To the Members
Your Directors have pleasure in presenting the Report on the business and operations ofthe Company along with the Standalone and Consolidated Audited Financial Statements forthe financial year ended March 31 2017.
1. FINANCIAL PERFORMANCE
A summary of the Company's financial performance in FY 2017:
Amount in Rs. lakhs
|Particulars ||Consolidated for the year ended March 31 ||Standalone for the year ended March 31 |
| ||2017 ||2016 ||2017 ||2016 |
|Revenue ||46894.24 ||48316.74 ||39045.58 ||40192.40 |
|Profit Before Interest and Depreciation ||6862.89 ||6337.27 ||5823.25 ||6202.38 |
|Finance Charges ||9.23 ||18.89 ||- ||- |
|Gross Profit ||6853.66 ||6318.38 ||5823.25 ||6202.38 |
|Provision for Depreciation ||649.49 ||660.08 ||590.74 ||586.04 |
|Exceptional Items Income / (Expenses) ||2025.00 ||23294.27 ||2025.00 ||23333.27 |
|Net Profit Before Tax ||8229.17 ||28952.57 ||7257.51 ||28949.61 |
|Provision for Tax ||860.57 ||8323.32 ||657.07 ||8055.22 |
|Net Profit After Tax ||7368.60 ||20629.25 ||6600.44 ||20894.39 |
|Balance of Profit brought forward ||41725.19 ||29603.94 ||42777.44 ||30266.42 |
|Balance available for appropriation ||49093.79 ||50233.19 ||49377.88 ||51160.81 |
|Dividend (Interim & Special) on equity shares ||443.00 ||5506.00 ||443.00 ||5506.00 |
|Dividend tax ||- ||921.56 ||- ||796.93 |
|Transfer to General Reserve ||- ||2080.44 ||- ||2080.44 |
|Surplus carried to Balance Sheet ||48650.79 ||41725.19 ||48934.88 ||42777.44 |
(Previous year's figures have been regrouped wherever necessary to conform to thecurrent year's presentation)
On a consolidated basis your Company's revenues from operation for the financial year2016-17 have decreased by 2.94% in rupee terms from Rs. 48316.74 lakhs in 2015-16 to Rs.46894.24 lakhs in 2016-17. In the current year Software Services and Software Productscontributed 96.87% and 2.78% respectively to the revenues. The net profits decreased fromRs. 20629.25 lakhs in 2015-16 to Rs. 7368.60 lakhs during the year a decrease of64.28%. This has translated to a Basic Earnings Per Share of Rs. 41.92 in 2016-17 vs. Rs.107.14 in 2015-16.
There was no change in the nature of business of the Company and its subsidiaries.
2. MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THECOMPANY
There have been no material changes and commitments if any 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.
Your Directors are pleased to recommend a final dividend of Rs. 4.50 per equity shareof Rs. 10 each for the year under review. During the year your Company paid an interimdividend of Rs. 2.50 per equity share in October 2016. This aggregates to a total dividendof Rs. 7 per equity share.
A note on transfer of shares and unclaimed dividends to Investor Education andProtection Fund has been stated in the Shareholders Information forming part of thisAnnual Report.
4. BUY-BACK OF SHARES
In terms of decision of the Board of Directors (Board) dated October 27 2016 and inaccordance with the provisions of Companies Act 2013 (Act) SEBI (Buy-back of Securities)Regulations 1998 and pursuant to approval of the shareholders through Postal Ballot datedDecember 23 2016 the Company through its Letter of Offer dated January 24 2017 hadoffered to buy-back 2869098 fully paid up equity shares of Rs. 10 each at a price of Rs.410 per share for an aggregate amount of up to Rs. 11763.30 lakhs from the existingshareholders of the Company under Tender Offer mechanism. The offer size represented24.49% and 25% of the aggregate paid up capital and free reserves (including securitiespremium account) as per the audited standalone and consolidated financial statements ofthe Company as on March 31 2016 respectively. The offer was kept open from February 32017 to February 16 2017. Your Company bought back 609699 equity shares at Rs. 410 perequity share and extinguished the same by March 7 2017.
5. SCHEME OF AMALGAMATION
The Board at its meeting held on September 14 2015 decided to amalgamate SaskenNetwork Engineering Limited (SNEL) the wholly owned subsidiary with your Company. Theappointed date for the proposed scheme was April 1 2015. After getting appropriateapprovals SNEL filed a petition in the Hon'ble High Court of Karnataka on April 30 2016.After several hearings and filing of reports by the concerned authorities the matter wasposted for hearing on December 9 2016. The Ministry of Corporate Affairs videnotification dated December 7 2016 transferred all pending proceedings before the HighCourt to National Company Law Tribunal (NCLT) effective December 15 2016.
In the interim your Directors recommended another round of buy-back of shares in theirmeeting held on October 27 2016. As per Regulation 19(2) of SEBI (Buy-back of Securities)Regulations 1998 "no public announcement of Buy-back shall be made during thependency of any scheme of amalgamation or compromise or arrangement pursuant to theprovisions of the Act". On November 23 2016 your Company completed dispatchingpostal ballot notice to its shareholders seeking approval for buy-back of shares throughTender Offer Mechanism.
As there was a possibility for further adjournment of matter and left with no choiceSNEL filed a Memo through its Counsels in the Hon'ble High Court for withdrawing thepetition with a liberty to revive the Scheme at the same stage at which it was withdrawnwithin twelve (12) months from this date or three (3) months of closure of the buy-backproposed by the Company whichever is earlier. The Hon'ble High Court at its hearing onDecember 9 2016 permitted SNEL to withdraw the petition with a liberty to file it afreshat an appropriate stage if so necessary and so advised.
Your Company completed buy-back of shares on March 7 2017 and thereafter SNEL filedan application in the Hon'ble High Court of Karnataka for recalling its Order datedDecember 9 2016 and transferring the proceedings to NCLT Bengaluru Bench. This matter isunder consideration of the Hon'ble High Court.
6. BUSINESS OUTLOOK ECONOMIC & REGULATORY SCENARIO AND OPPORTUNITIES
The markets in which your Company operates continues to be in a rapid state ofevolution due to advancement in technologies that drive and shape Computing ConnectivitySecurity Social Media Mobility Analytics and the Cloud among others.
Competition remains intense and a wave of Creative Destruction' where legacy ischallenged by new entrants as envisioned by renowned economist Joseph Schumpeter seemsto be the only constant. Digital technologies have resulted in creating marketdiscontinuities and have impacted sectors ranging from Automotive Industrial AutomationSemiconductors Communication & Consumer Manufacturing Financial Services and othersectors. A wave of consolidation will continue as newer entrants especially unicorns(highly-valued start-ups) fuelled by an entrepreneurial spirit backed by high investmentsin R&D and access to capital turn into predators. Value is clearly shifting toenterprises that have the ability to surf the digital tide and leverage businessanalytics augmented / virtual reality security and the Internet of Things (IoT).
The consensus view of a leading strategy consultants and conversations with our marqueecustomers confirm that there is significant headroom for growth in the key verticals weoperate in viz. Automotive Communications and Consumer (Retail) SemiconductorsIndustrial Automation. Our two-pronged thrust includes Product Engineering Services andDigital Transformation Services. Our service portfolios focuses on enabling our customersefficiently and effectively manage any part of or the entire portion of the productdevelopment life cycle. Our customers highly value our three-decade experienceengineering competence penchant to solve complex problems and the ease with which theyare able to engage us.
In the Digital Transformation space we capitalize on our expertise in connectivity& computing and combine it with cognitive elements such as data-driven and contextualdecision-making.
We have a blueprint which we internally call our 5 x 5 vision that provides us anactionable roadmap to align our capability with that of our customer and market needs. Ourorganization is structured along key verticals (Business Lines - BLs) and each one ofthem is led by a person with deep insights on the trends and implications for the industryvertical. The BLs are supported by a robust technology practice that creates compellingsolutions in response to the needs of a vertical. Our global delivery organization hasexpertise in executing programs across multiple geographies combining the capabilities inboth hardware and software.
Thus we believe that as a Company we are well positioned to profit from these winds ofchange. Our ability to offer the entire stack of services from Chip to Cognitive' ishighly differentiated.
NASSCOM India's reputed trade body estimates that Global ER&D (we areinterchangeably using Engineering Research & Development - ER&D with ProductEngineering Services - PES) spend continues to grow albeit at modest levels. Hypercompetition is driving the growth of distributed development thereby providing an impetusto increase global outsourcing. Outsourcing helps enterprises bridge capacity andcapability gaps. NASSCOM estimates that the global sourcing of ER&D experienceddouble-digit growth of 11% over 2015 to reach USD 80 billion'. India enjoys a head startof being a globally preferred destination for providing PES which accounts for about athird of outsourced spends. Fuelling this growth is an increase in the use of embeddedsystems the evolution of underlying hardware & software platforms and the applicationecosystem. Your Company is well poised to service the needs of global leaders acrossseveral verticals who are leading the charge to unlock the world of opportunity caused bydigital disruption. From inception we have built ourselves as an organization that hassilicon expertise at its very core. Semiconductor companies today deliver sophisticatedplatforms that enable rapid product development to enhance their competitive advantage.The increasing complexity in peripheral and enabling technologies has driven them to takea collaborative approach to platform development. Our range of silicon offerings includesIC Design Hardware Platform Silicon Verification and Validation. These services enableour customers focus on their core while we provide services such as integration of our and/ or third-party solutions perform extensive testing of the final product to ensure azero-defect launch.
In the current year we have worked on several engagements including next-generationautomotive chipsets that comply with exacting automotive standards for reliability. Inother engagements we have supported semiconductor vendors deliver low power designtargeting - wearables IoT devices or edge devices such as smart home gateways. We havesupported various chipset vendors in porting operating systems (Linux Android Windows)on their new chipsets and have extended the Life Cycle of end-of-life chipsets.
In the Communication & Consumer space we have proven our leadership in the Androidecosystem for the last several years. Your Company has enabled several Smartphone OriginalEquipment Manufacturers (OEMs) as well as Rugged Industrial Device OEMs launch new devicesas well as upgrade their existing devices to "Marshmallow" and"Nougat" releases of Android. Our services enable Rugged Device OEMs supportcritical applications such as enterprise asset management among others. This requiresintegration of multiple technologies that help automate and streamline logistic processes.In addition our automation framework provides critical testing services to global leadersin the rugged devices space.
The connected auto safety and autonomous driving themes continue to dominate theautomotive industry. While rapid strides have been made in the area of connectedin-vehicle services and telematics there is still a long distance to go before autonomousdriving becomes a reality. Consumers continue to seek a better and safer drivingexperience and are fuelling a demand for systems that provide intuitive feedbackreal-time information access and less distractive infotainment delivery. Today automakerslook beyond simplistic audio-video systems and focus on providing a centralizedinfotainment system that enhances the driving experience'. OEMs provide apersonalized experience that enables drivers seamlessly connect with both personal &professional spaces and be safer than ever before. We continue to deliver automotivesolutions which enable faster time to market for Tier 1 OEMs most of whom are ourcustomers. Some of our offerings include Platform Development In-Vehicle Infotainmentsystems enhancement of multimedia and connectivity options to support content playbacktelematics Advanced Driver Assistance System etc.
In the industrial automation space we are strengthening our existing engagements. Wehave helped our customer enhance the communication efficiency of a robotic assemblysystem. We believe this is a growth market and will emerge as a key vertical for us in thenear to medium term.
For a more detailed discussion of our areas of business please refer to the Technologyand Markets section.
7. SHARE CAPITAL
During the year your Company bought back 609699 equity shares under Tender OfferMechanism. Consequently the issued subscribed and paid-up capital of the Companydecreased from 17719813 equity shares of Rs. 10 each as at April 1 2016 to 17110114equity shares of Rs. 10 each as at March 31 2017.
7.1. Sasken Employees' Share Based Incentive Plan 2016
Your Company continues the philosophy of encouraging senior leaders in the Company tobe partners in the growth of your organization. During the year your Company formulated anew Plan / Scheme viz. Sasken Employees' Share Based Incentive Plan 2016 (Incentive Plan2016) under the SEBI (Share Based Employee Benefits) Regulations 2014 enabling yourCompany to grant up to a maximum of 885900 options / Stock Appreciation Rights /Restricted Stock Units / other Stock Based Instruments as may be formulated by SEBI fromtime to time in any combination and in accordance with the applicable provisions of law.Your Company will seek in-principle approval of the Stock Exchanges for the Incentive Plan2016 at an appropriate time. Therefore we have not made any disclosure at this stageunder SEBI (Share Based Employee Benefits) Regulations 2014 and the same will be made asand when the Incentive Plan 2016 is implemented.
Your Company has neither accepted nor renewed any deposit during the year. As such noamount of principal and / or interest is outstanding as on the Balance Sheet date.
9. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
Details of Loans Guarantees and Investments covered under the provisions of Section186 of the Act are given in the notes to the Financial Statements.
10. ENERGY CONSERVATION TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The information on conservation of energy technology absorption and foreign exchangeearnings and outgo stipulated under Section 134(3)(m) of the Act read with Rule 8 of theCompanies (Accounts) Rules 2014 is annexed herewith as "Annexure A".
11. RISK MANAGEMENT POLICY INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
Your Company has in place a mechanism to identify assess monitor and mitigate variousrisks to key business objectives. Major risks identified by the businesses and functionsare systematically addressed through mitigating actions on a continuing basis. These arealso discussed at the meetings of the Audit Committee and the Board of your Company. YourCompany's internal control systems are commensurate with the nature of its business andthe size and complexity of its operations. These are routinely tested by Statutory as wellas Internal Auditors. Significant audit observations and actions taken thereon arereported to the Audit Committee.
The key business risks identified by your Company and mitigation plans are detailed inthe Management's Discussion and Analysis Report.
12. CORPORATE SOCIAL RESPONSIBILITY
Your Company has in place a Corporate Social Responsibility (CSR) Committee inaccordance with Section 135 of the Act. The details of the CSR Policy and the AnnualReport on CSR activities as prescribed under the Act and Companies (Corporate SocialResponsibility Policy) Rules 2014 is annexed herewith as "Annexure B".
From the beginning your Company has always believed in being a conscientious andcaring organization that aims to serving the communities it is part of. Built on thisbelief system your Company has leveraged its expertise in technology for the bettermentof the underprivileged sections of society.
Your Company has supported Self Employed Women's Association (SEWA) a renownedorganization dedicated to serving underprivileged women and enabling them to earn alivelihood. Our young team of engineers have tirelessly worked to create m-Bachat'(Sasken digital Transaction Enablement Platform) in Anand and Kheda district of Gujaratwhich enables the SEWA workforce to automate and digitize the micro banking transactionsof SEWA Bank. This goes a long way in enhancing the trustworthiness and convenience ofbanking services provided to the underserved. This solution leverages your Company'sstrength in the mobility and computing domains and has been developed to run on Androiddevices. The application supports an intuitive bilingual user interface that can readilybe used by semi-literate women. This solution has positively impacted the livelihood ofthe poorest of the poor in both urban and remote locations. Anand and Kheda districts havesuccessfully gone live with the m-Bachat solution since April 2016. Six other districtsnamely Aravalli Chhota Udepur Kutch Mehsana Patan and Surendranagar have progressivelygone live between July - October 2016.
Your Company is currently involved in building new features to enhance the m-Bachatsystem.
Since February 2017 your Company has also been involved in developing a pilot solutionfor SEWA's membership management. The MMS pilot solution has gone live in a short span oftime much to the delight of SEWA since March 6 2017. It is currently in use to manage themembership renewal of 12062 SEWA members across the districts of Anand Mehsana andSabarkantha in Gujarat.
In Belagavadi a rural village about 80 kms from Bengaluru life has changed forvillagers after your Company had successfully electrified about 220 households. A villagethat was affected by frequent load-shedding which on an average is about 6 hours a dayis now having a huge sigh of relief. Your Company in association with IIT MadrasBengaluru Electricity Supply Company Limited (BESCOM) and Rural ElectrificationCorporation (REC) has electrified households in Belagavadi with the Solar DCInverterless technology. All the installations were completed by February 15 2017.
Your Company has on January 3 2017 constituted a Trust under the name and style"Sasken Foundation" for exclusively undertaking CSR activities of your Company.
13. VIGIL MECHANISM / WHISTLE BLOWER POLICY
The Company has established a vigil mechanism / whistle blower policy for Directors andemployees to report their genuine concerns which is reviewed and updated from time totime. The said policy is available on the Company's website (www.sasken.com / investors).
All Independent Directors have given declarations that they meet the criteria ofindependence as laid down under Section 149(6) of the Act and Regulation 16(1)(b) of theSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 (ListingRegulations). Dr. Ashok Jhunjhunwala an Independent Director resigned from the Board ofyour Company on January 30 2017 and Mr. Krishna J. Jhaveri ceased to be a Whole TimeDirector effective March 15 2017. Your Company places on record its appreciation for thevaluable services and guidance rendered by them during their tenure. In accordance withthe provisions of the Act and in terms of the Articles of Association of the Company Mr.Jyotindra B. Mody and Dr. G. Venkatesh retire by rotation at the forthcoming AnnualGeneral Meeting (AGM) and being eligible offer themselves for re-appointment.
14.1. Board Evaluation
Pursuant to the provisions of the Act and Regulation 17 of the Listing Regulations theBoard has carried out an annual performance evaluation of its own performance theDirectors individually and the Board Committees. The Nomination & RemunerationCommittee has laid down the evaluation framework for assessing the performance ofDirectors comprising the following key areas: a) Attendance in meetings of the Board andits Committees. b) Quality of contribution to Board deliberations. c) Strategicperspectives or inputs regarding future growth of Company and its performance. d)Providing perspectives and feedback going beyond information provided by the management.e) Commitment to shareholder and other stakeholder interests.
14.2. Board independence
Definition of Independent Director' is referred in Regulation 16(1)(b) of theListing Regulations and Section 149(6) of the Act. Based on the confirmation / disclosuresreceived from the Directors and on evaluation of the relationships disclosed thefollowing Directors are Independent: a) Mr. Bansi S. Mehta b) Mr. Bharat V. Patel c) Prof.J. Ramachandran d) Mr. Sanjay M. Shah e) Mr. Sunirmal Talukdar
14.3. Nomination & Remuneration Policy
Your Company has a Nomination & Remuneration policy for selection and appointmentof Directors Senior Management and fixing their remuneration including criteria fordetermining qualifications positive attributes independence of a Director and othermatters as provided under Section 178(4) of the Act. The said policy and composition ofthe Nomination and Remuneration Committee have been stated in the Corporate GovernanceReport.
14.4. Meetings of the Board and its Committees
The details of (a) the meetings of the Board and its Committees held during the year;and (b) composition and terms of reference of the Committees are detailed in the CorporateGovernance Report. 14.5. Code of conduct
The Board has approved a Code of Business Conduct (Code) which is applicable to theMembers of the Board and employees. The Code has been posted on the Company's website(www.sasken.com / investors). The Code lays down the standard of conduct which is expectedto be followed by the Directors and designated employees in their business dealings and inparticular on matters relating to integrity in the work place in business practices andin dealing with stakeholders. All the Board Members and the Senior Management personnelhave confirmed compliance with the Code.
15. DIRECTORS' RESPONSIBILITY STATEMENT
To the best of our knowledge and belief and according to the information andexplanations obtained by us your Directors make the following statements in terms ofSection 134(3)(c) of the Act that: a) in the preparation of the annual accounts theapplicable accounting standards have been followed along with proper explanation relatingto material departures; b) accounting policies have been selected and applied consistentlyand judgments and estimates have been made that are reasonable and prudent so as to give atrue and fair view of the state of affairs of the Company as at March 31 2017 and of theprofit of the Company for the year ended March 31 2017; c) proper and sufficient care hasbeen taken for the maintenance of adequate accounting records in accordance with theprovisions of the Act for safeguarding the assets of the Company and for preventing anddetecting fraud and other irregularities; d) the annual accounts have been prepared on agoing concern basis; e) proper internal financial controls to be followed by the Companywere in place and that such internal financial controls were adequate and were operatingeffectively with no material defects; and f) systems to ensure compliance with theprovisions of all applicable laws were in place adequate and operating effectively.
16. SUBSIDIARY COMPANIES & JOINT VENTURES
Your Company has one wholly owned subsidiary in India and four wholly ownedsubsidiaries overseas. During the financial year ended March 31 2017 your Company haddisinvested its holding in the joint venture company viz. ConnectM Technology SolutionsPrivate Limited. There has been no change in the nature of business of subsidiariesduring the year under review. In accordance with Section 129(3) of the Act your Companyhas prepared a consolidated financial statement of your Company and all its subsidiarycompanies which is forming part of the Annual Report. A statement containing salientfeatures of the financial statements of the subsidiary companies is also included in theAnnual Report.
In accordance with third proviso of Section 136(1) of the Act the Annual Report of theCompany containing therein its standalone and consolidated financial statements have beenplaced on the Company's website (www.sasken.com / investors). Further as per fourthproviso of the said section audited annual accounts of each of the subsidiary companieshave been placed on the Company's website (www.sasken.com / investors). Members interestedin obtaining a copy of the audited annual accounts of the subsidiary companies may writeto the Company Secretary at the Company's registered office address.
The Audit Committee reviews the consolidated financial statements of the Company andthe investments made by its unlisted subsidiary companies. The minutes of the boardmeetings along with a report on significant developments of the unlisted subsidiarycompanies are periodically placed before the Board.
Your Company does not have any material unlisted Indian subsidiary companies. Thepolicy for determining material subsidiaries' has been disclosed on Company'swebsite (www.sasken.com / investors).
Sasken Network Engineering Limited has filed an application with the Hon'ble High Courtof Karnataka for amalgamating itself with your Company (the holding company).
17.1. Statutory Auditors and Statutory Auditors' Report
Your Company's Auditors M/s. S. R. Batliboi & Associates LLP CharteredAccountants (ICAI Firm Registration No.101049 W / E-300004) were appointed at the last AGMto hold office until the conclusion of the forthcoming AGM. However vide their letterdated April 19 2017 they have expressed their inability to continue as Statutory Auditorsof your Company up to the conclusion of the forthcoming AGM. The Board thus appointed M/s.B S R & Associates LLP Chartered Accountants (ICAI Firm Registration No. 116231 W / W- 100024) as Statutory Auditors of your Company in the casual vacancy caused by the saidresignation effective April 19 2017 till the conclusion of the forthcoming AGM and havesought approval of members to appoint them for the aforesaid period.
Pursuant to the provisions of Section 139 of the Act and Rules framed thereunder asamended it is mandatory to rotate the Statutory Auditors on completion of maximum term asprovided therein. The Board on April 19 2017 has recommended appointment of M/s. B S R& Associates LLP Chartered Accountants as Statutory Auditors of the Company and tohold office for a period of up to 5 consecutive years from the conclusion of the 29th AGMtill the conclusion of the 34th AGM subject to ratification of their appointment by theshareholders at every AGM.
Your Company has obtained consent of M/s. B S R & Associates LLP and a certificatein accordance with Section 139 141 and other applicable provisions of the Act to theeffect that their appointment if made shall be in accordance with the conditionsprescribed and that they are eligible to hold office as Statutory Auditors of the Companysubject to approval of the members in the forthcoming AGM.
Necessary resolution has been provided in the AGM notice seeking approval of members.
There are no qualifications reservations or adverse remarks made by M/s. S. R.Batliboi & Associates LLP Statutory Auditors in their Report. 17.2.
Secretarial Auditor and Secretarial Auditor Report
Pursuant to the provisions of Section 204 of the Act and Rules framed thereunder asamended your Company appointed Mr. Ranganatha Rao Vittal Practicing Company Secretary toundertake Secretarial Audit of the Company. The Practicing Company Secretary has submittedhis Report on the Secretarial Audit conducted by him which is annexed herewith as"Annexure C".
There are no qualifications reservations or adverse remarks in his Report.
18. CORPORATE GOVERNANCE AND SHAREHOLDERS INFORMATION
Your Company is committed towards maintaining high standards of Governance. The Reporton Corporate Governance as stipulated under Schedule V of the Listing Regulationsshareholders information together with a Corporate Governance Compliance Certificate fromMr. Ranganatha Rao Vittal Practicing Company Secretary confirming compliance forms anintegral part of this Report which is annexed herewith as "Annexure D".
19. MANAGEMENT DISCUSSION AND ANALYSIS REPORT
The Management Discussion and Analysis Report for the year under review as stipulatedunder Schedule V of the Listing Regulations is given separately forming part of thisAnnual Report.
20. RELATED PARTY TRANSACTIONS
All related party transactions that were entered into during the financial year were onan arm's length basis and were in the ordinary course of business. None of the Directorshas any pecuniary relationships or transactions with the Company.
Your Company has in place a Related Party Transactions Policy for the purpose ofidentification and monitoring of such transactions. This policy has been approved by theBoard and is available on the Company's website (www.sasken.com / investors). Since therehave been no materially significant contracts / arrangements / transactions with relatedparties disclosure under Form No. AOC-2 is not applicable.
21. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
There are certain on-going litigations / disputes in the normal course of business.However there are no significant and / or material orders passed by the Regulators /Courts having a material impact on the operations of the Company during the year underreview.
Your Company has always encouraged its employees to generate intellectual property interms of patents to derive benefit from innovation. Your Company has filed for a patent ona method for human detection in this year at Indian patent office and will be filing it atUS patent office shortly.
During the year your Company has obtained the following new patents:
1. Indian Patent No. 274332: Method and system for automatic gain control of a speechsignal.
2. Patent No. US 20130259229 A1: User managed number privacy and call accessibility.
3. Indian Patent No. 277841: System and method for echo cancellation.
A total of 56 patents have been granted to your Company till now.
23. QUALITY CERTIFICATIONS
Your Company is certified for ISO 14001:2004 [Environment Management System Standard].Your Company is committed to contribute towards environment management being aresponsible corporate member of the communities in which it operates. This reaffirms yourCompany as a responsible corporate citizen.
ISO / IEC 27001:2013
Your Company is certified for ISO / IEC 27001:2013 [Information Security ManagementSystem Standard]. This is important for assuring our stakeholders (like CustomersPartners Vendors Investors and Employees) of our commitment in protecting theirinformation assets and Intellectual Properties (IPs) as well as sensitizing all employeesabout importance of confidentiality integrity and availability of information assets ofour stakeholders.
Your Company is certified for ISO 9001:2008 Quality Management System (QMS)requirements. It helps us to deliver quality deliverables to our customers with scheduleand cost predictability through established organization systems and processes.
CMMI - Dev - V1.3 - ML3
On delivery excellence your Company leverages industry best practices and standards toestablish and continuously improve delivery systems and processes. Your Company hasestablished a delivery platform called Sasken Delivery Platform (SDP). SDP is anintegrated project management platform for project managers team members and otherstakeholders. Your Company's QMS has been formally assessed at Maturity Level 3 of theCMMI-Dev-V1.3. Our processes are also compliant to requirements of technology verticalspecific standards like TL9000 R5.5 / 5.0.
24. CONSOLIDATED FINANCIAL STATEMENTS
The Consolidated Financial Statements of the Company prepared in accordance withrelevant Accounting Standards (AS) issued by the Institute of Chartered Accountants ofIndia forms part of this Annual Report.
25. EXTRACT OF ANNUAL RETURN
The details forming part of the extract of the Annual Return in Form MGT-9 is annexedherewith as "Annexure E".
26. PARTICULARS OF EMPLOYEES
The information required pursuant to Section 197(12) read with Rule 5(1) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 is annexedherewith as "Annexure F1".
A statement containing names of employees employed throughout the financial year and inreceipt of remuneration of Rs. 102 lakhs or more or if employed for part of the year andin receipt of Rs. 8.50 lakhs or more per month pursuant to Rule 5(2) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 is annexed herewith as"Annexure F2".
Your Directors thank the various Central and State Government DepartmentsOrganizations and Agencies for the continued help and co-operation extended by them. TheDirectors also gratefully acknowledge all stakeholders of the Company viz. customersmembers dealers vendors banks and other business partners for the excellent supportreceived from them during the year. Your Directors place on record their sincereappreciation to all employees of the Company for their unstinted commitment and continuedcontribution to the Company.
| ||For and on behalf of the Board of Directors |
|Bengaluru ||Rajiv C. Mody |
|April 19 2017 ||Chairman & Managing Director |
Annexure A Conservation of energy technology absorption and foreign exchange earningsand outgo A) Conservation of Energy - Environmental Management System (EMS) We strive tocontinue saving energy for the next generations
Your Company with its focus on concentrating towards managing the environmental systemhas made this its DNA by being environmentally responsible in its workplace. Our employeesbeing important stakeholders have been acting as major Change Agents' in supportinginitiatives such as: x_ 100% compliance to all applicable legislations
Electricity consumption of your Company in FY 2017 was pegged at 1.4 Kwh per squarefeet. Constant awareness and proactive approach has been initiated towards energy usage.
Further to the Save Paper' initiative which runs in the organization yourCompany took an initiative to reduce the number of output devices and in turn the paperconsumption reduced by half than what was consumed in FY 2016.
Your Company continues to use initiatives like:
This real - time monitoring and control devices ensure that with proper monitoring ofoverall energy consumed by chiller plants we can fine tune the chillers / AHU. Thisprocess also aids in eliminating errors which may occur during manual recording. YourCompany's commitment to continuous improvement on environmental performance is integratedinto its programs. This is driven by individual commitment of team members and strongsupport from management.
Your Company's philosophy is Every drop counts every tree is precious and everywatt is valuable. We continue to pledge to take the initiative and make a difference.'
B) Research & Development and Technology Absorption
Research and Development in your Company are closely aligned to the 5 business lines:Semiconductors Communications Devices and Emerging Markets Automotive Industrials andRetail. In this financial year your Company has many offerings to enhance capability inthe areas of 5G IoT Home Gateway wearables computer vision ADAS (Advanced DriverAssistance Systems) and data analytics with deep learning. In the 5G wireless activityyour Company has created a test bench capable of demonstrating Cat-M1 physical layer andMIMO management solutions. In the computer vision area your Company has developed avision sensor framework which has the ability to detect humans human faces unwantedobjects fire and many other useful features for shop analytics. Your Company alsodeveloped an ADAS solution useful for analysing driver behaviour and also to authenticatethe driver based on images. In FY 2017-18 your Company plans to demonstrate a wirelesssensor network with vision sensors. As part of the 5G wireless activity a Cat-M1 solutionwill be aided with a MIMO management solution for transmission mode switching. In theautonomous vehicles segment your Company has created a connected car gateway withMinnowBoard MAX Board based on Intel Atom chipset. It can be used for vehicle tracking andstatus monitoring and remote control using mobile collecting vehicle performanceparameters and uploading to cloud for performing analytics.
A multi-framework home gateway solution developed by your Company based on Intel Edisonboard features with support for IoTvity and Alljoyn is suitable for smart home automationremote monitoring and energy management.
Your Company has also developed a tablet based clienteling solution forbrick-and-mortar retailers. The tablet based clienteling solution targeted forbrick-and-mortar retailers to provide personalized recommendations to shoppers.
In FY 2017-18 your Company has initiated activity in the area of data analytics andmachine learning. Capability building in Data Analytics and machine learning will help theCompany transition from chips to cognition area. Current activity involves development oftechniques for sensor data analysis clustering for insight generation and machinelearning applications. Such techniques are used in developing a game analytics solutionfor Golf Badminton and Cricket. Clustering and machine learning techniques for gameanalytics can give more meaningful feedback for players regarding their playing style anddeviation from some of the best players with that playing style.
In addition Sasken is creating offerings for big data discovery solutions advancedanalytics machine data analytics predictive and context based maintenance real-timedata ingestion and integration and recommender systems leveraging device data.
C) Foreign Exchange Earnings and Outgo
| || ||Amount in Rs. lakhs |
| ||As at March 31 2017 ||As at March 31 2016 |
|Foreign exchange earnings ||30194.38 ||60607.06 |
|Foreign exchange expenditure ||11631.05 ||13722.54 |
Annexure B Annual Report on Corporate Social Responsibility (CSR) activities
1. A brief outline of the Company's CSR policy including overview of projects orprograms proposed to be undertaken and a reference to the web-link to the CSR policy andprojects or programmes: Kindly refer the Company's website: http://www.sasken.com /investors / corporate-governance / CSR Policy.
2. The Composition of the CSR Committee: x_ Mr. Rajiv C. Mody Chairman x_ Mr. SanjayM. Shah Member x_ Ms. Neeta S. Revankar Member
3. Average net profit of the company for last three financial years:
Rs. 21469.33 lakhs
4. Prescribed CSR Expenditure (two per cent of the amount as in item 3 above):
Rs. 429.39 lakhs
5. Details of CSR spent during the financial year:
a. Total amount to be spent for the financial year - Rs. 429.39 lakhs
b. Total amount spent during the financial year - Rs. 430.87 lakhs
c. Amount unspent if any - Nil
d. Manner in which the amount spent during the financial year is detailed below:
Amount in Rs. lakhs
|Sl. No. CSR project or activity identified ||Sector in which the Project is covered ||Projects or programs 1. Local area or other 2. Specify the State and District where projects or programs was undertaken ||Amount outlay (budget) project or programs wise for the year ||Amount spent on the projects or Programs or Program Subheads: 1. Direct expenditure on projects or programs ||Cumulative expenditure up to the reporting period ||Amount spent: Direct or through implementing agency* |
| || || || ||2. Overheads: || || |
|1 Self Employed Women's Association (SEWA) ||Women Empowerment ||1. Other ||120.00 ||95.87 ||259.89 ||Directly |
| || ||2. State: Gujarat District: Anand and others || || || || |
|2 Inverterless Solar DC system for about 220 households ||Rural Development ||1. Local Area: Belagavadi ||55.00 ||55.00 ||55.00 ||Through IIT Madras BESCOM & Rural |
| || ||2. State: Karnataka District: Ramanagara || || || ||Electrification Corporation (REC) |
|3 Promotion of Employment to Disabled People ||Promotion of Employment to Disabled People ||National Centre for Promotion of Employment for Disabled People New Delhi ||5.00 ||5.00 ||10.00 ||Through National Centre for Promotion of Employment for Disabled People |
|4 Providing Solar Pumps to salt workers in Gujarat ||Rural ||1. Other ||100.00 ||- ||- ||- |
| ||Development ||2. State: Gujarat || || || || |
|5 Sasken Foundation || ||Sasken Foundation ||275.00 ||275.00 ||275.00 ||- |
|TOTAL || || ||555.00 ||430.87 ||599.89 || |
Details of implementing agency: Your Company has on January 3 2017 formed a Trustunder the name and style "Sasken Foundation" for exclusively undertaking CSRactivities of your Company. A sum of Rs. 275 lakhs has been contributed for the saidpurpose.
6. In case the company has failed to spend the two per cent of the average net profitof the last three financial years or any part thereof the company shall provide thereasons for not spending the amount in its Board's Report: Not Applicable
7. The CSR Committee of the Company hereby confirms that the implementation andmonitoring of CSR Policy is in compliance with CSR objectives and Policy of the Company.
| ||For and on behalf of the CSR Committee |
|Bengaluru ||Rajiv C. Mody |
|April 19 2017 ||Chairman |