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Datamatics Global Services Ltd.

BSE: 532528 | NSE: DATAMATICS |

Represents Equity.Intra - day transactions are permissible and normal trading is done in this category
Series: EQ | ISIN: INE365B01017 | SECTOR: Computers - Software Medium & Small

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Annual Report

For Year :
2018 2016 2015 2014 2013 2012 2011 2010 2009

Director’s Report

The behalf of the Board of Directors, I am happy to present the 30th Board’s Report of your Company with the Balance Sheet and the Statement of Profit and Loss for the year ended March 31, 2018.

Financial Performance

The Company’s financial performance for the year ended March 31, 2018 as compared to the previous financial year ended March 31, 2017 is summarized below:

Particulars

(Rs. in Million)

(Rs. in Million)

Consolidated

Standalone

2017-18

2016-17

2017-18

2016-17

Revenue from operations

9,102.69

8,524.17

3,378.50

3,057.12

Other Income

211.82

161.72

201.55

149.91

Other gains/(losses)

32.50

2.73

24.88

43.05

Total Income

9,347.01

8,688.62

3,604.93

3,250.08

Profit before Interest, Depreciation and Tax

1,087.49

982.27

660.19

408.61

Interest

40.30

47.72

34.41

38.05

Profit before Depreciation and Tax

1,047.19

934.55

625.78

370.56

Depreciation

203.30

241.96

102.33

118.58

Profit Before Tax

843.89

692.59

523.45

251.98

Provision for Taxation

128.86

52.97

116.76

4.13

Profit After Tax

715.03

639.62

406.69

247.85

Share of Minority Interest in Profit for the year

74.18

(12.22)

-

-

Profit for the year

640.85

651.84

406.69

247.85

Balance Brought Forward from Previous Year

2,637.21

1,893.43

1,388.83

1,158.72

Profit Available for Appropriation

Acquisition of Techjini

86.47

-

-

-

Removal of subsidiary

-

8.46

-

-

Redemption of Preference shares

-

101.22

-

-

Dividend (including Tax)

(73.72)

(17.74)

(73.72)

(17.74)

Transfer to General Reserve

-

-

-

-

Balance Carried Forward

3,290.81

2,637.21

1,721.80

1,388.83

The Company has prepared the financial statements for the first time in accordance with Indian Accounting Standards (Ind AS) notified under the Companies (Indian Accounting Standards) Rules, 2015 read with Section 133 of Companies Act, 2013, (the ‘Act’) and other relevant provisions of the Act.

The reconciliations and descriptions of the effect of the transition from previous GAAP to Ind AS have been set out in the notes to accounts in the financial statements.

There are no material departures from the prescribed norms stipulated by the Accounting Standards in preparation of the Annual Accounts. Accounting policies have been consistently applied except where a newly issued accounting standard or a revision to an existing accounting standard requires a change in the accounting policy hitherto in use. Management evaluates all recently issued or revised accounting standards on an ongoing basis. The Company discloses consolidated and standalone financial results on a quarterly basis which are subjected to limited review and publishes consolidated and standalone audited financial results on an annual basis.

Overview of Company’s Financial Performance

The Company is a global IT and ITeS organization focused on delivering proactive and smart data to intelligent business solutions helping enterprises across the globe address their business challenges.

On a Consolidated basis, your Company achieved revenue from operations of Rs. 9,102.69 million as compared to Rs. 8,524.17 million in the previous year. The profit after tax for the current year was Rs. 715.03 million as against Rs. 639.62 million in the previous year.

The revenue from operations on a standalone basis is Rs. 3,378.50 million as compared to Rs. 3,057.12 million in the previous year. The profit after tax for the current year was Rs. 406.68 million as against Rs. 247.85 million in the previous year.

Dividend

During the year, Board of Directors had declared and paid an interim dividend of Rs. 0.50 (10%) per equity share.

In addition to the Interim Dividend and based on the Company’s performance, Directors are pleased to recommend for approval of the Members, a final dividend of Rs. 0.25 per share (5%) for the financial year 2017-18. The total dividend payout amount for the Financial Year 2017-18 amounts to Rs. 0.75 (15%) per equity share of face value of Rs. 5 each.

Transfer to Reserves

During the year under review, the Company has not transferred any amount to General Reserve out of the amount available for appropriation. However, credit balance of Profit and Loss of Rs. 3,290.81 million is transferred to Balance Sheet under the head ‘Reserves and Surplus’.

Transfer of Unclaimed Dividend to Investor Eduction and Protection Fund

In terms of Section 125 of the Companies Act, 2013 (“the Act”), unclaimed or unpaid Dividend relating to the financial year 2010-11 is due for transfer on September 22, 2018 to the Investor Education and Protection Fund established by the Central Government. More details are available on http:// www.datamatics.com/investors/unpaidunclaimed-dividend.

Acceptance of Deposits

The Company has not accepted any deposits during the Financial Year 2017-18 in terms of Chapter V of the Act.

Subsidiary Companies

The Company has the following Indian subsidiaries (including the step down subsidiaries) as on March 31, 2018:

1. Cybercom Datamatics Information Solutions Limited

2. Lumina Datamatics Limited

3. Datamatics Digital Limited (w.e.f July 01, 2017)

4. CIGNEX Datamatics Technologies Limited

5. LDR eRetail Limited

6. LD Publishing & eRetail Limited

7. Attune Infocom Private Limited

8. Scalsys Technologies Private Limited

The Company has the following overseas subsidiaries (including the step down subsidiaries) as on March 31, 2018:

1. Datamatics Global Services, Inc. (US)

2. Techjini Inc (US) (w.e.f July 01, 2017)

3. Datamatics Global Technologies GmbH (Germany)*

4. Datamatics Infotech Limited (UK)

5. Datamatics Global Services Pty Limited (Australia)

6. Datamatics Global Technologies Limited (Mauritius)

7. Datamatics Global Technologies AG (Switzerland)

8. Datamatics Global Services FZ-LLC (Dubai)

9. Datamatics Global Services Corp. (Philippines)

10. Datamatics Robotics Software Inc (US)

11. Lumina Datamatics Inc. (US)

12. Lumina Datamatics GmbH (Germany)

13. Lumina Datamatics Assessment and Analytics, LLC (US)

14. CIGNEX Datamatics Corporation (BVI)

15. CIGNEX Datamatics, Inc. (Michigan)

16. CIGNEX Datamatics GmbH (Germany)

17. CIGNEX Datamatics Re. Limited (Singapore)

18. CIGNEX Datamatics UK Limited (UK)

19. Duo Consulting Inc. (US)

* In the process of liquidation.

In accordance with Section 129 (3) of the Act, the statement containing salient features of the financial statements of the subsidiaries in Form AOC-1 is given in the financials section.

Pursuant to the provisions of Section 136 of the Act, the Financial Statements of the Company including Consolidated Financial Statements along with relevant documents and separate

Audited Financial Statements in respect of subsidiaries are available on the website of the Company.

Acquisitions:

Techjini Solutions Private Limited (now known as Datamatics Digital Limited)

In July 2017, Datamatics acquired 71.1% stake in Techjini Solutions Private Limited (hereinafter referred to as ‘Datamatics Digital Limited’), which is a boutique mobile and web application development Company which caters to Fortune 500 companies across business verticals such as media, engineering, manufacturing and start-ups.

Headquatered in Bangalore, Datamatics Digital Limited is a leading software services Company with a presence in US, and has a specialized focus on digital experiences, mobile based web application development and maintenance services. With 250 employees, Datamatics Digital Limited caters to over 35 companies across business verticals such as media, engineering, manufacturing and start-ups. Datamatics Digital Limited is one of the first 13 companies in the world to be certified under the Google Developer Agency Program.

The objective of this acquisition is to further strengthen Datamatics’ enterprise mobility offerings through its smart technology solutions.

RJ Globus Solutions, Inc

In April 2018, Datamatics through its Philippines subsidiary, acquired 75% stake in RJ Globus Solutions Inc., a voice-based BPO Company headquartered in Manila, Philippines. This acquisition will further strengthen Datamatics’ BPO offerings to meet the growing demands of customers and increase its market presence through an expanded global delivery centre.

RJ Globus Solutions, Inc. is a Business Process Outsourcing Company that offers best-in-class voice and non-voice as well as back office support to global organizations. The Company is currently investing in technology, tools and automation to lower the cost of ownership of its customers.

Share Capital

As on March 31, 2018, the paid-up share capital of the Company was Rs. 294.75 million divided into 58,949,337 equity shares of Rs. 5/- each fully paid up. During the year, there has been no change in the paid- up share capital of the Company.

The authorized share capital of the Company was Rs. 975.5 million as on March 31, 2018.

Board of Directors and Key Managerial Personnel

Retirement by Rotation

In accordance with the provisions of the Act and the Articles of Association of the Company, Mr. Rahul L. Kanodia, retires by rotation at the ensuing Annual General Meeting (“AGM”) and being eligible offers himself for re-appointment.

Re-appointment of Mr. Sameer L. Kanodia as Whole Time Director of the Company

The Members of the Company had, at the 25th Annual General Meeting held on September 24, 2013, appointed Mr. Sameer L. Kanodia as a Whole-Time Director for a period of five years, with effect from January 30, 2013. According to his terms, the tenure of Mr. Sameer L. Kanodia as a Whole-Time Director expired on January 29, 2018.

On the recommendation of Nomination & Remuneration Committee, the Board of Directors at its meeting held on May 29, 2018, subject to the approval of shareholders at ensuing AGM, re-appointed Mr. Sameer L. Kanodia as a Whole-Time Director for a further period of five years with effect from January 30, 2018.

A brief profile of Mr. Sameer L. Kanodia is provided in the Notice of AGM.

Cessation of Director

Mr. Sudhir C. Deshpande, Independent Director of the Company, demised on March 14, 2018.

The Board places on record its sincere appreciation for the invaluable contribution, advice and support rendered by Mr. Sudhir C. Deshpande during his tenure as Independent Director of the Company.

Declaration by Independent Directors

The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed under Section 149 (6) of the Act and Regulation 25 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“SEBI Listing Regulations”).

Meetings of the Board

During the financial year, five meetings of the Board of Directors were held, the details of which are given in the Corporate Governance Report of the Company, which forms a part of this Report. The maximum interval between any two meetings did not exceed 120 days, as prescribed under the Act.

Board and Committee Evaluation

The Companies Act, 2013 and SEBI Listing Regulations contains broad provisions on Board Evaluation i.e. evaluation of the performance of (i) the Board as a whole, (ii) individual Directors (including Independent Directors and Chairperson) and (iii) various Committees of the Board.

Pursuant to the said provisions, the Board has carried out an annual performance evaluation of the entire Board, its Committees and all the Directors based on the parameters specified in the Report of Corporate Governance.

A separate meeting of Independent Directors was held to discuss the performance of Non-Independent Directors, Board as a whole and Chairman after considering the views of Executive Directors and Non-Executive Directors.

Future Growth Strategy

The financial year 2017-18 witnessed steady growth in its digital business which is attributed to the Company’s strong focus on developing proprietary solutions having high inter-operability. These are aligned to our clients’ business goals and are intended to serve as growth engines across industry verticals - Banking, Financial Services, Insurance, Manufacturing, Retail, Publishing and Transportation to name a few.

Investment in new technologies and product development

For the next 3-5 years, Datamatics’ growth will be anchored on a two-pronged strategy of striking the right balance between traditional IT and BPM businesses as well as focus on creating innovative solutions through the incubation hub -DataLabs.

With the growing demand for customized solutions and enterprises embracing new technologies, Datamatics is focusing on employing ‘design thinking’ at its core while developing comprehensive and engaging solutions that integrate the back, middle and front offices. The synergies would be primarily directed towards helping clients create a work culture, where the onus is on understanding their end-customer requirements and helping shared services to keep pace with customer-facing teams. This paradigm shift is towards a holistic, end-customer-centric ecosystem that leverages technology to increase productivity, efficiency, and speed as well as optimize operational expenditures.

Strengthening business to drive sustainable growth

With a focus on expanding operations in existing and new geographies, Datamatics is actively focusing on leveraging the partnership model by associating with various OEMs, resellers, and integrators for faster and deeper penetration of Datamatics’ solutions - TruBI and TruBot in different markets. The Company aims to further enhance brand visibility and generate greater revenue through cross-sell and upsell of our comprehensive offerings to existing clients.

The need for metro rails and Automated Fare Collection is growing across emerging economies, and India is witnessing a strong demand for these rapid transit systems. Datamatics, as the only Company in India to have a highly evolved AFC, smart gates, and contactless gates service offerings, sees a huge opportunity in the smart city infrastructure development government schemes.

Datamatics will continue to invest in new technologies and product development in the area of Robotics, Artificial Intelligence, Mobility and Analytics that will help their clients stay competitive.

Quality

Quality has always been a guiding light for the Company and it helps us to remain focused on the goal of ensuring customer delight and to create a distinct edge over the competitors. The consistent high customer satisfaction ratings and effusive customer testimonials bear an eloquent testimony to this commitment for quality. Needless to say, quality at Datamatics has not only been a legacy but it has been strewn inseparably into its culture, custom and character.

The Company believes in the philosophy that quality encompasses and permeates every action and thought process. Quality at Datamatics goes beyond product and services, and forms an integral part of the Datamatics culture. The industry has always been kind in recognizing the Company’s performance, and this year too, Datamaticians and Datamatics featured prominently at various industry platforms by winning prestigious awards. Our clients have also consistently recognized us for not only maintaining the Quality of deliverables but also for surpassing their expectations.

The Company is the first and the only I.T Company to have won the “International Asia Pacific Award” for Quality in services sector. The Award was won against competition from hundreds of companies from 38 countries spread across the world, including the US, Japan, Australia, New Zealand, Russia, Canada, China, Israel, South Korea, Peru and Mexico. The Company also won the prestigious “IMC IT Award for Quality”. We have won the Global Quality Challenge award of one of the fortune 100 organizations for the ninth time. These award are the testament to our continued focus on quality. We maintain quality standards not as project requirements but as a way of our life at the organization.

Further significant initiatives of the Company towards quality are:

1) Certifications:

The Company’s quality management systems (QMS) that forms the backbone of all the processes and the way day-to-day operations are carried out is a very comprehensive and robust system that draws from a host of international standards and benchmarks. This includes ISO 9001:2015, SEI CMMI, ITIL, Agile, ISO 20000 and so on. The QMS has been successfully assessed and certified for ISO 9001:2015 and SEI CMMi Ver 1.3 high maturity level L4. During all the surveillance periodic assessment audits, there has been no major non-conformity observed. All the new centers that we added in the financial year have also been successfully assessed and certified to the above international standards.

As you are aware, with the growing complexity of the digital economy, the threat on the information security and data also increases in terms of complexity and impact. The Company is fully cognizant of this challenge and we constantly upgrade our information security management systems (ISMS). Our operations and ISMS have been successfully assessed and are compliant to ISO 27001:2013, SSAE 16 SOC 1 and SOC2 requirements and HIPAA requirements. We are in the final stages of implementing rigorous HiTRUST requirements and are confident of successful assessment and certification by May 2018. The Company is also in the final stages of renewing its PCI-DSS certification. These standards are extremely crucial for Financial, Insurance and Healthcare industries.

Our commitment to ensure a robust information security management system for our customers has been bolstered by these certifications. We have implemented SIEM solution as well which will further strengthen the Information security management. There is a conscious thrust on risk management as an organization strategy and the risks and mitigation plans are reviewed regularly at all pertinent levels.

A lot of thrust has also been put in enhancing the overall project management skills of our project managers. The Company is a Registered Education Provider (REP) with Project Management Institute (PMI) for imparting Project Management Professional (PMP) trainings. This financial year, 15 project managers were certified as PMP. In the next financial year, the focus on enhancing these skills will continue.

GDPR REGULATIONS

General Data Protection Regulation (GDPR) has become effective from May 25, 2018. GDPR is a regulation in European Union law on data protection and privacy for all individuals within the European Union (EU) and the European Economic Area (EEA). It also addresses the export of personal data outside the EU and EEA areas. The requirements laid down in the regulation are quite strict.

Your Company serves some customers from the EU region. To avoid the risk of non-compliance of the GDPR regulation, the Company has made the necessary amendments in the agreements with the concerned customers and suppliers to keep them in line with the GDPR requirements. We have taken all necessary steps, both at physical and process levels, to ensure compliance to the GDPR requirements and we are GDPR compliant.

2) Customer Satisfaction Tracking:

The Company, as part of its commitment to ensure superior customer satisfaction, conducts a half-yearly customer satisfaction survey. The wholly automated survey asks the customers their feedback on a range of parameters that measure their near and long term perception about the Company.

We feel proud to share with you that we continue a stellar performance on this count. The Company scored 5.14 on overall satisfaction rating on a scale of 1-6, 1 being the lowest and 6 being the highest. Another highlight of this survey has been that 82% of the respondents have rated us in the top 2 boxes of the rating i.e. extremely satisfied and delighted. The two broad strategic themes viz Delivery as per commitment and quality of solutions have also moved up and are at 5.18 and 5.05 respectively. The average net promoter score is 65%.

Apart from this, the more frequent and real time customer feedback capture mechanism that captures feedback through other formal and informal channels also reports an improving trend in the customer sentiment towards our processes and performance.

3) Continuous Improvement - Lean Six Sigma

The Company has a mature and well-entrenched continuous improvement program. This program is based on the principles of Lean, Six Sigma and Kaizen. The program focusses on making our processes more efficient, productive, accurate and cost effective. The program continues to deliver significant benefits to the organization with improvements in productivity, efficiency, accuracy and customer satisfaction. Overall 395 Lean Six Sigma projects were successfully completed since 2007.

The Company has about 25 Six Sigma Green Belt and 40 Six Sigma White Belt certified professionals along with 6 Six Sigma Black Belt and 1 Six Sigma Master Black Belt certified professionals. The Company spent over 3000 person hours of training around continuous improvement in the last financial year.

Robotics Process Automation

The Robotics Process Automation (“RPA”) Team under the PE cell has progressed well this year. Its revenues have more than doubled. We now have 100 RPA Consultants working for clients in USA, Europe, Middle East and in India and are poised for accelerated growth this year too. Our RPA product has been rechristened as “TruBOT”.

Several large Banks and Insurance Companies are our customer now. We also have customers in manufacturing, logistics and retail. We have completed over 700 projects in RPA. Our RPA implementation for ICICI Bank won the “Asian Banker Award” for the most innovative RPA implementation in a Bank at a function in Singapore.

Our employees have been invited as Key Speakers for several RPA events around the world. We are creating a partners ecosystem to accelerate our growth. We continue to invest in enhancing our product features.

We have been covered by some analysts in their reports on RPA, the most recent one being “Everest”.

Human Resources Management and Employee Relations

During the year, Human Resource Department (“HRD”) took many initiatives to increase organizational capability and productivity so as to be value driven and future-ready. The global headcount as on March 31, 2018 was 10,000 plus.

The Company has rich diversity in its employees with a common aim to excel. A culture of co-operation and solidarity is infused by celebrating National holidays and festivities such as Independence & Republic Day, Diwali, Dandiya & Christmas. Initiatives such as JOSH, where employees offer their innovative ideas to unleash their creativity, maintain a balance between work & life and create a deep sense of bonding among employees.

The HRD regularly conducts the following programs:

New Entrant Observation (“NEO”): A session is conducted with the new employees at regular intervals to understand how things are going with them and gain their feedback. In FY 17-18, the team conducted 240 NEO sessions Pan India and 796 employees attended these sessions.

Mid Probationary Review: HRD collects feedback from the Manager post NEO to evaluate the performance and progress of the new employee during the initial period of employment, and for appropriate action to be taken where performance or progress is unsatisfactory.

Client-Site Visit: HRD representative and account manager visit employees, who are working at the clients place, on a periodic basis. It helps the Company to interact with the client site employees, collaborate with them and also understand their grievances and suggestions. For the FY 17-18, 62 client visits have been done by the HR team.

“Climate Survey” and “Open House”: It renders the employee platform to voice their views and opinions for the possible areas of improvement which in turn enhance employee engagement and fosters direct organizational growth.

Saarathi: The Company has a ‘Buddy System’ which is known as ‘Saarathi’ in place to ensure smooth integration of new entrants into the organization, processes and systems. Saarathi is the point of contact, friend and guide for the new joinee during initial days within the organization.

Euphoria: A monthly meeting is conducted by the HRD, which offers the team an opportunity to interact with each other, come together and celebrate. It provides a platform on monthly basis for the seniors & HRD to provide updates, to have an element of fun together, reward & recognize employees, all with a munch & mingle session at the end. It works as a motivator to perform outstandingly.

Long Service Award: There are several employees who have helped the Company grow to this level. To appreciate the commitment, trust and loyalty displayed by the Employees, they are felicitated with Long Service Awards during the Annual Achievers Award Ceremony and infusing a sense of belongingness of being a core member of the Company.

Annual Achievers Award, Instant Recognition and Client Appreciation: To motivate high performing individuals and teams, who have exhibited exemplary commitment, having outstanding leadership qualities, made considerable impact on the business, we confer upon them various performance awards during the Annual Achievers Awards Ceremony and Euphoria.

iAppreciate: These cards are awarded by the Reporting Manager to appreciate their team members at right time for good work and efforts.

Lazy Friday in ITS: Focus is laid on Team Orientated Culture wherein, employees interact and perform tasks together to increase team cohesion. It is also instrumental in promoting cross functional teams as they share similar goals, purpose and targets.

Regional Location HR

South HR: The employee headcount for south locations (Bengaluru, Chennai & Puducherry) as on March 31, 2018 is 1618. Puducherry headcount has stabilized & Datamatics is one of the top 5 employers in the Union Territory.

Nasik HR: Datamatics at Nasik completed a decade of its operation and is a very important location within Datamatics Landscape. The Company has on-boarded 800 employees within 98% TAT and zero consultancy cost. In Nasik, initiatives like 6 sigma, automation and process improvement are regularly undertaken. Nasik BPO has touch typing improvement scheme which trains and motivates employees for better typing speed adding to productivity of employees. The campus recruitment drive has been conducted successfully in Nashik, branding Datamatics as an ‘Employer of Choice’ across colleges. Nashik as a location has matured with quality service and low attrition.

HR Operations

Automation:

Ask HR: Customized employee query tool “ASK HR” has been introduced to address all employee queries. Each category of query has a defined SLA and is tracked on a regular basis. This helps employees to get their queries resolved in a timely and effective manner. In FY 2017-18, there were 3348 queries registered on Ask HR; HR team has resolved 98% of queries.

E-Dialogue: It is an online Performance Management tool developed on the intranet portal - PULSE to automate the entire cycle from target setting to annual appraisal under one platform. This will help in structuring and creating a more efficient PMS process, by transitioning from a paper-based process to a robust online platform. In FY 2017-18, KRA setting were done on e-Dialogue.

Payroll Outsourcing:

Payroll has been outsourced to HGS International Services Private Limited effective from January 2018, to achieve process efficiency and cost reduction. HR outsourcing benefits the organization in managing and delivering ‘payroll and benefits’ services to the employees proficiently, mitigating the risks associated with process, technology, people, compliance and change management. It enables the HR team to focus more on business strategy and less on administrative activities.

Learning & Development (L&D)

The Learning & Development (L&D) team conducted the following programs during financial year 2017-18:

Blended Learning: Training via the WebEx Training tool: The L&D team has expanded their horizon for training execution through WebEx for employees across the organization. With the help of this tool, the team is able to address a larger global audience effectively, which allows participants to log-in from different locations. These training sessions are recorded and are later used as pre-recorded trainings via webex. These recorded sessions are shared with employees who have missed the live training session. This has imbibed a continuous learning attitude amongst employees. In the last one year, 100 plus trainings have been organized and executed.

Eagle @ Datamatics: The Eagles program was launched with the objective of bringing the best from each department and creating cross functional teams which are mentored to achieve the goals defined by the leadership team. The program has been giving excellent results and helped the Company get next generation leaders in-house. The Eagles program has enabled the organization to generate passion and zeal amongst team members. The team members explored and enhanced their creativity, resourcefulness, bonding, accountability, influencing skills and belief in themselves.

Project Management Preparatory Course (PMP):

Datamatics is a Registered Education Provider (REP) for PMP training, and has been conducting PMP batches for employees through a 5-day training module. The training is imparted by an in-house experienced trainer who is also a certified PMP professional. As of date, the Company has over 55 plus certified PMP professionals who have been trained internally and certified. In the FY 2017-18, 15 employees got certified in PMP.

Synergy - The Team Building Workshop: Synergy Workshop is a complete experiential learning based workshop which is customized to address issues faced by teams. The program helps team members to synergize and aids in creating a good working environment. This workshop aims at resolving conflicts within teams and engaging employees to bond both at a professional as well as personal level. These programs are executed in-house and have managed to generate immense curiosity and excitement among the employees and clients who often participate remotely.

Training Automation: In this current age of Automation, L&D @ Datamatics too has automated most of its core functions. L&D processes such as Training Requisitions, Training Effectiveness and Training Need Analysis are all live and available to all the stakeholders on the Intranet. Automation has enabled L&D in ensuring prompt and effective execution of training programs and accuracy in Reports and MIS.

L&D has clocked 2,64,738 Person-hours in the year 2017-18 with an average feedback of 4.0 out of 5.

Talent Management

The Talent Management team conducted the following initiatives:

Role based competencies & Focus Group Discussion: A year-long activity comprising of detailed discussion with Business heads, Functional managers and role incumbents was conducted to identify unique roles across the organization along with the key behaviors that differentiate the exemplary performers from the rest. A set of behavioral and functional competencies have been identified for each role (along with the desired proficiency level) that an individual must portray to succeed in the said role, followed by creation of standardized job descriptions for all roles in Datamatics. These set of functional and behavioral competencies thus identified will be integrated with our people processes namely recruitment, performance management and Learning & Development to enhance our alignment with organizational goals and business requirements.

Competency Based Performance Management:

While KRA setting ensures all employees are clear about what their goals would be, at the same time it is important to identify the right set of competencies required to successfully achieve these goals. Integration of the competencies identified through the role analysis discussion with e-Dialogue is one exercise which is in process for this financial year.

Competency Based Assessments and Interviewing:

Hiring the right talent for the right job is crucial in the recruitment process. To ensure that candidates with the right skills, knowledge and attributes are hired, online assessments (Technical/Cognitive/Psychometric) and competency based interviewing was introduced which enables the team to gauge the potential and behaviors of the candidate thereby hiring the talent that would be culturally fit for the organization.

Talent review - 9 box grid (Talent Calibration): It is defined process to enable managers evaluate and gauge the performance, potential and readiness of their respective talent pool using the 9 box grid format. This involves working collaboratively with the leaders to arrange every employee above specific grades, into one of the nine boxes on three levels of performance and potential. This will form the basis for succession planning, Hi-Performer/Hi-Potential identification and leadership development.

Succession Planning: This is a designed process to build the Company’s preparedness to replace employee in key critical positions with a structured approach. Identifying people who are ready to take up higher responsibilities at the appropriate time, under the appropriate circumstances with seamless transition.

Career Dialogue: Career Dialogues is simply a one-on-one discussion, aimed to gain a better understanding of team’s aspirations/career goals and development areas. This conversation will set the stage for the team to clarify goals and set plans. This will not only help us track their career better, but will also help us understand the development opportunities that we can offer as a department to enrich their career.

Talent Profile: Talent Profile is an online platform within the intranet portal - PULSE that enables employees to create and maintain their up-to-date profile with their professional details at one place. The portal was launched with an aim to have a complete picture of the workforce at click of a button. This also enables the managers to have their team’s details handy through this online portal, thereby enabling them to know their employees better and make informed decisions accordingly.

Graduate Executive Program - Building Talent Pipeline for Sales: A strategic fast track development program was conceptualized along with sales team and launched with a focus to build the talent pipeline for next generation sales professionals. A multilayer program where 20 fresh graduates were hired and groomed with a series of structured learning and on-the-job development opportunities spread across 12 months. The end goal of the program is to enhance the overall capability of the sales team to generate more demand for Datamatics’s range of products and services, thereby leading to increased business impact and revenue growth.

Aspire - Online Portal for Internal Job Postings (“IJP”): An online portal for Internal Job Postings was launched with an aim to turn the talent search engine inside the organization. It provides employees the opportunity to apply for open positions across the organization, to enhance their career growth and development. A structured IJP program acts as one of the key success drivers in providing mobility to employees across roles/ functions / locations, thus addressing business challenges, as well as providing job enrichment to employees based on their career aspirations.

Talent Acquisition

The Talent Acquisition Team ensures on-time boarding of employees at the right cost & quality across diverse functions, skills and geographies. The team has been using innovative methods of hiring with extensive focus towards mapping, networking & social media for niche & leadership hiring. The best industry practices are meticulously followed towards sourcing, assessments, candidate engagement, background verifications, compliance & organization branding.

The Team has continuously emphasised on cost-savings by reducing vendor utilisation as well as contributed revenue under its PS-HR function.

Automation: Hirecraft was implemented last year to digitize the entire recruitment workflow. Today, Hirecraft has helped build a robust and strong candidate repository, improved data accuracy and has been a key source for recruitment metrics.

Skill Identification: The Talent Acquisition team undertook the ‘Skill Identification’ project to map and classify all internal resources under practice & skills. This has hugely benefited in identifying resources to be internally moved and deployed, leading towards process improvement.

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

The Company has always provided a safe and harassment free workplace for every individual working in its premises through various policies and practices. The Company always endeavors to create and provide an environment that is free from discrimination and harassment including sexual harassment. The Company is actively involved in ensuring that the associates are aware of the provisions of the POSH Act and rights thereunder.

The Company has adopted Anti-Sexual Harassment Policy in place which is in line with requirements of the Sexual Harassment of women at workplace (Prevention, Prohibition and Redressal) Act, 2013 and is fully committed to uphold and maintain the dignity of every women executive working in the Company. The Company’s Policy provides for protection against sexual harassment at workplace and for prevention and redressal of such complaints.

Number of complaints pending as on the beginning of the financial year: 0

Number of complaints filed during the financial year: 4 Number of complaints pending as on the end of the financial year: 0

Awards & Achievements

During the year, in recognition of its performance and initiatives, the Company (including Subsidiaries & Group Companies) and its employees received several awards, some of which are:

1. April, 2017 - MVR, powered by Lumina Datamatics was featured in the Top 50 Most Innovative Technology Start-ups 2017 in Hype Foundation’s US Sports Innovation Pitch competition.

2. May, 2017 - Datamatics was acknowledged as the Preferred Partner by ICICI Group for its outstanding accomplishments and exemplary performance over the years.

3. May, 2017 - Datamatics and The United Nations Population Fund (UNFPA) received the Webby Award 2017 in the Best Use of Photography category from 13,000 entries across 70 countries and over 3.5 million

4. July, 2017 - CIGNEX Datamatics was acknowledged with the Best Employer Brand and Dream Employer of the Year awards.

5. November, 2017 - Datamatics was acknowledged by Qimpro, the premier quality management consultancy in India, with the QualTech Prize 2017 for continuous Improvement & Innovation.

6. November, 2017 - Datamatics’ Fraud Analytics Solution was featured in the top three case studies at the NASSCOM Analytics Challenge 2017.

7. January, 2018 - Datamatics was acknowledged with the CIO CHOICE 2018 Honor & Recognition title in three categories - Artificial Intelligence (AI), Business Intelligence (BI), and Document Management Systems (DMS).

8. January, 2018 - Datamatics Digital Ltd. (erstwhile TechJini) was recognized as a Google-Certified Developers Agency for the third consecutive year.

9. January, 2018 - Cignex Datamatics received the Best Employee Reward & Recognition Strategy award for creating a strong culture of appreciation at the World HRD Congress 2018.

10. January, 2018 - Cignex Datamatics received the Best Employer of the Year Award, endorsed by World Federation of Marketing as part of the World HRD Congress 2018.

11. February, 2018 - Datamatics received an award in the Services Category for its exemplary work in Consulting, Information Technology, Data Management and Business Process Management at the 7th Global Economic Summit organized by the World Trade Centre, Mumbai.

12. February 2018 - CIGNEX Datamatics was certified as a Great Work Place by the Great Place to Work Institute for the second consecutive year.

13. February, 2018 - Datamatics was acknowledged with Top Honours at the World HRD Congress 2018 as the ‘Best HR Organization to Work’ as well as in the ‘Best Talent Management Strategy’ category.

14. February, 2018 - Lumina Datamatics received the Best Employer Branding Award at the Employer Branding Awards 2018.

Events

Customer Engagement Initiatives

- Customer Engagement Initiative at Datamatics (Jan’18)

Datamatics hosted a celebratory evening for its customers in Mumbai with the objective of engaging with them and sharing interesting business updates. The event witnessed the presence of senior leaders across BFSI, Manufacturing, Logistics and Media & Entertainment. The programme also included a stand-up act by Cyrus Broacha.

- 1st ‘Digital Conclave with CFOs’, Mumbai (October’17)

Datamatics hosted its first ‘Digital Conclave with CFOs’ in Mumbai that witnessed the presence of leading CFOs across the BFSI, media and telecom sectors. It was an interactive discussion and debate platform for CFOs across India. The forum was focused on the rapidly changing role of finance from being a support function to driving strategy and new business models.

Datamatics Partnered Events

- Partnered the SSOWeek 2018 (March’18)

Datamatics partnered the 22nd North American Shared Services and Outsourcing Week (SSOW), to showcase its proprietary solution for Robotic Process Automation called TruBot, a multi-skilled bot programmed to enhance productivity.

- Technology Partner to FICCI’s 19th Annual Insurance Summit, 2018 (Jan’18)

Datamatics was the Technology Partner to FINCON2018, FICCI’s Annual Insurance Summit that was held in Mumbai. Rahul Kanodia, Vice Chairman & CEO was a panelist for the session on “Digitization of Core Operations” where he spoke about the paradigm shift in the insurance sector and emphasised the need to go digital in order to increase productivity and enhance efficiency, leading to a better customer experience.

- Partner to the Software Testing Conference 2017 (Dec’17)

Datamatics participated in the 17th Annual International Software Testing Conference 2017, one of the leading testing conferences in India. As a partner to the event, Datamatics showcased its Robotic Test Automation solution to IT professionals and business leaders.

Particulars of Employees

Disclosures with respect to the remuneration of Directors and employees as required under Section 1 97 of the Act read with Rule 5(1) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are annexed as “Annexure - A” to this Report.

In terms of the provisions of Section 197(12) of the Act read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing the names and other particulars drawing remuneration in excess of the limits set out in the said Rules forms part of the report. However, having regard to the provisions of the first proviso to Section 136(1) of the Act, the Annual Report excluding the aforesaid information is being sent to the Members of the Company. The said information is available for inspection at the Registered Office of the Company during the working hours. Any member interested in obtaining such information may write to the Company Secretary, at the Registered Office and the same will be furnished on request.

Datamatics’ Insider Trading Policy for Regulation of Trading by Insiders

Datamatics has formulated an Insider Trading Policy for Directors and employees to comply with SEBI (Prohibition of Insider Trading) Regulations, 2015. This policy is framed adopting the standards set out in the Regulations to regulate, monitor, and report trading by its employees to achieve compliance with the said Regulations

The Insider Trading Policy for Regulation of Trading by Insiders is available on our website (http://www.datamatics.com/sites/ default/files/insider-trading-policy.pdfl

Directors’ Responsibility Statement

Pursuant to Section 134(5) of the Act, the Board of Directors, to the best of their knowledge confirms that:

(i) in the preparation of the annual accounts for the year ended March 31, 2018, the applicable accounting standards read with requirements set out under

Schedule III to the Act, have been followed and there are no material departures from the same;

(ii) they have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for the year ended on that date;

(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 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.

Secretarial Standards

The Company has complied with secretarial standards issued by the Institute of Company Secretaries of India on Board Meetings and Annual General Meetings.

Auditors

Statutory Auditors

M/s. M. L. Bhuwania and Co. LLP, Chartered Accountants (Firm Registration No. 101484W/W100197) were appointed as the Statutory Auditors of the Company to hold office from the conclusion of 29th Annual General Meeting till the conclusion of 34th Annual General Meeting, subject to ratification by Shareholders at each AGM.

In accordance with the Companies Amendment Act, 2017, enforced on May 07, 2018 by the Ministry of Corporate Affairs, the appointment of Statutory Auditors is not required to be ratified at every Annual General Meeting.

Secretarial Auditor

The Company had appointed Mr. Tushar Shridharani, Practicing Company Secretary, to conduct the secretarial audit for the financial year 2017-18. The Secretarial Audit Report for the financial year ended March 31, 2018 is annexed as “Annexure - B” to this Report.

Information on Auditors’ Observations

1) Statutory Auditors:

The report of the Statutory Auditors on Standalone and Consolidated Financial Statements forms part of this Annual Report. There are no qualifications, reservations or adverse remarks made by the Statutory Auditors in their report.

2) Secretarial Auditor:

The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.

Corporate Governance

Pursuant to the SEBI Listing Regulations, Report on Corporate Governance for the year under review, is presented in a separate section. A certificate from M/s. M. L. Bhuwania & Co. LLP, confirming compliance of conditions of Corporate Governance, as stipulated under the SEBI Listing Regulations, is annexed to this report.

Management Discussion and Analysis

The Management Discussion and Analysis Report for the year under review, as stipulated under SEBI Listing Regulations, is annexed to this report.

Composition of the Committees of the Board

There are currently four Committees of the Board, as under:

- Audit Committee;

- Corporate Social Responsibility Committee;

- Nomination and Remuneration Committee;

- Stakeholders’ Relationship Committee.

Details of all the Committees along with their charters, composition and meetings held during the year, are provided in the “Report on Corporate Governance”, a part of this Annual Report.

Particulars of Loans, Guarantees and Investments

Details of loans, guarantees and investments covered under the provisions of Section 186 of the Companies Act, 2013, are provided in the Notes to Financial Statements, which forms part of this Annual Report.

Contracts and Arrangements with Related Parties

All contracts, arrangements and transactions entered by the Company with related parties during FY 2017-18 were in the ordinary course of business and on an arm’s length basis. During the year, the Company did not enter into any transaction, contract or arrangement with related parties that could be considered material in accordance with the Company’s policy on related party transactions.

Accordingly, the disclosure of related party transactions in Form AOC-2 is not applicable. However detailed disclosure on related party transactions as per IND AS-24 containing name of the related party and details of the transactions have been provided under financial statements.

The Company has formulated a Policy on Related Party Transactions which is also available on Company’s website at http://www.datamatics.com/investors/corporate-governance. The Policy intends to ensure that proper reporting, approval and disclosure processes are in place for all transactions between the Company and Related Parties.

Policies

The SEBI Listing Regulation mandated the formulation of certain policies for all Listed Companies. In compliance with the above requirement, all our policies are available on our website (http://www.datamatics.com/investors/corporate-governance). The policies are reviewed periodically by the Board and updated based on need and new compliance requirement.

In addition to its Code of Conduct, key policies that have been adopted by the Company are as follows:

Name of the Policy

Brief Description

Web Link

Whistleblower/Vigil Mechanism

The Company has formulated and adopted a Whistleblower Policy/Vigil Mechanism for its Directors and Employees to report concerns about unethical behavior, actual or suspected fraud or violation of Company’s Code of Conduct and ethics.

http://www.datamatics.com/sites/default/files/WhistleblowerPolicy.pdf

Corporate Social Responsibility (CSR) Policy

The Policy outlines the Company’s strategy for bringing about a transformation in the quality of life of people through social upliftment programs. The CSR vision of our Company is “Employability & Environment”.

http://www.datamatics.com/sites/default/files/CSR-Policy-DGSL-Final.pdf

Policy on Material Subsidiaries

The Policy is framed to determine Material subsidiaries of the Company and to provide governance framework for such subsidiaries of the Company.

http://www.datamatics.com/sites/default/files/Policy-on-Material-Subsidiaries.pdf

Related Party Transaction Policy

Related Party Transactions Policy is framed to ensure the proper approval and reporting of transactions between the Company and its related parties.

http://www.datamatics.com/sites/default/files/Related-Party-Transaction-Policy.pdf

Insider Trading Policy

The Policy provides the framework in dealing with the securities of the Company.

http://www.datamatics.com/sites/default/files/insider-tradina.Ddf

Policy for determination of Materiality of Events

The Policy is framed to provide an overall governance framework for determination of materiality of events / information and to ensure timely and adequate disclosures of material events / information fully, fairly, correctly and transparently to the concerned authorities.

http://www.datamatics.com/sites/default/files/Policy-on-determination-of-Materiality-of-Events.pdf

Document Retention and Archival Policy

The Policy is framed to outline the guidelines for retention and archival for corporate records / documents of the Company.

http://www.datamatics.com/sites/ default/files/Document-Retention-and-Archival-Policy. pdf

Internal Financial Controls

The Board has adopted policies and procedures for ensuring orderly and efficient conduct of its business, including adherence to the Company’s policies, safeguarding its assets, prevention and detection of frauds and errors, accuracy and completeness of the accounting records and timely preparation of reliable financial disclosures.

The Audit Committee is responsible for implementing and maintaining the internal control and periodically reviews the adequacy and effectiveness of the Company’s internal control environment and monitors the implementation of audit recommendations, including those relating to strengthening of the Company’s risk management policies and systems.

The Company has adopted accounting policies which are in accordance with Indian Accounting Standards (Ind AS) notified under the Companies (Indian Accounting Standards) Rules, 2015 read with Section 133 of Companies Act, 2013, (the ‘Act’) and other relevant provisions of the Act.

Risk Management Policy

Risk Management is embedded in Datamatics operating framework. The Company has a duly approved Risk Management Policy, which lays down broad guidelines for the appropriate authority to identify, assess, categorise and prioritise risks in a timely manner and formulate plans for mitigation of such risks.

The Internal Audit function is responsible for assisting the Management on an independent basis with a full status of the risk assessments and management. Operationally, management process to identify key risks across the organization and prioritise relevant action plans to mitigate these risks.

Corporate Social Responsibility (“CSR”)

The brief outline of the Corporate Social Responsibility (CSR) Policy of the Company and the initiatives undertaken by the Company during the financial year 2017-18 are annexed as “Annexure - C” to this Report in the format prescribed in the Companies (Corporate Social Responsibility Policy), Rules, 2014.

Composite Scheme of Arrangement

The Board of Directors have, at their meeting held on April 27, 2018, subject to obtaining the requisite approvals/consents, approved the Composite Scheme of Arrangement under Section 232 read with Section 230 and other applicable provisions of the Companies Act, 2013 and the rules made thereunder between Delta Infosolutions Private Limited, Datamatics Infotech Services Private Limited, Datamatics Global Services Limited and their respective shareholders

The Company has submitted the Composite scheme of Arrangement with BSE Limited and National Stock Exchange of India Limited for seeking their observations/no observation letter under Regulation 37 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Significant/Material orders passed by the Regulators

There are no significant/material orders passed by the Regulators or Courts or Tribunals impacting the going concern status of the Company and its operations in future.

Extract of Annual Return

Pursuant to Section 92 (3) of the Act and Rule 12 (1) of The Companies (Management and Administration) Rules, 2014, the extract of Annual Return in Form MGT - 9 is annexed as “Annexure - D”.

Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo

Details relating to conversation of energy, technology absorption and foreign exchange earnings and outgo as required under Section 134(3)(m) of the Act read with Rule 8(3) of the Companies (Accounts) Rules, 2014, are mentioned hereunder:

A. Conservation Of Energy:

i) Our Company being in IT & ITeS industry, our operations are not energy intensive. Adequate measures have been taken to conserve energy.

ii) The Company has not taken any steps for utilising alternate sources of energy.

iii) There were no additional capital investment on energy consumption equipments and proposals if any, being implemented for reduction of consumption of energy as the nature of the Company’s operations entails a very low level of energy consumption.

B. Technology Absorption:

i) Every effort is made by the Company to update the technological skills of its technical staff in order to ensure that they possess adequate skills to enable them to service the Company’s clients.

ii) The Company has not imported any technology during the year under review.

iii) The Company is predominantly a service provider and therefore has not set up a formal R&D unit. However, it continues to develop software tools and products in its existing delivery setup.

C. Foreign Exchange Earnings and Outgo:

Foreign Exchange Earned in terms of Actual Inflows : 2,216.17 million.

Foreign Exchange Outgo in terms of Actual Outflows : 232.93 million.

Acknowledgements

Your Directors’ place on record their deep appreciation to employees, customers, shareholders, vendors, bankers, financial institutions, Governments authorities and other stakeholders at all levels for their hard work, dedication and commitment. Our consistent growth was made possible by their hard work, solidarity, cooperation and support.

For and on behalf of the Board

Dr. Lalit S. Kanodia

Place : Mumbai Chairman

Date : May 29, 2018 DIN: 00008050

Director’s Report