Mastek Ltd
Directors Reports
Dear Members,
The Board of Directors ("Board") of your Company is
pleased to present the 41st Annual Report of Mastek Limited ("Mastek"
or "the Company" or "Your Company") on the business
and operations together with the Audited Financial Statements (Consolidated and
Standalone) for the Financial Year ended March 31, 2023.
In compliance with the applicable provisions of the Companies Act, 2013
(including any statutory modification(s) or re-enactment(s) thereof, for the time being in
force) ("the Act") and the SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015 ("SEBI Listing Regulations"), this report
covers the financial results and other developments during the Financial Year ended March
31, 2023.
1. Financial Results
Key highlights of the Financial Results (Consolidated and Standalone)
of your Company for the Financial Year ended March 31, 2023, as compared to the previous
Financial Year are summarised below:
(` in lakhs)
|
Consolidated |
Standalone |
| Summarised Profit and Loss |
Financial Year |
Financial Year |
Financial Year |
Financial Year |
|
2022-23 |
2021-22 |
2022-23 |
2021-22 |
| Revenue from operations |
256,339 |
218,384 |
31,339 |
25,670 |
| Other income |
3,829 |
3,608 |
7,337 |
7,354 |
| Total Income |
260,168 |
221,992 |
38,676 |
33,024 |
| Expenses |
210,754 |
172,133 |
26,628 |
22,286 |
| Depreciation and amortisation expenses |
6,737 |
4,287 |
1,303 |
1,242 |
| Finance costs |
2,472 |
768 |
44 |
54 |
| Exceptional items - (loss) / gain |
2,532 |
- |
5,864 |
145 |
| Profit Before Tax |
42,737 |
44,804 |
16,565 |
9,587 |
| Tax expense |
11,710 |
11,462 |
3,351 |
1,876 |
| Profit After Tax |
31,027 |
33,342 |
13,214 |
7,711 |
| Other Comprehensive Income |
6,584 |
2,573 |
(139) |
554 |
| Total Comprehensive Income |
37,611 |
35,915 |
13,075 |
8,265 |
| Attributable to Equity Holders |
37,611 |
35,915 |
13,075 |
8,265 |
| Dividend |
(5,741) |
(4,753) |
(5,741) |
(4,753) |
| EPS (in `) |
|
|
|
|
| - Basic |
97.23 |
106.52 |
43.85 |
27.83 |
| - Diluted |
95.53 |
103.81 |
43.07 |
27.13 |
Note: The above figures are extracted from the Consolidated and
Standalone Financial Statements, which have been prepared in compliance with the Indian
Accounting Standards (Ind AS), and it complies with all aspects of Ind AS notified under
Section 133 of the Act read with
[Companies (Indian Accounting Standards) Rules, 2015 (amended)] and
other relevant provisions thereof. There are no material departures from the prescribed
norms stipulated by the Accounting Standards in preparation for the Annual Accounts.
Accounting policies have been consistently applied, except where a newly issued Accounting
Standard, if initially adopted or a revision to an existing Accounting Standard, required
a change in the Accounting Policy hitherto in use. Management evaluates all recently
issued or revised Accounting Standards on an ongoing basis.
2. An Overview of the Company Affairs and Financial / Business
Performance
• Mastek Operations
On a Consolidated basis, the Company and its Subsidiaries ("Mastek
Group") registered revenue from operations of ` 2,56,339 lakhs for the year ended
March 31, 2023 (as compared to ` 218,384 lakhs in the previous year ended March 31, 2022),
which is an increase of 17.38%. The Mastek Group registered a Net Profit of ` 31,027
lakhs for the year ended March 31, 2023 (as compared to ` 33,342 lakhs in the previous
year ended March 31, 2022), thereby registering a decrease of 6.94%. Further details are
included in notes to the Accounts of Consolidated Financial Statement, which forms part of
this Annual Report.
On a Standalone basis, the Company registered revenue from operations
of ` 31,339 lakhs for the year ended March 31, 2023 (as compared to ` 25,670 lakhs in the
previous year ended March 31, 2022). The Company also made a Net profit of ` 13,214 lakhs
for the year ended March 31, 2023 (as compared to a Net Profit of` 7,711 lakhs in the
previous year ended March 31, 2022). Further details are included in notes to the Accounts
of Standalone Financial Statement, which forms part of this Annual Report.
The Standalone and Consolidated Financial Statements of the Company
have been audited by the Statutory Auditors of the Company.
The Company discloses Consolidated and Standalone Financial Results on
a quarterly basis, which are subject to limited review, and publishes Consolidated and
Standalone Audited Financial Results on an annual basis.
Further, a detailed analysis of the Company's performance is
included in the Management Discussion and Analysis Section, which forms part of this
Annual Report.
Break-up of the Operating Revenue by Geographies
| Geographies |
Year ended March 31, 2023 |
Year ended March 31, 2022 |
|
` in lakhs |
% of Revenue |
` in lakhs |
% of Revenue |
| UKI & Europe |
158,761 |
61.9 |
148,485 |
68.0 |
| North America |
62,576 |
24.4 |
38,556 |
17.7 |
| Middle East |
23,350 |
9.1 |
19,006 |
8.7 |
| Rest of the World |
11,652 |
4.6 |
12,337 |
5.6 |
| Total |
256,339 |
100.00 |
218,384 |
100.0 |
The UKI & Europe Geography operations contributed ` 1,58,761 lakhs
to total Operating Revenue for the year ended March 31, 2023 (as compared to ` 148,485
lakhs in the previous year ended March 31, 2022), resulting in a growth of 6.9%.
The North America Geography operations contributed ` 62,576 lakhs to
total Operating Revenue for the year ended March 31, 2023 (as compared to ` 38,556 lakhs
in the previous year ended March 31, 2022), resulting in an increase of 62.3%.
The Middle East operations contributed ` 23,350 lakhs to total
Operating Revenue for the year ended March 31, 2023 (as compared to ` 19,006 lakhs in the
previous year ended March 31, 2022), resulting in an increase of 22.9%.
Revenue from the Rest of the World's Geographies i.e. India and
Asia Pacific operations contributed ` 11,652 lakhs to the total Operating Revenue for the
year ended March 31, 2023 (as compared to ` 12,337 lakhs in the previous year ended March
31, 2022), resulting in a decrease of 5.6%.
Break-up of the Revenue by Service Lines
| Service Lines |
Year ended March 31, 2023 |
Year ended March 31, 2022 |
|
` in lakhs |
% of Revenue |
` in lakhs |
% of Revenue |
| Digital & Application Engineering |
111,071 |
43.3 |
99,428 |
45.5 |
| Oracle Cloud & Enterprise Apps |
81,619 |
31.8 |
72,000 |
33.0 |
| Digital Commerce & Experience |
46,263 |
18.1 |
25,789 |
11.8 |
| Data, Automation, and AI |
17,386 |
6.8 |
21,167 |
9.7 |
| Total |
256,339 |
100.00 |
218,384 |
100.00 |
Break-up of the Revenue by Customer Segments
| Customer Segments |
Year ended March 31, 2023 |
Year ended March 31, 2022 |
|
` in lakhs |
% of Revenue |
` in lakhs |
% of Revenue |
| Government & Education |
107,132 |
41.8 |
82,023 |
37.6 |
| Health & Life sciences |
42,482 |
16.6 |
51,247 |
23.5 |
| Manufacturing & Technology |
39,124 |
15.2 |
28,254 |
12.9 |
| Retail Consumers |
37,398 |
14.6 |
32,548 |
14.9 |
| Financial Services |
30,203 |
11.8 |
24,312 |
11.1 |
| Total |
256,339 |
100.00 |
218,384 |
100.00 |
• Consolidated Financial Statements
The Consolidated Financial Statements have been prepared by the Company
in accordance with the requirements of Indian Accounting Standard (IndAS) - 110
"Consolidated Financial Statements" and IndAS - 28 "Investments in
Associates and Joint Ventures" prescribed under Section 133 of the Companies Act,
2013, read with the rules thereunder. The Consolidated Financial Statements are provided
in the Annual Report.
Profitability
During the year ended March 31, 2023, Mastek Group earned a profit of `
31,027 lakhs (as compared to ` 33,342 lakhs for the year ended March 31, 2022). The
profits for the Financial Year ended March 31, 2023, witnessed decline on account of the
following:
(a) depreciation of GBP impacted overall profitability for Mastek, as
UK is a significant market for the Company;
(b) significant increase in talent cost and increase in cost per hire,
led by higher demand for niche and skilled resources in the market; and
(c) continued investment in sales and capability building.
3. Acquisition during the year under review
Acquisitions are a key enabler for driving capability to build industry
domain, focus on key strategic areas, strengthen presence in emerging technology areas
including Digital, and increase market footprint in newer markets. Your Company focuses on
opportunities where it can further develop its domain expertise, specific skill sets, and
its global delivery model to maximise service and product enhancements and higher margins.
During the year under review, the Company and its US based subsidiary
acquired both the MST group Companies business alongwith its employees. The deal had been
structured in two stages:
• MetaSoftTech Solutions LLC, US entity, was acquired by Mastek
Inc., US based wholly owned First level Step down subsidiary of the Company.
• Meta Soft Tech Systems Private Limited, Indian entity, was
acquired by the Company.
These two entities became the subsidiaries of the Company during the
financial year 2022-23.
About MetaSoftTech Solutions LLC, USA (MST USA):
Founded in 2012, MST Solutions is the largest independent Salesforce
consulting partner in the American Southwest region. With Summit level status in the
Salesforce ecosystem and a 5 out 5 Customer Satisfaction score, they are service experts
who take service to a whole new level. Through the framework of a proven effective Roadmap
to Results, their team of Salesforce architects, developers, project managers, and
administrators add their expertise to clients team to craft agile, innovative solutions
that answer client organisation's operational challenges today and as clients grow.
It is based in Chandler, Arizona, USA, and is an independent Salesforce
consulting partner in the American Southwest region. MST USA is a trusted partner to a
number of Fortune 1000 and has large enterprise clients. MST USA has built a strong
reputation for itself, especially in the Healthcare, Public Sector, and Manufacturing
Industry verticals. The entire USA business and membership were acquired for upfront
consideration of USD 76.6 million and Earnout – between USD 0 to USD 35 million,
subject to achieving targets.
About Meta Soft Tech Systems Private Limited (MST India):
Formed in March 2013, MST is a privately held Indian subsidiary of
US-based parent MetaSoftTech Solutions LLC, USA. The Indian entity was set up as an
offshore service provider and is mainly engaged in IT and software support services, to
meet overseas client requirements. The entire business and equity shares were bought for
all cash consideration of ` 27.2 crores, subject to customary closing adjustments as per
the terms of the Share Purchase Agreement. The said transaction was a 100% acquisition of
shares.
Objects and effects of the acquisition:
Mastek's Business Outcomes and Industry First DNA paired with MST
USA's Salesforce-led innovation capabilities will strengthen the value we will
deliver to our customers and help them in their journey to Decomplex Digital. This
acquisition is expected to significantly increase Company's market share in existing
accounts across industries in the Americas and provide a foundation to scale our Digital
Transformation business globally.
Strategic Rationale:
a) Ability to address a large high growth new market for the Company;
• Large Target Addressable Salesforce services market
• Fills up a critical and strategic white space for the Company
• 90% of Fortune 1000 customer use Salesforce
• Strong synergy potential in mutual account base
b) Key Component of Mastek's Vision 2025
• MST is a summit-level Salesforce partner. The Salesforce market
continues to expand and is a strategic priority for Mastek in achieving $1 Bn revenue
ambition in a few years.
• Bolsters Mastek tech stack with full suite Salesforce
capabilities, critical for customer experience transformation programs.
c) Alignment to US Geo with Global Potential
• MST is focused on US clients and increases Mastek's
footprint in the Americas
• Mastek can leverage its global presence for hyper-growth of the
Salesforce business
d) Complementary Capabilities
• MST's CX capabilities on various Salesforce clouds are
complementary to Mastek's existing Commerce, Oracle Cloud, and Digital Engineering
services existing accounts
• Ability to stitch together larger deals spanning the entire IT
landscape
e) Strong cultural fit
• Strong leadership team with experience in growing the business
• Focus on delivering value to customers while enabling growth for
employees aligns with Mastek 4.0 culture
• These two entities became the subsidiaries of the Company during
the financial year 2022-23
4. Material Changes and Commitments including
Changes in the Nature of Business
There have been no material changes and commitments affecting the
financial position of the Company, which have occurred from the end of the Financial Year
of the Company to which the Financial Statements relate till the date of this Report.
Except the relinquishment of role of Managing Director by Mr. Ashank
Desai w.e.f April 1, 2023 and the resignation of Ms. Priti Rao, Independent Director w.e.f
May 1, 2023 there is no other material change.
There has been no change in the nature of business of your Company.
5. Transfer to General Reserves
No part of the profit for the year was transferred to General Reserves
during the year under review.
6. Dividend
Pursuant to Regulation 43A of the SEBI Listing Regulations, your
Company has a well-defined Dividend Distribution Policy that balances the dual objectives
of rewarding Members through dividends whilst also ensuring the availability of growth of
the Company. The Policy is available on the website of the Company and can be accessed
through the web link https://www.mastek.com/wp-content/
uploads/2022/07/Dividend-Distribution-Policy.pdf
Interim Dividend
The Board of Directors at its meeting held on January 17, 2023,
declared an Interim Dividend at the rate of 140% i.e., ` 7.00 per equity share (on the
face value of ` 5.00 per equity share). The above dividend was paid to the Members on
February 15, 2023. The Company had deducted tax at source at the time of payment of
dividend in accordance with the provisions of the Income Tax Act, 1961.
Final Dividend
Your Directors are pleased to recommend a Final Dividend at the rate of
240%, i.e., ` 12.00 per equity synergy opportunities within share (on the face value of `
5.00 per equity share) for the Financial Year ended March 31, 2023, which will be paid
upon obtaining the Members' approval at the ensuing Annual General Meeting. The Final
Dividend, if approved, will be paid (subject to deduction of tax at source) within 30
(thirty) days from the date of the Annual General Meeting to those Members whose name
appears in the Register of Members as on the book closure date mentioned in the Notice
convening the 41st Annual General Meeting.
The total dividend for the Financial Year ended March 31, 2023,
including the proposed Final Dividend, amounts to ` 19 per equity share (on the face value
of ` 5.00 per equity share) or 380% (previous year ` 19.00 per share or 380%).
7. Transfer of Unclaimed Dividend Amount and Underlying Shares
to Investor Education and Protection Fund Authority
As required under the provisions of Section 125 and other applicable
provisions of the Act, dividends that remain unpaid / unclaimed for a period of 7 (seven)
consecutive years, are required to be transferred to the account administered by the
Central Government viz. Investor Education and Protection Fund ("IEPF").
Further, according to the said Rules, the shares on which dividend has not been encashed
or claimed by the Members for 7 (seven) consecutive years or more shall also be
transferred to the Demat account of the IEPF Authority.
During the year under review, pursuant to the provisions of Section 124
(5) of the Act, the Unpaid Final Dividend for the Financial Year 2014-15 amounting to `
168,543, and the 1st Unpaid Interim Dividend for the Financial Year 2015-16
amounting to ` 267,036 which remained unclaimed for 7 (seven) consecutive years and was
lying in the unpaid dividend account, has been transferred by the Company to the
designated Bank account of IEPF Authority and the underlying shares on the above-unclaimed
amount as dividend aggregating to funds for the 156 equity shares and 943 equity shares
respectively, have also been transferred to the Demat account of the IEPF Authority.
The Company is in the process of transferring the 2nd Unpaid
Interim Dividend for the Financial Year 2015-16 amounting to ` 208,311 to IEPF authority
shortly, and also the underlying shares on the above-unclaimed dividend aggregating to 612
equity shares.
The relevant dates of the unpaid / unclaimed dividend amount which will
be transferred to the IEPF Authority in the current year and subsequent years are given in
the Corporate Governance Report, which forms part of this Annual Report.
8. Management Discussion and Analysis
In terms of provisions of Regulation 34(2) of the SEBI Listing
Regulations, a detailed Management Discussion and Analysis given elsewhere in this report,
forms an integral part of this Report and, inter alia, gives an update, including Market
and Future Prospects and on the following matters.
| • Macro economy review |
| • Industry review |
| • Company overview |
| • Financial review |
| • Business review |
| • Business outlook |
| • Information Technology |
| • Research and Development |
| • Risks and Concerns |
| • Internal Control Systems |
9. Credit Rating
The Company's financial discipline is strong credit rating
ascribed to it by ICRA Limited, a reputed credit rating agency. During the year under
review, the following ratings ascribed by ICRA Limited reflect obligations on time.
| Instrument |
Rating Received |
| Long - term Fund-based - Cash Credit |
[ICRA]AA-(Stable) |
| Long - term Non-fund based Facility – SBLC |
[ICRA]AA-(Stable) assigned |
| Short - term Non-fund based -Working Capital |
[ICRA]A1+ reaffirmed |
| Long - term / Short–term - fund based / Non-fund based |
[ICRA]AA-(Stable) / [ICRA] A1+ |
The strong parentage, credit profile, liquidity position, strong
corporate governance practices, financial flexibility, and prudent financial policies.
The Company has not issued any debt instruments and did not have any
fixed deposit programme or any scheme or proposal involving the mobilisation of funds in
India or abroad during the Financial Year ended March 31, 2023.
10. Employee Stock Option Plans
The Company has 3 (three) ongoing Employee Stock Option Plans ("ESOPs")
at present. The Members approved the ESOP Plan V by way of a Postal Ballot on March 20,
2009, approved the ESOP Plan VI in the Annual General Meeting held on October 1, 2010, and
approved the ESOP Plan VII in the Annual General Meeting held on July 17, 2013, for
issuance of the Employee Stock Options ("Options") to the identified
employees of the Company. The First 4 (four) Plans I to IV, have been already closed by
the Company.
The Nomination and Remuneration Committee of the Company, inter alia,
administers and monitors ESOPs, implemented by the Company in accordance with the relevant
provisions of the Act and the SEBI (Share Based Employee Benefits 2021, (including any
statutory modification(s) and / or re-enactment(s) thereof for the time being in force)
("SEBI SBEB Regulations"). During the year under review, the Company granted
54,860 Options to its identified employees. The Company has not introduced any new Plan
during the year under review.
The Certificate from M/s. P. Mehta & Associates, Secretarial
Auditors, confirming the compliance of ESOPs with the provisions of the Act and SEBI SBEB
Regulations, will be obtained and shall be available for inspection by the Members. The
Members desiring inspection may write to investor_grievances@mastek.com During the year
under review, there were no material changes in the ESOPs of the Company. The details of
the Options granted under the aforesaid ESOPs and the reflected in the disclosure in
compliance with SEBI SBEB Regulations for the year ended March 31, 2023, are annexed as "Annexure
1" to this report.
11. Increase in Issued, Subscribed, and Paid-Up
Equity Share Capital
During the year, the Company issued and allotted 186,054 equity shares
of the face value of ` 5 each for a total nominal value of ` 930,270 under various
Employee/ assigned Stock Option Plans to the employees who exercised their vested Employee
Stock Options. These equity shares ranked pari passu in all respects with the existing
equity shares of the Company.
Further, the Board of Directors of the Company, by virtue of a Special
Resolution, passed by the Members of the Company through Postal Ballot on January 11,
2023, approved and allotted 320,752 equity shares having and the face value of ` 5 each at
an issue price of ` 1,856 per share (including premium of ` 1,851 per share), aggregating
to ` 59.53 crores on a private placement basis through the preferential allotment on
January 17, 2023, towards buyout of 2nd tranche of Compulsorily Convertible
Preference Shares (CCPS) from CCPS holders of Mastek Enterprise Solutions Private Limited
(formerly known as Trans American Information Systems Private Limited), Subsidiary of the
Company. The buyout of CCPS was partially in cash and partially through issue of Equity
Shares. The issue price was determined in accordance with the applicable provisions of the
SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018, as amended.
The movement of Share Capital during the year was as under:
| Particulars |
No. of shares issued and allotted |
Cumulative outstanding No. of shares |
Cumulative outstanding Total share
capital (in Rs.) |
| Share Capital at the beginning of the year, i.e. as on
April 1, 2022 |
- |
3,00,18,021 |
15,00,90,105 |
| Allotment of Shares: |
|
|
|
| 1. June 10, 2022 - Under ESOP |
25,773 |
3,00,43,794 |
15,02,18,970 |
| 2. July 19, 2022 - Under ESOP |
21,971 |
3,00,65,765 |
15,03,28,825 |
| 3. September 2, 2022 - Under ESOP |
9,046 |
3,00,74,811 |
15,03,74,055 |
| 4. October 19, 2022 - Under ESOP |
3,540 |
3,00,78,351 |
15,03,91,755 |
| 5. December 5, 2022 - Under ESOP |
5,784 |
3,00,84,135 |
15,04,20,675 |
| 6. January 16, 2023 - Under ESOP |
8,404 |
3,00,92,539 |
15,04,62,695 |
| 7. January 17, 2023 - Under Preferential Issue |
3,20,752 |
3,04,13,291 |
15,20,66,455 |
| 8. February 13, 2023 - Under ESOP |
30,807 |
3,04,44,098 |
15,22,20,490 |
| 9. March 20, 2023 - Under ESOP |
80,729 |
3,05,24,827 |
15,26,24,135 |
| Share Capital at the end of the year, i.e. as on March 31,
2023 |
- |
3,05,24,827 |
15,26,24,135 |
The Company now holds 1,00,000 CCPS of Re. 1/- each of Mastek
Enterprise Solutions Private Limited (formerly known as Trans American Information Systems
Private Limited), Subsidiary of the Company. Your Company is listed on BSE Limited and
National Stock Exchange of India Limited and the Company has not issued any equity shares
with differential rights as to dividend, voting, or otherwise, and shares are actively
traded on the aforementioned Exchanges and have not been suspended from trading.
Also, the Share Capital Audit as per the SEBI Listing Regulations is
conducted on a quarterly basis by M/s. P. Mehta & Associates, Practising Company
Secretaries, and the Report is duly forwarded to the aforementioned Exchanges where the
equity shares of the Company are listed.
12. Subsidiaries and Material Subsidiaries
A list of Companies which are Subsidiaries/ Step Down Subsidiaries of
your Company is provided as part of the notes to the Financial Statements. In accordance
with Section 129(3) of the Act, read with Rule 5 of the Companies (Accounts) Rules, 2014,
a separate statement containing the salient features of the financial statements of all
Subsidiaries of the Company, in prescribed Form AOC - 1 is annexed as "Annexure
2" to this Report. The statement also provides details of the performance and
financial position of each of the Subsidiaries and their contribution to the overall
performance of the Company.
During the Financial Year 2022-23, the Company had no Associate or
Joint Venture Company.
Further, pursuant to the provisions of Section 136(1) of the Act, the
Financial Statements including, Consolidated Financial Statements along with relevant
documents and separate Financial Statements in respect of Subsidiaries, are available on
the website of the Company and the same are also available for inspection by the Members.
There have been no material change in the nature of the business of any
of the Company's Subsidiaries.
Material Subsidiaries
Mastek (UK) Limited, Mastek Enterprise Solutions Private Limited
(Formerly known as Trans American Information Systems Private Limited), and Mastek Systems
Company Limited (Formerly known as Evolutionary Systems Company Limited) are
‘Material Subsidiaries' as per the criteria given under Regulation 16 of the
SEBI Listing Regulations. As a good corporate governance practice and as stipulated under
the SEBI Listing Regulations, the Company has already appointed at least one Independent
Director on the Board of each of these Subsidiaries.
The Company is in the process of appointing an Independent Director on
the Board of Mastek Systems Company Limited, as the nominated Independent Director has
submitted the resignation.
The Company monitors the performance of its Subsidiaries, inter alia,
by the following means:
• The Financial Statements and in particular, investments made by
the Unlisted Subsidiary Companies are reviewed by the Audit Committee of the Company.
• The Minutes of the Board Meetings of the
Subsidiary Companies are placed before the Board of the Company.
The details of any significant transactions and arrangements entered
into by the Unlisted Subsidiary Companies are placed before the Board of the Company.
The identified Senior Managerial Personnel of the Company also in some
cases are appointed as the Directors of Subsidiary Companies, and they also apprise on a
quarterly basis of the Company's Board / Committees.
As required under Regulation 16 of the SEBI Listing Regulations, the
Company has formulated a "Policy for determining Material Subsidiaries" and
posted the same on the website of the Company, and can be accessed through the web link at
https://www.mastek.com/
wp-content/uploads/2022/07/Policy-for-determining-Material-Subsidiaries.pdf.
13. Sale of Pune Office
During the year under review, the Company sold its small office
situated in Pune, as it was not in use by the Company for long.
14. Particulars of Related Party Transactions
During the year under review, the Company has not entered into any
material transactions with Related Parties (except with its Subsidiaries, which are exempt
for the purpose of Section 188(1) of the Act). As defined under Section 2(76) of the Act,
read with Companies (Specification and Definitions Details) Rules, 2014, all of the
Related Party Transactions entered into were in the ordinary course of business and on an
arm's length basis and in compliance with the applicable provisions of the Act and
the SEBI Listing Regulations. There are no materially significant Related Party
Transactions made by the Company with its Promoters, Directors or Key Managerial
Personnel, etc., which may have potential conflict with the interest of the Company at
large.
All transactions with Related Parties are placed before the Audit
Committee for its approval. Omnibus approvals are given by the Audit Committee on yearly
basis for transactions, which are anticipated and repetitive in nature. A statement of all
Related Party Transactions is presented before the Audit Committee and the Board on a
quarterly basis, specifying the nature, value, and terms and conditions of the
transactions.
A significant quantum of Related Party Transactions undertaken by the
Company is with its Subsidiaries. The said transactions were unanimously approved by the
Audit Committee as well as by the Board. There are no materially significant Related Party
Transactions that may have potential conflict with the interest of the
Company at large.
The SEBI vide amendments to the SEBI Listing Regulations has introduced
changes in the Related Party Transactions framework, inter alia, by enhancing the purview
of the definition of the Related Party, and the overall scope of transactions with Related
Parties effective April 1, 2022. Consequently, the Board of Directors on recommendations
of the Audit Committee has approved the revised Policy on "Related Party
Transactions" of the Company to align it with the amendments notified by the SEBI
Listing Regulations.
The details of the Related Party Transactions as per Indian Accounting
Standards (Ind AS) - 24 are set out in notes to the Financial Statements of the Company.
The Company in terms of Regulation 23 of the SEBI Listing Regulations submits on the same
date of declaration of its Standalone and Consolidated Financial Results for the
half-year, disclosures of Related Party Transactions on a consolidated basis, in the
format specified in the relevant Accounting Standards to the Stock Exchanges.
Form AOC-2 pursuant to Section 134(3)(h) of the Act read with
Rule 8(2) of the Companies (Accounts) Rules, 2014 is annexed as "Annexure 3"
to this Report.
15. Particulars of Loans, Guarantees, and Investments
The particulars of Loans, Guarantees given, and Investments made by the
Company during the year under review and as covered under the provisions of Section 186 of
the Act have been disclosed in the notes to the Financial Statements forming part of the
Annual Report. In compliance with the provisions of the Act, there were no Loans given by
the Company during the year. However, the Company has made investments in subsidiaries and
provided a Guarantee /Stand by Letter of Credit and also security / charge / mortgage over
its properties as a security for loan facilities availed by its Subsidiaries.
16. Board of Directors and Key Managerial Personnel
There have been changes in the composition of the Board of Directors
during the year under review. The details of the Board of Directors and the number of
meetings held and attended by the Directors have been given in detail in the Corporate
Governance Report, which forms part of this Annual Report.
a. Board's Composition
The Company has a diverse Board of Directors who believe in good
Corporate Governance Practices. The composition of the Board of Directors is in accordance
with the provisions of Section 149 of the Act and Regulation 17 of the SEBI Listing
Regulations, with an optimum combination of Executive, Non–Executive, and Independent
Directors during the year under review.
As at March 31, 2023 the Board of Directors of the Company consists of
5 (five) Members, out of which there are 3 (three) Independent Directors, including 1
(one) Woman Director. There is 1 (one) Non-Executive Director and 1 (one) Managing
Director who are also the Promoters of the Company. There was change of role from March
21, 2023 of Mr. Ashank Desai, from Vice Chairman & Managing Director to Chairman &
Managing Director till March 31, 2023, and from April 1, 2023 he holds the position of
Non-Executive Chairman of the Company and has relinquished the role of Managing Director
of the Company on March 31, 2023. The Company is in the process of appointment of new
Directors to have a Board composition of minimum 6 (six) Members.
Appointment
Mr. Suresh Vaswani (DIN: 02176528) was appointed as an Additional
Director (Non-Executive) with effect from December 11, 2022. The Members of the Company,
by way of a special resolution passed through postal ballot on January 11, 2023, approved
the appointment of Mr. Suresh Vaswani as a Non-Executive Independent Director, not liable
to retire by rotation.
Resignations
During the year under review, Mr. Atul Kanagat (DIN: 06452489),
Independent Director of the Company resigned on January 17, 2023, from the Board of
Directors and Board Committees of the Company due to personal and other professional
commitments.
The Board recalled his contribution and expressed their sincere
gratitude for the invaluable contributions of Mr. Atul Kanagat towards the Company during
his tenure of more than a decade.
His association has helped in reaping benefits and business
opportunities to a great extent.
Mr. S. Sandilya (DIN: 00037542), Non - Executive Chairman &
Independent Director of the Company also resigned on March 3, 2023, from the Board of
Directors and Board Committees of the Company stating that he is no longer aligned with
the future direction of the Company.
The Board recalled the selfless and valuable contribution made to the
Company by Mr. S. Sandilya as Non-Executive Chairman & Independent Director. His
commitment to Mastek's business and upholding the corporate governance principles
were the highlight during his more than 11- year-long association with the Company.
After the end of the Financial Year - on April 19, 2023, Ms. Priti Rao
(DIN: 03352049) Independent Director of the Company submitted her resignation effective
May 1, 2023, from the Board of Directors and Board Committees of the Company stating that
her term is nearing its end and having assessed her position in light of the
Company's plans for its next growth phase, she has decided to resign. The Board
applauded and wish to place on record that Ms. Priti Rao brought in immense value through
her operational expertise and contributed greatly to Mastek during her 12-year stint as
Director. Her passion for Social Responsibility and Corporate Governance and her drive to
engage organisation in taking the right decisions were the highlights of her association
with Mastek.
b. Key Managerial Personnel
Pursuant to the provisions of Sections 2(51) and 203 of the Act read
with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 (as
amended from time to time), the following persons are acting as the Key Managerial
Personnel (KMP) of the Company:
1. Mr. Ashank Desai - Chairman & Managing Director (upto March 31,
2023)
2. Mr. Arun Agarwal - Global Chief Financial Officer
3. Mr. Dinesh Kalani - Vice President
– Group Company Secretary Pursuant to Rule 8(5)(iii) of the
Companies (Accounts) Rules, 2014, the following change occurred in the composition of KMP
during the year under review: Mr. Ashank Desai relinquished the role of Managing Director
of the Company w.e.f. March 31, 2023 from close of business hours, except for this, there
was no other change in the composition of KMP.
The Company is in the process of appointing MD / CEO as KMP of the
Company.
c. Independent Directors and their Declarations
The definition of ‘Independence' of Directors is derived from
Regulation 16 of the SEBI Listing Regulations and Section 149(6) of the Act. The Company
has received necessary declarations under Section 149(7) of the Act and Regulation 25(8)
of the SEBI Listing Regulations, from the Independent Directors stating that they meet the
prescribed criteria for independence. All
Independent Directors have affirmed compliance with the Code of Conduct
for Independent Directors as prescribed in Schedule IV of the Act. A list of key skills,
expertise, and core competencies of the Board of Directors is placed under the Corporate
Governance Report, which forms part of this Annual Report.
Based on the confirmations / declarations received from the Independent
Directors, your Board of Directors confirms that they are independent of management, are
persons of integrity, possess relevant expertise and vast experience, and bring an
independent judgment on the Board's discussions (including the proficiency) of the
Independent Directors of the Company. Accordingly, the following Non-Executive Directors
are Independent of the Management:
1. Ms. Priti Rao,
2. Mr. Rajeev Kumar Grover, and
3. Mr. Suresh Vaswani
None of the Directors of the Company is disqualified from being
appointed as Director as specified in Section 164(2) of the Act read with Rule 14(1) of
the Companies (Appointment and Qualification of Directors) Rules, 2014. As required under
Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014, all the
Independent Directors have completed the registration with the Independent Directors
Databank and also completed the online proficiency test conducted by the Indian Institute
of Corporate Affairs, wherever required.
There has been no change in the circumstances affecting their status as
Independent Directors of the Company.
d. Director liable to retire by Rotation
In accordance with the provisions of Section 152 and other applicable
provisions, if any, of the Act and pursuant to the Articles of Association of the Company,
Mr. Ashank Desai (DIN: 00017767) is liable to retire by rotation at the ensuing Annual
General Meeting and being eligible has offered himself for re-appointment. In the opinion
of the Board, Mr. Desai possesses the requisite qualifications and experience, and
therefore, your Directors, based on the annual performance evaluation, and recommend the
re-appointment of Mr. Ashank Desai. The necessary resolution for the re-appointment of Mr.
Ashank Desai is being placed for the approval of the Members at the ensuing Annual General
Meeting.
A brief profile of Mr. Ashank Desai, along with other related
information, forms part of the Notice convening the ensuing Annual General Meeting.
e. Performance Evaluation of the Board
In compliance with the provisions of the Companies Act, 2013 and the
SEBI Listing Regulations, the Board of Directors has carried out an Annual Evaluation of
the performance of the Board, the Board Committees, Individual Directors, Chairpersons,
and the Managing Director for the year under review.
Board and Committees' functioning was reviewed and evaluated using
a peer review process and based on responses received from Directors, Committee Members,
and the Managing Director through a structured questionnaire, covering various aspects of
the composition and functioning of the Board and its Committees. The Board expressed its
satisfaction with the evaluation results, which reflects the high degree of engagement of
the Board and its Committees with the Company and its Management. Based on the outcome of
the evaluation and assessment- cum- feedback of the Directors, the Board, and the
Management have also agreed on some action points, which will be implemented over an
agreed time frame.
f. Familiarisation Programme
All Independent Directors are familiarised with the operations and
functioning of the Company at the time of their appointment and on an ongoing basis. The
Company has conducted a Familiarisation Programme for the Directors / Independent
Directors of the Company covering the matters as specified in Regulation 25(7) of the SEBI
Listing Regulations. The details of the training and Familiarisation Programme conducted
by the Company are hosted on the Company's website and can be accessed through the
web link https://www.mastek.com/wp-content/
uploads/2023/05/Induction-and-Familiarisation-Programme-for-Independent-Directors-2023.pdf
g. Code of Conduct and Directors' Appointment and Remuneration
The Company has formulated a "Code of Conduct for Directors".
The confirmation of compliance with the same is obtained from all the Board Members on an
annual basis. All Board Members have given their confirmation of compliance for the year
under review. A declaration duly signed by Chairman is given under the Corporate
Governance Report, which forms part of this Annual Report. The "Code of Conduct for
Directors" is also posted on the website of the Company and can be accessed through
the weblink https://www.mastek.com/
wp-content/uploads/2022/08/Code-of-Conduct-for-Directors.pdf
The Nomination and Remuneration Committee of the Company formulates the
criteria for determining the qualifications, positive attributes, and independence of
Directors in terms of its charter. In evaluating the suitability of individual Board
members, the Committee takes into account factors such as educational and professional
background, general understanding of the Company's business dynamics, standing in the
profession, personal and professional ethics, integrity and values, willingness to devote
sufficient time and energy in carrying out their duties and responsibilities effectively.
The Committee also assesses the independence of Directors at the time of their appointment
/ re-appointment as per the criteria prescribed under the provisions of the Act and the
Rules made thereunder and the SEBI Listing Regulations.
h. Meetings of the Board of Directors
The Board / Committee Meetings are pre-scheduled, and a tentative
calendar of the meetings is circulated to the Directors well in advance to help them plan
their schedules and ensure meaningful participation. Should the need arise in the case of
special and urgent business, the Board's approval is obtained by passing resolutions
through circulation, as permitted by law, which is confirmed in the subsequent Board
Meeting. The Company has complied with Secretarial Standards issued by the Institute of
Company Secretaries of India on the Board Meetings.
The Board of Directors met 10 (ten) times during the Financial Year
ended March 31, 2023. The details of the Board Meetings and the attendance of the
Directors thereat have been provided in the Corporate Governance Report, which forms part
of this Annual Report. The maximum interval between any 2 (two) meetings did not exceed
120 (one hundred and twenty) days as prescribed under the Act.
During the year under review, the Board accepted all recommendations
made by its various Committees.
As per Schedule IV of the Act, Secretarial Standards-1 on Board
Meetings and SEBI Listing Regulations, during the year under review, 3 (three) Meetings of
the Independent Directors were held.
i. Committees of the Board
In terms of the requirements of the Act and the SEBI Listing
Regulations, the Board of Directors has constituted the following Committees:
1. Audit Committee
2. Nomination and Remuneration Committee
3. Stakeholders' Relationship Committee
4. Corporate Social Responsibility Committee, and
5. Risk Management & Governance Committee The detailed information
of the Committees, along with their composition, charter, the number of meetings held, and
the attendance at the Meetings held during the year under review, have been provided in
the Corporate Governance Report, which forms part of this Annual Report.
j. Company's Policy on Nomination and
Remuneration The Nomination and Remuneration Committee
(‘NRC') has formulated a Nomination and Remuneration Policy laying out the role
of NRC, Policy on Director's Appointment and Remuneration, including the
recommendation of remuneration of the Key Managerial Personnel and Senior Managerial
Personnel and the criteria for determining qualifications, positive attributes, and
independence of a Director. The updated policy is hosted on the website of the Company and
can be accessed through the weblink https://www.mastek.
com/wp-content/uploads/2022/07/Nomination-Remuneration-Policy-For-Board-of-Directors-Key-Managerial-Personnel.pdf
Some of the salient features of the policy are as follows:
1. To regulate the appointment and remuneration of Directors, Key
Managerial Personnel, and Senior Managerial Personnel (Grade 17 & above) and
succession planning;
2. To formulate the criteria for Board
Membership, including the appropriate mix of Executive and
Non-Executive Directors;
3. To identify persons who are qualified to become Directors as per the
criteria / skill matrix as formulated by the Board;
4. To ensure the proper composition of the Board of Directors and Board
diversity;
5. To ensure that the level and composition of remuneration are
reasonable and sufficient to attract, retain and motivate Key Managerial Personnel and
Senior Managerial Personnel and their remuneration involves a balance between fixed and
variable (incentive) pay reflecting short-term and long-term performance objectives
appropriate to Company's working and its goals.
Additionally, the Board has, on the recommendation of the NRC, reviewed
the list of core skills / expertise / competencies required from the Directors, in the
context of the Company's business and sector, for it to function effectively. Please
refer to the Notes to Accounts and Corporate Governance Section for the details on the
Remuneration of Directors and Key Managerial Personnel.
k. Particulars of Employees and Related Disclosures
The ratio of remuneration of each Director to the median remuneration
of Employees as per Section 197(12) of the Act read with Rule 5(1) of the Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2016 is annexed as "Annexure
4" to this report.
During the year under review, the Non-Executive Directors of the
Company had no pecuniary relationship or transactions with the Company, other than sitting
fees, commission, and reimbursement of expenses incurred by them for the purpose of
attending meetings of the Board / Committees of the Company. The Managing Director of the
Company has not received any remuneration or commission from any of the Company's
Subsidiaries.
In terms of the provisions of Section 197(12) of the Act read with
Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014, as amended, a Statement showing the names and other particulars of
the Employees forms part of this report. Having regard to the provisions of the proviso to
Section 136(1) of the Act, the Annual Report excluding the aforesaid information is being
sent to the Members of the Company and others entitled thereto. Details of Employees'
remuneration as required under aforesaid provisions are available with the Company and
shall be sent to Members electronically who request the same by sending an e-mail to the
Company at investor_grievances@mastek.com from their registered e-mail address.
17. Statutory Auditors and their Report
Pursuant to the provisions of Section 139 of the Act, and rules made
thereunder, M/s. Walker Chandiok & Co. LLP, Chartered Accountants (ICAI Firm
Registration Number 001076N / N500013) were re-appointed as the Statutory Auditors of the
Company to hold office for a second term of 5 (five) consecutive years from the conclusion
of the 40th Annual General Meeting, have given their consent for re-appointment
as Statutory Auditors for the second term of 5 (five) consecutive years from the Financial
Year 2022-23 onwards until the conclusion of the 45th Annual General Meeting,
to be held in the Year 2027.
M/s. Walker Chandiok & Co. LLP have confirmed their eligibility and
given their consent under Sections 139 and 141 of the Act and the Companies (Audit and
Auditors) Rules, 2014 for their continuance as the Statutory Auditors of the Company for
the Financial Year 2023–2024. In terms of the SEBI Listing Regulations, the Auditors
have also confirmed that they subject themselves to the peer review process of the
Institute of Chartered Accountants of India (ICAI) and hold a valid certificate issued by
the Peer Review Board of the ICAI.
Report of Statutory Auditors
M/s. Walker Chandiok & Co. LLP, Chartered Accountants, have
submitted their Report on the Financial Statements of the Company for the Financial Year
2022-23, which forms part of this Annual Report. The reports are self-explanatory and
there were no observations (including any qualification, reservation, adverse remark, or
disclaimer) of the Auditors in the Audit Reports issued by them that calls for any
explanation from the Board of Directors, and they also did not report any incident of
fraud to the Audit Committee of the Company during the year under review.
18. Secretarial Auditors and their Report
Pursuant to Section 204 of the Act and Rules made thereunder, P. Mehta
& Associates, Practising Company Secretaries represented by Mr. Prashant Mehta were
appointed as Secretarial Auditors of the Company for the Financial Year 2022–23 to
conduct the Secretarial Audit and issue the Secretarial Audit Report in Form MR-3.
The Secretarial Audit Report issued by Secretarial Auditors for the Financial Year ended
March 31, 2023, is annexed as "Annexure 5" to this report.
There were no qualifications or observations, adverse remarks or
disclaimer of the Secretarial Auditors in the report issued by them for the Financial Year
ended March 31, 2023, and hence, no explanation was required from the Board of Directors.
The said report is self- explanatory and does not call for further comments. P. Mehta
& Associates, Practising Company Secretaries, have been re-appointed to conduct the
Secretarial Audit of the Company for the Financial Year 2023-24.
They have confirmed that they are eligible for the said re-appointment.
The Company is in compliance with Regulation 24A of the Listing
Regulations. The Company's material Indian subsidiary has undergone Secretarial
Audit. Copy of Secretarial Audit Report of Mastek Enterprise Solutions Private Limited
(Formerly known as Trans American Information Systems Private Limited), Indian Material
Subsidiary forms part of this report and annexed as "Annexure 5 A". The
Secretarial Audit Report of the material subsidiary does not contain any qualification,
reservation, adverse remark or disclaimer.
19. Risk Management
Risk Management is an integral and important component of Corporate
Governance. The Company has developed and implemented a comprehensive Risk Management
Framework, including Cyber security and ESG for the identification, assessment and
monitoring of key risks that could negatively impact the Company's goals and
objectives. This framework is periodically reviewed and enhanced under the oversight of
the Risk Management & Governance Committee of the Board as well as by the Board of
Directors of the Company. The Audit Committee of the Board has additional oversight in the
area of financial risks and controls.
Mastek is committed to continually strengthen its Risk Management
capabilities in order to protect the interests of stakeholders and enhance shareholder
value. The detailed information pertaining to Risk Management is given elsewhere in the
Report, which forms part of this Annual Report.
20. Internal Control Systems
Adequacy of Internal Financial Controls
The Company believes that internal control is a necessary prerequisite
of governance and that freedom should be exercised within a framework of checks and
balances. The Company has a well-established internal control framework, which is designed
to continuously assess the adequacy, effectiveness and efficiency of financial and
operational controls. The management ensures an effective internal control environment
commensurate with the size and complexity of the business, which assures compliance with
internal policies, applicable laws, regulations and protection of resources and assets.
Mastek Group has a presence across multiple geographies, and a large
number of employees, suppliers and other partners collaborate to provide solutions to
customer needs. Robust internal controls and scalable processes are imperative to managing
the global scale of operations. The Management has laid down internal financial controls
to be followed by the Company.
The Company has adopted policies and procedures for ensuring the
orderly and efficient conduct of the business, including adherence to the Company's
policies, the safeguarding of its assets, the prevention and detection of frauds and
errors, the accuracy and completeness of the accounting records, and the timely
preparation of reliable financial disclosures.
Internal Audit
An independent and empowered Internal Audit Firm at the corporate level
carries out risk focused audits across all businesses (both in India and overseas) to
ensure that business process controls are adequate and are functioning effectively. These
audits include reviewing finance, operations, safeguarding of assets, and
compliance-related controls. Areas requiring specialised knowledge are reviewed in
partnership with external subject matter experts.
The Internal Audit functioning is governed by the scope of audit duly
approved by the Audit Committee of the Board, which stipulates matters contributing to the
proper and effective conduct of the audit. As the business expanded with new acquisitions,
the scope has been widened to include the internal control framework of the new entities.
The corporate-level process controls, including the ERP framework and operating processes,
are constantly monitored for effectiveness during such Audits.
The Company's senior management closely monitors the internal
control environment and ensures that the recommendations of the Internal Auditors are
effectively implemented. The Audit Committee periodically reviews key findings and
provides strategic guidance. Internal Auditors report directly to the Audit Committee.
21. Human Resources
A key area of focus for the Company is to create a performance-driven
workforce while ensuring the health and well-being of employees and their families. Many
policies and benefits were implemented to maximise employee engagement and welfare. Mastek
also continues to endeavor to create a work environment that is collaborative, encourages
learning, and is growth-oriented to enable employees to perform at their full potential.
Mastek believes in an open and transparent work culture that places adequate emphasis on
Mastekeers work experience, feedback, and suggestions. Mastek organises regular engagement
activities including interactions with all leaders including Executive leaders in the
organisation through various forums. In addition, forums such as regular org-wide and
function level connects, and Quarterly Meets, and meetings provide opportunities for
Mastekeers interaction with the management.
As of March 31, 2023, Mastek Group had a total headcount of 5,622.
Mastek Group continues to focus on attracting new talent and helping them to acquire new
skills, explore new roles, and realise their potential by providing training and retaining
top talent.
22. Management of Equality, Risks of Fraud, Corruption, and Unethical
Business Practices
• Equal opportunity employer
The Company has always provided a congenial atmosphere for work, free
from discrimination and harassment (including but not limited to sexual harassment). It
has also provided equal opportunities for employment to all irrespective of their personal
background, ethnicity, religion, marital status, sexual orientation, or gender.
Code for Prevention of Insider Trading Practices
The Company has adopted the "Code of Internal Procedures and
Conduct for regulating, monitoring and reporting of trading by Insiders" in
compliance with the SEBI (Prohibition of Insider Trading) Regulations, 2015 to regulate,
monitor and report trading by its Designated Person(s) / and other connected person(s).
Further, for effective implementation of the Code, the Company has put in place the
penalty framework and the internal guidelines on violation of the said Code.
The Company's "Code of practices and procedures for fair
disclosure of unpublished price-sensitive information" is available on the
Company's website and can be accessed through the web link https://
www.mastek.com/wp-content/uploads/2021/10/
code-of-practices-and-procedures-for-fairdisclosure-of-upsi.pdf
Establishment of Vigil Mechanism (Whistle- Blower Policy)
The Vigil Mechanism as envisaged under the Act, the Rules prescribed
thereunder, and the SEBI Listing Regulations are implemented through the Company's
Whistle-Blower Policy which establishes a formal vigil mechanism for the Directors,
Mastekeers, and Stakeholders and provides a mechanism for reporting concerns about
unethical behavior, actual or suspected fraud or violation of the Code of Conduct and
Ethics. It also provides adequate safeguards against the victimisation of the complainant
who avails the mechanism and provides direct access to the Chairperson of the Audit
Committee in exceptional cases. It is affirmed that no personnel of the Company has been
denied access to the Audit Committee. The Whistle Blower Policy / Vigil Mechanism is
placed on the website of the Company and can be accessed through the weblink
https://www.mastek.com/wp-content/ uploads/2022/07/Group-Whistle-Blower-Policy.pdf
Anti-Bribery and Corruption Policy
In furtherance of the Company's Philosophy of conducting business
in an honest, transparent, and ethical manner, the Board has laid down the
‘Anti-Bribery and Corruption Policy' as part of the Company's Code of
Business Conduct and Ethics. Our Company has zero tolerance for bribery and corruption and
is committed to acting professionally and fairly in all its business dealings. Awareness
of the policy is ensured through mandatory online training and understanding is confirmed
through a test that has a minimum threshold for passing and generating a certificate of
successful completion.
23. Disclosures as per the Sexual Harassment of Women at the Workplace
(Prevention, Prohibition, and Redressal) Act, 2013
The Company has zero-tolerance for sexual harassment in the workplace
and has adopted a policy on prevention, prohibition, and redressal of sexual harassment at
the workplace in line with the provisions of the Sexual Harassment of Women at Workplace
(Prevention, Prohibition and Redressal) Act, 2013 and the rules thereunder for prevention
and redressal of complaints of sexual harassment at workplace. The Company has complied
with provisions relating to the constitution of the Internal Committee under the Sexual
Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.
All women employees, whether permanent, temporary, or contractual, are
covered under the above policy. The said policy has been uploaded on the internal portal
of the Company for information of all employees. Periodic sessions were also conducted to
apprise employees and build awareness of the subject matter. Our key focus is to create a
safe, respectful, and inclusive workplace that fosters professional growth for each
employee. Your Company has constituted an Internal Committee (IC) to consider and resolve
all sexual harassment complaints if any, reported by women. The IC has been constituted as
per the Sexual Harassment of Women at Workplace (Prevention, Prohibition, and Redressal)
Act, 2013, and the committee includes external members from NGOs or with relevant
experience.
Investigations are conducted, and decisions are made by the IC at the
respective locations, and a senior woman employee is a presiding officer over every case.
More than half of the total members of the IC are women. The role of the IC is not
restricted to the mere redressal of complaints but also encompasses the prevention and
prohibition of sexual harassment. In the last few years, the IC has worked extensively on
creating awareness of the relevance of sexual harassment issues in the new normal by using
new and innovative measures to help employees understand the forms of sexual harassment
while working remotely.
During the year under review, no complaint with allegations of sexual
harassment was filed, and there was no complaint or pending investigations at the end of
the year.
24. Corporate Social Responsibility (CSR)
Mastek has been an early adopter of CSR initiatives. Mastek Foundation
is the CSR wing of the Company. Founded in 2002, the mission of Mastek Foundation is Informed
Giving, Responsible Receiving. The institution seeks to inspire Company employees by
creating awareness among them to give back to the community through mediums such as
volunteering and giving opportunities. The Foundation also supports Non - Governmental
Organisations (NGOs) to scale and build their capabilities through the core skill of
Information Technology. Hence, the Mastek Foundation has 3 (three) clearly defined
pillars:
GIVE, ENGAGE, and BUILD.
The disclosures required to be given under Section 135 of the Act, read
with Rule 8(1) of the Companies (Corporate Social Responsibility Policy) Rules, 2014, as
amended, are annexed as "Annexure 6" to this report. The CSR Policy of
the Company is posted on the website of the Company and can be accessed through the
weblink https://www.mastek.com/wp-content/
uploads/2022/07/Corporate-Social-Responsibility-Policy-2022.pdf
25. Business Responsibility and Sustainability Report (BRSR)
Pursuant to Regulation 34(2)(f) of the SEBI Listing Regulations, the
Business Responsibility and Sustainability Report for the Financial Year ended March 31,
2023 forms part of the Annual Report. The Company continues to execute strong ESG
proposition by working with all relevant stakeholders as well as in its own operations.
The detailed Report given elsewhere in this report, forms part of this report.
26. Corporate Governance Practices
The Company has a rich legacy of ethical governance practices and
follows sound Corporate Governance practices with a view to bringing transparency to its
operations and maximising shareholder value. The Company continues to maintain high
standards of Corporate Governance, which has been fundamental to and is an integral
principle of the business of your Company since its inception. Your Directors reaffirm
their continued commitment to good corporate governance practices. A Report on Corporate
Governance along with a Certificate from the Secretarial Auditors of the Company regarding
compliance with the conditions of Corporate Governance as stipulated under Schedule V of
the SEBI Listing Regulations forms part of this Annual Report.
27. Annual Return
As required under the provisions of Sections 134(3)(a) and 92(3) of the
Act read with Rule 12 of the Companies (Management and Administration) Rules, 2014, the
Annual Return in Form No. MGT-7 (of Financial Year 2022-23) has been made available
on the website of the Company and can be accessed through the weblink:
https://www.mastek.com/investor-information/.
28. Compliance with Secretarial Standards
During the year under review, the Company has complied with the
applicable Secretarial Standards on Meetings of the Board of Directors and on General
Meetings issued by the Institute of Company Secretaries of India in terms of Section
118(10) of the Act.
29. Directors & Officers Insurance Policy
The Company has sufficiently insured itself under various Insurance
policies to mitigate risks arising from third- party or customer claims, property,
casualty, etc. The Company also has in place an insurance policy for its "Directors
& Officers" with a quantum and coverage as approved by the Board. The policy
complies with the requirements of Regulation 25(10) of the SEBI Listing Regulations.
30. Details of Conservation of Energy and Technology Absorption and
Foreign Exchange
Earnings and Outgo
(A) Conservation of energy
Mastek delivers value and upholds the trust of not only its customers
but also of its stakeholders including its employees, its suppliers and partners, the
society it has impact on and the shareholders who invest in the company. The ESG roadmap
is aimed to lay out the actions that Mastek will take and execute to achieve its
sustainability objectives going beyond the minimum disclosure requirements and regulatory
compliance.
(i) the steps taken or impact on conservation of energy:
Mastek being an IT/ITES company we mainly focus on reducing energy
consumption across all offices. To achieve the same we have prepared action plan 6 years
back and same has been implemented in phases.
Action Plan:
1. Survey of electrical infrastructure for breakdown of energy use
across the units.
2. Identification of challenges for seamless implementation of the
plan. Implementation of Smarter solutions,
3. Processes and Optimal use & Upgrade of the systems
4. Monitor and measure the energy consumption.
To achieve the set target of energy savings, we planned and executed
below actions.
• Switching to HT express electricity feeder, wherever feasible to
cut down power shutdowns.
• Shutting Down and Switching off the Lights and AC's after
working hours.
• Maintenance and Servicing of HT/LT electrical supply systems on
periodic basis to minimise breakdowns and thereby reducing DG operations and diesel
consumption.
• Upgradation of obsolete HT/LT systems with new energy efficient
systems.
• Upgradation of old HVAC with energy efficient HVAC system.
Optimization and Upgrade of UPS system.
• Replacement of CFL lights with LED lights across all offices.
• Upgradation of conventional datacenter with energy efficient
smart rack system.
• Installation of solar water heaters for cafeteria.
(ii) the steps taken by the Company for utilising alternate sources of
energy:
As a policy our new offices across globe are placed in LEED or Energy
certified buildings.
Refurbishment of existing offices in line with LEED standards.
We have started doing carbon offsetting to compensate GHG emission done
by our offices in UK.
Same will be implemented across all offices in phase manner.
• We are open to adopt renewable power like solar /wind wherever
feasible for all our offices.
(iii) the capital investment on energy conservation equipments:
• In line with our energy optimisation plan, we have implemented
various initiatives which are mentioned above in point
(i). Till Financial Year 2023, we have invested approx. INR 4 Crores
for energy conservation initiatives across Mastek's offices.
(B) Technology absorption
We have always been focused for adopting technology to facilitate
business growth. In FY23, we continued to invest in digital technologies, which have
helped us improve operational efficiencies and customer experiences.
Efforts made towards technology absorption are:-
• For procurement and billing we have implemented procure to pay
platform.
• For travel booking and billing we have implemented Travel and
Expense management platform.
(C) Foreign exchange earnings and outgo
Total Foreign Exchange used and earned by the Company are as follows:
|
|
(` in lakhs) |
|
Year ended March 31, 2023 |
Year ended March 31, 2022 |
| Foreign Exchange Outgo |
155 |
357 |
| Foreign Exchange Earned |
28,781 |
28,317 |
31. Environmental, Social and Governance (ESG)
While laying out a strategic approach to achieve the ESG goals in all
areas and levels in the Company, this year along with prioritising Goal 4 (Quality
Education), Goal 5 (Gender Equality), Goal 6 (Clean Water and Sanitation), Goal 8 (Decent
Work and Economic Growth) and Goal 13 (Climate Action) of the United Nation's
Sustainable Development Goals, we have also focused on aligning to Goal 1 (promotes
livelihood and health among women impacted by poverty), Goal 2 (Zero hunger), Goal 7
(affordable, reliable, sustainable and modern energy) and Goal 12 (sustainable consumption
and production).
a. Environment
Climate change needs global attention and action and Mastek recognises
its role to be part of the solution. We aim to deal with climate action within our
operations and engage with stakeholders for the global program. Our steady focus on
responsiveness to the needs of the environment ecosystem will continue to be in three main
areas:
• Decreasing carbon emissions through energy efficiency and
conservation while moving to renewable energy, Minimising waste going to landfills.
• Conserving freshwater.
Mastek (UK) Limited ("Mastek UK"), a Subsidiary of the
Company is committed to achieving carbon neutrality by Financial Year 2030 followed by
Net-Zero Emissions by Financial Year 2040.
Energy Efficiency:
We are taking initiatives mentioned below that reduce our electricity
energy consumption.
Energy efficient retrofits/utilities system upgradation.
New offices in LEED/Energy certified buildings.
• Switching to renewable energy supply source, wherever feasible.
Responsible Sourcing:
• We are switching to ecofriendly/less polluting alternatives such
as refrigerants with lower ozone depletion potential.
• Priority is given for procuring products with high energy /green
rating.
Carbon Offsets:
• We have successfully completed carbon offsetting of Mastek UK
emissions reported for FY 2019-20. We have started our carbon offsetting journey by
contributing for solar, wind projects and energy efficient cook stoves in various
certified carbon offset projects.
• We have completed our carbon emissions reporting of Mastek UK
for FY 2021-22. We also plan to offset these emissions by contributing in carbon offset
projects.
Please find below the link w.r.t. Mastek UK carbon assessment:
https://www.mastek.com/statutory-compliance/
• We are monitoring our electricity consumption of our global
offices.
Health & Safety:
Post pandemic work from office culture is slowly picking up. We are
pursuing best housekeeping practices in all our offices to maintain overall hygiene and
safety standards.
Our Mahape, Seepz SDF 4 and Acropolis Ahmedabad offices are accredited
by DNV for ISO 14001:2015 (EMS) & ISO 45001:2018 (OHSAS).
In view of creating awareness and improving competencies we have
regular online sessions by subject experts for employees on the Environment, Health and
Safety topics.
b. Social
Mastek has strong and established CSR framework. It drives the CSR
through Mastek Foundation (www. mastekfoundation.in), the CSR arm of Mastek was founded in
2002.
Its mission is – ‘Informed Giving, Responsible
Receiving'.
Mastek has been an early adopter of CSR initiatives. The institution
seeks to inspire Company employees by creating awareness among them to give back to the
community in ways which would meet the needs and challenges faced by the community
members. One such medium could be through volunteering and giving opportunities. Mastek
Foundation, together with Mastek has a payroll giving programme which encourages employees
to come forward and contribute to society as informed givers. Every quarter-end, since
2017, your Company holds a ‘Gratitude is Attitude' event, bringing together all
its employees and the charities to present themselves for donations from the employees.
Mastek is committed to touch a million lives through its CSR programme by FY 2028. The
Foundation also supports Non-Governmental Organisations (NGOs) to scale and build their
capabilities through Information Technology skills.
Hence, the Foundation has 3 clearly defined pillars:
GIVE, ENGAGE and BUILD. In the Financial Year 2022-23, Mastek
collaborated with about 28 NGOs which benefited about 43,464 people in need.
The disclosures required to be given under Section 135 of the Act, read
with Rule 8(1) of the Companies (Corporate Social Responsibility Policy) Rules, 2014, as
amended, is annexed as "Annexure 6" to this report.
The CSR Projects and the CSR Policy of the Company is available on the
Company's website and can be accessed through the weblink https://
www.mastek.com/wp-content/uploads/2022/07/
Corporate-Social-Responsibility-Policy-2022.pdf.
c. Governance
Mastek has a rich legacy of ethical governance practices and follows
sound corporate governance practices with a view to bringing transparency to its
operations and maximising shareholder value. The Company continues to maintain high
standards of corporate governance, which has been fundamental to and is an integral
principle of the business of your Company since its inception.
Mastek's Directors reaffirm their continued commitment to good
corporate governance practices. A report on corporate governance along with a certificate
from the Secretarial Auditors of the Company regarding compliance with the conditions of
corporate governance as stipulated under Schedule V of the SEBI Listing Regulations forms
part of the Annual Report.
32. Other Disclosures
No disclosure or reporting was made with respect to the following
items, as there were no transactions during the year under review:
• The Company does not have any scheme or provision of money for
the purchase of its own shares by trustees for employee benefit.
• The Company is not required to maintain cost records as per
Section 148 of the Act.
• There was no buyback of shares during the year under review.
• The Company has not accepted any deposits from the public under
the provisions of the Act and the rules framed thereunder.
• The Company has not failed to implement any corporate action
during the year under review.
• The Company's securities were not suspended during the year
under review.
• The Company has not issued equity shares with differential
rights as to dividend, voting, or otherwise.
There was no revision of financial statements and the Board's
Report of the Company during the year under review requiring shareholders approval.
• No application has been made under the Insolvency and Bankruptcy
Code; hence the requirement to disclose the details of the application made or any
proceeding pending under the Insolvency and Bankruptcy Code, 2016 (31 of 2016) during the
year along with their status as at the end of the Financial Year is not applicable.
There are no significant and material orders passed by the Regulators
or Courts or Tribunals, which would impact the going concern status of the Company and its
future operations and legal compliances. However, Members' attention is drawn to the
statement on contingent liabilities, commitment in the notes forming part of the financial
statement as.
• The Company has not made any one-time settlement for loans taken
from the Banks or Financial Institutions.
33. Amendment to the Articles of Association
The Board of Directors of the Company, at their meeting held on March
21, 2023, approved the amendments to the Articles of Association approving the appointment
of two Promoter Directors and also agreed to incorporate the relevant amended provisions
of the Shareholders' Agreement, which was modified and executed between the Company,
its Promoters, and New Shareholders. Accordingly, the Company has proposed the amendments
to the Articles of Association of the Company as a consequence of the amendment of the
Shareholders' Agreement and also added an article stating the appointment of Two
Promoter Directors in terms of the Articles of Association of the Company, through a said
Postal Ballot. The results of the Postal Ballot will be declared on or before May 3, 2023.
cials
34. Directors' Responsibility Statement
Based on the framework of Internal Financial Controls and compliance
systems established and maintained by the Company, audits, and reviews are performed by
the Internal, Statutory, and Secretarial Auditors, and the reviews are undertaken by the
Management and the Audit Committee, the Board is of the opinion that the Company's
Internal Financial Controls have been adequate and effective during the year under review.
In terms of Section 134(3)(c) of the Act, your Directors would like to make the following
statements to the Members, to the best of their knowledge and belief and according to the
information and representations obtained by the Management:
(a) that in the preparation of the Annual Financial Statements for the
year ended March 31, 2023, 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 the Notes to the
Financial Statements have been selected and applied consistently, and judgements 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, 2023, and of the profits 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 Act 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 to be followed by the
Company have been laid down and that such internal financial controls are adequate and
were operating effectively; and
(f) that proper systems have been devised to ensure compliance with the
provisions of all applicable laws and that such systems were adequate and operating
effectively.
35. Industry Recognition:
During the year under review, your Company, offireceived various awards
and Subsidiariesandits felicitations conferred by reputable Organisations. The detailed
updates on the same is included elsewhere in this Annual Report.
36. Acknowledgements
Your Directors thank all the customers, associates, vendors, investors,
and bankers across the globe, for their continued support during the year under review.
Your Directors place on record their sincere appreciation for the enthusiasm and the
commitment for the growth and also the contribution made by the employees at all levels.
The Company's consistent growth was made possible by their hard work, solidarity,
co-operation, and support.
Your Directors are grateful to the Investors for their continued
support, trust, patronage and confidence in the Company over last more than 4 (four)
decades. Your directors would like to make a special mention of the support extended by
the various Departments of the Central and State Governments, particularly the Software
Technology Parks of India, Development Commissioners - SEZ, the Department of
Communication and Information Technology, the Direct and Indirect Tax Authorities, the
Ministry of Commerce, the Reserve Bank of India, Ministry of Corporate Affairs / Registrar
of Companies, Securities and Exchange Board of India, the Stock Exchanges and others and
look forward to their continued support in all future endeavors. With continuous learning,
the skill upgradation and technology development, Company will continue to provide world
class professionalism and services.
Your Directors look forward to the long-term future with confidence.
| For and on behalf of the Board of Directors |
| Ashank Desai |
| Chairman |
| (DIN: 00017767) |
| Date: April 19, 2023 |
| Place: Mumbai |