To The Members
The Directors are pleased to present their 32nd Annual Report along with the audited financial statements for the financial year ended March 31,2024.
FINANCIAL RESULTS
The financial results of the Company for the year ended 31st March 2024 are summarised below:
(All figures in lakhs, Except for EPS)
COMPANY PERFORMANCE AND RESULTS OF OPERATIONS Standalone Results
During the year, your Company, on a standalone basis, earned a total revenue of Rs. 428.03 lakhs. The profit before tax during the year is Rs.84.92 lakhs.
After considering the tax provisions and adjustments, the profit for the year was Rs.62.35 lakhs..
Consolidated Results
During the year, your Company consolidated with all its subsidiaries and earned a total revenue of Rs.428.03 lakhs. The profit before tax during the year is Rs. 62.35 lakhs.
DIVIDEND
The Board of Directors have decided to retain the entire amount of the FY 2023-24 profits in the profit and loss account; hence, no dividend is being declared for this financial year.
SHARE CAPITAL
The Share Capital of the Company as of March 31, 2024, stood at Rs.15,87,58,060/- shares of Rs. 10/- each as below:
a. 1,54,57,106 equity shares of Rs. 10/- each;
b. 4,18,700 Optionally Convertible Redeemable Preference Shares of Rs. 10/- each
TRANSFER TO RESERVES
The Company retained the entire surplus in the Profit and Loss Account; hence, no transfer to General Reserve was made during the Year.
SUBSIDIARY COMPANY AND CONSOLIDATED FINANCIAL STATEMENTS
The Consolidated Financial Statements of the Company and its subsidiary, prepared in accordance with Indian Accounting Standards notified under the Companies (Indian Accounting Standard) Rules, 2015 (‘IND AS'), form part of the Annual Report and are reflected in the Consolidated Financial Statements of the Company.
In 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 in Consolidated Financial Statements. As of March 31, 2024, the company has a subsidiary, Aspire Communications Private Limited. There has been no material change in the nature of the subsidiaries' business. 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 associates in form AOC-1 is attached as Annexure I, along with the financial information of the company.
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.
PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS
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 are detailed in Notes to Accounts of the Financial Statements.
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 except for taking of loan from Dr. Vasudevan Mahadevan (Managing Director and Promoter) to funds day to day operations of the Company.
The related party transactions undertaken during the financial year 2023-24 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-ll to the Board's Report.
CHANGES IN THE BOARD OF DIRECTORS
During the year, the following changes took place in the composition of the Board of Directors:
? Resignation of Mr. Sampath (DIN: 07556751) as Independent Director, effective from 20.06.2024
? Reappointment of Ms. Srimathy (DIN: 08328823) as Independent Director for 5 years, effective from 10.06.2024
DECLARATION BY INDEPENDENT DIRECTORS
The Company has received declarations from all its Independent Directors that they meet the criteria of Independence as laid down under Section 149 (6) of the Companies Act, 2013 and the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 in respect of the financial year ended March 31, 2024. Independent Directors have complied with the Code for Independent Directors prescribed in Schedule IV of the Companies Act, 2013.
GOVERNANCE GUIDELINES
The Board of the Company has adopted Governance Guidelines on Board Effectiveness. The Guidelines cover aspects related to the composition and role of the Board, Chairman and Directors, Board diversity, definition of independence, Director term, retirement age and Committees of the Board. It also covers aspects relating to nomination, appointment, induction and development of Directors, Director remuneration, Subsidiary oversight, Code of Conduct, Board Effectiveness Review and Mandates of Board Committees.
PROCEDURE FOR NOMINATION AND APPOINTMENT OF DIRECTORS
The Nomination and Remuneration Committee (NRC) is responsible for developing competency requirements for the Board based on the industry and strategy of the Company. The Board composition analysis reflects an in-depth understanding of the Company, including its design, environment, operations, financial condition and compliance requirements. The Nomination and Remuneration Committee periodically conducts a gap analysis to refresh the Board, including each time a Director's appointment or re-appointment is required. The Committee is also responsible for reviewing the profiles of potential candidates vis-a-vis the needed competencies and meeting potential candidates before making recommendations for their nomination to the Board. At the time of appointment, specific requirements for the position, including expert knowledge expected, are communicated to the appointee.
CRITERIA FOR DETERMINING QUALIFICATIONS, POSITIVE ATTRIBUTES AND
INDEPENDENCE OF A DIRECTOR
The Nomination and Remuneration Committee has formulated the criteria for determining qualifications, positive attributes and independence of Directors in terms of provisions of Section 178(3) of the Act and Regulation 19 read with Part D of Schedule II of the Listing Regulations.
Independence: In accordance with the above criteria, a Director will be considered as an ‘Independent Director' if they meet the requirements for ‘Independent Director' as laid down in the Act and Rules framed thereunder and Regulation 16(l)(b) of the Listing Regulations.
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Qualifications: A transparent Board nomination process is in place that encourages diversity of thought, experience, knowledge, perspective, age, and gender. It is also ensured that the Board has an appropriate blend of functional and industry expertise. While recommending the appointment of a Director, the Nomination and Remuneration Committee considers how the individual's function and domain expertise will contribute to the overall skill-domain mbc^ of the Board.
Positive Attributes: In addition to the duties as prescribed under the Act, the Directors on the Board of the Company are also expected to demonstrate high standards of ethical behaviour, strong interpersonal and communication skills and soundness of judgement. Independent Directors are also expected to abide by the ‘Code for Independent Directors' outlined in Schedule IV of the Act.
CORPORATE SOCIAL RESPONSIBILITY
During the financial year, the Company has not met any of the threshold requirements of Section 135 of the Companies Act 2013. The need to spend on CSR or any related provisions of CSR does not apply to the Company.
ANNUAL EVALUATION OF BOARD PERFORMANCE AND PERFORMANCE OF ITS
COMMITTEES AND DIRECTORS
According to the applicable provisions of the Act and the Listing Regulations, the Board has carried out an annual evaluation of its performance, the performance of the Directors, as well as the assessment of the working of its committees.
The Nomination and Remuneration Committee has defined the evaluation criteria, procedure and schedule for the Performance Evaluation process for the Board, its Committees and Directors.
The Board evaluated the performance of the Board and individual Directors after seeking input from all the Directors. The Board assessed the Committees' performance after seeking information from the Committee Members. The criteria for performance evaluation of the Board included aspects such as Board composition and structure, effectiveness of Board processes, contribution to long-term strategic planning, etc. The criteria for performance evaluation of the Committees included structure and composition, point of Committee meetings, etc. The above criteria for assessment were based on the Guidance Note issued by SEBI.
In a separate meeting, the independent Directors evaluated the performance of NonIndependent Directors and the performance of the Board as a whole. They also assessed the performance of the Chairman, taking into account the views of Executive Directors and Non-Executive Directors. The NRC reviewed the performance of the Board, its Committees and the Directors. The same was discussed in the Board Meeting that followed the meeting of the independent Directors and Nomination and Remuneration Committee, at which the feedback received from the Directors on the performance of the Board and its Committees was also discussed.
FAMILIARISATION PROGRAMME FOR INDEPENDENT DIRECTORS
The Directors are provided with necessary documents, reports and internal policies to familiarise themselves with the company's procedures and practices. Further, periodic presentations are made at the Board and its Committee Meetings on business and performance updates of the company, global business environment, business strategy and risks involved. Quarterly updates on relevant statutory changes are provided to the Directors in the Board meetings.
Upon appointment, the Directors are issued a Letter of Appointment setting out in detail the terms of employment, including their roles, functions, responsibilities, and fiduciary duties as a Director of the company.
The details of such a familiarisation programme for Independent Directors are posted on the company's website and are available at https://www.calsofts.com/investor.
SKILLS, EXPERTISE AND COMPETENCIES OF THE BOARD
The Board of Directors has, based on the recommendations of the Nomination and Remuneration Committee (‘NRC'), identified the following core skills/ expertise/competencies of Directors as required in the context of business of the Company for its effective functioning:
NUMBER OF BOARD MEETINGS
During the year, Five (5) board meetings were conducted, and details are available in the Corporate Governance Report. The intervening gap between the two board meetings was within the period prescribed by the Companies Act 2013.
BOARD COMMITTEES
The primary committees of the Board are the Audit Committee, Nomination and Remuneration Committee, and Stakeholder Relationship Committee. Since the Company does not fall under the top 1000 listed entities based on market capitalisation, the Company doesn't need to form a Risk Management Committee.
1) Audit Committee
In terms of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 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. The Audit Committee of the Board consists of four "Non-Executive & Independent Directors" as members having adequate financial and accounting knowledge. The audit committee's composition, procedures, powers, roIe/functions and terms of reference are set out in the corporate governance report, forming part of the Board's report.
During the financial year 2023-24, the Audit Committee met four times on 30.05.2023, 06.09.2023,14.11.2023, and 14.02.2024. 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.
2) Nomination and Remuneration Committee
As of 31.03.2024, the Nomination and Remuneration Committee comprises five NonExecutive Independent Directors. Mrs. AVN Srimathi, the Independent Director, is the Chairman of the Committee. The committee met four times during the year on 30.05.2023, 06.09.2023,14.11.2023 and 14.02.2024.
3) Stakeholder Relationship Committee
The Company has a Stakeholders Grievance Committee (formerly known as Shareholders'/lnvestors' Grievance Committee) of the Board of Directors to look into the redressal of complaints of shareholders/investors' such as transfer or credit of shares, nonreceipt of dividend/notices/annual reports, etc.
As of 31.03.2024, the Stakeholder Relationship Committee comprises six members: Five independent directors, and one non-executive director. Mrs. AVN Srimathi, the Independent Director, is the Chairman of the Committee. The committee met four times during the year on 30.05.2023, 06.09.2023,14.11.2023 and 14.02.2024.
DETAILS OF POLICIES DEVELOPED BY THE COMPANY
1) Nomination and Remuneration Policy
Our 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.calsofts.com and relevant extracts from the Policy are reproduced in Annexure III to this report.
The Board affirms that the remuneration paid during the financial year 2023-24 to the Employees and Key Managerial Personnel was as per the Company's Remuneration policy.
2) Whistle Blower Policy - Vigil Mechanism
In terms of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 and the provision of Section 177(9) read with Rule 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 behaviour, 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 affirms that no personnel has been denied direct access to the Chairman of the Audit Committee.
The Policy also protects the whistle-blower against victimisation or discriminatory practices. The Policy is available on the website of the Company at www.calsofts.com.
3) Board Diversity
The Policy on Board Diversity (the "Policy") sets out the Company's approach to ensuring adequate diversity in its Board of Directors (the "Board"). It is devised in consultation with the Nomination and Remuneration Committee (the "Committee") of the Board.
The Company recognises and embraces the benefits of having a diverse Board of Directors and sees increasing diversity at the Board level as an essential element in maintaining a competitive advantage in its complex business. It is recognised that a Board composed of appropriately qualified people with a broad range of experience relevant to the industry of the Company is necessary to achieve effective corporate governance and sustained commercial success.
A truly diverse Board will include and make good use of differences in skills, regional and industry experience, background, race, gender and other distinctions among Directors. These differences will be considered in determining the optimum composition of the Board and, when possible, should be balanced appropriately. At a minimum, the Board of the Company shall consist of at least one woman Director. All Board appointments are made on merit, in the context of the skills, experience, independence, knowledge and integrity that the Board requires to be effective.
COMPLIANCE WITH SECRETARIAL STANDARDS
The Directors state that applicable Secretarial Standards, i.e. SS-1 and SS-2, issued by the Institute of Company Secretaries of India, relating to ‘Meetings of the Board of Directors' and ‘General Meetings', respectively, have been duly followed by the Company.
AUDITORS Statutory Auditors
The Company has received a certificate from the Statutory Auditors to the effect they are not disqualified to continue as Auditors of the Company. The notes on the financial statement referred to in the Auditors' Report are self-explanatory and do not call for any further comments.
Qualifications in Auditors Report and the Management response to the
qualification
II. Audit Qualification (each audit qualification separately):
Secretarial Auditor
S. Dhanapal and Associates, Company Secretaries-in-Practice, have been appointed as Secretarial Auditor for the financial year 2023-24, the Secretarial Audit Report in Form No. MR.3 issued by the Secretarial Auditor forms part of the Annual Report as Annexure IV to the Board's report.
The Secretarial Auditor has qualified the report with respect to the matters stated below. During the period under review, the Company has complied in accordance with the requirements to be met with the applicable provisions of the Act, Rules, Regulations, Guidelines, Standards, etc. mentioned above to the extent applicable during the year, except for delay in filing forms on few occasions with the MCA, BSE and NSE, payment of fee to MCA; CSR related compliances, website disclosures.
The Board is taking steps to comply with the requirements which have arisen due to technical difficulties/ inadvertence
Cost Audit- The Company is not required to conduct a cost audit.
PARTICULARS OF EMPLOYEES AND REMUNERATION
Details as required under Section 197 of the Companies Act, 2013 read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 per Annexure VI
Percentage increase in the Median Remuneration of employees in the financial year
The median remuneration of employees for the financial year 2023-24 arrived at Rs. 6.00 lakhs/- per month, and the median remuneration for the previous financial year, 31st March 2024, arrived at Rs. 7.2 lakhs/- per year. Accordingly, there was an decrease of 20 % in the median remuneration of employees in a financial year.
Number of permanent employees on the rolls of the Company as of March 31,2024
The number of permanent employees on the rolls of the Company as of March 31, 2024, was 32.
Average percentile increases already made in the salaries of employees other than 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 any exception circumstances for increase in managerial remuneration.
The average percentile increase was about 10% for all employees who went through the compensation review cycle in the year. For the managerial position, the compensation level remained the same with respect to the Managing Director and, Executive Director and CFO. It has marginally increased due to annual increments based on their performance.
DETAILS OF PECUNIARY RELATIONSHIP OR TRANSACTIONS OF NON-EXECUTIVE DIRECTORS VIS A VIS THE COMPANY
No sitting fees were given to any non-executive Directors for every meeting of the Board and committee meeting they attended as members of the board.
Dr. Vasudevan Mahalingam holds 55,22,972 equity shares as of March 31,2023.
INTERNAL FINANCIAL CONTROLS
The term Internal Financial Controls has been defined as the policies and procedures adopted by the company to ensure orderly and efficient conduct of its business, including adherence to the company's policies, safeguarding of its assets, prevention and detection of frauds and errors, accuracy and completeness of accounting records, and the timely preparation of reliable financial information. Your Company has adequate and robust Internal Control Systems commensurate with its operations' size, scale and complexity.
To maintain its objectivity and independence, the Internal Audit function reports to the Chairman of the Audit Committee of the Board. The Internal Audit Department monitors and evaluates the efficacy and adequacy of internal control systems in the Company, its compliance with operating systems, accounting procedures and policies at all locations of the Company. Based on the Internal Audit function report, process owners undertake corrective action in their respective areas, strengthening the controls. Significant audit observations and recommendations, along with corrective actions thereon, are presented to the Audit Committee of the Board.
The Audit Committee also conducts discussions about Internal Control Systems with the Internal and Statutory Auditors, and the Management of the Company satisfies themselves on the integrity of financial information and ensures that financial controls and risk management systems are robust and defensible.
HUMAN RESOURCES Employee Strength and Expansion
Calsoft employs more than 1000+ employees to deliver an industry-leading revenue per employee. Calsoft continued its focus on talent localisation strategy in global locations; a strategy adopted a decade ago, ahead of the market. This has paid rich dividends in an era of strong emphasis on talent localisation.
In FY 2023-24, the human resource function continued to build on its organisational strategy and mission. Our various initiatives were focused on simplifying HR function, impacting the entire hire-to-retire cycle, and enhancing employee experience by delivering distinctive people practices. HR function collaborated with businesses to enhance business value by driving operational efficiencies and effective organisation design.
Talent Acquisition, Talent Development & Career Management
Calsoft's talent acquisition & talent management practices are aligned to our strategy. We
have leveraged Digital and Cloud technologies to enhance the quality and experience of our Talent Acquisition, Talent Development and Career Management programs. We also leveraged artificial intelligence & data science to hire the right talent at the right time. Calsoft believes LEARN, UNLEARN, and RELEARN is a continuous process that will bring in new models of employment and force organisations to rethink the Future of Work and the Workplace. We shifted focus on enhancing the business value through increasing passion, proficiency and value by enabling our employees to drive Performance, Productivity and Innovation.
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORK PLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013
The Company has an Anti-Sexual Harassment Policy in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition &Redressal) Act, 2013. Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy.
The Company has not received any complaint on sexual harassment during the financial year ended 31.03.2024.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATIONS IN FUTURE
During the year, no significant and material orders passed by the Regulators or Courts or Tribunals impact the going concern status and the Company's operations in future.
MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL POSITION BETWEEN THE END OF THE FINANCIAL YEAR AND THE DATE OF REPORT
No such transaction affects the financials for the year ending and the date of the report.
EXTRACT OF ANNUAL RETURN
As per the MCA Notification dated August 28, 2020, amending to Rule 12(1), a web link of the Annual Return is furnished in accordance with sub-section (3) of Section 92 of the Companies Act, 2013 and as prescribed in Form MGT-7 of The Companies (Management and Administration) Rules, 2014. You may please refer to our Company's weblink: https://www.calsofts.com/_files/ugd/535075_7bl7517037864c3c85bad6e285dc8f8f.pdf
CORPORATE GOVERNANCE
The Company has complied with the corporate governance requirements under the Companies Act, 2013 and as stipulated under the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.
A report on Corporate Governance, including Management Discussion and Analysis report under Regulation 34 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, along with a certificate from M/s. S Dhanapal & Associates LLP, Practicing Company Secretaries, confirming the compliance is annexed herewith marked as Annexure VII and forms part of this report.
CODE OF CONDUCT
Regarding SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 and Companies Act 2013, the Company has laid down a Code of Conduct (Code) for all the Company's Board Members and Senior Management Personnel. The Code is also posted on the Company's Website: www.calsofts.com. All Board Members and Senior Management Personnel have affirmed their compliance with the Code for the March 31, 2023 financial year. A declaration signed by Dr. M. Vasudevan, Managing Director, forms part of the Corporate Governance Report.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
In accordance with the requirements of the Listing Agreement, the Management Discussion and Analysis Report, titled Management Report, forms part of this Report.
During the year under review, the company has not entered into any transaction of a material nature with its subsidiaries, promoters, Directors, management, senior management personnel, their relatives, etc., that may have any potential conflict with the company's interest. The company has obtained requisite declarations from all Directors and senior management personnel, which were placed before the Board of Directors.
There have been no materially significant related party transactions, monetary transactions or relationships between the company and its Directors, management, subsidiary, or relatives, except for those disclosed in the financial statements for the financial year 202324. Detailed information on materially significant related party transactions is enclosed in Annexure II to the Board Report
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 the conservation of energy and technology absorption are not applicable.
During this FY 2023-24, the company earned Rs. 400 lakhs as foreign exchange earnings.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to Section 134 of the Companies Act, 2013, read with the Companies (Accounts) Rules, 2014, your Company complied with the compliance requirements and the details of compliances under the Companies Act, 2013 are enumerated below:
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Your Directors confirm the following:
• In preparation for the annual accounts, the applicable accounting standards were followed along with proper explanation relating to material departures;
• The directors had selected such accounting policies. They applied them consistently and made judgments and estimates that were reasonable and prudent to give an accurate and fair view of the state of affairs of the company at the end of the financial year and of the profit or loss of the company for that period.
• The directors had taken proper and sufficient care to maintain adequate accounting records in accordance with the provisions of the Companies Act 2013 to safeguard the company's assets and to prevent and detect fraud and other irregularities.
• The directors had prepared the annual accounts on a going concern basis.
• Proper internal financial controls were in place, and the financial controls were adequate and were operating effectively.
• Proper systems were in place to ensure compliance with the provisions of all applicable laws and were adequate and operating effectively.
GREEN INITIATIVES
From the FY 2016-17 onwards, Electronic copies of Annual Reports and Notice of the 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 were sent.
ADDITIONAL INFORMATION TO SHAREHOLDERS
All critical and pertinent investor information, such as financial results, investor presentations, press releases, new launches and project updates, are regularly available on the Company's website www.calsofts.com.
ACKNOWLEDGEMENT
We take this opportunity to thank our 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. We record our appreciation for the valuable contribution made by the employees at all levels.