BOARD'S REPORT THE SHAREHOLDER, COMPUCOM SOFTWARE LIMITED Your Directors have immense pleasure in presenting their 21st Annual Report on the business and operations of the Company together with Audited Financial Accounts for the year ended on March 31, 2015. Results of Operations: Total revenues earned during the year amounted to Rs. 5,519.08Lacs compared to that of Rs. 7,385.92Lacs in the previous financial year. During the year under review, the income from operations was Rs. 5,251.17 Lacs compared to Rs. 7,050.36 Lacs in the previous financial year. This reflects decrease of Rs. 1,799.19 Lacs, which is mainly due to the decrease of income from Learning Solution business segment. The profit before tax has decreased from Rs. 1,577.75 Lacs in the previous financial year to Rs. 1,020.02Lacs in the current financial year. The Operating Profit during this period is Rs. 2,942.98 Lacs as compared to Rs. 3417.31 Lacs in the previous financial year. As required by AS- 21, Consolidated Financial Statements are provided in the later section of the Annual Report. Business Operations: (1) Software & E-Governance Services: During the year, the Company focused on the areas where higher margin was available with low risk factors. The revenue generated from this segment during the Financial Year 2014-15 was Rs.456.51 Lacs as against Rs. 596.35 Lacs during the previous financial year. This reflects decrease of 23.45 % i.e. Rs. 139.84 Lacs. Profit earned from this segment amount to Rs. 159.71 Lacs as compared to that of Rs. 247.47 Lacs during the previous Financial Year, which has resulted in decrease of 35.46% i.e. Rs. 87.76 Lacs. (2) Learning Solutions: During this year revenue from this segment is amounted to Rs. 4,605.43 Lacs against the previous year revenue of Rs. 6251.23 Lacs which shows a decrease in revenue by 26.33% i.e. Rs.1,645.80Lacs. Learning Solution Segment mainly comprises ICT Phase II, ICT Phase III, ICT Bihar, CALP I, CALP II, ComputerAided Training Programme and other projects. The Company has covered total 4,595Govt. Schools and over 2 million learners under its educational Umbrella so far. These PPP Projects could not have been a success without the cooperation extended by Employees, Business Associates, Vendors and Government officials. The Company has successfully completed the ICT-I Project & recently the Company has successfully completed another education project ICT Phase-II involving 1550 Govt. Higher Secondary Schools in August 2015. Apart from this the other projects that are running successfully are CALP-I project, worth Rs.10.68 cores for imparting training in 836 Govt. schools of Rajasthan, CALP-II worth Rs.10.41 Crore covers 836 Govt. schools of Rajasthan. Most of these projects are in form of IT Infrastructure development at school levels. The Company has been awarded one more Project, ICT Project Phase III worth Rs. 158.50 Crore, for 1,373 Govt. Schools of Rajasthan. It has been commissioned in the month of Feb. 2014 and will be a five (5) year project onBOOT model. The Company has massive plans for capturing the advantage of Indian education expenditure planned through Govt. of India promoted PPP models across India fuelled by Sarva Shiksha Abhiyan (SSA), Rashtriya Madhyamik Shiksha Abhiyan (RMSA) and skill development initiatives. Company is also planning to leverage in-house software development and satellite based technology skills for expansion in school and coaching Business. (3) Wind Power Generation: The Company had set up two wind power generation plants of 1.20 MW each at Jaisalmer (Rajasthan), two at Sikar (Rajasthan) of 1.20 MW each& One Plant at Krishna (Andhra Pradesh) of 0.8 MW. Total wind power generation capacity is 3.2 MW. The operation and maintenance of all these wind power project has been out-sourced to M/s Wind World India (previously known as Enercon India Limited). During the year revenue generated from this segment amounted to Rs. 189.23 Lacs as compared to Rs. 202.78 Lacs during the previous year ended on March 31, 2014. Which shows a decrease in the revenue by6.68%i.e. Rs. 13.55 Lacs due to lower generation of units.Profit earned from this segment amount to Rs. 61.99 Lacs as compared to that of Rs. 94.00 Lacs during the previous Financial Year, which has resulted an decrease of 34.05% i.e. Rs. 32.01 Lacs. (4) Treasury Activities: The revenue generated from this segment during the Financial Year 2014-15 was Rs. 267.91 Lacs as against Rs. 335.56Lacs during the last financial year. During the year, the revenue generated from treasury operations has decreased by 20.16% i.e. Rs. 67.65 Lacs. During the year most of the funds were invested in FDRs, where returns are lower but safe in comparison to equity-oriented funds. The following chart depicts revenue generated from operation for the year ended March 31, 2015 Details of Subsidiary and associates Companies The Company has two subsidiary Companies and one associate Company: Pursuant to provisions of Section 129(3) of the Companies Act, 2013 a statement containing salient features of the financial statement of the Company's subsidiaries and associate in Form AOC-1 is provided in the later section of the Annual Report of the Company. Pursuant to the provisions of Section 136 of the Companies Act, 2013 the financial statements of the Company, consolidated financial statements along with relevant documents and separate audited accounts in respect of subsidiaries, are also available on the website of the Company. During the year, operations of following two subsidiaries were reviewed. (A) ITneer, Inc. is a wholly owned subsidiary Company of Compucom Software Limited. It has earned total revenue of US$ 9,57,720 during the financial year 2014-15 as compared to US$ 9,76,721 in the previous financial year. This reflects a decrease of approx 1.95% i.e. US$19,001. The Company has declared profit of US$ 22,547 as compared to the loss of US$ 14,280 in the previous financial year. The Company is operating out of its own premises in Atlanta, USA. It is headed by Promoter Director Mr. Ajay Kumar Surana. The copy of the audited accounts, together with the independent auditor's report, is provided in a separate section of this Annual Report. (B) CSL Infomedia Pvt. Ltd. is another subsidiary Company of Compucom Software Limited. It has earned total revenue of Rs. 412.92 Lacs during the financial year 2014-15 as compared to Rs. 477.45 Lacs in the previous financial year which shows a decrease of 13.52% i.e. Rs. 64.53 Lacs. The Company has declared loss of Rs.34.07 Lacs as compared to the loss of Rs. 81.00 Lacs in the previous financial year. The Company is mainly operating in multimedia, Content Development and Education TV Segment. The copy of the audited accounts together with the independent Auditors Report is provided in a separate section of this Annual Report. The company has two TV Channel one "Jan TV", Satellite TV channel and "Jan TV PLUS" (an Infotainment Channel).Currently it is available on various cable networks across India and also available live on jantvplus. in. Dividend Keeping the continuous track record of rewarding its shareholders, your Directors are pleased to recommend a dividend @5% i.e. Rs. 0.10/ - per Equity share of Rs. 2/- each for the Financial Year 2014-15, subject to approval of the shareholders at the ensuing Annual General Meeting. Directors' Responsibility Statement Pursuant to Section 134 (5) of the Companies Act, 2013, Directors state therein that: (a) In the preparation of the annual accounts, the applicable Accounting Standards have been followed along with proper explanations and disclosures relating to material departures. (b) The Directors have selected relevant accounting policies and applied them consistently and have made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as on March 31, 2015 and of the profit of the Company for the period. (c) The Directors had 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 fraud and other irregularities. (d) The annual accounts have been prepared on a going concern basis. (e) They have laid down internal financial control to be followed by the Company and such internal financial controls are adequate and operating effectively. (f) They have devised proper system to ensure compliance with the provisions of all applicable laws and that such system were adequate and operating effectively. Fixed Deposits/Deposits from Public During the financial year 2014-15, your Company has not accepted any public deposits nor renewed any fixed deposit, falling within the definition of Section 73, 74 of the Companies Act, 2013. Listing of Shares Your Company's shares are listed at Bombay Stock Exchange, National Stock Exchange and Calcutta Stock Exchange Limited and the listing fee for the year 2015-16 has been duly paid. Number of Meetings of Board Four (4) meetings of Board were held during this financial year. The intervening gap between any two meetings was within the period prescribed by the Companies Act, 2013. Policy on Director's appointment and remuneration The current policy is to have an appropriate mix of executive and independent directors to maintain the independence of the Board, and separate its functions of governance and management. As on March 31, 2015, the Board consists of 6 members, one of whom is executive or whole time director, and three are independent directors. The policy of the Company on director's appointment and remuneration, including criteria for determining qualifications, positive attributes, independence of a director and other matters provided under Sub-section (3) of Section 178 of the Companies Act, 2013, adopted by the Board, is as Annexure I of the Board's report. We affirm that the remuneration paid to the directors is as per the terms laid out in the nomination and remuneration policy of the Company. Appointments:- Mr. Ramesh Chand Jain was appointed as an Additional Director on the Board of the company w.e.f. 29th May, 2015, and subject to the approval of the members at the ensuing Annual General Meeting his appointment is being regularized as Independent Non Executive Director on the terms and conditions as mentioned in the resolution in the Notice. The Company has received requisite notice in writing from a member proposing his candidature for appointment as an Independent Director. He meets with the criteria of independence as prescribed both under sub-section (6) of Section 149 of the Companies Act, 2013 and under Clause 49 of the Listing Agreement with the Stock Exchanges. Mrs. Trishla Rampuria was appointed as an Additional Director on the Board of the company w.e.f. 12th August, 2015, and subject to the approval of the members at the ensuing Annual General Meeting her appointment is being regularized as Non-Independent and Non Executive Director on the terms and conditions as mentioned in the resolution in the Notice. Vigil Mechanism The Company has already established a vigil mechanism policy as per clause 49 of Listing Agreement and also placed on the website of company and the policy is annexed in the Board's report as Annexure II. Sexual Harassment During the year under review, there were no cases filed pursuant to the sexual harassment of women at work place (prevention, prohibition and redressal) Act, 2013 Declaration of Independence by Directors The Independent Non-Executive Directors of the Company, viz. Mr. Rajendra Prasad Udawat, Dr. Anjila Saxena, Mr. Stephen Carl Viehman and Mr. Ramesh Chand Jain have affirmed that they continue to meet all the requirements specified under sub-section (6) of section 149 of Companies Act, 2013 in respect of their position as an "Independent Director" of Compucom Software Limited. 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 annual evaluations 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 evaluation process has been explained in the Corporate Governance report section in this Annual Report. The Board approved the evaluation results as collated by the nomination and remuneration committee. Training of 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 executive directors / senior managerial personnel make presentations to the inductees about the company's strategy, operations, product and service offerings, markets, software delivery, organization structure, finance, human resources, technology, quality, facility and risk management. The Company has a program to help its directors improve their expertise in governance held by well -known business schools in any part of the world. Further, at the time of appointment of an independent director, the Company issues a formal letter of appointment outlining his/her role, function, duties and responsibilities as a director. Corporate Social Responsibility Committee As required under Section 135 of Companies Act, 2013 during the year, the Board of Directors has constituted the Corporate Social Responsibility(CSR) Committee for formulating and recommending to Board, a Corporate Social Responsibility policy (CSR Policy) which shall indicate the activities to be undertaken by the Company as specified in Schedule VII of the Companies Act, 2013, to recommend the amount of expenditure to be incurred on the activities and to monitor the Corporate Social Responsibility Policy of the Company from time to time. • The brief outline of the Corporate Social Responsibility (CSR) Policy of the Company and the initiatives undertaken by the Company on CSR activities during the year are set out in Annexure III of this report in the prescribed format of the Companies (Corporate Social Responsibility Policy) Rules, 2014. The Policy is available on the website of the Company. Internal Financial Control Systems The Company has put in place an adequate system of internal control commensurate with its size and nature of business. These systems provide a reasonable assurance in respect of providing financial and operational information, complying with applicable statutes, safeguarding of assets of the Company and ensuring compliance with corporate policies. The Audit Committee reviews adherence to internal control systems and internal audit reports. Risk Management The Board of the Company has formed a risk management committee to frame, implement and monitor the risk management plan for the Company. The committee is responsible for reviewing the risk management plan and ensuring its effectiveness. The audit committee has additional oversight in the area of financial risk and controls. Major risk identified by the businesses and functions are systematically addressed through mitigating action on a continuing basis. The development and implementation of risk management policy has been covered in the management discussion and analysis, which forms part of this report. Statutory Auditors and Auditors' Report Pursuant to the provisions of the Section 139 and all other applicable provisions, if any, of the Companies Act, 2013 and the rules framed thereunder, as amended from time to time, the Company hereby ratifies the appointment of M/s S. Misra & Associates, Chartered Accountants (Firm Registration No. 004972C), as Auditors of the Company to hold office from the conclusion of this Annual General Meeting till the conclusion of Twenty-Second AGM of the Company to be held in the year 2016 at such remuneration plus service tax as may be mutually agreed between the Board of Directors of the Company and the Auditors." There are no reservations, qualifications or adverse remarks contained in the auditor's Report attached to the balance sheet as at 31st March, 2015.Information referred in the Auditor's Report isself-explanatory and does notcall for any further comments. Secretarial Audit Report As per Section 204 of Companies Act, 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, every Listed Company is required to appoint Secretarial Auditor to carry out Secretarial Audit of the Company. In consonance with the requirements of Section 204 of the Companies Act, 2013 and rules made thereunder,M/s V. M. & Associates, Company Secretaries in Practice, Jaipur, was appointed to conduct the secretarial audit of the Company for the financial year 2014-15. A Secretarial Audit Report issued by M/s V. M. & Associates, Company Secretaries, in respect of the secretarial audit of the Company for the financial year ended 31st March, 2015, is given in Annexure IV to this Report. The Secretarial Audit report for the financial year ended 31st March, 2015 is self explanatory and does not call for any further comments. The Board has re-appointed M/s V. M. & Associates, Company Secretaries in Practice, Jaipur as Secretarial Auditor of the Company to carry out secretarial audit of the Company for the financial year 2015-16. Internal Audit Report As per Section 138 of Companies Act, 2013 read with Companies (Accounts) Rules, 2014, every Listed Company is required to appoint Internal Auditor to carry out Internal Audit of the Company. In consonance with the requirements of Section 138 of the Companies Act, 2013 and rules made there under, Mr. Prateek Agarwal, Chartered Accountant, Jaipur, was appointed to conduct the internal audit of the Company for the financial year 2014-15. The Internal Audit Report issued by Mr. Prateek Agarwal, Chartered Accountant, in respect of the internal audit of the Company for the financial year ended 31st March, 2015 is self explanatory and does not call for any further comments. The Board has appointed Mr. Girish Kumar Gupta, Chartered Accountant, Jaipur as an Internal Auditor of the Company to carry out internal audit of the Company for the financial year 2015-16. Corporate Governance Report and Management Discussion and Analysis Report As per the Clause 49 of the Listing Agreement entered into with the Stock Exchanges, Corporate Governance Report with a certificate from auditors of the Company and Management Discussion and Analysis Report are attached which forms part of this report. Conservation of Energy, Research & Development, Technology Absorption, Foreign Exchange and Outgo Disclosure under Section 134 (3)(m) of Companies Act, 2013read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 are given in the Annexure V. Particulars of Loan, guarantees and investment The particulars of loan, guarantees and investments have been disclosed in the financial statements. Transactions with related parties Information on transactions with related parties pursuant to Section 134(3)(h) of the Act read with rule 8(2) of the Companies (Accounts) Rules, 2014 are given in Annexure VI in Form AOC-2 and the same forms part of this report. Extract of Annual Return In accordance with Section 134 (3) (a) of the Companies Act, 2013,an extract of annual return is given in Annexure VII in the prescribed Form MGT-9, which forms part of this report. Particulars of Employees (A) None of the employees of the company was in receipt of the remuneration exceeding the limits prescribed u/s 197 (12) read with rule 5, sub-rule 2 of The Companies (Appointment and Remuneration of Managerial Personnel) of the Companies Act, 2013 during the year under review. (B) The ratio of the remuneration of each director to the median employee's remuneration and other details in terms of sub-section 12 of Section 197 of the Companies Act, 2013 read with Rule 5(1) of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are forming part of this report as Annexure-VIII . Transfer of Unclaimed Dividend to Investor Education and Protection Fund (IEPF) The Company has transferred a sum of Rs. 3,96,445/- (Rupees Three Lakhs Ninety Six Thousand Four Hundred Forty Five only) during the year to the Investor Education and Protection Fund (IEPF) established by the Central Government under Section 125 the Companies Act, 2013 The said amount represents unclaimed dividend pertaining to financial year 2006-07 (Final) and 2007-08 (Interim) which was lying in unpaid dividend account of the Company for a period of seven years. Human Resource Management Your Company draws its strength from a highly engaged and motivated workforce, whose collective passion and commitment has helped the organization scale new heights. Human Resource policies and processes have evolved to stay relevant to the changing demographics, enhance organizational agility and remain compliant with the changing regulatory requirements. The company has created a favorable work-environment that encourages innovation and nurturing of commercial and managerial talents in its operations. Trade Relations The Company maintained healthy, cordial and harmonious Industrial relations at all levels. The Directors wish to place on record their appreciation for the valuable contribution by the employees of the Company. Quality Assurance Sustained commitment to the highest levels of quality, best in class service management and robust information security practices helped the Company attain the following milestone during the year. The Company is an ISO 9001:2000 organization, certified by Det Norske Veritas (DNV) since 1998. These standards enable us to identify risks at the initial planning stage of the project. The Company firmly believes in the pursuits of excellence to compete in this emerging and growing software market. Our focus has been on providing quality products and services to our customers. The Company achieved CMMI level-3 certification and continues to implement the certification quality level in its operation. Acknowledgement The Directors take this opportunity to thank all Investors, associates and business partners, clients, strategic alliance partners, technology partners, vendors, financial institutions/banks, regulatory and government authorities, media and stock exchanges, for their continued support during the year. The Directors place on record their appreciation of the contribution made by all the employees at all levels for their dedicated service and continued excellent work throughout the year. For and on behalf of the Board (Surendra Kumar Surana) Managing Director & CEO (DIN:-00340866) (Shubh Karan Surana) Director (DIN:- 00341082) Place : Jaipur, Date : August 12, 2015 |