Your directors have pleasure in presenting the 29th Directors' Report on thebusiness and operations of your company for the financial year ended 31 March 2020.
1. FINANCIAL HIGHLIGHTS
| || || |
(Rs. in Million)
| || |
| ||2019-20 ||2018-19 ||2019-20 ||2018-19 |
|Revenue ||44274 ||46175 ||15231 ||16149 |
|Other Income ||1583 ||1340 ||1267 ||1621 |
|Total Income ||45857 ||47515 ||16498 ||17770 |
|Expenses || || || || |
|Operating Expenditure ||38381 ||39847 ||11706 ||11838 |
|Depreciation and amortization expense ||1878 ||1114 ||990 ||509 |
|Impairment of non-current assets ||404 ||- ||311 ||- |
|Total Expenses ||40663 ||40961 ||13007 ||12347 |
|Profit before finance cost tax and share of profit from Joint Venture ||5194 ||6554 ||3491 ||5423 |
|Finance cost ||486 ||326 ||148 ||11 |
|Profit before tax and share of profit from Joint Venture ||4708 ||6228 ||3343 ||5412 |
|Share of (loss) / profit from joint venture ||(26 ) ||5 ||- ||- |
|Exceptional item ||- ||35 ||- ||- |
|Profit before tax (PBT) ||4682 ||6198 ||3343 ||5412 |
|Current tax ||1181 ||1512 ||743 ||1179 |
|Deferred tax ||89 ||(85) ||120 ||(174) |
|Profit after Tax (PAT) ||3412 ||4771 ||2480 ||4407 |
|Non- controlling Interest ||(13) ||(14) ||- ||- |
|Profit attributable to Shareholders of the Company ||3425 ||4785 ||2480 ||4407 |
|Other Comprehensive Income attributable to owners of the Company ||133 ||329 ||(328) ||257 |
|Non-Controlling Interest ||- ||(1) ||- ||- |
|Basic EPS ||31.14 ||42.43 ||22.56 ||39.07 |
|Diluted EPS ||31.14 ||42.36 ||22.56 ||39.01 |
|Paid up share capital ||550 ||552 ||550 ||552 |
|Retained Earnings ||25027 ||25070 ||20433 ||21813 |
2. STATE OF AFFAIRS / COMPANY'S PERFORMANCE
Your Company provides engineering manufacturing geospatial network and operationsmanagement services to global industry leaders. It delivers innovative solutions that addvalue to businesses through the deployment of robust processes and state-of-the-arttechnology. The Company's high quality products and services help clients leverage marketopportunities and gain competitive advantage.
On a consolidated basis the revenue from operations for FY 2020 stood at ' 44274million against ' 46175 million over the last year. The profit for the year attributableto shareholders and non-controlling interests was Rs.3412 million recording a decreaseof Rs.1359 million over FY 2019.
On a standalone basis the revenue from operations for FY 2020 stood at Rs.15231million which was lower by 5.68% over the last year Rs.16149 million in FY 2019. Theprofit for the year was Rs.2480 million registering a decline of 43.73% over the PAT ofRs.4407 million in FY 2019.
In terms of regulation 43A of SEBI (Listing Obligations & Disclosure requirements)Regulations 2015 the Company has formulated and uploaded dividend policy on thecorporate website (www.cyient. com/investors/ corporate-governance). Details ofdividend declared and paid by the company during FY 2020 are as follows:
| || |
| ||Dividend per share (in Rs.) ||Dividend % ||Dividend per share (in Rs.) ||Dividend % |
|Interim dividend - I ||6 ||120 ||6 ||120 |
|Interim dividend- II ||9 ||180 ||NA ||NA |
|Final dividend ||NA ||NA ||9 ||180 |
|Total dividend ||15 ||300 ||15 ||300 |
4. EARNINGS PER SHARE (EPS)
The Basic EPS of our company stood at '22.56 at standalone level and the EPS atconsolidated level stood at '31.14.
5. TRANSFER TO RESERVES
The company has not transferred any amount to reserves during the year under review.
The company continues to be debt-free and maintains sufficient cash reserves to meetits operations and strategic objectives. As at 31 March 2020 your company had liquidassets of Rs.5837 million as against Rs.7405 million at the previous year end. Thesefunds have been invested in short-term fixed deposits and mutual funds with scheduledbanks financial institutions and debt based mutual funds.
The Company has considered internal and external sources of information up to date ofapproval of these financial statements in evaluating possible effects that may result fromthe pandemic relating to Covid-19 on the carrying amounts of trade and unbilledreceivables goodwill and intangible assets. The Company is confident about therecoverability of these assets.
8. PUBLIC DEPOSITS
The company has not accepted any deposits falling within the meaning of Section 73 ofthe Companies Act 2013 read with the Companies (Acceptance of Deposits) Rules 2014during the financial year.
9. SHARE CAPITAL
The company has allotted 50493 equity shares of Rs.5.00 each on to the associates ofthe company and its subsidiaries upon exercise of an equal number of stock options vestedin them pursuant to the extant and Stock Option Schemes of the company.
Post April 12019 further 1193861 shares which were bought back by the company fromthe open market through the stock exchange mechanism were duly extinguished in accordanceand consonance with the Companies Act 2013 and the Securities and Exchange Board of India(Buy Back of Securities) Regulations 2018. Pursuant to the allotments and extinguishmentof shares as above as on 31 March 2020 the paid up capital of the Company wasRs.549856105/- consisting of 109971221 equity shares of Rs.5.00 each.
10. BUYBACK OF SHARES
The Board of Directors of the company had at its meeting held on 1 February 2019approved the Buyback of its fully paid-up Equity Shares of the face value of Rs.5/- eachfrom its members/beneficial owners other than those who are promoters or the persons incontrol of the company and the promoter group from the open market through the stockexchange mechanism in accordance with the Companies Act 2013 (Act) and the Securitiesand Exchange Board of India (Buy Back of Securities) Regulations 2018. The maximum sizeof the buyback was Rs.200 crores and at a maximum price not exceeding Rs.700/- per EquityShare payable in cash. The Company commenced the buy-back of Equity Shares from 12February 2019 and closed on 11 April 2019. The Company has bought back and extinguished1193861 Equity Shares at an average price of '640.21 per Equity Share. Accordinglycompany has deployed Rs.1999994028.90 (Rupees One Hundred Ninety Nine Crores NinetyNine Lacs Ninety Four Thousand Twenty Eight and Ninety paise only) which represents 99.9997% of the Maximum Buyback Size.
11. SUBSIDIARIES Cyient Inc. (CI)
Headquartered in East Hartford Connecticut Cyient Inc. provides engineeringmanufacturing geospatial network and operations management and digital services tocustomers in North America. Cyient Inc. has 28 offices across the US and Canada and 1794associates sourced primarily from within the geography. CI has over 135 active clientsranging from Fortune 500 companies to mid-size organizations and local state and federalgovernment agencies.
CI operates in 45 states and 6 Canadian provinces. The subsidiary generates $289M inannual revenues by leveraging both the local and global delivery capability of Cyient whenexecuting projects across North America. CI is also principal unit for executing theacquisition strategy in North America.
Cyient Europe Limited (CEL)
Incorporated in London as Dataview Solutions Limited in 1992 it became a part of theInfotech Group in 1999. Alongside its core competency of Geospatial Services coveringdata acquisition processing and analytics the company's services are designed to caterto leading Tier-1 and Tier-2 Telcos gas electric and water utility companies publicsector agencies and commercial businesses. In addition it provides world-classengineering services as well as digital big data and analytics capabilities to railaerospace and manufacturing companies. The company enjoys longterm relationships withseveral of its partners and customers and has built a strong foundation of trust andreliability.
CEL has 4 wholly owned subsidiaries. The oldest Cyient Benelux BV based in BredaNetherlands provides support to its customers and business in the Benelux region whileCyient Schweiz GmbH based in Bern provides support and local presence for our longstanding engagement with Swisscom. Cyient SRO based on Prague in the Czech Republic wasestablished in September 2015. Its primary focus is to provide engineering services to ourrail energy and aerospace customers across Europe and has a team size of around 100associates. The most recent subsidiary is Ansem NV a Belgium company that CEL acquired inApril 2018. Ansem is a specialist solutions company focused on the design and prototypingof analogue semi-conductor chips for a wide range of industrial clients. Ansem has officesin Leuven Belgium as well as in Enschede in the Netherlands.
The company is an ISO 9001 and ISO 27001 certified organization. Leveraging the globalexecution capability of its parent organization it maintains client relationships andensures efficient project management across Europe.
Cyient GmbH (CG)
Cyient GmbH offers world-class engineering services as well as digital big data andanalytics capabilities to rail aerospace and manufacturing companies in Germany andneighbouring countries such as Austria France and Sweden. It was established as AdvancedGraphics Software (AGS) in Leonberg Germany in 1992 - a 3D CAD/CAM e-solution softwareand application provider.
After becoming a part of the Cyient Group in 2000 it extended its foray into otherservice areas like Geospatial and IT solutions. Owing to the large pool of engineeringGIS and IT resources CG provides high-quality services and solutions to a wide range ofclients with offshore cost advantage and onsite project management. Growth in the recentpast has come from some of our key accounts as well through expanding its Utility andTelecom activities as well as semiconductor design and verification services. Cyient GmbHhas branch office in France.
Cyient Australia Pty Limited (CAPL)
Established in 2014 Cyient Australia provides engineering design and networkoperations services to diverse industries to its Asia Pacific customers. CAPL supports itscustomers especially Telecommunication Utilities and Rail transportation from globaldelivery centres in Sydney and Melbourne with operations Australia wide and across theAPAC region. Now with logistic capabilities Cyient Australia has branched its serviceoffering into a full End-to-End Delivery model introducing local civil engineering intoits already enhanced process. CAPL has over 300 associates operating from our globaldelivery centres and customers across Australia. Melbourne is the APAC headquarter
Cyient KK (CKK)
Established in 2008 in Central Tokyo CKK is a leading engineering service provider inJapan. CKK provides end- to-end engineering services and solutions to different industryverticals such as Aerospace & Defense Energy Rail Industrial and Semiconductor.CKK leverages the global delivery capability of the parent organization while maintainingclient relationships and managing projects locally.
During the previous year started engagement with new customer Mitsubishi ElectricCorporation (MELCO) on Design Optimization for cost reduction Proto build and carryoutfunctional and integration testing for Cubicle Type Gas Insulated Switchgears (C-GIS) andexpanded business to Maintenance Repair & Overhaul (MRO) operations of existingcustomer IHI Corporation.
Cyient Singapore Pte Limited (CSPL)
Established in 2015 Cyient Singapore is the South East Asia headquartered subsidiaryof the company. CSPL provides services and solutions to diverse industries such asaerospace medical telecommunications utilities and rail transportation. CSPL has closeto 50 engineers supporting its customers from the engineering centre in Singapore. CSPLspecializes in development of aero engine repair engineering solutions to global airlinesengine centers and repair business units. The focus is on Total Maintenance costreductions through distress mapping shop floor troubleshooting scrap reviews etc aroundFleet Management Programs. CSPL has a strong customer base in the region and this entitybecomes very important for the future growth in the region.
Cyient Engineering (Beijing) Limited (CEBL)
The company established a subsidiary in Beijing in 2017. During the year the processof winding up this entity was commenced.
Cyient Israel India Limited (CIIL)
Over the past two years Cyient has continued to grow its design-led manufacturingbusiness with a number of leading defense OEMs in Israel. CIIL provides the company withlocal business development and consulting capabilities that have helped Cyient win newcustomers as well as expand into new business segments and services.
Cyient DLM Private Limited (CDLMPL)
CDLMPL is a leading player in the design development and manufacturing of electronicassemblies at Mysore and Hyderabad and mechanical assemblies at Bangalore India. Ourunwavering focus on quality cost and value engineering are critical success factors toaccelerate growth. We started our new electronic manufacturing facility at GMR Aerospaceand Industrial SEZ in Hyderabad.
The Secretarial Audit Report of CDLMPL as required under Regulation 24A of SEBI (LODR)Regulations 2015 is provided as a separate annexure forming part of this report. Furtherthe annual report is being sent to the members excluding the aforesaid annexure. The sameis available for inspection and any member interested in obtaining a copy of the same maywrite to the company secretary.
Cyient Insights Private Limited (CIPL)
In October 2014 Cyient acquired a majority stake in Invati Insights Private LimitedHyderabad India. The Company was subsequently renamed Cyient Insights Private Limited.
Cyient Insights enables its customers to derive end to end business excellence andderive quantifiable business results through gamut of machine learning and deep learningcapabilities and associated actionable insights. Cyient Insights stands apart from itspeers with its capability to acquire manage and analyse vast amount of data generated bysensors embedded in machines and devices and the unmatched commitment to add value tocustomers with the proven global delivery model. Cyient Insights brings in domainspecialists through Cyient's decades of work with verticals such as Aerospace &Defence Heavy Engineering Transportation Medical Telecommunications Utilities andEnergy & Natural Resources and marries it to its data science capability to executeprojects.
Cyient Solutions and Systems Private Limited (CSSPL)
CSS is a partnership between the company and BlueBird Aero Systems Israel has focusedon opportunities in the Indian Defence Sector over the past two years. CSS offers a rangeof world-class Unmanned Aerial Systems and has developed new technology to address theunique needs of the country's defence and paramilitary forces. The company has deliveredsystems for high- altitude aerial surveillance operations and has continued to invest inindigenous manufacturing capabilities and after market support services.
Cyient Urban Micro Skill Centre Foundation (CUMSCF)
CUMSCF is a flagship project of the company's CSR activity. CUMSCF is a companyregistered under section 8 of the Companies Act 2013.
CUMSCF is an innovative and direct response to poverty alleviation. It focuses onbuilding livelihood opportunities that are aligned with community needs and built uponcommunity strengths. CUMSC facilitates skill development opportunities and providessupport to empower participants to be self-employable build entrepreneurship capacity oraccess to sustainable skilled employment
Infotech HAL Limited (IHL)
Infotech HAL Ltd (IHL) is a joint venture (50:50) between the company and HindustanAeronautics Limited (HAL).
It is based in Bangalore.
The company is committed to creating and delivering engineering services and solutionsthat exceed customer expectations and enhance the level of business profitability. Yourcompany's quality implementation efforts are all pervasive beginning with a stated goal.True to the image of a global player the company has developed a reputation for providingits clients with world-class quality; the clients trust the strength of quality processesthat have always assured them of timely defect-free deliverables.
True to our image as a global player we have developed a reputation for providing ourclients with world- class quality. Our clients trust the strength of quality processesthat have always assured them of timely defect-free deliverables. The quality managementsystem (QMS) is a testimony derived and optimized with experiences and best practices thatare aligned with the internationally renowned quality standards and models like ISO9001:2015 ISO 27001:2013 AS 9100 D ISO 13485:2016 ISO 22163: 2017 (IRIS) TL 9000 R6.0/R 5.5V ISO 14001:2015 ISO 45001-2015 and CMMI-DEV Version 2.0 Level 5. Cyient is the8th company in India and 12th company in the world to have been appraised at Level 5 onCMMI DEV 2.0 Version.
13. BUSINESS RESPONSIBILITY REPORT
In pursuance of Regulation 34 of the SEBI (LODR) Regulations 2015 the company ispublishing a Business Responsibility Statement. The same is enclosed as Annexure A'.
14. CORPORATE SOCIAL RESPONSIBILITY
Your company believes in giving back to society in some measure that is proportionateto its success in business. Corporate Social Responsibility (CSR) aims at balancing theneeds of all stakeholders. The company's CSR initiative goes beyond charity and believesthat as a responsible company it should take into account its impact on society as much ascreating business impact. The CSR initiatives are conducted through Cyient Foundation. Anelaborate report on CSR is published elsewhere in this annual report. The CSR AnnualReport is enclosed as Annexure B'.
15. BOARD OF DIRECTORS AND KEY MANAGERIAL PERSONNEL
None of the directors of the company is disqualified under the provisions of theCompanies Act 2013 ('Act') or under the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015. All Independent Directors have provided confirmations ascontemplated under section 149(7) of the Act.
In accordance with the provisions of the Act and Articles of Association of thecompany Mr. Krishna Bodanapu retires by rotation and being eligible offers himself forre-appointment.
On the recommendations of the Leadership Nomination and Remuneration Committee theBoard appointed Ms. Matangi Gowrishankar and Mr. Vivek Gour as Independent Directors ofthe Company with effect from 25 April 2019.
Mr. B.V.R.Mohan Reddy and Mr. Krishna Bodanapu were reappointed as Executive Chairmanand Managing Director & CEO of the Company respectively w.e.f 25 April 2019 on theterms and conditions as recommended by the Leadership Nomination and RemunerationCommittee and by the Board of Directors of the Company. The appointments were approved bythe shareholders in the 28th Annual General Meeting. Upon expiry of the term ofMr. B.V.R. Mohan Reddy was re-appointed as Executive Chairman with effect from 1 April2020 without any remuneration. more details of the same are published in the Notice of the29th AGM.
Pursuant to the provisions of regulation 36 of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 and Secretarial Standard 2 on General Meetingsissued by ICSI brief particulars of the directors proposed to be appointed / re-appointedare provided as an annexure to the notice convening the AGM.
Mr. K. Ramachandran Mr. John Paterson and Ms. Andrea Bierce completed their respectiveterms as independent directors and vacated office at the conclusion of the 28thAGM. The board thanks the directors for their contribution during their tenure.
Key Managerial Personnel
Mr. B.V.R. Mohan Reddy Executive Chairman; Mr. Krishna Bodanapu Managing Director& CEO; Mr. Ajay Aggarwal CFO and Dr. Sudheendhra Putty Company Secretary are KeyManagerial Personnel of the Company in accordance with the provisions of Section(s) 2(51)and 203 ofthe Companies Act 2013 read with the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014. There has been no change in the Key ManagerialPersonnel during the financial year.
16. POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION AND OTHER DETAILS
The Company's policy on directors' appointment and remuneration and other mattersprovided in section 178(3) of the Act have been disclosed in the corporate governancereport which forms part of the directors' report.
17. NUMBER OF BOARD MEETINGS DURING THE YEAR
During the year six meetings of the board were held the details of which form part ofthe report on corporate governance.
18. BOARD EVALUATION AND ASSESSMENT
The company believes that formal evaluation of the board and of the individualdirectors on an annual basis is a potentially effective way to respond to the demand forgreater board accountability and effectiveness. For the company evaluations provide anongoing means for directors to assess their individual and collective performance andeffectiveness. In addition to greater board accountability evaluation of board membershelps in:
More effective board processes
Better collaboration and communication
Greater clarity with regard to members' roles and responsibilities and
Improved Chairman - Managing Director - Board relations
By focusing on the board as a team and on its overall performance the company ensuresthat communication and overall level of participation and engagement improves.
In order to facilitate the same the board undertook a formal board assessment andevaluation process during 2019-20. The board evaluation was performed after seeking inputsfrom all the directors and included criteria such as the board composition and structureeffectiveness of board processes information and functioning as provided by the GuidanceNote on Board Evaluation issued by the Securities and Exchange Board of India on 5 January2017 and the amendments brought in SEBI (LODR) Regulations in 2018. The LeadershipNomination & Remuneration Committee has overall stewardship for the process. Theevaluation process covers the following aspects:
Peer and self-evaluation of performance of directors
Evaluation of the performance and effectiveness of the board
Evaluation of the performance and effectiveness of Board Committees
Evaluation of the performance of the Executive Chairman and the ManagingDirector & CEO
Feedback on management support to the Board
The evaluation process elicits responses from the directors in a judicious manner -ranging from composition and induction of the board to effectiveness and governance. Italso sought feedback on board and committee charters strategy risk management andquality of discussion and deliberations at the board. The evaluation process also ensuresthe fulfilment of independence criteria as specified in the applicable regulations andthat the latter are independent of the management. The independent directors concerned donot participate in the evaluation process.
19. AUDIT COMMITTEE
The Company has in place an Audit Committee in terms of the requirements of theCompanies Act 2013 read with the rules made thereunder and Regulation 18 of the SEBI(Listing Obligations & Disclosure Requirements) Regulations 2015. The detailsrelating to the same are given in the Report on Corporate Governance forming part of thisBoard Report.
20. ADEQUACY OF INTERNAL FINANCIAL CONTROLS
Internal Financial Controls are part of risk management process addressing financialand financial reporting risks. They ensure the orderly and efficient conduct of businessincluding adherence to Company policies safeguarding of its assets prevention anddetection of fraud error reporting mechanisms accuracy and completeness of theaccounting records. They aid in the timely preparation of financial statements. TheInternal Financial Controls have been documented digitised and embedded in the businessprocess.
A) Statutory Auditors
At the 28th AGM held on 6 June 2019 the members approved the appointment ofS.R. Batliboi & Associates LLP Chartered Accountants (Firm Registration No.101049W/E-300004) as Statutory Auditors of the company to hold office for a period of fiveyears from the conclusion of that AGM till the conclusion of the 33rd AGMsubject to ratification of their appointment by Members at every AGM if so required underthe Act. The requirement to place the matter relating to appointment of auditors forratification by Members at every AGM has been done away by the Companies (Amendment) Act2017 with effect from May 7 2018. Accordingly no resolution is being proposed forratification of appointment of statutory auditors at the ensuing AGM and a note in respectof same has been included in the Notice for this AGM.
B) Secretarial Auditors
The Board has appointed Mr. S. Chidambaram as Secretarial Auditors for the financialyear ended 31 March 2020. The Secretarial Audit Report for the financial year ended 31March 2020 is annexed as Annexure C to this report.
22. AUDITORS' REPORT AND SECRETARIAL AUDITORS' REPORT
The statutory auditors' report and secretarial auditors' report do not contain anyqualifications reservations or adverse remarks.
During the year the statutory auditors and secretarial auditor have not reported anyinstances of frauds committed in the Company by its Officers or Employees to the AuditCommittee under section 143(12) of the Companies Act.
23. VIGIL MECHANISM
The Company has put in place a Whistle Blower Policy and has established the necessaryvigil mechanism as defined under Regulation 22 of SEBI (Listing Obligations and DisclosureRequirements) 2015 for employees and others to report concerns about unethical behaviour.
It also provides for adequate safeguards against the victimisation of employees whoavail of mechanism. No person has been denied access to the Chairman of the auditcommittee. The Whistle blower Policy is available on the website of the company i.e. (http://www.cyient.com/investors/corporate-governance). The company implemented a web based/onlinemechanism under the whistle blower policy. This mechanism encompasses the entire trailfrom the login of a complaint to its eventual redressal. The system also affords a dial-infacility to associates in various languages across the countries where the company hasitsoperations.
24. EMPLOYEE STOCK OPTION PLANS
During the year the company had granted options under two ESOP schemes to theassociates of the company and its subsidiaries in accordance with the Securities andExchange Board of India (Share Based Employee Benefits) Regulations 2014. Disclosurepursuant to the said regulations is enclosed as Annexure 'D'.
25. CONSERVATION OF ENERGY RESEARCH AND DEVELOPMENT TECHNOLOGY ABSORPTION FOREIGNEXCHANGE EARNINGS AND OUTGO
The particulars relating to conservation of energy research and developmenttechnology absorption foreign exchange earnings and outgo as required to be disclosedunder the Act are provided in Annexure 'E' to the report.
26. MANAGEMENT DISCUSSION & ANALYSIS
Pursuant to the provisions of Regulation 34 read with Schedule V of the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 a report on ManagementDiscussion & Analysis is enclosed as Annexure 'F'.
27. DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to Section 134 of the Companies Act 2013 the board of directors to the bestof their knowledge and ability confirm that:
a) in the preparation of the annual accounts the applicable accounting standards havebeen followed and there 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 profitof 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 the 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 andsuch internal financial controls are adequate and operating effectively;
f) they have devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively.
28. PARTICULARS OF LOANS GUARANTEES AND INVESTMENTS
Particulars of loans given investments made guarantees given and securities providedalong with the purpose for which the loan guarantee or security is proposed to beutilised by the recipient are provided in the Standalone Financial Statement. (Refer NoteNo. 56 and 21 to the Standalone Financial Statement).
29. RELATED PARTY TRANSACTIONS
The company has complied with the provisions of section 188(1) of the Act dealing withrelated party transactions. Information on transactions with related parties pursuant tosection 134(3)(h) of the Act read with Rule 8(2) of the Companies (Accounts) Rules 2014are given in Form AOC-2 and is enclosed as Annexure 'G'.
30. EXTRACT OF ANNUAL RETURN (MGT 9)
The extract of the annual return in Form MGT 9 as required under the provisions ofsection 92 of the Act is enclosed as Annexure 'H'.
The extract of the annual return of the company is also uploaded on the company'swebsite at (www.cyient. com/investors).
31. PARTICULARS OF EMPLOYEES
The information required under Section 197 of the Act read with Rule 5(1) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 are givenbelow:
a) The ratio of the remuneration of each director to the median remuneration of theemployees of the Company for the financial year:
|Executive Directors ||Ratio to median remuneration |
|B.V.R. Mohan Reddy ||88.62 |
|Krishna Bodanapu ||122.59 |
|Independent Directors || |
|M.M. Murugappan || |
|(Non-Executive and || |
|Non - Independent) ||2.22 |
|Som Mittal ||2.22 |
|Vivek Gour ||2.22 |
|Matangi Gowrishankar ||2.22 |
|Vinai Thummalapally ||5.20 |
|Vikas Sehgal ||5.20 |
b) The percentage increase in remuneration of each director chief executive officerchief financial officer company secretary in the financial year:
|Directors Chief Executive Officer Chief Financial Officer and Company Secretary ||% increase in remuneration in the financial year |
|B.V.R. Mohan Reddy ||-26.0% |
|Krishna Bodanapu ||-20.0% |
|Ajay Aggarwal ||-1.0% |
|Sudheendhra Putty ||12.0% |
c) The percentage increase in the median remuneration of employees in the financialyear: 6.9%.
d) The number of permanent employees on the rolls of Company: 10439.
e) Average percentile increase already made in the salaries of employees other than themanagerial personnel in the last financial year and its comparison with the percentileincrease in the managerial remuneration and justification thereof and point out if thereare any exceptional circumstances for increase in the managerial remuneration:
The average annual increase was around 7.7% and the average annual increase managerialpersonnel 6.0%
f) Affirmation that the remuneration is as per the remuneration policy of the Company:
The Company affirms remuneration is as per the remuneration policy of the Company.
g) The statement containing names of top ten employees in terms of remuneration drawnand the particulars of employees as required under Section 197(12) of the Act read withRule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014 is provided in a separate annexure forming part of this report. Further thereport and the accounts are being sent to the Members excluding the aforesaid annexure. Interms of Section 136 of the Act the said annexure is open for inspection and any memberinterested in obtaining a copy of the same may write to the Company Secretary.
32. PARTICULARS RELATING TO THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTIONPROHIBITION AND REDRESSAL) ACT 2013 (POSH)
Your company is committed to ensuring a safe and harassment free workplace for everyindividual working in its premises. This commitment is evidenced through various policiesand practices to ensure individual and company accountability. The company alwaysendeavours to create and provide an environment that is free from discrimination andharassment including sexual harassment. Your company has been actively involved inensuring that the associates are aware of the provisions of the POSH Act and rightsthereunder.
The company has in place an Anti-Sexual Harassment Policy in line with the requirementsof the POSH Act. Internal Complaints Committee has been set up to redress complaintsreceived regarding sexual harassment. All associates of the company are covered under thispolicy.
During the year the company conducted awareness campaigns at all locations in India.
a) Held awareness sessions on a quarterly basis at all locations in India throughspecific connect sessions by in-house women leaders and 'floor connect'.
b) Enhanced the Internal web portal - 'also ensured more online and digital learningthrough dcafe for associates.
c) Have made POSH MODULE as Mandatory in the digital induction.
d) Nominated the POSH panel (across India locations) to attend related sessions on POSHbeing conducted by various organizations such as IWN NHRD and CII for betterunderstanding of the Act and its requirements
e) Nominated associates to attend women safety sessions.
f) Devised plan of action for financial year 2020.
During the year two cases were registered and both the cases have been closed withinthe stipulated time limits and in accordance with the law. There are no pending complaintseither at the beginning or at end of the financial year.
33. RISK MANAGEMENT
The company pursues a comprehensive risk management programme as an essential elementof sound corporate governance and is committed to continuously embedding risk managementin its daily culture. This process is followed in five steps:
a) Identify risks and opportunities
b) assess risk and performance for key processes
c) evaluate the risk impact across business operations
d) develop mitigation plan for the risks identified and
e) monitor the risks at regular intervals and report to the Risk Management Committee
The company has classified the risks into five categories: 1) Strategic 2) Reputational3) Operational 4) Financial 5) Compliance/Litigation. Each identified risk is assessedaccording to its probability and impact on the company.
The Board of Directors has formed an internal risk management committee to identifyevaluate mitigate and monitor the risk management in the company. The committee comprisescross-functional membership from the senior management of the company. The primaryobjectives of the Committee are to assist the Board in the following:
To provide an oversight for all categories of risk and promulgate risk culturein the organization
To adopt leading risk management practices in the industry and manage riskproactively at organizational level
Help to develop a culture of the enterprise that all levels of people understandrisks.
Provide input to management of risk appetite and tolerance and monitor theorganization's risk on an ongoing basis.
Approve and review risk management plan which includes company's risk managementstructure framework methodologies adopted guidelines and details of assurance andreview of the risk management process.
Monitor risks and risk management capabilities and mitigation plans.
More details on the risk management committee of the board can be found in the Reporton Corporate Governance. Members may also refer to the Management Discussion &Analysis Report.
34. CORPORATE GOVERNANCE
Your company will continue to uphold the true spirit of Corporate Governance andimplement the best governance practices. A report on Corporate Governance pursuant to theprovisions of Corporate Governance Code stipulated under SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 forms part of the Annual Report. Full detailsof the various board committees are also provided therein along with Auditors' Certificateregarding compliance of conditions of corporate governance is enclosed as Annexure 'I'.
35. DISCLOSURE REQUIREMENTS
Familiarization programme of the independent directorshttp://www.cyient.com/investors/corporate- governance
Policy for determining material subsidiaries of the Companyhttp://www.cyient.com/investors/corporate- governance
Policy on dealing with related party transactions http://www.cyient.com/investors/corporate- governance
Prevention of sexual harassment policy http://www . cyient.com/investors/corporate-governance
Environment health and safety policy http://www.cyient . com/investors/corporate-governance
Dividend Payment policy http://www.cyient.com/ investors/corporate- governance
Criteria of Payment of Remuneration to Non-Executive Directors of the Companyhttp://www.cyient.com/ investors/corporate- governance
There are no orders passed by the regulators or courts or tribunals impacting the goingconcern status and Company's operations in future.
36. CEO's DECLARATION
Pursuant to the provisions of Regulation 17 of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 a declaration by the Managing Director &CEO of the company declaring that all the members of the board and the senior managementpersonnel of the company have affirmed compliance with the Code of Conduct of the companyis enclosed as Annexure 'K'.
The CEO/CFO certification to the board pursuant to Regulation 15 of the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 is enclosed Annexure J'.
37. GREEN INITIATIVES
As a part of conservation of natural resources and green initiatives Electronic copiesof the Annual Report 201920 and the Notice of 29th AGM are sent to all eligiblemembers whose mail addresses are registered with the Company / depository participant(s).Physical copies of the Annual Reports will sent to the members who have not registeredtheir email addresses. We encourage our members to register their email address and takepart in green initiative.
The board of directors' expresses their thanks to the company's customersshareholders vendors and bankers for their support to the company during the year. Wealso express our sincere appreciation to the contribution made by employees at all levels.Our consistent growth was made possible by their hardwork cooperation and support.
Your directors would like to make a special mention of the support extended by thevarious Departments of the Central and State Governments particularly the SoftwareTechnology Parks of India Development Commissioners-SEZ Department of Communication andInformation Technology the Direct and Indirect tax authorities the Ministry of Commercethe Reserve Bank of India Ministry of Corporate Affairs/Registrar of CompaniesSecurities and Exchange Board of India the Stock Exchanges and others and look forward totheir support in all future endeavours.
| ||For and on behalf of the Board |
| ||B.V.R. Mohan Reddy |
|Place: Hyderabad ||Executive Chairman |
|Date: 7 May 2020 ||(DIN-00058215) |