Your Board of Directors ("Board") with immense pleasure present their14th Annual Report of Quess Corp Limited ("the Company" or
"Quess") for the financial year ("FY") ended 31 March2021 ("the year under review" or "the year" or"FY21").
In compliance with the applicable provisions of the Companies Act 2013 ("theAct") and the Securities and Exchange Board of India (Listing Obligations andDisclosure Requirements) Regulations 2015 ("Listing Regulations") thisreport covers the financial results and other developments during the financial year from1 April 2020 to 31 March 2021 in respect of Quess Standalone and Consolidated comprisingQuess its subsidiaries and associate Companies. The consolidated entity has been referredto as "Quess Group" or "the Group" in this report.
1. Financial Results An Overview:
In compliance with the provisions of the Act and the Listing Regulations the Companyhas prepared its standalone and consolidated financial statements as per Indian AccountingStandards ("Ind AS") for the FY21. The standalone and consolidatedfinancial highlights of the Company's operations are as follows:
| || |
|Standalone || |
|Particulars ||FY21 ||FY20 ||FY21 ||FY20 |
|Revenue ||108368.95 ||109914.82 ||74834.06 ||77402.32 |
|Other Income ||450.90 ||510.89 ||303.79 ||475.46 |
|Total Income ||108819.85 ||110425.71 ||75137.85 ||77877.78 |
|Cost of material and stores and spare parts consumed ||2007.49 ||2670.55 ||712.91 ||1309.54 |
|Employee expenses ||92968.43 ||90634.38 ||68187.62 ||67914.63 |
|Other expenses ||8811.93 ||10031.87 ||5261.92 ||4842.87 |
|Finance Costs ||1112.93 ||1668.01 ||634.63 ||967.99 |
|Depreciation and Amortization Expense ||2285.28 ||2486.07 ||525.09 ||656.18 |
|Total Expenses ||107186.06 ||107490.88 ||75322.17 ||75691.21 |
|Share of Profits/(loss) in Associates ||(114.27) ||(138.33) ||0.00 ||0.00 |
|Profit/loss before exceptional items and tax ||1519.52 ||2796.50 ||(184.32) ||2186.57 |
|Exceptional items ||(326.89) ||6640.52 ||112.70 ||5261.18 |
|Profit/(Loss) Before Tax ||1846.41 ||(3844.02) ||(297.02) ||(3074.61) |
|Tax Expense ||1109.52 ||474.76 ||701.49 ||294.46 |
|Profit/(Loss) for the year ||736.89 ||(4318.78) ||(998.51) ||(3369.07) |
|Total Comprehensive Income for the year ||721.13 ||(4221.34) ||(1059.59) ||(3420.29) |
|Basic EPS (in J) ||3.92 ||(30.28) ||(6.76) ||(22.94) |
|Diluted EPS (in J) ||3.87 ||(30.22) ||(6.67) ||(22.89) |
A detailed performance analysis on various segments business and operations areprovided in the Management Discussion and Analysis which is annexed to this report.
The Company has not transferred any amount to the general reserves during the yearunder review.
3. Transfer of Unclaimed Dividend to Investor Education and Protection Fund:
Provisions of Section 125(2) of the Act does not apply to the Company as the Companydid not declare any dividend till 31 March 2021.
The Board of Directors of your Company at their meeting held on 5 May 2021 declared aninterim dividend of H 7/- per equity share of H 10/- each for the financial year 2020-21aggregating to H 1033.75 million in due compliance with applicable laws.
5. Dividend Distribution Policy:
Pursuant to Regulation 43A of the Listing Regulations the Board of Directors of theCompany has formulated a Dividend Distribution Policy. The dividend if any to bedeclared in the future will be paid as per this policy depending on a number ofparameters including but not limited to the Company's profits capital requirementsoverall financial condition contractual restrictions and other factors consideredrelevant by the Board. The Dividend Distribution Policy adopted by the Company isavailable on the Company's website which can be accessed using the linkhttps://www.quesscorp.com/investor/dist/images/pdf/Policies/Dividend_Distribution_Policy.pdf
6. Share Capital:
During the year under review there has been no change in the Authorised Share Capitalof the Company. However the paid-up share capital of the Company as on 31 March 2021 wasH 1476.79 million as compared to H 1475.11 million in the previous year.
The paid-up share capital of the Company increased due to the following events/transactions -
(a) Quess Corp Employees' 2009 Amended Stock Option Scheme ("ESOP 2009")
The Nomination and Remuneration Committee ("NRC") vide circularresolution dated 11 May 2020 and 24 July 2020 allotted 58960 and 38525 equity sharesrespectively of H 10 each to the eligible employees of the Company who exercised theiroptions under ESOP 2009.
(b) Quess Employee Stock Option Scheme 2015 ("ESOP 2015")
The NRC at its meeting held on 27 May 2020 24 July 2020 and 27 January 2021 allotted13667 16099 and 40919 equity shares respectively of H 10 each to the eligibleemployees & ex-employees of the Company who exercised their options under ESOP 2015.
The Company has not issued any debentures bonds sweat equity shares any shares withdifferential rights or any non-convertible securities during the year under review.
7. Subsidiaries and Associate Companies:
Pursuant to the provisions of Section 129(3) of the Act a separate statementcontaining the salient features of the financial statements of all subsidiaries andassociate companies/ joint ventures of the Company (in Form AOC - 1) is attached to thefinancial statements of the Company.
In terms of Section 134 of the Act and Rule 8(1) of the Companies (Accounts) Rules2014 the financial position and performance of the subsidiaries are given as an annexureto the Consolidated Financial Statements.
Further pursuant to the provisions of Section 136 of the Act the standalone andconsolidated financial statements of the Company along with relevant documents andseparately audited financial statements of the subsidiaries are available on theCompany's official website https://www.quesscorp.com/ investor-other-information/.
The Company has approved a policy for determining material subsidiaries and the same isuploaded on the Company's website which can be accessed using the link - https://www.quesscorp.com/investor/dist/images/pdf/Governance/Policy-for-Material-Subsidiary.pdf. Interms of this policy Conneqt Business Solutions Limited continues to be a materialsubsidiary of the Company within the meaning of Regulation 16(c) of the ListingRegulations for which Secretarial Audit has been conducted pursuant to Regulation 24A ofthe Listing Regulations. There has been no material change in the nature of the businessof the subsidiaries.
As on 31 March 2021 there are total 32 Subsidiary Companies comprising 13 IndianCompanies and 19 Foreign Companies. Out of 13 Indian Companies 8 Companies arewhollyowned subsidiaries 4 Companies are subsidiaries and 1 Company is a step-downsubsidiary. Out of 19 Foreign Companies 5 Companies are whollyownedsubsidiaries and 14 Companies are step-down subsidiaries. Further there are 2 Indian and3 Foreign Associate Companies.
8. Acquisitions/ Investments/ Disinvestment during the year:
The Board of Directors at its meeting held on 27 May 2020 approved an additionalinvestment of 25% in the equity shares of Terrier Security Services (India) PrivateLimited
(" Terrier") from Heptagon Technologies Private Limited
(" Heptagon") for an amount of H645000000 (Rupees
Sixty Four Crore Fifty Lakhs Only) by way of set-off against the amount of loan duefrom Heptagon. With this Quess's stake in Terrier increased from 49% to 74% therebymaking Terrier a subsidiary of the Company w.e.f 1 June 2020.
The Board of Directors on 17 July 2020 approved the termination of the ShareSubscription and Shareholder's Agreement dated 5 July 2018 executed between Quess EastBengal FC Private Limited ("QEBFC") East Bengal Club ("Club")and Quess Corp Limited ("Investor") and also approved the execution ofTermination Agreement by way of transfer of the remaining 30% stake from Club and itsnominee at an aggregate cash consideration of H 1000 (Rupees One Thousand Only) asper terms of the Termination Agreement. The shareholding of Quess in QEBFC increased fromthe existing 70% to 100% thereby making QEBFC a wholly-owned subsidiary of the Company.
The Board of Directors at its meeting held on 28 July 2020 approved theVoluntary Liquidation of Quess East Bengal FC Private Limited a wholly-owned subsidiaryof the Company under Regulation 59 of the Insolvency and Bankruptcy Code 2016 andInsolvency and Bankruptcy Board of India (Voluntary Liquidation Process) Regulation 2017.
The Board of Directors at its meeting held on 17 August 2020 approved thedisinvestment of the Company's 100% equity stake in Dependo Logistics Solutions PrivateLimited a wholly-owned subsidiary of the Company at a consideration of H 100000000/-(Rupees Ten Crore Only) to Altruist Technologies Pvt. Ltd.
During the year the Company has invested US$ 4.75 million into Quess Corp (USA)Inc. a wholly-owned subsidiary by way of infusion of fresh funds against equity.
Pursuant to Clause 10.4.2 of the Shareholders Agreement dated 20 November 2017entered between Tata Sons Private Limited Conneqt Business Solutions Limited and QuessCorp Limited the Company had received Put Option Exercise Notice dated 24 December 2020to complete the purchase of 44839166 Put Shares from Tata Sons Private Limited. TheBoard in its meeting held on 27 January 2021 delegated powers to Administration andInvestment Committee to take all necessary steps to complete the purchase of the aforesaidshares. On 16 April 2021 the acquisition of 30% equity stake in Conneqt was completed.
The Board of Directors at its meeting held on
27 January 2021 approved the additional investment of 3.76% equity shares in VedangCellular Services Private Limited ("Vedang") in accordance with theShareholder's Agreement dated 25 October 2017 against the put option exercised by Mr.Ashish Kapoor Promoter & CEO of Vedang for 6853 equity shares at an aggregateconsideration of H 7000000 (Rupees Seventy Lakhs Only) thereby increasing the Company'sstake in Vedang from 88.71% to 92.47%.
The Board of Directors at their meeting held on 27 January 2021 accordedits in-principal approval for the subscription of 49% equity shares over multiple tranchesin Stellarslog Technovation Pvt. Ltd. ("TaskMo") a gig economy start-upfor H 100000000 (Rupees Ten Crore Only) to be invested in multiple tranches. TheCompany has invested H 20000000 (Rupees Two Crore Only) thereby acquiring 38431 equityshares i.e. 16.12% in TaskMo.
The Company had filed an application before the Regional Director South-Eastregion Hyderabad for approval of the Scheme of Amalgamation ("Scheme")with four of its wholly owned subsidiaries viz. Golden Star Facilities and ServicesPrivate Limited MFX Infotech Private Limited Trimax Smart Infraprojects Private Limitedand Green Piece Landscape India Private Limited under Section 233 of the Companies Act2013 and rules made thereunder. On 19 March 2021 the Regional Director had rejected theScheme vide Order no. 3/Kar/CP.No.25/RD(SER)/ CAA-11/233/2020 on a technical ground of notsecuring approval of the shareholders at a General Meeting holding at least 90% of totalnumber of shares. The Company considered a new Scheme of Amalgamation with itswholly-owned subsidiaries through the Tribunal route on 3 June 2021.
9. Particulars of Loans Guarantees or Investments:
Details of the loans corporate guarantees and investments covered under Section 186 ofthe Act forms part of the notes to the Financial Statements provided in this AnnualReport.
10. Management Discussion & Analysis:
Pursuant to Regulation 34 of the Listing Regulations the Management Discussion andAnalysis Report for the year under review is presented in a separate section forming apart of the Annual Report.
11. Directors and Key Managerial Personnel (KMPs):
(a) Director retiring by rotation
In accordance with the provisions of Section 152 of the Act read with rules madethereunder and the Articles of Association of the Company Mr. Gopalakrishnan Soundarajan(DIN: 05242795) is liable to retire by rotation at the ensuing AGM and being eligiblehas offered himself for re-appointment. A resolution seeking shareholders' approval forhis re-appointment forms part of the Notice.
(b) Appointment of Directors and KMPs
The Board approved the appointment of Mr. Gopalakrishnan Soundarajan (DIN:05242795) as an Additional Director of the Company with effect from 1 April 2020on the recommendation of the NRC with the approval of shareholders accorded in the 13thAGM held on 29 September 2020.
The Board on the recommendation of NRC at its meeting held on 31 August 2020proposed the re-appointment of Ms. Revathy Ashok (DIN: 00057539) and Mr. SanjayAnandaram (DIN: 00579785) as Non-executive Independent Directors with the approval ofshareholders accorded in the 13th AGM held on 29 September 2020 for a secondterm/tenure of 5 (five) consecutive years in accordance with the provisions of Section149(10) of the Companies Act and the Listing Regulations.
The Board on the recommendation of NRC at its meeting held on 31 August 2020 approvedthe appointment of Mr. K. R. Girish (DIN: 07178890) and Mr. Gaurav Mathur (DIN: 00016492)as Additional Directors in the capacity of Non-Executive Independent Director with theapproval of shareholders accorded in the 13th AGM held on 29 September2020 for a term of 5(five) years.
The Board on the recommendation of NRC approved the re-designation of Mr. Ajit Isaac(DIN: 00087168) who currently holds the position of "Chairman & ManagingDirector" as "Executive Chairman" with effect from 1 April 2021subject to the approval of the shareholders at the ensuing AGM. At the same meeting itapproved the elevation of Mr. K. Suraj Moraje (DIN: 08594844) who currently holds theposition of "Executive Director and Group CEO" to "Managing Director andGroup CEO" with effect from 1 April 2021 till the end of his current term subject tothe approval of the shareholders at the ensuing AGM. A resolution seeking shareholders'approval for their change in designation along with increase in remuneration forms part ofthe Notice.
(c) Retirement of Directors
The Board on the recommendation of NRC at its meeting held on 31 August 2020 notedthe retirement/expiry of the terms of Mr. Pravir Kumar Vohra (DIN: 00082545) and Mr.Pratip Chaudhuri (DIN: 00915201) Non-Executive Independent Directors of the Company fromthe conclusion of 13th AGM held on 29 September 2020.
(d) Appointment and Resignation of KMP -
The Board on the recommendation of NRC and Audit Committee noted the resignation ofMr. Subramanian Ramakrishnan from the post of Group Chief Financial Officer of the Companyw.e.f. the closing of the business hours on 31 March 2021. Mr. Ramakrishnan will continuewith the Company as an Advisor for the next 12 months. The Board approved the appointmentof Mr. N. Ravi Vishwanath as Group Chief Financial Officer of the Company with effect from1 April 2021.
(e) Declaration of Independence
The Company has received declarations from the Independent Directors that they meet thecriteria of independence as prescribed under Section 149(6) of the Act along with rulesframed thereunder and Regulation 16(1)(b) and 25 of the Listing Regulations. There hasbeen no change in the circumstances affecting their status as Independent Directors of theCompany.
During the year under review the Non-Executive Directors of the Company had nopecuniary relationship or transactions with the Company other than sitting feescommission if any and reimbursement of expenses incurred by them for the purpose ofattending meetings of the Board/ Committees of the Company.
None of the Directors of the Company is disqualified for being appointed as Directorsas specified in Section 164(2) of the Act and Rule 14(1) of the Companies (Appointment andQualification of Directors) Rules 2014.
12. Directors' Responsibility Statement:
Pursuant to Section 134(3)(c) of the Act the Board of Directors to the best of theirknowledge and information and explanations received from the Company confirm that:
a) in the preparation of the accounts for the year ended 31 March 2021 theapplicable accounting standards have been followed and there are no material departuresfrom the same; b) they have selected such accounting policies and applied themconsistently and made judgments and estimates that were reasonable and prudent so as togive a true and fair view of the state of affairs of the Company as at 31 March2021 and of the loss of the Company for the year under review;
c) they have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;
d) they have prepared annual accounts of the Company on a going concern' basis;
e) they have laid down internal financial controls to be followed by the Company andthat such internal financial controls are adequate and were operating effectively; and
f) they have devised proper systems to ensure compliance with the provision of allapplicable laws and that such systems were adequate and operating effectively.
13. Annual Board Evaluation and Familiarization Programme for Board members:
The Board of Directors and the NRC have carried out an annual evaluation of its ownperformance the performance of its Committees and Individual Directors of the Companyincluding the Chairman of the Board pursuant to the provisions of the Act and the ListingRegulations on 1 June 2021. The performance as a whole was evaluated by the Board afterseeking input from all the Directors based on the criteria such as the Board compositionand structure meetings and procedures effectiveness of Board processes information andfunctioning etc. The performance of the Committees was evaluated by the Board afterseeking inputs from the Committee members based on the criteria such as the composition ofCommittees effectiveness of Committee meetings etc.
The above criteria are based on the Guidance Note on Board Evaluation issued by theSecurities and Exchange Board of India on 5 January 2017.
The Nomination and Remuneration Committee reviewed the performance of IndividualDirectors on the basis of criteria such as the contribution of the individual director tothe Board and Committee meetings in terms of preparedness on the issues to be discussedmeaningful and constructive contribution and inputs in meetings etc. At the Board Meetingthat followed the meeting of the Independent Directors and meeting of Nomination andRemuneration Committee the performance of the Board its Committees and individualDirectors was also discussed. Performance evaluation of Independent Directors was done bythe entire Board excluding the Independent Director being evaluated.
In a separate meeting of Independent Directors the performance of Non-IndependentDirectors the Board as a whole and the Chairman of the Company were evaluated takinginto account the views of Executive Directors and Non-Executive Directors.
The familiarization programme aims to provide insight to the Independent Directors tounderstand the business of the Company its stakeholders leadership team seniormanagement operations policies and industry perspective and issues. The IndependentDirectors are made aware of their roles rights and responsibilities at the time of theirappointment/re-appointment through a formal letter of appointment. A familiarizationprogramme for all the Independent Directors was held on 2 November 2020.
A note on the Familiarisation programme adopted by the Company for orientation andtraining of the Directors and the Board evaluation process undertaken in compliance withthe provisions of the Companies Act 2013 and the Listing Regulations is referred herewithis made available on the Company's official website at https://www.quesscorp.com/investor/dist/images/pdf/Policies/Directors_Familiarization_Programme.pdf
14. Business Responsibility Report & Sustainability Report:
As stipulated under Regulation 34 of the Listing Regulations the BusinessResponsibility Report & Sustainability Report describing the initiatives taken by theCompany from environmental social and governance perspective forms a part of the AnnualReport as Annexure A'.
15. Audit & Auditors:
(a) Statutory Auditors -
Pursuant to the provisions of Section 139 of the Act and the rules framed thereunderM/s. Deloitte Haskins & Sells LLP Chartered Accountants (Firm Registration No.117366W/W - 100018) were appointed as Statutory Auditors of the Company at the 11thAGM held on 26 July 2018 to hold office from the conclusion of the 11th AGMtill the conclusion of the 16th AGM. However as per the Companies (Amendment)Act 2017 effective from 7 May 2018 the provisions relating to the ratification of theappointment of Statutory Auditors at every AGM are not required.
The Board has duly examined the Statutory Auditors' Report to the financial statementswhich is self-explanatory. Clarifications wherever necessary have been included in thenotes to the financial statements section of the Annual Report. The Auditors report forFY21 does not contain any qualification reservation or adverse remark for the year underreview. The Auditors Report is enclosed with the financial statements in this AnnualReport. During the year under review the Auditors have not reported to the AuditCommittee any instances of fraud committed against the Company by its officers oremployees under Section 143(12) of the Act and therefore no details are required to bedisclosed under Section 134(3) (ca) of the Act.
Further pursuant to Listing Regulations Audit Committee had a separate meeting withthe Statutory Auditors on 6 January 2021.
The Auditor's certificate on the implementation of share based schemes in accordancewith SEBI (Share Based Employee Benefits) Regulations 2014 will be made available at theAGM electronically.
(b) Secretarial Auditors -
Pursuant to Section 204 of the Act read with the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 the Board at its meeting held on 27January 2021 had approved the appointment of Mr. S.N. Mishra proprietor of M/s. SNM &Associates Practicing Company Secretary (C.P. No. 4684) as the Secretarial Auditor toundertake the Secretarial Audit of the Company for the FY21. The Company had also receivedwritten consent from Mr. S. N. Mishra to act as such.
The Secretarial Audit Report for FY21 is annexed as Annexure B' andforms an integral part of this report.
The Secretarial Audit Report does not contain any qualification reservationdisclaimer or adverse remark for the year under review. During the year under review theAuditors have not reported to the Audit Committee any instances of fraud committed againstthe Company by its officers or employees under Section 143(12) of the Act and therefore nodetails are required to be disclosed under Section 134(3)(ca) of the Act.
Further as per the amended Regulation 24A vide Securities and Exchange Board of India(Listing Obligations and Disclosure Requirements) (Second Amendment) Regulations 2021the Secretarial Audit Report of Conneqt being a material subsidiary is annexed as Annexure C'
Pursuant to Regulation 24A of the Listing Regulations a Secretarial Compliance Reportfor the financial year ended 31 March 2021 is annexed as Annexure D'
(c) Internal Auditors
The Board on the recommendation of the Audit Committee in its meeting held on 27 May2020 had approved the appointment of M/s. Ernst & Young as the Internal Auditors ofthe Company for FY21 to conduct the audit on basis of a detailed internal audit plan whichis reviewed each year in consultation with the Internal Audit Team and the AuditCommittee. On a quarterly basis also Internal Auditors give presentations and provide areport to the Audit Committee of the Company.
The Board on the recommendation of the Audit Committee has re-appointed M/s. Ernst& Young as the Internal Auditors for the FY21.
(d) Cost Audit -
Maintenance of cost records as specified by the Central Government under sub-section(1) of section 148 of the Act is not required by the Company and accordingly suchaccounts and records are not made and maintained.
16. Risk Management:
The Board of the Company has adopted the Risk Management Policy in order to assessmonitor and manage risk throughout the Company. The Audit Committee has additionaloversight in the area of financial risks and controls. The major risks identified by thebusinesses and functions are systematically addressed through mitigating actions on acontinuing basis. The development and implementation of the Risk Management Policy havebeen covered in the Management Discussion and Analysis which forms part of this report.Risk is an integral part of the Company's business and sound risk management is criticalto the success of the organization. The Risk Management policy as approved by the Boardis displayed on the official website of the Company and can be accessed using the link https://www.quesscorp.com/investor/dist/images/pdf/Policies/Risk-Management-Policy.pdf
17. Internal Financial Control Systems and Their Adequacy:
Internal Financial Controls are an integrated part of the risk management process whichin turn is a part of Corporate Governance addressing financial and financial reportingrisks. The Board has adopted policies and procedures for ensuring the orderly andefficient conduct of its business including adherence to the Company's policiessafeguarding of its assets prevention and detection of fraud error reporting mechanismsaccuracy and completeness of the accounting records and timely preparation of reliablefinancial disclosures. The Company has established a strong framework for internalfinancial controls. During the year such controls were assessed and no reportablematerial weaknesses in the design or operation were observed. Accordingly the Board is ofthe opinion that the Company's internal financial controls were adequate and effectiveduring FY21 and their adequacy are included in the Management Discussion and Analysiswhich forms part of this Report.
18. Related Party Transactions:
All Related Party Transactions entered during the FY21 were on an arm's length basisand in the ordinary course of business. There were no material significant Related PartyTransactions entered by the Company during the year that required shareholders' approvalunder Regulation 23 of the Listing Regulations. Prior omnibus approval from the AuditCommittee is obtained for transactions which are repetitive in nature. The Audit Committeereviews all transactions entered into pursuant to the omnibus approvals so granted on aquarterly basis. Pursuant to Regulation 23(9) of the Listing Regulations the Company hasfiled the reports on related party transactions with the Stock Exchanges(s).
None of the transactions with related parties fall under the scope of Section 188(1) ofthe Act. The information on transactions with related parties pursuant to Section 134(3)(h)of the Act read with Rule 8(2) of the Companies (Accounts) Rules 2014 are given inAnnexure E' in Form AOC-2 and the same forms part of this report.
The Company has adopted a policy for dealing with Related Party Transactions and ismade available on the Company's website at https://www.quesscorp.com/investor/dist/images/pdf/Governance/Policy-on-Criterial-for-determining-RPT.pdf
19. Nomination and Remuneration Committee and Company's Policy on NominationRemuneration Board Diversity Evaluation and Succession:
(a) Policy on Directors Appointment and Remuneration
In compliance with the provisions of Section 178(3) of the Act and Regulation 19 of theListing Regulations the Board on the recommendation of the NRC has approved the criteriafor determining qualifications positive attributes and independence of Directors interms of other applicable provisions of the Act and the rules made thereunder both inrespect of Independent Directors and other Directors as applicable. The Board has adopteda policy which provides for the appointment of Directors viz. educational andprofessional background general understanding of the Company's business dynamics globalbusiness and social perspective personal achievements and Board diversity removal andremuneration of Directors Key Managerial Personnel ("KMP") and SeniorManagement Personnel and also on succession planning and evaluation of Directors. Thepolicy on remuneration can be accessed at web link -https://www.quesscorp.com/investor/dist/images/pdf/Policies/Nomination-and-Remuneration-Policy.pdf
(b) Board Diversity
The Company believes that building a diverse and inclusive culture is integral to itssuccess. A diverse Board will leverage differences in thought perspective knowledge andindustry experience to help us retain our competitive strength. The Company has evaluatedthe policy with a purpose to ensure adequate diversity in its Board of Directors whichenables them to function efficiently and foster differentiated thought processes at theback of varied industrial and management expertise. The Board recognizes the importance ofdiverse composition and has therefore adopted a Board Diversity Policy. The policy is madeavailable on the Company's website which can be accessed at web link -https://www.quesscorp.com/investor/dist/images/pdf/Governance/Policy-on-Board-Diversity.pdf
20. Employee Stock Option Plan ("ESOP")/ Restricted Stock Units("RSUs"):
The Company grants share-based benefits to eligible employees with a view to attractingand retaining the best talent encouraging employees to align individual performances withCompany objectives and promoting increased participation by them in the growth of theCompany. The Company has instituted employee stock option schemes namely-
(1) Quess Corp Limited Employees' Amended Stock Option Scheme 2009 (ESOP 2009);
(2) Quess Corp Limited - Employees' Stock Option Scheme 2015 (ESOP 2015); and
(3) Quess Stock Ownership Plan-2020 (QSOP 2020).
(1) Quess Corp Limited Employee Stock Option Scheme 2009 (ESOP 2009)
During the year under review total 97485 options were exercised by eligible employeesand ex-employees.
(2) Quess Corp Limited - Employees' Stock Option Scheme 2015 (ESOP 2015) -
The Company had implemented the Employees' Stock Option Scheme 2015 ("ESOP2015") for 1900000 options equivalent to the same number of shares with theapproval of the shareholders and out of 1900000 options 148440 options were alreadygranted and will be vested under the Scheme. Thereafter the Board on the recommendationof NRC at its meeting held on 18 February 2020 proposed to further amend ESOP 2015 withthe approval of Shareholders by way of postal ballot dated 31 March 2020 by way ofre-deployment of the balance 1751560 options and equity shares under the ESOP 2015 toQSOP 2020. Total number of options left under ESOP 2015 to be exercised was 148440options.
During the year under review total 70685 options were exercised by the eligibleemployees and ex-employees. As on 31 March 2021 a balance of 68199 options wereoutstanding which constitute 0.05% of the issued equity share capital of the Company.
(3) Quess Stock Ownership Plan-2020 (QSOP 2020) -
Grant of Options under QSOP 2020:
On 11 May 2020 NRC approved the grant of 2629795 RSUs at a face value of H 10per RSU to the eligible employees which shall vest not earlier than 1 (One) year and notlater than 6 (Six) years from the date of grant of RSUs based on performance parametersand terms and conditions of QSOP 2020. Further on
24 July 2020 and 27 January 2021 it approved the grant of 74141 and 154290 RSUsrespectively.
Each RSU is convertible into 1 equity share of H 10 each upon vesting subjectto compliance of SEBI (Share Based Employee Benefits) Regulations 2014 as amended fromtime to time terms and conditions of QSOP 2020 and grant letter.
The aforesaid RSUs can be exercised within 3 years from the date of vesting interms of QSOP 2020.
A detailed disclosure with respect to stock options as required under Regulation 14 ofthe SEBI (Share Based Employee Benefits) Regulations 2014 and SEBI Circular dated 16 June2015 has been uploaded on the official website of the Company at -https://www.quesscorp.com/ investor-other-information/
The Company's Statutory Auditors M/s. Deloitte and Haskins LLP have certified thatthe aforementioned employee stock option plans of the Company have been implemented inaccordance with the regulations and the resolutions passed by the members in this regard.
21. Particulars of Employees:
The Company is required to give disclosures under Section 197(12) of the Actread with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014 which is annexed as Annexure F' and forms an integralpart of this Report.
The statement containing the top 10 employees on roll and particulars of employeesemployed throughout the year whose remuneration is more than H 10.20 million or more perannum and employees employed part-time and in receipt of remuneration of H 0.85 million ormore per month as required under Rule 5(2) of the Companies (Appointment and Remunerationof Managerial Personnel) Rules 2014 forms an integral part of this Report. However thesame is not being sent along with this Annual Report to the members of the Company in linewith the provision of Section 136 of the Act. Members who are interested in obtainingthese particulars may write to the Company Secretary at the Registered Office of theCompany. The aforesaid annexure is also available for inspection by the Members at theRegistered Office of the Company 21 days before and up to the date of the ensuing AGMduring the business hours on working days.
22. Corporate Governance:
A detailed report on Corporate Governance pursuant to the requirements of Regulation34 of the Listing Regulations forms part of the Annual Report. A certificate from Mr.S. N. Mishra Practicing Company Secretary Bengaluru confirming compliance to conditionsof Corporate Governance as stipulated under the Listing Regulations is annexed to theCorporate Governance Report. A statement containing additional information as requiredunder Clause IV of Section II of Part II of Schedule V of the Companies Act 2013 isprovided in the Report on Corporate Governance which forms part of this Annual Report.
23. Vigil Mechanism/ Whistle Blower Policy:
In compliance with Section 177(9) of the Act and Regulation 22 of the ListingRegulations the Company has a Whistle Blower Policy and has established the necessaryvigil mechanism for Directors and employees in confirmation with the above laws to reportconcerns about unethical behaviour. The details of the Policy have been disclosed in theCorporate Governance Report which is a part of this report and is also available on thewebsite of the Company https://www.quesscorp.com/investor/dist/images/pdf/Governance/Whistle-BlowerPolicy.pdf
24. Conservation of Energy Technology Absorption Foreign Exchange Earnings and Outgounder Section 134(3)(m) of the Act:
The provisions of Section 134(3)(m) of the Act read with Rule 8(3) of the Companies(Accounts) Rules 2014 relating to conservation of energy and technology absorption do notapply to the Company. The Company is a pioneer in workforce management technologies andhas used information technology extensively in its operations.
The details of Foreign exchange earnings and outgo are given below:
| Expenditure in foreign currency: ||H 30.30 million |
| Earnings in foreign currency: ||H 108.20 million |
25. Corporate Social Responsibility ("CSR"):
The Company believes in building and maintaining a sustainable societal value inspiredby a noteworthy vision to actively participate contribute and impact not just individuallives but create a difference on a social level as well. The CSR initiatives are primarilycarried out through the Careworks Foundation (CWF) a non-profit initiative established inJanuary 2014. The consolidated contribution of the Company towards various CSR activitiesduring the financial year 2020-21 is H 42.2 million.
CSR spending is guided by the vision of creating long-term benefit to Society.
In compliance with Section 135 of the Act read with the Companies (Corporate SocialResponsibility Policy) Rules 2014 the Company has established the CSR Committee.
The Board has adopted the CSR Policy as formulated and recommended by the CSRCommittee and is available on the Company's website at https://www.quesscorp.com/investor/ dist/images/pdf/Policies/CSR-Policy.pdf
The disclosure of contents of CSR policy pursuant to provisions of Section 134(3)(o) ofAct and Rule 9 of the Companies (Corporate Social Responsibility) Rules 2014 is annexedherewith as Annexure G' to the Board's Report.
26. Secretarial Standards:
Pursuant to the provisions of Section 118 of the Act the Company has complied with theapplicable provisions of the Secretarial Standards issued by the Institute of CompanySecretaries of India ("ICSI") and notified by the Ministry of Corporate Affairs("MCA").
During the year under review the Company has neither invited nor accepted depositsfrom the public/members under Section 73 of the Act read with the Companies(Acceptance of Deposits) Rules 2014.
28. Details of significant and material orders passed by the Regulators or Courts orTribunals impacting the going concern status and Company operations in future:
There were no significant and material orders passed by the Regulators Courts orTribunals that would impact the going concern status of the Company's operation in thefuture.
During the year the Company had exercised the call option for redeeming in full theoutstanding 750 Secured Redeemable Non-Convertible Debentures having face value of H1000000
(Rupees Ten Lakhs) each aggregating to H 750000000 (Indian
Rupees Seventy Five Crore Only) held by ICICI Prudential Equity
& Debt Fund ICICI Prudential Balanced Advantage Fund ICICI Prudential Multi-AssetFund Debenture Holders on 22 January 2021 in pursuance of the applicableprovisions of the Listing Regulations in respect of the said listed Debentures.
As on 31 March 2021 the Company does not have any debentures.
30. Credit Rating:
In order to comply with Basel-II guidelines the Company has received credit ratingsfrom ICRA Limited with respect to the Company's long-term and short-term fund-basedlimits. As on 23 March 2021 ICRA has re-affirmed the credit ratings. Hence thereis no change in the credit rating during the year under review. The credit rating is[ICRA] A1+.
31. Number of Meetings of the Board:
The Board met seven (7) times during the year under review. The details of the meetingare provided in the Corporate Governance report that forms part of this Annual Report.
32. Extract of Annual Return:
In terms of Section 92(3) read with Section 134(3)(a) of the Act and Rule 12 of theCompanies (Management and Administration) Rules 2014 an extract of the annual return inthe prescribed format is available athttps://www.quesscorp.com/investor-other-information/.
33. Information Required Under Sexual Harassment of Women at Workplace (PreventionProhibition & Redressal) Act 2013:
The Company is committed to provide a safe and conducive work environment to itsemployees and has zero tolerance towards any actions which may fall under the ambit ofsexual harassment at the workplace. The Company has adopted a policy on preventionprohibition and redressal of sexual harassment at the workplace in line with theprovisions of the Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013 and the Rules thereunder. The Policy aims to promote a healthy workenvironment and to provide protection to employees at the workplace and redress complaintsof sexual harassment and related matters thereto. An Internal Complaints Committee knownas the Prevention of Sexual Harassment (POSH) Committee has been constituted to enquireinto complaints and to recommend appropriate action wherever required in compliance withthe provisions of the Act. Details of complaints pertaining to sexual harassment that wasfiled disposed of and pending during the financial year are provided in the Report onCorporate Governance which forms part of this Report.
34. Code of Conduct:
The Company has laid down a Code of Conduct for the Directors as well as for all seniormanagement of the Company. As prescribed under Regulation 17 of the Listing Regulations adeclaration signed by the Executive Director and Group CEO affirming compliance with theCode of Conduct by the Directors and senior management personnel of the Company for theFY21 forms part of the Corporate Governance Report.
35. Material changes and commitments affecting financial position between the end ofthe financial year and date of the report:
There have been no material changes and commitments which affect the financialposition of the Company that have occurred between the end of the financial year to whichthe financial statements relate and the date of this report.
The Company is committed to providing a secure IT environment across the varioussystems and infrastructure by establishing best practices and standards for CyberSecurity. Real time security information and event management systems are in place tocontinuously monitor and secure the network against identified and unidentified threats. Asecure access management system along with VAPT (Vulnerability Assessment and PenetrationTesting) for applications facilitates remote working of employees. The Company's CyberSecurity Council meets fortnightly to review and improve the effectiveness of the cybersecurity systems. Further periodic interactions of the Cyber Security Council withrelevant stakeholders has ensured sponsorship from senior management and all othercritical stakeholders.
Your Directors place on record their gratitude to the Central Government various StateGovernments and Company's Bankers and advisors for the valuable advice guidanceassistance co-operation and encouragement they have extended to the Company from time totime. The Directors also take this opportunity to thank the Company's customerssuppliers partners investors and all other Stakeholders Regulators and StockExchange(s) for their consistent support to the Company.
Last but not the least the Directors also sincerely acknowledge the significantcontributions made by all the employees especially during the COVID times for theircontinued & dedicated services to the Company.
38. Cautionary Statement:
The Board's Report and Management Discussion & Analysis may contain certainstatements describing the Company's objectives expectations or forecasts that appear tobe forward looking within the meaning of applicable securities laws and regulations whileactual outcomes may differ materially from what is expressed herein.
The Company is not obliged to update any such forward-looking statements. Someimportant factors that could influence the Company's operations include global anddomestic economic developments competitor's behaviour changes in Government Regulationstax laws and litigation.
| ||For and on behalf of the Board of |
| ||Directors of Quess Corp Limited |
| ||Sd/- |
| ||Ajit Isaac |
|Place: Bengaluru ||Executive Chairman |
|Date: 3 June 2021 ||DIN: 00087168 |