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Zensar Technologies

BSE: 504067|NSE: ZENSARTECH|ISIN: INE520A01027|SECTOR: Computers - Software
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Directors Report Year End : Mar '17    Mar 16

Dear Members,

The Directors are pleased to present their 541h Annual Report together with the Audited Financial Statements, Directors Report and Annexures for the year ended 31s1 March, 2017.

FINANCIAL SUMMARY:

The Financial summary is as under:

Standalone (Rs. Crores)

Year ended

Year ended

31st

March, 2017

31s''

March, 2016

Income from operations

1,282.82

1,245.28

Miscellaneous Income

11.68

52.74

Total

1,294.50

1,298.02

Profit Before Taxation

252.98

324.27

Profit After Taxation

180.22

238.22

Proposed Dividend

31.41

-

Transfer to General Reserves

100

140

Consolidated

(Rs. Crores)

Year ended

Year ended

31st

March, 2017

31s''

March, 2016

Income from operations

3,060.38

2,951.87

Miscellaneous Income

19.27

53.84

Total

3,079.65

3,005.71

Profit Before Taxation

348.62

416.87

Profit After Taxation

238.37

292.30

In the preparation of financial statements, no treatment different from that prescribed in an Indian Accounting Standard (Ind AS) has been followed.

On standalone basis, during the financial year 2016-17, your Company recorded total income of Rs. 1,294.50 Crore comprising Income from Software Development and Allied Services of Rs. 1,282.82 Crore, and other income of Rs. 11.68 Crore. The Company recorded a net profit of Rs.180.22 Crore reflecting a decrease of 24.3%.

On consolidated basis, your Company has maintained growth with Total income of Rs. 3,079.65 Crore comprising Income from Software Development and Allied Services of Rs. 3,060.38 Crore and other income of Rs.19.27 Crore. The Consolidated Net profit was Rs.238.37 Crore reflecting a decrease of 18.4%.

BUSINESS UPDATE AND STATE OF COMPANY''S AFFAIRS

The global IT landscape is in the midst of highly disruptive technology trends driving widespread digital adoption. Digital has taken center-stage, as global enterprises get prepared for Machine Learning, Blockchain, Gaming, Artificial Intelligence, and Robotics towards transforming their business. There is increased investment in research and development efforts to leverage the benefits offered by the combination of cognitive and emerging areas across digital.

According to Gartner*, ''Digital technology platforms are the building blocks for a digital business and are necessary to break into digital. Every organization will have some mix of five digital technology platforms: Information Systems, Customer Experience, Analytics and Intelligence, The Internet of Things and Business Ecosystems. Companies should identify how industry platforms will evolve and plan ways to evolve their platforms to meet the challenges of digital business.''

The worldwide IT-BPM spend through 2016 saw a 4 percent growth amounting to USD 1.2 trillion in 2016. The growth over previous year was largely contributed by investments in cloud infrastructure and buyers'' acceptance of the cloud model. There was an increase in BPM by 4 percent largely due to BPaaS adoption across industries, Robotic Process Automation and adherence to government compliances.

It was important for us to be the digital company first, before helping customers with their digital transformation. In this context, a concerted effort was made at the start of FY17 to create enterprise applications for both internal and external purposes. The challenge was to take the lead at becoming a breathing living digital company, before taking our offerings to the market. Over the last year we have invested strategically in becoming a living digital company. About 5 percent of our workforce is working on developing digital solutions. So far we have created 30 enterprise class applications that includes one-of-its-kind conversation platform with the CEO, the ZenVerse. Here, the CEO answers each question personally and ensures that if there is a good suggestion, the suggestion is incorporated or if there is an issue, corrective recourse is taken. The other apps are built to enable business processes across functions in the organization like HR, Finance, Delivery etc.

With the changing demand of skills there was a need to ensure our teams are future proofed, and we took the initiative to reskill our workforce ensuring they are more in-tune with customer needs. This involved the launch of a digital training academy that helps employees learn new skills, relearn existing ones and be digitally enabled professionals. This initiative has also been externally recognized with an Industry award.

The year gone by was characterized by emerging areas of automation coming alive in the way of personal digital assistants, robots making an appearance in households to take on basic chores, driverless vehicles etc. led by Al and Machine Learning. All these disruptions grew at a faster pace than the earlier years, making it a connected digital eco-system. The impact and influence of these emerging digital platforms was experienced by customers, users, businesses, factories and various processes.

Your company''s Return on Digital® strategy, introduced last year laid the foundation for a ''Living Digital'' company. Our initiatives to make your company a 100 percent digital company, was a success, as both employees, customers and our extended universe of influencers like analysts and the media fraternity acknowledged. This also helped in fortifying our go-to-market positioning as we took large leaps toward our stated goals. This is our clear differentiator and value proposition.

All the digital centric initiatives undertaken by your company have resulted in digital contributing to 29.8% of overall revenues. The changes in geo-political headwinds, as well as disruptive digital forces did impact the overall industry performance. In this context, your company continued building on its strong digital portfolio with year ended revenues reported at INR 3,056 Crore, a growth of 4% over the previous year''s revenues of INR 2,938 Crore. The profits after tax were at INR 238.37 Crore, marking an 18.5% decrease over the previous year''s PAT at 292.30 crores. Your company retains its reputation and position as one of the IT companies with a steady performance through 2016-17.

There were two acquisitions made in the year under review. The acquisition of Foolproof Ltd. along with its subsidiaries, one of Europe''s leading independent experience design agencies added to our overall customer centric digital offerings for the CMO segment. Our second acquisition of Keystone Logic INC, a leading Omni channel and Digital Supply Chain company added more value to our digital commerce business.

In addition many new services and solutions were launched in the year to align to customer needs and to provide them with additional value. Our Infrastructure Management Services maintained significance with introduction of a unique offering that has received much attention from the market - The Vinci™, Zensar''s Intelligent Managed Services Platform. In addition our offerings in newer areas like Robotic Process Automation (RPA) enabled us to chart new opportunities. Our Bots went live at many customer firms in an attempt to automate their processes and to give them greater value for their time. We also successfully launched our Gaming Centre of Excellence (CoE) to establish our expertise in this exciting category.

Our focus on chosen verticals of Manufacturing, Retail and Consumer Goods, Banking, Financial Services and Insurance, and on key markets of the US, UK and South Africa remained constant.

Our customer engagement strategy was revisited with a strategic decision to manage a smaller set of clients, with a view to ensure that our clients got increased attention from us with enhanced focused on improved delivery standards. The introduction of the ''three-in-a box'' approach for our top 30 growth client accounts included a robust representation of our offerings with a team comprising a client engagement representative, a delivery lead and a digital evangelist. Within these accounts the focus is on larger deal sizes, leveraging our relationships and deepening them through meaningful and value adding conversations, as a true transformation partner. This strategic initiative helped your company remain ahead of the curve in the practice of customer centricity and heightened engagement.

Our offerings were recognized by leading market analysts, adding to our thought leadership position. Your company was recognized by leading research analysts like Gartner, Forrester, and ISG Insights etc. We were positioned in the Gartner''s Oracle Magic Quadrant for Oracle Application Services, North America. Some of the key recognitions include being featured as a Niche and Established service provider in Zinnov Zones - Digital in Retail 2016; Digital Commerce Service Provider in Gartner 2017 Digital Commerce Vendor Guide, a Strong Performer in Forrester Wave -Application Outsourcing Capabilities of Midsize Offshore Vendors, 2016; Gartner Magic Quadrant for Managed Mobility Services to name a few.

Our Digital Commerce business saw many marquee logos being added to our portfolio. The addition of Keystone Logic to this business unit, opened up new avenues for us. We are considered an end-to-end robust digital commerce provider with a strong digital supply chain offering now in tow.

Our Oracle business saw many additions, as we went live with widespread implementations across worldwide customers. Our capabilities in the context of Oracle Cloud, added potential to generate new opportunities in a growing space.

USA continued to be the largest market for your company. While, we are taking cognizance of the proposed sweeping changes that are taking shape in this region, we will continue to build value and offer visible business outcomes to our customers in America. UK and Europe were in the throes of new policies and regulations due to Brexit. South Africa saw currency fluctuations in the Rand. Our regional performance was consistent, despite these volatilities.

FY17 has been a watershed year for your company with the successful introduction of new organization-wide initiatives that impact customers, employees, our investors and the community we operate in. The year gone by was about translating Return on Digital® into actionable outcomes and initiatives. Your company is poised to ride on the crest of changes emerging across the futuristic digital landscape.

(*Reference: Gartner''s Top 10 Strategic technology Trends 2017; URL:

http://www.gartner.com/smarterwithgartner/gartners- top-10-technology-trends-2017/)

EXTRACT OF ANNUAL RETURN

Details forming part of the extract of the Annual Return in Form MGT 9 is annexed herewith as “Annexure A”.

NUMBER OF MEETINGS OF THE BOARD

During the year under review, 6 (Six) meetings of the Board of Directors were held, details of which are set out in the Corporate Governance Report which forms part of this Report.

BOARD COMMITTEES

Detailed composition of the Board committees namely Audit Committee, Nomination and Remuneration Committee, Stakeholders Relationship Committee, Corporate Social Responsibility Committee and Banking Committee, number of meetings held during the year under review and other related details are set out in the Corporate Governance Report which forms part of this Report.

There have been no situations where the Board has not accepted any recommendation of the Audit Committee.

DIRECTORS'' RESPONSIBILITY STATEMENT AS REQUIRED UNDER SECTION 134 OF THE COMPANIES ACT, 2013

The Directors confirm that -

a) in the preparation of the annual accounts for the financial year ended 31s1 March, 2017, the applicable accounting standards had been followed and there were no material departures;

b) the directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year as at 31s1 March, 2017 and of the profit and loss of the company for that period;

c) the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

d) the directors had prepared the annual accounts on a going concern basis;

e) the directors had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively;

f) the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

INDEPENDENCE OFTHE BOARD

The Board of Directors of the Company comprises of optimum number of Independent Directors. Based on the confirmation / disclosures received from the Directors and on evaluation of the relationships disclosed, the following Non-Executive Directors are Independent as on March 31, 2017 in terms of the Section 149(6) of the Companies Act, 2013 and Regulation 16(1)(b) of the SEBI (LODR) Regulations, 2015:

1. Mr. A.T. Vaswani

2. Mr. SudipNandy

3. Mr. Venkatesh Kasturirangan

4. Ms. Madhabi Puri Buch

PECUNIARY RELATIONSHIP OR TRANSACTIONS OF THE NONEXECUTIVE DIRECTORS AND DISCLOSURES ON THE REMUNERATION OFTHE DIRECTORS

All pecuniary relationship or transactions of the nonexecutive Directors vis-a-vis the company, along with criteria for such payments and disclosures on the remuneration of the Directors along with their shareholding are disclosed in Corporate Governance Report and Form MGT 9 which forms part of this Report.

NOMINATION & REMUNERATION POLICY

The Company''s policy on Directors'' appointment and remuneration, including criteria for determining qualifications, positive attributes, independence of a Director and other matters provided under Section 178 (3) is enclosed with this Report as Annexure B.

EXPLANATION AND COMMENTS ON AUDITOR''S AND SECRETARIAL AUDIT REPORT

The Statutory Auditor’s Report does not contain any qualification, disclaimer, reservation or adverse remark.

Further, the Secretarial Audit Report does not contain any qualification, disclaimer, reservation or adverse remark.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

The full particulars of the loans granted are mentioned in the Note No. 6d and 32 of Notes to Accounts pursuant to Section 186 (4) read with the Companies (Meetings of Board and its Powers) Rules, 2014. The purpose for granting the loan was to meet the gap in working capital.

Full particulars of investments made are stated in Note No. 6a in the Notes to Accounts.

RELATED PARTY TRANSACTIONS

All related party transactions that were entered into during the financial year under review were on an arm''s length basis and were in the ordinary course of business.

All Related Party Transactions are placed before the Audit Committee. Prior omnibus approval of the Audit Committee is obtained on a yearly basis for the transactions which are repetitive in nature. The actual transactions entered into pursuant to the omnibus approval so granted are placed at quarterly meetings of the Audit Committee.

The Company has formulated a Policy on related party transactions. This policy as approved by the Board and is uploaded on the Company''s website on the below link:

http://www.zensar.com/sites/all/themes/zensar/pdf/ln

vestors/Policy%20on%20Related%20Party%20Transactions.pdf

TRANSFER TO RESERVE

Your Directors propose to transfer a sum of Rs.100 Crore to General Reserve.

DIVIDEND

Your Company had reported satisfactory profit levels in the first three quarters of the current financial year. Continuing with the Company''s tradition of rewarding the Members, Interim dividend of Rs. 5/- per share aggregating to Rs.224,154,030/- was paid in the month of February, 2017.

Further, the Board recommends a final dividend of Rs.7/per equity share of face value of Rs.Rs.10/- each (70%) on the paid-up equity share capital of the Company for the year under review. The total pay-out will amount to Rs.314,115,466/-.

The Company has adopted a Dividend Distribution policy during the year under review and the same is enclosed to this report as Annexure M.

MATERIAL CHANGES AND COMMITMENTS, IF ANY AFFECTING THE FINANCIAL POSITION OF THE COMPANY

There are no Material changes and commitments, affecting the financial position of the Company which have occurred between the end of the financial year on 31s1 March, 2017 to which the financial statements relate and the date of this report.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION

The provisions relating to disclosure of details regarding energy consumption, both total and per unit of production are not applicable as the company is engaged in the service sector and provides IT and IT related services.

Particulars prescribed under Section 134 (3)(m) of The Companies Act, 2013, read with the Companies (Accounts) Rules, 2014 in respect of technology absorption are set out in “Annexure C” to this report. Particulars regarding R & D expenditure during the year are given in Note No. 5 of Notes to Accounts.

RISK MANAGEMENT

A detailed report on Risk Management is included in Management Discussion and Analysis which forms part of this Report. The report clearly states development and implementation of a Risk Management Policy for the company including identification therein of elements of risks along with risk mitigation plan.

CORPORATE SOCIAL RESPONSIBILITY

At Zensar, we believe in the Triple Bottom line (3P) approach that is, ensuring a sustained and holistic approach to People, Planet and Profit. In fact, Commitment to People and Communities is one of the three core values of Zensar, and the spirit of Corporate Social Responsibility (CSR) runs across the organization whether it be through the commitment and involvement of senior leadership, exceptional volunteering practices or the extensive exposure to CSR at the time of induction of new recruits. Some CSR activities at Zensar are undertaken through RPG Foundation, which in turn is committed to under take CSR activities across all group companies of RPG. Zensar is proud to say that over 20% of associates volunteer their time and energy, aligning with the CSR programs.

A few of the highlights in the areas of Community Development, Digital Literacy, Employability

Enhancement and Environment Sustenance are:

- Integration of community development: Having worked with three slum communities and a village, the CSR programs are now in a position to integrate the various learning spaces (Adopted Schools, Community Development Centres and Udaan English Proficiency Centres) and engagement programs of gender Equality, distress addressing networks and mentoring programs). This year saw the emergence of Economic Development Program; in the light of demonetization in December 2016. This program will enable our communities to save more, look at individual and household financial management and link it to various skills/vocations they want to train on. In Anjaiah Nagar Mandal Parishad School, the School Monitoring Committees (SMC) was formed to bring together teachers and parents together formally. Three knowledge spaces of Library, Digital Lab and Science Lab was launched along with Education Board and Pune Municipal Corporation officials. Udaan English Centre, a flagship program is now replicated across Community Development Centres in Pune - the program would be scaled up across locations in the coming Financial Year.

- National Digital Literacy Mission (NDLM) centers and buses: In the year 2016-17, the digital literacy program run by CSR at Zensar continues to be a leader amongst corporates in working towards the National Digital Literacy Mission wherein at least one person from every household in India, should be digitally literate by the year 2020. We achieved 95% digital literacy in the communities of Anjaiah Nagar and Yamuna Nagar. Overall, we have trained 3500 people across 12 communities through 5 physical centres and 3 mobile buses. We continue in our efforts to spread digital literacy amongst the underprivileged and spearhead this mission. The digitally literate candidates benefitted during the demonetization, as they were familiar with the technical options available to them. The youth checked the results of their 101h, 12th and final year graduation online at our digital centres.

- The Employability Skills Development program has expanded significantly during the year 2016-17. Under this program more than 1500 students from Tier-2 and Tier-3 engineering colleges received 200 hours of employability related trainings in technical, digital and behavioural skills. After completion of the training, around 68% of students received job offers from various companies. In addition, livelihood generation programs in the areas of Tailoring, Data Entry, Administrative Assistant, Retail Assistant etc. were undertaken for the benefit of underprivileged communities in Pune & Hyderabad.

- Environment Sustenance: The 2-acre Biodiversity Park which was developed by Zensar Foundation in September 2012 in partnership with the PMC, is maintained actively. The park continues to attract an average of 300 visitors daily. In May 2016 an Urban Gardeners'' club was launched to build a network of communities around the park are passionate about the planet. Various Biodiversity sessions were conducted through out the year at the park and at Zensar''s campus to spread the message of Environment. Volunteers continued their efforts in co-building the terrace garden at Late Hambirao Moze School, Pune; and organized clean up drives across Pune city. Volunteers in Hyderabad also dug rainwater harvesting pits in for Gachibowli Mandal Parishad School.

These are just a few of the activities undertaken in the year 2016-17. Through working in missions such as NDLM and Swachh Bharat and programs such as those of NSDC (National Skills Development Mission), CSR continues to align itself with local, state and national government policies. We look forward to further expansion in the coming years in terms of outreach as well as impact.

The Company had an outlay to spend Rs.574.00 Lakhs during the year 2016-17 on CSR activities. As on 31s1 March, 2017 Company has spent Rs.558.79 Lakhs. This was the third year of CSR spent as required under the Companies Act, 2013. The Company has evaluated appropriate programs and projects to scale up in the chosen areas of CSR spends during the year 2016-17 and accordingly the unspent amount this year was minimal to the extent of Rs. 15.21 Lakhs. The Company shall strive to complete its entire CSR obligation going forward.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

During the year under review, following changes have occurred in the Board of Directors as well as Key Managerial Personnel:

1. Dr. Ganesh Natarajan ceased to be Vice-Chairman and Managing Director and demitted the office of directorship w.e.f. 301h April, 2016 on expiry of his term. The Board records its appreciation of the valuable contribution made by Dr. Natarajan in the growth of the Company during his tenure as Vice Chairman and Managing Director of the Company;

2. Mr. Manoj Jaiswal has been appointed as Chief Financial Officer of the Company w.e.f. 161h January, 2017 in place of retiring Chief Financial Officer Mr. S Balasubramaniam;

3. Mr. P. K. Mohapatra, Non-executive Independent Director passed away on 131h March, 2017. The Board records its deep appreciation of the services rendered by Late Mr. Mohapatra during his tenure as a Director of the Company.

SUBSIDIARY COMPANIES

Your Company along with subsidiaries provides digital solutions and technology services globally. A Report on the performance and financial position of each of the subsidiaries pursuant to Rule 8 (1) and Form AOC 1 read with Rule 5 of Companies (Accounts) Rules, 2014 is annexed as Annexure E and forms a part of this Report.

The Wholly Owned Subsidiary Company in UK has acquired one of Europe''s leading experience design agencies Foolproof Limited headquartered in London along with its two wholly owned subsidiary companies in UK and one wholly owned subsidiary Company in Singapore in November, 2016.

The Wholly Owned Subsidiary Company in USA has acquired Keystone Logic Inc. a leading Omnichannel and Digital Supply Chain Company, headquartered in Atlanta, USA in March, 2017.

Further, the Company entered into a definitive agreement to acquire the business of Keystone Logic Solutions Private Limited on March 30,2017.

Mr. Sandeep Kishore, Managing Director and CEO has not received any commission during the year from the Company nor any of its subsidiary companies.

The Company has framed policy for determining material subsidiaries as per requirements of Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 and has uploaded the same on website and link for the same is as below:

http://www.zensar.com/sites/all/themes/zensar/pdf/lnvestors/Zensar%20Policy%20for%20determining%20 material%20subsidiaries.pdf

Stand-alone Financial Statements and Consolidated Financial Statements of your Company along with its subsidiaries, prepared in accordance with the relevant Accounting Standards issued by The Institute of Chartered Accountants of India, forms a part of this Annual Report.

DEPOSITS

The Company has not accepted Deposits under Chapter V of the Companies Act, 2013.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS

There are no significant and material orders passed by the Regulators or Courts or Tribunals impacting the going concern status and company''s operations in future.

CHANGE IN THE NATURE OF BUSINESS

During the year under review, there was no change in the nature of the business.

INTERNAL FINANCIAL CONTROL

Details in respect of adequacy of internal financial controls with reference to the Financial Statements are stated in Management Discussion and Analysis which forms part of this Report.

INFORMATION PURSUANT TO RULE 5 OF THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL REMUNERATION) RULES, 2014

1

The ratio of the remuneration of each director to the median remuneration of the employees of the company excluding Managing Director for the financial year.

Please refer Annexure F-1 to this Report for details.

2

The percentage increase in remuneration of each director, Chief Financial Officer, Chief Executive Officer, Company Secretary or Manager, if any, in the financial year.

Please refer Annexure F- 2 to this Report for details

3

The percentage increase in the median remuneration of employees.

The percentage increase in the median remuneration of employees on India Payroll was 8%1 during the financial year 2016-17

4

The number of permanent employees on the rolls of company.

6,451

5

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

Considering 0% increment associates, average percentile increase is 48.3rd percentile & excluding 0% increment associates, average percentile increase is 48.2nd Percentile.

6

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

The variable component of remuneration availed by the Directors is based on Profit After Tax reported by the Company at the end of each financial year and recommendation of Nomination and Remuneration Committee.

7

Affirmation that the remuneration is as per the remuneration policy of the company.

The remuneration to employees of the Company is as per the remuneration policy of the company.

VIGIL MECHANISM/WHISTLE BLOWER POLICY

The Company has established a vigil mechanism for Directors and employees to report their genuine concerns. The Policy provides for Directors and employees to report concerns about unethical behavior, actual or suspected fraud or violation of Company''s Code of Governance and Ethics. The whistle blower policy is uploaded on the website of the Company on the link below.

http://www.zensar.com/sites/all/themes/zensar/pdf/lnvestors/Model_Whistle_blower_policy.pdf

INTER SE RELATIONSHIPS BETWEEN THE DIRECTORS

There are no relationships between the Directors inter se.

FAMILIARISATION PROGRAMMES FOR INDEPENDENT DIRECTORS

The Company has conducted Familiarization programme and the details of the same has been uploaded on the website of the Company on the link below:

http://www.zensar.com/sites/all/themes/zensar/pdf/lnvestors/FAMILIARISATION%20PROGRAMMES%20 FOR%20INDEPENDENT%20DIRECTORS.pdf

FORMAL ANNUAL EVALUATION OF BOARD AND ITS COMMITTEES

Pursuant to provisions of Section 134 of the Companies Act, 2013 and Regulation 17 of the SEBI (LODR) Regulations, 2015, the Nomination and Remuneration Committee laid down a criteria for evaluating Board’s effectiveness by assessing performance of the Board as a whole, performance of individual director and Committees of the Board namely Audit Committee, Nomination and Remuneration Committee, Stakeholders Relationship Committee, Banking Committee and Corporate Social Responsibility Committee. The Board approved the criteria laid down by Nomination and Remuneration Committee for evaluating Board’s effectiveness and engaged a third party agency to conduct Board’s effectiveness survey during the year under review.

MANAGEMENT DISCUSSION AND ANALYSIS

A detailed Management Discussion and Analysis Report is given as a separate section in this Annual Report and is annexed to this Report as “Annexure G”.

AUDITORS Statutory Auditor:

Pursuant to the provisions of the Companies Act, 2013, read with the Companies (Audit and Auditors) Rules, 2014, the Board at its Meeting held on 20th December, 2016 had appointed M/s. Deloitte Haskins and Sells LLP as Statutory Auditors of the Company for the Financial Year 2017-18, subject to approval of the Members in ensuing Annual General Meeting in place of the retiring Statutory Auditors M/s Price Waterhouse whose term expires as per the relevant provisions of the Companies Act, 2013 read with Rules formed there under.

Members are requested to confirm and approve their appointment.

Secretarial Auditor:

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board had appointed M/s SVD & Associates, a firm of Company Secretaries in Practice to undertake the Secretarial Audit of the Company. The Report of the Secretarial Audit in Form MR-3 is annexed herewith as “Annexure H”.

The Board has reappointed M/s SVD & Associates, a firm of Company Secretaries in Practice to undertake the Secretarial Audit of the Company for the financial year 2017-18.

Internal Auditors:

The Board had appointed Ernst and Young LLP as Internal Auditors for the financial year 2016-17 under Section 138 of the Companies Act, 2013 and they have completed the internal audit as per scope given by the Audit Committee for the financial year 2016-17.

The Board has reappointed Ernst & Young LLP as Internal Auditors of the Company for the financial year 2017-18.

CORPORATE GOVERNANCE

Your Company continues to benchmark itself with the best-of-the-breed practices as far as corporate governance standards are concerned. Your Company has complied with the requirements provided in Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015. The compliance report on the various requirements under the said clause along with the practicing Company Secretary''s certification thereof is provided in the corporate governance section of this report at “Annexure I”

EMPLOYEES STOCK OPTION PLAN

Currently, the Company has three Employees Stock Option Schemes in force namely, “2002 Employees Stock Option Scheme” (2002 ESOS), “2006 Employees Stock Option Scheme” (2006 ESOS) and Employee Performance Award Unit Plan, 2016 (2016 EPAP) for granting term based and performance based Stock Options to employees and these schemes are being implemented as specified by Securities Exchange Board of India in this regard.

Company has rolled out Employee Performance Award Unit Plan, 2016 (EPAP 2016) and granted Performance Award Units (PAUs) to the employees for the first time in year under review.

In the financial year 2016-17, 9,500 equity shares were allotted under 2002 ESOS and 2,32,710 equity shares were allotted under 2006 ESOS. No equity shares were allotted under 2016 EPAP. The Disclosures in compliance with Regulation 14 of the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 in this respect are stated in “Annexure J” to this report.

Disclosures for the financial year ended 31s1 March, 2017 regarding 2002 ESOS, 2006 ESOS and 2016 EPAP in terms of Companies (Share Capital and Debentures) Rules, 2014 are as below:

Particulars

2002 ESOS

2006 ESOS

2016 EPAP

Options granted

NIL

2,13,000

2,53,818

Options vested

43,950

2,45,658

NIL

Options exercised

9,500

2,32,710

NIL

The total no of shares arising as a result of exercise of option

9,500

2,32,710

NIL

Options lapsed/cancelled during the year

5,428

2,21,594

NIL

The exercise price

Exercise Price for each grant is different and decided by the Nomination and Remuneration Committee as per the Securities and Exchange Board of India (Employees Stock Option Scheme and Employees Stock Purchase Scheme) Guidelines, 1999 prevailing at the time of grant.

Exercise Price for each grant is different and decided by the Nomination and Remuneration Committee as per the Securities and Exchange Board of India (Employees Stock Option Scheme and Employees Stock Purchase Scheme) Guidelines, 1999 prevailing at the time of grant.

Rs.107-

Variation of terms of options

No variation in the terms of options during the year under review.

No variation in the terms of options during the year under review.

No variation in the terms of options during the year under review.

Money realized by exercise of options

Rs. 1,10,46,250

Rs.4,52,11,470

NIL

Total no of options in force

43,950

7,88,678

2,53,818

Employee wise details of options granted to:

Key Managerial Personnel (KMP)

No new options were granted to KMPs during the year under review.

No new options were granted to KMPs during the year under review.

No new options were granted to KMPs during the year under review except grant of 1,25,000 PAUs to Mr. Sandeep Kishor

any other employee who receives a grant of options in any one year of option amounting to five percent or more of options granted during that year

NIL

Name of Employee

No of Options

Name of;

No of Employee PAUs

Mr. John Blackburn

1,25,000

Sandeep 1,25,000 Kishore

Indranil Roychoudhary

40,000

Raju Hari

12,000

Ajay | 20,000 Bhandari

Sandeep Peshkar

12,000

ChandraTripurani

12,000

Malay 12,500 Verma

Anjali Deodhar

12,000


PARTICULARS OF EMPLOYEES PURSUANT TO SECTION 197 READ WITH RULE 5 OF THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014

Particulars

2002 ESOS

2006 ESOS

2016 EPAP

Identified employees who were granted option, during were granted option, during any one year, equal to or exceeding one percent of the issued capital (excluding outstanding warrants and conversions) of the company at the time of grant

NIL

NIL

NIL


Particulars of employees pursuant to the Section 197 read with Rule 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are annexed with this report as “Annexure K”.

DISCLOSURE UNDER SEXUAL HARASSMENT OF WOMEN AT THE WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

The Company has in place an Anti-Sexual Harassment Policy in line with the requirements of the Sexual Harassment of Women at the Workplace (Prevention, Prohibition and Redressal) Act, 2013. Internal Complaints Committee has been set up to redress complaints. The following is the summary of complaints received and disposed off during the year under review:

Number of complaints received and disposed off 1

MATERIAL TRANSACTIONS WITH RELATED PARTIES

The Company has not entered in to any transaction with related parties during the year under review which requires reporting in Form AOC 2 in terms of Companies Act, 2013 read with Companies (Accounts) Rules, 2014.

BUSINESS RESPONSIBILITY REPORT

Business Responsibility Report under Regulation 34 (2) (f) of the SEBI (LODR) Regulations, 2015 forms a part of this Director''s Report and annexed herewith as Annexure L.

ACKNOWLEDGEMENTS

We take this opportunity to thank all the shareholders, customers, suppliers, bankers, business partners / associates, financial institutions associated with the Company for their continued support.

I am sure you will join our Directors in conveying our sincere appreciation to all employees of the Company and its subsidiaries and associates for their hard work and commitment. Their dedication and competence has ensured that the Company continues to be a significant and leading player in the IT Services industry.

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

For and on behalf of the Board

Sd/-

H.V. Goenka Place: Pune

Chairman Dated: 251h April, 2017

Source : Dion Global Solutions Limited
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