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CES Ltd.

BSE: 512341 Sector: IT
NSE: N.A. ISIN Code: INE396F01013
BSE 05:30 | 01 Jan CES Ltd
NSE 05:30 | 01 Jan CES Ltd

CES Ltd. (CES) - Director Report

Company director report

To

The Members of M/s. CES LIMITED

The Directors have pleasure in presenting the 34th Annual Report of the Companytogether with the Audited Accounts for the year ended on 31st March 2019 (01.04.2018 to31.03.2019).

FINANCIAL RESULTS
(Rs. In Lacs)
Consolidated Standalone
2018-2019 2017-2018 2018-2019 2017-2018
Total Revenue 24965.92 20431.78 10223.83 7.454.69
Profit Before Depreciation 2604.39 1793.27 1146.13 987.13
Depreciation 727.26 607.50 316.77 269.60
Profit Before Taxation 1877.13 1185.77 829.36 717.53
Provision for Taxation 615.14 360.47 352.15 235.31
Profit after Taxation 1261.99 825.30 477.21 482.22
Total Comprehensive Income 1165.49 833.93 380.71 491.21
Brought Forward Profit/(Loss) 5866.77 5031.85 4345.73 3854.52
Balance carried to Balance Sheet 3522.26 5866.77 1216.44 4345.73

BUSINESS PERFORMANCE OF THE COMPANY

Standalone: Our revenue for financial year 2018-19 is Rs. 10223.83 Lacs and ourprofit after tax (PAT) Rs.477.21 Lacs.

Consolidated:
Our consolidated financial results for financial year 2018-19 is Rs. 24965.92 Lacsand our consolidated profit after tax (PAT) is Rs. 1261.99 Lacs.

COMMITTEES OF THE BOARD

AUDIT COMMITTEE

Name Designation / Category
Mr. Murali Krishna Tummala(01889806) Chairman ( Independent Director )
Mr. Duruvasan Ramachandra (00223052) Member ( Independent Director )
Mr. Rama Krishna Sebbineni(01825682) Member (Non-Executive Director)
NOMINATION & REMUNERATION COMMITTEE
Name Designation / Category
Mr. Duruvasan Ramachandra (00223052) Chairman( Independent Director )
Mr. Murali Krishna Tummala ( 01889806) Member ( Independent Director )
Mr. Appa Rao Kancharla (02532842) Non-Executive Director
STAKEHOLDER RELATIONSHIP COMMITTEE
Name Designation / Category
Mr. Murali Krishna Tummala ( 01889806) Chairman ( Independent Director )
Mr. Duruvasan Ramachandra (00223052) Member ( Independent Director )
Mr. Rama Krishna Sebbineni (01825682) Member ( Non- Executive Director)
CORPORATE SOCIAL RESPONSIBILITY COMMITTEE
Name Designation / Category
Mr. Murali Krishna Tummala ( 01889806) Chairman ( Independent Director )
Mr. Rama Krishna Sebbineni (01825682) Member ( Non- Executive Director)
Mr. Mohan Kancharla (00004288) Executive Director

DURING THE FINANCIAL YEAR 2018-2019 SEVEN BOARD MEETINGS WERE HELD AS FOLLOWS:

30.05.2018 13.08.2018 04.09.2018 23.10.2018 14.11.2018 02.01.2019 & 14.02.2019

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 2019 the applicable accounting standards had beenfollowed 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 ofadequate accounting records in accordance with the provisions of the Companies Act 2013for safeguarding the assets of the company and for preventing and detecting fraud andother irregularities;

(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 allapplicable laws were in place and that such systems were adequate and operatingeffectively

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 Company has acquired 37.50% stake in CES technology ServicesPrivate Limited (CTSPL).

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES (188(1))

The Company had entered into contract with its wholly own Subsidiary i.e. CES USA Inc.The Board of Directors and Shareholders of the Company had approved the contract up to30th December 2019. During the Financial year the remuneration of Shri Mohan RaoKancharla (00004288) Whole- Time Director was revised after members approval in the 33rdAnnual General Meeting held on 28.09.2018.

DISCLOSURES OF TRANSACTIONS OF THE LISTED ENTITY WITH ANY PERSON OR ENTITY BELONGING TOTHE PROMOTER/PROMOTER GROUP WHICH HOLD(S) 10% OR MORE SHAREHOLDING IN THE LISTED ENTITY:

Name of the Related Party Nature of Relation Nature of Transaction 2018-19 2017-18
1 CES USA Inc. Common directors Services rendered - Rs.10250254/-
2 CES Information Technologies Pvt. Ltd. Common directors Services rendered Rs. 2250000/- -
3 CES Global IT Solutions Pvt. Limited. Common directors Services rendered Rs. 9600000/- Rs.2981760/-
4 CES Technology Services Pvt. Ltd. Common directors Services rendered Rs. 2400000/- Rs.2391149/-

NEW DELIVERY CENTER AT VISAKHAPATNAM ANDHRA PRADESH

AMOUNT IF ANY IF IT PROPOSES TO CARRY TO RESERVES:

During the end of the financial year the Company has not transferred any amount toreserves.

NO DIVIDENDS DECLARED FOR FINANCIAL YEAR 2018-19:

The Company is at expansion mode; therefore Board is of Opinion that there is no needto declare dividends.

CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE

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:
(Rs. In Lacs)
Particulars 31.03.2019 31.03.2018
Foreign Exchange Earnings 9997.29/- 7442.31/-
Foreign Exchange Outgo :
Foreign Travelling 85.91/- 123.25/-

AUDITORS

Statutory / Financial Audit

The Board of Directors of the Company had approved the appointment of M/s. PCN &Associates (Formerly known as Chandra Babu Naidu & Co). (FRN: 016016S) CharteredAccountants as the Statutory Auditors of the Company for a period of Five Years w.e.f29th September 2017 in the 32nd Annual General Meeting.

Secretarial Audit and Annual Secretarial Compliance Report

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 Smt. Sharada Putcha Company Secretaries in Practice (C.P No.8735) to undertakethe Secretarial Audit of the Company. The Report of the Secretarial Audit Report isannexed herewith as Annexure- IV.

Internal Auditors

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