance with clause (m) of sub section (3) of Section 134 of theCompanies Act 2013 is annexed herewith as Annexure II.
Particulars of employees pursuant to Section 134 (3) (q) and Section 197 (12) of theCompanies Act 2013 read with Rule 5 (1) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 forming part of the Directors' Report for the year endedMarch 31 2017 as Annexure III.
PARTICULARS OF EMPLOYEES:
There are no employees in the company whose names are required to be furnished as perthe information and statement containing particulars of employees required pursuant toSection 197 of the Companies Act 2013 read with Rule 5 (1) and Rule 5 (2) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014.
The Nomination and remuneration committee of the Company has affirmed that theremuneration is as per the Remuneration policy of the Company.
Your Directors take this opportunity to record their deep appreciation of thecontinuous support and contribution from all employees of the Company.
EXTRACT OF ANNUAL RETURN:
As required under Sub-Section (3) of Section 92 of the Companies Act 2013 and Rule12(1) of the Companies (Management and Administration) Rules 2014 an extract of AnnualReturn in Form MGT 9 forms part of this report as Annexure IV.
During the year under review your Company has not accepted any fixed deposits and assuch no amount of principal or interest was outstanding as of the Balance Sheet date.
AUDITORS: Statutory Auditors:
The Companies Act'2013('The Act') was notified effective April12014. Section 139 ofthe Act lays down the criteria for appointment and mandatory rotation of statutoryauditors. Pursuant to Section 139 of the Act and Rules made thereunder it is mandatory torotate the statutory auditors on completion of two terms of five consecutive years. TheRules also lays down the transitional period that can be served by the existing auditorsdepending on the number of consecutive for which an audit firm has been functioning asauditor in the same company. The incumbent auditors M/s. Satyanarayana &Co (FirmRegistration No: 003680S have served the company for over 10 years before the Act wasnotified and will be completing the maximum number of transitional period ( Three Years)at the ensuring 32nd AGM .
The Audit Committee has proposed an the Board has recommended the appointment ofCMT& Associates Chartered Accountants (Firm Registration No: 011515S) as StatutoryAuditors of the Company. This appointment is effective the year ending March 31 2018. CMT& Associates will hold office for a period of Five Consecutive Years from theconclusion of the 32nd Annual General Meeting of the company till the conclusion of the41st Annual General Meeting to be held in 2022. The First Year of Audit will be of thefinancial statements for the year ending March31 2018 which will include the limitedreview of financial statements for the year.
Pursuant to the provisions of Section 204 of the Companies Act 2013 and Rule 9 of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 the Companyhas appointed CS Sudheer Reddy Gundu Practiciting Company Secretaries M.No. A35278 C.P.No. 18073 to undertake the Secretarial Audit of the Company for the financial year20162017. The Secretarial Audit report is annexed herewith as Annexure V
DISCLOSURE AS PER SEXUAL HARRASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITION ANDREDRESSAL) ACT 2013:
The Company has zero tolerance for sexual harassment at workplace and has adopted apolicy on prevention prohibition and redressal of sexual harassment at workplace in linewith the provisions of Sexual Harassment of Women at Workplace (Prevention Prohibitionand Redressal) Act 2013 and the rules framed there under. During the financial year2016-2017 the Company has not received any complaints on sexual harassment.
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:
1. Details relating to deposits covered under Chapter V of the Act.
2. Issue of equity shares with differential rights as to dividend voting or otherwise.
3. Issue of shares (including sweat equity shares) to employees of the Company underany scheme save and except ESOP referred to in this Report.
4. Cost Audit is not applicable for the financial year 2016-17.
5. No significant or material orders were passed by the Regulators or Courts orTribunals which impact the going concern status and Company's operations in future.
Your Directors place on record their appreciation for the assistance and co-operationextended by the Bankers STPI Customs and Central Excise and various State and CentralGovernment Agencies. Your Directors also thank all the Customers for their continuoussupport Employees for their continued dedicated services Members for their valuablesupport and confidence in the Company.
For and on behalf of the Board
For Capricorn Systems Global Solutions Limited
Date : 31st August 2017 Sd/-
S. Man Mohan Rao
DIN : 00109433