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Directors Report of Cerebra Integrated Technologies Ltd.

Mar 31, 2015

Dear Members,

The Directors have pleasure in presenting before you the Annual Report of the Company together with the Audited Statements of Accounts for the 21styear ended 31stMarch, 2015.

CONSOLIDATED FINANCIAL SUMMARY/HIGHLIGHTS, OPERATIONS, STATE OF AFFARIS:

(Rs. in lakhs)

Particulars 2014-2015 2013-14 (for six months)

Gross Income 26767.13 13128.12

Profit Before Interest and Depreciation 677.00 371.30

Finance Charges 309.05 117.70

Gross Profit 367.52 253.60

Provision for Depreciation 106.06 47.05

Net Profit Before Tax 261.45 206.55

Provision for Tax 30.08 25.07

Net Profit After Tax 231.37 181.48

Minority Interest 43.27 38.19

Balance of Profit brought forward 188.10 143.29

Proposed Dividend on Equity Shares 0.00 0.00

Tax on proposed Dividend 0.00 0.00

Enterprise Solutions Division (ESD)

Cerebra has been since many years implementing various IT based projects for many startups and established companies. The Company studies customers' IT requirements, identify pain points and accordingly design and plan their IT H/W & S/ W infrastructure which includes networking, servers, storage, endpoints, operating systems, application software and ensure successful implementation.

Many small and medium size enterprises lack proper IT infrastructure and rely more on AMC providers for their IT requirements which get fulfilled on a short term basis mainly because the AMC companies lack the technical skills as well as the vision to design IT infrastructure based on growth plans. In addition, many more companies are looking to completely outsource their IT resources for day to day operations and maintenance. Cerebra can successfully help bridge this gap with its technical competencies and strategic tie-ups with leading MNC technology vendors. Cerebra can design, implement and maintain IT infrastructure for SMEs as well as large enterprises successfully.

During the financial year 2014-2015, the continued focus on research labs, airports, defense, PSUs, PSBs, etc have been fruitful with Cerebra successfully executing large orders from. PSU's, Judiciary Department, Education, Medical etc.. . The Company has also been successful in closing deals in the Transport, higher education segment both in government as well as private institutions. In addition Cerebra has added new corporate customers in the retail, manufacturing & healthcare segments during the period. Cerebra is considered as a preferred vendor by many of these organizations. Cerebra has also strengthened its relationships with leading MNC OEM Brands and established itself as a key player especially in education, healthcare, defense, space & research lab segments while we stay focused on making a mark in other state & central government departments/bodies/PSUs.

With continued focus from the account managers in the Education, Healthcare, Retail, Defense, Space, PSU, PSB, Research Labs, Airport, Large Corporates, SMBs, etc. and incremental focus on AMC, FMS, Implementation & other services, your Company intends to bring new business opportunities and a fairly large contribution to Cerebra's revenues in the new financial year 2015-2016.

E-WASTE Recycling Unit - This division is doing well and is soon expected to start the factory construction and every effort is being put in this direction. Currently collection, repair and refurbishment and E-Waste shredding activity are being carried out from its temporary facility in Peenya. The Board is pleased to report that the Company has now added more new customers to its existing client base.

Geeta Monitors Private Limited (GMPL) - Popularly known as Geeta Electronics has been going through change in structure to adapt to the market situations and its mission to becomes a pure System Integration company in next 2 years. Some key initiatives were put in place to adapt to the vision. While the run rate business of hardware continue through the committed resellers, the Company also thought that solution and service based business should be taken up priority with the end enterprise customer is the way forward which otherwise was predominately addressing theSME and SMB segment. GMPL has successfully executed few major orders on Storage products.

EMS (MANUFACTURING) DIVISION - This division has added many new customers this year and also retained existing clients who have consistently increased the current orders. Exports have also done well in this division. This division has performed well and is currently rated as one of the Top Vendors. Domestic market has also increased and the division has confirmed orders for the next six months. The Company is on the verge of adding another SMT line to its existing facility there by increased production.

Cerebra ME FZCO - Cerebra Middle East has seen an encouraging growth in FY 14-15 both in terms of a 30% increase in revenue as well as an expansion of its channel partner base in the Middle East. Being focused on profitability and market expansion, the last year saw an increase in channel partner by about 90 partners though UAE, Kuwait, Qatar, Saudi Arabia, Oman, Egypt, Lebanon, Central & Eastern Africa. CME also increased its vendor portfolio by on boarding market leaders like Milestone, Neverfail, Inventum, Solus and Perpetuity into its product portfolio. The Security Solutions division launched 18 months ago is now rolling out best in class solutions in the Surveillance Security domain through the region. The last year also saw CME establish itself in the Kingdom of Saudi Arabia with a local tie up in order directly manage its fast growing channel base in the country.

The last year saw CME not only establish their footprint in the Middle Eastern markets but also put forward their first steps into developing markets like Africa. The year saw some prestigious orders from Enterprise customers. CME's focus area for 2015-16 are going to be channel growth, channel enablement, loyalty programs and a substantial increase in its vendor and solutions portfolio. There will be a special focus on the Surveillance Security and Services business. The year will see an increase in CME's industry specific portfolio coverage with storage, infrastructure and security solutions for the Oil and Gas, Banking, Healthcare, Telco, Media, Education, Retail & Hospitality verticals. The Company plans to set offices in Qatar by early 2016 in order to strategically manageone of the fastest growing markets in the region.

ITES DIVISION: Cerebra LPO India Limited

LPO division started support for H1B petitions for clients in NJ, USA. The entire process of H1B was handled by Cerebra LPO team here.

A contract was executed with a US based Company for providing Immigration support who is a technology-powered immigration services provider that has reinvented the immigration process by providing end-to-end workflow software for applicants to provide a more effective, efficient, and affordable immigration solution. The company is the trusted partner to both individuals and companies worldwide, ranging from leading startups to publicly-traded companies.

Domestic orders for case summarisation of Judgements to include headnotes and facts of the case were executed. Efforts are on to strike additional partnerships for the division. The subsidiary is in talks with several prospects who are looking for support on Contract Review, Immigration paralegal support services and UK Conveyancing services.

Medical Transcription services division transcribed about 8.8 million lines for the year earning revenue of 16.9 Million rupees for the UK process. About 4.7 lakh lines were transcribed for US clients earning US$22,250.

Overall all the units performed well by adding new clients & increased revenues.

1) EVENTS SUBSEQUENT TO THE DATE OF FINANCIAL STATEMENTS:

There were no material changes and commitments which occurred affecting the financial position of the Company between March 31, 2015 and the date on which this report has been signed.

2) MATERIAL CHANGES AFFECTING THE FINANCIAL POSITION OF THE COMPANY:

The Company has decided to disinvest in the Subsidiary namely Geeta Monitors Private Limited and approval of Shareholder is sought. This disinvest may have impact on the Consolidated Financial Accounts

3) CHANGE IN THE NATURE OF BUSINESS:

The Company continue to focus on the strength of ESD, EMS and E Waste.

4) DIVIDEND:

With a view to conserve the resources of Company the Directors are not recommending any dividend.

5) AMOUNTS TRANSFERRED TO RESERVES:

The Board of the Company has decided/proposed to carry Rs. (76,18,158) to its reserves.

6) CHANGES IN SHARE CAPITAL:

The Company has increased its Authorised Share Capital from Rs. Rs. 50,20,00,000/- (Rupees Fifty Crores Twenty Lakhs only) divided into 5,02,00,000 (Five Crores Two Lakhs only) Equity Shares of Rs. 10/- (Rupees Ten only) each to Rs. 110,20,00,000/- (Rupees One Hundred Ten Crores and Twenty Lakhs only) divided into 11,02,00,000 (Eleven Crores Two Lakhs only) Equity Shares of Rs. 10/- (Rupees Ten only) each by passing special resolution by the Members of the Company at the last Annual General Meeting of the Company.

During the Financial Year 2014-15, the Share Capital of the Company has been increased from Rs. 48,09,26,820/- (Rupees Forty Eight Crores Nine Lakhs Twenty Six Thousand Eight Hundred and Twenty Only) divided into 4,80,92,682 (Four Crores Eighty Lakhs Ninety Two Thousand Six Hundred and Eighty Two) Equity Shares of Rs. 10/- (Rupees Ten only) to Rs. 84,32,89,620/- (Eighty Four Crores Thirty Two Lakhs Eighty Nine Thousands Six Hundred and Twenty only) divided into 8,43,28,962 ( Eight Crores Forty Three Lakhs Twenty Eight Thousand Nine Hundred and Sixty Two) Equity Shares of Rs. 10/- (Rupees Ten only) pursuant to allotment of 3,62,36,280 Equity Shares of Rs. 10/ - (Rupees Ten only) each under Private Placement.

Disclosure regarding Issue of Equity Shares with Differential Rights

During the year under review, the Company has not issued Shares with Differential Rights

Disclosure regarding issue of Employee Stock Options:

During the year under review, the Company has not issued Shares Employee Stock Options.

Disclosure regarding issue of Sweat Equity Shares:

During the year under review, the Company has not issued Sweat Equity Shares.

7) CAPITAL INVESTMENTS

Capital Investments during the year 2014-15 was at Rs.3113.88 Lakhs (Net of capital work-in-progress and capital advances) (2013-14: Rs. 3082.27 Lakhs).

8) BOARD MEETINGS:

The Meetings of the Board are held at regular intervals with a time gap of not more than 120 days between two consecutive Meetings. Additional Meetings of the Board of Directors are held when necessary. During the year under review Eight (8) meetings were held on 29th May 2014, 14th August 2014, 14th November 2014, 16th December 2014, 19th December 2014, 28th January 2015, 14thFebruary 2015, 31st March, 2015.

The Agenda of the Meeting is circulated to the Directors in advance. Minutes of the Meetings of the Board of Directors are circulated amongst the Members of the Board for their perusal.

The details of other Committee Meetings during the year 2014-15 are given in the Corporate Governance Report.

9) DIRECTORS AND KEY MANANGERIAL PERSONNEL:

Mr. P E. Krishnan (DIN: 01897686), Director of the Company, is proposed to be appointed as Independent Director for consecutive 5 years and he fulfil the requirements as per the Companies Act, 2013. His appointment is proposed under Special Business.

During the year Ms.Nutan Soudagar, has been appointed as Company Secretary of the Company w.e.f. 9th January, 2015 and designated as Compliance Officer of the Company as per the Listing Agreement. Ms.PreethiJavali, (DIN 07157145) who was appointed as an Additional Director, holds office up to the date of the ensuing Annual General Meeting; she is proposed to be appointed as Director of your Company.

Notice has been received from a member of the Company under Section 160 of the Companies Act, 2013 along with the requisite deposit.

Mr.P. Vishwamurthy, (DIN 01247336) Director, retires by rotation, as per the Companies Act, 2013 and being eligible, offers himself for re-appointment.

10) DECLARATION FROM INDEPENDENT DIRECTORS ON ANNUAL BASIS:

The Company has received necessary declaration from each Independent Director of the Company under Section 149(7) of the Companies Act, 2013 that the Independent Directors of the Company meet with the criteria of their Independence laid down in Section 149(6).

11) COMPOSITION OF AUDIT COMMITTEE:

As on March 31, 2015, the Audit Committee of the Company consists of three (3) Non-Executive Independent Directors and all of them have financial and accounting knowledge.

The Board has accepted the recommendations of the Audit Committee during the year under review.

The Audit Committee consists of the following:

a) Mr. S. Gopalakrishnan - Chairman

b) Mr. T S Suresh Kumar - Member

c) Mr. P. E. Krishnan - Member

12) NOMINATION AND REMUNERATION COMMITTEE POLICY:

The Board has, on the recommendation of the Nomination & Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management and for other employees and their remuneration. The same has been disclosed in the website atwww.cerebracomputers.com The Composition, criterial for selection of Directors and the Terms of Reference of the Nomination and Remuneration Committee is stated in the Corporate Governance Report.

The Nomination and Remuneration Committee consists of the following:

a) Mr. S. Gopalakrishnan - Chairman

b) Mr. T S Suresh Kumar - Member

c) Mr. P. E. Krishnan - Member

13) VIGIL MECHANISM/WHISTLE BLOWER POLICY:

The Company has established an effective vigil mechanism (for directors and employees to report genuine concerns) pursuant to the provisions of Section 177(9) & (10) of the Companies Act, 2013 and as per Clause 49 of the Listing Agreement which is available on website of the Company and there were no cases reported during the last period.

14) RECEIPT OF ANY COMMISSION BY MD / WTD FROM A COMPANY OR FOR RECEIPT OF COMMISSION / REMUNERATION FROM ITS HOLDING OR SUBSIDIARY:

No commission has been received by MD/WTD from a Company and/or receipt of commission / remuneration from it Holding or Subsidiary to be provided during the year under review.

15) DIRECTORS' RESPONSIBILITY STATEMENT:

In pursuance of section 134 (5) of the Companies Act, 2013, the Directors hereby confirm that:

(a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

(b) the directors had 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 and loss of the company for that period;

(c) the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

(d) the directors had prepared the annual accounts on a going concern basis; and

(e) the directors, had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively.

(f) the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively

16) EXTRACT OF ANNUAL RETURN:

As required pursuant to Section 92(3) of the Companies Act, 2013 and rule 12(1) of the Companies (Management and Administration) Rules, 2014, an extract of annual return in MGT 9 as a part of this Annual Report is attached as Annexure I.

17) INFORMATION ABOUT THE FINANCIAL PERFORMANCE / FINANCIAL POSITION OF THE SUBSIDIARIES / ASSOCIATES/ JV:

The Company has following Subsidiaries:

a) Cerebra LPO India Limited

b) Geeta Monitors Private Limited*

c) Cerebra Middle East FZCO, Dubai

d) Cerebra E Waste Recovery PTE Limited, Singapore

Financial performance of the Subsidiary Companies referred to in Section 129 of the Companies Act, 2013 in Form AOC-1 is annexed to this Report as Annexure-II.

*Geeta Monitors Private Limited ceased to be Subsidiary Company consequent upon the disinvestment of 51% stake.

The policy for determining material Subsidiaries as approved by the Board is uploaded on the Company's website at_www.cerebracomputers.com

18) AUDITORS:

The Auditors, Messrs Ishwar&Gopal, Chartered Accountants, Bangalore (registered with ICAI membership number 021748), retire at the ensuing Annual General Meeting and, being eligible, offer themselves for reappointment for a period of fiveyears from the conclusion of this Annual General Meeting till the conclusion of 26th Annual General Meeting.

The Company has received a certificate under Section 141 of the Companies Act, 2013 from them that their appointment would be within the limits specified therein.

AUDITORS' REPORT:

Regarding emphasis matter of Auditors Report dated 29th May 2015, suitable views are explained in the note no. 29 (11 & 12) of the notes to accounts.

Your Directors report that Hon'ble Additional City Civil Court Bangalore, has issued an interim injunction order from exercising their rights of alienating, encumbering or creating any manner of charge or third party rights with regard to the allotment of 2300000 Shares to Cimelia Resource Recovery Pte Limited, 3600000 Shares to Restorer Corp Pte. Ltd (Formerly known as Scenic Overseas (S) Pte Ltd) and 3300000 Shares to Leytron Technology Pte Ltd at a premium of Rs. 7.50 per Share on the grounds of non performance of their obligations under the Master Services Agreements signed with them for setting up the E Waste Recycling Plant in India.

Further to this arbitration proceedings have been initiated against them.

Regarding the trade receivables the management is hopeful of recovering the amount from debtors and hence no provision has been made.

19) SECRETARIAL AUDITOR:

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 has appointed Mr.Parameshwar G Bhat, Bangalore, a Company Secretary in Practice to undertake the Secretarial Audit of the Company. The Report of the Secretarial Auditor in the form of MR-3 is annexed to this Report as Annexure III.

Explanations by the Board on the comments of Secretarial Auditors:

Sl. Qualifications made by Explanations by the Board No. Secretarial Auditor

a. Delay in filing FCGPR for Delay is on account of FIRC being allotment of shares on not received in time from the conversion of FCCBs Bankers.

b. Corporate Office has not been Subsidiary Company Cerebra LPO registered under the Shops India Limited is registered and Establishments Act in the same premises and the Company utilizes this office as Corporate Office. The said Subsidiary is registered under the said Act.

c. The Company had obtained FIPB Suitable reply has been submitted approval for allotment of to RBI. shares to Restorer Corp PTE Limited (Formerly known as Scenic Overseas (S) PTE Limited), Leytron Technology PTE Limited and Cimelia Resource PTE Limited.in relation to the business of extraction of precious and non precious metals and plastic through E-waste Manufacturing & Recycling; however, the Company has mentioned in the FCGPR filed belatedly as Electronic Manufacturing Services (EMS) and IT Solutions (NIC - 2620). Hence, RBI sought clarifications on the same and the Company had replied for the same. The RBI had not issued the acknowledgement for the same till date.

d. There were some instances of delay in The Company will ensure filing ECB 2 returns. filing of of ECB 2 returns within the prescribed time limit.

20) CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE OUTGO:

(A) Conservation of energy:

Steps taken / impact on conservation of energy,

The Company’s operations are not power intensive. Nevertheless, your Company has introduced various measures to conserve and minimize the use of energy wherever it is possible.

i) Steps taken by the company for utilizing alternate sources of energy including waste generated

Nil

ii) Capital investment on energy conservation equipment Total energy consumption and energy consumption per unit of production as per Form A

(B) Technology absorption:

Efforts in brief, made towards technology absorption, adaptation and innovation

Benefits derived as a result of the above efforts, e.g. product improvement, cost reduction, product development, import substitution, etc.

In case of imported technology (imported during the last 5 years reckoned from the beginning of the financial year), following information may be furnished:

Technology imported

Year of Import

Has technology been fully absorbed

If not fully absorbed, areas where this has not taken place, reasons therefore and future plan of action

Nil

Not Applicable

Not Applicable

Nil

Not Applicable

Nil

Not Applicable

Not Applicable

Not Applicable

Not Applicable

(C) Research and Development (R&D)

Specific areas in which R & D carried out by the company

Benefits derived as a result of the above R & D

Future plan of action

Expenditure on R & D a) Capital b) Recurring c) Total d) Total R & D expenditure as a percentage of total turnover

(D)Foreign exchange earnings and Outgo

Activities relating to exports

Initiatives taken to increase exports

Development of new export markets for products and services

Export plans

Total Exchange used (Cash basis)

Total Foreign Exchange Earned (Accrual Basis)

The Company has not carried out any research and development work during the course of the year.

Not Applicable

Not Applicable

Nil

Nil

Nil

Nil

Not Applicable

Not Applicable

Not Applicable

Not Applicable

As on 31st March, 2015: Rs. 93,42,153/-

As on 31st March, 2015: Rs. NIL

21) RATIO OF REMUNERATION TO EACH DIRECTOR:

The Company had 26 employees as of March 31,2015. Pursuant to Section 197(12) of the Companies Act, 2013 and Rule 5 (1) (2) (3) of the Companies (Appointment and Remuneration) Rules, 2014, details/disclosures of Ratio of Remuneration to each Director to the median employee's remuneration is annexed to this report as Annexure - IV.

There are no employees posted and working in a country outside India, not being Directors or relatives, drawing more than sixty lakh rupees per financial year or five lakh rupees per month as the case may be. Therefore statement/ disclosure pursuant to Sub Rule 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is not required to be circulated to the members and is not attached to the Annual Report.

22) DEPOSITS:

Your Company has not invited/accepted/renewed any deposits from public as defined under the provisions of Companies Act, 2013 and Companies (Acceptance of Deposits) Rules, 2014 and accordingly, there were no deposits which were due for repayment on or before 31st March, 2015.

23) SIGNIFICANT & MATERIAL ORDERS PASSED BY THE REGULATORS:

No order was passed by any court or regulator or tribunal during the period under review which impacts going concern status of the Company.

24) DETAILS OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS:

The Company continued to maintain, high standards of internal control designed to provide adequate assurance on the efficiency of operations and security of its assets. The adequacy and effectiveness of the internal control across various activities, as well as compliance with laid-down systems and policies are comprehensively and frequently monitored by your Company's management at all levels of the organization. The Audit Committee, which meets at- least four times a year, actively reviews internal control systems as well as financial disclosures with adequate participation, inputs from the Statutory, Internal and Corporate Secretarial Auditors.

25) PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS:

The Company has duly complied with the provision of Section 186 of the Companies Act, 2013.

During the year under review, the Company has not given any Loan, Guarantees or made Investments within the meaning of Section 186 of the Companies Act, 2013.

26) RISK MANAGEMENT POLICY:

The Company has not yet formulated a Risk Management Policy and has in place a mechanism to inform the Board Members about risk assessment and minimization procedures and undertakes periodical review to ensure that executive management controls risk by means of a properly designed framework.

27) CORPORATE SOCIAL RESPONSIBILTY POLICY :

Since the Company does not meet the criteria for the applicability of Section 135 of the Companies Act read with the Companies (Accounts) Rules, 2015, this clause is not applicable.

28) INDUSTRIAL RELATIONS:

Industrial relations have been cordial and constructive, which have helped your Company to achieve production targets.

29) RELATED PARTY TRANSACTIONS :

There are no related party transactions during the year for disclosure.

30) FORMAL ANNUAL EVALUATION:

Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board has carried out an annual performance evaluation of its own performance, the Directors individually as well as the evaluation of the working of its Audit, Nomination & Remuneration and Compliance Committees.

31) LISTING WITH STOCK EXCHANGES:

The Company confirms that it has paid the Annual Listing Fees for the year 2015-16 to NSE and BSE where the Company's Shares are listed.

32) CORPORATE GOVERNANCE AND SHAREHOLDERS INFORMATION:

Your Company has taken adequate steps to adhere to all the stipulations laid down in Clause 49 of the Listing Agreement. A report on Corporate Governance is attached to this report as Annexure V.

Certificate from the Practising Company Secretary of the company confirming the compliance with the conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement is attached to this report.

33) DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013:

Your Company has always believed in providing a safe and harassment free workplace for every individual working in Company's premises through various interventions and practices. The Company always endeavors to create and provide an environment that is free from discrimination and harassment including sexual harassment.

A policy on Prevention of Sexual Harassment at Workplace has been released by the Company. The policy aims at prevention of harassment of employees and lays down the guidelines for identification, reporting and prevention of undesired behavior. Three member Internal Complaints Committee (ICC) was set up from the senior management with women employees constituting majority. The ICC is responsible for redressal of complaints related to sexual harassment and follows the guidelines provided in the Policy.

No complaints pertaining to sexual harassment was reported during the year.

34) FRAUD REPORTING (REQUIRED BY COMPANIES AMENDMENT BILL, 2014)

During the year under review, No fraud has been reported.

35) ACKNOWLEDGEMENTS:

The Directors wishes to place on record their appreciation for the sincere and dedicated efforts of all employees. Your Directors would also like to thank the Shareholders, Bankers and other Business associates for their sustained support, patronage and cooperation.

For and on behalf of Cerebra Integrated Technologies Limited

Place : Bangalore V Ranganathan Shridhar S Hegde Date :14th August, 2015 Managing Director Whole Time Director DIN: 01247305 DIN: 01247342


Sep 30, 2013

The Directors present their Nineteenth Annual Report together with the audited Balance Sheet and the Statement of Profit and Loss for the year ended 30th September, 2013.

FINANCIAL RESULTS:

(Rs. in lakhs) Particulars 2012-13 2011-12

Total Income 23205.11 16359.02

Total Expenditure 22615.33 15880.42

Operating Profits (PBIDT) 821.90 652.72

Interest 116.81 96.05

Depreciation 115.31 78.07

Profit Before Extra Ordinary Income 589.78 478.60

Tax Expense 33.37 131.58

Profit after Current Tax 556.41 347.02

Minority Interest 20.09 48.96

Profit available for appropriations 536.32 298.06

REVIEW OF OPERATIONS & GROWTH OPPORTUNITIES-MANAGEMENT DISCUSSION AND ANALYSIS REPORT FOR THE YEAR ENDED 30TH SEPTEMBER, 2013:

Perhaps the Shareholders have widely observed continued global economic impact and rising of the Euro debt crisis leading to recessionary trends in the Corporate Sector. Given the circumstances, your Company was still able to overcome some of these hurdles and has achieved better performance. Your Company continued to focus on the hardware business and this segment turned out to be a major revenue earner this year too.

Despite the continued recession, the Company achieved better results in the year under report as can be witnessed from the financials

Whilst the total income increased from Rs. 16359.02 lakhs in the previous year to Rs. 23205.11 lakhs in the year i.e. by Rs. 6846.09 lakhs with 42% growth, the Profit stood enhanced from Rs.298.06 lakhs in the previous year to Rs. 536.32 lakhs in the year with 80% growth.

Your Company has registered and taken possession of 12 acres of industrial land near Bangalore, allotted by the Government of Karnataka.

Meanwhile, an important development which gives this project tremendous fillip is that the E-Waste Disposal Rule has been passed by the Ministry of Environment and Forests making it mandatory from May 1, 2012, for all to dispose of their E-Waste through authorised E-waste recycler only.

The team from E-Waste Recycling Division is being expanded. Cerebra is the only Company in India to be given the license to set up an Integrated E-Waste Recycling Facility with a processing capacity of 96,000 MT per annum. This license has been obtained from the Karnataka State Pollution Control Board (KSPCB), Bangalore. The temporary E-Waste facility at Peenya is doing well and has successfully added many new customers and contracts and the preferred E-Waste Management partners for many MNC Companies and many others. Cerebra after calling off the SPA with Enviro Hub Holdings Limited in Signapore has entered in to a MOU with E-Waste Systems INC, UK.

The Directors report that the Company continues to be debt free except for subsidiary Company Geeta Monitors Private Limited.

SUBSIDIARY COMPANIES

The Company has following subsidiaries:

1. Cerebra LPO India Limited.

2. Geeta Monitors Private Limited.

3. Cerebra Middle East FZCO, Dubai.

4. Cerebra E Waste Recovery Pte Ltd. Singapore

The Ministry of Corporate Affairs, Government of India has issued Circular granting general exemption to Companies under Section 212(8) of the Companies Acts, 1956 (''the Act'') from attaching the document referred to in Section 212(1) of the Act pertaining to its subsidiaries. However, certain information as required is furnished in Annexure.

ITES DIVISION:

Cerebra LPO India Limited continued to consolidate its business and has added a couple of clients. Cerebra LPO added one client from Australia to do exclusivity agreements. Cerebra LPO entered in to a partnership agreement with a leading Legal advisory Company in New York, USA for acquiring Immigration related work. Long term agreements with a conveyancing firm in UK for paralegal services ended in August 2013. Cerebra LPO signed another agreement with a UK based Conveyancing firm who has begun providing Legal transcription work and will then move on to residential conveyancing process.

Medical transcription Services added one more client from USA and are currently doing about 5 Lakh lines per annum. Talks are on with another USA based large firm who are expected to provide about 20000 lines per month initially and should start by December 2013. Overall the subsidiary performed well by adding new clients.

Geeta Monitors Pvt. Ltd (GMPL), popularly known as Geeta Electronics has been going through change in structure to adapt to the market situations and its mission is to become a pure SI company in next 2 years. Some of the key initiatives which were put in place to adapt to the vision were to take up security products. While the run rate business of hardware continue through the committed resellers, the company also thought that solution and service based business should be taken up priority with the end enterprise customer is the way forward which otherwise was predominantly addressing the SME and SMB segment.

GMPL also put in place for the customers what we call as "FAAS- Finance as a Service" to take the route of OPEX model to support its esteemed customers. There were some customer additions through this models also in the last quarter.

ESD Division – During the year under report, the focus on research labs, defense, PSUs, PSBs, etc has been fruitful with Cerebra successfully executing orders from PSU''s and Defense sectors. The Company also has been successful in closing deals in the higher education segment both in Government as well as private institutions. Cerebra is considered as a preferred vendor by many of these organizations. Cerebra has also strengthened its relationships with leading MNC OEM Brands and has established itself as a key player especially in education, defense, space & research lab segments whilst we stay focused on making a mark in other state & central government departments/bodies/PSUs.

With continued focus from the account managers in the Education, Defense, Space, PSU, Research Labs, Healthcare, etc. the Company intends to bring new business opportunities and a fairly large contribution to Cerebra''s revenues in the new financial year 2013-2014. The market in Bangalore/Karnataka alone has a potential opportunity of close to INR 100 crores during the new financial year with demands for server, storage, networking, security and managed services expected to see an improved growth during this period. Further the Company will also look for opportunities outside the state to help maximize the revenues. With the E-waste division making decisive inroads in their domain, it is hoped to maximize the opportunities by working in tandem.

Cerebra M E FZCO - Cerebra Middle East has seen a tremendous growth in FY 12-13 both in terms of a massive increase in revenue as well as an expansion of its channel partner base in the Middle East. CME closed the year with a revenue of USD 9.25 Million as against USD 3.65 Million last year with good profitability.

Having closed the fiscal year by winning a major Data Center contract for 2.3 Million USD which will be billed and executed in the first quarter of FY 13-14, CME''s focus areas for the new financial year are going to be channel growth, channel enablement, loyalty programs and a substantial increase in its vendor and solutions portfolio. The year will see an increase in CME''s industry specific portfolio coverage with storage, infrastructure and security solutions for the Oil and Gas, Banking, Healthcare, Telco, Media, Education, Retail & Hospitality verticals. Cerebra Middle East will launch its partner program, C-Connect, in early 2014 and is expected to onboard at least 4 new vendors before end of its second quarter.

DIVIDEND:

Your Directors regret to inform you that no dividend is recommended for the year ended 30th September, 2013 considering the aggressive expansion programs in different verticals and the need of capital needs – both capex and opex.

DIRECTORS:

Mr. Gururaj K. Upadhya and Mr. S. Gopalakrishnan, Directors, retire by rotation. In accordance with the Companies Act, 1956 and Articles of Association of the Company and being eligible, offer themselves for re-appointment.

FIXED DEPOSITS:

Your Company has neither accepted nor renewed any Fixed Deposits during the year ended 30th September, 2013.

AUDIT COMMITTEE:

Audit Committee constituted by the Board of Directors with requisite composition to fall in line with the prevailing laws continued to discharge its functions during the year under report.

AUDITORS:

Messrs Ishwar & Gopal, Chartered Accountants, the existing Auditors, have expressed their willingness to get reappointed at the ensuing Annual General Meeting.

The Board of Directors recommends their appointment.

AUDITORS'' REPORT:

Regarding the opinion of the auditors emphasis of matter which are self explanatory in note no. 2B(l, m and n) the explanations of the directors are as follows :

Regarding the share application monies and capital advances the management is negotiating for an amicable settlement.

Regarding trade receviable the management is hopeful of recovering the amount from debtors and hence no provision was made.

PARTICULARS OF EMPLOYEES:

There was no employee drawing remuneration in excess of the limits prescribed under Section 217(2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975.

DEPOSITORY SYSTEMS:

Your Company continues with an arrangement with National Securities Depositories Limited (NSDL) and Central Depository Services (India) Limited (CDSL) for dematerialization of your Company''s securities in accordance with the provisions of the Depositories Act 1995, which are fully operational and members may avail of such facilities. With this, the members have an option / discretion to hold their demat shares in the Company through National Securities Depositories Limited and/or Central Depository Services (India) Limited.

COMPLIANCE OF STOCK EXCHANGE FORMALITIES:

Your Company has fully complied with the Listing formalities of all the Stock Exchanges where the Company''s shares are listed. Your Directors have taken necessary action in connection with the Guidelines/Regulations issued by Securities and Exchange Board of India (SEBI) on Insider Trading.

ACCOUNTING STANDARDS:

The Company has followed the mandatory Accounting Standards for preparation of Financial Statements for the year ended 30th September, 2013.

CORPORATE GOVERNANCE:

The Company has complied with all the recommendations of Corporate Governance Code as provided in Clause 49 of the Listing Agreement. A detailed report on Corporate Governance has been included separately in the Annual Report.

INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY:

Your Company is committed to transparency, good Internal Controls and risk Management. It has established Adequate System of Internal Control commensurate with size of the business.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO:

Information pursuant to Section 217(1) (e) of the Companies Act, 1956 read with the Companies (Disclosure of particulars in the Report of the Board of Directors) Rules, 1988 is Nil.

FOREIGN EXCHANGE EARNINGS AND OUTGO:

Foreign Exchange Earnings: Rs. 293.72 Lakhs Foreign Exchange Outgo: Rs. 76.01 Lakhs

DIRECTORS'' RESPONSIBILITY STATEMENT:

As per Section 217(2AA) of the Companies (Amendment) Act, 2000 your Directors hereby confirm that –

- In the preparation of these annual accounts, the applicable accounting policies and standards are followed, as issued by the Institute of Chartered Accountants of India (ICAI) and the requirements of the Companies Act, 1956, to the extent applicable. No material departures are noticed from the prescribed accounting standards;

- The accounting policies are consistently applied and reasonable, prudent judgment and estimates are made so as to give a true and fair view of the state of affairs of the Company as at the end of the year ended September 30, 2013 and of the "Profit/(Loss)" of the Company for that year;

- The accounts for the year-ended 30.9.2013 have been prepared on a system of historical cost, on a going concern and on accrual basis;

- Proper and sufficient care has been taken for 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, errors and other irregularities;

- Financial Statements have been audited by Messrs Ishwar & Gopal, Chartered Accountants, Bangalore, being the Statutory Auditors of the Company.

UNUSUAL ITEMS AFTER THE YEAR END DATE:

In the opinion of the Directors, no item, transaction or event of a material and unusual nature has arisen in the interval between the end of the financial year and the date of this report which would affect substantially the results of the operations of the Company and for the financial year in which this report is made.

ACKNOWLEDGEMENTS:

Your Directors thank the Shareholders/Investors for their response and confidence, Customers, Vendors, Bankers, Channel Partners, Software Technology Park of India, the various Central Government Departments and State Government Departments for their invaluable co-operation and support for your Company''s survival.

For and on behalf of the Board

Place: Bangalore V Ranganathan Shridhar S. Hegde

Date: 30th November, 2013 Managing Director Whole time Director


Sep 30, 2009

The Directors present their Fifteenth Annual Report together with the audited Balance Sheet and Profit and Loss Account for the year ended 30th September, 2009.

FINANCIAL RESULTS (Rs. in lakhs) Particulars 2008-09 2007-08

Total Income 5046.91 1646.79

Total Expenditure 4876.23 1517.77

Operating Profits (PBIDT) 170.68 129.02

Interest 3.82 6.21

Depreciation 20.55 16.30

Profit Before Extra Ordinary Income 146.31 106.51

Extra Ordinary Income 0 878.94

Provision for Tax - Current 0 0.72 Profit after Current Tax but before Deferred Tax 146.31 984.73

Deferred Tax -

Profit available for appropriations/(Loss) 146.31 984.73



REVIEW OF OPERATIONS:

After a period of 5 years, your Board is pleased to report that the efforts infused in all directions to revive the Company have initiated to yield results. Shareholders will note that the Financial Results validate the performance of the Company. Substantially higher growth coupled with robust enhanced profits have instilled tremendous confidence in Team Cerebra. The Company during the year executed orders in the hardware sector. The Company has entered into contracts with some companies on Electronic Manufacturing Services (EMS) and job work for its EMS Division. Your Company explored the opportunities and started operations in the areas of Legal Process Outsourcing, Medical Transcription etc., for its IT/ITeS division.

The Company was discharged by BIFR Your Company has no borrowings from any Bank(s) or Financial Institution(s). EXPANSION PLAN:

Having exited from the purview of Board for Industrial and Financial Reconstruction (BIFR), your Company has reverted back to the profitable position. The Board having felt that the time has come to expand or diversify took 3erious initiatives towards this direction. After careful and in-depth study, it was decided to synergically set up electronic recycling plant for E-Waste Management. Your Company with the technical support of an overseas Technology Enterprise will initiate the business accordingly in this direction.

The Directors seek your approvals to various resolutions enabling the setting up of the business. From time to time, Investors will be updated on the process.

ITES DIVISION:

With a view to have clear cut demarcation of segments, your Directors after in-depth evaluation, decided to hive off the Information Technology Enabled Services (ITES) business of the Company to its subsidiary namely Cerebra LPO India Limited pursuant to Section 293 (1)(a) of the Companies Act, 1956. Directors hereby seek your approval for the same through Postal Ballot pursuant to Section 192Aof the Companies Act, 1956, for which relevant documents have been already forwarded to you.

DIVIDEND:

Your Directors regret to inform you that no dividend is declared for the year-ended 30.9.2009 in view of the Company requiring its profits to be ploughed back in view of the expansion program and to meet working capital needs.

DIRECTORS:

Mr. T. S. Suresh Kumar and Mr. P. E. Krishnan, Directors, retire by rotation. In accordance with the Companies Act, 1956 and Articles of Association of the Company and being eligible, offer themselves for re-appointment.

FIXED DEPOSITS:

Your Company has neither accepted nor renewed any Fixed Deposits during the year ended 30th September, 2009.

AUDIT COMMITTEE

Audit Committee constituted by the Board of Directors with requisite composition to fall in line with the prevailing laws continued to discharge its functions during the year under report.

AUDITORS:

Messrs. M S Reddy & Associates, Chartered Accountants, Bangalore, Auditors of the Company retire at the end of forthcoming Annual General Meeting and are eligible for appointment.

Auditors observations: regarding comments of the Auditor in their report dated 30.11.2009 the explanation of the Directors are as follows:

a) The management is hopeful of recovering the amount from debtors and hence no provision was made.

b) The Directors and the management is in the process of obtaining confirmations.

PARTICULARS OF EMPLOYEES:

There was no employee drawing remuneration in excess of the limits prescribed under Section 217(2A) of the Companies Act, 1956 read with Companies (Particulars of employees) Rules, 1975.

DEPOSITORY SYSTEMS

Your Company continues with an arrangement with National Securities Depositories Limited (NSDL) and Central Depository Services (India) Limited (CDSL) for dematerialization of your Companys securities in accordance with the provisions of the Depositories Act 1995, which are fully operational and members may avail of such facilities. With this, the members have an option / discretion to hold their Demat shares in the Company through National Securities Depositories Limited and/or Central Depository Services (India) Limited.

COMPLIANCE OF STOCK EXCHANGE FORMALITIES:

Your Company has fully complied with the Listing formalities of all the Stock Exchanges where the Companys shares are listed. Your Directors have taken necessary action in connection with the Guidelines/Regulations issued by Securities and Exchange Board of India (SEBI) on Insider Trading.

ACCOUNTING STANDARDS:

The Company has followed the mandatory Accounting Standards for preparation of Financial Statements for the year ended September 30, 2009.

CORPORATE GOVERNANCE:

The Company has complied with all the recommendations of Corporate Governance Code as provided in Clause 49 of the Listing Agreement. A detailed report on Corporate Governance has been included separately in the Annual Report.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO:

Information pursuant to Section 217(1) (e) of the Companies Act, 1956 read with the Companies (Disclosure of particulars in the Report of the Board of Directors) Rules, 1988 is Nil.

FOREIGN EXCHANGE EARNINGS AND OUTGO:

Foreign Exchange Earnings: Rs. 50.93 Lakhs Foreign Exchange Outgo: Rs. Nil

DIRECTORS RESPONSIBILITY STATEMENT:

As per Section 217(2AA) of the Companies (Amendment) Act, 2000 your Directors hereby confirm that -

-In the preparation of these annual accounts, the applicable accounting policies and standards are followed, as issued by the Institute of Chartered Accountants of India (ICAI) and the requirements of the Companies Act, 1956, to the extent applicable. No material departures are noticed from the prescribed accounting standards;

-The accounting policies are consistently applied and reasonable, prudent judgment and estimates are made so as to give a true and fair view of the state of affairs of the Company as at the end of the year ended September 30, 2009 and of the "Profit/(Loss)" of the Company for that year;

-The accounts for the year-ended 30.9.2009 have been prepared on a system of historical cost, on a going concern and on accrual basis;

-Proper and sufficient care has been taken for 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, errors and other irregularities;

-Financial Statements have been audited by Messrs. M S Reddy & Associates, Chartered Accountants, Bangalore, being the Statutory Auditors of the Company.

UNUSUAL ITEMS AFTER THE YEAR END DATE:

In the opinion of the Directors, no item, transaction or event of a material and unusual nature has arisen in the interval between the end of the financial year and the date of this report which would affect substantially the results of the operations of the Company and for the financial year in which this report is made.

ACKNOWLEDGEMENTS:

Your Directors thank the Shareholders/Investors for their response and confidence, Customers, Vendors, Bankers, Channel Partners, Software Technology Park of India, the various Central Government Departments and State Government Departments for their invaluable co-operation and support for your Companys survival.

For and on behalf of the Board Place: Bangalore V Ranganathan Gururaja K Upadhya Date: 30.11.2009 Managing Director Director Technical

 
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