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Directors Report of Capricorn Systems Global Solutions Ltd.

Mar 31, 2015

Dear Members,

The Directors have pleasure in presenting the Thirtieth Annual Report of your Company together with the Audited Accounts for the financial year ended 31st March, 2015 and the report of the Auditors thereon.

(Rs. Lakhs)

Particulars 2014-15 2013-14

Total Income 394.36 416.38

Expenditure 368.57 394.20

Profit before Tax, Interest and Depreciation 25.79 22.18

Less : Depreciation 9.40 9.20

Less : Interest 0.02 0.51

Profit before Tax 16.37 12.48

Provision for Income Tax 6.85 5.55

Provision for Deferred Tax Liability (0.87) (0.39)

Net Profit after Tax 10.39 7.32

Profit brought forward 72.28 64.96

Balance available for appropriation 82.67 72.28

Profit carried to Balance Sheet 82.67 72.28

STATE OF COMPANY'S AFFAIRS:

OPERATIONS & FUTURE PROPSECTS:

The performance of the company during the year has been consistent as compared to the earlier periods. The company has been successful in obtaining the repeat works from the customers . With a committed and stable order books the company expects to maintain the level of operations with marginal increase in the ensuring periods. With the general upward trend being witnessed in the IT and ITES industry the company expects to leverage its core strengths of highly skilled manpower optimally by entering into new and strategic alliances.

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.

LISTING OF EQUIT SHARES:

The Company's 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 2014 - 2015.

TRANSFER TO RESERVES:

Profit earned by the comapny after taxes Amounting Rs.10.39 Lakhs is being transfered to Reserves.

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.

MATERIAL CHANGES AND COMMITMENTS AFFECTING FINANCIAL POSITION BETWEEN THE END OF THE FINANCIAL YEAR AND DATE OF REPORT:

There are no material changes and commitments in the business operations of the Company from the financial year ended 31st March, 2015 to the date of signing of the Directors Report.

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 clause 49 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 sub- section (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 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.

VIGIL MECHANISM:

In terms of the provisions of Section 177 of the Companies Act, 2013 your Company has formulated a Whistle Blower Policy as a Vigil Mechanism. This mechanism aims for conducting the affairs in a fair and transparent manner by adopting highest standards of professionalism, honesty, integrity and ethical behaviour. All permanent employees of the Company are covered under the policy.

This mechanism is for the employees to report concerns about unethical behaviour, actual or suspected fraud or violation of Code of Conduct and Ethics. It also provides for adequate safeguards against victimization of employees who avail of the mechanism and allows direct access to the Chairman of the Audit Committee in exceptional cases.

BOARD EVALUATION:

Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the performance evaluation of the Board, the Committees of the Board and Individual Directors is done on annual basis.

The evaluation is done by the Board, Nomination and Remuneration Committee and Independent Directors with specific focus on the performance and effective functioning of the Board and Individual Directors.

CHANGES IN DIRECTORS:

INDUCTIONS:

On the recommendations of the nomination and remuneration committee, the Board appointed Mrs. Lakshmi Gurram (DIN: 07154551) as an Independent Director on the Board with effect from 31st March, 2015. We seek your support in confirming the appointment of Mrs. Lakshmi Gurram (DIN: 07154551) in the ensuing Annual General Meeting.

RE - APPOINTMENTS:

As per the provisions of the Companies Act 2013, Sri S. Man Mohan Rao (DIN: 00109433) retires at the ensuing Annual General Meeting and being eligible, seek his re-appointment. The Board recommends his re-appointment.

None of the independent directors will retire at the ensuing Annual General Meeting.

RESIGNATIONS:

None of the Directors have resigned during the year under review.

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 Year 2014-15 on the following dates:- 29/05/2014, 11/08/2014, 01/09/2014, 14/11/2014, 13/02/2015 & 31/03/2015 .

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 Baord.

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 Company's 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 2014 - 15, 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 domestic and international economic environment directly influences the spending patterns of the industry on the Information Technology. And also the margins of the companies are affected by any changes in the government regulations like taxation and also the increased competition from other countries.

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 2014 - 15.

TRANSACTIONS WITH RELATED PARTIES:

There were no 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 31,2015 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.

AUDITORS:

Statutory Auditors:

At the Annual General Meeting held on September 30, 2014 M/s. Satyanarayana & Co., Chartered Accountants, were appointed as the Statutory Auditors of the Company to hold office till the conclusion of the 32nd Annual General Meeting. In terms of the first proviso to Section 139 of the Companies Act, 2013, the appointment of the auditors shall be placed for ratification at every Annual General Meeting. Accordingly, the appointment of M/s. Satyanarayana & Co., Chartered Accountants, as the statutory auditors of the Company is placed for ratification by the shareholders. In this regard, the Company has received a certificate from the auditors to the effect that if they are reappointed, it would be in accordance with the provisions of Section 141 of the Companies Act, 2013.

There are no specifications, reservations, adverse remarks on disclosures by the Statutory Auditors in their report. They have not reported any incident of fraud to the Audit Committee of the Company during the year under review.

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 DSMR & Associates, Company Secretaries to undertake the Secretarial Audit of the Company for the financial year 2014 - 2015. 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 2014-15, the Company has not received any complaints on sexual harassment.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY REGULATORS OR COURTS OR TRIBUNALS:

There are no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and Company's operations in future.

ACKNOWLEDGEMENTS:

Your Directors place on record their appreciation for the assistance and co-operation extended by the Bankers, STPI, Customs and Central Excise and various State and Central Government Agencies. Your Directors also thank all the Customers, Members and Employees for their valuable support and confidence in the Company.

For and on behalf of the Board For Capricorn Systems Global Solutions Limited

Place: HYDERABAD Date : 31st August 2015 Sd/- S. Man Mohan Rao Managing Director DIN : 00109433


Mar 31, 2014

The Members,

CAPRICORN SYSTEMS GLOBAL SOLUTIONS LIMITED

The Directors have pleasure in presenting the Twenty Ninth Annual Report of your Company together with the Audited Accounts for the financial year ended 31st March, 2014 and the report of the Auditors thereon.

(Rs. Lakhs) Particulars 2013-14 2012-13

Total Income 416.38 332.20

Expenditure 394.20 304.83

Profit before Tax, Interest and Depreciation 22.18 27.37

Less : Depreciation 9.20 9.81

Less : Interest 0.51 9.83

Profit before Tax 12.48 7.73

Provision for Income Tax 5.55 2.86

Provision for Deferred Tax Liability (0.39) 0.38

Net Profit after Tax 7.32 4.49

Profit brought forward 64.96 60.47

Balance available for appropriation 72.28 64.96

Profit carried to Balance Sheet 72.28 64.96

OPERATIONS & FUTURE PROPSECTS:

During the year the company has been successful in delivering the works to its existing contracts. Backed by the robust committed orders the turnover of the company has recorded a consistent growth path. Considering the consistent recovery being made in the n the US markets from where the business of the company is sourced , the outlook for the company is healthier the company expects to achieve higher turnover during the coming years .

CORPORATE GOVERNANCE:

The Corporate Governance Report regarding compliance of the conditions of corporate governance by your Company as stipulated in clause 49 of the Listing Agreement entered into with The Bombay Stock Ex- change Limited is annexed to this Report.

MATERIAL CHANGES:

There are no material changes affecting the business of the Company after the date of the Balance Sheet. DEPOSITS:

During the year under review the Company has not accepted any deposits from public as defined under the provisions of Section 58 A of the Companies Act, 1956

DIVIDEND:

No dividend is recommended by the Board of Directors for the year 2013-14 DIRECTORS:

Pursuant to Section 149 of the Companies Act,2013 , the Board at its meeting held on 1st September, 2014 recommended appointment of Mr. Anand Deshmukh, Mr. K.V. Srinivasa Rao and Mr. G. Ramesh Babu as independent directors of the company not liable to retire by rotation for 5 years from the date of its 29th Annual General Meeting of the company subject to approval of the members of the Company.

The Directors have given declaration to the Board that they meet criteria of independence as provided under Section 149(6) of the said Act and also confirmed that they would abide by the provisions as mentioned in Schedule IV of the Companies Act,2013. The Board recommends the resolutions for your approval for the above appointments.

DIRECTORS'' RESPONSIBILITY STATEMENT:

Pursuant to provisions of Section 217 (2AA) of the Companies Act, 1956 we, the Board of Directors of the Company hereby state:

(i) that in the preparation of the annual accounts for the year ended 31st March, 2014, the applicable accounting standards had been followed along with proper explanation relating to material departures;

(ii) that we had 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 that period;

(iii) that we had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for prevent- ing and detecting fraud and other irregularities;

(iv) that we had prepared the annual accounts for the year ended 31st March, 2014 on a going concern basis.

AUDITORS:

M/s Satyanarayana & Co., Chartered Accountants, the Statutory Auditors of the Company retire at the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment. The said auditors have furnished the certificate of their eligibility for the reappointment. Pursuant to the provisions of the Section 139 of the Companies Act,2013 and the Rules framed there under, it is proposed to appoint M/s. Satyanarayana & Co as Statutory Auditors of the Company from the Conclusion of the forthcoming AGM till the conclusion of the 32nd Annual General Meeting to be held in the year 2017 subject to ratification of their appointment at the subsequent AGMs.

PERSONNEL:

During the year under review, there were no employees drawing remuneration in excess of the limits laid down in Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employee''s) Rules, 1975.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:

The disclosures required under Section 217(1) (e) of the Companies Act, 1956 read with Companies (Dis- closure of particulars in the Report of the Board of Directors) Rules, 1988, for the year ended March 31, 2014 are as follows:

A. CONSERVATION OF ENERGY:

a. Adequate measures have been taken to conserve energy wherever possible.

b. Additional investments and proposals, if any, being implemented for reduction of consumption of energy: NIL

c. Impact of measures for reduction of energy consumption / energy conservation: NIL

B. RESEARCH AND DEVELOPMENT & TECHNOLOGY ABSORPTION :

1. The company has an Inhouse team for upgradation / development of technologies and products.

2. Benefits Derived : Faster turn around time in delivery of the projects.

3. Future plan of action : Enhancing the capacity & capability of the team as per growth needs of the company.

C. In case of imported technology, imported during the last 5 years reckoned from the beginning of the financial year, following information may be furnished:

a. Technology Imported: N. A. b. Year of Import: N. A.

c. Has technology fully absorbed areas where this has not been taken place, reasons thereof and plan of action: N. A.

D. FOREIGN EXCHANGE EARNINGS AND OUTGO:

1. Activities relating to exports, initiatives taken to increase exports, development of new export markets for products and services, and export plans:

The entire software developed is exported to the Company belonging to the promoters. The management does not have any immediate plans to export its services to other countries.

2. Total Foreign Exchange used and earned:

Particulars of the transaction 2013 - 2014 2012 - 2013 (in Rs.) (in Rs.)

Total Foreign Exchange earnings 359,91,018 345,86,434

Foreign Exchange outgo Nil Nil

a. on account of Travel Nil Nil

Total Foreign Exchange outgo Nil Nil

For and on behalf of the Board For Capricorn Systems Global Solutions Limited

Place: HYDERABAD Date : 1 September 2014 Sd/- S. Man Mohan Rao Managing Director DIN : 00109433


Mar 31, 2010

The Directors have pleasure in presenting the Twenty Fifty Annual Report together with the Audited Accounts of the Company for the year Ended 31st March 2010.

(Rs. Lakhs)

Particulars 2009-10 2008-09

Income 129.40 111.82

Profit before Depreciation and Taxation 12.01 13.16

Depreciation 9.09 9.82

Profit before Tax 2.92 3.34

Provision for Tax 1.83 2.00

Profit after Tax 1.09 1.33

OPERATIONS:

The company has executed successfully executed software development works for the overseas customers, recording a turnover of Rs. 129.40 lakhs registering an increase of 16% compared to the earlier period. The company is presently working on various new development strategies that would result in working on new and emerging technologies. The company is confident that the various initiatives taken up by the company for business development would result in higher revenues in the coming years.

DIVIDEND:

No dividend is proposed for the year as the company need to conserve its resources for the enhanced operations for the ensuing years

MARKET AND FUTURE OUTLOOK:

With the major economies globally emerging out of the long recessionary period and improved spending of the various corporate on the IT services the company expects to garner new business more specifically from the US markets. With a good and long standing workforce the company would be look forward for delivering software solutions at a competitive terms in the market.

DEMATERIALISATION OF SHARES:

12.70% Shares of the Company has been dematerialized up to 31st March, 2010.

LISTING WITH STOCK EXCHANGES:

The Share of the Company were suspended during the year from July 2005, citing the non - receipt of the Book Closure Notice for the Year 2004 - 2005. The Company has initiated the process of compiling with the stock exchange regulations for revocation of the suspension.

FIXED DEPOSITS:

The company has not accepted fixed deposits during the period under review.

PERSONNEL:

There are no employees in the company whose particulars are required to be given pursuant to section 217(2A) of the Companies Act, 1956.

DIRECTORS:

Mr. S. Murali Krishna and Mr. Anand Deshmukh, directors of the company retire by rotation at the ensuring Annual General Meeting and being eligible offers themselves for re-appointment.

DIRECTORS RESPONSIBILITY STATEMENT:

Pursuant to the requirement under Section 217(2AA) of the Companies Act, 1956 with respect to Directors

Responsibility Statement, it is hereby confirmed:

(i) that in the preparation of the annual accounts for the period ended 31 st March 2010, the applicable accounting standards had been followed along with proper explanation relating to material departures.

(ii) that the directors had selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the company for the year under review.

(iii) that the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

(iv) that the directors had prepared the accounts for the period ended 31st March 2010 on a going concern basis.

AUDITORS:

M/s. Satyanarayana & Co., auditors of the Company hold office till conclusion of the ensuing annual general meeting and are eligible for reappointment. The Company has received a letter from M/s. Satyanarayana & Co., Chartered Accountants to the effect that their appointment if made would be within the limits under section 224( 1B) of the Companies Act, 1956.

CONSERVATION OF ENERGY. TECHNOLOGY ABSORPTION. FOREIGN EXCHANGE ERNINGS & OUTGO:

The information required under Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 with respect to these matters is as under

A. Conservation of Energy

Though the Companys operations involve low energy consumption, there is a constant endeavor to conserve energy.

B. Absorption of Technology

The company has an in-house R&D team for up gradation/ development of the technologies and products.

C. Foreign Exchange earnings and Outgo:

Foreign Exchange earnings (on cash basis) : Rs. 132,66,773/-

Foreign Exchange Outgo -nil-

COMPLIANCE CERTIFICATE:

The Company has complied with the provisions of Corporate Governance under listing agreement.

A Certificate from the Auditors of the Company regarding compliance of conditions of Corporate Governance as stipulated under clause 49 of the listing agreement is attached to this report.

ACKNOWLEDGEMENTS:

Your Board would Nee to place on record its sincere appreciation for the wholehearted support and contributions made by its employees, business associates, shareholders and banks towards conducting the operations of the company.

for and on behalf of the Board

Sd/- Place : Hyderabad S. Man Mohan Rao

Date : 29-05-10 Director.



 
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