Datamatics Annual Report 2014

8/9/2019 Datamatics Annual Report 2014

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August 27,2014

To,Gorporate Communication DepartmentBombay Stock Exchange LimitedPhiroze Jeejeeboy Towers

Dalalstreet, Mumbai- 400 001

Sub: Coverinq letter of the Annual Audit Report to be filed with the Stock ExchanqesPursuant to Glause 31of the Listinq Aqreement

Ref No.: SEBI Gircular No. CIR/CFD/D U7/2012. dated Auqust 13. 2012

BSE Scrip Code: 532528NSE Code: DATAMATICS EQ

FORM A

(East), Mumbai- 400 051

1 Name of the Company Datamatics Global Services Limited

2 Annual financial statements for thevear Ended

March 31,2014

3 Type of Audit Observation Emphasis of MatterThe observation set out in para 'Emphasis ofMattef of Independent Auditors Report [Referpage no. 861 and the corresponding Notes toAccounts, as referred therein, in Note to AccountsNo. 42 in Annual Report [Refer page no. 117].

The Audit Committee at its meeting held on May28, 2014 considered the para on Emphasismatter of standalone independent audit reportand discussed both with the management andstatutory auditors that the net worth of subsidiarycompanies has declined. The managementexplained that the investments in subsidiaries arefor long term and are of strategic nature. Furtherthe management is confident of turning around

the subsidiaries in the near future. Hence, it wasdecided not to make any provision for diminutionin the value of investment made in thesubsidiaries.

4 Frequency of observation Since financial year ended March 31, 2005

For Kanu Doshi AssociatesGhartered AccountantsFirm Registration No. 104746W

H:^daManoj Kumar PatiP rtner A14ffi Roh,ll L. kqnodg o.(h


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For Datamatics Global Services Limited For Datamatics Global Services Limited

{VC2-,L

VidurV. BhogilalExecutive Director & CFO

For Datamatics Global Services Limited

F[ K. SaraswatChairman of Audit Gommiftee

RahulL. KanodiaVice Ghairman & CEO


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Solutions Evolve.Quality Endures.

ANNUAL REPORT 2013-14


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Solu ions Evolve. Quali y Endures. 01Chairmans Message 02Quali y = Cus omer Driven Excellence 04Vice Chairman & CEO s Message 06Quali y = Cul ure of Efficiency 08Quali y = Sus aining Excellence 10Execu ive Direc or & CFOs Message 12Quali y = Atribu es of he Awards 14

CSR = Making a Difference 16Board of Direc ors 20Quali y = S ar Performances 22Financial Overview 24Corpora e Informa ion 26Direc ors Repor 27Repor on Corpora e Governance 37

Secre arial Audi Repor 49Managemen Discussion & Analysis 51Independen Audi ors Repor on Consolida ed

Financial S a emen 55Consolida ed Balance Shee , Pro & Loss Accoun

& No es 56Consolida ed Cash Flow S a emen 85Independen Audi ors Repor 86Balance Shee , Pro & Loss Accoun & No es 90Cash Flow S a emen 119Balance Shee Abs rac and Companys

General Business Prole 120S a emen Pursuan o Sec ion 212 of he

Companies Ac , 1956 121Financial De ails of he Subsidiary Companies

for he Year Ended March 31, 2014 122The Year a a Glance 123

CONTENTS


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IN EVERY BUSINESS LANDSCAPE, THERE EXISTA NUMBER OF SPACES WHICH COMPANIESAIM TO OCCUPY TO GAIN ALONG-TERM

AND SUSTAINABLE ADVANTAGEOVER THEIRCOMPETITORS.These spaces become s rongholds as hese rms develop dis inc s ra egies or grow h andexpansion, based on heir con rol over hese spaces.

Wi hin he IT business landscape, volumes and headcoun are amongs he prominen spacesha companies vie o occupy, re ain and grow. Because he IT business is primarily a skill andechnology driven business, based on ou sourcing and off-shoring solu ions or overseas

clien s, grow h is direc ly linked o volumes, and volumes are closely correla ed o headcoun .This is he linear business model ha mos IT service rms ollow, and have grown wi h hismodel.

However, here exis s wi hin he IT landscape one more space. In angible and cons an lychanging, his space has remained cen ral even as new echnologies emerge and new solu ionsevolve. This space, ofen easy o unders and, bu difficul o dene, is he QUALITY space.

QUALITY has de ned Datamatics, ever since IT startedchanging the world. While others pursued size and chasedvolumes, we also focussed on QUALITY. Today, when clientsanywhere in the world think of QUALITY, the rst name that

they think of is DATAMATICS.QUALITY a Da ama ics has many hues and colours. I has many direc ions and dimensions.I has many pla orms and levels. QUALITY a Da ama ics goes beyond unc ionali y and

ea ures, beyond securi y and es ing, and beyond archi ec ure and analysis.

QUALITY a Da ama ics is abou doing i righ , doing i righ always, doing i righ amidsin ense pressure and s ress, doing i righ across geographies and loca ions, doing i across

unc ions and divisions, doing i righ or every need and every requiremen o every cus omer,shareholder and employee.

AT DATAMATICS, QUALITY IS BOTH A LEGACY AND AVALUE WE HAVE INHERITED FROM OUR VISIONARY

FOUNDER, THE FATHER OF THE IT REVOLUTIONIN INDIA DR. LALIT S. KANODIA, WHO HASINCULCATED AND INGRAINED QUALITY AS A CULTURE,CUSTOM AND CHARACTER AT DATAMATICS.

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Chairmans MessageDear Shareholders,

I is always a pleasure and privilege o sharewi h you he review o your Companyper ormance as well as an overview o i s

u ure direc ion and course.

Le me commence by hear ily congra ula ineveryone on an excep ional and ou s andingper ormance achieved by he Companyduring he year 2013-14. We madespec acular progress in all our businesses

which ensured ha he opline increasedby nearly 33% and ne pro s afer axrose by 85% as compared wi h he previousyear. I am sure you join me in applauding hesincere effor s pu in by every Da ama icianwi hou whose de ermina ion and passion

or excellence, your Company would havebeen unable o deliver hese posi iveresul s, especially considering he difficulopera ing environmen , bo h globally as

well as in India.

India has always been a land o learning.From Nalanda and Takshila universi ies

o IIMs and IITs, we have a rich radi ioo ins i u ions impar ing op qualiknowledge. A key reason why India couldemerge as an IT super-power was becauseo i s abili y o deliver quali y solu iowhen compu ers revolu ionised our world.Today, we are a he cusp o ano her suchrevolu ion he digi al revolu ion.

Rapid advances in echnology, mobilein erne and smar devices are once againdisrup ing he echnology landscape,challenging es ablished models andmindse o move orward. We need o

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Da ama ics has been iden ied as Indiamos respec ed Sofware Companin Corpora e Governanceamong5000+ IT Companies. This Award wacon erred upon Da ama ics a he h Annual India Leadership Conclave &Indian Affairs Business LeadershipAwards 2014, held in Mumbai on July 2014. This award places Da ama ics

he augus company o winners a even including Anil Dhirubhai AmbaChairman, Anil Dhirubhai AmbaGroup; Dr. Mukesh Ba ra, Padma ShChairman, Dr. Ba ras Posi ive HeaClinic; Shiv Nadar, Founder ChairmaHCL Technologies L d. and NaresGoyal, CMD, Je Airways L d.

While we con inue o excel in oper ormance, we are also equally a

he ore ron in serving our socieWe won heBes Corpora e SociaResponsibili y Prac ices Award a heGlobal CSR Excellence and LeadershiAwards. A DATAMATICS, success always shared.

I hank you or your sus ained ai hrus in he Company and assure you

even as we drive he Company in o

nex phase o grow h, we will do so wour single-minded ocus on QUALITYbecause even asSOLUTIONS EVOLVQUALITY ENDURES.

Yours sincerely,

Dr. Lali S. KanodiaPh.D., M.I.T. (USA) | Chairman

move wi h he cheese. The new grow hareas oday are SMAC Social Media,Mobili y, Analy ics and Cloud. OpenSource is ano her echnology I wouldlike o add o SMAC. These changes havealready s ar ed re-shaping our lives, andi is in hese emergen echnologies ha

u ure grow h, bo h o he IT indus ry, aswell as our Company is embedded.

A Da ama ics, we had oreseen hesedevelopmen s, and as par o ourgrow h s ra egy, had acquired CIGNEX

in 2011 o expand our presence in heOpen Source space. We had merged ourDigi al Publishing and eRe ail Solu ionsbusiness wi h PreMedia Global oChennai, since renamed as LuminaDa ama ics Limi ed, o evolve as he 4h larges company in he publishing BPOspace in he world.

Bo h CIGNEX and Lumina are now o allyin egra ed wi h DATAMATICS and havecon ribu ed signican ly o he excellenresul s or he year 2013-14.

QUALITY has always been paramouna DATAMATICS. Afer being in he

echnology business or 38 years, wermly believe ha driven by changes in

echnology and models, SOLUTIONSEVOLVE, bu QUALITY ENDURES. And

ha is why, we have chosen QUALITY

as he heme or his years AnnualRepor o showcase he differen ace so QUALITY, and how as a Company,QUALITY ENDURES a DATAMATICS.

Looking ahead, I am exci ed abouhe u ure and he oppor uni ies ha

abound in he IT space. Emergingechnologies like SMAC, Open Source

hold immense po en ial or grow h,

as does Heal hcare. To capi alise onhese oppor uni ies, we will have orans orm our companies in o dominan

niche players, each becoming a big shin a small pond. Collec ively, when wecombine hese small ponds, we cancrea e an ocean. We have crossed a o alrevenue o ` 700 crores his year, andour nex arge is o s rive and break he

` 1,000 crores barrier. We are condenha we will be able o achieve his wi h

a mix o organic and inorganic grow h

ini ia ives. We are planning o lis oneor wo o our companies in he US in henex ew years. On he delivery ron ,we are keen o develop more DeliveryCen res in Tier II ci ies o ap local

alen , reduce atri ion, cu cos s, bumore impor an ly provide oppor uni ies

or he you h here. Our Delivery Cen rein Nashik is a s ep in he righ direc ion.

A he hear o our success are ourPEOPLE. A DATAMATICS, we havesome o he bes alen in he coun ry,a ac underlined by he various awardsand indus ry recogni ions accorded oDATAMATICIANS.

We con inue o main ain he highess andards o corpora e governancein he organisa ion. Good Corpora eGovernance has ve essen ial elemen s:

airness, ransparency, accoun abili y,responsibili y and independence. I isimpor an ha companies reveal heirin orma ion punc ually, adequa ely, clearly,accura ely and comparably, and i shouldbe easy or all s akeholders o access.S akeholders oday include inves ors,cus omers, employees, vendors, par ners,

he governmen and socie y.

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In the IT business, the product is theservice, the service is the solution, and

the solution is again, the product. In thisfuzzy, and often over-lapping offering,customers measure QUALITY using threechief metrics: functionality, time and cost.In o her words, every service, solu ion and produc hawe develop, deploy and deliver mus uniquely in egra eaccelera ed ime- o-marke , maximised produc ivi y andefficiency, shor er urn-around imes, a lower o al cos oownership while consis en ly adding value o our cus omers.

IN ONE WORD EFFICIENCY

A Da ama ics, efficiency begins wi h unders anding hecus omers implied and s a ed requiremen s and ends wi h hecus omer eeling deligh ed wi h he services ha mee heserequiremen s. The degree o which all he associa ed processesaddress hese wo ends decides he quali y o he service.

To ensure efficiency and quali y, we have a robus processrame-work ha is amongs he bes in he indus ry. These are

underlined wi h globally recognised cer ica ion such as ISO9001, SEI CMMi and ITIL.

ISO 9001 - The ISO 9001 cer ica ion species ha company needs o demons ra e an abili y o consis enprovide produc s and services ha mee cus omer anapplicable s a u ory and regula ory requiremen s.

SEI-CMMI - CMMi in sofware engineering and organisa ionaldevelopmen is a process improvemen approach haprovides organisa ions wi h he essen ial elemen s effec ive process improvemen . CMMi helps in egra

radi ionally separa e organisa ional unc ions, se proceimprovemen goals and priori ies, provide guidance oquali y processes, and provide a poin o re erence oappraising curren processes.

The ITIL (In orma ion Technology In ras ruc ure Libraris a globally recognised collec ion o bes prac ices in orma ion echnology (IT) service managemen .

We imbibe he bes prac ices o he indus ry o reour quali y edge. Our rigorous compliance audi s acrossvarious unc ions and levels ensure ha non-con ormanceimmedia ely correc ed, because Quali y, is also con ormanc

To scale up rom efficiency o higher efficiency, we have Con inuous Improvemen (CI) programme based on Lean SiSigma and Kaizen prac ices, o guaran ee Quali y a Sourand rs - ime-righ . Wi h over 30,000 person hours o

rainings, 300 Lean Six Sigma Projec s and over 1500 Kaizeprojec s, he nancial and cus omer bene s have beenamongs he highes in he indus ry.

CUSTOMERS ARE OURRAISON DETRE

uality = CUSTOMER DRIVEN EXCELLENC

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QUALITY PROTECTING CUSTOMERDATA

Our clien s include several For une500 companies, who rus us wi hconden ial and ex remely sensi ivein orma ion. Ensuring pro ec ion o

his invaluable in orma ion is a cri icalaspec o QUALITY a Da ama ics.

Our In orma ion Securi y Managemensys ems are geared o guaran eeuncompromising securi y or clien sin orma ion, and are cer ied oin erna ional s andards o ISO 27001,SSAE 16, HIPAA and PCI. RegularVulnerabili y Assessmen andPene ra ion Tes s are conduc ed oensure ha our echnological se up isrobus and will wi hs and virus atacks.Disas er Recovery and BusinessCon inui y Plans which are es ed andcon inuously improved, ensure ourcus omers have unin errup ed service

or cri ical processes and almos nodown ime or he res .

While we pro ec he in orma ion oour clien s, we also work closely wi h

hem o ensure compliance wi h alllocal laws o he specic coun ries andgeographies ha we service.

QUALITY CONSISTENTLY HIGHCUSTOMER RATINGS

The nal and ul ima e valida iono QUALITY always comes romcus omers. A Da ama ics, we haveseven parame ers o measure cus omersa is ac ion revolving around ourservice.

The seven parame ers we askour cus omers o ra e us areResponsiveness, Flexibili y, Quali yo Solu ions, Schedule Adherence,Value-addi ion, Quali y o Engagemen ,Approachabili y

We are proud o s a e ha our overallcus omer sa is ac ion ra ing isconsis en ly close o 5 on an ascendingscale o 1-6. A signican number oour cus omers, including some o heFor une 500 companies, consis en lyra e us a per ec 6/6 on all heparame ers.

The Da ama ics eam has been aninvaluable asse o he Accoun ingResearch Manager produc . They ar

imely, accura e, and a pleasan eo work wi h. One o he world

larges publisher.

I would deni ely recommendDa ama ics. The communica ion ison a high-level quali y, always easyand efficien . All expec a ions areexceeded and deliveries as expec edThere is immedia e reac ion o

eedbacks, and a very s rong eelinengagemen in o our projec . - One

he worlds larges online marke pl

Turn around ime and quali y exceeour requiremen s. Flexibili y omee arge s is excellen . - LeadinEn erprise or Business Process andDocumen Managemen .

Da ama ics has always been prompeven on our occasional rush jobs.Da ama ics were li e savers during

his busy ime in he marke resea

indus ry. We could no have gotenhrough he holidays wi hou heLeading Marke Research Agency.

WHAT OURCUSTOMERS SAY

DATAMATICS WAS ONE OF THE FIRST FIVECOMPANIES IN THE WORLD TO BE CERTIFIED ATP-CMM LEVEL 5.

WE ARE THE FIRST AND THE ONLY IT COMPANY TO HAVE WON THE ASIA PACIFIC QUALITYAWARD FOR SERVICES.


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Dear Shareholders,

I is indeed ullling and rewardingwhen s ra egies, plans and effor s come

oge her o crea e resul s ha ar

direc ional as well as progressive. ADa ama ics, in 2013-14 we delivered arobus , all-round per ormance makingus one o he as es growing ITITeS Company among all he lis edou sourcing companies on he BombayS ock Exchange and he Na ional S ockExchange.

We crossed he signican ` 700 croremark in revenues, and nearly ouched he

` 100 crore mark in EBIDTA. Wha makeshis per ormance more pronounced ishe ac ha i was achieved amids

challenging global and domes ic businessenvironmen s.

Grow h in mos advanced economieso he world con inued o be slowEmploymen across mos coun riesand sec ors remained weak, affec ing

condence levels, bo h or consumers aswell as inves ors. In India, he economycon inued o be pressurised by highina ion and an alarming scal deci ,

orcing he governmen o keep hemone ary policy igh .

In he ace o hese challenging anddifficul global and domes ic opera ing

Vice Chairman &CEOs Message

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circums ances, our per ormance s oodou . We delivered:

For he year 2013-2014, he Companysrevenue grew 33.4% rom ` 550

crores o `

734 crores, while heEBIDTA grew 72% rom ` 57 crores o ` 98 crores. Consequen ly, he earningsper share grew rom ` 4.55 per share

o ` 8.26 per share, a grow h o 81%.The Compounded Annual Grow h Ra e(CAGR) o he Company or he las

hree years is nearly 39%, one o hebes in he indus ry.

Driving his remarkable per ormance

were bo h he IT and ITeS services.The grow h was driven largely by as rong sales pipeline, high conversionra io, and he merger o ourpublishing business wi h PreMediaGlobal. Primary con ribu ion is rom

he Publishing, Banking, Finance,Insurance, and Governmen & PublicServices sec ors. We added a largenumber o new clien s during he year.

The US marke par icularly has seen avery heal hy grow h o 50.51% despi e

he ac ha he overcall US economyunderper ormed as compared wi h2013. Da ama ics con inues o bebullish on he prospec s in his marke .

The EBIDTA margins have improved onhe back o higher opera ional efficiency,

ransi ioning more work o Tier IIci ies such as Ahmedabad, Nashik, andPuducherry and beter price realisa ion

rom cus omers. To suppor he grow hin business, Da ama ics has increasedi s o al head coun rom 4,637 on 31s March 2013 o 6,793 on 31s March 2014.

Looking ahead, he elec ion o a s ablegovernmen afer hree decades hasushered in a new wave o condenceand resurgence in he Indian economy.As we move orward in o 2014-15,I am conden we will build on hismomen um. Our u ure grow h plans

have a combina ion o organic andinorganic ini ia ives. While we con inue

o ocus on our core business areas,we have rm plans o capi alise on newoppor uni ies in Digi al Trans orma ion,En erprise Con en Managemen (ECM)and Por al Solu ion, Open Sourceand Pla orm-based services. We willcon inue o build s rong eco-sys empar nerships in he areas o domain,

echnology and geography, o genera edifferen ia ed solu ions or ourcus omers.

Quali y has always been our oppriori y and con inues o remainin sharp ocus, crea ing a dis inccompe i ive advan age. Quali y aDa ama ics goes beyond produc and

services, and orms an in egral par he Da ama ics cul ure. The indus

has always been kind in recognisinghe Companys per ormance, anhis year oo, Da ama icians a

Da ama ics ea ured prominen ly various indus ry pla orms by winnipres igious awards.

I hank you or your ai h and condein Da ama ics, and assure you ha will con inue in our ques o be he name and he las word in QUALITY.

Yours sincerely,

Rahul. L. Kanodia Vice Chairman & CEO


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The IT business is unlike any other

business. Unlike manufacturing, there are no plants and machineryproducing goods that constantlyassure sales. Unlike mining, thereare no captive sources of naturalresources that guarantee successand growth.

The IT business is abou ingenui y, inven iveness andimagina ion o crea e nex genera ion solu ions haenable businesses all over deliver higher efficiencies.

QUALITY IS THE RESULT OF A CAREFULLYCONSTRUCTED CULTURAL ENVIRONMENT.IT HAS TO BE THE FABRIC OF THEORGANISATION, NOT PART OF THE FABRIC.

~ Philip Crosby.

= CULTURE OF EFFICIENCYuality

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At Datamatics, QUALITY isnever a short-term target

that is to be achievedonce. Our short, middleand long-term goal is

to sustain and ENDURE

QUALITY.

OUR TALENT STRATEGY

Our alen s ra egy is designed aroundhe HR mission o :

We will ensure customersatisfaction by executingbest people practices withpassion and innovation.Our alen s ra egy comprises o acomprehensive People DevelopmenProgramme. A he core o our PeopleDevelopmen Programme is Learning &Developmen .

Our view o QUALITY is inspired by he keyprinciples o business rans orma ion,rs ou lined by W. Edwards Demming,widely considered o be he a her oTo al Quali y Managemen :

Improve constantly and forever everyprocess for planning, production andservice.

A Da ama ics, QUALITY is no ades ina ion, bu a cons an journey ocon inuous improvemen . Our mosimpor an business resource is alen ,and here ore, managing alen is he key

o ENDURE QUALITY.

QUALITY IS NOT AN ACT,IT IS A HABIT.

~ Aris o le.

= SUSTAINING EXCELLENCE

uality

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LEARNING & DEVELOPMENT L&D

Driven by he Global HR & CSR Head,L&D is an on-going ac ivi y and processa Da ama ics ha consis s o imbibing

he la es echnology and ensuringour people are cer ied or hese. Thisincludes :

New Technologies like :

IQA - In ernal Quali y Audi s

PMP - Projec ManagemenPrepara ory

ITIL - In orma ion TechnologyIn ras ruc ure Library

Training or new echnologies consis so bo h in-house raining as well asspecialised raining which is ou -sourced.

Today, our people are cer ied or allcuting-edge echnology such as COBIT,AGILE, ITIL, e c.

In addi ion, we regularly par icipa e inLQA and PMP cer ica ion.

While keeping abreas o echnologyis impor an , we also realise ha wi hchange in echnology, changes in processare inevi able. There ore, ensuring haour process also change and evolve inline wi h evolving echnology is cri icalin our ques o ENDURE QUALITY,and deliver solu ions ha leverage he

la es echnology o crea e he highesvalue or our cus omers.

Our raining calendar reec s hiss rong correla ion be ween echnologyand quali y. Considering we are in

he IT business which has one o hehighes ra es o innova ions and new

echnology, as much as 50% o ouren ire raining calendar is ocussed on

upgrading and up-skilling o echnologyskills. Technology skill raining isclosely ollowed by raining in QUALITY,which comprises almos 30% o our

raining calendar. This relen less andunwavering ocus on raining and

echnology has been a he hear o heQUALITY cul ure a Da ama ics.

SUCH HAS BEEN THE QUALITY OF TALENT OF OUR PEOPLE THAT THEY REGUWIN AWARDS FOR PROJECTS FROM TOP INTERNATIONAL CLIENTS.

As nex -genera ion solu ionproviders, our people have oin erac and unders and diverseclien requiremen s. Wi h clienspread over many coun ries andspanning varied cul ures, ourpeople need o have he requisi ebehavioural skills ha are cri ica

o crea e a high level o rus anai h, and a spiri o par nersh

wi h our clien s. Tha is why, 20% our raining calendar is dedica ed

o polishing behavioural skills o oupeople.


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Dear Shareholders,

The year 2013-14 was indeed a

remarkable year a DATAMATICS. Iwas a year when our own businesses aswell as he ones we recen ly acquired,per ormed excep ionally o genera e arecord-breaking consolida ed revenueo ` 734 crores and an impressive nepro o ` 58 crores.

A large par o his increased revenuehas come rom he businesses acquiredby he Company in he las wo yearsThe digi al publishing business underLumina Da ama ics, ormed by hemerger o Pre Media Global andDa ama ics eRe ail & PublishingLimi ed in 2013, con ribu ed handsomely

o he revenues o he Company.

The improvemen in margins was ana ural ou come o he increased

opline, as we were able o alloca e

our expenses on a larger base. Adeprecia ing rupee ur her added o hecause.

In he rapidly advancing world o IT andITeS, grow h is a combina ion o bo horganic as well as inorganic ini ia ives.

Executive Director &CFOs Message

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Consider his :

The IT indus ry in India has seen over800 M&As. Global IT gian s have allused M&A o drive grow h and expand

heir presence in more geographies andsegmen s. IBM is es ima ed o havemade a o al o 119 acquisi ions, whileMicrosof has made 156 and Oracle 86.

A Da ama ics, we have made 6 M&Asin he pas . Each o hese merger/ acquisi ion has given he Company a

resh impe us o grow h. Acquiringor buying ou a business is one hing,success ully in egra ing i wi h heexis ing business and making heacquisi ion work is a o ally differenachivemen which is possible only

hrough me iculous s ra egic planningand awless execu ion. Tha is why,on a global average, only abou halo all mergers and acquisi ions are

success ul.

Our mos recen M&As are greaexamples o how we can leverage M&A

o also become he engine o our grow h.The CIGNEX and VISTA acquisi ions,and PreMedia Global (PMG) mergerhave been success ully in egra ed asper he in egra ion plans. A cri icalaspec o success ul in egra ion is he

role o he acquiring company i haso provide he righ suppor in ermso nance, managemen , in ras ruc ureas well as marke ing. Ano her crucialaspec is he cul ure, where employeeso he company being acquired have obe assured o heir job sa e y, as well asbe made o eel welcome as par o henew, larger company. These issues, ofenno emphasised, are undamen al o he

success o M&A, par icularly so in caseo IT M&A, where people orm he core

o he business are he apprecia ingasse o a company.

A Da ama ics, he success we haveachieved in seamlessly in egra ingCIGNEX, VISTA and PMG has given usimmense condence. We are cons an lyon he lookou or oppor une businesses

ha we can acquire, and we are convincedwe will be able o as - rack grow h bymaking inorganic grow h an in egral paro our overall grow h s ra egy.

Our sus ained ocus and discipline onnancial s abili y has ensured highcredi ra ings. This year, our credira ing o A1+ was re-affirmed by CRISIL.A1+ is he highes ra ing available o anycompany in he world, and signies as rong degree o sa e y regarding imelypaymen o nancial obliga ions. This

ra ing reasser s he nancial s abili yand low risk prole o he Company,helping us raise US$ 9 million as ex ernalcommercial borrowing (ECB).

DATAMATICS oday ranks #2 in CAGRgrow h or he preceding hree yearsacross all BSE lis ed IT companies.This is indeed remarkable, and we areconden ha we will be able o build

ur her on his success, and achievegrea er heigh s in he days o come.

Heres looking orward o ano hereven ul and exci ing year!

Yours sincerely,

Vidur V. Bhogilal Execu ive Direc or & CFO

We per ormed excep ionallyo genera e a record-breaking

consolida ed revenue o ` 734crores and an impressive nepro o ` 58 crores.

A Da ama ics, he success wehave achieved in seamlesslyin egra ing CIGNEX, VISTA anPMG has given us immensecondence.

DATAMATICS oday ranks #2in CAGR grow h across all BSElis ed IT companies.

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Awards and certi cation are both a re ection as well as a con rmationof our single-minded determination to ENDURE QUALITY. Over theyears, Datamatics has won more awards for QUALITY than any other ITcompany in India.These awards no only re-affirm our place amongs leading QUALITY IT companies in he world, bu also commour deeper commi men o QUALITY as a PURPOSE, which is no always eviden or explained hrough mo he awards.

The jury and he panel, he ra erni y and he orum, he con ex and he con es , he compe i ors and all crea e a unique atribu e ha conveys a deeper signicance o hese awards.

The QUALITY awards ha we have won over he years are impressive in heir sheer numbers, bu wha makimposing and inspiring is he wider and uller narra ive hey convey.

QUALITY REFERS TO THE AMOUNTS OF THE UNPRICED ATTRIBUTES CONTAINEDIN EACH UNIT OF THE PRICED ATTRIBUTE

(Leffler, 1982)

= ATTRIBUTES OF THE AWARDSuality

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P CMM VERSION II CERTIFICATION

Da ama ics is he rs IT company inhe world o ge he P-CMM (People

Capabili y Ma uri y Model) Version 2.0,Level 5 cer ied by KPMG or i s HRprocesses.

ASIA PACIFIC QUALITY AWARD INSERVICES

Da ama ics is he rs and he onlycompany in India o have won he AsiaPacic Quali y Award in Services romamongs hundreds o companies in 38coun ries ha include he USA, Canada,Russia, China, Israel, Japan and Aus ralia.

The Asia Pacic region covers allcoun ries in Asia as well as hose in herim o he Pacic Ocean.

The APQO is linked wi h feen o herquali y or s andards organisa ions in

he world. I s members include severalhundred Na ional Quali y Organisa ionsincluding he American Socie y oQuali y as core members, as well ascorpora e and individual members.

THE INDIAN MERCHANTS CHAMBER IS PERHA THE OLDEST CHAMBER OF TRADE, COMMERCEAND INDUSTRY IN INDIA AND HAS OVER 5,000MEMBERS TODAY. IT HAS THE DISTINCTION OFHAVING MAHATMA GANDHI AS ITS MEMBER THE

ONLY TRADE ASSOCIATION TO HAVE THIS UNIQUEDISTINCTION.

IMC RAMKRISHNA BAJAJ NATIONALQUALITY AWARD

Ins i u ed by he Indian Merchan sChamber in 1995 and modelled on heMalcolm Baldrige Na ional Quali yAwards in he US, he RamkrishnaBajaj Na ional Quali y Award is given

o companies ha demons ra eou s anding cus omer orien a ion andper ormance excellence.

IMC IT AWARD FOR QUALITY

The la es QUALITY award won Da ama ics was he IMC IT Award Quali y in January 2014. Wha mak

his award unique is he ac ha jury consis s o ve ormer NASSCOpresiden s - A ul Nishar, F.C. KoGanesh Na arajan, Harish Meh a anSubramaniam Ramadorai, a ormepresiden o Compu er Sciences o

India - Heman Sonawala and a ormpresiden o CIO Klub - Shirish Gariba

The award is a es amen o our con inual ocon quali y. We main ain quali y s andards, no oas projec requiremen s, bu as a way o li e aorganisa ion.

Rahul L. Kanodia, Vice Chairman and C

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Much before CSRbecame a buzzwordamong companies in India,Datamatics was alreadypractising it to make adifference and create apositive impact on thecommunities, cultures,societies and environmentsin which it operates.

CSR is a par o corpora e s ra egy a Da ama ics o mhe Companys goals. I is endorsed by he leadership, linkeo specic objec ives and aligned wi h core compe encie

The CSR@da ama ics is a care ully ou lined plan made inconsul a ion wi h s akeholders o he Company. Alignwi h he guiding principles o he UN Global Compac , overall aim o he CSR ini ia ives a Da ama ics is o meaning ul long- erm sus ainable con ribu ion o he socand environmen by linking his con ribu ion o he inclupro able grow h objec ive o he organisa ion. Our ocus igenera ing employmen or hose who need i bu are unableunder ake regular commu e o office, o reach ou o he unserved wi h employmen oppor uni ies o help hem becomnancially independen . Our goals are aligned o empowewomen wi h gender equali y policies a he workplace and con ribu e o he environmen by raining employees o lelow carbon oo -prin li es yle a home and in he office.

QUALITY IS A DEGREE OFEXCELLENCE.. QUALITY IS ANINHERENT FEATURE.

~ (Webs er English Dic ionary)

CSR = Making a Difference

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chores and men al s imula ion. I giveshem he exibili y o ime, reedom o

work and a sense o accomplishmenand achievemen on heir own erms.

The KA model has also been a boonor physically challenged people whoind i di icul o ge employmen

elsewhere. Da ama ics has beenassocia ed wi h he Chembur basedNGO NASEOH or he pas 10-12years. Da ama ics no only providedemploymen o hese people, bualso dona ed compu ers oNASEOH.Since hen, more han 50 physically

challenged people have bene i edrom his acili y. Many o hem have

been able o buy heir own PCs ands ar working rom heir own homes.Adequa e raining and eedback isprovided by Da ama ics o achieve

he high quali y s andards ha everycus omer demands.

Apar rom housewives and physicallychallenged people, many re ired people,s uden s and ree lancers have alsobeen associa ed wi h Da ama ics asKAs.

Da ama ics has been associa ed wi hmore han 5,000 Knowledge Associa es

or he pas 20 years. KAs can work romany corner o he coun ry.

Besides home based pro essionals,

Da ama ics also engages people inrural BPOs and con ribu es o crea ingemploymen in rural areas.

ASHA

We have chris ened our CSR ini ia ivesas ASHA. ASHA ries o igni e hope

or he less privileged communi ies

o socie y. This is a social con ribu ionac ivi y or employees o raise undsor social wel are causes. Through

employee undraisers AND communi ycon ribu ion, Da ama ics and i semployees con ribu e o social wel are

acili ies na ionwide. Moreover,all hrough he year, employeesen husias ically volun eer o par icipa ein seasonal and holiday even s a a

varie y o social wel are ini ia ives in anaround he workplace

KNOWLEDGE ASSOCIATES KAMODEL

Da ama ics pioneered he uniqueKnowledge Associa e (KA) model oenable a varie y o people o work romhome. These Knowledge Associa esinclude qualied homemakers, hephysically challenged, differen ly-abledand re ired people.

The KA model provides qualied ladieswi h domes ic cons rain s he reedom

o work rom home. Besides a regularmeans o earn, he KA model also giveshem he oppor uni y o learn new skills,

provides a break rom he daily house

RURAL EMPLOYMENTFROM RURAL BPO

BRIDGING THE RURAL URBAN DIVIDE

Our rural sourcing ini ia ives agenera ing employmen oppor uni iin rural and semi-urban villages and

owns or inclusive grow h. Da amabene s rom he good-will anavailabili y o quali y human resourcresul ing in lowered atri ion ra es anhigh level o dedica ion o work.

This ini ia ive also aims a reducing pressure on he already overcrowdedand over-s ressed me ropoli anin ras ruc ure o big ci ies where joblpeople rom he rural areas usuallmigra e in search o employmen . making gain ul employmen available qualied rural candida es, we offer heman oppor uni y o live a li e o dign

heir home- owns wi h a much beteli e-s yle han wha hey would expas jobless migran s in he ci ies. Thini ia ive hus aligns wi h he UN GCompac guiding principles o humrigh s o air employmen oppor uni

or labour.

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SUPPORTING A HOME FOR THEHOMELESS

Mumbai s ree s are no paved wi h gold.Bu i one looks care ully, one will nd

litle gems around he dark corners, underhe bridges and on railway pla orms.Wha maters here is how many o ushave he in en ion o looking a hem.

Da ama ics is associa ed wi hSNEHASADAN- a home or more han20,000 homeless children hrough i s in-house ini ia ive JOSH. We have variousini ia ives where we con ribu e hroughvarious JOSH ac ivi ies. Our employeesalso volun arily con ribu e owards hisnoble cause.

JOY OF GIVING WEEK

One week prior o Chris mas, Da ama icscelebra es he Joy o Giving Weekwhere employees are given a chance oshower heir blessings on he childrenby giving books, oys, clo hes or cash or

he children so ha hey also ge gifs onChris mas and hence, manage o bring asmile on he childrens aces.

WOMEN EMPOWERMENT

Datamatics is committed to the promotion ofgender equality & theempowerment of womenin the society.

GENDER EQUALITY

A Da ama ics, we believe genderequali y is an in egral o he developmeno human socie y. Our hiring policiesand career grow h oppor uni ies ares ric ly per ormance based. We believein equal oppor uni ies or all and grow hprospec s are always meri based.

REGULAR MEDICAL CHECK UP

Regular camps are se -up in associa ionwi h repu ed hospi als or womenemployees o provide ree medical

check-up. This ini ia ive is managed bya commitee o women, wi h membersspanning across all grades in heorganisa ion.

BLOOD DONATION DRIVES

Da ama ics encourages i s employees odona e blood and in case o emergencyor or any acciden , employees can avail

he service and u ilise he blood romhe blood bank. I helps serve as a readyda abase or acu e emergencies andalso helps he socie y in general.

EMPOWERING WITH SKILLS

We have collabora ed wi h an NGO-SOURCE FOR CHANGE, o rain ruralwomen employees on cer ain projec s oempower hem. We arranged web based

raining or he eam or Da a Cap uprojec BAV (Brand Asse Value) andempowered hem o earn a living.

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RecycleKaro.com RecycleKaro is a provider o

recycling and renewable energysolu ions.

RecycleKaro collec s paper romour various offices and in urnprovide us wi h no epads wiDa ama ics branding and a pulpincer ica e. Till da e, we havrecycled 1,047 kgs. o paper.

TERI SOLAR LANTERNS

One o he challenges acing he world

oday is o provide sus ainable energyo all i s ci izens. The ask is massivebu solu ions ofen come rom small,localised ini ia ives.Ligh ing a BillionLives is one such ini ia ive.

Da ama ics has par nered wi h TERI(The Energy and Resource Ins i u e) oprovide solar lan erns wi h one solarcharging s a ion in Navapada Villagein Wada dis ric on he occasion o he

es ival o ligh s - Spreading Ligh andEnligh ening Lives. I was a par o acampaign launched by TERI in 2007called Ligh ing a Billion Lives wi h avision o provide clean and affordablesource o ligh o unelec ried orpoorly elec ried villages o India.

PAYROLL GIVING PROGRAMME

We have also launched a Payroll GivingProgramme, o mobilise corpora eci izenship. This programme wouldenable employees o dona e a smallpar o heir salary owards our CSRini ia ives. I is comple ely volun ary, andemployees have he op ion o change ordiscon inue heir mon hly con ribu ion.This volun ary ac ivi y has displayed

he open-hear and righ eous ati ude

EYE ON CARBON FOOTPRINT

Mass Commuting ArrangementWi h a view o reduce he number priva e vehicles, we ini ia ed he MCommu ing Arrangemen . Over halour employees in Mumbai are availing o

his acili y which has helped ake offleas ew hundred priva e vehicles ro

he roads.

In Mumbai alone, we curren ly havover 750 employees using our masscommu ing arrangemen s consis ino 15 buses. This is clearly 750 wwheelers or our-wheelers off he roadsclubbed in o jus 15 buses plying acroMumbai. We also conduc awarenesprogrammes owards he bene s ocar-pooling or hose who canno av

he mass-commu ing op ion.

o every employee o Da ama ics. Thepar icipa ion brings or h a communi yo champions coming oge her or he

wellness o socie y.

CARING FOR THE ENVIRONMENT

GrowTrees.comGrowTrees.com is an official campaignpar ner o he Uni ed Na ionsEnvironmen Programmes Billion TreeCampaign and is also he official par nero WWF Ci ies or ores Campaign.

The websi e o ers individuals andcompanies worldwide he acili yo growing a ree or rees o honouror remember someone, or o secarbon emission, or which anelec ronic cer i ica e is issued by

he company.

In order o suppor his noble cause,Da ama ics plan s rees on employeesbir hdays hrough Grow rees.com inKumbhalgarh, Rajas han. An E-cer ica eis given o employees on heir bir hday.Till da e, we have plan ed 6,140 rees.

5,843 plan ed or employees

143 plan ed or amily members

154 plan ed or clien s

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Board of DirectorsDR. LALIT S. KANODIA, CHAIRMAN & WHOLE TIME DIRECTORDr. Lali S. Kanodia, he ounder and Chairman o Da ama ics Group o Companies is one o he p

he Indian Sofware and Offshore Services Indus ry. He ounded Da ama ics in 1975, prior o which he wounder CEO o Ta a Consul ancy Services.

Afer ob aining degree in engineering rom Indias premier echnology ins i u e, IIT, Bombay, Dr. Kcomple ed his MBA and Doc ora e in Managemen rom MIT (USA). He is a Ford Founda ion Fellow

As Chairman a Da ama ics, Dr. Kanodia drives s ra egic ini ia ives. His leadership has led Da amacon erred wi h various awards over he years, including he Mos Innova ive Sofware Produc Awardhands o he Prime Minis er, he Ramkrishna Bajaj Na ional Quali y Award or Services and he In eAsia Pacic Quali y Award.

Dr. Kanodia has been an Execu ive Member o NASSCOM, he apex body o he IT-BPO indus ry in was Honorary Consul General o Chile in India (2002-2014). He has held several eminen posi ions wi hindus ry associa ions. He is a member o he Execu ive Board o MIT (USA).

MR. RAHUL L. KANODIA, VICE CHAIRMAN & CEO

Rahul has an MBA degree rom Columbia Universi y (USA), wi h a major in Business S ra egy & Mand a minor in Mergers & Acquisi ions and Turnaround Managemen . He also has wo Bachelor degreesBabson College (USA), and H. R. College (India).

An en repreneur a hear , Rahul es ablished he offices o Da ama ics America in 1992 in New Yoryoung age o wen y-ve. He orged alliances wi h global leaders in ne working, mobile compusecuri y solu ion. He ini ia ed organisa ional res ruc uring and nancial re-engineering or suppor ingrow h and innova ion. Under his dynamic leadership, Da ama ics has crea ed a global oo prin as aprovider o IT & BPO services & solu ions wi h success ul deploymen s in over 60 coun ries.

Rahul serves as he Chairman or he Wes ern Region o ESC (Elec ronics and Compu er Sofware EPromo ion Council, Governmen o Indias larges Elec ronics and IT rade acili a ion organiza ioalso a member o NASSCOMs Regional Council.

MR. VIDUR V. BHOGILAL, EXECUTIVE DIRECTOR & GROUP CFOVidur is a qualied Char ered Accoun an (CA), Cos Accoun an (ICWA) rom India and a Cer iAccoun an (CPA) rom he U.S. He is also a law gradua e. Vidur s ood rs in India in he CPA Examinalso a rank holder in he CA and ICWA examina ions. He was awarded a gold medal or securing he highesin he ICWA nal examina ion or he Quan i a ive Techniques and Managemen In orma ion Sys ems

Vidur has over 20 years pro essional experience in s ra egic res ruc uring, M&A, corpora e governnance, adminis ra ion and legal. He is ac ively driving he grow h o CIGNEX Da ama ics as ChaLumina Da ama ics as Vice Chairman. In Da ama ics, Vidur has managed several success ul acquisimergers & res ruc uring in India, US, Germany and UK and played a key role in orex managemen , planning and con rols, inves or rela ionship managemen and und raising.

He was ranked as nalis in CFO Awards 2013 and also go Da ama ics ranked as nalis or he CorDeal o he Year in 2014 or he mos recen

MR. SAMEER L. KANODIA, EXECUTIVE DIRECTORSameer is a B.Sc. in Business Adminis ra ion rom Bryan Universi y, USA, wi h Marke ing as a majorwi h honors. Among he honors he earned during his undergradua e years was being ea ured in heLis hroughou he program. He subsequen ly received his Mas ers in Business Adminis ra ion roUniversi y, USA, wi h Finance as a major.

Sameer has spearheaded he Companys success ul expansion in Tier II ci ies like Nashik and Puducherry. Bbeing ac ively involved, he also drives various s ra egic ini ia ives, expansion plans and go- o-marke s ra

He is curren ly serving on he Board o Trus ees a Bryan Universi y since February 2008.

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MR. R. K. SARASWAT, NON EXECUTIVE INDEPENDENT DIRECTORMr. Saraswa commerce gradua e and a Fellow Member o The Ins i u e o Char ered Accoun an s

He has more han 40 years o experience in Finance & Accoun s. Prior o his re iremen rom DLimi ed as Direc or (Finance), he was he Presiden o S. M. Dyechem Limi ed and Senior Vice PrGrasim.

MR. SUDHIR C. DESHPANDE, NON EXECUTIVE INDEPENDENT DIRECTORMr.Deshpande is an Civil Engineer rom he Universi y o London. He comple ed his Mechanical E(M. Phil) rom he Kings College, Universi y o London. He has also ob ained a Cer ica e o PS udy in Engineering rom Universi y o Cambridge, he UK.

Mr. Deshpande has more han 45 years o experience in Design Engineering. He specializes as a Geo eConsul an especially in Soil Tes ing Techniques.

MR. DILEEP C. CHOKSI, NON EXECUTIVE INDEPENDENT DIRECTORMr. Choksi is a Char ered Accoun an in prac ice or over 35 years. He is also qualied as a Lawyer aAccoun an .

Mr. Choksis areas o specializa ion include ax advisory and li iga ion, s ruc uring o collabora ioven ures, execu ive advisory and decision suppor , and corpora e res ruc uring wi h a ocus on

urnaround and change managemen s ra egies.

Mr. Choksi con ribu ed in he prepara ion o Kanga and Palkhivalas The Law and Prac ice o IncomeEdi ion) by la e Mr. N.A. Palkhivala and Mr. B.A. Palkhivala.

MR. DILIP D. DANDEKAR, NON EXECUTIVE INDEPENDENT DIRECTORMr. Dandekar holds a Governmen Commercial Diploma. He served as he Presiden o he Indian MChamber and Maharash ra Chamber o Commerce, Indus ry and Agricul ure. He is a member o he Commitee o he Federa ion o Indian Chambers o Commerce and Indus ry (FICCI).

Mr. Dandekar is he Chairman o Kokuyo Camlin L d and Camlin Fine Sciences L d. He is curren ly Consul o Mongolia, Mumbai, Maharash ra S a e. He has over 42 years o experience in he eld o adminis ra ion and overall managemen o companies.

MRS. ASHA L. KANODIA, NON EXECUTIVE NON INDEPENDENT DIRECTORMrs. Asha L. Kanodia is a Non-Execu ive Non- Independen Direc or o he Company. She is an arin Psychology rom Universi y o Mumbai. She s udied Social Psychology a Massachusets InsTechnology (MIT), Bos on, (USA). She has also comple ed several par ime courses while in EnglaS anhope Ins i u e.

Mrs. Asha L. Kanodia is an In erior Designer. She has designed mos o our Offices o he company. Sh40 years o experience in In erior Designs.

MR. SHAHZAAD S. DALAL, NON EXECUTIVE INDEPENDENT DIRECTORMr. Dalal is a Managemen Gradua e rom he USA.

Mr. Dalal is he Chairman & Chie Execu ive Officer o IL&FS Inves men Advisors LLC which is asubsidiary o IL&FS Inves men Managers L d., one o Indias leading Priva e Equi y Fund Manage3.2 billion under managemen .

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uality

QUALITY IS THE EXPRESSION OFHUMAN EXCELLENCE.

QUALITY is ingrained andembedded in every employeeat Datamatics, and is re ectedin every project we undertakeand every solution we deliver.

Our customers have alwaysappreciated the extra effort andattention our teams put intoevery project, right down to theminutest details.

= STAR PERFORMANCES

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POSTFINANCE APPRECIATION

Pos Finance, one o Swi zerlandsleading nancial ins i u ionsapprecia ed he exemplary effor s o

he Da ama ics Team which includedR Se huraman, Subu Achyu uni, MohiDixi , Mayur Kshirsagar, Kishore Tho aand Paresh Raha e or Projec 2710

This was an ex raordinary efforand is very much apprecia ed romPos Finance as a whole, and heProjec and Inves iga ion businessuni s in par icular. In his period o

ime, Da ama ics eam has workedover ime (possibly on weekendsas well) o make he success o heprojec . The quali y o he deliveredchanges was so high, ha we couldminimize and ake he risk o suchla e changes in order o go live wi h allbusiness requiremen s me .

ICICI PRUDENTIAL

ICICI Pruden ial Li e Insurance Co L dawarded Bes Vendor or New BusinessIssuance o Da ama ics a he ICICIPruden ial Ta va Awards held on 7h April, 2014 a The Lali Ho el, Mumbai.The eam was excep ionally led byRamaswamy Subramanian, Dilip Sahu,Sa ish Pandi a, Raja Sehgal and Manoj

Menon.

Da ama ics ensures very high level oda a accuracy and quali y services haenables ICICI Pruden ial o service i scus omers wi h excep ional efficiency.

UHC AWARD

The Heal hcare Team a Da ama iled by Deepak Shety, Pravin Poojary,Sandip Chavan, Gopal Ranjan andSen hil Na han, was elici a ed Uni ed Heal hcare (UHC) wi h GLOQUALITY CHALLENGE AWARD.

The award was presen ed a heir SemAnnual UHC Opera ions Global QualChallenge held on 7h March 2014 aThe TRIDENT, Gurgaon. Da amahas won his award or he 5h ime in arow surpassing all expec a ions se bClien on Quali y Me rics and providou s anding quali y a processing s a

O hers who compe ed in his ca egowere some o he well known vendors.

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Financial Overview5 YEARS STANDALONE

( ` in Million)

Par iculars 2009-10 2010-2011 2011-2012 2012-2013 2013-2014

Revenue + O her Income 1,445 1,545 1,730 1,998 2,224

PBT 277 219 276 354 484

PAT 243 213 219 294 414

EPS 4.12 3.61 3.72 4.98 7.02

Ne Wor h 3,013 3,174 3,324 3,584 3,911

Revenue + O her Income

( ` in Million)

09-10

1,4451,545

10-11

1,730

11-12

1,998

12-13

2,224

13-14PAT

( ` in Million)

09-10

243213

10-11

219

11-12

294

12-13

414

13-14PBT

( ` in Million)

09-10

277

219

10-11

276

11-12

354

12-13

484

13-14

( ` per share)

EPS

09-10

4.12

3.61

10-11

3.72

11-12

4.98

12-13

7.02

13-14Ne Wor h

( ` in Million)

09-10

3,0133,174

10-11

3,324

11-12

3,584

12-13

3,911

13-14

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5 YEARS CONSOLIDATED( ` in Million)

Par iculars 2009-10 2010-2011 2011-2012 2012-2013 2013-20

Revenue + O her Income 2,755 2,920 4,519 5,590 7,41

PBT 264 224 375 413 776

PAT 222 208 283 315 582

EPS (Dilu ed) ( ` Per share) 3.76 3.45 4.38 4.53 8.12

Ne Wor h 2,371 2,504 2,714 2,979 3,36

Revenue + O her Income

( ` in Million)

09-10

2,755 2,920

10-11

4,519

11-12

5,590

12-13

7,411

13-14PAT

( ` in Million)

09-10

222 208

10-11

283

11-12

315

12-13

582

13-14

EPS (Dilu ed)

( ` per share)

09-10

3.763.45

10-11

4.38

11-12

4.53

12-13

8.12

13-14Ne Wor h

( ` in Million)

09-10

2,3712,504

10-11

2,714

11-12

2,979

12-13

3,362

13-14

PBT

( ` in Million)

09-10

264 224

10-11

375

11-12

413

12-13

776

13-14

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Corporate

InformationCORPORATE HEAD LEGAL &COMPANY SECRETARYDivya Kuma

AUDITORSM/s. Kanu Doshi Associa es,

Char ered Accoun an s, Mumbai

SOLICITORSUdwadia Udeshi & Argus Par ners

BANKERSCi i BankICICI Bank Limi edHDFC Bank Limi edS andard Char ered Bank

Deu sche Bank

REGISTERED OFFICEKnowledge Cen re,S ree No. 17, Plo No. 58,Andheri (Eas ),Mumbai 400 093.Tel: +91 (22) 6102 0000 0005Fax: +91 (22) 2834 3669

REGISTRAR & SHARE TRANSFERAGENTSDa ama ics Financial ServicesLimi edPlo No. B-5, Par B, Cross Lane,MIDC, Andheri (Eas ),Mumbai 400 093.Tel: +91 (22) 6671 2151

Fax: +91 (22) 6671 2230Email: deposi ory@d ssl.com

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27 Annual Report 2013-14

On behalf of the Board of Directors, I am happy to present the 26 th Directors Report of your Company with the Balance Sheetand Profit & Loss Account for the year ended March 31, 2014.

FINANCIAL RESULTSYour Companys operating performance for the year ended March 31, 2014 as compared to the previous financial year endedMarch 31, 2013 is summarized below:

Particulars (` in Million)Consolidated

(` in Million)Standalone

2013-2014 2012-2013 2013-2014 2012-2013Income 7,411.34 5,589.65 2,223.75 1,998.15Profit Before Interest, Depreciation and Tax 976.26 567.62 565.92 448.19Interest 39.84 34.64 16.30 25.79Profit Before Depreciation and Tax 936.42 532.98 549.62 422.40Depreciation 160.64 120.28 65.30 68.86Profit Before Tax 775.78 412.70 484.32 353.54Provision for Taxation 193.72 98.14 70.42 59.80Profit After Tax 582.06 314.56 413.90 293.74Balance Brought Forward from Previous Year 625.63 480.74 948.33 745.09Profit Available for Appropriation 1207.69 795.30 1,362.23 1,038.83Dividend 115.68 109.35 73.69 58.95Tax on Dividend 19.66 18.32 5.24 1.55Transfer to General Reserve 47.40 42.00 41.40 30.00Balance Carried Forward 890.30 625.63 1,241.90 948.33

BUSINESS PERFORMANCEYour Company is a global IT and ITeS organization focused

on delivering proactive and smart, next-generation businesssolutions helping enterprises across the world address theirbusiness challenges. Datamatics has become the 2 nd fastestgrowing IT & BPO Company listed on the BSE Limited andNational Stock Exchange of India Limited. Fiscal year 201314 was a remarkable year for your Company.

The consolidated revenues of the Company recorded atotal growth of almost 33% as against NASSCOM predictedY-o-Y growth rate of 14% for the FY 2013-14 and the EBIDTAincreased by nearly 72% during the year. This performancewas achieved amidst stiff macro headwinds globally and a

slowing domestic growth.The total revenue on a standalone basis increased to` 2,223.75 million as against ` 1,998.15 million in the previousyear a growth of 11.29%. The profit after tax for the currentyear was ` 413.90 million as against ` 293.74 million in theprevious year a growth of 40.91%.

On a Consolidated basis, your Company achieved a totalrevenue of ` 7,411.34 million as against ` 5,589.65 million inthe previous year a growth of 32.59%. The profit after taxfor the current year was ` 582.06 million as against ` 314.56million in the previous year - a growth of 85.04%.

CRISIL RATINGSThe Company was awarded A1+ highest rating by CreditRating Information Services of India Limited (CRISIL) .This rating signifies that your Company has a strong degree ofsafety regarding timely payment of financial obligalitions. Thisrating reaffirms the financial stability and the low risk profile ofthe Company.

DIVIDENDIn line with the excellent performance during the year, yourDirectors are pleased to recommend for approval of members,a final dividend of ` 1.25 per share (25%) for Financial Year2013-14.

TRANSFER TO RESERVESThe Company has transferred ` 47.4 million to the GeneralReserve from the amounts available for appropriation. Anamount of ` 890.30 million is proposed to be retained in theProfit and Loss Account.

TRANSFER OF BUSINESS/UNDERTAKINGDuring the year under review, the Company has transferredits Digital Publishing & eRetail Solutions (DPeRS) business/undertaking with all its assets and liabilities, as a goingconcern on a slump sale basis to erstwhile DatamaticseRetail & Publishing Limited, a wholly owned subsidiary ofthe Company.

DIRECTORS REPORT


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28Datamatics Global Services Limited

ACQUSITION OF SHARES IN LUMINADATAMATICS LIMITEDDuring the year, your Company, through its wholly ownedsubsidiary erstwhile Datamatics eRetail & Publishing Limitedacquired a 73.12% stake in Lumina Datamatics Limited(Formerly known as Lexicon Publishing Services PrivateLimited) by way of a Scheme of Arrangement/Amalgamation

sanctioned by Honble High Court of Madras.

INVESTMENT IN SUBSIDIARIES As on March 31, 2014, your Company has made investmentsworth ` 563.76 million in its overseas subsidiaries and` 577.60 million in its Indian subsidiary.

SUBSIDIARY COMPANIESDuring the year under review, following are the significantdevelopments with respect to the subsidiary companies:

Your Company has expanded its operations by forminga wholly owned subsidiary in Dubai in the name ofDatamatics Global Services FZ-LLC;

Invested USD 9.3 million in preference shares ofDatamatics Global Technologies Limited, the whollyowned subsidiary of the Company and also redeemedUSD 5 million preference shares of Datamatics GlobalTechnologies Limited, the wholly owned subsidiary of theCompany;

The Company has the following Indian subsidiaries (includingthe step down subsidiaries) as on March 31, 2014:

1. Datamatics Software Services Limited2. Cybercom Datamatics Information Solutions Limited

3. CIGNEX Datamatics Technologies Limited

4. Datamatics Vista Info Systems Limited

5. Lumina Datamatics Limited (Formerly known as LexiconPublishing Services Private Limited)

6. Datamatics eRetail & Publishing Limited @

The Company has the following overseas subsidiaries(including the step down subsidiaries) as on March 31, 2014:

1. Datamatics Global Services, Inc. (US)

2. Datamatics Global Services GmbH (Germany)

3. Datamatics Global Technologies GmbH (Germany)

4. Datamatics Global Solutions GmbH (Germany) $

5. Datamatics eRetail & Publishing GmbH (Germany) $*

6. Datamatics Global Services GmbH d.o.o. in Bosnia(Switzerland)

7. Datamatics Technologies UK Limited (UK)

8. Datamatics Infotech Limited (UK)

9. Datamatics Global Services Pty Limited (Australia)

10. Datamatics Global Technologies Limited (Mauritius)

11. Datamatics Global Holding Corporation (BVI)

12. Datamatics Global Technologies AG (Switzerland)

13. Datamatics Global Services FZ-LLC (Dubai) $$

14. Lumina Datamatics, Inc. (US) (Formerly known asPremedia Global, Inc.)

15. CIGNEX Datamatics Corporation (BVI)16. CIGNEX Datamatics, Inc. (US)

17. CIGNEX Datamatics Pte. Limited (Singapore) @ Incorporated in India during the year and amalgamated with

Lumina Datamatics Limited with effect from March 31, 2014. $ Incorporated in Germany during the year. $$ Incorporated in Dubai during the year. * Renamed as Lumina Datamatics GmbH w.e.f. August 19, 2014.

Pursuant to Section 212(8) of the Companies Act, 1956,the Ministry of Corporate Affairs, Government of India, videits Circular No. 2/2011 dated February 8, 2011, has granteda general exmeption from attaching the Balance Sheet,statement of Profit & Loss Account and other documetns ofsubsidiary companies with the balance sheet of the Company.

A statement containing the brief financial details of theCompanys subsidiaries for the financial year ended March31, 2014 is included in the annual report. The annual accountsof these subsidiaries and the related information will be madeavailable for inspection to any member of the Company at theregistered office of the Company.

DATAMATICS DELIVERY CENTRES IN TIER IICITIESTier II cities are the most favored destination of highly cost-

sensitive BPO service providers. As a business strategy,major BPO players have been moving to and expanding theiroperations in Tier II cities. Datamatics was early to realize thisbusiness imperativeness and set up its first Tier II deliverycentre at Nashik during July 2007 followed by the Puducherrysite in October 2011. These initiatives have helped theCompany leverage on the vast untapped talent pool atthese locations at a relatively lower wage as compared withTier I cities while simultaneously keeping the attrition withinmanageable limits.

Nashik

After successfully executing all our BPO service lines, the siteis currently gearing up to tap the IT talent potential of Nashik.The 55,000 sq. ft. state-of-the-art-facility is the single largestfacility under one roof that the Company has. Our headcountat the Centre is now in excess of 1000 staff members. Theguest house is located in close proximity to the office.

The Company owns approximately 12 acres of land situatedon the Bombay-Agra Highway (NH-3), about 10 kms awayfrom our existing office. The Company intends to build acampus in the future.


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Puducherry

After its successful foray into the publishing business atPuducherry, the site is now home for one more BPO serviceline viz. Document Management Solutions. From a valuecreation perspective, the site is a cost-effective location.

In addition to its primary role as the Delivery Centre ofExcellence, both these sites are also functioning as BusinessContinuity Centres to support all other delivery units of theCompany. The success of business operations at the abovetwo Tier II sites enables the company to stay ahead ofcompetition and provides impetus to the Companys focus onsuch strategic initiatives.

INTELLECTUAL PROPERTY RIGHTSIntellectual property is not just about product but

process as well.

As a policy to ensure sustainable means of wealth creation,your Company has 17 copyrights registered till date for itsproprietary processes and various logos. It has also registeredits proprietary logos as Trade Mark and Service Mark in India,the UK, the USA and the European Union (EU) and its 27member countries.

During the year under review, your Companys subsidiaryCIGNEX DATAMATICS Inc. has successfully registered thetagline MAKING OPEN SOURCE WORK in the USA. Thelogo of CIGNEX DATAMATICS Making Open Source Workhas been registered in the USA, the EU and its 27 membercountries.

Your Company has also registered the iQ logo with thetag words Intelligent Accurate Quick in India, the EU andits 27 member countries. The Company also succeeded inregistering the tag line Smart Document Processing in India.

The Companys brand name DATAMATICS is registeredas Trade Mark as well as Service Mark in India, UK, USA,

Australia, China, Norway, Switzerland, EU and its 27 membercountries and its logo is also registered in India, the UK, USA ,EU and its 27 member countries.

LEARNING & DEVELOPMENT A large number of programs were successfully conductedby the Learning & Development (L&D) team during the year2013- 2014:

The Eagles @ Datamatics Program Phase VI was flaggedoff in August 2013, with 25 Eagles, 5 mentors and a strongLeadership team of 6 members. The Duration of the programwas 7 months. This phase of the Eagles was regarded as themost successful program as it helped the Company to build 21alliance partners. The teams also developed systems whichwill benefit the organization in the long run.

Game Changer The Lead Generation Program:

Lead generation and associated market research is the mostimportant and critical aspect of any business. It is important forthe teams associated with these activities to demonstrate veryhigh levels of commitment and passion. With this objective, aunique program called the Game Changer was launched inJuly 2013 with 31 fresh MBA Graduates of different specialties

and 7 mentors. The first season of this program concluded withgreat success on March 31, 2014. It helped the organizationin creating passion and high levels of energy across the leadgeneration and market research teams with focus on theirpassion, creativity, resourcefulness, accountability, influencingskills and belief in themselves. As a result, the teamssuccessfully contributed a large number of qualified leads/opportunities for our Company.

Other Initiatives by the L&D team:

1) Blended Learning:

Training via the WebEx Training tool: The L&D teamhas expanded their horizons for training execution to bedone via WebEx for employees across the organization.With the help of the tool L&D is able to address the globallearning audience with ease and also large audienceseffectively. This helps the L&D teams to execute trainingand participants to participate in training from any location.Its a win-win situation for all the parties involved. The L&Dteam records the training for future usage and executesthe pre-recorded training via WebEx. Recorded WebExtraining is made available to employees as and whenthey feel the need to revisit any training in case they havemissed this during the live session. This has imbibed acontinuous learning attitude amongst the employees.

2) Learning Foreign Languages:

The L&D Team has flagged off Level 1 Italian & Germanlanguage training for its employees. The employees arebeing trained to complete the level 1 Certification as soonas this training comes to an end. For now this has beenimplemented in Puducherry & Nashik premises.

3) Project Management Preparatory Course (PMP) 5 th Edition:

Being a Registered Education Provider (REP) for PMP, a5-day training was scheduled in Mumbai, MIDC premisesfor those engaged in an activity that contributes to themanagement of a project, portfolio, or program, as part ofthe project management profession.

With all the above, the L&D team has clocked 210,515 man-hours in the year 20132014 as compared with179,140 man-hours in the year 20122013 with anaverage feedback of 4 out of 5.


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SIGNIFICANT AWARDS & ACHIEVEMENTSDuring the year, in recognition of its performance andinitiatives, the Company received several awards, some ofwhich are:

Datamatics along with the Market Research Society ofIndia (MRSI) and the European Society for Opinion &Marketing Research (ESOMAR) instituted the Dr. Lalit S.Kanodia Laureate Award for Technology Excellence inMarket Research;

Datamatics became the only software company inIndia to win the Computer Society of Indias Award forIT Excellence in Corporate Business CollaborationSolutions twice;

Won the prestigious IMC-IT award for Quality;

Won the Information Week EDGE Award along with ourclient for the implementation of technological solutionsthat helped automate clients Mutual Fund process;

Received the Most Valuable IT Software Company inIndia award at the 4 th Annual India Leadership Conclave& Indian Affairs Business Leadership Awards;

Received the award for Best Corporate SocialResponsibility Practices; an award endorsed by WorldCSR Day, Asian Confederation of Business and WorldFederation of CSR Professionals;

Received the award for Best HR Strategy in Line withBusiness at the 8 th Employer Branding Awards, WorldHRD Congress;

Won the Best Communications Campaign Award at theCorporate Excellence Awards 2013;

Included in the Leader Category for the 2014 GlobalOutsourcing 100 providers list released by theInternational Association of Outsourcing Professionals.Ranked amongst the Best 20 Companies in India forthe third time in a row and included in the prestigiousGlobal Services 100 list of the Best 100 IT outsourcingcompanies for the fourth year in a row;

Won the prestigious Sitecore Website of the Year 2013award in the Not-for-Profit Website category;

CIGNEX Datamatics Technologies Limited receivedthe Innovator in Technology of the Year award at theNational Trial Lawyers summit in Miami for their solutiontitled Social Media Sentiment Analytics;

Datamatics team was felicitated by a global client withtheir Global Quality Challenge Award for the 5 th time in arow;

Dr. Chandra Mauli Dwivedi Datamatics Global Head,HR & CSR was listed among the 50 Most TalentedGlobal HR Leaders in Asia for 2014 at the 22 nd WorldHRD Congress;

Ms. Divya Kumat, Corporate Head Legal & CompanySecretary, won the General counsel of the Year Femaleaward at the 7 th edition of the Legal Counsel Congress

Awards;

Ms. Varad Kamini, HeadMarketing Communications atDatamatics, won the prestigious Women Super Achiever

Award for Excellence in the Marketing Communications

category at the World Women Leadership Congress & Awards;

Ms. Ankita Singh, Head Employee Relations & OD atDatamatics, won the prestigious Leading HR Women

Award at the 5 th Annual Women Leaders in India Summit.

FUTURE GROWTH STRATEGYIn the last fiscal, the Company made good progress intheir strategic initiatives to drive high business growth. Inthe current fiscal, we shall continue our growth trajectorywith renewed focus on growth through a mix of organic andnon-organic initiatives. The Companys priority this year is tocontinue to emphasize on our core business areas. We shallat the same time capitalize on opportunities that are beingcreated in the new growth areas.

The four key elements of our strategy for continued businessgrowth include:

Digital Transformation: The digital economy is enteringa new age that presents unforeseen challenges. Withextensive experience in understanding the digitaleconomy, Datamatics is strategically placed to help itsclients deliver excellent service through services, andbusiness process through digital value added services.

Enterprise Content Management (ECM) & PortalSolution: Driven by advances in consumer technology,user expectations have also evolved. Datamatics teamhas the expertise to create and develop ECM solutionsthat are portal-based, intuitive and personalized andeasy to use across multiple applications. We have hadgood success in this area and expect to maintain thisgrowth trend.

Open Source: Open Source is fast emerging as aplatform of choice, and we expect this to continue toaccelerate and attract growth. We are in a very strongposition to capitalize on this opportunity, as CIGNEXDatamatics, one of our subsidiary company is a leaderin Open Source space.

Platform-based BPO: Customers are moving awayfrom traditional outsourcing models to vendors that canprovide Technology + BPO services. Catching on thistrend early enough, Datamatics has been successfullyproviding platform based BPO services to its clients. Weplan to leverage our technological prowess, combinedwith a focus on process excellence and high quality BPOservices to increase our client base.


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Inorganic Growth/ Eco-system partnerships: Ourstrategy is to build strong partnerships in the areas ofdomain, technology and geography with the objectiveof driving differentiated solutions whilst working withan active partner ecosystem. It could be in the form ofinvestments through M&A or an alliance partner.

QUALITYYour Company continues to focus on quality. This year, yourCompany won the Award for Excellence in Quality at the IMCInformation Technology Awards. We have been continuouslywinning best quality and service awards at events organizedby our various prestigious Fortune 500 customers. This yeartoo we won several such awards. Your Company is the first andthe only I.T. Company to have won the International AsiaPacific Award for Quality in Services sector. The Award waswon against competition from hundreds of companies from 38countries spread across the world, including the US, Japan,

Australia, New Zealand, Russia, Canada, China, Israel, South

Korea, Peru and Mexico. Further significant initiatives of yourCompany towards quality are:

1) Six Sigma Initiative

We have adopted the proven Lean Six Sigmamethodology in conjunction with Kaizen to make ourprocesses efficient, robust and defect free and alsoto improve productivity and cost effectiveness. Thisinitiative continues to deliver significant benefits tothe Organization with improvements in Productivity,Efficiency, Quality and Customer Satisfaction. Overall300 Six Sigma Projects and 1502 Kaizen Projects have

been completed since the launch of this initiative in 2007.For the past consecutive three years, our improvementprojects have been ranked within the top 5 projects outof around 80 projects in QIMPRO Conventions.

In the last financial year, an overall benefit that includestangible and intangible benefits, of ` 22 million with anROI of more than 200% was achieved through theseperformance improvement methodologies.

The Company has about 14 Six Sigma Green Belt and20 Six Sigma White Belt certified professionals alongwith 3 Six Sigma Black Belt and 1 Six Sigma MasterBlack Belt certified professionals. The Company spentover 4500 person hours of training around ContinuousImprovement in the last financial year.

2) Certifications

Your Company, keeping true to its commitment ofdesigning and implementing its Quality ManagementSystems as per the global standards and benchmarkshas been assessed and certified on standards suchas ISO 9001:2008, SEI - CMMI Version 1.3, and ITIL.New centres that we added last year have also beenassessed and certified for compliance to these standards

In addition, we retained the ISO 27001:2005 certificationfor our Information Security Management Systems. OurUS unit has been certified compliant to PCI standardrequirements. We have further strengthened ourInformation Security Management Systems (ISMS)by incorporating the guidelines and being certified forinternational standards such as SSAE 16 and HIPAA.

3) Customer Satisfaction Tracking The Customer Satisfaction and Loyalty index measuring

process continues to provide invaluable insights intoour Customers expectations and our performance vis--vis these expectations. This is done once every sixmonths and captures Customers feedback on a widerange of parameters that encompass each aspect ofservice excellence. We feel proud to share with you thatoverall our Customer Satisfaction Index has been 4.90on a scale of 1-6 (1 being the lowest and 6 being thehighest) with a significant number of Customers ratingus a perfect 6/6 on all parameters. In addition to this

formal mechanism, we also have systems that capturecustomer feedback received through other formal andinformal channels.

4) Metrics and Process Compliance Index

We use a Delivery Index to measure and comparethe performance for each Line of Business (LOB). Itincorporates the three key indicators of performance ofany project viz Quality, Effort and Schedule adherenceand a stop light (red-amber-green) dashboard is used todisplay the performance.

In addition, regular Process Compliance checkups and

speedy follow-ups on the corrective and preventiveactions have helped us significantly to keep non-compliances in check and thereby reduce rework anddefects at the source. Process Compliance Index (PCI)measures and compares the compliance levels for thedifferent LOBs.

The defined Quality Gates ensure that we are adheringto process requirements and deliverables at each of thecritical stages of the Project. A regular review of this withSenior Management ensures that the processes are ontrack.

In order to create processes at par with global bestpractices, we have also tied up with a number of globalforums such as ISBSG, CSI and PMI to understandand benchmark ourselves against key metrics. We re-visit and revise our metrics regularly to ensure that ourperformance levels are comparable to the best-in-class.

PROCESS ENGINEERING (PE) CELLThe PE Cell of the Company has the task of increasingproductivity and quality of our BPO/ ITeS processes. Toaccomplish this goal, this Cell has developed severalproprietary and copyrighted Software products that include


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i-Q and Robokey. They are also focusing on creating IP whichcan result in a recurring revenue stream.

i-Q and Robokey have won recognition and awards.Datamatics has become the only Software Company in India tohave won this award twice from the Computer Society of Indiain 2013 and 2011. Datamatics has also won the InformationWeek Edge Award twice in 2013 and 2010. These awards

have been won for software developed by the PE Cell.These products have resulted in a significant increasein quality, productivity and profitability in several projectsoutsourced to Datamatics by its clients. These products alsogive a significant edge to the Company while bidding for largeBPO outsourcing projects.

The PE Cell was also instrumental in developing CATALISTSwhich is deployed by GS1, an organization that developsand maintains standards for Retail, Healthcare, Transport& Logistics, Automotive, Finance and Defense sectors.Datamatics has been included as a US solution programpartner of GS1, which includes companies such as Oracle.

SHIFTING OF REGISTERED OFFICEThe Companys registered office has been shifted from UnitNo. 117-120, SDF 4, SEEPZ, Andheri (East), Mumbai 400096 to Knowledge Centre, Plot No. 58, Street No. 17,MIDC, Andheri (East), Mumbai 40 0093 , with effect fromJanuary 29, 2014.

SECRETARIAL AUDITDr. K.R. Chandratre, Practicing Company Secretary,conducted Secretarial Audit for the financial year ended

March 31, 2014. Dr. K.R. Chandratre has submitted theReport confirming compliance with the applicable provisionsof Companies Act, 1956 and other rules and regulationsissued by SEBI/other regulatory authorities for corporatelaw. The Secretarial Audit Report for the financial year endedMarch 31, 2014 is provided in the Annual Report.

SHARE CAPITAL As on March 31, 2014, the Paid-up Share Capital of theCompany is ` 294,746,685 divided into 58,949,337 equityshares of ` 5 each fully paid up. During the year, there has

been no change in the Paid-up share capital of the Company.

DIRECTORSIn accordance with the provisions of the Companies Act, 1956and the Articles of Association of the Company, Mr. VidurV. Bhogilal and Mr. Sameer L. Kanodia, retire by rotation atthe ensuing Annual General Meeting and being eligible offerthemselves for re-appointment.

The Company has, pursuant to the provisions of Clause 49 ofthe Listing Agreements entered into with Stock Exchanges,

appointed Mr. R. K. Saraswat, Mr. Sudhir Deshpande, Mr.Shahzaad Dalal and Mr. Dileep Choksi as IndependentDirectors of the Company. In accordance with the provisionsof Section 149(4) and proviso to Section 152(5) of theCompanies Act, 2013, these Directors are being appointedas Independent Directors to hold office as per their tenure ofappointment mentioned in the Notice of the forthcoming AGM

of the Company.Pursuant to the provisions of Section 161(1) of the Companies

Act, 2013 and the Articles of Association of the Company,Mr. Dilip D. Dandekar and Mrs. Asha L. Kanodia wereappointed as Additional Directors designated an IndependentDirector and Non-Executive Non-Independent Directorrespectively w.e.f. August 12, 2014 and they shall hold officeup to the date of the ensuing Annual General Meeting. TheCompany has received requisite notice in writing from amember proposing Mr. Dilip D. Dandekar and Mrs. Asha L.Kanodia for appointment as an Independent Director and

Non-Executive Non-Independent Director respectively.The Company has received declarations from all theIndependent Directors of the Company confirming that theymeet with the criteria of independence as prescribed bothunder sub-section (6) of Section 149 of the Companies Act,2013 and under Clause 49 of the Listing Agreement enteredwith the Stock Exchanges.

During the year under review, Dr. Habil Khorakiwala resignedfrom the position of directorship of the Company. The Boardplaced its sincere appreciation for his valuable contributionduring his tenure as a director of the Company. .

AUDITORSThe Statutory Auditors, M/s. Kanu Doshi Associates, Chartered

Accountants, Mumbai, hold office until the conclusion of theforthcoming Annual General Meeting and have confirmed theireligibility and willingness to accept the office of the Auditors,if reappointed.

INFORMATION ON AUDITORS OBSERVATIONSObservations of Auditors mentioned in the Independent

Auditors Report under the heading Emphasis of Matterregarding non-provisioning for diminution in the value ofinvestments in the subsidiaries has been adequately explainedin Note No. 42 of the Notes to Accounts. These investmentsare for long term and of strategic nature. It is clarified thatthough the net worth of these subsidiaries has declined, themanagement is confident of turning around these subsidiariesin the near future. Hence, it is decided not to make anyprovision in diminution in the value of investments made inthe subsidiaries. The other observations are self-explanatoryand do not require further comments in this report.


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CORPORATE GOVERNANCE A Report on Corporate Governance together with a certificatefrom the Auditors of the Company forms part of the AnnualReport.

DISCLOSURE UNDER SECTION 217(1)(e) OFTHE COMPANIES ACT, 1956I. CONSERVATION OF ENERGY:

The information required in connection with conservationof energy, under Section 217(1)(e) of the Companies Act,1956 read with Companies (Disclosure of Particulars inthe Report of the Board of Directors) Rules, the Directorsfurnish herein below the required additional information:

(a) Conservation of Energy - Our Company being inIT & ITeS industry, our operations are not energyintensive. Adequate measures have been taken toconserve energy.

(b) There were no additional investments andproposals if any, being implemented for reductionof consumption of energy as the nature of yourCompanys operations entails a very low level ofenergy consumption.

(c) Impact of the measures at (a) and (b) above forreduction of energy consumption and consequentimpact on the cost of production of goods N.A.

(d) Total energy consumption and energy consumptionper unit of production N.A.

FORM A: FORM FOR DISCLOSURE OF PARTICULARS

WITH RESPECT TO CONSERVATION OF ENERGY

A. Power and fuel consumption: NIL

B. Consumption per unit of production: NIL

II. TECHNOLOGY ABSORPTION:

Every effort is made by the Company to update thetechnological skills of its technical staff in order to ensurethat they possess adequate skills to enable them toservice the Companys clients.

FORM B: FORM FOR DISCLOSURE OF PARTICULARSWITH RESPECT TO TECHNOLOGY ABSORPTION

ETC.

i. Research & Development (R&D): Your Companyis predominantly a service provider and thereforehas not set up a formal R&D unit. However, itcontinues to develop software tools and productsin its existing delivery setup.

ii. Technology Absorption, Adaptation and Innovation:Your Company has not imported any technologyduring the year under review other than purchaseof software.

III. FOREIGN EXCHANGE EARNINGS AND OUTGO:

I. Earnings in Foreign Exchange during the year:` 1,966.40 million

II. Foreign Exchange Outgo during the year: ` 74.29million.

EMPLOYEE STOCK OPTION PLANS (ESOP)The details of ESOP required to be provided as per Clause 12of the SEBI (Employee Stock Option Scheme and EmployeeStock Purchase Scheme) Guidelines, 1999 are as perAnnexure A to this report.

HUMAN RESOURCES MANAGEMENT (HRM)AND EMPLOYEE RELATIONSThe IT business is primarily talent-led and a people drivenbusiness. Employees therefore, form a crucial and critical partof the success of the Company, and are the most important

resources and assets of the Company.Our Companys endeavor is to provide a work environmentthat encourages a positive attitude and superior performance.The key elements of the Companys HRM strategy include acomprehensive approach to managing people, the workplaceculture and environment.

The HR department of your Company regularly conducts

Climate Survey and Open House to ensure thatemployees views and opinions are taken on board, as wellas the Companys larger strategy is discussed and sharedwith them. Both these initiatives have HR Head, CEO andleadership teams of each LOB to bring a shared understandingof the larger organizational direction.

Your Company has rich diversity in its employees with acommon goal of excellence. A culture of cooperation andcamaraderie is enthused by celebrating National holidays andfestivals such as Independence Day and Diwali. Initiativessuch as JOSH, where employees can bring their children tooffice for a day, back to school and monsoon mania also helpcreate a deep sense of bonding among employees and theirfamilies.

REWARD AND RECOGNITIONReward and Recognition spurs people to excel further, helpsto sharpen the winning edge through people and therebystimulate a culture of high performance. Therefore, ourconstant endeavor is to seek, groom, nurture, facilitate andsuitably reward & recognize individuals and teams who makesignificant contributions to business. The objective of this is toset the guidelines for motivating high performing individuals,helps them to keep striving and reward teams by conferringappropriate awards such as:


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Annual Awards: Datamatics believes in the need torecognize top performers and thank them for their hard workand commitment shown throughout the year. This is done in ahigh profile large scale ceremony held companywide whereinall the employees are invited. There are various categoriesof awards such as merit, excellence to leadership awardscatering to each area of the business.

Spot Awards: Spot Awards are introduced to ensure that thetempo of high performance does not go unnoticed. There are3 kinds of spot awards: a) Individual Spot Award; b) Team

Awards; c) Employee of the month.

Praise for Performance: This program is introduced torecognize the hard work of employees who have earned clientappreciation. It aims to recognize the efforts of employees infront of a larger audience which gives them a sense of prideand contentment.

PARTICULARS OF EMPLOYEESInformation pursuant to Section 217(2A) of the Act read withthe Companies (Particulars of Employees) Rules, 1975, asamended by the Companies (Particulars of Employees)

Amendment Rules, 1999 forms part of this Report. However,as per the provisions of Section 219(1)(b)(iv) of the Companies

Act, 1956, the Report and Accounts are being sent to allmembers of the Company excluding the aforesaid information.

Any member desirous of obtaining this information may writeto the Company Secretary at the Registered Office of theCompany.

ACCEPTANCE OF FIXED DEPOSITS

The Company has not accepted any fixed deposits during theyear.

DIRECTORS RESPONSIBILITY STATEMENT As required under Section 217(2AA) of the Companies Act,1956, it is hereby stated that:

1. in the preparation of the annual accounts, the applicableaccounting standards have been followed along withproper explanation relating to material departur

Datamatics Annual Report 2014

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