zensar technologies ltd Directors report

<dhhead>BOARD’S REPORT</dhhead>

Dear Members,

Your Directors are pleased to present the 60 th Integrated Annual Report of the Company together with the Audited Financial Statements for the Financial Year ended March 31, 2023.

1. FINANCIAL PERFORMANCE AND STATE OF AFFAIRS

(INR Million)

Particulars	Standalone		Consolidated
	2022_23	2021_22	2022_23	2021_22
Revenue from operations	18,234	16,289	48,482	42,438
Other Income (Net)	1,517	1,340	1,028	1,377
Total Income	19,751	17,629	49,510	43,815
Profit before Tax	4,034	4,306	4,441	5,741
Profit after Tax (after Minority Interest)	3,084	3,211	3,276	4,163

 

On a standalone basis, during FY 2022-23, the Company recorded total income of INR 19,751 million comprising income from Software Development and Allied services of INR 18,234 million and other income of INR million. The Company recorded a net profit of INR 3,084 million reflecting a decrease of about 3.96% Y-o-Y.

On a consolidated basis, the Company recorded total income of INR 49,510 million comprising income from Software Development and Allied Services of INR 48,482 million and other income of INR 1,028 million. Consolidated net profit was INR 3,276 million reflecting decrease of about 21.31% Y-o-Y.

The Financial statements are prepared in accordance with the Indian Accounting Standards (Ind AS).

Dividend

Based on profits during FY 2022-23 and the tradition of rewarding the members, the Company declared an interim dividend of INR 1.50 (75%) per equity share of face value of INR 2 each on the paid-up equity share capital of the Company. The total payout amounted to INR 339.5 million.

The said dividend was declared in accordance with Dividend Distribution Policy of the Company, formulated pursuant to Listing Regulations which is available on website of the Company athttps://zensar.com/about/investors/ investors-relation?result=Policies#Corporate-Governance.

Further, the Board recommends a final dividend of INR 3.50 (175%) per equity share of face value of INR 2 each on the paid-up equity share capital of the Company, for the year under review. The total pay-out will amount to about INR 792.70 million. The payment of dividends shall be made within 30 days from the date of declaration as per the record date, as set out in the AGM Notice. The total dividend for the year including the interim dividend shall be INR 5.00 per equity share of INR 2 each (250%).

1,517

Unclaimed Dividend

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 following dividend(s) and corresponding The share(s) to IEPF, upon completion of period of seven years

Date of Declaration	Type of Dividend	Total Amount of Dividend transferred (INR)	Total No. of shares transferred
July 14, 2015	Final	2,097,186	22,200
January 19, 2016	Interim	1,675,605	37,716

 

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

	FY to		Amount lying in the
Sr. No	which dividend relates	Type of Dividend	Unpaid Dividend Account (INR) (as on March 31, 2023)
1	2022-23	Interim	1,579,828
2	2021-22	Final	2,842,757
		Interim	1,165,595
3	2020-21	Final	1,949,254
		Interim	1,209,566

 

 

	FY to		Amount lying in the
Sr. No	which dividend relates	Type of Dividend	Unpaid Dividend Account (INR) (as on March 31, 2023)
4	2019-20	2nd Interim	2,209,920
		1st Interim	1,085,330
5	2018-19	Final	1,649,745
		Interim	1,033,707
6	2017-18	Final	1,610,777
		Interim	1,141,300
7	2016-17	Final	2,510,984
		Interim	1,929,850
8	2015-16	2nd Interim	2,411,003

 

The data on unpaid/unclaimed dividend and unclaimed monies is available on Company’s at https://www.zensar.com/about/investors/investors-relation#corporate-governance. Members who not yet encashed their unclaimed/unpaid amounts are requested to correspond with Company’s Registrar and Transfer Agents, at the earliest.

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

Particulars
Loan(s)	Company has not given any loan to any parties
Guarantee(s)	Please refer Note No. 29 of Notes Standalone Financial Statements
Investment(s)	Please refer Note No. 6(a) of Notes to Standalone Financial Statements

 

Related Party Transactions

All related party transactions that were entered during FY 2022-23, were on arm’s length basis and in the ordinary course of business.

Requisite approval(s) 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 periodically, before the Audit Committee.

The policy on related party transactions is available on the website of the Company https://www.zensar. at com/sites/default/files/investor/policies-reports-fillings/ Policy%20 on%20RPT%20%281%29.PDF.

During FY 2022-23, no materially significant related transactions that may have potential conflict with the interests of Company at large were entered into by the Company.

Further, the Company has not entered into 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 Company’s affairs and related aspects, is provided under Management Discussion and Analysis Report, which has been prepared,inter-alia, in compliance with Regulation 34 of Listing 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, other which forms part of this Report.

Transfer to Reserves

No amount is proposed to be transferred to General Reserve on declaration of dividend(s).

Deposits

During the year under review, the Company has not accepted any 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-alia, 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, 2023, to which the Financial Statements relate and the date of this report.

Signi_icant 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 Company’s operations in future.

Annual Return

Pursuant to Section 92 of the Act and related rules, as amended from time to time, a copy of Annual Return for the Financial Year ended March 31, 2023, is available on website of the Company at the following weblink: https://www.zensar.com/about/investors/investors-relation#corporate-governance.

Further, final Annual Return for the Financial Year ended March 31, 2023, once filed, shall also be made available on the above-mentioned weblink.

Subsidiary Companies

Your Company along with subsidiaries provides digital solutions and technology services globally. As of March 31, 2023, the Company had 14 Subsidiaries as per details to be set out in Annual Return.

The highlights of performance of subsidiaries their contribution to the overall performance of Company/Group, are included in Form AOC 1 forming part of Consolidated Financial Statements section this Integrated 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. Further details of developments among subsidiaries during the year under review are set out in the Notes to Consolidated Financial Statements.

Policy for determining material subsidiaries framed by the Company, is available on https://zensar.com/about/investors/ investors-relation?result=Policies#Corporate-Governance.

2. CORPORATE GOVERNANCE

Formal Annual Evaluation of Board and its Committees

The details pertaining to annual evaluation of and its Committees are provided under the Corporate Governance report forming part of this Board’s Report.

Directors’ Responsibility Statement

To the best of their knowledge and belief and according to the information and explanations obtained by them, your directors make the following statements in terms of Section 134(3)(c) of the Companies Act, 2013: a) in prepar ation of the annual accounts for Financial Year ended March 31, 2023, the applicable accounting standards had been followed and there was 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, 2023, and of the profit of the Company for that period; c) the Director s had taken proper and care for the maintenance of adequate accounting records in accordance with the provisions of Act for safeguarding the assets of the 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 and effectively. the

Director(s) and Key Managerial Personnel KMP(s) in Details pertaining to change in Director(s) and Managerial Personnel(s) of the Company and subsequent change in the Committee(s) of the Board, thereof, during the year under review, are set out in the Corporate Governance Report.

Number of Meetings of the Board

During the year under review, Nine (9) meetings of the Board were held, details of which are set out in the Corporate Governance Report herein.

Board Committees

Detailed composition of Committee(s) of the Board, number of meetings held during the year under review and other related details including brief details of terms of reference of the Committees, membership(s) and attendance of members, are set out in the Corporate Governance Report.

There were no instances during FY 2022-23 where the Board had not accepted any recommendation of any of the Committees of the Board.

Statement on Declaration of Independent Directors the The Company has received necessary declaration of Independence from Independent Directors inter-alia, pursuant to Section 149(6) and 149(7) of the Act and under Regulation 16(1)(b) and Regulation 25 of the Listing Regulations, confirming and certifying that: they have complied with all the requirements of being an Independent Director of the Company, as on date. The said certificate(s) were taken on record by the Board, at its meetings held on May 11, 2023, respectively, after due assessment of veracity of the same.

they possess the requisite expertise and experience and are persons of high integrity and repute.

they ha ve registered themselves with Independent Directors’ Database maintained by IICA.

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

AllpecuniaryrelationshiportransactionsofNon-Executive Directors vis-?-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 and notes to Financial Statements and also available on the website of Company, pursuant to relevant regulations.

Inter-Se Relationships between the Directors

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

Risk Management

In terms of the provisions of Section 134 of the Companies Act, 2013, a detailed report on Risk Management included in Management Discussion and Analysis Report, which forms part of this report.

Secretarial Standards

The 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 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). Company has zero tolerance for sexual harassment at workplace.

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

the Number of complaints received	1
Number of complaints disposed off	1
Number of complaints pending	0

 

Employees Stock Option Plan

V. The Company currently has two Employees Stock Option Schemes in force, namely, "2006 Employees Stock Option Plan" (2006 ESOP) and Employee Performance Award Unit Plan, 2016 (2016 EPAP) and these schemes are being implemented, as per Listing Regulations, in this regard. Presently there are no outstanding/active options under 2002" Employees Stock Option Plan" (2002 ESOP). Nomination and Remuneration Committee vide its meeting held on January 20, 2022, resolved that is no further options shall be granted under 2002 ESOP and

2 006 ESOP.

In FY 2022-23, 2,500 equity shares, 67,790 equity shares and 1,93,597 equity shares were allotted under 2002 ESOP, 2006 ESOP and EPAP 2016, respectively.

The aforesaid ESOP Plans/Scheme(s) are in compliance with SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021, as amended from time to time. There has not been any material change in the ESOP plan(s) during the year.

The disclosure pursuant to SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 is available on the website of the Company at https:// www.zensar.com/investor/financials.

Particular of Employees

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 A to this Report for details.
2.	Percentage increase in remuneration of each director, Financial Officer, Chief Executive Officer, Company Secretary Manager, if any, in the Financial Year.	Chief or
3.	The percentage increase in the median remuneration of employees.	The percentage increase in the median remuneration in FY 2022-23 of employees on India Payroll was 21%.

 

 

4.

The number of permanent employees on the rolls of Company (in India)

7,797 (as of March 31, 2023)

 

 

5.

Average percentile increase already made in the salaries of employee* 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.

Average percentage* increase made in the salaries of the employees other than the managerial personnel in the last Financial Year is 11.28% for India based associates.

 

* Since percentile refers to a score below which a given percentage of scores in its frequency distribution falls, for an accurate representation of above calculation sought, we refer to percentage increase at an average level of salaries for the employees concerned.

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 Director’s remuneration.

The statement containing names of top ten employees in terms of remuneration drawn and the of employees as required under Section 197(12) the Act read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Personnel) Rules, 2014, is provided in a separate Annexure A forming part of this report. None of the employees listed in the said Annexure are related to any Director(s) of the Company or hold 2% or more of the paid-up equity share capital of the Company. Further, the report and the accounts are being sent to the Members excluding the aforesaid Annexure. In terms of Section 136 of the Act, the said annexure is open for inspection and any Member interested in obtaining a copy of the same may write to the Company.

4. REPORTS AND POLICIES

Integrated Annual Report

The Company has continued its practice of developing the Integrated Annual Report, based on International Integrated Reporting Council’s (‘IIRC’) Framework, which encourages organisations to communicate their value creation over time. The Company has embarked on this journey to communicate its integrated thinking and how its business creates sustained value for stakeholders. The third Integrated Report also encompasses aspects like strategy, performance, governance frameworks, value creation based on various forms of capital viz. financial capital, manufactured capital, intellectual capital, natural capital, social and relationship capital and human capital.

Corporate Governance

A detailed report on the same for FY 2022-23 with the practicing Company Secretary’s 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 and Sustainability Report of As stipulated under the Listing Regulations, Business responsibility and sustainability reporting (BRSR) on initiatives taken from an environmental, social and governance perspective, under Regulation 34(2)(f) is annexed to this report.

Nomination and Remuneration Policy

The Company has a Nomination and Remuneration Policy (Policy) for nomination and remuneration of Directors, Key Managerial Personnel (KMP), Senior Management Personnel (SMP) and other employees, pursuant to the Act and Listing 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 about 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://zensar.com/about/investors/investors-relation? re sult=Policies#Corporate-Governance

Vigil Mechanism/Whistle Blower Policy

Pursuant to the Section 177(9) of the Act and Regulation 22 of Listing 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 beha vior, actual or suspected fraud or violation of Company’s Code of Governance and Ethics. The policy is available on the website of the Company https://zensar.com/about/investors/investors-relation?re sult=Policies#Corporate-Governance

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

Further, during FY 2022-23, no personnel has denied access to the Audit Committee.

5. AUDITORS AND AUDIT REPORTS

Statutory Auditors

M/s. S R B C & CO LLP (ICAI Firm Registration No. 324982E/E300003), Statutory Auditors of the Company, has been appointed to conduct Audit of Statements of the Company from FY 2022- FY 2026-27.

Pursuant to the Companies (Amendment) Act, which came into force on May7, 2018, appointment of Statutory Auditors is not subject to annual ratification at the Annual General Meeting and accordingly not being placed at the 60 th Annual General Meeting for approval of members.

Further, there was no instance of fraud reported by the Statutory Auditors during FY 2022-23, as required under Section 134 of the Act and rules thereunder.

Secretarial Auditors and Secretarial Audit Report

Pursuant to the provisions of Section 204 of the and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board appointed M/s. SVD & Associates, Company Secretaries in practice, to undertake the Secretarial Audit of Company, for FY 2022-23. The Report of Audit in Form MR-3 is annexed herewith. The response of the Board on the observations made by Secretarial Auditor is as follow:

The Company was unable to _ile the e-Form DIR_12 for Resignation of Chief Executive Of_icer (CEO) and Managing Director w.e.f December 31, 2022, e-Form DIR_12 for appointment of new Chief Executive Of_icer (CEO) and Managing Director w.e.f. January 23, 2023 and e-Form MR_1 and MR_2 for appointment of new Managing Director till the date of issue of this report due to continuing technical glitches on the website of Ministry of Corporate Affairs.

The appointment of M/s. SVD & Associates, as Secretarial Auditors, continues for FY 2023-24.

Further, during FY 2022-23 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 and

The Board had appointed KPMG Assurance Consulting Services LLP as Internal Auditors for FY 2022-23 under Section 138 of the Act. Their appointment continues for FY 2023-24. been Explanations on Quali_ication, Reservation or Adverse Remark or Disclaimer made by Auditors

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

6. CORPORATE SOCIAL RESPONSIBILITY

Financial (CSR) 23 till

The CSR activities by the Company were undertaken through RPG Foundation, which is committed towards 2017 undertaking CSR activities across all group companies of the RPG group. The composition of the Sustainability and Corporate Social Responsibility 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 in line with the Companies (Corporate Social Responsibility Policy) Rules, 2014, as amended from time to time, is attached as Annexure F to this report.

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

the The provisions relating to disclosure of 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, 2023, and R&D expenditure during the Financial Year are set out as Annexure G to this report. Further details are provided under Capital sections respectively, which form part of this Integrated Annual Report.

8. OTHER DISCLOSURES

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

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

iii. No application has been made under the Insolvency and Bankruptcy Code; hence the requirement disclose the details of application made or proceeding pending under the Insolvency Bankruptcy Code, 2016 (31 of 2016) during Financial Year along with their status as at the end of the Financial Year is not applicable.

iv. The requirement to disclose the details of difference between amount of the valuation done at the time of onetime settlement and the valuation done while taking loan from the Banks or Financial Institutions along with the reasons thereof, is not applicable.

9. CAUTIONARY STATEMENT

cost The statements made in this Report and Management Discussion and Analysis Report relating to the Company’s objectives, projections, outlook, expectations and others may be "forward looking statements" within the meaning stakeholder of applicable laws and regulations. Actual results may differ from expectations those expressed or implied. Some factors could make difference to the Company’s operations that may be, due to change in government policies, global market conditions, foreign exchange fluctuations, natural disasters etc.

to10. ACKNOWLEDGEMENTS AND

any

and APPRECIATIONS

the The Directors place on record their appreciation for the continued co-operation extended by all stakeholders including various departments of Central and State Government, Shareholders, Investors, Bankers, Financial Institutions, Customers, Dealers and Suppliers.

The Board also places on record its gratitude appreciation of committed services of executives and employees of the Company.

For and on behalf of the Board of Directors

Place: Mumbai	H. V. Goenka
Dated: May 11, 2023	Chairman

 

Note: All the Annexures referred in the Board’s Report form an integral part of the same, unless otherwise stated. The entire Integrated Annual Report along with the Notice convening the AGM is to be read together.