TRIGYN Directors Report

To the members,


The directors submit Thirtieth annual report of Trigyn Technologies Limited (the “Company” or “TTL”) along with the audited financial statements for the financial year ended March 31, 2016. Consolidated performance of the Company and its subsidiaries has been referred to wherever required.


1. SUMMARY OF FINANCIAL RESULTS


Financial Results for the period ended March 31, 2016 are given below:


(Rs.In lakhs)











































































































Particular



STANDALONE



CONSOLIDATED



Year ended



Year ended



Year ended



Year ended



March-16



March-15



March-16



March-15



Total income



15,290.59



15,000.35



62,540.79



49,289.34



Operating expenses



15,083.06



15,275.32



56,299.20



45,656.91



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



207.53



(274.98)



6,241.59



3,632.43



Other Income



178.44



253.42



180.12



354.28



Interest and finance charges



35.98



31.09



121.33



69.60



Depreciation



46.82



60.35



53.76



64.25



Profit before Exceptional and Extra-ordinary item and before taxes



303.16



(113.00)



6,246.62



3,852.85



Exceptional Items



(37.00)



163.33



(37.00)



163.33



Extraordinary Items



-



-



-



-



Profit before Tax



266.17



50.34



6,209.63



4,016.19



Taxation



86.86



48.09



2,357.90



1,568.67



Net profit / (loss)



179.31



2.24



3,851.73



2,447.52



2. COMPANY’S PERFORMANCE


During the year under review on a standalone basis your company achieved Total Revenue of Rs.15,290.59 Lakhs as compared to Rs.15,000.35 lakhs in the previous year. The net profit on standalone basis stood at Rs. 179.31 lakhs as compared to Rs. 2.24 lakhs in the previous year.


During the year under review on a consolidated basis your company achieved Total Revenue of Rs.62,540.79 Lakhs as compared to Rs.49,289.34 lakhs in the previous year. The net profit on consolidated basis stood at Rs.3,851.73 lakhs as compared to Rs.2,447.52 lakhs in the previous year.


For the year ended March 31, 2016 on standalone basis EPS stood at Rs.0.6089/- and on Consolidated basis EPS stood at Rs.13.08/-.


3. DIVIDEND


In view of the accumulated losses, the Companies Act, 2013 doesn’t permit recommendation of any dividend till such accumulated losses are written off.


4. CAPITAL REDUCTION


Under Section 52 of the Companies Act, 2013, the balance in the Securities Premium Account can only be utilized for purpose specified therein and any utilization of Securities Premium Account for other purpose would be construed as reduction in capital and provision of Sections 100 to 104 of the Companies Act, 1956 will be applicable.


Hence, the Board of Directors believe that in order to present fair financial position of the Company and after an analysis of the various options available to the Company, the Board of Directors felt that it would be prudent to utilize the balance lying in the Securities Premium Account of the Company to the extent of writing off the Accumulated Losses of the Company which is the most practical and economically efficient option available to the Company in the present scenario. A Special resolution for the approval of members of the Company for approving the Scheme of Capital Reduction is proposed in the Notice for the 30th Annual General Meeting of the Company


5. MATERIAL CHANGES AND COMMITMENTS AFFECTING FINANCIAL POSITION BETWEEN THE END OF THE FINANCIAL YEAR AND DATE OF REPORT


There have been no material changes and commitments affecting financial position between the end of the financial year and date of report.


6. HUMAN RESOURCE MANAGEMENT


In its efforts to create better work environment, provide performance oriented growth opportunities and motivating and retaining the right talent, various employee engagement initiatives were carried out by the Company during the year. Some of the initiatives included monthly PoB (Pat on the Back) awards, Spot Peer Appreciation Awards along with Service Anniversaries and Stock Options.


Trigyn deploys its intellectual capability across the globe to create and deliver IT solutions that make a positive business impact for its customers. The key resource to make this happen is the talent within the organization. At Trigyn, we believe in nurturing our employees and hence undertake HR programs that focus on all aspects of the lifecycle of an employee which helps us attract and retain our best talent. The company continues to grow its global scale and footprint with a diverse talent base of employees, deployed across the globe. Efficient systems, processes and continuous investments in technology helps the company manage this complexity of a large, distributed and diverse workforce.


Amongst other initiatives, implementation of Rewards & Recognition Program and further improving the HRMS are some of the plans for the next year.


Sexual Harassment at workplace


The Company has zero tolerance for sexual harassment at workplace and has adopted a policy on prevention prohibition and redressal of sexual harassment at workplace in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the rules thereunder for prevention and redressal of complaints of sexual harassment at workplace.


During the financial year 2015-16, the Company has received no complaints on sexual harassment.


Particulars of employees


The information required under Section 197 of the Act read with rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are given below:


a. The ratio of the remuneration of each director to the median remuneration of the employees of the Company for the financial year:


































Non-executive directors



Ratio to median Remuneration



Dr. Raja Mohan Rao



-



Mr.V.V.Prasad



0.90



Mr. Vivek Khare



0.90



Dr. B.R. Patil



0.85



Mr. A. R. Ansari



0.85



Mr. Mohan Narayanan



0.35




















Executive directors



Mr. Ganapathi Ramachandran



64.93



Ms. Bhavana Rao



34.08



b. The percentage increase in remuneration of each director, chief executive officer, chief financial officer, company secretary in the financial year:










































Directors*, Chief Executive Officer, Chief Financial Officer and Company Secretary



% increase in remuneration in the financial year



Mr. R. Ganapathi



2



Ms. P. Bhavana Rao



153



Dr. B. R. Patil



-



Chi. V. V. Prasad



-



Mr. Vivek Khare



-



Mr. A. R. Ansari



-



Mr. Amin Bhojani



20



Mr. Parthasarathy Iyengar



9



The above percentage increase in the remuneration including ESOP exercises.


* The Sitting Fees for the Directors was increased to Rs. 20,000 per Board or Committee Meeting in the Board Meeting held on February 3, 2016. Earlier it was Rs.10,000 for Board / Audit Committee Meeting and Rs.5,000 for any other Committee Meeting.


c. The percentage increase in the median remuneration of employees in the financial year : 9.73%


d. The number of permanent employees on the rolls of Company: 607


e. Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration:


The average annual increase was around 11.76 %. However, during the course of the year, the total increase is approximately 11.82 %, after accounting for promotions and increase in hiring salaries for trainees. Increase in the managerial remuneration for the year was 78%.


f. Affirmation that the remuneration is as per the remuneration policy of the Company:


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


g. The statement containing particulars of employees as required under Section 197(12) of the Act read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is not applicable to the Company as none of the employees of the Company were drawing remuneration in excess of the limits specified.


7. QUALITY INITIATIVES:


Sustained commitment to highest levels of quality and robust information security practices helped the Company attain significant milestones during the year.


Trigyn has adopted and achieved the following international standards for process definition and improvement


- ISO 9001-2008


- CMMI - DEV Version 1.3 - Level 3


The Company has a strong mechanism for taking feedback from the Customers through satisfaction surveys. The feedback is analyzed across multiple dimensions to drive improvement in Customer experience.


8. STATE OF COMPANY’S AFFAIRS Strategy


During the year, we continued to work on our vision and strengthened focus on our core competence area of IT services. We also introduced a number of strategies for the overall growth and productivity of the Company. The following are some of the broad areas covered by these initiatives:


Cost optimization


A series of measures have been initiated to yield high level of cost optimization. This includes increasing offshore effort ratio, deploying people in right jobs and eliminating unnecessary costs.


Enhancing sales productivity


There is a considerable focus on the sales team for the purpose of acquiring large and profitable project. A new sales team is in place to bring more revenue yielding opportunities.


Delivery


The Delivery team has been strengthened further and it has started showing immediate results in the form of positive feedback from customers.


9. SUBSIDIARY COMPANIES


The Company has 3 subsidiaries as on March 31, 2016. There are no associate companies within the meaning of Section 2(6) of the Companies Act, 2013 (“Act”). There has been no material change in the nature of the business of the subsidiaries.


Pursuant to provisions of Section 129(3) of the Act read with rule 5 of Companies (Accounts) Rules, 2014, as amended from time to time, a statement containing salient features of the financial statements of the Company’s subsidiaries in Form AOC-1 is attached to the financial statements of the Company.


Pursuant to the provisions of section 136 of the Act, the financial statements of the Company, consolidated financial statements along with relevant documents and separate audited accounts in respect of subsidiaries, are available on the website of the Company.


The names of companies which became Company’s subsidiary / joint venture / associate company during the financial year 2015-16 are as under:


1. Trigyn Digital Inc. (Canada) (step-down subsidiary). It is a subsidiary of Trigyn Technologies Inc. which is a wholly-owned subsidiary of Trigyn Technologies Limited.Trigyn Digital Inc. was incorporated on January 27, 2015 and was wound up on April 14, 2016.


10. DIRECTORS RESPONSIBILITY STATEMENT


Pursuant to Section 134 (5) of the Companies Act, 2013, the board of directors, to the best of their knowledge and ability, confirm that:


i. in the preparation of the annual accounts, the applicable accounting standards have been followed and there are no material departures;


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 that period;


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 such internal financial controls are adequate and operating effectively;


vi. they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.


Based on the framework of internal financial controls and compliance systems established and maintained by the Company, work performed by the internal, statutory and secretarial auditors and external consultants, including audit of internal financial controls over financial reporting by the statutory auditors and the reviews performed by management and the relevant board committees, including the audit committee, the board is of the opinion that the Company’s internal financial controls were adequate and effective during the financial year 2015-16.


11. DIRECTORS AND KEY MANAGERIAL PERSONNEL


Pursuant to the provisions of Section 149 of the Companies Act, 2013 (the “Act”), Chi. V. V. Prasad, Mr. Vivek Khare, Dr. B. R .Patil, Mr. A. R. Ansari and Mr. Mohan Narayanan were appointed as Independent Directors at the Annual General Meeting of the Company held on September 26, 2014. They have submitted the declaration that each of them meets the criteria of independence as prescribed under Section 149(6) of the Act and there has been no change in the circumstances which affect their status as independent director during the year.


In accordance with the requirements of the Act and the Articles of Association of the Company, Mr. R. Ganapathi, retires by rotation and being eligible has offered himself for re-appointment.


During the year, the non-executive directors of the Company had following pecuniary relationship or transactions with the Company.
















































Names



Sitting fees (Rs.)



Reimbursement of expenses incurred for attending the Meetings of the Company (Rs.)



Any other transaction (Rs.)



Mr. Ch. V.V. Prasad



90,000



2,815



NIL



Mr. Vivek Khare



90,000



337,596



NIL



Dr. B. R. Patil



85,000



239,055



NIL



Mr. A. R. Ansari



85,000



354,212



NIL



Mr. Mohan Narayanan



35,000



169,219



NIL



Dr. Raja Mohan Rao



Nil



277,694



2,282,929



*Sitting fees is Rs. 20,000 per meeting against Rs. 10,000 for Board or Audit committee and Rs. 5000 for any other meetings


Criteria of making payments to non-executive directors


Sitting fees is only paid to Independent and woman directors and no sitting fees is payable to any other nonexecutive or Executive Director for attending the meetings of the Company.


Any expenses incurred by the non-executive director for attending any meetings of the company or attending any business of the company is reimbursed by the company at actuals.


There are no shares or convertible instruments held by or issued to non-executive directors


Pursuant to the provisions of Section 203 of the Act, which came into effect from April 1, 2014 the appointments of Mr. R. Ganapathi, Chairman and Executive Director, Ms. P. Bhavana, Executive Director, Mr. Parthasarathy Iyengar, Company Secretary and Mr. Amin Bhojani, Chief Financial Officer as key managerial personnel of the Company were formalized.


Dr. Raja Mohan Rao, Non-Executive Director is the father of Ms. P. Bhavana Rao, Executive Director of the Company.


12. NUMBER OF MEETINGS OF BOARD


The Company’s Board of Directors met four times during the year 2015-16 and the required information has been placed before the Board. The Board Meetings took place on May 25, 2015, August 7, 2015, November 4, 2015 and February 3, 2016. For details of the meetings of the board, please refer to the corporate governance report, which forms part of this report.


13. COMMITTEES OF THE BOARD


Currently the Board has five committees, the Audit Committee, Nomination / Remuneration / Compensation Committee, Corporate Social Responsibility Committee, Stakeholders Relationship & Grievance Committee, and Risk Management Committee


A detailed note on the Board and its committee is provided under the Corporate Governance Report section in this Annual Report.


14. BOARD EVALUATION


The board of directors has carried out an annual evaluation of its own performance, Board committees and individual directors pursuant to the provisions of the Act and the corporate governance requirements as prescribed by Securities and Exchange Board of India (“SEBI”) under SEBI Listing Regulations, 2015.


The performance of the Board was evaluated by the Board after seeking inputs from all the directors on the basis of the criteria such as the Board composition and structure, effectiveness of board processes, information and functioning, etc.


The Board and the Nomination / Remuneration / Compensation Committee (“NRC”) reviewed the performance of the individual directors on the basis of the criteria such as the contribution of the individual director to the Board and committee meetings like preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meetings, etc. In addition, the Chairman was also evaluated on the key aspects of his role.


In a separate meeting of independent directors, performance of non-independent directors, performance of the board as a whole and performance of the Chairman was evaluated, taking into account the views of executive directors and non-executive directors. The same was discussed in the board meeting that followed the meeting of the independent Directors, at which the performance of the Board, its committees and individual directors was also discussed.


15. POLICY ON DIRECTOR’S APPOINTMENT AND REMUNERATION AND OTHER DETAILS


The Company’s policy on directors’ appointment and remuneration and other matters provided in Section 178(3) of the Act has been disclosed in the corporate governance report, which forms part of the directors’ report.


16. INTERNAL FINANCIAL CONTROL SYSTEM AND THEIR ADEQUACY


The details in respect of internal financial control and their adequacy are included in the Management Discussion & Analysis, which forms part of this report.


17. AUDIT COMMITTEE


The details pertaining to composition of audit committee are included in the Corporate Governance Report, which forms part of this report.


18. AUDITORS Statutory Auditors


Pursuant to the provisions of Section 139 of the Act and the rules framed there under, M/s. Ford, Rhodes, Parks & Co. (now known as M/s Ford Rhodes Parks & Co. LLP), Chartered Accountants, were appointed as statutory auditors of the Company from the conclusion of the Twenty Eighth Annual General Meeting (AGM) of the Company held on September 26, 2014 till the conclusion of the Thirty First AGM to be held in the year 2017, subject to ratification of their appointment at every AGM.


Secretarial Auditors


M/s Anmol Jha & Associates, Practicing Company Secretaries was appointed to conduct Secretarial Audit of the Company for the financial year 2015-16, as required under Section 204 of the Companies act, 2013 and Rules there under.


19. AUDITORS’ REPORT AND SECRETARIAL AUDITORS’ REPORT:


The auditors’ report and secretarial auditors’ report do not contain any qualifications, reservations or adverse remarks. Report of the secretarial auditor is given as an annexure which forms part of this report.


With respect to the observation by the Secretarial Auditor in the Secretarial Audit Report the management has the following explanation:


20. RISK MANAGEMENT


The Board of the Company has formed a risk management committee to frame, implement and monitor the risk management plan for the Company. The committee is responsible for reviewing the risk management plan and ensuring its effectiveness. The audit committee has additional oversight in the area of financial risks and controls. Major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continuing basis. The development and implementation of risk management policy has been covered in the management discussion and analysis, which forms part of this report.


21. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS


The particulars of loans, guarantees and investments have been disclosed in the financial statements.


22. TRANSACTIONS WITH RELATED PARTIES


None of the transactions with related parties fall under the scope of Section 188(1) of the Act. Information on transactions with related parties pursuant to Section 134(3)(h) of the Act read with rule 8(2) of the Companies (Accounts) Rules, 2014 are given in Annexure I in Form AOC-2 and the same forms part of this report.


23. CORPORATE SOCIAL RESPONSIBILITY


Over the years, we have been striving to achieve a fine balance of economic, environmental and social imperatives, while also paying attention to the needs and expectations of our internal as well as external stakeholders.


The brief outline of the Corporate Social Responsibility (CSR) Policy of the Company and the initiatives undertaken by the Company on CSR activities during the year are set out in Annexure II of this report in the format prescribed in the Companies (Corporate Social Responsibility Policy) Rules, 2014. The policy is available on the website of the Company.


24. EXTRACTS OF ANNUAL RETURN


As provided under Section 92(3) of the Act, the extract of annual return is given in Annexure III in the prescribed Form MGT-9, which forms part of this report.


25. DISCLOSURE REQUIREMENTS


As per Para C of Schedule V of the SEBI Listing Regulations, corporate governance report with auditors’ certificate thereon and management discussion and analysis are attached, which form part of this report.


Details of the familiarization programme of the independent directors are available on the website of the Company (URL:http://www.trigyn.com/Investors/CodesandPolicies/FamiliarisationProgrammeforIndependentDirecectors. aspx).


Policy for determining material subsidiaries of the Company is available on the website of the Company (URL: http:// www.trigyn.com/Investors/CodesandPolicies/PolicyonMaterialSubsidiaries.aspx).


Policy on dealing with related party transactions is available on the website of the Company (URL: http://www.trigyn. com/Investors/CodesandPolicies/RelatedPartyTransactionPolicy.aspx).


The Company has formulated and published a Whistle Blower Policy to provide Vigil Mechanism for employees including directors of the Company to report genuine concerns. The provisions of this policy are in line with the provisions of the Section 177(9) of the Act and the revised Clause 49 of the Listing Agreements with stock exchanges (URL: http://www.trigyn.com/Investors/CodesandPolicies/WhistleBlowerPolicy.aspx).


26. DEPOSIT FROM PUBLIC


The Company has not accepted any deposits from public and as such, no amount on account of principal or interest on deposits from public was outstanding as on the date of the balance sheet.


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


A. CONSERVATION OF ENERGY


Your company consumes electricity only for the operation of its computer and administration of its offices. Though the consumption of electricity is negligible as compared to the total turnover of the company, your company always endeavors to take effective steps to reduce the consumption of electricity.


























a)



The steps taken or impact on conservation of energy



N.A.



b)



The steps taken by the company for utilizing alternate sources of energy



N.A.



c)



The capital investment on energy conservation equipments



N.A.



d)



Expenditure on R&D



N.A.



B. TECHNOLOGY ABSORPTION


The Company has not absorbed any new technology during the year under review.


























a)



Efforts made towards technology absorption



N.A.



b)



Benefits derived like product improvement, cost reduction, product development or import substitution



N.A.



c)



Information regarding Imported Technology



N.A.



d)



Expenditure on Research and Development



Nil



C. FOREIGN EXCHANGE EARNING/OUTGO


The foreign exchange earnings of your Company during the year were Rs. 1,472,708,786/- (Previous year Rs.1,488,697,928/-), while the outgoings were Rs.1,113,484,857/-(Previous year Rs. 1,206,261,959/-).


i. EMPLOYEE STOCK OPTION PLAN (ESOP):


Details required to be provided under the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 (SEBI Guidelines) are set out in Annexure IV to this report.


The Company has obtained a certificate from auditors certifying that the said ESOP scheme have been implemented in accordance with the SEBI Guidelines and the resolutions passed by the members in this regard. The Certificate will be placed at the AGM for inspection by the members which is also attached to this report.


28. CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSION AND ANALYSIS 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 shareholder’s expectations. As per clause 49 of the Listing Agreements entered into with the Stock Exchanges, Corporate Governance Report with auditors’ certificate thereon and Management Discussion and Analysis are attached and form part of this report. Several aspects of the Act, such as Whistle Blower Policy, Code of Conduct and Ethics, have been incorporated into our policies.


29. ACKNOWLEDGEMENTS


The Directors wish to place on record their appreciation of the contributions made by employees at all level to the continued growth and prosperity of your Company.


Your Directors also wish to place on record their appreciation for the support provided by the Customer, Vendors, Investors, Bankers, SEEPZ, regulatory and government authorities in India and abroad.


For and on behalf of the Board of Directors of


Trigyn Technologies Limited


R. Ganapathi


Chairman and Executive Director


Place: Mumbai


Date: August 31, 2016

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