The Directors present this Integrated Annual Report of CES Limited (“the Company” or
“CES”) along with the audited financial statements for the financial year ended March 31,
2024.
The consolidated performance of the Company and its subsidiaries has been referred to
wherever required.
1. Financial results.
The financial performance of the Company is presented below
Standalone results - (Amount in Lakhs)
|
Particulars
|
Note
No
|
Year Ended
31.03.2024
|
Y ear E n ded
31.03.2023
|
|
(In Lakhs)
|
(In Lakhs)
|
|
I. Revenue from Operations
|
16
|
22,730.16
|
20,371.26
|
|
II. Other Income
|
17
|
332.69
|
530.65
|
|
III. Total Income (I II)
|
|
23,062.85
|
20,901.92
|
|
IV. Expenses:
|
|
|
|
|
Employee Benefits expense
|
18
|
10,831.05
|
9,139.32
|
|
Finance costs
|
19
|
-
|
-
|
|
Depreciation and Amortization Expense
|
1
|
230.82
|
260.41
|
|
Other Expenses
|
20
|
10,921.46
|
10,221.15
|
|
IV. Total Expenses
|
|
21,983.34
|
19,620.88
|
|
V. Profit/(Loss) before exceptional items and tax (III - IV)
|
|
1,079.51
|
1,281.04
|
|
VI. Exceptional Items
|
|
-
|
-
|
|
VII. Profit/(Loss) before tax (V-VI)
|
|
1,079.51
|
1,281.04
|
|
VIII. Tax expense:
|
21
|
|
|
|
(i) Current tax
|
|
326.43
|
407.80
|
|
(ii) Deferred tax
|
|
(0.07)
|
(21.72)
|
|
IX. Profit/(Loss) for the Year Ended from continuing
operations (VII-VIII)
|
|
753.15
|
894.96
|
|
X. Other Comprehensive Income.
A. Items that will not be reclassified subsequently to
Profit or Loss
(i) Remeasurement of defined employee benefit plans
(net of tax)
|
|
15.65
|
149.17
|
|
B. Items that will be reclassified to subsequently to
Profit or Loss
(i) Exchange differences on foreign currency
transactions ( net of tax)
|
|
19.42
|
296.43
|
|
Total Comprehensive Income for the Year Ended
|
|
788.21
|
1,340.56
|
|
XI. Earnings per equity share (for continuing operation):
(1) Basic
|
|
2.07
|
2.46
|
|
(2) Diluted
|
|
2.07
|
2.46
|
Consolidated results - (Amount in Lakhs)
|
Particulars
|
Consolidated
31-03-2024
|
Consolidated
31-03-2023
|
| |
(In Lakhs)
|
(In Lakhs)
|
|
I. Revenue from Operations
|
46,886.60
|
42,645.23
|
|
II. Other Income
|
328.86
|
623.02
|
|
III. Total Income (I II)
|
47,215.46
|
43,268.26
|
|
IV. Expenses:
|
|
|
|
Employee Benefits expense
|
23,350.17
|
21,548.87
|
|
Finance costs
|
57.83
|
45.63
|
|
Depreciation and amortization expense
|
412.68
|
441.56
|
|
Other Expenses
|
19,655.83
|
18,380.18
|
|
IV. Total Expenses
|
43,476.51
|
40,416.23
|
|
V. Profit before exceptional and extraordinary items and tax ( III
- IV)
|
3,738.94
|
2,852.03
|
|
VI. Exceptional Items
|
|
|
|
VII. Profit before extraordinary items and tax (V - VI)
|
3,738.94
|
2,852.03
|
|
VIII. Extraordinary Items
|
-
|
-
|
|
V. Profit/(Loss) before exceptional items and tax (III - IV)
|
3,738.94
|
2,852.03
|
|
VI. Exceptional Items
|
-
|
-
|
|
VII. Profit/(Loss) before tax (V-VI)
|
3,738.94
|
2,852.03
|
|
VIII. Tax expense:
|
|
|
|
(i) Current tax
|
1,099.65
|
941.97
|
|
(iv) Deferred tax
|
(8.82)
|
(41.37)
|
|
IX. Profit/(Loss) for the period from continuing operations (VII-
VIII)
|
2,648.11
|
1,951.43
|
|
X. Other Comprehensive Income.
A. Items that will not be reclassified subsequently to Profit
or Loss
(i) Remeasurement of defined employee benefit plans (net
of tax)
B. Items that will be reclassified to subsequently to Profit
or Loss
(i) Exchange differences on foreign currency transactions (
net of tax)
|
120.82
24.24
|
215.50
293.95
|
|
Total Comprehensive Income for the period
|
2,793.17
|
2,460.89
|
|
XI. Attributable to
|
|
|
|
Shareholders of the Company
|
2,443.21
|
2,293.37
|
|
Non-Controlling Interests
|
349.96
|
167.51
|
|
XII. Earnings per equity share (for continuing operation):
|
|
|
|
(1) Basic
|
7.28
|
5.36
|
|
(2) Diluted
|
7.28
|
5.36
|
2. Business performance of the company.
Standalone: Our revenue for financial year 2023-24 is Rs. 22,730.16 lakhs and our profit after
tax (PAT) Rs. 788.21 lakhs.
Consolidated: Our revenue for financial year 2023-24 is Rs. 46,886.60 lakhs and our
consolidated profit after tax (PAT) is Rs 2,793.17 lakhs.
3. Transfer to reserves.
During the end of the financial year 2024 the Company has not transferred any amount to
reserves.
4. Dividend declaration.
The Company is at expansion mode; therefore, Board is of Opinion that there is no need to
declare dividends for the financial year ended 31st March, 2024.
5. Quality initiatives.
The Company continues to strengthen its commitment to the highest levels of quality, superior
customer experience, best-in-class service management, robust information security and
privacy practices and mature business continuity management.
6. Subsidiary companies.
On March 31, 2024, the Company has 4 subsidiaries and there has been no material change in
the nature of the business of the subsidiaries. There are no associates or joint venture companies
within the meaning of Section 2(6) of the Companies Act, 2013 (“Act”).'
The names of the subsidiaries are as follows: -
|
SI. No
|
Name of the Company
|
Relationship
|
|
i.
|
CES Information Technologies Private Limited
|
Subsidiary Company
|
|
ii.
|
CES USA Inc.
|
Subsidiary Company
|
|
iii.
|
CES Technology Services Private Limited
|
Subsidiary Company
|
|
iv.
|
CES Global IT Solutions Private Limited
|
Subsidiary Company
|
Pursuant to the provisions of Section 129(3) of the Act, a statement containing the salient
features of financial statements of the Company’s subsidiaries in Form No. AOC-1 is attached
to the financial statements of the Company.
Further, pursuant to the provisions of Section 136 of the Act, the financial statements of the
Company, consolidated financial statements along with relevant documents and separate
audited financial statements in respect of subsidiaries, are available on the Company’s website
at https://cesltd.com/investors/.
7. Directors’ responsibility statement.
Pursuant to Section 134(5) of the Act, the Board of Directors, to the best of its knowledge and
ability, confirm that:
i. In the preparation of the annual accounts, the applicable accounting standards have
been followed and there are no material departures;
ii. They have selected such accounting policies and applied them consistently and
made judgments and estimates that are reasonable and prudent so as to give a true
and fair view of the state of affairs of the Company at the end of the financial year
and of the profit of the Company for that period;
iii. They have taken proper and sufficient care for the maintenance of adequate
accounting records in accordance with the provisions of the Act for safeguarding
the assets 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 and
such internal financial controls are adequate and operating effectively;
vi. They have devised proper systems to ensure compliance with the provisions of all
applicable laws and that such systems are adequate and operating effectively.
Based on the framework of internal financial controls and compliance systems established and
maintained by the Company, the work performed by the internal, statutory and secretarial
auditors and external consultants, including the audit of internal financial controls over
financial reporting by the statutory auditors and the reviews performed by management and the
relevant board committees, including the audit committee, the Board is of the opinion that the
Company’s internal financial controls were adequate and effective during FY 2024.
8. Directors and Key Managerial Personnel.
As on March 31, 2024, the Company has seven Directors with an optimum combination of
Executive and Non-Executive Directors including one women director and one alternate
director.
Pursuant to the provisions of Section 203 of the Act, Mr. Mohana Rao Kancharla, Whole time
Director, Mr. Srinivas Raju Kucherlapati, Chief Financial Officer and Mr. Suraj Kumar Garg,
Company Secretary are the Key Managerial Personnel of the Company as on March 31, 2024.
There was no change in the composition of Directors and KMP during the period under review.
9. Number of meetings of the Board.
Six meetings of the Board were held during the year. For details of meetings of the Board,
please refer to the Corporate Governance Report, which is a part of this report.
10. Board evaluation.
The Board of Directors has carried out an annual evaluation of its own performance, board
committees, and individual directors pursuant to the provisions of the Act and SEBI Listing
Regulations.
The performance of the board was evaluated by the Board after seeking inputs from all the
directors on the basis of criteria such as the board composition and structure, effectiveness of
board processes, information and functioning, etc.
The performance of the committees was evaluated by the Board after seeking inputs from the
committee members on the basis of criteria such as the composition of committees,
effectiveness of committee meetings, etc.
The above criteria are broadly based on the Guidance Note on Board Evaluation issued by the
Securities and Exchange Board of India on January 5, 2017. In a separate meeting of
Independent Directors, performance of Non-Independent directors, the Board as a whole was
evaluated.
The Board and the Nomination and Remuneration Committee reviewed the performance of
individual directors on the basis of criteria such as the contribution of the individual director to
the board and committee meetings like preparedness on the issues to be discussed, meaningful
and constructive contribution and inputs in meetings, etc.
At the board meeting that followed the meeting of the independent directors and meeting of
Nomination and Remuneration Committee, the performance of the Board, its Committees, and
individual directors was also discussed. Performance evaluation of independent directors was
done by the entire Board, excluding the independent director being evaluated.
11. Policy on directors’ appointment and remuneration and other details.
The Company’s policy on appointment of directors is available on the Company’s website at
https://cesltd.com/investors/.
The policy on remuneration and other matters provided in Section 178(3) of the Act has been
disclosed in the Corporate Governance Report, which is a part of this report and is also
available on the Company’s website at https://cesltd.com/investors/.
12. Corporate Social Responsibility (CSR).
CES CSR initiatives and activities are aligned to the requirements of Section 135 of the Act.
A brief outline of the CSR policy of the Company and the initiatives undertaken by the
Company on CSR activities during the year are set out in Corporate Social Responsibility
report in the format prescribed in the Companies (Corporate Social Responsibility Policy)
Rules, 2014, which is a part of this report. This Policy is available on the Company’s website
at https://cesltd.com/investors/.
For other details regarding the CSR Committee, please refer to the Corporate Governance
Report, which is a part of this report.
13. Internal financial control systems and their adequacy.
The details in respect of internal financial control and their adequacy are included in the
Management Discussion and Analysis, which is a part of this report.
14. Audit committee.
The details pertaining to the composition of the Audit Committee are included in the Corporate
Governance Report, which is a part of this report.
15. Statutory Auditors.
M/s. P. Murali & Co, Chartered Accountants, (Registration number: 007257S), the Auditors of
the Company had resigned as statutory auditors of the Company with effect from 14th
November, 2023 due to pre-occupation, thereby resulting in a casual vacancy in the office of
Auditors.
In terms of the provision of Section 139(8) of the Companies Act, a casual vacancy arising due
to resignation of Auditor can be filled by the Board of Directors within thirty days and such
appointment shall also be approved by the company at a general meeting convened within three
months of the recommendation of the Board and the Auditor shall hold the office till the
conclusion of the next annual general meeting.
In order to fill up the casual vacancy caused by the resignation of the auditors, the Board of
Directors of the Company (‘the Board’), upon recommendation of the Audit Committee (‘the
Committee’) at its meeting held on 11th December, 2023, have appointed M/s. N G Rao &
Associates, Chartered Accountants, (Firm Registration No. 009399S), as the Auditors of the
Company, until the conclusion of next Annual General Meeting to be held in 2024.
The approval of shareholders was sought by Postal Ballot Notice dated December 16, 2023.
The resolution was duly passed by the shareholders.
The Board has suggested re-appointing N G Rao & Associates for another five-year term.
Approval from the Company members is being sought through an ordinary resolution included
in the notice for the upcoming AGM.
16. Auditor’s report and Secretarial audit report.
The statutory auditor’s report and the secretarial auditor’s report do not contain any
qualifications, reservations, or adverse remarks or disclaimer.
The statutory audit report and the Secretarial audit report of the Company and its material
subsidiaries being CES Information Technologies Private Limited and CES Global IT
Solutions Private Limited forms part of this report.
17. Risk management.
Company has a robust Business Risk Management framework to identify, evaluate business
risks and opportunities.
18. Vigil Mechanism.
The Company has a Whistle Blower Policy and has established the necessary vigil mechanism
for directors and employees in conformation with Section 177(9) of the Act and Regulation 22
of SEBI Listing Regulations, to report concerns about unethical behaviour. This Policy is
available on the Company’s website at https://cesltd.com/investors/.
19. Particulars of loans, guarantees and investments.
The particulars of loans, guarantees and investments as per Section 186 of the Act by the
Company, have been disclosed in the financial statements.
20. Transactions with related parties.
None of the transactions with related parties fall under the scope of Section 188(1) of the Act.
Accordingly, the disclosure of related party transactions as required under Section 134(3)(h) of
the Act in Form AOC-2 is not applicable to the Company for FY 2024 and hence does not form
part of this report.
21. Annual Return.
Pursuant to Section 92(3) read with Section 134(3)(a) of the Act, the Annual Return as on
March 31, 2024 is available on the Company’s website at https://cesltd.com/investors/.
22. Particulars of employees.
The information under Section 197 of the Act read with Rule 5 of the Companies (Appointment
and Remuneration of Managerial Personnel) Rules, 2014:
The ratio of the remuneration of each director to the median remuneration of the employees of
the Company and percentage increase in remuneration of each Director, Chief Executive
Officer, Chief Financial Officer and Company Secretary in the financial year:
Amount in Lakhs
|
Name
|
Ratio to median
remuneration
|
% increase in
remuneration in the
financial year
|
|
Non-executive Directors
(excluding sitting fees paid to
Independent Directors) :
|
Nil
|
Nil
|
| |
|
|
|
Executive Director:
|
2.27
|
2.60%
|
| |
|
|
| |
|
|
|
Chief Financial Officer:
|
2.96
|
15.41%
|
| |
|
|
|
Company Secretary:
|
1.59
|
48.04%
|
| |
|
|
The percentage increase in the median remuneration of employees in the financial year is 12%
percent.
The number of permanent employees on the rolls of Company are 839.
The average annual increase in remuneration for the employees was 12% percent.
Increase in the managerial remuneration for the year was 2.60% percent for Wholetime
Director.
The Company affirms that the remuneration is as per the remuneration policy of the Company.
As required under Section 197(12) of the Act read with Rule 5(2) and 5(3) of the Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014, were hereby report
that there no employees who received remuneration in excess of the limits prescribed which
are presented below: -
(i) if employed throughout the financial year, was in receipt of remuneration for that year
which, in the aggregate, was not less than one crore and two lakh rupees;
(ii) if employed for a part of the financial year, was in receipt of remuneration for any part of
that year, at a rate which, in the aggregate, was not less than eight lakh and fifty thousand rupees
per month;
(iii) if employed throughout the financial year or part thereof, was in receipt of remuneration
in that year which, in the aggregate, or as the case may be, at a rate which, in the aggregate, is
in excess of that drawn by the managing director or whole-time director or manager and holds
by himself or along with his spouse and dependent children, not less than two percent of the
equity shares of the company.
23. Disclosure requirements.
As per SEBI Listing Regulations, the Corporate Governance Report with the Auditors’
Certificate thereon, and the integrated Management Discussion and Analysis, form part of the
Director’s Report.
The Company has devised proper systems to ensure compliance with the provisions of all
applicable Secretarial Standards issued by the Institute of Company Secretaries of India and
that such systems are adequate and operating effectively.
24. Deposits from public.
The Company has not accepted any deposits from public and as such, no amount on account
of principal or interest on deposits from public was outstanding as on the date of the balance
sheet.
25. Conservation of energy, technology absorption, foreign exchange earnings and
outgo
(a) Conservation of Energy:
This year we devoted considerable attention on methods and approaches to conserve
power. 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 customers
expect us to lead them through such change, we proactively & continuously invest in
developing technology building blocks and solution frameworks which add value to our
customers' business. Company uses a multi-pronged strategy for developing technology
assets and to promote innovation. These technology initiatives are driven by each business
unit based on the trends they see in their respective markets. These efforts help us in two
ways (i) gain our customers' trust & confidence; and (ii) attract & retain key talent 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 address
different market segment.
(c) Foreign Exchange earnings and outgo:
(Rs. In Lacs)
|
Particulars
|
31.03.2024
|
31.03.2023
|
|
Foreign Exchange Earnings
|
21,785.30
|
19,679.72
|
|
Foreign Exchange Outgo (Foreign
|
44.81
|
-
|
|
travelling)
|
|
|
26. Internal Auditors.
Pursuant to provisions of section of 138 of Companies Act 2013 and Companies (Accounts)
Rules, 2014, Board of Directors appointed M/s P R VARMA & Co Chartered Accountants
(Firm Registration No. 021498S) as Internal Auditors of the Company
27. Explanation or comments by the BOD on every qualification, Reservation or
adverse remark or disclaimer made by the auditors in audit report.
Pursuant to section 134(3) (f) (i) there are no qualification, reservation or adverse remark or
disclaimer made by the Auditors in Audit report.
28. Material changes & commitments affecting financial position of the company,
occurring after balance sheet date.
As per the requirement of Section 134 (3) (l) of the Companies Act, 2013, we hereby intimate
that your Company has no significant material changes and commitments affecting financial
position of the company between 31st March 2024 and the date of Board’s Report.
29. Auditors in audit report.
Pursuant to section 134(3) (f) (i) there are no qualification, reservation or adverse remark or
disclaimer made by the Auditors in Audit report.
30. Disclosures under sexual harassment of women at workplace (prevention,
prohibition & redressal) Act, 2013.
In order to comply with provisions of the Sexual Harassment of Women at Workplace
(Prevention, Prohibition and Redressal) Act, 2013 and Rules framed thereunder, the Company
has formulated and implemented a policy on prevention, prohibition and redressal of
complaints related to sexual harassment of women at the workplace. All women employees
permanent, temporary or contractual are covered under the above policy. An Internal Complaint
Committee (ICC) has been set up in compliance with the said Act. To build awareness in this
area, the Company has been conducting awareness sessions during induction. During the year
under review, no complaints pertaining to sexual harassment of women employees were
reported.
31. Acknowledgements.
The Directors thank the Company’s employees, customers, vendors, investors and academic
partners for their continuous support. The Directors also thank the Government of India,
Governments of various states in India, Governments of various countries and concerned
Government departments and agencies for their co-operation. The Directors appreciate and
value the contribution made by every member of the CES family
For and on behalf of the Board of Directors of
M/s. CES Limited
Date : 05-09-2024 Mohana Rao Kancharla Rama Krishna Sabbineni
Place : Hyderabad DIN: 00004288 DIN: 01825682
Whole- Time Director Director
|