MANAGEMENT DISCUSSION AND ANALYSIS

CORPORATE PROFILE

Zensar is a leading digital solutions and technology services company that specializes in partnering global organizations across industries on their Digital Transformation Journey. A technology partner of choice, backed by a strong record of innovation, credible investment in Digital solutions; assertion of c o m m i t m e n t t o c l i e n t ' s s u c c e s s , Z e n s a r ' s combrhensive range of digital and technology services and solutions enable its customers to achieve new thresholds of business performance. Zensar, with its experience of delivering excellence and superior client satisfaction through myriad technology solutions is uniquely positioned to help them surpass challenges around running their existing business most efficiently, helping in their legacy transformation, and planning for business expansion and growth through innovative and digital ways.

DIGITAL

Zensar helps clients deliberate not only on executing Digital initiatives but also realizing the Return on Digital. The Return on Digital is about focusing on business outcomes. It is about focusing on key aspects like Automation, Customer Experience, Business Resilience, Standardization etc. of the core back end systems to help realize the Digital World of today and tomorrow. In summary, for enterprises to be resilient and successful in the long run-they will need to focus on three aspects-Digital Agility, Cross-over IT and fundamentally, the stability of core enterprise systems. Digital is the business. Digital delivery is fundamentally aligned to business outcome, and Zensar's business model is evolving to meet the pace of change in its customer's customer base.

GEOGRAPHIC NETWORK

Our business is well sbrad across 29 global locations with brsence in the key regions of US, Europe, Africa, Middle East, India and APAC. Having 11 global delivery centers, we support customers 365 days, 24x7. We remain well-entrenched, with both managerial and technical talent on ground across these worldwide markets. This outlines our objective of being close to our customers for optimum delivery results.

SERVICES AND CAPABILITY

Your company is well poised to help global enterprises deliver across both traditional and new and emerging technologies equally. Aimed at helping customers navigate through complexity in their IT environment, our solutions and capabilities are designed to leverage digital tools and technologies to generate maximum outcomes.

Zensar's services and capabilities portfolio spans across both the traditional to digital tools. Our services include Consulting, Business Application S e r v i c e s , E n t e r p r i s e S o l u t i o n s , E n t e r p r i s e  Collaboration Services, Testing and Assurance Services, BPM, Infrastructure Management Services and Digital Enterprise.  Our objective has been to keep innovating with agile and speedy solutions, having a clear goal of extracting business outcomes for the customers within clearly defined timelines. This route helps us maintain the competitive edge as well as deliver consistent enhanced services.  With new propositions in the realm of digital and cloud led capabilities, analytics, automation we will continue to build deeper relationships as we strive ahead to partner customers across key technology innovations and platforms.

CLIENTS OVERVIEW

In the last year, your company has seen growth from existing client engagements and the addition of new ones across all the key regions. Some of our existing customers have taken ahead the relationship with extended engagements and new implementations sbrad over the next 3-5 years. The year has also seen some key partnerships achieving key milestones in terms of the kind of work done and the number of years completed. This fact clearly underlines our continued commitment to industry leading service excellence. Some of the key additions were in the space of ecommerce, digital, retail, manufacturing and utilities.

The common thread remains the renewed focus on enhanced capabilities across all digital tools and technologies, coupled with new methodologies like DevOps and Agile.

We have also seen significant work done is the realm of organization wide implementation of key technology solutions. Our strategy will continue in introducing innovative ways to engage with customers to help achieve specific business outcomes and enable them to be competitive in the marketplace.

T R A N S F O R M A T I O N A L C U S T O M E R MANAGEMENT AND SERVICE DELIVERY EXCELLENCE

One of the key differentiators of the Zensar approach to client management lies in our partnership-led engagement model. Your company goes beyond the scope, to be a guide and an execution driver at all times of the project lifecycle. It is this one single factor that has helped us build long-standing relationships with leading global enterprises.

Many of our existing customers proactively seek our strategic inputs as they look towards embarking on their digital journey. Our teams are cognizant of the critical business impact, each project must have on the customer's business objectives. This helps us in going beyond the norm and becoming a true strategic IT partner, rather than remaining a service provider.

Your company intends to continue building on the strength of its excellent service delivery culture and imbibe leading best practices to remain ahead of the curve at all times. Our global delivery model will see increased attention and training to ensure that customers glean the best from us.

CURRENT STRENGTH AND FUTURE PROJECTIONS

In the midst of a challenging business environment, your company has continued on its growth trajectory, building on key customer relationships across all our regions of operations. We saw our strategic acquisition of one of the largest Oracle ATG and Endeca partners, Professional Access (PA) contribute significantly to our e-commerce success story. Deeper learnings and company-wide integration resulted in a competitive go to market positioning in the burgeoning ecommerce and Oracle space. Oracle continued to be a leading arrowhead with us having the largest Oracle Commerce practice worldwide.

Digital transformation services and offerings enabled our customers to leverage business outcomes that were strategic and long-ranging. Vertical offerings continued to drive growth with differentiated capabilities in retail, manufacturing and Oracle setting the foundation for expansion. We were able to offer social listening benefits to more industries like insurance who are looking to engage increasingly with customers using the digital medium.

Our FY16 3x3x3 strategic focus in the 3 geographies of the US, UK and Africa; key verticals of retail, manufacturing and insurance; across application management services, digital and infrastructure management helped us in remaining profitable, amidst a volatile market.

Digital and ecommerce proved to be one of the key contributors to our growth. We were able to empower an increased number of customers leverage new and emerging trends, while remaining secure and stable at the backend.

Oracle offerings and in particular, Oracle Cloud remained one of our biggest focus areas through the past year. We continued building on market trends of analytics, mobility and new organizational approaches to technology adoption. Our Pune campus has Zensar's first innovation platform of Oracle Cloud offerings. Our Oracle e-Commerce positioning was strengthened by combining Zensar's Oracle EBS, Oracle Retail and Fusion Middleware solutions for global clients with Professional Access (PA) expertise in these areas.

Zensar's Infrastructure Management practice, with focus on data centre management, security and compliance, network and end user computing saw increased engagements with key customers. The year saw this business gain from enterprises investing in next-generation solutions around end user computing, mobility and cloud. Your company was positioned in the July 2015 Gartner Magic Quadrant for Data Center Outsourcing and Infrastructure Utility Services, North America. The industry-wide recognition has provided us with increased visibility and thought leadership. Our key levers of expansion and growth continue to remain our consistent delivery excellence, in-depth expertise and digital brparedness. Backed by increasing demand for cloud-led services, we are well positioned to deliver on leading market enterprise technologies with our consulting expertise and delivery networks.

Talent building, key initiatives to retain and train existing talent across levels was an important focus area for us in 2015 and will continue to remain going forward too. In order to foster a culture of innovation and growth, your company did away with the bell curve system of performance appraisals. Introduction of globally recognized systems like 360 degree feedback, customized training and learning roadmaps as well as a newly formed HR operations team, your company is well posed to build the future workplace of choice.

APAX PARTNERS

Marina Holdco (FPI) Ltd., a fund advised by Apax Partners acquired a 23.2% stake in your company in line with our objective to add significant value in the next phase of our growth. Apax Partners is an independent global partnership focused solely on long-term investment in growth companies having USD 40 billion of portfolio investments across leading global companies. Your company will leverage their successful track record in the technology services space, gaining access to a wider global customer base and best industry practices.

THE INDUSTRY LANDSCAPE IN 2016 – 17

Global IT sourcing market grew at 9-10% in 2015, in comparison to the brvious year, with India contributing 67% to the overall growth. The worldwide IT BPM spend was USD 1.2 trillion. Global IT spend (excluding hardware) stood at more than USD 160 billion.

One of the highlights going forward across the way global enterprises plan their IT budgets includes 51% spend towards new and digital technologies like cloud, mobile and big data. According to industry estimates, approximately 67% of the Global 2000 companies will have digital transformation at the core of their corporate planning and strategy. Market trends clearly lead with digital and bi-modal IT taking consumption of technology to a new adoption rates across multiindustry enterprises.

WORLDWIDE IT-BPM SPEND

The worldwide IT-BPM spend through 2015 saw a growth of 0.4% amounting to USD 1.2 trillion. The growth curve remained flat, as a result of the multiple volatilities faced by the worldwide IT sector. In contrast to the flat global spend trends, the outsourcing services segment continued on a growth path reporting a growth of 8.5%. India retained the top spot as the leading destination for outsourcing services, commanding 56% share globally. Last year saw an increase in the number of worldwide delivery centres at 169 in total, at a growth rate of 13%, with India and Europe standing at 55% share. This was primarily in new and futuristic technologies like automation, robotics, IoT, connected enterprises and more. All digital technologies, including cloud, mobility, and social media are playing a pivotal role in driving new ways of implementing technology.

• BFSI and manufacturing remained the leading verticals on the growth path like last year at 60%

• Healthcare, retail, utilities and government increased adoption at the rate of 12% across digital technologies like social, mobility, analytics and the cloud

• CADM, as a segment saw maximum growth driven by digital transformation and mobility

• Bundled services were responsible for the average deal per value

Global IT sourcing market grew at 9-10% in 2015, with India contributing 67% to the overall growth. The year saw increased M&A activity with buyouts, spinoffs, mergers and acquisitions adding to various industrywide changes. Some IT players saw organic and inorganic growth and business restructuring in some companies.

IT services deals saw a significant growth over 2014 at 57% with an increase in number of deals standing at 19%. While the total number of deals decreased, there was a significant increase in the deal value size. This was a clear indicator with companies wanting to develop competitive capabilities to remain relevant and leverage the benefits of digital led market trends. America led deals grew by 50% and APAC grew 2X over the Americas. 70% of the deals were in the IT bundled and ICT services, with SMAC deals were valued at USD 2.6 billion. Europe grew at a small rate at 4%.

One of the key common denominators influencing IT decisions continued to be integration of digital technologies in different forms. The overall industry and business climate bore the brunt of multiple challenging trends–geopolitical, economy led and financial instability. Even in this tumultuous scenario, digital has contributed with interesting work being done in the area of robotics, cloud models, applications, Industrial internet and automation.

The Indian IT-BPM sector stood at USD 132 billion in 2015 and was projected to grow at 8.5% to USD 143 billion (excluding ecommerce) in 2016. This industry is expected to employ approximately 3.7 million people, constituting an addition of 200,000 individuals. The ecommerce market is expected to be USD 16.7 billion, a growth of 19% over last year. India has assumed the distinction of becoming the third largest destination for start-ups. Key contributors were IT services at 52%, BPM at 20%, ER&D and packaged software at 19% and hardware at 10%.

Indian IT-BPM exports reported a growth of 10.3%, valued at USD 108 billion. Leading drivers of the growth were ER&D and product development at 12.6%, influenced by connected devices and demands across c u s t o m e r ' s i n c r e a s i n g i n t e r e s t i n e m e r g i n g technologies. Modernization of legacy and traditional systems has seen significant increase as customers demand SMAC tools and technologies. IT services remains on the same growth path as the overall IT-BPM exports. Key technologies driving the year on year growth of 9% include analytics, BPaaS and Mobility. (Source: NASSCOM Strategic Review 2016)

VERTICAL STRATEGY DELIVERS RESULTS

Our vertical led strategy helped us to deliver more value and expertise to customers. Verticals seeing growth due to this approach include retail, manufacturing and banking, insurance. We have subject matter experts who combine technical expertise with the vertical implementation knowledge, leading to enhanced service and delivery models. We will continue to take this vertical approach ahead, strengthening it with digital led capabilities.

SERVICE LINES

Zensar continues to display consistent growth due to its combrhensive capabilities. Application management continued to contribute significantly, followed by Infrastructure management. Our digital commerce capability consists of 500 consultants globally, with 190 live implementations and more than 75 upgrades. This is a significant expansion of our market leading position.

Zensar has benefitted from consistent growth due to better operational efficiency as well as customer additions. In FY 16, your company has 2 customers in the USD 20 million segment, followed by 4 customers in the USD 10 million, 4 customers in the USD 5 million segment and an encouraging 65 customers in the USD 1million segment.

One of the clear success factors of your company is the traditional capability cutting across the new and emerging areas of digital offerings. Return on Digital will drive the next set of growth drivers for your company as we witness crossover of business and IT.

KEY PARTNERSHIPS AND ALLIANCES

Our alliances and partnerships with industry leading technology enable us to leverage industry leading point of views, expertise and solutions. Our customers gain in terms of best practices and measurable outcomes. We are Oracle Platinum Partners and have more than 2900 trained Oracle consultants across global locations. Zensar's Oracle practice delivers Oracle enterprise and digital commerce solutions to retailers and manufacturers globally. Our range of Oracle expertise encompasses the entire range of Oracle offerings and solutions. We have more than 800 successful implementations, including upgrades and global rollouts. One of the key differentiators for us continues to be in the area of developing customized solutions based on an enterprise's need. Zensar is a certified SAP Gold partner. With over 400 experienced SAP professionals globally, SAP is a critical and key growth focus area for Zensar. It has complete SAP lifecycle service capabilities across the portfolio of SAP solutions covering Applications (Financials, Supply Chain Management & Distribution, Projects Systems, Human Capital Management), Analytics (Business Intelligence with SAP Business Warehouse, SAP Business Objects) and Mobility capabilities. Zensar also focuses on clients getting the maximum value from new dimension Innovations from SAP like SAP HANA with their ERP and BW Upgrade offerings. Zensar has over the years implemented several SAP life cycle projects and assimilated deep expertise and best practices which it effectively leverages for its clients.

Zensar is also focused on building a strong ecosystem of partnerships in the digital enterprise space, with niche providers in new technologies like social media, mobility, analytics and cloud. Some of the key partnerships include with JIVE software in the area of digital collaboration.

FOCUSED COST OPTIMIZATION

Continuous initiatives and investments have been made to make Zensar's operations more cost effective. This includes better resource management, cost effective operations, financial management and improving overall operational excellence. Finding smarter ways to work, automating internal systems and processes has helped in making life across the operational eco-system smarter and more productive. We will keep focusing on internalizing and learning new industry led practices.

CUSTOMER DRIVEN INNOVATION

Your company's strategies and go to market propositions are led with a singular focus on customer centricity. We maintain our seamless service delivery excellence by constantly introducing new and innovative strategies to remain relevant for our customers. Our focus in enhanced customer service, includes continuous capability enhancement through training, new thinking into customer partnerships and a company-wide culture, where the customer is at the core of our actions. In fact, 'Customer Centricity' forms one of our value statements. We lead all our customer engagement initiatives with this guiding principle across the entire organization

ENLARGING OPERATIONAL SCOPE

Zensar understands, that in order to remain competitive and to continue being a trusted partner to our customers, we need to expand our scope of services and capabilities. Leading market indicators and changing customer demands need to be incorporated in our thinking. In order to stay ahead of the dynamically changing enterprise IT landscape, we have identified proven capabilities, narrowed our geographical markets and operate in niche industry segments. We have built a CoE led framework, strategic technology partnership led expertise and integrated our traditional offerings with new tools and technologies. This strategic approach ensures that we remain large, yet nimble to deliver.

ENABLING DIGITAL TRANSFORMATION

Your company has a consistent successful track record of providing market leading capabilities to global organizations. We are poised to deliver on critical IT systems, while helping customers benefit from disruptive digital tools. Helping enterprises to compete on global arena is our objective. Market trends are driving new accelerators of growth and expansion, for which we are clearly brpared. Steady customer partnerships, subject matter expertise, critical technical talent, broad based operations and successful implementations have put us in a frontrunner position to generate enhanced value and growth.

CORPORATE SOCIAL RESPONSIBILITY

Sustainable CSR continues to be a key focus across the organization. Our philanthropic outreach programs are mainly in the areas of Community Development, Employability Enhancement and Environment Sustenance. The last year has seen innovative ways of supporting the community across various tenets of sustainability. Some of the key initiatives included making a significant step towards advocating digital literacy under the aegis of government of India's National Digital Literacy Mission (NDLM). This included the launch of Pune's first digital literacy bus equipped with computers with the objective of teaching basic internet literacy to communities. Another initiative was the launch of the first digital literacy centre in a rural area in the village of Sudumbre, on the outskirts of Pune. Leveraging the strength of Zensar volunteers, all CSR activities display the spirit of agency.

SEGMENT-WISE PERFORMANCE

For the financial year under consideration, your Company has reported results of the Segments viz. A p p l i c a t i o n M a n a g e m e n t S e r v i c e s ( A M S ) , Infrastructure Management Services (IMS) and Product & Licenses.

Secondary segmental reporting is done on the basis of geographical location of clients.  The performance of these segments has been separately reported in Note no. 29 of the Consolidated Financial statements of the Company.

ENTERPRISE RISK MANAGEMENT

The Enterprise Risk Management program at Zensar aims at protecting shareholder value and your company's business from potential risks from various environments the company operates in. The risk management program covers end-to-end Risk governance / management process. including identification, prioritization, monitoring and reporting of risks affecting various business units and geographies.

The program covers compliance with applicable government and regulatory requirements, potentials risk area in various economic, social and industry environments Zensar operates. The risks are identified along with leading key risk indicators and assigned Risk Champions to monitor such risks as well as conducts periodic assessment of these risks. The company routinely reassesses its Risk governance framework, seeking professional advice from experts in risk advisory field to ensure the framework is updated and effective at all times. Risk management is a key business driver of Zensar's strategy in competitive market place and is linked to plan of achieving its longterm goals and overall governance under the supervision of the Board of directors. Your company has set up Risk Management Council, which is responsible for identifying various risks, prioritize them, and monitoring potential threats and occurrences based on various key indicators. This council works in consultation with the Board of Directors, Management Council Members, respective Function and Country heads.

Client Risk

Excessive exposure to particular clients have the potential to limit the company's negotiating capacity and any unfavorable change in client business may result in sudden downfall in company's revenue as well as profits. The Company is constantly de-risking by soliciting customers from different verticals and geographies.

Information Security and Disaster Recovery

The nature of business of the IT industry as well as company, around client data and technology poses a potential risk of breach of security of company's network and possible impact on its operations as well delivery work for its customers. The company takes security of customer data; it's infrastructure and network as well as company's assets very seriously.

The information security team has developed and implemented elaborate security measures, including business continuity plan, using latest technology and tools available.

Geographical Concentration Risk

Concentration of revenue from a particular country exposes the company to the risks specific to its economic conditions, trade policies, local laws, political environment and work culture. In order to curtail this risk, Zensar has not imposed any rigid limits on geographical concentration. While US continue to be the major revenue generating territory, Company's operations in South Africa, Europe also makes significant contribution to the aggregate.

Technology Obsolescence Risk

The Company operates in an ever evolving and dynamic technology environment and it is of utmost importance that the Company continuously reviews and upgrades its technology solutions and services, resources and processes so as to avoid technology obsolescence of a Company's expertise and services, posing a serious threat to the brdictability of its revenues and loss of market share. The Company continuously makes investments in new technologies, looks for suitable acquisitions with a view to keep pace with the latest developments in the technology space augment portfolio of services to clients.

Client Liability Risk

A Client Liability Risk arises in the advent of the failure or deficiency in services rendered to a particular client. Any such deficiency could result in a claim for damages against the company. Zensar pays adequate attention to the negotiation and documentation of contracts wherein an effort is made to limit the contractual liability for damages arising out of errors, mistakes or omissions in service delivery. Also the company has robust quality controls in place to ensure regular monitoring and tracking of delivery operations. In addition, Zensar has taken sufficient insurance cover for protection from such professional liability as well as errors and omissions.

International Exposure Risk

As the company's headquarter is in India, this could result in regulatory, visa and tax complications, leading to unexpected delays in performing contractual obligations and potential non-compliance of local laws of the country company conducts business. In order to m i t i g a t e t h i s r i s k , c o m p a n y ' s m a n a g e m e n t understands the local country environments systematically, with the help from experts and professional agencies, which has helped reduce exposure to these risks.

Human Resource Risk

Global economy has made available more and more opportunities to the skilled human resource. Due to resource intensive business model, IT service organizations are heavily impacted by this inherent risk. In India, there is uptick in attrition in companies operating in IT Industry. Better opportunities in Market place lead to attrition in human resources, which could drain valuable knowledge and customer experience and, hence, potentially have an adverse impact on revenues. The Company continuously creates and maintains a pool of world-class resources by recruiting best talents from leading colleges and industry, imparting efficient & effective training, blending them into productive resources by creating challenging opportunities on projects. The company also undertakes surveys and feedback from employees to create better working environment as well as number of initiatives are taken to make Zensar a great place to work.

Foreign Currencies Risk

Global economic situation continues to remain volatile with and since India IT industry is largely focused on markets outside India, fluctuations in major currencies due to unstable economic conditions impact revenue and profits of the IT industry. This trend is expected to continue in near to medium term with added complexity of cross -currency movements. The Company hedges a major part of the risk on exchange rate by entering into forward cover for brdictable inward remittances minimizing the risks associated with foreign currency rate fluctuations.

INTERNAL FINANCIAL CONTROL AND THEIR ADEQUACY

Compliance with the best of the breed practices and regular management oversight make the internal controls at Zensar strong. Strong internal controls minimize the risk of frauds by introducing effective checks and balances into the financial system. Zensar's Audit Committee along with Management oversees financial controls and their implementation on a regular basis. The Audit Committee meetings, reviews and verification of controls ensure that the Terms of Reference given by the Board of Directors are adhered to. The internal audit is carried out by one of the leading audit and risk advisory firm. s, along with the key management personnel.

Internal Financial Control and Their Adequacy

Compliance with the best practices and regular management oversight make the internal controls at Zensar strong. Rigorous testing of the internal controls is one of the strengths of the organization. Strong internal controls minimize the risk of frauds by introducing effective checks and balances into the financial system. Zensar's Audit Committee along with Management oversees financial controls and their implementation on a regular basis. The internal audit is carried out by one of the leading audit and risk advisory firm.

FINANCIAL MANAGEMENT

Accounting principles consistently used in the brparation of financial statements are also consistently applied to record income and expenditure in individual segments.

1. Other Income

Other Income comprises dividends from mutual fund investments, interest on bank deposits and others. Other income during the current year was Rs. 44.55 Crores as against Rs. 26.95 Crores in the brvious year.

2. Share Capital

During the year, Company has allotted total 304,654 equity shares fully paid up of Rs. 10/- each. Out of these, 63,412 equity shares were allotted under 2002 Employees Stock Option Scheme” and 241,242 numbers of equity shares were allotted under “2006 Employees Stock Option Scheme”.

3. Reserves and Surplus

The Company's reserves and surplus as on 31st March 2016 were Rs. 1381.16 Crores as against Rs. 1112.65 Crores as on 31st March 2015.

4. Long Term Borrowings

As of 31st March 2016, Long term borrowings were Rs. 0.77 Crores (Previous year Rs.1.49 Crores) out of which Finance lease liabilities were Rs. 0.77 Crores (Previous year Rs.1.49 Crores).

The current maturities of long term finance lease obligation amounting to Rs. 1.20 Crores (Previous year: Rs.1.91 Crores) which is shown under Other Current Liabilities.

The portion of current maturities of long term loan is amounting to Rs. Nil (Previous year: Rs. 75.00 Crores) which is payable within twelve months, is shown under Other Current Liabilities.

5. Short Term Borrowings

As of 31st March 2016, Short term borrowings of Rs. 147.31Crores (Rs. 102.69 crores taken by Zensar Technologies Inc., Rs. 31.37 Crores taken by PSI Holding Inc. and Rs. 13.25 crores taken by Zensar Technologies Limited) Previous year it was Rs. 97.16 Crores.

6. Fixed Assets

There was an increase in Net Gross Block of Fixed Assets by Rs. 23.29 Crores compared to brvious year, which is on account of acquisition of assets for ordinary business .

7. Return on Capital Employed

The return on capital employed (ROCE) for the year 2015-16 is 28.10%

8. CASH AND BANK BALANCES

The Cash and Bank Balances rebrsent the Company's balances in banks in India and overseas.

The Company also retains funds in the Exchange Earners Foreign Currency (EEFC) account in India, which is mainly used to meet the remittance requirements of the Company's branches and also for travel purposes. The Company possessed cash and bank balances (India and overseas excluding unpaid dividend) of Rs. 282.25 Crores as on 31st March, 2016.

9. OTHER CURRENT ASSETS

Other Current Assets of Rs. 237.14 Crores consist mainly of accrued income i.e. where services have been rendered as per contract but the client has not been billed as on 31st March 2016.

10. LOANS AND ADVANCES

The Loans and Advances largely comprise advances recoverable in cash or in kind for value to be received amounting to Rs. 147.50 Crores (Previous Year: Rs. 133.42 Crores) as on 31st March, 2016 out of which Long term was Rs. 40.34 Crores (Previous Year: 46.67 Crores) and Short Term was Rs.107.16 Crores (Previous year: 86.75 Crores), against which a provision for doubtful advances is Rs. Nil (Previous year was 0.02 Crores).

11 . OTHER CURRENTLIABILITIES & PROVISIONS

Other Current liabilities & Provisions amounting to Rs. 284.87 Crores (Previous year Rs. 343.38 Crores) rebrsent payments due to suppliers and advances from customers. Provisions consist mainly of accrual for expenses and provision for tax and dividend.

12. PROVISION FOR TAXATION

The Company's income-tax expense is Rs. 116.91Crores (Previous year Rs. 101.28 Crores).

13. CONTINGENT LIABILITIES

Contingent Liabilities have been disclosed in Note 27 in the "Consolidated Financial Statement - Notes to the Accounts".

Accounting principles consistently used in the brparation of financial statements are also consistently applied to record income and expenditure in individual segments.

H. MATERIAL DEVELOPMENTS IN HUMAN RESOURCES

The Talent Management practices at ZENSAR focus on engaging, developing and retaining the talent pool. We at Zensar strive towards providing a conducive environment to sustain high performance. Our retention rate was 84.1% for FY15-16

The following is a summary of our key talent initiatives:

The industry in which we operate in is rapidly changing. A significant focus on business outcomes, the need for integrated solutions and digital technologies etc is expected. These changes require us as an organization to gear up and reenergize the pillars of Zensar - the vision, the strategy and the values. Vision:

Leaders in Business Transformation

Mission:

We will be the best in delivering innovative industryfocused solutions with measurable business outcomes. We will partner customers for their success Values:

F Customer Centricity

F Commitment to People and Community

F Continuous Innovation and Excellence

Extensive initiatives such as global webcasts, workshops, e-mail campaigns and other activities have been undertaken across our global locations to disseminate the re-articulated Vision, Mission and Values.

HR Digitalisation

We have embarked on a journey to make HR 100% digitalised. This will ensure that all HR process will be available to associates on their hand held devices at all the time. It will also provide leaders access to HR metrics to make informed decision.

Organization and Management Review (OMR):

OMR is our combrhensive process to review the organization structure and incumbents of key roles in the structure to ensure alignment to the overall strategy of the Company. This process also includes succession planning and development planning for high potential associates.

Making Zensar a Great Place to Work:

Having an engaged workforce is a building block for organization's success. The organization's value of 'Commitment to People and Community' is embodied in every effort to make Zensar a great place to work - a workplace where employees trust who they work for, take pride in what they do and enjoy the company of the people they work with. Over the last few years, we have taken significant steps towards this. In continuation of this journey, this year we launched the 'Great Place to Work Survey' to measure associate engagement.

Great Place to Work is a globally recognized and widely used platform from Great Place to Work® Institute, to measure associate engagement. The Great Place to Work model measures engagement levels of associates through the levels of Trust, Pride and Camaraderie brvalent in the organization. The survey witnessed extensive participation from associates globally.

Apart from the survey, we are also participating in the Great Place to Work Culture Audit. The culture audit will benchmark our practices vis-à-vis the industry. Open Culture: Transparency and Openness Zensar provides multiple platforms for management and associate communication.

The Everybody Meetings (EBM) are held to share Business updates, Technology trends and future road map. The Pizza and Coke is an informal meeting of Senior Management with associates over lunch for sharing perspectives and ideas.

Zensar has a very vibrant platform for virtual collaboration – our Intranet called ZenLounge+ which is actively used by our associates for sharing views, technical collaboration as well as information sharing. This is a collaborative platform that combines the power of social networking, content collaboration, and real time enhanced communication.

Diversity and Inclusion (D&I)

Zensar has been constantly striving to build a diverse and inclusive work culture that respects and thrives on diversity in gender, age, nationality, race and capability. The Vision Community is ZENSAR's signature D&I initiative where cross-functional teams across the levels in the organization contribute to the strategy building exercise of the organization. The success of Vision Community has been documented in Harvard Journals as a case study.

WE (Women for Excellence) is another key D&I initiative which aims to develop women Zensarians take leadership positions. Additionally, to bring in diversity of perspectives in the Strategic Decision making process of the organization, the following boards have been set up: Shadow Executive Board, Women Executive Board and D&I Council. The composition of these Boards is cross functional and each Board is led by a member of the Strategy Council.

CAUTIONARY STATEMENT

This Report to the Shareholders is in compliance with the Corporate Governance Standard incorporated in the Listing Agreement with the Stock Exchanges and as such cannot be construed as holding out for any forecasts, projections, expectations, invitations, offers, etc. within the meaning of applicable securities laws and regulations. This Report furnishes information as laid down within the different headings provided under the sub-head Management Discussion and Analysis to meet the Listing Agreement requirements.

For and on behalf of the Board

H.V. Goenka

Chairman

Place: Mumbai

Dated: 22nd April, 2016