Your Directors are pleased to present the Twenty Fourth Annual Report on the businessand operations of your Company alongwith the Audited Annual Accounts for the FinancialYear ended March 31 2016 (FY2016).
FINANCIAL PERFORMANCE OF THE COMPANY
The highlights of the financial results for the Financial Year 2015-16 are as follows:
| ||(Figures in Rs.mn except for EPS) |
|Particulars ||FY 2015-16 ||FY 2014-15 |
|Consolidated Revenues ||26824 ||23725 |
|Standalone financials || || |
|Income from operations ||14678 ||13461 |
|Other Income ||411 ||224 |
|Total Income ||15089 ||13685 |
|Profit before depreciation and taxes ||3073 ||2479 |
|Depreciation ||828 ||665 |
|Exceptional Item ||6 ||135 |
|Provision for tax & (deferred tax) ||299 ||203 |
|Profit After Tax ||1940 ||1476 |
|Earning Per Share (Basic) (In Rs.) ||31.75 ||24.25 |
Brief description of the Companys working during the year and state ofCompanys affair
During the Financial Year under review the Company continued to engage with itscustomers around the world as a value-adding partner bringing new ideas and more valueinto various aspects of their business. At the same time it also acquired new customerrelationships won multiple new deals and expanded its offerings portfolio.RevenuesduringFY2016increased13%onaconsolidated basis to Rs. 26824 million from Rs.23725 million in FY2015. This growth was driven by the Companys higherinternational business and enhanced presence in Digital services aided by its acquisitionof a majority (51%) stake in Incessant Technologies Pvt. Ltd. in May 2015. Revenues fromthe export markets grew 17.2% during FY2016 while Digital Services now contributes 15% ofconsolidated revenues. As a result operating profits (EBITDA) for the year increasedsignificantly rising 37% to Rs 4733 million from Rs 3457 million in the precedingFinancial Year. EBITDA margin for FY2016 stood at 17.6% representing a substantialexpansion compared to 14.6% in FY2015. Higher revenues and robust margin expansionresulted in a strong net earnings growth for the year under review with a consolidatedProfit after Tax (PAT) of Rs 2800 million for FY2016 up 146% from Rs 1141 million inthe preceding Financial Year. Cash flows for the Company improved during the course of theyear under review with better collections as reflected in lower receivable days at 80 atthe end of the year (compared to 93 days a year ago) and higher cash & bank balancesat Rs 4241 million as on March 31 2016 (compared to Rs 3375 million on March 31 2015)on a consolidated basis.
The Company recorded several significant operating accomplishments during the yearwith multiple new engagements large deal closures and the launch of new initiativesaimed at capitalizing on emerging opportunities in the marketplace. In terms of customeracquisition the Company added 28 new clients in FY2016 higher than 19 added in FY2015and 16 added in FY2014. The Company was also able to win some large deals including onewith the UK Regulatory Body Ofcom. The value of the contract with Ofcom is 23 millionover a six-year period which includes an initial term of 4 years and extensions. Throughthis engagement NIIT Technologies will help Ofcom manage its infrastructure andapplication systems and offer customer-focused service to improve users experienceof ICT services. The Companys ability to continually win deals in an increasinglycompetitive environment reflects its capabilities as well as the benefits of a reinforcedfront-end team created over the past couple of years. On the back of these customeracquisitions and deal wins the Company was able to secure fresh orders worth $420 millionduring FY2016 of which 93% came from international markets. The order book executableover the next 12 months as on March 31 2016 stood at $301 million.
During the year the Company continued to make ongoing enhancements to its existingcapabilities through investments in new emerging technologies partnerships andappropriate skills to deliver exceptional customer value and operational excellence. Itcompleted some key flagship digital experience projects for several clients and securedmultiple new Digital engagements. In addition to that it expanded the capability of itsadvanced analytics platform Digital Foresight. The Company also made a strong foray intoAutomation and Robotics launching intelligent automation for business operations aimedat driving greater business benefits for its clients globally. Towards this end theCompany has partnered with UiPath a Software Company that specializes in Robotic ProcessAutomation (RPA). The Managements Discussion & Analysis (MD&A) of theCompanys global business during FY2016 and outlook along with a discussion ofinternal controls & risk management and mitigation practices appears separately inthis Annual Report. Reports on Corporate Governance and Corporate Social Responsibility(CSR) too are provided in this Annual Report.
The Board has recommended a dividend of Rs. 10/- per equity share of face value Rs.10/-each (previous year Rs. 9.50 per equity share) amounting to Rs. 714 million (inclusive oftax of Rs. 103 million) subject to approval of the shareholders at the ensuing AnnualGeneral Meeting.
Material changes and commitments if any affecting the financial position of theCompany which have occurred between the end of the Financial Year of the company to whichthe financial statements relate and the date of the Report & change in nature ofbusiness if any
There has been no material change in the nature of business of the Company during theyear and subsequent to the close of the Financial Year to which the Balance Sheet andFinancial Statements relate and the date of the Report like settlement of taxliabilities operation of patent rights depression in market value of investmentsinstitution of cases by or against the company sale or purchase of capital assets ordestruction of any assets etc.
COMPANIES ACT DISCLOSURES & CORPORATE GOVERNANCE
Extract of Annual Return
In accordance with Section 134(3)(a) of the Companies Act 2013 an extract of AnnualReturn is enclosed in (Annexure A).
Number of meetings of the Board
The Board of Directors of the Company met 6 (six) times in the FY2015-16. The detailspertaining to the Board Meetings and attendance are provided in the Corporate GovernanceReport. The intervening gap between two Board Meetings was within the period prescribedunder Companies Act 2013.
Directors Responsibility Statement
As required under Section 134(3)(c) read with 134(5) of the Companies Act 2013 theBoard of Directors of the Company hereby states and confirms that:-(a) in the preparationof the Annual Accounts the applicable Accounting Standards have been followed along withproper explanation relating to material departures; (b) the Company had selected suchaccounting policies and applied them consistently and made judgments and estimates thatare reasonable and prudent so as to give a true and fair view of the state of affairs ofthe Company at the end of the Financial Year and of the Profit & Loss of the Companyfor that period; (c) proper and sufficient care has been taken 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;
(d) the Annual Accounts are prepared on a going concern basis; (e) the internalfinancial controls are laid to be followed by the Company and that such internal financialcontrols are adequate and are operating effectively. (f) proper systems have been devisedto ensure compliance with the provisions of all applicable laws and that such systems areadequate and operating effectively.
Directors and Key Managerial Personnel a. Retirement by rotation of Mr. Vijay K Thadani(DIN 00042527) Director
In accordance with the provisions of Section 152(6) of the Companies Act 2013 Mr.Vijay K Thadani Director (DIN 00042527) will retire by rotation at the ensuing AnnualGeneral Meeting and being eligible offers himself for re-appointment. The Boardrecommends his re-appointment at the ensuing Annual General Meeting of the Company. b.Independent Directors
Pursuant to the provisions of Section 149 of the Company Act 2013 Mr. Amit SharmaMr. Surendra Singh and Mr. Ashwani Puri were appointed as Independent Directors till March31 2019 at the Annual General Meeting of the Company held on July 07 2014. Further Ms.Holly Jane Morris was appointed as woman Independent Director till March 31 2017 at theAnnual General Meeting of the Company held on August 03 2015.
Statement on declaration by the Independent Directors
All the Independent Directors have given declarations that they meet all therequirements specified under Section 149(6) of the Companies Act 2013 and SEBI (ListingObligations & Disclosure Requirements) Regulations 2015 for holding the position ofIndependent Director in the Company.
During the year the Non-Executive Directors of the Company had no pecuniaryrelationship or transactions with the Company other than the sitting fees commission andreimbursement of expenses incurred by them for the purpose of attending meetings of theCompany.
Familiarization program of Independent Directors
The details of the Familiarization program of Independent Directors are available onthe website of the Company http://www.niit-tech.com/investors/Familiarization-Programme-Independent-Directors. pdf. Further at the time of appointmentof an Independent Director the Company issues a formal letter of appointment outlininghis/her role functions duties and responsibilities.
c. Key Managerial Personnel Pursuant to the provisions of Section 203 of theCompanies Act 2013 the Company has the following
Directors/employees as Whole-time Key Managerial Personnel as on March 31 2016: a) Mr.Rajendra S Pawar (DIN 00042516) Chairman & Managing Director b) Mr. ArvindThakur (DIN 00042534) - Chief Executive Officer & Jt. Managing Director c) Mr. AmitKumar Garg - Chief Financial Officer d) Mr. Lalit Kumar Sharma - Company Secretary &Legal Counsel
Changes during the year:
- Ms. Pratibha Advani relinquished from the position of Chief Financial Officer w.e.f.May 07 2015 and Mr. Amit Roy took over as Chief Financial Officer of the Company from May08 2015 till December 13 2015. Thereafter Mr. Amit Kumar Garg was appointed as theChief Financial Officer w.e.f. December 14 2015.
- Ms. Monika Arora resigned from the office of Company Secretary w.e.f the close ofbusiness hours on May 31 2015 and subsequently Mr. Lalit Kumar Sharma was appointed asCompany Secretary & Legal Counsel w.e.f June 01 2015.
Deposits from Public
The Company has not accepted any Deposits under Chapter V of the Companies Act 2013during the year and hence no amount of principal or interest was outstanding on the dateof the Balance Sheet.
Share Capital a) Issue of equity shares with differential rights or sweat equity shares
During the year the Company did not issue any equity shares with differentialrights/sweat equity shares under Companies (Share Capital and Debentures) Rules 2014.
b) Issue of Employee Stock Options During the year the Company issued 141625Equity shares on the exercise of stock options under the Employee Stock Option Scheme ofthe Company (ESOP 2005). Due to this the outstanding issued subscribed and Paid-upEquity Capital increased from Rs. 610448990 to Rs. 611865240 as at March 31 2016pursuant to Rule 12(9) of Companies (Share Capital and Debentures) Rules 2014.Thegrantwise details of the Employee Stock Option Scheme is partially provided in the Notesto Accounts of the Financial Statement in Annual Report and a comprehensive note on thesame forms part of the Board Report which is available on the website of the Company andthe URL for the same is http://www.niittech.com/investors/otherdisclosures or maybe obtained from the Company and is open for inspection at the Registered Office of theCompany.
c) Provision of money by Company for purchase of its own shares by employees or bytrustees for the benefit of
In terms of Rule 16(4) of Companies (Share Capital and Debentures) Rules 2014 theCompany is not exercising the voting rights directly by the employees in respect of sharesto which the scheme relates.
The Audit Committee of the Company is constituted as per Section 177 of the CompaniesAct 2013 & Regulation 18 of the SEBI Listing Regulations 2015 consisting ofmajority of Independent Directors.
The composition of the Audit Committee and details of the Meetings and attendanceduring the FY2015-16 are as under:
|Name of the Committee member ||Category ||Designation || |
Number of meetings during the Financial Year 2015-16
|Dates of meetings held during the year |
| || || ||Held ||Attended || |
|Mr. Ashwani Puri ||Independent Director ||Chairman ||6 ||6 ||April 15 2015 |
| || || || || ||May 04 2015 |
|Mr. Surendra Singh ||Independent Director ||Member ||6 ||6 ||July 13 2015 |
|Mr. Vijay K Thadani ||Non-Executive Promoter Director ||Member ||6 ||6 ||October 15 2015 |
| || || || || ||January 14 2016 |
|Mr. Amit Sharma ||Independent Director ||Member ||6 ||6 ||March 21 2016 |
Mr. Ashwani Puri is the Chairman of the Committee and Mr. Lalit Kumar Sharmaacts as Secretary to the Committee. The Board had accepted all the recommendations of theAudit Committee made during the year. The details pertaining to the no. of meetings of theCommittee held during the year and terms of reference functioning and scope are given inthe Corporate Governance Report in detail in terms of the requirements under SEBI (ListingObligations & Disclosure Requirements) Regulations 2015.
Nomination and Remuneration Committee
The Company has a duly constituted Nomination & Remuneration Committeeunder the provisions of Section 178 of the Companies Act 2013 and the terms of referenceare disclosed under the Corporate Governance Report of the Company in terms of therequirements under SEBI (Listing Obligations & Disclosure Requirements) Regulations2015.
The composition of the Nomination and Remuneration Committee and details of theMeetings and attendance during the FY2015-16 are as under:
|Name of the Committee member ||Category || |
No. of meetings during the Financial Year
|Dates of meetings held during the year |
| || ||Held ||Attended || |
|Mr. Amit ||Non-Executive ||5 ||5 ||May 05 2015 |
|Sharma ||Independent Director || || ||May 25 2015 |
| || || || ||July 13 2015 |
|Mr. Surendra Singh ||Non-Executive Independent Director ||5 ||4 ||October 15 2015 |
| || || || ||January 14 2016 |
|Mr. Vijay K Thadani ||Non-Executive Promoter Director ||5 ||5 || |
The Chairperson of the Committee is Mr. Amit Sharma who is an Independent Director ofthe Company.
Corporate Social Responsibility (CSR)
In terms of provisions of section 135 of the Companies Act 2013 & Rule 9 ofCompanies (Corporate Social Responsibility Policy) Rules 2014 read with variousclarifications issued by Ministry of Corporate Affairs the Company has a CSR Committeewhich includes formulating and recommending to the Board a Corporate SocialResponsibility (CSR) Policy indicating the activities to be undertaken by the Company asper Schedule VII to the Companies Act 2013 recommending the amount of expenditure to beincurred and monitoring the expenditure and activities undertaken under the CSR Policy ofthe Company. The Committee comprises of the following members: 1. Mr. Surendra Singh(Chairman) 2. Mr. Arvind Thakur 3. Mr. Amit Sharma 4. Mr. Ashwani Puri The Company hasundertaken activities as per the CSR Policy (available Companys websitewww.niit-tech.com) and the details are contained in the Annual Report on CSR Activitiesgiven in Annexure-B forming part of this Report. The Companys approach is tospend on activities for the welfare of society under Corporate Social Responsibilityactivities ensuring that the total spend in each financial year would be above the levelprescribed under the Companies Act 2013. As part of its CSR initiatives the Companycontinued its CSR drive around Education Employability and Infrastructure support. In oursustained efforts to take our CSR initiatives forward we continued with the Scholarshipprogram for deserving students in NIIT University. NIIT Institute of InformationTechnology "TNI" a society registered under the Societies Act 1860 (CentralAct No 21 of 1860) in the office of Registrar of Societies Government of NCT of Delhihas set up NIIT University "NU" as a private University at Neemrana Dist.Alwar Rajasthan. The organization has continued to support the local schools with regardsto Infrastructure support in line with previous years including teaching assistance. Theorganization has also set-up a Career Development Centre managed and run by the "NIITFoundation". The Center will focus on providing courses under the followingcategories:
Certificate Course in IT for Beginner (CCIB) Certificate Course in Social Networking(CCSN) National Digital Literacy Mission (NDLM) Other Career/Employability CoursesFurthermore the organization supported the Noida Deaf Society by sponsoring twoemployability courses for Deaf and Mute adolescents at their Noida Center. Theorganization and staff also provided monetary contribution by donating towardsrehabilitation of damage caused by Chennai floods. This contribution is being used tosupport Little Drops Home for destitute elders and mentally challenged girls.
Compliance with the Code of Conduct & Prevention of Insider Trading
The Company has "NIIT Technologies Limited Code of Conduct" (Code).The Code is available on the website of the Company (URL is -http://www.niittech.com/investors). The Chief Executive Officer of the Company has given adeclaration that the Directors and Senior Management of the Company have given an annualaffirmation of compliance with the Code of Conduct during the year 2015-16.
Further the Company has formulated and adopted a Policy in accordance with therequirements of SEBI (Prohibition of Insider Trading) Regulations 2015. The Policy laysdown the guidelines and procedures to be followed and disclosures to be made while dealingwith the shares of the Company alongwith consequences for violation. The policy isformulated to regulate monitor and ensure reporting of deals by employees and maintainhighest level of ethical standards while dealing in the Companys securities. TheCompany has also adopted the Code of Fair Disclosure which is placed on the website ofthe Company.
Performance Evaluation of the Board
In terms of the provisions of the Companies Act 2013 and the Corporate Governancerequirements as prescribed by Securities and Exchange Board of India (Listing Obligationsand Disclosure Requirements) Regulations 2015 the Board has carried out the evaluationof its own performance the Directors individually including the Chairman of the Board andthat of its Committees. The evaluation of the Independent Directors was carried out by theentire Board excluding the Director being evaluated. The evaluation was done based onone-to-one interactions and after seeking inputs from all the Directors which coveredvarious aspects of Boards functioning and its Committees Board Effectiveness KeyStakeholders connect Ethics and Compliances Evaluation of Companys PerformanceProject Management and Internal Control and Audits. The performance of the Committees wasevaluated by the Board after seeking inputs from the respective Committee Members on thebasis of the criteria such as the composition of committees effectiveness of committeemeetings etc. The Board and the Nomination and Remuneration Committee reviewed theperformance of the individual directors on the basis of the criteria such as thecontribution of the individual director to the Board and committee meetings likepreparedness on the issues to be discussed meaningful and constructive contribution andinputs in meetings etc. In addition the Chairman was also evaluated on the key aspectsof his role.
The Independent Directors also reviewed the performance of the Board andNon-Independent Directors in their separate meeting alongwith the performance of Chairmantaking into account the views of Executive Directors and Non-Executive Directors andeffectiveness of timely availability of information to the Board. The Directors weresatisfied with the evaluation results which reflected the overall engagement of the Boardand its Committees.
Managerial Remuneration & Particulars of Employees
The information required under section 197(12) read with Rule 5(1) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 is provided in Annexure-C.Further the managerial remuneration is also provided in the Corporate Governance Report.The information as required under Section 197(12) of the Companies Act 2013 read withRule 5(2) of Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014is applicable and forms part of the Report. However as per first proviso to Section136(1) of the Act and second proviso of Rule 5(2) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 the Report and Financial Statements arebeing sent to the Members of the Company excluding the statement of particulars ofemployees under Rule 5(2) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014. Any Member interested in obtaining a copy of the said statementmay write to the Company Secretary at the Registered Office of the Company and the saidannexure is also open for inspection at the Registered Office of the Company.
Pursuant to the provisions Section 178(3) of the Companies Act 2013 the Board has onthe recommendation of the Nomination and Remuneration Committee framed a policy forselection and appointment of Senior Management and their remuneration. The RemunerationPolicy is stated in the Corporate Governance Report.
Vigil mechanism/Whistle Blower Policy
In view of the requirement as stipulated by Section 177 of the Companies Act 2013 andCorporate Governance under SEBI (Listing Obligations & Disclosure Requirements)Regulations 2015 the Company has complied with all the provisions of the Section and hasadopted a Whistle Blower Policy duly approved by the Audit Committee to report concernsabout unethical behaviour actual & suspected frauds or violation of CompanysCode of Conduct and Ethics. The policy is uploaded on the website of the Company and theURL for the same is www.niit-tech.com/ investors/whistleblowerpolicy.pdf.The same providesfor adequate safeguards against victimisation of director(s)/ employee(s) who avail of themechanism and also provides for direct access to the Chairman of the Audit Committee inexceptional cases. It is affirmed that no person has been denied access to the AuditCommittee.
Policy for Determining Material Subsidiaries
The policy for determining the material subsidiaries of the Company is also availableon the Website of the Company and the URL is :www.niit-tech.com/investors/Policy-Material-Subsidiaries.pdf.
Risk Management Policy
The Company has developed and implemented a risk management framework foridentification of elements of risk which in the opinion of the Board may threaten theexistence of the Company.
The SEBI Listing Obligations & Disclosure Requirements Regulations 2015 mandatedthe formulation of certain policies for all listed companies. In addition to the currentpolicies the company has adopted Policy for determination of material/price sensitiveinformation and Archival Policy pursuant to these Regulations.
The Securities & Exchange Board of India (SEBI) on September 02 2015 issuedListing Obligations & Disclosure Requirements Regulations 2015 with the aim toconsolidate and streamline the provisions of the Listing Agreement for different segmentsof capital markets to ensure better enforceability. The said Regulations were effectivefrom December 01 2015. Accordingly the Company again entered into the Listing Agreementwith BSE Limited and National Stock Exchange of India Limited.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGOConservation of energy and environment-friendly initiatives
Consistent with and inspired by its corporate vision values and mission NIITTechnologies aims to grow its business profitably while minimising the impact of itsbusiness operations on the environment. The Company has been proactively adopting andinitiating multiple environment-friendly measures aimed at conservation of resourcesincluding energy and water recycling or efficient disposal of waste as well asleveraging the use of renewable resources where possible.
As a global leader in Consulting Technology and Outsourcing Services the Company iscommitted to environmental sustainability. While creating new infrastructure itemphasises not only on creating world class and cost effective infrastructure but also onenergy efficiency renewable energy sources sustainable construction materials waterconservations and waste management.
At its largest facility spread over 25 acres in Greater Noida eco-efficiency andenvironment-friendliness is weaved intricately into all aspects of operations. Being arelatively new SEZ facility environmental sustainability has been a key objectiveunderpinning its design and function right from the blueprint stage to its becomingoperational. Over the years state-of-the-art technologies systems and processes aimedat ensuring minimal environmental impact and adoption of best-in-class practices haveenabled the Company to register significant improvements in its ability to reduce energyconsumption increase recycling of water and facilitate effective waste management. TheCompany recognizes energy as a precious resource and continuously explores and implementsways to reduce its consumption of energy. As part of these efforts the Company keepsassessing the demand-side to bolster its energy efficiency while also investing in newtechnologies that either make its infrastructure more energy efficient or allow it toreplace conventional energy sources with renewable ones wherever possible.
At its Greater Noida campus NIIT Technologies has been able to mark multipleaccomplishments on the environmental front including:-
Reduction of lighting energy requirement by as much as 35%
Reduction in cooling and heating energy consumption by 25% in the Significant recyclingof water while also using technologies to minimize its consumption e.g. usage of SBR basedSTP Plants.
better waste management for both organic and e-waste with substantial progress alreadymade: (i) organic waste is being converted into compost for use in its grounds greenareas and gardens; (ii) e-waste gets collected and formally handed over to registered andcertified disposal vendor through an auction process.
efficient transport practices including increased usage of maximum CNG-based vehicles.These have been made possible by investments and initiatives towards energy efficientChillers VFDs VAVs High Energy Efficient Glass on external faade of buildings wall& ceiling insulation LED lights Solar Energy for internal & external lighting aswell as for hot water generation and recycling of waste water along with a host ofadditional new technologies like the use of decomposers for waste management. The Companystrives to recover reuse or recycle its workplace tools such as copiers computers andpaper. The policy for asset sale donation and disposal outlines what employees should dowith technology assets that are not being fully utilized or have reached their end ofuseful life.
During FY 2016 the Company set up a 50 KW Capacity Solar PV Power Plant at its IT/ITESSEZ campus in Greater Noida. This plant has been successfully commissioned andsynchronized with the grid and has so far generated 47000 KWh within a span of 9 months.
All these efforts investments and achievements of NIIT Technologies on theenvironmental front have gained recognitions with an important one being "Leadershipin
Energy and Environmental Design" (LEED) certification for its Greater Noidacampus:
The Companys Software Development First Block
(SDB) at the Greater Noida campus has been awarded the highest possiblePLATINUM Green Building rating by the Indian Green Building Council (IGBC)under LEED India Core & Shell system.
In an evaluation of energy performance of the building using a computer simulationmodel overall savings were found to sustain at the rate of about 21% savings over theLEED mandated ASHRAE 90.1-2004 baseline.
The Company also has an ongoing initiative for LEED certification in the area ofOperation & Maintenance for its Phase-1 building which is currently being monitoringby consultants from the US Green Building Council (USGBC) for likely certification in thenew financial year based on data verification & evaluation.
The second phase of construction at the campus which entails a separate softwaredevelopment block is also registered for LEED certification separately.
ISO 14001 and OHSAS 18001 Certification is another initiative as part of overallsustainability program .
As an IT solutions provider with an established presence in areas like ManagedServices Infrastructure Management Services and Cloud-based services the Companyoperates data centres that consume energy resources in fairly large quantities. With aview to reduce power consumption at its data centres the Company had initiated theconsolidation of its data centres which was completed in the preceding financial year.This has yielded encouraging results improving PUE (power utilization effectiveness)which is the unit of measurement for data centre efficiency by 25%-30%. In addition tosupporting energy efficiency this initiative also generated operating benefits offeringboth high availability as well as concurrent maintainability of infrastructure.
Technology absorption and R&D (Research & Development)
NIIT Technologies strives to be a leader in the early adoption of new pathbreaking anddisruptive technologies that strengthen its ability to maintain its leadership positionacross its industry verticals of focus. Towards that end it continually evaluates andembraces new technologies and business models and makes investments in developing oracquiring intellectual property (IP) in addition to upgrading its existing IP assets.
In line with its track record of keeping pace with the emergence of new services ortechnologies with disruptive potential the Company made a foray into Digital Services andreinforced its offerings portfolio in that area by making a strategic investment inIncessant
Technologies during the financial year under review. As a result NIIT Technologies isnow able to offer solutions in digital experience digital integration and digitalanalytics. Recently the Company also launched its Digital Innovation Centre (DIC) inHyderabad which will provide a global platform for research and technological developmentto tap new market opportunities for Digital Integration. Equipped with state of the art ITinfrastructure and Internet of Things (IOT) labs this DIC will serve as a hub forinnovative thinking and will play a key role in the Companys success going forwardas a dominant digital services player in its chosen areas of focus.
Foreign Exchange Earnings and Outgo
The Foreign Exchange earned in terms of actual inflows during the year and the ForeignExchange outgo during the year in terms of actual outflows is as under:
| || ||(Rs. Million) |
|Particulars ||Year 2015-16 ||Year 2014-15 |
|Foreign Exchange Earnings ||12724 ||10852 |
|Foreign Exchange Outflow ||5133 ||4585 |
Details of significant and material orders passed by the Regulators or Courts orTribunals impacting the going concern status and Companys operations in future
During the year no significant and material orders were passed by the regulators orcourts or tribunals impacting the going concern status and companys operations infuture.
Details in respect of adequacy of internal financial controls with reference to theFinancial Statements
The Company is having a strong internal control system for all the processes to ensurethe reliability of the financial reporting and timely feedback on achievement ofoperational objectives. The Company monitors and evaluates the efficacy and adequacy ofinternal control systems in the Company its compliances with operating systemsaccounting procedures and policies of the Company. Based on the report of Internal AuditFunction process owners undertake corrective action in their respective areas and therebystrengthen controls. All significant audit observations and corrective actions thereon arepresented to the Audit Committee for its review and suggestions.
Details of Subsidiary/Joint Ventures/Associate Companies
As on March 31 2016 the Company has subsidiaries in the United States of AmericaJapan United Kingdom Netherlands Belgium Germany Switzerland India SingaporeThailand Australia Canada Dubai Spain Philippines & Brazil.
Details about the companies which have become subsidiaries during the Financial Year
Acquisition of 51% stake in Incessant Technologies Pvt. Ltd.-Strategic investment inDigital Integration: During the year the Company made its foray into the high opportunityarea of Digital Integration by acquiring 51% stake in Incessant Technologies Pvt. Ltd. aglobal BPM specialist sharply focused on enabling its clients to automate and integrateback end systems with a digital front end. Incessant Technologies Pvt. Ltd. has over 300consultants who are certified practitioners strong relationships with more than 20clients and strong alliance partnerships with leading platform providers like Pegasystemsand Appian. This acquisition provides the Company with the capability to be a significantplayer in the Digital Integration space with Digitization and Automation of businessprocesses for seamless customer experience and also enables the Company to reinforce itsposition in the BSFI vertical across geographies including North America EuropeandAustralia.
Performance and financial position of each of the subsidiaries associates and jointventure companies included in the consolidated financial statement. During the yearthe Board of Directors reviewed the affairs of the subsidiaries. Pursuant to provisions ofSection 129(3) of the Companies Act 2013 a statement containing a report on theperformance and financial position of each of the subsidiaries associates and jointventure companies is included in the consolidated financial statement and the same hasbeen annexed to this Report as AOC-1 given in Annexure D.
Also pursuant to provisions of Section 136 of the Companies Act 2013 the auditedFinancial Statements of the Company consolidated Financial Statements alongwith relevantdocuments are available on the website of the Company. The Financial Statements are alsoopen for inspection at the Registered Office of the Company.
Particulars of loans guarantees or investments under section 186 of the Companies Act2013
The particulars of Loans Guarantees & Investments under section 186 of theCompanies Act 2013 have been disclosed under the Financial Statements.
Particulars of Contracts or Arrangements with Related Parties
All the Related Party Transactions are entered on arms length basis and inordinary course of business. All the transactions are in compliance with the applicableprovisions of the relevant Acts and the SEBI (Listing Obligations & DisclosureRequirements) Regulations 2015. There are no related party transactions entered by theCompany which may have potential conflict with the interest of the Company at large. TheRelated Party Transaction Policy deals with the review and approval of related partytransactions. The Board of Directors of the Company has approved the criteria for makingthe omnibus approval by the Audit Committee within the overall framework of the policy onrelated party transactions as approved by the Board. The same is uploaded on the websiteof the Company and the URL of same is: www.niit-tech.com/investors/ policysummarized. pdfA Statement of all related party transactions is presented before the Audit Committee on aquarterly basis and prior/ omnibus approval is also obtained for the entire yearspecifying the nature value and terms and conditions of the transactions. The details ofRelated Party transactions which are material in nature are disclosed in Form No. AOC-2 asgiven in
Management Discussion And Analysis Report
In terms of Regulation 34(e) of the SEBI (Listing Obligations & DisclosureRequirements) Regulations 2015 the Managements Discussion and Analysis Report isset out in this Annual Report.
In terms of Regulation 34 of the Securities Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015 a Report on CorporateGovernance along with Compliance Certificate issued by Statutory Auditors in termsof Part E of Schedule V of the said Regulations of the Company forms integral part ofCorporate Governance Report.
AUDITORS & AUDITORS REPORT/CERTIFICATE a. Statutory Audit:
The members of the Company at the Annual General Meeting held on July 7 2014 hadappointed M/s PriceWaterhouse Chartered Accountants (FRN 301112E) as StatutoryAuditor under the provisions of section139 of the Companies Act 2013 for a period of 3years subject to ratification of their appointment at every Annual General Meeting.Accordingly the appointment of M/s Price Waterhouse is placed for ratification by theShareholders. The Report given by the Statutory Auditors forms integral part of the AnnualReport.
The Auditors Report to the Shareholders does not contain any qualification reservationor adverse remarks.
b. Secretarial Audit:
During the year the Board of Directors of the Company had appointed Mr. Ranjeet Pandey(Membership No. 5922) of M/s Ranjeet Pandey & Associates Company Secretaries (CPNo.6087) in Whole-time Practice to carryout Secretarial Audit under the provisionsof Section 204 of the Companies Act 2013 and the Rules framed thereunder for theFinancial Year 2015-16.The Report given by Secretarial Auditors is annexed to this Reportas Annexure F. The Report does not contain any qualification reservation oradverse remarks.
c. Auditors Certificate on Corporate Governance : A required by SEBI (ListingObligations & Disclosure Requirements) Regulations 2015 the AuditorsCertificate on Corporate Governance is provided under the Corporate Governance Report.TheAuditors Report to the Shareholders does not contain any qualification reservation oradverse remarks.
HUMAN RESOURCE INITIATIVES
The Company is always committed to providing best-in-class working environment andempowerment for its employees to excel professionally and to pursue personal aspirations.In our continuous endeavour to fine-tune our processes to the changing expectations of ouremployees and business this year we completely reengineered our Performance ManagementSystem Performance Planning Development Process (PPDP). The New PPDP is significantlysimpler and focused towards rewarding employees who believe in high-performance. A DigitalDiary app has also been launched for NIITians to enable more effective and efficienttwo-way communication between the employees and their supervisors.
Our culture change journey continues to be driven by the service vision "NewIdeas More Value". A total of 10000 NIITians have undergone the Uplift YourService Training. The positive impact of this cultural change has been felt bycustomers and NIITians. Overall Employee Engagement Survey scores already above industryaverage improved by 3 percentage points over the previous year.
To enable our women staff members strike a balance between Work and Family life weannounced new initiatives to support them and enable them to take charge of their careers.We launched onsite Crche at our Greater Noida Campus rolled out Extended MaternityBenefits two additional months of Leave Without Pay (LWP) and Work From Home (WFH)policy. SEED (School for Employee Education and Development) recorded 831773 hours oflearning by employees. A new program was launched to build Digital Capability. More than8000 NIITians went through the Think Digital Orientation module. A 11 Dayboot camp was designed to upskill technical workforce with new technologies required fordigital business. Training initiatives were focused on improving quality of deliverablesand improving project management skills. During the year we also received various awardsand external recognitions including Great Place to Work (GPTW) amongst Top 50 Best IT-BPMcompanies listed among top 5 large Best companies to work in GPTW conferred with HRtechnology Leader by Business World HR Excellence won "Talent Management Award"at Knowledge Management Leadership Awards by Asia Pacific HRM Congress and the NationalAward for Excellence in BPO and Outsourcing 2015 by Asia Outsourcing Conference.
All the initiatives undertaken were widely appreciated within the organization and havehelped us better engage with NIITians allowing us to maintain lower attrition levels.
Prevention/Prohibition of Sexual Harassment of women at workplace:
The Company has a policy on Prohibition/Prevention of Sexual Harassment of Women atworkplace and matters connected therewith or incidental covering thereto all the aspectsas contained in "The Sexual Harassment of Women at the Workplace (PreventionProhibition &Redressal) Act 2013. The Company believes in providing a congenialatmosphere to work for all employees which is free from discrimination and harassmentwithout regard to caste religion marital status and gender. During the year the Companyconducted various awareness programmes and workshops at all locations. During the yearthe Company received three complaints pertaining to this which were duly resolved.
Awards and recognitions:
The Company bagged the following awards and recognitions during the FY 2015-16:
Identified as a "Leader" in Nelson Halls NEAT vendor evaluation forDigital Transformation Services (Digital Focus market segment)
Positioned amongst top vendors under the Innovation category in 2015 EnterpriseMobility Services Blueprint Report by HfS Research
Felicitated with "The International Outsourcing Contract of the year" awardby National Outsourcing Association (NOA) for partnership with Morris
Ranked #5 for customer satisfaction in the UK in the annual research conducted byWhitelane Research and PA Consulting Group
Recognized as a Leader by International Association of Outsourcing Professionals in TheGlobal Outsourcing 100R and The Worlds Best Outsourcing
Advisors in the Leader size category
Conferred with the RB Investor Communication award in the "Technology Emerging Corporates" category
Recognized by "Great Place To WorkR Institute" as
"Top 5 large organizations" in the IT-BPM domain
Listed in 50 Best IT- BPM Company to Work For in 2015 by Great Place ToWorkR Institute
Conferred with "HR Technology leader" award by
Business World HR Excellence
Included in Computer Worlds List of 100 Best
Places to Work in IT and ranked No. 23 among small organizations
Conferred with Talent Management award at the Knowledge ManagementLeadership Awards by Asia
Pacific HRM Congress
Conferred with two awards -BPO Contract of the Year and Award forSkills Development Program of the year - at National Awards for Excellence in
Outsourcing & BPO by Asia Outsourcing Congress
Conferred with E-Governance Initiative of the year award by ASSOCHAM
The Board of Directors would like to take this opportunity to place on record itsappreciation for the committed services and contributions made by employees of the Companyduring the year at all levels. In addition the Directors wish to thank the Companyscustomers business partners vendors bankers & financial institutions allgovernment & non-governmental agencies and other business associates for theircontinued support. We also thank Government of other countries where we have ouroperations. The Directors also acknowledge and appreciate the support and confidence ofthe Companys shareholders and remain committed to enabling the Company achieve itsgrowth objectives in the coming years.
|For and on behalf of the Board of Directors |
| ||Sd/- |
| ||Rajendra S Pawar |
|Place: Noida ||Chairman & Managing Director |
|Dated: May 06 2016 ||DIN: 00042516 |
ANNUAL REPORT ON CORPORATE SOCIAL RESPONSIBILITY (CSR) ACTIVITIES ANNEXURE - B
|11. A brief outline of the Companys CSR policy including overview of projects or programs proposed to be undertaken and a reference to the web-link to the CSR policy and projects or programs. || |
The Companys Values & Beliefs statement is to ensure that in any association with society society benefits substantially more than what society gives to us and what society would gain from any other similar association. The policy spells out Companys philosophy towards its social responsibilities and lays down the guidelines framework and mechanism relating to the implementation monitoring reporting disclosure evaluation and assesment of projects programmes and activities forming part of CSR. As part of its CSR initiatives the Company continued its CSR drive around education employability infrastructure local initiatives and engagement.
| || |
|2. The Composition of the CSR Committee. || |
1. Mr. Surendra Singh (Independent Director)- Chairman
| || |
2. Mr. Amit Sharma (Independent Director)- Member
| || |
3. Mr. Ashwani Puri (Independent Director)- Member
| || |
4. Mr. Arvind Thakur (Executive Director)- Member
|3. Average net profit of the company for last three financial years || || |
|4. Prescribed CSR Expenditure (two per cent of the amount as in item 3 above) || |
|5. Details of CSR spent during the financial year. || || || || || |
|(a) Total amount to be spent for the financial year; || |
|(b) Amount unspent if any; || |
|(c) Manner in which the amount spent during the financial year is detailed below. || || || || || |
|1 ||2 ||3 ||4 || ||5 ||6 || ||7 ||8 |
|S. No ||CSR project or activity identified ||Sector in which the Project is covered ||Projects or programs ||Amount outlay (budget) project or programs wise || |
Amount spent on the projects or programs
|Cumulative expenditure upto to the reporting period ||Amount spent : Direct or through implementing agency* |
| || || || || || || |
| || |
|1 ||NIIT Institute of Information Technology ||Education ||(1) Local area or other ||Other ||45171645 ||(1) Direct expenditure on projects or programs (2) Overheads ||45171645 ||45171645 ||Direct |
| || || ||(2) Specify the State and district where projects or programs was undertaken ||NeemranaHaryana || || || || || |
|2 ||"Government Schools : Govt School Murshadpur Govt School Gharbara Tapovan Vidya Mandir Junior High SchoolRaipur NIIT Foundation Govt. School Karjat Near Mumbai." ||Education ||(1) Local area or other ||Local (since the Company is present at following location: Greater Noida Campu H-7 Sector 63 Noida and Sector 126 Noida Mumbai ||1830278 ||(1) Direct expenditure on projects or programs ||1830278 ||1830278 ||Direct |
| || || ||(2) Specify the State and district where projects or programs was undertaken ||U.P Maharashtra || ||(2) Overheads || || || |
| ||TOTAL || || || ||47001923 || ||47001923 ||47001923 || |
|6. In case the Company has failed to spend the 2% Average Net Profit of the last 3 financial years or any part thereof the Company shall provide the reasons for not spending the amount in the Board Report. || |
|7. Responsibility Statement of the CSR Committee that the implementation & monitoring of the CSR Policy is in compliance with the CSR Objectives and policy of the Company. || |
We hereby declare that implementation and monitoring of the CSR policy is in compliance with CSR Objectives and policy of the Company
|Place : Noida ||Surendra Singh ||Arvind Thakur |
|Dated : May 06 2016 ||(Chairman CSR Committee) ||(CEO & Jt. Managing Director) |
Annexure - C
Information as per Rule 5(1) of Chapter XIII Companies (Appointment & Remunerationof Managerial Personnel) Rules 2014. Remuneration paid to Executive Directors:
|Name ||Title ||Remuneration in FY16 (Rs. In Mn) ||Remuneration in FY15 (Rs. In Mn) ||% increase in Remuneration in FY16 over ||Ratio of Remuneration to Median Remuneration || |
Ratio of Remuneration to
| || || || ||FY15 ||of NIITians ||Revenue ||Net profit |
| || || || || || ||FY16 ||FY16 |
|Mr. Rajendra S Pawar ||Chairman & Managing Director ||30.39 ||28.40 ||7.0% ||40.33 ||0.21 ||1.57 |
|Mr. Arvind Thakur ||CEO & Jt. Managing Director ||36.38 ||34.00 ||7.0% ||48.28 ||0.25 ||1.88 |
|Mr. Vijay K Thadani ||Non executive Director ||0.94 ||0.94 ||0% ||1.25 || || |
|Mr. Surendra Singh ||Independent Director ||0.94 ||0.94 ||0% ||1.25 || || |
|Mr. Amit Sharma ||Independent Director ||1.04 ||1.04 ||0% ||1.38 || || |
|Mr. Ashwani Puri ||Independent Director ||0.99 ||0.99 ||0% ||1.31 || || |
|Ms. Holly Jane Morris ||Independent Director ||2.45 ||0.93 ||163% ||3.26 || || |
Note : % increase is due to to increase in no. of meeting attended during the year.
Remuneration paid to Non- Director KMPs
|Non Director KMP- Title ||Remuneration in FY16 ||Remuneration in FY15 ||% increase in Remuneration ||Ratio of Remuneration to |
| ||(Rs. In Mn) ||(Rs. In Mn) ||in FY16 over FY15 ||Revenue FY16 ||Net profit FY16 |
|Chief Financial Officer ||14.23 ||14.5 ||-1.86% ||0.10 ||0.75 |
|Company Secretary & Legal Counsel ||5.1 ||4.1 ||24.39% ||0.03 ||0.21 |
* The annualised compensation details of Non-Director KMP as on March 31 2016 and ason March 31 2015 has been considered for the above disclosure. Remuneration of InterimCFO & Interim CS has not been considered. The percentage increase in the medianremuneration of employees in the FY16 over FY15 : 2.50% The number of permanent employeeson the rolls of the Company as on March 31 2016 : 5615 The total increase in theaggregate remuneration of the Directors and the other KMPs was 6.29%. At the same timethe increase in the aggregate salary of the other employees of the Company was 8.5%. TheNomination & Remuneration Committee received inputs from HR consulting firms andpublicly available data on employee remuneration in the market for similar sized companiesin this sector.
The 75th percentile was taken as the benchmark for corrections and changes in themanagerial compensation as needed. The consolidated revenue growth in FY16 was 13.1% andthe growth of net profit was 145% over that of FY15.
The key parameters for variable compensation provided to the whole time Directors were:(a) Revenue (b) ROCE (c) EPS (d)Sustained Increase in US Presence (e) Scale UpInfrastructure Management Services (f) New Million Dollar client acquisition (g) Contractexecution quality The ratio of remuneration of the highest paid Director to that of theemployees who are not directors but receive remuneration in excess of the highest paidDirector - None The remuneration paid during the year FY16 was in line with theRemuneration Policy of the Company. The Companys market capitalisation as on 31stMarch 2016 based on the closing price of its shares on the National Stock Exchange (NSE)was Rs 30391 million representing an increase of 42.5% from Rs 21323 million as on 31stMarch 2015. The price-earnings ratio for the Companys shares based on consolidatedFY2016 earnings stood at 10.8 on 31st March 2016 lower by 41.9% compared to 18.7 as on31st March 2015 based on consolidated FY2015 earnings.
Annexure - D
Statement pursuant to first proviso to sub-section (3) of section 129 of the companiesact 2013 read with rule 5 of the companies(accounts) rules 2014 in the prescribed formaoc-1 relating to subsidiary companies.
|S. No. ||Name of the sub- sidiary ||Report- ing cur- rency ||Exchange rate ||Share capital ||Reserves & surplus ||Total Assets ||Total Liabilities ||Investments ||Turnover ||Profit before taxation ||Provision for taxation ||Profit after taxation ||Proposed Dividend ||% of share- holding ||Country |
|1 ||NIIT Technologies Ltd UK ||GBP ||95.1623 ||311792329 ||1973957965 ||2794997353 ||509247060 ||1618249091 ||4295707205 ||359300394 ||18237855 ||341062540 ||- ||100% ||U.K |
|2 ||NIIT Technologies BV Netherlands ||EUR ||75.3674 ||1367994 ||65594132 ||86250377 ||19288251 ||- ||198082033 ||-7106593 ||-419344 ||-6687248 ||- ||100% ||Netherland |
|3 ||NIIT Technologies NV Belgium ||EUR ||75.3674 ||4670773 ||-10511264 ||32951669 ||38792161 ||- ||104887530 ||-13223430 ||16789 ||-13240219 ||- ||100% ||Belgium |
|4 ||NIIT Technologies GmbH Germany ||EUR ||75.3674 ||40540124 ||9659727 ||198889883 ||148690031 ||- ||392979279 ||-13184504 ||-624078 ||-12560426 ||- ||100% ||Germany |
|5 ||NIIT Technologies AG Switzerland ||CHF ||69.0821 ||17270525 ||-39581741 ||20336148 ||42647363 ||- ||54551140 ||-3582805 ||63904 ||-3646709 ||- ||100% ||Switzerland |
|6 ||NIIT Insurance Tech- nologies Limited UK ||GBP ||95.1623 ||1194953 ||394103436 ||923493119 ||528194730 ||- ||1783247386 ||432460885 ||110524065 ||321936821 ||- ||100% ||U.K |
|7 ||NIIT Airline Technolo- gies GmbH Germany ||EUR ||75.3674 ||75367400 ||134532027 ||264299650 ||54400223 ||- ||167595347 ||85320047 ||26790442 ||58529605 ||- ||100% ||Germany |
|8 ||NIIT Technologies S.A. Spain ||EUR ||75.3674 ||14990576 ||179704973 ||265182383 ||70486833 ||- ||594313778 ||-53913919 ||-14954900 ||-38959019 ||- ||100% ||Spain |
|9 ||NIIT SmartServe Limited ||INR ||1.00 ||500000000 ||64643963 ||725594671 ||160950708 ||- ||536698959 ||123614218 ||40376267 ||83237951 ||66292663 ||100% ||India |
|10 ||NIIT Technologies Services Limited ||INR ||1.00 ||50000000 ||-22468982 ||27739538 ||208520 ||- ||- ||1218654 ||- ||1218654 ||- ||100% ||India |
|11 ||NIIT Technologies Limited Thailand ||THB ||1.89 ||28276500 ||292146194 ||612686301 ||292263606 || ||854768053 ||136378308 ||30215274 ||106163033 || ||100% ||Thailand |
|12 ||NIIT Technologies Pte Ltd Singapore ||SGD ||49.15 ||816546688 ||173189212 ||1094834990 ||105099090 ||806028198 ||466420315 ||13517391 ||3855779 ||9661612 || ||100% ||Singapore |
|13 ||NIIT Technologies Pty Limited Australia ||AUD ||50.80 ||828157736 ||-629629690 ||420551513 ||222023468 || ||602338033 ||7723697 ||-102218 ||7825914 || ||100% ||Australia |
|14 ||NIIT Technologies Co. Ltd. Japan ||JPY ||0.59 ||240661162 ||-242597444 ||10192747 ||12129030 || ||4635889 ||787750 ||1539088 ||-751338 || ||100% ||Japan |
|15 ||NIIT Technologies FZ LLC Dubai ||AED ||18.02 ||90084500 ||-3770414 ||269454049 ||183139963 || ||875597414 ||77229630 || ||77229630 || ||100% ||Dubai |
|16 ||NIIT Technologies Phil- lipines Inc Phillipines ||PHP ||1.44 ||1440133 ||32149431 ||61480928 ||27891364 || ||141124949 ||12360401 ||4386379 ||7974022 || ||100% ||Phillipines |
|17 ||NIIT Technologies Brazil Ltda Brazil ||BRL ||18.62 ||4654227 ||-4337517 ||52660196 ||52343486 || ||79541682 ||-533060 ||2942491 ||-3475551 || ||100% ||Brazil |
|18 ||NIIT Technologies Inc. USA ||USD ||66.18 ||187798024 ||1287331418 ||1934187627 ||459058185 ||213161793 ||10312509674 ||404568817 ||155465592 ||249103225 || ||100% ||USA |
|19 ||NIIT Technologies Limited Canada ||CAD ||51.03 ||- ||-171970 ||- ||- ||- ||- ||-171970 ||- ||-171970 || ||100% ||Canada |
|20 ||NIIT Media Technolo- gies LLC USA ||USD ||66.18 ||355141061 ||65304829 ||486985651 ||66539761 ||- ||1715724835 ||65304709 ||- ||65304709 ||- ||60% ||USA |
|21 ||ESRI India Technolo- gies Limited ||INR ||1.00 ||10000700 ||513304216 ||803160485 ||279855569 ||- ||904988481 ||126584653 ||32219469 ||94365184 ||47003290 ||88.99% ||India |
|22 ||Incessant Technologies Private Limited ||INR ||1.00 ||8095262 ||910961183 ||1271307597 ||352251152 ||- ||1427877182 ||159251129 ||49799159 ||109451970 ||- ||51.00% ||India |
Form No. AOC-2
(Pursuant to clause (h) of sub-section (3) of section 134 of the Act and Rule 8(2) ofthe Companies (Accounts) Rules 2014) Form for disclosure of particulars ofcontracts/arrangements entered into by the company with related parties referred to insub-section (1) of section 188 of the Companies Act
1. Details of contracts or arrangements or transactions not at arms length basisPoint no 1 of Form No . AOC -2 is not Applicable (a) Name(s) of the related party andnature of relationship (b) Nature of contracts/arrangements/transactions (c) Duration ofthe contracts / arrangements/transactions
(d) Salient terms of the contracts or arrangements or transactions including the valueif any (e) Justification for entering into such contracts or arrangements or transactions(f) date(s) of approval by the Board (g) Amount paid as advances if any: (h) Date onwhich the special resolution was passed in general meeting as required under first provisoto section 188 2. Details of material contracts or arrangement or transactions atarms length basis (a) Name(s) of the related party and nature of relationship
|Name of the Party ||Relationship |
|NIIT Technologies Limited UK ||Wholly Owned Subsidiary |
|NIIT Technologies Inc. USA ||Wholly Owned Subsidiary |
(b) Nature of contracts/arrangements/transactions
Rendering of Software Development Services and Corporate Services.
(c) Duration of the contracts/arrangements/transactions
Ongoing unless terminated d) Salient terms of the contracts or arrangements ortransactions including the value if any:
|Software Development ||Scope : Computer Software Development and maintainance of IT and IT enabled Services. Charges: Service charges to |
| ||be determined based on the internationally recognised arms length principles. Payment terms: 150 days from the date of |
| ||invoice. Tenure : Perpetual unless terminated by either party.Termination: 30 days notice by either party. |
|Corporate Services ||a). Master Service Agreement is for Corporate Services. b) The services covered under this agreement are organizational services such as Financial Secretarial Legal Human Resources and Internal Resources. c) Allocation of cost to be made in accordance with reasonable and prudent business practices and shall be mutually agreed between the parties and all invioces under the agreement shall be on arm's length basis. d) Recovery of expenses shall be based on usage of common facilities such as telephone premises electricity etc. e) agreement terminable with 30 days notice by either party. f) Pay- ment to be remitted vide Bank TT within such period as may be agreed from time to time. |
|(e) Date(s) of approval by the Board if any: ||Not applicable since the contract was entered into in the ordinary course of business and on arms length basis. |
|(f) Amount paid as advances if any: ||NIL |
SECRETARIAL AUDIT REPORT
For the Financial Year ended on March 31 2016
[Pursuant to section 204 (1) of the Companies Act 2013 and rule No. 9 of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014]
NIIT Technologies Limited 8 Balaji Estate First Floor Guru Ravi Das Marg KalkajiNew Delhi-110019
We have conducted the Secretarial Audit of the compliance of applicable statutoryprovisions and the adherence to good corporate practices by "NIIT TechnologiesLimited" (hereinafter called the "Company"). Secretarial Audit wasconducted in a manner that provided us a reasonable basis for evaluating the corporateconducts/statutory compliances and expressing our opinion thereon.
Based on our verification of NIIT Technologies Limiteds books papers minutebooks forms and returns filed and other records maintained by the Company and also theinformation provided by the Company its officers agents and authorized representativesduring the conduct of Secretarial Audit we hereby report that in our opinion the Companyhas during the audit period covering the financial year ended on 31st March 2016complied with the statutory provisions listed hereunder and also that the Company hasproper Board-processes and compliance mechanism in place to the extent in the manner andsubject to the reporting made hereinafter.
We have examined the books papers minute books forms and returns filed and otherrecords maintained by the Company for the financial year ended on 31st March 2016according to the provisions of: i) The Companies Act 2013 (the Act) and the rules madethere under; ii) The Securities Contracts (Regulation) Act 1956 (SCRA) andthe rules made there under; iii) The Depositories Act 1996 and the Regulations andBye-Laws framed there under; iv) Foreign Exchange Management Act 1999 and the rules andregulations made thereunder to the extent of Foreign Direct Investment and Overseas DirectInvestment; v) The following Regulations and Guidelines prescribed under the Securitiesand Exchange Board of India Act 1992 (SEBI Act):- a) The Securities andExchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations2011; b) The Securities and Exchange Board of India (Prohibition of Insider Trading)Regulations 2015 (erstwhile The Securities and Exchange Board of India (Prohibition ofInsider Trading) Regulations 1992; c) The Securities and Exchange Board of India (Issueof Capital and Disclosure Requirements) Regulations 2009; d) The Securities and ExchangeBoard of India (Share Based Employee Benefits) Regulations 2014; e) The Securities andExchange Board of India (Registrars to an Issue and Share Transfer Agents) Regulations1993 regarding the Companies Act and dealing with client. vi) Foreign Trade Policy of theGovernment of India (the law which is applicable specifically to the Company being 100%EOU under Software Technology Park Scheme) to the extent of the following: a. ObtainingLetter of Approval (LOA) for setting up 100% EOU under Software Technology Park (STP); b.Obtaining License for setting up Private Custom Bonded Warehouse; c. Submission of MonthlyProgress Report; d. Submission of Annual Progress Report.
We have also examined compliance with the applicable clauses of the following: i)Secretarial Standards issued by the Institute of Company Secretaries of India; ii) TheListing Agreements entered into by the Company with BSE Limited and National StockExchange of India Limited.
During the period under review the Company has complied with the provisions of theAct Rules Regulations Guidelines Standards etc. mentioned above.
We further report that:-
The Board of Directors of the Company is duly constituted with proper balance ofExecutive Directors Non-Executive Directors and Independent Directors. There was nochange in the composition of the Board of Directors during the period under review.
Adequate notice has been given to all directors to schedule the Board Meetings duringthe financial year under review agenda and detailed notes on agenda were sent properlybefore the scheduled meeting and a system exists for seeking and obtaining furtherinformation and clarifications on the agenda items before the meeting and for meaningfulparticipation at the meeting.
All the decisions have been carried unanimously. The members of the Board have notexpressed dissenting views on any of the agenda items during the financial year underreview.
We further report that there are adequate systems and processes in the Companycommensurate with the size and operations of the Company to monitor and ensure compliancewith applicable laws rules regulations and guidelines. We further report that duringthe audit period the Company has declared and paid dividend and necessary compliances ofthe Companies Act 2013 was made.
| ||FOR RANJEET PANDEY & ASSOCIATES |
| ||COMPANY SECRETARIES |
|Place: New Delhi ||CS RANJEET PANDEY |
|Date: May 06 2016 ||FCS- 5922 CP No.- 6087 |