Rolta India Limited
Your Directors are pleased to present the 26th Annual Report on the business& operations of your Company together with Audited Financial Statements &Auditor's Report for the Financial Year ended 31st March 2016.
FINANCIAL HIGHLIGHTS & REVIEW OF PERFORMANCE
The Company's financial performance for the year ended 31st March 2016 issummarised below:
(Rs. In Crore)
| || |
| ||Financial year ended |
March 31st 2016
|Financial year ended March 31st 2015 |
|Revenue || || |
|Sales of IT Solutions and Services ||3799.59 ||3679.46 |
|Other Income ||38.21 ||30.72 |
|Total Revenue ||3837.80 ||3710.18 |
|Expenses || || |
|Cost of Materials & Technical Subcontractors ||1519.39 ||1288.50 |
|Employee Benefit Expenses ||795.85 ||790.99 |
|Finance Costs ||476.74 ||401.34 |
|Depreciation and Amortization Expenses ||523.36 ||622.00 |
|Other Expenses ||370.64 ||323.35 |
|Total Expenses ||3685.98 ||3426.18 |
|Profit / (Loss) before tax ||151.82 ||284.00 |
|Tax expense / benefit ||(37.29) ||38.83 |
|Profit / (Loss) for the year ||189.11 ||245.17 |
Results of Operations and the State of Company's Affair
During the year under review Your Company has registered consolidated revenue forfinancial year ended March 31 2016 at Rs. 3799.59 Crore against Rs. 3679.46 Crore inprevious year registering a Year-on-Year growth of 3.3 %. The total Consolidated Earningsbefore interest tax depreciation and amortization (EBITDA) for financial year endedMarch 312016 is Rs. 1113.71 Crore against Rs. 1276.62 Crore in previous yearregistering a Year -on-Year decline in growth of 12.8%. Consolidated profit after tax forthe financial year ended March 31 2016 is Rs. 189.11 Crore as against Rs. 245.17 Crore inprevious year.
The basic Earnings Per Share after exceptional item and tax for the financial yearended 31st March 2016 was Rs. 11.70 as against previous year ended Rs. 15.20.The basic Earnings Per Share was computed by considering the weighted average number ofshares outstanding during the period is as per the provisions of 'Accounting Standard 20'notified under section 133 Companies Act 2013 read with Rule 7 of Companies (Accounts)Rule 2014.
The Company's consolidated net worth increased to Rs. 2508.29 Crore as on 31stMarch 2016 from Rs. 2301.43 Crore in March 31st 2015 reflecting theinherent strength of the Company. The book value per share as on 31st March2016 is Rs. 154.17 as against Rs. 142.65 at the end of March 31 2015.
The Financial performance on Standalone basis is as follows:
(Rs. In Crore)
| || |
| ||Financial year ended March 31st 2016 ||Financial year ended March 31st 2015 |
|Revenue || || |
|Sales of IT Solutions and Services ||1829.71 ||1871.50 |
|Other Income ||47.35 ||17.42 |
|Total Revenue ||1877.06 ||1888.92 |
|Expenses || || |
|Cost of Materials & Technical Subcontractors ||141.49 ||103.46 |
|Employee Benefit Expenses ||225.71 ||243.06 |
|Finance Costs ||97.16 ||133.20 |
|Depreciation and Amortization Expenses ||462.03 ||614.26 |
|Other Expenses ||232.51 ||181.46 |
|Total Expenses ||1158.90 ||1275.44 |
|Profit / (Loss) Before Exceptional Items and Tax ||718.16 ||613.48 |
|Exceptional Items || || |
|Add : Profit on sale of investments in subsidiaries ||- ||134.10 |
|Less : Loss on Transfer of Business ||653.56 ||- |
|Profit / (Loss) Before Tax ||64.60 ||747.58 |
|Tax Expenses ||(47.63) ||31.06 |
|Profit / (Loss) for the year ||112.23 ||716.52 |
The Company's standalone revenue was Rs. 1829.71 Crore for the financial year endedMarch 31 2016 as against Rs. 1871.50 Crore for the previous financial year ended March31 2015 representing 2.2% decrease. The Profit after tax for the financial year endedMarch 31 2016 is Rs. 112.23 Crore as against Rs. 716.52 Crore in the previous financialyear ended March 31 2015 after providing for exceptional item on loss of transfer ofbusiness amounting to Rs.653.56 Crore.
Rolta has had to continue incurring significant expenses on a very prestigious and timebound defense project which requires considerable ongoing investment; while at the sametime the Company has suffered unexpected delays in large payment collections; therebyfacing working capital stress over the past few months. Rolta management is diligentlyworking on addressing the overall situation in a comprehensive manner in consultation withits bankers and strategic advisors.
BUSINESS OPERATIONS OVERVIEW AND OUTLOOK
Close to a decade ago Rolta embarked on a significant journey to transform the Companyfrom a predominantly GIS and Engineering Services Company to an IP-led IT organization.This transformation is almost complete and Rolta today is at an inflexion point ready toreap the benefits of investments in building solutions based on the rich and extensiverepository of IP. This is expected to enable Rolta to be meaningful in the Digital era andsteadily grow in the years ahead.
In the domestic market the "Make in India" and "Digital India" aretwo major initiatives that are being driven by the Government of India. Rolta as an Indianorganization with its large suite of indigenous intellectual property is well placed toaddress these requirements especially in the vast e-Governance / smart city defense andsecurity sectors.
On the other hand globally the market place is increasingly demanding DigitalTransformation solutions which is the top most priority for organizations acrossIndustries to remain relevant and succeed in the Digital Economy. With its large portfolioof intellectual property (IP) deep industry domain knowledge and the ability to deliverend-to-end solutions whether for sophisticated BI and Big Data Analytics or buildingspecialized Enterprise Applications customized for individual verticals or Mobility orfor creating underlying sophisticated Cloud enabled IT Infrastructure; Rolta is wellsuited to help organizations in their digital transformation journey.
India Defense and Security
Rolta continues to be in a leadership position in the Indian Defense and Securitysoftware market. The Company's world class indigenously developed Military-of-the-Shelf(MOTS) IP has been deployed and proven operationally across the country. AccordinglyRolta is considered amongst a handful of highly accomplished companies that meet thestringent 'Make India' vision of the Government. Recently the Defense ProcurementProcedure announced by the Ministry of Defense ("MoD") introduced thecategorization of "Indigenously Designed Developed and Manufactured (IDDM)" asmost preferred category for procurement to fulfill this vision. As a result Rolta ispoised to greatly benefit due to its track record and investments in creating indigenousproducts and solutions for Indian defense over last 20 years.
Battlefield Management System (BMS): Ministry of Defense (MoD) has selected theexclusive consortium of BEL and Rolta as a Development Agency for the BattlefieldManagement System (BMS) project worth about Rs. 70000 Crore.
The Battlefield Management System (BMS) is an ambitious Command Control andCommunications (C3) project under the MoD's 'Make India' program. This project will usherdigital transformation of the Indian Army's battlefield operations down to the fightingechelons operating at the forward edge of the Tactical Battle Area at the Battalion andCombat Group levels. The BMS solution provides situational awareness and visualizationsystem with the aim of optimizing the operational effectiveness of tactical units.
As a part of its consortium with BEL Rolta is responsible for the complete BMSapplication development and software licensing GIS software and services. Rolta will alsojointly work with BEL for manufacturing subsystems for the soldier system the overallsystem design integration installation commissioning and maintenance of the BMSprogramme. The project is progressing well and the BEL-Rolta Consortium has successfullycrossed various milestones including the submission of the Detailed Project Report (DPR).
Intelligence Surveillance and Reconnaissance (ISR): The Company's indigenous ISRsolutions have been adopted by Indian Defense with successful deployments at 100s of keymilitary sites. These Image Exploitation Systems are deployed at field formations andutilized to serve critical operational needs of providing essential inputs for operationalplanning intelligence acquisition and surveillance.
Rolta is the only Company in India to have developed and released highly sophisticatedindigenous ISR software solutions that are used for assessing and interpreting troopmovements and enemy build up at forward locations to counter threats like insurgencyinfiltration etc.
Homeland Security: Rolta's indigenous safety solutions include world-class solutionsfor Homeland Security. Rolta continues to play a strong role in the Security market inIndia by providing a full range of solutions that cover Command & Control and MissionCritical Communications to equip the police and paramilitary forces with leadingtechnologies. Rolta's indigenous safety solutions which include field proven softwarelike RoltaGeoCAD Rolta Command and Control and Rolta Crime Analyticshave been recognized for the significant value they bring to "Safe City"programs across the nation. These solutions have been implemented for numerous policeforces in many states and are being used to speedily respond to citizens.
It is now well accepted by Industry and Governments that embedding Geospatialtechnologies in information modelling analytics and actionable intelligence has greatlyincreased the value and quality of decision making through enhanced visualisation andlocational analytics. Emerging technologies like Cloud Internet of Things Mobility 3DPrinting Augmented 3D Reality Autonomous Cars etc. that are driving the Digitalrevolution will undoubtedly fuel the need for Geospatial technologies even further. Roltawith its growing leadership in Geospatial Technologies and intellectual property is pavingthe way for making geospatial technology an integral part of critical business processesacross industries.
Rolta has delivered several smart & safe city initiatives across the world. Rolta'sinnovative solutions have been deployed in smart cities globally and have won manyaccolades for the value they have brought. Rolta has executed hundreds of projectsworld-wide leveraging and sharpening its domain expertise. Based on this rich experienceand know-how Rolta now has over 30 software products and solutions to address "SmartCity" initiatives globally covering smart city initiatives such as City PlanningCitizen Services eGovernance Smart Utilities and Transportation to name just a few.Consequently Rolta is winning large projects globally. In India too this has placedRolta in a strong position with respect to Smart City initiatives of the government.
Engineering Digital Information Management Systems
Asset intensive process manufacturing plants have realized the intrinsic value of theirDigital Assets and are therefore demanding robust Engineering Information Managementsystems to exploit them for effective plant management. Rolta is positioned strongly dueto its unique ability to integrate its portfolio of enterprise- level IT applications withits engineering domain thereby raising the value proposition beyond traditionalapplications and services. This is resulting in Rolta being engaged for large EngineeringDigital Information Management projects in North America Middle East and India.
Enterprise IT Consulting Services
The world of information technology is changing dramatically. According to researchanalysts the global digital transformation market is expected to grow to more than onetrillion $ by 2020. This digital revolution is being fuelled by technologies such as theSocial Media Mobility Big Data and Analytics Cloud Internet of Things (IoT) amongstothers and is responsible for the deluge of digital data which is posing major challengesand offering significant opportunities to organizations.
Rolta is addressing the above through a comprehensive portfolio of solutions. Rolta hasintegrated its application consulting and infrastructure solutions businesses into aunified offering which invariably incorporates its IP with comprehensive services toenable customers to get practical solutions from a single vendor.
IT Infrastructure Solutions and Converged Systems: Provide end-to-endinfrastructure solutions and related services. Market is increasingly focusing onConverged and engineered systems. Rolta is well suited based on its decades of experienceof providing infrastructure solutions and database / applications services.
Cloud Transformations: Transform IT Infrastructures and deploy converged systemsto a Private or a Hybrid Cloud environment delivering the benefits of elastic CloudComputing. Rolta leverages its comprehensive "Fusion Cloud" Portfolio to designimplement and manage these environments for its customers.
Mobility and Enterprise Security: In this Digital Era Organisations areincreasingly embracing Mobility and the ubiquitous Cloud computing for greateraccessibility and flexibility. The movement of Data outside the confines of theOrganisations Firewall is raising Security issues. Rolta has the experience and itspatented IP to provide Security and Mobility solutions to address customer needs.
Enterprise Applications - Custom and Packages: Infrastructure transformationinvariably entails modernization of legacy application and development / integration ofnew applications. Rolta with its acknowledged expertise in Oracle and Microsofttechnologies is able to modernize / implement customised applications including ERP EPMBI Web Portals etc. to enable the customer to optimally exploit their new infrastructure.
Managed Services: Provide a comprehensive set of ongoing Managed Services thathelp customers to continually optimize the ROI on their IT investments. Rolta has theability to provide an extensive range of Managed Services cutting across the Data CenterEnd User Services Database and Applications Middleware and Security and offers 24X7X365proactive monitoring and management.
Business Intelligence and Big Data Analytics
Analysts are of the opinion that businesses are drowning in data but starving forinsights without a systematic way to consistently turn data into informed actions. DigitalInsights can become the new currency for business once data can be meaningfully analyzed.The flagship Rolta OneView Enterprise Suite is a unique Big Data Analytics packagedsolution that addresses the needs of enterprises to exploit the business value of BigData. By leveraging Rolta's patented technologies for real-time IoT integration of sensordata from disparate operations and business systems Rolta OneView offerscross-functional visibility of critical business functions such as Operations AssetsMaintenance Reliability etc.
New product enhancements to Rolta OneView during the year has resulted in DataScience driven spatially-enabled Predictive and Prescriptive Analytics for deeper insightsand effective business decisions. Rolta launched its Cloud-based deployment model forRolta OneView providing customers with a much faster roll-out and quick return oninvestments. As a result of such innovation Rolta has reached an inflexion point withnumerous multinational organizations many of whom are world leaders in various spheressuch as Upstream Oil and Gas Refining Petrochemicals Chemicals and Utilities electingto evaluate and deploy Rolta OneView.
Driven by recognition of the Company's IP and the unique benefits of RoltaSmartMigrate the automated solution for migration of applications and databasesfrom one technology platform to another Rolta is being increasingly sought by customerswanting to consolidate technologies. One amongst the many innovations and enhancementscarried out during the year includes multi-instance parallel migrations capability fordelivering extremely high levels of throughput. As a result Rolta is engaged in migrationand consolidation projects for blue- chip organizations including a project involvingmigration of several thousand databases with terabytes of data to SAP HANA platform withnear-zero cut-over disruption of live operations in cloud environment.
Rolta continues to expand its worldwide footprint in the key markets that it serves. Ithas successfully executed projects in over 45 countries in all continents. In addition toits direct presence with over 25 offices worldwide Rolta has appointed several newdistributors and forged alliances to extend its geographic reach into untapped markets.
Rolta today is well positioned to address the huge Digital Transformation opportunitiesin the markets it serves having made significant investments in the recent years. Roltaoffers strong value addition to customers due to its unique IP differentiated approachand is poised to reap the benefits of the transformation.
Rolta is considered amongst a handful of highly accomplished companies that meetthe stringent 'Make India' vision of the Government and is poised to greatly benefit dueto its track record and investments in creating indigenous products and solutions forIndian defense over last 20 years.
Address high growth verticals with well-recognized solutions built around RoltaIP with numerous copyrights/patents
Uniquely leverage the exceptional combination of expertise in IT Geospatial andEngineering domain to comprehensively address the Digital Transformation aspirations ofits customers
Strategic two-way partnerships with world leaders to exploit cutting edgetechnology and penetrate newer markets
Rolta continues to be recognized by industry analysts and technology leaders asa company that truly offers innovative digital solutions tailored for each of theverticals that Rolta serves
In order to conserve resources your Directors have not recommended any dividend for theFinancial Year ended March 31 2016. No amount has been transferred to reserve during theyear.
The paid up equity share capital of the Company as on March 31 2016 was Rs.1627040960 divided into 162704096 equity shares of Rs. 10/- each. During the yearunder review the Company has allotted 1375000 equity shares of Rs. 10/- under ESOP Planto the eligible employees of the Company and its subsidiaries. Further the Company hasnot issued shares with differential voting rights. The Company has not issued sweat equityshares and does not have any scheme to fund its employees to purchase the shares of theCompany.
EXTRACT OF THE ANNUAL RETURN
In terms of provisions of Section 92 (3) of the Companies Act 2013 read with Rule 12(1) of Companies (Management and Administration) Rules 2014 as amended extract of theAnnual Return in form No. MGT 9 are set out in Annexure D to the Board's Report.
NUMBER OF MEETINGS OF THE BOARD
A calendar of Meetings is prepared and circulated in advance to the Directors. Duringthe financial year ended March 31 2016 Six (6) meetings of the Board were held with aminimum of one meeting in each quarter in a year and not more than one hundred and twentydays has intervene between two consecutive meetings of the Board. For details of themeetings of the Board please refer to the corporate governance report which forms partof this report.
VIGIL MECHANISM / WHISTLE BLOWER POLICY
In pursuant to the provisions of section 177(9) & (10) of the Companies Act 2013the Company has established a Vigil Mechanism named Whistle Blower Policy (WBP) to providea formal mechanism to the directors and employees to report their genuine concerns aboutunethical behavior actual or suspected fraud or violation of the Company's Code ofConduct if any. The details of the WBP is explained in the Corporate Governance reportand also posted on the website of the Company.
RISK MANAGEMENT POLICY
The Company has adopted a Risk management Policy in accordance with the provisions ofthe Companies Act 2013. The Company reviews the execution of Risk management plan andensures its effectiveness including identification evaluating monitoring and minimizingidentifiable risks.
At present the company has not identified any element of risk which may threaten theexistence of the company.
Pursuant to the provisions of the Companies Act 2013 and SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 (Listing Regulations) Board has carried out anannual evaluation of its own performance the directors individually as well as theevaluation of the working of its Committee(s) after seeking inputs from all the Directorsexcluding the Director being evaluated. The details of the Board evaluation is explainedin the Corporate Governance report which forms part of this report.
The Board has on the recommendation of the Nomination & Remuneration Committeeframed a policy for selection and appointment of Directors Senior Management and theirremuneration. The Company's remuneration policy is driven by the success and performanceof the individual employee and the Company.
The key objective of this policy is to:
a) guide the Board in relation to appointment and removal of Directors Key ManagerialPersonnel and Senior Management.
b) evaluate the performance of the members of the Board and provide necessary report tothe Board for further evaluation of the Board.
c) recommend to the Board on remuneration payable to the Directors Key ManagerialPersonnel and Senior Management.
COMPOSITION OF AUDIT COMMITTEE
For the Financial Year the Audit Committee of the Company has been constituted in linewith the provisions of Regulation 18 of Listing Regulations read with Section 177 ofCompanies Act 2013. The members of Audit Committee comprised of Mr. V K Chopra(Chairman) Mr. K R Modi Mr. T C Venkat Subramanian and Mr. Hiranya Ashar who resignedfrom Directorship effective from February 12 2016. More details of the Audit Committee isgiven in the Corporate Governance Report.
EMPLOYEES STOCK OPTION SCHEME
In accordance with the Employee Stock Option Scheme 2014 of the Company a total numberof 975000 stock options were granted during the year by the Nomination & RemunerationCommittee.
The particulars required under the SEBI (Employee Stock Option Scheme and EmployeeStock Purchase Scheme) Guidelines 1999 are annexed to and forms part of this report asAnnexure F. No employee was issued Stock Options during the year equal to or exceeding 1%of the issued capital of the Company at the time of grant.
PREVENTION OF INSIDER TRADING
The Company has formulated a policy for Prevention of Insider Trading with a view toregulate monitor and report trading by its employees and other connected persons incompliance with SEBI (Prohibition of Insider Trading) Regulations 2015 and the same hasbeen posted on the website of the Company.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to Section 134 (5) of the Companies Act 2013 the Board of Directors to thebest of their knowledge and ability confirm that:
(a) in the preparation of the annual accounts the applicable accounting standards hadbeen followed and their are no material departures;
(b) they have selected such accounting policies and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of the company at the end of the financial year and of the profitand loss of the company for that period;
(c) they have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;
(d) they have prepared the annual accounts on a going concern basis;
(e) they have laid down internal financial controls to be followed by the Company andthat such internal financial controls are adequate and were operating effectively;
(f) they have devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems are adequate and operating effectively.
(i) Statutory Auditors
In the Annual General Meeting (AGM) held on November 23 2013 M/s. WalkerChandiok& Co. LLP Chartered Accountants have been appointed Statutory Auditors of theCompany for a period of Four (4) years to hold office till the conclusion of the AGM to beheld in the Calendar year 2018 (subject to ratification by the members at every AGM).Accordingly M/s. Walker
Chandiok & Co. Statutory Auditor of the Company holds office until the conclusionof the ensuing Annual General Meeting. However M/s. Walker Chandiok& Co. LLPStatutory Auditors have expressed that due to their existing preoccupation andcommitments they will not be able to continue as the Statutory Auditors of the Companyfrom the conclusion of the ensuing Annual General Meeting.
Further Company at its Extraordinary General Meeting held on May 7 2016 has appointedM/s. N M Raiji & Co. Chartered Accountants as joint Statutory Auditors in addition toexisting Statutory Auditor to hold office until the conclusion of Annual General Meetingto be held in the calendar year 2016. The Company has received letter from M/s. N M Raiji& Co. Chartered Accountants to the effect that their appointment if made would bewithin the prescribed limits under Section 139 of the Companies Act 2013 and that theyare not disqualified from such appointment in terms of Section 141 (3) (g) of theCompanies Act 2013 & Rules made thereunder. In terms of requirements of ListingRegulations M/s. N M Raiji & Co. Chartered Accountants has confirmed that they holda valid certificate issued by the Peer Review Board of the Institute of CharteredAccountants of India. Being eligible offer themselves for appointment accordingly Boardrecommends appointment of M/s. N M Raiji & Co. Chartered Accountants as StatutoryAuditors of the Company to hold the office as such for a period of Four years upto theconclusion of AGM to be held in the Calendar year 2020 subject to ratification by membersat every
The Auditor's Report for the Financial Year ended March 312016 does not contain anyqualification reservation or adverse remark or disclaimer on the financials / operationsof the Company. The observations and comments given by Auditors in their Report readtogether with notes to Accounts are self-explanatory and hence do not call for any furthercomments under Section 134 of Companies Act 2013 and Rules made thereunder.
(ii) Secretarial Audit Report
In terms of Section 204 of the Companies Act 2013 and The Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 the Board of Directors of the Companyhad appointed M/s. Virendra Bhatt Practicing Company Secretary as Secretarial Auditor toundertake the Secretarial Audit of the Company for the financial year ended March 312016. The report of the said Secretarial Auditor is enclosed as Annexure E to this reportin form MR-3. The report is self-explanatory and do not call for any further comments.
SUBSIDIARY COMPANIES AND CONSOLIDATED FINANCIAL STATEMENTS
The Consolidated Financial Statements of the Company and its subsidiaries prepared inaccordance with Accounting Standard 21 notified under Section 133 Companies Act 2013 readwith Rule 7 of Companies (Accounts) Rule 2014 form part of the Annual Report and arereflected in the Consolidated Financial Statements of the Company.
As on March 31 2016 Your Company has 3 Indian and 13 overseas wholly ownedSubsidiaries. During the year the three wholly owned subsidiaries where incorporatednamely Rolta Muscat LLC Rolta Defence and Security Systems Limited (RDSSL) and RoltaCoastal Safety and Security Systems Private Limited (RCSSSPL).
In order to streamline and providing an impetus to the Coastal Safety business andDefence technology business the Company transferred the Coastal Safety business toRCSSSPL and Defence technology business to RDSSL respectively. This ensured that theoperations and management of the other business verticals are independent and morefocused. The transfer of said Defence technology business was made on a slump sale basisat an enterprise and equity value of Rs. 2003.82 Crores and the transfer of Coastal Safetybusiness was made on slump sale basis at an enterprise and equity value of Rs. 20.19Crores. The aforesaid valuation/s was done by an Independent valuer. Company had obtainedshareholders' approval by way of Postal Ballot on October 6 2015 for affecting thetransfer of Defence technology business. The Defence business was consolidated under asingle entity by way of amalgamation of RDSSSL with RCSSSPL. The amalgamation was approvedby Hon'ble High Court of Bombay vide its order dated April 22 2016 with the appointeddate being November 30 2016. Upon amalgamation all assets and liabilities recorded inthe books of RDSSL were transferred to and vested in RCSSSPL pursuant to the Scheme atthe fair values. Post amalgamation with the approval of Registrar of Companies Mumbaithe name of RCSSSPL was changed to "Rolta Defence Technology Systems Pvt. Ltd."on May 22 2016.
As the European business opportunities are being handled through UK and NetherlandSubsidiaries Rolta Deutschland GmbH a wholly owned subsidiary of the Company was closedon November 17 2015.
Section 136 of the Companies Act 2013 has exempted companies from attaching the annualreports and other particulars of its subsidiary Companies along with the annual report ofthe Company. Accordingly the Annual Reports of the subsidiaries are not attached withthis Annual Report. However statement containing salient features of financial statementsof subsidiaries as per 129 (3) of the Act is also included in this Annual Report in formAOC-1 as Annexure A. The financial statements of the subsidiary companies are availablefor inspection of the shareholders at the Registered Office of the Company during theworking hours.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
None of the transaction with related parties falls under the scope of Section 188(1) ofthe Act. Information on transaction with related parties pursuant to Section 134(3)(h) ofthe Act read with Rule 8(2) of the Companies (Accounts) Rules 2014 are given in AnnexureB in form AOC-2 and the same forms part of this report.
MATERIAL CHANGES AND COMMITMENTS IF ANY
Your Company does not have any material changes and commitments affecting the financialposition of the company which have occurred between the end of the financial year of thecompany to which the financial statements relate and the date of the report.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
Details of Loans Guarantees and investments covered under the provisions of Section186 of the Companies Act 2013 are given in the notes to the Financial Statements.
During the Financial Year ended 31st March 2016 the Company has notaccepted any deposits falling within the ambit of Section 73 of the Companies Act 2013and The (Companies Acceptance of Deposits) Rules 2014.
INTERNAL FINANCIAL CONTROLS AND THEIR ADEQUACY
Your Company has an adequate system of internal financial control commensurate with itssize and nature of business. Your Company has adopted policies and procedures for ensuringthe orderly and efficient conduct of its business including adherence to company'spolicies the safeguarding of its assets the prevention and detection of frauds anderrors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information.
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT THE WORKPLACE (PREVENTIONPROHIBITION & REDRESSAL) ACT 2013.
The Company has in place an Anti-Sexual Harassment Policy in line with the requirementsof The Sexual Harassment of Women at the Workplace (Prevention Prohibition &Redressal) Act 2013. Corporate Harmony Committee (CHC) has been set up to redresscomplaints received regarding sexual harassment. All employees (permanent contractualtemporary trainees) are covered under this policy. The policy has been uploaded on thewebsite of the Company.
Board of Directors at its meeting held on May 30 2016 has appointed
a) Lt. Gen K.T. Parnaik (Retd.) as Whole-time Director designated as Joint ManagingDirector Defence & Security and in charge of Defense & Security business ofthe Company. Earlier he was President of Rolta's Defense and Security business and had anillustrious career of over 40 years in the Army and held various leadership positions.
b) Mr. Rajesh Ramachandran as Whole-time Director designated as Joint Managing Director- Global Products & Technology Solutions (JMD). Earlier he was President of GlobalProducts & Technology Solutions and CTO has been elevated to the position of JMD inrecognition of his contribution in transforming the Company's business into an IP-ledmodel.
c) Mr. Ramakrishna Prabhu as Whole-time Director designated as 'Director CorporateAffairs & CFO'. He has rich experience of nearly 30 years in all aspects of Accountingand Finance Management including a stint as a senior partner in a leading audit firm.
Their appointment and remuneration are subject to the shareholders' approval in theensuing Annual General Meeting of the Company.
(ii) Independent Director
The Board of Directors has appointed Mr. Ramnath Pradeep on June 17 2016 Ms. Homai ADaruwalla and Lt. Gen. Padam Pal Singh Bhandari (Retd.) on July 15 2016 as AdditionalDirectors designated as Non- executive Independent Directors. The term of additionaldirectors expires at the ensuing Annual General Meeting ('AGM'). Board commendsappointment of all the above named additional directors by the members at ensuing AnnualGeneral Meeting.
All the aforesaid Directors have submitted the declaration of independence undersection 149(7) of the Act stating that they meet the criteria of Independence as providedunder subsection (6). In the opinion of the Board and as confirmed by these Directorsthey fulfills the conditions specified in section 149 (6) of the Act and the Rules madethereunder about their status as Independent Directors of the Company.
(iii) Retirement by Rotation
Mr. Kamal K Singh Chairman and Managing Director (in terms of Article 111 (b) of theArticles of Association) and Mr. K R Modi a Non-Executive Independent Director aredirectors appointed not liable to retire by rotation. All other director Ms. Homai ADaruwalla Mr. Ramnath Pradeep Lt.
Gen. Padam Pal Singh Bhandari (Retd) Lt. Gen. K T Parnaik (Retd) Mr. RajeshRamachandran and Mr. Ramakrishna Prabhu are appointed during the year and are seekingshareholders' approval for their appointment at the Annual General Meeting hence nodirectors is liable to retire by rotation at the ensuing Annual General Meeting.
Mr. V K Agarwala Independent Director has resigned from the Board w.e.f. November 32015 due to serious health condition. Mr. Hiranya Ashar Joint Managing DirectorInternational Operations & Group Chief Financial Officer (CFO) has resigned from theBoard w.e.f. February 12 2016 to pursue other interests. Mr. Atul Dev Tayal JointManaging Director and Chief Operating Officer (Domestic Operations) has resigned fromDirectorship w.e.f. May 30 2016. Mr. T C Venkat Subramanian Independent Director hasresigned from the Board w.e.f. June 10 2016. Mr. V K Chopra and Mr. M V Nair bothIndependent Directors have resigned from the Board w.e.f. June 11 2016 due to theirpressing professional and personal commitments. In view of imbalance of Independent andNon Independent Directors on the Board arising due to the resignations of IndependentDirectors and due to increased involvement in International Business operations of thegroup Ms. Preetha Pulusani Non- Executive Non- Independent Director on the Board of theCompany step- down from directorship w.e.f. June 17 2016
Your Directors place on record deep appreciations for the valuable services rendered bythe aforesaid Directors during their respective tenure with the Company.
CORPORATE SOCIAL RESPONSIBILITY (CSR) INITIATIVES
The brief outline of the Corporate Social Responsibility (CSR) Policy of the Companyand the initiatives undertaken by the Company on CSR activities during the year are setout in Annexure H of this report in the format prescribed in the Companies (CorporateSocial Responsibility Policy) Rules 2014. The policy is available on the website of theCompany.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The information on conservation of energy technology absorption and foreign exchangeearnings and outgo prescribed under Section 134 (3) (m) of the Companies Act 2013 readwith Rule 8 of the Companies (Accounts) Rules 2014 is annexed as Annexure G to thisreport.
PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES
The ratio of the remuneration of each director to the median employee's remunerationand other details in terms of sub-section 12 of Section 197 of the Companies Act 2013read with Rule 5(1) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 are forming part of this report as Annexure C.
In terms of the provisions of Section 197(12) of the Companies Act 2013 read withRules 5(2) and 5(3) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 a statement showing the names and other particulars of theemployees drawing remuneration in excess of the limits set out in the said Rules areprovided in the Annexure forming part of the Annual Report. However having regard to theprovisions of Section 136(1) read with its relevant proviso of the Companies Act 2013the Annual Report excluding the aforesaid information is being sent to the members of theCompany. The said information is available for inspection at the Registered Office of theCompany during working hours and any member interested in obtaining such information maywrite to the Company Secretary and the same will be furnished without any fee.
ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS
During the Financial Year ended March 31 2016 no regulator or court or tribunal haspassed any significant and material order which is impacting the going concern status andCompany's operations in future.
CORPORATE GOVERNANCE REPORT
The report on Corporate Governance as stipulated under the Listing Regulations forms anintegral part of this Report. The requisite certificate from the Secretarial Auditor ofthe Company confirming compliance with the conditions of corporate governance is attachedto the report on Corporate Governance.
At Rolta we understand that true competitive advantage is a function of qualified andcompetent Human Capital. It is the caliber and composition of the employees that providethe greatest predictor of success in changing times and at Rolta we recognize this crucialdifferentiator.
Your Company takes great pride in its Human Capital and takes significant effort inhiring advancing and retaining the top talent from across the industry. Rolta's HumanResource Department is committed to groom and develop the employees with the requisiteskills and attitudes necessary to excel at workplace and to stay ahead of the competition.Training and consequent learning therefore forms an important element of each employee'scareer growth. Technical and behavioral trainings are provided to Roltaites and arefollowed by assessment of the impact of learning.
Rolta's Human Resources team is fully committed in building a conducive and performanceoriented work environment. A strong performance management system together with a talentmanagement process helps nurture employee careers groom create high performance workforce improve productivity and ultimately boosts the Company's bottom line.
Rolta provides energizing and empowering workplace to encourage employees to applytheir creativity and talent in achieving business results. We are continuously looking forways to enhance quality of Human Capital. Employee oriented policies like flexi workinghours annual health checkups on-premise health center travel desk innovative rewardsand recognition schemes etc. help enable Roltaites to deliver their best at work andbalance their personal commitments as well. It is thus our constant endeavor to giveemployees an excellent professionally rewarding and enriching work environment.
The Board of Directors wishes to express its sincere appreciation and thanks to allcustomers suppliers banks financial institutions solicitors advisors Government ofIndia concerned State Governments and other authorities for their consistent support andco-operation for its success.
Your Directors appreciate contribution made by the employees of the Company andacknowledge their hard work and dedication in ensuring that the Company consistentlyperforms well.
For an on behalf of the Board of Directors
Kamal K Singh
Chairman & Managing Director
July 15 2016