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.
(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
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
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
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.
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
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
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.
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.
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
Your Company has neither accepted nor renewed any Fixed Deposits during
the year ended 30th September, 2013.
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.
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.
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.
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.
The Company has followed the mandatory Accounting Standards for
preparation of Financial Statements for the year ended 30th September,
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.
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
- 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
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.
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