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Directors Report of CG-VAK Software & Exports Ltd.

Mar 31, 2014

Dear Members,

The Board of Directors of your Company take pleasure in presenting the 19th Annual Report on the business and operations of your Company and the Audited Financial Accounts for the year ended 31s* March 2014.

FINANCIAL RESULTS 2013-14

During the year under review, your Company has achieved a turnover of Rs.895.12 Lakhs as against Rs.869.21 Lakhs in the previous year. There is a net Profit of Rs.65.06 Lakhs as against the net profit of Rs.102.54 Lakhs in the previous year.

GLOBAL REVENUE

The global revenues for the Company including the business done by the Wholly Owned Subsidiary for the year under review is Rs.3153 Lakhs as compared to previous year was Rs. 2305 Lakhs.

REVIEW OF BUSINESS

The contributions of business from various Geographical area were:

North America contributed to 80% and Rest of the World 20 %. Business from Offshore Software Services was Rs.878.32 Lakhs during the year 2013-2014 as against Rs.854.77 Lakhs in the previous year. The increase has been at 2.76% compared with previous year.

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 9001:2008 standards.

FUTURE PLANS

The global market for IT services is expected to expand and corporations are increasingly using offshore service providers to meet their IT service needs. This increases the addressable market for offshore software services providers like us. 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.

Our mobility practice has been growing significantly and we expect a good growth in this offering. The company will continue its focus on the in OPD (Out-sourced Product development) market space where it has achieved significant success. Geographically the company is planning to strengthen its presence in the markets it is operating.

We expect a positive growth this year and the Company should perform better in the ensuing Financial Year 2014-15.

DIVIDEND

Your Directors recommended a dividend of Rs. 0.50 per equity share ( i.e. 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.29.56 Lakhs inclusive of tax amount of Rs.4.29 Lakhs. During the previous year ended 2012-2013, your Company has paid a dividend of Rs.25.27 Lakhs.

The dividend, if approved by the shareholders, will be paid to those members whose names appear in the Register of Members as on 15th September 2014.

US SUBSIDIARY: CG-VAK SOFTWARE USA INC.

Your Company''s Wholly Owned Subsidiary at USA, CG-VAK Software USA Inc. has made a Sales Turnover of USD 3.93 million during this year, compared to the USD 2.80 million during the previous year.

In terms ofthe exemption granted by the Central Government vide notification number 51/12/2007-CL-III dated February 8, 2011, the Balance Sheet and Profit and Loss Account, Report ofthe Board of Directors and Auditors ofthe Subsidiaries have not been attached with the Annual Report of the Company. However upon request by the shareholder of the Company, the annual accounts of the subsidiary companies will be made available. Pursuant to Section 212 of the Companies Act, 1956, the financial data along with equity share capital of the subsidiaries forming part of this Annual Report. Further, pursuant to Accounting Standard 21 issued by the Institute of Chartered Accountants of India, consolidated financial statement presented by the Company includes financial information of its subsidiaries.

INSPECTION UNDER SECTION 209A OF THE COMPANIES ACT, 1956

During the previous financial year (2012-13), inspection under Section 209A of the Companies Act, 1956 was carried out by the office of Ministry of Corporate Affairs and the company has provided the reply for the clarifications sought by MCA.

SEBI ADJUDICATION ORDER

During the year, SEBI had imposed a penalty of Rs.3 Lakhs on the company for delayed disclosure/reporting of purchase of shares under the SEBI PIT regulations. The penalty amount has been paid by the company.

DIRECTORS

As per the provisions of the Companies Act, 2013, Mr.C.Ganapathy, Director retire from office by rotation, and being eligible offer himself for re-appointment at the ensuing Annual General Meeting of the Company.

Mrs.S.Latha was appointed as an Additional Director of the Company w.e.f 28th May, 2014 and holds office upto the date of the ensuing Annual General Meeting. A notice has been received from a member proposing her to be appointed as a Director.

In compliance of the provisions of The Companies Act, 2013 and the Listing Agreement entered into with the Stock Exchange in which the Company''s shares are listed, Independent Directors are required to be appointed for a maximum term of five years besides the other requirements. Accordingly the Board of Directors have proposed to appoint Mr.A.Sankar, Director, as Independent Director for a term of 2 consecutive years w.e.f. 26th September, 2014. Further Mr.M.Durairaj, Mr.S.Muthukumar and Mr.S.Mohan, Directors are proposed for appointment as Independent Directors ofthe Company for a term of five consecutive years w.e.f. 26th September, 2014. Your Directors recommends their appointment.

Brief particulars of Directors eligible for reappointment in terms of Clause 49 of the Listing Agreement are annexed to the Notice dated 28th May, 2014 convening the 19th Annual General Meeting.

AUDITORS

The Statutory Auditors of the Company M/s. S.Lakshminarayanan Associates, Chartered Accountants, Coimbatore, retire at the conclusion of the ensuing Annual General Meeting. The Statutory Auditors have confirmed their eligibility and willingness to accept the office on re-appointment. The Board recommends their re-appointment for the next term.

PUBLIC DEPOSIT

The Deposits accepted by your Company are within the prescribed limits and the provision of Section 58-A of the Companies Act, 1956, and the rules framed there under are complied with. There are no unclaimed deposits as on 31.03.2014. The Company has decided not to accept/renew any Deposits commencing from 01st April, 2014.

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

As per the requirement of Section 217(1) (e) of the Companies Act, 1956, read with the Companies (Disclosure of particulars in the report of Board of Directors) Rules, 1988, the information regarding conservation of energy, technology absorption and foreign exchange earnings and outgo are appended hereto and form part of this report.

INFORMATION AS PER SECTION 217 (2A) OF THE COMPANIES ACT, 1956

As the Company has no employee drawing a salary of Rs.5,00,000/- per month or above or Rs.60,00,000/- per annum or above during the year 2013-2014, there are no particulars to be furnished under section 217(2A) ofthe Companies Act, 1956.

DIRECTOR''S RESPONSIBILITY STATEMENT

Pursuant to Section 217(2AA) ofthe Companies Act, 1956, your Directors have:

1. Followed in the preparation ofthe Annual Accounts, the applicable accounting standards.

2. 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 ofthe financial position ofthe Company for the period.

3. 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 and

4. Prepared the attached statement of accounts for the year ended 31st March 2014 on a going concern basis. CONSOLIDATED FINANCIAL STATEMENTS

The Consolidated Financial Statements of the Company prepared in accordance with the applicable Accounting Standards forms a part ofthis Annual Report.

CORPORATE GOVERNANCE

The Company is committed to maintain the highest standards of Corporate Governance. Company continues to be compliant with the requirements enshrined in clause 49 ofthe Listing Agreement which relates to Corporate Governance.

A Report on Corporate Governance as stipulated under clause 49 of the Listing Agreement forms part of the Annual Report. A certificate from the Statutory Auditors of the Company, confirming compliance with the conditions of Corporate Governance, as stipulated under clause 49 forms part ofthis Report.

MANAGEMENT DISCUSSION AND ANALYSIS

The Management Discussion and Analysis Report for the year under review, as stipulated under clause 49 of the Listing Agreement is presented in a separate section forming part of the Annual Report.

ACKNOWLEDGMENT

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 C.GANAPATHY Date : 28th May, 2014 Chairman


Mar 31, 2013

Dear Shareholders,

The Directors of your Company take pleasure in presenting the 18th Annual Report on the business of your Company and the

Audited Financial Accounts for the year ended 31st March 2013.

FINANCIAL RESULTS 2012-13

During the year under review, your Company has achieved a turnover of Rs.869.21 lakhs as against Rs. 659.99 Lakhs in the previous year. There is a net Profit of Rs. 102.54 lakhs as against the net loss of (Rs.123.67) lakhs in the previous year.

GLOBAL REVENUE

The global revenues for the Company including the business done by the Wholly Owned Subsidiary for the year under review is Rs.23.05 crores as compared to previous year was Rs. 19.55 crores.

REVIEW OF BUSINESS

The contributions of business from various Geographical area were:

North America contributed to 77% and Rest of the World 23 %.

Business from Offshore Software Services was Rs.854.77 lakhs during the year 2012-2013 as against Rs. 639.78 lakhs in the previous year. The increase has been at 34% compared with previous year.

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 9001:2008 standards.

FUTURE PLANS

The global market for IT services is expected to expand and corporations are increasingly using offshore service providers to meet their IT service needs.This increases the addressable market for offshore software services providers like us. 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 and Europe is also expanding as planned.

Our mobility practice has been growing significantly and we expect a good growth in this offering.The company will continue its focus on the OPD (Out-sourced Product Development) market space where it has achieved significant success. Geographically the company is planning to strengthen its presence in the markets it is operating. We expect to continue our positive growth this year and the Company should perform better in the ensuing year FY 2013-14.

DIVIDEND

Your Directors recommended a dividend of Rs. 0.50 per equity share (i.e 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.29.52 lakhs inclusive of tax amount of Rs.4.29 lakhs.

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

US SUBSIDIARY: CG-VAK SOFTWARE USA INC.

Your Company''s Wholly Owned Subsidiary at USA, CG-VAK Software USA Inc. has made a Sales Turnover of USD 2.80 million during this year, compared to the USD 2.78 million during the previous year.

In terms of the exemption granted by the Central Government vide notification number 51/12/2007-CL-III dated February 8, 2011, the Balance Sheet and Profit and Loss Account, Report of the Board of Directors and Auditors of the Subsidiaries have not been attached with the Annual Report of the Company. However upon request by the shareholder of the Company, the annual accounts of the subsidiary companies will be made available. Pursuant to Section 212 of the Companies Act, 1956, the financial data along with equity share capital of the subsidiaries forming part of this Annual Report. Further, pursuant to Accounting Standard 21 issued by the Institute of Chartered Accountants of India, consolidated financial statement presented by the Company includes financial information of its subsidiaries.

INSPECTION UNDER SECTION 209A OF THE COMPANIES ACT, 1956

During the year, inspection under Section 209A of the Companies Act, 1956 was carried out by the office of Ministry of Corporate Affairs and the company has provided the reply for the clarifications sought by MCA.

DIRECTORS

In accordance with the provisions of the Companies Act, 1956 and the Articles of Association of the Company,

Mr.S.Muthukumar, retire from office by rotation, and being eligible offer himself for reappointment at the ensuing Annual General Meeting of the Company.

The Board has reappointed Sri GSuresh as Managing Director for a period of 3 years from 1st September, 2013 and resolutions for approval of his reappointment and terms of reappointment have been included in the notice convening the 18th

Annual General Meeting of the Company Brief particulars of Directors eligible for reappointment in terms of Clause 49 of the Listing Agreement are annexed to the Notice dated 29th May, 2013 for convening the 18thAnnual General Meeting.

AUDITORS

The Statutory Auditors of the Company M/s. S.Lakshminarayanan Associates, Chartered Accountants, Coimbatore, retire at the conclusion of the ensuing Annual General Meeting. The Statutory Auditors have confirmed their eligibility and willingness to accept the office on re-appointment. The Board recommends their re-appointment for the next term.

PUBLIC DEPOSIT

The Deposits accepted by your Company are within the prescribed limits and the provision of Section 58-A of the Companies Act, 1956, and the rules framed there under are complied with. There are no unclaimed deposits as on 31.03.2013.

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

As per the requirement of Section 217(1) (e) of the Companies Act, 1956, read with the Companies (Disclosure of particulars in the report of Board of Directors) Rules, 1988, the information regarding conservation of energy, technology absorption and foreign exchange earnings and outgo are appended hereto and form part of this report.

INFORMATION AS PER SECTION 217 (2A) OF THE COMPANIES ACT, 1956

As the Company has no employee drawing a salary of Rs.5, 00,000/- per month or above or Rs.60, 00,000/- per annum or above during the year 2012-2013, there are no particulars to be furnished under section 217(2A) of the Companies Act, 1956.

DIRECTOR''S RESPONSIBILITY STATEMENT

Pursuant to Section 217(2AA) of the Companies Act, 1956, your Directors have:

1. Followed in the preparation of the Annual Accounts, the applicable accounting standards.

2. 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 financial position of the Company for the period.

3. 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 and

4. Prepared the attached statement of accounts for the year ended 31st March 2013 on a going concern basis.

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.

MANAGEMENT DISCUSSION AND ANALYSIS

The Management Discussion and Analysis Report for the year under review, as stipulated under clause 49 of the Listing Agreement is presented in a separate section forming part of the Annual Report.

CORPORATE GOVERNANCE

The Company is committed to maintain the highest standards of Corporate Governance. Company continues to be compliant with the requirements enshrined in clause 49 of the Listing Agreement which relates to Corporate Governance.

A Report on Corporate Governance as stipulated under clause 49 of the Listing Agreement forms part of the Annual Report. A certificate from the Statutory Auditors of the Company, confirming compliance with the conditions of Corporate Governance, as stipulated under clause 49 forms part of this Report.

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 C.GANAPATHY

Date : 29th May, 2013 Chairman


Mar 31, 2012

The Directors of your Company take pleasure in presenting the 17th Annual Report on the business of your Company and the Audited Financial Accounts for the year ended 31st March 2012.

FINANCIAL RESULTS 2011-12

During the year under review, your Company has achieved a turnover of Rs. 659.99 Lakhs as against Rs. 633 Lakhs in the previous year. There is a net loss of Rs.123.67 lakhs as against the net Profit of Rs. 11.27 lakhs in the previous year.

GLOBAL REVENUE

The global revenues for the Company including the business done by the Wholly Owned Subsidiary for the year under review is Rs.19.55 crores as compared to previous year was Rs. 17.65 crores.

REVIEW OF BUSINESS

The year under report had been a very challenging one for your Company due to slow recovery of North American economy, uncertainties in the global market and huge currency volatility.

The contributions of business from various markets were:

Software services contributed to 97% and BPO services 3 %.

Business from Offshore Software Services was Rs.639.78 lakhs during the year 2011-2012 as against Rs. 527.81 in the previous year. The increase has been at 21% compared with previous year. Our BPO Service line has done a business of Rs. 20.20 lakhs during the year 2011-12 as against Rs. 63.18 lakhs during the previous year. There is a significant drop of 68% in the business due to many of our customers have stopped outsourcing and moved to EMR (Electronic medical records) as per new policies of the US government.

The company incurred huge loss due to expected projects not materialized for which company has already recruited staffs, Bad debts and Foreign exchange loss.

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 9001:2008 standards.

FUTURE PLANS

The global market IT services market is expected to be challenging due to uncertainties in the European market and the slow recovery in the US market. However, the company has been growing positively in the offshore software services business and this momentum is likely to continue this year.

There has been significant success in terms of the Quality of service and we have received many client appreciations and significant amount of repeat business. In addition to North America,our business and customer base from Australia and Europe is also expanding as planned.

The company will continue its focus on the in OPD (Out-sourced Product development) market space where it has achieved significant success . Geographically the company is planning to strengthen its presence in the markets it is operating. The contribution from Software Services is expected to grow positively. The Company should perform better in the ensuing year FY 2012-13.

DIVIDEND

As the company is passing through a very challenging phase, your Directors do not consider prudent to recommend any dividend for the financial year ended 31st March, 2012.

US SUBSIDIARY: CG-VAK SOFTWARE USA INC.

Your Company's Wholly Owned Subsidiary at USA, CG-VAK Software USA Inc. has made a Sales Turnover of US$ 2.78 million during this year, compared to the US$ 2.54 million during the previous year.

As required under Section 212 of the Companies Act, 1956, the Annual Report of M/s. CG-VAK Software USA Inc. is annexed to this report.

DIRECTORS

In accordance with the provisions of the Companies Act, 1956 and the Articles of Association of the Company, Mr. S.Mohan retire from office by rotation, and being eligible offer himself for re-appointment at the ensuing Annual General Meeting of the Company.

Brief profile of the Director proposed to be re-appointed as required under Clause 49 of the Listing Agreement is annexed to the Notice convening the 17th Annual General Meeting forming part of this report.

AUDITORS

The Statutory Auditors of the Company M/s. S. Lakshminarayanan Associates, Chartered Accountants, Coimbatore, retire at the conclusion of the ensuing Annual General Meeting. The Statutory Auditors have confirmed their eligibility and willingness to accept the office on re-appointment. The Board recommends their re-appointment for the next term.

PUBLIC DEPOSIT

The Deposits accepted by your Company are within the prescribed limits and the provision of Section 58-A of the Companies Act, 1956, and the rules framed there under are complied with. There are no unclaimed deposits as on 31st March, 2012.

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

As per the requirement of Section 217(1) (e) of the Companies Act, 1956, read with the Companies (Disclosure of particulars in the report of Board of Directors) Rules, 1988, the information regarding conservation of energy, technology absorption and foreign exchange earnings and outgo are appended hereto and form part of this report.

INFORMATION AS PER SECTION 217 (2A) OF THE COMPANIES ACT, 1956

As the Company has no employee drawing a salary of Rs.5, 00,000/- per month or above or Rs.60, 00,000/- per annum or above during the year 2011-2012, there are no particulars to be furnished under section 217(2A) of the Companies Act, 1956.

DIRECTOR'S RESPONSIBILITY STATEMENT

Pursuant to Section 217(2AA) of the Companies Act, 1956, your Directors have:

1. Followed in the preparation of the Annual Accounts, the applicable accounting standards.

2. 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 financial position of the Company for the period.

3. 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 and

4. Prepared the attached statement of accounts for the year ended 31st March 2012 on a going concern basis.

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.

MANAGEMENT DISCUSSION AND ANALYSIS

The Management Discussion and Analysis Report for the year under review, as stipulated under clause 49 of the Listing Agreement is presented in a separate section forming part of the Annual Report.

CORPORATE GOVERNANCE

The Company is committed to maintain the highest standards of Corporate Governance. Company continues to be compliant with the requirements enshrined in clause 49 of the Listing Agreement which relates to Corporate Governance.

A Report on Corporate Governance as stipulated under clause 49 of the Listing Agreement forms part of the Annual Report. A certificate from the Statutory Auditors of the Company, confirming compliance with the conditions of Corporate Governance, as stipulated under clause 49 forms part of this Report.

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

C. GANAPATHY Chairman Place: Coimbatore Date : 30th May, 2012


Mar 31, 2011

Dear Members,

The Directors of your Company take pleasure in presenting the 16th Annual Report on the business of your Company and the Audited Financial Accounts for the year ended 31st March 2011.

FINANCIAL RESULTS 2010-11

During the year under review, your Company has achieved a turnover of Rs. 633 Lakhs as against Rs. 594 Lakhs in the previous year. The net profit for the year is Rs.11.27 lakhs as against the net Loss Rs.(65.50) lakhs in the previous year.

GLOBAL REVENUE

The global revenues for the Company including the business done by the Wholly Owned Subsidiary for the year under review is Rs.17.65 crores as compared to Rs. 16.81 crores during previous year.

REVIEW OF BUSINESS

The year under report had been a challenging one for your Company due to slow recovery of North American economy.

The contributions of business from various markets were:

Software services contributed to 90% and BPO services 10 %.

The contribution of offshore business has grown over the last year. The offshore to on-site mix is 14:1 as compared to 9.9:1 in the previous year. There is a growth of 9.5% in the offshore revenue.

Business from Offshore Software Services was Rs.527.81 lakhs during the year 2010-2011 as against Rs. 457.15 in the previous year. The increase has been at 15% compared with previous year.

Our BPO Service line has done a business of Rs. 63.18 lakhs during the year 2010-11 as against Rs.82.79 lakhs during the previous year.

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 9001:2008 standards.

FUTURE PLANS

The IT services market is expected to be challenging and pricing pressures are predicted in the current year. In spite of the global economic downturn and slow recovery, the company has been growing positively in the offshore services segment for the last 3 years and this momentum in the offshore front is likely to continue this year. We have expanded geographically and we are now servicing clients from Australia, Europe in addition to USA and Canada.

The Key differentiation for CG-VAK has been the ability to react to the customer needs more quickly. By virtue of our smaller size we are able to make radical changes to meet the changing needs of the market. The company will give focus on cost and operational efficiencies to sustain its competitiveness.

The company will continue its focus in OPD (Out-sourced Product development) market space where it has achieved significant success. The contribution from Software Services is expected to grow positively. The Company should perform better in the ensuing year FY 2011-12.

DIVIDEND

As the company is passing through a very challenging phase, your Directors do not consider prudent to recommend any dividend for the financial year ended March 31, 2011.

US SUBSIDIARY: CG-VAK SOFTWARE USA INC.

Your Company's Wholly Owned Subsidiary at USA, CG-VAK Software USA Inc. has made a Sales Turnover of US$ 2.54 million during this year, compared to the US$ 2.29 million during the previous year.

As required under Section 212 of the Companies Act, 1956, the Annual Report of M/s. CG-VAK Software USA Inc. is annexed to this report.

DIRECTORS

Mr. M.Durairaj is retiring by rotation at the ensuing Annual General Meeting and is being eligible offer to himself for reappointment.

Mr.A.Sankar who was appointed as Additional Director holds office upto the date of ensuing Annual General Meeting. A notice has been received from a shareholder proposing him to be appointed as a Director.

Resolution for the reappointment of Mr.C.Ganapathy as Executive Chairman is brought for your approval.

AUDITORS

M/s. S. Lakshminarayanan Associates, Chartered Accountants, Coimbatore retire at the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment.

PUBLIC DEPOSIT

The Deposits accepted by your Company are within the prescribed limits and the provision of Section 58-A of the Companies Act, 1956, and the rules framed there under are complied with. There are no unclaimed deposits as on 31.03.2011.

CONSERVATION OF ENERGY ETC.

As per the requirement of Section 217(1) (e) of the Companies Act, 1956, read with the Companies (Disclosure of particulars in the report of Board of Directors) Rules, 1988, the information regarding conservation of energy, technology absorption and foreign exchange earnings and outgo are appended hereto and form part of this report.

INFORMATION AS PER SECTION 217 (2A) OF THE COMPANIES ACT, 1956

As the Company has no employee drawing a salary of Rs.5, 00,000/- per month or above or Rs.60, 00,000/- per annum or above during the year 2010-2011, there are no particulars to be furnished under section 217(2A) of the Companies Act, 1956.

DIRECTOR'S RESPONSIBILITY STATEMENT

Pursuant to Section 217(2AA) of the Companies Act, 1956, your Directors have:

1. Followed in the preparation of the Annual Accounts, the applicable accounting standards.

2. 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 financial position of the Company for the period.

3. 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.

and

4. Prepared the attached statement of accounts for the year ended 31st March 2011 on a going concern basis.

MANAGEMENT DISCUSSION AND ANALYSIS

Pursuant to Clause 49 of the Listing Agreement, a Management Discussion and Analysis Report is given as addition to this report.

CORPORATE GOVERNANCE

As required by the existing clause 49 of the listing agreement entered into with the stock exchanges a separate report on corporate governance is given as part of the annual report with the auditor's statement on its compliance.

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

C.GANAPATHY Chairman

Place: Coimbatore Date : 30th May, 2011


Mar 31, 2010

The Directors of your Company take pleasure in presenting the 15th Annual Report on the business of your Company and the Audited Financial Accounts for the year ended 31st March 2010.

Financial Results 2009-10

During the year under review, your Company has achieved a turnover of Rs. 594 Lakhs as against Rs. 723 Lakhs in the previous year. The Net Loss for the year Rs.(65.51) lakhs as against the net profit Rs. 19.01 lakhs in the previous year.

Global Revenue

The global revenues for. the Company including the business done by the Wholly Owned Subsidiary for the year under review is Rs,16.50 crores as compared to previous year was Rs. 20.28 crores.

Review of Business

The year under report had been a challenging one for your Company due to global economic slowdown. The contributions of business from various markets were:

Software services contributed to 86% and BPO services 14 %

The contribution of offshore business has grown over the last year. The offshore to on-site mix is 2.1:1 as compared to 9.9:1 in the previous year. There is a growth of 10% in the offshore revenue.

Business from Offshore Software Services was Rs .457.15 lakhs during the year 2009-2010 as against Rs. 404.87 in the previous year. The increase has been at 13% compared with previous year.

Our BPO Service line has done a business of Rs. 82.79 lakhs during the year 2009-10 as against Rs.86.10 lakhs during the previous year.

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 9001:2008 standards.

Future Plans

The IT services market is expected to be challenging and pricing pressures are predicted in the current year. Despite the unprecedented global economic downturn, the company has been growing positively in the offshore services segment for the last 3 years and this momentum in the offshore front is likely to continue this year. We have expanded geographically and now servicing clients from Austalia, U.K, Switzerland, Ireland, Netherlands in addition to USA and Canada.

The Key differentiation for CG-VAK has been the ability to react to the customer needs more quickly. By virtue of our smaller size we are able to make radical changes to meet the changing needs of the market. The company will give focus on cost and operational efficiencies in this recessionary environment to sustain its competitiveness.

The company will continue its focus in OPD {Out-sourced Product development) market space .where it has achieved significant success. The contribution from European and Australian markets is expected to grow positively. The Company should perform better ¦ in the ensuing year FY 2010-11.

Dividend

As the company is passing through a very challenging phase, your Directors do not consider prudent to recommend any dividend for the financial year ended March 31,2010.

US Subsidiary-CG-VAK Software USA Inc.

Your Companys Wholly Owned Subsidiary at USA, CG-VAK Software USA Inc. has made a Sales Turnover of US$ 2.29 million during this year, compared to the US$ 2.98 million during the previous year.

As required under Section 212 of The Companies Act, 1956, the Annual Report of M/s. CG-VAK Software USA inc. is annexed to this report.

Directors

Mr. C. Ganapathy retiring by rotation at the ensuing Annual General Meeting and being eligible offers himself for re-appointment.

Resolution for the re-appointment of Mr.G. Suresh as Managing Director is brought for your approval.

Auditors

M/s. S. Lakshminarayanan Associates, Chartered Accountants, Coimbatore retire at the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment.

Public Deposit

The Deposits accepted by your Company are within the prescribed limits and the provision of Section 58-A of the Companies Act, 1956, and the rules framed there under are complied with. There are no unclaimed deposits as on 31.03.2010.

Information pursuant to Section 217(l) {e) of the Companies Act, 1956.

As per the requirement of Section 217 (l) (e) of The Companies Act, 1956, read with the Companies (Disclosure of particulars in the report of Board of Directors) Rules, 1988, the information regarding conservation of energy, technology absorption and foreign exchange earnings and outgo are appended hereto and form part of this report.

Particulars of Employees

Particulars of Employees pursuant to section 217(2A) of the Companies Act, 1956 read with, the Companies {Particulars; of Employees) Rules, 1975 and forming part of the Report of the Directors for the year ended 31st March 2010.



Name & (Age) Designation/ Remuner ation Qualifica tion & Date of Last Nature of Duties Rs in lakhs Experience Commenc ement Employment Gross (Years) of Emplo yment

Bachelor of

G.Suresh Managing Director 30.09 Engineering 01st Sep tember Managing Partner General Management (Mechanical) 1995 in

& (46) of affairs of the Master Market Makers Company of Business Administration (22)



Note: 1. MrGSuresh was appointed as Managing Director for aperiod of 5 years (Ist September 2005 to 31st August 2010). He is reappointed for a period of 5 years (1st September 2010 to 31" August 2015) subject to the approval of ¦ shareholders at the ensuing Annual General Meeting.

2. Mr.G.Suresh is related to Mr.C Ganapathy, Chairman. Mr G. Suresh owns 14.04%of the equity Shares of the Company as on 31st March 2010.

3. Gross remuneration comprises salary, commission, allowances, monetary value of perquisites and the Companys Contribution to Provident fund.

Directors Responsibility Statement

Pursuant to Section 217(2AA) of the Companies Act, 1956, your Directors have:

1. Followed in the preparation of the Annual Accounts, the applicable accounting standards.

2. 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 financial position of the Company for the period.

3. 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.

and

4. Prepared the attached statement of accounts for the year ended 31 st March 2010 on a going concern basis.

Corporate Governance

As required by the existing clause 49 of the listing agreement entered into with the stock exchanges a separate report on corporate governance is given as part of the annual report along with the auditors statement oh its compliance.

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 overseas to reach our corporate vision.

Place : Coimbatore By Order of the Board

Date : 27.05.2010 C. GANAPATHY

Chairman



 
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