Zensar Technologies Ltd Directors Report.

Dear Members,

Your Directors are pleased to present 57th Annual Report together with the Audited Financial Statements for the Financial Year ended March 31,2020.

1. FINANCIAL PERFORMANCE AND STATE OF AFFAIRS

Financial Summary

(INR In Lakhs)

Particulars

Standalone

Consolidated

FY 2019-20 FY 2018-19 FY 2019-20 FY 2018-19
Income from operations 137,030 137,008 418,168 396,633
Miscellaneous Income 9,093 8,499 8,842 9,268
Total Income 146,123 145,507 427,010 405,901
Profit Before Taxation 30,410 33,351 37,579 44,538
Profit After Taxation 23,104 25,800 27,160 31,865
Proposed Dividend - 4,053 - 4,053
Transfer to General Reserves - 12,000 - 12,000

On standalone basis, during FY 2019-20, the Company recorded total income of INR 146,123 Lakhs comprising income from software development and allied services of INR 137,030 Lakhs, and other income of INR 9,093 Lakhs. The Company recorded a net profit of INR 23,104 Lakhs reflecting a decrease of about 10.45% Y-o-Y.

On consolidated basis, the Company has maintained growth with total income of INR 427,010 Lakhs comprising income from Software Development and Allied Services of INR 418,168 Lakhs and other income of INR 8,842 Lakhs. The Consolidated net profit was INR 27,160 Lakhs reflecting decrease of about 14.77% Y-o-Y.

In the preparation of financial statements, no treatment different from that prescribed in Indian Accounting Standards (IND-AS) has been followed.

Dividend

Based on profits during FY 2019-20 and continuing the tradition of rewarding the members, the Company declared dividend(s) as under:

Dividend declared during FY 2019-20 Dividend per share (INR) Total Payout (INR Lakhs)
1. 1st Interim Dividend 1.00 2,253.50
2. 2nd Interim Dividend 1.80 4,056.78

The 2nd Interim Dividend was remitted on March 27, 2020, through the approved electronic mode to those shareholders, whose bank account details were available, constituting about 99% of dividend amount. However, in view of nation-wide lockdown announced by the Government of India to contain the spread of COVID-19 disease, dispatch of physical dividend instruments to balance shareholders, is on hold and the arrangements for payment of the same will be made after the normalcy is restored.

The said dividends were declared in accordance with the Dividend Distribution Policy of the Company, formulated pursuant to SEBI Regulations, which is available on website of the Company at https://www.zensar.com/sites/default/files/investor/policies-reports fillings/dividend destribution policy.pdf

Investor Education and Protection Fund (IEPF)

Pursuant to the Act and IEPF Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, as amended from time to time, during the year under review, the Company has transferred the following dividend(s) and corresponding shares to IEPF, upon completion of period of seven years:

Date of Declaration Type of Dividend Amount of Dividend transferred (INR) No. of shares transferred
July 24, 2012 Final 1,242,832 25,670
January 21,2013 Interim 1,133,668 69,807

The total amount lying in the Unpaid Dividend Account of the Company up to the year under review and the corresponding shares, which are liable to be transferred to the IEPF, as per records of RTA are as follows:

Sr. No. FY to which dividend relates Type of Dividend Amount lying in the Unpaid Dividend Account (INR) (as on March 31,2020) Due date for transfer to IEPF
1. 2019-20 1st Interim 912,106 March 24, 2027
2. 2018-19 Final 1,768,905 October 5, 2026
Interim 1,079,002 March 22, 2026
3. 2017-18 Final 1,665,524 October 7, 2025
Interim 1,180,230 March 20, 2025
4. 2016-17 Final 2,540,685 September 17, 2024
Interim 1,938,085 March 24, 2024
5. 2015-16 2nd Interim 2,420,775 May 13, 2023
1st Interim 1,682,190 March 20, 2023
6. 2014-15 Final 2,098,850 September 12, 2022
Interim 1,562,603 March 20, 2022
7. 2013-14 Final 1,899,882 September 21,2021
Interim 1,333,428 March 22, 2021
8. 2012-13 Final 1,412,640 September 14, 2020

Particulars of Loans, Guarantees and Investments pursuant to Section 186 of the Act

Particulars Amount (INR in Lakhs)
Loan(s) Please refer Note No. 6(d) and 37 of Notes to Financial Statements
Guarantee(s) Please refer Note No. 28 of Notes to Financial Statements
Investment(s) Please refer Note No. 6(a) of Notes to Financial Statements

Related Party Transactions

All related party transactions that were entered into during FY 2019-20, were on arms length basis and in the ordinary course of business. The requisite approval of the Audit Committee is obtained on periodic basis for the transactions, which are repetitive in nature or otherwise. The actual transactions entered into, pursuant to the approval so granted, are placed periodically, before the Audit Committee.

During FY 2019-20, no materially significant related party transactions were entered into by the Company, that may have potential conflict with the interests of Company, at large. The policy on related party transactions formulated by the Company is available on the website of the Company at https://www.zensar. com/sites/default/files/investor/policies-reports-fillings/Policv%20 on%20RPT%20%281%29.PDF.

Further, the Company has not entered in to any material transaction with related parties, during the year under review, which requires reporting in Form AOC-2 in terms of the Act read with Companies (Accounts) Rules, 2014. However, the requisite disclosures under IND-AS form part of Notes to Financial Statements.

Business Update

The information on Companys affairs and related aspects, is provided under Management Discussion and Analysis Report, which has been prepared, inter-aia, in compliance with Regulation 34 of SEBI Regulations and forms part of this report.

Internal Financial Controls

Details in respect of adequacy of internal financial controls with reference to the Financial Statements are stated in Management Discussion and Analysis Report, which forms part of this Report.

Deposits

During the year under review, the Company has not accepted Deposits under Chapter V of the Act.

Change in the Nature of the Business

During the year under review, there was no change in the nature of the business of the Company or its subsidiaries, pursuant to, inter-aia, Section 134 of the Act and Companies (Accounts) Rules, 2014, as amended from time to time.

Material Changes and Commitments, if any, affecting the Financial Position of the Company

There are no material changes and commitments affecting the financial position of the Company which have occurred between the end of the Financial Year on March 31,2020 to which the Financial Statements relate and the date of this report.

Significant and Material Orders passed by the Regulators or Courts or Tribunals impacting the Going Concern Status

There are no significant and material orders passed by the Regulators or Courts or Tribunals impacting the going concern status and Companys operations in future.

Extract of Annual Return

Pursuant to Section 92 of the Act and related rules, the Extract of Annual Return in Form MGT-9 forms part of this report.

Subsidiary Companies

Your Company along with subsidiaries provides digital solutions and technology services globally. As of March 31, 2020, the Company has 24 Subsidiaries as per details set out in Extract of Annual Return, which forms part of this Report.

The highlights of performance of subsidiaries and their contribution to the overall performance of the Company, are included in Form AOC - 1 forming part of Consolidated Financial Statements section in this Annual Report, in accordance with the provisions, inter- alia, of Section 129 of the Act read with Rule 5 of the Companies (Accounts) Rules, 2014.

Policy for determining material subsidiaries framed by the Company, is available on https://www.zensar.com/sites/default/files/investor/ policies-reports-fillings/Policv%20for%20determining%20 material%20subsidiaries%20%281%29.pdf.

2. CORPORATE GOVERNANCE

Formal Annual Evaluation of Board and its Committees

Pursuant to provisions of Section 134 of the Act, and Regulation 17 of the SEBI Regulations, the Nomination and Remuneration Committee has laid down criteria for evaluating Board effectiveness by assessing performance of the Board as a whole, performance of individual Director and permanent Committees of the Board, details of which are available in the Corporate Governance Report.

Further, the Nomination and Remuneration Committee had laid down structure for evaluating Board effectiveness and engaged a third-party agency to conduct Board Effectiveness Survey during the year under review. The survey findings and feedbacks were then considered while conducting the requisite evaluations inter- alia under the provisions of the Act and SEBI Regulations.

Directors Responsibility Statement

The Directors confirm that:

a) in the preparation of the annual accounts for the Financial Year ended March 31, 2020, the applicable accounting standards had been followed and there were no material departures;

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 at the end of the Financial Year as at March 31,2020 and of the profit 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 this Act 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.

Director(s) and KMP(s)

Appointment(s) / Re-appointment(s) Resignation(s)
• H. V. Goenka (DIN: 00026726), Non-Executive Director, retires by rotation and being eligible, offers himself for re-appointment. A resolution seeking Members approval for his re-appointment forms part of the Notice. The Board recommends his re-appointment. • Tanuja Randery (DIN: 08014909) and Sudip Nandy (DIN: 07199187), Non-Executive, Independent Directors, tendered their resignations from the Board of the Company, effective May 31, 2019 and August 7, 2019 respectively.
• The Board appointed Radha Rajappa (DIN: 08530439), as an Additional Director, in the capacity of Independent Director, with effect from August 6, 2019 up to August 5, 2024, subject to approval of Members at the 57th Annual General Meeting. The Board is of the opinion that Radha Rajappa holds all the requisite qualities including integrity, expertise, experience and independence to be on the Board of your Company. A resolution seeking Members approval for her appointment, forms part of the Notice. • Both the Directors conveyed that, considering professional commitments, they were unable to devote sufficient time, required of an Independent Director of the Company and therefore willingly tendered the resignation. They further confirmed that there was no other material reason, for their resignation.
• A brief resume of the Director(s) proposed to be appointed at the 57th Annual General Meeting along with, nature of expertise in specific functional areas, names of companies in which they hold directorship(s), membership(s) of the Boards Committees, shareholding in the Company and relationships with the directors inter-se, forms part of the Notice.

During the year under review, there were no change(s) in the Key Managerial Personnel(s) of the Company.

Number of Meetings of the Board

During the year under review, 5 (Five) meetings of the Board were held, details of which are set out in the Corporate Governance Report which forms part of this report.

Board Committees

Detailed composition of the following permanent Committees of the Board, number of meetings held during the year under review and other related details, are set out in the Corporate Governance Report which forms part of this report:

The Audit Committee stood reconstituted on May 1, 2019, with the induction of Arvind Agrawal as a member thereof.

With the resignation of Sudip Nandy effective August 7, 2019, the Audit Committee, Nomination and Remuneration Committee and Risk Management Committee stood reconstituted to that extent, at the meeting of Board of Directors, dated August 6, 2019. The Risk Management Committee was also reconstituted by induction of Arvind Agrawal as a member of the said Committee.

Details of terms of reference of the Committees, membership(s) and attendance of members are provided in the Corporate Governance Report. There had been no instances during FY 2019-20 where the Board had not accepted any recommendation of any of the Committees of the Board.

Statement on Declaration of Independent Directors

The Company has received Declaration of Independence from the Independent Directors inter-alia, pursuant to Section 149 of the Act and under SEBI Regulations, confirming and certifying that they have complied with all the requirements of being an Independent Director of the Company, as on the date. The said certificate(s) were taken on record by the Board, at its meeting held on May 14, 2020, after due assessment of the veracity of the same.

Pecuniary Relationship or Transactions of Non-Executive Directors and Disclosures about Remuneration of Directors

All pecuniary relationship or transactions of Non-Executive Directors vis-a-vis the Company, along with criteria for such payments and disclosures on the remuneration of the Directors along with their shareholding are disclosed in Corporate Governance Report which forms part of this Report and/or available on the website of the Company, pursuant to relevant regulations.

InterSe Relationships between the Directors

There are no relationships between the Directors inter-se, except between Anant Goenka and H. V Goenka. Anant Goenka, NonExecutive, Non-Independent Director, is son of H. V. Goenka, Chairman.

Risk Management

A detailed report on Risk Management is included in Management Discussion and Analysis Report, which forms part of this report.

Secretarial Standards

Your Company complies with the applicable mandatory Secretarial Standards.

3. HUMAN RESOURCE MANAGEMENT

Disclosure under Sexual Harassment of Women at the Workplace (Prevention, Prohibition and Redressal) Act, 2013

The Company has in place an Internal Complaints Committee and an Anti-Sexual Harassment Policy, inter-alia, in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and rules made thereunder to redress all the sexual harassment complaints reported by women employee(s).

The following is the summary of complaints received and disposed- off during the year under review:

Number of complaints received 4
Number of complaints disposed off 4
Number of complaints pending 0

Employees Stock Option Plan

The Company currently has three Employees Stock Option Schemes in force, namely, “2002 Employees Stock Option Scheme” (2002 ESOS), “2006 Employees Stock Option Scheme” (2006 ESOS) and Employee Performance Award Unit Plan, 2016 (2016 EPAP) and these schemes are being implemented, as per SEBI Regulations, in this regard.

In FY 2019-20, 22,000 equity shares and 210,050 equity shares were allotted under 2002 ESOS and 2006 ESOS, respectively. No equity shares were allotted under 2016 EPAP

As required under SEBI (Share Based Employee Benefits) Regulations, 2014, the Auditors certificate on the implementation of share-based schemes in accordance with these regulations will be made available at the AGM.

The disclosure pursuant to SEBI (Share Based Employee Benefits) Regulations, 2014 is available on the website of the Company at https://www.zensar.com/investor/financials.

Information pursuant to Section 197 of the Act, read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014

1. The ratio of the remuneration of each director to the median remuneration of the employees of the Company excluding Managing Director for the Financial Year. Please refer Annexure to this Report for details.
2. Percentage increase in remuneration of each director, Chief Financial Officer, Chief Executive Officer, Company Secretary or Manager, if any, in the Financial Year.
3. The percentage increase in the median remuneration of employees. The percentage increase in the median remuneration in FY 2019-20 of employees on India Payroll was 5.05%.
4. The number of permanent employees on the rolls of Company (in India). 6,943
5. 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 Average percentage increase made in the salaries of the employees other than the managerial personnel in the last Financial Year is 5.96% for India based associates.
out if there are any exceptional circumstances for increase in the managerial remuneration. Considering nil increment employees, average percentile increase is 45.7 percentile.

The remuneration to employees is as per the remuneration policy of the Company. The percentage increase in the median remuneration of employees has been calculated after excluding Managing Directors remuneration. Sandeep Kishore, Managing Director and Chief Executive Officer, has not received any directors commission during the year from the Company nor from any of its subsidiary(ies). Particulars of employees pursuant to Section 197 of the Act, read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are annexed with this report.

4. REPORTS AND POLICIES

Corporate Governance

A detailed report on the same for FY 2019-20 along with the practicing Company Secretarys certification thereon, is provided in the corporate governance section of this report.

Management Discussion and Analysis

A detailed Management Discussion and Analysis Report is annexed to this report.

Business Responsibility Report

As stipulated under the SEBI Regulations, the Business Responsibility Report under Regulation 34(2)(f) forms part of this report and annexed herewith.

Nomination and Remuneration Policy

The Company has a Nomination and Remuneration Policy (Policy) on nomination and remuneration of Directors, Key Managerial Personnel (KMP), Senior Management Personnel (SMP) and other employees, in terms of provisions of the Act and SEBI Regulations, as amended from time to time.

The salient features of the Policy, are:

1. appointment and remuneration of Directors, KMP and SMP

2. determination of qualifications, positive attributes and independence for appointment of a Director (Executive/ Non- Executive/Independent) and recommendation to the Board matters relating to the remuneration for the Directors, KMP and SMP

3. formulating the criteria for performance evaluation of all Directors.

4. Board Diversity

The said Policy is available on the website of Company at https://www.zensar. com/sites/default/files/investor/policies-reports- fillings/NRC%20policv%20%281%29.pdf

Vigil Mechanism/Whistle Blower Policy

Pursuant to the Section 177(9) of the Act and Regulation 22 of SEBI Regulations, the Company has established a Vigil Mechanism/ Whistle Blower Policy for Directors and employees to report their genuine concerns. The Policy provides for Directors and employees to report concerns about unethical behavior, actual or suspected fraud or violation of Companys Code of Governance and Ethics. The policy is available on the website of the Company at https:// www.zensar.com/sites/default/files/investor/policies- reports- fil linas/Whistle-Blower-Policy. pdf

The Company has in place robust measures to safeguard whistle blowers against victimisation. Directors and employees are duly sensitised about mechanisms and guidelines for direct access to the Chairman of the Audit Committee, in appropriate cases.

Further, during FY 2019-20, no personnel has been denied access to the Audit Committee.

5. AUDITORS AND AUDIT REPORTS

Statutory Auditors

M/s. Deloitte Haskins and Sells LLP, the Statutory Auditors of the Company, has been appointed to conduct the audit of the Financial Statements of the Company from FY 2017-18 till FY 2021-22.

Pursuant to the Companies (Amendment) Act, 2017 which came into force on May 7, 2018, appointment of Statutory Auditors is not subject to annual ratification at the Annual General Meeting and accordingly not being placed at the 57th Annual General Meeting for approval of Members.

Further, there was no instance of fraud reported by the Statutory Auditors during FY 2019-20, as required under Section 134 of the Act and rules thereunder.

Secretarial Auditors

Pursuant to the provisions of Section 204 of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board had appointed M/s. SVD & Associates, Company Secretaries in Practice, to undertake the Secretarial Audit of the Company. The Report of the Secretarial Audit in Form MR - 3 is annexed herewith.

Further, pursuant to SEBI circular CIR/CFD/CMD1/27/2019 dated February 8, 2019, the Annual Secretarial Compliance Report submitted by M/s SVD & Associates, also forms part of the Boards Report. The said report(s) does not contain any qualification, reservation or adverse remarks.

The appointment of M/s SVD & Associates, as Secretarial Auditors, continues for FY 2020-21.

Further, during FY 2019-20 and two previous Financial Years, no penalties, strictures were imposed on the Company by stock exchange(s) or SEBI or any statutory authority, on any matter related to capital markets.

Internal Auditors

The Board had appointed Ernst & Young LLP, Pune as Internal Auditors for FY 2019-20 under Section 138 of the Act. The appointment of Ernst & Young LLP, Pune as Internal Auditors continues for FY 2020-21.

Explanations on Qualification, Reservation or Adverse Remark or Disclaimer made by Auditors

There are no qualifications, reservations or adverse remarks made by the Statutory Auditors/Secretarial Auditors in their respective Reports.

6. CORPORATE SOCIAL RESPONSIBILITY (CSR)

The CSR activities at the Company were undertaken through RPG Foundation, which in turn is committed towards undertaking CSR activities across all group companies of RPG. The composition of the CSR Committee of the Company, in accordance with Section 135 of the Act, is covered under the Corporate Governance Report which forms part of this report. A detailed report on CSR activities along with CSR Policy is attached to this report.

The CSR Policy of the Company is available at: https://www.zensar. com/sites/defau lt/fi les/investor/policies-reports-fillings/CSR%20 Policy Final.pdf

7. CONSERVATION OF ENERGY,

TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The provisions relating to disclosure of details regarding energy consumption, both total and per unit of production, are not applicable as the Company is engaged in the services sector and provides IT and IT related services.

Particulars prescribed under Section 134(3)(m) of the Act, read with the Companies (Accounts) Rules, 2014 in respect of Technology Absorption, Foreign Exchange earnings and outgo as on March 31, 2020 and R & D expenditure during the year are set out as Annexure to this report.

8. OTHER DISCLOSURES

i. The Company is not required to maintain cost records, as specified by the Central Government under section 148 of the Act.

ii. Key initiatives with respect to stakeholder relationship, customer relationship, environment, sustainability, health and safety have been disclosed under respective heads of Corporate Governance Report and Business Responsibility Report.

9. ACKNOWLEDGEMENTS

The Board places on record its appreciation for the contribution of associates at all levels, customers, business and technology partners, vendors, investors, Government Authorities and all other stakeholders towards the performance of the Company during the year under review.

For and on behalf of the Board of Directors
Place: Mumbai H. V. Goenka
Dated: July 23, 2020 Chairman