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MphasiS Ltd.

BSE: 526299 Sector: IT
NSE: MPHASIS ISIN Code: INE356A01018
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OPEN 878.00
PREVIOUS CLOSE 865.50
VOLUME 12709
52-Week high 932.60
52-Week low 522.30
P/E 24.95
Mkt Cap.(Rs cr) 17,156
Buy Price 0.00
Buy Qty 0.00
Sell Price 887.80
Sell Qty 296.00
OPEN 878.00
CLOSE 865.50
VOLUME 12709
52-Week high 932.60
52-Week low 522.30
P/E 24.95
Mkt Cap.(Rs cr) 17,156
Buy Price 0.00
Buy Qty 0.00
Sell Price 887.80
Sell Qty 296.00

MphasiS Ltd. (MPHASIS) - Director Report

Company director report

Dear Shareholders

We have pleasure in presenting to you the twenty sixth Annual Report of your Companyfor the year ended 31 March 2017.

FINANCIAL PERFORMANCE

Key aspects of the financial performance of the Company are tabulated below:

( Rs million)

CONSOLIDATED STANDALONE
Particulars Year ended 31 March 2017 Year ended 31 March 2016 Year ended 31 March 2017 Year ended 31 March 2016
Revenues 63150 62721 32051 30818
Expenses 52158 53822 23788 24747
Profit before taxation 10992 8899 8263 6071
Net Profit 7916 6315 6250 4571
Transfer to General Reserve 625 458 625 458

Note: the figures are rounded off to the nearest integer.

A detailed analysis of performance is available in the section headed ManagementDiscussion and Analysis of Financial Condition and Results of Operations in this AnnualReport.

OUTLOOK

Future of enterprises powered by Cloud and Cognitive Computing.

The traditional services market has deaccelerated over the past few years butunderneath there is a new segment that is beginning to emerge: digital platforms. Herethere is substantial growth of 25% to 30% and this is creating significant new opportunityacross several dimensions including cloud analytics mobile IoT and whole list of newdigital opportunities. Digitization is changing industry boundaries and dynamics; growthis shifting; disruption is accelerating.

Thanks to the current pace of innovation a prodigious wave of ecosystem revolutionanchored by digitization machine learning and life sciences is plotting the inflectionpoint of technology explosion. Robotics autonomous cognitive computing internet ofthings and predictive data analytics is not a futuristic strategy it is the currentreality. This wave of technologies are poised to re-create industries and customerexperience as they move from periphery to mainstream revolutionizing how we live work ordo business.

Cloud technologies coupled with cognitive computing capabilities such as RoboticProcess Automation (RPA) Artificial Intelligence (AI) Natural Language Processing (NLP)have been successfully embedded and scaled in multiple organizations. These are beingdesigned around the company's existing value drivers and strengths including the productportfolio technical competence and customer proximity. Projects and partnerships too aredesigned with the linked objectives of digitizing core processes upgrading IT platformsand conquering new business terrain.

As our customers embark on their digital transformation journey Mphasis is focused onfuture proofing them with cognitive solutions on cloud that enable agile processes andpredictive analytics resulting in competitive advantage. Even as the organization isbuilding the new capabilities that digital businesses require it must deploy its existingcapabilities very differently in order to achieve scale and speed. The challenge is tobalance all of the conflicting demands.

A good case in point is the complete Digital Transformation journey (Strategy toImplementation) enabling a Retail Insurance company to achieve measurable business value– 3x Revenue by embracing Customer Centricity and Fast IT. This was significantmilestone for Mphasis as it was the:

• First end to end Digital Marketing Program;

• First Program for Digital Transformation Consulting Services;

• Digital Maturity Index & Design Thinking; and

• Aligned to Mphasis' Cloud and Cognitive Strategy – Cloud and CognitiveCloud native Cognitive API-fication and DevOps.

Mphasis launched Mphasis NEXT Labs for Cloud to focus on emergent and future paradigmsrelated to Cloud Computing. Mphasis NEXT Labs for Cloud would focus on creation ofIntellectual Property industry leading innovations and thought leadership to open newstrategic opportunities and enable differentiation in the Cloud Computing services space.We also acquired an ‘Advanced Consulting Partner' status with Amazon Web Services(AWS) just one level below our next goal - Premier Partner!

To leverage the start-up ecosystem and bring disruptive solutions to customers Mphasisintroduced ‘Sparks' – a Digital Acceleration Program in collaboration withFinTech startups globally. The collaboration with industry leaders in RPA drivestechnology-enabled business process services and adopt digital automation capabilities.

Similarly in the cognitive space we launched NextAnglesTM CognitiveRegulatory Compliance Suite a smart data and artificial intelligence based software thatreduces cost and workflow burdens for compliance personnel and enables new complianceprofessionals to work like experts.

Through our new majority shareholder - Blackstone we are finding synergies with itsgroup companies across multiple areas of operations and most importantly by puttingforward a compelling value proposition to translate them into customers. We also seepotential with DXC Technology the IT services company created by the merger of CSC andthe Enterprise Services business of Hewlett Packard Enterprise. Mphasis has been workingwith EDS and the legacy HP Enterprise Services for over ten years now. Mphasis is poisedto achieve higher levels of operational efficiency while becoming effective Cloud servicesand Cognitive computing business. Our services would help clients realize higher levels ofautomation and convert core IT activities into managed services that drive innovation andreduce operational costs. Mphasis will also assist in modernizing legacy systems andcreating core platforms processes and infrastructure that support digital business acrossthe extended enterprise and deliver higher levels of performance.

DIVIDEND

Your directors are pleased to recommend a final dividend of Rs 17/- per equity share ofRs 10/- each for the financial year ended 31 March 2017 subject to your approval at theensuing Annual General Meeting.

BUY-BACK

The Board of Directors and the shareholders of the Company during the year approvedBuyback of up to 17370078 Equity Shares of the Company representing 8.26% of totalpaid-up equity share capital of the Company at a price of Rs 635/- per equity sharepayable in cash for an aggregate amount of up to Rs 11030 million (Rupees Eleven Thousandand Thirty Million only) excluding any expenses incurred or to be incurred for theBuyback on a proportionate basis under the tender offer method in accordance with theprovisions contained in the Securities and Exchange Board of India (Buy Back ofSecurities) Regulations 1998 and the Companies Act 2013 and rules made thereunder.Further to the above the Company has despatched the letter of offer to the eligibleshareholders holding shares as at the record date i.e. 31 March 2017 after obtainingnecessary approvals and complying with the necessary statutory formalities. The Buybackoffer opened on 12 May 2017 and closed on 25 May 2017. The Company shall make payment toshareholders for the accepted tenders as per the Securities and Exchange Board of India(Buy Back of Securities) Regulations 1998.

ENTERPRISE RISK MANAGEMENT

The Company has an elaborate Enterprise Risk Management (ERM) Programme to proactivelyidentify assess mitigate monitor and report risks across the enterprise. ERM at Mphasisseek to minimize the adverse impact of the risks on our business objectives through riskassessment and mitigation while providing reassurance to Customers ShareholdersEmployees etc. The updates on the development and implementation of the ERM Programme arereviewed by the Audit Committee on a quarterly basis. A detailed analysis on theformulation implementation and monitoring of the Risk Management Plan is available in thesection headed Management Discussion and Analysis of Risks and Concerns.

N I TELLECTUAL PROPERTY RIGHTS

Mphasis recognizes Intellectual Property to be a key business enabler. Your Company hasbeen leveraging its Intellectual Property Assets for delivering differentiated valueofferings to its customers and deliver next-gen experiences. During the year NEXT Labshas filed two patent applications in the area of digital and analytics. Mphasis NEXT Labsfocuses on research and innovation on emergent and future paradigms through disruptiveworld class innovations thought leadership and industry- relevant solutions therebybuilding an Intellectual Property asset portfolio for the Company.

CORPORATE GOVERNANCE

A report on Corporate Governance along with a certificate from the Auditors confirmingthe compliance for the year ended 31 March 2017 as required under SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 is annexed and forms part ofthis report.

EMPLOYEES

In FY'17 Mphasis made significant strides in its quest to attract hire train andinduct best-in-class talent. In line with our culture of Experimentation and CustomerCentricity we ensured to not only hire exceptional talent but also nurture them. On thehiring front Mphasis recruited exceptional talent from the top run engineering collegesacross the country and on the training front the foundation program was entirely revampedto suit the customer needs. This included some of the salient features as optimizedtraining duration exhaustive coverage of all foundational skills greater emphasis andstress on knowledge application continuous monitor of trainee performance and exposure toProject environment through Real-life Lab.

As we maintained our focus on fresh talent your Company is also committed to ensuringa workforce that is empowered happy and enthused about work. Our total rewards programsreflects our egalitarian philosophy and is designed to support the company's culture ofhigh performance and innovation. A variety of benefit choices were introduced last year toassist employees with life stage decisions and optimize their finances through better taxplanning options. ‘Pay for Performance' continues to be the underlying philosophy forvariability in compensation. This was further extended to all managerial levels (forexisting employees) and all new joiners in the Americas ensuring an inclusive andaccountable work environment.

As Mphasis completed 25 years in the business we looked to give back to society inways most meaningful to employees – who are the reason for our growth. The launch ofthe ‘Mphasis Care Policy' for tenured employees is a testimony to this. Eligibleemployees can now apply for interest free loans. Mphasis will also partake in providingeducational assistance to deserving children of employees.

At Mphasis we also believe in creating a stimulating workplace one which creates moreavenues for employees to break the monotony at work. In its true sense we have beensteadily bringing an element of Care and a Sense of pride by driving focused engagementinitiatives from Rewards to Diversity from Fun at workplace to Health from InterestGroup Communities to Communications. ‘The beauty of the world lies in the diversityof its people' and at Mphasis we believe in the same. Every year we celebrate thisdiversity and strengthen it further by hosting an array of activities from financialawareness for women employees to Leader talks with successful Leaders from the Industryand many such initiatives to honour the achievements and contributions of women asshowcased by them to inspire and to be rivalled. Mphasis also hosts mega flagship eventssuch as Bring Your Child to Work Bring your Parents to Work and Mphiesta which areconsortium of fun bonding and celebration at work. Our focus on health has been paramountand our endeavour through initiatives like Yoga Health Talks and Awareness Sessions is tobring it in as a crucial element of engagement at work. We also maintain activecommunities such as Photography and Sports to keep the enthusiasm and the novelty alive atworkplace.

COMMUNITY OUTREACH

CORPORATE SOCIAL RESPONSIBILITY

As front-runners of innovative solutions Mphasis' efforts in Corporate SocialResponsibility hone in on these strengths — bringing ‘disruptive' technologiesinto the realm of Education Livelihood and Inclusion covering the following.By adopting tech-centric models to generate and scale social impact Mphasis strives topropel the inclusion and empowerment of underserved and underrepresented communities. Theprograms expand across the organization's geographies of operation as well as disasteraffected regions in India. The Company has a CSR Policy as required under the provisionsof law and the same is hosted on the website of the Company; www.mphasis.com . The CSRCommittee of the Board approves the CSR Budget and monitors the implementation of the CSRPolicy. Our CSR activities are carried out through Mphasis F1 Foundation.

Education

Mphasis' CSR projects in the space of education endeavors to drive technology-ledinnovation for the Base of the Pyramid (BoP) population by developing solutions toaddress gaps across the education value chain. Headstreams' ‘Arivu-Disha'Program and NASSCOM Foundation's Social Innovation Award for Education are the flagshipprograms supported by the Company under the ambit of Education. Through seed funding andmentorship the award winning program partners strive to improve the quality of schoolingamong marginalized communities using tech-centric models of execution. In 2016 ‘Arivu-Disha'was awarded the NASSCOM Social Innovation Award for Education for its innovativeapproach to improving learning outcomes among government school children.

Livelihood

Mphasis' objective within the skilling ecosystem is to leverage technology to empoweryouth with employable skills required to break the cycle of poverty in a singlegeneration. The Company's livelihood programs harness digital tools to foster jobsecurity reduce information asymmetries and propel sustainable socio- economic progressamong underserved communities. Flagship programs in the livelihood space includeMphasis-DEF Integrated Digital Clusters SkillTrain Mobile App and Mphasis-Nudge Gurukuland are executed in partnership with Digital Empowerment Foundation SkillTrain VillgroInnovations Foundation and Nudge Foundation respectively. SkillTrain won the Manthan Awardin e-Education 2016 for its inventive approach to ensuring digital inclusion in skilling.

Inclusion

As pioneers in the field of Disability Inclusion Mphasis works towards enhancingAccessibility Universal Design and Digital and Mobility solutions for persons withdisabilities. Additionally the Company engaged in rehabilitation of families affected byfloods as well as environmental rejuvenation of lakes.

Flagship programs under the domain of Inclusion are executed in collaboration withNational Centre for the Promotion of Employment for Disabled People (NCPEDP) IndianInstitute of Management- Bangalore (IIMB) United Way of Bengaluru and Habitat forHumanity. The ‘Make India Accessible' Campaign launched in collaboration with NCPEDPwas instrumental in the enactment of the Rights of Persons with Disabilities (RPWD) Act2016.

During the year the Company spent INR 133.56 Million as against mandated spend of Rs129.80 Million. PREVENTION OF SEXUAL HARASSMENT

Your Company's Code of Business Conduct (COBC) provides broad directions as well asspecific guidelines for all business transactions. The emphasis is on human rightsprevention of fraudulent and corrupt practices avoidance of conflict of interestprevention of Sexual Harassment and unyielding integrity at all times. Mphasis iscommitted to the provision of a workplace free of Sexual Harassment ("SH") andto provide a redressal mechanism for all complaints of SH without fear or threat ofreprisals in any form or manner whatsoever. The work place in context of SH is notrestricted to the office but includes extended work areas such as Client's place workrelated travel cafeterias and Company sponsored events to name a few.

In compliance with the Sexual Harassment of women at workplace (Prevention Prohibitionand Redressal) Act 2013 the Company has established Internal Complaints Committees atall its locations. During FY 2016-17 39 complaints were received out of which 38complaints were disposed off in terms of the aforesaid Act as on 31 March 2017. Complaintoutstanding has since been investigated and disposed within the prescribed time limits.

ESTABLISHMENT OF VIGIL MECHANISM

Mphasis Code of Conduct requires directors officers and employees to observe highstandards of business and personal ethics in conduct of their duties and responsibilities.As employees and representatives of the Company they must practice honesty and integrityin fulfilling their responsibilities and comply with all applicable laws and regulations.The Company has a Whistleblower Policy to enable persons who observe unethical practices(whether or not a violation of law) to approach the Whistleblower Custodian withoutrevealing their identity if they choose to do so. This Policy governs reporting andinvestigation of allegations that are breach of Code of Business Conduct. This Policycovers all Mphasis group companies and its affiliates and further extends to all Mphasissuppliers and contractors engaged in rendering the services. There are various channels toreport actual or suspected fraud or violation of the Company's Code of Conduct or Ethicspolicy i.e. through e-mail to the Whistle Blower office at whistleblower@mphasis.comwritten complaint can be dropped into the Whistle blower drop box at the respectiveCompany's location and through Telephone where a complaint can be left at the Whistleblower Hotline. The Chairman of the Audit Committee is the Ombudsperson underWhistle blower Policy. A complaint can be reported to the Ombudsperson (Ombudsperson@mphasis.com)where the Complainant feels that the complaint has not been addressed or actioned in atimely and appropriate manner or if the complaint is against any member of the Whistleblower Committee or the Executive Council.

The Whistle blower policy is published on the Mphasis website making it accessible toall. Mphasis will keep the whistle blower's identity confidential and prohibitsretaliation against a whistle blower with the intent or effect of adversely affecting theterms or conditions of employment (including but not limited to threats of physical harmloss of job punitive work assignments or impact on salary or wages).

DIRECTORS

The Board of Directors of the Company at its meeting held on 27 January 2017 appointedMr. Nitin Rakesh as an additional director on the Board and further as the Chief ExecutiveOfficer and Whole time Director of the Company for a period of 5 years with effect from 29January 2017. The appointment was subject to approval of the shareholders of the Companyat the ensuing Annual General Meeting. Prior to joining Mphasis Mr. Nitin Rakesh was theChief Executive Officer and President of Syntel (a NASDAQ listed IT Services Company). Mr.Nitin Rakesh has a proven track record of delivering profitable growth at industry leadingoperating margins. The Board is confident that his diverse expertise and deep domainexperience will benefit the Company in the times ahead. The Company has received a noticefrom a member under Section 160 of the Companies Act 2013 proposing his candidature tothe office of director. Accordingly necessary resolutions seeking approval of the membersfor appointing Mr. Nitin Rakesh as a director and further as the CEO and Whole timeDirector of the Company is placed before the members for their approval.

Mr. Nitin Rakesh took over as the Chief Executive Officer and Whole time Director fromMr. Ganesh Ayyar whose tenure expired on 28 January 2017. The Board places on record itsappreciation for the services rendered by Mr. Ganesh Ayyar during his tenure.

In accordance with section 152 of the Companies Act 2013 Mr. Dario Zamarian and Mr.Paul James Upchurch will retire by rotation and are eligible for re-election.

The profiles of the present directors including the directors seeking appointment atthe ensuing Annual General Meeting are provided in the Annual Report.

The Board recommends the appointment of the above directors for approval of themembers.

STATUTORY AUDITORS

S R Batliboi & Associates LLP (registration No.101049W) Chartered Accountantswere appointed as the statutory Auditors of the Company under Section 139 of the CompaniesAct 2013 for a term of 3 years from the conclusion of Twenty Fourth Annual GeneralMeeting till the conclusion of Twenty Seventh Annual General Meeting subject to annualratification.

The Company has received a certificate from the Statutory Auditors to the effect thatthe ratification of appointment if made would be in accordance with limits specifiedunder the Companies Act 2013. As required under SEBI Regulations the Auditors haveconfirmed that they hold valid certificate issued by the Peer Review Board of theInstitute of Chartered Accountants of India.

A resolution proposing ratification of their appointment from the conclusion of thisAnnual General Meeting till the conclusion of the next Annual General Meeting of theCompany at a remuneration to be fixed by the Board of Directors and billed progressivelyis submitted at the Annual General Meeting for approval of the members.

SECRETARIAL AUDITOR

The Board had in its meeting held on 31 January 2017 approved appointment of Mr. S PNagarajan Practicing Company Secretary as the Secretarial Auditor of the Company for thefinancial year ended 31 March 2017. As required under the provisions of Section 204 of theCompanies Act 2013 the secretarial audit for Financial year 2017 has been concluded andthe Secretarial Audit Report in Form No. MR-3 is annexed and forms part of the Report.

DIRECTORS' RESPONSIBILITY STATEMENT

Information as per Section 134(5) of the Companies Act 2013 is annexed and forms partof the Report.

BUSINESS RESPONSIBILITY REPORT

Your Company's business responsibility ingrains the spectrum of nine principles ofNational Voluntary Guidelines issued by the Ministry of Corporate Affairs Government ofIndia along with their key elements. This is enabled by suite of frameworks governancesocial objectives codified culture charters policies code of conduct and managementsystems integrated with the business process. A report detailing the businessresponsibility practices for the year ended 31 March 2017 is uploaded on the website ofthe Company at www.mphasis.com and forms part of the Annual Report.

OTHER DISCLOSURES

SUBSIDIARIES

As on 31 March 2017 your Company has subsidiaries in Australia Belgium CanadaFrance Germany India Ireland Mauritius Netherlands People's Republic of ChinaRepublic of Indonesia Philippines Poland Singapore the United Kingdom and the UnitedStates of America. In accordance with section 129 (3) of the Companies Act 2013 theConsolidated Financial Statements are attached to the Annual Report. Further a statementcontaining salient features of the financial statements of subsidiaries in the prescribedForm AOC-1 is annexed to this Report. The statements provides the performance andfinancial position of each of the subsidiaries. The latest audited accounts of thesubsidiary Companies are available for inspection of the members at the Registered Officeof the Company and is also being uploaded on the website of the Company www.mphasis.com.A copy of the same shall be sent to the members upon request.

EMPLOYEES STOCK OPTION PLANS AND RESTRICTED STOCK UNIT PLANS

Your Company's Employee Stock Option Plans (ESOPs) are administered through the MphasisEmployees Equity Reward Trust (earlier BFL Employees Equity Reward Trust) and theRestricted Stock Unit Plans (RSUs) and Mphasis Employees Stock Option Plan - 2012 (ESOP2012 Plan) are administered through Mphasis Employees Benefit Trust. Further all theplans are administered by the ESOP Compensation Committee of the Board.

The shareholders at its Annual General Meeting held on 4 November 2016 approved theMphasis Employee Stock Option Plan - 2016 (ESOP 2016) with the underlying shares notexceeding 8.4 million equity shares. The Company had obtained in-principle approval forthe Mphasis Employee Stock Option Plan - 2016 (ESOP 2016) from BSE Limited on 21 November2016 and The National Stock Exchange of India Limited on 9 November 2016. Further to thisthe ESOP Compensation Committee had granted 3261900 stock options to eligible employeeson 4 January 2017 at a price of Rs 500 per option. Your Company currently has three stockoption plans in operation namely Mphasis Employees Stock Option Plan – 1998 (ESOP1998 Plan) (Version I and II) Mphasis Employees Stock Option Plan – 2004(ESOP 2004)and Mphasis Employee Stock Option Plan – 2016 (ESOP 2016) in addition to MphasisRestricted Stock Unit Plan – 2014 (RSU 2014) and Mphasis Restricted Stock Unit Plan– 2015 (RSU 2015).

During the year 2960 shares were issued pursuant to exercise of options under ESOP1998 Plan Version II 408 shares were issued pursuant to exercise of options under ESOP2004 Plan and 115975 shares were transferred under ESOP 2012 Plan against exercise ofoptions by the employees. Further pursuant to exercise applications made by theemployees the Company has issued 226595 equity shares towards exercise of RSUs under RSU2014 Plan and transferred 218900 equity shares pursuant to exercise of RSUs under RSU2015 Plan.

The information to be disclosed as per Securities and Exchange Board of India (Sharebased Employee Benefits) Regulations 2014 for the year ended 31 March 2017 is annexed tothe Board's Report and also uploaded on the website of the Company at www.mphasis.com.

DIRECTORS' INTEREST AND RELATED PARTY DISCLOSURES

No director was interested in any contracts or arrangements existing during or at theend of the year that was significant in relation to the business of the Company. Nodirector holds any shares or stock option in the Company as on 31 March 2017 except Mr.Nitin Rakesh Chief Executive Officer and Whole time Director who holds 655000 StockOptions. None of the directors had any other interest in the share capital of the Companyas at 31 March 2017. All the transaction entered into with related parties as definedunder Section 2(76) of the Companies Act 2013 and Regulation 23 of the Securities andExchange Board of India (Listing Obligations and Disclosure Requirements) Regulations2015 during the financial year were in the ordinary course of business and are at arm'slength basis. The Company has a policy for dealing with Related Party Transactions whichhas been uploaded on the Company's website at www.mphasis.com .The particulars of thecontract or arrangements with the Related Parties in form AOC-2 is annexed and forms partof this report. SHARE CAPITAL

The Issued Share Capital of the Company as on 31 March 2017 stood at Rs 2104.24 millionand Reserves and Surplus stood at Rs 59420 million (consolidated basis) and Rs 44849million (standalone basis) respectively. PARTICULARS OF EMPLOYEES' REMUNERATION

The statement containing particulars of employees as required under Section 197(12) ofthe Companies Act 2013 read with Rule 5(2) of the Companies (Appointment and Remunerationof Managerial Personnel) Rules 2014 is given in the annexure and forms part of thisreport. However in terms of Section 136(1) of the Companies Act 2013 the report isbeing sent to the members excluding the aforesaid Annexure and shall be available forinspection of the members till the date of the Annual General Meeting at the registeredoffice of the Company during working hours. Any Member interested in obtaining a copy ofthe Annexure may write to the Company Secretary at the Registered Office of the Company.

In terms of proviso to Rule 5(2) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 the particulars of the employees posted and working ina country outside India is not circulated to the members but the same shall be filed withthe Registrar of Companies while filing the Financial Statements and Board's Report.

EXTRACT OF ANNUAL RETURN

The extract of the Annual Return as at 31 March 2017 in Form MGT-9 is annexed and formspart of the Report.

PARTICULARS OF LOANS GUARANTEE AND INVESTMENTS

The particulars of Loans Guarantees and Investments under Section 186 of the CompaniesAct 2013 are disclosed in the financial statements of the Company.

DEPOSITS

Your Company has not accepted any deposits from the public and as such no amount ofprincipal or interest was outstanding as on the date of the Balance Sheet.

PARTICULARS REGARDING CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGEEARNINGS AND OUTGO A. CONSERVATION OF ENERGY :

Your Company's operations involve low energy consumption. Mphasis is committed toconserving energy and efficient usage of energy.

The key facilities have been awarded 5 star 4 star or 3 star rating by Bureau ofEnergy Efficiency Government of India (BEE) in the last 5 years. The rating is nationallyaccepted industry benchmark and Mphasis in India is certified by BEE. Your Company hasbeen awarded by Confederation of Indian Industry an Environment Health and Safety (EHS)award with a rating 3 for one of its facility at Bengaluru appreciating its sustainableinitiatives.

The Company has installed lighting energy savers and LED light fixtures occupancysensors enthalpy system automatic operation of AC system at data centers to minimizepower consumption and solar inverters at certain facilities to promote sustainable energyusage.

The carbon foot prints are monitored on a monthly basis and reported to CarbonDisclosure Project (CDP) an international not-for-profit organization providing the onlyglobal system for companies and cities to measure disclose manage and share vitalenvironmental information. One of the Company's facility at Bengaluru has been certifiedLEED (Leadership in Energy and Environmental Design) Gold by United States Green BuildingCouncil (USGBC).

The Company has also installed energy consumption monitoring tool to monitor the energyconsumption and the carbon foot prints at each location. The data collected by the toolhelps the management in monitoring and optimize the energy consumption at the locations.Our Company is one of the few IT companies in India who have implemented captive renewableenergy generation in multi-locations as part of its sustainability initiatives.

B. TECHNOLOGY ABSORPTION :

Particulars relating to technology absorption are not applicable.

C. FOREIGN EXCHANGE EARNINGS OR OUTGO :
(Rs million)
(a) Foreign Exchange earned in terms of actual inflows during the year 25017
(b) Foreign Exchange outgo in terms of actual outflows during the year 5581

D. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS:

There were no significant material orders passed by the Regulators or the CourtsTribunals impacting the going concern status and companies operations in future.

ACKNOWLEDGEMENT

Your directors acknowledge with thanks the continued support and valuable co-operationextended by the business constituents investors vendors bankers and shareholders of theCompany. The directors place on record their appreciation for the support from theSoftware Technology Parks of India the Department of Communication and InformationTechnology the Government of India Government of Karnataka Telangana MaharashtraTamil Nadu Reserve Bank of India other governmental agencies Trade Associations andNASSCOM. We also thank the government agencies of various other countries where we haveour operations.

Your directors would like to place on record their appreciation for the employees ofthe Company and its subsidiaries at all levels for their hard work and commitment. Theirdedication and competence has ensured that the Company continues to be a significant andleading player in the industry.

For and on behalf of the Board of Directors
Bengaluru Davinder Singh Brar
25 May 2017 Chairman

DIRECTORS' RESPONSIBILITY STATEMENT

In compliance with Section 134(5) of the Companies Act 2013 your directors confirmand state as follows for the financial year ended 31 March 2017:

1. That in the preparation of the annual accounts the applicable accounting standardshad been followed along with proper explanation relating to material departures;

2. That the directors had selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the company at the end of thefinancial year and of the profit and loss of the company for that period;

3. That the directors had taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of this Act for safeguardingthe assets of the company and for preventing and detecting fraud and other irregularities;

4. That the directors had prepared the annual accounts on a going concern basis;

5. That directors had devised proper systems to ensure compliance with the provisionsof applicable laws and such systems are adequate and operating effectively; and

6. That as regards Internal Financial Controls the directors to the best of theirknowledge and belief and according to the information and explanations provided makes thefollowing statements: a) that we are responsible for establishing andmaintaining internal financial controls to be followed by your Company that are adequateand operate effectively. Your Company's internal financial controls are deployed through aframework that addresses material risks in your Company's operations and financialreporting objectives. The framework is a combination of entity level controls (includingEnterprise Risk Management Legal Compliance Framework Internal audit and Anti-fraudMechanisms such as Ethics Framework Code of Conduct Whistle Blower Policy etc.)process level controls information technology based controls period end financialreporting and closing controls.

Internal financial controls cannot provide absolute assurance of achieving financialoperational and compliance reporting objectives because of its inherent limitations. Alsoprojections of any evaluation of the internal financial controls to future periods aresubject to the risk that the internal financial control may become inadequate because ofchanges in conditions or that the degree of compliance with the policies or proceduresmay deteriorate. b) Your Company's management has carried out the evaluation ofdesign and operative effectiveness of these controls and noted no significant deficiencies/ material weaknesses that might impact financial statements as at the balance sheet date.

For and on behalf of the Board of Directors
Bengaluru Davinder Singh Brar
25 May 2017 Chairman

DECLARATION UNDER SEBI (LISTING OBLIGATIONS AND DISCLOSURE REQUIREMENTS) REGULATIONS2015 REGARDING COMPLIANCE WITH CODE OF CONDUCT

As required under SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 it is hereby confirmed that for the year ended 31 March 2017 the directors ofMphasis Limited have affirmed compliance with the Code of Conduct for Board Members asapplicable to them and members of the senior management have also affirmed compliance withthe Employee Code of Conduct as applicable to them.

Bengaluru Nitin Rakesh
17 May 2017 Chief Executive Officer

FORM AOC - I

Statements containing salient features of the financial statement of subsidiaries /associate companies / joint ventures (Pursuant to first proviso to sub-section(3) ofsection 129 read with rule 5 of the Companies (Accounts) Rule 2014)

Share Capital
Sl. No. Name of Subsidiary Reporting Period Reporting Currency Exchange Rate Equity Prefer- ence Total Reserves & Surplus Total assets Total liabilities Details of investment (Other than in subsidiaries) Turnover Profit before taxation Profit / (Loss) Provision for taxation Expense / (Credit) Profit after taxation Profit / L ( oss) Proposed Dividend % of sharehold- ing
1 Mphasis Corporation 01-04-2016 to 31-03-2017 USD 65.040 0.00 - 0.00 5902.65 15998.80 10096.15 - 25387.23 1059.61 435.79 623.82 - 100
2 Mphasis Deutscheland GmbH 01-04-2016 to 31-03-2017 EUR 70.674 2.10 - 2.10 63.66 77.26 11.38 - 87.98 14.53 6.65 7.88 - 91
3 Mphasis Australia Pty Limited 01-04-2016 to 31-03-2017 AUD 49.567 0.05 - 0.05 501.00 765.07 264.01 - 1573.88 167.88 68.73 99.15 - 100
4 Mphasis (Shanghai) Software & Services 01-01-2016 to 31-12-2016 CNY 9.453 238.76 - 238.76 (126.87) 355.74 243.85 - 133.46 36.74 11.54 25.20 - 100
Company Ltd
5 Mphasis Consulting Limited 01-04-2016 to 31-03-2017 GBP 81.648 1.34 - 1.34 542.40 557.62 13.89 - 100.08 16.15 3.35 12.80 - 100
6 Mphasis Belgium BVBA 01-04-2016 to 31-03-2017 EUR 70.674 0.43 - 0.43 255.91 529.58 273.24 - 985.22 116.00 38.49 77.51 - 100
7 Mphasis Europe BV 01-04-2016 to 31-03-2017 EUR 70.674 477.01 - 477.01 11168.70 11734.01 88.30 - 215.84 (24.49) (1.81) (22.68) - 100
8 Mphasis Pte Ltd 01-04-2016 to 31-03-2017 SGD 46.524 152.86 - 152.86 195.81 431.82 83.16 - 494.86 117.06 16.60 100.46 - 100
9 Mphasis UK Limited 01-04-2016 to 31-03-2017 GBP 81.648 0.24 - 0.24 10392.31 11258.30 865.75 - 2517.21 236.42 50.12 186.30 - 100
10 Mphasis Software & Services (India) Private Limited 01-04-2016 to 31-03-2017 INR 1.000 100.00 - 100.00 1443.47 1575.96 32.49 1400.82 168.48 172.09 35.11 136.98 - 100
11 Msource Mauritius Inc. 01-04-2016 to 31-03-2017 USD 65.040 596.31 - 596.31 34.76 641.94 10.86 - - (0.95) - (0.95) - 100
12 Msource (India) Private Limited 01-04-2016 to 31-03-2017 INR 1.000 66.85 - 66.85 7883.07 8366.01 416.10 6593.94 2113.71 920.53 205.20 715.33 - 100
13 Mphasis Ireland Limited 01-04-2016 to 31-03-2017 EUR 70.674 0.56 - 0.56 27.30 29.03 1.17 - 16.70 1.06 0.35 0.71 - 100
14 Mphasis Lanka (Private) Limited 01-04-2016 to 31-03-2017 LKR 0.430 55.49 - 55.49 (55.49) - - - - - - - - 100
15 Mphasis Infrastructure Services Inc. 01-04-2016 to 31-03-2017 USD 65.040 0.05 - 0.05 (1025.17) 37.88 1063.00 - 74.61 (3.91) 0.15 (4.06) - 100
16 Mphasis Poland s.p.z.o.o. 01-04-2016 to 31-03-2017 PLN 16.484 1.99 - 1.99 (16.38) 78.26 92.65 - 116.14 2.69 (5.39) 8.08 - 100
17 PT. Mphasis Indonesia 01-04-2016 to 31-03-2017 IDR 0.005 4.60 - 4.60 (4.27) 2.13 1.78 - 0.01 (1.21) 0.23 (1.44) - 100
18 Mphasis Wyde Inc. 01-04-2016 to 31-03-2017 USD 65.040 0.00 - 0.00 9513.75 16172.44 6658.68 - - 2089.79 243.22 1846.57 - 100
19 Wyde Corporation 01-04-2016 to 31-03-2017 USD 65.040 3.11 - 3.11 (591.44) 1041.16 1629.49 - 657.94 (68.77) - (68.77) - 100
20 Wyde Inc. S.A 01-04-2016 to 31-03-2017 EUR 70.674 2.53 - 2.53 (588.57) 566.29 1152.33 - 457.40 (281.71) - (281.71) - 100
21 Wyde Solutions Canada Inc. 01-04-2016 to 31-03-2017 CAD 48.628 0.05 - 0.05 (145.31) (5.26) 140.00 - 29.08 (22.30) - (22.30) - 100
22 Wyde Tunisie SARL 01-04-2016 to 31-03-2017 TND 28.875 - - - - - - - - - - - - 100
23 Mphasis Philippines Inc 01-04-2016 to 31-03-2017 PHP 1.296 11.34 - 11.34 8.01 21.24 1.88 - - 0.13 0.06 0.07 - 100
24 Digital Risk LLC 01-04-2016 to 31-03-2017 USD 65.040 942.62 - 942.62 3306.27 7256.54 3007.64 - 1996.76 (162.83) - (162.83) - 100
25 Digital Risk Mortgage Services LLC 01-04-2016 to 31-03-2017 USD 65.040 1671.55 - 1671.55 1083.68 4705.61 1950.37 - 6111.86 954.12 - 954.12 - 100
26 Digital Risk Compliance Services LLC 01-04-2016 to 31-03-2017 USD 65.040 - - - (2099.58) (2.73) 2096.84 - - - - - - 100
27 Digital Risk Analytics LLC 01-04-2016 to 31-03-2017 USD 65.040 - - - (321.91) (49.24) 272.67 - - (14.80) - (14.80) - 100
28 Investor Services LLC 01-04-2016 to 31-03-2017 USD 65.040 - - - 551.58 1163.51 611.95 - 631.71 247.12 - 247.12 - 100
29 Digital Risk Valuation Services LLC 01-04-2016 to 31-03-2017 USD 65.040 - - - (1112.62) 287.71 1400.33 - 144.93 (6.64) - (6.64) - 100
Total 4329.84 - 4329.84 46786.72 83596.68 32479.96 7994.77 44015.09 5564.31 1108.39 4455.92 -

Notes :

1 There are no other Subsidiaries which are yet to commence operation.

2 On 22 July 2013 the Board of Directors of Mphasis Lanka (Private) Limited a whollyowned subsidiary of Mphasis Limited resolved to close down its operations.

3 The Company does not have any Associates & Joint Venture.

4 Exchange rate applied is at 31 March 2017.

5 There are no dividend proposed from any Subsidiaries.

6 The reporting period of the Subsidiaries is 31 March of every Year except Mphasis (Shanghai) Software & Services Company Limited which is 31 December of every year.

For and on behalf of the Board of Directors
Nitin Rakesh Narayanan Kumar
Chief Executive Officer Director
V. Suryanarayanan A. Sivaram Nair
Bengaluru Executive Vice President & Executive Vice President Company Secretary
25 May 2017 Chief Financial Officer General Counsel & Ethics Officer

DETAILS OF EMPLOYEES STOCK OPTIONS/RESTRICTED STOCK UNITS AS ON 31 MARCH 2017

DISCLOSURE UNDER SEBI (SHARE BASED EMPLOYEE BENEFITS) REGULATIONS 2014 FOR THEFINANCIAL YEAR ENDED 31 MARCH 2017

Stock Options/ Restricted Stock Units (RSUs) granted to employees of Mphasis Limitedand its subsidiaries:

ESOP 1998
Particulars Version I Version II ESOP 2004 ESOP 2012 ESOP 2016 RSU 2014 RSU 2015
Date of Shareholders' Approval

31 July 1998

12 May 2004 20 January 2012 4 November 2016 30 July 2014 9 September 2015
Total Number of Stock Options/Restricted

465000 note 1

593126 note 1 2000000 8400000 550000 2500000
Stock Units approved under the Plan
Vesting Requirements Time based vesting Time and Performance based vesting
Maximum term of Stock Options/Restricted Until exercise 10 years 10 years 3 years 5 years 3 years 3 years
Stock Units granted (refers to Exercise Period)
Source of shares (Primary Secondary or Combination ( Combination involves primary market issuance as well as secondary market acquisition ) Primary Primary Primary Combination Primary Combination Combination
Pricing formula

Refer table below Note 4

Total number of Stock Options/Restricted Stock 47000 94400 2356 146450 Nil 328640 423050
Units outstanding at the beginning of the year
(2016-2017)
Number of Stock Options/Restricted Stock Units granted during the year - - - - 3916900 - -
Number of options lapsed and forfeited during the year - 81624 350 30475 31800 13500 11250
No. of Stock Options/RSUs vested during the year - - - - - 321103 411800
No. of Options/RSUs exercised during the year - 2960 408 115975 - 226595 218900
Total number of shares arising as a result of exercise of Options - 2960 408 115975 - 226595 218900
Money realized by exercise of options during the year (In Rupees) - 251437 20539 47578744 - 2265950 2189000
Number of Stock Options/Restricted Stock Units outstanding as at the end of the year 47000 9816 1598 - 3885100 88545 192900
Total number of options exercisable at the end of the year 47000 9816 1598 - - 88545 192900
Loan repaid by the Trust during the year from the exercise price received NA NA NA 47578744 - - 2189000
Employee Wise details of Options granted to:
(a) Senior Managerial Personnel
- Mr. Nitin Rakesh - - - - 655000 - -
CEO and Whole time Director
- Mr. Suryanarayanan V CFO - - - - 30000 - -
- Mr. A Sivaram Nair Company Secretary - - - - 25000 - -
(b) Employees who were granted during any one year options amounting to 5% or more of the options granted during the year:
- Mr. Nitin Rakesh CEO and Whole time Director - - - - Grant to CEO as mentioned above - -
- Mr. Dinesh Venugopal - - - - 200000 - -
President - Direct-Core Business and Digital
(c) Identified employees who were granted options during any one year equal to or exceeding 1% of the issued capital (exceeding outstanding warrants and conversion) of the company at the time of grant. - - - - - - -

 

Valuation of Stock Options and their related impact on Profits and EPS The Company computes Employee Compensation Cost using the fair value method of accounting except for Employee Stock Option 1998 Plan (ESOP 1998 Plan) and Employee Stock Option 2004 Plan (ESOP 2004 Plan) wherein the Employee Compensation Cost is computed based on intrinsic value method. The differential value is Nil for the year ended 31 March 2016 if the fair value of the ESOPs were considered for ESOP 1998 Plan and ESOP 2004 Plan instead of the intrinsic value. Consequently there is no impact on profits and Earnings Per Share.
Weighted Average exercise price and weighted average fair value of options during the year whose exercise price either equals or exceeds or is less than the market price (Rs) A description of method and significant assumption used during the year to estimate the fair values of options. Refer to the additional disclosures given below Note 5

Notes:

1. Refers to Options as approved by shareholders and accordingly excludes theadjustment for Bonus Issues.

2. There has been no variation in the Employee Stock Option and Restricted Stock UnitsPlan of the Company during the year.

3. The diluted EPS of Mphasis Group for the financial year ended 31 March 2017pursuant to issue of shares on exercise of options is Rs 37.63 per share.

4. Pricing Formulae for the stock option/RSU schemes:

Schemes Pricing Formulae
ESOP 1998 (version I) No options have been granted under this Scheme during the financial year 2016-17. Earlier under this plan the options were granted at a strike price of Rs 275 per share. The price of Rs 275 was arrived at based on SEBI Guidelines on Pricing for Preferential Allotment.
ESOP 1998 (version II) No options have been granted under this Scheme during the financial year 2016-17.
Earlier for employees in service as on 10 January 2000 the market price prevalent on the 15th day from the Board Meeting held on 10 January 2000 i.e. Rs 795 per share and for all the recruits thereafter market price prevalent on the date of joining unless the ESOP Committee decides otherwise was taken as the grant price. For options granted from September 2003 the grant price was calculated as per sub clause 10 of clause 2.1 of the amendment to SEBI (Employees Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines 1999 dated 30 June 2003 which was the average of the two weeks high and low price of share preceding the date of grant of option on the stock exchange on which the shares of the Company are listed.
ESOP 2000 No options have been granted under this Scheme during the financial year 2016-17.
Earlier for employees in the service of the Company as on 25 July 2000 the market price prevalent on 25 July 2000 i.e. Rs 494.20 per share was taken as the grant price and for employees joining thereafter the market price prevalent on the last working day of the month in which they join was taken as the grant price. For options granted from September 2003 the grant was calculated as per sub clause 10 of clause 2.1 of the amendment to SEBI (Employees Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines 1999 dated 30 June 2003 which was the average of the two weeks high and low price of share preceding the date of grant of option on the stock exchange on which the shares of the Company are listed.

 

Schemes Pricing Formulae
ESOP 2003 No options have been granted under this Scheme during the financial year 2016-17. Earlier for options granted from September 2003 the grant price was calculated as per sub clause 10 of clause 2.1 of the amendment to SEBI (Employees Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines 1999 dated 30 June 2003 which is the average of the two weeks high and low price of shares preceding the date of grant of option on the stock exchange on which the shares of the Company are listed.
ESOP 2004 No options have been granted under this Scheme during the financial year 2016-17.
Program A
The original exercise price is as per the original grant made by MsourcE Corporation while granting its options converted at the exchange rate between USD and INR as on 12 May 2004 and as adjusted for the swap ratio of the MsourcE acquisition and the bonus shares issued by Mphasis Limited after 12 May 2004.
Program B
The Market Price as per the applicable guidelines prescribed by Securities Exchange Board of India (SEBI) from time to time.*
ESOP 2012 No options have been granted under this Scheme during the financial year 2016-17.
In terms of the scheme each stock options granted entitles the holder thereof with an option to apply for and be issued one equity share of the Company at an exercise price of Rs 410.25 per share being the Market Price*.
RSU 2014 No RSUs have been granted under this Scheme during the financial year 2016-17.
In terms of the scheme each of the Restricted stock units granted entitles the holder thereof with an option to apply for and be issued one equity share of the Company at an exercise price of Rs 10 per share.
RSU 2015 No RSUs have been granted under this Scheme during the financial year 2016-17.
In terms of the scheme each of the Restricted stock units granted entitles the holder thereof with an option to apply for and be issued one equity share of the Company at an exercise price of Rs 10 per share.
ESOP 2016 As per the ESOP 2016 Plan the stock options are granted at the Market Price subject to a discount up to twenty per cent (20%) as may be determined by the Compensation Committee at the time of Grant.
During the year 2016-17 3916900 stock options have been granted under this Plan. Each of the stock options granted entitles the holder thereof with an option to apply for and be issued one equity share of the Company at an exercise price of Rs 500 per share.

* The present Securities and Exchange Board of India (Share based EmployeeBenefits) Regulations 2014 defines ‘Market Price' as the "latest availableclosing price on a recognized stock exchange on which the shares of the company are listedon the date immediately prior to the relevant date.."

5. ADDITIONAL DISCLOSURES

1) Weighted average exercise price and weighted average fair value of options:

Plan Weighted Average Exercise Price (Rs) Weighted Average Fair Value (Rs )
ESOP 1998 Version I - -
ESOP 1998 Version II 84.94 66.44
ESOP 2004 50.34 32.85
ESOP 2012 410.25 110.26
RSU 2014 10.00 359.61
RSU 2015 10.00 435.22
ESOP 2016 - -

Stock Options issued under ESOP 1998 Version I and ESOP 2016 Plans were notexercised during the financial year ended 31 March 2017. Accordingly the Weighted AverageExercise Price and the Weighted Average Fair Value have not been provided.

2) Methods and significant assumptions:

Your Company has adopted the Black Scholes option pricing model to determine the fairvalue of stock options with the following significant assumptions:

Sl. No. Assumption
1 Risk free interest rate 5.78% to 8.20%
2 Expected Option life 1 to 5 years
3 Expected volatility 29.51% to 67.12%
4 Expected dividend yield % 0.66% to 3.94%
5 Market price on date of grant ESOP 1998 Version I -
(weighted average value of shares) (Rs) ESOP 1998 Version II 516.88
ESOP 2004 304.00
ESOP 2012 415.20
RSU 2014 399.15
RSU 2015 479.75
ESOP 2016 -
6 Whether and how any other features of the option grant were incorporated into the measurement of fair value such as a market condition NA
7 How expected volatility was determined and explanation of the extent to which expected volatility was based on historical volatility. The expected volatility was determined based on historical volatility data for last 12 months from the date of grant

Note: Stock Options issued under ESOP 1998 Version I and ESOP 2016 Plans were notexercised during the financial year ended 31 March 2017.

DETAILS RELATED TO TRUSTS

i. General Information on all Schemes :

Name of the Trust Details of the Trustee(s) Amount of Loan disbursed by the Company during the year Amount of loan outstand- ing (repayable to Company) as at the end of the year Amount of loan if any taken from any other source for which company/any company in the group has provided any security or guarantee Any other contribution made to the Trust during the year
( Rs ) (Rs ) (Rs ) (Rs)
Mphasis Employees Ms. Saraswathy Srikanth
Equity Reward Trust Mr. Kannan Sriraman Nil Nil Nil Nil
Mr. Venkatesh Radhakrishnan
Mphasis Employees Ms. Saraswathy Srikanth
Benefit Trust Mr. Kannan Sriraman Nil 433970 Nil Nil
Mr. Venkatesh Radhakrishnan

ii. Brief details of transactions in shares by the Trust

Description Mphasis Employees Equity Reward Trust Mphasis Employees Benefit Trust
Number of shares held as at 1 April 2016 3360 Refer note 345890
Number of shares acquired during the year through
a. Primary Issuance 3368 226595
b. Secondary acquisition Nil Nil
- % age of paid up share capital as at 31 March 2016 NA NA
- Weighted Average cost of acquisition (Rs) NA NA
Number of shares transferred to the employees against exercise of Stock Options/Restricted Stock Units 4208 571545
Number of shares sold along with the purpose thereof Nil Nil
Number of shares held at 31 March 2017 2520 940

Note: Includes 840 shares allotted on 2 March 2016 which was credited to the employeeon 1 April 2016.

iii. n case of secondary acquisition of shares by theI Trust Name of the Trust: MphasisEmployees Benefit Trust

Description Number of Shares As a percentage of paid up equity capital as at the end of the year immediately preceding the year in which shareholders' approval was obtained
Held at the beginning of the year 345890 0.16Refer Note
Acquired during the year - -
Number of shares allotted during the year 226595 0.11Refer Note
Sold during the year - -
Transferred to the employees during the year 571545 -
Held at the end of the year 940 -

Note: Considered the paid-up equity share capital as at 31 March 2015

For and on behalf of the Board of Directors
Bengaluru Davinder Singh Brar
25 May 2017 Chairman

FORM - AOC-2

Form for disclosure of particulars of contracts/arrangements entered into by thecompany with related parties referred to in subsection (1) of section 188 of the CompaniesAct 2013 including certain arm's length transactions under third proviso thereto

(Pursuant to clause (h) of sub-section (3) of section 134 of the Companies Act 2013and Rule 8(2) of the Companies (Accounts) Rules 2014)

1. Details of contracts or arrangements or transactions not at arm's length basis– (a) Name(s) of the related party and nature of relationship (b) Nature ofcontracts/arrangements/transactions (c) Duration of thecontracts/arrangements/transactions

(d) Salient terms of the contracts or arrangements or transactions including the valueif any Nil (e) Justification for entering into such contracts or arrangements ortransactions (f) Date(s) of approval by the Board } (g) Amount paid as advances if any:(h) Date on which the special resolution was passed in general meeting as required underfirst proviso to section 188

2. Details of material contracts or arrangement or transactions at arm's length basis(a) Name(s) of the related party and nature of relationship:

1. Hewlett-Packard Enterprise Company (HPE) Palo Alto (USA) and itssubsidiaries and group companies (Related Parties till 31 August 2016)

2. Subsidiaries of Mphasis Limited.

(b) Nature of contracts/arrangements/transactions: i. Availing and Rendering of IT& ITES Services; ii. Purchase and Sale of Fixed Assets; iii. Payment and Receipt ofSub-lease rent to/from subsidiaries; and iv. Placing and Receipt of Inter CorporateDeposits with/from the subsidiaries.

(c) Duration of the contracts/arrangements/transactions:

The services are availed and provided based on the agreements entered into and amendedfrom time to time.

(d) Salient terms of the contracts or arrangements or transactions including the valueif any:

The value of the transactions with HPE and its subsidiaries and the subsidiaries of theCompany are disclosed under the Related Party schedule to the financial statements for theyear ended 31 March 2017. Please refer to Note 40 of the consolidated financial statementsand Note 38 of the standalone financial statements of the Company.

The Company had entered Amended and Re-stated Standard Services Agreement ("HPEAgreement") with HPE for the above transactions for the Initial term of 5 yearswhich shall automatically be renewed for 3 consecutive terms of 2 years. The minimumrevenue commitment by HPE is $ 990 Mln in 5 years. The monetary value of services isdetermined by the rate table where applicable and in other cases the value will bedetermined when the Statement of Works (SOWs) are negotiated and finalized.

(e) Date(s) of approval by the Board if any:

Nil as the contracts are in Ordinary Course of Business and at Arm's length basis.

(f) Amount paid as advances if any:

Please refer to related party schedule in the financial statements.

Note: The term material related party transaction is as defined under the ListingRegulations. Further to the change of control HPE and its subsidiaries have ceased to bea related party effective 1 September 2016.

For and on behalf of the Board of Directors
Bengaluru Davinder Singh Brar
25 May 2017 Chairman