|BSE: 512341||Sector: IT|
|NSE: N.A.||ISIN Code: INE396F01013|
|BSE LIVE 05:30 | 01 Jan||Stock Is Not Traded.|
|NSE LIVE 05:30 | 01 Jan||Stock Is Not Traded.|
|BSE: 512341||Sector: IT|
|NSE: N.A.||ISIN Code: INE396F01013|
|BSE LIVE 05:30 | 01 Jan||Stock Is Not Traded.|
|NSE LIVE 05:30 | 01 Jan||Stock Is Not Traded.|
The Members of M/s. CES LIMITED
(Formerly Known as Serve All Enterprise Solutions Limited)
The Directors have pleasure in presenting the 30th Annual Report of theCompany together with the Audited Accounts for the year ended on 31st March2015 (01.07.2014 to 31.03.2015).
BUSINESS PERFORMANCE OF THE COMPANY
To comply with the provisions 2(41) of Companies act 2013 during the current financialyear our company has changed its financial year ending from 1st July 2014 to 31stMarch 2015. As the current financials of our company are prepared for 9 months we can'tcompare financial results of current year with the previous year.
Standalone: When we compare financial results (9 Months) of the current period withthe previous period (9 Months) financial results our revenue increased to Rs. 326.078Million from Rs. 249.78 Million and our profit after tax (PAT) increased from Rs. 42.06Million to Rs. 46.29 Million.
Consolidated: When we compare Consolidated financial results (9 Months) of thecurrent period with the previous period (9 Months) Consolidated financial results ourrevenue increased from Rs. 773.27 Million to Rs. 914.90 Million and our Consolidatedprofit after tax (PAT) increased from Rs. 37.986 Million to Rs. 54.242 Million.
COMMITTEES OF THE BOARD
NOMINATION & REMUNERATION COMMITTEE
CORPORATE SOCIAL RESPONSIBILITY COMMITTEE
DURING THE FINANCIAL YEAR 2014-15 (NINE MONTHS) SEVEN BOARD MEETINGS WERE HELD ASFOLLOWS:
16th July 201430th August 2014 14th November 2014 6thDecember 2014 31 December 2014 13th February 2015 and 24th March2015.
FINANCIALS OF SUBSIDIARY COMPANY
Pursuant section 129 sub section (3) the financials of subsidiary are as per Annexure-I EXTRACT OF ANNUAL RETURN
Pursuant to section 134 sub section (3) (a) the extract of annual return enclosed in Annexure-II
DIRECTORS' RESPONSIBILITY STATEMENT
To the best of their knowledge and belief and according to the information andexplanations obtained by them your Directors make the following statements in terms ofSection 134 of the Companies Act 2013:
(a) That in the preparation of the annual accounts/financial statements for thefinancial year ended 31st March 2015 the applicable accounting standards hadbeen followed along with proper explanation relating to material departures if any;
(b) That the accounting policies as mentioned in the financial statements wereselected and applied consistently and reasonable and prudent judgments and estimates weremade so as to give a true and fair view of the state of affairs of the company at the endof the financial year and of the profit and loss of the company for that period;
(c) That proper and sufficient care had been taken for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the company and for preventing and detecting fraud and otherirregularities;
(d) That the annual accounts were prepared on a going concern basis;
(e) That proper internal financial controls were in place and that such internalfinancial controls are adequate and were operating effectively; and
f That proper systems to ensure compliance with the provisions of all applicablelaws were in place and that such systems were adequate and operating effectively.
Statutory / Financial Audit
M/s P. Murali & Co Chartered Accountants (Regn No. 007257S) retire at the ensuingAnnual General Meeting and are eligible for re-appointment. The Company has receivedconfirmation that their appointment will be within the limits prescribed under Section 141of the Companies Act 2013
Pursuant to the provisions of Section 204 of the Companies Act 2013 and The Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hasappointed Mr. Abhinav Shrivastava Company Secretaries in Practice (C.P No. 11461) toundertake the Secretarial Audit of the Company. The Report of the Secretarial Audit Reportis annexed herewith as Annexure- III.
Pursuant to provisions of section of 138 of Companies Act 2013 and Companies (Accounts)Rules 2014 Board of Directors appointed Ram Mohan & Associates. (Regn No.007700S) asInternal Auditors of the Company
THE MANAGEMENT DISCUSSION AND ANALYSIS REPORT
India is the world's largest sourcing destination for the information technology (IT)industry accounting for approximately 52 per cent of the US$ 124-130 billion market. Theindustry employs about 10 million Indians and continues to contribute significantly to thesocial and economic transformation in the country. The IT industry has not onlytransformed India's image on the global platform but has also fueled economic growth byenergizing the higher education sector especially in engineering and computer science.India's cost competitiveness in providing IT services continues to be its unique sellingproposition (USP) in the global sourcing market. The Indian IT and ITeS industry isdivided into four major segments - IT services business process management (BPM)software products and engineering services and hardware. The IT-BPM sector in India grewat a compound annual growth rate (CAGR) of 25 per cent over 2000-2013 which is 3-4 timeshigher than the global IT-BPM spend and is estimated to expand at a CAGR of 9.5 per centto US$ 300 billion by 2020.
India the fourth largest base for young businesses in the world and home to 3000 techstart-ups is set to increase its base to 11500 tech start-ups by 2020 as per a reportby Nasscom and Zinnov Management Consulting Pvt Ltd. India's internet economy is expectedto touch Rs.10 trillion (US$ 161.26 billion) by 2018 accounting for 5 per cent of thecountry's gross domestic product (GDP) according to a report by the Boston ConsultingGroup (BCG) and Internet and Mobile Association of India (IAMAI). In December 2014India's internet user base reached 300 million the third largest in the world while thenumber of social media users and smartphones grew to 100 million. Public cloud servicesrevenue in India is expected to reach US$ 838 million in 2015 growing by 33 per centyear-on-year (y- o-y) as per a report by Gartner Inc. In yet another Gartner report thepublic cloud market alone in the country was estimated to treble to US$ 1.9 billion by2018 from US$ 638 million in 2014. The increased internet penetration and rise ofe-commerce are the main reasons for continued growth of the data center co-location andhosting market in India.
Indian IT's core competencies and strengths have placed it on the international canvasattracting investments from major countries. The computer software and hardware sector inIndia attracted cumulative foreign direct investment (FDI) inflows worth US$ 13788.56million between April 2000 and December 2014 according to data released by the Departmentof Industrial Policy and Promotion (DIPP). The private equity (PE) deals increased thenumber of mergers and acquisitions (M&A) especially in the e-commerce space in 2014.The IT space including e-commerce witnessed 240 deals worth US$ 3.8 billion in 2014 asper data from Dealogic. India also saw a ten-fold increase in the venture funding thatwent into internet companies in 2014 as compared to 2013. More than 800 internet startupsgot funding in 2014 as compared to 200 in 2012 said Rajan Anandan Managing DirectorGoogle India Pvt Ltd and Chairman IAMA. Most large technology companies may have so farfocused primarily on bigger enterprises but a report from market research firm Zinnovhighlighted that the small and medium businesses will present a lucrative opportunityworth US$ 11.6 billion in 2015 and US$ 25.8 billion in 2020. Moreover India has nearly 51million such businesses of which 12 million have a high degree of technology influence andare looking to adopt newer IT products as per the report.
The adoption of key technologies across sectors spurred by the 'Digital IndiaInitiative' could help boost India's gross domestic product (GDP) by US$ 550 billion toUS$ 1 trillion by 2025 as per research firm McKinsey.
Some of the major initiatives taken by the government to promote IT and ITeS sector inIndia are as follows:
India and the United States (US) have agreed to jointly explore opportunitiesfor collaboration on implementing India's ambitious Rs 1.13 trillion (US$ 18.22 billion)'Digital India Initiative'. The two sides also agreed to hold the US- India Informationand Communication Technology (ICT) Working Group in India later this year.
India and Japan held a Joint Working Group conference for ComprehensiveCooperation Framework for ICT. India also offered Japan to manufacture ICT equipment inIndia.
The Government of Telangana began construction of a technology incubator inHyderabad-dubbed T-Hubto reposition the city as a technology destination. The stategovernment is initially investing Rs 35 crore (US$ 5.64 million) to set up a 60000 sq ftspace labelled the largest start-up incubator in the county at the campus ofInternational Institute of Information Technology-Hyderabad (IIIT-H). Once completed theproject is proposed to be the world's biggest start-up incubator housing 1000 start-ups.
Bengaluru has received US$ 2.6 billion in venture capital (VC) investments in2014 making it the fifth largest recipient globally during the year an indication of thegrowing vibrancy of its startup ecosystem. Among countries India received the thirdhighest VC funding worth US$ 4.6 billion.
Internet should be a basic human right say 87 per cent of internet users in Indiacompared with 83 per cent globally according to a report by Centre for InternationalGovernance Innovation (CIGI). India continues to be the topmost offshoring destination forIT companies followed by China and Malaysia in second and third position respectively.Emerging technologies present an entire new gamut of opportunities for IT firms in India.Social mobility analytics and cloud (SMAC) collectively provide a US$ 1 trillionopportunity. Cloud represents the largest opportunity under SMAC increasing at a CAGR ofapproximately 30 per cent to around US$ 650-700 billion by 2020. Social media is thesecond most lucrative segment for IT firms offering a US$ 250 billion market opportunityby 2020. The US$ 12 billion plus rising Indian e-commerce business market is witnessing arush of hiring and may need 100000 people over the next six months as per industryexperts. The industry offers a slew of opportunities and scope for innovation therebyattracting the young mind to push their limits.
CHANGES & DEVELOPMENTS DURING THE YEAR AND THEREAFTER:
Opening of the Branch office in USA:
The Company is pleased to announce that a branch office was incorporated under the name"CES Limited LLC" in Detroit USA to spread its business. This branch isgoing to increase the customer base of the Company and make the marketing distributionand delivery of its products and easier and more effective. This branch of the Companywill bring its product closer to the customers by increasing their accessibility to it.
STATUS OF WARRANTS ALLOTTED
Pursuant to the sanctioned Scheme of Arrangement between CES Private Limited(Transferor Company) and CES Limited (Formerly known as Serve All Enterprise SolutionsLtd) (Transferee Company) the Company issued & allotted 8700000 warrants to beconverted into fully paid equity shares of Rs 10/- each with in a period of 18
months from the date of allotment i.e. 4th March 2013 to the shareholdersof CES Private Limited and the Company has not received any request for the conversion ofthese warrants to equity shares within the previously
mentioned period hence the warrants lapsed on 4th September 2014. This wasintimated to the Stock Exchanges where the equity shares of the Company were listed.
START UP OF ACTIVITIES AT RAMKY SELENIUM GACHIBOWLI HYDERABAD:
The Company is pleased announce that it has purchased a property of 24550 Square Feetat 7th Floor Ramky Selenium Nanakramguda Gachibowli Hyderabad - 08 fromShriram Ventures Limited Chennai. This property is located in the Financial DistrictHyderabad which is the new landmark for the back-office operations of banking insuranceand financial institutions.
The Company has spent Rs.30 million for interiors and ample infrastructure to make itas ultra-modern Service Delivery Centre (SDC) and this is expected to be operational byfirst week of September 2015.
STATEMENT OF DECLARATION BY INDEPENDENT DIRECTORS -149(6)
The Company has received Certificate of Independence from Independent Director inter-aliapursuant to Section 149 of the Companies Act 2013 confirming and certifying that theyhave complied with all the requirements of being an Independent Director of the Company.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENT (SECTION 186)
During the financial year no such instance.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES (188(1))
All the contracts/ arrangements/ transactions that were entered into by the Companyduring the financial year with related parties were on an arm's length basis and in theordinary course of business. During the year the Company had entered into any contract/arrangement with related parties i.e with it whole own U S A Subsidiary i.e CES USA Inc.which could be considered material in accordance with the policy of the Company onmateriality of related party transaction. All Related Party Transactions are approved bythe Board and Shareholders of the Company.
During the Financial year 2014-15 Company has not accepted any Public deposits.
The Company has two Subsidiaries which are as follows:
CES USA Inc. (USA based 100% wholly own subsidiary Company).
CES Information Technologies Private Limited (70 % Stake held by the Company)
HUMAN RESOURCES & INDUSTRIAL RELATIONS
At CES human capital has always been the most valuable asset of the Company. Ouremployees represent the backbone of the corporate success. The Company provides itsemployees a transparent and level playing work environment that fosters the culture ofcollaborative working meritocracy and on-the-job career progression.
The Company believes in fair employment practices and is committed to provide anenvironment that ensures that every employee is treated with dignity and respect andafforded equitable treatment. The Company has zero tolerance for sexual harassment at itsworkplaces and has adopted a Policy on Prevention Prohibition and Redressal of SexualHarassment at the Workplace in line with the provisions of the Sexual Harassment of Womenat Workplace (Prevention Prohibition and Redressal) Act 2013 and the Rules there under.The Company has not received during the year any concerns including sexual harassmentcomplaints.
INTERNAL CONTROL SYSTEMS & THEIR ADEQUACY
The Company has in place adequate systems of internal control commensurate with itssize and the nature of its operations. These have been designed to provide reasonableassurance with regard to recording and providing reliable financial and operationalinformation complying with applicable statutes safeguarding assets from unauthorized useor losses and ensuring compliance of corporate policies. Also the Company reviews fromtime- to- time the adequacy of internal control checks in the system and covers allsignificant areas of the Company's operations such as software delivery accounting andfinance procurement employee engagement and IT processes in the Company.
The Company is pleased to announce that it has successfully achieved the Industry levelbest practices compliance certifications like
ISO 9001: 2008 for Quality Management Systems
ISO 27001 for Information Security and Data Privacy Systems
SOC -Type - 1 (Statement of Controls)
The Company has also kicked off the achievement process for the other prestigiouscertifications like CMMi -SVC andSOC -Type -II (Statement of Controls) to maintain thehigher Quality and IT Security standards of the industry.
During the Financial year the Board of Directors appointed Mrs. Aruna KrishnaSabbineni (06997005) and Mr. Murali Krishna Tummala (01889806) as additional Directors ofthe Company and are proposed to be appointed as Director liable to retire by rotation.
Board & Directors' Evaluation
Pursuant to the provisions of the Companies Act 2013 and Clause 49 of the ListingAgreement the Board its Committees and the Directors have carried out annual evaluation/ annual performance evaluation covering various aspects of the Board's functioning suchas adequacy of the composition of the Board and its Committees Board culture executionand performance of specific duties obligations and governance. The performance evaluationof the Independent Directors was carried out by the entire Board. The performanceevaluation of the Non-Independent Directors was carried out by the Independent Directorwho also reviewed the flow of information between the Company's Management and the Boardin terms of quality quantity and timeliness. The Directors expressed their satisfactionwith the evaluation process.
Directors' Appointment and Remuneration Policy
The Nomination and Remuneration Committee is responsible for developing competencyrequirements for the Board based on the industry and strategy of the Company andformulates the criteria for determining qualifications positive attributes andindependence of Directors in terms of provisions of Section 178 (3) of the Act and Clause49 of the Listing Agreement. The Board on the recommendations of the Nomination &Remuneration Committee framed a policy for remuneration of the Directors. The objective ofthe Company's remuneration policy is to attract motivate and retain qualified and expertindividuals that the company needs in order to achieve its strategic and operationalobjectives whilst acknowledging the societal context around remuneration and recognizingthe interests of Company's stakeholders.
INFORMATION REQUIRED UNDER SECTION 197 OF THE COMPANIES ACT 2013 READ WITH RULE 5(1)OF THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES 2014
(i) The Ratio of the remuneration of each Director to the median remuneration of theemployees of the Company for the financial year 2014-15.
Mr. Mohan Rao Kancharla was appointed as Whole Time Director on 14thNovember 2014 and remuneration paid to Director has been since February 2015 accordinglymedian cannot be calculated.
(ii) The percentage increase in remuneration of each Director Managing Director &Chief Executive Officer Chief Financial Officer and Company Secretary of the Company inthe financial year 2014-15.
The Whole-Time Director Chief Financial Officer and Company Secretary was appointed asKey Managerial Personnel on 14th November 2014 and accordingly during the financial yearthere were no review for them.
(iii) The percentage increase in the median remuneration of employees in the financialyear 2014-15 : 11.95%
(iv) The number of permanent employees on the rolls of Company
The Permanent employees on rolls of the Company were 564 as on 31st March2015.
(v) The explanation on the relationship between average increase in remuneration andCompany performance.
On an average employees received an annual increase of 11.16% in the current financialyear. The individual increments varied based on individual performance.
(vi) Comparison of the remuneration of the Key Managerial Personnel against theperformance of the Company.
The Company Appointed Key Managerial Personnel on 14th November 2014 and theCompany has Nine Months Financial Year. The Four and half months is too short to CalculatePerformance of Company to Performance Key managerial Personnel performance.
(vii) Variations in the market capitalization of the Company price earnings ratio asat the closing date of the current financial year and previous financial year andpercentage increase or decrease in the market quotations of the shares of the Company incomparison to the rate at which the Company came out with the last public offer
There is no Variation in the Market Capitalization of Company however the priceearnings ratio of the Company for FY 2014-15 is Re. 0.23 compared to Re.0.18 for FY2013-14.
(viii) Average percentile increase already made in the salaries of employees other thanthe managerial personnel in the last financial year and its comparison with the percentileincrease in the managerial remuneration and justification thereof and point out if thereare any exceptional circumstances for increase in the managerial remuneration
The average annual increase in the salaries of employees was around 11.16%. During thecurrent financial year there is no review for managerial personnel as the appointmentswere made on 14th November 2014.
(ix) The comparison of the each remuneration of Key Managerial Personnel against theperformance of the Company during the Financial Year 2014-15 is as under:
The Company Appointed Key Managerial Personnel on 14th November 2014 and theCompany has Nine Months Financial Year. The Four and half Months is too short to CalculatePerformance of Company to Performance Key managerial personnel performance.
(x) The key parameters for any variable component of remuneration availed by theDirectors.
The Key parameters for remuneration policy is as decided by Nomination &Remuneration Committee and also approved by the Board of Directors
(xi) The ratio of the remuneration of the highest paid Director to that of theemployees who are not Directors but receive remuneration in excess of the highest paidDirector during the year.
There are 98 employees as on 31st March 2015 who are receiving highersalary than Director; the ratio is 1: 99
(xii) Affirmation that the remuneration is as per the Remuneration Policy of theCompany Pursuant to Rule 5(1)(xii) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 it is affirmed that the remuneration paid to theDirectors KMPs Senior Management and other employees of the Company is as per theRemuneration Policy of the Company.
INFORMATION ON STOCK EXCHANGES
The Equity shares of the Company are listed on BSE Limited and the Ahmedabad StockExchange of India Limited and the Listing Fees have been paid to them up-to-date.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
Brief outline on the CSR Policy
a. The Company continues to earmark a corpus every year for CSR activities. The Boardunder the guidance of CSR Committee is responsible for CSR initiatives of the Company. Themission of Company committed to being to implement "Swach Bharat" atCorporate Social Responsibility Policy. The CSR Committee has framed and formulated a CSRPolicy indicating the activities to be undertaken by the Company in accordance withschedule VII of the Act and the Companies (Corporate Social Responsibility Policy) Rules2014 issued under the Act. The same has also been approved by the Board.
The CSR activities as per the provisions of the Act may also be undertaken by theCompany through registered trust. Accordingly CES Foundation is formed forpromoting " Swach Bharat Abhiyan" and other activities mentioned inschedule VII of Companies Act 2013.
The Company has Rs 1147000/- Being two percent of Average net profits of last threeyears.
b. Average Profit before Tax for last 3 Financial Years.
VIGIL MECHANISM / WHISTLE BLOWER POLICY
In terms of the requirements of the Companies Act 2013 and Clause 49 of the ListingAgreement the Company has a vigil mechanism to deal with instance of fraud andmismanagement if any. The Audit Committee reviews the functioning of the vigil/whistleblower mechanism from time to time. There were no allegations/disclosures/concernsreceived during the year under review in terms of the vigil mechanism established by theCompany.
NO DIVIDENDS DECLARED FOR FINANCIAL YEAR 2014-15:
The Company is at expansion mode; therefore Board is of Opinion that there is no needto declare dividends. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGNEXCHANGE
The information on conservation of energy technology absorption and foreign exchangeearnings and outgo stipulated under Section 13 (3) (m) of the Companies Act 2013 readwith Rule 8 of the Companies (Accounts) Rules 2014 to this report.
(a) Conservation of Energy:
This year we devoted considerable attention on methods and approaches to conservepower. Significant steps taken in this regard include the following:-
Turning off monitors during weekends.
Hibernation of Desktops & notebook computers when not in use.
Turning off lights in all floors when not working.
Turning off the Air Conditioners during non-peak hours and on weekends.
(b) (i) Technology Absorption adaptation and innovation:-
As you would appreciate technology is witnessing rapid change. Since our customersexpect us to lead them through such change we proactively & continuously invest indeveloping technology building blocks and solution frameworks which add value to ourcustomers' business. Company uses a multi-pronged strategy for developing technologyassets and to promote innovation. These technology initiatives are driven by each businessunit based on the trends they see in their respective markets. These efforts help us intwo ways (i) gain our customers' trust & confidence; and (ii) attract & retain keytalent who see the Company as a more exciting place to work in.
(ii)Research and Development( R&D):
Your company carries out various research and development initiatives to addressdifferent market segment. (c ) Foreign Exchange earnings and outgo:
FORM AOC.1 (Annexure -I)
Statement containing salient features of the financial statement ofsubsidiaries/associate companies/joint ventures [Pursuant to first proviso to sub-section(3) of Section 129 read with Rule 5 of Companies (Accounts) Rules 2014]
Part "A": Subsidiaries
(Rs. In Lakhs)
Salient features of the financial statement of subsidiaries are included in theabove statement by considering 9 months results for the respective subsidiaries.
ANNEXURE -III (Secretarial Audit Report)
FORM NO. MR-3 SECRETARIAL AUDIT REPORT
FOR THE FINANCIAL YEAR ENDED MARCH 31 2015
[Pursuant to Section 204(1) of the Companies Act 2013 and Rule No. 09 of the Companies(Appointment and
Remuneration Personnel) Rules 2014]
Plot No.42 Sagar Society
Road No.2 Banjara Hills Hyderabad Telangana- 500034
I Abhinav Shrivastava Practicing Company Secretary have conducted the SecretarialAudit of the compliance of applicable statutory provisions and the adherence to goodcorporate practices by M/s. CES Limited (hereinafter called the "Company").Secretarial Audit was conducted in a manner that provided us reasonable basis forevaluating the corporate conducts/statutory compliances and expressing our opinionthereon.
Based on our verification of the Companies books papers minute books forms andreturns filed and other records maintained by such Company and also the informationprovided by the Company its officers agents and authorised representatives during theconduct of secretarial audit I hereby report that in my opinion the Company has duringthe audit period covering the financial year ended on March 31 2015 complied with theStatutory provisions listed hereunder and also that the Company has proper Board-processesand compliance-mechanism in place to the extent in the manner and subject to the extentin the manner and subject to the reporting made hereinafter.
I have examined the books papers minute books forms and returns filed and otherrecords maintained by M/s. CES Limited for the financial year ended on March 312015 according to the provisions of;
1. The Companies Act 2013 (the Act) and the rules made there under;
2. The Securities Contracts ( Regulation) Act 1956(SCRA) and the rules made thereunder;
3. The Depositories Act 1996 and the Regulations and Bye-law framed hereunder;
4. Foreign Exchange Management Act 1999 and the rules and regulations made there underto the extent of Foreign Direct Investment and Overseas Direct Investment;
5. The following Regulations and Guidelines prescribed under the Securities andExchange Board of India 1992 ( ' SEBI Act');
(a) The Securities and Exchange Board of India( Substantial Acquisition of Shares andTakeovers) Regulations 2011;
(b) The Securities and Exchange Board of India ( Prohibition of Insider Trading)Regulations 1992;
(c) The Securities and Exchange Board of India ( Issue of Capital and DisclosureRequirements) Regulations 2009;
(d) The Securities and Exchange Board of India (Employee Stock Option Scheme andEmployee Stock Purchase Scheme) Guidelines 1999;
(e) The Securities and Exchange Board of India ( Issue and Listing of Debt Securities)Regulations 2008;
(f) The Securities and Exchange Board of India ( Registration to an Issue and ShareTransfers Agents ) Regulations 1993;
(g) The Securities and Exchange Board of India ( Delisting of Equity Shares)Regulations 2009;
(h) The Securities and Exchange Board of India (Buyback of Securities ) Regulations1998;
6. Other Laws applicable to the Company;
i. Employee State Insurance Act 1948
ii. Equal Remuneration Act 1976
iii. The Employment Exchanges (Compulsory Notification of Vacancies) Act 1959
iv. The Employee Provident Fund and Miscellaneous Provisions Act 1952
v. The Payment of Gratuity Act 1972
vi. The Maternity Benefits Act 1961
vii. The Income Tax Act 1961
viii. Shops and Establishments Act 1948
ix. The Finance Act 1994
I have also examined compliance with the applicable Listing Agreement clause for thefollowing;
I. The Listing Agreements entered into by the Company with Bombay Stock Exchange andAhmedabad Stock Exchange;
II. The Company's main business is into IT enabled services and to ancillary servicesthereto.
During the period under review the Company has complied with the provisions of the ActRules Regulations Guidelines Standards etc mentioned above subject to the followingobservations:
1. That the Company being a listed public company had only 1 independent in the 1stquarter of the financial year i.e. July to September 2014 however in 2nd and3rd quarter the company has duly appointed the independent director as per therequirement of section 149(4) of Companies Act 2013.
2. As per section 177 of Companies Act 2013 read with applicable rules the Companyshall have a minimum of 3 directors with independent director forming the majority toconstitute valid audit committee. However the Company only had 1 independent in the 1stquarter of the financial year therefore no such committee was formed. Thereafter in 2ndand 3rd quarter of the financial year the Company has duly appointed theindependent director and constituted an Audit Committee.
3. As per section 178 of Companies Act 2013 read with applicable rules the Companyshall have a minimum of 3 directors out of which not less than one half shall beindependent directors in order to constitute valid quorum for Nomination and RemunerationCommittee. However the Company had only 1 independent in the 1st quarter of thefinancial year therefore no such committee was formed. Thereafter in 2nd and 3rdquarter the Company has duly appointed the independent director and constituted aNomination and Remuneration Committee.
4. That the Company has floated an entity in United States of America in the name andstyle of "CES Limited LLC" on May 2014 however in this regard the Company hasnot filed form ODI 1 and form APR in pursuant to the master circular no. 11/2013-14 issuedby Reserve Bank of India on July 01 2013.
5. As per the circular CIR/CFD/POLICY CELL/7/2014 dt.15 September 2014 the Clause 49of the Listing Agreement shall be applicable to all companies whose equity shares arelisted on a recognized stock exchange. However compliance with the provisions of clause49 shall not be mandatory for the time being in respect of the Companies having paid upequity share capital not exceeding Rs. 10 crore and Net Worth not exceeding Rs. 25 croreas on the last day of previous financial year; provided that where the provisions ofclause 49 becomes applicable to a company at a later date such company shall comply withthe requirements of Clause 49 within 6 months from the date on which the provisions becameapplicable to the company.
I further report that
Except the remarks laid in this report the Board of Directors of the Company is dulyconstituted with proper balance of Executive Directors Non-Executive Directors andIndependent Directors. The changes in the composition of the Board of Directors that tookplace during the period under review were carried out in compliance with the provisions ofthe Act.
Adequate notice is given to all Directors to schedule the Board Meetings agenda anddetailed notes on agenda were sent at least seven days in advance and a system exists forseeking and obtaining further information and clarification on the agenda items before themeeting and for meaningful participation at the meeting.
All decision at Board Meetings and Committee Meetings are carried unanimously asrecorded in the minutes of the Meetings of the Board of Directors or Committee of theBoard as the case may be.
I further report that there are adequate systems and processes in the Companycommensurate with the size and operations of the Company to monitor and ensure compliancewith applicable laws rules regulations and guidelines.
I further report that I have not examined the books papers minute books formsand returns filed and other records maintained by subsidiaries and associates companies ofM/s. CES Limited for the financial year ended on March 31 2015.
I further report that for the purpose of the Income Tax Act 1961 and rules madethereon I have relied on the audit report issued by the statutory auditor of the Company.Our examination in respect of the same is based solely on reports of the statutoryauditor.
Note: This report is to be read with our letter of event date which is annexed as"ANNEXURE A" and forms an integral part if this report.
Plot No.42 Sagar Society
Road No.2 Banjara Hills Hyderabad Telangana- 500034
My report of event date is to be read along with this letter.
1. Maintenance of Secretarial records is the responsibility of the management of theCompany. Our responsibility is to express an opinion on these secretarial records based onour audit.
2. I have followed the audit practices and processes as were appropriate to obtainreasonable assurance about the correctness of the contents of the Secretarial records. Theverification was done on the test basis to ensure that correct facts are reflected inSecretarial records. I believe that the processes and practices I followed provide areasonable basis for our opinion.
3. I have not verified the correctness and appropriateness of financial records andbooks of accounts of the Company. I have relied on the audit report issued by thestatutory auditor of the Company.
4. Where ever required I have obtained the Management representation about complianceof laws rules and regulations and happenings of events etc.
5. The compliance of provisions of Corporate and other applicable laws rulesregulations standards is the responsibility of the management; my examination was limitedto the verification of procedures on test basis.
6. The Secretarial Audit Report is neither an assurance as to the future viability ofthe Company nor of efficacy or effectiveness with which the management has conducted theaffairs of the Company.
E Voting Instructions Details:
The instructions for shareholders voting electronically are as under:
Pursuant to provisions of Section 108 of the Companies Act 2013 and Rule 20 of theCompanies (Management and Administration) Rules 2014 as amended by the Companies(Management and Administration) Amendment Rules 2015 and Clause 35B of the ListingAgreement the Company is pleased to provide members facility to exercise their right tovote at the Annual General Meeting (AGM) by electronic means and the business may betransacted through e-Voting Services. The facility of casting the votes by the membersusing an electronic voting system from a place other than venue of the AGM ("remotee-voting") will be provided by National Securities Depository Limited (NSDL).
The Company has approached NSDL for providing e-voting services through our e-votingplatform. In this regard your Demat Account/Folio Number has been enrolled by the Companyfor your participation in e-voting on resolution placed by the Company on e-Voting system.
The Notice of the Annual General Meeting (AGM) of the Company inter alia indicating theprocess and manner of e-Voting process along with printed Attendance Slip and Proxy Formcan be downloaded from the link https://www.evoting.nsdl.com
The e-voting period commences on September 26th 2015 (10:00 am) and ends onSeptember 28 2015 (5:00 pm).
During this period shareholders' of the Company may cast their vote electronically.The e-voting module shall also be disabled for voting thereafter. Once the vote on aresolution is cast by the shareholder the shareholder shall not be allowed to change itsubsequently.
The voting rights of members shall be in proportion to their shares of the paid upequity share capital of the Company as on the cut-off date of 23rd September2015. Any person who acquires shares of the Company and become member of the Companyafter dispatch of the notice and holding shares as of the cut-off date i.e.23rd September 2015 may obtain the login ID and password by sending a request at email@example.com (company/ RTA email id ) .
NOTE: The "remote e-voting" end time shall be 5:00 p.m. on 28thSeptember 2015 and the cut-off date shall be 23rd September 2015
The facility for voting through ballot paper / Poling Paper shall be made available atthe AGM and the members attending the meeting who have not cast their vote by remotee-voting shall be able to exercise their right at the meeting through ballot paper/polingPaper.
NOTE: The Facility for Voting at AGM shall be decided by the company i.e. "BallotPaper" or "Poling Paper
The procedure to login to e-Voting website is given below:
1. Open the attached PDF file "e-Voting.pdf" giving your Client ID (in caseyou are holding shares in demat mode)
or Folio No. (in case you are holding shares in physical mode) as password whichcontains your "User ID" and "Password for e-voting". Please note thatthe password is an initial password. You will not receive this PDF file if you are alreadyregistered with NSDL for e-voting
2. Launch internet browser by typing the URL https://www.evoting.nsdl.com/
3. Click on "Shareholder - Login".
4. Put User ID and password as initial password noted in step (1) above and ClickLogin. If you are already registered with NSDL for e-voting then you can use your existinguser ID and password. If you forgot your password you can reset your password by using"Forgot User Details/Password" option available on www.evoting.nsdl.com
5. Password Change Menu appears. Change the password with new password of your choicewith minimum 8 digits/characters or combination thereof.
6. Home page of remote "e-Voting" opens. Click on e-Voting: Active VotingCycles.
7. Select "EVEN" of CES Limited. Members can cast their vote online fromSeptember 26th 2015 (10:00 am) and
ends on September 28 2015 (5:00 pm)
Note: e-Voting shall not be allowed beyond said time.
8. Now you are ready for "e-Voting" as "Cast Vote" page opens.
9. Cast your vote by selecting appropriate option and click on "Submit" andalso "Confirm" when prompted.
10. Institutional shareholders (i.e. other than Individuals HUF NRI etc.) are alsorequired to send scanned copy (PDF/JPG Format) of the relevant Board Resolution/AuthorityLetter etc. together with attested specimen signature of the duly authorizedsignatory(ies) who are authorized to vote to the Scrutinizer through firstname.lastname@example.org with a copy marked to email@example.com.
Please note the following:
A member may participate in the AGM even after exercising his right to vote throughremote e-voting but shall not be allowed to vote again at the AGM.
A person whose name is recorded in the register of members or in the register ofbeneficial owners maintained by the depositories as on the cut-off date only shall beentitled to avail the facility of remote e-voting as well as voting at the AGM throughballot paper.
The Chairman shall at the AGM at the end of discussion on the resolutions on whichvoting is to be held allow voting with the assistance of scrutinizer by use of ballotpaper for all those members who are present at the AGM but have not cast their votes byavailing the remote e-voting facility.
The Scrutinizer shall after the conclusion of voting at the general meeting will firstcount the votes cast at the meeting and thereafter unblock the votes cast through remotee-voting in the presence of at least two witnesses not in the employment of the Companyand shall make not later than three days of the conclusion of the AGM a consolidatedscrutinizer's report of the total votes cast in favour or against if any to the Chairmanor a person authorized by him in writing who shall countersign the same and declare theresult of the voting forthwith
o Login to e-voting website will be disabled upon five unsuccessful attempts to key-inthe correct password. In such an event you will need to go through 'Forgot Password'option available on the site to reset the same.
o Your login id and password can be used by you exclusively for e-voting on theresolutions placed by the companies in which you are the shareholder.
o It is strongly recommended not to share your password with any other person and takeutmost care to keep it confidential.
o Please note that if you have opened 3-in-1 account with ICICI Group i.e. bank accountand demat account with ICICI Bank Limited and trading account with ICICI SecuritiesLimited you can access e-Voting website of NSDL through their website viz.;www.icicidirect.com for the purpose of casting your votes electronically by using yourexisting user ID and password used for accessing the website www.icicidirect.com. Pleasenote that in case you are not able to login through the ICICI direct website you can alsoaccess the e-Voting system of NSDL by using your existing user ID and password for theevoting system of NSDL.
In case of any queries you may refer to the Frequently Asked Questions (FAQs) formembers and e-voting user manual for members available at the Downloads sections of https://www.evoting.nsdl.comor contact NSDL at the following toll free no.: 1800-222-990.