Vakrangee Softwares LTD: Proxy Advisory Report

STAKEHOLDERS EMPOWERMENT SERVICES
Analyze | Educate | Empower
VAKRANGEE SOFTWARES LTD

BSE: 511431 | NSE: VAKRANSOFT | ISIN: INE051B01021 MARKET CAP: 3,859.2 Cr | SECTOR: COMPUTERS
Proxy Advisory Report

Publication Date: 26 Apr 2013
Email: info@sesgovernance.com Website: www.sesgovernance.com
MEETING DETAILS
Type: Postal Ballot | Date: Friday, May 17 , 2013.
th
AGENDA ITEMS & RECOMMENDATIONS

Item 1 Proposals Amendment in Memorandum of Association Recommendation FOR Result
#
# to be updated after the results are announced *Please refer to the detailed analysis SES is a not for profit initiative of like-minded people with a vision to achieve a corporate governance state where all stakeholders are treated in just and fair manner. We believe that this journey can be possible only with active participation of all stakeholders. Our objective is to work in the interest of all stakeholders without creating any disruption anywhere.
The recommendations made by SES are based on publicly available information and conform to SES's stated Proxy-Advisory Guidelines.
Further, SES analysis is recommendatory in nature. SES understands the different investment needs of our clients. Therefore, SES expects that the clients will evaluate the effect of their vote on their investments independently and diligently and will vote accordingly. Subscribers may also carry out an impact analysis of their votes and keep the same as an addendum for their records. In our opinion, Institutional investors are positioned significantly differently from other shareholders due to their ability to engage the board and the management to bring out desired result. As a firm, it is our endeavor to improve the level of corporate governance while not causing any disruption in company's proceedings and therefore we respect the independence of investors to choose alternate methods to achieve similar results.
2013 STAKEHOLDERS EMPOWERMENT SERVICES | Private and Confidential
Page 1 of 7

COMPANY PROFILE
SOURCE: REUTERS, MONEYCONTROL, BSE, BUSINESSWEEK

''Vakrangee House'', Plot No. 66, Marol Co-op. Indl. Estate, Off. M. V. Road, Marol, Mumbai - 400059 Maharashtra VAKRANG On BSE As on 23 Apr 13: 76.80 INR 52 Week High: 78.70 INR 52 Week Low: 29.80 INR Ph: + 91 22 2850 4028 Fax: + 91 22 2850 2017 Email: info@vakrangee.in Website: http://www.vakrangeesoftware.com Dividend (FY 11/12) Dividend per share: 0.20 Earnings per share: 1.35 Dividend payout ratio: 17.21%
Key ratios (Standalone) (As on 23 Apr 13) P/B: 9.32 P/E: 39.59 Beta: 0.37
P/E Ratio (As on 23 Apr '13)

Redington India Mindtree Hexaware Technologies Financial Technologies Vakrangee Softwares 10.17 9.88 13.89 39.59 17.47 160% 140% 120% 100% 80% 60% 40% 20% 0% -20%
Stock Performance (CAGR) as on 31 Mar '13

143% 135%
46% 8% -3% 1 Year 2% -3% 3 Years -1% 5 Years BSE- Midcap 4%
52% 0% 20%
10 years Sensex
Vakrangee Softwares
Graph1: Peer Comparison Price/Earnings Ratio Graph1: Peer Comparison ofof Price/Earnings Ratio
Graph 2: Equity Share Performance vs. Broad Indices
COMPANY DESCRIPTION Vakrangee Softwares Limited provides e-governance related solutions, system integration, and IT enabled services in India and internationally. It offers systems integration for the e-governance sector, including IT solution architecting and designing; IT infrastructure implementation; software design, development, procurement, and implementation; digitization and database management; legacy system and data migration; training and education on new systems; operation and maintenance; and site preparation and maintenance. The company also provides a range of IT enabled services, such as customer interaction services, including call centers; verification and validation; back office operations/revenue accounting, data entry, and data conversion, including finance and accounting, and HR services; content development/animation/engineering and design; and remote education, data search, market research, network consultancy, and management of IT enabled services. In addition, it offers IT infrastructure management services that comprise data centre and desktop management, database administration, Web operations, IT service desk, application management solutions, managed security services, and enterprise systems management; enterprise solutions, which deliver systemic response to enterprise challenges; and enterprise information management services consisting of information management, portals and content management, business intelligence solutions, and data management and architecture. Vakrangee Softwares Limited was incorporated in 1990 and is headquartered in Mumbai, India.
Page 2 of 7

SHAREHOLDING PATTERN
SOURCE: BSE
Shareholding pattern (March 2013)

Total public shareholding: 100% Other 59.97%
Shareholding pattern
100% 43% 79% 65% 3% 36% 6% 12% 23% 0% Mar-10 FIIs Mar-12 DIIs Mar-13 Other 30% 34% 70% 60% 60% 40% 20% 80%
FII 0.06% DII 5.71%
21% Promoters 34.26% Graph 3: Shareholding pattern as on 31st, March 13 Mar-03
19% Mar-08 Promoter
Graph 4: Variation of Shareholding pattern (Figures in %)
Top 1 2 3 4 5 6 7 9 10 11
Public Shareholders (More than 1% shareholding in the company) (Mar13) Abhirati Trading Pvt Ltd Life Insurance Corpration of India Bluepearl Trading Company Pvt Ltd Highpoint Trading Company Pvt Ltd Seahorse Mercantile Company Pvt Ltd Ashtavakra Properties Pvt Ltd Newtree Trading Company Pvt Ltd Vinod Laxminarayan Bohra Cybermetix Automation Pvt Ltd Stock Holdings Corporation of India Ltd
Shares as % of total no of shares 7.84% 5.66% 7.49% 4.92% 4.91% 3.99% 3.90% 2.37% 2.21% 1.67%
Promoter Group shareholders (More than 1% shareholding in the company) (Mar13) Shares as % of total no of shares 1 Vakrangee Holdings Pvt Ltd 13.81% 2 Vakarangee Holdings Pvt Ltd 9.16% 3 Dinesh Nandwana 5.92% 4 Vakarangee Capital Pvt Ltd 5.35% Shareholders should note that a lot of public shareholding is with private limited companies whose ownership details (ultimate beneficial ownership) are unknown.
Page 3 of 7

BOARD PROFILES
SOURCE: ANNUAL REPORT 2011-12
Name Dinesh Nandwana Nishikant Hayatnagarkar Ramesh M. Joshi Anil Patodia Sunil Agarwal B. L. Meena
Director Classification Chairman & MD (Promoter) Executive Independent Independent Independent Independent
Current Other Tenure Directorships 23 14 6 19 11 1 16 3 5 6 -
Other Other Committee Committee Memberships Chairmanships 1 -
Pay (Rs. Lacs) 63.39 37.71 @ @ @ @

2
Stock ownership 14,88,300 38 100 86,519 1 director
Tenure range (average) of independent directors Excessive committee memberships

3
2 - 19 years (9.5 years) 0 director
Excessive directorships : Excessive committee chairmanships

4
(@) The company has said that non-executive directors are paid sitting fee of ` 20,000 for attending every Board meeting & ` 5,000 for attending Committee meetings. However, since the company has not disclosed attendance at all committee meetings, exact remuneration cannot be determined. 2 Excessive directorships : Executive more than 3 outside boards, Non-executives more than 6 outside boards 3 4 Excessive committee memberships : more than 6 outside committees; Excessive committee chairmanships : > 3 outside committees
0 director
Board Analysis Independent directors tenure: Two of the four independent board members have a tenure exceeding 10 years. In our opinion, with longer tenures of association with boards, it becomes difficult for independent directors to remain objective and independent. In line with the Companies Bill 2012, we do not consider a director to be independent if he/ she exceed tenure of 10 years. Board Composition: According to the companys classification, the board of directors consist of four independent directors, and two executive directors. The Chairman of the board is a promoter executive director. According to the listing agreement, at least 50% of the board should be independent if the chairman of the board is a promoter director. On paper, the company has complied with the requirements of the listing agreement. However, out of 4 independent directors, 2 have tenure exceeding 10 years and by SES definition they are not independent, thus reducing strength of independent directors to 33%.
Page 4 of 7

BOARD COMMITTEES SUMMARY
Independence Members Chairman Companys SES Classification Classification 67% 67% 67% 100% 33% 33% 33% 100% Meetings Attendance <75% Ramesh M. Joshi (5/7) Nishikant Hayatnagarkar (2/7) Sunil Agarwal (3/7) B. L. Meena (5/7) Sunil Agarwal (2/4) Not disclosed
Board Audit Committee Investor Grievance Committee Remuneration Committee Nomination Committee
6 3 3 2
Promoter MD Independent Independent Independent
7 4 Not disclosed Not disclosed
No Nomination Committee
Board Committee Analysis Nomination Committee: Shareholders should note that the company has not instituted a nomination committee of the board. SES believes that a nomination committee is a key driver of good corporate governance and plays a vital role in evaluation and appointment of qualified board members. An independent nominating committee increases the autonomy of the director appointment process and therefore increases the independence and objectivity of the board members. We urge shareholders to raise questions regarding an absence of nominating committee. Audit committee: As on 31st March 2012, The Company has constituted an Audit Committee comprising of 4 non-executive directors, 3 of whom are independent directors. However, one of the independent directors has since retired from the Board and by SES definition, only 1 of the director on the committee can be considered to be independent. We believe that an independent Audit Committee is essential to remove conflict of situation interests from audit process and the RPT approval process. We recommend that the company should institute a fully independent Audit Committee.
Page 5 of 7

ITEM 1: AMENDMENT IN MEMORANDUM OF ASSOCIATION FOR
Proposal
The main object in the Memorandum of Association of the Company be and is hereby altered by inserting new objects to the existing main objects.
SES Recommendation SES Analysis
The resolution is an enabling resolution and no concern has been identified. We recommend that shareholders vote FOR the resolution.
The company intends to enter into the business of White Labeled ATM (WLA). As per Reserve Bank of India (RBI) requirements, alteration of the object clause in the Memorandum of Association (MoA) of the Company is needed for the same. Accordingly, the Company is seeking shareholders approval for inserting new objects to the existing main objects.
Page 6 of 7

DISCLAIMER While SES has made every effort and has exercised due skill, care and diligence in compiling this report based on publicly available information, it neither guarantees its accuracy, completeness or usefulness, nor assumes any liability whatsoever for any consequence from its use. This report does not have any approval, express or implied, from any authority, nor is it required to have such approval. The users are strongly advised to exercise due diligence while using this report. This report in no manner constitutes an offer, solicitation or advice to buy or sell securities, nor solicits votes or proxies on behalf of any party. SES, which is a not-for-profit Initiative or its staff, has no financial interest in the companies covered in this report except what is disclosed on its website. The report is released in India and SES has ensured that it is in accordance with Indian laws. Person resident outside India shall ensure that laws in their country are not violated while using this report; SES shall not be responsible for any such violation. This report may not be reproduced in any manner without the written permission of Stakeholder Empowerment Services Pvt. Ltd. All disputes subject to jurisdiction of High Court of Bombay, Mumbai All rights reserved.
Page 7 of 7

Vakrangee Softwares LTD: Proxy Advisory Report

Загружено:

Сведения о документе

Оригинальное название

Авторское право

Доступные форматы

Поделиться этим документом

Поделиться или встроить документ

Параметры публикации

Этот документ был вам полезен?

Это неприемлемый материал?

Авторское право:

Доступные форматы

Vakrangee Softwares LTD: Proxy Advisory Report

Загружено:

Авторское право:

Доступные форматы

STAKEHOLDERS EMPOWERMENT SERVICES

Analyze | Educate | Empower