CES Ltd

To the Members,

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.

The financial performance of the Company is presented below

Standalone results - (Amount in Lakhs)

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.

During the end of the financial year 2024 the Company has not transferred any amount to reserves.

The Company is at expansion mode; therefore, Board is of Opinion that there is no need to declare dividends for the financial year ended 31^st March, 2024.

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.

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: -

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/.

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.

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.

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.

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.

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/.

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.

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.

The details pertaining to the composition of the Audit Committee are included in the Corporate Governance Report, which is a part of this report.

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.

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.

Company has a robust Business Risk Management framework to identify, evaluate business risks and opportunities.

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/.

The particulars of loans, guarantees and investments as per Section 186 of the Act by the Company, have been disclosed in the financial statements.

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.

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/.

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

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.

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.

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.

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.

• 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.

Your company carries out various research and development initiatives to address different market segment.

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

Pursuant to section 134(3) (f) (i) there are no qualification, reservation or adverse remark or disclaimer made by the Auditors in Audit report.

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.

Pursuant to section 134(3) (f) (i) there are no qualification, reservation or adverse remark or disclaimer made by the Auditors in Audit report.

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.

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