As on: Jun 02, 2023 08:06 PM
Dear Members,
Your Board of Directors ("Board") with immense pleasure present their 14th Annual Report of Quess Corp Limited ("the Company" or
"Quess") for the financial year ("FY") ended 31 March 2021 ("the year under review" or "the year" or "FY21").
In compliance with the applicable provisions of the Companies Act, 2013, ("the Act") and the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations"), this report covers the financial results and other developments during the financial year from 1 April 2020 to 31 March 2021 in respect of Quess Standalone and Consolidated comprising Quess, its subsidiaries and associate Companies. The consolidated entity has been referred to as "Quess Group" or "the Group" in this report.
1. Financial Results – An Overview:
In compliance with the provisions of the Act and the Listing Regulations, the Company has prepared its standalone and consolidated financial statements as per Indian Accounting Standards ("Ind AS") for the FY21. The standalone and consolidated financial highlights of the Company's operations are as follows:
Consolidated
A detailed performance analysis on various segments, business and operations are provided in the Management Discussion and Analysis which is annexed to this report.
2. Reserves:
The Company has not transferred any amount to the general reserves during the year under review.
3. Transfer of Unclaimed Dividend to Investor Education and Protection Fund:
Provisions of Section 125(2) of the Act does not apply to the Company as the Company did not declare any dividend till 31 March 2021.
4. Dividend:
The Board of Directors of your Company at their meeting held on 5 May 2021 declared an interim dividend of H 7/- per equity share of H 10/- each for the financial year 2020-21 aggregating to H 1,033.75 million, in due compliance with applicable laws.
5. Dividend Distribution Policy:
Pursuant to Regulation 43A of the Listing Regulations, the Board of Directors of the Company has formulated a Dividend Distribution Policy. The dividend, if any, to be declared in the future will be paid as per this policy depending on a number of parameters, including but not limited to the Company's profits, capital requirements, overall financial condition, contractual restrictions and other factors considered relevant by the Board. The Dividend Distribution Policy adopted by the Company is available on the Company's website which can be accessed using the link https://www.quesscorp.com/investor/ dist/images/pdf/Policies/Dividend_Distribution_Policy.pdf
6. Share Capital:
During the year under review, there has been no change in the Authorised Share Capital of the Company. However, the paid-up share capital of the Company as on 31 March 2021 was H 1,476.79 million as compared to H 1,475.11 million in the previous year.
The paid-up share capital of the Company increased due to the following events/ transactions -
(a) Quess Corp Employees' 2009 Amended Stock Option Scheme ("ESOP 2009")–
The Nomination and Remuneration Committee ("NRC") vide circular resolution dated 11 May 2020 and 24 July 2020 allotted 58,960 and 38,525 equity shares respectively of H 10 each to the eligible employees of the Company who exercised their options under ESOP 2009.
(b) Quess Employee Stock Option Scheme 2015 ("ESOP 2015")–
The NRC at its meeting held on 27 May 2020, 24 July 2020 and 27 January 2021 allotted 13,667, 16,099 and 40,919 equity shares respectively of H 10 each to the eligible employees & ex-employees of the Company who exercised their options under ESOP 2015.
The Company has not issued any debentures, bonds, sweat equity shares, any shares with differential rights or any non-convertible securities during the year under review.
7. Subsidiaries and Associate Companies:
Pursuant to the provisions of Section 129(3) of the Act, a separate statement containing the salient features of the financial statements of all subsidiaries and associate companies/ joint ventures of the Company (in Form AOC - 1) is attached to the financial statements of the Company.
In terms of Section 134 of the Act and Rule 8(1) of the Companies (Accounts) Rules, 2014, the financial position and performance of the subsidiaries are given as an annexure to the Consolidated Financial Statements.
Further, pursuant to the provisions of Section 136 of the Act, the standalone and consolidated financial statements of the Company along with relevant documents and separately audited financial statements of the subsidiaries, are available on the Company's official website https://www.quesscorp.com/ investor-other-information/.
The Company has approved a policy for determining material subsidiaries and the same is uploaded on the Company's website which can be accessed using the link - https://www. quesscorp.com/investor/dist/images/pdf/Governance/Policy-for-Material-Subsidiary.pdf. In terms of this policy, Conneqt Business Solutions Limited continues to be a material subsidiary of the Company within the meaning of Regulation 16(c) of the Listing Regulations, for which Secretarial Audit has been conducted pursuant to Regulation 24A of the Listing Regulations. There has been no material change in the nature of the business of the subsidiaries.
As on 31 March 2021, there are total 32 Subsidiary Companies comprising 13 Indian Companies and 19 Foreign Companies. Out of 13 Indian Companies, 8 Companies are wholly–owned subsidiaries, 4 Companies are subsidiaries and 1 Company is a step-down subsidiary. Out of 19 Foreign Companies, 5 Companies are wholly–owned subsidiaries and 14 Companies are step-down subsidiaries. Further, there are 2 Indian and 3 Foreign Associate Companies.
8. Acquisitions/ Investments/ Disinvestment during the year:
• The Board of Directors at its meeting held on 27 May 2020 approved an additional investment of 25% in the equity shares of Terrier Security Services (India) Private Limited
(" Terrier") from Heptagon Technologies Private Limited
(" Heptagon") for an amount of H64,50,00,000 (Rupees
Sixty Four Crore Fifty Lakhs Only) by way of set-off against the amount of loan due from Heptagon. With this, Quess's stake in Terrier increased from 49% to 74% thereby making Terrier, a subsidiary of the Company w.e.f 1 June 2020.
• The Board of Directors on 17 July 2020 approved the termination of the Share Subscription and Shareholder's Agreement dated 5 July 2018 executed between Quess East Bengal FC Private Limited ("QEBFC"), East Bengal Club ("Club") and Quess Corp Limited ("Investor") and also approved the execution of Termination Agreement by way of transfer of the remaining 30% stake from Club and its nominee at an aggregate cash consideration of H 1,000 (Rupees One Thousand Only) as per terms of the Termination Agreement. The shareholding of Quess in QEBFC increased from the existing 70% to 100%, thereby making QEBFC a wholly-owned subsidiary of the Company.
• The Board of Directors, at its meeting held on 28 July 2020 approved the Voluntary Liquidation of Quess East Bengal FC Private Limited, a wholly-owned subsidiary of the Company, under Regulation 59 of the Insolvency and Bankruptcy Code, 2016 and Insolvency and Bankruptcy Board of India (Voluntary Liquidation Process) Regulation, 2017.
• The Board of Directors at its meeting held on 17 August 2020 approved the disinvestment of the Company's 100% equity stake in Dependo Logistics Solutions Private Limited, a wholly-owned subsidiary of the Company at a consideration of H 10,00,00,000/- (Rupees Ten Crore Only) to Altruist Technologies Pvt. Ltd.
• During the year, the Company has invested US$ 4.75 million into Quess Corp (USA) Inc., a wholly-owned subsidiary, by way of infusion of fresh funds against equity.
• Pursuant to Clause 10.4.2 of the Shareholders Agreement dated 20 November 2017 entered between Tata Sons Private Limited, Conneqt Business Solutions Limited and Quess Corp Limited, the Company had received Put Option Exercise Notice dated 24 December 2020 to complete the purchase of 4,48,39,166 Put Shares from Tata Sons Private Limited. The Board in its meeting held on 27 January 2021 delegated powers to Administration and Investment Committee to take all necessary steps to complete the purchase of the aforesaid shares. On 16 April 2021, the acquisition of 30% equity stake in Conneqt was completed.
• The Board of Directors at its meeting held on
27 January 2021 approved the additional investment of 3.76% equity shares in Vedang Cellular Services Private Limited ("Vedang") in accordance with the Shareholder's Agreement dated 25 October 2017 against the put option exercised by Mr. Ashish Kapoor, Promoter & CEO of Vedang for 6,853 equity shares at an aggregate consideration of H 70,00,000 (Rupees Seventy Lakhs Only), thereby increasing the Company's stake in Vedang from 88.71% to 92.47%.
• The Board of Directors at their meeting held on 27 January 2021 accorded its in-principal approval for the subscription of 49% equity shares over multiple tranches in Stellarslog Technovation Pvt. Ltd. ("TaskMo"), a gig economy start-up for H 10,00,00,000 (Rupees Ten Crore Only) to be invested in multiple tranches. The Company has invested H 2,00,00,000 (Rupees Two Crore Only) thereby acquiring 38,431 equity shares, i.e. 16.12%, in TaskMo.
• The Company had filed an application before the Regional Director, South-East region, Hyderabad for approval of the Scheme of Amalgamation ("Scheme") with four of its wholly owned subsidiaries viz. Golden Star Facilities and Services Private Limited, MFX Infotech Private Limited, Trimax Smart Infraprojects Private Limited, and Green Piece Landscape India Private Limited under Section 233 of the Companies Act, 2013 and rules made thereunder. On 19 March 2021, the Regional Director had rejected the Scheme vide Order no. 3/Kar/CP.No.25/RD(SER)/ CAA-11/233/2020 on a technical ground of not securing approval of the shareholders at a General Meeting holding at least 90% of total number of shares. The Company considered a new Scheme of Amalgamation with its wholly-owned subsidiaries through the Tribunal route on 3 June 2021.
9. Particulars of Loans, Guarantees or Investments:
Details of the loans, corporate guarantees and investments covered under Section 186 of the Act forms part of the notes to the Financial Statements provided in this Annual Report.
10. Management Discussion & Analysis:
Pursuant to Regulation 34 of the Listing Regulations, the Management Discussion and Analysis Report for the year under review, is presented in a separate section, forming a part of the Annual Report.
11. Directors and Key Managerial Personnel (KMPs):
(a) Director retiring by rotation –
In accordance with the provisions of Section 152 of the Act read with rules made thereunder and the Articles of Association of the Company, Mr. Gopalakrishnan Soundarajan (DIN: 05242795), is liable to retire by rotation at the ensuing AGM and being eligible, has offered himself for re-appointment. A resolution seeking shareholders' approval for his re-appointment forms part of the Notice.
(b) Appointment of Directors and KMPs –
The Board, approved the appointment of Mr. Gopalakrishnan Soundarajan (DIN: 05242795), as an Additional Director of the Company with effect from 1 April 2020, on the recommendation of the NRC with the approval of shareholders accorded in the 13th AGM held on 29 September 2020.
The Board, on the recommendation of NRC, at its meeting held on 31 August 2020, proposed the re-appointment of Ms. Revathy Ashok (DIN: 00057539) and Mr. Sanjay Anandaram (DIN: 00579785) as Non-executive Independent Directors with the approval of shareholders accorded in the 13th AGM held on 29 September 2020 for a second term/tenure of 5 (five) consecutive years in accordance with the provisions of Section 149(10) of the Companies Act and the Listing Regulations.
The Board, on the recommendation of NRC, at its meeting held on 31 August 2020 approved the appointment of Mr. K. R. Girish (DIN: 07178890) and Mr. Gaurav Mathur (DIN: 00016492) as Additional Directors in the capacity of Non-Executive Independent Director with the approval of shareholders accorded in the 13th AGM held on 29 September 2020 for a term of 5(five) years.
The Board, on the recommendation of NRC, approved the re-designation of Mr. Ajit Isaac (DIN: 00087168), who currently holds the position of "Chairman & Managing Director" as "Executive Chairman" with effect from 1 April 2021, subject to the approval of the shareholders at the ensuing AGM. At the same meeting, it approved the elevation of Mr. K. Suraj Moraje (DIN: 08594844), who currently holds the position of "Executive Director and Group CEO" to "Managing Director and Group CEO" with effect from 1 April 2021 till the end of his current term, subject to the approval of the shareholders at the ensuing AGM. A resolution seeking shareholders' approval for their change in designation along with increase in remuneration forms part of the Notice.
(c) Retirement of Directors –
The Board, on the recommendation of NRC, at its meeting held on 31 August 2020 noted the retirement/expiry of the terms of Mr. Pravir Kumar Vohra (DIN: 00082545) and Mr. Pratip Chaudhuri (DIN: 00915201), Non-Executive Independent Directors of the Company from the conclusion of 13th AGM held on 29 September 2020.
(d) Appointment and Resignation of KMP -
The Board, on the recommendation of NRC and Audit Committee, noted the resignation of Mr. Subramanian Ramakrishnan from the post of Group Chief Financial Officer of the Company w.e.f. the closing of the business hours on 31 March 2021. Mr. Ramakrishnan will continue with the Company as an Advisor for the next 12 months. The Board approved the appointment of Mr. N. Ravi Vishwanath as Group Chief Financial Officer of the Company with effect from 1 April 2021.
(e) Declaration of Independence –
The Company has received declarations from the Independent Directors that they meet the criteria of independence as prescribed under Section 149(6) of the Act along with rules framed thereunder and Regulation 16(1)(b) and 25 of the Listing Regulations. There has been no change in the circumstances affecting their status as Independent Directors of the Company.
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, if any, and reimbursement of expenses incurred by them for the purpose of attending meetings of the Board/ Committees of the Company.
None of the Directors of the Company is disqualified for being appointed as Directors as specified in Section 164(2) of the Act and Rule 14(1) of the Companies (Appointment and Qualification of Directors) Rules, 2014.
12. Directors' Responsibility Statement:
Pursuant to Section 134(3)(c) of the Act, the Board of Directors, to the best of their knowledge and information and explanations received from the Company, confirm that:
a) in the preparation of the accounts for the year ended 31 March 2021, the applicable accounting standards have been followed and there are no material departures from the same; b) they have selected such accounting policies and applied them consistently, and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31 March 2021 and of the loss of the Company for the year under review;
c) they have taken proper and sufficient care 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) they have prepared annual accounts of the Company on a ‘going concern' basis;
e) they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and
f) they have devised proper systems to ensure compliance with the provision of all applicable laws and that such systems were adequate and operating effectively.
13. Annual Board Evaluation and Familiarization Programme for Board members:
The Board of Directors and the NRC have carried out an annual evaluation of its own performance, the performance of its Committees and Individual Directors of the Company, including the Chairman of the Board, pursuant to the provisions of the Act and the Listing Regulations on 1 June 2021. The performance as a whole was evaluated by the Board after seeking input from all the Directors based on the criteria such as the Board composition and structure, meetings and procedures, effectiveness of Board processes, information and functioning, etc. The performance of the Committees was evaluated by the Board after seeking inputs from the Committee members based on the criteria such as the composition of Committees, effectiveness of Committee meetings, etc.
The above criteria are based on the Guidance Note on Board Evaluation issued by the Securities and Exchange Board of India on 5 January 2017.
The Nomination and Remuneration Committee reviewed the performance of Individual Directors on the basis of criteria such as the contribution of the individual director to the Board and Committee meetings, in terms of preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meetings, etc. At the Board Meeting that followed the meeting of the Independent Directors and meeting of Nomination and Remuneration Committee, the performance of the Board, its Committees and individual Directors, was also discussed. Performance evaluation of Independent Directors was done by the entire Board, excluding the Independent Director being evaluated.
In a separate meeting of Independent Directors, the performance of Non-Independent Directors, the Board as a whole and the Chairman of the Company were evaluated, taking into account the views of Executive Directors and Non-Executive Directors.
The familiarization programme aims to provide insight to the Independent Directors to understand the business of the Company, its stakeholders, leadership team, senior management, operations, policies and industry perspective and issues. The Independent Directors are made aware of their roles, rights and responsibilities at the time of their appointment/re-appointment through a formal letter of appointment. A familiarization programme for all the Independent Directors was held on 2 November 2020.
A note on the Familiarisation programme adopted by the Company for orientation and training of the Directors and the Board evaluation process undertaken in compliance with the provisions of the Companies Act, 2013 and the Listing Regulations is referred herewith is made available on the Company's official website at – https://www.quesscorp.com/investor/dist/images/ pdf/Policies/Directors_Familiarization_Programme.pdf
14. Business Responsibility Report & Sustainability Report:
As stipulated under Regulation 34 of the Listing Regulations, the Business Responsibility Report & Sustainability Report, describing the initiatives taken by the Company from environmental, social and governance perspective forms a part of the Annual Report as ‘Annexure – A'.
15. Audit & Auditors:
(a) Statutory Auditors -
Pursuant to the provisions of Section 139 of the Act and the rules framed thereunder M/s. Deloitte Haskins & Sells LLP, Chartered Accountants (Firm Registration No.117366 W/W - 100018) were appointed as Statutory Auditors of the Company at the 11th AGM held on 26 July 2018 to hold office from the conclusion of the 11th AGM till the conclusion of the 16th AGM. However, as per the Companies (Amendment) Act, 2017 effective from 7 May 2018, the provisions relating to the ratification of the appointment of Statutory Auditors at every AGM are not required.
The Board has duly examined the Statutory Auditors' Report to the financial statements, which is self-explanatory. Clarifications, wherever necessary, have been included in the notes to the financial statements section of the Annual Report. The Auditors report for FY21 does not contain any qualification, reservation or adverse remark for the year under review. The Auditors Report is enclosed with the financial statements in this Annual Report. During the year under review, the Auditors have not reported to the Audit Committee any instances of fraud committed against the Company by its officers or employees under Section 143(12) of the Act and therefore no details are required to be disclosed under Section 134(3) (ca) of the Act.
Further, pursuant to Listing Regulations, Audit Committee had a separate meeting with the Statutory Auditors on 6 January 2021.
The Auditor's certificate on the implementation of share based schemes in accordance with SEBI (Share Based Employee Benefits) Regulations, 2014, will be made available at the AGM, electronically.
(b) Secretarial Auditors -
Pursuant to Section 204 of the Act read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014, the Board, at its meeting held on 27 January 2021 had approved the appointment of Mr. S.N. Mishra, proprietor of M/s. SNM & Associates, Practicing Company Secretary (C.P. No. 4684) as the Secretarial Auditor to undertake the Secretarial Audit of the Company for the FY21. The Company had also received written consent from Mr. S. N. Mishra to act as such.
The Secretarial Audit Report for FY21 is annexed as ‘Annexure – B' and forms an integral part of this report.
The Secretarial Audit Report does not contain any qualification, reservation, disclaimer or adverse remark for the year under review. During the year under review, the Auditors have not reported to the Audit Committee any instances of fraud committed against the Company by its officers or employees under Section 143(12) of the Act and therefore no details are required to be disclosed under Section 134(3)(ca) of the Act.
Further, as per the amended Regulation 24A vide Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) (Second Amendment) Regulations, 2021, the Secretarial Audit Report of Conneqt, being a material subsidiary is annexed as ‘Annexure – C'
Pursuant to Regulation 24A of the Listing Regulations, a Secretarial Compliance Report for the financial year ended 31 March 2021 is annexed as ‘Annexure – D'
(c) Internal Auditors –
The Board, on the recommendation of the Audit Committee, in its meeting held on 27 May 2020 had approved the appointment of M/s. Ernst & Young as the Internal Auditors of the Company for FY21 to conduct the audit on basis of a detailed internal audit plan which is reviewed each year in consultation with the Internal Audit Team and the Audit Committee. On a quarterly basis also, Internal Auditors give presentations and provide a report to the Audit Committee of the Company.
The Board, on the recommendation of the Audit Committee, has re-appointed M/s. Ernst & Young as the Internal Auditors for the FY21.
(d) Cost Audit -
Maintenance of cost records as specified by the Central Government under sub-section (1) of section 148 of the Act, is not required by the Company and accordingly such accounts and records are not made and maintained.
16. Risk Management:
The Board of the Company has adopted the Risk Management Policy in order to assess, monitor and manage risk throughout the Company. The Audit Committee has additional oversight in the area of financial risks and controls. The major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continuing basis. The development and implementation of the Risk Management Policy have been covered in the Management Discussion and Analysis, which forms part of this report. Risk is an integral part of the Company's business and sound risk management is critical to the success of the organization. The Risk Management policy, as approved by the Board, is displayed on the official website of the Company and can be accessed using the link – https://www.quesscorp.com/investor/dist/images/ pdf/Policies/Risk-Management-Policy.pdf
17. Internal Financial Control Systems and Their Adequacy:
Internal Financial Controls are an integrated part of the risk management process which in turn is a part of Corporate Governance addressing financial and financial reporting risks. The Board has adopted policies and procedures for ensuring the orderly and efficient conduct of its business, including adherence to the Company's policies, safeguarding of its assets, prevention and detection of fraud, error reporting mechanisms, accuracy and completeness of the accounting records and timely preparation of reliable financial disclosures. The Company has established a strong framework for internal financial controls. During the year, such controls were assessed and no reportable material weaknesses in the design or operation were observed. Accordingly, the Board is of the opinion that the Company's internal financial controls were adequate and effective during FY21 and their adequacy are included in the Management Discussion and Analysis, which forms part of this Report.
18. Related Party Transactions:
All Related Party Transactions entered during the FY21 were on an arm's length basis and in the ordinary course of business. There were no material significant Related Party Transactions entered by the Company during the year that required shareholders' approval under Regulation 23 of the Listing Regulations. Prior omnibus approval from the Audit Committee is obtained for transactions which are repetitive in nature. The Audit Committee reviews all transactions entered into pursuant to the omnibus approvals so granted on a quarterly basis. Pursuant to Regulation 23(9) of the Listing Regulations, the Company has filed the reports on related party transactions with the Stock Exchanges(s).
None of the transactions with related parties fall under the scope of Section 188(1) of the Act. The information on transactions with related parties pursuant to Section 134(3)(h) of the Act read with Rule 8(2) of the Companies (Accounts) Rules, 2014 are given in ‘Annexure – E' in Form AOC-2 and the same forms part of this report.
The Company has adopted a policy for dealing with Related Party Transactions and is made available on the Company's website at – https://www.quesscorp.com/investor/dist/images/ pdf/Governance/Policy-on-Criterial-for-determining-RPT.pdf
19. Nomination and Remuneration Committee and Company's Policy on Nomination, Remuneration, Board Diversity, Evaluation and Succession:
(a) Policy on Directors Appointment and Remuneration –
In compliance with the provisions of Section 178(3) of the Act and Regulation 19 of the Listing Regulations, the Board, on the recommendation of the NRC has approved the criteria for determining qualifications, positive attributes, and independence of Directors in terms of other applicable provisions of the Act and the rules made thereunder, both in respect of Independent Directors and other Directors as applicable. The Board has adopted a policy which provides for the appointment of Directors, viz. educational and professional background, general understanding of the Company's business dynamics, global business and social perspective, personal achievements and Board diversity, removal and remuneration of Directors, Key Managerial Personnel ("KMP") and Senior Management Personnel and also on succession planning and evaluation of Directors. The policy on remuneration can be accessed at web link - https://www.quesscorp.com/investor/dist/ images/pdf/Policies/Nomination-and-Remuneration-Policy.pdf
(b) Board Diversity –
The Company believes that building a diverse and inclusive culture is integral to its success. A diverse Board will leverage differences in thought, perspective, knowledge and industry experience to help us retain our competitive strength. The Company has evaluated the policy with a purpose to ensure adequate diversity in its Board of Directors, which enables them to function efficiently and foster differentiated thought processes at the back of varied industrial and management expertise. The Board recognizes the importance of diverse composition and has therefore adopted a Board Diversity Policy. The policy is made available on the Company's website which can be accessed at web link - https://www.quesscorp.com/ investor/dist/images/pdf/Governance/Policy-on-Board-Diversity.pdf
20. Employee Stock Option Plan ("ESOP")/ Restricted Stock Units ("RSUs"):
The Company grants share-based benefits to eligible employees with a view to attracting and retaining the best talent, encouraging employees to align individual performances with Company objectives, and promoting increased participation by them in the growth of the Company. The Company has instituted employee stock option schemes, namely-
(1) Quess Corp Limited Employees' Amended Stock Option Scheme, 2009 (ESOP 2009);
(2) Quess Corp Limited - Employees' Stock Option Scheme, 2015 (ESOP 2015); and
(3) Quess Stock Ownership Plan-2020 (QSOP 2020).
(1) Quess Corp Limited Employee Stock Option Scheme 2009 (ESOP 2009) –
During the year under review, total 97,485 options were exercised by eligible employees and ex-employees.
(2) Quess Corp Limited - Employees' Stock Option Scheme, 2015 (ESOP 2015) -
The Company had implemented the Employees' Stock Option Scheme 2015 ("ESOP 2015") for 19,00,000 options equivalent to the same number of shares with the approval of the shareholders and out of 19,00,000 options, 1,48,440 options were already granted and will be vested under the Scheme. Thereafter, the Board, on the recommendation of NRC, at its meeting held on 18 February 2020 proposed to further amend ESOP 2015 with the approval of Shareholders by way of postal ballot dated 31 March 2020 by way of re-deployment of the balance 17,51,560 options and equity shares under the ESOP 2015 to QSOP 2020. Total number of options left under ESOP 2015 to be exercised was 1,48,440 options.
During the year under review, total 70,685 options were exercised by the eligible employees and ex-employees. As on 31 March 2021, a balance of 68,199 options were outstanding which constitute 0.05% of the issued equity share capital of the Company.
(3) Quess Stock Ownership Plan-2020 (QSOP 2020) -
Grant of Options under QSOP 2020:
• On 11 May 2020, NRC approved the grant of 26,29,795 RSUs at a face value of H 10 per RSU to the eligible employees, which shall vest not earlier than 1 (One) year and not later than 6 (Six) years from the date of grant of RSUs, based on performance parameters and terms and conditions of QSOP 2020. Further, on
24 July 2020 and 27 January 2021, it approved the grant of 74,141 and 154,290 RSUs respectively.
• Each RSU is convertible into 1 equity share of H 10 each upon vesting, subject to compliance of SEBI (Share Based Employee Benefits) Regulations, 2014 as amended from time to time, terms and conditions of QSOP 2020 and grant letter.
• The aforesaid RSUs can be exercised within 3 years from the date of vesting in terms of QSOP 2020.
A detailed disclosure with respect to stock options, as required under Regulation 14 of the SEBI (Share Based Employee Benefits) Regulations, 2014 and SEBI Circular dated 16 June 2015, has been uploaded on the official website of the Company at - https://www.quesscorp.com/ investor-other-information/
The Company's Statutory Auditors, M/s. Deloitte and Haskins LLP, have certified that the aforementioned employee stock option plans of the Company have been implemented in accordance with the regulations and the resolutions passed by the members in this regard.
21. Particulars of Employees:
The Company is required to give disclosures under Section 197(12) of the Act read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, which is annexed as ‘Annexure – F' and forms an integral part of this Report.
The statement containing the top 10 employees on roll and particulars of employees employed throughout the year whose remuneration is more than H 10.20 million or more per annum and employees employed part-time and in receipt of remuneration of H 0.85 million or more per month as required under Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014, forms an integral part of this Report. However, the same is not being sent along with this Annual Report to the members of the Company in line with the provision of Section 136 of the Act. Members who are interested in obtaining these particulars may write to the Company Secretary at the Registered Office of the Company. The aforesaid annexure is also available for inspection by the Members at the Registered Office of the Company, 21 days before and up to the date of the ensuing AGM during the business hours on working days.
22. Corporate Governance:
A detailed report on Corporate Governance, pursuant to the requirements of Regulation 34 of the Listing Regulations, forms part of the Annual Report. A certificate from Mr. S. N. Mishra, Practicing Company Secretary, Bengaluru, confirming compliance to conditions of Corporate Governance, as stipulated under the Listing Regulations, is annexed to the Corporate Governance Report. A statement containing additional information as required under Clause IV of Section II of Part II of Schedule V of the Companies Act, 2013 is provided in the Report on Corporate Governance, which forms part of this Annual Report.
23. Vigil Mechanism/ Whistle Blower Policy:
In compliance with Section 177(9) of the Act and Regulation 22 of the Listing Regulations, the Company has a Whistle Blower Policy and has established the necessary vigil mechanism for Directors and employees in confirmation with the above laws, to report concerns about unethical behaviour. The details of the Policy have been disclosed in the Corporate Governance Report, which is a part of this report and is also available on the website of the Company – https://www.quesscorp.com/investor/dist/images/ pdf/Governance/Whistle-BlowerPolicy.pdf
24. Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo under Section 134(3)(m) of the Act:
The provisions of Section 134(3)(m) of the Act read with Rule 8(3) of the Companies (Accounts) Rules, 2014 relating to conservation of energy and technology absorption do not apply to the Company. The Company is a pioneer in workforce management, technologies and has used information technology extensively in its operations.
The details of Foreign exchange earnings and outgo are given below:
25. Corporate Social Responsibility ("CSR"):
The Company believes in building and maintaining a sustainable societal value, inspired by a noteworthy vision to actively participate, contribute and impact not just individual lives but create a difference on a social level as well. The CSR initiatives are primarily carried out through the Careworks Foundation (CWF), a non-profit initiative established in January 2014. The consolidated contribution of the Company towards various CSR activities during the financial year 2020-21 is H 42.2 million.
CSR spending is guided by the vision of creating long-term benefit to Society.
In compliance with Section 135 of the Act read with the Companies (Corporate Social Responsibility Policy) Rules 2014, the Company has established the CSR Committee.
The Board has adopted the CSR Policy, as formulated and recommended by the CSR Committee, and is available on the Company's website at – https://www.quesscorp.com/investor/ dist/images/pdf/Policies/CSR-Policy.pdf
The disclosure of contents of CSR policy pursuant to provisions of Section 134(3)(o) of Act and Rule 9 of the Companies (Corporate Social Responsibility) Rules, 2014 is annexed herewith as ‘Annexure – G' to the Board's Report.
26. Secretarial Standards:
Pursuant to the provisions of Section 118 of the Act, the Company has complied with the applicable provisions of the Secretarial Standards issued by the Institute of Company Secretaries of India ("ICSI") and notified by the Ministry of Corporate Affairs ("MCA").
27. Deposits:
During the year under review, the Company has neither invited nor accepted deposits from the public/members under Section 73 of the Act, read with the Companies (Acceptance of Deposits) Rules, 2014.
28. Details of significant and material orders passed by the Regulators or Courts or Tribunals impacting the going concern status and Company operations in future:
There were no significant and material orders passed by the Regulators, Courts or Tribunals that would impact the going concern status of the Company's operation in the future.
29. Debentures:
During the year, the Company had exercised the call option for redeeming in full the outstanding 750 Secured Redeemable Non-Convertible Debentures having face value of H 10,00,000
(Rupees Ten Lakhs) each aggregating to H 75,00,00,000 (Indian
Rupees Seventy Five Crore Only) held by ICICI Prudential Equity
& Debt Fund, ICICI Prudential Balanced Advantage Fund, ICICI Prudential Multi-Asset Fund, Debenture Holders on 22 January 2021 in pursuance of the applicable provisions of the Listing Regulations in respect of the said listed Debentures.
As on 31 March 2021, the Company does not have any debentures.
30. Credit Rating:
In order to comply with Basel-II guidelines, the Company has received credit ratings from ICRA Limited with respect to the Company's long-term and short-term fund-based limits. As on 23 March 2021, ICRA has re-affirmed the credit ratings. Hence, there is no change in the credit rating during the year under review. The credit rating is [ICRA] A1+.
31. Number of Meetings of the Board:
The Board met seven (7) times during the year under review. The details of the meeting are provided in the Corporate Governance report that forms part of this Annual Report.
32. Extract of Annual Return:
In terms of Section 92(3) read with Section 134(3)(a) of the Act and Rule 12 of the Companies (Management and Administration) Rules, 2014, an extract of the annual return in the prescribed format is available at https://www.quesscorp.com/investor-other-information/.
33. Information Required Under Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013:
The Company is committed to provide a safe and conducive work environment to its employees and has zero tolerance towards any actions which may fall under the ambit of sexual harassment at the workplace. The Company 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. The Policy aims to promote a healthy work environment and to provide protection to employees at the workplace and redress complaints of sexual harassment and related matters thereto. An Internal Complaints Committee, known as the Prevention of Sexual Harassment (POSH) Committee, has been constituted to enquire into complaints, and to recommend appropriate action, wherever required in compliance with the provisions of the Act. Details of complaints pertaining to sexual harassment that was filed, disposed of and pending during the financial year are provided in the Report on Corporate Governance, which forms part of this Report.
34. Code of Conduct:
The Company has laid down a Code of Conduct for the Directors as well as for all senior management of the Company. As prescribed under Regulation 17 of the Listing Regulations, a declaration signed by the Executive Director and Group CEO affirming compliance with the Code of Conduct by the Directors and senior management personnel of the Company for the FY21 forms part of the Corporate Governance Report.
35. Material changes and commitments affecting financial position between the end of the financial year and date of the report:
There have been no material changes and commitments, which affect the financial position of the Company, that have occurred between the end of the financial year to which the financial statements relate and the date of this report.
36. Cybersecurity:
The Company is committed to providing a secure IT environment across the various systems and infrastructure, by establishing best practices and standards for Cyber Security. Real time security information and event management systems are in place, to continuously monitor and secure the network against identified and unidentified threats. A secure access management system along with VAPT (Vulnerability Assessment and Penetration Testing) for applications facilitates remote working of employees. The Company's Cyber Security Council meets fortnightly, to review and improve the effectiveness of the cyber security systems. Further, periodic interactions of the Cyber Security Council with relevant stakeholders, has ensured sponsorship from senior management and all other critical stakeholders.
37. Acknowledgements:
Your Directors place on record their gratitude to the Central Government, various State Governments and Company's Bankers and advisors for the valuable advice, guidance, assistance, co-operation, and encouragement they have extended to the Company from time to time. The Directors also take this opportunity to thank the Company's customers, suppliers, partners, investors and all other Stakeholders, Regulators and Stock Exchange(s) for their consistent support to the Company.
Last but not the least, the Directors also sincerely acknowledge the significant contributions made by all the employees especially during the COVID times for their continued & dedicated services to the Company.
38. Cautionary Statement:
The Board's Report and Management Discussion & Analysis may contain certain statements describing the Company's objectives, expectations or forecasts that appear to be forward looking within the meaning of applicable securities laws and regulations while actual outcomes may differ materially from what is expressed herein.
The Company is not obliged to update any such forward-looking statements. Some important factors that could influence the Company's operations include global and domestic economic developments, competitor's behaviour, changes in Government Regulations, tax laws and litigation.