DIRECTORS' REPORT

To

The Members of M/s. CES LIMITED

(Formerly Known as Serve All Enterprise Solutions Limited)

The Directors have pleasure in presenting the 30th Annual Report of the Company together with the Audited Accounts for the year ended on 31st March 2015 (01.07.2014 to 31.03.2015).

BUSINESS PERFORMANCE OF THE COMPANY

To comply with the provisions 2(41) of Companies act 2013, during the current financial year our company has changed its financial year ending from 1st July 2014 to 31st March 2015. As the current financials of our company are prepared for 9 months, we can't compare financial results of current year with the previous year. Standalone: When we compare financial results (9 Months) of the current period with the previous period (9 Months) financial results, our revenue increased to Rs. 326.078 Million from Rs. 249.78 Million and our profit after tax (PAT) increased from Rs. 42.06 Million to Rs. 46.29 Million.

Consolidated: When we compare Consolidated financial results (9 Months) of the current period with the previous period (9 Months) Consolidated financial results, our revenue increased from Rs. 773.27 Million to Rs. 914.90 Million and our Consolidated profit after tax (PAT) increased from Rs. 37.986 Million to Rs. 54.242 Million.

DURING THE FINANCIAL YEAR 2014-15 (NINE MONTHS), SEVEN BOARD MEETINGS WERE HELD AS FOLLOWS:

16th July 2014 , 30th August 2014, 14th November 2014, 6th December 2014, 31 December 2014 , 13th February 2015 and 24th March 2015.

FINANCIALS OF SUBSIDIARY COMPANY

Pursuant section 129 sub section (3), the financials of subsidiary are as per Annexure -I

EXTRACT OF ANNUAL RETURN

Pursuant to section 134 sub section (3) (a), the extract of annual return enclosed in Annexure -II

DIRECTORS' RESPONSIBILITY STATEMENT

To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statements in terms of Section 134 of the Companies Act 2013:

(a) That in the preparation of the annual accounts/financial statements for the financial year ended 31st March 2015, the applicable accounting standards had been followed along with proper explanation relating to material departures, if any;

(b) That the accounting policies as mentioned in the financial statements were selected and applied consistently and reasonable and prudent judgments and estimates were made 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) That proper and sufficient care had been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act 2013 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

(d) That the annual accounts were prepared on a going concern basis;

(e) That proper internal financial controls were in place and that such internal financial controls are adequate and were operating effectively; and

f) That proper systems to ensure compliance with the provisions of all applicable laws were in place and that such systems were adequate and operating effectively.

AUDITORS

Statutory / Financial Audit

M/s P. Murali & Co Chartered Accountants (Regn No. 007257S) retire at the ensuing Annual General Meeting and are eligible for re-appointment. The Company has received confirmation that their appointment will be within the limits prescribed under Section 141 of the Companies Act, 2013

Secretarial Audit

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. Abhinav Shrivastava Company Secretaries in Practice (C.P No. 11461) to undertake the Secretarial Audit of the Company. The Report of the Secretarial Audit Report is annexed herewith as Annexure- III.

Internal Auditors

Pursuant to provisions of section of 138 of Companies Act 2013 and Companies (Accounts) Rules, 2014, Board of Directors appointed Ram Mohan & Associates. (Regn No.007700S) as Internal Auditors of the Company

THE MANAGEMENT DISCUSSION AND ANALYSIS REPORT

PROSPECTUS OUTLOOK

Introduction

India is the world's largest sourcing destination for the information technology (IT) industry, accounting for approximately 52 per cent of the US$ 124-130 billion market. The industry employs about 10 million Indians and continues to contribute significantly to the social and economic transformation in the country. The IT industry has not only transformed India's image on the global platform, but has also fueled economic growth by energizing the higher education sector especially in engineering and computer science. India's cost competitiveness in providing IT services continues to be its unique selling proposition (USP) in the global sourcing market. The Indian IT and ITeS industry is divided into four major segments - IT services, business process management (BPM), software products and engineering services, and hardware. The IT-BPM sector in India grew at a compound annual growth rate (CAGR) of 25 per cent over 2000-2013, which is 3-4 times higher than the global IT-BPM spend, and is estimated to expand at a CAGR of 9.5 per cent to US$ 300 billion by 2020.

Market Size

India, the fourth largest base for young businesses in the world and home to 3,000 tech start-ups, is set to increase its base to 11,500 tech start-ups by 2020, as per a report by Nasscom and Zinnov Management Consulting Pvt Ltd. India's internet economy is expected to touch Rs.10 trillion (US$ 161.26 billion) by 2018, accounting for 5 per cent of the country's gross domestic product (GDP), according to a report by the Boston Consulting Group (BCG) and Internet and Mobile Association of India (IAMAI). In December 2014, India's internet user base reached 300 million, the third largest in the world, while the number of social media users and smartphones grew to 100 million. Public cloud services revenue in India is expected to reach US$ 838 million in 2015, growing by 33 per cent year-on-year (y-o-y), as per a report by Gartner Inc. In yet another Gartner report, the public cloud market alone in the country was estimated to treble to US$ 1.9 billion by 2018 from US$ 638 million in 2014. The increased internet penetration and rise of e-commerce are the main reasons for continued growth of the data center co-location and hosting market in India.

Investments

Indian IT's core competencies and strengths have placed it on the international canvas, attracting investments from major countries. The computer software and hardware sector in India attracted cumulative foreign direct investment (FDI) inflows worth US$ 13,788.56 million between April 2000 and December 2014, according to data released by the Department of Industrial Policy and Promotion (DIPP). The private equity (PE) deals increased the number of mergers and acquisitions (M&A) especially in the e-commerce space in 2014. The IT space, including e-commerce, witnessed 240 deals worth US$ 3.8 billion in 2014, as per data from Dealogic. India also saw a ten-fold increase in the venture funding that went into internet companies in 2014 as compared to 2013. More than 800 internet start­ups got funding in 2014 as compared to 200 in 2012, said Rajan Anandan, Managing Director, Google India Pvt Ltd and Chairman, IAMA. Most large technology companies may have so far focused primarily on bigger enterprises, but a report from market research firm Zinnov highlighted that the small and medium businesses will present a lucrative opportunity worth US$ 11.6 billion in 2015 and US$ 25.8 billion in 2020. Moreover, India has nearly 51 million such businesses of which 12 million have a high degree of technology influence and are looking to adopt newer IT products, as per the report.

Government Initiatives

The adoption of key technologies across sectors spurred by the 'Digital India Initiative' could help boost India's gross domestic product (GDP) by US$ 550 billion to US$ 1 trillion by 2025, as per research firm McKinsey. Some of the major initiatives taken by the government to promote IT and ITeS sector in India are as follows:

• India and the United States (US) have agreed to jointly explore opportunities for collaboration on implementing India's ambitious Rs 1.13 trillion (US$ 18.22 billion) 'Digital India Initiative'. The two sides also agreed to hold the US-India Information and Communication Technology (ICT) Working Group in India later this year.

• India and Japan held a Joint Working Group conference for Comprehensive Cooperation Framework for ICT. India also offered Japan to manufacture ICT equipment in India.

• The Government of Telangana began construction of a technology incubator in Hyderabad—dubbed T-Hub—to reposition the city as a technology destination. The state government is initially investing Rs 35 crore (US$ 5.64 million) to set up a 60,000 sq ft space, labelled the largest start-up incubator in the county, at the campus of International Institute of Information Technology-Hyderabad (IIIT-H). Once completed, the project is proposed to be the world's biggest start-up incubator housing 1,000 start-ups.

• Bengaluru has received US$ 2.6 billion in venture capital (VC) investments in 2014, making it the fifth largest recipient globally during the year, an indication of the growing vibrancy of its startup ecosystem. Among countries, India received the third highest VC funding worth US$ 4.6 billion.

Road Ahead

Internet should be a basic human right, say 87 per cent of internet users in India, compared with 83 per cent globally, according to a report by Centre for International Governance Innovation (CIGI). India continues to be the topmost offshoring destination for IT companies followed by China and Malaysia in second and third position, respectively. Emerging technologies present an entire new gamut of opportunities for IT firms in India. Social, mobility, analytics and cloud (SMAC) collectively provide a US$ 1 trillion opportunity. Cloud represents the largest opportunity under SMAC, increasing at a CAGR of approximately 30 per cent to around US$ 650-700 billion by 2020. Social media is the second most lucrative segment for IT firms, offering a US$ 250 billion market opportunity by 2020. The US$ 12 billion plus rising Indian e-commerce business market is witnessing a rush of hiring and may need 100,000 people over the next six months, as per industry experts. The industry offers a slew of opportunities and scope for innovation thereby attracting the young mind to push their limits.

CHANGES & DEVELOPMENTS DURING THE YEAR AND THEREAFTER:

Opening of the Branch office in USA:

The Company is pleased to announce that a branch office was incorporated under the name "CES Limited LLC" in Detroit, USA to spread its business. This branch is going to increase the customer base of the Company and make the marketing, distribution and delivery of its products and easier and more effective. This branch of the Company will bring its product closer to the customers by increasing their accessibility to it.

STATUS OF WARRANTS ALLOTTED

Pursuant to the sanctioned Scheme of Arrangement, between CES Private Limited (Transferor Company) and CES Limited (Formerly known as Serve All Enterprise Solutions Ltd) (Transferee Company), the Company issued & allotted 87,00,000 warrants to be converted into fully paid equity shares of Rs 10/- each with in a period of 18  months from the date of allotment i.e. 4th March 2013, to the shareholders of CES Private Limited and the Company has not received any request for the conversion of these warrants to equity shares within the previously  mentioned period, hence the warrants lapsed on 4th September 2014. This was intimated to the Stock Exchanges where the equity shares of the Company were listed.

START UP OF ACTIVITIES AT RAMKY SELENIUM GACHIBOWLI, HYDERABAD:

The Company is pleased announce that it has purchased a property of 24,550 Square Feet at 7th Floor, Ramky Selenium, Nanakramguda, Gachibowli, Hyderabad - 08 from Shriram Ventures Limited, Chennai. This property is located in the Financial District, Hyderabad, which is the new landmark for the back-office operations of banking, insurance and financial institutions.

The Company has spent Rs.30 million for interiors and ample infrastructure to make it as ultra-modern Service Delivery Centre (SDC) and this is expected to be operational by first week of September, 2015.

STATEMENT OF DECLARATION BY INDEPENDENT DIRECTORS -149(6)

The Company has received Certificate of Independence from Independent Director, inter-alia, pursuant to Section 149 of the Companies Act, 2013, confirming and certifying that they have complied with all the requirements of being an Independent Director of the Company.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENT (SECTION 186)

During the financial year no such instance.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES (188(1))

All the contracts/ arrangements/ transactions that were entered into by the Company during the financial year with related parties were on an arm's length basis and in the ordinary course of business. During the year, the Company had entered into any contract/ arrangement with related parties i.e , with it whole own U S A Subsidiary i.e CES USA Inc. which could be considered material in accordance with the policy of the Company on materiality of related party transaction. All Related Party Transactions are approved by the Board and Shareholders of the Company.

PUBLIC DEPOSITS

During the Financial year 2014-15, Company has not accepted any Public deposits.

SUBSIDIARIES (2014-2015):

The Company has two Subsidiaries, which are as follows:

CES USA Inc. (USA based 100% wholly own subsidiary Company).

CES Information Technologies Private Limited (70 % Stake held by the Company)

HUMAN RESOURCES & INDUSTRIAL RELATIONS

At CES, human capital has always been the most valuable asset of the Company. Our employees represent the backbone of the corporate success. The Company provides its employees a transparent and level playing work environment that fosters the culture of collaborative working, meritocracy and on-the-job career progression.

Employment Practices

The Company believes in fair employment practices and is committed to provide an environment that ensures that every employee is treated with dignity and respect and afforded equitable treatment. The Company has zero tolerance for sexual harassment at its workplaces and has adopted a Policy on Prevention, Prohibition and Redressal of Sexual Harassment at the Workplace, in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules there under. The Company has not received, during the year, any concerns including sexual harassment complaints.

INTERNAL CONTROL SYSTEMS & THEIR ADEQUACY

The Company has in place adequate systems of internal control commensurate with its size and the nature of its operations. These have been designed to provide reasonable assurance with regard to recording and providing reliable financial and operational information, complying with applicable statutes, safeguarding assets from unauthorized use or losses and ensuring compliance of corporate policies. Also, the Company reviews, from time-to- time, the adequacy of internal control checks in the system and covers all significant areas of the Company's operations such as software delivery, accounting and finance, procurement, employee engagement and IT processes in the Company.

The Company is pleased to announce that it has successfully achieved the Industry level best practices compliance certifications like

ISO 9001: 2008 for Quality Management Systems

ISO 27001 for Information Security and Data Privacy Systems

SOC -Type - 1 (Statement of Controls)

The Company has also kicked off the achievement process for the other prestigious certifications like CMMi -SVC andSOC -Type -II (Statement of Controls), to maintain the higher Quality and IT Security standards of the industry.

DIRECTORS

During the Financial year, the Board of Directors appointed Mrs. Aruna Krishna Sabbineni (06997005) and Mr. Murali Krishna Tummala (01889806) as additional Directors of the Company and are proposed to be appointed as Director liable to retire by rotation.

Board & Directors' Evaluation

Pursuant to the provisions of the Companies Act 2013 and Clause 49 of the Listing Agreement, the Board, its Committees and the Directors have carried out annual evaluation / annual performance evaluation, covering various aspects of the Board's functioning such as adequacy of the composition of the Board and its Committees, Board culture, execution and performance of specific duties, obligations and governance. The performance evaluation of the Independent Directors was carried out by the entire Board. The performance evaluation of the Non-Independent Directors was carried out by the Independent Director who also reviewed the flow of information between the Company's Management and the Board in terms of quality, quantity and timeliness. The Directors expressed their satisfaction with the evaluation process.

Directors' Appointment and Remuneration Policy

The Nomination and Remuneration Committee is responsible for developing competency requirements for the Board based on the industry and strategy of the Company and formulates the criteria for determining qualifications, positive attributes and independence of Directors in terms of provisions of Section 178 (3) of the Act and Clause 49 of the Listing Agreement. The Board on the recommendations of the Nomination & Remuneration Committee framed a policy for remuneration of the Directors. The objective of the Company's remuneration policy is to attract, motivate and retain qualified and expert individuals that the company needs in order to achieve its strategic and operational objectives, whilst acknowledging the societal context around remuneration and recognizing the interests of Company's stakeholders.

INFORMATION REQUIRED UNDER SECTION 197 OF THE COMPANIES ACT, 2013 READ WITH RULE 5(1) OF THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014

(i) The Ratio of the remuneration of each Director to the median remuneration of the employees of the Company for the financial year 2014-15.

Mr. Mohan Rao Kancharla was appointed as Whole Time Director on 14th November 2014 and remuneration paid to Director has been since February 2015, accordingly median cannot be calculated.

(ii) The percentage increase in remuneration of each Director, Managing Director & Chief Executive Officer, Chief Financial Officer and Company Secretary of the Company in the financial year 2014-15.

The Whole-Time Director, Chief Financial Officer and Company Secretary was appointed as Key Managerial Personnel on 14th November 2014 and accordingly during the financial year there were no review for them.

(iii) The percentage increase in the median remuneration of employees in the financial year 2014-15 : 11.95%

(iv) The number of permanent employees on the rolls of Company

The Permanent employees on rolls of the Company were 564 as on 31st March 2015.

(v) The explanation on the relationship between average increase in remuneration and Company performance.

On an average, employees received an annual increase of 11.16% in the current financial year. The individual increments varied based on individual performance.

(vi) Comparison of the remuneration of the Key Managerial Personnel against the performance of the Company.

The Company Appointed Key Managerial Personnel on 14th November 2014 and the Company has Nine Months Financial Year. The Four and half months is too short to Calculate Performance of Company to Performance Key managerial Personnel performance.

(vii) Variations in the market capitalization of the Company, price earnings ratio as at the closing date of the current financial year and previous financial year and percentage increase or decrease in the market quotations of the shares of the Company in comparison to the rate at which the Company came out with the last public offer

There is no Variation in the Market Capitalization of Company, however the price earnings ratio of the Company for FY 2014-15 is Re. 0.23 compared to Re.0.18 for FY 2013-14.

(viii) Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration

The average annual increase in the salaries of employees was around 11.16%. During the current financial year there is no review for managerial personnel, as the appointments were made on 14th November 2014.

(ix) The comparison of the each remuneration of Key Managerial Personnel against the performance of the Company during the Financial Year 2014-15 is as under:

The Company Appointed Key Managerial Personnel on 14th November 2014 and the Company has Nine Months Financial Year. The Four and half Months is too short to Calculate Performance of Company to Performance Key managerial personnel performance.

(x) The key parameters for any variable component of remuneration availed by the Directors.

The Key parameters for remuneration policy is as decided by Nomination & Remuneration Committee and also approved by the Board of Directors

(xi) The ratio of the remuneration of the highest paid Director to that of the employees who are not Directors but receive remuneration in excess of the highest paid Director during the year.

There are 98 employees as on 31st March, 2015 who are receiving higher salary than Director; the ratio is 1: 99

(xii) Affirmation that the remuneration is as per the Remuneration Policy of the Company Pursuant to Rule 5(1)(xii) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, it is affirmed that the remuneration paid to the Directors, KMPs, Senior Management and other employees of the Company is as per the Remuneration Policy of the Company.

INFORMATION ON STOCK EXCHANGES

The Equity shares of the Company are listed on BSE Limited and the Ahmedabad Stock Exchange of India Limited and the Listing Fees have been paid to them up-to-date.