DIRECTORS' REPORT Dear Members, Your directors are pleased to present the twenty first Annual Report and the Company's audited financial statement for the financial year ended March 31, 2015. The highlights of the Company's Performance are as under: Revenue from operations increased by 25.98% (Standalone) Revenue from operations increased by 25.97% (Consolidated) TRANSFER TO RESERVES: The Company has not transferred any sum to the General Reserves. DIVIDEND: With a view to plough back profit of the year and in order to conserve resources for operational purposes, the board of directors of your company does not recommend any dividend for the year. MATERIAL CHANGES AND COMMITMENTS: No material changes and commitments have occurred after the close of the year till the date of this Report, which affect the financial position of the Company. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS: No significant and material orders passed by the regulators or courts or tribunals impacting going concern status and Company's operations in future. FIXED DEPOSITS/DETAILS OF DEPOSIT The Company has not accepted any fixed deposits and, as such, no amount of principal or interest was outstanding as of the Balance Sheet date. Accepted during the year Nil Remained unpaid or unclaimed as at the end of the year Nil Whether there has been any default in repayment of deposits or payment of interest thereon during the year and if so, number of such cases and the total amount involved N.A. Details of Deposits which are not in compliance with the requirements of Chapter V of the Act N.A. EXTRACTS OF ANNUAL RETURNS: Pursuant to Section 134(3) (a) of Companies Act, 2013, extract of the annual return is appended as Annexure-1 to the Board's Report Pursuant to Schedule IV of the Companies Act, 2013 and the Rules made thereunder, the independent directors of the Company shall hold at least one meeting in a year, without the attendance of non independent directors and members of the Management. All the independent directors of the Company shall strive to be present at such meetings. The meeting shall review the performance of non independent directors and the Board as a whole; review the performance of the chairman of the Board, taking into account the views of the executive directors and non-executive directors; assess the quality, quantity and timeliness of flow of information between the Management and the board that is necessary for it to effectively and reasonably perform its duties. Meeting of Independent Directors was held on March 12, 2015. Terms and conditions of appointment of Independent directors uploaded on the website of the company. <http://acesoftex.com/uploads/IndependentDirector/> Brief%20Profile%20and%20terms%20and%20conditions%20of%20appointment.pdf AUDITORS STATUTORY AUDITOR Kalaria & Sampat, Chartered Accounts, Statutory Auditors of the Company, hold office till the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment. They have confirmed their eligibility to the effect that their re-appointment, if made, would be within the prescribed limits under the Act and that they are not disqualified for re-appointment. The Notes on financial statement referred to in the Auditors' Report are self-explanatory and do not call for any further comments. The Auditors' Report does not contain any qualification, reservation or adverse remark. SECRETARIAL AUDITOR Hemali S. Patel, Practicing Company Secretaries, was appointed to conduct the secretarial audit of the Company for the financial year 2014-15, as required under Section 204 of the Companies Act, 2013 and Rules there under. The secretarial audit report for FY 2014-15 forms part of the Annual Report as Annexure- 2 to the Board's report. The Auditors' Report does not contain any qualification, reservation or adverse remark. SUBSIDIARIES AND ASSOCIATES: During the year, the Board of Directors ('the Board') reviewed affairs of the subsidiaries. In accordance with section 129 (3) of the Companies Act, 2013, we have prepared consolidated financial statements of the company and all its subsidiaries, which form part of the Annual Report. Further, a statement of our subsidiaries containing the salient features of the financial statement of our subsidiaries in the prescribed format AOC-1 is appended to the consolidated financial statements and hence not repeated here for the sake of brevity. 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 meets the criteria of independence laid down in Section 149(6) of the Companies Act, 2013 and other applicable provisions of the Listing Agreement. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO: The particulars relating to conservation of energy, technology absorption, foreign exchange earnings and outgo, as required to be disclosed under the Act, are provided here under. (A) Conservation of energy - the Steps taken or impact on conservation of energy Company is ever mindful of the need for energy conservation, not only as a method of cost reduction, but also because it is a global imperative. We have ensured that the following measures are institutionalized across all our facilities: i. Optimal cooling of work areas and data centers. ii. Switching off computers when not in use. iii. Utilization of lights and stand alone air conditioners only when required. iv. Minimal usage of AC s and lights during weekend. - the steps taken by the company for utilizing alternate source of energy & Capital investment on energy conservation equipments At present, Company has not utilized any alternate source of energy and emphasize on the Conservation of energy and be frugal in utilizing the energy. - Impact of these measures: Taking effective measurements in saving energy has significantly benefitted the company. (B) Technology absorption:- the efforts made towards technology absorption, benefit derives & Research and Development i. Company has made continues effort to develop technology for the better out puts and reduction of cost. With the change of time it is essential to be updated with the latest equipments and technology to serve our client better. Company consistently strives to absorb latest technology suitable to industry size and clients need. Company has not incurred any expenses for research and development. RISK MANAGEMENT: The Company continues to use risk management frame work adopted by board in (a) Overseeing and approving the Company's enterprise wide risk management framework; and (b) Overseeing that all the risks that the organization faces such as strategic, financial, credit, market, liquidity, security, property, IT, legal, regulatory, reputational and other risks have been identified and assessed and there is an adequate risk management infrastructure in place capable of addressing those risks. The Company's management systems, organizational structures, processes, standards, code of conduct that governs how the Company conducts the business and manages associated risks. INTERNAL FINANCIAL CONTROLS: The Company has in place adequate internal financial controls with reference to financial statements. During the year, such controls were tested and no reportable material weakness in the design or operation was observed. CORPORATE SOCIAL RESPONSIBILITY (CSR) Pursuant to section 135 of the Companies Act, 2013, every company having net worth of Rs. 500 crore or more, or turnover of Rs. 1000 crore or more or a net profit of Rs. 5 crore or more during any financial year shall constitute a Corporate Social Responsibility Committee. Our company has not triggered any of the above limits; hence, no committee in this regard has been constituted. RETIRE BY ROTATION Pursuant to the provisions of section 152(6) of the Companies Act, 2013, Vikram Bhupatbhai Sanghani and Sanjay Harilal Dhamsania, Directors are liable to retire by rotation and being eligible offer themselves for re-appointment. Further, Ms. Dhara S. Shah, additional director, appointed on 29.09.2014, whose tenure expires on the date of this Annual General Meeting and a notice in writing has been received from a member under section 160 of the Companies Act, 2013 proposing her candidature as an independent director of the company for the term of 5 years. She has furnished a declaration under section 149(6) of the Companies Act, 2013 and in the opinion of the Board she fulfils the conditions specified in the Act and rules made there under and is independent of the management. Appointment is recommended by Nomination and Remuneration Committee. BOARD'S RESPONSIBILITY STATEMENT Pursuant to the requirement under section 134(5), of the Companies Act, 2013 with respect to Director's Responsibility Statements, it is hereby confirmed that a) in the preparation of the annual accounts for the year ended March 31, 2015, the applicable accounting standards read with requirements set out under Schedule III to the Act, have been followed and there are no material departures from the same; b) the Directors have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2015 and of the profit of the Company for the year ended on that date; c) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; d) the Directors have prepared the annual accounts on a ‘going concern’ basis; e) the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and f ) the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively FORMAL ANNUAL EVALUATION & POLICY RELATING TO REMUNERATION FOR THE DIRECTORS, KEY MANGERIAL PERSONNEL AND OTHER EMPLOYEES Nomination and remuneration committee has laid down the standard procedure and method for evaluation of performance of each directors, key managerial personnel and members of the committees. Policy for Selection of Directors and determining Directors' independence 1. Introduction 1.1 Ace Software Exports Limited (ASEL) believes that an enlightened and combination of youth with experience Board consciously creates a culture of leadership to provide a long-term vision and policy approach to improve the quality of governance. Towards this, ASEL ensures constitution of a Board of Directors with an appropriate composition, size, diversified expertise and experience and commitment to discharge their responsibilities and duties effectively. 1.2 ASEL recognizes the importance of Independent Directors in achieving the effectiveness of the Board. ASEL aims to have an optimum combination of Executive, Non-Executive and Independent Directors. 2. Scope and Exclusion: 2.1 This Policy sets out the guiding principles for the Nomination and Remuneration Committee for identifying persons who are qualified to become Directors and to determine the independence of Directors, in case of their appointment as independent directors of the Company. 3. Terms and References: In this Policy, the following terms shall have the following meanings: 3.1 "Director" means a director appointed to the Board of a company. 3.2 "Nomination and Remuneration Committee" means the committee constituted by ASEL's Board in accordance with the provisions of Section 178 of the Companies Act, 2013 and Clause 49 of the Equity Listing Agreement, whenever applicable. 3.3 "Independent Director" means a director referred to in sub-section (6) of Section 149 of the Companies Act, 2013 and Clause 49(II)(B) of the Equity Listing Agreement, whenever applicable. 4. Policy: 4.1 Qualifications and criteria 4.1.1 The Nomination and Remuneration Committee (NRC), and the Board, shall review on an annual basis, appropriate skills, knowledge and experience required of the Board as a whole and its individual members. The objective is to have a Board with diverse background and experience that are relevant for the Company's global operations. 4.1.2 In evaluating the suitability of individual Board members, the NRC may take into account factors, such as: • General understanding of the Company's business dynamics, global business and social perspective; Educational and professional background Standing in the profession; Personal and professional ethics, integrity and values; Willingness to devote sufficient time and energy in carrying out their duties and responsibilities effectively. 4.1.3 The proposed appointee shall also fulfill the following requirements: Shall possess a Director Identification Number; Shall not be disqualified under the Companies Act, 2013; Shall give his written consent to act as a Director; Shall endeavour to attend all Board Meetings and wherever he is appointed as a Committee Member, the Committee Meetings; Shall abide by the Code of Conduct established by the Company for Directors and Senior Management Personnel; Shall disclose his concern or interest in any company or companies or bodies corporate, firms, or other association of individuals including his shareholding at the first meeting of the Board in every financial year and thereafter whenever there is a change in the disclosures already made; • Such other requirements as may be prescribed, from time to time, under the Companies Act, 2013, Equity Listing Agreements and other relevant laws. 4.1.4 The NRC shall evaluate each individual with the objective of having a group that best enables the success of the Company's business. 4.2 Criteria of Independence 4.2.1 The NRC shall assess the independence of Directors at the time of appointment / re-appointment and the Board shall assess the same annually. The Board shall re-assess determinations of independence when any new interests or relationships are disclosed by a Director. 4.2.2 The criteria for appointment/re-appointment of independence is as laid down in Companies Act, 2013 and Clause 49 of the Equity Listing Agreement, whenever applicable. 4.2.3 The Independent Directors shall abide by the "Code for Independent Directors" as specified in Schedule IV to the Companies Act, 2013. 4.3 Other directorships / committee memberships 4.3.1 The Board members are expected to have adequate time and expertise and experience to contribute to effective Board performance. Accordingly, members should voluntarily limit their directorships in other listed public limited companies in such a way that it does not interfere with their role as directors of the Company. The NRC shall take into account the nature of, and the time involved in a Director's service on other Boards, in evaluating the suitability of the individual Director and making its recommendations to the Board. 4.3.2 A Director shall not serve as Director in more than 20 companies of which not more than 10 shall be Public Limited Companies. 4.3.3 A Director shall not serve as an Independent Director in more than 7 Listed Companies and not more than 3 Listed Companies in case he is serving as a Whole-time Director in any Listed Company. 4.3.4 A Director shall not be a member in more than 10 Committees or act as Chairman of more than 5 Committees across all companies in which he holds directorships. For the purpose of considering the limit of the Committees, Audit Committee and Stakeholders' Relationship Committee of all Public Limited Companies, whether listed or not, shall be included and all other companies including Private Limited Companies, Foreign Companies and Companies under Section 8 of the Companies Act, 2013 shall be excluded. Remuneration Policy for Directors, Key Managerial Personnel and other employees 1. Introduction 1.1 Ace Software Exports Limited (ASEL) recognizes the importance of aligning the business objectives with specific and measurable individual objectives and targets. The Company has therefore formulated the remuneration policy for its directors, key managerial personnel and other employees keeping in view the following objectives: 1.1.1 Ensuring that the level and composition of remuneration is reasonable and sufficient to attract, retain and motivate, to run the company successfully. 1.1.2 Ensuring that relationship of remuneration to performance is clear and meets the performance benchmarks. 1.1.3 Ensuring that remuneration involves a balance between fixed and incentive pay reflecting short and long term performance objectives appropriate to the working of the company and its goals. 2. Scope and Exclusion: 2.1 This Policy sets out the guiding principles for the Nomination and Remuneration Committee for recommending to the Board the remuneration of the directors, key managerial personnel and other employees of the Company. 3. Terms and References: In this Policy, the following terms shall have the following meanings: 3.1 “Director” means a director appointed to the Board of the Company. 3.2 “Key Managerial Personnel” means (I) the Chief Executive Officer or the managing director or the manager; (ii) the company secretary; (iii) the whole-time director; (iv) the Chief Financial Officer; and (v) such other officer as may be prescribed under the Companies Act, 2013 3.3 “Nomination and Remuneration Committee” means the committee constituted by ASEL’s Board in accordance with the provisions of Section 178 of the Companies Act, 2013 and applicable clause of the Equity Listing Agreement. 4. Policy: 4.1 Remuneration to Executive Directors and Key Managerial Personnel 4.1.1 The Board, on the recommendation of the Nomination and Remuneration Committee (NRC), shall review and approve the remuneration payable to the Executive Directors of the Company within the overall limits approved by the shareholders. 4.1.2 The Board, on the recommendation of the NRC, shall also review and approve the remuneration payable to the Key Managerial Personnel of the Company. 4.1.3 The remuneration structure to the Executive Directors and Key Managerial Personnel shall include the following components: (i) Basic Pay (ii) Perquisites and Allowances (iii) Stock Options (iv) Commission (Applicable in case of Executive Directors) (v) Retiral benefits (vi) Annual Performance Bonus 4.1.4 The Annual Plan and Objectives for Executive Directors and Senior Executives (Executive Committee) shall be reviewed by the NRC and Annual Performance Bonus will be approved by the Committee based on the achievements against the Annual Plan and Objectives. 4.2 Remuneration to Non-Executive Directors 4.2.1 The Board, on the recommendation of the NRC, shall review and approve the remuneration payable to the Non- Executive Directors of the Company within the overall limits approved by the shareholders. 4.2.2 Non-Executive Directors shall be entitled to sitting fees for attending the meetings of the Board and the Committees thereof. 4.3 Remuneration to other employees 4.3.1 Employees shall be assigned grades according to their qualifications and work experience, competencies as well as their roles and responsibilities in the organization. Individual remuneration shall be determined within the appropriate grade and shall be based on various factors such as job profile, skill sets, seniority, experience and prevailing remuneration levels for equivalent jobs. PARTICULARS OF EMPLOYEES The table containing 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 appended as Annexure -3 to the Board's report. There are no employees in the Company drawing remuneration who are in receipt of remuneration of Rs. 60 lakh or more, or employed for part of the year and in receipt of Rs. 5 lakh or more a month, under Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. DISCLOSURE AS REQUIRED UNDER SECTION 22 OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013 The Company has in place an Anti Sexual Harassment Policy in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. The Internal Complaints Committee ("ICC") has been set up to redress the complaints received regarding sexual harassment. All employees are covered under this policy. The following is the summary of the complaints received and disposed off during the financial Year 2014-15: a) No. of complaints received: NIL b) No. of complaints disposed off: NIL VIGIL MECHANISM The Company has established a whistle blower policy and also established a mechanism for directors and employees to report their concerns. The same has been uploaded on the website of the company link to open the policy is <http://acesoftex.com/VIGIL_POLICY.pdf> RELATED PARTY TRANSACTIONS All related party transactions that were entered into during the financial year were on an arm's length basis. There are no materially significant related party transactions made by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of the Company at large. The details of the related party transactions as required under Section 134(3)(h) of the Companies Act 2013, r/w Rule 8 of the Companies (Accounts) Rules, 2014, is attached as Annexure - 4. GENERAL INFORMATION AGM held during the financial year: 9th August, 2014 Disclosure as per schedule V of the Companies Act, 2013 i) all elements of remuneration package is as given in the statement pursuant to section 102 of the notice of the AGM (item no. 6 and 7) ii) Remuneration is decided by the Board on recommendation of the Nomination and Remuneration Committee and it is fixed component basis, details of the remuneration given in past is elaborated in the statement pursuant to section 102 of the notice of the AGM (item no. 6 and 7) iii) Service contracts, notice period, Severance fees;(given in the statement pursuant to section 102 of the notice of the AGM (item no.6 and 7) iv) Stock option: N.A. ACKNOWLEDGEMENT: Your Directors would like to express their appreciation for the assistance and co-operation received from the investors, banks, regulatory and governmental authorities. Your Directors also wish to place on record their deep sense of appreciation for the committed services by the executives, staff of the Company. For & on behalf of Board of Directors Sd/- Vikram B. Sanghani Jt. Managing Director DIN : 00183818 Sd/- Pratik C. Dadhania Director DIN: 02931106 Date: 13.08.2015 Place: Rajkot |