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COSYN Ltd.

BSE: 538922 Sector: IT
NSE: N.A. ISIN Code: INE029B01019
BSE 00:00 | 20 Jun 69.65 -0.90
(-1.28%)
OPEN

70.50

HIGH

71.95

LOW

69.00

NSE 05:30 | 01 Jan COSYN Ltd
OPEN 70.50
PREVIOUS CLOSE 70.55
VOLUME 7226
52-Week high 112.95
52-Week low 66.40
P/E 7.36
Mkt Cap.(Rs cr) 52
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 70.50
CLOSE 70.55
VOLUME 7226
52-Week high 112.95
52-Week low 66.40
P/E 7.36
Mkt Cap.(Rs cr) 52
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

COSYN Ltd. (COSYN) - Director Report

Company director report

To

The Members

Your Directors have pleasure in presenting the 23rdAnnual Report together with theAudited Accounts for the Financial Year ended 31st March 2017.

Financial Results

Your Company has been able to generate total revenue of Rs. 3171.04 Lakhs during thefinancial year under review as against total revenue of Rs. 2456.68 Lakhs during theprevious financial year. Brief Financials are as follows:

Rs. In Lakhs

Particulars 31.03.2017 31.03.2016
Total Revenue 3171.04 2456.68
Less : Expenditure 2475.54 2092.93
Less : Exceptional Items - -
Profit before Tax 695.50 363.75
Less : Provision for Income Tax 2.96 (7.63)
Less : Provision for Deferred Tax (Current Year) - -
Net Profit 692.54 371.38
Earnings Per Share 9.23 4.95

Dividend

The Board recommended a Dividend of Rs.1/- i.e. 10% per equity share on face value ofRs. 10/- each for the year ended 31st March 2017.

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 and future prospects:

The Company has achieved a turnover of Rs. 3146.95 lakhs and Net Profit of Rs. 695.24lakhs as against Rs. 2435.31 lakhs and Rs.371.38 lakhs in the previous year respectively.

Subsidiary / Joint Venture / Associate Companies

The Details of Associate Companies are mentioned in MGT 9 i.e. Extract of AnnualReturn and financial statements.

Details of Policy Developed and Implemented By the Company on its Corporate SocialResponsibility Initiatives

The Company has not developed and implemented any Corporate Social Responsibilityinitiatives as the said provisions are not applicable.

Future Outlook:

Your Board of Directors have initiated various strategic moves to overcome thecompetition. Also to derisk the dependence on few core verticals the Company hasidentified and is investing on new opportunities. Further the Company is also takingmeasures to keep the operating costs low wherever possible.

Capital Expenditure:

During the year under review the company has made Capital Expenditure of Rs. 88.15lakhs.

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 for the year ended on 31stMarch 2017.

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

Your Company continues to hold the Certification by complying with all the requirementsof Certification from time to time.

ISO 20000-1: 2011 Certification

Your Company continues to hold the Certification by complying with all the requirementsof Certification from time to time.

Board of Directors & Key Managerial Personnel

Relevant information on composition of the Board and number of meetings is provided in‘Board of Directors' section of Corporate Governance Report which forms part of thisAnnual Report.

Appointment

Mr. Rama Rao Karumanchi (DIN: 07532854) appointed as Additional Director of the Companyin the board meeting held on 30.05.2016 and regularized as Director in 22nd Annual GeneralMeeting held on 29.09.2016 and appointed as Independent Director for a period of five (5)years. Pursuant to the articles of association of the company and the provisions ofSection 152 of the Companies Act 2013 Mr. Aruva Bhopal Reddy retires by rotation at theensuing AGM and offer himself for re-appointment. Pursuant to the provisions of SEBI(LODR) Regulations 2015 brief particulars of the directors who are proposed to beappointed/re-appointed are provided in the notes to the notice convening the AGM.

Resignations

Pursuant to HR Policy of the Company and provisions of the Companies Act 2013 andother applicable rules at the Board meeting held on 14.08.2017 Wg. Cdr. V.L. NandaKumar Shri.T. Krishna Rao and Shri. Ravi Radhakrishna Murthy tendered their resignationsas Directors w.e.f 14.08.2017 and the Board approved the same. Shri.D. Vikram Reddy alsoresigned w.e.f 14.08.2017 and the Board approved the same. Except as stated above thereis no change in the key managerial personnel during the year.

Statement on Declaration given by Independent Directors under sub-Section (6) ofSection 149

The Independent Directors have submitted the Declaration of Independence as requiredpursuant to Section 149(7) of the Companies Act 2013 stating that they meet the criteriaof Independence as provided in sub-section (6).

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 4 meetings of the Board were held the details of which form part ofthe report on corporate governance.

Board Evaluation and Assessment

In compliance with the Companies Act 2013 and SEBI (LODR) Regulations 2015 theperformance evaluation of the Board and of its Committees was carried out during the yearunder review. More details on the same are given in the Corporate Governance Report.

Auditors a) Statutory Auditors

Pursuant to the provisions of section 139 of the Companies Act 2013 read with Rule 6of Companies (Audit and Auditors) Rules 2014 the office of M/s. Rambabu & Co.Chartered Accountants as statutory auditors of the company comes to an end. As their termof office comes to an end at ensuing Annual General Meeting it is proposed to appointM/s. Suryanarayana & Suresh. Chartered Accountants (ICAI Reg. No. 006631S) as thestatutory auditors of the company.to hold office for a term of three consecutive yearsfrom the conclusion of the ensuing Annual General Meeting until the conclusion of the 26thAGM of the Company to be held in the year 2020 subject to ratification at every AGM. TheBoard recommends the resolution for your approval. b) Internal Auditors The Board ofDirectors based on the recommendation of the Audit Committee has reappointed M/s. Vittal& Co. Chartered Accountants as the Internal Auditors of your Company for FY 2017-18.The Internal Auditors are submitting their reports on quarterly basis for review of theBoard. c) Secretarial Auditors The Board has appointed Smt. Putcha Sarada CompanySecretary in Practice to carry out the Secretarial Audit under the provisions of section204 of the Companies Act 2013 for the financial year 2016-17. The Report of theSecretarial Auditor is annexed to this report.

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 conservation 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 realizing the importance of being in sync with the current trendsin technology your Company keeps investing on absorption of new technologies by procuringthe required hardware and software and also by training the manpower.

Foreign Exchange Earnings and Outgo Particulars:

Particulars 2016-17 2015 -16
(Rs.) (Rs.)
Foreign Exchange Earnings NIL NIL
Foreign Exchange Outgo 3050513/- 1605640/-

Management Discussion & Analysis Report

Pursuant to the provisions of SEBI (LODR) Regulations 2015 a report on ManagementDiscussion & 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 annualaccounts the applicable accounting standards have been followed and there are no materialdepartures; ii. they have selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company at the end of the financial year and ofthe profit of the company for that period; iii. they have taken proper and sufficient carefor the maintenance of adequate accounting records in accordance with the provisions ofthe Act for safeguarding the assets of the company and for preventing and detecting fraudand other irregularities; iv. they have prepared the annual accounts on a going concernbasis; v. they have laid down internal financial controls to be followed by the companyand such internal financial controls are adequate and operating effectively; vi. they havedevised proper systems to ensure compliance with the provisions of all applicable laws andthat such systems were adequate and operating effectively.

Indian Accounting Standards

The Ministry of Corporate affairs vide its notification dated 16-02-2015 has notifiedthe Companies (Indian Accounting standards) Rules 2015. In pursuance of the saidnotification the Company will adopt Indian Accounting Standards with effect from 01stApril 2017. The implementation of Indian accounting standards is a major change processfor which the company has set up a dedicated team and is providing desired resources forits completion within the time frame. The impact of the change on adoption of said IAS isbeing assessed.

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 Director's 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:

Ratio of Remuneration of each director to the Median
Executive Directors
Remuneration of
employees
Ravi Vishnu 30
A.Bhopal Reddy 30
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 inremuneration of each Director Chief Executive officer Chief Financial Officer CompanySecretary in the financial year:

Directors Chief Executive Officer Chief Financial Officer and Company Secretary % increase in remuneration in the financial year
Ravi Vishnu NIL
A.Bhopal Reddy NIL
Raghupathi Rao. K NIL
Aravind Aitipamula 12.31

c. The percentage increase in the median remuneration of employees in the financialyear: 7.20%

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

On an average employees received an annual increase of 13.33%. The individualincrements varied from 1.74 % to 45.45% 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'17 Rs. 6489182
Revenue Rs. 317104968
Remuneration of KMPs (as % of revenue) 2.05%
Profit before Tax (PBT) Rs. 69550250
Remuneration of KMP (as % of PBT) 9.33%

f. Variations in the Market Capitalisation of the Company Price Earnings Ratio asat the closing date of the current financial year and previous financial year:

Particulars March 31 2017 March 31 2016 % Change
Market Capitalization (Rs.in Lakhs) 10290.00 3322.50 209.71
Price Earnings Ratio 14.86 8.95 66.09

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 2017 IPO Date/ first listing date IPO Price Adjusted IPO price by considering CA* % Change
Market Price (BSE) 137.20 May 15 2000 10/- N.A. -

h. 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 was around 13.33%.

Increase in the managerial remuneration for the year is 1.00 %. i. Comparison ofeach remuneration of the key managerial personnel against the performance of the Company:

Particulars Ravi Vishnu MD A. Bhopal Reddy WTD Aravind Aitipamula CS K. Raghupathi Rao CFO
Remuneration in FY17 3001960 2914112 148255 424855
Revenue

317104968

Remuneration as % of revenues 0.95 0.92 0.05 0.13
Profit before Tax (PBT)

69550250

Remuneration (as % of PBT) 4.32 4.19 0.21 0.61

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 per the remuneration policy of the Company

m. The statement containing particulars of employees as required under Section 197(12)of the Act read with Rule 5(2) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 is provided in this report. In terms of Section 136 ofthe Act the said annexure is open for inspection at the Registered Office of the Company.Any shareholder interested in obtaining a copy of the same may write to the CompanySecretary.

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 comprehensiveenterprise risk management mechanism has been put in place and the same is regularlyreviewed.

Corporate Governance

As per SEBI (LODR) Regulations 2015 and Companies Act 2013 on Corporate Governancethe Company has complied with the Corporate Governance requirements. A separate section onCorporate Governance along with a certificate from the auditors confirming the complianceforms part of this Report.

Significant and material orders passed by Regulators or Courts

There are no significant material orders passed by the Regulators or Courts which wouldimpact the going concern status of the Company and its future operations.

Adequacy of Internal Financial Control Systems with reference to Financial Statements

The Company has in place proper and adequate internal control systems commensurate withthe nature of its business and size and complexity of its operations. Internal controlsystems comprising of policies and procedures designed to ensure reliability of financialreporting timely feedback on achievement of operational and strategic goals compliancewith policies procedure applicable laws and regulations and that all assets and resourcesas acquired are used economically.

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 ofthe Company is available on the website of the Company www.cosyn.in. Policy on dealingwith related party transactions is available on the website of the Company 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 SEBI (LODR) Regulations 2015. The said policy is available on the website of theCompany www.cosyn.in. The company has in place an Anti-Sexual Harassment Policy in linewith the requirements of the Sexual Harassment of Women at the Workplace (PreventionProhibition and Redressal) Act 2013. Internal Complaints Committee has been set up toredress complaints received regarding sexual harassment. All associates of the company arecovered under this policy. There were no complaints received under the policy during2016-17.

Managing Director/CEO's Declaration

Pursuant to the provisions of SEBI (LODR) Regulations 2015 a declaration by theManaging Director & CEO of the company declaring that all the members of the board andthe senior management personnel of the company have affirmed compliance with the Code ofConduct of the company is annexed to the Directors Report. The CEO/CFO certification tothe board is annexed to the Directors' Report.

Acknowledgments

Your Directors extend their gratitude to the valuable customers investors BankersCentral and State Government Officers and Agencies for the confidence which they havereposed in the Management. We place on record our appreciation of the contribution made byemployees at all levels. Our consistent performance was made possible by their hard worksolidarity co-operation and support.

For and on behalf of the Board of Directors
Sd/- Sd/-
Ravi Vishnu A.Bhopal Reddy
Managing Director Whole-Time Director
(DIN-01144902) (DIN-01119839)
Place : Hyderabad
Date : August 14 2017

Form No. AOC-2

(Pursuant to clause (h) of sub-section (3)of section 134 of the Act and Rule 8(2) ofthe Companies (Accounts) Rules 2014)

Form for disclosure of particulars of contracts/arrangements entered into by thecompany with related parties referred to in sub-section (1) of section 188 of theCompanies Act 2013 including certain arms length transactions under third proviso thereto

1. Details of contracts or arrangements or transactions not at arm's length basis :NONE

2. Details of material contracts or arrangement or transactions at arm's lengthbasis : NIL

For and on behalf of the Board of Directors
Sd/-
Ravi Vishnu
Managing Director
(DIN-01144902)
Place: Hyderabad
Date: August 14 2017