Your Directors are pleased to present their Report on the business and operations ofyour Company along with the
Audited Financial Statements (Standalone and Consolidated) for the nancial year endedMarch 31 2018.
(R in million* except per share data)
| ||Standalone || |
| ||2017-18 ||2016-17 ||2017-18 ||2016-17 |
|Operating Income ||16699 ||15975 ||38494 ||37110 |
|Other Income ||400 ||273 ||363 ||228 |
|Total Income ||17100 ||16248 ||38857 ||37338 |
|Operating Expenses ||14588 ||13749 ||34433 ||32930 |
|Depreciation and Amortization ||747 ||783 ||1413 ||1432 |
|Financial Expenses ||95 ||156 ||347 ||429 |
|Pro t Before Tax and Exceptional items ||1669 ||1560 ||2664 ||2547 |
|Exceptional item ||- ||- ||120 ||- |
|Pro t Before Tax ||1669 ||1560 ||2544 ||2547 |
|Provision for tax (incl. deferred tax) ||248 ||545 ||623 ||755 |
|Pro t After Tax ||1422 ||1015 ||1921 ||1792 |
|Less: Non-controlling Interest || ||- ||(15) ||(3) |
|Add: Balance brought forward from Previous year ||4551 ||3724 ||5063 ||3486 |
|Pro t Available for Appropriation ||5972 ||4739 ||6999 ||5281 |
|Less: Adjustments and Appropriation || || || || |
|- Dividend ||208 ||182 ||208 ||182 |
|- Dividend Tax ||- ||6 ||42 ||36 |
|Balance Carried Forward ||5764 ||4551 ||6749 ||5063 |
|Earnings per share (R) || || || || |
|- Basic ||68.42 ||48.96 ||93.18 ||86.58 |
|- Diluted ||68.24 ||48.88 ||92.94 ||86.44 |
*(1 million = R 10 lakhs)
The Standalone and Consolidated Financial Statements for the year ended March 31 2018have been prepared in accordance with the Companies (Indian Accounting Standards) Rules2015 (IndAS) and Companies (Indian Accounting Standards) Amendment Rules 2016 prescribedunder Section 133 of the Companies Act 2013 and other recognized accounting practices andpolicies to the extent applicable.
On a Consolidated basis your Company registered a satisfactory performance during thenancial year ended March 31 2018. Compared to the previous nancial year the OperatingIncome increased by 3.7% from R37110 million to R 38494 million. Whilethere was strong growth in various verticals especially the healthcare vertical thestrengthening of the Indian Rupee vis-a-vis the US
Dollars softened revenue growth in rupee terms.
EBITDA (Earnings Before Interest Taxes Depreciation and Amortization) declined by8.2% from R4424 million to R4061 million due to drop in pro tability ofthe UK business pressure on margins of the India domestic CRM business on account of dropin volumes from telecom clients increase in manpower cost due to provision made for steepincrease in minimum wages in the state of Karnataka and increase in other operatingexpenses.
EBITDA for FY2018 has been computed on the same basis as used for computing EBITDA forFY2017 (i.e. excluding gains and losses on account of uctuations in foreign exchangecurrencies). PAT (Pro t after Tax) increased from R1792 million to R1921million a growth of 7.2% due to increase in other income (on account of interest on taxrefunds received) lower depreciation lower interest costs on account debt reduction andoverall lower tax costs. The PAT of R1921 million was achieved after factoring anexceptional item charge of R120 million on account of impairment of goodwill inrespect of the UK Business.
On a Standalone basis Operating Income was R16699 million for the nancial yearended March 31 2018 compared to R15975 million in the previous nancial year anincrease of 4.5%. EBITDA decreased by 12.3% from R2407 million to R2111million. PAT increased by 40% from R1015 million to R1422 million.
A review of the Financial and Operational Performance of the Company and its keysubsidiaries has been given in the Management Discussion and Analysis' section whichforms part of this Report as Annexure E'.
Other nancial highlights:
Cash ow from operations and after working capital changes: R3415 million ascompared to R4092 million in FY2017 a decrease of 19.8%;
CAPEX: R1214 million as compared to R1806 million in FY2017 a decreaseof 33%;
Gross Debt of R5854 million as at March 31 2018 as compared to R6616million as at March 31 2017 i.e. a reduction of R762 million (12%) during theyear;
Net Worth: R14823 million as at March 31 2018 as compared to R13368million as at March 31 2017 an increase of 11%.
Revenue by Geography US: 68%; Canada: 10%; UK & Europe: 7% and India: 15%
Revenue by Vertical Healthcare: 49.2%; Telecom and Technology: 19.9%; Consumer: 12.9%;Banking and Financial Services: 8.0% and Others: 10.0%
Client Wins: 29 new clients across BPM and HRO.
Active Clients: 190 core BPM clients and 636 Payroll processing HRO and F&Aclients.
Delivery Centres: 70 global delivery centres across seven countries at the end of theyear FY2018. During the year six new centres were opened.
Employee Headcount: 44265 as on March 31 2018; India: 62% (India offshore: 20% andIndia Domestic: 42%) Philippines: 19% USA: 10% Canada: 6% and Europe: 3%.
Your Directors are pleased to recommend a Final Dividend of R2.50 per equityshare (25% on face value of R10/- each) for the year ended March 31 2018 subjectto your approval. This is in addition to the three Interim
Dividends aggregating to R7.50 per equity share of R10 each for thenancial year 2017-18 declared by the Board of Directors on August 11 2017 November 82017 and
February 8 2018 respectively and have been duly paid. The total dividend for thenancial year ended March 31 2018 would be R10 per equity share (100% on face valueof R10/- each) if approved by the Members.
The world is witnessing rapid changes led by consumer preferences disruptivetechnologies and competitive forces and concerns over data privacy. Businesses areconstantly looking for solutions to enhance customer experience increase sales addcustomers and reduce costs. To meet the changing needs of businesses
Business Process Management (BPM) players are combining analytics automation anddigital technologies to offer new business models and alternate delivery channels.
The Global BPM spend continues to be moderate growing by 3.4% in 2017 to touch USD189billion. The share of India continues to grow and is estimated at 15% of the global spendin 2017. As per NASSCOM the growth of the Indian BPM industry remains steady reaching anestimated USD 32.5 billion in revenue for FY2018 a 7.9% increase on year-on-year basis.Exports accounted for USD 28.4 billion while the domestic market revenue stood at USD 4.1billion.
Philippines BPM business continues to grow and is estimated to have reached USD 23billion in 2017 and was the highest job generator in the year in Philippines.
Detailed information pertaining/relating to Business Review has been provided in theManagement Discussion and Analysis' section which forms part of this Report as AnnexureE'.
HGS International Mauritius a wholly-owned subsidiary of your Company isprimarily engaged in investment activity. HGS International owns 100% of the share capitalof Hinduja Global Solutions Inc. USA C-Cubed N.V. Curacao Hinduja Global SolutionsEurope Ltd. UK HGS St. Lucia Ltd. Saint Lucia and Hinduja Global Solutions MENA FZ-LLC Dubai. HGS International owns 100% of HGS Axis Point Health LLC jointly with HGS UKLimited. HGS International owns 95.2% of the common shares of HGS Colibrium Inc. with oneof the founders of Colibrium owning the balance share capital. HGS International owns 76%of Hinduja Global Solutions UK Ltd while the balance is held by Hinduja Global SolutionsEurope Ltd. UK. Revenue for FY2018 was USD 4.5 million as against USD 3.4 million forFY2017.
Hinduja Global Solutions Inc. USA (HGS Inc.) a wholly-owned subsidiary of HGSInternational Mauritius specializes in marketing and provision of both voice andnon-voice related Customer Contact and Business
Process Outsourcing services to its clientele. Its key subsidiaries are HGS (USA) LLCHGS Canada Inc. HGS EBOS LLC and HGS Healthcare LLC. The Consolidated Revenue was USD431.8 million for FY2018 as compared to USD 398.8 million in FY2017. HGS (USA) LLCa wholly-owned subsidiary of HGS Inc. USA operates in three cities in the US. Itpartners with Fortune 1000 companies and Government agencies to provide comprehensiveCustomer Relationship Management programs in the verticals of consumer goods and servicese-commerce telecom and media. HGS (USA) LLC also sub contracts work to HGS entities inIndia Philippines and Jamaica. For FY2018 it recorded total revenue of USD 86.7 millionas against total revenue of USD 313.9 million in FY2017. Until March 31 2017 HGS (USA)LLC had clients in healthcare as well as other sectors. Effective April 1 2017 thehealthcare business was transferred to its wholly-owned subsidiary - HGS Healthcare LLCand hence all revenues and costs of healthcare clients are accounted for by HGSHealthcare. In view of this there is a drop in revenues of HGS (USA) LLC as compared toFY2017.
HGS Healthcare LLC is a wholly-owned subsidiary of HGS (USA) LLC and rendersbusiness process management services to healthcare clients primarily in the Payersegment. HGS Healthcare renders services from three cities in the US as well as subcontracts work to HGS entities in India Philippines and Jamaica. For FY2018 it recordedtotal revenues of USD 251.9 million.
HGS Canada Inc. a wholly-owned step-down subsidiary of HGS Inc. USA is aCanadian contact center service provider servicing marquee customers across verticals suchas Media Telecom Technology and Banking and Financial Services. HGS Canada offerstechnical support inbound and outbound sales customer care and customer retention inEnglish and French languages and has a team size of 2709 associates at 10 centers inCanada. For FY2018 it recorded revenue of CAD 77.2 million a slight increase compared torevenue of FY2017.
Hinduja Global Solutions Europe Ltd. is the UK-based subsidiary focusing onproviding consulting services for BPM call center services and offshoring services to
UK-based clients. It owns 24% stake in Hinduja Global Solutions UK Ltd. and 100% stakein HGS France SARL France. HGS Italy SRL its erstwhile wholly-owned subsidiary wasliquidated during FY2018 since inoperative.
For FY2018 it recorded standalone revenue of GBP 1.6 million as compared to GBP 1.3million in FY2017.
Hinduja Global Solutions UK Ltd. is a leading contact center company with 1214employees in London Preston and Selkirk (Scotland). It offers a range of services forinbound and outbound interactions to marquee customers across verticals such asGovernment FMCG Financial
Services Automobiles and Retail. Its inoperative branch in Rotterdam (Netherlands) waswound up in FY2018 while the other inoperative branch in Hamburg (Germany) is in theprocess of being wound up.
For FY2018 it reported revenue of GBP 33.1 million as compared to GBP 36.3 million inFY2017.
HGS St. Lucia Ltd. Saint Lucia is the holding company of Team HGS Ltd. Jamaica. TeamHGS Ltd Jamaica began call center operations in FY2013 at Kingston Jamaica andcontinues to show strong performance. Revenue for FY2018 was Jamaican Dollars 3586.7million compared to Jamaican Dollars 2386.2 million in FY2017.
Hinduja Global Solutions MENA FZ-LLC (previously known as HGS MENA FZ-LLC) has amarketing of ce in Dubai Internet City with the objective to build sales pipeline. InFY2018 it recorded revenues of AED 2.0 million as compared to AED 7.1 million in FY2017.As reported last year HGS Extensya Cayman Limited Extensya Investment Holdings Limitedand HGS Extensya Holdings Limited which were its wholly- owned subsidiaries were closedand struck-off from the Registrar of Companies on July 1 2017.
HGS Colibrium Inc. USA: Revenue for FY2018 was
USD 4.9 million as compared to USD 12.2 million for FY2017.
HGS International Services Private Limited India
(HGSISPL): HGSISPL a wholly-owned subsidiary of the Company recorded revenue of R4019.3million in
FY2018 as compared to R3649.3 million in FY2017 a growth of 10.1%. The SEZdivision of HGSISPL is presently operating in ve units viz. a) Global Village SEZBangalore; b) DLF Towers SEZ Hyderabad; c) Pritech I Park SEZ Bangalore; d) DLFCybercity SEZ Hyderabad; and e) Pritech II Park SEZ Bangalore.
Human Resource Outsourcing (HRO) business of HGSISPL services marquee customers inBanking
Financial Services Insurance and other industry verticals in India and abroad.
Pursuant to Section 129(3) of the Companies Act 2013 a statement containing thesalient features of nancial statements of the Company's subsidiaries in Form AOC -
1 is attached to the nancial statements of the Company. Further pursuant to Section136 of the Act the nancial statements of the Company consolidated financial statementsalong with relevant documents and separate accounts in respect of subsidiaries as may beapplicable are available on the website of the Company at www. teamhgs.com.
Scheme of Amalgamation of HGS International
Services Private Limited (HGSISPL) with the Company
During the year under review a Scheme of Amalgamation of HGSISPL (Transferor Company)a wholly owned subsidiary of the Company with the Company (Transferee Company) and theirrespective Shareholders ("the Scheme") pursuant to the provisions of Sections230 to 232 of the Companies Act 2013 ("the Act") and all other applicableprovisions of the Act if any was approved by the Board of Directors of your Company andthe Board of Directors of HGSISPL. The National Company Law
Tribunal Mumbai Bench ("NCLT") sanctioned the Scheme on June 20 2018. TheScheme became effective from August 1 2018 being the date on which the certi ed copy ofthe Order of the NCLT was led by both the Companies with the Registrar of CompaniesMumbai Maharashtra.
A copy of the Scheme and the NCLT Order are uploaded on the website of the Company atwww.teamhgs.com
The Appointed Date of the Scheme is April 1 2017. On the Effective Date i.e. on August1 2018 HGSISPL stands amalgamated with the Company and dissolved without winding up. Interms of the Scheme with effect from the
Appointed Date the entire business and whole of the undertaking of HGSISPL standstransferred to and vested in the Company on a going concern basis without any furtherdeed or act.
On the Effective Date the Authorized Share Capital of
HGSISPL stands consolidated with the Authorized Share
Capital of the Company pursuant to the approval of the Members of the Company receivedvia Postal Ballot process on June 7 2018 and pursuant to the provisions of the Scheme.The entire issued and paid up capital of HGSISPL since held by the Company standscancelled and since no shares are required to be allotted by the
Company to the Members of HGSISPL in terms of the
Scheme there is no increase in the issued and paid up equity share capital of theCompany.
Acquisitions through subsidiaries a) CMH Services Subsidiary LLC USA : Trade Name
- AxisPoint Health
In April 2018 your Company through its step down subsidiary HGS Population HealthLLC USA acquired 100% of CMH Services Subsidiary LLC
USA operating under the trade name of AxisPoint
Health a leading population health management company.
In July 2018 HGS Population Health LLC USA merged into CMH Services Subsidiary LLCUSA. Thereafter the name of CMH Services Subsidiary LLC USA was changed to HGS AxisPointHealth LLC. b) Element Solutions LLC USA
Your Company through its step down subsidiary
Hinduja Global Solutions UK Limited acquired 57% stake in Element Solutions LLC USAa digital consulting services company in April 2018. The
Indian operations of Element Solutions LLC USA are exclusively carried out byElements115 Computech
Private Limited from its of ces (delivery centers) located in Vishakhapatnam andChennai. As a part of the acquisition your Company acquired the assets of Elements115Computech Private Limited and employees of the said company based in India joined theCompany as new employees on closing of the transaction.
Particulars of Loans Guarantees and Investments
Loans Guarantees and Investments as per Section 186 of the Companies Act 2013 formpart of the Notes to the nancial statements provided in this Annual Report.
Communications and Public Relations
HGS is evolving its positioning in the market place to emphasize the unique ways theCompany creates value for its clients by putting the customer rst being excellent at thebasics leveraging its deep domain expertise and intelligently innovating to support itsclients' business process optimization and digital transformation. HGS helps consumers getthe right answer fast while delivering great customer experiences and operational efciencies that reduce costs. This messaging is resonating among its key stakeholdersthrough media such as Forbes.com Healthcare Call Center Times and Becker's HospitalReview. In an independent report by Apollo Research
(February 2018) measuring market share of voice in select media among the top 30 BPOcompetitors HGS ranked in the top 5 across North America and the UK on key topicsrelevant to its industry.
In India HGS continues to leverage media as a key channel to enhance visibility andthought leadership amongst key stakeholders including investors clients employees andgovernment. The annual Investor Meet has helped increase awareness and engagement withinvestors and communicate HGS' perspectives to the market. HGS has redesigned its websiteto make it more accessible and engaging for all site visitors. Our design team focused onmaking the web experience more uid device agnostic and more intuitive to the buyerjourney with quick access to key thought leadership case study and service line content.HGS also incorporated new messaging and robust content that offers transformative solutionalternatives for customers and prospects in all key business sectors. HGS also enhancedits digital and social media presence to engage its target audiences around the globe.
In FY2018 HGS has been recognized by industry analysts and third-party organizations.HGS won a record
14 awards including:
Leader: The Global Outsourcing 100 by the
International Association of Outsourcing Professionals
(IAOP) for the 8th consecutive year.
Stevie Awards for Customer Service Department of the Year and Business-to-BusinessServices Innovation.
Contact Center World's Best Outsourcing Partnership and Best Self-Service Technology.
Golden Bridge Award for Customer Service Team of the Year.
NASSCOM Customer Service Excellence Award 2017 in the Transformation Category.
Best in the Omnichannel Social CRM category at the APAC Customer Engagement Forum(ACEF)
HGS was also included in 14 industry analyst ratings and recognized with fourleadership positions:
NelsonHall's Digital Marketing NEAT and
MultiChannel CMS NEAT for Self-service Enablement
Focus and CX Improvement Focus.
HfS Blueprint for Healthcare Business Operations.
ISG's Provider Lens for Contact Center Customer
Experience for the buyer segments of Digital
Enthusiast and Automation Seeker.
HGS has leveraged these distinctions as credentials to reach industry in uencersanalysts advisers potential customers and potential employees.
HGS is working continuously to create an inclusive environment at the workplace. HGSleverages different communication tools and the company intranet to share information inan interactive and highly engaging way.
Corporate Social Responsibility (CSR)
Your Company is a socially-responsible corporate entity and has been involved in CSRactivities aimed at the upliftment of the economically and socially disadvantagedcommunities since many years. The prioritized areas of focus for CSR activities includeEducation Sustainable
Development and Healthcare amongst other activities.
Your Company is also making efforts to maximize employee participation in CSRactivities through the CSR
Volunteering Portal - Work to Give' launched during the year by the CSR Forum set up bythe Management. The
Volunteering Portal' covers CSR activities and volunteer details across alllocations in India.
During the year your Company was recognized at the ET
Now CSR Leadership Awards 2018 in two categories Community Development and Concern forHealth.
The Corporate Social Responsibility Committee ("CSR Committee") of theCompany consists of following Members:
Mr. Anil Harish (Independent Director) - Chairman Mr. Ramkrishan P. Hinduja(Non-Executive Non-Independent Director) Ms. Vinoo S. Hinduja (Non-ExecutiveNon-Independent Director) Mr. Rajendra P. Chitale (Independent Director) and Mr. RanganMohan (Independent Director).
During the Financial Year 2017-18 one Meeting of CSR
Committee was held on February 22 2018.
In terms of the CSR Policy the CSR Forum consisting of employees of the Companyidentify and evaluate CSR projects/ initiatives and recommend the same for theconsideration of the CSR Committee. The
CSR Committee reviews the recommended projects/ initiatives and the expenditure to beincurred as per the provisions of the Companies Act 2013 and the Rules made thereunder.After review the CSR Committee recommends such projects/ initiatives as it deems t to theBoard for its approval. The Board reviews and approves the CSR Projects/ initiativesrecommended by the CSR
Committee. The CSR Forum also monitors the progress of the approved CSR Projects andprovides periodical status updates to the CSR Committee and thereafter to the Board.
The Report on CSR activities in the format as required under Companies (CorporateSocial Responsibility) Rules 2014 is set out in Annexure G' forming part ofthis Report. The CSR Policy is available on the website of the Company at www.teamhgs.com
Directors' Responsibility Statement
Pursuant to Section 134(5) of the Companies Act 2013 the Directors based upon theinformation and documents made available to them and to the best of their knowledge conrm that:
In preparation of the Annual Accounts for the nancial year ended March 31 2018 theapplicable accounting standards have been followed and there have been no materialdepartures in the adoption and application thereof;
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 nancial year and of the Pro t of the Company for that period;
They have taken proper and suf cient care for the maintenance of adequate accountingrecords in accordance with the provisions of the Companies Act 2013 for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;
They have prepared the Annual Accounts on a going concern basis;
They have laid down adequate internal nancial controls to be followed by the Companyand they are operating effectively;
They have devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems are adequate and are operating effectively.
The Company has in place internal nancial controls framework which inter alia consistof Function wise Status of Testing (Risk and Control Matrix Test of Design Test ofOperating Effectiveness) Summary of Controls (Key and Non-Key) Process level controls(Process/ Function wise) IT General controls (Application wise and Process wise) andSummary of Gaps in Process Level Controls ad
IT General Controls etc. The controls in FY2017-18 have been increased to include GSTcontrols and change in payroll process. Such framework is periodically internally testedas well as reviewed and tested by the external consultant. Based upon the said frameworkand the compliance systems established and maintained by the Company work performed bythe statutory internal and secretarial auditors including audit of internal nancialcontrols over nancial reporting by the statutory auditors and the reviews performed byManagement the Board is of the opinion that the Company's internal nancial controls wereadequate and effective during FY2017-18.
Number of Meetings of the Board
Seven meetings of the Board were held during the year.
The time gap between any two meetings did not exceed one hundred and twenty days.Further details in this regard are given in the Corporate Governance Report which formspart of this Report as Annexure C'. Declaration by Independent Directors
Pursuant to the Companies (Amendment) Act 2017 the de nition of IndependentDirectors' has been widened and made more inclusive. As required under Section
149(7) of the Companies Act 2013 the Company has received the declaration (includingadditional declaration) from each of the Independent Directors of the Company con rmingthat they meet the criteria of independence laid down in Section 149(6) of the CompaniesAct 2013 and amendment thereto and in Regulation 16(1)(b) of the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 ["SEBI
Pursuant to Section 134 178 of the Companies Act 2013 and Regulation 17 of the SEBI(LODR) Regulations the Nomination and Remuneration Committee (NRC) and the Board ofDirectors carried out the performance evaluation during the Financial Year ended March 312018 of the Individual Directors (Independent Non-Independent Directors and theChairman) the Board as a whole and its Committees for the Financial Year 2017-18. Theevaluation was carried out through Rating Documents' which contain criteria/parameters on which the evaluation has been carried out.
The performance of the Individual Directors was inter alia evaluated on criteria suchas: Exercise of independent judgment offering constructive contribution to the Board'sdiscussions and deliberations based on his/ her expertise and domain knowledge;non-partisan appraisal of issues etc.
Evaluation of the performance of the Board as a whole and Committees was inter aliabased on the following criteria: structure of the Board/ Committees frequency regularityand discussions at the meetings of the Board/ Committees functioning of the Board/Committees mandate and composition of the Board/ Committees effectiveness of theCommittees contribution of the
Committees to the decisions of the Board etc.
At the separate meeting of Independent Directors held during the Financial Year endedMarch 31 2018 performance evaluation of Non-Independent Directors the Chairman of theCompany and the Board as a whole was carried out for the Financial Year 2017-18 on thebasis of aforementioned criteria. The Independent Directors also assessed the qualityquantity and timeliness of the flow of information between the Company's Management andthe Board.
The NRC the Board and the Independent Directors having regards to the "RatingDocuments" and the aforementioned criteria concluded that overall performance ofeach of the Directors including the Chairman of the Company is more than satisfactoryand there has been constructive contribution from each of the Directors and theycontribute a lot to the Board. The
Committees and the Board as a whole are performing well contribute to the well-beingof the Company and aimed at enhancing the performance of the Company.
The Management is proactive in providing detailed and requisite information on a timelybasis which enables fruitful discussions at the Meetings of the Committees and the Board.
Mr. Yashodhan Madhusudan Kale Director (DIN 00013782) is liable to retire by rotationat the ensuing Annual General Meeting and being eligible offers himself forre-appointment.
The Board has constituted an Audit Committee pursuant to the provisions of Section 177of the Companies Act
2013 and Regulation 18 of SEBI LODR Regulations.
The Committee comprises the following Members:
Mr. Anil Harish (Independent Director) - Chairman Mr. Ramkrishan P. Hinduja(Non-Executive Non-Independent Director) Mr. Rajendra P. Chitale (Independent Director)and Mr. Rangan Mohan (Independent Director).
Further details pertaining to the Audit Committee are included in the CorporateGovernance Report which forms part of this Report as Annexure C'.
Key Managerial Personnel
Pursuant to Section 203 of the Companies Act 2013 the
Company has recognized/ noted Mr. Partha DeSarkar (Manager and Chief Executive Ofcer); Mr. Srinivas
Palakodeti (Chief Financial Of cer) and Mr. Makarand D. Dewal (Company Secretary) asthe Key Managerial Personnel of the Company.
There was no change in the Key Managerial Personnel during the Financial Year 2017-18.
Manager and Chief Executive Of cer's Certi cation
The Manager and Chief Executive Of cer's declaration af rming compliance with the Codeof Conduct by the
Board and Senior Management is forming part of this Report as Annexure A'.
Conservation of Energy Technology Absorption and Foreign Exchange Earnings and Outgo
The prescribed particulars as required under Section134(3) (m) of the Companies Act2013 relating to Conservation of Energy Technology Absorption and Foreign ExchangeEarnings and Outgo are furnished as Annexure B' to this Report.
As required under Schedule V of the SEBI (LODR) Regulations a detailed report onCorporate Governance is furnished as Annexure C' to this Report.
The Statutory Auditors of the Company have examined the compliance of conditions ofCorporate Governance as stipulated in Schedule V (C) of the SEBI (LODR)
Regulations and have certi ed compliance thereof. The certi cate is attached as AnnexureD' to this Report.
Management Discussion and Analysis
A separate report on Management Discussion and Analysis is annexed as AnnexureE' to this Report.
The two ESOP Schemes viz. Hinduja Global Solutions Limited Employees Stock OptionsPlan 2008 and Hinduja
Global Solutions Limited Employees Stock Options Plan 2011 were in operation duringthe Financial Year 2017-
18. These ESOP Schemes are in compliance with the provisions of SEBI (Share BasedEmployee Bene ts) Regulations 2014. Particulars of aforesaid ESOP
Schemes are available on the Company's website https://www.teamhgs.com/investors/other-reports. There were no changes made to the aforesaid ESOPSchemes during the Financial Year 2017-18.
Extract of Annual Return
Pursuant to Section 134(3)(a) of the Companies Act 2013 an Extract of Annual Returnas on Financial Year ended March 31 2018 in the prescribed format is annexed as AnnexureF' to this Report.
Related Party Transactions
Transactions entered into/ with the related parties during the Financial Year 2017-18are in the ordinary course of business and at arm's length basis and therefore outsidethe purview of Section 188(1) of the Companies Act
2013. Information on related party transactions pursuant to Section 134(3)(h) of theCompanies Act 2013 read with Rule 8(2) of the Companies (Accounts) Rules 2014 is givenin Form AOC-2 as Annexure H' and the same forms part of this Report.
Material changes and commitments affecting the nancial position of the Company betweenthe end of the nancial year and date of the report
There were no material changes and commitments affecting the nancial position of theCompany between the end of the Financial Year and date of the Report.
Policy on Directors' Appointment and Remuneration
Policy on Directors' Appointment and Remuneration and other matters provided in Section178(3) of the Companies Act 2013 have been disclosed in the Corporate Governance Reportwhich forms part of this Report as Annexure C'.
Whistle Blower Policy
The Company has a Whistle Blower Policy and Vigil
Mechanism in place and is available on the Company's website at www.teamhgs.com. Thismatter is covered in the Corporate Governance Report which forms part of this Report as AnnexureC'.
Under the Whistle Blower Policy and Vigil Mechanism no complaints were received duringthe Financial Year
2017-18. One complaint was received after year ended March 31 2018. It wasinvestigated and action taken as deemed appropriate.
Constitution of Internal Complaints Committee under Sexual Harassment of Women atWorkplace
(Prevention Prohibition and Redressal) Act 2013
The Company has in place an Internal Complaints Committee under Sexual Harassment ofWomen at Workplace (Prevention Prohibition and Redressal) Act 2013 and thus hascomplied with the provisions of the said Act.
Risk Management Policy
Your Company has formulated Risk Management
Policy & Procedures which inter alia identifies risks taking into considerationthe business and operations of the Company and adoption of mitigation measures. The Policy& Procedures identify elements of risks which in the opinion of the Board may threatenthe existence of the Company. The details of the Policy &
Procedures are given in the Management Discussion and Analysis Report which forms partof this Report as Annexure E'.
The Risk Management Committee consisting of the
Chief Executive Officer Chief Financial Officer and
Executive Vice President - Legal Compliance and Risk Management periodically reviewthe Enterprise Risk Management Framework as well as the risks that matter and update onthe same is provided to the Members of the Audit Committee and the Board. The
Risk Management Committee met six times during the year to review and update theCompany's Enterprise Risk
Management Framework. The Company is not required to constitute a Risk ManagementCommittee consisting of Directors.
Fixed Deposits from Public
The Company has not accepted any xed deposits from the public and as such no amountof principal or interest was outstanding as on the Balance Sheet date.
At the 22nd Annual General Meeting (AGM) of the Company held on September 28 2017 M/sDeloitte
Haskins & Sells LLP Chartered Accountants (Firm Registration No. 117366W/W-100018)were appointed as the Statutory Auditors of the Company for a period of ve consecutiveyears i.e. from the conclusion of the
22nd AGM up to the conclusion of the 27th AGM of the
Company subject to the rati cation of their appointment by the Members at every AGMheld after the 22nd AGM.
Pursuant to the Companies (Amendment) Act 2017 noti ed on May 7 2018 rati cation ofappointment of
Auditors at every subsequent AGM after their appointment is not required. However theCompany has taken on record con rmation from the said Statutory Auditors con rming thatthey are eligible to continue to act as Statutory Auditors of your Company.
Pursuant to the provisions of Section 204 of the Companies Act 2013 the Board ofDirectors had appointed Ms. Rupal D. Jhaveri Practicing Company Secretary as theSecretarial Auditor to carry out the Secretarial Audit for the Financial Year 2017-18.
The Secretarial Audit Report in the prescribed format for the Financial Year 2017-18forms part of this Report as Annexure I'. The Report does not contain anyquali cations reservations or adverse remarks.
Maintenance of Cost Records and Appointment of
The Company is not required to maintain cost records pursuant to Section 148 of theCompanies Act 2013 and thus not required to appoint a Cost Auditor.
Disclosures as required under section 197(12) of the Companies Act 2013 read with Rule5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014and amendments thereto are given in Annexure J' to this Report. In terms ofthe provisions of Section 197(12) of the Companies Act 2013 read with Rules 5(2) and 5(3)of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 asamended a statement showing the names and other particulars of the employees drawingremuneration in excess of the limits set out in the said Rules are provided in the AnnualReport. Having regard to the rst proviso to Section 136(1) of the Companies Act 2013 theAnnual Report excluding the aforesaid information is being sent to the members of theCompany. The said information is available for inspection at the Registered Of ce of theCompany during working hours (i.e. 10:00 am to 6:00 pm) and any member interested inobtaining such information may write to the Company Secretary and the same will befurnished without any fee and free of cost.
In accordance with Rule 5 of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 details of foreign employees excluding directors and theirrelatives have not been included in the Annual Report.
Members interested in obtaining the said information may write to the Company Secretaryat the Registered Of ce of the Company and the requested information shall be furnished tosuch member.
Signi cant and Material Orders
There are no signi cant and material orders passed by the Regulators or Courts orTribunals that would impact the going concern status and your Company's operations in thefuture.
Internal Financial Controls
Internal Financial Controls (including Internal Controls over Financial Reporting) andtheir adequacy are included under the heading Internal Controls' in the ManagementDiscussion and Analysis section which forms part of this Report as Annexure E'.
Your Directors take this opportunity to thank the customers vendors collaboratorsbusiness partners investors nancial institutions bankers the Government of IndiaState Governments governments of various countries and regulatory authorities andagencies and the society at large for their co-operation and support.
Your Directors place on record their sincere appreciation to employees at all levels ofthe Company and its subsidiary companies for their hard work commitment and dedication.Their efforts and competence have enabled the Company to achieve its goals.
| ||For and on behalf of the Board of Directors |
|Place: Mumbai ||Ramkrishan P. Hinduja |
|Date : August 24 2018 ||Chairman |
| ||(DIN: 00278711) |