3i Infotech Ltd Directors Report.

FOR THE FINANCIAL YEAR 2020-21

Dear Shareholders,

Your Directors present the Twenty Eighth Annual Report (the "Report") of the Company along with the audited financial statements for the financial year ended March 31, 2021.

OVERVIEW

The Management is pleased to inform you that the Company has completed 5 consecutive years of good performance after completion of Debt Realignment Scheme ("DRS") package presented to the Lenders during FY 2015-16. Your Company has earned an operating revenue of Rs 608.62 Crores and EBIDTA of Rs 1.82 Crores for financial year ended March 31, 2021 on a consolidated basis.

During the year, the Board of Directors of the Company ("Board"), at its meeting held on December 28, 2020, and the shareholders of the Company, vide postal ballot concluded on February 28, 2021, have approved, subject to receipt of requisite approvals, A] sale of the global software products business carried on by the Company and its subsidiaries in India and across the world to Azentio Software Private Limited, India, Azentio Software Private Limited, Singapore ("Azentio Singapore") and Azentio Singapores subsidiaries in the relevant jurisdictions (collectively "Azentio"), as a going concern and on a "slump sale" (as defined under Section 2(42C) of the Income Tax Act, 1961) basis, on an "as is where is" basis, without values being assigned to individual assets and liabilities; and (B) sale of the Companys intellectual property rights relating solely to the Product Business outside India, on an "as is where is" basis to Azentio Singapore. The Company and its subsidiaries in relevant jurisdictions executed inter alia business transfer agreements (BTA) with Azentio on December 28, 2020 towards this transaction. Aggregate consideration for the aforesaid transaction is INR 1000,20,00,000 (Indian Rupees One Thousand Crores Twenty Lakhs), subject to customary working capital and other adjustments in accordance with the provisions of the BTA and other transaction related documents. The slump sale has been completed on March 31, 2021, except for subsidiaries in Saudi Arabia and Thailand where regulatory approvals are yet to be received.

The Board of Directors, at their meeting held on January 22, 2021, had approved the amendment in terms of 0.01% Cumulative Non-Convertible Redeemable Preference Shares of Rs 5/- each ("Class A Preference Shares") and 0.10% Cumulative Non-Convertible Redeemable Preference Shares of Rs 5/- each ("Class B Preference Shares"), which are due for redemption on March 15, 2026 in terms of Section 48 of the Companies Act, 2013 (the "Act"). Later, Class A Preference Shareholders and Class B Preference Shareholders had vide resolution passed through Postal Ballot on February 28, 2021, the results of which were declared on March 2, 2021, accorded their approval for amendment in terms of Class A Preference Shares and Class B Preference Shares. Pursuant to receipt of requisite approvals from Preference Shareholders i.e. Class A and Class B Preference Shares were redeemed on May 27, 2021 except one class B preference shareholder.

During FY 2020-21, the Company has filed a Scheme of Arrangement between the Company and its Shareholders under Sections 230 to 232 of the Act, with the stock exchanges with a view to reduce the issued, subscribed and paid-up equity share capital of the Company to one tenth to set off the amount so released against the accumulated losses of the Company, thereby having a positive impact on the reserves and surplus of the Company. The detailed update on this point is given separately in this Report under scheme of arrangement .

CRISIL Limited has rated the Company as "CRISIL BBB-/Watch Developing" in respect of the long term bank loan facilities of the Company in January 2021. One of the other rating agencies, CARE has rated the Company as "CARE BBB-;Stable" in October 2021.

Financial Performance of the Company on Standalone and Consolidated basis:

Rs in Crores

Particulars

Standalone

Consoidated

2020-21 2019-20 2020-21 2019-20
Total Revenue (I) 250.42 300.48 632.21 717.76
Total Expenses (II) 286.74 244.81 351.38 765.21
Total Exceptional items (III) 290.51 - - -
Profit / (Loss) before Tax (I-II+MI) 254.19 55.68 280.83 (47.45)
Tax expense
Current Tax - - 23.06 13.43
Deferred Tax - - - -
Adjustment of tax relating to earlier periods 0.15 0.07 - -
Profit / (Loss) for the year 254.04 55.61 257.77 (60.88)
Profit/(loss) for the year from Discontinued Operations 70.37 72.29 133.39 128.90
Other Comprehensive Income
A. Other Comprehensive income not to be reclassified to profit and loss in subsequent year:
Remeasurement of gains / (losses) on defined benefit plans (2.80) 1.41 (4.43) 3.05
Income tax effect - - 0.46 (0.07)
B. Other Comprehensive income to be reclassified to profit and loss in subsequent years:
Other Comprehensive income for the year, net of tax - - - -
Total Comprehensive income for the year 321.61 129.30 387.19 71.00
Profit for the year attributable to:
Equity holders of the parent - - 391.16 67.60
Non-controlling interests - - - 0.42
Other Comprehensive income for the year attributable to:
Equity holders of the parent - - (3.97) 2.98
Non-controlling interests - - - -
Total Comprehensive income for the year attributable to:
Equity holders of the parent - - 387.19 70.58
Non-controlling interests - - - 0.42
Earnings per equity share for profit attributable to equityshareholders
Basic EPS 2.01 0.79 2.42 0.42
Diluted EPS 2.01 0.79 2.42 0.42

Standalone sales and other income for FY 2020-21 stood at Rs 250.42 Crores as against Rs 300.48 Crores for FY 2019-20. On a consolidated basis, sales and other income for FY 2020-21 stood at Rs 632.21 Crores as against Rs 717.76 Crores for FY 2019-20. After meeting all expenditures, the Company made a total comprehensive income of Rs 387.19 Crores on a consolidated basis against total comprehensive income of Rs 321.61 Crores on a standalone basis.

TRANSFER TO RESERVES

There is no amount proposed to be transferred to general reserve this year.

DIVIDEND

During the year, the Company has paid dividend of Rs 6,377,607 as preference dividend as per the terms of issue of 0.10% Cumulative Non-Convertible Redeemable Preference Shares of face value Rs 5/- each ("Class B Preference Shares") to Class B Preference Shareholders.

The Company has also paid a dividend of Rs 65,000/- as preference dividend as per the terms of issue of 0.01% Cumulative Non-Convertible Redeemable Preference Shares of face value Rs 5/- each ("Class A Preference Shares") to Class A Preference Shareholders for the Financial Year 2020-21.

As per the terms of the Master Restructuring Agreement ("MRA") dated March 30, 2012 entered into by the Company with IDBI Bank Limited, the Monitoring Institution and the CDR Lenders, the Company is prohibited from declaring or paying any dividend on its equity shares without prior approval of its Lenders.

In light of this, your Directors regret to state their inability to recommend any dividend on equity shares for the financial year ended March 31, 2021.

BUSINESS

The business activities of the Company are broadly divided into two categories, viz. IT Solutions and Transaction Services. The IT Solutions business comprises of Cloud Computing, Application-Automation-Analytics (AAA), Platform Solutions (BPaaS, KPaaS, GRC), Infrastructure Management Services, Application Development, Digital Transformation Consulting and NextGen Business services (5G, SASE, Edge Computing, Cognitive Computing, IIoT, Cyber Security Services, etc.) while Transaction Services comprise of BPS and KPO services covering management of back office operations. The Company has sold its software products business on March 31, 2021, while it continues to operate its services business.

Altiray, the Companys Services landscape, is well integrated across domains and emerging technologies. Its digital frameworks are optimized to deliver the much-needed core transformation in businesses. Based on a curated technology stack, the solutions enable easy technology adoption and are effortlessly scalable. Mobility, together with new-age technologies like Blockchain, Artificial Intelligence, IoT, Augmented / Virtual Reality (AR/VR), is an imperative part of digital transformation and Altirays offerings cater to all levels of the mobility maturity curve, covering Consulting, Design & Development, Data Testing, Support, Data Intelligence & Co-Innovation Services.

The contribution of IT Solutions to the revenue for the year was 91.34% and that of Transaction Services was 8.66%.

The Company has presence in more than 15 countries across 4 continents. The Company has a strong foothold and customer base in South Asia, Asia Pacific (APAC), Middle East and Africa (MEA), Kingdom of Saudi Arabia (KSA) and North America (US and Canada) and Europe geographies. The Company has marketing network around the world, including US, Europe, MEA and APAC.

During the year under review, the Board of Directors at their Meeting held on December 28, 2020, approved the slump sale of the global software products business of the Company (including its worldwide subsidiaries) on a going concern basis to Azentio Software Private Limited (and its affiliates), subject to the receipt of requisite approvals and executed inter alia a BTA between the Company and Azentio on December 28, 2020.

The Companys software product business consisting of the business, intellectual property and employees inter alia in India, USA, UK, Kenya, UAE, Malaysia, Singapore, Thailand and Saudi Arabia is being transferred under the BTA. The software product business in the offshore jurisdictions will be transferred pursuant to offshore business transfer agreements.

SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES

As on March 31, 2021, the Company had 23 subsidiaries (including step-down subsidiaries). The voluntary winding up of Elegon Infotech Limited, a wholly owned subsidiary of the Company based in China, was completed on June 28, 2021.

As on the date of this Report, the number of subsidiaries are 22 (twenty two). There has been no material change in the nature of the business of subsidiaries.

As per the first proviso to Section 129(3) of the Act read with Rule 5 of Companies (Accounts) Rules, 2014, the statement containing salient features of the financial statements of subsidiaries/ associate companies/joint venture in the prescribed Form AOC-1 is enclosed to the consolidated financial statements. This statement also mentions highlights of performance of subsidiaries/associate companies/ joint venture and their contribution to the overall performance of the Company during the year.

Pursuant to the provisions of Section 136 of the Act, the standalone and consolidated financial statements of the Company, along with relevant documents and separate audited accounts in respect of subsidiaries are available on the website of the Company.

This Report has been prepared based on the standalone financial statements of the Company and highlights the performance of the subsidiaries, associates and joint venture companies and their contribution to the overall performance of the Company during the period under review.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186

Particulars of loans, guarantees or investments granted/made during the year are given under the notes to standalone financial statements forming part of this Report.

CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

During the year under review, all the contracts/ arrangements/transactions entered into by the Company with related parties referred to in Section 188 of the Act were in the ordinary course of business and on an arms length basis. During the year, the Company has not entered into any contract/arrangement/ transaction with related parties which could be considered material in accordance with the policy of the Company on related party transactions.

Since all related party transactions entered into by the Company were in the ordinary course of business and were on an arms length basis, Form AOC-2 is not applicable to the Company.

The Company has in place a Policy on Materiality of Related Party Transactions and a Policy on dealing with Related Party Transactions. The said policy can be viewed on the Companys website by accessing the following link: https://www.3i-infotech.com/investors/ under "Corporate Governance" in the Investors section.

Details regarding related party disclosures are given under the notes to standalone financial statements which form part of this Report.

SCHEME OF ARRANGEMENT

The Board of Directors, at its Meeting held on June 29, 2018 had approved a Scheme of Arrangement between the Company and its Shareholders under Sections 230 to 232 and other applicable provisions of the Act (the "Scheme"). The Scheme provided for a two-step process for reducing the equity share capital of the Company:

a) Reduction of equity share capital of the Company on the Record Date (as defined in the Scheme) by reducing the face value of the equity shares of the Company from Rs 10 to Rs 1. The capital so reduced was to be utilized to write off the accumulated losses of the Company and

b) Consolidation of 10 equity shares of the Company of Rs 1 into one fully paid up equity share of the Company of Rs 10 each immediately upon such reduction.

As already informed to the Members during FY 2020-21, the Company filed the draft Scheme with the Honble National Company Law Tribunal (NCLT), Special Bench, Mumbai on May 25, 2020 seeking directions to convene equity shareholders meeting towards approval of the Scheme. Pursuant to directions issued by NCLT Special Bench, vide its order dated June 1, 2020, the Company convened and held meeting of the equity shareholders of the Company on July 21, 2020 through video conferencing / other audio visual means, where the equity shareholders approved the Scheme with requisite majority. The NCLT granted an exemption to the Company from calling a meeting of its Preference Shareholders and Secured and Unsecured Creditors. The Company, thereafter, filed a petition with the Honble NCLT, Mumbai Bench on August 3, 2020 seeking sanction/approval of the Scheme. NCLT admitted the petition on October 27, 2020 and later fixed February 2, 2021 for the final hearing and disposal of the petition. After the end of the financial year 2020-21, the matter was listed for pronouncement on April 26, 2021 and NCLT sanctioned the Scheme allowing the Companys application.

The Board of Directors, at its meeting held on August 10, 2021, fixed Tuesday, August 31, 2021 as the record date for the purpose of determining the shareholders whose shares will be reduced and consolidated pursuant to the Scheme approved by Honble NCLT Mumbai Bench. In view of this, the trading in equity shares was temporarily suspended from the opening of business hours on August 30, 2021 till October 21, 2021. Later, on October 22, 2021 the equity shares of the Company got relisted on BSE Limited and National Stock Exchange of India Limited.

MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY

The Company has sold its global software product business (including that of its worldwide subsidiaries) on a going concern basis to Azentio Software Private Limited (and its affiliates), subject to the receipt of requisite approvals and executed inter alia BTA between the Company and Azentio on December 28, 2020. The Companys software product business consisting of the business, intellectual property and employees inter alia in India, USA, UK, Kenya, UAE, Malaysia, Singapore, Thailand and Saudi Arabia is being transferred under the BTA. The software product business in the other jurisdictions will be transferred pursuant to offshore business transfer agreements.

Except above, there have been no material changes and commitments, if any, affecting the financial position of the Company which have occurred between the end of the financial year to which the financial statements relate and as on the date of this Report.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY REGULATORS

During the year under review, no significant and material orders were passed by the regulators or courts or tribunals impacting the going concern status and Companys operation in future.

REPORT ON CORPORATE GOVERNANCE

The Company is committed to maintain the highest standards of Corporate Governance and adhere to the Corporate Governance requirements. The Corporate Governance Report along with auditors certificate thereon in terms of Regulation 34 read with Schedule V of SEBI LODR is appended herewith as Annexure I to this Report.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

In terms of provisions of Regulation 34 of SEBI LODR, the Management Discussion and Analysis Report is given under a separate section forming part of this Report.

BUSINESS RESPONSIBILITY REPORT (BRR)

Regulation 34 of SEBI LODR mandates the inclusion of the BRR as part of the Annual Report for the top 1,000 listed entities based on market capitalization. In compliance with SEBI LODR, BRR forms part of this Report and is appended hereto as Annexure II.

ANNUAL RETURN

In accordance with the Act, the annual return in the prescribed format is available at Companys website at the following link : https://www.3i-infotech.com/investors/under Corporate Governance in the Investors section.

CAPITAL

a) Preference Share Capital:

During the year under review, the Company has not allotted any preference shares to any of its Members.

As on March 31, 2021, the preference share capital of the Company was Rs 7,027,607,980 consisting of 130,000,000 Class A Preference Shares of Rs 5/- each and 1,275,521,596 Class B Preference Shares of Rs 5/- each.

Pursuant to the terms agreed for sale of product business on a slump sale basis, the Board of Directors at their meeting held on January 22, 2021, approved amendment in terms of Class A and Class B Preference Shares, subject to approval of Preference Shareholders. The Company sought approval of preference shareholders for early redemption vide postal ballot, results of which were declared on March 2, 2021.

Accordingly, Class A and Class B Preference Shares were redeemed on May 27, 2021, except one class B preference shareholder.

b) Equity Share Capital:

1) Allotment under Employee Stock Options Scheme (ESOS):

The Company has not allotted any shares under ESOS during the year.

2) Allotments against conversion of Foreign Currency Convertible Bonds (FCCBs):

During the year, the Company has not allotted any Equity Shares against conversion of FCCBs.

The Company has neither issued equity shares with differential rights as to dividend, voting or otherwise nor any shares (including sweat equity shares) to the employees of the Company under any Scheme.

EMPLOYEES STOCK OPTION SCHEMES

As per SEBI Circular (CIR/CFD/POLICYCELL/2/2015) dated June 16, 2015 relating to requirements specified under the SEBI (Share Based Employee Benefits) Regulations 2014, details of the Employee Stock Option Schemes (ESOS) of the Company are given in Annexure III to this Report.

The Company has received a certificate from the Auditors of the Company that the share based scheme(s) are implemented in accordance with the SEBI (Share Based Employee Benefits) Regulations 2014 and the same is available for inspection by Members in electronic mode.

PUBLIC DEPOSITS

During the year, the Company has not invited/accepted any deposit under Sections 73 and 76 of the Act. DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMP)

During the year under review and thereafter, till the date of this Report, the following changes happened in the composition of the Board of Directors of the Company:

1. On June 5, 2020, due to amalgamation of Allahabad Bank with Indian Bank, Mr. Avaya Kumar Mohapatra (DIN: 07811921), Nominee Director (Allahabad Bank) resigned from the Board of Directors following withdrawal of his nomination by Allahabad Bank due to his transfer to Hyderabad.

2. On July 30, 2020, Dr. Shashank Desai (DIN: 00143638) resigned as an Independent Director from the Board of Directors of the Company due to his current and future work commitments. Dr. Desai also confirmed in his resignation letter that there were no other material reasons behind his resignation other than the reason mentioned above.

3. Mr. Pravir Kumar Vohra (DIN: 00082545) was appointed as an Additional Director (designated as Non-Executive Director) effective September 1, 2020. The Members at the Annual General Meeting held on December 23, 2020 regularized the appointment of Mr. Pravir Kumar Vohra as a Non-Executive Director effective September 1, 2020 and also approved payment of fees apart from sitting fees.

4. The tenure of Mr. Ashok Shah (DIN: 01194846) as an Independent Director ended on September 30, 2020. Accordingly, he was appointed as an Additional Director (designated as an Independent Director) with effect from October 1, 2020 to hold office for a second term as an Independent Director of the Company. In the opinion of the Board, Mr. Ashok Shah possesses requisite qualification, expertise and experience (including proficiency) to function effectively in the capacity of an Independent Director and add value to the Board of Directors of the Company. Hence, on the recommendation of Nomination & Remuneration Committee, the Board recommended his re-appointment as an Independent Director for the approval of the Members of the Company. The Members at the Annual General Meeting held on December 23, 2020, approved re-appointment of Mr. Ashok Shah as an Independent Director for a second term of 5 years effective October 1, 2020.

5. Mr. Sandeep Kumar Gupta (DIN-08911963) was appointed as Nominee Director - Indian Bank effective October 22, 2020 pursuant to nomination letter dated September 1, 2020 received from Indian Bank.

6. On October 25, 2020, Ms. Anjoo Navalkar (DIN-00270356) resigned as a Non-Executive Director from the Board of Directors of the Company due to her current and future work commitments.

7. Ms.Zohra Chatterji (DIN-01382511) was appointed as Additional Director (designated as an Independent Director ) with effect from March 24, 2020. The Members, at the Annual General Meeting held on December 23, 2020, approved the appointment for Ms. Zohra Chatterji as an Independent Director of the Company for a term of 5 years effective March 24, 2020.

8. The Board at its meeting held on February 19, 2021 approved the appointment of Mr. Thompson Gnanam (DIN-07865431) effective March 18, 2021 as an Additional Whole-time Director (to be designated as CEO and MD- Designate) on the Board of the Company and also approved his terms of remuneration. Later, Mr. Thompson Gnanam was appointed as Managing Director and Global CEO effective April 1, 2021. The Members, vide resolution passed through Postal Ballot on September 19, 2021 also approved his appointment and terms of remuneration as Managing Director and Global CEO for a period of 5 years effective April 1, 2021.

9. Mr. Padmanabhan Iyer (DIN -05282942) resigned as Managing Director and Global CEO and CFO of the Company on April 1, 2021 as required under the product business sale transaction of the Company and was redesignated as Non-Executive Director of the Company effective April 1, 2021. Further, he resigned as Non-Executive Director on June 9, 2021.

10. Mr. Avtar Singh Monga (DIN-00418477) was appointed as an Additional (Independent Non-Executive) Director effective April 1, 2021. His appointment was approved by the shareholders vide Postal Ballot resolution passed on September 19, 2021.

As on the date of this Report, the Board of the Company consists of 7 Directors, out of which three are Independent Directors including [one woman Independent Director], two are Nominee Directors, one is Non-Executive Director and one is an Executive Director.

In accordance with Section 152 (6) and other applicable provisions of the Act read with Articles of Association of the Company, Mr. Pravir Kumar Vohra (DIN: 00082545) is liable to retire by rotation at the ensuing AGM of the Company and, being eligible, has offered himself for re-appointment. The Board recommends his re-appointment at the ensuing AGM for your approval. As stipulated under Regulation 36 of SEBI LODR, a brief profile of the Director proposed to be re-appointed is given in the Notice convening the ensuing AGM, which is included in the Annual Report 2020-21.

None of the Independent Directors have had any pecuniary relationship or transaction with the Company during Financial Year 2020-21, except to the extent of their directorship. None of the Directors or KMP of the Company is related inter-se, except to the extent of Directorship held by Mr. Pravir Kumar Vohra & Zohra Chatterji in the same company.

DECLARATION BY INDEPENDENT DIRECTORS

The Company has received declaration from each independent director as per provisions of Regulation 25(8) of SEBI LODR and Section 149 (7) of the Act, that he/she meets the criteria of independence laid down in Regulation 16 (1)(b) read with Regulation 25(8) of SEBI LODR & Section 149 (6) of the Act.

NUMBER OF MEETINGS OF THE BOARD

Ten meetings of the Board of Directors were held during the year. The details of the same are given in Corporate Governance Report section that forms part of this Report. The intervening gap between two consecutive Board Meetings did not exceed 120 days.

POLICIES AS PER SEBI LODR

SEBI LODR mandated all Listed Companies to formulate certain policies. These policies are available on the website of the Company at https://www.3i-infotech.com/investors/ under "Corporate Governance" in the Investors section. The policies, list of which is given below, are reviewed periodically by the Board and amended from time to time:

• Whistle Blower Policy;

• Policy on Remuneration of Directors, Key Managerial Personnel and other Employees;

• Corporate Social Responsibility Policy;

• Policy for determining Material Subsidiaries;

• Policy for determination of Materiality of event or information;

• Policy on Materiality of Related Party Transactions and dealing with Related Party Transactions;

• Policy for Board Diversity;

• Policy for Preservation of Documents and

• Policy for Prohibition of Fraudulent and Unfair Trade Practices relating to securities.

POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION

The current policy is to have appropriate mix of Executive, Non-Executive and Independent Directors to maintain the independence of the Board. The Company has put in place a policy on Remuneration of Directors, Key Managerial Personnel (KMP) and other employees including criteria for determining qualifications, positive attributes, independence of directors and other matters provided under Section 178 (3) of the Act, the Policy can be viewed on the website of the Company by accessing the following link: https://www.3i-infotech.com/investors/ under "Corporate Governance" in the Investors section.

PERFORMANCE EVALUATION OF THE BOARD OF DIRECTORS

In terms of the provisions of the Act and SEBI LODR, your Company has laid down criteria for performance evaluation of Directors and Chairman of the Board and also the process for such performance evaluation. Schedule IV of the Act states that the performance evaluation of Independent Directors shall be done by the entire Board of Directors, excluding the Director being evaluated. The Companys policy relating to appointment and remuneration of Directors, KMPs and other employees, including criteria for determining qualifications, positive attributes and independence of a director are covered under the Corporate Governance Report, which forms a part of this Report.

It is a practice of the Board of Directors to annually evaluate its own performance and that of its committees and individual directors. Accordingly, the performances of the members of the Board as a whole and of individual directors during the year were evaluated as per provisions of the Act at the Board and Nomination and Remuneration Committee meetings held on November 8, 2021.

FAMILIARIZATION PROGRAMME FOR INDEPENDENT DIRECTORS

As per provisions of SEBI LODR and the Act, the Company has formulated Familiarization Programme for Independent Directors. The same is available on the website of the Company at https://www.3i-infotech.com/investors/ under "Corporate Governance" in the Investors section. At the time of appointment of an Independent Director, the Company issues a formal letter of appointment to an Independent Director outlining his/her role, function, duties, responsibilities, etc. The terms and conditions for appointment of Independent Directors are also available on the website of the Company at the location mentioned above.

The Board Members are provided with necessary documents/brochures, reports and internal policies to enable familiarizing them with the Companys procedures and practices. Periodic presentations are made at the Board Meetings on business performance updates of the Company, global business environment, business strategy and risk involved.

COMMITTEES OF THE BOARD

As on March 31, 2021, the Board has four mandatory committees:

i. Audit Committee,

ii. Nomination and Remuneration Committee,

iii. Stakeholders Relationship Committee and

iv. Corporate Social Responsibility Committee.

A detailed note on the composition of the Board and its committees is provided in the Corporate Governance Report.

As per recent amendments in Regulation 21 of SEBI LODR, top 1000 listed entities determined on the basis of market capitalization as on March 31, 2021 are required to constitute Risk Management Committee. Accordingly, the Board of Directors at its meeting held on October 25, 2021, has formed Risk Management Committee comprising Mr. Avtar Singh Monga (Chairperson ) , Mr. Ashok Shah and Mr. Thompson Gnanam.

VIGIL MECHANISM

In line with the provisions of the Act and SEBI LODR, the Company has devised and implemented a vigil mechanism in the form of "Whistle Blower Policy". As per the Policy, the Company has an internal committee comprising of the Head-HR and the Compliance Officer of the Company to oversee the functioning of the vigil mechanism as mandated by the Act and assist the Audit Committee thereunder. The Whistle Blower Policy framed by the Company is available on the website of the Company at https://www.3i-infotech.com/investors/ under Corporate Governance in the Investors section.

The detailed information regarding the committees of the Board, including composition of the Audit Committee, has been given in the Corporate Governance Report which forms an integral part of the Annual Report.

CONSOLIDATED FINANCIAL STATEMENTS

The Audited Consolidated Financial Statements presented by the Company include the financial results of its subsidiary companies, associates and joint ventures and form part of this Report. The Audited Consolidated Financial Statements have been prepared in accordance with the Indian Accounting Standards (referred to as "Ind AS").

INTERNAL FINANCIAL CONTROLS SYSTEMS AND THEIR ADEQUACY

Your Company has implemented adequate procedures and internal controls which provide reasonable assurance regarding reliability of financial reporting and preparation of financial statements. Your Company also ensures that internal controls are operating effectively.

STATUTORY AUDITORS

GMJ &Co., Chartered Accountants, were appointed as the Statutory Auditor of the Company to hold office for a period of five consecutive years from the conclusion of the 23rd Annual General Meeting held in 2016, till the conclusion of the 28th Annual General Meeting to be held in 2021.

Under Section 139 of the Act and the Rules made thereunder, the Company can appoint an audit firm as an auditor for two consecutive terms of five years and accordingly, the Board of Directors on recommendation of the Audit Committee has approved re-appointment of GMJ & Co. as Statutory Auditor of the Company for a second term of five years i.e. from the conclusion of the 28th Annual General Meeting to be held in 2021 , till the conclusion of the 33rd Annual General Meeting to be held in 2026, subject to the approval of the Shareholders.

The Company has received a consent from GMJ & Co. to act as a Statutory Auditor of the Company and a letter that their appointment is within limits prescribed under Section 141(3)(g) of the Act and that they are not disqualified. The Directors recommend their re-appointment for second term of five years.

STATUTORY AUDITORS REPORT

The Auditors Report for the Financial Year 2020-21 does not contain any qualifications, remarks or reservations. The Auditors Report is enclosed with the financial statements in this Annual Report.

SECRETARIAL AUDITORS REPORT

Pursuant to the provisions of Section 204 of the Act and Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company had appointed M/s. BNP & Associates, Practicing Company Secretaries, to undertake the Secretarial Audit of the Company for the financial year 2020-21.

The Secretarial Audit Report is appended as Annexure IVto this Report. The Secretarial Audit Report does not contain any qualifications, reservations or adverse remarks.

REPORTING OF FRAUD BY AUDITORS

During the year under review, neither the statutory auditor nor the secretarial auditor has reported to the Audit Committee any instances of fraud committed against the Company by its officers or employees under Section 143 (12) of the Act, the details of which would need to be reported in the Boards Report.

SECRETARIAL STANDARDS

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

LISTING ON STOCK EXCHANGES

The Companys equity shares are listed on BSE Limited (BSE) and National Stock Exchange of India Limited (NSE) and its Foreign Currency Convertible Bonds (FCCBs) are listed on Singapore Exchange Securities Trading Limited (SGX).

CONSERVATION OF ENERGY

Although the operations of the Company are not energy intensive, the management is highly conscious of the criticality of the conservation of energy at all operational levels. The requirement of disclosure of particulars with respect to conservation of energy as prescribed in Section 134(3)(m) of the Act read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is not applicable to the Company and hence are not provided.

TECHNOLOGY ABSORPTION, ADOPTION AND INNOVATION

The Company continues to use the latest technologies for improving the productivity and quality of its services and products.

During the year, your Company has taken the following technology initiatives:

• Information and Cyber Security Awareness programmes;

• Strengthened its IPRs through technology innovation and appropriate security controls;

• Improved utilization and delivery productivity by use of LEAN IT techniques for project delivery and

• Partnerships with major technology providers and publishers for win-win relationships and go-to-market strategies.

RESEARCH AND DEVELOPMENT (R & D)

The solutions offered by the Company for various market segments are continuously developed and upgraded through the Global Development Centers (GDCs).

The GDCs function as the product research and development arm of the Company and focus on developing and expanding the Companys products and IPRs.

With a focus to further enhance the Companys software products based on market needs, the GDCs work in line with the Companys strategy for growth.

Expenditure on R & D Rs in Crores

Particulars 2020-21 2019-20
Revenue Expenditure 22.59 22.00
Capital Expenditure - -
Total 22.59 22.00
Total R&D expenditure as a percentage of total standalone revenue 10.87% 6.50%

QUALITY

The Company is committed to providing innovative and high quality products and services that meet or exceed customer expectations.

This includes-

• Maintaining a quality focus on continuous improvement to our Products, Process and Services and

• Process adherence and governance ensuring lower Defect & On Time delivery.

The Companys Quality Management System (QMS) addresses process required for entire Software Development Cycle (SDLC) and Project Management Life Cycle (PMLC) supported with industry standard templates and guidelines to ensure disciplined project execution, thereby transforming business from taking corrective & preventive measures to the state of predicting outcomes. This framework is designed based on the CMMi Process framework to enhance productivity and to reduce inefficiencies.

The Company has achieved CMMi Level 3 certification to meet the Companys commitment towards quality & business process with further plans to extend the certification to CMMi Level 5.

FOREIGN EXCHANGE EARNINGS AND OUTGO

a) Activities relating to exports, initiatives taken to increase exports , development of new export markets for products and services and export plans

Around 58.35% of the revenue of the Company is derived from exports.

b) Foreign Export earnings and expenditure

During the year 2020-21, the expenditure in foreign currencies amounted to Rs 5.82 crores on account of cost of professional charges, cost of outsourced services and bought out items, travelling and other expenses and interest (excluding expenditure incurred by UAE Branch). During the same period, the Company earned an amount equivalent to Rs 121.23 crores in foreign currencies as income from its operations abroad (excluding income from UAE Branch).

PERSONNEL

The Company has continued to improve the quality of Human Resource. The key facet has been better levels of productivity as compared to earlier years which has contributed in operating financial parameters showing a strong uplift. Regular interactions and career enhancements by way of bigger roles to talented employees have helped in strengthening the confidence of the employees in the tough financial scenario of the Company. The talent pipeline is looking healthy though attrition and retention remains a challenge for the industry and more so for the Company.

Your Company will continue to focus and build the human potential which would help in improving operating parameters in the coming year.

In terms of the provisions of Section 197(12) of the Act read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing the names and other particulars of the employees drawing remuneration in excess of the limits set out in the said rules is provided in a separate annexure forming part of this Report. Having regard to the provisions of the first provision to Section 136(1) of the Act, the Annual Report excluding the aforesaid information is being sent to the Members of the Company. In terms of Section 136, the said annexure is open for inspection at the Registered Office of the Company. Any shareholder interested in obtaining a copy of the same may write to the Company Secretary.

Disclosures pertaining to the remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are provided in this Report as Annexure V.

Prevention of Sexual Harassment at Workplace

The Company has in place a policy aiming at prevention of sexual harassment at all workplaces of the Company in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the rules thereunder. All employees (permanent, contractual, temporary, trainees) are covered under this Policy. The Company has complied with provisions relating to constitution of Internal Complaints Committee by setting up such Committee in the Company in accordance with the provisions of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 to consider and redress complaints received with respect to sexual harassment. The details of complaints received during the year are given separately in Corporate Governance Report.

CORPORATE SOCIAL RESPOSIBILITY (CSR)

In compliance with Section 135 of the Act read with the Companies (Corporate Social Responsibility Policy) Rules, 2014, the Company has constituted a CSR Committee. A brief outline of the CSR policy of the Company and the statutory disclosures with respect to CSR Committee and an Annual Report on CSR activities for FY 2020-21 as required under Rule 8 (1) of the CSR Rules are set out in Annexure VI of this Report. The CSR Policy as recommended by CSR Committee and as approved by the Board is available on the website of the Company at https://www.3i-infotech.com/investors / under "Corporate Governance" in Investors section.

During the year, the Company has not spent any amount on CSR activities in view of losses incurred as per provisions of the Act.

MAINTENANCE OF COST RECORDS

Maintenance of cost records as specified by the Central Government under the provisions of Section 148(1) of the Act is not required for the business activities carried out by the Company.

DISCLOSURE REQUIREMENTS

Disclosures required under SEBI LODR are provided in the Corporate Governance Report. The Corporate Governance Report along with auditors certificate thereon, BRR and the Management Discussion and Analysis Report forms part of this Report.

FUTURE OUTLOOK

The business outlook and the initiatives proposed by the management to address its financial risks have been discussed in detail in the Management Discussion and Analysis Report which forms a part of this Report.

FORWARD LOOKING STATEMENTS

This Report along with its annexures and Management Discussion & Analysis Report contains forwardlooking statements that involve risks and uncertainties. When used in this Report, the words anticipate, believe, estimate, expect, intend, will and other similar expressions as they relate to the Company and/or its businesses are intended to identify such forward looking statements. The Company undertakes no obligation to publicly update or revise any forward looking statements, whether as a result of new information, future events, or otherwise. Actual results, performances or achievements could differ materially from those expressed or implied in such forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements that speak only as of their dates. This Report should be read in conjunction with the financial statements included herein and the notes thereto.

DIRECTORS RESPONSIBILITY STATEMENT

As required under Section 134(5) of the Companies Act, 2013, your Directors hereby confirm that:

a) in preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

b) they 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 as at March 31, 2021 and profit of the Company for the financial year ended on that date;

c) they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

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 are operating effectively and

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

Further, the financial statements are prepared in accordance with Ind AS as prescribed under Section 133 of the Act read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 and Companies (Indian Accounting Standards) Amendment Rules, 2016. Based on the reviews of internal, statutory and secretarial auditors, external consultants, the management and respective committees of the Board, the Board is of the opinion that the Companys system of internal financial controls was adequate and the operating effectiveness of such controls was satisfactory during the financial year 2020-21.

ACKNOWLEDGEMENTS

The Directors are thankful to the Members for their confidence and continued support. The Directors are grateful to the Central and State Government, Stock Exchanges, Securities & Exchange Board of India, Reserve Bank of India, Customs and other government authorities, Lenders, FCCB holders and last but not the least, its trusted clients for their continued support.

The Directors would like to express their gratitude for the unstinted support and guidance received from alliance partners and vendors.

The Directors would also like to express their sincere thanks and appreciation to all the employees for their commendable team work and professionalism.

For and on behalf of the Board
Sd/- Sd/-
AshokShah Mr. Thompson Gnanam
Chairman Managing Director and Global CEO
November 8, 2021 at Navi Mumbai