On behalf of the Board of Directors, I am happy to present the 27th
Directors'' Report of your Company with the Balance Sheet and Profit &
Loss Account for the year ended March 31,2015.
Your Company''s financial performance for the year ended March 31,
2015 as compared to the previous financial year ended March 31,2014 is
Particulars (Rs in Million)
Income 8,347 7,411
Profit Before Interest, Depreciation & Tax 918 976
Interest 68 40
Profit Before Depreciation and Tax 850 936
Depreciation 210 161
Profit Before Tax 640 775
Provision for Taxation 155 194
Profit After Tax 485 581
Balance Brought Forward from Previous Year 901 586
Profit Available for Appropriation 1,332 1,073
Depreciation pursuant to the Transitional
Provisions as per Companies Act, 2013 25 -
Dividend 77 116
Tax on Dividend 15 20
Transfer to General Reserve 30 47
Balance Carried Forward 1,185 890
(Rs in Million)
Income 1,965 2,224
Profit Before Interest, Depreciation & Tax 426 566
Interest 51 16
Profit Before Depreciation and Tax 375 550
Depreciation 84 65
Profit Before Tax 291 485
Provission for Taxation 38 70
Profit Tax 253 415
Balance Brought Forward from Previous Year 1,242 948
Profit Available for Appropriation 1,495 1,362
Depreciation pursuant to the Transitional 18 -
Provisions as per Companies Act, 2013
Dividend 59 74
Tax on Dividend 8 5
Transfer to General Reserve 25 41
Balance Carried Forward 1,385 1,242
OVERVIEW OF COMPANY''S FINANCIAL PERFORMANCE
Your Company is a global IT and ITeS organization focused on delivering
proactive and smart, next-generation business solutions helping
enterprises across the world address their business challenges.
Datamatics has become the 2nd fastest growing IT & BPO Company listed
on the BSE Limited and National Stock Exchange of India Limited.
On a Consolidated basis, your Company achieved a total revenue of Rs.
8,347 million as compared to Rs. 7,411 million in the previous year at a
growth rate of 12.62%. The profit after tax for the current year was Rs.
485 million as against Rs. 581 million in the previous year.
The total revenue on a standalone basis is Rs. 1,965 million as compared
to Rs. 2,224 million in the previous year. The profit after tax for the
current year was Rs. 253 million as against Rs. 415 million in the previous
year. This was partly due to your Company hiving off its publishing BPO
business into a subsidiary which was subsequently merged into PreMedia
Global Private Limited, Chennai to form Lumina Datamatics Limited.
Credit Rating Information Services of India Limited (CRISIL),
a subsidiary of S&P, has reaffirmed A1 credit rating for 3rd
year in succession on the total bank loan facilities of the Company.
This rating signifies that your Company has a strong degree of safety
regarding timely payment of financial obligations. This rating
reaffirms the financial stability and the low risk profile of the
During the year, your Board of Directors had declared and paid an
interim dividend of Rs. 0.35 per equity share (7%).
In addition to the interim dividend and based on the Company''s
performance, your Directors are pleased to recommend for approval of
members, a final dividend of Rs. 0.65 per equity share (13%) for
Financial Year 2014-15. The total dividend for the Financial Year
2014-15 amounts to Rs. 1 per equity share (20%) of face value of Rs. 5
TRANSFER TO RESERVES
The Company has transferred Rs. 30 million to the General Reserve from
the amounts available for appropriation. An amount of Rs. 1,185 million
is proposed to be retained in the Profit and Loss Account.
TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCTION AND PROTECTION FUND
In terms of Section 125 of the Companies Act, 2013, any unclaimed or
unpaid Dividend relating to the financial year 2007-08 is due for
transfer on October 28, 2015 to the Investor Education and Protection
Fund established by the Central Government.
ACCEPTANCE OF FIXED DEPOSITS
The Company has not accepted any fixed deposits during the year.
The Company has the following Indian subsidiaries (including the step
down subsidiaries) as on March 31,2015:
1. Datamatics Software Services Limited
2. Cybercom Datamatics Information Solutions Limited
3. Lumina Datamatics Limited
4. CIGNEX Datamatics Technologies Limited
5. Datamatics Vista Info Systems Limited
The Company has the following overseas subsidiaries (including the step
down subsidiaries) as on March 31,2015:
1. Datamatics Global Services, Inc. (US)
2. Datamatics Global Services GmbH (Germany)
3. Datamatics Global Technologies GmbH (Germany) *
4. Datamatics Global Solutions GmbH (Germany)
5. Datamatics Global Services GmbH d.o.o. in Bosnia (Switzerland)
6. Datamatics Technologies UK Limited (UK)
7. Datamatics Infotech Limited (UK)
8. Datamatics Global Services Pty Limited (Australia)
9. Datamatics Global Technologies Limited (Mauritius)
10. Datamatics Global Holding Corporation (BVI) @
11. Datamatics Global Technologies AG (Switzerland) #
12. Datamatics Global Services FZ-LLC (Dubai)
13. Lumina Datamatics Inc. (US)
14. Lumina Datamatics GmbH (Germany)
15. CIGNEX Datamatics Corporation (BVI)
16. CIGNEX Datamatics, Inc. (US)
17. CIGNEX Datamatics, Inc. (Michigan) $
18. CIGNEX Datamatics GmbH (Germany) $$
19. CIGNEX Datamatics Pte. Limited (Singapore)
* In the process of winding-up.
@ Dissolved and struck off from the Register of Companies, BVI w.e.f.
March 23, 2015.
# In the process of liquidation.
$ Incorporated in the Michigan during the year.
$$ Incorporated in Germany during the year.
During the year, the Board of Directors reviewed the performance and
financial position of the subsidiaries. Pursuant to the provisions of
Section 136 of the Companies Act, 2013 the financial statements of the
Company including consolidated financial statements along with the
relevant documents and separate audited financial statements in respect
of subsidiaries are available on the website of the Company. A
statement containing salient features of the financial statements of
the Company''s subsidiaries in Form AOC-1 is annexed to the
financial statements of the Company.
DATAMATICS'' DELIVERY CENTRES IN TIER II CITIES
Tier II cities are the most favored destination of highly cost-
sensitive BPO service providers. As a business strategy, major BPO
players have been moving to and expanding their operations in Tier II
cities. Datamatics was early to realize this business imperativeness
and set up its first Tier II delivery centre at Nashik during July 2007
followed by the Puducherry site in October 2011. These initiatives have
helped the Company leverage on the vast untapped talent pool at these
locations as compared with Tier I cities while simultaneously keeping
the attrition within manageable limits.
After its successful foray into the publishing business at Puducherry,
the site is now home for one more BPO service line viz. Document
Management Solutions. From a value creation perspective, the site is a
cost-effective location. Our headcount at the Centre is more than 448
After successfully executing all our BPO service lines, the site is
currently gearing up to tap the IT talent potential of Nashik.
Datamatics is among the top 10 Employers at Nashik. The Company has
been set up to employ locals in IT & BPO sector. The 55,000 sq. ft.
state-of-the-art-facility is the single largest
facility which accommodates 1,232 employees. The guest house is located
in close proximity to the office.
The Company owns approximately 12 acres of land situated on the
Bombay-Agra Highway (NH-3), about 10 kms away from our existing office.
The Company intends to build a campus in the future.
In addition to its primary role as the Delivery Centre of Excellence,
both these sites are also functioning as Business Continuity Centre to
support all other delivery units of the Company. The success of
business operations at the above two Tier II sites enables the Company
to stay ahead of competition and provides impetus to the Company''s
focus on such strategic initiatives.
FUTURE GROWTH STRATEGY
The Company made significant progress in the last fiscal year in key
accounts, owing to efficient execution of projects. In the current
fiscal year, we plan to continue to maintain focus on select verticals
which include BFSI, eRetail, International Organizations,
Manufacturing, Publishing and Transport. We will continue to offer IT &
BPO offerings and also the new age disruptive technologies which
include SMAC and BPM offerings, to deliver next generation solutions to
our global customers, using Open Source platforms as well as
To capitalize on the new growth opportunity that is being created by
the disruptive digital trend, we are focusing on select few areas and
have made disciplined investments in these growth areas, which include:
Consulting & Advisory Practice
This year we have institutionalized our Consulting & Advisory practice.
The focus of this practice is twofold. First, to help clients establish
their Technology, Business Process Management (BPM), and Digital
Transformation Strategy, which covers areas like Mobility, Analytics,
Cloud, and Enterprise Content Management. The second is to facilitate
Datamatics in moving up the value chain and provide higher value added
services and function as a strategic partner to the clients.
Our strategic focus during the last 18 months to invest in the upcoming
technological advancements have positioned us well to capture the new
growth opportunities in the Digital Transformation space. Today,
Datamatics team is well placed to help its clients to transform into a
truly digital, data-driven enterprise and empower them to take
advantage of the digital revolution to innovate, differentiate and
grow. Datamatics team can help its clients to formulate their Digital
Strategy; define their mobile strategy; create solutions for their
customers and their employees that provide access to applications from
anywhere on any device.
Underlying every business insight is data and this data is growing
exponentially. This is forcing enterprises to integrate new
technologies and find new ways to use data and insights as a
competitive advantage. Datamatics team has the expertise and experience
to walk its clients through their Data-to- Intelligence journey; from
Data Capture & Collation to Data Management, Data Cleansing & Migration
to Analytics and extracting Intelligence from Enterprise Data,
including analysing of unstructured data. And this would differentiate
us from other IT service providers.
It would not be an exaggeration to claim that Quality is a way of life
in our Company. Our Company believes in the very philosophy that
quality encompasses and permeates every action and thought process.
This year our strategic theme has been Delivery as per Commitment and
Quality of Solutions. In this wake, several initiatives have been
rolled out to transform the way we look at our customer and execute our
projects. Winning accolades and awards for the quality of our
deliverables has almost become a habit. We have been continuously
winning best quality and service awards at events organized by our
various prestigious Fortune 500 customers. This year too we won several
Your 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. Your Company also won the prestigious IMC IT Award
for Quality in January, 2014. Further significant initiatives of
your Company towards quality are:
1) Lean Six Sigma Initiative
Leveraging the proven, effective and recognized Lean Six Sigma
continues to be one of the key strategies to bring in exponential
improvements in efficiencies, productivity and customer delight. This
initiative continues to deliver significant benefits to the Company
with improvements in Productivity, Efficiency, Quality and Customer
Satisfaction. Over 320 Lean Six Sigma Projects and 1600 Kaizen
Projects have been completed since the launch of this initiative in
2007. For the past consecutive four years, our improvement projects
have been ranked within the top 5 projects out of around 80 projects
from multiple industries and organizations in QIMPRO Conventions.
In the last financial year, an overall benefit that includes tangible
and intangible benefits, of Rs. 15 million with an ROI of more than 200%
was achieved through these performance improvement methodologies.
The Company has about 18 Six Sigma Green Belt and 25 Six Sigma White
Belt certified professionals along with 3 Six Sigma Black Belt and 1
Six Sigma Master Black Belt certified professionals. The Company spent
over 4500 person hours of training around continuous improvement in the
last financial year.
Your Company, keeping true to its commitment of designing and
implementing its Quality Management Systems as per the global standards
and benchmarks has been assessed and certified on standards such as ISO
9001:2008, SEI - CMMI Version 1.3, and ITIL. New centers that we added
last year have also been assessed and certified for compliance to these
standards. This year we are also in the process of upgrading the
SEI-CMMi certification to level 5.
As you are aware, the thrust and demands on information security is
increasingly becoming stricter. In line with the demands as well as our
own analysis of the information security landscape, we continue to lay
great emphasis on the Information Security Management Systems (ISMS).
Last year, we not only retained the ISO 27001:2005 certification for
our ISMS, but also brought all our centers under the purview of the
information security management. We have further strengthened our ISMS
by incorporating the guidelines of and getting assessed and certified
for international standards such as SSAE 16 and HIPAA.
3) Customer Satisfaction Tracking
Last year, we conducted a comprehensive branding survey among our
customers as to assess their priorities and their perceptions about the
Company against these priorities. We are happy to share with you that
there is no jarring incongruence between the two. However, as an
organizational improvement initiative, we have identified, as shared
earlier, delivery as per commitment and quality of solutions.
The Customer Satisfaction and Loyalty index measuring process continues
to provide invaluable insights into our customer''s expectations and
our performance vis-a-vis these expectations. This is done once every
six months and captures customer''s feedback on a wide range of
parameters that encompass each aspect of service excellence. We feel
proud to share with you that overall our Customer Satisfaction Index
has been 4.73 on a scale of 1-6 (1 being the lowest and 6 being the
highest) with a significant number of customers rating us a perfect 6/6
on all the parameters. Over 25 key customers have rated perfect 6/6 on
the organization improvement theme of Delivery as per commitment and
quality of solutions. In addition to this formal mechanism, we also
have systems that capture customer feedback received through other
formal and informal channels. The results of these also show an
4) Metrics and Process Compliance Index
We use a Delivery Index to measure and compare the performance for each
Line of Business (LOB). It incorporates the three key indicators of
performance of any project viz Quality, Effort and Schedule adherence
and a stop light (red-amber-green) dashboard is used to display the
In addition, regular process compliance checkups and speedy follow-ups
on the corrective and preventive actions have helped us significantly
to keep non-compliances in check and thereby reduce rework and defects
at the source. Process Compliance Index (PCI) measures and compares the
compliance levels for the different LOBs. The PCI are well above the
The defined quality gates ensure that we are adhering to process
requirements and deliverables at each of the critical stages of the
project. A regular review of this with Senior Management ensures that
the processes are on track.
In order to create processes at par with global best practices, we have
also tied up with a number of global forums such as ISBSG, CSI and PMI
to understand and benchmark ourselves against key metrics.
We have also introduced advanced statistical tools and analysis and
simulation techniques to improve our ability to predict the performance
of the projects and thereby take proactive steps and measures to
improve the performance.
PROCESS ENGINEERING (PE) CELL
The PE cell of our Company is given the mandate of process improvement
and development of innovative IP solutions. These solutions are used
for its BPO service offerings as well as for providing the same to our
clients to use it in their own offices.
The PE Cell had a good year since some of the solutions based in i-Q
and i-Bridge (earlier Robokey) got a very favorable response from BFSI
sector. The solutions devised for trade finance operations and tab
based KYC compliance for Banks were adopted by a leading private sector
Bank of India. With their reference many other banks are following
PE Cell also developed an intelligent auto-classification solution for
its large e-retail clients and this software called ClassyFire is
getting a very good response for all our clients.
These solutions are enabling our clients to make their process
paperless and carry out their transactions swiftly, improve accuracy
and lower these efforts. Some of our clients won recognition and awards
for these solutions including the Information Week Edge Award by two of
We are creating an R&D team at our Nashik office to accelerate this
product development further, derive additional benefits and provide
more business for the Company.
INTELLECTUAL PROPERTY RIGHTS
Your Company is leading towards innovation in tools, products and
platform, resulting in more intellectual property rights being created.
It has always invested in building a core intellectual property that is
offered to our clients through our products and innovative solutions.
Our policy is to protect our competitive position, among other methods,
by filing Indian and international intellectual property applications
to protect the identity and recognition of our Company and to protect
the technology and improvements that we consider important to the
development of our business.
Your Company currently has 17 copyrights registered till date for its
proprietary processes and various logos. It has also registered 36
proprietary logos as Trade Mark and Service Mark in India, UK, USA,
Australia, China, Norway, Switzerland, EU and its 28 member countries.
During the fiscal year 2015, your Company''s subsidiary Lumina
Datamatics Limited has filed two (2) trademark applications for logo
Lumina Datamatics and tagline Lumina Datamatics We Manage
Knowledge in the United States Patent and Trademark Office (USPTO),
Indian Registrar of Trademarks Office and European Union (EU) Community
Trademark Office. The logo Lumina Datamatics and tagline
Lumina Datamatics We Manage Knowledge has been successfully
registered in the EU and its 28 member countries.
LEARNING & DEVELOPMENT (L&D)
L&D at Datamatics successfully conducted the following during FY
The Eagles@Datamatics Program Phase VII was flagged off in April 2014,
with 36 Eagles & 23 Game Changers. This team was mentored by 6 senior
members and a strong leadership team. The duration of the program was
7 months. The objective of Eagles VII team was to enhance footprints
within existing clients with the help of Game Changers. This helped the
organization in creating passion and zest among all the team members.
The team members explored and enhanced their creativity,
resourcefulness, bonding, accountability, influencing skills and belief
in themselves. This phase of the Eagles was regarded as the most
successful program as it helped the organization generate the
additional revenue of Rs. 23 crores and a healthy pipeline of app.Rs. 53
1) Blended Learning
Training via the WebEx Training tool: The L&D team has expanded their
horizons for training execution to be done via WebEx for employees
across the organization. With the help of the tool L&D is able to
address the global learning audience with ease and also large audiences
effectively. This helps the L&D teams to execute training and
participants to participate in training from any location. It''s a
win-win situation for all the parties involved. The L&D team
records the training for future usage and executes the pre- recorded
training via WebEx. Recorded WebEx training is made available to
employees as and when they feel the need to revisit any training in
case they have missed this during the live session. This has imbibed a
continuous learning attitude amongst the employees.
2) Learning Foreign Languages
L&D team supported to create a new language skill set on both Italian &
German language - Level 1. The employees were trained and all of them
successfully completed the Level 1 certification.
3) Project Management Preparatory Course (PMP) - 5th Edition
Being a Registered Education Provider for PMP, a 5-day PMP training was
scheduled in Mumbai, MIDC premises for those engaged in an activity
that contributes to the management of a project, portfolio, or program,
as part of the project management profession.
With all the above, the L&D team has clocked 240,337 man-hours in the
year 2014-2015 as compared with 210,515 man-hours in the year 2013-2014
with an average feedback of 4 out of 5.
HUMAN RESOURCES MANAGEMENT (HRM) AND EMPLOYEE RELATIONS
The IT business is chiefly talent-based and a people driven business.
Employees therefore, play an indispensable and significant role in the
success of the Company, and are the key assets of the Company. Hence,
we precisely term them as ''Human Capital''. Our Company''s
endeavour is to create a work environment that imbibes a positive
attitude for excellent performance. The key areas of the Company''s
HRM strategy include a comprehensive approach to managing people, the
workplace culture and environment.
Managing a strong employer and employee relationship leads to the
ultimate success of an organisation. A strong relationship at any work
centre will lead to more qualitative & efficient productivity, generate
cohesion among the employees and create a smooth functional
The HR department of the Company regularly conducts the following
Climate Survey and Open House to ensure that employees views
and opinions are taken on board, as well as the Company''s larger
strategy is discussed and shared with them. Both these initiatives have
HR Head, CEO and leadership teams of each LOB to bring a shared
understanding of the larger organizational direction.
New Entrant Observation (NEO): It is a session conducted by HR for new
entries after they complete 30 days to get their feedback.
Client site visit: To establish connect, to address various issues, and
for continuous to & fro performance related information exchange with
our employees based at different client locations.
Saarathi: With a view to ensure smooth integration of new entries into
the processes, systems and work culture Buddy System which is
known as SAARATHI has been introduced. Saarathis is the Point of
contact, friend and guide for the new joinee during initial days within
the organization. A Saarathi card is given to Saarathi during Euphoria.
Euphoria-Monthly Departmental Meet: A monthly meeting is conducted by
the HR, offering the team an opportunity to interact with each other,
come together and celebrate.
Our Company has rich diversity in its employees with a common aim to
excel. A culture of cooperation 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 help to unleash their
creativity, maintain a balance between work & life and create a deep
sense of bonding among employees.
REWARDS AND RECOGNITION
Rewards & Recognition programs aren''t just about making employees
feel good, though that''s a crucial part of the process. These
programs can help to boost up employee morale & productivity and
induces improvement in performance level. Therefore, continuous
scaling exercises are carried out to identify the outstanding performer
and rightly reward and recognize such individuals and teams.
Annual Awards: Datamatics believes in the need to recognize top
performers and thank them for their hard work and commitment shown
throughout the year. This is done in a high profile large scale
ceremony held companywide wherein all the employees are invited. There
are various categories of awards such as merit, excellence to
leadership awards catering to each area of the business.
Instant Performance Recognition (EoM & Spot Award):
The objective is to encourage high performers by conferring the instant
awards. The aim is to instantly recognize significant achievement,
excellence in performance and special contributions by individuals and
teams. There are 3 kinds of spot awards: a). Spot Individual; b) Spot
Team; c) Employee of the month.
Rendezvous: Coffee with the Line of Business Heads (LoBH): Instant
Award winner are invited to have coffee with the
LoBH. Personal notes are inscribed on the NOTEivate cards by the LoBH
are presented to all the awardees.
Praise for Performance: This program aims to recognize the hard working
employees who have received client appreciation. It aims to recognize
the efforts of employees in front of a larger audience to induce a
sense of pride and contentment.
iAppreciate: These cards are awarded by the Reporting Manager to
appreciate their team members at right time for good work and efforts.
Employee Relations & Engagement has become a top business priority in
this rapid-cycle economy. HR knows that having a high-performing
workforce is essential for growth and survival. They recognize that a
highly engaged workforce can increase innovation, productivity, and
bottom-line performance. Additionally, HR grossly performs to workout
in selecting the outstanding performers for the work centres spread out
widely. Thus, the pillars of success of the Company are delineated
clearly to obtain future directions towards progress & architect
definite shape to remain as competitive player in the global market.
AWARDS & ACHIEVEMENTS
During the year, in recognition of its performance and initiatives, the
Company received several awards, some of which are:
- Datamatics was awarded the ''Fastest Growing Indian Company
Excellence Award - 2014'' at the 6th International Achievers Summit &
Awards ceremony on ''Global Corporate Achievements & Social
Responsibilities'' held in Bangkok;
- Datamatics was voted India''s most Respected Software Company in
Corporate Governance at the 5th Annual India Leadership Conclave &
Indian Affairs Business Leadership Award;
- Datamatics entered the Leader Category for the 2014 IAOP Global
- Datamatics was awarded for ''Excellence in Quality'' at IMC - IT
- Datamatics won the ''Global Quality Challenge Award'' by United
Healthcare at their Semi-Annual UHC Operations Global Quality Challenge
for the seventh time in a row;
- Won the ''Information Week Edge Award'' for providing cutting
edge DMS solution for MMRDA;
- Won the ''Information Week Edge Award'' for process improvement
project for a leading private Insurance company;
- Datamatics won the ''Technology Partner for Global Transit Revenue
Systems award'' at the 4th Annual Metro Rail India Summit;
- Datamatics won the coveted ''Global Achievers Award'' for
Business Excellence at the 75th International Achievers Conference;
- Datamatics made it to the Technology Fast 500TM ranking by Deloitte
- a list that recognizes the fastest growing companies in Asia-Pacific;
- Dr. Lalit Kanodia, Chairman & Whole time Director received the
prestigious ''Asia Pacific Entrepreneurship Award'' under the Special
- Mr. Rahul Kanodia, Vice Chairman & CEO, was felicitated with ''CEO
of the Year'' award at the Asian Leadership Awards held in Dubai;
- Mr. Rahul Kanodia, Vice Chairman & CEO was presented with the ''IT
Leadership Award'' at the National Awards For IT Excellence.
As on March 31,2015, the Paid-up Share Capital of the Company is ''
294,746,685/- divided into 58,949,337 equity shares of '' 5/- each fully
paid up. During the year, there has been no change in the Share Capital
of the Company.
BOARD OF DIRECTORS AND KEY MANAGERIAL PERSONNEL
Retirement by rotation
In accordance with the provisions of the Companies Act, 2013
(Act) and the Articles of Association of the Company, Mrs. Asha L
Kanodia and Mr. Rahul L. Kanodia, retires by rotation at the ensuing
Annual General Meeting and being eligible offer themselves for
Resignation of Independent Director
Mr. Dileep C. Choksi resigned from the position of directorship of the
Company with effect from April 2, 2015 due to his other commitments and
pre-occupation. The Board placed its sincere appreciation for his
valuable contribution during his tenure as a director of the Company.
Pursuant to the provisions of Section 161(1) of the Act and the
Articles of Association of the Company, Mr. Vinay Aggarwal was
appointed as an Additional Director designated as Non- Executive
Independent Director with effect from May 27, 2015 and he shall hold
office up to the date of ensuing Annual General Meeting. The Company
has received requisite notice in writing from a member proposing
appointment of Mr. Vinay Aggarwal as a Director of the Company. As per
the provisions of the Act, Independent Directors are required to be
appointed for a term of five consecutive years, but shall be eligible
for re-appointment on passing of a special resolution by the Company
and shall not be liable to retire by rotation.
The Company has received declarations from all Independent Directors of
the Company confirming that they meet the criteria of independence as
prescribed both under the Act and Clause 49 of the Listing Agreement
entered with the Stock Exchanges.
Re-appointment of Dr. Lalit S. Kanodia, Chairman & Whole Time Director
Dr. Lalit S. Kanodia was appointed as a Chairman & Whole Time Director
of the Company for a period of five years with effect from May 15,
2010. On the recommendation of the Nomination & Remuneration Committee,
the Board of Directors at its meeting held on May 27, 2015, has
re-appointed Dr. Lalit S. Kanodia as a Chairman & Whole Time Director
of the Company for a further period of five years with effect from May
15, 2015, subject to the approval of the members.
POLICY ON DIRECTOR''S APPOINTMENT AND REMUNERATION AND OTHER DETAILS
In accordance with Section 178 and other applicable provisions if any,
of the Companies Act, 2013 read with the Rules issued thereunder and
Clause 49 of the Listing Agreement, as amended from time to time, the
Board of Directors at their meeting held on August 12, 2014 formulated
the Remuneration Policy of your Company on the basis of recommendations
of the Nomination and Remuneration Committee. The policy on
Director''s appointment and remuneration including criteria for
determining qualifications, positive attributes, independence of
Director, and also remuneration for Key Managerial Personnel and other
employees, forms part of Corporate Governance Report of this Annual
PARTICULARS OF EMPLOYEES
Disclosures with respect to the remuneration of Directors and employees
as required under Section 197 of Companies Act, 2013 read with Rule
5(1) Companies (Appointment and Remuneration of Managerial Personnel)
Rules, 2014 are annexed as Annexure - A to this Report.
A statement containing names of every employee employed throughout the
financial year and in receipt of remuneration of Rs. 60 Lakh or more, or
employed part of the year and in receipt of Rs. 5 Lakh or more a month,
under Rule 5(2) of the Companies (Appointment and Remuneration of
Managerial Personnel) Rules, 2014, is annexed as Annexure - A to
Details of employees remuneration as required under provisions of
Section 197 of the Companies Act, 2013 and Rule 5 of Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014 are
available at the Registered Office of the Company during working hours
before 21 days of the Annual General Meeting and shall be made
available to any shareholder on request. The full annual report
information required under Rule 5 is being sent electronically to all
those members who have registered their email addresses and such
details are also available on your Company''s website:
MEETINGS OF THE BOARD
Five meetings of the Board of Directors were held during the year. For
further details of the meetings of the Board, please refer to the
Corporate Governance Report, which forms part of this Annual Report.
BOARD AND COMMITTEE EVALUATION
Clause 49 of the Listing Agreement mandates that the Board shall
monitor and review the Board evaluation framework. The Companies Act,
2013 (Act) states that a formal annual evaluation needs to be
made by the Board of its own performance and that of its committees and
individual directors. Schedule IV of the Act states that the
performance evaluation of independent directors shall be done by the
entire Board of Directors, excluding the director being evaluated. The
Board of Directors has carried out an annual evaluation of its own
performance, Board Committees and individual directors pursuant to the
Act and the corporate governance requirements as prescribed by SEBI
under Clause 49 of the Listing Agreement.
The performance of the Board was evaluated by the Board after seeking
inputs from all the directors on the basis of the criteria such as the
Board composition and structure, effectiveness of board processes,
information and functioning, etc. The performance of the committees was
evaluated by the Board after seeking inputs from the committee members
on the basis of the criteria such as the composition of committees,
effectiveness of committee meetings, etc.
The Board and the Nomination and Remuneration Committee reviewed the
performance of the individual directors on the basis of the criteria
such as the contribution of the individual director to the Board and
committee meetings like meaningful and constructive contribution and
inputs in meetings, etc. In addition, the Chairman was also evaluated
on the key aspects of his role.
In a separate meeting of independent Directors, performance of
non-independent directors, performance of the board as a whole and
performance of the Chairman was evaluated, taking into account the
views of executive directors and non-executive directors.
DIRECTORS'' RESPONSIBILITY STATEMENT
Pursuant to Section 134(5) of the Companies Act, 2013, 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
31,2015, 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''
(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.
The Statutory Auditors, M/s. Kanu Doshi Associates, Chartered
Accountants, Mumbai, hold office until the conclusion of the
forthcoming Annual General Meeting and have confirmed their eligibility
and willingness to accept the office of the Statutory Auditors, if
reappointed. The Company has received a certificate from the above
Auditors to the effect that if they are reappointed, it would be in
accordance with the provisions of Section 141 of the Companies Act,
Pursuant to the provisions of Section 204 of the Companies Act, 2013
(Act)and the Companies (Appointment & Remuneration of Managerial
Personnel) Rules, 2014, the Company with the approval of the Board,
appointed Mr. Tushar Shridharani, Practicing Company Secretary, to
undertake the secretarial audit for the financial year ended March 31,
2014. Mr. Tushar Shridharani has submitted the Report confirming
compliance with the applicable provisions of the Act and other rules
and regulations issued by SEBI/other regulatory authorities for
corporate law. The Secretarial Audit Report for the financial year
ended March 31, 2015 is annexed as Annexure - B to this Report.
INFORMATION ON AUDITORS'' OBSERVATIONS
1) Statutory Auditors:
Observations of Auditors mentioned in the Independent Auditors Report
under the heading ''Emphasis of Matter'' regarding non-provisioning
for diminution in the value of investments in the subsidiaries has been
adequately explained in Notes to Accounts. These investments are for
long term and of strategic nature. It is clarified that though the net
worth of these subsidiaries has declined, the management is confident
of turning around these subsidiaries in the near future. Hence, it is
decided not to make any provision for diminution in the value of
investments made in the subsidiaries. The other observations are
self-explanatory and do not require further comments in this report.
2) Secretarial Auditor:
There were no qualifications, reservations or adverse remarks made by
the Secretarial Auditors in their report.
A Report on Corporate Governance together with a certificate from the
Statutory Auditors of the Company forms part of the Annual Report.
MANAGEMENT DISCUSSION AND ANALYSIS
The Management Discussion and Analysis forms an integral part of this
Report and gives detail of the overview of the industry, overview of
the business, outlook, internal controls systems and their adequacy,
risk and concerns and discussion on financial performance during the
COMPOSITION OF THE COMMITTEES OF THE BOARD
The Audit Committee consists of the following members: Mr. R. K.
Saraswat, Chairman; Mr. Sudhir Deshpande, Member and Mr. Shahzaad
Nomination & Remuneration Committee
The Nomination and Remuneration Committee consists of the following
members: Mr. Sudhir Deshpande, Chairman; Mr. R. K. Saraswat, Member
and Dr. Lalit S. Kanodia, Member
Stakeholders Relationship Committee
The Stakeholders Relationship Committee consists of the following
members: Mr. R. K. Saraswat, Chairman and Mr. Sudhir Deshpande, Member.
Corporate Social Responsibility Committee
The Corporate Social Responsibility Committee consists of the following
members: Mr. Rahul L. Kanodia, Chairman; Mr. R. K. Saraswat, Member;
Mr. Vidur V. Bhogilal, Member and Mr. Sameer L. Kanodia, Member.
EMPLOYEE STOCK OPTION PLANS
Details of the shares issued under Employee Stock Option Plan (ESOP),
as also the disclosures in compliance with Section 62 of Companies Act,
2013 and Rule 12 of Companies (Share Capital and Debentures) Rules,
2014 and SEBI (Share Based Employee Benefits) Regulations, 2014 and
SEBI (Employees Stock Option Scheme and Employees Stock Purchase
Scheme) Guidelines, 1999 are annexed as Annexure - C to this
PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS
Loans, guarantees and investments covered under Section 186 of the
Companies Act, 2013 form part of the notes to the standalone financial
statements provided in this Annual Report.
CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES
In line with the requirements of the Companies Act, 2013 and the
Listing Agreement, your 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
All contracts / arrangements / transactions entered by the Company
during the financial year with related parties were in the ordinary
course of business and on an arm''s length basis. No Material Related
Party Transactions were entered during the year by your Company.
Accordingly, the disclosure of Related Party Transactions as required
under Section 134(3) (h) of the Companies Act, 2013 in Form AOC-2 is
not applicable. Your Directors draw attention of the members to Notes
to accounts of the financial statement which sets out related party
INTERNAL FINANCIAL CONTROL SYSTEMS RELATED TO FINANCIAL STATEMENTS
The Company''s internal control systems are commensurate with the
nature of its business and the size and complexity of operations. The
Audit Committee reviews 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. Your Company has
adopted accounting policies which are in line with the Accounting
Standards prescribed in the Companies (Accounting Standards) Rules,
2006 that continue to apply under Section 133 and other applicable
provisions, if any, of the Companies Act, 2013 read with Rule 7 of the
Companies (Accounts) Rules, 2014 and relevant provisions of the
Companies Act, 1956, to the extent applicable. These are in accordance
with Generally Accepted
Accounting Principles in India. Changes in policies, if any, are
approved by the Audit Committee in consultation with the Auditors.
The policies to ensure uniform accounting treatment are prescribed to
the subsidiaries of your Company. The accounts of the subsidiary
companies are audited and certified by their respective Auditors for
Your Company operates in SAP, an ERP system, and has many of its
accounting records stored in an electronic form and backed up
periodically. The ERP system is configured to ensure that all
transactions are integrated seamlessly with the underlying books of
account. Your Company has automated processes to ensure accurate and
timely updation of data in the underlying ERP system.
The Management periodically reviews the financial performance of your
Company and takes necessary action, wherever necessary.
The Company is committed to adhere to the highest standards of loyalty,
honesty, integrity, transparency and conduct of business operations in
an ethical manner. In compliance with Companies Act, 2013 (Act),
rules framed thereunder and the Listing Agreement entered with Stock
Exchanges and principles of good corporate governance, the Audit
Committee of the Company is committed to adopting procedures to receive
and address any concern or complaint regarding accounting or auditing
matters, internal accounting controls, reporting of fraudulent
financial information or any other company matters involving fraud,
employee misconduct, illegality or health and safety and environmental
issues which cannot be resolved through normal management channels.
Accordingly, the Board of Directors have formulated a Whistleblower
Policy/Vigil Mechanism in compliance with the provisions of Section
177(10) of the Act and Clause 49 of the Listing Agreement and is also
available on the Company''s website http://www.datamatics.
com/investors/corporate-governance. This Policy provides for a
framework and process whereby concerns can be raised by its employees
against any kind of discrimination, harassment, victimization or any
other unfair practice being adopted against them. The Company has also
provided direct access to the Chairman of the Audit Committee on
reporting issues concerning the interests of employees and the Company.
Your Company has a well defined, robust and effective Information
Security and Risk mitigation system. The information security
management system based on international standard ISO 27001 addresses
all concerns and apprehensions towards handling information that is
sensitive and confidential effectively. The risk mitigation system
ensures that all potential risks
associated with business, processes and infrastructure are within
control. Business Continuity Plan (BCP) and Disaster Recovery (DR)
plans are integral plans of the project plans and they are periodically
audited as per predefined schedule to ensure the readiness and
effectiveness with minimal impact on the business as usual. BCP also
ensures that the organization is well prepared for risks related to
hardware, software, infrastructure and people. The applicability and
effectiveness BCP and DR are also regularly reviewed during Management
Information Security Forum (MISF) that takes place once in every
Risk management is controlled by the Risk Management Policy. In line
with the requirements of the Companies Act, 2013 and the Listing
Agreement, the Board of Directors has approved the Risk Management
Policy to monitor the risks and their mitigating actions. There are
some of the risks which may pose challenges are set out in the
Management Discussion and Analysis which forms part of this Report.
CORPORATE SOCIAL RESPONSIBILITY
The brief outline of the Corporate Social Responsibility (CSR) Policy
of the Company and the initiatives undertaken by the Company during the
financial year 2014-15 are annexed as Annexure - D to this Report
in the format prescribed in the Companies (Corporate Social
Responsibility Policy), Rules, 2014.
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 your Company
and its operations in future.
EXTRACT OF ANNUAL RETURN
Extract of Annual Return of the Company is annexed as Annexure - E to
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE
EARNINGS AND OUTGO
The information required in connection with conservation of energy,
technology absorption and foreign exchange earnings and outgo, under
Section 134(3)(m) of the Companies Act, 2013 read with Rule 8(3) of the
Companies (Accounts) Rules, 2014, the Directors furnish herein below
the required information:
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
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 your 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) Your Company has not imported any technology during the year under
iii) Your 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.
For and on behalf of the Board
Dr. Lalit S. Kanodia
Place : Mumbai
Date : May 27, 2015