Directors' Report 1. Your Directors have pleasure in presenting the FOURTEENTH Annual Report of the Company together with the Audited Accounts for the year ended March 31, 2015. 2. Financial Performance During the year under review, your Company earned a Consolidated Revenue of Rs. 7,387 Mn with an EBITDA margin of 21% as compared to Rs. 8,217 Mn with EBITDA of 19% in the fiscal 2014. The Standalone revenue was Rs. 387 Mn with an EBITDA of 37% compared to Rs. 482 Mn with EBITDA of 53%. 3. Dividend The Company paid the following Interim Dividends during the Financial Year: • 1st Interim Dividend of Rs. 0.30/- per Equity Share (30%) at the meeting of the Board of Directors of the Company held on November 12, 2014 • 2nd Interim Dividend of Rs. 0.30/- per Equity Share (30%) at the meeting of the Board of Directors of the Company held on February 06, 2015 The said Interim Dividends were paid on December 05, 2014 and February 27, 201 5 respectively. Your Directors are now pleased to recommend a final Dividend of Rs. 0.40/- per Equity share (40%), which shall be payable on approval of the shareholders at the ensuing Annual General Meeting. The total dividend including Interim Dividends for the Financial Year amounts to Rs. 1 /-per Equity share (100 %). The total cash outflow on account of Equity Dividend (inclusive of interim dividends already paid), and Dividend Distribution Tax amounts to Rs. 144.28 Mn. The Register of Members and Share Transfer books will remain closed from August 22, 2015 to August 28, 2015 (both days inclusive). The Annual General Meeting has been scheduled on August 28, 2015. 4. Holding Company TAKE Solutions Pte Ltd, Singapore, the Holding Company continues to retain substantial equity in your Company and the Present Equity Holding is 57.89%. 5. Subsidiaries (held directly) • TAKE Solutions Global Holdings Pte Ltd, Singapore • TAKE Business Cloud Private Limited, India • APA Engineering Private Limited, India Partner in Limited Liability Partnership Navitas LLP (formerly known as TAKE Solutions Global LLP), India Subsidiaries (held indirectly) • Navitas Life Sciences Holdings Limited (formerly known as TAKE Global Limited), UK • Navitas, Inc (formerly known as TAKE Solutions, Inc), USA • Navitas Life Sciences Limited (formerly known as WCI Consulting Limited), UK • Navitas Life Sciences, Inc (formerly known as WCI Consulting Limited), USA • Applied Clinical Intelligence LLC., USA • Million Star Technologies Limited, Mauritius • TAKE Enterprises Services Inc., USA • TAKE Supply Chain DeMexicoS De RI De CV, Mexico • TAKE Solutions Information Systems Pte Ltd, Singapore • TOWELL TAKE Investments LLC., Oman • TOWELL TAKE Solutions LLC., Oman • TAKE Solutions MEA Limited, UAE • Mirnah Technologies Systems Limited, Saudi Arabia • RPC Power India Private Limited, India • APA Engineering Pte Ltd, Singapore • TAKE Innovations Inc, USA During the Financial Year, TAKE 10 Solutions Private Limited, India was divested and TAKE Intellectual Properties Management Inc., USA was merged with its parent company Navitas Inc, USA. 6. Consolidated Financial Statements The Consolidated Financial Statements have been prepared in accordance with the provisions of Sec 129(3) and Schedule III of the Companies Act, 2013 and Accounting Standard (AS) 21, and other recognized accounting practices and policies. The Consolidated Financial Statements are also available in the website of the Company. Financial of the Company In accordance with the provisions of Section 136(1) of the Companies Act, 2013, Rule 10 of Companies (Accounts) Rules, 2014 and SEBI's Circular No. SEBI/CFD/DIL/LA/2/2007/26/4 dated 26.04.2007 the Financial Statements are provided in abridged form in this Annual Report. Accordingly, an Abridged Balance Sheet is sent to the shareholders of the Company. Any shareholder interested in having a copy of the complete and full Balance Sheet and Statement of Profit & Loss, may write to the Company Secretary at the Registered Office of the Company. The detailed Financial Statements will be available for inspection at the Registered Office of the Company during working hours of the Company and also in the website of the Company (www.takesolutions.com ). Financial of the subsidiary The financial statements of the subsidiary Companies are available for inspection by the shareholders at the Registered Office of the Company. The Company shall provide free of cost, the copy of the financial statements of its subsidiary companies to the shareholders upon request. However, as required, the financial data of the subsidiaries have been furnished as per Section 129(3) in Form AOC-1, forming part of the Annual Report. 7. Directors The Composition of the Board is governed by the applicable laws and regulations and Articles of Association of the Company. The Board consists of persons of professional expertise and experience in technical, financial and operational segments who provide leadership and guidance to the management. Directors retiring by rotation Pursuant to Section 152 of the Companies Act, 2013 read with the Article 32 of the Articles of Association of the Company, Mr. S. Srinivasan, Non- Executive Director of the Company is liable to retire by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment. Independent Directors Appointment Ms. Uma Ratnam Krishnan was appointed as an Additional Director by the Board on November 12, 2014. The Company has received a Notice under Section 160 of Companies Act, 2013 from the Members proposing her candidature to be appointed as Independent Director for a term of 5 years effective from November 12, 2014. Members' approval for her appointment as Independent Director has been sought in the Notice convening the Annual General Meeting of the Company. Directors' resignation Mr. D.A. Prasanna, Independent Director tendered his resignation with effect from April 16, 2015. The Board had approved the resignation by way of circular resolution dated April 17, 2015, which was noted by the Board in its ensuing meeting. A brief note on the Director retiring by rotation and eligible for re-appointment as well as the Independent Director seeking appointment is furnished in the Report on Corporate Governance. Declaration by Independent Directors All Independent Directors of the Company have given their declaration under Section 149(7) of the Companies Act, 2013 confirming that they are in compliance with the criteria laid down in the Section 149(6) for being an Independent Director of the Company. 8. Number of Board Meetings The Board of Directors met 7 (seven) times during the financial year 2014-15. The details of the meetings and the attendance of the Directors are provided in the Corporate Governance Report. The intervening gap between the meetings was within the period prescribed under the Companies Act, 2013. 9. FamiliarizaXion Programme The Company has a familiarization program for Independent Directors pursuant to Clause 49 of the Listing Agreement. The same is uploaded in the Company's website: <http://www.takesolutions.com/corporate-governance> 10. Evaluation of the Board's Performance In accordance with the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board along with the Nomination & Remuneration Committee, developed and adopted the criteria and framework for the evaluation of its performance. The Independent Directors evaluated the performance of the NonExecutive Directors, Chairman and the Board at a meeting of Independent Directors held on March 19, 2015. Directors were evaluated on various criteria including attendance, participation in Board Meetings, engagement with the management in making decisions, understanding the Company's business and that of the industry and in guiding the company to follow the best industry practices. The Independent Directors were also evaluated by the Board based on the professional conduct, roles and responsibilities as specified in Schedule IV to the Companies Act, 2013. The evaluation of the Board as a whole was based on composition and statutory compliance, understanding of business risks, adherence to process and procedures; overseeing management's procedures for enforcing the organization's code of conduct, ensuring that various policies, including the whistle blower policy of the Company were in force and actions taken as appropriate. 11. Secretarial Audit The Board had appointed Mr. M. Alagar, Practicing Company Secretary, to carry out Secretarial Audit. The Secretarial Audit Report for the financial year ended March 31, 2015 is provided in the as Annexure 1. The Secretarial Auditor's Report does not contain any qualification, reservation or adverse remark. 12. Auditors The Statutory Auditors of the Company, M/s. Sundar, Srini & Sridhar, Chartered Accountants, were appointed by the members in the 13th Annual General Meeting for a period of 3 years until the conclusion of the 16th Annual General Meeting subject to ratification by the shareholders at every Annual General Meeting. The Company has received a certificate from the Auditors to the effect that the appointment, if made would be within the limits prescribed under Section 141(g) of the Companies Act, 2013. Members' ratification for the appointment of Statutory Auditor has been sought in the Notice convening the Annual General Meeting of the Company. The Auditor's Report for the Financial Year does not contain any qualification, reservation or adverse remark. 13. Internal Audit During the Financial Year, your Company had engaged the services of M/s G.D. Apte, Chartered Accountants, Pune as Internal Auditors to carry out internal audit for the Company and its subsidiaries. In the case of foreign subsidiaries, Internal Auditors were appointed in the respective countries. The reports of the internal auditors along with comments from the management are placed for review before the Audit Committee. The Audit Committee in consultation with the Statutory Auditor also scrutinizes the audit plan and the adequacy of the internal audits. 14. Internal Control System The Company follows a detailed process of Internal Control System. The financial and operational controls are firmly knit with these internal processes which are documented. All these processes are clearly communicated to all team members and can be easily accessed in the internal quality management systems. These controls are continuously monitored, and gaps if any, are identified and new or improved controls are implemented as and when required. 15. Risk Management The Company has implemented a sustainable Risk Management framework that provides timely & accurate decision support and create an environment where every employee is an integral part of risk management. The Chief Risk Officer of the Company who is part of the Risk Management Committee monitors the framework and presents to the Audit Committee a quarterly report on the updates of the risk management and mitigation. The committee evolved and identified various risks pertaining to the industry in which the company operates. Mitigation measures for those identified risks are prepared in consultation with the employees of the Company. The prioritised Risk lists are reviewed and action plan drawn up to mitigate the same. 16. Related Party Transactions All related party transactions of the Company are reviewed by the Audit Committee and presented to the Board on a quarterly basis. These transactions are at arm's length basis and in the ordinary course of business and are in compliance with the provisions of Section 188 of the Companies Act, 2013 read with Companies (Meeting of Board and its Powers) Rules, 2014 & Clause 49 of the Listing Agreement. The Audit Committee had given its prior approval to those transactions which could be foreseen and an omnibus approval up to X1 Cr per transaction was granted in respect of adhoc transactions that cannot be estimated. There were no materially significant related party transactions entered into by the Company. The disclosure pertaining to the same has been provided as Annexure 2. The Policy on related party transactions as approved by the Board is uploaded in the Company's website:<http://www.takesolutions.com/corporate-governance> 17. Particulars of loans, guarantee or investment
During the Financial Year under purview, no loan, guarantee or investment has been provided by the Company. 18. Material Changes Or Commitments If Any Affecting The Financial Position Of The Company There are no material changes or 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. 19. Deposits The Company has not accepted any deposits either from the shareholders or public within the meaning of the Companies' (Acceptance of Deposits) Rules, 2014. 20. Disclosure under Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressed) Act, 2013. The Company has in place a Policy on Prevention of Sexual Harassment (POSH) in accordance with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013. Orientation of this policy is done to the employees at regular intervals and awareness is created through audio-visual presentations. The Policy is available in the intranet for access by employees. During the financial year, no complaints were received by the Internal Complaints Committee. 21. Details of the significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and company’s operations. There are no significant and material orders passed by the regulators or courts or tribunals that may have an impact for the company as a going concern and /or company's operations. 22. Report on Corporate Governance The Company adheres to the code of Corporate Governance as set out by the Securities and Exchange Board of India (SEBI). In line with that, a report on Corporate Governance, along with a certificate from the Statutory Auditors has been included in the Annual Report, detailing the compliances of corporate governance norms as enumerated in Clause 49 of the Listing Agreement with the stock exchanges. 23. Management's Discussion and Analysis Report Management's Discussion and Analysis Report for the year under review, as per the provisions of Clause 49 of the Listing Agreement with the Stock Exchanges is presented separately, which forms part of the Annual Report. 24. Corporate Social Responsibility During the year under review, a CSR Committee was constituted by the Board and policy on CSR was also published in the website of the Company. The Company is committed to on-going contributions to Society through a comprehensive CSR framework. TAKE Solutions has contributed an amount of Rs. 35 lakhs towards Healthcare; Environment; Education & Sports during the FY 2014-15. The details of the CSR activities forms part of the Annual Report 25. Extract of the Annual Return The extract of the Annual Return as provided under Section 92(3) of the Companies Act, 2013 forms part of the report and is attached as Annexure 3. 26. Particulars of Employees As per Section 197(12) of the Companies Act, 2013 read with the Rule 5 of the Companies (Appointment of Managerial Personnel) Rules, 2014 details of employees drawing a remuneration of more than Rs. 60 lakhs per annum, if employed throughout the financial year and Rs. 5 lakhs per month, if employed for part of the financial year shall be set out as annexure to this Report. However, none of the employees come under the purview of this section and hence, the said provisions are not applicable. 27. Policy on Directors' & KMP's appointment and remuneration The Nomination & Remuneration Committee has laid down a policy for appointment & remuneration of Directors' and Key Managerial Personnel. The policy also provides for criteria to determine the qualifications, positive attributes, independence of a Director, recommend to the Board their appointment and remuneration for the Directors, Key Managerial Personnel and other employees. The Managing Director of the Company does not draw any remuneration. The Independent Directors are paid Commission on the Net Profits not exceeding 1% of the Net Profits of the Company, in accordance with the provisions of Sec 197 of the Companies Act, 2013. The Nomination & Remuneration Committee recommended the remuneration payable to the KMP's. A note on the remuneration policy is provided under the head Corporate Governance Report. The disclosure pursuant to Companies (Appointment & Remuneration) Rules, 2014 are provided under Annexure 4. 28. Employee Stock Options Scheme In accordance with the SEBI (Employees Stock Options Scheme and Employees Stock Purchase Scheme) Guidelines, 1999, the excess of the market price of the underlying Equity Shares as of date of the grant over the exercise price of the option, including up front payments, if any, is to be recognized and amortized on a straight line basis over the vesting period. During the current Financial Year, stock options under ESOP 2007 have not been granted. Further, the Company has already recognized employee's compensation cost over the vesting period, using intrinsic value of option for the stock options granted on April 02, 2008 and May 26, 2008. Also, the difference between intrinsic value and fair value of the options were disclosed in the Directors' Report during the corresponding period. Hence, disclosure pertaining to the difference between intrinsic value and fair value of the option is not applicable for the Financial Year 2014-15. Details of ESOP granted as on March 31, 2015 29. Conservation of Energy, Research and Development,TechnologyAbsorption a. Measures taken to reduce energy consumption: The following measures are institutionalized across facilities: • Optimal cooling of work areas and data centres. • Regular UPS and AC plant maintenance to ensure efficient working of the equipments • Switching off computers when not in use. • Utilisation of lights and stand- alone air conditioners only when required. • Replacements of CFL to LED Saving paper through secured PIN based printers, to reduce the number of printouts • Paper Recycling • Disposal of e-waste generated in-house through vendors with "Safe disposal practices" • Virtualization and consolidation of Servers and Storage resulting in reduced server footprints, greater use of the IT equipment capabilities and executing more workloads in less space and less energy b. Technology Absorption - Your Company absorbs appropriate technology advancements in providing the best services to its customers. The following technologies were absorbed in the Indian facility: • Implemented WAN accelerator technology to improve better performance of application development & testing between India ODC and US sites. • Implemented web based centralized monitoring & log management system for the critical IT infrastructure services at Datacenter. • Implemented Information Technology Infrastructure Library (ITIL) based service management tool to capture the IT infrastructure services and support. Imported technology (imported during the last three years reckoned from the beginning of the financial year)- Nil. 30. Foreign Exchange Earnings and Outgo Total Foreign Exchange earned and used Forex Earned: Rs. 7.78 Mn (14-15) & for previous year Rs. 103.96 Mn (13-14) Forex Used: Rs. 1.57 Mn (14-15) & for previous year Rs. 21.49 Mn (13-14) An amount of Rs. 70.86 Mn (Rs. 70.86 Mn) was remitted during the year in foreign currencies on account of payment of two interim dividends for the Financial Year 2014-15 and final dividend for the Financial Year 2013-14. 31. Directors' Responsibility Statement Pursuant to the requirement under Section 134(5) of the Companies Act, 2013, it is hereby confirmed: (a) In the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures; (b) The Directors had selected such accounting policies and applied them consistently and made judgements 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 and loss of the company for that period; (c) The Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of 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 and (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. Acknowledgement Your Directors wish to express their gratitude for the assistance, support and cooperation extended by all investors, clients, vendors, bankers, Regulatory and Government authorities, Reserve Bank of India, Stock Exchanges and business associates for their co- operation, encouragement and continued support extended to the Company. Your Directors also wish to place on record their appreciation for the committed services by all employees of the Company. By Order of the Board D.V. Ravi Director DIN: 00171603 Srinivasan H.R. Managing Director DIN : 00130277 Place : Chennai Date : May 15, 2015 |