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Cyient Ltd.

BSE: 532175 Sector: IT
NSE: CYIENT ISIN Code: INE136B01020
BSE 00:00 | 24 Apr 2020 Cyient Ltd
NSE 05:30 | 01 Jan 1970 Cyient Ltd

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OPEN 215.65
PREVIOUS CLOSE 214.90
VOLUME 20080
52-Week high 635.00
52-Week low 205.00
P/E 6.07
Mkt Cap.(Rs cr) 2,338
Buy Price 210.10
Buy Qty 10.00
Sell Price 212.60
Sell Qty 45.00
OPEN 215.65
CLOSE 214.90
VOLUME 20080
52-Week high 635.00
52-Week low 205.00
P/E 6.07
Mkt Cap.(Rs cr) 2,338
Buy Price 210.10
Buy Qty 10.00
Sell Price 212.60
Sell Qty 45.00

Cyient Ltd. (CYIENT) - Director Report


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Company director report

Dear Shareholders

Your directors have pleasure in presenting their 27th Report on thebusiness and operations of the company for the financial year ended 31st March 2018.

1. FINANCIAL HIGHLIGHTS

Particulars

Consolidated

Standalone

2017-18

2016-17

2017-18

2016-17

Total Income

40694

36997

16320

13736

EBIDTA

6873

5704

5671

3617

Finance Cost

204

172

6

6

Depreciation

1052

953

508

540

Exceptional item

50

261

(103)

201

Profit before Tax

5567

4318

5260

2870

Current Tax

1493

927

1285

601

Deferred Tax

(113)

118

(43)

(100)

Share of(loss)/profitin associate company

(160)

118

-

-

JointVenture

4

5

-

-

Non-controlling Interest

(23)

(42)

-

-

Profit after Tax

4054

3438

4018

2369

Basic Earnings per share ( )

36.00

30.55

35.69

21.05

Diluted Earnings per share ( )

35.85

30.53

35.54

21.03

Special Dividend per share ( )

-

2.50

-

2.50

Interim dividend paid ('/Share)

9.00

3.00

9.00

3.00

Final dividend recommended ('/Share)

4.00

5.00

4.00

5.00

Paid up Equity Share Capital

563

563

563

563

Reserves

22876

20610

20051

18259

2. STATE OF AFFAIRS/COMPANY'S PERFORMANCE

On a consolidated basis the revenue from operations for FY 2018 at39175 million was higher by ' 3110 million over the last year. The profit for the yearattributable to shareholders and non-controlling interests was ' 4031 million recordingan increase of ' 635 million over FY 2017. The profit after tax attributable toshareholders of the company was ' 4054 million 17.92% higher than that of the previousyear ' 3438 million.

On a stand-alone basis the revenue from operations for FY 2018 at'14397 million was higher by 24.07% over the last year ' 12920 million in FY 2017. Theprofitforthe year was ' 4018 million registering a growth of 69.61% over the PAT of '2369 million in FY 2017.

3. DIVIDEND

Your directors have recommended a final dividend of ' 4.00 per share(80%) on par value of 5.00 per share. During the year the Companydeclared two InterimDividends of 5.00 per equity share [100%] and 4.00

[80%]onparvalueof 5.00 per share on 12October2017and 18 January 2018respectively. Total dividend (including dividend distribution tax) as a percentage ofprofit after tax were 47.21% as compared to 60% in the previous year. In terms ofregulation 43A of SEBI (Listing Obligations & Disclosure requirements) Regulations2015 the company has formulated and published dividend policy on the corporate website (www.cyient.com/investors/corporate-governance)

4. TRANSFER TO RESERVES

Your company has not transferred any amount to reserves during the yearunder review and proposes to retain the entire amount of 4018 million in its Profit andLoss Account.

5. LIQUIDITY

Your company continues to be debt-free and maintains sufficient cashreserves to meet its operations and strategic objectives. As at 31 March 2018 YourCompany had liquid assets of 8396 million as against 7464 million at the previous yearend. These funds

have been invested in short term deposits and mutual funds withscheduled banks financial institutions and debt based mutual funds.

6. PUBLIC DEPOSITS

Your company has not accepted any deposits falling within the meaningof Section 73 of the Companies Act 2013 read with the Companies (Acceptance of Deposits)Rules 2014 during the financial yearunder review.

7. SHARE CAPITAL

Your company has allotted 29662 equity shares of ' 5.00 each to theassociates of the company and its subsidiaries upon exercise of an equal number of stockoptions vested in them pursuant to the extant Stock Option Schemes of the company. In viewof the above allotments the outstanding shares of the company increased from 112566340equity shares of 5.00 each to 112596002 equityshares of 5.00 each.

8. SUBSIDIARIES Cyient Inc. (CI)

Headquartered in East Hartford Connecticut Cyient Inc. providesengineering manufacturing geospatial network and operations management services tocustomers in North America. Cyient Inc. has over 30 offices across the US and Canada withover 1800 associates sourced primarily from within country.

CI caters to a broad spectrum of clients from Fortune 500 companies tosmall organizations and local state and federal government agencies. CI generates annualrevenues of over US $260M working across 40 states and 6 Canadian provinces. Cl leveragesboth the local and global delivery capability of Cyient while executing projects acrossNorth America. CI is also principal unit for executing the acquisition strategy in NorthAmerica.

During the year Cl acquired B&F Design Services a Connecticutbased company engaged in the design and manufacturing of tools which will focus onmachining development hardware for the aerospace and defense industry .

Cyient Europe Limited (CEL)

Incorporated in London as Dataview Solutions Limited in 1992 it becamea part of the Infotech Group in1999.

Its services are designed to cater to leading Tier-1 and Tier-2 Telcosgas electric and water utility companies public sector agencies and commercialbusinesses. In addition it provides world-class engineering services as well as big dataand analytics capabilities to rail aerospace and manufacturing companies. The companyenjoys long-term relationships with several of its partners and customers and has built astrong foundation of trust and reliability.

Cyient Europe Ltd has 3 wholly owned subsidiaries. The oldest CyientBenelux BV based in Breda the Netherlands provides support to our customers and businessin the Benelux region while Cyient Schweiz GmbH based in Bern provides support and localpresence for our long standing engagement with Swisscom. Cyient SRO based

on Prague in the Czech Republic is the 3rd and newest subsidiary havingbeen established in September 2015. Its primary focus is to provide engineering servicesto our rail and aerospace customers across Europe and has now grown to a team of over 120associates.

The November 2016 acquisition of BlomAerofilms Ltd the UK subsidiaryof NRC Group from Norway is progressing well. The business bought a team withcomplementary skills of around 40 associates mostly based out of their offices inCheddar Somerset who have now been fully integrated into Cyient's European operations.

The company is an ISO 9001 and ISO 27001 certified organization.Leveraging the global execution capability of its parent organization it maintains clientrelationships and ensures efficient project management across Europe.

Cyient GmbH (CG)

Cyient GmbH offers world-class engineering services as well as big dataand analytics capabilities to rail aerospace and manufacturing companies in Germany andneighbouring countries such as Austria France and Sweden. It was established as AdvancedGraphics Software (AGS) in Leonberg Germany in 1992 - a 3D CAD/CAM e-solution softwareand application provider.

After becoming a part of Cyient Group in 2000 it extended its forayinto other service areas like GIS and IT solutions. Owing to the large pool ofengineering GIS IT resources CG provides high-quality services and solutions to theclients with offshore cost advantage and onsite project management. Growth in recentmonths has included an expansion of our Telecom Plan and Design services in Germany aswell as of our semi-conductor design and verification business. We will be moving ouroffices from Leonberg to Stuttgart to reflect this growth and expansion.

Cyient KK (CKK)

Established in 2008 in Central Tokyo CKK is a leading engineeringservice provider in Japan. CKK provides end-to-end engineering services and solutions tomanufacturing industries.

CKK leverages the global delivery capability of the parentorganisation while maintaining client relationships and managing projects locally.

Cyient Australia Pty Limited (CAPL)

Established in 2014 Cyient Australia provides engineering design andnetwork operations services to diverse industries to its Asia Pacific customers. CAPLsupports its customers especially Telecommunication Utilities and Rail transportationfrom global delivery centres in Sydney and Melbourne with operations Australia wide andacross the APAC region. CAPL has over 600 associates operating from our global deliverycentres and customers across Australia. Melbourne is the APAC headquarter.

Cyient Singapore Pte Limited (CSPL)

Established in 2015 Cyient Singapore is the South East Asiaheadquarters. CSPL provides services and

solutions to diverse industries such as aerospace telecommunicationsutilities and rail transportation. CSPL has close to 100 engineers supporting itscustomers from the engineering centre in Singapore. CSPL has a strong customer base in theregion and this entity becomes very important for the future growth in the region.

Cyient Engineering (Beijing) Limited (CEBL)

Cyient established its presence by setting up a subsidiary in Beijingin 2017. CEBL sees China as having long term market not only to support its globalcustomers in China but also to capture huge potential that the China market brings to itsfuture growth. Particular focus is on semiconductor manufacturing and energy markets.

Cyient Israel India Limited (CIIL)

During FY17 Cyient established its local presence in Israel to engagemore closely with Israeli Defense OEMs who are significant clients for the company'sDesign- Led Manufacturing (DLM) business. Cyient has invested in local businessdevelopment and consulting resources to strengthen its focus on this important market thathas significant long-term potential particularly around Indian Defence offsetsopportunities. Cyient additionally engaged in an Israeli start-up accelerator programmethat gives the company access to partnerships around innovative technology for militarydefense and homeland security applications.

Cyient DLM Private Limited (CDLMPL)

Cyient acquired Cyient DLM Pvt Ltd (erstwhile Rangsons ElectronicsPrivate Limited) in 2014. This is towards Cyient's vision to provide a complete productlife cycle solution (Design Led Manufacturing (DLM)) to our customers as part of S3strategy. Today CDLMPL is recognised as a market leader in High-Mix High- Tech Electronic& Mechanical Manufacturing Services in Aerospace & Defense Rail TransportationMedical Technology Telecom & Industrial business segments. CDLMPL possesses andmaintains quality certifications that enable it to design and manufacture products toclients in these industry verticals.

CDLMPL is responsible for seamless transition from the design phase tothe manufacturing phase by arriving at Integrated Product Development Plan (IPDP) with allBU's. In many cases we support our customer in technocommercial points by a set ofseasoned experts to deliver value engineered products derived from a combination ofefficientdesigns sourcing and production processes.

Effective April 01 2017 Techno Tools Precision Engineering PrivateLimited CDLMPL's wholly owned subsidiary has been merged with its holding companyCyient DLM Private Limited pursuant to the order dated April 02 2018from NationalCompany LawTribunal.

Cyient Insights Private Limited (CIPL)

Cyient acquired a majority stake in Invati Insights Private LimitedHyderabad India in October 2014. The company was subsequently renamed Cyient InsightsPrivate Limited.

Cyient Insights enables its customers to derive end to end businessexcellence and derive quantifiable business results through gamut of machine learning anddeep learning capabilities and associated actionable insights. Cyient Insights standsapart from its peers with its capability to acquire manage and analyse vast amount ofdata generated by sensors embedded in machines and devices and the unmatched commitmentto add value to customers with the proven global delivery model. Cyient Insights brings indomain specialists through Cyient's decades of work with verticals such as Aerospace &Defence Heavy Engineering Transportation Medical Telecommunications Utilities Energy& Natural Resources and marries it to its data science capability to execute projects.

Cyient Solutions and Systems Private Limited (CSSPL)

In April 2017 Cyient Solutions and Systems Pvt. Ltd. (CSS) wasestablished to focus exclusively on business in the Indian Defence Sector. CSS underlinesCyient's commitment to the Make in India initiative that reflects the nation's aspirationsfor increased self-reliance in Defence. Cyient has been actively investing in technologyIP design development manufacturing and system integration capabilities to addresscritical technology requirements of the Defence sector.

CSS signed a collaboration agreement with BlueBird Aero Systems Israelto design manufacture and maintain UAV Systems for Indian defence paramilitary andhomeland security agencies. BlueBird's world-class technology combined with Cyient'smanufacturing aftermarket capabilities and local presence offers exceptional value to therapidly expanding market for UAV solutions in India.

Infotech Aerospace Services Inc. (IASI)

Established in 2003 in Puerto Rico Infotech Aerospace Services Inc.provides engineering outsourcing and other professional services to Defense Aerospaceand Power Generation Industries. IASI is an associate company between Cyient and Pratt& Whitney a pioneer in flight technology.

IASI ceased to be an associate pursuant to the disinvestment of 49%stake in the entity with effect from 8 December 2017.

Infotech HAL Limited (IHL)

IHL aims to provide comprehensive solutions involving conceptualdesign re-design and derivates of modules systems and components prototyping and supplyof these through Manufacturing Programme Management. IHL offers design services in thefield of aerospace viz. aero thermo and mechanical design structural stress thermaland rotor dynamic analysis aeronautics computational fluid dynamics combustion studiespreparation of digital mock up testing and analysis control system design developmentand software applications.

IHL is a joint venture between Cyient and Hindustan AeronauticsLimited. IHL delivers engineering as well

as aftermarket engineering and support services i.e. technicalpublications repair design service bulletins testing performance analysis andmaintenance monitoring in the aerospace domain.

IHL is well positioned to undertake work under offset program fromvarious original equipment manufacturers.

A statement showing the contribution of each subsidiary has beenpublished as part of consolidated financial statements. Further pursuant to theprovisions of section 129 (3) of the Act a statement showing the salient features of thefinancial statements of the subsidiaries in Form AOC-1 is published elsewhere in thereport.

9. QUALITY

The company is committed to creating and delivering engineeringservices and solutions that exceed customer expectations and enhance the level of businessprofitability.

The company's quality implementation efforts are all pervasivebeginning with a stated goal.

True to the image as a global player the company has developed areputation for providing its clients with world-class quality; the clients trust thestrength of quality processes that have always assured them of timely defect-freedeliverables. The quality management system (QMS) is a testimony derived and optimizedwith experiences and best practices that are aligned with the internationally renownedquality standards and models like ISO 9001:2015 ISO 27001:2013 AS 9100 D ISO13485:2003 ISO 22163: 2017 (IRIS) TL 9000 R 5.5 ISO 14001:2015 BS-OHSAS 18001-2007 andCMMI-DEV Version 1.3 Level 5. Quality policy and objectives are mentioned elsewhere in theannual report.

10. BUSINESS RESPONSIBILITY REPORT

In pursuance of Regulation 34 of the SEBI (LODR) Regulations 2015 thecompany is publishing the Business Responsibility Statement. The same is enclosed asAnnexure 'A'.

11. CORPORATE SOCIAL RESPONSIBILITY

The company believes in giving back to society in some measure that isproportionate to its success in business. Corporate Social Responsibility (CSR) aims atbalancing the needs of all stakeholders. The company's CSR initiative goes beyond charityand believes that as a responsible company it should take into account its impact onsociety as much as designing tomorrow together. The CSR initiatives are conducted throughCyient Foundation. The CSR Annual Report is enclosed as Annexure 'B'.

12. BOARD OF DIRECTORS & KEY MANAGERIAL PERSONNEL

None of the directors of the company is disqualified under theprovisions of the Companies Act 2013 (Act) or under the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015. All Independent Directors have providedconfirmations as contemplated under section 149(7) of the Act.

Appointments/Re-appointments

Pursuant to the provisions of section 152 of the Act read withapplicable rules and regulations there under Mr. B V R Mohan Reddy (DIN: 00058215)retires by rotation at the ensuing Annual General Meeting (AGM) and offers himself forre-appointment.

Pursuant to the provisions of regulation 36 of the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 and Secretarial Standard 2 onGeneral Meetings issued by ICSI brief particulars of the directors who are proposed to beappointed/ re-appointed are provided as an annexure to the notice convening the AGM.

Mr. Tom Prete and Mr. Harsh Manglik did not offer themselves forreappointment. Your directors appreciate their valuable contribution to the company duringtheir tenure.

Amb. Vinai Thummalapally was appointed as Independent Directoratthe26th AGM held onl3July2017.

Apart from the above there has been no change in the key managerialpersonnel during the year.

13. POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION AND OTHER DETAILS

The Company's policy on directors' appointment and remuneration andother matters provided in section 178(3) of the Act have been disclosed in the corporategovernance report which forms part of this report.

14. NUMBER OF BOARD MEETINGS DURING THE YEAR

During the year 4 meetings of the board were held the details ofwhich form part of the report on corporate governance.

15. BOARD EVALUATION AND ASSESSMENT

Board evaluation processes including in relation to the chairmanindividual directors and committees constitute a powerful and valuable feedback mechanismto improve board effectiveness maximise strengths and highlight areas for furtherdevelopment. In addition to greater board accountability evaluation of board membershelps in:

• More effective board processes

• Better collaboration and communication

• Greater clarity with regard to members' roles andresponsibilities and

• Improved Chairman - Managing Director - Board relations

By focusing on the board as a team and on its overall performance thecompany ensures that communication and overall level of participation and engagementimproves.

In order to facilitate the same the board undertook a formal boardassessment and evaluation process during 2017-18. The board evaluation was performed afterseeking inputs from all the directors and included criteria such as the board compositionand structure

effectiveness of board processes information and functioning asprovided by the Guidance Note on Board Evaluation issued by the Securities and ExchangeBoard oflndia on 5 January 2017.

The Leadership Nomination & Remuneration Committee has overallstewardship for the process. The evaluation process covers the following aspects:

• Peer and self-evaluation of Directors

• Evaluation of the performance and effectiveness of the board

• Evaluation of the performance and effectiveness of BoardCommittees

• Feedback from the Non-Executive Directors to the Chairman and

• Feedback on management support to the Board

The evaluation process elicited responses from the directors in ajudicious manner - ranging from composition and induction of the board to effectivenessand governance. It also sought feedback on board and committee charters strategy riskmanagement and quality of discussion and deliberations at the board. The Lead IndependentDirector provides feedback to the Executive Chairman. The same is discussed and acted uponaccordingly at the board.

16. AUDITORS

Pursuant to the provisions of Section 139 of the Act and the rulesframed there under Deloitte Haskins & Sells Chartered Accountants were appointed asstatutory auditors of the company from the conclusion of the 23rd AGM of the company heldon 17 July 2014 till the conclusion of the 28th AGM to be held in the year 2019 subjectto ratification of their appointment at every AGM. Accordingly requisite resolution formspart of the notice convening the AGM.

17. AUDITORS' REPORT AND SECRETARIAL AUDITORS' REPORT

The auditors' report and secretarial auditors' report do not containany qualifications reservations or adverse remarks.

Report of the secretarial auditor is given as an annexure which formspart of this report.

18. EMPLOYEE STOCK OPTION PLANS

During the year the company had granted options/ RSUs under two ASOPschemes and Restricted Stock Units scheme to the associates of the company and itssubsidiaries in accordance with the Securities and Exchange Board of India (Share BasedEmployee Benefits) Regulations 2014. Disclosure pursuant to the said regulations isenclosed as Annexure 'D'.

19. CONSERVATION OF ENERGY RESEARCH AND DEVELOPMENT TECHNOLOGYABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO

The details are enclosed as Annexure 'E'.

20. MANAGEMENT DISCUSSION & ANALYSIS

Pursuant to the provisions of Regulation 34 read with Schedule V of theSEBI (LODR) Regulations 2015 a report on Management Discussion & Analysis isenclosed as Annexure 'F'.

21. DIRECTORS' RESPONSIBILITY STATEMENT

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

i. In the preparation of the annual accounts the applicable accountingstandards have been followed and there are no material departures;

ii. they have selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company at the end of thefinancial year and of the profitof the companyforthat period;

iii. they have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguardingthe assets of the company and for preventing and detecting fraud and other irregularities;

iv. they have prepared the annual accounts on a going concern basis;

v. they have laid down internal financial controls to be followed bythe company and such internal financial controls are adequate and operating effectively;

vi. they have devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems were adequate and operatingeffectively.

Further there are no qualifications reservations or adverse remarksmade by the Statutory Auditors/ Practising Company Secretary in their respective reports.

22. PARTICULARS OF LOANS GUARANTEES AND INVESTMENTS

The particulars of loans guarantees and investments have beendisclosed in the financial statements.

23. RELATED PARTY TRANSACTIONS

None of the transactions with related parties falls under the scope ofsection 188(1) of the Act. Information on transactions with related parties pursuant tosection 134(3)(h) of the Act read with rule 8(2) of the Companies (Accounts) Rules 2014are given in Form AOC-2 and is enclosed as Annexure 'G'.

24. EXTRACT OF ANNUAL RETURN (MGT 9)

Theextractof theannual return in Form MGT 9 as required under theprovisions of section 92 of the Act is enclosed as Annexure 'H'.

The extract of the annual return of the company is also hosted on thecompany's website at www.cyient.com/investors/financial-information/

25. PARTICULARS OF EMPLOYEES

The information required under Section 197 of the Act read with rule5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014are given below:

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

Executive Directors

Ratio to Median remuneration

B.V.R. Mohan Reddy

129.59

Krishna Bodanapu

165.88

Independent Directors
M.M. Murugappan

1.73

K. Ramachandran

1.73

Som Mittal

1.73

John Paterson

5.18

Andrea Bierce

5.18

Vinai Kumar Thummalapally

5.18

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

Directors ChiefExecutive Officer ChiefFinancial Officerand CompanySecre-

% increase in remuneration in

tary

the financialyear

B. V. R. Mohan Reddy

44.2%

Krishna Bodanapu

52.4%

Ajay Aggarwal

53.3%

Sudheendhra Putty

20.3%

c. The percentage increase in the median remuneration ofemployees inthe financial year: 8%

d. The number of permanent employees on the rolls of Company: 11677

e. The explanation on the relationship between average increase inremuneration and Company performance:

On an average employees received an annual increase of 8% in India.The individual increments varied from 2% to 20% based on individual performance.

Employees outside India received wage increase varying from 1 % to4.50%. The increase in remuneration is in line with the market trends in the respectivecountries. In order to ensure that remuneration reflects company performance theperformance pay is also linked to organization performance apart from an individual'sperformance.

f. Comparison of the remuneration of the key managerial personnelagainst the performance of the Company:

(Amount in ' Million)

Aggregate remuneration of key managerial personnel (KMP) inFY18

49

Revenue

14397

Remuneration of KMPs (as % of revenue)

0.3%

Profit before Tax (PBT)

5260

Remuneration of KMP (as % of PBT)

0.9%

g. Variations in the market capitalisation of the Company priceearnings ratio as at the closing date of the current financial year and previous financialyear:

Particulars

March 31 2018*

March 31 2017

% of change

Market Capitalization (' Million)

78237

52467

49.12%

Price Earnings Ratio

19.47

22.14

-12.07%

*28 March 2018was the last trading dayfor FY 2017-18

h. Percentage increase or decrease in the market quotations of theshares of the Company in comparison to the rate atwhich the Company came outwith the lastpublic offer:

Particulars

March 31 2018

IPO date

IPO Price

Adjusted IPO price by considering CA*

% of change

Market Price (BSE)

688.80

September 25 1997

87.7

7.31

9325%

Market Price (NSE)

694.85

September 30 1998

124.3

10.36

6608%

* Adjusted for 1:1 bonus issue in 2002 and 2010

* Sub divided 1 share of ' 10 into 2 shares of ' 5 in 2006

* One bonus share issue for every 2 shares of ' 5 each in2006

i. Average percentile increase already made in the salaries ofemployees other than the managerial personnel in the last financial year and itscomparison with the percentile increase in the managerial remuneration andjustificationthereof and point out if there are any exceptional circumstances for increase in themanagerial remuneration:

The average annual increase was around 7%. However during the courseof the year the total increase is approximately 7% after accounting for promotions andother event based compensation revisions.

Increase in the managerial remuneration for the year was 49%

j. Comparison of remuneration of the key managerial personnel againstthe performance of the company:

(Amount in ' Million)

Particulars

B.V.R. Mohan Reddy Executive Chairman

Krishna Bodanapu MD & CEO

Ajay Aggarwal Chief Financial Officer

Sudheendhra Putty Company Secretary

Remuneration

75

96

23

3

Revenue

14397

Remuneration as % of revenues

0.52%

0.67%

0.16%

0.02%

Profit before Tax (PBT)

5260

Remuneration (as % of PBT)

1.43%

1.83%

0.44%

0.06%

k. The key parameters for any variable component of remunerationavailed by the directors:

The members of the company vide postal ballot in October 2014 approvedpayment of commission to the non-executive directors within the ceiling ofl% of the netprofits of the companyas computed underthe applicable provisions of the Act. The saidcommission is decided each year by the board of directors based on the recommendations ofLeadership Nomination & Remuneration Committee and distributed amongst thenon-executive directors based on their attendance and contribution at the board andcertain committee meetings as well as the time spent on operational matters other than atmeetings.

l. The ratio of the remuneration of the highest paid director to thatof the employees who are not directors but receive remuneration in excess of the highestpaid director during the year: None.

m. Affirmation thatthe remuneration is as perthe remuneration policy ofthe Company:

The company affirms that the remuneration is as per its remunerationpolicy.

n. The statement containing particulars of employees as required underSection 197(12) of the Act read with Rule 5(2) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 is provided in a separate annexureforming part of this report. Further the report and the accounts are being sent to themembers excluding the aforesaid annexure. In terms of Section 136 of the Act the saidannexure is open for inspection at the Registered Office of the company. Any shareholderinterested in obtaining a copy of the same may write to the Company Secretary.

o. Particulars relating to the Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013:

Your Company has always provided a safe and harassment free workplacefor every individual working in its premises through various policies and practices. Thecompany always endeavours to create and provide an environment that is free fromdiscrimination and harassment including sexual harassment. Your company has been activelyinvolved in ensuring that the associates are aware of the provisions of the POSH Act andrights there under.

During the year the company:

1. Conducted awareness campaigns at all locations in India

2. Held awareness sessions on a quarterly basis at all locations inIndia through specific connect sessions by in-house women leaders and 'floor connect'

3. Enhanced the Internal web portal - 'Dcafe' with videos and animatedvisuals for better understanding of POSH among associates. Approximately 60% of theassociates have accessed the portal

4. Have made POSH MODULE as Mandatory in the digital induction.

5. Registered one case under the POSH Act (At Kakinada location)

Both the cases have been closed within the stipulated time limits an inaccordance with the law

6. Nominated the POSH panel (across India locations) to attend relatedsessions on POSH being conducted by various organizations such as IWN NHRD and CII forbetter understanding of the Act and its requirements

7. Nominated associates to attend women safety sessions (One session aspart of women leadership programme) organized by IWN in March 2017

8. Devised plan of action for financial year 2018.

26. RISK MANAGEMENT

The board of directors has formed a risk management committee toidentify evaluate mitigate and monitor the risk management in the company. The committeeis responsible for reviewing the risk management plan and ensuring its effectiveness. Theaudit committee has additional oversight in the area of financial risks and controls. Acomprehensive enterprise risk management mechanism has been put in place and the same isregularly reviewed.

A more detailed analysis of the risk management in the company ispublished in the management discussion and analysis report published elsewhere in theannual report.

27. CORPORATE GOVERNANCE

The corporate governance framework in the company ensures that we maketimely disclosures and share accurate information regarding the financials andperformance as well as disclosures related to the leadership and governance of thecompany. The company believes that an active well-informed and independent board isnecessary to ensure the highest standards of corporate governance. The company willcontinue to uphold the true spirit of Corporate Governance and implement the bestgovernance practices. A report on Corporate Governance pursuant to the provisions ofCorporate Governance Code stipulated under SEBI (LODR) Regulations 2015 is publishedelsewhere in the report. The auditors' certificate regarding compliance of conditions ofcorporate governance is annexed as Annexure ' I'.

28. DISCLOSURE REQUIREMENTS

Details of the familiarization programme of the independent directorsare available on the website of the company (http://www.cyient.com/investors/corporate-governance) Policy for determining material subsidiaries of the company is availableon the website of the company (http://www.cyient.com/investors/corporate-governance);

Policy on dealing with related party transactions is available on thewebsite of the company (http:// www. cyient.com/investors/corporate-governance);

The company has formulated and published a Whistle Blower Policy toprovide Vigil Mechanism for associates including directors of the company to reportgenuine concerns. The provisions of this policy are in line with the provisions of thesection 177(9) of the Act and the SEBI (LODR) Regulations 2015 (http://www.cyient.com/ investors/corporate-governance).

Pursuant to the provisions of Regulation 17 of the SEBI (LODR)Regulations 2015 a declaration by the Managing Director & CEO of the companydeclaring that all the members of the board and the senior management personnel of thecompany have affirmed compliance with the Code of Conduct of the company is enclosed asAnnexure J'.

The CEO/CFO certification to the board pursuant to Regulation 17 of theSEBI (LODR) Regulations 2015 is enclosed as an Annexure 'K'.

29. ACKNOWLEDGMENTS

The board of directors expresses its thanks to the company's customersshareholders vendors and bankers for their support to the company during the year. Yourdirectors would like to make a special mention of the support extended by the variousDepartments of the Central and State Governments particularly the Software TechnologyParks of India Development Commissioners - SEZ Department of Communication andInformation Technology the Direct and Indirect tax authorities the Ministry of Commercethe Reserve Bank of India Ministry of Corporate Affairs/Registrar of CompaniesSecurities and Exchange Board of India the Stock Exchanges the Depositories and othersand look forward to their support in all future endeavors.

Your directors wish to place on record their deep sense of appreciationfor the committed services of the associates of the company at all levels.

For and on behalf of the Board

B V R Mohan Reddy

Executive Chairman (DIN-00058215)

Place : Hyderabad Date : 19April 2018


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