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Birlasoft

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Directors Report Year End : Mar '18    Mar 17

BOARD''S REPORT

Dear Members,

The Directors are pleased to present the Twenty Seventh Annual Report together with the Audited Accounts of the Company for the Financial Year ended March 31, 2018.

Performance of the Company

(In million)

Particulars

Standalone

2017-18

Consolidated

2017-18

USD

USD

Revenue from operations

223.36

14,423.53

567.64

36,655.82

Profit before Tax (PBT)

31.07

2,006.62

50.19

3,241.21

Profit after Tax (PAT)

27.49

1,775.50

39.39

2,543.67

Result of Operations

During the year under review, the total revenues from operations (consolidated) increased to Rs, 36,655.82 million, a growth of over 10.30% of the previous year. Earnings before interest, tax, depreciation and amortization was Rs, 3,738.11 million on consolidated basis. Net profit after tax (consolidated) increased by 6.63% to Rs, 2,543.67 million.

In US Dollar terms, revenues from operations for the year on consolidated basis was Rs, 567.64 million as against Rs, 494.39 million during the previous year, a growth of 14.82%. Average realization rate was Rs, 64.58 per US Dollar.

Standalone sales for the financial year 2017-18 grew by 9.08% to reach Rs, 14,423.53 million. Net profit after tax increased to 4.88% to Rs, 1,775.50 million.

Dividend

The Directors are pleased to recommend a final dividend of Rs, 2.40/-per equity share of face value of Rs, 2/- each (120%) on the paid-up equity share capital of the Company for the year under review. The total pay-out will amount to Rs, 571.43 million including dividend distribution tax.

Share Capital

The issued, subscribed and paid-up capital of the Company as on March 31, 2018 is Rs, 394.99 million, consisting of 197,498,742 equity shares of Rs, 2/- each.

CRISIL Ratings

For the bank loan limits of Rs, 4,445.5 million, CRISIL has assigned the long term credit rating of AA-.

Quality and Information Security

Quality, Productivity and Innovation have been the three pillars that have driven our passion for continuous improvement in the way we determine and improve our process framework. This commitment to quality is ratified by our consistent endeavor in certifying ourselves to the best standards in the industry. In the past year, KPIT has been successfully certified on the Quality Management System on ISO 9001:2015.

We continue to improve our Quality focus through internal initiatives and by certifying against international standards. In accordance with this, we underwent an extensive CMMI-DEV® V1.3 (Development) appraisal which resulted in us being appraised at Maturity level 5 by the CMMI Institute. We also continue to maintain our certifications for Information Security Management (ISO 27001:2013) and for Business Continuity Management (ISO 22301:2012).

Productivity

Our productivity journey continues to be strengthened by the 600 assets created in reusable repository by our practice teams. To further strengthen our competitive advantage in the AMS space, we have developed the Robotic Process Automation (RPA) Center of Excellence. Our experts have enabled some of our major customers to reap the benefits of RPA.

The bandwidth created by our productivity improvement initiatives is re-invested in learning and innovation through our crowdsourcing platform - my Time. On this platform, the employees get to select their areas of learning and innovation and accordingly complete a proof of concept. The framework enables them to collaborate with technocrats from across the organization and encourages growth and active exchange of knowledge.

Active learning and collaboration are a crucial part of the culture at KPIT. The Productivity Forum is a bi-annual platform for our project teams to share their innovations, best practices and learnings. The practice teams also share the latest tools, automations and industry best practices.

Institutional Shareholding

As on March 31, 2018, the total Institutional shareholding in the Company was 54% of the total share capital.

Merger Update

During the year under review, the Board of Directors of the Company approved a draft composite scheme for a) amalgamation of Birlasoft (India) Limited with the Company &

b) Demerger of the engineering business into KPIT Engineering Limited, a wholly owned subsidiary of the Company. The Company has received approval for the proposed merger from Competition Commission of India (CCI) and has filed the scheme with the Stock Exchanges and Securities & Exchange Board of India (SEBI) for their approval. Consequent to approvals from SEBI, an application will be filed with the National Company Law Tribunal (NCLT) for seeking further directions.

Information about the Subsidiary Companies

As on March 31, 2018, the Company had 17 subsidiaries, including step-down subsidiaries.

In accordance with Section 129(3) of the Companies Act, 2013, (hereinafter referred to as the Act) the Company has prepared consolidated financial statements of the Company and all its subsidiary companies, which forms a part of the Annual Report. A statement containing salient features of the financial statements of the subsidiary companies in Form AOC-1 is annexed to this Report as Annexure 1.

In accordance with Section 136(1) of the Act, the Annual Report of the Company, containing the standalone and the consolidated financial statements and all other documents required to be attached thereto have been placed on the website of the Company, www.kpit.com. Further, a report on the highlights of performance of subsidiaries and their contribution to the overall performance of the Company has also been placed on the website of the Company. Members interested in obtaining a printed copy of the audited annual accounts of the subsidiary companies may write to the Company Secretary at the Company''s registered office.

Directors

During the year, Mr. Anant Talaulicar, Mr. Nickhil Jakatdar & Ms. Alka Bharucha, were appointed as Additional & Independent Directors of the Company for a period of 5 years w.e.f October 21, 2017, January 24, 2018 & May 23, 2018 respectively, subject to shareholders approval. Dr. Klaus Blickle & Mr. Anjan Lahiri were appointed as Additional Directors w.e.f January 24, 2018 & May 23, 2018 respectively.

Owing to his other business commitments and preoccupations, Mr. Sanjay Kukreja resigned from the directorship of the Company w.e.f. September 15, 2017. Dr. R.A. Mashelkar ceased to be a Director of the Company w.e.f. August 24, 2017. The Board places on record its appreciation and valuable services provided by them during their tenure.

In accordance with Section 152 of the Act, Mr. Kishor Patil retires by rotation at the forthcoming Annual General Meeting and being eligible, offers himself for re-appointment. The Board recommends his re-appointment.

Key Managerial Personnel

The following persons have been designated as Key Managerial Personnel of the Company pursuant to Sections 2(51) and 203 of the Act, read with the Rules framed there under:

1. Mr. Kishor Patil - Chief Executive Officer (CEO) and Managing Director;

2. Mr. Anil Patwardhan - Chief Financial Officer (CFO) till May

23, 2018;

3. Ms. Sneha Padve - Company Secretary.

Mr. Vinit Teredesai has been appointed as the Chief Financial Officer of the Company w.e.f. May 24, 2018.

Auditors

Pursuant to the provisions of Section 139(1) of the Act, read with the Companies (Audit and Auditors) Rules, 2014, M/s. B S R & Co. LLP, Chartered Accountants, were appointed as the Statutory Auditors of the Company in the Annual General Meeting held on July 25, 2014 for a period of five years.

The Notes on financial statements referred to in the Auditors'' Report are self-explanatory and do not call for any further comments. The report does not contain any qualification, reservation or adverse remark.

The Board of Directors of the Company appointed Dr. K. R. Chandratre, Practicing Company Secretary, as the Secretarial Auditor to conduct audit for the year under review. The Secretarial Auditor''s report for the year under review is annexed to this Report as Annexure 2. The report does not contain any qualification, reservation or adverse remark.

Corporate Governance

A separate section on Corporate Governance with a detailed compliance report thereon forms a part of this Report. The Auditors'' Certificate in respect of compliance with the provisions concerning Corporate Governance, forms a part of this Annual Report, as required under the Securities and Exchange Board of India (Listing Obligations and Disclosure

Requirements) Regulations, 2015 (hereinafter referred to as the SEBI (LODR) Regulations, 2015).

Management Discussion and Analysis

A detailed review of the operations, performance and future outlook of the Company and its business is given in the Management Discussion and Analysis Report, which forms a part of this Report.

Awards & Recognition

- KPIT wins multiple accolades at Dassault Systemes''® 2018 Value Solutions Sales Convention

- KPIT recognized with the Most Influential Marketing Leaders Award for the third consecutive year

- KPIT recognized at The CSR Journal Excellence Awards 2017

- KPIT wins Best Event-led Communication Campaign Award at the Indian Communications Summit 2017

- KPIT Woman Leader acknowledged as Science and Technology Leader of the Year 2017

- KPIT receives Special Recognition by UITP India

- KPIT wins Smart Cities India Award 2017

- KPIT wins ERP Cloud Partner of the Year Award for service excellence in India

- KPIT awarded ''Outstanding Green Vehicle Integrated Solution Provider of the Year'' at 8th Green Vehicle Convention event, Beijing, China

Particulars of Employees

A statement containing the names of every employee employed throughout the financial year and in receipt of remuneration of Rs, 1 crore 2 lakhs or more, or employed for part of the year and in receipt of Rs, 8.5 lakh or more a month, and other employees as required under Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is annexed to this Report as Annexure 3(a).

The ratio of the remuneration of each director to the median employee''s remuneration and other details prescribed in Section 197(12) of the Act, read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are annexed to this Report as Annexure 3(b).

Employees Stock Option Plan (ESOPs)

Information relating to ESOPs of the Company is annexed to this Report as Annexure 4. The information is being provided in compliance with Regulation 14 of the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014.

Disclosure under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

The Company has a policy on prevention of sexual harassment and has put in place a redressal mechanism for resolving complaints received with respect to sexual harassment and discriminatory employment practices for all genders. There was no case on sexual harassment registered for the last year. As a part of our orientation programs for all new joinees, we mandate that they complete an e-learning module on the same as well.

Fixed Deposits

The Company has not accepted any deposits as on March 31, 2018.

Information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134(3)(m) of the Act, read with Rule 8 of the Companies (Accounts) Rules, 2014

Conservation of Energy

KPIT always undertakes various activities to reduce energy consumption and achieve conservation of resources. Many initiatives taken in this connection have been detailed in the previous Board''s Reports which the Company continues to implement. Apart from those initiatives, the following PAN India measures were undertaken to reduce energy consumption resulting in Pune (30%), Bangalore (15%) and Mumbai (19%) saving over the period of 6 years. Few initiatives undertaken in FY17-18 are:

- Replaced 1000 CFL (56/72W) with energy efficient LED lights (18/20W) (resulting into savings of 1.5 lakh units per year).

Features of energy efficient Phase-3 campus:

- Sun path analysis done to design building North cladded with Glass and South mix of wall and Glass and cladded with fins to avoid direct sun rays

- The glazing along the south and west is in a form of Double Glazing with reflective glasses and aluminum fins. This reduces the heat load on the building

- A VRF with latest digital scroll energy efficient HVAC system installed

- Use of natural light by designing optimum building width

- Lighting load reduced substantially by using task lighting and using energy efficient LED lights

- UPS installed with latest energy efficient Modular technology with 98% efficiency

- Energy efficient equipment installed e.g. MRL lifts, Hydro Pneumatic pumping etc.

- Terrace kept vacant to adopt Solar (150 KVA)

Green Initiatives

The following initiatives were undertaken at the Company level to create awareness about importance of environmental protection and reducing pollution:

- At Maan village, Hinjawadi, in association with Hinjawadi Companies Association, KPIT planted 160 saplings.

- Water Conservation through Mass Volunteering supported 8 villages this year, benefitting 1,895 people with 1.5 million litres of water

- Covered 1 village under Government of Maharashtra''s Jalyukta Shivar Abhiyan

- Through Zero Garbage Initiative 570 Chronic Black Spots have been eliminated

- Environment Week Celebration: The Environment Week on the World Environment Day is been celebrated for the past seven years since 2010

- Conservation of Private Forests in Koyna - Chandoli corridor by planting 5,000 saplings

- Aerial Reforestation in Bengaluru by 15,000 seed-ball bombings

Occupational Health and Safety Assessment Series (OHSAS)

The following activities were carried out by the Company under

OHSAS in 2017-18:

- Health Risk Assessment was mandated during the GMC enrollment drive

- Zumba and Yoga was continued as a practice looking at the popularity

- Health Carnival was introduced for the first time in KPIT across all locations.

- Subsidized health check-up packages offered for employees

- BMI, Eye, Skin, Hair & Scalp analysis, Pulmonary test, Dietician and Dental Checkup was done free of cost for all employees

- Health checkup tools provided at a discounted price

- New apps were introduced to employees for buying medicines and booking for health check-ups at discounted rates

- On Occasion of International Women''s Day Anemia Free KPIT Campaign was held

- Anemia awareness session was held

- Complete Haemogram test was held free of cost for women employees.

- Women found with deficiency was consulted by our in house doctor.

- Engagement through Wellness o Laughter Session

- Masala Bhangra Sessions o Tug of War

- Awareness session linked to the WHO days

- Newsletters are sent via Wellness ID on International days currently observed by the United Nations

- Skin and Scalp check-up camps on campus for employees

- Health Warrior - Various fitness challenges for employees

- Health Tips for the week mails shared with the employees

- Iyengar Yoga sessions from renowned Yoga instructor, Rajashree Tupe

- Executive Health Check-ups for Senior Grade employees

- Health Check-ups for employees (35 years and above)

- Health Check-ups were done from HOD.life at discounted rates-o Anemia Profile o Pancreas Profile o Diabetes o Lipid Profile

- Kidney Profile o Iron deficiency o Vitamin D deficiency Technology Absorption

Last year, we rolled out an initiative to implement integrated collaboration platform using Cisco''s Web Ex technology. This has led to substantial cost reductions vis-a-vis traditional audio conferencing services while providing a seamless meeting experience that is greatly enhanced by features like ''one touch audio/video calling'' from any device, application and presentation sharing, personalized meeting rooms for relevant users, meeting recording and sharing etc. As a logical next step, the same platform is getting upgraded to Cisco Spark - an app for continuous teamwork with video meetings, messaging, file sharing and white boarding.

Cyber security is becoming more and more important in the digital age. Advancement of digital technologies are enabling hackers to use smart algorithms to generate more sophisticated attacks. Traditional tools have too much dependency on people to continuously monitor and take preventive actions to protect organization from advance threats. However, it is difficult to protect customer and organizational assets from threats generated by Smart machines and cannot be defended just by Smart people. Hence, we relooked at our cyber security architecture and invested substantially in securing our infrastructure against advance threats in the digital age. In addition to Next Generation Firewall implementation to protect perimeter security, this year the implementation of the Next Generation firewall in datacenter (to monitor East to West traffic) was a major step forward. It is helping us in securing business applications and infrastructure from advanced threats even in the LAN and WAN network. We have increased the footprint and penetration of ''TRAPs'' from Palo Alto Networks for Advance Threat Protection solutions on end points. This solution protects end user devices against Advanced Malwares and Exploits. Recently we also invested in another tool from Palo Alto Networks - ''Magnifier behavioral analytics''. This tool identifies behavioral anomalies to expose hard-to-detect threats, such as targeted attacks, malicious insiders, risky behavior and compromised endpoints. When used along with Next Generation Firewall, the tool efficiently and automatically identifies abnormal activity in the network while providing us with the exact information to rapidly evaluate potential threats, then isolate and remove those threats from the network before they can perform real damage.

On the smart Campus front we have taken our story to the next level and created more improved user experience by using technologies such as Face recognition and Voice based assistant. Integrating these technologies in Kassist App now with ''one click'' reporting of incidents is done by scanning the QR codes applied in designated common areas. Voice based access to functionality has also been added.

A key focus area this year was on creating a ''Digital Lab'', wherein we have designed and developed various solutions based on digital technologies to change the user experience in the office, optimizing cost and increase the productivity. Few applications that were born out of the lab are:

Book your seat: Employee can book his/her seat for a day or a week using KIOSK or app. Once the seat is booked by the time, user gets the appropriate network and VOIP phone gets configured as per the user profile. We also build a capability on adjusting the height of the workplace table using the same App.

Smart Mirror a mirror that doubles up as a voice assistant for providing information such as time to reach a place, eating place around, nearest exit in case of evacuation, game scores etc.

Under the aegis of the Digital Lab, we have also created a Centre of Excellence (CoE) with an aim to showcase transformational use cases that are built using digital technologies. The lab will be available for use by customers to co-innovate with us the solutions as per their need.

Another very strategic initiative we rolled out this year was ''#Think Digital''. This initiative was to build digital culture across the organization ensuring all employees understand power of digital technologies to solve customer problems in innovative ways and also improve business productivity by task automation and process augmentation. We launched various e-learning modules to create digital mindset and we got excellent response by having 11,000 employees becoming Digi Champ Certified. We also launched various technical training to reskill employees on new age digital technologies and also conducted workshops for customer facing teams to educate them on digital trends and solving customer problems differently.

To improve the effectiveness of systems and creating differentiated experience for employees, this year we have developed intelligent ERP by upgrading our Systems of Record to SAP S/4 Hana and building Systems of Engagement using cloud native technologies like micro services and containers. Also to improve in the moment effectiveness of employees, we are developing Systems of Intelligence using advance analytics. Some of the dashboards giving real time insights were already rolled out last year. We are working on predictive analytics in various business areas and will be rolled out soon to business users.

Research and Development (R&D) Activity

1. '' KPIT''s Intelligent Transport System'' received an award under the category ''Smart Urban Mobility'' on 12th May 2017 at ''One Mega Event 2017''. The award was given by Shri D. N. Modi, IAS Commissioner - Gandhinagar Municipal Corporation.

2. KPIT received Special Recognition from UITP India for its entry ''Helping India double its public transport usage with smart and green technologies''. KPIT was selected by UITP India to acknowledge the bouquet of transportation solutions that it provides.

3. KPIT Technologies is a Frost & Sullivan 2018 Manufacturing Leadership Award winner. KPIT has been selected from a considerable pool of nominees to receive two prestigious awards for its Integrated Intelligent Transport System and its REVOLO projects.

The total amount spent on R & D activities is given below: R & D expenses for the year ended March 31, 2018

Particulars

Amount (? in million)

Key Project Details

Expensed in the statement of profit and loss (Refer Note 1)

199.11

Solar, Bus_Program (HEV), ITS Eng, Innovation

Capital work-in-progress

110.42

K-BIKE

Assets capitalized during the year

9.89

Total

319.43

Notes:

Out of total R & D expenditure of '' 199.11 million, eligible R & D revenue expenditure under Section 35(2AB) of the Income Tax Act, 1961, for the Company is '' 141.94 million.

A separate section on R&D activities forms a part of this Annual Report.

Foreign Exchange Earnings and Outgo

Given the global nature of the business of the Company, exports always form its thrust. Total foreign exchange earnings during the year have been Rs, 9,969.73 million (previous year Rs, 9,586.28 million) and foreign exchange outgo (including imports) has been Rs, 494.55 million (previous year Rs, 705.62 million).

Board Meetings

Six meetings of the Board of Directors were held during the year. More details about the meetings are available in the Report on Corporate Governance, which forms a part of this Annual Report.

Committees of Board

The details regarding Committees of the Board of Directors of the Company are given in the report on Corporate Governance, which forms a part of this Annual Report.

Independence of the Board

The Board of Directors of the Company comprises of optimum number of Independent Directors. Based on the confirmation/ disclosures received from the Directors and on evaluation of the relationships disclosed, the following Non-Executive Directors are Independent in terms of Regulation 16(1)(b) of the SEBI (LODR) Regulations, 2015 and Section 149(6) of the Act:

1. Ms. Lila Poonawalla

2. Mr. Adi Engineer

3. Prof. Alberto Sangiovanni Vincentelli

4. Mr. Anant Talaulicar

5. Mr. Nickhil Jakatdar

6. Ms. Alka Bharucha

Company''s Policy on Directors'' appointment and remuneration

Pursuant to the provisions of Section 134(3)(e) of the Act, the policy of the Company on the appointment and remuneration of Directors including criteria for determining qualifications, positive attributes, independence of a director and other matters provided under Section 178(3) of the Act is annexed to this Report as Annexure 5.

Particulars of loans, guarantees or investments under Section 186 of the Act Particulars of loans, guarantees or investments made during the year under review, pursuant to the provisions of Section 186 of the Act are as below:

Sr.

No.

Name of the subsidiary

Nature of transaction

Duration

Rate of Interest (%)

Amount (? in million)

Purpose

1

Impact Automotive Solutions Limited

Investment

NA

NA

367.50

Equity infusion

2

Impact Automotive Solutions Limited

Loan given

5 years

9.15% p.a.

100.00

Working capital loan

3

Yantra Digital Services Private Limited

Guarantee

3 years

NA

149.16

For setting up credit facilities

4

KPIT Engineering Limited

Investment

NA

NA

1.00

Equity infusion

Particulars of contracts or arrangements with related parties referred to in Section 188(1) of the Act

Pursuant to the provisions of Section 134(3)(h) of the Act, the particulars of contracts or arrangements with related parties referred to in Section 188(1) of the Act and prescribed in Form AOC-2 of Companies (Accounts) Rules, 2014, is annexed to this Report as Annexure 6.

Material changes and commitments affecting the financial position of the Company

The Board of the Company approved, at its meeting held on January 29, 2018, a draft composite scheme for: (a) amalgamation of Birlasoft (India) Limited with the Company and (b) demerger of the engineering business of the Company into KPIT Engineering Limited, a wholly owned subsidiary of the Company, to be renamed as KPIT Technologies Limited, in terms of the Draft Scheme and other agreements that are to be executed between the Company, Birlasoft and other parties. The completion of the Proposed Merger and Proposed Demerger will be subject to terms of such agreements and receipt of necessary approvals, such as SEBI & NCLT.

Due to this the Business IT segment of the Company and the business run by Birlasoft (India) Limited will get merged into the Company whereas the engineering business of the Company will be demerged into new engineering Co and this is a material re-structuring activity undertaken by the Company. This is not likely to have any adverse impact on the Company, however, it will affect the financial position of the Company consequent to said merger & demerger.

Change in nature of business

KPIT is engaged in two business segments (i) the enterprise resource planning business of Oracle and SAP, digital business (as comprised under digital technology SBU) along with IMS and EPLM business; and (ii) engineering business which includes solutions of electronic or mechanical engineering and usage of this data for diagnostics, maintenance and tracking of assets and related connectivity solutions including data and analytics beyond embedded or mechanical engineering and their connectivity and integration with backend IT systems and platforms.

The Proposed Merger of Birlasoft into the Company and the subsequent Proposed Demerger will create two specialized companies focused on:

1. Business IT and consulting with strong expertise into enterprise resource planning, digital solutions and consulting with wider industry coverage

2. Deep domain expertise in auto engineering and mobility solutions

This will enable both companies to have sharp focus, retain and attract best talent, bring better value to customers and make necessary investments in building technologies and solutions. This will accelerate profitable growth and industry recognition in respective areas.

The engineering business of the Company includes solutions of electronic or mechanical engineering and usage of this data for diagnostics, maintenance and tracking of assets and related connectivity solutions including data and analytics beyond embedded or mechanical engineering and their connectivity and integration with backend IT systems and platforms and this will remain the core business of the new engineering Company, going forward.

Significant and material orders

There are no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and Company''s operations in future.

Risk Management Policy

A mechanism to identify, assess, monitor and mitigate various risks to key business objectives of the Company is in place. A write-up on Enterprise Risk Management is included in this Annual Report.

Internal Control Systems and Adequacy of Internal Financial Controls

The internal control systems of the Company are adequate considering the nature of its business, size and complexity. The Statutory Auditors as well as the Internal Auditors of the Company review the same on periodical basis. Further, significant observations, if any, and action taken reports on the same are considered by Audit Committee at their meeting.

The Act has made it mandatory for the Directors in their Responsibility Statement in the Board''s Report to state that the directors, in the case of a listed company, has laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively. The above statement has to be affirmed to by the Statutory Auditors in their Audit Report.

As per explanation provided to Section 134(5)(e) of the Act, internal financial controls means the policies and procedures adopted by the Company for ensuring the orderly and efficient conduct of its business, including adherence to the Company''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information.

Components of internal control define internal control over financial reporting as a process designed by, or under the supervision of CEO and CFO office and effected and approved by the Board of Directors and management to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with Indian Accounting Standard (IND-AS) and includes those policies and procedures that:

- Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets and liabilities of the Company;

- Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with IND-AS and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and Directors of the Company; and

- Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company''s assets that could have a material effect on the financial statements.

Audit Committee Recommendations

During the year, all the recommendations of the Audit Committee were accepted by the Board. The composition of the Audit Committee is as mentioned in the Report on Corporate Governance, which forms a part of this Annual Report.

Corporate Social Responsibility (CSR)

The Policy on Corporate Social Responsibility of the Company and the details about the development of CSR Policy and initiatives taken by the Company on CSR during the year as per the Companies (Corporate Social Responsibility Policy) Rules, 2014 has been annexed to this Report as Annexure 7.

Formal Annual Evaluation by the Board

A separate meeting of the Independent Directors of the Company was held on February 14, 2018, in which a formal evaluation of performance of the Board, Committees and the individual Directors was carried out. The performance evaluation was conducted based on the criteria specified in the Act, Regulation 17 of the SEBI (LODR) Regulations, 2015 and Guidance Note on Board Evaluation issued by SEBI.

The feedback based on evaluation was discussed with the Chairman of the Board and given to the Directors.

Vigil mechanism

The Company has established a vigil mechanism as per Regulation 22 of the SEBI (LODR) Regulations, 2015 for Directors and employees to report their genuine concerns. The details of the same are explained in the Report on Corporate Governance. The Policy on Vigil Mechanism may be accessed on the Company''s website at the link: (http://www.kpit.com/ company/investors/corporate-governance).

Extract of Annual Return

The details forming part of the extract of the Annual Return in Form MGT-9 is annexed to this Report as Annexure 8.

Responsibility Statement of the Board of Directors

To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors state that:

i) in the preparation of the annual accounts for the year ended March 31, 2018, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

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 of the Company as at March 31, 2018 and of the profit of the Company for the year ended March 31, 2018;

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) the annual financial statements have been prepared on a going concern basis;

v) they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively and

vi) they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

CEO & CFO Certification

Certificate by Mr. Kishor Patil, CEO & Managing Director and Mr. Anil Patwardhan, Chief Financial Officer, pursuant to the provisions of Regulation 17(8) of the SEBI (LODR) Regulations, 2015, for the year under review was placed before the Board of Directors of the Company at its meeting held on May 23, 2018.

A copy of such certificate forms a part of the Report on Corporate Governance.

Acknowledgments

We take this opportunity to thank all the shareholders of the Company for their continued support.

We thank our customers, vendors, investors and bankers for their continued support during the year. We place on record our appreciation of the contribution made by our employees at all levels. Our consistent growth was made possible by their hard work, solidarity, co-operation and support.

We further thank the governments of various countries where we have our operations. We also thank the Government of India, particularly the Ministry of Communication and Information Technology, the Ministry of Commerce, the Ministry of Finance, the Ministry of Corporate Affairs, the Customs and Excise Departments, the Income Tax Department, the Reserve Bank of India, the State Governments, the Software Development Centers (SDCs)/Special Economic Zones (SEZs)- Navi Mumbai, Chennai, Bengaluru, Hyderabad, Noida, Pune and all other government agencies for their support and look forward for their continued support in future.

For and on behalf of the Board of Directors

Pune S. B. (Ravi) Pandit

May 23, 2018 Chairman & Group CEO

Source : Dion Global Solutions Limited
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