avatar Oracle Corporation Manufacturing
  • Location: California 
  • Founded:
  • Website:

Pages

  • Page 1

    Oracle Financial Services Software Limited Annual Report 2016-17


  • Page 2


  • Page 3

    Letter to Shareholders Oracle Financial Services Software has completed another very good year. On a consolidated basis, the Company’s revenue stood at ` 44, 265 million this year, an increase of 7% over the previous year. We delivered a net income of ` 11, 854 million, an increase of 13% over the last financial year. Throughout the financial year we witnessed increased demand for our solutions, resulting in a solid 30% growth in license signings in the financial year. This validates the relevance of our offerings to global financial institutions as they transform to address digital disruption, changing customer demographics, and heightened regulatory pressure. Amongst the marquee wins in the year, Westpac, one of Australia’s big four banks, signed an agreement to deploy Oracle Banking Platform along with several other Oracle applications and cloud services for their Customer Service Hub program. National Australia Bank (NAB) is utilizing Oracle Banking Digital Experience after successful deployment of Oracle Banking Platform and Oracle Financial Services Analytics Applications. A large U.S. based financial services firm selected Oracle FLEXCUBE to assist in managing its multi-currency custodial business. Agricultural Bank of China with 320 million retail customers, 2.7 million corporate clients, and nearly 24,000 branches is China's third largest lender by assets and ranked 8th among the top 1000 World Banks. The bank selected Oracle Financial Services Analytical Applications (OFSAA) to support national policy of Interest Rate liberalization in China. Our product capabilities continued to win acclaim for us as well as for our customers. Oracle Financial Services Analytical Applications was named Best Compliance Product of 2016 by Risk.net and Operational Risk. The product was placed second and listed as Category Winner on the Chartis RiskTech100® rankings. National Australia Bank (NAB), a long standing customer, was the winner of the Celent Model Bank 2017 Award for core legacy transformation. Partnering with Oracle, NAB created a new Personal Banking Origination Platform (PBOP), which supports the bank’s entire range of consumer banking products, from current and savings accounts to credit cards, personal loans, and mortgages. Cloud adoption continued to create a seismic shift in the business landscape of the financial services industry and your Company maintained its position as an innovator, with the launch of a new cloud ready solution, Oracle Banking Enterprise Collections. We further improved our value proposition with significant enhancements to Oracle Financial Services Lending and Leasing applications available on Oracle Cloud. Cabel, an IT service provider for the financial services industry in Italy since 1985, selected Oracle FLEXCUBE Universal Banking as the backbone of its private cloud core banking solution for the Italian banking sector. We will continue to strengthen our cloud offerings ensuring our customers gain most value from the cloud. As digital connectivity begins to dominate the industry, we are witnessing a significant shift toward a new marketplace of customer choice, third party services, and open data, all of which requires flexible and innovative solutions. Your Company’s flagship product Oracle FLEXCUBE’s open architecture enables banks to permit third party developers to build and integrate their own apps, so that the bank is equipped to compete effectively in the new paradigm, where new age fintechs are nibbling away their traditional businesses. New releases of Oracle Financial Services Analytical Applications expanded our solution footprint for financial crime and compliance management. With continued emphasis on compliance worldwide, we enjoy market leadership in this segment. Our focus on innovation and excellence helps us provide superior products and services for a radically evolving financial services industry. As the industry is evolving rapidly, we continue to demonstrate a strong leadership setting the tone for growth in the year ahead. 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 Chairperson Oracle Financial Services Software Limited


  • Page 4

    This page has been intentionally left blank. Oracle Financial Services Software – Annual Report 2016-17


  • Page 5

    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 125 Notice of annual general meeting 183 Attendance slip 193 Proxy form 195 Annual General Meeting Day and Date : Wednesday, September 20, 2017 Time : 2.30 p.m. Venue : Shri Bhaidas Maganlal Sabhagriha Bhaktivedanta Swami Marg Vile Parle (West), Mumbai 400056 3


  • Page 6

    Financials at a glance Key performance indicators 2016-17 As per Ind AS Consolidated results Fiscal year 2016-17 break up in terms of operating revenue by region, operating revenue by portfolio and expense by category BPO Services 3% Services Asia Pacific 12% 31% North America 38% Products Europe, Middle East, Africa 85% 31% Operating revenue by region Operating revenue by portfolio Depreciation and amortization Other expenses 3% 4% Facility costs 4% Professional fees 6% Travel cost 8% Staff cost 75% Expense by category Ten years history (Amounts in ` million except EPS & Book Value) 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 Operating Revenue 23,802.36 29,276.20 28,739.74 29,969.32 31,466.76 34,739.99 37,413.21 39,049.05 41,312.17 44,265.33 Finance and Other Income (expense) 631.16 1,763.89 (858.03) 1,668.26 4,217.49 4,595.44 6,736.48 3,481.34 2,107.40 1,563.69 Total Revenue 24,433.52 31,040.09 27,881.71 31,637.58 35,684.25 39,335.43 44,149.69 42,530.39 43,419.57 45,829.02 Total Expenses 19,835.95 22,839.30 18,947.38 19,157.57 21,515.23 23,203.42 24,136.08 24,222.02 25,943.68 28,259.24 EBT 4,597.57 8,200.79 8,934.33 12,480.01 14,169.02 16,132.01 20,013.61 18,308.37 17,475.89 17,569.78 Tax 441.68 835.36 1,197.69 1,370.12 5,076.29 5,380.58 6,420.42 6,385.17 6,986.96 5,715.93 EAT 4,155.89 7,365.43 7,736.64 11,109.89 9,092.73 10,751.43 13,593.19 11,923.20 10,488.93 11,853.85 EPS 48.93 86.71 91.08 130.80 107.05 126.58 160.03 140.37 123.49 139.56 Book Value 326.94 412.63 505.01 636.41 743.74 871.96 1,033.26 405.47 550.25 384.34 Notes: - All EPS and Book Values are computed based on the current equity capital base of 84,940,264 shares as on March 31, 2017. - Amounts for the financial year 2007-08 to 2014-15 are as per Indian GAAP and for financial year 2015-16 & 2016-17 as per Ind AS. Oracle Financial Services Software – Annual Report 2016-17


  • Page 7

    Key metrics 2007-2017 Operating revenue Operating income 50,000.00 20,000.00 45,000.00 44,265.33 18,000.00 17,475.89 17,569.78 41,312.17 40,000.00 39,049.05 16,000.00 37,413.21 14,827.03 34,739.99 35,000.00 14,000.00 13,277.13 31,466.76 in ` million 29,276.20 28,739.74 29,969.32 in ` million 30,000.00 12,000.00 11,536.57 10,811.75 10,644.85 25,000.00 23,802.36 10,000.00 9,792.36 20,000.00 8,000.00 7,196.85 15,000.00 6,000.00 10,000.00 4,000.00 3,966.41 5,000.00 2,000.00 0.00 0.00 07-08 08-09 09-10 10-11 11-12 12-13 13-14 14-15 15-16 16-17 07-08 08-09 09-10 10-11 11-12 12-13 13-14 14-15 15-16 16-17 Net income Earnings per share 16,000.00 180.00 160.03 14,000.00 13,593.19 160.00 140.37 139.56 11,923.20 11,853.85 140.00 130.80 12,000.00 126.58 11,109.89 10,751.43 123.49 10,488.93 120.00 in ` million 10,000.00 107.05 9,092.73 100.00 in ` 7,736.64 86.71 91.08 8,000.00 7,365.43 80.00 6,000.00 60.00 4,155.89 48.93 4,000.00 40.00 2,000.00 20.00 0.00 0.00 07-08 08-09 09-10 10-11 11-12 12-13 13-14 14-15 15-16 16-17 07-08 08-09 09-10 10-11 11-12 12-13 13-14 14-15 15-16 16-17 Earnings per share is computed on the equity capital base of 84,940,264 shares as on March 31, 2017. Book value Number of employees including subsidiaries 1,200.00 12,000 11,386 11,006 1,033.26 10,451 9,652 9,969 1,000.00 10,000 9,682 9,220 8,928 8,733 8,818 Number of employees 871.96 800.00 743.74 8,000 636.41 in ` 600.00 550.25 6,000 505.01 412.63 405.47 384.34 400.00 4,000 326.94 200.00 2,000 0.00 0 07-08 08-09 09-10 10-11 11-12 12-13 13-14 14-15 15-16 16-17 07-08 08-09 09-10 10-11 11-12 12-13 13-14 14-15 15-16 16-17 Book Value is computed on the equity capital base of 84,940,264 shares as on March 31, 2017. Customers serviced ... in countries 1400 160 1300 1,289 1,247 150 148 1200 1,195 147 145 Number of customers 1,132 141 142 141 1100 1,084 140 139 Country base 137 137 1,028 1000 133 971 922 130 900 882 814 800 120 700 110 600 500 100 07-08 08-09 09-10 10-11 11-12 12-13 13-14 14-15 15-16 16-17 07-08 08-09 09-10 10-11 11-12 12-13 13-14 14-15 15-16 16-17 5


  • Page 8

    Corporate information Oracle Financial Services Software Limited Board of directors S Venkatachalam, Chairperson Chaitanya Kamat, Managing Director & Chief Executive Officer Harinderjit Singh Kimberly Woolley Maria Smith Richard Jackson Robert K Weiler 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 Mustafa Moonim Arvind Gulhati Prajakt Deshpande Legal counsel Bindu Venkatesh Rajaram N Vadapandeshwara Mohamed Yacob Deepak Kewalramani Rajendra Potdar Registered office Dinakar Kini Ravikumar M Oracle Financial Services Software Limited Dinesh V Shetty Ravikumar V Oracle Park Off Western Express Highway Edwin Niranjan Moses S Bhargava Goregaon (East) Mumbai 400063, Maharashtra, India George Thomas Sanjay Bajaj CIN: L72200MH1989PLC053666 Gregory Chapple Sanjay Kumar Ghosh Karthick R Prasad Sanjay V Deshpande Registrars & Transfer Agents Link Intime India Private Limited Laura Balachandran Surendra Shukla C 101, 247 Park Mahesh Kandavar Rao Umesh Arora L B S Marg, Vikhroli (West) Mumbai 400083, Maharashtra, India Manish Chandra Gupta Venkatesh Srinivasan Manmath Kulkarni Vikram Gupta Auditors S. R. Batliboi & Associates LLP Mudit Govil Vinayak L Hampihallikar Oracle Financial Services Software – Annual Report 2016-17


  • Page 9

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


  • Page 10

    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 – 5th Floor Bride Street, Dublin 8 Ciudad Empresarial Ireland Huechuraba CP 8580678, Santiago, Chile Oracle Financial Services Software SA 265 Mesogheion Avenue Neo Psychico 15451 Athens, Greece Oracle Financial Services Software Limited bld.6/1, Village Moskovsky 22nd km Kievskoe Route 142784, Moscow, Russian Federation Park Rotana, Level One, Office 108 Khalifa Park, Sector E-48 PO Box 769441 Abu Dhabi, UAE The Edge Building Plot A-004-038 Al Falak St. 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 2016-17


  • Page 11

    Directors’ report Financial year 2016-17 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 2016-17. Financial highlights As per Consolidated financial statements: (Amounts in ` million) Particulars Year ended Year ended March 31, 2017 March 31, 2016 Revenue from operations 44,265.33 41,312.17 Finance income 1,491.16 2,180.22 Other income, net 72.53 (72.82) Total income 45,829.02 43,419.57 Depreciation and amortization (701.92) (529.27) Profit before exceptional item and tax 18,198.03 17,695.22 Exceptional item (628.25) (219.33) Profit before tax 17,569.78 17,475.89 Tax expenses (5,715.93) (6,986.96) Profit for the year 11,853.85 10,488.93 As per Unconsolidated financial statements: (Amounts in ` million) Particulars Year ended Year ended March 31, 2017 March 31, 2016 Revenue from operations 37,363.12 35,284.31 Finance income 1,420.83 2,151.82 Other income, net 215.76 (23.14) Total income 38,999.71 37,412.99 Depreciation and amortization (667.99) (497.71) Profit before exceptional item and tax 14,663.34 14,681.02 Exceptional item 2,162.59 − Profit before tax 16,825.93 14,681.02 Tax expenses (3,944.96) (5,703.47) Profit for the year 12,880.97 8,977.55 Performance On consolidated basis, your Company’s revenue stood at ` 44,265.33 million this year, an increase of 7% from ` 41,312.17 million of the previous financial year. The net income was ` 11,853.85 million this year, an increase of 13%. On an unconsolidated basis, your Company’s revenue grew to ` 37,363.12 million during the financial year 2016-17 from ` 35,284.31 million last year. This represents a growth of 6%. The Company’s net income for the financial year 2016-17 was ` 12,880.97 million, an increase of 43% over the previous financial year. A detailed analysis of the financials is given in the Management’s discussion and analysis report that forms a part of this Directors’ report. Previous year’s figures have been re-arranged/re-classified, wherever necessary, as per the applicable regulations. Dividend The Company distributed an interim dividend of ` 170 per equity share of ` 5 each in April 2017 for the financial year ended March 31, 2017. The Board of Directors has not recommended any additional final dividend for the financial year 2016-17. Transfer to reserves The Company does not propose to transfer any amount to the General Reserve out of the amount available for appropriation. 9


  • Page 12

    Particulars of loans, guarantees or investments Pursuant to Section 186 of the Companies Act, 2013 (“the Act”), there are no new loans granted or investments made by the Company during the financial year 2016-17. Share capital During the financial year 2016-17, the Company allotted 250,228 equity shares of face value of ` 5 each to its eligible employees who exercised their stock options under the prevailing Employee Stock Option Schemes of the Company. As a result, as on March 31, 2017, the paid-up equity share capital of the Company was ` 425,532,030 divided into 85,106,406 equity shares of face value of ` 5 each. Extract of annual return Pursuant to Section 92(3) of the Companies Act, 2013 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 Ms. Maria Smith, Director of the Company, retires by rotation at the ensuing Annual General Meeting and being eligible, offers herself for re-appointment. Pursuant to Section 161 of the Companies Act, 2013, Ms. Kimberly Woolley was appointed as an Additional Director of the Company on March 29, 2017 and holds office up to the date of ensuing Annual General Meeting. The Company has received Notice in writing from a Member, pursuant to Section 160 of the Companies Act, 2013, proposing the candidature of Ms. Kimberly Woolley for the office of the director. The Board recommends to the Members the resolution for re-appointment of Ms. Maria Smith and appointment of Ms. Kimberly Woolley as Directors of the Company, liable to retire by rotation. Mr. Derek H Williams, Non-Executive, Non-Independent Director of the Company, expired on July 23, 2016. The Board, while condoling the death of Mr. Williams, places on record its appreciation for the contributions made by him as a Member of the Board. Ms. Samantha Wellington, Non-Executive, Non-Independent Director of the Company, resigned from the Board with effect from October 28, 2016. The Board places on record its appreciation for the contributions made by her as a Member of the Board. Brief resumes of the Directors proposed to be appointed / re-appointed, the nature of their expertise in specific functional areas and the names of companies in which they hold directorships and Chairpersonships / Memberships of Board Committees, etc. are provided in the Notice to Members and Report on Corporate Governance forming part of this Annual Report. All the Independent Directors of the Company have given declaration under Section 149(6) of the Companies Act, 2013 confirming that they meet the criteria of independence. During the year, there were no changes to the Key Managerial Personnel. 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 Chairperson 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's principles and processes has been established by Risk Management Policy 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. The Independent, Non-Executive Directors are paid commission based on the committee Chairpersonships/ 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. Oracle Financial Services Software – Annual Report 2016-17


  • Page 13

    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 require disclosure to stock exchanges. The policy is available on the Company’s website at: http://www.oracle.com/us/industries/financial-services/policy-determination-events-2889567.pdf Vigil mechanism / whistle blower policy The Company has established a Code of Ethics and Business Conduct (“Code”) which is applicable to its Directors and 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 available on website of the Company at: http://www.oracle.com/us/corporate/investor-relations/cebc-176732.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 2016-17 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 Dividend Distribution policy As per Regulation 43A of the Listing Regulations, the Company has framed a dividend distribution policy and the same is made available on website of the Company at: http://www.oracle.com/us/industries/financial-services/ofss-dividend-distribution-policy-3125465.pdf Directors’ familiarization program The Company has a formulated familiarization program for its 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 and 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 the 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, its consolidated financial statements along with relevant documents, and separate annual accounts in respect of subsidiaries, are available on the website of the Company at www.oracle.com/financialservices Indian Accounting Standards (Ind AS) Your Company adopted Ind AS with effect from April 1, 2016 pursuant to the Ministry of Corporate Affairs’ notification dated February 16, 2015 notifying the Companies (Indian Accounting Standard) Rules, 2015. Your Company has published Ind AS Financials for the year ended March 31, 2017 along with comparable figures for the previous financial year and Opening Statement of Assets and Liabilities as on April 1, 2015. 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. 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. 11


  • Page 14

    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, 2017 March 31, 2016 Revenue Expenditure 2,100.73 2,711.00 Capital Expenditure 230.35 35.27 Fixed deposits During the financial year 2016-17, 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 Board has appointed Mr. Prashant Diwan, Practicing Company Secretary as Secretarial Auditor of the Company for the financial year 2016-17. The Secretarial Audit report issued by Practicing Company Secretary is annexed as Annexure 3 to this report. Business responsibility report Business Responsibility Report for financial year 2016-17 that forms part of this Annual Report has been hosted on the Company’s website at 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 to the 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 the 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”). This plan enables issue of deeply discounted options at the face value and referred to as OFSS Stock Units (“OSUs”) for convenience. Accordingly, the Company granted 156,795 Stock Options and 457,601 OSUs under OFSS Stock Plan 2014. The issuance terms of OSUs are the same as for Stock Options, employees may elect to receive 1 OSU 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 an 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 / OSUs 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 / OSUs have exercise period of 10 years from the date of grant. The employee pays the exercise price upon exercise of options/OSUs. All the above mentioned Schemes of the Company is in compliance with SEBI (Share Based Employee Benefits) Regulations, 2014. Applicable disclosures relating to Employees Stock Options Schemes, pursuant to SEBI (Share Based Employee Benefits) Regulations, 2014, are placed on the website of the Company at www.oracle.com/financialservices Oracle Financial Services Software – Annual Report 2016-17


  • Page 15

    The details of the options / OSUs 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 2002 Scheme 2010 Scheme 2011 OFSS Stock OFSS Stock Total Plan 2014 Plan 2014 (Stock Options) (OSUs) Pricing Formula At the market price as on the date of grant `5 Variation of terms of options/ None None None None None OSUs Number of options/OSUs granted 5,167,920 638,000 1,950,500 156,795 457,601 8,370,816 till March 31, 2017 Number of options/OSUs lapsed (620,725) (281,442) (412,630) (17,063) (33,634) (1,365,494) and forfeited Number of options/OSUs exercised (4,535,195) (299,883) (677,072) (773) (28,389) (5,541,312) Total number of options in force as 12,000 56,675 860,798 138,959 395,578 1,464,010 on March 31, 2017 The details of Options / OSUs granted to Directors and Senior Managerial Personnel under OFSS Stock Plan 2014 during the financial year ended March 31, 2017 are as follows: Particulars Number of OSUs (OFSS Stock Plan 2014) i. Directors: Mr. Chaitanya Kamat 25,000 ii. Senior Managerial Personnel: Mr. Arvind Gulhati 5,000 Mr. Edwin Moses 2,000 Mr. Gregory Chapple 2,500 Mr. M Ravikumar 1,875 Mr. Mahesh Rao 2,000 Mr. Makarand Padalkar 10,000 Mr. Mudit Govil 625 Mr. Mustafa Moonim 2,500 Mr. Onkarnath Banerjee 500 Mr. Prajakt Deshpande 3,000 Mr. Sanjay Deshpande 1,500 Mr. Vikram Gupta 4,750 Mr. Vinayak Hampihallikar 2,250 iii. Any other employee, who receives grant in any one year of Options/OSUs amounting to 5% Nil or more of Options/OSUs granted during the year iv. Identified employees who were granted Options/OSUs, 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 ` 151.06 calculated in accordance with Indian Accounting Standard 33 ‘Earnings Per Share’ issued by the Institute of Chartered Accountants of India All stock options were granted at market price on the date of grant and OSUs were granted at the face value of the equity shares. The compensation cost arising on account of stock options and OSUs is calculated using the fair value method. The reported profit is after considering the cost of employee stock compensation (` 780.37 million), using fair value method on stock options/OSUs. 13


  • Page 16

    A summary of the activities in the Company’s Scheme 2002, Scheme 2010 and Scheme 2011 for the year ended March 31, 2017 are as follows: Particulars Year ended March 31, 2017 Scheme 2002 Scheme 2010 Scheme 2011 Shares Weighted Shares Weighted Shares Weighted arising from average arising from average arising from average options exercise price options exercise price options exercise price (`) (`) (`) Outstanding at beginning of year 23,000 1,835 95,344 2,062 1,119,925 2,882 Granted − − − − − − Exercised (5,000) 1,290 (30,869) 2,088 (185,197) 2,660 Forfeited − − (7,800) 2,050 (73,930) 2,970 Lapsed (6,000) 1,290 − − − − Outstanding at end of the year 12,000 2,333 56,675 2,050 860,798 2,922 Vested options 12,000 56,675 559,948 Unvested options − − 300,850 Options vested during the year − 4,000 290,200 Options forfeited / lapsed during 6,000 7,800 73,930 the year A summary of the activities in the Company’s OFSS Stock Plan 2014 are as follows: Particulars Year ended March 31, 2017 OFSS Stock Plan 2014 Shares arising Weighted average Shares arising Weighted average from OSUs exercise price (`) from Options exercise price (`) Outstanding at beginning of year 293,116 5 93,245 3,539 Granted 156,523 5 61,250 3,393 Exercised (28,389) 5 (773) 3,241 Forfeited (25,672) 5 (14,763) 3,632 Outstanding at end of the year 395,578 5 138,959 3,466 Vested OSUs / Options 75,607 33,660 Unvested OSUs / Options 319,971 105,299 OSUs / Options vested during the year 69,326 20,691 OSUs / Options forfeited / lapsed during the 25,672 5 14,763 year The weighted average share price for the year over which stock options/OSUs were exercised was ` 3,407. Money realized by exercise of options/OSUs during the financial year 2016-17 was ` 589.42 million. The Company has recovered perquisite tax on the options/OSUs exercised by the employees during the year. The weighted average fair value of Stock options/OSUs granted during the year was ` 993 and ` 3,372 respectively, calculated as per the Black Scholes valuation model as stated in 26 (b) in the notes to accounts of the standalone financials. Oracle Financial Services Software – Annual Report 2016-17


  • Page 17

    The details of options unvested and options vested and exercisable as on March 31, 2017 are as follows: Exercise prices (`) Number of Weighted average Weighted average options/OSUs exercise price (`) remaining contractual life (Years) Options /OSUs unvested 5 319,971 5 8.8 3,077 204,100 3,077 6.5 3,127 96,750 3,127 5.9 3,241 26,049 3,241 8.0 3,393 56,425 3,393 9.2 3,987 22,825 3,987 8.6 Options /OSUs vested and exercisable 5 75,607 5 8.2 1,930 130,788 1,930 4.7 2,050 56,675 2,050 3.4 2,333 12,000 2,333 3.6 3,077 192,205 3,077 6.5 3,127 236,955 3,127 5.9 3,241 26,060 3,241 8.0 3,987 7,600 3,987 8.6 1,464,010 2,147 6.8 Employee Stock Purchase Scheme (“ESPS”) The Company had adopted the ESPS administered through a Trust with the 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 sole Trustee of this Trust. 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 had filed a petition in the Honorable 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. As per the order of the Honorable Bombay High Court dated August 1, 2016, the trust funds would be utilized for the benefit of the employees. As at March 31, 2017, the Trust is holding 166,142 equity shares (March 31, 2016 - 166,142 equity shares) of Oracle Financial Services Software Limited. Human resources Your Company maintains a healthy and productive environment and offers clean and ergonomic workspace. 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, 2017 was 8,818 as compared to 8,733 as on March 31, 2016 (including employees of subsidiaries). During the financial year, two complaints were filed under Section 22 of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. These were resolved per process. There was no complaint outstanding as at the end of financial year. 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, 2017 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. 15


  • Page 18

    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 Chairperson of the Audit Committee. The BAA monitors and evaluates the efficacy and adequacy of internal control system of the Company, its compliance with 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, 2017, 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 25th Annual General Meeting held on September 12, 2014 to hold office till the conclusion of the ensuing 28th Annual General Meeting to be held in the year 2017 subject to annual ratification by Members at every Annual General Meeting. Pursuant to Section 139 of the Companies Act, 2013 (“the Act”) and the rules made thereunder, the Board of Directors of the Company on recommendation of the Audit Committee, has proposed the appointment of M/s. Mukund M Chitale & Co., Chartered Accountants, (ICAI Firm Registration No. 106655W) as the Statutory Auditors of the Company, to hold office from the conclusion of the ensuing 28th Annual General Meeting to be held in the year 2017 till the conclusion of the 33rd Annual General Meeting to be held in the year 2022, subject to the approval of the Members of the Company, and subject to the annual ratification by Members at every Annual General Meeting to be held in the years 2018 to 2021. The Company has received from M/s. Mukund M Chitale & Co. written consent that they satisfy the criteria provided under Section 141 of the Act and that the appointment, if made, shall be in accordance with the applicable provisions of the Act and rules framed thereunder. Accordingly, a resolution, proposing the appointment of M/s. Mukund M Chitale & Co., as the Statutory Auditors of the Company for a term of five consecutive years forms part of the Notice convening the 28th Annual General Meeting. Auditors’ report With regard to the Auditors’ comment in the CARO report concerning delays in payment of some foreign income taxes, the Company is continuously evaluating and accruing towards any material tax exposures in the books of account taking a conservative approach and payments are made based on the advice of the tax experts. The Company also assesses withholding of foreign payroll tax implications on salaries and travel related reimbursements paid to its employees posted outside India and accordingly makes accruals in the books of account. The Company is in the process of filing the returns for Payroll Tax in such jurisdiction for which the provision is made in the books. Oracle Financial Services Software – Annual Report 2016-17


  • Page 19

    Conservation of energy, 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: Conservation of energy The Company strives to conserve the energy and use energy efficient computers. The Company also deploys sophisticated office automation and management equipment which optimizes energy consumption. 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: 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. Your Company regularly carries out a refresh of network devices across the Company to deploy modern and energy efficient machines. This has brought about significant savings in power, strengthened operating effectiveness and security. Virtual presence: Your Company has made significant investments in providing a near virtual working environment to its employees. 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 planned initiatives 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. Foreign exchange earnings and outgo: (Amounts in ` million) Foreign Exchange Earnings 37,743.78 (including dividend received from foreign subsidiaries) Foreign Exchange Outgo 9,404.71 (including capital goods & other expenditure) Net equity dividend remitted in foreign exchange 6,305.12 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 A new organizational paradigm is emerging where banks need to move past traditionally defined boundaries. Today, they have to work in a hyper connected ecosystem; one that is continually enriched by fintechs and other non-traditional players underpinned by digital acceleration. While fintechs enter the industry with innovative products and services and target the most lucrative business segments through their nimble footed offerings, banks have their traditional strengths namely strong regulatory knowledge, strength of balance sheet and multiple avenues to access capital, and most importantly customer’s trust. Partnering with fintechs and collaborating with this extended ecosystem of third party players allows financial institutions to integrate their services and deliver solutions that are superior in terms of cost, speed, and convenience. Banks are now investing in infrastructure that is flexible and agile enough to work with these new norms and the operational challenges that come with this complex network of hyper connected systems. Digitization and connected devices continue to evolve and exude their influence on virtually all aspects of the business. To lock step with this transition financial institutions are increasingly looking to develop end-to-end digital engagement strategies and comprehensive digital operating models that address the needs of suppliers, employees and partners just as much as customers. Financial institutions are reshaping their businesses and operating models to collaborate, compete and grow. Cloud adoption is gaining ground within the financial services industry. The most common strategies use a mix of private, public, or hybrid cloud environments. Organizations are finding that using cloud-based platform offerings to develop and deploy applications can eliminate the cost and complexity of managing the underlying application platforms. To achieve success in this environment, it is essential for organizations to realign their IT strategy to deliver capabilities of exceptional digital experience, enhanced digital engagement and a responsive back-end. Combining the power of analytics and big data, banks can gain operational and customer insights mitigate risks and comply with regulations. Your Company’s portfolio of solutions is well equipped to address these very needs and the Company is in a good position to help financial institutions leverage technology shifts and find new ways of delivering value. 17


  • Page 20

    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 while 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. 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 is 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 Director* Ratio to median remuneration Non-Executive Directors Mr. S Venkatachalam 3 Mr. Richard Jackson 2 Mr. Sridhar Srinivasan 2 Executive Director Mr. Chaitanya Kamat@ 44 * The details mentioned above are of only those Directors to whom the remuneration has been paid. @ 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 2017 as compared to FY 2016 Mr. S Venkatachalam 0% Mr. Richard Jackson 0% Mr. Sridhar Srinivasan* NA Mr. Chaitanya Kamat@ 47% Mr. Makarand Padalkar, Chief Financial Officer@ 0% Mr. Onkarnath Banerjee, Company Secretary*@ NA * Comparison is not applicable as the previous financial year was a partial period. @ Excludes the (perquisite) value towards difference between the fair market value and the exercise price on the date of exercise of options. (iii) The percentage increase in the Median Remuneration of Employees in fiscal 2017, as compared to fiscal 2016: 12% (iv) The number of permanent employees on the rolls of the Company: 7,093 as on March 31, 2017 (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 2016-17, the average percentile change in the remuneration of employees other than the managerial personnel was an increase of 12%. The Average percentile change in the remuneration of KMP was an increase of 35%. (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 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. Oracle Financial Services Software – Annual Report 2016-17


  • Page 21

    Acknowledgements Your Directors gratefully acknowledge the continued support received by the Company from its customers, members, vendors and bankers during the year. Your Directors also wish to thank the Government of India and its various agencies, Department of Electronics, the Software Technology Parks - Bengaluru, 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, co-operation and diligence with a view to achieving consistent growth for the Company. For and on behalf of the Board S Venkatachalam Chairperson DIN: 00257819 July 12, 2017 19


  • Page 22

    Annexure 1 Form No. MGT-9 EXTRACT OF ANNUAL RETURN for the financial year ended on March 31, 2017 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 Oracle Park contact details Off Western Express Highway, Goregaon (East) Mumbai 400063 Maharashtra, India Tel. no. +91 22 6718 3000 Fax no. +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 Link Intime India Private Limited Registrar & Transfer Agents (RTA), if any C 101, 247 Park L B S Marg, Vikhroli (West) Mumbai 400083 Tel. no. +91 22 4918 6000 Fax no. +91 22 4918 6060 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 of the No. product / service 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 2016-17


  • Page 23

    III. Particulars of Holding, Subsidiary and Associate Companies: Sl. Name and Address of the Company CIN / GLN Holding / % of Shares Applicable No. Subsidiary / Held Section Associate 1. Oracle Global (Mauritius) Limited − Holding 74.09 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


  • Page 24

    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 Chile Limitada 2(87) Avenida del Valle 537 – 2nd Floor Ciudad Empresarial, Huechuraba Santiago, Chile, CP 8580678 17. Oracle Financial Services Software − Subsidiary 100.00 Section (Shanghai) Limited 2(87) Room 806, No 155 Tianjin Road Huangpu District Shanghai 200001 People’s Republic of China 18. Sarvatra Technologies Private Limited U72309PN2000PTC015028 Associate 5.51 Section 2(6) Siddh Icon, Survey No. 1/1 3rd floor, Baner Road, Baner Pune 411045 Maharashtra, India 19. Login S.A. − Associate 33.00 Section 2(6) 56, boulevard de la Mission Marchand 92400 Courbevoie France IV. Shareholding Pattern (Equity share capital breakup as percentage of Total Equity): (i) Category-wise Shareholding: Category Category of Shareholders No. of Shares held at the beginning of No. of Shares held at the end of the % Code the year, as on April 1, 2016 year as on March 31, 2017 Change Demat Physical Total % of Demat Physical Total % of during Total Total the year 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 63051197 − 63051197 74.30 63051197 − 63051197 74.09 (0.21) (d) Banks / Financial – – – – – – – – – Institutions (e) Any other – – – – – – – – – Sub-total (A) (2) 63051197 – 63051197 74.30 63051197 – 63051197 74.09 (0.21) Total shareholding of Promoter 63051197 – 63051197 74.30 63051197 – 63051197 74.09 (0.21) (A) = (A)(1)+(A)(2) Oracle Financial Services Software – Annual Report 2016-17


  • Page 25

    Category Category of Shareholders No. of Shares held at the beginning of No. of Shares held at the end of the % Code the year, as on April 1, 2016 year as on March 31, 2017 Change Demat Physical Total % of Demat Physical Total % of during Total Total the shares shares year I II III IV V VI VII VIII IX X XI (B) Public Shareholding (1) Institutions (a) Mutual Funds / UTI 3332768 − 3332768 3.92 3004517 − 3004517 3.53 (0.39) (b) Banks / Financial 3889 − 3889 0.00 12776 − 12776 0.02 0.02 Institutions (c) Central Government 4000 − 4000 0.01 4000 − 4000 0.00 (0.01) (d) State Government(s) − − − − − − − − − (e) Venture Capital − − − − − − − − − Funds (f) Insurance Companies − − − − − − − − − (g) Foreign Institutional 8178638 − 8178638 9.64 592269 592269 0.70 (8.94) Investors (h) Foreign Venture − − − − − − − − − Capital Funds (i) Others − − − − − − − − − Sub-total (B)(1) 11519295 − 11519295 13.57 3613562 − 3613562 4.25 (9.32) (2) Non-Institutions (a) Bodies Corporate 1033910 − 1033910 1.22 596019 − 596019 0.70 (0.52) (b) Individuals i. Individual 3324878 353172 3678050 4.33 3446191 320782 3766973 4.43 0.09 shareholders holding nominal share capital up to ` 1 lakh ii. Individual 1093030 122000 1215030 1.43 1054695 88000 1142695 1.34 (0.09) shareholders holding nominal share capital in excess of ` 1 lakh (c) Others i. Non-Resident 146537 − 146537 0.17 169251 62 169313 0.20 0.03 Indians (Repatriate) ii. Non-Resident 688667 3200 691867 0.82 673307 3442 676749 0.79 (0.03) Indians (Non-Repatriate) iii. Foreign Nationals 4260 − 4260 0.01 1760 − 1760 0.00 (0.01) iv. Foreign Banks − − − − 13808 − 13808 0.02 0.02 v. Foreign Mutual Fund 1818747 − 1818747 2.14 185724 − 185724 0.22 (1.92) vi. Clearing Member 23448 − 23448 0.03 34425 − 34425 0.04 0.01 vii. Directors / Relatives 14085 − 14085 0.02 6000 − 6000 0.01 (0.01) viii. Hindu Undivided 37350 − 37350 0.04 38491 − 38491 0.04 0.00 Family ix. Market Maker 4540 − 4540 0.01 6257 − 6257 0.01 0.00 x. Trusts 169168 − 169168 0.20 173644 − 173644 0.20 0.00 xi. Foreign Portfolio 1448694 − 1448694 1.71 11629789 − 11629789 13.66 11.95 Investor (Corporate) Sub-total (B)(2) 9807314 478372 10285686 12.13 18029361 412286 18441647 21.66 9.53 Total Public Shareholding 21326609 478372 21804981 25.70 21642923 412286 22055209 25.91 0.21 (B)=(B)(1)+(B)(2) (C) Shares held by Custodian – – – – – – – – – for GDRs & ADRs Grand Total (A+B+C) 84377806 478372 84856178 100.00 84694120 412286 85106406 100.00 0.00 23


  • Page 26

    (ii) Shareholding of Promoters: Name of the Shareholders Shareholding at the beginning of the year Shareholding at the end of the year % change as on April 1, 2016 as on March 31, 2017 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 63051197 74.30 − 63051197 74.09 − (0.21) Total 63051197 74.30 − 63051197 74.09 − (0.21) (iii) Change in Promoters’ Shareholding: Name of the Shareholders Shareholding at the beginning of Cumulative shareholding during the year as on April 1, 2016 the year No. of % of Total shares No. of % of Total shares Shares of the Company Shares of the Company Oracle Global (Mauritius) Limited At the beginning of the year 63051197 74.30 63051197 74.09 Date wise Increase / Decrease in Promoters − − − − Shareholding during the Year At the end of the year 63051197 74.09 The decrease in the percentage of promoters’ shareholding from 74.30 % to 74.09 % 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 Cumulative shareholding No. of the year as on April 1, 2016 during the year * No. of % of Total shares No. of % of Total shares Shares of the Company Shares of the Company 1. Wessex (Mauritius) Limited At the beginning of the year − − − − Transactions - purchase / (sale) from April 1, 2016 5818804 6.84 5818804 6.84 to March 31, 2017 At the end of the year 5818804 6.84 2. Sussex (Mauritius) Limited At the beginning of the year − − − − Transactions - purchase / (sale) from April 1, 2016 2738253 3.21 2738253 3.21 to March 31, 2017 At the end of the year 2738253 3.21 3. HDFC Trustee Company Limited At the beginning of the year 2137884 2.51 2137884 2.51 Transactions - purchase / (sale) from April 1, 2016 (779913) (0.91) 1357971 1.60 to March 31, 2017 At the end of the year 1357971 1.60 4. Burgundy Emerging Markets Fund At the beginning of the year 294941 0.35 294941 0.35 Transactions - purchase / (sale) from April 1, 2016 192843 0.23 487784 0.57 to March 31, 2017 At the end of the year 487784 0.57 Oracle Financial Services Software – Annual Report 2016-17


  • Page 27

    Sl. Name of the Shareholders Shareholding at the beginning Cumulative shareholding No. of the year as on April 1, 2016 during the year * No. of % of Total shares No. of % of Total shares Shares of the Company Shares of the Company 5. BBH Burgundy Emerging Markets Master Fund, LP At the beginning of the year 144767 0.17 144767 0.17 Transactions - purchase / (sale) from April 1, 2016 291962 0.34 436729 0.51 to March 31, 2017 At the end of the year 436729 0.51 6. Vanguard Emerging Markets Stock Index Fund At the beginning of the year 331148 0.39 331148 0.39 Transactions - purchase / (sale) from April 1, 2016 44481 0.05 375629 0.44 to March 31, 2017 At the end of the year 375629 0.44 7. Government Pension Fund Global At the beginning of the year 51501 0.06 314597 0.37 Transactions - purchase / (sale) from April 1, 2016 404639 0.48 719236 0.85 to March 31, 2017 At the end of the year 719236 0.85 8. Franklin Templeton Mutual Fund A/C Franklin India Prima Fund At the beginning of the year 39000 0.05 39000 0.05 Transactions - purchase / (sale) from April 1, 2016 271655 0.32 310655 0.37 to March 31, 2017 At the end of the year 310655 0.37 9. HDFC Standard Life Insurance Company Limited At the beginning of the year 731043 0.86 731043 0.86 Transactions - purchase / (sale) from April 1, 2016 (447532) (0.53) 283511 0.33 to March 31, 2017 At the end of the year 283511 0.33 10. UTI-MNC Fund At the beginning of the year 123487 0.14 123487 0.14 Transactions - purchase / (sale) from April 1, 2016 142283 0.17 265770 0.31 to March 31, 2017 At the end of the year 265770 0.31 * The shares of the Company are traded on daily basis and hence the date wise increase / decrease in shareholding is not indicated. 25


  • Page 28

    (v) Shareholding of Directors and Key Managerial Personnel: Sl. Name of the Directors / Shareholding at the beginning Cumulative Shareholding No. Key Managerial Personnel (KMP) of the year as on April 1, 2016 during the year No. of % of Total shares No. of % of Total shares Shares of the Company Shares of the Company 1. Mr. S Venkatachalam At the beginning of the year 5000 0.01 5000 0.01 Transactions purchase / (sale) from April 1, 2016 to − − − − March 31, 2017 At the end of the year 5000 0.01 2. Mr. Chaitanya Kamat At the beginning of the year 8085 0.01 8085 0.01 ESOP exercised on August 25, 2016 40000 0.05 48085 0.06 Sale on August 30, 2016 (6484) 0.01 41601 0.05 Sale on August 31, 2016 (7224) 0.01 34377 0.04 Sale on September 8, 2016 (500) 0.00 33877 0.04 Sale on September 9, 2016 (2281) 0.00 31596 0.04 Sale on September 12, 2016 (4321) 0.01 27275 0.03 Sale on September 14, 2016 (164) 0.00 27111 0.03 Sale on September 16, 2016 (500) 0.00 26611 0.03 Sale on September 19, 2016 (150) 0.00 26461 0.03 Sale on September 20, 2016 (1530) 0.00 24931 0.03 Sale on September 22, 2016 (50) 0.00 24881 0.03 Sale on September 23, 2016 (50) 0.00 24831 0.03 Sale on February 23, 2017 (200) 0.00 24631 0.03 Sale on February 27, 2017 (1463) 0.00 23168 0.03 Sale on February 28, 2017 (500) 0.00 22668 0.03 Sale on March 1, 2017 (300) 0.00 22368 0.03 Sale on March 3, 2017 (1000) 0.00 21368 0.03 Sale on March 6, 2017 (44) 0.00 21324 0.03 Sale on March 7, 2017 (21324) 0.03 − − At the end of the year − − 3. Mr. Makarand Padalkar - KMP At the beginning of the year 25591 0.03 25591 0.03 ESOP exercised on August 25, 2016 21500 0.03 47091 0.06 Sale on August 30, 2016 (3043) 0.01 44048 0.05 Sale on August 31, 2016 (7539) 0.01 36509 0.04 Sale on September 1, 2016 (206) 0.00 36303 0.04 Sale on September 14, 2016 (3608) 0.01 32695 0.03 Sale on September 15, 2016 (1500) 0.00 31195 0.03 Sale on September 16, 2016 (2400) 0.00 28795 0.03 At the end of the year 28795 0.03 4. Mr. Onkarnath Banerjee - KMP At the beginning of the year − − − − ESOP exercised on December 28, 2016 93 0.00 93 0.00 At the end of the year 93 0.00 Oracle Financial Services Software – Annual Report 2016-17


  • Page 29

    The following Directors did not held any shares during the Financial Year 2016-17: • Mr. Richard Jackson - Independent Director • Mr. Harinderjit Singh - Director • Ms. Samantha Wellington - Director* • Mr. Derek H Williams - Director** • Ms. Kimberly Woolley - Director@ • Mr. Robert K Weiler - Director • Ms. Maria Smith - Director • Mr. Sridhar Srinivasan - Independent Director * resigned with effect from October 28, 2016 ** demise on July 23, 2016 @ appointed with effect from March 29, 2017 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 OSUs) Sl. Particulars of Remuneration OSUs Amount No. Mr. Chaitanya Kamat, Managing Director & Chief Executive Officer 1. Gross salary (a) Salary as per provisions contained in Section 17(1) of the 48461 Income-tax Act, 1961 (b) Value of perquisites u/s 17(2) Income-tax Act, 1961 22554 (c) Profits in lieu of salary under Section 17(3) Income-tax Act, – 1961 2. Stock Option (OSU) 25000 3. Sweat Equity – 4. Commission – as % of profit others, specify 5. Others, please specify – – Total (A) 25000 71015 Ceiling as per the Act (5% of the profits calculated under Section 198 860796 of the Companies Act, 2013) 27


  • Page 30

    B. Remuneration to other directors: (Amounts in ` thousand) Sl. Particulars of Name of Directors Total No. Remuneration Amount S Derek H Harinderjit Kimberly Maria Richard Robert K Samantha Sridhar Venkatachalam Williams* Singh Woolley** Smith Jackson Weiler Wellington@ Srinivasan 1. Independent Directors Fee for attending board − − − − − − − − − − /committee meetings Commission 3000 − − − − 2295 − − 1800 7095 Others, please specify − − − − − − − − − − Total (1) 3000 − − − − 2295 − − 1800 7095 2. Other Non-Executive directors Fee for attending board − − − − − − − − − − /committee meetings Commission − − − − − − − − − − Others, please specify − − − − − − − − − − Total (2) − − − − − − − − − − Total (B)= (1+2) 3000 − − − − 2295 − − 1800 7095 Total Managerial 78110 Remuneration (A+B) Overall Ceiling as per 172159 the Act (1% of the profits calculated under Section 198 of the Companies Act, 2013) * demise on July 23, 2016 ** appointed with effect from March 29, 2017 @ resigned with effect from October 28, 2016 C. Remuneration to Key Managerial Personnel other than MD / Manager / WTD: (Amounts in ` thousand) Sl. Particulars of Remuneration Key Managerial Personnel Total Amount No. Company CFO (`) Secretary 1. Gross salary (a) Salary as per provisions contained in Section 17(1) of the Income-tax 5167 9488 14655 Act, 1961 (b) Value of perquisites u/s 17(2) Income-tax Act, 1961 284 24434 24718 (c) 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 5451 33922 39373 In addition to the above, during the year 2016-17, 10500 OSU’s (Company Secretary - 500, CFO - 10000) were granted. VII. Penalties / Punishment / Compounding of Offences: There were no penalties / punishments / compounding of offences under any section of the Companies Act, 2013. Oracle Financial Services Software – Annual Report 2016-17


  • Page 31

    Annexure 2 Form No. 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 (“the Act”) 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, 2017, which were not at arm's length basis. 2. Details of material contracts or arrangements 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. Sailent 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: None Note: Since the transactions with wholly owned subsidiaries are exempt under section 188(1) of the Act, same are not included in the table above. for and on behalf of the Board of Directors of Oracle Financial Services Software Limited S Venkatachalam Mumbai Chairperson July 12, 2017 DIN: 00257819 29


  • Page 32

    Annexure 3 Secretarial audit report Form No. MR-3 FOR THE FINANCIAL YEAR ENDED 31ST MARCH 2017 [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 - 400063 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, 2017 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, 2017 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. Oracle Financial Services Software – Annual Report 2016-17


  • Page 33

    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 Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015. During the period under review the Company has complied with the provisions of the Act, Rules, Regulations, Guidelines, Standards, etc. to the extent applicable. I further report that: The Board of Directors of the Company is duly constituted with proper balance of Executive Directors, Non - Executive Directors and Independent Directors. 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 decisions are 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 12, 2017 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. 31


  • Page 34

    Annexure A To The Members ORACLE FINANCIAL SERVICES SOFTWARE LIMITED Oracle Park, Off Western Express Highway Goregaon (East), Mumbai - 400063 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 12, 2017 Place : Mumbai Oracle Financial Services Software – Annual Report 2016-17


  • Page 35

    Annexure 4 Annual report on corporate social responsibility activities for the financial year ended March 31, 2017 [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 strengthen communities. Through a combination of grants, sponsorships, and volunteer support, Oracle works to improve the quality of life in communities where it does business. The Company 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 at www.oracle.com/financial services CSR activities include, but are not limited to, the following: (i) 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, art and mathematics (STEAM); - protect the environment and wildlife; and - strengthen communities by addressing health, hunger, poverty, and a variety of other community needs. (ii) Develop, fund and execute Oracle Volunteers projects. (iii) Award in-kind grants of software, curriculum, training, and certification resources to educational institutions through 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. Harinderjit Singh Chairperson of the Committee Mr. S Venkatachalam Member Mr. Chaitanya Kamat 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 ` 16,769,694,867. 4. Prescribed CSR Expenditure (two percent of the amount as in item 3 above): ` 335,393,897 5. Details of CSR spent during the financial year: (a) Total amount spent during the financial year: ` 337,179,508 (b) Amount unspent: ` Nil 33


  • Page 36

    (c) Manner in which the amount spent during the financial year: During the year ended March 2017, Oracle spent the CSR funds across 98 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 38 projects / programs for 14 projects / 46 rural 98 projects/ identified. promoting a) education and programs for development programs employment enhancing vocation promoting projects / programs through skills, especially among children, environmental for eradicating 98 NGO women, elderly & differently sustainability, hunger, poverty partners abled persons and b) gender ecological balance, and malnutrition, equality, empowering women, protection of flora promoting setting up homes and hostels and fauna, animal preventive health for women and orphans; old age welfare, agro forestry, care and sanitation homes, daycare centers and such conservation of and making other facilities for senior citizens natural resources and available safe and measures for reducing maintaining quality of drinking water. inequalities faced by socially and soil, air and water. economically backwards groups. 2 Sector in which the Promoting Education & Gender Promoting Rural development project is covered Equality Environment and eradicating Sustainability poverty 3 Projects or programs Projects are implemented across several districts in multiple states (Andhra Pradesh, (1) Local area or other Arunachal Pradesh, Assam, Bihar, Chhattisgarh, Gujarat, Haryana, Jharkhand, Karnataka, (2) Specify the State and Kerala, Maharashtra, Madhya Pradesh, New Delhi, Odisha, Punjab, Rajasthan, Sikkim, District where projects Tamil Nadu, Telangana, Uttarakhand, Uttar Pradesh and West Bengal) and 1 Union territory or Programs were (Puducherry), and some projects are Pan India undertaken 4 Amount outlay (Budget) 128,185,267 46,321,291 134,842,143 309,348,701 Project or Programs wise (`) 5 Amount spent on the 128,185,267 46,321,291 134,842,143 309,348,701 projects or Programs (`) (1) Direct expenditure or 128,185,267 46,321,291 134,842,143 309,348,701 amount spent through implementing agency on projects or programs (`) (2) Overheads (`) 11,528,151 4,168,916 12,133,740 27,830,807 (Agency Fees (Agency Fees (Agency Fees for services) for services) for services) 6 Cumulative expenditure up 139,713,418 50,490,207 146,975,883 337,179,508 to the reporting period (`) 7 Amount spent: Direct or 139,713,418 50,490,207 146,975,883 337,179,508 through Implementing agency (`) Details of implementing agency: Charities Aid Foundation, India, 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: Not applicable. As per the requirements of Section 135 of the Companies Act, 2013 the Company has spent two percent of the average net profit of the three immediately preceding financial years. 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. Harinderjit Singh Chaitanya Kamat Chairperson of the Committee Managing Director & Chief Executive Officer Place: Mumbai Date: June 15, 2017 Oracle Financial Services Software – Annual Report 2016-17


  • Page 37

    Corporate governance report The detailed report on Corporate Governance of Oracle Financial Services Software Limited (“the Company”) for the financial year 2016-17 as per Schedule V of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (herein after referred to as “Listing Regulations”) is set out below: 1. Company’s philosophy on code of governance The Company believes in adopting and adhering to all applicable regulations and globally recognized corporate governance practices, and continuously benchmarking itself against such requirements. 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 Chairpersonship / Membership held as on March 31, 2017, was as under: Name of the Director Board Meetings Attendance Number of Number of Committee attended during at the last Directorships positions held in other the year AGM held on in other Companies September 7, Companies As Chairperson As Member 2016 Non-Executive, Independent Directors Mr. S Venkatachalam 7/7 Present 3 − 1 Chairperson (DIN: 00257819) Mr. Richard Jackson 7/7 Present 5 − − (DIN: 06447687) Mr. Sridhar Srinivasan 7/7 Present 1 − 1 (DIN: 07240718) Non-Executive, Non-Independent Directors Mr. Harinderjit Singh 4/7 Absent 1 − − (DIN: 06628566) Ms. Kimberly Woolley 1/1 Not Applicable 1 − − (w.e.f. March 29, 2017) (DIN: 07741017) Ms. Maria Smith 6/7 Absent 5 − − (DIN: 07182337) Mr. Robert K Weiler 6/7 Absent − − − (DIN: 01531399) Executive Director Mr. Chaitanya Kamat, 7/7 Present − − − Managing Director & Chief Executive Officer (DIN: 00969094) Notes: 1. The Chairperson of the Board of Directors is a Non-Executive, Independent Director and the Composition of the 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 Chairperson 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 Chairpersonships / Memberships 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. 35


  • Page 38

    3. Independent Directors are Non-Executive Directors as defined under Section 149 of the Companies Act, 2013 (“the 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. Mr. Derek H Williams, Non-Executive, Non-Independent Director of the Company, expired on July 23, 2016. Mr. Williams attended the Board Meeting held on May 11, 2016. 5. Ms. Samantha Wellington, Non-Executive, Non-Independent Director of the Company resigned with effect from close of business hours of October 28, 2016. Ms. Wellington attended the Board Meetings held on May 11, 2016, July 18, 2016 and September 7, 2016. Ms. Wellington was present at the Annual General Meeting of the Company held on September 7, 2016. 6. Ms. Kimberly Woolley was appointed as an Additional Director of the Company, in the capacity of Non-Executive, Non-Independent Director, with effect from March 29, 2017. 7. The familiarization program formulated for the Independent Directors is available on the website of the Company at: http://www.oracle.com/us/industries/financial-services/financial-familarization-program-2547373.pdf 8. None of the Non-Executive Directors hold any shares of the Company except Mr. S Venkatachalam who held 5000 shares of the Company as on March 31, 2017. 2.2 Board meetings held in 2016-17 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 2016-17, seven Board Meetings were held on the following dates: May 11, 2016, July 18, 2016, August 12, 2016, September 7, 2016, November 9, 2016, February 8, 2017 and March 29, 2017. Necessary quorum was present for all the meetings. During the year, a separate meeting of Independent Directors was held on February 8, 2017 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, 2017 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. Harinderjit Singh Children’s Discovery Museum, San Jose California Ms. Kimberly Woolley Ripon College Ms. Maria Smith Oracle CAPAC Services Oracle Corporation Australia Pty Limited Oracle EMEA Holdings Limited Oracle EMEA Limited Oracle Nederland B.V. Mr. Richard Jackson Novoview Ltd. Occidental Seguros Ltd. ageas SA/NV Medis Ltd. Great Britain China Centre Mr. Sridhar Srinivasan India Factoring and Finance Solutions Private Limited All directorships of Mr. Harinderjit Singh, Ms. Kimberly Woolley, Ms. Maria Smith and Mr. Richard Jackson 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 behavior for the Board and management of the Company. All the Directors and the Senior Managerial Personnel of the Company have confirmed compliance with the Code as of March 31, 2017. The code is available on the website of the Company at: http://www.oracle.com/us/corporate/investor-relations/cebc-176732.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. Oracle Financial Services Software – Annual Report 2016-17


  • Page 39

    4. To secure attendance of outsiders with relevant expertise, if it considers necessary. 5. To investigate into any matter within the powers conferred by a law or 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 statements are correct, sufficient and credible; 2. Recommending to the Board, the appointment, re-appointment and, if required, the replacement or removal of the statutory auditors of the Company, fixing their remuneration, and the terms of appointment; 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 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. Reviewing and monitoring the auditor’s independence and performance, and effectiveness of audit process; 8. Approving or any subsequent modification of transactions of the Company with related parties; 9. Scrutinizing inter-corporate loans and investments; 10. Valuation of undertakings or assets of the Company, wherever necessary; 11. Evaluating 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. Discussing with internal auditors of 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. Discussing 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. Looking into the reasons for substantial defaults in the payments to the depositors, debenture holders, shareholders (in case of non-payment of declared dividends) and creditors, if any; 18. Reviewing the functioning of the Whistle Blower mechanism; 19. Approving appointment of Chief Financial Officer (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. Reviewing the following information and reports: 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. 37


  • Page 40

    3.3 Composition, meetings and attendance of the committee During the financial year 2016-17, six meetings of the Audit Committee were held on May 11, 2016, July 18, 2016, August 12, 2016, November 9, 2016, February 8, 2017 and March 29, 2017. The details of the composition of the Committee as on March 31, 2017 and the member’s attendance at the Committee meetings during the year then ended were as under: Name of the Member Number of meetings attended Mr. Richard Jackson Chairperson, Non-Executive, Independent Director 6/6 Mr. S Venkatachalam Member, Non-Executive, Independent Director 6/6 Ms. Maria Smith Member, Non-Executive, Non-Independent Director 6/6 The Company Secretary acts as the Secretary to the Audit Committee meetings. The Managing Director & Chief Executive Officer, Chief Financial Officer, Chief Accounting Officer, Statutory Auditors, Internal Auditors and Legal Counsel are permanent invitees to the Audit Committee meetings. The Chairperson of the Committee was present at the Annual General Meeting held on September 7, 2016 to address the shareholders’ queries. 4. Nomination and remuneration committee 4.1 Brief description of terms of reference The terms of reference of the 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 policies relating to the remuneration of the directors, key managerial personnel and other employees of the Company; 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 of the Company, or who may be appointed in the 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; 8. To appoint any personnel of the Company and to formulate a sub-committee to act on behalf of the NRC; 9. To set criteria and conduct performance evaluation of the 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 2016-17, one meeting of the Nomination and Remuneration Committee was held on May 11, 2016. In addition to that, business was also dealt with by passing circular resolutions. The details of the composition of the Committee as on March 31, 2017 and the member’s attendance at the Committee meeting during the year then ended were as under: Name of the Member Number of meetings attended Mr. Richard Jackson Chairperson, Non-Executive, Independent Director 1/1 Mr. Harinderjit Singh Member, Non-Executive, Non-Independent Director 1/1 Mr. Sridhar Srinivasan Member, Non-Executive, Independent Director 1/1 The Chairperson of the Committee was present at the Annual General Meeting held on September 7, 2016. 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 the remuneration payable to the Managing Director & Chief Executive Officer 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. Oracle Financial Services Software – Annual Report 2016-17


  • Page 41

    4.4 Details of remuneration paid to the directors during the financial year 2016-17: (Amounts in ` thousand, except number of ESOPs) Name of the Director OSUs granted Salary Contribution to Commission Total under ESOPs Provident Fund paid Amount paid during the year and other funds Executive Director Mr. Chaitanya Kamat* 25000 47331 1796 NA 49127 Non-executive independent directors Mr. S Venkatachalam − − − 3000 3000 Mr. Richard Jackson − − − 2295 2295 Mr. Sridhar Srinivasan − − − 1800 1800 * 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, 2017, the Nomination and Remuneration Committee granted 61,250 Stock Options and 156,523 OFSS Stock Units (OSUs) under OFSS Stock Plan 2014 to the eligible employees including Director of the Company and its Subsidiaries as under: Date of Grant No. of Options Exercise price / OSUs granted (`) April 1, 2016 (OSUs) 750 5.00 June 28, 2016 (Stock Options) 61250 3392.85 June 28, 2016 (OSUs) 147023 5.00 November 18, 2016 (OSUs) 5000 5.00 December 15, 2016 (OSUs) 3000 5.00 January 25, 2017 (OSUs) 750 5.00 The terms of Employee Stock Options / OSUs granted to the Directors were as under: Name of the Director Scheme@ Options/OSUs Options/OSUs Options /OSUs Exercise Expiry Date outstanding as at exercised & outstanding as at price (`) April 1, 2016 allotted during March 31, 2017 the year Mr. S Venkatachalam 2011 6000 – 6000 1929.95 December 19, 2021 Mr. Chaitanya Kamat 2002 12000 – 12000 2333.45 October 24, 2020 2011 12000 – 12000 1929.95 December 19, 2021 2011 60000 20000 40000 3126.85 February 4, 2023 2011 80000 20000 60000 3076.85 September 12, 2023 Plan 2014 25000 – 25000 5.00 March 29, 2025 (OSUs) Plan 2014 25000 – 25000 5.00 November 4, 2025 (OSUs) Plan 2014 – – 25000 5.00 June 27, 2026 (OSUs) @ 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 OSUs were issued at `5 each. The options/OSUs 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, 2017 none of the Directors of the Company hold any equity shares of the Company, except Mr. S Venkatachalam, who held 5000 equity shares of the Company. 5. Stakeholders’ Relationship Committee The scope of the Stakeholders’ Relationship Committee is to review and address the grievances of the security holders of the Company in respect of complaints relating to share transfer, transmission, dematerialization and rematerialization of shares including complaints related to, non-receipt of annual report and non-receipt of declared dividends. 39


  • Page 42

    During the financial year 2016-17, three meetings of the Committee were held on May 11, 2016, November 9, 2016 and February 8, 2017. The details of the composition of the Committee as on March 31, 2017 and the member’s attendance at the Committee meetings during the year then ended were as under: Name of the Member Number of meetings attended Mr. S Venkatachalam Chairperson, Non-Executive, Independent Director 3/3 Mr. Chaitanya Kamat Member, Executive, Non-Independent Director 3/3 Mr. Makarand Padalkar Member, Chief Financial Officer 3/3 Details of shareholders’ complaints received, resolved and outstanding during the financial year 2016-17: Particulars No. of Complaints Complaints outstanding on April 1, 2016 Nil Complaints received during the financial year ended March 31, 2017 17 Complaints resolved during the financial year ended March 31, 2017 17 Complaints outstanding on March 31, 2017 Nil Number of pending share transfers as on March 31, 2017 – Nil. Mr. Onkarnath Banerjee, 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 details of the composition of the Committee as on March 31, 2017 and the member’s attendance at the Committee meetings during the year then ended were as under: Name of the Member Number of meetings attended Mr. S Venkatachalam Chairperson, Non-Executive, Independent Director 3/3 Mr. Makarand Padalkar Member, Chief Financial Officer 3/3 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 or OFSS Stock Units by eligible employees. During the financial year 2016-17, thirteen meetings of the Committee were held on April 12, 2016, May 25, 2016, June 29, 2016, August 3, 2016, August 25, 2016, September 21, 2016, October 5, 2016, November 9, 2016, December 28, 2016, January 18, 2017, February 15, 2017, February 17, 2017 and March 15, 2017. The details of the composition of the Committee as on March 31, 2017 and the member’s attendance at the Committee meetings during the year then ended were as under: Name of the Member Number of meetings attended Mr. S Venkatachalam Chairperson, Non-Executive, Independent Director 13/13 Mr. Chaitanya Kamat Member, Executive, Non-Independent Director 13/13 Mr. Sridhar Srinivasan Member, Non-Executive, Independent Director 13/13 Mr. Makarand Padalkar Member, Chief Financial Officer 13/13 8. Risk management committee The scope of Risk Management Committee is to formulate Risk Management Policy of the Company to identify elements of risks, if any, which in the opinion of the Board might threaten the existence of the Company. The Audit Committee and the Board can refer certain matters to the Risk management Committee as they deem fit. The Committee invites the representatives of internal auditor and other stakeholders / executives as needed for the meetings. Oracle Financial Services Software – Annual Report 2016-17


  • Page 43

    The composition of Committee as on March 31, 2017 was as under: Name of the Member Mr. Sridhar Srinivasan Chairperson, Non-Executive, Independent Director Mr. Chaitanya Kamat Member, Executive, Non-Independent Director Mr. Makarand Padalkar Member, Chief Financial Officer Notes: Ms. Samantha Wellington, Director and Chairperson of the Risk Management Committee resigned with effect from October 28, 2016. Mr. Sridhar Srinivasan was inducted in the Risk Management Committee and appointed as the Chairperson with effect from November 9, 2016. 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 2016-17, one meeting of the Committee was held on May 11, 2016. Additionally, business was also dealt with by passing circular resolution. The details of the composition of the Committee as on March 31, 2017 and the member’s attendance at the Committee meeting during the year then ended were as under: Name of the Member Number of meeting attended Mr. Harinderjit Singh Chairperson, Non-Executive, Non-Independent Director NA Mr. Chaitanya Kamat Member, Executive, Non-Independent Director 1/1 Mr. S Venkatachalam Member, Non-Executive, Independent Director 1/1 Notes: Ms. Samantha Wellington, Director and Member of the Committee resigned with effect from October 28, 2016. Mr. Harinderjit Singh was inducted and appointed as the Chairperson with effect from November 9, 2016. 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 Business Responsibility policy. The Managing Director and Chief Executive Officer acts as the Chairperson 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. no. +91 22 6718 3000 Fax no. +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 2015-16 The Westin Garden City, International Business Park Wednesday September 7, 2016 2.30 p.m. Oberoi Garden City, Goregaon (East), Mumbai 400063 2014-15 The Westin Garden City, International Business Park Friday September 11, 2015 2.30 p.m. Oberoi Garden City, Goregaon (East), Mumbai 400063 2013-14 The Westin Garden City, International Business Park Friday September 12, 2014 2.30 p.m. Oberoi Garden City, Goregaon (East), Mumbai 400063 (i) The details of Special Resolutions passed in Annual General Meetings held during the last three years are given below: - No special resolution was passed in the Annual General Meeting held in the financial years 2013-14 and 2014-15. 41


  • Page 44

    - Gist of special resolution passed at the Annual General Meeting held on Wednesday, September 7, 2016, in the financial year 2015-16, is as under: Payment of Commission to the Directors of the Company (excluding the Managing Director and Whole-time Directors), not exceeding in the aggregate one per cent per annum of the net profits of the Company, which shall be calculated in accordance with the provisions of Sections 198 of the Companies Act, 2013; for a further period of five years from April 1, 2017 to March 31, 2022. (ii) There was no Extra-Ordinary General Meeting held during the last three financial years. (iii) There was no matter requiring approval of the Members through Postal Ballot during the financial year ended March 31, 2017. (iv) No special resolution is currently proposed to be conducted through postal ballot. 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 online 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 at 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 disclosures 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, 2016. 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 20, 2017 at 2.30 p.m. Shri Bhaidas Maganlal Sabhagriha Bhaktivedanta Swami Marg Vile Parle (West), Mumbai 400056 Financial Year April 1, 2016 to March 31, 2017 Date of Book Closure Thursday, September 14, 2017 to Wednesday, September 20, 2017 (both days inclusive) Dividend Payment Date Not Applicable Oracle Financial Services Software – Annual Report 2016-17


  • Page 45

    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 - 400001 National Stock Exchange of India Limited (NSE) OFSS Exchange Plaza, Bandra-Kurla Complex, Bandra (East), Mumbai - 400051 The annual listing fees for the financial year 2016-17 have been paid to both the exchanges. 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 101, 247 Park L B S Marg, Vikhroli (West), Mumbai 400083 Tel. no. +91 22 49186000 Fax no. +91 22 49186060 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 year under review, one request was received for transfer of 16,000 shares in physical mode. 14.5 Reconciliation of share capital audit A 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, 2016 to March 31, 2017 are given below: Month and Year BSE NSE High (`) Low (`) Volume of High (`) Low (`) Volume of Shares Shares April 2016 3669.00 3427.10 73083 3667.30 3421.05 665057 May 2016 3656.00 3320.25 46983 3658.00 3319.10 651377 June 2016 3516.00 3325.10 73244 3503.00 3325.00 498571 July 2016 3772.95 3419.00 48697 3779.50 3417.40 569888 August 2016 3985.65 3440.00 137165 3985.10 3440.00 1116437 September 2016 3500.00 3100.10 47454 3484.95 3179.25 484159 October 2016 3357.00 3105.00 27319 3353.95 3168.30 785651 November 2016 3230.00 2795.75 56012 3240.00 2808.40 2042319 December 2016 3220.00 2985.10 33260 3223.00 2984.05 886359 January 2017 3396.55 3090.00 31343 3382.95 3097.15 744648 February 2017 3777.90 3298.00 56549 3776.45 3280.65 1228075 March 2017 4088.60 3621.30 8651908 4088.00 3585.95 972177 43


  • Page 46

    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 2016-17. 9,200 4,000 8,775 3,700 OFSSL Price (`) NIFTY 50 8,350 3,400 7,925 3,100 7,500 2,800 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 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 1,200 Relative movement 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 Jul 2017 OFSSL Price NIFTY 50 Oracle Financial Services Software – Annual Report 2016-17


  • Page 47

    16. Distribution of shareholding as on March 31, 2017 Paid-up shares in capital (in `) Number of % to total No. of Shares Paid-up value (Face % of Total no. Shareholders shareholders value `5 each) of shares Up to 2500 21931 97.26 1873962 9369810 2.20 2501 to 5000 245 1.09 870618 4353090 1.02 5001 to 10000 161 0.71 1159159 5795795 1.36 10001 to 20000 105 0.47 1493356 7466780 1.76 20001 to 30000 31 0.14 781744 3908720 0.92 30001 to 40000 28 0.12 995103 4975515 1.17 40001 to 50000 9 0.04 401361 2006805 0.47 50001 to 100000 15 0.07 1016613 5083065 1.20 100001 & Above 23 0.10 76514490 382572450 89.90 Total 22548 100.00 85106406 425532030 100.00 17. Shareholding pattern as on March 31, 2017 Category of shareholders Number of shares % Promoters: Oracle Global (Mauritius) Limited 63051197 74.09 Mutual Funds / UTI 3004517 3.53 Financial Institutions / Banks 12776 0.02 Central Government 4000 0.00 Foreign Institutional Investors 592269 0.70 Bodies Corporate 596019 0.70 Individuals- i. Holding nominal share capital up to ` 2 lakh 4444320 5.22 ii. Holding nominal share capital in excess of ` 2 lakh 465348 0.55 NRI (Repatriate) 169313 0.20 NRI (Non-Repatriate) 676749 0.79 Foreign Mutual Fund 185724 0.22 Clearing Member 34425 0.04 Directors / Relatives 6000 0.01 Foreign Banks 13808 0.02 HUF 38491 0.04 Market Maker 6257 0.01 Foreign Portfolio Investor (Corporate) 11629789 13.66 Trusts 173644 0.20 Foreign Nationals 1760 0.00 Total 85106406 100.00 During the financial year 2016-17: 1. The Company issued and allotted 250,228 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 equity 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, 2017, 99.45% of the shares of the Company were in electronic form and 99.62% of the shareholders held shares in electronic form. 45


  • Page 48

    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 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. The Whistle Blower mechanism forms part of the Code of Ethics and Business Conduct and the same is disclosed on the Company’s website at http://www.oracle.com/us/corporate/investor-relations/cebc-176732.pdf 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 2016-17, the Company did 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. The Company has formulated and adopted a dividend distribution policy in accordance with the extant provisions of Regulation 43A of Listing Regulations setting forth the parameters that shall be considered for declaration of dividend and the same is disclosed on the Company’s website at: http://www.oracle.com/us/industries/financial-services/ofss-dividend-distribution-policy-3125465.pdf h. 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 No. of Shares Shareholders of ` 5 each Aggregate number of Shareholders and the outstanding shares in the suspense 2 40 account as on April 1, 2016 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 account as 2 40 on March 31, 2017 The Voting rights on the outstanding shares in the suspense account shall remain frozen till the rightful owner of such shares claims the shares. i. Unclaimed Dividend: During the year under review, the Ministry of Corporate Affairs notified provisions relating to unpaid / unclaimed dividends under Sections 124 and 125 of Companies Act, 2013 and Investor Education and Protection Fund (Accounting, Audit, Transfer and Refund) Rules (“the Rules”). As per the Rules, dividends not encashed / claimed within seven years from the date of declaration are to be transferred to the Investor Education and Protection Fund (“IEPF”) Authority. The new IEPF Rules mandate companies to transfer shares of shareholders whose dividends remain unpaid / unclaimed for a continuous period of seven years to the demat account of IEPF Authority. The shareholders whose dividend / shares are transferred to the IEPF Authority can now claim their shares / dividend from the IEPF Authority. In accordance with the new IEPF Rules, the Company has sent notice to all shareholders whose shares are due to be transferred to the IEPF Authority and published requisite advertisement in the newspapers. The list of shareholders whose shares are due to be transferred to IEPF is uploaded on Company’s website at www.oracle.com/financialservices The Company has uploaded the details of unpaid / unclaimed amounts lying with the Company as on September 7, 2016 (date of last Annual General Meeting) on the Company’s website at www.oracle.com/financialservices and on the website of the Ministry of Corporate Affairs at www.iepf.gov.in Oracle Financial Services Software – Annual Report 2016-17


  • Page 49

    20. Discretionary requirements pursuant to regulation 27 of the listing regulation: a. Separate posts of Chairperson and Chief Executive Officer: the Chairperson of the Board is a Non-Executive Director and his position is separate from that of the Managing Director and Chief Executive Officer. b. Reporting of Internal Auditor: The Internal Auditor reports to the Audit Committee. 21. Foreign exchange risk A substantial portion of our revenues is generated in foreign currencies while a majority of our expenses are incurred in Indian Rupees (INR), with the remaining expenses are incurred in US Dollars (USD), Euro (EUR), Australian Dollars (AUD), Singapore Dollars (SGD), British Pounds (GBP), and other foreign currencies. The Company covers the foreign currency exposure through forward contracts as per our treasury management policy. The Company follows a conservative philosophy for our treasury. The surplus funds are invested predominantly in time deposits with Indian and foreign banks with high credit rating within limits on exposure to any one particular bank. 22. 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. no. +91 22 6718 3000 Fax no. +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. 47


  • Page 50

    CEO & CFO certificate May 16, 2017 The Board of Directors Oracle Financial Services Software Limited Mumbai CEO & CFO Compliance Certificate pursuant to Regulation 17 (8) and Part B of Schedule II of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulation, 2015 We the undersigned, in our respective capacities as Chief Executive Officer and Chief Financial Officer of Oracle Financial Services Software Limited (“the Company”), certify that: A We have reviewed the financial statements and the cash flow statement of the Company for the quarter and year ended on March 31, 2017 and that to the best of our knowledge and belief state that: 1. These statements do not contain any materially untrue statement or omit any material fact or contain any statements that might be misleading; 2. These statements together present a true and fair view of the Company’s affairs and are in compliance with the existing accounting standards, applicable laws and regulations. B We further state that to the best of our knowledge and belief, no transactions entered into by the Company during the quarter and year ended on March 31, 2017 are fraudulent, illegal or violative of the Company’s code of conduct. C We are responsible for establishing and maintaining internal controls for financial reporting and evaluating the effectiveness of the internal control systems over the financial reporting of the Company and we have disclosed to the auditors and the Audit Committee, deficiencies in the design or operation of such internal controls, of which we are aware and the steps we have taken or propose to take to rectify these deficiencies. D We have indicated, to the auditors and the Audit Committee: 1. Significant changes in internal control over financial reporting during the quarter and year ended on March 31, 2017; 2. Significant changes in accounting policies during the quarter and year ended on March 31, 2017; and that the same have been disclosed in the notes to the financial statements; and 3. Instances of significant fraud, of which we have become aware and the involvement therein of the management or an employee having a significant role in the Company’s internal control system over financial reporting. For Oracle Financial Services Software Limited Chaitanya Kamat Makarand Padalkar Managing Director & CEO Chief Financial Officer DECLARATION REGARDING COMPLIANCE BY BOARD MEMBERS AND SENIOR MANAGEMENT PERSONNEL WITH THE COMPANY’S CODE OF CONDUCT As provided under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board Members and Senior Management Personnel have confirmed compliance with the Code of Ethics and Business Conduct for the financial year ended March 31, 2017. For Oracle Financial Services Software Limited Chaitanya Kamat Managing Director & CEO Mumbai, May 16, 2017 Oracle Financial Services Software – Annual Report 2016-17

  • View More

Get the full picture and Receive alerts on lawsuits, news articles, publications and more!