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    ANNUAL REPORT 2017


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    Corporate InformatIon Board of Directors Company Secretary Ashraf M.A. Elarman (Managing Director) Rajiv L. Jha (DIN 07206306) David Brian Dyas (Director) Statutory Auditors (DIN 07437186) Price Waterhouse & Co Bangalore LLP Prakash Kulathu Iyer (Independent Director) Chartered Accountants (DIN 00529591) Rishi Kant Srivastava (Independent Director) Secretarial Auditors (DIN 06708853) Ranjeet Pandey & Associates Rajat K. Jain (Director) (DIN 00046053) Company Secretaries Rodney Noonoo (Director) Internal Auditors (DIN 07690361) Ernst & Young LLP Daniela Cosette Untescu (Director)* (DIN 07143033) Bankers Lisa Marie Oliver (Director)** ICICI Bank (DIN 07900714) *ceased from directorship effective 1st April 2017 Citibank NA th **appointed as additional director effective 10 August 2017 HDFC Bank Ltd. BNP Paribas Board Committees: State Bank of India Audit Committee Bank of America Rodney Noonoo (Chairman) Registrars & Share Transfer Agents Prakash Kulathu Iyer MCS Share Transfer Agent Limited Rishi Kant Srivastava F-65, Okhla Industrial Area, Phase I, New Delhi - 110020 Nomination and Remuneration Committee Ashraf M.A. Elarman (Chairman) Registered Office 5th Floor, Block One, Prakash Kulathu Iyer Vatika Business Park, Sector 49, Rishi Kant Srivastava Sohna Road, Gurgaon - 122018 David Brian Dyas Haryana (India) Tel. : 91-124-39400400 Corporate Social Responsibility Committee Fax : 91-124-3371225 Rodney Noonoo (Chairman) Website Rishi Kant Srivastava www.xerox.com/india Ashraf M.A. Elarman David Brian Dyas Investor Relations Email ID Stakeholders Relationship Committee askus@xerox.com Rajat K. Jain (Chairman) Corporate Identity Number Rishi Kant Srivastava U72200HR1995PLC049183 Prakash Kulathu Iyer Ashraf M.A. Elarman Key Managerial Personnel Ashraf M.A. Elarman (Managing Director) Satpreet Singh Ahuja (Chief Financial Officer) Rajiv L. Jha (Company Secretary & GM Legal)


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    board’S report TO THE MEMBERS OF XEROX INDIA LIMITED next generation services in Managed Print Services, Centralized Print Services, Enterprise Content Management, Communication Your Directors have the pleasure in presenting the Twenty First and Marketing Services. (21st) Annual Report of Xerox India Limited (“the Company”) along with the audited Financial Statements for the Financial Our Managed Print Services enable customers to Print for less Year ended 31st March 2017. and print less. We help customers organise content, secure and integrate systems, cut costs and streamline processes. Financial Results The Centralized Print Services help customer take a fresh look (` in Lacs) at the in-house print and mail operations. Customers can start with an assessment of the current state, and then Xerox will Particulars 31.03.2017 31.03.2016 help customers drive down costs and optimise print and digital document infrastructure. Under Enterprise Content Management, Gross Revenue 54,245.11 52,944.65 Xerox will help customers easily organise, classify and manage Profit / (Loss) Before Tax 8346.83 2,964.97 documents and data with cloud and on-premise solutions. The Xerox Communication and Marketing Services helps improve Less: Current Tax 2668.31 1,346.33 customer’s experience and the company’s bottom line by getting the right message to the right person at the right time. Xerox Prior years’ tax write back 56.67 - helps streamline the process to produce and deliver multichannel Deferred Tax (159.15) (272.47) communications. Profit / (Loss) After Tax 5894.34 1,891.11 Office Solutions The Company has posted a profit before tax of ` 8346.83 Lacs Our office printing technology and solutions deliver convenience (including profit arising out of sale of XRCI division) and a profit and ease of use to improve the way our customers work. after tax of Rs. 5894.34 Lacs in the financial year under Report ConnectKey Technology represents a new approach to as against profit before tax of ` 2964.97 Lacs and profit after the multifunction printer, to help bring more convenience, tax of ` 1891.11 Lacs in the previous year, thereby recording a productivity, security and cost control to the customer’s business. substantial increase of 181.51% and 211.69%, respectively, while We’ve thought beyond just the hardware and we’ve focused on the gross revenue posted in the year under report is ` 54,245.11 the software that runs across a suite of multifunction printers, Lacs as compared to the gross revenue of ` 52,944.65 Lacs in providing significant improvements to both the user interface and the previous year, a marginal increase of 2.46%. the systems management and integration capabilities that run Dividend behind the scenes. These capabilities provide immediate value out of the box for small-to-medium sized businesses and larger In light of (i) the planned cash utilisation in large GDO contracts; enterprises alike, and only get more valuable when looking at (ii) other expansion plans; and (iii) pending tax/regulatory more robust systems integration or fleet management. demands of your Company, it is required to conserve the available resources. Accordingly, the Board of Directors of your Company Fundamentally, these capabilities boil down to simplifying the do not recommend a dividend for the financial year ended way customer’s business works and start incorporating Intelligent 31st March 2017. Documents into the organization today with Search, Security, Connectivity and Collaboration through Xerox ConnectKey Reserves Technology. Pursuant to the provisions of the Companies Act, 2013, your We sell a wide range of color and black-and-white multifunction, Directors have decided to carry forward the profits for the year printers & copiers. Our office segment serves global, national and under review in the Statement of Profit and Loss. small to midsize commercial customers as well as government, education and other public sector customers. Office systems and Operations services, which include monochrome devices at speeds up to 90 ppm and color devices up to 70 ppm, include our family of Xerox has world-renowned capabilities, industry-leading WorkCentre® digital multifunction systems and Phaser® series technology and knowhow, and a talented, high-performing team of printers for the specific customer needs. We offer a complete dedicated to delivering exceptional service to customers and range of services and solutions in partnership with independent partners. software vendors that allow our customers to analyze, streamline, Our business operations solutions use innovative technologies automate, secure and track their digital workflows, which we that help processes flow reliably and efficiently so that customers then use to identify the most efficient, productive mix of office can focus on their strategic agenda. Our world-renowned equipment and software for that business, helping to reduce the expertise provides a basis for consistent, high-quality output and customer’s document related costs. 2 ANNUAL REPORT 2017


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    STATUTORY REPORTS FINANCIAL STATEMENT Production Solutions With Xerox’s MPS, customers gain control of their document processes through our proven, three-step approach, which is The print industry continues its rapid transformation, fuelled by based on helping thousands of organisations get more out of shorter run lengths, increased personalisation, faster turnarounds their print infrastructure investment. and demanding quality. Xerox solutions help address all the digital printing services and multi-channel communication needs We also help our clients with on-site print centre support which as customers look to navigate a changing market to lead and consists of on-demand printing and copying, complete finishing, delight their customers. production printing, mail & distribution and e-publishing. Backed by innovation capabilities, we provide the most comprehensive In the production category, we provide High End Digital Colour portfolio of MPS services in the industry, supporting large, mid- and Monochrome printing systems designed for commercial size enterprises. printers, jobbers, customers in the publishing, security printing and graphic arts industry and for large enterprises. These high Over the past many years, we have been consistently recognized end devices enable digital on demand printing, digital full colour as an industry leader by several major analyst firms including printing and enterprise printing. Xerox Production Portfolio Gartner, IDC, Quocirca and Forrester. ranges from Entry Production Colour systems of 60 pages per C&MS delivers end-to-end outsourcing for marketing, logistics minute (ppm) to High End Production Colour systems of 150 and distribution services that help clients communicate with ppm which includes the Flagship Xerox iGen 5 150 Press. The their customers and employees more effectively. We deliver Mono devices range from Light Production to High End cut sheet communications through traditional routes, such as print as well equipment capable of printing from 95 to 314 ppm. The production as through a growing number of multimedia channels including cut sheet devices are complemented by a complete line of web and email. We help our clients identify how their customers Mono & Colour continuous feed printers with speed up to 254 want to be engaged, tailor content, translate content, personalize metres per minute and together constitute the largest production communication, select the appropriate channel, execute on portfolio in the industry with the inkjet range of products in our campaigns and measure the resulting success. portfolio to address this rapidly growing segment of market. We also offer a variety of pre-press and post-press options and the As part of DTPS, we help our clients automate and digitise paper industry’s broadest set of workflow software. Our software digital based processes making documents available in a workflow technology, combined with total document solutions and services leading to increased business velocity due to reduced processing enable personalization and printing on demand, delivers value time with higher traceability and accessibility through online that improves our customers’ business results. The production archiving. We offer solutions that introduce process improvement devices deliver enhanced image quality with HD resolution, and workflow automation across the entire lifecycle of the end higher productivity, better media handling and improved cost customer right from customer acquisition & on-boarding to efficiencies to our customers. With one of the largest portfolio of customer service. products, the company is well poised to reinforce its position in the market. Paper Xerox sells variety of Xerox Branded Copy/ Print/ Digital Paper Global Document Outsourcing to customers for use in their document processing requirements. Global Document Outsourcing (GDO) helps clients optimize We are into both Commodity & Digital Paper along with Wide their print infrastructure and simplify their communication and format rolls. The market for copy/ print paper is highly competitive business processes so that they can grow revenue, reduce costs, and revenues are significantly impacted by pricing. Our strategy enhance customer experience and operate more effectively. Our is to charge a premium over mill wholesale prices and offer end-to-end document outsourcing portfolio consists of Managed better quality, which is adequate to cover our costs. We are also Print Services (MPS), Communication and Marketing Services engaging newer sources of paper and re-launching brands as (C&MS) and Document Transaction Process Services (DTPS). Colotech Digital range. Overarching theme of Document Outsourcing is to offer our Whatever is the type of document and device – Copier, Printer, clients a clear path to digital transformation in their internal and Production System, Wide Format machines, there is a Xerox market facing operations. Paper to suit from great looking business proposals to everyday In MPS, we help our clients to make their print infrastructure office prints, the Xerox range delivers results. Xerox digital colour more secure, optimize costs, increase productivity and meet their papers are the benchmark for colour digital printing. They are environmental sustainability goals while supporting their mobility designed for use in a wide range of dry toner colour printers and needs of the ever changing workplace. Our Next Generation MPS copiers of all make. Our Wide format rolls are able to produce approach is built on three stages providing an effective roadmap exceptional images of all wide printing needs. to manage clients’ information today and provide ongoing insight We market and sell the products with all India Xerox Paper for continuous innovation tomorrow. At the highest level of Next Partner Network which are present all across the country. Generation MPS, our clients can benefit from the capabilities We also have presence in many Government and Blue-Chip of automating their workflows leveraging the MPS environment corporate customers where we are supplying the Xerox branded which they have already invested in. paper for years. ANNUAL REPORT 2017 3


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    Customer Service Organization to print as few or as many as needed, when needed, resulting We believe that our service force represents a significant in reduced energy, paper use and the potential for excess competitive advantage because it is continually trained on our inventory. Our production printers are designed with safety and products and is equipped with unique and world-class diagnostic the environment in mind, with emissions of chemicals such as tools with seasoned technical specialist to support our customers ozone and dust strictly controlled to the same level of Xerox® and providing consistent and superior level of service. office machines, well below regulatory requirements. We have taken several initiatives over the last few years that Reducing the environmental footprint of our operations have helped us enhance our service levels and drive better and beyond experience for our customers and partners. We have taken initiatives on retention of existing customers and also increase Reducing Our Companywide Carbon Footprint the usage of Xerox products. In 2003, we made a public commitment to reduce GHG emissions We launched Service Modernisation through which we could – our carbon footprint – and launched an internal program known diagnose machines remotely and offer billing automation, based as Energy Challenge 2012 with the goal of reducing GHG on the same proactively provide service and support resulting in emissions across all company operations 10 percent by 2012. At enhanced customer experience. In addition to that, we ensure program end, we cut emissions by 42 percent – that is 210,000 that the Customer service escalations flow to a thorough process tons of carbon dioxide equivalents (CO2e) – and reduced energy of monitoring till timely closure. The launch of Partner Certification consumption by 31 percent. Our new corporate-wide goal is to program was linked to Partner Service Delivery capabilities reduce energy consumption 20 percent by 2020 (from a 2012 and that is helping us provide uniform service delivery by all baseline). partners across geography. Special focus was given on the skill Emulsion Aggregation Toner (EA Toner) enhancement of partner technical team through face-to-face training as well as the enhanced usage of PartnerNet portal for EA Toner is a breakthrough Xerox® technology for producing online training. This has helped us improve the skill levels of our toner. Its small particle size and uniform shape enables high partners while improving speed and reducing cost to train. All quality images with less toner mass per page and lower fusing these initiatives are helping us deliver uniform and faster service temperatures needed during printing. The manufacture of EA delivery across region. We also track the customer satisfaction Toner generates 28% fewer GHGs than the manufacture of levels with regular surveys. conventional toner. Initiatives on Sustainability from the Company Reducing Supplies Waste At Xerox, when we simplify the way work is done, we remove Our Green World Alliance (GWA) initiative - central to our unnecessary resources and activities and reduce waste. commitment to waste-free products - provides a collection and Simplicity and sustainability work together to deliver social, reuse-recycling program for spent imaging supplies. Currently, financial, and environmental benefits. more than 35 countries participate in the Xerox Green World Xerox contributes to reduce the environmental footprint of our Alliance. Each has its own GWA country website that describes products, services and operations. To do so requires collaboration the processes available to the customer or the appropriate with stakeholders and value chain partners including customers, points of contact for more information. Worldwide, our customers employees, suppliers, and governmental and non-governmental returned over 2.1 million cartridges, toner containers and other organizations. Our innovative products, services, and processes used supply items in 2015, equating to 4,400 metric tons. More advance the sustainability effort in our own operations and in information on our consumables returns program is available on workplaces, communities, and cities around the world. the Green World Alliance website. Document Management Solutions and Employee Tackling the Problem of E-waste Engagement Tools We pioneered the practice of reuse, remanufacturing and Xerox® Managed Print Services (MPS) and the Free Flow® recycling of imaging equipment. Machines are designed for easy Digital Workflow Collection make the workplace more productive, disassembly, durability, contain fewer parts, and are controlled cost-effective, and energy-efficient by streamlining the equipment for chemical content. Equipment returned to Xerox at end-of life profile and document processes. The graphs and visuals in the can be remanufactured to as-new performance specifications Xerox® Print Awareness Tool (PAT) provide users with real-time that meet our strict product quality standards. Xerox joined the information on how intended print decisions influence financials Sustainable Electronic Recycling International (SERI) coalition as and the environment and offer a preferred alternative. PAT uses a founding member of the “R2 Leader Program”. SERI is a non- gamification to change behaviours and engage your employees profit organization devoted to advancing sustainable electronics in sustainability efforts. The tool can be made more impactful by reuse and recycling globally. R2 Leaders commit to support personalizing it to include company-specific communication and responsible and sustainable electronics repair and recycling as information about the sustainability goals and accomplishments. described in the R2 Standard. Additionally, R2 Leaders, including Digital Production Technology Xerox are taking leadership roles in projects for responsible Digital Production Technology and the variable print feature allow reuse and recycling around the globe. for personalization of output, proof without printing, and the ability 4 ANNUAL REPORT 2017


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    STATUTORY REPORTS FINANCIAL STATEMENT Xerox Corporation’s recognition in 2016: Women Empowerment • Achieved an A-on the CDP S&P 500 Climate Change Report • Women are the Architects of the society. Our partnership with Samarpan Foundation aims at assisting women • Included in Ethisphere Institute’s list of the World’s Most to empower themselves which will not only create the Ethical Companies possibility of a better life for them, but will also equip them • Included in the FTSE4GoodIndex to have confidence and individuality. This is an initiative • Included in the U.S. Newsweek Green Rankings to encourage and enable women to be independent and to look forward to a better way of living, by giving them • Included on the Dow Jones Sustainability World and North opportunities to learn a skill through which they can earn America Indices as well. • Included on the Euronext Vigeo Eiris Index - World 120 Community Healthcare • Included on the GeSIGlobal CSR Leadership Index • In order to ensure delivery of quality general healthcare and • Ranked in FORTUNE’s World’s Most Admired Companies maternal newborn, child health and nutrition services to the vulnerable segments of population living in urban slums of • Ranked #7 on Corporate Responsibility Magazine’s “100 Delhi/NCR, we have partnered with Dr. A V Baliga Memorial Best Corporate Citizens List“; #3 in the environmental Trust to implement a model of comprehensive (preventive, category promotive and curative) service delivery through Life Line • Received a Bronze rating from FIRA Clinics. The primary target groups of this project are women Xerox India is cognizant of its responsibility to augment the and children although the entire community will benefit. sustainable development of the country and accordingly work towards addressing social issues with the aim to fulfil, in letter and IT and Other Support Services spirit, the role of a Responsible Corporate Citizen. In conjunction Your Company continues to successfully provide information with partner organisations, we have launched initiatives in the technology support services for various software applications, areas of education, disaster relief, community health care, including their day-to-day maintenance, query resolution, and women empowerment and environment. other support activities, including administration, configuration and test activities. Our CSR initiatives include the following: During the year under Report, your company grew its revenue Education & crucial life skills: from its support export services. • Our on-going project with Magic Bus Foundation, now in its third year, empowers 400 children in crucial life skills Sale/Transfer of the Contract R&D Support Services like education, health, gender equality and socio-emotional Division/Change in Business learning. Our partnership with Magic Bus is a part of Xerox’s commitment to empower disadvantaged young people During the financial year 2016-17, in light of the global with the skills and confidence they need to fulfil their true restructuring of Xerox Corporation (ultimate parent company of potential. Xerox India Limited), the technology and services arms of Xerox Corporation were required to be separated. Disaster Relief Accordingly, one of the units/divisions/segments of your Company • This is an on-going partnership with Goonj in the area of namely Xerox Research Centre India (XRCI), located in Bengaluru disaster relief for collection of relief materials for victims in (India), which was into providing contract R&D support services to earthquake and flood affected areas. In the year 2016-17, Xerox Corporation which is an activity akin to the services domain we donated printers and cartridges to needy organisations of the overall operations of Xerox Corporation, got separated from and schools through Goonj. your Company w.e.f. 1st January 2017. Environment The said separation had taken place by way of sell/transfer of the • Xerox India views environmental preservation as a vital said unit/undertaking to one of the group entities namely Xerox aspect of its CSR strategy. Hence efforts in conserving Business Services India LLP (erstwhile Xerox Business Services biodiversity and ecosystems as well as creating awareness India Pvt. Ltd.) as a going concern on slump sale basis pursuant of their role in a healthy society are a mainstay of our to the requisite approval of the shareholders of the Company (by CSR focus. Xerox India has partnered with WWF-India way of postal ballot) granted on 13th December 2016 including for conducting Eco-trails as an initiative where children shareholders’ approval for the related party transaction w.r.t. such not just learn but also enjoy their rendezvous with nature. sale/transfer under the applicable provisions of the Companies Our experience of the Eco-trails conducted by WWF India Act, 2013 read with applicable Rules thereunder. in 2016-17 has reinforced our belief that children have an The said sale/transfer had taken place at a value arrived at based innate ability to bond and learn from the environment and if on the valuation as carried out by an independent agency/valuer nurtured correctly, this can lead to sustainable thinking and under the provisions of the Companies Act, 2013 and rules made ecological literacy. thereunder. ANNUAL REPORT 2017 5


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    With this sale/transfer, effective 1st January 2017, the operational v. that the internal financial controls to be followed by the activities of your Company now comprise of the technology- Company, were in place and that such internal financial based business and providing of allied services. controls are adequate and were operating effectively; and Human Resources Development vi. that proper systems to ensure compliance with the provisions of all applicable laws was in place and that such The Company has continuously aligned its structures to changing systems were adequate and operating effectively. business needs; we strive to attract the best talent as well as promote internal talent to higher roles and responsibilities. Corporate Social Responsibility (CSR) Xerox’ people-centric focus provides an open work environment, Your Company has a Corporate Social Responsibility Committee fostering continuous improvement and functional and technical of Directors in accordance with the provisions of Section 135 of skill development. the Companies Act, 2013, read with the Companies (Corporate The Company’s HR policy commits to providing a conducive Social Responsibility) Rules 2014, as amended from time to time work environment for its employees. The Company’s progressive and in force on the date of the Report. workforce policies and benefits, its various employee engagement The brief outline of the Corporate Social Responsibility Policy of initiatives, help the organization create an engaging culture. the Company, including overview of the programmes undertaken, Disclosure as per Sexual Harassment of Women at the composition of the CSR Committee, average net profits Workplace (Prevention, Prohibition and Redressal) of the Company for the last three financial years, prescribed Act, 2013 CSR expenditure, and the details of the amount spent by the Company on CSR activities during the year under Report, have The Company has zero tolerance for sexual harassment in the been disclosed in Annexure-I to this Report. workplace, and has a policy on the prevention, prohibition and redressal of sexual harassment in the workplace (“the policy”) Annual Evaluation by the Board of its own performance in line with the provisions of the Sexual Harassment of Women and that of its Committees and Individual Directors at Workplace (Prevention, Prohibition and Redressal) Act, 2013 Your Company has a Policy on Performance Evaluation towards and the rules framed thereunder. Your Company has an Internal evaluating Board’s own performance and effectiveness as well Complaints Committee (ICC) to redress complaints received as that of its committees and individual directors including regarding sexual harassment. independent directors. Accordingly, in terms of the requirements The following is a summary of sexual harassment complaints of the Act and pursuant to the aforesaid Policy, on internal received and disposed of during the financial year 2016-17: completion of evaluation cycle, the evaluation exercise was No. of complaints received: Nil carried out through a structured questionnaire covering various No. of complaints disposed of: Nil aspects, such as Board composition & quality, strategy and risk management, relation with the management, board meetings & Directors’ Responsibility Statement procedures. Based on the representations received from the management, Further, a separate exercise was carried out to evaluate the the Board of Directors of your Company hereby declares and performance of individual Directors on parameters such as confirms the following statements in terms of Section 134(5) r/w attendance, contribution and independent judgement. The Section 134(3)(c) of the Act: Directors carried out the aforesaid Performance Evaluation in a confidential manner and provided their feedback on a rating i. that in the preparation of the annual accounts for the financial scale of 1-5. The results of the evaluation were shared with the year ended 31st March 2017, the applicable accounting Board, Chairman of the respective Committees and individual standards had been followed alongwith proper explanation Directors. Based on the outcome of the evaluation, the Board and to material departures, if any; Committees have agreed on an action plan to further improve the ii. that such accounting policies as mentioned in Note No. 2 effectiveness and functioning of the Board and Committees. of the Notes to Accounts of the Financial Statements have been selected and applied consistently and judgments and Separate Independent Directors’ Meeting estimates have been made that are reasonable and prudent A separate meeting of the independent directors (“Annual ID so as to give a true and fair view of the state of affairs of meeting”) for the year 2017 was held on 25th April 2017, in which the Company as at 31st March 2017 and of the profit of the the independent directors, inter alia, discussed: Company for the financial year ended on that date; • the performance of Non-Independent Directors and the iii. that proper and sufficient care has been taken for the Board as a whole; maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013, and that • the performance of the Chairperson taking into account the there are adequate systems and controls for safeguarding views of executive Directors and non-executive Directors; and the assets of the Company and for preventing and detecting • the quality, quantity and timeliness of flow of information fraud and other irregularities; between the Company management and the Board that iv. that the annual accounts have been prepared on a going is necessary for the Board to effectively and reasonably concern basis; perform their duties. 6 ANNUAL REPORT 2017


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    STATUTORY REPORTS FINANCIAL STATEMENT The separate Annual ID meeting for the year 2016 was held on 3rd May 2016. Directors and Key Managerial Personnel During the year under Report, Mr. Rodney Noonoo has been appointed as an Additional Director of the company effective 18th January 2017, based on the recommendation of the Nomination and Remuneration Committee. Pursuant to Section 161(1) of the Act, Mr. Rodney Noonoo holds office only up to the date of the forthcoming 21st Annual General Meeting (AGM) of the Company and is eligible for appointment as a Director. The Board recommends his appointment, and accordingly resolution seeking approval of the members for his appointment has been included in the notice of the forthcoming 21st Annual General Meeting of the Company along with his brief profile. Mr. Rajat K. Jain, Director, retire by rotation and being eligible, has offered himself for re-appointment. The Board recommends the same for your approval. During the year under Report, Mr. Daniel M. Benoit ceased to be a Director of the Company effective 18th January 2017. Besides, Ms. Daniela Cosette Untescu ceased to be a Director of the Company effective 1st April 2017. Independent Directors’ Declaration During the year under Report, Mr. Prakash Kulathu Iyer and Mr. Rishi Kant Srivastava, who are independent Directors, had submitted a declaration that each of them meets the criteria of independence as provided in Sub-Section (6) of Section 149 of the Act. Further, there has been no change in the circumstances which may affect their status as independent director during the year. Meetings of Board and Board Committees The Schedule of meetings of the Board and the Committees thereof for the next calendar/financial year is circulated at the start of the calendar/financial year, to all the members of the Board. The Board meets at regular intervals to discuss and decide on affairs of the Company/business policy and strategy, in addition to other Board business. The notice of Board meetings are given well in advance to all the Directors. Primarily, the meetings of the Board are held at the place of Registered Office of the Company. The Agenda for the Board and Committee meetings includes detailed notes on the items to be discussed along with the requisite documents for the meeting to enable the Directors to take an informed decision. The Board met Six (6) times during the Financial Year 2016-17 on 3rd May 2016, 26th July 2016, 26th September 2016, 7th November 2016, 16th December 2016, and 18th January 2017. The maximum interval between any two meetings did not exceed 120 days. Attendance of Directors in the aforesaid meetings: Name of Director Category No. of Meetings held No. of Meetings Attendance at the attended 20th AGM (Y/N) Ashraf M.A. Elarman Managing Director 6 6 Y David Brian Dyas Non-Executive Director 6 1 Y Prakash Kulathu Iyer Independent Director 6 6 N Rishi Kant Srivastava Independent Director 6 6 N Rajat K. Jain Non-Executive Director 6 5 N Rodney Noonoo * Non-Executive Director 6 Nil N Daniel Marc Benoit ** Non-Executive Director 6 1 Y Daniela Cosette Untescu *** Non-Executive Director 6 1 N * Rodney Noonoo has been appointed on Board of the Company effective 18th January 2017 as an Additional Director (Non-Executive) ** Daniel Marc Benoit ceased to be the Director of the Company effective 18th January 2017 *** Daniela Cosette Untescu ceased to be the Director of the Company effective 1st April 2017 ANNUAL REPORT 2017 7


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    Committees of the Board During the year under Report, in accordance with the Companies Act, 2013, the Board re-constituted some of its Committees. There are currently Four (4) Committees of the Board, as follows: • Audit Committee Meetings’ Details for FY 2016-17 Name of Director Category No. of Meetings held No. of Meetings attended Rodney Noonoo* Chairman of the Committee 5 Nil Prakash Kulathu Iyer Member 5 5 Rishi Kant Srivastava Member 5 5 Daniel Marc Benoit** Chairman of the Committee* 5 1 **Inducted as a Member of the Audit Committee and designated as the Chairman thereof effective 18th January 2017 ** Ceased to be a Member & Chairman of the Audit Committee effective 18th January 2017 • Nomination and Remuneration Committee Meetings’ Details for FY 2016-17 Name of Director Category No. of Meetings held No. of Meetings attended Ashraf M.A. Elarman Chairman of the Committee 2 2 Prakash Kulathu Iyer Member 2 2 Rishi Kant Srivastava Member 2 2 Daniela Cosette Untescu* Member 2 Nil David Brian Dyas** Member 2 N.A. * Ceased to be a Member of Nomination and Remuneration Committee effective 1st April 2017 **Inducted as a Member of Nomination and Remuneration Committee effective 25th April 2017 • Corporate Social Responsibility Committee Meetings’ Details for FY 2016-17 Name of Director Category No. of Meetings held No. of Meetings attended Rodney Noonoo* Chairman of the Committee 1 N.A. Ashraf M.A. Elarman Member 1 1 Rishi Kant Srivastava Member 1 1 David Brian Dyas Member 1 Nil Daniel Marc Benoit** Chairman of the 1 Nil Committee** * Inducted as a Member of the Corporate Social Responsibility Committee and designated as the Chairman thereof effective 18th January 2017 ** Ceased to be a Member (Chairman) of Corporate Social Responsibility Committee effective 18th January 2017 • Stakeholders Relationship Committee Meetings’ Details for FY 2016-17* Name of Director Category No. of Meetings held No. of Meetings attended Rajat K. Jain Chairman of the Committee Nil N.A. Ashraf M.A. Elarman Member Nil N.A. Rishi Kant Srivastava Member Nil N.A. Prakash Kulathu Iyer Member Nil N.A. * Acting through a delegated authority by constituting a sub-committee of Authorised Officers of the Company under a given charter for handling of matters related to shareholders of the Company. 8 ANNUAL REPORT 2017


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    STATUTORY REPORTS FINANCIAL STATEMENT Policy of Directors’ Appointment and Remuneration positive attributes, independence of a director and related matters as provided under the applicable provisions of the The Company’s policy on Directors’ appointment and Act. The Nomination and Remuneration Policy is enclosed as remuneration, including criteria for determining qualifications, Annexure–II. positive attributes, the independence of the director and other matters provided under section 178(3) of the Act are covered Deposits under the Companies Act, 2013 under the Nomination and Remuneration Policy of the Company. Further, information about the elements of the remuneration During the year under Report, your Company has not accepted package of individual directors is provided in the extract of the any public deposits within the meaning of Section 73 of the Annual Return as provided under Section 92(3) of the Act, and Companies Act, 2013 read with the Companies (Acceptance of is enclosed in Annexure-VII in the prescribed Form MGT-9, and Deposits) Rules, 2014 (as amended from time to time), and as forms part of this Report. such, no amount, on account of principal or interest on deposits, was outstanding as on the date of the financial statement/balance Business Ethics and Code of Conduct sheet. There are no unclaimed deposits as on 31st March 2017. Your Company has continued to vigorously implement the Particulars of Loans, Guarantees and Investments Business Ethics and Code of Conduct policies with all its employees and its business partners / associates / service During the year under Report, your Company has not given any providers. The Company has ‘Zero tolerance’ for any violation loans or provided any guarantees or made any investments of Business Ethics Policies and has a Business Ethics Board within the meaning of Section 186 of the Companies Act, 2013. comprising of members of the Senior management team, which meets periodically to review the ethics program deployment and Internal Control deals with ethics related issues. Your Company has laid down standards, processes and structure which enable implementation of internal financial controls across Relationship between Directors inter-se the organization to ensure that the same are adequate and are None of the Directors are related to each other within the meaning operating effectively. of the term “relative” as per Section 2(77) of the Act read with Your Company has appointed Ernst & Young LLP to oversee and Rules thereunder. carry out the internal audit of its activities. The audit is based on an internal audit plan, which is reviewed each year in consultation Pecuniary Relationship or Transactions of Non- with the Audit Committee. Your Company has an Audit committee, Executive Directors the details of which have been provided elsewhere in this Report. During the year under Report, the Non-Executive Directors of the The Audit Committee reviews audit reports submitted by the Company had no pecuniary relationship or transactions with the Internal Auditors. Suggestions for improvement are considered Company other than as disclosed. and the Audit committee follows up on corrective actions. The Audit committee also meets the Statutory Auditors to ascertain, Vigil Mechanism inter alia, their views on the adequacy of internal control systems, and keeps the Board of Directors periodically informed of its Your Company has a Board-approved Business Ethics & Vigil major observations, if any. Mechanism Policy establishing a whistle blower/vigil mechanism for Directors and employees to report their genuine concerns to Risk Management the designated authorities regarding any unethical behaviour, actual or suspected fraud or violation of the Company’s Code Your Company has the Board-approved Policy for Risk of Conduct or Ethics Policy, and provides safeguards against Assessment & Management, wherein all potential material the victimization of individuals who avail of the mechanism. The risks w.r.t. the Company are identified and assessed. Further, Policy permits all the directors and employees to report any the risk management of the Company is overseen by the Audit breach of policy directly to the Business Ethics & Compliance Committee. Office, or the Chairman of the Audit committee in exceptional cases (viz. serious fraud, cases threatening Company’s Material Changes and Commitments affecting the existence, embezzlement etc.). During the year under review, financial position of the Company no employee was denied access to the Business Ethics & There are no material changes and commitments affecting the Compliance Office or to the Audit Committee. The Business financial position of the Company which has occurred between Ethics and Vigil Mechanism Policy is available on the website of the end of the financial year of the Company till the date of this the Company (www.xerox.com/india). report except as disclosed in this Annual Report. Disclosure of the Nomination & Remuneration Policy Auditors & Auditors’ Report The Company is having a Nomination and Remuneration Policy Pursuant to the provisions of Section 139 of the Act and the for the selection and appointment of Directors, Key Managerial rules framed thereunder, M/s Price Waterhouse & Co Bangalore Personnel and other senior management personnel, fixing their LLP, Chartered Accountants, were appointed as the Statutory remuneration including criteria for determining qualifications, Auditors of the Company for a term of 5 (five) consecutive years ANNUAL REPORT 2017 9


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    from the conclusion of the 18th Annual General meeting (AGM) of the Company has earned net profits of Rs. 1,679.64 the Company held on 23rd September, 2014 (as adjourned from Lacs in the financial year 2008-09, as computed in 16th September, 2014) till the conclusion of the 23rd AGM to be accordance with Section 349 of the Companies Act, held in the year 2019, subject to ratification of their appointment 1956 (on the basis that VRS payments being in the by the members at every AGM of the Company. nature of ex-gratia, are not required to be deducted The Report given by the Auditors on the financial statements of in computation of such net profits), and excess the Company for the financial year 2016-17 is forming part of this managerial remuneration in this case, must therefore Annual Report. be computed based on Section I of Part II of Schedule XIII (as had been done by the Company) and not under There has been no qualification, reservation, adverse remark Section II of Part II of Schedule XIII (as had been done or disclaimer given by the Auditors in their Report, except w.r.t. by the auditors) to the Act. excess managerial remuneration, and an emphasis of matter w.r.t. proceedings by Directorate of Enforcement, the explanation In view of the aforesaid, with reference to Note No. thereon by your Directors are as follows: 37(b) to the Financial Statements, and with a bona fide intent to resolve the matter and in the absence A. With respect to the “Basis of Qualified Opinion” and “Qualified of clarification and approval from the Ministry of Opinion” (appearing at Sl. nos. 8, 9, respectively and Sl. Corporate Affairs as requested by the Company over no. 12(b), 12(f) in the Auditors’ Report) for the year under the last few years, your Company, in the financial Report, your Directors state that the said matter pertains to year under report, has (a) obtained the approval of the financial year 2008-09. In this regard, reference is made the shareholders in the 20th Annual General Meeting to Note No. 37(b) of the Notes to Financial Statements, held on 27th September 2016 towards recognising which provides the relevant information and explanation to the amount of such excess remuneration (amounting the qualification made by the auditors. to Rs. 19.76 Lacs) as recoverable by the Company In addition, in the interest of providing further clarity, the in the Audited Financial Statements of the Company Board of Directors hereby provides further explanation to for FY 2015-16; (b) submitted a letter with the Ministry the auditors’ qualification as under: of Corporate Affairs withdrawing its application The auditors of the Company have stated that the excess seeking approval to the payment of aforesaid excess remuneration paid to directors in the year ended March 31, remuneration; and (c) subsequently recovered the 2009 could range from of Rs. 76.59 lacs to Rs. 96.59 lacs. aforesaid excess remuneration of Rs. 19.76 Lacs It appears that the auditors had made the estimate of this from its parent company on behalf of the concerned excess remuneration based on the following: managerial personnel. (a) The auditors had considered payments by the B. With respect to the “Emphasis of Matter” (appearing at Sl. Company under Voluntary Retirement Scheme (VRS) No. 10 in the Auditors’ Report), for the year under Report, for its employees as “usual working charges” of the your Directors state that the said matter pertains to the Company. As per the auditors’ understanding, the years 2000-03. In this regard, reference is made to Note No. Company did not have any “net profits” in accordance 38(a) of the Notes to Financial Statements, which provides with Section 349 of the erstwhile Companies Act, 1956 the relevant information and explanation to the Emphasis of (“Act”) for payment of remuneration to directors for the Matter made by the auditors. FY 2008-09. The Company disagrees with this view taken by the auditors. Payments under the Voluntary Secretarial Auditors Report Retirement Scheme (being in the nature of ex-gratia), In terms of Section 204 of the Companies Act, 2013 and the Rules as implemented by the Company during the FY made there under, M/s Ranjeet Pandey & Associates, Practising 2008-09, were made by the Company voluntarily, of Company Secretaries, had been appointed as the Secretarial its own accord, over and above its legal obligations. Auditors of the Company for the financial year 2016-17. The The same cannot, therefore, constitute usual working Report of the Secretarial Auditors is enclosed as Annexure - III to charges of the Company. In accordance with Section this Report. The contents of the said report are self-explanatory 349(5)(c) of the Act, such payments (which are made and no further comments / explanations are called for. voluntarily/ex-gratia by a Company) are not required to be deducted while computing net profits under Section Notes to the Financial Statements 349 of the Act. The view taken by the Company is All the Notes to the Financial Statement for the Financial Year supported by an independent legal opinion and by under Report are self-explanatory and do not require any further views expressed by authors in noted treatise(s) on the comments/remarks from your Directors. aforesaid Section, and general understanding of the provisions in the industry. Details in respect of Adequacy of Internal Financial (b) Due to the above reason, the auditors appeared to Controls with reference to the Financial Statements have computed the excess managerial remuneration The Company’s management is responsible for establishing and based on Section II of Part II of Schedule XIII to the maintaining an adequate system of internal controls over financial Act. However, as per calculations of the Company, reporting. Accordingly, the management has laid down internal 10 ANNUAL REPORT 2017


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    STATUTORY REPORTS FINANCIAL STATEMENT financial controls to be followed by the Company in line with the of the Company (in its meeting held on 2nd March 2016) laid guidance notes issued by the Institute of Chartered Accountants down the broad criteria for the Audit Committee towards granting of India and such policies and procedures to be adopted by the omnibus approval to the related party transactions. Based on Company for ensuring efficient conduct of its business, including that, the Audit Committee (on 31st March 2016) had granted its adherence to company’s policies, the safeguarding of its assets, omnibus approval to all the related party transactions for the FY the accuracy and completeness of the accounting records and 2016-17. the timely preparation of financial information. The internal controls are commensurate with the size, scale and complexity of Particulars of Employees your Company’s operations and facilitate prevention and timely detection of any irregularities, errors and frauds. The internal The information required under Section 134 read with Rule 5(2) controls are continuously assessed and improved/modified to and 5(3) of the Companies (Appointment and Remuneration meet changes in business conditions, statutory and accounting of Managerial Personnel) Rules, 2014 (as amended from time requirements. to time and as in force on the date of Report) and any other applicable provisions of the Companies Act, 2013 and rules Significant and Material Orders passed by the Regulators made thereunder, in respect of employees of the Company, is or Courts impacting the Going Concern Status provided in Annexure-VI forming part of this Report. There are no significant and material order(s) passed by any Documents placed on the Website (www.xerox.com/india) of the Regulators or courts or tribunals which could impact the The following documents have been placed on the Company’s going concern status of the Company and its future operations website in compliance with the Act: except as disclosed elsewhere in this Annual Report. • Business Ethics & Vigil Mechanism Policy for directors and Conservation of Energy, Technology Absorption and employees to report genuine concerns as per proviso to Foreign Exchange Earnings and Outgo section 177(10); • The terms and conditions of appointment of Independent The information relating to conservation of energy, technology Directors as per Schedule IV to the Act; absorption and foreign exchange earnings and outgo required to be disclosed as per the provisions of Section 134(3) (m) of • Business Ethics and Code of Conduct; the Companies Act, 2013 read with Rule 8(3) of the Companies • Policy under Sexual Harassment of Women At Workplace (Accounts) Rules, 2014 is set out in Annexure-IV forming part (Prevention, Prohibition And Redressal) Act, 2013; and of this Report. • Corporate Social Responsibility Policy Contracts or Arrangements with Related Parties Subsidiaries/ Joint Venture/ Associate All related party transactions that were entered into by your Your Company does not have any subsidiary/ joint venture/ Company during the financial year under Report were at arms’ associate company. length basis and were in the ordinary course of the business of the Company, details of such transactions with Related Opening of Branch Office at Bangladesh Parties are provided under Note No. 34 in the accompanying During the year under Report, your Company was awarded financial statements. Apart from these, there were two related with a contract by the Bangladesh Government (Bangladesh party transactions during the year under Report which were Bureau of Statistics under Bangladesh Investment Development not in ordinary course of business though undertaken at arms’ Authority). The duration of the contract is around 18 months length basis. These were (i) Sale of Contract R&D Support and essentially entails assimilation of census data of different Service division; and (ii) sub-leasing of office space to one regions in Bangladesh (‘the project’) by providing assistance in of the group entities. Accordingly, the requisite disclosure of questionnaire printing, data capture and processing using the related party transactions as required under Section 134(3)(h) ICR technology. of the Companies Act, 2013 and Rule 8(2) of the Companies (Accounts) Rules, 2014 is provided under AOC-2 and set out Accordingly, in March 2017, your Company has got the approval in Annexure-V forming part of this Report. All the related party from the Bangladesh Govt. to open a Branch Office at Dhaka, transactions are presented to the Audit Committee and the Board Bangladesh towards the execution of the Project alongwith two of Directors. The related party transactions entered into by the partners namely IOE Bangladesh Limited (IOE) and Top Image Company which were not in ordinary course of business, as System (TIS). aforesaid, were undertaken by the Company after obtaining the requisite approvals of Audit Committee, Board of Directors, and Share Capital shareholders of the Company, as the case may be. Your Company has only one class of share viz. equity share with A statement of all the related party transactions is presented a face value of ` 10/- each. During the year under review, there before the Audit committee and Board on a quarterly basis, is no change in the issued, subscribed and paid-up capital of specifying the nature and value of these transactions. your Company. The outstanding capital as on 31st March 2017 is ` 4480.80 Lacs comprising 4,48,08,000 equity shares of Also, pursuant to the Ministry of Corporate Affairs’ (MCA) ` 10/- each. Notification dated 14th December 2015, the Board of Directors ANNUAL REPORT 2017 11


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    Extract of Annual Return higher levels of consumer satisfaction through continuous improvement in existing products and introduction of new The extract of Annual Return as provided under Sub-Section products. (3) of Section 92 of the Companies Act, 2013 is enclosed as Annexure-VII in the prescribed Form MGT-9 and forms part of The Board places on record its appreciation for the support this Report. and co-operation your Company has been receiving from its customers, alliance and channel partners, suppliers, banks and Acknowledgements others associated with the Company. Your Directors place on record their deep appreciation to The Directors also take this opportunity to thank all the employees at all levels for their hard work, dedication and Shareholders, Government and Regulatory Authorities, for their commitment. The enthusiasm and unstinting efforts of the continued support. employees have enabled the Company to earn profits in the financial year under Report. Cautionary Statement Your Directors would also like to acknowledge the continued Statements in the Annual Report, particularly those which contribution and support by Xerox Corporation, United States relate to the Company’s objectives, projections, estimates and (parent company) to your Company in providing the latest expectations, may constitute ‘forward looking statements’ within equipment with technological improvements and marketing the meaning of applicable laws and regulations. Although the strategy inputs across almost all segments of the business in expectations are based on reasonable assumptions, the actual which it operates. This has enabled the Company to provide results might differ. For and on behalf of Board of Directors ASHRAF M. A. ELARMAN RAJAT K. JAIN Managing Director Director Gurgaon 25th July 2017 n k ) B la f t ly Le ra t e l i b e ( De 12 ANNUAL REPORT 2017


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    STATUTORY REPORTS FINANCIAL STATEMENT ANNEXURE-I annual report on Corporate SoCIal reSponSIbIlIty 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 Corporate Social Responsibility (CSR) has been a voluntary and long-standing commitment at Xerox India. The CSR Policy of the Company sets the framework guiding its CSR activities. It outlines the governance structure, operating framework, monitoring mechanism, and CSR activities that would be undertaken. The CSR committee is the governing/overseeing body that articulates the scope of CSR activities and ensures compliance with the CSR Policy. The Company’s CSR activities are largely focused in the areas of education, health, skill development and environmental development and other activities as the Company may choose to select in fulfilling its CSR objectives. Objective The broad objectives as stated in your Company’s CSR policy are: i) To directly or indirectly take up programs that benefit the communities in and around the Company’s workplace and results, over a period of time, in enhancing the quality of life and economic well-being of the local populace. ii) To generate through its CSR initiatives, a community goodwill for the Company and help reinforce a positive & socially responsible image of the Company as a corporate entity and as a good corporate citizen. iii) Ensure commitment at all levels in the organization, to operate its business in an economically, socially and environmentally sustainable manner, while recognizing the interest of all its stakeholders. Focus Areas Our CSR activities are focussed on the following areas: 1. Literacy and Empowerment 2. Promoting Education 3. Skill Training and Livelihood Enhancement 4. Health care 5. Environmental Sustainability For more details on Company’s CSR policy, visit https://www.xerox.com/downloads/ind/en/i/ind_social_responsibility.pdf Composition of CSR Committee The Company has also constituted a Board-level Corporate Social Responsibility (CSR) Committee to govern/oversee the implementation of the CSR policy. The CSR Committee is presently comprised of Mr. Rodney Noonoo, Non-executive Director (Chairman); Mr. Rishi Kant Srivastava, Independent Director (Member); Mr. Ashraf M.A. Elarman, Managing Director (Member); and Mr. David B. Dyas, Non-executive Director (Member). Financial Details As per Section 135 of the Companies Act, 2013, the Company was required to spend ` 35.21 Lacs towards CSR activities and the Company’s spent on CSR activities (including amount of committed liability/obligation) for the FY 2016-17 amounted to ` 35.26 Lacs. The financial details as required under the provisions of the Companies Act, 2013 are as follows: Particulars ` In Lacs (except as marked) 1. Average net profit of the company for last three financial years 1760.38 2. Prescribed CSR expenditure (two per cent of the amount as in item 1 above) 35.21 3. Details of CSR spent during the financial year 2016-17: (a) Total amount spend for the financial year (in `) 35,26,210 (b) Amount unspent, if any N.A. ANNUAL REPORT 2017 13


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    Manner in which the amount spent during the financial year is detailed below: (Amount in `) (1) (2) (3) (4) (5) (6) (7) (8) S. CSR Project or Sector in which the Projects or Amount Amount spent Cumulative Amount No. activity identified Project is covered Programs outlay on the projects expenditure spent: (1) Local Area or (budget) or programs: upto the Direct or other project or Sub-heads: reporting through programme period implemen- (2) Specify the (1) Direct -wise ting State and expenditure District where on project or authority project or programmes programs was (2) Overheads undertaken 1. Strengthening Promoting education, Delhi & NCR 700,235/- Direct: 7,25,235/- Through the learning and including special 7,00,235/- Magic development of education and Bus India Overheads: underprivileged employment Foundation children in the enhancing vocation 25,000/- area of education, skills especially (committed) health, and gender among children, through Sports women, elderly, for Development and the differently approach, leading to abled and livelihood a positive behaviour enhancement projects change 2. Donation of Printers Promoting education, Delhi & NCR 10,00,000/- Direct: 10,00,000/- Through to Schools and other including special 10,00,000/- Goonj (an needy organisations education and NGO) employment enhancing vocation skills especially among children, women, elderly, and the differently abled and livelihood enhancement projects 3. Developing ensuring Delhi & NCR 2,17,575/- Direct: 2,17,575/- Through awareness, environmental 2,17,575/- World Wide appreciation & sustainability, Fund for understanding ecological balance, Nature-India among children of protection of flora (WWF- underprivileged and fauna, animal India) schools about welfare, agro forestry, environment thereby conservation of promoting ecological natural resources and consciousness maintaining quality of and responsibility soil, air and water towards environment through interactive sessions comprising of Nature Trails & Workshops 14 ANNUAL REPORT 2017


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    STATUTORY REPORTS FINANCIAL STATEMENT (1) (2) (3) (4) (5) (6) (7) (8) S. CSR Project or Sector in which the Projects or Amount Amount spent Cumulative Amount No. activity identified Project is covered Programs outlay on the projects expenditure spent: (1) Local Area or (budget) or programs: upto the Direct or other project or Sub-heads: reporting through programme period implemen- (2) Specify the (1) Direct -wise ting State and expenditure District where on project or authority project or programmes programs was (2) Overheads undertaken 4. Imparting skill Promoting education, Delhi & NCR 5,43,240/- Direct: 5,43,240 5,43,240/- Through training to including special (inclusive of Samarpan underprivileged education and ` 2,71,620/- Foundation women in tailoring employment as amount and stitching and enhancing vocation committed) their basic literacy, skills especially thereby enhancing among children, their confidence level women, elderly, and financial self- and the differently dependence abled and livelihood enhancement projects 5. Making available Eradicating hunger, Delhi & NCR 10,40,160/- Direct: 10,40,160 10,40,160/- Through affordable health poverty and (inclusive of Dr. A.V. services to the malnutrition, promoting ` 8,02,560/- Baliga underprivileged preventive health care as amount Memorial women and children and sanitation and committed) Trust at their doorstep making available safe with community drinking water sensitization to promote health seeking behavior thereby providing both preventive and curative healthcare services in the National Capital Region * inclusive of ` 10,99,180/- as amount committed/provided for under MoUs/Agreements entered into by the Company (during FY 2016-17) with aforesaid Agencies towards its ongoing CSR activities In case the company has failed to spend the 2% of the average net profits 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 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. Pursuant to the provisions of section 135 of the Companies Act, 2013 read with Companies (Corporate Social Responsibility Policy) Rules, 2014, the CSR Committee hereby affirm that the CSR Policy (as approved by the Board) has been implemented and the CSR Committee monitors the implementation of the projects and activities in compliance with our CSR objectives. ASHRAF M. A. ELARMAN RODNEY NOONOO Managing Director Chairman (CSR Committee) Gurgaon Uxbridge Date: 25th July 2017 Date: 25th July 2017 ANNUAL REPORT 2017 15


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    ANNEXURE-II nomInatIon and remuneratIon polICy Introduction: ii) Identify person(s) who are qualified and eligible to become In pursuance of the Company’s policy to consider human Director (Executive, Non-Executive viz. Independent or resources as its invaluable assets, to pay equitable remuneration Non-Independent) and persons who may be appointed to all Directors, Key Managerial Personnel’s (KMP’s) and in Key Managerial and Senior Management positions in employees of the Company based on skill, experience, industry accordance with the criteria laid down in this Policy. standards and Company’s performance, to harmonize the iii) Recommend to the Board, appointment and removal of aspirations of human resources consistent with the goals of the Director, KMP’s and Senior Management Personnel. Company and in terms of prevailing provisions of the Companies Act, 2013, Nomination and Remuneration Policy (hereinafter PART – B referred to as the “Policy”) for Directors, Key Managerial POLICY FOR APPOINTMENT AND REMOVAL OF DIRECTOR, Personnel and Senior Management has been formulated by the KMP’s AND SENIOR MANAGEMENT Nomination and Remuneration Committee and approved by the Board of Directors. Appointment criteria and qualifications: i) Committee shall identify and ascertain the integrity, Objective and purpose of the Policy: qualification, expertise and experience of the person(s) for The objective and purpose of this policy are: appointment as Director, KMP’s or at Senior Management • To lay down criteria and terms & conditions with regard to level and recommend to the Board his / her appointment. identifying person(s)who are qualified to become Directors ii) A person should possess adequate qualification, expertise (both Executive and Non-Executive) and persons who may and experience for the position he / she is considered for be appointed in Senior management and Key Managerial appointment. The Committee has discretion to decide positions and to determine their remuneration. whether qualification, expertise and experience possessed • To determine remuneration based on the Company’s size and by a person is sufficient / satisfactory for the concerned financial position and trends and practices on remuneration position in the best interest of the Company. prevailing in peer companies, in the sector engaged in the iii) The Company shall not appoint or continue the employment business of trading of Xerographic equipments. In addition of any person as Managing Director/Whole time Director to above, experience of concerned person(s) or contribution who has attained the age of seventy years (70 years). to achieve the Company’s objective will also be considered. Provided however that the term of the person holding such • To carry out evaluation of the performance of Company’s position may be extended beyond the age of seventy years Directors, as well as Key Managerial and Senior (70 Years) with the approval of shareholders by passing Management Personnel. a special resolution based on the explanatory statement annexed to the notice for such motion indicating the • To provide them reward linked directly to their effort, justification for extension of appointment beyond seventy performance, dedication and achievement relating to the years. Company’s operations and growth. • To retain, motivate and promote talent and to ensure long Term / Tenure: term sustainability of talented Managerial person(s) & • Managing Director/Whole-time Director: employee(s) and create competitive advantage. The Company shall appoint or re-appoint any person as Considering the aforesaid objective, future prospect and its Executive Chairman, Managing Director or Executive growth of the Company, this Policy has been formulated by the Director for a term not exceeding five years at a time. No Nomination and Remuneration Committee and adopted by the re-appointment shall be made earlier than one year before Board of Directors at its meeting held on 03 March, 2015. the expiry of term. • Independent Director: The key features of the Nomination & Remuneration Policy are as under: An Independent Director shall hold office for a term up to five consecutive years on the Board of the Company and will be PART – A eligible for re-appointment on passing of a special resolution by the Company and disclosure of such appointment in the MATTERS TO BE DEALT WITH, PERUSED AND RECOMMENDED Board’s report. TO THE BOARD BY THE NOMINATION AND REMUNERATION COMMITTEE No Independent Director shall hold office for more than two consecutive terms, but such Independent Director shall be The Committee shall: eligible for appointment after expiry of three years of ceasing i) Formulate the criteria for determining qualifications, positive to become an Independent Director. Provided however that attributes and independence of a director. an Independent Director shall not, during the said period 16 ANNUAL REPORT 2017


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    STATUTORY REPORTS FINANCIAL STATEMENT of three years, be appointed in or be associated with the ii) Increments to the existing remuneration / compensation Company in any other capacity, either directly or indirectly. structure may be recommended by the Committee to At the time of appointment of Independent Director it the Board which should be within the slabs approved by should be ensured that number of Boards on which such the Shareholders in the case of Managing Director and/ Independent Director serves is restricted to seven listed or Whole-time Director subject to the provisions of the companies as an Independent Director and three listed Companies Act, 2013 and rules & regulations made companies as an Independent Director in case such person thereunder. Increments will be effective from the date as is serving as a Whole-time Director of a listed company. may be decided by the Board in line with recommendation of Committee. Evaluation of Performance: iv) Where any insurance is taken by the company on behalf The Committee shall carry out evaluation of performance of of its Managing Director(s), Whole-time Director(s), Chief every Director, KMP’s and Senior Management personnel at Executive Officer, Chief Financial Officer, Company regular interval. Secretary and any other employees for indemnifying them against any liability, the premium paid on such insurance Removal: shall not be treated as part of the remuneration payable to Due to reasons for any disqualification mentioned in the any such personnel. Provided however that if such person Companies Act, 2013 & rules made thereunder or under any is proved to be guilty, the premium paid towards such other applicable Act, rules and regulations or otherwise as the insurance policy shall be treated as part of the remuneration. Committee and Board may think fit in the best interest of the v) Remuneration to Managing Director/Whole-time Director/ Company, the Committee may recommend, to the Board with Executive Director, KMP’s and Senior Management reasons recorded in writing, removal of any Director, KMP’s or Personnel: Senior Management Personnel subject to the provisions and compliance of the applicable Act, rules and regulations made a) Fixed Remuneration/Salary/Compensation: there under. Managing Director/ Whole-time Director / KMP’s shall be eligible for a monthly remuneration as may be Retirement: approved by the Board on the recommendation of the The Director, KMP and Senior Management Personnel shall retire Committee. The break-up of the pay scale and quantum as per the applicable provisions of the Companies Act, 2013 and of perquisites including, employer’s contribution to P.F., the prevailing policy of the Company. The Board will have the pension scheme, medical expenses, other perquisites discretion to retain the Director, KMP’s, Senior Management etc. shall be decided and approved by the Board on Personnel in the same position / remuneration or otherwise even the recommendation of the Committee. Provided after attaining the retirement age, for the best interest and benefit however Remuneration to Managing Director/ Whole of the Company. time Director/ Executive Director shall be approved by the shareholders and Central Government, wherever PART – C required. Remuneration of Senior Management POLICY RELATING TO THE REMUNERATION FOR THE Personnel to be finalized by the Managing Director of MANAGING DIRECTOR, WHOLE-TIME DIRECTOR, KMP the Company and in absence of MD, by CFO of the AND SENIOR MANAGEMENT PERSONNEL Company. General: b) Minimum Remuneration: i) The remuneration / compensation / commission etc. to If, in any financial year, the Company has no profits the Managing Director, Whole-time Director and KMP’s or its profits are inadequate, the Company shall will be determined by the Committee and recommended pay remuneration to its Whole-time Director and/or to the Board for approval. However, the remuneration/ Managing Director in accordance with the provisions of compensation / commission etc. to the Managing Director Schedule V of the Companies Act, 2013 and if it is not and Whole-time Director, shall be subject to the prior/post able to comply with such provisions, with the previous approval of the shareholders of the Company and Central approval of the Central Government. Government, wherever required. Appointment of Senior c) Provisions for excess remuneration: Management Personnel including their remuneration to be If any Executive Director/ Managing Director/ Whole- finalized by the Managing Director of the Company and in time Director draws or receives, directly or indirectly absence of MD, by CFO of the Company. by way of remuneration any such sums in excess of ii) The remuneration and commission to be paid to the the limits prescribed under the Companies Act, 2013 or Managing Director and/or Whole-time Director shall be in without the prior sanction of the Central Government, accordance with the percentage / slabs / conditions laid where required, he / she shall refund such sums to the down in the Articles of Association of the Company and Company and until such sum is refunded, hold it in as per the provisions of the Companies Act, 2013, and the trust for the Company. The Company shall not waive rules made there under. recovery of such sum refundable to it unless permitted by the Central Government. ANNUAL REPORT 2017 17


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    D) Remuneration to Non-Executive / Independent as per the applicable provisions of the Companies Director: Act, 2013, as recommended by the Committee and approved by the Board. Remuneration and commission: Stock Options: The remuneration / commission, if applicable, shall be fixed as per the slabs and conditions mentioned An independent Director shall not be entitled to any in the Articles of Association of the Company and the stock option of the Company. Companies Act, 2013 and the rules made thereunder. E) Stock Option Sitting Fees: Stock options in the form of ESOP/ESOS may be The Non-Executive / Independent Director may receive given by the Company to the Directors/ KMPs and/ remuneration by way of fees for attending meetings of or other employees of the Company as per scheme Board or Committee thereof as may be approved by framed by the Company from time to time in terms the Board from time to time. Provided however that the with provisions of Section 62, Section 149 and all amount of such fees shall not exceed Rs. One Lakh other applicable provisions, if any, of the Companies per meeting of the Board or Committee or such amount Act, 2013 and Articles of Association of the Company. as may be prescribed by the Central Government from Provided however that Independent Directors shall time to time. not be eligible to participate in ESOP scheme of the Company. Commission: Commission may be paid within the monetary limit approved by shareholders, subject to the limit not exceeding 1% of the profits of the Company computed n k ) B la f t ly Le ra t e l i b e ( De 18 ANNUAL REPORT 2017


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    STATUTORY REPORTS FINANCIAL STATEMENT ANNEXURE-III Secretarial Audit Report For the financial year ended on 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, We further report that:- The Members, The Board of Directors of the Company is duly constituted with Xerox India Limited, proper balance of Executive Director, Non-Executive Directors 5th Floor, Block One, Vatika Business Park, (including Woman Director) and Independent Directors. The Sector-49, Sohna Road, changes in the composition of the Board of Directors that Gurgaon-122018, Haryana took place during the period under review were carried out in compliance with the provisions of the Act. We have conducted the Secretarial Audit of the compliance of applicable statutory provisions and the adherence to good Adequate notice has been given to all directors to schedule corporate practices by “Xerox India Limited” (hereinafter called the Board Meetings including committee meetings during the the “Company”). Secretarial Audit was conducted in a manner financial year under review, agenda and detailed notes on that provided us a reasonable basis for evaluating the corporate agenda were sent within prescribed timeline, and a system exists conducts/statutory compliances and expressing our opinion for seeking and obtaining further information and clarifications thereon. on the agenda items before the meeting and for meaningful participation at the meeting. Based on our verification of Xerox India Limited’s books, papers, minute books, forms and returns filed and other records Based on the verification of the records and minutes, we report maintained by the Company and also the information provided by that all the decisions are carried unanimously. The members of the Company, its officers, agents and authorized representatives, the Board have not expressed dissenting views on any of the during the conduct of Secretarial Audit, we hereby report that in agenda items during the financial year under review. our opinion, the Company has, during the audit period covering We further report that there are adequate systems and the financial year ended on 31st March, 2017 complied with the processes in the Company commensurate with the size and statutory provisions listed hereunder and also that the Company operations of the Company to monitor and ensure compliance has proper Board-processes and compliance mechanism in with applicable laws, rules, regulations and guidelines. place to the extent, in the manner and subject to the reporting made hereinafter. We further report that during the audit period, the Company has sold/transferred its Contract R&D Support Services Division We have examined the books, papers, minute books, forms and named as Xerox Research Centre India (XRCI) to its related returns filed and other records maintained by the Company for party in compliance with the applicable provisions of the Act and the financial year ended on 31st March, 2017, according to the Rules made thereunder. provisions of: i) The Companies Act, 2013 (the Act) and the rules made We further report that during the audit period, the Company there under; has obtained the approval of members by way of postal ballot in relation to the aforesaid sale/transfer under section 188 of the ii) The Depositories Act, 1996 and the Regulations and Bye- Act and Rules made thereunder. Laws framed there under; iii) Foreign Exchange Management Act, 1999 and the rules and regulations made thereunder to the extent of Foreign Direct Investment. FOR RANJEET PANDEY & ASSOCIATES iv) The Legal Metrology Act, 2009 and rules made thereunder COMPANY SECRETARIES (specifically applicable legislation to the Company, being engaged in the business of trading of xerographic equipments, multifunction devices etc.) Place: NEW DELHI CS RANJEET PANDEY Date: 05/07/2017 FCS- 5922, CP No.- 6087 We have also examined compliance with the applicable clauses of the Secretarial Standards issued by the Institute of Company Secretaries of India. During the period under review, the Company This report is to be read with our letter of even date which is has complied with the provisions of the Act, Rules, Regulations, annexed as Annexure-I and forms an integral part of this report. Guidelines, Standards etc. mentioned above. ANNUAL REPORT 2017 19


  • Page 22

    Annexure-I To, The Members, Xerox India Limited, 5th Floor, Block One, Vatika Business Park, Sector-49, Sohna Road, Gurgaon-122018, Haryana Our report of even date is to be read along with this letter: 1. Management of Secretarial record is the responsibility of the management of the Company. Our responsibility is to express an opinion on these secretarial records based on our audit. 2. We have followed the audit practices and processes as were appropriate to obtain reasonable assurance about the correctness of the contents of the Secretarial Records. The verification was done on test basis to ensure that correct facts are reflected in secretarial records. We believe that the processes and practices, we followed provide a reasonable basis for our opinion. 3. We have not verified the correctness and appropriateness of financial records and Books of Accounts of the Company. 4. Wherever required, we have obtained the Management representation about the compliance of laws, rules and regulations and happening of the events etc. 5. The compliance of the provisions of Corporate and other applicable laws, rules, regulations, standards is the responsibility of management. Our examination was limited to the verification of procedure 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. FOR RANJEET PANDEY & ASSOCIATES COMPANY SECRETARIES Place: NEW DELHI CS RANJEET PANDEY Date: 05/07/2017 FCS- 5922, CP No.- 6087 20 ANNUAL REPORT 2017


  • Page 23

    STATUTORY REPORTS FINANCIAL STATEMENT ANNEXURE-IV ConServatIon of energy, teChnology abSorptIon and foreIgn exChange earnIngS and outgo The particulars as prescribed under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014, are as follows: A. Conservation of Energy a. The operations of the Company, being IT related, require normal consumption of electricity. b. Disclosure of particulars with respect to conservation of energy The Company has been taking every necessary step to reduce the consumption of energy, significant among these during the financial year under report are covered under “Initiatives on Sustainability from the Company” in the Board’s Report. Additionally, during the year under Report, following are the steps taken by your Company w.r.t. energy conservation: • To save energy, LED lights were used in Bangalore new office constructed during Dec’16 – Jan’17. • CFL Lights were replaced by LED in Gurgaon office thereby immensely reducing the wattage consumption. • In Mumbai office, half portion of AC duct (not in used) were closed which has resulted into saving of ` 25000/- per month on account of reduction in electricity consumption. • Overseen energy conservation measures c. the steps taken by the Company for utilising alternate sources of energy: Nil, the focus has only been on energy conservation. d. the capital investment on energy conservation equipments: Nil B. Technology Absorption Disclosure of particulars with respect to Technology Absorption is covered under “Initiatives on Sustainability from the Company” in the Board’s Report (to the extent applicable). C. Foreign exchange earnings and Outgo- Foreign exchange earnings and outgo during the year under review were ` 10,402.35 lacs (previous year ` 9,921.40 lacs) and ` 908.91 lacs (previous year ` 1,196.91 lacs), respectively. Details in this regard is provided in Note Nos. 31 and 32 of the Financial Statement. ANNUAL REPORT 2017 21


  • Page 24

    ANNEXURE-V FORM NO. AOC–2 (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) Form for disclosure of particulars of contracts/arrangements entered into by the Company with related parties referred to in sub- section (1) of Section 188 of the Companies Act, 2013 including certain arm’s length transactions under third proviso thereto 1. Details of contracts or arrangements or transactions not at arm’s length basis: None a. Name(s) of the related party and nature of relationship b. Nature of contracts/arrangements/transactions c. Duration of the contracts/arrangements/transactions d. Salient terms of the contracts/arrangements/transactions including the value, if any e. Justification for entering into such contracts or arrangements or transactions NIL f. Date(s) of approval by the Board g. Amount paid as advances, if any h. Date on which the special resolution was passed in general meeting as required under first proviso to Section 188 2. Details of material contracts or arrangement or transactions at arm’s length basis a. Name(s) of the related party and nature of Xerox Business Services India LLP (erstwhile Xerox Business Services relationship India Pvt. Ltd.), Bangalore (India); a group entity having common ultimate parent/holding company b. Nature of contracts/ arrangements/transactions Sale/transfer of the Contract R&D Support Services division (namely Xerox Research Centre India) as a going concern on slump sale basis effective 01.01.2017 vide a Business Transfer Agreement c. Duration of the contracts/ arrangements/ transactions N.A. d. Salient terms of the contracts or arrangements or As per the Business Transfer Agreement (dated 14.12.2016); the transactions including the value, if any valuation of the said division came at ` 43.40 Crores as per the independent valuation carried out e. Date(s) of approval by the Board, if any 07.11.2016 f. Amount paid as advances, if any N.A. For and on behalf of Board of Directors ASHRAF M. A. ELARMAN RAJAT K. JAIN Managing Director Director Gurgaon 25th July 2017 22 ANNUAL REPORT 2017


  • Page 25

    STATUTORY REPORTS FINANCIAL STATEMENT ANNEXURE-VI Statement pursuant to Section 134(3) of the Companies Act, 2013 read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 forming part of the Board’s Report for the year ended March 31, 2017 Names of Top 10 employees of the Company in terms of remuneration drawn: Sl. No. Name Designation Remuneration (in `) 1. Ashraf M.A. Elarman Managing Director 4,36,84,673/- 2. Masato Yagi General Manager-Business Development (Japanese Accounts) 1,54,10,903/- 3. Balaji Rajagopalan Executive Director-Technology & Channels 1,45,60,368/- 4. Deepika Chaudhry Executive Director-Legal 1,28,42,221/- 5. Kanchan Chehal Executive Director-HR, Asia Pacific 1,05,96,455/- 6. Satpreet Singh Ahuja Chief Financial Officer 84,32,775/- 7. Rajiv Luthra Regional Business Head-North, Central & East 83,60,344/- 8. Anurag Gupta Director-Customer Service Operations 79,92,757/- 9. Aditya Sawant Associate Director-GDO Operations 72,47,841/- 10. Yoginder Singh Bisht Head-IDO, Supplies & Paper 68,92,060/- Employees employed throughout the financial year 2016-17 who were in receipt of an aggregate remuneration equal to or exceeding ` 1,02,00,000/- per annum: Sl. Name of the Designation Remuneration Nature of Qualifications & Date of Age Last No. Employee/ received (in `) Employment Experience commen- (in employment Director (whether (in Years) cement of Years) held before contractual employment joining the or with the Company permanent) Company 1. Ashraf M.A. Managing 4,36,84,673 Permanent Graduate 22-06-2015 52 Xerox Egypt Elarman Director (27 years) 2. Masato Yagi General 1,54,10,903 Permanent Graduate; 27-10-2014 40 Fuji Xerox Co. Manager - (16 years) Ltd. Business Development (Japanese Accounts) 3. Balaji Executive 1,45,60,368 Permanent DEE, MBA (Mktg. 01-11-1983 53 Indian Rajagopalan Director - & Intl. Business); Reprographic Technology & (35 years) Systems (P) Channels Ltd. 4. Deepika Executive 1,28,42,221 Permanent LLB, B.Sc; 22-07-2013 51 Microsoft India Chaudhry Director - Legal (26 years) 5. Kanchan Executive 1,05,96,455 Permanent BA, PGDBM; 24-11-2014 42 GAP Inc. Chehal Director (20 years) - Human Resources, Asia Pacific ANNUAL REPORT 2017 23


  • Page 26

    Employees employed for part of the financial year 2016-17 who were in receipt of a remuneration for any part of the financial year 2016-17, at a rate which, in the aggregate, was not less than ` 8,50,000/- per month: Sl. Name of the Designation Remu- Nature of Qualifications & Date of Age Last No. Employee/ neration Employment Experience commen- (in employment Director received (whether (in Years) cement of Years) held before (in `) contractual employment joining the or with the Company permanent) Company 1. Manish Director - XRCI 3,07,72,177 Permanent Ph.D, M.S, B.TECH; 03-06-2013 51 Goldman Sachs Gupta* (24 Years) Services Pvt. Ltd. 2. Vivek Executive Director- 61,39,978 Permanent B.TECH, PGDM; 09-08-2011 50 TATA Chandel@ Marketing (26 Years) Teleservices 3. Sushant Director - GDO 72,99,147 Permanent PGDM (Mktg.), 05-01-2015 48 Avaya India Pvt. Dwivedy# Services B.E. Electronics & Ltd. Communication; (26 Years) 4. Geetha Lab Manager - Data 78,18,386 Permanent Ph.D. (IISC), 25-04-2013 49 Hewlett Packard Manjunath* Analytics Lab (25 Years) 5. Abhishek Tax Director - Asia 60,48,445 Permanent B.Com, CA, LL.M, 16-07-2012 41 Pricewater Chawla$ Pacific (15 Years) Coopers 6. Sandeep S. Associate Director 18,97,872 Permanent B.Sc., MBA; 02-01-2015 57 Xerox Dhanoa^ - Key Accounts, (22 Years) Corporation XPPS & Business Solutions Delivery * Date of cessation of employment: 31.12.2016 @ Date of cessation of employment: 24.04.2016 # Date of cessation of employment: 27.10.2016 $ Date of cessation of employment: 30.09.2016 ^ Date of cessation of employment: 27.04.2016 24 ANNUAL REPORT 2017


  • Page 27

    STATUTORY REPORTS FINANCIAL STATEMENT ANNEXURE-VII FORM NO. MGT-9 Extract of Annual Return as on the financial year ended on 31st March, 2017 [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 - U72200HR1995PLC049183 ii) Registration Date - 29th December 1995 iii) Name of the Company - Xerox India Limited iv) Category/Sub-Category of the Company - Public Company Limited by Shares / Non-Government Company v) Address of the Registered Office and Contact Details - Xerox India Limited 5th Floor, Block One, Vatika Business Park, Sector 49, Sohna Road, Gurgaon - 122018, Haryana Tel: +91 124 39400400 | Fax: +91 124 3371225 email: askus@xerox.com vi) Whether Listed Company (Yes / No) - - No vii) Name, Address and Contact Details of - M/s. MCS Share Transfer Agent Limited Registrar and Transfer Agent, if any Regd. Office: 12/1/5 Manoharpukur Road, Kolkata – 700026 Tel: +91 33 40724051 | Fax: +91 33 40724050 Regional Office: F-65, 1st Floor, Okhla Industrial Area, Phase – I, New Delhi - 110020 Tel: +91 11 41406149 | Fax: +91 11 41709881 email: mcssta@rediffmail.com / admin@mcsregistrars.com 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 No. Product/ Service Turnover of the Company 1. Trading in Xerographic Equipments & its Consumables, Multi-function Devices, 46591, 82191, Laser Printers, Paper; and Provision of After Sales Services therefor under 82199, 33129, the following Segments contributing 10% or more of the total turnover of the 17093 Company for the financial year under Report: (a) Global Document Outsourcing 15.91 (b) Office 20.25 (c) Graphic Communications 36.37 (d) Other Support Services 17.79 ANNUAL REPORT 2017 25


  • Page 28

    III. PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES Sl. Name and address CIN/GLN Holding/ Subsidiary/ % of shares Applicable No. of the Company Associate held section 1. Xerox Corporation Not Holding Nil 2(46) and 2(69) r/w 2(87) of 201 Merritt 7, Norwalk, Connecticut Applicable the Companies Act, 2013 06851-1056 United States (previously at 45, Glover Avenue, Norwalk, CT 06856-4505 United States) 2. Xerox Limited, UK Not Holding 45.58% 2(46) and 2(69) r/w 2(87) of Bridgehouse, Oxford Road, Uxbridge, Applicable the Companies Act, 2013 Middlesex UB8 1HS 3. XC Trading Singapore Pte. Ltd. Not Holding 39.29% 2(46) and 2(69) r/w 2(87) of 80, Anson Road, Singapore Applicable the Companies Act, 2013 IV . SHAREHOLDING PATTERN (Equity share capital breakup as percentage of total equity) i. Category-wise shareholding Category of No. of Shares held at the beginning of No. of Shares held at the end of the year % Shareholders the year (01.04.2016) (31.03.2017) Change Demat Physical Total % of Total Demat Physical Total % of Total during Shares Shares the year A. Promoters (1) Indian (a) Individual/ HUF 0 0 0 NA 0 0 0 NA NA (b) Central Government 0 0 0 NA 0 0 0 NA NA (c) State Government(s) 0 0 0 NA 0 0 0 NA NA (d) Bodies Corporate(s) 0 0 0 NA 0 0 0 NA NA (e) Banks/FIs 0 0 0 NA 0 0 0 NA NA (f) Any Other 0 0 0 NA 0 0 0 NA NA Sub-total (A)(1): - 0 0 0 NA 0 0 0 NA NA (2) Foreign (a) NRIs-Individuals 0 0 0 NA 0 0 0 NA NA (b) Other-Individuals 0 0 0 NA 0 0 0 NA NA (c) Bodies Corporate(s) 0 40010707 40010707 89.29 0 40010707 40010707 89.29 NIL (d) Banks/FIs 0 0 0 NA 0 0 0 NA NA (e) Any Other 0 0 0 NA 0 0 0 NA NA Sub-total (A)(2):- 0 40010707 40010707 89.29 0 40010707 40010707 89.29 NIL Total Shareholding of 0 40010707 40010707 89.29 0 40010707 40010707 89.29 NIL Promoter (A) = (A)(1) + (A)(2) B. Public Shareholding 1. Institutions (a) Mutual Funds 0 1538 1538 0.0034 0 1538 1538 0.0034 NIL (b) Banks/FIs 0 10254 10254 0.0229 0 10254 10254 0.0229 NIL (c) Central Government 0 0 0 0 0 0 0 0 NIL (d) State Government(s) 0 0 0 0 0 0 0 0 NIL (e) Venture Capital Funds 0 0 0 0 0 0 0 0 NIL (f) Insurance Companies 39746 622 40368 0.0901 39746 622 40368 0.0901 NIL 26 ANNUAL REPORT 2017


  • Page 29

    STATUTORY REPORTS FINANCIAL STATEMENT Category of No. of Shares held at the beginning of No. of Shares held at the end of the year % Shareholders the year (01.04.2016) (31.03.2017) Change Demat Physical Total % of Total Demat Physical Total % of Total during Shares Shares the year (g) FIIs 0 1711 1711 0.0038 0 1711 1711 0.0038 NIL (h) Foreign Venture 0 0 0 0 0 0 0 0 NIL Capital Funds (i) Others (specify) 0 0 0 0 0 0 0 0 NIL Sub-total (B)(1):- 39746 14125 53871 0.1202 39746 14125 53871 0.1202 NIL 2. Non-Institutions (a) Bodies Corporate i) Indian 64226 3770292 3834518 8.56 3302426 532066 3834492 8.56 0.00 ii) Overseas 0 0 0 0 0 0 0 0 NIL (b) Individuals i) Individual 13873 766166 780039 1.741 17245 762820 780065 1.741 0.00 shareholders holding nominal share capital upto ` 1 lakh ii) Individual 0 125238 125238 0.28 0 125238 125238 0.28 NIL shareholders holding nominal share capital in excess of ` 1 lakh (c) Others: Non-Resident 0 3627 3627 0.0081 0 3627 3627 0.0081 NIL Individual Sub-total (B)(2):- 78099 4665323 4743422 10.59 3319671 1423751 4743422 10.59 NIL Total Public 117845 4679448 4797293 10.71 3359417 1437876 4797293 10.71 NIL Shareholding (B) = (B)(1) + (B)(2) (C) Shares held by 0 0 0 NA 0 0 0 NA NA Custodian for GDRs & ADRs Grand Total (A+B+C) 117845 44690155 44808000 100.00 3359417 41448583 44808000 100.00 NA Note: Percentage change wherever marked as 0.00 represents negligible change ii. Shareholding of Promoters Sl. Shareholder’s Shareholding at the beginning of the year Cumulative Shareholding during % change No. Name (01.04.2016) the year in share- No. of % of Total % of Shares No. of % of Total % of Shares holding Shares Shares of the Pledged/encu- Shares Shares Pledged/encu- during the Company mbered to Total of the mbered to year Shares Company Total Shares 1. Xerox Limited 20423200 45.58 Nil 20423200 45.58 Nil Nil 2. XC Trading 17606706 39.29 Nil 17606706 39.29 Nil Nil Singapore Pte Ltd. 3. Xerox Developing 1980801 4.42 Nil 1980801 4.42 Nil Nil Markets Ltd. ANNUAL REPORT 2017 27


  • Page 30

    iii. Change in Promoters’ Shareholding (please specify, if there is no change) There is no change in promoter’s shareholding during FY 2016-17. Sl. Shareholder’s Name Shareholding at the beginning of Cumulative Shareholding No. the year (01.04.2016) during the year No. of Shares % of Total Shares No. of Shares % of Total Shares of the Company of the Company 1. At the beginning of the year 2. Date wise Increase / Decrease in Promoters Shareholding during the year specifying the N.A. reasons for the increase / decrease (e.g. allotment / transfer / bonus / sweat equity etc.): 3. At the end of the year iv. Shareholding Pattern of top ten Shareholders (other than Directors, Promoters and Holders of GDRs and ADRs): Sl. Name Remarks Date Shareholding at the beginning Cumulative Shareholding No. of the year (01.04.2016) during the year No. of % of Total Shares of No. of % of Total Shares of Shares the Company Shares the Company 1. Modi Rubber At the beginning 01.04.2016 3137000 7.00 Limited of the year At the end of 31.03.2017 3137000 7.00 the year 2. Damani Estates At the beginning 01.04.2016 344488 0.76 & Finance Pvt. of the year Ltd. At the end of 31.03.2017 344488 0.76 the year 3. Superior At the beginning 01.04.2016 95000 0.21 Investment of the year (India) Limited At the end of 31.03.2017 95000 0.21 the year 4. Your Investment At the beginning 01.04.2016 95000 0.21 (India) Limited of the year At the end of 31.03.2017 95000 0.21 the year 5. Radhakishan S At the beginning 01.04.2016 75757 0.17 Damani of the year At the end of 31.03.2017 75757 0.17 the year 6. K K Modi At the beginning 01.04.2016 64160 0.14 Investment of the year And Financial At the end of 31.03.2017 64160 0.14 Services Pvt. the year Ltd. 7. Toplight At the beginning 01.04.2016 48179 0.11 Corporate of the year Management At the end of 31.03.2017 48179 0.11 Pvt. Ltd. the year 8. The Oriental At the beginning 01.04.2016 39746 0.09 Insurance of the year Company At the end of 31.03.2017 39746 0.09 Limited the year 28 ANNUAL REPORT 2017


  • Page 31

    STATUTORY REPORTS FINANCIAL STATEMENT Sl. Name Remarks Date Shareholding at the beginning Cumulative Shareholding No. of the year (01.04.2016) during the year No. of % of Total Shares of No. of % of Total Shares of Shares the Company Shares the Company 9. Rakesh At the beginning 01.04.2016 33366 0.07 Jhunjhunwala of the year At the end of 31.03.2017 33366 0.07 the year 10. Vipul Priyakant At the beginning 01.04.2016 12468 0.027 Dalal of the year At the end of 31.03.2017 12468 0.02 the year Notes: The details of shareholding, given above, is from 01-Apr-2016/the date of entering the Top 10 shareholders list till 31-Mar-2017 / the date of leaving Top 10 shareholders list. The above details are given as on 31 March, 2017. The Company is unlisted and 7.50% shareholding is in dematerialized form. Under the Depository system, the International Security Identification Number (ISIN) allotted to the Company’s shares is INE034E01013. The aforesaid holdings by top ten shareholders did not undergo any change. The Company has not allotted/transferred or issued any bonus or sweat equity shares during the year under Report. v. Shareholding of Directors and Key Managerial Personnel Directors and Key Managerial Personnel of the Company do not have any shareholding in the Company. V. Indebtedness Indebtedness of the Company including interest outstanding/accrued but not due for payment. Secured Loans Unsecured Loans (Inter- Deposits Total Indebtedness excluding deposits corporate Deposits) Indebtedness at the beginning of the financial year i) Principal Amount - - - - ii) Interest due but not paid - - iii) interest accrued but not due - - - - Total (i + ii + iii) - - - - Change in Indebtedness during the financial year • Addition - - - - • Reduction - - - - Net Change - - - - Indebtedness at the end of the financial year i) Principal Amount - - - - ii) Interest due but not paid - - - - iii) Interest accrued but not due - - - - Total (i + ii + iii) - - - - ANNUAL REPORT 2017 29


  • Page 32

    VI. Remuneration of Directors and Key Managerial Personnel A. Remuneration to Managing Director, Whole-time Directors and/or Manager: Sl.No. Particulars of the Remuneration Name of MD/WTD/Manager Total Amount Ashraf M.A. Elarman * 1. Gross Salary: (a) Salary as per provisions contained in Section 17(1) of 2,27,02,728 2,27,02,728 the Income Tax Act, 1961 (b) Value of Perquisites u/s 17(2) Income Tax Act, 1961 1,50,35,111 1,50,35,111 (c) Profits in lieu of salary under section 17(3) Income Tax N.A. N.A. Act, 1961 2. Stock Option N.A. N.A. 3. Sweat Equity N.A. N.A. 4. Commission - As % of profit N.A. N.A. - Others, specify N.A. N.A. 5. Others, please specify N.A. N.A. Total (A) 3,77,37,839 3,77,37,839 Ceiling as per the Act As per the applicable provisions of the Companies Act, 2013 and Rules made thereunder B. Remuneration to other directors: Sl. Particulars of the Name of Directors Total No. Remuneration Amount 1. Independent Directors Prakash Rishi Kant Kulathu Iyer Srivastava Fee for attending 1400000 1500000 2900000 Board/ Committee meetings Commission Nil Nil Nil Others, please specify Nil Nil Nil Total (1) 1400000 1500000 2900000 2. Other Non-Executive Rajat K. Daniel Daniela David Roodney Total Directors Jain Marc Cosette Brian Noonoo# Amount Benoit* Untescu* Dyas Fee for attending 500000 NA NA NA NA 500000 Board/ Committee meetings Commission Nil Nil Nil Nil Nil Nil Others, please specify Nil Nil Nil Nil Nil Nil Total (2) 500000 Nil Nil Nil Nil 500000 Total (B) – (1+2) 1400000 1500000 500000 Nil Nil Nil Nil 3400000 Total Managerial 4,11,37,839 Remuneration Overall Ceiling as per the Act$ $ fee for attending Board/Committee meetings is as per Section 197 of the Companies Act, 2013, as decided by the Board * Daniel Marc Benoit and Daniela Cosette Untescu ceased to be the directors of the Company effective 18th January 2017 and 1st April 2017, respectively # Rodney Noonoo has been inducted on Board effective 18th January 2017 30 ANNUAL REPORT 2017


  • Page 33

    STATUTORY REPORTS FINANCIAL STATEMENT C. Remuneration to key managerial personnel other than MD/Manager/WTD Sl. Particulars of the Remuneration Key Managerial Personnel No. CEO Company CFO Total Secretary N.A. Rajiv L. Jha Satpreet Singh Ahuja 1. Gross Salary: (a) Salary as per provisions contained in Section 2815821 7610747 10426568 17(1) of the Income Tax Act, 1961 (b) Value of Perquisites u/s 17(2) Income Tax Act, 31500 26100 57600 1961 (c) Profits in lieu of salary under section 17(3) Income 0 0 0 Tax Act, 1961 2. Stock Option N.A. N.A. N.A. 3. Sweat Equity N.A. N.A. N.A. 4. Commission - As % of profit N.A. N.A. N.A. - Others, specify N.A. N.A. N.A. 5. Others, please specify N.A. N.A. N.A. Total N.A. 2847321 7636847 10484168 VII. Penalties/Punishment/Compounding of Offences During the year under Report, there were no instance of any penalty/punishment/compounding of offences involving the Company, its Directors, and other officers in default under the provisions of the Companies Act, 2013. ANNUAL REPORT 2017 31


  • Page 34

    Independent audItorS’ report TO THE MEMBERS OF XEROX INDIA LIMITED Report on the Standalone Financial Statements 1. We have audited the accompanying standalone financial statements of Xerox India Limited (“the Company”), which comprise the Balance Sheet as at March 31, 2017, the Statement of Profit and Loss, the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information. Management’s Responsibility for the Standalone Financial Statements 2. The Company’s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (“the Act”) with respect to the preparation of these standalone financial statements to give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error. Auditors’ Responsibility 3. Our responsibility is to express an opinion on these standalone financial statements based on our audit. 4. We have taken into account the provisions of the Act and the Rules made thereunder including the accounting standards and matters which are required to be included in the audit report. 5. We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act and other applicable authoritative pronouncements issued by the Institute of Chartered Accountants of India. Those Standards and pronouncements require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. 6. An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditors’ judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company’s preparation of the financial statements that give a true and fair view, in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company’s Directors, as well as evaluating the overall presentation of the financial statements. 7. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified audit opinion on the financial statements. Basis for Qualified Opinion 8. We draw your attention to Note 37(b), regarding the payment of remuneration to directors in excess of the limits specified in Schedule XIII to the Companies Act, 1956 during the year ended March 31, 2009, for which the Company had since sought clarification from the Central Government on the amount approved by it under sections 309 and 310 of the Companies Act, 1956 and had applied for approval of the excess remuneration of Rs. 19.76 lacs. Pending receipt of any clarification/approval from the Central Government the Company submitted a withdrawal letter with respect to the clarification/approval sought from the Central Government and has during the year recovered the excess amount paid of Rs. 19.76 lacs from the parent company on behalf of the concerned managerial personnel. However, on the basis of our understanding and evaluation of the matter, the excess remuneration paid to directors in the previous year ended March 31, 2009 could be in the range of Rs. 76.59 lacs to Rs. 96.59 lacs. Qualified Opinion 9. In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements give the information required by the Act in the manner so required and except for the indeterminate effects of adjustments that may arise if the outcome of the matter described in the Basis of Qualified Opinion paragraph above is unfavorable and if the unapproved amounts lie within the range estimate mentioned therein, give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2017, and its profit and its cash flows for the year ended on that date. 32 ANNUAL REPORT 2017


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    STATUTORY REPORTS FINANCIAL STATEMENT Emphasis of Matter 10. We draw attention to note 38 (a) of the financial statements in respect of investigation proceedings by Directorate of Enforcement (ED) relating to “Cash and carry wholesale trading” activities undertaken by the Company during the period 2000 to 2003 and consequent non-compliance with the provision of Foreign Exchange Management Act, 1999 outcome of which cannot be reliably estimated pending disposal of the Company’s representation to Foreign Investment Promotion Board (FIPB) against the Rejection Letter rejecting the Company’s prior application seeking post facto approval from FIPB. Our opinion is not qualified in respect of the aforesaid matter. Report on Other Legal and Regulatory Requirements 11. As required by ‘the Companies (Auditor’s Report) Order, 2016’, issued by the Central Government of India in terms of sub- section (11) of section 143 of the Act (hereinafter referred to as the “Order”), and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we give in the Annexure B a statement on the matters specified in paragraphs 3 and 4 of the Order. 12. As required by Section 143 (3) of the Act, we report that: (a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit. (b) In our opinion, except for the indeterminate effects of the matter referred to in the Basis for Qualified Opinion above, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books. (c) The Balance Sheet, the Statement of Profit and Loss, and the Cash Flow Statement dealt with by this Report are in agreement with the books of account. (d) In our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. (e) On the basis of the written representations received from the directors as on March 31, 2017 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2017 from being appointed as a director in terms of Section 164 (2) of the Act. (f) The reservation relating to the maintenance of accounts and other matters connected therewith are as stated in the Basis of Qualified Opinion paragraph above. (g) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in Annexure A. (h) With respect to the other matters to be included in the Auditors’ Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our knowledge and belief and according to the information and explanations given to us: (i) The Company has disclosed the impact, if any, of pending litigations as at March 31, 2017 on its financial position in its standalone financial statements – Refer Note 20; (ii) The Company has made provision as at March 31, 2017, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long term contracts. (iii) There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company during the year ended March 31, 2017. (iv) The Company did not have any holdings or dealings in Specified Bank Notes during the period from 8th November, 2016 to 30th December, 2016 – Refer Note 43. For Price Waterhouse & Co Bangalore LLP Firm Registration Number: 007567S/S-200012 Chartered Accountants Rahul Chattopadhyay Gurgaon Partner July 25, 2017 Membership Number 096367 ANNUAL REPORT 2017 33


  • Page 36

    annexure a to Independent audItorS’ report Referred to in paragraph 12 (g) of the Independent Auditors’ Report of even date to the members of Xerox India Limited on the standalone financial statements for the year ended March 31, 2017 Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Act 1. We have audited the internal financial controls over financial reporting of Xerox India Limited (“the Company”) as of March 31, 2017 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date. Management’s Responsibility for Internal Financial Controls 2. The Company’s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India (ICAI). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Act. Auditors’ Responsibility 3. Our responsibility is to express an opinion on the Company’s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the “Guidance Note”) and the Standards on Auditing deemed to be prescribed under section 143(10) of the Act to the extent applicable to an audit of internal financial controls, both applicable to an audit of internal financial controls and both issued by the ICAI. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects. 4. Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. 5. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company’s internal financial controls system over financial reporting. Meaning of Internal Financial Controls Over Financial Reporting 6. A company’s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Inherent Limitations of Internal Financial Controls Over Financial Reporting 7. Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. 34 ANNUAL REPORT 2017


  • Page 37

    STATUTORY REPORTS FINANCIAL STATEMENT Opinion 8. In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2017, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India. For Price Waterhouse & Co Bangalore LLP Firm Registration Number: 007567S/S-200012 Chartered Accountants Rahul Chattopadhyay Gurgaon Partner July 25, 2017 Membership Number 096367 ANNUAL REPORT 2017 35


  • Page 38

    annexure b to Independent audItorS’ report Referred to in paragraph 11 of the Independent Auditors’ Report of even date to the members of Xerox India Limited on the standalone financial statements as of and for the year ended March 31, 2017 i. (a) The Company is maintaining proper records showing full particulars, including quantitative details and situation, of fixed assets. (b) The fixed assets are physically verified by the Management according to a phased programme designed to cover all the items over a period of three years which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. Pursuant to the programme, a portion of the fixed assets has been physically verified by the Management during the year and no material discrepancies have been noticed on such verification. (c) The title deeds of immovable properties, as disclosed in Note 10 on fixed assets to the financial statements, are held in the name of the Company. Title Deeds of leasehold land of Rs. 17. 56 Lacs and freehold land of Rs. 6.49 Lacs, being Assets held for sale, as disclosed in Note 14 to the financial statements are in possession of the Transferee. Refer Note 40 to the financial statements. ii. The physical verification of inventory excluding stocks with third parties have been conducted at reasonable intervals by the Management during the year. In respect of inventory lying with third parties, these have substantially been confirmed by them. The discrepancies noticed on physical verification of inventory as compared to book records were not material and have been appropriately dealt with in the books of accounts. iii. The Company has not granted any loans, secured or unsecured, to companies, firms, Limited Liability Partnerships or other parties covered in the register maintained under Section 189 of the Act. Therefore, the provisions of Clause 3(iii), (iii) (a), (iii) (b) and (iii) (c) of the said Order are not applicable to the Company. iv. The Company has not granted any loans or made any investments, or provided any guarantees or security to the parties covered under Section 185 and 186. Therefore, the provisions of Clause 3(iv) of the said Order are not applicable to the Company. v. The Company has not accepted any deposits from the public within the meaning of Sections 73, 74, 75 and 76 of the Act and the Rules framed there under to the extent notified. vi. The Central Government of India has not specified the maintenance of cost records under sub-section (1) of Section 148 of the Act for any of the products of the Company. vii. (a) According to the information and explanations given to us and the records of the Company examined by us, in our opinion, the Company is regular in depositing the undisputed statutory dues, including provident fund, employees’ state insurance, income tax, sales tax, service tax, duty of customs, duty of excise, value added tax, cess and other material statutory dues, as applicable, with the appropriate authorities. (b) According to the information and explanations given to us and the records of the Company examined by us, the particulars of dues of income tax, sales tax, service tax, duty of customs duty of excise and value added tax as at March 31, 2017 which have not been deposited on account of a dispute, are as follows: Amount in Rs. lacs Name of the Statute Nature of Total Paid under Period to which Forum where dispute is Dispute Demand protest the amount relates pending J&K General Sales Tax Sales Tax 2.11 - 1999-2000 Joint Commissioner Act, 1962 (Appeal) J&K General Sales Tax Sales Tax 16.04 6.00 2000-01 Amnesty Scheme Act, 1962 Central Sales Tax Act, Sales Tax 0.05 - 2000-01 Amnesty Scheme 1956 (J&K) Andhra Pradesh General Sales Tax 52.90 - 1999-00 & 2000-01 Hyderabad High Court Sales Tax Act, 1957 Andhra Pradesh General Sales Tax 8.94 - 2004-05 Appellate Tribunal Sales Tax Act, 1957 36 ANNUAL REPORT 2017


  • Page 39

    STATUTORY REPORTS FINANCIAL STATEMENT Amount in Rs. lacs Name of the Statute Nature of Total Paid under Period to which Forum where dispute is Dispute Demand protest the amount relates pending Andhra Pradesh General Sales Tax 10.22 11.25 (Oct-2005) Appellate Deputy Sales Tax Act,1957 Commissioner Central Sales Tax Act, Sales Tax 196.89 - 1999-00 & 2000-01 Hyderabad High Court 1956 (Andhra Pradesh) Andhra Pradesh General Sales Tax 1.85 1.85 2016-17 Assessing Authority Sales Tax Act, 1956 Bihar Finance Act, 1981 Sales Tax 11.77 - 1992-93 & 1993-94 Revision Application Field with CCT Bihar Finance Act, 1981 Sales Tax 0.39 - 1994-95 DCCT Delhi Sales Tax Act, 1975 Sales Tax 13.59 - 2006-07 Additional Commissioner Delhi Sales Tax Act, 1975 Sales Tax 703.68 108.26 2008-09 Tax Tribunal Delhi Sales Tax Act, 1975 Sales Tax 231.79 - 2010-11 Commissioner Tamil Nadu General Sales Tax 9.48 5.42 2006-07 Joint Commissioner CT, Sales Tax Act, 1959 Chennai Central Sales Tax Act, Sales Tax 12.22 - 2007-08,2008- Assessing Authority 1956 (Tamil Nadu) Dec- 09,2009-10 form Gujarat Sales Tax Act, Sales Tax 144.30 68.62 2004-05 to 2006-07 Tribunal 1969 Central Sales Tax Act, Sales Tax 13.62 5.32 2006-07 & 2007-08 Tribunal 1956 (Gujarat) Central Sales Tax Act, Sales Tax 0.46 0.46 2009-10 DCCT (Appeals) 1956 (Gujarat) Gujarat Sales Tax Act, Sales Tax 19.44 4.00 2009-10 DCCT (Appeals) 1969 Maharashtra VAT Act, Sales Tax 122.03 28.14 2011-12 Joint Commissioner 2002 Central Sales Tax Act, Sales Tax 0.93 0.66 2011-12 Joint Commissioner 1956 (Maharashtra) M.P. Vanijyik Kar Sales Tax 9.95 4.95 1999-00 Revision to be Filed Adhiniyam, 1994 M.P. Vanijyik Kar Sales Tax 39.40 14.93 1997-98 to 2000-01 Appellate Deputy Adhiniyam, 1994 & 2002-03 Commissioner M.P.Entry Tax Act, 1976 Entry Tax 4.50 2.01 1996-97,1997- Appellate Deputy 98,1999-00,2002-03 Commissioner Central Sales Tax Act, Sales Tax 2.67 1.16 2000-01 to 2002-03 Appellate Deputy 1956 (MP) Commissioner Kerala General Sales Tax Sales Tax 1.73 - 2008-09 Deputy Commissioner, Act, 1963 (Appeal , Ernakulam) ANNUAL REPORT 2017 37


  • Page 40

    Amount in Rs. lacs Name of the Statute Nature of Total Paid under Period to which Forum where dispute is Dispute Demand protest the amount relates pending Central Sales Tax Act, Sales Tax 11.72 4.50 2008-09 DCCT, (Appeals) 1956 (Kerala) Ernakulam Kerala General Sales Tax Sales Tax 5.84 - 2012-13 Assessing Authority Act, 1963 Orissa Entry Tax Act, Sales Tax 10.55 8.00 2000-01 Tribunal 1999 Orissa Entry Tax Act, Sales Tax 1.16 0.75 2001-02 & 2002-03 Appeal Asst. Comm. 1999 Central Sales Tax Act, Sales Tax 8.39 3.00 2000-01 Tribunal 1956 (Orissa) U.P Trade Tax Act, 1948 Sales Tax 5.54 5.54 2006-07 Tribunal U.P Trade Tax Act, 1948 Sales Tax 1.28 7.51 2008-09 Tribunal U.P Trade Tax Act, 1950 Sales Tax 2.50 2.50 2013-14 ACCT Mobile Squad, Jalaun U.P Trade Tax Act, 1950 Sales Tax 0.21 0.21 2010-11 DCCT, Lucknow U.P Trade Tax Act, 1950 Sales Tax 0.39 - 2006-07 & Jan-08 to DCCT, Rampur Mar-08 U.P Trade Tax Act, 1950 Sales Tax 53.64 11.57 2009-10 to 2011-12 DCCT, Lucknow & 2013-14 U.P Entry tax Sales Tax 8.16 5.06 2008-09 Tribunal U.P Entry tax Sales Tax 2.86 0.68 2009-10 & 2013-14 DCCT, Lucknow U.P Entry tax Sales Tax 1.52 - Apr-07 to Dec-07 & DCCT, Rampur Jan-08 to Mar-08 Central Sales Tax Act, Sales Tax 0.03 - Jan-08 to Mar-08 DCCT, Rampur 1956 P(UP) Central Sales Tax Act, Sales Tax 44.44 45.17 2008-09 Tribunal 1956 (UP) Central Sales Tax Act, Sales Tax 390.04 165.44 2009-10, 2010-11 DCCT, Lucknow 1956 (UP) U.P Trade Tax Act, 1950 Sales Tax 9.43 5.06 2016-17 DCCT, Lucknow Rajasthan VAT Tax Act, Sales Tax 1.41 1.41 1998-99 Assessing Authority 2003 Rajasthan VAT Tax Act, Sales Tax 1.53 1.53 1998-99 Rectification Application 2003 before Appellate authority Himachal Sales Tax Act Sales Tax 2.41 2.41 1998-99 Deputy commissioner Excise & Taxation, Parwanoo Uttarakhand VAT Act Sales Tax 2.87 - Oct-05 to Mar-06 DCCT, Dehradun Chapter V of Finance Service Tax 3,265.95* # May 2006 to March Central Excise and Service Act, 1994 2008 Tax Appellate Tribunal 38 ANNUAL REPORT 2017


  • Page 41

    STATUTORY REPORTS FINANCIAL STATEMENT Amount in Rs. lacs Name of the Statute Nature of Total Paid under Period to which Forum where dispute is Dispute Demand protest the amount relates pending Chapter V of Finance Service Tax 5,079.28* # April 2008 to Sep Central Excise and Service Act, 1994 2011 Tax Appellate Tribunal Chapter V of Finance Service Tax 140.11 # August 2002 to Dec Central Excise and Service Act, 1994 2005 Tax Appellate Tribunal Chapter V of Finance Service Tax 1,629.99* 70.46# Oct-11 to Jun-12 Central Excise and Service Act, 1994 Tax Appellate Tribunal Central Excise Act, 1944 Excise Duty 3,572.95* - Apr-02 to Nov-06 Hon'ble Supreme court Central Excise Act, 1944 Excise Duty 3,050.14* 37.27 Apr-02 to Nov-06 Central Excise and Service Tax Appellate Tribunal & Supreme court Central Excise Act, 1944 Excise Duty 525.26 - Dec-06 to Dec-09 Commissioner of Central Excise, Meerut Central Excise Act, 1944 Excise Duty 13.20 - May-08 to Jan-09 Additional Commissioner Central Excise, Meerut II Central Excise Act, 1944 Excise Duty 0.26 - Jan-10 to Mar-10 Assistant Commissioner of Central Excise, Gangapur- Rampur Central Excise Act, 1944 Excise Duty 5.11 - 1994-95 Central Excise and Service Tax Appellate Tribunal Central Excise Act, 1944 Excise Duty 435.42* - 26-May-1988 to High Court - Allahabad March 1998 Income Tax Act, 1961 Income Tax 104.98* - 1995-96 Delhi High Court Income Tax Act, 1961 Income Tax 430.79 425.95 1997-98 ITAT Delhi Income Tax Act, 1961 Income Tax 8.63 8.63 1998-99 Assessing Officer Income Tax Act, 1961 Income Tax 928.30 928.30 2002-03 ITAT Delhi Income Tax Act, 1961 Income Tax 307.15 139.39 2003-04 Assessing Officer Income Tax Act, 1961 Income Tax 46.83* - 2004-05 ITAT Delhi Income Tax Act, 1961 Income Tax 29.95 29.95 2005-06 ITAT Delhi Income Tax Act, 1961 Income Tax 1,849.94 1,573.53# 2007-08 ITAT Delhi Income Tax Act, 1961 Income Tax 3,726.60 923.47# 2008-09 ITAT Delhi Income Tax Act, 1961 Income Tax 849.41 - 2009-10 ITAT Delhi Income Tax Act, 1961 Income Tax 184.59 - 2010-11 ITAT Delhi Income Tax Act, 1961 Income Tax 892.03 - 2011-12 ITAT Delhi Income Tax Act, 1961 Income Tax 20.56 - 2012-13 CIT(A) Delhi Note: The above exclude demands decided in favour of the Company, for which effect yet to be given by the relevant authorities. *Above includes demand decided in favour of the Company at the appellate authority stage for which the Department has preferred an appeal to the higher authorities. # Represents demands which has been granted full stay or are under interim stay by the Courts. ANNUAL REPORT 2017 39


  • Page 42

    viii. As the Company does not have any loans or borrowings from any financial institution or bank or Government, nor has it issued any debentures as at the balance sheet date, the provisions of Clause 3(viii) of the Order are not applicable to the Company. ix. The Company has not raised any moneys by way of initial public offer, further public offer (including debt instruments) and term loans. Accordingly, the provisions of Clause 3(ix) of the Order are not applicable to the Company. x. During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance of material fraud by the Company or on the Company by its officers or employees, noticed or reported during the year, nor have we been informed of any such case by the Management. xi. The Company has paid managerial remuneration in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V to the Act. xii. As the Company is not a Nidhi Company and the Nidhi Rules, 2014 are not applicable to it, the provisions of Clause 3(xii) of the Order are not applicable to the Company. xiii. The Company has entered into transactions with related parties in compliance with the provisions of Sections 177 and 188 of the Act. The details of such related party transactions have been disclosed in the financial statements as required under Accounting Standard (AS) 18, Related Party Disclosures specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. xiv. The Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review. Accordingly, the provisions of Clause 3(xiv) of the Order are not applicable to the Company. xv. The Company has not entered into any non-cash transactions with its directors or persons connected with him. Accordingly, the provisions of Clause 3(xv) of the Order are not applicable to the Company. xvi. The Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934. Accordingly, the provisions of Clause 3(xvi) of the Order are not applicable to the Company. For Price Waterhouse & Co Bangalore LLP Firm Registration Number: 007567S/S-200012 Chartered Accountants Rahul Chattopadhyay Gurgaon Partner July 25, 2017 Membership Number 096367 40 ANNUAL REPORT 2017


  • Page 43

    STATUTORY REPORTS FINANCIAL STATEMENT Balance Sheet as at March 31, 2017 [All figures in Rs. lacs, unless otherwise stated] Note No. As at As at March 31, 2017 March 31, 2016 Equity and Liabilities Shareholders' funds Share capital 3 4,480.80 4,480.80 Reserves and surplus 4 22,179.79 16,268.06 Non-current liabilities Other long-term liabilities 5 2,317.88 2,348.56 Long-term provisions 6 4,358.40 3,833.63 Current liabilities Trade payables Total outstanding dues of micro enterprises - - and small enterprises Total outstanding dues of creditors other than 7 4,018.13 5,238.53 micro enterprises and small enterprises Other current liabilities 8 1,875.85 1,615.12 Short-term provisions 9 486.58 538.94 Total 39,717.43 34,323.64 Assets Non-current assets Fixed assets Tangible assets 10 2,670.82 4,021.93 Intangible assets 11 224.83 110.30 Capital work in progress 10.35 3.44 Deferred tax assets (net) 12 3,312.31 3,153.15 Long-term loans and advances 13 7,363.40 7,362.07 Other non-current assets 14 72.19 62.47 Current assets Inventories 15 3,483.43 3,661.82 Trade receivables 16 6,817.16 7,880.94 Cash and bank balances 17 13,468.08 6,573.26 Short-term loans and advances 18 899.71 632.98 Other current assets 19 1,395.15 861.28 Total 39,717.43 34,323.64 The accompanying notes are an integral part of these financial statements. This is the Balance Sheet referred to in our report of even date. For Price Waterhouse & Co Bangalore LLP For and on behalf of Board of directors Firm Registration No.: 007567S/S-200012 Chartered Accountants Ashraf M. A. Elarman Rajat Jain Satpreet Singh Ahuja Managing Director Director Chief Financial Officer Rahul Chattopadhyay Mohit Kumar Rajiv L. Jha Partner Finance Controller Company Secretary & Membership Number: 096367 GM Legal Gurgaon, India Gurgaon, India July 25, 2017 July 25, 2017 ANNUAL REPORT 2017 41


  • Page 44

    Statement of Profit and Loss for the year ended March 31, 2017 [All figures in Rs. lacs, unless otherwise stated] Note Year ended Year ended No. March 31, 2017 March 31, 2016 Income Revenue from operations (Net) 22 53,271.04 52,075.42 Other Income 23 974.07 869.23 Total Revenue 54,245.11 52,944.65 Expenses Purchase of goods and services 24 28,402.02 27,479.32 Change in inventories of goods 25 310.61 286.62 Employee benefit expense 26 10,797.27 11,224.25 Finance costs 27 54.44 154.86 Depreciation and amortization expense 28 1,773.97 2,041.72 Other expenses 29 7,997.11 8,792.91 Total expenses 49,335.42 49,979.68 Profit before exceptional item and tax 4,909.69 2,964.97 Exceptional item - Profit on transfer of Business 22(a) 3,437.14 - Profit before tax 8,346.83 2,964.97 Tax expense Current tax 2,668.31 1,346.33 Prior years tax (56.67) - Deferred tax (159.15) (272.47) Profit for the year 5,894.34 1,891.11 Earnings per equity share [Nominal value per share: 33 Rs. 10 (March 31, 2016: Rs. 10)] Basic 13.15 4.22 Diluted 13.15 4.22 The accompanying notes are an integral part of these financial statements. This is the Statement of Profit and Loss referred to in our report of even date For Price Waterhouse & Co Bangalore LLP For and on behalf of Board of directors Firm Registration No.: 007567S/S-200012 Chartered Accountants Ashraf M. A. Elarman Rajat Jain Satpreet Singh Ahuja Managing Director Director Chief Financial Officer Rahul Chattopadhyay Mohit Kumar Rajiv L. Jha Partner Finance Controller Company Secretary & Membership Number: 096367 GM Legal Gurgaon, India Gurgaon, India July 25, 2017 July 25, 2017 42 ANNUAL REPORT 2017


  • Page 45

    STATUTORY REPORTS FINANCIAL STATEMENT Statement of Cash Flows for the year ended March 31, 2017 [All figures in Rs. lacs, unless otherwise stated] Year ended Year ended March 31, 2017 March 31, 2016 A. Cash flow from operating activities Profit before tax 8,346.83 2,964.97 Adjustments for non-cash / non-operating items: Depreciation and amortization expense 1,773.97 2,041.72 Finance cost 54.44 154.86 Interest income (442.26) (285.59) Other non cash adjustments 220.22 569.62 Unrealised foreign exchange loss (net) 43.25 49.89 Profit on transfer of Business (3,437.14) - Operating profit before working capital changes 6,559.31 5,495.47 (Increase) / Decrease in inventory 174.95 143.33 (Increase) / Decrease in trade receivables 991.33 (1,121.51) (Increase) / Decrease in other current assets and short term loans & advances (700.27) 223.13 (Increase) / Decrease in other bank balance 2,379.90 797.30 Increase / (Decrease) in trade payables (1,299.96) (326.82) Increase / (Decrease) in other current liabilities & provisions 273.28 75.73 (Increase) / Decrease in other non-current assets and long term loans & advances 143.75 (183.40) Increase / (Decrease) in other non-current liabilities & provisions 352.60 (106.71) Cash generated from operations 8,874.89 4,996.52 Income tax paid including tax deducted at source (2,784.17) (1,167.18) Net cash generated from operating activities 6,090.72 3,829.34 B. Cash flows from investing activities Purchase of tangible/ intangible assets (1,328.82) (1,383.55) Proceeds from sale of tangible/ intangible assets 4,209.50 - Interest received 360.10 243.60 Net Cash from/ (used in) investing activities 3,240.78 (1,139.95) C. Cash flows from financing activities Repayment of intercompany deposits - (2,500.00) Finance Cost (54.44) (215.27) Net Cash used in financing activities (54.44) (2,715.27) Net increase/(decrease) in cash & cash equivalents (A+B+C) 9,277.06 (25.88) Effect of exchange differences on balance with banks in foreign currency (2.34) 3.89 Cash and cash equivalents at the beginning of the year 3,393.36 3,415.35 Cash and cash equivalents at the end of the year 12,668.08 3,393.36 Cash and cash equivalents comprise of: Cheques on hand 551.96 672.77 Bank balances - In current accounts 1,631.12 555.59 - Demand deposits (less than 3 months maturity) 10,485.00 2,165.00 Total 12,668.08 3,393.36 This is the cash flow statement referred to in our report of even date. For Price Waterhouse & Co Bangalore LLP For and on behalf of Board of directors Firm Registration No.: 007567S/S-200012 Chartered Accountants Ashraf M. A. Elarman Rajat Jain Satpreet Singh Ahuja Managing Director Director Chief Financial Officer Rahul Chattopadhyay Mohit Kumar Rajiv L. Jha Partner Finance Controller Company Secretary & Membership Number: 096367 GM Legal Gurgaon, India Gurgaon, India July 25, 2017 July 25, 2017 ANNUAL REPORT 2017 43


  • Page 46

    Notes to the Financial Statements [All figures in ` lacs, unless otherwise stated] 1. General Information 2.3 Tangible assets Xerox India Limited (‘the Company’) was incorporated in Tangible assets are stated at acquisition cost, net of India on December 29, 1995 and is engaged in the business Central value added tax (Cenvat) / Countervailing Duty of trading of xerographic equipments, multifunction devices, (CVD), wherever claimed, accumulated depreciation and laser printers, systems, consumables, paper and providing accumulated impairment losses, if any. Cost includes after-sales services of machines sold which include original cost of acquisition and includes expenses incidental servicing, repairing, selling spare parts. The Company is to such acquisition. Items of fixed assets transferred from a Public Limited Company ultimately controlled by Xerox Inventory are capitalised at carrying cost at the time of Corporation of USA. transfer. The accompanying financial statements reflect the results Subsequent expenditures related to an item of fixed asset of the activities undertaken by the Company during the year are added to its book value only if they increase the future ended March 31, 2017. benefits from the existing asset beyond its previously assessed standard of performance. 2. Summary of significant accounting policies Items of fixed assets that have been retired from active 2.1 Basis of accounting use and are held for disposal are stated at the lower of These financial statements have been prepared in their net book value and net realisable value and are accordance with the generally accepted accounting shown separately in the financial statements under other principles in India under the historical cost convention on non current Assets (refer note 40). Any expected loss is accrual basis. Pursuant to section 133 of the Companies recognised immediately in the Statement of Profit and Loss. Act, 2013 read with Rule 7 of the Companies (Accounts) Losses arising from the retirement of, and gains or losses Rules, 2014, till the standards of accounting or any arising from disposal of fixed assets which are carried at addendum thereto are prescribed by Central Government in consultation and recommendation of the National Financial cost are recognised in the Statement of Profit and Loss. Reporting Authority, the existing Accounting Standards 2.4 Intangible assets notified under the Companies Act, 1956 shall continue to apply. Consequently, these financial statements have Intangible assets are stated at acquisition cost, net of been prepared to comply in all material aspects with the accumulated amortisation and accumulated impairment accounting standards notified under Section 211 (3C) losses, if any. Intangible assets are amortised on a straight [Companies (Accounting Standards) Rules, 2006, as line basis over their estimated useful lives. A rebuttable amended] and other relevant provisions of the Companies presumption that the useful life of an intangible asset Act, 2013. will not exceed 10 years from the date when the asset is available for use is considered by the management. The All assets and liabilities have been classified as current amortisation period and amortisation method are reviewed or non-current as per the Company’s normal operating at each financial year end and if the expected useful life of cycle and other criteria set out in the Schedule III to the Companies Act, 2013. the asset is significantly different from previous estimates, the amortisation period is changed accordingly. 2.2 Use of estimates Gains or losses arising from the retirement or disposal The preparation of financial statements requires the of an intangible asset are determined as the difference management of the Company to make estimates and between the net disposal proceeds and the carrying amount assumptions in conformity with the applicable accounting of the asset and recognised as income or expense in the principles in India that affect the reported balances of assets Statement of Profit and Loss. and liabilities and disclosures relating to the contingent liabilities as at the date of the financial statements and 2.5 Depreciation and Amortisation reported amounts of income and expenses during the Depreciation on Xerox equipments, whether self used or period. Example of such estimates include provisions for deployed at customer place (Global document outsourcing doubtful debts, employee retirement benefit plans, warranty, contracts) is provided on straight-line method over their provision for taxes and the useful lives of fixed assets. estimated useful life (5 years). Leasehold land and leasehold These estimates could change from year to year and also the improvements are amortised over the period of the lease. actual results could vary from the estimates. The changes Intangible assets are amortised on straight-line method in estimates are reflected in the financial statements in the over their estimated useful life (2 - 7 years). Depreciation period in which changes are made and if material, their on all other fixed assets is provided on the written down effects are disclosed in the notes to the financial statements. value method over the estimated useful life of the assets at rates specified in Schedule II to the Companies Act, 2013. 44 ANNUAL REPORT 2017


  • Page 47

    STATUTORY REPORTS FINANCIAL STATEMENT All assets costing Rs. 5,000 or below are depreciated in the restated at the end of accounting period using the exchange year of having been put to use by the way of a one time rate prevailing at the reporting date. As at the reporting date, depreciation charge. non-monetary items which are carried in terms of historical Depreciation on addition to fixed assets is provided on pro- cost denominated in a foreign currency are reported using rata basis from the date of asset put to use. Depreciation on the exchange rate at the date of the transaction. disposal from fixed assets is provided for upto the date of Exchange differences on restatement of all monetary items disposal. are recognised in the Statement of Profit and Loss. The premium or discount arising at the inception of forward 2.6 Impairment of assets exchange contracts entered into to hedge an existing asset/ Assessment is done at each Balance Sheet date as to liability, is amortised as expense or income over the life whether there is any indication that an asset (tangible and of the contract. Exchange differences on such a contract intangible) may be impaired. For the purpose of assessing are recognised in the Statement of Profit and Loss in the impairment, the smallest identifiable group of assets that reporting period in which the exchange rates change. Any generates cash inflows from continuing use that are largely profit or loss arising on cancellation or renewal of such a independent of the cash inflows from other assets or forward exchange contract is also recognised as income or groups of assets, is considered as a cash generating unit. as expense for the period. If any such indication exists, an estimate of the recoverable In translating the financial statements of a non-integral amount of the asset/cash generating unit is made. Assets foreign operation for incorporation in financial statements, whose carrying value exceeds their recoverable amount the assets and liabilities, both monetary and non-monetary are written down to the recoverable amount. Recoverable are translated at the closing rate, income and expense amount is higher of an asset’s or cash generating unit’s items are translated at average exchange rates prevailing net selling price and its value in use. Value in use is the during the year or a rate that approximates the actual present value of estimated future cash flows expected exchange rate, and all resulting exchange differences are to arise from the continuing use of an asset and from its accumulated in a foreign currency translation reserve until disposal at the end of its useful life. Assessment is also the disposal of the net investment. done at each Balance Sheet date as to whether there is any indication that an impairment loss recognised for an asset 2.9 Revenue recognition in prior accounting periods may no longer exist or may have Sale of products:- Revenue from sale of products is decreased. recognised as products are dispatched to the customers and upon the transfer of significant risks and rewards to the 2.7 Inventories customer. Revenue from sale of products with a conditional Inventories are stated at lower of cost and net realisable clause on installation is recognised on completion of value. The basis for determination of cost of various installation and acknowledgement by the customer. Sales categories of inventory is as follows: are recorded at invoice value, net of trade discount, sales Loose tools Weighted average taxes, returns. Finished goods - trade Weighted average Sale of services:- Revenue from maintenance services Components for sales and Weighted average and other services are recognized as per the terms of the service of field machines agreement as and when the services are actually rendered. Net realisable value is the estimated selling price in the In both the above situations, revenue is recognised when ordinary course of business less the estimated costs no significant uncertainty exists regarding collection of the necessary to make the sale. consideration. A provision for obsolescence on loose tools, components for Software services and Other services (Business support) sale and service of field machines held to support servicing are rendered to overseas affiliates of Xerox India and the of discontinued/ obsolete/ dormant models is accrued at revenue is recognised on cost plus basis in accordance with their book value. The recoverability of all other inventories the terms of the agreement entered between the company is periodically reviewed and provision for obsolescence is and these affiliates. recorded for the difference between net realisable values Revenue from fixed price contracts, where there is and carrying value. no uncertainty as to measurement or collectability of consideration, is recognised based upon the percentage 2.8 Foreign currency transactions of completion method. When there is uncertainty about On initial recognition, all foreign currency transactions are measurement or ultimate collectability, revenue recognition recorded by applying to the foreign currency amount the is postponed until such uncertainty is resolved. Cost and exchange rate between the reporting currency (INR) and the earning in excess of billing are classified as unbilled revenue foreign currency prevailing at the date of the transaction. while billing in excess of cost and earnings are classified as All monetary assets and liabilities in foreign currency are deferred revenue. ANNUAL REPORT 2017 45


  • Page 48

    2.10 Other Income Accumulated compensated absences, which are expected Interest income is recognised on a time proportion basis to be availed or encashed within 12 months from the end taking into account the amount outstanding and the of year are treated as short term employee benefits, while applicable interest rate. accumulated compensated absences expected to be availed or encashed beyond 12 months from the end of year 2.11 Employee benefits are treated as other long term employee benefits. Actuarial losses/ gains are recognised in the Statement of Profit and Provident fund:- In accordance with the provisions of the Loss in the year in which they arise. Employees Provident Funds and Miscellaneous Provisions Act, 1952, eligible employees of the company are entitled Termination benefits:- Termination benefits are recognised to receive benefits with respect to provident fund, a in the Statement of Profit and Loss as and when incurred. defined benefit plan in which both the company and the employee contribute monthly at a determined rate. These 2.12 Current and deferred tax contributions are made to a fund maintained by a trust Tax expense for the year, comprising current tax and deferred set up by the company and administered by the Board of tax, are included in the determination of the net profit or loss trustees. The Company’s liability is actuarially determined for the year. Current tax measured at the amount expected (using Projected Unit Credit method) at the end of the year to be paid to the tax authorities in accordance with the and any shortfall in the fund size maintained by the trust taxation laws prevailing in the respective jurisdictions and is set up by the company is additionally provided for. Actuarial based on the expected outcome of assessment. losses/gains are recognised in the Statement of Profit and Deferred tax is recognised for all the timing differences, Loss in the year in which they arise. subject to the consideration of prudence in respect of Gratuity:- Benefits payable to eligible employees of the deferred tax assets. Deferred tax assets are recognised company with respect to gratuity, a defined benefit plan and carried forwarded only to the extent that there is a is accounted for on the basis of an actuarial valuation on reasonable certainty that sufficient future taxable income the projected unit credit (PUC) method adjusted for past will be available against which such deferred tax assets can service and fair value of plan assets as at the balance be realised. Deferred tax assets and liabilities are measured sheet date. The company contributes all the ascertained using the tax rates and tax laws that have been enacted or liabilities to a fund maintained by a trust set up by the substantively enacted by the Balance Sheet date. At each company and administered by a board of trustees, which Balance Sheet date, the company reassesses unrecognised has taken two Gratuity cum insurance policies with the Life deferred tax assets, if any. Insurance Corporation of India to cover the gratuity liability Current tax assets and current tax liabilities are offset when of the employees and premium paid to such insurance there is a legally enforceable right to set off the recognised company is charged to the statement of profit and loss. The amounts and there is an intention to settle the asset and resultant actuarial gain or loss on change in present value the liability on a net basis. Deferred tax assets and deferred of the defined benefit obligation or change in return of the tax liabilities are offset when there is a legally enforceable plan assets is recognised as an income or expense in the right exists to set off assets against liabilities representing Statement of Profit and Loss Account. current tax and where the deferred tax assets and deferred tax liabilities relate to the taxes on income levied by the Superannuation:- Benefits payable to eligible employees same governing taxation laws. of the company under the superannuation plan, a Minimum alternate tax credit is recognised as an asset only defined contribution plan is accounted for on the basis of when and to the extent there is convincing evidence that the contributions calculated at a specified percentage (currently Company will pay normal income tax during the specified 13%) of salary paid to the employees. The Company period. Such asset is reviewed at each balance sheet date contributes all the ascertained liabilities to a fund set up and the carrying amount of the MAT credit asset is written by the company and administered by a board of trustees, down to the extent there is no longer a convincing evidence which has taken a policy with Life Insurance Corporation of to the effect that the Company will pay normal income tax India to cover such liability. during the specified period. Leave encashment:- Leave encashment benefits 2.13 Provisions and contingent liabilities (compensated absences) payable to employees on retirement, death while in service or on termination of Provisions:- Provisions are recognised when there employment with respect to accumulated leaves outstanding is a present obligation as a result of a past event and it at the year are accounted for on the basis of an actuarial is probable that an outflow of resources embodying valuation using the projected unit credit method as at the economic benefits will be required to settle the obligation, balance sheet. and a reliable estimate can be made of the amount of the obligation. Provisions are measured at the best estimate of Short term employee benefits are recognised as an expense the expenditure required to settle the present obligation at for services rendered during the year. the balance sheet date and are not discounted to its present value. 46 ANNUAL REPORT 2017


  • Page 49

    STATUTORY REPORTS FINANCIAL STATEMENT Contingent liabilities:- Contingent liabilities are disclosed 2.16 Cash and cash equivalents when there is a possible obligation arising from past In the cash flow statement, cash and cash equivalents events, the existence of which will be confirmed only by includes cash in hand, demand deposits with banks, other the occurrence or non occurrence of one or more uncertain short-term highly liquid investments with original maturities future events not wholly within the control of the company of three months or less. or a present obligation that arises from past events where it is either not probable that an outflow of resources will be 2.17 Earnings per share required to settle or a reliable estimate of the amount cannot Basic earnings per share is calculated by dividing the net be made. profit or loss for the year attributable to equity shareholders by the weighted average number of equity shares 2.14 Warranty outstanding during the year. For the purpose of calculating In house: diluted earnings per share, the net profit or loss for the Model wise average warranty for spare and labour cost year attributable to equity shareholders and the weighted per month is determined based on historical consumption average number of shares outstanding during the year is pattern. The warranty provision is made based on the adjusted for the effects of all dilutive potential equity shares. rate determined above as a multiple of the number of months of warranty. In case of new models introduced for 2.18 Borrowing costs which historical data is not available, then the cost will be General and specific borrowing costs directly attributable determined on the basis of similar type of existing models. to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial Outsourced: period of time to get ready for their intended use or sale, In case the warranty service is outsourced to authorized are added to the cost of those assets, until such time as the service providers, the warranty cost per month is fixed for assets are substantially ready for their intended use or sale. each model as per the agreement. The warranty provision All other borrowing costs are recognised in Statement of is made based on the actual fixed rate as a multiple of the Profit and Loss in the year in which they are incurred. number of months of warranty. The warranty provision is made in the month of sale of equipment. 2.19 Segment reporting The accounting policies adopted for segment reporting are 2.15 Leases in conformity with the accounting policies adopted for the As a Lessee Company. Further, inter-segment revenue is accounted Leases in which a significant portion of the risks and rewards for based on the transaction price agreed to between of ownership are retained by the lessor are classified as segments which is primarily market based. Revenue and operating leases. Lease Rentals in respect of operating expenses have been identified to segments on the basis of lease arrangements are charged to expenses when due as their relationship to the operating activities of the segment. per the terms of the related agreement on a straight line Revenue and expenses, which relate to the Company as a basis over the lease term. whole and are not allocable to segments on a reasonable basis, have been included under “Unallocated corporate As a Lessor expenses”. The Company has leased certain tangible assets and such leases where the Company has substantially retained all the risks and rewards of ownership are classified as operating leases. Lease income on such operating leases are recognised in the Statement of Profit and Loss over the lease term which is representative of the time pattern in which the benefit derived from the use of the leased asset is diminished. Initial direct costs are recognised as an expense in the Statement of Profit and Loss in the year in which they are incurred. ANNUAL REPORT 2017 47


  • Page 50

    Notes to the Financial Statements [All figures in Rs. lacs, unless otherwise stated] 3. Share capital As at As at March 31, 2017 March 31, 2016 Authorised: 10,00,00,000 (March 31, 2016: 10,00,00,000) equity shares of Rs. 10 each 10,000.00 10,000.00 Issued: 4,48,08,000 (March 31, 2016: 4,48,08,000) equity shares of Rs. 10 each 4,480.80 4,480.80 Subscribed and paid up 4,48,08,000 (March 31, 2016: 4,48,08,000) equity shares of Rs. 10 each 4,480.80 4,480.80 4,480.80 4,480.80 a. Reconciliation of number of shares Equity shares: March 31, 2017 March 31, 2016 No. of shares Amount No. of shares Amount Balance as at the beginning of the year 44,808,000 4,480.80 44,808,000 4,480.80 Add: Shares issued during the year - - - - Balance as at the end of the year 44,808,000 4,480.80 44,808,000 4,480.80 b. Rights, preferences and restrictions attached to shares Equity Shares: The Company has one class of equity shares having a par value of Rs. 10 per share. Each member is eligible for one vote per share held. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding. c. Shares held by holding company and subsidiaries of holding company Equity shares: As at As at March 31, 2017 March 31, 2016 2,04,23,200 (March 31, 2016: 2,04,23,200) shares held by Xerox Limited, United Kingdom, a subsidiary of Xerox 2,042.32 2,042.32 Corporation, USA, the ultimate holding/ parent company 1,76,06,706 (March 31, 2016: 1,76,06,706) shares held by XC Trading Singapore Pte Limited, a subsidiary of Xerox 1,760.67 1,760.67 Corporation, USA, the ultimate holding/ parent company 19,80,801 (March 31, 2016: 19,80,801) shares held by Xerox Developing Markets Limited, a subsidiary of Xerox 198.08 198.08 Corporation, USA, the ultimate holding/ parent company 48 ANNUAL REPORT 2017

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