DIRECTORS' REPORT TO THE MEMBERS, The Directors are pleased to present their Twenty-Second Annual Report, on the business and operations of the Company, Hexaware Technologies Limited (hereafter referred to as 'The Company') together with audited accounts for the financial year ended December 31, 2014. Results of Operations a) Global operations: Income from operations increased to Rs. 25,816.77 million in 2014 from Rs. 22,853.48 million in 2013, growth of 12.97%. The growth in Dollar terms was 8.9%, reaching USD 422.40 million. Growth was driven largely by volume increase, aided by increased realized bill rates, however there was an adverse impact of cross currency. Profit from Operations (profit before Exchange rate difference, Interest, Other income and Provision for taxation) was at Rs. 4,335.88 million in 2014 as against Rs. 4,736.26 million in 2013. The decrease was largely on account of increase in onsite business which is primarily low margin business in comparison of offshore, additional investment in sales and increased admin cost for growth.. Profit after tax stood at Rs. 3,201.52 million in 2014 as compared to a profit of Rs. 3,791.35 million in 2013. PAT margins were at 12.4% in Rupee terms. Material changes from end of financial year till date of report There are no material changes and commitments, affecting the financial position of the Company which have occurred between the end of the financial year of the Company to which the financial statements relate and the date of the report other than those disclosed in the financial statements. Company's major achievements in 2014 During the year 2014, 44 new clients were added. This took the total number of active clients to 236 in Q4-2014. During 2014, the number of clients registering annual revenues in excess of USD 20 million each increased from 4 to 5; 3 clients in the USD 10 million - USD 20 million range, 13 clients in the USD 5 million - USD 10 million range, 40 clients in the USD 1 million - USD 5 million category. b) India operations: In the year 2014, the revenue of the standalone legal entity increased by 13.2% to Rs. 11,545.56 million. This is in comparison with revenue of standalone legal entity at Rs. 10,199.54 million in the previous year. The net profit after tax was Rs. 3,183.96 million as compared to a profit of Rs. 3,339.66 million in 2013. Share capital The paid-up Share Capital of the Company as on December 31, 2014 was . 601.85 million comprising of 300,923,472 Equity Shares of Rs. 2/- each. During the year 1,047,525 shares were issued under different ESOP schemes. The market capitalization of the Company as on December, 31, 2014 was at . 60,094 million (USD 973.98 million). The market capitalization is calculated on the basis of closing prices of . 199.70 on The National Stock Exchange and the closing exchange rate of 1 USD = Rs. 61.70 as of December 31, 2014. Reserves The Company did not transfer any amount to General Reserve this year. During the year due to merger of wholly owned subsidiary Caliber Point Business Solutions Limited (CP) an amount of . 258.88 million, Rs. 41.12 million and Rs. 352.91 million has been added to General Reserve, Securities premium and to the Profit and Loss Account respectively. With this addition, the total General Reserve as on December 31, 2014 is at Rs. 2,135.75 million. Further, the balance in the P&L Account is Rs. 2,862.59 million. Forex Mark-To-Market: The year-end Hedging Reserve stood at a loss of Rs. 253.01 million, as compared to loss of Rs. 1,176.45 million in the previous year. This is in accordance with the principles of recognition and measurement for accounting of forward exchange contracts and derivative contracts of Accounting Standard (AS)-30. In summary, total reserves stood at Rs. 9,771.53 million, including . 4,741.93 million of Securities Premium account. Dividend During the year 2014, the Company paid four interim dividends on equity shares, Q1 - Rs. 3.00 (150%), Q2 - Rs. 1.60 (80%), Q3 - Rs. 2.35 (117.5%), Q4 - Rs. 2.50 (125%). This brings the interim dividends for the four quarters of 2014 to Rs. 9.45 per share (472.5%). The Board of Directors has not recommended payment of any final dividend. The total cash outgo for dividend declare in 2014 on account of interim dividend & tax thereon amounts to Rs. 3,374.57 million. Investment Subsidiaries and Branches: During the year Caliber Point Business Solutions Limited, a wholly owned subsidiary of the Company got merged into Hexaware Technologies Limited as approved by the Bombay High Court vide order dated October 10, 2014 with the appointed date of April 1, 2013. The merger has been accounted as per pooling of interest method. Hexaware has additionally invested in another wholly owned subsidiary Company, Risk Technology International Limited to the tune of Rs. 8.5 crores by subscribing to its share capital. Infrastructure: A tangible signature of the Company's growth aspirations is its investment in infrastructure. The Company has invested . 604 million in 2014 for expanding its physical and technical (IT) infrastructure globally. The majority of investment was done in Siruseri phase 1, phase 2 (new project) and in Pune for starting new project for creating new SEZ facilities. Company is planning to cater need of long term future and ensure that it motivates its dynamic team to provide quality support for its global sales and delivery operations. Delivery Centers India based Global Delivery Centers Mumbai: The Company has three Offshore Development Centers (ODCs) at Millennium Business Park in Mahape, Navi Mumbai. One of these is the registered office of the Company. There are 1500 employees working from these centers having capacity of 1650 employees. The Company's BPS arm operates out of another building in the same complex, with 800 employees - providing BPS services to its global clients. Chennai: There are around 3200 employees working from the Company's 27 acre campus in Chennai. This campus houses all employee-friendly amenities like recreation center, library and gymnasium facilities -offering plenty of avenues for relaxation and rejuvenation as well as knowledge enhancement through Hexavarsity - the Company's in- house Learning and Development University. The Company's Chennai "green campus" conforms to eco-friendly norms and regulations, like optimal use of solar energy, use of eco- friendly building materials and a judicious spread of landscaped spaces around seating facilities across various levels. Currently seating capacity is expanded to 6,000 seats in Phase 1. The Company has just started with construction for Phase 2, with planned completion by June 2016 with approximately 3,700 seats. The BPS arm also operates out of another facility in Chennai with over 600 employees working from the facility. Pune: In Pune, the Company has ODC at Rajiv Gandhi InfoTech Park in Hinjewadi SEZ (currently on lease) with 509 employees working from the centre. Company is also planning to create new facility -SEZ development centre for 2000 seats through its wholly owned subsidiary - Risk Technology International Limited which got approval for developing SEZ facility on land acquired from MIDC at Hinjewadi phase 3. Nagpur: The Company owns 20 acres of land in Nagpur, a tier II city, at an SEZ location. This facility is currently operational with around 170 professionals and has seating capacity to accommodate 1000 professionals. Bengaluru: This facility in the India's IT capital of Bengaluru has capacity of 400 seats & the number of employees seated at office is around 300. This facility mainly houses the delivery operations for a major global client and is now being staffed with senior managerial roles in line with our increasing focus in solving their business-critical challenges. Coimbatore: Hexaware BPS arm has a facility in Coimbatore with 231 employees working from the facility. Overseas Global Delivery Centers New Jersey (USA): The Company has an established Global Delivery Centre (GDC) at Secaucus, New Jersey (USA) for a few years now to cater specifically to its American clients. While this proximity centre offers benefits such as the same time zone, direct communication and enables convenient management oversight, it also further enables the clients to outsource mission-critical tasks and share secure information that would have otherwise not been shipped beyond the shores. The Company also has a GDC at Jamesburg to cater to the needs of the customer. Alpharetta, GA (USA) The Company has Global Delivery Centre (GDC) at Alpharetta in the state of Georgia, USA with employees strength of around 140. Herndon, VA (USA) The Company has Global Delivery Centre (GDC) at Herndon in the state of Virginia, USA with employees strength of around 100. Saltillo (Mexico): The Company has a strong presence in Mexico with a near-shore Delivery Centre at Saltillo with employee's strength of around 300 While Mexico offers cost competitiveness compared to the United States of America, the country also provides immense benefits in the form of same time zone, enables immediate response and access to a vast talent pool and an untapped emerging market. The Company intends to leverage its near shore Delivery Centre to cater to several global clients as an addition to the other existing options of continuing operations in the USA or in the Company's locations in India. Global Cash Position The cash generated from operations in 2014 was . 4,129 million. Inflow on account of treasury operations (interest income on the investments made and dividend received from Mutual Funds) was Rs. 268 million. The Company has redeemed money from Mutual Fund amounting to Rs.1,528 million. The Company has invested Rs. 604 million in fixed assets. During the year, the Company paid dividend including dividend tax of . 5,400 million. The Company has received Rs. 48 million from issue of shares. As of December 31, the cash position of the Company was Rs. 3,088 million, equivalent in USD 49 million. Including the Mutual Fund investments (cash equivalent), the total cash & cash equivalents was at . 4,939 million equivalent USD 78.35 million. Human Resource Capital The Company recognizes that "Human Capital" is the most valuable asset and its focus is to have more passionate employees. The Company has a robust and inclusive ecosystem in place which encourages meritocracy, innovation and excellence. The net headcount has increased by adding 1,162 new professionals as of December 31, 2014, the Company is focused towards attracting and retaining high caliber employees through sound and resilient human resource management process. The Company's head count was 10,016 as on December 31, 2014. At around 85.9 %, it has the industry leading retention rates at the year end. The Company consciously enhanced gender diversity with 28 % of our employees being women. Recognising the fact that the workforce lives your brand, the HR team has embarked on a major branding exercise to build an engaging organisation. The Company is focusing on HR analytics for workforce analysis, aiming towards introducing predictive analysis that will drive workforce planning, talent management and retention. The employee engagement platform is inclusive and empowering. It connects the employees with leaders and peers. Forums such as Open Houses, Happy Hours and Grow More Round Table Series, provide interactive platforms for sharing information and feedback. This initiative has not only helped to manage the diversified workforce around the globe but has also kept the employees motivated. The Company has embarked on a journey to create a passionate environment towards work and make Hexaware a great place to work. The Company worked with a leading agency to conduct a survey and intend to work closely with our delivery leaders to work on identified areas which would go a long way to bring employee satisfaction and enhance work passion. Hexaware Edge Hexaware's impressive suite of software solutions features several unique advantages that ensure high quality expertise and cost efficiency. It gives holistic solution for customer needs. It has expertise to help at all stages of IT initiatives- whether they are in small, midsize or large global enterprise. It can create a tailored roadmap, complete end to end solution, combining both technology and business understanding. These include: Outsourcing models Hexaware has an enviable track record in building, operating and delivering solutions for large offshore development centers (ODC). The Company offers proven business model for customers looking to exploit delivery capabilities across the globe. The models provide a framework for outsourcing large application and product management services and provide the customer with economies of scope and scale. Leadership in niche areas Hexaware has demonstrated leadership and expertise in focus areas. The Company is a global market leader in PeopleSoft services The Company is amongst the leading IT solution providers for the Airlines Industry The Company is also fast emerging among the top Indian IT services provider in Germany The enterprise class solution offerings combined with best-of-class enterprise integration skills are our key differentiators against competitors. Focus versus generic strategy In alignment with its focus on select areas, the Company's investment and focus is dedicated on growing to attain leadership in each sector. This has helped the Company to compete and win in these areas against much larger and more established vendors. Domain expertise Another key differentiator is the emphasis on bringing in domain experts in focused niche areas and has been continuously reinventing itself. Company has centre of excellence that houses well defined tools, accelerators and innovations in new products. This helps in boosting the productivity and reducing project development time and cost. Our size-the right size Being a right-sized Company, Hexaware has the ability to demonstrate adaptability and flexibility in its operations to suit the dynamic needs of its customers. The Company has demonstrated capability in meeting resource and infrastructure requirements for large projects, at the same time remaining small enough for relationship comfort. Effective delivery The Company has invested in building significant onsite delivery and consulting capability to absorb the process overheads of offshore by locating its business practice leaders, account managers and top management team at onsite. This structure enables quicker decision-making and ease of access to customers. Innovative & Flexible Contract Mechanism As a mid-size vendor, Hexaware provides a great deal of flexibility in both the contractual and delivery models. This includes using innovative pricing and payment models that meet the unique expectations of its clients, as also optimizing its SEI CMMI Level 5 processes to meet specific customer requirements. Working relationships stretch from fixed time/fixed fee to time and material. Multi-Cultural Dimension Hexaware operates on a global platform, working with several Fortune 500 customers in North America, Europe and Asia Pacific. This gives a unique understanding and access to not only the business practices but also the cultural and work-ethics in different regions and industry sectors. Process and Methodologies Hexaware has institutionalised a number of processes and innovative methodologies, which has built in risk mitigation strategies and cost efficiencies. Its approach addresses the key issues of transition management and operational efficiency improvement. Quality Initiatives Hexaware has adopted and achieved the following international standards for process definition and improvement at its global development centers : ISO 9001-2008 & Tick IT ISO/IEC 27001:2005 ISO 20000-1:2011 CMMI - DEV & SVC Version 1.3 - Level 5 Information security Information Security management at IT outsourcing centers has become one of the important areas of concern for organizations. Stringent information security measures are in place at Hexaware to ensure business continuity and reduce business damage by preventing and minimizing the impact of security incidents. ISO 27001 is a globally recognized information security standard used to identify, manage and reduce the range of threats to which information is subjected. The standard provides guidelines and directions to safeguard organizational assets and emphasizes continuous improvement for information. Quality Assurance We have also undertaken various initiatives such as implementing an organization wide Defect Prevention Program, Metrics Program, automation of processes and introduction of new tools. The Quality Improvement Program is based on the business needs, technology changes, customer feedback, suggestions and process performance. The Company has also undertaken various initiatives such as implementing an organization wide Defect Prevention Program, Metrics Program, automation of processes and introduction of new tools. The Company has instituted processes that enable transition to new technologies and enable continuous process improvement. Benefits: The customers / clients have benefited as a result of fewer defects, reduction in cycle time and improved delivery capabilities. Hexaware has provided value-additions through improvement in the performance of the systems that have been outsourced, a reduction in the problems and failures, and improved stability. This has resulted in high levels of customer satisfaction and repeat business. Implementing the processes has trained the organization and people to be methodical and process-driven. The Company has introduced and improved upon best-of-breed industry practices and standards and thereby improved our delivery capability. Focus on quality has led to lower costs and improved efficiency within the organization. Company focused on Corporate Governance The Company has two "Big 4" firms as auditors - Deloitte Haskins & Sells LLP as its Statutory Auditors and KPMG as its Internal Auditors. Ernst & Young are the tax advisors of the Company. The Company's Board of Directors comprises eminent professionals in their respective fields with rich experience in policy-making and strategy formulation. All the major committees of the Board are headed by Independent Directors, and the Company has followed Cadbury Committee's recommendation of having two different individuals as Chairman & CEO for several years. The Company won the Special Commendation of the prestigious Golden Peacock Award for the year 2009 and 2013 for excellence in Corporate Governance and was the winner of the award in the year 2011. Awards: The Company won the following awards in 2014: Hexaware has received the "CISO Hall Of Fame" award from CISO Platform (India) for its excellence in the deployment and sustenance of Information security within the Organization. This award has been given in recognition of receiving the Top 100 CISO Awards for the last four years continuously. Hexaware Business Process Services (BPS) has won the award for 'Operational Excellence and Quality in BPO Industry' category at the recent summit for Asia Pacific HRM Congress Awards, 2014. This award aims to honor organizations who have significantly impacted or influenced the society, the corporate world, and the HR Community in the area of Human Development. Recipients of these Awards are role models with unquestionable integrity. Hexaware Business Process Services (BPS) was recognized at the National Awards for Excellence in Outsourcing & BPO 2014 for "Best Finance & Accounts Outsourcing Team". This award demonstrates the Company's creativity and ability to sustain a competitive advantage, providing business transformation and achieving value. It also recognizes organizations and Individuals to be a benchmark in terms of best practices and business excellence. Hexaware's annual report for the year 2013 was awarded Plaque for the excellence in financial reporting for the second year in a row by the apex body of Chartered Accountants in India, the Institute of Chartered Accountants of India. During the last quarter, Hexaware was presented the IDC Insights Award 2014 for "Excellence in Employee Engagement". Hexaware's data scientists have been very active in various crowdsourcing analytics forums and data analytics challenges, such as Kaggle, Crowd Analytix, Dextra, etc., tackling a wide range of problems, such as copper spot price prediction, crime rate prediction in US cities, marketing buzz prediction, IPL cricket results prediction, product opinion prediction, etc. Hexaware has recently won multiple prizes and awards in such forums, which serves as a testimony to the depth of the Company's expertise and capability in advanced analytics and data science. Silver winner of PeopleSoft Category at UK Oracle User Group Partner of the Year Awards 2014-2015. Ranked in the 'Forbes Asia's 200 Best Under a Billion List.' Listed among the Top 100 Innovative Service Providers' by Global Services 100. Ranked among leading IT service providers in International Association of Outsourcing Providers (IAOP) Global Outsourcing 100 list. EMC Transformers award for Cloud and Disaster Recovery (DR) implementation. 'Best in Corporate Responsibility Practic' award by Indy's Awards. 'CIO 100' award by IDG. Risk Management The Company has well defined Enterprise-wide Risk Management (ERM) framework in place. The primary objective of ERM function is to implement a framework that augments risk response decisions and reduce surprises. ERM programme involves risk identification, assessment and risk mitigation planning for strategic, operational, financial and compliance related risks across various levels of the organization. The Board of Directors and senior management team recurrently assess the operations and operating environment to identify potential risks and take necessary mitigation actions. The Banking, Investments & Operations and Forex Committee oversee activities related to Foreign Exchange matters and the Banking, Investments & Operations respectively. Key elements of risks 1. Global Economic Situation: The economic environment around the world is showing sign of growth. For IT service Industry, the demand momentum is looking positive. The IT spending is increasing however there are still pockets of global markets where there are still uncertainties. The Company on its part is helping existing customers drive efficiencies, demonstrate value addition. 2. Business Model Redundancy: The new technologies, such as cloud, big data, mobile smart devices and social media are impacting the behavior of the consumers. The Company continuously scan business environment for early detection of emerging trend. 3. Cost pressure: Increasing employee cost and operating expenses may create pressure on margin. The Company is focusing on improving productivity and put up framework for cost management. 4. Regulatory risks: Any change in regulations in any of the jurisdiction of its operations may hamper growth and cause decline in revenue. 5. Delivery and operational risk: The growth and success depends on its ability to hire, attract, motivate, retain and train highly-skilled technology personnel. Failure to complete fixed price, fixed time framed or transaction based pricing contracts within budget and on time may significantly affect our profitability. The risk faced by the Company is discussed in detail in the Management Discussion and Analysis section of this Annual Report. Internal Audit & Controls The Company continues to engage KPMG as its Internal Auditor. During the year, the Company continued to implement their suggestions and recommendations to improve the control environment. Their scope of work includes review of processes for safeguarding the assets of the Company, review of operational efficiency, effectiveness of systems and processes, and assessing the internal control strengths in all areas. Internal Auditors findings are discussed with the process owners and suitable corrective actions taken as per the directions of Audit Committee on an ongoing basis to improve efficiency in operations. Talent Management - Asset Development The Company believes that its employees are the heart of the organisation; hence a large part of the management focus is to care and support its employees The Company is future focused and is fully aware about what it needs from its talent. A significant portion of senior management focus is invested in engaging with the employees. The Company strengthens its talent pool by providing employees with growth and talent enhancement opportunities. It believes that performance needs to be quantified and hence the Performance Management System is revamped to be more metrics driven. The Company also believes that employees stick to the organisation to build career. Hexaware's new Career Management framework will help in defining career pillars, tracks and bands for employees to identify their role and the expectation from the new CMS System. The new CMS system will also help define entrant criteria's for a role and job description to help individuals perform at their best. The New CMS system will also help individuals to make long term career plan and the organisation would enable them to achieve their career objective by various training program. The Company is future focused and is fully aware about what it needs from its talent. It has a systematic structured approach of attracting, identifying, developing, engaging/retaining and deploying of those individuals with high potential who are of particular value to an organization, either in view of their high potential for the future or because they are fulfilling business/ operation critical roles. The Company has a pipelined approach of identifying future talent needed by the organization, also with the Planned Development Programs nurturing them for future top positions. The HR/Learning and Development team provides clarity about expectations and the differentiated capabilities required at different levels also helping them to work on the identified skill gap with some prominent development programs at each level. The Company continued its focus on employee motivation through revamping the Rewards and recognition system incorporating more categories to encourage talent. Most importantly this is devised along with delivery managers to make it relevant and appropriate. The Company focuses on talent management through interventions like smooth process (from Hiring to retention), managing the programs as per diversity of the work force, and supporting high performers with an effective talent management system. HexaVarsity Learning & Development HexaVarsity is Hexaware's Learning & Development Team whose core responsibility is to provide learning solutions to every role within the organization by designing training frameworks to match the dynamic & ever evolving business trends. In the year 2014, HexaVarsity trained 518 campus recruits. In the Fresher Training Program lots of enhancements have been done in terms of the program design, curriculum, approach and evaluation. New Initiatives Business Analyst to Business Consultant Program HexaVarsity had launched the 'BA2BC' Program - Business Analyst to Business Consultant. These are highly interactive sessions with more real-time case-studies, Group discussions, role-plays, live-work packets, Quizzes and Tests. Participants are from different groups from various verticals & horizontals. The Target audience for this program was Business Analyst, Functional Lead, and Functional Consultant. This program was well received by the participants. Customer Focus The newly launched 'Customer Focus' Program under the umbrella of Business Professional Development initiative was well received by the participants and the Company extended this to 4 batches covering 40 consultants in different areas. Bullet Proof Manager Program HexaVarsity had re-launched the enhanced Bullet Proof Manager Program, a leadership development program for about 150+ consultants in India and Mexico. HexMasters HexaVarsity had re-launched the enhanced version of "HexMasters: The Stage for improving the Public speaking skills" with certification model at different levels. Incentive Policy The Company introduced Incentive Policy for those who contribute to the training delivery, elearning content creation and question bank creation. This incentive policy motivates people to contribute more towards learning & development activities. Learn To Grow Hexa Varsity had launched its 'Learn To Grow' Initiative - A campaign to promote a learning culture and to improve the Learning Quotient of the organization. With the eLearning platform HexaGuru+ the eLearning hours had been tremendously increased. Hexa Varsity had also launched an initiative offering curated MOOCs (Massive Open Online Courses) on a variety of subjects, technology and business, from across the globe to employees. Professional Certification Drives Hexa Varsity continuously conducts the Professional Certification Drives, once in a quarter, at office premises itself to serve its customers better. Hexa varsity had signed an MOU with Chennai Mathematical Institute (CMI) to collaborate and create business solutions for our customers. As part of the Corporate Social Responsibility (CSR) and Industry-Academia interactions, the Company closely collaborated with the ICT Academy of Tamil Nadu to support its Bridge programs and have a representative in their Board of Studies. The Company Participated in the BRIDGE Conference conducted by ICTACT in association with NASSCOM on 26th and 27th February 2014 where Hexaware was a principal sponsor of the event. The focus of the two day event was on Leadership and Academic Excellence. The schedule included keynote address by Executive Director & President Global Delivery, Hexaware Technologies. HexaVarsity Team has been part of this event. The Company has hosted several seminars and workshops in Colleges, provided 25 internships, facilitated 3 In-plant visits for students this year. Corporate Governance and Management Discussion and Analysis The Company endeavors to maximize the wealth of the shareholders by managing the affairs of the Company with a pre-eminent level of accountability, transparency and integrity. A report on Corporate Governance including the relevant Auditors' Certificate regarding compliance with the conditions of Corporate Governance as stipulated in Clause 49 of the listing agreement with stock exchanges is annexed. Management Discussion and Analysis is also annexed. Directors' Responsibility Statement Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors confirm the following: 1. In the preparation of the annual accounts, the applicable standards have been followed. 2. The Directors 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 at the end of financial year and of the profit of the Company for the period. 3. The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities. 4. The Directors have prepared the attached Statement of Accounts for the year on a going concern basis. Employee Stock Option Plans (ESOP) Pursuant to the approval of the shareholders, the Company has instituted various Employee Stock Option Schemes for all eligible employees, directors (excluding promoter directors) of the Company and employees of its subsidiaries. All the plans are administered by the Nomination & Remuneration Committee of the Board. During the year 2014, following were the movements under ESOPs: 1,047,525 options were exercised and the Company allotted 1,047,525 equity shares of Rs. 2/- each to Directors and employees on such exercise. These shares have been listed on the Bombay Stock Exchange Limited and National Stock Exchange of India Limited. No options were granted under any of the schemes during the year 2014. Fixed deposits During the year under review, the Company did not accept or invite any deposits from the public. Insurance The Company has sufficiently insured itself under various insurance policies to mitigate risks arising from third party or customer claims, property/casualty, etc. Errors & Omissions / General Liability In a global services business, customers insist on taking suitable Insurance covers including Errors & Omission (Professional Indemnity) and Commercial General Liability. The Company has taken appropriate insurance covers with reputed insurers & reinsurers to protect the Company from any third party liability claims that may arise at any point of time. Directors' & Officer's Liabilities (D&O) /Employment Practices Liability Insurance (EPLI) / Crime D&O policy covers the Directors & Officers of the Company against the risk of third party actions arising out of their actions / decisions, which may have resulted in financial loss to any third party. The Company has appropriately insured itself to mitigate such risks coming from any third party. EPLI Insurance protects the Company from claims from employees or third parties on account of any actual or alleged Employment Practice Violation. Crime insurance protects the Company from loss of money, securities or other financial loss arising from any fraudulent or criminal activity of employees or third parties. Property / Casualty The Company has insured its various properties & facilities against the risk of fire, theft etc. so that financials are not impacted in the unfortunate event of such events. The employees of the Company are covered under various employee benefit insurance against Hospitalization, Accidental Disability and Death. Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo The information relating to Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo required under Section 217(1) (e) of the Companies Act, 1956 read with Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 is annexed and forms part of this Report. Related party transactions All related party transactions that were entered into during the financial year were on an arm's length basis and were in the ordinary course of business. There are no materially significant related party transactions made by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of the Company at large. All Related Party Transactions are placed before the Audit Committee as also the Board for approval, if required. The policy on Related Party Transactions is uploaded on the Company's website. Subsidiaries The Ministry of Corporate Affairs has granted general exemption from attaching the Balance Sheet, Profit and Loss Account and other documents of the subsidiary companies with the Balance Sheet of the Company. The Board of Directors of the Company has by a resolution given consent for not attaching the Balance Sheet of the subsidiaries concerned. A statement containing brief financial details of the Company's subsidiaries for the financial year ended December 31, 2014 is included in the Annual Report. The annual accounts of these subsidiaries and the related detailed information will be made available to any member of the Company seeking such information at any point of time and are also available for inspection by any member of the Company at the registered office of the Company. The Company shall furnish a copy of annual accounts of subsidiaries to any member on demand. Directors Mr. P R Chandrasekar retired as the CEO of the Company w.e.f July 28, 2014 but continues as the Non-Executive Director and Vice Chairman of the Company. The Board of Directors on the recommendation of the Nomination & Remuneration Committee appointed Mr. R Srikrishna as Chief Executive Officer w.e.f. July 28, 2014 and thereafter as an Additional Director and Whole time Director designated as Executive Director of the Company with effect from October 17, 2014. The Members of the Company at the Extra Ordinary General Meeting held on December 19, 2014 approved his appointment and terms of remuneration as the whole time director & CEO of the Company. At the said EGM the Members had also appointed the existing Independent Directors viz. Mr. Bharat Shah & Mr. Dileep Choksi as Independent Directors under the Act each for a term of two years with effect from October 17, 2014. Mr. Abhay Havaldar resigned as a director of the Company w.e.f February 13, 2014. Mr. R V Ramanan resigned as the Executive Director of the Company w.e.f. September 16, 2014. Mr. Jack Hennessy was appointed as an additional director w.e.f November 5, 2014. Mr. Basab Pradhan, Mr. Christian Oecking and Dr. Punita Kumar-Sinha were appointed as additional directors in the capacity of independent non-executive directors w.e.f June 9, 2014 , June 26, 2014 and March 26, 2015 respectively for a period of two years. In accordance with the Articles of Association of the Company, Mr. P R Chandrasekar and Mr. Atul Nishar, Directors of the Company, retire by rotation at this Annual General Meeting and, being eligible; offers themselves for re-appointment at the Annual General Meeting. The information of Directors seeking appointment / re-appointment at the Annual General Meeting to be given to the shareholder as per Clause 49 VIII (E) pertaining to their brief resume, expertise in functional areas, names of companies in which they are Directors is being provided separately in the Annexure on Page No. 70 & 71 of this Annual Report. Members are requested to refer the said section of the Corporate Governance Report. Whistle blower policy The Company has established a vigil mechanism/framed a whistle blower policy. The policy enables the employees and other stakeholders to report to the management instances of unethical behaviour, actual or suspected fraud or violation of the Company's code of conduct or ethics policy. This policy is reviewed annually by the Audit Committee to check the effectiveness of the policy. No personnel has been denied access to the Audit Committee. Auditors M/s. Deloitte Haskins & Sells LLP retire at this Annual General Meeting and being eligible, offer themselves for re-appointment. Pursuant to the recommendation of the Audit Committee at their meeting held on February 9, 2015 recommending re-appointment of M/s. Deloitte Haskins & Sells LLP as Statutory Auditors of the Company, for the financial year 2015, the Board of Directors have, subject to the approval of the shareholders, at their meeting held on February 10, 2015 approved the re-appointment of Deloitte Haskins & Sells LLP as the Statutory Auditors of the Company for the financial year 2015 and to hold office till the conclusion of the next Annual General Meeting. In terms of provisions of section 139 of the Companies Act, 2013 M/s. Deloitte Haskins & Sells LLP have furnished a certificate that their appointment, if made, will be within the limits prescribed under the said section of the Act. There are no qualifications in the audit reports. Particulars of employees As required by section 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975, the particulars of employees forms part of this report. However, as permitted by section 219(1)(b)(iv) of the Companies Act, 1956, the report and accounts are being sent excluding the statement containing the particulars to be provided under section 217(2A) of the Act. Any member interested in obtaining such particulars may inspect the same at the Registered Office of the Company or write to the Company Secretary for a copy thereof. Acknowledgment The Directors place on record their sincere appreciation of the customers, Government of India and of other countries, Registrar and Share Transfer Agents, vendors, bankers and Technology Partners for the support extended. The Directors are also deeply touched by the efforts, sincerity and loyalty displayed by the employees without whom the growth of the Company is unattainable. The Directors wish to thank the investors and shareholders for placing immense faith in them. The Directors seek, and look forward to the same support during the future years of growth. The Ministry of Corporate Affairs vide its Circular No. 08/2014 dated April 4, 2014 clarified that the financial statements and the documents required to be attached thereto, the Auditor's and Boards' Report in respect of the financial year under reference shall continue to be governed by the relevant provisions of the Companies Act, 1956, schedules and rules made there under. Accordingly, the financial statements, the Auditor's Report and Boards' Report as aforesaid are prepared as per the requirements of the Companies Act, 1956. However, the Company, has to the extent possible provided the information in the Annual Report as per the Companies Act, 2013 as a matter of good governance. For and on behalf of the Board of Directors Atul K. Nishar Chairman Date: April 2, 2015 Place: Mumbai |