We are pleased to present your Company's Thirty First Annual Report together with theAudited Statement of Accounts for the year ended March 31 2020.
1. RESULTS OF OPERATIONS AND STATE OF AFFAIRS
- Financial Results
The Company has adopted the Indian Accounting Standards (Ind-AS) with effect from April1 2017 (transition date being April 1 2016) pursuant to the notification issued by theMinistry of Corporate Affairs dated February 16 2015 regarding the Companies (IndianAccounting Standards) Rules 2015.
The consolidated financial statements have been prepared in accordance with theCompanies (Indian Accounting Standards) Rules 2015 notified under section 133 of the Actand other relevant provisions of the Act. The accounting policies have been consistentlyapplied except where a newly issued accounting standard if initially adopted or arevision to an existing accounting standard requires a change in the accounting policyhitherto in use. The Management takes into cognisance all new as well as revisedaccounting standards on an ongoing basis.
The Company has nine subsidiary companies all of which are wholly-owned subsidiaries.The Company discloses standalone audited financial results on a quarterly and annualbasis consolidated un-audited financial results on a quarterly basis and consolidatedaudited financial results on an annual basis.
a) Consolidated Operations
Revenue from consolidated operations for the year was ' 520.83 crore as compared to '484.03 crore in the previous year an increase of 8%. As the Company continued its focuson strategic initiatives for new products focused sales market development and hiring ofsenior experienced personnel to help drive transformation the overall Operational Expensefor the year increased to ' 427.73 crore against ' 405.29 crore in the previous year. TheOperating Profit (EBITDA) was at ' 93.10 crore 18% of revenue against ' 78.74 crore 16%of revenue in the previous year. Profit after Tax for the year was at ' 88.99 crore 17%of revenue against' 74.54 crore and 15% of revenue in the previous year.
Consolidated financial results are as below:
| || || || || ||(Rs. In crore) |
|For the Year Ended March 31 ||2020 ||% of Revenue ||2019 ||% of Revenue ||Growth (%) |
|Revenue from Operations ||520.83 ||100 ||484.03 ||100 ||7.60 |
|Expenses a) Employee benefit expense ||322.29 ||61.88 ||313.53 ||64.77 ||2.79 |
|b) Operating and other expenses ||104.32 ||20.03 ||91.25 ||18.85 ||14.32 |
|c) Finance costs (Bank charges) ||1.12 ||0.22 ||0.51 ||0.11 ||119.61 |
|Total Expenses ||427.73 ||82.12 ||405.29 ||83.73 ||5.54 |
|Operating Profit (EBITDA) ||93.10 ||17.88 ||78.74 ||16.27 ||18.24 |
|Depreciation ||13.55 ||2.60 ||9.93 ||2.05 ||36.46 |
|Operating Profit after Interest and Depreciation ||79.55 ||15.27 ||68.81 ||14.22 ||15.61 |
|Other Income ||37.23 ||7.15 ||27.48 ||5.68 ||35.48 |
|Profit Before Tax ||116.78 ||22.42 ||96.29 ||19.89 ||21.28 |
|Taxation ||27.79 ||5.34 ||21.75 ||4.49 ||27.77 |
|Profit After Tax ||88.99 ||17.09 ||74.54 ||15.40 ||19.39 |
|OtherComprehensive Income ||(7.47) ||(1.43) ||0.26 ||0.05 ||(2973.08) |
|Total Comprehensive Income for the period ||81.52 ||15.65 ||74.8 ||15.45 ||8.98 |
b) Standalone Operations
Revenue from the standalone operations for the year was ' 432.27 crore against' 396.76crore in the previous year an increase of 9%. Total Operational Expense for the year was'363.15 crore against' 336.52 crore in the previous year an increase of 8%. OperatingProfit (EBITDA) for the year was at' 69.12 crore 16% of revenue against' 60.24 crore15% of revenue in the previous year. Profit after Tax for the year was at' 96.04 crore22% of revenue against' 75.63 crore 19% of revenue in the previous year.
Standalone financial results are as below:
| || || || || ||(Rs. In crore) |
|For the Year Ended March 31 ||2020 ||% of Revenue ||2019 ||% of Revenue ||Growth (%) |
|Revenue from Operations ||432.27 ||100 ||396.76 ||100 ||8.95 |
|Expenses a) Employee benefit expense ||258.00 ||59.68 ||246.95 ||62.24 ||4.47 |
|b) Operating and other expenses ||104.53 ||24.18 ||89.27 ||22.5 ||17.09 |
|c) Finance costs (Bank charges) ||0.62 ||0.14 ||0.30 ||0.08 ||106.67 |
|Total Expenses ||363.15 ||84.01 ||336.52 ||84.82 ||7.91 |
|Operating Profit (EBITDA) ||69.12 ||15.99 ||60.24 ||15.18 ||14.74 |
|Depreciation ||9.87 ||2.28 ||7.01 ||1.77 ||40.80 |
|Operating Profit after Interest and Depreciation ||59.25 ||13.71 ||53.23 ||13.42 ||11.31 |
|Other Income ||62.93 ||14.56 ||40.29 ||10.15 ||56.19 |
|Profit Before Tax ||122.18 ||28.26 ||93.52 ||23.57 ||30.65 |
|Taxation ||26.14 ||6.05 ||17.89 ||4.51 ||46.12 |
|Profit After Tax ||96.04 ||22.22 ||75.63 ||19.06 ||26.99 |
|OtherComprehensive Income ||(8.37) ||(1.94) ||(0.19) ||(0.05) ||4305.26 |
|Total Comprehensive Income for the period ||87.67 ||20.28 ||75.44 ||19.01 ||16.21 |
A detailed analysis on the Company's performance both consolidated and standalone isincluded in "Management's Discussion and Analysis" Report which forms part ofthe Annual Report.
2. COVID-19 and Your Company
Humanity is facing one of the greatest challenges in the modern history. COVID-19 virushas impacted every nation and every walk of life on this planet. Your Company is also upagainst this humongous challenge and is committed to protect its people and business.
During these trying times one always goes back to "Nucleus" values to drawstrength. Exercising collaboration and backed by empowerment some Nucleites formed a team(later called Nucleus Taskforce COVID-19) in late February itself. The Task Force decidedto undertake a comprehensive review and study the situation across the globe. It soonsurmised that something like a lockdown is imminent and it is just a matter of time thatit would be the onlywayto protect the nation from COVID-19.
The goal of the Task Force was clear- "Ensure Safety of Nucleites and Ensure 100%Business Continuity". Many initiatives were taken up by the team showcasing anexcellent display of empowerment by the management. The execution had to be right - No oneknew when and if the lockdown will ever take place. Extraordinary planning carefulconsiderations graded approach and extreme agility had to be in place to ensure that thegoal is met.
Key initiatives that were taken by the Task Force were:
Safe Workplace - Ensuring that Nucleus offices across the world are geared upfor social distancing and new hygiene requirements.
Availability of masks sanitizers and temperature measurement instruments
Frequent sanitization of office
Social distancing in cafeteria and meetings
Restrictions on domestic and international travel
Restrictions on visitors and new compliance process
Compliance with new rules and directions from the government
100% Business Continuity - Many innovative approaches ground up thinking andtireless work went in to make sure that every Nucleite is able to work seamlessly evenwhen the lock down happens.
Upgrade of network connectivity and VPN solution.
When one has to work in the virtual environment for a long time thenconsiderations changes. In line with this our people initiatives were also rolled outseamlessly in virtual environment such as New SOP for staying in touch with everyNucleite especial considerations for unwell associates.
Virtual NucClub (Social Club) and wellness sessions in virtual normal.
Stay Visa and Travel arrangement for folks who are away from home location.
Any measure without the participation and cooperation of every one of the Nucleiteswould have proven futile. Taskforce decided to take the route of frequent but actionableadvisories to ourfellow Nucleites.
We are glad to report that 100% of your Company's workforce has been working from homeafter the lockdown was put in place and your Company has been able to meet all thecommitted deliverables to the customers earning appreciattons by many customers. We areconstantly scanning the environment to catch changes and recognize new opportunittesearly.
Nucleites are aware of their social responsibilittes and have contributed significantlyto the PM-CARES fund. The long-drawn journey to the lockdown is only half way through - wehave a long way to go before we can all feel safe again. The world is never going to bethe same again. The Task Force is also now planning the scenario for "Back tooffice".
Although the situatton we are in is unprecedented and the future is uncertain howeverwe are gearing ourselves to be agile enough to respond to a fast unfolding situatton. TheCompany's policy to maintain sufficient liquidity and inittattves taken in costopttmizatton would help in navigattng any challenges ahead.
3. TRANSFER TO RESERVES
In order to augment resources for unforeseen future emergencies your Directors do notpropose to transfer any amount to reserves. Appropriatton to retained earnings for thefinancial year ended March 31 2020 as per financial statements given below:
| ||(Rs. In crore) |
|Retained Earnings ||Closing Balance as on March 31 2020 |
|Opening balance ||427.33 |
|Profit for the period ||96.04 |
|Dividend Paid ||(26.14) |
|Corporate Dividend tax ||( 3.05) |
|Remeasurement of the defined benefit plans net ||(0.92) |
|Closing balance ||493.26 |
4. SHARE CAPITAL
Issued and Paid-up Share Capital
The Paid-Up Share Capital of the Company as on March 31 2020 is 29040724 equityshares of ' 10 each similar to the paid up share capital as on March 31 2019.
Shares under Compulsory Dematerialization
The shares of the Company are under compulsory dematerialization ("Demat")category and are available for trading on both the depositories in India viz. NationalSecurities Depository Limited (NSDL) and Central Depository Services (India) Limited(CDSL). Of the entire paid up shares 28981021 shares (99.80%) are in dematerializedform as at March 31 2020. The International Securities Identification Number (ISIN)allotted to the Company's shares is INE096B01018.
Your Company is listed at National Stock Exchange of India Ltd. and BSE Ltd.
|Stock Exchange where Nucleus shares are listed ||Scrip Symbol /Code |
|National Stock Exchange of India Ltd. (NSE) w.e.f. December 19 2002 ||NUCLEUS |
|BSE Ltd. (BSE) w.e.f. November 61995 ||531209 |
6. LIQUIDITY AND CASH EQUIVALENTS
Your Company continues to retain its debt-free status and maintains sufficient cash andcash equivalents to meet future strategic initiatives. The Company has been conservativein its investment policy over the years maintaining a reasonably high level of cash andcash equivalents which enable the Company to completely eliminate short and medium-termliquidity risks and at the same time also help scale up operations at a short notice. Thegoal of cash management at Nucleus is to:
a. Use cash to provide sufficient working capital to manage business operations of theCompany to be able to add value to all our stakeholders and continuously enhance the same.
b. Maintain sufficient cash as reserves that will aid the Company in capturingmeaningful business opportunities including acquisitions.
c. Invest surplus funds in low-risk bank deposits debt schemes of mutual fundspreference shares and tax-free secured bonds of Public Sector Enterprises.
Cash and cash equivalent along with other bank balance and current investments at aconsolidated level of ' 332.19 crore constitute 59% of the shareholders' funds at theyear end against ' 259.00 crore 51% of the shareholders' funds at the close of theprevious year. In addition the Company holds tax- free bonds issued by public sectorenterprises at amortised cost of Rs.87.14 crore against' 87.38 crore in the previous yearlongterm fixed maturity plans of mutual funds at amortised cost of Rs.68.69 crore against'64.05 crore last year Preference shares of Rs.50.50 crore against Rs.56.94 crore lastyear mutual funds at FVTPL (fair value through profit and loss) of Rs.264.71 croreagainst Rs.207.36 crore in the previous year and Investment in equity shares of a listedcompany (at FVOCI) at Rs.3.71 crore against' 8.70 crore in the previous year.
The Board of Directors in their meeting held on 16th March 2020 had recommended paymentof interim dividend of Rs.9 per share (on equity share of par value of Rs.10 each).However soon thereafter due to the rapidity of the pandemic's spread of Covid 19 theCompany felt it imperative to prepare itself for the significantly changed long term whenall resources human financial services business infrastructural - needed to behusbanded to ensure that the very likely decline in the volume of business can beweathered till the world returned to its normal rhythm. The Board and Management being ofthe united belief that Company had to be ready for a difficult future resolved to saveto ensure a betterfuture.
The difficult times and the uncertain future casts a responsibility over the Companyand its Board to be mindful of the emerging impact of all those who are closely investedin the Company even if it means denying one segment of the stakeholders a transitorypecuniary advantage in exchange for a long-term lucrative relationship.
Post ascertaining the position in law and taking into account the need to conserveevery rupee in such extraordinary circumstances worldwide the Board unanimously resolvedin its meeting held on March 28 2020 that revocation of the Interim Dividend for FY2019-20 as declared at the Board meeting held on March 16 2020 is in the best long- terminterests of all stakeholders of the Company.
The Board of Directors have not recommended any final dividend for FY 2019-20.
8. INVESTOR EDUCATION AND PROTECTION FUND (IEPF)
Pursuant to applicable provisions of the Companies Act 2013 read with IEPF Authority(Accounting Audit Transfer and Refund) Rules 2016 ('the Rules') all unpaid or unclaimeddividends are required to be transferred by the Company to the IEPF established by theCentral Government after completion of seven years. Further according to the Rules theshares in respect of which dividend has not been paid or claimed by the members for sevenconsecutive years or more shall also be transferred to the Demat account created by IEPFAuthority. Accordingly the Company has transferred all unclaimed or unpaid dividends andshares to IEPF as per applicable regulations.
9. DEPOSITS FROM PUBLIC
Your Company has not accepted any deposits covered under Chapter V of the CompaniesAct 2013 and as such no amount of principal or interest was outstanding on the date ofthe Balance Sheet.
10. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
The Company policy for determining 'Material Subsidiaries' and on 'Related PartyTransactions' as approved by the Board can be accessed on the Company website link:http://www.nucleussoftware.com/investors .
Particulars of contracts or arrangements with related parties in the prescribed FormAOC-2 are provided as Annexure A to this Directors' Report.
11. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
Details of Loans Guarantees and Investments covered under the provisions of Section186 of the Companies Act 2013 are provided in the notes to the Financial Statements.
12. MATERIAL CHANGES AND COMMITMENTS AFFECTING FINANCIAL POSITION OF THE COMPANYBETWEEN THE END OF FINANCIAL YEAR 2020 AND DATE OF THIS REPORT
No material changes and commitments have occurred after the close of the year till thedate of this Directors' Report which affectthe financial position ofthe Company.
13. CHANGE IN THE NATURE OF BUSINESS
There has been no change in the nature of business of the Company.
14. MANAGEMENT DISCUSSION & ANALYSIS
As per requirements of Regulation 34 of Securities and Exchange Board of India (ListingObligations and Disclosures) Regulations 2015 the Management's Discussion and Analysis ofthe financial condition and results of both standalone and consolidated operations havebeen provided separately in the Annual Report.
15. REVIEW OF BUSINESS & OUTLOOK
Your Company continues its journey as a preferred partner for banking and financialorganizations worldwide helping them succeed by providing pioneering products innovativeservices and above all solutions for their business needs. Our software presently powersthe operations of more than 150 customers in 50 countries supporting retail bankingcorporate banking cash management internet banking automotive finance and otherbusiness areas. Your Company continued investments into Products Development to ensurethese remain functionally and technologically advanced to achieve higher acceptance in themarket. During the year your Company won 32 orders including 1 in Japan 3 in South EastAsia 2 in Middle East 1 in Australia and 25 in India; which included 22 new customers.We will continue to focus on our key markets including India South East Asia the MiddleEast and Africa as well as our growing markets in Australia and Europe.
Nucleus Software- Worldwide Presence
Continuing the relentless focus on customer success your Company launched a range ofinnovative solutions during the year.
Overall the Indian IT companies had a satisfactory year in terms of financialperformance driven by factors such as digitisation and non-linear growth models. IndianIT firms continue to move up the value chain by providing more end-to-end solutions andengaging more closely with the clients. However as we turned the corner and moved intoFY2020-21 the entire world was facing one of the most unprecedented and unbelievablesituations. With the rapidity of the COVID-19 spread it was clear that the Business Plansrequired serious reconsideration. We could see the possibility of our customers who arein the BFSI sector coming under immense difficulties. Pressures of defaults cash flowdisturbances due to re-scheduling (both customer-requested or government mandated e.g. themoratoriums announced). Pressures of lower demand on retail loans has come due to joblosses salary cuts and the general sentiment. The probability is now high that thesedevelopments could push the Financial Institutions into relooking at their investments.Mindsets could change from 'purchasing for growth" to "purchasing forsurvival".
Due to the adverse impact of COVID-19 the annual growth of the India IT & businessservices market is expected to grow 6.5 per cent to reach $14 billion by December 2020according to a forecast from International Data Corporation (IDC). (The IT Services marketcontributed 76.3 per cent of the IT and business services market in second half of 2019and grew by 8.5 per cent year-over-year during the same period). The COVID-19 pandemic hasresulted in a slowdown in the overall economy and also in the IT services market saidthe report. Although new contracts as well as contract renewals in IT services areexpected to be affected during the crisis it is also expected that consulting servicesmodern collaborative applications managed security services network management servicesand hosting services will represent higher revenue-generating opportunities in thecalendar year 2020.
According to a forecast by Gartner Inc. - Worldwide IT spending is projected to total$3.4 trillion in 2020 a decline of 8% from 2019. The coronavirus pandemic and effects ofthe global economic recession are causing CIOs to prioritize spending on technology andservices that are deemed "mission-critical" over initiatives aimed at growth ortransformation.
Since the rise of FinTech the world of lending has been abuzz with the power of"digital" - FinTechs positioned themselves as offering "digital only"and "neo-digital" experiences while traditional lenders focused on adding adigital flavor to their services. Digital trends such as autonomous things blockchaindigital twins and smart spaces are rapidly approaching maturity. This continuoustechnology innovation will enable the alignment of the physical and digital worlds andcreate competitive advantage for some. As we have entered a new decade one thing iscertain: cloud adoption will continue to rise as companies embrace flexible consumptionthrough both hybrid and multi-cloud environments. Clients are welcoming thesedevelopments expecting that their lending experiences will change for the better.
16. NEW PRODUCT LAUNCHES
During the year we have continued to enhance our solutions to take advantage of markettrends most significant being the increasing digitization of financial services. We haveleveraged digital capabilities like Virtual Assistants messaging applications augmentedchannel-based acquisition capability and Geo tracking to offer end to end digitization ofthe Loan lifecycle.
As part of our 6-monthly plan we released FinnOne Neo 4.0 in May 2019 andFinnOne Neo 4.5 in November 2019. These releases now support Gold Loans Overdrafts andpackaged loan application - single application multiple product category.
We also launched a Geo tracking application for microfinance sourcing channel - mFinand mobile collection channel - mCollect. This application empowers the sales team andfield collections team to be efficient in data capturing planning customer visits andfield collections. This channel's capability is fully extended to the core applicationprocessing platform FinnOne Neo CAS.
As a part of the ongoing development program this year we also launched the latestversions of our Transaction Banking solution FinnAxia 6.5 and FinnAxia 7.0which introduce a sophisticated virtual account management (VAM) solution- designed toenable banks to open virtual accounts for their corporate customers. These virtualaccounts can replace real current accounts and instantly route payments and collections toa linked 'master' current account. Reducing the number of physical accounts helpsstreamline the corporate accounts receivable process ensuring faster payeeidentification error- free reconciliation reduced days sales outstanding (DSO) andimproved working capital management. With FinnAxia VAM corporate banks can tap into newmarkets while also puffing more power in their customers' hands with a range of intuitiveself-service solutions. They can centralize cash operations for their corporate customersthereby providing real-time visibility and better control of liquidity positions alongwith enhanced forecasting capabilities for faster and more informed decision making.
FinnAxia VAM enables banks to provide an enhanced customer experience reduce theiroperational costs through high STP rates combined with low IT expenses and also improvetheir compliance to regulations such as BASEL III.
During the year PaySe world's first offline digital cash solution got selected by RBIto participate in RBI Sandbox on retail payments. The regulator is also appreciating thepower of offline payments and digital transformation solution for the last mile. Thesolution introduced an enhanced version of PaySe device which can reduce dependency of NFCenabled smartphones thus offering a low-cost NFC solution for end customers.
PaySe is also gaining traction in a number of State/Central Government digital paymentinitiatives.
17. NOTABLE ACCOLADES RECEIVED DURING THE YEAR
FinnOne Neo has been recognized as the "#1 Leader in the LendingSolutions Category in the Indian Domestic Sales League Table 2019" and recognizedas "#2 Leader in the Lending Solutions Category in the Global Sales League Table2019" by IBS Intelligence.
FinnOne Neo also won the "Best Lending Implementation" awardfor the project at Roha Housing Finance in the IBS Intelligence FinTech Innovation Awards2019". Powered by our solution Rattanlndia Finance wins the Celent Model Bank Award2020 for Retail Lending powered by FinnOne Neo.
Annual Report FY18-19 won the Platinum Award for excellence within theIndustry - Technology-Software and a ranking of # 21 amongst the top 100 AnnualReports worldwide by League of American Communications Professionals LLC (LACP).
Your Company received an award in Mid Corporate Segment-for Excellence in IT& IT Enabled Services at SME Business Excellence Awards 2019 organized by Dun& Bradstreet Information Services India Pvt. Ltd (D&B).
18. SUBSIDIARY COMPANIES
Your Company has nine subsidiaries across the globe. There are no associate companiesor joint venture companies within the meaning of Section 2(6) of the Companies Act 2013("Act").
The following table provides a list of all these subsidiaries as on March 31 2020:
|Name of Subsidiary ||Location ||Date of Incorporation/ Acquisition ||Percentage of Shareholding |
|Nucleus Software Solutions Pte. Ltd. ||Singapore ||February 251994 ||100% |
|Nucleus Software Inc. ||USA ||August 51997 ||100% |
|NucleusSoftware Japan Kabushiki Kaisha ||Japan ||November 2 2001 ||100% |
|VirStra i- Technology Services Ltd. ||India ||May 6 2004 ||100% |
|Nucleus Software Netherlands B.V. ||Netherlands ||February 3 2006 ||100% |
|Nucleus Software Ltd. ||India ||April 21 2008 ||100% |
|Nucleus Software Australia Pty. Ltd. ||Australia ||February 3 2014 ||100% |
|Nucleus Software South Africa Pty. Ltd. ||South Africa ||February 10 2015 ||100% |
|Avon MobilitySolutions Pvt. Ltd. ||India ||March 17 2016 ||100% |
There has been no material change in the nature of the business of the subsidiaries.
The Board of Directors reviews the affairs of these subsidiaries periodically. Thesesubsidiaries help the Company in providing front end support to customers and explore newopportunities.
A statement containing the salient features of the financial statement of oursubsidiaries in the prescribed form AOC 1 is provided as Annexure B to this Directors'Report. The statement also provides the details of performance financial position of eachofthe subsidiaries.
Further pursuant to the provisions of Section 136 of the Act the financial statementsofthe Company consolidated financial statements along with relevant documents andseparate audited accounts in respect of subsidiaries are available on the website of theCompany.
a) Nucleus Software Solutions Pte. Ltd.
Nucleus Software Solutions Pte. Ltd. (NSS) is based in Singapore. It was incorporatedin 1994 to expand the Company's business in South East Asia. Currently it is the centralentity for Asia-Pacific excluding Japan and Australia with responsibility for businessdevelopment sales and software development services for customers in the region.
b) Nucleus Software Inc.
Nucleus Software Inc. (NSI) is based in New Jersey USA. It was incorporated in 1997for providing business presence in the Americas. NSI operates as a business developmentand sales hub for the region.
c) Nucleus Software Japan Kabushiki Kaisha
Nucleus Software Japan Kabushiki Kaisha (NSJKK) is based in Tokyo Japan. It wasincorporated in 2001 to expand business in the country. NSJKK operates as a businessdevelopment and sales hub for Japan. Additionally the subsidiary provides softwaredevelopment services to the local customers in Japan.
d) VirStra i- Technology Services Ltd.
VirStra i- Technology Services Ltd. is based in Pune India. It was incorporated in2004 to provide software development services targeted at the Japanese market.
e) Nucleus Software Netherlands BV
Nucleus Software Netherlands BV (NSBV) is based in Amsterdam The Netherlands. It wasincorporated in 2006 for enlarging business presence in the European market. NSBV is abusiness development and sales hub for Nucleus in Europe.
f) Nucleus Software Ltd.
Nucleus Software Ltd. (NSL) has operations in Jaipur with registered office in NewDelhi. It was incorporated in 2008 for facilitating delivery to larger clients throughoperations in a Special Economic Zone. NSL acquired 17.41 acre of land in the MahindraWorld Special Economic Zone Jaipur and has co-developed a 250-seater facility.
g) Nucleus Software Australia Pty. Ltd.
Nucleus Software Australia Pty. Ltd. (NSA) is based in Sydney Australia. It wasincorporated in 2014 for tapping the growing business opportunities in ANZ region. NSAoperates as a business development and sales hub for the region. Additionally thesubsidiary provides software development services to the local customers in Australia.
h) Nucleus Software South Africa Pty. Ltd.
Nucleus Software South Africa Pty. Ltd. (NSSA) is based in Johannesburg South Africa.It was incorporated in 2015 for tapping the growing business opportunities in SouthAfrican region. NSSA operates as a business development and sales hub for the region.
i) Avon Mobility Solutions Pvt. Ltd.
Avon Mobility Solutions Pvt. Ltd has operations in Chennai with registered office inDelhi. It has very good experience in logistics domain and expertise in developing mobileapplications.
Avon Mobility Solutions Pvt. Ltd. became subsidiary of your Company on March 17 2016.
19. MERGER OF WHOLLY OWNED SUBSIDIARIES
The Board of Directors in FY 2018-19 approved a scheme of amalgamation pursuant toSections 230 to 232 read with Section 234 and other relevant provisions of the CompaniesAct 2013 providing for the merger of its wholly owned subsidiaries Virstra I TechnologyServices Ltd. and Avon Mobility Solutions Pvt. Ltd. with Nucleus Software Exports Ltd.During the year the petition was filed with National Company Law Tribunal (NCLT) forapproval of the scheme of amalgamation and necessary approvals were taken from theshareholders at the NCLT-convened Shareholders meeting held on July 8 2019. The petitionfor merger has since been approved by the NCLT on 18 March 2020. As on date of the reportthe Company is awaiting for certified copy of this order along with the approved scheme ofmerger from the NCLT.
Your Company along with its subsidiaries has offices at several locations across theglobe. The office space and seating capacity of these offices as on March 31 2020 isdetailed below:
|Office Location ||Area in sq. ft. ||Seating Capacity |
| || ||- No. of Persons |
|India || || |
|Noida ||208122 ||1677 |
|Jaipur ||22312 ||250 |
|Pune ||9573 ||114 |
|Chennai ||12286 ||134 |
|New Delhi ||4200 ||40 |
|Mumbai ||3250 ||31 |
|Overseas || || |
|Singapore ||4807 ||61 |
|Dubai UAE ||1290 ||17 |
|Tokyo Japan ||735 ||15 |
|Manila Philippines ||102 ||3 |
|Jakarta Indonesia ||97 ||3 |
|London UK ||226 ||2 |
|Sydney Australia ||130 ||2 |
|NewJersey USA ||146 ||4 |
| ||267276 ||2353 |
Noida New Delhi and Jaipur premises are owned by the Company and its subsidiaries.
21. QUALITY PROCESSES
Your Company is committed to ensure the highest level of quality for its products andservices. The key focus for this year was to standardize and quantify the qualityprocesses with the transformational journey of the organisation. Process improvementinitiatives were centred on 'Process Optimization'. The FinnEdge implementationmethodology emerged as standard implementation methodology for New Products. Extension toFinnEdge i.e. Rapid was implemented in projects and has helped the implementation ofsolution in quick time for Greenfield customers. Processes were improved basis thefeedback from various CFTs in the organisation.
To improve and measure Product Quality a project control framework was introduced andpiloted in projects and IDMS (Integrated Defect Management System) was rolled out andcontinuously improved with inclusion of different types of analysis. Teams were enabledwith Root Cause Analysis to improve quality and customer satisfaction.
A dedicated Quality Assurance team handles the process change managementimplementation and its adherence across the organization. This team monitors quality andproductivity improvements through regular connect audits and reviews.
In FY 2020 your Company continued to grow its marketing operations and activities insupport of its strategic aspirations.
During the year the Company moved forward on its agenda of growth into new marketsaround the world by establishing brand awareness and generating demand from focused targetsegments. Your Company is continually investing in marketing with the below objectives:
Ensure that your Company is known to provide high quality innovative lendingand transaction banking solutions to the target markets.
Establish your Company as an Industry Thought Leader.
Equip the sales team fully with the material and tools required tosell the product or service they represent.
During the year your Company participated in number of leading Industry fora globallyin order to showcase our expertise and product offerings. Such key fora include:
Digital Presence and Visibility
Your Company continued to build its presence in the traditional media as well as on thesocial media channels. Interactions continued with the media worldwide includingtelevision print wires and online portals and source exclusive media opportunities invarious geographies such as Australia Africa the Middle East and India. Social media hasbeen a focus area covering a wide range of brand activities and our successes. YourCompany used social media primarily for activities involving thought leadership blogsarticles press releases customer video testimonials and other business content marketingpurposes.
Communicating the business benefits that our solutions offer and the benefits of ourdecades of focus is vitally important. We do this in a number of ways. For example duringthe year our teams travelled worldwide to demonstrate our expertise and product offeringsat industry events roundtables and briefings. We showcased our capabilities in manycountries including Australia India Indonesia Nigeria Singapore the Philippines theUSA and the United Kingdom. Such key forums include the following:
We continued ourfocused campaigns in Australia speaking at events including theAustralian Banking Innovation
Summit 2019 and the Australian Mortgage Innovation Summit 2020.
In the United States of America our experts participated in the Digital BankingSummit in Texas and demonstrated how our transaction banking product suite enables leadingbanks worldwide to swiftly address their corporate customers' ever-changing requirements.
We continued to share our transaction banking expertise including our views onthe increasing importance of Hyper Agility at Sibos 2019 in London.
In South East Asia we demonstrated insights on how we help leadingorganizations drive innovation at the 2019 Vietnam Retail Banking Forum. We addressed theMortgage Loans Innovation Conference in Singapore on "Transforming Lending forTomorrow - Going Beyond Digital."
In Africa we hosted a round table for financial institutions on 'The Road Aheadfor Corporate Lending' in Lagos.
At the Middle East Banking Summit 2019 we presented our insights on 'GeffingReady for Hyper Banking - The Time is Now'.
In India we have run a number of exclusive roundtables for banks and NBFCsincluding roundtables focused on Coorigination in Lending and on leveraging cloud to'Profit from digital in lending'. We demonstrated our advanced technologies at theTechnology Senate Bangla Conference in Kolkata and showcased how FinnOne Neo is helpingNBFCs drive innovation in lending at the 7th NBFC100 Tech Summit in Chennai. Also inChennai we were proud to be the technology partner at the 8th Microfinance & NBFCsExhibition and Conference (MiNE 2019).
Though face to face events are an important way for us to share how we help banks andother financial institutions these are not the only way we communicate our capabilities.We share our expertise via blogs whitepapers and articles in leading publicationsworldwide. In addition we also regularly interact with industry analysts and consultants.
23. HUMAN RESOURCE MANAGEMENT
Your Company is determined to accelerate its growth story by corresponding to thechanging needs of diverse workgroups by fostering an engaging work environment toconstantly build the unique capabilities and skills of the people. The global employeestrength of the Company at the end of FY 2020 was 2134.
During the year there were many new launches and continuation of monitoring theeffectiveness of organization-wide initiatives to ensure high-performing and engagedworkforce like:
1. Delivering Business Excellence - Frequent connect sessions with associates largelytargeting the high potentials
a. Gathering insights about the workplace culture & opportunities offered &sharing them with the business heads for preventive action
b. Acting as strategic business partner by regularly sharing HR metrics in the form ofdashboard and meeting for actions on a monthly and quarterly basis
c. Launch&closure ofTrustSurvey
d. Closure of actions of last year Trust Survey
e. Gearing up for making it "One of the Great Places to Workfor"
f. Launch of Business HR (BUHR) group connect
2. Employee Assist - Conceptualize & execute suitable interventions to keepassociates motivated with a key objective of "Enhancing Employee Experience"
a. Revamping referral program to attract talent from the industry
b. Aligning the annual performance management process (NucEDGE19) to the industrystandards
c. Day care in Nucleus Software premises & discussion on extension of the same
d. Coffee sessions with Senior Leadership
e. Launch of Skillsoft's e-learning modules organization wide as a platform to improvetechnology skills and soft skills
f. Redesigned Manager's meet to help them to overcome the bottlenecks of people relatedissues/concerns
g. Focus on leadership development via:
i. Leadership Engagement Action & Development (LEAD) and Young Leaders' Program(YLP) programs-
LEAD and YLP PROGRAMS have been one of the most significant learning initiativesacross the organization. They contributed immensely towards building the organizationalculture individual effectiveness and leadership competencies.
ii. E- Learning initiatives: iLearn and Percipio are the e-learning platforms launchedin Nucleus
iLearn courses are in the areas of technology and soft skills. Access hasbeen given to all the employees in the organization. The objective of iLearn is to givelearning in the hands of employees to do any course at their own pace and time. The mainobjective is to enhance learning culture in the organization.
Percipio Courses are specialized leadership development programs poweredby MIT Sloan Management Review. This platform provides various topics ranging from LeadingOrganizational Vision and Leading a culture of execution to thinking strategically thismodule provides content from top minds of the business and leadership community in avariety of formats to support leaders at all levels including senior leaders
iii. IIM/MDI residential programs
iv. Launch of Aarohan
This is a new initiative aimed at grooming leaders from within and catching themearly. The journey includes self-initiated multidimensional learning coaching/ mentoringby experts opportunities to be part of prestigious projects mentor-guided reading ande-learning to name a few
h. MIT online design thinking and system architecture programs
i. CYMORG a business simulation tool for top leaders to hone their decision-makingskills
- nanobytes launched organization wide: gamified short learning capsules focusing onspecific competencies for individuals and teams
- initiatives towards values understanding
Your Company's focus lies in creating a performance-based culture driven by focusedgrowth and clear career development plan for each employee. Going forward the HR roadmapwill also focus on 'Collaboration & Acceleration' to stimulate our strategic growththrough employee empowerment to make it a great place to work for.
24. CORPORATE GOVERNANCE
We at Nucleus believe that good and effective Corporate Governance is critical toachieve corporate vision and mission of the organization; it is more of an organizationalculture than a mere adherence to rules and regulations. Corporate Governance is aboutmaximising stakeholders' value legally ethically and sustainably. Law alone cannot bringchanges and transformation and voluntary compliance both in form and in substance playsan important role in developing good Corporate Governance.
Your Company has established and maintained a strong ethical environment overseen by acompetent Board of Directors. The Company's practices and policies reflect the true spiritof Corporate Governance initiatives.
The required disclosures of Schedule V part II are mentioned in "CorporateGovernance Report" and forms part of the Annual Report.
Your Company is in compliance of all mandatory requirements of Corporate Governance asstipulated as per Securities and Exchange Board of India (Listing Obligations andDisclosure)
Regulations 2015. Compliance status is provided in the Corporate Governance section ofthe Annual Report. A certificate issued by the Statutory Auditors of the Company underRegulation 34 of Securities and Exchange Board of India (Listing Obligations andDisclosure) Regulations 2015 confirming compliance of the conditions of CorporateGovernance is provided as Annexure C to this Directors' Report. The auditors' certificatefor fiscal year 2020 does not contain any qualifications reservations or adverse remark.
A detailed report on Corporate Governance for the year forms part of the Annual Report.
25. DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMP)
In accordance with the provisions of the Companies Act 2013 and the Articles ofAssociation of the Company Mr. Vishnu R Dusad. Managing Director retires by rotation atthe ensuing Annual General Meeting and being eligible has offered himself forre-appointment.
Mr. S M Acharya Mr. Prithvi Haldea Prof. Trilochan Sastry and Mrs. Elaine Mathias areIndependent Directors as per the Companies Act 2013 not liable to retire by rotation tohold office for five consecutive years. They have submitted a declaration that each ofthem meets the criteria of independence as provided in Section 149(6) of the Act and therehas been no change in the circumstances which may affect their status as IndependentDirector during the year.
Dr. Ritika Dusad is a Non-Executive Non-Independent Director of the Company appointedw.e.f June 15 2017 and is liable to retire by rotation.
Mr. Prithvi Haldea and Prof. Trilochan Sastry were reappointed as Independent Directorsw.e.f. July 26 2019 for a term of 5 years which will expire July 25 2024.
Mrs. Elaine Mathias was reappointed as an Independent Director w.e.f. September 202019 for a term of 5 years which will expire September 19 2024.
The Board of Directors at their meeting held on March 16 2020 at the recommendation ofNomination and Remuneration/Compensation Committee appointed Mr. Parag Bhise asAdditional Executive Director for a term of five years subject to approval ofshareholders in the forthcoming Annual General meeting.
Mr. Vishnu R. Dusad was reappointed as Managing Director w.e.f. January 1 2017 for aperiod of 5 years. His present term expires on December 31 2021.
Mr. Ravi Pratap Singh was reappointed as Whole Time Director w.e.f. July 26 2019 for aperiod of 5 years. His present term expires on July 25 2024.
During the year the Non-Executive Directors of the Company had no pecuniaryrelationship ortransactions with the Company other than siffing fees commission andreimbursement of expenses incurred by them for the purpose of attending meetings of theCompany.
Pursuant to provisions of Section 203 of the Companies Act 2013 Mr. Vishnu R. DusadManaging Director Mr. R. P. Singh CEO Mr. Ashish Nanda Chief Financial Officer and Ms.Poonam Bhasin Company Secretary are the Key Managerial Personnel of the Company as ondate of the report.
In accordance with the provisions of Companies Act 2013 and the Article of Associationof the Company Mr. Vishnu R Dusad retires by rotation at the ensuing Annual GeneralMeeting and being eligible has offered himself for re-appointment.
26. BOARD EVALUATION
The Board of Directors carried out an annual evaluation of its own performance andperformance of the Chairman Board committees and individual Directors pursuant to theprovisions of the Companies Act 2013 and the Corporate Governance requirements underRegulation 25 (4) of Securities and Exchange Board of India (Listing Obligations andDisclosure) Regulations 2015.
The Board along with the Nomination and Remuneration/ Compensation Committeedeveloped and adopted the criteria and framework for the evaluation of each of theDirectors and of the Board and its Committees.
The evaluation was then conducted as per the approved process (explained in detail inthe Report on Corporate Governance of the Annual report). The Chairman of the Committeealso had interactions with each of the Directors and sought their feedback and suggestionson the overall Board Effectiveness and Directors performance.
In addition pursuant to the provisions of Schedule IV to the Companies Act 2013 theIndependent Directors reviewed the performance of the Non-Independent Directors and of theBoard as a whole performance of the Chairman of the Board taking into account the viewsof all the Directors and the quality quantity and timeliness of flow of informationbetween the Company management and the Board and its sufficiency for the Board toeffectively perform its duties.
The Chairman placed the Evaluation Summary before the committee members. The same wasdiscussed in detail and the members recorded their satisfaction
27. COMPANY'S POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION
The primary responsibility of the Nomination and Remuneration/Compensation Committee(NRC) is to identify and nominate suitable candidates for Board membership. The Committeealso formulates policies relating to the remuneration of Directors Key ManagerialPersonnel and other senior employees of the Company.
The Committee while evaluating potential candidates for Board membership considers avariety of personal attributes including experience intellect foresight judgment andtransparency and match these with the requirements set out by the Board. The basicresponsibilities of NRC with regard to Directors' appointment are as follows:
Recommending desirable changes in Board size composition Committee structureand processes and other aspects of the Board's functioning;
Formulating criteria for determining qualifications positive attributes andIndependence of a Director
Conducting search and recommending new Board members in light of resignation ofcurrent members or a planned expansion of the Board;
Identifying persons who are qualified to become Directors and who may beappointed in senior management in accordance with the criteria laid down and recommend tothe Board their appointment and removal.
The policy of the Company for "Selection of Directors" is provided asAnnexure D and "Policy of Remuneration for Directors Key Managerial Personnel andother Employees" is provided as Annexure E to this Directors' Report. These Policiesare also available on the Company website link: http://www .nucleussoftware.com/investors.
28. DECLARATION BY INDEPENDENT DIRECTORS
The Company has received declarations from all the Independent Directors that they meetthe criteria of independence as laid down under Section 149(6) of the Companies Act 2013and Regulation 25 of Securities and Exchange Board of India (Listing Obligations andDisclosure) Regulations 2015.
29. FAMILIARISATION PROGRAMME FOR INDEPENDENT DIRECTOR'S
The details of programmes for familiarisation of Independent Directors with theCompany their roles rights responsibilities in the Company nature of the industry inwhich the Company operates business model of the Company and related matters can beaccessed on the Company website link: http://www . nucleussoftware.com/investors.
30. MEETINGS OF THE BOARD OF DIRECTORS
The Board met 7 times during the year. The details are provided in the Report onCorporate Governance a part of the Annual Report.
31. COMMITTEES OF THE BOARD
There are five Committees of the Board as on March 31 2020 as follows:
Nomination and Remuneration/Compensation Committee
Corporate Social Responsibility Committee
Details of all the Committees along with their charters composition and meetings heldduring the year are provided in the Report on Corporate Governance a part of the AnnualReport.
The Composition of Board Committees as on March 31 2020 is as follows:
| ||Audit Committee ||Nomination & Remuneration / Compensation Committee ||Stakeholder Relationship Committee ||Corporate Social Responsibility Committee ||Culture Committee |
|Mr. S M Acharya || || || || || |
|Mr. Vishnu R Dusad || || || || || |
|Mr. Prithvi Haldea || || || || || |
|Mrs. Elaine Mathias || || || || || |
|Prof. Trilochan Sastry || || || || || |
|Mr. R. P. Singh || || || || || |
32. VIGIL MECHANISM
The Company has a well-established whistle blower policy as part of vigil mechanism forobserving the conduct of Directors and employees and report concerns about unethicalbehaviour actual or suspected fraud or violation of the Company's Code of conduct orethics policy. This mechanism also provides for adequate safeguards against victimizationof Director(s)/ employee(s) who avail of the mechanism and also provides for direct accessto the Chairman of the Audit Committee in case of feel of dissatisfaction from thedecision of the Ombudsman appointed as per Whistle blower Policy.
33. SIGNIFICANT AND MATERIAL ORDERS
No significant or material orders were passed by the Regulators or Courts or Tribunalswhich impact the going concern status and Company's operations in future.
34. REPORTING OF FRAUDS BY AUDITORS
During the year under review neither the Statutory Auditors nor the SecretarialAuditors has reported to the Audit Committee under Sec 143(12) of the Companies Act2013 any instances of fraud committed against the Company by its officers or employees.
35. RISK MANAGEMENT POLICY
The Company has developed and implemented a 'Risk Management Policy' that includesidentification of elements of risk which in the opinion of the Board may threaten theexistence of the Company. Risk Management Report forms a part ofthe Annual Report.
36. ADDITIONAL INFORMATION TO SHAREHOLDERS
Detailed information to the shareholders is provided in the Shareholders' Reference' apart of the Annual Report.
Pursuant to the provisions of Section 139 of the Companies Act 2013 and the rulesframed thereafter M/s BSR & Associates LLP Chartered Accountants were appointed asstatutory auditors of the Company from the conclusion of the Annual General Meeting (AGM)of the Company held on July 8 2016 until the conclusion of Annual General Meeting of theCompany to be held in Calendar year 2021. The requirement to place the matter relating toappointment of the statutory auditors for ratification by the Members at every AGM hasbeen done away by the Companies (Amendment) Act 2017 with effect from May 7 2018.Accordingly no resolution is being proposed for ratification of appointment of StatutoryAuditors at the ensuing AGM.
As per the Companies Act 2013 Secretarial Audit by a practicing Company Secretary hasbecome mandatory for prescribed companies and they are required to annex the SecretarialAudit report with their Board Report in the Annual Report. We are pleased to inform thatyour Company as a voluntary practice has been geffing Secretarial Audit done for thepast several years and also reporting it in the Annual Report.
Pursuant to the provisions of Section 204 of the Companies Act 2013 and The Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Board appointedM/S Sanjay Grover and Associates Practising Company Secretaries to undertake theSecretarial Audit of the Company. Secretarial Audit Report in the prescribed Form MR 3 isprovided as Annexure F to this Directors' Report. The Secretarial Auditors' Report doesnot contain any qualification reservation or adverse remark.
The Company voluntarily adheres to the various Secretarial Standards issued by theInstitute of Companies Secretaries of India.
38. INTERNAL FINANCIAL CONTROLS
Your Company has in place adequate internal financial controls with reference to thefinancial statements.
M/s BSR & Associates LLP the statutory auditors of the Company has audited thefinancial statements included in the annual report and has issued an attestation report onour internal control over financial reporting (as defined in Section 143 of Companies Act2013).
39. CORPORATE SOCIAL RESPONSIBILITY (CSR)
Inclusive growth and sustainable development are strong pillars of your Company'sresponsible corporate citizenship and are a part ofthe core values and driving force formany of its initiatives. The Company believes that responsible investments in this regardwill generate long term value for all the stakeholders.
In accordance with requirements of The Companies Act 2013 the Company has a CorporateSocial Responsibility Committee comprising of a majority of Independent Directors andchaired by an Independent Director Prof. Trilochan Sastry. Mr. Vishnu R Dusad Mr.Prithvi Haldea and Mr. S M Acharya are the other members. The Committee framed andrecommended a CSR Policy to the Board for adoptton and instttuted a transparent monitoringmechanism for ensuring implementatton of the projects / acttvittes to be undertaken by theCompany.
The CSR Policy may be accessed on the Company website link:http://www.nucleussoftware.com/investors .
Your Company has set up Nucleus Software Foundatton (NSF) a Trust for the purposes ofundertaking CSR acttvittes of the Company. This Foundatton established in 2014 as aSectton 25 Company works towards its stated mission: "Empowering underprivilegedwith essence of educatton and thereby better livelihood and better life".
During the year the Nucleus Software Foundatton (NSF) conttnued working towards itsaim to make the educattonal quality standards better for the underprivileged childrenstudying at government primary schools and NGO-aided schools through its benchmarkremedial program NSF Hybrid Learning Program.
The NSF team has designed a remedial program to bridge the gap identtfied by thebaseline test conducted across the selected schools. The program bridges the gap of thestudent in the area of Math and English. The aim is to bring children closer to thelearning levels appropriate for their assigned classes. The program helps in learningthrough the well-curated teaching learning material practtce notebooks engaging digitalcontent and doing intelligent assessments. The digital content on the tab is mapped tothe remedial program which we have designed based on the learning level ofthe student.
The Foundatton was able to reach over 2800 students across 63 schools In NoidaGreater Noida Vikasnagar block of Dehradun in Uttarakhand and Shahbad block ofKurukshetra in Haryana.
The program was run in an intensive mode with facilitators from the implementtngpartners daily implementtng the program at schools of Noida Greater Noida and Vikasnagararea of Dehradun. The training was provided to 52 government school teachers of Noida andShahbad area and 25 facilitators of NGO partners. Many of these school teachers havestarted running these programs on their own at their schools.
The program at Shahbad Block of Kurukshetra which was started this year was unique asthis was a purely teacher led program. The NSF English remedial program was also alignedto the Educattonal transformatton program of Haryana called Saksham.
The teachers themselves are now implementtng the program at their schools and thefoundatton is supplying them the learning material. The Foundatton also maintains anonline forum to coordinate the acttvittes at these schools and also visits them to monitorand assist in the progress of the program.
Besides government schools the Foundatton worked extensively with an NGO learningcentre in Ghaziabad where sponsorship was provided to their human resource rental costand also helped them in designing an effecttve learning program. The students of NGO useNSF Hybrid Learning Program quite extensively. The sports day and some other recreattonalacttvittes were also conducted during the year for them. During the difficult ttmes ofCOVID 19 the Foundatton gave donatton to Prime Minister Care Fund and also provided otherassistance and relief for combattng against the coronavirus outbreak. There were manyother CSR inittattves undertaken by the Foundatton during the year.
The Annual Report on CSR acttvittes is provided as Annexure G to this Directors'Report.
40. EMPLOYEE STOCK OPTION PLAN (ESOP)
Currently there is only one ESOP scheme prevalent in the Company; ESOP scheme - 2015(instttuted in 2015). As per ESOP scheme 2015 equity shares would be transferred toeligible employees on exercise of opttons through Nucleus Software Employee Welfare Trustwhich is established to carry out acttvittes for the benefit and welfare of its Employeesby launching various Schemes in accordance with the Securittes and Exchange Board of India(Share Based Employee Benefits) Regulattons 2014.
Details of ESOP as per the provisions of Companies Act 2013 and Rules made there underare as follows:
|Particulars ||2015 Plan |
|a) ||Total numberofopttons underthe Plan ||500000 |
|(b) ||Pricing formula ||100% ofthe Fair Market Price as on date ofgrant |
|(c) ||Opttons granted during the year ||- |
|(d) ||Opttons vested as of March 31 2020 ||- |
|(e) ||(i) Opttonsexercisedduringtheyear ||- |
| ||(ii) Total number of shares arising as a result of exercise of above opttons during the year ||- |
|(f) ||Opttons forfeited during the year ||- |
|(g) ||Optton lapsed duringthe year ||- |
|(h) ||Variatton ofterms of opttons duringthe year ||- |
|(i) ||Amount realized by exercise of opttons during the year ||- |
|(j) ||Total number of opttons in force as on March 31 2020 ||- |
During the year no stock opttons were granted to any employee under theabove-menttoned ESOP plan and therefore no calculattons are required to be made orreported regarding difference between intrinsic value and fair market value of ESOPsgranted.
41. PARTICULARS OF EMPLOYEES
Disclosures pertaining to remuneratton and other details as required under Sectton197(12) of the Companies Act 2013 read with Rule 5(1) of the Companies (Appointment andRemuneration of Managerial Personnel ) Rules 2014 are provided in the prescribed formatand annexed as Annexure H to this Directors' Report.
Having regard to the provisions of the first provision to Section 136(1) of theCompanies Act 2013 and as advised the Annual Report excluding the aforesaid informationis being sent to the members of the Company. The said information is available forinspection at the registered office of the Company during working hours and any memberinterested in obtaining such information may write to the Company Secretary and the samewill be furnished on request. The full Annual Report including the aforesaid informationis available on the Company's website.
42. DIRECTOR'S RESPONSIBILITY STATEMENT
Pursuant to as per Section 134 (5) of the Companies Act 2013 the Directors confirmthat:
(a) in the preparation of the annual accounts for the financial year ended March 312020 the applicable accounting standards had been followed along with proper explanationrelatingto material departures;
(b) the Directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company at the end of the financial year and ofthe profit and loss of the Company for that period;
(c) the Directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;
(d) the Directors had prepared the annual accounts on a going concern basis;
(e) the Directors had laid down internal financial controlsto be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively; and
(f) the Directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
Based on the framework of internal financial controls and compliance systemsestablished and maintained by the Company work performed by the internal statutory andsecretarial auditors including audit of internal financial controls over financialreporting by the statutory auditors and the reviews performed by the management theBoard is of the opinion that the Company's internal financial controls were adequate andeffective during FY 2019-20.
43. EXTRACT OF ANNUAL RETURN
Extract of Annual Return of the Company in the prescribed Form MGT-9 is provided asAnnexure I to this Directors' Report. The same is available onhttp://www.nucleussoftware.com/ investors.
44. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO
The information on conservation of energy technology absorption and foreign exchangeearnings and outgo as stipulated under Section 134 of the Companies Act 2013 read withthe Companies (Accounts) Rules 2014 is provided as Annexure J to this Directors' Report.
45. COST RECORDS AND COST AUDIT
Maintenance of cost records and requirements of cost audit as prescribed under theprovisions of section 148 (1) of the Companies Act 2013 are not applicable for thebusiness activities carried out by the Company.
46. DISCLOSURE REQUIREMENTS
As per SEBI Listing Regulations the Corporate Governance Report with the Auditors'Certificate thereon and the integrated Management Discussion and Analysis including theBusiness Responsibility Report are attached which forms part of this report.
The Company has devised proper systems to ensure compliance with the provisions of allapplicable Secretarial Standards issued by the Institute of Company Secretaries of Indiaand that such systems are adequate and operating effectively.
47. INTERNAL COMPLAINTS COMMITTEE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE(PREVENTION PROHIBITION AND REDRESSAL) ACT 2013
Nucleus values the dignity of individuals and strives to provide a safe and respectablework environment to all its employees. The Company has put in place a 'Policy againstSexual Harassment' compliant with the Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013 ("Sexual Harassment Act"). TheInternal Committee at all the locations of the Company across India has been constitutedto consider and resolve all sexual harassment complaints as reported under the policy. TheCommittee also includes external member from NGOs or with relevant experience. We affirmthat adequate access was provided to any complainant who wished to register a complaintunder the policy. There were no complaints received disposed and/or pending during thefinancial year.
Your Directors would like to place on record their gratitude for the co-operationreceived from the Government of India State Governments of Delhi Uttar Pradesh andRajasthan Customs and Excise Departments Department of Scientific and IndustrialResearch (Ministry of Science and Technology) Software Technology Park-Noida SoftwareTechnology Park- Chennai Software Technology Park-Pune Special Economic Zone authoritiesand other government agencies.
Your Directors would also like to thank the Company's customers bankers vendorspartners and shareholders for their continued support to the Company. In specific theBoard would like to put on record its sincere appreciation of the commitment andcontribution made by all employees ofthe Company.
| ||For and on behalf of the Board of Directors |
| ||Sd/- |
|Place: Bangalore ||S M Acharya |
|Date: June 12 2020 ||Chairman |