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Directors Report of eClerx Services Ltd.

Mar 31, 2016

Dear Members,

The Directors are pleased to present their Sixteenth Annual Report along with the audited annual accounts for the financial year ended March 31, 2016.

1. FINANCIAL HIGHLIGHTS

Key aspects of Standalone Financial Performance / Operating Performance of the Company for the year ended March 31, 2016 are tabulated below pursuant to the Companies (Accounts) Rules, 2014:-

(Rupees in million)

Particulars 2015-16 2014-15

Income from Services 11,057.08 8,183.35

Other Income 366.54 319.19

Total Revenue 11,423.62 8,502.54

Operating Expenses 6,885.01 5,516.53

EBITDA 4,538.61 2,986.01

EBITDA% 39.73% 35.12%

Depreciation and goodwill & amortisation 374.02 285.67

Earnings before Exceptional Items, Interest, & Tax 4,164.59 2,700.34

Exceptional Items 259.14 -

Interest Expense - -

Taxes 929.01 542.68

Net Profit after Tax 2,976.44 2,157.66

NPM% 26.06% 25.38%

Year in Retrospect

On a standalone basis the total income increased to Rs. 11,057.08 from Rs. 8,183.35 million in the previous year at a growth rate of 35.12%. The EBITDA amounted to Rs. 4,538.61 as against Rs. 2,986.01 million in the previous year. The Company earned Net Profit After Tax (PAT) of Rs. 2,976.44 for the year as against Rs. 2,157.66 million during the previous year.

The details regarding consolidated performance of the Company are provided in the Management Discussion and Analysis Report.

2. INFORMATION ON STATE OF AFFAIRS OF THE COMPANY

Information on operational and financial performance, etc., is provided in the Management Discussion and Analysis Report, which is annexed to the Directors'' Report and has been prepared, inter-alia, in compliance with the terms of Regulation 34 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations").

Subject to information contained in Notes to the Financial Statements and ongoing Amalgamation process, no material changes and commitments have occurred after the closure of the FY 2015-16 till the date of this Report, which would affect the financial position of your Company.

3. DIVIDEND

After considering the Company''s profitability, cash flow and overall financial performance, your Directors are pleased to recommend a dividend of Re. 1/- (10%) per share. The total quantum of dividend if approved by the Members will be about Rs. 40.79 million while about Rs. 8.30 million will be paid by the Company towards dividend tax and surcharge on the same.

The Company had paid a dividend of Rs. 35/- per share (350%) in the previous year. The Company intends to maintain historical payout ratio and is exploring efficient methods to achieve the same.

The historical data of dividend distributed by the Company is as follows:

Sr. FY FY FY Dividend No. 2014-15 2013-14 2012-13

1 Interim Dividend 0 0 0

2 Dividend (Final) 35.00 35.00 25.00

3 Total Dividend for the year 35.00 35.00 25.00

4 Dividend as % of EPS (Basic) 46% 41% 43%

5 Dividend as % of Profit After Tax 46% 41% 44%

6 Tax Amount (Rs Million) 222.28 179.50 126.93

Dividend FY FY FY FY 2011-12 2010-11 2009-10 2008-09

Interim Dividend 0 0 7.5 2.5

Dividend (Final) 17.50 22.50 10 10

Total Dividend for the year 17.5 22.5 17.5 12.5

Dividend as % of EPS (Basic) 32% 53% 68% 57%

Dividend as % of Profit After Tax 32% 53% 45% 38%

Tax Amount (Rs. Million) 82.50 105.32 31.61 32.18

The register of members and share transfer books will remain closed from Thursday, July 7, 2016 to Wednesday, July 13, 2016 (both days inclusive) for the purpose of ascertaining entitlement for the said dividend. The Sixteenth Annual General Meeting of the Company is scheduled to be held on Wednesday, July 13, 2016.

4. BONUS SHARES

The Company on December 21, 2015 allotted 10,180,609 Equity Shares of Rs. 10/- each as Bonus Shares to the Shareholders of the Company in the ratio of 1 (One) Equity Share of Rs. 10/- each for every 3 (Three) Equity Shares of Rs. 10/- each held as on the Record Date, i.e. December 18, 2015.

5. PUBLIC DEPOSITS

During the year, your Company has not accepted any deposits within the meaning of the provisions of Section 73 of the Companies Act, 2013.

6. SUBSIDIARIES / ASSOCIATE COMPANIES

The Company has following subsidiaries/associates as on March 31, 2016:

Sr. Name of Subsidiaries/Associates No.

1. eClerx Investments Limited (BVI)

2. eClerx LLC (U.S.A.)

3. eClerx Limited (U.K.)

4. eClerx Private Limited (Singapore)

5. Agilyst Inc. (U.S.A.)

Agilyst Consulting Private Limited (India), 6. step down subsidiary being the subsidiary of Agilyst Inc. (U.S.A.)

7. eClerx Investments (U.K.) Limited (U.K.)

8. CLX Europe S.P.A.(Italy), step down subsidiary being the subsidiary of eClerx Investments (U.K.) Limited

9. Sintetik S.R.L. (Italy), step-down subsidiary being the subsidiary of CLX Europe S.P.A.(Italy)

10. CLX Media Solutions GmbH (Germany), step-down subsidiary being the subsidiary of CLX Europe S.P.A. (Italy)

11. CLX Europe Media Solutions Limited (U.K.), step-down subsidiary being the subsidiary of CLX Media Solutions GmbH (Germany)

12. CLX Thai Company Limited (Thailand), associate company wherein 49% is held by CLX Europe S.P.A. (Italy)

7. PERFORMANCE AND FINANCIAL POSITION OF EACH OF THE SUBSIDIARIES, ASSOCIATES AND JOINT VENTURES COMPANIES INCLUDED IN THE CONSOLIDATED FINANCIAL STATEMENTS

Pursuant to Section 136 of the Companies Act, 2013, the Financial Statements including Consolidated Financial Statements, if any, along with relevant documents have been posted on the Company''s website www.eClerx.com. The same are open for inspection at the Registered Office of the Company on all working days except Saturday between 11.00 a.m. to 6.00 p.m.

A statement containing salient features of performance and financial position of each of the subsidiaries included in the financial statements is attached as Annexure - I to this report in Form AOC -1.

8. SCHEME OF AMALGAMATION BETWEEN AGILYST CONSULTING PRIVATE LIMITED AND THE COMPANY

The Board of Directors of the Company at their meeting held on September 11, 2015 have approved the Scheme of Amalgamation between Agilyst Consulting Private Limited and eClerx Services Limited and their respective shareholders (the "Scheme") which provides for the amalgamation of Agilyst Consulting Private Limited a step down subsidiary, with eClerx Services Limited (''the Company'') under sections 391 to 394 and other applicable provisions, if any, of Companies Act, 1956 and other relevant provisions of Companies Act, 2013. The Appointed date of the Scheme is April 1, 2015.

The Company has received Observation letter from BSE Ltd. and the National Stock Exchange of India Limited conveying their no-objection in filing the Scheme with the Hon''ble High Court of Bombay (''High Court''). The Scheme of Amalgamation was filed by Agilyst Consulting Private Limited with the Hon''ble High Court. The High Court vide its order dated April 1, 2016, has dispensed with the requirement for filing a separate "Company Summons for Direction and Company Scheme Petition" under Sections 391-394 of the Companies Act, 1956 for eClerx Services Limited and therefore there was no requirement for holding meetings of shareholders or creditors of the Company in this regard.

The Scheme is pending before the Hon''ble Court for approval and would be effective only once the order is received from Hon''ble High Court of Bombay and filed with the Registrar of Companies. Thereafter, the Scheme will be given effect to in the books of accounts of the Company.

9. DETAILS IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS

As per explanation to Section 134 of the Companies Act, 2013, the Internal Financial Controls (IFC) are reviewed by your management and key areas are subject to various statutory, internal and operational audits based on periodic risk assessment. The findings of the audits are discussed with the management and key findings are presented before the Audit Committee for review of actionable items.

The review of the IFC, inter-alia, consists of the following three components of internal controls:

A. Entity level controls;

B. Key financial reporting controls; and

C. Internal controls in operational areas.

10. INCREASE IN SHARE CAPITAL

Particulars No. of Shares Amount in Rs.

Issued, subscribed and 30,350,885 303,508,850 Paid-up Capital as on April 1, 2015

Add: Number of shares allotted during the year FY 2015-16; On account of ESOP 257,192 25,71,920 Allotment

On account of Bonus 10,180,609 101,806,090 Allotment

Issued, subscribed and Paid-up Capital as on 40,788,686 407,886,860 March 31, 2016

11. STATUTORY AUDITORS

M/s. S. R. Batliboi & Associates LLP, Chartered Accountants, Mumbai, [ICAI Registration No. 101049W / E300004] the Statutory Auditors of the Company, were appointed by the Shareholders at their meeting held on July 10, 2014 for a period of 5 years i.e. upto conclusion of Nineteenth Annual General Meeting subject to ratification by Shareholders at every Annual General Meeting as per the provisions of the Companies Act, 2013 (''Act''). Pursuant to the Act, Members are requested to consider ratification of their appointment and authorise the Board of Directors including Audit Committee thereof to fix their remuneration for the FY 2016-17.

In this regard, the Company has received a Certificate from the Auditors to the effect that their appointment as Auditors continues to be in accordance with the provisions of the Act.

The Auditors'' Report does not contain any qualification, reservation or adverse remark.

12. EXTRACT OF ANNUAL RETURN

Information as required under Section 134 of the Companies Act, 2013 read with the Companies (Management and Administration) Rules, 2014 are given in the Annexure-II forming part of this report.

13. SIGNIFICANT AND MATERIAL ORDERS

There are no significant and material orders passed by the Regulators or Courts or Tribunals impacting the going concern status and Company''s operations in future.

14. DIRECTORS

In accordance with the Articles of Association of the Company, Anjan Malik, [DIN: 01698542] retires from office by rotation, and being eligible, offers himself for re-appointment at the forthcoming Annual General Meeting of the Company.

The brief resume of Anjan Malik as required, inter- alia, in terms of Regulation 36 of the Listing Regulations and the required proposal for re- appointment of the above Director at the forthcoming Annual General Meeting is included in the Notice convening this Annual General Meeting. Anjan Malik is not a key managerial personnel pursuant to the provisions of Companies Act, 2013.

No Director or Key Managerial Personnel have resigned or been appointed during the year under review.

15. DECLARATION BY INDEPENDENT DIRECTOR(S)

The Company has received Certificate of Independence from all Independent Directors, inter- alia, pursuant to Section 149 of the Companies Act, 2013, confirming and certifying that they have complied with all the requirements of being an Independent Director of the Company.

16. BOARD, DIRECTORS AND COMMITTEE EVALUATION

The Companies Act 2013, rules thereunder and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 provide that the Annual Report of the Company shall disclose the following:

- Manner in which formal performance evaluation of the Board, its Committees, and Individual Directors including independent directors has been carried out; and

- Evaluation criteria.

To this effect, the Board of Directors had appointed an external expert on Board evaluation, for facilitating and carrying out the said evaluation who carried out the review, analysis, evaluation and submitted its report. This exercise, inter-alia, aimed at evaluation of the Board at a collective level and evaluation of individual board members, including peer review and self-assessment. The individual reports were submitted to respective directors whereas the Board level report was placed before the Nomination and Remuneration Committee as well as the Board of Directors, for review, requisite noting and action items.

The said review was carried out, based on pre-defined comprehensive checklist(s) covering evaluation criteria(s), inter-alia, modelled on the following factors:

- Accountability towards shareholders;

- Critical review of business strategy;

- Conducive environment for candid communication and rigorous decision making;

- Board''s focus on wealth maximisation for shareholders;

- Board''s ability to demand and foster higher performance;

- Business Continuity preparedness;

- Skill Set and mix thereof among Board members;

- Flow of information so as to enable informed opinions by the Directors;

- Adequacy of meetings of directors in terms of frequency as well as the time dedicated for discussions and deliberations.

The peer review checklist encouraged the Directors to share their feedback, suggestions and opinions frankly which were then collated and submitted to each of the directors for noting, information and requisite future action, as deemed fit.

On the same lines, review of committees of Board of Directors was also conducted based on pre-defined comprehensive checklist(s) covering evaluation criteria(s), inter-alia, modelled on the following factors:

- Contribution, control and counseling by the Committee on various matters;

- Qualitative comments / inputs;

- Deficiencies observed, if any;

- Qualification of members constituting the Committee;

- Attendance of Committee members in the respective meetings;

- Frequency of meetings.

In addition, the Chairman was also evaluated on the key aspects of his role.

In a separate meeting of Independent Directors, performance of non-independent directors, performance of the Board as a whole and performance of the Chairman was evaluated, taking into account the views of executive director and non- executive directors. The same was discussed in the subsequent Board Meeting that followed the Meeting of Independent Directors.

It is intended to continue with this practice going forward and explore to enhance the scope of this exercise, if and as deemed fit.

17. FAMILIARISATION PROGRAMME FOR INDEPENDENT DIRECTORS

The Company has in place a detailed Nomination and Remuneration Policy, which is also available on the website of the Company dealing with related matters. The introductory familiarisation program is undertaken as and when there is a new induction on the Board of the Company, which, inter-alia, covers the following:

a) Introduction and meeting with other Directors on the Board and the Senior Management;

b) Brief introduction about the business and nature of industry of the Company in which it operates;

c) Roles, rights and responsibilities of directors including independent Director(s);

d) Extant Committees of Board of Directors;

e) Meetings of Board and Committees, venue, generic dates and timings when such meetings are generally held and the Annual General Meeting of shareholders of the Company;

f) The Codes of Conduct which are in place and applicable to the Directors;

g) Remuneration payable to Directors pursuant to Shareholders approval to that effect;

h) Liability Insurances taken by the Company to cover directors.

In addition to this, periodic familiarisation programs are conducted for the directors. The details of familiarisation programmes imparted to independent directors have been posted on the website on http://www.eclerx.com/Corporate%20Governance/ Details%20of%20Familiarisation%20Programmes% 20for%20Independent%20Directors.pdf

Further, the Directors have access to Management to seek any additional information, clarification and details as may be required. The Non-Executive Independent Directors of the Company were appointed / re-appointed at the Annual General Meeting held on July 10, 2014 and their letter of appointment containing the requisite familiarisation details has been posted on the website on http://www.eclerx.com/Corporate%20Governance/St andard%20terms%20and%20conditions%20of%20a ppointment%20of%20Non-Executive%20 Independent%20Directors.pdf.

18. DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to Section 134 of the Companies Act, 2013 and other applicable rules and regulations, the Directors, to the best of their knowledge and ability, confirm that:

(a) in the preparation of the annual accounts for the FY 2015-16, the applicable accounting standards had been followed along with proper explanation relating to material departures, if any;

(b) the directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2016 and of the profit or loss of the Company for the year ended on that date;

(c) the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(d) the Directors had prepared the annual accounts on a going concern basis;

(e) the Directors had laid down internal financial controls to be followed by the Company and that such Internal Financial Controls are adequate and were operating effectively;

(f) the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

19. BOARD MEETINGS

During the FY 2015-16, 8 (Eight) Board Meetings were held as follows:

May 4, 2015 May 25, 2015 Jul 17, 2015

Aug 10, 2015 Sep 11, 2015 Nov 2, 2015

Jan 29, 2016 Mar 17, 2016

The number of committees and particulars of attendance of the Directors at the board and committee meetings are detailed in the Corporate Governance Report of the Company, which forms a part of this report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013 and the Listing Regulations.

20. AUDIT COMMITTEE

Composition of Audit Committee:

Name Designation

Biren Gabhawala Chairman

Pradeep Kapoor Member

Anish Ghoshal Member

Deepa Kapoor Member

PD Mundhra Member

There were no such instances wherein the recommendations of the Audit Committee were rejected by the Board of Directors.

21. REPORTING OF FRAUD BY THE STATUTORY AUDITORS

Pursuant to Section 134 of the Companies Act, 2013 read with Rule 13 of Companies (Audit and Auditors) Rules, 2014, as amended from time to time, if an auditor of a company, in the course of performance of his duties as Statutory Auditor, has reason to believe that an offence of fraud involving individually an amount below rupees one crore, is being or has been committed against the company by its officers or employees, the auditor shall report the matter to the Audit Committee of the Company.

There were no such instances of fraud reported by the Statutory Auditor during the FY 2015-16.

22. NOMINATION AND REMUNERATION POLICY

In terms of provisions of the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended from time to time, the policy on nomination and remuneration of Directors, Key Managerial Personnel (KMP), Senior Management and other employees of the Company had been formulated by the Nomination and Remuneration Committee of the Company and was approved by the Board of Directors vide its resolution dated July 31, 2014. The policy acts as a guideline for determining, inter-alia, qualifications, positive attributes and independence of a Director, matters relating to the remuneration, appointment, removal and evaluation of performance of the Directors, Key Managerial Personnel, Senior Management and other employees. The aforesaid policy has also been posted on the Company''s website on http://www.eclerx.com/Corporate%20 Governance/Nomination%20and%20Remuneration %20policy.pdf

23. DETAILS OF ESTABLISHMENT OF VIGIL MECHANISM

Pursuant to the provisions of the Companies Act, 2013 and Listing Regulations, the Company has in place Whistle Blower Policy to encourage all employees or any other person dealing with the Company to disclose any wrongdoing that may adversely impact the Company, the Company''s customers, shareholders, employees, investors, or the public at large. This policy, inter-alia, also sets forth (i) procedures for reporting of questionable auditing, accounting, internal control and unjust enrichment matters and (ii) an investigative process of reported acts of wrongdoing and retaliation from employees, inter-alia, on a confidential and anonymous basis.

The aforesaid policy has also been posted on the Company''s website on http://www.eclerx.com/ Corporate%20Governance/WhistleBlowerPolicyandV igilMechanism.pdf

24. PARTICULARS OF LOAN, GUARANTEE AND INVESTMENTS

Particulars Amount (Rs. in Million)

Loan NIL

Guarantee Please refer Notes to Standalone Financial Statements – Note No. 35

Investment Please refer Notes to Standalone Financial Statements – Note No. 12

25. PARTICULARS OF TRANSACTIONS, CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES:

The particulars of the transactions pursuant to the provisions of inter-alia, Section 188 and the Companies (Meetings of Board and its Powers) Rules, 2014 are as under. All the transaction(s) are in the ordinary course of business and at arms'' length basis. Further details are also set out in the Notes to Standalone Financial Statements.

Pursuant to Related Party disclosure requirements under Part A of Schedule V of Listing Regulations, there are no loans and advances in nature of loans outstanding for the year ended March 31, 2016, from subsidiaries, associate companies or firms/ companies in which directors are interested.

26. SECRETARIAL AUDIT REPORT

Pursuant to Section 204 of the Companies Act, 2013, and Rules thereunder, a Secretarial Audit Report for the FY 2015-16 in Form MR 3 given by M/s. Pramod Shah & Associates, Company Secretary in practice is attached as Annexure-III with this report. The Secretarial Auditors'' Report does not contain any qualification, reservation or adverse remark.

27. PARTICULARS OF CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

Information as required, inter-alia, under Section 134 of the Companies Act, 2013, is given in the Annexure IV forming part of this report.

28. ENTERPRISE WIDE RISK MANAGEMENT SYSTEM AND RISK MANAGEMENT POLICY

Your Company has in place a well-defined Enterprise Wide Risk Management (''EWRM'') framework and Risk Management Policy which, inter-alia, aims at the following:

1. Alignment of risk appetite and strategy of the organisation by evaluating strategic alternatives, setting related objectives, and developing mechanisms to manage related risks.

2. Enhancement in risk response decisions by identifying and selecting among alternative risk responses – risk avoidance, reduction, sharing, and acceptance.

3. Reduction / elimination of operational surprises and losses by identifying potential events and establishing responses and reducing associated costs or losses.

4. Identification and management of multiple risks by facilitating effective response to the interrelated impacts and integrated responses to such risks.

5. Improvement in deployment of capital by providing robust risk information to the Management so as to effectively assess overall capital needs and prudently manage capital allocation

The framework is periodically reviewed by senior management to ensure that the risks are identified, managed and mitigated. The same is also periodically reported to the Audit Committee and the Board of Directors. The Company has also laid down procedures to inform the Board of Directors about risk assessment and minimisation procedures.

29. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION & REDRESSAL) ACT, 2013

The Company has in place an Anti-Sexual Harassment Policy in line with requirements, inter- alia, of The Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013. An Internal Compliance Committee has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary and trainee) are covered under this policy.

The following is a summary of sexual harassment complaints received and disposed off during the FY 2015-16:

- No. of complaints received: Nil

- No. of complaints disposed off: Nil

30. CORPORATE SOCIAL RESPONSIBILITY

Brief outline on the CSR Policy

The Company continues to earmark a corpus every year for CSR activities. The eClerx Cares team under the guidance of CSR Committee is responsible for championing all philanthropy and CSR initiatives of the Company. The mission of eClerx Cares is committed to being participants of progress by supporting initiatives in education and child welfare to help measurably improve the lives of underprivileged children.

Our partner NGOs are selected for their projects on child rights and education which is one cause, that resonates broadly within the Company. At eClerx, we believe that money is only ever a small part of the solution and our ethos involve the entire organisation heartily contributing to making a difference either through donating clothes and other material for people in distress, volunteering their time in training, running marathons for a cause, or engaging with children from schools we sponsor through our corporate funding.

Employee Engagement

There is an increased interest shown by our employees to volunteer and support our partner NGOs.

Through Payroll Giving, the Company matches employee''s contribution by 1:1. Employees can choose to contribute a fixed amount deducted monthly through CRY or choose to sponsor annual fees through Nanhi Kali or CRY for primary or secondary education.

Employees are also encouraged to participate in the engagement activities laid out across the year . In FY 2015-16, the engagement activities where employees participated enthusiastically are listed below:

- A 120-member team of Company''s employees participated in the Standard Chartered Mumbai Marathon pledging their support to the cause of education for the poor and downtrodden;

- Annual Learn-and-Fun event for the students of schools sponsored through our corporate funding;

- ''Be a Santa'' – activity where employees donated gifts requested by children of an NGO supported by us at each location;

- One day salary contribution drive towards Maharashtra drought relief through Dilasa Sanstha;

- Visit to 5 LAHI schools by Senior management during eClerx''s annual day at Pune in December 2015 where the school children engaged our Senior Leads in various activities like gardening and agricultural techniques – land preparation and seed plantation, welding and carpentry, wall graffiti on classroom walls, and food processing – preparing and packaging sweets.

While the Company continues to provide expert outsourcing options, it has not lost sight of its commitment to play its role as an enlightened corporate citizen. Corporate Social Responsibility had always been on its agenda and it has also seen increasing interest and partnership from our employees to join hands on various initiatives. In U.S.A. and U.K., the Company supports numerous child education and health-related causes for Cancer, etc.

Other Details:

a. Corporate Social Responsibility Policy:

The Company has in place Corporate Social Responsibility Policy.

b. Web-link of the CSR Policy and projects or programs CSR Policy is available on the website of the Co m pa ny http: // w w w. e c ler x. com/ Corporate%20Governance/eClerx%20CSR%20po licy%20final%20-%20Jan2016.pdf

c. Composition of CSR Committee

Name Designation

Deepa Kapoor Chairperson

Anish Ghoshal Member

Biren Gabhawala Member

PD Mundhra Member

d. Average Profit Before Tax for last 3 Financial Years

Average Net Profit Financial Year (Rs. in million)

2012-13 1,906.34

2013-14 3,090.23

2014-15 2,700.34

Total Profit 7,696.91

Average Profit 2,565.64

e. Prescribed CSR Expenditure (2% of the average profit as in item (d) above):- Rs. 51.31 Million

f. Details of CSR spent during the financial year

(a) amount spent during Financial Year: Rs. 51.68 Million

(b) amount unspent, if any: Nil

(c) Manner in which the amount spent during the financial year is detailed below:

Sr. CSR Sector in which Projects or Amount No. Projects the project is programs outlay or covered 1.Local Area (budget) activities or other project or identified 2.Specify the State program wise and district where (Rs. in Million) projects or program was undertaken

1 Samparc Child Education Other-Maharashtra 14.78

2 Muktangan Child Education Local Area-Mumbai 9.49

3 Magic Bus Child Education Other-Maharashtra 5.56

4 Lend a Hand Child Education Other-Maharashtra 5.70 India

5 Sanskriti Child Education Other-Maharashtra 5.30 Samvardhan Mandal

6 Dilasa Drought Relief Other-Maharashtra 5.65 Sanstha

7 Amar Bharat Child Education Other-Bengal 3.50 Vidyapeeth

8 CRY Child Education Local Area-Mumbai 0.68

9 K C Mahindra Child Education Local Area-Mumbai 0.43 Trust A/C Nanhi Kali

10 United Way Child Education Local Area-Mumbai 0.32 (Administrative Expenses)

Total 51.41

CSR Amount spent Projects on the Cumulative Amount or activities projects or programs expenditure upto spent: Direct identified Sub heads: March 31, 2016 or through 1.Direct expenditure (Rs. in Million) implementing on projects agency* or programs 2.Overhead (Rs. in Million)

Samparc 14.78 14.78 Through Implementing Agency

Muktangan 9.49 9.49 Through Implementing Agency

Magic Bus 5.83 5.83 Through Implementing Agency

Lend a Hand India 5.70 5.70 Through Implementing Agency

Sanskriti Samvardhan Mandal 5.30 5.30 Through Implementing Agency

Dilasa Sanstha 5.65 5.65 Through Implementing Agency

Amar Bharat Vidyapeeth 3.50 3.50 Through Implementing Agency

CRY 0.68 0.68 Through Implementing Agency

K C Mahindra Trust A/C Nanhi Kali 0.43 0.43 Through Implementing Agency

United Way 0.32 0.32 Through Implementing Agency

Total 51.68 51.68

*Details of implementing Agency(ies):

Samparc

- eClerx funds support for rural and tribal underprivileged children of Mulshi village;

- Project to support SAMPARC school and hostel, Bhambarde;

- Project for Higher Education Support for senior girls of SAMPARC;

- Special education support for the children of Shel-Pimpalgaon and Poynad Balgram;

- Vocational training support to the rural school dropouts;

- Capital expenses Project - fencing of girls children''s home (Orphanage) Bhaje and construction of girls hostel at Bhambarde;

- Construction of Girls Toilet at Maval & Mulshi Taluka Dist Pune, under the Swachh Bharat Swachh Vidyalaya Scheme.

Muktangan

- eClerx wholly funds 1 school (pre-school to Std. VIII) in Mumbai;

- Support for 350 students (including 26 differently abled children) and 46 teachers at Dr. Ambedkar Municipal School, Parel - children of defunct mill workers and odd job workers;

- Apart from academics, the students develop aesthetic skills and appreciation through participation in performing and creative arts (e.g. drama, music, sports etc.).

Magic Bus

- eClerx funds the child education program by Magic Bus which targets to holistically develop the child and implement the behaviour change leading to development of positive attitude and behaviour toward education, gender equality, health elements of the children''s school cycle;

- Magic Bus Sports for Development Program implemented in carefully chosen underprivileged communities of Mumbai and Pune;

- Children living in shanties in the Mumbra and Kalwa localities in Mumbai and Sanjay Gandhi Nagar and Anand Nagar in Pune. Their economic condition does not permit them to live normal lifestyle.

Lend-A-Hand-India (LAHI)

- eClerx funds provides job and life skills training to 6000 young boys and girls as part of secondary school curriculum under "Project Swadheen" in high schools all over Maharashtra including Mumbai, Thane and Raigad district;

- Project Swadheen introduces students to multiple vocational trades; enhancing problem solving skills, and increasing the high school graduation rate and enrollment in technical education courses.

Sanskriti Samvardhan Mandal - Strengthening Resources for Emerging Excellence (SREE)

- Project Sagroli Ahead - A support project to Quality Education. Objective is to create education friendly atmosphere in Sagroli village by initiating well designed various curricular and extracurricular activities for overall development of the students.

- Project Sagroli Sunrise – A project to carve rural athletes. Objective is to carve career of the rural children in sports, athletics in particular. The project has been felicitated as ''The real Heroes of the Nation'' by CNN IBN in 2006. Project funding for necessary tools & equipment for athletes, diet, coach and other recurring expenses.

- Vocational Training Center (VTC) ''Utkarsh'' – Objective is to empower unemployed rural youths with vocational skills making them self-reliant.

- School Infrastructure - Updation of infrastructure because of inadequate, irregular and scanty financial support from the Government. Funding for dual desk, science laboratory tools, equipment, apparatus and teaching aids.

- Primary School upgrade - Renovation and expansion of 50 year old school. School building is now insufficient for increasing number of students and class room educational activities, so new class rooms need to be provided. Construction of first floor (7 class rooms and 1 recreation hall).

Dilasa Sanstha

- eClerx adopts 4 villages – Bhogji, Adsulwadi, Adhala, and Fakrabad in Kalamb and Washi Block of Osmanabad District in the drive for drought relief;

- Drought eradication program through Natural Resource Management (NRM) with community Participation;

- Activities conducted related to water and land management - Phad irrigation schemes, Pasture Development, Horticulture - Soil Conservation Watershed Development, Creation of self-help groups, implementation of income generating projects, irrigation through Dam Canals.

Amar Bharat Vidyapeeth - Parivaar

- eClerx works with Parivaar to fund Amar Bharat Vidyapeeth in Bengal;

- Working for development of orphans, girl children highly vulnerable to exploitation, victimization, and trafficking, street children, abandoned children, extremely impoverished children from tribal areas at Parivaar Ashram, Village - Barkalikapur, West Bengal;

- Each resident child once admitted is under the care and custody of Parivaar till higher education (graduation/post-graduation) and subsequent job placement and settlement into the future phase of life;

- Currently 1160 resident children are in the school starting from the age of 4 years.

Child Rights and You (CRY)

- eClerx wholly funds the KMAVGS initiative run by CRY in Maharashtra;

- Providing education, healthcare and spreading awareness on child rights.

Nanhi Kali

- eClerx supports education for underprivileged girls.

We hereby declare that implementation and monitoring of the CSR Policy are in compliance with CSR Policy and in compliance with CSR objectives and Policy of the Company.

PD Mundhra Deepa Kapoor

Mumbai Executive Director Chairperson

May 20, 2016 CSR Committee

Further, details of the implementing agencies can be accessed on the website of the Company, www.eClerx.com.

31. AWARDS AND ACCOLADES

Your Company is proud to have received the following awards and accolades during the period under review:

- recognised in CIO 100 – eTMS (Transport Management System) has been selected as an industry best practice in CIO 100 awards;

- recognised at Asia Outsourcing Excellence Awards in the category ''Use of IT for Operations Excellence'';

- won the Dataquest Business Technology Awards;

- recognised as a 2015 MAKE (Most Admired Knowledge Enterprise) India winner and the larger 2015 MAKE Asia winner. The 2015 MAKE panel recognized eClerx Services for managing customer/stakeholder knowledge;

- won the NetApp Innovation Awards 2015;

- recognised as a finalist in four categories at NOA (National Outsourcing Awards), 2015.

32. REMUNERATION DETAILS PURSUANT TO COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014 AND OTHER APPLICABLE PROVISIONS

- Details of the ratio of the remuneration of each director to the median employee''s remuneration (approx):-Executive Director:1:84; Non-Executive Non Independent Director: NA; Non-Executive Independent Director:1:5.65 (excluding sitting fees);

- The percentage increase in remuneration of each Director, Chief Financial Officer, Chief Executive Officer, Company Secretary or Manager, if any, in the financial year:- Executive Director: 0%, Non Executive Independent Directors: 25%, Chief Financial Officer: 10% and Company Secretary: 11.5%;

- The percentage increase in the median remuneration of employees in the financial year:- 5.1%;

- The number of permanent employees on the rolls of the Company:- On rolls employee count as on March 31, 2016 was 8,550;

- The explanation on the relationship between average increase in remuneration and company performance:- Average increase in remuneration is decided based on salary benchmarking done with industry peers to ensure retention of experienced employees. Company performance has indirect linkage to overall compensation of senior management;

- Comparison of the remuneration of the Key Managerial Personnel against the performance of the company (KMP includes ED, CFO and CS):- ESOPs granted to CFO and CS have company performance linked vesting conditions i.e. lesser number of options vest if the company does not do well and /or is perceived to have not done well. ED has a significant variable component which is determined by Board based on various financial metrics of the company including revenue, profitability and reduction of risk. Further the details of performance of the Company are elaborated in this Annual Report;

- Variations in the market capitalisation of the company, price earnings ratio as at the closing date of the current financial year and previous financial year and percentage increase over decrease in the market quotations of the shares of the company in comparison to the rate at which the company came out with the last public offer:

March 31 March 31 At the time 2016 2015 of IPO

Price Earning Ratio

Basic 14.55 20.91 NA

Diluted 14.87 21.39 NA

Share Price on NSE (Rs.) 1,299.15 1,585.55 315

Number of outstanding Shares 40,788,686 30,350,885 18,868,849

Market Cap (Rs. Mln.) 52,990.62 48,122.85 5,943.69

Increase over the IPO (%)* 725%

*Following are details of bonus shares issued by the Company:

(i) bonus shares in the ratio of one Equity Share for every two Equity Shares of Rs. 10 each held in July, 2010.

(ii) bonus shares in the ratio of one Equity Share for every three Equity Shares of Rs. 10 each held in December, 2015.

- Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison wth the percentile increase in the managerial remuneration and justification thereof and reasons for any exceptional circumstances for increase in managerial remuneration:- 10.2% for employees other than senior managerial personnel v/s 9.2% percentile increase in the senior managerial remuneration. The increase is determined based on salary benchmarking done with industry peers to ensure retention of experienced employees. Company performance has indirect linkage to overall compensation of senior management;

- The ratio of the remuneration of the highest paid Director to that of the employees who are not Directors but receive remuneration in excess of the highest paid director during the year:- No such employee (excluding ESOP gain);

- The key parameters for any variable component of remuneration availed by the directors:- There is no variable component for Non Executive Independent Directors. The Non Executive Non Independent Directors are not paid any remuneration by the Company. As regards the remuneration of Executive Director, pursuant to the corresponding shareholders resolution, annual performance bonus is decided by the Board of Directors, on merit based and takes into account the Company''s performance while factoring key parameters like:

- Profitability (PAT, PBT, OPM)

- Return on shareholders investment

- Statutory compliances

- Revenue and revenue quality

- Salary details of employees employed throughout the financial year, was in receipt of remuneration for that year which, in the aggregate, was not less than Rs. 60 Lakhs are given in the Annuxure-V forming part of this report;

- Salary details of an employee employed for a part of the financial year, was in receipt of remuneration for any part of that year which, in the aggregate, was not less than Rs. 5 Lakhs per month are given in the Annuxure-V forming part of this report;

- The Company affirms that the remuneration is as per the remuneration policy of the Company.

Managerial Remuneration details:

Particulars Executive Director

All elements of Annual Gross Salary: Within the range between Rs. remuneration package 13,800,000 to Rs. 27,600,000 per annum with such as salary , annual increments effective 1st April each year as benefits, stock options, may be decided by the Board, based on merits and pension etc. of all taking into account the Company''s performance for directors the year. The benefits, perquisites and allowances will be determined by the Board of Directors from time to time.

Details of fixed Basic Salary: Rs 13.80 Million p.a. component and Annual Performance Bonus: Rs 11.73 Million The actual entitlement out of Annual Performance performance linked Bonus will be decided by the Board of Directors and incentives along with will be merit based and take into account the performance criteria Company''s performance while factoring key parameters like:

- Profitability (PAT, PBT, OPM)

- Return on shareholders investment

- Statutory compliances

- revenue and revenue quality

Service contract, The tenure will be subject to termination by three (3) notice period, months prior notice in writing on either side, and all severance fees other terms are as per the Company policy.

Stock option details NA

Particulars Non-Executive & Non-Executive Independent Director Director

All elements of rmuneration package such as salary, benefits, stock options, pension etc. of all directors Nil Payment of Remuneration by way of commission of Rs. 15 Lacs per director p.a.

Details of fixed component and performance linked Remuneration will be Nil incentives along with paid in proportion to the term served in the Company, performance criteria during the year.

Service contract, notice Pursuant to the provisions of the Companies period, severance fees Act, 2013 and other relevant regulations

Stock option details No such options were NA granted in FY 2015-16

33. EMPLOYEES'' STOCK OPTION PLAN

Pursuant to the applicable requirements of the erstwhile Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 (''the SEBI guidelines''), your Company had framed and instituted Employee Stock Option Plan 2008 (''ESOP 2008'') & Employee Stock Option Plan 2011 (''ESOP 2011'') to attract, retain, motivate and reward its employees and to enable them to participate in the growth, development and success of the Company. Further, during the year under review, your Company has also instituted Employee Stock Option Scheme/ Plan 2015 as per the SEBI (Share Based Employee Benefits) Regulations, 2014 pursuant to the special resolution passed by the shareholder at the Fifteenth Annual General Meeting on July 17, 2015 and approved a total number of 1,600,000 options under this scheme The Scheme envisages an ESOP Trust which is authorised for secondary market acquisition. However, no options have been granted under the Scheme as on March 31, 2016 and the Company is in the process of instituting the ESOP trust post which rest of activities for implementation thereof, would follow.

Your Company has granted stock options from time to time under the said ESOP Schemes to its employees and also to employees of its subsidiaries. The following table sets forth the particulars of stock options granted under ESOP 2008 and ESOP 2011 as on March 31, 2016:-

Particulars ESOP 2008* ESOP 2011*

Options granted during the year Nil 604,110

The exercise price shall be equal to The exercise price shall be equal to the lower of the following: the lower of the following: a) the latest available closing a) the latest available closing market price (at a stock market price (at a stock exchange where there is highest exchange where there is highest trading volume on said date) on trading volume on said date) on Pricing formula the date prior to the date on the date prior to the date on which the Remuneration which the Remuneration Committee finalises the specific Committee finalizes the specific number of options to be granted number of options to be granted to the employees or to the employees or

b) Average of the two weeks high b) Average of the two weeks high and low price of the share and low price of the share preceding the date of grant of preceding the date of grant of option on the stock exchange on option on the stock exchange on which the shares of the company which the shares of the company are listed. are listed.

Options vested as on 31.03.2016 (net) 55,867 79,301

Options exercised and allotted during 147,851 109,341 the year

The total number of equity shares arising 147,851 109,341 as a result of exercise of options

Options lapsed/ forfeited /expired during 1 545,447 the year

Variation of terms of options during Nil Nil the year

Money realised during the financial year 2015-2016 by exercise of options 1,478,510 1,093,410 (nominal value)

Total number of options outstanding at 55,867 1,988,055 the end of the year

Details of options granted to Employee:

(i) Senior Managerial Personnel As per statement attached As per statement attached

(ii) Any other employee receiving a grant Fiscal 2009-10:- Scott Houchin Fiscal 2012-13:- Scott Houchin in any one year of option amounting to Fiscal 2010-11:- Scott Houchin Fiscal 2013-14:- Nil 5% or more

Fiscal 2011-12:- Scott Houchin Fiscal 2014-15:- Nil

Fiscal 2015-16:-Nil

(iii) Identified employees who were Nil granted option, during any one year, Nil equal to or exceeding 1% of the issued capital (excluding outstanding warrants and conversions) of the Company at the time of grant.

Rs. 71.63 for the year ended on March 31, 2016 Diluted Earnings Per Share (EPS) pursuant to issue of shares on exercise of option calculated in accordance with Accounting Standard (AS 20 ''Earning Per Share'')

Method used to account ESOPs Intrinsic value

Impact on profits: Rs. 61.55 million Difference, if any, between the employees compensation cost calculated using the intrinsic value of stock options and the Diluted EPS : Rs. 70.24 (post adjustment for aforesaid impact on profits) employee compensation cost recognised if the fair value of the options had been used and the impact of this difference on profits and EPS of the Company.

Vesting Schedule/ Requirements and Options granted under the respective ESOP Scheme(s) / Plan(s) would not maximum term of options granted earlier than one year and not later than five years from date of grant of such options.

*Pursuant to Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 and Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 , the number of options have been suitably adjusted, as required, for Bonus issue in July 2010 in the ratio of 1:2 i.e. one bonus option for every two options held and in December 2015 in the ratio of 1:3 i.e. one bonus option for every three options held.

Requisite disclosures pertaining to ESOPs as per Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 are provided in the Annual report of the Company,as also on the weblink: http://www.eclerx.com/Pages/Corp_Investors_Financials.aspx. For determination of expected volatility the Company followed Black and Scholes formula.

During the year, the Nomination and Remuneration Committee has approved the closure of ESOP Scheme 2005 and ESOP Scheme 2008 and there will not be any further dilution under the said Schemes /Plans for fresh grants/options not granted/subsequently forfeited. Also, there will be no grant of shares under ESOP Scheme 2011 henceforth.

Further, under ESOP Scheme 2015, the number of grantees has been reduced and is restricted to top senior management. The other employees who were being granted ESOPs earlier, will now receive deferred cash incentives. Thus the expected dilution for fresh grants will be reduced to about 0.8% of then equity capital as against about 2% in the past.

Details of options granted to senior managerial persons of your Company as on March 31, 2016:

Name of key managerial No. of options No. of options No. of options ESOP Scheme personnel granted* exercised* out standing #*

Hoshi Mistry 57,000 49,000 0

ESOP 2008 Rohitash Gupta 68,500 49,000 0

Sandeep Dembi 42,000 34,000 0

Hoshi Mistry 41,467 3,334 31,467

Rohitash Gupta 41,467 3,334 31,467

Sandeep Dembi 42,578 0 35,912

ESOP 2011 Sanjay Kukreja 47,024 0 40,356

Chitra Padmanabhan 35,467 0 35,467

Amit Bakshi 35,467 0 35,467

Details of options granted to senior managerial persons of foreign subsidiaries of your Company as on March 31, 2016:-

Name of key managerial No. of options No. of options No. of options ESOP Scheme personnel granted* exercised* out standing #*

John Stephens 17,000 4,999 4,001

ESOP 2008 Scott Houchin 150,001 116,668 0

Scott Houchin 125,555 15,556 86,666

John Stephens 53,778 0 47,112

ESOP 2011 Alan Paris 65,234 12,566 42,668

Robert Horan 48,000 0 48,000

Roberto Antoniotti 16,000 0 16,000

#The above options are linked with the performance criteria and the actual number of options which vest could be considerably lower if the respective performance criteria is/are not met.

*Pursuant to SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines 1999, and SEBI (Share based Employee Benefits) Regulations, 2014, the number of options have been adjusted, as required, for Bonus issue in December 2015 in the ratio of 1:3, that is, one bonus option for every three options held.

The difference between the intrinsic value of the shares underlying the options granted on the date of grant of option and the option price is expensed as Employees Compensation over the period of vesting. Accordingly, the impact of the same was Rs. (3.40) million on the Statement of profit and loss account for the year ended on March 31, 2016 as employee compensation cost.

The equity shares to be issued and allotted under the ESOP schemes i.e. ESOP 2008 and ESOP 2011 of the Company shall rank pari-passu in all respects including dividend with the existing equity shares of the Company.

34. HUMAN RESOURCE MANAGEMENT

Learning is a sustainable, participative process that facilitates the development of people through their own processing of information into knowledge and skills that can be effectively utilised on the job. Recognising people development as a true differentiator over competitors, the Company significantly invested in high-value training and development programs this year.

Business Analytics being identified as a key focus area, the Company sponsored employees to undergo hands-on analytics programs from some of the best institutes in India. Additionally, in-house trainers were certified on new analytics tools and platforms, which were then internalised for employees as part of the on-going capability development program.

To ensure a good success rate of managers in jobs of higher complexity, it is vital to assess their readiness for such roles, prior to assigning greater responsibilities to them. As an integral part of its HIPO (high potential) program, the Company runs in- house Potential Development Centres for competency assessment and development. A team of seasoned practitioners from the organization and industry are involved in assessing the competencies of select managers through multiple, validated evaluation techniques. The output is a list of strengths and development needs that are then leveraged and worked upon through individual development plans, thereby creating a pool of high-potential, high- performing managers who are ready to take on the next role.

As a testament to our pledge for continuous learning and development, in January 2016, the Company was named a MAKE (Most Admired Knowledge Enterprise) India winner for the fifth straight year. Additionally, this is the third year that the Company has won the MAKE Asia award; and this time, the Company ranked first on the dimension ''creating value from customer / stakeholder knowledge''.

35. CORPORATE GOVERNANCE

The Securities and Exchange Board of India (SEBI) has prescribed certain corporate governance standards vide regulations 24 and 27 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. Your Directors reaffirm their commitments to these standards and a detailed Report on Corporate Governance together with the Auditors'' Certificate on its compliance is annexed hereto.

36. SUCCESSION PLANNING

The Company has succession plan in place for orderly succession for appointments to Board and to senior management.

37. GREEN INITIATIVE BY THE MINISTRY OF CORPORATE AFFAIRS

The Ministry of Corporate Affairs (''MCA'') has taken a Green Initiative in Corporate Governance by permitting electronic mode for service of documents to members after considering relevant provisions of the Information Technology Act, 2000 and Companies Act, 2013 and rules made thereunder (''the Act'').

Pursuant to provisions of Act, service of documents to members can be made by electronic mode on the email address provided for the purpose of communication. If a member has not registered an email address, other permitted modes of service would continue to be applicable.

Your Company sincerely appreciates shareholders who have contributed towards furtherance of Green Initiative. We further appeal to other shareholders to contribute towards furtherance of Green Initiative by opting for electronic communication.

This initiative will ease the burden on corporates (and the environment) for sending physical documents such as notices, annual reports etc. The members who have not provided their email address will continue to receive communications, dissemination, notice(s), documents etc. via permitted mode of service of documents. Further the shareholders, who request for physical copies, will be provided the same at no additional cost to them.

38. ACKNOWLEDGEMENT

Your Directors take this opportunity to express their sincere appreciation to the Company''s customers, vendors, investors, consultants, business associates, bankers and employees for their support and co- operation to the Company.

Your Directors are also thankful to the Government of India, the Government of various countries, the concerned State Governments and regulatory agencies for their co-operation.

Your Directors also acknowledge the hard work and effort made by every member of the eClerx family across the world and express their sincere gratitude to the Members for their continuing confidence in the Company.

For and on behalf of the Board of Directors

eClerx Services Limited

V. K. Mundhra

Chairman

Place: Mumbai

Date: May 20, 2016


Mar 31, 2015

Dear Members,

The Directors are pleased to present their Fifteenth Annual Report along with the audited annual accounts for the financial year ended March 31, 2015.

1. FINANCIAL HIGHLIGHTS

Key aspects of Standalone Financial Performance / Operating Performance of the Company for the year ended March 31, 2015 are tabulated below:-

(Rupees in million) Particulars 2014-15 2013-14

Income from Services 8,183.35 7,133.84

Other Income 318.14 157.63

Total Revenue 8,501.49 7,291.47

Operating Expenses 5,515.48 4,057.96

EBITDA 2,986.01 3,233.51

EBITDA% 35.12% 44.35%

Depreciation and goodwill amortization 285.67 143.28

Earnings before Exceptional 2,700.34 3,090.23

Items, Interest, & Tax

Taxes 542.68 625.13

Net Profit after Tax 2,157.66 2,465.10

NPM% 25.38% 33.81%

Year in Retrospect

On a standalone basis the total income increased to Rs. 8,501.49 million from Rs. 7,291.47 million in the previous year at a growth rate of 14.71%. The EBITDA amounted to Rs. 2,986.01 million as against Rs. 3,233.51 million in the previous year. The Company earned Net Profit After Tax (PAT) of Rs. 2,157.66 million for the year as against Rs. 2,465.10 million during the previous year.

2. INFORMATION ON STATE OF AFFAIRS OF THE COMPANY

Information on operational and financial performance, etc., is provided in the Management Discussion and Analysis

Report, which is annexed to the Directors'' Report and has been prepared, inter-alia, in compliance with the terms of Clause 49 of the Listing Agreement with Indian Stock Exchanges.

3. DIVIDEND

After considering the Company''s profitability, cash flow and overall financial performance, your Directors are pleased to recommend a dividend of Rs. 35/- (350%) per share. The total quantum of dividend if approved by the Members will be about Rs. 1,062 million while about Rs. 222 million will be paid by the Company towards dividend tax and surcharge on the same.

The Company had paid a dividend of Rs. 35/- per share (350%) for the year ended March 31, 2014.

The register of members and share transfer books will remain closed from Saturday, July 11, 2015 to Friday, July 17, 2015 (both days inclusive) for the purpose of ascertaining entitlement for the said final dividend. The Fifteenth Annual General Meeting of the Company is scheduled to be held on Friday, July 17, 2015.

4. PUBLIC DEPOSITS

During the year, your Company has not accepted any deposits within the meaning of the provisions of Section 73 of the Companies Act, 2013.

5. SUBSIDIARY COMPANIES

The Company has following subsidiaries as on March 31, 2015:

S. No. Name of Subsidiary(ies)

1 eClerx Investments Limited (BVI)

2 eClerx LLC (U.S.A.)

3 eClerx Limited (U.K.)

4 eClerx Private Limited (Singapore)

5 Agilyst Inc. (U.S.A.)

6 Agilyst Consulting Private Limited (India), a subsidiary being the subsidiary of Agilyst Inc. (U.S.A.)

7 eClerx Investments (U.K.) Limited (U.K.)

Further, w.e.f, April 21, 2015, the following entities are also subsidiaries of the Company:

S. No. Name of Subsidiary(ies)

1 CLX Europe SPA.(Italy) a step down subsidiary being the subsidiary of eClerx Investments (U.K.) Limited

2 Sintetic S.R.L (Italy), Step-down subsidiary

3 CLX Media Solutions GmbH (Germany), Step- down subsidiary

4 CA Europe Media Solutions Limited (U.K.), Step-down subsidiary

Further CA Europe SPA (Italy) holds about 49% in CA Thai Company Limited (Thailand),

6. PERFORMANCE AND FINANCIAL POSITION OF EACH OF THE SUBSIDIARIES, ASSOCIATES AND JOINT VENTURES COMPANIES INCLUDED IN THE CONSOLIDATED FINANCIAL STATEMENT

Pursuant to Section 136 of the Companies Act, 2013, the Financial Statements including Consolidated Financial Statements, if any, along with relevant documents have been posted on the Company''s website www.eClerx, com, The same are open for inspection at the Registered Office of the Company on all working days except Saturday between 11.00 a.m. to 6.00 p.m. up to the date of the Annual General Meeting,

A statement containing salient features of performance and financial position of each of the subsidiaries included in the financial statement is attached as Annexure - I to this Report in the prescribed format.

7. ACQUISITION OF CLX EUROPE S.P.A. (ITALY)

Your Company signed on March 31, 2015, a definitive agreement to acquire 100% of CLX Europe SPA. (''CLX'') a joint stock limited liability company incorporated in 1969 under the laws of Italy, having its Registered Office at Via Dell'' Artigianato, 8, 37135 Verona VR, Italy, through its overseas subsidiary eClerx Investments (U.K.) Limited, thereby making CLX a step-down subsidiary of eClerx Services Limited, India. The consideration for the acquisition, an amount not exceeding, INR 1,687.75 Million is/will be in all cash and funded from the Company''s internal accruals. CLX creates, manages and delivers creative assets globally to the multi-channel market for luxury brands and major retailers. The accounts of CLX have not been consolidated with the Accounts of the Company as such because that even though the definitive agreement was signed on March 31,2015 but the closing documents to effect the said acquisition were signed on April 21, 2015, i.e. post end of Financial Year 2014-15.

8. DETAILS IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS wITH REFERENCE TO THE FINANCIAL STATEMENTS

The Internal Financial Controls (IFC) as per explanation to Section 134(5)(e) of the Companies Act, 2013 are reviewed by your management and key areas are subject to various statutory, internal and operational audits based on periodic risk assessment. The findings of the audits are discussed with the management and key findings are presented before the Audit Committee for review of actionable items.

The review of the IFC, inter-alia, consists of the following three components of internal controls:

A. Entity level controls;

B. Key financial reporting controls; and

C. Internal controls in operational areas.

9. INCREASE IN SHARE CAPITAL

Particulars No. of shares Amount in Rs.

Issued, subscribed and Paid-up Capital as on April 30,176,907 301,769,070 1, 2014

Add: Number of shares

allotted during the year FY 173,978 1,739,780 2015

Issued, subscribed and Paid-up Capital as on 30,350,885 303,508,850 March 31, 2015

10. STATUTORY AUDITORS

M/s. S. R. Batliboi & Associates LLP, Chartered Accountants, Mumbai, [ICAI Registration No. 101049W] the Statutory Auditors of the Company, were appointed by the Shareholders at their meeting held on July 10, 2014 for a period of 5 years i.e. upto conclusion of Nineteenth Annual General Meeting subject to ratification by Shareholders at every Annual General Meeting as per the provisions of the Companies Act, 2013 (''Act''). Pursuant to the Act, Members are requested to consider ratification of their appointment and authorise the Board of Directors including Audit Committee thereof to fix their remuneration for the Financial Year 2015-16. In this regard, the Company has received a Certificate from the Auditors to the effect that their appointment as Auditors continues to be in accordance with the provisions of the Act.

11. EXTRACT OF ANNUAL RETURN

Information as required under Section 134(3)(a) of the Companies Act, 2013 read with the Companies (Management and Administration) Rules, 2014 are given in the Annexure-II forming part of this report.

12. SIGNIFICANT AND MATERIAL ORDERS

There are no significant and material order passed by the Regulators or Courts or Tribunals impacting the going concern status and Company''s operations in future.

13. DIRECTORS

In accordance with the Articles of Association of the Company, V, K. Mundhra, [DIN:00282180] retire from office by rotation, and being eligible, offer himself for re-appointment at the forthcoming Annual General Meeting of the Company, The brief resume of V, K. Mundhra as required, inter-alia, in terms of Clause 49 of the Listing Agreement is included in this Annual Report. Further, the required proposal for re-appointment of the above Director at the forthcoming Annual General Meeting is included in the Notice convening this Annual General Meeting. V, K. Mundhra is not a key managerial personnel pursuant to the provisions of Companies Act, 2013.

During the year under review Nityanath Ghanekar, Non- Executive Independent Director resigned with effect from July 1, 2014 due to personal reasons. Directors place on record, their sincere appreciation for the assistance and guidance provided by him during his tenure as Director of the Company.

14. DECLARATION BY INDEPENDENT DIRECTOR(S)

The Company has received Certificate of Independence from all Independent Directors, inter-alia, pursuant to Section 149 of the Companies Act, 2013, confirming and certifying that they have complied with all the requirements of being an Independent Director of the Company.

15. BOARD AND COMMITTEE EVALUATION

The Companies Act 2013, rules thereunder and the Listing Agreement provide that the Annual Report of the Company shall disclose the following:

- Manner in which formal performance evaluation of the Board, its Committees, and Individual Directors has been carried out; and

- Evaluation criteria.

To this effect, the Board of Directors appointed an external expert on Board evaluation, for facilitating and carrying out the said evaluation who carried out the review, analysis, and evaluation and submitted its report. This exercise, inter- alia, aimed at evaluation of the Board at a collective level and evaluation of individual board members, including peer review and self-assessment. The individual reports were submitted to respective directors whereas the Board level report was placed before the Nomination and Remuneration Committee as well as the Board of Directors, for review, requisite noting and action items.

The said review was carried out, based on pre-defined comprehensive checklist(s) covering evaluation criteria(s), inter-alia, modelled on the following factors:

- Accountability towards shareholders;

- Critical review of business strategy;

- Conducive environment for candid communication and rigorous decision making;

- Board''s focus on wealth finalises of shareholders;

- Board''s ability to demand and foster higher performance;

- Business Continuity preparedness;

- Skill Set and mix thereof among Board members;

- Flow of information so as to enable informed opinions by the Directors;

- Adequacy of meetings of directors in terms of frequency as well as the time dedicated for discussions and deliberations.

The peer review checklist encouraged the Directors to share their feedback, suggestions and opinions frankly which were then collated and submitted to each of the directors for noting, information and requisite future action, as deemed fit.

On the same lines, review of committees of Board of Directors was also conducted based on pre-defined comprehensive checklist(s) covering evaluation criteria(s), inter-alia, modelled on the following factors:

- Contribution, controland counselling by the Committee on various matters;

- Qualitative comments / inputs;

- Deficiencies observed, if any;

- Qualification of members constituting the

Committee;

- Attendance of Committee members in the

respective meetings;

- Frequency of meetings.

In addition, the Chairman was also evaluated on the key aspects of his role.

The findings of this exercise were also placed before the Nomination and Remuneration Committee and the Board for review, evaluation and noting.

In a separate meeting of Independent Directors, performance of non-independent directors, performance of the Board as a whole and performance of the Chairman was evaluated, taking into account the views of executive director and non-executive directors. The same was discussed in the subsequent Board Meeting that followed the Meeting of Independent Directors.

It is intended to continue with this practice going forward and explore to enhance the scope of this exercise, if and as deemed fit.

16. FAMILIARISATION PROGRAMME FOR INDEPENDENT DIRECTORS

The Company has in place a detailed Nomination and

Remuneration Policy, which is also available on the website of the Company dealing with related matters. The Familiarisation program is undertaken as and when there is a new induction on the Board of the Company, which, inter- alia, covers the following:

a) Introduction and meeting with other Directors on the Board and the Senior Management;

b) Brief introduction about the business of the Company;

c) Roles and responsibilities of directors;

d) Extant Committees of Board of Directors;

e) Meetings of Board and Committees, venue, generic dates and timings when such meetings are generally held and the Annual General Meeting of shareholders of the Company;

f) The Codes of Conduct which are in place and applicable to the Directors;

g) Remuneration payable to Directors pursuant to Shareholders approval to that effect;

h) Liability Insurances taken by the Company to cover directors;

Further the Directors have access to Management to seek any additional information, clarification and details as may be required.

The Non-Executive Independent Directors of the Company were appointed/ re-appointed at the Annual General Meeting held on July 10, 2014. Their Letter of Appointment contained the requisite familiarisation details which has been posted on the website on http://www.eClerx.com/ Corporate%20Governance/Nomination%20and%20 Remuneration%20policy,pdf

17. DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to Section 134 of the Companies Act, 2013 and other applicable rules and regulations, the Directors, to the best of their knowledge and ability, confirm that:

(a) in the preparation of the annual accounts for the Financial Year 2014-15, the applicable accounting standards had been followed along with proper explanation relating to material departures, if any;

(b) the directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2015 and of the profit or loss of the Company for the year ended on that date;

(c) the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(d) the Directors had prepared the annual accounts on a going concern basis;

(e) the Directors had laid down internal financial controls to be followed by the Company and that such Internal Financial Controls are adequate and were operating effectively;

(f) the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

18. NO. OF MEETINGS OF THE BOARD

During the Financial Year 2014-15, 8 (Eight) Board Meetings were held as follows:

May 20, 2014 July 10, 2014 July 31, 2014

October 30, 2014 January 12, 2015 January 30, 2015

March 13, 2015 March 31, 2015

19. AUDIT COMMITTEE

Composition of Audit Committee:

Name Designation

Biren Gabhawala Chairman

Pradeep Kapoor Member

Anish Ghoshal Member

PD Mundhra Member

There were no such instances wherein the recommendations of the Audit Committee were rejected by the Board of Directors.

20. NOMINATION AND REMUNERATION POLICY

In terms of Section 178 of the Companies Act, 2013 and the Listing Agreement, entered into by the Company with Stock Exchanges, as amended from time to time, the policy on nomination and remuneration of Directors, Key Managerial Personnel (KMP), Senior Management and other employees of the Company had been formulated by the Nomination and Remuneration Committee of the Company and was approved by the Board of Directors vide its resolution dated July 31, 2014. The policy acts as a guideline for determining, inter-alia, qualifications, positive attributes and independence of a Director, matters relating to the remuneration, appointment, removal and evaluation of performance of the Directors, Key Managerial Personnel, Senior Management and other employees. The aforesaid policy has also been posted on the Company''s website on http://www.eClerx.com/ Corporate%20Governance/Nomination%20and%20 Remuneration%20policy.pdf

21. DETAILS OF ESTABLISHMENT OF VIGIL MECHANISM

Pursuant to the provisions of the Companies Act, 2013 and Listing Agreement, the Company has in place Whistle Blower Policy to encourage all employees or any other person dealing with the Company to disclose any wrongdoing that may adversely impact the Company, the Company''s customers, shareholders, employees, investors, or the public at large. This policy, inter-alia, also sets forth (i) procedures for reporting of questionable auditing, accounting, internal control and unjust enrichment matters and (ii) an investigative process of reported acts of wrongdoing and retaliation from employees, inter-alia, on a confidential and anonymous basis. The aforesaid policy has also been posted on the Company''s website on http://www.eClerx.com/Corporate%20Governance/

WhistleBlowerPolicyandVigilMechanism.pdf

22. PARTICULARS OF LOAN, GUARANTEE AND INVESTMENTS

Particulars Amount (Rs. in Million)

Loan Nil

Guarantee 4.25

Investment Please refer Notes to Standalone Financial Statements-Note No. 12

24. SECRETARIAL AUDIT REPORT

Pursuant to Section 204 of the Companies Act, 2013, and Rules thereunder, a Secretarial Audit Report for the FY 2014-15 in Form MR 3 given by M/s. Pramod Shah & Associates, Company Secretary in practice is attached as Annexure-III with this report.

25. PARTICULARS OF CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

Information as required, inter-alia, under Section 134(3)(m) of the Companies Act, 2013, is given in the Annexure IV forming part of this report.

26. ENTERPRISE wIDE RISK MANAGEMENT SYSTEM AND RISK MANAGEMENT POLICY

Your Company has in place a well-defined Enterprise Wide Risk Management (''EWRM'') framework and Risk Management Policy which inter-alia aims at the following:

1. Alignment of risk appetite and strategy of the organisation by evaluating strategic alternatives, setting related objectives, and developing mechanisms to manage related risks.

2. Enhancement in risk response decisions by identifying and selecting among alternative risk responses - risk avoidance, reduction, sharing, and acceptance.

3. Reduction / elimination of operational surprises and losses by identifying potential events and establishing responses and reducing associated costs or losses.

4. Identification and management of multiple risks by facilitating effective response to the interrelated impacts and integrated responses to such risks.

5. Improvement in deployment of capital by providing robust risk information to the Management so as to effectively assess overall capital needs and prudently manage capital allocation.

The framework is periodically reviewed by senior management persons to ensure that the risks are identified, managed and mitigated. The same is also periodically reported to the Audit Committee and the Board of Directors.

27. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF wOMEN AT wORKPLACE (PREVENTION, PROHIBITION & REDRESSAL) ACT, 2013

The Company has in place an Anti-Sexual Harassment Policy in line with requirements, inter-alia, of The Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013. An Internal Compliance Committee has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary and trainee) are covered under this policy.

The following is a summary of sexual harassment complaints received and disposed off during the Financial Year 2014-15:

- No. of complaints received:Nil

- No. of complaints disposed off: Nil

28. CORPORATE SOCIAL RESPONSIBILITY Brief outline on the CSR Policy

The Company continues to earmark a corpus every year for CSR activities. The eClerx Cares council under the guidance of CSR Committee is responsible for championing all philanthropy and CSR initiatives of the Company. The mission of eClerx Cares is committed to being participants of progress by supporting initiatives in education and child welfare to help measurably improve the lives of underprivileged children.

Our partner NGOs are selected for their projects on child rights and education which is one cause, that resonates broadly within the Company, At the Company, it is believed that money is only ever a small part of the solution and our ethos involve the entire organisation heartily contributing to making a difference either through donating clothes and other material for people in distress, volunteering their time in training, running marathons for a cause, or engaging with children from schools we sponsor through our corporate funding.

Employee Engagement

There is an increasing amount of interest shown by our employees to volunteer and support our partner NGOs. The Company matches employee''s contribution by 1:1. Employees can choose to contribute a fixed amount deducted monthly or choose to sponsor annual fees through

either Nanhi Kali or CRY for primary or secondary education.

Employees also participate enthusiastically in the engagement activities laid out across the year like:

- A 75-member team of Company''s employees participated in the Mumbai Marathon pledging their support to the cause of Child Rights and Education;

- AnnualLearn-and-Fun event for the students of schools sponsored through our corporate funding;

- This year eClerx Cares in a tie up with Raahat helped by sending relief for the flood victims of Jammu and Kashmir with employees whole-heartedly contributing with food, clothing, sanitation material, etc;

- Participated in a Swachh Bharat initiative, a national campaign rolled out by Honorable Prime Minister of the Government of India.

While the Company continues to provide expert outsourcing options, it has not lost sight of its commitment to play its role as an enlightened corporate citizen. Corporate Social Responsibility had always been on its agenda and it has also seen increasing interest and partnership from our employees to join hands on various initiatives. In the U.S.A. and U.K., the Company supports numerous child education and health-related causes for Cancer, etc.

Other Details:

a. Corporate Social Responsibility Policy:

The Company has in place Corporate Social Responsibility Policy.

b. web-link of the CSR Policy and projects or programs

CSR Policy is available on the website of the Company http://www.eClerx.com/Corporate%20Governance/ eClerx%20CSR%20policy%20final%20-Jan%20 2015%20BM.pdf.

c. Composition of CSR Committee

Name Designation

Deepa Kapoor Chairperson

Anish Ghoshal Member

Biren Gabhawala Member

PD Mundhra Member

d. Average Profit Before Tax for last 3 Financial Years

Financial Year Average Net Profit (Rs. In Million)

201 1-12 1,954.47

2012- 13 1,906.34

2013- 14 3,090.23

TOTAL 6,951.04

e. Prescribed CSR Expenditure (2% of the amount as in item (d) above):- Rs. 46.34 Million

f. Details of CSR spent during the financial year

(a) amount spent during Financial Year: Rs. 46.37 Million

(b) amount unspent, if any: Nil

*Details of implementing Agency(ies):

Child Rights and You (CRY)

- eClerx wholly funds the KMAVGS initiative run by CRY in Maharashtra;

- Providing education, healthcare and spreading awareness on child rights.

Nanhi Kali

- eClerx supports education for underprivileged girls in Sheopur district of Madhya Pradesh.

Parivaar

- eClerx works with Parivaar to fund Amar Bharat Vidyapeeth in Bengal.

Caring Friends - SAMPARC

- eClerx funds support for rural and tribal underprivileged children of Mulshi village;

- Project to support SAMPARC schooland hostel, Bhambarde;

- Project for Higher Education Support for senior girls of SAMPARC;

- Special education support for the children of Shel- Pimpalgaon and Poynad Balgram;

- Vocational training support to the rural school drop- outs;

- Capital expenses Project - fencing of girls children''s home (Orphanage) Bhaje and construction of girls hostel at Bhambarde;

- Construction of Girls Toilet at Maval & Mulshi Taluka Dist Pune, under the Swachh Bharat Swachh Vidyalaya Scheme.

Sanskriti Samvardhan Mandal

- Construction of Toilet Complex with Biogas plant for Shri Chatrapati Shivaji High School at Sagroli, Dist. Nanded, under the Swachh Bharat Swachh Vidyalaya Scheme.

Magic Bus

- eClerx funds the Child education Program by Magic Bus which target to holistically develop the child and implement the behavior change leading to development of positive attitude and behavior toward education, gender equality, health elements of the children''s school cycle.

Muktangan

- eClerx wholly funds 1 school (pre-school to Std. VII) in Mumbai.

Dasra- LAHI

- eClerx funds proposal to provide job and life skills training to 6000 young boys and girls as part of secondary school curriculum under ''Project Swadheen'' in high schools all over Maharashtra including Mumbai, Thane and Raigad district.

Kaveri Vanitha Sevashrama

- eClerx funds a part of the orphanage ''KVS'' at Hessaraghatta village about 30 kms from Bangaluru city, run by 60 year old Sarojamma for the past more than 40 years and houses about 50 orphans.

We hereby declare that implementation and monitoring of the CSR Policy are in compliance with CSR Policy and in compliance with CSR objectives and Policy of the Company,

PD Mundhra Deepa Kapoor

Mumbai Executive Director Chairperson May 25, 2015 CSR Committee

Further, details of the implementing agencies can be accessed on the website of the Company, www.eClerx.com

29. AWARDS AND ACCOLADES

Your Company is proud to have received the following awards and accolades during the period under review. The Company was:

- recognised as the ''Star SME of the Year'' in the small and medium enterprise (SME) category at the Business Standard Awards for Corporate Excellence;

- recognised in the Deloitte Technology Fast 500™ Ranking as one of the 500 fastest-growing technology companies in the Asia Pacific, based on the percentage revenue growth over the last three financial years;

- won the 2014 Most Admired Knowledge Enterprise (MAKE) Asia award for the second time;

- won the QIMPRO award for 2014, in the Process Optimization category;

- named among top 10 nominees in the Small Cap range for the RB Investor Communication award;

- named a 2014 CIO 100 Award Winner;

- recognised in the 2014 IAOP Global Outsourcing 100 ranking and included in their ''Best 10 Companies - Marketing Services'' and the ''Best 20 Companies

- Financial Management Services'' sub-lists for the second time in a row;

- featured in Outlook Business'' ''Fastest Growing Companies'';

- won the Knowledge Management Leadership award;

- won the ''Use of Technology for Operational Excellence'' BPO Excellence award at the 2014 Asia BPO Summit;

- won the NetApp Innovation Awards 2015;

- recognised in ReQ Rangers in the category ''Innovation

- Product or Service'' in the Social Innovation Awards, endorsed by World CSR Congress;

- won the Use of Technology for Operations Excellence'' at the BPO Excellence Awards - 2015.

30. REMUNERATION DETAILS PURSUANT TO COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014 AND OTHER APPLICABLE PROVISIONS

- Details of the ratio of the remuneration of each director

to the median employee''s remuneration (approx):- Executive Director: 1:84; Non-Executive Non Independent Director: NA; Non-Executive Independent Director: 1:4 (excluding sitting fees)

- The percentage increase in remuneration of each director, Chief Financial Officer, Chief Executive Officer, Company Secretary or Manager, if any, in the financial year:- Executive Director: 0%, Non Executive Independent Directors: 50%, Chief Financial Officer: 12% and Company Secretary: 13.5%;

- The percentage increase in the median remuneration of employees in the financial year:- 7%;

- The number of permanent employees on the rolls of the Company:- On rolls employee count as on March 31, 2015 was 6,687;

- The explanation on the relationship between average increase in remuneration and company performance:-

Average increase in remuneration is decided based on salary benchmarking done with industry peers to ensure retention of experienced employees. Company performance has indirect linkage to overall compensation of senior management;

- Comparison of the remuneration of the Key Managerial Personnel against the performance of the company (KMP includes ED, CFO and CS):- ESOPs granted to CFO and CS have company performance linked vesting conditions i.e. lesser number of options vest if the company does not do well and /or is perceived to have not done well. ED has a significant variable component which is determined by Board based on various financial metrics of the company including revenue, profitability and reduction of risk. Further the details of performance of the Company are elaborated in this Annual Report.

- Variations in the market capitalisation of the company, price earnings ratio as at the closing date of the current financial year and previous financial year and percentage increase over decrease in the market quotations of the shares of the company in comparison to the rate at which the company came out with the last public offer:

March 31 March 31 At the time 2015 2014 of IPO

Price Earning Ratio

Basic 20.91 12.46 NA

Diluted 21.39 12.81 NA

Share Price (Rs.) 1,585.55 1,061.05 315

Number of outstanding Shares 30,350,885 30,176,907 18,868,849

Market Cap (Rs. Mln.) 48,122.85 32,019.21 5,943.69

Increase over the IPO (%)* 655.02%

*The Company issued bonus shares in the ratio of one Equity Share for every two Equity Shares of Rs. 10 each held in July 2010.

- Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and reasons for any exceptional circumstances for increase in managerial remuneration:- 10.5% for employees other than senior managerial personnel v/s 10.3% percentile increase in the senior managerial remuneration. The increase is determined based on salary benchmarking done with industry peers to ensure retention of experienced employees. Company performance has indirect linkage to overall compensation of senior management;

- The ratio of the remuneration of the highest paid director to that of the employees who are not directors but receive remuneration in excess of the highest paid director during the year:- No such employee (excluding ESOP gain);

- The key parameters for any variable component of remuneration availed by the directors:- There is no variable component for Non Executive Independent Directors. The Non Executive Non Independent Directors are not paid any remuneration by the Company. As regards the remuneration of Executive Director, pursuant to the corresponding shareholders resolution, annual performance bonus is decided by the Board of Directors, on merit based and takes into account the Company''s performance while factoring key parameters like:

- Profitability (PAT, PBT, OPM)

- Return on shareholders investment

- Statutory compliances

- Revenue and revenue quality

- Salary details of employees employed throughout the financial year, was in receipt of remuneration for that year which, in the aggregate, was not less than Rs. 60 Lakhs are given in the Annuxure-V forming part of this report.

- Salary details of an employee employed for a part of the financial year, was in receipt of remuneration for any part of that year which, in the aggregate, was not less than Rs. 5 Lakhs per month are given in the Annuxure-V forming part of this report.

- The Company affirms that the remuneration is as per the remuneration policy of the Company,

31. EMPLOYEES'' STOCK OPTION PLAN

Pursuant to the applicable requirements of the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 (''the SEBI guidelines''), your Company had framed and instituted Employee Stock Employee Stock Option Plan 2008 (''ESOP 2008'') & Employee Stock Option

Plan 2011 (''ESOP 2011'') to attract, retain, motivate and reward its employees and to enable them to participate in the growth, development and success of the Company,

Your Company has granted stock options from time to time under the said ESOP Schemes to its employees and also to employees of its subsidiaries,

Details of options granted to senior managerial persons of your Company as on March 31,2015:

ESOP Scheme Name of key manage No. of opti No. of opti No. of options rial ons ons personnel granted* exercised outstanding*

Hoshi Mistry 57,000 47,700 1,300

ESOP 2008 Rohitash Gupta 68,500 49,000 0

Sandeep Dembi 42,000 19,000 15,000

Hoshi Mistry 27,000 0 27,000

Rohitash Gupta 27,000 0 27,000

Sandeep Dembi 27,000 0 27,000

ESOP 2011 Sanjay Kukreja 30,335 0 30,335

Chitra Padmanabhan 20,000 0 20,000

Amit Bakshi 20,000 0 20,000

Details of options granted to senior managerial persons of foreign subsidiaries of your Company as on March 31,2015:-

ESOP Scheme Name of key manage No. of opti No. of opti No. of options rial ons ons personnel granted* exercised outstanding*

John Stephens 16,000 1,999 6,001

ESOP 2008 Scott Houchin 150,000 75,000 41,667

Scott Houchin 82,000 0 82,000

John Stephens 33,000 0 33,000

ESOP 2011 Alan Paris 43,000 0 43,000

Robert Horan 27,000 0 27,000

* The above options are linked with the performance criteria and the actual number of options which vest could be considerably lower if the respective performance criteria is/are not met.

The difference between the intrinsic value of the shares underlying the options granted on the date of grant of option and the option price is expensed as Employees Compensation over the period of vesting. Accordingly, the impact of the same was Rs. (0.41) million on the Statement of profit and loss account for the year ended on March 31, 2015 as employee compensation cost.

The equity shares to be issued and allotted under the ESOP schemes i.e. ESOP 2008 and ESOP 2011 of the Company shall rank pari-passu in all respects including dividend with the existing equity shares of the Company,

32. HUMAN RESOURCES MANAGEMENT

The Company recognises the value of continuous learning and development that is focused and relevant and is committed to investing in its people''s capabilities because it believes that the competencies that are built today will drive the future of its business.

Building on its partnerships with top MBA schools in the Western region of the country, for management education for junior and mid-level managers, in 2013, the Company partnered with another leading Management development institute for offering its junior staff the opportunity to earn a management credential without having to take a break from work. Classes for the 2-year program are conducted by the institute''s faculty at Company''s premises in Mumbai.

For select high performing managers, the Company rolled out a 2 year International Business Communication Skills certification program by well known experts in the field. Across the Company, every day, operations managers communicate with clients across the U.S., Europe and Asia Pacific and this program is designed to enable managers to communicate effectively across channels and cultures.

For senior managers that travel onshore frequently, the Company introduced a Cultural Intelligence program to help managers understand inter-cultural differences as an appreciation of which ultimately promotes clearer communication, breaks down barriers, builds trust, strengthens relationships, and yields tangible results in terms of business success.

As a testament to our commitment to continuous learning and development, in January 2015, the Company won the MAKE (Most Admired Knowledge Enterprises) Asea award for 2014 for the second time alongside some of India''s largest IT conglomerates.

33. CORPORATE GOVERNANCE

The Securities and Exchange Board of India (SEBI) has prescribed certain corporate governance standards vide Clause 49 of the Listing Agreement. Your Directors reaffirm their commitments to these standards and a detailed Report on Corporate Governance together with the Auditors'' Certificate on its compliance is annexed hereto.

The Ministry of Corporate Affairs, Government of India, published the Corporate Governance Voluntary Guidelines 2009, to strengthen the corporate governance framework.

These guidelines provide for a set of requirements which may be voluntarily adopted by Companies and focuses on areas such as Board of Directors, responsibilities of the Board, Audit Committee functions, roles and responsibilities, appointment of auditors, Compliance with Secretarial Standards and a mechanism for whistle blower support.Your Company by and large is in compliance with requirements laid down therein.

34. SUCCESSION PLANNING

The Company has succession plan in place for orderly succession for appointments to Board and to senior management.

35. GREEN INITIATIVE BY THE MINISTRY OF CORPORATE AFFAIRS

The Ministry of Corporate Affairs (''MCA'') has taken a Green Initiative in Corporate Governance by permitting electronic mode for service of documents to members after considering relevant provisions of the Information Technology Act, 2000 and Companies Act, 2013 and rules made thereunder (''the Act'').

Pursuant to provisions of Act, service of documents to members can be made by electronic mode on the email address provided for the purpose of communication. If a member has not registered an email address, other permitted modes of service would continue to be applicable.

Your Company sincerely appreciates shareholders who have contributed towards furtherance of Green Initiative. We further appeal to other shareholders to contribute towards furtherance of Green Initiative by opting for electronic communication.

This initiative will ease the burden on corporates (and the environment) of sending physical documents such as notices, annual reports etc. The members who have not provided their email address will continue to receive communications, dissemination, notice(s), documents etc. via permitted mode of service of documents. Further the shareholders, who request for physical copies, will be provided the same at no additional cost to them.

38. ACKNOWLEDGEMENT

Your Directors take this opportunity to express their sincere appreciation to the Company''s customers, vendors, investors, consultants, business associates, bankers and employees for their support and co-operation to the Company,

Your Directors are also thankful to the Government of India, the Governments of various countries, the concerned State Governments and regulatory agencies for their co- operation.

Your Directors also acknowledge the hard work and effort made by every member of the eClerx family across the world and express their sincere gratitude to the Members for their continuing confidence in the Company,

For and on behalf of the Board of Directors eClerx Services Limited

V. K. Mundhra Chairman

Place: Mumbai Date: May 25, 2015


Mar 31, 2013

Dear Members,

The Directors are pleased to present their Thirteenth Annual Report along with the audited annual accounts for the financial year ended March 31, 2013.

1. Financial Highlights

Financial / operating performance (Consolidated) of the Company and its subsidiaries for the financial year ended March 31, 2013 is tabulated below:-

(Rupees in million)

Particulars 2012-13 2011-12

Revenue from 6,605.34 4,728.85 Operations

Other Income (net) (181.78) 223.00

Total Revenue 6,423.56 4,951.85

Operating Expenses 4,058.81 2,831.47

EBITDA 2,364.75 2,120.38

EBITDA % 36.81% 42.82%

Depreciation and 255.36 128.88 goodwill amortisation

Earnings before 2,109.39 1,991.50 Interest & Tax

Taxes 393.37 393.77

Net Profit after Tax 1,716.02 1,597.73

NPM% 26.71% 32.27%

Year in Retrospect:

On a consolidated basis the total income increased to Rs. 6,423.56 million from Rs. 4,951.85 million in the previous year at a growth rate of 30%. The EBITDA amounted to Rs. 2,364.75 million as against Rs. 2,120.38 million in the previous year. The Company earned Net Profit After Tax (PAT) of Rs. 1,716.02 million for the year as against Rs. 1,597.73 million during the previous year registering Year on Year (YoY) growth of 7%.

2. Information on status of Company''s affairs

Information on operational and financial performance of the Company etc., is provided in the Management Discussion and Analysis Report, which is annexed to the Directors'' Report and has been prepared in compliance with the terms of Clause 49 of the Listing Agreement entered with the Indian Stock Exchanges.

3. Dividend

After considering the Company''s profitability, cash flow and overall financial performance, the Directors are pleased to recommend a dividend of Rs. 25 (250%) per share. The total quantum of dividend, if approved by the Members will be about Rs. 746.86 million while about Rs. 126.93 million will be paid by the Company towards dividend distribution tax and surcharge on the same.

The Company had paid a dividend of Rs. 17.50 per share (175%) during the year ended March 31, 2012.

The Register of Members and Share Transfer Books will remain closed from Friday, August 16, 2013 to Thursday, August 22, 2013 (both days inclusive) for the purpose of ascertaining entitlement for the said dividend. The Thirteenth Annual General Meeting of the Company is scheduled to be held on Thursday, August 22, 2013.

4. Transfer to Reserve(s)

The Company proposes to transfer Rs. 156.10 million to the General Reserve out of the amount available for appropriations and an amount of Rs. 679.96 million is proposed to be retained in the Profit and Loss Account out of current year''s profits.

5. Subsidiary Companies

The Company has following foreign subsidiaries as on March 31, 2013:

S. No Name of the subsidia(ies)

1 eClerx Investments Limited (BVI)

2 eClerx LLC (USA)

3 eClerx Limited (UK)

4 eClerx Private Limited (Singapore)

5 Agilyst Inc (USA) (a step down subsidiary, being the subsidiary of eClerx Investments Limited (BVI))

6 Agilyst Consulting Private Limited (India) (a step down subsidiary, being the subsidiary of Agilyst Inc (USA))

The Members are requested to note that the Ministry of Corporate Affairs vide its general Circular No. 2/2011 dated February 8, 2011, has granted a general exemption to all the companies under Section 212(8) of the Companies Act, 1956 with regard to attaching the Balance Sheet, Profit & Loss Account and other documents of the subsidiaries of the Company after complying with the directions given therein. However, the Members who wish to have a copy of the annual audited accounts of the subsidiaries will be provided the same upon receipt of a request from them and will also be available for inspection by any member at the registered office of the Company and of the subsidiary companies on any working day. The specified financial information of subsidiary companies is disclosed along with the consolidated financial statements and will also be available on the website of the Company (www. eClerx.com). In accordance with the requirements of the Listing Agreement executed with the Stock Exchanges, the consolidated financial statements of the Company are annexed to the Annual Report.

6. IPO Fund Utilisation

The Company completed its Initial Public Offer (IPO) and the equity shares were listed on the National Stock Exchange of India Limited (NSE) and the BSE Limited (BSE) effective December 31, 2007. The balance amount of Rs. 220 million out of IPO proceeds, as on March 31, 2012, earmarked for acquisition was fully utilized to acquire 100% of Agilyst Inc., a closely held US based KPO company, through its overseas subsidiary eClerx Investments Limited and accordingly there were no un-utilised IPO proceeds as on March 31, 2013.

7. Developments after the Balance Sheet Date

The Article 24 of the Articles of Association ("AOA") of the Company originally provided that the Company is allowed to buy-back its shares from the existing Members after passing a Special Resolution in accordance with Section 77A and other applicable provisions of the extant Companies Act, 1956 ("the Act") and SEBI (Buy-back of Securities) Regulations, 1998 and any amendment thereof.

The erstwhile Article 24 of the AOA of the Company is reproduced below:

24. The Company may, by special resolution, purchase its own securities or other securities, subject to such limits and on such terms and conditions specified under Section 77A and other applicable provisions of the Act and rules or regulations framed there under and SEBI (Buy Back of Securities) Regulations, 1998.

As per the extant Section 77A of the Act, a buy-back by the Board of Directors is allowed if the quantity of buy- back is or less than 10% of the paid up equity capital and free reserves of the Company. It was therefore proposed to amend the existing Article 24 of AOA so that the Board of Directors would be allowed to buy-back to the extent permitted pursuant to Section 77A of the Act and any other Acts or Rules as may be applicable from time to time. The Board of Directors of the Company at its Meeting held on April 9, 2013, inter-alia, proposed, for the approval of Members by way of a special resolution, to amend the Article so that the Board would be allowed to buy-back as aforesaid. The shareholders approval was sought by voting via Postal Ballot in terms of the provisions of Section 192A of the Companies Act, 1956, read with the provisions of the Companies (Passing of Resolutions by Postal Ballot) Rules, 2011.

The Company completed dispatch of postal ballots on April 30, 2013 and outcome of the postal ballot was announced on June 4, 2013 and the resolution was carried with requisite majority. Accordingly the Articles of Association stands amended with effect from the said date.

8. Amendment(s) to ESOP Plan(s)/ Scheme(s) of the Company

SEBI vide its Circular CIR/CFD/DIL/3/2013 dated January 17, 2013 amended SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999, in respect of Trust Route under ESOP Plans, inter-alia, providing that listed entities will be prohibited from framing any employee benefit schemes involving acquisition of own securities from the secondary market.

ESOP Schemes viz., Employee Stock Option Plan (''ESOP 2005''), Employee Stock Option Scheme 2008 (''ESOP 2008'') and Employee Stock Option Scheme 2011 (''ESOP 2011'') of the Company contain enabling clause(s), as was earlier permitted under the then extant regulations, allowing the Company to set up ESOP Trust to purchase shares from open market. However, the Company does not have any ESOP Trust in place as on date. Furthermore, no such trust has dealt in Company''s securities in the secondary markets, at any time.

Thus, in order to comply with the aforesaid Circular, the shareholders approval is being sought at the ensuing Annual General Meeting, for removing the clauses from existing ESOP Plans, pertaining to ESOP Trust/ESOS Trust/ Employee Welfare Trust, involving acquisition of its own securities from the secondary market.

Furthermore, the ESOP Schemes (ESOP 2008 & ESOP 2011) of the Company are silent on implications upon delayed payment of exercise and/or tax money by the employee(s) concerned (as set out in the respective ESOP Plan(s)/Scheme(s)), wherein the employee post exercise, makes delayed payment of exercise and/or tax money or does not pay the same for indefinite period as against the applicable cut off dates. It may become unduly advantageous to such employee in case of rising share price as otherwise a higher market price would have meant higher tax obligation upon the employee. It may also be disadvantageous to larger set of employees'' interests wherein they are denied allotment in a particular cycle as their money was received late by say only one day.

In view of the above and in the larger interest of employees, Remuneration Committee and Board of Directors of the Company, accorded its consent for seeking shareholders approval and authorization for making necessary amendments to ESOP Plan(s)/ Scheme(s) to incorporate necessary clauses pertaining to the implications of upon delayed / non payment of exercise and tax money.

Further, the Board of Directors at its meeting held on May 24, 2013, also considered the proposal to increase maximum number of options available to be granted under ESOP 2011 from 1,600,000 to 2,600,000. The said proposal is set out in detail in the notice convening the Thirteenth Annual General Meeting.

The other terms and conditions of the ESOP Schemes viz. ESOP 2008 and ESOP 2011 would remain the same as envisaged in the respective ESOP Scheme(s) and earlier approved by the shareholders of the Company, as amended from time to time.

The Members are requested to consider approving the respective resolutions, as set out in the notice convening this Thirteenth Annual General Meeting.

9. Payment of remuneration by way of commission to Non-Executive Independent Directors of the Company

Non-Executive Independent Directors of the Company are not paid any remuneration except the sitting fees for attending Board and Committee meetings. It is proposed that Non-Executive Independent Directors be paid remuneration by way of commission, in aggregate, not exceeding 1% of the net profit of the Company for the respective financial year, subject to a limit of Rs.12 Lacs p.a. per Non-Executive Independent Director.

The Board of Directors of the Company accorded its consent to seek Members'' approval for payment of remuneration by way of commission. The Members are requested to consider approving the same, as set out in the notice convening this Thirteenth Annual General Meeting.

10. Raising of Long Term Funds

The Board of Directors of the Company vide resolution passed on May 24, 2013 accorded its consent, to seek Members'' enabling approval for raising of long term funds by way of issue of securities, inter-alia, under section 81(1A) of the Companies Act, 1956 upto an amount of Rs. 3,000 million.

This approval is regarded by the Board as an enabling resolution, which can be used to raise capital in an appropriate amount and using the appropriate mix of funding instruments, once the usage of funds has been more specifically identified. As such, the Board proposes to have enabling approval from the Members to allow it the necessary flexibility to quickly take advantage of emerging growth opportunities.

Regulation 88 of Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009 provides that the allotment pursuant to the special resolution approving the Qualified Institutional Placement shall be completed within a period of 12 months from the date of passing of the resolution. The Board would like to take this opportunity to align the timing of this resolution with its Annual General Meeting cycle to eliminate the need for extraordinary general meetings of the Members / postal ballots for this purpose. The Members of the Company accorded its consent to a similar proposal at the Eleventh Annual General Meeting held on August 24, 2011 which expired in August 2012. It is therefore proposed to seek fresh enabling authorisation from the Members of the Company at the ensuing Thirteenth Annual General Meeting for a period of 12 months or otherwise as applicable from the date of the Annual General Meeting.

Hence, the Board proposes Members'' enabling approval at this Thirteenth Annual General Meeting for raising Long Term Financial Resources via equity and/or equity linked instrument(s) route for an amount not exceeding Rs. 3,000 million. The Members are requested to consider approving the same, as set out in the notice convening this Thirteenth Annual General Meeting.

11. Fixed Deposits

During the year, the Company has not accepted any deposits within the meaning of the provisions of Section 58A of the Companies Act, 1956.

12. Increase in Share Capital

The Company has issued 817,051 equity shares during the year, upon the exercise of stock options by the employees under Employee Stock Option Scheme 2005 and 2008. Due to this, the outstanding issued, subscribed and paid-up equity share capital increased from 29,057,534 equity shares of Rs. 10 each as at March 31, 2012 to 29,874,585 equity shares of Rs. 10 each as at March 31, 2013.

13. Awards and Accolades

The Company is proud to have received the following awards and accolades during the period under review. The Company:

- Won the European Outsourcing Association (EOA) Outsourcing Works - Award for Delivering Business Value in a Pan-European Outsourcing Project.

- Won the ''Use of Technology for Operations Excellence'' award at the BPO Excellence awards.

- Won the 2012 Indian Most Admired Knowledge Enterprises (MAKE) award.

- Was winner in the "Best Exporter - Services (Medium)" category at the ECGC - D&B Indian Exporters'' Excellence Awards 2012.

- Won the Most Admired Knowledge Enterprises (MAKE) Asia award.

- Has been ranked 124th in the 2012 Inc India 500 ranking.

- Was recognized as "Leading Provider in Investment Banking BPO" by the Everest Group.

- Was recognized as 2012 Global Services 100 provider; also featured in the Leading Mid-tier BPO Providers and Global Knowledge Process Leaders lists.

- Was ranked as Leader in the 2012 IAOP Global Outsourcing 100 ranking and included in their ''Best 20 Companies - Financial Management Services'' and the ''Best 10 Companies in Eastern Europe'' sub-lists.

14. Corporate Social responsibility (CSR)

eClerx Cares - advancing children''s lives through education

The Company continues to earmark a corpus every year for CSR activities. The eClerx Cares council is responsible for championing all philanthropy and CSR initiatives of the Company. The mission of eClerx Cares is committed to being participants of progress by supporting initiatives in education and child welfare to help measurably improve the lives of underprivileged children.

Our partner NGOs are selected for their projects on child rights and education which is one cause, that resonates broadly within the Company. At the Company, it is believed that money is only ever a small part of the solution and our ethos involve the entire organization heartily contributing to making a difference either through donating clothes, volunteering their time in training such as IT skills, running marathons for a cause or simply giving Christmas gifts.

Employee Engagement

There is an increasing amount of interest shown by our employees to volunteer and support our partner NGOs. The Company matches employee''s contribution by 1:1. Employees can choose to contribute a fixed amount deducted monthly or choose to sponsor annual fees of a girl child (Nanhi Kali) for primary or secondary education.

Employees also participate enthusiastically in the engagement activities laid out across the year like:

- A 75-member team of Company employees participated in the Mumbai Marathon pledging their support to the cause of Child Rights and Education;

- Take up training on computer fundamentals for students in Company''s facility;

- Annually organize Christmas learn-and-fun event for the students of local schools and institutes; and

- The Company celebrates the nationwide Joy of Giving week by arranging material giving drive in association with Goonj, an NGO.

While the Company continues to provide expert outsourcing options, it has not lost sight of its commitment to play its role as an enlightened corporate citizen. Corporate Social Responsibility had always been on our agenda and we have also seen increasing interest and partnership from our employees to join hands on various initiatives.

In the US and UK, the Company supports numerous child education and health-related causes for Cancer and the Alzheimer''s Association.

Our Partner NGOs: Child Rights and You (CRY)

The Company wholly funds the PREM initiative run by CRY in Melghat, Maharashtra - a commitment the Company has held since 2007. By providing education, healthcare and spreading awareness on child rights it has made great progress and brought about an improvement in the community.

Nanhi Kali

The Company supports education for underprivileged girls in Sheopur district of Madhya Pradesh through their association with the Nanhi Kali program. This program has resulted in positive outcomes where the Company was able to curtail drop-outs and sustain the girl literacy drive.

Snehalaya

The Company works with Snehalaya to wholly support 6 Bal Bhavans in slums of Ahmednagar district in Maharashtra. These Bal Bhavans double up as kindergarten schools as well as coaching/informal learning centres and aim to get "out-of-school" children back into the mainstream curriculum.

15. Directors

In accordance with the Articles of Association of the Company, Anjan Malik and Biren Gabhawala retire from office by rotation, and being eligible, offer themselves for re-appointment at the forthcoming Annual General Meeting of the Company.

The brief resume of Anjan Malik and Biren Gabhawala as required in terms of Clause 49 of the Listing Agreement with the stock exchanges, is included in this Annual Report. Further, the required resolutions for re-appointment of the above Directors at the forthcoming Annual General Meeting are included in the Notice convening this Annual General Meeting.

During the year under review Sandeep Singhal - Non Independent Non-Executive Director resigned with effect from June 1, 2012. Directors place their sincere appreciation for the assistance and guidance provided by him during his tenure as director of the Company.

Further it is with deep regret we state that Mr. Jimmy Bilimoria, Non-Executive Independent Director of the Company passed away on May 3, 2013. Late Mr. Bilimoria had been associated with the Company since October 2007. The Company was privileged to have worked with him as he was a rare individual who possessed a sharp intellect, wisdom, strong common sense, unwavering integrity and yet was so humble. He will be truly missed at eClerx. Late Mr. Bilimoria ceased to be a director of the Company from the date of his demise.

16. Directors'' Responsibility Statement

Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors confirm that:

(a) in the preparation of the annual accounts for the year 2012-13, the applicable accounting standards had been followed along with proper explanation relating to material departures, if any;

(b) the Directors selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2013 and of the profit of the Company for the year ended on that date;

(c) the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(d) the Directors had prepared the annual accounts on a going concern basis.

17. Employees'' Stock Option Plan

Pursuant to the applicable requirements of the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 ("the SEBI guidelines"), the Company had framed and instituted Employee Stock Option Plan 2005 (ESOP 2005), Employee Stock Option Scheme 2008 (ESOP 2008) & Employee Stock Option Scheme 2011 (ESOP 2011) to attract, retain, motivate and reward its employees and to enable them to participate in the growth, development and success of the Company.

The Company has granted stock options from time to time under the said ESOP Plan(s) / Scheme(s) to its employees and Independent Directors and also to employees of its subsidiaries.

The difference between the intrinsic value of the shares underlying the options granted on the date of grant of option and the option price is expensed as Employees Compensation over the period of vesting. Accordingly, the Company has charged a sum of Rs. 3.69 million to the profit and loss account for the year ended on March 31, 2013 as employee compensation cost.

The equity shares to be issued and allotted under the ESOP Plan(s) / Scheme(s) i.e. ESOP 2005, ESOP 2008 and ESOP 2011 of the Company shall rank pari-passu in all respects including dividend with the existing equity shares of the Company.

18. Human Resources Management

At the Company, we recognize that continuous interdisciplinary learning that is practical and current is a competitive advantage, and we''re committed to investing in our people, so as to assist them to scale the peak of their potential.

To help new hires make a smooth transition into the Company, we deployed an intake program to institutionalize a standardized, consistent approach to ensure that all new recruits receive the same level of comprehensive, accurate information and instructions.

We also broad-based the scope of our in-house Foundation School so that the recruitment team is able to hire for aptitude and the Foundation School then equips new hires with the knowledge and skills that are essential for success at the Company. In 2012-13, domain and technology trainings by the Foundation School registered a 63% increase (in terms of number of employees trained year-on-year).

Two years back we introduced a learning intervention for first time managers. In the last year, the Learning and Development team collaborated with the leadership team to update the scope, curriculum, and depth of the program. The 20 hour program is now for 80 hours spread across 6 months, so new managers are provided with all the knowledge and skills that they will need to succeed.

Our partnership with a Mumbai based leading Management Institute for preparing general managers out of our functionally qualified domain specialists, witnessed a leap in the number of enrollments as more senior managers from across Mumbai and Pune signed up for the program.

To bring greater rigor to our employee engagement practices, we consolidated our HR Business Partners structures and introduced a scorecard to better manage and measure outcomes.

As a testament to our commitment to continuous learning and development, in October 2012, the Company won the MAKE (Most Admired Knowledge Enterprises) Asia award for the first time, alongside some of Asia''s largest conglomerates and the MAKE India award for the second consecutive year - making the Company, the only BPO / KPO to win these awards.

19. Particulars of Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo

Information as required under Section 217(1) (e) of the Companies Act, 1956 read with the Companies (Disclosure of particulars in the report of board of Directors) Rules, 1988 is given in the Annexure forming part of this report.

20. Particulars of Employees

In terms of the provisions of Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975 as amended, the names and other particulars of the employees are required to be set out in the Annexure to the Directors'' Report. However, as per the provisions of Section 219(1) (b) (iv) of the said Act, the Annual Report excluding the aforesaid information is being sent to all the Members of the Company and others entitled thereto. A Member, who is interested in obtaining such particulars, may write to the Company Secretary at the Registered Office of the Company.

21. Corporate Governance

The Securities and Exchange Board of India (SEBI) has prescribed certain corporate governance standards vide Clause 49 of the Listing Agreement with stock exchanges. The Directors reaffirm their commitments to these standards and a detailed Report on Corporate Governance together with the Auditors'' Certificate on its compliance is annexed here to.

The Ministry of Corporate Affairs, Government of India, published the Corporate Governance Voluntary Guidelines 2009, to strengthen the Corporate Governance Framework. These guidelines provide for a set of requirements which may be voluntarily adopted by companies and focuses on areas such as Board of Directors, responsibilities of the Board, Audit Committee functions, roles and responsibilities, appointment of Auditors, Compliance with Secretarial Standards and a mechanism for whistle blower support. The Company by and large is in compliance with requirements laid down therein.

22. Enterprise Wide Risk Management System (EWRM)

The Company has in place a well defined Enterprise Wide Risk Management (EWRM) framework which, inter-alia, aims at the following:

1. Alignment of risk appetite and strategy of the organisation by evaluating strategic alternatives, setting related objectives, and developing mechanisms to manage related risks.

2. Enhancement in risk response decisions by identifying and selecting among alternative risk responses - risk avoidance, reduction, sharing, and acceptance.

3. Reduction /elimination of operational surprises and losses by identifying potential events and establishing responses and reducing associated costs or losses.

4. Identification and management of multiple risks by facilitating effective response to the interrelated impacts, and integrated responses to such risks.

5. Improvement in deployment of capital by providing robust risk information to the management so as to effectively assess overall capital needs and prudently manage capital allocation.

The framework is periodically reviewed by senior management personnel to ensure that the risks are identified, managed and mitigated.

23. Statutory Auditors

M/s. Walker Chandiok & Company, Chartered Accountants, Mumbai, [ICAI Registration No. 001076N] who are the Statutory Auditors of the Company, retire at the conclusion of Thirteenth Annual General Meeting and confirmed their willingness to accept office, if re- appointed. They have further confirmed that their appointment, if made, at the Annual General Meeting, will be within the limits prescribed under sub-section (1B) of Section 224 of the Companies Act, 1956 and that they are not beneficially holding any security of the Company as defined under Section 226(3)(e) of the said Act. They have also confirmed that they hold a valid peer review certificate as prescribed under Clause 41(1)(h) of the Listing Agreement. Members are requested to consider their re-appointment and authorise the the Board of Directors (including committee thereof) to fix their remuneration for the financial year 2013-14.

24. Green Initiative by the Ministry of Corporate Affairs

The Ministry of Corporate Affairs ("MCA") has taken a Green Initiative in Corporate Governance by permitting electronic mode for service of documents to Members after considering relevant provisions of the Information Technology Act, 2000 and Companies Act, 1956 ("the Act").

The Information Technology Act which came into force in the year 2000 has an overriding effect over other laws in providing legal recognition of electronic records and digital signatures.

Taking cognizance of the above, MCA has vide Circular No. 17/95/2011 CL-V dated April 21, 2011 clarified that service of documents to Members can be now made by electronic mode provided the company has obtained the email addresses of the Members by giving an opportunity to all Members to register their email address with the Company. If a member has not registered an email address, other permitted conventional modes of service would continue to be applicable.

The Company sincerely appreciates Members who have contributed towards furtherance of Green Initiative. We further appeal to other Members to contribute towards furtherance of Green Initiative by opting for electronic communication.

This initiative will ease the burden on Corporates (and the environment) of sending physical documents such as notices, annual reports etc. The Members who do not opt for the same, will continue to receive communications, dissemination, notice(s), documents etc. via permitted conventional mode of service of documents. Further the Members who request for physical copies, will be provided the same at no additional cost to them.

25. Acknowledgement

Your Directors take this opportunity to express their sincere appreciation to the Company''s customers, vendors, investors, consultants, business associates, bankers and employees for their support and co- operation to the Company.

Your Directors are also thankful to the Government of India, the Governments of various countries, the concerned State Governments and Regulatory Agencies for their co-operation.

Your Directors also acknowledge the hard work and effort made by every member of the eClerx family across the world and express their sincere gratitude to the Members for their continuing confidence in the Company.

For and on behalf of the Board of Directors

V. K. Mundhra

Chairman

Place: Mumbai

Date: July 9, 2013


Mar 31, 2012

The Directors are pleased to present their Twelfth Annual Report along with the audited annual accounts for the financial year ended March 31,2012.

1. Financial Highlights

Financial Performance / Operating Performance (Consolidated) of the Company and its Subsidiaries for the year ended March 31,2012 are tabulated below:

(Rupees in million)

Particulars FY2011-12 FY2010-11

Income from Services 4,728.85 3,421.03

Other Income 223.00 240.16

Total Revenue 4,951.85 3,661.19

Operating Expenses 2,831.47 2,075.25

EBITDA 2,120.38 1,585.94

EBITDA % 42.82% 43.32%

Depreciation and Goodwill 128.88 91.25 Amortization

Earnings before Exceptional 1,991.50 1,494.69 Items, Interest &Tax

Diminution in Value of Long - 102.74 Term Investment

Taxes 393.77 167.56

Net Profit after Tax 1,597.73 1,224.39

NPM% 32.27% 33.44%

Year in Retrospect:

On a consolidated basis, the total income increased to Rs. 4,951.85 million from Rs. 3,661.19 million in the previous year at a growth rate of 35.25%. The EBITDA amounted to Rs. 2,120.38 million as against Rs. 1,585.94 million. The Company earned Net Profit After Tax (PAT) of Rs. 1,597.73 million for the year as against Rs. 1,224.39 million during the previous year registering Year on Year (YoY) growth of 30.49%.

2. Information on Status of Company's Affairs

Information on operational and financial performance, etc., is also provided in the Management Discussion and Analysis Report, which is annexed to the Directors' Report and has been prepared in compliance with the terms of Clause 49 of the Listing Agreement with Indian Stock Exchanges.

3. Dividend

After considering the Company's profitability, cash flow and overall financial performance, your Directors are pleased to recommend a dividend of Rs. 17.50 (175%) per share. The total quantum of dividend if approved by the Members will be about Rs. 508.51 million while about Rs. 82.50 million will be paid by the Company towards dividend tax and surcharge on the same.

The Register of Members and Share Transfer books will remain closed from Thursday, August 16, 2012 to Thursday, August 23, 2012 (both days inclusive) for the purpose of ascertaining entitlement for the said dividend. The Twelfth Annual General Meeting of the Company is scheduled to be held on Thursday, August 23,2012.

The Company had paid out a total dividend of Rs. 22.50 per share (225%) during the year ended March 31,2011.

4. Transfer to Reserve(s)

The Company proposes to transfer Rs. 157.33 million to the General reserve out of the amount available for appropriations and an amount of Rs. 845.82 million is proposed to be retained in the Statement of Profit and Loss out of current year's profits.

5. Foreign Subsidiaries

The Company has the following foreign subsidiaries as on March 31,2012:

1. eClerx Investments Limited (BVI)

2. eClerxLLC(USA)

3. eClerx Limited (UK)

4. eClerx Private Limited (Singapore)

The Members are requested to note that the Ministry of Corporate Affairs vide its General Circular No. 2/2011 dated February 8, 2011, has granted a general exemption to all the companies under Section 212(8) of the Companies Act, 1956 ('the Act') with regard to attaching the Balance Sheet, the Statement of Profit & Loss and other documents of the subsidiaries of the Company after complying with the directions given therein. However, the Members who wish to have a copy of the annual audited accounts of the subsidiaries will be provided the same upon receipt of a request from them and will also be available for inspection by any Member at the Registered Office of the Company and of the subsidiary companies on any working day except Saturday, between 11.00 a.m. to 6.00 p.m. The specified financial information of subsidiary companies is disclosed along with the consolidated financial statements and will also be available on the website of the Company www.eclerx.com. In accordance with the requirements of the Listing Agreement executed with the Stock Exchanges, the consolidated financial statements of the Company are annexed to the Annual Report.

6. IPO Fund Utilization

Your Company completed its Initial Public Offer (IPO) and the equity shares were listed on the National Stock Exchange of India Limited (NSE) and the BSE Limited (BSE) effective December 31,2007.

The actual utilization of the IPO proceeds as on March 31, 2012 are as under:

(Rupees in million)

Sr. Objects Original Balance Amount Original Revised Utilization Schedule as No. Amount as on Utilization Approved by the Shareholders March 31,2012 Schedule at the Eleventh AGM

1 Acquisition 220.00 220.00 March 31,2010 March 31,2015

2 Infrastruc- ture Investments 180.00 - March - 31,2009

3 Setting up of Additional Facilities 100.00 - March - 31,2010

4 General Corporate Purposes 161.00 - - -

661.00 220.00

7. Event after the Balance Sheet Date - Acquisition of Agilyst Inc.

Your Company has signed on April 12, 2012, a definitive agreement to acquire 100% of Agilyst Inc ("Agilyst"), a closely held US based KPO Company incorporated under the laws of the State of Delaware, United States of America, based at 1055, Westlakes Drive, Suite 300, Berwyn, PA - 19312, through its overseas subsidiary eClerx Investments Limited, British Virgin Islands, thereby making Agilyst a step-down subsidiary of eClerx Services Limited, India. The closing documents to effect the said acquisition were signed on May 4,2012. The consideration for the acquisition will be all cash and includes a substantial earn out component based on Agilyst's future performance and will be routed via said subsidiary of the Company. Further, the transaction will be funded from the Company's internal resources including

IPO proceeds earmarked for 'Acquisition'. Post-acquisition, Agilyst will operate as a fully owned subsidiary of the Company and Agilyst's management team will continue to manage the day-to-day operations.

Agilyst is a five-year old company focused on large Fortune 500 media companies in the U.S. primarily doing data processing and analytics services with an employee base of around 1,000 employees. The range of services is very similar demographically to Company's service portfolio although the end vertical obviously is different. Agilyst gives another avenue of growth and diversification both from a client concentration perspective and from an end vertical perspective because it gives the Company a very strong foothold in the media industry which for a variety of reasons is believed to be an attractive opportunity for the Company.

Agilyst's presence in U.S. is like eClerx, wherein Agilyst has a small team of subject matter experts who come from the media industry and are focused on sales and account management for its client(s). In India, Agilyst has majority of the headcount, based in Chandigarh in the form of a subsidiary viz. Agilyst Consulting Private Limited, being a STPI unit, hence a lower cost location than Mumbai or Pune for eClerx.

8. Fixed Deposits

During the year, your Company has not accepted any deposits within the meaning of the provisions of Section 58A of the Companies Act, 1956.

9. Increase in Share Capital

The Company has issued 203,100 equity shares on the exercise of stock options by the employees under Employee Stock Option Scheme 2005 and 2008. Due to this, the outstanding, issued, subscribed and paid-up equity share capital increased from 28,854,434 shares of Rs. 10 each as at March 31,2011 to 29,057,534 equity shares of Rs. 10 each as at March 31,2012.

10. Awards and Accolades

Your Company is proud to have received the various awards and accolades during the period under review. Your Company:

Was named in top 10 by income and top 14 by employee count in Dun & Bradstreet's 2011 annual "India's Top ITes and BPO Companies, 2011".

Was named "Emerging IT Company in India of the year in Bloomberg CXO Awards, 2011".

Moved to the position of 322 (from 381 earlier) in India's Business Today (BT 500), 2011 most valuable Companies List.

Has entered Dataquest's Best BPO Employers at No. 11 while No. 10 for BPO Employee Satisfaction.

Was named in Inc. 500, as among India's 500 fastest growing Mid-sized Companies for second straight year.

Was selected as a finalist in the Most Admired Knowledge Enterprises (MAKE) Awards for third straight year.

Was listed in Forbes Asia's 2011 "200 Best Under a Billion", one of only 35 Indian firms on the list and the only KPO firm.

Graduated to' an outsourcing Leader' in lAOP's 2011 Global Outsourcing 100.

Once again got listed in Global Services 100 and featured as a Top 5 KPO Vendor.

Has been rated Best Overall Mid-Cap Company in Finance Asia's 2011 Investor and Analyst survey.

Has been named as one of the two Best Mid-Cap companies in India, in an Annual survey conducted by the Finance Asia Magazine, one of the leading financial publications in the Asia-Pacific region.

Won Global HR Excellence Award in 2012 for "Organization with Innovative HR Practices".

Was also included in S&P CNX 500.

11. Corporate Social Responsibility (CSR)

Your Company is committed towards playing its role as an enlightened corporate citizen and continues to earmark a corpus every year on the CSR activities. In order to reach out to society at large, eClerx Cares committee was formed which is entrusted with championing all the philanthrophical and CSR related initiatives of the Company.

During the year, eClerx Cares supported many non-profit organizations spread over Maharashtra and Madhya Pradesh with the focus to provide quality education to the underprivileged children.

Prem Initiative:

Your Company supported the People's Rural Education Movement (PREM) run by CRY in Melghat, Maharashtra wherein 28 villages were covered under this initiative. It was observed that a 100% enrollment of children into schools was achieved under the PREM initiative. The instances of child labour, child marriage and school dropouts have been reduced and our aim is to eliminate it with sustained advocacy.

Nanhi Kali Program:

Your Company also continued to support education for underprivileged girls in Sheopur district of Madhya Pradesh through its association with the Nanhi Kali program. This program has resulted in positive outcomes where we, along with our associates, were able to curtail the drop- outs and sustain the girl literacy drive due to the academic, material and social support provided to girls in primary and secondary schools.

Bal Bhavans:

Your Company also lent a helping hand to Snehalaya to completely support two (2) Bal Bhavans in Ahmednagar district in Maharashtra. Bal Bhavans provide kindergarten schools as well as coaching / informal learning centers, with the basic intention of bringing "out-of-school"children back into the mainstream curriculum. It is a pleasure to inform that the Bal Bhavan initiative was successful in supporting 500 children so far.

eClerx Employees Initiative(s):

We feel proud to inform that there has been an increasing amount of interest shown by employees to volunteer and support its partner NGO's. A steady increase is being observed in the funds received from employees via 'Payroll Giving Program' wherein Company matches employee's contribution by 1:1.

Some of the highlights of other CSR activities carried out by eClerx Cares during the period under review are as follows:

A 75-member team of eClerx employees participated in the Mumbai marathon pledging their support to the cause of Child Rights and you.

eClerx donated 200 computers to various schools and institutes in and around Maharashtra and helped to set up computer laboratory enabling computer education for the underprivileged.

Organized training on Computer fundamentals for students of Sri Sri Ravi Shankar Vidya Mandir School (SSRVM), Dharavi in eClerx facility.

Organized a Christmas fun and frolic event for the students of SSRVM, Dharavi.

Organized an exhibition cum sale of handicrafts based on child art at eClerx facilities supporting the cause of education.

eClerxsupported numerous Cancer and the Alzheimer's Association. A Blood Donation campaign is being held every year at eClerx premises and eClerx employees give their whole hearted support to the noble cause.

12. Directors

Alok Goyal was appointed as an Additional Director of the Company with effect from May 18, 2012. As per the provisions of Section 260 of the Companies Act, 1956 ('the Acf), Alok Goyal in his capacity as Additional Director will cease to hold office at the forthcoming Annual General Meeting and is eligible for appointment. Notice under Section 257 of the Act has been received from a Member signifying his intention to propose his appointment as Director. Alok Goyal has furnished the requisite Form DD-A to the Company.

Further in accordance with the Articles of Association of your Company, Pradeep Kapoor, Jimmy Bilimoria and Vikram Limaye retire from office by rotation, and being eligible, offer themselves for re-appointment at the forthcoming Annual General Meeting of the Company.

The brief resume of Pradeep Kapoor, Jimmy Bilimoria, Vikram Limaye and Alok Goyal, as required in terms of Clause 49 of the Listing Agreement with the Stock Exchanges, is included as an annexure to the Notice convening Twelfth Annual General Meeting. The requisite resolutions for appointment/ re-appointment of above Directors at the forthcoming Annual General Meeting are included in the Notice convening this Annual General Meeting.

13. Directors' Responsibility Statement

Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors confirm that:

(a) In the preparation of the annual accounts for the year 2011-12, the applicable accounting standards had been followed along with proper explanation relating to material departures, if any;

(b) The directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2012 and of the profit of the Company for the year ended on that date;

(c) The directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(d) The Directors had prepared the annual accounts on a going concern basis.

14. Employees' Stock Option Plan

Pursuant to the applicable requirements of the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 ("the SEBI guidelines"), your Company had framed and instituted Employee Stock Option Plan 2005 (ESOP 2005) & Employee Stock Option Plan 2008 (ESOP 2008) to attract, retain, motivate and reward its employees and to enable them to participate in the growth, developmentand success of the Company.

Further, during the year under review, your Company has also instituted Employee Stock Option Plan 2011 (ESOP 2011) pursuant to the special resolution passed at the Eleventh Annual General Meeting. In-Principle Approval(s) for ESOP 2011 have been received from the BSE Limited (BSE) and National Stock Exchange Limited (NSE) during the year.

Your Company has granted stock options from time to time under the said ESOP Schemes to its employees and independent directors and also to employees of its subsidiaries.

The following table sets forth the particulars of stock options granted under ESOP 2005 and ESOP 2008 as on March 31,2012:

Particulars ESOP 2005 ESOP 2008

Options granted during the year Nil 632,400

Pricing formula As decided by the The exercise price shall be equal to the Board of Directors. lower of the following:

a) The latest available closing market price (at a Stock Exchange where there is highest trading volume on said date) on the date prior to the date on which the Remuneration Committee finalises the specific number of options to be granted to the employees or

b) The average of the two weeks high and low price of the share preceding the date of grant of option on the Stock Exchange(s) on which the shares of the Company are listed

Options vested as on March 31, 2012 (net) 580,312 606,750

Options exercised and allotted during the year 76,900 126,200

The total number of equity shares arising as a 76,900 126,200 result of exercise of options

Options lapsed/ forfeited/expired during the year Nil 72,425

Variation of terms of options Nil Nil

Money realised by exercise of options 769,000 1,262,000

Total number of options in force 56,501 1,882,775

Particulars ESOP 2005 ESOP 2008

Details of options granted to Employee:

(i) Senior Managerial Personnel As per statement attached As per statement attached

(ii) Any other employee receiving a grant in any Fiscal 2006: Fiscal 2009: one year of option amounting to 5% or more Nilesh Patel, Scott McCartney, of the options granted during that year Neville Bharucha Alberto Corvo

Fiscal 2007: Fiscal 2010:

Neville Bharucha, Scott Houchin

Venu Atmakur, Fiscal 2011:

Anees Merchant Scott Houchin

Gokul Perumal Sandeep Dembi

Fiscal 2008: Marshall Terry

Nil Fiscal 2012:

Fiscal 2009: Alberto Corvo

Nil Scott Houchin

Fiscal 2010:

Nil

Fiscal 2011:

Nil

(iii) Identified employees who were granted option, during any one year, equal to or exceeding 1% of the issued capital (excluding Nil Nil outstanding warrants and conversions) of the Company at the time of grant.

Diluted Earnings Per Share (EPS) pursuant to Rs. 52.99 for the year ended on March 31,2012 issue of shares on exercise of option calculated in accordance with Accounting Standard (AS 20 'Earning Per Share')

Difference, if any, between the employees Impact on profits: Rs. 86.94 million compensation cost calculated using the intrinsic Diluted EPS: Rs. 50.11 (post adjustment for aforesaid impact on profits) value of stock options and the employee compensation cost recognised if the fair value of the options had been used and the impact of this difference on profits and EPS of the Company.

Vesting Schedule Options granted under ESOP 2005 Options granted under ESOP 2008 would vest not earlier than one year would vest not earlier than one year and not later than five years from and not later than five years from the the date of grant of such options. date of grant of such options.

Details of options granted to key managerial persons of your Company during the year ended on March 31,2012:

ESOP Name of Key Managerial No. of Options No. of Options No. of Options Scheme Personnel Granted Exercised Outstanding

HoshiMistry 64,875 64,875 -

Rohitash Gupta 38,250 38,250 -

Kishore Poduri 32,500 28,750 3,750

ESOP 2005 Neville Bharucha 35,000 35,000 -

Venu Atmakur 19,500 19,500 -

Anees Merchant 25,900 25,900 -

Gokulraj Perumal 27,000 13,750 13,250

Hoshi Mistry 57,000 15,000 42,000

Rohitash Gupta 57,000 15,000 42,000

Kishore Poduri 57,000 - 57,000

Sandeep Dembi 42,000 - 42,000

Swati Thakar 39,600 15,000 24,600

Venu Atmakur 36,600 12,000 24,600

Neville Bharucha 36,600 10,500 26,100

Anees Merchant 32,100 10,500 21,600 ESOP 2008

Sachin Vaidya 27,600 - 27,600

Subhodip Basu 27,600 - 27,600

Gurvinder Lamba 20,100 - 20,100

Manoj Shelar 18,600 - 18,600

Srinivasan Nadadhur 18,600 - 18,600

Debobroto Ghosh 8,800 - 8,800

Gokulraj Perumal 29,100 - 29,100

Shyam Iyengar 8,800 - 8,800

Details of options granted to key managerial persons of foreign subsidiaries of your Company during the year ended on March 31,2012:

ESOP Name of Key Managerial No. of Options No. of Options No. of Options Scheme Personnel Granted Exercised Outstanding

ESOP 2005 Mahesh Muthu 84,375 61,875 22,500

Alberto Corvo 327,500 - 327,500

Scott McCartney 249,000 - 249,000

Scott Houchin 150,000 - 150,000

Joseph Sursock 58,500 - 58,500

Mahesh Muthu 50,250 - 50,250 ESOP 2008

Stephen Jones 39,750 - 39,750

LiChien Koh 30,750 - 30,750

John Russ 35,250 - 35,250

Scott Hamilton 16,000 - 16,000

Shamez Dharamsi 16,000 - 16,000

The difference between the intrinsic value of the shares underlying the options granted on the date of grant of option and the option price is expensed as Employees Compensation over the period of vesting. Accordingly, the Company has charged a sum of Rs. 2.79 million to the Statement of Profit and Loss for the year ended on March 31,2012 as employee compensation cost.

The equity shares to be issued and allotted under the ESOP schemes i.e. ESOP 2005, ESOP 2008 and ESOP 2011 of the Company shall rank pari-passu in all respects including dividend with the existing equity shares of the Company.

15. Human Resources Management

At eClerx, we believe that it is the caliber and competency of our people that provides a differentiated experience and superior quality processes to our customers. We understand that talent development is key to enable our people to hone their skills and remain cutting edge in new domains. Taking cognizance of this fact, we have facilitated specialist training programs for our employees on various advanced technology platforms and other key industry certification programs.

Given the growing demand for generalists from our delivery managers and also business school education from our employees, we also partnered with the S.R Jain Institute of Management & Research and the Symbiosis Institute of Business Management for their management programs. These programs are given out as scholarships to our employees where they get to pursue executive MBA programs from these reputed centers of learning.

For experienced mid-level managers about to enter into the senior management team, we started a leadership development initiative that includes 360 degree feedback, coaching, individual development plans and action learning. While the 360 degree and project based action learning initiatives were driven by the firm's leadership team, for coaching, we partnered with one of the Big Four consultants for assistance in setting up a framework that is customized to our unique business landscape. We also invested significantly in bringing in world-class faculty to deliver training programs in-house on areas like advanced communication skills and financial management.

We recognize that professional development and learning is a competitive advantage and we renewed our focus for enabling our people to reach peak potential.

16. Particulars of Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo

Information as required under Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 are given in the annexure forming part of this report.

17. Particulars of Employees

In terms of the provisions of Section 217(2A) of the Companies Act, 1956, (the Act) read with the Companies (Particulars of Employees) Rules, 1975 as amended, read with the companies (Particulars of Employees) Amendment Rules, 2011, the names and other particulars of the employees are required to be set out in the Annexure to the Directors' Report. However, as per the provisions of Section 219(1)(b) (iv) of the said Act, the Annual Report excluding the aforesaid information is being sent to all the Members of the Company and others entitled thereto. A Member, who is interested in obtaining such particulars, may write to the Company Secretary at the Registered Office address of the Company.

18. Corporate Governance

The Securities and Exchange Board of India (SEBI) has prescribed certain corporate governance standards vide Clause 49 of the Listing Agreement with Stock Exchanges. Your Directors reaffirm their commitment to these standards and a detailed Report on Corporate Governance together with the Auditors' Certificate on its compliance is annexed hereto.

The Ministry of Corporate Affairs, Government of India, published the Corporate Governance Voluntary Guidelines 2009, to strengthen the corporate governance framework. These guidelines provide for a set of requirements which may be voluntarily adopted by Companies and focuses on areas such as the Board of Directors, responsibilities of the Board, Audit Committee functions, roles and responsibilities, appointment of auditors. Compliance with Secretarial Standards and a mechanism for whistle blower support. Your Company by and large is in compliance with requirements laid down therein.

19. Enterprise Wide Risk Management System

(EWRM)

Your Company has in place a well defined Enterprise Wide Risk Management (EWRM) framework which, inter-alia, aims at the following:

1. Alignment of risk appetite and strategy of the organization by evaluating strategic alternatives, setting related objectives,and developing mechanisms to manage related risks.

2. Enhancement in risk response decisions by identifying and selecting among alternative risk responses - risk avoidance, reduction, sharing and acceptance.

3. Reduction / elimination of operational surprises and losses by identifying potential events and establishing responses and reducing associated costs or losses.

4. Identification and management of multiple risks by facilitating effective response to the interrelated impacts and integrated responses to such risks.

5. Improvement in deployment of capital by providing robust risk information to the Management so as to effectively assess overall capital needs and prudently manage capital allocation.

The framework is periodically reviewed by senior management personnel to ensure that the risks are identified, managed and mitigated.

20. Statutory Auditors

M/s. Walker Chandiok & Company, Chartered Accountants, Mumbai, [ICAI Registration No. 001076N] who are the Statutory Auditors of the Company, retire at the conclusion of Annual General Meeting and confirm their willingness to accept office, if re-appointed. They have further confirmed that their appointment, if made, at the Annual General Meeting, will be within the limits prescribed under sub- section (IB) of Section 224 of the Companies Act, 1956, (the Act) and that they are not beneficially holding any security of your Company as defined under Section 226(3)(e) of the said Act. They have also confirmed that they hold a valid peer review certificate as prescribed under Clause 41 (i)(h) of the Listing Agreement. Members are requested to consider their re-appointment and authorise the Board of Directors including any Committee thereof to fix their remuneration for the Financial Year 2012-13.

21. Green Initiative by the Ministry of Corporate Affairs

The Ministry of Corporate Affairs ("MCA") has taken a Green Initiative in Corporate Governance by permitting electronic mode for service of documents to Members after considering relevant provisions of the Information Technology Act, 2000 and Companies Act, 1956 (the Act).

The Information Technology Act which came into force in the year 2000 has an overriding effect over other laws in providing legal recognition of electronic records and digital signatures.

Taking cognizance of the above, MCA has vide Circular No. 17 / 2011 dated April 21,2011 and Circular No. 18 / 2011 dated April 29, 2011 clarified that service of documents to Members can be now made by electronic mode provided the Company has obtained the email addresses of the Members by giving an opportunity to all Members to register their email address with the Company. If a Member has not registered an email address, other permitted conventional modes of service would continue to be applicable.

Your Company has accordingly taken requisite steps by giving advance opportunity to the Members to register their email address with the Company. The Members who do not wish to provide/register their email address will continue to receive communications, dissemination, notice(s), documents etc. via permitted conventional mode of service of documents. This initiative will ease the burden on Corporates (and the environment) of sending physical documents such as notices, annual reports etc. We are sure you would contribute towards furtherance of "Green Initiative".

22. Acknowledgement

Your Directors take this opportunity to express their sincere appreciation to the Company's customers, vendors, investors, consultants, business associates, bankers and employees for their continued support and co-operation to the Company.

Your Directors are also thankful to the Government of India, the Governments of various countries, the concerned State Governments and other government and regulatory agencies for their co-operation.

Your Directors also acknowledge the hard work and effort made by every Member of the eClerx family across the world and express their sincere gratitude to the Members for their continuing confidence in the Company.

For and on behalf of the Board of Directors

V. K. Mundhra

Chairman

Place: Mumbai Date: May 18,2012


Mar 31, 2010

The Directors are pleased to present their Tenth Annual Report along with the audited accounts for the financial year ended March 31, 2010.

1. FINANCIAL HIGHLIGHTS

Consolidated Financial Information of eClerx Services Limited and its Subsidiaries is as follows:

(Rupees in million)

Income from Services 2,570.21 1,972.77

Other Income 54.17 50.54

Total Revenue 2,624.38 2,023.31

Operating Expenses 1,726.29 1,249.22

EBITDA 898.09 774.09

EBITDA % 34% 38%

Depreciation and Goodwill 69.94 79.41 Amortization

EBIT 828.15 694.68

Interest - 0.36

Taxes 92.78 76.50

Net Profit after Tax 735.37 617.82

NPM% 28% 31%

The year under review marked completion of 10 years by the Company and the Company recorded a turnover of more than Rs. 2,500 million for the first time in its history.

The total income increased to Rs. 2,624.38 million from Rs. 2,023.31 million in the prior year, at a growth rate of 30%. EBITDA amounted to Rs. 898.09 million (34% of total revenue) versus Rs. 774.09 million (38% of total revenues). The Company earned Net Profit After Tax (PAT) for the year of Rs. 735.37 million versus Rs. 617.82 million during the prior registering Year on Year (YoY) growth of 19%.

2. INFORMATION ON STATUS OF COMPANYS AFFAIRS

Information on operational and financial performance, etc., is also provided in the Management Discussion and Analysis Report, which is annexed to the Directors Report and has been prepared in compliance with the terms of Clause 49 of the Listing Agreement with Stock Exchanges.

3. DIVIDEND

After considering the Companys profitability and cash flow as well as the capital requirements for its growth plans, your Directors are pleased to recommend a final dividend of Rs. 10 per share. The total quantum of dividend, if approved, by the members, will be Rs. 286.16 million while Rs. 47.53 million will be paid by the Company towards dividend tax and surcharge on the same. The provision for proposed dividend of Rs. 190.31 million and dividend distribution tax of Rs. 31.61 million was provided in the books of accounts as per issued share capital as on March 31, 2010. The issue of bonus shares vide shareholders resolution dated July 14, 2010 has resulted in additional dividend outgo of Rs. 95.39 million and Rs. 15.84 million towards dividend distribution tax.

After including the interim dividend of Rs. 7.50 per share already paid earlier, the total dividend for the year ended March 31, 2010 comes to Rs. 17.50 per share (175%). The Company paid a total dividend of Rs. 12.50 per share (125%) during the year ended March 31, 2009.

The register of members and share transfer books will remain closed from September 8, 2010 to September 16, 2010 (both days inclusive) for the purpose of ascertaining entitlement for the said final dividend. The Tenth Annual General Meeting of the Company is scheduled to be held on September 16, 2010.

4. TRANSFER TO RESERVE(S)

The Company proposes to transfer Rs. 72.59 million to the General reserve out of the amounts available for appropriations and an amount of Rs. 273.13 million is proposed to be retained in the Profit and Loss Account out of current years profits.

5. INCREASE IN AUTHORISED SHARE CAPITAL AND ISSUE OF BONUS EQUITY SHARES

The Board of Directors of the Company vide resolution passed on June 7, 2010 accorded its consent, subject to shareholders approval, for increase in authorised share capital of the Company from Rs. 300 million divided into 30,000,000 equity shares of Rs. 10 each to Rs. 500 million divided into 50,000,000 equity shares of Rs. 10 each. The Board of Directors vide resolution passed on the said date also recommended issue of bonus equity shares in the ratio of one fully paid-up

bonus equity share of Rs. 10 each for every two equity shares of Rs. 10 each held and consequent capitalisation of free reserves of the Company. The shareholders of the Company accorded their consent for the aforesaid proposals for increase in authorised share capital and issue of bonus equity shares by capitalisation of free reserves, by way of postal ballot, result of which was announced on July 14, 2010. The record date for the purpose was fixed as July 26, 2010. Accordingly the bonus shares have been allotted on July 28, 2010.

The Company is currently in the process of effecting corporate action for credit of bonus shares into the demat accounts of shareholders of the company holding shares in electronic mode, while the shareholders holding shares in physical mode are being issued share certificates.

6. FOREIGN SUBSIDIARIES

The Company has acquired eClerx Private Limited in Singapore with effect from January 28, 2010. The said Company is now a wholly owned subsidiary of eClerx Services Ltd., India and caters to Asia-pacific clients of the Company.

The Company has following foreign subsidiaries as on March 31, 2010:

1. eClerx Investments Limited (BVI)

2. eClerx LLC (USA)

3. eClerx Limited (UK)

4. Igentica Travel Solutions Limited (UK)

5. eClerx Private Limited (Singapore)

In terms of exemption granted by the Ministry of Corporate Affairs under Section 212(8) of the Companies Act, 1956 vide letter No. 47/534/2010/CL-lll dated June 7, 2010, copy of the Balance Sheet, Profit and Loss account, Report of the Board of Directors and Auditors Report of

the aforementioned subsidiaries for the financial year ended March 31, 2010 are not being attached with the Balance Sheet of the Company. These documents and related information will be made available to concerned member upon request. These documents will also be available for inspection during business hours at the registered office of the Company and that of the subsidiary company concerned. We believe that the consolidated accounts represent a full and fair picture of the state of affairs and the financial condition of the Company and its subsidiary companies. The requisite financial information of the subsidiary companies, as required by the said exemption approval, is disclosed in the Annual Report.

7. IPO FUND UTILISATION

Your Company completed its Initial Public Offer (IPO) and the equity shares were listed on the National Stock Exchange of India Ltd. (NSE) and the Bombay Stock Exchange Ltd. (BSE) effective December 31, 2007.

As the members are aware that as per the time-lines indicated in the Prospectus at the time of IPO, the entire IPO proceeds were expected to be utilised by the Company by Fiscal 2010. However in view of turmoil in global markets over the period, lack of viable avenues and absence of potential company(ies) for acquisition, the said funds could not be fully utilised.

In view of the same, the Board of Directors of the Company at its meeting held on May 25, 2010 approved enhancement in time-line for utilisation of un-utilised portion of IPO proceeds but without changing the purpose of utilisation of IPO proceeds as originally envisaged in the IPO prospectus. The Company has accordingly informed the Stock Exchanges about the said decision of Board of Directors of the Company.

Extended timelines in respect of un-utilised portion of IPO proceeds are as under:

(Rupees in million)

Particulars Original Amount Balance Amount as on March 31,2010 Acquisitions 220.00 220.00

Infrastructure Investments 180.00 -

Setting up of Additional Facilities 100.00 74.81

General Corporate purposes 161.00 11.78

Total 661.00 306.59

Partculars original Utilisation Revised Utilisation Schedule Schedule

Acquisition Fiscal 2010 Fiscal 2012

Infrastructure Investments Setting up of Additional Facilities Fiscal 2010 Fiscal 2011

General Corporate purposes

8. FIXED DEPOSITS

During the year, your Company has not accepted any deposits within the meaning of the provisions of Section 58A of the Companies Act, 1956.

9. INCREASE IN SHARE CAPITAL

During the year, the Company has issued 104,100 equity shares on the exercise of stock options by the employees under Employee Stock Option Scheme 2005. Due to this, the outstanding issued, subscribed and paid-up equity share capital increased from 18,926,999 equity shares of Rs. 10 each as at March 31, 2009 to 19,031,099 equity shares of Rs. 10 each as at March 31, 2010.

10. AWARDS AND ACCOLADES

The Company was again recognised by The International Association of Outsourcing Professionals (IAOP) in its 2010 Global Outsourcing 100 survey as one of the rising stars across seven different categories i.e. Financial Management Services, Western Europe, United Kingdom, Biggest Public Company, Overall Revenues, Number of employees and Financial Services by Industry Focus (Banking, Markets).

Teleos, in association with The KNOW Network listed eClerx as one of the 14 finalists in the 2009 Indian Most Admired Knowledge Enterprises (MAKE) study. The MAKE study recognises organisations that best demonstrate an ability to leverage enterprise knowledge to deliver superior performance in the areas of innovation, operational effectiveness and excellence in products and services.

Finally the Company featured in the Business Today 500 list of Indias largest public companies in 2010 - a list containing Indias whos who of public enterprises.

11. CORPORATE SOCIAL RESPONSIBILITY

Your company takes pride in being associated with Child Rights and You (CRY), a Non government organisation, for the last 3 years, which works for Indias marginalised children. The Company has partnered with CRY to set up an Annual funding program, contributions to which are made both by the employees as well as the Company. The Company sponsors one specific project - PREM (Peoples Rural Education Movement in Maharashtra) which operates in 44 villages in Amravati

District, Maharashtra and aims to empower the tribal communities living on the periphery and multiuse area of the Melghat Tiger Reserve, ensuring their right to life, livelihood and self-development. Further, for the last 3 years consecutively, your Company sponsored a team for the Corporate Challenge - Mumbai Marathon. A team of 20 employees participated in the 7 km dream run to raise funds for CRY in January 2010.

12. DIRECTORS

Sandeep Singhal was appointed as an Additional Director of the Company w.e.f. April 30, 2010. As per provisions of section 260 of the Companies Act, 1956, Sandeep Singhal, in his capacity as Additional Director will cease to hold office at the forthcoming Annual General Meeting and is eligible for appointment. Notice under section 257 of the Companies Act, 1956 has been received from a member signifying his intention to propose his appointment as Director. Sandeep Singhal has furnished the requisite form DD-A to the Company.

Further in accordance with the Articles of Association of your Company, Jimmy Bilimoria and Vikram Limaye retire from office by rotation, and being eligible, offer themselves for re-appointment at the forthcoming Annual General Meeting of the Company.

The brief resume of Sandeep Singhal, Jimmy Bilimoria and Vikram Limaye, as required in terms of Clause 49 of the Listing Agreement entered into with the stock exchanges, is included as annexed to this Annual Report.

13. DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to Section 217(2AA) of the Companies Act, 1956, the directors confirm that:

(a) in the preparation of the annual accounts for the year 2009-10, the applicable accounting standards had been followed along with proper explanation relating to material departures, if any;

(b) the directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2010 and of the profit of the Company for the year ended on that date;

(c) the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(d) the directors had prepared the annual accounts on a going concern basis.

14. EMPLOYEES STOCK OPTION PLAN

Pursuant to the applicable requirements of the Securities and Exchange Board of India (Employee Stock

Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 ("the SEBI guidelines"), your Company had framed and instituted Employee Stock Option Plan 2005 (ESOP 2005) and Employee Stock Option Plan 2008 (ESOP 2008) to attract, retain, motivate and reward its employees and to enable them to participate in the growth, development and success of the Company.

Your Company has granted stock options from time to time under the said ESOP Schemes to its employees and also to employees of its subsidiaries.

The following table sets forth the particulars of stock options granted under ESOP 2005 and ESOP 2008 as on March 31, 2010:

Particulars ESOP 2005 ESOP 2008

Gross options granted 599,525 1,000,000

Pricing formula As decided by the Board The exercise price shall be equal to of Directors. the lower of the following:

a) the latest available closing market price (at a stock exchange where there is highest trading volume on said date) on the date prior to the date on which the Remuneration Committee finalises the specific number of options to be granted to the employees; or

b) Average of the two weeks high and low price of the share preceding the date of grant of option on the stock exchange on which the shares of the company are listed

Options vested 285,650 Nil

Options exercised 162,250 Nil

The total number of equity shares arising 162,250 Nil as a result of exercise of options

Options lapsed/ forfeited/expired 135,275 178,500

Variation of terms of options Nil Nil

Money realised by exercise of options 1,622,500 Nil

Total number of options in force 302,000 821,500

Details of options granted to Employee:

(i) Senior Managerial Personnel As per statement attached As per statement attached

(ii) Any other employee receiving a grant Fiscal 2006: Fiscal 2009: in any one year of option amounting Nilesh Pate| Neville Bnamcna Scott McCartney, Alberto Corvo to 5% or more of the options granted

Fiscal 2007: Fiscal 2010: during that year

Neville Bharucha, Venu Atmakur, Daniel Foarde, Scott Houchin Anees Merchant, Gokul Perumal

Fiscal 2008:

Nil

Fiscal 2009:

Nil

Fiscal 2010:

Nil

Nil

(iii) Identified employees who were granted Nil option, during any one year, equal to or exceeding 1% of the issued capital (excluding outstanding warrants and conversions) of the Company at the time of grant.

Diluted Earnings Per Share (EPS) pursuant Rs. 37.14 for the year ended on March 31, 2010 to issue of shares on exercise of option calculated in accordance with Accounting Standard (AS 20 Earning Per Share)

Difference, if any, between the employees Impact on profits : Rs. 20.99 million compensation cost calculated using the Di|luted EPS : Rs. 36.08 (post adjustment for aforesaid impact on profits)

intrinsic value of stock options and the employee compensation cost recognised if the fair value of the options had been used and the impact of this difference on profits and EPS of the Company.

Vesting Schedule Options granted under ESOP 2005 Options granted under ESOP 2008 would vest not earlier than one year would vest not earlier than one year and not later than five years from the and not later than five years from the date of grant of such options. date of grant of such options.

Statement of options granted to senior managerial persons of your Company by grantee as on March 31, 2010:

ESOP scheme Name of Key No of Options No of Options No. of Options managerial personnel granted exercised outstanding

Hoshi Mistry 53,250 30,000 23,250

Rohitash Gupta 38,250 27,750 10,500

Kishore Poduri 25,500 9,500 16,000

ESOP 2005

Neville Bharucha 28,500 11,500 17,000

Venu Atmakur 19,500 14,250 5,250

Anees Merchant 18,000 1,000 17,000

Hoshi Mistry 22,000 Nil 22,000

Rohitash Gupta 22,000 Nil 22,000

Kishore Poduri 22,000 Nil 22,000

Sachin Rastogi 23,000 Nil 23,000

Swati Thakar 18,000 Nil 18,000

ESOP 2008 Venu Atmakur 16,000 Nil 16,000

Neville Bharucha 16,000 Nil 16,000

Anees Merchant 13,000 Nil 13,000

Sachin Vaidya 10,000 Nil 10,000

Subhodip Basu 10,000 Nil 10,000

Gurvinder Lamba 5,000 Nil 5,000

Statement of options granted to senior managerial persons of foreign subsidiaries of your Company by grantee as on March 31, 2010:

ESOP scheme Name of Key No of options No of options No of options mangerial personnel granted exercised outstanding

Daniel Foarde 37,500 Nil 37,500

ESOP 2005

Mahesh Muthu 56,250 Nil 56,250

Alberto Corvo 185,000 Nil 185,000

Scott McCartney 150,000 Nil 150,000

Daniel Foarde 40,000 Nil 40,000

ESOP 2008 Joseph Sursock 25,000 Nil 25,000

Scott Houchin 20,000 Nil 20,000

Mahesh Muthu 19,500 Nil 19,500

Stephen Jones 12,500 Nil 12,500

The difference between the intrinsic value of the shares underlying the options granted on the date of grant of option and the option price is expensed as Employees Compensation over the period of vesting. Accordingly, the Company has charged a sum of Rs. 1.45 million to the profit and loss account for the year ended on March 31, 2010 as employee compensation cost.

The equity shares issued and allotted under both the ESOP schemes i.e. ESOP 2005 and ESOP 2008 of the Company rank pari-passu in all respects including dividend with the existing equity shares of the Company.

15. HUMAN RESOURCES MANAGEMENT

We believe that people are the most valuable assets of the Company as they contribute to the achievement of business objectives. Human resource policies of the Company though business focused, are employee friendly, clear and concise, thereby providing employees with appropriate opportunities to grow professionally and personally. Scalable recruitment and human resource management process enables the Company to attract and retain high caliber employees. The total manpower strength of your Company is 2863, as on March 31, 2010.

16. PARTICULARS OF CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

Information as required under Section 217(l)(e) of the Companies Act, 1956 read with the Companies (Disclosure of particulars in the report of board of directors) Rules, 1988 are given in the annexure forming part of this report.

17. PARTICULARS OF EMPLOYEES

In terms of the provisions of Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975 as amended, the names and other particulars of the employees are required to be set out in the Annexure to the Directors Report. However, as per the provisions of Section 219(l)(b)(IV) of the said Act, the Annual Report excluding the aforesaid information is being sent to all the members of the Company and others entitled thereto. A member, who is interested in obtaining such particulars, may write to the Company Secretary at the registered office of the Company.

18. CORPORATE GOVERNANCE

The Securities and Exchange Board of India (SEBI) has prescribed certain corporate governance standards vide Clause 49 of the Listing Agreement with stock exchanges. Your Directors reaffirm their commitments to these standards and a detailed Report on Corporate Governance together with the Auditors Certificate on its compliance is annexed here to.

During the year under review, the Ministry of Corporate Affairs, Government of India, published the Corporate Governance Voluntary Guidelines 2009, to strengthen the corporate governance framework. These guidelines provide for a set of requirements which may be voluntarily adopted by Companies and focuses on areas such as Board of Directors, responsibilities of the Board, audit committee functions, roles and responsibilities, appointment of auditors, compliance with Secretarial Standards and a mechanism for whistle blower support. Your Company by and large is in compliance with requirements laid down therein and has initiated appropriate action for further compliances.

19. ENTERPRISE WIDE RISK MANAGEMENT SYSTEM (EWRM)

Your Company has in place a well defined Enterprise Wide Risk Management (EWRM) framework which, inter-alia, aims at the following:

1. Alignment of risk appetite and strategy of the organisation by evaluating strategic alternatives, setting related objectives, and developing mechanisms to manage related risks.

2. Enhancement in risk response decisions by identifying and selecting among alternative risk responses - risk avoidance, reduction, sharing, and acceptance.

3. Reduction/elimination of operational surprises and losses by identifying potential events and establishing responses and reducing associated costs or losses.

4. Identification and management of multiple risks by facilitating effective response to the interrelated impacts, and integrated responses to such risks.

5. Improvement in deployment of capital by providing robust risk information to the Management so as to effectively assess overall capital needs and prudently manage capital allocation.

The framework is periodically reviewed by senior management personnel to ensure that the risks are identified, managed and mitigated.

20. AUDITORS

M/s. Walker Chandiok & Company, Chartered Accountants, Mumbai, who are the statutory auditors of the Company, retire at the conclusion of Tenth Annual General Meeting and confirm their eligibility and willingness to accept office, if re-appointed. You are requested to appoint auditors for the current financial year 2010-11.

21. ACKNOWLEDGEMENT

The Directors thank the customers, vendors, investors, consultants, business associates and bankers for their support and co-operation to the Company.

The Directors are also thankful to the Government of India, the Governments of various countries, the

concerned State Governments and other government and regulatory agencies for their co-operation.

The Directors also acknowledge the hard work and effort made by every member of the eClerx family across the world and express their sincere gratitude to the shareholders for their continuing confidence in the Company.

For and on behalf of the Board of Directors

V.K. Mundhra

Chairman

Place: Mumbai

Date: July 30, 2010

 
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