To the Members,
The Board of Directors of your Company take pleasure in presenting the
28thAnnual Report on the business and operations of your Company and the Audited Financial
Accounts for the year ended 31st March 2023.
FINANCIAL RESULTS 2022-23
During the year under review, your Company has achieved a turnover of
Rs.5,489.33 lakhs as against Rs. 3,830.72 lakhs in the previous year. The Profit after Tax
stands at Rs.1,168.75 lakhs as against Rs.892.28 lakhs in the previous year. The company
has achieved significant growth in the Turnover and Profits earned.
GLOBALREVENUE
The global revenues for the Company including the business done by the
Wholly Owned Subsidiary for the year under review is Rs. 7,736.56 lakhs as compared to Rs.
5,480.13 lakhs in the previous year.
STATE OF AFFAIRS OF THE COMPANY
In the financial year 2022-23, despite challenging business
environment, your company achieved a growth of 41% in the total revenue and the profit
after tax has increased to Rs.1,168.75 lakhs from Rs. 892.28 lakhs. The increase has been
at 31% as compared to previous year.
The contribution of business from various Geographical areas were:
North America contributed 80% and Rest of the World 20% of the
business.
During the year under review, Business from Offshore Software Services
is Rs.5,485.80 lakhs as against Rs. 3,827.11 lakhs in the previous year. The increase has
been at 43% as compared to previous year. Significant growth has been achieved in the
offshore component of the business.
FUTUREPLANS
Worldwide the business scenario is changing rapidly due to the impact
of pandemic and the geopolitical situation due to the Russia-Ukraine war. The forecast on
Global GDP is low and is estimated to be at 2.8% in 2023. Organizations are forced to make
changes to their business processes using latest technologies to adapt to the new normal.
Increased Offshore work, remote delivery, new compensation models with customers are
likely to happen. AI is opening up new avenues.
This provides opportunities for IT service providers like us. More and
more companies from almost every part of the world are using offshore service providers to
meet their software needs.
The Company is able to successfully implement the work from home model
without diluting the quality of delivery. New systems and automation of processes have
been put into practice to improve the efficiency and monitoring of work.The company has
been growing positively in the offshore software services business and this momentum is
likely to continue this year.
Our client retention and client satisfaction levels have been growing
steadily. We have received many client appreciations and significant amount of repeat
business. Our clients have appreciated the way the projects are handled post pandemic.
Inspite of the disruption, inflation, changes in the geo-political situations in the
economies we operate, we have seen a positive growth in our business. In addition to North
America, our business and customer base from Europe, Australia and Africa is also expected
to grow as planned.
Out-sourced Product development (OPD) market space continues to be the
key focus area for the Company as we have achieved significant success. The performance in
Cloud practice has been very good and it is expected to grow at the same pace. Our plan is
to focus on the existing relationships we have built with customers and grow the business.
Apart from strengthening the presence in the markets in which the company is operating
now, plans are in place to penetrate into new geographies globally.
We expect a positive growth in this year and the Company should perform
better in the ensuing Financial Year 2023-24.
QUALITY
Your company has a strict quality assurance and control programs to
ensure that high level of Quality service is delivered to the customers. Matured and
proven quality management systems are in place based on the requirements of ISO 9001:2015
and 27001:2013 standards.
DIVIDEND
Your Directors recommended a dividend of Rs. 1/- per equity share (i.e.
10% on each equity share having Face value of Rs. 10 each), subject to the approval by the
shareholders at the ensuing Annual General Meeting. The total dividend payout will be of
Rs.50.50 lakhs. During the previous year ended 2021-2022, your Company has paid a dividend
of Rs.50.50 lakhs.
As per Companies (Accounting Standards) Amendment Rules, 2016, dividend
will be recognized as liability on approval of shareholders at the ensuing Annual General
Meeting.
The dividend, if approved by the shareholders, will be paid to those
members whose names appear in the Register of Members as on the date of the Annual General
Meeting.
TRANSFER TO RESERVES
No amount has been transferred to the general reserve.
TRANSFER TO INVESTORS EDUCATION AND PROTECTION FUND
Pursuant to the provisions of the Act, read with Investor Education and
Protection Fund Rules, the shares on which dividends have not been claimed for 7
consecutive years are liable to be transferred in favour of IEPF Authority. The Company
has uploaded the details of the shares which are subject to be transferred in favour of
IEPF Authority, on the website of the Company (www.cgvak.com). Efforts are also made to
coordinate with the Registrar and Share Transfer Agents to locate shareholders who have
not claimed their dues.
SHARE CAPITAL
The Paid-up share capital of the Company as at 31st March, 2023
aggregates to Rs. 5,05,02,000/- comprising 50,50,200 equity shares of Rs. 10/- each fully
paid up.
STATEMENT ON COMPLIANCE OF APPLICABLE SECRETARIAL STANDARDS
The Directors have devised proper system to ensure compliance with the
applicable Secretarial Standards and that such systems are adequate and operating
effectively. The Company has duly complied with Secretarial Standards issued by the
Institute of Company Secretaries of India on the Meeting of the Board of Directors (SS-1)
and General Meeting (SS-2). HUMAN RESOURCE
Your Company firmly believes that employees are its most valued
resource and their efficiency play a key role in achieving defined goals and building a
competitive work environment. Many initiatives have been taken to enhance their Technical,
managerial skills. Also, various employee engagement programs have helped the organization
to achieve higher productivity levels. In its pursuit to attract, retain and develop best
available talents, several programs are regularly conducted at various levels across the
Company. Employee relations continued to be cardinal and harmonious across all levels of
the Company.
MATERIAL CHANGES AND COMMITMENT IF ANY AFFECTING THE FINANCIAL POSITION
OF THE COMPANY OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THIS FINANCIAL
STATEMENTS RELATE AND THE DATE OF THE REPORT
No material changes and commitments affecting the financial position of
the Company occurred between the end of the financial year to which these financial
statements relate and on the date of this report.
DEPOSITORY SYSTEM
The trading in the Equity Shares of your Company is under compulsory
dematerialization mode. As on 31st March, 2023, Equity Shares representing 95.20% of the
equity share capital are in dematerialized form. As the depository system offers numerous
advantages, members are requested to take advantage of the same and avail of the facility
of dematerialization of the Companys shares.
LISTING OF SHARES
The Equity Shares of your Company continue to remain listed with BSE
Limited. The listing fees for the year 2023-24 have been paid to the Stock Exchange. The
Shares of the companies are compulsorily tradable in dematerialized form. INSURANCE
The assets of the Company are adequately insured against fire and such
other risks, as are considered necessary by the Management.
CONSOLIDATED FINANCIAL STATEMENTS
The Consolidated Financial Statements of the Company prepared in
accordance with the applicable Accounting Standards forms a part of this Annual Report.
CORPORATE GOVERNANCE
At CG-VAK, Corporate Governance is not just a legal obligation, the
frame work ensures that all the disclosures and informations provided are precise and
time bound. Transparency, Accountability, Integrity and Independence are the bottom-line
of our Governance. The Company will continue to uphold the true spirit of Corporate
Governance and implement best governance practices.
A detailed report on Corporate Governance, pursuant to the requirements
of SEBI (LODR) is available as a separate section in this Annual Report. The Auditors
report on Corporate Governance, confirming the compliance of conditions of Corporate
Governance as stipulated is annexed as a part of this report.
MANAGEMENT DISCUSSION AND ANALYSIS
Pursuant to Regulation 34 of SEBI (LODR), Regulations 2015, the
Management Discussion and Analysis Report for the year under review is presented in a
separate section forming part of this Annual Report.
DISCLOSURE REQUIREMENTS
Familiarization programme of the Independent Directors:
https://www.cgvakindia.com/investors/#code_of_conduct_and_policiese132-80dc
Policy on Related Party Transactions
https://www.cgvakindia.com/investors/#code_of_conduct_and_policiese132-80dc
Policy on Prevention of Sexual Harassment
https://www.cgvakindia.com/investors/#code_of_conduct_and_policiese132-80dc
Policy on Selection of Directors & remuneration
https://www.cgvakindia.com/investors/#code_of_conduct_and_policiese132-80dc
NUMBER OF MEETINGS OF THE BOARD
The Board met four times during the financial year, the details of
which are given in the Corporate Governance Report that forms part of this Annual Report.
The intervening gap between any two meetings was within the periods prescribed by the
Companies Act, 2013.
AUDIT COMMITTEE
The Audit committee consists of Independent Directors namely Mr. K.
Kathirvel (Chairman), Mr.R.Jayaraman, Mr. R. Krishnaswamy and Mr. G.S. Swaminathan as
other Members.. All the recommendations made by the Audit Committee were accepted by the
Board.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION. FOREIGN EXCHANGE
EARNINGS AND OUTGO
As per the requirement of Section 134 (3)(m) of the Companies Act,
2013, read with Rule 8 (3) of the Companies (Accounts) Rules, 2014, the information
regarding conservation of energy, technology absorption and foreign exchange earnings and
outgo are given below.
Particulars of Energy Conservation, Technology Absorption and Foreign
Exchange Earnings and Outgo as required under Companies (Accounts) Rules, 2014:
A) CONSERVATION OF ENERGY
Your Company uses electrical energy for its equipment such as
air-conditioners, computer terminals, lighting and utilities at work places. As an ongoing
process, the company continued to undertake various measures to conserve energy
B) TECHNOLOGY ABSORPTION
a) Research & Development
The nature of the business of software development involves inbuilt,
constant Research and Development as a part of its process of manufacturing (development).
The Company is developing applications engines, re-usable codes and libraries as a part of
its R&D activities.
b) Technology Absorption
The Company has not absorbed technology from outside.
c) Information regarding imported technology (Imported during last
three years)
| Details of Technology imported |
Technology imported from |
Year of Import |
Status Implementation/absorption |
| NIL |
NA |
NA |
NA |
C) FOREIGN EXCHANGE EARNING AND OUTGO
(Rs. in Lakhs)
| Foreign Exchange Earnings |
5.399.59 |
| Foreign Exchange Outgo |
55.76 |
| Foreign Travel |
20.31 |
| Others |
35.45 |
PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES
In term of the provisions of Section 197(12) of Act read with rules
5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial personnel)
Rules, 2014 a statement showing the names and other particulars of the employees drawing
remuneration in excess of the limits set out in the said rules are provided in the Annual
Report.
Disclosures pertaining to remuneration and other details as required
under section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and
Remuneration of Managerial Personnel) Rules, 2014 are provided in the Annexure -1.
STATEMENT CONCERNING DEVELOPMENT AND IMPLEMENTATION OF RISK MANAGEMENT
POLICY OF THE COMPANY
The Company has adopted a Risk Management Policy for identifying and
managing risk at the strategic, operational and tactical level. The Risk Management policy
has been placed on the website of the Company. At present the Company has not identified
any element of risk which may threaten the existence of the Company.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186
OF THE COMPANIES ACT, 2013
There were no loans and guarantees given or investments made by the
Company under Section 186 of the Companies Act, 2013 during the year under review.
EXPLANATION OR COMMENTS ON QUALIFICATIONS. RESERVATIONS OR ADVERSE
REMARKS OR DISCLAIMERS MADE BY THE AUDITORS AND THE PRACTICING COMPANY SECRETARY IN THEIR
REPORTS
There were no qualifications, reservations or adverse remarks made
either by the Statutory Auditors or by the Practicing Company Secretary in their
respective reports. Your Directors have provided explanation in Annexure - 2 for the
matter of emphasis in the Auditors Report.
CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES
All related party transactions that were entered into during the
financial year were on an arms length basis and were in the ordinary course of
business. There are no materially significant related party transactions made by the
Company with
Promoters, Directors, Key Managerial Personnel or other designated
persons which may have a potential conflict with the interest of the Company at large. All
Related Party Transactions are placed before the Audit Committee as also in the Board for
approval.
The disclosure on related party is annexed herewith as Annexure - 3.
POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION
The current Policy is to have an appropriate mix of executive and
independent directors to maintain the Independence of the Board and separate its functions
of the governance and management. As on 31* March, 2023, the Board consists of 7 members,
one of whom is Non-Executive Chairman, one of whom is Executive or whole time Director,
one of whom is NonExecutive Women Director and Four are Independent Directors. The Board
periodically evaluates the need for change in its composition and size.
The policy of the Company on Directors appointment and
remuneration, including Criteria for determining Qualification, positive attributes,
independence of a director and other matters provided under Sub-Section(3) of Section 178
of the Companies Act, 2013 adopted by the Board, is hosted on the website of our Company.
We affirm that the remuneration paid to the Directors is as per the terms laid out in the
nomination and remuneration policy of the company.
WHOLLY OWNED SUBSIDIARY: CG-VAK SOFTWARE USA INC.
As on 31* March, 2023, your Company has only one wholly owned
subsidiary. Your Companys Wholly Owned Subsidiary at USA, CG-VAK Software USA Inc.
has made a Sales Turnover of US$ 2.87 million during this year, compared to the US$ 2.16
million during the previous year. There has been an increase in revenue by 32.87% over the
previous financial year.
During the year, the Board of Directors reviewed the affairs of the
wholly owned subsidiary. In accordance with Section 129(3) of the Companies Act, 2013, we
have prepared consolidated financial statements of the Company and the wholly owned
subsidiary, which forms part of the Annual Report. Further, a statement containing the
salient features of the financial statement of our wholly owned subsidiary in the
prescribed format AOC-1 is appended as Annexure - 4 to the Boards Report. The
statement also provides the details of performance, financial positions of the wholly
owned subsidiary.
In accordance with Section 136 of the Companies Act, 2013, the audited
financial statement, including the Consolidated Financial Statements and related
information of the Company and the wholly owned subsidiary are available on our website.
These documents will also be available for inspection during the business hours at our
Registered Office.
The Company has no other subsidiary/Joint ventures/associates other
than the above mentioned.
EXTRACT OFANNUAL RETURN
In accordance with section 92(3) of the Companies Act,2013, an extract
of annual return is placed at the website of the Company
(https://www.cgvakindia.com/investors/#1507102947283-afa3fc4b-a401) .
CORPORATE SOCIAL RESPONSIBILITY
The Provisions of CSR are applicable since 01.04.2020 and CGVAK
believes in giving back to the society. A detailed report is appended as Annexure - 5.
DIRECTORS RESPONSIBILITY STATEMENT AS REQUIRED UNDER SECTION
134(3) (C) OF THE COMPANIES ACT, 2013
In accordance with the provisions of Section 134(3)(c) of the Companies
Act, 2013, the Directors would like to state that:
1 In preparation of annual accounts for the financial year ended 31*
March, 2023, the applicable accounting standards have been followed.
2 The Directors have 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 and loss of the Company for that period.
3 The Directors have taken proper and sufficient care towards the
maintenance of adequate accounting records in accordance with the provisions of this Act
for safeguarding the assets of the Company and for preventing and detecting fraud and
other irregularities.
4 The Directors have prepared the annual accounts on a going concern
basis.
5 The Directors have laid down internal financial controls, which are
adequate and are operating effectively.
6 The Directors have devised proper systems to ensure compliance with
the provisions of all applicable laws and such systems are adequate and operating
effectively.
SIGNIFICANT AND MATERIAL ORDERS
The Regional Director (Southern Region), Ministry of Corporate Affairs,
Chennai has compounded offenses during the Financial Year 2021-22. The Company had paid a
Compounding fees of Rs. 3,41,950, subsequent of which The Regional Director (Southern
Region), Ministry of Corporate Affairs, Chennai had issued orders dated 21.09.2021 and
18.11.2021 directing The Registrar of Companies, Coimbatore, Tamil Nadu to withdraw the
prosecutions filed. During the Financial year under review the Company had paid a penalty
of Rs. 55,000/- to the Exchange for delay in disclosure of Related Party Transactions, the
said penalty has been paid.
PUBLIC DEPOSITS
During the year, your Company has not accepted/renewed any Deposits.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
(A) DIRECTORS
Director liable to retirement by rotation
As per the provisions of the Companies Act, 2013, Mrs. S. Latha retires
from office by rotation, and being eligible offer herself for re-appointment at the
ensuing Annual General Meeting of the Company. The Board of Directors recommends her
re-appointment.
(B) KEY MANAGERIAL PERSONNEL
Pursuant to provisions of Section 203 of the Companies Act, 2013, Mr.
G. Suresh, Managing Director & CEO, Mr. P. S. Subramanian, Chief Financial Officer and
Mr. Harcharan. J, Company Secretary and Compliance Officer are the Key Managerial
Personnel of the Company as at 31* March, 2023.
Brief particulars of Directors eligible for reappointment in terms of
SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and the
Secretarial Standards are annexed to the Notice dated 11‘August, 2023 convening the
28‘Annual General Meeting.
DECLARATION BY INDEPENDENT DIRECTORS
The company has received necessary declarations from each independent
Director under section 149(7) of the Companies Act, 2013 that they meet the criteria of
independence laid down in Section 149(6) of the Companies Act 2013 and SEBI (LODR)
Regulations.
BOARD EVALUATION
The evaluation framework for assessing the performance of Directors
comprises of the following key areas:
1. Attendance of Board Meeting and Board Committee Meetings
2. Quality of Contribution to Board deliberations
3. Strategic perspectives or inputs regarding future growth of Company
and its performance
4. Providing perspectives and feedback going beyond information
provided by the management
5. Commitment to shareholders and other stakeholder interests
The evaluation involves self-evaluation by the Board Members and
subsequent assessment by the Board of Directors. A member of the Board will not
participate in the discussion of his/ her evaluation.
VIGIL MECHANISM/WHISTLE BLOWER POLICY
The Company has adopted a Whistle Blower Policy as a mechanism for
employees to report to the management concern about unethical behavior, actual or
suspected fraud or violation of the companys code of conduct and it affirms that no
personnel have been denied access to the Audit Committee. A copy of Whistle Blower Policy
has been placed at our website at www.cgvak.com for reference.
AUDITORS
M/s. SPP & Co, Chartered Accountants, Coimbatore, the Statutory
Auditors of your Company, are to hold office up to the conclusion of the ensuing Annual
General Meeting of the Company.
In line with the requirement of Section 139 (1) of the Companies Act,
2013, the Audit Committee considering the qualifications and experience of M/s. SPP &
Co, Chartered Accountants, Coimbatore, has recommended their reappointment as Statutory
Auditors of the Company to the Board. The Board further recommends their appointment as
Statutory Auditors to hold office from the conclusion of this Annual
General Meeting (AGM) until the conclusion of the 33rd Annual General Meeting of the
Company, subject to the approval of the members in this AGM.
M/s. SPP & Co, Chartered Accountants, Coimbatore, have furnished a
certificate of their eligibility as per Section 141 of the Companies Act, 2013 and have
provided their consent for appointment as Statutory Auditors of the Company.
The Auditors Report for the financial year 31.03.2023 does not contain
any qualification, adverse remarks, reservation or disclaimer.
SECRETARIAL AUDITOR
M/s. LMS Associates, Practicing Company Secretaries (firm Registration
No: S2016TN698100) is appointed to conduct the secretarial audit of the company for
financial year 2023-24, as required under Section 204 of the Companies Act, 2013 and Rules
made there under. The secretarial audit report for FY 2022-23 forms part of the Annual
Report as Annexure 6 to the Boards Report.
COST RECORDS AND COST AUDIT
Maintenance of cost records and requirements of cost audit as
prescribed under the provisions of Section 148(1) of the Companies Act, 2013 are not
applicable for the business activities carried out by the Company.
APPLICATION UNDER INSOLVENCY AND BANKRUPTCY CODE, 2016
The Company has not made any application under the Insolvency and
Bankruptcy Code, 2016 during the Financial Year. DETAILS OF DIFFERENCE BETWEEN AMOUNT
OF VALUATION DONE AT THE TIME OF ONE TIME SETTLEMENT AND THE VALUATION DONE WHILE TAKING
LOAN FROM BANKS OR FINANCIAL INSTITUTIONS ALONG WITH REASONS THEREOF
The Company has not made any such valuation during the Financial Year.
DISCLOSURE AS REQUIRED UNDER SECTION 22 OF SEXUAL HARASSMENT OF WOMEN
AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013.
The Company has in this place an Anti-Sexual Harassment Policy in line
with the requirements of the sexual harassment of women at workplace (prevention,
prohibition, redressal) Act, 2013. The Internal Complaints Committee ("ICC") has
been setup to redress the complaints received regarding sexual harassment. All employees
are covered under this policy.
The following are the complaints received and disposed off during the
financial year 2022-23:
A. No. of complaints received : 0
B. No. ofcomplaints disposed off : 0
INTERNAL FINANCIAL CONTROLS
The Company has in place adequate internal financial controls with
reference to Financial Statements. Such controls were tested during the financial year and
no material weakness in the design or operation was observed.
DETAILS OF FRAUDS REPORTED
The Auditors of the Company have not reported any fraud specified under
Section 143(12) of the Companies, Act, 2013.
ACKNOWLEDGEMENT
The Directors of your Company would like to take this opportunity to
thank one and all associated with it enabling it to scale greater heights and emerge as a
recognized software solutions vendor in the industry. The faith and confidence shown on
your Company by banks, global clients, government authorities and shareholders has
propelled our enthusiasm and strengthen our determination to achieve our vision.
Finally your Directors would like to express their sincere thanks to
the dedication and committed hard work of the employees working in India, USA and at
various client locations to reach our corporate vision.
|
(By Order of the Board) For CG-VAK SOFTWARE AND EXPORTS
LIMITED |
| Place: Coimbatore |
G.Suresh |
| Date : 11th August, 2023 |
Managing Director & CEO |
|
DIN 00600906 |
+91-9892691696
