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COSYN Ltd.

BSE: 538922 Sector: IT
NSE: N.A. ISIN Code: INE029B01019
BSE LIVE 15:17 | 17 Oct 73.20 0.25
(0.34%)
OPEN

75.00

HIGH

75.00

LOW

72.00

NSE 05:30 | 01 Jan Stock Is Not Traded.
OPEN 75.00
PREVIOUS CLOSE 72.95
VOLUME 10033
52-Week high 252.00
52-Week low 66.40
P/E 8.64
Mkt Cap.(Rs cr) 55
Buy Price 73.20
Buy Qty 455.00
Sell Price 73.80
Sell Qty 100.00
OPEN 75.00
CLOSE 72.95
VOLUME 10033
52-Week high 252.00
52-Week low 66.40
P/E 8.64
Mkt Cap.(Rs cr) 55
Buy Price 73.20
Buy Qty 455.00
Sell Price 73.80
Sell Qty 100.00

COSYN Ltd. (COSYN) - Director Report

Company director report

To

The Members

Your Directors have pleasure in presenting the 22nd Annual Report together with theAudited Accounts for the Financial Year ended 31st March 2016.

Financial Results

Your Company has been able to generate total revenue of Rs. 2456.68 Lakhs during thefinancial year under review as against Rs. 1975.86 Lakhs during the previous financialyear despite the fact that the industry has been struggling due to overall economicslowdown. Brief Financials are as follows:

Rs. In Lakhs
Particulars 31.03.2016 31.03.2015
Total Revenue 2456.68 1975.86
Less: Expenditure 2092.93 1829.44
Less: Exceptional Items - -
Profit before Tax 363.75 146.41
Less: Provision for Income Tax (7.63) (67.81)
Less: Provision for Deferred Tax (Current Year) - -
Net Profit 371.38 214.23
Earning Per Share 4.95 2.86

Dividend

In order to conserve resources for expansion activities your Directors have notrecommended any dividend for the year under review.

Transfer of Unclaimed Dividend to Investor Education and Protection Fund

The provisions of Section 125(2) of the Companies Act 2013 do not apply as there wasno dividend declared and paid last year.

Review of business operations:

The Company has achieved a turnover of Rs. 2435.31 Lakhs and Net Profit of Rs. 371.38Lakhs as against Rs. 1968.12 Lakhs and Rs.214.23 Lakhs in the previous year respectively.

Future Outlook

Your Board of Directors has taken various initiatives to overcome the competition byadopting various strategies that helped your Company to bag various orders. This will pavea way for better visibility and higher revenues and profitability for the Company incoming financial years. Further the Company is also taking measures to keep the operatingcosts low wherever possible.

Capital Expenditure

During the year under review the company has made Capital Expenditure of Rs.13684173/-. Deposits

The Company has not accepted any deposits and as such no amount of principal orinterest was outstanding as on the date of the Balance Sheet forthe year ended on 31 stMarch 2016.

ISO 9001 -2008 Certification

Your Company continues to hold ISO 9001-2008 Certification by complying with all therequirements of Certification from time to time.

ISO 27001 -2013 Certification

This Year your Company obtained Certification by complying with all the requirements ofCertification.

ISO 20000-1:2011 Certification

This Year your Company obtained Certification by complying with all the requirements ofCertification.

Board of Directors & Key Managerial Personnel

None of the Drectors of the company is disqualified under the provisions of the Act orunder the Listing Agreement with the Stock Exchanges.

Appointments

Mr. Rama Rao Karumanchi was appointed as the Additional Director w.e.f 30-05-2016. Hisappointment as Director by the members is proposed at the ensuing AGM.

Pursuant to the articles of association of the company and the provisions of Section152 of the Companies Act 2013 Mr. D. Vikram Reddy retires by rotation at the ensuing AGMand offer himself for re-appointment. Pursuant to the provisions of Clause 49 of theListing Agreement brief particulars of the Directors who are proposed to beappointed/re-appointed are provided as an annexure to the notice convening the AGM.

Except as stated above there is no change in the key managerial personnel during theyear.

Policy on Directors'Appointment and Remuneration and other details

The Company's policy on Directors' Appointment and Remuneration and other mattersprovided in section 178(3) of the Act have been disclosed in the corporate governancereport which forms part of the Directors' report.

Number of Board meetings during the year

During the year 5 meetings of the board were held the details of which form part ofthe report on corporate governance.

Board Evaluation and Assessment

The Company believes that formal evaluation of the Board and of the individualDirectors on an annual basis is a potentially effective way to respond to the demand forgreater board accountability and effectiveness. Forthe Company evaluations provide anongoing means for Directors to assess their individual and collective performance andeffectiveness. In addition to greater Board accountability evaluation of Board membershelps in:

• More effective Board processes

• Better collaboration and communication

• Greater clarity with regard to members roles and responsibilities and

• Improved Board relations

By focusing on the Board as a team and on its overall performance the Company ensuresthat communication and overall level of participation and engagement also improves. Inthis background the Board undertook a formal Board assessment and evaluation processduring 2014-15. The Nomination & Remuneration Committee has overall stewardship forthe process. The evaluation process covers the following aspects:

• Peer and self-evaluation of Directors

• Evaluation of the performance and effectiveness of the board

• Evaluation of the performance and effectiveness of Board Committees

• Feedbackfromthe Non-Executive Directors to the Chairman and

• Feedback on management support to the Board

The evaluation process elicits responses from the Directors in a judicious manner -ranging from composition and induction of the Board to effectiveness and governance. Italso seeks feedback on Board and committee charters strategy risk management and qualityof discussion and deliberations at the board. The same is discussed and acted uponaccordingly at the Board.

AUDITORS

Pursuant to the provisions of section 139 of the Act and the rules framed thereunderM/s. Rambabu & Co.; Chartered Accountants were appointed as statutory auditors of thecompany from the conclusion of the 20th AGM of the company held on 30th September 2014till the conclusion of the 25th AGM to be held in the year 2019 subject to ratificationof their appointment at every AGM.

AUDITORS' REPORT AND SECRETARIAL AUDITORS' REPORT

The Auditors' Report and Secretarial Auditors' report do not contain anyqualifications reservations or adverse remarks. Report of the secretarial auditor isannexed to the Directors Report.

CONSERVATION OF ENERGY RESEARCH AND DEVELOPMENT TECHNOLOGY ABSORPTION FOREIGNEXCHANGE EARNINGS AND OUTGO

Information relating to conversation technology absorption foreign exchange earningsand outgo forming part of director's report.

Conservation of Energy

The operations of your Company are not Energy intensive. The Company makes every effortto conserve energy as far as possible in its facilities. The Company continuouslyevaluates new technologies and techniques to make infrastructure more energy efficient.

Technology Absorption

Your Company did not invest in any R & D activity during the year underconsideration. However the up gradation of the technology in vogue is being given highestpriority to give a better service to clientele.

Foreign Exchange Earnings and Outgo Particulars:

Particulars 2015-2016 2014-2015
(Rs.) (Rs.)
Foreign Exchange Earnings NIL NIL
Foreign Exchange Outgo 1605640 NIL

Management Discussion & Analysis Report

Pursuant to the provisions of Clause 49 of the Listing Agreement a report onManagement Discussion & Analysis is enclosed to the Annual Report.

Directors' Responsibility Statement

Pursuant to Section 134(5) of the Companies Act 2013 the Board of Directors to thebest of their knowledge and ability confirm that:

i. In the preparation of the annual accounts the applicable accounting standards havebeen followed and there are no material departures;

ii. They have selected such accounting policies and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of the Company at the end of the financial year and of the profitof the company for that period;

iii. They have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding theassets of the company and for preventing and detecting fraud and other irregularities;

iv. They have prepared the annual accounts on a going concern basis;

v. They have laid down internal financial controls to be followed by the Company andsuch internal financial controls are adequate and operating effectively;

vi. They have devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively.

Particulars of Loans Guarantees And Investments

The particulars of loans guarantees and investments have been disclosed in thefinancial statements.

Related Party Transactions

None of the transactions with related parties falls under the scope of section 188(1)of the Act. Information on transactions with related parties pursuant to section 134(3)(h)of the Act read with rule 8(2) of the Companies (Accounts) Rules 2014 are given in FormAOC-2 and is annexed to the Directors Report.

Extract of Annual Return (MGT 9)

The extract of the annual return in Form MGT 9 as required under the provisions ofsection 92 of the Act is annexed to the Directors Report.

Particulars of Employees

The information required under Section 197 of the Act read with rule 5(1) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 are givenbelow:

a. The ratio of the remuneration of each Director to the median remuneration of theemployees of the Company for the financial year:

Executive Directors Ratio to Median remuneration
Ravi Vishnu 99.57 : 0.43
A. Bhopal Reddy 99.57 : 0.43
Non - Executive Directors * -

*Non- Executive Directors do not receive any remuneration from the Company exceptsitting fees and conveyance for attending the meetings.

b. The percentage increase in remuneration of each Director Chief Executive OfficerChief Financial Officer Company Secretary in the financial year:

Directors Chief Executive Officer Chief Financial Officer and Company Secretary % increase in remuneration in the financial year
Ravi Vishnu Managing Director NIL
A. Bhopal Reddy Whole Time Director NIL
Aravind Aitipamula Company Secretary NIL
K. Raghupathi Rao CFO 16.33%

c. The percentage increase in the median remuneration of employees in the financialyear: 18.99%

d. The explanation on the relationship between average increase in remuneration andCompany performance:

On an average employees received an annual due increase of 21.83%. The individualincrements varied from 7.32% to 62.50% based on individual performance and marketdynamics.

e. Comparison of the remuneration of the key managerial personnel against theperformance of the Company:

Aggregate remuneration of key managerial personnel (KMP) in FY'16 Rs. 6436931
Revenue Rs. 245668534
Remuneration of KMPs (as % of revenue) 2.62%
Profit before Tax (PBT) Rs.34831174
Remuneration of KMP (as % of PBT) 18.48%

f. Variations in the market capitalisation of the Company price earnings ratio as atthe closing date of the current financial year and previous financial year:

Particulars March 31 2016 March 31 2015 % Change
Market Capitalisation (Rs.) 332250000 68100000 387.88
Price Earnings Ratio 9.33 3.17 194.32

g. Percentage increase or decrease in the market quotations of the shares of theCompany in comparison to the rate at which the Company came out with the last publicoffer:

Particulars March 31 2016 IPO Date/ first listing date IPO Price Adjusted IPO price by considering CA* % Change
Market Price (BSE) 44.30 May 152000 20 N.A -

h. Average percentile increase already made in the salaries of employees other than themanagerial 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 was around 21.83%.

Increase in the managerial remuneration for the year is 0.98%.

i. Comparison of each remuneration of the key managerial personnel against theperformance of the Company:

Ravi Vishnu MD Bhopal Reddy WTD Aravind Aitipamula CS K. Raghupati Rao CFO
Remuneration in FY16 1920000 1920000 132000 447260
Revenue

245668534

Remuneration as % of revenues 0.78 0.78 0.05 0.18
Profit before Tax (PBT)

36375391

Remuneration (as % of PBT) 5.28 5.28 0.36 1.23

j. The key parameters for any variable component of remuneration availed by theDirectors: None.

k. The ratio of the remuneration of the highest paid Director to that of the employeeswho are not Directors but receive remuneration in excess of the highest paid Directorduring the year: None.

l. Affirmation that the remuneration is as per the remuneration policy of the Company:

The Company affirms remuneration is as perthe remuneration policy of the Company

m. The statement containing particulars of employees as required under Section197(12) of the Act read with Rule 5(2) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 is provided in a separate annexure forming part of thisreport. Further the report and the accounts are being sent to the members excluding theaforesaid annexure. In terms of Section 136 of the Act the said annexure is open forinspection at the Registered Office of the Company. Any shareholder interested inobtaining a copy of the same may write to the Company Secretary.

RISK MANAGEMENT

The Board of Directors has formed a risk management committee to identify evaluatemitigate and monitor the risk management in the company. The committee is responsible forreviewing the risk management plan and ensuring its effectiveness. The Audit Committee hasadditional oversight in the area of financial risks and controls.

A comprehensive enterprise risk management mechanism has been put in place and the sameis regularly reviewed.

Corporate Governance

The Company will continue to uphold the true spirit of Corporate Governance andimplement the best governance practices. A report on Corporate Governance pursuant to theprovisions of Clause 49 of the Listing Agreement forms part of the Annual Report. Fulldetails of the various board committees are also provided therein. As required underClause 49 of the Listing Agreement the Auditors' Certificate regarding compliance ofconditions of corporate governance is annexed to the Directors' Report.

Disclosure Requirements

Details of the familiarization programme of the independent Directors are available onthe website of the Company www.cosyn.in.

Policy for determining material subsidiaries of the Company is available on the websiteof the Company www.cosyn.in.

Policy on dealing with related party transactions is available on the website of theCompany www.cosyn.in.

The Company has formulated and published a Whistle Blower Policy to provide VigilMechanism for employees including Directors of the Company to report genuine concerns. Theprovisions of this policy are in line with the provisions of the section 177(9) of the Actand the revised Clause 49 of the Listing Agreements with stock exchanges The said policyis available on the website on the company www.cosyn.in.

The Company has in place an Anti-Sexual Harassment Policy in line with the requirementsof the Sexual Harassment of Women at the Workplace (Prevention Prohibition and Redressal)Act 2013. Internal Complaints Committee has been set up to redress complaints receivedregarding sexual harassment. All associates of the Company are covered under this policy.There were no complaints received under the policy during 2015-16.

Managing Director/CEO's Declaration

Pursuant to the provisions of clause 49 (ll)(E) of the Listing Agreement a declarationby the Managing Director & CEO of the Company declaring that all the members of theBoard and the senior management personnel of the Company have affirmed compliance with theCode of Conduct of the company is annexed to the Directors Report. The CEO/CFOcertification to the Board pursuantto clause 49(V) of the listing agreement is annexed tothe Directors Report.

Acknowledgments

Your Directors extend their gratitude to the valuable customers investors BankersCentral and State Government officers agencies and the confidence which they havereposed in the Management.

We place on record our appreciation of the contribution made by employees at alllevels. Our consistent performance was made possible by their hard work solidarityco-operation and support.

For and on behalf of the Board of Directors
Sd/- Sd/-
Ravi Vishnu A.BHOPAL REDDY
Place: HYDERABAD Managing Director Whole-Time Director
Date : August 12 2016 (DIN-01144902) (DIN-01119839)