Mar 31, 2016
Dear Members,
We present the report on our business and operations for the year ended 31st March 2016.
1. Financial Results: The Company''s financial performance for the year under review along with previous year''s figures is given hereunder:
Particulars for the year ended |
For the year ended |
|
INR-''000 |
INR-''000 |
|
31/03/2016 |
31/03/2015 |
|
Net Sales/Income from Business Operations |
1,34,957 |
1,17,211 |
Other Income |
4 |
577 |
Total Income |
1,34,961 |
1,17,789 |
Less Interest |
- |
13,261 |
Profit / (Loss) before Depreciation & Exceptional Item |
(39,942) |
(64,621) |
Less Exceptional Item |
5,97,042 |
2,14,752 |
Profit before Depreciation |
(6,36,984) |
(2,79,373) |
Less Depreciation |
35,777 |
9,461 |
Profit after Depreciation and Interest |
(6,72,762) |
(2,88,835) |
Less Current Income Tax |
- |
- |
Less Previous Year Adjustment of Income Tax |
- |
- |
Less Deferred Tax |
(681) |
830 |
Net Profit after tax |
(6,72,080) |
(2,89,665) |
Dividend |
- |
- |
Net Profit after dividend and Tax |
(6,72,080) |
(2,89,665) |
Amount transferred to General Reserve |
- |
- |
Balance Carried to Balance Sheet |
(6,72,080) |
(2,89,665) |
Earnings per Share (Basic) |
(9.28) |
(4.00) |
Earnings per Share (Diluted) |
(9.28) |
(4.00) |
Financial highlights
Revenues-Standalone
Revenue for the year ended 31st March, 2016 is Rs 1349.57 lacs as compared to 1172.11 lacs the same period last year. The Company''s services improved by about 15 % over the previous year. Revenues-Consolidated
The subsidiaries of the company both at USA and UAE are dormant hence on account of consolidation there is no addition of revenues. Profits- Standalone
The Company had earned a net profit of Rs. 450.34 Lakhs prior to charge off of the following
(a) Bad Debts amounting to Rs.1207.59 Lakhs.
(b) Exceptional Items include
(i) Investment in UAE Subsidiary in full as against the amortization over a period of five years amounting to Rs. 3816.91 Lakhs.
(ii) Impairment Loss on software products which are no longer marketable due to technology upgradation.Rs.2153.51 Lakhs. However, on account of the above write offs, the company has reported a Net Loss of Rs 6727.62 Lakhs as against a Net Loss of Rs.2888.35 Lakhs in the previous period.
Profits-Consolidated
There are no additions to the Profits of the company on consolidated results as there were no operations in the Subsidiaries.
Capital Expenditure on Tangible Assets-Standalone
During the year the company did not incur any capital expenditure.
Liquidity
The Company has started its efforts to raise funds for its growth plans.
The Company had convened an EGM to increase the authorized share capital, increased the borrowing limits and FII investment limit. Further the company has started its exercise for capital restructuring to reflect a true position of its business in its balance sheet.
The company is making plans to implement its fund raising plans this year and hence resolutions are being proposed for approval of the shareholders
2. Dividend
No Dividend is being proposed for the current financial year.
3. Review of Business Operations and Future Prospects.
Your Directors wish to present the details of Business operations done during the year under review:
a. Services and emerging offerings
The company continued its services operations in IT and BPO segments.
The company is now moving its product applications into cloud platform and will be able to offer software applications as a service in the ensuing period.
The company has commenced development of a logistics platform for cargo movement i.e a market place for cargo in domestic markets viz www.indiacargo.com and www.bharatcargo.com .
The company is also developing an e-commerce portal for arts and crafts viz www.indycrafts.com which is targeted to be a market place for handicrafts.
The company is also working on an application for automating toll collection.
The company is also actively working on mobile app i.e payment wallet, and internet of things offerings.
The company has commenced its marketing efforts for the electronic health records www.e-healthrecords.com .
The company is working on multiple services automation in the internet of things space which involves connecting devices to mobile apps that facilitate remote access, monitor and automated controls over devices.
b. Sales
Revenue for the year ended 31st March, 2016 is Rs 1349.57 Lakhs as compared to Rs 1172.11 lakhs the same period last year. The company''s services improved by about 15 % over the previous year.
c. Marketing and Market environment.
Platforms: The company at present is in the process of building mobile applications on multiple technologies to support E commerce and Utilities.
We have commenced our efforts in emerging mobile and digital technologies and big data analytics.
The company is gradually moving into the digital IT space.
The new platforms being built and promoted by the company are for retail as well as b2b customers.
The company has chosen digital marketing methods to penetrate into the retail markets.
Services: - The company continues to improve upon its service offerings across domains in the following segments.
- IT Support
- Consulting
- Network and Surveillance
The company provides services in custom built application development, system integration , testing , maintenance , network , surveillance , IT support , consulting and BPO.
In order to differentiate our service and solution offerings, our strategy will be to bring in concepts of automation, analytics, improving productivity to gain higher accuracy and to reduce the total costs to clients. We continue to leverage the advantage of open source technologies in providing innovative and cost effective performance solutions.
Products : The company continues to enhance its products in health care domain and is targeting to get identified as a key player.
- Heal Soft (HMS): A complete Enterprise Hospital Management Software Suite (18 modules) for Clinics, Small, Medium and Large Hospitals at multi locations in multiple technologies which can be integrated to an ERP.
- Asset Management
- Purchases and Contract
- Document Management System
- Payroll Management
- HRMS
- Content Management System
- Corporate Information System
Infrastructure: - The company proposes to set up infrastructure such as data center to provide cost effective infrastructure solutions for storage , business continuity, disaster recovery for its own and third party applications and data.
Strategic Alliances: We propose to align with start-ups either as partners or as subsidiaries in creating, deploying, integrating and operating business solutions. We propose to raise additional capital to deploy in making selective business acquisitions that augment our expertise, compliment our presence in certain market segments and accelerate the execution of our strategies.
d. Future Prospects including constraints affecting due to Government policies
The future of IT Services business is providing a number of open source software components, and or proprietary software products, all of which can be deployed on public or private cloud or at the customer''s premise. These platforms are intended to address the key challenges that businesses have and effectively storing, managing and analyzing the increasing amounts of data available to them.
CIL''s objective is to enable customers find an improved way to package, develop, administer and monitor their enterprise data.
4. Subsidiaries, Joint Ventures and Associate Companies.
Statement pursuant to Section 129 Subsection (3)(I) of the Companies Act 2013, read with Rule 5 of Companies Accounts Rules, 2014 relating to financial statements of subsidiary companies as formatted in AOC 1 form has been attached as Annexure- D to this report.
In the current year the company has evaluated the possibility of revival of the Subsidiary in the UAE i.e CIL FZE. The board felt that the emergence of digital IT and SMAC, product licenses would not be profitable and hence the entire value of investment is charged off.
5. Directors and Key Managerial Personnel.
Profile of the Directors:
(i) Mr. Chenchaiah Pantulu Pattapurathi (DIN 01583136)
He is Seventy (70) years old. He is a commerce graduate and a member of Institute of Chartered Accountants of India (qualified in the year 1971). He has forty five (45) years of experience in industries such as Electrical Appliances, Food Processing, Ship Building, Cement, Cement Products, Textiles, Pharmaceuticals etc., to his credit. His experience has been in the area of Financial Management, Management Accounting and Taxation.
He promoted CIL in the year 1994 and has led the company since its inception and has been instrumental in shaping and executing strategy and financial structuring. At present he is Managing Director and Chief Executive Officer of CIL. He is a Trustee of Chennarayudu Public Charitable Trust. He is a promoter of the company and holds 93, 15,820 shares of the company in his name as on March 31, 2016.
(ii) Mr. Satya Shiva Kumar Kanakadandi (DIN 02103299)
He is Fifty (50) years old. He is a science graduate. He has more than twenty six (26) years of experience in Software Development, Training and Heading MIS Departments. He has been instrumental in launching various corporate training programs for Universities, banks, and other training establishments. He promoted CIL in the year1994.
He has made significant contribution in setting up of the operations of the company since inception and has also been instrumental in providing a marketing base to the company and for delivering solutions in emerging technologies in yester years.
At present, he is Director (Operations) and Chief Operating Officer of CIL. He is a promoter of the company and holds 10, 61, 010 shares of the company in his name as on March 31, 2016.
(iii) Mr. Chandra Sekhar Pattapurathi (DIN 01647212)
He is Forty One (41) years old. He is a commerce graduate and a member of the Institute of Cost and Works Accountants of India (qualified in the year 1998). He began his career with CIL as an Executive in Finance & Account. He has worked with a large retail chain in international markets as a Senior Financial Analyst before joining the Board of CIL He has experience in, Finance, Accounts, Corporate Strategy, Financial Management, Taxation, Secretarial and International Trade Practices.
He has been appointed as director of CIL since 30th June 2006 .At present he is Director - (Finance) and Chief Financial Officer of the Company.
He is a promoter of the company and holds 3, 03,100 shares of the company in his name as on March 31, 2016.
(iv) Mr. Koteswara Rao Kanamarlapudi (DIN : 06401491)
He is sixty nine (69) years old. He is a commerce graduate and a member of the Institute of Chartered Accountants of India (qualified in the year 1972). He has worked with large logistics, Food Processing industries in India before setting up of a Construction and Contracting company in Doha, Qatar
He joined the Board of CIL on 30th September 1996 as a non executive promoter director
He is a promoter of the company and holds 31,000 shares of the company in his name as on March 31, 2016.He is a member of the Stakeholders relationship committee.
(v) Mr. Shankar Madhukar Khasnis (DIN : 02359561)
He is Fifty (50) years old. He is an Engineering Graduate.
He is the Chief Executive Officer of a Feedback Consulting, Mumbai. Shankar has worked across industry sectors and brings a strong strategic perspective to the board..
In his spare time, he teaches in management schools and enjoys mentoring students.
He is an independent director on the board of Cybermate Infotek Limited and is not a shareholder of the company.
Mr. Shankar resigned from the office of an independent director on the 25th February 2016 due to personal pre-occupations.
(vi) Mr. Pawan Kumar Kasera (DIN 00125178)
He is Sixty Two (62) years old. He is a commerce graduate. He has more than 30 years, experience as a business leader with "hands-on" mentality having commercial and technical background. He has extensive background and knowledge of business atmosphere, political and social structure in Asia South Pacific and some parts of South East Asia, Europe, Africa & the Middle-east. He brings his success in management of regional multicultural corporations with emphasis on marketing and corporate investment and also analytical skills and cultural approach.
He is an independent director on the board of Cybermate Infotek Limited and is not a shareholder of the company.
Mr. Pawan Kasera resigned from the office of an independent director on the 3rd March 2016 due to personal pre-occupations.
(vii) Dr. Devarapalli Jayarami Reddy ( DIN 02079731)
He is 70 years old. He is a medical fractioned by profession. He is well experienced in business of health care and is presently an investor in midsized hospitals.
He is an independent director on the board of Cybermate Infotek Limited and is not a shareholder of the company. He is a member of Audit Committee and Stakeholders relationship committee.
(viii) Callepalli Kamakshi Bharathi (DIN 07144611)
She is 39 years old. She is a post graduate in Electronics. She has rich experience in telecommunications and signaling. She is presently mentoring research trainees on telecom engineering. She is an independent director on the board of Cybermate Infotek Limited and is not a shareholder of the company. She is the chairperson of Nomination and Remuneration committee and a member of Audit Committee.
(ix) Vegunta Sai Roop Kumar (DIN: 05317482)
He is 41 years old , a commerce graduate and a fellow member of the Institute of Chartered Accountants of India (qualified in the year 2002 ) and graduate member of the institute of Cost Accountants of India.(qualified in the year 1998)
He started his career working with an audit firm and later moved into a multi business group viz Hospitality, Real Estate and Technology before setting up his professional practice as a Chartered Accountant. Mr. Vegunta Sai Roop Kumar was appointed as a Non Executive Independent Director by the Board of Directors of the Company in their Meeting held on 07th March, 2016 with immediate effect in terms of Section 149, 152 and 161 of the Companies Act, 2013. He is an independent director on the board of Cybermate Infotek Limited and is not a shareholder of the company. He is the Chairperson of Audit Committee and a member of Nomination and remuneration committee.
(x) Mr. Bade Srinivasa Reddy (DIN: 01384074)
He is 47 years old, He is a M.B.A (Finance), Certified Investment Adviser, National Stock Exchange of India Certified Market Professional (NCMP Level 5 - Highest Level), He is pursuing Ph.D., in Investment Management (part time).
He has more than 22 years of Hands on Experience in Financial Markets and Services Sector as Financial Analyst, Head of the firm with Stock Exchange Membership, Investment Advisory, Private Equity and other Businesses.
He is an Empanelled Corporate Trainer for SEBI Promoted NISM, American Academy of Financial Management (AAFM), National Stock Exchange of India (NSE) and others.
Mr. Bade Srinivasa Reddy was appointed as a Non Executive Independent Director by the Board of Directors of the Company in their Meeting held on 07th March, 2016 with immediate effect in terms of Section 149, 152 and 161 of the Companies Act, 2013.He is an independent director on the board of Cybermate Infotek Limited and is not a shareholder of the company. He is the chairperson of Stakeholders relationship committee and a member of nomination and remuneration committee.
Independence of directors
The Board has received statement of disclosures from all the Independent Directors highlighting the fulfillment of all the requirements as stipulated in Section 149(6) of the Companies Act, 2013 so as to qualify themselves to be appointed as Independent Directors under the provisions of the Companies Act, 2013 and the relevant rules. Every such statement submitted by the independents directors has been taken note of by the board.
Resignations
Mr. Shankar Khasnis and Mr. Pawan Kasera, Independent directors, resigned from the office on the 25th February and 3rd March 2016 respectively citing personal preoccupations.
The board places on record the valuable contribution made by the directors during their term of office.
Re-appointments
- Managing Director
Mr. P.C. Pantulu, Managing Director was re-appointed for a period of One year at the Extraordinary General Meeting held on the 4th April 2016 i.e upto May 09, 2017
- Directors
Ms. V.S. Roop Kumar and Mr.B.Srinivasa Reddy, were appointed as Additional Directors on 7th March 2016 to hold the said office till the date of the ensuing Annual General Meeting. They were appointed as Independent Directors for a period of five years at the Extraordinary General Meeting held on the 4th April 2016
Disclosures about receipt of any commission by MD /WTD from company or any commission/remuneration from the subsidiaries The Managing Director, or Whole time directors are not in receipt of any commission from the company or any remuneration or commission from the subsidiaries.
6. Particulars of employees
The remuneration paid to your Directors is in accordance with the Nomination and Remuneration Policy formulated in accordance with Section 178 of the Companies Act, 2013 and Regulation 19 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirement) Regulations, 2015 (including any statutory modification(s) or re-enactment(s) for the time being in force). The salient aspects covered in the Nomination and Remuneration Policy have been outlined in the Corporate Governance Report which forms part of this report.
The information required under Section 197 (12) of the Act read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed as Annexure - I.
7. Declaration by Independent Directors
Pursuant to sub section (6) of Section 149 of the Companies Act, 2013 and Regulation 16(1)(b) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirement) Regulations, 2015, all the Independent Directors of your Company have given declaration that they have met the criteria of independence as required under the Act and the regulations.
8. Remuneration Policy
Your Directors has, on the recommendation of the Nomination & Remuneration Committee, framed a policy for selection and appointment of Directors, Senior Management Personnel and their remuneration. The Remuneration Policy forms part of the Corporate Governance Report.
9. Formal Annual Evaluation of Performance of the Board and its Committees
SEBI (Listing Obligations and Disclosure Requirements) Regulations,
2015, mandates that the Board shall monitor and review the board evaluation framework.
The framework includes evaluation of directors on parameters such as
- Peer Evaluation
- Decision Making
- Analysis of Information
- Board Dynamics & Relationships
- Corporate Strategy
- Participation at Board Committees
The Companies Act 2013 states that a formal evaluation needs to be made by the board of its own performance and that of its committees and individual directors. Schedule IV to the Companies Act States that the performance evaluation of independent directors shall be done by the entire board of directors excluding the director being evaluated.
The evaluation process has been explained in Corporate Governance Report.
10. Board Committees
Detailed composition of the mandatory Board committees namely Audit Committee, Nomination and Remuneration Committee, Stakeholders Grievances'' Committee, number of meetings held during the year under review and other related details are set out in the Corporate Governance Report which forms a part of this Report.
11. Deposits
The Company has neither accepted nor renewed any deposits during the year under review.
12. Particulars of Loans, Guarantees or Investments made under section 186 of the Companies Act, 2013.
There were no loans, guarantees or investments made by the Company under Section 186 of the Companies Act, 2013 during the year under review.
13. Disclosures under Sexual Harassment of Women at Workplace
In accordance with the provisions of the Sexual Harassment of Women at the workplace (Prevention, Prohibition and Redressal) Act, 2013, the company is required to have an Anti- sexual harassment policy though which an Internal Complaints Committee is constituted. The said committee meets at regular intervals to redress any complaints received by the committee in these lines and after due deliberation aims at disposing off the complaints. However, there has been no such complaint filed within the company till date.
14. Significant and material orders passed by the regulators or court
There are no significant and material orders passed by the Regulators/ Courts that would impact the going concern status of the Company and its future operations.
15. Material changes and commitments, 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
(a) During the quarter ending 31st March 2016, the company has reviewed the operations of the wholly owned Subsidiary at UAE i.e Cybermate Infotek Limited FZE .
The subsidiary was formed in the year 2009, looking at the potential in the middle east markets. Subsequently, due to local and international factors resulted in adverse business conditions on account of which the company could not proceed with its plans.
The company waited all along looking for an improvement and it is felt that additional investment at this stage would not make it viable and hence the company has decided to close the operations and write off the carrying amount of the investments in overseas subsidiary of Rs.38,16,91,600/-.
(b) As at the balance sheet date, the company has reviewed the Software Products for their impairment.
On account of improvements in technology some of the products were not yielding revenues for the last three years and it is felt that additional investments in the said products would not enable to make the products viable and that there is no recoverable amount for these software products and hence the products valued at Rs21,53,51093/- identified as non cash generating units are written off as Impairment loss.
Further Unamortized Product Development expenses of Rs. 1,13,11,572/- has been fully written off considering the obsolescence in the technology of the products involved.
16. Particulars of Contracts or Arrangements made with Related Parties.
All Contracts/arrangements/transactions entered by the company during the financial year 2015-16 with related parties were in the ordinary course of business and on an arm''s length basis. During the year, the company has not entered into any contracts/arrangements/transactions with related parties which would be considered material.
In this regard, we draw your attention to Note 30 containing a Statement Pursuant to Clause (h) of sub section 134 of the companies Act 2013, and Rule 8(2) of the Companies (Accounts) Rules, 2014, to the financial statements which sets out related party disclosures.
17. Number of Board meetings conducted during the year under review.
S.No. |
Date of the Meeting |
For the Quarter |
1 |
28th May 2015 |
April - June |
2 |
30th July 2015 |
July - Sept |
3 |
26th August 2015 |
July - Sept |
4 |
12^ November 2015 |
Oct - Dec |
5 |
13th January 2016 |
Jan - March |
6 |
09th February 2016 |
Jan - March |
7 |
23rd February 2016 |
Jan - March |
8 |
07th March 2016 |
Jan - March |
18. Vigil Mechanism
The Company has established a vigil mechanism and oversees through the committee, the genuine concerns expressed by the employees and other Directors. The Company has also provided adequate safeguards against victimization of employees and Directors who express their concerns. The Company has also provided direct access to the chairman of the Audit Committee on reporting issues concerning the interests of co employees and the Company. The company has also set out a whistle blower policy in terms of the SEBI (Listing Obligation and Disclosure Requirements) Regulations 2015, so as to ensure that the business is conducted with integrity and the company''s financial information is accurate.
The Policy on Vigil Mechanism and whistle blower policy may be accessed on the company''s website.
19. Training of independent directors
Whenever new Non-executive and Independent Directors are inducted in the Board they are introduced to our Company''s culture through appropriate orientation session and they are also introduced to our organization structure, our business, constitution, Board procedures, our major risks and management strategy.
20. Directors Responsibility Statement
Pursuant to the requirement under Section 134 (3) (c) of the Companies Act 2013 with respect to Directors Responsibility Statement, it is hereby confirmed.
i. That in the preparation of the Annual Accounts for the financial year ended March 31, 2016 the applicable accounting standards had been followed along with proper explanation relating to material departures.
ii. 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 as at the end of the financial year and of the profit and loss of the Company for that period.
iii. That the Directors had taken proper and sufficient care towards the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 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 financial year ended March 31, 2016 on a ''going concern'' basis.
v. That proper internal financial controls were in place and that the financial controls were adequate and were operating effectively
vi. That systems to ensure compliance with the provision of all applicable laws were in place and were adequate and operating effectively.
21. Extract of Annual Return
Form MGT 9 containing details, forming part of the extract of the Annual return is annexed to this report as Annexure "II" [pursuant to the provisions of Section 92 read with Rule 12 of the Companies (Management and Administration) Rules, 2014] .
22. Statement concerning development and implementation of Risk Management Policy of the company.
The Company has constituted a Risk Management Committee at a board meeting held on the 28th May 2015 and details pertaining to the role and functions of this committee is mentioned under the Management Discussion and Analysis Report which forms a part of this report.
23. Details of Policy developed and implemented by the company on its Corporate Social Responsibility initiatives.
The Companies Act, 2013 lays down a mandatory provision wherein every company having
- Net worth of rupees five hundred crore or more, or
- Turnover of rupees one thousand crore or more or
- Net profit of rupees five crore or more during any financial year, shall constitute a Corporate Social Responsibility Committee of the Board consisting of three or more directors, out of which at least one director shall be an independent director.
As the said provisions are not applicable to the company, it has not developed and implemented any Corporate Social Responsibility initiatives.
24. Transfer of Unclaimed Dividend to Investor Education Protection Fund. The provisions of Section 125(2) of the Companies Act, 2013 do not apply as there was no dividend declared and paid last year.
25. Adequacy of Internal Financial Controls
The Company has established and is maintaining internal controls and procedures. The Board of Directors have evaluated the effectiveness of the Company''s internal controls and procedures and confirm that they are adequate based on the size and the nature of its business.
26. Internal Audit
The Company has a well established system of Internal Audit which carries out audit on Risk Management framework covering all the functions.
27. Auditors and Auditors report Statutory Auditors
M/s P.Murali & Co , Chartered Accountants, were appointed as Statutory Auditors from the conclusion of previous Annual General meeting until the upcoming annual general meeting. It is now proposed to re-appoint them as Statutory Auditors from the commencement of the ensuing Annual General Meeting till the conclusion of the next Annual General Meeting.. The Company has received a certificate from M/s P Murali & Co. to the effect that if reappointed, it would be in accordance with the provisions of Section 141 of the Companies Act, 2013.
As required above, the Board has, after considering the recommendations of the Audit Committee, incorporated a suitable resolution for your consideration and approval in the notice calling the ensuing Annual General Meeting of the Company.
Secretarial Auditor
The Board has appointed Mr.Y. Koteswara Rao, Practising Company Secretary, to conduct Secretarial Audit for the financial year 2015-16. The Secretarial Audit report for the financial year ended March 31, 2016 is annexed herewith in Annexure-III
28. Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo.
The detailed information as required under Section 134 (3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is furnished under Annexure "IV" as attached to this report.
29. Management Discussion and Analysis
Management Discussion and Analysis Report forms a part of the Annual Report
30. Explanation or comments on qualifications, reservations or adverse remarks or disclaimers made by the auditors and the practicing company secretary in their reports
The Auditors Report does not contain any qualification. The Notes/Remarks on financial statements referred to in the Auditor''s Report are self explanatory.
The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.
31. Shares
Buy back of Securities
The Company has not bought back any of its securities during the financial year under review.
Sweat Equity
The Company has not issued any Sweat Equity Shares during the financial year under review.
Bonus Shares
No Bonus Shares were issued during the financial year under review. Employees Stock Option Plan
The Company has not provided for any Stock Options to its employees during the financial year under review.
32. Disclosures
Company''s Property and Litigation
The Company has its own commercial space which was leased out to another IT Services company for 10 years in 2004.The Lease rentals were discounted with a housing finance company to augment working capital for the company. The tenant had terminated the lease and vacated the property of the company in 2009. Owing to Political conditions in the state the property could not be leased out and thereby the account became irregular. The company approached the lender to restructure the loan but they initiated proceedings under SARFAESI Act to recover their dues. The Lender took possession of the property. The company approached the Debts recovery tribunal. However, as on the balance sheet date the property continues to be registered in the name of the company and the lender is yet to make his submissions before the debts recovery tribunal.
Changes in Board & Board Committees
During the year, there were changes in the board on account of resignation of two independent directors and appointment of two new directors. The new appointments have resulted in reconstitution of the committees of the board.
Disclosures pertaining to the mandatory committees constituted by the Board for specific purposes has been included in the Corporate Governance Report which forms a part of the Annual report. Thus, the information pertaining to the composition of and number of meetings held by the committees such as Audit Committee, Nomination & Remuneration Committee, Stakeholders Relationship Committee are covered in there.
Managerial Remuneration
The nomination and remuneration committee has reviewed the provisions of Schedule V , Part II , Section II to the Companies Act 2013 on the Remuneration payable by companies having no profits or inadequate profit.
The Committee has clarified that the remuneration payable to the managerial personnel is within the limits prescribed there under.
33. Corporate Governance
Pursuant to Regulation 27 of the SEBI (Listing Obligation and Disclosure Requirement) Regulations, 2015, a separate report on corporate governance has been included in this Annual Report in Annexure -IV together with a certificate from the Practicing Company Secretary regarding compliance of conditions of Corporate Governance.
All Board members and senior management personnel have affirmed compliance with the Code of Conduct for the year 2015-16. A declaration to this effect signed by the Managing Director of the Company is contained in this Annual Report.
34. Acknowledgement
Your Directors place on record their sincere thanks to their employees, bankers, business associates, consultants, and various government authorities for their continued support extended to your Company''s activities during the financial year under review. Your Directors also acknowledge gratefully for your support and for the confidence reposed on this Company.
For and on behalf of the Board of Directors
Date : 12th August 2016 P.C.Pantulu
Place : Secunderabad Managing Director
Mar 31, 2015
Dear Members,
We have pleasure in presenting the report on our business and
operations for the year ended 31st March 2015.
1. Extract of Annual Return
Form MGT 9 containing details, forming part of the extract of the
Annual return is annexed to this report as Annexure "A" [pursuant to
the provisions of Section 92 read with Rule 12 of the Companies
(Management and Administration) Rules, 2014]
2. Number of Board meetings conducted during the year under review.
The directors of the company have met FIVE (5) times during the
financial year under review for the purposes of discussing the affairs
of the company and its business, the details of which are listed below:
S.No. Date of the Meeting For the quarter
1 30th May 2014 April - June
2 11th August 2014 July - Sept
3 4th September 2014 July - Sept
4 10th November 2014 Oct - Dec
5 13th February 2014 Jan - March
3. Financial Results The Company's financial performance for the year
under review along with previous year's figures is given hereunder:
Particulars for the year ended For the year ended
INR-'000 INR-'000
31/03/2015 31/03/2014
Net Sales/Income from Business 1,17,211.97 1,00,429.76
Operations
Other Income 577.48 1,195.77
Total Income 1,17,789.45 1,01,625.53
Less Interest 13,261.09 6,389.95
Profit / (Loss) before Depreciation & -64,621.18 14,385.73
Exceptional Item
Less Exceptional Item 2,14,752.66 -
Profit before Depreciation -2,79,373.84 14,385.73
Less Depreciation 9,461.74 14,009.65
Profit after Depreciation and Interest -2,88,835.58 376.08
Less Current Income Tax - 1,139.98
Less Previous Year Adjustment of Income Tax - -
Less Deferred Tax 830.15 -1,023.77
Net Profit after tax -2,89,665.73 259.97
Dividend - -
Net Profit after dividend and Tax -2,89,665.73 259.97
Amount transferred to General Reserve - -
Balance Carried to Balance Sheet -2,89,665.73 259.97
Earnings per Share (Basic) -4 -
Earnings per share (Diluted) -4 -
Financial Highlights
Revenues-Standalone
Revenue for the year ended 31st March, 2015 is Rs 1172.11 lacs as
compared to 1004.29 lacs the same period last year. The Company's
services improved marginally by 16 % over the previous year.
Revenues-Consolidated
The subsidiaries of the company both at USA and UAE are dormant hence
on account of consolidation there is no addition of revenues Profits-
Standalone
The Company had earned a net profit of Rs. 13 Lakhs prior to charge off
of the following
(a) Write off of Investment in US Subsidiary in full as against the
amortisation over a period of four years
(b) Exceptional Items include Loans, Advances and Book Debts which have
been carried forward over the past few years, have turned unrecoverable
hence they have been written off.
However on account of the write offs, the company had reported a Loss
of Rs28.96 Crores as against a Profit of Rs. 2.59 Lakhs in the previous
year.
Profits-Consolidated
There are no additions to the Profits of the company on consolidated
results as there were no operations in the Subsidiaries.
Capital Expenditure on Tangible Assets-Standalone
During the year the company had shifted its registered and corporate
office to a new location. Capital Expenditure on Tangible assets
amounted to about Rs 10.08 Lakhs as against 154.78 Lakhs in the
previous year.
The Company has capitalised the Work in Progress amounting to Rs. 26.32
crores which was incurred over the past few years to Software Products
as the expenditure pertains to additions in modules and features to the
IT Products developed by the company as against Rs.NIL in the previous
year.
Further the company has transferred an amount of Rs. 35.68 crores
treated in holding company's books of account as Capital Work In
Progress, to books of Subsidiary in UAE . The amount was incurred
towards product/license fee and for ramping up operations of the
Subsidiary.
Liquidity
The Company is dependent on funds from external sources for its working
capital.
The promoters of the company have funded the working capital from their
resources.
The company has been looking at raising long term working capital from
the markets and had deferred the plan due to unfavourable conditions.
Current year due to change in the Political environment and stable
capital market conditions the company proposes to raise funds and hence
a resolution is being proposed for approval of the shareholders.
4. Directors Responsibility Statement
In accordance with the provisions of Section 134(5) of the Companies
Act, 2013 the Board hereby submit its responsibility Statement:
a) in the preparation of the annual accounts, the applicable accounting
standards had been followed along with proper explanation relating to
material departures;
b) the directors 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 and loss
of the company for that period;
c) the directors 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 preventing and detecting fraud and other irregularities;
d) the directors had prepared the annual accounts on a going concern
basis; and
e) the directors had laid down internal financial controls to be
followed by the company and that such internal financial controls are
adequate and were operating effectively.
(A note on these controls forms a part of Management Discussion and
Analysis Report)
f) the directors had devised proper systems to ensure compliance with
the provisions of all applicable laws and that such systems were
adequate and operating effectively.
5. Directors and Key Managerial Personnel Profile of the Directors:
(i) Mr. Chenchaiah Pantulu Pattapurathi (DIN 01583136)
He is Seventy (70) years old. He is a commerce graduate and a member of
Institute of Chartered Accountants of India (qualified in the year
1971). He has forty four (44) years of experience in industries such as
Electrical Appliances, Food Processing, Ship Building, Cement, Cement
Products, Textiles, Pharmaceuticals etc., to his credit. His experience
has been in the area of Financial Management, Management Accounting and
Taxation.
He promoted CIL in the year 1994 and has led the company since its
inception and has been instrumental in shaping and executing strategy
and financial structuring. At present he is Managing Director and Chief
Executive Officer of CIL and is the chairman of the Nomination and
Remuneration Committee.
He is a Trustee of Chennarayudu Public Charitable Trust.
He is a promoter of the company and holds 93, 15,820 shares of the
company in his name as on March 31, 2015.
(ii) Mr.Satya Shiva Kumar Kanakadandi (DIN 02103299)
He is Forty Nine (49) years old. He is a science graduate. He has more
than twenty (25) years of experience in Software Development, Training
and Heading MIS Departments. He has been instrumental in launching
various corporate training programs for universities, banks and other
training establishments. He promoted CIL in the year 1994.
He has made significant contribution in setting up of the operations of
the company since inception and has also been instrumental in providing
a marketing base to the company and for delivering solutions in
emerging technologies in yester years. At present he is Director
Operations and Chief Operating Officer of CIL and is a member of
Stakeholders Relationship Committee. He is a promoter of the company
and holds 10, 61, 010 shares of the company in his name as on March 31,
2015.
(iii) Mr. Chandra Sekhar Pattapurathi (DIN 01647212)
He is Forty (40) years old. He is a commerce graduate and a member of
the Institute of Cost and Works Accountants of India (qualified in the
year 1998). He began his career with CIL as an Executive in Finance &
Account. He has worked with a large retail chain in international
markets as a Senior Financial Analyst before joining the Board of CIL
has experience in, Finance, Accounts, Corporate Strategy, Financial
Management, Taxation, Secretarial and International Trade Practices.
He has been appointed a director of CIL since 30th June 2006 .At
present he is Director - Finance and Chief Financial Officer of the
Company.
He is a promoter of the company and holds 3, 03,100 shares of the
company in his name as on March 31, 2015.
(iv) Mr. Koteswara Rao Kanamarlapudi (DIN : 06401491)
He is sixty nine (69) years old. He is a commerce graduate and a member
of the Institute of Chartered Accountants of India (qualified in the
year 1972). He has worked with large logistics, Food Processing
industries in India before setting up of a Construction and Contracting
company in Doha, Qatar He joined the Board of CIL on 30th September
1996 as a non executive director
He is a promoter of the company and holds 31,000 shares of the company
in his name as on March 31, 2015.
(v) Mr. Shankar Madhukar Khasnis (DIN : 02359561)
He is Forty Nine (49) years old. He is an Engineering Graduate.
He is the Chief Executive Officer of a Feedback Consulting, Mumbai.
Shankar has worked across industry sectors and brings a strong
strategic perspective to the board.
In his spare time, he teaches in management schools and enjoys
mentoring students.
He is an independent director on the board of Cybermate Infotek Limited
and is not a shareholder of the company.
(vi) Mr. Pawan Kumar Kasera (DIN 00125178)
He is Sixty One (61) years old. He is a commerce graduate. He has more
than 30 years, experience as a business leader with "hands- on"
mentality having commercial and technical background. He has extensive
background and knowledge of business atmosphere, political and social
structure in Asia South Pacific and some parts of South East Asia,
Europe, Africa & the Middle-east. He brings his success in management
of regional multicultural corporations with emphasis on marketing and
corporate investment and also analytical skills and cultural approach.
He is an independent director on the board of Cybermate Infotek Limited
and is not a shareholder of the company.
(vii) Dr. Devarapalli Jayarami Reddy ( DIN 02079731)
He is 70 years old. He is a medical practioner by profession. He is
well experienced in business of health care and is presently an
investor in midsized hospitals.
He is an independent director on the board of Cybermate Infotek Limited
and is not a shareholder of the company.
(viii) Callepalli Kamakshi Bharathi (DIN 07144611)
She is 39 years old. She is a post graduate in Electronics. She has
rich experience in telecommunications and signalling. She is presently
mentoring research trainees on telecom engineering.
Independence of directors
The Board has received statement of disclosures from all the
Independent Directors highlighting the fulfilment of all the
requirements as stipulated in Section 149(6) of the Companies Act, 2013
so as to qualify themselves to be appointed as Independent Directors
under the provisions of the Companies Act, 2013 and the relevant rules.
Every such statement submitted by the independents directors has been
taken note of by the board.
Re-appointments
* Managing Director
Mr.P.C.Pantulu, Managing director is being re-appointed for a period of
three years.
* Directors
Ms.C.Kamakshi Bharathi, was appointed as Additional Director on 28th
March 2015 to hold the said office till the date of the Annual General
Meeting. Subsequently, a notice has been received from a member
proposing her candidature for reappointment.
Further, Mr Shankar Khasnis and Dr.D.Jayarami Reddy, retire at this
Annual General Meeting and being eligible offer themselves for
reappointment.
Disclosures about receipt of any commission by MD /WTD from company or
any commission/remuneration from the subsidiaries The Managing
Director, or Whole time directors are not in receipt of any commission
from the company or any remuneration or commission from the
subsidiaries.
6. Auditors and Auditors report
Statutory Auditors
M/s P. Murali & Co , Chartered Accountants, were appointed as Statutory
Auditors from the conclusion of previous Annual General meeting until
the upcoming annual general meeting. It is now proposed to re-appoint
them as Statutory Auditors from the commencement of the ensuing Annual
General Meeting till the conclusion of the next Annual General
Meeting.. The Company has received a certificate from M/s P Murali &
Co. to the effect that if reappointed, it would be in accordance with
the provisions of Section 141 of the Companies Act, 2013.
The Notes on financial statements referred to in the Auditor's Report
are self explanatory
Secretarial Auditor
The Board has appointed Mr.Y. Koteswar Rao, Practising Company
Secretary, to conduct Secretarial Audit for the financial year 2014-15.
The Secretarial Audit report for the financial year ended March 31,
2015 is annexed herewith. Annexure-B The Auditors Report does contain
any qualification. The Notes/Remarks on financial statements referred
to in the auditors report are self explanatory.
The Secretarial Audit Report does contain any qualification,
reservation or adverse remark.
7. Particulars of Loans, Guarantees or Investments made under section
186 of the Companies Act, 2013.
There were no loans, guarantees or investments made by the Company
under Section 186 of the Companies Act, 2013 during the year under
review.
8. Particulars of Contracts or Arrangements made with Related Parties.
All Contracts/arrangements/transactions entered by the company during
the financial year 2014-15 with related parties were in the ordinary
course of business and on an arm's length basis. During the year the
company has not entered into any contracts/arrangements/transactions
with related parties which would be considered material.
In this regard, we draw your attention to Note 33 containing a
Statement Pursuant to Clause (h) of sub section 134 of the companies
Act 2013, and Rule 8(2) of the Companies (Accounts) Rules, 2014, to the
financial statements which sets out related party disclosures.
9. Review of Business Operations and Future Prospects.
Your Directors wish to present the details of Business operations done
during the year under review:
a. Services and Profitability
The year 2014 can be seen as a year of transformation at Cybermate.
The year witnessed some changes in the operations of the company,
shifting of the registered office of the company, commencement of BPO
operations.
Despite negative business sentiments and tough working capital
conditions, the company was able to address the challenges on time.
During the previous year, the company was able to sustain existing IT
operations, Network and Surveillance Services and Staff Augmentation
Services to its clients.
The Company has also commenced its BPO operations and has two new
clients in Telecom Domain. The BPO Operations are now stabilized and
are contributing positive margins.
The company has also commenced work on platforms for emerging IT
opportunities on SMAC Stack with a limited team and is working with one
client.
The company's profitability for the period before exceptional items
improved. However, due to the write off of Loans, Advances and Book
debts amounting to Rs. 21.49 Crores, and charge off of investment in US
Subsidiary in as against amortisation amounting to Rs. 13.07 Crores the
operations resulted in a net loss of Rs. 20.16 Crores
b. Sales
Revenue for the year ended 31st March, 2015 is Rs 1172.11 lacs as
compared to 1004.29 lacs the same period last year. The company's
services improved marginally by 16 % over the previous year.
c. Marketing and Market environment
Our service offerings are primarily custom built application
development, system integration , testing , maintenance , network ,
surveillance , IT support , consulting and BPO.
In order to differentiate our service and solution offerings, our
strategy will be to bring in concepts of automation , analytics ,
improving productivity to gain higher accuracy and to reduce the total
costs to clients. We continue to leverage the advantage of open source
technologies in providing innovative and cost effective performance
solutions.
Products: The company continues to enhance its products in health care
domain and is targeting to get identified as a key player.
Heal soft (HMS): A complete Enterprise Hospital Management Software
Suite (18 modules) for Clinics, Small, Medium and Large Hospitals at
multi locations in multiple technologies which can be integrated to an
ERP.
EHR: An Electronic Health Record is a digital version of a patient's
medical records.
Platforms: The company at present is in the process of building mobile
applications on multiple technologies to support E commerce and
Utilities.
We have commenced our efforts in emerging mobile and digital
technologies and big data analytics.
Services: - The company continues to improve upon its service offerings
across domains in the below segments.
- IT Support
- Consulting
- Network and Surveillance
Infrastructure: - The company proposes to set up infrastructure such as
data center to provide cost effective infrastructure solutions for
storage , business continuity, disaster recovery for its own and third
party applications and data.
Strategic Alliances: We propose to align with startups either as
partners or as subsidiaries in creating, deploying, integrating and
operating business solutions. We propose to raise additional capital to
deploy in making selective business acquisitions that augment our
expertise, compliment our presence in certain market segments and
accelerate the execution of our strategies.
d. Future Prospects including constraints affecting due to Government
policies
The future of IT Services business is providing a number of open source
software components, and or proprietary software products , all of
which can be deployed on public or private cloud or at the customer's
premise. These platforms are intended to address the key challenges
that businesses have n effectively storing , managing and analyzing the
increasing amounts of data available to them.
CIL's objective is to enable customers find an improved way to package,
develop , administer and monitor their enterprise data.
10. Dividend
No Dividend is being proposed for the current financial year.
11. Transfer of Unclaimed Dividend to Investor Protection Fund.
The provisions of Section 125(2) of the Companies Act, 2013 do not
apply as there was no dividend declared and paid last year.
12. Material changes and commitments, 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
Considering certain factors, the following are the material changes and
commitment that have occurred during the period under review which
directly/indirectly had an impact on the financial position of the
Company.
Company's Property and Litigation
The company has its own commercial space which was leased out to
another I.T. Services Company for 10 years in 2004. The lease rentals
were discounted with a housing finance company to augment working
capital for the company. The tenant had terminated the lease and
vacated the property of the company in 2009. Owing to the Political
Conditions in the state the property could not be leased out and there
by the account being irregular.
The company approached the lender to restructure the loan but they
initiated proceedings under the SARFARESI Act to recover their dues.
The company has approached the Debts Recovery Tribunal and appropriate
Legal Authorities for relief to protect its property.
13. Conservation of Energy, Technology Absorption, Foreign Exchange
Earnings and Outgo.
The detailed information as required under Section 134 (3)(m) of the
Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts)
Rules, 2014 is furnished under Annexure "C" as attached to this report.
14. Statement concerning development and implementation of Risk
Management Policy of the company.
The Company has constituted a Risk Management Committee at a board
meeting held on the 28th May 2015 and details pertaining to the role
and functions of this committee is mentioned under the Management
Discussion and Analysis Report which forms a part of this report.
15. Details of Policy developed and implemented by the company on its
Corporate Social Responsibility initiatives.
The Companies Act, 2015 lays down a mandatory provision wherein every
company having
* Net worth of rupees five hundred crore or more, or
* Turnover of rupees one thousand crore or more or
* Net profit of rupees five crore or more
during any financial year, shall constitute a Corporate Social
Responsibility Committee of the Board consisting of three or more
directors, out of which at least one director shall be an independent
director.
As the said provisions are not applicable to the company, it has not
developed and implemented any Corporate Social Responsibility
initiatives.
16. Formal Annual Evaluation of Performance of the Board and its
Committees
The manner in which the formal evaluation of the members of both the
board ad various committees constituted by the company has been covered
in the Corporate Governance Report. Annexure-D to this report.
The following policies relating to appointment of Directors, payment of
Managerial remuneration, Directors' qualifications, positive
attributes, independence of Directors and other related matters as
provided under Section 178(3) of the Companies Act, 2013 of the company
are attached as Annexures E and F
(a) Policy relating to selection of directors appointment. (Annexure E)
(b) Remuneration Policy for directors, Key Managerial Personnel and
other employees.(Annexure F)
17. Subsidiaries, Joint Ventures and Associate Companies.
Statement pursuant to Section 129 Subsection (3)(I) of the Companies
Act 2013, read with Rule 5 of Companies Accounts Rules, 2014 relating
to financial statements of subsidiary companies as formatted in AOC 1
form has been attached as Annexure- E to this report.
18. Deposits
The Company has neither accepted nor renewed any deposits during the
year under review.
19. Disclosures
Board Committees
Disclosures pertaining to the mandatory committees constituted by the
Board for specific purposes has been included in the Corporate
Governance Report which forms a part of the Annual report. Thus the
information pertaining to the composition of the and number of meetings
held by the committees such as Audit Committee, Nomination &
Remuneration Committee, Stakeholders Relationship Committee are covered
in there.
20 . Management Discussion and Analysis
Management Discussion and Analysis Report forms a part of the Annual
Report
21. Vigil Mechanism
The Company has established a vigil mechanism and oversees through the
committee, the genuine concerns expressed by the employees and other
Directors. The Company has also provided adequate safeguards against
victimization of employees and Directors who express their concerns.
The Company has also provided direct access to the chairman of the
Audit Committee on reporting issues concerning the interests of co
employees and the Company. The company has also set out a whistle
blower policy in terms of the listing agreement with the stock
exchange, so as to ensure that the business is conducted with integrity
and the company's financial information is accurate.
The Policy on Vigil Mechanism and whistle blower policy may be accessed
on the company's website.
22. Shares
Buy back of Securities
The Company has not bought back any of its securities during the
financial year under review.
Sweat Equity
The Company has not issued any Sweat Equity Shares during the financial
year under review.
Bonus Shares
No Bonus Shares were issued during the financial year under review.
Employees Stock Option Plan
The Company has not provided for any Stock Options to its employees
during the financial year under review.
23. Disclosures under Sexual Harassment of Women at Workplace
In accordance with the provisions of the Sexual Harassment of Women at
the workplace (Prevention, Prohibition and Redressal) Act, 2013, the
company is required to have an Anti- sexual harassment policy though
which an Internal Complaints Committee is constituted. The said
committee meets at regular intervals to redress any complaints received
by the committee in these lines and after due deliberation aims at
disposing off the complaints. However there has been no such complaint
filed within the company till date.
24. Acknowledgement
Your Directors place on record their sincere thanks to their employees,
bankers, business associates, consultants, and various government
authorities for their continued support extended to your Company's
activities during the financial year under review. Your Directors also
acknowledge gratefully for your support and for the confidence reposed
on this Company.
By Order of the Board
P.C. Pantulu
Managing Director
Place: Hyderabad
Date: 30th July 2015
Mar 31, 2014
To the Members,
The Directors have pleasure in presenting their 20th Annual Report of
the business and operations of your company for the year ended March
31st 2014.
Financial Results RS in LAKHS
2013-14 2012-13
Operational Income 1004.29 1239.73
Other Income 11.95 72.89
Total Revenues 1016.25 1312.62
Incr/(Deer) in Stock (48.50) -
Profit before Depreciation ,Interest & Tax 207.75 336.96
Depreciation 140.09 255.67
Interest 63.89 75.51
Profit before tax 376 578
Extra-ordinary Items/Prior Period Adjustment
Profit Before Tax 3.76 5.78
Provision for tax 11.39 60.77
Deferred Tax-Current Year -10.23 -60.89
Profit after Tax 2.59 5.90
Overview of Operations:
During the previous year the company continued its efforts to improve
up the operations by identifying new technology areas such which are
less dependent on working capital. There was a marginal improvement in
the Software development and allied services and Staff Augmentation
services but a notable drop in the products revenues. Further the
company was receiving better traction in the networking, telecom
engineering and related areas. The company is putting its best efforts
to compete with players in the health care products and services and is
confident of turning around the product revenue stream once the working
capital position of the company improves.
The turnover of the company has dropped by 18.89 % over the previous
year. Profit before Tax dropped by 34.95 %.
Directors'' Responsibility Statement
(As per the provisions of Section 217(2AA) of the Companies Act'' 1956),
the Directors confirm that:
a) in preparation of the annual accounts, the applicable accounting
standards have been followed along with proper explanation related to
material departures.
b) 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 true and fair view of the state of affairs of
the company as at the end of 31st March 2014 and the Profits for the
year ended on that date.
c) the directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Act for safeguarding the assets of the company and
for preventing and detecting fraud and other irregularities.
d) the directors have prepared the annual accounts on a going concern
basis. Information Pursuant to Section 217 of the Companies Act 1956.
As required under the provisions of Section 217(2A)of the Companies
read with the Companies (Particulars of employees) Rules'' 1975 as
amended form part of this report. However, in pursuance of section
219(l)(b)(iv) of the companies Act'' 1956 this report is being sent to
all shareholders of the company excluding the aforesaid information and
the said particulars are made available at the registered office of the
company.
Fixed Deposits
Your company has not accepted any deposits and, as such no amount of
principal or interest was outstanding on the date of Balance Sheet.
Directors:
Sri. Pawan Kumar Kasera and Sri Koteswar Rao Kanamarlapudi are to
retire at the conclusion of this annual general meeting and being
eligible offer themselves for reappointment. The Board of Directors
recommend their appointment.
Auditors:
The auditors, M/s. P.Murali & Co., Chartered Accountants, Hyderabad
(Firm Registration No 023412) retire at this Annual General Meeting and
are eligible for re-appointment. The Board recommends their
re-appointment.
Auditors Observations - Explanation of the Management.
Dues to Financial Institutions & Statutory Dues
The company''s property situated at Cyber Towers remained vacant for
several months, dues to M/s Dewan Housing Finance Limited could not be
met in time. This issue is being addressed on priority by discussing
with the institution and a solution is expected to be reached amicably.
Wherever legal steps were initiated, the same are being addressed in
accordance with the law.
During the Previous year the company was irregular in remitting of Tax
Deducted at Source.
Employees
The Board records its sincere appreciation for the significant
contributions made by employees across the company through their
continued commitment and dedication.
Subsidiary Companies
The Company has two Wholly Owned Subsidiaries viz
1. Cybermate Infotek Limited Inc at U.S.A
2. Cybermate Infotek Ltd F.Z.E at Hamriyah Free Zone, Sharjah, U.A.E.
The operations of the US Subsidiary remained dormant since the year
2002.
Further, the subsidiary company at U.A.E was incorporated in January
2008 and advances have been paid for acquisition of products for
marketing in the Mddle East regions. Subsequently, due to the slowdown
in economy the company has postponed its plans for commencement of its
operations. The company is confident of marketing its offerings once
the economy improves and will be in a position to present its financial
statements.
The statement pursuant to Section 212(1) (e) of the companies Act 1956
in respect of the subsidiaries is attached.
Demerger
The Board of Directors has approved a scheme of Demerger of some of the
activities of the company into separate companies. The scheme is being
finalized and will be informed to the shareholders at the appropriate
time.
Report on Corporate Governance, Management Discussion and Analysis.
A report on Corporate Governance along with certificate from the
Auditors of the Company regarding compliance of the conditions of
Corporate Governance as also a Management Discussion and Analysis
Report pursuant to Clause 49 of the Listing Agreement are annexed
hereto.
Acknowledgement
Your Directors acknowledge with a deep sense of gratitude the continued
support extended by investors, customers, business associates, bankers
and government departments.
For and on behalf of the Board
Place: Secunderabad P C Pantulu KS.Shiva Kumar P Chandra Sekhar
Date: 11th August 2014 Managing Director Director & COO Director
Finance
Mar 31, 2010
The Directors have pleasure in presenting their 16th Annual Report of
the business and operations of your company for the year ended March
31st2010.
Financial Results: (Rs. in lakhs)
2009-10 2008-09
Operational Income 1410.12 2092.82
Otherlncome 54.70 156.22
Total Revenues 1464.82 2249.04
Profit before Depreciation,
Interest&Tax 360.44 577.98
Depreciation 240.89 240.40
Interest 36.80 40.81
Profit before Tax 82.74 296.77
Provision for Tax 8.52 19.50
ProfitafterTax 74.22 277.27
Overview of Operations:
The year began with many challenges and many things changed The
financial sector suffered a meltdown, the stock markets collapsed
Liquidity became tight the world over.What started as a problem in the
housing sector became a problem of the financial sector and very
shortly, it hit the real world economy. Funds to the real world economy
got choked and customers found their business shrinking, their supply
chains and inventories mounting and their profitability disappearing
and the first quarter of the last year only deepened as the year
progressed. We are not yet out of these problems. By the most favorable
estimates, the world economy may hit the rock bottom in another 2/3
quarters, but the recovery will take bng time.
The pressure of liquidity and profitability forced customers all over
cut costs, to postpone his commitments and to ensure that they got
value for their money.
In a sense last year we emerged toughened by the fire of the global
economic challenges and I believe we came out as a distinctly better
company at the end of the year as compared to what we were at the
beginning of the year.
Global Depositary Receipts(GDRs)
Your Company has been in a constant endeavour to get to *he next level
in its services and offerings has been facing the pressure for
liquidity. The company has commenced the folbw. on offering of its GDR.
The company has obtained in-principal approvals from the Bombay stock
exchange and also the Bangalore stock exchange where the equity share
of the company is listed The company is in the process of concluding
the offering to secure funds for its bng term working capital
requirements.
Fixed Deposits
Your company has not accepted any deposits and, as such no amount of
principal or interest was outstanding on the date of Balance Sheet
Directors:
Sri Pawan Kasera and Sri K Koteswara Rao are to retire at the
conclusion of this annual general meeting and being eligible offer them
selves for reappointment. The Board of Directors recommend their
appointment In accordance with the requirements of Clause 49 of the
Listing Agreement executed with the stock exchanges as also in
pursuance of section 292A of the Companies Act1956, following steps
have been taken by the Board of Directors:
a) The Board of Directors comprises eight members (inclusive of three
executive directors and four Non-Executive directors). The
reconstituted Board comprises the following:
1} Mr. P. C. Pantuhi Managing Director
2) Mr. K. S. Shiva Kumar Director & COO
3) Mr. P.Chandra Sekhar Director-Finance
4) Mr. K. K. Rao Non-Executive Director
5) Mr. Shankar Khasnis Independent Director
6) Mr. Pawan Kumar Kasera Independent Director
7) Dr.DJayarami Reddy Independent Director
Audit Committee:
The Audit committee provides direction to the audit and risk management
function in the company and monitors the quality of internal audit and
the Committee looks after the financial reporting process to ensure
proper disclosure of financial statement, recommending appointment/
removal of external auditors and fixing remuneration.
Audit committee has been reconstituted as follows.
1) Mr. Pawan Kumar Kasera Chairman
2) Mr. D) Reddy Member
3) Mr.KKRao Member
Directors Responsibility Statement (As the provisions of Section
217(2AA) of the Companies Act 1956), the Directors confirm that
a) in preparation of the annual accounts, the applicable accounting
standards have been followed abng with proper explanation related to
material departures.
b) 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 true and fair view of the state of affairs of
the company as at the end of 31* March 2010 and the profits for the
year ended on that date.
c) the directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Act for safeguarding the assets of the company and
for preventing and detecting fraud and other irregularities.
d) the directors have prepared the annual accounts on a going concern
basis.
For and on behalf of the Board
Sd/- Sd/- Sd/-
P.C.Pantulu K.S.Shiva Kumar P Chandra Sekhar
Managing Director Director Director &COO Finance.
Place:Secunderabad
Date:31st May 2010
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