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DIRECTOR'S REPORT

Ceinsys Tech Ltd.

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Market Cap. (₹) 91.16 Cr. P/BV 1.28 Book Value (₹) 63.83
52 Week High/Low (₹) 121/70 FV/ML 10/1 P/E(X) 26.49
Bookclosure 20/09/2019 EPS (₹) 3.10 Div Yield (%) 1.39
Year End :2018-03 

Dear Shareholders,

The Directors have pleasure in submitting their Twentieth (20th) Board’s Report on the business and operations of the Company for the financial year ended March 31, 2018. The Standalone & Consolidated performance of the Company has been referred wherever required.

Results of Company’s Operations and Performance (Rs. in Lakhs, except Per Share Data)

Standalone

Consolidated

Particulars

For the year ended March 31,

For the year ended March 31,

2018

2017

2018

2017

Revenue from Operations

13625.70

13613.04

14069.69

14394.76

Cost of Sales

7281.25

8118.07

7487.90

8370.57

Gross Profit

6344.45

5494.97

6581.79

6024.19

Operating expenses

General and administration expenses

4506.02

3832.76

4599.18

3915.90

Finance Cost

1451.74

1394.15

1510.92

1427.12

Total Operating expenses

5957.76

5226.91

6110.10

5343.02

Operating profit

386.69

268.06

471.69

681.17

Other income

231.71

192.32

264.45

182.13

Depreciation and Amortization

412.30

356.93

419.07

363.65

Profit Before non-controlling interest/

share in net loss of associate

206.10

103.45

317.07

499.65

Exceptional Items

(54.04)

-

193.47

120.17

Profit before tax

152.06

103.45

510.54

619.82

Tax expense

(11.14)

(89.42)

(58.05)

(62.37)

Profit after tax

140.92

14.03

452.49

557.45

Non-controlling interest

Profit for the year

140.92

14.03

452.49

557.45

Other comprehensive income/Expenses

Items not to be reclassified subsequently

to profit or loss

22.69

(4.81)

22.69

(4.81)

Items to be reclassified subsequently to

profit or loss

-

-

15.16

9.47

Total other comprehensive income, net of tax

22.69

(4.81)

37.85

4.66

Total comprehensive income for the year

163.61

9.22

490.34

562.11

Earnings per share (EPS)

Basic

1.35

0.14

4.32

5.57

Diluted

1.34

0.14

4.31

5.53

Note: During the financial year ended March 31, 2018 the Company has sold its entire stake in three subsidiaries (viz. AI Instruments Private Limited, ADCC Tech Limited and ADCC International East Africa Limited.), During the previous financial year ended March 31, 2017 the Company has sold its entire stake in its subsidiary (ADCC Academy Private Limited). The gain/loss of sale of subsidiaries have been disclosed under exceptional items

Financial Position

(Rs. in Lakhs, except Per Share Data)

Particulars

Standalone

Consolidated

For the year ended March 31,

For the year ended March 31,

2018

2017

2018

2017

Equity

Equity Share Capital

1109.04

913.82

1109.04

913.82

Other Equity

5498.61

3971.56

6078.67

4240.03

Total Equity

6607.65

4885.38

7187.71

5153.85

Non-Current Liabilities

826.36

987.55

826.35

987.55

Current Liabilities

14957.26

12258.46

15055.00

13289.98

Total Liabilities

15783.62

13246.01

15881.35

14277.53

Equity Liabilities

22391.27

18131.39

23069.06

19431.38

Property, Plant and Equipment

2555.85

2598.34

2558.67

2621.01

Intangible Assets

175.34

205.78

175.34

205.78

Other Non-Current Assets

993.59

924.39

1156.90

981.04

Current Assets

18666.49

14402.88

19178.15

15623.55

Total Assets

22391.27

18131.39

23069.06

19431.38

Notes:

1. The above figures are extracted from the audited standalone and consolidated financial statements as per Indian Accounting Standards (Ind AS).

2. These are company’s first financial statement prepared in accordance with IND AS.

3. IND AS permits a first time adopter to elect to continue with the carrying value for all its property, plant and equipment as recognized in the financial statements as at date of transition to IND AS, measured as per previous GAAP and use that as its deemed cost as at date of transition. This exemption can also be used for intangible assets covered by IND AS 38 Intangible Assets. Accordingly, the Company has elected to measure all of its property, plant and equipment and intangible assets at their previous GAAP carrying value.

1. Financial Performance Revenue - Standalone

On a standalone basis in fiscal 2018, our Revenue from operations has shown only a slight increase to Rs. 13,625.70 Lakhs from Rs. 13,613.04 Lakhs in the previous fiscal 2017 thereby registering a marginal growth of 0.1%. Certain service contracts in previous GAAP were recorded using the completed contract method, however the same are now recorded as per principles laid down under IND AS 18 i.e. percentage of completion method. Out of total revenue from operations, 84.53% came from Enterprise Geospatial and Engineering Services, 13.76% from Software products and 1.71% came from Power generation.

Revenue - Consolidated

On a consolidated basis in fiscal 2018, our Revenue from operations has declined to Rs. 14,069.69 Lakhs from Rs. 14,394.76 Lakhs in fiscal 2017, thereby registering a decrease of 2.26%. The decrease was due to diminution in the Geospatial business revenue from ADCC Infocom Pvt Ltd, our subsidiary company. Certain service contracts in previous GAAP were recorded using the completed contract method, however the same are now recorded as per principles laid down under IND AS 18 i.e. percentage of completion method. Out of total revenue from operations, 82.69% came from Enterprise Geospatial and Engineering Services, 15.65% from Software products and 1.66 % came from Power generation.

Profits - Standalone

The Profit before tax and exceptional items is Rs.206.10 Lakhs (1.48 % of revenue), as against Rs. 103.45 Lakhs (0.75 % of revenue) in previous year. Profit after exceptional items and tax is Rs. 140.92 Lakhs (1.02% of revenue) as against Rs.14.03 Lakhs (0.10 % of revenue) in previous year. The total comprehensive income for the fiscal 2018 amounts to Rs. 163.61 Lakhs(1.18% of revenue) as against Rs. 9.22 Lakhs (0.07% of revenue) in the Fiscal 2017. It can be observed that there is remarkable increase in profit ratio despite the nominal increase in the Revenue.

Profits - Consolidated

The Profit before tax and exceptional items is Rs. 317.07 Lakhs (2.21% of revenue), as against Rs. 499.65 Lakhs (3.43 % of revenue) in previous year. Profit after exceptional items and tax is Rs. 452.49 Lakhs (3.16% of revenue), as against Rs. 557.45 Lakhs (3.82% of revenue) in previous year. The total comprehensive income for the fiscal 2018 amounts to Rs. 490.34 Lakhs (3.42% of revenue) as against Rs. 562.11 Lakhs (3.86% of revenue) in the Fiscal 2017. Profit before tax and exceptional items decreased due to diminution in the Geospatial business revenue in subsidiary which use to provide higher margins.

EPS

Basic earnings per share increased to Rs.1.35/- for Fiscal 2018 as compared to previous Fiscal 2017 of Rs. 0.14/-. Diluted earnings per share increased to Rs.1.34/- for Fiscal 2018 as compared to previous Fiscal 2017 of Rs. 0.14/-.

Dividend

Your directors have recommended a final dividend of Rs.1.25 per share for Fiscal 2018 aggregating to Rs.1,38,63,050/- subject to approval of Shareholders at the ensuing Annual General Meeting ofthe Company to be held on 29th September , 2018.

The Payment of Dividend is Subjected to Approval of Shareholders at the ensuing Annual General Meeting.

Share Capital

Pursuant to the approval of shareholders through Postal Ballot on 4th August, 2017, the authorized share capital of the company increased from Rs 1000 Lakhs to Rs 2000 Lakhs in the Fiscal 2018 by creation of additional 100 Lakhs equity shares of Rs. 10/- each.

The Company has issued 38,395 shares under ADCC Employee stock option plan, 2014 on 29th March, 2018 to eligible employees. The Company has issued 9,13,825 bonus shares in the ratio of 1 bonus share for each 10 existing equity shares on 11th August, 2017 and accordingly adjusted Rs. 91. 38 Lakhs against Securities Premium Account. The Company has made preferential allotment of 10,00,000 Equity Shares at a premium of Rs. 160/per share having face value of Rs 10/- each at an issue price of Rs. 170/- per share on 15 November, 2017.

Transfer to Reserves

The Company has not transferred any amount to the general reserve account during the reporting period.

Capital Expenditure on tangible assets

In Fiscal 2018, on a standalone basis, we incurred capital expenditure of Rs 334.17 Lakhs as compared to previous Fiscal 2017 of Rs 289.37 Lakhs.

2. Extract of Annual Return

The details forming part of the extract of the Annual Return in form MGT 9 is annexed herewith as Annexure 5 to Board’s report as per section 92(3) of Companies Act, 2013.

3. Particulars of Loans, Guarantee and Investment

Loans, guarantees and investments covered under Section 186 of the Companies Act, 2013 forms part of the Notes to the standalone financial statements provided in this Annual Report.

4. Public Deposits

In terms of the provision of Chapter V of the Companies Act, 2013 read with the relevant rules, your Company has not accepted any Public deposit during the year under review.

5. Particulars of Contracts or Arrangements made with Related Parties

All contracts/ arrangements/transactions entered into by the Company during the financial year with the related party were in its ordinary course of business and on at arm’s length basis.

As per the provisions of regulation 23 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has formulated and adopted Policy on Related Party Transactions, details of the same are provided in Annexure 8 to the Board’s report.

There were no material significant related party transactions made by the Company which could have potential conflict with the interest of the Company at Large. Particulars of contract or arrangements with related parties referred to in Section 188 (1) of Companies Act, 2013, in the prescribed Form AOC-2, is appended as Annexure 2 to this Board’s report.

6. Material Events occurring after Balance Sheet date

The Board of Directors at their meeting held on May 28, 2018 and Shareholders through postal ballot & E-Voting approved the adoption of new set of Articles of Association of the Company; redesignation of Mr. Sagar Meghe from Whole Time Director with the Nomenclature of Chairman to Managing Director with the Nomenclature of Chairman and Managing Director of the company, Appointment of Dr. Hemant Thakare as Whole Time Director with the Nomenclature of Chief Operating Officer of the company, Appointment of CA Dinesh Kumar Singh as Whole Time Director with Nomenclature of Director-Finance and Chief Financial Officer ofthe company.

7. Board Policies

The details of the policies approved and adopted by the board are provided in Annexure 8 to the Board’s report.

8. Risk Management

Risk Management is an integral and important component of Corporate Governance. Your Company believes that a robust Risk Management system ensure adequate controls and monitoring mechanisms for a smooth and efficient running ofthe business.

A risk-aware organization is better equipped to maximize the shareholder value. In the light of above, your Company at its Board meeting held on February 13, 2018 formed an IT and Risk Management Committee. The Company’s Business Risk Management Framework helps in identifying risks and opportunities that may have a bearing on the organization’s objectives, assessing them in terms of likelihood and Magnitude of impact and determining a response strategy. The details pertaining to the composition, terms of reference, etc. of the IT and Risk Management Committee are given in the Report on Corporate Governance section forming part ofthis Annual Report.

9. Business Description

Ceinsys offers state-of-the-art Geospatial, Engineering & IT Solutions with a specific Business focus in Infrastructure, Government and Defence & Security segments. It brings together deep domain expertise, strong financials, skilled resource base and 20 years of experience in meeting a variety of customer needs in geospatial, engineering and IT services. Ceinsys offers value added services to companies requiring help in getting spatial information mapped and interpreted.

Ceinsys focuses on providing a high quality end-user experience, while streamlining the underlying workflows and improving efficiency. The present domain expertise includes GIS, Remote Sensing, Photogrammetry, Highway Engineering, Heritage Mapping, Electrical Solutions, Water and sewerage solutions, Engineering Design Services and enterprise level End to End Solutions using Web GIS. Our solutions have wide market segment addressability. Ceinsys also initiated and introduced LiDAR (Laser based technology) and Unmanned Aerial Surveys (UAS) for Highway asset Management (also called Road Asset Management System - RAMS). Ceinsys is very well positioned to address these large opportunities.

Strategy

In order to fulfil business objectives and to meet the demands of present and future, we have to have a proper roadmap in place. Your Company has developed a Strategic Management Plan which deals with challenges, opportunities, and new initiatives that would lead to growth for company and its Stakeholders. Your company conducts its strategic planning through a defined and structured mechanism and builds up an integrated platform in IT, Geospatial & Engineering Tech Solutions, which enables us to serve our clients to the best of requirements.

Last year we rebranded the corporate identity from ADCC to Ceinsys, your Company has taken a path of becoming a world class IT organization; to position itself as a holistic solution provider in Geospatial, Engineering and IT Space. By creating roadmap for next 5 years with respect to Market, Industry Trends along with Government spending in Infrastructure & Information Technology space it will scale up its capability in Infrastructure, Government and Defence & Security Solutioning.

Your company will signup Technology Partnerships for empowering itself in providing end to end solution offering as one stop shop and bring in the right talent to cater the business needs ofthe company.

Along with these mentioned initiatives, Ceinsys have also planned to audit, standardize, streamline & develop processes that would help Middle Management Team and in turn, the company, to holistically manage its organisation structure, processes, practices employees, customers & infrastructure in accordance with its business objectives. Ceinsys also look forward in implementing effective systems of Learning & Development, Employee Engagement & Performance Management System for its employees towards their contribution in the growth path.

10. Human Resource Development

Ceinsys Tech Limited considers its employees as most valuable resource and ensures strategic alignment of Human Resource practices to business priorities and objectives. The Company strives to provide a conducive and competitive work environment to help the employees excel and create new benchmarks of productivity, efficiency and customer delight.

The Human Resource agenda continues to support the business in achieving sustainable and responsible growth by building the right capabilities in the organisation. It continues to focus on progressive employee relations policies, creating an inclusive work culture and a strong talent pipeline.

The company is known for having the best people practices for developing future leaders. The ability to attract the best talent, provides a competitive edge to the organisation. A series of programmes like maternity and paternity support, Career by Choice and location flexibility have helped in driving the Inclusion and Diversity agenda. The company continues to focus on driving inclusion through building leadership capability and recognising line managers who provide a simple, flexible and respectful work environment for their teams.

The Human Resource function of the Company achieved many milestones by strengthening its base through Capability Development Initiatives, Gender Diversity and Digitisation etc. The company drives sustainable growth by leveraging employee-potential through capability development initiatives in line with market expectations and by reducing cost and complexity in rehiring new talent. The company is focussed on building a high-performance culture with a growth mind-set, where employees are engaged and empowered to be the best they can be. Developing and strengthening capabilities of all employees in the company has remained an on-going priority.

The Company comprises a strong team of professionals, who are result oriented, committed and loyal. As on March 31, 2018, the Company had 418 employees on its rolls. Please refer a separate Report on Human Resource Management given in Management Discussion Analysis which form part ofthis Annual Report.

11. Management Discussion and Analysis

In terms of the provisions of Regulation 34 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 the Management Discussion and Analysis Report is presented in a separate section forming part ofthis Annual Report.

12. Subsidiaries

As on 31, March 2018, The Company has no Associate Company, Operating Joint Venture and have only two Subsidiaries which are as follows:-

1. ADCC Infocom Private Limited;

2. ADCC Technology Zambia Limited

During the year, the Board of Directors (‘the Board’) reviewed the affairs of its subsidiaries. In accordance with Section 129(3) of the Companies Act, 2013, we have prepared consolidated financial statements of the Company and its subsidiaries, which form part of the Annual Report. Further, a statement containing the salient features of the financial statement of our subsidiaries in the prescribed format AOC-1 is appended as Annexure 1 to the Board’s report.

The statement also provides details of the performance and financial position of each of the subsidiaries. In accordance with Section 136 of the Companies Act, 2013, the audited financial statements, including the consolidated financial statements and related information of the Company and audited accounts of each of its subsidiaries will be available for inspection till the date of AGM during business hours at our registered office.

During the year, the company has sold the following companies:

1. A I Instruments Private Limited

2. ADCC International East Africa Limited

3. ADCC Tech Limited

13. Corporate Governance

Your Company strives to ensure that best corporate governance practices are identified, adopted and consistently followed. Your Company believes that good governance is the basis for sustainable growth of the business and for enhancement of stakeholder value. Your Directors reaffirm their continued commitment to good corporate governance practices. It is an ethically driven business process that is committed to values aimed at enhancing an organization’s brand and reputation. This is ensured by taking ethical business decisions and conducting business with a firm commitment to values, while meeting stakeholders’ expectations. A detailed report on Corporate Governance forms an integral part of Annual Report and is set out as separate section therein.

14. Audit reports and Auditors Audit reports

- The Auditors’ report for fiscal 2018 does not contain any qualification, reservation or adverse remark. The Auditor’s Report is enclosed with the financial statements in this Annual Report.

- CS Sushil Kawadkar is a Practising Company Secretary having FCS No: 5725 & CP No.: 5565

- The Secretarial Auditors’ Report for fiscal 2018 does not contain any qualification, reservation or adverse, but have some observation which forms part of report. The Board has replied on the observation and forms part of the same report. In terms of provisions of sub-section 1 of section 204 of the Companies Act, 2013, the Company has annexed to this Board’s report as Annexure-4, a Secretarial Audit Report given by the Secretarial Auditor.

- As required under SEBI (Listing obligation and disclosure requirement) regulation, 2015, the Practicing Company Secretary’s Certificate on Corporate Governance is appended as Annexure-10. The appended report does not contain any qualification, reservation or adverse remarks.

Auditors

- Statutory Auditors

M/s. Price Waterhouse Chartered Accountants LLP (FRN 012754N/N500016) (‘Price Waterhouse’) was appointed as Statutory Auditor of the Company on 26th September, 2017 for a period of One (1) year who shall hold office until the conclusion of the ensuing Annual General Meeting (‘AGM’), of the Company. The Company has received Special Notice under Section 140 (4) of the Companies Act, 2013 for appointment of Chaturvedi & Shah, Chartered Accountants in place of retiring Auditor.

On the receipt of the Special Notice under Section 140 (4) of the Companies Act, 2013, the Board under the guidance of the Audit Committee initiated the process of selection of Chaturvedi & Shah, Chartered Accountants and had detailed interactions with them and assessed them against a defined eligibility and evaluation criteria.

The Board, at its meeting held on 4th September, 2018 considered the recommendations of the Audit Committee with respect to the appointment of Chaturvedi & Shah, Chartered Accountants as the statutory auditor. Based on due consideration, the Board recommends for your approval the appointment of Chaturvedi & Shah, Chartered Accountants as the statutory auditor of the Company.

Accordingly resolution has been proposed for appointment of Chaturvedi & Shah, Chartered Accountants as Statutory Auditor of the Company in terms of Section 139, 140(4), 141, 142 and other applicable provisions, if any, of the Companies Act, 2013 and Rules thereunder for a period of Five (5) years.

- Secretarial Auditors

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. Sushil Kawadkar, Practicing Company Secretary to undertake the Secretarial Audit ofthe Company.

15. Reporting of Fraud by Auditors

During the year 2017-18, neither the statutory auditors nor the secretarial auditor has reported any instances of fraud committed against the Company by its officers or employees under section 143(12) ofthe Companies Act, 2013.

16. Segment Reporting

The Company’s operating segments are established on the basis of those components of the Company that are evaluated regularly by the Board in deciding how to allocate resources and in assessing performance. These have been identified taking into account nature of services, the differing risks and returns and the internal business reporting systems.

17. Board of Directors and its Meeting

The Company has a professional Board with right mix of knowledge, skills and expertise with an optimum combination of Executive, Non-Executive and Independent Directors including Woman Director. The Board provides strategic guidance and direction to the Company in achieving its business objectives and protecting the interest of the stakeholders. The Board met Eight (8) times during the financial year.

The maximum interval between any two meetings did not exceed 120 days, as prescribed under Companies Act, 2013.

The details pertaining to the composition, terms of reference, etc. of the Board of Directors of the Company and the meetings thereof held during the financial year are given in the Report on Corporate Governance section forming part ofthis Annual Report.

18. Directors’ Responsibility Statement

The financial statements are prepared in accordance with Indian Accounting Standards (Ind AS) under the historical cost convention on accrual basis except for certain financial instruments, which are measured at fair values, the provisions of the Act (to the extent notified) and guidelines issued by SEBI. Ind AS are prescribed under section 133 of Companies Act, 2013, read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 and Companies (Indian Accounting Standards) Amendment Rules, 2016. Effective April 1, 2017, the Company has adopted all the Ind AS standards and the adoption was carried out in accordance with the applicable transition guidance. Accounting policies have been consistently applied except where a newly issued accounting standard is initially adopted or the revision to an existing accounting standard requires a change in the Accounting policy hitherto in use.

Pursuant to Section 134(5) ofthe Companies Act, 2013, the board of directors, to the best of their knowledge and ability, confirm that:

I. In the preparation of the annual accounts, the applicable accounting standards have been followed and there are no Material departures;

II. They have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs ofthe Company at the end ofthe financial year and ofthe profit ofthe Company for that period;

III. They have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

IV.They have prepared the annual accounts on a going concern basis;

V. They have laid down internal financial controls to be followed by the Company and such internal financial controls are adequate and operating effectively;

VI. They have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively

Based on the framework of internal financial controls and compliance systems established and maintained by the Company, work performed by the internal, statutory and secretarial auditors and external consultants and the reviews performed by management and the relevant board committees, including the audit committee, the board is of the opinion that the Company’s internal financial controls were adequate and effective during the financial year 2017-18.

19. Internal Financial Controls with Reference to the Financial Statements

The Company has in place proper and adequate internal financial control systems commensurate with the nature of its business, size and complexity of its operations. Internal financial control systems comprising of policies and procedures are designed to ensure reliability of financial reporting, compliance with policies, procedure, Applicable laws and regulations and that all assets and resources are acquired economically, used efficiently and adequately protected.

The Internal Auditor monitors and evaluates the efficacy and adequacy of internal control system in the Company, its compliance with operating systems, accounting procedures and policies at all locations of the Company and its subsidiaries and reports the same on quarterly basis to Audit Committee.

20. Declaration of Independence by Independent Director

The Company has received necessary declaration from each independent director under Section 149(7) of the Companies Act, 2013 and that he/she meets with the criteria of independence, as prescribed under Section 149(6) of the Companies Act, 2013 and Regulation 16(b) and 25 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.

21. Board Evaluation

The provision of sec. 149(8) of Companies Act, 2013 states that a formal annual evaluation needs to be made by the Board of its own performance, its Chairman and that of individual directors. Further Schedule IV of the Companies Act, 2013 states that the performance evaluation of independent directors shall be done by the entire Board of Directors, excluding the director being evaluated.

Further the Independent Director has to review the assess of Quality, Quantity & Timeliness of flow of Information between the Company management and Board to Perform their Duties effectively. The Nomination and Remuneration Committee of the Company has laid down the criteria for performance evaluation of the Board, its Committees and individual directors including Independent Directors.

The evaluation of all the directors and the Board as a whole was conducted based on the criteria and framework adopted by the Board. The evaluation process has been explained in the Corporate Governance Report section in this Annual Report.

22. Familiarisation Programmes for Board Members

The Board members are provided with necessary documents / brochures, reports and internal policies to enable them to familiarise with the Company’s procedures and practices. Periodic presentations are made on business and performance updates of the Company, business strategy and risks involved and given to the Directors. The Directors are also updated with various regulations prevailing at the time and the new judicial pronouncements.

Presentations on the latest technology and software developed by the company are also organised for the Independent Directors to enable them to understand the operations ofthe Company.

23. Directors and Key Managerial Personnel

The following changes were made during the year:

- Mr. Sameer Meghe resigned as Vice-Chairman and Whole Time Director ofthe Company on May 31, 2017. The Board places on record its appreciation of the contribution made by Mr. Sameer Meghe as Vice-Chairman and Whole Time Director of the Company.

- Mr. Atul Dev Tayal was appointed as Managing Director with the Nomenclature of Vice Chairman and Sr. Managing Director effective from July 01, 2017.

- Mr. Dhruv Kaji was appointed as an Additional Director in the category of non-executive and Independent Director of the Board effective from July 14, 2017 and the shareholders at the 19th Annual General Meeting held on September 26, 2017 have regularize his appointment as non-executive and Independent Director effective from July 14, 2017 for a term of Five (5) years i.e. up to July 13, 2022.

- Mr. Satish Wate was appointed as an Additional Director in the category of non-executive and Independent Director of the Board effective from July 14, 2017 and shareholders at the 19th Annual General Meeting held on September 26, 2017 have regularize his appointment as non-executive and Independent Director effective from July 14, 2017 for a term of Five (5) years i.e. up to July 13, 2022.

- Ms. Renu Challu was appointed as an Additional Director in the category of non-executive and Independent Director of the Board effective from August 31, 2017 and shareholders at the 19th Annual General Meeting held on September 26, 2017 have regularize her appointment as non-executive and Independent Director effective from August 31, 2017 for a term of Five (5) years i.e. up to August 30, 2022.

- Mr. Chandrakant Tiwari resigned effective from August 31, 2017. The Board places on record its appreciation of the contribution made by Mr. Chandrakant Tiwari as Independent Director ofthe Company.

- Mr. George Jacob resigned effective from August 31, 2017. The Board places on record its appreciation of the contribution made by Mr. George Jacob as Independent Director of the Company.

- Mr. Jinesh Vora resigned from the post of Company Secretary effective from August 31, 2017.

- Mr. Saugata De was appointed as Company Secretary and Chief Compliance Officer effective from August 31, 2017.

- Mr. Kishore Dewani was appointed as an Additional Director in the category of non-executive and Independent Director of the Board by passing resolution by circulation effective from January 15, 2018 and who shall hold office till the ensuing 20th Annual General Meeting to be held on September 29, 2018. Pursuant to section 160 of the Companies Act, 2013, your Company has received separate notices proposing the appointment of Mr. Kishore Dewani as an Independent Director on the Board at the ensuing Annual General Meeting. Accordingly, the Board recommends his appointment as an Independent Director. The resolution confirming the above appointment forms part of the notice of Annual General Meeting. We seek your support in confirming the above appointment.

- Mr. Saugata De resigned effective from March 29, 2018. The Board places on record its appreciation of the contribution made by Mr. Saugata De as Company Secretary and Chief Compliance Officer ofthe Company.

- Mr. Jinesh Vora was appointed as Company Secretary cum Compliance Officer effective from March 29, 2018 consequent to resignation of Mr. Saugata De.

- Mr. Amit Somani resigned effective from March 29, 2018. The Board places on record its appreciation of the contribution made by Mr. Amit Somani as Managing Director of the Company.

- Mr. Atul Dev Tayal resigned effective from March 29, 2018. The Board places on record its appreciation of the contribution made by Mr. Atul Dev Tayal as Vice Chairman and Sr. Managing Director ofthe Company.

- In accordance with the provisions of the Companies Act, 2013 and the Articles of Association of the Company, Dr. Abhay Kimmatkar is liable to retire by rotation at the ensuing 20th Annual General Meeting (AGM). Dr. Abhay Kimmatkar has confirmed his eligibility and willingness to accept the office of Director of your Company, if confirmed by the Members at the ensuing AGM. In the opinion of Directors, the Company will continue to benefit Dr. Abhay Kimmatkar in his capacity as the Joint Managing Director of the Company. The Board recommends and seeks your support in confirming reappointment of from Dr. Abhay Kimmatkar. The profile and particulars of experience, attributes and skills that qualify from Dr. Abhay Kimmatkar for the Board membership is disclosed in the Notice ofthe Annual General Meeting.

24. Policy on Directors Appointment, Remuneration and other details

The Nomination and Remuneration Committee (‘NRC’) of Ceinsys Tech Limited (the ‘Company’), has adopted the policy and procedures with regard to identification and nomination of persons who are qualified to become directors and who may be appointed in senior management. This policy is framed in compliance with the applicable provisions of Regulation 19 read with Part D of the Schedule II of the SEBI (Listing Obligations and Disclosures Requirements) Regulations, 2015 (‘the Regulations’) and Section 178 and other applicable provisions of the Companies Act, 2013.

The Board has also approved a Policy relating to remuneration of Directors, members of Senior Management and Key Managerial Personnel other matters provided in Section 178(3) of the Companies Act, 2013 is available on Company’s website, at http://www.ceinsys.com/investors/Policies/Nomination-&Remuneration-Policy.pdf

Salient features of nomination & remuneration policy:

a. ensuring the level and composition of remuneration is reasonable and sufficient to attract, retain and motivate directors ofthe quality required to run the company successfully.

b. ensuring that the relationship of remuneration to performance is clear and meets appropriate performance benchmarks;

c. determining the Company’s policy on specific remuneration package for the Managing Director / Executive Director including pension rights.

d. ensuring that the remuneration to directors, key managerial personnel and senior management involves a balance between fixed and incentive pay reflecting short and long-term performance objectives appropriate to the working of the company and its goals.

e. deciding the salary, allowances, perquisites, bonuses, notice period, severance fees and increment of Executive Directors.

f. defining and implementing the Performance Linked Incentive Scheme (including ESOP of the Company) and evaluating the performance and determining the amount of incentive of the Executive Directors for the same.

g. deciding the amount of Commission payable to the Whole time Directors, if any

h. reviewing and suggesting revision of the total remuneration package of the Key Managerial Personnel and Executive Directors after keeping in view the performance of the Company, standards prevailing in the industry, statutory guidelines etc.

i. formulating and administering the Employee Stock Option Scheme.

j. promoting and developing a high performance workforce in line with the Company strategy.

25. Committees of the Board

The Board has six committees:

1. Audit Committee

2. Nomination and Remuneration Committee

3. Corporate Social Responsibility Committee

4. Stakeholders Relationship & Investor Grievances Committee

5. Information Technology and Risk Management Committee*

6. Management Committee

*IT and Risk Management Committee was constituted by the Board at their meeting held on February 13,2018.

Board is responsible for direction, control, conduct management and supervision of the company’s affairs. It has established effective corporate governance procedures and best practices in the company. Committees appointed by the Board focus on specific areas and take informed decisions within the framework of delegated authority, and make specific recommendations to the Board on matters in their areas or purview. All decisions and recommendations of the committees are placed before the Board for information or for approval.

The details of the powers, functions, composition and meetings of the Committees of the Board held during the year are given in the Report on Corporate Governance section forming part of this Annual Report.

26. Conservation of Energy, Technology Absorption, Foreign exchange earnings and outgo

The particulars as prescribed under Sub-section (3)(m) of Section 134 of the Companies Act, 2013, read with the Companies (Accounts) Rules, 2014, are mentioned as Annexure-9 to the Board’s report.

27. Employee Stock Option Plans

The Nomination and Remuneration Committee (NRC) of the Board of the Company, inter alia, administers and monitors the Employees’ Stock Option Scheme of the Company in accordance with the applicable provisions of SEBI Guidelines. Your Company has issued and implemented the Employees Stock Option Scheme (“Scheme”) named as ADCC ESOP 2014 in accordance with the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 (‘the SEBI Regulation’) as a measure to reward and motivate employees as also to attract and retain the talent to its employees. Details of the stock options granted under ADCC ESOP 2014 are annexed to this Report as Annexure-7.

During the year under review, the Company has allotted 38,395 shares pursuant to “ADCC Employee Stock Option Plan, 2014” on March 29, 2018. The issuance of shares pursuant to the said scheme has resulted in the increase in number of Equity shares issued by the Company which stands at 1,10,90,440 shares as on March 31, 2018.

28. Corporate Social Responsibility

The Company is committed to conduct its business in a socially responsible, ethical and environmental friendly manner and to continuously work towards improving quality of life of the communities in its operational areas. The Board of Directors at its meeting held on July 26, 2014 had constituted Corporate Social Responsibility (CSR) Committee in accordance with Section 135 of Companies Act, 2013 read with rules formulated therein. The CSR agenda is planned in consultation with the CSR committee members through a systematic independent need assessment we believe in positive relationships that are built with constructive engagement which enhances the economic, social and cultural well-being of individuals and regions connected to our activities. The Company had adopted a detailed policy on Corporate Social Responsibility and also discussed and identified the core areas in which the CSR activities was proposed to be carried out in the CSR Committee Meetings from time to time. The Corporate Social Responsibility Policy can be accessed on the Company’s website at the link: http://www.ceinsys.com/investors/Policies /CorporateSocial-Responsibility-Policy.pdf The brief outline of the Corporate Social Responsibility (CSR) Policy of the Company and the initiatives undertaken by the Company on CSR activities during the year are set out in Annexure-6 of this report in the format prescribed in the Companies (Corporate Social Responsibility Policy) Rules, 2014.

Salient features of Corporate social responsibility policy:

I. Identifying broad areas of intervention in which the company can undertake projects;

ii. to serve this policy as a guiding document in executing and monitoring CSR projects;

iii.undertaking broad criteria for implementation agencies;

iv. ensuring an increased commitment at all levels in the organization;

v. directly or indirectly taking up programs that benefit the communities in & around its work centres that leads to enhancing the quality of life & economic well - being ofthe local populace.

29. Secretarial Standards

The Company duly complies with all applicable secretarial standards.

30. Vigil Mechanism (Whistle Blower Policy)

In terms of the section 177(9) of companies act, 2013 and rules framed thereunder, your Company has established a ‘Whistle Blower Policy and Vigil Mechanism’ for directors and employees it provides a channel to the employees to report to the appropriate authorities concerns about unethical behavior, Actual or suspected, fraud or violation of the Company’s code of conduct policy and provides safeguards against victimization of employees who avail the mechanism and also provide for direct access to the Chairman of the Audit Committee in exceptional cases. Protected disclosures can be made by a whistle blower through an e-mail, or dedicated telephone line or a letter to the concerned authorities. The details of the vigil mechanism (whistle blower policy) are given in Annexure-8 ofthis board report.

31. Prevention of Insider Trading

The Securities and Exchange Board of India (SEBI) vide notification dated January 15, 2015 has put in place a new framework for prohibition of Insider Trading in Securities and to strengthen the legal framework thereof. These new regulations of the SEBI under the above notification have become effective from May 15, 2015. Accordingly, the Board has formulated Insider Trading Policy in accordance with Regulation 8 & 9 of Insider Trading Regulations, 2015 for regulating, monitoring and reporting of Trading of Shares by Insiders. The Code lays down guidelines, procedures to be followed and disclosures to be made while dealing with shares of the Company. The details of the Code of Conduct & Fair Disclosure for Prohibition of Insider Trading are given in Annexure-8 ofthis board report.

32. Legal, Governance and Brand Protection

Your Company continued to focus on the key areas and projects within the Legal, Compliance and Corporate Affairs functions. The Company has established a vigil mechanism for Directors and employees to report their genuine concerns.

33. Enhancing Shareholders Value

Your Company believes that its Members are among its most important stakeholders. Accordingly, your Company’s operations are committed to the pursuit of achieving high levels of operating performance and cost competitiveness, consolidating and building for growth, enhancing the productive asset and resource base and nurturing overall corporate reputation.

34. Listing on Stock Exchange

The Company’s Shares were listed on SME Platform of BSE Limited on October 22, 2014. In Fiscal 2018, the Company has migrated from the SME platform to the main board of BSE Limited in fiscal 2018.

35. Significant and Material Orders Passed by the Regulators or Courts or Tribunals Impacting the Going Concern Status of the Company

There are no orders passed by the Regulators or Courts or Tribunals which would impact the going concern status and the Company’ future operations.

36. Sexual Harassment of Women at Workplace:

The Company has zero tolerance towards sexual harassment at the workplace and has adopted a Policy on Prevention of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules thereunder. The details of the policy are given in Annexure-8 of this board report.

During the year, the Company has not received any complaints of sexual harassment.

37. Green Initiatives

Electronic copies of Annual Report 2017-2018 and the Notice of 20th Annual General Meeting are sent to all the members whose email addresses are registered with the company/depository participant. For members who have not registered their email address, physical copies are sent in the permitted form.

38. Acknowledgement

Your Directors place on record their appreciation to the Government of India, the Securities and Exchange Board of India, the Stock Exchanges and other regulatory authorities for their valuable guidance and support and wish to express our sincere appreciation for their continued co-operation and assistance. We look forward to their continued support in future. We wish to thank our bankers, investors, rating agencies, customers and all other business associates for their support and trust reposed in us.

Your Directors express their deep sense of appreciation for all the member of the Ceinsys family whose commitment, co-operation, active participation, dedicated efforts, consistent contribution and professionalism at all levels has made the organization’s growth possible.

Finally, the Directors thank you for your continued trust and support.

For and on behalf of the Board

Place : Nagpur Sagar Meghe

Date: 4th September 2018 (Chairman & Managing Director)

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