Board's Report To the Members, 1. The Directors hereby present the Twenty-Fifth Annual Report of your Company on the business and operations for the year ended March 31, 2016. 2. COMPANY AFFAIRS Standalone On a standalone basis, your Company recorded revenue of Rs. 866.46 million, as against Rs. 801.70 million in the previous year. Mindteck's net profit stood at Rs. 82.02 million, as against Rs. 114.81 million in the corresponding previous year. At an operating margin level, Mindteck recorded EBITDA of Rs. 151.33 million (17.46%) this year as against Rs. 195.01 million (24.32%) last year. Consolidated During the year under review your Company recorded consolidated revenue of Rs. 3116.30 million as against Rs. 3191.48 million in the previous year. Of the revenue that was recorded, 68.29% is attributed to the US and the balance pertains to the rest of the world. Mindteck's Consolidated Net Profit for the year stood at Rs. 259.27 million, as against Rs. 191.96 million in the corresponding previous year. At an operating margin level, Mindteck recorded EBITDA of Rs. 229.24 million (7.36%) this year as against Rs. 300.76 million (9.42%) last year. There were no material changes and commitments affecting the financial position of the Company which have occurred between the end of the financial year of the Company to which the financial statements relates and the date of the report. 3. DIVIDEND The Board has recommended a dividend of 10% (Re. 1 per equity share of Rs. 10 each) for the year ended March 31, 2016. This translates into a total outlay of Rs. 30,297,752 including Dividend Distribution Taxes. 4. BUSINESS FOCUS AND HIGHLIGHTS Mindteck provides product engineering and information technology services to top-tier Fortune 50-1000 clients, startups, leading universities, and government entities around the globe. We are devoted to delivering knowledge that matters to help our clients compete, innovate and propel forward. Our legacy expertise in embedded systems and enterprise applications is complemented by our more recently recognized successes in Internet of Things (IoT)-based solutions such as those for developing smart cities. We also have a strong track record in storage, life sciences, healthcare and medical devices. Mindteck is among a select group of global companies appraised at Maturity Level 5, Version 1.3 of the CMMI Institute's Capability Maturity Model Integration (CMMI). We are also one of the Founding Members of The Atlas online, a visualization tool for research developed by The Center for International Development (CID) at Harvard University. Global alliances include The Intel IoT Solution, Thread Group, IoT Global Network and Zigbee. Semiconductor and Storage Mindteck's experience in storage spans over two decades. Our engagements have included storage software development, testing, hardware and firmware design, productized solutions and consultancy and implementation services. We have readily available talent pool in the areas of system development, quality assurance & automation and data center administration. Our top storage clients have continuously provided us excellent customer satisfaction ratings for our constant support in executing their business critical projects. We are also the technology partner for Storage Networking Industry Association (SNIA), a not-for-profit global organization comprised of member companies spanning the global storage market. The mission of this organization is to lead the storage industry worldwide in developing and promoting standards, technologies, and educational services to empower organizations in the management of information. A key leader in the organization was elected to the Board representing SNIA-India this past year. For over a decade, Mindteck has been serving the semiconductor equipment manufacturing industry. Our expertise is comprised of a wide spectrum of IT services, including Semiconductor (SEMI) standards implementation, DeviceNet implementation, proprietary protocol development, Mechanical Engineering Services (MES), enterprise device monitoring, Electronic Design Services (EDS), simulator development, automation, change management and end-to-end testing services. Our ready-to-deploy solution accelerators, such as a device simulator, automated equipment software testing framework, and Semiconductor Equipment Communications Standard (SECS)/Generic Equipment Model (GEM)-based Factory Automation (FA) test harness, helps lower project risk and cost. Our participation in the largest semiconductor and automotive shows in Europe - Semicon Europa and Frankfurt Motor Show - this past year increased our visibility and garnered interest in our services. Key highlights executed in 2015-16 include: • A breakthrough in acquiring a deal with one of the major storage and semiconductor companies for device driver qualification on the Company's various products. This certification testing of different flavors on Windows, VMware and Citrix will enable us to gain the expertise to target other storage companies having similar requirements that are mandatory and so critical for their storage products. • Acquisition of a new semiconductor client in the US, for product development. • Winning an offshore project with a semiconductor company specializing in data conversion and signal processing technology. • Winning a project for a global fabless semiconductor company that develops and sells semiconductor devices for the storage, communications, optical networking, printing and embedded computing marketplaces. Electronic Design Services Mindteck's EDS group provides core embedded technology solutions and services in a wide variety of sectors, including industrial control systems, gas control and monitors, computer modules, electric vehicle chargers, instrumentation, storage, smart energy and IoT. Our integrated product design capabilities spans hardware/ firmware design, mechanical design, software development, connectivity solutions and value engineering. With a sound ecosystem of established partnerships, Mindteck's comprehensive approach to product development consistently results in the reduction of time to market for the end customer. Highlights of recent work include: • An existing customer in the area of analytical instruments engaged us to develop hardware and firmware for their next generations Gas Chromatography (GC) system based on new sensor technology. • Collaboration with a market leader to add new features in the design of their powerful 'next generation' body clocks. • Commencing a car audio player upgrade project for an existing Original Equipment Manufacturer (OEM) customer, thus enabling them to migrate to a new hardware platform. • Commencing a battery-operated retrofittable radio module project for an OEM customer that involved complete product development, including hardware, firmware, mechanical, test jigs and high-volume production support. • Winning a project for a global provider of smart and efficient lighting solutions. • Winning an engagement for a flow meter with a new Swiss customer. • Acquisition of two new clients: A manufacturer of low-cost laptop computers and a consumer electronics manufacturing multinational. Smart Energy and Wireless Mindteck is one of the earliest adopters of the ZigBee standards. Today, we possess our own ZigBee and 6LowPan wireless stacks. Having developed ZigBee stacks for major silicon providers, the focus of our work is demonstrated through our solution accelerators: • Wireless short-range and long-range communication modules • Sensor modules for monitoring solar power generation/ efficiency • Remote sensing and control of valves/actuators • Dashboard and data analytics for solar energy and water pumping efficiency • Diagnostics • Connectivity with WiFi, ZigBee • Global System for Mobile Communication (GSM)/ General Packet Radio Service (GPRS) and Satellite Very Small Aperture Terminal (VSAT) for isolated installation of standalone systems and smart metering for energy and water consumptions In recent past, we have been consistently focusing on wireless communication and wireless sensor networks for design and development of wireless monitoring and load control solutions in the automation space. We have been a ZigBee Alliance contributor member since 2004, and have developed ZigBee Stack and Application profiles for leading semiconductor companies, and conceptualized and developed ZigBee-based products for OEMs. We are also investing in proactive development of next-generation ZigBee IP stack and Smart Energy 2.0 profile. Mindteck has solution IPs that are market-ready and in line with smart city initiatives. We have also ventured into Wi-Fi based solutions, including wearables. The visibility and acceptance of our smart energy offerings increased with the introduction of our IoT solutions—smart metering, smart parking, building automation and sustainable energy efficient solutions. Key project highlights for 2015-16 include: • Provided ready-to-deploy solutions for a leading networking major. • Provided wearables over Wi-Fi to improve factory operation efficiency for one of the world's leading silicon vendors. • Received extensions on projects from a healthcare lighting client, solar PV client and our largest medical device customer in Europe. • Acquired a new customer who operates Singapore's wholesale electricity market. Cloud Computing and Big Data Mindteck provides end-to-end cloud-based IT Consulting Services across multiple cloud variants (private, public and hybrid cloud enablement). We have in-depth expertise in various cloud platforms, including Amazon Web Services (AWS), Azure, Eucalyptus, OpenStack and VMware, backed with Subject Matter Experts (SMEs) and technical architects with strong enterprise background and application management, data centre and IT infrastructure expertise. Our cloud enterprise solutions expertise includes cloud-based monitoring and analytics, and big data solutions. Mindteck has built a solution hosted on Amazon EC2 that leverages cloud infrastructure to provide the best analytical solutions with regard to the dashboard, custom reports and data mining capabilities. Our holistic analytics and business intelligence service offerings help clients act automatically on their data. Mindteck's own IP—Mind-CDMI—brings niche expertise in cloud-based storage interoperability in the form of a cloud data management interface. Our MegaMind IP is a big data platform that enables automated extraction of car license plate information. A high volume of multi-media content (multiple images) streamed from IP cameras located in a city is processed and the car number plate is extracted with greater than a 70% success rate. This solution is targeted for security system providers and law enforcement. Key highlights include: • For the aforementioned The Atlas online research collaboration with The CID at Harvard University, we are helping the team work on Atlases for multiple countries. These are designed and developed from scratch to show various state, department, district and municipality level profiles with various product capability and employment history in different industries. • Winning a full-scale execution of a new release of a proprietary, cloud-based platform for a compliance client. Healthcare and Medical Devices This past January, Mindteck's Kolkata and Bengaluru development centers obtained recertification for ISO 13485—the world's most recognized medical device standard which is recognized by many governments worldwide. We also recently designed a web and cloud-based real-time patient monitoring system with live audio and video streaming facilities that can be used by end users running computers or smart phones. Additionally, our R&D team developed the Doctor e-Visit solution for Intensive Care Unit (ICU) patients. This innovative solution enables ICU patients with complicated medical cases to get timely access to the world's best doctors irrespective of their physical location. Other highlights include: • Acquisition of a large medical device company as a new client for a managed project. • Acquisition of two new clients—manufacturers of diagnostic and medical imaging systems related to women's health and eye care. Life Sciences Mindteck provides niche product engineering and information management services and solutions for different segments of the Life Sciences Industry. Our offerings extensively cover the complete product engineering needs of device manufacturers in this industry—product development, verification and validation, compliance and qualification services and system integration, along with global product and field support. We are proud to be the preferred global services partner for leading clients from the life sciences industry with 12 of the top 20 analytical instrument and medical device companies benefiting from our integrated services portfolio. Our projects have consistently received high customer satisfaction ratings, with an average 8.4 out of 10. Research and Development Mindteck's R&D team has been focusing on creating, developing and maintaining IPs, products, processes and solutions essential to meet the demands of the marketplace. The team's new product development initiatives are based on the IoT. Outcomes of the team are also being leveraged in the 100 Smart Cities pilots announced by the Government of India. Products/solutions developed by Mindteck in the year 201516 include the aforementioned Doctor e-Visit Solution, as well as the following: Wireless-based Parking Occupancy Detection Sensors: These sensors aid in accurate detection and reporting of vehicle parking availability via wireless technology. They are battery-powered, very easy to install, and have operational life designed for more than a decade. Smart Parking systems use such sensors for accurate detection of the parking inventory. Camera Calibration System: This solution is used as a configuration tool and was developed as precursor to ongoing research on multiple video analytics-based solutions in the Smart Cities space. In the year ahead, the R&D team's focus areas will be to integrate existing IoT solutions into leading smart cities system integrator partner platforms. Also, participate in the Smart City pilot solution and integration work, and develop new state-of-art innovative solutions in the video analytics and data analytics space to complement the existing smart cities offerings. In a data-driven digital economy, the future trend driving the industry is the need to rapidly integrate and deploy innovative solutions and generate new revenue models for the end customer by utilising analytics. Mindteck is well positioned and firmly focused on developing the most innovative solutions to take advantage of the growing market in the IoT and analytics space. Smart Cities As has been previously mentioned, the smart city space was a key area of focus for us over the course of the year. In October, we unveiled our smart parking solution at Smart Solutions for Service Delivery in Cities,' an event jointly organized by the government of Tamil Nadu and NASSCOM, sponsored by Tamil Nadu Urban Finance and Infrastructure Development Corporation. Mindteck was among the select group of 20 technology companies invited to present to a gathering of attendees, including senior Tamil Nadu government designates from India's shortlisted smart cities, principal secretaries, municipal commissioners, officials of urban local bodies and senior government officials. Mindteck presented an overview of the company's smart city engagements and also shared a demonstration of its smart parking solution-a robust, reliable and cost-effective solution. We were subsequently invited to the Smart City Solutions Workshop held in Kolkata, and later an Industry Consultation Workshop held in Pune to discuss smart governance roadmaps and the IT vision. We showcased our end-to-end solution for car parking occupancy detection and management which uses field mounted Wi-Fi IP-based cameras for both outdoor and indoor parking. This was well-received by the country's top infrastructure consultants, private companies and other major government agencies. Two other events provided an opportunity for us to showcase other smart city solutions as well: Our smart healthcare solution for remote patient monitoring at ASSOCHAM'S 'International Technology Summit 2015, and our eGovernment solution at the International Conference on Sustainable Habitat and Smart Cities in Jaipur. Going forward, our R&D team will be totally focussed on integrating our IoT solutions to those of leading smart cities system integrator partner platforms. Government Mindteck has been working with US state and local Governments since 1999. We have successfully executed numerous projects in health and human services, education, constituent services, and public safety in the following US States: Pennsylvania, Texas, Michigan, Massachusetts, Oregon, District of Columbia, Wisconsin, California, West Virginia, New York, New Hampshire, and Florida. We have a strong history of delivering projects comprising application development, program and project management, business analysis, testing, strategic consulting and professional services. In India, we are also continuing to implement the statewide E-Nagarpalika project won last year. Other key highlights include: • Winning a multi-year contract for a government department, and portal development for a large governmental organization in Bahrain. • Winning a SharePoint contract with a large government export finance institution in India. CENTERS OF EXCELLENCE Storage Testing Mindteck's Storage Center of Excellence (CoE) has a long-term vision for the storage product line with a well-structured implementation plan. We have the capacity and capability to offer diverse range of storage engineering services and leading storage solution vendors have benefited from our comprehensive quality assurance. Our Storage Testing CoE is primarily aimed at providing the skills, people, processes and infrastructure to enable our customers to build and enhance product quality in the storage space. For over a decade, Mindteck has built comprehensive expertise in storage functional testing, automation, performance testing, system testing and certification testing — especially in the Storage Area Network (SAN), Network Attached Storage (NAS) and unified storage space, in tandem with multiple storage product vendors. Wireless and Smart Energy Mindteck continues to focus on providing monitoring and control solutions by designing blocks required for wireless connectivity for IoT. Our current focus is on control nodes, gateways with multi-technology connectivity and webserver/ applications for support over the cloud for building automation and energy-efficient solutions across various industry verticals. We won a new project with an existing client in the Solar PV business for integrating a new module and also secured extensions for their application support. With mobile applications becoming a part of every enterprise solution, Mindteck has built mobility expert centers with deep skills in developing both hybrid and native mobile applications on iOS, Android and Windows smart phones. As part of this initiative, we have groomed a team of ten members in various aspects of mobility, including HTML5 and Java Script-based hybrid application development using tools like Cordova and PhoneGap, native application development on iOS using Xcode/Objective C and native Android development using Eclipse and Android Studio/Java. We have also nurtured the back-end development related to mobility using Jason-based Web Services, and also proprietary protocols. Based on this CoE initiative, we acquired a few customer projects and developed interesting and involved mobile applications in the smart energy, medical and infotainment areas. Some of these applications were deployed in Google Play Store, Apple iTunes and the Windows Store. Medical Devices Our CoE initiative based out of our Kolkata Development Center has made further in-roads into value development. We developed expertise in the medical data exchange protocols such as HL7 and DICOM, medical data security aspects involving Federal Information Processing Standard (FIPS)140-2 and Health Insurance Portability and Accountability (HIPAA), and FDA-recommended development guidelines. We have nurtured and worked with a wide set of medical vital parameters and gathered significant expertise on using medical data simulators. Life Sciences With two state-of-the-art, in-house analytical instrument laboratories, we are capable of delivering software and hardware solutions, executing R&D assignments, and conducting analytical testing on a variety of instruments for our customers. Our Life Sciences CoE, combined with analytical domain experts, provides the requisite knowledge, valuable insights, and quality to our service offerings. Change in Nature of Business There were no changes in the Nature of Business of the company during the year. 5. QUALITY At Mindteck, we believe "Quality is the result of a carefully constructed cultural environment. It has to be fabric of the organization, not part of the fabric". - Phill Crosby Mindteck's Quality Management System (QMS) is a collection of business processes focused on consistently meeting customer requirements and enhancing their satisfaction. Mindteck continues to adhere to ISO certifications 9001:2008, ISO 13485:2003, ISO 27001:2013 and CMMI-DEV Version 1.3 Maturity Level 5. Mindteck's appraisal at CMMI-DEV Version 1.3 Maturity Level 5 is a testament to our corporate commitment and attention to quality, providing significant benefits to our clients and our employees. We have leveraged CMMI-DEV Version 1.3 Maturity Level 5 to achieve improved customer satisfaction, and ultimately further profitability and growth. ISO certifications demonstrate Mindteck's ongoing commitment to delivering a consistent level of quality to customers through our well-defined process and procedures. Mindteck is enterprise-wide certified against ISO 9001:2008 (Quality Management) and continues to hold domain-specific quality certification ISO 13485:2003 (for Medical Devices). This assures our commitment to providing value to our clients through process-driven innovation principles at every stage of medical device development and design. Mindteck understands that the confidentiality, integrity, and availability of information are vital to business operations and our own success. We use a multi-layered approach to protect key information by constantly monitoring and improving our applications, systems, and processes to meet the growing demands and challenges of dynamic security threats. In recognition of our security efforts, during the year 2015-16, Mindteck was recertified for ISO 27001:2013-Information Security Management System. 6. INFRASTRUCTURE Mindteck has offices in the US, UK, Singapore, Malaysia, Philippines, Bahrain and India. There are also four Development Centers equipped with R&D laboratories across the globe. The infrastructure includes space for workstations, conference rooms, meeting rooms, labs and a world-class communication system. The innovative 'best shore delivery model' has provided our customers with a mix of onsite, offshore, near shore, offshore-onsite and other hybrid delivery options across geographies, for faster and more efficient delivery of quality services. 7. SUBSIDIARIES On March 31, 2016, Mindteck had six wholly-owned subsidiaries: Mindteck, Inc. (US), Mindteck Middle East Ltd. S.P.C. (Bahrain), Mindteck Software Malaysia SDN. BHD. (Malaysia), Mindteck Singapore Pte. Ltd. (Singapore), Mindteck (UK) Limited (UK), and Chendle Holdings Limited (British Virgin Islands). Mindteck (UK) Limited has two subsidiaries - Mindteck Germany GmbH (Germany) & Mindteck Netherlands B.V. (Netherlands) and Mindteck Singapore Pte. Ltd. has one subsidiary-Mindteck Solutions Philippines, Inc. (Philippines). The Consolidated Financials have been audited and form part of this Annual Report. The financials of the subsidiaries have also been audited by the respective statutory auditors. The Consolidated Financials have been prepared and audited in strict compliance with applicable Accounting Standards and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 as prescribed by SEBI. All information, including (a) capital (b) reserves (c) total assets (d) total liabilities (e) details of investment (except in case of investment in the subsidiaries) (f) turnover (g) profit before taxation (h) provision for taxation (i) profit after taxation and (j) proposed dividend as directed by the Ministry of Corporate Affairs, has been disclosed in the Consolidated Balance Sheet. Financial Highlights with the Indian rupee equivalent of the figures given in the foreign currency, along with exchange rate as on closing day of the financial year, and the statement pursuant to Section 129 (3) in Form AOC-1, forms part of this Annual Report as Annexure-1. Further, the Company undertakes that the annual accounts of the subsidiary companies and the related detailed information will be made available to any investor seeking such information at any point of time. The annual accounts of the subsidiary companies and related detailed information will also be kept for inspection by any investor at Mindteck's registered office and that of the respective subsidiary companies. We shall furnish a hard copy of the accounts of subsidiaries to any shareholder on demand and a soft copy of accounts is available on the Investors section of our website www.mindteck.com . The Holding, as well as Subsidiary companies, regularly file the applicable data to the various regulatory and government authorities, as and when required. None of the Subsidiaries, Joint ventures or Associate companies ceased during the year. 8. RELATED PARTY TRANSACTIONS All Related Party Transactions that were entered during the financial year were on an arm's length basis and in the ordinary course of business. There were no material significant Related Party Transactions made by the company with Promoters, Directors, Key Managerial Personnel or other designated person except with its wholly-owned subsidiary. The particulars of contracts or arrangements with related party are attached in Annexure-2. 9. AWARDS AND RECOGNITION Mindteck is among the select group of global companies appraised at CMMI-DEV Version 1.3 Maturity Level 5 from CMMI Institute. It is enterprise-wide certified against ISO 9001:2008—Quality Management and continues to hold domain specific quality certification ISO 13485:2003 for Medical Devices. In recognition of our security efforts, during the year 2016, Mindteck was certified for ISO 27001:2013-Information Security Management System. 10. LITIGATION No material litigation is outstanding as on March 31, 2016 except one recovery suit filed in connection with advance payment made for the proposed office premises, which was not occupied by the Company. 11. CHANGES TO SHARE CAPITAL The Board of Directors of the Company allotted 1,600 Equity Shares on May 29, 2015, 3,966 Equity Shares on August 21, 2015, 76,398 Equity Shares on November 13, 2015 and 28,166 Equity Shares on February 12, 2016 pursuant to allotment of shares under the Employee Stock Option Schemes. Consequently, the outstanding, issued, subscribed and paid up Equity Shares increased from 25,062,971 to 25,173,101 as on March 31, 2016. 12. BOARD COMMITTEES The details of various Committees of the Board are provided in the Corporate Governance Report. 13. FIXED DEPOSITS The Company has not accepted any fixed deposits and, as such, no amount of principal or interest was outstanding as on the Balance Sheet date. 14. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS Loans, Guarantees or Investments covered under Section 186 of the Companies Act, 2013 forms part of the notes to the Financial Statements provided in the Annual Report. 15. TRANSFER TO RESERVES During the year, the Company transferred Rs. 259,274,181 to its reserves. 16. DIRECTORS As per Article 112 of the Articles of Association of the Company, Mr. Yusuf Lanewala retires by rotation as Director in the ensuing Annual General Meeting and, being eligible, offers himself for re-appointment. A brief resume of Mr. Yusuf Lanewala is included in the Notice for the Annual General Meeting. Mr. Yusuf Lanewala was appointed as Chairman of the Company for a period of three years effective from October 01, 2013. Further, he was also re-appointed as Managing Director and CEO of the Company for a period of three years effective from April 01, 2014. Mr. Guhan Subramaniam was appointed as an Additional Independent Director effective from May 20, 2016. The resolution seeking approval of members for appointment of Mr. Guhan Subramaniam as Independent Director forms part of the Notice for the 25th Annual General Meeting. A brief resume of Mr. Guhan Subramaniam is included in the Notice for the Annual General Meeting. Mr. Meenaz Dhanani was appointed as an Executive Director for a period of three years effective from October 04, 2013 with all necessary approvals. The current term of Mr. Meenaz Dhanani as an Executive Director of the Company expires on October 03, 2016. Hence, as per the recommendation of Nomination & Remuneration Committee and Board of Directors, Mr. Meenaz Dhanani shall be re-appointed as an Executive Director with effect from October 04, 2016 for a period of three years subject to the approval of Central Government. The Resolution seeking the approval for appointment of Mr. Meenaz Dhanani as an Executive Director forms part of the Notice for the 25th Annual General Meeting. A brief resume of Mr. Meenaz Dhanani is included in the Notice for the Annual General Meeting. Declarations by Independent Directors All Independent Directors have given declarations to the effect that they meet the criteria of independence as laid down under Regulation 16(1)(b) & 25 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and SubSection 6 & 7 of Section 149 of Companies Act, 2013. Board Evaluation Pursuant to the provisions of the Companies Act, 2013, the Board has carried out an annual performance evaluation of its own performance, the Directors individually, as well as the evaluation of the working of its Audit and Nomination & Remuneration Committee. Board Diversity The Company places great emphasis on the principle of diversity, including gender diversity. Diversity throughout the organization makes great business sense. The Company maintains that appointments to the Board should be based on merit as well as complementing and expanding the skills, knowledge and experience of the Board as a whole. Policy on Directors' appointment and remuneration Your company has an appropriate mix of Executive and Independent Directors to maintain the independence of the Board, and separate its functions of governance and management. As on date, the Board consists of seven members, two of whom are Executive or Whole-time Directors, and five are Independent Directors, including one woman Director. The Board periodically evaluates the need for change in its composition and size. The policy of the Company on Directors' appointment and remuneration, including criteria for determining qualifications, positive attributes, independence of a Director and other matters provided under Sub-section (3) of Section 178 of the Companies Act, 2013, adopted by the Board, is appended as Annexure-3 to the Board's report. We affirm that the remuneration paid to the Directors is as per the terms. Number of meetings of the Board The Board met four times during the Financial Year, the details of which are given in the Corporate Governance report that forms part of this Annual Report. The intervening gap between any two meetings was within the time prescribed by the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. Vigil Mechanism/Whistleblower policy The Company has established a Whistleblower policy for Directors and employees to report their genuine concern. The policy is annexed as per Annexure-4. 17. KEY MANAGERIAL PERSONNEL There was no appointment or resignation of Key Managerial Personnel during the FY 2015-16. 18. AUDITORS Statutory Auditor At the Annual General Meeting held on August 14, 2014 members of the Company appointed Statutory Auditors, M/s. B S R & Company, Chartered Accountants, Bengaluru, who have confirmed their eligibility and willingness to accept office. In terms of the first proviso to Section 139 of the Companies Act, 2013, the appointment of the auditors shall be placed for ratification at every Annual General Meeting. Accordingly, the appointment of M/s. B S R & Company, Chartered Accountants, as Statutory Auditor of the Company, is placed for ratification by the shareholders. In this regard, the Company has received a certificate from the auditors to the effect that if they are re-appointed, it would be in accordance with the provisions of Section 141 of the Companies Act, 2013. Secretarial Auditor CS S Kannan, Practicing Company Secretary, was appointed to conduct the Secretarial Audit of the Company for the FY 2015-16, as required under Section 204 of the Companies Act, 2013 and Rules thereunder. The Secretarial Audit Report for the FY 2015-16 forms part of the Annual Report as Annexure-5 to the Board's Report. The Board noted the reports given by Statutory Auditor and Secretarial Auditor and confirmed that there are no qualifications, reservations or adverse remarks or disclaimers. 19. EXTRACT OF ANNUAL RETURN In accordance with Section 134(3)(a) of the Companies Act, 2013 an extract of the annual return in the prescribed format is appended as Annexure-6 to the Board's Report. 20. SIGNIFICANT AND MATERIAL ORDERS There were no significant and material orders passed by the Regulators or the Courts or Tribunals impacting the going concern status and Company's operation in the future. The details of Tax Matters are disclosed in Annexure to Auditor's Report in the Standalone Financial Statements. 21. INTERNAL FINANCIAL CONTROL The Board has adopted the policies and procedures for ensuring the orderly and efficient conduct of its Business, including adherence to the Company's policies, safeguarding of its assets, prevention and detection of frauds and errors, accuracy and completeness of the accounting records, and timely preparation of the reliable financial disclosures. 22. INDEPENDENT DIRECTORS FAMILIARISATION PROGRAMME Mindteck has an established familiarisation programme for its Independent Directors. The business heads, Executive Directors and Company Secretary make presentations on business models, nature of industry and its dynamism, the roles, responsibilities and liabilities of Independent Directors, etc. Further, updates on business, statutory law and industry are made available to Independent Directors, especially to the Audit Committee members on an ongoing basis by internal teams, Statutory and Internal Auditors on a quarterly basis. 25. RISK MANAGEMENT POLICY The Company has a robust Enterprise Risk Management (ERM) framework to identify and evaluate business risk opportunities. This framework seeks to create transparency, minimize adverse impact on the business objectives and enhance the Company's competitive advantage. The business risk policy defines the risk management approach across the enterprise at various levels, including documentation and reporting. The model has different modes that help in identifying risk trends, exposure and potential impact analysis at a Company level and also separately for different business segments. The Company has identified various risks and also has mitigation plans for each risk identified. 26. CORPORATE GOVERNANCE REPORT Mindteck recognizes good Corporate Governance and is committed to sound corporate practices based on conscience, openness, fairness, professionalism and accountability, for the benefit of its stakeholders and for long-term success. We adhere to standards set by SEBI for Corporate Governance practices as per SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and a report on Corporate Governance pursuant to Regulation 34 read with Schedule V of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 forms part of this report in Annexure-9. 27. MANAGEMENT DISCUSSION AND ANALYSIS The Management Discussion and Analysis is attached to this Annual Report. 28. DIRECTORS' RESPONSIBILITY STATEMENT To the best of our knowledge and belief, and according to the information and explanations obtained by us, your Directors make the following statements in terms of Section 134 (3)(c) of the Companies Act, 2013: a) that in the preparation of the annual financial statements for the year ended March 31, 2016, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any; b) that such accounting policies as mentioned in Note 2 of the Notes to the Financial Statements have been selected and applied consistently. Judgment and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2016 and of the profit of the Company for the year ended on that date; c) that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; d) that the annual financial statements have been prepared on a going concern basis; e) that proper internal financial controls were in place and that the financial controls were adequate and were operating effectively; f) that systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively. 29. WE CARE At Mindteck, care is rooted in the ways we engage and enable, and fundamental to the way in which we build and nurture relationships, champion others, foster careers in technology, and steward community causes. In 2011, we established WE CARE as a framework for honouring our commitments and making a lasting difference both inside and outside the organization. The cornerstones are Knowledge, Opportunity, Advocacy, Inclusion, Goodwill and Respect. Constituents include Shareholders, Clients, Employees, Partners and Communities. During FY 2015-16, we made further strides forging positive brand associations, building stronger relationships and innovating within the WE CARE framework: Mindteck Academy, an IT workforce development solution, builds opportunities for learning, hiring and economic growth in the communities we serve. • The underserved-qualified military veterans, recent college graduates, displaced workers-learn the technology skills required for gainful employment; • Companies and government entities struggling to overcome IT skill shortages hire local citizens who have been trained to exact specification and need; • Communities grow as their unemployed or underemployed are hired or retrained; During the year at hand, Mindteck Academy conducted its second classroom-based, enterprise-level Java Academy, and also held its first Business Analyst Book Camp, onsite for a client in the Midwest. Additionally, it developed an online, live, instructor-led (OLL) Java Academy through an alliance in India, and enhanced www.mindteckacademy.com features and functionality-including online application and assessments, lead forms, and live chat. The focus for 2016-17 encompasses driving profit from both the onsite and online course offerings, increasing online visibility, and furthering its efforts to become an authoritative resource and thought leader in the IT training and staffing industry. Consultant Care focuses on retaining and developing our valued people assets who work onsite at client locations. On an ongoing basis, our Brand Ambassadors assist, educate and engage consultants in multiple states throughout North America and Canada. In 2015-16, our Brand Ambassadors expanded face-to-face outreach, increased referrals and placements, and helped generate business leads for the US West and Central Southeast regions. In the coming year, Consultant Care will focus on expanding to select global regions, cultivating additional ambassador-consultant relationships to deepen penetration and loyalty, opening new remarketing and referral channels, and deploying more nurturing/loyalty tactics. Transition Care provides opportunities for seasoned technology professionals who have been a victim of restructuring to continue benefiting from their wealth of experience and knowledge. We match their skillsets to our niche needs to help build a stronger Mindteck. Transition Care is also a resource for clients who want to preserve their reputation and employee morale during a restructuring, as well as for outplacement firms that want to reduce their roster of displaced IT professionals. Highlights during 201516 include: Participation in two AARP (formerly American Association of Retired Persons) Virtual Career Fairs which garnered 107 resumes, two viable candidates and one hire; Participation in a client-related outplacement forum of 20 participants which garnered two viable candidates with one pending hire. The key focus areas for 2016-17 include revenue generation from partnership relationships with outplacement firms, continued outreach to our client base, and furthering our efforts to hire seasoned sales and technical support talent. Client Care, which focuses on the client constituent of WE CARE, is a customer experience (CX) endeavour designed to engage and enable clients, as well as champion a caring culture and business approach. The Client Care Ambassador is a client advocate, operating both cross-functionally and independently across the organization. Key efforts during the year focused on: Supporting process improvements, and delivery and service performance; Liaising with the US sales teams; Developing CX communications training workshops. An expansion of these efforts, along with increased client engagement, will foster additional advocacy, loyalty and credibility during 2016-17. 30. CSR INITIATIVES Our Corporate Social Responsibility (CSR) commitment is part of WE CARE. We believe that through our successes around the globe, we should give back in kind and deed. We do what we can do to create shared value and steward our resources to create hopeful tomorrows for others. Core pillars of our CSR endeavours are Global Education and Local Targeted Giving. We believe in the empowerment of knowledge and how it helps to bring positive change and stability to society as a whole; we also know that giving to local organizations that embrace the interests and values of the communities we serve builds stronger communities and makes business sense. 31. MINDTECK EMPLOYEES STOCK OPTION SCHEMES Mindteck believes in the policy of enabling Mindteckians to participate in the ownership of the Company and share in its wealth creation as they are responsible for the management growth and success of the Company. The Company has three Employees Stock Option Schemes viz. Mindteck Employees Stock Option Scheme 2005, Mindteck Employees Stock Option Scheme 2008 and Mindteck Employees Stock Option Scheme 2014. (a) Mindteck Employees Stock Option Scheme 2005 During the year ended March 31, 2016, under this Scheme, the Company granted 69,900 options on May 29, 2015 at an exercise price of Rs. 79.95 per share, 48,600 options on August 10, 2015 at an exercise price of Rs. 81.00 per share, 27,600 options on November 13, 2015 at an exercise price of Rs. 130.80 per share and 11,700 options on February 12, 2016 at an exercise price of Rs. 81.60 per share, and also issued and allotted 44,900 shares to eligible employees. There has been no variation in the terms of ESOP Scheme during the year. (b) Mindteck Employees Stock Option Scheme 2008 During the year ended March 31, 2016, under this Scheme, the Company granted 10,500 options on November 13, 2015 at an exercise price of Rs. 130.80 and it has issued and allotted 65,230 shares to eligible employees. There has been no variation in the terms of ESOP Scheme during the year. (c) Mindteck Employees Stock Option Scheme 2014 No options were granted under this Scheme. The Details of the Employees Stock Option Schemes as required under Regulation 14 of SEBI (Share Based Employee Benefits) Regulations, 2014 are displayed on the website of the Company. (Weblink: <http://> www.mindteck.com/pdf/policies/Disclosures- pursuant-to-SEBI-Regulations-2014.pdf) 32. MINDTECK EMPLOYEES WELFARE TRUST The Mindteck Employees Welfare Trust was set up in the year 2000 to implement the Company's Share Incentive Scheme. As on March 31, 2016, the said Trust holds 416,000 shares of the Company and has not yet granted any shares to the Company's employees under the said scheme. 33. CONSERVATION OF ENERGY, RESEARCH AND DEVELOPMENT, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE AND OUTGO Particulars that are required to be disclosed under subsection (3)(m) of Section 134 of the Companies Act, 2013, read with the Companies (Accounts) Rules, 2014 are set out in Annexure-10 included in this Report. 34. ACKNOWLEDGEMENTS The Directors place on record their appreciation of cooperation and continued support extended by customers, shareholders, investors, partners, vendors, bankers, the Government, and statutory authorities for the Company's growth. We thank employees at all levels across the Group for their valuable contribution in our progress and look forward to their continued support. for and on behalf of the Board of Directors Yusuf Lanewala Chairman and Managing Director (DIN-01770426 Bengaluru, India Date: May 20, 2016 |