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    Oracle Financial Services Software Limited Annual Report 2015-16


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    From the Chairman’s desk I am pleased to report the results for the financial year ended March 31, 2016. On a consolidated basis, your Company's revenue stood at ` 40,928 million this year, an increase of 5% over the previous financial year. The operating income was ` 16,058 million this year, an increase of 8% over the last financial year. Your Company achieved notable successes by continuing to win marquee clients during the year. As the millennials are increasingly moving into a position of economic power and decision making, financial institutions need to adapt themselves to address demands of this new generation. Digital is an important strategy that financial institutions need to pursue to cater to the new requirements. Your Company launched the Oracle Banking Digital Experience solutions this year which is a compelling offering that empowers progressive transformation, and helps financial institutions to stay ahead of the Digital disruption that is taking place. The early strategic wins for the product reflect our success during the year. Compliance is gaining increasing focus the world over. Regulators globally are far better connected with their counterparts in other countries. Seamless exchange of information across the borders is a reality. The world is more interlinked and regulatory frameworks are getting standardized across continents. Your Company offers the most comprehensive range of analytical applications spanning Risk, Compliance, Regulatory Reporting, Marketing, Treasury and Finance. Your Company has an enviable roster of the Systemically Important Financial Institutions (SIFIs) who use the Oracle Financial Services Analytical Applications to address the compliance and regulatory requirements. Leading banks around the world continue to sign up for Oracle’s financial crime and compliance solutions. Your Company provides solutions that eliminate complexity and enable business innovation. Your Company continues to invest significantly in research and development to build products that help financial institutions transform their core systems, accelerate delivery of innovative products, enhance customer experience, and improve margins to drive competitive advantage. Your Company’s flagship offering, Oracle FLEXCUBE, continues to be the preferred choice of banks to consolidate and grow their domestic and international operations. The product is proven across over 120 countries and continues to be selected for many diverse situations. A recent win at T-Mobile in the USA was one such example of enabling the capability to finance mobile devices either on a loan or lease to customers. The move to Cloud is one of the most significant disruptive forces sweeping the industry today. While financial institutions are slow to adopt Cloud as a platform for their mission critical applications, it is already a part of the discussions in the board rooms. Organizations need to rethink their internal structure and decision making processes to gain most value from the Cloud. Your Company has a strong portfolio in their area and continues to invest in the Cloud to create most compelling offerings to financial institutions. Your Company's products continue to receive high rankings from independent industry analysts. The leading analyst firm, CEB Tower Group, ranked Oracle best-in-class in all four categories of their CX/CRM solutions for banking in a report published in December 2015. Your Company’s offering was awarded the Best Regulatory Reporting Platform 2015 by Operational Risk & Regulation. Oracle moved up to #4 on the Chartis Risk Tech 100 for 2015. The world is fast changing and these are exciting times for the financial services industry. Your Company is well equipped to meet these opportunities and lead the competition. On behalf of the Board of Directors and Management of Oracle Financial Services Software, I would like to thank you for your support and look forward to your good wishes to help the Company to achieve its mission of being the most preferred technology partner of banks across the world. Regards, S Venkatachalam Chairman Oracle Financial Services Software Limited


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    This page has been intentionally left blank. Oracle Financial Services Software – Annual Report 2015-16


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    Contents Financials at a glance 4 Corporate information 6 Directors’ report 9 Corporate governance report 35 Management’s discussion and analysis 51 Consolidated financials 63 Unconsolidated financials 103 Notice of annual general meeting 143 Attendance slip 155 Proxy form 157 Annual General Meeting Day and Date : Wednesday, September 7, 2016 Time : 2.30 p.m. Venue : The Westin Mumbai Garden City International Business Park Oberoi Garden City, Goregaon (East) Mumbai 400063 3


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    Financials at a glance Key performance indicators 2015-16 As per Indian GAAP Consolidated results Fiscal year 2015-16 break up in terms of operating revenue by region, operating revenue by portfolio and expense by category BPO Services 3% Services Asia Pacific North America 13% 30% 36% Products 84% Europe, Middle East, Africa 34% Operating revenue by region Operating revenue by portfolio Depreciation and amortization Other expenses 2% 3% Facility costs 4% Professional fees 6% Travel cost 7% Staff cost 78% Expense by category Ten years in the industry (Amounts in ` million except EPS & Book Value) 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 Operating Revenue 20,609.38 23,802.36 29,276.20 28,739.74 29,969.32 31,466.76 34,739.99 37,413.21 39,049.05 40,928.02 Interest and Other Income (expense) 367.28 631.16 1,763.89 (858.03) 1,668.26 4,217.49 4,595.44 6,736.48 3,481.34 2,559.65 Total Revenue 20,976.66 24,433.52 31,040.09 27,881.71 31,637.58 35,684.25 39,335.43 44,149.69 42,530.39 43,487.67 Total Expenses 16,837.91 19,835.95 22,839.30 18,947.38 19,157.57 21,515.23 23,203.42 24,136.08 24,222.02 24,869.63 EBT 4,138.75 4,597.57 8,200.79 8,934.33 12,480.01 14,169.02 16,132.01 20,013.61 18,308.37 18,618.04 Tax 415.95 441.68 835.36 1,197.69 1,370.12 5,076.29 5,380.58 6,420.42 6,385.17 6,960.28 EAT 3,722.80 4,155.89 7,365.43 7,736.64 11,109.89 9,092.73 10,751.43 13,593.19 11,923.20 11,657.76 EPS 43.87 48.98 86.80 91.17 130.93 107.15 126.70 160.19 140.51 137.38 Book Value 278.34 327.26 413.04 505.51 637.04 744.48 872.82 1,034.29 405.87 433.10 Note: All EPS and Book Values are computed based on the equity capital base of 84,856,178 shares as on March 31, 2016. Oracle Financial Services Software – Annual Report 2015-16


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    Key metrics 2006-2016 Operating revenue Operating income 45,000.00 18,000.00 40,928.02 16,058.39 39,049.05 16,000.00 40,000.00 14,827.03 37,413.21 34,739.99 14,000.00 35,000.00 13,277.13 31,466.76 29,276.20 29,969.32 12,000.00 11,536.57 30,000.00 28,739.74 10,811.75 10,644.85 in ` million in ` million 25,000.00 23,802.36 10,000.00 9,792.36 20,609.38 20,000.00 8,000.00 7,196.85 15,000.00 6,000.00 3,966.41 10,000.00 4,000.00 3,771.47 5,000.00 2,000.00 0.00 0.00 06-07 07-08 08-09 09-10 10-11 11-12 12-13 13-14 14-15 15-16 06-07 07-08 08-09 09-10 10-11 11-12 12-13 13-14 14-15 15-16 Net income Earnings per share 16,000.00 180.00 160.19 14,000.00 13,593.19 160.00 140.51 11,923.20 140.00 130.93 126.70 137.38 12,000.00 11,109.89 11,657.76 10,751.43 120.00 107.15 10,000.00 in ` million 9,092.73 100.00 86.80 91.17 7,736.64 in ` 8,000.00 7,365.43 80.00 6,000.00 60.00 48.98 4,155.89 43.87 4,000.00 3,722.80 40.00 2,000.00 20.00 0.00 0.00 06-07 07-08 08-09 09-10 10-11 11-12 12-13 13-14 14-15 15-16 06-07 07-08 08-09 09-10 10-11 11-12 12-13 13-14 14-15 15-16 Earnings per share is computed on the equity capital base of 84,856,178 shares as on March 31, 2016. Book value Number of employees including subsidiaries 1,200.00 12,000 11,386 11,006 10,451 1,034.29 9,969 10,000 9,652 9,682 1,000.00 9,068 9,220 8,928 8,733 Number of employees 872.82 800.00 744.48 8,000 637.04 600.00 6,000 in ` 505.51 413.04 405.87 433.10 400.00 4,000 327.26 278.34 200.00 2,000 0.00 0 06-07 07-08 08-09 09-10 10-11 11-12 12-13 13-14 14-15 15-16 06-07 07-08 08-09 09-10 10-11 11-12 12-13 13-14 14-15 15-16 Book Value is computed on the equity capital base of 84,856,178 shares as on March 31, 2016. Customers serviced ... in countries 1,400 160 145 147 141 141 142 1,247 137 137 139 1,200 1,132 1,195 140 133 1,084 128 1,028 Number of customers 971 120 1,000 922 882 Country base 814 100 800 753 80 600 60 400 40 200 20 0 0 06-07 07-08 08-09 09-10 10-11 11-12 12-13 13-14 14-15 15-16 06-07 07-08 08-09 09-10 10-11 11-12 12-13 13-14 14-15 15-16 5


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    Corporate information Oracle Financial Services Software Limited Board of directors S Venkatachalam, Chairman Chaitanya Kamat, Managing Director & CEO Derek H Williams Harinderjit Singh Maria Smith Richard Jackson Robert K Weiler Samantha Wellington Sridhar Srinivasan Chief financial officer Bankers Makarand Padalkar Bank of India HSBC Bank Canara Bank Kotak Mahindra Bank Ltd. Company secretary and Citibank, N.A. J P Morgan Chase Compliance officer Deutsche Bank AG Syndicate Bank Onkarnath Banerjee HDFC Bank Ltd. Yes Bank Ltd. Chief accounting officer Management team Avadhut (Vinay) Ketkar Abhik Ray Rajesh Makhija Arvind Gulhati Ravikumar M Legal counsel Bindu Venkatesh Ravikumar V Mohamed Yacob Deepak Kewalramani S Bhargava Registered office Dinakar Kini Sanjay Bajaj Oracle Financial Services Software Limited Dinesh V Shetty Sanjay Kumar Ghosh Oracle Park, Edwin Niranjan Moses Sanjay V Deshpande Off Western Express Highway Goregaon (East) George Thomas Sanjeet Prakash Rao Mumbai 400063, Maharashtra, India Karthick R Prasad Surendra Shukla CIN: L72200MH1989PLC053666 Laura Balachandran Suresh Kumar Pinglay Registrars & Transfer Agents Mahesh Kandavar Rao Umesh Arora Link Intime India Private Limited Manish Chandra Gupta Venkata Subramanian C-13 Pannalal Silk Mills Compound L.B.S. Marg, Bhandup (West) Manmath Kulkarni Venkatesh Srinivasan Mumbai 400078, Maharashtra, India Nikos Goutsoulas Vijay Alexander Rajaram N Vadapandeshwara Vikram Gupta Auditors S. R. Batliboi & Associates LLP Rajendra Potdar Vinayak L Hampihallikar Oracle Financial Services Software – Annual Report 2015-16


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    Offices India Asia Pacific Oracle Financial Services Software Limited Oracle Financial Services Software Pte. Ltd. Nirlon Compound 27, International Business Park Off Western Express Highway #02-01 iQUEST@IBP Building Goregaon (East) Singapore 609924 Mumbai 400063, Maharashtra, India Akasaka Center Building 13F, Oracle Park, Ambrosia 1-3-13 Moto Akasaka, Minato-ku Pune 411021, Maharashtra, India Tokyo 107-0051, Japan C/o Embassy Business Park Levels 12, 15, 16 & 36, ASEM Tower, C.V. Raman Nagar 159-1 Samsung-dong, Kangnam-ku Bangalore 560093, Karnataka, India Seoul 135-798, South Korea Gopalan Enterprises (I) Pvt. Ltd., (SEZ) Level 8, 4 Julius Avenue Global Axis, Unit 1 & 2 North Ryde Plot # 152, EPIP Zone, Whitefield Sydney, NSW 2113, Australia Bangalore 560066, Karnataka, India Level 4, 417 St. Kilda Road Green I-Tech, # 5 Melbourne VIC 3004, Australia Muthiah Mudali Street, Off Cathedral Road Chennai 600086, Tamil Nadu, India 18th Floor, International Finance Place No. 8 Huaxia Road, Pearl River New City Oracle (OFSS) ASP Private Limited Tianhe District, Guangzhou 510623, PRC, China Oracle Park, Off Western Express Highway Goregaon (East) Mumbai 400063, Maharashtra, India Oracle Financial Services Consulting Pte. Ltd. 27, International Business Park Oracle (OFSS) Processing Services Limited #02-01 iQUEST@IBP Building Oracle Park, Off Western Express Highway Singapore 609924 Goregaon (East) Mumbai 400063, Maharashtra, India Oracle Financial Services Software (Shanghai) Limited Unit 806, Henderson Metropolitan Building SDF-1, Unit 12, SEEPZ - SEZ 155, Tianjin Road, Shanghai, PRC, China 200001 Andheri (East) Mumbai 400096, Maharashtra, India 21st Floor, Office Park Tower C No-5, Jing Hua Nan Jie C/o Embassy Business Park Chaoyang District C.V. Raman Nagar Beijing 100020, PRC, China Bangalore 560093, Karnataka, India Oracle (OFSS) BPO Services Limited DLF Infinity Tower A, 3rd Floor DLF Cyber City, Phase II Gurgaon 122002, Haryana, India 7


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    Offices Europe, Middle East & Africa (EMEA) Americas Oracle Financial Services Software B.V. Oracle Financial Services Software America, Inc. Barbara Strozzilaan 201 Oracle Financial Services Software, Inc. & Mantas Inc. NL-1083 HN Amsterdam 399 Thornall Street, 6th Floor The Netherlands Edison, NJ 08837 USA Mainzer Landstrasse 49a 8000 Norman Center Drive, Suite 700 60329 Frankfurt am Main, Germany Bloomington, MN 55437 USA Level 29, 40 Bank Street 1910 Oracle Way, 3rd Floor Canary Wharf Reston, VA 20190 USA London E14 5NR, UK Oracle (OFSS) BPO Services Inc. Suite 22, Portes de la Defense 17901 Von Karman Avenue Suite # 800 15, boulevard Charles de Gaulle Irvine, CA 92614 USA 92700 Colombes, France Oracle Financial Services Software Chile Limitada Molyneux House Avenida del Valle 537 – 2nd Floor Bride Street, Dublin 8 Ciudad Empresarial Ireland Huechuraba Santiago, Chile, CP 8580678 Oracle Financial Services Software SA 265 Mesogheion Avenue Neo Psychico 15451 Athens, Greece Oracle Financial Services Software Limited bld.6/1, Village Moskovsky, 22-nd km Kievskoe Route Moscow, Russian Federation, 142784 Park Rotana, Level One, Office 108 Khalifa Park, Sector E-48 PO Box 769441 Abu Dhabi, UAE Abdullah Omran Taryam Street Block A, Second Floor Units A201-A209 Office Park, Dubai Internet City Dubai, UAE ISP Internet (Mauritius) Company C/o Cim Global Business Rogers House 5 President John Kennedy Street Port Louis, Mauritius Oracle Financial Services Software – Annual Report 2015-16


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    Directors’ report Financial year 2015-16 Dear Members, The Directors present their report on the business and operations of your Company along with the Annual Report and audited financial statements of the Company for the financial year 2015-16. Financial highlights As per Indian GAAP Consolidated financial statements: (Amounts in ` million) Particulars Year ended Year ended March 31, 2016 March 31, 2015 Revenue from operations 40,928.02 39,049.05 Other income, net 2,559.65 3,481.34 Total income 43,487.67 42,530.39 Depreciation and amortization (529.27) (680.92) Profit before tax 18,618.04 18,308.37 Tax expenses (6,960.28) (6,385.17) Profit for the year 11,657.76 11,923.20 As per Indian GAAP Unconsolidated financial statements: (Amounts in ` million) Particulars Year ended Year ended March 31, 2016 March 31, 2015 Revenue from operations 34,868.09 33,410.95 Other income, net 1,864.92 3,758.99 Total income 36,733.01 37,169.94 Depreciation and amortization (497.72) (634.37) Profit before tax 15,010.95 16,136.29 Tax expenses (5,722.45) (5,556.09) Profit for the year 9,288.50 10,580.20 Performance On consolidated basis, your Company’s revenue stood at ` 40,928 million this year, an increase of 4.8% from ` 39,049 million of the previous financial year. The net income was ` 11,658 million this year, a decrease of 2.2% primarily on account of lower interest income. On an unconsolidated basis, your Company’s revenue grew to ` 34,868 million during the financial year 2015-16 from ` 33,411 million last year. This represents a growth of 4.4%. The Company’s net income for the financial year 2015-16 was ` 9,289 million, a decrease of 12.2% over the previous financial year primarily on account of lower interest income. A detailed analysis of the financials is given in the Management’s discussion and analysis report that forms a part of this Directors’ report. Dividend Your Board is pleased to recommend a final dividend of ` 100 per equity share of face value of ` 5 each for the financial year ended March 31, 2016. The Register of Members and Share Transfer Books will remain closed from Thursday, September 1, 2016 to Wednesday, September 7, 2016 (both days inclusive) for the purpose of payment of final dividend for the financial year ended March 31, 2016 and the Annual General Meeting. The Annual General Meeting is scheduled to be held on Wednesday, September 7, 2016. The dividend, if approved at the forthcoming Annual General Meeting, will be paid to those members whose names appear on the Register of Members as on the close of business hours of Wednesday, August 31, 2016. Transfer to reserves The Company does not propose to transfer any amount to the General Reserve out of the amount available for appropriation. 9


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    Particulars of loans, guarantees or investments Pursuant to Section 186 of the Companies Act, 2013, there are no new loans granted or investments made by the Company during the financial year 2015-16. Share capital During the year the Company allotted 241,319 equity shares of face value of ` 5 each to its eligible employees who exercised their options under the prevailing Employee Stock Option Schemes of the Company. As a result, as on March 31, 2016, the paid-up equity share capital of the Company was ` 424,280,890 divided into 84,856,178 equity shares of face value of ` 5 each. Extract of annual return Pursuant to Section 92(3) of the Companies Act, 2013 (“the Act”) and Rule 12(1) of the Companies (Management and Administration) Rules, 2014, extract of annual return (in form MGT-9) is annexed as Annexure 1 to this report. Directors and key managerial personnel Mr. Robert K Weiler and Mr. Harinderjit Singh, Directors of the Company, retire by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment. The current term of appointment of Mr. Chaitanya Kamat as the Managing Director and Chief Executive Officer of the Company expires on October 24, 2016. It is proposed to re-appoint Mr. Chaitanya Kamat as the Managing Director and Chief Executive Officer of the Company for a further period of five years from October 25, 2016 to October 24, 2021. The terms and conditions of Mr. Kamat’s re-appointment are part of the Notice of the Annual General Meeting. Mr. Kamat shall be liable to retire by rotation. The Board recommends to the Members the resolutions for re-appointment of Mr. Robert K Weiler and Mr. Harinderjit Singh as Directors of the Company, liable to retire by rotation. The Board also recommends to the Members the resolution for re-appointment of Mr. Kamat as the Managing Director and Chief Executive Officer of the Company for a further period of five years. A letter of appointment is issued to the Independent Director at the time of appointment. The model copy of the letter is available on Company’s website at: http://www.oracle.com/us/industries/financial-services/model-letter-appointment-director-2399432.pdf All Independent Directors have given declarations under Section 149(6) of the Companies Act, 2013 confirming that they meet the criteria of independence. Brief resumes of the Directors proposed to be re-appointed, the nature of their expertise in specific functional areas and the names of companies in which they hold directorships and memberships / chairmanships of Board Committees, etc. are provided in the Notice and Report on Corporate Governance forming part of this Annual Report. Mr. Jayant Joshi, relinquished the position as the Company Secretary and Compliance Officer with effect from May 31, 2015. The Board of Directors at its meeting held on May 15, 2015 has appointed Mr. Onkarnath Banerjee as the Company Secretary and Compliance Officer and a whole-time Key Managerial Personnel (KMP) of the Company effective June 1, 2015. Board policies Board evaluation policy In accordance with the requirements of the Section 178 of the Companies Act, 2013 and the Regulation 17(10) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“Listing Regulations”), the Chairman of the Nomination and Remuneration Committee conducts the Board evaluation. The report of the evaluation is tabled at the Board meeting. Record retention policy Pursuant to Regulation 9 and 30(8) of Listing Regulations, the Company has framed a Record retention policy. Risk management policy The Company has established Risk Management Policy which states out the Company’s principles and processes with regard to identification, analysis and management of applicable risks. Remuneration policy The Nomination and Remuneration Committee determines the remuneration payable to the Directors within the limits approved by the shareholders. Independent Non-Executive Directors are paid commission based on the committee Chairmanships/ memberships. The remuneration to Executive directors, Key Managerial Personnel and Senior Management consists of fixed pay and incentive pay, in compliance with the policies of the Company. The Committee reviews and approves the stock options and other share based awards / payments to Executive directors, Key Managerial Personnel and employees of the Company. Policy on determination of material events and information The Company has a policy on determination of material events and information and sets out the classes and types of material events or information which requires disclosure to stock exchanges. The policy is available on the Company’s website at: http://www.oracle.com/us/industries/financial-services/policy-determining-material-2615655.pdf Oracle Financial Services Software – Annual Report 2015-16


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    Vigil mechanism / whistle blower policy The Company has established a Code of Ethics and Business Conduct (“Code”) which is applicable to its employees. The Code also extends to the Company’s suppliers and partners. Regular dissemination of the Code and trainings are conducted to reinforce the concepts and ensure that any changes are communicated. The Company’s vigil mechanism deals with reporting and dealing with instances of fraud and mismanagement, and forms part of the Code. The Company has in place a confidential reporting mechanism for any whistle blower to report a matter. In terms of Companies Act, 2013 and Regulation 46 of the Listing Regulations, the Vigil Mechanism / Whistle Blower Policy forms part of the Company’s Code of Ethics and Business Conduct which is placed on website of the Company at: http://www.oracle.com/us/corporate/careers/diversity/038400.pdf Related party transactions policy The Company has framed a related party transactions policy in accordance with the provisions of the Companies Act, 2013 and the Listing Regulations. All related party transactions which were entered into during the financial year 2015-16 were on an arm’s length basis and in the ordinary course of business. Form AOC-2 providing the details of related party transactions of the Company is annexed to this report as Annexure 2. The policy is available on website of the Company at: http://www.oracle.com/us/industries/financial-services/ofss-party-transactions-policy-2288144.pdf Directors’ familiarization program The Company has a familiarization program for new directors including independent directors. The program provides an insight into the Company’s products, competition, emerging technologies, etc. to gain a better understanding of the business environment as also covers the regulatory landscape. The familiarization program is available on Company’s website at: http://www.oracle.com/us/industries/financial-services/financial-familarization-program-2547373.pdf Subsidiaries Your Company has subsidiaries in Greece, India, Republic of Chile, People’s Republic of China, Republic of Mauritius, Singapore, The Netherlands and United States of America. Pursuant to provisions of Section 129(3) of the Companies Act, 2013, a statement containing salient features of the financial statements of the Company’s subsidiaries in Form AOC-1 is attached to the financial statements of the Company. Further, pursuant to the provisions of Section 136 of the Companies Act, 2013, the financial statements of the Company, consolidated financial statements along with relevant documents and separate audited accounts in respect of subsidiaries, are available on the website of the Company at www.oracle.com/financialservices Research and development Your Company continuously makes significant investments in research and development to develop solutions that the global banking industry needs today and will need tomorrow. Your Company strives to be at the forefront of innovation, at the same time taking the technology risk away from the banks by future proofing their investments. Your Company’s dedicated in-house research and development (R&D) centers have produced a number of products that are today used by banks in more than 120 countries around the world for running their most critical operations. The investment your Company makes in building applications coupled with access to Oracle’s technology provides a unique competitive edge to its offerings. Six in-house R&D centers in India of your Company have been accorded recognition by the Department of Scientific and Industrial Research (DSIR) from February 26, 2016. The aggregate expenditure on research and development activities in these in-house R&D centers is as follows: (Amounts in ` million) Particulars Year ended Year ended March 31, 2016 March 31, 2015 Revenue Expenditure 2,711.00 2,621.62 Capital Expenditure 35.27 20.57 Fixed deposits During the financial year 2015-16, the Company has not accepted any fixed deposits within the meaning of Rule 2(c) of the Companies (Acceptance of Deposits) Rules, 2014, and as such, no amount of principal or interest was outstanding as of the date of the Balance Sheet. Corporate governance The Company has taken appropriate steps and measures to comply with all the corporate governance regulations and related requirements as envisaged under Regulation 27 of the Listing Regulations. A separate report on Corporate Governance along with a certificate of Practicing Company Secretary with regard to compliance of conditions of Corporate Governance as stipulated in Regulation 34(3) of the Listing Regulations forms part of this Annual Report. Secretarial audit In terms of Section 204 of the Companies Act, 2013, and the Rules made thereunder, the Secretarial Audit report issued by Practicing Company Secretary is annexed as Annexure 3 to this report. 11


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    The Practicing Company Secretary has noted in his Secretarial Audit Report that the composition of Board of Directors and the Nomination and Remuneration Committee of the Company was not as per Section 149(4) and Section 178(1) of the Companies Act, 2013 and Clause 49IIA(2) and Clause 49IVA of the Listing Agreement during the period from April 1, 2015 to July 22, 2015. The Directors clarify that the Company had initiated all necessary steps to fill in the position as quickly as possible. After following the appropriate selection process, the Company had appointed Mr. Sridhar Srinivasan, as a Non-Executive, Independent Director on July 23, 2015. Accordingly, the Company had since complied with the applicable regulations. Business responsibility report Business Responsibility Report for financial year 2015-16 that forms part of this Annual Report has been hosted on the Company’s website www.oracle.com/financialservices. The Members, who wish to obtain a printed copy of the report, may write to the Company Secretary at the Registered Office of the Company. Employee stock option plan (“ESOP”) The Members at their Annual General Meeting held on August 14, 2001 approved grant of ESOPs to the employees / directors of the Company and its subsidiaries up to 7.5% of the issued and paid-up capital of the Company from time to time. This said limit was enhanced and approved up to 12.5% of the issued and paid-up capital of the Company from time to time, by the Members at their Annual General Meeting held on August 18, 2011. This extended limit is an all inclusive limit applicable for stock options granted in the past and in force and those that will be granted by the Company under this authorization. Pursuant to ESOP scheme approved by the members of the Company on August 14, 2001, the Board of Directors, on March 4, 2002 approved the Employees Stock Option Scheme (“Scheme 2002”) for issue of 4,753,600 options to the employees and directors of the Company and its subsidiaries. According to the Scheme 2002, the Company has granted 4,548,920 options prior to the IPO and 619,000 options at various dates after IPO (including the grants of options out of options forfeited earlier). On August 25, 2010, the Board of Directors approved the Employees Stock Option Plan 2010 Scheme (“Scheme 2010”) for issue of 618,000 options to the employees and directors of the Company and its subsidiaries. According to the Scheme 2010, the Company has granted 638,000 options (including the grants of options out of options forfeited earlier). Pursuant to ESOP scheme approved by the members of the Company in their meeting held on August 18, 2011, the Board of Directors approved the Employees Stock Option Plan 2011 Scheme (“Scheme 2011”). Accordingly, the Company has granted 1,950,500 options under the Scheme 2011. Nomination and Remuneration Committee in their meeting held on August 7, 2014 approved Oracle Financial Services Software Limited Stock Plan 2014 (“OFSS Stock Plan 2014”). Accordingly the Company granted 95,545 Stock Options and 301,078 Restricted Stock Units (RSUs) under OFSS Stock Plan 2014. The issuance terms of RSUs are the same as for Stock Options, employees may elect to receive 1 RSU in lieu of 4 awarded Stock Options at their respective exercise price. As per the Scheme 2002, Scheme 2010 and Scheme 2011, each of 20% of the total options granted will vest on completion of 12, 24, 36, 48 and 60 months from the date of grant and is subject to continued employment of the employee or directorship of the director with the Company or its subsidiaries. Options have exercise period of 10 years from the date of grant. The employee pays the exercise price upon exercise of options. In respect of the OFSS Stock Plan 2014, each of 25% of the total stock options / RSUs granted will vest on completion of 12, 24, 36 and 48 months from the date of grant and is subject to continued employment of the employee with the Company or its subsidiaries. Options / RSUs have exercise period of 10 years from the date of grant. The employee pays the exercise price upon exercise of options/RSUs. The details of the options / RSUs granted under the Scheme 2002, Scheme 2010, Scheme 2011 and OFSS Stock Plan 2014 to eligible employees / directors from time to time are given below: Particulars Scheme Scheme Scheme OFSS Stock OFSS Stock Total 2002 2010 2011 Plan 2014 Plan 2014 (Stock Options) (RSUs) Pricing Formula At the market price as on the date of grant `5/- Variation of terms of options/RSUs None None None None None Number of options/RSUs granted till 5,167,920 638,000 1,950,500 95,545 301,078 8,153,043 March 31, 2016 Number of options/RSUs lapsed and (614,725) (273,642) (338,700) (2,300) (7,962) (1,237,329) forfeited Number of options/RSUs exercised (4,530,195) (269,014) (491,875) – – (5,291,084) Total number of options in force as on 23,000 95,344 1,119,925 93,245 293,116 1,624,630 March 31, 2016 Oracle Financial Services Software – Annual Report 2015-16


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    The details of Options / RSUs granted to Directors and Senior Managerial Personnel under OFSS Stock Plan 2014 during the financial year ended March 31, 2016 are as follows: Particulars Number of RSUs (OFSS Stock Plan 2014) i. Directors: Mr. Chaitanya Kamat 25,000 ii. Senior Managerial Personnel: Mr. Arvind Gulhati 5,000 Mr. Edwin Moses 3,750 Mr. Mahesh Rao 2,500 Mr. Makarand Padalkar 10,000 Mr. Mohamed Yacob 200 Mr. M Ravikumar 3,125 Mr. Nikos Goutsoulas 1,500 Mr. Onkarnath Banerjee 375 Mr. Sanjay Deshpande 1,500 Mr. Vikram Gupta 5,000 Mr. Vinayak Hampihallikar 1,750 iii. Any other employee, who receives grant in any one year of option/RSUs amounting to 5% Nil or more of option / RSUs granted during the year iv. Identified employees who were granted option / RSUs, during any one year, equal to or Nil exceeding 1% of the issued capital (excluding outstanding warrants and conversions) of the Company at the time of grant v. Diluted Earnings Per Share (EPS) pursuant to the issue of shares on exercise of option ` 109.03 calculated in accordance with Accounting Standard 20 ‘Earnings Per Share’ issued by the Institute of Chartered Accountants of India Had compensation cost for the Company’s ESOP been determined based on fair value at the grant dates, the Company’s net profit and earnings per share would have been reported as per proforma amounts indicated below: (Amounts in ` million, except per share data) Particulars Year ended March 31, 2016 Profit as reported 9,288.50 Add: Employee stock compensation under intrinsic value method 369.95 Less: Employee stock compensation under fair value method (749.15) Proforma profit 8,909.30 Earnings per share Basic - As reported 109.62 - Proforma 105.14 Diluted - As reported 109.03 - Proforma 104.69 All stock options were granted at market price on the date of grant and RSUs were granted at the face value of the equity shares. The compensation cost arising on account of stock options and RSUs is calculated using the Intrinsic Value method. The reported profit is after considering the cost of employee stock compensation using intrinsic value method on RSUs (` 369.95 million). The employee compensation cost using Fair value method on all the Stock options and RSUs for the year was ` 749.15 and the same is considered while calculating the proforma profit. Accordingly the disclosures in terms of Regulation 14 (C) (vii) of the SEBI (Share Based Employee Benefits) Regulations, 2014, are not applicable. 13


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    A summary of the activities in the Company’s Scheme 2002, Scheme 2010 and Scheme 2011 for the year ended March 31, 2016 are as follows: Particulars Year ended March 31, 2016 Scheme 2002 Scheme 2010 Scheme 2011 Shares Weighted Shares Weighted Shares Weighted arising from average exercise arising from average exercise arising from average exercise options price (`) options price (`) options price (`) Outstanding at beginning of year 36,400 1,978 164,690 2,064 1,414,628 2,837 Granted – – – – – – Exercised (13,400) 2,225 (63,666) 2,068 (164,253) 2,504 Forfeited – – (5,680) 2,050 (130,450) 2,872 Outstanding at end of the year 23,000 1,835 95,344 2,062 1,119,925 2,882 Vested options 23,000 91,344 477,225 Unvested options – 4,000 642,700 Options vested during the year 12,000 65,709 311,900 Options forfeited / lapsed during Nil 5,680 130,450 the year The weighted average share price for the year over which stock options were exercised was ` 3,740. Money realized by exercise of options during the financial year 2015-16 was ` 572.81 million. The Company has recovered perquisite tax on the options exercised by the employees during the year. A summary of the activities in the Company’s OFSS Stock Plan 2014 are as follows: Particulars Year ended March 31, 2016 OFSS Stock Plan 2014 Shares Weighted average Shares arising Weighted average arising from RSUs exercise price (`) from Options exercise price (`) Outstanding at beginning of year 147,889 5 58,370 3,241 Granted 153,189 5 37,175 3,987 Exercised – – – – Forfeited (7,962) 5 (2,300) 3,241 Outstanding at end of the year 293,116 5 93,245 3,539 Vested RSUs / Options 35,745 14,010 Unvested RSUs / Options 257,371 79,235 RSUs / Options vested during the year 35,745 14,010 RSUs / Options forfeited / lapsed during the year 7,962 2,300 The fair value of stock options / RSUs granted on November 5, 2015 under OFSS Stock Plan 2014 was ` 3,481, calculated as per the Black Scholes valuation model as stated in 22 (b) in the notes to accounts of standalone financials. Oracle Financial Services Software – Annual Report 2015-16


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    The details of options unvested and options vested and exercisable as on March 31, 2016 are as follows: Exercise prices (`) Number of options Weighted average Weighted average exercise price (`) remaining contractual life (Years) Options / RSUs unvested 5 106,507 5 9.0 5 150,864 5 9.6 1,930 78,750 1,930 5.7 2,032 8,000 2,032 5.7 2,342 4,000 2,342 5.2 3,076 12,000 3,076 8.3 3,077 334,350 3,077 7.5 3,127 209,600 3,127 6.9 3,241 42,060 3,241 9.0 3,987 37,175 3,987 9.6 Options / RSUs vested and exercisable 5 35,520 5 9.0 5 225 5 9.6 1,291 11,000 1,291 0.1 1,930 122,328 1,930 5.7 2,050 91,344 2,050 4.4 2,333 12,000 2,333 4.6 3,076 3,000 3,076 8.3 3,077 148,700 3,077 7.5 3,127 203,197 3,127 6.9 3,241 14,010 3,241 9.0 1,624,630 2,338 7.3 Employee Stock Purchase Scheme ("ESPS") The Company has adopted the ESPS administered through a Trust with name i-flex Employee Stock Option Trust (“the Trust”) to provide equity based incentives to key employees of the Company. i-flex Solutions Trustee Company Limited is the Trustee of this Trust. As per the scheme, the Trust can purchase shares of the Company from market using the proceeds of loans obtained from the Company. Such shares are allocated by the Trust to nominated employees at an exercise price, which approximates the fair value on the date of the grant. The shares vest in the employees over a period of five years and the employees can purchase the shares from the Trust over a period of ten years based on continued employment, until which, the Trust holds the shares for the benefit of the employees. The employees are entitled to receive dividends, bonus, etc., that may be declared by the Company from time to time for the entire portion of shares held by the Trust on behalf of the employees. On the acceptance of the offer, the selected employee undertakes to purchase the shares from the Trust within ten years from the date of grant. In case an employee resigns from employment, the rights relating to vested shares, which are eligible for exercise, may be purchased by the employee by payment of the exercise price whereas, the balance shares are forfeited in favor of the Trust. The Trustees have the right of recourse against the employees for any amounts that may remain unpaid on the shares accepted by them. As of the balance sheet date, the Trust has repaid the entire loan obtained from the Company on receipt of payments from employees against shares exercised. No allocation of shares to the employees have been made through the Trust since 2005 and all selected employees under the Trust have exercised their right of purchase of shares prior to March 31, 2014. In this regard, the Trustee Company has also filed a petition in the Hon’ble Bombay High Court to seek directions for utilization of the remaining unallocated shares along with the other assets held by the Trust for the benefit of the employees of the Company and the matter is presently pending before the Hon’ble Bombay High Court. As on March 31, 2016, 166,142 equity shares (March 31, 2015 – 166,142 equity shares) of the Company were held by the Trust. Human resources Your Company maintains a healthy and productive environment and offers clean and ergonomic workspaces. Human Resources are key assets of your Company, and your Company invests continuously in imparting latest technology skills together with a range of soft skills to help them excel in their roles. Your Company has a strong performance management system together with a formal talent management processes to nurture employee careers, groom future leaders, and create a high performance workforce. Your Company follows global best HR practices. Your Company’s total manpower at the end of March 31, 2016 was 8,733 as compared to 8,928 as on March 31, 2015 (including employees of subsidiaries). During the financial year, no complaint was filed under Section 22 of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. There was no complaint outstanding as at the end of financial year. 15


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    Corporate social responsibility The Company has constituted a Corporate Social Responsibility Committee and has formulated the Corporate Social Responsibility (“CSR”) Policy. The CSR Policy is in line with the provisions listed in Section 135 and Schedule VII of the Companies Act, 2013. The policy is available on the Company's website at: http://www.oracle.com/us/industries/financial-services/ofss-social-responsibility-2437852.pdf Pursuant to Rule 8 of Companies (Corporate Social Responsibility) Rules, 2014, a report on the CSR activities for the financial year ended March 31, 2016 is annexed as Annexure 4 to this report. Internal financial controls The Board has adopted adequate policies and procedures in terms of Internal Financial Controls commensurate with the size, scale and complexity of the Company’s operations. Such policies and procedures ensure orderly and efficient conduct of business, including adherence to the Company’s policies, safeguarding of its assets, prevention and detection of frauds and errors, accuracy and completeness of the accounting records, and timely preparation of reliable financial information. The scope and authority of the Business Assessment & Audit team (“BAA”) function is defined in the Internal Audit Charter. The Internal Audit function reports to the Chairman of the Audit Committee. The BAA monitors and evaluates the efficacy and adequacy of internal control system in the Company, its compliance with operating systems, risk management system, accounting procedures and policies at all locations of the Company and its subsidiaries. Based on the report of BAA, the Company undertakes corrective actions in their respective areas thereby strengthening the controls. Significant audit observations and corrective actions thereon are presented by the BAA to the Audit Committee. Directors’ responsibility statement As required under clause (c) of sub-section 3 of Section 134 of the Companies Act, 2013, for the financial year ended on March 31, 2016, the Directors hereby confirm that: a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures; b) the directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit and loss of the company for that period; c) the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; d) the directors had prepared the annual accounts on a going concern basis; and e) the directors, had laid down internal financial controls followed by the Company and that such internal financial controls are adequate and were operating effectively. f) the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively. Auditors M/s. S. R. Batliboi & Associates LLP, Chartered Accountants (Firm Registration no.101049W/E300004), were appointed as the Statutory Auditors of the Company by the Members at their Twenty Fifth Annual General Meeting held on September 12, 2014 to hold office till the conclusion of the Annual General Meeting to be held in the year 2017, subject to the ratification of their appointment at every Annual General Meeting. M/s. S. R. Batliboi & Associates LLP have confirmed their eligibility and willingness to accept office as the Statutory Auditors and also confirmed that they have not been disqualified to be appointed as the Statutory Auditors at the ensuing Annual General Meeting. Auditors’ report With regard to the Auditors’ comment in the CARO report concerning delays in payment of a few tax payments, e.g., Foreign Income Taxes, Foreign Value Added Tax and Foreign Withholding Tax, the Company is continuously evaluating and accruing towards any material tax exposures in the books taking a conservative approach and payments are made based on the advice of the tax expert. The Company continually assesses withholding of Payroll Tax implications in various jurisdictions outside India on salaries and travel related reimbursements paid to its employees posted therein and accordingly makes accruals in the books. The Company is in the process of filing the returns for Payroll Tax in such jurisdiction for which the provision is already made in the books. As per the local laws of most host countries, the tax is payable by the employee, however in a few countries tax payment is a responsibility of the employer, which amounts to ` 1.04 crore. The Company and the employees ensure tax compliance in such countries as advised by the tax consultants. Oracle Financial Services Software – Annual Report 2015-16


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    Conservation of energy and technology absorption and foreign exchange earnings and outgo The particulars as prescribed under sub-section (1)(e) of Section 134 of the Companies Act, 2013 read with Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, the relevant data pertaining to conservation of energy, technology absorption and foreign exchange earnings and outgo are furnished hereunder: i. Conservation of energy and technology absorption The Company regularly strives to utilize newer technologies with the view to conserve the energy and create an environmentally friendly work environment. The initiatives taken by the Company are summarized below: Pivot to Cloud: There has been a significant expansion of Oracle capabilities into the Cloud space. A lot of IT applications have been migrated to the Cloud, which enhances its reach and ease of access across the globe. There have been significant investments in infrastructure as well people to enhance the Cloud architecture in IT support and IT infrastructure management. Emerging cloud services are being evaluated against strategic use cases for further expansion into the cloud space. Security around these applications in the Cloud has been strengthened to ensure a secure operating environment. Technology upgrade: Your Company carried out a refresh of servers across the Company to deploy modern and energy efficient machines. This has brought about significant savings in power, strengthened operating effectiveness and security. Network: Efficient networks are essential to support our global business and the Company continues to invest in upgrades and modernization of the networks thereby increases uptime of the network infrastructure, increase capacity and enable greater collaboration. Online conference (Voice & Data): There has been an upgrade in the application which supports online conferencing. There have been developments on both the voice and data front. Significant improvements in voice capabilities during conferences have made voice communication over the internet as good as over regular PSTN lines. Also the web conferencing capabilities have been significantly simplified, which makes it easy to use and adopt. This enhances communication across the globe, minimizing travel, increasing efficiencies from a support perspective as well by making self service operations easier and effective. All these initiatives planned lead to a more secure and efficient operating environment, with the utilization of current cutting edge technology ensuring consistent and superior support to the business. ii. Foreign exchange earnings and outgo: (Amounts in ` million) Foreign Exchange Earnings 32,891.45 (excluding reimbursement of travelling expenses) Foreign Exchange Outgo 9,027.03 (including capital goods & other expenditure) Activities relating to exports; initiatives taken to increase exports; development of new export markets for products and services; and export plans: Your Company has established an extensive global presence across leading markets through its sales and marketing network. The Company will continue to focus on tapping various potential markets available globally. Experienced sales and marketing specialists focus on building strong international business presence to develop new export markets for your Company. Prospects In the process of catering to growing expectations of digitally savvy customers, the financial services industry is undergoing a drastic change. World-over, banks are striving to stay relevant and competitive in the changing business landscape, and they aspire to adopt tools and technologies that propel innovation and growth. Digital remains a strategic imperative for bankers, to prepare for a future that is changing very fast. Bankers need to devise a strategy on how to leverage digital technology to get close to their customer, drive sales, cut costs and streamline operations. In today’s world where Cloud and Fintechs continue to gain greater ground, the need for re-engineering the complex IT landscape of the financial institutions is being felt acutely. In order to stay relevant and beat competition, financial institutions will need to provide innovative digital offerings partnering, where needed, with organizations from different industries; expand their foot print to increase their customer base and meet changing business needs quickly while adhering to the risk and compliance regulations. Customer expectations are changing, largely driven by millennials – who are digitally savvy, hyper-connected, always on and choice conscious. These customers are accustomed to the digital experiences offered by online retailers and expect the same or perhaps a richer experience from banks. Banks are now strategically investing in platforms that provide such customer experience that is intelligent, highly flexible, scalable and sustainable. With a portfolio of offerings that addresses this very need, your Company sees it as a significant opportunity, and is maintaining an unremitting focus on it. Your Company’s wins in the last year have demonstrated that its products are relevant for traditional banks in both developed and developing economies as also for specialized financial institutions and Fintechs. Your Company will continue to pursue such opportunities vigorously. 17


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    Employee particulars The information required under Section 197 of the Companies Act, 2013. read with rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Amendment Rules, 2016 is given below: Following guidelines have been used when preparing this statement. For statistically relevant computation of median value of employee remuneration, employees who have served the entire 12 months in the corresponding fiscal year were considered. Further, the expression “median” means the numerical value separating the higher half of a population from the lower half and the median of a finite list of numbers may be found by arranging all the observations from lowest value to highest value and picking the middle one; and if there is an even number of observations, the median is the average of the two middle values. The remuneration used for the analysis in this section excludes the (perquisite) value of the difference between the fair market value and the exercise price on the date of exercise of options, to make the comparisons relevant. (i) The ratio of the remuneration of each director to the median remuneration of the employees of the Company for the financial year: Name of the Director1 Ratio to median remuneration Non Executive Directors Mr. S Venkatachalam 3 Mr. Richard Jackson 2 Executive Director Mr. Chaitanya Kamat2 33 1 The details mention above are of only those Directors to whom the remuneration has been paid 2 Excludes the (perquisite) value towards difference between the fair market value and the exercise price on the date of exercise of options (ii) The percentage increase in remuneration of each director, chief executive officer, chief financial officer and company secretary in the financial year: Name and Title Percentage increase of remuneration in FY 2016 as compared to FY 2015 Mr. S Venkatachalam 6% Mr. Richard Jackson1 35% Mr. Chaitanya Kamat2 (19%) Mr. Makarand Padalkar, Chief Financial Officer2 7% Mr. Onkarnath Banerjee, Company Secretary3 NA Mr. Jayant Joshi, Company Secretary4 NA 1 Increase on account of additional committee memberships in line with compensation policy of the Company 2 Excludes the (perquisite) value towards difference between the fair market value and the exercise price on the date of exercise of options 3 For the period June 1, 2015 to March 31, 2016 4 For the period April 1, 2015 to May 31, 2015 (iii) The percentage increase in the Median Remuneration of Employees in fiscal 2016, as compared to fiscal 2015: 5% (iv) The number of permanent employees on the rolls of the Company: 7,003 as on March 31, 2016 (v) Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration: During the financial year 2015-16, the average percentile change in the compensation of employees other than the managerial personnel was an increase of 8%. The Average percentile change in the compensation of KMP was a decrease of 11%. Both comparisons exclude the perquisite value of the options exercised. (vi) Affirmation that the remuneration is as per the remuneration policy of the Company: The Company affirms remuneration is as per the remuneration policy of the Company. The statement containing particulars of employees as required under Section 197(12) of the Companies Act, 2013 read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Amendment Rules, 2016, is provided in a separate annexure forming part of this report. Further, the report and the accounts are being sent to the members excluding the aforesaid annexure. In terms of Section 136 of the Companies Act, 2013, the said annexure is open Oracle Financial Services Software – Annual Report 2015-16


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    for inspection at the Registered Office of the Company. Any shareholder interested in obtaining a copy of the same may write to the Company Secretary. Acknowledgements Your Directors thank the Company’s customers, members, vendors and bankers for their continued support during the year. Your Directors also wish to thank the Government of India and its various agencies, Department of Electronics, the Software Technology Parks - Bangalore, Chennai, Mumbai, and Pune, Special Economic Zone authorities at SEEPZ and Cochin, the Customs and Excise Department, Ministry of Commerce, Ministry of Finance, Ministry of External Affairs, Ministry of Corporate Affairs, Department of Telecommunication, the Reserve Bank of India, the State Governments of Maharashtra, Karnataka, Haryana and Tamil Nadu and other local Government Bodies, for their support and look forward to their continued support in the future. Your Directors also place on record their appreciation for the excellent contribution made by employees of the Company through their commitment, competence, co-operation and diligence with a view to achieving consistent growth for the Company. For and on behalf of the Board S Venkatachalam Chairman DIN: 00257819 July 18, 2016 19


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    Annexure 1 Form No. MGT-9 EXTRACT OF ANNUAL RETURN for the financial year ended on March 31, 2016 of ORACLE FINANCIAL SERVICES SOFTWARE LIMITED [Pursuant to Section 92(3) of the Companies Act, 2013 and rule 12(1) of the Companies (Management and Administration) Rules, 2014] I. Registration and Other Details: I. CIN L72200MH1989PLC053666 II. Registration Date September 27, 1989 III. Name of the Company Oracle Financial Services Software Limited IV. Category / Sub-Category of the Company Company Limited by shares / Indian Non-Government Company V. Address of the Registered Office and contact details Oracle Park Off Western Express Highway, Goregaon (East) Mumbai 400 063 Maharashtra, India Tel : 91 22 6718 3000 Fax : 91 22 6718 4604 Email : investors-vp-ofss_in_grp@oracle.com Website : www.oracle.com/financialservices VI. Whether listed company - Yes / No Yes VII. Name, Address and contact details of Registrar & Link Intime India Private Limited Transfer Agents (RTA), if any C-13 Pannalal Silk Mills Compound L.B.S. Marg, Bhandup (West) Mumbai 400078 Tel.: +91-22-2594 6970 Fax: +91-22-2594 6969 Contact person: Mr. Mahesh Masurkar Team Leader - Investor Relation Registry Email : rnt.helpdesk@linkintime.co.in II. Principal Business Activities of the Company All the business activities contributing 10% or more of the total turnover of the company shall be stated:- Sl. Name and Description of main products / services NIC Code of the % to total turnover No. product / service of the company 1. The Company is engaged in developing, selling and marketing 62011 100 computer software, computer systems; providing consultancy and other information technology related activities Oracle Financial Services Software – Annual Report 2015-16


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    III. Particulars of Holding, Subsidiary and Associate Companies- Sl. Name and Address of the Company CIN / GLN Holding / % of Applicable No. Subsidiary / Shares Section Associate Held 1. Oracle Global (Mauritius) Limited − Holding 74.30 Section 2(46) c/o Citco (Mauritius) Limited 4th Floor, 1 Cyber City Cyber City, Ebene, Mauritius 2. Oracle Financial Services Software B.V. − Subsidiary 100.00 Section 2(87) Barbara Strozzilaan 201 NL-1083 HN Amsterdam The Netherlands 3. Oracle Financial Services Software SA − Subsidiary 100.00 Section 2(87) 265 Mesogheion Avenue Neo Psychiko, 15451, Athens, Greece 4. Oracle Financial Services Software Pte. Ltd. − Subsidiary 100.00 Section 2(87) 27 International Business Park #02-01 iQuest@IBP Building Singapore 609924 5. Oracle Financial Services Consulting Pte. Ltd. − Subsidiary 100.00 Section 2(87) 27 International Business Park #04-01 iQuest@IBP Singapore 609924 6. Oracle Financial Services Software America Inc. − Subsidiary 100.00 Section 2(87) 399 Thornall Street, 6th floor, Edison NJ 08837, USA 7. Oracle Financial Services Software Inc. − Subsidiary 100.00 Section 2(87) 399 Thornall street, 6th floor, Edison NJ 08837, USA 8. Mantas Inc. − Subsidiary 100.00 Section 2(87) 13650 Dulles Technology Drive, Suite 300 Herndon, VA 20171, USA 9. Sotas Inc. − Subsidiary 100.00 Section 2(87) 13650 Dulles Technology Drive, Suite 300 Herndon, VA 20171, USA 10. Mantas India Private Limited U72900DL1999PTC099923 Subsidiary 100.00 Section 2(87) 105, Anupam Plaza – I, 6 Local shopping Centre Ghazipur, New Delhi 110096, India 11. Oracle (OFSS) ASP Private Limited U72900MH2001PTC131264 Subsidiary 100.00 Section 2(87) Oracle Park, Off Western Express Highway Goregaon (East), Mumbai 400063 Maharashtra, India 12. Oracle (OFSS) Processing Services Limited U72900MH2005PLC151334 Subsidiary 100.00 Section 2(87) Oracle Park, Off Western Express Highway Goregaon (East), Mumbai 400063 Maharashtra, India 13. ISP Internet Mauritius Company (Mauritius) − Subsidiary 100.00 Section 2(87) C/o CIM CORPORATE SERVICES LTD Les Cascades Building Edith Cavell Street Port Louis, Mauritius 14. Oracle (OFSS) BPO Services Inc. − Subsidiary 100.00 Section 2(87) 17682 Mitchell N., Suite 200 Irvine, CA – 92614 USA 15. Oracle (OFSS) BPO Services Limited U72900DL2002PLC180572 Subsidiary 100.00 Section 2(87) A-16 / 9 Vasant Vihar New Delhi 110 057 India 21


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    Sl. Name and Address of the Company CIN / GLN Holding / % of Applicable No. Subsidiary / Shares Section Associate Held 16. Oracle Financial Services Software − Subsidiary 100.00 Section 2(87) Chile Limitada Avenida del Valle 537 – 2nd Floor Ciudad Empresarial, Huechuraba Santiago, Chile, CP 8580678 17. Oracle Financial Services Software (Shanghai) − Subsidiary 100.00 Section 2(87) Limited Room 806, No 155 Tianjin Road Huangpu District, Shanghai PRC China 200001 18. Sarvatra Technologies Private Limited U72309PN2000PTC015028 Associate 5.51 Section 2(6) 242, Shaniwar Peth, Pune 411030 Maharashtra, India 19. LOGIN S.A. − Associate 33.00 Section 2(6) 56, boulevard de la Mission Marchand 92400 Courbevoie France IV. Share Holding Pattern (Equity share capital breakup as percentage of Total Equity) (i) Category-wise Share Holding Category Category of No. of Shares held at the beginning of the No. of Shares held at the end of the % Change Code Shareholders year, as on April 1, 2015 year as on March 31, 2016 during the Demat Physical Total % of Demat Physical Total % of year Total Total shares shares I II III IV V VI VII VIII IX X XI (A) Promoter and Promoter Group (1) Indian (a) Individual / Hindu – – – – – – – – – Undivided Family (b) Central Government – – – – – – – – – (c) State Government(s) – – – – – – – – – (d) Bodies Corporate – – – – – – – – – (e) Banks / Financial – – – – – – – – – Institutions (f) Any Other – – – – – – – – – Sub-total (A) (1) – – – – – – – – – (2) Foreign (a) NRIs - Individuals – – – – – – – – – (b) Other - Individuals – – – – – – – – – (c) Bodies Corporate 63,051,197 − 63,051,197 74.52 63,051,197 − 63,051,197 74.30 (0.22) (d) Banks / Financial – – – – – – – – – Institutions (e) Any other – – – – – – – – – Sub-total (A) (2) 63,051,197 – 63,051,197 74.52 63,051,197 – 63,051,197 74.30 (0.22) Total shareholding of Promoter 63,051,197 – 63,051,197 74.52 63,051,197 – 63,051,197 74.30 (0.22) (A) = (A)(1)+(A)(2) Oracle Financial Services Software – Annual Report 2015-16


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    Category Category of Shareholders No. of Shares held at the beginning of the No. of Shares held at the end of the year % Change Code year, as on April 1, 2015 as on March 31, 2016 during the Demat Physical Total % of Demat Physical Total % of year Total Total shares shares I II III IV V VI VII VIII IX X XI (B) Public Shareholding (1) Institutions (a) Mutual Funds / UTI 3,074,086 − 3,074,086 3.63 3,332,768 − 3,332,768 3.92 0.29 (b) Banks / Financial 19,830 − 19,830 0.02 3,889 − 3,889 0.00 (0.02) Institutions (c) Central Government 4,000 − 4,000 0.01 4,000 − 4,000 0.01 0.00 (d) State Government(s) − − − − − − − − − (e) Venture Capital Funds − − − − − − − − − (f) Insurance Companies − − − − − − − − − (g) Foreign Institutional 9,176,148 − 9,176,148 10.85 8,178,638 − 8,178,638 9.64 (1.21) Investors (h) Foreign Venture − − − − − − − − − Capital Funds (i) Others − − − − − − − − − Sub-total (B)(1) 12,274,064 − 12,274,064 14.51 11,519,295 − 11,519,295 13.57 (0.94) (2) Non-Institutions – – (a) Bodies Corporate 1,039,001 − 1,039,001 1.23 1,033,910 − 1,033,910 1.22 (0.01) (b) Individuals i. Individual shareholders 3,257,841 363,297 3,621,138 4.28 3,324,878 353,172 3,678,050 4.33 0.05 holding nominal share capital upto ` 1 lakh ii. Individual shareholders 1,058,131 122,000 1,180,131 1.40 1,093,030 122,000 1,215,030 1.43 0.03 holding nominal share capital in excess of ` 1 lakh (c) Others i. Non-Resident Indians 155,966 − 155,966 0.18 146,537 − 146,537 0.17 (0.01) (Repatriate) ii. Non-Resident Indians 742,155 3,200 745,355 0.88 688,667 3,200 691,867 2 (0.06) iii. (Non-Repatriate) iv. Foreign Nationals 1,760 − 1,760 0.00 4,260 − 4,260 0.01 0.01 v. Foreign Mutual Fund 1,708,991 − 1,708,991 2.02 1,818,747 − 1,818,747 2.14 0.12 vi. Clearing Member 36,983 − 36,983 0.04 23,448 − 23,448 0.03 (0.01) vii. Directors / Relatives 9,741 − 9,741 0.01 14,085 − 14,085 0.02 0.01 viii. Hindu Undivided 4,095 − 4,095 0.00 37,350 − 37,350 0.04 0.04 Family ix. Market Maker 3,076 − 3,076 0.00 4,540 − 4,540 0.01 0.01 x. Overseas Bodies 800 − 800 0.00 − 0.00 Corporate xi. Trusts 172,472 − 172,472 0.20 169,168 − 169,168 0.20 0.00 xii. Foreign Portfolio 610,089 − 610,089 0.72 1,448,694 − 1,448,694 1.71 (0.99) Investor (Corporate) Sub-total (B)(2) 8,801,101 488,497 9,289,598 10.97 9,807,314 478,372 10,285,686 12.13 1.16 Total Public Shareholding 21,075,165 488,497 21,563,662 25.48 21,326,609 478,372 21,804,981 25.70 0.22 (B)=(B)(1)+(B)(2) (C) Shares held by Custodian for – – – – – – – – – GDRs & ADRs Grand Total (A+B+C) 84,126,362 488,497 84,614,859 100.00 84,377,806 478,372 84,856,178 100.00 0.00 23


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    (ii) Shareholding of Promoters Name of the Shareholders Shareholding at the beginning of the year Share holding at the end of the year % change as on April 1, 2015 as on March 31, 2016 in share No. of % of Total % of Shares No. of % of Total % of Shares holding Shares shares of the Pledged / Shares shares Pledged / during the Company encumbered to of the encumbered to year total shares Company total shares Oracle Global Mauritius Limited 63,051,197 74.52 − 63,051,197 74.30 − (0.22) Total 63,051,197 74.52 − 63,051,197 74.30 − (0.22) (iii) Change in Promoters’ Shareholding Name of the Shareholders Shareholding at the beginning of Cumulative shareholding during the year as on April 1, 2015 the year No. of Shares % of Total shares No. of Shares % of Total shares of the Company of the Company Oracle Global Mauritius Limited At the beginning of the year 63,051,197 74.52 63,051,197 74.52 Date wise Increase / Decrease in Promoters Share − − − − holding during the Year At the end of the year 63,051,197 74.30 The decrease in the percentage of promoters’ shareholding from 74.52 % to 74.30 % is due to allotment of shares on the exercise of ESOPs by eligible employees of the Company. (iv) Shareholding Pattern of top ten Shareholders (other than Directors, Promoters and Holders of GDRs and ADRs): Sl. Name of the Shareholders Shareholding at the beginning of Cumulative shareholding during No. the year as on April 1, 2015 the year No. of Shares % of Total shares No. of Shares % of Total shares of the Company of the Company 1. HDFC Trustee Company Limited - HDFC Equity Fund At the beginning of the year 2,305,319 2.72 2,305,319 2.72 Transactions (purchase / sale) from (167,435) (0.20) 2,137,884 2.52 April 1, 2015 to March 31, 2016 At the end of the year 2,137,884 2.52 2. Suffolk (Mauritius) Limited At the beginning of the year 2,772,805 3.27 2,772,805 3.27 Transactions (purchase / sale) from (760,547) (0.90) 2,012,258 2.37 April 1, 2015 to March 31, 2016 At the end of the year 2,012,258 2.37 3. Macquarie Bank Limited At the beginning of the year 1,559,303 1.84 1,559,303 1.84 Transactions (purchase / sale) from (8,000) (0.01) 1,551,303 1.83 April 1, 2015 to March 31, 2016 At the end of the year 1,551,303 1.83 4. Citigroup Global Markets Mauritius Private Limited At the beginning of the year 343,051 0.40 343,051 0.40 Transactions (purchase / sale) from 805,517 0.95 1,148,568 1.35 April 1, 2015 to March 31, 2016 At the end of the year 1,148,568 1.35 5. Mansfield (Mauritius) Limited At the beginning of the year 1,969,171 2.32 1,969,171 2.32 Transactions (purchase / sale) from (932,553) (1.10) 1,036,618 1.22 April 1, 2015 to March 31, 2016 At the end of the year 1,036,618 1.22 Oracle Financial Services Software – Annual Report 2015-16


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    Sl. Name of the Shareholders Shareholding at the beginning of Cumulative shareholding during No. the year as on April 1, 2015 the year No. of Shares % of Total shares No. of Shares % of Total shares of the Company of the Company 6. HDFC Standard Life Insurance Company Limited At the beginning of the year 821,938 0.97 821,938 0.97 Transactions (purchase / sale) from (90,895) (0.11) 731,043 0.86 April 1, 2015 to March 31, 2016 At the end of the year 731,043 0.86 7. Merrill Lynch Capital Markets Espana S.A. S.V. At the beginning of the year 314,597 0.37 314,597 0.37 Transactions (purchase / sale) from 404,639 0.48 719,236 0.85 April 1, 2015 to March 31, 2016 At the end of the year 719,236 0.85 8. Schroder International Selection Fund Asian Opportunities At the beginning of the year 496,893 0.59 496,893 0.59 Transactions (purchase / sale) from − − − − April 1, 2015 to March 31, 2016 At the end of the year 496,893 0.59 9. Swiss Finance Corporation (Mauritius) Limited At the beginning of the year 235,167 0.28 235,167 0.28 Transactions (purchase / sale) from 145,221 0.17 380,388 0.45 April 1, 2015 to March 31, 2016 At the end of the year 380,388 0.45 10. Morgan Stanley Asia (Singapore) PTE. At the beginning of the year 593,399 0.70 593,399 0.70 Transactions (purchase / sale) from (244,385) (0.29) 349,014 0.41 April 1, 2015 to March 31, 2016 At the end of the year 349,014 0.41 (v) Shareholding of Directors and Key Managerial Personnel: Sl. Name of the Directors / Shareholding at the beginning of Cumulative Shareholding during No. Key Managerial Personnel (KMP) the year as on April 1, 2015 the year No. of Shares % of Total shares No. of Shares % of Total shares of the Company of the Company 1. Mr. S Venkatachalam At the beginning of the year 5,000 0.01 5,000 0.01 Transactions (purchase / sale) from − − − − April 1, 2015 to March 31, 2016 At the end of the year 5,000 0.01 2. Mr. Chaitanya Kamat At the beginning of the year 3,741 0.00 3,741 0.00 Sale on July 2, 2015 (3,741) 0.00 − 0.00 ESOP exercised on September 3, 2015 38,000 0.04 38,000 0.04 Sale on October 1, 2015 (100) 0.00 37,900 0.04 Sale on October 6, 2015 (17,354) 0.02 20,546 0.02 Sale on October 7, 2015 (3,429) 0.00 17,117 0.02 Sale on October 8, 2015 (8,930) 0.01 8,187 0.01 Sale on October 9, 2015 (102) 0.00 8,085 0.01 At the end of the year 8,085 0.01 25


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    Sl. Name of the Directors / Shareholding at the beginning of Cumulative Shareholding during No. Key Managerial Personnel (KMP) the year as on April 1, 2015 the year No. of Shares % of Total shares No. of Shares % of Total shares of the Company of the Company 3. Mr. Makarand Padalkar - KMP At the beginning of the year 22,181 0.03 22,181 0.03 ESOP exercised on September 3, 2015 12,910 0.02 35,091 0.04 Sale on September 7, 2015 (8,195) 0.01 26,896 0.03 Sale on September 8, 2015 (1,305) 0.00 25,591 0.03 At the end of the year 25,591 0.03 The following Directors / Key Managerial Personnel (KMP) did not hold any shares during the Financial Year 2015-16: • Mr. Richard Jackson - Independent Director • Mr. Harinderjit Singh - Director • Ms. Samantha Wellington – Director • Mr. Derek H Williams - Director • Mr. Robert K Weiler - Director • Mr. William Corey West – Director* • Ms. Maria Smith – Director** • Mr. Sridhar Srinivasan - Independent Director** • Mr. Jayant Joshi – KMP@ • Mr. Onkarnath Banerjee – KMP# * resigned with effect from July 22, 2015 ** appointed with effect from July 23, 2015 @ relinquished with effect from May 31, 2015 # appointed as KMP with effect from June 1, 2015 V. Indebtedness The Company has not availed any loan during the year and is a debt-free company. VI. Remuneration of Directors and Key Managerial Personnel A. Remuneration to Managing Director, Whole-time Directors and / or Manager: (Amounts in ` thousand except number of RSUs) Sl. Particulars of Remuneration RSUs Amount No. Mr. Chaitanya Kamat, Managing Director & CEO 1. Gross salary (a) Salary as per provisions contained in Section 17(1) of the 32,788 Income-tax Act, 1961 (b) Value of perquisites u/s 17(2) Income-tax Act, 1961 52,847 (c) Profits in lieu of salary under Section 17(3) Income-tax Act, 1961 2. Stock Option (RSU) 25,000 − 3. Sweat Equity − − 4. Commission as % of profit − others, specify − 5. Others, please specify − Total (A) 85,635 Ceiling as per the Act (5% of the profits calculated under Section 198 766,713 of the Companies Act, 2013) Oracle Financial Services Software – Annual Report 2015-16


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    B. Remuneration to other directors: (Amounts in ` thousand) Sl. Particulars of Remuneration Name of Directors Total No. Amount S Derek H Harinderjit Maria Richard Robert Samantha Sridhar William Venkatachalam Williams Singh Smith** Jackson K Weiler Wellington Srinivasan** Corey West* 1. Independent Directors Fee for attending board − − − − − − − − − − / committee meetings Commission 3,000 − − − 2,302 − − 1,215 − 6,517 Others, please specify − − − − − − − − − − Total (1) 3,000 − − − 2,302 − − 1,215 − 6,517 2. Other Non-Executive Directors Fee for attending board − − − − − − − − − − / committee meetings Commission − − − − − − − − − − Others, please specify − − − − − − − − − − Total (2) − − − − − − − − − − Total (B)=(1+2) 3,000 − − − 2,302 − − 1,215 − 6,517 Total Managerial 105,880 Remuneration (A+B) Overall Ceiling as per the − − − − − − − − − 153,343 Act (1% of the profits calculated under Section 198 of the Companies Act, 2013) * resigned with effect from July 22, 2015 ** appointed with effect from July 23, 2015 C. Remuneration to Key Managerial Personnel other than MD / Manager / WTD (Amounts in ` thousand) Sl. Particulars of Remuneration Key Managerial Personnel Total No. Amount (`) Company CFO Secretary* 1. Gross salary (d) Salary as per provisions contained in Section 17(1) of the Income-tax 4,122 9,446 13,568 Act, 1961 (e) Value of perquisites u/s 17(2) Income-tax Act, 1961 108 18,210 18,318 (f) Profits in lieu of salary under Section 17(3) Income-tax Act, 1961 − − − 2. Stock Option − − − 3. Sweat Equity − − − 4. Commission - as % of profit − − − - others, specify − − − 5. Others, please specify − − − Total 4,230 27,656 31,886 * includes remuneration paid to Mr. Jayant Joshi (April 1, 2015 to May 31, 2015) - Company Secretary and Compliance Officer and to Mr. Onkarnath Banerjee (June 1, 2015 to March 31, 2016) - Company Secretary and Compliance Officer. In addition to the above, during the year 2015-16, 10,375 RSU’s (Company Secretary - 375, CFO - 10,000) were granted. VII. Penalties / Punishment / Compounding of Offences: There were no penalties / punishments / compounding of offences under any section of the Companies Act, 2013, against the Company or its Directors or any of its other officers in default, if any, during the financial year 2015-16. 27


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    Annexure 2 AOC - 2 Particulars of contracts / arrangements made with related parties [Pursuant to Clause (h) of Sub-section (3) of Section 134 of the Companies Act, 2013, and Rule 8(2) of the Companies (Accounts) Rules, 2014] This Form pertains to the disclosure of particulars of contracts / arrangements entered into by the Company with related parties referred to in Sub-section (1) of Section 188 of the Companies Act, 2013 including certain arm's length transactions under third proviso thereto. 1. Details of contracts or arrangements or transactions not at arm's length basis There were no contracts or arrangements or transactions entered into during the year ended March 31, 2016, which were not at arm's length basis. 2. Details of material contracts or arrangement or transactions at arm's length basis a. Name(s) of the related party and nature of relationship: Not applicable b. Nature of contracts / arrangements / transactions: Not applicable c. Duration of contracts / arrangements / transactions: Not applicable d. Salient terms of the contracts or arrangements or transactions including the value, if any: Not applicable e. Date(s) of approval by the Board, if any: Not applicable f. Amount paid as advances, if any: Not applicable The transactions with wholly owned subsidiaries are not included above since they are exempt under section 188(1) of the Act. for and on behalf of the Board of Directors of Oracle Financial Services Software Limited S Venkatachalam Mumbai Chairman July 18, 2016 DIN: 00257819 Oracle Financial Services Software – Annual Report 2015-16


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    Annexure 3 SECRETARIAL AUDIT REPORT Form No. MR-3 FOR THE FINANCIAL YEAR ENDED 31ST MARCH 2016 [Pursuant to section 204 (1) of the Companies Act, 2013 and rule No. 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014] To The Members ORACLE FINANCIAL SERVICES SOFTWARE LIMITED Oracle Park, Off. Western Express Highway Goregaon (East), Mumbai – 400 063 I have conducted the Secretarial Audit of the compliance of applicable statutory provisions and the adherence to good corporate practices by ORACLE FINANCIAL SERVICES SOFTWARE LIMITED having CIN: L72200MH1989PLC053666 (hereinafter called “the Company”). Secretarial Audit was conducted in a manner that provided me a reasonable basis for evaluating the corporate conducts/statutory compliances and expressing my opinion thereon. Based on my verification of the Company’s books, papers, minute books, forms and returns filed and other records maintained by the company and also the information provided by the Company, its officers, agents and authorized representatives during the conduct of secretarial audit, I hereby report that in my opinion, the Company has, during the audit period covering the financial year ended on 31st March, 2016 generally complied with the statutory provisions listed hereunder and also that the Company has proper Board processes and compliance mechanism in place to the extent, in the manner and subject to the reporting made hereinafter: I have examined the books, papers, minute books, forms and returns filed and other records maintained by the Company for the financial year ended 31st March, 2016 according to the provisions of: (i) The Companies Act, 2013 (the Act) and the rules made thereunder; (ii) The Securities Contracts (Regulation) Act, 1956 (‘SCRA’) and the rules made thereunder; (iii) The Depositories Act, 1996 and the Regulations and Bye-laws framed thereunder; (iv) Foreign Exchange Management Act, 1999 and the rules and regulations made thereunder to the extent of Foreign Direct Investment, Overseas Direct Investment; (v) The following Regulations and Guidelines prescribed under the Securities and Exchange Board of India Act, 1992 (‘SEBI Act’):- (a) The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011; (b) The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015; (c) The Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999; and (d) The Securities and Exchange Board of India (Registrar to an Issue and Share Transfer Agents) Regulations, 1993 regarding the Companies Act and dealing with client; (vi) Software Technology Parks of India rules and regulations. As per the explanations given to me in the representations made by the management and relied upon by me, during the period under review, provisions of the following regulations were not applicable to the Company: (i) Foreign Exchange Management Act, 1999 and the rules and regulations made thereunder to the extent of External Commercial Borrowings; (ii) The following Regulations and Guidelines prescribed under the Securities and Exchange Board of India Act, 1992 (‘SEBI Act’):- (a) The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009; (b) The Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008; (c) The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009; and (d) The Securities and Exchange Board of India (Buyback of Securities) Regulations, 1998. 29


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    I have also examined compliance with the applicable clauses of the following: (i) Secretarial Standards 1 & 2 issued by the Institute of Company Secretaries of India under the Companies Act, 2013. (ii) The Listing Agreement for Equity Shares entered into by the Company with Stock Exchange(s) for the period from 1st April, 2015 to 30th November, 2015 and The Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 for the period from 1st December, 2015 to 31st March, 2016. During the period under review the Company has complied with the provisions of the Act, Rules, Regulations, Guidelines, Standards, etc. mentioned above to this report except following: (1) the Composition of Board of Directors of the Company was not as per Section 149(4) of the Companies Act, 2013 and Clause 49IIA(2) of the Listing Agreement during the period from April 1, 2015 to 22nd July, 2015. (2) the Composition of Nomination and Remuneration Committee of the Company was not as per Section 178(1) of the Companies Act, 2013 and Clause 49IVA of the Listing Agreement during the period from April 1, 2015 to 22nd July, 2015. I further report that: The Board of Directors of the Company is duly constituted with proper balance of Executive Directors, Non – Executive Directors except Independent Directors (upto 22nd July, 2015). The changes in the composition of the Board of Directors that took place during the period under review were carried out in compliance with the provisions of the Act. Adequate notice is given to all directors to schedule the Board Meetings, agenda and detailed notes on agenda were generally sent at least seven days in advance and a system exists for seeking and obtaining further information and clarifications on the agenda items before the meeting and for meaningful participation at the meeting. Majority decision is carried through and as informed, there were no dissenting members’ views and hence not recorded as part of the minutes. I further report that as per the explanations given to me in the representations made by the management and relied upon by me there are adequate systems and processes in the company commensurate with the size and operations of the company to monitor and ensure compliance with applicable laws, rules, regulations and guidelines. As per the explanations given to me in the representations made by the management and relied upon by me, I further report that, during the audit period, except for the issue and allotment of equity shares to the employees of the Company under Employee Stock Option Plan (“ESOP”), there were no other specific events / actions in pursuance of the above referred laws, rules, regulations, guidelines, etc., having a major bearing on the Company's affairs. CS Prashant Diwan Practising Company Secretary FCS: 1403 CP: 1979 Date : July 18, 2016 Place : Mumbai This report is to be read with our letter of even date which is annexed as Annexure A and forms an integral part of this report. Oracle Financial Services Software – Annual Report 2015-16


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    Annexure “A” To The Members ORACLE FINANCIAL SERVICES SOFTWARE LIMITED Oracle Park, Off. Western Express Highway Goregaon (East), Mumbai – 400 063 My report of even date is to be read along with this letter. 1. Maintenance of secretarial record is the responsibility of the management of the company. My responsibility is to express an opinion on these secretarial records based on my audit. 2. I have followed the audit practices and processes as were appropriate to obtain reasonable assurance about the correctness of the contents of Secretarial records. The verification was done on test basis to ensure that correct facts are reflected in secretarial records. I believe that the processes and practices, I followed provide a reasonable basis for my opinion. 3. I have not verified the correctness and appropriateness of financial records and books of Accounts of the company. 4. Where ever required, I have obtained the Management representation about the compliance of laws, rules and regulations and happening of events etc. 5. The compliance of the provisions of Corporate, Specific and other applicable laws, rules, regulations, standards is the responsibility of management. My examination was limited to the verification of procedures on test basis. 6. The Secretarial Audit report is neither an assurance as to the future viability of the company nor of the efficacy or effectiveness with which the management has conducted the affairs of the company. CS Prashant Diwan Practising Company Secretary FCS: 1403 CP: 1979 Date : July 18, 2016 Place : Mumbai 31


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    Annexure 4 Annual Report on Corporate Social Responsibility Activities for Financial Year ended March 31, 2016 Pursuant to Section 135 of the Companies Act, 2013 read with Rule 8 of Companies (Corporate Social Responsibility) Rules, 2014 1. A brief outline of the company’s CSR policy, including overview of projects or programs proposed to be undertaken and a reference to the web-link to the CSR policy and projects or programs. Oracle Financial Services Software Limited (“Oracle”) is committed to using its resources to advance education, protect the environment, and enrich community life. Through a combination of grants, sponsorships, and volunteer support, Oracle works to improve the quality of life in communities where it does business. The Oracle Policy governing Corporate Social Responsibility (“CSR”) is in line with the regulation specified in section 135 and schedule VII of the Companies Act, 2013 (“the Act”). The policy is available on the Company's website at: http://www.oracle.com/us/industries/financial-services/ofss-social-responsibility-2437852.pdf CSR activities include, but are not limited to, the following: • Award cash grants to nonprofit organizations, nongovernmental organizations (NGOs), and other implementation partners, incorporated in India, with track records of at least three years. Grants will: ° advance education, especially science, technology, engineering and mathematics (STEM); ° protect the environment and wildlife; and ° enrich community life by addressing health, hunger, and a variety of other community needs. • Develop, fund and execute Oracle Volunteers projects. • Award in-kind grants of software, curriculum, training, and certification resources to educational institutions from the Oracle Academy. The Company will not make contributions to any political party or its affiliations. 2. The Composition of the CSR Committee: The CSR Committee comprises of following Members: Mr. Chaitanya Kamat Chairman of the Committee Mr. S Venkatachalam Member Ms. Samantha Wellington Member 3. Average net profit of the Company for last three financial years: The average net profit of the company as per Rule 2(c)(f) of Companies (Corporate Social Responsibility) Rules is ` 16,723,930,413. 4. Prescribed CSR Expenditure (two percent of the amount as in item 3 above): ` 334,478,608 5. Details of CSR spent during the financial year: (a) Total amount spent during the financial year: ` 248,465,116 (b) Amount unspent: ` 86,013,492 Oracle Financial Services Software – Annual Report 2015-16


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    (c) Manner in which the amount spent during the financial year: During the year ended March 2016, Oracle spent the CSR funds across 71 programs / projects through various NGOs and other organizations in three areas of its focus, namely Education, Environment and Community. The particulars are given below: Sr. Particulars Focus: Education Focus: Environment Focus: Community Total No. 1 CSR project or activity 32 projects / programs for 12 projects / 27 rural 71 projects/ identified. promoting a) education programs for development programs and employment enhancing promoting projects / programs through vocation skills, especially environmental for eradicating 71 NGO among children, women, sustainability, hunger, poverty partners elderly & differently abled ecological balance, and malnutrition, persons and b) gender protection of promoting equality, empowering flora and fauna, preventive health women, setting up homes animal welfare, care and sanitation and hostels for women and agro forestry, and making orphans; old age homes, conservation of available safe daycare centers and such natural resources drinking water. other facilities for senior and maintaining citizens and measures for quality of soil, air reducing inequalities faced and water. by socially and economically backwards groups. 2 Sector in which the project Promoting Education & Promoting Rural development is covered Gender Equality Environment and eradicating Sustainability poverty 3 Projects or programs Projects are implemented across several districts in multiple states and (Andhra Pradesh, (1) Local area or other Gujarat, Haryana, Karnataka, Maharashtra, Madhya Pradesh, New Delhi, Odisha, (2) Specify the State and Rajasthan, Tamil Nadu, Telangana, Uttarakhand and Uttar Pradesh) and 1 Union District where projects or territory (Puducherry), and some projects are Pan India Programs were undertaken 4 Amount outlay (Budget) 110,534,639 42,379,090 75,035,919 227,949,648 Project or Programs wise (`) 5 Amount spent on the 110,534,639 42,379,090 75,035,919 227,949,648 projects or Programs (`) (1) Direct expenditure 110,534,639 42,379,090 75,035,919 227,949,648 on projects or programs (`) (2) Overheads (`) 9,948,117 3,814,118 6,753,233 20,515,468 (Agency Fees for services) (Agency Fees for (Agency Fees for services) services) 6 Cumulative expenditure up 120,482,756 46,193,208 81,789,152 248,465,116 to the reporting period (`) 7 Amount spent: Direct or 120,482,756 46,193,208 81,789,152 248,465,116 through Implementing agency (`) Details of implementing agency: Charities Aid Foundation, a Trust registered under Indian Trusts Act 1882 and having registered office at Plot/Site No. 2, First Floor, Sector-C (OFC Pocket), Nelson Mandela Marg, Vasant Kunj, New Delhi 110070. 6. In case the company has failed to spend the two per cent, of the average net profit of the last three financial years or any part thereof, the company shall provide the reasons for not spending the amount in its Board report. As per the requirements of Section 135 of the Companies Act, 2013 the Company was required to spend an amount of ` 334.48 million for financial year 2015-16 based on the average net profits of the three immediately preceding financial years. The Company has contributed an amount of ` 248.46 million during this financial year. The Company considers it prudent to build-up its CSR spending thoughtfully and carefully to help ensure that it engages only with legitimate NGOs and is in compliance with all relevant regulations. The Company has taken a progressive approach; last year, it spent 36% of the required amount; this year’s proposed spend is 74% of the required amount. The company expects to achieve 100% i.e. the full 2% CSR spend, by FY17. 7. A responsibility statement of the CSR Committee that the implementation and monitoring of CSR Policy, is in compliance with CSR objectives and Policy of the Company. We hereby confirm that the implementation and monitoring of the CSR Policy is in compliance with the CSR objectives and Policy of the Company. Chaitanya Kamat S Venkatachalam Chairman of the Committee Member of the Committee Place: Mumbai Date: May 11, 2016 33


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    Corporate governance report 35


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    Corporate governance report The detailed report on Corporate Governance of Oracle Financial Services Software Limited (“the Company”) for the financial year 2015-16 as per Schedule V of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 herein after referred to as “Listing Regulations”. 1. Company’s philosophy on code of governance The Company believes in adopting and adhering to globally recognized corporate governance practices and continuously benchmarking itself against such practices. The Company understands and respects its fiduciary role and responsibility to its Members and strives to meet their expectations. 2. Board of Directors 2.1 Composition of the Board The composition of the Board of Directors of the Company (“the Board”), their attendance at the Board Meetings during the year, attendance at the last Annual General Meeting, and the number of directorships and board committee membership / chairmanship held as on March 31, 2016, was as under: Name of the Director Board Meetings Whether attended last Number of Number of Committee attended during AGM held on Directorships in positions held in other the year September 11, 2015 other Companies Companies Chairmanship Membership Non-Executive, Independent Directors Mr. S Venkatachalam, Chairman (DIN: 00257819) 6/6 Present 3 – 1 Mr. Richard Jackson (DIN: 06447687) 6/6 Present 5 – – Mr. Sridhar Srinivasan (w.e.f. July 23, 2015) (DIN: 07240718) 5/5 Present 1 – 1 Non-Executive, Non-Independent Directors Mr. Derek H Williams (DIN: 01266532) 6/6 Present 1 – – Mr. Harinderjit Singh (DIN: 06628566) 2/6 Present 1 – – Ms. Maria Smith (w.e.f. July 23, 2015) (DIN: 07182337) 4/5 Absent 16 – – Mr. Robert K Weiler (DIN: 01531399) 4/6 Absent – – – Ms. Samantha Wellington (DIN: 02054439) 3/6 Present 47 – – Executive Director Mr. Chaitanya Kamat, Managing Director & CEO (DIN: 00969094) 6/6 Present – – – Oracle Financial Services Software – Annual Report 2015-16


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    Notes: 1. The Chairman of the Board of Directors is a Non-Executive and an Independent Director and the Composition of Board is in conformity with the Listing Regulations. 2. Pursuant to Regulation 26 of Listing Regulations, none of the directors on the Board, hold directorships in more than ten public companies or acts as a Chairman of more than five committees across all the Indian public companies in which he / she is a Director. For the purpose of determining the number of membership / chairmanship of the Committees of the Board of other Companies, only the Audit Committee and the Stakeholders’ Relationship Committee of Indian Public Companies are considered. None of the Directors are related inter se. 3. Independent Directors are Non-Executive Directors as defined under Section 149 of the Companies Act, 2013 (“Act”). All the Independent Directors have confirmed that they meet criteria of independence and the maximum tenure of Independent Directors is in compliance with the Act. 4. During the year, the members at the Twenty Sixth Annual General Meeting held on September 11, 2015 approved the following appointments on the Board of Directors: a) Ms. Maria Smith as a Director of the Company. b) Mr. Sridhar Srinivasan as an Independent Director to hold office for five consecutive years for a term up to March 31, 2020. 5. The familiarization program imparted to the Independent Directors during the year are available on the website of the Company at: http://www.oracle.com/us/industries/financial-services/financial-familarization-program-2547373.pdf 6. None of the Non-Executive Directors hold any shares of the Company except Mr. S Venkatachalam who holds 5,000 shares of the Company as on March 31, 2016. 2.2 Board meetings held in 2015-16 The Company holds Board Meetings at regular intervals. The maximum gap between any two meetings of the Board has been less than 120 days. All material information was circulated to all the Directors before the meeting or placed at the meeting, including minimum information required to be made available to the Board as prescribed under Part A of Schedule II of sub-regulation 7 of regulation 17 of the Listing Regulations. During the Financial Year 2015-16, six Board Meetings were held on the following dates: May 15, 2015, July 23, 2015, August 6, 2015, September 11, 2015, November 5, 2015 and February 10, 2016. Necessary quorum was present for all the meetings. During the year, a separate meeting of Independent Directors was held on February 10, 2016 and all the Independent Directors of the Company participated in the said meeting. 2.3 Details of other directorships Details of the directorships of the Company’s Directors in other companies as on March 31, 2016 were as under: Name of the Director Other Directorships Mr. S Venkatachalam Equifax Credit Information Services Private Limited Canara Robeco Asset Management Sam Foundation for Eco Friendly Environment Company Limited Mr. Derek H Williams Oracle Corporation Japan Mr. Harinderjit Singh Children’s Discovery Museum, San Jose California Ms. Maria Smith Eontec Limited OCAPAC Research Partner J.D. Edwards Europe Limited Oracle CAPAC Services Micros Fidelio Group Holdings Limited Oracle Corporation Australia Pty Limited Micros Fidelio Holdings Limited Oracle EMEA Holdings Limited OCAPAC Distributor Partner Oracle EMEA Limited OCAPAC Hardware Partner Oracle Technology Company OCAPAC Holding Company Siebel Systems Ireland Holdings Limited OCAPAC Research Company Oracle Nederland B.V. Mr. Richard Jackson Novoview Ltd. Occidental Seguros Ltd. ageas SA/NV Medis Ltd. Great Britain China Centre Ms. Samantha Wellington AmberPoint Technology India Private Limited Micros Fidelio Group Holdings Limited BitzerMobile India Private Limited Micros Fidelio Holdings Limited FatWire Software India Private Limited Micros Fidelio (Thailand) Co., Ltd Fidelio India Private Limited OCAPAC Distributor Partner GoAhead Software India Private Limited OCAPAC Hardware Partner 37


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    Name of the Director Other Directorships GoldenGate Technologies South Asia Private Limited OCAPAC Research Company J.D. Edwards Software India Private Limited OCAPAC Research Partner Logical Apps Solutions Pvt. Ltd. Oracle Corporation Japan PeopleSoft India Private Limited Oracle Corporation (Thailand) Company Limited Phase Forward Software Services India Private Limited Oracle Hrvatska d.o.o. ProfitLogic Software Private Limited Oracle Hungary Kft. Relsys (India) Private Limited Oracle Romania SRL Responsys Business Solutions India Private Limited Oracle Senegal SARL Siebel Systems Software (India) Private Limited Oracle Software (Nigeria) Limited Sophoi Technologies Private Limited Oracle Software d.o.o. Ljubljana Sunday Bazar Internet Sales Private Limited Oracle Srbija & Crna Gora d.o.o. Beograd Tekelec Systems India Private Limited Oracle (QFC) Systems LLC Waban Software Private Limited Oracle Technology Company BEA Systems (China) Co., Ltd. Oracle Technology Systems (Ghana) Limited Eontec Limited Oracle Technology Systems (Kenya) Limited Hyperion Solutions (China) Ltd. PeopleSoft China Holding Corporation J.D. Edwards Europe Limited Siebel Systems Ireland Holdings Limited OCAPAC Holding Company Sistemas Oracle de Chile, S.A. OCAPAC Mauritius Holding Company Limited Mr. Sridhar Srinivasan India Factoring and Finance Solutions Private Limited All Directorships of Mr. Derek H Williams, Mr. Harinderjit Singh, Ms. Maria Smith and Mr. Richard Jackson are in foreign companies. Majority of Directorships of Ms. Samantha Wellington are in foreign companies. 2.4 Compliance with the code of conduct: The Company has adopted the “Code of Ethics and Business Conduct” which sets forth the standards of ethics and business conduct. Further, all the Directors and the Senior Managerial Personnel of the Company confirmed compliance with the Code. The code is available on the website of the Company at: http://www.oracle.com/us/corporate/careers/diversity/038400.pdf 3. Audit committee 3.1 Primary objectives and powers of the audit Committee The primary objective of Audit Committee is to monitor and provide effective supervision of the management’s financial reporting process and to ensure accurate, timely and proper disclosures and transparency, integrity and quality of financial reporting. The powers of the Audit Committee include the following: 1. To investigate any activity within its terms of reference. 2. To seek information from any employee. 3. To obtain outside legal or other professional advice. 4. To secure attendance of outsiders with relevant expertise, if it considers necessary. 5. To investigate into any matter within the powers conferred by the Board. 3.2 Broad terms of reference The terms of reference of the Audit Committee are as follows: 1. Oversight of the Company’s financial reporting process and the disclosure of its financial information to ensure that the financial statement is correct, sufficient and credible; 2. Recommending to the Board, the appointment, re-appointment and, if required, the replacement or removal of the statutory auditor, the fixation of remuneration, including audit fees and terms of appointment of auditors of the company; 3. Approval of payment to statutory auditors for any other services rendered by the statutory auditors; 4. Reviewing, with the management, the annual financial statements and the auditors’ report thereon before submission to the Board for approval, with particular reference to: a. Matters required to be included in the Director’s Responsibility Statement to be included in the Board’s report in terms of Clause (c) of sub-section 3 of Section 134 of the Companies Act, 2013 Oracle Financial Services Software – Annual Report 2015-16


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    b. Changes, if any, in accounting policies and practices and reasons for the same c. Major accounting entries involving estimates based on the exercise of judgment by management d. Significant adjustments made in the financial statements arising out of audit findings e. Compliance with listing and other legal requirements relating to financial statements f. Disclosure of any related party transactions g. Modified opinion in the draft audit report 5. Reviewing, with the management, the quarterly financial statements before submission to the Board for approval; 6. Reviewing, with the management, the statement of uses / application of funds raised through an issue (public issue, rights issue, preferential issue, etc.), the statement of funds utilized for purposes other than those stated in the offer document / prospectus / notice and the report submitted by the monitoring agency monitoring the utilization of proceeds of a public or rights issue, and making appropriate recommendations to the Board to take up steps in this matter; 7. Review and monitor the auditor’s independence and performance, and effectiveness of audit process; 8. Approval or any subsequent modification of transactions of the company with related parties; 9. Scrutiny of inter-corporate loans and investments; 10. Valuation of undertakings or assets of the company, wherever it is necessary; 11. Evaluation of internal financial controls and risk management systems; 12. Reviewing, with the management, performance of statutory and internal auditors, adequacy of the internal control systems; 13. Reviewing the adequacy of internal audit function, if any, including the structure of the internal audit department, staffing and seniority of the official heading the department, reporting structure coverage and frequency of internal audit; 14. Discussion with internal auditors any significant findings and follow up there on; 15. Reviewing the findings of any internal investigations by the internal auditors into matters where there is suspected fraud or irregularity or a failure of internal control systems of a material nature and reporting the matter to the board; 16. Discussion with statutory auditors before the audit commences, about the nature and scope of audit as well as post-audit discussion to ascertain any area of concern; 17. To look into the reasons for substantial defaults in the payment to the depositors, debenture holders, shareholders (in case of non-payment of declared dividends) and creditors; 18. To review the functioning of the Whistle Blower mechanism; 19. Approval of appointment of CFO (i.e., the whole-time Finance Director or any other person heading the finance function or discharging that function) after assessing the qualifications, experience & background, etc. of the candidate; 20. Monitoring the end use of funds raised through public offers and related matters; 21. Review of following information: a. Management discussion and analysis of financial condition and results of operations; b. Statement of significant related party transactions (as defined by the Audit Committee), submitted by management; c. Management letters / letters of internal control weaknesses issued by the statutory auditors; d. Internal audit reports relating to internal control weaknesses; and e. The appointment, removal and terms of remuneration of the Chief internal auditor; and such other matters as may be prescribed and applicable from time to time. 3.3 Composition, meetings and attendance of the committee During the financial year 2015-16, five meetings of the Committee were held on May 14, 2015, July 23, 2015, August 6, 2015, November 5, 2015 and February 10, 2016. 39


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    The details of the composition of the Committee and their attendance at Committee meetings as on March 31, 2016 are as under: Name of the Member Number of meetings attended Mr. Richard Jackson Chairman, Non-Executive, Independent Director 5/5 Mr. S Venkatachalam Member, Non-Executive, Independent Director 5/5 Ms. Maria Smith (w.e.f. July 23, 2015) Member, Non-Executive, Non-Independent Director 2/3 Mr. William Corey West (upto the close of business hours of July 22, 2015) Member, Non-Executive, Non-Independent Director 1/1 The Company Secretary acts as the Secretary to the Audit Committee meetings. The Managing Director, CEO, CFO, CAO, Head of Statutory Auditors, Internal Auditors and legal counsel are permanent invitees to the meetings of the Audit Committee. The Chairman of the Committee was present at the Annual General Meeting held on September 11, 2015 to address the shareholders queries. 4. Nomination and Remuneration Committee 4.1 Brief description of terms of reference The terms of reference of Nomination and Remuneration Committee (“NRC”) are as follows: 1. To formulate the criteria for determining qualifications, positive attributes and independence of a director and recommend to the Board a policy, relating to the remuneration for the directors, key managerial personnel and other employees; 2. To decide the remuneration payable to the directors and key managerial personnel; 3. To determine any profit linked, or otherwise, bonus policies (by whatever name called) and to decide on the amount of bonus payable to Directors and Key Managerial Personnel of the Company; 4. To administer and deal with all matters concerning the present and future Employee Stock Option Schemes and / or Employee Stock Purchase Scheme(s) of the Company, if any, by whatever name called, and to review performance criteria, set norms for considering allocation of stock options and grant stock options to the eligible Directors and employees of the Company and its subsidiary companies from time to time; 5. To formulate criteria for evaluation of Independent Directors and the Board; 6. To devise a policy on Board diversity; 7. To identify persons who are qualified to become directors and who may be appointed in senior management in accordance with the criteria laid down, recommend to the Board their appointment and removal and to carry out evaluation of every director’s performance, and; 8. To appoint any personnel of the Company and to formulate a sub-committee to act on behalf of the NRC; 9. Performance Evaluation: The Committee sets criteria and conducts the performance evaluation of directors covering the areas relevant to their functioning as Independent Directors, non-independent directors and overall board. 4.2 Composition, meetings and attendance of the committee During the financial year 2015-16, two meetings of the Committee were held on September 11, 2015 and November 5, 2015. In addition to that, business was dealt with by passing circular resolutions. The details of the composition of the Committee and their attendance at Committee meetings as on March 31, 2016 are as under: Name of the Member Number of meetings attended Mr. Richard Jackson Chairman, Non-Executive, Independent Director 2/2 Mr. Harinderjit Singh Member, Non-Executive, Non-Independent Director 1/2 Mr. Sridhar Srinivasan Member, Non-Executive, Independent Director 2/2 (w.e.f. July 23, 2015) The Chairman of the Committee was present at the Annual General Meeting held on September 11, 2015. 4.3 Nomination and remuneration policy The Nomination and Remuneration Committee determines and recommends to the Board the compensation payable to the Directors and Key Managerial Personnel of the Company. The limit for the commission to be paid to the Board Members and Oracle Financial Services Software – Annual Report 2015-16


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    the remuneration payable to the Managing Director & CEO of the Company are approved by the Members of the Company. The annual compensation including bonus of the Executive and Non-Executive Directors is approved by the Nomination and Remuneration Committee, within the parameters set by the Members of the Company. The Committee reviews the norms for ESOP allocation and approves the grant of the options to eligible employees. The criteria for payment of commission to the Non-Executive Directors include a base commission plus incremental commission depending on the number and type of committees where they are members or chairpersons. 4.4 Details of remuneration paid to the directors during the financial year 2015-16: (Amounts in ` thousand, except number of ESOPs) Name of the Director RSUs granted Salary Contribution to Commission paid Total Amount under ESOPs Provident Fund paid during the year and other funds Executive Director Mr. Chaitanya Kamat* 25,000 31,717 1,779 NA 33,496 Non-executive independent directors Mr. S Venkatachalam 3,000 3,000 Mr. Richard Jackson 2,302 2,302 Mr. Sridhar Srinivasan 1,215 1,215 * Excluding perquisite on ESOP. The Company accrues for gratuity benefit, compensated absences and bonus for all employees as a whole. It is not possible to ascertain the provision for individual director and hence the same has not been disclosed above. The Company discloses such benefits on cash basis. During the financial year ended March 31, 2016, the Nomination and Remuneration Committee granted 37,175 Stock Options and 153,189 Restricted Stock Units (RSUs) under OFSS Stock Plan 2014 to the eligible employees including Directors of the Company and its Subsidiaries as under: Date of Grant No. of Options / RSUs granted Exercise price (`) November 5, 2015 (Stock Options) 37,175 3,986.90 November 5, 2015 (RSUs) 153,189 5.00 The terms of Employee Stock Options / RSUs granted to the Directors were as under: Name of the Director Scheme@ Options/RSUs Options/ Options /RSUs Exercise Expiry Date outstanding RSUs outstanding as price (`) as at April 1, exercised at March 31, 2015 during the year 2016 Mr. S Venkatachalam 2011 6,000 – 6,000 1,929.95 December 19, 2021 Mr. Chaitanya Kamat 2002 24,000 12,000 12,000 2,333.45 October 24, 2020 2011 18,000 6,000 12,000 1,929.95 December 19, 2021 2011 80,000 20,000 60,000 3,126.85 February 4, 2023 2011 80,000 – 80,000 3,076.85 September 12, 2023 Plan 2014 25,000 – 25,000 5.00 March 29, 2025 (RSUs) Plan 2014 – – 25,000 5.00 November 4, 2025 (RSUs) @ Options under Scheme 2002 and Scheme 2011 were issued at prevailing market price of shares on the respective dates of grant. These options vest over a period of 5 years from the date of grant and are subject to continued employment/directorship with the Company. The Stock options under OFSS Stock Plan 2014 were issued at prevailing market price of shares on the date of grant and the RSUs were issued at `5/- each. The options/RSUs granted under OFSS Stock Plan 2014 vest over a period of 4 years from the date of grant and are subject to continued employment/directorship with the Company. As on March 31, 2016 none of the Directors of the Company held any equity shares of the Company, except Mr. S Venkatachalam and Mr. Chaitanya Kamat who hold 5,000 equity shares and 8,085 equity shares of the Company, respectively. 41


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    5. Stakeholders’ Relationship Committee The scope of the Stakeholders’ Relationship Committee is to review and address the grievances of the security holders in respect of complaints relating to share-transfers, transmissions, dematerialization and rematerialization of shares including complaints related to, non-receipt of annual report and non-receipt of declared dividends. During the financial year 2015-16, two meetings of the Committee were held on May 14, 2015 and February 10, 2016. The details of the composition of the Committee and their attendance at Committee meetings as on March 31, 2016 are as under: Name of the Member Number of meetings attended Mr. S Venkatachalam Chairman, Non-Executive, Independent Director 2/2 Mr. Chaitanya Kamat Member, Executive, Non-Independent Director 2/2 Mr. Makarand Padalkar Member, Chief Financial Officer 2/2 Details of shareholders’ complaints received, resolved and outstanding during the financial year 2015-16. Particulars No. of Complaints Complaints outstanding on April 1, 2015 Nil Complaints received during the financial year ended March 31, 2016 19 Complaints resolved during the financial year ended March 31, 2016 19 Complaints outstanding on March 31, 2016 Nil Number of pending share transfers as on March 31, 2016 – Nil Mr. Onkarnath Banerjee, the Company Secretary is designated as the Compliance Officer who oversees the redressal of the investors’ grievances. 6. Transfer Committee The scope of Transfer Committee is to consider and approve requests for transfer, transmission, rematerialization of shares and other investor related matters. The meetings are held as needed, based on such requests being received from the shareholders. The composition of Transfer Committee as on March 31, 2016 is as under: Name of the Member Mr. S Venkatachalam Chairman, Non-Executive, Independent Director Mr. Makarand Padalkar Member, Chief Financial Officer 7. ESOP Allotment Committee The scope of ESOP Allotment Committee is to consider and approve requests for allotment of shares on exercise of stock options by eligible employees. During the financial year 2015-16, eleven meetings of the Committee were held on April 22, 2015, May 27, 2015, July 1, 2015, August 5, 2015, August 28, 2015, September 3, 2015, October 14, 2015, November 18, 2015, December 23, 2015, January 27, 2016 and March 2, 2016. The details of the composition of the Committee and their attendance at Committee meetings as on March 31, 2016 are as under: Name of the Member Number of meetings attended Mr. S Venkatachalam* Chairman, Non-Executive, Independent Director 11/11 Mr. Chaitanya Kamat Member, Managing Director and Chief Executive Officer 11/11 Mr. Sridhar Srinivasan** Member, Non-Executive, Independent Director 4/4 Mr. Makarand Padalkar Member, Chief Financial Officer 11/11 * Mr. S Venkatachalam was appointed as a Chairman with effect from November 5, 2015. ** Mr. Sridhar Srinivasan was appointed as a Member with effect from November 5, 2015. 8. Risk Management Committee The scope of Risk Management Committee is to formulate Risk Management Policy of the Company which will identify elements of risk, if any, which in the opinion of the Board might threaten the existence of the Company. Audit Committee and Board can refer certain matters to the Risk management Committee. Oracle Financial Services Software – Annual Report 2015-16


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    The composition of Committee as on March 31, 2016 is as under: Name of the Member Ms. Samantha Wellington Chairman, Non-Executive, Non-Independent Director Mr. Chaitanya Kamat Member, Managing Director & Chief Executive Officer Mr. Derek H Williams Member, Non-Executive, Non-Independent Director Mr. Makarand Padalkar Member, Chief Financial Officer Mr. Jayant Joshi Member, Corporate Compliance The Committee invites the representatives of internal auditor and other stakeholders / executives as needed for the meetings. 9. Corporate social responsibility committee The scope of Corporate Social Responsibility Committee is to prepare and recommend to the Board the Corporate Social Responsibility Policy (“CSR Policy”), recommend CSR activities and the amount the Company should spend on CSR activities, monitor the implementation of CSR Policy and activities from time to time, ensure compliance with all matters relating to CSR and to provide updates to the Board. During the financial year 2015-16, one meeting of the Committee was held on September 11, 2015 In addition to that, business was dealt with by passing circular resolutions. The details of the composition of the Committee and their attendance at Committee meetings as on March 31, 2016 are as under: Name of the Member Number of meeting attended Mr. Chaitanya Kamat Chairman, Managing Director & Chief Executive Officer 1/1 Mr. S Venkatachalam Member, Non-Executive, Independent Director 1/1 Ms. Samantha Wellington Member, Non-Executive, Non-Independent Director 1/1 10. Other committees The Company has a Business Responsibility Committee to oversee matters concerning the Business Responsibility Policy implementation and guidance and to decide on any matter or doubt with regard to the applicability, interpretation, operation and implementation of the BR policy. The Managing Director and Chief Executive Officer acts as the Chairman of the Committee and the other members are Chief Financial Officer, Chief Accounting Officer, Vice President and head HR, Legal Counsel and Compliance and Ethics Officer, Vice President Business Operations and Company Secretary & Compliance Officer. 11. Company secretary and compliance officer Company Secretary and Compliance Officer Mr. Onkarnath Banerjee Address Oracle Financial Services Software Limited Oracle Park Off Western Express Highway, Goregaon (East) Mumbai 400063, Maharashtra, India Tel. 91 22 6718 3000 Fax 91 22 6718 4604 Email onkarnath.banerjee@oracle.com 12. General body meetings Location, date and time where last three Annual General Meetings were held: Financial Year Venue Day Date Time 2014-15 The Westin Garden City Friday September 11, 2015 2.30 p.m. International Business Park Oberoi Garden City, Goregaon (East) Mumbai 400063 2013-14 The Westin Garden City Friday September 12, 2014 2.30 p.m. International Business Park Oberoi Garden City, Goregaon (East) Mumbai 400063 2012-13 The Leela Kempinski Wednesday August 14, 2013 3.00 p.m. Sahar, Andheri (East), Mumbai 400059 – No Special Resolutions were passed in AGMs during the last three years. – There was no Extra-Ordinary General Meeting held during the last three Financial Years. – There were no matter requiring approval of the Members through Postal Ballot during the financial year ended March 31, 2016. – No special resolution is currently proposed to be conducted through postal ballot. 43


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    13. Means of communication The Company from time to time and as may be required, communicates with its shareholders through multiple channels of communications such as dissemination of information on the on-line portal of the Stock Exchanges, press releases, the Annual Reports and uploading relevant information on its website. The Company’s quarterly financial results, press releases, annual reports and other relevant corporate documents are placed on the Company’s website www.oracle.com/financialservices and the same can be downloaded. The quarterly and annual results of the Company were published in widely circulated English and Marathi newspapers, such as Business Standard and Sakal. The Company discloses to the Stock Exchanges, all the information required to be disclosed under Regulation 30 read with Part A of Schedule III of the Listing Regulations including material information having a baring effect on the performance/ operations of the listed entity or other price sensitive information. The Company has formulated and adopted a “Policy of Determination of Material Events/Information” which sets out the classes and types of material events or information which requires disclosure to be made to the stock exchanges. The policy has been disclosed on the Company’s website at: http://www.oracle.com/us/industries/financial-services/policy-determination-events-2889567.pdf All the information is filed electronically on BSEs online portal – BSE Listing Center and on NSE Electronic Application Processing System (NEAPS), the online portal of National Stock Exchange of India Limited. All the disclosure made to the stock exchanges are also available on the Company’s website www.oracle.com/financialservices under the heading “Stock Exchange Intimations” Securities and Exchange Board of India (SEBI) introduced a centralized web based SEBI Complaints Redress System (SCORES) for all Listed Companies. The Company has been addressing the complaints, uploading Action Taken Reports (ATRs) and monitoring its current status on website - http://scores.gov.in/Admin As per the Circular issued by Ministry of Corporate Affairs, the Company has filed its Balance Sheet and Profit and Loss Account in extensible Business Reporting Language (XBRL), for the financial year ended March 31, 2015. As a part of Green Initiative in Corporate Governance, the Ministry of Corporate Affairs vide its Circular No. 17/2011 dated April 21, 2011 and Circular No. 18/2011 dated April 29, 2011 and pursuant to Section 101 and Section 136 and other applicable provisions of the Companies Act, 2013, read with relevant rules framed thereunder, Companies can serve Annual Reports and other communications through electronic mode to those members of the company who have registered their email address either with the Company or with the Depository. The Securities and Exchange Board of India (SEBI) has also permitted listed entities to supply soft copies of full annual reports to all those shareholders who have registered their email addresses for the purpose under Regulation 36 of the Listing Regulations. In case there is any change in your registered email address, please update the same with Company/Depository. The Company has since been annually sending communications to the incremental Members of the Company seeking their preference for receiving corporate documents and has issued/dispatched Annual Reports accordingly. 14. General shareholder information 14.1 Annual General Meeting Day, Date, Time and Venue Wednesday, September 7, 2016 at 2.30 p.m. The Westin Mumbai Garden City International Business Park, Oberoi Garden City, Goregaon (East), Mumbai 400063 Financial Year April 1, 2015 to March 31, 2016 Date of Book Closure Thursday, September 1, 2016 to Wednesday, September 7, 2016 (both days inclusive) Dividend Payment Date On or before Thursday, October 6, 2016 14.2 Listing details Name and Address of the Stock Exchange Stock Code BSE Limited (BSE) 532466 Floor 25, Phiroze Jeejeebhoy Towers, Dalal Street, Mumbai - 400 001 National Stock Exchange of India Limited (NSE) OFSS Exchange Plaza, Bandra-Kurla Complex, Bandra (East), Mumbai - 400 051 The annual listing fees for the financial year 2015-16 have been paid to both the exchanges. Oracle Financial Services Software – Annual Report 2015-16


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    14.3 Registrar and transfer agents Link Intime India Private Limited (formerly Intime Spectrum Registry Limited) is the Registrar and Transfer Agents of the Company (“the RTA”) and their contact details are: Name Link Intime India Private Limited Address C-13, Pannalal Silk Mills Compound, L.B.S. Marg, Bhandup (West), Mumbai 400078 Tel. +91-22-2594 6970 Fax +91-22-2594 6969 Contact Person Mr. Mahesh Masurkar, Team Leader – Investor Relation Registry Email rnt.helpdesk@linkintime.co.in 14.4 Physical share certificate transfer system The RTA, on receipt of transfer deed along with share certificate(s) scrutinizes the same and verifies signature(s) of transferor(s) on the transfer deed with specimen signature(s) registered with the Company. A list of such transfers is prepared and checked thoroughly and a transfer register is prepared accordingly. The transfer register is placed before the Transfer Committee Meeting for approval, which meets as and when required. During the last financial year, there was no request received for transfer of shares in physical mode. 14.5 Reconciliation of share capital audit: A qualified Practicing Chartered Accountant has carried out reconciliation of Share Capital Audit for every quarter to reconcile the share capital held with depositories and in physical form with the issued / listed capital. The audit confirms that the total issued / paid-up / listed share capital is in agreement with the aggregate total number of shares in physical form and the total number of shares in dematerialized form held with NSDL and CDSL. 15. Market price data Monthly high, low and volume of the shares of the Company traded on the stock exchanges from April 1, 2015 to March 31, 2016 are given below: Month and Year BSE NSE High (`) Low (`) Volume of Shares High (`) Low (`) Volume of Shares April 2015 3,520.00 3,139.20 91,589 3,517.00 3,136.10 740,799 May 2015 3,675.00 3,260.00 1,096,007 3,675.00 3,256.00 1,620,786 June 2015 3,848.00 3,400.00 73,646 3,830.00 3,420.00 540,924 July 2015 4,065.00 3,774.40 64,824 4,063.30 3,777.00 651,943 August 2015 4,446.60 3,894.70 113,467 4,444.00 3,900.00 1,350,213 September 2015 4,200.85 3,648.85 69,283 4,205.00 3,641.35 1,019,038 October 2015 4,020.85 3,830.10 83,954 4,085.90 3,827.00 674,544 November 2015 4,092.00 3,812.00 52,672 4,070.00 3,802.80 721,527 December 2015 3,925.35 3,660.00 35,119 3,922.10 3,660.00 779,812 January 2016 3,834.00 3,460.00 24,422 3,839.05 3,445.20 472,421 February 2016 3,790.00 3,106.00 37,166 3,790.00 3,100.00 609,329 March 2016 3,614.15 3,174.50 161,060 3,610.00 3,192.10 595,777 45


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    Relative movement chart The chart below gives the comparison of your Company’s share price movement on NSE vis-à-vis the movement of NIFTY 50 for the year 2015-16. 8,900 4,400 8,400 4,075 OFSSL Price (`) NIFTY 50 7,900 3,750 7,400 3,425 6,900 3,100 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 OFSSL Price NIFTY 50 The chart below gives the comparison of your Company’s share price movement on NSE vis-à-vis the movement of NIFTY 50 since the listing of the share on NSE. 1,800 1,700 1,600 1,500 1,400 1,300 Relative movement 1,200 1,100 1,000 900 800 700 600 500 400 300 200 100 0 Jul 2002 Jul 2003 Jul 2004 Jul 2005 Jul 2006 Jul 2007 Jul 2008 Jul 2009 Jul 2010 Jul 2011 Jul 2012 Jul 2013 Jul 2014 Jul 2015 Jul 2016 OFSSL Price NIFTY 50 Oracle Financial Services Software – Annual Report 2015-16


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    16. Distribution of shareholding as on March 31, 2016 Paid-up shares in capital Number of % to total No. of Shares Paid-up value (Face value % of Total no. (in `) Shareholders shareholders `5 each) of shares Upto 2,500 19,574 92.90 778,721 3,893,605 0.92 2,501 to 5000 435 2.07 329,727 1,648,635 0.39 5,001 to 10,000 324 1.54 481,373 2,406,865 0.57 10,001 to 20,000 291 1.38 866,441 4,332,205 1.02 20,001 to 30,000 102 0.48 507,913 2,539,565 0.60 30,001 to 40,000 68 0.32 475,922 2,379,610 0.56 40,001 to 50,000 44 0.21 401,256 2,006,280 0.47 50,001 to 100,000 107 0.50 1,516,508 7,582,540 1.79 100,001 & Above 124 0.60 79,498,317 397,491,585 94.00 TOTAL 21,069 100.00 84,856,178 424,280,890 100.00 17. Shareholding pattern as on March 31, 2016 Category of shareholders Number of shares % Promoters: Oracle Global (Mauritius) Limited 63,051,197 74.30 Mutual Funds / UTI 3,332,768 3.93 Financial Institutions / Banks 3,889 0.00 Central Government 4,000 0.00 Foreign Institutional Investors 8,178,638 9.64 Bodies Corporate 1,033,910 1.22 Individuals- i. Holding nominal share capital up to ` 2 lakh 4,500,532 5.30 ii. Holding nominal share capital in excess of ` 2 lakh 392,548 0.46 NRI (Repatriate) 146,537 0.17 NRI (Non-Repatriate) 691,867 0.82 Foreign Mutual Fund 1,818,747 2.14 Clearing Member 23,448 0.03 Directors / Relatives 14,085 0.02 HUF 37,350 0.04 Market Maker 4,540 0.01 Foreign Portfolio Investor (Corporate) 1,448,694 1.71 Trusts 169,168 0.20 Foreign Nationals 4,260 0.01 Total 84,856,178 100.00 During the financial year 2015-16: 1. The Company issued and allotted 241,319 equity shares to eligible employees who exercised their ESOPs during the year. 2. The Company has not issued any ADR / GDR / Warrants / other convertible instruments except ESOPs. 3. The promoters have not pledged any of the shares held in the Company. 18. Dematerialization of shares and liquidity The shares of the Company are tradeable under compulsory demat mode. Under the Depository System, the International Securities Identification Number (ISIN) allotted to the Company’s shares is INE881D01027. As on March 31, 2016, 99.44% of the shares of the Company were in electronic form and 99.58% of the shareholders held shares in electronic form. 19. Disclosures a. All the relevant information in respect of materially significant related party transactions, i.e., transactions of the Company of material nature with its promoters, directors or management or their relatives, subsidiaries of the Company, etc. has been disclosed in the respective financial statements presented in the Annual Report. The Company did not undertake any transaction with any related party having potential conflict with the interest of the Company at large. The Related Party Transactions policy as approved by the Board is uploaded on the Company’s website at: http://www.oracle.com/us/industries/financial-services/ofss-party-transactions-policy-2288144.pdf 47


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    b. The Company has complied with statutory compliances and no penalty or stricture is imposed on the Company by the Stock Exchanges or Securities and Exchange Board of India (SEBI) or any other statutory authority on any matter related to the capital markets during the last three years. c. The Company has a Whistle Blower mechanism which provides adequate safeguards to employees who wish to raise concerns about violations of the Code of Ethics and Business Conduct, incorrect or misrepresentation of any financial statements and reports, unethical behavior, etc. No employee has been denied access to the Audit Committee. The Whistle Blower mechanism forms part of the Code of Ethics and Business Conduct. d. The Company is compliant with the applicable mandatory requirements of Regulations 17 to 27 and clauses (b) to (i) of sub-regulation (2) of Regulation 46 of the Listing Regulations. The Company has also complied with the requirements of the Corporate Governance Report as provided in Part C of Schedule V sub-regulations (2) to (10) of the Listing Regulations. e. During the financial year 2015-16, the Company does not have any material listed/unlisted subsidiary companies as defined under Regulation 16 of the Listing Regulations. The Company has formulated a policy for determining material subsidiary as required under the Listing Regulations and the same is disclosed on the Company’s website at: http://www.oracle.com/us/industries/financial-services/policy-determining-material-2615655.pdf f. The Company has formulated and adopted a “Record Retention Policy” setting forth the guidelines with respect to retention and destruction of documents, both in hard copy and in electronic media pursuant to Regulation 9 of the Listing Regulations and the same is disclosed on the Company’s website at: http://www.oracle.com/us/industries/financial-services/record-retention-policy-2889568.pdf g. Unclaimed Shares: In terms of Part C of Schedule V of the Listing Regulations the information with regard to demat suspense account/ unclaimed suspense account are as under: Particulars No. of Shareholders No. of Shares of ` 5 each Aggregate number of Shareholders and the outstanding shares in the suspense 2 40 account as on April 1, 2015 Number of Shareholders who approached the Company for transfer of shares – – from the suspense account during the year Number of Shareholders to whom the shares were transferred from suspense – – account during the year Aggregate number of Shareholders and the outstanding shares in suspense 2 40 account as on March 31, 2016 The Voting rights on the outstanding shares in the suspense account shall remain frozen till the rightful owner of such shares claims the shares. h. Unclaimed Dividend: Pursuant to Sections 124, 125 and other applicable provisions, if any, of the Companies Act, 2013, any money transferred to the unpaid dividend account which remains unpaid or unclaimed for a period of 7 years from the date they become due for payment, would be required to be transferred to the ‘Investor Education and Protection Fund’ set up by the Central Government. List of members who have not yet claimed dividend has been uploaded on the website of the Company. 20. Discretionary requirements pursuant to regulation 27 of the listing regulation: a) Separate posts of Chairman and CEO: the Chairman of the Board is a Non-Executive Director and his position is separate from that of the Managing Director and CEO. b) Reporting of Internal Auditor: The Internal Auditor reports to the Audit Committee. c) Modified Opinion in Auditors Report: The Company’s financial Statement for the financial year 2015-16 does not contain any modified audit opinion. 21. Address for correspondence The Company Secretary and Compliance Officer Oracle Financial Services Software Limited Oracle Park, Off Western Express Highway Goregaon (East) Mumbai 400063 Maharashtra, India Tel +91-22-6718 3000 Fax +91-22-6718 4604 Email: investors-vp-ofss_in_grp@oracle.com Website: www.oracle.com/financialservices CIN: L72200MH1989PLC053666 The details of other office addresses have been mentioned in the corporate information section of the annual report. Oracle Financial Services Software – Annual Report 2015-16

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