To the Members
Your Directors have pleasure in presenting before you the Twenty-Sixth (26th) AnnualReport of your Company together with the Audited Standalone and Consolidated FinancialStatements for the Financial Year ended 31st March 2021.
|Description || |
| ||Financial Year ended 31.03.2021 ||Financial Year ended 31.03.2020 ||Financial Year ended 31.03.2021 ||Financial Year ended 31.03.2020 |
|Total Income ||82621 ||97397 ||425583 ||380166 |
|Total Expenditure ||54730 ||67372 ||384873 ||337045 |
|EBITDA ||27891 ||30025 ||40710 ||43121 |
|Depreciation and Amortization Expense ||1890 ||2060 ||3957 ||3654 |
|Finance Cost ||972 ||1090 ||1539 ||1518 |
|Profit before Tax & Exceptional Items ||25029 ||26875 ||35214 ||37949 |
|Provision for Tax (Net) ||7126 ||5749 ||10818 ||10256 |
|PAT before non-controlling interest ||17903 ||21126 ||24396 ||27693 |
|Non-controlling interest || || ||- ||- |
|PAT after non-controlling interest || || ||21126 ||24396 |
|Basic Earnings Per Share (in ) ||17.23 ||20.33 ||23.48 ||26.66 |
Despite Covid-19 pandemic challenges the Company faced initially in 2020 the businesscontinued to grow we continued to remain focused on execution of the various strategiesespecially led by our PlatformationTM strategy focus on industries focus on thealliance converting our services to PlatformationTM digital services converting ourclients to digital clients investing in IP continued to invest in people continued toinvest in talent transformation and many new initiatives were taken which helped Companydeliver a solid performance. So overall as a Company and Sonatian's as a team we arepleased with where we have reached today both qualitatively and quantitatively. At thispoint of time we would like to thank all our customers in showing faith in us and allSonatian's for dedication and commitment shown during these unprecedented times.
Your Company is primarily engaged in the business of delivering IT services andsoftware solutions to its customers across the globe including the US EuropeMiddle-East Asia - Pacific Australia and
New Zealand. Besides the Company also distributes and re-sells products from globaltechnology companies present in India. The Company's consolidated results comprisesoperations of Indian and overseas subsidiaries and operates under two distinct headsInternational IT services (IITS) and Domestic Products and Services (DPS).
The financial Year 2020-21 was a year of disruption. With the sudden outbreak ofCovid-19 pandemic our immediate focus was to ensure the employee safety and organiseourselves to deliver services remotely globally with work from home measures implementedeffectively. We were able to move 100% of our employees to work remotely or work from homeand been able to create and implement processes to deliver different kinds of services toour customers extremely effectively. Your Company's strategy of creating enterprises bycreating platform through unique PlatformationTM methodology became more relevant in thenew normal with more digitisation automation and contactless operations. The Companycontinued to focus on Platformation led solutions for its customers across its focusverticals of Retail Travel Distribution and ISVs. While of the after effects the ofthe pandemic with disruption to some key clients the second half has turned out to be thebest in the history of the company. Revenues of the Company grew 12 % over the previousyear and PAT margin was at 6 % on revenue.
Your Company continued its investments in IP technology people and process. Theacquisitions we made in the previous years
Sopris Systems LLC (Sopris) Scalable Data Systems Pty Ltd (Scalable)GAPbusters Limited (GBW) - have started bearing fruit of success. It has created enormousopportunities in industries such as Utilities and Agri-commodity businesses. Our GBWacquisition in the customer experience space (CX) has opened up emerging opportunity inthe digital transformation pace as well as penetration in newer markets. The company isvery well poised to capitalize opportunities and grow in the 2021 and beyond.
Your Company continued to strengthen its alliance with Microsoft and focused ondelivering high quality services to its clients which increased the stickiness of thebusiness.
The India business of the Company has shown tremendous growth and added new lines ofbusiness; like AWS Google Clouds and SI business. This is reflected in the quality ofbusiness of more annuity clients and higher percentage of cloud led business..
Here are some of the key achievements of the year summarized:
Successfully completed the integration of newly acquired company GAPbustersLimited (GBW) headquartered in Melbourne a leading global player in the CustomerExperience (CX) domain serving renowned brands for nearly thirty years.
Sonata's unique trademark Platformation' strategy for DigitalTransformation completed 4 years in March 2021.
Launched CXe' a unique enhanced integrated CX management solutionsdeveloped using the PlatformationTM' approach. digital Sonata's Cloudstrategy and assessment service is now available in the Microsoft Azure Marketplace anonline store providing applications and services for use on Azure.
Successfully completed ISO27001 Surveillance Audit in August 2020 in Remotedelivery mode and projects from Global
Village Hyderabad Head Office and Redmond Office in
North America were covered. The remaining part of ISO9001 Surveillance audit wassuccessfully completed in Remote delivery mode for Sonata Software Ltd in September 2020 .Your Company further strengthened its Senior Leadership with rich talent. Mr. Suresh K Pjoined Sonata as Vice President - Talent Transformation and Mr. Nidhish Shetty joinedSonata as Vice President Open Source Platform Engineering and Data & Analytics.Your company also announced compensation revision effective January 1 2021. dividend of10 /- per equity share at 1000 % on par value
Coming to the results both on a Standalone and Consolidated basis your Company haswitnessed strong growth and placed itself well to handle its increasing scale ofoperation.
A detailed analysis of Company's operations in terms of performance in marketsmanufacturing activities business outlook risks and concerns forms part of theManagement Discussion and Analysis a separate section of this Annual Report.
In this unprecedented time your company has become a more stronger organization interms of the quality of customers relationships and internal investments in creatingworld class competencies aligned to PlatformationTM across platform engineering cloudtransformation data analytics and Microsoft Dynamics. Owing the uncertain environmentorganization's all over the world are revisiting to their business strategies.Organization's are investing rapidly in emerging technologies Cloud migration and digitaltransformation to stay relevant in current situation. With strong visibility and businessopportunity in the near future your company is more focused now on investing for longterm growth in talent acquisition and transformation IP and competency development. Withour Platformation led strategy alliances acquisitions and investment Sonata iswell positioned to stand firmly with our customers in their journey of digitaltransformation in new normal era.
Total Income has shown a de-growth of 15%. The Earnings before
Interest taxes Depreciation and Amortization (EBITDA) stoodof Mr.at
34% of total income and Net Profit at 22% of total income with Earnings per share at17.23.
Total income has shown a growth of 12%. The Earnings before
Interest taxes Depreciation and Amortization (EBITDA) stood at 10% of total incomeand Net Profit at 6% of total income with Earnings per share at 23.48.
Analyzing your Company's consolidated results by the two segments it operates inInternational IT services contributed 28% of total revenues and 75% of PAT while Domesticproducts and services contributed to 72% of the total revenues and 25% of PAT.International IT Services total revenue is 118386 lakhs de-growth of 7% and $ 160million in US $ terms with a de-growth of 11% in revenues. Your Company has managed todeclare good results consistently because of its focus on serving and growing its existingcustomers new customer additions of 34 throughout the Financial
Year and maintaining resource utilization at 87% over the Financial
Year under review.
Domestic products and services witnessed de-growth of 7% in PAT.
The focus in this business has always been to manage Return on
Capital Employed (ROCE) which was approximately 30% for the year under review.
Your Company during the Financial Year under review had a stronger consolidated BalanceSheet and has approximately 64066 Lakhs of cash and cash equivalents showing Return onCapital employed
(ROCE) of its 30% and Earnings per share at 23.48 per share.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Management Discussion and Analysis Report as required under
Schedule V of the Securities and Exchange Board of India (Listing Obligations andDisclosure Requirements) Regulations 2015 (Listing Regulations) is disclosed separatelyin this Annual Report.
DIVIDEND / TRANSFER TO RESERVES
Considering the better liquidity position of the Company the Board of Directors ofyour Company are pleased to recommend payment of a final of 1/- each subject to theapproval of the shareholders at the forthcoming Annual General Meeting which along withthe interim dividend of 4.00/- per equity share adds upto a total dividend of 14/- perequity share for financial final dividend will be paid to all those equity shareholderswhose names appear on the Register of Members of the Company on 9th August 2021and to those whose names appear as beneficial owners in the records of the NationalSecurity Depository Limited and Central Depository Services (India) Limited on the saiddate. Your Company has not transferred any amounts to reserve for the Financial Year ended31st March 2021.
The paid up share capital of your Company is 105159306 divided into 105159306equity shares of 1/- each. Your Company has not come out with any issue (public rights orpreferential) during the Financial Year under review.
During the year under review the Board of Directors met four times. The meetings wereheld on 11th May 2020 10th August 2020 6th November 2020 and 4th February2021. The maximum interval between any two meetings did not exceed 120 days as prescribedby the Companies Act 2013.
Mr. Viren Raheja (DIN: 00037592) Director retires by rotation and being eligibleoffers himself for re-appointment at the ensuing AnnualGeneral Meeting (AGM). Briefprofile Viren Raheja is provided in the notes to the Notice of the ensuing AGM. The Boardof Directors on the recommendation of the Nomination and Remuneration Committee hasrecommended his re-appointment.
Your Company has laid down procedures to be followed for familiarizing the IndependentDirectors with your Company their roles rights responsibilities in your Company and toimpart the required information and training to enable them to contribute significantly toyour Company.
All the Independent Directors of the Company have given declarations that they meet thecriteria of independence as laid down in section 149(6) of the Act and Regulation 16(1)(b)and (Regulation 25) of Listing Regulations. There has been no change in the circumstancesaffecting their status as independent directors of the Company. The Independent Directorshave confirmed that they have complied with the Company's Code of Conduct. They have alsofurther confirmed that they have registered their names in the
Independent Directors' Databank.
DIRECTOR'S RESPONSIBILITY STATEMENT
In pursuance of Section 134(3)(c) read with 134(5) of the Companies Act 2013 theDirectors hereby confirm that:
a) in the preparation of the Annual Accounts the applicable Accounting Standards havebeen followed along with proper explanation relating to material departures.
b) the Directors have 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 Directorshavetakenproperandsufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act 2013 for safeguardingthe assets of the Company and for preventing and detecting fraud and other irregularities;
d) the Directors have prepared the Annual Accounts on a going concern basis;
e) the Directors have laid down Internal Financial Controls to be followed by theCompany and that such Internal Financial
Controls are adequate and were operating effectively; and f) the Directors have devisedproper systems to ensure compliance with the provisions of all applicable laws and thatsuch systems were adequate and operating
MATERIAL CHANGES AND COMMITMENTS
There has been no material change and commitment affecting financial position of yourCompany between the end of the Financial
Year under review and date of this Report.
The Audit Committee comprises of Mr. Pradip P Shah (Chairman) Mr. S B Ghia Ms.Radhika Rajan and Mr. Sanjay Asher as its Members. The Committee met four times during theyear under review and all its recommendations were accepted by the Board.
Your Company has established Vigil Mechanism which provides for direct access to theChairperson of the Audit Committee in cases that require reporting about the unethicalbehaviour actual or suspected fraud or violation of code of conduct laid down by yourCompany. This mechanism is governed by Vigil Mechanism Policy which covers unethicalbehaviour actual or suspected fraud theft bribery misappropriation of Company's fundsfinancial reporting violations misuse of intellectual property mismanagementsignificant environmental safety or product quality issues discrimination or harassmentincluding sexual harassment
Insider Trading actual or potential conflicts of interest violation of Company'srules Company's Policies or violation of Code of Conduct of the Company.
NOMINATION AND REMUNERATION COMMITTEE & STAKEHOLDERS RELATIONSHIP COMMITTEE
The Nomination and Remuneration Committee comprises of Mr. Sanjay Asher(Chairman) Mr. Viren Raheja Mr. S B Ghia and Mr. Pradip P Shah as its members. TheCommittee has laid down a policy for remuneration of Directors KMP and other Employees. Acopy of the Policy forms part of this Report and is available on the website of theCompany https://www.sonata-software.com/about-us/investor-relations/corporate-governance.
The Stakeholders Relationship Committee comprises of Mr. S B Ghia (Chairman)Mr. P Srikar Reddy and Ms. Radhika Rajan as its members.
CORPORATE SOCIAL RESPONSIBILITY COMMITTEE
The Corporate Social Responsibility Committee comprises of Mr. S B Ghia(Chairman) Mr. P Srikar Reddy and Ms. Radhika Rajan as its members. The Committee met twotimes during the year. The brief outline of the corporate social responsibility (CSR)policy of the Company and the initiatives undertaken by the Company on CSR activitiesduring the year are set out in Annexure III of this report in the format prescribedin the Companies (Corporate Social
Responsibility Policy) Rules 2014.
RISK MANAGEMENT COMMITTEE
The Risk Management Committee comprises of Mr. Pradip P Shah (Chairman) Mr. VirenRaheja and Mr. P Srikar Reddy. The Committee met one time during the year.
DIVIDEND DISTRIBUTION POLICY
As required under Listing Regulations your Company has established DividendDistribution Policy with effect from 3rd February 2017. The Dividend Distribution Policyis available on the website of the Company https://www.sonata-software.com/about-us/investor-relations/corporate-governance.
The Consolidated Financial Statements of your Company and its Subsidiaries viz. SonataInformation Technology Limited India Sonata Software Solutions Limited India SonataSoftware. North
America Inc. USA (formerly known as Offshore Digital Services
Inc) Sonata Software GmbH Germany Sonata Europe Limited UK Sonata Software FZ LLCDubai Sonata Software (Qatar) LLC Interactive Business Information Systems Inc. USAScalable Data Systems Pty Ltd. Australia Sopris Systems LLC. USA GAPbuster Limited.UK GAPbuster Europe Limited GAPbuster Inc. GAPbuster Worldwide Pty Limited KabushikiKaisha GAPbuster Japan GAPbuster China Co. Limited and GAPbuster Worldwide Malaysia SdnBhd duly audited/unaudited are presented as part of this Report in accordance with theCompanies Act 2013 Ind AS 110 and the Listing Regulations wherever applicable. Thestatement pursuant to the section 129(3) of the Companies Act 2013 containing salientfeatures of the Financial Statements of the Company's Subsidiaries in Form AOC-1 is givenin ANNEXURE I.
During the Financial Year under review your Company entered into an agreement withTreeni Sustainability Solutions Inc. is a Delaware
(US) based Company to acquire upto 24% stake through Sonata
Software North America Inc. a wholly-owned Subsidiary of the Company.
The Financial Statements of the Subsidiaries are available on your Company's website athttps://www.sonata-software.com/about-us/ investor-relations.
Your Company has a "Policy for determining Material Subsidiaries" so thatyour Company could identify such Subsidiaries and set out a governance framework for them.The Policy is put up on the website athttps://www.sonata-software.com/about-us/investor-relations/corporate-governance.
EMPLOYEE STOCK OPTION PLAN "ESOP"
Your Company has an Employee Stock Option Plan 2013 (Plan) in accordance with the SEBI(Share Based Employee Benefits)
Regulations 2014. The principal objectives of this Plan are to:
Attract retain and motivate talented and critical Employees;
Encourage Employees to align individual performance with the Group's objectives;
Reward Employee performance with ownership in proportion to their contribution;and
Align Employee interest with those of the Group.
During the Financial Year under review Mr. P Srikar Reddy Managing Director & CEOof the Company was granted an option to purchase 60000 ESOP Shares of the Company to bevested equally over a period of the contract period subject to terms and conditions asset forth in the ESOP Plan 2013 of the Company. Accordingly the first tranche of 20000Options shall vest on him for exercise on 28th May 2021. Further no employee was issuedstock options during the year equal to or exceeding 1% of the issued capital of theCompany at the time of grant.
Pursuant to the requirements of the Securities and Exchange Board of India (Share BasedEmployee Benefits) Regulations 2014 certificate has been issued by the StatutoryAuditors of the Company confirming that the Plan has been implemented in accordance withthe said Regulations and in accordance with the resolution of the Company in the GeneralMeeting.
As required under the Securities and Exchange Board of India
(Share Based Employee Benefits) Regulations 2014 the applicable disclosures as on31st March 2021 are uploaded on the website of the Company www.sonata-software.com.
The Board had appointed Mr. Parameshwar G Hegde Practicing Company Secretary as theSecretarial Auditor for the Financial Year 2020-21. The Secretarial Audit Report for theFinancial Year ended 31st March 2021 is annexed to this Report as ANNEXURE II. Thereport does not contain any qualification reservation or adverse remark.
The provisions of Companies (Cost Records and Audit) Rules 2014 are not applicable toyour Company.
QUALIFICATIONS IN AUDIT REPORTS
Your Company confirms that there are no qualifications in
Statutory Auditor's Report and the Secretarial Audit Report for the year under review.
M/s Deloitte Haskins & Sells LLP Chartered Accountants Bangalore (FirmRegistration No. 117366W/W-100018) were appointed as Statutory Auditors of the Companyfrom the conclusion of Twenty Second (22nd) Annual General Meeting (AGM) till conclusionof Twenty Seventh (27th) AGM subject to ratification of their appointment at every AnnualGeneral Meeting by the members. However the members may note that pursuant to theCompanies
(Amendment) Act 2017 the requirement of ratification of the appointment of theStatutory Auditors in every Annual General Meeting has been omitted and therefore theCompany is not required to seek ratification.
REPORTING OF FRAUDS BY AUDITORS
During the year under review neither the statutory auditors nor the secretarialauditor has reported to the audit committee under Section 143 (12) of the Companies Act2013 any instances of fraud committed against the Company by its officers or employeesthe details of which would need to be mentioned in the Board's report.
Your Company has complied with the provisions of the Secretarial Standard 1 & 2issued by the Institute of Company Secretaries of India.
Pursuant to Section 92(3) and Section 134(3)(a) of the Companies Act 2013 the Companyhas placed a copy of the annual return as at March 31 2021 on its website athttps://www.sonata-software.com/ about-us/investor-relations/corporate-governance.
INVESTOR EDUCATION AND PROTECTION FUND (IEPF)
During the year the Company has transferred the unclaimed and un-encashed dividends of2194939. Further 27753 corresponding shares on which dividends were unclaimed forseven consecutive years were transferred as per the requirements of the
IEPF Rules. The details of the resultant benefits arising out of shares alreadytransferred to the IEPF year-wise amounts of unclaimed / un-encashed dividends lying inthe unpaid dividend account up a to the year and the corresponding shares which areliable to be transferred are provided in the Shareholder information section of theCorporate governance report and are also available on our website athttps://www.sonata-software.com/about-us/investor-relations/corporate-governance.
During the year under review your Company was felicitated with Microsoft Eagle AwardWinner for Dynamics Customer Adds for Financial Year 2020.
Your Company continues to focus on delivering World Class Customer Experience throughDigital Delivery Processes and Remote Working best practices in a seamless way.
During the year under review your Company successfully completed surveillance auditfor ISO 9001-2015 (overall quality management system) upgraded IT Service Managementsystem to ISO20000-1 2018 version of standard and expanded the scope of InformationSecurity Management System aligning to ISO 27001 standard by including Redmond OfficeSonata Software North America and Somajiguda Office in Hyderabad. Your Company alsosuccessfully completed the Recertification audit for ISO9001:2015 recently in
Your Company continues to enhance the effectiveness of its delivery to all customersand also Sonatians by rolling out SonataOne Platform the PlatformationTM initiative forSonata's internal business processes. We continue to increase our focus on meaningfulautomation and adopting world class practices and processes for world class delivery.
Your Company participated in the Process Benchmarking initiative 2020 from HYDSPIN(Hyderabad Software Process Improvement Network) which surveyed the Best practices of keyprocesses followed among leading IT Service Product based Product and Service Orientedorganizations.
In terms of customer satisfaction your Company achieved an overall aggregated score of4.2 out of a possible top score of 5 this year from key delivery project customers.
Your Company is pursuing the following focus areas to become a World ClassOrganization: PlatformationTM as mainstream Creating World Class Client Experience byleveraging World Class competencies and talent through engaged Sonatians for all ourexisting as well as new clients. Enabling Digital Transformation of client's businessprocesses through PlatformationTM Sonata's unique framework and approach is activelypromoted within your Company and acknowledged and appreciated by many of your clients.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE OUTGO
(A) Conservation of energy
Though your Company does not have energy intensive operations being in the servicessector the Company has always been on the lookout for energy efficient measures foroperation and value conservation of energy through utilization of newer technologies& innovation for improving productivity and quality of products and services. Everyendeavour has been made to ensure the optimal usage of energy avoid wastage and conserveenergy. As an ongoing process the Company continued to undertake the following energyconservation measures to minimize the usage of energy:
Deployment of energy-efficient computers and sophisticated office automation andmanagement equipment with the latest technologies which optimizes conservation of energyand create an environmentally friendly work environment
Installing LED lights which reduces electricity consumption
Installation of sensors at work space area resulting in lights automaticallygetting switched off in areas not in use
Continuous monitoring of floor areas after normal working hours and switching offlights
Turning off air conditioners during non-peak hours and on weekends
Installing of Energy Meters for closed monitoring of AHU run hours on dailybasis.
Regular UPS and AC plant maintenance to ensure efficient working of the equipment.
Air condition in HO replaced with energy savings VRV/ VRF units and the gas usedis eco-friendly which is harm less to Ozone layer in atmosphere
Comply 100 % removal of dead loads during week-ends. (Turn off/plug out heatingelements of vending machines turn off Lighting circuits ensure all manual operatingloads are cut off etc)
During the year under review some of the steps taken and practices followed by yourCompany and its employees towards energy conservation include the following:
Replacing the CFL based lighting in our Bengaluru Global Village facility to LEDbased lighting in phases which has given immense savings in Electricity consumption.
Air-conditioning staggered mode of operation resulting in reduction in fuelconsumption.
Replacing old monitors with energy efficient monitors which leads to significantconsumption.
Migration of in-house computing infrastructure to cloud lead to significantenergy and cost savings.
Regular UPS and AC plant maintenance to ensure efficient working of the equipment.
All air-conditioning units which is operated on R22 gas is replaced witheco-friendly gas operated A/c units. Gas used is eco-friendly which is harm less to Ozonelayer in atmosphere whereas earlier A/c units used is R-22 which is not recommended as itis harmful to atmosphere.
Comply 100 % removal of dead loads during week- ends. (Turn off/plug out Heatingelements of vending machines turn off Lighting circuits ensure all manual operatingloads are cut off etc)
Water which is a scarce commodity all over we have implemented new technologybased systems for washroom water management named HUIDA where we will be using only 1 to1.5 Liters for flushing as water against normal Commode flush of 10-15 liters per flush
Wattmiser :- Installed in our AHU has improved air quality inside the floor andin turn energy saving
Water aerators to the taps have been installed at all the facility which willsave water (Claim is around 80%) without compromising water pressure (inspection done bymanagement personally and observed that it is saving water).
Conventional UPS in Hyderabad unit -1 been Upgraded to Modular UPSsystem. UPS is modular UPS is with latest technology and there is Energy cost reduction.
As the cost of energy consumed by your Company forms a very small portion of the totalcosts the financial impact of these measures is not material.
(B) Technology absorption
During the Financial Year under review your Company focused its efforts and builtcompetencies in areas of new technologies like CX RPA Chatbots Machine learning &strengthened other competencies like multi cloud and hybrid cloud modern data platforminfrastructure omni channel commerce and security Dedicated Competency teams were setupfor each of these. Your Company has progressed well with its proprietary model ofachieving digital transformation called Platformation. Your
Company continued to invest in differentiated IP and platforms across industryverticals of Retail Distribution Service industry and software solutions.
(C) Foreign exchange earnings and Outgo
During the Financial Year under review 90 % of the revenue came from exports ofdeveloped software and related services to clients in USA UK Australia Germany UAEJapan Singapore Denmark and Europe.
Foreign Exchange outgo on account of travelling professional and legal chargessubsistence/living costs overseas salaries capital goods etc. was 5227.26 Lakhs andForeign Exchange inflow on account of export of software services (net) goods and otheroperating revenues was 70265 Lakhs. Customers today seek more efficient and effectiveoperations along with technology based innovation and business transformation before theymake any technology investments. reduction Your Companyin energy has been successful ingrowing the size of existing teams as well as branch into newer divisions within thesecustomers.
Your Company has not accepted any deposits from the public under Chapter V of theCompanies Act 2013 during the year under review.
HUMAN RESOURCES MANAGEMENT
Sonata was part of the following activities during 2020-21:
Connect programs and virtual employee engagement activities provided themuch-needed motivation and good vibes in the situation that unfolded in the workingscenario enthusiastic and positive communication was paramount. We have had an array ofvirtual Fun at work' games and activities conducted for teams across geographicallocations. The teams and families caught on and had fun at virtual dance and yogasessions.
The entire organization had to quickly move to a WFH model and being able tocommunication effectively environment became highly important. We believe that
. effective communication helps create a World class customer and Sonatian experience.We had over 300 enthusiastic participants in the webinar conducted to make this transitionseamless- "Communicate effectively in virtual environment".
As the world rapidly moved towards digital transformation it was imperative tobring ourselves up to speed and up-skill. We launched the Unified Engineer Developmentplan to support our PlatformationTM agenda.
The Leaders' Ideation Forum (LIF) is a digitally hosted platform connectingleaders of Sonata across our various locations. The forum is one of our many initiativesto enhance communication ideate on solutions solve problems and make consensus-baseddecisions aligning to our ethos of one culture one team and one mission. Virtual LIFswere hosted which included Sonatians from various locations in India. The theme for thesession was "Ideas best practices for ensuring World Class delivery while remoteworking."
Competency Town Hall: Various Town Halls were organized for different competencygroups where leadership shared updates focusing on business perspectives in the currentcontext and the opportunities ahead. The Town Hall communicates to the team on criticalaspects of business and ensures alignment to common purpose and goals of the organization.
All Hands meeting is a key element of our communication and culture. Workingremotely didn't stop us from enhancing the frequency or quality of our All Hands meetings.Virtual All- hands meeting was organized for our accounts. These sessions held moreimportance than ever as it brought together teams working across different locations& shifts.
These meetings gave an opportunity for Sonatians to receive important account levelupdates as well as raise clarifications with senior management.
One key account All Hands Meet - #CONVOKE; it was a confluence of thoughts &experience. Leadership used the opportunity to celebrate together achievements and successof account.
Virtual Independence Day celebrations were organized and we had an overwhelmingresponse by the participants. There was singing playing of musical instruments dancingand showcasing of artwork by the employees and their children as a part of the talent showalong with Independence day Trivia conducted for the participants.
To enable Sonatians to give the best in class experience to clients and to eachother through communication we launched BSI (Behavioral skill initiative) on LMS. Over750 Sonatians enrolled and participated.
The first Sonata Scalable Joint Leadership Update meeting was conducted with over 60participants to bring the two teams closer and enhance connect. Better leverage thestrengths of Sonata and Scalable group members for business growth
Ask CEO is a platform to share your ideas suggestions feedback and strategyapproaches giving you direct access to connect with me. Urge employees to use the platformto share feedback/suggestions on PlatformationTM as a mainstream Creating World ClassExperience and World Class Sonatian Experience.
The pandemic did not dissuade Sonata's Toastmasters from connecting with oneanother and improving their leadership skills virtually. Each week the club convened tospeak on themes such as Welcome to my Cubicle / WFH Enjoy little things in Life OneTruth / One Lie Engineers in Us etc.
Virtual events all-hands meets and on-boarding continued in Q3 in our endeavorto keep the teams aligned and engaged. Virtual all-hands provided scope for sharingbusiness updates and celebrate employee achievements & milestones.
Let's Connect meetings were organized for our strategic accounts. The forumprovides scope for the Delivery leadership & HR to give a huge shout out to all ourtop performers by handing over DNA awards.
GBW Virtual Events: Sonata - GBW Virtual events across Australia UK MalaysiaJapan China and India gave a chance to the GBW global employees along with the Sonata HRteam members to gather and celebrate Excellence Awards DNA Awards and Service RecognitionAwards. Grant Salmon CEO GBW provided latest GBW business updates latest business winsand information on the integration progress between GBW - Sonata team. The regional teamsalso shared moments in their lives along with key reflections.
c.o.n.v.e.r.s.a.t.i.o.n.s: Is a unique format informal chat sessions where ourCEO speaks to Sonatians who he usually does not meet during his day to day interactions.These conversations enable us to engage with our employees in locations across the worldincluding India Europe US and UK - allowing us be truly global share expectationsfoster thoughts and ideas - all leading to alignment to a greater cause and betterunderstanding of the core purpose of the organization.
Recognition of team that has created a World Class Client Experience throughExcellence in Delivery: The team's greatest challenge this time came in the form ofbuilding trust in a client. Putting its best foot forward it took the team manythoughtfully designed interactions and meetings to win trust and establish a bond. As theproject was rolled out it was very clear that the team had exceeded all expectations inmaking impact with the client. The team overcame several technical challenges and arrivedat solution by building a platform that has multiple features as a one stop solutionproviding seamless integration with the client's internal systems and external APIs!
Learning and development: At Sonata we are working towards nurturing anenvironment of life-long learning focused on career and individual growth transforming the Learning function to Unified Learning and Development.
FLEX (Focused Learning Experiences) a Leadership Development Journey for thenew normal was launched for aspiring and current leaders. The sessions are aligned to thecurrent business needs of leadership and digital roles of Digital DM/PM and Architectenabling leaders to deliver World Class Client and Sonatian Experience in line with theGrowth Agenda.
Unified Digital Architect program was launched aiming to train
25 Digital Architects by June 2021 for deployment. This would support our Platformationagenda.
NASSCOM Future Skills B2C group was launched for all Sonatians in India. Aplatform access that would contribute to building a learning culture by providing accessto industry level curated knowledge content from SMEs in latest areas of DigitalLeadership and Professional skills.
We launched SonataOne Sonata's new integrated & modern HR platform foremployees to self-transact and complete various tasks such as Generate the employeecertificates such as Address Proof employment certificate apply & track leavesrecognise colleagues view Personal data submit time sheets claim travel and expensereimbursements etc.
DISCLOSURES AS REQUIRED UNDER SECTION 22 OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE(PREVENTION PROHIBITION AND REDRESSAL) ACT 2013
Your Company is committed to provide a healthy environment to all employees thatenables them to work without the fear of prejudice and gender bias. Your Company has inplace a gender neutral Prevention of Sexual Harassment (POSH) Policy in line with therequirements of Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013.
Your Company through this Policy has constituted a committee and has established agrievance procedure for protection against victimization. The Policy is available onintranet for the employees to access as and when required. No complaints were receivedunder this Policy during the Financial Year 2020-21.
INTERNAL FINANCIAL CONTROLS
Internal Financial Controls are an integrated part of the risk management processaddressing financial and financial reporting risks. It is commensurate with its size andthe nature of its operations.
The internal financial controls have been embedded in the business processes.
Assurance on the effectiveness of internal financial controls is done throughmanagement reviews and review by internal auditors during the course of their audits. Webelieve that these systems provide reasonable assurance that our internal financialcontrols are designed effectively. The Audit Committee reviews the reports submitted byinternal auditors. Suggestions for improvement are considered and the corrective actionare undertaken.
SIGNIFICANT & MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNAL
During the year under review there were no significant orders passed by the Regulatorsor Courts or Tribunals impacting the going concern status of your Company and its futureoperations.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
During the Financial Year under review your Company had given Inter Corporate Depositsat prevailing bank lending rate to its Wholly Owned Subsidiary Sonata InformationTechnology Ltd. and Sonata Software Solutions Limited for meeting its working capitalrequirements. The balance outstanding as on 31st March 2021 is Rs 180 Lakhs. The maximumamount outstanding at any point of time during the Financial Year has been 295 Lakhs.
Also your Company has given Corporate Guarantees on behalf of Subsidiaries forfacilitating its business needs. The outstanding amount as on 31st March 2021 is asbelow:
Name of the Subsidiary in Lakhs
Sonata Software North America Inc. USA 5483 Sonata Information Technology LimitedIndia 11467
Your Company's Risk Management practice seeks to sustain the long-term vision andmission of your Company. It continuously evaluates the various risks surrounding thebusiness and seeks to review and upgrade its risk management process. To furtherendeavour your Board constantly formulates strategies directed at mitigating these riskswhich get implemented at the Executive Management level and a regular update is providedto the Board.
CORPORATE SOCIAL RESPONSIBILTY (CSR)
During the Financial Year your Company has spent 377 lakhs towards CSR activities.Your Company has a Policy on CSR and as part of its implementation program identified andparticipated in the following initiatives:
Sonata Software in association with Child Rights and You (CRY) helping them tosetup Child Activity Centre and they can be referred to as a place where children ofsocio-economically marginalized communities are empowered through education to discovertheir self develop agency of their own and enhance self-efficacy.
Sonata Software partnered with SAHAI Trust mainly to uphold the rights of thePhysically challenged patients especially the spinal injured through providing propertreatment and comprehensive rehabilitation and save their families from economicdeprivation and thereby contributing to the creation of a healthier society wherephysically challenged get equal opportunities to lead dignified and independent lives.
Sonata partnered with The Kishkinda Trust (TKT) and developed an E-Commerceplatform to co-exist with their existing website with Multi-Functionality so that theretail and wholesale buyers will be able to place orders online from artisans.
Sonata Software in partnership with Agastya International Foundation issupporting them to take Science and Mathematical experiments to the Rural schools in theCountry. We have supported them with the Program -"Lab On Tab" which help Ruralstudents to get access to Science and Maths experiments at their doorstep in Ruralschools. Sonata also developed the App based learning platform for Agastya's Lab onTab.
Sonata in partnership with MAP a project of Arts and Photography Foundationhas built a responsive website for booking tickets for its various events and hosted theDigitized version of artefacts for MAP
Sonata Software in partnership withandmaterial Industree Crafts Foundation isdeveloping a Co Create app for Artisans. The app would have a Master Bank to capture thedetails of Artisans and their artworks across India. This app will also help Artisansacross the country to register themselves and display their crafts
The partnership with Kriti Social Initiatives is to help empower the women inslums with skill development. This Partnership supports various women empowerment programsto empower women through skills training and capacity building promote livelihoods forwomen and ensuring education of children in slums of Hyderabad. Sonata has also created aTechnology Platform for Kriti to market the Products manufactured by the Women artisans.
Scholarships for economically challenged engineering students We partnerwith SKSVMA Trust to support technical education for economically challenged students inthe backward districts of Karnataka. We are also supporting them with grant forinfrastructure support to create Project labs.
Sonata Software in partnership with Sense International India (SII) hasleveraged technical expertise from Sonata in revamping their existing website with newfunctionalities and fund-raising module to help their Programs
Sonata Software partnered with Sneha Trust to support Sneha Trust's VidyaUnnati Program with an aim to improve the quality of education and access toopportunities for socio- economically vulnerable children.
Sonata Software partnered with Disom-The Leadership School' program under FMRA(Friends of Moral Re-Armament) to improve Leadership among the Rural communities who hailfrom economically socially and politically marginalized backgrounds.
Sonata Software partnered with MAP a project of Arts and PhotographyFoundation to support "The Deep Dive Program" an online program that bringsscholars in global art to the audience across the globe and offers a unique opportunity toaccess art histories and knowledge.
Sonata Software in partnership with Women Weave has designed a customer facingplatform with multi-currency functionality that allows Weavers to showcase their designcollections to prospective customers. This platform also enables weavers to receive ordersand customization requests with regards to colors design themes and yardage The AnnualReport on CSR in the prescribed format is enclosed to this Report as ANNEXURE III.
BUSINESS RESPONSIBILITY REPORT
The SEBI (Listing Obligation and Disclosure Requirements) Regulations 2015 mandatesinclusion of the Business Responsibility Report (BRR) as part of the Annual Report for top1000 listed entities based on market capitalization. In compliance with the RegulationsBRR is available on the Company's website at www.sonata-software. com. The BRR contains adetailed report on Business Responsibilities vis-a-vis the nine principles of the NationalVoluntary Guidelines on Social Environmental and Economic Responsibilities of Businessframed by the Union Ministry of Corporate Affairs.
RELATED PARTY TRANSACTIONS
The policy on related party transactions is available on the Company's website athttps://www.sonata-software.com/about-us/ investor-relations/corporate-governance.
All related party transactions are placed on a quarterly basis before the AuditCommittee and before the Board for approval. Prior omnibus approval of the Audit Committeeand the Board is obtained for the transactions which are foreseeable and of a repetitivenature particulars of the contracts or arrangements with related parties referred to inSection 188(1) in the format specifiedas
Form AOC- 2 forms part of this Report as ANNEXURE IV. Pursuant toRegulation 23(9) of the Listing Regulations your
Company has filed the reports on related party transactions with the Stock Exchanges.ming the
JUSTIFICATION FOR ENTERING INTO RELATED PARTY TRANSACTIONS
All the Related Party Transactions entered into by your Company with the RelatedParties including rendering of services sharing of expenses providing of inter-corporateloans and guarantees to its subsidiaries are in the ordinary course of business and arecarried out at arm's length pricing.
During the Financial Year under review as mandated by the Companies Act 2013 yourCompany conducted an exercise to evaluate the performance of the Board Committees of theBoard Chairman of the Board Individual Directors and the Independent Directors. As partof the evaluation process individual criteria for each of the exercise was formulated.From these formal questionnaire listing various parameters on which each of thecategories were required to be evaluated was shared with each member of the Board /Committee / Director. They were then required to rate individually on each of theparameters pursuant to provision of Companies Act 2013 and Listing Regulations.
REMUNERATION TO DIRECTOR AND EMPLOYEES
Details / Disclosures of ratio of Remuneration to each Director to the medianemployee's remuneration and details of remuneration paid to Employees is given as ANNEXURE V.
A statement comprising the names of top 10 employees in terms of remuneration drawn andevery person employed throughout the year who were in receipt of remuneration in terms ofRule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 forms an integral part of this Report. However the same is not being sent along withthis Annual Report to the Members of the Company in line with the provision of Section 136of the Companies Act 2013. Members who are interested in obtaining these particulars maywrite to investor@sonata-software. com and these documents will be made available forinspection electronically from the date of circulation of this Annual Report up to thedate of AGM i.e 16th August 2021.
LISTING WITH STOCK EXCHANGES
Your Company confirms that it has paid the Annual Listing Fees for the year 2020-21 toNSE and BSE where your Company's Shares are listed
Your Company has taken adequate steps to adhere to all the stipulations laid down inSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015. A report onCorporate Governance is provided in this Annual Report.
A Certificate from Mr. Parameshwar G Hegde a practicing CompanySecretary compliancewith the conditions of Corporate Governance as stipulated under the said Regulations isattached to this report
Your Directors would like to place on record their gratitude for all the guidance andco-operation received from all its clients vendors bankers financial institutionsbusiness associates advisors regulatory and government authorities. Your Directors alsotake this opportunity to thank all its Shareholders and stakeholders for their continuedsupport and all the Sonatians for their valuable contribution and dedicated service.
FOR AND ON BEHALF OF THE BOARD
|Place: Mumbai ||PRADIP P SHAH |
|Date: 12 May 2021 ||CHAIRMAN |