ECLERX Directors Report

Dear Members,


The Directors are pleased to present their Seventeenth Annual Report along with the audited annual accounts for the financial year ended March 31, 2017.


1. FINANCIAL HIGHLIGHTS


Key aspects of Financial Performance/ Operating Performance of the Company for the year ended March 31, 2017 are tabulated below, inter-alia, pursuant to the Companies (Accounts) Rules, 2014.


The consolidated performance of the Company and its subsidiaries has also been set out herein, and wherever required.


(Rupees in Millions)









































































































































Particulars



Standalone



Consolidated



2016-17



2015-16



2016-17



2015-16



Income from operations



1 1,620.22



11,058.85



13,300.33



13,143.16



Other Income



284.79



389.30



282.00



369.46



Total Income



11,905.01



11,448.15



13,582.33



13,512.62



Operating Expenses



7,406.62



6,886.71



8,705.79



8,344.42



Earnings before interest, tax, depreciation and amortization (EBITDA)



4,498.39



4,561.44



4,876.54



5,168.20



EBITDA%



37.79



39.84



35.90



38.25



Finance Costs



-



-



0.25



0.41



Depreciation, goodwill & amortization expenses



364.07



416.63



517.96



565.38



Profit before Exceptional Items, Interest, & Tax



4,134.32



4,144.81



4,358.58



4,602.82



Exceptional Items



80.41



259.14



-



-



Net Profit before Tax (PBT)



4,053.91



3,885.67



4,358.33



4,602.41



Taxes



742.43



937.17



819.03



1,184.97



Profit for the year before minority interest



3,311.48



2,948.50



3,539.30



3,417.44



Minority interest



-



-



(0.97)



2.49



Profit for the year attributable to the shareholders



3,311.48



2,948.50



3,540.27



3,414.95



NPM%



27.82



25.76



26.07



25.27



Profit for the period



3,311.48



2,948.50



3,540.27



3,414.95



2. OPERATIONAL AND FINANCIAL STATE OF AFFAIRS OF THE COMPANY


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


Apart from the information contained in Notes to the Financial Statements, no material changes and commitments have occurred after the closure of the FY 2016-17 till the date of this Report, which would affect the financial position of your Company.


3. DIVIDEND


Based on the overall Company’s performance, your Directors are pleased to recommend a dividend of Re. 1/-(10%) per share. The total quantum of dividend payout if approved by the Members will be about Rs. 54.92 Million including about Rs. 8.10 Million which will be paid by the Company towards dividend tax and surcharge on the same.


The Company had paid a dividend of Re. 1/- per share (10%) in the previous year. The Company intends to maintain historical payout ratio and is exploring efficient methods to achieve the same. The historical data of dividend distributed by the Company is as follows:



















































































S.


No.



Dividend



FY


2015-16



FY


2014-15



FY


2013-14



FY


2012-13



FY


2011-12



FY


2010-11



FY


2009-10



1



Interim



0



0



0



0



0



0



7.50



2



Dividend (Final)



1.00



35.00



35.00



25.00



17.50



22.50



10.00



3



Total Dividend for the year



1.00



35.00



35.00



25.00



17.50



22.50



17.50



4



Dividend as % EPS (Basic)



1.2%



46%



41%



43%



32%



53%



68%



5



Dividend as % Profit After Tax



1.2%



46%



41%



44%



32%



53%



45%



6



Tax Amount (Rs. Millions)



8.54



222.28



179.50



126.93



82.50



105.32



31.61



The register of members and share transfer books will remain closed from Wednesday, August 16, 2017, to Tuesday, August 22, 2017 (both days inclusive) for the purpose of ascertaining entitlement for the said dividend. The Seventeenth Annual General Meeting of the Company is scheduled to be held on Tuesday, August 22, 2017.


4. DIVIDEND DISTRIBUTION POLICY


Pursuant to Regulation 43A of the Listing Regulations, your Company has formulated a dividend distribution policy with regards to distribution of dividend to its shareholders and / or retaining or plough back of its profits. The Policy also sets out the circumstances and different factors for consideration by the Board at the time of taking such decisions of distribution or of retention of profits, in the interest of providing transparency to the shareholders.


The aforesaid policy has also been posted on the Company’s website on http://www.eclerx.com/ Corporate%20Governance/Dividend%20Distribution%20 Policy.pdf


5. GENERAL RESERVE


The Company has not transferred any amount to the


General Reserve for the financial year ended March 31, 2017.


6. BUY BACK OF EQUITY SHARES


During the year under review, the Company bought back


1,170,000 fully paid-up equity shares of face value of Rs. 10 each, constituting up to 2.87% of the issued, subscribed and paid-up equity share capital of the Company as on March 31, 2016. The Buyback was undertaken on a proportionate basis, from the fully paid-up Equity Shareholder(s) / beneficial owner(s) of the Equity Shares of the Company as on October 28, 2016, by way of a Tender Offer for cash at a price of Rs. 2,000 (Rupees Two Thousand only) per Equity Share for an aggregate amount up to Rs. 2,340 Million excluding transaction cost(s), pursuant to shareholders approval dated October 14,


2016.


The Buyback size was about 24.95% of the aggregate paid-up equity capital and free reserves of the Company as per the standalone financial statements of the Company for the financial year ended March 31, 2016. Equity Shares held in demat mode accepted under the Buyback were transferred to the Company’s demat account and the unaccepted demat Equity Shares were returned to respective Seller Members / custodians by the Indian Clearing Corporation Limited / BSE. There were no Physical Shares tendered in the Buyback. The shares accepted under the Buy Back were extinguished and total issued capital was thus, then reduced to 39,712,350 equity shares of Rs. 10/.


7. PUBLIC DEPOSITS


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


8. SUBSIDIARIES / ASSOCIATE COMPANIES


The Company’s subsidiaries / associate companies (with respective shareholding) as on March 31, 2017 are as follows:


Following subsidiary(ies) have been wound up/ merged during the year, with a view to maintain lean organization structure and better administrative control:






















Sr.


No.



Name of Subsidiaries



1



Agilyst Consulting Private Limited (India), step down subsidiary of the Company was amalgamated with eClerx Services Limited effective from April 1, 2015.



2



Agilyst Inc. USA, step down subsidiary was merged with eClerx LLC, USA, wholly owned subsidiary, effective from January 1, 2017.



3



eClerx Investment Ltd, BVI, was wound up effective March 28, 2017.



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


There has been no material change in the nature of business of subsidiaries and associates Company, during the year under review.


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


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


10. CLIENT BASE


The client segmentation, based on the last 12 months’ accrued revenue for the current and previous years, on a consolidated basis is as follows:






































Clients



FY


2016-17



FY


2015-16



FY


2014-15



FY


2013-14



FY


2012-13



US$ 0.5-1 Million



14



16



7



6



5



US$ 1-5 Million



18



17



7



6



5



More than US$ 5 Million



6



7



7



6



6



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


As per explanation to Section 134 of the Companies Act, 2013, the Internal Financial Controls (IFC) are reviewed by your management and key areas are subject to various statutory, internal and operational audits based on periodic risk assessment. The findings of the audits are discussed with the management and key findings are presented before the Audit Committee for review of actionable items. The review of the IFC, inter-alia, consists of three components of internal controls, viz., Entity level controls, Key financial reporting controls and Internal controls in operational areas.


12. INCREASE IN SHARE CAPITAL































Particulars



No. of shares



Amount in Rupees



Issued, subscribed and Paid-up Capital as on April 1, 2016



40,788,686



407,886,860



Add: Number of shares allotted during the year FY 2016-17 on account of ESOP exercised



165,485



1,654,850



Less: Shares bought back via Tender Offer Route during the year FY 2016-17



1,170,000



11,700,000



Issued, subscribed and Paid-up Capital as on March 31, 2017



39,784,171



397,841,710



13. STATUTORY AUDITORS


M/s. S. R. Batliboi & Associates LLP Chartered Accountants, Mumbai, [ICAI Registration No. 101049W / E300004] the Statutory Auditors of the Company, were appointed by the


Shareholders at their meeting held on July 10, 2014 for a period of 5 years i.e. up to conclusion of Nineteenth Annual General Meeting subject to ratification by Shareholders at every Annual General Meeting as per the provisions of the Companies Act, 2013 (''''Act''''). Pursuant to the Act, Members are requested to consider ratification of their appointment and authorize the Board of Directors including Audit Committee thereof to fix their remuneration for the FY 2017-18.


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


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


14. SECRETARIAL AUDIT REPORT


Pursuant to Section 204 of the Companies Act, 2013, and Rules there under, a Secretarial Audit Report for the FY 2016-17 in Form MR3 given by M/s Mehta & Mehta, Company Secretaries, is attached as Annexure-III with this report. The Secretarial Auditors’ Report does not contain any qualification, reservation or adverse mark.


15. EXTRACT OF ANNUAL RETURN


The extract of Annual Return in the prescribed form MGT-9 forms part of this report, as provided under Section 92 of the Companies Act in Annexure-II, 2013 read with the Companies (Management and Administration) Rules, 2014.


16. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY''''S OPERATIONS IN FUTURE


The Company has not received any significant or material orders passed by any regulatory Authority, Court or Tribunal which shall impact the going concern status and Company’s operations in future.


17. DIRECTORS


1. In accordance with the Articles of Association of the Company, V. K. Mundhra, [DIN: 00282180] retires


from office by rotation, and being eligible, offers himself for re-appointment at the forthcoming Annual General Meeting of the Company. V.K. Mundhra has over 37 years of varied business experience having successfully run and looked after large scale manufacturing units in the field of steel, engineering and chemicals and Company stands to benefit from his distinguished experience. Further details are set out in the Notice convening this Annual General Meeting. The Board thus recommends his re-appointment for consideration of the shareholders.


2. Shailesh Kekre, [DIN: 07679583] was appointed as an Additional Non-Executive Independent Director of the Company with effect from March 15, 2017. As per the provisions of Section 161 of the Companies Act, 2013, (''''the Act''''), Shailesh Kekre in his capacity as an Additional Director will cease to hold office at the forthcoming Annual General Meeting and is eligible for appointment. The Company has received requisite notice under Section 160 of the Act from a Member proposing his appointment as Non-Executive Independent Director. Shailesh Kekre has furnished requisite disclosure(s) to the Company as required under Companies Act, 2013 and Listing Regulations. Considering the expertise and experience he brings on board, the Board of Directors recommend his appointment for consideration of the shareholders.


The brief resume(s) of the above Director(s) as required, inter-alia, in terms of Regulation 36 of the Listing Regulations and the required proposal for appointment/ re-appointment, as the case maybe, of the above Director at the forthcoming Annual General Meeting is included in the Notice convening this Annual General Meeting.


None of the above Directors are a key managerial personnel pursuant to the provisions of Companies Act, 2013. No other Director or Key Managerial Personnel have resigned during the year under review.


18. DECLARATION BY INDEPENDENT DIRECTOR(S)


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


19. BOARD, COMMITTEE AND INDIVIDUAL DIRECTORS EVALUATION


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


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


- Evaluation criteria.


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


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


- Accountability towards shareholders;


- Critical review of business strategy;


- Conducive environment for candid communication and rigorous decision making;


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


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


- Business Continuity preparedness;


- Skill Set and mix thereof among Board members;


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


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


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


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


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


- Qualitative comments/inputs;


- Deficiencies observed, if any;


- Qualification of members constituting the Committee;


- Attendance of Committee members in the respective meetings;


- Frequency of meetings.


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


In a separate meeting of Independent Director which was held on December 5, 2016, performance of non-


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


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


20. FAMILIARIZATION PROGRAMME FOR INDEPENDENT DIRECTORS


The details of Familiarization programme held during the year is available on the website of the Company. The introductory familiarization programme is undertaken as and when there is a new induction on the Board of the Company, which, inter-alia, covers the following:


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


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


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


d) Extant Committees of Board of Directors;


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


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


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


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


In addition to this, periodic familiarization programmes are conducted for the directors about the business operations, industry overview, threats, opportunities and challenges in respective verticals. Furthermore, detailed business presentations are made at quarterly meetings of Board of Directors. The details of familiarization programmes imparted to independent directors have been posted on the website of the Company on http:// www.eclerx.com/Corporate%20Governance/Details%20 of%20Familiarisation%20Programmes%20for%20 Independent%20Directors.pdf


Support is provided for independent directors, if they choose to attend educational programs in the area of Board/Corporate governance.


The Directors have access to management to seek any additional information, clarification and details as may be required. The standard letter of appointment of Non-Executive Independent Directors of the Company containing the requisite details has been posted on the website on http://www.eclerx.com/ Corporate%20Governance/Standard%20terms%20 and%20conditions%20of%20appointment%20of%20Non-Executive%20Independent%20Directors.pdf


21. DIRECTORS'''' RESPONSIBILITY STATEMENT


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


a. In the preparation of the annual accounts for the FY 2016-17, the applicable accounting standards had been followed along with proper explanation relating to material departures, if any;


b. the Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2017 and of the profit or loss of the Company for the year ended on that date;


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


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


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


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


22. BOARD MEETINGS


During the FY 2016-17, 6 (Six) Board Meetings were held


as follows:
















May 20, 2016



July 13, 2016



August 29, 2016



November 7, 2016



February 8, 2017



March 15, 2017



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


23. AUDIT COMMITTEE


Composition of Audit Committee:






























Name



Designation



Biren Gabhawala



Chairman



Pradeep Kapoor



Member



Anish Ghoshal



Member



Deepa Kapoor



Member



PD Mundhra



Member



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


24. REPORTING OF FRAUD BY THE STATUTORY AUDITORS


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


There were no such instances of fraud reported by the Statutory Auditor during the FY 2016-17.


25. NOMINATION AND REMUNERATION POLICY


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


26. DETAILS OF ESTABLISHMENT OF VIGIL MECHANISM


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


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


27. PARTICULARS OF LOAN, GUARANTEE AND INVESTMENTS






















Particulars



Amount (Rupees in Millions)



Loan



Please refer Notes to Standalone Financial Statement - Note No. 8



Guarantee



Please refer Notes to Standalone Financial Statement - Note No.32(c)



Investment



Please refer Notes to Standalone Financial Statement - Note No. 5



28. FIRST-TIME ADOPTION OF IND AS


The Company has prepared its financial statements to comply with Ind AS for the year ending March 31, 2017, together with comparative information for the year ended March 31, 2016. Further details are as set out in the Note No. 40 and Note No. 42 respectively, under Standalone and Consolidated Financial Statements.


29. PARTICULARS OF TRANSACTIONS, CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES


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


















































































































































Name



Nature of Transaction



Relationship



Salient


Terms



Duration



Date of Approval by the Board



Transactions during the year March 31, 2017



Outstanding Balance as at March 31, 2017



eClerx Limited



Sales and Marketing Services



Wholly owned subsidiary



Contract of Sales and



Ongoing



May 20, 2014/ July 31, 2014



450.72



101.62


Payable



Expenses incurred by holding Company on behalf of subsidiary



N.A.



Marketing



/ ongoing



0.01



Amount received by holding Company on behalf of subsidiary



N.A.



4.48



eClerx LLC



Sales and Marketing Services



Wholly owned subsidiary



Contract of Sales and Marketing



Ongoing



May 20, 2014/ July 31, 2014 / ongoing



1,226.37



379.82


Payable



Expenses incurred by holding Company on behalf of subsidiary



N.A.



1.26



Amount received by holding Company on behalf of subsidiary



N.A.



5.01



Amount received by subsidiary on behalf of Company



N.A.



8.76



Anjan Malik



Dividend



Director



N.A.



FY 2014-15



May 25, 2015



10.23



-



PD Mundhra



Remuneration



Executive


Director



N.A.



5 years (April 1, 2015 to March 31, 2020)



October 30, 2014



13.80



Dividend



Director



N.A.



FY 2014-15



May 25, 2015



10.22



V.K. Mundhra



Dividend



Director



N.A.



FY 2014-15



May 25, 2015



0.04



-



Rohitash Gupta



Remuneration



Key


Management



N.A.



Ongoing / FY



Ongoing



11.52



-



Dividend



Personnel



N.A.



2014-15



May 25, 2015



0.06































































































Name



Nature of Transaction



Relationship



Salient


Terms



Duration



Date of Approval by the Board



Transactions during the year March 31, 2017



Outstanding Balance as at March 31, 2017



Gaurav Tongia



Remuneration



Key


Management


Personnel



N.A.



Ongoing / FY 2014-15



Ongoing



3.96



Dividend



N.A.



May 25, 2015



0.00



Duncan Stratton & Company Limited



Rent and electricity



Common


Director



Leave and License Agreement for a period 3 years



36 months (October 1, 2014 to September 30, 2017)



October 30, 2014



0.03



eClerx Private Limited



Sales and Marketing Services



Wholly


owned


subsidiary



Contract of Sales and Marketing



Ongoing



May 20, 2014/ July 31, 2014 / ongoing



49.76



18.67


Payable



Expenses incurred by holding company on behalf of subsidiary



N.A.



0.51



Expenses incurred by subsidiary on behalf of Company



N.A.



Agilyst Inc.



Sales and Marketing Services



Step-down


Subsidiary



Contract of Sales and Marketing



Agilyst Inc. was merged with eClerx LLC during the year



March 31, 2015



93.09



ITES Services provided by the holding company



Contract of ITES Services



CLX Europe S.P.A.



Services provided by the ultimate holding company to step down subsidiary



Step-down


Subsidiary



Contract of ITES Services



Ongoing



May 25, 2015



58.54



7.20


Receivable



Services provided by step down subsidiary to the ultimate holding Company



34.07



Company has granted loan to eClerx Employee Welfare Trust, as per details set out in Note No. 33 under Consolidated Financial Statements. The Trust is managed by independent trustee and beneficiaries are employees of the Company and its subsidiaries. During the year, Company carried out a Buyback of shares and some Directors and officers of the Company participated in the same, as per details set out in Note No. 35 under Consolidated Financial Statements.



Pursuant to Related Party disclosure requirements under Part A of Schedule V of Listing Regulations, there are no loans and advances outstanding for the year ended March 31, 2017 from subsidiaries, associate companies or firms/companies in which directors are interested.


30. BUSINESS RESPONSIBILITY REPORT


As stipulated under the Listing Regulations, the Business Responsibility Report, describing the initiatives taken by the Company from environmental, social and governance perspective forms part of the Annual Report.


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


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


32. ENTERPRISE WIDE RISK MANAGEMENT SYSTEM AND RISK MANAGEMENT POLICY


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


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


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


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


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


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


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


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


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


The following is a summary of sexual harassment complaints received and disposed off during the FY 2016-17:


- No. of complaints received: Nil


- No. of complaints disposed off: Nil


34. CORPORATE SOCIAL RESPONSIBILITY Brief outline on the CSR Policy


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


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


In today’s times, the role of CSR is becoming extremely important as forward-thinking, socially conscious companies embed initiatives in their business practices that add value and benefit society, build healthy communities, enhance cultures while at the same time work towards environmental wellbeing. CSR is not an option anymore. It is a necessary element of doing business these days. CSR is now being looked at as a concept different from pure philanthropy and more in tune with strategic intervention that ultimately benefits industry itself and as a strategic intervention of giving back to the society.


The eClerx Cares Committee under the guidance of Board of Directors is responsible for championing all CSR initiatives of the Company. While the eClerx Cares Committee approves and monitors the project funding with different NGOs, the ''''eClerx Cares Council’ at each location champions our employee engagement initiatives. Over the years there has been a huge increase in the lives touched due to the tireless efforts of the eClerx Cares team. This year, we have touched more than 30,000 lives through our direct funding projects and employee engagement activities.


Employee Engagement


Employees are encouraged and participate enthusiastically in the engagement activities laid out across the year. Given below is a list of employee engagement activities undertaken in this year:


- Payroll Giving - existing tie up with Nanhi Kali and CRY. eClerx matches contribution made by each employee.


- A 150 strong contingent of eClerx employees participated in the Standard Chartered Mumbai Marathon pledging their support to the cause of education for the poor and downtrodden.


- Annual Learn-and-Fun Day event for the students of schools sponsored through our corporate funding visit eClerx offices for a day.


- ''''Joy of Giving’ - activity where employees donate gifts requested by children of a supported NGO.


- Salary contribution drive towards Maharashtra drought relief through Dilasa Sanstha. An amount of Rs. 0.30 Million was collected and handed over to Dilasa.


- Online admission drive for rural children passing out of Std. X.


- Teacher training for our Muktangan funded school to help develop IT skills. Training on Microsoft Office Basics (how to choose and use the right application), Power Point (effective use of slides and incorporating pictures and sound), Effective folder and file management, Internet browsing and downloads.


- eClerx employees conducted a training on Vedic Maths (Maths made easy) for students of Class VII & Class VIII at Muktangan.


- Performances by kids from Muktangan at Mumbai, SAMPARC at Pune, and Shanti Niketan at Chandigarh for Fiesta, eDay.


Other Details:


a. Corporate Social Responsibility Policy:


The Company has in place Corporate Social Responsibility Policy.


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


CSR Policy of the Company is available on http:// www.eclerx.com/Corporate%20Governance/ Corporate%20Social%20Responsibility%20Policy. pdf


c. Composition of CSR Committee


























Name



Designation



Deepa Kapoor



Chairperson



Anish Ghoshal



Member



Biren Gabhawala



Member



PD Mundhra



Member



d. Average Profit Before Tax for last 3 Financial Years


(Rupees in Million)






























Financial Year



Net Profit



2013-14



3,090.23



2014-15



2,700.34



2015-16



3,911.02*



Total Profit



9,701.59



Average Profit



3,233.86



*Post amalgamation, not adjusted for IndAS


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


Rs. 64.68 Million


f. Details of CSR spent during the Financial Year


(a) Amount spent during the financial year: Rs. 64.73 Million


(b) Amount unspent if any: Nil


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
























































Sr.


No.



CSR Projects or activities identified



Sector in which the project is covered



Projects or Programs 1. Local area or other 2. Specify the State and district where projects or programs were undertaken



Amount outlay (budget) projects or programs wise (Rupees in Millions)



Amount spent on the projects or programs Sub heads:


1. Direct expenditure on projects or programs 2. Overhead (Rupees in Millions)



Cumulative Expenditure up to March 31, 2017 (Rupees in Millions)



Direct or Implementing Agency



1



SAMPARC



Child


Education



Other -Maharashtra



11.37



11.37



11.37



2



Magic Bus



Child


Education



Other -Maharashtra



6.73



6.73



6.73



Through Implementing



3



LAHI (Lend a Hand India)



Child


Education



Other -Maharashtra



6.60



6.60



6.60



Agency



4



Sanskriti


Samvardhan Mandal



Child


Education



Other -Maharashtra



4.57



4.57



4.57











































































































































































































































Sr.



CSR Projects or



Sector in



Projects or



Amount



Amount spent on



Cumulative



Direct or Implementing



No.



activities identified



which the



Programs



outlay



the projects or



Expenditure



Agency



project is



1. Local area or



(budget)



programs



upto March



covered



other 2. Specify the State and district where projects or programs were undertaken



projects or programs wise (Rupees in Million)



Sub heads: 1. Direct expenditure on projects or programs 2. Overhead (Rupees in Million)



31, 2017 (Rupees in Million)



5



Dilasa Sanstha



Drought relief



Other -Maharashtra



7.64



7.64



7.64



6



Muktangan



Child


Education



Local Area -Mumbai



11.89



11.89



11.89



7



Parivaar - Amar Bharat Vidyapeeth



Child


Education



Other - Bengal



4.76



4.76



4.76



8



Snehalaya



Child


Education



Other -Maharashtra



2.00



2.00



2.00



9



Antarang



Child


Education



Local Area -Mumbai



1.15



1.15



1.15



10



Kaveri Vanitha



Child



Other -



1.50



1.50



1.50



Sevashrama



Education



Bangalore



Through Implementing Agency



11



Jyoti Sarup Kanya



Child



Other -



1.57



1.57



1.57



Aasra



Education



Chandigarh



12



Magic Bus (SCMM)



Child


Education



Other -Maharashtra



1.41



1.41



1.41



13



LAHI (Lend a Hand India)(SCMM)



Child


Education



Other -Maharashtra



0.83



0.83



0.83



14



United Way (SCMM )



Child Education (Admin Exp)



Local Area -Mumbai



0.46



0.46



0.46



15



K C Mahindra Trust A/c Nanhi Kali



Child


Education



Local Area -Mumbai



1.20



0.37



0.37



16



CRY



Child


Education



Local Area -Mumbai



-



0.88



0.88



17



Internal engagement



Child



Other



1.00



0.30



0.30



events, and other



Education



Direct



Admin Expenses



(Admin Exp)



18



PMNRF



Other - Delhi



0.00



0.70



0.70



Total



64.68



64.73



64.73



Details of implementing Agency(ies):


eClerx Cares currently worked with 11 NGOs for who we had approved direct funding. Details of these NGOs and the projects are as below:


- SAMPARC: eClerx supports livelihood support for rural and tribal underprivileged children of interior villages of Maharashtra, school and hostel facilities for tribal and orphan students, sports training and vocational training support to rural school dropouts and higher education support for senior girls of SAMPARC.


- Sanskriti Samwardhan Mandal (SSM): eClerx supports


- Strengthening Resources for Emerging Excellence (SREE), a project to Quality Education.


- Project Sunrise, a project to carve rural athletes.


- Vocational Training Center, with an objective to empower unemployed rural youths with vocational skills making them self-reliant.


- Primary School upgrade - renovation and expansion of 50 year old school.


- Magic Bus: eClerx funds the Child Education Program by Magic Bus for children living in shanties in the Mumbai and Pune. The objective of this program is work on the all-round holistic development of children from underprivileged communities using sports as a medium, by motivating and mentoring them to develop positive attitudes and behaviors in 3 life values (Education, Health and Gender), understand the importance of play and ensuring the development socio-emotional skills. The Work Readiness program aims to help adolescents transit from their education to a sustainable livelihood by providing Career Guidance, Life-skills, Basic Spoken English and Computer Literacy skilling.


- Muktangan: eClerx wholly funds 1 school (preschool to Std. IX) in the central part of Mumbai, covering children of defunct mill workers and odd job workers.


- Lend-A-Hand-India (LAHI): eClerx funds to provide job and life skills training to young boys and girls as part of secondary school curriculum under ''''Project Swadheen’ in high schools all over Maharashtra. (Swadheen in Hindi means self-dependent). It provides students with hands-on experience in skills such as electrical wiring, welding, agriculture, animal husbandry, energy, environment, and home and health science. On the basis of the success demonstrated in 50 schools supported by eClerx, the program is now launched in 500 schools across Maharashtra with the Central and State Governments.


- Amar Bharat Vidyapeeth (Parivaar): eClerx funds education expenses of students of the Parivaar school at Kolkata.


- Snehalaya: Project focusing on girl child and education in Ahmednagar. eClerx funds the education expenses of children in Snehalaya’s Shelter Home, which has kids removed from red light areas of Ahmednagar.


- Antarang: Antarang equips economically vulnerable youth with core employability skills. eClerx supports the CareeReady Program for 17 to 25 year old youth. The CareeReady program has seen over 81% of the youth engaged positively in a career direction of their choice.


- Kaveri Vanitha Sevashrama (KVS) Bangalore:


eClerx support to cover education expenses of orphan children.


- Jyoti Sarup Kanya Aasra Society (JSKAS), Chandigarh: Girls home aiming to help the destitute, and abandoned girls. Currently there are girls ranging from two year to twenty three year


old. eClerx has supported the development of a computer / communication lab.


- Dilasa Sanstha: A project outside of the central theme of eClerx Cares. Due to the extreme drought situation prevailing in Maharashtra over the last 3 years, this project was undertaken with a view to stop farmer suicides. eClerx adopted 9 villages in its effort towards drought eradication program through Natural Resource Management (NRM) with community participation. Activities conducted related to water and land management , Pasture Development, Horticulture, Soil Conservation, Watershed Development, Creation of self-help groups, Implementation of income generating projects, Irrigation through Dam Canals, etc.


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


PD Mundhra Deepa Kapoor


Executive Director Chairperson


CSR Committee


Mumbai May 30, 2017


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


35. AWARDS AND ACCOLADES


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


- won the Golden Peacock Awards, 2017 for Business Excellence


- won the NetApp Innovation Awards, 2017


- eClerx’s internal SIEM (Security Incident and Event Management) application ''''eVigilPRO'''' has been awarded as the ''''Most Admired Data Science Project of the Year’ at Cypher 2016, organized by Analytics India Magazine


- eVigilPRO was recognized by DataQuest Vertical Warrior Award 2016


- eVigilPRO awarded with ''''Use of Technology for Operations Excellence’ at Asia BPO Summit 2016


- won the MAKE (Most Admired Knowledge Enterprise) Asia Awards, 2016


- won Awards in Five Categories at The World Quality Congress 2016


- won both Gold and Silver awards at the ASQ-SATEA (American Society for Quality-South Asia Team Excellence Award) 2016


- eClerx won second runner-up award in the Best Improvement category at the 2016 Qimpro convention in Mumbai


36. REMUNERATION DETAILS PURSUANT TO COMPANIES


(APPOINTMENT AND REMUNERATION OF MANAGERIAL


PERSONNEL) RULES, 2014 AND OTHER APPLICABLE


PROVISIONS


- Details of the ratio of the remuneration of each director to the median employee’s remuneration (approx.): Executive Director: 1:84; Non-Executive Non Independent Director: NA; Non-Executive Independent Director: 1:6.13 (excluding sitting fees)


- The percentage increase in remuneration of each Director, Chief Financial Officer, Chief Executive Officer, Company Secretary or Manager, if any, in the financial year: Executive Director: 0%, Non Executive Independent Directors: 10%, Chief Financial Officer: 12% and Company Secretary: 11.3%;


- The percentage increase in the median remuneration of employees in the financial year: 1.71%;


- The global headcount of the Company is more than 8,800.


- Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and reasons for any exceptional circumstances for increase in managerial remuneration: 7.5% for employees other than senior managerial personnel v/s 8.5% percentile increase in the senior managerial remuneration. The increase is determined based on salary benchmarking done with industry peers to ensure retention of experienced employees. Company performance has indirect linkage to overall compensation of senior management;


- Salary details of top ten employees in terms of remuneration drawn and those employed throughout the financial year and who were in receipt of remuneration, in the aggregate, not less than Rs. 102 Lakhs are given in the Annexure-V forming part of this report;


- Salary details of employees employed for part of the financial year and who were in receipt of remuneration for any part of the year which, in the aggregate, was not less than Rs. 8.5 Lakhs per month are given in the Annexure-V forming part of this report;


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


Managerial Remuneration details:














Particulars



Executive Director



Non-Executive & Independent Director



Non-Executive


Director



All elements of remuneration package such as salary, benefits, stock options, pension etc. of all directors



Annual Gross Salary: Within the range between Rs. 13,800,000 to Rs. 27,600,000 per annum with annual increments effective 1st April each year as may be decided by the Board, based on merits and taking into account the Company’s performance for the year. The benefits, perquisites and allowances will be determined by the Board of Directors from time to time.



The Remuneration is paid within the monetary limit approved by the shareholders of the Company subject to the same not exceeding 1% of the net profits of the Company computed as per th

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