Your Directors are pleased to present their Report on the business and operations ofyour Company along with the Audited Financial Statements (Standalone and Consolidated) forthe financial year ended March 31 2017.
(Rs. in million* except per share data)
| ||Standalone ||Consolidated |
| ||2016-17 ||2015-16 ||2016-17 ||2015-16 |
|Operating Income ||15975 ||13757 ||37110 ||33210 |
|Other Income ||273 ||312 ||228 ||264 |
|Total Income ||16248 ||14069 ||37338 ||33474 |
|Operating Expenses ||13749 ||11356 ||32930 ||30104 |
|Depreciation and Amortization ||783 ||818 ||1432 ||1364 |
|Financial Expenses ||156 ||150 ||429 ||404 |
|Profit Before Tax ||1560 ||1745 ||2547 ||1602 |
|Provision for tax (incl. deferred tax) ||545 ||521 ||755 ||598 |
|Profit After Tax ||1015 ||1224 ||1792 ||1004 |
|Less: Non-controlling Interest ||- ||- ||(3) ||(5) |
|Add: Balance brought forward from Previous year ||3648 ||2940 ||3406 ||2945 |
|Profit Available for Appropriation ||4663 ||4164 ||5201 ||3954 |
|Less: Adjustments and Appropriation || || || || |
|- Re-measurements of post-employment benefit obligation (net of tax) ||71 ||75 ||74 ||80 |
| ||z || || || |
|- Dividend ||182 ||389 ||182 ||389 |
|- Dividend Tax ||6 ||52 ||36 ||79 |
|Balance Carried Forward ||4404 ||3648 ||4909 ||3406 |
|Earnings per share (R) || || || || |
|- Basic ||48.96 ||59.07 ||86.58 ||48.67 |
|- Diluted ||48.88 ||58.99 ||86.44 ||48.61 |
*(1 million = R 10 lakhs)
The financial statements have been prepared in accordance with the Companies (IndianAccounting Standards) Rules 2015 (Ind AS) prescribed under Section 133 of the CompaniesAct 2013 and other recognised accounting practices and policies to the extent applicable.Beginning April 1 2016 Hinduja Global Solutions Limited and its subsidiaries ("theGroup") have for the first time adopted Ind AS with a transition date of April 12015. In preparing its opening Ind AS balance sheet as at April 1 2015 the group hasadjusted the amounts reported previously in financial statements prepared in accordancewith the accounting standards notified under Companies (Accounting (as amended) and otherrelevant provisions of the Act (previous GAAP or Indian GAAP). An explanation of how thetransition from previous GAAP to Ind AS has affected the groups financial positionfinancial performance and cash flows is set out in the Notes to the Consolidated financialstatements.
On a Consolidated basis your Company registered strong performance during thefinancial year ended March 31 2017. Compared to the previousfinancial year the OperatingIncome increased by 11.7% from R 33210 million to R 37110 million. EBITDA(Earnings Before Interest Taxes Depreciation and Amortization) went up from R3107 million to R 4424 million a growth of 42.4%. EBITDA for FY17 has beencomputed on the same basis used for computing EBITDA for FY16. PAT (Profit afterTax) has increased fromR 1004 million to R 1792 million a growth of78.5%.
The robust performance was driven by strong growth in the healthcare and telecomverticals and an improved performance by the Canada Jamaica and India domestic CRMbusinesses in the fourth quarter of FY17. The strong operational performance coupledwith cost management helped your Company record its highest-ever PAT. This was achieved inthe face of the Rupee strengthening significantly during the last quarter of the financial
On a Standalone basis Operating Income was R 15975 million for the financialyear ended March 31 2017 compared to R 13757 million in the previous financialyear an increase of 16.1%. EBITDA increased marginally by 0.27% from R 2401million to R 2407 million. PAT decreased by 17.1% from R 1224 million to R1015 million mainly on account of increase in the Operating Expenses which includesFOREX losses.
A review of the Financial and Operational Performance of the Company and its keysubsidiaries has been given in the Management Discussion and Analysis whichforms part of this Report as Annexure E.
Other financial highlights of the year:
Cash flow from operations and after working capital changes: R 4076million as compared to R 1459 million in FY 16 an increase of 179%;
CAPEX and Investment : R 1774 million as compared to R 2686million in FY 16;
Gross Debt of R 6547 million as at March 31 2017 as compared to R 8370million as at March 31 2016 i.e. a reduction of R1823 million during the year;
Net Debt : R 2897 million and Net Worth : R13368 million;
Net debt/ equity as on March 31 2017: 0.22x as against 0.39x as of March 312016.
Revenue Summary of the year:
Revenue by Geography US: 68.2%; Canada: 9.7%;
UK & Europe: 7.1%; and India: 15%
Revenue by Vertical Healthcare: 48%; Telecom and Technology: 22%; Consumer: 13%;Banking and Financial Services: 7% and Others: 10%
Business Highlights of the year:
Client Wins: 15 new clients who accounted for 2.7% of overall revenue.
Active Clients: 183 core BPM clients and 614 Payroll processing and HRO clients.
Delivery Centres: 68 global delivery centres across seven countries currently.During the year seven new centres were opened: Jamaica (2) Philippines (1) and India (4- one each in Chennai and Raipur and two in Bangalore).
Creation of North America region: Sales Operations and Shared Services of HGSUSA and HGS Canada were brought under a unified North America structure which has helpedstreamline decision making and optimize operations to make your Companys clientsmore competitive.
Employee Headcount: 44237 as on March 31 2017; India: 67% (India offshore: 21%and India Domestic: year 46%) Philippines: 16% USA: 9% Canada: 5% and Europe: 3%.
New Solutions and Innovation:
Launched new service offerings The Automated Enterprise: DigiWEBDigiSOCIAL DigiTEXT DigiCHAT DigiMESSAGING DigiINSIGHT DigiBOT and DigiAMBASSADOR(all under the DigiCX suite of solutions).
Robotics Process Automation (RPA) solution gaining traction HGS AutomationCentre of Excellence currently delivering to eight client engagements in Healthcare andBFSI.
Your Directors are pleased to recommend a Final Dividend of R 2.50 per equityshare (25% on face value of R 10/- each) for the year ended March 31 2017 subjectto your approval. This is in addition to the three Interim Dividends aggregating to R 7.50per equity share of R 10 each for the financial year 2016-17 declared by the Boardof Directors on August 11 2016 November 9 2016 and February 8 2017respectively and were duly paid. The total dividend for the financial year R 10 perequity share (100% on face value of R 10/- each) if approved/ confirmed by theMembers.
Some 17 years into the 21st Century the world has changed as never before. Tremendousforces such as globalization consumerization technology and digital disruption arecreating major shifts in the way the world behaves and works. Since business is highlyintermingled with socio-political and technology trends it is a tough ask fortodays enterprises to continue to deliver expected returns through existing businessmodels. Having exhausted several of the traditional levers and facing increasingexpectations from stakeholders enterprises are reassessing their capabilities andidentifying new opportunities for growth. With Business Process Management (BPM) evolvingfrom a cost-based to a value-based proposition it is increasingly being seen as a keymodel that can drive transformation focused on digitization and customer experiences.
According to NASSCOMs IT-BPM Strategic Review 2017 the global BPM spend grew by4% to reach US$183 billion in 2016. Over the last decade the Indian BPM industry hassignificantly evolved not only in of scale but also in terms of services verticals servedand delivery models. The industry recorded a revenue of US$30 billion in FY17 thusincreasing Indias share in the overall BPM sourcing market from 35% in 2012 to 37%in 2016. Some trends driving growth are a fundamental shift towards value-based servicesnew technology levers around process transformation analytics and automation andemergence of new business models. In terms of verticals BFSI healthcare retail andtelecom continue to dominate the industry. The India domestic BPM market saw a growth of6.9% in FY2017 to touch US$3.8 billion. BFSI and telecom which constitute two-thirds ofthe market have been instrumental in driving demand. Going forward the Digital Indiainitiative of the government and emerging sectors such as eCommerce consumer durablesautomobiles and travel & leisure will drive growth along with traditional verticals.
More detailed information pertaining/relating to Business Review has been provided inthe Management Discussion and Analysis which forms part of this Report as AnnexureE.
HGS International Mauritius a wholly-owned subsidiary of your Company isprimarily engaged in investment activity. HGS International owns 100% of the share capitalof Hinduja Global Solutions Inc. USA C-Cubed N.V. Curacao Hinduja Global SolutionsEurope Ltd. UK HGS St. Lucia Ltd. Saint Lucia and HGS MENA FZ- LLC Dubai. HGSInternational owns 95.2% of the share capital of HGS Colibrium Inc. and the balance sharecapital is owned by the founders of Colibrium.
Revenue for FY17 was US$ 3.4 milion as against US$ 3.9 milion for FY16.
Hinduja Global Solutions Inc. USA (HGS Inc.) a wholly-owned subsidiary of HGSInternational Mauritius specializes in marketing and provision of both voice andnon-voice related Customer Contact and Business Process Outsourcing services to itsclientele. Its key subsidiaries are HGS (USA) LLC HGS Canada Inc. HGS EBOS LLC and HGSHealthcare LLC.
The Consolidated Revenue was US$ 340.6 million for FY17 as compared to US$ 369.4million in FY 16.
HGS (USA) LLC a wholly-owned subsidiary of HGS Inc. USA operates in five citiesin USA. It partners with Fortune 1000 companies and Government agencies to providecomprehensive Customer Relationship Management programs. For FY17 it recorded totalrevenue of US$ 313.9 million as compared to US$ 287.2 million in FY16. HGS (USA)LLC and its US subsidiaries have over 2000 employees who are engaged in customerservices fulfillment services sales marketing and account management.
HGS Canada Inc. a wholly-owned step down subsidiary of HGS Inc. USA is aCanadian contact center service provider servicing marquee customers across verticalsterms such as media telecom technology and BFS. HGS Canada offers technical supportinbound and outbound sales customer care and customer retention in English and Frenchlanguages and has a team size of around 2300 associates at 12 centers in Canada. ForFY17 it recorded revenue of CAD 77.0 million as compared to CAD 84.5 million inFY16.
Hinduja Global Solutions Europe Ltd. is the UK-based subsidiary focusing onproviding consulting services for BPM call center services and offshoring services toUK-based clients. It owns 100% stake in Hinduja Global Solutions UK Ltd. and HGS FranceSARL France. Its subsidiary in Italy called HGS Italy SRL is under liquidation sinceinoperative. For FY17 it recorded standalone revenue of GBP 1.3 million ascompared to GBP 1.2 million in FY16.
Hinduja Global Solutions UK Ltd. is a leading contact center company with over1000 employees in London Preston and Selkirk (Scotland). It offers a range of servicesfor inbound and outbound interactions to over 15 marquee customers across verticals suchas Government FMCG Financial Services Automobiles and Retail. It has branches inRotterdam (Netherlands) and Hamburg (Germany) which are in the process of being wound up.For FY17 it reported revenue of GBP 36.3 million as compared to GBP 34.9 million inFY16.
HGS St. Lucia Ltd. Saint Lucia is the holding company of Team HGS Ltd. Jamaica.Team HGS Ltd. Jamaica began call center operations in FY13 at Kingston Jamaica andcontinues to show strong performance. Revenue for FY17 was 2386.2 million JamaicanDollars as compared to 804.9 million Jamaican Dollars in FY16.
HGS MENA FZ-LLC has established a marketing office in Dubai Internet City with theobjective to build sales pipeline. The demand trend for call center services from MENAregion is encouraging. In FY17 it recorded revenue of AED 7.1 million as comparedto AED 5.1 million in FY16. HGS Extensya Cayman Limited Extensya InvestmentHoldings Limited and HGS Extensya Holdings Limited which were its wholly ownedsubsidiaries since inoperative were closed and struck-off from the Registrar ofCompanies on July 1 2017.
HGS Colibrium Inc. USA : Revenue for FY17 was US$ 12.2 million as comparedto US$ 14.7 million for FY16.
HGS International Services Private Limited (HGSISPL)
HGSISPL a wholly owned subsidiary of the Company recorded revenue of R 3649.3million in FY17 as compared to R 2542.9 million in FY16 a growth of43.5%. The SEZ division of HGSISPL is presently operating in five units namely a) GlobalVillage SEZ Bangalore; b) DLF Towers SEZ Hyderabad; c) Pritech I Park SEZ Bangalore; d)DLF Cybercity SEZ Hyderabad; and e) Pritech II Park SEZ Bangalore. Human ResourceOutsourcing (HRO) business of HGSISPL services marquee customers in Banking FinancialServices Insurance and other industry verticals in India and abroad. Pursuant to Section129(3) of the Companies Act 2013 ("the Act") a statement containing thesalient features of financial statements of the Companys subsidiaries in Form AOC 1is attached to the financial statements of the Company.
Further pursuant to Section 136 of the Act the financial statements of the Companyconsolidated financial statements along with relevant documents and separate auditedaccounts in respect of subsidiaries as may be applicable are available on the website ofthe Company.
Particulars of loans guarantees and investments
Loans guarantees and investments as per Section 186 of the Companies Act 2013 formpart of the Notes to the financial statements provided in thisAnnual Report.
Communications and Public Relations
Your Company has evolved its storyline to customers industry analysts advisors andother influencers regarding digital transformation and our ability to create value for ourclients by helping consumers to get the right answer fast; balancing great customerexperience with the operational ability to reduce costs of an organization. The message tothe market and the media is resonating and getting continued mindshare. In an independentreport published by Apollo Research in February 2017 of the top 30 BPO competitorsmeasuring share of voice in the media for key competitive topics such as the unifiedcustomer experience and customer satisfaction your Company was ranked in the top 5 acrossNorth America and the UK.
In India HGS continues to leverage media as a key channel to enhance visibility andthought leadership amongst key stakeholders including investors clients employees andgovernment. Your company is consistently ranked in the top 3 in terms of share of voice inmedia coverage amongst its BPO peers. HGS is also using news media and social media toreach out to prospective employees and establish itself as an "Employer ofChoice". The annual Investor Meet has helped increase awareness and engagement withinvestors and communicate HGS perspectives to the market.
HGS continues to enhance its website by making it educational and engaging with visualand video content. In the past year the team has invested efforts in making theexperience more fluid for PC and mobile browsers as well as more intuitive with fewerclicks to access key thought leadership case study and service line content.
Key vertical messages have been refined to continue to keep the HGS message relevant inall the markets to build new pipelines and prospective new customer activity. Our newcontent is aimed at educating and offer transformative solution alternatives. Anotheraspect is the focus to build the social media presence (e.g. LinkedIn Twitter Blog) thatreaches a targeted audience across the globe.
In FY2017 HGS was named a "Top 100 Global Outsourcer" by the InternationalAssociation of Outsourcing Professionals (IAOP) and brought home Stevie Awards forCustomer Service Department of the Year Best Use of Technology in Customer Service andSales Support Practice of the Year as well as Contact Center World recognitions forOutsourcing Partnership of the year and Best Self-Service Technology of the Year. HGS wasincluded in NASSCOMs Top 20 IT-BPO Employers in India and Top 10 BPM exporters inIndia while also being recognized as the Best Champion Employer for 2016-17 under the DeenDayal Upadhyaya Grameen Kaushalya Yojana (DDU-GKY) program by the Indian GovernmentsMinistry of Rural Development. Your Company was able to leverage these distinctionsas credentials to reach industry influencers analysts advisers potential customers andimportantly potential employees.
Anirban Lahiri Indias No.1 Golfer and HGS brand ambassador participated inclient and employee events. Anirban has the same vision and passion that HGS shares to begreat and to win with integrity. As the first BPM company to have a brand ambassador inthe international market HGS relationship with Lahiri is helping build the brandfacilitating business growth increasing brand recall with potential and existingcustomers and continues to create new opportunities tied to the worlds golfcalendar.
Your company continues to work towards creating an inclusive and transparent culture atthe workplace. Different platforms - e-mailers newsletters blogs and articles areleveraged to share views and news with our employees around the world. The Companyintranet - HGS Connect is an integrated two-way communication platform which serves as aone-stop solution across the globe. This internal portal also serves as a time-out foremployees offering various business and fun elements to enable them get empowered withbusiness knowledge and interact with each other on a common platform. Additionallyvarious other digital and non-digital channels are being used to engage HGS employeesglobally. HGS is strengthening its communication channels across the board to create amore connected organization with focus on internal and external stakeholders.
Corporate Social Responsibility (CSR)
Pursuant to Section 135 of the Companies Act 2013 the Corporate Social ResponsibilityCommittee ("CSR Committee") consists of following Members: Mr. AnilHarish (Independent Director) - Chairman Mr. Ramkrishan P. Hinduja (Non-Executive Non-IndependentDirector) Ms. Vinoo S. Hinduja (Non-Executive Non-Independent Director) Mr. Rajendra P.Chitale (Independent Director) and Mr. Rangan Mohan (Independent Director).
During the financial year 2016-17 one Meeting of CSR Committee was held on March 142017.
In terms of the CSR Policy the Management has set up a CSR Forum whose role andfunctions involve: identification and evaluation of CSR projects/ initiatives forrecommendation to the CSR Committee reviewing and monitoring the approved CSR projectsand providing periodical status updates to the CSR Committee. The CSR Committee reviewsthe CSR projects/ initiatives as recommended by the CSR Forum and the expenditure to beincurred thereon as per the provisions of the Companies Act 2013 and the Rules madethereunder. Also the CSR Committee reviews and monitors reports submitted by CSR Forumrelating to implementation of the project(s) and its financial/ operational monitoring.The Board of Directors reviews and approves CSR projects/ initiatives as recommended bythe CSR Committee and evaluates reports relating to implementation of the approved CSRprojects.
In addition to compliance with statutory provisions the Company and its employeesacross geographies in which the Company operates voluntarily initiates and participatesin various programs aimed at improving the quality of life of the society at large.
The Report on CSR activities in the format as required under Companies (CorporateSocial Responsibility) Rules 2014 is set out in Annexure G formingpart of this Report. The CSR Policy is available on the website of the Company.
Directors Responsibility Statement
Pursuant to Section 134(5) of the Companies Act 2013 the Directors based upon theinformation and documents made available to them and to the best of their knowledgeconfirm that:
In preparation of the Annual Accounts for the financial year ended March 31 2017 theapplicable accounting standards have been followed and there have been no materialdepartures in the adoption and application thereof;
They have selected such accounting policies and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of the
Company at the end of the financial year and of the Profit and Loss of the Company forthat period;
They have taken proper and sufficient care for the maintenance of adequate accountingrecords in accordance with the provisions of the Companies Act 2013 for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;
They have prepared the Annual Accounts on a going concern basis;
They have laid down adequate financial internal controls to be followed by the Companyand they are operating effectively;
They have devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems are adequate and are operating effectively.
The Company has in place internal financial controls framework which inter aliaconsist of Function wise Status of Documentation and Testing (Risk and Control MatrixTest of Design Test of Operative Effectiveness) Process level controls (Process/Function wise) IT General controls (Application wise and Process wise) etc. Suchframework is periodically internally tested as well as reviewed and tested by theexternal consultant. Based upon the said framework and the compliance systems establishedand maintained by the Company work performed by the statutory internal and secretarialauditors including audit of internal financial controls over financial reporting by thestatutory the reviews performed by Management the Board is of the opinion that theCompanys internal financial controls were adequate and effective during FY 2016-17.
Number of Meetings of the Board
Nine meetings of the Board were held during the year. The time gap between any twomeetings did not exceed one hundred and twenty days. Further details in this regard aregiven in the Corporate Governance Report which forms part of this Report.
Declaration by Independent Directors
As required under Section 149(7) of the Companies Act 2013 the Company has receivedthe declaration from each of the Independent Directors of the Company confirming that theymeet the criteria of independence laid down in Section 149(6) of the Companies Act 2013and Regulation 16(1)(b) of the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 ["SEBI (LODR) Regulations"].
Pursuant to Section 134 178 of the Companies Act 2013 and Regulation 17 of the SEBI(LODR) Regulations the Nomination and Remuneration Committee (NRC) and the Board ofDirectors carried out the performance evaluation of the Individual Directors (IndependentNon-Independent Directors and the Chairman) the Board as a whole and its Committees forthe Financial Year 2016-17. The performance evaluation of Individual Directors was carriedout by the NRC and Board on the basis of criteria contained in the "RatingDocument" which inter-alia includes: Exercise of independent judgmentOffering constructive contribution to the Boards discussions and deliberations basedon his/ her expertise and domain knowledge; Non-partisan appraisal of issues etc.Performance evaluation of Independent Directors was carried out by the entire Board ofDirectors except the Independent Director being evaluated.
The Board also carried out evaluation of its own performance and that of itscommittees based upon criteria which inter alia includes: structure of the Boardfrequency regularity and discussions at the meetings of the Board functioning of theBoard mandate and composition of the Committees effectiveness of the Committeescontribution of the Committees to the decisions of the Board etc.
At the separate meeting of Independent Directors held during the Financial Year endedMarch 31 2017 performance evaluation of Non-Independent Directors the Chairman of theCompany and the Board as a whole was carried out on the basis of aforementioned criteria.The Independent Directors also assessed the quality quantity and timeliness of the flowof information between the Companys Management and the Board.
The NRC the Board and the Independent Directors having regards to the "RatingDocuments" and the aforementioned criteria concluded that overall performance ofeach of the Directors including the Chairman of the Company is conducive to thewell-being and in the best interest of the Company and aimed at enhancing the performanceof the Company. The overall performance of the Board as a whole and its Committees issatisfactory. Also the Management is proactive in providing requisite information to theBoard on a timely basis.
Mr. Yashodhan Madhusudan Kale (DIN 00013782) was appointed at the 21st Annual GeneralMeeting of the Company held on September 21 2016 as a Non-Executive Director of theCompany liable to retire by rotation.
Mr. Pradeep Mukerjee (DIN 02287773) was appointed as an Independent Director of theCompany at the 21st Annual General Meeting of the Company held on effective September 212016 for a term of five from the said date.
Ms. Vinoo S. Hinduja Director (DIN 00493148) is liable to retire by rotation at theensuing Annual General Meeting and being eligible offers herself for re-appointment.
The Board has constituted an Audit Committee pursuant to the provisions of Section 177of the Companies Act 2013. The Committee comprises the following Members: Mr. Anil Harish(Independent Director) Chairman Mr. Ramkrishan P. Hinduja (Non-ExecutiveNon-Independent Director) Mr. Rajendra P. Chitale (Independent Director) and Mr. RanganMohan (Independent Director).
Further details pertaining to the Audit Committee are included in the CorporateGovernance Report which forms part of this Report as Annexure C.
Key Managerial Personnel
Pursuant to Section 203 of the Companies Act 2013 the Company has recognized/ notedMr. Partha DeSarkar Manager (Chief Executive Officer); Mr. Srinivas
Palakodeti (Chief Financial Officer) and Mr. Makarand
D. Dewal (Company Secretary) as the Key Managerial Personnel of the Company.
Chief Executive Officers Certification
The Chief Executive Officers declaration affirming compliance with the Code ofConduct by the Board and Senior Management is furnished as Annexure Ato this Report.
Conservation of Energy Technology Absorption and Foreign Exchange Earnings and Outgo
The prescribed particulars as required under Section 134(3)(m) of the Companies Act2013 relating to Conservation of Energy Technology Absorption and Foreign ExchangeEarnings and Outgo are furnished as Annexure B to this Report.
As required under Schedule V of the SEBI (LODR)
Regulations a detailed report on Corporate Governance is furnished as AnnexureC to this Report.
The Statutory Auditors of the Company have examined the compliance of conditions ofCorporate Governance as stipulated in Schedule V (C) of the SEBI (LODR) Regulations andhave certifiedcompliance thereof. The certificate is attached asAnnexure Dto this Report.
Management Discussion and Analysis
A separate report on Management Discussion and Analysis is annexed as AnnexureE to this Report.
ESOP Disclosure and ESAR Plan
The two ESOP Schemes viz. Hinduja Global Solutions Limited Employees Stock OptionsPlan 2008 and Hinduja Global Solutions Limited Employees Stock Options Plan 2011 were inoperation during the Financial Year 2016-17. These ESOP Schemes are in compliance with theprovisions of SEBI (Share Based Employee Benefits)
Regulations 2014. Particulars of aforesaid ESOP Schemes are available on theCompanys website http:// www.teamhgs.com/investors/other-reports. There were nochanges made to the aforesaid ESOP Schemes during the Financial Year 2016-17.
The approval of the Members to the Special Resolutions relating to the Hinduja GlobalSolutions Limited Employee Stock Appreciation Rights Plan 2017 for grant of Employee StockAppreciation Rights to employees of the Company and that of its subsidiary companies wassought via Postal Ballot process (Postal Ballot Notice dated May 22 2017). The result ofthe Postal Ballot was declared on July 13 2017. As per the said Result the SpecialResolutions were not approved by the Members.
Extract of Annual Return
Pursuant to Section 134(3)(a) of the Companies Act 2013 an Extract of Annual Returnas on Financial Year ended March 31 2017 in the prescribed format is appended as AnnexureF to this Report.
Related Party Transactions
Transactions entered into with the related parties during the Financial Year 2016-17are in the ordinary course of business and at arms length basis and thereforeoutside the purview of Section 188(1) of the Companies Act 2013. Information on relatedparty transactions pursuant to Section 134(3)(h) of the Companies Act 2013 read with Rule8(2) of the Companies (Accounts) Rules 2014 is given in Form AOC-2 as AnnexureH and the same forms part of this Report.
Material changes and commitments affecting the financial position of the Companybetween the end of the financial year and date of the report
There were no material changes and commitments affecting the financial position of theCompany between the end of the Financial Year and date of the Report.
Policy on Directors Appointment and Remuneration
Policy on Directors Appointment and Remuneration and other matters provided inSection 178(3) of the Companies Act 2013 have been disclosed in the Corporate GovernanceReport which forms part of this Report.
Whistle Blower Policy
The Company has a Whistle Blower Policy and Vigil Mechanism to report and redressgenuine concerns and grievances. The Policy is available on the Companys website.This matter is covered in the Corporate Governance Report which forms part of this Report.
Under the Whistle Blower Policy and Vigil Mechanism no complaints were received duringthe Financial Year 2016-17.
Risk Management Policy
Your Company has formulated Risk Management Policy which inter alia identifiesrisks taking into consideration the business and operations of the Company and adoption ofmitigation measures. The Policy identifies elements of risks which in the opinion of theBoard may threaten the existence of the Company. The details of the Policy are given inthe Management Discussion and Analysis Report attached to this Report.
The Risk Management Committee consisting of the Chief Executive Officer ChiefFinancial Officer and Executive Vice President Legal Compliance and Risk Managementperiodically review the Enterprise Risk Management framework and the update on suchframework is provided to the Members of the Audit Committee and the Board. The RiskManagement Committee met six times to review and update Enterprise Risk ManagementSystems. The Company is not required to constitute a Risk Management Committee consistingof Directors.
Fixed Deposits from Public
The Company has not accepted any fixed deposits from the public and as such no amountof principal or interest was outstanding as on the Balance Sheet date.
At the 21st Annual General Meeting of the Company held on September 21 2016 M/s.Price Waterhouse Chartered Accountants (Firm Registration No.301112E) were appointed asStatutory Auditors of your Company till the conclusion of the next Annual General Meeting.The Auditors Reports (for Standalone and Consolidated financialstatements) for theFinancial Year ended March 31 2017 are unmodified/ unqualified. Pursuant to Section 139of the Companies Act 2013 ("the Act") the term of the existing StatutoryAuditors viz. M/s. Price Waterhouse Chartered Accountants will end at the conclusion ofthe ensuing 22nd Annual General Meeting ("AGM"). In compliance with theprovisions of Sections 139 142 and other applicable provisions if any of the Act andthe Rules framed thereunder based on the recommendation of the Audit Committee yourdirectors proposed to appoint M/s. Deloitte Haskins & Sells LLP Chartered Accountants(Firm Registration No. 117366W/W-100018) to hold office for a term of five years from theconclusion of the 22nd AGM until the conclusion of the 27th AGM of the Company subject toratification of their appointment by the Members at every AGM held after the 22nd AGM. Theproposed new Statutory Auditors have submitted their consent and requisite declarations asto their eligibility to act as Auditors of the Company if appointed. The proposal fortheir appointment is being put up for approval by the Members at the ensuing AGM.
Pursuant to the provisions of Section 204 of the Companies Act 2013 the Board ofDirectors had appointed Ms. Rupal D. Jhaveri Practicing Company Secretary as theSecretarial Auditor to carry out the Secretarial Audit for the Financial Year 2016-17. TheSecretarial Audit Report in the prescribed format for the Financial Year 2016-17 formspart of this Report as Annexure I. The Report does not contain anyqualifications reservations or adverse remarks.
Pursuant to Section 197 (12) of the Companies Act 2013 read with Rule 5(1) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 as amendedit is necessary to disclose the ratio of remuneration of each director to the medianemployees remuneration. At present the Directors are paid fees for attending themeetings of the Board of Directors and of the Committees of which they are members. Thisremuneration by way of fees is not related to the performance or profit of the Company(like payment of commission is related to the profits of the Company). In view of thisthe ratio of remuneration of each director to the median employees remuneration isnot computed. In terms of the provisions of Section 197(12) of the Companies Act 2013read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 as amended a statement showing the names and other particulars ofthe employees drawing remuneration in excess of the limits set out in the said Rules areprovided in the Annexure forming part of the Annual Report.
Having regard to the first proviso to Section 136(1) of the Companies Act 2013 theAnnual Report excluding the aforesaid information is being sent to the members of theCompany. The said information is available for inspection at the Registered working hours(i.e. 10:00 am to 6:00 pm) and any member interested in obtaining such information maywrite to the Company Secretary and the same will be furnished without any fee and free ofcost.
In accordance with Rule 5 of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 details of foreign employees excluding directors and theirrelatives have not been included in the Annexure. Members interested in obtaining thesaid information may write to the Company Secretary at the Registered Office of theCompany and the requested information shall be furnished to such member.
Significant and Material Orders
There are no significant and the Regulators or Courts or Tribunals that would impactthe going concern status and your Companys operations in the future.
Internal Financial Controls
Internal Financial Controls (including Internal Financial Controls over FinancialReporting) and their adequacy are included under the heading Internal Controlsin the of the Company during Management Discussion and Analysis which forms part of thisReport.
Your Directors place on record their appreciation for the co-operation and supportreceived from customers vendors collaborators business partners investors financialinstitutions bankers the Government of India State Governments governments of variouscountries and regulatory authorities and agencies and the society at large and lookforward to their continued encouragement. Your Directors are grateful for the dedicatedefforts and commitment of the employees at all levels and their contribution in achievingthe growth of the Company. material orders passed by
For and on behalf of the Board of Directors
Place : Mumbai
Ramkrishan P. Hinduja
Date : August 24 2017