Capricorn Systems Global Solutions Ltd Directors Report.

To,

The Members,

CAPRICORN SYSTEMS GLOBAL SOLUTIONS LIMITED

Your Directors have pleasure in presenting the 34th (Thirty Fourth) Annual Report of your Company together with the Audited Accounts for the financial year ended 31st March, 2019 and the report of the Auditors thereon.

FINANCIAL RESULTS

The summarized results of your Company are given in the table below:

(Figures in Rs.) (Figures in Rs.)
Particulars 31-03-2019 31-03-2018
Revenue from Operations 3,71,00,148 3,57,67,575
Other Income 0 0
Total Income 3,71,00,148 3,57,67,575
Employee Benefit Expense 3,27,20,715 3,12,27,236
Depreciation and Amortization Expense 3,14,559 3,77,210
Other Expenses 42,75,832 37,10,153
Total Expenditure 3,73,11,106 3,53,14,599
Profit from operations before other income (2,10,958) 4,52,976
Other Income 8,37,260 12,34,573
Profit/(Loss) Before finance costs and exceptional items 6,26,302 16,87,549
Less : Finance Cost 6,41,361 11,91,719
Profit / (Loss) Before Tax (15,059) 4,95,830
Less : Tax Expense 52,693 2,75,685
Other Comprehensive Income (Net of Tax) (1,35,12,773) -
Profit / (Loss) for the year after Tax (1,35,80,524) 2,20,146

THE STATE OF THE COMPANY AFFAIRS

The operations of the company have been constant over the years. The revenue of the company has witnessed a marginal increase during the year. However some of the long term contracts that the company is entered have come up for review during the year and the company was successful in extending the same for a shorter period of time ranging from 6-9 months Considering the impact of the possible closure of some of the contracts company is making efforts to acquire new contracts from various sources.

REVIEW OF OPERATIONS:

Turnover for the year ended 31st March, 2019 was Rs. 3,71,00,148/- as against Rs. 35,767,575/- in the previous year. The Net Profit for the year was at Rs. (1,35,80,524) as against Rs 2,20,146/- in the previous year.

Material Changes and Commitments, if any, affecting the Financial Position of the Company which have occurred between the end of the financial year of the company to which the financial statements relate and the date of the report.

There are no Material Changes and Commitments affecting the financial position of the Company which occurred between the end of the financial year to which the financial statements relate and the date of this Report.

APPROPRIATION

INDUSTRY STRUCTURE AND DEVELOPMENT:

The company is engaged in the business of software development, providing Business Process 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 and the company is expecting to expand its business areas to capitalize on the its long standing tract record for its growing.

LISTING OF EQUITY SHARES:

The Companys Equity shares are presently listed on BSE Limited and the Company has paid the Annual Listing Fees to the said Stock Exchanges for the financial year 2018-2019

DIVIDEND

To conserve the resources in the Expansion of the business operations, your directors did not recommend any dividend during the year.

TRANSFER TO RESERVES

There was transfer of Rs (1,35,80,524)/- to Reserves during the financial year under report.

SHARE CAPITAL

The Authorized Share Capital of the Company remains unchanged during the financial year 2018-19

CHANGE IN NAUTURE OF BUSINESS, IF ANY:

During the year under review, there has been no change in the nature of business of the Company.

PERFORMANCE AND FINANCIAL POSITION OF THE SUBSIDIARY COMPANY:

The Company does not have any subsidiaries or associate companies. Hence the required information under this head is not being attached to the report.

CORPORATE GOVERNANCE:

The Corporate Governance Report and a certificate by the Statutory Auditors regarding compliance of the conditions of corporate governance by your Company as stipulated in Listing Regulations SEBI 2015 of the Listing Agreement with Stock Exchanges are annexed to this Report.

STATEMENT ON DECLARATION GIVEN BY INDEPENDENT DIRECTORS:

All the Independent Directors have given declarations of Independence, as required pursuant to Section 149 (7) of the Companies Act, 2013 stating that they meet the criteria of Independence as provided in subsection (6) of Section 149 of the Companies Act, 2013.

NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS

The Board of Directors duly met 5 times during the year viz 29.05.2018, 14.08.2018, 31.08.2018, 14.11.2018, 14.02.2019. The intervening gap between any two Board Meetings was within the period prescribed under the provisions of the Companies Act, 2013. All the recommendations given by the Audit Committee are accepted by the Board.

CHANGE OF DIRECTORS AND MANAGEMENT

During the financial year under the review, there is change in the constitution of the Board of Company.

During the financial year, as per Section 149, 152 read with Schedule IV and all other applicable provisions of the Companies Act, 2013 (including any statutory modification(s) or re-enactment thereof for the time being in force) read with the Companies (Appointment and Qualification of Directors) Rules, 2014 and clause 49 of Listing Agreement, Mr. Valluri Chandra Rao (DIN: 08329674) was appointed as Additonal Director of the company from 14/02/2019.

During the year, Mr Anand Balwantrao Deshmukh, Independent Director [DIN: 03110963] was disqualified u/s 164 (2) of companies act, 2013, the director resigned from the board dated 29/05/2018 as per section 167 of the act and under disqualification provisions as applicable.

During the financial year, pursuant to the provisions of Section 203 of the Companies Act, 2013 read with Companies (Appointment and Remuneration) Rules, 2014 Ms Maruthi Padmaja P was appointed as Company Secretary of Company w.e.f 14/11/2018.

A certificate from M/s. Aakash Agarwal, a practicing Company Secretary has been procured that none of the Directors on the Board of the Company have been debarred or disqualified from being appointed or continuing as directors of companies by the Board/Ministry of Corporate Affairs or any such statutory authority and forms part of this report.

AS PER THE PROVISIONS OF INDEPENDENT DIRECTORS

The performance of the Individual Directors on the Board and the Committees thereof is done by the Board and the Independent Directors in their exclusive meeting done as per the policy formulated by the Board in this regard.

INTERNAL FINANCIAL CONTROL

The Board has adopted the policies and procedures for ensuring the orderly and efficient conduct of its business, including adherence to the Companys policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial disclosures

DIRECTORS RESPONSIBILITY STATEMENT:

Pursuant to the requirement of Section 134(5) of the Act, and based on the representations received from the management, the directors hereby confirm that: i. In the preparation of the annual accounts for the financial year 2018-19, the applicable accounting standards have been followed and there are no material departures; ii. selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for the financial year; iii. and sufficient care to the best of their knowledge and ability for the maintenance of adequate accounting records in accordance with the provisions of the Act. They confirm that there are adequate systems and controls for safeguarding the assets of 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 financial controls to be followed by the Company and that such internal financial controls are adequate and operating properly; and vi. devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively

RISK AND RISK MITIGATION POLICY:

The operations of the company are dependent on the export to overseas markets The international economic environment directly influences the spending patterns of the industry on the Information Technology. Also with the growing demand for the skilled manpower and ever growing business environment poses risk of availability of skilled man power. With the employee friendly policies the company pursued the employee retention rate has been very high in the company.

CORPORATE SOCIAL RESPONSIBILITY:

Your Company does not fall under any of the criteria specified under the provisions of Companies Act, 2013. Hence the Company has not constituted any committee and is not required 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 Act during the financial year 2018-2019.

TRANSACTIONS WITH RELATED PARTIES:

There are related party transactions during the year except that entered in the ordinary course of business and on arms length basis. There were no materially significant related party transactions between your Company and the Directors, promoters, Key Managerial Personnel and other designated persons which may have a potential conflict with the interest of company at large.

Form AOC 2 for disclosure of particulars of contracts / arrangements, entered into by your company with related parties is attached herewith 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 the Companies Act, 2013 is annexed herewith as Annexure II.

DIRECTORS REPORT:

Particulars of employees pursuant to Section 134 (3) (q) and Section 197 (12) of the Companies Act, 2013 read with Rule 5 (1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 forming part of the Directors Report for the year ended March 31, 2019 as Annexure III.

PARTICULARS OF EMPLOYEES:

There are no employees in the company whose names are required to be furnished as per the information and statement containing particulars of employees required pursuant to Section 197 of the Companies Act, 2013 read with Rule 5 (1) and Rule 5 (2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

The Nomination and remuneration committee of the Company has affirmed that the remuneration is as per the Remuneration policy of the Company.

Your Directors take this opportunity to record their deep appreciation of the continuous 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 Rule 12(1) of the Companies (Management and Administration) Rules, 2014 an extract of Annual Return in Form MGT 9 forms part of this report as Annexure IV.

DEPOSITS:

During the year under review your Company has not accepted any fixed deposits and, as such, no amount of principal or interest was outstanding as of the Balance Sheet date.

SECRETARIAL AUDITOR:

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 the Company has appointed M/s Aakash Agarwal, Company Secretaries to undertake the Secretarial Audit of the Company for the financial year 20182019. The Secretarial Audit report is annexed herewith as Annexure V

DISCLOSURE AS PER SEXUAL HARRASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013:

The Company has zero tolerance for sexual harassment at workplace and has adopted a policy on prevention, prohibition and redressal of sexual harassment at workplace in line with the provisions of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the rules framed there under. During the financial year 2018-2019, the Company has not received any complaints on sexual harassment.

GENERAL

Your Directors state that no disclosure or reporting is required in respect of the following 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 under any scheme save and except ESOP referred to in this Report.

4. Cost Audit is not applicable for the financial year 2018-19.

5. No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Companys operations in future.

ACKNOWLEDGEMENT

Your Directors place on record their sincere thanks to bankers, business associates, consultants, and various Government Authorities for their continued support extended to your Companies activities during the year under review. Your Directors also acknowledges gratefully the shareholders for their support and confidence reposed on your Company.

For and on behalf of the Board
For Capricorn Systems Global Solutions Limited
Place: HYDERABAD Sd/-
Date : 30th August 2019 S. Man Mohan Rao
Managing Director
DIN : 00109433