The Company''''s financial performance for the year ended March 31, 2016 as compared to the previous financial year ended March 31, 2015 is summarized below:
(Rs, in Million) Consolidated
('''' in Million) Standalone
Profit before Interest, Depreciation and Tax
Profit before Depreciation and Tax
Profit Before Tax
Provision for Taxation
Profit After Tax
Balance Brought Forward from Previous Year
Profit Available for Appropriation
Depreciation pursuant to the Transitional Provisions as per Companies Act, 2013
Tax on Dividend
Transfer to General Reserve
Balance Carried Forward
OVERVIEW OF COMPANY’S FINANCIAL PERFORMANCE
Your Company is a global IT and ITeS organization focused on delivering proactive and smart, data to intelligence business solutions helping enterprises across the globe address their business challenges.
On a Consolidated basis, your Company achieved a total revenue of '''' 8,346 million as compared to '''' 8,347 million in the previous year. The profit after tax for the current year was '''' 444 million as against '''' 485 million in the previous year.
The total revenue on a standalone basis is '''' 2,982 million as compared to '''' 1,965 million in the previous year. The profit after tax for the current year was '''' 324 million as against '''' 253 million in the previous year.
During the year, your Board of Directors had declared and paid an interim dividend of '''' 0.50 per equity share [10%].
In addition to the Interim Dividend and based on the Company''''s performance, your Directors are pleased to recommend for approval of Members, a final dividend of Rs, 0.25 per share [5%] for Financial Year 2015-16. The total dividend for the Financial Year 2015-16 amounts to Rs, 0.75 per equity share [15%] of face value of Rs, 5 each.
TRANSFER TO RESERVES
The Company has not transferred any amount to the General Reserve. An amount of Rs, 1,665 million is proposed to be retained in the Statement of Profit and Loss.
TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCTION AND PROTECTION FUND
In terms of Section 125 of the Companies Act, 2013, any unclaimed or unpaid Dividend relating to the financial year 2008-09 is due for transfer on October 14, 2016 to the Investor Education and Protection Fund established by the Central Government. More details are available on http://www. datamatics.com/investors/unpaid unclaimed-dividend.
ACCEPTANCE OF FIXED DEPOSITS
The Company has not accepted any fixed deposits during the year.
The Company has the following Indian subsidiaries (including the step down subsidiaries) as on March 31, 2016:
1. Datamatics Software Services Limited @
2. Cybercom Datamatics Information Solutions Limited
3. Lumina Datamatics Limited
4. CIGNEX Datamatics Technologies Limited
5. Datamatics Vista Info Systems Limited @
6. LDR eRetail Limited (w.e.f August 12, 2015)
7. LD Publishing & eRetail Limited (w.e.f October 26, 2015)
The Company has the following overseas subsidiaries (including the step down subsidiaries) as on March 31, 2016:
1. Datamatics Global Services, Inc. (US)
2. Datamatics Global Services GmbH (Germany)**
3. Datamatics Global Technologies GmbH (Germany) *
4. Datamatics Global Solutions GmbH (Germany) **
5. Datamatics Global Services GmbH d.o.o. in Bosnia
6. Datamatics Technologies UK Limited (UK)
7. Datamatics Infotech Limited (UK)
8. Datamatics Global Services Pty Limited (Australia)
9. Datamatics Global Technologies Limited (Mauritius)
10. Datamatics Global Technologies AG (Switzerland)
11. Datamatics Global Services FZ-LLC (Dubai)
12. Lumina Datamatics Inc. (US)
13. Lumina Datamatics GmbH
14. Lumina Datamatics Assessment and Analytics, LLC (US) $
15. CIGNEX Datamatics Corporation (BVI)
16. CIGNEX Datamatics, Inc. (US) @@
17. CIGNEX Datamatics, Inc. (Michigan)
18. CIGNEX Datamatics GmbH (Germany)
19. CIGNEX Datamatics Pte. Limited (Singapore)
20. CIGNEX Datamatics UK Limited (UK) $$
21. Duo Design, LLC. #
22. Elevondata Holdings Labs Holdings, Inc.#
@ Merged with and into Datamatics Global Services Limited vide Bombay High Court Order dated April 22, 2016.
@@ Merged with CIGNEX Datamatics, Inc. (Michigan) w.e.f April 01, 2016
* In the process of winding-up.
** In the process of liquidation.
$ Incorporated in US during the year $$ Incorporated in UK during the year.
# Acquired during the year.
Pursuant to the provisions of Section 136 of the Act, the Financial Statements of the Company including Consolidated Financial Statements along with relevant documents and separate Audited Financial Statements in respect of subsidiaries are available on the website of the Company.
During the year under review, Datamatics Software Services Limited (DSSL) and Datamatics Vista Info Systems Limited (DVISL), subsidiaries of the Company were amalgamated with and into the Company under Sections 391 to 394 of the Companies Act, 1956. The Appointed date was April 01, 2015.
The amalgamation was intended to enable the Company to consolidate DSSL and DVISL''''s operations in a single Company for stronger sustainable business, enhanced organizational capability and greater financial strength.
Pursuant to an order passed by the Honorable High Court of Judicature at Bombay on April 22, 2016, the Scheme of Arrangement was approved and DSSL and DVISL were amalgamated with and into the Company. As per the terms of the Scheme, no shares of the Company will be issued and allotted to the shareholders of DSSL and DVISL. The Scheme was made effective on May 13, 2016 by filing a copy of the Order with the Registrar of Companies, Maharashtra, Mumbai.
As on March 31, 2016, the Paid-up Share Capital of the Company is '''' 294,746,685/- divided into 58,949,337 equity shares of '''' 5/- each fully paid up. During the year there has been no change in the Paid- up Share Capital of the Company.
Pursuant to the amalgamation of DSSL and DVISL with and into the Company, the Authorized Share Capital of the Company has increased from Rs, 800 million to Rs, 975.5 million.
BOARD OF DIRECTORSAND KEY MANAGERIAL PERSONNEL
Retirement by Rotation
In accordance with the provisions of the Companies Act, 2013 (“Act”) and the Articles of Association of the Company, Mr. Sameer L. Kanodia, retires by rotation at the ensuing Annual General Meeting and being eligible offer himself for re-appointment.
The Company has received declarations from all Independent Directors of the Company confirming that they meet the criteria of independence as prescribed both under the Act and Regulation 16(1)(b) of Chapter IV of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
MEETINGS OF THE BOARD
Eight meetings of the Board of Directors were held during the year. For further details of the meetings of the Board, please refer to the Corporate Governance Report, which forms part of this Report.
BOARD AND COMMITTEE EVALUATION
Criteria of performance evaluation of the Board of Directors including Independent Directors are laid down by the Nomination & Remuneration Committee of the Company. Pursuant to the provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board has carried out the annual performance evaluation of the entire Board, its Committees and all the Directors based on the parameters specified in the Report of Corporate Governance. The parameters of performance evaluation were circulated to the Directors in the form of Questionnaire.
In a separate meeting of Independent Directors, performance of Non-Independent Directors, performance of the Board as a whole and performance of the Chairman was evaluated, taking into account the views of Executive Directors and Non-Executive Directors.
DATAMATICS’ DELIVERY CENTRES IN TIER II CITIES OF INDIA & USA
Datamatics Global Services Limited has had a good experience with establishing delivery centres in Tier-II cities.
Nashik: Today we are amongst the top two IT and BPO Company in Nashik. The current strength at Nashik is approximately 1300.
Puducherry: As on today, the overall strength of Puducherry is 600. We have recently acquired and inaugurated an additional facility that has the capacity to accommodate an additional 1500 employees, and we plan to leverage this centre to augment the growth of Datamatics.
Ahmadabad: The information technology industry has blossomed significantly in Ahmadabad, and Datamatics today has close to 370 employees in Ahmadabad.
USA: As the bulk of our operations are in suburbs of Detroit, (USA) we are exploring opening a delivery centre in a tier-II city i.e. Kansas in the State of Missouri.
FUTURE GROWTH STRATEGY
Last fiscal was a year of consolidation and deepening our relationships with our clients. A larger part of our revenue growth was generated from existing clients. We could achieve this due to our focused approach on client mining and providing customer centric business solutions. This is also reflected in the customer satisfaction survey results, with many customers giving us a full score.
Today, we are one of the major technology and business outsourcing providers to the largest healthcare payer organization in the US and Europe. We are also a strategic partner to several large banks in various geographies. Our work with them has not only been appreciated by the end clients but also by industry leaders. Several prestigious awards that we received during the year are testimony to our innovative work for our customers. In terms of a vertical industry growth, we expect strong growth coming from the Banking, Finance, Securities & Insurance (BFSI) and Transport sectors.
Intelligent Robots called iBots
For the coming years, we shall continue to remain focused on a select few major thrust areas. These will revolve around smart automation powered through intelligent robots that automate business processes. Datamatics has been successfully using Robotic Process Automation (RPA) technology as a key enabler to help clients in their digital transformation journey. Our solutions use iBots, which is a family of intelligent robots to offer improved business efficiency and effectiveness by emulating human actions & decision making process and automating them, without making changes to the underlying systems and processes. In this process, intelligent software ''''robots'''' (iBots) take on predictable and repeatable tasks, leading to cost reduction, while improving process quality and consistency and also enabling greater scalability. Our clients across sectors have been able to realize tangible benefits with our innovative approach towards smart automation which include increased productivity, reduced cycle time, improved accuracy and compliance.
Data Labs, our R&D Centre captures the true essence of the path-breaking work that we have been doing. This team has been successfully providing cutting edge solutions by way of developing innovative products and proprietary robots. Some of the path-breaking products that have been developed by Data Labs'''' expert team include:
1. iBridge is an award winning smart process automation software robot that can make complex and tedious manual effort based processes fast, accurate and user friendly. It uses robots to obtain and populate information across multiple software application and enables two way transfer of information between any two systems without the use of an API.
2. iCM Migrator robot automates the content migration process across multiple ECM platforms. It provides an intuitive Graphical User Interface (GUI) that facilitates an easy way of defining the migration parameters. It also exports the content automatically along with Metadata, Security, Roles & Groups in a secure manner, thus reducing the migration cycle time by 30 to 40%.
3. iClass is an intelligent automatic document classification robot that uses big data and text analytics. The classification process is based on a hybrid approach that combines machine learning, rules, and content analytics. It makes use of historical data to make the system auto learn the classification rules and then use the same for auto classifying incoming documents.
4. iConcile offers banks a smart and fully integrated robot that allows them to automatically reconcile bank statements. The smart automation process involves converting auto downloaded bank statements to standard MT940 format, matching them against SAP entries and showing the auto matches while listing down the mismatches for manual intervention.
5. Market Watch makes use of robots to provide precise and accurate pricing of predefined competitor products. This enables clients to reset product prices on their respective portals, offer best possible deals and stay ahead of competition.
6. Product Classification makes use of technology and algorithms for pattern identification and to check the correct classification of products. It is achieved by using robots to crawl on various public domain sites and identify most appropriate product classification.
The digital revolution is reshaping the way business is done and data is at the epicenter of this digital revolution. Every smart business that is planning to stay ahead of the curve is focused on leveraging the power of data to derive enterprise intelligence.
With customers increasingly looking for solutions to manage their ever growing data needs and gain business insights, our value proposition of helping our customers in their ''''Data to Intelligence'''' journey has gained positive traction with them. Owning to the business benefits that our customers have been able to realize, our proprietary BI & Analytics tool - nSights was also recognized by the CIO community as the leader in BI & Analytics solution.
Consulting & Advisory Practice
Our Consulting & Advisory Practice that we institutionalized last year has started showing positive results. Through our Consulting & Advisory Practice, Datamatics has been able to move up the value chain and provide higher value added services, while working as a strategic partner to its clients. As a result, customers are seeing value in the benefits that our teams of experts have been able to unfold for them.
Quality is the way of life at Datamatics. Every process that we follow, every solution and service we design, create and deliver is permeated with the attitude of first-time-right quality. Like the previous year, this year too, our Delivery as per Commitment and Quality of Solutions is the strategic theme of the Company. Several initiatives have been rolled out to transform the way we look at our customer and execute our projects with the interest and expectations of the customer in mind. Winning accolades and awards for quality of our deliverables has almost become a habit. We have been continuously winning best quality and service awards at events organized by our various prestigious Fortune 500 customers. This year too has been no different.
Your Company is the first and the only I.T. Company to have won the “International Asia Pacific Award” for Quality in Services sector. The Award was won against competition from hundreds of companies from 38 countries spread across the world, including the US, Japan, Australia, New Zealand, Russia, Canada, China, Israel, South Korea, Peru and Mexico. We won the Global Quality Challenge award of one of the fortune 100 organizations for the eighth time. Further significant initiatives of your Company towards quality are:
1. Lean Six Sigma Initiative
Leveraging the proven, effective and recognized Lean Six Sigma continues to be one of the key strategies to bring in exponential improvements in efficiencies, productivity and customer delight. This initiative continues to deliver significant benefits to the Company with improvements in Productivity, Efficiency, Quality and Customer Satisfaction. Over 350 Lean Six Sigma Projects and 1650 Kaizen Projects have been completed since the launch of this initiative in 2007. For the past consecutive five years, our improvement projects have been ranked within the top 5 projects out of around 80 projects from multiple industries and organizations in QIMPRO Conventions.
I n the last financial year, an overall benefit that includes tangible and intangible benefits, of '''' 22 million with an ROI of more than 200% was achieved through these performance improvement methodologies.
The Company has about 25 Six Sigma Green Belt and 40 Six Sigma White Belt certified professionals along with 6 Six Sigma Black Belt and 1 Six Sigma Master Black Belt certified professionals. The Company spent over 4000 person hours of training around continuous improvement in the last financial year.
Your Company, keeping true to its commitment of designing and implementing its Quality Management Systems as per the global standards and benchmarks has been assessed and certified on standards such as ISO 9001:2008, SEI - CMMI Version 1.3 high maturity Level L4, and ITIL. New centers that we added last year have also been assessed and certified for compliance to these standards.
As you are aware, the thrust and demands on information security is increasingly becoming stricter. In line with the demands as well as our own analysis of the information security landscape, we continue to lay great emphasis on the Information Security Management Systems. Last year, we not only retained the ISO 27001:2005 certification for our Information Security Management Systems but also brought all our centers under the purview of the information security management. We also got certified to SSAE 16 SOC 1 and SOC 2 requirements with HiTRUST capabilities. We also have been certified to HIPAA requirements. These standards are critical standards for Financial, Insurance and Healthcare industries. Our commitment to ensure a robust Information Security Management System for our customers has been bolstered by these certifications. We will continue to strengthen this as we enter the new financial year. We also have a dedicated Risk Manager certified to the requirements of ISO 31000 to ensure that we, as an organization have all our processes designed with a risk-based approach.
3. Customer Satisfaction Tracking
Previously, we conducted a comprehensive branding survey among our customers to assess their priorities and their perceptions about the Company against these priorities. We are happy to share with you, that there is no jarring incongruence between the two. However, as an organizational improvement initiative, we have identified, as shared earlier, Delivery as per Commitment and Quality of Solutions.
The Customer Satisfaction and Loyalty index measuring process continues to provide invaluable insights into our customer''''s expectations and our performance vis-a-vis these expectations. This is done once every six months and captures customer''''s feedback on a wide range of parameters that encompass each aspect of service excellence. We feel proud to share with you that overall our Customer Satisfaction Index has been 4.87 on a scale of 1-6 (1 being the lowest and 6 being the highest) with about 75% of our Customers rating us “highly satisfied” and “delighted”. In addition to this formal mechanism, we also have systems that capture customer feedback received through other formal and informal channels. The results of these also show an improving trend.
4. Metrics and Process Compliance Index
We use a Delivery Index to measure and compare the performance for each Line of Services (LOS). It incorporates the three key indicators of performance of any project viz Quality, Effort and Schedule adherence and a stop light (red-amber-green) dashboard is used to display the performance.
I n addition, regular process compliance checkups and speedy follow-ups on the corrective and preventive actions have helped us significantly keep noncompliance’s in check thereby reduce rework and defects at the source. Process Compliance Index (PCI) measures and compares the compliance levels for the different LOSs. The Process Compliance Indices are well above the defined targets.
The defined quality gates ensure that we adhere to process requirements and deliverables at each of the critical stages of the project. A regular review of this with Senior Management ensures that the processes are on track.
In order to create processes at par with global best practices, we have also tied up with a number of global forums such as ISBSG, CSI and PMI to understand and benchmark ourselves against key metrics.
We have also introduced advanced statistical tools and analysis and simulation techniques to improve our ability to predict the performance of the projects and thereby take proactive steps and measures to improve the performance.
INTELLECTUAL PROPERTY RIGHTS
Apart from the intellectual Robots (iBots) mentioned in the earlier section of this Directors'''' Report, we have also invested in building core Intellectual Property that is offered to our clients through our products and solutions, some of which are detailed below: i-Q an ERP of Document Processing conceived and architected by Dr. Lalit S. Kanodia which uses artificial intelligence and fuzzy logic to process documents. It is modular, configurable and customizable and can recognize type-written, hand written, structured, semi-structured and unstructured documents. i-Q is copyrighted and works in 3 modes simultaneously viz. Auto Capture, Click and Capture and Manual Keyboarding. Several Fortune 500 Companies globally and other organizations based out of US, UK, Germany, UAE and India use i-Q.
insights Touch Dashboard is point-and-click data visualization solution which allows organizations to create highly interactive dashboards from multiple data sources as data visualization and interactivity is imperative to drive timely, data based decisions while keeping an eye on organizational motives and strategies. It helps in visualizing future performance thereby saving cost, time, and resources while extending the reach of IT solutions and maximizing the value of IT investments. It can consolidate multiple reports and datasets from various locations into a single dashboard - giving a holistic view of an organization''''s data.
insights Financial Consolidation Management (FCM) is a
complete Data Warehouse (DW) model that eliminates the potential for errors and reduces the time spent on repetitive manual processes as manual financial reports take several man days for consolidation due to the various formats used in disparate sources and their respective adjustments. These reports are vital for organizations as they help engage in effective decision-making in accordance with the Company''''s objectives and overall strategies. It caters to standard statutory reporting requirements for publishing financial statements and for balance sheet consolidation coupled with extensive analytical reports. With its multicurrency capabilities, automated calculations and adjustments, insights FCM can also address accounting and regulatory issues.
iMobile is the Professional Mobility Platform for complete solution development and operation. iMobile''''s Mobility Platform enables you to manage the entire lifecycle of application deployment: from user management through to application distribution, troubleshooting and reporting. The platform is being used by independent software vendors and system integrators to bring to market their own mobile solutions. A set of mobile solutions, based on the iMobile platform are developed for organizations in the transportation, field service and construction industries.
iPM - is the acronym for Intelligent Process Manager
and as the name indicates, it is intended to manage the business process intelligently in terms of implementing the business workflows with simplicity, flexibility and extensibility in a process/domain neutral manner and providing adequate visibility to the whole process flow at run-time / offline as part of business activity monitoring and alerting mechanisms employed, in addition to leveraging the capabilities of insights for presenting reports / analytical dashboards.
Our Company has launched a Mobile Application named ''''Datamatics Pulse'''' for its employees on Android Platform and the same will soon be available on iOS. The application is designed to help the employees manage their leaves, outdoor duties and travel activities.
HUMAN RESOURCES MANAGEMENT AND EMPLOYEE RELATIONS
The entire business is chiefly talent-based and people driven. Employees, play a significant role in the success of the Company, and are the key assets of the Company. Hence, we precisely term them as ''''Human Capital''''.
Our Company''''s endeavour is to create a work environment that imbibes a positive attitude for excellent performance. The key areas of the Company''''s Human Resource Management (HRM) strategy includes a comprehensive approach to managing people, workplace culture and environment.
Managing a strong employer and employee relationship leads to the ultimate success of an organization. A strong relationship at any work centre will lead to more qualitative & efficient productivity, generate cohesion among the employees and create smooth functional environment.
The HR department of the Company regularly conducts the following programs:
“Climate Survey” and “Open House” to ensure that employees'''' views and opinions are taken on board, as well as the Company''''s larger strategy is discussed and shared with them. Both these initiatives have HRD Head and leadership teams of each LOS to bring a shared understanding of the larger organizational direction. It renders the employee a platform to voice their views, opinions for the possible areas of improvement which in turn enhance employee engagement and fosters direct organizational Growth.
New Entrant Observation (NEO): It is a session conducted by the HR Department (HRD) for new entrants after they complete 30 days to get to understand how things are going and gain their feedback.
On-Site Visit: It helps in establishing connect with onsite employees to address various issues and for continuous to & fro performance and business related information exchange. HRD representative and Account Manager visit employees once every month. It helps us to understand the communication system, opportunities to collaborate and work environment of both clients & our employees.
Saarathi: With a view to ensure smooth integration of new entrants into the organization, processes, systems and work culture a ''''Buddy System'''' which is known as ''''Saarathi'''' is in place. Saarathi is the point of contact, friend and guide for the new joinee during initial days within the organization.
”Saarthi'''' associates with the new employee during their first 3 months of employment, rendering guidance, support and share experiences with. This helps “break the ice”, build a personal connect and create congenial environment for the new employee, making sure that the new hire gets settled fast in the new work environment..
Euphoria - Monthly Departmental Meet: A monthly meeting is conducted by the HRD, which offers the team an opportunity to interact with each other, come together and celebrate. It provides a platform on monthly basis for the Seniors & HRD to provide updates, to have an element of fun together, reward & recognize employees, all with a munch & mingle session at the end. It works as a motivator to perform outstandingly.
Long Service Award: Being a 40 year old organization, we have many employees who have helped us grow by displaying strong sense of commitment, trust and loyalty with their long term association with the organization. These employees are conferred Long Service Awards during the Annual Achievers Award Ceremony. The excitement is created amongst these employees by felicitating appropriately and infusing a sense of belongingness of being a core member of the Company.
Annual Achievers Award, Instant Recognition and Client Appreciation: To motivate high performing individuals and teams, who have exhibited exemplary commitment, having outstanding leadership qualities, made considerable impact on the business, we confer upon them various performance awards during the Annual Achievers Awards Ceremony and Euphoria. In addition to these, there are also 3 kinds of spot awards viz. a) Spot Individual; b) Spot Team; c) Employee of the month to instantly recognize significant achievement, excellence in performance and special contributions by individuals and teams. ''''Praise for Performance'''' is a program that aims at recognizing the efforts of employees who have received client appreciation, in front of a larger audience to induce a sense of pride and contentment. It is a concerted effort to instil a fresh spirit in the employees, so that they become more spirited and competitive in their performance.
iAppreciate: These cards are awarded by the Reporting Manager to appreciate their team members at right time for good work and efforts.
Our Company has rich diversity in its employees with a common aim to excel. A culture of co-operation and solidarity is infused by celebrating National holidays and festivities such as Independence & Republic Day, Diwali, Dandiya & Christmas. Initiatives such as JOSH, where employees offer their innovative ideas help to unleash their creativity, maintain a balance between work & life and create a deep sense of bonding among employees.
LEARNING & DEVELOPMENT (L&D)
Learning & Development (L&D) conducted the following programs during the year 2015-16:
Eagle @ Datamatics:
We have successfully executed 7 phases of Eagles program. The program has been known across the organization and industry. All Eagle programs till date have been successfully completed with the expected results. Eagle program has helped the organization in creating passion and zeal amongst the team members. The team members explored and enhanced their creativity, resourcefulness, bonding, accountability, influencing skills and belief in themselves. New Eagle 8 Program was launched in January 2016 where 42 new eagles (employees) were inducted with the new strategic objective to be achieved.
Project Management Preparatory Course (PMP):
DGSL is REP - Registered Education Provider for PMP training. We execute PMP training for our employees. Our in house trainers train our members by giving a 5 day module on PMP. As of today we have 40 certified PMP professionals who have been trained internally to get the certification.
The Team Building Workshop based on experiential learning
- It''''s a customized program basis the problems faced by the team. The program helps the team and team members to synergize and become a good working force. It touches and eliminates all the problems faced within the team and helps the team to bond in one seamless unit. Till date 42 programs have been executed. This program is executed in-house, and has managed to generate immense curiosity amongst the employees and clients who often participate remotely.
Training via the WebEx Training tool: The L&D team has expanded their horizons for training execution to be done via WebEx for employees across the organization. With the help of the tool, L&D is able to address the global learning audience with ease and also large audiences effectively. This helps the L&D teams to execute training and participants to participate in training from any location. It''''s a win-win situation for all the parties involved. The L&D team records the training for future use and executes the pre-recorded training via WebEx.
Recorded WebEx training sessions are made available to employees as and when they feel the need to revisit any training in case they have missed this during the live session. This has imbibed a continuous learning attitude amongst the employees.
eShiksha - eLearning Platform: A new module based, eLearning platform was introduced for our employees where the employees can learn anytime, anywhere, at their convenience.
Gaining proficiency in foreign languages enables width of operations for both employees and the Company. Therefore, Datamatics encourages employees to get themselves certified in foreign languages. Accordingly, ''''Learn German'''' & ''''Learn Italian'''' initiatives have been rolled out to encourage employees hone their language skills in order to better respond to our global clientele.
L&D has clocked 2,38,961 man-hours in the year 2015-16 with an average score of 4 on 5.
AWARDS & ACHIEVEMENTS
During the year, in recognition of its performance and initiatives, the Company (including Subsidiaries & Group Companies) and its employees received several awards, some of which are:
- Datamatics was awarded the ''''Corporate Excellence- for leveraging IT for Business Performance'''' at the Lokmat Corporate Excellence Awards ceremony held in Mumbai;
- Datamatics was awarded the ''''Best Health Insurance BPO Provider'''' at the Asia Outsourcing Leadership Awards 2016;
- Datamatics'''' s product iBridge (Robokey) won the ''''IMC IT Product Award in Large category'''' at the IMC IT Product Awards 2015;
- Datamatics has been felicitated with the ''''CIO''''s Choice Awards 2016'''' at the CIO''''s Choice Awards ceremony held in Mumbai;
- Datamatics won the ''''Semi Annual UHC Operations Global Quality Challenge Award'''' for the 8th time in a row at the Asia Outsourcing Leadership Awards 2016;
- Datamatics'''' Travel Desk Team was awarded the ''''Most Well Planned Business Travel'''' at the 10th Edition of Mice Travel Mart and Leisure & Luxury Travel Mart Awards ceremony held in Mumbai;
- Datamatics was honored with ''''Technology Partner for Global Transit Revenue Systems Award'''';
- Datamatics'''' Learning & Development team was the proud winner of ''''Coaching/Mentoring Program'''' and ''''Synergy - Games Based Learning'''' at the 7th Edition of the LeapVault CLO Awards by Tata Institute of Social Sciences (TISS) held in Mumbai;
- CIGNEX Datamatics has been recognized with the ''''Quality Excellence Award'''' at the prestigious Indian Merchants Chambers - IT Awards 2015 held in Mumbai;
- CIGNEX Datamatics received the ''''Solution Provider of the Year'''' and the ''''Excellence in Value Creation'''' awards at the Lokmat Corporate Excellence Awards in Mumbai;
- CIGNEX Datamatics was felicitated with the ''''Community Excellence Award'''' by ''''Liferay'''' for the 5th consecutive year;
- CIGNEX Datamatics won the ''''Best Analytics Service in Sales Analytics'''' award for its expertise in Big Data & Analytics at the 9th Customer FEST Awards 2016 held in Mumbai;
- CIGNEX Datamatics was awarded the ''''Global HR Excellence'''' and ''''Employer Branding'''' awards at the 24th edition of the World HRD Congress 2016;
- Lumina Datamatics won the ''''eCommerce Service Provider of the Year'''' award at the prestigious Asian retail Leadership Awards 2015 held in Dubai;
- Lumina Datamatics has been recognized with the ''''Business Excellence in BPO/ITeS'''' award at the Indian Merchants Chambers - IT Awards 2015 held in Mumbai;
- Dr. Lalit S. Kanodia, Chairman received the ''''Indian of the Year - IT, Consulting and BPO Services'''' award at 6th Annual India Leadership Conclave and Business Leadership Awards 2015 by Indian Affairs and Network 7 Media Group;
- Mr. Rahul L. Kanodia, Vice Chairman & CEO, was featured as ''''Entrepreneur of the Month'''' in ''''Silicon Review’ magazine.
- Ms. Varad Kamini Arora, Vice President - Digital Marketing and Communication at Datamatics received the ''''Leading Woman Award'''' for Women Owned Innovative Project at the 6th Annual Women leaders in India Summit held in Mumbai;
- Mr. Sajid Patel, AVP - Head of Learning & Development and Employee Relations at Datamatics has been recognized amongst the ''''25 Most Influential Training and Development Professional'''' by the World Training and Development Congress under the banner of 24th Edition of World HRD Congress 2016;
- Ms. Ankita Singh, Head HR - India at CIGNEX Datamatics won the prestigious ''''Leading Women in Human Resources (IT) Award'''' at the 6th Annual Women Leaders in India Summit organized under the banner of iiGlobal;
- Ms. Ankita Singh, Head HR - India at CIGNEX Datamatics won the ''''HR Leadership Award'''' at the Lokmat Corporate Excellence Awards in Mumbai;
- Mr. PKV Sastry, COO at CIGNEX Datamatics was felicitated with ''''Exemplary Leader Award'''' at the 24th Edition of World HRD Congress 2016 in Mumbai;
- Mr. Jitendra Rajput and Mr. Ravi Gupta, Liferay Consultants of CIGNEX Datamatics have been awarded the ''''Liferay Top Contributor'''' award;
- Ms. Nancy Kincade, Senior Project Manager, managing the book series titled ''''Explore our world, Student Books Level 1 - 6'''' has won the ''''Best in Category'''' for EI - Hi Print Series at the New England Book Show.
POLICY ON DIRECTORS’ APPOINTMENT AND REMUNERATION AND OTHER DETAILS
The Company has been following well laid down policy on appointment and remuneration of Directors, Key Managerial Personnel and Senior Management Personnel.
A brief of the policy on Director''''s appointment and remuneration including criteria for determining qualifications, positive attributes, Independence of Director, and also remuneration for Key Managerial Personnel and other employees, forms part of Corporate Governance Report of this Annual Report.
PARTICULARS OF EMPLOYEES
Disclosure with respect to the remuneration of Directors and employees as required under Section 197 of the Companies Act, 2013 read with Rule 5(1) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed as “Annexure - A” to this Report.
In terms of the provisions of Section 197(12) of the Companies Act, 2013 read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing the names and other particulars of employees drawing remuneration in excess of the limits set out in the said Rules forms part of the Report. However, having regard to the provisions of the first proviso to Section 136(1) of the Companies Act, 2013, the Annual Report excluding the aforesaid information is being sent to the Members of the Company. The said information is available for inspection at the Registered Office of the Company during the working hours. Any member interested in obtaining such information may write to the Company Secretary, at the Registered Office and the same will be furnished on request.
DATAMATICS’ CODE OF CONDUCT FOR REGULATING TRADING BY INSIDERS
The Board of Directors has adopted the Code of Conduct for regulating trading by insiders in accordance with the requirements of the SEBI (Prohibition of Insider Trading) Regulation, 2015. Our Company is committed to transparency and fairness and strives to preserve the confidentiality of unpublished price sensitive information and prevent misuse of the same. This policy lays down guidelines and procedures to be followed and disclosures to be made while dealing with the Shares of the Company as well as the consequences of violation. The Policy has been formulated to regulate, monitor and ensure reporting of deals of employees and to maintain highest ethical standards of dealing in Company''''s securities. The Code of Conduct for Regulating of Trading by Insiders is available on our website (http://www.datamatics.com/sites/ default/files/Code-of-Fair-Disclosure-and-Conduct.pdf)
DIRECTORS’ RESPONSIBILITY STATEMENT
Pursuant to Section 134(5) of the Companies Act, 2013, the Board of Directors, to the best of their knowledge confirms that:
(i) i n the preparation of the annual accounts for the year ended March 31, 2016, the applicable accounting standards read with requirements set out under Schedule III to the Act, have been followed and there are no material departures from the same;
(ii) they have 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 and of the profit of the Company for the year ended on that date;
(iii) they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
(iv) they have prepared the annual accounts on a ''''going concern'''' basis;
(v) they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and
(vi) they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.
The Statutory Auditors, M/s. Kanu Doshi Associates LLP, Chartered Accountants, Mumbai, hold office until the conclusion of the forthcoming Annual General Meeting and have confirmed their eligibility and willingness to accept the office of the Statutory Auditors, if reappointed. The Company has received a certificate from the above Auditors to the effect that if they are reappointed, it would be in accordance with the provisions of Section 141 of the Companies Act, 2013.
Pursuant to the provisions of Section 204 of the Companies Act, 2013 (“Act") and the Companies (Appointment & Remunerationn of Managerial Personnel) Rules, 2014, the Company with the approval of the Board, appointed Mr. Tushar Shridharani, Practicing Company Secretary, to undertake the Secretarial Audit for the financial year ended March 31, 2016. Mr. Tushar Shridharani has submitted the Report confirming compliance with the applicable provisions of Act and other rules and regulations issued by SEBI/other regulatory authorities for corporate law. The Secretarial Audit Report for the financial year ended March 31, 2016 is annexed as “Annexure - B“ to this Report.
INFORMATION ON AUDITORS’ OBSERVATIONS
1) Statutory Auditors:
The report of the Statutory Auditors on Standalone and Consolidated Financial Statements forms part of this Annual Report. There are no qualifications, reservations or adverse remarks made by the Statutory Auditors in their report.
2) Secretarial Auditor:
There are no qualifications, reservations or adverse remarks made by the Secretarial Auditors in their report.
Corporate Governance is an ethically driven business process that is committed to values aimed at enhancing an organization''''s brand and reputation. This is ensured by taking ethical business decisions and conducting business with a firm commitment to values, while meeting stakeholders'''' expectations. Our Board exercises fiduciary responsibilities in the true spirit of the term.
The Companies Act, 2013 and SEBI Listing Regulations have strengthened the governance regime in the country. Your Company is in compliance with the governance requirements provided under the Listing Regulations.
Our Report on Corporate Governance together with a certificate from the Statutory Auditors of the Company forms part of the Annual Report.
MANAGEMENT DISCUSSION AND ANALYSIS
The Management Discussion and Analysis forms an integral part of this Report and gives detail of the overview of the industry, overview of the business, outlook, internal controls systems and their adequacy, risk and concerns and discussion on financial performance during the financial year.
COMPOSITION OF THE COMMITTEES OF THE BOARD
The Audit Committee consists of the following members: Mr. R. K. Saraswat, Chairman; Mr. Sudhir C. Deshpande, Member and Mr. Shahzaad S. Dalal, Member. For more information, please refer the “Corporate Governance Report”.
Nomination & Remuneration Committee
The Nomination and Remuneration Committee consists of the following members: Mr. Sudhir C. Deshpande, Chairman, Dr. Lalit S. Kanodia, Member, Mr. R. K. Saraswat, Member, and Mr. Shahzaad S. Dalal, Member. For more information, please refer the “Corporate Governance Report”.
Corporate Social Responsibility Committee
The Corporate Social Responsibility Committee consists of the following members: Mr. Rahul L. Kanodia, Chairman; Mr. R. K. Saraswat, Member; Mr. Vidur V. Bhogilal, Member (till September 22, 2015) and Mr. Sameer L. Kanodia, Member. For more information, please refer the “Corporate Governance Report”.
The Stakeholders Relationship Committee
The Stakeholders Relationship Committee consists of the following members: Mr. R. K. Saraswat, Chairman and Mr. Sudhir C. Deshpande, Member. For more information, please refer the “Corporate Governance Report”
EMPLOYEE STOCK OPTION PLANS (ESOP)
The Board of Directors, on the recommendation of Nomination and Remuneration Committee, have at their meeting held on May 27, 2016 approved the closure of Key ESOP Scheme 2006, General ESOP Scheme 2007, Key ESOP Scheme
2007, General ESOP Scheme 2011 and Key ESOP Scheme 2011. There are no existing granted options in any of the above-mentioned ESOP schemes.
PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS
Loans, guarantees and investments covered under Section 186 of the Companies Act, 2013 form part of the notes to the standalone financial statements provided in this Annual Report.
CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES
In line with the requirements of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, your Company has formulated a Policy on Related Party Transactions which is also available on Company''''s website at http://www.datamatics.com/investors/ corporate-governance. The Policy intends to ensure that proper reporting, approval and disclosure processes are in place for all transactions between the Company and Related Parties.
All contracts / arrangements / transactions entered into by the Company during the financial year with related parties were in the ordinary course of business and at arm''''s length basis. No Material Related Party Transactions were entered into during the financial year by your Company. Accordingly, the disclosure of Related Party Transactions as required under Section 134(3) (h) of the Companies Act, 2013 in Form AOC-2 is not applicable. Your Directors draw attention of the Members to Notes to accounts of the financial statement which sets out related party disclosures.
In addition to its Code of Conduct, key policies that have been adopted by the Company are as follows:
Name of the Policy
The Company has formulated and adopted a Whistleblower Policy/Vigil Mechanism for its Directors and Employees to report concerns about unethical behavior, actual or suspected fraud or violation of Company''''s Code of Conduct and ethics.
Corporate Social Responsibility (CSR) Policy
The Policy outlines the Company''''s strategy for bringing about a transformation in the quality of life of people through social upliftment programs. The CSR vision of our Company is “Employability & Environment”
Policy on Material Subsidiaries
The Policy is framed to determine Material subsidiaries of the Company and to provide governance framework for such subsidiaries of the Company.
Related Party Transaction Policy
Related Party Transactions Policy is framed to ensure the proper approval and reporting of transactions between the Company and its related parties.
Insider Trading Policy
The Policy provides the framework in dealing with the securities of the Company.
Policy for determination of Materiality of Events
The Policy is framed to provide an overall governance framework for determination of materiality of events / information and to ensure timely and adequate disclosures of material events / information fully, fairly, correctly and transparently to the concerned authorities.
Document Retention and Archival Policy
The Policy is framed to outline the guidelines for retention and archival for corporate records / documents of the Company.
The Securities and Exchange Board of India (SEBI), on September 02, 2015, issued SEBI (Listing Obligations and Disclosure Requirements) Regulation, 2015 with the aim to consolidate and streamline the provisions of the Listing Agreement for different segments of capital markets to ensure better enforceability. The said regulations were effective from December 01, 2015 and all listed entities were required to enter into the new Listing Agreement within six months from the effective date. Accordingly, the Company has entered into the Listing Agreement with BSE Limited and National Stock Exchange of India Limited within the stipulated time.
The SEBI (Listing Obligations and Disclosure Requirements) Regulation, 2015, mandated the formulation of certain policies for all Listed Companies. In compliance with the above requirement, all our policies are available on our website (http://www.datamatics.com/investors/corporate-governance). The policies are reviewed periodically by the Board and updated based on need and new compliance requirement.
INTERNAL FINANCIAL CONTROL SYSTEMS RELATED TO FINANCIAL STATEMENTS
The Company''''s internal control systems are commensurate with the nature of its business and the size and complexity of operations. The Audit Committee reviews adequacy and effectiveness of the Company''''s internal control environment and monitors the implementation of audit recommendations, including those relating to strengthening of the Company''''s Risk Management Policies and Systems. Your Company has adopted accounting policies which are in line with the Accounting Standards prescribed in the Companies (Accounting Standards) Rules, 2006 that continue to apply under Section 133 and other applicable provisions, if any, of the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules, 2014 and relevant provisions of the Companies Act, 1956, to the extent applicable. These are in accordance with Generally Accepted Accounting Principles in India. Changes in policies, if any, are approved by the Audit Committee in consultation with the Auditors.
The policies to ensure uniform accounting treatment are prescribed to the subsidiaries of your Company. The accounts of the subsidiary companies are audited and certified by their respective Auditors for consolidation.
Your Company operates in SAP, an ERP system, and has many of its accounting records stored in an electronic form and backed up periodically. The ERP system is configured to ensure that all transactions are integrated seamlessly with the underlying books of accounts. Your Company has automated processes to ensure accurate and timely updating of data in the underlying ERP system.
The Management periodically reviews the financial performance of your Company and takes necessary action, wherever necessary.
RISK MANAGEMENT POLICY
Your Company has a well defined, robust and effective Information Security and Risk mitigation system. The information security management system based on International Standard ISO 27001:2005 addresses all concerns and apprehensions towards handling information that is sensitive and confidential effectively. The purpose of risk management is to achieve sustainable business growth, protect Company''''s assets, safeguard shareholder''''s investment and ensure compliance with applicable laws and regulations.
Risk management is controlled by the Risk Management Policy. The policy is intended to ensure that an effective risk management framework is established and implemented within the Company.
In line with the requirements of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board of Directors has approved the Risk Management Policy to monitor the risks and their mitigating actions.
CORPORATE SOCIAL RESPONSIBILITY
The brief outline of the Corporate Social Responsibility (CSR) Policy of the Company and the initiatives undertaken by the Company during the financial year 2015-16 are annexed as “Annexure - C” to this Report in the format prescribed in the Companies (Corporate Social Responsibility Policy), Rules,
SIGNIFICANT/MATERIAL ORDERS PASSED BY THE REGULATORS
There are no significant/material orders passed by the Regulators or Courts or Tribunals impacting the going concern status of your Company and its operations in future.
EXTRACT OF ANNUAL RETURN
Pursuant to Section 92 (3) of the Act and Rule 12 (1) of The Companies (Management and Administration) Rules, 2014, the extract of Annual Return in Form MGT - 9 is attached as “Annexure - D”.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO
The information required in connection with conservation of energy, technology absorption and foreign exchange earnings and outgo, under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014, the Directors furnish herein below the required information:
A. CONSERVATION OF ENERGY:
i) Our Company being in IT & ITeS industry, our operations are not energy intensive. Adequate measures have been taken to conserve energy.
ii) The Company has not taken any steps for utilizing alternate sources of energy.
iii) There were no additional capital investment on energy consumption equipments and proposals if any, being implemented for reduction of consumption of energy as the nature of your Company''''s operations entails a very low level of energy consumption.
B. TECHNOLOGY ABSORPTION:
i) Every effort is made by the Company to update the technological skills of its technical staff in order to ensure that they possess adequate skills to enable them to service the Company''''s clients.
ii) Your Company has not imported any technology during the year under review.
iii) Your Company is predominantly a service provider and therefore has not set up a formal R&D unit. However, it continues to develop software tools and products in its existing delivery setup.
C. FOREIGN EXCHANGE EARNINGS AND OUTGO:
Foreign Exchange Earned in terms : Rs, 1,939.14 million of Actual Inflows
Foreign Exchange Outgo in terms : Rs, 188.08 million. of Actual Outflows
The Directors thank the Company''''s customers, shareholders, suppliers, vendors, bankers, financial institutions, Governments authorities and other stake holders. We place on record our appreciation of the contribution made by our employees at all levels. Our consistent growth was made possible by their hard work, solidarity, cooperation and support.
For and on behalf of the Board
Dr. Lalit S. Kanodia
Place : Mumbai
Date : May 27, 2016