Mar 31, 2018
Dear Members,
The Directors have pleasure in presenting the 23rd Annual Report on the business and operations of your Company together with the Audited Financial Statements and the Auditorsâ Report for the Financial Year ended March 31, 2018.
FINANCIAL RESULTS:
The financial performance of your Company for the year ended March 31, 2018 is summarized below -
(Rs. in Millions)
Particulars |
Standalone |
Consolidated |
||
2017-18 |
2016-17 |
2017-18 |
2016-17 |
|
Gross Revenue |
592.08 |
650.95 |
952.05 |
973.92 |
Profit before Interest & Depreciation |
92.03 |
175.30 |
113.96 |
186.63 |
Finance costs |
18.70 |
14.05 |
18.70 |
14.04 |
Depreciation |
45.93 |
41.86 |
55.77 |
43.17 |
Profit before tax |
27.40 |
119.39 |
39.49 |
129.42 |
Tax Expense |
16.00 |
32.50 |
16.00 |
32.50 |
Deferred Tax |
(7.35) |
(2.34) |
(7.35) |
(2.34) |
Income Tax adjustments from earlier years |
(0.85) |
1.19 |
(0.85) |
1.19 |
Profit after tax |
19.60 |
88.04 |
31.69 |
98.07 |
Accumulated profit brought forward from previous year |
404.39 |
348.90 |
270.25 |
204.73 |
Dividend paid (including dividend tax) |
32.99 |
32.55 |
32.99 |
32.55 |
Balance to be carried forward |
391.00 |
404.39 |
268.95 |
270.25 |
FINANCIAL PERFORMANCE OVERVIEW
CyberTech Consolidated Financial Performance:
- The Company registered total income of Rs. 952.1 million for the year ended March 31, 2018 as compared to Rs. 973.9 million for the year ended March 31, 2017, reflecting a small reduction of 2.2%.
- Operating revenue for the year under review was Rs. 870.5 million in line with Rs. 875.7 million in the previous year.
- The Company earned net profit of Rs. 31.7 million for the year ended March 31, 2018 as against a profit of Rs. 98.1 million for the year ended March 31, 2017. The drop in profit seen for the year was mainly due to various adjustments including a provision against receivables and the initial booking of the following items required under changes to adopt India AS (Accounting Standards) as mandated as of year end as follows:
o Provision against receivables Rs. 17.82 million
o The non-cash imputed value of options vested to date Rs. 3.8 million
o Fair value of security deposits Rs. 7.41million
o Provision against credit losses Rs. 2.63million
o Non-cash adjustment of investments to fair market value Rs9.58 million CyberTech Standalone Financial Performance:
- The Company reported total revenue of Rs. 592.1 million for the year ended March 31, 2018 as compared to Rs. 651.0 million for the year ended March 31, 2017.
- Operating revenue for the year under review was Rs. 510.7 million as compared to Rs. 558.7 million in the previous year. Operating revenue includes both software support and development activities.
- Other Income for the year under review was at Rs. 81.4 million as against Rs. 92.2 million in the previous year.
- The Profit after Tax for the year under review was Rs. 19.6 million as against Rs. 88.0 million in the previous year.
DIVIDEND AND RESERVES
Your Directors are pleased to recommend a dividend @10% (Re.1/- per Equity Share of Rs.10/- each) for the Financial Year 2017-18, subject to the approval of shareholders at the ensuing Annual General Meeting. If approved, the total dividend payout for the year under review will be 10% amounting to Rs. 27.5 Millions.
No amount was transferred to General Reserves for the year under review.
CONSOLIDATED FINANCIAL STATEMENTS
Our Company has adopted and implemented Indian Accounting Standards (âInd ASâ), in accordance with Companies (Indian Accounting Standards) Rules, 2015 with effect from April 01, 2017 as prescribed by Ministry of Corporate Affairs, Government of India vide circular dated February 16, 2015.
The consolidated financial statements of the Company, including its wholly owned US subsidiary are prepared in accordance with Ind AS 110 (Consolidation of Accounts) as prescribed by the Institute of Chartered Accountants of India and in compliance with the terms of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 as amended from time to time. Together, these comprise part of the Annual Report and Accounts. The summarized consolidated results are given alongside the financial results of your Company.
WHOLLY OWNED SUBSIDIARY IN USA
The Company owns 100% interest in CyberTech Systems and Software Inc., USA (CSSI), which was incorporated on June 12, 2003, the results of CSSI are consolidated herein.
The Statement in Form AOC-1 containing salient features of the financial statements of Companyâs Subsidiary is attached as Annexure I
BUSINESS OPERATIONS OVERVIEW AND OUTLOOK
The State of Companyâs Affairs:
CyberTech continued to be a trusted advisor for several global enterprises, helping them geo-enable and digitalize mission-critical business processes for users on and off the field. In terms of strategic partnership and alliances, CyberTech continued to work with its existing partners - Cisco®, Microsoft®, ESRI® and SAP®. It is expected that with the help of these alliances and partnerships, the Company will continue to lead business and revenue growth and increasing profitability with a continued focus on offshore revenue going forward.
In line with CyberTechâs strategy to invest in Cloud-based Spatial Analytics Platform, Spatialitics LLC, a new wholly owned subsidiary is founded. This strategic step will help us to focus on growth opportunities related to GIS solutions and Spatial Analytics and to hold our Intellectual Property created in connection with these activities. As we transition to providing a Spatial Analytics platform, the focus is to make our products available through our channel partners.
During the year, the Company has hired some senior professionals who have impacted in the Products and Platform business in their earlier stint. This will augment the transformation and development of CyberTechâs spatial analytics and IoT platform. Mr. Pankaj Srivastava, former Vice President of Ciscoâs software platform group, joined the Company as the Senior Vice President and C.T.O of Software Platforms. Pankaj will lead the transformation and development of CyberTechâs spatial analytics and IoT platform.
During the year, CyberTech participated and co-sponsored the Geospatial World Forum 2018 Conference and showcased its Geospatial platforms and solutions for smart Cities. The Company also participated in Sapphire 2018, largest SAP® user event. CyberTech also co-presented its Healthcare Analytics Platform CyberServe for Population Health in ESRI® UC 2017, with SAP®.
SHARE CAPITAL
During the year under review, the Company has:
a) Issued and allotted 336,250 Equity Shares under Employee Stock Option Scheme (ESOP) to the employees of the Company and its subsidiary Company. As a result of the above allotment, the paid-up Share capital of the Company increased from Rs.27,07,83,430/- comprising of 2,70,78,343 Equity Shares of Rs.10/- each as on March 31,2017 to Rs.27,41,45,930/- comprising of 2,74,14,593 Equity Shares of Rs.10/- each as on March 31,2018; and
b) Issued and allotted One Million (1,000,000) warrants @ Rs.67/- per share warrant, which were convertible into an equivalent number of Equity shares pursuant to a conversion option exercisable by the allottee within a period of 18 months from the date of allotment. The warrants were allotted on October 27, 2016 upon payment of Rs.16.75 per warrant (being 25%). The Company did not receive any remittance towards the balance amount. Therefore as per SEBI (ICDR) Regulations, 2009, the warrants were cancelled and the consideration paid at the time of issuance was forfeited.
DEPOSITS
During the year under review, no deposits were accepted by the Company within the meaning of Section 73 of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES
All transactions entered into with the Related Parties in terms of Section 2(76) and Section 188 of the Companies Act, 2013, Rules issued thereunder read with Regulation 2(zc) and Regulation 23 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 during the Financial Year were in the nature exempted being transactions between the Company and its 100% Subsidiary or in accordance with the approval obtained from the Members of the Company, as the case may be. During the Financial Year 2017-18, the Company did not enter into materially significant transactions with Promoters, Key Managerial Personnel or other related parties. The details of the related party transactions as required under Ind AS-24 are set out in Note No. 32 to the consolidated financial statements forming part of this Annual Report and disclosed vide form AOC-2 has been appended as Annexure II, pursuant to Section 134(3)(h) of the Companies Act, 2013 and rules made thereunder.
The policy on Related Party Transactions as approved by the Board is uploaded on the Companyâs website www.cybertech.com and can be accessed at http://www.cybertech.com/investors/corporate policies.aspx
PARTICULARS OF LOANS GIVEN, INVESTMENTS MADE, GUARANTEE GIVEN AND SECURITIES PROVIDED UNDER SECTION 186 OF THE COMPANIES ACT, 2013
The Company has not granted any loan, guarantee and investment to any person, other than its wholly owned subsidiary. The details of which are given in the Notes to Financial Statements.
RISK MANAGEMENT
Your Company recognizes that risk is an integral part of any business and is committed to manage the risk in a proactive and efficient manner. Your Company has Risk Management Policy in place. The Policy provides for a risk management framework to identify and assess all kinds of risks, such as operational, strategic, resources, security, industry, regulatory & compliance and other risks, and put in place an adequate risk management infrastructure capable of addressing these risks. The Board periodically reviews the risks, if any, and ensures to take steps for their mitigation.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO
The information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134 (3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 are given in Annexure III forming part of this Report.
MANAGERIAL REMUNERATION & PARTICULARS OF EMPLOYEES
In accordance with Section 178 and other applicable provisions of the Companies Act, 2013 read with the Rule 6 of the Companies (Meetings of Board and its Powers) Rules, 2014 issued thereunder, the Board of Directors at their meeting held on September 30, 2014 formulated the Nomination and Remuneration Policy of your Company on the recommendations of the Nomination and Remuneration Committee and further aligned with the Regulation 19 of the SEBI (LODR) Regulations, 2015. The salient aspects covered in the Nomination and Remuneration Policy with respect to the appointment and remuneration of Directors, Key Managerial Personnel, Senior Management and other matters have been outlined in the Corporate Governance Report, which forms part of this Report. The information required under Section 197 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of Directors and Key Managerial Personnels of your Company is set out in MGT-9 as Annexure V.
DISCLOSURES UNDER SEXUAL HARASSMENT OF WOMEN AT WORK PLACE (PREVENTION, PROHIBITION & REDRESSAL) ACT, 2013
Your Company is committed to creating and maintaining a secure work environment where its employees, agents, vendors and partners can work and pursue business together in an atmosphere free of harassment, exploitation and intimidation. To empower women and protect women against sexual harassment, a policy for prevention of sexual harassment has been rolled out and an Internal Committee (ICC) has been set up as per Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013 and Rules made thereunder. All employees (permanent, contractual, temporary, trainees) are covered under this policy. This policy allows employees to report sexual harassment, if any, at the workplace and the Company conducts regular awareness programs in this regard. The Internal Committee is empowered to look into all complaints of sexual harassment and facilitate free and fair enquiry process with clear timelines.
During the year 2017-18, no complaints were received regarding Sexual harassment.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Management Discussion and Analysis Report for the financial year under review, as stipulated under Regulation 34 of SEBI (LODR) Regulations, 2015 is presented in a separate section forming part of the Annual Report.
CORPORATE GOVERNANCE
In terms of Regulation 34 of the SEBI (LODR) Regulations, 2015, a separate Report on Corporate Governance is provided together with a Certificate from the Practicing Company Secretary regarding compliance of conditions of Corporate Governance. A Certificate of the CFO of the Company in terms of SEBI (LODR) Regulations, 2015, inter alia, confirming the correctness of the financial statements and cash flow statements, adequacy of the internal control measures and reporting of matters to the Audit Committee, is also annexed to the aforesaid Report.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
Mr. Anant V. Rajwade (DIN: 00007232) (AVR), Non-Executive and Independent Director resigned from the Company on November 04, 2017 due to ill health.
He passed away in Month of February this year. The Chairman and Board of Directors of the Company fondly remember AVR and paid sincere and heartfelt tribute, by placing on record deep appreciation for his support, guidance and mentorship rendered to the Chairman and CyberTech during all these years.
Mr. Steven Jeske (DIN: 01964333), Director of the Company, retires by rotation and being eligible, has offered himself for re-appointment. The brief resume of Mr. Steven Jeske and other information under Regulation 36 of the SEBI (LODR) Regulations, 2015 with respect to the Director seeking re-appointment has been provided in the Notice convening 23rd AGM. Your Directors recommend his re-appointment.
Ms. Angela C. Wilcox (DIN: 08068715) was appointed as an Additional Director (Non-Executive and Independent) with effect from February 13, 2018. Ms. Wilcox is an experienced legal professional practicing as Trade Mark, Copyright and Business Counsel from Illinois, Chicago, USA
Mr. Ramasubramanian S. (DIN: 05350841), Executive Director of the Company is re-appointed by the Board, subject to the approval of the members of the Company for a period of Three (03) years with effect from August 04, 2018 on the existing terms and conditions.
Pursuant to the provisions of Section 149 of the Act, Mr. M.P. Bharucha, Mr. Sudhir Joshi, Dr. N L Sarda, Dr. Shreepad Karmalkar and Ms. Angela C. Wilcox, the Independent Directors have submitted a declaration that each of them meets with the criteria of independence as provided in Section 149(6) of the Act and there has been no change in the circumstances which may affect their status to continue as an independent director on the Board of Directors of the Company.
Presently, Mr. Ramasubramanian Sankaran - Executive Director, Mr. Praveen Agarwal - Chief Financial Officer and Ms. Sarita Leelaramani - Company Secretary, are the Key Managerial Personnel of your Company in accordance with the provisions of sections 2(51) and 203 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.
NUMBER OF MEETINGS OF THE BOARD
During the year under review, 4 (four) Board Meetings were held viz. May 10, 2017; August 23, 2017; November 20, 2017; and February 13, 2018. The details of the meetings of the Board and its committees are set out in the Corporate Governance Report which forms part of this Annual Report. In terms of requirements of Schedule IV of the Companies Act, 2013, a separate meeting of Independent Directors was also held on March 13, 2018 to review the performance of Non-independent Directors (including the Chairman), the entire Board and quality, quantity and timelines of the flow of information between the Management and the Board.
AUDIT COMMITTEE
The Audit Committee of the Board of Directors of the Company is duly constituted in accordance with the provisions of Sections 177 (8) of the Companies Act, 2013, read with Rule 6 and 7 of the Companies (Meetings of the Board and its Powers) Rules, 2013 and Regulation 18 of SEBI (LODR) Regulations, 2015 which consists of the following Members:
S. No. |
Name |
Designation |
1 |
Mr. Sudhir Joshi |
Chairman, Independent Director |
2 |
Mr. A. V. Rajwade* |
Member, Independent Director |
3 |
Dr. Shreepad Karmalkar |
Member, Independent Director |
4 |
Dr. N.L. Sarda |
Member, Independent Director |
*Mr. Anant V. Rajwade resigned as a Non-Executive and Independent Director w. e. f. November 04,2017and consequently ceased to be a member of this Committee.
All the recommendations of the Audit Committee during the year were accepted by the Board of Directors of the Company. For further details, please refer the Corporate Governance Report forming part of the Annual Report
VIGIL MECHANISM
The Company has adopted a Whistle Blower Policy and has established the necessary vigil mechanism for directors and employees to report concerns about unethical behavior. No person has been denied access to the Chairman of the Audit Committee. The said policy has been uploaded on the website of the Company http://www.cybertech.com/investors/corporate policies.aspx
COMPANYâS POLICY ON APPOINTMENT AND REMUNERATION OF DIRECTORS
A brief extract on the Companyâs policy on Directorsâ appointment and remuneration and other matters provided in Section 178(3) of the Act has been disclosed in the Corporate Governance Report, which is a part of this Annual Report.
PERFORMANCE EVALUATION OF DIRECTORS
In terms of the provisions of the Companies Act, 2013 read with Rules issued thereunder and the SEBI (LODR) Regulations, 2015, the Board of Directors has carried out the annual performance evaluation of the entire Board, Committees and all the Directors based on the criteria laid down by the Nomination and Remuneration Committee.
In compliance with the requirements under Regulation 25(3) of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, a meeting of Independent Directors was held on March 13, 2018 primarily to evaluate, performance of non-independent directors, the Chairman of the Company and the board as a whole, taking into account the views of Executive Directors and Non-Executive Directors.
The Board and the Nomination and Remuneration Committee reviewed the performance of each director on the basis of criteria such as the contribution of the individual director to the board and committee meetings like preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meetings, etc.
In the board meeting that followed the meeting of the independent directors, the Performance evaluation by the Independent Directors was noted by the Board.
DIRECTORSâ RESPONSIBILITY STATEMENT AS REQUIRED UNDER SECTION 134 (3)(C) AND SECTION 134 (5) OF THE COMPANIES ACT, 2013
In terms of Section 134(3) (c) of the Companies Act, 2013, to the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors state and confirm that:
i) in the preparation of the annual financial statements for the year ended March 31, 2018, the applicable accounting standards read with the requirements set out under Schedule III to the Act, have been followed along with proper explanation relating to material departures, if any;
ii) such accounting policies as mentioned in the notes to the Financial Statements for the year ended March 31, 2018 have been selected and applied consistently and judgments and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2018 and of the Profit of the Company for the year ended on that date;
iii) proper and sufficient care has been taken for 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) the annual financial statements for the year ended March 31, 2018 have been prepared on a going concern basis;
v) proper internal financial controls are followed by the Company and that such financial controls are adequate and are operating effectively; and
vi) proper systems to ensure compliance with the provisions of all applicable laws are in place and such systems are adequate and operating effectively.
STATUTORY AUDITORS
M/s. Bagaria & Co., LLP, Chartered Accountants, (Firm Registration No.: 113447W) have been appointed as Statutory Auditors of the Company for a period of 5 (Five) years, from the conclusion of 22nd Annual General Meeting till the conclusion of 27th Annual General Meeting by the shareholders of the Company.
The Statutory Auditors have confirmed their eligibility and necessary certificates as required under the Act have been received from them.
Pursuant to notification of certain sections of the Companies (Amendment) Act, 2017, on May 7, 2018, the requirement of ratification of the appointment of auditors by the members is no longer required. However, as matter of abundant precaution, the ratification by the members is being sought at the ensuing AGM. Further, taking into consideration this recent amendment, the annual ratification will not be sought next year onwards.
AUDITORâS REPORT
During the Financial Year under review there are no qualifications, reservations or adverse remarks or disclaimers made by the Statutory Auditors M/s. Bagaria & Co., LLP, Chartered Accountants on the financial statements of the Company.
The Statutory Auditors of the Company have not reported any fraud as specified under the second proviso of Section 143(12) of the Companies Act, 2013 (including any statutory modification(s) or re-enactment for the time being in force).
INTERNAL AUDITORS
Pursuant to the provisions of Section 138 of the Companies Act, 2013 read with Rule 13 of Companies (Accounts) Rules, 2014, the Board of Directors had appointed M/s. Desai Associates, Chartered Accountants, (Firm Registration No. 102286W) as Internal Auditors of the Company for F.Y. 2017-18 and their reports were reviewed by the Audit Committee and the Board on periodical basis.
SECRETARIAL AUDITORS
Pursuant to the provisions of Section 204 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors had appointed M/s. S. Anantha & Ved LLP, Company Secretaries, Mumbai as Secretarial Auditors, to conduct the Secretarial Audit of the Company for F.Y. 2017-18. Form MR-3, the Secretarial Audit Report is annexed herewith as Annexure IV to this Report.
The Secretarial Audit Report does not contain any qualification, reservation, disclaimer or adverse remark.
FAMILIARISATION PROGRAMME FOR INDEPENDENT DIRECTORS
Pursuant to the requirement of Regulation 25 (7) of the SEBI (LODR) Regulations, 2015, the Company needs to formally arrange Familiarization Programme for Independent Directors to familiarize them with their role, rights and responsibility as Directors, the working of the Company, nature of the industry in which the Company operates, business model etc.
Accordingly our Company has conducted Familiarization Programme in timely manner and the details of the same are hosted on Companyâs website: http://www.cybertech.com/financialReports/Familiarization programme FY2017-18.pdf
EXTRACT OF ANNUAL RETURN
The details forming part of the extract of the Annual Return in Form MGT- 9 in accordance with Section 92(3) of the Companies Act, 2013 read with the Companies (Management and Administration) Rules, 2014, is annexed as Annexure V
CORPORATE SOCIAL RESPONSIBILITY (CSR)
The Company continues to believe in operating and conducting its business in a socially responsible way. This belief forms the core of the CSR policy of the Company to focus on holistic development of its host community and immediate social and environmental surroundings qualitatively. Hence, in accordance with the requirements of Section 135 of the Companies Act, 2013, your Company has constituted a Corporate Social Responsibility Committee (âCSR Committeeâ). The composition and terms of reference of the CSR Committee are provided in Corporate Governance Report. The Company has framed its CSR policy, which is available at www.cybertech.com. Annual Report on CSR activities as required under the Companies (Corporate Social Responsibility Policy) Rules, 2014 has been appended as Annexure VI to this report. During the year under review, the Company has spent Rs.14 Lakhs towards (CSR).
INTERNAL FINANCIAL CONTROLS WITH RESPECT TO THE FINANCIAL STATEMENTS
The Company maintains adequate internal control system and procedures commensurate with its size and nature of operations. The internal control systems are designed to provide a reasonable assurance over reliability in financial reporting, ensure appropriate authorization of transactions, safeguarding the assets of the Company and prevent misuse/ losses and legal compliances. The comprehensive Internal Financial Control policy along with the effective Internal Audit System helps the Company in achieving orderly and efficient conduct of its business, including adherence to companyâs policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information.
The Internal control system includes a well defined delegation of authority and a comprehensive Management Information System coupled with quarterly reviews of operational and financial performance, a well structured budgeting process with regular monitoring of expenses and Internal audit.
The Internal Audit reports are periodically reviewed by the management and the Audit Committee, and necessary improvements are undertaken, if required.
PARTICULARS OF EMPLOYEES
Disclosures relating to remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are also provided in Annexure VIIof the Report.
In terms of the provisions of Section 197(12) of the Act read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended, a statement showing the names and other particulars of the employees drawing remuneration in excess of the limits set out in the said rules are provided in the Report and forms part of this Report. However, having regard to the provisions of the first proviso to Section 136(1) of the Act and as advised, the Annual Report excluding the aforesaid information is being sent to the members of the Company as the said information is available for inspection at the registered office of the Company during working hours and any member interested in obtaining such information may write to the Company Secretary and the same will be furnished on request.
SIGNIFICANT OR MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS WHICH IMPACT THE GOING CONCERN STATUS AND COMPANYâS OPERATIONS IN FUTURE
The Company had filed a Writ Petition with the judicature of Honâble Bombay High Court (Nagpur Bench) on April 20, 2017 challenging the Order passed against the Company by the Commissioner of Amravati Municipal Corporation, Maharashtra (AMC) cancelling the ongoing work contract of the Company and the related issues thereof. The Honâble Bombay High Court (Nagpur Bench) admitted the writ petition filed by the Company and passed a stay order in favor of the Company against the impugned Order passed by the Amravati Municipal Corporation. Further, the High Court directed the Company to approach the lower courts for appropriate claims. Accordingly the Company is processing with lower courts for further legal action(s) against AMC.
SECRETARIAL STANDARDS ISSUED BY THE INSTITUTE OF COMPANY SECRETARIES OF INDIA (ICSI)
The Company complies with the Secretarial Standards issued by ICSI.
EMPLOYEES STOCK OPTION PLAN (ESOP)
During F.Y. 2017-18, there has been no change in the Employee Stock Option Plan (ESOP), 2014 of the Company. The ESOP 2014 is in compliance with the SEBI (Share Based Employee Benefits) Regulations, 2014 (âthe SBEB Regulationsâ) Disclosures pertaining to the ESOP 2014 pursuant to the SBEB Regulations are provided as Annexure VIII.
GENERAL
Your Directors state that no disclosure or reporting is required in respect of the following items, as there were no transactions on these items during the year under review, or the said items are not applicable to the Company:
1. Cost Audit;, under the applicable provisions of the Companies Act, 2013 and Rules made thereunder;
2. Issue of equity shares with differential rights as to dividend, voting or otherwise; and
3. There are no material changes and commitments affecting the financial position of the Company which have occurred between the end of the financial year 2017-18 and the date of this report, except the one mentioned above in connection with the Order passed by the Amravati Municipal Corporation (AMC).
ANNEXURES FORMING PART OF BOARDâS REPORT
The Annexures referred to in this Report and other information which are required to be disclosed are annexed herewith and form part of this Report:
Annexure |
Particulars |
I |
Form AOC-1, Particulars of Subsidiary |
II |
Form AOC-2 , Disclosure of particulars of contracts/arrangements entered into by the company with related parties |
III |
Information with respect of energy conservation, technology absorption, foreign exchange earnings and outgo |
IV |
Form MR-3, Secretarial Audit Report |
V |
MGT - 9, Extract of the Annual Return |
VI |
Report on Corporate Social Responsibility |
VII |
Particulars of employees, Disclosure pursuant to Section 197(12) of Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 |
VIII |
ESOP Disclosure |
CAUTIONARY STATEMENT
Statements in the Boardsâ Report and the Management Discussion & Analysis Report, describing the Companyâs objectives, expectations or forecasts may be forward-looking, within the meaning of applicable securities laws and regulations. Actual results may differ materially from those expressed in the statement. Important factors that could influence the Companyâs operations include global and domestic demand and supply conditions of Information Technology related services, changes in government regulations, tax laws, economic developments within the country and other factors such as litigation and industrial relations.
ACKNOWLEDGEMENT
Your Directors wish to place on record their appreciation and sincere gratitude to the various departments of the Central and State Government(s), Companyâs Bankers, clients, media and business constituents for their valuable assistance and support. The Directors also acknowledge the continued support received from investors and shareholders and the confidence reposed by them. The Directors also record their appreciation for the sincere and dedicated services rendered by all the employees of the Company.
For and on behalf of the Board of Directors
CyberTech Systems and Software Ltd.
Sd/-
Vish Tadimety
Chairman
DIN:00008106
Place : Trevose, PA
Date : August 13, 2018
Mar 31, 2016
BOARD''S REPORT
Dear Members,
The Directors have pleasure in presenting the 21st Annual Report on the business and operations of your Company together with the Audited Financial Statements and the Auditors'' Report for the financial year ended March 31, 2016.
FINANCIAL RESULTS
The financial performance of your Company for the year ended March 31, 2016 is summarized below:-
(Rs. in Millions)
Particulars |
Standalone |
Consolidated |
||
|
2015-16 |
2014-15 |
2015-16 |
2014-15 |
Gross Revenue |
480.29 |
440.00 |
771.82 |
669.03 |
Profit before Interest & Depreciation |
90.63 |
77.45 |
90.30 |
55.13 |
Interest |
8.36 |
5.76 |
8.36 |
5.76 |
Depreciation |
32.86 |
23.00 |
35.98 |
30.88 |
Profit before Exceptional Items and tax |
49.41 |
48.69 |
45.97 |
18.49 |
Exceptional items |
- |
(56.19) |
- |
(56.19) |
Profit before tax |
49.41 |
104.88 |
45.97 |
74.68 |
Provision for tax |
22.47 |
22.17 |
22.47 |
22.17 |
Income Tax adjustments from earlier years |
0.19 |
1.00 |
0.19 |
1.00 |
Profit after tax |
26.74 |
81.71 |
23.30 |
51.51 |
Accumulated profit brought forward from previous year |
304.67 |
263.57 |
163.94 |
158.31 |
Provision for Dividend (includes dividend tax of Rs. 4.50 million) |
32.34 |
32.25 |
32.34 |
32.25 |
Balance to be carried forward |
299.07 |
304.66 |
154.90 |
169.21 |
DIVIDEND AND RESERVES
Your Directors are pleased to recommend a dividend @10% (Rs.1/- per Equity Share of Rs.10/- each) for the financial year 2015-16, subject to the approval of shareholders at the ensuing Annual General Meeting. If approved, the total dividend payout for the year under review will be 10% amounting to Rs. 2.69 Crore.
No amount was transferred to Reserves for the year under review.
FINANCIAL PERFORMANCE OVERVIEW
Your Company started developing Property Tax application of GeoCivic® product which has been completed in the current year. Your Company is now pursuing ''Go To Market'' strategies for this product. Also your Company continues offshore development and support services in the core technology areas. The Company continued to receive income from surplus office premises that earn rental income. The Company''s performance for the year on standalone basis is as follows:
Total revenue for the year 2015-16 amounted to Rs. 480.29 million as compared to Rs. 440.00 million for the previous year. Total revenue is comprised of revenue from operations and other income, as follows:
a) Revenue from operations for the year ended March 31, 2016 amounted to Rs. 443.16 million as against Rs. 396.95 million for the previous year. Operating revenue includes both software support and development activities. Revenue is increased by 11.64%; and
b) Other Income amounted to Rs. 37.13 million as against Rs. 43.05 million.
CONSOLIDATED FINANCIAL STATEMENTS
The consolidated financial statements of the Company, including its wholly owned US subsidiary are prepared in accordance with Accounting Standard 21 (Consolidation of Accounts) as prescribed by the Institute of Chartered Accountants of India and in compliance with the terms of the listing agreement with the Stock Exchanges and SEBI (LODR) Regulations, 2015. Together, these comprise part of the Annual Report and Accounts. The summarized consolidated results are given alongside the financial results of your Company.
WHOLLY OWNED SUBSIDIARY IN USA
The Company owns 100% interest in CyberTech Systems and Software Inc., USA (CSSI), which was formed on June 12, 2003 in the State of Delaware in the United States of America, its results are provided in this report.
For the year under review, CyberTech Systems and Software, Inc. (USA) reported an operating loss of Rs.4.97 million before interest and depreciation on total revenue of Rs 669.09 million. The net loss of the subsidiary for F.Y. 2015-16 aggregated to Rs. 8.08 million.
The Company is taking steps to increase the revenue of CyberTech Systems and Software Inc., (USA) and the management is of the opinion that it will be able to wipe off the accumulated losses of CyberTech Systems and Software Inc., (USA) gradually.
The Statement in Form AOC-1 containing salient features of the financial statements of Company''s Subsidiary is attached as Annexure I to the financial statements of the Company pursuant to the provisions of Section 129(3) of the Companies Act, 2013.
BUSINESS OPERATIONS OVERVIEW AND OUTLOOK
During the year GeoCivic ® Property Tax Management development got completed and capitalized in the books. This decision is based on the initial market study and ongoing mission mode projects of Government of India like Smart cities and Amrut (formerly known as JNNURM) and exposure to the domain area. GeoCivic ® is currently under implementation with some of the Municipal Corporations and the awareness and visibility is being created for brand GeoCivic®. GeoCivic® specifications are part of tenders floating across many municipal corporations. The Municipal corporations have shown interest in implementation of this application to leverage their geographic intelligence and to optimize civic planning, development and revenues.
Considering the amount of interest shown by these Local Civic Bodies, your Company expects to grow its business in this area considerably in the next few years.
AWARDS & RECOGNITION
CyberTech has been awarded the contract for the creation of a comprehensive computerized geo-enabled Property database to support assessment and consolidation of all Municipal revenues for Nagpur Municipal Corporation (NMC). CyberTech continues to address the requirements by implementing GeoCivic Property Tax. Coming under the larger umbrella of CyberTech''s Smart City initiative, GeoCivic Property Tax is focused on efficient and equitable property tax assessment and collection for Municipal Corporations. Your Company also has secured couple of more GeoCivic® contracts which have two to three years of horizon.
SHARE CAPITAL
During the year under review, the Company has issued 75,000 Equity Shares under Employee Stock Option Scheme (ESOP) to the employees of the Company and its subsidiary Company. As a result of above allotment, the paid up Share capital of the Company increased from Rs. 26,79,63,430 comprising of 2,67,96,343 Equity Shares of Rs.10/- each as on March 31, 2015 to Rs. 26, 87,13,430 comprising of 2,68,71,343 Equity Shares of Rs.10/- each as on March 31, 2016.
DEPOSITS
During the year under review, no deposits were accepted by the Company under Section 73 of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES
During the financial year 2015-16, your Company has entered into transactions with related parties as defined under Section 2(76) of the Companies Act, 2013 read with the Companies (Specification of Definitions Details) Rules, 2014, which were in the ordinary course of business and on arm''s length basis and in accordance with the provisions of the Companies Act, 2013, Rules issued there under and Regulation 23 of the SEBI (LODR) Regulations, 2015. During the financial year 2015-16, the Company did not enter into materially significant transactions with Promoters, Key Managerial Personnel or other related parties. The details of the related party transactions as required under AS - 18 are set out in Note No. 26 to the standalone financial statements forming part of this Annual Report.
The Form AOC- 2 pursuant to Section 134 (3)(h) of the Companies Act, 2013 read with Rule 8(2) of the Companies (Accounts) Rules, 2014 in respect of disclosure of contracts / arrangements with related parties under Section 188 is set out as Annexure II to this Report.
The policy on Related Party Transactions as approved by the Board is uploaded on the Company''s website www.cybertech.com and can be accessed at http://www.cybertech.com/investors/corporate policies.aspx.
PARTICULARS OF LOANS GIVEN, INVESTMENTS MADE, GUARANTEE GIVEN AND SECURITIES PROVIDED UNDER SECTION 186 OF THE COMPANIES ACT, 2013
The Company has not granted any loan, guarantee and investment to any person, other than its wholly owned subsidiary. The details of which are given in the Notes to Financial Statement.
RISK MANAGEMENT
Your Company recognizes that risk is an integral part of business and is committed to manage the risk in a proactive and efficient manner. Your Company has Risk Management Policy in place. The Policy provides for a risk management framework to identify and assess risk such as operational, strategic, resources, security, industry, regulatory & compliance and other risk and put in place an adequate risk management infrastructure capable of addressing these risks. The Board periodically reviews the risk, if any, and ensures to take steps for its mitigation.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNING AND OUTGO
The information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134 (3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 are given in Annexure III forming part of this Report.
MANAGERIAL REMUNERATION
In accordance with Section 178 and other applicable provisions of the Companies Act, 2013 read with the Rule 6 of the Companies (Meeting of Boards and its Powers) Rules, 2014 issued there under and Regulation 19 of the SEBI (LODR) Regulations, 2015, the Board of Directors at their meeting held on 30th September, 2014 formulated the Nomination and Remuneration Policy of your Company on the recommendations of the Nomination and Remuneration Committee. The salient aspects covered in the Nomination and Remuneration Policy, covering the policy on appointment and remuneration of Directors and other matters have been outlined in the Corporate Governance Report which forms part of this Report. The information required under Section 197 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of Directors/employees of your Company is set out in Annexure IV to this Report and is also available on the website of your Company i.e., www.cybertech.com
DISCLOSURES UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION & REDRESSAL) ACT, 2013
Your Company is committed to creating and maintaining a secure work environment where its employees, agents, vendors and partners can work and pursue business together in an atmosphere free of harassment, exploitation and intimidation. To empower women and protect women against sexual harassment, a policy for prevention of sexual harassment has been rolled out and Internal Complaints Committee (ICC) as per legal guidelines has been set up. All employees (permanent, contractual, temporary, trainees) are covered under this policy. This policy allows employees to report sexual harassment at the workplace. The Internal Committee is empowered to look into all complaints of sexual harassment and facilitate free and fair enquiry process with clear timelines.
During the year 2015-16, no complaints were received regarding Sexual harassment.
MANAGEMENT''S DISCUSSION AND ANALYSIS REPORT
Management''s Discussion and Analysis Report for the financial year under review, as stipulated under Regulation 34 of SEBI (LODR) Regulations, 2015 is presented in a separate Section forming part of the Annual Report.
CORPORATE GOVERNANCE
In terms of Regulation 34 of the SEBI (LODR) Regulations, 2015, a report on Corporate Governance along with Statutory Auditors'' Certificate confirming its compliance is provided separately and forms integral part of this Report.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
Ms. Amogha Tadimety, Director of the Company retires by rotation at the ensuing Annual General Meeting, pursuant to the provisions of the Companies Act, 2013 read with the Companies (Appointment and Qualification of Directors) Rules, 2014 and the Articles of Association of the Company and being eligible offered herself for re-appointment. The brief resume of Ms. Amogha Tadimety and other information under Regulation 36 of the SEBI (LODR) Regulations, 2015 with respect to the Director seeking re-appointment has been provided in the Notice convening 21st AGM. Your Directors recommend her re-appointment.
The Company has received declarations from all the Independent Directors confirming that they meet the criteria of independence as prescribed under Section 149 (6) of the Companies Act, 2013 and Regulation 16(1)(b) of the SEBI (LODR) Regulations, 2015.
Mr. Prakash Sitaram Kenjale (DIN: 00202324), an Independent Director of the Company, tendered his resignation as the Director of the Company with effect from November 16, 2015 due to personal reasons and his resignation was accepted by the Board. The Board of Directors records their apprecitation for his contributions during his tenure to the business of the Company.
Mr. Sateesh Wadagbalkar, Key Managerial Personnel, retired from the post of Company Secretary cum Compliance Officer of the Company w.e.f. June 30, 2016 and Ms. Sarita Leelaramani was appointed as the Company Secretary cum Compliance Officer of the Company w.e.f. July 01, 2016.
Presently, Mr. Ramasubramanian Sankaran, Whole-time Director & Chief Financial Officer and Ms. Sarita Leelaramani, Company Secretary are the Key Managerial Personnel of your Company in accordance with the provisions of Sections 2(51) and 203 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.
NUMBER OF MEETINGS OF THE BOARD
The details of the number of Board meetings of your Company are set out in the Corporate Governance Report which form part of this Report. In terms of requirements of Schedule IV of the Companies Act, 2013 a separate meeting of Independent Directors was also held on 31st March, 2016 to review the performance of Non-independent Directors (including the Chairman), the entire Board and quality, quantity and timelines of the flow of information between the Management and the Board.
PERFORMANCE EVALUATION OF DIRECTORS
In terms of the provisions of the Companies Act, 2013 read with Rules issued there under and the SEBI (LODR) Regulations, 2015, the Board of Directors has carried out the annual performance evaluation of the entire Board, Committees and all the Directors based on the criteria laid down by the Nomination and Remuneration Committee. The criteria for evaluation of the Board performance have been mentioned in the Corporate Governance Report.
AUDIT COMMITTEE
The Audit Committee of the Board of Directors of the Company is duly constituted in accordance with the provisions of Sections 177 (8) of the Companies Act, 2013, read with Rule 6 and 7 of the Companies (Meetings of the Board and its Powers) Rules, 2013 and Regulation 18 of SEBI (LODR) Regulations, 2015 which consists of the following Members;
Sr.No. |
Name |
Designation & Category |
1 |
Mr. Sudhir Joshi |
Chairman, Independent Director |
2 |
Dr. N.L. Sarda |
Member, Independent Director |
3 |
Dr. Shreepad Karmalkar |
Member, Independent Director |
4 |
Mr. Anant V. Rajwade |
Member, Independent Director |
All the recommendations of the Audit Committee during the year were accepted by the Board of Directors of the Company. For further details, please refer the Corporate Governance Report forming part of the Annual Report.
VIGIL MECHANISM
Your Company is committed to highest standards of ethical, moral and legal business conduct. Accordingly, the Board of Directors has formulated a Whistle Blower Policy in compliance with the provisions of Section 177 (9) and (10) of the Companies Act, 2013 and Regulation 22 of the SEBI (LODR) Regulations, 2015.
The policy provides for a framework and process whereby concerns can be raised by its Employees/ Directors or any other person against any kind of discrimination, harassment, victimization or any other unfair practice being adopted against them. More details on the vigil mechanism and the Whistle Blower Policy of your Company have been outlined in the Corporate Governance Report which forms part of this report. The Whistle Blower Policy of the Company is placed on Company''s website www.cybertech.com
COMPANY''S POLICY ON APPOINTMENT AND REMUNERATION OF DIRECTORS
The Company has been following well laid down policy on appointment and remuneration of Directors, Key Managerial Personnel (KMP) and Senior Management Personnel.
The appointment of Directors is made by the Board pursuant to the recommendation of Nomination and Remuneration Committee (NRC). The remuneration of Executive Directors comprises of Basic Salary, Perquisites & Allowances & follows applicable requirements of the Companies Act, 2013 and is recommended by NRC. Approval of Board, shareholders and the Central Government, if required, for payment of remuneration to Executive Directors is sought, from time to time.
The remuneration of Non-Executive Directors comprises of sitting fees and commission in accordance with the provisions of Companies Act, 2013.
The Remuneration Policy on appointment and remuneration of Directors, KMP and Senior Management is placed on the website of the Company www.cybertech.com.
DIRECTORS'' RESPONSIBILITY STATEMENT AS REQUIRED UNDER SECTION 134 (3) (C) AND SECTION 134 (5) OF THE COMPANIES ACT, 2013
In terms of Section 134(3) (c) of the Companies Act, 2013, to the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors state and confirm that:
i) in the preparation of the annual financial statements for the year ended 31st March, 2016, the applicable accounting standards read with the requirements set out under Schedule III to the Act, have been followed along with proper explanation with respect to material departures, if any;
ii) such accounting policies as mentioned in the notes to the Financial Statements for the year ended 31st March, 2016 have been selected and applied consistently and judgments and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2016 and of the profit of the Company for the year ended on that date;
iii) proper and sufficient care has been taken for 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) the annual financial statements for the year ended 31st March, 2016 have been prepared on a going concern basis;
v) proper internal financial controls are followed by the Company and that such financial controls are adequate and are operating effectively; and
vi) proper systems to ensure compliance with the provisions of all applicable laws are in place and such systems are adequate and operating effectively.
STATUTORY AUDITORS
Pursuant to the provisions of Section 139 of Companies Act, 2013 and the Companies (Audit and Auditors) Rules, 2014, M/s. Lodha & Co., Chartered Accountants, Mumbai, Statutory Auditors (ICAI Firm Registration No. 301051E) hold office till the conclusion of the Annual General Meeting for the Financial Year 2016-17, and the Company has received written consent and a certificate stating that they satisfy the criteria provided under Section 141 of the Companies Act, 2013 read with the Companies (Audit and Auditors) Rules, 2014 and that the appointment, if ratified, shall be in accordance with the applicable provisions of the Companies Act, 2013 and rules issued there under. As required under Clause 33 (1) (d) of the SEBI (LODR), Regulations, 2015, M/s. Lodha & Co., Chartered Accountants, Mumbai, have also confirmed that they hold a valid certificate issued by the Peer Review Board of ICAI.
The Auditors'' Reports on Standalone (SFS) and Consolidated Financial Statements (CFS) for the financial year 2015-16 do not contain any qualification, reservation or adverse remark.
INTERNAL AUDITORS
M/s. Desai and Associates, Chartered Accountants, are the Internal Auditors of the Company and their reports are reviewed by the Audit Committee on periodical basis.
SECRETARIAL AUDITORS
Pursuant to the provisions of Section 204 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, your Company has appointed Mr. S. Anantha Rama Subramanian (CP1925) of M/s. S. Anantha & Co., Practicing Company Secretaries, Mumbai to conduct the Secretarial Audit of your Company. The Secretarial Audit Report is annexed herewith as Annexure V to this Report.
The Secretarial Audit Report does not contain any qualification/ reservation/ disclaimer or adverse remark.
FAMILIARISATION PROGRAMME FOR INDEPENDENT DIRECTORS
Pursuant to the requirement of Regulation 25 (7) of the SEBI (LODR) Regulations, 2015, the Company needs to formally arrange Induction or Familiarization Programme for Independent Directors to familiarize them with their role, rights and responsibility as Directors, the working of the Company, nature of the industry in which the Company operates, business model etc. The details are mentioned in the Report on Corporate Governance which is a part of this annual report.
EXTRACT OF ANNUAL RETURN
The details forming part of the extract of the Annual Return in Form MGT- 9 in accordance with Section 92(3) of the Companies Act, 2013 read with the Companies (Management and Administration) Rules, 2014, are set out herewith as Annexure VI to this Report.
CORPORATE SOCIAL RESPONSIBILITY
The Company continues to believe in operating and growing its business in a socially responsible way. This belief forms the core of the CSR policy of the Company that drives it to focus on holistic development of its host community and immediate social and environmental surroundings qualitatively. Hence in accordance with the requirements of Section 135 of the Companies Act, 2013, your Company has constituted a Corporate Social Responsibility Committee ("CSR Committee"). The composition and terms of reference of the CSR Committee are provided in Corporate Governance Report. The Company has framed Corporate Social Responsibility policy which is available at www. cybertech.com. Annual Report on CSR activities as required under the Companies (Corporate Social Responsibility Policy) Rules, 2014 has been appended as Annexure VII to this report. During the year under review, the Company has spent Rs. 18 Lacs on Corporate Social Responsibility.
INTERNAL FINANCIAL CONTROLS WITH RESPECT TO THE FINANCIAL STATEMENTS
The Company maintains adequate internal control system and procedures commensurate with its size and nature of operations. The internal control systems are designed to provide a reasonable assurance over reliability in financial reporting, ensure appropriate authorization of transactions, safeguarding the assets of the Company and prevent misuse/ losses and legal compliances.
The internal control system includes a well defined delegation of authority and a comprehensive Management Information System coupled with quarterly reviews of operational and financial performance, a well structured budgeting process with regular monitoring of expenses and Internal audit.
The Internal Audit reports are periodically reviewed by the management and the Audit Committee and necessary improvements are undertaken, if required.
PARTICULARS OF EMPLOYEES
The table containing the names and other particulars of employees in accordance with the provisions of Section 197 (12) of the Companies Act, 2013, read with the Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is appended as Annexure VIII to the Board''s Report.
None of the Employee of the Company is in receipt of remuneration exceeding the limits prescribed in Companies (Appointment and Remuneration of Managerial Personnel) Amendment Rules, 2016.
EMPLOYEES STOCK OPTION PLAN (ESOP)
The position of ESOPs granted and exercised during the year is as under:
Number of options granted: |
8,40,000 |
Pricing formula: |
As provided in policy |
Options vested: |
A total of 150,000 options vested during the year. |
Options exercised and number of shares arising out of such exercise: |
A total of 75,000 options exercised during the year. |
Options lapsed: |
During the year 50,000 options lapsed out of options granted. |
Variations in terms of options: |
There was no variation in the terms of options. |
Money realized on exercise of options: |
Nil |
Total Number of options in force: |
1,740,000 options were in force as on 31.3.2016 |
ESOPs granted to senior managerial personnel: |
The Company did not grant more than 1% of the issued capital of the Company to any one person as of the date of grant |
Method of Accounting
The Company has elected to use the intrinsic value method to account for the compensation cost of stock options to employees of the Company, Intrinsic value is the amount by which the quoted market price of the underlying share as on the date of grant exceeds the exercise price of the option
Summary of the options outstanding under the Employees Stock Option Plan (ESOP):
Particulars |
As at March 31, 2016 |
As at March 31, 2015 |
||
|
Options |
Weighted Average Exercise Price (Rs.) |
Options |
Weighted Average Exercise Price (Rs.) |
Options outstanding at beginning of the year |
1,025,000 |
20.73 |
1,200,000 |
15.75 |
Granted during the year |
840,000 |
38.05 |
2,00,00 |
44.30 |
Exercised during the year |
75,000 |
13.46 |
3,25,000 |
17.29 |
Forfeited/lapsed during the year |
50,000 |
17.95 |
50,000 |
17.95 |
Options outstanding at end of year |
1,740,000 |
28.32 |
1,025,000 |
20.73 |
Vested options pending exercise |
575,000 |
18.63 |
5,50,000 |
16.86 |
The following summarizes information about stock options outstanding: As at March 31, 2016
Range of Exercise price |
Number of Shares arising out |
Weighted average remaining |
Weighted average Exercise |
|
of options |
life (Years) |
Price (Rs. |
Rs. 10 to Rs. 15 |
300,000 |
6 |
11.34 |
Rs. 15 to Rs. 45 |
1,440,000 |
6 |
31.85 |
As at March 31, 2015
Range of Exercise price |
Number of Shares arising out |
Weighted average remaining |
Weighted average Exercise |
|
of options |
life (Years) |
Price (Rs. |
Rs. 10 to Rs. 15 |
350,000 |
6 |
11.34 |
Rs. 15 to Rs. 45 |
675,500 |
5 |
25.60 |
Fair Value methodology for the option:
The fair value of options used to compute net income and earnings per Equity Share have been estimated on the dates of each grant within the range of Rs. 10 to Rs. 45 using the Black-Scholes pricing model. The Company estimated the volatility based on the historical share prices. The various assumptions considered in the pricing model for the options granted under ESOP are:
Particulars |
As at March 31, 2016 |
As at March 31, 2015 |
Dividend yield |
0-10% |
0-10% |
Expected volatility |
10%-20% |
10%-20% |
Risk-free interest rate |
6.46% - 6.65% |
6.46% - 6.65% |
Expected life of option |
0 - 7 yrs |
0 - 7 yrs |
Impact of Fair value method on Net Profit and EPS
Had the compensation cost for the Company''s Stock Option Plan outstanding been determined based on the fair value approach, the Company''s net profit income and earnings per share would have been, as indicated below:
Particulars |
As at March 31, 2016 Rs. |
As at March 31, 2015 Rs. |
Profit attributable to Equity Shareholders |
26,743,609 |
81,711,516 |
Less: Stock-based compensation expense determined under fair value based method |
1,942,380 |
4,428,463 |
Net Profit |
24,801,229 |
77,283,053 |
Basic and diluted earnings per share (as reported) |
0.93 |
2.90 |
Basic and diluted earnings per share (under fair value method) |
0.90 |
2.83 |
GENERAL
Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review or said items are not applicable to the Company:
1. Cost Audit
2. Issue of Equity Shares with differential rights as to dividend, voting or otherwise.
3. There are no material changes and commitments affecting the financial position of the Company which have occurred between the end of the financial year 2015-16 and the date of this report.
4. No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Company''s operations in future.
ACKNOWLEDGEMENT
Your Directors wish to place on record their appreciation and sincere gratitude to the various departments of the Central and State Government, Company''s Bankers, clients, media and business constituents for their valuable assistance and support. The Directors also acknowledge the continued support received from investors and shareholders and the confidence reposed by them. The Directors also record their appreciation for the sincere and dedicated services rendered by all the employees of the Company.
For and on behalf of the Board of Directors
Sd/-
Viswanath Tadimety
Chairman
DIN: 00008106
Place : Thane
Date : August 02, 2016
Mar 31, 2015
Dear Members,
The Directors are pleased to present the Twentieth Annual Report
together with the Audited Financial Statements of the Company for the
year ended March 31, 2015. This report includes both standalone results
of the Company (CyberTech Systems and Software Ltd.) as well as the
consolidated results of the Company and its subsidiary CyberTech
Systems and Software Inc., USA.
FINANCIAL RESULTS
(Rs, in millions)
Standalone Consolidated
2014-15 2013-14 2014-15 2013-14
Gross Revenue 440.00 459.51 669.03 730.83
Profit before
Interest & Depreciation 77.45 125.86 55.13 125.48
Interest 5.76 4.76 5.76 4.76
Depreciation 23.00 14.48 30.88 24.64
Profit before
Exceptional Items and tax 48.69 106.62 18.49 96.08
Exceptional items (56.19) Nil (56.19) Nil
Profit before tax 104.88 106.62 74.68 96.08
Provision for tax 22.17 19.74 22.17 19.74
Income Tax adjustments
from earlier years 1.00 Nil 1.00 Nil
Profit after tax 81.71 86.88 51.51 76.34
Accumulated profit
brought forward from
previous year 263.57 207.66 158.31 112.94
Provision for Dividend
(includes dividend tax
of Rs,4.50 million) 32.25 30.97 32.25 30.97
Balance to be
carried forward 313.03 263.57 178.07 158.31
DIVIDEND
Your Directors have the pleasure of recommending Dividend @10% (Re.1/-)
per Equity Share of Rs.10/- each for the Financial Year ended March 31,
2015, amounting to Rs.32,251,448/- (inclusive of tax of Rs.5,455,105),
subject to approval of members at the ensuing Annual General Meeting.
The dividend will be paid to members whose names appear in Register of
Members on September 18, 2015 and in respect of shares held in
dematerialized form, it will be paid to members whose names that may be
furnished by the National Securities Depository Limited (NSDL) and
Central Depository Services (India) Limited (CDSL) as the beneficial
owners as on that date.
No amount was transferred to Reserves for the year under review.
RESULTS OF OPERATIONS AND THE STATE OF COMPANY,S AFFAIRS
The Company,s primary focus continues to be delivering offshore
development and support services in the Company,s core technology
areas. We are happy to inform that during the year the Company has made
an efort to develop a product suite that is useful for all
Municipalities, requirements. There was a slight reduction in the
Offshore and Domestic revenue compared to the previous year. The
Company continued to receive income from surplus office premises that
earned rental income.
The Company,s performance for the year on standalone basis is as
follows:
- Total revenue during the year 2014-15 amounted to Rs.440.00 million as
compared to Rs.459.51 million during the previous year. Total revenue is
comprised of revenue from operations and other income, as follows:
Revenue from operations for the year ended March 31, 2015 amounted to
Rs.396.95 million as against Rs.406.57 million for the previous year.
Operating revenue includes both software support and development
activities. Revenue is reduced by 2.37% due to marginal reduction in
domestic business as well as Offshore business.
- Other Income amounted to Rs.43.05 million as against Rs.52.94 million in
the previous year.
CyberTech continues to strive for growth. The Company has grown its GIS
Business substantially over the past few years. Many of the Application
Maintenance projects are transformed into long term annuity projects.
To allow the Company to continue this evolution, the top management of
the Company has realigned the organization, established autonomy in a
few new business units and streamlined the business model.
The consolidated group continues to focus on delivering services to its
identified market segments in its core technology areas. It continues
to align its sales and delivery organizations to an offshore centric
model as well as sustainable entry in to Domestic GIS market.
CONSOLIDATED FINANCIAL STATEMENTS
The consolidated financial statements of the Company, including its
wholly owned US subsidiary are prepared in accordance with Accounting
Standard 21 (Consolidation of Accounts) as prescribed by the Institute
of Chartered Accountants of India and in compliance with the terms of
the listing agreement with the Stock Exchanges. Together, these
comprise part of the Annual Report and Accounts. The summarized
consolidated results are given alongside the financial results of your
Company.
WHOLLY OWNED SUBSIDIARY IN USA
The Company owns 100% interest in CyberTech Systems and Software Inc.,
USA (CSSI) which was formed on June 12, 2003 in the State of Delaware
in the United States of America, whose results are consolidated herein.
During the year, CyberTech Systems and Software, Inc. (USA) reported an
operating loss of Rs.22.32 million before interest and depreciation on
total revenue of Rs.565.42million The net loss of the subsidiary for F.Y.
2014-15 aggregated toRs.30.19 million.
The Company is taking steps to increase the revenue of CyberTech
Systems and Software, Inc. (USA) and the Board is of the opinion that
it will be able to wipe of the accumulated losses of CyberTech Systems
and Software, Inc. (USA) gradually.
The Statement in form AOC-1 containing salient features of the
financial statements of Company,s Subsidiary is attached to the Board,s
Report as Annexure 1.
BUSINESS OPERATIONS OVERVIEW AND OUTLOOK
During the year GeoCivic® Property Tax Management solution was
considered for development, stabilization and product maturity. This
decision is based on the initial market study and ongoing mission mode
projects of Government of India like Smart cities and Amrut (formerly
known as JNNURM) and exposure to the domain area. GeoCivic® is under
implementation with some of the Municipal Corporations and GeoCivic®
specifications are part of many tenders footing across many municipal
corporations . The development and evolution of GeoCivic® is almost in
last stages and based on the initial demonstrations, many Municipal
corporations have shown interest in implementation of this application
to leverage their geographic intelligence and to optimize civic
planning and development. Considering the amount of interest shown by
these Local Civic Bodies, your Company expects to grow its business in
this area considerably in the next few years.
On March 5, 2014, CyberTech,s India Business Unit, announced the launch
of 'CyberTech Risk Center, that ofers advanced Risk Visibility
Solutions dedicated to the Indian Public and Corporate sector. The risk
center has been formed under an MOU between CyberTech and NC4 - the
world leader in risk management and situational awareness solutions.
CyberTech Risk Center provides Indian organizations with geo-coded
information on incidents that are likely to impact them, in near-real
time, thus helping Indian organizations ensure business continuity,
while safeguarding their employees and physical assets.
Risk Centre business has already seized first customer in India which
is the IT Giant namely Infosys. There are many more customers in the
pipelines. Also India Risk centre feed are used by several customers in
U.S.A. which has started generating recurring revenue for the Company.
AWARDS AND RECOGNITIONS
Awards
CyberTech received the "Skoch Order of Merit" in the 37th Skoch Summit
on "Minimum Government, Maximum Governance" held at the India Habitat
Centre, New Delhi on 19-20th September 2014. CyberTech has received
this prestigious recognition as "India,s best governance projects 2014"
for the excellent project conceptualized and delivered for the city of
Bangalore. The project has been awarded this appreciation in two
categories: 'Smart Governance, & 'Advanced Technology,.
The Skoch Digital Inclusion awards is a highly renowned and prestigious
platform instituting India,s highest independent civilian honors in the
field of Governance, Finance, Technology, Economics, and the Social
Sector. CyberTech,s selection has come after a farce competition among
more than 1000 entries from across the country, including leading
national and international IT and technology companies. CyberTech,s
selection for this 'Order of Merit, speaks volumes for the customer
acceptance and quality of its GeoCivic® solution. It is a refection of
the success that CyberTech has had at building market-driven solutions
on leading ESRI technologies.
This achievement will not only help in creating a stronger GeoCivic®
brand, but will also create better opportunities for CyberTech to reach
out to its target market and deliver better value to its customers.
Recognition CMMI Recognition
CyberTech has been assessed for CMMI for Software Development and has
been successfully appraised for Level 3.
CMMI is an Internationally recognized and accepted model by IT industry
for the software development. It assures process oriented approach for
delivering Quality Product and timeliness in delivery. Through CMMI,
CyberTech now has detailed processes to guide the product lifecycle
from its conception to final delivery. CMMI Institute, USA, has now
officially published on its website about CyberTech achieving this
prestigious status of CMMI Level 3.
EXPANSION ACTIVITIES
During the year under review, the Company received Occupancy
Certificate from the Thane Municipal Corporation for the construction
of the 4th four, which has expanded an additional capacity of 35,000
sq.ft. and can accommodate around 250 IT professionals.
SHARE CAPITAL
The paid up share capital of the company as on March 31, 2015 was
Rs,267,963,430. During the year under review, the Company has issued
325,000 equity shares under Employee Stock Option Scheme.
FIXED DEPOSITS
The Company has not accepted any public deposit and as such, no amount
on account of principal or interest on public deposits was outstanding
as on the date of Balance Sheet.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES
The particulars of contracts or arrangements with related parties
referred to in Section 188(1) of the Companies Act, 2013 in the
prescribed form AOC-2, is appended as Annexure 2 to the Board,s Report.
Further, in terms of the requirement under AS-18, the detail of the
Transactions with the Related Parties are provided under Note No. 26 of
the Audited Financial Statements for the Financial Year ended March 31,
2015. The Directors further report that there are no materially
significant related party transactions made by the Company with the
Promoters, Directors, Key Managerial Personnel or other designated
persons, which may have a potential confect with the interest of the
Company at large. All related party transactions that were entered into
during the financial year were made on an arm,s length basis and were
in the ordinary course of business. The policy on Related Party
Transactions as approved by the Board is uploaded on the Company,s
website: www.cybertech.com.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS
The Company has not granted any loan, guarantee, investment to any
person, other than its wholly owned subsidiary. The detail or given in
the Notes to Financial Statement.
RISK MANAGEMENT POLICY
Pursuant to the requirements of Clause 49 of the Listing Agreement, the
Company has constituted a Risk Management Committee.
The Company has in place a mechanism to identify, assess, monitor and
mitigate various risks to key business objectives.Major risks
identified by the businesses and functions are systematically addressed
through mitigating actions on a continuing basis. These are discussed
at the meetings of the Audit Committee and the Board of Directors of
the Company.
The Company,s internal control systems with reference to the Financial
Statements are adequate and commensurate with the nature of its
business and the size and complexity of its operations. These are
routinely tested by Statutory as well as Internal Auditors. Significant
audit observations, if any, and follow up actions thereon, are reported
to the Audit Committee.
The policy on Risk Management as approved by the Board is uploaded on
the Company,s website www.cybertech.com.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNING
AND OUTGO
The information on conservation of energy, technology absorption and
foreign exchange earnings and outgo stipulated under Section 134 (3)(m)
of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts)
Rules, 2014 are given in Annexure-3 and are forming part of this
Report.
MANAGERIAL REMUNERATION & PARTICULARS OF EMPLOYEES
The information required under section 197 of the Companies Act, 2013
read with rule 5 (1) of the Companies (Appointment and Remuneration of
Managerial Personnel) Rules, 2014 are given below:
a. The ratio of the remuneration of each director to the median
remuneration of the employees of the Company for the financial year:
Non-Executive Directors Ratio to median remuneration
Mr. Viswanath Tadimety 0.47
Mr. Steven Jeske 0.21
Ms. Amogha Tadimety 0.05
Mr. M. P. Bharucha 0.85
Mr. Sudhir Joshi 1.17
Dr. N.L. Sarda 1.17
Mr. Prakash Kenjale 0.52
Dr. Shreepad Karmalkar 0.36
Executive Director
Mr. Ramasubramanian Sankaran 8.10
b. The percentage increase in remuneration of each director, chief
executive officer, chief financial officer, company secretary in the
financial year:
Directors, Chief Financial Officer and Company Secretary % increase in
remuneration in the financial year
Directors Chief Financial Officer % Increse in remuneration in
and company secretary the financial year
Mr. Viswanath Tadimety -Chairman 200.00
Mr. Steven Jeske- Director 33.33
Ms. Amogha Tadimety-Director -
Mr. M. P. Bharucha-Director 725.00
Mr. Sudhir Joshi-Director 28.57
Dr. N.L. Sarda-Director 50.00
Mr. Prakash Kenjale-Director 42.86
Dr. Shreepad Karmalkar - Director -12.50
Mr. Ramasubramanian Sankaran -
Executive Director and CFO 13.15
Mr. Sateesh Wadagbalkar-Company Secretary 10.46
C. The percentage increase in the median remuneration of employees in
financial year: 22%
d. The number of permanent employees on the rolls of company: 428
e. The explanation on the relationship between average increase in
remuneration and Company performance
On an average, employees received an annual increase of 15% in India.
The individual increments varied from 8% to 15%, based on individual
performance. The increase in remuneration is in line with the market
trends . In order to ensure that remuneration effects Company
performance, the performance pay is also linked to organization
performance, apart from an individual,s performance.
f. Comparison of the remuneration of the key managerial personnel
against the
( Rs, Million)
performance of the Company
Aggregate remuneration of key
managerial personnel (KMP) in FY15 5.92
Revenue 396.95
Remuneration of KMPs (as % of revenue) 1%
Profit before Tax (PBT) 104.88
Remuneration of KMP (as % of PBT) 5.64%
g. Variations in the market capitalization of the Company, price
earnings ratio as at Rs,Rs, the closing date of the current financial
year and previous financial year
Particulars 31-Mar-15 31-Mar-14 % change
Market capitalization 747,617,970 627,370,829 19.17
Price Earnings Ratio 9.09 7.23 25.77
h. Percentage increase over decrease in market quotations of shares of
the company in comparison to the rate at which the Company came out
with the last public offer. Not applicable.
i. Average percentile increase already made in the salaries of
employees other than the managerial personnel in the last financial
year and its comparison with the percentile increase in the managerial
remuneration and justification thereof and point out if there are any
exceptional circumstances for increase in the managerial remuneration:
The average annual increase was around 15%. However, during the course
of the year, the total increase is approximately 15%, after accounting
for promotions and other event based compensation revisions. Increase
in the managerial remuneration for the year was 11%.
j. Comparison of each remuneration of the key managerial personnel
against the performance of the Company:
Ramasubramanian Shankaran Sateesh Wadagbalkar
Executive Director & CFO GM & Company Secretary
( Rs, Million) ( Rs, Million)
Remuneration
in FY15 3 1
Revenue (Rs,) 397 397
Remuneration
(as % of revenue) 0.79% 0.24%
Profit before
Tax (PBT) 105 105
Remuneration
(as % of PBT) 2.98% 0.90%
k. The key parameters for any variable component of remuneration
availed by the directors:
The members have, at the AGM of the Company on September 30, 2014
approved payment of commission to the non-executive directors within
the ceiling of 1% of the net profits of the Company as computed under
the applicable provisions of the Act. The said commission is decided
each year by the board of directors and distributed amongst the
non-executive directors based on their attendance and contribution at
the board and certain committee meetings, as well as the time spent on
operational matters other than at meetings.
l. The ratio of the remuneration of the highest paid director to that
of the employees who are not directors but receive remuneration in
excess of the highest paid director during the year.
Name of the Employee Ratio
Mr. Anirban Biswas 1.05
Mr. Vishal Bargat 1.13
Mr. Armadas Bhore 1.48
m. Affirmation that the remuneration is as per the remuneration policy
of the Company.
The Company farms remuneration is as per the remuneration policy of the
Company.
n. There were no employees in receipt of remuneration during the year
requiring disclosure under section 197(2) read with Rule 5 ( 2 ) of the
companies Appointment and remuneration of Managerial Personnel) Rules,
2014.
DISCLOSURES UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION,
PROHIBITION & REDRESSAL) ACT, 2013
Your Company is committed to creating and maintaining a secure work
environment where its employees, agents, vendors and partners can work
and pursue business together in an atmosphere free of harassment,
exploitation and intimidation. To empower women and protect women
against sexual harassment, a policy for prevention of sexual harassment
has been rolled out and Internal Complaints Committee as per legal
guidelines has been set up. This policy allows employees to report
sexual harassment at the workplace. The Internal Committee is empowered
to look into all complaints of sexual harassment and facilitate free
and fair enquiry process with clear timelines.
During the year 2014-15, no complaints were received regarding Sexual
harassment.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
The Management Discussion and Analysis Report, appearing in this Annual
Report, review the operations of the Company in more detail and forms
part of this Report.
CORPORATE GOVERNANCE
As per the Listing Agreement with the Stock Exchange(s), the Company
has complied with the requirements of the Corporate Governance
provisions of the Listing Agreement. A report on Corporate Governance
is attached to this report.
DIRECTORS
In compliance with the provisions of Sections 149, 152, Schedule IV and
other applicable provisions, if any, of the Companies Act, 2013 read
with Companies (Appointment and Qualification of Directors) Rules,
2014, Mr. Prakash Kenjale, Mr. Sudhir Joshi, Dr. Shreepad Karmalkar Dr.
N.L. Sarda were appointed as Independent Directors on the Board of
Directors of your Company at the 19th AGM held on September 30 , 2014
to hold office up to five (5) consecutive years up to September 29,
2019.
Ms. Amogha Tadimety was appointed as a Woman Director retiring by
rotation at the 19th Annual General Meeting held on September 30, 2014
to comply with provision of Section 149 of the Companies Act, 2013 read
with Rule 3 of Companies (Appointment and Qualification of directors)
Rules, 2014.
The Board at its meeting held on March 30, 2015 appointed Mr. A.V.
Rajwade as an Additional Director of the Company, who holds office up
to the date of the ensuing Annual General Meeting. The Nomination and
Remuneration Committee has recommended his appointment as an
Independent Director of the Company for period of five years.
Mr. M.P. Bharucha, the solicitor of the Company, was appointed as a
Director liable to retire by rotation. As the total payment made by the
Company to his form M/s. Bharucha and Partners is less than 10% of the
gross turnover of his form during last three years, the Board of
Directors appointed him as an Independent Director for a period of 5
years ending on September 30, 2019.
Mr. Steven Jeske, Director of the Company retires by rotation at the
ensuing Annual General Meeting and being eligible offers himself for
reappointment.
On the recommendation of the Nomination & Remuneration Committee, Mr.
Ramasubramanian Sankaran was reappointed as the Executive Director with
effect from 4th August, 2015 for a period of three years subject to the
approval of shareholders in ensuing Annual General Meeting.
The brief resume of the Directors seeking appointment or re-appointment
and other related information has been detailed in the Notice convening
20th Annual General Meeting.
Necessary resolution seeking the approval of the members for
appointment / re-appointment of above Directors have been proposed in
the Notice convening the ensuing Annual General Meeting.
Your Directors recommend their appointments .
NUMBER OF MEETINGS OF THE BOARD AND AUDIT COMMITTEE
The details of the number of Board and Audit Committee meetings of your
Company are set out in the Corporate Governance Report which forms part
of this Report.
DECLARATION BY INDEPENDENT DIRECTORS
The Company has received necessary declaration from each independent
director under section 149(7) of the Companies Act, 2013 that he meets
the criteria of independence laid down in section 149(6) of the
Companies Act, 2013 and clause 49 of the Listing Agreement.
BOARD EVALUATION
Clause 49 of the Listing Agreement mandates that the Board shall
monitor and review the Board evaluation framework. 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 of the Companies Act, 2013 states that the
performance evaluation of independent directors shall be done by the
entire Board of Directors, excluding the director being evaluated.
The evaluation of all the directors and the Board as a whole was
conducted based on the criteria and framework adopted by the Board.
The Board approved the evaluation results as collated by the Nomination
and Remuneration Committee.
FAMILIARISATION PROGRAMME FOR INDEPENDENT DIRECTORS
Every new independent director of the board attends an orientation
program. To familiarize the new inductees with the strategy, operations
and functions of our Company, the Chairman makes presentation to the
inductees about the company,s strategy, operations, product and service
offerings, markets, software delivery, organization structure, finance,
human resources , technology, quality, facilities.
Further, at the time of appointment of an Independent Director, the
Company issues a formal letter of appointment outlying his role,
functions, duties and responsibilities as an independent director. The
format of the letter of appointment is available on the website of the
Company, www.cybertech.com.
COMMITTEES OF THE BOARD
Currently, the Board has five committees: the Audit Committee,
Nomination and Remuneration Committee, Corporate Social Responsibility
Committee, Stakeholders Relationship Committee and Executive Committee.
A detailed note on the Board and its committees is provided under the
Corporate Governance Report section in this Annual Report. The
composition of the committees and compliances, as per the applicable
provisions of the Act and the Rules, are as follows:-
Name of the Committee Composition of the Committee Highlights of
duties, responsibilities and the activities
Audit Committee Mr. Sudhir Joshi, Dr. N.L. Sarda, All recommendations
made by the Audit
Dr. Shreepad Karmalkar and Committee were accepted by Board.
Mr. Anant V. Rajwade
The company has adopted Vigil Mechanism Policy for directors and
employees to report concerns about unethical behavior, actual or
suspected fraud, or violation of the company,s Code of conduct and
ethics. The Vigil Mechanism Policy has also been placed on the website
of the Company www.cybertech.com.
In accordance with the requirements of the Listing Agreement, the
company has formulated policies on related party transactions . This
policy is available on the website of the company.
Nomination and Remuneration Committee Mr. Sudhir Joshi, Dr. N.L. Sarda,
The committee oversees and administers
Dr. Shreepad Karmalkar and executive compensation, operating under
Mr. Viswanath Tadimety a written charter adopted by the Board of
Directors.
The Committee reviews , the compensation of Executive Director, and
Senior Executives to align both short term and long term compensation
with business objectives and to link compensation with the achievement
of measurable goals.
The Nomination and Remuneration Committee has framed the nomination and
remuneration policy. A copy of the policy is available on the Website
of the Company www.cybertech.com.
Corporate Social Responsibility Committee Mr. Sudhir Joshi , Dr. N.L.
Sarda, The Board has laid out the company,s policy
Mr. Viswanath Tadimety and on Corporate Social Responsibility.
Mr. Ramasubramanian Sankaran
During the year the company has not spent any amount on corporate
Social Responsibility due to reduction in profit on Consolidation basis
and to conserve cash.
The CSR Policy is available on the website of the Company
www.cybertech.com.
Stakeholders, Relationship Committee Mr. Anant V. Rajwade, The
Committee reviews and ensures
Mr. Sudhir Joshi and redressal of investors grievances.
Mr. Ramasubramanian Sankaran
The Committee noted that all the grievances of the investors have been
resolved during the year.
Executive Committee Mr. Viswanath Tadimety Budgets,Financials and other
administrative
Mr. Anant V. Rajwade matters.
Mr. Sudhir Joshi Mr. Ramasubramanian Sankaran
DIRECTORS, RESPONSIBILITY STATEMENT AS REQUIRED UNDER SECTION 134 (3)
(C) AND SECTION 134 (5) OF THE COMPANIES ACT, 2013
The financial statements are prepared in accordance with the Generally
Accepted Accounting Principles (GAAP) under the historical cost
convention on accrual basis except for certain financial instruments
which are measured at fair values. GAAP comprises mandatory accounting
standards as prescribed under Section 133 of the Companies Act, 2013
('the Act,) read with Rule 7 of the Companies (Accounts) Rules, 2014 ,
the provision of the Act ( to the extent notified) and guidelines
issued by Securities and Exchange Board of India (SEBI). There are no
material departures from the prescribed accounting standards in
adoption of these standards.
The Directors, confirm that:
i) in the preparation of the annual accounts for the financial year
ended March 31, 2015, the applicable accounting standards have been
followed along with proper explanation relating to material departures,
if any;
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 at the end of the financial year and of the profit of
the Company for that period;
iii) the Directors have taken proper and sufficient care for 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 frauds and other
irregularities;
iv) the Directors have prepared the annual accounts on a going concern
basis;
v) The Directors have laid down internal financial controls, which are
adequate and are operating effectively; and
vi) The Directors have devised proper systems to ensure compliance with
the provisions of all applicable laws and such systems are adequate and
operating effectively.
AUDITORS CERTIFICATE ON CORPORATE GOVERNANCE
As required by clause 49 of the Listing agreement, the auditors,
certificate on corporate governance is enclosed as to the Board,s
report.
AUDITORS
At the 19th Annual General Meeting held on September 30, 2014 M/s.
Lodha & Co. (ICAI Firm Registration No. 301051E), Chartered Accountants
(CAs), Mumbai were appointed as the statutory auditors of the Company
to hold office up to the conclusion of Twenty Second Annual General
Meeting to be held in the year 2017. In terms of the first proviso to
section 139 of the Companies Act, 2013, the appointment of the auditors
shall be placed for the ratification at every annual general meeting.
Accordingly appointment of M/s. Lodha & Co., Chartered Accountants as
Statutory Auditors of the Company is placed for ratification by the
shareholders. In this regard the Company has received a certificate
from the auditors to the effect that their appointment is in accordance
with the provisions of section 141 of the Companies Act, 2013.
AUDITORS, REPORT
There are no adverse remark or disclaimer, qualification or reservation
in the Auditors, Report.
SECRETARIAL AUDITOR
Pursuant to the provisions of Section 204 of the Companies Act, 2013
read with the Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014, your Company has appointed M/s. S. Anantha &
Co., Practicing Company Secretary to conduct the Secretarial Audit of
your Company. The Secretarial Audit Report is annexed herewith as
"Annexure -3" to this Report.
Necessary explanation to the observations made in the Secretarial Audit
Report is as given below:
a) Non-Filing of E-Form-MGT10 i.e., Return to be fled with Ministry of
Corporate Affairs, whenever there is an increase or decrease of two
percent or more in the shareholding of the Promoters and top ten
shareholders within 15 days of such change by the Company:
Reply: The Company is required to flea e-form MGT-10, in case of any
change of increase / decrease of 2% or more in the shareholding of the
Promoters and the top ten shareholders, and the 2% or more is
calculated on the paid-up share capital of the Company.
During the year the change (increase) in the shareholding of the
promoters is less than 2% of the paid-up share capital and the change,
if any, in the shareholding of the top ten shareholders 2% or more of
the paid-up share capital of the Company, have been fled.
SIGNIFICANT AND MATERIAL ORDERS
There are no significant and material orders passed by the regulators
or courts or tribunals impacting the going concern status and the
Company,s operation in future.
EXTRACT OF ANNUAL RETURN
In accordance with Section 92(3)(a) read with section 134(3)(a) of the
Companies Act,2013, an Extract of the Annual Return in the prescribed
format is attached as Annexure 4 to the Board,s Report.
INTERNAL FINANCIAL CONTROL
The Board has adopted policies and procedures for ensuring the orderly
and efficient conduct of business , including adherence to the
company,s policies, safeguarding of its assets, prevention and
detection of frauds and errors , the accuracy and completeness of the
accounting records, and the timely preparation of reliable financial
disclosures.
INFORMATION PURSUANT TO SECTION 197(12) OF THE COMPANIES ACT, 2013
There were no employees in receipt of remuneration during the year
requiring disclosure under section 197(12) of the Companies Act, 2013.
ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNINGS AND OUTGO
Information with respect to conservation of energy, technology
absorption, foreign exchange earnings and outgo, as required to be
disclosed pursuant to Section 134(m) of the Companies Act, 2013 read
with Rule 8 of the Companies (Accounts) Rules , 2014 are given in
Annexure 5.
EMPLOYEES STOCK OPTION PLAN
The position of ESOPs granted and exercised during the year is as
under:
Number of options granted: 200,000
Pricing formula: Not Applicable
Options vested: A total of 256,250 options vested during the year.
Options exercised and number of shares arising out of 325,000 such
exercise:
Options lapsed: During the year 50,000 options lapsed out of options
granted.
Variations in terms of options: There was no variation in the terms of
options.
Money realized on exercise of options: Nil
Total Number of options in force: Total number of 1,025,000 options
were in force as on 31.3.2015
ESOPs granted to senior managerial personnel: For the year ended
31.3.2015, the Company granted 325,000 options to Senior Managerial
Personnel.
Further for the year ended 31.3.2015, the Company did not grant more
than 1% of the issued capital of the Company to any one person as of
the date of grant.
Method of Accounting
The Company has elected to use the intrinsic value method to account
for the compensation cost of stock options to employees of the Company.
Intrinsic value is the amount by which the quoted market price of the
underlying share as on the date of grant exceeds the exercise price of
the option.
Summary of the options outstanding under the Employees Stock Option
Plan(ESOP):
As at March 31, 2015 As at March 31, 2014
Options Weighted
Average Options Weighted
Average
Exercise
Price (Rs,) Exercise Price (Rs,)
Options
outstanding
at beginning
of the year 1,200,000 15.75 1,517,500 15.57
Granted during
the year 200,000 44.30 375,000 11.34
Exercised during
the year 325, 000 17.29 0 0
Forfeited/lapsed
during the year 50,000 17.95 692,500 12.95
Options
outstanding at
end of year 1,025,000 20.73 1,200,000 15.75
Vested options
pending exercise 550,000 16.86 668,750 17.77
The following summarizes information about stock options outstanding:
As at March 31, 2015
Range of Exercise Number of Shares
Price arising out of Weighted average
options remaining Weighted
life (years) average
Exercise
Price
(Rs,)
Rs,10 to Rs,15 350,000 6 11.34
Rs,15 to Rs,45 675,000 5 25.60
As at March 31, 2014
Range of
Exercise Number of Shares
price arising out of Weighted average
options life remaining Weighted average
Exercise Price
(Years) (Rs,)
Rs,10 to
Rs,15 375,000 6 11.34
Rs,15 to
Rs,23 825,500 5 17.76
Fair Value methodology for the option:
The fair value of options used to compute net income and earnings per
equity share have been estimated on the dates of each grant within the
range of Rs,10 to Rs,45 using the Black-Schools pricing model. The
Company estimated the volatility based on the historical share prices.
The various assumptions considered in the pricing model for the options
granted under ESOP are:
As at March 31, 2015 As at March 31, 2014
Dividend yield 0-10% 0-10%
Expected volatility 10%-20% 10%-20%
Risk-free
interest rate 6.46% - 6.65% 6.46% - 6.65%
Expected life
of option 0 Â 7 yrs 0 Â 7 yrs
Impact of Fair value method on Net Profit and EPS
Had the compensation cost for the Company,s Stock Option Plan
outstanding been determined based on the fair value approach, the
Company,s net profit income and earnings per share would have been, as
indicated below:
As at March
31, 2015 Rs, As at March
31, 2014 Rs,
Profit attributable
to Equity Shareholders 81,711,516 86,884,875
Less: Stock-based
compensation expense
determined under 4,428,463 177,868
fair value based method
Net Profit 77,283,053 86,707,007
Basic and diluted
earnings per share (as reported) 2.90 3.27
Basic and diluted earnings
per share (under fair value method) 2.85 3.27
Section 134(3) (l)
There have been no material changes and commitments which can affect
the financial position of the Company between the end of the financial
year of the Company and date of this report.
For and on behalf of the Board of Directors
Viswanath Tadimety
Chairman
DIN : (00008106)
Place : Trevose, PA, USA
Date : August 13, 2015
Mar 31, 2014
Dear Members,
The Directors are pleased to present the Annual Report together with
the Audited Statements of Accounts for the year ended March 31, 2014.
This report includes both standalone results for the Company (CyberTech
Systems and Software Ltd.) as well as consolidated results for the
Company and its subsidiary Cybertech Systems and Software Inc in the
USA.
FINANCIAL RESULTS
(Rs. in million)
Standalone Consolidated
2013-14 2012-13 2013-14 2012-13
Gross Revenue 459.51 447.93 730.83 752.14
Profit before Interest &
Depreciation 125.86 178.79 125.48 164.36
Interest 4.76 0.69 4.76 0.69
Depreciation 14.48 16.19 24.64 25.52
Profit/(Loss) before tax 106.62 161.91 96.08 138.15
Provision for tax 19.74 50.07 19.74 50.07
Profit/(Loss) after tax 86.88 111.84 76.34 88.08
Accumulated profit b/f from
previous year 207.66 126.79 112.94 55.83
Provision for Dividend
(includes dividend tax of
Rs. 4.50 million) 30.97 30.97 30.97 30.97
Balance to be carried forward 263.57 207.66 158.31 112.93
DIVIDEND
Your Directors have the pleasure of recommending Dividend at Rupee 1
per Equity share for the year under review.
REVIEW OF THE COMPANY''S STAND ALONE PERFORMANCE
The Company''s primary focus continues to be delivering offshore
development and support services in the Company''s core technology
areas. We are happy to inform that during the year the Company has made
an effort to develop a product suite that is useful for all
Municipalities requirements. There was a steady growth in the Offshore
and Domestic revenue compared to last year. The Company continued to
receive income from surplus office premises that earn rental income.
The Company''s performance for the year on standalone basis is as
follows:
* Total revenue during the year 2013-14 amounted to Rs. 459.51 million
as compared to Rs. 447.93 million during the previous year. Total
revenue is comprised of revenue from operations and other income, as
follows.
* Revenue from operations for the year ended March 31, 2014 amounted to
Rs. 406.57 million as against Rs. 340.11 million for the previous year.
Operating revenue includes both software support and development
activities. Revenue is increased by 19.54% due to increase in domestic
business in India as well as Offshore business.
* Other Income amounted to Rs. 52.94 million as against Rs. 107.82
million.
CyberTech continues to be on growth path. The Company has grown its GIS
and India Business substantially over the past few years. Many of the
Application Maintenance projects are transformed into long term annuity
projects. To allow the Company to continue this evolution, the top
management of the Company has realigned the organization, established
autonomy in a few new business units and streamlined the business
model.
The consolidated group continues to focus on delivering services to its
identified market segments in its core technology areas. It continues
to align its sales and delivery organizations to an offshore centric
model as well as big foray in to Domestic GIS market.
CONSOLIDATED FINANCIAL STATEMENTS
The consolidated financial statements of the Company, including its
wholly owned US subsidiary are prepared in accordance with Accounting
Standard 21 (Consolidation of Accounts) as prescribed by the Institute
of Chartered Accountants of India and in compliance with the terms of
the listing agreement with the Stock Exchanges. Together, these
comprise part of the Annual Report and Accounts. The summarized
consolidated results are given alongside the financial results of your
Company and are discussed in the accompanying Management Discussion and
Analysis of Consolidated Results.
WHOLLY OWNED SUBSIDIARY IN USA
The Company owns 100% interest in CyberTech Systems and Software Inc.,
USA (CSSI) which was formed on June 12, 2003 in the State of Delaware
in the United States of America, whose results are consolidated herein.
CyberTech Systems and Software, Inc. (USA) reported an operating loss
of Rs. 0.38 million before interest, depreciation and tax on revenue of
Rs. 612.58 million. The net loss after tax aggregated to Rs. 0.17
million.
The Company is taking steps to increase the revenue of CyberTech
Systems and Software, Inc. (USA) and the management is of the opinion
that it will be able to wipe off the accumulated losses of CyberTech
Systems and Software, Inc. (USA) gradually.
SUBSIDIARY IN THE MIDDLE EAST
The Company is holding 55% interest in CyberTech Middle East W.L.L.
(also known as "CME"), its joint venture company in Bahrain formed in
August 2008 but due to the business differences between the Local
Partners of CyberTech Middle East W.L.L., Bahrain (''CME'') and the
Company, it had filed a suit against its Local Partners in the Country
of Bahrain and hence CME is non operational.
An arbitrator was appointed by London Court of International
Arbitation. As per award subsequent to the year end, the Company has
received US $ 9.68 lacs pursuant to the arbitration settlement with the
Local Partners of Bahrain subsidiary. As per the award terms, the
Company inter alia is also to transfer it''s holding to the Local
Partners, once legal and other statutory formalities in respect of
which are in the process of being complied with. Consideration in
respect of transfer as also the aforesaid amount will be accounted for
as and when necessary formalities are complied.
However, to comply with the Indian Laws, the Company appointed M/s.
Hemant Mahajan and Associates, Chartered Accountants of Thane as
Auditor to audit the accounts of CyberTech Middle East W.L.L., Bahrain
for the Financial Year 2013-14.
SUBSIDIARY COMPANIES'' ACCOUNTS
The statement required pursuant to section 212 of the Companies Act,
1956, containing details of the subsidiaries, CSSI and CME is attached
hereto.
BUSINESS OPERATIONS OVERVIEW AND OUTLOOK
The Company has been exploring new areas which have the potential
growth to Company''s business. The development and evolution of GeoCivic
® is still underway and based on the initial demonstrations many
Municipal Offices have shown interest in implementation of this
application to leverage their geographic intelligence and to optimize
civic planning and development. Considering the amount of interest
shown by these Local Civic Bodies, your Company expects to grow
considerably in the next few years.
On March 5, 2014, CyberTech''s India Business Unit, announced the launch
of ''CyberTech Risk Center'' that offers advanced Risk Visibility
Solutions dedicated to the Indian Public and Corporate sector. The risk
center has been formed under an MOU between CyberTech and NC4 - the
world leader in risk management and situational awareness solutions.
CyberTech Risk Center provides Indian organizations with geo-coded
information on incidents that are likely to impact them, in near-real
time, thus helping Indian organizations ensure business continuity,
while safeguarding their employees and physical assets. The launch,
held at the Grand Hyatt, Mumbai, was a success with the presence of
many senior Security professionals from leading organizations across
the country. The event marked the beginning of CyberTech''s journey in
the Indian Corporate Security and Risk Management sector.
EXPANSION ACTIVITIES
The Company has completed the construction of their additional capacity
of 25,000 sq.ft. which can accommodate around 250 IT professionals.
However, the Company is yet to use this floor pending receipt of
Occupancy Certificate for which the formalities have been initiated.
FIXED DEPOSITS
The Company has not accepted any public deposits and as such, no amount
on account of principal or interest on public deposits was outstanding
as on the date of Balance Sheet.
GENERAL
The Management Discussion and Analysis Report reviews the operations of
the Company in more detail and forms a part of this Annual Report.
CORPORATE GOVERNANCE
As per the Listing Agreement with the Stock Exchange(s), the Company
has complied with the requirements of the Corporate Governance
provisions of the Listing Agreement. A report on Corporate Governance
is attached to this report.
DIRECTORS
The Company had, pursuant to the provisions of clause 49 of the Listing
Agreements entered into with Stock Exchanges, appointed Mr. Prakash
Kenjale, Mr. Sudhir Joshi, Dr. Shreepad Karmalkar and Dr. N.L. Sarda as
Independent Directors of the Company.
As per section 149(4) of the Companies Act, 2013 (Act), which came into
effect from April 1, 2014, every listed public company is required to
have at least one-third of the total number of directors as Independent
Directors. Pursuant to the provisions of section 149 of the Act, these
Directors are being appointed as Independent Directors to hold office
for a period of five years in the forthcoming Annual General Meeting
(AGM) of the Company.
In accordance with the provisions of the Companies Act, 2013, Mr.
Viswanath Tadimety non executive Chairman of the Company retires by
rotation at the ensuing Annual General Meeting but being eligible
offers himself for reappointment.
Proviso to sub clause 1 of Section 149 of the Companies Act, 2013 read
with Rule 3 of Companies (Appointment and Qualification of directors)
Rules, 2014 makes it mandatory to Listed Companies to have at least one
woman director on the Board of Directors of the Company.
The Board of Directors at its meeting held on August 6, 2014 approved
the proposal to appoint Ms. Amogha Tadimety as woman director retiring
by rotation subject to the approval of members in the Nineteenth Annual
General Meeting.
DIRECTORS'' RESPONSIBILITY STATEMENT
Pursuant to the requirement under Section 134 (1) (c) and Section 134
(5) of the Companies Act, 2013 with respect to Directors''
Responsibilities Statement, it is hereby confirmed that:
i) in the preparation of the annual accounts for the financial year
ended March 31, 2014, the applicable accounting standards were followed
and proper explanation relating to material departures given.
ii) 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 of
the Company for that period.
iii) the Directors took proper and sufficient care for 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 frauds and other irregularities.
iv) the Directors have prepared the annual accounts on a going concern
basis.
AUDITORS
M/s. Lodha & Co. (ICAI Firm Registration No. 301051E), Chartered
Accountants (CAs), Mumbai was appointed as the statutory auditors of
the Company for financial year 2013-14 at the Eighteenth Annual General
Meeting (AGM) of the Company held on September 30, 2013 and it will be
retiring at the ensuing Annual General Meeting.
M/s. Lodha & Co. has been the Auditor of the Company since 2001 and
have completed a term of 14 years. Prior to this, M/s. PRICE WATERHOUSE
was the Auditor of the Company from the financial year 1997-98 till
financial year JUNE 2001. As per the provisions of section 139 of the
Act, no listed company can appoint or re-appoint an audit firm as
auditor for more than two terms of five consecutive years. Section 139
of the Act has also provided a period of three years from the date of
commencement of the Act to comply with this requirement.
M/s Lodha & Co. has offered itself for re-appointment for a period of
three years. The Company has received a certificate dated June 21, 2014
from Lodha & Co. stating that if it is re-appointed, its appointment
will be within the limits prescribed under Section 141 of the Companies
Act, 2013 and that their firm is not disqualified in terms of the
provisions of section 139(1) of the Act to be appointed as auditor of
the Company. M/s. Lodha & Co. has also confirmed that it is having the
Peer Review Certificate issued by the Institute of Chartered
Accountants of India as required by the Listing Agreement with the
Stock Exchanges.
The comments made by the Auditor in its report are self-explanatory and
do not call for further explanation.
INFORMATION PURSUANT TO SECTION 217 OF THE COMPANIES ACT, 1956
There were no employees in receipt of remuneration during the year
requiring disclosure under section 217 (2A) of the Companies Act, 1956.
ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNINGS AND OUTGO
Information with respect to conservation of energy, technology
absorption, foreign exchange earnings and outgo, as required to be
disclosed pursuant to 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 are set out in the Annexure to this
Report.
Method of Accounting
The Company has elected to use the intrinsic value method to account
for the compensation cost of stock options to employees of the Company,
Intrinsic value is the amount by which the quoted market price of the
underlying share as on the date of grant exceeds the exercise price of
the option Summary of the options outstanding under the Employees Stock
Option Plan(ESOP):
As at March 31, 2014
Options Weighted Average
Exercise Price
(Rs. )
Options outstanding
at beginning of the
year 1,517,500 15.57
Granted during the year 375,000 11.34
Exercised during the year 0 0
Forfeited/lapsed during the year 692,500 12.95
Options outstanding at end of year 1,200,000 15.75
Vested options pending exercise 668,750 17.77
As at March 31, 2013
Options Weighted Average
Exercise Price
(Rs. )
Options outstanding
at beginning of the
year 1,697,500 15.88
Granted during the year 0 0
Exercised during the year 0 0
Forfeited/lapsed during the year 180,000 16.62
Options outstanding at end of year 1,517,500 15.57
Vested options pending exercise 1,030,000 15.29
The following summarizes information about stock options outstanding:
As at March 31, 2014
Range of Exercise Number of Shares Weighted average Weighted average
price arising out of remaining life Exercise Price
options (Years) (Rs. )
Rs. 10 to Rs. 15 375,000 6 11.34
Rs. 15 to Rs. 23 825,000 5 17.76
As at March 31, 2013
Range of Exercise Number of shares Weighted average Weighted average
Price arising out of remaining life Exercise Price
options (Years) (Rs. )
Rs. 10 to Rs. 15 600,000 4 12.28
Rs. 15 to Rs. 23 917,500 5 17.71
Fair Value methodology for the option:
The fair value of options used to compute net income and earnings per
equity share have been estimated on the dates of each grant within the
range of Rs. 7.55 to Rs. 22.90 using the Black-Scholes pricing model.
The Company estimated the volatility based on the historical share
prices. The various assumptions considered in the pricing model for the
options granted under ESOP are:
As at March As at March
31, 2014 31, 2013
Dividend yield 0-10% 0-10%
Expected volatility 10%-20% 10%-20%
Risk-free interest rate 6.46% - 6.65% 6.46% - 6.65%
Expected life of option 0 - 7 yrs 0 - 7 yrs
Impact of Fair value method on Net Profit and EPS
Had the compensation cost for the Company''s Stock Option Plan
outstanding been determined based on the fair value approach, the
Company''s net profit income and earnings per share would have been, as
indicated below:
As at March As at March
31, 2014 31, 2013
Profit attributable to
Equity Shareholders 86,884,875 111,841,136
Less: Stock-based compensation
expense determined under fair
value based 177,868 207,513
method
Net Profit 86,707,007 111,633,623
Basic and diluted earnings per
share (as reported) 3.27 4.22
Basic and diluted earnings per
share (under fair value method) 3.27 4.22
ACKNOWLEDGEMENT
Your Directors wish to place on record their appreciation and sincere
gratitude to the various departments of the Central and State
Government, Company''s Bankers, clients, media and business constituents
for their valuable assistance and support. The Directors also
acknowledge the continued support received from investors and
shareholders and the confidence reposed by them. The Directors also
record their appreciation for the sincere and dedicated services
rendered by all the employees of the Company.
For and on behalf of the Board of Directors
Viswanath Tadimety
Chairman
Place : Thane
Date : August 6,2014
Mar 31, 2013
Dear Members,
The Directors are pleased to present the Annual Report together with
the Audited Statements of Accounts for the year ended March 31, 2013.
This report includes both standalone results for the Company (CyberTech
Systems and Software Ltd.) as well as consolidated results for the
Company and its wholly owned subsidiary CyberTech Systems and Software
Inc in the USA.
FINANCIAL RESULTS
(Rs.in million)
Standalone Consolidated
2012-13 2011-12 2012-13 2011-12
Gross Revenue 447.93 312.99 752.14 573.58
Proft before
Interest & Depreciation 178.79 86.55 164.36 88.56
Interest 0.69 0.13 0.69 0.13
Depreciation 16.19 15.70 25.52 20.14
Proft/(Loss) before tax 161.91 70.72 138.15 68.29
Provision for tax 50.07 20.08 50.07 20.08
Proft/(Loss) after tax 111.84 50.64 88.08 48.21
Accumulated proft b/f
from previous year 126.79 106.92 55.82 38.38
Provision for Dividend
(includes dividend
tax of Rs. 4.50 million) 30.97 30.77 30.97 30.77
Balance to be
carried forward 207.66 126.79 112.93 55.82
DIVIDEND
Your Directors have the pleasure of recommending a dividend of Rs. 1 per
Equity share for the year under review.
REVIEW OF THE COMPANY''S STAND ALONE PERFORMANCE
The Company''s primary focus continues to be delivering ofshore
development and support services in the Company''s core technology
areas. We are happy to inform that during the year the Company has made
an efort to develop a product suite that is useful for all
Municipalities requirements. This year saw a raise in Ofshore and
Domestic revenue compared to last year. During the year company
received refunds from Income Tax Department that were contested in the
Appellate Authorities by the Income Tax Department. Additionally, the
Company continued to receive income from surplus ofce premises as
rental income.
The Company''s performance for the year on standalone basis is as
follows:
- Total revenue during the year 2012-13 amounted toRs. 447.93 million as
compared toRs. 312.99 million during the previous year. Total revenue is
comprised of revenue from operations and other income, as follows.
- Revenue from operations for the year ended March 31, 2013 amounted to
Rs. 340.11 million as against Rs. 256.79 million for the previous year.
Operating revenue includes both software support and development
activities. Revenue is increased by 32.45% due to increase in domestic
business in India as well as Ofshore business.
- Other Income amounted to Rs. 107.82 million as against Rs. 56.19 million
for the priveious year.
- Proft before interest, depreciation and tax amounted to Rs. 178.79
million against Rs. 86.55 million in the previous year. Thus, Proft
before interest , depreciation and tax increased by whopping 106.57%
REVIEW OF CONSOLIDATED PERFORMANCE
On a Consolidated basis, the Company reported total revenue ofRs. 752.14
million during the year as compared toRs. 573.58 million during the
previous year.
Proft after tax for the year ended March 31, 2013 amounted to Rs. 88.07
million compared to Rs. 48.21 million in the previous year. Consolidated
Net proft after Tax increased by 82.67%
CyberTech is on major growth path. The Company has grown its GIS and
India Business substantially over the past few quarters. Several of the
Application Maintenance projects are transformed into long term annuity
projects. To allow the Company to continue this evolution, the top
management of the Company has realigned the organization, established
autonomy in business units and streamlined the business model.
The consolidated group continues to focus on delivering services to its
identifed market segments in its core technology areas. It continues to
align its sales and delivery organizations to an ofshore centric model
as well as big foray in to Domestic GIS market.
CONSOLIDATED FINANCIAL STATEMENTS
The consolidated fnancial statements of the Company, including its
wholly owned US subsidiary are prepared in accordance with Accounting
Standard 21 (Consolidation of Accounts) as prescribed by the Institute
of Chartered Accountants of India and in compliance with the terms of
the listing agreement with the Stock Exchanges. Together, these
comprise part of the Annual Report and Accounts. The summarized
consolidated results are given alongside the fnancial results of your
Company and are discussed in the accompanying Management Discussion and
Analysis Report.
WHOLLY OWNED SUBSIDIARY IN USA
The Company owns a 100% interest in CyberTech Systems and Software
Inc., USA (also known as "CSSI") incorporated on June 12,2003 in the
state of Delaware in the United States of America, whose results are
consolidated herein.
CyberTech Systems and Software, Inc. (USA) reported an operating loss
of Rs. 14.43 million before interest, depreciation and tax on revenue of
Rs. 606.92 million. The net loss after tax aggregated to Rs. 24.14 million.
The Company is taking steps to increase the revenue of CyberTech
Systems and Software, Inc. (USA) and the management is of the opinion
that it will be able to wipe of the accumulated losses of CyberTech
Systems and Software, Inc. (USA) gradually.
SUBSIDIARY IN THE MIDDLE EAST
The Company is holding 55% interest in CyberTech Middle East W.L.L.
(also known as "CME"), its joint venture company in Bahrain formed in
August 2008 but due to the business diferences between the partners of
CyberTech Middle East WLL, Bahrain, the Company has fled a suit against
its partner in the Country of Bahrain and hence CME is non operational.
During the current year the company has fled an arbitration settlement
in the London Courts.
However, to comply with the Indian Laws, the Company appointed M/s.
Hemant Mahajan and Associates, Chartered Accountants of Thane as
Auditor to Audit the Accounts of CyberTech Middle East W.L.L., Bahrain
for the Financial Year 2012-13.
SUBSIDIARY COMPANIES'' ACCOUNTS
The statement required pursuant to section 212 of the Companies Act,
1956, containing details of the subsidiaries, CSSI and CME is attached
hereto.
BUSINESS OPERATIONS OVERVIEW AND OUTLOOK
The company has been exploring new areas which have the potential
growth to Company''s business and recently has come up with an
application catering to various Municipal ofces of Local Government.
CyberTech''s India Business Unit, on Friday, 17th May 2013, announced
the launch of GeoCivicÂ, its GIS-based application suite. GeoCivic is
a comprehensive suite of GIS applications, designed to help Local
Governments, leverage geographic intelligence for optimum civic
planning and development.
The launch, held at the Trident, Nariman Point, Mumbai, was a success
with the presence of many senior dignitaries from leading Local and
State Governments across the country. Highly informative sessions
delivered by CyberTech''s leadership and product teams threw light on
how Indian Local Governments can leverage GeoCivic to drive their
mission-critical governance objectives.
The event also boasted of a very impressive list of guest speakers,
including some of the very prominent Senior Indian Government Delegates
and Global Technology Thought Leaders. The event marked the beginning
of CyberTech''s journey in India as a market-driven, IP-centric
technology solutions provider. The company believes that this product
suite will be major factor for the company''s future business growth.
EXPANSION ACTIVITIES
To augur the business growth the company is increasing the existing
building by another foor and this will create additional capacity of
around 25000 Sq. ft, the construction of which is expected to be
completed by the end of December 2013.
FIXED DEPOSITS
The Company did not accept any fxed deposits during the year within the
meaning of Section 58-A of the Companies Act, 1956 and the Companies
(Acceptance of Deposits) Rules, 1975.
GENERAL
The Management Discussion and Analysis Report reviews the operations of
the Company in more detail and forms a part of this Annual Report.
CORPORATE GOVERNANCE
As per the Listing Agreement with the stock exchange(s), the Company
has complied with the requirements of the Corporate Governance
provisions of the Agreement. A report on Corporate Governance is
attached to this report.
DIRECTORS
In accordance with the provisions of the Companies Act, 1956 and the
Company''s Articles of Association, Dr. Shreepad Karmalkar, Mr. Sudhir
Joshi and Mr. Rahul Ghosh Directors of the Company retire by rotation
at the ensuing Annual General Meeting. Dr. Shreepad Karmalkar and Mr.
Sudhir Joshi being eligible, ofer themselves for re-appointment.
Mr. Rahul Ghosh has expressed his inability to ofer himself for
re-appointment in view of his other commitments.
The Board accepted the resignation of Dr. Tapan Kumar Mukhopadhyay, as
Whole Time Director and Director of the Company w.e.f. August 13, 2013
because of his inability to continue as such due to his certain other
preoccupations.
The Directors wish to place on record their appreciation of the
services rendered by Mr. Rahul Ghosh and Dr. Tapan Kumar Mukhopadhyay
during their tenure as the Directors of the Company.
During the year, Dr. N.L. Sarda was co-opted as an Additional Director
with efect from September 28, 2012 who holds the position as such until
the conclusion of the ensuing Annual General Meeting unless is
reappointed by the members in the Annual General Meeting. Dr. N.L.
Sarda has given the consent to act as Director if appointed by the
members.
Necessary resolution for appointment of Dr. N.L. Sarda as Director has
been included in the Notice convening the ensuing Annual General
Meeting.
None of the directors of the Company is disqualifed for being appointed
as Director as specifed in Section 274(1) (g) of the Companies Act,
1956 as amended by the Companies (Amendment) Act, 2000.
DIRECTORS'' RESPONSIBILITY STATEMENT
Pursuant to the requirement under Section 217(2AA) of the Companies
Act, 1956 with respect to Directors'' Responsibilities Statement, it is
hereby confrmed that:
i) in the preparation of the annual accounts for the fnancial year
ended March 31, 2013, the applicable accounting standards were followed
and proper explanation relating to material departures given.
ii) the Directors 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 afairs of
the Company at the end of the fnancial year and of the proft of the
Company for that period.
iii) the Directors took proper and sufcient 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 frauds and other irregularities.
iv) the Directors have prepared the annual accounts on a going concern
basis.
AUDITORS
M/s. Lodha & Co., Chartered Accountants, Mumbai, the Statutory
Auditors, hold ofce until the conclusion of the ensuing Annual General
Meeting and are recommended by the Board for re-appointment. The
Company has received a certifcate from the Auditors to the efect that
their re-appointment, if made, will be within the limits as stipulated
under Section 224(1B) of the Companies Act, 1956. The members are
requested to consider appointment of M/s. Lodha & Co. as Statutory
Auditors at the ensuing Annual General Meeting.
The comments made by the Auditors in their report are self-explanatory
and do not call for further explanation.
INFORMATION PURSUANT TO SECTION 217 OF THE COMPANIES ACT, 1956
There were no employees in receipt of remuneration during the year
requiring disclosure under section 217 (2A) of the Companies Act, 1956.
ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNINGS AND OUTGO
Information with respect to conservation of energy, technology
absorption, foreign exchange earnings and outgo, as required to be
disclosed pursuant to 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 are set out in the Annexure to this
Report.
EMPLOYEES STOCK OPTION PLAN
The position of ESOPs granted and exercised during the year is as
under.
Number of options granted: Nil
Pricing formula: Not Applicable
Options vested: A total of 361,250 options vested during the year.
Options exercised and number of shares arising out No grantee exercised
options during the year. of such exercise:
Options lapsed: During the year 180,000 options lapsed out of options
granted.
Variations in terms of options: There was no variation in the terms of
options.
Money realized on exercise of options: Nil
Total Number of options in force: Total number of 15,17,500 options
were in force as on 31.3.2013.
ESOPs granted to senior managerial personnel: For the year ended
31.3.2013, the Company did not grant any options to
Senior Managerial Personnel.
Further for the year ended 31.3.2013, the Company did not grant more
than 1% of the issued capital of the Company to any one person as of
the date of grant.
Method of Accounting
The Company has elected to use the intrinsic value method to account
for the compensation cost of stock options to employees of the Company,
Intrinsic value is the amount by which the quoted market price of the
underlying share as on the date of grant exceeds the exercise price of
the option
ACKNOWLEDGEMENT
Your Directors wish to place on record their appreciation and sincere
gratitude to the various departments of the Central and State
Government, Company''s Bankers, clients, media and business constituents
for their valuable assistance and support. The Directors also
acknowledge the continued support received from investors and
shareholders and the confdence reposed by them. The Directors also
record their appreciation for the sincere and dedicated services
rendered by all the employees of the Company.
For and on behalf of the Board of Directors
Vish Tadimety Chairman
Place : Trevose. PA
Date : August 13, 2013
Mar 31, 2012
The Directors are pleased to present the Annual Report together with
the Audited Statements of Accounts for the year ended March 31, 2012.
This report includes both standalone results for the Company (CyberTech
Systems and Software Ltd.) as well as consolidated results for the
Company and its subsidiary in USA.
FINANCIAL RESULTS
(Rs in million)
Standalone Consolidated
2011-12 2010-11 2011-12 2010-11
Gross Revenue 312.99 242.91 573.58 462.68
Profit before Interest &
Depreciation 86.55 82.53 88.56 53.37
Interest 0.13 - 0.13 -
Depreciation 15.70 16.29 20.14 20.42
Profit before tax 70.72 66.24 68.29 32.95
Provision for tax 20.08 18.64 20.08 18.64
Income Tax adjustments for
earlier year's -credit - - - 0.51
Profit after tax 50.64 47.60 48.21 13.80
Accumulated profit b/f
from previous year 106.92 90.19 38.38 55.45
Provision for Dividend
(includes dividend tax of
Rs. 4.30 million) (30.77) (30.87) (30.77) (30.87)
Balance to be carried
forward 126.79 106.92 55.82 38.38
DIVIDEND
Your Directors have the pleasure of recommending a dividend of Rs. 1
per Equity share for the year under review.
REVIEW OF THE COMPANY'S STAND ALONE PERFORMANCE
The Company's primary focus continues to be delivering offshore
development and support services in the Company's core technology areas
as well as providing geospatial solutions to domestic customers.
Additionally, the Company continues to receive income from certain
unutilized office premises and income from investments.
The Company's performance for the year on standalone basis is as
follows:
- Total revenue during the year 2011-12 amounted to Rs. 312.99 millions
as compared to Rs. 242.91 millions during the previous year representing
a growth of 28.85%. Total revenue is comprised of revenue from
operations and other income, as follows.
- Revenue from operations for the year ended March 31, 2012 amounted to
Rs. 256.79 million as against Rs. 168.19 million for the previous year.
Revenue increased by 52.68% primarily due to increase in offshore
development and support business and also from domestic business in
India.
- Other Income amounted to Rs. 56.20 millions as against Rs. 74.72
millions. Other Income is lower on account of the termination or non
renewal of contracts by tenants.
- During the year profit after tax amounted to Rs. 50.64 millions as
againstRs. 47.60 millions in the previous year representing a growth of
6.39%.
REVIEW OF CONSOLIDATED PERFORMANCE
On a Consolidated basis, the Company reported total revenue of Rs. 573.58
millions during the year as compared to Rs. 462.68 millions during the
previous year representing the growth of 23.96%.
Profit after tax for the year ended March 31, 2012 amounted to Rs. 48.21
millions compared to Rs. 13.80 millions in the previous year representing
a growth of 249.35%.
CyberTech is on the cusp of major growth. The Company has grown its GIS
and India Business substantially over the few quarters. Several of the
Application Maintenance projects are transformed into long term annuity
projects. To allow the Company to continue this growing strategy, the
top management of the Company has realigned the organization,
established autonomy in the new business units and streamlined the
business model.
The consolidated group continues to focus on delivering services to its
identified market segments in its core technology areas. It continues
to align its sales and delivery organizations to an offshore centric
model.
CONSOLIDATED FINANCIAL STATEMENTS
The consolidated financial statements of the Company, including its
wholly owned US subsidiary are prepared in accordance with Accounting
Standard 21 (Consolidation of Accounts) as prescribed by the Institute
of Chartered Accountants of India and in compliance with the terms of
the listing agreement with the Stock Exchanges. Together, these
comprise part of the Annual Report and Accounts. The summarized
consolidated results are given alongside the financial results of your
Company and are discussed in the accompanying Management Discussion and
Analysis of Consolidated Results.
WHOLLY OWNED SUBSIDIARY IN USA
The Company owns a 100% interest in CyberTech Systems & Software
incorporated on June 12, 2003 in the state of Delaware in the United
States of America, whose results are consolidated herein.
CyberTech Systems & Software, Inc. (USA) reported an operating loss of
Rs. 3.36 millions before interest, depreciation and tax on revenue of
Rs. 493.92 millions. The net loss after tax aggregated to Rs. 7.80
millions compared to a net loss of Rs.34.52 millions in the previous
year.
In spite of economic recession in U.S.A., the Company is taking steps
to increase the revenue of CyberTech Systems & Software, Inc. (USA) and
the management is of the opinion that it will be able to wipe of the
accumulated losses of CyberTech Systems & Software, Inc. (USA) in
future.
SUBSIDIARY IN THE MIDDLE EAST
The Company is holding 55% interest in CyberTech Middle East W.L.L.
(CME), its joint venture company in Bahrain formed in August 2008.
There were differences between partners of CME. As the registered
Director in Bahrain, the partner in the country of Bahrain is
responsible for the operations of the subsidiary but the said partner
has not provided any financial information for last two years. Hence,
the Company is unable to consolidate the accounts of CME. The Company
has fled a suit against the said partner with the authorities in the
Kingdom of Bahrain in order to gain custodianship of CME among the
various other issues. The investment made by the Company in CME has
been fully provided for during the current year.
However, to comply with the Indian Laws, the Board felt that the
Company should prepare the financials of CME based on the best
estimates. Hence, the Company appointed M/s. Hemant Mahajan and
Associates, Chartered Accountants as Auditors to Audit the Accounts of
CyberTech Middle East W.L.L., Bahrain for the F.Y. 2010-11 and 2011-12.
SUBSIDIARY COMPANIES' ACCOUNTS
The statement required pursuant to section 212 of the Companies Act,
1956, containing details of the subsidiary, CyberTech Systems &
Software Inc, USA is attached hereto.
BUSINESS OPERATIONS OVERVIEW AND OUTLOOK
The Company continues to focus on both Enterprise and Public Sector
Clients in the area of SAP, GIS Technologies and Custom Technology
applications. It maintains strong relationships and alliances with its
partners such as SAP, CISCO and ESRI which will continue to lead to
business and revenue growth and improve profitability with a continued
focus on offshore revenue. Even though the market place in USA may
recover slowly, the strong alliances are expected to help the Company
to attain Business revenue growth and improve profitability with a
continued focus on offshore revenue in future. Moreover our reworked
Company strategy focused around Cloud Services, Location Analytics and
Mobile Solutions you can see a significant growth in the next 2-4
years, subject to market conditions.
Company also continues to build an effective portfolio of Intellectual
Property for future monetization, collaboration and risk mitigation.
In fiscal 2012 company focused on building and managing of IPs. Company
emphasizes to its employees for collaborative efforts for creating
Intellectual Property. IPs give multiple advantages like cost and time
saving, technical edge, risk mitigation etc.
The Company continuously engages in customer focused innovation and
launches new offerings that use technology to address its clients'
business problems. To augment the growth CyberTech has successfully
converted its various IPs into various light apps and hosted on
www.appmaps.com.
The Company also continues to maintain its focus on its ESRI Alliance
Partnership which has helped the Company in gaining a presence in the
Geographic Information Systems (GIS) Practice. The Company is proud to
be one of the ESRI's main partners and expects to continue to provide a
variety of GIS services to its clients worldwide.
US Market conditions continue to grow at lower pace making it harder to
locate new development opportunities and these actions do not forecast
a quick turn around in the US Market. However the Company continues to
take all reasonable steps as discussed to reduce and optimize costs to
improve profitability. Focus remains on expanding the benefits from our
alliance partners and creating offshore opportunities where
relationships are of a long term nature and recurring services can be
provided at a lower cost.
The spending for GIS Solutions are seeing a change in trend. The use of
GIS in US as well as in Indian Market for solutions and service
reaching out to end users seen an upward trend. The penetration of
mobile networks and smart phones like Apple, iPhone and Android based
phones help change the GIS usage across the world. The future of GIS is
going to move our Enterprise space to retail/customers space during the
coming years. With Cloud computing gaining momentum this will be a
reality soon.
In view of the foregoing the Company is making all efforts to improve
its top & bottom line in the ensuing year.
EXPANSION ACTIVITIES
During the year your company has paid premium on additional FSI granted
by the Maharashtra Industrial Development Corporation. Accordingly the
Company has started the expansion activities in the existing office
premises. The Company also intends to build another complex to make use
of the additional FSI available.
FIXED DEPOSITS
The Company did not accept any fixed deposits during the year within
the meaning of Section 58-A of the Companies Act, 1956 and the
Companies (Acceptance of Deposits) Rules, 1975.
GENERAL
The Management Discussion and Analysis Report reviews the operations of
the Company in more detail and forms a part of this Annual Report.
GROUP STRUCTURE
As required under clause 3(1)(e) of the Securities and Exchange Board
of India (Substantial Acquisition of Shares and Takeovers)
Regulations,1997 persons constituting Group (within the meaning and as
defined in the Monopolies and Restrictive Trade practices Act, 1969)
for the purpose of availing exemption from applicability of the
provisions of Regulations 10 to 12 of the aforesaid SEBI Regulations
are given in Annexure A attached herewith and forms part of the Report.
CORPORATE GOVERNANCE
As per the Listing Agreement with the stock exchange(s), the Company
has complied with the requirements of the Corporate Governance
provisions of the Agreement. A report on Corporate Governance is
attached to this report.
HUMAN RESOURCES
The Company has a vibrant work atmosphere and also has a dedicated team
of skilled work force who has been able to mitigate the challenges of
the economic downturn. Over the years the Company has built up a
workforce with team spirit and they are motivated to face any
challenges and achieve the desired targets to improve the operations of
the Company. The Company is managed by a group of professionals and
advisors. The Company has introduced CyberTech Management and
Leadership Development programme (CML). The objective of the CML
programme is to select, recruit and groom young leaders and next
generation managers of the CyberTech.
DIRECTORS
In accordance with the provisions of the Companies Act, 1956 and the
Company's Articles of Association, Mr. Steven Jeske and Mr. Prakash
Kenjale, Directors of the Company retire by rotation at the ensuing
Annual General Meeting. Mr. Steven Jeske and Mr. Prakash Kenjale being
eligible, offer themselves for re-appointment.
During the year, the Board of Directors co-opted Mr. M. P. Bharucha and
Mr. Rahul Ghosh as additional Directors on September 30, 2011 who hold
the position as such until the conclusion of the ensuing Annual General
Meeting unless are reappointed by the members in the Annual General
Meeting. Mr. M. P. Bharucha and Mr. Rahul Ghosh have given their
consent to act as Directors if appointed by the members
The Board of Directors of company has also appointed Mr.
Ramasubramanian Sankaran as an Additional Director & Executive Director
of the company w.e.f. August 4, 2012. He also holds the position of
Director as such until the conclusion of the ensuing Annual General
Meeting (AGM) unless is reappointed by members in the AGM. Mr.
Ramasubramanian Sankaran has given his consent to act as a Director if
appointed by the members.
Necessary resolutions for appointment of Mr. M. P. Bharucha, Mr. Rahul
Ghosh and Mr. Ramasubramanian Sankaran as Directors have been included
in the Notice convening the ensuing Annual General Meeting.
None of the Directors of the Company is disqualified for being
appointed as Director as specified in Section 274(1) (g) of the
Companies Act, 1956 as amended by the Companies (Amendment) Act, 2000.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to the requirement under Section 217(2AA) of the Companies
Act, 1956 with respect to Directors' Responsibilities Statement, it is
hereby confirmed that:
i) in the preparation of the annual accounts for the financial year
ended March 31, 2012, the applicable accounting standards were followed
and proper explanation relating to material disclosure were given.
ii) the Directors selected such accounting policies and applied them
consistently and made judgments and estimates that are reasonable and
prudent so as to give a true and fair view of the state of affairs of
the Company at the end of the financial year and of the profit of the
Company for that period.
iii) the Directors took 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 frauds and other irregularities.
iv) the Directors have prepared the annual accounts on a going concern
basis.
AUDITORS
M/s. Lodha & Co., Chartered Accountants, Mumbai, the Statutory
Auditors, holds office until the conclusion of the ensuing Annual
General Meeting and is recommended by the Board for re-appointment. The
Company has received a certificate from the Auditors to the effect that
their re-appointment, if made, will be within the limits as stipulated
under Section 224(1B) of the Companies Act, 1956. The members are
requested to consider appointment of M/s. Lodha & Co. as Statutory
Auditors at the ensuing Annual General Meeting.
The comments made by the Auditors in their report are self-explanatory
and do not call for further explanation.
INFORMATION PURSUANT TO SECTION 217 OF THE COMPANIES ACT, 1956
There were no employees in receipt of remuneration during the year
requiring disclosure under section 217 (2A) of the Companies Act, 1956.
ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNINGS AND OUTGO
Information with respect to conservation of energy, technology
absorption, foreign exchange earnings and outgo, as required to be
disclosed pursuant to 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 are set out in the Annexure B to this
Report.
EMPLOYEES STOCK OPTION PLAN
The position of ESOPs granted and exercised during the year is as
under.
Number of options granted: Nil
Pricing formula: Not Applicable
Options vested: A total of 348,750 options vested
during the year.
Options exercised and number No grantee exercised options during
of shares arising out the year.
of such exercise:
Options lapsed: During the year 299,250 options
lapsed out of options granted.
Variations in terms of options: There was no variation in the terms
of options.
Money realized on exercise of Nil
options:
Total Number of options in
force: Total number of 1,747,500 options
were in force as on 31.3.2012
ESOPs granted to senior For the year ended on March 31,
managerial personnel: 2012, the Company did not grant any
options to Senior Managerial
Personnel.
Further for the year ended on March
31, 2012, the Company did not grant
more than 1% of the issued capital
of the Company to any one person as
of the date of grant.
Method of Accounting
The Company has elected to use the intrinsic value method to account
for the compensation cost of stock options to employees of the Company,
Intrinsic value is the amount by which the quoted market price of the
underlying share as on the date of grant exceeds the exercise price of
the option.
Summary of the options outstanding under the Employees Stock Option
Plan (ESOP):
As at March 31, As at March 31,
2011 2012
Options Weighted Options Weighted
Average Average
Exercise Exercise
Price Price
(Rs) (Rs)
Options outstanding 2,046,750 15.25 1,090,750 12.86
at beginning of the
year
Granted during the year 0 0 1,025,000 16.69
Exercised during the
year 0 0 0 0
Forfeited/lapsed
during the year 299,250 11.20 69,000 13.74
Options outstanding
at end of year 1,747,500 15.94 2,046,750 15.25
Vested options
pending exercise 761,250 15.28 761,750 12.91
The following summarizes information about stock options outstanding:
As at March 31, 2012
Range of Exercise Number of Shares Weighted average Weighted
price arising out remaining average
of options life (Years) Exercise
Price (Rs)
Rs. 7.50 to Rs. 15 600,000 4 12.28
Rs. 15 to Rs. 23 1,147,500 5 17.86
As at March 31, 2011
Range of Exercise Number of Shares Weighted average Weighted
price arising out remaining average
of options life (Years) Exercise
Price (Rs)
Rs. 7.50 to Rs. 15 899,250 4 11.92
Rs. 15 to Rs. 23 1,147,500 6 17.33
Fair Value methodology for the option:
The fair value of options used to compute net income and earnings per
equity share have been estimated on the dates of each grant within the
range of Rs. 7.55 to Rs. 22.90 using the Black-Scholes pricing model.
The Company estimated the volatility based on the historical share
prices. The various assumptions considered in the pricing model for the
options granted under ESOP are:
As at March As at March
31, 2012 31, 2011
Dividend yield 0-10% 0-10%
Expected volatility 10%-20% 10%-20%
Risk-free interest rate 6.46% - 6.65% 6.46% - 6.65%
Expected life of option 0 - 7 yrs 0 - 7 yrs
Impact of Fair value method on Net Profit and EPS
Had the compensation cost for the Company's Stock Option Plan
outstanding been determined based on the fair value approach, the
Company's net profit income and earnings per share would have been, as
indicated below:
As at March As at March
31, 2012 31, 2011
Rs Rs
Profit attributable to Equity
Shareholders 50,641,079 47,600,129
Add: Stock-based employee
compensation expense included
in net income 0 0
Less: Stock-based compensation
expense determined under fair value
based method 275,750 369,015
Net Profit 50,365,329 47,231,114
Basic and diluted earning per share
(as reported) 1.90 1.80
Basic and diluted earning per share
(under fair value method) 1.88 1.78
ACKNOWLEDGEMENT
Your Directors wish to place on record their appreciation and sincere
gratitude to the various departments of the Central and State
Government, Company's Bankers, clients, media and business constituents
for their valuable assistance and support. The Directors also
acknowledge the continued support received from investors and
shareholders and the confidence reposed by them. The Directors also
record their appreciation for the sincere and dedicated services
rendered by all the employees of the Company.
For and on behalf of the Board of Directors
Viswanath Tadimety
Chairman
Place : Thane
Date : August 4, 2012
Mar 31, 2011
Dear Members,
The Directors are pleased to present the Annual Report together with
the Audited Statements of Accounts for the financial year ended March
31, 2011. This report includes both standalone results of the Company
(CyberTech Systems and Software Ltd.) as well as consolidated results
of the Company and its subsidiary CyberTech Systems and Software Inc in
the USA. The Company has made an application to Ministry of Corporate
Affairs under section 212 (8) of the Companies Act, 1956 for not
incorporating the Accounts of CyberTech Middle East, W.L.L., Bahrain as
the Accounts of the aforesaid Company has not yet been received. The
financial highlights for the year under review are given below:
FINANCIAL RESULTS
(Rs.in millions)
Standalone Consolidated
2010-11 2009-10 2010-11 2009-10
Gross Revenue 247.45 207.40 467.22 509.26
Profit before Interest &
Depreciation 82.53 80.03 53.37 51.47
Interest - 0.02 - 0.03
Depreciation 16.29 18.05 20.42 23.54
Profit/(Loss) before tax 66.24 61.96 32.95 27.90
Provision for tax 18.64 18.11 18.64 18.11
Income Tax adjustments for
earlier year's - - 0.51 (8.88)
Profit after tax 47.60 43.85 13.80 18.67
Less Minority Interest
(Loss) - - - (2.85)
Accumulated profit b/f from
previous year 90.19 77.31 55.45 64.89
Provision for Dividend
(includes dividend tax
of Rs.4.50 millions)
30.87 30.97 30.87 30.97
Balance to be carried forward 106.92 90.19 38.38 55.44
REVIEW OF THE COMPANY'S STAND ALONE PERFORMANCE
The Company's primary focus continues to be delivering offshore
development and support services in the Company's core technology
areas. Additionally, the Company continued to receive substantial
income from certain real estate rentals and interest income.
The Company's performance for the year on standalone basis is as
follows:
- Total revenue during the year 2010-11 amounted to Rs. 247.45 millions
as compared to Rs. 207.40 millions during the previous year
representing a growth of 19.31% .Total revenue is comprised of revenue
from operations and other income, as follows:
- Revenue from operations for the year ended March 31, 2011 amounted to
Rs. 168.19 millions as against Rs. 124.35 millions for the previous
year. Operating revenue includes both software support and development
activities. Revenue increased 35.25% pimarily due to an increase in
domestic business in India,
- Other Income, primarily rent and interest, amounted to Rs. 79.26
millions as against Rs. 83.05 millions.
- Profit after tax amounted to Rs. 47.60 millions as against Rs.
43.85 millions in the previous year representing a growth of 8.55%.The
increase in profit of the Company is on the lower side mainly due to
the fact that Indian costs including payroll continue to increase based
on market conditions, although at a lower rate.
REVIEW OF CONSOLIDATED PERFORMANCE
On a Consolidated basis, the Company reported total revenue of Rs.
467.22 millions during the year as compared toRs. 509.26 millions
during the previous year. It is not comparable with the earlier year as
it does not include the revenue of CyberTech Middle East, W.L.L.,
Bahrain.
Profit after tax for the financial year ended March 31, 2011 amounted
to Rs. 13.80 millions compared to Rs. 18.67 millions in the previous
year. The Consolidated profit was lower due to the fact that the market
for IT services continues to be highly challenging and volatile in the
US and the public sector is also reducing their spending levels as
budgets are strained.
The consolidated group continues to focus on delivering services to its
identified market segments in its core technology areas. Its sales and
delivery organizations have been aligned to an offshore centric model.
CONSOLIDATED FINANCIAL STATEMENTS
The consolidated financial statements of the Company, including its
wholly owned US subsidiary are prepared in accordance with Accounting
Standard 21 (Consolidation of Accounts) as prescribed by the Institute
of Chartered Accountants of India and in compliance with the terms of
the listing agreement with the Stock Exchanges. Together, these
comprise part of the Annual Report and Accounts. The summarized
consolidated results are given alongside the financial results of your
Company and are discussed in the acCompanying Management Discussion and
Analysis of Consolidated Results.
WHOLLY OWNED SUBSIDIARY IN USA
The Company owns a 100% interest in CyberTech Systems and Software,
Inc., incorporated on June 12, 2003 in the state of Delaware in the
United States of America, whose results are consolidated herein.
CyberTech Systems and Software, Inc. (USA) reported an operating loss
of Rs. 29.88 millions before interest, depreciation and tax on revenue
of Rs. 368.56 millions. The net loss after tax aggregated to Rs.
34.52 millions.
The Company is taking steps to selectively grow the business of
CyberTech Systems and Software, Inc. (USA) and management is currently
of the opinion that it will be able to gradually reverse the
accumulated losses of CyberTech Systems and Software, Inc. (USA).
SUBSIDIARY IN THE MIDDLE EAST
CyberTech Systems and Software Ltd. (CSSL) formed a Subsidiary Company
in Bahrain viz, CyberTech Middle East W.L.L., Bahrain along with a
joint venture partner, during the year 2008 in order to explore
business opportunities prevailing in the region. CSSL holds 55% share
of the Subsidiary Company.
During the year under review, there has been an ongoing disagreement
between the partners regarding management and direction of the joint
venture, as well as a redirection of activities by our joint venture
partner.Recently CyberTech Systems and Software Ltd. is finding
different avenues including legal course of action to resolve the
issue.
Since the Audited Accounts of CyberTech Middle East W.L.L, Bahrain were
not available, the same could not be placed before the Board.Your
Directors therefore, applied for an exemption from the Ministry of
Corporate Affairs under Section 212(8) of the Companies Act, 1956 for
not attaching the accounts of the said subsidiary in the Annual Report
of the Company.
SUBSIDIARY COMPANIES' ACCOUNTS
The statement required pursuant to section 212 of the Companies Act,
1956, containing details of the subsidiary, CyberTech Systems and
Software Inc, USA is attached hereto. The details of CyberTech Middle
East W.L.L., Bahrain are not attached as the Company has made an
application for an exemption under Section 212(8) of the Companies Act,
1956.
INCREASE OF AUTHORISED CAPITAL
During the year under review, Company has increased its Authorised
Capital from Rs. 30,00,00,000/- (Rs. Thirty Crores only) to Rs.
36,00,00,000/- (Rs. Thirty Six Crores only ) divided into 3,60,00,000
Equity Shares ofRs. 10/- each pursuant to a special resolution passed
in the 15th Annual General Meeting in order to explore any investment
opportunities of the Company in future.
DIVIDEND
Your Directors have the pleasure of recommending a dividend of Rs. 1
per equity share for the year under review.
BUSINESS OPERATIONS OVERVIEW AND OUTLOOK
The Company maintains its focus on both Enterprise and Public Sector
Clients in the area of SAP,GIS Technologies and Custom Technology
applications. It maintains strong relationships and alliances with its
partners such as SAP,CISCO and ESRI which will continue to lead to
Business and revenue growth and improve profitability with a continued
focus on offshore revenue as soon as the Global Market improves in
future. Although we expect that due to economic down turn and political
crisis in USA, the market place in USA may remain weak and recover
slowly but the strong alliances are expected to help the Company to
attain Business revenue growth and improve profitability with a
continued focus on offshore revenue in future.
The Company will also continue to maintain its focus on its ESRI
Alliance Partnership which has helped the Company in gaining a presence
in the Geographic Information Systems(GIS) Practice.The Company is
proud to be one of the ESRI's main partners and expects to continue to
provide a variety of GIS services to its clients worldwide.
The Company has not kept up with Industry growth trends, primarily due
to economic down turn coupled with decreased spending in the US public
sector and increased pressure by the Government to reduce the number of
foreign IT Workers. As a result there was a corresponding decrease in
activitiy at several of our large clients. US Market conditions
continue to soften making it harder to locate new development
opportunities and these actions do not forecast a quick turn around in
the US Market. However, the Company continues to take all reasonable
steps to reduce and optimize costs to improve profitability. Focus
remains on expanding the benefits from our Alliance partners and
creating offshore opportunities where relationships are of a long term
nature and recurring services can be provided at a lower cost.
The spending for GIS Solutions are seeing a change in trend. The use of
GIS in US as well as in Indian Market for solutions and service
reaching out to end users seen an upward trend. The penetration of
mobile networks and smart phones like Apple,iPhone and Android based
phones help change the GIS usage across the world. The future of GIS is
going to move our Enterprise space to retail / customers space during
the coming years. With Cloud computing gaining momentum this will be a
reality soon.
In view of the foregoing, the Company is making all efforts to improve
its bottom line in the ensuing year.
FIXED DEPOSITS
The Company did not accept any fixed deposits during the year within
the meaning of Section 58-A of the Companies Act, 1956 and the
Companies (Acceptance of Deposits) Rules, 1975.
GENERAL
The Management Discussion and Analysis Report reviews the operations of
the Company in more detail and forms a part of this Annual Report.
GROUP STRUCTURE
As required under clause 3(1)(e) of the Securities and Exchange Board
of India (Substantial Acquisition of Shares and Takeovers) Regulations,
1997 persons constituting Group (within the meaning and as defined in
the Monopolies and Restrictive Trade Practices Act,1969) for the
purpose of availing exemption from applicability of the provisions of
Regulation 10 to 12 of the aforesaid SEBI Regulations are given in
Annexure A attached herewith and forms a part of the Report.
CORPORATE GOVERNANCE
As per the Listing Agreement with the stock exchange(s), the Company
has complied with the requirements of the Corporate Governance
provisions of the Agreement. A report on Corporate Governance is
attached with this report.
HUMAN RESOURCES
The Company has a vibrant work atmosphere and also has a dedicated team
of skilled work force who has been able to mitigate the challenges of
the economic downturn. Over the years the Company has built up a
dedicated workforce with team spirit and they are motivated to face any
challenges and achieve the desired targets to improve the operations of
the Company.
DIRECTORS
In accordance with the provisions of the Companies Act, 1956 and the
Company's Articles of Association, Mr. Viswanath Tadimety and Mr. Anant
Rajwade, Directors of the Company retire by rotation at the ensuing
Annual General Meeting. Mr. Viswanath Tadimety offers himself for
re-appointment. Mr. Anant Rajwade has expressed his inability to offer
himself for re-appointment. The Company places on record the enormous
support and guidance provided by Mr. Anant Rajwade over the years. The
Chairman is personally grateful for Mr. Rajwade's counsel, consistency
and professionalism in conducting CyberTech corporate affairs.
During the year Mr. C. N. Rao, Executive Director of the Company
tendered his resignation on October 8, 2010. The Board inducted Mr.
Radhakrishna Pingali as Whole Time Director on October 11, 2010. Mr.
Pingali tendered his resignation on February 11, 2011 for health
reasons. The Directors wish to place on record their appreciation for
the services rendered by Mr. C. N. Rao and Mr. Radhakrishna Pingali
during their tenure as Executive Director/Whole Time Director. The
Board then appointed Dr. Tapan Kumar Mukhopadhyay as Whole Time
Director of the Company on March 15, 2011 subject to the approval of
the shareholders in the ensuing Annual General Meeting.
Also during the year under review, the Board of Directors appointed Mr.
Sudhir Joshi and Dr. Shreepad Karmalkar as Additional Directors on
September 30, 2010 to hold their offices as such until the conclusion
of the ensuing Annual General Meeting, unless they are reappointed by
the members in the Annual General Meeting. Mr. Sudhir Joshi and Dr.
Shreepad Karmalkar have given their consent to act as Directors, if
appointed by the members.
Necessary resolutions for appointment of Mr. Sudhir Joshi and Dr.
Shreepad Karmalkar as directors have been included in the Notice
convening the ensuing Annual General Meeting.
During the year Mr. Sudhir Joshi was nominated by the Board as Director
on the Board of CyberTech Systems and Software Inc, USA, which is a
wholly owned subsidiary of our Company.
None of the Directors of the Company is disqualified for being
appointed as Director as specified in Section 274(1) (g) of the
Companies Act, 1956 as amended by the Companies (Amendment) Act, 2000.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to the requirement under Section 217(2AA) of the Companies
Act, 1956 with respect to Directors' Responsibilities Statement, it is
hereby confirmed that:
i) in the preparation of the annual accounts for the financial year
ended March 31, 2011, the applicable accounting standards were followed
and proper explanation relating to material departures was given.
ii) the Directors selected such accounting policies and applied them
consistently and made judgments and estimates that are reasonable and
prudent so as to give a true and fair view of the state of affairs of
the Company at the end of the financial year and of the profit of the
Company for that period.
iii) the Directors took 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 frauds and other irregularities.
iv) the Directors have prepared the annual accounts on a going concern
basis.
AUDITORS
M/s. Lodha & Co., Chartered Accountants, Mumbai, the Statutory
Auditors, hold office until the conclusion of the ensuing Annual
General Meeting and are recommended by the Board for re-appointment.
The Company has received a certificate from the Auditors to the effect
that their re-appointment, if made, will be within the limits as
stipulated under Section 224(1B) of the Companies Act, 1956. The
members are requested to consider appointment of M/s. Lodha & Co. as
Statutory Auditors at the ensuing Annual General Meeting.
The comments made by the Auditors in their report are self-explanatory
and do not call for further explanation.
PARTICULARS OF EMPLOYEES
There were no employees in receipt of remuneration during the year
requiring disclosure under section 217 (2A) of the Companies Act, 1956.
ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNINGS AND OUTGO
Information with respect to conservation of energy, technology
absorption, foreign exchange earnings and outgo, as required to be
disclosed pursuant to 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 are set out in the Annexure B to this
Report.
EMPLOYEES STOCK OPTION PLAN
The position of ESOP's granted and exercised during the year is as
under:
Number of options granted During the year under review
1,025,000 options were granted.
Pricing formula Not Applicable
Options vested A total of 187,500 options
vested during the year.
Options exercised and number of
shares No grantee exercised options
arising out of such exercise: during the year.
Options lapsed During the year 69,000 options
lapsed.
Variations in terms of options There was no variation in the
terms of options.
Money realized on exercise of
options Nil
Total Number of options in force Total number of 2,046,750 options
were in force as on March 31,
2011.
ESOPs granted to senior For the year ended March 31,
managerial personnel 2011, the Company granted
200,000 options to Senior
Managerial Personnel.
Further for the year ended March
31, 2011, the Company did not
grant more than 1% of the issued
capital of the Company to any
one person as of the date of
grant.
Method of Accounting
The Company has elected to use the intrinsic value method to account
for the compensation cost of stock options to employees of the Company,
Intrinsic value is the amount by which the quoted market price of the
underlying share as on the date of grant exceeds the exercise price of
the option.
Summary of the options outstanding under the Employees Stock Option
Plan(ESOP):
As at March 31, As at March 31,
2011 2010
Options Weighted Options Weighted
Average Average
Exercise Exercise
Price Price
(Rs.) (Rs.)
Options outstanding at
beginning of the year 1,090,750 12.86 1,102,300 13.03
Granted during the year 1,025,000 16.69 200,000 12.95
Exercised during the year 0 0 0 0
Forfeited/lapsed during
the year 69,000 13.74 211,550 17.16
Options outstanding at
end of year 2,046,750 14.96 1,090,750 12.86
Vested options pending
exercise 761,750 12.91 597,000 12.78
The following summarizes information about stock options outstanding:
As at March 31, 2011
Range of Exercise Number of Shares Weighted average Weighted
price arising out remaining life average
of options (Years) Exercise
Price
(Rs.)
Rs. 7.50 to Rs.15 899,250 4 11.92
Rs. 15 to Rs. 23 1,147,500 6 17.33
As at March 31, 2010
Range of Exercise Number of Shares Weighted average Weighted
price arising out remaining life average
of options (Years) Exercise
Price
(Rs.)
Rs. 7.50 to Rs.15 883,250 4 11.59
Rs. 15 to Rs. 23 207,500 7 18.28
Fair Value methodology for the option:
The fair value of options used to compute net income and earnings per
equity share have been estimated on the dates of each grant within the
range of Rs. 7.55 to Rs. 22.90 using the Black-Scholes pricing model.
The Company estimated the volatility based on the historical share
prices. The various assumptions considered in the pricing model for the
options granted under ESOP are:
As at March 31, As at March 31,
2011 2010
Dividend yield 0-10% 0-10%
Expected volatility 10%-20% 10%-20%
Risk-free interest rate 6.46% - 6.65% 6.46% - 6.65%
Expected life of option 0 - 7 yrs 0 - 7 yrs
Impact of Fair value method on Net Profit and EPS
Had the compensation cost for the Company's Stock Option Plan
outstanding been determined based on the fair value approach, the
Company's net profit income and earnings per share would have been, as
indicated below:
As at March 31, As at March 31,
2011 (Rs.) 2010 (Rs.)
Profit attributable to Equity
Shareholders 47,600,129 43,848,149
Add: Stock-based employee
compensation expense included
in net income - -
Less: Stock-based compensation
expense determined under fair
value 369,015 364,044
based method
Net Profit 47,231,114 43,484,105
Basic and diluted earning per
share (as reported) 1.80 1.66
Basic and diluted earning per
share (under fair value
method) 1.78 1.65
ACKNOWLEDGEMENT
Your Directors wish to place on record their appreciation and sincere
gratitude to the various departments of the Central and State
Government, Company's Bankers, clients, media and business constituents
for their valuable assistance and support. The Directors also
acknowledge the continued support received from investors and
shareholders and the confidence reposed by them. The Directors also
record their appreciation for the sincere and dedicated services
rendered by all the employees of the Company.
For and on behalf of the Board of Directors
Viswanath Tadimety
Chairman
Place Thane
sDate August 12, 2011
Mar 31, 2010
The Directors are pleased to present the Annual Report together with
the Audited Statements of Accounts for the year ended March 31, 2010.
This report includes both stand alone results for the Company
(CyberTech Systems and Software Ltd.) as well as consolidated results
for the Company and its subsidiary in the USA & Joint Venture in
Bahrain
FINANCIAL RESULTS
(Rs. in million)
Stand alone Consolidated
2009-10 2008-09 2009-10 2008-09
Gross Revenue 207.40 216.97 509.26 744.14
Profit before Interest &
Depreciation 80.03 96.01 51.47 71.99
Interest 0.02 0.15 0.03 0.28
Depreciation 18.05 17.40 23.54 29.35
Profit/(Loss) before tax 61.96 78.46 27.90 42.36
Provision for tax (18.11) (9.84) (18.11) (9.84)
Income Tax adjustments for earlier
years -credit - - (8.88) (4.01)
Profit/(Loss) after tax 43.85 68.62 18.67 36.53
Less Minority Interest (Loss) - - (2.85) (2.79)
Accumulated profit b/f from
previous year 77.31 39.66 64.89 56.54
Provision for Dividend(includes
dividend tax of Rs. 4.50 million) (30.97) (30.97) (30.97) (30.97)
Balance to be carried forward 90.19 77.31 55.44 64.89
DIVIDEND
Your Directors have the pleasure of recommending a dividend of Rupee 1
per share for the year under review.
REVIEW OF THE COMPANYS STAND ALONE PERFORMANCE
The Companys primary focus continues to be delivering offshore
development and support services in the Companys core technology areas
as well as providing geospatial solutions to domestic customers.
Additionally, the Company continued to receive substantial income from
certain real estate rentals and interest income on deposits.
The Companys performance for the year being reported on is as follows:
à The year 2009-10 continued to be challenging for the Company. Total
revenue during the year 2009-10 amounted to Rs. 207.40 million as
compared to Rs 216.97 million during the previous year. Total revenue
is comprised of revenue from operations and other income, as follows.
* Revenue from operations for the year ended March 31, 2010 amounted to
Rs. 124.35 million vs. Rs. 127.49 million for the previous year.
Operating revenue includes revenues from software support and
development activities. Revenue was marginally lower as a result of
adverse conditions in the US
* Other Income amounted to Rs. 83.05 million as against Rs. 89.48
million. Other income is minimally lower on account of the short period
vacancy of properties. In general property rentals are stable in the
current market.
* Profit before interest, depreciation and tax amounted to Rs. 80.03
million against Rs. 96.01 million in the previous year.
The Company has started to focus on domestic market sales of geospatial
solutions and is developing alliance relationships with key vendors in
this area. This is intended to offset the continued turmoil in offshore
markets and reduced spending among customers. The Company has obtained
its first order in the domestic market.
The Company maintains significant financial resources and carries no
debt. During the year , a strategic investor acquired a greater than
10% interest in the Company, which is expected to strengthen the
alliance with them.
REVIEW OF CONSOLIDATED PERFORMANCE
On a Consolidated Basis, the Company reported total revenue of
Rs.509.26 million during the year as compared to Rs 744.14 million
during the previous year.
Profit after tax for the year ended March 31, 2010 amounted to Rs.
18.67 million compared to Rs. 36.53 million in the previous year.
The consolidated group continues to focus on delivering services to its
identified market segments in its core technology areas as well as
providing geospatial solutions to domestic customers. Its sales and
delivery organizations have been aligned to an offshore centric model,
while providing for solution sales and delivery in the domestic market.
CONSOLIDATED FINANCIAL STATEMENTS
The consolidated financial statements of the Company, including its
wholly owned US subsidiary and 55% owned joint venture in Bahrain, are
prepared in accordance with Accounting Standard 21 (Consolidation of
Accounts) as prescribed by the Institute of Chartered Accountants of
India and in compliance with the terms of the listing agreement with
the Stock Exchanges. Together, these comprise part of the Annual Report
and Accounts. The summarized consolidated results are given alongside
the financial results of your Company and are discussed in the
accompanying Management Discussion and Analysis of Consolidated
Results.
WHOLLY OWNED SUBSIDIARY IN USA
The Company owns a 100% interest in CyberTech Systems and Software,
Inc. incorporated on June 12, 2003 in the state of Delaware in the
United States of America, whose results are consolidated herein. This
subsidiary serves as the sales front end for a majority of the offshore
revenue recognized by the Company and is instrumental to creating and
managing the alliances that lead to the bulk of the Companys
activities.
CyberTech Systems and Software, Inc. (USA) reported an operating loss
of Rs. 23.66 million before interest, depreciation and tax on revenue
of Rs. 390.29 million. The net loss after tax aggregated Rs.19.60
million. The Company has been severely impacted by the worldwide
slowdown in discretionary IT spending which has impacted several of our
targeted sectors.
JOINT VENTURE IN THE MIDDLE EAST
The Company is majority owner of CyberTech Middle East W.L.L., a joint
venture company formed in Bahrain to exploit opportunities in the
Middle East. Pursuant to the agreement entered into with Gold Coastway
Limited., CyberTech Middle East was established in August 2008.
CyberTech Middle East W.L.L. has been able to establish its credentials
and has been successful in starting to slowly develop this business
locally. It is now identifying other business opportunities in the
Middle East in conjunction with several of our business partners.
The company reported an operating loss of Rs. 6.33 million on revenue
of Rs. 34.35 million during the year.
SUBSIDIARY COMPANIES ACCOUNTS
The statement required pursuant to section 212 of the Companies Act,
1956, containing details of the subsidiaries, CyberTech Systems &
Software Inc, USA, and CyberTech Middle East WLL is attached hereto.
INCREASE OF AUTHORISED CAPITAL
The existing issued capital of the Company is Rs. 26.47 crores out of
the authorised capital of Rs. 30 crores. The company proposes to
increase the authorised capital to Rs.50 crores to meet any additional
requirement of Capital in near future for expansion of the business of
the Company. Necessary resolutions for the increase in authorised
capital have been included in the notice convening the Annual General
Meeting.
FIXED DEPOSITS
The Company did not accept any fixed deposits during the year within
the meaning of Section 58-A of the Companies Act, 1956 and the
Companies (Acceptance of Deposits) Rules, 1975.
GENERAL
The Management Discussion and Analysis Report reviews the operations of
the Company in more detail and forms a part of this Annual Report.
CORPORATE GOVERNANCE
As per the Listing Agreement with the stock exchange(s), the Company
has complied with the requirements of the Corporate Governance
provisions of the Agreement. A report on Corporate Governance is
attached to this report.
DIRECTORS
In accordance with the provisions of the Companies Act, 1956 and the
Companys Articles of Association, Mr. Arun Shah and Mr. Steven Jeske,
Directors of the Company retire by rotation at the ensuing Annual
General Meeting. Mr.Steven Jeske, being eligible, offers himself for
re-appointment. Mr. Arun Shah has expressed his inability to offer
himself for re-appointment in view of his other commitments. The
Directors wish to place on record their appreciation of the services
rendered by Mr. Arun Shah during his tenure as a Director of the
Company.
The tenure of Mr. C. N. Rao as Executive Director expires on September
30, 2010. The Directors propose the re-appointment of Mr. C. N. Rao as
Executive Director for a period of one year effective October 1, 2010.
Necessary resolutions for appointment / re-appointment of the aforesaid
directors have been included in the Notice convening the ensuing Annual
General Meeting.
None of the directors of the Company is disqualified for being
appointed as director as specified in Section 274(1) (g) of the
Companies Act, 1956 as amended by the Companies (Amendment) Act, 2000.
DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to the requirement under Section 217(2AA) of the Companies
Act, 1956 with respect to Directors Responsibilities Statement, it is
hereby confirmed that:
i) in the preparation of the annual accounts for the financial year
ended March 31, 2010, the applicable accounting standards were followed
and proper explanation relating to material departures given.
ii) the Directors selected such accounting policies and applied them
consistently and made judgments and estimates that are reasonable and
prudent so as to give a true and fair view of the state of affairs of
the Company at the end of the financial year and of the profit of the
Company for that period.
iii) the Directors took 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 frauds and other irregularities.
iv) the Directors have prepared the annual accounts on a going concern
basis.
AUDITORS
M/s. Lodha & Co., Chartered Accountants, Mumbai, the Statutory
Auditors, hold office until the conclusion of the ensuing Annual
General Meeting and are recommended for re-appointment. The Company has
received a certificate from the Auditors to the effect that their re-
appointment, if made, will be within the limits as stipulated under
Section 224(1B) of the Companies Act, 1956. The members are requested
to consider appointment of M/s. Lodha & Co. as Statutory Auditors at
the ensuing Annual General Meeting.
The comments made by the Auditors in their report are self-explanatory
and do not call for further explanation.
INFORMATION PURSUANT TO SECTION 217 OF THE COMPANIES ACT, 1956
There were no employees in receipt of remuneration during the year
requiring disclosure under section 217 (2A) of the Companies Act, 1956.
ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNINGS AND OUTGO
Information with respect to conservation of energy, technology
absorption, foreign exchange earnings and outgo, as required to be
disclosed pursuant to 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 are set out in the Annexure to this
Report.
EMPLOYEES STOCK OPTION PLAN
The position of ESOPs granted and exercised during the year is as
under:
Number of options granted: During the year under review
200,000 options were granted.
Pricing formula : Not Applicable
Options vested : A total of 71,750 options vested
during the year.
Options exercised and number of
shares No grantee exercised options
during the year.
arising out of such exercise:
Options lapsed : During the year 211,550 options
lapsed out of options granted.
Variations in terms of options: There was no variation in the
terms of options.
Money realized on exercise of options : Nil
Total Number of options in force : Total number of 1,090,750
options were in force as on
March 31, 2010.
ESOPs granted to senior managerial
personnel: For the year ended March
31, 2010 the Company granted
2,00,000 options to Senior
Managerial Personnel.Further
for the year ended March 31,
2010 the Company did not grant
more than 1% of the issued
capital of the Company to any
one person as of the date of
grant.
Method of Accounting
The Company has elected to use the intrinsic value method to account
for the compensation cost of stock options to employees of the Company,
Intrinsic value is the amount by which the quoted market price of the
underlying share as on the date of grant exceeds the exercise price of
the option.
Summary of the options outstanding under the Employees Stock Option
Plan (ESOP):
As at March 31, 2010 As at March 31, 2009
Options Weighted Average Options Weighted
Average
Exercise Price
(Rs.) Exercise
Price (Rs.)
Options outstanding at
beginning of the year 1,102,300 13.03 968,260 11.93
Granted during the year 200,000 12.95 810,000 17.95
Exercised during the year - - - -
Forfeited/lapsed during
the year 211,550 17.16 675,960 16.27
Options outstanding at
end of year 1,090,750 12.86 1,102,300 13.67
Vested options pending
exercise 524,470 11.98 659,800 11.77
The following summarizes information about stock options outstanding:
As at March 31, 2010
Range of Exercise Number of
Price shares Weighted average Weighted average
arising remaining life Exercise Price
out of (Years) ( Rs.)
options
Rs.7.50 to Rs.15.00 883,250 4 11.59
Rs. 15.00 to Rs. 23.00 207,500 7 18.28
As at March 31, 2009
Range of Exercise Number of
Price shares Weighted average Weighted average
arising remaining life Exercise Price
out of (Years) ( Rs.)
options
Rs.7.50 to Rs.15.00 708,550 3 11.22
Rs. 15.00 to Rs. 23.00 393,750 7 18.08
Fair Value methodology for the option:
The fair value of options used to compute net income and earnings per
equity share have been estimated on the dates of each grant within the
range of Rs.7.55 to Rs.22.90 using the Black-Scholes pricing model. The
Company estimated the volatility based on the historical share prices.
The various assumptions considered in the pricing model for the options
granted under ESOP are:
As at March 31, 2010 As at March 31, 2009
Dividend yield 0 - 10% 0 - 10%
Expected volatility 10% - 20% 10% - 20%
Risk-free interest rate 6.57% - 6.65% 6.46% - 6.65%
Expected life of option 0 - 7 yrs 0 - 7 yrs
Impact of Fair value method on Net Profit and EPS
Had the compensation cost for the Companys Stock Option Plan
outstanding been determined based on the fair value approach, the
Companys net profit income and earnings per share would have been, as
indicated below:
As at March 31, 2010 As at March 31, 2009
Profit attributable to
Equity Shareholders 43,848,149 68,620,853
Add: Stock-based employee
compensation expense included - -
in net income
Less: Stock-based compensation
expense determined under fair
value 364,044 288,222
based method
Net Profit 43,484,105 68,332,631
Basic and diluted earning per
share (as reported) 1.66 2.59
Basic and diluted earning per
share (under fair value method) 1.65 2.58
ACKNOWLEDGEMENT
Your Directors wish to place on record their appreciation and sincere
gratitude to the various departments of the Central and State
Government, Companys Bankers, clients, media and business constituents
for their valuable assistance and support. The Directors also
acknowledge the continued support received from investors and
shareholders and the confidence reposed by them. The Directors record
their appreciation for the sincere and dedicated services rendered by
all the employees of the Company.
For and on behalf of the Board of Directors
Viswanath Tadimety
Chairman
Place : Thane.
Date : August 4, 2010.