Your Directors present their Thirty Second Annual Report together with the auditedaccounts of your Company for the year ended March 31 2019.
FINANCIAL RESULTS (STANDALONE)
(` in Million)
|For the year ended March 31 ||2019 ||2018 |
|Income ||281797 ||254202 |
|Profit before Interest Depreciation and tax ||61291 ||56273 |
|Interest ||(431) ||(708) |
|Depreciation ||(6587) ||(6563) |
|Profit Before Tax ||54273 ||49002 |
|Provision for taxation ||(10469) ||(9063) |
|Profit after tax ||43804 ||39939 |
|Other Comprehensive Income ||1670 ||(4196) |
|Balance brought forward from previous year ||150495 ||120813 |
|Profit available for appropriation ||194307 ||160880 |
|Final Dividend Including tax ||(16411)1 ||(10361)2 |
|Transfer from Share Option Outstanding Account ||62 ||51 |
|Others* ||23 ||(33) |
|Transferred to Special Economic Zone re-investment reserve (net of utilisation) ||(5928) ||(42) |
|Contractual Obligation for Buy back ||(103) ||- |
|Balance carried forward ||171950 ||150495 |
1 Dividend for the financial year ended March 31 2018
2 Dividend for the financial year ended March 31 2017
* The business of the Sofgen UK was transferred to Tech Mahindra UK branch based onBusiness Transfer Agreement and Sofgen India Private Limited has been merged with TechMahindra Limited (refer note 33 to the financial statements).
Your Directors are pleased to recommend a dividend of ` 14/- per Equity Share (280%)payable to those Shareholders whose names appear in the Register of Members as on the BookClosure Date.
Your Company has formulated a Dividend Policy as provided at "Annexure I" tothis Report and the same is disclosed on the website of the Company at https://www.techmahindra.com/sites/ResourceCenter/brochures/investors/corporategovernence/Dividend-Policy.pdf.
During the year under review your Company allotted 3628662 equity shares on theexercise of stock options under various Employee Stock Option Plans. Consequently theissued subscribed and paid-up equity share capital has increased from ` 4898.67 Milliondivided into 979733808 equity shares of
` 5/- each to` 4916.81 Million divided into 983362470 equity shares of ` 5/- each.
BUSINESS PERFORMANCE / FINANCIAL OVERVIEW
Your Company's goal is to enable connected experience in the connected world byoffering innovative and customer-centric information technology experiences enablingEnterprises Associates and the Society to Rise. The Company has presence across 90countries and helps over 900 global customers including Fortune 500 Companies. TheCompany's convergent digital design experiences innovation platforms and reusableassets connect across a number of technologies to deliver tangible business value andexperiences to the stakeholders.
During the Financial Year 2018-19 the Company's consolidated revenues increased to `347421 Million from ` 307729 Million in the previous year a growth of 12.9%. Thegeographic split of revenue is well balanced across regions with 47.3% share from theAmericas 29.3% share from Europe and 23.4% from the Rest of the World.
The consolidated Profit including other income before Interest Depreciation and Taxwas at
` 68056 Million against ` 61262 Million in the previous year.
The consolidated Profit after Tax amounted to
` 42888 Million as against ` 37862 Million in the previous year.
In the demanding new digitally connected world Tech Mahindra is helping its clientsnavigate their transformational journey with its wide range of offerings in BlockchainMachine Learning Artificial Intelligence Cloud Cyber Security Quantum computing andIoT. The Company has also progressed in building intellectual property through variousProducts & Services and Platforms. The Company is committed towards building asynergistic relationship with its partners to enable deliver complete and customizedsolutions to its customers.
There are no material changes or commitments affecting the financial position of theCompany between the end of the financial year and the date of the report.
Inter Informatics Group (IIG)
The Company on August 22 2018 through its wholly owned subsidiary MahindraEngineering Services (Europe) Limited acquired 100% of the share capital ofInter-Informatics spol. s.r.o a Czech entity providing design and engineering services toclients in the Aerospace Rail and Machinery industries. IIG has offices in the CzechRepublic and Romania and is expected to bolster Tech Mahindra's capabilities and presencein Europe.
The Company on February 01 2019 entered into an agreement to acquire 100% of theshare capital of Dynacommerce Holding B.V a Dutch entity engaged in providing platformsand services to telecom end clients. The turnover of Dynacommerce for its fiscal yearended December 31 2018 was ~EUR 9.15 Million. Dynacommerce has offices in TheNetherlands Germany and India. The transaction was concluded on May 9 2019.
The Company on March 14 2019 through its wholly owned subsidiary MahindraEngineering Services (Europe) Limited entered into an agreement to acquire 100% of theshare capital of K-Vision Co. Ltd a Japanese corporation engaged in providing networkservices to telecom clients in Japan. For the 12-month period ending January 31 2019 K-Vision earned revenue of USD 4.8 Million. Tech Mahindra expects to leverage the localpresence and expertise of K-Vision to build its network services business in Japan. In thenear term it will help the Company in supporting the 4G and 5G network build and roll-outin Japan for large telecom players.
DETAILS OF SUBSIDIARIES/JOINT VENTURES/ ASSOCIATE COMPANIES
The performance and financial position of the subsidiaries associate Companies andjoint venture companies included in the consolidated financial statement is provided inaccordance with the provisions of Section 129 read with Rule 5 of the Companies (Accounts)Rules 2014 containing the salient features of the financial statement of Company'ssubsidiaries/joint ventures or associate companies in Form AOC 1 in "AnnexureII" to this report.
Pursuant to Rule 8(5)(iv) of the Companies (Accounts) Rules 2014 the names of theCompanies which have become or ceased to be the subsidiaries joint ventures or associateCompanies during the year are provided in "Annexure III" to this report.The Company is actively pursuing the initiative on consolidation of itssubsidiaries/branches to optimise the operational costs and reduce the compliance risks.During the year under review your Company has closed/merged /filed for strikeoff/liquidation of 29 subsidiaries. Tech Mahindra (Americas) Inc. has been identified asmaterial subsidiary of the Company. The policy for determining Material Subsidiariesformulated by the Board of Directors is hosted on the Company's website and is accessibleon https://www.techmahindra. com/sites/ResourceCenter/brochures/investors/corporategovernence/Policy-For-Determining-Material-Subsidiaries.pdf.
BUY BACK OF EQUITY SHARES
Pursuant to the approval of the Board of Directors on February 21 2019 your Companyannounced the maiden share buyback of 20585000 equity shares of the Company representingapproximately 2.09% of the total number of equity shares in the paid up capital of theCompany for an aggregate amount of
` 19555750000/- being 9.551% of the total paid up equity share capital and freereserves of the Company at a price of ` 950 per equity share from the existingshareholders of the Company on a proportionate basis under the Tender Offer method inaccordance with the provisions of Securities and Exchange Board of India (Buyback ofSecurities) Regulations 1998 the Companies Act 2013 and rules made thereunder. Theprocess was completed on April 15 2019 and in compliance with Securities and ExchangeBoard of India (Buy Back of Securities) Regulations 2018 and Securities and ExchangeBoard of India (Depositories
& Participants) Regulations 2018 and the bye-laws framed thereunder the sharesbought back were extinguished on April 17 2019 by reducing the issued and paid up capitalof the Company.
In the year 2018-19 the Company focused on building TechMNxt the future ready TechMahindra. This envisaged being disruptive challenging all conventions and building aculture of innovation and empowerment for all our associates. Various initiativesundertaken have touched all facets of our associate's journey from launching the world'sfirst Artificial Intelligence (AI) based Talent Exchange Marketplace for better jobopportunities and to making better systems for our employees for open conversations atC.A.R.E. Your Company has driven positive changes on learning re-skilling and upskillingon top priority with focus on cutting-edge digital and niche skills.
Your Company has consulted stakeholders far and wide and articulated/proliferated itsculture as "We drive positive change celebrate each moment and empower all toRISE." in alignment with the Mahindra core values. A culture of innovationdisruption alternative thinking mindfulness and most importantly empathy is in ourculture code.
GREAT PLACE TO WORK
Great Place to Work Institute conducts research on workplace culture and recognizesleading workplaces in close to 60 countries.
Great Place to Work Certification is a gold standard that organizations aspire toachieve. Business leaders and researchers rely on Great Place to Work metrics - theTrust Index and Culture Audit to establish the standard that defines a great workplace.Your Company has been certified as a Great Place to Work.
Your Company is changing the way things work and has moved one step ahead of the edge.
Your Company has built the world's first AI based Talent Exchange marketplace to enablebetter fitment of employee skills with opportunities in the Company.
Your Company has taken another big step towards the future by rolling out FacialRecognition based attendance system across locations in India. Your face is now yourdigital identity. The recognition does not end there and goes on to capture moods of theemployees through mood-o-meter allowing the Company to assess the happiness at eachlocation and fine tune right interventions as needed.
In line with the digitization focus the entire Reward and Recognition process isdigital and associates can share their rewards and pride on their respective socialnetworks.
CHANGING THE WAY WE LEARN
Learning is imbibed in the culture and DNA of your company. In addition to ourtraditional mechanisms we have learnt new ways of learning. We learn from the young welearn from the best in the world we learn device-agnostically we learn at our own pacewe enhance our learnings by working on real-time projects and we un-learn. We haveinvested in re-skilling and upskilling significantly in alignment with your Company visionof Digital Transformation.
Reverse Mentoring is the flagship programme where the senior leaders reach out to youngleaders for learning especially around social media and technology. This allows thesenior leadership to stay abreast of latest happenings in the world.
Your Company is training its employees on the most sought-after and latesttechnologies. Ride With Pride is the future skilling initiative which covers 13 skills ofthe future including AI RPA Big data/ Analytics CX AR/VR Cloud IoT Block Chain BEPlatforms Security SDN/ NFV.
Your Company has created DEXT a state-of-the-art learning platform for all itsemployees which allows employees to learn courses from various platform such as EdX andFuture skills where courses are taught by best in the world professors from MIT Harvardand Stanford etc. DEXT is device agnostic allowing employees to access it from phone aswell as desk at their own pace. It is the unified gateway for all learning contents frominternal and external sources.
Your Company has also gone the extra mile through its innovative platform ExtraMilewhich helps employees to work on real-time company projects and prove their prowess.
COMPANY THAT CARES
Your Company believes in the fundamentals of transparency and empathy which has helpedit build a culture of recognition open conversation and celebrations.
The Company launched C.A.R.E. a platform which provides a platform for associates toraise all types of non-operational issues from mental health to policy violations. Thefocus is on open conversation and providing quality resolutions. The resolutions aremonitored by Chief People Officer.
Your Company believes in recognizing every great work done by its employees about 44%of the employees were rewarded during the year against an industry average of 40%.
Your Company continues its focus on quality and strives to exceed customer expectationsat all times. During the year it undertook CMMI Dev v1.3 (Capability Maturity ModelIntegration) (Development) assessment and was successfully assessed at L5. Similarly itunderwent various upgrade and continuous evaluation audits for various standards duringthe year to meet client demands and enhance value delivery Successfully assessedfor CMMI Dev v 1.3 Level 5 ISO 9001:2015 (Quality Management System) ISO 20000-1:2011(Information Technology Service Management System) ISO 27001:2013 (Information SecurityManagement System) TL9000 R 6.1/ R5.5 (Quality Management Systems for Tele Communicationsindustry) ISO 13485:2016 (Quality Management Systems for medical devices) AS9100 Rev D(Standard for Aerospace domain scope of certification limited to the aerospacebusiness within Tech Mahindra). In addition to these your Company also maintains itscommitment to health safety and environment by continually improving its processes inaccordance with ISO 14001:2015 (International Organization for Standardization) and OHSAS18001:2007 (Occupational Health and Safety Assessment Series) standards. Your Company isalso certified on ISO 22301:2012 (Societal Security and Business Continuity ManagementSystem) and has a comprehensive Business Continuity and Disaster Recovery framework toprevent potential business disruptions in the event of any disaster. It has processes thatwill help resume services to customers' acceptable service levels. Automated Service Deskwith SLAs for enabling business and Vulnerability Assessment and Penetration Testing Labfor secured corporate network operations are highlights showcasing information securityposture of the Organization.
Tech Mahindra (IT Division) has been assessed for implementation of high maturitybusiness excellence practices' at Mahindra Group (Services Sector). It has been assessedat TMW Maturity Stage 6 (on scale of 1-10 stages) of Mahindra Business ExcellenceFramework The Mahindra Way. These certifications are testimony of the robustness ofbusiness processes and at large the quality culture imbibed in the organization.
Your Company has also strengthened Process/Practice and Tools Industrialization ofvarious Engineering activities for Development Testing and Managed service portfolio toachieve standardization better efficiency and best practices being implemented across thebusinesses.
Your Company has continued to strengthen the process for transforming Quality Assuranceprocesses to New Age Delivery processes with focus on re-usability and automationto achieve better customer experience and faster quality delivery. Your Company is puttingall the initiatives in place in order to ensure we deliver as stated in Quality Policy.
During the year under review all Independent Directors have given declarations thatthey meet the criteria of independence as laid down under Section 149(6) of the CompaniesAct 2013 and Regulation 16(1)(b) of the Securities and Exchange Board of India (ListingObligations And Disclosure Requirements) Regulations 2015.
Pursuant to the provisions of Section 152(6)(c) of the Companies Act 2013 Mr. V. S.Parthasarathy Director (DIN: 00125299) is liable to retire by rotation and offers himselffor reappointment.
The tenure of Mr. Anupam Puri Mr. M. Damodaran Mr. T. N. Manoharan Ms. M.Rajyalakshmi Rao and Mr. Ravindra Kulkarni who were appointed as Independent Directors ofthe Company on 1st August 2014 would end on 31st July 2019. Board of Directorshas recommended the re-appointment of Mr. M. Damodaran (DIN: 02106990) up to 31stMarch 2022 as Mr. Damodaran would attain the age of 75 years in the year 2022 andre-appointment of Mr. T. N. Manoharan (DIN: 01186248) and Ms. M. Rajyalakshmi Rao (DIN:00009420) for a further period of 5 years subject to the approval of shareholders at theensuing Annual General Meeting.
Your Directors co-opted Ms. Mukti Khaire (DIN: 08356551) as an AdditionalDirector with effect from 19th April 2019 whose term will end at the ensuing AnnualGeneral Meeting. Since Ms. Mukti Khaire meets the criteria of Independent Directorthe Board recommended her appointment as an Independent Director for a period of 5 yearssubject to the approval of shareholders at the ensuing Annual General Meeting.
Mr. Anupam Puri and Mr. Ravindra Kulkarni Independent Directors have opted not to bere-appointed considering they would be attaining 75 years of age.
The Board places on record its sincere appreciation for the valuable advice andguidance of Mr. Anupam Puri and Mr. Ravindra Kulkarni during their tenure as Directors ofthe Company.
These Programs aim to provide insights into the Company to enable the IndependentDirectors to understand its business in depth and contribute significantly to the Company.The details of program for familiarisation of the Independent Directors with the Companyare available on the Company's website and can be accessed at the web-link: https://www.techmahindra.com/sites/ResourceCenter/brochures/investors/corporategovernence/Familiarization-Programme-to-Independent-Directors.pdf.
The Board members are also regularly updated on changes in Corporate and Allied lawsTaxation laws and related matters through presentations and updates made by therespective functional leaders. MD & CEO along with Senior leadership conductsquarterly session with board members sharing updates about the Company's businessstrategy operations and the key trends in the IT industry relevant for the Company. Theseupdates help the board members to abreast themselves with the key changes and their impacton the Company.
Pursuant to the provisions of the Companies Act 2013 and Regulation 19 read withSchedule II Part D of the Securities and Exchange Board of India (Listing Obligations andDisclosure Requirements) Regulations 2015 the Board has devised a policy on evaluationof performance of Board of Directors Committees and Individual directors. Accordinglythe Chairman of the Nomination and Remuneration Committee obtained from all the boardmembers duly filled in evaluation templates for evaluation of the Board as a wholeevaluation of the Committees and peer evaluation. The summary of the evaluation reportswas presented to the respective Committees and the Board.
Number of Meetings of the Board
The Board met 5 times during the financial year. The meeting details are provided inCorporate Governance report that forms part of this Annual Report. The maximum intervalbetween any two meetings did not exceed 120 days as prescribed in the Companies Act 2013.
Policy on Directors' Appointment and Remuneration
The Governance policies laid down by the Board of Directors of your Company include: i.Policy on appointment and removal of Directors Key Managerial Personnel and SeniorManagement; ii. Policy on remuneration to the Directors Key Managerial Personnel andSenior Management and other Employees;
The extract of these two policies are provided in "Annexure IV".
The policies are available on the Company's website and can be accessed at theweb-link: https://www.techmahindra.com/sites/ResourceCenter/brochures/investors/corporategovernence/Governance-Policies-including-remuneration-to-Directors-KMPS.pdf.
In accordance with the principles of transparency and consistency your Company hasadopted governance policies for Board of Directors Key Managerial Personnel & SeniorManagement appointments remuneration and evaluation. These governance policies inter aliaoutline Succession Planning for the Board Key Managerial Personnel and Senior Management.
The Company has laid down a policy on training for Independent Directors as part ofthe governance policies. The Senior Leadership of the Company update the directors on theregulatory changes Business strategy and operations periodically.
Key Managerial Personnel (KMPs)
Pursuant to provisions of Section 203 of the Companies Act 2013 Mr. C. P. GurnaniManaging Director & Chief Executive Officer Mr. Milind Kulkarni ChiefFinancial Officer up to 31st May 2018 & Mr. Manoj Bhat Chief FinancialOfficer from 1st June 2018 and Mr. Anil Khatri Company Secretary & ComplianceOfficer were the Key Managerial Personnel of the Company during the year under review.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to Section 134(5) of the Companies Act 2013 your Directors based on therepresentation(s) received from the Operating Management and after due enquiry confirmthat: i. in the preparation of the annual accounts the applicable accounting standardshave been followed along with proper explanation relating to material departures if any;ii. they have selected such accounting polices and these have been applied consistentlyand reasonable and prudent judgments and estimates have been made so as to give a trueand fair view of the state of affairs of the Company as at March 31 2019 and of theprofit of the Company for the year ended on that date; iii. proper and sufficient care hadbeen taken for the maintenance of adequate accounting
11 records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities; iv. the annual accounts have been prepared on a going concern basis; v.they had laid down internal financial controls to be followed by the Company and that suchinternal financial controls are adequate and were operating effectively; vi. the propersystems to ensure compliance with the provisions of all applicable laws are in place andare adequate and operating effectively.
DETAILS IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THEFINANCIAL STATEMENTS
The Company has internal financial controls which are adequate and were operatingeffectively. The controls are adequate for ensuring the orderly & efficient conduct ofthe business including adherence to the Company's policies the safe guarding of assetsthe prevention & detection of frauds & errors the accuracy & completeness ofaccounting records and timely preparation of reliable financial information.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS
There are no significant and material orders passed by the regulators or courts ortribunal impacting the going concern status and the Company's operations in future.
The members at the 30th Annual General Meeting held on August 1 2017 appointed M/s.B S R & Co. LLP Chartered Accountants [Firm's Registration No. 101248W/W-100022] asthe Statutory Auditors (BSR') of the Company to hold office for a term of fiveyears from the conclusion of the 30th Annual General Meeting (AGM) of the Company held inthe financial year 2017-18 until the conclusion of the AGM of the Company for thefinancial year 2021-22 on such remuneration as may be determined by the Board ofDirectors.
The members may note that the Ministry of Corporate Affairs vide its notification dated7th May 2018 has done away with the requirement of yearly ratification of appointment ofStatutory Auditors at the AGM. Pursuant to Section 139 of the Companies Act 2013 thestatutory auditors M/s. B S R & Co. LLP Chartered Accountants have confirmed they areeligible to continue as auditors.
There are no qualifications reservation or adverse remark or disclaimer made in theaudit report for the Financial Year 2018-19.
SECRETARIAL AUDIT REPORT
Pursuant to the provisions of Section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hadappointed Dr. K. R. Chandratre Practicing Company Secretary Pune to undertake theSecretarial Audit of the Company. The Secretarial Audit Report is provided as "AnnexureV". There are no qualifications reservation or adverse remark or disclaimer madein the Secretarial Audit Report.
COMPLIANCE WITH SECRETARIAL STANDARDS
The Company has complied with the applicable Secretarial Standards.
EXTRACT OF THE ANNUAL RETURN
Pursuant to the provisions of Section 134(3)(a) of the Companies Act 2013 the extractof the Annual Return in Form MGT-9 is attached as "Annexure VI".The same is available at the web-link: https://www.techmahindra.com/investors/annual_reports.aspx. The Annual return will be uploaded on the website of the Company once itis filed with the Ministry of Corporate Affairs.
Disclosures of the ratio of the remuneration of each director to the median employee'sremuneration and other details as required pursuant to Section 197(12) of the CompaniesAct 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 as amended from time to time are provided as "Annexure VII".None of the directors or Managing Director & CEO of the Company received anyremuneration or commission from Subsidiary Companies of your Company.
The details of remuneration paid to the Directors including the Managing Director &CEO of the Company are given in Form MGT-9 forming part of the Directors Report.
PARTICULARS OF EMPLOYEES
The information required under Section 197(12) of the Companies Act 2013 ("theAct") read with Rule 5(2) & of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 forms part of this Report. However pursuant to firstproviso to Section 136(1) of the Act this Report is being sent to the Shareholdersexcluding the aforesaid information. Any shareholder interested in obtaining saidinformation may write to the Company Secretary at the Registered Office / CorporateOffice of the Company and the said information is available for inspection at theRegistered Office of the Company.
PREVENTION OF SEXUAL HARASSMENT POLICY
Your Company laid down Prevention of Sexual Harassment policy and it is made availableon the website of the Company. The Company has zero tolerance on Sexual Harassment atworkplace. During the year under review there were no cases filed pursuant to the SexualHarassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013.
EMPLOYEE STOCK OPTION SCHEMES
During the year under review there were no material changes in the Employee StockOption Schemes (ESOPs) of the Company and the Schemes are in compliance with the SEBIRegulations on ESOPs. As per Regulation 14 of SEBI (Share Based Employee Benefits)Regulations 2014 read with SEBI circular dated June 16 2015 the details of the ESOPs areuploaded on the Company's website and can be accessed at the web-link: http://www.techmahindra.com/sites/ResourceCenter/brochures/investors/ corporategovernence/Details-of-ESOPs.pdf.
A report on Corporate Governance covering among others composition details of meetingsof the Board and Committees along with a certificate for compliance with the conditions ofCorporate Governance in accordance with the Securities and Exchange Board of India(Listing Obligations And Disclosure Requirements) Regulations 2015 issued by theStatutory Auditors of the Company forms part of this Annual Report.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
A detailed analysis of your Company's performance is discussed in the ManagementDiscussion and Analysis Report which forms part of this Annual Report.
The Risk Management Committee of the Board of Directors periodically reviews the RiskManagement framework identifies risks with criticality and mitigation plan. The elementsof risk as identified for the Company with impact and mitigation strategy are set out inthe Management Discussion and Analysis Report.
ESTABLISHMENT OF VIGIL MECHANISM
Your Company has laid down Whistle Blower Policy covering Vigil Mechanism withprotective Clauses for the Whistle Blowers. The Whistle Blower Policy is made available onthe website of the Company.
DEPOSITS / LOANS & ADVANCES GUARANTEES OR INVESTMENTS
Your Company has not accepted any deposits from the public during the year underreview. The particulars of loans/advances guarantees and investments under Section 186 ofthe Companies Act 2013 are given in the notes forming part of the Financial Statements.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
All transactions entered into with Related Parties as defined under Section 2(76) ofthe Companies Act 2013 and Regulation 23 of the Securities and Exchange Board of India(Listing Obligations And Disclosure Requirements) Regulations 2015 ("The ListingRegulations") during the financial year were in the ordinary course of business andat an arm's length pricing basis and do not attract the provisions of Section 188 of theCompanies Act 2013. There were no transactions with related parties in the financial yearwhich were in conflict with the interest of the Company and requiring compliance of theprovisions of Regulation 23 of the Listing Regulations. Suitable disclosure as required bythe Indian Accounting Standards (Ind AS 24) has been made in the notes forming part of theFinancial Statements.
The Company has formulated a policy on materiality of Related Party Transactions anddealing with Related Party Transactions which has been uploaded on theCompany'swebsitewhichcanbeaccessedattheweb-link: https://www.techmahindra.com/sites/ResourceCenter/Brochures/investors/corporategovernence/Related-Party-Transactions-Policy.pdf.
The particulars of related party transactions in prescribed Form AOC - 2 are attachedas "Annexure VIII".
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The particulars as prescribed under Section 134(3)(m) of the Companies Act 2013 readwith Rule 8 of the Companies (Accounts) Rules 2014 are provided in "AnnexureIX" which forms part of this report.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
The CSR vision of your Company is "Empowerment through Education." Incompliance with the guidelines prescribed under Section 135 of the Companies Act 2013your Company has constituted a Corporate Social Responsibility Committee. Your Board ofDirectors
13 laid down the CSR Policy covering the Objectives Focus Areas Governance Structureand Monitoring & Reporting Framework among others. The Company has spent on CSR morethan 2% of the average net profits of the Company. The policy is available at: https://www.techmahindra.com/society/default.aspx.
Your Company's social initiatives are carried out by Tech Mahindra Foundation andMahindra Educational Institutions Section 8 (erstwhile Section 25) Companies promoted bythe Company.
TECH MAHINDRA FOUNDATION (TMF)
The Foundation was set up in 2007 as a Section 25 Company (referred to as a Section 8Company in the Companies Act 2013). Since then it has worked tirelessly towards thevision of "Creating educated skilled and able women and men as the country's truestrength" establishing itself as a prominent CSR player within the Mahindra Group aswell as a leading social organization at the national level. The Foundation essentiallyworks with children youth from urban locations disadvantaged communities in India witha special focus on women and persons with disabilities. During the year under review TechMahindra Foundation has successfully steered 167 high-impact projects with 90+ partnersreaching out to 150000+ children teachers and youth across these locations.
The key initiatives in the area of School Education include: All Round Improvement inSchool Education (ARISE)
Tech Mahindra Foundation's educational initiatives under ARISE are long-term schoolimprovement programmes in partnership with local governments and partner organisations.The Foundation in 2018-19 worked with approximately 40+ partner schools to turn them intomodel schools of excellence. ARISE+ is a variant of ARISE in which children withdisabilities are provided chronic therapy as well as special education to help them leadmore fulfilling lives.
Shikshaantar envisioned as a programme for enhancing capacity of government schoolteachers has taken rapid strides during the year. TMF has been working with the EastDelhi Municipal Corporation since 2013 to manage its In-Service Teacher EducationInstitute (ITEI) where teachers from nearly 400 primary schools receive quality trainingon a regular basis. Looking at the success of this intervention the Foundation wasinvited by the North Delhi Municipal Corporation which has over 700 schools to run itsITEI as well. With this the Foundation has the responsibility of training over 60% ofprimary school teachers in Delhi. In addition to these the Foundation has also workedwith Municipal Corporations in
Chennai Hyderabad Pune & Thane for strengthening capacities of government schoolteachers. Finally the Foundation piloted an innovative program called English-Winglishunder the Shikshaantar umbrella with the objective of imparting English communicationskills to teachers from government schools that have recently been converted to Englishmedium.
Skills-for-Market Training (SMART) is the Foundation's flagship programme inemployability. It is built on the vision of an educated enlightened and employed Indiaand a belief that educated and skilled youth are the country's true strength. Theprogramme started with 3 Centres in 2012 and is currently running 100 Centres at 11locations across India. These include SMART Centres SMART+ Centres (training for peoplewith disabilities) and SMART-T Centres (training in technical trades).
In 2018-19 your Company trained close to 19000 young women and men under its SMARTprogram of which 1477 were persons with disabilities. More than 70% of the graduates areplaced in jobs upon successful completion of the training across multiple industries.
The feather in the Foundation's employability cap has been the Tech Mahindra SMARTAcademies for Healthcare that are operating in Delhi Chandigarh and Mumbai. TheseAcademies are setting a new benchmark in the country when it comes to the professionaldevelopment of paramedical staff. During FY 2018-19 over 850 youngsters were admitted tothese Academies. The Foundation has also been operating the SMART Academy for DigitalMedia and Logistics in Vizag in which another 200 youth were admitted.
MAHINDRA EDUCATIONAL INSTITUTIONS (MEI)
Mahindra cole Centrale (MEC) College of Engineering established by MEI incollaboration with cole Centrale Paris (now CentraleSuplec) and JNTU Hyderabad is setto graduate its second batch of students this year after a successful five-year presenceon the technical education landscape of the country characterized by its risingpopularity.
This high impact Indo-French collaboration in engineering education has emerged as adisruptive player with its keen focus on Industry-aligned and industry-sponsorededucation; all Ph.D. faculty roster; global internships; international placements; and adistinct curriculum that includes the French language. The Executive Council of MECfeatures leaders both from Tech Mahindra and the Mahindra Group. The MEC campussurrounded by the sprawling green Tech
Mahindra Technology Centre in Hyderabad India is equipped with state-of-the-artacademic infrastructure. To support its strong research vision MEC has set up relevanthigh technology laboratories like the Robotics Lab Super Computer Lab and IncubationCentre; in addition to Media and Design Thinking labs.
During the year 2018-19 MEC has signed MoU's with multiple universities in the USAlike University of Florida University of Nebraska at Omaha and it's in the process ofsigning MoU's with University of Texas at Austin Georgia Tech Atlanta University ofWisconsin at Madison and many more. These MoU's are opening doors to MEC students toundertake 8-10 weeks of summer internships and faculty development programs overseas.
The Annual Report on CSR activities is provided as "Annexure X".
Sustainability for your Company is not just a business case but an imperative for thelong-term success and growth of the Company. The focus on sustainability helps the Companymanage its social and environmental impacts improve operational efficiency and ensurethat corporate decisions lead to a transparent fair and equitable growth that does notinfringe on the rights of the others.
Your Company is aware of its environmental and social responsibilities and work incollaboration with our stakeholders to build solutions that enable it to tread on the pathof responsible growth. With a structured stakeholder engagement process the company hasbeen able to design strategies and initiatives which does not just improve itssustainability credentials but reinforce its overall business philosophy too.
Tech Mahindra is moving towards carbon neutrality through various Sustainabilityinitiatives and best practices. Making Sustainability Personal and Individual SocialResponsibility are fundamental at Tech Mahindra. The emphasis on the green ecosystem isseen through its commitment to go carbon neutral making optimum use of resources andmoving towards a low emission technology. Your Company has taken ambitious emissiontargets which have been approved by the SBTI (Science based Targets Initiative) and aretaking various steps to achieve them.
The Company aims to reduce its carbon footprint by installing solar modulesretrofitting LEDs installing motion sensors using star-rated and efficient equipment andreducing recycling and reusing waste. The Company also aims to decrease transportemissions by using improved logistics policies and through inventory control measures.Your Company has digitalized internal communications with virtual meetings through tele/audio-conferencing that bring down meeting-related travel and other costs considerably.
Your Company's sustainability-focused areas are:
Going Carbon Neutral: Increasing use of renewable energy; Improving EnergyEfficiency; implementing carbon price; decreasing business travel; optimising logistics;moving towards low carbon economy and ensuring environmental stability
Saying No to plastic: Using Biodegradable materials encouraging associates alsoto use eco-friendly products awareness on preventing single-use plastic
Reduce Reuse Recycle Recover: Implementing process of Reduce Reuse Recycleand Recover across the value chain to decrease waste
Sustainable supply chain: Ensuring our suppliers follow the highest standards ofsustainable and ethical best practices
Work-life balance: Providing an assured career development path and a feasiblework-life balance to our associates
Innovation: Becoming future-ready by proactively encouraging Innovative thinkingacross the organization and going digital
Transparency: Showcasing our organizational policies and processes in the TCFDbased IR available online Your company aims to pioneer new solutions for sustainabledevelopment while continuing to shape its business responsibly and increasing its economicsuccess. Your company has invested in green solutions like smart grid smart cities smartwaste management systems and electric vehicle charging systems. The company is alsoworking with suppliers and vendors to cut down on logistics and transportation to reduceits emissions. Your Company's commitment and performances are validated by the externalrecognition it has received. The leadership positions and achievements across platformsencourage the Company to strive for excellence even more.
Identified as a global leader for Supplier
Engagement by CDP 2018
Member of DJSI World Index for 2018- one amongst only 4 Indian Companies to be listed
One of the 10 Indian Companies who are part of the DJSI 2018 Emerging markets category
Listed as a Rising Star' in the CDP's India Climate
Change Leaders 2018
Silver Class distinction for excellent sustainability performance in the RobecoSAM 2019Sustainability Yearbook
Constituent of the FTSE4 Good Emerging Index
Awarded "Prime" status in Oekom's 2018
Winner of the Mahindra RISE Change Agent
Sustainability Award 2018
The Sustainability reporting of your Company is based on various global standards andframeworks like TCFD (Taskforce on Climate Related Financial Disclosures) CDSB (ClimateDisclosure Standards Board) and GRI (Global Reporting Initiative). The externally assuredTech Mahindra Integrated Reports can be accessed at: http://www.techmahindra.com/company/Sustainability.aspx.
AWARDS AND RECOGNITION
Your Company continued its quest for excellence in its chosen area of business toemerge as a true global brand. Several awards and rankings continue to endorse yourCompany as a thought leader in the industry. The Awards / recognitions received by theCompany during the year 2018-19 include:
Ranked 15th on the Forbes Digital 100 list and the highest-ranked non-US Company onthe list.
Mr. C. P. Gurnani recognized as The Corporate
Leader of the Year' at the 14th Indo-American Corporate Excellence (I-ACE) Awards andBest CEO of the Year in IT & ITES category by Business Today.
Received the AICRA STEM Awards 2018 in the
Excellence in Automation' category recognizing the best automation systemintegrators in the business.
Gold Winner at the CEO World Award in the
CEO Achievement of the Year' category.
Selected as Brand of the Decade 2019' by BARC
Asia a media research and rating agency.
Awarded Golden Peacock Global Award for
Excellence in Corporate Governance 2018 by the Institute of Directors (IOD).
Recognized as a gold winner for being the
Most Innovative Cyber security Company at the Cybersecurity Excellence Awards 2019.
Declared winner in the - Most innovative use of
Blockchain for Social Good category of the India Blockchain Awards 2019.
Featured in the Forbes Asia's Fab 50 Companies
Included for the first time in the ET Brand
Equity-Top 75 most valuable Brands 2018.
Tech Mahindra Business Process Services recognized as a Leader in Customer ExperienceServices by Global Analyst Firm NelsonHall.
One of the Top 10 Best Company for Women in
India in the 2018 Working Mother & AVTAR 100 Best Companies List.
Awarded the "Best International Organization in Skill Development" at theASSOCHAM Skilling India Awards-2018.
Tech Mahindra recognized as a leader in the
Dow Jones Sustainability Indices 2018 for the fourth consecutive year.
Your Directors place on record their appreciation for the contributions made byemployees towards the success of your Company. Your Directors gratefully acknowledge theco-operation and support received from the Shareholders Customers Vendors Bankersregulatory and Governmental authorities in India and abroad.
| ||For and on behalf of the Board |
| ||Anand G. Mahindra |
|Place: Mumbai ||Chairman |
|Date: May 21 2019 ||(DIN: 00004695) |
The dividend policy of the Company balances the objectives of rewarding theshareholders through dividends and retaining capital to invest in the growth of theCompany.
The Board considers the yearly dividend based on the Net Profit after Tax (PAT)available for distribution as reported in the consolidated statutory financial statementsprepared in accordance with the applicable Accounting Standards. In addition the Boardreviews the capital expenditure needs cash requirements for investments in capabilityenhancements and future non organic growth initiatives.
The dividend is declared at the Annual General Meeting of the shareholders based on therecommendation by the Board. The Board may also declare an interim dividend for thebenefit of the shareholders.
Your Company has a track record of steady increases in dividend declarations over itshistory. The current dividend policy is to distribute a minimum of 20% of the Profitsafter Tax each year under normal circumstances. The Board has the discretion to recommenda lower dividend in case the business demands it.
The Board may recommend special dividend on occasions of significance.
The dividend policy of the Company is reviewed periodically by the Board.
| ||For and on behalf of the Board |
| ||Anand G. Mahindra |
|Place: Mumbai ||Chairman |
|Date: May 21 2019 ||(DIN: 00004695) |