| Dear Shareholders,
The Directors presenting their Report on the Business & Operations of
your Company and its working results for the year 2014-15.
1. FINANCIAL RESULTS
All figures in Rs. Crores except for EPS
Consolidated
Year ended Year ended
Details 31-Mar-15 31-Mar-14
Total Revenues 3.69 7.22
Total Expenses 17.75 27.85
Profit before exceptional and
extra-ordinary items and tax (14.05) (20.63)
Exceptional items 1.05 (6.20)
Profit before extraordinary items and tax (15.10) (14.43)
Profit before Tax (15.10) (14.43)
Current Tax Nil Nil
Deferred Tax Nil Nil
Loss for the year (15.10) (14.48)
Minority Interest Nil Nil
paid up equity capital 12.36 12.36
Earning per share (EPS) for the year (Rs)
i) Basic (12.21) (11.71)
ii) Diluted (12.21) (11.71)
All figures in Rs. Crores except for EPS
Standalone
Year ended Year ended
Details 31-Mar-15 31-Mar-14
Total Revenues 3.63 7.20
Total Expenses 17.24 26.30
Profit before exceptional and
extra-ordinary items and tax (13.61) (19.10)
Exceptional items (1.49) (0.55)
Profit before extraordinary items and tax (12.12) (18.56)
Profit before Tax (12.12) (18.56)
Current Tax Nil Nil
Deferred Tax Nil Nil
Loss for the year (12.12) (18.56)
Minority Interest Nil Nil
paid up equity capital 12.36 12.36
Earning per share (EPS) for the year (Rs)
i) Basic (9.80) (15.01)
ii) Diluted (9.80) (15.01)
* Note: Previous year's figures have been reclassified wherever
necessary to conform to current year classification.
2. DIVIDEND
The Company and the Group incurred a loss for the year and have
accumulated negative reserves as at the year end. The Directors
therefore recommend that no dividend be paid in respect of the
Financial Year 2014-2015.
3. BUSINESS UPDATE AND OUTLOOK
After the buyer for RVC Towers that was reported last year, failed to
complete the transaction the company has been unable to secure an
alternative buyer even at a reduced price. Demand for office space in
Chennai continues to be weak due mainly to over-supply; whilst Rupee
interest rates have continued to be held high both by the RBI and by
the RVC mortgagee, who is concerned about the company's continuing
ability to settle the interest and capital payments as they fall due,
in the absence of sufficient income from rentals. As a result the
company's only remaining business, that of letting out the floors of
RVC Towers that it owns, has been loss making throughout the year and
is totally dependent on continuing financial support from its major
shareholder.
The company continues to look for tenants to fill the vacant floors of
RVC Towers, and for a buyer of the building. Until it finds a buyer for
RVC the shares of the company are not an attractive option for a
partner seeking a reverse takeover due to the high loan interest and
low rentals on RVC. At the date of this report we have a number of
prospective buyers for the building with whom we are in preliminary
talks.
RESULTS OF OPERATIONS
I - Consolidated Results
During the year, your Company on a consolidated basis with all its
subsidiaries earned total revenue of Rs. 3.69 Crores as against Rs.
7.22 Crores earned during the previous year. The profit before tax
during the year is Rs. (15.10) Crores as against Rs. (14.43) Crores for
the previous year.
After taking into account the tax provisions and adjustments for
minority interest, prior period adjustments and extraordinary items if
any, the loss for the year is Rs. (15.10) Crores as against a loss of
Rs. (14.48) Crores of the previous year.
II - Standalone Results
During the year, your Company on a standalone basis earned total
revenue of Rs. 3.63 Crores as against Rs. 7.20 Crores earned during the
previous year. The profit before tax during the year is Rs. (12.12)
Crores as against Rs. (18.56) Crores of the previous year.
After taking into account the tax provisions and adjustments, the loss
for the year was Rs. (12.12) Crores as against a loss of Rs. (18.56)
Crores for the previous year.
4. REVIEW OF SUBSIDIARIES
I - CSWL, Inc. USA and its Subsidiaries
CSWL Inc and its subsidiaries has not earned any revenue of during the
year, compared to US $ 938,571 achieved during the previous year.
The subsidiary reported a loss of US$ (43926) as compared to a profit
of of US$ 833,275 last year.
The results of existing subsidiaries International Innovations, Waldron
Ltd and Aspire Soft Corporation are included for the full year under
review.
The Company and its subsidiaries are in the process of liquidation. II
- Aspire Communications Private Ltd
The Consolidated results of Aspire including its wholly owned
Subsidiary Aspire Peripherals Limited have been taken into Company's
Consolidated results for the full year.
Aspire on a consolidated basis has reported revenues of Rs. 0.002
Crores with loss of Rs. (2.71) Crores against the consolidated reported
revenues of Rs. 0.016 Crores with a loss of Rs. (0.94) Crore of the
previous year.
The Company and its subsidiaries are in the process of liquidation.
5. CONSOLIDATED RESULTS PUBLICATION
As per Section 129 of the Companies Act, 2013, a copy of the Balance
Sheet, Profit and Loss Account, Report of the Board of Directors and
the Report of the Auditors of the above subsidiary companies have not
been attached with the Balance Sheet of the Company. The Company will
make available these documents upon request in writing to the Company
Secretary at the Registered Office of the Company by any member of the
Company interested in obtaining the same.
However, as required under the Listing Agreements with the Stock
Exchanges, the Consolidated Financial Statements of the Company and all
its Subsidiaries as prepared in accordance with Indian GAAP is enclosed
and form part of the Annual Report and Accounts.
6. DIRECTORS
Mr. Frederick Ivor Bendle has been appointed as additional director
with effect from 23rd September 2014. His appointment was confirmed at
the Annual General Meeting held on 27th November 2014. He is retiring
at this Annual General Meeting and being eligible offer himself for
re-appointment.
Ms. Vijayapriya was appointed as Additional Director with effect from
30th April 2015 and hold office until the conclusion of this Annual
General Meeting. The Company has received notice under Section 160 of
the Companies Act, 1956 from a member proposing Ms. Vijayapriya as
Director and a resolution for her appointment forms part of the Notice.
7. AUDIT RELATED MATTERS
7.1. Audit Committee
In terms of clause 49 of the listing agreement and the provision of
Section 177(8) read with Rule 6 of the Companies (Meeting of Board and
its Powers) Rules 2014 the company has duly constituted a qualified and
independent Audit Committee.
During the period under review, the suggestions put forth by the Audit
Committee were duly considered and accepted by the Board of Directors.
There were no instances of non- acceptance of such recommendations.
7.2. Statutory Auditors
At the Annual General Meeting of the Company held on 27th November
2014, M/s.Tomy & Francis, Chartered Accountants (Firm Registration
Number 010922S) were reappointed as the Statutory Auditors of the
Company to hold office until the conclusion of this Annual General
Meeting. Since the Company has time up to the year 2017 to comply with
the provisions relating to rotation of auditors as stipulated in
Section 139 (2) of the Companies Act, 2013 read with the Companies
(Audit and Auditors) Rules, 2014, it has decided to re-appoint the
auditors for the financial year 2015-2016.
Accordingly, the appointment of M/s.Tomy and Francis, Chartered
Accountants, as statutory auditors of the Company, is placed for
approval by the shareholders. In this regard, the Company has received
a certificate from the auditors to the effect that if they are
reappointed, it would be in accordance with the provisions of Section
141 of the Companies Act, 2013. The Audit committee and the Board of
Directors recommend the appointment of M/s. Tomy and Francis Chartered
Accountant as Auditors to hold office up to the conclusion of next
Annual General Meeting.
7.3. Qualifications in Auditors Report
With reference to auditor's remark in audit report, we state as
follows:-
1. Note 26 and 27 in the stand alone financial statements which
indicate that the Standalone Company has accumulated losses and its net
worth has been fully eroded, the Standalone Company has incurred a net
loss during the current and previous year(s) and, the Stand alone
Company's current liabilities exceeded its current assets as at the
balance sheet date. These conditions, along with other matters set
forth in Note 26, indicate the existence of a material uncertainty that
may cast significant doubt about the Stand alone Company's ability to
continue as a going concern.
On sale of RVC Towers we are unlikely to realize any more than is
required to settle amounts due to Canara Bank, and so after a sale the
company would be left with no rental incomes and therefore no income at
all to meet its ongoing staff and administration costs. Unless we can
find a buyer for the Company who can attribute some value to the
company's listed status and who would be willing to make an offer for
the entire share capital, a sale of RVC Towers would most likely
trigger the winding up of the Company.
2. Note No. 29 to the standalone financial statements and Notes to
Fixed Asset schedule regarding Change in Depreciation Policy of Fixed
Assets and resultant loss amounting to Rs. 58,64,486/- including prior
period Depreciation of Rs. 50,21,028.00/-.
As per estimation of management no impairment of Fixed Assets was
considered during the year 2014-15, since impairment losses on Fixed
Assets were provided and recognized in the previous years. However,
depreciation rates have been changed to amortise the depreciable value
over the useful life as set out in Schedule II of Companies Act, 2013,
equally, as the holding company is expected to use the same for letting
out, which will be in tune with Schedule II of Companies Act 2013.
Depreciation is charged on building based on the estimated remaining
life period of 25 years from the date of valuation on 17-01-2013 by the
approved valuer. Useful life of various assets is as given below
estimating a residual value of 1% on original cost at the end of useful
life.
Item Useful life
Furniture & Fitiings 10 years
Office Equipment 5 Years
Total additional depreciation charged to the profit and loss Account is
Rs. 58,64,486/-.
3. Note No. 30 to the stand alone financial statement regarding write
back of Account Payables to Aspire Communications P Ltd and Aspire
Peripherals P Ltd, two wholly owned subsidiaries of the Standalone
Company amounting to Rs. 253,45,879.00/-.
Since the company has fully stopped its principle business being
Software Development and its sales and service and company have no
trade receivables during the year.
Payables to Aspire Communications P Ltd and Aspire Peripherals P Ltd,
wholly owned subsidiary of the company amounting to Rs. 253,45,879/-
has been written back to Profit and loss account as Exceptional item as
these companies have stopped all it activities.
4. Note no. 31 to the standalone financial statement regarding
unsecured loans from Associate companies amounting to Rs.
246,936,135.00/-.
Auditors notes are self explanatory.
5. Company's Overseas subsidiary CSWL Inc and Indian subsidiary Aspire
Communications P Ltd and it subsidiary Aspire peripherals P Ltd have
stopped their operations fully. CSWL Inc has initiated Liquidation
proceedings.
Those companies ceased to carry on any business operation and are in
the process of liquidation.
7.4. Secretarial Audit
M/s.V.S.Sowrirajan & Associates, Company Secretaries-in- Practice were
appointed as Secretarial Auditor for the financial year 2014-15. The
Secretarial Audit Report in Form No.MR.3 issued by the Secretarial
Auditor forms part of the Annual Report as Annexure 1 to the Board's
report.
The Secretarial Audit Report contain qualifications/adverse remarks
with respect to which, we state the following:
1) In respect of delayed filing of forms, we have paid applicable
additional fee and the same is considered as compliance
2) In respect of non-filing of forms, the company has noted the same
and file these documents with applicable additional filing fee and
ensure its due compliance
3) The women director was appointed with effect from 30th April 2015
and thus the requirement stipulated under Section 152 of the Companies
Act,2013 is duly fulfilled. The delay was due to technical reasons
since the concerned Director was allotted Director Identification
Number only from that date.
4) Since the earnings of the company was only through Rental Income,
the unaudited/audited financial results for various quarters were only
submitted to Stock Exchanges and placed on the website of the company
and not advertised in newspapers.
7.5. Cost Audit
The Company is not required to conduct cost audit.
7.6. Internal Financial Controls
There are adequate internal financial controls in place with reference
to the financial statements. During the year under review, these
controls were evaluated and no significant weakness was identified
either in the design or operation of the controls.
8. POLICY MATTERS
8.1. Nomination and Remuneration Policy
The Company has constituted a Nomination, Remuneration and Governance
Committee of the Board of Directors and formulated a Nomination and
Remuneration Policy containing the criteria for determining
qualifications, positive attributes and independence of a director and
policy relating to the remuneration for the directors, key managerial
personnel and senior management personnel of the Company. The
Nomination and Remuneration Policy is available on the website of the
Company www.calsoftgroup.com and relevant extracts from the Policy are
reproduced in Annexure 2 to this report.
The Board affirms that the remuneration paid during financial year
2014-15 to the Employees and Key Managerial Personnel was as per the
Remuneration policy of the Company.
8.2. Risk Management Framework
Pursuant to Section 134 (3) (n) of the Companies Act, 2013 & Clause 49
of the listing agreement, the Board of Directors of the Company have
constituted a Risk Management Committee which is entrusted with the
task of monitoring and reviewing the risk management plan and
procedures of the Company. The Company has developed and implemented a
risk management framework detailing the various risks faced by the
Company and methods and procedures for identification, monitoring and
mitigation of such risks. The details of the committee and its terms of
reference are set out in the corporate governance report forming part
of the Boards report. The risk management function is complimentary to
the internal control mechanism of the Company and supplements the audit
function.
8.3. Corporate Social Responsibility Policy
The provisions of Section 135 of the Companies Act, 2013 and the rules
made there under relating to Corporate Social Responsibility are not
applicable to the Company.
8.4. Vigil Mechanism
In terms of Clause 49 of the listing agreement and the provision of
Section 177(9) read with Rule 7 of the Companies (Meeting of Board and
its Powers) Rules 2014 the company has duly established a vigil
mechanism for stakeholders, directors and employees to report genuine
concerns about unethical behavior, actual or suspected fraud or
violation of the company's code of conduct or ethics policy. The Audit
Committee of the Company oversee the vigil mechanism. The Company
affirm that no personnel has been denied direct access to the Chairman
of the Audit Committee.
The Policy also provides for adequate protection to the whistle blower
against victimization or discriminatory practices. The Policy is
available on the website of the Company at http://www.calsoftgroup.com.
9. OTHER MATTERS
9.1. Debentures
During the year under review, the Company has not issued any
debentures. As on date, the Company does not have any outstanding
debentures
9.2. Bonus Shares
The Company has not issued any bonus shares during the financial year.
9.3. Deposits
The Company has not accepted any deposits in terms of Chapter V of the
Companies Act, 2013 read with the Companies (Acceptance of Deposit)
Rules, 2014, during the year under review and as such, no amount on
account of principal or interest on public deposits was outstanding as
of the balance sheet date.
9.4. Transfer to Investor Education and Protection Fund
In compliance of Section 205C of the Companies Act, 1956, the dividends
pertaining to the financial year 2006-07 which were lying unclaimed
with the Company was transferred to the Investor Education and
Protection Fund during the financial year 2014- 15.
9.5. Human Resources
The Company has only one Employee.
Disclosure containing the names and other particulars of employees in
accordance with the Provisions of Section 197(12) of the Companies Act,
2013, read with Rule 5(1) of the Companies (Appointment and
Remuneration of Managerial Personnel) Rules, 2014, is given below:
(i) the ratio of the remuneration of each director to the median
remuneration of the employees of the company for the financial year:
Not Applicable since no remuneration is paid to directors.
(ii) the percentage increase in remuneration of each director, Chief
Financial Officer, Chief Executive Officer, Company Secretary or
Manager, if any, in the financial year: No Increase.
(iii) the percentage increase in the median remuneration of employees
in the financial year - No Increase.
(iv) the number of permanent employees on the rolls of company - One
(1).
(v) the explanation on the relationship between average increase in
remuneration and company performance- Not applicable.
(vi) comparison of the remuneration of the Key Managerial Personnel
against the performance of the company- Not Applicable.
(vii) 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 -
Not Applicable.
(viii) comparison of the each remuneration of the Key Managerial
Personnel against the performance of the company - Not Applicable.
(ix) the key parameters for any variable component of remuneration
availed by the directors - Not Applicable.
(x) 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 - Not Applicable
since no remuneration was paid to any director.
The directors affirms that the remuneration paid by the company is as
per the remuneration policy of the company.
9.6. Corporate Governance
A detailed report on Corporate Governance and a certificate from the
Statutory Auditors affirming compliance with the various conditions of
Corporate Governance as stipulated under Clause 49 of the Listing
Agreement forms part of the Annual Report.
9.7. Code of Conduct
In compliance with Clause 49 of the listing agreement and Companies
Act, 2013 the Company has laid down a Code of Conduct (Code) for all
the Board Members and Senior Management Personnel of the Company. The
Code is also posted on the Website of the Company www.calsoftgroup.com.
All Board Members and Senior Management Personnel have affirmed their
compliance with the Code for the financial year ended 31st March, 2015.
A declaration to this effect signed by Mr. Bhavesh Rameshlal Chauhan,
Managing Director forms part of the Corporate Governance Report.
9.8. Management Discussion and Analysis Report
In accordance with the requirements of the Listing Agreement, the
Management Discussion and Analysis Report titled as Management Report
forms part of this Report.
9.9. Extract of Annual Return
In terms of Section 134 of the Companies Act, 2013 read with Rules
12(1) of the Companies (Management and Administration) Rules, 2014, the
extract of the Annual Return of the Company for the financial year
2014-15 is provided in Annexure 3 to this report.
9.10. Number of Board Meetings
During the year, Eight (8) Board Meetings were held and details are
available in the Corporate Governance Report. The intervening gap
between two board meetings was within the period prescribed by the
Companies Act, 2013.
9.11. Particulars of Loans, Guarantees and Investments
In terms of Section 134 of the Companies Act, 2013, the particulars of
loans, guarantees and investments given by the Company under Section
186 of the Companies Act, 2013 is detailed in Notes to Accounts of the
Financial Statements.
9.12. Related Party Transactions
During the year, the Company has not entered into any contract /
arrangement / transaction with a related party which can be considered
as material in terms of the policy on related party transactions laid
down by the Board of Directors. The related party transactions
undertaken during the financial year 2014-15 are detailed in Notes to
Accounts of the Financial Statements.
Particulars of contracts or arrangements with related parties referred
to in Section 188(1) of the Companies Act, 2013 in form AOC-2 is
appended as Annexure 4 to the Board's Report.
9.13. Conservation of Energy, Technology Absorption and Foreign
Exchange Earnings and Outgo
Since the company is in the Information Technology Enabled Services
(ITES), the provisions relating to conservation of energy and
technology absorption are not applicable. Details of earnings and
expenditure in foreign currency are given below:
2014-15 2013-14
(in Crores) (in Crores)
Foreign Exchange Earnings 0.56 4.00
Foreign Exchange Outgo 0.70 12.07
(including Capital Goods and
Imported Software Packages)
9.14. 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/she
holds the criteria of independence laid down in Section 149 (6) of the
Companies Act, 2013 and Clause 49 of the Listing Agreement
9.15. Board Evaluation
As required by the Companies Act, 2013 and Clause 49 of the Listing
Agreement, the Company has devised a Policy for performance evaluation
of Independent Directors, Board, Committees and other individual
Directors which includes criteria for performance evaluation of the
non- executive directors and executive directors.
On the basis of Policy for performance evaluation of Independent
Directors, Board, Committees and other individual Directors, a process
of evaluation was followed by the Board for its own performance and
that of its Committees and individual Directors.
9.16. Financial Position and Performance of Subsidiaries, Joint
Ventures and Associates
In terms of Section 134 of the Companies Act, 2013 and Rule 8(1) of the
Companies (Accounts) Rules, 2014, the financial position and
performance of subsidiaries are given as an Annexure 5 to the
Consolidated Financial Statements.
As on 31st March 2015, the Company has two subsidiaries viz., CSWL INC
and Aspire Communication Private Limited. There has been no material
change in the nature of the business of the subsidiaries. The
consolidated financial statement has been prepared in accordance with
the relevant accounting standards and a separate statement containing
the salient features of the financial statement of its subsidiaries and
associate in form AOC-1 is attached along with the financial statement
of the Company.
9.17. Material Changes and Commitments, if any, affecting the
Financial Position between the end of the Financial Year and the date
of Report:
There are no material changes and commitments affecting the financial
position of the company between the end of financial year and the date
of report.
9.18. Green initiatives
Electronic copies of the Annual Report 2014-15 and Notice of the Twenty
Third Annual General Meeting are sent to all members whose email
addresses are registered with the Company / Depository Participant(s).
For members who have not registered their email addresses, physical
copies of the Annual Report 2015 and the Notice of the Twenty Third
Annual General Meeting are sent in the permitted mode. Members
requiring physical copies can send a request to the Company.
9.19. Additional Information to Shareholders
All important and pertinent investor information such as financial
results, investor presentations, press releases, new launches and
project updates are made available on the Company's website
(www.calsoftgroup.com) on a regular basis.
10 DIRECTORS' RESPONSIBILITY STATEMENT
In accordance with the provisions of Section 134(3)(c) read with 134(5)
of the Act 2013, with respect to Directors' Responsibility Statement,
it is hereby stated -
i. that in the preparation of annual accounts for the financial year
ended 31st March 2015, the applicable Accounting Standards had been
followed and that there were no material departures;
ii. that the directors had selected such accounting policies and
applied them consistently and made judgments and estimates that were
reasonable and prudent so as to give a true and fair view of the state
of affairs of the Company at the end of the financial year and of the
profit of the Company for the year under review;
iii. that the directors had taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Act 2013, for safeguarding the assets of the Company
and for preventing and detecting fraud and other irregularities;
iv. that the directors had prepared the accounts for the financial
year ended 31st March 2015 on a "going concern basis."
v. that the directors, had laid down internal financial controls to be
followed by the Company and that such internal financial controls are
adequate and were operating effectively; and
vi. the directors had devised proper systems to ensure compliance with
the provisions of all applicable laws and that such systems were
adequate and operating effectively.
ACKNOWLEDGEMENT
Your Directors take this opportunity to thank the customers,
shareholders, suppliers, bankers, business partners/ associates and
Government and regulatory authorities in India and other countries of
operation for their consistent support and encouragement to the Company
and look forward to their continued support during the coming years.
Your Directors place on record their appreciation for the valuable
contribution made by the employees at all levels.
For and on behalf of the Board of Directors
Chennai Bhavesh Rameshlal Chauhan Dr. P J George
24th July, 2015 Managing Director & CEO Director |