CG-VAK Software & Exports Ltd Directors Report.

To the Members,

The Board of Directors of your Company take pleasure in presenting the 24th Annual Report on the business and operations of your Company and the Audited Financial Accounts for the year ended 31st March 2019.

FINANCIAL RESULTS 2018-19

During the year under review, your Company has achieved a turnover of Rs.2035.24 lakhs as against Rs.1425.81 lakhs in the previous year. There is a net Profit of Rs.343.68 lakhs as against the net profit of Rs.108.29 lakhs in the previous year. The company has achieved significant growth in the Turnover and Profits earned.

GLOBAL REVENUE

The global revenues for the Company including the business done by the Wholly Owned Subsidiary for the year under review is Rs.3670 lakhs as compared to Rs.3042 lakhs in the previous year.

STATE OF AFFAIRS OF THE COMPANY

In the financial year 2018-19, despite challenging business environment, your company has achieved a growth of 43% in the total revenue and the net profit has increased significantly to Rs. 343.68 lakhs from Rs.108.29 lakhs.

The contribution of business from various Geographical areas were:

North America contributed 78% and Rest of the World 22% of the business.

During the year under review, Business from Offshore Software Services is Rs.1971.50 lakhs as against Rs.1302.11 lakhs in the previous year. The increase has been at 51% as compared to previous year. Significant growth has been achieved in the offshore component of the business.

FUTURE PLANS

Global business scenario is undergoing rapid change and disruption, due to new business models adopted by corporations which use latest technology as their backbone of their operations. 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 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. In addition to North America, our business and customer base from Australia, Africa and Europe is also expanding as planned.

Out-sourced Product development (OPD) market space continues to be the focus area for the Company as we have achieved a significant success. The performance in Cloud practice has been very good and it is expected to grow at the same pace. Apart from strengthening the presence in the markets the company operates now, plans are in place to penetrate into newer geographies globally.

We expect a positive growth this year and the Company should perform better in the ensuing year Financial Year 2019-20.

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 standards.

DIVIDEND

Your Directors recommended a dividend of Rs. 0.75 per equity share (i.e. 7.5% 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.45.67 lakhs inclusive of tax amount of Rs.7.79 lakhs. During the previous year ended 2017-2018, your Company has paid a dividend of Rs.25.25 lakhs.

As per Companies (Accounting Standards) Amendment Rules, 2016, dividend and tax thereon 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

During the financial year 2018-19, the Company is not liable to transfer any amounts to Investor Education and Protection Fund. The Company has uploaded the details of unpaid and unclaimed amounts lying with the Company as on 24th September, 2018 (being date of last Annual General Meeting), on the website of the Company (www.cgvak.com) as also on the Ministry of Corporate Affairs website. Efforts are also made to co-ordinate 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, 2019 aggregates to Rs. 5,05,02,000/- comprising of 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, 2019, Equity Shares representing 91.945% 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 2019-20 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.

NUMBER OF MEETINGS OF THE BOARD

The board met Five 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 comprised of Independent Directors namely Mr.S.Muthukumar (Chairman), Mr.S.Mohan and Mr.A.Sankar 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.)
Foreign Exchange Earnings 20,35,24,055
Foreign Exchange Outgo 13,32,021
Foreign Travel 8,81,295
Others 4,50,726

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,2019,the Board consists of 7st members, two of whom are executive or whole time directors, one of whom is Non executive 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 appended as Annexure 4 to the Boards Report. 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 31st March, 2019, 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$ 2.50 million during this year, compared to the US$ 2.53 million during the previous year. There has been a drop of revenue by 1% over the previous financial year. The drop is mainly due to the difficulty in obtaining visas for the engineers to travel to the USA and work in the subsidiary.

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 5 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 OF ANNUAL RETURN

In accordance with Section 134(3)(a) of the Companies Act,2013,an extract of annual return in the prescribed format is appended as Annexure -6 to Boards Report.

A copy of which is placed at the website of the Company (www.cgvak.com).

CORPORATE SOCIAL RESPONSIBILITY

The provisions of Section 135 of Companies Act, 2013 is not applicable to our Company.

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 31st March, 2019, 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 Joint Director, Directorate of Enforcement vide their order dated 29.11.2017, imposed a Penalty amounting to Rs. 14,00,000/- on the Company for certain procedural lapses under FEMA, 1999. The Company had paid the said penalty amount on 11th January, 2018. The said penalty was paid by the Company in order to buy peace with the department.

PUBLIC DEPOSIT

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, Mr. C. Ganapathy retires from office by rotation, and being eligible offer himself for re-appointment at the ensuing Annual General Meeting of the Company. The Board of Directors recommends his re-appointment.

Appointment of Independent Directors

Mr. R. Jayaraman (DIN: 0008467922) and Mr. S. Padmanabhan (DIN: 0008467788) have been appointed as Additional Directors with effect from 09 August, 2019 and they hold office upto this Annual General Meeting. Mr. R. Jayaraman and Mr. S. Padmanabhan are proposed to be appointed as Independent Directors at this Annual General Meeting and have given their consent and declaration that they fulfill the criteria of independence as prescribed under Section 149(6) of the Companies Act, 2013 as well as Regulation 16(1)(b) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (including statutory re-enactment thereof for the time being in force).

Dr. S. Thamburaj (DIN: 0008467884) is proposed to be as an Independent Director at this Annual General Meeting and has given his consent and declaration that he fulfill the criteria of independence as prescribed under Section 149(6) of the Companies Act, 2013 as well as Regulation 16(1)(b) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (including statutory re-enactment thereof for the time being in force).

The resolutions for their appointment is set out in the Notice along with the necessary explanatory statement. The Board of Directors recommends the appointment of the Independent Directors.

Re-appointment of Executive Directors as Non-executive Director

Mr. C. Ganapathys held the office as Executive Director (Designated as Executive Chairman), upto 30th June 2019. The Board of Directors on the approval of the Nomination and Remuneration Committee have reappointed him as an Non Executive Director.

The resolutions for his appointment is set out in the Notice along with the necessary explanatory statement. The Board of Directors recommends the appointment of Mr. C. Ganapathys as a Non Executive Non Independent Director(Designated as Non Executive Chairman).

Re-appointment of Managing Director and CEO

The Board of Directors had, on the approval of the Nomination and Remuneration Committee and approval of Audit Committee, have re-appointed Mr. G. Suresh (DIN: 00600906) as Managing Director and CEO of the Company for a further period of 3 (three) years with effect from 01st September, 2019. The terms and conditions of his appointment including his remuneration, are subject to the approval of the shareholders in this ensuring Annual General Meeting.

The resolutions for his appointment is set out in the Notice along with the necessary explanatory statement The Board recommends the re-appointment of the Managing Director and CEO.

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 09th August, 2019 convening the 24th Annual General Meeting.

Cessation

In accordance with their terms of appointment Mr. S. Muthukumar, Mr. S. Mohan and Mr. M. Durairaj, Independent Directors, of the Company will vacate their office with effect from 25st September, 2019, pursuantto Section 149(10) and other applicable provisions of the Companies Act, 2013. The Board places on records its appreciation for the valuable contributions made by them during their tenure as Independent Directors of the Company..

(B) KEY MANAGERIAL PERSONNEL

Pursuant to provisions of Section 203 of the Companies Act, 2013, Mr.C.Ganapathy, Executive Chairman, Mr.G.Suresh, Managing Director & CEO, Mr.P.S.Subramanian, Chief Financial Officer and Mr. Govind M Joshi, Company Secretary and Compliance Officer are the Key Managerial Personnel of the Company as at 31st March, 2019.

DECLARATION BY INDEPENDENT DIRECTORS

The company has received necessary declaration 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 the 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 concerned about unethical behaviour, 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

Statutory Auditors, M/s. N. C. Rajan & Co, Chartered Accountants were appointed to hold office for a term of five consecutive years ie, from the conclusion of 21st AGM till the conclusion of 26th AGM. Consequent upon the amendments to the Companies Act, 2013, ratification of appointment of the Statutory Auditors is no longer required.

The Auditors Report for the financial year 31.03.2019 does not contain any qualification, adverse remarks, reservation or disclaimer.

SECRETARIAL AUDITOR

Mrs. Manimekala V Raj, Practicing Company Secretary was appointed to conduct the secretarial audit of the company for financial year 2019-20, as required under Section 204 of the Companies Act, 2013 and Rules made there under. The secretarial audit report for FY 2018-19 forms part of the Annual Report as Annexure 7 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.

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.

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 2018-19:

A. No. of complaints received : 0
B. No. of complaints disposed off : 0

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 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 C.Ganapathy
Date : 09th August, 2019 Chairman
DIN 00735840

Annexure - 1 to Directors Report

Particulars of Remuneration of Directors and Employees pursuant to Section 197 (12) of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

(i) The ratio of the remuneration of each Director to the median remuneration of the employees of the company for the financial year:

S. No. Name of the Director Ratio
1 Mr.C.Ganapathy, Executive Chairman 2.66
2 Mr.G.Suresh, Managing Director & CEO 16.77
3 Mr.M.Durairaj, Independent Director Not Applicable
4 Mr.S.Muthukumar, Independent Director Not Applicable
5 Mr.S.Mohan, Independent Director Not Applicable
6 Mr.A.Sankar, Independent Director Not Applicable
7 Mrs.S.Latha, Women Director Not Applicable

During the year, the Non-Executive Directors received only the sitting fees as remuneration.

(ii) The percentage increase in remuneration of each Director, Chief Financial Officer (CFO), Chief Executive Officer (CEO), Company Secretary (CS) or Manager, if any, in the financial year:

S.No Name of the Director / CFO/ CEO/CS % Increase/(Decrease) in remuneration
1 Mr.C.Ganapathy, Executive Chairman 3%
2 Mr.G.Suresh, Managing Director & CEO 7%
3 Mr.M.Durairaj, Independent Director Not Applicable
4 Mr.S.Muthukumar, Independent Director Not Applicable
5 Mr.S.Mohan, Independent Director Not Applicable
6 Mr.A.Sankar, Independent Director Not Applicable
7 Mrs.S.Latha, Non Executive Women Director Not Applicable
8 Mr.P.S.Subramanian, CFO 12%
9 Mr.Govind M Joshi, CS Not Applicable
(iii) The percentage increase in the median remuneration of the employees in the financial year 7.84%
(iv) Number of Permanent Employees on the rolls of the company (As on 31st March, 2019) 205

(v) The explanation on the relationship between average increase in remuneration and company performance:

The performance of the company has increased when compared with the previous year. The increase granted to employees is in line with the normal increase granted by company from time to time and is intended to compensate for inflation and motivate employees to perform at their best.

(vi) Comparison of the remuneration of the Key Managerial Personnel (KMP) against the performance of the company

KMPs Remuneration (including perquisites) 2018-19(Rs Lakhs) % Increase/ (Decrease) in KMPs remuneration (2018-19 against 2017-18 including perquisites) Sales 2018-19 (Rs in Lakhs) % Increase/ (Decrease) in sales (2018-19 against 2017-18)
114.44 7.80% 2035.24 42.74%

(vii) Variations in the market capitalization of the company, price earnings ratio as at the closing date of the current financial year and previous financial year and percentage increase over decrease in the market quotations of the shares of the company in comparison to the rate at which the company came out with last public offer in case of listed companies and in case of unlisted companies, the variations in the net worth of the company as at the close of the current financial year and previous financial year:

Particulars As on 31.03.2018 As on 31.03.2019 Variations %+/(-)
Market
Capitalization 1080.74 2141.28 1060.54 98%
(Rs in Lakhs)
Price earnings ratio 9.73 6.21 (3.52) (36%)

 

Market quotations of the shares as on 31.03.2019 (BSE) Rs.42.40/- per share of the face value Rs.10/- per share
Market quotations of the shares when the company came out with last public offer Public Issue in December 1995 at a price of Rs.10/- per share of the face Value Rs.10/- per share.
Percentage increase/decrease over in the market quotations of the company The Company has come out with initial public offer in December 1995. An amount of Rs. 10/- invested in the said IPO would be worth Rs. 42.40 as on 31st March, 2019 indicating a compounded annual growth rate of 6.2% which is excluding the dividend accrued thereon.

(viii) Average percentile increase already made in salaries of employees other then managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for the increase in the managerial remuneration: The average percentile increase granted to employees other than the managerial personnel is 17%.

The percentile increase granted to managerial personnel is 7.8%.

(ix) Comparison of the remuneration of the Key Managerial Personnel against the performance of the company:

KMPs Name & Designation Remuneration for 2018-19 (Rs Lakhs) %Increase / (Decrease) in Remuneration (2018-19 against 2017-18) Sales (for 2018-19) (Rs in Lakhs) % Increase in Sales (2018-19 against 2017-18)
Mr.C.Ganapathy, Executive Chairman 13.31 3%
Mr.G.Suresh, Managing Director & CEO 83.89 7% 2035.24 42.74%
Mr.P.S.Subramanian, Chief Financial Officer 9.50 12%
Mr.Harcharan. J & Mr.Govind M Joshi Company Secretary 7.74 24%

 

(x) The key paramaters for any variable Component of remuneration availed by the Directors. The Managing Director is eligible for 1% commission on net profits of the Company, which he has waived.
(xi) The ratio of the remuneration of the highest paid Director to that of employees who are not Directors but receive remuneration in excess of the highest paid Director during the year. Since the remuneration of the highest paid employee is not in excess of the highest paid Director, it is not applicable.

(xii) We affirm that the remuneration paid to Directors, Key Managerial Personnel and employees is as per the remuneration policy approved by the Board of Directors of the company.

(xiii) Statement of employees receiving remuneration not less than 5 lakh rupees per month : Not Applicable

NOTE:

1. Mr.C.Ganapathy, Mr.G.Suresh and Mrs.S.Latha are related to each other

2. Gross remuneration comprises salary, commission, allowance, monetary values of perquisites and the companys contribution to the provident fund, Gratuity Fund and Superannuation Fund.

3. Net remuneration is exclusive of contributions to provident fund, gratuity fund, superannuation fund and tax deducted.

(By Order of the Board)
for CG-VAK SOFTWARE AND EXPORTS LIMITED
Place: Coimbatore C.Ganapathy
Date : 09thAugust, 2019 Chairman
DIN 00735840

Annexure - 2 to Directors Report

Explanations on the Matter of Emphasis in the Auditors Report to the members of M/s. CG-VAK Software And Exports Limited for the year ended 31st March, 2019

1. With reference to the auditors remark on non provision of gratuity claim (note no.23A(i), of the notes forming part of accounts), we wish to state that no provision has been made as the Director concerned was a Non Executive Director and was not drawing any salary and hence not eligible for gratuity. The company has disputed the claim and the same is pending before the Labour Court;

2. With reference to the auditors remark on non provision of gratuity claim (note no.23A(ii), of the notes forming part of accounts), we wish to state that no provision has been made as the employee was not eligible for gratuity. The company has disputed the claim and the same is pending before the Labour Court;

3. With reference to the Auditors remark on non-payment of fixed deposit (note no.23A(iii), of the notes forming part of accounts), we wish to state that The Fixed Deposit claim is an appeal made by a Former Managing Director and his family members before the High Court, Madras against the Company Law Boards Order. The Company Law Board had earlier passed an order that the claim was not maintainable and decided in favor of Company during June, 2011. The Company has disputed the claim before the High Court Madras.

4. With reference to the auditors remark on cases filed by Registrar of Companies, Coimbatore (note no.23-A(v), of the notes forming part of accounts), we wish to state that the case was filed pursuant to inspection made under Section carried out in the year 2012. The company has disputed and the same is pending before the Honble Additional Sessions Judge, Coimbatore;

(By Order of the Board)
For CG-VAK SOFTWARE AND EXPORTS LIMITED
Place: Coimbatore C.Ganapathy
Date : 09th August, 2019 Chairman
DIN 00735840