AFFLUENCE

Business Performance Your Company operates three business units Digital Business Services (DBS), Infrastructure Management and Security Services (IMSS) and Product Engineering Services (PES). Your Company through these business units enables digital transformation for enterprises and technology providers by delivering seamless customer experience, business efficiency and actionable insights through an integrated set of disruptive technologies: big data analytics, AI & cognitive computing, Internet of Things, mobility, cloud, security, unified communications, SDN-NFV, RPA, blockchain, etc. Your Company offers domain-centric solutions applying skills, IPs and functional expertise in IT services, product engineering, infrastructure management and security. These services have applicability across industry sectors such as retail, consumer packaged goods, edutech, e-commerce, banking, insurance, hi-tech, engineering R&D, manufacturing, automotive and travel/transportation/hospitality. During the year your Company reported operating revenue of Rs. 59,558 Lacs signifying growth of 27%. Revenue increased due to better tractions from all the 3 BUs, improved utilization as well as weakening of INR against major currencies, especially USD. Your Company reported operating profit of Rs. 3,574 Lacs prior to exceptional items. During the year Company had impaired goodwill to the extent of Rs.761 Lacs and impairment of goodwill on consolidation of Rs.986 Lacs. Profit post exceptional items was Rs. 1,827 Lacs as against loss of Rs.1,976 Lacs during previous year. Increase in profit is result of revenue growth, improved utilization and steps taken by management for cost optimisation. People cost was 74% of total revenue during the year as against 84% during previous year. Split of operational revenues between the 3 BUs was DBS 31%, IMSS 22% and PES 47%. During the year under report, your Company added 47 (gross) new customers across geographies and serviced about 30 Fortune Global 2000 names. At the end of the year, your Company had 17 customers with more million-dollar revenue, of which 3 are above 5 million-dollar. In terms of geographical split of revenues, America at about 75% continues to be your Companys key market followed by UK/Europe at 9%, India at 13% and the Rest of the World at 3%. Recognition We are happy to inform that the Company has received following recognitions during the year under review: - Happiest Minds was recognized in the IAOP 2019 Best of Global Outsourcing 100 List - The Company was recognized as a Hot 50 Bengaluru Brand 2019 under the Customer Experience Champion category by Paul Writer - The Company won 2018 Red Herring Top 100 Global Award - The Company won Intel Solution Plus Partner Award 2018 - The Company won McAfee Partner Award (Best Regional Partner Commercial) - The Company was recognized as Best Identity and Access Management Solution provider of the year at CISO Summit 2018. - In The Economic Times and Great Place to Work® Institutes annual awards 2019, your Company was ranked No.4 amongst IT Services companies and 42 across all industries in the country.

A. Conservation of Energy Your Company is in a knowledge intensive industry, and does not operate industrial machinery, production facilities, or other such energy intensive operations. However, as a responsible corporate citizen, it continues to pursue and adopt appropriate energy conservation measures. Adequate measures have been taken to conserve energy by using energy efficient computers and equipment with latest technologies, which would help in conservation of energy. Some of the steps and practices followed by your Company are as below: Optimum usage of Air Conditioners throughout its premises by ensuring that there is no cool air leakage. Usage of LCD monitors (energy efficient) in place of normal CRT monitors Turning off monitors, when not in use. Turning off lights in all floors when employees are not working Turning off the air conditioners during non-peak hours and on weekends. Usage of treated water to recharge ground water. Installation of sun film to dissipate heat Usage of LED lights for all its lighting solution As the cost of energy consumed form a small portion of the total cost, the Company has not utilized alternate sources of energy and has not made any recognizable capital investment on energy conservation equipment.

C. Foreign Exchange Earnings and Outgo i. Activities relating to exports, initiatives taken to increase exports, development of new export market for services and export plans During the year under review, your Company has taken various initiatives to expand its presence into new geographies by engaging consultants and business partners and been successful in building visibility about our services and offering to key clients. Your Company is also continuing to invest in online media and social networking to build its brand visibility. ii. Foreign exchange used and earned (Amount in Rs. Lacs) March 31, 2019 March 31, 2018 Foreign exchange earnings 52,197 38,963 Foreign exchange outgo 18,155 12,214

B. Technology Absorption Technology Absorption, adaption and innovation Your Company continues to track trends and latest developments in various technology areas, including those related to mobility, big data analytics, security, cloud computing, IoT, unified communications. Your Company has taken major initiatives and upped its leadership in IoT and Analytics Space. It also actively participates in relevant standards bodies and forums. It has also deepened in partnership with Microsoft for the IoT Azure Implementations and build a large ecosystem of Device players to Support large IoT Projects. Your Company has also deep entered in Education and Software Defined Data Center (including SDN/NFV/SD-WAN) space, which helps increase the knowledge base within your Company, and enhances the ability of your Company to undertake larger and more complex projects which are of higher value. Your Company started to invest in emerging technologies like Robotic Process Automation, AI, Blockchain, Robotics & Augmented Reality. Your Company also undertakes continuous quality improvement programs, training programs, deployment and use of tools and technologies for monitoring projects, etc., to help increase efficiencies and productivity. Research and Development i) Specific Areas of Research and Development During the year under review, your Company focused on building technology in IoT, Mobility, SDN & NFV, Big Data & Analytics, Security and Cloud Technologies that will have a major impact on the global technology landscape with the objective of increasing the sales volumes and improving delivery capability. Your Company started developing capabilities and creating solutions in newer technologies like RPA, AI, Blockchain & Robotics. Your Company has developed IP & Solutions and new services through R&D investment and has built Compliance Vigil, Ellipse – Infrastructure Management, Digital Query Assistant/Chatbot, Digital Content Monetization, Script-less Test Automation solution and UniVu-University Insights Solution. ii) Benefits derived as a result of the above R&D Your Company has gained considerable mind share in the industry by venturing into IP led state of the art solutions as mentioned above. These concerted efforts also helped your Company in acquiring new customers in the focus geographies and increased the share of IP-led revenues for the Company. iii) Future Plan of action Your Company is continuing to leverage its efforts on SMAC+ technologies including increased efforts on IoT, Big Data and Analytics, SDN/NFV, Security and Customer Experience. Your Company has also decided to strategically add the new disruptive technologies of Robotics Process Automation (RPA), Artificial Intelligence (AI), Blockchain and Robotics iv) Expenditure on R&D R&D is carried on by the Company as a part of the ongoing software development activity and expenditure thereof is considered as part of operating expenditure. Total expenses on R&D during 2018-19 was Rs.0.14 Mn.

Happiest Minds Technologies Private Limited
(Company or Happiest Minds)

Directors Report

Dear Members,

Your Directors take pleasure in presenting the Eighth Annual Report on the business and operations of your Company together with the Audited Statement of Accounts and the Auditors Report for the financial year ended March 31, 2019.

Financial Performance
Amount inRs. Lacs

Note: Previous years figures have been regrouped / reclassified wherever necessary to correspond with the current years classification / disclosure. 

Business Performance

Your Company operates three business units Digital Business Services (DBS), Infrastructure Management and Security Services (IMSS) and Product Engineering Services (PES). Your Company through these business units enables digital transformation for enterprises and technology providers by delivering seamless customer experience, business efficiency and actionable insights through an integrated set of disruptive technologies: big data analytics, AI & cognitive computing, Internet of Things, mobility, cloud, security, unified communications, SDN-NFV, RPA, blockchain, etc. Your Company offers domain-centric solutions applying skills, IPs and functional expertise in IT services, product engineering, infrastructure management and security. These services have applicability across industry sectors such as retail, consumer packaged goods, edutech, e-commerce, banking, insurance, hi-tech, engineering R&D, manufacturing, automotive and travel/transportation/hospitality.


During the year your Company reported operating revenue of Rs. 59,558 Lacs signifying growth of 27%. Revenue increased due to better tractions from all the 3 BUs, improved utilization as well as weakening of INR against major currencies, especially USD. Your Company reported operating profit of Rs. 3,574 Lacs prior to exceptional items. During the year Company had impaired goodwill to the extent of Rs.761 Lacs and impairment of goodwill on consolidation of Rs.986 Lacs. Profit post exceptional items was Rs. 1,827 Lacs as against loss of Rs.1,976 Lacs during previous year. Increase in profit is result of revenue growth, improved utilization and steps taken by management for cost optimisation. People cost was 74% of total revenue during the year as against 84% during previous year.

Split of operational revenues between the 3 BUs was DBS 31%, IMSS 22% and PES 47%. During the year under report, your Company added 47 (gross) new customers across geographies and serviced about 30 Fortune Global 2000 names. At the end of the year, your Company had 17 customers with more million-dollar revenue, of which 3 are above 5 million-dollar. In terms of geographical split of revenues, America at about 75% continues to be your Companys key market followed by UK/Europe at 9%, India at 13% and the Rest of the World at 3%.

Recognition

We are happy to inform that the Company has received following recognitions during the year under review:
- Happiest Minds was recognized in the IAOP 2019 Best of Global Outsourcing 100 List?
- The Company was recognized as a Hot 50 Bengaluru Brand 2019 under the Customer Experience Champion category by Paul Writer
- The Company won 2018 Red Herring Top 100 Global Award
- The Company won Intel Solution Plus Partner Award 2018
- The Company won McAfee Partner Award (Best Regional Partner Commercial)
- The Company was recognized as Best Identity and Access Management Solution provider of the year at CISO Summit 2018.
- In The Economic Times and Great Place to Work® Institutes annual awards 2019, your Company was ranked No.4 amongst IT Services companies and 42 across all industries in the country. 

Events subsequent to the date of financial statements

As on the date of this Report, your Directors are not aware of any circumstances not otherwise dealt with in this Report or in the financial statements of your Company, which would render any amount stated in the Accounts of the Company misleading. 

In the opinion of the Directors, no item, transaction or event of a material and unusual nature has arisen in the interval between the end of the financial year and the date of this report, which would affect substantially the results, or the operations of your Company for the financial year in respect of which this report is made.



Dividend & Transfer to Reserves

Your Company does not propose to declare dividend for the year under review and accordingly do not propose to transfer any amount to General Reserves.

Changes in Capital Structure

The issued, subscribed and paid-up share capital of the Company increased by Rs.1,22,576/- consequent to issue of 188 14% Series A Non-Cumulative Compulsorily Convertible Preference Share of Rs. 652/- each to a subscriber.

At the Extra-Ordinary General Meeting held on April 16, 2019, pursuant to the provisions of Section 52 read with Section 66 and all other applicable provisions, if any, of the Companies Act, 2013, and subject to the sanction by the National Company Law Tribunal, Bengaluru Bench (Tribunal), shareholders have approved writing off the accumulated losses of the Company amounting to Rs.1,722,978,076/- (Rupees One Hundred Seventy-Two Crores Twenty-Nine Lakhs Seventy-Eight Thousand and Seventy-Six only), being the debit balance of the Profit & Loss Account as on March 31, 2018, against the Securities Premium by way of capital reduction. We are in the process of filing application with Tribunal for getting necessary approval.

Subsidiary company

The Company has only one wholly owned subsidiary company viz., Happiest Minds Technologies LLC, USA. The statement pursuant to Section 129(3) of the Companies Act, 2013 in respect of subsidiary company is attached as Annexure V. The Consolidated Accounts of your Company and its subsidiary company duly audited by the Statutory Auditors are presented as part of this Report in accordance with Accounting Standard 21.

The Ministry of Corporate Affairs vide General Circular No. 2/2011 dated 8th February, 2011 has provided an exemption to Companies subject to certain conditions from attaching the audited accounts of subsidiary company. Accordingly, the audited accounts of the above mentioned subsidiary company is not attached and your Company has complied with all the conditions of the aforesaid circular.

The audited accounts of overseas subsidiary have been made available for inspection by any shareholder at the Companys Registered office and at the registered office of overseas subsidiary company. Copies can be made available, on request to the shareholders of the holding and subsidiary company.

Directors and Key Managerial Personnel

Effective November 7, 2018, Intel Capital Corporation (one of the Investors of the Company), has designated Mr. Alok Bajoria to represent it as a non-voting observer at all meetings of the Board of Directors and Board Committees of the Company replacing Mr. Amit Behl.

Committees of the Board

Mr. Alok Bajoria was made member of Compensation Committee effective January 24, 2019 in place of Mr. Amit Bhel. The details of the powers, functions, composition and meetings of the Committees of the Board held during the year are given in the Report on Corporate Governance section forming part of this Annual Report (attached as Annexure IV).

Board Meetings

During the year, the Meetings of Board of Directors were held on April 25, 2018; June 4, 2018; August 7, 2018; October 29, 2018; and January 24, 2019. The details of the composition and meetings of the Board held during the year are given in the Report on Corporate Governance section forming part of this Annual Report.

Employees Stock Option Plan (ESOP)

During the year under review, your Company registered transfer of 17,36,281 Equity Shares of Rs. 2/- each by the Happiest Minds Technologies Share Ownership Plans Trust to the employees who exercised their options during the year under the ESOP Scheme(s) of the Company.

The additional details of stock options are provided in Note 3(f) of Notes to Financial Statements (Standalone). 

Extract of Annual Return

Pursuant to the provisions of the Section 92(3) of the Companies Act, 2013 read with Rule 12(1) of the Companies (Management and Administration) Rules, 2014, the extract of Annual return of the Company for the financial year ended on March 31, 2019 is enclosed as Annexure I to this report.

Software Technology Park

The entire Indian operations of the Company have been registered under the Software Technology Parks of India (STPI) Scheme.


Fixed Deposits

Your Company has not accepted any fixed deposits during the year under review and as such, no amount of principal or interest was outstanding on the date of Balance Sheet.

Loans, Guarantees and Investments

Your Company during the year under review:
- has not provided any loan, guarantee or security in connection with loan to any person or body corporate; or
- has not acquired by way of subscription, purchase or otherwise, the securities of any other body corporate;

exceeding sixty percent of its paid up share capital, free reserves and securities premium account or one hundred percent of free reserves or securities premium account, whichever is more.

Related Party Transactions

The details of related party transaction is provided in Note 30 of Notes to Financial Statements (Standalone) and Note 28 of Notes to Financial Statements (Consolidated). 

Auditors

The current auditors of the Company Messrs. S.R. Batliboi and Associates LLP, Chartered Accountants LLP will hold office as Statutory Auditors for the period upto the conclusion of tenth Annual General Meeting of the Company.
Corporate Social Responsibility (CSR)

The provisions of section 135 of Companies Act, 2013 is not applicable to your Company during year under review.

Nevertheless, your Company conducts business in a sustainable and socially responsible manner. This principle has been an integral part of your Companys corporate values for the last seven years. Your Company is committed to the safety and health of the employees, protecting the environment and the quality of life in all regions in which your Company operates. 

During the year under review, your Company and the Happiest Minds team made voluntary contributions such as donations of money through participation in Daan Utsav Program of over INR 5.5 lakhs and supported Akshaya Patra Foundation through contribution of 1.3 lakh Midday Meals to celebrate the 7th anniversary of the launch of your Company, thereby bringing the total meals donated to Akshayapatra Foundation to 10 lakh meals.  On the date of this report, your Company is further supporting Akshaya Patra Foundation through contribution of 4.3 lakh Midday Meals to celebrate few important smilestones achieved for FY 2018-19.

Further, your Company and the Happiest Minds team made voluntary contributions such as donations of money of over INR 9 lakhs towards the Kerala Chief Ministers Distress Relief Fund towards flood relief efforts.

Your Company also organized the second edition of Happiest Minds Run; the net proceeds of INR 1.5 lakhs was given to Jeevarathni, an organization working to improve the lives of economically and emotionally deprived children, specially abled children and the aged living in poverty and injustice.

Some of the Happiest Minds teams in your Company also contributed their team award monies to charity.

Risk Management

Your Company under the supervision of the Executive Board has established a well-defined framework and procedures on organization wide risk and its management.  The framework encompasses significant risk in areas of Information security, operations, delivery and key support functions.  Under the framework and procedures, detailed risk management guidelines have been prescribed and implemented covering Risk Identification, Analysis, Response, Tracking, and Management Discussion and Mitigation.  Risk registries are maintained by respective functions and project teams.  These are centrally reviewed and periodically monitored by compliance and governance teams identified as the owner for the particular area of risk.  The CISO, CIO and Engineering and Business Excellence Team (EBE) work together with the Executive Board in achieving the above. 

The Executive Board with the assistance of the CISO, CIO and EBE follow a process covering the steps below in identifying areas of risk in the Organization.  The process covers:

- Identification of key risk areas
- Assessment of key risks for probability and impact
- Prioritization
- Formulation of response
- Identification of Owners
- Participation by Owners in outlining mitigation plans
- Reporting on adequacy and effectiveness
- Acceptance of residual risk

The Companys risk appetite reflects broader level of risk that the Company can assume and successfully manage and is factored into its strategy at the time of drawing up the long term and the annual business plan.

Significant risks areas which have been identified and are constantly monitored are:

1. Financial Risks:
a. Foreign currency fluctuation;
b. Customer credit;
c. Profitability and sustenance of the business;
d. Availability of credit and liquidity management.

2. Business Risks:
a. Concentration of revenues;
b. New, emerging disruptive technologies and their impact on business, and delivery;
c. Shrinking product development cycles.
d. Customers insourcing.

3. Operational Risks:
a.Data privacy, social media
b. Talent availability and timely staffing of projects
c. Optimal resource utilization
d. Contractual commitments and project delivery challenges
e. Business continuity.

4. Legal and Regulatory:
a. Compliance with local legislation in the geographies we operate in
b. Dynamic and ever changing immigration and travel laws.

5. Projects Delivery related risk
a. Related to change meeting timelines, estimated effort
b. Quality of deliverables

6. Information Security Risks
a. Loss of Happiest Minds or Customer Artifacts, Digital Assets (Code, database etc.,) or IP
b. Sharing of PII data without requisite approvals

People Practices

Your Companys People Practice is a corporate team that function across all of its business units and centre of excellence. Your Company has implemented corporate-wide recruitment, up-skilling, training, performance evaluation, talent review, succession planning and compensation programs that are tailored to address the needs of each of its business units and locations.

During the year under review, your Company launched two key programs, HappiZest and Diversity and Inclusiveness Charter. HappiZest is a wellness framework that focuses on creating a healthy mind, healthy body, and healthy life through multiple wellness interventions & engagements. The Diversity and Inclusiveness Charter aims to build an inclusive workplace that values the individual and group differences within its workforce and encourages people from different background & perspective coming together in a company, enabling innovation, creativity & collaboration at workplace.

The People Practice continued to develop on their formal Mindfulness training programs under which 1025 Happiest Minds got covered under the mandated Mindfulness training program in the whole year. To assimilate the new hires in the culture of its Company, Happiest Minds, developed a comprehensive Joining day induction program and new hire assimilation program. Your Company also participated in the Great Place to Work (GPTW) survey as a formal mechanism to listen to employees feedback along with other internal survey like Happiest Minds Pulse and Dipstick Surveys etc. GPTW survey is also an important exercise to benchmark Companys people practices against industry best practices. As per the results of the GPTW survey, 90% Happiest Minds say your Company is a Great Place To Work and all 15 of people practices are in the Best Cultures Quadrant.

Your Companys relationship with its people and teams are based on mutual trust and respect and we continue to maintain the same spirit at all times. We continually strive to provide our people with competitive and innovative compensation packages. We work with the industry partners and consultants to benchmark our compensation and benefits programs with leading organizations in the industry.  Our compensation packages include a combination of fixed salary, variable pay, stock options, and health insurance.

Quality Management System (QMS)

Your Companys Quality Policy is Happiest Minds will consistently strive for customer happiness. We are committed to deliver excellence in our services by continually improving processes and systems, aiding in creating value to all our stake holders.

You Companys strategy for continual Quality Improvement journey is derived based on the business needs, technology changes, customer feedback, suggestions and process performance.

Your Companys Quality processes are derived from industry best practices as well as from its own experience, and our processes have been assessed by external accredited agencies. Happiest Minds has received accreditation on international Quality and process models, including ISO 9001:2015. In addition, your Company is certified to Information Security standards like ISO 27001:2013, which guides our policies and procedures for protecting our own software enablers, as well as clients software enablers.

Engineering Practices:
Your Companys engineering practices form the crux of successful delivery. At Happiest Minds we emphasize on rolling out engineering best practices to provide value add to our clients. Our engineering practices help Happiest Minds deliver high-quality software to our clients, and consistently earn their trust. We measure the customer satisfaction levels of our clients every year and have seen a significant improvement in the scores, year on year since inception.  Industry Proven best practices like Static code Analysis are adopted which helps us to ensure the overall code quality is maintained, fix bugs in the early stage of development, and ensure that programming errors, coding standard violations, security weaknesses are identified early in the life cycle.

Delivery Methodologies:
Your Companys suite of delivery methodologies in the below mentioned areas demonstrates its thought leadership and execution capabilities:
- Embedded system software
- Service delivery lifecycle
- Waterfall model for Software development
- Agile methodologies

Integrated Project Management System:
Our Integrated Project Management system helps the delivery to have an end to end view of the project at all levels of the management to provide enhanced delivery value to our customers.


Internal Control System

Your Company has deployed adequate Internal Control Systems in place to ensure a smooth functioning of its business. The processes and the systems are reviewed constantly and changed to address the changing regulatory and business environment. The Control Systems provide a reasonable assurance of recording the transactions of its operations in all material aspects and of providing protection against misuse or loss of Companys assets. The ERP system which the Company had implemented has helped in further strengthening the internal control systems that are in place.

The existing internal control systems and their adequacy are frequently reviewed and improved upon to meet the changing business environment. The statutory auditors as well as the internal auditors periodically review the internal control systems, policies and procedures for their adequacy, effectiveness and continuous operation for addressing risk management and mitigation strategies.

Conservation of Energy, Research and Development, Foreign Exchange Earnings and Outgo


Your Company has made the necessary disclosures in Annexure II to this Report in terms of Section 134(3) of the Companies Act, 2013 (earlier Section 217(1)(e) of the Companies Act, 1956), read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988.

Employees remuneration

In terms of the provisions of Section 134 of the Companies Act, 2013, read with the relevant rules, the names and other particulars of the employees are set out in the Annexure III to the Directors Report. As per the proviso to Rule 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the particulars of employees posted and working outside India not being directors or their relatives, drawing more than Rs.10.2 million per financial year or Rs 0.85 million per month, as the case may be, need not be included in the statement but, such particulars shall be furnished to the Registrar of Companies, if and when sought for. Accordingly, the statement included in this report does not contain the particulars of employees who are posted and working outside India. If any Member is interested in obtaining a copy thereof, such Member may write to the Company in this regard.

Directors Responsibility Statement

Pursuant to the requirement under Section 134 (5) of the Companies Act, 2013, with respect to Directors Responsibility Statement, it is hereby confirmed that:

(i) In the preparation of the Annual Accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;
(ii) Accounting policies have been selected and applied them consistently and made judgments and estimates made are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year 2018-2019 and of the profit or loss of the Company for that financial year;
(iii) Proper and sufficient care have been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
(iv) The Annual Accounts have been prepared on a going concern basis.
Proper systems have been devised to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating efficiently.

Your Directors, have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively.

Secretarial Standards

During the year under review, your Company has duly complied with Secretarial Standard 1 dealing with Meetings of the Board of Directors & Secretarial Standard 2 dealing with General Meetings, as notified by Central Government.

Cost Audit

The provisions of Companies (Cost Records and Audit) Rules, 2014 are not applicable to your Company.

Acknowledgements

Your Directors have pleasure in recording their appreciation for all the guidance and co-operation received from all its customers, investors, vendors and bankers in their continued support of your Company's growth. Your Directors take this opportunity to place on record their sincere appreciation of the dedication and commitment of Happiest Minds at all levels and their continued support and cooperation.

For and on behalf of the Board
  

  

Bangalore
Dated: July 1, 2019

Shareholding Pattern (Equity + Preference shares on diluted basis) of the Company as on March 31, 2019

For and on behalf of the Board

  

Bangalore
Dated: July 1, 2019

Annexure II to Directors' Report

A. Conservation of Energy

Your Company is in a knowledge intensive industry, and does not operate industrial machinery, production facilities, or other such energy intensive operations. However, as a responsible corporate citizen, it continues to pursue and adopt appropriate energy conservation measures.

Adequate measures have been taken to conserve energy by using energy efficient computers and equipment with latest technologies, which would help in conservation of energy. Some of the steps and practices followed by your Company are as below:

- Optimum usage of Air Conditioners throughout its premises by ensuring that there is no cool air leakage.
- Usage of LCD monitors (energy efficient) in place of normal CRT monitors
- Turning off monitors, when not in use.
- Turning off lights in all floors when employees are not working
- Turning off the air conditioners during non-peak hours and on weekends.
- Usage of treated water to recharge ground water.
- Installation of sun film to dissipate heat
- Usage of LED lights for all its lighting solution

As the cost of energy consumed form a small portion of the total cost, the Company has not utilized alternate sources of energy and has not made any recognizable capital investment on energy conservation equipment.

B. Technology Absorption

Technology Absorption, adaption and innovation

Your Company continues to track trends and latest developments in various technology areas, including those related to mobility, big data analytics, security, cloud computing, IoT, unified communications. Your Company has taken major initiatives and upped its leadership in IoT and Analytics Space. It also actively participates in relevant standards bodies and forums. It has also deepened in partnership with Microsoft for the IoT Azure Implementations and build a large ecosystem of Device players to Support large IoT Projects. Your Company has also deep entered in Education and Software Defined Data Center (including SDN/NFV/SD-WAN) space, which helps increase the knowledge base within your Company, and enhances the ability of your Company to undertake larger and more complex projects which are of higher value. Your Company started to invest in emerging technologies like Robotic Process Automation, AI, Blockchain, Robotics & Augmented Reality. Your Company also undertakes continuous quality improvement programs, training programs, deployment and use of tools and technologies for monitoring projects, etc., to help increase efficiencies and productivity.

Research and Development
i)     Specific Areas of Research and Development

During the year under review, your Company focused on building technology in IoT, Mobility, SDN & NFV, Big Data & Analytics, Security and Cloud Technologies that will have a major impact on the global technology landscape with the objective of increasing the sales volumes and improving delivery capability. Your Company started developing capabilities and creating solutions in newer technologies like RPA, AI, Blockchain & Robotics. Your Company has developed IP & Solutions and new services through R&D investment and has built Compliance Vigil, Ellipse Infrastructure Management, Digital Query Assistant/Chatbot, Digital Content Monetization, Script-less Test Automation  solution and UniVu-University Insights Solution.

ii)   Benefits derived as a result of the above R&D
Your Company has gained considerable mind share in the industry by venturing into IP led state of the art solutions as mentioned above. These concerted efforts also helped your Company in acquiring new customers in the focus geographies and increased the share of IP-led revenues for the Company.

iii) Future Plan of action
Your Company is continuing to leverage its efforts on SMAC+ technologies including increased efforts on IoT, Big Data and Analytics, SDN/NFV, Security and Customer Experience. Your Company has also decided to strategically add the new disruptive technologies of Robotics Process Automation (RPA), Artificial Intelligence (AI), Blockchain and Robotics

iv)  Expenditure on R&D 
R&D is carried on by the Company as a part of the ongoing software development activity and expenditure thereof is considered as part of operating expenditure.  Total expenses on R&D during 2018-19 was Rs.0.14 Mn.

Foreign Exchange Earnings and Outgo

i. Activities relating to exports, initiatives taken to increase exports, development of new export market for services and export plans
During the year under review, your Company has taken various initiatives to expand its presence into new geographies by engaging consultants and business partners and been successful in building visibility about our services and offering to key clients. Your Company is also continuing to invest in online media and social networking to build its brand visibility.

ii. Foreign exchange used and earned
                                          Amount inRs. Lacs

For and on behalf of the Board



  

Bangalore
Dated: July 1, 2019


      

Annexure III to Directors Report

Particulars of employees pursuant to Section 134 of the Companies Act, 2013 read with Companies (Appointment and Remuneration of Managerial Personnel), 2014 and forming part of the Directors Report for the year ended March 31, 2019.

For and on behalf of the Board



  

Bangalore
Dated: July 1, 2019

Annexure IV to Directors Report

Report on Corporate Governance

The guidelines issued on Corporate Governance under Clause 49 of the Listing Agreement do not apply to Happiest Minds at this time, since we are a privately held Company. However, as a matter of good corporate practice, we present this report on the matters covered by the said guidelines applicable to us.

I. Brief Statement on Companys Philosophy on Code of Corporate Governance

Happiest Minds is committed to good Corporate Governance and continuously strives to enhance the shareholder value without compromising on compliance of laws and regulations.  We study and adopt best practices in the area even where they are not statutorily required.  We are committed to observing the laws of the land in every country in which we operate.

II. Board of Directors

The Board of Directors of Happiest Minds as on March 31, 2019 comprised of 4 Directors, who are professionals in their respective areas of specialization and have held eminent positions. None of the Directors are related to each other.

The composition and category of Directors on the Board of the Company as on March 31, 2019 are:

The guidelines require that at least one of the four Directors be independent where the Chairman is an Executive Chairman. At this time, since there are no external minority shareholders, we feel that the above structure protects the interest of the shareholders. 

During the year under review, Mr. Amit Behl/Mr.Alok Bajoria, representing the interest of the Intel Capital Corporation, have been acting as an observer at Board Meetings of the Company. During the financial year 2018-19, five (5) meetings of the Board were held with a time gap of not more than 120 days between any two meetings. The Board Meetings are prescheduled and adequate notice is given to the member. Board Meetings are generally held at the registered office of the Company.


The Board held its meetings on April 25, 2018; June 4, 2018; August 7, 2018; October 29, 2018; and January 24, 2019.
Attendance of Directors at Board and Annual General Meeting held during the year 2018-19: