Directors Report of Cerebra Integrated Technologies Ltd.

Mar 31, 2018

To the Members

The Directors have pleasure in presenting before you the Annual Report of the Company together with the Audited Financial Statements for the 24th financial year ended 31st March, 2018.

CONSOLIDATED FINANCIAL SUMMARY/HIGHLIGHTS, OPERATIONS AND STATE OF AFFAIRS:

(Rs. in Lakhs)

Particulars	2017-18	2016-17
Gross Income	31,613.58	25,232.62
Profit Before Interest and Depreciation	4,391.51	1,474.31
Finance Charges	171.08	146.53
Gross Profit	4,220.43	1,327.78
Provision for Depreciation	30.49	17.01
Profit before exceptional and extraordinary items and tax	4,189.94	1,310.77
Exceptional Items	0	0
Provision for Tax	732.70	96.02
Net Profit After Tax	3,457.24	1,214.76
Other Comprehensive Income	3.08	-27.19
Total Comprahensive Income	3,460.32	1,187.55
Total Comprehensive Income Attributable to
a) Owners	3,242.33	1,100.63
b) Non-Controlling Interest	217.99	86.93
Earnings per Equity Share of Rs 10/- each
Basic	2.75	1.12
Diluted	2.73	1.12

1. PERFORMANCE OF THE COMPANY:

Your Company works closely with leading MNC technology vendors such as Dell EMC, HPI, HPE, Fujitsu, Intel, Hitachi, Fortinet, Checkpoint, Extreme Networks, Lenovo, Acer, Canon, TVSE, Brother, Samsung, Xerox, Radware, VMware, RHEL, Microsoft etc to name a few. Cerebra can design, supply, implement and maintain IT infrastructure for SMEs as well as large enterprises successfully. Cerebra can successfully help customers with their IT requirements with its technical competencies and strategic tie-ups as well as sourcing abilities. Cerebra has also built a very strong team to successfully execute large size multi location delivery, installation and deployment of IT infrastructure products as well as services. Your Company is now a Platinum Partner for Dell EMC.

Your Company''s continued focus on research labs, airports, defence, PSUs, PSBs, etc has been enviably significant and on the Company successfully has been executing orders from PSU, ISRO, defence labs, various departments under the Government of Karnataka police, judiciary, NIMHANS, private education institutions to name a few.

In addition, your Company has been acquiring new customers in the SMB, retail, manufacturing and healthcare segments. Your Company also has been 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 Govt, education, healthcare, defence, space and research lab segments while we stay focused on making a mark in other state and central government departments/bodies/PSUs and private enterprise companies.

Cerebra has recently completed execution of a few prestigious projects related to modernisation and augmentation of IT infrastructure in police, courts, revenue and treasury departments across the state.

With incremental focus and engagement in network security, backup and security & surveillance opportunities, the Company is looking to further strengthen the offerings.

ELECTRONIC MANUFACTURING SERVICES:

Performance of the division is very good and has added new customers this year also and retained existing clients who have consistently increased the current orders. This division is currently rated as one of the Top Vendors. Domestic market has increased and the division has confirmed orders. Your Company is already looking to expand by adding one or two SMT lines in the upcoming financial year which will automatically increase production.

E-WASTE RECYCLING BUSINESS:

The plant is fully functional and is processing E-waste. A new line of business EPR or Extended Producer Responsibility - Organisation has been added to the current portfolio wherein Cerebra will be the Producer Responsibility Organization for large and medium manufacturers of IT Products, White Goods such as TV, Fridge, Washing Machines and other electrical and electronic products. Cerebra has applied for a i.e., producers license with the Central Pollution Control Board (CPCB) and is awaiting its authorisation. Cerebra is gearing up its marketing efforts and building a large infrastructure for collection of WEEE and white goods by appointing both channel and dealer network and also collects direct through its representatives. It is in talks with large logistics and reverse logistics providers for collection PAN India and transportation of goods to its state of the art facility at Narasapura, Kolar District.

INDUSTRY STRUCTURE AND DEVELOPMENTS

Cerebra Middle East FZO Dubai

Cerebra Middle East has seen an encouraging growth in FY 17-18 both in terms of a 29% increase in revenue as well as an expansion of its channel partner base in the Middle East. CME closed the financial year with a revenue of USD 20.8 Millions as against USD 16.3 Millions last year with a Net Profit Ratio of 14.1 %. Being focused on profitability and market expansion, the last year there was an increase in channel partner to about 150 partners though UAE, Kuwait, Qatar, Saudi Arabia, Oman, Egypt, Central & Eastern Africa. CME also increased its vendor portfolio by onboarding market leaders like Rassilient and Promise into its Surveillance Security product portfolio along with Actifio in its ICT portfolio. The Security Solutions division launched 3 years ago is now rolling out best in class solutions in the Surveillance Security domain through the region. CME''s services initiative C:\Serve performed beyond expectations. CME now has a vast experience in providing top class contingent workforce management services and exceeding client expectations through highly effective processes for recruiting, screening, testing, and consultant management. Many clients of your Company regularly seekadvice for making changes to their internal IT Staffing and Vendor Management Programs. Over the years, your Company formulated strategies, processes and in-house IT systems - enabling our sourcing engine to mature into one of the strongest in the line of business. CME has also appointed a professional to take expand Cerebra''s Electronic Waste & Recycling business into Middle East and Africa.

In the financial year 2017-18, CME not only increased its footprint in the Middle Eastern markets but also put forward its first step into developing markets like Africa. During the previous year, there were some prestigious orders from Enterprise customers like Qatar Petroleum, Meraas Holding, Abu Dhabi Commercial Bank, National Bank of Abu Dhabi, Abu Dhabi Police, Dubai Mall, Burj Khalifa, Abu Dhabi Commercial Bank, Sharjah Islamic Bank etc. through CME''s established Enterprise channel. CME''s focus area for the financial year 2018-19 would 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. There would be 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. E-Waste & Recycling Management Division will also be expanded for the Middle East & Africa markets in the upcoming years.

2. MATERIAL CHANGES AND COMMITMENTS:

There were no material changes and commitments which occurred, affecting the financial position of the Company between 31st March, 2018 and the date on which this report has been signed.

3. CHANGE IN THE NATURE OF BUSINESS:

The Company continues to focus on the strength of ESD, EMS and E-Waste and in addition, the Company will be focusing on the High End Servers, Large Data Storage etc.

4. DIVIDEND:

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

5. AMOUNTS TRANSFERRED TO RESERVES:

The Board of the Company has proposed not to transfer any funds to its reserves.

6. CHANGES IN SHARE CAPITAL:

Authorized Share Capital

There were changes in the Authorised Share Capital of the Company during the financial year 2017-18 as follows:

The Authorised Share Capital of the Company has been increased from Rs. 110,20,00,000 (Rupees Hundred and Ten Crores Twenty Lakhs only) divided into 11,02,00,000 (Eleven Crores Two Lakhs) Equity Shares of Rs. 10/- (Rupees Ten only) each to Rs. 126,00,00,000 (Rupees One Hundred and Twenty Six Crores only) divided into 12,60,00,000 (Twelve Crores Sixty Lakhs) Equity Shares of Rs. 10/- (Rupee Ten only) each by additionally creating 1,58,00,000 (One Crores Fifty Eight Lakhs) Equity Shares of Rs. 10/- (Rupees Ten only) each in the Extra Ordinary General Meeting of the Company held on 28th April, 2017.

Paidup Share Capital

During the financial year 2017-18, the Paid up Share Capital of the Company has been increased from Rs. 108,49,66,320/- (Rupees One Hundred and Eight Crores Fortynine Lakhs Sixty Six Thousand Three Hundred and Twenty only) divided into 10,84,86,482 (Ten Crores Eighty Four Lakhs EithtySix Thousnad Four Hundred and Eighty Two) Equity Shares of Rs. 10/- (Rupees Ten only) to Rs. 1,20,39,66,320 (Rupees Hundred and Twenty Crores Thirty nine Lakhs Sixty six Thousand Three Hundred and Twenty only) divided into 12,04,06,782 (Twelve Crores Four Lakhs Six Thousnad Seven Hundred and Eighty Two) Equity Shares of Rs. 10/- (Rupees Ten only) pursuant to allotment of 1,19,00,000 Equity Shares of Rs 10/- each at a premium of Rs. 30/- (Rupees Thirty only) each on preferential basis to Strategic Investor, Kuber Global Fund, a company incorporated in the Republic of Mauritius on 22nd June 2017.

Allotment of Warrants:

Pursuant to the Special Resolution passed by the Shareholders at the Extra Ordinary General Meeting of the Company held on 28th April, 2017, the Company has allotted 53,00,000 Warrants convertible into Equity Shares at nominal value of Rs. 10/- (Rupees Ten only) each at a premium of Rs. 30/- (Rupees Thirty only) per Share to certain Promoters on certain terms and conditions agreed upon.

Disclosure regarding Issue of Equity Shares with Differential Voting Rights

During the financial year under review, the Company has not issued any Shares with Differential Voting Rights.

Disclosure regarding issue of Employee Stock Options:

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

Disclosure regarding issue of Sweat Equity Shares:

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

7. CAPITAL INVESTMENTS

Capital Investments during the financial year 2017-18 was at Rs. 2,384.69 Lakhs (Net of capital work-in-progress and capital advances) (2016-17) is Rs. 2,400.37 Lakhs).

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. During the financial year under review Six (6) Meetings were held on 29^th May 2017, 22^nd June 2017, 14^th September 2018, 1^st November 2017, 30^th November 2017 and 12^th February 2018.

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 held during the financial year 2017-18 are given in the Corporate Governance Report.

8. DIRECTORS AND KEY MANANGERIAL PERSONNEL:

In terms of the provisions of the Companies Act, 2013 and the Articles of Association of the Company Mr. Shridhar S. Hegde (holding DIN: 01247342) Whole Time Director, retires by rotation at the forthcoming Annual General Meeting and being eligible offer himself for re-appointment.

Mr. Riyaz Suterwalla (DIN: 07866056) was appointed as Additional Director (Non Executive and Non Independent) of the Company with effect from 14th September, 2017 and his appointment will be subject to approval of the Shareholders and the same has been included as one of the agenda items in the Notice convening the Annual General Meeting.

9. 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).

10. COMPOSITION OF AUDIT COMMITTEE:

As on 31st March, 2018 the Audit Committee of the Company consisted 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 financial 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

11. NOMINATION AND REMUNERATION COMMITTEE POLICY:

The Board has, on the recommendation of the Nomination and 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 on the website of the Company aturl http://www.cerebracomputers.com/governance.htm. The Composition, criteria 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

12. VIGIL MECHANISM/WHISTLE BLOWER POLICY:

The Company has established an effective Vigil Mechanism pursuant to the provisions of Sections 177(9) and (10) of the Companies Act, 2013 and as per Regulation 4(2)(d)(iv) of SEBI (Listing Obligations and Disclosure Requirements), Regulations, 2015 which is available on website of the Company at urlhttp://www.cerebracomputers.com/governance.htm and there were no cases reported during the last period.

13. 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 its Subsidiary Companies to be provided during the financial year under review.

14. EXTRACT OF ANNUAL RETURN:

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

15. INFORMATION ABOUT THE FINANCIAL PERFORMANCE / FINANCIAL POSITION OF THE SUBSIDIARIES / ASSOCIATES / JV:

The Company has following Subsidiaries:

a) Cerebra LPO India Limited, India

b) Cerebra Middle East FZCO, Dubai

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.

The Policy for determining material Subsidiaries as approved by the Board is uploaded on the Company''s website aturlhttp://www.cerebracomputers.com/governance.htm.

16. STATUTORY AUDITORS:

The Auditors, Messrs Ishwar & Gopal, Chartered Accountants, Bangalore, registered with Institute of Chartered Accountants of India (ICAI) under the firm registration number 001154S, were appointed for period of 5 (five) years from the conclusion of the 21st Annual General Meeting till the conclusion of 26th Annual General Meeting of the Company.

Auditors Comment regarding emphasis matter of Auditors Report dated 30th May, 2018:

Emphasis of Matter

Without qualifying our report, we draw attention to the following matters in notes to the standalone Ind AS financial statements:-

Note 36.1 and 36.2 of the stand alone financial statements relating to capital advances amounting to Rs. 3,223.55 Lakhs and Note No 36.3 of the stand alone financial statements relating to trade receivables amounting to Rs. 2,394.28 Lakhs which are outstanding for substantial period raising question over the recoverability of these dues.

Board''s Response:

Regarding the Advance towards purchase of fixed assets and trade receivables, the management is hopeful of recovering the amount and hence no provision has been made.

17. 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 under take the Secretarial Audit of the Company. The Report of the Secretarial Auditor in the Form MR-3 is annexed to this Report as Annexure III.

Explanations by the Board on the comments of Secretarial Auditors:

Sl. No.	Qualifications made by Secretarial Auditor	Explanations by the Board
a	The RBI had not issued the approval letter for the FCGPRs filed by the Company. However, the Company had confirmed that there were some queries from RBI and the same were suitably addressed by the Company and this is being followed up with RBI.	The Company is continuously following with the RBI to obtain the approval letter for the FCGPRs filed by the Company. Further, Suitable reply has been submitted to RBI whenever there were queries.
b	There were some instances of non compliances of the provisions of Section 185 of the Companies Act, 2013 with regard to providing loan/advance facility to its Subsidiary.	The Company will ensure to comply with the same in future.
c	The ECB returns with regard to the FCCBs availed by the Company seem to have been filed with errors.	The Company will ensure to take corrective measures to rectify the error.
d	Certain returns under above mentioned general laws were not filed by the Company in time.	The Company will ensure to file the returns in time.

18. 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	Not Applicable
Total energy consumption and energy consumption per unit of production as per Form A	Not Applicable
B) Technology absorption:
Efforts in brief, made towards technology absorption, adaptation and innovation	Nil
Benefits derived as a result of the above efforts, e.g. product improvement, cost reduction, product development, import substitution, etc.	Not Applicable
In case of imported technology (imported during the last 5 years reckoned from the beginning of the financial year), following information may be furnished:	Nil
Technology imported	Not Applicable
Year of Import	Not Applicable
Has technology been fully absorbed	Not Applicable
If not fully absorbed, areas where this has not taken place, reasons therefore and future plan of action	Not Applicable
C) Research and Development (R&D)
Specific areas in which R & D carried out by the company	The Company has not carried out any research and development work during the course of the year.
Benefits derived as a result of the above R & D	Not Applicable
Future plan of action	Not Applicable
Expenditure on R & D a) Capital	Nil
b) Recurring	Nil
c) Total	Nil
(d) Total R & D expenditure as a percentage of total turnover	Not Applicable
D) Foreign exchange earnings and Outgo
Activities relating to exports	Not Applicable
Initiatives taken to increase exports	Not Applicable
Development of new export markets for products and services	Not Applicable
Export plans	Not Applicable
Total Exchange used (Cash basis)	As on 31st March, 2018: Rs.1,20,05,196.00
Total Foreign Exchange Earned (Accrual Basis)	As on 31st March, 2018: Rs. 2,29,58,473.00

19. RATIO OF REMUNERATION TO EACH DIRECTOR:

The Company had 123 employees as on 31st March, 2018. Pursuant to the provisions of 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 Rupees One Crore Two Lakhs Rupees per financial year or Rupees Eight Lakhs Fifty Thousand per month as the case may be. Therefore, a 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.

20. 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, 2018.

21. SIGNIFICANT AND 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. However, during the year under review, the Company has obtained necessary consent from the Karnataka State Pollution Control Board to start production for its E-Waste plant in Bangalore on 22nd May, 2017.

22. 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.

23. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS:

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.

24. RISK MANAGEMENT POLICY:

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

25. CORPORATE SOCIAL RESPONSIBILITY 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.

However, the net profit of the Company during the financial year 2017-18 is more than Rs. 5 Crores, CSR becomes applicable to the Company for the financial year 2018-19. The Company has taken necessary steps to constitute CSR Committee and formulate CSR Policy as per the provisions of the Companies Act, 2013.

26. INDUSTRIAL RELATIONS:

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

27. RELATED PARTY TRANSACTIONS:

There were Related Party Transactions during the financial year.

The particulars of contracts or arrangements with related parties referred to in Section 188(1) of the Companies Act 2013 in the prescribed format of Form AOC 2 has been enclosed with the report as ANNEXURE V.

28. FORMAL ANNUAL EVALUATION:

Pursuant to the provisions of the Companies Act, 2013 and the Listing Regulations, the Board has carried out an annual performance evaluation of its own performance and the Directors individually. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report.

29. LISTING WITH STOCK EXCHANGES:

The Company confirms that it has paid the Annual Listing Fees for the financial year 2018-19 to National Stock Exchange of India Limited (NSE) and BSE Limited where the Company''s Shares are listed.

30. CORPORATE GOVERNANCE AND SHAREHOLDERS INFORMATION:

A separate Report on Corporate Governance in terms of Regulation 34 of SEBI (listing Obligations and Disclosure Requirements) Regulations, 2015 along with a Certificate from a Practising Company Secretary regarding compliance to the Conditions stipulated under Chapter IV of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is attached to this report as Annexure VI.

31. MANAGEMENT DISCUSSION AND ANALYSIS:

The Management Discussion and Analysis Report is annexed herewith as Annexure VII.

32. 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 endeavours to create and provide an environment that is free from discrimination and harassment including sexual harassment.

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 behaviour. 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.

33. 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.

34. 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 : 13th August, 2018 Managing Director Whole Time Director

DIN:01247305 DIN:01247342

Address: Brindavan 90, Address:156-A, 36th Cross

3rd Cross, Sri Venkateshwara Krupa 2nd Block, Rajajinagar

Layout West of Chord Road, Bangalore-560 010

Bangalore-560 079

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Mar 31, 2017

To the Members,

The Directors have pleasure in presenting before you the 23^rd Annual Report of the Company together with the Audited Financial Statements for the year ended 31^st March, 2017.

CONSOLIDATED FINANCIAL SUMMARY/HIGHLIGHTS, OPERATIONS AND STATE OF AFFAIRS:

(Rs. in Lakhs)

Particulars	2016-17	2015-16
Gross Income	25197.46	24192.73
Profit Before Interest and Depreciation	1470.22	600.97
Finance Charges	146.53	252.66
Gross Profit	1323.69	348.31
Provision for Depreciation	17.01	51.46
Profit before exceptional and extraordinary items and tax	1306.68	296.85
Exceptional Items	0.00	100.22
Provision for Tax	94.80	33.22
Net Profit After Tax	1211.88	163.40
Minority Interest	86.92	-1.83
Balance of Profit brought forward	1124.96	165.23
Proposed Dividend on Equity Shares	0.00	0.00
Tax on proposed Dividend	0.00	0.00

1. PERFORMANCE OF THE COMPANY:

Your Company has been since many years implementing various IT based projects for many Startups, Government agencies and established companies. The Company studies the customers IT requirements, identify pain points and accordingly design and plan their IT Hardware and Software infrastructure which includes security, networking, servers, storage, endpoints, operating systems, application software and ensure successful implementation for optimal performance.

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 such as IBM, Dell EMC, HP, Cisco, Fujitsu, Intel, Brocade, Fortinet, Checkpoint, Extreme Networks, Lenovo, Canon, TVSE, Brother, Samsung, Lexmark, Xerox, Radware, Array Networks, VMware, RHEL, Microsoft etc to name a few. Cerebra can design, supply, implement and maintain IT infrastructure for SMEs as well as large enterprises successfully.

Your Company''s continued focus to on research labs, airports, defense, PSUs, PSBs, etc has been fruitful and lead the Company successfully executing large orders from Hindustan Aeronautics Limited, Bharat Electronics Limited, Satish Dhawan Space Centre, ISTRAC, Centre for Airborne Systems, Defense Avionics Research Establishment, Transport Department - Government of Karnataka, Karnataka Power Corporation, Directorate of Electronic Delivery of Citizen Services (EDCS) - Bangalore One and Karnataka One Centres, Electrical Inspectorate, Karnataka State Remote Sensing Application Centre, Bangalore Water Supply and Sewerage Board, etc., to name a few. The Company has also been successful in the higher education segment both in government as well as private institutions.

In addition, Cerebra has been adding new corporate customers in the retail, manufacturing and healthcare segments. Your Company also has been 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 and research lab segments while we stay focused on making a mark in other state and central government departments/bodies/PSUs and private enterprise companies.

Cerebra has recently completed execution of the prestigious project of augmentation of Bangalore One Centres, Karnataka One Centres and Electrical Inspectorate Offices across the state. Another prestigious project is the data centre set up at the Karnataka State Remote Sensing Application Centre. In addition, the ongoing project of Automated Driving Test System to fully automate the process of testing and issuance of driving license by the Department of Transport and Road Safety, Government of Karnataka has been implemented across 6 RTOs. Cerebra will run and maintain the same for a period of 5 (Five) years at six RTOs in Karnataka and the same will be extended to a further three RTOs.

With an added focus on services business such as AMC, FMS, Implementation and other value added services, your Company has successfully added many prestigious customers where the Company is providing FMS and AMC services both in the government as well as corporate segments. This has enabled Cerebra to also identify new business opportunities and make a fairly sizeable contribution to Cerebra''s revenues. With incremental focus and engagement in network security, backup and surveillance opportunities, the Company is looking to further strengthen the offerings.

ELECTRONIC MANUFACTURING SERVICES:

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. Your Company is already looking to expand by adding one or two SMT lines in the upcoming financial year which will automatically increase production.

E-WASTE NEW PLANT RELATED ASPECTS:

The Board is pleased to report the establishment of state of the Art facility for E-Waste recycling plant at the Narsapura, Kolar during the month of February 2017 in the 12 acres of land at Narsapura Industrial Area, Old Madras Road allotted by the Karnataka Govt. (KIADB) in the name of the Company and the machineries imported were installed. Required license has been obtained from the Karnataka State Pollution Control Board.

Your Company today has one of the most modern and best suited e-waste recycling plants in the country.

INDUSTRY STRUCTURE AND DEVELOPMENTS

Cerebra Middle East divides its business into two business units, ICT and Surveillance Security Solutions. Cerebra ME''s portfolio on ICT includes leader like Fujitsu, Net App, FalconStor, Perpetuity Actifia and Never fail. On Surveillance Security Solutions, Cerebra ME represents best in class vendors like Canon, Milestone, Fibrenetix, Rassilient, Promise and Solus.

The Middle-East electronic security market has been categorized into three segments - Video Surveillance (Analog Surveillance, IP Surveillance Systems and Software), Access Control (Card Reader, Biometric, and Others) and Intrusion Detection Systems. In the Middle-East electronic security market, video surveillance segment grew aggressively and expected to grow further over the next six years, where IP/ network video surveillance sub-segment contributed majorly. Growing construction market, rising IT infrastructure, increasing security spending coupled with growing security concerns have driven the electronic security systems market in Middle-East.

2. MATERIAL CHANGES AND COMMITMENTS:

There were no material changes and commitments which occurred, affecting the financial position of the Company between 31^st March, 2017 and the date on which this report has been signed.

However, the Company has executed Shareholders'' Agreement with Kuber Global Fund, a company incorporated according to the laws of Mauritius on 25^th May, 2017.

3. CHANGE IN THE NATURE OF BUSINESS:

The Company continues to focus on the strength of ESD, EMS and E-Waste and in addition, the Company will be focusing on the High End Servers, Large Data Storage etc.

4. DIVIDEND:

With the view to conserve the resources of the Company, the Directors have not recommended any dividend.

5. AMOUNTS TRANSFERRED TO RESERVES:

The Board has proposed not to carry any amount to its reserves.

6. CHANGES IN SHARE CAPITAL:

Authorized Share Capital

There were no changes in the Authorized Share Capital of the Company during the financial year 2016-17.

However, post completion of the financial year ended 31^st March, 2017, the Authorized Share Capital of the Company was increased from Rs. 110,20,00,000 (Rupees Hundred and Ten Crores Twenty Lakhs only) divided into 11,02,00,000 (Eleven Crores Two Lakhs) Equity Shares of Rs. 10/- (Rupees Ten only) each to Rs. 126,00,00,000 (Rupees One Hundred and Twenty Six Crores only) divided into 12,60,00,000 (Twelve Crores Sixty Lakhs) Equity Shares of Rs. 10/- (Rupee Ten only) each by additionally creating 1,58,00,000 (One Crores Fifty Eight Lakhs) Equity Shares of Rs. 10/- (Rupees Ten only) each in the Extra Ordinary General Meeting of the Company held on 28^th April, 2017.

Paid up Share Capital

During the financial year 2016-17, the Paid up Share Capital of the Company was increased from Rs. 96,40,77,220/- (Rupees Ninety Six Crores Forty Lakhs Seventy Seven Thousand Two Hundred and Twenty only) divided into 9,64,07,722 (Nine Crores Sixty Four Lakhs Seven Thousand Seven Hundred and Twenty Two) Equity Shares of Rs. 10/- (Rupees Ten only) to Rs. 1,08,48,64,820/- (Rupees Hundred and Eight Crores Forty Eight Lakhs Sixty Four Thousand Eight Hundred and Twenty only) divided into 10,85,06,782 (Ten Crores Eighty Five Lakhs Six Thousand Seven Hundred and Eighty Two) Equity Shares of Rs. 10/- (Rupees Ten only) pursuant to allotment of 1,20,78,760 Equity Shares of Rs. 10/- (Rupees Ten only) each at a premium of Re. 0.50 (Fifty Paisa only) upon the conversion of FCCBs on 23^rd November, 2016.

Further, post completion of the financial year ended 31^st March, 2017, the Paid up Share Capital of the Company was increased from Rs. 1,08,50,67,820/- (Rupees Hundred and Eight Crores Fifty Lakhs Sixty Seven Thousand Eight Hundred and Twenty only) divided into 10,85,06,782 (Ten Crores Eighty Five Lakhs Six Thousand Seven Hundred and Eighty Two) Equity Shares of Rs. 10/- (Rupees Ten only) to Rs. 120,40,67,820/- (Rupees One Hundred and Twenty Crores Forty Lakhs Sixty Seven Thousand Eight Hundred and Twenty only) divided into 12,04,06,782 (Twelve Crores Four Lakhs Six Thousand Seven Hundred and Eighty Two) Equity Shares of Rs. 10/- (Rupees Ten only) pursuant to allotment of 11900000 Equity Shares of Rs. 10/- (Rupees Ten only) in the Board Meeting held on 22^nd June, 2017.

Allotment of Warrants:

Moreover, post completion of the financial year ended 31^st March, 2017, pursuant to the Special Resolution passed by the Shareholders at the Extra Ordinary General Meeting of the Company held on 28^th April, 2017, the Company has allotted 5300000 Warrants convertible into Equity Shares at nominal value of Rs. 10/- (Rupees Ten only) each at a premium of Rs. 30/- (Rupees Thirty only) per Share to certain Promoters on certain terms and conditions agreed upon.

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 under 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 financial year 2016-17 was at Rs. 2400.37 Lakhs (Net of capital work-in-progress and capital advances) (2015-16 was Rs. 2817.34 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. During the year under review Six (6) Meetings were held on 30^th May 2016, 13^th August 2016, 3^rd November 2016, 23^rd November 2016, 23^rd January 2017 and 27^th March 2017.

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 financial year 2016-17 are given in the Corporate Governance Report.

9. DIRECTORS AND KEY MANANGERIAL PERSONNEL:

In terms of the provisions of the Companies Act, 2013 and the Articles of Association of the Company, Mr. V. Ranganathan (holding DIN: 01247305) Managing Director, retires by rotation at the forthcoming Annual General Meeting and is eligible for re-appointment.

Based on the recommendations of the Nomination and Remuneration Committee, re-appointments of Mr. V Ranganathan as Managing Director, Mr. Shridhar S Hegde and Mr. P Vishwamurthy as Whole Time Directors of the Company whose offices come to end on 31^st December, 2017 may be considered by the Shareholders at the ensuing Annual General Meeting.

10. DECLARATION FROM INDEPENDENT DIRECTORS ON ANNUAL BASIS:

The Company has received necessary declarations 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 31^st March, 2017 the Audit Committee of the Company consisted 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 and 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 of the Company actual http://www.cerebracomputers.com/governance.htm. The Composition, criteria 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 pursuant to the provisions of Sections 177(9) and (10) of the Companies Act, 2013 and as per Regulation 4(2)(d)(iv) of the SEBI (Listing Obligations and Disclosure Requirements), Regulations, 2015 which is available in website of the Company aturl http://www.cerebracomputers.com/governance.htm.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 its Subsidiary Companies to be provided during the year under review.

15. EXTRACT OF ANNUAL RETURN:

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

16. INFORMATION ABOUT THE FINANCIAL PERFORMANCE / FINANCIAL POSITION OF THE SUBSIDIARIES / ASSOCIATES/ JV:

The Company has following Subsidiaries:

a) Cerebra LPO India Limited

b) Cerebra Middle East FZCO, Dubai

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.

The Policy for determining material Subsidiaries as approved by the Board is uploaded on the Company''s website aturl http://www.cerebracomputers.com/governance.htm.

17. STATUTORY AUDITORS:

The Auditors, Messrs Ishwar & Gopal, Chartered Accountants, Bangalore, registered with Institute of Chartered Accountants of India (ICAI) under the firm registration number 001154S, were appointed for the period of 5 (five) years from the conclusion of the 21^st Annual General Meeting till the conclusion of 26^th Annual General Meeting and will be recommended to be ratified by the Shareholders in the ensuing Annual General Meeting.

Emphasis of matter and observation in the Audit Report

a. Without qualifying our report, we draw attention to note 27.11, 27.12 and 27.13 of the standalone financial statements relating to capital advances amounting to Rs. 37,24,80,412/- and trade receivables amounting to Rs. 19,45,44,167/

- which are outstanding for more than three years. This raises question regarding recoverability of these dues. The Management is confident of recovering the same either in cash or in kind and hence no provision is made in the accounts.

b. Regarding the advance of Rs. 8,88,61,943/- to subsidiaries are in violation of provisions of Section 185 of the Companies Act, 2013.

Board''s Response:

a. Regarding the Advance towards purchase of fixed assets and trade receivables the management is hopeful of recovering the amount and hence no provision has been made.

b. Cerebra LPO India Limited is a Subsidiary with 70% shareholdings and Cerebra Middle East FZCO Dubai UAE is Subsidiary with 90% Shareholding s. Only on need basis considering the circumstances and the urgent needs, the Company has lent monies to this Subsidiaries which will be refunded soon. Cerebra LPO India Limited does not have any banking facility nor does it have any other sources of funding. The Board felt it appropriate to support the Subsidiary on emergency basis.

18. 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 MR-3 is annexed to this Report as Annexure III.

Explanations by the Board on the comments of Secretarial Auditors:

Sl. No.	Qualifications made by Secretarial Auditor	Explanations by the Board
a.	The RBI had not issued the approval letter for the FCGPRs filed by the Company. However, the Company had confirmed that there were some queries from RBI and the same were suitably addressed by the Company and this is being followed up with RBI.	The Company is continuously following with the RBI to obtain the approval letter for the FCGPRs filed by the Company. Further, Suitable reply has been submitted to RBI whenever there were queries.
b.	There were some instances of non compliances of the provisions of Section 185 of the Companies Act, 2013 with regard to providing loan/advance facility to its Subsidiary.	The Company will ensure to comply with the same in future. In order to meet critical requirements by the Subsidiary, the Company had extended on adhoc basis working capital financial assistance.
c.	The ECB returns which were filed with regard to the FCCBs availed by the Company seems to be wrongly filed.	The Company will ensure to take corrective measures to rectify the error.

19. 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	Not Applicable
Total energy consumption and energy consumption per unit of production as per Form A	Not Applicable

(B) Technology absorption:

Efforts in brief, made towards technology absorption, adaptation and innovation	Nil
Benefits derived as a result of the above efforts, e.g. product improvement, cost reduction, product development, import substitution, etc.	Not Applicable
In case of imported technology (imported during the last 5 years reckoned from the beginning of the financial year), following information may be furnished:	Nil
Technology imported	Not Applicable
Year of Import	Not Applicable
Has technology been fully absorbed	Not Applicable
If not fully absorbed, areas where this has not taken place, reasons therefore and future plan of action	Not Applicable

(C) Research and Development (R&D)

Specific areas in which R & D carried out by the company	The Company has not carried out any research and development work during the course of the year.
Benefits derived as a result of the above R & D	Not Applicable
Future plan of action	Not Applicable
Expenditure on R & D (a) Capital	Nil
(b) Recurring	Nil
(c) Total	Nil
(d) otal R & D expenditure as a percentage	Nil
of total turnover

(D) Foreign exchange earnings and Outgo

Activities relating to exports	Not Applicable
Initiatives taken to increase exports	Not Applicable
Development of new export markets for products and services	Not Applicable
Export plans	Not Applicable
Total Exchange used (Cash basis)	As on 31st March, 2017: Rs. 2,08,56,490/-
Total Foreign Exchange Earned (Accrual Basis)	As on 31st March, 2017: Rs. NIL

20. RATIO OF REMUNERATION TO EACH DIRECTOR:

The Company had 64 employees as of 31st March, 2017. 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 One Crore Two Lakhs rupees per financial year or Eight Lakhs Fifty Thousand 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.

21. 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 31^st March, 2017.

22. SIGNIFICANT AND 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.

However, post completion of the financial year ended 31^st March, 2017, the Company has obtained necessary consent from the Karnataka State Pollution Control Board to start production for its E-Waste plant in Bangalore on 22^nd May, 2017.

23. 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.

24. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS:

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.

25. 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.

26. 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.

27. INDUSTRIAL RELATIONS:

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

28. RELATED PARTY TRANSACTIONS:

There were Related Party Transactions during the financial year.

The particulars of contracts or arrangements with related parties referred to in Section 188(1) of the Companies Act 2013 in the prescribed format of Form AOC 2 has been enclosed with the report as Annexure V.

29. FORMAL ANNUAL EVALUATION:

Pursuant to the provisions of the Companies Act, 2013 and the Listing Regulations, the Board has carried out an annual performance evaluation of its own performance and the Directors individually. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report.

30. LISTING WITH STOCK EXCHANGES:

The Company confirms that it has paid the Annual Listing Fees for the financial year 2017-18 to National Stock Exchange of India Limited (NSE) and BSE Limited where the Company''s Shares are listed.

31. CORPORATE GOVERNANCE AND SHAREHOLDERS INFORMATION:

A separate Report on Corporate Governance in terms of Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 along with a Certificate from a Practicing Company Secretary regarding compliance to the conditions stipulated under Chapter IV of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is attached to this report as Annexure VI.

32. MANAGEMENT DISCUSSION AND ANALYSIS:

The Management Discussion and Analysis Report is annexed herewith as Annexure VII.

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 endeavours 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 behaviour. 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 financial year.

34. 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

35. ACKNOWLEDGEMENTS:

The Directors wish 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

Managing Director Whole Time Director

Date : 22n June, 2017 DIN: 01247305 DIN : 01247342

---

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

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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

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Sep 30, 2010

The Directors have great pleasure to present their Sixteenth Annual Report together with the audited Balance Sheet and Profit and Loss Account for the year ended 30th September, 2010.

FINANCIAL RESULTS :

REVIEW OF OPERATIONS & GROWTH OPPORTUNITIES:

(Rs. in lakhs)

Particulars 2009-10 2008-09

Total Income 5972.67 5046.91

Total Expenditure 5818.14 4876.23

Operating Profits (PBIDT) 154.53 170.68

Interest 2.49 3.82

Depreciation 15.89 20.55

Profit Before Extra Ordinary Income 136.15 146.31

Provision for Tax - MAT 25.24 0

Profit after Current Tax but before Deferred Tax 110.91 146.31 Deferred Tax

Profit available for appropriations/ (Loss) 110.91 146.31

Despite the recessionary trends which continued globally, your Company was able to achieve better results. Although the Company had a slow start, momentum was picked up progressively. Signs of the domestic economy turning to optimistic position were visible on the horizon.

Your Company continued to focus on the hardware business which has been major revenue earner.

Efforts infused on ITeS have started yielding enthusiastic results. With your approval, the Company hived off ITeS business in to its subsidiary Company namely Cerebra LPO India Limited.

The Shareholders may recall that your Board had covered in the last Annual Report the proposal to set up Electronic Recycling Plant to address E-Waste Management. Immense efforts have been infused post last Annual General Meeting towards this direction and following are the key milestones:

a. The Company has signed up with Foreign Technical Consultants, Cimelia Resource Recovery Pte Ltd.,Singapore

b. Approvals of Shareholders were obtained for all the related requirements including preferential issues of Shares/Warrants to Foreign Technical Consultants and Plant and Machinery Vendors, Strategic Investors and Promoters.

c. Requisite approvals are being sought from the Foreign Investment Promotion Board (FIPB) of the Government of India, Stock Exchanges and other Regulatory Authorities to enable implementation of the aforesaid Project.

d. At the Global Investors Meet (GIM) sponsored by the Government of Karnataka, 10 acres of Industrial land to house E-Waste Recycling Project and 2 acres at the IT tech Park near the International Airport to establish ITeS business were allotted to your Company.

e. Fund raising to meet the CAPEX and OPEX programs is in the process of being tied up. Partial funds have already been raised.

f. Requisite Training Program on the E-Waste business has been initiated in Singapore for the Companys Personnel.

g. One mobile shredder and one fixed shredder are expected to arrive from Singapore to commercially commence the E-Waste related business prior to the actual implementation of the Project.

h. Formally, in the presence of esteemed members of the Press, Directors and Senior Executives of Technical Consultant from Singapore, many Investors, Wholetime Directors of your Company and certain other dignitaries, Mr.Paul Folmsbee, Consul General, American Consulate General, Mumbai, launched the E-Waste Recycling Project at Mumbai.

Your Company has enhanced its head count. With the approval of Shareholders through Postal Ballot, the ITeS division was vested in Cerebra LPO India Limited.

Your Directors report that the Company continues to be debt free.

SUBSIDIARY COMPANY- ITES DIVISION:

Cerebra LPO India Limited has achieved better results in Legal Process Outsourcing and Medical Transcription segments. The Company has added sustainable and profitable clients chiefly from the USA and the UK. Several marketing initiatives were implemented with strategic alliances with both the aforesaid countries. Growth on both the segments is expected to be robust and the Company has no hesitation in exploring inorganic growth opportunities. Statement pursuant to Section 212 of the Companies Act 1956, relating to companys interest in Subsidiary Company of Cerebra LPO India Ltd is given in Annexure I forming part of the Directors Report.

DIVIDEND:

Your Directors regret to inform you that no dividend is declared for the year-ended 30.9.2010 as the Company require its profits to be ploughed back in view of the expansion program and to meet working capital needs.

DIRECTORS:

Mr. Gururaja K. Upadhya and Mr. S. Gopalakrishnan, Directors, retire by rotation, in accordance with the Companies Act, 1956 and the 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 30" September, 2010.

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 have decided not to seek appointment. Based on the recommendation of the Audit Committee and in line with the provisions of the Companies Act, 1956, the Board recommends the appointment of Messrs Ishwar & Gopal, Chartered Accountants, Bangalore as Auditors to hold office up to the date of the next Annual General Meeting.

AUDITORS REPORT :

Regarding comments of ihe Auditors in their report dated 29.11.2010 the explanations 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 draw attention to the Notes to Accounts No. 8 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)fordematerialization 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 InsiderTrading.

ACCOUNTING STANDARDS:

The Company has followed the mandatory Accounting Standards for preparation of Financial Statements for the year ended September 30,2010.

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.

(A) CONSERVATION OF ENERGY :

Though the Company does not have energy intensive operations, it continues to adopt energy conservation measures. Energy conservation programs adopted by the Company are -

(i) Continuous monitoring of energy consumption.

(ii) spreading awareness among the employees on the need to conserve energy.

(iii) optimizing plant and machinery system performance to reduce cost.

Further, the Company is implementing the provisions of ISO 14001 : 2004, though it has not obtained the certification and has taken an organizational objective to optimize energy utilization.

(B) FOREIGN EXCHANGE EARNINGS AND OUTGO :

Foreign Exchange Earnings: Rs. 0.96 Lakh Foreign Exchange Outgo: Rs. 0.00 Lakh

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 30,2010 and of the "Profit/(Loss)" of the Company forthat year;

— The accounts for the year-ended 30.9.2010 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 and growth.

For and on behalf of the Board

Place: Bangalore V Ranganathan Shridhar S. Hegde

Date: 29.11.2010 Managing Director Wholetime Director

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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