Mar 31, 2023
Your Directors are pleased to present the 60th Integrated Annual Report of the Company together with the Audited Financial Statements for the Financial Year ended March 31, 2023.
1. FINANCIAL PERFORMANCE AND STATE OF AFFAIRS
(INR Million) |
||||
Particulars |
Standalone |
Consolidated |
||
2022-23 |
2021-22 |
2022-23 |
2021-22 |
|
Revenue from operations |
18,234 |
16,289 |
48,482 |
42,438 |
Other Income (Net) |
1,517 |
1,340 |
1,028 |
1,377 |
Total Income |
19,751 |
17,629 |
49,510 |
43,815 |
Profit before Tax |
4,034 |
4,306 |
4,441 |
5,741 |
Profit after Tax (after Minority Interest) |
3,084 |
3,211 |
3,276 |
4,163 |
Sr. No |
FY to which dividend relates |
Type of Dividend |
Amount lying in the Unpaid Dividend Account (INR) (as on March 31, 2023) |
4 |
2019-20 |
2nd Interim |
2,209,920 |
1st Interim |
1,085,330 |
||
5 |
2018-19 |
Final |
1,649,745 |
Interim |
1,033,707 |
||
6 |
2017-18 |
Final |
1,610,777 |
Interim |
1,141,300 |
||
7 |
2016-17 |
Final |
2,510,984 |
Interim |
1,929,850 |
||
8 |
2015-16 |
2nd Interim |
2,411,003 |
On a standalone basis, during FY 2022-23, the Company recorded total income of INR 19,751 million comprising income from Software Development and Allied services of INR 18,234 million and other income of INR 1,517 million. The Company recorded a net profit of INR 3,084 million reflecting a decrease of about 3.96% Y-o-Y.
On a consolidated basis, the Company recorded total income of INR 49,510 million comprising income from Software Development and Allied Services of INR 48,482 million and other income of INR 1,028 million. The Consolidated net profit was INR 3,276 million reflecting decrease of about 21.31% Y-o-Y.
The Financial statements are prepared in accordance with the Indian Accounting Standards (Ind AS).
Based on profits during FY 2022-23 and continuing the tradition of rewarding the members, the Company declared an interim dividend of INR 1.50 (75%) per equity share of face value of INR 2 each on the paid-up equity share capital of the Company. The total payout amounted to INR 339.5 million.
The said dividend was declared in accordance with the Dividend Distribution Policy of the Company, formulated pursuant to Listing Regulations which is available on website of the Company at https://zensar.com/about/investors/ investors-relation?result=Policies#Corporate-Governance.
Further, the Board recommends a final dividend of INR 3.50 (175%) per equity share of face value of INR 2 each on the paid-up equity share capital of the Company, for the year under review. The total pay-out will amount to about INR 792.70 million. The payment of dividends shall be made within 30 days from the date of declaration as
per the record date, as set out in the AGM Notice. The total dividend for the year including the interim dividend shall be INR 5.00 per equity share of INR 2 each (250%).
Pursuant to the Act and IEPF Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, as amended from time to time, during the year under review, the Company has transferred following dividend(s) and corresponding share(s) to IEPF, upon completion of period of seven years
Date of Declaration |
Type of Dividend |
Total Amount of Dividend transferred (INR) |
Total No. of shares transferred |
July 14, 2015 |
Final |
2,097,186 |
22,200 |
January 19, |
Interim |
1,675,605 |
37,716 |
2016 |
The total amount lying in the Unpaid Dividend Account of the Company up to the year under review and the corresponding shares, which would be liable to be transferred to IEPF, as per records of RTA are as follows:
Sr. No |
FY to which dividend relates |
Type of Dividend |
Amount lying in the Unpaid Dividend Account (INR) (as on March 31, 2023) |
1 |
2022-23 |
Interim |
1,579,828 |
2 |
2021-22 |
Final |
2,842,757 |
Interim |
1,165,595 |
||
3 |
2020-21 |
Final |
1,949,254 |
Interim |
1,209,566 |
The data on unpaid/unclaimed dividend and other unclaimed monies is available on Company''s website at https://www.zensar.com/about/investors/investors-relation#corporate-governance. Members who have not yet encashed their unclaimed/unpaid amounts are requested to correspond with Company''s Registrar and Transfer Agents, at the earliest.
Particulars |
|
Loan(s) |
Company has not given any loan to any parties |
Guarantee(s) |
Please refer Note No. 29 of Notes to Standalone Financial Statements |
Investment(s) |
Please refer Note No. 6(a) of Notes to Standalone Financial Statements |
All related party transactions that were entered into during FY 2022-23, were on arm''s length basis and in the ordinary course of business.
Requisite approval(s) of the Audit Committee is obtained on periodic basis for the transactions, which are repetitive in nature or otherwise. The actual transactions entered into, pursuant to the approval so granted, are placed periodically, before the Audit Committee.
The policy on related party transactions is available on the website of the Company at https://www.zensar. com/sites/default/files/investor/policies-reports-fillings/ Policy%20 on%20RPT%20%281%29.PDF.
During FY 2022-23, no materially significant related party transactions that may have potential conflict with the interests of Company at large were entered into by the Company.
Further, the Company has not entered into any material transaction with related parties, during the year under review, which requires reporting in Form AOC-2 in terms of the Act read with Companies (Accounts) Rules, 2014.
However, the requisite disclosures under IND-AS form part of Notes to Financial Statements.
The information on Company''s affairs and related aspects, is provided under Management Discussion and Analysis Report, which has been prepared, inter-alia, in compliance with Regulation 34 of Listing Regulations and forms part of this report.
Details in respect of adequacy of internal financial controls with reference to the Financial Statements are stated in Management Discussion and Analysis Report, which forms part of this Report.
No amount is proposed to be transferred to General Reserve on declaration of dividend(s).
During the year under review, the Company has not accepted any Deposits, under Chapter V of the Act.
During the year under review, there was no change in the nature of the business of the Company or its subsidiaries, pursuant to, inter-alia, Section 134 of the Act and Companies (Accounts) Rules, 2014, as amended from time to time.
There are no material changes and commitments affecting the financial position of the Company which have occurred between the end of the Financial Year on March 31, 2023, to which the Financial Statements relate and the date of this report.
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.
Pursuant to Section 92 of the Act and related rules, as amended from time to time, a copy of Annual Return for the Financial Year ended March 31, 2023, is available on website of the Company at the following weblink: https://www.zensar.com/about/investors/investors-relation#corporate-governance.
Further, final Annual Return for the Financial Year ended March 31, 2023, once filed, shall also be made available on the above-mentioned weblink.
Your Company along with subsidiaries provides digital solutions and technology services globally. As of March 31, 2023, the Company had 14 Subsidiaries as per details to be set out in Annual Return.
The highlights of performance of subsidiaries and their contribution to the overall performance of the Company/Group, are included in Form AOC-1 forming part of Consolidated Financial Statements section in this Integrated Annual Report, in accordance with the provisions, inter-alia, of Section 129 of the Act read with Rule 5 of the Companies (Accounts) Rules, 2014. Further details of developments among subsidiaries during the year under review are set out in the Notes to Consolidated Financial Statements.
Policy for determining material subsidiaries framed by the Company, is available on https://zensar.com/about/investors/ investors-relation?result=Policies#Corporate-Governance.
The details pertaining to annual evaluation of Board and its Committees are provided under the Corporate Governance report forming part of this Board''s Report.
To the best of their knowledge and belief and according to the information and explanations obtained by them, your directors make the following statements in terms of Section 134(3)(c) of the Companies Act, 2013:
a) in preparation of the annual accounts for the Financial Year ended March 31, 2023, the applicable accounting standards had been followed and there was no material departures;
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 at the end of the Financial Year as at March 31, 2023, and of the profit of the Company for that period;
c) the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other
irroni ilaritioc
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.
Details pertaining to change in Director(s) and Key Managerial Personnel(s) of the Company and subsequent change in the Committee(s) of the Board, thereof, during the year under review, are set out in the Corporate Governance Report.
During the year under review, Nine (9) meetings of the Board were held, details of which are set out in the Corporate Governance Report herein.
Detailed composition of Committee(s) of the Board, number of meetings held during the year under review and other related details including brief details of terms of reference of the Committees, membership(s) and attendance of members, are set out in the Corporate Governance Report.
There were no instances during FY 2022-23 where the Board had not accepted any recommendation of any of the Committees of the Board.
The Company has received necessary declaration of Independence from Independent Directors inter-alia, pursuant to Section 149(6) and 149(7) of the Act and under Regulation 16(1)(b) and Regulation 25 of the Listing Regulations, confirming and certifying that:
⢠they have complied with all the requirements of being an Independent Director of the Company, as on date. The said certificate(s) were taken on record by the Board, at its meetings held on May 11, 2023, respectively, after due assessment of veracity of the same.
⢠they possess the requisite expertise and experience and are persons of high integrity and repute.
⢠they have registered themselves with the Independent Directors'' Database maintained by IICA.
All pecuniary relationship or transactions of Non-Executive Directors vis-a-vis the Company, along with criteria for such payments and disclosures on the remuneration of the Directors along with their shareholding are disclosed in Corporate Governance Report and notes to Financial Statements and also available on the website of the Company, pursuant to relevant regulations.
There are no relationships between the Directors interse, except between Anant Vardhan Goenka and H. V. Goenka. Anant Vardhan Goenka, Vice Chairman and Non-Executive, Non-Independent Director, is son of H. V. Goenka, Chairman and Non-Executive, Non-Independent Director.
In terms of the provisions of Section 134 of the Companies Act, 2013, a detailed report on Risk Management is included in Management Discussion and Analysis Report, which forms part of this report.
The Company complies with the applicable mandatory Secretarial Standards.
Disclosure under Sexual Harassment of Women at the Workplace (Prevention, Prohibition and Redressal) Act, 2013
The Company has in place an Internal Committee and an Anti-Sexual Harassment Policy, inter-alia, in line with the requirements of the Sexual Harassment of Women at
Workplace (Prevention, Prohibition and Redressal) Act, 2013 and rules made thereunder to redress all the sexual harassment complaints reported by women employee(s). Company has zero tolerance for sexual harassment at workplace.
The following is the summary of complaints received and disposed- off during the year under review:
Number of complaints received |
1 |
Number of complaints disposed off |
1 |
Number of complaints pending |
0 |
The Company currently has two Employees Stock Option Schemes in force, namely, "2006 Employees Stock Option Plan" (2006 ESOP) and Employee Performance Award Unit Plan, 2016 (2016 EPAP) and these schemes are being implemented, as per Listing Regulations, in this regard. Presently there are no outstanding/active options under "2002 Employees Stock Option Plan" (2002 ESOP). Nomination and Remuneration Committee vide its meeting held on January 20, 2022, resolved that no further options shall be granted under 2002 ESOP and 2006 ESOP.
In FY 2022-23, 2,500 equity shares, 67,790 equity shares and 1,93,597 equity shares were allotted under 2002 ESOP, 2006 ESOP and EPAP 2016, respectively.
The aforesaid ESOP Plans/Scheme(s) are in compliance with SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021, as amended from time to time. There has not been any material change in the ESOP plan(s) during the year.
The disclosure pursuant to SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 is available on the website of the Company at https:// www.zensar.com/investor/financials.
Particular of Employees Information pursuant to Section 197 of the Act, read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 |
||
1. |
The ratio of the remuneration of each director to the median remuneration of the employees of the Company excluding Managing Director for the Financial Year. |
Please refer Annexure A to this Report for details. |
2. |
Percentage increase in remuneration of each director, Chief Financial Officer, Chief Executive Officer, Company Secretary or Manager, if any, in the Financial Year. |
|
3. |
The percentage increase in the median remuneration of employees. |
The percentage increase in the median remuneration in FY 2022-23 of employees on India Payroll was 21%. |
4. |
The number of permanent employees on the rolls of Company (in India) |
7,797 (as of March 31, 2023) |
5. |
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 point out if there are any exceptional circumstances for increase in the managerial remuneration. |
Average percentage* increase made in the salaries of the employees other than the managerial personnel in the last Financial Year is 11.28% for India based associates. |
* Since percentile refers to a score below which a given percentage of scores in its frequency distribution falls, for an accurate representation of above calculation sought, we refer to percentage increase at an average level of salaries for the employees concerned. |
The remuneration to employees is as per the remuneration policy of the Company. The percentage increase in the median remuneration of employees has been calculated after excluding Managing Director''s remuneration.
The statement containing names of top ten employees in terms of remuneration drawn and the particulars of employees as required under Section 197(12) of the Act read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is provided in a separate Annexure A forming part of this report. None of the employees listed in the said Annexure are related to any Director(s) of the Company or hold 2% or more of the paid-up equity share capital of the Company. Further, the report and the accounts are being sent to the Members excluding the aforesaid Annexure. In terms of Section 136 of the Act, the said annexure is open for inspection and any Member interested in obtaining a copy of the same may write to the Company.
The Company has continued its practice of developing the Integrated Annual Report, based on International Integrated Reporting Council''s (''IIRC'') Framework, which encourages organisations to communicate their value creation over time. The Company has embarked on this journey to communicate its integrated thinking and how its business creates sustained value for stakeholders. The third Integrated Report also encompasses aspects like strategy, performance, governance frameworks, value creation based on various forms of capital viz. financial capital, manufactured capital, intellectual capital, natural capital, social and relationship capital and human capital.
A detailed report on the same for FY 2022-23 along with the practicing Company Secretary''s certification thereon, is provided in the corporate governance section of this report.
A detailed Management Discussion and Analysis Report is annexed to this report.
As stipulated under the Listing Regulations, Business responsibility and sustainability reporting (BRSR) on initiatives taken from an environmental, social and governance perspective, under Regulation 34(2)(f) is annexed to this report.
The Company has a Nomination and Remuneration Policy (Policy) for nomination and remuneration of Directors, Key Managerial Personnel (KMP), Senior Management Personnel (SMP) and other employees, pursuant to the Act and Listing Regulations, as amended from time to time.
1. Appointment and remuneration of Directors, KMP and SMP.
2. Determination of qualifications, positive attributes and independence for appointment of a Director (Executive/ Non-Executive/Independent) and recommendation to the Board about matters relating to the remuneration for the Directors, KMP and SMP.
3. Formulating the criteria for performance evaluation of all Directors.
4. Board Diversity
The said Policy is available on the website of Company at https://zensar.com/about/investors/investors-relation? re sult=Policies#Corporate-Governance
Pursuant to the Section 177(9) of the Act and Regulation 22 of Listing Regulations, the Company has established a Vigil Mechanism/ Whistle Blower Policy for Directors and
employees to report their genuine concerns. The Policy provides for Directors and employees to report concerns about unethical behavior, actual or suspected fraud or violation of Company''s Code of Governance and Ethics. The policy is available on the website of the Company a https://zensar.com/about/investors/investors-relation?re sult=Policies#Corporate-Governance
The Company has in place robust measures to safeguard whistle blowers against victimisation. Directors and employees are duly sensitised about mechanisms and guidelines for direct access to the Chairman of the Audit Committee, in appropriate cases.
Further, during FY 2022-23, no personnel has been denied access to the Audit Committee.
M/s. S R B C & CO LLP (ICAI Firm Registration No. FRN 324982E/E300003), Statutory Auditors of the Company, has been appointed to conduct Audit of Financial Statements of the Company from FY 2022-23 till FY 2026-27.
Pursuant to the Companies (Amendment) Act, 2017 which came into force on May 7, 2018, appointment of Statutory Auditors is not subject to annual ratification at the Annual General Meeting and accordingly not being placed at the 60th Annual General Meeting for approval of members.
Further, there was no instance of fraud reported by the Statutory Auditors during FY 2022-23, as required under Section 134 of the Act and rules thereunder.
Pursuant to the provisions of Section 204 of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board had appointed M/s. SVD & Associates, Company Secretaries in practice, to undertake the Secretarial Audit of the Company, for FY 2022-23. The Report of Secretarial Audit in Form MR-3 is annexed herewith. The response of the Board on the observations made by Secretarial Auditor is as follow:
The Company was unable to file the e-Form DIR-12 for Resignation of Chief Executive Officer (CEO) and Managing Director w.e.f December 31,2022, e-Form DIR-12 for appointment of new Chief Executive Officer (CEO) and Managing Director w.e.f. January23,2023 and e-Form MR-1 and MR-2 for appointment of new Managing Director till the date of issue of this report due to continuing technical glitches on the website of Ministry of Corporate Affairs.
The appointment of M/s. SVD & Associates, as Secretarial Auditors, continues for FY 2023-24.
Further, during FY 2022-23 and two previous Financial Years, no penalties, strictures were imposed on the Company by stock exchange(s) or SEBI or any statutory authority, on any matter related to capital markets.
The Board had appointed KPMG Assurance and Consulting Services LLP as Internal Auditors for FY 202223 under Section 138 of the Act. Their appointment continues for FY 2023-24.
There are no qualifications, reservations or adverse remarks against the Company made by Statutory Auditors/Secretarial Auditors in their respective Reports.
6. CORPORATE SOCIAL RESPONSIBILITY (CSR)
The CSR activities by the Company were undertaken through RPG Foundation, which is committed towards undertaking CSR activities across all group companies of the RPG group. The composition of the Sustainability and Corporate Social Responsibility Committee of the Company, in accordance with Section 135 of the Act, is covered under the Corporate Governance Report which forms part of this report.
A detailed report on CSR activities in line with the Companies (Corporate Social Responsibility Policy) Rules, 2014, as amended from time to time, is attached as Annexure F to this report.
7. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The provisions relating to disclosure of details regarding energy consumption, both total and per unit of production, are not applicable as the Company is engaged in the services sector and provides IT and IT related services.
Particulars prescribed under Section 134(3)(m) of the Act, read with the Companies (Accounts) Rules, 2014 in respect of Technology Absorption, Foreign Exchange earnings and outgo as on March 31, 2023, and R&D expenditure during the Financial Year are set out as Annexure G to this report. Further details are provided under Capital sections respectively, which form part of this Integrated Annual Report.
i. The Company is not required to maintain cost records, as specified by the Central Government under Section 148 of the Act.
ii. Key initiatives with respect to stakeholder relationship, customer relationship, environment, sustainability, health and safety have been disclosed under respective heads of Corporate Governance Report and Business Responsibility Report.
iii. No application has been made under the Insolvency and Bankruptcy Code; hence the requirement to disclose the details of application made or any proceeding pending under the Insolvency and Bankruptcy Code, 2016 (31 of 2016) during the Financial Year along with their status as at the end of the Financial Year is not applicable.
iv. The requirement to disclose the details of difference between amount of the valuation done at the time of onetime settlement and the valuation done while taking loan from the Banks or Financial Institutions along with the reasons thereof, is not applicable.
The statements made in this Report and Management Discussion and Analysis Report relating to the Company''s objectives, projections, outlook, expectations and others may be "forward looking statements" within the meaning of applicable laws and regulations. Actual results may differ from expectations those expressed or implied. Some factors could make difference to the Company''s operations that may be, due to change in government policies, global market conditions, foreign exchange fluctuations, natural disasters etc.
10. ACKNOWLEDGEMENTS AND APPRECIATIONS
The Directors place on record their appreciation for the continued co-operation extended by all stakeholders including various departments of Central and State Government, Shareholders, Investors, Bankers, Financial Institutions, Customers, Dealers and Suppliers.
The Board also places on record its gratitude and appreciation of committed services of executives and employees of the Company.
Mar 31, 2022
Your Directors are pleased to present 59th Integrated Annual Report together with the Audited Financial Statements for the Financial Year ended March 31, 2022.
1. FINANCIAL PERFORMANCE AND STATE OF AFFAIRS
(INR Million) |
||||
Particulars |
Standalone |
Consolidated |
||
FY 2021-22 |
FY 2020-21 |
FY 2021-22 |
FY 2020-21 |
|
Revenue from operations |
16,289 |
13,618 |
42,438 |
37,814 |
Other Income (Net) |
1,337 |
739 |
1,377 |
254 |
Total Income |
17,626 |
14,357 |
43,815 |
38,068 |
Profit before Tax |
4,303 |
3,732 |
5,741 |
4,329 |
Profit after Tax (after Minority Interest) |
3,208 |
2,896 |
4,163 |
3,000 |
On standalone basis, during FY 2021-22, the Company recorded total income of INR 17,626 million comprising income from software development and allied services of INR 16,289 million and other income of INR 1,337 million. The Company recorded a net profit of INR 3,208 million reflecting an increase of about 10.77% Y-o-Y.
On consolidated basis, the Company has achieved a 12% growth on Y-o-Y basis with total income of INR 43,815 million comprising income from Software Development and Allied Services of INR 42,438 million and other income of INR 1,377 million. The Consolidated net profit was INR 4,163 million reflecting increase of about 38.77% Y-o-Y.
The Financial Statements are prepared in accordance with the Indian Accounting Standards (IND AS).
Based on profits during FY 2021-22 and continuing the tradition of rewarding the members, the Company declared an interim dividend of INR 1.50 (75%) per equity share of face value of INR 2 per equity share on the paid up equity share capital of the Company. The total payout amounted to INR 339.2 million.
The said dividend was declared in accordance with the Dividend Distribution Policy of the Company, formulated pursuant to SEBI (Listing Obligations and Disclosure Requirements) Regulations ("Listing Regulations"), which is available on website of the Company at https://www. zensar.com/sites/default/files/investor/policies-reports-fillings/dividend destribution policy 0.
Further, the Board recommends a final dividend of INR 3.50 (175%) per equity share of face value of INR 2 per equity share on the paid-up equity share capital of the Company, for the year under review. The total pay-out will amount to about INR 792.23 million. The payment of dividend shall be made within 30 days from the date of declaration to the concerned shareholders as per the record date, as set out in the AGM Notice. The total dividend for the year including the interim dividend is therefore INR 5 per equity share of INR 2 per equity share (250%).
In view of the changes made under the Income-tax Act, 1961, by the Finance Act, 2020, dividends paid or distributed by the Company shall be taxable in the hands of the Shareholders. The Company shall, accordingly, make the payment of the final dividend after deduction of tax at source, subject to relevant threshold.
Pursuant to the Act and IEPF Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, as amended from time to time, during the year under review, the Company has transferred the following dividend(s) and corresponding share(s) to IEPF, upon completion of period of seven years:
Date of |
Type of |
Total Amount of Dividend |
Total No. of shares transferred |
Declaration |
Dividend |
transferred (INR) |
|
July 23, 2014 |
Final |
1,899,654.00 |
43,976 |
January 19, 2015 |
Interim |
1,560,739.50 |
42,185 |
The total amount lying in the Unpaid Dividend Account of the Company up to the year under review and the corresponding shares, would be liable to be transferred to the IEPF, as per the records of RTA as follows:
Sr. No. |
FY to which dividend relates |
Type of Dividend |
Amount lying in the Unpaid Dividend Account (INR) (as on March 31, 2022) |
1. |
2021-22 |
Interim |
1,540,191.85 |
2. |
2020-21 |
Final |
1,985,928.20 |
Interim |
1,245,668.60 |
||
3. |
2019-20 |
2nd Interim |
2,280,983.53 |
1st Interim |
1,112,350.00 |
||
4. |
2018-19 |
Final |
1,691,919.00 |
Interim |
1,048,762.00 |
||
5. |
2017-18 |
Final |
1,631,126.00 |
Interim |
1,157,480.00 |
||
6. |
2016-17 |
Final |
2,509,325.00 |
1st Interim |
1,936,435.00 |
||
7. |
2015-16 |
2nd Interim |
2,418,927.00 |
1st Interim |
1,680,870.00 |
||
8. |
2014-15 |
Final |
2,097,550.00 |
The data on unpaid/unclaimed dividend and other unclaimed amounts is available on the Company''s website at https://www.zensar.com/about/investors/ investors-relation#corporate-governance. Members who have not yet encashed their unclaimed/unpaid amounts are requested to correspond with the Company''s Registrar and Transfer Agents, at the earliest.
Particulars |
|
Loan(s) |
Please refer Note No. 6(d) of Notes to Financial Statements |
Guarantee(s) |
Please refer Note No. 29 of Notes to Financial Statements |
Investment(s) |
Please refer Note No. 6(a) of Notes to Financial Statements |
All related party transactions that were entered into during FY 2021-22, were on arm''s length basis and in the ordinary course of business.
Requisite approval(s) of the Audit Committee is obtained on periodic basis for the transactions, which are repetitive in nature or otherwise. The actual transactions entered into, pursuant to the approval so granted, are also placed periodically, before the Audit Committee.
The policy on related party transactions is available at https://www.zensar.com/sites/default/files/investor/ policies-reports-fillings/Zensar RPT Policy.pdf.
During FY 2021-22, no materially significant related party transactions that may have potential conflict with the interests of Company at large, were entered into by the Company.
Further, the Company has not entered into any material transaction with related parties, during the year under review, which requires reporting in Form AOC-2 in terms of the Act, read with Companies (Accounts) Rules, 2014. However, the requisite disclosures under IND-AS form part of Notes to Financial Statements.
The information on Company''s affairs and related aspects, is provided under Management Discussion and Analysis Report, which has been prepared, inter-alia, in compliance with Regulation 34 of Listing Regulations and forms part of this report.
Details in respect of adequacy of internal financial controls with reference to the Financial Statements are stated in Management Discussion and Analysis Report, which forms part of this Report.
No amount is proposed to be transferred to General Reserve on declaration of dividend(s).
During the year under review, the Company has not accepted Deposits under Chapter V of the Act.
During the year under review, there was no change in the nature of the business of the Company or its subsidiaries, within the meaning of, inter-alia, Section 134 of the Act and Companies (Accounts) Rules, 2014, as amended from time to time.
There are no material changes and commitments affecting the financial position of the Company which have occurred between the end of the Financial Year on March 31, 2022 to which the Financial Statements relate and the date of this report.
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.
Pursuant to Section 92 of the Act and related rules, as amended from time to time, a copy of draft Annual Return for the Financial Year ended March 31, 2022, is available
on website of the Company at https://www.zensar. com/about/investors/investors-relation#corporate-governance.
Further, final Annual Return for the Financial Year ended March 31, 2022, once filed, shall also be made available on the above-mentioned weblink.
Subsidiary Companies
Your Company along with subsidiaries provides digital solutions and technology services globally. As of March 31, 2022, the Company had 15 Subsidiaries as per details to be set out in Annual Return.
⢠In July 2021, the Company and Zensar Technologies Inc, USA completed acquisition of M3Bi India Private Limited and M3Bi LLC, USA, respectively.
⢠In September 2021, Zensar Colombia S.A.S., was incorporated as a wholly owned subsidiary of Zensar Technologies Inc, USA, to explore and cater to emerging business opportunities in Colombia.
⢠Keystone Technologies Mexico, S. DE R.L. DE C.V., 100% step-down subsidiary in Mexico merged into Keystone Logic Mexico, S. DE R.L. DE C.V., 100% step-down subsidiary in Mexico, pursuant to amendments in Federal Labor Laws of Mexico. The said merger was completed effective from October 31, 2021.
⢠In March 2022, entire shareholding of Clusten 16 Proprietary Limited (Clusten) (including their associated parties) in Zensar (South Africa) Proprietary Limited, a subsidiary incorporated in South Africa (ZSAPTY) was bought back and thereafter shares were issued to Riverbend Trade & Invest 58 Proprietary Limited (Riverbend) by way of entering into relevant Agreement(s).
⢠Mumbai Bench of Hon''ble National Company Law Tribunal ("NCLT"), vide its order dated March 14, 2022 (certified copy received on May 5, 2022) sanctioned the joint petition filed by Cynosure Interface Services Private Limited ("CISPL") and Zensar Technologies Limited ("ZTL" or "the Company") for approval of Scheme of Amalgamation of CISPL with ZTL and their respective shareholders ("Scheme") pursuant to the provisions of Sections 230-232 and other applicable provisions of the Companies Act, 2013. Appointed Date for the said merger is April 1, 2021. The Company has made the requisite filing(s) on May 18, 2022 post which the merger was effective.
The highlights of performance of subsidiaries and their contribution to the overall performance of the Company/ Group, are included in Form AOC-1 forming part of Consolidated Financial Statements section in this Annual Report, in accordance with the provisions, inter-alia, of Section 129 of the Act read with Rule 5 of the Companies
(Accounts) Rules, 2014. Further details of developments among subsidiaries during the year under review are set out in the Notes to Consolidated Financial Statements.
Policy for determining material subsidiaries framed by the Company, is available on https://www.zensar.com/ sites/default/files/investor/policies-reports-fillings/ Policy%20on%20Material%20Subsidiaries 0.pdf.
Pursuant to provisions of Section 134 of the Act and Regulation 17 of the Listing Regulations, the Nomination and Remuneration Committee has laid down criteria for evaluating Board effectiveness by assessing performance of the Board as a whole, performance of individual Director and permanent Committees of the Board, details of which are available in the Corporate Governance Report.
Further, the Nomination and Remuneration Committee had laid down a structure for evaluating Board effectiveness and engaged a third-party agency to conduct Board Effectiveness Survey during the year under review. The survey findings and feedbacks were then considered while conducting the requisite evaluations inter-alia under the provisions of the Act and Listing Regulations.
No Independent Director was appointed by the Company during the year under review.
The Directors confirm that:
a) in the preparation of the annual accounts for the Financial Year ended March 31, 2022, the applicable accounting standards had been followed and there were no material departures;
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 at the end of the Financial Year as at March 31, 2022 and of the profit of the Company for that period;
c) the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act 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.
Directors(s) and Key Managerial Personnel(s) |
|||
Appointment(s)/Re-appointment(s) |
Cessation(s) |
||
⢠H. V. Goenka (DIN:00026726), Non-Executive, Non-Independent Director and Chairman, retires by rotation and being eligible, offers himself for re-appointment. A resolution seeking Members'' approval for his re-appointment forms part of the Notice. The Board recommends his re-appointment. A brief resume along with, nature of expertise in specific functional areas, names of companies in which he holds directorship(s), membership(s) of the Board''s Committees, shareholding in the Company and relationships with the directors inter-se, forms part of the Notice. |
⢠Shashank Singh (DIN:02826978), Non-Executive, Non-Independent - Nominee Director, tendered his resignation pursuant to termination of Investment agreement with Marina Holdco (FPI) Limited, effective from close of business hours on December 10, 2021. ⢠Navneet Khandelwal, resigned as the Chief Financial Officer with effect from close of business hours on January 31, 2022 owing to personal reasons. |
||
⢠The term of five years of Independent Director(s), Ketan Dalal (DIN:00003236) and Ben Druskin (DIN:07935711) would expire on November 2, 2022, whereas Harsh Mariwala (DIN:00210342) will complete his tenure of five years on January 17, 2023. The proposal for their reappointment for a second term is placed before the shareholders for their approval. |
|||
⢠The above-mentioned directors have expressed their consent for re-appointment. |
|||
⢠Sachin Zute was appointed as the Chief Financial Officer effective from May 10, 2022 on the recommendation of Nomination and Remuneration Committee and Audit Committee vide their meetings held on April 23, 2022 and May 9, 2022, respectively. |
During the year under review, there were no other change(s) in the Board Composition and Key Managerial Personnel of the Company, except as stated above.
During the year under review, Seven (7) meetings of the Board were held, details of which are set out in the Corporate Governance Report which forms part of this report.
Detailed composition of the following Committees of the Board, number of meetings held during the year under review and other related details, are set out in the Corporate Governance Report which forms part of this report:
Corporate Social Responsibility Committee was renamed as "Sustainability & Corporate Social Responsibility Committee" vide Board meeting dated May 10, 2022.
With the resignation of Shashank Singh as Non-Executive & Non-Independent Director-Nominee Director, from the board of the Company, the Audit Committee, Risk Management Committee and M&A Committee stood reconstituted to that extent, with effect from December 10, 2021.
Details of terms of reference of Committees, membership(s) and attendance of members are provided in the Corporate Governance Report. There were no instances during FY 2021-22 where the Board had not accepted any recommendation of any of the Committees of the Board.
The Company has received Declaration of Independence from Independent Directors inter-alia, pursuant to Section 149 of the Act and under Listing Regulations, confirming and certifying that: 1
Disclosure under Sexual Harassment of Women at the Workplace (Prevention, Prohibition and Redressal) Act, 2013
The Company has in place Internal Committee(s) and an Anti-Sexual Harassment Policy, inter-alia, in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and rules made thereunder to redress all the sexual harassment complaints reported by women employee(s). The Company has zero tolerance for sexual harassment at workplace.
The following is the summary of complaints received and disposed- off during the year under review:
Number of complaints received 1
Number of complaints disposed off 1
Number of complaints pending 0
The Company currently has three Employees Stock Option Schemes in force, namely, "2002 Employees
Stock Option Scheme" (2002 ESOP), "2006 Employees Stock Option Scheme" (2006 ESOP) and Employee Performance Award Unit Plan, 2016 (EPAP 2016) and these schemes are being implemented, as per SEBI Regulations, in this regard.
In FY 2021-22, 6,430 equity shares, 2,49,210 equity shares and 325,546 equity shares were allotted under 2002 ESOP, 2006 ESOP and EPAP 2016, respectively. The Nomination and Remuneration Committee vide its meeting held on January 20, 2022, resolved that no further options shall be granted under 2002 ESOP and 2006 ESOP.
The 2002 ESOP, 2006 ESOP and EPAP 2016 Plans are in compliance with SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021, as amended from time to time. There has not been any material change in the ESOP plan(s) during the year.
The disclosure pursuant to SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 is available on the website of the Company at https://www.zensar. com/investor/financials.
Particulars of Employees |
||
Information pursuant to Section 197 of the Act, read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 |
||
1. |
The ratio of remuneration of each director to the median remuneration of the employees of the Company excluding Managing Director for the Financial Year. |
Please refer Annexure to this Report for details. |
2. |
Percentage increase in remuneration of each director, Chief Financial Officer, Chief Executive Officer, Company Secretary or Manager, if any, in the Financial Year. |
|
3. |
The percentage increase in the median remuneration of employees. |
The percentage increase in the median remuneration in FY 2021-22 of employees on India Payroll was 8.91%. |
4. |
The number of permanent employees on the rolls of Company (in India) |
8,860 (as on March 31, 2022) |
5. |
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 point out if there are any exceptional circumstances for increase in the managerial remuneration. |
Average percentage1 increase made in the salaries of the employees other than the managerial personnel in the last Financial Year is 9.93% for India based associates. |
* Since percentile refers to a score below which a given percentage of scores in its frequency distribution falls, for an accurate representation of above calculation sought, we refer to percentage increase at an average level of salaries for the employees concerned.
The remuneration to employees is as per the remuneration policy of the Company. The percentage increase in the median remuneration of employees has been calculated after excluding Managing Director''s remuneration.
Ajay Singh Bhutoria, Chief Executive Officer and Managing Director, does not receive any commission from the Company nor from any of its subsidiary(ies). Shashank Singh, Non-Executive - Non-Independent -Nominee director received commission only for the proportionate period.
The statement containing names of top ten employees in terms of remuneration drawn and the particulars of employees as required under Section 197(12) of the Act read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is provided in a separate annexure forming part of this report. None of the employees listed in the said Annexure are related to any Director(s) of the Company or hold 2% or more of the paid-up equity share capital of the Company. Further, the report and the accounts are being sent to the Members excluding the aforesaid annexure. In terms of Section 136 of the Act, the said annexure is open for inspection and any Member interested in obtaining a copy of the same may write to the Company.
The Company has continued the practice of developing the Integrated Annual Report, based on International Integrated Reporting Council''s (''IIRC'') Framework, which encourages organisations to communicate their value creation over time. The Company has embarked on this journey to communicate its integrated thinking and how its business creates sustained value for stakeholders. The second Integrated Report also encompasses aspects like strategy, performance, governance frameworks, value creation based on various forms of capital viz. financial capital, manufactured capital, intellectual capital, natural capital, social & relationship capital and human capital.
A detailed report on the same for FY 2021-22 along with the practicing Company Secretary''s certification thereon, is provided in the corporate governance section of this report.
A detailed Management Discussion and Analysis Report is annexed to this report.
As stipulated under the Listing Regulations, the Business Responsibility Report (BRR) on initiatives taken from environmental, social and governance perspective, under Regulation 34(2)(f) is annexed to this report.
The Company has a Nomination and Remuneration Policy (Policy) for nomination and remuneration of Directors, Key Managerial Personnel (KMP), Senior Management
Personnel (SMP) and other employees, pursuant to the Act and Listing Regulations, as amended from time to time.
The salient features of the Policy, are:
1. Appointment and remuneration of Directors, KMP and SMP.
2. Determination of qualifications, positive attributes
and independence for appointment of a Director (Executive/Non-Executive/Independent) and
recommendation to the Board matters relating to the remuneration for the Directors, KMP and SMP.
3. Formulating the criteria for performance evaluation of all Directors.
4. Board Diversity
The said Policy is available on the website of Company at https://www.zensar.com/sites/default/files/investor/ policies-reports-fillings/Nomination%20and%20 Remuneration%20Policy.pdf
Vigil Mechanism/Whistle Blower Policy
Pursuant to Section 177(9) of the Act and Regulation 22 of Listing Regulations, the Company has established a Vigil Mechanism/Whistle Blower Policy for Directors and employees to report their genuine concerns. The Policy provides for Directors and employees to report concerns about unethical behavior, actual or suspected fraud or violation of Company''s Code of Governance and Ethics. The policy is available on the website of the Company at https://www.zensar.com/sites/default/files/investor/ policies-reports-fillings/Whistle-Blower-Policy.pdf
The Company has in place robust measures to safeguard whistle blowers against victimisation. Directors and employees are duly sensitised about mechanisms and guidelines for direct access to the Chairman of the Audit Committee, in appropriate cases.
Further, during FY 2021-22, no personnel has been denied access to the Audit Committee.
5. AUDITORS AND AUDIT REPORTS
Statutory Auditors
The term of M/s. Deloitte Haskins and Sells LLP, as the Statutory Auditors of the Company, to conduct audit of Financial Statements of the Company will expire at the conclusion of the ensuing 59th Annual General Meeting (AGM).
As per the provisions of Section 139 of the Act, the Board of Directors of the Company, on the recommendation of the Audit Committee, recommends appointment of M/s. S R B C & CO LLP (ICAI Firm Registration No. FRN 324982E/E300003), for a period of five years i.e. upto the conclusion of 64th AGM.
M/s. S R B C & CO LLP, (i) have expressed their willingness to be appointed, (ii) have submitted their confirmation to the effect that they continue to satisfy the criteria provided in Section 141 of the Act and (iii) that their appointment is within the limits prescribed under Section 141(3)(g) of the Act.
A resolution proposing appointment of the Statutory Auditors of the Company and their remuneration pursuant to Section 139 of the Act, along with the explanatory statement under regulation 36(5) of the SEBI (Listing Obligation and Disclosure Requirement) Regulations, 2015, forms part of the Notice of 59th AGM.
There was no instance of fraud reported by the Statutory Auditors during FY 2021-22, as required under Section 134 of the Act and rules thereunder.
Secretarial Auditors
Pursuant to the provisions of Section 204 of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board had appointed M/s. SVD & Associates, Company Secretaries in Practice, to undertake the Secretarial Audit of the Company, for FY 2021-22. The Report of the Secretarial Audit in Form MR - 3 is annexed herewith.
Further, pursuant to SEBI circular CIR/CFD/CMD1/27/2019 dated February 8, 2019, the Annual Secretarial Compliance Report submitted by M/s SVD & Associates, also forms part of the Board''s Report. The said report(s) does not contain any qualification, reservation or adverse remarks.
The appointment of M/s. SVD & Associates, as Secretarial Auditors, continues for FY 2022-23.
Further, during FY 2021-22 and two previous Financial Years, no penalties, strictures were imposed on the Company by stock exchange(s) or SEBI or any statutory authority, on any matter related to capital markets.
Internal Auditors
The Board had appointed Ernst & Young LLP, Pune as Internal Auditors for FY 2021-22 under Section 138 of the Act. For FY 2022-23, Board appointed KPMG Assurance and Consulting Services LLP as Internal Auditor.
Explanations on Qualification, Reservation or Adverse Remark or Disclaimer made by Auditors
There are no qualifications, reservations or adverse remarks made by the Statutory Auditors/Secretarial Auditors in their respective Reports.
6. CORPORATE SOCIAL RESPONSIBILITY (CSR)
The CSR activities by the Company were undertaken through RPG Foundation, which is committed towards undertaking CSR activities across all group companies of RPG. The composition of the SCSR Committee of the Company, in accordance with Section 135 of the Act, is covered under the Corporate Governance Report which forms part of this report.
A detailed report on CSR activities in line with the Companies (Corporate Social Responsibility Policy) Rules, 2014, as amended from time to time, is attached to this report.
7. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The provisions relating to disclosure of details regarding energy consumption, both total and per unit of production, are not applicable as the Company is engaged in the services sector and provides IT and IT related services.
Particulars prescribed under Section 134(3)(m) of the Act, read with the Companies (Accounts) Rules, 2014 in respect of Technology Absorption, Foreign Exchange earnings and outgo as on March 31, 2022 and R&D expenditure during the Financial Year are set out as Annexure to this report.
Further details are provided under ''Natural Capital'' and ''Intellectual Capital'' sections respectively which form part of this Integrated Annual Report.
8. OTHER DISCLOSURES
i. The Company is not required to maintain cost records, as specified by the Central Government under section 148 of the Act.
ii. Key initiatives with respect to stakeholder relationship, customer relationship, environment, sustainability, health and safety have been disclosed under respective heads of Corporate Governance Report and Business Responsibility Report.
iii. No application has been made under the Insolvency and Bankruptcy Code; hence the requirement to disclose the details of application made or any proceeding pending under the Insolvency and Bankruptcy Code, 2016 (31 of 2016) during the Financial Year along with their status as at the end of the Financial Year is not applicable.
⢠they possess the requisite expertise and experience and are persons of high integrity and repute; and
⢠they have registered themselves with the Independent Directors'' Database maintained by IICA.
Pecuniary Relationship or Transactions of NonExecutive Directors and Disclosures about Remuneration of Directors
All pecuniary relationship or transactions of NonExecutive Directors vis-a-vis the Company, disclosures on the remuneration of the Directors along with their shareholding are disclosed in Corporate Governance Report which forms part of this Report and also available on the website of the Company, pursuant to relevant regulations.
Inter-Se Relationships between the Directors
There are no relationships between the Directors inter-se, except between Anant Goenka and H. V. Goenka. Anant Goenka, Non-Executive, Non-Independent Director, is son of H. V. Goenka, Chairman.
Risk Management
A detailed report on Risk Management is included in Management Discussion and Analysis Report, which forms part of this report.
Secretarial Standards
The Company complies with the applicable mandatory Secretarial Standards.
iv. The requirement to disclose the details of difference between amount of the valuation done at the time of onetime settlement and the valuation done while taking loan from the Banks or Financial Institutions along with the reasons thereof, is not applicable.
The Board places on record appreciation for the contribution of associates at all levels, customers, business and technology partners, vendors, investors, regulatory authorities and all other stakeholders towards the performance of the Company during the year under review.
The Directors express their deepest condolences towards loss of lives due to COVID-19 pandemic, within in and outside the Zensar family.
For and on behalf of the Board of Directors
Place: Mumbai H. V. Goenka
Date: June 27, 2022 Chairman
Note: All the Annexures referred in the Board''s Report form an integral part of the same, unless otherwise stated. The entire Annual Report along with the Notice convening the AGM is to be read together.
they have complied with all the requirements of being an Independent Director of the Company, as on January 1, 2022 and as on date. The said certificate(s) were taken on record by the Board, at its meetings held on January 24, 2022 and May 10, 2022 respectively, after due assessment of veracity of the same;
Mar 31, 2018
BOARD''S REPORT
Dear Members,
The Directors are pleased to present their 55th Annual Report together with the Audited Financial Statements, Directors Report and Annexures for the year ended 31st March 2018.
FINANCIAL SUMMARY:
The Financial summary is as under:
Standalone (INR Lakhs)
Year ended 31st March 2018 |
Year ended 31st March 2017 |
|
Income from operations |
1,28,581 |
1,27,239 |
Miscellaneous Income |
6,275 |
2,172 |
Total |
1,34,856 |
1,29,411 |
Profit Before Taxation |
25,678 |
25,299 |
Profit After Taxation |
19,258 |
18,022 |
Proposed Dividend |
3,149 |
3,141 |
Transfer to General Reserves |
10,000 |
10,000 |
Consolidated (INR Lakhs)
Year ended 31st March 2018 |
Year ended 31st March 2017 |
|
Income from operations |
3,10,774 |
3,05,559 |
Miscellaneous Income |
7,439 |
2,406 |
Total |
3,18,213 |
3,07,965 |
Profit Before Taxation |
35,157 |
34,862 |
Profit After Taxation |
24,649 |
23,837 |
In the preparation of financial statements, no treatment different from that prescribed in Indian Accounting Standards (Ind AS) has been followed.
On standalone basis, during the FY 2017-18, the Company recorded total income of INR 1,34,856 Lakhs comprising Income from Software Development and Allied Services of INR 1,28,581 Lakhs, and other income of INR 6,275 Lakhs. The Company recorded a net profit of INR 19,258 Lakhs reflecting an increase of 6.9% as compared to previous year.
On consolidated basis, the Company has maintained growth with Total income of INR 3,18,213 Lakhs comprising Income from Software Development and Allied Services of INR 3,10,774 Lakhs and other income of INR 7,439 Lakhs. The Consolidated Net profit was INR 24,649 Lakhs reflecting increase of 3.4% as compared to previous year.
There are no Material changes and commitments, affecting the financial position of the Company which have occurred between the end of the FY on 31st March 2018 to which the financial statements relate and the date of the report.
BUSINESS UPDATE AND STATE OF COMPANYâS AFFAIRS
It has been two years since the Company embarked on attaining an ambitious goal of being a digital entity. We are proudly a 100% digital Company today and are confident of enabling the customers walk the same path. This feat has been achieved with single-minded effort and focus to continue exploring the various ways in which Company can bring a quantifiable business outcome to itself first and then its customers. The Company has been successful in helping customers understand the benefits of this outlier way of thinking by showing them clear business outcomes or enjoy the Return on Digital® ecosystem.
The Company has also shown remarkable growth in the retail front with approximately 29% of its business coming from this sector. It is well poised to take on the opportunities available due to the advancement in the adoption of digital technologies, with the digitally reskilled team, strong sales leadership and streamlined operations network.
The year gone by, also saw the Company successfully partner with customer(s) on their automation journey with live bots helping streamline operations of few key brands across the UK and South Africa. The Company managed to create new in-roads into blockchain implementations as well as new work has been done in the space of Machine Learning and Artificial Intelligence. This exercise has helped the Company, become better advisors and consultants to the customers.
As of FY2017-18, Company''s digital portfolio with year ended revenues reported at about 38%, a growth of about 2.9% over the previous year''s revenues of USD 156.6 million. The profit after tax was at USD 43.6 million, marking 3.4% increase over the previous year''s PAT at USD 42.2 Million.
The digital strategy strengthened due to acquisitions of Foolproof, the design agency from UK and Keystone Logic, the digital supply chain company. While they came into the Zensar fold in FY2016-17, the contribution to the business was realized in the fiscal year under review. This year Company added strength to the digital insurance strategy by acquisition of Cynosure Inc., a leading Guidewire Partner Connect Consulting Partner in the Property and Casualty Insurance category. It brings successful implementations, provides core system modernization with rich customer relationships that will add significant value to Company''s offerings. The Insurance sector forms one of the focus areas and this acquisition is a strategic fit in the overall business blueprint.
Regions:
The US, which is Company''s largest market, saw addition of new customers as well extension of existing customer relationships. The large-deals team, formed last year, were at the forefront of some well contested deals. The Management could drive sales more sharply, with clear focus on resolving customer centric challenges. The UK region performed consistently well with some new logos across banking and financial services and retail been added. The team displayed a clear understanding of customer needs, and built excellent relationships with decision makers. South Africa has been on a steady path, with new business been added, and the Company continued commitment to the local community development.
FY2017-18 has been a year wherein a lot of what was started two years ago came together. The Management brought in new things to the Company, some for the first time and worked towards creating a more engaged workplace. Transparency, clarity of purpose and a keen sense of where Company wishes to go, were the driving factors. The mindset revolved around how Company could be better at what it does for customers, employees, partners, community and investors. Digital is the new galaxy of opportunities and the Company is all set to write more stories together as a more committed, stronger, innovative and united entity.
The Management Discussion and Analysis report which forms part of this Annual report, further elaborates on Company performance and related aspects.
EXTRACT OF ANNUAL RETURN
Details forming part of the extract of the Annual Return in form MGT 9 is annexed herewith as "Annexure A".
NUMBER OF MEETINGS OF THE BOARD
During the year under review, 5 (Five) meetings of the Board of Directors were held, details of which are set out in the Corporate Governance Report which forms part of this Report.
BOARD COMMITTEES
Detailed composition of the Board committees namely Audit Committee, Nomination and Remuneration Committee, Stakeholders Relationship Committee, Corporate Social Responsibility Committee and Banking Committee, number of meetings held during the year under review and other related details are set out in the Corporate Governance Report which forms part of this Report.
There have been no instances where the Board has not accepted any recommendation of the Audit Committee.
DIRECTORSâ RESPONSIBILITY STATEMENT AS REQUIRED UNDER SECTION 134 OF THE COMPANIES ACT, 2013
The Directors confirm that -
a) in the preparation of the annual accounts for the financial year ended 31st March 2018, the applicable accounting standards had been followed and there were no material departures;
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 at the end of the financial year as at 31st March 2018 and of the profit and loss of the Company for that period;
c) the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act 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.
STATEMENT ON DECLARATION OF INDEPENDENT DIRECTORS
The Board of Directors of the Company comprises of optimum number of Independent Directors. Based on the confirmation / disclosures received from the Directors, the following Non-Executive Directors are Independent in terms of the Section 149(6) of the Companies Act, 2013 and Regulation 16(1)(b) of the SEBI (LODR) Regulations, 2015 as on 31st March, 2018:
1. Mr. A. T. Vaswani
2. Mr. Venkatesh Kasturirangan
3. Mr. Sudip Nandy
4. Mr. Ketan Dalal
5. Mr. Ben Druskin
6. Ms. Tanuja Randery
7. Mr. Harsh Mariwala
PECUNIARY RELATIONSHIP OR TRANSACTIONS OF THE NON-EXECUTIVE DIRECTORS AND DISCLOSURES ON THE REMUNERATION OF THE DIRECTORS
All pecuniary relationship or transactions of the nonexecutive Directors vis-a-vis the Company, containing requisite information for such payments and disclosures on the remuneration of the Directors along with their shareholding are disclosed in Corporate Governance Report and Form MGT 9 which forms part of this Report.
A proposal to enhance remuneration of the non-executive director, forms part of the Notice convening ensuing AGM. The Board recommends the same for approval of the Members of the Company.
NOMINATION & REMUNERATION POLICY
The Company''s policy on Directors'' appointment and remuneration, containing requisite information for determining qualifications, positive attributes, independence of a Director and other matters provided under Section 178 (3) is enclosed with this Report as Annexure B.
EXPLANATION AND COMMENTS ON AUDITORâS AND SECRETARIAL AUDIT REPORT
There is no qualification, disclaimer, reservation or adverse remark made by the Statutory Auditors in Auditors'' Report.
Further, there is no qualification, disclaimer, reservation or adverse remark made by the Company Secretary in practice in Secretarial Audit Report except as below:
"The Company has not appointed woman Director for the period from 03rd October, 2017 to 17th January, 2018 as required under the provisions of Section 149 of the Act read with rule 3 of the Companies (Appointment and Qualification of Directors) Rules, 2014."
In this behalf, your Directors state that, Company had appointed Ms. Madhabi Puri Buch as Independent Director effective April 1, 2015. However, on her appointment as member of Securities and Exchange Board of India (SEBI), she resigned as a Director of the Company with effect from April 3, 2017. It took the Company some time to find a suitable replacement. Accordingly, with effect from 18th January 2018, Ms. Tanuja Randery was appointed as an additional as well as Independent Director on the Board.
SECRETARIAL STANDARDS
The Company complies with all the applicable Secretarial Standards.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS
The particulars of the guarantees given are mentioned in the Note No. 6 (d) and 35 of Notes to Accounts pursuant to Section 186 (4) read with Companies (Meetings of Board and its Powers) Rules, 2014. The purpose for granting the loan was to meet the gap in working capital.
The particulars of investments made are stated in Note No. 6 (a) in the Notes to Accounts.
RELATED PARTY TRANSACTIONS
All related party transactions that were entered into during the financial year were on an arm''s length basis and were in the ordinary course of business.
All Related Party Transactions are placed before the Audit Committee. Requisite approval of the Audit Committee is obtained on periodic basis for the transactions which are repetitive in nature or otherwise. The actual transactions entered into pursuant to the approval so granted are placed at quarterly meetings of the Audit Committee.
The Company has formulated a Policy on related party transactions. This policy as approved by the Board is uploaded on the Company''s website on the below link:
https://www.zensar.com/sites/default/files/investor/
policies-reports-fillings/Policy%20on%20Related%20Party
%20Transactions.pdf
TRANSFER TO RESERVE
Your Directors propose to transfer a sum of INR 10,000 Lakhs to General Reserve.
DIVIDEND
Your Company had reported satisfactory profit levels in the first three quarters of the current financial year. Continuing with the Company''s tradition of rewarding the Members, Interim dividend of INR 5/- per share aggregating to about INR 2,249 Lakhs was paid in the month of February, 2018.
Further, the Board recommends a final dividend of INR 7/- per equity share of face value of INR 10/- each (70%) on the paid-up equity share capital of the Company for the year under review. The pay-out will amount to about INR 3,149 Lakhs excluding dividend distribution tax.
The Company has adopted a Dividend Distribution policy during the year under review and the same is enclosed to this report as Annexure L.
MATERIAL CHANGES AND COMMITMENTS, IF ANY AFFECTING THE FINANCIAL POSITION OF THE COMPANY
There are no Material changes and commitments, affecting the financial position of the Company which have occurred between the end of the financial year on 31st March, 2018 to which the financial statements relate and the date of this report.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The provisions relating to disclosure of details regarding energy consumption, both total and per unit of production are not applicable as the Company is engaged in the services sector and provides IT and IT related services.
Particulars prescribed under Section 134 (3)(m) of The Companies Act, 2013, read with the Companies (Accounts) Rules, 2014 in respect of technology absorption are set out in "Annexure C" to this report.
Given the global nature of the business of the Company, exports always from its trust. Total foreign exchange earnings during the year has been INR 121,736 Lakhs (previous year INR 117,233 Lakhs) and foreign exchange outgo has been INR 11,588 (previous year INR 5,546 Lakhs)
Particulars regarding R & D expenditure during the year are given in Note No. 5 of Notes to Accounts.
RISK MANAGEMENT
A detailed report on Risk Management is included in Management Discussion and Analysis which forms part of this Report. The report clearly states development and implementation of a risk management policy for the Company including identification therein of elements of risks along with risk mitigation plan.
CORPORATE SOCIAL RESPONSIBILITY
The Company believes in the Triple Bottomline (3P) approach that is, ensuring a sustained and holistic approach to People, Planet and Profit. In fact, commitment to People and Communities is one of the three core values, and the spirit of Corporate Social Responsibility runs across the organization whether it be through the commitment and involvement of senior leadership, exceptional volunteering practices or the extensive exposure to CSR at the time of induction of new recruits. Primarily, CSR activities at the Company are undertaken through RPG Foundation, which in turn is committed to undertaking CSR activities across all group companies of RPG. The Company is proud to say that over 17% of associates volunteer their time and energy, aligning with the CSR programs.
A few of the highlights in the areas of Community Development, Digital Literacy, Employability Enhancement and Environment sustenance are:
- Community Development: This year saw the emergence of city-level interventions. More than 19,000 people have been checked across Pune, Hyderabad and Bangalore under Netranjali - a free eye check-up program that not only checks eyesight and provides free spectacles to people in communities but also educates them about the do''s and don''ts that should be followed to prevent eye diseases and disorders. 96 women across Pune and 48 across Bangalore benefited from "Swayam"
- a two-wheeler driving course for women. A bedside nursing program called "Sanjeevani" and an Entrepreneurship program were also introduced in Pune to increase employment opportunities for women and youth. Under Sanjeevani, 87 people benefited and 28 have been placed till date in hospitals and in critical care centers in Kharadi. 13 people have successfully started their businesses through the entrepreneurship program. In addition, livelihood generation programs in the areas of Fashion Designing, AC, Refrigerator and mobile repairing, Beautician etc. were undertaken for the benefit of underprivileged communities in Pune & Hyderabad.
Under the Economic Development program, about 146 households were surveyed in Pune resulting in an increase in awareness about various government and private schemes and benefits. Communities are now able to analyze their income and expenditure and have increased their savings after availing different schemes. Three knowledge spaces of library, science lab and IT lab have been replicated at the Kharadi school in Pune. Events and activities such as Aksharotsav and science-fairs were organized in schools in Pune to promote reading and encourage practical learning through experiments and projects. The Udaan English proficiency program was launched at the Gachibowli school in Hyderabad, benefiting about 600 children.
- National Digital Literacy Mission (NDLM) centers and buses: In the FY 2017-18, the digital literacy program run by CSR at the Company, continues to be a leader amongst corporates in working towards the National Digital Literacy Mission wherein at least one person from every household in India, should be digitally literate by the year 2020. The Company has 3 mobile buses and has reached out to about 1,331 households in Pune of which about 1,366 people have become digitally literate. The Company continues in its efforts to spread digital literacy amongst the underprivileged and spearhead this mission. The digitally literate candidates are benefiting after demonetization, as they are familiar with the electronic options available to them. Online banking has become easier and is used more often. The internet is used to learn new skills and information which in turn helps them with their business, education and growth.
- The Employability Skills Development program has grown further during the FY 2017-18. Under this program more than 1700 students from Tier-2 and Tier-3 engineering colleges received more than 210 hours of employability related free trainings in technical, digital and business communication skills. These trainings were conducted by corporate trainers as per the need of industry. After completion of the training, around 64% of students received job offers from various tier-1 and tier-2 companies.
- Environment Sustenance: The 2-acre Biodiversity Park which was developed by Zensar Foundation in September 2012 in partnership with the PMC, is maintained actively. The park continues to attract an average of 300 visitors daily. More than 12 Biodiversity and Sustainability sessions were conducted through the year, to create focused outreach for the Park. As a continued effort, The Company carried out an Annual Winter Biodiversity Assessment of the Park. A total of about 221 floral and 48 faunal species were recorded in the Park. Introduction of more native species of plants was a focus this year, and community participation was welcomed for the same. Udaan Farming Club, a network of green warriors works on the community patch, learn to grow organic food and at the same time learn about various indigenous methods of natural farming too.
Currently, 4 water huts are being installed in 4 Government schools to provide clean drinking water to children in Hyderabad. In addition to this, there are more than 1,100 Zensarians across Pune, Hyderabad and Bangalore who volunteer and participate in activities and events across all interventions. They have carried out Tree Plantation activities in June and July - planting more than 50 species in Ayurvedic College, Wagholi. Apart from this, regular clean-up drives aligning with the national movement of Swachh Bharat have also been conducted. Storytelling and extra-curricular activities are conducted with children at both schools and community development centers in Pune. Sessions on Sustainable Menstruation and Hygiene, Talks on World Environment Day, Climate Change workshops were held in Bangalore, Hyderabad, and Pune to spread awareness on the importance of Environment Conservation and Practice.
These are just a few of the activities undertaken in the year 2017-18. Through working in missions such as NDLM and Swachh Bharat and programs such as those of NSDM (National Skills Development Mission), CSR continues to align itself with local, state and national government policies. We look forward to further expansion in the coming years in terms of outreach as well as impact.
The Company had to spend INR 504.47 Lakhs during the year 2017-18 on CSR activities. As on 31st March, 2018 Company has spent INR 498.11 Lakhs During the year, it was proposed to conduct employability skills related trainings for around 142 batches of students. However due to unavailability of training rooms / labs at colleges, coupled with unavailability of students due to exams / annual programs, trainings of around 5 batches had to be rescheduled from Q4-FY2017-18 to Q1-FY2018-19. This inadvertent rescheduling resulted into minor shortfall of about INR 6.36 Lakhs during FY2017-18. As against the CSR obligation of INR 504.47 Lakhs.
The Company is evaluating appropriate additional programs and projects to scale up in the chosen areas of CSR spends during the year 2018-19 and shall strive to complete its entire CSR obligation going forward.
A detailed report on CSR activities is attached to this report here as Annexure D.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
During the year under review, following changes have occurred in the Board of Directors as well as Key Managerial Personnel:
1. During the financial year under review, following changes occurred in the Board of Directors of the Company:
Sr. No. |
Name of the Director |
Nature of Change |
Date |
Category |
1 |
Ms. Madhabi Puri Buch |
Ceased due to resignation |
03-Apr-17 |
Independent Director |
2 |
Mr. Ketan Dalal* |
Appointment |
03-Nov-17 |
Additional as well as Independent Director |
3 |
Mr. Ben Druskin* |
Appointment |
03-Nov-17 |
Additional as well as Independent Director |
4 |
Ms. Tanuja Randery* |
Appointment |
18-Jan-18 |
Additional as well as Independent Director |
5 |
Mr. Harsh Mariwala* |
Appointment |
18-Jan-18 |
Additional as well as Independent Director |
^Approval of the Members is sought for appointment of these director(s) as non executive independent Directors not liable to retire by rotation. Requisite proposals for the same form part of the notice convening 55th AGM. The Board recommends said resolution(s) for the approval of the Members of the Company.
2. During the financial year under review, following changes occurred in the Key Managerial Personnel of the Company:
Sr. No. |
Name of the Director |
Nature of Change |
Date |
Category |
1 |
Mr. Manoj Jaiswal |
Ceased due to resignation |
04-Dec-17 |
Chief Financial Officer |
2 |
Mr. Navneet Khandelwal |
Appointment |
18-Jan-18 |
Chief Financial Officer |
3 |
Mr. Nilesh Limaye |
Ceased due to retirement |
31-Jan-18 |
Company Secretary |
4 |
Mr. Gaurav Tongia |
Appointment |
01-Feb-18 |
Company Secretary |
SUBSIDIARY COMPANIES
The Company along with subsidiaries provides digital solutions and technology services globally.
The performance and financial position of the subsidiary companies included in the consolidated financial statement is provided in accordance with the provisions, inter-alia, of Section 129 read with Rule 5 of the Companies (Accounts) Rules, 2014 as a separate statement annexed to the Notes on Accounts containing the salient features of the financial statement of Company''s subsidiaries in Form AOC - 1.
During the financial year under review, the Company incorporated three Wholly Owned Subsidiaries in India viz. Zensar Information Technologies Limited, Zensar Software Technologies Limited and Zensar IT Services
Limited. Further, Wholly Owned Subsidiary Company of the Company, viz. Zensar Technologies (Singapore) Pte. Ltd. in Singapore incorporated, Wholly Owned Subsidiary viz. Zensar Info Technologies (Singapore) Pte. Ltd. in Singapore.
The Board of Directors at its meeting held on 14th March 2018, approved transfer of business in certain geographies to Zensar Information Technologies Limited and Zensar Software Technologies Limited, by way of slump sale.
Further, in its meeting held on 14th March 2018, the Board of Directors of Wholly Owned Subsidiary Company of the Company, viz. Zensar Technologies (Singapore) Pte. Ltd. in Singapore approved transfer of its business to Wholly Owned Subsidiary viz. Zensar Info Technologies (Singapore) Pte. Ltd in Singapore by way of slump sale. The relevant disclosures in this behalf were filed with the Stock Exchanges.
On 21st March 2018, the Company had entered in to definitive agreement for acquisition of Cynosure Interface Services India Pvt. Ltd. An agreement to acquire Cynosure Inc., USA was entered into by Zensar Technologies Inc. USA a wholly owned subsidiary of the Company, on the same day.
Further, the Company has framed policy for determining material subsidiaries as per requirements of Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 and has uploaded the same on website and link for the same is as below:
https://www.zensar.com/sites/default/files/investor/
policies-reports-fillings/Policy%20on%20Material%20
Subsidiaries.pdf
Stand-alone Financial Statements and Consolidated Financial Statements of your Company along with its subsidiaries, prepared in accordance with the relevant Accounting Standards issued by The Institute of Chartered Accountants of India, forms a part of this Annual Report.
INFORMATION PURSUANT TO RULE 5 OF THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL REMUNERATION) RULES, 2014
1 |
The ratio of the remuneration of each director to the median remuneration of the employees of the Company excluding Managing Director for the financial year. |
Please refer Annexure E- 1 to this Report for details. |
2 |
The percentage increase in remuneration of each director, Chief Financial Officer, Chief Executive Officer, Company Secretary or Manager, if any, in the financial year. |
Please refer Annexure E- 2 to this Report or details |
3 |
The percentage increase in the median remuneration of employees. |
The percentage increase in the median remuneration in the financial year 2017-18 of employees on India Payroll was 7.1% * |
4 |
The number of permanent employees on the rolls of Company. |
6,716 |
5 |
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 point out if there are any exceptional circumstances for increase in the managerial remuneration. |
Average percentage increase made in the salaries of the employees other than the managerial personnel in the last financial year is 6.9% for India based employees. Considering 0% increment employees, average percentile increase is 47.5th percentile. |
6 |
The key parameters for any variable component of remuneration availed by the Directors. |
The variable component of remuneration availed by the Directors is based on Profit After Tax reported by the Company at the end of each financial year and recommendation of Nomination and Remuneration Committee. |
7 |
Affirmation that the remuneration is as per the remuneration |
The remuneration to employees of the Company is as per the |
policy of the Company. |
remuneration policy of the Company. |
* The percentage increase in the median remuneration of employees has been calculated after excluding Managing Director''s remuneration.
Mr. Sandeep Kishore, Chief Executive Officer and Managing Director has not received any directors'' commission during the year from the Company nor any of its subsidiary companies.
DEPOSITS
The Company has not accepted Deposits under Chapter V of the Companies Act, 2013.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS
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.
CHANGE IN THE NATURE OF THE BUSINESS
During the year under review, there was no change in the nature of the business.
INTERNAL FINANCIAL CONTROL
Details in respect of adequacy of internal financial controls with reference to the Financial Statements are stated in Management Discussion and Analysis which forms part of this Report.
VIGIL MECHANISM/WHISTLE BLOWER POLICY
The Company has established a vigil mechanism to report genuine concerns. The Policy provides for Directors and employees to report concerns about unethical behavior, actual or suspected fraud or violation of Company''s Code of Governance and Ethics. The policy is uploaded on the website of the Company:
https://www.zensar.com/sites/default/files/investor/
policies-reports-fillings/Model_Whistle_blower_policy.
INTER - SE RELATIONSHIPS BETWEEN THE DIRECTORS
There are no relationships between the Directors inter-se.
FAMILIARIZATION PROGRAMMES FOR INDEPENDENT DIRECTORS
The Company has Familiarization programme and the details have been uploaded on the website of the Company:
https://www.zensar.com/sites/default/files/investor/
policies-reports-fillings/FAMILIARISATION%20
PROGRAMMES%20FOR%20INDEPENDENT%20
DIRECTORS.pdf
FORMAL ANNUAL EVALUATION OF BOARD AND ITS COMMITTEES
Pursuant to provisions of Section 134 of the Companies Act, 2013 and Regulation 17 of the SEBI (LODR) Regulations, 2015, the Nomination and Remuneration Committee laid down criteria for evaluating Board effectiveness by assessing performance of the Board as a whole, performance of individual Director and Committees of the Board namely Audit Committee, Nomination and Remuneration Committee, Stakeholders Relationship Committee, Banking Committee and Corporate Social Responsibility Committee. The Board approved the criteria laid down by Nomination and Remuneration Committee for evaluating Board effectiveness and engaged a third-party agency to conduct Board effectiveness survey during the year under review. The Survey finding were then considered while conducting the requisite evaluation under the provisions of the Companies Act, 2013 and SEBI (LODR) Regulations, 2015.
MANAGEMENT DISCUSSION AND ANALYSIS
A detailed Management Discussion and Analysis Report is given as a separate section in this Annual Report and is annexed to this Report as "Annexure F".
AUDITORS
Statutory Auditor:
Pursuant to the provisions of the Companies Act, 2013, read with the Companies (Audit and Auditors) Rules, 2014, M/s. Deloitte Haskins and Sells LLP (Firm Registration No. 117366W/W-100018) has been appointed as the Statutory Auditors of the Company to conduct the audit of the financial statement of the Company from FY 2017-18 till FY 2021-22.
The Members are requested to ratify their appointment as Statutory Auditors, pursuant to the provisions of the Companies Act, 2013 in the ensuing Annual General Meeting for the FY 2018-19.
Secretarial Auditor:
Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board had appointed M/s SVD & Associates, a firm of Company Secretaries in Practice (Firm Registration No. P2013MH031900) to undertake the Secretarial Audit of the Company. The Report of the Secretarial Audit in Form MR - 3 is annexed herewith as "Annexure G".
The Board has re-appointed M/s SVD & Associates, a firm of Company Secretaries in Practice to undertake the Secretarial Audit of the Company for the FY 2018-19.
Internal Auditors
The Board had appointed Ernst and Young LLP, as Internal Auditors for the FY 2017-18 under Section 138 of the Companies Act, 2013 and they have completed the internal audit as per scope given by the Audit Committee for the FY 2017-18.
The Board has reappointed Ernst & Young LLP as Internal Auditors for the FY 2018-19.
CORPORATE GOVERNANCE
The Company continues to benchmark itself with the best-of-the-class practices as far as corporate governance standards are concerned. The Company has complied with the requirements provided in Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015. The compliance report on the various requirements under the said clause along with the practicing Company Secretary''s certification thereof is provided in the corporate governance section of this report at "Annexure H".
EMPLOYEES STOCK OPTION PLAN
Currently, the Company has three Employees Stock Option Schemes in force namely, "2002 Employees Stock Option Scheme" (2002 ESOS), "2006 Employees
Stock Option Scheme" (2006 ESOS) and Employee Performance Award Unit Plan, 2016 (2016 EPAP) for granting term based and performance based Stock Options to employees and these schemes are being implemented as per regulation laid down.
During the year, the Performance Award Units (PAUs) were granted to the employees. There were no options granted under any other scheme.
In the financial year 2017-18, 10,550 equity shares were allotted under 2002 ESOS and 1,05,900 equity shares were allotted under 2006 ESOS. No equity shares were allotted under 2016 EPAP. The Disclosures in compliance with Regulation 14 of the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 in this respect are stated in "Annexure I" to this report.
Disclosures for the financial year ended 31st March, 2018 regarding 2002 ESOS , 2006 ESOS and 2016 EPAP in terms of Companies (Share Capital and Debentures) Rules, 2014 are as below:
Particulars |
2002 ESOS |
2006 ESOS |
2016 EPAP |
Options granted |
NIL |
NIL |
70,000 |
Options vested |
NIL |
62,396 |
NIL |
Options exercised |
10,550 |
1,05,900 |
NIL |
The total no of shares arising as a result of exercise of option |
10,550 |
1,05,900 |
NIL |
Options lapsed/cancelled during the year |
12,258 |
387,998 |
18,313 |
The exercise price |
Exercise Price for each grant is different and decided by the Nomination and Remuneration Committee as per the Securities and Exchange Board of India (Employees Stock Option Scheme and Employees Stock Purchase Scheme) Guidelines, 1999 prevailing at the time of grant. |
Exercise Price for each grant is different and decided by the Nomination and Remuneration Committee as per the Securities and Exchange Board of India (Employees Stock Option Scheme and Employees Stock Purchase Scheme) Guidelines, 1999 prevailing at the time of grant. |
INR 10/- |
Variation of terms of options |
No variation in the terms of options during the year under review |
||
Money realized by exercise of options |
INR 8,91,900 |
INR 2,47,81,234 |
NIL |
Total no. of options in force |
21,142 |
2,94,780 |
3,05,505 |
Employee wise details of options granted to: |
|||
Key Managerial Personnel (KMP) |
No new options were granted to KMPs during the year under review |
25,000 PAUs were granted to Mr. Sandeep Kishore, CEO & MD. |
|
Any other employee who receives a grant of options in any one year of option amounting to 5% or more of options granted during that year |
NIL |
NIL |
Venky Ramanan - 10.000 PAUs, Sandeep Kishore - 25.000 PAUs Durai Velan - 20,000 PAUs Harjott Atrii - 15,000 PAUs |
Identified employees who were granted 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 |
Dr. Ganesh Natrajan -5,00,000 Options All of these options have been exercised |
NIL |
NIL |
PARTICULARS OF EMPLOYEES PURSUANT TO SECTION 197 READ WITH RULE 5 OF THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014
Particulars of employees pursuant to Section 197 read with Rule 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are annexed with this report as "Annexure J".
DISCLOSURE UNDER SEXUAL HARASSMENT OF WOMEN AT THE WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013
The Company has in place an Anti-Sexual Harassment Policy, inter-alia, in line with the requirements of the Sexual Harassment of Women at the Workplace (Prevention, Prohibition and Redressal) Act, 2013. Internal Complaints Committee has been set up to redress complaints. The following is the summary of complaints received and disposed off during the year under review:
Number of complaints received and disposed off 1
MATERIAL TRANSACTIONS WITH RELATED PARTIES
The Company has not entered in to any material transaction with related parties during the year under review which requires reporting in Form AOC 2 in terms of Companies Act, 2013 read with Companies (Accounts) Rules, 2014. However, the requisite disclosures under the IND AS form part of the Notes to Accounts in this report.
BUSINESS RESPONSIBILITY REPORT
Company has made out a Business Responsibility Report under Regulation 34 (2) (f) of the SEBI (LODR) Regulations, 2015 requires which forms a part of this Board''s Report and annexed herewith as Annexure K.
ACKNOWLEDGEMENTS
The Board places on record its appreciation of the contribution of Associates at all levels, customers, business and technology partners, vendors, investors, Government Authorities and all other stakeholders towards the performance of the Company during the year under review.
INVESTOR EDUCATION AND PROTECTION FUND (IEPF)
Pursuant to the applicable provisions of the Companies Act, 2013, read with IEPF Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, (the Rules), all unpaid and unclaimed dividends are required to be transferred by the Company to the IEPF established by the Government of India, after completion of seven years. Further, according to the Rules, the shares on which dividend has not been paid or claimed by the shareholders for seven consecutive years or more shall also be transferred to the DEMAT account of the IEPF Authority. Accordingly, the Company has transferred the unclaimed and unpaid dividends and the corresponding shares as the said IEPF rules. The details of the same are available on the website of the Company, www.zensar.com.
SUB-DIVISION OF EQUITY SHARES
The Board of Directors of the Company, at its meeting held on 24th April, 2018, recommended sub-division of Equity Shares of INR 10/- each, into five Equity Shares of INR 2/- each and modifications in the consequential matters, subject to approval of the Members and such other authorities, as may be necessary. It was also proposed to amend the existing Employees Stock Option and Employee Performance Award Unit Plan(s). Requisite proposals for the same, form part of the Notice convening 55th AGM. The Board commends the said resolution(s) for approval of the members of the Company.
For and on behalf of the Board
Sd/-
Place: Mumbai H. V. Goenka
Dated: 24th April, 2018 Chairman
Mar 31, 2017
Dear Members,
The Directors are pleased to present their 541h Annual Report together with the Audited Financial Statements, Directors Report and Annexures for the year ended 31s1 March, 2017.
FINANCIAL SUMMARY:
The Financial summary is as under:
Standalone (Rs. Crores)
|
Year ended |
|
Year ended |
31st |
March, 2017 |
31s'' |
March, 2016 |
Income from operations |
1,282.82 |
1,245.28 |
|
Miscellaneous Income |
11.68 |
52.74 |
|
Total |
1,294.50 |
1,298.02 |
|
Profit Before Taxation |
252.98 |
324.27 |
|
Profit After Taxation |
180.22 |
238.22 |
|
Proposed Dividend |
31.41 |
- |
|
Transfer to General Reserves |
100 |
140 |
|
Consolidated |
|
|
(Rs. Crores) |
|
Year ended |
|
Year ended |
31st |
March, 2017 |
31s'' |
March, 2016 |
Income from operations |
3,060.38 |
2,951.87 |
|
Miscellaneous Income |
19.27 |
53.84 |
|
Total |
3,079.65 |
3,005.71 |
|
Profit Before Taxation |
348.62 |
416.87 |
|
Profit After Taxation |
238.37 |
292.30 |
In the preparation of financial statements, no treatment different from that prescribed in an Indian Accounting Standard (Ind AS) has been followed.
On standalone basis, during the financial year 2016-17, your Company recorded total income of Rs. 1,294.50 Crore comprising Income from Software Development and Allied Services of Rs. 1,282.82 Crore, and other income of Rs. 11.68 Crore. The Company recorded a net profit of Rs.180.22 Crore reflecting a decrease of 24.3%.
On consolidated basis, your Company has maintained growth with Total income of Rs. 3,079.65 Crore comprising Income from Software Development and Allied Services of Rs. 3,060.38 Crore and other income of Rs.19.27 Crore. The Consolidated Net profit was Rs.238.37 Crore reflecting a decrease of 18.4%.
BUSINESS UPDATE AND STATE OF COMPANY''S AFFAIRS
The global IT landscape is in the midst of highly disruptive technology trends driving widespread digital adoption. Digital has taken center-stage, as global enterprises get prepared for Machine Learning, Blockchain, Gaming, Artificial Intelligence, and Robotics towards transforming their business. There is increased investment in research and development efforts to leverage the benefits offered by the combination of cognitive and emerging areas across digital.
According to Gartner*, ''Digital technology platforms are the building blocks for a digital business and are necessary to break into digital. Every organization will have some mix of five digital technology platforms: Information Systems, Customer Experience, Analytics and Intelligence, The Internet of Things and Business Ecosystems. Companies should identify how industry platforms will evolve and plan ways to evolve their platforms to meet the challenges of digital business.''
The worldwide IT-BPM spend through 2016 saw a 4 percent growth amounting to USD 1.2 trillion in 2016. The growth over previous year was largely contributed by investments in cloud infrastructure and buyers'' acceptance of the cloud model. There was an increase in BPM by 4 percent largely due to BPaaS adoption across industries, Robotic Process Automation and adherence to government compliances.
It was important for us to be the digital company first, before helping customers with their digital transformation. In this context, a concerted effort was made at the start of FY17 to create enterprise applications for both internal and external purposes. The challenge was to take the lead at becoming a breathing living digital company, before taking our offerings to the market. Over the last year we have invested strategically in becoming a living digital company. About 5 percent of our workforce is working on developing digital solutions. So far we have created 30 enterprise class applications that includes one-of-its-kind conversation platform with the CEO, the ZenVerse. Here, the CEO answers each question personally and ensures that if there is a good suggestion, the suggestion is incorporated or if there is an issue, corrective recourse is taken. The other apps are built to enable business processes across functions in the organization like HR, Finance, Delivery etc.
With the changing demand of skills there was a need to ensure our teams are future proofed, and we took the initiative to reskill our workforce ensuring they are more in-tune with customer needs. This involved the launch of a digital training academy that helps employees learn new skills, relearn existing ones and be digitally enabled professionals. This initiative has also been externally recognized with an Industry award.
The year gone by was characterized by emerging areas of automation coming alive in the way of personal digital assistants, robots making an appearance in households to take on basic chores, driverless vehicles etc. led by Al and Machine Learning. All these disruptions grew at a faster pace than the earlier years, making it a connected digital eco-system. The impact and influence of these emerging digital platforms was experienced by customers, users, businesses, factories and various processes.
Your company''s Return on Digital® strategy, introduced last year laid the foundation for a ''Living Digital'' company. Our initiatives to make your company a 100 percent digital company, was a success, as both employees, customers and our extended universe of influencers like analysts and the media fraternity acknowledged. This also helped in fortifying our go-to-market positioning as we took large leaps toward our stated goals. This is our clear differentiator and value proposition.
All the digital centric initiatives undertaken by your company have resulted in digital contributing to 29.8% of overall revenues. The changes in geo-political headwinds, as well as disruptive digital forces did impact the overall industry performance. In this context, your company continued building on its strong digital portfolio with year ended revenues reported at INR 3,056 Crore, a growth of 4% over the previous year''s revenues of INR 2,938 Crore. The profits after tax were at INR 238.37 Crore, marking an 18.5% decrease over the previous year''s PAT at 292.30 crores. Your company retains its reputation and position as one of the IT companies with a steady performance through 2016-17.
There were two acquisitions made in the year under review. The acquisition of Foolproof Ltd. along with its subsidiaries, one of Europe''s leading independent experience design agencies added to our overall customer centric digital offerings for the CMO segment. Our second acquisition of Keystone Logic INC, a leading Omni channel and Digital Supply Chain company added more value to our digital commerce business.
In addition many new services and solutions were launched in the year to align to customer needs and to provide them with additional value. Our Infrastructure Management Services maintained significance with introduction of a unique offering that has received much attention from the market - The Vinciâ¢, Zensar''s Intelligent Managed Services Platform. In addition our offerings in newer areas like Robotic Process Automation (RPA) enabled us to chart new opportunities. Our Bots went live at many customer firms in an attempt to automate their processes and to give them greater value for their time. We also successfully launched our Gaming Centre of Excellence (CoE) to establish our expertise in this exciting category.
Our focus on chosen verticals of Manufacturing, Retail and Consumer Goods, Banking, Financial Services and Insurance, and on key markets of the US, UK and South Africa remained constant.
Our customer engagement strategy was revisited with a strategic decision to manage a smaller set of clients, with a view to ensure that our clients got increased attention from us with enhanced focused on improved delivery standards. The introduction of the ''three-in-a box'' approach for our top 30 growth client accounts included a robust representation of our offerings with a team comprising a client engagement representative, a delivery lead and a digital evangelist. Within these accounts the focus is on larger deal sizes, leveraging our relationships and deepening them through meaningful and value adding conversations, as a true transformation partner. This strategic initiative helped your company remain ahead of the curve in the practice of customer centricity and heightened engagement.
Our offerings were recognized by leading market analysts, adding to our thought leadership position. Your company was recognized by leading research analysts like Gartner, Forrester, and ISG Insights etc. We were positioned in the Gartner''s Oracle Magic Quadrant for Oracle Application Services, North America. Some of the key recognitions include being featured as a Niche and Established service provider in Zinnov Zones - Digital in Retail 2016; Digital Commerce Service Provider in Gartner 2017 Digital Commerce Vendor Guide, a Strong Performer in Forrester Wave -Application Outsourcing Capabilities of Midsize Offshore Vendors, 2016; Gartner Magic Quadrant for Managed Mobility Services to name a few.
Our Digital Commerce business saw many marquee logos being added to our portfolio. The addition of Keystone Logic to this business unit, opened up new avenues for us. We are considered an end-to-end robust digital commerce provider with a strong digital supply chain offering now in tow.
Our Oracle business saw many additions, as we went live with widespread implementations across worldwide customers. Our capabilities in the context of Oracle Cloud, added potential to generate new opportunities in a growing space.
USA continued to be the largest market for your company. While, we are taking cognizance of the proposed sweeping changes that are taking shape in this region, we will continue to build value and offer visible business outcomes to our customers in America. UK and Europe were in the throes of new policies and regulations due to Brexit. South Africa saw currency fluctuations in the Rand. Our regional performance was consistent, despite these volatilities.
FY17 has been a watershed year for your company with the successful introduction of new organization-wide initiatives that impact customers, employees, our investors and the community we operate in. The year gone by was about translating Return on Digital® into actionable outcomes and initiatives. Your company is poised to ride on the crest of changes emerging across the futuristic digital landscape.
(*Reference: Gartner''s Top 10 Strategic technology Trends 2017; URL:
http://www.gartner.com/smarterwithgartner/gartners- top-10-technology-trends-2017/)
EXTRACT OF ANNUAL RETURN
Details forming part of the extract of the Annual Return in Form MGT 9 is annexed herewith as âAnnexure Aâ.
NUMBER OF MEETINGS OF THE BOARD
During the year under review, 6 (Six) meetings of the Board of Directors were held, details of which are set out in the Corporate Governance Report which forms part of this Report.
BOARD COMMITTEES
Detailed composition of the Board committees namely Audit Committee, Nomination and Remuneration Committee, Stakeholders Relationship Committee, Corporate Social Responsibility Committee and Banking Committee, number of meetings held during the year under review and other related details are set out in the Corporate Governance Report which forms part of this Report.
There have been no situations where the Board has not accepted any recommendation of the Audit Committee.
DIRECTORS'' RESPONSIBILITY STATEMENT AS REQUIRED UNDER SECTION 134 OF THE COMPANIES ACT, 2013
The Directors confirm that -
a) in the preparation of the annual accounts for the financial year ended 31s1 March, 2017, the applicable accounting standards had been followed and there were no material departures;
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 at the end of the financial year as at 31s1 March, 2017 and of the profit and loss of the company for that period;
c) the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act 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.
INDEPENDENCE OFTHE BOARD
The Board of Directors of the Company comprises of optimum number of Independent Directors. Based on the confirmation / disclosures received from the Directors and on evaluation of the relationships disclosed, the following Non-Executive Directors are Independent as on March 31, 2017 in terms of the Section 149(6) of the Companies Act, 2013 and Regulation 16(1)(b) of the SEBI (LODR) Regulations, 2015:
1. Mr. A.T. Vaswani
2. Mr. SudipNandy
3. Mr. Venkatesh Kasturirangan
4. Ms. Madhabi Puri Buch
PECUNIARY RELATIONSHIP OR TRANSACTIONS OF THE NONEXECUTIVE DIRECTORS AND DISCLOSURES ON THE REMUNERATION OFTHE DIRECTORS
All pecuniary relationship or transactions of the nonexecutive Directors vis-a-vis the company, along with criteria for such payments and disclosures on the remuneration of the Directors along with their shareholding are disclosed in Corporate Governance Report and Form MGT 9 which forms part of this Report.
NOMINATION & REMUNERATION POLICY
The Company''s policy on Directors'' appointment and remuneration, including criteria for determining qualifications, positive attributes, independence of a Director and other matters provided under Section 178 (3) is enclosed with this Report as Annexure B.
EXPLANATION AND COMMENTS ON AUDITOR''S AND SECRETARIAL AUDIT REPORT
The Statutory Auditorâs Report does not contain any qualification, disclaimer, reservation or adverse remark.
Further, the Secretarial Audit Report does not contain any qualification, disclaimer, reservation or adverse remark.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS
The full particulars of the loans granted are mentioned in the Note No. 6d and 32 of Notes to Accounts pursuant to Section 186 (4) read with the Companies (Meetings of Board and its Powers) Rules, 2014. The purpose for granting the loan was to meet the gap in working capital.
Full particulars of investments made are stated in Note No. 6a in the Notes to Accounts.
RELATED PARTY TRANSACTIONS
All related party transactions that were entered into during the financial year under review were on an arm''s length basis and were in the ordinary course of business.
All Related Party Transactions are placed before the Audit Committee. Prior omnibus approval of the Audit Committee is obtained on a yearly basis for the transactions which are repetitive in nature. The actual transactions entered into pursuant to the omnibus approval so granted are placed at quarterly meetings of the Audit Committee.
The Company has formulated a Policy on related party transactions. This policy as approved by the Board and is uploaded on the Company''s website on the below link:
http://www.zensar.com/sites/all/themes/zensar/pdf/ln
vestors/Policy%20on%20Related%20Party%20Transactions.pdf
TRANSFER TO RESERVE
Your Directors propose to transfer a sum of Rs.100 Crore to General Reserve.
DIVIDEND
Your Company had reported satisfactory profit levels in the first three quarters of the current financial year. Continuing with the Company''s tradition of rewarding the Members, Interim dividend of Rs. 5/- per share aggregating to Rs.224,154,030/- was paid in the month of February, 2017.
Further, the Board recommends a final dividend of Rs.7/per equity share of face value of Rs.Rs.10/- each (70%) on the paid-up equity share capital of the Company for the year under review. The total pay-out will amount to Rs.314,115,466/-.
The Company has adopted a Dividend Distribution policy during the year under review and the same is enclosed to this report as Annexure M.
MATERIAL CHANGES AND COMMITMENTS, IF ANY AFFECTING THE FINANCIAL POSITION OF THE COMPANY
There are no Material changes and commitments, affecting the financial position of the Company which have occurred between the end of the financial year on 31s1 March, 2017 to which the financial statements relate and the date of this report.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION
The provisions relating to disclosure of details regarding energy consumption, both total and per unit of production are not applicable as the company is engaged in the service sector and provides IT and IT related services.
Particulars prescribed under Section 134 (3)(m) of The Companies Act, 2013, read with the Companies (Accounts) Rules, 2014 in respect of technology absorption are set out in âAnnexure Câ to this report. Particulars regarding R & D expenditure during the year are given in Note No. 5 of Notes to Accounts.
RISK MANAGEMENT
A detailed report on Risk Management is included in Management Discussion and Analysis which forms part of this Report. The report clearly states development and implementation of a Risk Management Policy for the company including identification therein of elements of risks along with risk mitigation plan.
CORPORATE SOCIAL RESPONSIBILITY
At Zensar, we believe in the Triple Bottom line (3P) approach that is, ensuring a sustained and holistic approach to People, Planet and Profit. In fact, Commitment to People and Communities is one of the three core values of Zensar, and the spirit of Corporate Social Responsibility (CSR) runs across the organization whether it be through the commitment and involvement of senior leadership, exceptional volunteering practices or the extensive exposure to CSR at the time of induction of new recruits. Some CSR activities at Zensar are undertaken through RPG Foundation, which in turn is committed to under take CSR activities across all group companies of RPG. Zensar is proud to say that over 20% of associates volunteer their time and energy, aligning with the CSR programs.
A few of the highlights in the areas of Community Development, Digital Literacy, Employability
Enhancement and Environment Sustenance are:
- Integration of community development: Having worked with three slum communities and a village, the CSR programs are now in a position to integrate the various learning spaces (Adopted Schools, Community Development Centres and Udaan English Proficiency Centres) and engagement programs of gender Equality, distress addressing networks and mentoring programs). This year saw the emergence of Economic Development Program; in the light of demonetization in December 2016. This program will enable our communities to save more, look at individual and household financial management and link it to various skills/vocations they want to train on. In Anjaiah Nagar Mandal Parishad School, the School Monitoring Committees (SMC) was formed to bring together teachers and parents together formally. Three knowledge spaces of Library, Digital Lab and Science Lab was launched along with Education Board and Pune Municipal Corporation officials. Udaan English Centre, a flagship program is now replicated across Community Development Centres in Pune - the program would be scaled up across locations in the coming Financial Year.
- National Digital Literacy Mission (NDLM) centers and buses: In the year 2016-17, the digital literacy program run by CSR at Zensar continues to be a leader amongst corporates in working towards the National Digital Literacy Mission wherein at least one person from every household in India, should be digitally literate by the year 2020. We achieved 95% digital literacy in the communities of Anjaiah Nagar and Yamuna Nagar. Overall, we have trained 3500 people across 12 communities through 5 physical centres and 3 mobile buses. We continue in our efforts to spread digital literacy amongst the underprivileged and spearhead this mission. The digitally literate candidates benefitted during the demonetization, as they were familiar with the technical options available to them. The youth checked the results of their 101h, 12th and final year graduation online at our digital centres.
- The Employability Skills Development program has expanded significantly during the year 2016-17. Under this program more than 1500 students from Tier-2 and Tier-3 engineering colleges received 200 hours of employability related trainings in technical, digital and behavioural skills. After completion of the training, around 68% of students received job offers from various companies. In addition, livelihood generation programs in the areas of Tailoring, Data Entry, Administrative Assistant, Retail Assistant etc. were undertaken for the benefit of underprivileged communities in Pune & Hyderabad.
- Environment Sustenance: The 2-acre Biodiversity Park which was developed by Zensar Foundation in September 2012 in partnership with the PMC, is maintained actively. The park continues to attract an average of 300 visitors daily. In May 2016 an Urban Gardeners'' club was launched to build a network of communities around the park are passionate about the planet. Various Biodiversity sessions were conducted through out the year at the park and at Zensar''s campus to spread the message of Environment. Volunteers continued their efforts in co-building the terrace garden at Late Hambirao Moze School, Pune; and organized clean up drives across Pune city. Volunteers in Hyderabad also dug rainwater harvesting pits in for Gachibowli Mandal Parishad School.
These are just a few of the activities undertaken in the year 2016-17. Through working in missions such as NDLM and Swachh Bharat and programs such as those of NSDC (National Skills Development Mission), CSR continues to align itself with local, state and national government policies. We look forward to further expansion in the coming years in terms of outreach as well as impact.
The Company had an outlay to spend Rs.574.00 Lakhs during the year 2016-17 on CSR activities. As on 31s1 March, 2017 Company has spent Rs.558.79 Lakhs. This was the third year of CSR spent as required under the Companies Act, 2013. The Company has evaluated appropriate programs and projects to scale up in the chosen areas of CSR spends during the year 2016-17 and accordingly the unspent amount this year was minimal to the extent of Rs. 15.21 Lakhs. The Company shall strive to complete its entire CSR obligation going forward.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
During the year under review, following changes have occurred in the Board of Directors as well as Key Managerial Personnel:
1. Dr. Ganesh Natarajan ceased to be Vice-Chairman and Managing Director and demitted the office of directorship w.e.f. 301h April, 2016 on expiry of his term. The Board records its appreciation of the valuable contribution made by Dr. Natarajan in the growth of the Company during his tenure as Vice Chairman and Managing Director of the Company;
2. Mr. Manoj Jaiswal has been appointed as Chief Financial Officer of the Company w.e.f. 161h January, 2017 in place of retiring Chief Financial Officer Mr. S Balasubramaniam;
3. Mr. P. K. Mohapatra, Non-executive Independent Director passed away on 131h March, 2017. The Board records its deep appreciation of the services rendered by Late Mr. Mohapatra during his tenure as a Director of the Company.
SUBSIDIARY COMPANIES
Your Company along with subsidiaries provides digital solutions and technology services globally. A Report on the performance and financial position of each of the subsidiaries pursuant to Rule 8 (1) and Form AOC 1 read with Rule 5 of Companies (Accounts) Rules, 2014 is annexed as Annexure E and forms a part of this Report.
The Wholly Owned Subsidiary Company in UK has acquired one of Europe''s leading experience design agencies Foolproof Limited headquartered in London along with its two wholly owned subsidiary companies in UK and one wholly owned subsidiary Company in Singapore in November, 2016.
The Wholly Owned Subsidiary Company in USA has acquired Keystone Logic Inc. a leading Omnichannel and Digital Supply Chain Company, headquartered in Atlanta, USA in March, 2017.
Further, the Company entered into a definitive agreement to acquire the business of Keystone Logic Solutions Private Limited on March 30,2017.
Mr. Sandeep Kishore, Managing Director and CEO has not received any commission during the year from the Company nor any of its subsidiary companies.
The Company has framed policy for determining material subsidiaries as per requirements of Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 and has uploaded the same on website and link for the same is as below:
http://www.zensar.com/sites/all/themes/zensar/pdf/lnvestors/Zensar%20Policy%20for%20determining%20 material%20subsidiaries.pdf
Stand-alone Financial Statements and Consolidated Financial Statements of your Company along with its subsidiaries, prepared in accordance with the relevant Accounting Standards issued by The Institute of Chartered Accountants of India, forms a part of this Annual Report.
DEPOSITS
The Company has not accepted Deposits under Chapter V of the Companies Act, 2013.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS
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.
CHANGE IN THE NATURE OF BUSINESS
During the year under review, there was no change in the nature of the business.
INTERNAL FINANCIAL CONTROL
Details in respect of adequacy of internal financial controls with reference to the Financial Statements are stated in Management Discussion and Analysis which forms part of this Report.
INFORMATION PURSUANT TO RULE 5 OF THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL REMUNERATION) RULES, 2014
1 |
The ratio of the remuneration of each director to the median remuneration of the employees of the company excluding Managing Director for the financial year. |
Please refer Annexure F-1 to this Report for details. |
2 |
The percentage increase in remuneration of each director, Chief Financial Officer, Chief Executive Officer, Company Secretary or Manager, if any, in the financial year. |
Please refer Annexure F- 2 to this Report for details |
3 |
The percentage increase in the median remuneration of employees. |
The percentage increase in the median remuneration of employees on India Payroll was 8%1 during the financial year 2016-17 |
4 |
The number of permanent employees on the rolls of company. |
6,451 |
5 |
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 point out if there are any exceptional circumstances for increase in the managerial remuneration. |
Considering 0% increment associates, average percentile increase is 48.3rd percentile & excluding 0% increment associates, average percentile increase is 48.2nd Percentile. |
6 |
The key parameters for any variable component of remuneration availed by the Directors. |
The variable component of remuneration availed by the Directors is based on Profit After Tax reported by the Company at the end of each financial year and recommendation of Nomination and Remuneration Committee. |
7 |
Affirmation that the remuneration is as per the remuneration policy of the company. |
The remuneration to employees of the Company is as per the remuneration policy of the company. |
VIGIL MECHANISM/WHISTLE BLOWER POLICY
The Company has established a vigil mechanism for Directors and employees to report their genuine concerns. The Policy provides for Directors and employees to report concerns about unethical behavior, actual or suspected fraud or violation of Company''s Code of Governance and Ethics. The whistle blower policy is uploaded on the website of the Company on the link below.
http://www.zensar.com/sites/all/themes/zensar/pdf/lnvestors/Model_Whistle_blower_policy.pdf
INTER SE RELATIONSHIPS BETWEEN THE DIRECTORS
There are no relationships between the Directors inter se.
FAMILIARISATION PROGRAMMES FOR INDEPENDENT DIRECTORS
The Company has conducted Familiarization programme and the details of the same has been uploaded on the website of the Company on the link below:
http://www.zensar.com/sites/all/themes/zensar/pdf/lnvestors/FAMILIARISATION%20PROGRAMMES%20 FOR%20INDEPENDENT%20DIRECTORS.pdf
FORMAL ANNUAL EVALUATION OF BOARD AND ITS COMMITTEES
Pursuant to provisions of Section 134 of the Companies Act, 2013 and Regulation 17 of the SEBI (LODR) Regulations, 2015, the Nomination and Remuneration Committee laid down a criteria for evaluating Boardâs effectiveness by assessing performance of the Board as a whole, performance of individual director and Committees of the Board namely Audit Committee, Nomination and Remuneration Committee, Stakeholders Relationship Committee, Banking Committee and Corporate Social Responsibility Committee. The Board approved the criteria laid down by Nomination and Remuneration Committee for evaluating Boardâs effectiveness and engaged a third party agency to conduct Boardâs effectiveness survey during the year under review.
MANAGEMENT DISCUSSION AND ANALYSIS
A detailed Management Discussion and Analysis Report is given as a separate section in this Annual Report and is annexed to this Report as âAnnexure Gâ.
AUDITORS Statutory Auditor:
Pursuant to the provisions of the Companies Act, 2013, read with the Companies (Audit and Auditors) Rules, 2014, the Board at its Meeting held on 20th December, 2016 had appointed M/s. Deloitte Haskins and Sells LLP as Statutory Auditors of the Company for the Financial Year 2017-18, subject to approval of the Members in ensuing Annual General Meeting in place of the retiring Statutory Auditors M/s Price Waterhouse whose term expires as per the relevant provisions of the Companies Act, 2013 read with Rules formed there under.
Members are requested to confirm and approve their appointment.
Secretarial Auditor:
Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board had appointed M/s SVD & Associates, a firm of Company Secretaries in Practice to undertake the Secretarial Audit of the Company. The Report of the Secretarial Audit in Form MR-3 is annexed herewith as âAnnexure Hâ.
The Board has reappointed M/s SVD & Associates, a firm of Company Secretaries in Practice to undertake the Secretarial Audit of the Company for the financial year 2017-18.
Internal Auditors:
The Board had appointed Ernst and Young LLP as Internal Auditors for the financial year 2016-17 under Section 138 of the Companies Act, 2013 and they have completed the internal audit as per scope given by the Audit Committee for the financial year 2016-17.
The Board has reappointed Ernst & Young LLP as Internal Auditors of the Company for the financial year 2017-18.
CORPORATE GOVERNANCE
Your Company continues to benchmark itself with the best-of-the-breed practices as far as corporate governance standards are concerned. Your Company has complied with the requirements provided in Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015. The compliance report on the various requirements under the said clause along with the practicing Company Secretary''s certification thereof is provided in the corporate governance section of this report at âAnnexure Iâ
EMPLOYEES STOCK OPTION PLAN
Currently, the Company has three Employees Stock Option Schemes in force namely, â2002 Employees Stock Option Schemeâ (2002 ESOS), â2006 Employees Stock Option Schemeâ (2006 ESOS) and Employee Performance Award Unit Plan, 2016 (2016 EPAP) for granting term based and performance based Stock Options to employees and these schemes are being implemented as specified by Securities Exchange Board of India in this regard.
Company has rolled out Employee Performance Award Unit Plan, 2016 (EPAP 2016) and granted Performance Award Units (PAUs) to the employees for the first time in year under review.
In the financial year 2016-17, 9,500 equity shares were allotted under 2002 ESOS and 2,32,710 equity shares were allotted under 2006 ESOS. No equity shares were allotted under 2016 EPAP. The Disclosures in compliance with Regulation 14 of the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 in this respect are stated in âAnnexure Jâ to this report.
Disclosures for the financial year ended 31s1 March, 2017 regarding 2002 ESOS, 2006 ESOS and 2016 EPAP in terms of Companies (Share Capital and Debentures) Rules, 2014 are as below:
Particulars |
2002 ESOS |
2006 ESOS |
2016 EPAP |
|
Options granted |
NIL |
2,13,000 |
2,53,818 |
|
Options vested |
43,950 |
2,45,658 |
NIL |
|
Options exercised |
9,500 |
2,32,710 |
NIL |
|
The total no of shares arising as a result of exercise of option |
9,500 |
2,32,710 |
NIL |
|
Options lapsed/cancelled during the year |
5,428 |
2,21,594 |
NIL |
|
The exercise price |
Exercise Price for each grant is different and decided by the Nomination and Remuneration Committee as per the Securities and Exchange Board of India (Employees Stock Option Scheme and Employees Stock Purchase Scheme) Guidelines, 1999 prevailing at the time of grant. |
Exercise Price for each grant is different and decided by the Nomination and Remuneration Committee as per the Securities and Exchange Board of India (Employees Stock Option Scheme and Employees Stock Purchase Scheme) Guidelines, 1999 prevailing at the time of grant. |
Rs.107- |
|
Variation of terms of options |
No variation in the terms of options during the year under review. |
No variation in the terms of options during the year under review. |
No variation in the terms of options during the year under review. |
|
Money realized by exercise of options |
Rs. 1,10,46,250 |
Rs.4,52,11,470 |
NIL |
|
Total no of options in force |
43,950 |
7,88,678 |
2,53,818 |
|
Employee wise details of options granted to: |
|
|
|
|
Key Managerial Personnel (KMP) |
No new options were granted to KMPs during the year under review. |
No new options were granted to KMPs during the year under review. |
No new options were granted to KMPs during the year under review except grant of 1,25,000 PAUs to Mr. Sandeep Kishor |
|
any other employee who receives a grant of options in any one year of option amounting to five percent or more of options granted during that year |
NIL |
Name of Employee |
No of Options |
Name of; No of Employee PAUs |
Mr. John Blackburn |
1,25,000 |
Sandeep 1,25,000 Kishore |
||
Indranil Roychoudhary |
40,000 |
|||
Raju Hari |
12,000 |
Ajay | 20,000 Bhandari |
||
Sandeep Peshkar |
12,000 |
|||
ChandraTripurani |
12,000 |
Malay 12,500 Verma |
||
Anjali Deodhar |
12,000 |
PARTICULARS OF EMPLOYEES PURSUANT TO SECTION 197 READ WITH RULE 5 OF THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014
Particulars |
2002 ESOS |
2006 ESOS |
2016 EPAP |
Identified employees who were granted option, during were granted option, during any one year, equal to or exceeding one percent of the issued capital (excluding outstanding warrants and conversions) of the company at the time of grant |
NIL |
NIL |
NIL |
Particulars of employees pursuant to the Section 197 read with Rule 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are annexed with this report as âAnnexure Kâ.
DISCLOSURE UNDER SEXUAL HARASSMENT OF WOMEN AT THE WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013
The Company has in place an Anti-Sexual Harassment Policy in line with the requirements of the Sexual Harassment of Women at the Workplace (Prevention, Prohibition and Redressal) Act, 2013. Internal Complaints Committee has been set up to redress complaints. The following is the summary of complaints received and disposed off during the year under review:
Number of complaints received and disposed off 1
MATERIAL TRANSACTIONS WITH RELATED PARTIES
The Company has not entered in to any transaction with related parties during the year under review which requires reporting in Form AOC 2 in terms of Companies Act, 2013 read with Companies (Accounts) Rules, 2014.
BUSINESS RESPONSIBILITY REPORT
Business Responsibility Report under Regulation 34 (2) (f) of the SEBI (LODR) Regulations, 2015 forms a part of this Director''s Report and annexed herewith as Annexure L.
ACKNOWLEDGEMENTS
We take this opportunity to thank all the shareholders, customers, suppliers, bankers, business partners / associates, financial institutions associated with the Company for their continued support.
I am sure you will join our Directors in conveying our sincere appreciation to all employees of the Company and its subsidiaries and associates for their hard work and commitment. Their dedication and competence has ensured that the Company continues to be a significant and leading player in the IT Services industry.
We further thank the governments of various countries where we have our operations. We also thank the Government of India, particularly the Ministry of Communication and Information Technology, the Ministry of Commerce, the Ministry of Finance, the Ministry of Corporate Affairs, the Customs and Excise Departments, the Income Tax Department, the Reserve Bank of India, the State Governments, the Software Technology Parks (STPs) / Software Development Centres (SDCs) / Special Economic Zones (SEZs) and all other government agencies for their support and look forward for their continued support in future.
For and on behalf of the Board
Sd/-
H.V. Goenka Place: Pune
Chairman Dated: 251h April, 2017
Mar 31, 2015
Dear Members,
The Directors are pleased to present their 52nd Annual Report together
with the Audited Financial Statements, Directors'' Report and Annexures
for the year ended 31st March 2015.
FINANCIAL SUMMARY:
The Financial summary is as under:
Standalone
(Rs. in Crores)
Income from operations 1052.45 908.48
Miscellaneous Income 48.27 53.53
Total 1100.72 962.01
Profit Before Taxation 253.45 257.96
Profit After Taxation 183.11 187.22
Proposed Dividend 28.81 26.26
Transfer to General Reserves 100.00 100.00
Consolidated (Rs. in Crores)
Income from operations 2627.68 2315.60
Miscellaneous Income 55.05 49.69
Total 2682.73 2365.29
Profit Before Taxation 365.91 339.86
Profit After Taxation 264.59 237.52
In the preparation of financial statements, no treatment different from
that prescribed in an Accounting Standard has been followed.
On standalone basis, during the financial year 2014-15, your Company
recorded total income of Rs. 1,100.72 Crores comprising Income from
Software Development and Allied Services of Rs. 1,052.45 Crores, and
other income of Rs. 48.27 Crores. The Company recorded a net profit
of Rs. 183.11 Crores reflecting a decline of 2%.
On consolidated basis, your Company has maintained growth with Total
income of Rs. 2682.73 Crores comprising Income from Software
Development and Allied Services of Rs. 2627.68 Crores and other income
of Rs. 55.05 Crores. The Consolidated Net profit was Rs. 264.59 Crores
reflecting growth of 11.40%.
There are no Material changes and commitments, affecting the financial
position of the company which have occurred between the end of the
financial year on 31st March, 2015 to which the financial statements
relate and the date of the report.
BUSINESS UPDATES AND STATE OF COMPANY''S AFFAIRS
Technology is driving transformation across enterprises with specific
initiatives in the area of cloud, social media, analytics and big data
analytics. Organizations are looking to find a balance between adopting
new technologies like cloud, while managing existing data centres.
Disruptive technologies continue to create unique challenges, with
enterprises expecting solution partners to manage end to end
transformation for them. This is where Zensar plays a pivotal role and
remains relevant.
Worldwide IT -BPM spend amounted to USD 2.30 trillion, with India
maintaining its edge at 55 percent share. In FY15, the Indian IT-BPM
industry is expected to account for revenues of USD 146 billion, which
is a 13 percent growth from last year. India retains its place in the
spotlight with this industry emerging as the largest and most diverse
private sector employer with approximately 3.5 million direct jobs and
responsible for 10 million indirect jobs. This sector continues to
retain its distinction of being the largest private sector employer in
India. This sector is on the growth path due to the global trends
driving its relevance and potential.
The industry is fuelling growth and charting successful job
opportunities by driving innovation, global learning and enhancing
capabilities on a consistent basis. The Indian government has displayed
its support to encourage more participation by launching the Digital
India and Make in India initiatives. The country is making concerted
strides into creating new technology capabilities with accelerated
learning in the emerging areas of cloud, big data analytics and digital
enterprises. It is this strategy that is helping the country to raise
its viability worldwide.
Globally, the world has become a sharing economy wherein both
individuals and businesses are working with new and futuristic
technologies as well as tools. Technology is driving multiple ways of
connecting, doing business and helping meet business outcomes that are
clearly defined. The role of IT has taken a different focus as digital
becomes omnipresent and this is where we too see business growth and
potential.
The year in question was filled with certain volatilities that were a
concern area, yet your Company continued to navigate through this
business environment to remain focused and achieve its goals. You will
be happy to note that your Company steered through and the results
speak for themselves. The Company reporting FY15 revenue of Rs. 2627.68
Crores, a growth of 13.5% over the previous year revenue of Rs. 2315.60
Crores. The PAT is at Rs. 264.59 Crores, an 11.4% increase over
previous year PAT at Rs. 237.52 Crores. Your Company retains its
reputation as a successful leading global IT organization in 2014-2015.
Zensar has made strategic changes to the way it does business in the
last few years with the vertical approach. This approach has garnered
rewards and the new customer additions indicate that your company is on
the right path. It is through these integrated offerings across
traditional applications software and cutting edge digital services in
the focus verticals, that your Company has seen visible benefits.
One of the winning ways for us has been the focused vertical strategy
which Zensar has successfully implemented across all our regions. This
approach has helped us focus on building expertise and specific
solution capabilities with a clear vision to help customers meet their
business objectives each time. Our investments in creating new
benchmarks for customer service as well as deepening our expertise has
resulted in clear and measurable results. All our efforts towards
building new lines of growth and dedicated focus towards emerging areas
like DevOps, digital solutions etc. has helped us remain profitable,
relevant and on the growth path.
The key vertical areas of focus continue to remain; Manufacturing,
Retail, Banking, Financial Services and Insurance. Each of these
verticals has been strategically enhanced with leadership, talent and
better customer understanding and relationships.
Our foray into developing state-of-the-art social and digital solutions
and consulting capabilities will continue to augment our proven
expertise in the core areas like Application Development, Support,
Maintenance, Testing and Modernisation; Business Process Management;
Infrastructure Management; Enterprise Solutions in Oracle and SAP;
Business Intelligence and CRM.
All efforts towards strengthening your Company''s Infrastructure
Management business, the volume of large deals in this space has helped
us keep momentum across regions. Our diverse teams across global
operations are well versed to adapt to a customer''s needs and work
across processes with a vertical expertise to deliver on results
consistently. Your Company will continue to invest all efforts at
ramping up skill sets periodically to maintain the talent edge as well
ensure that customer centricity remains at the core of every client
project, we undertake. We are well equipped to not only help customers
manage their overall services but also be the go to Company for end to
end infrastructure management requirements.
Managed services is getting attention and your Company is well poised
to integrate on premise and managed service with equal success
measures. We are well placed in terms of building on the potential of
this hugely popular trend.
Your Company enjoys successful and long standing technology
partnerships globally with industry leading OEMs like Oracle,
Microsoft, SAP and SFDC. These partnerships drive and enhance our
technology expertise with singular focus on ensuring that we remain
ahead in terms of delivery and variety of options on offer. Our Oracle
expertise and Platinum Partnership is robust enabling us to leverage
industry focused solutions implemented with visible transformation in
the client''s business. Our Oracle expertise is constantly winning
recognition across both Oracle and analysts alike. Our strength in the
Oracle technology space is further enhanced with a total of more than
2200 experts. Our Oracle advantage is clearly linked towards helping
our customers have seamless operations.
Our leadership in the emerging and high growth potential sector of
Retail eCommerce is further strengthened by our acquisition of
Professional Access. Not only do we enjoy a leverage in terms of
talent, but also helps us advance in our proven track record with large
scale Oracle implementations in the manufacturing and retail segments.
We continue to demonstrate our industry knowledge in SAP through our
Gold Partnership status. We continue to take successful strides in the
area of SAP deployments and are acknowledged by SAP with awards and
recognitions. Zensar''s preconfigured solutions certified by SAP for
select verticals like Dairy, Pharma, Chemical, Retail and Life Sciences
continues to create more potential for domestic and other regional led
business opportunities. Our customers in this space continue to enjoy
the benefits of our HANA centre of excellence.
SMAC is driving enterprise trends across applications. Zensar has built
its expertise around these emerging technology trends with enhanced
capabilities across all these areas. Today, your Company is well placed
to build on these technologies as well as create solutions to serve
nice needs of digital enterprises. Our state of the art Social Command
Center helps companies across industries listen and gain actionable
insights from social media networks which helps customers respond in
time to their various stakeholders in real time.
In terms of the region-wise growth, the US continues to perform
consistently through last year with significant deals helping our
overall profitability. South Africa continued with its stellar
performance with the top 5 brands across the financial spectrum like
banking and insurance remaining on the growth path. The region is all
focused towards making of the new focus areas like retail and mining
along with the government vertical too. Its operations in East Africa
have helped cover the region more effectively with new potential. While
the European region was adversely impacted by volatile economic
conditions, your Company continued to have success in significant wins
in the UK. India enjoyed sustained growth while building focus on
enhanced capabilities and increased focus on talent acquisition and
development.
Your Company has continued to be on its profitable path by keeping
steadfast focus on key areas of customer- centricity in terms of
capability development, talent management and leveraging emerging areas
effectively across the diverse regions it operates in. We are poised to
take flight towards meeting our 2020 goal clearly and surely.
EXTRACT OF ANNUAL RETURN
Details forming part of the extract of the Annual Return in Form MGT 9
is annexed herewith as "Annexure A".
NUMBER OF MEETINGS OF THE BOARD
During the year under review, 8 (Eight) meetings of the Board of
Directors were held, details of which are set out in the Corporate
Governance Report which forms a part of this Report.
BOARD COMMITTEES
Detailed composition of the mandatory Board Committees namely Audit
Committee, Nomination and Remuneration Committee, Stakeholders
Relationship Committee and Corporate Social Responsibility Committee,
number of meetings held during the year under review and other related
details are set out in the Corporate Governance Report which forms a
part of this Report.
There have been no situations where the Board has not accepted any
recommendation of the Audit Committee.
DIRECTORS'' RESPONSIBILITY STATEMENT AS REQUIRED UNDER SECTION 134 OF
THE COMPANIES ACT, 2013
The Directors confirm that -
a) in the preparation of the annual accounts for the financial year
ended 31st March, 2015, the applicable accounting standards had been
followed and there were no material departures;
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 at the end of the financial year as at 31st March, 2015 and
of the profit and loss of the Company for that period;
c) the directors had taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of this Act 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.
STATEMENT ON DECLARATION OF INDEPENDENT DIRECTORS.
The Company has received declaration from each of the Independent
Directors under Section 149 (6) and (7) of the Companies Act, 2013 and
Clause 49 of the Listing Agreement.
PECUNIARY RELATIONSHIP OR TRANSACTIONS OF THE NON-EXECUTIVE DIRECTORS
AND DISCLOSURES ON THE REMUNERATION OF THE DIRECTORS
All pecuniary relationship or transactions of the Non-Executive
Directors vis-a-vis the Company, along with criteria for such payments
and disclosures on the remuneration of the Directorsalong with their
shareholding are disclosed in Corporate Governance Report and Form
MGT 9 which forms a part of this Report.
NOMINATION &REMUNERATION POLICY
The Company''s policy on Directors'' appointment and remuneration,
including criteria for determining qualifications, positive attributes,
independence of a Director and other matters provided under Section 178
(3) is annexed with this Report as "Annexure B ".
EXPLANATION AND COMMENTS ON AUDITOR''S AND SECRETARIAL AUDIT REPORT
There is no qualification, disclaimer, reservation or adverse remark
made by the Statutory Auditors in Auditors'' Report.
Further, there is no qualification, disclaimer, reservation or adverse
remark made by the Company Secretary in practice in Secretarial Audit
Report.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS
The full particulars of the loans granted are mentioned in the Note
Nos. 14 & 27 of Notes to Accounts pursuant to Section 186 read with
Companies (Meetings of Board and its Powers) Rules, 2014. The purpose
for granting the loan was to meet the gap in working capital.
The details of guarantee given and security provided by the Company to
Zensar Technologies Inc USA are stated in Note No 31 of Notes to
Account. The said security was provided for securing borrowing availed
of for acquisition.
Full particulars of investments made are stated in Note No. 12 and Note
No. 15 in the Notes to Accounts.
RELATED PARTY TRANSACTIONS
All related party transactions that were entered into during the
financial year were on an arm''s length basis and were in the ordinary
course of business.
All Related Party Transactions are placed before the Audit Committee.
Prior omnibus approval of the Audit Committee is obtained on a yearly
basis for the transactions which are repetitive in nature. The actual
transactions entered into pursuant to the omnibus approval so granted
are placed at quarterly meetings of the Audit Committee.
The Company has formulated a Policy on related party transactions. This
policy as approved by the Board is uploaded on the Company''s website on
the below link:
http://www.zensar.com/media/system/pdf/Investors/Policy%20
on%20Related%20Party%20Transactions.pdf
TRANSFER TO RESERVE
Your Directors propose to transfer a sum of Rs. 100.00 Crores to
General Reserve.
DIVIDEND
Your Company had reported satisfactory profit levels in the first three
quarters of the current financial year. In keeping with the Company''s
tradition of rewarding the Members, an interim dividend of Rs. 4.50/-
per share aggregating to Rs. 19.78 Crores was paid in the month of
February, 2015.
Further, the Directors are pleased to recommend a final Dividend of Rs.
6.50 per share. This together with interim dividend will result in
total outflow of Rs. 48.60 Crores plus Dividend Distribution Tax,
Surcharge and Cess thereon. The final dividend would be paid to those
Members, whose names appear in the Register of Members at the end of
business day on 6th July, 2015 and subject to approval of the Members
in the ensuing Annual General Meeting.
MATERIAL CHANGES AND COMMITMENTS, IF ANY AFFECTING THE FINANCIAL
POSITION OF THE COMPANY
There are no Material changes and commitments, affecting the financial
position of the Company which have occurred between the end of the
financial year on 31st March, 2015 to which the financial statements
relate and the date of this report.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNINGS AND OUTGO
The provisions relating to disclosure of details regarding energy
consumption, both total and per unit of production are not applicable
as the Company is engaged in the services sector and provides IT and IT
related services.
Particulars prescribed under Section 134 (3)(m) of The Companies Act,
2013, read with the Companies (Accounts) Rules, 2014 in respect of
technology absorption are set out in "Annexure C" to this report.
Particulars regarding Foreign Exchange earnings and outgo during the
year are given in Note No. 33 and Note No. 34 of Notes to Accounts
respectively. Particulars regarding R & D expenditure during the year
are given in Note No. 38 of Notes to Accounts.
RISK MANAGEMENT
A detailed report on Risk Management is included in Management
Discussion and Analysis which forms part of this Report. The report
clearly states development and implementation of a risk management
policy for the Company including identification therein of elements of
risks along with risk mitigation plan.
CORPORATE SOCIAL RESPONSIBILITY
Company takes pride in being a socially responsible business
corporation. Zensar Foundation, a trust operating under the Company,
leads the company''s social outreach programs and is committed to
improving the overall wellbeing of slum communities in the cities where
the Company is located. Its work is focussed on Community Development,
Employability Enhancement and Environment Sustenance. In keeping with
the philosophy that employees are the biggest change agents not only in
the technology marketplace but also in society, the management places
much emphasis on employee volunteering for CSR activities. Company is
proud to say that over 20% of its employees in India have volunteered
their time, in the year under review. Details about the CSR policy and
CSR initiatives undertaken during the year are annexed herewith as
"Annexure D" to this report.
A few of the highlights in the areas of Community development,
Employability enhancement and Environment sustenance are:
* Adoption of a third slum community: Having worked with two slum
communities (Chandan Nagar in Pune and Anjaiah Nagar in Hyderabad) over
the preceding years and developed a replicable model for the same,
Zensar Foundation has invested in a third community in Pune. This
community is in Yamuna Nagar which comprises approximately 500
households.
* National Digital Literacy Mission (NDLM): In the year 2014- 15,
Zensar Foundation has emerged as a leader amongst corporates
in working towards the National Digital Literacy Mission
wherein at least one person from every household in India, should be
digitally literate by the year 2020. Two NDLM centers have been started
in slum communities: one at Hyderabad which was the first in the
country to be started by a corporate under the NDLM banner, and the
other at Pune. The course has already been delivered to over 500
participants. Zensar volunteers undertook an ''Each One Teach One''
campaign during the National Digital Literacy Week, spending over 20
hours each in training one person per volunteer. There are several
other ''firsts'' to Company''s name, including conducting teacher training
for Digital Literacy, running batches for Anganwadi workers under the
central digital literacy program, etc. and we continue to have
ambitious plans in this area in the coming year as well.
* The Employability Skills Development program has expanded
significantly. Company launched a program whereby over 800 students
from Tier 2 and Tier 3 colleges in Maharashtra and Andhra Pradesh have
been imparted both soft skills'' and technical skills'' training, in line
with nationally standardized Qualification Packs. Apart from this,
several employability programs for vocations such as Tailoring, Retail,
Administrative support etc. were initiated for the underprivileged.
* Environment Sustenance: The 2-acre Biodiversity Park which was
developed by Zensar Foundation in partnership with the Pune Municipal
Corporation (PMC), in Pune in 2012 continues to be maintained actively.
The park attracts many visitors daily. New sections such as the extinct
plants section and butterfly host plant section have been developed in
order to keep the Park relevant and engaging. Other than the Park,
Zensar Foundation has participated actively in the Swachh Bharat
mission. Swachh Bharat campaigns have been conducted in Hyderabad and
Pune by volunteers who have spread public awareness and taught by
example through cleaning of public spaces.
These are just a few of the activities undertaken in the year 2014-15.
We are proud that it has been an year of immense reinforcement and
expansion with the overall scale of operations having more than
doubled; leading to an outreach to large beneficiaries per year.
Through working in missions such as NDLM and Swachh Bharat and programs
such as those of NSDC, Company is also aligning to the national agenda
for development. We look forward to further expansion in the coming
years in terms of outreach as well as impact.
The Company had an outlay to spend Rs. 394 Lacs during the year 2014-15
on CSR activities. For the year ended 31st March, 2015 Company has
spent Rs.156.94 Lacs. As this was the first year of CSR spent under the
Companies Act, 2013, the Company was in the process of evaluating
appropriate programmes and projects to scale up in the chosen areas of
CSR spends. This process has now been completed and the Company intends
to increase the CSR spend during the next year.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
During the year under review, Dr. Ganesh Natarajan, Vice Chairman and
Managing Director, Mr. S. Balasubramaniam, Chief Financial Officer and
Mr. Nilesh Limaye, Company Secretary were designated as Key Managerial
Personnel within the meaning of Section 203 of the Companies Act, 2013.
Ms. Madhabi Puri Buch was appointed an additional director with effect
from 30th September, 2014.
Further, the Board of Directors of the Company appointed Mr. A. T.
Vaswani, Mr. P. K. Choksey, Mr. P. K. Mohapatra, Mr. Venkatesh
Kasturirangan and Ms. Madhabi Puri Buch as Independent Directors of the
Company for a term of five years from 1st April 2015 on the
recommendation of Nomination and Remuneration Committee in their
meeting held on 19th January, 2015. This appointment of Independent
Directors was approved by the Members of the Company by way of Postal
Ballot conducted in March 2015.
Further, on the recommendation of Nomination and Remuneration
Committee, the Board of Directors had approved the re-appointment of
Dr. Ganesh Natarajan as Vice Chairman and Managing Director of the
Company with effect from 1st February, 2015 to 30th April, 2016. The
Members of the Company also approved the said re-appointment and terms
and conditions including remuneration of Dr. Ganesh Natarajan, Vice
Chairman and Managing Director by way of Postal Ballot conducted in
March, 2015.
In accordance with the provisions of Companies Act, 2013 and Memorandum
and Articles of Association of the Company, Mr. H. V. Goenka ,
Chairman of the Company retires by rotation at the ensuing Annual
General Meeting and, being eligible, offers himself for re-appointment.
Brief particulars of Mr. H. V. Goenka, his expertise in various
functional areas are given in the Notice convening the Annual General
Meeting. The Board of Directors recommends the re- appointment of Mr.
H. V. Goenka as mentioned above.
Mr. Niraj Bajaj, Independent Director resigned from the Board of
Directors of the Company with effect from 8th January, 2015. The Board
while accepting and noting resignation has recorded its sincere
appreciation for the valuable guidance, co-operation and patronage
received during his tenure as a Director.
SUBSIDIARY COMPANIES
Your Company along with subsidiaries provides software solutions and
services globally. A Report on the performance and financial position
of each of the subsidiaries pursuant to Rule 8 (1) and Form AOC 1 read
with Rule 5 of Companies (Accounts) Rules, 2014 is annexed as "Annexure
E" and forms a part of this Report.
Further, during the year under review, Zensar Technologies Inc, a
wholly owned subsidiary of the Company has acquired Professional Access
Limited, a company registered in USA. Zensar Advanced Technologies
Limited, a wholly owned subsidiary of the Company incorporated in Japan
has ceased to be a subsidiary company pursuant to its liquidation.
The Managing Director has not received any commission during the year
from the Company nor any of its subsidiary companies.
The Company has framed policy for determining material subsidiaries as
per requirement of Clause 49 of the Listing Agreement and has uploaded
on website and link for the same is as below:
http://www.zensar.com/media/system/pdf/Investors/Zensar%20
Policy%20for%20determining%20material%20subsidiaries.pdf
During the year under review, the Company has purchased business
of Professional Access Software Development Pvt. Ltd. and has
also established a branch office in Kenya. Company''s wholly owned
subsidiary namely Zensar Technologies (UK) Limited has established
branch offices in Switzerland and Austria during the year under review.
Stand-alone Financial Statements and Consolidated Financial Statements
of your Company along with its subsidiaries, prepared in accordance
with the relevant Accounting Standards issued by The Institute of
Chartered Accountants of India, forms a part of this Annual Report.
DEPOSITS
The Company has not accepted Deposits under Chapter V of the Companies
Act, 2013.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR
TRIBUNALS IMPACTING THE GOING CONCERN STATUS
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.
CHANGE IN THE NATURE OF BUSINESS
During the year under review, there was no change in the nature of the
business.
INTERNAL FINANCIAL CONTROL
Details in respect of adequacy of internal financial controls with
reference to the Financial Statements are stated in Management
Discussion and Analysis which forms part of this Report.
INFORMATION PURSUANT TO RULE 5 OF THE COMPANIES (APPOINTMENT AND
REMUNERATION OF MANAGERIAL REMUNERATION) RULES, 2014
1 The ratio of the remuneration of each Please refer"Annexure F- 1"
director to the median to this Report for details.
remuneration of the
employees of the Company for the
financial year.
2 The percentage increase in Please refer"Annexure F- 2"
remuneration of each director, to this Report or details.
Chief Financial Officer, Chief
Executive Officer, Company
Secretary or Manager, if any,
in the financial year.
3 The percentage increase in the median The percentageincrease
remuneration ofemployees in the in the median remuneration
financial year. in the financial year
on India Payroll was
11.78%.*
4 The number of permanent employees 6,350
on the rolls of Company.
5 The explanation on the relationship The profit before tax for
between average increase the 2015 on standalone
financial year ended 31st March, basis declined by 1.74%
in remuneration and Company performance. whereas the
average percentage increase
in the remuneration of
employees on India
Payroll excluding Managing
Director in the financial
year 2014-15 was10.75%. The
average increase in
remuneration and Company
performance are directly
related to each other,
however it is subject to
individual performance,
industry trends, economic
situation, future growth
prospects and possible
replacement of employee.
6 Comparison of the remuneration of The profit before tax for
the Key Managerial the financial year ended
Personnel against the performance 31st March,2015 on
of the Company. standalone basis declined
by 1.74% whereas the
average percentage increase
in the remuneration of key
managerial personnel in the
financial year 2014-15 was
14.23%. The average
increase in remuneration
and company performance are
directly related
to each other, however it
is subject to individual
performance, industry
trends, economic situation,
future growth prospects and
possible replacement of
employee.
7 Variations in the market capitalisation 31st 31st
of the Company, price March March,
earnings ratio as at the closing date ,2014 ,2015
of the current financial year and
previous financial year and percentage
increase over decrease in the market Market Rs. Rs.
quotations of the shares of the rate Capita 2847.55 1639.97
Company in comparison to the rate at lisation Crores Crores
which the Company came out with the
last public offer in case of listed PE Ratio 10.00 6.88
companies.
Market capitalization and
increased by 73.63% and
54.94% respectively as
compared to last year.
% increase in market
quotation over last Public
issue price: Public
issue of equity shares was
made in the year 1979 with
issue price of
Rs. 10.00 per share. The
average closing price on BSE
and NSE as on 31st March,
2015 was Rs. 642.40 The
market price per share has
increased by 6324% as on
31st March, 2015.
(Subsequent to last public
issue of the Shares, there
were multiple changes in the
capital structure of the
Company by way of rights
issue, preferential issue,
conversion of debentures
into equity shares, buy
back shares, bonus issue
etc, & impact of it has not
been considered)
8 Average percentile increase Average percentile increase
already made in the salaries already made in the salaries
of employees other than the of employees other than the
managerial personnel in the last managerial personnel in the
financial year and its comparison last financial year is 48th
with the percentile increase percentile. The percentile
and justification thereof and increase in the in the
managerial remuneration managerial remuneration
point out if there are any is 50th percentile.
exceptional circumstances for increase
in the managerial remuneration
9 Comparison of the each remuneration The profit before tax for the
of the Key Managerial Personnel against financial year ended 31st March,
the performance of the Company. 2015 on standalone basis
declined by 1.74%. The
increase in remuneration of
each of the Key Managerial
Personnel is as below:
1. Dr. Ganesh Natarajan,
Managing Director : 17.54%
2. Mr. S Balasubramaniam,
CFO : 15.15%
3. Mr. Nilesh Limaye, CS:10%
The increase in remuneration
and Company performance are
directly related to each
other however, subject to
individual performance,
industry trends, economic
situation, future growth
prospects and possible
replacement of employee.
10 The key parameters for any The variable component of
variable component of remuneration availed by the
remuneration availed by the directors Directors is based
on Profit After Tax reported
by the Company at the end of
each financial year and
recommendation of Nomination
and remuneration Committee.
11 The ratio of the remuneration Not applicable
of the highest paid director to
that of the employees who are not
directors but receiveremuneration
in excess of the highest paid
director during the year
12 Affirmation that the remuneration
is as per the remuneration The remuneration to
policy of the Company. employees of the Company
is as per the remuneration
policy of the Company.
* The percentage increase in the median remuneration of employees has
been calculated after excluding Managing Director''s remuneration.
VIGIL MECHANISM/WHISTLE BLOWER POLICY
The Audit Committee''s terms of reference inter-alia include vigil
mechanism which also incorporates a Whistle Blower Policy in terms of
Section 177 (10) of the Companies Act, 2013 and Clause 49 of the
Listing Agreement. The Company has adopted Whistle Blower Policy in the
meeting of Board of Directors held on 24th July, 2014. The Whistle
Blower mechanism provides for Directors and employees to report
concerns about unethical behaviour, actual or suspected fraud or
violation of Company''s Code of Governance and Ethics. The Whistle
Blower Policy is uploaded on the website of the Company on the link
below.
http://www.zensar.com/media/system/pdf/WHISTLE%20BLOW
ER%20POLICYpdf
INTER SE RELATIONSHIPS BETWEEN THE DIRECTORS
There are no relationships between the Directors inter se.
FAMILIARISATION PROGRAMMES FOR INDEPENDENT DIRECTORS
The Company has familiarisation programmes and the details of it have
been uploaded on the website of the Company on the link below:
http://www.zensar.com/media/system/pdf/Investors/FAMILIARI
SATION%20PROGRAMMES%20FOR%20INDEPENDENT%20DIRECTORS.pdf
FORMAL ANNUAL EVALUATION OF BOARD AND ITS COMMITTEES
Pursuant to provisions of Section134 of the Companies Act, 2013 and
clause 49 of the Listing Agreement, the Nomination and Remuneration
Committee laid down a criteria for evaluating Board effectiveness by
assessing performance of the Board as a whole, performance of
individual Director and Committees of the Board namely Audit Committee,
Nomination and Remuneration Committee, Stakeholders Relationship
Committee, Banking Committee and Corporate Social Responsibility
Committee. The Board approved the criteria laid down by Nomination and
Remuneration Committee for evaluating Board effectiveness and engaged
a third party agency to conduct Board effectiveness survey during the
year under review.
MANAGEMENT DISCUSSION AND ANALYSIS
Management Discussion and Analysis in terms of Clause 49 of the Listing
Agreement forms a part of this Report and is annexed to this Report as
"Annexure G".
AUDITORS
Statutory Auditor:
M/s Price Waterhouse, Chartered Accountants, Statutory Auditors of the
Company, retire at the ensuing Annual General Meeting and, being
eligible, offer themselves for re- appointment.
They have confirmed their eligibility under Section 141 of the
Companies Act, 2013 and the Rules framed thereunder for re-appointment
as Statutory Auditors of the Company. As required under Clause 49 of
the Listing Agreement, the Statutory Auditors have also confirmed that
they hold a valid certificate issued by the Peer Review Board of the
Institute of Chartered Accountants of India.
Secretarial Auditor:
Pursuant to the provisions of Section 204 of the Companies Act, 2013
and The Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014, the Board had appointed M/s SVD & Associates, a
firm of Company Secretaries in Practice to undertake the Secretarial
Audit of the Company. The Report of the Secretarial Audit in Form MR -
3 is annexed herewith as "Annexure H".
The Board has reappointed M/s SVD & Associates, a firm of Company
Secretaries in Practice to undertake the Secretarial Audit of the
Company for the financial year 2015-16.
Internal Auditors
The Board had appointed Ernst and Young LLP as Internal
Auditors for the financial year 2014-15 under Section 138 of the
Companies Act, 2013 and they have completed the internal audit as per
scope given by the Audit Committee for the financial year 2014-15.
The Board has reappointed Ernst & Young LLP as Internal Auditors for
the financial year 2015-16.
CORPORATE GOVERNANCE
Your Company continues to benchmark itself with the best- of - the-
breed practices as far as corporate governance standards are concerned.
Your Company has complied with regulations provided in clause 49 of the
Listing Agreement it has entered into with the stock exchanges. The
compliance report on the various requirements under the said clause
along with the practicing Company Secretary''s certification thereof is
provided in the corporate governance section of this report at
"Annexure I"
EMPLOYEES STOCK OPTION PLAN
Currently, the Company has two Employees Stock Option Schemes in force
namely, "2002 Employees Stock Option Scheme" (2002 ESOS) and "2006
Employees Stock Option Scheme" (2006 ESOS) for granting term based and
performance based Stock Options to employees and these schemes are
being implemented as specified by Securities Exchange Board of India in
this regard.
In the financial year 2014-15, 63,854 equity shares were allotted under
2002 Employees Stock Option Scheme" and 495,426 numbers of equity
shares were allotted under "2006 Employees Stock Option Scheme". The
Disclosures in compliance with Clause 12 of the Securities and Exchange
Board of India (Employees Stock Option Scheme and Employees Stock
Purchase Scheme) Guidelines, 1999 read with Clause 14 of the Securities
and Exchange Board of India (Share Based Employee Benefits)
Regulations, 2014 in this respect are stated in "Annexure J" to this
report.
Disclosures for the financial year ended 31st March, 2015 regarding
2002 ESOS and 2006 ESOS in terms of Companies (Share Capital and
Debentures) Rules, 2014 are as below:
Particulars 2002 ESOS 2006 ESOS
Options Granted Nil 2,45,000
Options vested 1,24,690 4,47,017
Options exercised 63,854 495,426
The total no of shares 63,854 495,426
arisingas a result of
exercise of options
Options lapsed/cancelled 6,174 198,304
during the year
Particulars 2002 ESOS 2006 ESOS
The exercise price Exercise Price for Exercise Price
each grant is for each grant is
differentand decided different and decided
by the Nomination by the Nomination and
and Remuneration Remuneration
Committee as per the Committee as per the
Securities and Securities and
Exchange Board of Exchange Board of
India India
(Employees Stock (Employees Stock
Option Scheme Option Scheme and
and Employees Stock Employees Stock
Purchase Scheme) Purchase Scheme)
Guidelines, 1999 Guidelines, 1999
prevailing at the prevailing atthe
timeof grant. time of grant.
Variation of terms of No variation in the No variation in the
options terms of options terms of options
during the year during the year
under review under review
Money realized by Rs. 51,38,878 Rs. 5,66,17,294
exercise of options
Total no of options 1,24,690 10,67,830
in force
Employee wise details of
options granted to:
Key Managerial Personnel No new options were No new options were
(KMP) granted to KMPs granted to KMPs
during the year during the year
under review under review
any other employee who Nil Prameela Kalive
receives a grant of -20,000,Prasad
options in any one year Deshpande -15,000,
of option amounting to Harish Lala -
five percent or more of 15,000, Srinivas
options granted during palsani-15,000,salary
that year Shulman - 15,000,
Santosh Panapaliya
-15,000, Syed Azfar
Hussain-15,000,
Chaitanya Rajebahadur
-15,000
identified employees Dr. Ganesh ---
who were granted option, Natarajan -5,00,000
during any one year, (All of theseoptions
equal to or exceeding have been
one percent of the exercised)
issued capital
(excluding out standing
warrants and conversions)
of the company at the
time of grant
PARTICULARS OF EMPLOYEES PURSUANT TO SECTION 197 READ WITH RULE 5 OF
THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL)
RULES, 2014
Particulars of employees pursuant to Section 197 read with Rule 5 of
The Companies (Appointment and Remuneration of Managerial Personnel)
Rules, 2014 are annexed with this report as "Annexure K".
DISCLOSURE UNDER SEXUAL HARASSMENT OF WOMEN AT THE WORKPLACE
(PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013
The Company has in place an Anti-Sexual Harassment Policy in line with
the requirements of the Sexual Harassment of Women at the Workplace
(Prevention, Prohibition and Redressal) Act, 2013. Internal Complaints
Committee has been set up to redress complaints. The following is the
summary of complaints received and disposed off during the year under
review:
Number of complaints received and disposed off One
MATERIAL TRANSACTIONS WITH RELATED PARTIES
The Company has not entered in to any transaction with related parties
during the year under review which requires reporting in Form AOC 2 in
terms of Companies Act, 2013 read with Companies (Accounts) Rules,
2014.
ACKNOWLEDGEMENTS
The Board places on record its appreciation of the contribution of
Associates at all levels, customers, business and technology partners,
vendors, investors, Government Authorities and all other stakeholders
towards the performance of the Company during the year under review.
For and on behalf of the Board
H.V. Goenka
Chairma
Place: Mumbai
Dated: 28th April, 2015
Mar 31, 2013
Dear Shareholders,
The Directors are pleased to present their 50th Annual Report together
with the Audited Accounts for the year ended 31st March 2013.
FINANCIAL HIGHLIGHTS:
The Financial Results for the year are as under:
Zensar Technologies Limited
(Rs. Crore)
Year ended Year ended
31st March 31st March
2013 2012
Income from operations 825.07 700.17
Miscellaneous Income 47.24 40.49
Total 872.31 740.66
Profit Before Taxation 170.99 137.22
Profit After Taxation 121.53 94.55
Proposed Dividend 19.61 17.36
Transfer to General Reserves 100.00 80.00
Zensar Technologies and Subsidiaries (Consolidated)
(Rs. Crore)
Year ended Year ended
31st March 31st March
2013 2012
Income from operations 2114.52 1782.48
Miscellaneous Income 17.71 41.80
Total 2132.23 1824.28
Profit Before Taxation & 260.60 236.37
Minority Interest
Profit After Taxation and
before Minority Interest 174.53 158.71
Minority Interest 0 0
Profit After Taxation 174.53 158.71
FINANCIAL RESULTS
During the financial year 2012-13, your Company recorded total income
of Rs. 872.31 Crore comprising Income from Software Development and
Allied Services of Rs. 825.07 Crore, and other income of Rs. 47.24
Crore. The Company recorded a net profit of Rs. 121.53 Crore reflecting
a growth of 29%.
On a consolidated basis, your Company has maintained steady growth with
Total income of Rs. 2132.23 Crore comprising Income from Software
Development and Allied Services of Rs. 2114.52 Crore and other income
of Rs. 17.71 Crore. The Consolidated Profit after Taxation was Rs.
174.53 Crore reflecting an increase of 10%.
BUSINESS UPDATE
The volatility in the economic and business environment was a factor
that the IT and Business Process Management industry has had to contend
with through the recent financial year. Despite the challenges and
uncertainty, the industry has managed to sustain its growth trajectory
during the year. For FY 2013 the industry is expected to meet the lower
end of its growth guidance and at least achieve a double digit growth.
Industry association NASSCOM expects the sector''s exports to grow
between 12% and 14% in 2013-14 to $ 87 Billion. This prediction is
slightly better than the year gone by, which is estimated at $ 75-77
Billion, but there still exists a huge challenge for companies in the
year ahead.
In spite of this challenging economic milieu, your Company continued to
maintain its good track record as one of the top global organisations
in 2012-2013. Having achieved a ranking amongst the top 15 companies in
the NASSCOM listing in April 2012, Zensar has moved to a more customer
proximate model through its vertical strategy, and has tied its success
to the customers'' success, through business outcome and service level
outcome based contracts. The process of verticalisation continued this
year with the creation of sharper vertical service propositions for
greater competitiveness in the market and this has now started
reflecting in the financials. It was also a year of consolidation in
terms of services, deeper entrenchment in emerging markets while
keeping the focus on innovation and non-linearity. The Company has made
significant movement to best in class Industry standards in operational
efficiency through process standardisation and improved governance. The
focus was on greater operational excellence through implementation of
lean methods in delivery with metrics based reporting and tracking,
keeping the focus and momentum on productivity, performance and
profitability.
The Company has gathered rich experience from working with leaders in
key verticals of Manufacturing, Retail, Banking Financial Services and
Insurance, and has proven mature service delivery capabilities in core
areas of Application Development, Support, Maintenance, Testing and
Modernisation; Business Process Management; Infrastructure Management;
Enterprise Solutions in Oracle and SAP; Business Intelligence and CRM.
The Company has also envisaged leadership in new age areas of Social
Media,
Mobility, Analytics and Cloud, now popularly known as of SMAC, and has
made significant progress in terms of thought leadership, service
proposition and client acquisition in this space by being at the
forefront of technological advancements in these areas and investing in
them for future growth. The Company has worked with leaders in chosen
Verticals including Fortune 100 and FTSE 100 companies in mature
markets of US, UK and Asia Pac, to leading companies even in emerging
markets of South Africa, Benelux and Middle East. Utilizing its
multi-shore methodology Zensar delivers best-in- class IT services
through its global delivery centres including Westborough, MA; Slough,
UK; Veenendal, The Netherlands; Shanghai, China and Pune, Hyderabad and
Bangalore in India.
Akibia, the Infrastructure Management firm that was acquired in
November 2010 has now been fully integrated into Zensar as the
Infrastructure Management Services (IMS) business unit. Several key
executives have been appointed to further enhance and grow the
Infrastructure Management Services business. This is a very important
milestone in the journey of Zensar Technologies and Akibia, with
Infrastructure Management today driving many of Zensar''s large deals
and powering the growth story of Zensar. As we enter fiscal year 2014,
Zensar is well positioned to deliver to its clients a deeper breadth of
services, including a new Total Infrastructure Outsourcing offering.
Zensar partners with clients to holistically align IT programs and
goals with enterprise strategy to deliver flexible solutions that drive
business process as well as improve the availability, reliability and
performance of Applications, Data centres, security and compliance, and
end user computing infrastructure.
The application development, maintenance and testing business of Zensar
which was always the largest revenue earner for the Company continued
its dominance in this year''s revenue mix. Traditional pricing models
have given way to managed services. The proportion of managed services
where Zensar managed service and business outcomes continues to move in
an upward trajectory and your Company has all the methodologies and
delivery frameworks to capitalise on this industry trend. The Company
is also now modernising applications for its customers who are keen
that their applications are increasingly Social, Mobile and Cloud
enabled. As customers move their custom applications to Cloud platforms
Zensar''s strength in the SMAC areas will drive revenues going forwards.
Strong partnerships with OEMs like SAP, SFDC, Oracle and Microsoft have
made your Company the one-stop-shop for delivering all technology needs
of an enterprise. In the Oracle space, Zensar has evolved from an
implementation partner of enterprise business solution to an Oracle
Platinum Partner providing industry specific customised solutions to
meet customer demands better, delivering to unique needs of the
business. The Oracle practice at Zensar has been recognized by Oracle
and the analyst community for robust capabilities and strong customer
references in the Oracle landscape.
With an SAP Gold Partner status, and acknowledged through the SAP Best
Partner Award for Highest Revenue Generation for SAP in the MENA
region; also awarded as Emerging Business Growing Partner by SAP India;
and a growing SAP alliance footprint in the UK, your Company has
positioned itself strongly for its SAP capability and leadership.
Zensar''s SAP practice also has preconfigured solutions for select
verticals like Dairy, Pharma, Retail and Life Sciences. Your Company
has also launched a centre of excellence for new areas like HANA with a
complete learning and POC environment and Zensar is one of the first
companies to be implementing HANA for one of the leading retailers
based out of the US. The Company is also working on areas like
Actionable Analytics, SAP Mobility and Manufacturing Integration
Intelligence (MII). Zensar has also recently been certified for a
partner centre of expertise (PCoE) helping provide enterprise support
to customers globally.
Your Company has shown significant successes globally. The US region
continued to be the growth driver for the organisation as has been
traditionally. Europe and UK continue to grow, but with the economic
downturn it has been relatively slower growth. Emerging territories of
South Africa, Middle East, and Asia Pacific however have all been
growing steadily, with South Africa clearly the star in growth terms.
Your Company is one of the top three IT players in South Africa and is
well recommended in the region by customers and industry analysts.
Zensar has been operating in South Africa since 2001 and since then,
has not only looked at Africa as a market but an integrated part of its
Global Delivery Platform. While bringing in the efficiencies of global
skills and the seamless global delivery model, Zensar has put strong
focus on developing local talent and empowerment of previously
disadvantaged people. Zensar created its ''Learnership Development
Program'' which aims at training, transferring global knowledge and
integrating local South African team with global teams via its near
shore centre in Johannesburg, and is thus able to provide its customers
a truly global delivery model. Today Zensar adds value and is proud to
count the top 5 players in Banking, Insurance and Retail in South
Africa as its customers. Zensar has also set up its operations in East
Africa with Headquarters in Nairobi, Kenya.
Your Company has performed significantly well and has received
accolades from various forums in the Industry. Zensar stands at # 13
in the NASSCOM ranking amongst top global leading IT companies;
Dataquest, a leading national publication has ranked Zensar amongst the
prominent organisations having moved up 20 places to # 39 this year.
Dataquest also runs a Top Employers ranking and your Company stood at #
9 in this list, in the very first attempt. The management team of the
organisation has also been recognized for good leadership in respective
areas. The Company''s Chief Information Officer received the CIO of the
Year Award from CMO Asia; the Chief Financial Officer received the CFO
of the Year Award from IPE Corporate Excellence Awards -Finance
Leadership. Your Company''s CEO also received the CEO of the Year Award
for Best HR Practices from World HRD Congress 2012. Your Company also
received the CNBC International Trade Award this year for the sixth
time, and most recently has also won the Porter Prize for the Best
Strategic Management practices in the Information, Media and Telecom
Industry.
DIVIDEND
Your Company had reported satisfactory profit levels in the first three
quarters of the current financial year. In keeping with the Company''s
tradition of rewarding the shareholders, an interim dividend of Rs.
3.50/- per share was paid in the month of February, 2013.
Further, in view of your Company''s profitable performance throughout
the year, your Directors are pleased to recommend, for your approval,
dividend at the rate of Rs. 4.50 per share on the Equity Shares of Rs.
10/- each for the financial year ended 31st March, 2013. The Dividend,
if approved by the shareholders in the ensuing Annual General Meeting
would result in an outflow of Rs. 19.61 Crore plus Dividend
Distribution Tax, Surcharge and Cess thereon. The Dividend would be
paid to those shareholder whose names appear in the Register of Members
on 09th July, 2013.
TRANSFER TO RESERVE
Your Directors propose to transfer a sum of Rs. 100 Crore to General
Reserve.
FIXED DEPOSITS
Your Company does not have any Fixed Deposit Scheme.
DIRECTORS
Mr. H. V. Goenka, Mr. A. T. Vaswani and Mr. P. K. Choksey retire by
rotation at the ensuing Annual General Meeting and, being eligible,
offer themselves for reappointment. Brief particulars of the Directors,
their expertise in various functional areas are given in the notice
convening the Annual General Meeting.
The Board of Directors recommends the re-appointment of Directors as
mentioned above.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNINGS AND OUTGO
The provisions relating to disclosure of details regarding energy
consumption, both total and per unit of production are not applicable
as the company is engaged in service sector and provides IT and IT
related services.
Particulars prescribed under sub- section (1)(e) of Section 217 of the
Companies Act, 1956, read with the Companies (Disclosure of particulars
in the Report of Board of Directors) Rules, 1988, in respect of
technology absorption are set out in ''Annexure A'' to this report.
Particulars regarding Foreign Exchange earnings and expenditure during
the year are given in Note 33 and Note 34 of Notes to Accounts
respectively. Particulars regarding R & D expenditure during the year
are given in Note 38 of Notes to Accounts.
DIRECTORS'' RESPONSIBILITY STATEMENT AS REQUIRED UNDER SECTION 217 (2AA)
OF THE COMPANIES ACT, 1956
The Directors confirm that -
i) in the preparation of the annual accounts, the applicable accounting
standards have been followed and there has been no material departure;
ii) appropriate accounting policies have been selected and applied
consistently and the Directors have 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 31st March 2013 and the profit of
the Company for the year ended 31st March 2013;
iii) proper and sufficient care has been taken 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;
iv) the annual accounts have been prepared on a going concern basis.
PARTICULARS OF EMPLOYEES
Information as per Section 217(2A) of the Companies Act, 1956, read
with Companies (Particulars of Employees) Rules 1975 are set out in
''Annexure B'' to this report.
SUBSIDIARY COMPANIES
As per Section 212 of the Companies Act, 1956 (Act), the company will
make available annual accounts of the subsidiary companies and the
related detailed information to shareholders on demand. The annual
accounts of the subsidiary companies will also be kept for inspection
by any shareholders at the registered office of the company and of the
subsidiary companies concerned. Also, the company shall furnish a hard
copy of details of accounts of subsidiaries to any shareholder on
demand. Company has also given information relating to each of the
subsidiary Company in the Annual Report in pursuance to Section 212 of
the Act.
Consolidated Financial Statements of your Company along with its
subsidiaries, prepared in accordance with the relevant Accounting
Standards issued by The Institute of Chartered Accountants of India,
forms part of this Annual Report.
CORPORATE GOVERNANCE
Your Company continues to benchmark itself with the best-of- the-breed
practices as far as the corporate governance standards are concerned.
Your Company has complied with regulations provided in clause 49 of the
listing agreement it has entered into with the stock exchanges. The
compliance report on the various requirements under the said clause
along with the practicing Company Secretary''s certification thereof is
provided in the corporate governance section of this report. In terms
of the Listing Agreement, the Management Discussion and Analysis Report
is annexed and forms part of the Annual Report.
EMPLOYEES STOCK OPTION PLAN
Currently, the Company has two Employees Stock Option Schemes in force
namely, "2002 Employees Stock Option Scheme" (2002 ESOP) and
"2006 Employees Stock Option Scheme" (2006 ESOP) for granting Term
based and performance based Stock Options to Employees.
In the financial year 2012-13, 68,722 equity shares were allotted under
2002 Employees Stock Option Scheme" and 1,05,904 numbers of equity
shares were allotted under "2006 Employees Stock Option Scheme".
The Disclosures in compliance with Clause 12 of the Securities and
Exchange Board of India (Employees Stock Option Scheme and Employees
Stock Purchase Scheme) Guidelines, 1999 in this respect are stated in
Annexure C to this report.
AUDITORS
M/s Price Waterhouse, Chartered Accountants, Auditors of the Company,
retire at the ensuing Annual General Meeting and, being eligible, offer
themselves for re-appointment. The Company has received a Certificate
from the Auditors that they are qualified under Section 224(1B) of the
Companies Act, 1956, to act as the Auditors of the Company, if re-
appointed along with confirmation that have valid certificate issued by
"Peer Review Board" of the Institute of Chartered Accountant of
India (ICAI).
ACKNOWLEDGEMENTS
The Board places on record their appreciation of the contribution of
Associates at all levels, customers, business and technology partners,
vendors, investors, Government Authorities and all other stakeholders
towards the performance of the Company during the year under review.
For and on behalf of the Board
H.V. Goenka
Chairman
Place: Mumbai
Dated: 22nd April 2013
Mar 31, 2012
The Directors are pleased to present their 49th Annual Report together
with the Audited Accounts for the year ended 31st March 2012.
FINANCIAL HIGHLIGHTS:
The Financial Results for the year are as under:
Zensar Technologies Limited
(Rs. Crore)
Year ended Year ended
31st March 31st March
2012 2011
Income form operations 700.17 562.57
Miscellaneous Income 40.49 29.25
Total 740.66 591.82
Profit Before Taxation 137.22 86.23
Profit After Taxation 94.55 88.48
Proposed Divided 17.36 15.16
Transfer to General Reserves 80.00 75.00
Zensar Technologies and Subsidiaries (Consolidated)
(Rs. Crore)
Year ended Year ended
31st March 31st March
2012 2011
Income form operations 1,782.48 1,138.29
Miscellaneous Income 41.80 29.21
Total 1,824.28 1,167.50
Profit Before Taxation 236.36 150.12
Profit After Taxation 158.71 131.73
Proposed Divided 17.36 15.16
Transfer to General Reserves 80.00 75.00
FINANCIAL RESULTS
During the financial year 2011-12, your Company recorded total income
of Rs. 740.66 Crore comprising Income from Software Development and
Allied Services of Rs. 700.17 Crore, and other income of Rs. 40.49
Crore. The Company recorded a net profit of Rs. 94.55 Crore reflecting
a growth of 7%.
On a consolidated basis, your Company has maintained steady growth with
Total income of Rs. 1824.28 Crore comprising Income from Software
Development and Allied Services of Rs. 1782.48 Crore and other income
of Rs. 41.80 Crore. The Consolidated Profit before Taxation was Rs.
236.36 Crore reflecting a growth of 57%. The Consolidated Profit after
Taxation was Rs. 158.71 Crore reflecting an increase of 20%.
BUSINESS UPDATE
Despite all the global uncertainties, there was no break in the
intensity in global technology spending. Clients continue to look at
global sourcing not only as cost saving options, but increasingly to
enhance competitiveness, increase time-to-market, drive business
productivity, impact outcomes and as centres for rapid innovation. As
a result, global technology spending in 2011 recorded steady growth for
the technology and related services sector, with worldwide spending
exceeding USD 1.7 trillion, a growth of 5.4 per cent over 2010.
In this environment, your company continued to retain its position as a
leading global organization in 2011, by increasing its competitiveness
through focus on verticalisation, service line expansion, innovation,
emerging markets and nonlinear growth strategies. Zensar was ranked
amongst India's top 20 software companies by NASSCOM and continued to
be cost-competitive provider of IT-BPO services. Cost efficiencies were
further maintained through various internal process and productivity
improvement initiatives including stable entry level salaries,
flattening the pyramid, tightening non-employee cost structures, fast
career growth, and a non-linear focus through platform and cloud
products.
The Company with its decade-long experience, mature service
capabilities, presence in key verticals, global footprint and high
caliber talent pool also ventured head-on into new and emerging
services and verticals like Cloud, Social Media and Mobility and
entered the emerging vertical of Healthcare while at the same time
maintaining our strong-hold over core services. The untapped
opportunities in the new services are expected to drive the next phase
of growth for the organization. Further developments were also made in
the core services ranging from Applications Development & Maintenance,
Enterprise Services including Package Implementations and Business
Intelligence, Transaction Processing, Testing and Infrastructure
Management. These Services have not only brought about end-to-end
process improvements and business benefits for clients ranging from the
Fortune 100 and FTSE 100 in US, UK and Asia to small start-ups in South
Africa and the Middle East but have also helped in creating deep
intellectual capital. Your Company continues to do well in Emerging
Markets with South Africa itself recording over 20%y-o- y growth.
Zensar today is a key global service integrator and has dedicated
centers of excellence built to design and implement solutions that
employ a broad portfolio of technologies. This capability lends
additional focus on creating next-generation solutions that enable new
thresholds of business performance by leveraging cloud delivery models
and technologies. Zensar is helping customers create optimized levels
of business performance, through assessment, advisory services as well
as application integration and migration services through platforms
such as force.com, Google Apps Engine (GAE) and Microsoft Azure. The
Cloud Services Charter in the organization will enable customers
redefine the way they deliver value to their customers. Zensar entered
into a strategic alliance with Google earlier to address the emerging
market demand for next generation collaboration solution for the
benefit of all its Indian and global customers. This partnership is
expected to not only enhance collaboration but will also empower
Zensar's associates in providing more choice and flexibility in where,
when and how they choose to do their work.
Zensar is also a recognized leader in Oracle deployments, having
executed a number of joint implementation projects with Oracle
worldwide. The Company provides a broad set of Oracle specializations
with a large number of certified Oracle specialists. Currently a
Platinum Partner, your Company is already moving towards enhancing
their position as a leading expert in Oracle technologies by becoming a
Diamond Partner.
A Gold Certified and Strategic Value Added Reseller (SVAR) Partner for
SAP in the US, Zensar helps customers adopt and extend technology to
drive business transformation and achieve their business goals. As a
part of this status, Zensar delivers "one-stop" domain expertise in
support of SAP solutions for the small business and midsize enterprise
(SME) segment in the U.S., including SAP Business One, SAP Business
All-in-One and SAP Business Objectsà business intelligence (Bl)
solutions. Your Company will continue to strengthen SAP capabilities to
meet its growth charter.
After the successful integration of Akibia last year, Zensar has
emerged as a niche infrastructure management player supporting the
entire spectrum of services. The company has augmented its global
footprint with customers in diverse fields as navigation systems,
software manufacturing, hospitality, video game publishing and
prescription generic drugs in addition to the core company verticals of
Banking, Insurance, Utilities, and Retail. Your Company has also been
selected as a preferred infrastructure management partner for one of
the leading manufacturing companies in the USA. The practice continues
to maintain a healthy pipeline across territories and verticals for
their independent services while exploring synergies with the new
services. In the near future, the Company will continue to make
investments in key areas of Security and Compliance to further
strengthen capabilities in Infrastructure Management.
While US continued to drive growth in the organization driven by higher
demand for IT services and support the growth in Europe was slower due
to the economic recession. However the emerging geographies of Asia
Pacific, Middle East and South Africa have seen the fastest growth rate
for the organization. Zensar also launched a Learner ship Development
Program (LDP), to create industry-ready IT talent for South Africa.
Under the Broad Based Black Economic Empowerment (BEE) initiative, the
Company identifies local students and offer training programmes and
skill development opportunities to assist those in need, to enable
wider economic development. The Company will continue to make further
inroads in this geography with another office in Africa (Kenya).
In this year Zensar has received accolades from all segments of the
industry. Retail Portal Solution for B2B collaboration, won the
prestigious 'Best Industry Solution Award' at the Computer Society of
India (CSI) earlier in the year. AutoZone's, a hosted on-premise
solution deployed by leveraging a Hosted ERP solution on the cloud for
the Manufacturing industry was also recognized by CSI in the product
manufacturing category.
Zensar has also received the prestigious Service Excellence Award at
the Cisco Supplier Day held in San Jose, CA, amongst other significant
technology services providers. Zensar was chosen for this award for
demonstrated excellence in professionalism and innovation and
foundational areas of productivity, delivery and support. The award
recognizes Zensar's exemplary performance in teamwork, communication,
and responsiveness to Cisco's business directives.
The Company was also the winner of the CNBC International Trade Awards
for the fifth consecutive year. The award aims at recognizing
innovation and excellence demonstrated by the market leaders and
institutions in the import and export industry with significant
contribution to international trade facilitation in India.
Your company won the National Award in IT Excellence and Excellence in
Global HR Strategy at the World HRD Congress 2012, which recognizes
exemplary HR practices in talent management. Zensar also won the Green
Organization Award at Green IT Initiative at the Manufacturers'
Association for Information Technology.
Zensar was conferred with the 'Good Corporate Citizen Award' for the
year 2011 by the Bombay Chamber of Commerce and Industry (BCCI). The
award was presented to Zensar for its outstanding service in
operational performance and its contribution towards corporate
citizenship, leading to the betterment of the society.
DIVIDEND
Company had reported satisfactory profit levels in the first three
quarters of the current financial year, therefore, in keeping with the
Company's tradition of rewarding the shareholders, an interim dividend
of Rs. 3/- per share was paid in the month of February, 2012.
Further, in view of your Company's profitable performance throughout
the year, your Directors are pleased to recommend, for your approval,
dividend at the rate of Rs. 4 per share on the Equity Shares of Rs.
10/- each for the financial year ended 31st March, 2012. The Dividend,
if approved by the shareholders in the ensuing Annual General Meeting
would result in an outflow of Rs. 17.36 Crore plus Dividend
Distribution Tax, Surcharge and Cess thereon. The Dividend would be
paid to those shareholders whose names appear in the Register of
Members on 16th July, 2012.
TRANSFERTO RESERVE
Your Directors propose to transfer sum of Rs. 80 Crore to General
Reserve.
FIXED DEPOSITS
Your Company does not have any Fixed Deposit Scheme. DIRECTORS
Mr. John Levack, Mr. P. K. Mohapatra and Mr. Venkatesh Kasturirangan
retire by rotation at the ensuing Annual General Meeting and, being
eligible, offer themselves for reappointment. Brief particulars of the
Directors, their expertise in various functional areas are given in the
notice convening the Annual General Meeting.
The Board of Directors recommends the re-appointment of Directors as
above.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNINGSAND OUTGO
The provisions relating to disclosure of details regarding energy
consumption, both total and per unit of production are not applicable
as the company is engaged in service sector and provides IT and IT
related services.
Particulars prescribed under sub- section (1)(e) of Section 217 of the
Companies Act, 1956, read with the Companies (Disclosure of particulars
in the Report of Board of Directors) Rules, 1988, in respect of
technology absorption are set out in 'Annexure A' to this report.
Particulars regarding Foreign Exchange earnings and expenditure during
the year are given in Note 31 and Note 32 of Notes to Accounts
respectively. Particulars regarding R & D expenditure during the year
are given in Note 36 of Notes to Accounts.
DIRECTORS' RESPONSIBILITY STATEMENT AS REQUIRED UNDER SECTION 217 (2AA)
OF THE COMPANIES ACT, 1956
The Directors confirm that -
i) in the preparation of the annual accounts, the applicable accounting
standards have been followed and there has been no material departure;
ii) appropriate accounting policies have been selected and applied
consistently and the Directors have 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 31st March 2012 and the profit of
the Company for the year ended31stMarch2012;
in) proper and sufficient care has been taken 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;
iv) the annual accounts have been prepared on a going concern basis.
PARTICULARS OF EMPLOYEES
Information as per Section 217(2A) of the Companies Act, 1956, read
with Companies (Particulars of Employees) Rules 1975 are set out in
'Annexure B' to this report.
SUBSIDIARY COMPANIES
As per Section 212 of the Companies Act, 1956 (Act), the company will
make available annual accounts of the subsidiary companies and the
related detailed information to shareholders on demand. The annual
accounts of the subsidiary companies will also be kept for inspection
by any shareholders at the registered office of the company and of the
subsidiary companies concerned. Also, the company shall furnish a hard
copy of details of accounts of subsidiaries to any shareholder on
demand. Company has also given information relating to each of the
subsidiary Company in the Annual Report in pursuance to Section 212 of
the Act.
Consolidated Financial Statements of your Company along with its
subsidiaries, prepared in accordance with the relevant Accounting
Standards issued by The Institute of Chartered Accountants of
India,forms part of this Annual Report.
CORPORATE GOVERNANCE
Your Company continues to benchmark itself with the best-of-the- breed
practices as far as the corporate governance standards are concerned.
Your Company has complied with regulations provided in clause 49 of the
listing agreement it has entered into with the stock exchanges. The
compliance report on the various requirements under the said clause
along with the practicing Company Secretary's certification thereof is
provided in the corporate governance section of this report. In terms
of the Listing Agreement, the Management Discussion and Analysis Report
is annexed and forms part of the Annual Report.
EMPLOYEES STOCK OPTION PLAN
Currently, the Company has two Employees Stock Option Schemes in force
namely, "2002 Employees Stock Option Scheme" (2002 ESOP) and "2006
Employees Stock Option Scheme" (2006 ESOP) for granting Term based
and performance based Stock Options to Employees.
In the financial year 2011-12,25428 numbers of equity shares were
allotted under 2002 Employees Stock Option Scheme" and 80560 numbers of
equity shares were allotted under "2006 Employees Stock Option Scheme".
The Disclosures in compliance with Clause 12 of the Securities and
Exchange Board of India (Employees Stock Option Scheme and Employees
Stock Purchase Scheme) Guidelines, 1999 in this respect are stated in
Annexure C to this report.
AUDITORS
M/s Price Waterhouse, Chartered Accountants, Auditors of the Company,
retire at the ensuing Annual General Meeting and, being eligible, offer
themselves for re-appointment. The Company has received a Certificate
from the Auditors that they are qualified under Section 224(1B) of the
Companies Act, 1956, to act as the Auditors of the Company, if
re-appointed along with confirmation that they have valid certificate
issued by "Peer Review Board" of the Institute of Chartered Accountant
of India (ICAI).
ACKNOWLEDGEMENTS
The Board places on record their appreciation of the contribution of
Associates at all levels, customers, business and technology partners,
vendors, investors. Government Authorities and all other stakeholders
towards the performance of the Company during the year under review.
For and on behalf of the Board
H.V. Goenka
Chairman
Place: Mumbai
Dated: 25th April 2012
Mar 31, 2011
The Directors are pleased to present their 48th Annual Report together
with the Audited Accounts for the year ended 31st March 2011.
FINANCIAL HIGHLIGHTS:
The Financial Results for the year are as under:
Zensar Technologies Limited
(Rs. Crore)
Year ended Year ended
31st March 2011 31st March 2010
Income from operations 567.00 497.08
Miscellaneous Income 24.82 8.15
Total 591.82 505.24
Profit Before Taxation 86.23 86.59
Profit After Taxation 88.48 84.15
Proposed Dividend 15.16 11.87
Transfer to General Reserves 75.00 75.00
Zensar Technologies and Subsidiaries (Consolidated)
(Rs. Crore)
Year ended Year ended
31st March 2011 31st March 2010
Income from operations 1138.29 952.76
Miscellaneous Income 28.37 8.28
Total 1166.66 961.03
Profit Before Taxation & Minority Interest 150.12 149.15
Profit After Taxation and before
Minority Interest 131.73 127.26
Minority Interest 0 (0.30)
Profit After Taxation 131.73 127.56
FINANCIAL RESULTS
During the financial year 2010-11, your Company recorded total income
of Rs. 591.82 Crore comprising Income from Software Development and
Allied Services of Rs. 567.00 Crore, and other income of Rs. 24.82
Crore. The Company recorded a net profit of Rs. 88.48 Crore reflecting
a growth of 5%.
On a consolidated basis, your Company has maintained steady growth with
Total income of Rs. 1166.66 Crore comprising Income from Software
Development and Allied Services of Rs. 1138.29 Crore and other income
of Rs. 28.22 Crore. The Consolidated Profit after Taxation was Rs.
131.73 Crore reflecting an increase of 3%.
BUSINESS UPDATE
The global economic downturn of the past year had an effect on the GDP
growth and employment in developed markets. However, based on pent-up
demand from the corporate sector and return of discretionary spending,
there was a surge in IT spending across markets, both traditional and
emerging.
In this environment, your company continued to retain its position as a
leading global organization in 2010, by increasing its competitiveness
through focus on innovation, emerging markets and non linear growth
strategies. Zensar was ranked amongst Indias top 20 software companies
by NASSCOM, which was possible due to the development of a set of
factors unique to Zensar that has multiplied the Companys value
proposition manifold. While the cost advantage that Zensar offered to
its customers remained as a constant, your company continued to focus
on customers business through unmatched service delivery across
multiple geographies. With customers also pushing for more
collaborative contracts where there is business metric performance
measurement and greater risk- reward sharing, Zensar continued to be
driven by the need to bring in strategic benefit to clients.
In the year - your company has continued to focus on cost control and
efficiency measures as customers continued to evaluate how investments
in IT impact can further business goals - ROI led transformation - was
a hallmark of most large contracts in the year. Services such as
virtualisation, consolidation, and managed services that focus on ROI
in the short term continued to drive opportunities for Zensar. Your
company continued to focus on alternative IT models - Cloud, on-demand
services and SaaS - in order to reduce hardware infrastructure costs
and provide scalability on demand for customers across segments.
In keeping with the trend in the global IT-BPO industry your Company
focused on multiple parameters such as Markets, Service Offerings and
Innovation. Growth in the
next two years is expected to be driven by new markets in SMBs, public
sector and government-influenced entities in India and SAARC region
which will become a priority customer base Service Offerings that are
high-end, deeply embedded in customer value chains and delivery is
expected to become location-agnostic leading to new opportunities such
as design services in manufacturing, Remote Infrastructure Management,
etc. Driven by the focus that your company has on expertise and
intellectual property, offerings are also expected to shift from
piecemeal, technology-centric applications to a range of integrated
solutions and higher-end services, spanning new service lines.
Your company is well placed to tap potential in the SMB sector and new
verticals (Healthcare, Utilities, Transportation), with their
experience in emerging markets, mature service capabilities, global
footprint and talent pool. Suitably exploiting these emerging
opportunities both in the global and domestic markets can help Zensar
double its revenue in 2 years. The emerging markets of India, South
Africa, Middle East, and Australia continue to be drivers of new
business for the Company and amongst the new wins in these territories
are, one of the worlds largest insurance groups with over 60,000
employees and serving in more than 170 countries, one of the leading
retailers in the Middle East with over 180 stores across the nation and
the biggest retailer in South Africa and the brand of choice of the
highest percentage of South Africans consumers.
Your company has also seen expansion of Zensars Global Delivery
Platform to cater to the growing demand of innovative technology
business solutions. Your company also launched its first Intellectual
Property Showcase Centre in Delhi to bring the complete range of
transformation services and easily deployable solutions to Indian
customers. Additionally, a third center in Hyderabad was also launched
to help support and develop solutions for both Global and Local
customers.
The companys expansion into cloud computing, analytics and new
geographic markets has provided for significant opportunity for revenue
growth. The development and execution of its end to end service
capabilities ranging from Applications Development and Maintenance,
Enterprise Services including package implementation, support and
business intelligence, Transaction Processing and Strategic Services
like Consulting, Testing and Infrastructure Management and end-to-end
process optimisation for clients ranging from the Fortune 100 and FTSE
100 in US, UK and Asia to small start-ups in South Africa and the
Middle East, has also helped in creating deep intellectual capital
around vertical market adding to its specialization of creating
enterprise applications for their customers.
Zensar acquired Akibia to build dual shore end-to-end capabilities for
Zensar in Infrastructure Management and
Information Security solutions for American and European clients. This
acquisition of Akibia furthers your companys mission to strengthen its
position in the critical and fast growing Infrastructure Management and
Information Security space by combining Zensars Remote Infrastructure
Management offshore services for global clients with Akibias United
States and European Data Center practice. This acquisition will
significantly expand Zensars addressable market and growth potential,
broadening solutions Zensar provides to the rapidly growing
Infrastructure markets. The combination will also expand Zensars
offering of mission-critical solutions to the enterprise customer.
Adding the capabilities of Akibia will further enhance Zensars
customer base for Datacenter services while there is an equal
opportunity to scale the Remote Infrastructure Management Services
business using Akibias large datacenter customer base. This enhanced
capability will allow bidding for projects that involve multiple
service lines. The acquisition of Akibia will also diversify Zensars
Information Security business by adding Akibias system integration and
consulting expertise in the fast growing network security, compliance
and risk management markets.
The Company has launch an improved version of SmartShopà a complete
retail management software solution for emerging markets and has made
it available as a packaged product, ready to install and use for the
entire retailer spectrum- small store to medium/ large chain of
outlets. Zensar has also introduced AutoZenicsà a web-enabled system
that will enable SME clusters to take advantage of cloud computing
capabilities. Other innovative solutions include the Supply Change
Transaction Management (SCTM)-Xchange an online portal built for smooth
document exchange and understanding between the enterprise and
different suppliers, a multichannel insurance solution and Tzen a
testing solution hosted on the cloud are the other innovations that the
Company has built will be used to compete in a hyper-competitive global
economy - based on analytics, e-business, automation and cloud -all of
which are next generation business solutions for global enterprises.
The Companys focus on long-term commitment of developing business
relationships and uncovering radical shifts in business is the
underlying philosophy behind these innovations.
In this year Zensar received accolades from all segments of the
industry as an organization. Zensar - Akibia was awarded the
Platinum-Level Partnership for Extreme Networks 2010 for the second
year in a row. Your Company was awarded the Asia Responsible
Entrepreneurship Awards (AREA) Investment in People Award 2010 by
Enterprise Asia, a non-governmental organization in pursuit of
entrepreneurship development across the region. The Company has also
been awarded the Golden Peacock Award for Corporate Social
Responsibility in 2011.
ACQUISITION
During the Financial Year 2010-11, Zensar Technologies Inc., USA, a
wholly owned subsidiary of the Company acquired PSI Holdings Group Inc.
a limited liability company incorporated in Massachusetts, US and its
wholly owned subsidiaries namely (i) Akibia Inc, (ii) Aquila Technology
Corp; and (iii) Akibia B.V (hereinafter collectively referred to as
"AKIBIA Group").
AKIBIA Group is a conglomerate in the IT services space providing Data
Center Management and Network Security Solutions. This acquisition will
significantly expand Zensars accessible market and growth potential,
broadening solutions Zensar provides to the rapidly growing
Infrastructure markets. The combination will also expand Zensars
offering of mission-critical solutions to the enterprise customer.
BONUS SHARES
During the Financial Year 2010-11, Company had issued 2,15,89,818 fully
paid up equity shares as bonus shares in the ratio of 1:1 i.e. one new
fully paid up equity share of Rs. 10/- each for every one fully paid
up equity share of Rs. 10/- each by way of capitalization of reserves.
To accommodate the capitalization of reserves as mentioned above, the
Authorised Capital of the Company was increased from Rs.30,00,00,000
(Rupees Thirty Crores) divided into 2,75,00,000 (Two Crores Seventy
Five Lac) Equity Shares of Rs.10/- (Rupees Ten) each and 2,50,000
Preference Shares of Rs.100 each to Rs. 50,00,00,000 (Rupees Fifty
Crores) divided into 4,75,00,000 (Four Crore Seventy Five Lac) Equity
Shares of Rs.10/- (Rupees Ten) and 2,50,000 Preference Shares of Rs.
100 (Rupees Hundred) each.
DIVIDEND
In view of your Companys profitable performance, your Directors are
pleased to recommend, for your approval, dividend on the enhanced
capital at the rate of Rs. 3.50 per share on the Equity Shares of Rs.
10/- each for the financial year ended 31st March, 2011. The Dividend,
if approved by the shareholders in the ensuing Annual General Meeting
would result in an outflow of Rs. 17.61 Crore including Dividend
Distribution Tax, Surcharge and Cess thereon. The Dividend would be
paid to those shareholders whose names appear in the Register of
Members on 13th July, 2011.
TRANSFER TO RESERVE
Your Directors propose to transfer a sum of Rs. 75.00 Crore to the
General Reserve.
FIXED DEPOSITS
Currently, your Company does not have any Fixed Deposit Scheme.
DIRECTORS
Mr. A. T. Vaswani and Mr. Arvind Agrawal retire by rotation at the
ensuing Annual General Meeting and, being eligible, offer themselves
for reappointment. Brief particulars of the Directors, their expertise
in various functional areas are given in the notice convening the
Annual General Meeting.
Mr. Niraj Bajaj was appointed Additional Director of the Company during
the year. Mr. Bajajs term expires on the date of the Annual General
Meeting. The Company has received a Notice pursuant to the provisions
of Section 257 of the Companies Act, 1956 for appointment of Mr. Niraj
Bajaj as Director of the Company liable to retire by rotation.
The Board of Directors recommends the appointment/re- appointment of
Directors as mentioned above.
COSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNINGS AND OUTGO
The provisions relating to disclosure of details regarding energy
consumption, both total and per unit of production are not applicable
as the company is engaged in the services sector and provides IT and IT
related services.
Particulars prescribed under sub- section (1)(e) of Section 217 of the
Companies Act, 1956, read with the Companies (Disclosure of particulars
in the Report of Board of Directors) Rules, 1988, in respect of
technology absorption are set out in `Annexure A to this report.
Particulars regarding Foreign Exchange earnings and expenditure during
the year are given in Note 16 and Note 17 of Notes to Accounts
respectively. Particulars regarding R & D expenditure during the year
are given in Note 25 of Notes to Accounts.
DIRECTORS RESPONSIBILITY STATEMENT AS REQUIRED UNDER SECTION 217
(2AA) OF THE COMPANIES ACT, 1956
The Directors confirm that -
i) in the preparation of the annual accounts, the
applicable accounting standards have been followed and there has been
no material departure;
ii) appropriate accounting policies have been
selected and applied consistently and the Directors have 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 31st March 2011
and the profit of the Company for the year ended 31st March 2011;
iii) proper and sufficient care has been taken 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;
iv) the annual accounts have been prepared on a going concern basis.
PARTICULARS OF EMPLOYEES
Information as per Section 217(2A) of the Companies Act, 1956, read
with Companies (Particulars of Employees) Rules 1975 are set out in
Annexure B to this report.
SUBSIDIARY COMPANIES
As per Section 212 of the Companies Act, 1956 (Act), the company will
make available annual accounts of the subsidiary companies and the
related detailed information to shareholders on demand. The annual
accounts of the subsidiary companies will also be kept for inspection
by any shareholder at the registered office of the company and of the
subsidiary companies concerned. Also, the company shall furnish a hard
copy of details of accounts of subsidiaries to any shareholder on
demand. The company has also given information relating to each of the
subsidiary Companies in the Annual Report in pursuance to Section 212
of the Act.
Consolidated Financial Statements of your Company along with its
subsidiaries, prepared in accordance with the relevant Accounting
Standards issued by The Institute of Chartered Accountants of India,
forms a part of this Annual Report.
CORPORATE GOVERNANCE
Your Company continues to benchmark itself with the best-of-the-breed
practices as far as corporate governance standards are concerned. Your
Company has complied with regulations provided in clause 49 of the
listing agreement it has entered into with the stock exchanges. The
compliance report on various requirements under the said clause along
with the practicing Company Secretarys certification thereof is
provided in the corporate governance section of this report. In terms
of the Listing Agreement, the Management Discussion and Analysis Report
is annexed and forms a part of the Annual Report.
EMPLOYEES STOCK OPTION PLAN
Currently, the Company has two Employees Stock Option Schemes in force
namely, "2002 Employees Stock Option Scheme" (2002 ESOP) and "2006
Employees Stock Option Scheme" (2006 ESOP) for granting Term based and
performance based Stock Options to Employees. In the financial year
2010-11 Board of Directors approved
the adjustment in the exercise price and numbers of the outstanding
stock options under 2002 ESOP and 2006 ESOP with a view to retain ESOP
value consequent to issue of Bonus shares. Accordingly, numbers of
outstanding stock options in both the schemes were increased by 100%
and exercise price for each grant was reduced by 50%. Approvals from
Stock exchanges were obtained in this connection.
In the financial year 2010-11, 1,05,105 numbers of equity shares were
allotted under "2002 Employees Stock Option Scheme" and 32,996 numbers
of equity shares were allotted under "2006 Employees Stock Option
Scheme". The Disclosures in compliance with Clause 12 of the Securities
and Exchange Board of India (Employees Stock Option Scheme and
Employees Stock Purchase Scheme) Guidelines, 1999 in this respect are
stated in Annexure C to this report.
AUDITORS
M/s Price Waterhouse, Chartered Accountants, Auditors of the Company,
retire at the ensuing Annual General Meeting and, being eligible, offer
themselves for re- appointment. The Company has received a Certificate
from the Auditors that they are qualified under Section
224(1B) of the Companies Act, 1956, to act as the Auditors of the
Company, along with the confirmation that they have a valid certificate
issued by the "Peer Review Board" of the Institute of Chartered
Accountant of India (ICAI).
ACKNOWLEDGEMENTS
The Board places on record their appreciation of the contribution of
Associates at all levels, customers, business and technology partners,
vendors, investors, Government Authorities and all other stakeholders
towards the performance of the Company during the year under review.
For and on behalf of the Board
H.V. Goenka
Chairman
Place: Mumbai
Dated: 21st April 2011
Mar 31, 2010
The Directors are pleased to present their 47" Annual Report together
with the Audited Accounts for the year ended 31s March 2010.
FINANCIAL HIGHLIGHTS
The Financial Results for the year are as under:
Zensar Technologies Limited (Rs. Crore)
Year ended Year ended
31st March 2009 31st March 2009
Income from operations 497.08 421.87
Miscellaneous Income 8.15 8.75
Total 505.24 430.62
Profit Before Taxation 86.59 66.68
Profit After Taxation 84.15 60.47
Proposed Dividend 11.87 10.78
Transfer to General Reserves 75.00 75.00
Zensar Technologies and Subsidiaries (Consolidated) (Rs. Crore)
Year ended Year ended
31st March 2009 31st March 2009
Income from operations 952.76 908.08
Miscellaneous Income 8.28 14.08
Total 961.03 922. 16
Profit Before Taxation & Minority
Interest 149.15 111.82
Profit After Taxation and before
Minority Interest 127.26 86.26
Minority Interest (0.30) (0.30)
Profit After Taxation 127.56 86.56
FINANCIAL RESULTS
During the financial year 2009-10, your Company recorded total income
of Rs. 505.24 Crore comprising Income from Software Development and
Allied Services of Rs. 497.08 Crore, and other income of Rs. 8.15
Crore. The Company recorded a net profit of Rs. 84.15 Crore reflecting
a growth of 39.15%.
On a consolidated basis, your Company has maintained steady growth with
total income of Rs. 961.03 Crore comprising Income from Software
Development and Allied Services of Rs. 952.76 Crore and other income of
Rs. 8.28 Crore. The Consolidated Profit before Taxation and minority
interest was Rs. 149.15 Crore reflecting a growth of 33.38%. The
Consolidated Profit after Taxation was Rs. 127.56 Crore reflecting an
increase of 47.36%.
BUSINESS UPDATE
We started the year 2009 amidst speculation and uncertainty
precipitated by the economic downturn which affected almost every
economy in the world. However, the developments during the year,
demonstrated the resilience of Zensar and the Company delivered
excellent growth in profits and revenue. While there was certainty that
these tumultuous times would pass, the Company viewed this crisis as an
opportunity, not only exhibiting resilience but also sustaining its
growth.
The advent of 2010 has signaled the revival of outsourcing within core
markets, along with the emerging markets increasingly adopting
outsourcing for enhanced competitiveness. The Company has leveraged
this and had built upon its relationships with existing customers and
has acquired many new customers through the year. The investments that
the Company has made in the business have helped us gain a stronger
position in the market than in 2009.
The year witnessed the emergence of and thrust on its core themes for
the next decade - Diversification, Specialization, Transformation,
Innovation and inclusive growth. As a Company we targeted new growth
engines beyond our core offerings, invested in developing innovative
solutions for our end- customers, strengthened internal capabilities by
acquiring and
training talent and investing in people initiatives. This coupled with
our compelling and dynamic value proposition and competitiveness
ensured that Zensar remained committed in creating shareholder value.
The domestic market is at an inflection point with the rise of India
Inc., growing adoption of IT to achieve greater efficiencies and the
Indian government fuelling the demand with various e- Governance
initiatives. The year witnessed longer term comprehensive outsourcing
engagements with the overall domestic market posting strong growth.
Recognizing the opportunities, the Company has reaffirmed its
commitment to the domestic market with focus on key segments of
government, healthcare, manufacturing and logistics in India by
launching new offerings and partnerships to service the sectors. The
Company has also been recently empanelled as IT consultant for the
nationwide Restructured Accelerated Power Development and Reforms
Programme (R-APDRP) launched by the Ministry of Power, Govt, of India
in the XI Five year Plan to prevent frequent outages, and transmission
and distribution losses due to theft and unmetered supply.
Emerging markets of India, South Africa and continental Europe continue
to be drivers of new business for the Company and with a number of
customers ready now to move offshore which is a significant trend for
the Company. Amongst the new wins in these territories are, a large
total financial services provider; a leading integrator of competitive,
innovative and practical business solutions based on information and
communication; an independent private London bank, providing banking
and investment services; provider of talent management, e- recruitment
and payroll software solutions to corporate companies across the globe.
The Company has also seen some new product launches which include the
launch the Procurement Platform for our BPO Services, which helps
customers realize the potential of technology and outsourcing without
having to incur capital expenditure and pay only for the number of
transactions managed. The launch of ZenAutoPro, Zensars tool for
automated code generation to advance the script development process and
to save the overall automation time as compared to traditional Test
Automation is yet another outcome of our focus on constant innovation.
In addition to growth in the areas of Package Implementation, Testing
and Infrastructure Management, Zensars new Impact Sourcing service for
process and technology transformation for recessionary markets with
assured results has received an excellent response from the market.
The Company has seen immense traction in the Enterprise Applications
business and has been adding new customers to its Oracle business over
the year. The Company is also now a Platinum Partner (Highest level of
partnership) in the Oracle Partner Network Specialized program. The
status is a recognition of our expertise across the breadth of Oracle
products. Your Company is also a Gold Certified Partner for Microsoft,
which represent the highest level of competence and expertise with
Microsoft technologies.
QAI India Limited, a Software Engineering Institute (SEI) - an
authorized lead appraiser has audited the Companys processes and has
renewed your Companys CMMI certification (Maturity Level 5 of CMMI for
Development v 1.2).
Additionally, your Company has also ensured that all operational levers
work towards enhancing productivity to continue the growth journey that
we have seen in the past.
BUYBACK
During the year the Company completed Buyback of 24,24,000 Equity
Shares through Tender Offer Route at a price of Rs. 165/- per Equity
Share. The Equity Shares so bought back constituted 10.11 % of the
Equity Share Capital of the Company. The total amount utilised for
Buyback was Rs. 39.99 Crore. A sum of Rs. 242.40 Lacs was transferred
to Capital Redemption Reserve Account.
AMALGAMATION
A Scheme of Amalgamation of Zensar OBT Technologies Limited and Zensar
Transformation Services Limited with the Company was sanctioned by the
Honble High Court of Judicature at Bombay on 09th April, 2010. The
Order passed by Honble High Court of Judicature at Bombay approving
the said amalgamation
was filed with Registrar of Companies, Puneon 17th April, 2010.
Accordingly this scheme has been given effect to in these Accounts and
the assets and liabilities of the Subsidiary Companies, at the
respective book value, have been transferred to and vested in the
Company with effect from 01" April, 2009.
DIVIDEND
In view of your Companys profitable performance, your Directors are
pleased to recommend, foryourapproval, dividend at the rate of Rs. 5.50
per share on the Equity Shares of Rs. 10/- each for the financial
yearended 3T1 March, 2010. The Dividend, if approved by the
shareholders in the ensuing Annual General Meeting would result in an
outflow of Rs. 13.84 Crore including Dividend Distribution Tax,
Surcharge and Cess thereon. The Dividend would be paid to those
shareholders whose names appear in the Register of Members on 05th
July, 2010.
TRANSFER TO RESERVE
Your Directors propose to transfer a sum of Rs. 75.00 Crore to General
Reserve.
FIXED DEPOSITS
Currently, your Company does not have any Fixed Deposit Scheme.
DIRECTORS
Mr. H. V. Goenka and Mr. P. K. Choksey retire by rotation at the
ensuing Annual General Meeting and, being eligible, offer themselves
for reappointment. Brief particulars of the Directors, their expertise
in various functional areas are given in the notice conveningthe Annual
General Meeting
CONSERVATION OF ENERGY, TECHNOLOGY
ABSORPTION AND FOREIGN EXCHANGE
EARNINGS ANDOUTGO
The provisions relating to disclosure of details regarding energy
consumption, both total and per unit of production are not applicable
as the company is engaged in service sector and provides IT and IT
related services.
Particulars prescribed under sub- section (l)(e) of Section 217 of the
Companies Act, 1956, read with the Companies (Disclosure of particulars
in the Report of Board of Directors) Rules, 1988, in respect of
technology absorption are set out in Annexure A to this report.
Particulars regarding Foreign Exchange earnings and expenditure during
the year are given in Note 14 and Note 15 of Notes to Accounts
respectively. Particulars regarding R&D expenditure during the year are
given in Note 22 of Notes to Accounts.
DIRECTORS RESPONSIBILITY STATEMENT AS REQUIRED UNDER SECTION 217 (2AA)
OFTHECOMPANIESACT, 1956
The Directors confirm that -
i) in the preparation of the annual accounts, the applicable accounting
standards have been followed and there has been no material departure;
ii) appropriate accounting policies have been selected and applied
consistently and the Directors have 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 31st March 2010 and the profit of
the Companyfortheyearended 31" March 2010;
iii) proper and sufficient care has been taken 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;
iv) the annual accounts have been prepared on a going concern basis.
PARTICULARS OF EMPLOYEES
Information as per Section 217(2A)ofthe Companies Act, 1956, read with
Companies (Particulars of Employees) Rules, 1975 are set out in
Annexure B to this report.
SUBSIDIARY COMPANIES
AS per Section 212 of the Companies Act, 1956, your Company is required
to attach the Directors Report, Balance Sheet, and Profit and Loss
Account of its Subsidiary Companies. Accordingly, an application has
been made to the Ministry of Corporate Affairs (MCA), Government of
India, requesting an exemption from such attachment as the Audited
Consolidated Financial Statements in the Annual Report present a full
and fair picture of the state of affairs and the financial condition of
the Company. The approval is awaited
The Company will make available the annual accounts of the subsidiary
companies and the related detailed information upon request by any
member of the Company. These documents/details will also be available
for inspection by any member of the Company at its registered office
during business hours on working days.
Consolidated Financial Statements of your Company along with its
subsidiaries, prepared in accordance with the relevant Accounting
Standards issued by The Institute of Chartered Accountants of India,
forms part of this Annual Report.
CORPORATE GOVERNANCE
Your Company continues to benchmark itself with the best-of-the- breed
practices as far as the corporate governance standards are concerned.
Your Company has complied with regulations provided in clause 49 of the
listing agreement it has entered into with the stock exchanges. The
compliance report on the various requirements under the said clause
along with the practicing Company Secretarys certification thereof is
provided in the corporate governance section of this report. In terms
of the Listing Agreement, the Management Discussion and Analysis Report
is annexed and forms part of the Annual Report.
EMPLOYEES STOCK OPTION PLAN
Currently, the Company has two Employees Stock Option Schemes in force
namely, "2002 Employees Stock Option Scheme" and "2006 Employees Stock
Option Scheme" for granting Term based and performance based Stock
Options to
Employees. In the financial year 2009-10, 26,941numbers of equity
shares were allotted under 2002 Employees Stock Option Scheme" and
7,256 numbers of equity shares were allotted under "2006 Employees
Stock Option Scheme". The Disclosures in compliance with Clause 12 of
the Securities and Exchange Board of India {Employees Stock Option
Scheme and Employees Stock Purchase Scheme) Guidelines, 1999 in this
respect are stated in AnnexureC to this report.
GROUP
Pursuant to intimation from the promoters, the name of the Promoters
and entities comprising the group as defined under the Monopolies and
Restrictive Trade Practices Act, 1969 (MRTP) a re disclosed in An nexu
re D to this report.
AUDITORS
M/s Price Waterhouse, Chartered Accountants, Auditors of the Company,
retire at the ensuing Annual General Meeting and, being eligible, offer
themselves for re-appointment. The Company
has received a Certificate from the Auditors that they are qualified
under Section 224(1B) of the Companies Act, 1956, to act as the
Auditors of the Company, if re-appointed along with confirmation that
have valid certificate issued by "Peer Review Board" of the Institute
of Chartered Accountantof India (ICAI).
ACKNOWLEDGEMENTS
The Board places on record their appreciation of the contribution of
Associates at all levels, customers, business and technology partners,
vendors, investors, Government Authorities and all other stakeholders
towards the performance of the Company during the year under review.
For and on behalf of the Board
H.V. Goenka
Chairman
Place: Mumbai
Dated: 22na April 2010
Disclaimer: This is 3rd Party content/feed, viewers are requested to use their discretion and conduct proper diligence before investing, GoodReturns does not take any liability on the genuineness and correctness of the information in this article