To the Shareholders
Your Directors have pleasure in presenting the Report on the businessand operations of the Company along with the Standalone and Consolidated Audited FinancialStatements for the year ended March 31 2021.
1. Financial Performance
The Standalone and Consolidated Financial Statements for the year endedMarch 31 2021 forming part of this Annual Report have been prepared in accordance withInd AS as summarized below:
Rs. in lakhs
| ||Consolidated for the year ended ||Standalone for the year ended |
|Particulars ||March 31 ||March 31 |
| ||2021 ||2020 ||2021 ||2020 |
|Revenue ||44483.52 ||49222.22 ||39245.74 ||41670.76 |
|Profit Before Interest Depreciation and Taxes ||13052.57 ||8808.07 ||12247.09 ||8709.21 |
|Provision for Depreciation ||1018.22 ||1115.87 ||919.92 ||993.91 |
|Earnings before Interest and Taxes ||12034.35 ||7692.20 ||11327.17 ||7715.30 |
|Interest ||46.77 ||70.50 ||47.19 ||62.49 |
|Other Income ||2961.67 ||3574.89 ||3334.04 ||3924.18 |
|Net Profit Before Tax ||14949.25 ||11196.59 ||14614.02 ||11576.99 |
|Exceptional Items ||- ||- ||2002.31 ||- |
|Provision for Tax ||3494.61 ||3313.84 ||3351.12 ||3345.93 |
|Net Profit After Tax ||11454.64 ||7882.75 ||9260.59 ||8231.06 |
|Other Comprehensive Income for the year ||(1036.49) ||(1972.27) ||1200.85 ||(2061.39) |
|Total Comprehensive Income for the year ||10418.15 ||5910.48 ||10461.44 ||6169.67 |
|Balance of Profit brought forward ||44871.81 ||65121.26 ||45370.37 ||65295.22 |
|Balance available for appropriation ||56326.45 ||73004.01 ||54630.96 ||73526.28 |
|Dividend (Interim & Final*) on equity shares ||(1501.62) ||(2029.21) ||(1505.09) ||(2035.82) |
|Dividend (Special) ||- ||(7508.34) ||- ||(7525.44) |
|Dividend tax ||- ||(1868.13) ||- ||(1868.13) |
|Buy back of shares ||- ||(15932.47) ||- ||(15932.47) |
|Transfer to Retained earnings ||144.05 ||(794.05) ||144.05 ||(794.05) |
|Surplus carried to Balance Sheet ||54968.88 ||44871.81 ||53269.92 ||45370.37 |
*Refer Note No. 15(h) given in Standalone Financial Statements.
On a consolidated basis your Company's revenues from operationfor FY 2020-21 have decreased by 9.6% in rupee terms from Rs. 49222.22 lakhs in FY2019-20 to Rs. 44483.52 lakhs in FY 2020-21. The net profits increased from Rs. 7882.75lakhs in FY 2019-20 to Rs. 11454.64 lakhs during the year an increase of 45.3%. This hastranslated to a Basic Earnings per Share of Rs. 76.26 in FY 2020-21 vs. Rs. 48.57 in FY2019-20.
2. Material changes and commitments affecting the financialposition of the Company
There have been no material changes and commitments if any affectingthe financial position of your Company which have occurred between the end of financialyear of the Company to which the Financial Statements relate and date of this Report.
Your Directors are pleased to recommend a final dividend of Rs. 15 perequity share of Rs. 10 each for the year under review. During the year your Companydeclared an interim dividend of Rs. 10 per equity share in October 2020. This aggregatesto a total dividend of Rs. 25 per equity share.
A note on transfer of shares and unclaimed dividends to InvestorEducation and Protection Fund has been stated in the General Shareholder Informationforming part of this Annual Report.
4. Business Outlook Economic & Regulatory scenario andOpportunities
Sasken has tech in its DNA and has been a pioneer in the Indian ITenabled Service (ITeS) landscape. This strong mooring in technology has made us aresilient organisation. In the current financial year we drew upon our ability to managechange to successfully navigate the unprecedented uncertainties precipitated by the globalpandemic. Our goal has been to ensure business continuity while protecting the interest ofall our stakeholders.
The bear grip of the pandemic has forced people to reimagine andreinvent the way we conduct ourselves socially and professionally. Commerce across allspheres and services to manufacturing has had to embrace change faster than ever beforeand use technology as a launchpad for business continuity.
The pandemic has impacted and decelerated the rate of business growthacross most of the verticals. While the impacts have been relative and varied acrosssegments the first half of the fiscal year 2021 saw the brunt of the uncertainty withbusiness demand being soft. During this period across all segments customers werecommitted to ongoing programs and deferred investments in creating newer products andservices. In the second half of the financial year 2021 in some sectors there have beenthe green shoots of recovery and hence a readiness to reengage especially when it comes tonew product development. While remedial measures to combat the COVID 19 virus such asvaccines and better preventive measures are in place the second wave of the pandemic hassomewhat increased the uncertainty in the business environment.
We take pride in the concerted efforts that we have put in place toestablish a cross functional team who tirelessly worked to ensure business continuity.Within a matter of four weeks from the announcement of a total lockdown over 98% of ourworkforce was digitally & securely enabled to Work from Anywhere. We put in placemechanisms to support employees as they continued to engage in programs critical for ourcustomers seamlessly from safe working environments of their choice without compromisingthe security and confidentiality of the customers data. All necessary support forcomputing & secure connectivity were established by a dedicated support team.Communication channels and timely digital interventions were put in place to ensure thepsychological well-being and productivity of employees. The net result of these effortswas that our customers were delighted by our ability to keep its business as usual despitethe adversities.
Your Directors are of the opinion that while business will recoverthere will be residual uncertainty in the short term. In response to the VolatileUncertain Complex and Ambiguous (VUCA) environment your Company continues to strengthenits resolve to deliver on its obligations to all stakeholders to the best of its ability.This resolve is backed by prudent investments in people processes and digitalinfrastructure.
Please refer to Management Discussion and Analysis Report and theTechnology and Markets section forming part of this Report for further details on thissegment.
5. Share Capital
The present authorized share capital of your Company stands at Rs.550000000 comprising of 55000000 equity shares of face value of Rs. 10 each.
There is no change in the issued subscribed and paidup capitalof the Company in this financial year and it stands at 15050871 equity shares of Rs. 10each as at March 31 2021.
Details of the amount to be carried to reserve are forming part of thefinancial statements.
6. Employees Stock Option Scheme
The requirements specified under Regulation 14 of the SEBI (Share BasedEmployee Benefits) Regulations 2014 are available on the Company's websitewww.sasken.com/investors.
No new options were granted during the year.
Your Company has neither accepted nor renewed any deposit during theyear. As such no amount of principal and / or interest is outstanding as on the BalanceSheet date.
8. Particulars of Loans Guarantees or Investments
Details of Loans Guarantees and Investments covered under theprovisions of Section 186 of the Companies Act 2013 (the Act) are given in the notes tothe Financial Statements.
9. Energy Conservation Technology Absorption and ForeignExchange earnings and outgo
The information on conservation of energy technology absorption andforeign exchange earnings and outgo stipulated under Section 134(3)(m) of the Act readwith Rule 8 of the Companies (Accounts) Rules 2014 is annexed herewith as Annexure A.
10. Risk Management Policy Internal Control Systems and their adequacy
The pandemic has brought to the forefront the need to have robustmethodologies to identify assess monitor and mitigate risks at the level of entity andenterprise. Our risk management framework has stood the rigorous test of measuring up toensuring business continuity employee management and being responsive to otherstakeholders despite the most unforeseen circumstances.
The management of your Company was proactive and constituted across-functional Committee internally named as the Emergency Response Team (ERT). Being aproduct engineering and digital services Company our customer engagement model is largelydriven by setting up secure ODCs (Offshore Development Centre) within Sasken offices. Eachof these ODCs has its own network and security control processes ensuring highest levelof IP security for the customer. Ensuring these ODCs were fully functional as well asenabling the seamless execution of the Work from Anywhere model has been the significantcontribution of this task force. The investments we have made over several years inestablishing vigorous project management methodologies underlying information technology& security systems made it possible to achieve business continuity without anydisruption.
Your Company continues the best practises of risk management bysystematically identifying businesses functions & environmental risks on a continuingbasis. These are also discussed in the meetings of the Audit Committee and the Board ofyour Company.
Your Company's internal control systems are commensurate with thenature of its business and the size and complexity of its operations. These are routinelytested by Statutory as well as Internal Auditors. Significant audit observations andactions taken thereon are reported to the Audit Committee.
The key business risks identified by your Company and mitigation plansare detailed in the Management Discussion and Analysis Report.
11. Corporate Social Responsibility
Your Company has in place a Corporate Social Responsibility (CSR)Committee in accordance with Section 135 of the Act. The details of the CSR Policy and theAnnual Report on CSR activities as prescribed under the Act and Companies (CorporateSocial Responsibility Policy) Rules 2014 is annexed herewith as Annexure B.
CSR activities are carried out either directly or through SaskenFoundation which is exclusively set up for this purpose.
The focus of our CSR program in this year was mainly driven on aidingHospitals and NGOs who were engaged in COVID related relief. Your Company also continuedits focus on women empowerment educating children and conserving the rich & diverseart heritage of our nation.
A detailed and comprehensive coverage of our sustainability andCorporate Social Responsibility initiatives is provided at www.sasken.com/sustainabilityand detailed in the Annual Report.
12. Vigil Mechanism / Whistle Blower Policy
Your Company has adopted a Whistle Blower Policy and has establishedVigil Mechanism in line with the requirements under the Act and SEBI (Listing Obligationsand Disclosure Requirements) Regulations 2015 (Listing Regulations) for the employees andother stakeholders to report concerns about unethical behaviour actual or suspected fraudor violation of the Code. The Whistle Blower Policy is available atwww.sasken.com/investors.
During the year your Company has not received any complaints under thesaid mechanism.
13. Sexual Harassment Redressal Committee
Your Company has complied with the applicable provisions relating tothe constitution of Internal Complaints Committee under the Sexual Harassment of Women atWorkplace (Prevention Prohibition and Redressal) Act 2013 details of which is providedunder the Corporate Governance Report forming part of this Report.
Independent Directors have given declarations that they meet thecriteria of independence as laid down under Section 149(6) of the Act and Regulation16(1)(b) of the Listing Regulations.
Ms. Madhu Khatri (DIN: 00480442) was co-opted as an Additional Directoron March 27 2020 by the Board as a Non-Executive Woman Independent Director andshareholders approved the appointment at the 32nd AGM of the Company held onJuly 29 2020.
Mr. Sunirmal Talukdar (DIN: 00920608) was appointed as an IndependentDirector at the AGM held on July 20 2016 for a term of up to 5 years effective from thedate of meeting. The term of aforesaid appointment is expiring and Board has recommendedto the shareholders for his re-appointment for another term of up to five years at theforthcoming AGM.
Dr. G. Venkatesh (DIN: 00092085) is a Non-executive Director of theCompany at present. A proposal for his appointment as an Independent Director is beingplaced before the shareholders for approval.
In accordance with the provisions of the Act and in terms of theArticles of Association of the Company Ms. Neeta S. Revankar (DIN: 00145580) is liable toretire by rotation at the forthcoming AGM and being eligible offer herself forre-appointment.
A detailed note profile and explanatory statement for the aforesaidappointment re-appointment and retirement by rotation is provided in the Notice of the 33rdAGM.
14.1. Board Evaluation
Pursuant to the provisions of the Act and Regulation 17 of the ListingRegulations the Board has carried out an annual performance evaluation of its ownperformance the directors individually and its Committees.
The Nomination & Remuneration Committee has laid down theevaluation framework for assessing the performance of Directors comprising of thefollowing key areas:
Attendance in meetings of the Board and its Committees.
Quality of contribution to Board deliberations.
Strategic perspectives or inputs regarding future growth ofCompany and its performance.
Providing perspectives and feedback going beyond informationprovided by the management.
Commitment to shareholder and other stakeholder interests.
14.2. Board independence
Definition of Independent Director' is referred in Section149(6) of the Act and Regulation 16(1)(b) of the Listing Regulations. Based on theconfirmation / disclosures received from the Directors and on evaluation of therelationships disclosed the following Directors are Independent:
Mr. Bharat V. Patel
Ms. Madhu Khatri
Mr. Sanjay M. Shah
Mr. Sunirmal Talukdar
14.3. Nomination & Remuneration Policy The said policy and thecomposition of the Nomination & Remuneration Committee have been stated in theCorporate Governance Report.
14.4. Meetings of the Board and its Committees
The details of
(a) the meetings of the Board and its Committees held during the year;and
(b) composition and terms of reference of the Committees are detailedin the Corporate Governance Report.
14.5. Code of conduct
The Board has approved a Business Code of Conduct (Code) which isapplicable to the Members of the Board and insiders. The Code has been posted on theCompany's website www.sasken.com/investors and intranet. The Code lays down thestandard of conduct which is expected to be followed by the insiders in their businessdealings and in particular on matters relating to integrity in the workplace in businesspractices and in dealing with stakeholders.
The Board Members and the Senior Management personnel have confirmedcompliance with the Code.
15. Directors' Responsibility Statement
To the best of our knowledge and belief and according to theinformation and explanations obtained your Directors make the following statements interms of Section 134(3)(c) of the Act that:
in the preparation of the annual accounts the applicableaccounting standards have been followed along with proper explanation relating to materialdepartures;
accounting policies have been selected and applied consistentlyand judgments and estimates have been made that are reasonable and prudent so as to give atrue and fair view of the state of affairs of the Company as at March 31 2021 and of theprofit of the Company for the year ended March 31 2021;
proper and sufficient care has been taken for the maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguardingthe assets of the Company and for preventing and detecting fraud and otherirregularities; the annual accounts have been prepared on a going concern basis;
proper internal financial controls to be followed by theCompany were in place and that such internal financial controls were adequate and wereoperating effectively with no material defects; and
systems to ensure compliance with the provisions of allapplicable laws and Secretarial Standards were in place adequate and operatingeffectively.
16. Subsidiary Companies & Joint Ventures
There has been no change in the nature of business of the subsidiariesduring the year under review. In accordance with Section 129(3) of the Act your Companyhas prepared a Consolidated Financial Statements of the Company and all its subsidiarycompanies which is forming part of the Annual Report. The Consolidated FinancialStatements also reflects the contribution of subsidiary companies to the overallperformance of the Company. A statement containing salient features of FinancialStatements of the subsidiary companies is also included in the Annual Report.
Due to pandemic the process for closure of two of the wholly ownedsubsidiaries viz. Sasken Communication Technologies (Shanghai) Co. Ltd. and SaskenCommunication Technologies Mexico S.A. de C.V. has been delayed.
In accordance with third proviso of Section 136(1) of the Act theAnnual Report of the Company containing therein its Standalone and Consolidated FinancialStatements have been placed on the Company's website www.sasken.com/investors.Further as per fourth proviso of the said section audited annual accounts of each of thesubsidiary companies have also been placed on the Company's websitewww.sasken.com/investors. Shareholders interested in obtaining a copy of the auditedannual accounts of the subsidiary companies may write to the Company Secretary at theCompany's registered office address.
The Audit Committee reviews the Consolidated Financial Statements ofthe Company and the investments made by its unlisted subsidiary companies. The minutes ofthe Audit Committee meetings along with a report on significant developments of theunlisted subsidiary companies are periodically placed before the Board.
Your Company does not have any material unlisted Indian subsidiarycompanies. The policy for determining material subsidiaries' has been disclosedon Company's website www.sasken.com/investors.
17.1. Statutory Auditors and Statutory Auditors' Report
As per the provisions of Section 139 of the Act M/s. MSKA &Associates Chartered Accountants (ICAI Firm Registration No. 105047W) were appointed asStatutory Auditors of your Company at the 32nd AGM held on July 29 2020 tohold office until the conclusion of the 33rd AGM in the casual vacancy causedby the resignation of M/s. B S R & Associates LLP Chartered Accountants (ICAI FirmRegistration No. 116231 W/W - 100024).
M/s. MSKA & Associates have consented to act as statutory auditorsof the Company for a period of up to 5 years commencing from 33rd AGM up to 38thAGM of the Company and given a certificate in accordance with Sections 139 141 and otherapplicable provisions of the Act to the effect that their appointment if made shall bein accordance with the conditions prescribed and that they are eligible to hold office asStatutory Auditors of the Company. As required under Regulation 33 of the ListingRegulations Statutory Auditors have confirmed that they hold a valid certificate issuedby the Peer Review Board of the Institute of Chartered Accountants of India.
Necessary resolution and explanatory statement thereto have beenprovided in the AGM notice seeking approval of shareholders. There are no qualificationsreservations or adverse remarks made by the Statutory Auditors in their Report.
17.2. Secretarial Auditor and Secretarial Audit Report
Pursuant to the provisions of Section 204 of the Act and RulesRegulation 24A of the Listing Regulations and other applicable provisions framedthereunder as amended your Company had appointed Ms. Aarthi Gopalakrishna CompanySecretary in Practice (CP No.5645) to undertake the Secretarial Audit of the Company. ThePracticing Company Secretary has submitted her Report on the Secretarial Audit conductedby her which is annexed herewith as Annexure C.
There are no qualifications reservations or adverse remarks in herReport.
18. Corporate Governance and General Shareholder Information
Your Company is committed towards maintaining high standards ofGovernance. The Report on Corporate Governance as stipulated under Schedule V of theListing Regulations General Shareholder Information together with a Corporate GovernanceCompliance Certificate from Mr. K. Rajshekar Company Secretary in Practice (CP No.2468)confirming compliance forms an integral part of this Report which is annexed herewith asAnnexure D.
19. Management Discussion and Analysis Report
The Management Discussion and Analysis Report for the year underreview as stipulated under Schedule V of the Listing Regulations is forming part of thisAnnual Report.
20. Business Responsibility Report
Your Company has embedded in its core business philosophy the visionof societal welfare and environmental protection. As per Regulation 34(2)(f) of theListing Regulations a Business Responsibility Report forms an integral part of thisReport which is annexed herewith as Annexure E.
The Business Responsibility Report is forming part of the Annual Reportand available on the Company's website www.sasken.com/investors.
21. Related Party Transactions
All related party transactions that were entered into during thefinancial year were on an arm's length basis and were in the ordinary course ofbusiness. None of the Directors has any pecuniary relationship or transactions with theCompany.
Your Company has in place a Related Party Transactions Policy for thepurpose of identification and monitoring of such transactions. This policy has beenapproved by the Board and is available on the Company's websitewww.sasken.com/investors. Since there have been no materially significant contracts /arrangements / transactions with related parties disclosure under Form No. AOC-2 is notapplicable.
22. Significant and material orders passed by the Regulators or Courts
There are certain on-going litigations / disputes in the normal courseof business. However there are no significant and / or material orders passed by theRegulators / Courts having a material impact on the operations of the Company during theyear under review.
Your Company has always encouraged its employees to generateintellectual property in terms of patents to derive benefits from innovations. YourCompany has filed for multiple patents in both the Indian and USA PTO jurisdictions. OneUS patent granted to us is in the area of "Method for arriving at consensus inPermissioned Blockchain". We have a patent review pending for "Securitypertaining to the Internet of Things".
A total of 60 patents have been granted to your Company till now.
24. Quality Certifications
Your Company is certified for ISO 14001:2015 (Environment ManagementSystem Standard). Your Company is committed to contribute towards environment managementbeing a responsible corporate member of the communities in which it operates. Thisreaffirms your Company as a responsible corporate citizen.
ISO / IEC 27001:2013
Your Company is certified for ISO / IEC 27001:2013 (InformationSecurity Management System Standard). This is important for assuring our stakeholders(like Customers Partners Vendors Investors and Employees) of our commitment inprotecting their information assets and Intellectual Properties (IPs) as well assensitizing all employees about importance of confidentiality integrity and availabilityof information assets of our stakeholders.
Your Company is certified for ISO 9001:2015 (Quality Management System(QMS) Standard). It helps us to establish a process framework in organization based onPlan - Do - Check - Act lifecycle and provides guidance on implementation of checks andmeasures to help promise quality in all our deliverables to customers (new and existing)vendors shareholders and interested parties including regulatory bodies across variousgeographies in which we operate. It also helps meet statutory regulatory and compliancerequirements applicable to Sasken and its affiliate companies.
CMMI - Dev V2.0 - ML3
On delivery excellence your Company leverages industry best practicesand standards to establish and continuously improve delivery systems and processes. YourCompany has established a delivery platform called Sasken Delivery Platform (SDP). SDP isEngineering Delivery workbench (with support for various lifecycle stages) and anIntegrated Project Management platform. Your Company's QMS has been formally assessedat Maturity Level 3 of the CMMI - Dev V2.0 framework in May 2020. Sasken'sprocesses are also compliant to requirements of technology vertical specific standardslike TL9000 R5.5 / 5.0 Automotive SPICE v2.5 and Automotive Functional Safety - ISO26262.
25. Consolidated Financial Statements
The Consolidated Financial Statements of the Company are prepared inaccordance with relevant Accounting Standards (AS) issued by the Institute of CharteredAccountants of India form part of this Annual Report.
26. Annual Return
The Annual Return of the Company is available on the website of theCompany www.sasken.com/investors.
27. Particulars of Employees
The information required pursuant to Section 197(12) read with Rule5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014is annexed herewith as Annexure F.
The statement containing names of top ten employees in terms ofremuneration drawn and the particulars of employees as required under Section 197(12) ofthe Act read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 is provided in a separate annexure forming part of thisReport. Further the Report and the accounts are being sent to the Shareholders excludingthe aforesaid annexure. In terms of Section 136 of the Act the said annexure is open forinspection and any Shareholder interested in obtaining a copy of the same may write to theCompany Secretary.
Your Directors thank various Central and State Government DepartmentsOrganizations and Agencies for the continued help and co-operation. The Directors alsogratefully acknowledge all stakeholders of the Company viz. customers shareholdersdealers vendors banks and other business partners for the excellent support receivedfrom them during the year. The Directors appreciate and value the contribution made byevery employee of the Company.
| ||For and on behalf of the Board of Directors |
|Bengaluru ||Rajiv C. Mody |
|April 22 2021 ||Chairman & Managing Director |