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Directors Report of Intellect Design Arena Ltd.

Mar 31, 2023

We are pleased to present the 12th Annual Report on our business and operations for the year ended March 31, 2023 of Intellect Design Arena Limited ("the Company”). This is our ninth year of business operations.

1. Results of operations (In Rs. Million, except EPS data)

Description

Standalone

Consolidated

Year ended March 31

2023

2022

2023

2022

Revenue from operations (including other income)

15,145

12,914

22,826

19,187

Operating expenses (excluding, depreciation and finance cost)

12,299

9,550

17,961

14,061

Profit before interest, depreciation and tax

2,846

3,364

4,865

5,126

Finance cost

22

30

32

43

Depreciation and amortisation

801

690

1,215

976

Profit before share of profit from associate and tax

2.023

2,644

3,618

4,107

Add: Share of profit on associate companies (net of tax)

-

-

15

25

Profit before tax

2,023

2,644

3,633

4,132

Income tax expenses

683

623

947

628

Profit after tax

1,340

2,021

2,686

3,504

Remeasurement (losses)/gains on defined benefit plans

(102)

16

(101)

16

Exchange differences on translation of foreign operations

-

-

257

(5)

Net movement on cash flow hedges

(488)

155

(487)

155

Other comprehensive (loss)/income for the year, net of tax

(590)

171

(330)

166

Total comprehensive income for the year, net of tax

1,190

2,192

2,355

3,671

Less: Non-controlling interest

-

-

(14)

17

Total comprehensive income for the year (attributable to owners of the Company)

750

2,192

2,359

3,654

EPS

Basic Rs.

9.98

15.19

19.90

26.25

Diluted Rs.

9.64

14.55

19.23

25.14

Function wise classification of statement of consolidated Profit and Loss

In Rs. Million

PARTICULARS

Year Ended

March 31, 2023

March 31, 2022

INCOME

Income from software product license and related services

22,460

18,565

Total income

22,460

18,565

EXPENDITURE

Software development expenses

10,180

7,976

Gross margin

12,280

10,589

Gross margin %

55%

57%

Selling and marketing, general and administrative expenses

6,054

4,898

Research and engineering expenses

1,724

1,187

Total expenditure

17,958

14,061

EBITDA

4,502

4,504

Depreciation and amortisation

(1,215)

(976)

Hedge impact

(147)

217

Fx reinstatement gain/ (loss)

129

(32)

Other income

384

342

Profit before tax

3,621

4,055

Tax expenses

(947)

(628)

Profit after tax

(attributable to owners of the Company)

2,673

3,491

Table No. 1.2

2. State of Company''s affairs

The consolidated revenue from operations (including other income) for the year ended March 31, 2023 stood at Rs. 22,826 million, registering a growth of 19%, over the previous year''s revenue of Rs. 19,187 million. The consolidated profit after tax for the year ended March 31, 2023 and 2022 stood at Rs. 2,686 million and Rs. 3,504 million, respectively. The consolidated reserves and surplus as of March 31, 2023 stood at Rs. 19,898 million as against Rs.17,414 million as of March 31, 2022. For FY 23, the Company has not transferred any amount to the reserves.

3. Material Changes and Commitments

There were no material changes and commitments from the end of the financial year till the date of this report.

4. Dividend

The Board at its meeting held on May 11, 2023 has proposed a final dividend of Rs. 2.50 per share at face value of Rs. 5 for the financial year ended March 31, 2023, subject to the approval of shareholders at the ensuing Annual General Meeting and if approved would result in the cash flow of Rs. 339 million.

The Dividend Distribution Policy, in terms of Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations") is uploaded on the Company''s website.

The weblink of the Dividend Distribution Policy is

https://www.intellectdesign.com/investor/general/2018-apr-dividend-

distribution-policy.pdf.

5. Subsidiary and Associate Companies

Details of Subsidiary Companies, Associate Companies, and their financial position.

Your Company has 22 (12 direct and 10 step down) subsidiary companies and 2 associate companies as on March 31, 2023. The information as required under the first provision to sub-section (3) of Section 129 is given in Form AOC-1 in Annexure 1.

6. Cash Position

Your Company has a cash position of Rs. 5,477 million.

7. Share Capital

The paid-up capital of the Company increased to Rs. 67,86,12,875 through share allotments made against exercise of Options (11,68,961 equity shares) under the ASOP / ISOP / IIPS Schemes, and comprises 13,57,22,575 equity shares at a face value of Rs. 5 each as on March 31, 2023.

The details of all the stock option plans, including terms of reference, and the requirements are set out in Annexure 2.

8. Corporate Governance

Your Company has been complying with the provisions of Corporate Governance as stipulated in SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (referred as "Listing Regulations"). A separate report on Corporate Governance, along with the Certificate on Compliance of the Corporate Governance norms as stipulated under Chapter IV of the Listing Regulations is provided elsewhere in this Annual Report. The Management''s Discussion & Analysis Report forming part of this report, is provided elsewhere in this Annual Report.

9. Transfer to Investor Education and Protection Fund

As required under the provisions of Section 125 and other applicable provisions of Companies Act, 2013 (hereinafter "the Act"), dividend that remains unpaid/ unclaimed for a period of seven years, are to be transferred to the account administered by the Central Government viz: Investor Education and Protection Fund ("IEPF").

According to Section 124 of Companies Act, 2013 the Company has transferred unpaid or unclaimed dividend amount within 7 days after expiry of thirty days to the account opened by the Company on that behalf in the bank called the Unpaid Dividend Account. Further pursuant to sub-section (5) of section 124 if the amount has not been paid or claimed for seven consecutive years or more shall be transferred by the company to the Investor Education and Protection Fund (IEPF).

10. Conservation of energy, technology absorption, foreign exchange earnings and outgo

The particulars as prescribed under Section 134 (3) (m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014, are set out in Annexure 3 of this Report.

11. Particulars of employees

(a) The statement containing particulars of employees as required under Section 197 (12) of the Companies Act, 2013 read with Rule 5 (2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 does not form part of this report. In terms of Section 136 of the Act, the same is open for inspection during working hours at the registered office of your company. A copy of this statement may be obtained by the members by writing to the Company Secretary.

(b) The ratio of remuneration of each director to the median remuneration of the employees of the Company and other details in terms of Section 197 (12) of the Companies Act, 2013 read with Rule 5 (1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are part of this report as Annexure 4.

12. Business Responsibility and Sustainability Report

In accordance with Regulation 34(2)(f) of the Listing Regulations, Business Responsibility and Sustainability Report ("BRSR") covering disclosures in the prescribed format for FY 2022-23 forming part of this report, is provided elsewhere in the Annual Report.

13. Directors'' Responsibility Statement as required under Section 134 (5) of the Companies Act, 2013

Pursuant to the provisions of Section 134 (3) (c) of the Companies Act, 2013 the Directors of your Company confirm that:

a) in the preparation of the annual accounts, the applicable accounting standards have been followed and there are no material departures;

b) they have selected such accounting policies, applied them consistently, and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period;

c) they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act, for safeguarding the assets of the Company, and for preventing and detecting fraud and other irregularities;

d) they have prepared the annual accounts on a going concern basis;

e) they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and

f) they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

14. Board Meetings, Board of Directors, Key Managerial Personnel & Committees of Directors

(a) Board Meetings:

The Board of Directors of the Company met 5 times during the year 202223. The details of various Board Meetings are provided in the Corporate Governance Report. The gap intervening between two meetings of the board is as prescribed in the Act.

(b) Re-Appointment

Mrs. Vijaya Sampath (DIN:00641110) was appointed as an Independent Woman Director at the 8th Annual General Meeting with effect from October 25, 2018 to hold office for first term for a period of 5 (five) years upto the conclusion of 12th Annual General meeting of the Company to be held in the calendar year 2023 and whose term of office is liable to expire on October 24, 2023.

Based on the recommendation of the Nomination, Remuneration and Compensation Committee and subject to the approval of shareholders, wherever applicable, the Board of Directors has at its meeting held on May 11, 2023 approved the re-appointment of Mrs. Vijaya Sampath (DIN: 00641110) as an Independent Woman Director for a period of 5 years with effect from October 25, 2023 to October 24, 2028. Brief Profile of Mrs. Vijaya Sampath form part of the Notice convening the 12th Annual General Meeting of the Company.

(c) Director liable to retire by rotation

In terms of Section 152 (6) of the Companies Act, 2013 and as per Article 34 (l) of the Articles of Association of the Company, one third of the Directors other than Independent Directors are liable to retire by rotation at the Annual General Meeting of the Company. Mr. Anil Kumar Verma Whole Time Director, is liable to retire by rotation and offers himself for reappointment.

(d) Independent Directors

Mr. Arun Shekhar Aran (DIN: 00015335) was appointed as an Independent Director for a term of three (3) years on May 3, 2016 and re-appointed at the 8th AGM held on August 21, 2019 for a second term of Five (5) years upto May 1, 2024.

Mrs. Vijaya Sampath (DIN: 00641110) was appointed as an Independent Director w.e.f. October 25, 2018 for the first term of 5 years and was regularised at the AGM held on August 21, 2019.

Mr. Abhay Anant Gupte (DIN: 00389288) was appointed as an Independent Director w.e.f. June 15, 2020 for the first term of 5 years and was regularised at the AGM held on August 21, 2020.

Mr. Ambrish Pandey Jain (DIN: 07068438) was appointed as an Additional Independent Director w.e.f May 05, 2022 and was regularised at the AGM held on July 29, 2022 to hold office for a term consisting of 5 years until May 4, 2027.

No Directors resigned during the financial year 2022-2023.

The Company has received necessary declarations from each Independent Director of the Company under Section 149 (7) of the Companies Act, 2013, that they meet the criteria of independence as laid down in Section 149 (6) of the Act and in accordance with Regulation 25(8) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. Further, no Independent Director is a non-independent Director of another company on the Board on which any non-independent Director of the listed entity is an Independent Director and no Director has been debarred by any order / judgement of any regulator in force.

(e) Details of remuneration to Directors: The information relating to remuneration of directors as required under Section 197(12) of the Companies Act, 2013, is given elsewhere in the report.

(f) Board Committees

The Company has the following Board Committees:

1. Audit Committee

2. Nomination, Remuneration & Compensation Committee

3. Stakeholders'' Relationship Committee

4. Corporate Social Responsibility Committee

5. Risk Management Committee Sub-committees:

1. Share Transfer Committee

2. Cyber Security Committee

The composition of each of the above Committees, their respective role and responsibility is as detailed in the Report of Corporate Governance.

The policy framed by the Nomination, Remuneration and Compensation Committee under the provisions of Section 178(4) of the Act, is as below:

(g) Remuneration policy The remuneration policy of the Company has been so structured as to match the market trends of the IT industry. The Board, in consultation with the Nomination and Remuneration & Compensation Committee, decides the remuneration policy for Directors. The Company has made adequate disclosures to the members on the remuneration paid to the Directors from time to time. Remuneration / Commission payable to Directors is determined by the contributions made by the respective Directors for the growth of the Company.

The remuneration policy of the Company and other matters as required under Section 178 (3) of the Act can be accessed through https://www.intellectdesign.com/investor/general/remuneration-policy.pdf. There has been no change in the policy since the last fiscal year. We affirm that the remuneration paid to the Directors are as per the terms laid out in the remuneration policy of the Company.

(h) Board Evaluation

As required under the provisions of Section 134 (3) (p) of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board has carried out an annual performance evaluation of its own performance and that of its committees and individual directors. The manner in which such performance evaluation was carried out is as under:

The performance evaluation framework is in place. Dr. Ashok Korwar, a renowned management consultant, has had technical education at IIT Bombay, completing a B.Tech Degree. Subsequently, he also studied management at Indian Institute of Management, Ahmedabad and completed Ph.D at UCLA Anderson School of Management. He specialises in strategic thinking, go to market strategies and executing coaching. He has created and developed workshops on account management, finance for project managers and Design Thinking. He was appointed to evaluate the performance of the Directors and made a presentation to the Board summarising the views and suggestions made by the individual Directors and the Board. The performance of the Board was evaluated on the basis of

criteria such as the Board composition and structure, effectiveness of Board processes, information and functioning, etc.

The performance of the committees was evaluated by the Board after seeking inputs from the committee members on the basis of criteria such as the composition of committees, effectiveness of committee meetings, etc. The Board and the Nomination, Remuneration and Compensation Committee reviewed the performance of Individual Directors on the basis of criteria such as exercise of responsibilities in a bonafide manner in the interest of the Company, striving to attend meetings of the Board of Directors / Committees of which he/she is a member / general meetings, participating constructively and actively in the meetings of the Board/committees of the Board, etc.

In a separate meeting of independent directors held on March 22, 2023, performance of Non-Independent Directors, performance of the Chairman of the Company and the performance of the Board as a whole were evaluated.

(i) Vigil Mechanism

The Company has established a whistle-blower policy and also a mechanism for Directors and employees to report their concerns. The details of the same is explained in the Corporate Governance Report.

(j) Related Party Transactions

All related party transactions that were entered during the financial year were on arm''s length basis and were in the ordinary course of business. There are no other materially significant related party transactions made by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of the Company at large.

The details of the related party transactions as required under Section 134 (3) (h) read with Rule 8 of the Companies (Accounts) Rules, 2014 is given in Form AOC-2 in Annexure 5.

15. Auditor reports and auditors

Statutory Auditors: M/s. S.R. Batliboi & Associates LLP, Chennai, Chartered Accountants have been appointed at the Annual General Meeting held on August 21, 2019 to hold office as statutory auditors until the conclusion of the 13th Annual General Meeting of the Company. There are no qualifications or adverse remarks in the Auditor''s Report for the financial year ended March 31, 2023.

Secretarial Auditors: Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, Secretarial Audit has been carried out by M/s B Ravi & Associates, Company Secretaries, and their report is annexed as Annexure 6.

In connection with the observations made in Annexure 6, though not in the nature of qualifications, the management herewith provides the following clarifications to avoid any ambiguity:

(i) The Company has complied with Regulation 3(5) & 3(6) of SEBI (Prohibition of Insider Trading) Regulations, 2015 as on 31.03.2023 which was also affirmed by the Secretarial Auditor in his Secretarial Compliance Report for the year ended 31.03.2023.

(ii) There was a minor delay by a few hours in intimating to the stock exchanges regarding the grant of Options / RSU''s to the employees under the schemes in force.

Internal Auditors: Pursuant to Section 138 of the Companies Act, 2013, M/s. ANB & Co. was re-appointed as the Internal Auditors of the Company for a period of 6 months with effect from April 01, 2022 and was subsequently re-appointed for another period of 6 months with effect from October 01, 2022 and whose term of office had expired on March 31, 2023. Reports of the Internal Auditors'' has been reviewed and taken on record by the Audit Committee of the Board of Directors of the Company.

Pursuant to the provisions of Section 138 of the Companies Act 2013 read with Rule 13 of the Companies (Accounts) Rules, 2014 and other applicable provisions, the Board has appointed M/s. Sharp & Tannan, Chartered Accountants having FRN-109983W as Internal Auditors of the Company for a period of 2 (Two) Years with effect from April 01, 2023.

Cost Records and Cost Audit: Maintenance of cost records and requirements of cost audit as prescribed under Section 148(1) of the Companies Act, 2013 are not applicable for the business activities carried out by the Company.

16. Deposits

The Company has not accepted any deposits during the financial year and as such, no amount of principal or interest was outstanding as on March 31, 2023.

17. Reporting of fraud:

During the year under review, there were no instances of fraud as required to be reported by the Statutory Auditors / Secretarial auditors of the Company.

18. Social Connect Ullas Trust

Is the collective social responsibility of Intellect that brings together our associates with the adolescent young minds in the communities we live and work in, and even going to back our roots in the districts, to experience the magic of mentoring young minds! Magic as one experiences the joy of shaping young minds, but also the reverse learning that one receives from these bright sparks that inspires every mentor to do more and be more. Since its inception in 1997, Ullas has grown into a thriving community of dedicated associate volunteer mentors from Intellect, from our Clients, and other Corporates; partners from Civil Society Organisations, and youth from Colleges - all united by the common purpose of shaping the thinking of adolescent young minds. Over the 25 years, Ullas has sown the seed of a dream, ignited and nurtured over 18 lakh young minds across 115 Districts, in 8 States and 2 Union Territories.

Primary motive of the Trust continues to be - to ignite young minds and nurture them during their most vulnerable space in life (adolescence). This is accomplished through seeding the "Can Do" spirit, encouraging them to dream big with conviction, positive role model influences, and enrichment programs delivered by mentors to nurture them towards achieving their potential and their dreams.

Academic Year 2022-23 also marked the coming back of Ullas from 2 years of virtual engagements to in person mode of engagements successfully. It was with renewed energy and vigour that Ullas along with its selfless volunteers and mentors reached out to Young Achievers, Young Leaders and the schools and delivered the interventions under Summit, Touch the Soil and Higher Education Scholarship Program in alignment with the purpose of "igniting young minds", and sowing the seeds of "Can Do" spirit in every intervention.

Highlights of this Academic Year:

• Silver Jubilee Year of Ullas - Ullas Trust celebrated its silver jubilee by recognising young achievers and inspiring them to pursue their dreams, during their annual "Can Do" workshop held in Music Academy, Chennai. Dr J Radhakrishnan (IAS, Principal Secretary to Government of Tamil Nadu) and Kalaimamani V K T Balan (Chairman, Madura Travel Service Pvt Ltd) were the Guests of Honour at the event. The workshop was followed with similar workshops at Delhi, Mumbai and Hyderabad. These workshops recognized 2169 students from Corporation, Government and Government-Aided Schools by awarding merit scholarships.

• From Teenager to Achiever: Book authored by Mr. Arun Jain -Commemorating the 25th year since inception, Founder Arun Jain released a book ''From Teenager to Achiever'', that he has authored. The book has been specially written to unleash the potential of teenagers and has been designed as a unique self-improvement book. From Teenager to Achiever is a culmination of the experience of working with

high school students for 25 years through the Ullas Trust and his own experiences as a teenager.

• Summit Enrichment Program: Ullas continued to nurture the dreams of 3,130 students from 354 schools across 5 States (Delhi NCR, Haryana, Maharashtra, Tamil Nadu and Telangana) through the Summit interventions. These interventions brought cheer all around - from the volunteer mentors to the Young Achievers and Young Leaders -everyone coming alive as they met each other after a gap of 2 years. It was a joy to witness the essence and ethos of Ullas continue to flourish creating the intended impact.

• Touch The Soil - reconnecting to our roots: With greater resolve Team Ullas took Ullas interventions to students in the classrooms of district schools. The enthusiasm of reaching out to children in district schools after pandemic could be easily seen on the faces of volunteers. Ullas delivered "Can Do" and "Planning" workshops to 1,54,082 students from 1,025 Schools, 106 Districts across 5 States.

• Mission Samriddhi Clusters: Across the Mission Samriddhi Clusters spread across 13 districts and 3 states - UP (1 district), Maharashtra (3 districts) and Tamil Nadu(9 districts) Ullas coordinators ensured vibrant, inspiring interactions with young minds to Dream Big, with deep conviction. With the support of teachers and role models from the community, the intervention programs were powerful in driving home the "Can Do" spirit.

• Ullas Young Leaders Program: The Higher Education Scholarship saw fresh intake of 75 scholars across Chennai, Delhi and Hyderabad. SIDDHOPAMA the first in person interaction with the scholars. HES Scholars were engaged in all the key activities in Ullas from Can do Workshop to Summit Classes leading to their skill development. Career Guidance program and Talks at Ullas were conducted to to further ones professional standing.

• Ullas - a community of Engaged Givers: "The greatness of a community is most accurately measured by the compassionate actions of its members - Coretta Scott King". Especially during the most uncertain and perilous times. These words reflect what the Ullas community is all about - a community made up of our incredible volunteer mentors -Friends of Ullas as they are known, our awesome Alumni from across the globe, our very own inspiring Young Leaders who came together to collectively lift the spirits of young minds through the various programs. Be it a 2 hour Summit intervention or a 1-1 mentoring program, our Ullas community was not just empathetic but "compassion in action"! We could not have done this without this ONE team!

Yet another extraordinary year where the "purity of purpose" of Ullas continued to shine bright!

Mission Samriddhi

Mission Samriddhi was founded in 2016, which gave your Company a platform to explore the agenda of holistic rural development and expand our Social canvas. We are proud to be associated with a multitude of initiatives in promoting Education, Health, Economic upliftment and Self Governance in the rural domain.

Mission Samriddhi is a social impact platform dedicated to strengthening communities and institutions to achieve holistic, collective and sustainable rural development. Mission Samriddhi addresses the complex challenges to development by following a holistic and integrated approach and applying design thinking and empower the rural and marginalised communities to become the agents of their own development and dream the change by enhancing their self-worth.

Key initiatives in financial year 2022-2023 are:

Holistic Collective Farming (HOCO)

HOCO is an initiative of Mission Samriddhi, integrating the principles of natural farming with the strengths and values of collective farming. The initiative is currently being implemented at Shiratoki, a small tribal hamlet in the Yavatmal district, where 40 households have pooled 125 acres of their land to practice collective farming. Technical inputs on aspects of crop

planning, water management and harvesting and natural farming practices are provided by a team of subject experts to the farmers. The overall plan has facilitated the establishment of water structures to harvest an estimated 200 crore litres of water through farm ponds, compartment bunding and CCTs.

• Mobile Therapy Project: Community Based Rehabilitation

The Mobile Therapy Project (MTP) of Sristi Foundation, supported by the CSR initiatives of your Company, emerged as a response to a comprehensive survey conducted in 47 gram panchayats in Mailam Block of Villupuram District in Tamil Nadu. The study screened 2,229 youngsters and identified 155 children in 88 villages who were in need of therapy. Of these, 127 children were selected as beneficiaries under the MTP pilot project. Under this project, a Mobile Therapy Unit would travel to the homes of children with disability and provide them with physiotherapy, occupational therapy, speech therapy, special education, parental counselling and support in accessing government schemes

Currently 86 children are actively benefiting from the project and of these, 48 children receive physiotherapy support and 59 children receive special education. By the end of the pilot project in August 2022, 1117 physiotherapy, special education & speech therapy services had been provided to these children, and 138 community awareness programs on disability and inclusion had been conducted to reach the communities of 88 villages.

Specifically in the financial year 2022-23, 380 special services

(Physiotherapy, Speech education and Speech therapy services) were provided to these children and 69 awareness programs for mothers needing ante-natal care were carried out. Additionally, 18 medical referral services were provided and 1356 beneficiaries were reached through Disability camps to provide disability certificates, UDID cards and other benefits.

• TN-CDP (Tamil Nadu-Cluster Development Programme)

The Cluster Development Programme in Tamil Nadu (TN-CDP), supported by the CSR initiatives of your Company, is being implemented in 46 Gram Panchayats spread over 8 Blocks and 8 Districts of Tamil Nadu, TNCDP addresses the holistic development needs of 75,609 Households and 2.25 lac population

An OORKUDI App has been developed for the field staff to complete primary socio-economic data collection of all the households in these 46 Panchayats. The Elected Representatives of the 46 GPs have undergone a Design Thinking driven leadership development program to help them chart out and implement their plans for the holistic and sustainable development of their communities. In fact, all the 46 Panchayats have passed resolutions in their respective Gram Sabha meetings that they will collaborate with Mission Samriddhi as their holistic development partner.

The flagship Ullas Trust program interventions that include the SUMMIT Classes as well as the Touch the Soil Workshops have been successfully implemented covering 1338 children. 51 students from these clusters also received scholarships. A novel economic empowerment initiative to enhance the livelihoods of marginal farmers in Namakkal CDP cluster through the cultivation and sale of mushrooms is under progress.

19. Audit Committee Recommendation

During the year, all the recommendations of the Audit Committee were accepted by the Board. The Composition of the Audit Committee is as described in the Corporate Governance Report.

20. Annual Return

Pursuant to Section 92 (3) read with Section 134 (3) (a) of the Companies Act, 2013, the Annual Return in Form MGT 7 shall be placed on the website of the company at www.intellectdesign.com/investor-relations after the conclusion of the 12th Annual General Meeting.

21. Significant & Material Orders passed by the Regulators or Courts

During the financial year 2022-23, no order has been passed by any Regulatory authorities or Courts.

22. Particulars of Loans, Guarantees and Investments u/s 186

During the financial year, there was no loan given or guarantee given or security provided pursuant to Section 186 of the Companies Act, 2013 and the relevant provisions as applicable have been compiled by the Company. Details of investments made by the Company are given in the Notes to the Financial Statements

23. Risk Management Policy

Intellect being a pioneer in the Intellectual property led Business in India, the company is continuously focussing and committing itself to have a Risk Management system suited for the Products business.

Towards this, the Board has formed a Risk Management Committee with Directors, the Chief Financial Officer and the Chief Risk Officer as members of the committee. The Committee works to mitigate any inherent risks faced by the Business and to meet the increasing demand of Customer''s liability through different means within the overall framework listed below.

Risk Management Framework Objective

The Organisation is subject to certain risks that may affect our ability to operate, may disrupt our business model due to changes in competitive landscape, changes in Technology which may render our capabilities obsolete, and thus hamper our ability to serve our customers and protect assets. These risks could adversely affect Customer projects, Employees, Shareholders, liability to Third Party and risks to Property among others. Controlling these risks through a formal process is necessary for the well being of the Organization and its stakeholders.

The organisation''s Risk policy facilitates identification of these Risks on a continuous basis and proposes mitigation measures. Our risk policy aims to minimize adverse impact of these risks on Company''s growth, Profit margins and People engagement besides Regulatory Compliance. Risk Management has been made an integral part of the Organisation by encouraging Risk Awareness among employees.

Risk Management Committee

The Risk Management Committee (RMC) of the Board of Directors oversees the Risk Management process under the overall direction of the Board of Directors. The Risk Management Committee consists of the Board of Directors, Chief Financial Officer and the Chief Risk Officer. The Organisation use BELIEF (Brand, End Customer Capital, Leadership, Intellectual Property, Execution and Finance) framework for its risk classification. The RMC is supported by Information and Cyber Security Sub Committee, Cloud Risk Council and Enterprise Risk Department to execute the overall risk management plan and periodically update the Risk Management Committee.

Risk Management Process

Risk Management is a continuous and developing process which runs throughout the Organisation''s strategy and the implementation of that strategy. The Risk Management helps the organisation to proactively manage uncertainties in the internal and external environment and to limit the negative impacts and benefit on the opportunities. The process includes risk identification, risk evaluation, risk prioritsation, risk mitigation, risk monitoring & review.

BRAND CAPITAL1. Reputation Risk

The brand / reputation risk may arise in case of issues around product implementation, customer relationships & escalations etc. Risk may accentuate due to increased use of social media & other internet based applications in the corporate world. The risk is mitigated by adoption of Product, Delivery & Customer Excellence processes to manage implementations & relationships effectively.

END CUSTOMER CAPITAL2. Business Risk2.1 Economic, Political and Social Outlook Risk

Volatility in the financial markets coupled with political uncertainties, trade war, inflationary trends, recession, pandemic or unforeseen external events may have resulting cascading effects on the financial sectors such as cost reduction measures etc. Further demographic shift in usage of technology or financial services by consumer in general may have adverse impact on sale of Intellect products. Intellect''s global presence, wide range of products to cater different segments within the financial sectors, penetration into diversified market & various geographies; spread of product concentration and increased partnerships facilitates to mitigate the risk.

2.2 Market Competition Risk

The company faces competition from large Multinational companies, local companies in the geography in which we operate and Indian Product companies. While many of these companies are established companies, the start-ups may also disrupt our business. This may pose challenges to maintain or sustain the business growth or profitability in a longer run. Company makes focussed investments in R&D with continuous evaluations of product endurance across segments / geographies to keep products relevant & competitive in market place. Ongoing efforts made to enhance the customer experience through deployments of innovative products, competitive pricing through operational efficiencies, cost optimisation measures & improved implementations with minimal no. of defects helps us to remain ahead in the innovation curve.

2.3 Business Model Risk

With increased usage of cloud hosting across the industry, a strategic shift from traditional License / AMC based model to cloud model may pose risk to the Company''s existing business model. Moreover, the disruptive technologies such as Big data, ML & AI coupled with usage of social and smart devices can change the way business is done. The Company keeps a close eye on the changing business model scenario and takes appropriate required actions. A certain portion of our revenue is already derived from the Cloud model through SaaS & subscription. The Company also makes focused investment in R&D to keep the products relevant and competitive in market place and create products with Digital technologies.

2.4 Business Concentration Risk

The company is specialised in BFSI space and could face the risk of concentration in a single space. Significant reliance on a particular product, customer, segments or geography may heighten the risk of revenue loss & consequential impact on the profitability in case of adverse conditions such as customer exit, volatile geo-political scenarios, sector specific slowdown etc. However, this risk is mitigated to a large extent by fairly diversifying the concentration across lines of business, market segments & geographies. The company has presence in all the 4 sub segments of BFSI namely Corporate Banking, Retail Banking, Capital Markets and Insurance. These 4 sub segments have different boom and bust cycle and therefore protect the company. Further Company has multiple products and client base to further de-risk the product / business concentration. Intellect mitigates its geography concentration risk by having its presence across different geographies. Multiple products and client base further de-risk the product / business concentration.

2.5 Customer Service Management Risk

Intellect has the contractual agreements with multiple clients from different countries with varied needs, requirements and their legal & operating environment. Morever, the nature of the contracts are long term and relationships if not managed appropriately could have repercussions on the customer persistency & business growth. The risk is mitigated through regular assessment of the customer relationships through customer

feedback and satisfaction scores. Mechanisms are built in to monitor adherence to the contractual clauses with its customers. The robust longterm strategic relationships are built with the customers to enhance customer satisfaction & value maximisation along with designing, developing & implementing the products according to industry needs and requirements.

2.6 Contractual Compliance Risk

As a product based company, Intellect bears the risk of IP infringements arising from the use of its products and non-performance of its contractual obligations. These risks may accentuate if the contractual obligations are not aligned to Intellect''s risk appetite. The Company has an established process in place to review all contracts. As a policy its obligation under each contract are restricted appropriately. The Company has adequate Insurance obtained to mitigate against risk of Errors and Omissions, Commercial General Liability etc.

LEADERSHIP CAPITAL3.1 People Risk

The Company operates in niche BFSI product space which requires people with specialised skill, as against mass recruitment that was followed in Services business. Lately the overall IT industry has experienced the challenges of high attrition and retention of critical talent in the organisation. The Company minimises the risk through in-depth in-house training & recruitment from top end Engineering colleges , B Schools, Tier 2 cities & lateral hires. The Background Checks (BGC) is mandated for all new hirers and is audited from time to time. Emphasis prevails on conduct of indepth & in-house training.

3.2 Associate Conduct Risk

Mechanisms to prevent or minimise inappropriate conduct such as fraud, sexual harassment, criminal attempts, bribery or violation of Company policies such as code of conduct, conditions of employment, Insider trading or any other professional negligence, errors & omissions etc. if not adequate may jeopardise work culture / reputation / asset / property damage or business performance. Established various policies & process, adequate trainings and awareness programmes on policies & procedures for its associates conducted along with regular monitoring. Policies on whistle blower, escalations, incident management & response mechanisms in conjunction with the established disciplinary committee facilitates to effectively address the inappropriate conducts, if any.

INTELLECTUAL PROPERTY CAPITAL4.1 Information & Cyber Security Risk

Internal and external cyber threats if not appropriately managed can potentially result in data leakage, source code compromise etc. which may significantly disrupt core operations and may damage Company''s Brand Image / reputation. The risk is mitigated through Information & Cyber Security Forum and Central Security Group which administer the Information & Cyber security programme for the organisation. through internal and external assessments in the form of Audits and Certifications like ISO 27001, ISO 27017, ISO27018, PCI DSS and SOC2. Intellect Security policy is institutionalized across the organization. Moreover, Cyber liability insurance is obtained to safeguard against any loss arising out of any security breaches.

4.2 Data Protection & Privacy Risk

The confidential data of the customers / associates are subject to data privacy laws of various states. Procedures to effectively handle the confidentiality and privacy if not robust can lead to data breaches. The risk gets accentuated on account of heightened regulations or guidelines such as GDPR, widespread usage of emerging technologies used to enhance customer experience also may pose challenges to protect data & the privacy elements. The risk is mitigated by putting data authorisation process in place, provision of necessary guidance to the delivery teams with data security practices. GDPR related compliance reviews are facilitated for applicable business / functional teams.

• Vulnerability Assessment & Penetration Test (VAPT) and Dynamic Application Security Testing (DAST) is being enforced across all Product releases. Further, there is an adopting new contractual provisions in existing and new contracts.

4.3 Intellectual Property Rights Infringement Risk:

a) IP protection: The Company may face challenges to protect the Intellectual property rights which are pivotal for its revenue generation. The risk is mitigated through registration of IPs in the countries having robust protection laws.

b) Risk of use of "Open Source" Software

"Open Source" Software may be used in some of our solutions. Failure to abide with the terms of the open source licenses could have a negative impact on our business. The risk is mitigated through adoption of the open source policy which facilitates to identify, monitor, review, report & thereby facilitate restricted & acknowledged usage of the open source software''s on ongoing basis. Usage of COTS are under agreement and audited from time to time by our IT department. FOSS used by the respective business units is reported to the IT Department

EXECUTION CAPITAL5.1 Global Operations Risk

Global operations may get impacted on account of various factors inherent to the international business activities and differences in the following: Laws and Regulations in the banking & financial service, work practices (e.g. working from home), complex tax regimes, licensing requirements, varied trade / tariff policies & corruption perception index, data protection and privacy laws, economic sanctions, outbreaks of war, hostilities, terrorism, mass immigration, international embargoes, economic sanctions and boycotts and staffing challenges and immigration laws. Specific policies and procedures put in place with regard to work practices, Code of Conduct, anti-bribery, anti-money laundering, data protection and privacy etc.

Consultation support from reputated tax firms. is obtained from time to time.

5.2 Cloud Infrastructure Management Risk

With increased cloud adaptability, requirements to have highly skilled resources to manage cloud environments, unique contractual agreements with the customers & cloud service providers, ensuring adequacy of security measures by the service providers, heightened regulations like GDPR, the company is exposed to a risk of SLA / security breaches by cloud service providers which may result in financial implications (imposition of fines & penalties) or reputation damage. The risk is mitigated by defining the Cloud operational governance framework to consistently manage cloud environments across the lines of businesses. Periodic reviews are performed to assess the security, internal controls, DR, backup processes, SLAs, service contracts etc. with cloud service providers. ISO 27018 certification obtained for cloud security.

5.3 Product Implementation Risk

Delays, errors or omissions in implementations could hamper our delivery capabilities leading to multiple risks such as delay in collections, violation of contractual commitments, fines / penalties and damages to Brand image. The risk is mitigated through delivery excellence processes & continuous monitoring & reporting of implementations through use of various tools. Further, Company adequately insures itself for any liabilities arising on account of errors & omissions or any delays.

5.4 Defects or Security Vulnerability Risk

Inability to identify or detect defects or security vulnerabilities in the Intellect''s existing or new products either at development stage or subsequently in the various versions or enhancements of the products. Inability to meet the customer expectations in its entirety regarding the timeliness and the quality of the defect resolution process. This may result in refunds, damage claims, termination of existing arrangements, product replacement or negative publicity impacting future demand proposition of the product, increased costs (service, maintenance & warranty cost etc.)

Intellect has a comprehensive Delivery Excellence framework and Quality Management process in place as part of the software development lifecycle. Moreover, extensive testing is performed to identify and resolve any issues which may adversely affect the functionality, security and other performance of the products and offerings.

5.5 Compliance Risk

Inadequate or non compliances to the material laws & regulations applicable in the respective countries having business presence may lead to fines / penalties / closure of the offices resulting in revenue loss. The Company Secretarial team monitors the secretarial & compliance related activities. Country specific statutory compliance requirements of our Overseas Subsidiaries is regularly monitored and reported. The subsidiary compliance is ensured periodically under various jurisdictions.

5.6 Legal Risk:

Intellect operates in multiple jurisdictions and therefore is subject to different regulations. Any legal proceedings in geography are likely to have uncertain outcomes resulting in damages or injunctive measures that could hinder Intellect''s ability to conduct business in these geographies. Monetary risks and other risks impacting the company''s financial condition and reputation are balanced off through the contract review processes. The Company has a dedicated legal team which works closely with the business and other stakeholders (through business) to ascertain the scope and risks of the deal.

5.7 Business Continuity Risk:

In light of recent pandemic scenario arising on account of Covid19, the significance of business continuity is of paramount importance. The Business continuity plans for people, processes & technology if not robust or inadequate may create challenges to manage unforeseen crisis or events such as natural or man made calamities / disasters and may disrupt the business performance. The risk is managed by designing appropriate recovery strategies / business continuity plans. Intellect has an established enterprise Business Continuity management framework and project level BCPs. Contract clauses provide protection for Force Majeure incidents. Dedicated teams monitor the adequacy of the business continuity arrangements. Periodic testing and simulations carried out on an annual basis.

5.8 Fraud Risk:

Mechanisms to prevent, detect, measure, monitor and report the potential collusion touch points, fraud events or criminal hackings if not robust may result in revenue leakage, financial losses or the reputation damage for the Company. To mitigate the risk, potential fraud areas are assessed as part of regular audit programmes including performance of Vulnerability and Penetration testing across product release. Risks associated with potential fraud for identified design gaps are reported to the Internal Audit Committee with suitable action plans. Further, Crime insurance cover is obtained to safeguard against any direct financial loss arising out of fraudulent activities by associates.

5.9 New Country Entry Risk:

Failure to effectively study, evaluate, identify, analyse and address the country specific risks at the time of entry into a particular geography could adversely affect long term interests of the organisation. Any new business opportunity in a new country is subject to a Country Risk Assessment which helps in developing a robust knowledge platform and also to understand the local conditions and business culture at the early stages of the business and design adequate risk mitigation measures to facilitate business in new countries.

FINANCIAL CAPITAL6.1 Market Risk (arising from Foreign Exchange / Currency Fluctuations)

The company earns a large portion of its revenue in foreign currencies and is exposed to the risk of currency movements. To mitigate this risk, the company follows a 2 step strategy.

• As the first step, quotation in foreign currencies is restricted to few selected major currencies. Quotation in any other currency is highly controlled.

• The second leg of this strategy is to hedge the foreign earnings after subtracting the local expenses.

6.2 Larger Order to Cash Cycle and Liquidity Risk

Our customers being large Banks and Financial Institutions the credit worthiness is in comfort even though the cycle is long. The percentage of bad debts is also minimal. Since the Products business has a long order to cash cycle, delays in conversion of REB into invoicing or recovery of the billed invoices from the clients / customers may result in strain over the company to meet their working capital requirements, recurring, fixed & direct costs which may require increased borrowings, finance charges and thereby impact the Company''s profitability. The risk is mitigated by arrangement of required credit lines through various Banks, regular monitoring of ageing of receivables / REB balances by the management and robust recovery & follow-ups mechanisms with clients / customers.

The Company has identified Liquidity Risk as an area to monitor. The Finance organisation headed by the CFO monitors the liquidity position consisting of cash and near cash instruments on a continuous basis.

6.3 Financial Reporting Risk - Internal Financial Control (IFC)

The Company has to comply with additional controls enforced by Section 134 of the Companies Act 2013. This is to report on the Internal Financial Control in the Directors Report and also by the Statutory Auditors. Key internal controls over financial reporting if not designed, identified and operate effectively may result in mis-statements going unnoticed and impact the true and fair view of the financial / operational results of the Company. To comply with this, the company assesses the existing control environment through regular internal and statutory audits and ensures that the requirements are complied.

Risk Mitigation through Insurance

The Company has appointed a Global leader for Risk & Insurance advisory to advice on the risk and insurance coverage. The following Insurance coverage is taken to mitigate risks.

1. Errors & Omissions Insurance - To safeguard against any loss arising of an error, negligent act or omission which would result in failure in performing the professional services or duties for others.

2. Cyber Liability Insurance - To safeguard against any loss arising out of a security breach and or privacy breach that would result in sensitive or unauthorised data or information being lost or compromised.

3. Crime Insurance - To safeguard against any direct financial loss of property, money or securities arising out the fraudulent activities committed by the employee or in collusion with others.

4. Directors & Officers Liability Insurance - To safeguard against any loss arising out of a wrongful act made by the Directors, Officers and Employees of the organisation with reference to the Company''s business operations and activities.

5. Commercial General Liability Insurance - To safeguard against Third Party bodily injury or property damage arising out of our business operations.

6. Standard Fire & Special Perils Insurance - To protect the Company''s Assets (movable & immovable Assets) from the risk of Fire or Perils.

24. Corporate Social Responsibility

The Company has formed Corporate Social Responsibility Committee on October 15, 2014 and reconstituted on July 24, 2019 and August 05, 2020. Following are the members of the Committee:

a) Mr. Anil Kumar Verma - Chairman

b) Mr. Abhay Anant Gupte - Member

c) Mr. Arun Jain - Member

As per Section 135 of the Companies Act, 2013, a company meeting the applicability threshold, needs to spend at least 2% of its average net profits for the immediately preceding three financial years on CSR activities. The details of the policy developed and implemented by the Company is given as a part of Annual Report on CSR as Annexure 7.

25. Secretarial Standards

The Company complies with all applicable mandatory secretarial standards as issued by the Institute of Company Secretaries of India.

The Company has devised proper systems to ensure compliance with the provisions of all applicable Secretarial Standards issued by the Institute of Company Secretaries of India and that such systems are adequate and operating effectively

26. Disclosure as required under Section 22 of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

The Company has in place an Anti-Sexual Harassment Policy in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. The Internal Complaints Committee ("ICC") has been set up to redress the complaints received regarding sexual harassment. All employees are covered under this policy. The following is the summary of the Complaints received and disposed off during the financial year 2022-23:

a) No. of Complaints filed during the year: 01

b) No. of Complaints disposed during the year: Nil*

c) No. of Complaints pending as at end of the financial year: 01

*The Complaint was resolved after the financial year ended March 31, 2023

27. Listing Fees

The Company confirms that it has paid the annual listing fees for the year 2022-23 to both the National Stock Exchange of India Limited and BSE Limited.

28. Certifications

Your Directors would like to appreciate the achievements of the Quality Department, which enabled your Company to get certified at CMMi level 5 by CMMI Institute, USA for its Global Consumer Banking (iGCB) business. Your Directors would also like to appreciate the achievements of Cards Business team and Corporate Security Group for PCI - DSS certification, and the achievements of iSEEC business team and Corporate Security Group for SOC 2 certification for Insurance products. Your Directors would also like to appreciate the achievements of the Corporate Security Group for ISO 27001, ISO 27017, ISO 27018 Certifications on Information Security Management System, Cloud Security Controls and Cloud Privacy respectively. Your Directors would also like to appreciate the achievements of the Administration Team for ISO 14001 Certification on Environment Management System.

29. Insolvency and Bankruptcy Code, 2016 (31 of 2016)

There was no application made or any proceeding pending under the Insolvency and Bankruptcy Code, 2016 (31 of 2016) during the financial year.

30. General

Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions/events on these items during the year under review:

i. Issue of Equity Shares with differential rights as to Dividend, voting or otherwise.

ii. Issue of Sweat Equity Shares to employees of the Company under any scheme.

Difference between amount of valuation done at the time of one-time settlement and the valuation done while taking loan from the Banks or Financial Institutions.

31. Acknowledgment

Your Directors take this opportunity to express the gratitude to all investors, clients, vendors, Bankers, Regulatory and Government authorities, Stock Exchanges and business associates and all other stakeholders for their cooperation, encouragement and continued support extended to the Company. Your Directors also wish to place on record their appreciation to the Associates for their continuing support and unstinting efforts in ensuring an excellent all-round operational performance at all levels.

By Order of the Board For Intellect Design Arena Limited

Place: Chennai Arun Jain

Date : May 11, 2023 Chairman and Managing Director

DIN:00580919


Mar 31, 2022

To the members,

We are pleased to present the 11th Annual Report on our business and operations for the year ended 31st March 2022 of Intellect Design Arena Limited (“Company"). This is our eighth year of business operations.

1. Results of operations

(In Rs. Millions, except EPS data)

Standalone

Consolidated

Description

Year ended March 31

2022

2021

2022

2021

Income (Including Other Income & exceptional item, if any)

12,913.55

10,186.08

19,186.87

15,101.41

Expenses (Excluding, Depreciation, Finance charges & Including exceptional item, if any)

9,549.83

7,385.17

14,061.24

11,426.45

Profit/(Loss) before Interest, Depreciation & Tax (PBIDTA)

3,363.72

2,800.91

5,125.63

3,674.96

Finance Charges

29.63

74.98

42.71

91.74

Depreciation & amortization

690.33

500.14

975.62

767.14

Net Profit/(Loss) Before Tax (excluding share of profit / (Loss) from Associate Companies)

2,643.76

2,225.79

4,107.30

2,816.08

Provision for tax including Deferred Tax

622.94

153.26

627.41

254.51

Net Profit/(Loss) after tax before Share of Profit/(Loss) from Associate Companies

2,020.82

2,072.53

3,479.89

2,561.57

Add / (Less): Share of Profit / (Loss) on Associate Companies

24.53

84.79

Net Profit / (Loss)

2,020.82

2,072.53

3,504.42

2,646.36

Re-measurement gains/(losses) on defined benefit plans

15.56

(10.54)

16.10

(10.32)

Exchange differences on translation of foreign operations

(4.56)

(7.03)

Net movement on cash flow hedges

154.78

527.45

154.78

527.45

Other comprehensive income for the year, net of tax

170.34

516.91

166.32

510.10

Total comprehensive income for the year, net of tax

2,191.16

2,589.44

3,670.74

3,156.46

Less: Non Controlling Interest

-

-

17.21

15.28

Total comprehensive income for the year, net of tax (Excluding Non controlling Interest)

2,191.16

2,589.44

3,653.53

3,141.18

EPS

Basic Rs.

15.19

15.63

26.25

19.82

Diluted Rs.

14.55

15.42

25.14

19.55

Function wise classification of statement of consolidated Profit and Loss

(In Rs. Millions)

PARTICULARS

Year Ended

March 31, 2022

March 31, 2021

INCOME

Income from software product license and related services

18,565.00

14,992.00

Hedge Impact

217.00

(17.00)

Total Income

18,782.00

14,975.00

EXPENDITURE

Software development expenses

8,026.00

6,646.00

Gross Margin

10,756.00

8,329.00

Gross Margin %

57%

56%

Selling and marketing & General and administrative expenses

4,878.00

3,836.00

Research & Engineering expenses

1,157.00

933.00

Total Expenditure

14,061.00

11,415.00

EBITDA

4,721.00

3,559.00

Depreciation and Amortisation

(976.00)

(767.00)

Finance Charges

(43.00)

(92.00)

Fx Reins. (loss)/gain

(60.00)

28.00

Other Income/Expenses

476.00

154.00

Profit / (Loss) before Tax

4,118.00

2,882.00

Provision for taxation

(627.00)

(255.00)

Profit / (Loss) after tax (excluding non-controlling interest)

3,491.00

2,628.00

Table No. 1.2

2. State of Company''s Affairs

The consolidated revenue of the Company for the year ended March 31st, 2022 stood at Rs.19,186 Millions as against Rs.15,101 Millions for the previous year and there is an increase in the revenue to the tune of 27.05%. The consolidated Net Profit/(Loss) after tax for the fiscal year ended March 31st, 2022 stood at Rs. 3,504 Millions as against the previous year''s Net Profit/(Loss) after tax of Rs. 2,646 Millions. The Consolidated Reserves and Surplus as of 31st March 2022 stood at Rs.17,414 Millions as against Rs. 13,263 Millions as of March 31st, 2021. For the financial year ended 2021-2022, the Company has not transferred any amount to the reserves.

3. Material Changes and Commitments

There were no material changes and commitments from the end of the financial year till the date of this report.

4. Dividend

The Board at its meeting held on May 05, 2022 has proposed final dividend of Rs. 2.50/- per share at face value of Rs 5/- for the financial year ended March 31, 2022, subject to the approval of shareholders at the ensuing Annual General Meeting and if approved would result in the cash flow of Rs. 336.38 Millions.

The Dividend Distribution Policy, in terms of Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“Listing Regulations") is uploaded on the Company''s website.

The weblink of the Dividend Distribution Policy is

https://www.intellectdesign.com/investor/general/2018-apr-dividend-

distribution-policy.pdf.

5. COVID-19

The COVID pandemic continued to be a global challenge and creates disruption across the world. It''s effect has been felt by everyone, regardless of their position. Your Company''s top priority is the physical and emotional wellbeing of its employees. The Company has taken several initiatives to support its employees and their families during the pandemic like organising Doctor on call facilities, Isolation / Quarantine facilities, medical helpline, Ambulance Services, Vaccination for 45 and other support. The Company has set up a dedicated Covid Response Team which helps employees and their families with the above facilities. The Company has also organised counselling and self-help services to support its employees in maintaining their mental & emotional health.

With the work from home approach, the Company has been able to provide continuous services to all the customers across the globe. This approach has

strengthened the customers'' confidence in the Company. Our stakeholders have expressed their appreciation for ensuring that business continues despite the challenging conditions.

6. Subsidiaries

Details of Subsidiary Companies, Associate Companies, and their financial position.

Your Company has 22 (12 direct and 10 step down) Subsidiary Companies and 2 associate companies as on March 31, 2022. The information as required under the first provision to sub-section (3) of Section 129 is given in Form AOC-1 in Annexure 1.

7. Cash Reserves

Your Company has cash reserve of Rs. 5,588.73 Millions.

8. Share Capital

The paid-up Capital of the Company was increased to Rs. 672.77 Million through share allotments made against exercise of Options (15,79,251 equity shares) under the ASOP / ISOP / IIPS Schemes, comprising of 134,553,614 equity shares at a face value of Rs. 5/- each as on March 31, 2022.

The details of all the stock option plans, including terms of reference, and the requirements are set out in Annexure 2.

9. Corporate Governance

Your Company has been complying with the provisions of Corporate Governance as stipulated in SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (referred as “Listing Regulations"). A separate report on Corporate Governance, along with the Certificate on Compliance of the Corporate Governance norms as stipulated under Chapter IV of the Listing Regulations and Management Discussion & Analysis forming part of this report, is provided elsewhere in this Annual Report.

10. Transfer to Investor Education and Protection Fund

As required under the provisions of Section 125 and other applicable provisions of Companies Act, 2013 (hereinafter “the Act"), dividend that remain unpaid/ unclaimed for a period of seven years, are to be transferred to the account administered by the Central Government viz: Investor Education and Protection Fund (“IEPF").

As the Company has not paid any dividend in the previous years, the provisions of Section 125 of the Companies Act, 2013 is not applicable to our Company.

11. Conservation of energy, technology absorption, foreign exchange earnings and outgo

The particulars as prescribed under Section 134 (3) (m) of the Companies Act,

2013 read with Rule 8 of the Companies (Accounts) Rules, 2014, are set out in Annexure 3 of this Report.

12. Particulars of employees

(a) The statement containing particulars of employees as required under Section 197 (12) of the Companies Act, 2013 read with Rule 5 (2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules,

2014 does not form part of this report. In terms of Section 136 of the Act, the same is open for inspection during working hours at the registered office of your company. A copy of this statement may be obtained by the members by writing to the Company Secretary.

(b) The ratio of remuneration of each director to the median remuneration of the employees of the company and other details in terms of Section 197 (12) of the Companies Act, 2013 read with Rule 5 (1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are part of this report as Annexure 4.

13. Directors'' responsibility statement as required under Section 134 (5) of the Companies Act, 2013

Pursuant to the provisions of Section 134 (3) (c) of the Companies Act, 2013 the Directors of your Company confirm that:

a) In the preparation of the Annual Accounts, the applicable accounting standards have been followed, along with the proper explanation relating to material departures;

b) The Directors have selected such accounting policies, applied them consistently, and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit of the company for that period;

c) The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act, for safeguarding the assets of the company, and for preventing and detecting fraud and other irregularities;

d) The Directors have prepared the Annual Accounts on a “going concern basis";

e) The 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; and

f) The Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

14. Board Meetings, Board of Directors, Key Managerial Personnel & Committees of Directors

(a) Board Meetings:

The Board of Directors of the Company met 5 times during the year 2021-22. The details of various Board Meetings are provided in the Corporate Governance Report. The gap intervening between two meetings of the board is as prescribed in the Act.

(b) Changes in Executive Directors, Non-Executive Directors & Key Managerial Personnel

During the year, Mr. Anil Kumar Verma (DIN: 01957168) was re-appointed as Whole-time Director of the Company for a period of 5 years in its Annual General Meeting held on August 4, 2021 with effect from February 1, 2021 to January 31, 2026 through a special resolution.

The Board at its meeting held on May 05, 2022 has appointed Mr. Ambrish Pandey Jain as an Additional Director - Independent category for a term consisting of 5 years, who shall hold office upto the date of the ensuing Annual General Meeting, which is to be held within three months from the date of appointment, subject to the approval of shareholders at the ensuing Annual General Meeting through a special resolution.

(c) Re-Appointment

In terms of Section 152 (6) of the Companies Act, 2013 and as per Article 34 (l) of the Articles of Association of the Company, one third of the Directors other than Independent Directors are liable to retire by rotation at the Annual General Meeting of the Company. Mr. Andrew Ralph England, Non Executive Non Independent Director is liable to retire by rotation and offers himself for reappointment.

(d) Independent Directors

Mr. Arun Shekhar Aran was re-appointed as an Independent Director at the 8th AGM held on 21st August, 2019 for a second term of five (5) years.

Ms. Vijaya Sampath was appointed as an Independent Director w.e.f. October 25, 2018 for the first term of 5 years and was regularised at the AGM held on 21st August, 2019.

Mr. Abhay Anant Gupte was appointed as an Independent Director w.e.f. June

15, 2020 for the first term of 5 years and was regularised at the AGM held on 21st August, 2020.

Mr. Ambrish Pandey Jain was appointed as an Additional Director (Independent Category) of the Company at the Board of Directors'' Meeting held on 05.05.2022, who shall hold office till the next Annual General Meeting of the Company or 3 months from the date of appointment whichever occurs earlier. He will be appointed as an Independent Director subject to the approval of the members in the ensuing Annual General Meeting for a period of 5 years w.e.f from 05.05.2022.

No Directors resigned during the year 2021-2022.

The Company has received necessary declarations from each Independent Director of the Company under Section 149 (7) of the Companies Act, 2013, that they meet the criteria of independence as laid down in Section 149 (6) of the Act and in accordance with Regulation 25(8) of SEBI (Listing Obligations and

Disclosure Requirements) Regulations, 2015. Further, no Independent Director is a non-Independent Director of another Company on the Board on which any non-independent Director of the listed entity is an Independent Director and no director has been debarred by any order / judgement of any regulator in force.

(e) Details of remuneration to Directors: The information relating to remuneration of directors as required under Section 197(12) of the Companies Act, 2013, is given elsewhere in the report.

(f) Board Committees

The Company has the following Board Committees:

1. Audit Committee

2. Nomination, Remuneration & Compensation Committee

3. Stakeholders'' Relationship Committee

4. Corporate Social Responsibility Committee

5. Risk Management Committee

Sub-committees:

1. Share Transfer Committee

2. Cyber Security Committee

The composition of each of the above Committees, their respective role and responsibility is as detailed in the Report of Corporate Governance.

The policy framed by the Nomination, Remuneration and Compensation Committee under the provisions of Section 178(4) of the Act, is as below:

(g) Remuneration policy The remuneration policy of the Company has been so structured as to match the market trends of the IT industry. The Board, in consultation with the Nomination and Remuneration & Compensation Committee, decides the remuneration policy for Directors. The Company has made adequate disclosures to the members on the remuneration paid to the Directors from time to time. Remuneration / Commission payable to Directors is determined by the contributions made by the respective Directors for the growth of the Company.

The remuneration policy of the Company and other matters as required under Section 178 (3) of the Act can be accessed through

https://www.intellectdesign.com/investor/general/remuneration-policy.pdf. There has been no change in the policy since the last fiscal year. We affirm that the remuneration paid to the Directors are as per the terms laid out in the remuneration policy of the Company.

(h) Board Evaluation

As required under the provisions of Section 134 (3) (p) of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board has carried out an annual performance evaluation of its own performance and that of its committees and individual directors. The manner in which such performance evaluation was carried out is as under:

The performance evaluation framework is in place. Prof. Ashok Korwar was appointed to evaluate the performance of the Directors and made a presentation to the Board summarising the views and suggestions made by the individual Directors and the Board. The performance of the Board was evaluated on the basis of criteria such as the Board composition and structure, effectiveness of Board processes, information and functioning, etc.

The performance of the committees was evaluated by the Board after seeking inputs from the committee members on the basis of criteria such as the composition of committees, effectiveness of committee meetings, etc.

The Board and the Nomination, Remuneration and Compensation Committee reviewed the performance of Individual Directors on the basis of criteria such as exercise of responsibilities in a bonafide manner in the interest of the Company, striving to attend meetings of the Board of Directors / Committees of which he/she is a member / general meetings, participating constructively and actively in the meetings of the Board / committees of the Board, etc.

In a separate meeting of independent directors held on March 22, 2022, performance of Non-Independent Directors, performance of the Chairman of the Company and the performance of the Board as a whole were evaluated.

(i) Vigil Mechanism

The Company has established a whistle-blower policy and also a mechanism for Directors and employees to report their concerns. The details of the same is explained in the Corporate Governance Report.

(j) Related Party Transactions

All related party transactions that were entered during the financial year were on arm''s length basis and were in the ordinary course of business. There are no other materially significant related party transactions made by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of the Company at large.

During the year, Related Party Transaction has undergone various modifications in line with SEBI(Listing Obligations and Disclosure Requirements)(Sixth Amendment) Regulations, 2021.

The details of the related party transactions as required under Section 134 (3) (h) read with Rule 8 of the Companies (Accounts) Rules, 2014, is attached as Annexure 5.

15. Auditor reports and auditors

Statutory Auditors: M/s. S.R. Batliboi & Associates LLP, Chennai, Chartered Accountants have been appointed at the Annual General Meeting held on 21st August, 2019 to hold office as statutory auditors until the conclusion of the 13th Annual General Meeting of the Company. There are no qualifications or adverse remarks in the Auditor''s Report for the financial year ended 31st March, 2022. Secretarial Auditors: Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, Secretarial Audit has been carried out by M/s B Ravi & Associates, Company Secretaries, and their report is annexed as Annexure 6. There are no qualification or adverse remarks in the Secretarial Audit report for the financial year ended 31st March, 2022.

Internal Auditors: Pursuant to Section 138 of the Companies Act, 2013, M/s. ANB & Co. has been appointed as the Internal Auditors of the Company. Reports of the Internal Auditors'' has been reviewed and taken on record by the Audit Committee of the Board of Directors of the Company.

Cost Records and Cost Audit: Maintenance of cost records and requirements of cost audit as prescribed under Section 148(1) of the Companies Act, 2013 are not applicable for the business activities carried out by the Company.

16. Deposits

Our Company has not accepted any deposits during the financial year and as such, no amount of principal or interest was outstanding as on 31st March, 2022.

17. Reporting of fraud:

During the year under review, there were no instances of fraud as required to be reported by the Statutory Auditors / Secretarial auditors of the Company.

18. Social Connect Ullas Trust

Is the collective social responsibility of Intellect that brings together our associates with the adolescent young minds in the communities we live and work in, and even going to back our roots in the districts, to experience the magic of mentoring young minds! Magic as one experiences the joy of shaping young minds, but also the reverse learning that one receives from these bright sparks that inspires every mentor to do more and be more.

Since its inception in 1997, Ullas has grown into a thriving community of dedicated associate volunteer mentors from Intellect, from our Clients, and other Corporates; partners from Civil Society Organisations, and youth from Colleges - all united by the common purpose of shaping the thinking of adolescent young minds. Over the 24 years, Ullas has sown the seed of a dream, ignited and nurtured over 17.5 lakh young minds across 115 Districts, in 8 States and 2 Union Territories.

Primary motive of the Trust continues to be - to ignite young minds and nurture them during their most vulnerable space in life (adolescence). This is accomplished through seeding the “Can Do" spirit, encouraging them to dream big with conviction, positive role model influences, and enrichment programs delivered by mentors to nurture them towards achieving their potential and their dreams.

While the year seemed a repeat of 2020 in many ways, it was with renewed energy that Ullas not only delivered the interventions but also curated and delivered several new programs that aligned with the purpose of "igniting young minds", and sowing the seeds of "Can Do" spirit in every intervention

that added great value to their resumes.

• Ullas - a community of Engaged Givers: “The greatness of a community is most accurately measured by the compassionate actions of its members -Coretta Scott King". Especially during the most uncertain and perilous times. These words reflect what the Ullas community is all about - a community made up of our incredible volunteer mentors - Friends of Ullas as they are known, our awesome Alumni from across the globe, our very own inspiring Young Leaders who came together to collectively lift the spirits of young minds through the various programs. Be it a wellness call to check in on a student and their family, or a 2 hour Summit intervention virtually or a 1-1 mentoring program, our Ullas community was not just empathetic but "compassion in action"! We could not have done this without this ONE team!

Yet another extraordinary year where the “purity of purpose" of Ullas continued to shine bright! As we step into the 25th year of Ullas, we are humbled by the path traversed lives touched, transformed and yet know that there are miles to go!

19. Audit Committee Recommendation

During the year, all the recommendations of the Audit Committee were accepted by the Board. The Composition of the Audit Committee is as described in the Corporate Governance Report.

20. Annual Return

Pursuant to Section 92 (3) read with Section 134 (3) (a) of the Companies Act, 2013, the Annual Return in Form MGT 7 shall be placed on the website of the company at www.intellectdesign.com/investor-relations after the conclusion of the 11th Annual General Meeting.

21. Significant & Material Orders passed by the Regulators or Courts

During the Financial Year 2021-22, no order has been passed by any Regulatory authorities or Courts.

22. Particulars of Loans, Guarantees and Investments u/s 186

During the financial year, there was no loan given or guarantee given or security provided pursuant to Section 186 of the Companies Act, 2013 and the relevant provisions as applicable have been compiled by the Company. Details of investments made by the Company are given in the Notes to the Financial Statements

23. Risk Management Policy

Intellect being a pioneer in the Intellectual property led Business in India, the company is continuously focussing and committing itself to have a Risk Management system suited for the Products business.

Towards this, the Board has formed a Risk Management Committee with Directors, the Chief Financial Officer and the Chief Risk Officer as members of the committee. The Committee works to mitigate any inherent risks faced by the Business and to meet the increasing demand of Customer''s liability through different means within the overall framework listed below.

Risk Management Framework Objective

The Organisation is subject to certain risks that may affect our ability to operate, may disrupt our business model due to changes in competitive landscape, changes in Technology which may render our capabilities obsolete, and thus hamper our ability to serve our customers and protect assets. These risks could adversely affect Customer projects, Employees, Shareholders, liability to Third Party and risks to Property among others. Controlling these risks through a formal process is necessary for the well being of the Organization and its stakeholders.

The organisation''s Risk policy facilitates identification of these Risks on a continuous basis and proposes mitigation measures. Our risk policy aims to minimize adverse impact of these risks on Company''s growth, Profit margins and People engagement besides Regulatory Compliance. Risk Management has been made an integral part of the Organisation by encouraging Risk Awareness among employees.

Risk Management Framework

The Risk Management Committee (RMC) of the Board of Directors oversees the Risk Management process under the overall direction of the Board of Directors. The Risk Management Committee consists of the Board of Directors, Chief

and interaction. Also, the repurposed Virtual Summit (20 module weekend

enrichment program) gave Ullas the impetus to get the year started on a strong

note.

Highlights of this Academic Year:

• Wellness at the heart of Ullas: As the pandemic spilled into yet another academic year, Ullas continued to keep the wellness of our Young Achievers, Young Leaders and their families at heart through calling campaigns, regular check-ins and wellness sessions. Ullas was right there with them, supporting them as they navigated through uncertain periods, and in some cases helping them find new pathways. Humbled by the opportunity to go beyond the defined interventions to do the right thing, and be of deeper assistance at their moment of need!

• Summit Enrichment Program: Ullas continued to nurture the dreams of 2596 students from 371 schools across 5 States (Delhi NCR, Haryana, Maharashtra, Tamil Nadu and Telangana) through the virtual Summit interventions. These interventions brought cheer all around - from the volunteer mentors to the Young Achievers and Young Leaders - everyone coming alive despite the virtual medium. It was a joy to witness the essence and ethos of Ullas continue to flourish virtually creating the intended impact. A great reaffirmation of our belief in the “Can Do" spirit and the far reaching impact of our programs!

• Career Pathways: With yet another batch of Grade 12 students going through angst about their next steps - college research and admissions -Ullas reached out to its Batch of Young Leaders who faced a similar situation in 2020 to share their journey of virtual college admissions and how they overcame it successfully. What we witnessed was heartwarming - power of an "Akka (elder sister) or Bhaiya (elder brother)" relatable role models in action for their juniors. The Young Leaders collaborated, curated and delivered a series of sessions covering the do''s and don''ts of virtual admission process. It was extremely gratifying for the young mentors and their mentees!

• History came alive: A chance inquiry about an educational virtual tour by our Trustee Mrs. Manju Jain during her visit to New York State Museum (NYSM) became a reality. NYSM collaborated with Ullas to put together a first of its kind curated virtual tour of the museum for nearly 3,500 Ullasians (Young Achievers, Young Leaders and even our Friends of Ullas!). The virtual tour kindled their curiosity, a love for history and certainly increased our cultural capital.

• NITI Aayog - a seat at the table: Ullas Trust was chosen as one of the

CSOs to be a part of the “Education subgroup" by NITI Aayog. It was validation of the impactful work by Ullas over the years, and a wonderful opportunity to share our learnings, experiences working with Young Achievers in Schools and Young Leaders in College. Ullas submitted a well-researched report on “Access to Higher Education - Opportunities and Recommendations" to the sub-committee that was well appreciated.

• Virtual Touch The Soil - reconnecting digitally to our roots: Second year into the pandemic, with greater resolve Team Ullas took Ullas interventions to students in the classrooms of district schools. Despite the many opportunities on the ground, Ullas delivered “Can Do" and “Planning" workshops to 10,295 students from 95 Schools, 28 Districts across 7 States. Definitely not at scale like the offline Touch The Soil, but in these times of need, even more heartening to reach and ignite young minds in district schools.

• Mission Samriddhi Clusters: Across the four Mission Samriddhi Clusters -Baghpat in UP, Osmanabad, Wardha and Yavatmal in Mahrashtra, Ullas coordinators ensured vibrant, inspiring interactions with young minds. The enrichment programs were even more relevant in these uncertain times in encouraging them to Dream Big, with deep conviction. With the support of teachers and role models from the community, the intervention programs were powerful in driving home the “Can Do" spirit.

• Ullas Young Leaders Program: The Higher Education Scholarship program rechristened as Ullas Young Leader program continued to see exponential growth in e-mentoring programs that ran the gamut of Conversational English to Discovering your "Ikigai". e-Expert talks by professionals from across verticals was an eye-opener for Young Leaders on the various career pathways, upskilling, and internships to further one''s professional standing. Young Leaders looked forward to these “real life" discussions

Financial Officer and the Chief Risk Officer. The Organisation use BELIEF (Brand, End Customer, Leadership, Intellectual Property, Execution and Finance) framework for its risk classification. The RMC is supported by Information and Cyber Security Sub Committee, Cloud Risk Council and Enterprise Risk Department to execute the overall risk management plan and periodically update the Risk Management Committee.

Risk Management Process

Risk Management is a continuous and developing process which runs throughout the Organisation''s strategy and the implementation of that

strategy. The Risk Management helps the organisation to proactively manage uncertainties in the internal and external environment and to limit the negative impacts and benefit on the opportunities. The process includes risk identification, risk evaluation, risk prioritsation, risk mitigation, risk monitoring & review.

BRAND CAPITAL

1. Reputation Risk

The brand / reputation risk may arise in case of issues around product implementation, customer relationships & escalations etc. Risk may accentuate due to increased use of social media & other internet based applications in the corporate world. The risk is mitigated by adoption of Product, Delivery & Customer Excellence processes to manage implementations & relationships effectively.

END CUSTOMER CAPITAL2. Business Risk2.1 Economic, Political and Social Outlook Risk

Volatility in the financial markets coupled with political uncertainities, trade war, inflationary trends, recession, pandemic or unforeseen external events may have resulting cascading effects on the financial sectors such as cost reductions measures etc. Further demographic shift in usage of technology or financial services by consumer in general may have adverse impact on sale of Intellect products. Intellect global presence, wide range of products to cater different segments within the financial sectors, penetration into diversified market & various geographies; spread of product concentration and increased partnerships facilitates to mitigate the risk.

2.2 Market Competition Risk

The company faces competition from large Multinational companies, local companies in the geography in which we operate and Indian Product companies. While many of these companies are established companies, the start ups may also disrupt our business. This may pose a challenges to maintain or sustain the business growth or profitability in a longer run.

Company makes focussed investments in R&D with continuous evaluations of product endurance across segments / geographies to keep products relevant & competitive in market place. Ongoing efforts made to enhance the customer experience through deployments of innovative products, competitive pricing through operational efficiencies, cost optimisation measures & improved implementations with minimal no. of defects helps us to remain ahead in the innovation curve.

2.3 Business Model Risk

With increased usage of cloud hosting across the industry, a strategic shift from traditional License / AMC based model to cloud model may pose risk to the Company''s existing business model. The Company keeps a close eye on the changing business model scenario and takes appropriate required actions. A certain portion of our revenue is already derived from the Cloud model through SaaS & subscription.

2.4 Business Concentration Risk

The company is specialised in BFSI space and could face the risk of concentration in a single space. Significant reliance on a particular product, customer, segments or geography may heighten the risk of revenue loss & consequential impact on the profitability in case of adverse conditions such as customer exit, volatile geo-political scenarios, sector specific slowdown etc. However, this risk is mitigated to a large extent by fairly diversifying the concentration across lines of business, market segments & geographies.

The company has presence in all the 4 sub segments of BFSI namely Corporate Banking, Retail Banking, Capital Markets and Insurance. These 4 sub segments have different boom and bust cycle and therefore protect the company. Further Company has multiple products and client base to further de-risk the product / business concentration. Intellect mitigates its geography concentration risk by having its presence across different geographies.

balanced off through the contract review processes. The Company has a dedicated legal team which works closely with the business and other stakeholders (through business) to ascertain the scope and risks of the deal.

5.7 Business Continuity Risk:

In light of recent pandemic scenario arising on account of Covid19, the significance of business continuity is of paramount importance. The Business continuity plans for people, processes & technology if not robust or inadequate may create challenges to manage unforeseen crisis or events such as natural or man made calamities / disasters and may disrupt the business performance. The risk is managed by designing appropriate recovery strategies / business continuity plans. Dedicated teams monitor the adequacy of the business continuity arrangements. Periodic testing and simulations carried out on an annual basis.

5.8 Fraud Risk:

Mechanisms to prevent, detect, measure, monitor and report the potential collusion touch points, fraud events or criminal hackings if not robust may result in revenue leakage, financial losses or the reputation damage for the Company. To mitigate the risk, potential fraud areas are assessed as part of regular audit programmes including performance of Vulnerability and Penetration testing across product release. Risks associated with potential fraud for identified design gaps are reported to the Internal Audit Committee with suitable action plans. Further, Crime insurance cover is obtained to safeguard against any direct financial loss arising out of fraudulent activities by associates.

5.9 New Country Entry Risk:

Failure to effectively study, evaluate, identify, analyse and address the country specific risks at the time of entry into a particular geography could adversely affect long term interests of the organisation. Any new business opportunity in a new country is subject to a Country Risk Assessment which helps in developing a robust knowledge platform and also to understand the local conditions and business culture at the early stages of the business and design adequate risk mitigation measures to facilitate business in new countries.

FINANCIAL6.1 Foreign Exchange / Currency Fluctuations Risk

The company earns a large portion of its revenue in foreign currencies and is exposed to the risk of currency movements. To mitigate this risk, the company follows a 2 step strategy.

• As the first step, quotation in foreign currencies is restricted to few selected major currencies. Quotation in any other currency is highly controlled.

• The second leg of this strategy is to hedge the foreign earnings after subtracting the local expenses.

6.2 Larger Order to Cash Cycle and Liquidity Risk

Our customers being large Banks and Financial Institutions the credit worthiness is in comfort even though the cycle is long. The percentage of bad debts is also minimal. Since the Products business has a long order to cash cycle, delays in conversion of REB into invoicing or recovery of the billed invoices from the clients / customers may result in strain over the company to meet their working capital requirements, recurring, fixed & direct costs which may require increased borrowings, finance charges and thereby impact the Company''s profitability. The risk is mitigated by arrangement of required credit lines through various Banks, regular monitoring of ageing of receivables / REB balances by the management and robust recovery & follow-ups mechanisms with clients / customers.

The Company has identified Liquidity Risk as an area to monitor. The Finance organisation headed by the CFO monitors the liquidity position consisting of cash and near cash instruments on a continuous basis.

6.3 Financial Reporting Risk - Internal Financial Control (IFC)

The Company has to comply with additional controls enforced by Section 134 of the Companies Act 2013. This is to report on the Internal Financial Control in the Directors Report and also by the Statutory Auditors. Key internal controls over financial reporting if not designed, identified and operate effectively may result in mis-statements going unnoticed and impact the true and fair view of the financial / operational results of the Company. To comply with this, the company assesses the existing control environment through regular internal and statutory audits and ensures that the requirements are complied.

Risk Mitigation through Insurance

The Company has appointed a Global leader for Risk & Insurance advisory to advice on the risk and insurance coverage. The following Insurance coverage is taken to mitigate risks.

1. Errors & Omissions Insurance - To safeguard against any loss arising of an error, negligent act or omission which would result in failure in performing the professional services or duties for others.

2. Cyber Liability Insurance - To safeguard against any loss arising out of a security breach and or privacy breach that would result in sensitive or unauthorised data or information being lost or compromised.

3. Crime Insurance - To safeguard against any direct financial loss of property, money or securities arising out the fraudulent activities committed by the employee or in collusion with others.

4. Directors & Officers Liability Insurance - To safeguard against any loss arising out of a wrongful act made by the Directors, Officers and Employees of the organisation with reference to the Company''s business operations and activities.

5. Commercial General Liability Insurance - To safeguard against Third Party bodily injury or property damage arising out of our business operations.

6. Standard Fire & Special Perils Insurance - To protect the Company''s Assets (movable & immovable Assets) from the risk of Fire or Perils.

24. Corporate Social Responsibility

The Company has formed Corporate Social Responsibility Committee on 15th October, 2014 and reconstituted on 24th July, 2019 and August 05, 2020. Following are the members of the Committee:

a) Mr. Anil Kumar Verma - Chairman

b) Mr. Abhay Anant Gupte - Member

c) Mr. Arun Jain - Member

As per Section 135 of the Companies Act, 2013, a company meeting the applicability threshold, needs to spend at least 2% of its average net profits for the immediately preceding three financial years on CSR activities. The details of the policy developed and implemented by the Company is given as a part of annual report on CSR as Annexure 7.

25. Secretarial Standards

The Company complies with all applicable mandatory secretarial standards as issued by the Institute of Company Secretaries of India.

26. Disclosure as required under Section 22 of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

The Company has in place an Anti-Sexual Harassment Policy in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. The Internal Complaints Committee (“ICC") has been set up to redress the complaints received regarding sexual harassment. All employees are covered under this policy.

The following is the summary of the complaints received and disposed off during the financial year 2021-22:

a) No. of complaints filed during the year: NIL

b) No. of complaints disposed during the year: NIL

c) No. of complaints pending as at end of the financial year: NIL

27. Listing Fees

The Company confirms that it has paid the annual listing fees for the year 202122 to both the National Stock Exchange of India Limited and BSE Limited.

28. Certifications

Your Directors would like to appreciate the achievements of the Quality Department, which enabled your Company to get certified at CMMi level 5 by CMMI Institute, USA for its Global Consumer Banking (iGCB) business. Your Directors would also like to appreciate the achievements of Cards Business team and Corporate Security Group for PCI - DSS certification, and the achievements of iSEEC business team and Corporate Security Group for SOC 2 certification for Insurance products.


29. Acknowledgment

Your Directors take this opportunity to express the gratitude to all investors, clients, vendors, Bankers, Regulatory and Government authorities, Stock Exchanges and business associates and all other stakeholders for their cooperation, encouragement and continued support extended to the Company. Your Directors also wish to place on record their appreciation to the Associates for their continuing support and unstinting efforts in ensuring an excellent allround operational performance at all levels.

By Order of the Board For Intellect Design Arena Limited

Place: Chennai Arun Jain

Date : May 5, 2022 Chairman and Managing Director

DIN:00580919


Mar 31, 2018

DIRECTORS1 REPORT

To the members,

We are pleased to present the 7th Annual Report on our business and operations for the year ended 31st March 2018, of Intellect Design Arena Limited (“Company"). This is our fourth year of business operations.

1. Results of operations (In Rs. Lakhs, except EPS data)

Standalone

Consolidated

Description

Year ended March 31

2018

2017

2018

2017

Income (Including Other Income)

702,81.50

548,43.56

1,113,96.89

947,70.28

Expenses (Including exceptional items)

628,89.52

571,45.46

1,014,90.89

938,37.23

Profit/(Loss) before Interest, Depreciation & Tax (PBIDTA)

73,91.98

(23,01.90)

99,06.00

9,33.06

Finance Charges

13,73.13

10,52.30

13,82.62

11,30.24

Depreciation & amortization

25,13.54

22,60.71

26,53.49

24,13.99

Net Profit/(Loss) Before Tax

35,05.31

(56,14.91)

58,69.89

(26,11.17)

Provision for tax including

Deferred Tax

2,20.43

-

7,02.98

2,83.63

Net Profit/(Loss) after tax

32,84.88

(56,14.91)

51,66.91

(28,94.79)

Add / (Less): Share of Profit / (Loss) on Associate Companies

-

-

5,04.05

6,56.22

Net Profit / (Loss)

32,84.88

(56,14.91)

56,70.96

(22,38.58)

Re-measurement gains/(losses) on defined benefit plans

37.60

(1,87.44)

(11.99)

(1,94.16)

Exchange differences on translation of foreign operations

-

-

13,33.54

(13.99.70)

Net movement on cash flow hedges

(18,14.18)

12,23.97

(18,14.18)

12,23.97

Other comprehensive income for the year, net of tax

(17,76.58)

10,36.53

(4,92.63)

(3,69.89)

Total comprehensive income for the year, net of tax

15,08.30

(45,78.38)

51,78.33

(26,08.47)

Attributable to : Equity shareholders of the Parent

-

-

4,17.98

(26,08.47)

Less: Non Controlling Interest

-

-

9,98.34

-

EPS

Basic Rs.

2.79

(5.24)

3.97

(2.09)

Diluted Rs.

2.72

(5.24)

3.87

(2.09)

Table No. 1.1

Function wise classification of statement of consolidated Profit and Loss

In Rs. lakhs

Year Ended

PARTICULARS

March 31,

March 31,

2018

2017

INCOME

Income from software product license and related services

1,087,29.07

913,57.50

EXPENDITURE

Software development expenses

548,98.30

463,26.00

Selling and marketing & General and administrative expenses

376,62.45

391,02.94

Research & Engineering expenses

72,44.46

71,92.08

Provision for Debts and Write Offs

10,60.48

12,33.16

Total Expenditure

1,008,65.69

938,54.18

EBITDA

78,63.38

(24,96.68)

Depreciation / Amortisation

26,53.49

24,13.99

Finance Charges

13,82.62

11,30.24

Profit / (Loss) before other income / minority interest

38,27.26

(60,40.91)

Other Income including exceptional items

20,42.65

32,35.56

Minority Interest / Share of profit / (loss ) of Associate Companies

5,04.05

6,56.24

Profit / (Loss) before tax

63,73.96

(21,49.11)

Provision for taxation

7,02.98

(2,83.63)

Year Ended

PARTICULARS

March 31,

March 31,

2018

2017

Profit / (Loss) after tax

56,70.98

(24,32.74)

Net movement on cash flow hedges & Exchange differences on translation of foreign operations

4,92.63

(1,75.73)

Total comprehensive income for the year, net of tax

51,78.35

(26,08.47)

Table No. 1.2

2. State of Company''s affairs

The consolidated revenue of the Company for the year ended March 31st, 2018 stood at Rs.1,087,29.07 lakhs as against Rs. 913,57.50 Lakhs for the previous year and delivered a growth of 19%. The consolidated Net Profit/(Loss) for the fiscal year ended March 31st, 2018 stood at Rs. (56,70.96) lakhs as against the previous year''s Net Profit/(Loss) of Rs.(22,38.58) Lakhs. The Consolidated Reserves and Surplus as of 31st March 2018 stood at Rs.784,34.19 Lakhs as against Rs. 547,47.69 Lakhs as of March 31st, 2017. For the financial year ended 2017-2018 the Company has not transferred any amount to the reserves.

3. Material Changes and Commitments

There were no material changes and commitments from the end of the financial year till the date of this report.

4. Subsidiaries

Details of Subsidiary Companies, Joint Ventures and Associate Companies, and their financial position.

Your Company has 23 (13 direct, and 10 step down) subsidiary companies and 3 Associate Companies for the financial year ended on March 31st, 2018. The information as required under the first proviso to sub-section (3) of Section 129 is given in Form AOC-1 in Annexure [1].

5. Cash & Cash Equivalents

Your Company''s has cash reserve of Rs. 170,01.20 lakhs.

6. Share Capital

The paid-up Capital of the Company was increased to Rs.62.76 Crs through share allotments made against exercise of Options (659,502 equity shares) under the ASOP Schemes and rights issue (23,135,710 equity share) comprising of 125,529,084 equity shares of Rs.5/- each as on March 31st, 2018.

The details of all the stock option plans, including terms of reference, and the requirements are set out in Annexure 2.

7. Corporate Governance

Your Company has been complying with the provisions of Corporate Governance as stipulated in SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations). A separate report on Corporate Governance along with Auditors'' certificate on compliance of the Corporate Governance norms as stipulated under Chapter IV of the Listing Regulations and Management Discussion & Analysis forming part of this report are provided elsewhere in this Annual Report.

8. Transfer to Investor Education and Protection Fund

As required under the provisions of Section 125 and other applicable provisions of Companies Act, 2013 (hereinafter “the Act"), dividends that remain unpaid/unclaimed for a period of seven years, are to be transferred to the account administered by the Central Government viz: Investor Education and Protection Fund (“IEPF"). Any person claiming to be entitled to the amount transferred to IEPF may apply to the Investor Education and Protection Fund Authority (IEPF Authority) by submitting an online application in Form IEPF-5 available on the website www.iepf.gov.in along with fee specified by the IEPF Authority.. The Company had not declared any dividend so far, hence the above provisions are not applicable to our Company. Keeping in view of the growth of the business your Director does not recommend any dividend for the financial year ended 2017 - 2018.

9. Conservation of energy, technology absorption, foreign exchange earnings and outgo

The particulars as prescribed under Section 134(3)(m) of the Act, read with Rule

8 of the Companies (Accounts) Rules, 2014, are set out in the Annexure 3 to this Report.

10. Particulars of employees

(a) The statement containing particulars of employees as required under Section 197(12) of the Act read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 forms part of this report. In terms of Section 136 of the Act the same is open for inspection during working hours at the Registered office of your company. A copy of this statement may be obtained by the members by writing to the Company Secretary of your Company.

(b) The Ratio of remuneration of each director to the median remuneration of the employees of the company and other details in terms of Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are forming part of this report as Annexure 4.

11. Directors'' responsibility statement as required under Section 134 (5) of the Companies Act, 2013

Pursuant to the provisions of Section 134(3)(c) of the Companies Act, 2013 the Directors of your company confirm that:

a) In the preparation of the Annual Accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

b) The Directors have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true'' and fair view of the state of affairs of the company at the end of the financial year and of the loss of the company for that period;

c) The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities.

d) The Directors have prepared the Annual Accounts on a “going concern basis".

e) The 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.

f) The Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

12. Board Meetings, Board of Directors, Key Managerial Personnel & Committees of Directors

(a) Board Meetings:

The Board of Directors of the Company met 9 times during the year 2017-18. The details of various Board Meetings are provided in the Corporate Governance Report. The gap intervening between two meetings of the board is as prescribed in the Act.

(b) Changes in Executive Directors & Key Managerial Personnel

During the year under review Mr. Arun Jain was re-appointed as a Managing Director of the Company at the 6th AGM held on 21st August, 2017 for a period of 3 years upto the conclusion of 9th AGM of the company to be held in the calendar year 2020.

(c) Re-Appointment

As per Article 34(l) of the Articles of Association of the Company, one third of the Directors were liable to retire by rotation at the 6th AGM of the Company held on 21st August 2017. Mr. Anil Kumar Verma, Director was liable to retire by rotation and offered himself for re-appointment and the same was approved by the members of the Company.

Mr. Anil Kumar Verma, who is also an executive director, was reappointed as executive director by the Board with effect from 1st February 2018 for a further period of 3 years, subject to the approval of the shareholders. The resolution for the said reappointment is forming part of the notice of this AGM.

(d) Independent Directors

Mr. V. Balaraman and Ms. Aruna Krishnamurthy Rao were re- appointed as Independent Directors at the 6th AGM held on 21st August, 2017 for a period of two (2) years and three (3) years respectively, upto the conclusion of 8th AGM and 9th AGM respectively. Mr. Arun Shekhar Aran was appointed as independent director at the 5th AGM held on 21st July 2016 for a period of three (3) years, till the conclusion of 8th Annual General meeting. No Directors resigned during the year 2017-2018.

The Company has received necessary declarations from each Independent Director of the Company under Section 149(7) of the Act, that they meet the criteria of independence as laid down in Section 149(6) of the Act.

(e) Details of remuneration to Directors: The information relating to remuneration of directors as required under Section 197(12) of the Act, is given elsewhere in the report.

(f) Board Committees

The Company has the following Committees of the Board:

1. Audit Committee

2. Nomination and Remuneration & Compensation committee

3. Stakeholders'' Relationship committee

4. Corporate Social Responsibility committee

5. Risk Management Committee

Sub-committees:

1. Share transfer Committee

The composition of each of the above Committees, their respective role and responsibility is as detailed in the Report of Corporate Governance.

The policy framed by the Remuneration and Compensation Committee under the provisions of Section 178(4) of the Act, is as below:

(g) Remuneration policy

The remuneration policy of the Company has been so structured in order to match the market trends of the IT industry. The Board in consultation with the Nomination and Remuneration & Compensation Committee decides the remuneration policy for Directors. The Company has made adequate disclosures to the members on the remuneration paid to Directors from time to time. Remuneration/ Commission payable to Directors is determined by the contributions made by the respective Directors for the growth of the Company.

The remuneration policy of the Company and other matters as required under Section 178 sub-section 3 of the Act is available. There has been no change in the policy since the last fiscal year. We affirm that the remuneration paid to the Directors is as per the terms laid out in the remuneration policy of the Company.

We blink of the Nomination and remuneration

policyhttps://www.intellectdesign.com/investor/corporate-governance.asp.

(h) Board Evaluation

As required under the provisions of Section 134(3)(p) and the Listing Regulations, the Board has carried out an annual performance evaluation of its own performance and that of its committees and individual directors and the manner in which such performance evaluation was carried out is as under:

The performance evaluation framework is in place and the performance of the board was evaluated by the board after seeking inputs from all the directors on the basis of criteria such as the board composition and structure, effectiveness of board processes, information and functioning, etc. .

The performance of the committees was evaluated by the board after seeking inputs from the committee members on the basis of criteria such as the composition of committees, effectiveness of committee meetings, etc.

The Board and the Nomination and Remuneration Committee reviewed the performance of individual directors on the basis of criteria such as exercise of responsibilities in a bona fide manner in the interest of the Company, striving to attend meetings of the Board of Directors/ Committees of which he/she is a member/ general meetings, participating constructively and actively in the meetings of the Board /committees of the Board etc.

In a separate meeting of independent directors, performance of no independent directors, the Chairman of the Company and the board as a whole was evaluated.

(i) Vigil Mechanism

The Company has established a whistle-blower policy and also established a mechanism for directors and employees to report their concerns. The details of the same is explained in the Corporate Governance Report.

(j) Related Party Transactions

All related party transactions that were entered during the financial year were on arm''s length basis and were in the ordinary course of business. There are no other materially significant related party transactions made by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of the Company at large.

The details of the related party transactions as required under Section 134(3)(h) r/w Rule 8 of the Companies (Accounts) Rules, 2014, is attached as Annexure [5].

13. Auditors

Statutory Auditors: S.R. Batliboi & Associates LLP, Chennai, Chartered Accountants who are the Financial Auditors of the Company hold office as statutory auditors until the conclusion of the 8th Annual General Meeting of the meeting to be held in the Calendar year 2019. Their appointment is subject to ratification by the members at the 7th Annual General Meeting. There are no qualification or adverse remarks in the Auditors Report for the financial year ended 31st March 2018.

Secretarial Auditors: Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, Secretarial Audit has been carried out by Mr. S Eshwar, Practising Company Secretary, and his report is annexed as Annexure [6]. There are no qualification or adverse remarks in the Secretarial Audit report for the financial year ended 31st March 2018.

14. Fixed Deposits

Our Company has not accepted any deposits during the financial year and as such, no amount of principal or interest was outstanding as on March 31, 2018.

15. Social Connect Ullas Trust

A Social initiative started in 1997 with an aim to integrate associates with the larger community to enable them to enjoy the bliss of working with young minds in the country continues to grow into a movement exemplifying the power of inclusive CSR. A seed of an idea sowed in 1997 to “ignite Young Minds" has grown into a movement across 5 states in the country powered by belief that we are making a difference! In its 20 year journey the Ullas movement has grown beyond our associate community to include committed partners to the cause of igniting young minds. These partners include family and friends of our associates, associates from our clients, Civil Society Organizations, and youth from colleges in the districts of Tamil Nadu all united by the common purpose of shaping the thinking of adolescent young students.

Over the 2 decades, Ullas has awarded merit scholarships to more than 54,000 students across Chennai, Delhi, Hyderabad, Mumbai and Pune. While the merit scholarships recognize their academic excellence, these “Young Achievers" as they are called, receive weekend enrichment programs aptly titled as SUMMIT, delivered by our associate community - through packaged modules of 5 interventions of 3 hours each - 15 magical hours per year over the four year period of the child''s association with Ullas. This academic year, over 6100 children from Corporation, Government and Government-Aided schools in five cities - Chennai, Delhi, Hyderabad, Mumbai, and Pune attended these intervention programs - that aid not just with life skills but also in designing their thinking. Under the rural re-connect program “Touch The Soil", 2.5 lakh young minds were ignited with the power of “CAN DO" and “Planning" with the active engagement and support of over 1800 volunteers across 105 districts in 5 states.

Ullas - Chennai

Ullas Trust celebrated its 20th Annual workshop on Sep 24th, 2017 at The Madras University Centenary Hall in Chennai. The workshop was all about Igniting Young Minds and celebrating our very own - Ullas Alumnus (our Higher Education Scholars) of over 200 since 2003. The workshop saw over 3000 grade IX, X and XI Ullas Young Achievers from 218 - Corporation, Government and Government-Aided schools, who not only participated in the aspirational “CAN DO" workshop but also were awarded the Ullas Young Achievers Merit Scholarships. Nearly 100 Ullas Alumnus (Ullas Higher Education Scholars) since

2003 came onstage to share their joy at being a part of the 2 decade celebration of “Being Ullas"! The workshop saw real life role models Smt. Valarmathi N, Deputy Director, PDMSA, Indian Space Research Organization; Shri. Ganesh Kumar, Executive Director, Reserve Bank of India; Dr. Ruchi Gupta, MD, MPH,

Associate Professor of Pediatrics and Medicine, Northwestern University Feinberg School of Medicine - share their life journey - events and incidents that shaped them, inspire and interact with the students. Continuing its endeavor of recognizing and Encouraging Excellence in Education (EEE), 3 schools one each from corporation, government, and government aided were awarded the EEE award. Associate volunteers conducted the weekend enrichment program (SUMMIT) across 7 venues in the city (including our corporate offices) covering over 3,684 young achievers from grade 9-12. As part of the Touch The Soil program, over 350 volunteers visited 445 schools in the 32 districts of TN, igniting over 1.68 lakh grade 9-12 students, conducting the Diary of Dreams and Planning workshop. A total of 4251 scholarships were given to toppers in grade 9 and 10 in the district schools. During this academic year Ullas inducted 63 Higher Education Scholars (25 professional stream, and 38 arts and science students) while continuing to support an overall of 220 Higher Education Scholars who come back as mentors to the incoming Ullas Young Achievers. These Higher Education Scholars not only inspire their juniors but also dazzle the associate mentors with their commitment and thirst to pay it forward! Ullas continues to sponsor Easy Learning English (ELE) program of Vidyarambam Trust (VT) for grade 6 to 8 students in over 25 schools in 5 districts of TN. Vidyarambam Akkas also deliver our SUMMIT interventions to over 1,500 grade 9 and 10 students in 21 schools, further extending the engagement with these young minds! In the spirit of partnering with likeminded partners to reach as many young minds in schools, Talent Quest for India Trust (TQI) a student volunteer body movement has taken the SUMMIT Level 1, 2, 3 and 4 interventions to over 10,000 students (grade 9,10, 11 and 12) in 27 schools, across 21 districts of TN, through their army of over 350 college student volunteers from nearly 50 different colleges. The third edition of Ullas Confluence was held in Feb 2018, to celebrate and recognize these young TQI volunteer mentors from various colleges across the districts who are giving back selflessly. Common purpose and intent unites these partners with Ullas in reaching not just the students from the urban schools but also rural schools enabling dreams and aspirations!

Ullas - Mumbai

Mumbai Ullas chapter conducted the “CAN DO" workshop on 2nd December at Mahakavi Kalidas Natyamandir, celebrating over 540 young achievers from 24 schools (14 Municipal and 10 Govt-Aided schools). The interactive workshop encouraged the students to dream big, and dream big with conviction. Associate volunteers including over 50 volunteers from our client partner -Morgan Stanley conducted SUMMIT in the chapter schools during the weekends - reaching out to a total of 1010 students between grade 9 and 10. As part of the Touch The Soil program, 111 volunteers visited 121 schools in 14 districts covering 18,912 grade 9 and 10 students with 1042 scholarships for the toppers in 9th and 10th, and conducting the Diary of Dreams and Planning workshop for the young minds.

Ullas - Hyderabad

In Hyderabad, 288 students enthusiastically participated in the Annual “CAN DO" Workshop on November 11th, 2017. The Young Achievers enthralled everyone with their rendering of Saraswathi Vandanam and cultural performances. The Diary of Dreams workshop was very interactive and enabled students to share their aspirational dreams. SUMMIT classes also saw our associate volunteers conduct the weekend intervention program for 288 grade

9 students and 271 grade 10 students at 9 school chapters. As part of the Touch the Soil initiative, over 112 associate volunteers, their family and friends went in teams to 219 schools in 32 districts conducting the “CAN DO" and Planning workshop for 32,027 students, along with 1979 merit scholarships for deserving grade 9 and 10 students.

Ullas - Delhi

Ullas NCR chapter conducted the Annual CAN DO workshop on 18th November

2017, at Chinmaya Mission, New Delhi. 267 grade 9 young achievers from 20 government and government-aided schools were inducted into the portals of Ullas Trust. The workshop also saw 45 associate volunteers who cheered and supported the young achievers. The weekend enrichment program - SUMMIT was conducted by our associate volunteers in school chapters and our corporate office for over 800 young achievers (grade 9 to 12) and was received very well by the students and their school authorities. As part of the Touch The Soil initiative, 37 volunteers travelled to 14 districts of NCR, reaching 11,639 students of grade 9-12 from 41 schools, inspiring and igniting young minds delivering the Diary the Diary of Dreams workshop and Planning workshop, and also with a merit scholarship to 355 toppers in 9th and 10th.

Ullas - Pune

Ullas Pune Chapter continued its engagement with 4 schools this year. The Annual Diary of Dreams workshop was conducted on Dec 2nd, 2017 for incoming young achievers, covering over 200 eager students across three locations. A total of 80 scholarships were awarded in the urban schools as part of the SUMMIT program. Associate volunteers along with family and friends conducted the subsequent weekend enrichment programs in the schools over 8 weekends, covering over 800 grade 9 and 10 students. As part of the Touch The Soil initiative, 40 volunteers went to 8 districts covering 66 district schools, reaching 12236 students from grade 9 and 10 with the diary of dreams and planning workshop. 606 scholarships were given to 5 toppers each from grade 9 and 10 in these 53 schools.

Stepping into its 21st year, the Ullas movement continues to be strengthened not just by our associates but also their family and friends, and strong like-minded partners driven by the common purpose of “igniting young minds" and seeding the “CAN DO" spirit.

16) Audit Committee Recommendation

During the year all the recommendations of the Audit Committee were accepted by the Board. The Composition of the Audit Committee is as described in the Corporate Governance Report.

17) Extract of Annual Return

The details forming part of the extract of the Annual Return in Form MGT 9 is annexed herewith as Annexure [7].

18) Significant & Material Orders passed by the Regulators or Courts

During the Financial Year 2017-18, no order has been passed by any regulatory authorities or Courts.

19) Particulars of Loans, Guarantees and Investments u/s 186*

Investments made during the year 2017-18:

SL.

no.

Name of the Investee

Currency

Face

Value

Amount in FCY

Amount in Lacs

1

Intellect Design Arena Pte Ltd, Singapore

SGD

1

1,418,000

655.19

2

Intellect Design Arena Limited, Kenya

KSHS

1000

20,770,000

131.98

Table No. 1.3

* The Company has not granted Loans and Guarantees under Section 186 of the Companies Act, 2013

20) Risk Management Policy

Being a pioneer in the Intellectual property led Business in India, the company is continuously focussing and committing itself to have a Risk Management system suited for the Products business. Every potential risk has designated risk owners who are responsible for risk treatment as per the Risk management policy.

Towards this, the Board has formed a Risk Management Committee with Directors, the Chief Financial Officer & the Chief Risk Officer as members of the committee. The Committee works to mitigate any inherent risks faced by the Business and to meet the increasing demand of Customer''s liability through different means within the overall framework listed below.

Risk Management Framework Objective

The Organization is subject to certain risks that may affect our ability to operate, may disrupt our business model due to changes in competitive landscape, changes in Technology which may render our capabilities obsolete, and thus hamper our ability to serve our customers and protect assets. These risks could adversely affect Customer projects, Employees, Shareholders, liability to Third Party and risks to Property among others. Controlling these risks through a formal process is necessary for the well being of the Organization and its stakeholders.

The organization''s Risk policy identifies these Risks on a continuous basis and proposes mitigation measures. Our risk policy aims to minimize adverse impact of these risks on Company''s growth, Profit margins and People engagement besides Regulatory Compliance. Risk Management has been made an integral part of the Organization by encouraging Risk Awareness among employees.

Risk Management Framework

The Audit Committee of the Board of Directors oversees the Risk Management process done by the Risk Committee under the overall direction of the Board of Directors. The Risk Management Committee consists of the Board of Directors, Chief Financial Officer & the Chief Risk Officer.

Risk Management Process

Risk Management is a continuous and developing process which runs throughout the Organization''s strategy and the implementation of that strategy. The Risk Management helps the organization to proactively manage uncertainties in the internal and external environment and to limit the negative impacts and benefit on the opportunities.

Some of the Major risks and risk mitigation measures can be grouped in the following four categories:

1. Business Risk

2. Operational Risk

3. Financial Risk

4. Legal & Compliance Risk

5. Risks Emanating from Data Privacy & Regulations

Business

Segment

Concentration

Recruitment -difficulty in finding specialized skill

Foreign

Exchange

Geo Subsidiary Compliance Reporting

Data Protection & Privacy

Business Model

New Country Entry Risk

Risk due to Large Order to Cash cycle and Liquidity Risk

Intellectual Property Protection Risk

Geography

Concentration

Use of “Open Source" Software

Internal

Financial

Control

(IFC)

implementation

Competition

Implementation

Challenges

Contractual

Compliance

Large Cycle Time for Sales

&

Implementation

Table No. 1.4

1. Business Risk

1.1. Business Segment Concentration

The company is specialized in BFSI space and could face the risk of concentration in a single space. However, this risk is mitigated to a large extent because the company has presence in all the 4 sub segments of BFSI namely Corporate Banking, Retail Banking, Capital Markets and Insurance. These 4 sub segments have different boom and bust cycle and therefore protect the company. The Company''s foray into the Payments space through iPay will further reduce this risk as Payments business is fairly stable business with less impact on cyclicity.

1.2 Business Model

Our Revenue model is based on Products Business with its License and AMC revenues. There is a possibility that increasing share of business starts to come from Cloud Model rather than License & AMC Model. This may pose a risk to our Business Model.

The Company keeps a close eye on the changing business scenario. A certain portion of our revenue is already derived from the Cloud model. Should Cloud model get precedence over License model, the company has the wherewithal to shift the business model.

1.3 Geographic Concentration

Intellect is present across different Geographies which we internally classify as World I, World II, World III countries. World I is Rich countries, World II is Middle Income countries and World III is the Emerging world. The risk gets mitigated by being present in all the three worlds as the demand from these countries varies across segments and balances the cyclic nature of business.

1.4 Competition

The company faces competition from large Multinational companies, local companies in the geography in which we operate and Indian Product companies. While many of these companies are established companies, the start ups may also disrupt our business.

With a view to stay ahead of the competition, an analysis of these competitions in the 4 sub-segments and the 3 Worlds is done on a continuous basis. Another lever to mitigate this risk is the Investments made in R&D which helps us to remain ahead in the innovation curve.

2. Operational Risk

2.1 Recruitment

The company operates in niche BFSI product space which requires people with specialized skill, as against mass recruitment that was followed in Services business. The Company minimizes the risk through in-depth in-house training & recruitment from top end Engineering colleges and B Schools.

Background Checks (BGC) is mandated for all new hirers and is audited from time to time.

2.2 New Country Entry Risk

For any new business opportunity in a new country, a Country risk assessment clearance from the CRO is a must. Country risk assessments during entry and subsequent mitigation measures help in developing a robust knowledge platform and also to understand the local conditions and business culture at the early stages of the business.

2.3 Use of "Open Source" Software

“Open Source" Software may be used in some of our solutions. Failure to abide with the terms of the open source licenses could have a negative impact on our business.

2.4 Implementation Challenges

Delays in implementation could hamper our delivery capabilities leading to multiple risks such as delay in Collection, Contractual commitments, Penalties and Brand image.

2.5 Large Cycle Time for Sales & Implementation

Our businesses have large sales & implementation cycles. Often they involve significant capital commitment by the Company. Resources are utilized to meet the customer''s requirements like completing Proof of Concept or customization. All this entails significant resources before full revenue is realised. In the event the Client opts out during the process of evaluation, this could have adverse effect on our operations.

3. Financial Risk

3.1 Foreign Exchange

The company earns a large portion of its revenue in foreign currencies and is exposed to the risk of currency movements. To mitigate this risk, the company follows a 2 step strategy.

• As the first step, quotation in foreign currencies is restricted to few selected major currencies. Quotation in any other currency is highly controlled.

- The second leg of this strategy is to hedge the foreign earnings after subtracting the local expenses.

3.2 Larger Order to Cash cycle and Liquidity Risk

Our customer being large Banks and Financial Institutions the credit worthiness is in comfort even though the cycle is long. The percentage of bad debts is also minimal. Since the Products business has a long order to cash cycle, the company has identified Liquidity Risk as an area to monitor. The Finance organization headed by the CFO monitors the liquidity position consisting of cash and near cash instruments on a continuous basis.

4. Legal & Compliance Risks

4.1 Subsidiary Compliance Reporting

A well-structured framework has been instituted in UnMail, the Company''s Enterprise Social Network for Subsidiary Compliance Reporting. The respective Operations Directors ensure uploading of the Compliance reports (suitably customized for each Subsidiary) on a quarterly basis. This process enhances the control and improves statutory compliance in each jurisdiction.

4.2 Intellectual Property Protection Risk

Difficulties in protecting out IP in some countries that are pivotal for generating revenues are mitigated by registration of the IP in countries that have safe IP protection laws.

4.3 Internal Financial Control (IFC)

The company has to comply with additional controls enforced by Section 134 of the Companies Act 2013. This is to report on the Internal Financial Control in the Directors Report and also by the Statutory Auditors. To comply with this, the company appointed a reputed Chartered Accountant firm to assess the existing control environment and ensure that the requirements are complied.

4.4 Contractual Compliance

Product development companies are exposed to legal risk arising from Infringement of IP right and Non performance of contractual obligation. The company has established a strong process to review and appraise all contracts. As a policy it restricts its obligation under each contract. The company has adequate Insurance to militate against risk of Errors and Omissions, Commercial General Liability.

5. Risks emanating from Data Privacy & Regulations

5.1 Data Protection & Privacy

New Regulations such as GDPR are evolving and may have impact that we cannot foresee today. Courts of different countries may interpret these laws differently. These may pose new type of risks for our business.

Countries such as US & India are in the process of developing regulations like GDPR. Full impact will be known in the coming years.

Risk Mitigation through Insurance

The company has appointed a Global leader for Risk & Insurance advisory to advice on the risk and insurance coverage. The following Insurance coverage is taken to mitigate risks.

1. Errors & Omissions Insurance - To safeguard against any loss arising of an error, negligent act or omission which would result in failure in performing the professional services or duties for others.

2. Cyber Liability Insurance - To safeguard against any loss arising out of a security breach and or privacy breach that would result in sensitive or unauthorized data or information being lost or compromised.

3. Crime Insurance - To safeguard against any direct financial loss of property, money or securities arising out the fraudulent activities committed by the employee or in collusion with others.

4. Directors & Officers Liability Insurance - To safeguard against any loss arising out of a wrongful act made by the Directors, Officers and Employees of the organization with reference to the company''s business operations and activities.

5. Commercial General Liability Insurance - To safeguard against Third Party bodily injury or property damage arising out of our business operations.

6. Standard Fire & Special Perils Insurance - To protect the company''s Assets (movable & immovable Assets) from the risk of Fire or Perils.

21) Corporate Social Responsibility

Company has formed Corporate Social Responsibility Committee on October 15th, 2014 and following are the members to the Committee :-

a) Mr. Anil Kumar Verma - Chairman of the Committee

b) Ms. Aruna Rao - Member of the Committee

c) Mr. Arun Jain - Member of the Committee

d) Mr. V. Balaraman - Member of the Committee

The Company is not required to contribute towards Corporate Social Responsibility (CSR), as the average profits of the previous three financial years is negative. However the Company as a responsible corporate citizen has emerged itself to make contributions in the area of education, to Ullas Trust. The Company for making contributions to Ullas Trust, had sought the approval of the shareholders in its previous AGM held on 21st July 2016 and the same was approved by the shareholders. The details of the policy developed and implemented by the Company is given as a part of annual report on CSR as Annexure 8

22) Disclosure as required under Section 22 of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

The Company has in place an Anti-Sexual Harassment Policy in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. The Internal Complaints Committee (“ICC") has been set up to redress the complaints received regarding sexual harassment. All employees are covered under this policy.

The following is the summary of the complaints received and disposed off during the financial year 2017-18:

a) No. of complaints received: NIL

b) No. of complaints disposed NIL

23) Listing Fees

The Company confirms that it has paid the annual listing fees for the year 201819 to both National Stock Exchange of India Limited and Bombay Stock Exchange Limited.

24) Certifications

Your Directors would like to appreciate the achievements of the Quality Department, which enabled your company to get certified at CMMi level 5 BY

CMMI Institute USA for its Digital Technology Platforms and also on ISO 27001:2013 (Information Security Management Systems.

25) Acknowledgment

Your Directors take this opportunity to express the gratitude to all investors, clients, vendors, bankers, Regulatory and Government authorities, Stock Exchanges and business associates for their cooperation, encouragement and continued support extended to the Company. Your Directors also wish to place on record their appreciation to the Associates for their continuing support and unstinting efforts in ensuring an excellent all round operational performance at all levels.

By Order of the Board For Intellect Design Arena Limited

Place: Chennai Arun Jain

Date : May 06, 2018 Chairman and Managing Director

DIN:00580919


Mar 31, 2017

DIRECTORS'' REPORT

To the members,

We are pleased to present the 6th Annual Report on our business and operations for the year ended 31st March 2017, of Intellect Design Arena Limited ("Company"). This is our third year of business operations.

1. Results of operations (In Rs. Lakhs, except EPS data)

Standalone

Consolidated

Description

Year ended March 31

2017

2016

2017

2016

income (Including Other

548,43.56

563,57.40

955,49.38

836,40.87

income)

Expenses (Including

571,45.46

528,85.95

946,16.32

847,90.74

exceptional items)

Profit/(Loss) before Interest,

(23,01.90)

34,71.45

9,33.06

(11,49.87)

Depreciation & Tax (PBIDTA)

Finance Charges

10,52.30

9.86

11,30.24

1,19.22

Depreciation & amortization

22,60.71

19,04.52

24,13.99

20,64.98

Net Profit/(Loss) Before Tax

(56,14.91)

15,57.07

(26,11.17)

(33,34.07)

Provision for tax including

-

(10,75.10)

2,83.63

(9,06.32)

Deferred Tax

Net Profit/(Loss) after tax

(56,14.91)

26,32.17

(28,94.80)

(24,27.75)

Add / (Less): Share of Profit /

6,56.22

82.76

Loss) on Associate Companies

Net Profit / (Loss)

(56,14.91)

26,32.17

(22,38.58)

(23,44.99)

Re-measurement gains/(losses)

(1,87.44)

(81.48)

(1,94.16)

(75.47)

on defined benefit plans

Exchange differences on

-

-

(13.99.70)

13,12.23

translation of foreign operations

Net movement on cash flow

12,23.97

1,13.00

12,23.97

1,13.00

hedges

Other comprehensive income

10,36.53

31.52

(3,69.89)

13,49.76

:or the year, net of tax

Total comprehensive income

(45,78.38)

26,63.69

(26,08.47)

(9,95.23)

for the year, net of tax

EPS

Basic Rs.

(5.56)

2.61

(2.21)

(2.33)

Diluted Rs.

(5.56)

2.50

(2.21)

(2.33)

Table No. 1.1

Function wise classification of statement of consolidated Profit and Loss _In Rs. lakhs

Year Ended

PARTICULARS

March 31,

March 31,

2017

2016

INCOME

Income from software product license and related services

913,57.50

810,65.55

EXPENDITURE

Software development expenses

463,26.00

395,00.01

Selling and marketing & General and administrative expenses

391,02.94

330,50.24

Research & Engineering expenses

71,92.08

106,29.77

Provision for Debts and Write Offs

12,33.16

9,79.62

Total Expenditure

938,54.18

841,59.64

EBITDA

(24,96.68)

(30,94.09)

Depreciation / Amortization

24,13.99

20,77.11

Finance Charges

11,30.24

1,19.22

Profit / (Loss) before other income / minority interest

(60,40.91)

(52,90.42)

Other Income including exceptional items

32,35.56

18,69.71

Minority Interest / Share of profit / (loss ) of Associate Companies

6,56.24

93.93

Profit / (Loss) before tax

(21,49.11)

(33,26.78)

Year Ended

PARTICULARS

March 31,

March 31,

2017

2016

Provision for taxation

(2,83.63)

9,06.32

Profit / (Loss) after tax

(24,32.74)

(24,20.46)

Net movement on cash flow hedges & Exchange differences on translation of

(1,75.73)

14,25.23

foreign operations

Total comprehensive income for the year, net of tax

(26,08.47)

(9,95.23)

Table No. 1.2

2. Business Performance

The consolidated revenue of the Company for the year ended March 31st, 2017 stood at Rs.913,57.50 lakhs as against Rs.810,65.55 Lakhs for the previous year and delivered a growth of 13%. The consolidated Net Profit/(Loss) for the fiscal year ended March 31st, 2017 stood at Rs.(24,32.74) lakhs as against the previous year''s Net Profit/(Loss) of Rs.(24,20.46) Lakhs. The Consolidated Reserves and Surplus as of 31st March 2017 stood at Rs.547,47.69 Lakhs as against Rs.560,92.84 Lakhs as of March 31st, 2016.

3. Material Changes and Commitments

There were no material changes and commitments from the end of the financial year till the date of this report.

4. Subsidiaries

Details of Subsidiary Companies, Joint Ventures and Associate Companies, and their financial position.

Your Company has 23 (12 direct, 1 JV and 10 step down) subsidiary companies and 2 Associate Companies for the financial year ended on March 31st, 2017. The information as required under the first proviso to sub-section (3) of Section 129 is given in Form AOC-1 in Annexure [1].

5. Cash & Cash Equivalents

Your Company''s has cash reserve of Rs.86,50.74 lakhs.

6. Share Capital

The paid up Capital of the Company was increased to Rs.50.87 Crs through share allotments made against exercise of Options under the ASOP Schemes comprising of 10,17,33,872 number of equity shares of Rs.5/-each as on March 31st, 2017.

The information as required under Rule 12(9) of the Companies (Share Capital and Debentures) Rules, 2014, and also the information required under the Guidance note of ICAI, in relation to ESOPs are set out in the Annexure 2 to the Directors'' Report.

The details of all the stock option plans, including terms of reference, and the requirement specified under Regulation 14 of the SEBI (Share-based Employee Benefits) Regulations, 2014 is available on the Company''s website, at https://www.intellectdesign.com/investor/corporate-governance.asp.

The Register of Members and Share Transfer books of the company will be closed with effect from 11th August, 2017 to 21st August, 2017 (both days inclusive).

7. Corporate Governance

Your Company has been complying with the provisions of Corporate Governance as stipulated in SEBI(Listing Obligations and Disclosure Requirements) Regulations, 2015. A separate report on Corporate Governance along with Auditors'' certificate on compliance of the Corporate Governance norms as stipulated under Regulation 27 of the Listing Regulations and Management Discussion & Analysis forming part of this report are provided elsewhere in this Annual Report.

8. Transfer to Investor Education and Protection Fund

Disclosure as required under Section II (IV) Part II of Schedule V of Companies Act, 2013

Name of Director, Managing Director or Executive Director

Anil Kumar Verma - Executive Director

Arun Jain -Managing Director

V.Balaraman -Independent Director

Aruna Krishnamurthy Rao -Independent Director

Arun Shekhar

Sl.No

Particulars

Aran -

Independent

Director

1

Salary

120.00

NIL

NIL

NIL

NIL

Benefits and bonuses

NIL

NIL

NIL

NIL

NIL

Stock Option

2,05,000*

NIL

25,000*

NIL

NIL

Pension

NIL

NIL

NIL

NIL

NIL

2

Fixed component

NIL

NIL

NIL

NIL

NIL

Performance linked incentive

NIL

NIL

NIL

NIL

NIL

and performance criteria

3

Service Contract of the Director

NIL

NIL

NIL

NIL

NIL

Notice Period of the Director

NIL

NIL

NIL

NIL

NIL

Severance fees

NIL

NIL

NIL

NIL

NIL

4

Details of stock option and

NIL

NIL

NIL

NIL

NIL

Discount details, if any

No, of Stock options accrued

NIL

NIL

NIL

NIL

NIL

No. of Stock options

NIL

NIL

NIL

NIL

NIL

exercisable

Table No. 1.3 * No. of stock options.

As required under the provisions of Section 125 and other applicable provisions of Companies Act, 2013, dividends that remain unpaid/unclaimed for a period of seven years, are to be transferred to the account administered by the Central Government viz: Investor Education and Protection Fund ("IEPF"). Once the amounts that are due for refund are transferred to the IEPF, no claim shall lie in respect of those amounts against the Company. The Company had not declared any dividend so far, hence the above provisions are not applicable to our Company.

9. Conservation of energy, technology absorption, foreign exchange earnings and outgo

The particulars as prescribed under Section 134(3)(m) of the Act, read with Rule 8 of the Companies (Accounts) Rules, 2014, are set out in the Annexure 3 to this Report.

10. Particulars of employees

Information pursuant to the provisions of Rules 5(2) & 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are attached to this Report in Annexure [4]. Rule 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, exempts from inclusion, the particulars of employees posted and working outside India not being directors or their relatives, drawing more than Rs. 1.02 Crore per financial year or Rs. 8.5 lakhs per month, but requires such particulars shall be furnished to the Registrar of Companies. Hence, the statement included in Annexure [4] does not contain the particulars of employees who are posted and working outside India. Any Member interested in obtaining a copy of such details may write to the Company in this regard.

11. Directors'' responsibility statement as required under Section 134 (5) of the Companies Act, 2013

Pursuant to the provisions of Section 134(3)(c) of the Companies Act, 2013 the Directors of your company confirm that:

a) In the preparation of the Annual Accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

b) The Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true'' and fair view of the state of affairs of the company at the end of the financial year and of the loss of the company for that period;

c) The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities.

d) The Directors have prepared the Annual Accounts on a "going concern basis".

e) The Board of 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.

f) The Board of Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

12. Board Meetings, Board of Directors, Key Managerial Personnel & Committees of Directors

(a) Board Meetings:

The Board of Directors of the Company met 8 times during the year 2016 17. The details of various Board Meetings are provided in the Corporate Governance Report. The gap intervening between two meetings of the board is as prescribed in the Companies Act, 2013 (hereinafter "the Act").

(b) Changes in Directors & Key Managerial Personnel

The following changes have happened during the Financial Year 2016-17

1) Dr. Ashok Jhunjhunwala resigned from the Board of the Company on February 03, 2017.

2) Mr. Arun Shekhar Aran was appointed as Additional Director by the Board at its meeting held on 03rd May, 2016 and subsequently was appointed as Independent Director by the shareholders at the Annual General meeting held on 21st July,2016

(c) Re-Appointment

As per Article 34(1) of the Articles of Association of the Company, one third of the Directors are liable to retire by rotation at the Annual General Meeting of the Company. Mr. Anil Kumar Verma, Director is liable to retire by rotation and offers himself for re-appointment

(d) Independent Directors

Mr. V.Balaraman and Ms. Aruna Krishnamurthy Rao were appointed as independent directors at the 3rd AGM held on 17th September 2014 and at the EGM held on 9th October 2014, respectively for a period of three

(3) years, who will continue to be on the Board till the conclusion of 6th Annual General Meeting scheduled to be held on 21st August 2017. Mr. Arun Shekhar Aran was appointed as independent director at the 5th Annual General meeting held on 21st July 2016 for a period of three (3) years, till the conclusion of 8th Annual General meeting

The Company has received necessary declarations from each Independent Director of the Company under Section 149(7) of the Act, that they meet the criteria of independence as laid down in Section 149(6) of the Act.

(e) Details of remuneration to Directors: The information relating to remuneration of directors as required under Section 197(12) of the Act, is given in Annexure [5].

(f) Board Committees

The Company has the following Committees of the Board:

1. Audit Committee

2. Nomination and Remuneration & Compensation committee

3. Stakeholders'' Relationship committee

4. Corporate Social Responsibility committee

5. Risk Management Committee

Sub-committees:

1. Share transfer Committee

The composition of each of the above Committees, their respective role and responsibility is as detailed in the Report of Corporate Governance.

The policy framed by the Remuneration and Compensation Committee under the provisions of Section 178(4) of the Act, is as below:

(g) Remuneration policy

The remuneration policy of the Company has been so structured in order to match the market trends of the IT industry. The Board in consultation with the Nomination and Remuneration & Compensation Committee decides the remuneration policy for Directors. The Company has made adequate disclosures to the members on the remuneration paid to Directors from time to time. Remuneration/ Commission payable to Directors is determined by the contributions made by the respective Directors for the growth of the Company.

The Policy of the Company on Director''s appointment and remuneration, including criteria for determining qualifications, positive attributes, independence of a Director and other matters as required under Section 178 sub-section 3 of the Companies Act, 2013 is available. There has been no change in the policy since the last fiscal year. We affirm that the remuneration paid to the Directors is as per the terms laid out in the nomination and remuneration policy of the Company.

(h) Board Evaluation

As required under the provisions of Section 134(3)(p) and Regulation 27 of the Listing Regulations, the Board has carried out an annual performance evaluation of its own performance, and the manner in which such performance evaluation was carried out is as under:

The performance evaluation framework is in place and has been circulated to all the directors to seek their response on the evaluation of the entire Board and independent directors. The Nomination and Remuneration & Compensation Committee has carried out evaluation of director''s performance.

The criteria of evaluation is exercise of responsibilities in a bona fide manner in the interest of the Company, striving to attend meetings of the Board of Directors/ Committees of which he/she is a member/ general meetings, participating constructively and actively in the meetings of the Board /committees of the Board etc.

(i) Vigil Mechanism

The Company has established a whistle-blower policy and also established a mechanism for directors and employees to report their concerns. The details of the same is explained in the Corporate Governance Report.

(j) Related Party Transactions

All related party transactions that were entered into during the financial year were on an arm''s length basis and were in the ordinary course of business. There are no other materially significant related party transactions made by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of the Company at large.

The details of the related party transactions as required under Section 134(3)(h) r/w Rule 8 of the Companies (Accounts) Rules, 2014, is attached as Annexure [6].

13. Auditors

Financial Auditors: S.R. Batliboi & Associates LLP, Chennai, Chartered Accountants who are the Financial Auditors of the Company hold office as financial auditors until the conclusion of the 8th Annual General Meeting of the meeting to be held in the Calendar year 2019. Their appointment is subject to ratification by the members at the 6th Annual general meeting. Secretarial Audit: Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, Secretarial Audit has been carried out by Mr. S Eshwar, Practicing Company Secretary, and his report is annexed as Annexure [7].

14. Fixed Deposits

Our Company has not accepted any deposits during the financial year and as such, no amount of principal or interest was outstanding as on March 31, 2017.

15. Social Connect

Ullas Trust

A Social initiative started in 1997 with an aim to integrate associates with the larger community to enable them to enjoy the bliss of working with young minds in the country continues to grow into a movement exemplifying the power of inclusive CSR. In its 20 year journey the Ullas movement has grown beyond our associate community to include committed partners to the cause of igniting young minds. These partners include family and friends of our associates, associates from our clients, Civil Society Organizations, and youth from colleges in the districts of Tamil Nadu all united by the common purpose of shaping the thinking of adolescent young students.

Over the 2 decades, Ullas has awarded merit scholarships to more than 52,000 students across Chennai, Delhi, Hyderabad, Mumbai and Pune. While the merit scholarships recognize their academic excellence, these "young achievers" as they are called, receive weekend enrichment programs aptly titled as SUMMIT delivered by our associate community -through packaged modules of 5 interventions of 3 hours each - 15 magical hours per year over the four year period of the child''s association with Ullas. This academic year, over 6200 children from Corporation, Government and Government-Aided schools in five cities - Chennai, Delhi, Hyderabad, Mumbai, and Pune attended these intervention programs -that aid not just with life skills but also in design thinking. Under the rural re-connect program "Touch The Soil", over 2 lakh young minds were ignited with the power of "CAN DO" and "Planning" with the active engagement and support of over 1600 volunteers across 82 districts in 5 states.

Ullas - Chennai

Ullas Trust celebrated its 19th Annual workshop on Sep 3rd, 2016 at The Music Academy Auditorium in Chennai. The workshop was all about Igniting Young Minds and celebrated over 1230 grade IX Ullas Young

Achievers from 218 - Corporation, Government and Government-Aided schools, who not only participated in the aspirational "CAN DO" workshop but also were awarded the Ullas Young Achievers Scholarships. The workshop saw real life role models Mr. Sunil Paliwal, IAS (MD-Aavin, Cooperative Milk Federation, Tamil Nadu), and Dr. Sankar (Pediatric Orthopedic Surgeon) - share their life journey - events and incidents that shaped them, inspire and interact with the students. Continuing its endeavor of recognizing and Encouraging Excellence in Education (EEE), 3 schools one each from corporation, government, and government aided were awarded the EEE award. Associate volunteers conducted the weekend enrichment program (SUMMIT) across 7 venues in the city (including our corporate offices) covering over 3,752 young achievers from grade 9-12. As part of the Touch The Soil program, over 400 volunteers visited 403 schools in the 32 districts of TN, igniting over 1.51 lakh grade 912 students, conducting the Diary of Dreams and Planning workshop. A total of 3579 scholarships were given to toppers in grade 9 and 10 in the district schools. During this academic year Ullas inducted 68 Higher Education Scholars (26 professional stream, and 42 arts and science students) while continuing to support an overall of 198 Higher Education Scholars who come back as mentors to the incoming Ullas Young Achievers. These Higher Education Scholars not only inspire their juniors but also dazzle the associate mentors with their commitment and thirst to give back! Ullas continues to sponsor Easy Learning English (ELE) program of Vidyarambam Trust (VT) for grade 6 to 8 students in over 25 schools in 5 districts of TN. Vidyarambam Akkas also deliver our SUMMIT interventions to over 2,500 grade 9 and 10 students in these schools, further extending the engagement with these young minds! In the spirit of partnering with likeminded partners to reach as many young minds in schools, Talent Quest for India (TQI) a student volunteer body movement has taken the SUMMIT Level 1, 2 and 3 interventions to over 7,200 students (grade 9,10 and 11) in 19 schools, across 15 districts of TN, through their army of over 250 college student volunteers from 32 different colleges. The second edition of Ullas Confluence was held in Feb 2017, to celebrate and recognize these young TQI volunteers from various colleges across the districts who are giving back selflessly. Common purpose and intent unites these partners with Ullas in reaching not just the students from the urban schools but also rural schools enabling dreams and aspirations!

Ullas - Mumbai

Mumbai Ullas chapter conducted the "CAN DO" workshop on 26th November at Damodar Hall, Parel, celebrating over 530 young achievers from 23 schools (13 Municipal and 10 Govt-Aided schools). The interactive workshop encouraged the students to dream big, and dream big with conviction. Associate volunteers including over 50 volunteers from our client partner - Morgan Stanley conducted SUMMIT in the chapter schools during the weekends - reaching out to a total of 1029 students between grade 9 and 10. As part of the Touch The Soil program, 98 volunteers visited 85 schools in 32 talukas of 10 districts covering 13,404 grade 9 and 10 students with 650 scholarships for the toppers in 9th and 10th, and conducting the Diary of Dreams and Planning workshop for the young minds.

Ullas - Hyderabad

In Hyderabad, 280 students enthusiastically participated in the Annual "CAN DO" Workshop on January 7th, 2017 which was held at Sardar Patel Auditorium, in Kesava Memorial Institute of Science and Technology. The Young Achievers enthralled everyone with their rendering of Saraswathi Vandanam and cultural performances. The Diary of Dreams workshop was very interactive and enabled students to share their aspirational dreams. SUMMIT classes also saw our associate volunteers conduct the weekend intervention program for 280 grade 9 students and 254 grade 10 students at 9 school chapters. As part of the Touch the Soil initiative, over 80 associate volunteers, their family and friends went in teams to 167 schools from 56 talukas, in 21 districts conducting the "CAN DO" and Planning workshop for 22,125 students, along with 1428 merit scholarships for deserving grade 9 and 10 students.

Ullas - Delhi

Ullas NCR chapter conducted the Annual CAN DO workshop on 19th November 2016, at ISKCON Auditorium, New Delhi. 262 grade 9 young achievers from 20 government and government-aided schools were inducted into the portals of Ullas Trust. The workshop also saw over 40 school teachers and 50 associate volunteers who cheered and supported the young achievers. The weekend enrichment program - SUMMIT was conducted by our associate volunteers in school chapters and our corporate office for over 874 young achievers (grade 9 to 12) and was received very well by the students and their school authorities. As part of the Touch The Soil initiative, over 40 volunteers travelled to 19 mandals, in 12 districts of NCR, reaching 9,506 students of grade 9-12 from 32 schools, inspiring and igniting young minds delivering the Diary of Dreams workshop and Planning workshop, and also with a merit scholarship to 295 toppers in 9th and 10th.

Ullas - Pune

Ullas Pune Chapter continued its engagement with 4 schools this year. The Annual Diary of Dreams workshop was conducted on Nov 26th, 2016 for incoming young achievers, covering over 200 eager students across three locations. A total of 81 scholarships were awarded in the urban schools as part of the SUMMIT program. 25 volunteers along with family and friends conducted the subsequent weekend enrichment programs in the schools over 8 weekends, covering over 860 grade 9 and 10 students. As part of the Touch The Soil initiative, 27 volunteers went to 21 talukas in 7 districts covering 53 district schools, reaching 10,072 students from grade 9 and 10 with the diary of dreams and planning workshop. 470 scholarships were given to 5 toppers each from grade 9 and 10 in these 53 schools.

The Ullas movement continues to be strengthened not just by our associates but also their family and friends, and strong long minded partners driven by the common purpose of "igniting young minds" and seeding the "CAN DO" spirit.

16) Audit Committee Recommendation

During the year all the recommendations of the Audit Committee were accepted by the Board. The Composition of the Audit Committee is as described in the Corporate Governance Report.

17) Extract of Annual Return

The details forming part of the extract of the Annual Return in Form MGT 9 is annexed herewith as Annexure [8].

18) Significant & Material Orders passed by the Regulators or Courts

During the Financial Year 2016-17, no order has been passed by any regulatory authorities or Courts.

19) Particulars of Loans, Guarantees and Investments u/s 186* Investments made during the year 2015-16:

SL.

no.

Name of the Investee

Currency

Face

Value

Amount in FCY/INR

Amount in Lacs

1.

Intellect Payments Limited

INR

5

2,50,00,000

2,50.00

Table No. 1.4

* The Company has not granted Loans and Guarantees under Section 186 of the Companies Act, 2013

20) Risk Management Policy

Being a pioneer in the Intellectual property led Business in India, the company is continuously focusing and committing itself to have a Risk Management system suited for the Products business.

Towards this, the Board has formed a Risk Management Committee with Directors, the Chief Financial Officer & the Chief Risk Officer as members of the committee. The Committee works to mitigate any inherent risks faced by the Business and to meet the increasing demand of Customer''s liability through different means within the overall framework listed below.

Risk Management Framework

Objective

The Organization is subject to certain risks that may affect our ability to operate, may disrupt our business model due to changes in competitive landscape, changes in Technology which may render our capabilities obsolete, and thus hamper our ability to serve our customers and protect assets. These risks could adversely affect Customer projects, Employees, Shareholders, liability to Third Party and risks to Property among others. Controlling these risks through a formal process is necessary for the well being of the Organization and its stakeholders.

The organization''s Risk policy identifies these Risks on a continuous basis and proposes mitigation measures. Our risk policy aims to minimize adverse impact of these risks on Company''s growth, Profit margins and People engagement besides Regulatory Compliance. Risk Management has been made an integral part of the Organization by encouraging Risk Awareness among employees.

Risk Management Framework

The Audit Committee of the Board of Directors oversees the Risk Management process done by the Risk Committee under the overall direction of the Board of Directors. The Risk Management Committee consists of the Board of Directors, Chief Financial Officer & the Chief Risk Officer.

Risk Management Process

Risk Management is a continuous and developing process which runs throughout the Organization''s strategy and the implementation of that strategy. The Risk Management helps the organization to proactively manage uncertainties in the internal and external environment and to limit the negative impacts and benefit on the opportunities.

Some of the Major risks and risk mitigation measures can be grouped in the following four categories:

1. Business Risk

2. Operational Risk

3. Financial Risk

4. Legal & Compliance Risk

Business

Segment

Concentration

Recruitment -difficulty in finding specialized skill

Foreign

Exchange

Geo Subsidiary Compliance Reporting

Business Model

New Country Entry Risk

Risk due to Large Order to Cash cycle and Liquidity Risk

Intellectual Property Protection Risk

Geography

Concentration

Commercial General Liability, Cyber & Crime

Internal Financial Control (IFC) implementation

Competition

Risk from actions of Directors and Officers

Contractual

Compliance

Risk due to Fire Hazards and Accident

Table No. 1.5 1. Business Risk

1.1. Business Segment Concentration

The company is specialized in BFSI space and could face the risk of concentration in a single space. However, this risk is mitigated to a large extent because the company has presence in all the 4 sub segments of BFSI namely Corporate Banking, Retail Banking, Capital Markets and Insurance. These 4 sub segments have different boom and bust cycle and therefore protect the company. The Company''s foray into the Payments space through iPay will further reduce this risk as Payments business is a fairly stable business with less impact of cyclicity.

1.2 Business Model

Our Revenue model is based on Products Business with its License and AMC revenues. There is a possibility that increasing share of business starts to come from Cloud Model rather than License & AMC Model. This may pose a risk to our Business Model.

The Company keeps a close eye on the changing business scenario. A certain portion of our revenue is already derived from the Cloud model. Should Cloud model get precedence over License model, the company has the wherewithal to shift the business model.

1.3 Geographic Concentration

Intellect is present across different Geographies which we internally classify as World I, World II, World III countries. World I is Rich countries, World II is Middle Income countries and World III is the Emerging world. The risk gets mitigated by being present in all the three worlds as the demand from these countries varies across segments and balances the cyclic nature of business.

1.4 Competition

The company faces competition from large Multinational companies, Local companies in the geography in which we operate and Indian Product companies. While many of these companies are established companies, the start ups may also disrupt our business.

With a view to stay ahead of the competition, an analysis of these competitions in the 4 sub-segments and the 3 Worlds is done on a continuous basis. Another lever to mitigate this risk is the Investments made in R&D which helps us to remain ahead in the innovation curve.

2. Operational Risk

2.1 Recruitment

The company operates in niche BFSI product space which requires people with specialized skill, as against mass recruitment that was followed in Services business. The Company minimizes the risk through in-depth in-house training & recruitment from top end Engineering colleges and B Schools.

Background Checks (BGC) is mandated for all new hirers and is audited from time to time.

2.2 New Country Entry Risk

For any new business opportunity in a new country, a Country risk assessment clearance from the CRO is a must. Country risk assessments during entry and subsequent mitigation measures help in developing a robust knowledge platform and also to understand the local conditions and business culture at the early stages of the business.

2.3 Commercial General Liability, Cyber & Crime

The company has a Global leader in Risk & Insurance advisory for advising on the risk and insurance coverage.

- Commercial General Liability Insurance - To safeguard against Third Party bodily injury or property damage arising out of our business operations.

- Cyber Liability Insurance - To safeguard against any loss arising out of a security breach and or privacy breach that would result in sensitive or unauthorized data or information being lost or compromised.

- Crime Insurance - To safeguard against any direct financial loss of property, money or securities arising out the fraudulent activities committed by the employee or in collusion with others.

2.4 Risks from actions of Directors and Officers

Directors & Officers Liability Insurance - To safeguard against any loss arising out of a wrongful act made by the Directors, Officers and Employees of the organization with reference to the company''s business operations and activities.

2.5 Risks due to Fire Hazards & Accidents

Standard Fire and Special Perils Insurance - To protect the company''s Assets (movable & immovable Assets) from the risk of Fire or Perils.

3. Financial Risk

3.1 Foreign Exchange

The company earns a large portion of its revenue in foreign currencies and is exposed to the risk of currency movements. To mitigate this risk, the company follows a 2 step strategy.

- As the first step, quotation in foreign currencies is restricted to few selected major currencies. Quotation in any other currency is highly controlled.

- The second leg of this strategy is to hedge the foreign earnings after subtracting the local expenses.

3.2 Larger Order to Cash cycle and Liquidity Risk

Our customer being large Banks and Financial Institutions the credit worthiness is in comfort even though the cycle is long. The percentage of bad debts is also minimal. Since the Products business has a long order to cash cycle, the company has identified Liquidity Risk as an area to monitor. The Finance organization headed by the CFO monitors the liquidity position consisting of cash and near cash instruments on a continuous basis.

4. Legal & Compliance Risks

4.1 Subsidiary Compliance Reporting

A well structured framework has been instituted in Unmail, the Company''s Enterprise Social Network for Subsidiary Compliance Reporting. The respective Operations Directors ensure uploading of the Compliance reports (suitably customized for each Subsidiary) on a quarterly basis. This process enhances the control and improves statutory compliance in each jurisdiction.

4.2 Intellectual Property Protection Risk

Difficulties in protecting out IP in some countries that are pivotal for generating revenues are mitigated by registration of the IP in countries that have safe IP protection laws.

4.3 Internal Financial Control (IFC)

The company has to comply with additional controls enforced by Section 134 of the Companies Act 2013. This is to report on the Internal Financial Control in the Directors Report and also by the Statutory Auditors. To comply with this, the company appointed a reputed Chartered Accountant firm to assess the existing control environment and ensure that the requirements are complied.

4.4 Contractual Compliance

Product development companies are exposed to legal risk arising from Infringement of IP right and Non performance of contractual obligation. The company has established a strong process to review and appraise all contracts. As a policy it restricts its obligation under each contract. The company has adequate Insurance to mitigate against risk of Errors and Omissions, Commercial General Liability.

21) Corporate Social Responsibility

Company has formed Corporate Social Responsibility Committee on October 15th, 2014 and following are the members to the Committee :-

a) Mr. Anil Kumar Verma - Chairman of the Committee

b) Ms. Aruna Rao - Member of the Committee

c) Mr. Arun Jain - Member of the Committee

d) Mr. V. Balaraman - Member of the Committee

The Company is not required to contribute towards Corporate Social Responsibility (CSR), as the average profits of the previous three financial years is negative. However the Company as a responsible corporate citizen has emerged itself to make contributions in the area of education, to Ullas Trust. The Company for making contributions to Ullas Trust, had sought the approval of the shareholders in its previous AGM held on 21st July 2016 and the same was approved by the shareholders.

22) Disclosure as required under Section 22 of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

The Company has in place an Anti Sexual Harassment Policy in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. The Internal Complaints Committee ("ICC") has been set up to redress the complaints received regarding sexual harassment. All employees are covered under this policy. The following is the summary of the complaints received and disposed off during the financial year 2016-17:

a) No. of complaints received: NIL

b) No. of complaints disposed NIL

23) Listing Fees

The Company confirms that it has paid the annual listing fees for the year 2017-18 to both National Stock Exchange of India Limited and Bombay Stock Exchange Limited.

24) Acknowledgment

Your Directors take this opportunity to express the gratitude to all investors, clients, vendors, bankers, Regulatory and Government authorities, Stock Exchanges and business associates for their cooperation, encouragement and continued support extended to the Company. Your Directors also wish to place on record their appreciation to the Associates for their continuing support and unstinting efforts in ensuring an excellent all round operational performance at all levels.

By Order of the Board

For Intellect Design Arena Limited

Place: Chennai Arun Jain

Date : July 06, 2017 Chairman and Managing Director


Mar 31, 2016

We are pleased to present the 5th Annual Report on our business and operations for the year ended 31st March 2016, of Intellect Design Arena Limited ("Company"). This is our second year of business operations.

1. Results of operations (Rs. in Lakhs, except EPS data)

Standalone Consolidated

Description Year ended March 31

2016 2015 2016 2015

Income (Including Other 563,67.39 475,14.17 836,75.99 636,27.76 Income)

Expenses (Including 522,58.89 531,87.03 841,84.71 698,82.27 exceptional items)

Profit/(Loss) before Interest, 41,08.50 (56,72.86) (5,08.72) (62,54.51) Depreciation & Tax (PBIDTA)

Finance Charges 9.86 - 1,19.22 80.78

Depreciation & amortization 19,04.52 17,05.68 20,77.11 19,01.27

Net Profit/(Loss) Before Tax 21,94.12 (73,78.54) (27,05.05) (82,36.56)

Provision for tax including (10,75.10) (2,60.99) (9,06.32) 1,75.84 Deferred Tax

Net Profit/(Loss) after tax 32,69.22 (71,17.55) (17,98.73) (84,12.40)

Add / (Less): Share of Profit / - 1,15.15 1,14.26

(Loss) on Associate Companies

Add / (Less): Minority Interest - - - (1.19)

Share of Profit / (Loss)

Net Profit / (Loss) 32,69.22 (71,17.55) (16,83.58) (82,99.33)

EPS

Basic Rs. 3.25 (7.12) (1.67) (8.30)

Diluted Rs. 3.10 (7.12) (1.67) (8.30)

Table No. 1.1

Function wise classification of statement of consolidated Profit and Loss

Rs. in lakhs

PARTICULARS Year Ended March 31

PARIICULARS 2016 2015

INCOME

Gross Income from software product license and related services 806,49.64 604,83.87

Forex impact on Hedge accounting 4,15.91 3,91.08

Income from software product license and related services 810,65.55 608,74.95

EXPENDITURE

Software development expenses 391,27.37 305,97.47

Selling and marketing & General and administrative expenses 340,29.86 261,04.60

Total Expenditure 731,57.23 567,02.07

Profit / (Loss) before interest, depreciation & amortisation 79,08.32 41,72.88

Research & Engineering expenses 106,29.77 122,03.58

Depreciation/Amortisation 20,77.11 19,01.27

Finance Charges 1,19.22 80.78

Profit / (Loss) after interest, depreciation & amortization (49,17.78) (100,12.75)

Other Income including exceptional items 22,12.73 17,76.19

Minority Interest / Share of profit/(loss) of Associate Companies 1,15.15 1,13.07

Profit / (Loss) before tax (25,89.90) (81,23.49)

Provision for taxation (9,06.32) 1,75.84

Profit / (Loss) after tax (16,83.58) (82,99.33)

Table No. 1.2

2. Business Performance

The consolidated revenue of the Company for the year ended March 31st, 2016 stood at Rs. 810,65.55 lakhs as against Rs. 608,74.95 Lakhs for the previous year. The consolidated Net Profit/(Loss) for the fiscal year ended March 31st, 2016 stood at Rs. (16,83.58) lakhs as against the previous year''s Net Profit/(Loss) of Rs. (82,99.33) Lakhs. The Consolidated Reserves and Surplus as of 31st March 2016 stood at Rs. 568,65.71 Lakhs as against Rs. 569,10.57 Lakhs of the period as of March 31st, 2015.

3. Material Changes and Commitments

Mr. Arun Shekhar Aran has been appointed as an additional director of the Company with effect from May 03rd, 2016, and who will be an Independent Director subject to the approval of shareholders in the ensuing Annual General Meeting of the Company.

4. Subsidiaries

Details of Subsidiary Companies, Joint Ventures and Associate Companies, and their financial position.

Your Company has 23 (11 direct, 2 JV and 10 step down) subsidiary companies and 2 Associate Companies for the financial year ended on March 31st, 2016. The information as required under the first proviso to sub-section (3) of Section 129 is given in Form AOC-1 in Annexure [1]. During the year M/s Intellect Payments Limited and M/s Intellect India Limited have been incorporated as direct subsidiaries of Intellect Design Arena Limited.

5. Cash & Cash Equivalents

Your Company''s has cash reserve of Rs. 1,15.25 Cr. The working capital with reference to DSO (Days of Sales Outstanding) was maintained around 146 days (including Billed as well Unbilled) during the year.

6. Share Capital

The paid up Capital of the Company was increased to Rs.50.39 Crs through share allotments made against exercise of Options under the ASOP Schemes inherited as part of de-merger and stands at Rs. 5,03,89,31,20 comprising of 10,07,78,624 number of equity shares of Rs.5/- each as on March 31st, 2016

The information as required under the provisions of Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 read with Rule 12(9) of the Companies (Share Capital and Debentures) Rules, 2014, and also the information required under the Guidance note of ICAI, in relation to ESOPs are set out in the Annexure 2 to the Directors'' Report.

The Register of Members and Share Transfer books of the company will be closed with effect from 11th July, 2016 to 21st July, 2016 (both days inclusive).

7. Corporate Governance

Your Company has been complying with the provisions of Corporate Governance as stipulated in Clause 49 of the Listing Agreement / Regulation 27 of the Listing Regulations. A separate report on Corporate Governance along with Auditors'' certificate on compliance of the Corporate Governance norms as stipulated in Clause 49 of the Listing Agreement / Regulation 27 of the Listing Regulations and Management Discussion & Analysis forming part of this report are provided elsewhere in this Annual Report.

During the year, the appointment and remuneration of Mr. Anil Kumar Verma was approved by you through a Special Resolution in the Annual General Meeting held on July 28th, 2015 and the Central Government approved his appointment vide its letters dated September 18th, 2015 and October 07th, 2015. With respect to other details as specified in Disclosures under Schedule V kindly refer to Table No. 2.7 of Report of the Corporate Governance.

8. Transfer to Investor Education and Protection Fund

As required under the provisions of Section 205A and 205C and other applicable provisions of Companies Act, 1956 (the corresponding provisions in the Companies Act, 2013 have not been notified, and hence the earlier law is still applicable in respect of these provisions), dividends that remain unpaid/unclaimed for a period of seven years, are to be transferred to the account administered by the Central Government viz: Investor Protection and Education Fund ("IEPF"). Once the amounts that are due for refund are transferred to the IEPF, no claim shall lie in respect of those amounts against the Company. The Company had not declared any dividend so far, hence the above provisions are not applicable to our Company.

9. Conservation of energy, technology absorption, foreign exchange earnings and outgo

The particulars as prescribed under Section 134(3)(m) of the Act, read with Rule 8 of the Companies (Accounts) Rules, 2014, are set out in the Annexure 3 to this Report.

10. Particulars of employees

Since, the Annual Report is an abridged version information pursuant to the provisions of Rules 5(2) & 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is not enclosed along with this report. Any member who wish to obtain these details can refer to the detailed Annual Report posted on the Company''s website or can write to the Company Secretary asking for details.

11. Directors'' responsibility statement as required under Section 134 (5) of the Companies Act, 2013

Pursuant to the provisions of Section 134(3)(c) of the Companies Act, 2013 the Directors of your company confirm that:

a) In the preparation of the Annual Accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

b) The Directors have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit of the company for that period;

c) The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities.

d) The Directors have prepared the Annual Accounts on a "going concern basis".

e) The Board of 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.

f) The Board of Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

g) The Board of Directors have adopted policies and procedures for ensuring the orderly and efficient conduct of its business, including adherence to the 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 disclosures.

12. Board Meetings, Board of Directors, Key Managerial Personnel & Committees of Directors

(a) Board Meetings:

The Board of Directors of the Company met 7 times during the year 2015-

16. The details of various Board Meetings are provided in the Corporate Governance Report. The gap intervening between two meetings of the board is as prescribed in the Companies Act, 2013 (hereinafter "the Act").

(b) Changes in Directors & Key Managerial Personnel

There have been no changes in the Directors and Key Managerial Personnel during the Financial Year 2015-16.

(c) Re-Appointment

As per Article 34(1) of the Articles of Association of the Company, one third of the Directors are liable to retire by rotation at the Annual General Meeting of the Company. Mr. Anil Kumar Verma, Director is liable to retire by rotation.

(d) Independent Directors

The following independent directors who were appointed in the 3rd Annual General Meeting held on 17th September 2014 and in the EGM held on 9th October 2014 for a period of three (3) years, will continue to be on the Board till the conclusion of 6th Annual General Meeting to be held in the calendar year 2017.

1. Dr. Ashok Jhunjhunwala

2. Mr. V.Balaraman

3. Ms. Aruna Krishnamurthy Rao

The Company has received necessary declarations from each Independent Director of the Company under Section 149(7) of the Act, that they meet the criteria of independence as laid down in Section 149(6) of the Act.

(e) Details of remuneration to Directors: The information relating to remuneration of directors as required under Section 197(12) of the Act, is given in Annexure [4].

(f) Board Committees

The Company has the following Committees of the Board:

1. Audit Committee

2. Nomination and Remuneration & Compensation committee

3. Stakeholders'' Relationship committee

4. Corporate Social Responsibility committee

5. Risk Management Committee

Sub-committees:

1. Share transfer Committee

The composition of each of the above Committees, their respective role and responsibility is as detailed in the Report of Corporate Governance.

The policy framed by the Remuneration and Compensation Committee under the provisions of Section 178(4) of the Act, is as below:

(g) Remuneration policy

The remuneration policy of the Company has been so structured in order to match the market trends of the IT industry. The Board in consultation with the Nomination and Remuneration & Compensation Committee decides the remuneration policy for Directors. The Company has made adequate disclosures to the members on the remuneration paid to Directors from time to time. Remuneration/ Commission payable to Directors is determined by the contributions made by the respective Directors for the growth of the Company.

The Policy of the Company on Director''s appointment and remuneration, including criteria for determining qualifications, positive attributes, independence of a Director and other matters as required under Section 178 sub-section 3 of the Companies Act, 2013 is available. There has been no change in the policy since the last fiscal year. We affirm that the remuneration paid to the Directors is as per the terms laid out in the nomination and remuneration policy of the Company.

(h) Board Evaluation

As required under the provisions of Section 134(3)(p) and Regulation 27 of the Listing Regulations, the Board has carried out an annual performance evaluation of its own performance, and the manner in which such performance evaluation was carried out is as under:

The performance evaluation framework is in place and has been circulated to all the directors to seek their response on the evaluation of the entire Board and independent directors. The Nomination and Remuneration & Compensation Committee has carried out evaluation of director''s performance.

The criteria of evaluation is exercise of responsibilities in a bona fide manner in the interest of the Company, striving to attend meetings of the Board of Directors/ Committees of which he/she is a member/ general meetings, participating constructively and actively in the meetings of the Board /committees of the Board etc.

(i) Vigil Mechanism

The Company has established a whistle-blower policy and also established a mechanism for directors and employees to report their concerns. The details of the same is explained in the Corporate Governance Report.

(j) Related Party Transactions

All related party transactions that were entered into during the financial year were on an arm''s length basis and were in the ordinary course of business. There are no other materially significant related party transactions made by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of the Company at large.

The details of the related party transactions as required under Section 134(3)(h) r/w Rule 8 of the Companies (Accounts) Rules, 2014, is attached as Annexure [5].

13. Auditors

Financial Auditors: M/s. S.R. Batliboi & Associates LLP, Chennai, Chartered Accountants who are the Financial Auditors of the Company hold office as financial auditors until the conclusion of the 8th Annual General Meeting of the meeting to be held in the Calendar year 2019. Their appointment is subject to ratification by the members at the 5th Annual general meeting. Secretarial Audit: Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, Secretarial Audit has been carried out by Mr. S Eshwar, Practising Company Secretary, and his report is annexed as Annexure [6].

14. Fixed Deposits

Our Company has not accepted any deposits during the financial year and as such, no amount of principal or interest was outstanding as on March 31, 2016.

15. Social Connect

Ullas Trust - a journey of 18 years, thousands of students and one motto: Igniting young minds

Since its inception in 1997, Ullas Trust has brought its employees together to connect with the larger community and work towards its empowerment. Thinking beyond ''financial aid'', Ullas chose the unique path of influencing the aspiring student community during a crucial phase of their life - ''adolescence''. And thus began the quest for reaching out to the high school students in corporation, government and government- aided schools. Here, Ullas began to inspire students with the power of dreams, and encouraged them to dream, set goals, plan towards achieving them and celebrate success. In the last 18 years, tens of thousands of students have been touched by the magic of Ullas and many of them continue to celebrate their success with us today.

2015-16 has been a phenomenal year for Ullas Trust. We reached out to over 6,000 students through the SUMMIT programme and nearly 2,00,000 students through our Touch The Soil programme. This year, we also organised the first Ullas Confluence - an exclusive planning and ideation platform for our college-going youngsters - Talent Quest for India (TQI), towards furthering Ullas'' initiatives in the rural schools. All of this inclusive of an upward surge in our social media activity, altogether made for an eventful year in Ullas Trust.

SUMMIT

Our weekend enrichment programme

This academic year, Ullas Trust reached out to 6,128 students from 323 schools across India.

The SUMMIT season began with the Ullas Entrance Examination (UEE). The UEE is the gateway test to identify meritorious students and induct them into Ullas for the weekend enrichment programme. This year, over 8,000 students who were poised to enter Class IX sat for the UEE, and 2,100 of them joined the fleet of Ullas Young Achievers. Along with the Class X, Class XI and Class XII students already in the Ullas fold, over 6,100 students participated in the four levels of intervention through SUMMIT (SUMMIT Level 1-4: Level 1 being Igniting Dreams, Level 2 - Planning and Prioritization, Level 3 - Influencing, and Level 4 - Persuasive Articulation). Especially in Pune, with an increased band of volunteers, expanded from one school to four schools, taking on additional students onto the Ullas bandwagon.

TOUCH THE SOIL

Our rural connect programme

This academic year, Ullas Trust reached out to 191,140 students from 587 schools across 86 districts in 4 states.

Touch The Soil programme is designed to deliver powerful tools to students that aid them in charting their dreams and mapping a plan to achieve them. This year, Ullas Trust embraced nearly two lakh students across the country through the Diary of Dreams workshop for Classes IX & XI, and the Planning workshop for Classes X & XII. 5,618 students were awarded merit scholarships from Ullas - 5 students from Class IX and 5 students from Class X were chosen from each school for this.

HIGHER EDUCATION SCHOLARS

Our mentees become mentors

168 Higher Education Scholars (HES) continue to participate actively in the SUMMIT and Touch The Soil programmes as mentors inspiring the next generation of young minds. This year, Ullas Trust inducted 73 HES volunteers - 28 of them from profession streams (like medicine, engineering, etc.) and 45 of them from the Arts & Science fields. A mentoring programme for 2nd year HES volunteers was also piloted this year, to compliment the SUMMIT programme.

ECOSYSTEM PARTNERSHIPS

Expanding our reach through a wider network

Ullas Trust continues to expand its reach by working with compatible organizations across its chapters. Ullas joined hands with Talent Quest India (TQI) - a student volunteer body - to deliver SUMMIT Levels 1 & 2 to over 2,500 students in 14 schools across 10 districts of Tamil Nadu. About 170 students from 19 different colleges in these districts engaged with Class IX & X students, mentoring and inspiring them to hone their ''can do'' spirit. The first Ullas Confluence was held in February 2016, to celebrate this young band of volunteers and mentors, who presented various plans for further scaling the Ullas movement. We continue our partnership with Vidyarambam Trust where the Akkas have delivered the SUMMIT programme to over 2,000 students from across 15 schools in 5 districts.

A Career Counseling & Guidance programme was also conducted for Class XII students (involving their parents) in partnership with Career Placement Cell of SRM University, which was well-received by both parents and students. Further, in partnership with Design For Change (DFC), a One Week Challenge was thrown open to all of Ullas schools (urban and rural) to leverage the Design Thinking school of thought to address social causes and opportunities.

ASSOCIATE ENGAGEMENT

Our growing volunteer base

This year, Ullas Trust was privileged to have over 1000 volunteers wearing the volunteer hat and come forward to ignite young minds. 210 teams in all went to rural areas to deliver the Touch The Soil programme. Ullas Immersion Programmes were conducted for new associates who were recruited through the FUEL (Future Emerging Leaders) programme. Volunteer appreciation events were also conducted to extend appreciation for all associates who passionately invest their time and energy to reap social returns with Ullas Trust. We have actively engaged via social media this year, taken inspiring stories forward through blogs and connected with associates via publications.

While this definitely has been a fulfilling year for Ullas Trust, there are miles to go and much to celebrate. We aim to penetrate deeper into the rural districts right down to panchayat level, and continue to expand our reach through like-minded partners. In the forthcoming years, we look forward to increase the involvement of more number of youth to the cause of igniting young minds.

16) Audit Committee Recommendation

During the year all the recommendations of the Audit Committee were accepted by the Board. The Composition of the Audit Committee is as described in the Corporate Governance Report.

17) Extract of Annual Return

The details forming part of the extract of the Annual Return in Form MGT 9 is annexed herewith as Annexure [7].

18) Significant & Material Orders passed by the Regulators or Courts

During the Financial Year 2015-16, no order has been passed by any regulatory authorities or Courts.

19) Particulars of Loans, Guarantees and Investments u/s 186* Investments made during the year 2015-16:

Sl. Face Amount in Amount

Name of the Investee Currency No Value FCY / INR in Rs. lacs

Intellect Design Arena Pte 1 SGD 1 27,44,000 12,94.00 Ltd (Singapore)

Intellect India Limited 2 INR 5 5,00,000 5.00 (India)

Intellect Payments 3 INR 5 5,00,000 5.00 Limited (India)

Intellect Polaris Design 4 LLC USD 5,00,00 22,50,000 13,80.15

Table No. 1.3

Investments in Equity Instruments - Associate Companies:

Sl. Name of the Face Amount in Amount in Currency No Investee Value INR Rs. Lacs

Adrenalin Esystems 1 INR 5 36,22,26,60 3,62.23 Limited

Table No. 1.4

* The Company has not granted Loans and Guarantees under Section 186 of the Companies Act, 2013

20) Risk Management Policy

Being a pioneer in the Intellectual property led Business in India, the company is continuously focussing and committing itself to have a Risk Management system suited for Product business.

Towards this, the Board has formed a Risk Management Committee with majority of Directors, the Chief Financial Officer & the Chief Risk Officer as members of the Committee. The Committee works to mitigate any inherent risks faced by the Business and to meet the increasing demand of Customer''s liability through different means within the overall framework listed below.

Risk Management Framework Objective

The Organization is subject to certain risks that affect our ability to operate, may disrupt our business model due to changes in competitive landscape, changes in Technology which may render our capabilities obsolete, and thus hamper our ability to serve our customers and protect assets. These risks could adversely affect Customer projects, Employees, Shareholders, liability to third party and risks to property among others. Controlling these risks through a formal process is necessary for the well being of the Organization and everyone involved with it.

The organization''s Risk policy identifies these risks on a continuous basis and proposes mitigation measures. Our risk policy aims to minimize adverse impact of these risks on Company''s growth, Profit margins and People engagement besides Regulatory compliance. Risk Management has been made an integral part of the Organization by encouraging risk awareness among employees.

Risk Management Framework

The Audit Committee of the Board of Directors oversees the Risk Management process done by the Risk Committee under the overall direction of the Board of Directors. Risk Management Committee consists of the Board of Directors, CFO & the CRO.

Risk Management Process

Risk Management is a continuous and developing process which runs throughout the Organization''s strategy and the implementation of that strategy. The Risk Management helps the organization to proactively manage uncertainties in the internal and external environment and to limit the negative impacts and benefit on the opportunities.

Some of the Major risks and risk mitigation measures can be grouped in the following four categories:

1 3. 4. Legal & 2. Operational Business Financial Compliance Model Risk Risk Risk Risk

Recruitment - New Country Business difficulty in Foreign Entry Risk; Geo segment finding Subsidiary concentration specialized Exchange Compliance skill Reporting

Risk due to Commercial Large Order Intellectual Geograpy General to Cash cycle Property concentration Liability, Cyber & Crime and Liquidity Protection Risk Risk

Internal Risk from Financial actions of Competition Directors and Control Officers (IFC) implementation

Risk due to Contractual Fire hazards Compliance and Accident

Table No. 1.5

1. Business Model Risk

1.1. Business Segment Concentration

The company is specialized in BFSI space and could face the risk of concentration in a single space. However, this risk is mitigated to a large extent because the company has presence in all the 4 sub segments of BFSI namely Corporate Banking, Retail Banking, Capital Markets and Insurance. These 4 sub segments have different boom and bust cycle and therefore protect the company. The Company''s foray into the Payments space through iPay will further reduce this risk as Payments business is fairly stable business with less impact on cyclicity.

1.2 Geographic Concentration

Intellect is present across different Geographies which we internally classify as World I, World II, World III countries. World I is Rich countries, World II is Middle Income countries and World III is the Emerging world. The risk gets mitigated by being present in all the three worlds as the demand from these countries varies across segments and balances the cyclic nature of business.

1.3 Competition

The company faces competition from large Multi-national companies, Local companies in the geography in which we operate and Indian Product companies. While many of these companies are established companies, the start ups may also disrupt our business.

With a view to stay ahead of the competition, an analysis of these competitions in the 4 sub-segments and the 3 Worlds is done on a continuous basis. Another lever to mitigate this risk is the Investments made in R&D which helps us to remain ahead in the innovation curve.

2. Operational Risk

2.1 Recruitment

The company operates in niche BFSI product space which requires people with specialized skill, as against mass recruitment that was followed in Services business. The Company minimizes the risk through in-depth in- house training, recruitment in top end Engineering colleges and B Schools.

2.2 Commercial Liability, Cyber & Crime

The company has appointed a Global leader in Risk & Insurance advisory for advising on the risk and insurance coverage.

To Safeguard against Liability arising in the event of any property damage, Bodily injury caused to any person - Commercial General liability insurance is taken

To safeguard against privacy breach liability, cyber extortion, data theft- Cyber liability cover is taken

2.3 Risks from actions of Directors and Officers

To safeguard against lawsuits brought against Directors & key officers who are in a decision - making position in the organization - Directors & Officers Liability Insurance cover is taken

2.4 Risks due to Fire hazards & Accident

To protect the company''s Assets (movable & immovable Assets) from the risk of Fire or perils, protection has been taken under Standard Fire and Special Perils Policy.

3. Financial Risk

3.1 Foreign Exchange

The company earns a large portion of its income in foreign currencies and is exposed to risk of currency movements. To mitigate the risk, the company follows a 2 step strategy.

As the first step, quotation in foreign currencies is restricted to few selected major currencies. Quotation in any other currency is highly controlled.

The second leg of this strategy is to hedge the foreign earnings after subtracting the local expenses.

3.2 Larger Order to cash cycle and Liquidity Risk

Our customer being large Banks and Financial Institutions the credit worthiness is in comfort even though the cycle is long. The percentage of bad debts is also minimal. Since the Products business has a long order to cash cycle, the company has identified liquidity Risk as an area to monitor. The Finance organization headed by the CFO monitors the liquidity position consisting of cash and near cash instruments on a continuous basis

4. Legal & Compliance Risks

4.1 New Country Entry Risk & Subsidiary Compliance Reporting

For any new business opportunity in a new country, a Country risk assessment clearance from the CRO is a must. Country risk assessments at entry level and subsequent mitigation measures help in developing a robust knowledge platform and also to understand the local conditions and business culture at an early stage in the business process. For Subsidiary Compliance Reporting - a well structured framework has been instituted in Unmail, the Company''s proprietary Enterprise Social Network. The respective Operational Directors ensure uploading of the Compliance reports (suitably customized for each Subsidiary) on a quarterly basis. This process enhances to control and improve statutory compliance in each jurisdiction.

4.2 Intellectual Property Protection Risk

Difficulties in protecting out IP in some countries that are pivotal for generating revenues are mitigated by registration of the IP in countries that have safe IP protection laws.

4.3 Internal Financial Control (IFC)

The company has to comply with additional controls enforced by Section 134 of the Companies Act 2013. This is to report on the Internal Financial Control in the Directors Report and also by the Statutory Auditors. To comply with this, the company appointed a reputed Chartered Accountant firm to assess the existing control environment and ensure that the requirements are complied.

4.4 Contractual Compliance

Product development companies are exposed to legal risk arising from Infringement of IP right and Non performance of contractual obligation. The company has established a strong process to review and appraise all contracts. As a policy it restricts its obligation under each contract. The company has adequate Insurance to militate against risk of Errors and Omissions, Commercial General Liability.

21) Corporate Social Responsibility

Company has formed Corporate Social Responsibility Committee on October 15th, 2014 and following are the members to the Committee :-

a) Mr. Arun Jain - Chairman and Managing Director

b) Ms. Aruna Rao - Director

c) Dr. Ashok Jhunjhunwala - Director

d) Mr. Anil Kumar Verma - Director

e) Mr. V. Balaraman - Director

The Company is undertaking its CSR activities through Ullas Trust which qualifies as CSR activity under Schedule VII (ii) of the Companies Act, 2013. Since, the Company is in initial phase and yet to start making profits, Company is not required to contribute towards Corporate Social Responsibility (CSR). However, as a responsible corporate citizen proposal is being made to shareholders seeking approval for contributions.

Details of the policy and implementation of the CSR activities during the year are as provided under Annexure [8]

22) Disclosure as required under Section 22 of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

The Company has in place an Anti Sexual Harassment Policy in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. The Internal Complaints Committee ("ICC") has been set up to redress the complaints received regarding sexual harassment. All employees are covered under this policy. The following is the summary of the complaints received and disposed off during the financial year 2015-16:

a) No. of complaints received: NIL

b) No. of complaints disposed NIL

23) Listing Fees

The Company confirms that it has paid the annual listing fees for the year 2016-17 to both National Stock Exchange of India Limited and Bombay Stock Exchange Limited.

24) Acknowledgement

Your Directors take this opportunity to express the gratitude to all investors, clients, vendors, bankers, Regulatory and Government authorities, Stock Exchanges and business associates for their cooperation, encouragement and continued support extended to the Company. Your Directors also wish to place on record their appreciation to the Associates for their continuing support and unstinting efforts in ensuring an excellent all round operational performance at all levels.

By Order of the Board

For Intellect Design Arena Limited



Place: Chennai Arun Jain

Date : May 03rd, 2016 Chairman and Managing Director

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